The Biltmore Funds
Biltmore Equity Fund
Biltmore Quantitative Equity Fund
Biltmore Equity Index Fund
Biltmore Special Values Fund
Biltmore Emerging Markets Fund
Biltmore Balanced Fund
Biltmore Fixed Income Fund
Biltmore Short-Term Fixed Income Fund
The Biltmore Municipal Funds
Biltmore Georgia Municipal Bond Fund
Biltmore North Carolina Municipal Bond Fund
Biltmore South Carolina Municipal Bond Fund
Combined Annual Report
November 30, 1996
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Make Yourself ComfortableSM
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PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the combined Annual Report to Shareholders for certain
portfolios of The Biltmore Funds and The Biltmore Municipal Funds. We combined
information about these funds in one report to provide a more efficient,
cost-effective way to communicate with shareholders about fund activity.
This Report covers the 12-month period from December 1, 1995 through November
30, 1996. It includes an investment review by each fund's portfolio manager,
which describes economic and market conditions and their impact on fund
strategy. Following the investment review are a complete list of fund holdings
and the financial statements.
This report also contains information about Class B Shares and Class Y Shares
which were added to certain Biltmore funds. The information for these classes
covers the period from July 22, 1996, when these share classes began operations,
through November 30, 1996.
As shown by the fund-by-fund highlights for Class A Shares, the 12-month period
was characterized by a continued strong investment environment for stocks, while
bond performance overall was less strong due to interest rate volatility.
THE BILTMORE FUNDS
Although November marked the 69th month of economic expansion, growth was
volatile in 1996. Concerns over a possible recession late in 1995 and early this
year abruptly gave way to concerns of excessive growth in the late spring of
1996. By the end of third calendar quarter, however, robust economic activity
subsided, and growth continued at a more moderate level.
Despite the turbulent economy, the US equity markets had another great year. At
the onset of the year, fundamentals suggested only modest returns for 1996 due
to signs of decelerating corporate earnings growth, a sluggish economy, and the
blockbuster 1995 stock market performance. The bull market continued at a
fervent pace, however, as record inflows of money into equity mutual funds
provided liquidity that helped buoy the stock markets. The rise of interest
rates in the summer disquieted the markets temporarily, but stocks continued to
climb as inflation remained constrained throughout the year.
Signs of increasing economic activity in the spring of 1996 did not bode well
for bond markets. January marked the last positive return month for fixed income
markets until July because the market was continually unsettled by signs of a
strengthening economy. Yields continued to rise, and surpassed 7% in August, due
to mixed economic signals. Investors finally were convinced that inflation would
remain dormant, as economic growth moderated in September. Bonds posted strong
returns during the last quarter, but good performance late in the year was
largely offset by earlier losses.
Fixed income market participants have increasingly become more anticipatory of
future economic conditions and actions of the Federal Reserve Board (the
"Federal Reserve"). Speculation created quite a volatile year for the bond
market, despite the fact that the Federal Funds rate remained pegged at 5.25%
since January.
As GDP growth accelerated in the second quarter of 1996, investors seemed
convinced that inflation would also accelerate. Even though inflation continued
to remain subdued, they pushed 30-year Treasury yields over 7% by August. Only
after the economy showed signs of moderating did interest rates come down.
November ended with long rates at 50 to 75 basis points higher than a year ago.
BILTMORE EQUITY FUND pursues growth of principal and income through a portfolio
of blue-chip stocks issued by some of America's largest, best-known companies.
In particular, the fund's manager seeks stocks issued by companies that are both
undervalued and have good growth opportunities.
BILTMORE QUANTITATIVE EQUITY FUND pursues growth of principal and income by
investing in a portfolio of stocks issued by large, established companies across
the entire industrial spectrum.
BILTMORE EQUITY INDEX FUND pursues a total return that approximates that of the
stock market as measured by Standard & Poor's 500 Index*--a classic benchmark of
stock market performance. As a result, the fund's extensive portfolio contained
stocks issued by some of America's largest, best-known companies.
*The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation and financial and public utility companies.
Investments cannot be made in an index.
BILTMORE SPECIAL VALUES FUND pursues growth of principal by investing in a
diversified portfolio of small-company stocks.** Unlike many other funds that
invest in small-company stocks, this fund is managed through a highly
disciplined approach. Its manager seeks stocks issued by well-capitalized, and
well-run small companies that are selling at less than their estimated long-term
values.
BILTMORE EMERGING MARKETS FUND pursues long-term capital appreciation by
investing in stocks of foreign companies located in emerging market
countries.***The fund's manager uses a unique "two-tier" approach to select
stocks for the fund that offer greater diversification than most emerging market
funds, with the opportunity for better protection from unexpected negative
developments in any one country. At the end of the period, the fund's portfolio
contained stocks issued by companies from 27 countries.
BILTMORE BALANCED FUND pursues a popular investment objective--long-term growth
of principal and current income-- by investing in a combination of quality
stocks and bonds.
BILTMORE FIXED INCOME FUND pursues a high level of total return from a
diversified portfolio of income-producing securities, including U.S. Treasury
securities, government agency securities, and corporate bonds.
BILTMORE SHORT-TERM FIXED INCOME FUND pursues a high level of income from a
diversified portfolio of short-term, income-producing securities designed to
provide an income stream and cushion shareholders against volatility during
periods of interest rate increases.
THE BILTMORE MUNICIPAL FUNDS
The municipal bond market was dominated by two separate interest rate cycles
during 1996. The first part of the year saw high grade, thirty-year municipal
bond yields rise from 5.3% at the end of 1995 to 5.8% on June 30, 1996. However,
as inflation fears moderated and the Federal Reserve refrained from raising
short-term interest rates, the long municipal bond yield fell back to 5.3%.
Long-term municipal bond issuance year-to-date through November 1996 totaled
$160 billion, representing a 13% increase over the same period last year. A
portion of this year's issuance represented refunding volume as issuers took
advantage of the lower interest rates in the second half of the year to defease
their higher coupon debt.
Relative value in the municipal market was found in the housing and high-yield
sectors in 1996. Housing bonds traditionally perform well in a rising interest
rate environment due to their higher coupon and sinking fund structures. The
high-yield sector benefited from increased demand on the part of retail
customers desiring higher tax-free income. Issues that underperformed during the
year were utilities and par bonds with less than 10 years of call protection.
The utility sector continues to suffer from high fixed costs and legislative
efforts to allow open competition for retail customers' power business.
BILTMORE GEORGIA MUNICIPAL BOND FUND pursues monthly income exempt from federal
regular income tax and Georgia state income tax.+ The fund invests in a
portfolio of bonds issued by municipalities across Georgia that are rated A or
higher by nationally recognized rating agencies.
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND pursues monthly income exempt from
federal regular income tax and North Carolina state income tax.+ The fund
invests in a portfolio of bonds issued by municipalities across North Carolina
that are rated A or higher by nationally recognized rating agencies.
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND pursues monthly income exempt from
federal regular income tax and South Carolina state income tax.+ The fund
invests in a portfolio of bonds issued by municipalities across South Carolina
that are rated A or higher by nationally recognized rating agencies.
**Small cap stocks have historically experienced greater volatility than
average.
***Foreign investing involves special risks including currency risk, increased
volatility of foreign securities, and differences in auditing and other
financial standards. Emerging markets economic structures may be less diverse
and mature, and their political systems may be less stable than an
established market.
+Income may be subject to the federal alternative minimum tax.
Thank you for pursing your financial goals through one or more of these funds.
As we begin 1997, we renew our commitment to bring you the highest level of
service possible as we keep you up-to-date on your investment.
Sincerely,
John W. McGonigle
President
January 15, 1997
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OVERVIEW
BILTMORE EQUITY FUND SHAREHOLDER:
Equity strategy consistently underweighted positions in the utility,
communication services and consumer cyclical sectors throughout the year.
Deregulation in the once regionally-monopolized markets and undifferentiated
products and services have lead to an escalation in price wars among utility and
communication companies. We have been underweighted in consumer cyclicals
because high consumer debt levels suggested slower spending in the near term.
Furthermore, we believe that domestic consumer consumption is undergoing a
secular decline because shifting demographics and retirement concerns have
renewed the focus on saving.
We are currently most overweighted in the technology sector as we have continued
to allocate more funds to this sector over the year. Most improvements in
productivity should be directly attributable to technology investments. As many
corporations have yet to implement much of these "productivity enhancers," and
as the technology revolution continues to unfold, we believe that technology
companies will continue to experience significant earnings growth.
A core position in the technology sector is Intel, a leading manufacturer of
microprocessors and motherboards. Despite falling microprocessor/memory prices,
and a decline in orders during the third quarter, Intel's established dominance
in the microprocessor market is permitting the company to grow earnings at an
impressive rate. We believe that future revenue prospects remain healthy, as
Intel is expected to introduce two new chips in 1997 that should vastly increase
multimedia performance. Demand for this microprocessor should be healthy as more
software applications, in business as well as home, are turning toward
multimedia.
During the 12-month period ended November 30, 1996, the fund's Class A Shares
had a total return of 25.56% based on net asset value, and 19.90% based on
maximum offering price.* By comparison, the Lipper Growth & Income fund Average
had a total return of 23.79% for the same time period.** The fund's net asset
value for Class A Shares increased by 16% to reach $14.81 at the end of the
period. Shareholders of Class A Shares also received $0.22 in dividends, and
$0.73 in capital gains per share. The fund's net assets stood at approximately
$151 million at the end of the period.
BILTMORE QUANTITATIVE EQUITY FUND SHAREHOLDER:
The Biltmore Quantitative Equity Fund employs a quantitative model to discover
attractively valued stocks, using a variety of factors which have historically
lead to strong equity performance. Some of the factors in the quantitative model
pertain to the price that one would pay for a company relative to various
measures of value (such as dividends, book value, earnings, etc.). Other inputs
of the quantitative model deal with a company's growth prospects (such as
earnings growth, changes of analysts' estimates, etc.). By analyzing both growth
and value characteristics within the quantitative framework, the fund seeks to
do well in a wide variety of market environments.
In 1996, numerous factors relating to the price one would pay for a company
(value characteristics) did not prove to be good predictors of future share
price movements. Predictors relating to earnings growth and the direction of
analysts' earnings estimates (growth factors), however, were fairly accurate. In
general, fiscal 1996 was a year where investors were willing to pay higher and
higher prices for companies capable of generating a growing stream of earnings.
Since the Biltmore Quantitative Equity Fund places substantial weight on both
value and growth factors, the fund faced a difficult environment.
However, the balance of growth and value investing provided the fund's Class A
Shares a total return of 23.74% based on net asset value, and 18.15% based on
maximum offering price, for the 12-month period ended
November 30, 1996.* By comparison, the Lipper Growth Fund Average had a total
return of 21.09% for the same time period.** The fund's net asset value for
Class A Shares increased by 19% to reach $15.67 at the end of the period.
Shareholders of Class A Shares also received a total of $0.21 in dividends, and
$0.24 in capital gains per share. The fund's net assets ended the period at
approximately $169 million.
BILTMORE EQUITY INDEX FUND SHAREHOLDER:
July was the only month that the S&P 500 Index incurred a loss during the fiscal
year ended November 30, 1996. Amidst fears of higher interest rates and rising
valuation levels, a slight correction of 4% occurred. Afterwards, in the last
four months of the fiscal year, the equity market rose a significant 19.3%.
Communication services companies continually faced a difficult operating
environment as deregulation permitted higher levels of competition and incited
price wars. Favorable energy commodity pricing assisted energy companies to
perform strongly. Financials posted the best sector performance due to
continuing merger and acquisition activity, favorable interest rates, and a
general increase in demand for financial services. The technology sector
continued to post significant gains as both corporate and consumer demand
remained strong.
During the 12-month period ended November 30, 1996, the fund's Class A Shares
had a total return of 27.19% based on net asset value, and 21.48% based on
maximum offering price.* By comparison, the Lipper S&P 500 Fund Average had a
total return of 27.13% for the same time period.** The fund's net asset value
for Class A Shares increased by 17% to reach $15.98 at the end of the period.
Shareholders of Class A Shares also received a total of $0.31 in dividends and
$0.78 in capital gains per share. The fund's net assets were approximately $232
million at the end of the period.
BILTMORE SPECIAL VALUES FUND SHAREHOLDER:
Before going over the year's activities and the fund's current position, we
would like to explain in some detail the approach used in managing our fund. The
fund is aggressive, but has as its touchstone a set of conservative investment
principles. The conservative principles through which we operate are intended,
although not guaranteed, to protect our capital from long-term loss. The
expectation is, that over time, high returns will accrue due to our
aggressiveness. We are as concerned with avoiding the loss of capital as we are
with its enhancement. While it may be exciting to watch the high wire act at the
circus working without a net, we believe that it's much less fun to watch your
hard earned capital invested in the same way.
Since the fund invests in small companies, it is aggressive by nature. Small
firms often have customers, suppliers and competitors that have far more
economic power than they do. In that regard, their businesses tend to be more
fragile than the companies found in larger capitalization portfolios.
Within this universe, we strive to take advantage of situations where we believe
that company shares have been mispriced. First, our investments are often in
scarcely known companies with little, if any, analyst coverage, and whose shares
may not be very liquid. We deal with this by thoroughly reviewing the public
disclosures made by the company and by learning as much as we can about the
firm's operations from our own research. We believe that bargains are only
available to those who are willing to conduct some investigative research.
Second, the companies we invest in often are mired in a poor business
environment and have poor prospects over the immediately foreseeable future.
Uncertainty can lead to fear and low valuations, but also to potentially good
investment opportunities to those who have the ability, fortitude and patience
required to identify, buy and hold them. Finally, we frequently invest in
companies undergoing dramatic changes in their business profile. Since future
results and values are uncertain in these situations, conventional analysis is
often of limited use. The resulting misconception of business values may lead to
undervalued securities and potentially good investments. The opportunities for
gain from these factors are large, but so too, are the risks for loss if they
are poorly analyzed, or if unforeseeable events arise.
The overall investing environment of 1996 was clearly supportive of value
realization in the stock market. Domestic economic conditions remained strong
enough to produce high levels of corporate profitability, but moderate enough to
keep inflation tame. Domestic and international monetary conditions were ideal
too, with excess liquidity finding its way into the financial markets.
Fiscal 1996 was another great year for the fund. Time and time again, our
investments reached our objectives more rapidly than we had expected. About 28
companies held by the fund provided returns of near 50% or more between 12/31/95
and 11/30/96. Some of these were held throughout the period; some were held on
12/31/95 and sold during the year; and some were bought and sold during the
year.
While there are companies from many different industries in the "winners" list,
the energy companies stand out in number. Shares of companies in the oil service
industries appreciated strongly in 1996, and the fund had a large investment in
these companies. This strategy dates back to the spring of 1994, when we
discovered that a number of these companies were selling in the market for less
than their liquidation values, which were based on depressed asset values. The
companies were mired in a poor environment, but had strong balance sheets and
were generally operating at break-even cash flows. We believed that the supply
and demand woes that had plagued the industry for much of the previous decade
were set to improve. We expected that we might have to wait for maybe three to
five years for a substantial reward. Instead, the industry began a recovery in
the fall of 1995, which had greatly accelerated by the spring of 1996. Stock
prices soared, and we began selling off our investments in the industry during
the year as stock prices reached what we believed were fair long-term levels.
Returns were greater than anticipated.
During 1996 we invested in the semiconductor and semiconductor equipment
industries. Even though these industries have grown rapidly over the past
several years, we still believe that they have plenty of growth ahead. It is,
however, an area of the economy that is prone to boom and/or bust cycles. The
most recent boom phase began to give way to weakness in late 1995. Prices in
many product classes were sliced, and capital expenditure programs were diced.
After stock prices were mauled from the fall of 1995 through the early summer
1996, we identified a number of financially strong participants with competitive
product offerings, the stock prices of which were selling at very depressed
levels. We considered these to be good values given our positive long-term
beliefs about the industry, and through November, these investments have worked
out well. Industry prospects still look poor for the immediate future, but a
brightening can be seen on the horizon. Should this brightening fade, the gains
we've experienced so far will most likely disappear. We anticipate, however,
that over a three to five year holding period, returns from our entry points
should be acceptable.
Currently, select steel company shares look interesting. Stock prices for firms
in this industry have eroded significantly over the past two years, as there has
been plenty for investors to fret about. An inventory glut in 1995 was
exacerbated by fears over new capacity and foreign imports in 1996. The subdued
domestic demand for steel is also nagging investors. However, we believe that
the global demand for steel is intact and will grow at a two to three percent
annual rate over the long-term. The current problems faced by the steel industry
are temporary concerns in our view, and we maintain a positive outlook. We have
found several companies with good quality mills, strong balance sheets, and
stock prices that offer the potential for long-term returns.
The fund rewarded the shareholders of Class A Shares with a total return of
39.78% at net asset value, and 33.53% at maximum offering price.* The Lipper
Small Company Fund Average produced a total return of 19.76% for the same time
period.** The fund's Class A Shares showed a 20.08% three year annual return
based on net asset value, and a 18.26% three year annual return based on maximum
offering price.* These results compare well to the Russell 2000 Index, which had
a three year annualized return of 14.0%. (The Russell 2000 Index is an
unmanaged, popularly used index that measures returns of small capitalization
stocks. Investments cannot be made in an index.) The fund's average annual total
return since inception is 17.40% at net asset value, and 15.90% at maximum
offering price.* The fund's net asset value for Class A Shares increased by 29%
to reach $15.67 at the end of the period. The fund also paid $0.08 in dividends
and $0.91 in capital gains per share to shareholders of Class A Shares. The
fund's net assets reached approximately $65 million at the end of the period.
BILTMORE EMERGING MARKETS FUND SHAREHOLDER:
Emerging markets regained some degree of favor with investors in 1996. The
environment for investing in developing economies was largely positive this
year, as the global economy grew modestly, and US interest rates remained
relatively low. Economies in Latin America were recovering from the aftermath of
the Mexican peso devaluation and began to post positive economic growth trends.
Meanwhile, growth in Asia slowed in 1996 from its heady pace of earlier periods.
Developing countries in eastern and central Europe continued to move forward
with their economic reforms. Many of them are now seeing their difficult policy
choices bear fruit in sustained economic expansion. Overall, 1996 was a
favorable year for investing in emerging markets, with the IFC Investable Index+
of emerging markets posting a return of 12.67% over the past twelve months.
However, the investment environment through this year appeared to have been even
more positive for US equities than for emerging market stocks, with most US
stock indices showing gains of more than 20%. High quality earnings growth was
abundant in domestic shares, especially in the robust technology sector. Even
though emerging market equities had attractive valuations and high earnings
growth rates, the strongly-performing US equity markets proved to be notable
competition for investor dollars.
The fund was invested in 27 markets at the end of the period, employing the
unique style of management that we have termed "two-tier, equal weight." This
approach provides diversification by limiting the fund's exposure to a single
market while systematically allowing more exposure to smaller, less-traveled
markets where growth may be attractive. Relative to the standard emerging market
benchmarks (such as the IFC Investable), the fund intends to routinely make
smaller allocations to the largest markets and larger allocations to the smaller
markets. (The largest three markets account for nearly one-half of the IFC
Index). This approach is designed to attempt to protect the fund's net asset
value from unforeseen negative events in large markets. While the fund may
potentially benefit less by not having full exposure to larger markets when they
perform well, we believe that better diversification makes good long-term sense
given the unpredictable nature of risks in individual developing countries. In
1996, many of
+The International Finance Corporation Investable Index is an unmanaged market
capitalization-weighted index of over 1,000 securities in 26 emerging market
countries. Investments cannot be made in an index.
the fund's smaller markets, such as Poland and Hungary, performed well, helping
to offset the fund's lower exposure to large markets such as Brazil and Malaysia
that also performed strongly.
We constantly seek new investment opportunities in new securities and markets as
they begin to emerge. We explore markets where political and/or economic systems
are being reformed. We believe that this element of change is what creates
opportunities in developing countries. Many new markets having these
characteristics were incorporated into the fund over the past year. For example,
three new markets in eastern Europe were added at the start of 1996: Poland,
Hungary, and the Czech Republic. These countries are budding democracies that
have embraced free-market economics as the vehicle for improving the living
standards of their people. A portfolio manager's visit to these countries
earlier this year revealed a level of optimism that was infectious and economies
that were whirring with a highly-motivated class of new entrepreneurs. These
three markets were among the top performers in 1996. We will continue to seek
out new markets where the element of "change" appears to be strongly at work.
Will 1997 be "the year" for emerging markets? Our outlook for the coming year is
very positive. Emerging economies around the globe may be growing in 1997--not
just in Asia or in Latin America but also in Europe and Russia. Countries that
were forced to turn their eyes westward when their Eastern bloc trading
partners' economies collapsed may now look in either direction for export
opportunities. Asian growth should accelerate in some spots, most notably in
China, whereas Japan may be recovering too slowly to provide a great stimulus
for the region. Economies in Latin America that were heavily dependent on U.S.
demand are now more interdependent with the emergence of the Mercosur and Andean
Pact trade zones. We expect that all of the large economies of Latin America
will have synchronized growth for the first time in recent memory. And economic
expansion ultimately drives the true basis for equity performance--that is,
profit growth. Given the attractive valuations and strong earnings growth that
we expect in many emerging markets, this asset class may be difficult for
investors to ignore in 1997.
By the end of the period, the fund's Class A Shares achieved a total return of
12.45% at net asset value, or 7.39% adjusted for the sales charge,* and the net
asset value of Class A Shares increased by 12% to reach $11.67. Shareholders of
Class A Shares also received a total of $0.03 in dividends per share. The fund's
net assets ended the period at approximately $129 million.
BILTMORE BALANCED FUND SHAREHOLDER:
We kept the asset allocation in the fund consistent throughout the year with
approximately 57% of the fund's assets in equity securities, 40% in fixed income
securities, and 3% in cash.
Equity strategy consistently underweighted positions in the utility,
communication services and consumer cyclical sectors throughout the year.
Deregulation in the once regionally-monopolized markets and undifferentiated
products and services have lead to an escalation in price wars among utility and
communication companies. We have been underweighted in consumer cyclicals
because high consumer debt levels suggested slower spending in the near term.
Furthermore, we believe that domestic consumer consumption is undergoing a
secular decline because shifting demographics and retirement concerns have
renewed the focus on saving.
Fixed income markets experienced a difficult year. Because accelerating economic
growth was interpreted by many investors as a sign of an impending rise in
inflation, interest rates rose, and 30-year Treasury yields backed up to over 7%
by late summer. Inflation continued to remain low, but investors pushed yields
back down only after decelerating economic growth became readily apparent.
November ended with 30-year Treasury yields at 6.36%.
We are currently overweighted in the health care sector because companies should
be able to reap large rewards from the secular increase in demand due to the
aging baby boomer population. A core holding in the health care sector is
Bristol Myers-Squibb ("BMY"). BMY, one of the largest pharmaceutical companies
in the US, focuses on cardiovascular, anti-infective and anti-cancer drugs. The
company is adept at licensing drugs from other companies and marketing them
through its vast networks. BMY also has a significant market share in generic
drugs.
During the 12-month period ended November 30, 1996, the fund's Class A Shares
had a total return of 18.55% based on net asset value, and 13.23% based on
maximum offering price.* By comparison, the Lipper Balanced Fund Average had a
total return of 16.44% for the same time period.** The fund paid $0.38 in
dividends and $0.34 in capital gains per share to shareholders of Class A
Shares, while the net asset value of Class A Shares increased by 12% to reach
$13.30. At the end of the period, the fund's net assets stood at approximately
$256 million.
BILTMORE FIXED INCOME FUND SHAREHOLDER:
As we believed inflation, and hence interest rates, would remain low, we
positioned the portfolio with a duration that was 10% longer than the benchmark
for much of the year. The rise in interest rates dampened returns for the first
half of 1996. We benefited, however, from the decline in interest rates during
the second half of 1996.
Yield spreads between corporate grades tightened even further due to
ever-increasing optimism on the state of the economy. We overweighted Treasuries
versus corporates in the portfolio due to the tight spreads.
During the 12-month period ended November 30, 1996, the fund's Class A Shares
had a total return of 5.51% based on net asset value, and 0.72% based on maximum
offering price.* By comparison, the Lipper Intermediate Investment Grade Fund
Average had a total return of 5.38% for the same time period.** Dividends for
Class A Shares totaled $0.59 per share, and the fund's net assets stood at $181
million on the last day of the period.
BILTMORE SHORT-TERM FIXED INCOME FUND SHAREHOLDER:
The shorter end of the yield curve (0-2 years) remained fairly range bound as
the Federal Fund's rate remained stable at 5.25%. For much of the year, we
maintained portfolio duration of 1.7 years. We were heavily overweighted in
Treasuries because spreads between short corporate and Treasury issues were
minimal.
During the 12-month period ended November 30, 1996, the fund's Class A Shares
had a total return of 5.29% based on net asset value, and 2.70% based on maximum
offering price.* By comparison, the Lipper Short Investment Grade Fund Average
had a total return of 5.44% for the same time period.** Dividends of $0.60 per
share contributed to the fund's total return for Class A Shares for the period,
and the fund's net assets ended the period at approximately $118 million.
BILTMORE GEORGIA MUNICIPAL BOND FUND SHAREHOLDER:
There was a continued emphasis on credit quality during the year, with 90%
percent of the fund's holdings rated AA or better. In addition, approximately
50% percent of the fund was invested in insured bonds. All new purchases had at
least an A rating. The fund maintained a diverse portfolio of Georgia bonds with
an emphasis on revenue securities which represented over 50% of the portfolio.
In anticipation of lower interest rates, the portfolio duration was extended
during 1996 to 7.02 years, approximately 10% longer than the Lehman Brothers
State General Obligation Bond Index.+ In addition, the fund increased its
exposure to lower coupon high grade bonds with premium call provisions in an
effort to improve price appreciation in a falling interest rate environment.
During the 12-month period ended November 30, 1996, the fund's Class A Shares
had a total return of 4.97% based on net asset value, and 0.21% based on maximum
offering price.* By comparison, the Lipper Georgia Municipal Debt Fund Average
had a total return of 5.06% for the same time period.** Dividends for the fund's
Class A Shares totaled $0.47 per share for the period, while capital gains for
Class A Shares totaled $0.01 per share. The share price of Class A Shares (based
on net asset value) increased by $0.04, and the fund's net assets reached
approximately $14 million on the last day of the period.
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND SHAREHOLDER:
There was a continued emphasis on credit quality during the year, with 95% of
the fund's holdings rated AA or better. All new purchases had at least an A
rating. The fund maintained a diverse portfolio of North Carolina bonds with an
emphasis on General Obligations which represented over 40% of the portfolio. In
anticipation of lower interest rates, the portfolio duration was extended during
1996 to 7.1 years, approximately 10% longer than the Lehman Brothers State
General Obligation Bond Index.+ In addition, the fund increased its exposure to
lower coupon high grade bonds with premium call provisions in an effort to
improve price appreciation in a falling interest rate environment.
During the 12-month period ended November 30, 1996, the fund's Class A Shares
had a total return of 5.17% based on net asset value, and 0.42% based on maximum
offering price.* By comparison, the Lipper North Carolina Municipal Debt Fund
Average had a total return of 5.11% for the same time period.** Dividends for
Class A Shares of the fund totaled $0.45 per share for the period, while capital
gains distributions for Class A Shares of the fund totaled $0.05 per share. The
share price for the fund's Class A Shares (based on net asset value) increased
by $0.04, and the fund's net assets ended the period $42 million.
++The Lehman Brothers State General Obligation Bond Index is an unmanaged index
comprised of all state general obligation debt issues and is compiled without
regard to maturities. These bonds are rated A or better and represent a
variety of coupon ranges. Index figures are total returns calculated for one,
three, and twelve month periods as well as year-to-date. Total returns are
also calculated as of the index inception, December 31, 1979. Investments
cannot be made in an index.
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND SHAREHOLDER:
There was a continued emphasis on credit quality during the year, with 86% of
the Fund's holdings rated AA or better. In addition, approximately 67% of the
fund was invested in insured bonds. All new purchases had at least an A rating.
The fund maintained a diverse portfolio of South Carolina bonds with an emphasis
on revenue securities which represented over 40% of the portfolio. In
anticipation of lower interest rates, the portfolio duration was extended during
1996 to 7.02 years, which is approximately 10% longer than the Lehman Brothers
State General Obligation Bond Index+. In addition, the fund increased its
exposure to lower coupon high grade bonds with premium call provisions in an
effort to improve price appreciation in a falling interest rate environment.
During the 12-month period ended November 30, 1996, the fund's Class A Shares
had a total return of 5.54% based on net asset value, and 0.80% based on maximum
offering price.* By comparison, the Lipper South Carolina Municipal Debt Fund
Average had a total return of 5.11% for the same time period.** Dividends for
Class A Shares of the fund totaled $0.55 per share, capital gains for Class A
Shares totaled $0.03 per share, and the net asset value of Class A Shares stood
at $11.05 on the first and last day of the period. The fund's net assets reached
approximately $102 million at the period's end.
*Performance quoted represents 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.
**Lipper figures represent the average of the total returns reported by all the
mutual funds designated by Lipper Analytical Services, Inc. as falling into
the respective categories indicated. Lipper Analytical Services, Inc. ("LAS"),
Summit, New Jersey and Denver, Colorado, is publisher of statistical data
covering the investment company industry in the United States and overseas.
LAS is recognized as the leading source of data on open-end and closed-end
mutual funds and currently tracks the performance of approximately 20,000
investment companies.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE EQUITY FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Equity Fund (Class A Shares) (the "Fund") from May 7, 1993 (start of
performance) to November 30, 1996 compared to the S&P 500 Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The S&P 500 Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
Total return for shareholders purchasing shares of the Fund at net asset
value without a sales charge including accounts purchasing shares through the
Trust Division of the Wachovia Banks, is 25.56% for the year ended November
30, 1996 as reflected in the Financial Highlights section of the Fund's
prospectus.
+ The S&P 500 Index is not adjusted to reflect sales charges, expenses, or
other fees that the SEC requires to be reflected in the Fund's performance.
This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY FUND (CLASS B SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE EQUITY FUND (CLASS B SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Equity Fund (Class B Shares) (the "Fund") from July 23, 1996 (start of
performance) to November 30, 1996 compared to the S&P 500 Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund. The ending value
of the Fund reflects a 5.00% contingent deferred sales charge on any
redemption less than one year from the purchase date. The cumulative total
return would be 19.25% assuming no redemption during the same time period.
The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 Index has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index is not adjusted to reflect sales charges, expenses, or other
fees that the SEC requires to be reflected in the Fund's performance. This
index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE EQUITY FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Equity Fund (Class Y Shares) (the "Fund") from July 23, 1996 (start of
performance) to November 30, 1996 compared to the S&P 500 Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 Index has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index is not adjusted to reflect sales charges, expenses, or other
fees that the SEC requires to be reflected in the Fund's performance. This
index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--90.6%
AUTOMOBILE--0.6%
21,980 (b)LucasVarity PLC, ADR $ 931,403
-----------
COMPUTER SERVICES--1.9%
58,165 Electronic Data Systems Corp. 2,813,732
-----------
CONSUMER DURABLES--3.0%
7,700 American Greetings Corp.,
Class A 217,525
9,300 Chrysler Corp. 330,150
71,245 Ford Motor Co. 2,333,274
55,575 Newell Co. 1,722,825
-----------
Total 4,603,774
-----------
CONSUMER NON-DURABLES--8.3%
7,250 American Brands, Inc. 346,187
18,520 CPC International, Inc. 1,541,790
2,450 Coca-Cola Co. 125,256
6,510 Kellogg Co. 441,866
123,990 PepsiCo, Inc. 3,704,201
49,130 Philip Morris Cos., Inc. 5,066,531
3,450 R.J.R. Nabisco, Inc., Class A 133,688
11,770 Russell Corp. 338,388
20,800 Sara Lee Corp. 816,400
-----------
Total 12,514,307
-----------
CONSUMER SERVICES--2.4%
24,125 Disney (Walt) Co. 1,779,219
9,750 Sbarro, Inc. 254,719
32,930 Service Corp. International 992,016
6,255 Tribune Co. 541,058
-----------
Total 3,567,012
-----------
ELECTRONIC TECHNOLOGY--11.1%
35,595 (b)3Com Corp. 2,674,074
47,300 (b)Cabletron Systems, Inc. 1,909,737
27,400 (b)Cisco Systems, Inc. 1,859,775
48,815 Hewlett-Packard Co. 2,629,908
29,720 Intel Corp. 3,770,725
7,840 International Business
Machines Corp. 1,249,500
31,780 Linear Technology Corp. 1,497,633
10,460 Molex, Inc., Class A 368,715
8,695 Motorola, Inc. 481,486
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
ELECTRONIC
TECHNOLOGY--CONTINUED
1,835 United Technologies Corp. $ 257,359
-----------
Total 16,698,912
-----------
ENERGY MINERALS--4.8%
13,270 Amoco Corp. 1,030,084
6,600 Exxon Corp. 624,525
41,200 Mapco, Inc. 1,390,500
46,960 Occidental Petroleum Corp. 1,127,040
25,790 Phillips Petroleum Co. 1,163,774
11,650 Royal Dutch Petroleum Co.,
ADR 1,979,044
-----------
Total 7,314,967
-----------
FINANCE--12.9%
25,375 AMBAC, Inc. 1,738,187
33,872 American International Group,
Inc. 3,895,280
40,265 Chubb Corp. 2,184,376
29,021 Countrywide Credit
Industries, Inc. 837,981
8,545 Federal Home Loan Mortgage
Corp. 976,266
51,560 Federal National Mortgage
Association 2,126,850
52,350 First USA, Inc. 1,721,006
47,360 KeyCorp 2,480,480
22,200 MBIA Insurance Corporation 2,244,975
15,700 Providian Corp. 839,950
1,595 Wells Fargo & Co. 453,977
-----------
Total 19,499,328
-----------
HEALTH SERVICES--4.4%
14,250 Bergen Brunswig Corp., Class
A 388,312
88,927 Columbia/HCA Healthcare Corp. 3,557,080
123,267 (b)Tenet Healthcare Corp. 2,758,099
-----------
Total 6,703,491
-----------
HEALTH TECHNOLOGY--5.9%
23,325 Abbott Laboratories 1,300,369
24,790 American Home Products Corp. 1,592,757
43,870 Baxter International, Inc. 1,864,475
10,530 Becton, Dickinson & Co. 442,260
21,755 Bristol-Myers Squibb Co. 2,474,631
8,600 Merck & Co., Inc. 713,800
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
HEALTH TECHNOLOGY--CONTINUED
10,940 (b)Scherer (R.P.) Corp. $ 500,505
-----------
Total 8,888,797
-----------
INDUSTRIAL SERVICES--1.8%
16,950 Baker Hughes, Inc. 620,794
20,405 Schlumberger Ltd. 2,122,120
-----------
Total 2,742,914
-----------
NON-ENERGY MINERALS--1.7%
6,500 Aluminum Co. of America 413,562
6,500 Georgia-Pacific Corp. 472,875
16,485 Inland Steel Industries, Inc. 307,033
42,900 LTV Corp. 461,175
1,300 Phelps Dodge Corp. 94,413
11,305 Potash Corporation of
Saskatchewan, Inc. 852,114
-----------
Total 2,601,172
-----------
PROCESS INDUSTRIES--5.9%
700 Air Products & Chemicals,
Inc. 48,650
10,045 Dow Chemical Co. 841,269
11,150 Ecolab, Inc. 433,456
21,325 International Paper Co. 906,312
25,690 Kimberly-Clark Corp. 2,511,198
24,980 Millipore Corp. 1,021,058
2,950 NCH, Corp. 168,150
23,730 Praxair, Inc. 1,153,871
5,275 Sigma-Aldrich Corp. 329,688
56,855 Sonoco Products Co. 1,549,299
-----------
Total 8,962,951
-----------
PRODUCER MANUFACTURING--12.6%
24,680 Caterpillar, Inc. 1,952,805
12,950 Cooper Industries, Inc. 537,425
45,275 (b)FMC Corp. 3,497,494
18,755 General Electric Co. 1,950,520
23,095 Harsco Corp. 1,610,876
14,420 Honeywell, Inc. 989,573
46,860 Ingersoll-Rand Co. 2,178,990
4,000 Loews Corp. 371,000
24,495 Tecumseh Products Co., Class
A 1,432,958
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
PRODUCER
MANUFACTURING--CONTINUED
8,980 Tenneco, Inc. $ 457,980
24,625 Tyco International, Ltd. 1,348,219
43,130 Westinghouse Electric Corp. 808,688
27,855 Xerox Corp. 1,368,377
8,640 York International Corp. 453,600
-----------
Total 18,958,505
-----------
RETAIL TRADE--2.6%
11,150 American Stores Co. 444,606
42,870 (b)AutoZone, Inc. 1,055,674
28,850 Fingerhut Companies, Inc. 360,625
35,320 Lowe's Cos., Inc. 1,434,875
18,850 (b)Toys "R" Us., Inc. 650,325
-----------
Total 3,946,105
-----------
TECHNOLOGY SERVICES--3.4%
29,535 Avnet, Inc. 1,727,797
52,315 Computer Associates
International, Inc. 3,439,711
-----------
Total 5,167,508
-----------
TELECOMMUNICATIONS--0.1%
1,500 Lucent Technologies, Inc. 76,875
-----------
TRANSPORTATION--2.2%
62,050 CSX Corp. 2,900,837
4,363 Consolidated Rail Corp. 424,302
-----------
Total 3,325,139
-----------
UTILITIES--5.0%
3,650 AT&T Corp. 143,262
19,965 BellSouth Corp. 806,087
29,535 Coastal Corp. 1,421,372
49,390 GTE Corp. 2,216,376
61,540 MCI Communications Corp. 1,876,970
8,800 NYNEX Corp. 408,100
25,160 Wisconsin Energy Corp. 673,030
-----------
Total 7,545,197
-----------
Total Common Stocks
(identified cost
$108,934,865) 136,862,089
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
U.S. Government Agencies--3.4%
FEDERAL HOME LOAN
BANK--DISCOUNT
NOTE--0.2%
$ 250,000 Federal Home Loan Bank,
12/19/1996 $ 249,377
-----------
FEDERAL HOME LOAN MORTGAGE
CORPORATION--DISCOUNT
NOTES--1.7%
300,000 Federal Home Loan Mortgage
Corp., 12/18/1996 299,292
2,300,000 Federal Home Loan Mortgage
Corp., 12/20/1996 2,293,905
-----------
Total 2,593,197
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION--DISCOUNT
NOTES--1.5%
1,250,000 Federal National Mortgage
Association, 12/19/1996 1,246,875
1,000,000 Federal National Mortgage
Association, 12/20/1996 997,370
-----------
Total 2,244,245
-----------
Total U.S. Government
Agencies
(identified cost $5,086,350) 5,086,819
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
U.S. Treasury Obligations--0.3%
U.S. TREASURY BILLS--0.3%
$ 500,000 (d)12/19/1996 (identified
cost $498,737) $ 498,790
-----------
(a)Repurchase Agreement--5.3%
8,066,431 Daiwa Securities America,
Inc.,
5.65%, dated 11/29/1996, due
12/2/1996 (at amortized cost) 8,066,431
-----------
Total Investments (identified
cost $122,586,383) $150,514,129
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE QUANTITATIVE EQUITY FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Quantitative Equity Fund (Class A Shares) (the "Fund") from March 25,
1994 (start of performance) to November 30, 1996 compared to the S&P 500 Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The S&P 500 Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
Total return for shareholders purchasing shares of the Fund at net asset
value without a sales charge including accounts purchasing shares through the
Trust Division of the Wachovia Banks, is 23.74% for the year ended November
30, 1996 as reflected in the Financial Highlights section of the Fund's
prospectus.
+The S&P 500 Index is not adjusted to reflect sales charges, expenses, or other
fees that the SEC requires to be reflected in the Fund's performance. This
index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND (CLASS B SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE QUANTITATIVE EQUITY FUND (CLASS B SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Quantitative Equity Fund (Class B Shares) (the "Fund") from July 23,
1996 (start of performance) to November 30, 1996 compared to the S&P 500 Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund. The ending value
of the Fund reflects a 5.00% contingent deferred sales charge on any
redemption less than one year from the purchase date. The cumulative total
return would be 19.90% assuming no redemption during the period. The Fund's
performance assumes the reinvestment of all dividends and distributions. The
S&P 500 Index has been adjusted to reflect reinvestment of dividends on
securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index is not adjusted to reflect sales charges, expenses, or other
fees that the SEC requires to be reflected in the Fund's performance. This
index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE QUANTITATIVE EQUITY FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Quantitative Equity Fund (Class Y Shares) (the "Fund") from July 23,
1996 (start of performance) to November 30, 1996 compared to the S&P 500 Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 Index has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index is not adjusted to reflect sales charges, expenses, or other
fees that the SEC requires to be reflected in the Fund's performance. This
index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--94.5%
CAPITAL GOODS--4.3%
49,842 General Electric Co. $ 5,183,568
20,000 Harnischfeger Industries,
Inc. 887,500
17,800 Harsco Corp. 1,241,550
-----------
Total 7,312,618
-----------
CONSUMER DURABLES--2.8%
40,000 Arvin Industries, Inc. 950,000
83,008 Chrysler Corp. 2,946,784
26,000 Leggett and Platt, Inc. 796,250
-----------
Total 4,693,034
-----------
CONSUMER NON-DURABLES--27.1%
38,000 American Greetings Corp.,
Class A 1,073,500
29,466 American Stores Co. 1,174,956
55,400 Anheuser-Busch Cos., Inc. 2,347,575
35,100 Baxter International, Inc. 1,491,750
42,400 Becton, Dickinson & Co. 1,780,800
54,075 Bergen Brunswig Corp., Class
A 1,473,543
21,200 Bristol-Myers Squibb Co. 2,411,500
7,000 Clorox Co. 729,750
25,000 Coca Cola Enterprises, Inc. 1,128,125
20,000 ConAgra, Inc. 1,062,500
66,200 Dayton-Hudson Corp. 2,573,525
62,500 Dole Food, Inc. 2,437,500
10,800 Eastman Kodak Co. 874,800
37,000 (b)Fruit of the Loom, Inc.,
Class A 1,318,125
38,514 Johnson & Johnson 2,046,056
18,100 Kimberly-Clark Corp. 1,769,275
27,500 (b)King World Productions,
Inc. 1,048,438
12,600 Lilly (Eli) & Co. 963,900
25,500 Marriott International, Inc. 1,421,625
10,937 Mattel, Inc. 337,680
22,000 Mercantile Stores Co., Inc. 1,105,500
16,000 Nike, Inc., Class B 910,000
106,280 PepsiCo, Inc. 3,175,115
28,319 Philip Morris Cos., Inc. 2,920,397
13,300 Procter & Gamble Co. 1,446,375
36,000 (b)Safeway, Inc. 1,462,500
25,000 Schering Plough Corp. 1,781,250
31,000 Sears, Roebuck & Co. 1,542,250
45,000 (b)Tenet Healthcare Corp. 1,006,875
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
CONSUMER
NON-DURABLES--CONTINUED
20,800 Tupperware Corp. $ 1,102,400
-----------
Total 45,917,585
-----------
CONSUMER SERVICES--0.7%
23,000 Times Mirror Co., Class A 1,204,625
-----------
ELECTRONIC TECHNOLOGY--2.8%
22,000 Beckman Instruments, Inc. 797,500
26,000 (b)Cisco Systems, Inc. 1,764,750
17,000 Intel Corp. 2,156,875
-----------
Total 4,719,125
-----------
ENERGY--9.2%
14,000 British Petroleum Co. PLC,
ADR 1,942,500
40,800 Coastal Corp. 1,963,500
21,145 Exxon Corp. 2,000,846
14,608 Mobil Corp. 1,767,568
39,000 Panenergy Corp. 1,716,000
7,700 Royal Dutch Petroleum Co.,
ADR 1,308,038
60,000 Unocal Corp. 2,445,000
43,706 Williams Cos., Inc. (The) 2,452,999
-----------
Total 15,596,451
-----------
FINANCE--13.5%
43,000 AMBAC 2,945,500
15,500 BankAmerica Corp. 1,596,500
17,000 Beneficial Corp. 1,056,125
20,500 CIGNA Corp. 2,898,187
26,000 Chase Chemical Corp. 2,457,000
17,800 NationsBank Corp. 1,844,525
65,000 PNC Bank Corp. 2,567,500
28,500 Providian Corp. 1,524,750
28,000 Reliastar Financial Corp. 1,561,000
51,258 SouthTrust Corp. 1,822,863
30,000 Travelers Group, Inc. 1,350,000
44,214 USLIFE Corp. 1,365,107
-----------
Total 22,989,057
-----------
HEALTH TECHNOLOGY--0.9%
19,000 Merck & Co., Inc. 1,577,000
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
MATERIALS & SERVICES--7.5%
12,600 Dow Chemical Co. $ 1,055,250
12,000 Ecolab, Inc. 466,500
108,977 Ennis Business Forms, Inc. 1,103,392
37,000 Goodrich (B.F.) Co. 1,660,375
33,000 Lubrizol Corp. 1,014,750
7,000 Mead Corp. 414,750
58,956 PHH Corp. 2,645,651
37,000 Praxair, Inc. 1,799,125
22,000 Rhone-Poulenc Rorer, Inc. 1,636,250
36,000 Sonoco Products Co. 981,000
-----------
Total 12,777,043
-----------
NON-ENERGY MINERALS--1.2%
10,000 Potash Corporation of
Saskatchewan, Inc. 753,750
21,500 Vulcan Materials Co. 1,338,375
-----------
Total 2,092,125
-----------
PRODUCER MANUFACTURING--2.5%
25,700 Ingersoll-Rand Co. 1,195,050
10,000 Johnson Controls, Inc. 775,000
34,000 Timken Co. 1,551,250
13,000 Xerox Corp. 638,625
-----------
Total 4,159,925
-----------
TECHNOLOGY--13.1%
33,000 (b)Cabletron Systems, Inc. 1,332,375
74,338 Comdisco, Inc. 2,415,985
41,000 (b)Compaq Computer Corp. 3,249,250
41,575 Computer Associates
International, Inc. 2,733,556
30,000 Harris Corp. 2,055,000
24,200 International Business
Machines Corp. 3,856,875
41,905 Lockheed Martin Corp. 3,797,641
48,004 Sprint Corp. 2,010,168
7,300 Textron, Inc. 696,238
-----------
Total 22,147,088
-----------
<CAPTION>
Principal
Amount
or Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
TRANSPORTATION--1.3%
9,400 CSX Corp. $ 439,450
22,272 GATX Corp. 1,110,816
7,800 Norfolk Southern Corp. 702,000
-----------
Total 2,252,266
-----------
UTILITIES--7.6%
47,671 Ameritech Corp. 2,806,630
56,000 BellSouth Corp. 2,261,000
20,000 Central & SouthWest Corp. 535,000
58,338 DQE 1,720,971
33,865 GPU, Inc. 1,138,711
23,835 New England Electric System 816,349
30,000 Pinnacle West Capital Corp. 933,750
37,193 SBC Communications, Inc. 1,957,282
28,508 Scana Corp. 776,843
-----------
Total 12,946,536
-----------
Total Common Stocks
(identified cost
$113,047,171) 160,384,478
-----------
(d) U.S. Government Agencies--4.9%
$1,000,000 Federal Farm Credit Bank,
Discount Note, 12/17/1996 997,790
1,000,000 Federal Home Loan Bank
System, Discount Note,
12/19/1996 997,510
300,000 Federal Home Loan Mortgage
Corp., Discount Note,
12/20/1996 299,205
750,000 Federal National Mortgage
Association, Discount Note,
12/20/1996 748,027
1,000,000 Federal National Mortgage
Association, Discount Note,
12/12/1996 998,520
3,500,000 Federal National Mortgage
Association, Discount Note,
12/18/1996 3,491,810
500,000 Federal National Mortgage
Association, Discount Note,
12/23/1996 498,465
300,000 Federal National Mortgage
Association, Discount Note,
12/30/1996 298,782
-----------
Total 8,330,109
-----------
Total U.S. Government
Agencies
(identified cost $8,329,019) 8,330,109
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
(d) U.S. Treasury Obligations--0.3%
425,000 United States Treasury Bills,
12/19/1996 (identified cost
$423,906) $ 423,971
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
(a) Repurchase Agreement--0.1%
240,023 Daiwa Securities America,
Inc., 5.65%, dated
11/29/1996, due
12/2/1996 (at amortized cost) $ 240,023
-----------
Total Investments (identified
cost $122,040,119) $169,378,581
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE EQUITY INDEX FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Equity Index Fund (Class A Shares) (the "Fund") from May 7, 1993 (start
of performance) to November 30, 1996 compared to the S&P 500 Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The S&P 500 Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
Total return for shareholders purchasing shares of the Fund at net asset
value without a sales charge including accounts purchasing shares through the
Trust Division of the Wachovia Banks, is 27.19% for the year ended November
30, 1996 as reflected in the Financial Highlights section of the Fund's
prospectus.
+The S&P 500 Index is not adjusted to reflect sales charges, expenses, or other
fees that the SEC requires to be reflected in the Fund's performance. This
index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE EQUITY INDEX FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Equity Index Fund (Class Y Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1996 compared to the S&P 500 Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 Index has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index is not adjusted to reflect sales charges, expenses, or other
fees that the SEC requires to be reflected in the Fund's performance. This
index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--87.6%
CAPITAL GOODS--4.6%
1,022 Briggs & Stratton Corp. $ 42,285
7,514 Browning-Ferris Industries,
Inc. 201,939
6,850 Caterpillar, Inc. 542,006
1,407 Cincinnati Milacron, Inc. 29,195
3,817 Cooper Industries, Inc. 158,406
1,416 Cummins Engine Co., Inc. 64,074
2,749 Eaton Corp. 190,368
7,917 Emerson Electric Co. 776,856
1,432 Foster Wheeler Corp. 51,731
58,490 General Electric Co. 6,082,960
1,752 General Signal Corp. 75,555
1,222 Giddings & Lewis, Inc. 14,359
1,800 Grainger (W.W.), Inc. 143,100
1,661 Harnischfeger Industries,
Inc. 73,707
4,481 Honeywell, Inc. 307,509
4,207 Illinois Tool Works, Inc. 360,750
3,854 Ingersoll-Rand Co. 179,211
4,155 ITT Industries, Inc. 97,123
11,058 Laidlaw, Inc., Class B 135,461
318 NACCO Industries, Inc., Class
A 15,185
1,374 PACCAR, Inc. 91,371
2,620 Parker-Hannifin Corp. 106,438
1,574 Raychem Corp. 134,184
2,044 Safety-Kleen Corp. 32,449
1,416 Thomas & Betts Corp. 64,074
17,472 WMX Technologies, Inc. 628,992
-----------
Total 10,599,288
-----------
CONSUMER DURABLES--2.5%
1,304 Armstrong World Industries,
Inc. 98,126
3,088 Black & Decker Corp. 116,958
25,808 Chrysler Corp. 916,184
2,955 Cooper Tire & Rubber Co. 60,578
3,591 Dana Corp. 111,770
9,278 Deere & Co. 414,031
4,021 Dover Corp. 214,621
2,171 Echlin, Inc. 73,000
1,208 Fleetwood Enterprises, Inc. 36,844
41,536 Ford Motor Co. 1,360,304
26,710 General Motors Corp. 1,539,164
4,302 Genuine Parts Co. 193,590
5,478 Goodyear Tire & Rubber Co. 265,683
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
CONSUMER DURABLES--CONTINUED
3,714 Maytag Corp. $ 71,030
875 Pulte Corp. 26,797
3,124 Stanley Works 92,158
1,107 Timken Co. 50,507
1,009 Trinova Corp. 36,829
2,177 Tupperware Corp. 115,381
2,621 Whirlpool Corp. 131,050
-----------
Total 5,924,605
-----------
CONSUMER NON-DURABLES--28.5%
27,774 Abbott Laboratories 1,548,401
981 Alberto-Culver Co., Class B 46,598
8,901 Albertsons, Inc. 310,422
2,287 Allergan, Inc. 73,470
6,267 American Brands, Inc. 299,249
2,639 American Greetings Corp.,
Class A 74,552
22,354 American Home Products Corp. 1,436,245
5,296 American Stores Co. 211,178
9,392 (b)Amgen, Inc. 571,738
17,886 Anheuser-Busch Cos., Inc. 757,919
19,290 Archer-Daniels-Midland Co. 424,380
4,740 Avon Products, Inc. 264,255
1,775 (b)Bally Entertainment Group 51,697
2,018 Bard (C.R.), Inc. 56,504
2,006 Bausch & Lomb, Inc. 74,473
9,605 Baxter International, Inc. 408,213
4,522 Becton, Dickinson & Co. 189,924
3,535 (b)Beverly Enterprises, Inc. 46,839
3,653 Block (H&R), Inc. 106,850
6,289 (b)Boston Scientific Corp. 367,120
17,768 Bristol-Myers Squibb Co. 2,021,110
2,438 Brown-Forman Corp., Class B 113,367
3,472 Brunswick Corp. 88,536
8,304 Campbell Soup Co. 686,118
3,652 Charming Shoppes, Inc. 18,717
3,448 Circuit City Store, Inc. 115,077
1,835 Clorox Co. 191,299
88,193 Coca-Cola Co. 4,508,867
5,174 Colgate-Palmolive Co. 479,242
23,727 Columbia/HCA Healthcare Corp. 949,080
11,559 Comcast Corp., Class A 193,613
8,588 ConAgra, Inc. 456,238
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
CONSUMER
NON-DURABLES--CONTINUED
1,343 Coors Adolph Co., Class B $ 26,692
5,142 CPC International, Inc. 428,072
13,925 (b)CUC International, Inc. 367,272
3,718 CVS Corp. 152,903
5,633 Darden Restaurants, Inc. 48,585
7,633 Dayton-Hudson Corp. 296,733
4,002 Dillard Department Stores,
Inc., Class A 122,561
23,965 Disney (Walt) Co. 1,767,419
5,440 Donnelley (R.R.) & Sons Co. 182,240
3,436 Dow Jones & Co. 119,401
6,005 Dun & Bradstreet Corp. 135,863
11,933 Eastman Kodak Co. 966,573
7,330 (b)Federated Department
Stores, Inc. 250,136
1,331 Fleming Cos., Inc. 21,795
2,688 (b)Fruit of the Loom, Inc.,
Class A 95,760
4,975 Gannett Co., Inc. 390,538
10,190 Gap (The), Inc. 327,354
5,632 General Mills, Inc. 357,632
2,106 Giant Foods, Inc., Class A 71,078
15,721 Gillette Co. 1,159,424
1,351 Great Atlantic & Pacific Tea
Co., Inc. 44,245
2,510 Harcourt General, Inc. 137,109
1,084 Harland (John H.) Co. 33,469
3,633 (b)Harrah's Entertainment,
Inc. 64,486
3,075 Hasbro, Inc. 126,459
13,060 Heinz (H.J.) Co. 494,648
5,464 Hershey Foods Corp. 272,517
4,261 (b)HFS, Inc. 275,900
6,884 Hilton Hotels Corp. 201,357
16,887 Home Depot, Inc. 880,235
5,737 (b)Humana, Inc. 108,286
3,920 International Flavors &
Fragrances, Inc. 178,360
2,799 Interpublic Group Cos., Inc. 138,551
4,140 (b)ITT Corp. 190,958
47,081 Johnson & Johnson 2,501,178
1,367 Jostens, Inc. 29,049
16,982 (b)K Mart Corp. 188,925
7,512 Kellogg Co. 509,877
9,935 Kimberly-Clark Corp. 971,146
1,325 (b)King World Productions,
Inc. 50,516
3,455 Knight-Ridder, Inc. 145,110
4,388 (b)Kroger Co., Inc. 202,397
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
CONSUMER
NON-DURABLES--CONTINUED
19,460 Lilly (Eli) & Co. $ 1,488,690
9,565 Limited, Inc. 172,170
2,590 Liz Claiborne, Inc. 109,751
4,162 Loews Corp. 386,026
700 Longs Drug Stores Corp. 35,088
6,082 Lowe's Cos., Inc. 247,081
835 Luby's Cafeterias, Inc. 18,370
2,213 Manor Care, Inc. 55,878
4,512 Marriott Corp. 251,544
9,785 Mattel, Inc. 302,112
8,827 May Department Stores Co. 430,316
24,747 McDonald's Corp. 1,156,922
3,551 McGraw-Hill Cos., Inc. 161,571
8,272 Medtronic, Inc. 546,986
1,301 Mercantile Stores Co., Inc. 65,375
43,091 Merck & Co., Inc. 3,576,553
975 Meredith Corp. 50,213
5,195 Morton International, Inc. 209,748
3,451 New York Times Co., Class A 128,981
5,608 Newell Co. 173,848
10,132 Nike, Inc., Class B 576,258
2,866 Nordstrom, Inc. 124,671
7,937 Penney (J.C.) Co., Inc. 426,614
2,197 Pep Boys-Manny Moe & Jack 80,465
55,378 PepsiCo, Inc. 1,654,418
22,755 Pfizer, Inc. 2,039,418
17,999 Pharmacia & Upjohn, Inc. 695,211
28,999 Philip Morris Cos., Inc. 2,990,522
2,940 Pioneer Hi-Bred International 205,065
1,613 Polaroid Corp. 68,754
6,911 (b)Price/Costco, Inc. 160,681
24,235 Procter & Gamble Co. 2,635,556
4,777 Quaker Oats Co. 188,094
3,744 Ralston Purina Co. 286,416
1,980 Reebok International Ltd. 75,240
2,959 Rite Aid Corp. 117,250
5,352 Rubbermaid, Inc. 128,448
1,376 Russell Corp. 39,560
1,852 (b)Ryan's Family Steak
Houses, Inc. 12,964
17,102 Sara Lee Corp. 671,254
13,017 Schering Plough Corp. 927,461
13,205 Seagram Co. Ltd. 539,754
13,859 Sears, Roebuck & Co. 689,485
8,288 Service Corp. International 249,676
1,470 (b)Shoney's, Inc. 12,128
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
CONSUMER
NON-DURABLES--CONTINUED
712 Springs Industries, Inc.,
Class A $ 33,108
2,826 (b)St. Jude Medical, Inc. 117,986
1,752 Stride Rite Corp. 17,520
2,384 Super Valu Stores, Inc. 70,626
6,423 Sysco Corp. 219,185
23,065 (b)Tele-Communications, Inc.,
Class A 311,378
7,610 (b)Tenet Healthcare Corp. 170,274
19,868 Time Warner, Inc. 809,621
3,699 Times Mirror Co., Class A 193,735
2,562 TJX Cos., Inc. 115,610
9,662 (b)Toys-R-Us, Inc. 333,339
2,179 Tribune Co. 188,484
5,654 Unilever N.V., ADR 978,849
6,441 United Healthcare Corp. 277,768
2,181 U.S. Surgical Corp. 87,513
6,642 UST, Inc. 216,695
2,247 V.F. Corp. 152,515
13,072 (b)Viacom, Inc., Class B 493,468
81,036 Wal-Mart Stores, Inc. 2,066,418
8,696 Walgreen Co. 363,058
9,582 Warner-Lambert Co. 685,113
4,482 Wendy's International, Inc. 95,803
14,739 Westinghouse Electric Corp. 276,356
3,726 Whitman Corp. 85,698
5,370 Winn-Dixie Stores, Inc. 180,566
4,701 (b)Woolworth (F.W.) Co. 112,824
4,106 Wrigley (Wm.), Jr. Co. 239,688
-----------
Total 66,229,884
-----------
ELECTRONIC TECHNOLOGY--9.7%
5,903 (b)3Com Corp. 443,463
4,766 (b)Advanced Micro Devices,
Inc. 115,576
4,214 (b)Amdahl Corp. 50,041
7,682 AMP, Inc. 293,837
2,123 (b)Andrew Corp. 122,869
4,369 Apple Computer, Inc. 105,402
6,340 (b)Applied Materials, Inc. 241,713
6,635 (b)Bay Networks, Inc. 177,486
12,228 Boeing Co. 1,215,158
5,356 (b)Cabletron Systems, Inc. 216,249
2,399 (b)Ceridian Corp. 115,452
22,928 (b)Cisco Systems, Inc. 1,556,238
9,476 (b)Compaq Computer Corp. 750,973
2,656 (b)Computer Sciences Corp. 208,828
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
ELECTRONIC
TECHNOLOGY--CONTINUED
1,377 (b)Data General Corp. $ 20,139
3,186 (b)Dell Computer Corp. 323,777
5,411 (b)Digital Equipment Corp. 198,854
4,093 (b)DSC Communications Corp. 73,674
1,683 EG & G, Inc. 30,715
8,152 (b)EMC Corp. Mass 262,902
2,233 General Dynamics Corp. 164,684
4,857 (b)General Instrument Corp. 107,461
1,373 Harris Corp. 94,051
36,214 Hewlett-Packard Co. 1,951,029
29,130 Intel Corp. 3,695,869
1,656 (b)Intergraph Corp. 15,111
18,685 International Business
Machines Corp. 2,977,922
7,022 Lockheed Martin Corp. 636,369
4,539 (b)LSI Logic Corp. 136,737
7,840 McDonnell-Douglas Corp. 414,540
7,342 Micron Technology, Inc. 243,204
20,917 Motorola, Inc. 1,158,279
4,784 (b)National Semiconductor
Corp. 117,208
9,084 Northern Telecom Ltd. 597,273
2,001 Northrop Corp. 166,333
12,921 (b)Novell, Inc. 142,131
1,520 Perkin-Elmer Corp. 93,670
8,456 Raytheon Co. 432,313
7,681 Rockwell International Corp. 493,504
2,700 Scientific-Atlanta, Inc. 41,850
7,408 (b)Seagate Technology, Inc. 292,616
6,105 (b)Silicon Graphics, Inc. 121,337
6,477 (b)Sun Microsystems, Inc. 377,285
4,150 (b)Tandem Computers, Inc. 56,544
1,154 Tektronix, Inc. 56,258
6,276 (b)Tellabs, Inc. 249,471
6,695 Texas Instruments, Inc. 426,806
6,057 (b)Unisys Corp. 46,185
4,300 United Technologies Corp. 603,075
-----------
Total 22,432,461
-----------
ENERGY MINERALS--8.5%
3,286 Amerada-Hess Corp. 193,463
17,543 Amoco Corp. 1,361,775
2,254 Ashland, Inc. 108,192
5,682 Atlantic Richfield Co. 790,508
5,037 Baker Hughes, Inc. 184,480
4,472 Burlington Resources, Inc. 237,016
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
ENERGY MINERALS--CONTINUED
23,060 Chevron Corp. $ 1,545,020
3,726 Coastal Corp. 179,314
3,307 Consolidated Natural Gas Co. 188,912
6,417 Dresser Industries, Inc. 210,157
8,877 Enron Corp. 406,123
2,425 Enserch Corp. 56,684
43,885 Exxon Corp. 4,152,618
2,949 Fluor Corp. 200,532
6,886 Freeport-McMoRan Copper &
Gold, Inc., Class B 216,909
4,420 Halliburton Co. 266,305
878 Helmerich & Payne, Inc. 47,193
1,769 Kerr-McGee Corp. 123,830
1,201 Louisiana Land & Exploration
Co. 71,760
1,924 McDermott International, Inc. 34,151
13,933 Mobil Corp. 1,685,893
4,763 Noram Energy Corp. 73,827
11,277 Occidental Petroleum Corp. 270,648
959 Oneok, Inc. 26,373
3,694 (b)Oryx Energy Co. 76,651
5,330 Panenergy Corp. 234,520
1,641 Pennzoil Co. 92,306
9,259 Phillips Petroleum Co. 417,812
3,004 (b)Rowan Companies, Inc. 70,970
18,941 Royal Dutch Petroleum Co.,
ADR 3,217,602
3,199 (b)Santa Fe Energy Resource,
Inc. 46,386
8,591 Schlumberger Ltd. 893,464
3,043 Sonat, Inc. 157,475
2,608 Sun Co., Inc. 65,200
9,335 Texaco, Inc. 925,332
8,737 Unocal Corp. 356,033
10,156 USX Corp. 232,319
1,883 (b)Western Atlas, Inc. 132,752
3,701 Williams Cos., Inc. (The) 207,719
-----------
Total 19,758,224
-----------
FINANCE--13.1%
5,292 Aetna Services Inc. 381,686
4,085 Ahmanson (H.F.) & Co. 134,805
1,573 Alexander & Alexander
Services, Inc. 22,809
15,723 Allstate Corp. 947,311
17,069 American Express Co. 891,855
7,335 American General Corp. 301,652
16,722 American International Group,
Inc. 1,923,030
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
FINANCE--CONTINUED
3,830 AON Corp. $ 233,151
15,409 Banc One Corp. 733,854
5,493 Bank of Boston Corp. 383,823
13,765 Bank of New York Co., Inc. 493,819
12,733 BankAmerica Corp. 1,311,499
2,809 Bankers Trust New York Corp. 244,383
6,654 Barnett Banks, Inc. 292,776
1,887 Beneficial Corp. 117,230
5,585 Boatmen's Bancshares, Inc. 372,101
15,410 Chase Chemical Corp. 1,456,245
6,206 Chubb Corp. 336,676
2,702 CIGNA Corp. 381,995
17,006 Citicorp 1,857,906
4,122 Comerica, Inc. 241,137
7,830 Corestates Financial Corp. 421,841
5,894 Dean Witter, Discover & Co. 403,002
6,317 Federal Home Loan Mortgage
Corp. 721,717
38,582 Federal National Mortgage
Association 1,591,508
3,614 Fifth Third Bancorp 252,980
4,985 First Bank System, Inc. 363,282
11,184 First Chicago NBD Corp. 657,060
9,756 First Union Corp. 745,115
9,282 Fleet Financial Group, Inc. 513,991
2,920 General RE Corp. 492,750
2,080 Golden West Financial Corp. 140,400
4,847 Great Western Financial Corp. 150,863
4,835 Green Tree Financial Corp. 202,466
3,433 Household International, Inc. 325,277
4,140 ITT Hartford Group, Inc. 283,073
2,516 Jefferson-Pilot Corp. 146,557
6,636 J.P. Morgan & Co., Inc. 626,273
8,192 KeyCorp 429,056
3,684 Lincoln National Corp. 198,476
2,570 Marsh & McLennan Cos., Inc. 291,374
7,870 MBNA Corp. 317,751
4,594 Mellon Bank Corp. 331,917
6,055 Merrill Lynch & Co., Inc. 485,914
2,071 MGIC Investment Corp. 155,066
5,404 Morgan Stanley Group, Inc. 324,916
7,809 National City Corp. 362,142
10,314 NationsBank Corp. 1,068,788
12,928 Norwest Corp. 604,384
12,043 PNC Bank Corp. 475,699
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
FINANCE--CONTINUED
3,316 Providian Corp. $ 177,406
1,969 Republic New York Corp. 173,764
4,452 SAFECO Corp. 185,315
3,717 Salomon, Inc. 169,588
2,961 St. Paul Cos., Inc. 174,329
8,012 SunTrust Banks, Inc. 406,609
2,536 Torchmark Corp. 131,872
2,402 Transamerica Corp. 190,659
22,348 Travelers Group, Inc. 1,005,660
5,694 U.S. Bancorp. 243,419
4,219 USF&G Corp. 84,380
1,211 USLIFE Corp. 37,390
5,970 Wachovia Corp. 358,200
3,335 Wells Fargo & Co. 949,224
-----------
Total 30,431,196
-----------
MATERIALS AND SERVICES--7.3%
3,951 Air Products & Chemicals,
Inc. 274,595
7,981 Alcan Aluminum, Ltd. 281,330
4,517 Alco Standard Corp. 233,755
6,167 Allegheny Teledyne, Inc. 144,154
9,990 Allied-Signal, Inc. 731,768
6,209 Aluminum Co. of America 395,048
2,975 (b)Alza Corp. 84,044
3,769 (b)Armco, Inc. 16,961
1,506 ASARCO, Inc. 41,039
1,875 Avery Dennison Corp. 132,422
1,067 Ball Corp. 26,142
12,620 Barrick Gold Corp. 378,600
7,937 Battle Mountain Gold Co. 57,543
1,857 Bemis Co., Inc. 66,156
3,920 (b)Bethlehem Steel Corp. 35,280
4,085 Biomet, Inc. 67,403
1,706 Boise Cascade Corp. 52,886
2,558 Case Corp. 134,295
1,005 Centex Corp. 36,180
3,379 Champion International Corp. 145,297
6,005 (b)Cognizant Corp. 207,173
8,156 Corning, Inc. 330,318
1,067 Crane Co. 49,882
4,526 Crown Cork & Seal Co., Inc. 239,878
3,289 Cyprus Amax Minerals 81,403
2,916 Deluxe Corp. 90,396
8,689 Dow Chemical Co. 727,704
19,803 Du Pont (E.I.) de Nemours &
Co. 1,866,433
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
MATERIALS AND
SERVICES--CONTINUED
2,802 Eastman Chemical Co. $ 160,064
4,611 Echo Bay Mines Ltd. 28,531
2,271 Ecolab, Inc. 88,285
5,078 Engelhard Corp. 99,021
15,780 First Data Corp., Class 629,228
1,316 (b)FMC Corp. 101,661
3,227 Georgia-Pacific Corp. 234,764
1,862 Goodrich (B.F.) Co. 83,557
3,126 Grace (W.R.) & Co. 165,287
2,280 Great Lakes Chemical Corp. 122,265
3,832 Hercules, Inc. 185,852
5,176 Homestake Mining Co. 78,287
5,945 Inco Ltd. 207,332
1,722 Inland Steel Industries, Inc. 32,072
10,541 International Paper Co. 447,993
3,002 James River Corp. of Virginia 96,064
1,373 Kaufman & Broad Homes Corp. 17,677
3,829 Louisiana-Pacific Corp. 86,631
2,621 Mallinckrodt Group, Inc. 115,324
5,667 Masco Corp. 206,846
1,864 Mead Corp. 110,442
1,564 Millipore Corp. 63,929
14,778 Minnesota Mining &
Manufacturing Co. 1,237,658
20,813 Monsanto Co. 827,317
2,371 Nalco Chemical Co. 90,394
1,700 National Service Industries,
Inc. 59,500
3,510 Newmont Mining Corp. 168,041
3,095 Nucor Corp. 168,291
1,821 Owens Corning 78,075
4,064 Pall Corp. 106,172
2,345 Phelps Dodge Corp. 170,306
8,448 Placer Dome, Inc. 199,584
1,022 Potlatch Corp. 45,224
6,680 PPG Industries, Inc. 409,150
5,468 Praxair, Inc. 265,882
2,250 Reynolds Metals Co. 133,875
2,337 Rohm & Haas Co. 186,084
4,645 Santa Fe Pacific Gold 53,418
3,026 Sherwin-Williams Co. 171,726
1,765 Sigma-Aldrich Corp. 110,313
2,155 Snap-On Tools Corp. 78,119
3,503 Stone Container Corp. 53,859
1,963 Temple-Inland, Inc. 105,511
6,140 Tenneco, Inc. 313,140
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
MATERIALS AND
SERVICES--CONTINUED
5,390 Tyco International, Ltd. $ 295,103
2,441 Union Camp Corp. 119,914
4,703 Union Carbide Corp. 216,926
2,583 UNUM Corp. 183,716
2,949 USX-U.S. Steel Group, Inc. 88,839
3,590 Westvaco Corp. 101,418
7,011 Weyerhaeuser Co. 322,506
1,952 Willamette Industries, Inc. 132,736
3,209 Worthington Industries, Inc. 63,779
-----------
Total 16,845,773
-----------
TECHNOLOGY SERVICES--5.2%
56,775 AT&T Corp. 2,228,419
17,617 (b)Airtouch Communications,
Inc. 451,436
1,628 Autodesk, Inc. 45,584
10,239 Automatic Data Processing,
Inc. 438,997
12,822 Computer Associates
International, Inc. 843,047
1,453 Johnson Controls, Inc. 112,608
24,419 MCI Communications Corp. 744,780
21,190 (b)Microsoft Corp. 3,324,181
3,527 Moore Corp. Ltd. 74,067
23,116 (b)Oracle Corp. 1,132,684
5,290 Pitney Bowes, Inc. 312,110
823 Shared Medical Systems Corp. 40,944
15,426 Sprint Corp. 645,964
2,141 Tandy Corp. 90,190
2,970 Textron, Inc. 283,264
2,308 TRW, Inc. 224,742
22,075 (b)U.S. West Media Group 422,184
11,432 Xerox Corp. 561,597
-----------
Total 11,976,798
-----------
TRANSPORTATION--1.4%
3,165 (b)AMR Corp. 288,806
5,374 Burlington Northern Santa Fe 482,988
1,385 Caliber System, Inc. 26,834
1,552 Consolidated Freightways,
Inc. 37,442
2,119 Consolidated Rail Corp. 206,073
7,474 CSX Corp. 349,410
2,792 Delta Air Lines, Inc. 210,098
4,012 (b)Federal Express Corp. 177,531
2,661 (b)Navistar International
Corp. 25,280
4,501 Norfolk Southern Corp. 405,090
2,803 Ryder Systems, Inc. 85,141
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
TRANSPORTATION--CONTINUED
5,103 Southwest Airlines Co. $ 126,299
8,605 Union Pacific Corp. 501,241
8,780 Union Pacific Resources
Group, Inc. 262,303
2,242 (b)USAir Group, Inc. 52,127
-----------
Total 3,236,663
-----------
UTILITIES--6.8%
6,694 Alltel Corp. 213,371
6,594 American Electric Power Co.,
Inc. 273,651
19,628 Ameritech Corp. 1,155,599
5,213 Baltimore Gas & Electric Co. 145,312
15,473 Bell Atlantic Corp. 972,865
35,128 BellSouth Corp. 1,418,293
5,373 Carolina Power & Light Co. 196,786
7,394 Central & SouthWest Corp. 197,790
5,572 Cinergy Corp. 186,662
1,944 Columbia Gas System, Inc. 125,631
8,303 Consolidated Edison Co. 240,787
6,262 Dominion Resources, Inc. 238,739
5,127 DTE Energy Co. 164,064
7,238 Duke Power Co. 335,662
716 Eastern Enterprises 26,850
15,733 Edison International 312,693
8,056 Entergy Corp. 218,519
6,493 FPL Group, Inc. 299,490
4,257 GPU, Inc. 143,142
34,460 GTE Corp. 1,546,393
9,284 Houston Industries, Inc. 204,248
22,360 Lucent Technologies, Inc. 1,145,950
5,099 (b)Niagara Mohawk Power Corp. 44,616
1,772 NICOR, Inc. 65,343
2,409 Northern States Power Co. 113,524
15,432 NYNEX Corp. 715,659
5,391 Ohio Edison Co. 123,993
2,914 Pacific Enterprises 89,241
14,724 Pacific Gas & Electric Co. 355,217
15,138 Pacific Telesis Group 560,106
10,374 Pacificorp 217,854
7,849 Peco Energy Co. 200,150
1,234 Peoples Energy Corp. 44,733
5,632 P P & L Resources, Inc. 128,832
8,646 Public Service Enterprises
Group, Inc. 247,492
21,523 SBC Communications, Inc. 1,132,648
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
UTILITIES--CONTINUED
23,697 Southern Co. $ 527,258
7,980 Texas Utilities Co. 315,210
7,590 Unicom Corp. 202,084
3,608 Union Electric Co. 143,418
16,757 U.S. West, Inc. 523,656
13,712 (b)WorldCom, Inc. 317,090
-----------
Total 15,830,621
-----------
Total Common Stocks
(identified cost
$126,876,624) 203,265,513
-----------
(d) U.S. Government Agencies--9.7%
$7,500,000 Federal Farm Credit Bank,
12/17/1996 7,483,425
1,750,000 Federal Home Loan Bank
System, 12/19/1996 1,745,643
2,250,000 Federal Home Loan Mortgage
Corp., 12/18/1996 2,244,690
300,000 Federal Home Loan Mortgage
Corp., 12/20/1996 299,205
2,500,000 Federal National Mortgage
Association, 12/13/1996 2,496,000
5,500,000 Federal National Mortgage
Association, 12/18/1996 5,487,130
<CAPTION>
Principal
Amount
or Shares Value
<C> <S> <C>
- -----------------------------------------------------
(d) U.S. Government Agencies--continued
$ 500,000 Federal National Mortgage
Association, 12/20/1996 $ 498,685
500,000 Federal National Mortgage
Association, 12/23/1996 498,465
1,500,000 Federal National Mortgage
Association, 12/27/1996 1,494,480
300,000 Federal National Mortgage
Association, 12/30/1996 298,734
-----------
Total U.S. Government
Agencies
(identified cost $22,543,691) 22,546,457
-----------
(d) U.S. Treasury Bill--0.7%
1,500,000 12/12/1996 (identified cost
$1,497,617) 1,497,900
-----------
(a) Repurchase Agreement--1.7%
3,860,075 Daiwa Securities America,
Inc., 5.65%, dated
11/29/1996, due
12/2/1996 (at amortized cost) 3,860,075
-----------
Total Investments (identified
cost
$154,778,007) $231,169,945
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE SPECIAL VALUES FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Special Values Fund (Class A Shares) (the "Fund") from May 7, 1993
(start of performance) to November 30, 1996 compared to the Russell 2000 Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The Russell 2000 Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
Total return for shareholders purchasing shares of the Fund at net asset
value without a sales charge including accounts purchasing shares through the
Trust Division of the Wachovia Banks, is 39.78% for the year ended November
30, 1996 as reflected in the Financial Highlights section of the Fund's
prospectus.
+The Russell 2000 Index is not adjusted to reflect sales charges, expenses, or
other fees that the SEC requires to be reflected in the Fund's performance.
This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE SPECIAL VALUES FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Special Values Fund (Class Y Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1996 compared to the Russell 2000 Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Russell 2000 Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The Russell 2000 Index is not adjusted to reflect sales charges, expenses, or
other fees that the SEC requires to be reflected in the Fund's performance.
This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--94.1%
BROADCASTING--1.0%
45,000 Jones Intercable Investors $ 624,375
----------
CAPITAL GOODS--2.8%
13,000 Franklin Electronics, Inc. 529,750
8,500 (b)Gardner Denver Machinery,
Inc. 310,250
15,000 Greif Brothers Corp., Class A 435,000
27,000 Twin Disc, Inc. 583,875
----------
Total 1,858,875
----------
CONSUMER DURABLES--5.5%
6,500 Allen Organ Co., Class B 259,188
4,000 Barnes Group, Inc. 227,000
29,000 Boston Acoustics, Inc. 522,000
45,000 Intermet Corp. 601,875
14,150 Kyser Industrial Corp. 431,575
17,000 National Presto Industries,
Inc. 626,875
25,000 Stanhome, Inc. 684,375
150,000 (b)Tyler Corp. 243,750
----------
Total 3,596,638
----------
CONSUMER NON-DURABLES--11.7%
50,000 (b)Anacomp, Inc. 443,750
60,000 (b)Buckhead America Corp. 367,500
35,000 CPI Corp. 595,000
42,000 (b)Cardinal Realty Services
Inc. 861,000
30,000 (b)Carson Pirie Scott & Co. 776,250
140,000 (b)Cordiant Plc, ADR 682,500
15,000 (b)Craig Corp. 215,625
10,000 Earthgrains Co. 517,500
45,000 (b)Host Marriott Services
Corp. 399,375
26,396 (b)House of Fabrics, Inc. 89,087
38,000 (b)International Specialty
Products, Inc. 460,750
100,000 (b)Oneita Industries, Inc. 375,000
7,200 Plenum Publishing Corp. 257,400
20,000 Price Enterprises, Inc. 342,500
10,000 (b)Prime Hospitality Corp. 166,250
60,000 (b)Spaghetti Warehouse, Inc. 300,000
11,000 (b)Valassis Communication,
Inc. 198,000
11,000 Velco Industries 624,250
----------
Total 7,671,737
----------
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
ENERGY--11.7%
37,000 (b)Alamco, Inc. $ 430,125
50,000 (b)American Pacific Corp. 340,625
11,000 (b)Atwood Oceanics, Inc. 610,500
30,000 Berry Petroleum Co., Class A 401,250
10,200 (b)Crystal Oil Corp. 364,650
40,000 (b)Dawson Production Services,
Inc. 495,000
23,000 (b)Destec Energy, Inc. 356,500
50,000 (b)Ensearch Exploration, Inc. 568,750
30,000 (b)Forest Oil Corp. 465,000
19,000 Holly Corp. 508,250
55,000 (b)McFarland Energy 605,000
13,000 (b)Nabors Industries, Inc. 251,875
20,000 (b)Offshore Logistics, Inc. 400,000
20,000 (b)Patina Oil & Gas Corp. 180,000
20,000 (b)Patterson Energy Inc. 555,000
32,000 (b)Pool Energy Services Co. 472,000
38,200 Wiser Oil Co. 663,725
----------
Total 7,668,250
----------
FINANCE--20.1%
55,000 Angeles Mortgage Investment
Trust, Class A 646,250
21,000 Argonaut Group, Inc. 619,500
5,000 Capital Southwest Corp. 351,875
63,800 (b)Capsure Holdings Corp. 606,100
70,000 (b)Danielson Holding Corp. 358,750
7,000 Eaton Vance Corp. 301,000
22,000 (b)Equus II, Inc. 368,500
35,000 Financial Security Assurance
Holdings Ltd. 1,111,250
11,000 Fund American Enterprises,
Inc. 1,009,250
60,000 Guaranty National Corp. 997,500
24,000 IPC Holdings Ltd. 546,000
16,000 John Nuveen & Co., Inc., Class
A 434,000
20,000 (b)Kaiser Ventures, Inc. 197,500
40,000 Leucadia National Corp. 1,050,000
17,000 Liberty Corp. 648,125
30,000 Midland Financial Group, Inc. 253,125
8,000 NAC Re Corp. 292,000
20,000 PXRE Corp. 482,500
35,000 Piper Jaffray Cos., Inc. 511,875
20,000 Security Connecticut Corp. 690,000
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
FINANCE--CONTINUED
20,000 Somerset Group, Inc. $ 325,000
18,000 Stewart Information Services
Corp. 378,000
50,000 Unico American Corp. 462,500
18,000 United Wisconsin Services,
Inc. 465,750
----------
Total 13,106,350
----------
SERVICES--27.2%
9,000 AK Steel Holding Corp. 343,125
25,000 (b)Alltrista Corp. 631,250
23,000 Amcast Industrial Corp. 543,375
10,000 (b)Atchison Casting
Corporation 165,000
31,300 (b)Banister Foundation, Inc. 293,438
21,000 Blount International, Inc.,
Class A 779,625
30,000 Cascade Corp. 427,500
16,000 Cleveland Cliffs, Inc. 708,000
50,000 (b)Dixie Yarns, Inc. 331,250
32,000 Duff & Phelps Credit Rating 740,000
50,000 (b)Emcor Group Inc. 687,500
10,000 Forest City Enterprises, Inc.,
Class A 533,750
1,300 Forest City Enterprises, Inc.,
Class B 68,575
35,000 Furon Co. 713,125
10,750 (b)Global Industrial
Technologies, Inc. 220,375
25,000 (b)Hanger Orthopedic Group,
Inc. 150,000
20,000 (b)Healthcare Services Group,
Inc. 193,750
55,000 (b)Isomedix, Inc. 756,250
60,000 LTV Corp. 645,000
40,000 Lafarge Corp. 770,000
38,000 (b)Midwest Grain Products,
Inc. 636,500
60,000 (b)Miramar Mining Corp. 288,750
75,000 (b)Morrison Knudsen Corp. 675,000
12,000 Puerto Rican Cement Co., Inc. 339,000
20,000 Raven Industries, Inc. 420,000
10,000 Roanoke Electric Corp. 138,750
80,000 (b)Royal Oak Mines, Inc. 285,000
65,000 Schuller Corp. 625,625
120,000 (b)Steel West Virginia, Inc. 660,000
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
SERVICES--CONTINUED
13,200 (b)Sudbury Inc. $ 163,350
222,000 (b)Sunshine Mining Co. 249,750
60,000 (b)Todd Shipyards Corp. 412,500
60,000 (b)Union Switch & Signal, Inc. 442,500
32,000 Varlen Corp. 644,000
35,000 (b)Vertex Communications Corp. 612,500
16,000 (b)White River Corp. 856,000
16,000 (b)Wolverine Tube, Inc. 596,000
----------
Total 17,746,113
----------
TECHNOLOGY SERVICES--11.1%
24,675 (b)3D Systems Corp. 252,533
10,000 (b)Astrosystems, Inc. 53,750
25,000 (b)Burr Brown Corp. 650,000
16,000 (b)Control Data Systems, Inc. 318,000
60,000 ESCO Electronics Corporation 585,000
25,000 (b)Electro Scientific
Industries, Inc. 606,250
27,000 (b)Electroglas, Inc. 475,031
22,000 (b)Evans & Sutherland Computer
Co. 566,500
35,000 (b)Exar Corp. 546,875
50,000 Gilbert Association Inc.,
Class A 675,000
25,000 (b)Moore Products Co. 475,000
35,000 (b)Silicon Valley Group, Inc. 743,750
110,000 United Industrial Corp. 646,250
32,000 (b)Wang Laboratories, Inc. 676,000
----------
Total 7,269,939
----------
TRANSPORTATION--0.8%
27,000 (b)Kirby Corp. 536,625
----------
UTILITIES--2.2%
40,000 Aliant Communications, Inc. 640,000
30,000 (b)Cellular Communications
International, Inc. 791,250
----------
Total 1,431,250
----------
Total Common Stocks
(identified cost $53,932,818) 61,510,152
----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
Corporate Bonds--1.8%
CONSUMER DURABLES--0.8%
$ 325,000 (b)Audiovox Corp., Conv. Sub.
Deb., 6.25%, 3/15/2001 $ 263,250
275,000 (b)Bally Total Fitness Holding
Corp., Sr. Sub. Note, 13.00%,
1/15/2003 250,250
----------
Total 513,500
----------
INDUSTRIAL SERVICES--0.7%
250,000 (b)American Rice Inc., Mtg.
Bond, 13.00%, 7/31/2002 241,250
250,000 (b)Flagstar Corp., Sr. Note,
10.75%,
9/15/2001 227,500
----------
Total 468,750
----------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
Corporate Bonds--continued
PRODUCER MANUFACTURING--0.3%
$ 200,000 (b)Anacomp, Inc., Sr. Sub.
Note, 13.00%, 6/4/2002 $ 214,000
----------
Total Corporate Bonds
(identified cost $1,085,531) 1,196,250
----------
Preferred Stock--0.9%
43,000 (b)Craig Corp., Pfd.
(identified cost $484,175) 602,000
----------
(a)Repurchase Agreement--3.1%
$2,014,474 Daiwa Securities America,
Inc., 5.65%, dated 11/29/1996,
due
12/2/1996 (at amortized cost) 2,014,474
----------
Total Investments (identified
cost $57,516,998) $65,322,876
----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EMERGING MARKETS FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE EMERGING MARKETS FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Emerging Markets Fund (Class A Shares) (the "Fund") from December 23,
1994 (start of performance) to November 30, 1996 compared to the IFC Investable
Composite Index (Total Return Series) (IFCI).+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The IFCI has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
Total return for shareholders purchasing shares of the Fund at net asset
value without a sales charge including accounts purchasing shares through the
Trust Division of the Wachovia Banks, is 12.45% for the year ended November
30, 1996 as reflected in the Financial Highlights section of the Fund's
prospectus.
+The IFCI is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. This index is
unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EMERGING MARKETS FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE EMERGING MARKETS FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Emerging Markets Fund (Class Y Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1996 compared to the IFC Investable
Composite Index (Total Return Series) (IFCI).+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The IFCI has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The IFCI is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. This index is
unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EMERGING MARKETS FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--83.6%
ARGENTINA--7.0%
26,000 Banco Frances del Rio de la
Plata, S.A., ADR $ 786,500
17,000 (b)Bansud, S.A., Class B 187,075
90,000 Central Costanera, S.A.,
Class B 289,016
271,087 Compania Naviera Perez Com-
panc, S.A., Class B 1,854,977
15,000 (b)Disco, S.A., ADR 376,875
11,000 Inversiones y
Representaciones, S.A., GDR 341,000
115,668 Juan Minetti, S.A. 410,786
33,448 Perez Companc, S.A. 228,876
21,000 Quilmes Industrial, S.A.,
ADR 217,875
460,000 Siderca, S.A., Class A 754,702
20,100 Telecom Argentina Stet
France, S.A., ADR 791,438
21,800 Telefonica de Argentina,
S.A., ADR 555,900
32,000 Transportadora de Gas del
Sur, S.A., Class B, ADR 396,000
80,000 YPF Sociedad Anonima, ADR 1,860,000
-----------
Total 9,051,020
-----------
BRAZIL--2.3%
20,000 (b)Bompreco Supermercados Do
Nordeste, GDR 347,500
43,650,000 Copel Paraenesa de Energia 443,261
1,075,000 (b)Light Participacoes, S.A. 201,992
11,000,000 Siderurgica Nacional 300,290
21,000,000 Telecomunicacoes Brasileras,
S.A., Common Shares 1,357,986
2,600,000 Telecomunicacoes de Minas
Gerais 290,579
-----------
Total 2,941,608
-----------
CHILE--3.7%
9,000 Banco O'Higgins, ADR 207,000
27,275 Chilgener, S.A., ADR 576,184
10,800 Compania Cervecerias Unidas,
S.A., ADR 207,900
13,500 Compania Telecomunicaciones
Chile, S.A., ADR 1,284,188
13,000 Cristalerias de Chile, S.A.,
ADR 251,875
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
CHILE--CONTINUED
9,000 Embotelladora Andina, S.A.,
ADR $ 282,375
25,500 Empresa Nacional de Elec-
tricidade, S.A., ADR 420,750
18,500 Enersis, S.A., ADR 522,625
9,900 Madeco, S.A., ADR 235,125
18,300 Maderas Y Sinteticos, S.A.,
ADR 249,338
12,500 Santa Isabel, S.A., ADR 314,063
5,000 Sociedad Quimica Y Minera de
Chile, ADR 260,000
-----------
Total 4,811,423
-----------
CHINA--2.1%
10,000 (b)Guangshen Railway Co.,
Ltd., Class N, ADR 197,500
2,200,000 Harbin Power Equipment Co.,
Class H 270,305
11,500 (b)Huaneng Power
International Inc., Class N,
ADR 209,875
2,000,000 Maanshan Iron & Steel Co.,
Class H 362,130
1,600,000 Qingling Motors Co., Class H 682,875
1,500,000 Shanghai Haixing Shipping
Co., Class H 118,338
1,000,000 Shanghai Petrochemical
Corp., Ltd. 261,899
6,000 Shanghai Petrochemcial
Corp., Ltd., Class N, ADR 155,250
2,000,000 Yizheng Chemcial Fibre Co.,
Ltd., Class H 455,250
-----------
Total 2,713,422
-----------
COLOMBIA--0.2%
12,000 Banco Industrial Colombiano,
S.A., ADR 193,500
-----------
CZECH REPUBLIC--0.7%
3,000 (b)Ceske Energeticke Zavody
A.S. (CEZ) 105,209
724 (b)Elektrarny Opatovice A.S. 116,662
11,792 (b)Inzenyrske A Prumslove
Stavby Praha (IPS Praha) 120,580
12,500 Komercni Banka A.S., GDR 318,750
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EMERGING MARKETS FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
CZECH REPUBLIC--CONTINUED
2,500 (b)SPT Telekom A.S. $ 282,403
-----------
Total 943,604
-----------
EGYPT--1.1%
50,000 (b)Commercial International
Bank Egypt, GDR 750,000
40,000 (b)Suez Cement Co., GDR 642,000
-----------
Total 1,392,000
-----------
GREECE--4.1%
20,625 Alpha Credit Bank 1,288,690
16,260 Edrassi Psallidas 141,105
8,820 Ergo Bank, S.A. 455,598
14,680 Goody's, S.A. 267,528
34,000 Hellenic Bottling Co., S.A. 980,703
20,200 Hellenic Technodomiki, S.A. 233,730
24,500 Hellenic Telecommunications
Organization 425,225
34,100 Michaniki, S.A. 267,036
3,300 National Bank of Greece 204,555
30,000 Sarantis, S.A. 307,452
11,850 Titan Cement Co. 651,288
-----------
Total 5,222,910
-----------
HONG KONG--5.5%
375,000 Amoy Properties Ltd. 523,798
100,000 Cheung Kong Holdings Ltd. 879,463
110,000 China Light and Power Co. 472,324
225,000 Citic Pacific Ltd. 1,172,725
75,000 Guoco Group Ltd. 408,369
79,600 Hong Kong & Shanghai Bank 1,657,476
60,000 Hong Kong Electric Ltd. 192,448
15,000 Hong Kong Telecommunications
Ltd., ADR 262,501
75,000 Hutchison Whampoa Ltd. 579,573
75,000 Sun Hung Kai Properties 931,196
-----------
Total 7,079,873
-----------
HUNGARY--1.3%
8,000 (b)Borsodchem RT, GDR 172,801
8,000 (b)Danubius Hotel and Spa RT 175,576
4,000 EGIS RT 219,091
10,000 Gedeon Richter Ltd., GDR 552,501
450 Inter-Europa Bank RT 107,843
10,000 OTP Bank, GDR 169,501
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
HUNGARY--CONTINUED
3,500 Pick Szeged RT $ 174,377
3,000 Primagaz RT 124,871
-----------
Total 1,696,561
-----------
INDIA--2.0%
4,800 Bajaj Auto Ltd., GDR 134,401
13,800 BSES Ltd., GDR 272,551
6,750 East India Hotels, GDR 126,901
11,000 Grasim Industries Ltd., GDR 155,651
17,000 Gujarat Ambuja Cements Ltd.,
GDR 136,001
7,500 Hindalco Industries Ltd.,
GDR 153,001
8,500 (b)Indian Hotels Co., Ltd.,
GDR 197,201
14,500 Larsen & Toubro Ltd., GDR 210,251
20,500 Mahindra and Mahindra Ltd.,
GDR 215,251
11,000 Ranbaxy Laboratories Ltd.,
GDR 211,751
9,000 Reliance Industries Ltd.,
GDR 102,152
20,000 (b)State Bank of India, GDR 325,501
10,000 Steel Authority of India
Ltd., GDR 85,001
350 Tata Electric Co., GDR 113,751
13,340 Tata Engineering &
Locomotive Co. Ltd., GDR 133,402
-----------
Total 2,572,767
-----------
INDONESIA--4.1%
118,750 PT Bank Dagang Nasional
Indonesia 117,738
541,776 PT Bank International
Indonesia 502,501
493,500 PT Ciputra Development 420,896
100,000 PT Gudang Garam 425,374
110,000 PT Hanjaya Mandala Sampoerna 560,555
520,180 PT Indah Kiat Pulp & Paper
Corp. 377,103
50,000 PT Indofood Sukses Makmur 104,479
22,000 PT Indonesian Satellite
Corp., ADR 607,751
300,000 PT Mayora Indah 137,528
30,000 PT Modern Photo Film Co. 75,161
180,000 PT Mulia Industrindo 188,061
140,000 PT Pan Indonesia Bank 122,389
310,000 PT Semen Gresik 945,203
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EMERGING MARKETS FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
INDONESIA--CONTINUED
22,000 PT Telekomunikasi, ADR $ 723,251
-----------
Total 5,307,990
-----------
KOREA, REPUBLIC OF--6.6%
57,120 Cho Hung Bank Co., Ltd. 485,213
9,525 (b)Chosun Brewery Co., Ltd. 270,486
2,000 Dong-A Pharmaceutical Co. 44,395
19,200 (b)Housing & Commercial Bank 340,248
11,692 (b)Hyundai Engineering &
Construction Co., Ltd. 315,944
6,850 Hyundai Motor Co., Ltd. 230,453
10,000 Jinro 236,445
56,517 Korea Electric Power Corp. 1,806,745
220 Korea Mobile
Telecommunications Corp. 218,866
13,290 Korean Air 264,919
18,500 L.G. Electronics, Inc. 287,895
2,337 L.G. Information &
Communication Ltd. 220,690
8,000 L.G. Chemical 89,753
15,400 (b)L.G. Securities Co., Ltd. 200,639
8,870 Pohang Iron and Steel Co.,
Ltd. 590,602
5,225 Samsung Display Devices Ltd. 326,503
6,362 Samsung Electronics Co.,
Ltd. 470,463
1,000 Samsung Fire & Marine
Insurance 444,514
7,500 (b)Seoul City Gas Co., Ltd. 542,855
15,740 Shinhan Bank Co.,Ltd. 277,983
5,000 Shinsegae Department Store
Co. 235,237
15,500 (b)Ssangyong Investment
Securities Co., Ltd. 188,853
16,292 Yukong Ltd. 375,387
-----------
Total 8,465,088
-----------
LEBANON--0.2%
25,000 Solidere, GDR 293,750
-----------
LITHUANIA--0.3%
10,000 (b)Vilniaus Bankas AB, GDR 340,000
-----------
MALAYSIA--6.1%
80,000 AMMB Holdings, BHD 636,328
20,000 Carlsberg Brewery 146,419
90,000 DCB Holdings, BHD 308,073
30,000 Genting, BHD 213,692
55,000 Hume Industries, BHD 359,121
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
MALAYSIA--CONTINUED
152,500 Land & General, BHD $ 371,142
63,000 Leader Universal Holdings,
BHD 142,105
60,000 Malayan Banking, BHD 593,589
70,000 Malaysian International
Shipping, BHD 221,607
43,450 Oyl Industries, BHD 451,350
50,000 Perusahaan Otomobil
Nasional, BHD 316,581
220,000 Renong, BHD 405,698
50,000 Resorts World, BHD 251,286
12,000 Rothmans of Pall Mall, BHD 125,841
200,000 Sime Darby, BHD 747,922
95,000 Telekom Malaysia, BHD 864,662
220,000 Tenaga Nasional, BHD 1,001,187
50,000 UMW Holdings, BHD 237,436
50,000 United Engineers, BHD 453,106
-----------
Total 7,847,145
-----------
MEXICO--7.9%
173,718 Alfa, S.A. de C.V., Class A 773,108
140,000 Altos Hornos de Mexico, S.A.
de C.V. 311,703
150,000 (b)Carso Global Telecom,
Class A 346,139
290,000 Cemex, S.A. de C.V. 967,034
290,000 (b)Cifra, S.A. de C.V. 400,786
70,800 (b)Corporacion GEO, S.A. de
C.V., Class B 358,623
27,040 (b)Desc Sociedad de Fomento
Industrial, S.A. de C.V.,
Class C, ADR 584,740
38,000 (b)Empresas ICA Sociedad
Controladora, S.A. de C.V.,
ADR 546,250
18,500 Empresas La Moderna, S.A. de
C.V., ADR 344,563
135,000 Fomento Economico Mexicano,
S.A. de C.V., Class B 461,297
70,000 (b)Gruma, S.A. de C.V. 386,078
67,800 Grupo Carso, S.A. de C.V. 345,146
24,400 Grupo Casa Autrey, S.A. de
C.V., ADR 472,750
100,000 Grupo Financiero Banamex
Accival, S.A. de C.V., Class
B 197,287
7,117 Grupo Financiero Banamex
Accival, S.A. de C.V., Class
L 12,922
900,000 (b)Grupo Financiero
Bancomer, S.A. de C.V.,
Class B 362,876
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EMERGING MARKETS FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
MEXICO--CONTINUED
20,000 (b)Grupo Televisa, S.A., GDR $ 545,000
125,000 Industrias Penoles, S.A. 448,523
24,000 Kimberly Clark de Mexico,
S.A. de C.V. 464,359
36,500 Telefonos de Mexico, Class
L, ADR 1,108,688
53,000 (b)Tubos de Acero de Mexico,
S.A. de C.V., ADR 722,125
-----------
Total 10,159,997
-----------
PANAMA--0.4%
10,200 Pan American Beverage Inc.,
Class A, ADR 476,850
-----------
PERU--2.7%
39,000 Banco Wiese, ADR 224,250
26,000 CPT Telefonica del Peru,
S.A., Class B, ADR 503,750
93,265 Cementos Norte Pacasmayo,
S.A. 130,632
254,028 Cervecerias Backus &
Johnson, Class T 226,065
11,810 Compania de Minas Buenaven-
tura, S.A., Class B 84,857
54,271 Compania de Minas Buenaven-
tura, S.A., Class C 407,374
248,217 (b)Consorcio de Alimientos
Fabril Pacifico, S.A. 340,944
36,910 Credicorp Ltd., ADR 636,698
20,510 Minsur, S.A. 180,936
7,000 Southern Peru Copper Corp.,
ADR 113,750
343,300 Telefonica Del Peru, Class B 673,450
-----------
Total 3,522,706
-----------
PHILIPPINES--3.8%
811,875 Ayala Land, Inc., Class B 880,257
1,050,000 C & P Homes, Inc. 519,287
450,000 (b)Fortune Cement Corp. 218,272
2,100,000 JG Summit Holdings, Inc. 575,211
55,500 Manila Electric Co., Class B 411,721
26,750 Metropolitan Bank and Trust
Co. 620,768
635,937 Petron Corp. 205,640
8,000 Philippine Long Distance
Telephone Co., ADR 460,000
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
PHILIPPINES--CONTINUED
25,000 (b)Philippine National Bank $ 311,478
184,500 San Miguel Corp., Class B 736,989
-----------
Total 4,939,623
-----------
POLAND--3.6%
9,000 (b)Agros Holding, S.A. 217,757
5,000 Bank Przemyslowo-Handlowy,
S.A. 324,357
16,000 Bank Rozwoju Eksportu, S.A. 518,970
9,000 Bank Slaski, S.A. 874,185
81,000 Elektrim Spolka Akcyina,
S.A. 738,481
65,000 Mostostal Export, S.A. 153,850
32,000 Polifarb Cieszyn, S.A. 161,582
15,000 Rolimpex, S.A. 130,444
20,000 (b)Stalexport, S.A. 210,393
26,000 (b)Stomil-Olsztyn, S.A. 286,275
113,000 Wielkopolski Bank Kredytowy,
S.A. 713,234
3,700 (b)Zaklady Metali Lekkich
Kety, S.A. 278,947
-----------
Total 4,608,475
-----------
PORTUGAL--4.1%
29,651 BPI, SGPS, S.A. 368,299
75,712 Banco Commercial Portuguese,
Class R 985,767
6,400 (b)Banco Espirito Santo e
Comercial de Lisboa 110,815
19,827 Banco Totta & Acores
Nationalisiert, Class B 349,175
31,000 Cimentos de Portugal, S.A.
(Cimpor) 647,746
18,000 Engil, SGPS, S.A. 193,329
8,900 Estabelecimentos Jeronimo
Martins & Filho, SGPS, S.A. 817,791
50,000 Empresa Produtorade
Celulose, S.A. (Portucel) 292,659
28,330 Portugal Telecom, SGPS, S.A. 751,575
3,800 Portugal Telecom, SGPS,
S.A., ADR 100,700
21,200 Sonae Investimentos, SGPS,
S.A. 634,498
-----------
Total 5,252,354
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EMERGING MARKETS FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
RUSSIA--2.1%
30,000 (b)Chernogorneft, ADR $ 367,500
30,000 (b)Gazprom, ADR 542,400
25,000 Lukoil Co., ADR 1,087,500
22,000 Mosenergo, ADR 638,000
-----------
Total 2,635,400
-----------
TAIWAN, REPUBLIC OF
CHINA--1.5%
22,400 Acer Inc., GDR 202,720
18,000 (b)Advanced Semiconductor
Engineering Inc., GDR 153,000
25,501 Asia Cement Corp., GDR 488,982
33,750 (b)GVC Corp., GDR 270,169
24,000 (b)President Enterprises,
GDR 432,000
35,000 (b)Yageo Corp., GDR 363,125
-----------
Total 1,909,996
-----------
THAILAND--5.7%
23,000 Advanced Information Service 272,861
60,000 Bangkok Bank Ltd. 685,969
93,750 Bank of Ayudhya Ltd. 295,487
60,000 Dhana Siam Finance &
Securities Co., Ltd. 182,064
180,000 Finance One Co., Ltd. 514,477
50,000 Italian-Thai Development
Ltd. 328,889
324,700 Krung Thai Bank Ltd. 920,828
55,000 Land & House Co., Ltd. 434,995
55,000 PTT Exploration and
Production Ltd. 809,694
27,000 Shinawatra Computer and Com-
munications Co., Ltd. 357,315
11,000 Siam Cement Co., Ltd 382,451
82,100 TPI Polene Co., Ltd. 165,547
250,000 (b)TelecomAsia Corp., Ltd. 518,784
250,000 Thai Airways International
Ltd. 435,583
85,000 (b)Thai Farmers Bank Co. 725,514
30,000 United Communication
Industries, Ltd. 241,969
-----------
Total 7,272,427
-----------
TURKEY--2.2%
2,371,750 Adana Cimento Sanayii, Class
A 129,768
2,000,000 Akbank, T.A.S. 224,718
6,780,000 Aksigorta 185,480
1,400,000 Arcelik AS 131,313
1,200,000 Aygaz 161,210
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
TURKEY--CONTINUED
359,000 Brisa Bridgestone Sabanci
Lastik Sanayii Ve Ticaret,
A.S., Class Y $ 157,840
205,500 Ege Biracilik Ve Malt
Sanayii, A.S. 53,207
992,000 Erciyas Biracilik Ve Malt
Sanayii, A.S. 116,306
1,170,000 Eregli Demir Ve Celik
Fabrikalari, T.A.S. 165,754
1,333,333 Koc Holding, A.S. 273,571
1,272,000 Koc Yatirim Ve Sanayii
Mamulleri Pazarlama, A.S. 205,060
131,200 Migros Turk, T.A.S. 128,188
310,000 Netas Telekomunik, A.S. 65,877
536,000 Petkim Petrokimya Holding,
A.S. 251,372
830,000 Tat Konserve Sanayii, A.S. 119,614
690,000 (b)Tupras Turkiye Petrol
Rafinerileri, A.S. 185,393
1,231,304 (b)Turk Sise Ve Cam
Fabrikalari, A.S. 138,348
3,784,500 Yapi Ve Kredi Bankasi, A.S. 96,138
-----------
Total 2,789,157
-----------
VENEZUELA--2.3%
40,000 (b)Compania Anonima Nacional
Telefonos de Venezuela,
Class D, ADR 1,015,000
137,000 Mavesa S.A., ADR 787,750
180,000 Sider Venezolana, ADR 607,500
50,000 Sudamtex de Venezuela ,
Class B, ADR 236,719
138,000 Venepal, Class B, GDR 345,000
-----------
Total 2,991,969
-----------
Total Common Stocks
(identified cost
$104,238,489) 107,431,615
-----------
Preferred Stocks--6.5%
BRAZIL--6.3%
62,561,500 Banco Bradesco, S.A., PN 457,250
1,800,000 Banco Itau, S.A., PN 705,710
890,000 Brasmotor, S.A., PN 251,569
250,000 Centrais Eletricas
Brasileiras, PN, S.A., PNA 60,758
3,450,000 Centrais Eletricas
Brasileiras, PN, S.A., PNB 1,132,187
479,911 Compania Cervejaria Brahma,
PN 283,858
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE EMERGING MARKETS FUND
<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
<C> <S> <C>
- -----------------------------------------------------
Preferred Stocks--continued
BRAZIL--CONTINUED
22,433,000 Compania Energetica de Minas
Gerais, PN $ 723,155
50,000 Compania Vale Do Rio Doce,
PN 1,050,339
10,500,000 Lojas Americanas, S.A., PN 148,397
10,900,000 Petroleo Brasileiro, S.A.,
PN 1,498,347
19,800,000 Telecomunicacoes Brasileras,
PN 1,498,880
250,000,000 Usinas Siderurgicas de Minas
Gerais, PN 249,250
-----------
Total 8,059,700
-----------
COLOMBIA--0.1%
10,000 Banco Ganadero, S.A., Class
C, ADR 182,500
-----------
KOREA, REPUBLIC OF--0.1%
1,952 Samsung Electronics Co.,
Ltd. 77,885
-----------
Total Preferred Stocks
(identified cost $6,481,959) 8,320,085
-----------
Rights--0.0%
POLAND--0.0%
65,000 Mostostal Export, S.A.,
Rights (identified cost $0) 2,620
-----------
Warrants--0.0%
INDONESIA--0.0%
51,147 PT Indah Kiat Pulp & Paper
Corp., Warrants 14,614
-----------
THAILAND--0.0%
9,375 Thai Farmers Bank Co.,
Warrants 10,737
-----------
Total Warrants (identified
cost $55,060) 25,351
-----------
Convertible Bond--0.2%
TAIWAN, PROVINCE OF
CHINA--0.2%
$ 200,000 Yang Ming Marine, Unsub.,
2.00%, 10/6/2001 (identified
cost $216,500) 231,000
-----------
Closed End Investment Companies--4.9%
CHILE--0.3%
10,000 Genesis Chile Fund 402,500
-----------
<CAPTION>
Principal
Amount
or Shares Value
<C> <S> <C>
- -----------------------------------------------------
Closed End Investment Companies--continued
CZECH REPUBLIC--0.3%
16,000 Sporitelni Privatizacni
Cesky IF, A.S. $ 231,533
32,064 Sporitelni Privatizacni
Vseobecny IF, A.S. 82,856
-----------
Total 314,389
-----------
HONG KONG--0.3%
30,000 (b)Formosa Growth Fund Ltd. 435,000
-----------
HUNGARY--0.3%
5,000 (b)Hungarian Investment Co. 422,500
-----------
INDIA--1.2%
74,500 India Fund Inc. 502,875
495,000 (b)The India Fund 661,609
43,000 (b)The Morgan Stanley India
Investment Fund, Inc. 354,750
-----------
Total 1,519,234
-----------
KOREA--0.1%
18,400 Korean Investment Fund, Inc. 142,600
-----------
MEXICO--0.4%
30,000 Mexico Fund 453,750
-----------
TAIWAN, PROVINCE OF
CHINA--2.0%
220 (b)Formosa Fund, IDR 1,991,000
7,000 Taipei Fund 619,500
-----------
Total 2,610,500
-----------
Total Closed-End
Investment Companies
(identified cost $6,477,944) 6,300,473
-----------
(a) Repurchase Agreement--3.8%
UNITED STATES--3.8%
$4,829,491 Daiwa Securities America,
Inc., 5.65%, dated
11/29/1996, due 12/2/1996
(at amortized cost) 4,829,491
-----------
Total Investments
(identified cost
$122,299,443) $127,140,635
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE BALANCED FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE BALANCED FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Balanced Fund (Class A Shares) (the "Fund") from May 7, 1993 (start of
performance) to November 30, 1996 compared to the S&P 500 Index+ and the Lehman
Aggregate Bond Index.
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The S&P 500 Index and the Lehman Aggregate Bond Index have
been adjusted to reflect reinvestment of dividends on securities in the
indices.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
Total return for shareholders purchasing shares of the Fund at net asset
value without a sales charge including accounts purchasing shares through the
Trust Division of the Wachovia Banks, is 18.55% for the year ended November
30, 1996 as reflected in the Financial Highlights section of the Fund's
prospectus.
+The S&P 500 Index and the Lehman Aggregate Bond Index are not adjusted to
reflect sales charges, expenses, or other fees that the SEC requires to be
reflected in the Fund's performance. These indices are unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE BALANCED FUND (CLASS B SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE BALANCED FUND (CLASS B SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Balanced Fund (Class B Shares) (the "Fund") from July 23, 1996 (start
of performance) to November 30, 1996 compared to the S&P 500 Index+ and the
Lehman Aggregate Bond Index.
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund. The ending value
of the Fund reflects a 5.00% contingent deferred sales charge on any
redemption less than one year from the purchase date. The Fund's cumulative
total return would be 14.47% assuming no redemption during the same time
period. The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 Index and the Lehman Aggregate Bond Index have
been adjusted to reflect reinvestment of dividends on securities in the
index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index and the Lehman Aggregate Bond Index are not adjusted to
reflect sales charges, expenses, or other fees that the SEC requires to be
reflected in the Fund's performance. These indices are unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE BALANCED FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE BALANCED FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Balanced Fund (Class Y Shares) (the "Fund") from July 23, 1996 (start
of performance) to November 30, 1996 compared to the S&P 500 Index+ and the
Lehman Aggregate Bond Index.
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 Index and the Lehman Aggregate Bond Index have
been adjusted to reflect reinvestment of dividends on securities in the
indices.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The S&P 500 Index and the Lehman Aggregate Bond Index are not adjusted to
reflect sales charges, expenses, or other fees that the SEC requires to be
reflected in the Fund's performance. These indices are unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE BALANCED FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--56.3%
CAPITAL GOODS--2.9%
12,674 Caterpillar, Inc. $ 1,002,830
27,986 General Electric Co. 2,910,543
19,750 Harsco Corp. 1,377,562
18,000 Honeywell, Inc. 1,235,250
20,190 Ingersoll-Rand Co. 938,834
-----------
Total 7,465,019
-----------
COMMERCIAL SERVICES--0.5%
40,000 Equifax, Inc. 1,310,000
-----------
CONSUMER DURABLES--1.2%
95,835 Ford Motor Co. 3,138,596
-----------
CONSUMER NON-DURABLES--19.5%
13,415 Abbott Laboratories 747,885
6,540 (b)Adaptec, Inc. 243,614
20,020 American Greetings Corp.,
Class A 565,564
40,080 American Home Products Corp. 2,575,140
21,200 Baxter International, Inc. 901,000
37,473 Bristol-Myers Squibb Co. 4,262,553
47,830 CPC International, Inc. 3,981,847
20,000 Coca-Cola Co. 1,022,500
88,169 Columbia/HCA Healthcare Corp. 3,526,760
22,450 Danka Business Systems, PLC,
ADR 942,900
42,260 Disney (Walt) Co. 3,116,675
61,140 Electronic Data Systems Corp. 2,957,648
20,950 (b)HealthCare COMPARE Corp. 898,231
23,610 Kellogg Co. 1,602,529
10,740 Kimberly-Clark Corp. 1,049,835
11,750 Knight-Ridder, Inc. 493,500
11,840 (b)Lear Corp. 424,760
39,715 Lowe's Cos., Inc. 1,613,422
26,561 (b)LucasVarity PLC, ADR 1,125,522
13,230 Merck & Co., Inc. 1,098,090
52,320 Newell Co. 1,621,920
4,370 Nike, Inc., Class B 248,544
137,385 PepsiCo, Inc. 4,104,377
34,240 Philip Morris Cos., Inc. 3,531,000
10,000 Procter & Gamble Co. 1,087,500
17,680 R.J.R. Nabisco, Inc., Class A 685,100
5,905 Sara Lee Corp. 231,771
15,985 (b)Scherer (R.P.) Corp. 731,314
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
CONSUMER
NON-DURABLES--CONTINUED
19,382 Service Corp. International $ 583,883
30,155 Tecumseh Products Co., Class
A 1,764,068
79,485 (b)Tenet Healthcare Corp. 1,778,477
5,340 Tribune Co. 461,910
-----------
Total 49,979,839
-----------
ENERGY--4.6%
26,680 Amoco Corp. 2,071,035
17,405 Coastal Corp. 837,616
16,995 Exxon Corp. 1,608,152
8,500 Halliburton Co. 512,125
41,980 Mapco, Inc. 1,416,825
2,617 Mobil Corp. 316,657
16,905 Occidental Petroleum Corp. 405,720
10,145 Phillips Petroleum Co. 457,793
7,920 Royal Dutch Petroleum Co.,
ADR 1,345,410
26,505 Schlumberger Ltd. 2,756,520
-----------
Total 11,727,853
-----------
FINANCE--7.7%
7,700 AMBAC, Inc. 527,450
26,060 American International Group,
Inc. 2,996,900
13,200 Capital One Financial Corp. 476,850
24,894 Chubb Corp. 1,350,500
9,285 Citicorp 1,014,386
73,410 Countrywide Credit
Industries, Inc. 2,119,714
9,750 Federal Home Loan Mortgage
Corp. 1,113,938
66,075 Federal National Mortgage
Association 2,725,594
79,230 First USA, Inc. 2,604,686
4,010 MBIA Insurance Corporation 405,511
12,000 Morgan Stanley Group, Inc. 721,500
28,000 Providian Corp. 1,498,000
8,079 Wells Fargo & Co. 2,299,485
-----------
Total 19,854,514
-----------
MATERIALS & SERVICES--5.6%
11,185 Air Products & Chemicals,
Inc. 777,358
7,000 Aluminum Co. of America 445,375
5,375 Dow Chemical Co. 450,156
53,810 Ecolab, Inc. 2,091,864
30,625 FMC Corp. 2,365,781
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE BALANCED FUND
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
MATERIALS &
SERVICES--CONTINUED
11,000 International Paper Co. $ 467,500
18,350 Mead Corp. 1,087,238
47,110 Millipore Corp. 1,925,621
59,810 Praxair, Inc. 2,908,261
28,210 Sonoco Products Co. 768,723
19,000 Tyco International, Ltd. 1,040,250
-----------
Total 14,328,127
-----------
NON-ENERGY MINERALS--0.2%
43,305 LTV Corp. 465,529
-----------
RETAIL TRADE--0.5%
50,320 (b)AutoZone, Inc. 1,239,130
-----------
TECHNOLOGY--9.6%
24,420 (b)3Com Corp. 1,834,553
10,820 Avnet, Inc. 632,970
51,536 (b)Cabletron Systems, Inc. 2,080,766
36,943 Cisco Systems, Inc. 2,507,506
48,605 Computer Associates
International, Inc. 3,195,779
55,820 Hewlett-Packard Co. 3,007,303
17,180 Intel Corp. 2,179,713
5,500 International Business
Machines Corp. 876,563
37,490 Linear Technology Corp. 1,766,716
32,246 MCI Communications Corp. 983,503
2,640 Microsoft Corp. 414,150
23,780 Motorola, Inc. 1,316,818
5,145 United Technologies Corp. 721,586
63,210 Xerox Corp. 3,105,191
-----------
Total 24,623,117
-----------
TRANSPORTATION--1.3%
39,490 CSX Corp. 1,846,158
42,590 Illinois Central Corp. 1,442,736
-----------
Total 3,288,894
-----------
UTILITIES--2.7%
25,940 AT&T Corp. 1,018,145
30,760 BellSouth Corp. 1,241,935
23,280 Central & SouthWest Corp. 622,740
9,261 GTE Corp. 415,587
45,000 Southern Co. 1,001,250
31,870 Sprint Corp. 1,334,556
<CAPTION>
Principal
Amount
or Shares Value
<C> <S> <C>
- -----------------------------------------------------
Common Stocks--continued
UTILITIES--CONTINUED
23,220 Westinghouse Electric Corp. $ 435,375
30,443 Wisconsin Energy Corp. 814,350
-----------
Total 6,883,938
-----------
Total Common Stocks
(identified cost
$113,738,612) 144,304,556
-----------
Corporate Bonds--7.4%
ASSET-BACKED SECURITIES--1.5%
$ 965,000 Chemical Master Credit Card
Trust I 1996-1, Class A,
5.55%,
9/15/2003 949,000
965,000 Dayton Hudson Credit C Master
Trust 1995-1, Class A, 6.10%,
2/25/2002 971,137
425,000 First Deposit Master Trust
1995-2, Class A, 6.05%,
8/15/2002 427,427
575,000 Ford Credit Auto Loan Master
Trust 1995-1 A, Class A,
6.50%, 8/15/2002 583,608
1,032,103 Prudential Home Mortgage
Securities 1993-60, Class A1,
6.75%,
12/25/2023 1,037,263
-----------
Total 3,968,435
-----------
FINANCE--4.9%
1,165,000 BHP Finance (USA), Inc.,
6.42%, 3/1/2026 1,177,326
850,000 Bankers Trust New York Corp.,
7.375%, 5/1/2008 881,722
515,000 Branch Banking & Trust,
5.70%, 2/1/2001 505,782
790,000 CNA Financial, 7.25%,
11/15/2023 778,916
1,000,000 Fleet Financial Group, Inc.,
6.00%, 10/26/1998 1,000,400
775,000 Fleet Financial Group, Inc.,
7.125%, 5/1/2000 797,026
1,260,000 General Motors Acceptance
Corp., 6.70%, 7/2/1999 1,278,749
725,000 Household Finance Corp.,
7.25%, 7/15/2003 754,935
1,500,000 KFW International Finance,
7.00%, 3/1/2013 1,537,800
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE BALANCED FUND
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
Corporate Bonds--continued
FINANCE--CONTINUED
$ 715,000 Merrill Lynch & Co., Inc.,
6.64%, 9/19/2002 $ 722,994
985,000 Norwest Corp., 6.00%,
10/13/1998 988,388
505,000 Norwest Financial, Inc.,
6.75%,
6/1/2005 512,939
1,500,000 Sears Roebuck Acceptance
Corp., 6.64%, 10/9/2001 1,522,562
-----------
Total 12,459,539
-----------
INDUSTRIAL SERVICES--0.6%
1,485,000 Disney (Walt) Co., 6.375%,
3/30/2001 1,498,187
-----------
SECURITIES--0.4%
1,000,000 Smith Barney Holdings, Inc.,
7.125%, 10/1/2006 1,026,050
-----------
Total Corporate Bonds
(identified cost $18,563,713) 18,952,211
-----------
Mortgage Backed Securities--11.1%
FEDERAL HOME LOAN MORTGAGE
CORPORATION--1.8%
264,368 6.50%, 12/1/2008 264,283
78,461 6.50%, 2/1/2009 78,436
773,810 6.50%, 3/1/2009 773,562
65,187 6.50%, 4/1/2009 65,166
322,053 6.50%, 6/1/2009 321,950
352,906 6.50%, 7/1/2010 351,131
2,550,000 (d)Discount Note, 12/18/1996 2,543,982
300,000 (d)Discount Note, 12/20/1996 299,205
-----------
Total 4,697,715
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION--5.3%
1,038,142 6.00%, 12/1/2010 1,015,261
1,742,860 6.00%, 4/1/2011 1,697,110
855,000 6.82%, 8/23/2005 881,052
940,000 7.375%, 3/28/2005 1,006,383
191,072 7.50%, 4/1/2007 195,645
904,331 7.50%, 9/1/2022 919,877
403,950 8.00%, 6/1/2022 417,911
322,973 8.00%, 1/1/2023 333,770
73,139 8.50%, 8/1/2016 76,955
55,928 8.50%, 6/1/2024 58,410
633,615 8.50%, 7/1/2024 662,983
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
Mortgage Backed Securities--continued
FEDERAL NATIONAL MORTGAGE
ASSOCIATION--CONTINUED
$ 35,025 8.50%, 10/1/2024 $ 36,579
669,903 8.50%, 12/1/2024 699,627
292,199 9/25/2018, REMIC, PO 284,424
2,500,000 (d)Discount Note, 12/18/1996 2,494,150
500,000 (d)Discount Note, 12/19/1996 498,750
1,000,000 (d)Discount Note, 12/20/1996 997,370
500,000 (d)Discount Note, 12/23/1996 498,465
800,000 (d)Discount Note, 12/27/1996 797,056
-----------
Total 13,571,778
-----------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION--2.6%
2,526,038 6.50%, 4/15/2024 2,467,611
978,444 7.00%, 12/20/2025 969,266
789,214 7.00%, 5/15/2023 788,717
2,137,428 7.00%, 8/15/2023 2,134,485
392,949 7.50%, 3/15/2023 400,317
-----------
Total 6,760,396
-----------
FEDERAL AGENCIES--1.4%
1,500,000 Federal Home Loan Bank,
Discount Note, 12/19/1996 1,496,265
2,000,000 Federal Home Loan Bank,
4.587%, 8/27/1998 1,968,220
-----------
Total 3,464,485
-----------
Total Mortgage Backed
Securities
(identified cost $28,456,204) 28,494,374
-----------
U.S. Treasury Obligations--21.5%
U.S. TREASURY BILLS--0.4%
1,000,000 (d)12/19/1996 997,580
-----------
U.S. TREASURY BONDS--5.9%
2,765,000 6.25%, 8/15/2023 2,681,193
4,760,000 7.875%, 2/15/2021 5,554,301
5,735,000 8.00%, 11/15/2021 6,792,362
-----------
Total 15,027,856
-----------
U.S. TREASURY NOTES--15.2%
3,300,000 4.75%, 8/31/1998 3,255,648
1,770,000 5.125%, 11/30/1998 1,754,229
6,085,000 5.25%, 12/31/1997 6,072,647
2,350,000 5.875%, 8/15/1998 2,361,014
2,000,000 5.875%, 11/30/2001 2,003,440
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE BALANCED FUND
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
U.S. Treasury Obligations--continued
U.S. TREASURY
NOTES--CONTINUED
$1,500,000 6.125%, 3/31/1998 $ 1,511,715
2,180,000 6.125%, 8/31/1998 2,199,751
1,500,000 6.125%, 7/31/2000 1,517,580
2,430,000 6.25%, 4/30/2001 2,470,994
1,700,000 6.25%, 2/15/2003 1,730,277
720,000 6.375%, 8/15/2002 737,885
2,370,000 6.50%, 8/15/2005 2,442,214
465,000 6.875%, 7/31/1999 478,513
4,655,000 6.875%, 5/15/2006 4,919,730
1,165,000 7.00%, 7/15/2006 1,241,820
210,000 7.125%, 2/29/2000 218,530
1,675,000 7.50%, 10/31/1999 1,754,563
500,000 7.50%, 11/15/2001 535,155
630,000 7.75%, 11/30/1999 664,845
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
U.S. Treasury Obligations--continued
U.S. TREASURY
NOTES--CONTINUED
$1,115,000 8.00%, 5/15/2001 $ 1,210,121
-----------
Total 39,080,671
-----------
Total U.S. Treasury
Obligations
(identified cost $54,060,311) 55,106,107
-----------
(a) Repurchase Agreement--3.0%
7,701,733 Daiwa Securities America,
Inc., 5.65%, dated
11/29/1996, due
12/2/1996 (at amortized cost) 7,701,733
-----------
Total Investments (identified
cost
$222,520,573) $254,558,981
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE FIXED INCOME FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Fixed Income Fund (Class A Shares) (the "Fund") from May 7, 1993 (start
of performance) to November 30, 1996 compared to the Lehman Aggregate Bond
Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The Lehman Aggregate Bond Index has been adjusted to
reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
Total return for shareholders purchasing shares of the Fund at net asset
value without a sales charge including accounts purchasing shares through the
Trust Division of the Wachovia Banks, is 5.51% for the year ended November
30, 1996 as reflected in the Financial Highlights section of the Fund's
prospectus.
+ The Lehman Aggregate Bond Index is not adjusted to reflect sales charges,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND (CLASS B SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE FIXED INCOME FUND (CLASS B SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Fixed Income Fund (Class B Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1996 compared to the Lehman Aggregate
Bond Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund. The ending value
of the Fund reflects a 5.00% contingent deferred sales charge on any
redemption less than one year from the purchase date. The Fund's cumulative
total return would be 5.83% assuming no redemption during the same time
period. The Fund's performance assumes the reinvestment of all dividends and
distributions. The Lehman Aggregate Bond Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman Aggregate Bond Index is not adjusted to reflect sales charges,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE FIXED INCOME FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Fixed Income Fund (Class Y Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1996 compared to the Lehman Aggregate
Bond Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Lehman Aggregate Bond Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman Aggregate Bond Index is not adjusted to reflect sales charges,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- ------------------------------------------------------
Corporate Bonds--32.0%
CONSUMER SERVICES--0.8%
$1,500,000 Disney (Walt) Co., Bond,
6.375%, 3/30/2001 $ 1,513,320
-----------
ELECTRONIC TECHNOLOGY--0.4%
605,000 Motorola, Inc., Deb., 8.40%,
8/15/2031 733,720
-----------
FINANCE--18.8%
3,000,000 Bankers Trust New York Corp.,
Sr. Note, 6.75%, 10/3/2001 3,062,820
1,880,000 Bankers Trust New York Corp.,
Sub. Note, 7.375%, 5/1/2008 1,950,162
670,000 Barclays American Corp., Sr.
Note, 9.125%, 12/1/1997 689,912
1,250,000 Beneficial Corp., Medium Term
Note, 7.99%, 2/14/2000 1,317,113
750,000 Beneficial Corp., 6.20%,
12/4/2000 748,313
850,000 Beneficial Corp., Unsecured
Note, Series C, 10.00%,
1/12/2001 964,827
1,000,000 CNA Financial Corp., Deb.,
7.25%, 11/15/2023 977,420
2,000,000 Caterpillar Financial
Services Corp., 6.82%,
3/15/2001 2,034,580
2,000,000 Deere (John) Capital Corp.,
Sr. Note, Series C, 6.23%,
10/18/2000 2,005,420
755,000 First Union Corp., Sub. Note,
6.824%, 8/1/2026 777,386
1,750,000 Household Finance Corp.,
6.375%, 6/30/2000 1,761,253
3,500,000 Household Finance Corp.,
7.25%, 7/15/2003 3,644,515
1,500,000 Household Finance Corp., Sr.
Note, 6.23%, 2/16/1999 1,506,420
1,460,000 KFW International Finance,
7.00%, 3/1/2013 1,496,792
2,750,000 Lehman Brothers Holdings,
Inc., 7.11%, 9/27/1999 2,801,772
3,000,000 Merrill Lynch & Co., Inc.,
Sr. Note, 6.64%, 9/19/2002 3,033,540
2,000,000 Merrill Lynch & Co., Inc.,
Sr. Note, Series B, 6.80%,
4/26/2001 2,043,720
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- ------------------------------------------------------
Corporate Bonds--continued
FINANCE--CONTINUED
$1,100,000 Metropolitan Life Limited,
7.00%, 11/1/2005 $ 1,113,992
1,000,000 Sears Roebuck Acceptance
Corp., 7.07%, 9/17/2001 1,030,920
1,000,000 Transamerica Corp., 6.75%,
11/15/2006 1,002,390
-----------
Total 33,963,267
-----------
HEALTH TECHNOLOGY--1.1%
2,000,000 Bausch & Lomb, Inc., 6.56%,
8/12/2026 2,027,200
-----------
INDUSTRIAL SERVICES--3.8%
1,000,000 Du Pont (E.I.) de Nemours &
Co., Unsecured Note, Series
G, 6.47%, 9/26/2002 1,013,750
3,000,000 WMX Technologies, Inc.,
7.125%, 6/15/2001 3,101,520
750,000 WMX Technologies, Inc.,
Unsecured Note, 6.375%,
12/1/2003 748,965
2,000,000 WMX Technologies, Inc.,
Unsecured Note, 7.00%,
5/15/2005 2,054,200
-----------
Total 6,918,435
-----------
PROCESS INDUSTRIES--1.1%
2,000,000 International Paper Co.,
7.00%,
6/1/2001 2,059,540
-----------
PRODUCER MANUFACTURING--0.2%
240,000 Armstrong World Industries,
Inc., Deb., 9.75%, 4/15/2008 293,318
-----------
RETAIL TRADE--0.6%
1,000,000 Penney (J.C.) Co., Inc., MTN,
Series A, 7.05%, 5/23/2005 1,031,030
-----------
TRANSPORTATION--1.9%
3,250,000 Norfolk Southern Corp., MTN,
Series A, 7.22%, 9/15/2006 3,409,244
-----------
UTILITIES--3.3%
2,000,000 Appalachian Power Co., 1st
Mtg. Bond, 6.375%, 3/1/2001 2,014,500
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- ------------------------------------------------------
Corporate Bonds--continued
UTILITIES--CONTINUED
$2,000,000 Bell Atlantic-New Jersey,
Deb., 5.875%, 2/1/2004 $ 1,940,700
2,000,000 MCI Communications Corp., Sr.
Note, 6.25%, 3/23/1999 2,012,060
-----------
Total 5,967,260
-----------
Total Corporate Bonds
(identified cost $56,773,264) 57,916,334
-----------
U.S. Government Agencies--25.4%
FEDERAL HOME LOAN MORTGAGE
CORPORATION--4.1%
5,667 12.50%, 3/1/2014 6,635
7,207 12.50%, 7/1/2011 8,375
4,199 12.50%, 2/1/2010 4,857
20,048 11.00%, 10/1/2015 22,449
3,620 11.00%, 10/1/2010 4,010
775 9.50%, 2/1/2019 839
2,412 9.50%, 2/1/2019 2,608
32,217 9.50%, 7/1/2016 34,913
1,456 9.00%, 1/1/2019 1,549
1,574 9.00%, 1/1/2019 1,674
136 9.00%, 9/1/2017 145
9,451 9.00%, 5/15/2016 10,189
1,558 8.50%, 8/1/2017 1,643
6,400 8.50%, 7/1/2017 6,751
3,895 8.00%, 1/1/2019 4,059
2,123 8.00%, 7/1/2017 2,212
54,066 8.00%, 4/1/2009 56,398
10,864 8.00%, 2/1/2009 11,290
1,263 8.00%, 1/1/2009 1,313
22,661 8.00%, 12/1/2008 23,481
24,638 8.00%, 1/1/2008 25,695
141,180 7.50%, 2/1/2023 143,827
146,762 7.50%, 2/1/2023 149,330
167,050 7.50%, 2/1/2023 169,816
183,878 7.50%, 2/1/2023 187,095
230,349 7.50%, 2/1/2023 234,163
2,765,894 7.50%, 9/1/2007 2,836,063
719,605 7.00%, 6/1/2008 730,168
2,000,000 6.50%, 11/1/2011 1,985,620
791,003 6.50%, 4/1/2009 790,749
-----------
Total 7,457,916
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- ------------------------------------------------------
U.S. Government Agencies--continued
FEDERAL NATIONAL MORTGAGE
ASSOCIATION--13.0%
$ 463 12.50%, 9/1/2013 $ 544
1,561 9.50%, 2/1/2019 1,691
202 9.50%, 7/1/2016 219
1,663 9.50%, 7/1/2016 1,804
1,208 9.50%, 7/1/2016 1,310
2,640 9.00%, 8/1/2018 2,822
1,101 9.00%, 1/1/2017 1,179
873 8.50%, 2/1/2019 918
452 8.50%, 2/1/2017 474
32,395 8.00%, 9/1/2009 33,991
9,150 8.00%, 1/1/2009 9,600
4,337 8.00%, 11/1/2008 4,550
1,988,490 7.50%, 5/1/2026 2,012,450
466,882 7.50%, 1/1/2023 474,907
205,572 7.50%, 1/1/2023 208,847
186,027 7.50%, 1/1/2023 189,225
977,991 7.50%, 4/1/2007 1,001,395
904,452 6.50%, 10/1/2010 899,785
2,780,034 6.50%, 9/1/2010 2,765,689
1,953,535 6.00%, 4/1/2011 1,902,255
1,528,496 6.00%, 1/1/2009 1,502,450
2,000,000 5.94%, 12/12/2005 1,949,060
3,825,000 5.875%, 2/14/2006 3,699,502
7,000,000 5.80%, 2/22/2006 6,733,839
-----------
Total 23,398,506
-----------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION--7.8%
4,391 12.50%, 5/15/2014 5,152
10,701 12.25%, 2/15/2014 12,557
2,112 12.25%, 3/15/2014 2,477
8,602 12.25%, 8/15/2013 10,068
1,341 11.00%, 11/15/2015 1,521
182 11.00%, 11/15/2015 206
6,117 11.00%, 9/15/2015 6,940
7,316 11.00%, 9/15/2015 8,288
37,192 10.50%, 8/15/2017 41,606
2,090 10.50%, 8/15/2017 2,329
6,041 10.50%, 7/15/2017 6,758
5,782 10.50%, 9/15/2015 6,367
2,411 10.50%, 11/15/2000 2,572
742 10.50%, 11/15/2000 792
2,314 10.50%, 11/15/2000 2,469
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
U.S. Government Agencies--continued
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION--CONTINUED
$ 3,807 10.50%, 10/15/2000 $ 4,062
29,989 9.50%, 11/15/2020 32,679
18,706 9.50%, 11/15/2020 20,361
78,114 9.50%, 10/15/2020 85,021
25,482 9.50%, 10/15/2020 27,736
23,569 9.50%, 10/15/2020 25,654
49,194 9.50%, 9/15/2020 53,544
33,199 9.50%, 6/15/2020 36,145
23,959 9.50%, 4/15/2020 26,078
34,219 9.50%, 4/15/2020 37,256
42,771 9.50%, 4/15/2020 46,567
1,068 9.50%, 2/15/2019 1,163
3,368 9.50%, 7/15/2018 3,669
15,066 9.50%, 10/15/2017 16,412
19,973 9.50%, 9/15/2017 21,758
213,480 9.50%, 12/15/2016 232,624
15,782 9.50%, 7/15/2016 17,197
5,170 9.50%, 7/15/2016 5,633
51,262 9.50%, 6/15/2016 55,859
1,777 9.50%, 5/15/2016 1,936
2,574 9.50%, 5/15/2016 2,804
16,237 9.50%, 5/15/2016 17,693
1,961 9.50%, 6/15/2001 2,080
99,385 9.00%, 1/15/2021 106,652
45,971 9.00%, 1/15/2021 49,333
73,020 9.00%, 1/15/2021 78,359
77,456 9.00%, 1/15/2021 83,120
40,591 9.00%, 1/15/2021 43,533
35,665 9.00%, 11/15/2020 38,273
50,764 9.00%, 1/15/2020 54,587
50,537 9.00%, 12/15/2019 54,264
147,559 9.00%, 12/15/2019 158,440
58,868 9.00%, 11/15/2019 63,301
55,347 9.00%, 10/15/2019 59,428
23,402 9.00%, 6/15/2018 25,164
53,846 9.00%, 5/15/2018 57,901
10,795 9.00%, 4/15/2018 11,625
1,006 9.00%, 7/15/2017 1,085
18,607 9.00%, 6/15/2017 20,037
31,587 9.00%, 5/15/2017 34,052
6,675 9.00%, 1/15/2017 7,198
40,788 9.00%, 1/15/2017 43,988
72,819 9.00%, 1/15/2017 78,530
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
U.S. Government Agencies--continued
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION--CONTINUED
$ 54,697 9.00%, 1/15/2017 $ 58,987
42,817 9.00%, 1/15/2017 46,176
3,662 9.00%, 12/15/2016 3,949
69,323 9.00%, 11/15/2016 74,760
286 9.00%, 10/15/2016 309
46,269 9.00%, 10/15/2016 49,880
49,357 9.00%, 10/15/2016 53,209
13,594 9.00%, 10/15/2016 14,660
38,347 9.00%, 9/15/2016 41,355
48,247 9.00%, 9/15/2016 52,012
2,922 9.00%, 9/15/2016 3,150
71,106 9.00%, 9/15/2016 76,683
16,893 9.00%, 9/15/2016 18,218
1,988 9.00%, 8/15/2016 2,144
168 9.00%, 8/15/2016 181
20,453 9.00%, 7/15/2016 22,057
20,414 9.00%, 6/15/2016 21,983
1,890 9.00%, 6/15/2016 2,038
34,766 9.00%, 6/15/2016 37,493
47,221 9.00%, 5/15/2016 50,906
23,029 9.00%, 5/15/2016 24,826
44,822 8.50%, 6/15/2022 47,315
132,138 8.50%, 5/15/2022 139,487
124,997 8.50%, 5/15/2022 131,949
19,361 8.50%, 4/15/2022 20,529
94,710 8.50%, 12/15/2021 99,978
48,321 8.50%, 11/15/2021 51,008
37,985 8.50%, 11/15/2021 40,216
102,720 8.50%, 11/15/2021 108,433
14,852 8.50%, 9/15/2021 15,702
57,755 8.50%, 5/15/2021 61,057
4,187 8.50%, 9/15/2017 4,446
6,990 8.50%, 6/15/2017 7,422
30,317 8.50%, 7/15/2016 32,193
126,258 8.50%, 6/15/2016 134,070
35,456 8.50%, 6/15/2016 37,650
11,246 8.50%, 6/15/2016 11,942
25,468 8.50%, 5/15/2016 27,043
136,066 8.00%, 9/15/2022 140,997
1,227,470 8.00%, 9/15/2022 1,271,954
210,570 8.00%, 9/15/2022 218,597
408,310 8.00%, 5/15/2022 423,875
113,104 8.00%, 4/15/2022 117,415
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- ------------------------------------------------------
U.S. Government Agencies--continued
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION--CONTINUED
$ 11,466 8.00%, 6/15/2017 $ 11,967
18,988 8.00%, 2/15/2017 19,842
1,330,900 7.50%, 1/15/2024 1,355,854
92,850 7.50%, 3/15/2023 94,590
192,756 7.50%, 2/15/2023 196,370
146,909 7.50%, 2/15/2023 149,664
205,514 7.50%, 12/15/2022 209,368
170,500 7.50%, 12/15/2022 173,697
150,502 7.50%, 12/15/2022 153,324
197,607 7.50%, 12/15/2022 201,312
179,968 7.50%, 11/15/2022 183,342
183,806 7.50%, 10/15/2022 187,253
196,670 7.50%, 8/15/2022 200,357
156,607 7.50%, 2/15/2022 159,816
847,567 7.00%, 6/15/2023 847,033
987,349 6.50%, 5/15/2011 984,565
1,588,020 6.50%, 5/15/2009 1,589,496
1,634,675 6.00%, 5/15/2009 1,607,110
4,722 5.50%, 8/15/1998 4,703
5,359 5.50%, 8/15/1998 5,338
-----------
Total 14,086,158
-----------
AID TO ISRAEL--0.5%
1,000,000 5.625%, 9/15/2003 972,620
-----------
Total U.S. Government
Agencies (identified cost
$45,154,792) 45,915,200
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- ------------------------------------------------------
U.S. Treasury Obligations--39.5%
U.S. TREASURY BONDS--13.5%
$20,572,000 8.00%, 11/15/2021 $24,364,860
-----------
U.S. TREASURY NOTES--26.0%
4,200,000 7.50%, 2/15/2005 4,595,724
1,500,000 7.50%, 10/31/1999 1,571,250
7,000,000 7.00%, 4/15/1999 7,210,000
2,500,000 6.875%, 5/15/2006 2,642,175
3,350,000 6.75%, 4/30/2000 3,452,075
3,000,000 6.75%, 6/30/1999 3,077,820
1,000,000 6.50%, 8/15/2005 1,030,470
4,000,000 6.50%, 4/30/1999 4,076,880
500,000 6.375%, 8/15/2002 512,420
5,000,000 6.25%, 7/31/1998 5,054,700
7,250,000 6.125%, 5/15/1998 7,310,030
3,500,000 6.00%, 9/30/1998 3,525,690
3,000,000 5.625%, 11/30/1998 3,001,860
-----------
Total 47,061,094
-----------
Total U.S. Treasury
Obligations (identified cost
$71,400,223) 71,425,954
-----------
(a) Repurchase Agreements--3.7%
6,748,393 Daiwa Securities America,
Inc., 5.65%, dated
11/29/1996, due
12/2/1996 (at amortized cost) 6,748,393
-----------
Total Investments (identified
cost $180,076,672) $182,005,881
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE SHORT-TERM FIXED INCOME FUND
(CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Short-Term Fixed Income Fund (Class A Shares) (the "Fund") from May 7,
1993 (start of performance) to November 30, 1996 compared to the Merrill Lynch
1-3 Year U.S. Treasury Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 2.50% ($10,000 investment minus $250 sales charge
= $9,750). The Fund's performance assumes the reinvestment of all dividends
and distributions. The Merrill Lynch 1-3 Year U.S. Treasury Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
Total return for shareholders purchasing shares of the Fund at net asset
value without a sales charge including accounts purchasing shares through the
Trust Division of the Wachovia Banks, is 5.29% for the year ended November
30, 1996 as reflected in the Financial Highlights section of the Fund's
prospectus.
+ The Merrill Lynch 1-3 Year U.S. Treasury Index is not adjusted to reflect
sales charges, expenses, or other fees that the SEC requires to be reflected
in the Fund's performance. This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE SHORT-TERM FIXED INCOME FUND
(CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Short-Term Fixed Income Fund (Class Y Shares) (the "Fund") from July
23, 1996 (start of performance) to November 30, 1996 compared to the Merrill
Lynch 1-3 Year U.S. Treasury Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Merrill Lynch 1-3 Year U.S. Treasury Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Merrill Lynch 1-3 Year U.S. Treasury Index is not adjusted to reflect
sales charges, expenses, or other fees that the SEC requires to be reflected
in the Fund's performance. This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
Asset-Backed Securities--0.0%
$ 4,622 Shawmut National Grantor
Trust, Series 1992-A, 5.55%,
11/15/1997 (identified cost
$4,691) $ 4,614
-----------
Collateralized Mortgage
Obligations--0.2%
187,597 Household Financial Corp.,
Series 1992-A3, 5.80%,
4/20/2007 (identified cost
$189,767) 187,597
-----------
Corporate Bonds--24.4%
BANKING--6.3%
3,750,000 Bankers Trust Corp., New
York, 6.625%, 7/30/1999 3,805,912
1,000,000 Fleet Financial Group, Inc.,
7.25%, 10/15/1997, Senior
Notes 1,011,050
2,500,000 International American
Development Bank, 9.50%,
10/15/1997 2,581,375
-----------
Total 7,398,337
-----------
FINANCE--13.5%
3,000,000 Associates Corp. of North
America, 6.00%, 3/15/1999,
Senior Notes 3,001,920
2,750,000 Lehman Brothers Holdings,
Inc., 7.11%, 9/27/1999 2,801,772
2,000,000 Norwest Corp., 6.25%,
4/15/1999, Medium Term Notes 2,024,920
4,000,000 Sears Roebuck Acceptance
Corp., 6.54%, 5/6/1999 4,047,400
4,000,000 Transamerica Financial
Corp., 6.75%, 8/15/1997,
Senior Notes 4,023,040
-----------
Total 15,899,052
-----------
FINANCIAL SERVICES--2.1%
2,500,000 Merrill Lynch & Co., Inc.,
5.00%, 12/15/1996 2,480,050
-----------
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- -----------------------------------------------------
Corporate Bonds--continued
INDUSTRIAL SERVICES--0.8%
$1,000,000 Eaton Corp., 6.375%,
4/1/1999 $ 1,008,790
-----------
UTILITIES-ELECTRIC--1.7%
2,000,000 Kansas City Power & Light
Co., 6.37%, 10/15/1999,
Medium Term Notes 2,009,760
-----------
Total Corporate Bonds
(identified cost
$28,458,154) 28,795,989
-----------
U.S. Treasury Obligations--70.9%
U.S. TREASURY NOTES--70.9%
11,250,000 4.75%, 8/31/1998 11,098,800
6,500,000 5.125%, 11/30/1998 6,442,085
4,750,000 5.50%, 11/15/1998 4,741,070
6,250,000 5.625%, 10/31/1997 6,260,750
7,000,000 5.625%, 11/30/1998 7,004,340
1,500,000 5.75%, 9/30/1997 1,504,215
5,000,000 5.875%, 3/31/1999 5,026,550
1,000,000 6.00%, 9/30/1998 1,007,340
19,750,000 6.125%, 5/15/1998 19,913,530
7,500,000 6.25%, 7/31/1998 7,582,050
3,000,000 6.50%, 5/15/1997 3,016,410
4,750,000 6.50%, 8/15/1997 4,785,625
3,000,000 6.75%, 6/30/1999 3,077,820
500,000 7.875%, 4/15/1998 515,470
1,500,000 8.75%, 10/15/1997 1,541,490
-----------
Total U.S. Treasury
Obligations
(identified cost
$83,210,455) 83,517,545
-----------
(a) Repurchase Agreement--8.0%
9,483,743 Daiwa Securities America,
Inc., 5.65%, dated
11/29/1996, due 12/2/1996
(at amortized cost) 9,483,743
-----------
Total Investments
(identified
cost $121,346,810) $121,989,488
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE GEORGIA MUNICIPAL BOND FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE GEORGIA MUNICIPAL BOND FUND (CLASS A
SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Georgia Municipal Bond Fund (Class A Shares) (the "Fund") from December
23, 1994 (start of performance) to November 30, 1996 compared to the Lehman
State General Obligation Bond Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
Total return for shareholders purchasing shares of the Fund at net asset
value without a sales charge including accounts purchasing shares through the
Trust Division of the Wachovia Banks, is 4.97% for the year ended November
30, 1996 as reflected in the Financial Highlights section of the Fund's
prospectus.
+ The Lehman State General Obligation Bond Index is not adjusted to reflect
sales charges, expenses, or other fees that the SEC requires to be reflected
in the Fund's performance. This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE GEORGIA MUNICIPAL BOND FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE GEORGIA MUNICIPAL BOND FUND (CLASS Y
SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore Georgia Municipal Bond Fund (Class Y Shares) (the "Fund") from July 23,
1996 (start of performance) to November 30, 1996 compared to the Lehman State
General Obligation Bond Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman State General Obligation Bond Index is not adjusted to reflect
charges, expenses, or other fees that the SEC requires to be reflected in the
Fund's performance. This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE GEORGIA MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--98.0%
GEORGIA--98.0%
$ 100,000 Atlanta, GA Downtown
Development Authority,
Refunding Revenue Bonds,
6.25% (Original Issue
Yield: 6.435%), 10/1/2016 AA $ 104,987
200,000 Atlanta, GA, GO UT (Series
A), 6.125% (Original Issue
Yield: 6.18%), 12/1/2023 AA 210,384
510,000 Atlanta, GA, Urban
Residential Finance
Authority, Dorm Facility
Revenue Refunding Bonds,
5.70% (Morehouse College)/
(MBIA INS), 12/1/2010 AAA 530,859
80,000 Brunswick, GA, Water &
Sewer Refunding Revenue
Bonds, 6.10% (MBIA
INS)/(Original Issue Yield:
6.27%), 10/1/2019 AAA 88,356
500,000 Burke County, GA
Development Authority, PCR
(Series 6), 4.375% (Georgia
Power Company Plant
Vogtle)/(AMBAC INS),
11/1/2000 AAA 502,130
90,000 Burke County, GA
Development Authority, PCR
Bonds, 7.50% (Oglethorpe
Power Corp.)/(MBIA INS),
1/1/2003 AAA 100,060
400,000 Cartersville, GA Water &
Sewer, Refunding Revenue
Bonds, 5.30% (AMBAC INS),
1/1/2005 AAA 411,368
50,000 Chatham County, GA School
District, GO UT, 6.75%
(MBIA INS), 8/1/2018 AAA 57,208
500,000 Cobb County, GA School Dis-
trict, GO UT Refunding
Bonds, 6.65% (United States
Treasury PRF), 2/1/2001 AA 536,280
100,000 Cobb County, GA Solid Waste
Management Authority,
Revenue Bonds, 6.35%,
1/1/2009 AA+ 110,828
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--continued
GEORGIA--CONTINUED
$ 200,000 De Kalb County, GA School
District, GO UT Bonds
(Series A), 6.25%, 7/1/2011 AA $ 224,886
1,000,000 De Kalb County, GA Water &
Sewer, Refunding Revenue
Bonds, 5.125% (Original
Issue Yield: 5.25%),
10/1/2011 AA 997,770
500,000 De Kalb County, GA Water &
Sewer, Refunding Revenue
Bonds, 5.25% (Original
Issue Yield: 5.42%),
10/1/2023 AA 480,840
150,000 De Kalb County, GA, GO UT
Bonds, 5.50% (Original
Issue Yield: 5.60%),
1/1/2016 AA+ 150,177
100,000 Decatur, GA Housing
Authority, Mortgage
Refunding Revenue Bonds,
6.45% (FHA and MBIA
INS)/(Original Issue Yield:
6.524%), 7/1/2025 AAA 102,888
500,000 Downtown Savannah, GA,
Refunding Revenue Bonds
(Series A), 4.95% (Original
Issue Yield: 5.05%),
1/1/2006 AA 507,135
120,000 Fayette County, GA School
District, GO UT Bonds,
6.125% (Original Issue
Yield: 6.30%),
3/1/2015 A+ 127,247
160,000 Fayette County, GA, Water
Revenue Bonds (Series B),
6.20% (FGIC INS)/(Original
Issue Yield: 6.30%),
10/1/2022 AAA 170,953
60,000 Forsyth County, GA School
District, GO UT Bonds,
6.70%,
7/1/2012 A+ 69,424
400,000 Fulco, GA Hospital
Authority, Refunding Bonds,
4.70% (St. Joseph's
Hospital of Atlanta),
10/1/2000 A 402,432
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE GEORGIA MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--continued
GEORGIA--CONTINUED
$ 25,000 Fulton County, GA School
District, GO UT Bonds,
5.60% (Original Issue
Yield: 5.65%),
1/1/2011 AA $ 25,769
475,000 Fulton County, GA, Water
and Sewer Refunding Revenue
Bonds, 6.25% (FGIC INS)/
(Original Issue Yield:
6.425%),
1/1/2007 AAA 530,148
500,000 Fulton De Kalb, GA Hospital
Authority, Revenue Bonds,
5.50% (MBIA INS)/(Original
Issue Yield: 5.85%),
1/1/2012 AAA 503,545
400,000 Gainsville & Hall County,
GA Hospital Authority,
Revenue Anticipation
Certificates, 5.75%
(Northeast GA Healthcare
Proj-
ect)/(MBIA INS)/(Original
Issue Yield: 5.98%),
10/1/2017 AAA 407,560
300,000 Georgia Medical Center
Hospital Authority,
Refunding Revenue
Anticipation Certificates
(Series C), 5.90% (Columbus
Regional Healthcare
System)/ (MBIA
INS)/(Original Issue Yield:
5.95%), 8/1/2001 AAA 318,927
285,000 Georgia Municipal Electric
Authority, Electric Power
Revenue Refunding Bonds
(Series B), 6.125% (FGIC
INS)/(Original Issue Yield:
6.30%), 1/1/2014 AAA 300,672
500,000 Georgia State HFA,
Refunding Revenue SFM Bonds
(Subser
A-2), 6.55% (FHA/VA mtgs
GTD), 12/1/2027 AA+ 512,995
200,000 Georgia State, GO UT Bonds
(Series B), 7.20%, 3/1/2006 AA+ 238,002
500,000 Georgia State, GO UT Bonds
(Series D), 6.80%, 8/1/2000 AA+ 545,285
200,000 Georgia State, GO UT Bonds
(Series F), 6.50%,
12/1/2007 AA+ 230,380
500,000 Griffin, GA, Combined
Public Utility Revenue
Bonds, 5.40% (FSA INS),
1/1/2016 AAA 503,920
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--continued
GEORGIA--CONTINUED
$ 350,000 Gwinnett County, GA Recrea-
tional Authority, Revenue
Bonds, 7.00% (United States
Treasury PRF)/(Original
Issue Yield: 7.00%),
2/1/1999 AAA $ 359,009
400,000 Gwinnett County, GA School
District, GO UT Refunding
Bonds (Series B), 5.00%
(Original Issue Yield:
5.15%),
2/1/2009 AA 400,700
100,000 Gwinnett County, GA, Water
& Sewage Utility
Certificates of
Participation, 8.40%,
8/1/2001 AA 117,368
30,000 Hapeville, GA, Water &
Sewer Revenue Bonds, 6.20%
(MBIA INS), 7/1/2006 AAA 33,157
25,000 Henry County, GA & Henry
County Water & Sewer
Authority, GO LT Revenue
Refunding Bonds (Series A),
5.25% (AMBAC INS)/(Original
Issue Yield: 5.40%),
2/1/2018 AAA 24,513
500,000 Houston County, GA School
District, GO UT Bond, 5.50%
(MBIA INS), 3/1/2016 AAA 500,870
400,000 Marietta, GA Development
Authority, Revenue Bonds
(Series B), 5.75% (Life
College, Inc.)/(CGIC
LOC)/(Original Issue Yield:
5.91%), 9/1/2014 AAA 410,780
500,000 Meriwether County, GA
School District, GO UT
Bonds, 7.00% (FSA INS),
2/1/2007 AAA 587,890
400,000 Newton County School
District, GA, GO UT Bonds,
5.625% (FGIC INS)/(Original
Issue Yield: 5.70%),
2/1/2013 AAA 410,312
100,000 Peach County, GA School
District, GO UT Bonds,
6.30% (MBIA INS)/(Original
Issue Yield: 6.35%),
2/1/2014 AAA 109,713
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE GEORGIA MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--continued
GEORGIA--CONTINUED
$ 250,000 Private Colleges &
Universities Facilities of
GA, Refunding Revenue
Bonds, 5.625% (Agnes Scott
College Project)/(Original
Issue Yield: 5.70%),
6/1/2023 AA- $ 251,340
200,000 Rockdale County, GA School
District, GO UT Bonds,
6.30%, 1/1/2007 A1 221,420
150,000 Savannah, GA Resources
Recovery Development
Authority, Refunding
Revenue Bonds, 5.95%
(Savannah Energy Systems
Co.), 12/1/2002 A+ 158,922
335,000 Savannah, GA Resources
Recovery Development
Authority, Revenue Bonds,
6.30% (Savannah Energy
Systems Co.), 12/1/2006 A+ 354,905
110,000 Savannah, GA Water &
Sewage, Revenue Bonds,
5.10% (Original Issue
Yield: 5.55%),
12/1/2010 AA- 109,109
----------
Total Long-Term Municipal
Securities (identified cost
$13,502,041) 14,053,423
----------
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Short-Term Municipal Security--1.4%
$ 200,000 Burke County, GA
Development Authority, PCR
Bonds Daily VRDNs (Georgia
Power Co.)
(at amortized cost) A+ $ 200,000
----------
Open-Ended Investment Company--2.7%
384,806 Fidelity Tax Exempt Money
Market (at net asset value) 384,806
----------
Total Investments (identi-
fied cost $14,086,847) $14,638,229
----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND
(CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore North Carolina Municipal Bond Fund (Class A Shares) (the "Fund") from
December 23, 1994 (start of performance) to November 30, 1996 compared to the
Lehman State General Obligation Bond Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
Total return for shareholders purchasing shares of the Fund at net asset
value without a sales charge including accounts purchasing shares through the
Trust Division of the Wachovia Banks, is 5.17% for the year ended November
30, 1996 as reflected in the Financial Highlights section of the Fund's
prospectus.
+ The Lehman State General Obligation Bond Index is not adjusted to reflect
sales charges, expenses, or other fees that the SEC requires to be reflected
in the Fund's performance. This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND
(CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore North Carolina Municipal Bond Fund (Class Y Shares) (the "Fund") from
July 23, 1996 (start of performance) to November 30, 1996 compared to the Lehman
State General Obligation Bond Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman State General Obligation Bond Index is not adjusted to reflect
sales charges, expenses, or other fees that the SEC requires to be reflected
in the Fund's performance. This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--94.9%
NORTH CAROLINA--94.9%
$1,000,000 Asheville, NC Water
Systems, Revenue Bonds,
5.70% (FGIC INS)/(Original
Issue Yield: 5.80%),
8/1/2025 AAA $1,014,820
275,000 Brunswick County, NC, GO UT
Refunding Bonds, 4.30%
(AMBAC INS), 3/1/1997 AAA 275,550
1,030,000 Buncombe County, NC, GO UT
Bonds, 4.90% (Original
Issue Yield: 5.15%),
4/1/2014 AA- 988,882
190,000 Buncombe County, NC, GO UT
Bonds, 5.20%, 5/1/2008 AA- 195,890
1,400,000 Carteret County, NC, GO UT
Bonds, 5.40% (MBIA INS)/
(Original Issue Yield:
5.40%), 5/1/2015 AAA 1,411,830
100,000 Charlotte, NC, GO UT Bonds,
5.70%, 2/1/2007 AAA 107,318
1,500,000 Charlotte, NC, GO UT
Refunding Bonds, 5.00%
(Original Issue Yield:
5.05%),
2/1/2008 AAA 1,530,165
1,250,000 Charlotte, NC, GO UT
Refunding Bonds, 5.00%
(Original Issue Yield:
5.10%),
2/1/2009 AAA 1,272,188
840,000 Charlotte, NC, GO UT
Refunding Bonds, 5.00%
(Original Issue Yield:
5.15%),
2/1/2012 AAA 836,850
900,000 Charlotte, NC, GO UT Water
& Sewer Bonds (Series A),
5.30%, 4/1/2008 AAA 939,339
900,000 Charlotte, NC, Refunding
Certificate of
Participation (Series C),
5.00% (Convention
Facility)/ (AMBAC
INS)/(Original Issue Yield:
5.66%), 12/1/2021 AAA 845,640
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$ 960,000 Charlotte-Mecklenburg
Hospital Authority, NC,
Health System Revenue
Refunding Bonds, 5.75%
(Original Issue Yield:
6.498%), 1/1/2012 AA $ 974,726
1,000,000 Charlotte-Mecklenburg
Hospital Authority, NC,
Revenue Bonds, 5.60%
(Original Issue Yield:
5.70%), 1/15/2009 AA 1,043,980
345,000 Concord, NC, Certificate of
Participation, 5.60% (MBIA
INS)/
(Original Issue Yield:
5.70%),
6/1/2005 AAA 364,089
445,000 Concord, NC, Certificate of
Participation, 5.40% (MBIA
INS)/ (Original Issue
Yield: 5.50%), 6/1/2003 AAA 464,313
210,000 Cumberland County, NC
Hospital Facilities,
Revenue Bonds, 6.00% (MBIA
INS)/(Original Issue Yield:
6.84%), 10/1/2021 AAA 214,971
100,000 Cumberland County, NC,
Certificate of
Participation (Series A),
6.375% (Cumberland County,
NC Civic Center Project)/
(AMBAC INS)/(Original Issue
Yield: 6.50%), 12/1/2010 AAA 109,389
100,000 Cumberland County, NC, GO
UT, 5.70% (MBIA
INS)/(Original Issue Yield:
5.70%),
2/1/2006 AAA 106,728
615,000 Currituck County, NC, GO UT
Bonds, 5.40% (MBIA INS),
4/1/2009 AAA 638,844
110,000 Dare County, NC, GO UT
Refunding Bonds, 5.00%
(MBIA INS), 5/1/2010 AAA 109,305
100,000 Durham County, NC, GO UT
Bonds, 5.75% (Original
Issue Yield: 5.95%),
2/1/2009 AAA 105,462
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$ 50,000 Durham County, NC, GO UT
Bonds, 5.80% (Original
Issue Yield: 6.00%),
4/1/2010 AAA $ 53,147
50,000 Durham, NC Water & Sewer
Utility System, Revenue
Bonds, 5.80% (Original
Issue Yield: 5.85%),
12/1/2003 AA 54,072
100,000 Durham, NC, GO UT Revenue
Bonds, 5.80% (Original
Issue Yield: 5.95%),
2/1/2012 AAA 105,720
100,000 East Carolina University,
NC, Revenue Bonds, 5.50%
(Original Issue Yield:
5.60%),
5/1/2018 A 99,064
1,500,000 Fayetteville, NC Public
Works Commission, Refunding
Revenue Bonds, 4.75% (FGIC
INS)/ (Original Issue
Yield: 5.23%), 3/1/2014 AAA 1,388,940
1,000,000 Forsyth County, NC, GO UT,
4.75%, 2/1/2005 AAA 1,016,540
500,000 Franklin County, NC,
Certificates of
Participation, 6.10% (Jail
& School Project)/(FGIC
INS)/(Original Issue Yield:
6.20%), 6/1/2003 AAA 547,310
320,000 Fremont, NC Housing
Development Corp., First
Lien Revenue Refunding
Bonds, 6.75% (Torhunta
Apts)/(Federal National
Mortgage Association COL),
7/15/2022 Aaa 331,523
600,000 Gaston County, NC, GO UT
Bonds, 5.60% (MBIA INS),
3/1/1997 AAA 603,168
100,000 Gastonia, NC Combined
Utilities System, Revenue
Bonds, 6.00% (MBIA
INS)/(Original Issue Yield:
6.10%), 5/1/2014 AAA 106,010
500,000 Gastonia, NC, GO UT Bonds,
5.30% (FGIC INS)/(Original
Issue Yield: 5.40%),
6/1/2009 AAA 514,995
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$1,000,000 Greensboro, NC, Certificate
of Participation (Series
A), 5.625% (Original Issue
Yield: 6.05%), 12/1/2015 AA $1,013,070
105,000 Greensboro, NC,
Certificates of
Participation, 6.65%
(Coliseum Arena Expansion
Project)/
(Original Issue Yield:
6.70%),
12/1/2004 AA 116,199
500,000 Greensboro, NC, GO UT
Bonds, 6.00%, 3/1/1997 AAA 503,100
100,000 Greenville, NC Combined
Enterprise System, Revenue
Bonds, 5.70% (Original
Issue Yield: 5.75%),
9/1/2006 A+ 106,897
75,000 Harnett County, NC,
Certificates of
Participation, 5.90% (AMBAC
INS), 12/1/2000 AAA 79,812
500,000 Harnett County, NC,
Certificates of
Participation, 6.20% (AMBAC
INS), 12/1/2009 AAA 546,790
600,000 High Point, NC, GO UT Reve-
nue Bonds, 5.60%, 3/1/2008 AA 636,702
1,000,000 Johnston County, NC,
Certificate of
Participation, 4.50% (MBIA
INS), 9/1/2000 AAA 1,006,810
100,000 Martin County, NC IFA, PCR
Bonds, 6.80% (Weyerhaeuser
Co.), 5/1/2024 A 108,974
850,000 Martin County, NC IFA,
Revenue Bonds, 5.65%
(Weyerhaeuser Co.),
12/1/2023 A 843,600
100,000 Mecklenburg County, NC, GO
UT Bonds, 6.25% (United
States Treasury
PRF)/(Original Issue Yield:
6.35%), 1/1/2010 (@102) AAA 110,410
100,000 Mecklenburg County, NC, GO
UT Refunding Bonds, 5.90%
(Original Issue Yield:
6.05%), 3/1/2004 AAA 107,685
425,000 North Carolina Eastern
Municipal Power Agency,
Refunding Revenue Bonds
(Series A), 7.50%, 1/1/2015
(@102) Aaa 434,924
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$ 100,000 North Carolina Educational
Facilities Finance Agency,
Refunding Revenue Bonds,
6.00% (Davidson College)/
(Original Issue Yield:
6.20%),
12/1/2012 AA $ 102,584
450,000 North Carolina Educational
Facilities Finance Agency,
Revenue Bonds (Series B),
4.25% (Duke
University)/(Original Issue
Yield: 4.30%), 10/1/2003 AA+ 444,330
1,000,000 North Carolina Educational
Facilities Finance Agency,
Revenue Bonds (Series C),
6.75% (Duke
University)/(Original Issue
Yield: 6.769%), 10/1/2021 AA+ 1,099,810
20,000 North Carolina HFA, Multi-
Family Refunding Revenue
Bonds (Series B), 6.90%
(FHA INS), 7/1/2024 AA 21,033
85,000 North Carolina HFA, Revenue
Bonds (Series Z), 6.60%,
9/1/2026 AA 88,206
750,000 North Carolina HFA, Revenue
Bonds, 6.20%, 3/1/2018 AA 765,143
765,000 North Carolina Medical Care
Commission Hospital,
Refunding Revenue Bonds,
5.375% (Scotland Memorial
Hospital)/(Asset Guaranty
LOC)/(Original Issue Yield:
5.599%), 10/1/2011 AA 753,043
50,000 North Carolina Medical Care
Commission Hospital,
Refunding Revenue Bonds,
6.125% (Rex
Hospital)/(Original Issue
Yield: 6.219%), 6/1/2010 A+ 51,946
1,000,000 North Carolina Medical Care
Commission Hospital,
Revenue Bonds (Series C),
5.25% (Duke University
Hospital)/(Original Issue
Yield: 5.65%), 6/1/2017 AA 983,360
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$1,000,000 North Carolina Medical Care
Commission Hospital,
Revenue Bonds, 7.00% (Duke
University
Hospital)/(Original Issue
Yield: 7.08%), 6/1/2021 Aaa $1,126,690
850,000 North Carolina Medical Care
Commission Hospital,
Revenue Refunding Bonds,
7.375% (Presbyterian
Hospital)/(United States
Treasury PRF)/(Original
Issue Yield: 7.417%),
10/1/2000 (@102) Aaa 958,384
115,000 North Carolina Municipal
Power Agency No. 1, Catawba
Electric Revenue Refunding
Bonds, 5.90% (Original
Issue Yield: 5.95%),
1/1/2003 A- 121,295
100,000 North Carolina Municipal
Power Agency No. 1, Catawba
Electric Revenue Refunding
Bonds, 7.875% (United
States Treasury PRF),
1/1/2019 (@102) AAA 106,330
500,000 North Carolina Municipal
Power Agency No. 1,
Refunding Revenue Bonds,
7.625% (AMBAC
INS)/(Original Issue Yield:
7.70%), 1/1/2014 AAA 530,355
400,000 North Carolina State, GO UT
Bonds (Series A), 4.70%,
2/1/2005 AAA 405,860
1,000,000 North Carolina State, GO UT
Refunding Bonds (Series C),
4.80% (North Carolina
Prison
Facilities)/(Original Issue
Yield: 4.85%), 3/1/2009 AAA 989,430
575,000 Onslow County, NC, GO UT
Bonds, 5.70% (MBIA INS)/
(Original Issue Yield:
5.85%), 3/1/2013 AAA 602,882
635,000 Pitt County, NC, Refunding
Revenue Bonds, 5.20% (Pitt
County Memorial Hospital)/
(Original Issue Yield:
5.30%), 12/1/2008 AA- 640,080
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$ 400,000 Raleigh, NC, GO UT
Refunding Bonds, 6.40%,
3/1/2006 AAA $ 434,828
515,000 Randolph County, NC,
Certificate of
Participation, 4.25% (MBIA
INS), 6/1/1999 AAA 517,127
800,000 Randolph County, NC,
Certificates of
Participation, 4.875% (MBIA
INS)/(Original Issue Yield:
5.05%), 6/1/2006 AAA 806,056
500,000 Robeson County, NC, GO UT
Refunding Revenue Bonds,
4.90% (AMBAC INS), 2/1/2007 AAA 506,165
250,000 Rutherford County, NC, GO
UT Refunding Bonds, 5.10%
(MBIA INS), 6/1/2009 AAA 250,758
1,025,000 Sanford, NC, GO UT Bonds,
4.90% (MBIA INS), 3/1/2009 AAA 1,019,229
200,000 Sanford, NC, GO UT Bonds,
4.90% (Original Issue
Yield: 4.95%), 3/1/2010 AAA 195,920
1,145,000 Shelby, NC Housing Develop-
ment Corp., Mortgage
Revenue Bonds, 6.10%
(Hickory Creek
Apartments)/(FHA INS),
2/1/2023 AAA 1,168,289
650,000 Wake County, NC, GO UT
Refunding Bonds, 4.70%
(Original Issue Yield:
4.80%),
4/1/2005 AAA 659,684
<CAPTION>
Principal
Amount Credit
or Shares Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$ 500,000 Wake County, NC, Hospital
Revenue Bonds, 5.125% (MBIA
INS)/(Original Issue Yield:
5.35%), 10/1/2026 AAA $ 475,784
75,000 Wilmington, NC, GO UT Reve-
nue Bonds, 5.60% (Original
Issue Yield: 5.75%),
6/1/2010 A+ 78,212
----------
Total Long-Term Municipal
Securities (identified cost
$38,494,452) 39,888,554
----------
Short-Term Municipal Securities--1.2%
NORTH CAROLINA--1.2%
500,000 Alamance County, NC
Industrial Facilities &
Pollution Control Financing
Authority, Revenue Bonds
Weekly VRDNs (SCI Systems,
Inc.)/(PNC Bank, Kentucky
LOC) (at amortized cost) A1 500,000
----------
Open-Ended Investment Companies--2.4%
1,020,098 Fidelity Tax Exempt Money
Market Fund (at net asset
value) 1,020,098
----------
Total Investments
(identified
cost $40,014,550) $41,408,652
----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND
(CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore South Carolina Municipal Bond Fund (Class A Shares) (the "Fund") from
January 11, 1991 (start of performance) to November 30, 1996 compared to the
Lehman State General Obligation Bond Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
Total return for shareholders purchasing shares of the Fund at net asset
value without a sales charge including accounts purchasing shares through the
Trust Division of the Wachovia Banks, is 5.54% for the year ended November
30, 1996 as reflected in the Financial Highlights section of the Fund's
prospectus.
+ The Lehman State General Obligation Bond Index is not adjusted to reflect
sales charges, expenses, or other fees that the SEC requires to be reflected
in the Fund's performance. This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND
(CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000 in the
Biltmore South Carolina Municipal Bond Fund (Class Y Shares) (the "Fund") from
July 23, 1996 (start of performance) to November 30, 1996 compared to the Lehman
State General Obligation Bond Index.+
[GRAPH APPEARS HERE]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman State General Obligation Bond Index is not adjusted to reflect
sales charges, expenses, or other fees that the SEC requires to be reflected
in the Fund's performance. This index is unmanaged.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipals--98.7%
SOUTH CAROLINA--98.7%
$ 540,000 Barnwell County, SC School
District No. 45, GO UT
Refunding Bonds, 5.60%
(AMBAC INS)/ (State Aid
Withholding LOC)/ (Original
Issue Yield: 5.65%),
2/1/2012 AAA $ 551,501
570,000 Barnwell County, SC School
District No. 45, GO UT
Refunding Bonds, 5.60%
(AMBAC INS)/ (State Aid
Withholding LOC)/ (Original
Issue Yield: 5.70%),
2/1/2013 AAA 579,900
150,000 Beaufort County, SC School
District, GO UT, 7.80%,
12/1/1996 A 150,034
1,000,000 Beaufort County, SC,
Certificate of
Participation, 5.00% (Hilton
Head Airport), 7/1/2001 A 1,018,820
675,000 Beaufort County, SC,
Certificates of
Participation, 7.125% (AMBAC
INS)/(Original Issue Yield:
7.45%), 6/1/2012 AAA 743,302
855,000 Beaufort-Jasper, SC Water &
Sewer Authority, Waterworks
and Sewer System Revenue
Bonds, 5.90% (FGIC
INS)/(Original Issue Yield:
6.00%), 3/1/2016 AAA 885,182
750,000 Berkeley County, SC,
Pollution Control Facilities
Revenue Bonds, 6.50% (South
Carolina Electric and
Gas)/(Citibank NA, New York
LOC), 10/1/2014 A+ 811,403
1,500,000 Berkeley County, SC, Water &
Sewer Refunding Revenue
Bonds, 5.50% (MBIA
INS)/(Original Issue Yield:
5.55%), 6/1/2013 AAA 1,512,660
1,105,000 Charleston County, SC
Airport District, Airport
System Refunding Revenue
Bonds, 4.75% (MBIA INS),
7/1/2015 AAA 1,008,622
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$1,900,000 Charleston, SC, Certificates
of Participation, 5.00%
(AMBAC INS)/(Original Issue
Yield: 5.39%), 9/1/2015 AAA $ 1,799,110
1,000,000 Charleston, SC, Certificates
of Participation, 7.10%
(MBIA INS)/ (United States
Treasury PRF),
6/1/2001 (@102) AAA 1,132,070
250,000 Charleston, SC, GO Bonds
(Series A), 6.30%, 9/1/2005 AA 271,918
1,315,000 Charleston, SC, GO UT Bonds,
9.00% (State Aid Withholding
LOC), 6/1/2001 AA 1,567,782
310,000 Charleston, SC, Resources
Recovery Revenue Bonds
(Series A), 9.00% (Foster
Wheeler Corp.),
1/1/2005 A 331,117
1,500,000 Charleston, SC, Water &
Sewer Refunding Revenue
Bonds (Series A), 7.00%,
1/1/2015 AA- 1,533,765
400,000 Charleston, SC, Water &
Sewer Refunding Revenue
Bonds (Series A), 7.05%,
1/1/2006 AA- 409,008
1,000,000 Charleston, SC, Water &
Sewer Refunding Revenue
Bonds, 6.00% (Original Issue
Yield: 6.242%), 1/1/2012 AA- 1,029,260
1,260,000 Charleston, SC, Waterworks &
Sewer Refunding Revenue
Bonds, 5.00% (MBIA INS),
1/1/2022 AAA 1,175,567
875,000 Chester County, SC School
District, GO UT , 6.85%
(United States Treasury
PRF)/(Original Issue Yield:
6.95%), 2/1/2012 A 957,784
1,125,000 Chester County, SC School
District, GO UT, 6.85%
(United States Treasury
PRF)/(Original Issue Yield:
6.90%), 2/1/2009 A 1,231,436
1,500,000 Columbia, SC Waterworks &
Sewer System, Refunding
Revenue Bonds, 5.70%,
2/1/2010 AA 1,582,935
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$1,000,000 Columbia, SC, Parking
Facilities Refunding Revenue
Bonds, 5.875% (AMBAC
INS)/(Original Issue Yield:
6.007%), 12/1/2013 AAA $ 1,043,020
1,065,000 Dorchester County, SC School
District No. 002, GO UT
Bonds, 5.125% (FGIC
INS)/(Original Issue Yield:
5.25%), 2/1/2012 AAA 1,058,152
1,500,000 Dorchester County, SC School
District No. 002, GO UT
Bonds, 5.20% (FGIC INS),
2/1/2018 AAA 1,471,020
2,250,000 Dorchester County, SC School
District No. 002, GO UT
Bonds, 5.20% (FGIC
INS)/(Original Issue Yield:
5.35%), 2/1/2017 AAA 2,207,678
600,000 Dorchester County, SC School
District No. 002, GO UT
Bonds, 6.65% (MBIA
INS)/(United States Treasury
PRF)/(Original Issue Yield:
6.85%), 7/1/2012 AAA 648,366
870,000 Edgefield County, SC School
District, GO UT Bonds, 6.40%
(FSA INS)/(Original Issue
Yield: 6.60%), 2/1/2009 AAA 955,773
1,155,000 Fairfield County, SC School
District, Certificates of
Participation, 5.50%
(Fairfield Primary Geiger)/
(Asset Guaranty
GTD)/(Original Issue Yield:
5.60%), 3/1/2007 AA 1,183,101
2,000,000 Fairfield County, SC, PCR
Bonds, 6.50% (South Carolina
Electric and Gas), 9/1/2014 A 2,162,440
500,000 Florence County, SC,
Hospital Revenue Bonds,
6.75% (Mcleod Regional
Medical Center)/(FGIC
INS)/(Original Issue Yield:
7.00%), 11/1/2010 AAA 548,130
1,465,000 Florence, SC, Water & Sewer
Revenue Refunding Bonds,
5.00% (AMBAC INS), 3/1/2004 AAA 1,502,065
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$2,805,000 Grand Strand Water & Sewage
Authority, SC, Revenue
Refunding Bonds, 6.375%
(South Carolina Waterworks &
Sewer System)/(MBIA
INS)/(Original Issue Yield:
6.508%), 6/1/2012 AAA $ 3,176,971
800,000 Grand Strand Water & Sewage
Authority, SC, Waterworks &
Sewer System Revenue
Refunding Bonds, 6.00% (MBIA
INS)/(Original Issue Yield:
6.595%), 6/1/2019 AAA 823,936
500,000 Greenville County, SC,
Industrial Revenue Bonds,
7.10% (Lockheed Aeromod
Center Incorporated
Project), 11/1/2011 BBB+ 536,160
2,250,000 Greenville, SC Hospital
System
Facilities, Refunding
Revenue
Bonds (Series B), 5.25%
(Original Issue Yield:
6.125%), 5/1/2023 AA- 2,143,440
600,000 Greenville, SC Hospital
System Facilities, Refunding
Revenue Bonds, 5.75%
(Original Issue Yield:
5.95%), 5/1/2013 AA- 611,040
1,500,000 Greenville, SC Hospital
System Facilities, Revenue
Bonds (Series B), 5.25%
(Original Issue Yield:
6.076%), 5/1/2017 AA- 1,446,240
760,000 Greenville, SC Hospital
System Facilities, Revenue
Bonds, 7.00% (Greenville
Health Corporation)/
(Original Issue Yield:
7.454%), 5/1/2017 AAA 841,487
1,000,000 Hilton Head Island, SC
Public Facilities Corp.,
Certificates of
Participation, 5.40% (AMBAC
INS)/(Original Issue Yield:
5.599%), 3/1/2009 AAA 1,021,000
1,000,000 Hilton Head Public Services
District No. 1, SC,
Waterworks and Sewer Systems
Revenue Bonds, 5.50%
(Original Issue Yield:
5.85%), 8/1/2020 AAA 994,020
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$ 100,000 Horry County, SC, GO UT
Bonds, 7.45% (United States
Treasury PRF), 12/1/1988
(@102) A+ $ 108,603
980,000 Horry County, SC, GO UT
Refunding Bonds (Series B),
4.65% (MBIA INS), 12/1/2004 AAA 975,649
1,960,000 Lancaster County, SC School
District, GO UT, 6.50% (MBIA
INS)/(Original Issue Yield:
6.599%), 7/1/2008 AAA 2,171,484
655,000 Lexington & Richland
Counties, SC School District
No. 005, GO UT Bonds, 5.05%
(MBIA INS), 3/1/2005 AAA 675,691
175,000 Lexington County, SC ,
Revenue Bonds (Series C),
8.00% (J.B. White & Co.
Project), 1/1/2011 NR 195,351
3,100,000 Marion County, SC Hospital
District, Refunding Revenue
Bonds, 5.375% (Connie Lee
LOC)/(Original Issue Yield:
5.818%),
11/1/2025 AAA 2,985,486
805,000 Medical University of South
Carolina, Hospital
Facilities Revenue Bonds,
5.25% (MBIA INS)/(Original
Issue Yield: 5.25%),
7/1/2004 AAA 838,955
2,000,000 North Charleston, SC Sewer
District, Refunding Revenue
Bonds (Series A), 6.00%
(MBIA INS)/(Original Issue
Yield: 6.593%), 7/1/2018 AAA 2,060,520
500,000 North Charleston, SC Sewer
District, Revenue Bonds
(Series B), 6.00% (MBIA
INS)/(Original Issue Yield:
6.593%), 7/1/2018 AAA 515,130
1,275,000 Oconee County, SC School
District, GO UT Bonds, 5.10%
(MBIA INS)/(Original Issue
Yield: 5.50%), 9/1/2013 AAA 1,243,355
2,500,000 Oconee County, SC, PCR
Refunding Bonds, 5.80% (Duke
Power Co.), 4/1/2014 AA- 2,570,450
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$1,250,000 Pickens & Richland Countys,
SC, Hospital Facilities
Refunding Revenue Bonds
(Series A), 7.00% (South
Carolina Baptist
Hospital)/(AMBAC
INS)/(United States Treasury
PRF)/(Original Issue Yield:
7.16%), 8/1/2017 AAA $ 1,408,750
100,000 Piedmont Municipal Power
Agency, SC, Electricity
Refunding Revenue Bonds
(Series A), 7.40% (AMBAC
INS)/ (Original Issue Yield:
7.483%), 1/1/2018 AAA 105,316
590,000 Piedmont Municipal Power
Agency, SC, Electricity
Refunding Revenue Bonds,
6.85% (FGIC INS), 1/1/2007 AAA 650,481
590,000 Piedmont Municipal Power
Agency, SC, Refunding Bonds,
5.50% (MBIA INS)/(Original
Issue Yield: 5.60%),
1/1/2013 AAA 597,847
970,000 Piedmont Municipal Power
Agency, SC, Refunding
Revenue Bonds (Series A),
6.375% (FGIC LOC)/(Original
Issue Yield: 6.45%),
1/1/2006 AAA 1,073,877
410,000 Piedmont Municipal Power
Agency, SC, Refunding
Revenue
Bonds, 5.50% (MBIA INS)/
(Original Issue Yield:
5.60%),
1/1/2013 AAA 422,599
165,000 Piedmont Municipal Power
Agency, SC, Refunding
Revenue Bonds, 6.375% (FGIC
INS)/
(Original Issue Yield:
6.45%),
1/1/2006 AAA 184,790
1,000,000 Piedmont Municipal Power
Agency, SC, Refunding
Revenue Bonds, 6.50% (FGIC
INS)/
(Original Issue Yield:
6.88%),
1/1/2011 AAA 1,089,580
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$1,325,000 Richland-Lexington Airport
District, Airport & Marina
Revenue Bonds, 6.125%
(Columbia Metropolitan
Airport)/(AMBAC INS)/
(Original Issue Yield:
6.40%),
1/1/2025 AAA $ 1,361,438
600,000 Richland County, SC Hospital
Facilities, Revenue Bonds
(Series PG-A), 7.10%
(Community Provider Pooled
Loan Program)/ (CGIC INS),
7/1/2005 AAA 672,852
255,000 Richland County, SC Hospital
Facilities, Revenue Bonds,
8.125% (Sun Health-
Orangeburg)/(Sumitomo Bank
Ltd., Osaka LOC), 10/1/2011 A 273,021
1,050,000 Richland County, SC School
District No. 002, GO UT
Bonds
(Series B), 6.75% (MBIA
INS),
3/1/2001 AAA 1,147,062
650,000 Richland County, SC Solid
Waste Disposal Facilities,
Revenue Bonds (Series A),
7.45% (Union Camp Corp.
Project)/(Original Issue
Yield: 7.513%), 4/1/2021 A- 717,561
1,390,000 Richland County, SC, GO UT
Refunding Bonds (Series B),
6.25% (State Aid Withholding
LOC), 3/1/2001 AA 1,496,794
140,000 Rock Hill, SC Housing
Development Corp.,
Multi-Family Refunding
Revenue Bonds, 7.50%,
7/1/2010 AAA 151,596
1,000,000 Rock Hill, SC Utility
System, Refunding Revenue
Bonds, 5.375% (AMBAC
INS)/(Original Issue Yield:
5.58%), 1/1/2014 AAA 991,130
1,000,000 South Carolina Job
Development Authority,
Revenue Bonds, 5.25%
(Anderson Area Medical
Center, Inc.)/(MBIA INS)/
(Original Issue Yield:
5.63%),
2/1/2015 AAA 979,860
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$ 500,000 South Carolina Resources
Authority, Local Government
Program, Revenue Bonds
(Series A), 7.00%, 6/1/2003 A+ $ 546,800
1,000,000 South Carolina State
Educational Assistance
Authority, Refunding Revenue
Bonds (Series A-3), 5.80%
(Original Issue Yield:
5.90%), 9/1/2004 AAA 1,056,740
1,000,000 South Carolina State
Educational Assistance
Authority, Refunding Revenue
Bonds (Series B), 5.70%
(Original Issue Yield:
5.75%),
9/1/2005 A 1,034,720
405,000 South Carolina State
Educational Assistance
Authority, Revenue Bonds,
6.50% (Original Issue Yield:
6.65%), 9/1/2004 AA 433,654
975,000 South Carolina State Housing
Finance & Development
Authority, Refunding Revenue
Bonds (Series A), 6.15%,
7/1/2008 AA 1,020,942
1,200,000 South Carolina State Housing
Finance & Development
Authority, Revenue Bonds
(Series A), 7.30% (FHA/VA
mtgs GTD),
7/1/2011 AA 1,268,232
1,000,000 South Carolina State Housing
Finance & Development
Authority, Revenue Bonds
(Series A-1), 6.45% (FHA/VA
mtgs GTD),
7/1/2017 AA 1,036,070
500,000 South Carolina State Housing
Finance & Development
Authority, Revenue Bonds
(Series C), 7.70% (FHA/VA
mtgs GTD),
7/1/2010 AA 527,775
520,000 South Carolina State Housing
Finance & Development
Authority, Revenue Bonds
(Series C), 7.75% (FHA/VA
mtgs GTD),
7/1/2022 AA 548,460
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND
Principal
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$ 100,000 South Carolina State Housing
Finance & Development
Authority, Revenue Refunding
Bonds (Series A), 7.50%
(FHA/VA mtgs GTD), 7/1/2011 AA $ 104,378
1,000,000 South Carolina State Ports
Authority, Revenue Bonds,
6.50% (AMBAC INS)/(Original
Issue Yield: 6.75%),
7/1/2006 AAA 1,082,290
1,000,000 South Carolina State Ports
Authority, Revenue Bonds,
6.625% (AMBAC INS)/(Original
Issue Yield: 6.823%),
7/1/2011 AAA 1,081,570
525,000 South Carolina State Ports
Authority, Revenue Bonds,
6.75% (AMBAC INS)/(Original
Issue Yield: 6.90%),
7/1/2021 AAA 566,890
1,950,000 South Carolina State Public
Service Authority, Revenue
Bonds (Series D), 6.50%
(Santee Cooper)/(AMBAC
INS)/(Original Issue Yield:
6.553%), 7/1/2014 AAA 2,150,246
4,500,000 South Carolina State, GO UT
Revenue Bonds (Series A),
5.00% (Original Issue Yield:
5.45%), 3/1/2008 AAA 4,562,775
2,390,000 South Carolina State, State
Capital Improvement (Series
B), 5.75%, 8/1/2000 AAA 2,525,107
1,500,000 Spartanburg County, SC
Health Services District,
Inc., Refunding Revenue
Bonds, 5.50% (AMBAC
INS)/(Original Issue Yield:
5.70%), 4/15/2015 AAA 1,485,360
1,000,000 Spartanburg County, SC
Hospital Facilities, Revenue
Refunding Bonds, 6.55%
(Spartanburg General
Hospital System)/(FSA INS),
4/15/2010 AAA 1,100,270
200,000 Spartanburg County, SC
Hospital Facilities, Revenue
Refunding Bonds, 7.80% (Mary
Black Memorial
Project)/(United States
Treasury PRF)/(Original
Issue Yield: 7.80%),
10/1/2000 A- 217,092
<CAPTION>
Principal
Amount Credit
or Shares Rating* Value
<C> <S> <C> <C>
- ------------------------------------------------------------
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$ 100,000 Spartanburg County, SC
Hospital Facilities, Revenue
Refunding Bonds, 8.25% (Mary
Black Memorial
Project)/(United States
Treasury PRF), 10/1/2008 A- $ 109,109
450,000 Spartanburg, SC Leased
Housing Corp, Refunding
Revenue Bonds, 7.50%,
10/1/2011 A 485,847
1,000,000 Sumter County, SC Hospital
Facilities, Revenue
Refunding Bonds, 6.625%
(Tuomey Regional Medical
Center)/(MBIA INS)/(Original
Issue Yield: 6.98%),
11/15/2004 AAA 1,131,200
1,000,000 University South Carolina,
Parking Facilities Refunding
Revenue Bonds, 5.00% (MBIA
INS)/
(Original Issue Yield:
5.40%),
5/1/2015 AAA 958,710
1,465,000 University of South
Carolina, Revenue Bonds,
5.70% (MBIA INS), 6/1/2020 AAA 1,485,217
1,300,000 Western Carolina Regional
Sewer Authority, SC, Sewer
System Revenue Bonds, 5.50%
(FGIC INS)/(Original Issue
Yield: 5.627%), 3/1/2010 AAA 1,323,608
1,000,000 York County, SC, GO UT
Refunding Bonds, 4.90%
(AMBAC INS)/(Original Issue
Yield: 5.10%), 6/1/2010 AAA 975,600
-----------
Total Long-Term Municipals
(identified cost
$96,499,019) 101,141,105
-----------
Open-Ended Investment Company--0.0%
22,215 Fidelity Tax Exempt Money
Market Fund (at net asset
value) 22,215
-----------
Total Investments
(identified
cost $96,521,234) $101,163,320
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIOS OF INVESTMENTS
(a) The repurchase agreements are fully collateralized by U.S. Government
and/or agency obligations based on market prices at the date of the
portfolio.
(b) Non-income producing.
(c) Current rate and next demand date shown.
(d) Represents securities held as collateral within a margin account, used to
ensure the Fund is able to satisfy the obligations of its outstanding long
futures contracts.
The following acronyms are used in these portfolios:
ADR--American Depositary Receipt
AMBAC--American Municipal Bond Assurance Corporation
CGIC--Capital Guaranty Insurance Corporation
COL--Collateralized
FHA--Federal Housing Administration
FHA/VA--Federal Housing Administration/
Veterans Administration
FGIC--Financial Guaranty Insurance Company
FSA--Financial Security Assurance
GO--General Obligation
GDR--Global Depositary Receipt
GTD--Guaranteed
HFA--Housing Finance Authority
IFA--Industrial Finance Authority
INS--Insured
LOC--Letter of Credit
LP--Limited Partnership
LT--Limited Tax
LTD--Limited
MBIA--Municipal Bond Investors Assurance
MTN--Medium Term Note
PCFA--Pollution Control Finance Authority
PCR--Pollution Control Revenue
PLC--Public Limited Company
PO--Principal Only
PRF--Prerefunded
REMIC--Real Estate Mortgage Investment Conduit
SFM--Single Family Mortgage
UT--Unlimited Tax
VRDNs--Variable Rate Demand Notes
VA--Veterans Administration
* Please refer to the Appendix of the Statement of Additional Information for an
explanation of the credit ratings. Current credit ratings are unaudited.
<TABLE>
<CAPTION>
Net Gross Gross
Unrealized Unrealized Unrealized
Cost of Appreciation/ Appreciation Depreciation
Investments (Depreciation) for Federal for Federal
for Federal for Federal Tax Tax Total Net
Fund Tax Purposes Tax Purposes Purposes Purposes Assets**
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity Fund $ 122,823,911 $27,690,218 $ 28,821,637 $ 1,131,419 $ 150,955,028
Quantitative Equity Fund 122,040,119 47,338,462 47,942,166 603,704 169,727,695
Equity Index Fund 154,829,803 76,340,142 78,548,446 2,208,304 231,987,644
Special Values Fund 57,532,460 7,790,416 8,872,948 1,082,532 65,338,682
Emerging Markets Fund 123,018,118 4,122,517 15,941,051 11,818,534 128,523,214
Balanced Fund 222,768,191 31,790,790 32,659,559 868,769 256,232,311
Fixed Income Fund 180,215,802 1,790,079 2,922,351 1,132,272 180,802,013
Short-Term Fixed Income Fund 121,385,454 604,034 847,392 243,358 117,812,908
Georgia Municipal Bond Fund 14,086,847 551,382 552,358 976 14,333,522
North Carolina Municipal Bond Fund 40,014,550 1,394,102 1,424,223 30,121 42,035,224
South Carolina Municipal Bond Fund 96,521,234 4,642,086 4,717,330 75,244 102,491,286
</TABLE>
** The categories of investments are shown as a percentage of net assets at
November 30, 1996.
At November 30, 1996, the following Funds had investments that were subject
to alternative minimum tax:
<TABLE>
<CAPTION>
Percentage of total market value
Fund subject to alternative minimum tax
---- ----------------------------------
<S> <C>
Georgia Municipal Bond Fund 6.31%
North Carolina Municipal Bond Fund 3.45%
South Carolina Municipal Bond Fund 8.69%
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Biltmore Biltmore Biltmore
Biltmore Quantitative Biltmore Special Emerging Biltmore
Equity Equity Equity Values Markets Balanced
Fund Fund Index Fund Fund Fund Fund
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments in securities,
at value $150,514,129 $169,378,581 $231,169,945 $65,322,876 $127,140,635 $254,558,981
Cash 6,709 -- -- 22,451 15,239
Interest-bearing demand deposit -- -- -- -- 4,055,821 --
Income receivable 221,741 309,463 451,983 101,298 117,967 1,274,955
Receivable for investments sold 459,283 -- -- 263,125 1,094,742 2,071,345
Receivable for shares sold 137,718 106,512 498,575 147,364 63,576 488,460
Receivable for daily variation
margin 23,215 26,450 83,015 -- -- 35,839
Deferred expenses 6,228 14,870 15,038 1,723 21,487 16,876
------------ ------------ ------------ ----------- ------------ ------------
Total assets 151,369,023 169,835,876 232,218,556 65,858,837 132,509,467 258,446,456
------------ ------------ ------------ ----------- ------------ ------------
Liabilities:
Payable for investments purchased 281,091 -- -- 342,973 3,844,760 1,994,844
Payable for shares redeemed 77,734 34,172 159,013 120,747 24,645 156,889
Income distribution payable -- -- -- -- -- --
Payable to Bank -- 11,351 11,562 -- -- 6,833
Payable for taxes withheld -- -- -- -- 2,793 --
Accrued expenses 55,170 62,658 60,337 56,435 114,055 55,579
------------ ------------ ------------ ----------- ------------ ------------
Total liabilities 413,995 108,181 230,912 520,155 3,986,253 2,214,145
------------ ------------ ------------ ----------- ------------ ------------
Net Assets Consist of:
Paid in capital 103,869,273 113,651,644 141,764,048 50,291,005 122,521,536 195,327,230
Net unrealized appreciation
(depreciation) of investments,
futures contracts, and translation
of assets and liabilities in
foreign currency 28,427,151 48,345,355 79,716,798 7,805,878 4,839,347 33,318,313
Accumulated net realized gain (loss)
on investments, futures contracts,
and foreign currency transactions 18,658,604 7,364,466 9,772,678 6,974,557 (17,180) 26,558,348
Undistributed net investment income -- 366,230 734,120 267,242 1,179,511 1,028,420
------------ ------------ ------------ ----------- ------------ ------------
Total Net Assets $150,955,028 $169,727,695 $231,987,644 $65,338,682 $128,523,214 $256,232,311
------------ ------------ ------------ ----------- ------------ ------------
Net Assets
Class A Shares $ 20,774,228 $ 15,742,439 $ 18,154,254 $6,642,067 $ 5,487,576 $ 18,619,496
------------ ------------ ------------ ----------- ------------ ------------
Class B Shares $ 975,964 $ 1,413,914 $ -- $ -- $ -- $ 1,821,409
------------ ------------ ------------ ----------- ------------ ------------
Class Y Shares $129,204,836 $152,571,342 $213,833,390 $58,696,615 $123,035,638 $235,791,406
------------ ------------ ------------ ----------- ------------ ------------
Shares Outstanding
Class A Shares 1,402,910 1,004,767 1,135,858 423,876 470,067 1,400,116
Class B Shares 65,986 90,362 -- -- -- 137,078
Class Y Shares 8,725,212 9,737,865 13,377,938 3,744,851 10,538,413 17,732,903
------------ ------------ ------------ ----------- ------------ ------------
Total Shares Outstanding 10,194,108 10,832,994 14,513,796 4,168,727 11,008,480 19,270,097
------------ ------------ ------------ ----------- ------------ ------------
Net Asset Value Per Share
Class A Shares $ 14.81 $ 15.67 $ 15.98 $ 15.67 $ 11.67 $ 13.30
------------ ------------ ------------ ----------- ------------ ------------
Class B Shares $ 14.79 $ 15.65 -- -- -- $ 13.29
------------ ------------ ------------ ----------- ------------ ------------
Class Y Shares $ 14.81 $ 15.67 $ 15.98 $ 15.67 $ 11.67 $ 13.30
------------ ------------ ------------ ----------- ------------ ------------
Offering Price Per Share*
Class A Shares $ 15.51** $ 16.41** $ 16.73** $ 16.41** $ 12.22** $ 13.93**
------------ ------------ ------------ ----------- ------------ ------------
Class B Shares $ 14.79 $ 15.65 -- -- -- $ 13.29
------------ ------------ ------------ ----------- ------------ ------------
Class Y Shares $ 14.81 $ 15.67 $ 15.98 $ 15.67 $ 11.67 $ 13.30
------------ ------------ ------------ ----------- ------------ ------------
Redemption Proceeds Per Share*
Class A Shares $ 14.81 $ 15.67 $ 15.98 $ 15.67 $ 11.67 $ 13.30
------------ ------------ ------------ ----------- ------------ ------------
Class B Shares $ 14.05**** $ 14.87**** -- -- -- $ 12.63****
------------ ------------ ------------ ----------- ------------ ------------
Class Y Shares $ 14.81 $ 15.67 $ 15.98 $ 15.67 $ 11.67 $ 13.30
------------ ------------ ------------ ----------- ------------ ------------
Investments, at identified cost $122,586,383 $122,040,119 $154,778,007 $57,516,998 $122,299,443 $222,520,573
------------ ------------ ------------ ----------- ------------ ------------
Investments, at tax cost $122,823,911 $122,040,119 $154,829,803 $57,532,460 $123,018,118 $222,768,191
------------ ------------ ------------ ----------- ------------ ------------
</TABLE>
* See 'What Shares Cost' in the Prospectus.
** Computation of Offering Price: 100+95.50 of net asset value.
*** Computation of Offering Price: 100+97.50 of net asset value.
**** Computation of Redemption Proceeds: 95+100 of net asset value.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES--CONTINUED
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Biltmore Biltmore Biltmore
Biltmore Short-Term Biltmore North South
Fixed Fixed Georgia Carolina Carolina
Income Income Municipal Municipal Municipal
Fund Fund Bond Fund Bond Fund Bond Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in securities, at value $182,005,881 $121,989,488 $14,638,229 $41,408,652 $101,163,320
Cash -- -- 2,896 3,969 7,086
Interest-bearing demand deposit -- -- -- -- --
Income receivable 1,983,448 1,286,099 252,991 676,856 1,889,897
Receivable for investments sold 780,935 -- -- -- --
Receivable for shares sold 161,754 1,627,672 -- 24,405 249,466
Receivable for daily variation margin -- -- -- -- --
Deferred expenses 13,864 15,332 11,470 14,855 --
------------ ------------ ----------- ----------- ------------
Total assets 184,945,882 124,918,591 14,905,586 42,128,737 103,309,769
------------ ------------ ----------- ----------- ------------
Liabilities:
Payable for investments purchased 3,748,125 6,996,080 494,358 -- --
------------ ------------ ----------- ----------- ------------
Payable for shares redeemed 252,535 594 19,097 -- 583,386
Income distribution payable -- -- 18,447 53,684 179,392
Payable to Bank 87,599 63,544 -- -- --
Payable for taxes withheld -- -- -- -- --
Accrued expenses 55,610 45,465 40,162 39,829 55,705
------------ ------------ ----------- ----------- ------------
Total liabilities 4,143,869 7,105,683 572,064 93,513 818,483
------------ ------------ ----------- ----------- ------------
Net Assets Consist of:
Paid in capital 181,886,624 121,059,795 13,750,931 40,554,517 97,445,759
Net unrealized appreciation (depreciation)
of investments, futures contracts, and
translation of assets and liabilities in
foreign currency 1,929,209 642,678 551,382 1,394,102 4,642,086
Accumulated net realized gain (loss) on
investments, futures contracts, and
foreign currency transactions (3,342,337) (4,040,258) 31,209 86,605 403,441
Undistributed net investment income 328,517 150,693 -- -- --
------------ ------------ ----------- ----------- ------------
Total Net Assets $180,802,013 $117,812,908 $14,333,522 $42,035,224 $102,491,286
------------ ------------ ----------- ----------- ------------
Net Assets
Class A Shares $ 4,853,055 $ 1,674,804 $ 7,530,797 $13,752,252 $ 65,980,671
------------ ------------ ----------- ----------- ------------
Class B Shares $ 112,618 $ -- $ -- $ -- $ --
------------ ------------ ----------- ----------- ------------
Class Y Shares $175,836,340 $116,138,104 $ 6,802,725 $28,282,972 $ 36,510,615
------------ ------------ ----------- ----------- ------------
Shares Outstanding
Class A Shares 493,903 171,280 684,798 1,247,114 5,973,985
Class B Shares 11,459 -- -- -- --
Class Y Shares 17,893,196 11,864,487 618,581 2,564,829 3,305,292
------------ ------------ ----------- ----------- ------------
Total Shares Outstanding 18,398,558 12,035,767 1,303,379 3,811,943 9,279,277
------------ ------------ ----------- ----------- ------------
Net Asset Value Per Share
Class A Shares $ 9.83 $ 9.79 $ 11.00 $ 11.03 $ 11.05
------------ ------------ ----------- ----------- ------------
Class B Shares $ 9.83 -- -- -- --
------------ ------------ ----------- ----------- ------------
Class Y Shares $ 9.83 $ 9.79 $ 11.00 $ 11.03 $ 11.05
------------ ------------ ----------- ----------- ------------
Offering Price Per Share*
Class A Shares $ 10.29** $ 10.04*** $ 11.52** $ 11.55** $ 11.57**
------------ ------------ ----------- ----------- ------------
Class B Shares $ 9.83 -- -- -- --
------------ ------------ ----------- ----------- ------------
Class Y Shares $ 9.83 $ 9.79 $ 11.00 $ 11.03 $ 11.05
------------ ------------ ----------- ----------- ------------
Redemption Proceeds Per Share*
Class A Shares $ 9.83 $ 9.79 $ 11.00 $ 11.03 $ 11.05
------------ ------------ ----------- ----------- ------------
Class B Shares $ 9.34**** -- -- -- --
------------ ------------ ----------- ----------- ------------
Class Y Shares $ 9.83 $ 9.79 $ 11.00 $ 11.03 $ 11.05
------------ ------------ ----------- ----------- ------------
Investments, at identified cost $180,076,672 $121,346,810 $14,086,847 $40,014,550 $ 96,521,234
------------ ------------ ----------- ----------- ------------
Investments, at tax cost $180,215,802 $121,385,454 $14,086,847 $40,014,550 $ 96,521,234
------------ ------------ ----------- ----------- ------------
</TABLE>
* See 'What Shares Cost' in the Prospectus.
** Computation of Offering Price: 100+95.50 of net asset value.
*** Computation of Offering Price: 100+97.50 of net asset value.
**** Computation of Redemption Proceeds: 95+100 of net asset value.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Biltmore Biltmore Biltmore
Biltmore Quantitative Biltmore Special Emerging Biltmore
Equity Equity Equity Values Markets Balanced
Fund Fund Index Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Investment Income:
Dividends $2,488,170 $3,006,198 $3,930,920 $ 640,715 $1,932,566 $2,298,125
Interest 997,821 470,591 1,509,273 126,621 395,084 6,250,593
---------- ---------- ---------- ---------- --------- ----------
Total income 3,485,991 3,476,789 5,440,193 767,336 2,327,650 8,548,718
---------- ---------- ---------- ---------- --------- ----------
Expenses:
Investment advisory fee 1,003,098 984,868 616,302 324,764 1,006,829 1,588,214
Administrative personnel and services fee 124,288 121,949 178,161 35,122 87,231 196,750
Custodian fees 28,660 28,139 41,087 8,119 313,569 45,373
Transfer and dividend disbursing agent fees
and expenses 79,975 59,349 61,813 49,103 78,603 61,467
Trustees' fees 6,736 7,179 8,621 2,800 2,077 10,717
Auditing fees 14,287 13,092 13,744 20,081 15,385 14,350
Legal fees 6,028 3,026 -- 2,533 14,217 1,592
Portfolio accounting fees 52,748 38,893 95,102 56,815 49,689 73,027
Distribution services fee--Class B Shares 979 1,652 -- -- -- 1,822
Shareholder services fee--Class A Shares 112,041 101,106 146,700 36,749 82,304 163,749
Shareholder services fee--Class B Shares 326 551 -- -- -- 607
Share registration costs 30,006 39,345 30,131 33,732 35,701 51,136
Printing and postage 31,409 8,907 10,177 18,767 13,664 20,899
Insurance premiums 10,232 7,750 11,598 3,119 3,897 5,150
Miscellaneous 3,420 7,304 7,580 10,064 2,099 1,361
---------- ---------- ---------- ---------- --------- ----------
Total expenses 1,504,233 1,423,110 1,221,016 601,768 1,705,265 2,236,214
---------- ---------- ---------- ---------- --------- ----------
Waivers and reimbursement--
Waiver of investment advisory fee (107,888) (100,131) (88,233) (76,655) (1,057) (352,189)
Waiver of portfolio accounting fees -- -- -- -- (9,000) --
Waiver of shareholder services fee--Class A
Shares (112,041) (101,106) (146,700) (36,749) (82,304) (163,749)
Reimbursement of other operating expenses
by distributor -- -- -- -- -- --
---------- ---------- ---------- ---------- --------- ----------
Total waivers and reimbursement (219,929) (201,237) (234,933) (113,404) (92,361) (515,938)
---------- ---------- ---------- ---------- --------- ----------
Net expenses 1,284,304 1,221,873 986,083 488,364 1,612,904 1,720,276
---------- ---------- ---------- ---------- --------- ----------
Net investment income 2,201,687 2,254,916 4,454,110 278,972 714,746 6,828,442
---------- ---------- ---------- ---------- --------- ----------
Realized and Unrealized Gain (Loss) on
Investments:
Net realized gain (loss) on investments,
futures contracts and foreign currency
transactions 19,131,328 7,530,844 10,769,067 6,976,279 61,826 27,473,989
Net change in unrealized appreciation
(depreciation) of investments, futures
contracts and translation of
assets and liabilities in foreign currency 10,638,899 21,813,876 35,375,170 5,819,755 7,809,461 5,189,140
---------- ---------- ---------- ---------- --------- ----------
Net realized and unrealized gain (loss) on
investments, futures contracts and
foreign currency 29,770,227 29,344,720 46,144,237 12,796,034 7,871,287 32,663,129
---------- ---------- ---------- ---------- --------- ----------
Change in net assets resulting
from operations $31,971,914 $31,599,636 $50,598,347 $13,075,006 $8,586,033 $39,491,571
---------- ---------- ---------- ---------- --------- ----------
Foreign taxes withheld from dividends $ -- $ -- $ -- $ -- $ 160,131 $ --
---------- ---------- ---------- ---------- --------- ----------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
STATEMENTS OF OPERATIONS--CONTINUED
YEAR ENDED NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Biltmore Biltmore Biltmore
Biltmore Short-Term Biltmore North South
Fixed Fixed Georgia Carolina Carolina
Income Income Municipal Municipal Municipal
Fund Fund Bond Fund Bond Fund Bond Fund
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ -- $ -- $ -- $ -- $ --
Interest 11,923,280 7,292,778 595,433 1,422,721 5,622,747
----------- ---------- --------- ----------- -----------
Total income 11,923,280 7,292,778 595,433 1,422,721 5,622,747
----------- ---------- --------- ----------- -----------
Expenses:
Investment advisory fee 1,047,666 649,181 84,212 210,288 743,153
Administrative personnel and services fee 151,450 102,429 9,732 24,266 86,019
Custodian fees 34,922 23,607 2,246 5,608 19,817
Transfer and dividend disbursing agent fees and
expenses 62,457 43,552 46,484 52,230 84,492
Trustees' fees 9,273 6,906 2,651 3,200 3,562
Auditing fees 14,573 14,161 18,125 17,125 20,479
Legal fees 4,675 1,556 6,400 6,100 3,936
Portfolio accounting fees 69,080 53,282 55,422 54,570 58,629
Distribution services fee--Class B Shares 206 -- -- -- --
Shareholder services fee--Class A Shares 132,440 85,662 9,772 24,077 86,827
Shareholder services fee--Class B Shares 69 -- -- -- --
Share registration costs 40,639 26,605 14,355 18,546 24,246
Printing and postage 23,057 23,648 23,661 24,831 17,341
Insurance premiums 5,831 3,967 5,336 4,543 3,928
Miscellaneous 5,474 6,107 2,977 5,034 2,428
----------- ---------- --------- ----------- -----------
Total expenses 1,601,812 1,040,663 281,373 450,418 1,154,857
----------- ---------- --------- ----------- -----------
Waivers and reimbursement--
Waiver of investment advisory fee (177,507) (211,508) (78,762) (176,041) (500,413)
Waiver of portfolio accounting fees -- -- (35,649) (15,941) --
Waiver of shareholder services fee--Class A Shares (132,440) (85,662) (9,772) (24,077) (86,827)
Reimbursement of other operating expenses by
distributor -- -- (56,787) -- --
----------- ---------- --------- ----------- -----------
Total waivers and reimbursement (309,947) (297,170) (180,970) (216,059) (587,240)
----------- ---------- --------- ----------- -----------
Net expenses 1,291,865 743,493 100,403 234,359 567,617
----------- ---------- --------- ----------- -----------
Net investment income 10,631,415 6,549,285 495,030 1,188,362 5,055,130
----------- ---------- --------- ----------- -----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) on investments, futures
contracts and
foreign currency transactions 1,687,779 (495,516) 31,331 86,649 403,809
Net change in unrealized appreciation (depreciation)
of investments, futures contracts and translation
of assets and liabilities in foreign currency (2,913,248) (187,582) 79,327 607,688 (118,760)
----------- ---------- --------- ----------- -----------
Net realized and unrealized gain (loss) on
investments, futures contracts and foreign
currency (1,225,469) (683,098) 110,658 694,337 285,049
----------- ---------- --------- ----------- -----------
Change in net assets resulting
from operations $ 9,405,946 $5,866,187 $ 605,688 $ 1,882,699 $ 5,340,179
----------- ---------- --------- ----------- -----------
Foreign taxes withheld from dividends $ -- $ -- $ -- $ -- $ --
----------- ---------- --------- ----------- -----------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Biltmore Biltmore Biltmore
Equity Fund Quantitative Equity Fund Equity Index Fund
------------------------- ------------------------- -------------------------
Year Year Year
Year Ended Year Ended Year Ended
Ended November Ended November Ended November
November 30, 30, November 30, 30, November 30, 30,
1996 1995 1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations--
Net investment income $ 2,201,687 $ 2,140,798 $ 2,254,916 $ 2,012,428 $ 4,454,110 $ 4,344,464
Net realized gain (loss) on
investments, futures contracts and
foreign currency transactions 19,131,328 7,169,919 7,530,844 4,403,602 10,769,067 9,977,764
Net change in unrealized
appreciation (depreciation) of
investments, futures contracts and
translation of assets and
liabilities in foreign currency 10,638,899 17,600,644 21,813,876 28,219,890 35,375,170 42,222,143
------------ ----------- ------------ ----------- ------------ -----------
Change in net assets resulting
from operations 31,971,914 26,911,361 31,599,636 34,635,920 50,598,347 56,544,371
------------ ----------- ------------ ----------- ------------ -----------
Distributions to Shareholders--
Distributions from net investment
income
Class A Shares (2,069,120) (2,269,960) (1,630,989) (2,031,574) (3,509,012) (4,345,032)
Class B Shares (554) -- (1,415) -- -- --
Class Y Shares (317,016) -- (496,978) -- (993,850) --
Distributions from net realized gain
on investments, futures contracts
and foreign currency--
Class A Shares (7,457,396) (1,933,454) (2,223,749) -- (10,955,920) (598,243)
------------ ----------- ------------ ----------- ------------ -----------
Change in net assets from
distributions to shareholders (9,844,086) (4,203,414) (4,353,131) (2,031,574) (15,458,782) (4,943,275)
------------ ----------- ------------ ----------- ------------ -----------
Share Transactions--
Proceeds from sale of shares 189,693,742 48,585,296 174,821,403 20,816,453 262,739,184 42,901,737
Net asset value of shares issued to
shareholders in payment of
distributions declared 8,245,418 3,740,311 4,130,882 1,962,206 15,191,415 4,807,483
Cost of shares redeemed (199,262,124) (31,905,163) (158,365,608) (25,467,417) (267,923,924) (96,320,658)
------------ ----------- ------------ ----------- ------------ -----------
Change in net assets from share
transactions (1,322,964) 20,420,444 20,586,677 (2,688,758) 10,006,675 (48,611,438)
------------ ----------- ------------ ----------- ------------ -----------
Change in net assets 20,804,864 43,128,391 47,833,182 29,915,588 45,146,240 2,989,658
Net Assets:
Beginning of period 130,150,164 87,021,773 121,894,513 91,978,925 186,841,404 183,851,746
------------ ----------- ------------ ----------- ------------ -----------
End of period $150,955,028 $130,150,164 $169,727,695 $121,894,513 $231,987,644 $186,841,404
------------ ----------- ------------ ----------- ------------ -----------
Undistributed net investment income
included in net assets at end of
period $ -- $ 185,003 $ 366,230 $ 244,905 $ 734,120 $ 782,872
------------ ----------- ------------ ----------- ------------ -----------
Net gain (loss) as computed for
federal tax purposes $ 19,406,213 $ 7,456,796 $ 8,371,356 $ 2,223,995 $ 13,299,459 $10,975,465
------------ ----------- ------------ ----------- ------------ -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS--CONTINUED
<TABLE>
<CAPTION>
Biltmore Biltmore Biltmore
Special Values Fund Emerging Markets Fund Balanced Fund
------------------------ ------------------------- -------------------------
Year Year Period Year
Ended Ended Year Ended Year Ended
November November Ended November Ended November
30, 30, November 30, 30, November 30, 30,
1996 1995 1996 1995(a) 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations--
Net investment income $ 278,972 $ 160,858 $ 714,746 $ 315,925 $ 6,828,442 $ 7,116,975
Net realized gain (loss) on
investments, futures contracts
and foreign currency
transactions 6,976,279 1,812,363 61,826 (366,282) 27,473,989 5,333,434
Net change in unrealized
appreciation (depreciation) of
investments, futures contracts
and translation of assets and
liabilities in foreign currency 5,819,755 2,534,358 7,809,461 (2,970,114) 5,189,140 34,366,856
----------- ----------- ------------ ----------- ------------ -----------
Change in net assets resulting
from operations 13,075,006 4,507,579 8,586,033 (3,020,471) 39,491,571 46,817,265
----------- ----------- ------------ ----------- ------------ -----------
Distributions to Shareholders--
Distributions from net investment
income
Class A Shares (159,350) (28,748) (220,244) -- (5,630,367) (6,933,437)
Class B Shares -- -- -- -- (2,544) --
Class Y Shares -- -- -- -- (1,430,793) --
Distributions from net realized
gain on investments, futures
contracts and foreign
currency--Class A Shares (1,814,204) (107,629) -- -- (5,927,062) (3,058,366)
----------- ----------- ------------ ----------- ------------ -----------
Change in net assets from
distributions to shareholders (1,973,554) (136,377) (220,244) -- (12,990,766) (9,991,803)
----------- ----------- ------------ ----------- ------------ -----------
Share Transactions--
Proceeds from sale of shares 84,294,300 7,295,013 170,757,238 77,297,434 287,699,284 57,249,693
Net asset value of shares issued
to shareholders in payment of
distributions declared 1,868,520 128,327 99,884 -- 12,337,554 9,726,091
Cost of shares redeemed (56,018,664) (5,132,362) (121,975,580) (3,001,080) (277,726,827) (90,810,110)
----------- ----------- ------------ ----------- ------------ -----------
Change in net assets from share
transactions 30,144,156 2,290,978 48,881,542 74,296,354 22,310,011 (23,834,326)
----------- ----------- ------------ ----------- ------------ -----------
Change in net assets 41,245,608 6,662,180 57,247,331 71,275,883 48,810,816 12,991,136
Net Assets:
Beginning of period 24,093,074 17,430,894 71,275,883 -- 207,421,495 194,430,359
----------- ----------- ------------ ----------- ------------ -----------
End of period 6$5,338,682 2$4,093,074 $128,523,214 7$1,275,883 $256,232,311 $207,421,495
----------- ----------- ------------ ----------- ------------ -----------
Undistributed net investment income
included in net assets at end of
period $ 267,242 $ 147,620 $ 1,179,511 $ 329,370 $ 1,028,420 $ 1,263,682
----------- ----------- ------------ ----------- ------------ -----------
Net gain (loss) as computed for
federal tax purposes $6,991,741 $1,814,219 $ 269,156 ($224,021) $ 28,082,553 $ 5,923,208
----------- ----------- ------------ ----------- ------------ -----------
</TABLE>
(a) For the period from December 26, 1994 (date of initial public investment) to
November 30, 1995.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS--CONTINUED
<TABLE>
<CAPTION>
Biltmore Biltmore
Biltmore Short-Term Fixed Income Georgia Municipal Bond
Fixed Income Fund Fund Fund
------------------------- ------------------------- ------------------------
Year Year Year Period
Year Ended Year Ended Ended Ended
Ended November Ended November November November
November 30, 30, November 30, 30, 30, 30,
1996 1995 1996 1995 1996 1995(a)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations--
Net investment income $ 10,631,415 $ 9,690,827 $ 6,549,285 $ 8,143,124 $ 495,030 $ 284,171
Net realized gain (loss) on
investments, futures contracts and
foreign currency transactions 1,687,779 (1,093,245) (495,516) (177,221) 31,331 11,663
Net change in unrealized appreciation
(depreciation) of investments,
futures contracts and translation
of assets and liabilities in
foreign currency (2,913,248) 16,676,119 (187,582) 3,977,024 79,327 472,055
------------ ----------- ------------ ----------- ----------- -----------
Change in net assets resulting from
operations 9,405,946 25,273,701 5,866,187 11,942,927 605,688 767,889
------------ ----------- ------------ ----------- ----------- -----------
Distributions to Shareholders--
Distributions from net investment
income
Class A Shares (8,570,109) (9,563,573) (5,949,042) (7,332,212) (484,412) (284,171)
Class B Shares (1,660) -- -- -- -- --
Class Y Shares (2,030,423) -- (1,398,673) -- (10,618) --
Distributions from net realized gain
on investments, futures contracts
and foreign currency--Class A
Shares -- -- -- -- (11,785) --
------------ ----------- ------------ ----------- ----------- -----------
Change in net assets from
distributions to shareholders (10,602,192) (9,563,573) (7,347,715) (7,332,212) (506,815) (284,171)
------------ ----------- ------------ ----------- ----------- -----------
Share Transactions--
Proceeds from sale of shares 247,240,013 42,117,498 137,936,967 21,380,205 12,804,228 11,484,622
Net asset value of shares issued to
shareholders in payment of
distributions declared 8,147,703 8,445,158 7,199,936 7,263,688 298,680 204,162
Cost of shares redeemed (243,235,068) (45,177,829) (150,562,107) (56,861,374) (9,088,233) (1,952,528)
------------ ----------- ------------ ----------- ----------- -----------
Change in net assets from share
transactions 12,152,648 5,384,827 (5,425,204) (28,217,481) 4,014,675 9,736,256
------------ ----------- ------------ ----------- ----------- -----------
Change in net assets 10,956,402 21,094,955 (6,906,732) (23,606,766) 4,113,548 10,219,974
Net Assets:
Beginning of period 169,845,611 148,750,656 124,719,640 148,326,406 10,219,974 --
------------ ----------- ------------ ----------- ----------- -----------
End of period $180,802,013 $169,845,611 $117,812,908 $124,719,640 1$4,333,522 1$0,219,974
------------ ----------- ------------ ----------- ----------- -----------
Undistributed net investment income
included in net assets at end of
period $ 328,517 $ 299,294 $ 150,693 $ 949,123 $ -- $ --
------------ ----------- ------------ ----------- ----------- -----------
Net gain (loss) as computed for federal
tax purposes $ 1,803,528 $(1,257,247) $ (467,185) $ (241,281) $ 31,331 $ 11,663
------------ ----------- ------------ ----------- ----------- -----------
</TABLE>
(a) For the period from December 26, 1994 (date of initial public investment) to
November 30, 1995.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS--CONTINUED
<TABLE>
<CAPTION>
Biltmore Biltmore
North Carolina Municipal South Carolina Municipal
Bond Fund Bond Fund
----------------------------- -----------------------------
Year Period Year Year
Ended Ended Ended Ended
November 30, November 30, November 30, November 30,
1996 1995(a) 1996 1995
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations--
Net investment income $ 1,188,362 $ 456,874 $ 5,055,130 $ 4,465,237
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 86,649 91,379 403,809 300,614
Net change in unrealized appreciation (depreciation) of
investments, futures contracts and translation of
assets and liabilities in foreign currency 607,688 786,414 (118,760) 8,307,203
------------ ----------- ------------ ------------
Change in net assets resulting from operations 1,882,699 1,334,667 5,340,179 13,073,054
------------ ----------- ------------ ------------
Distributions to Shareholders--
Distributions from net investment income
Class A Shares (1,149,617) (456,874) (4,983,121) (4,465,237)
Class B Shares -- -- -- --
Class Y Shares (38,745) -- (72,009) --
Distributions from net realized gain on investments,
futures contracts and foreign currency--Class A Shares (91,423) -- (300,151) (737,507)
------------ ----------- ------------ ------------
Change in net assets from distributions to shareholders (1,279,785) (456,874) (5,355,281) (5,202,744)
------------ ----------- ------------ ------------
Share Transactions--
Proceeds from sale of sh ares 51,438,806 17,945,744 58,383,436 18,511,981
Net asset value of shares issued to shareholders in
payment of distributions declared 580,018 294,995 2,158,700 2,122,444
Cost of shares redeemed (29,265,298) (439,748) (51,760,595) (10,775,249)
------------ ----------- ------------ ------------
Change in net assets from share transactions 22,753,526 17,800,991 8,781,541 9,859,176
------------ ----------- ------------ ------------
Change in net assets 23,356,440 18,678,784 8,766,439 17,729,486
Net Assets:
Beginning of period 18,678,784 -- 93,724,847 75,995,361
------------ ----------- ------------ ------------
End of period $ 42,035,224 $18,678,784 $102,491,286 $ 93,724,847
------------ ----------- ------------ ------------
Undistributed net investment income included in net assets
at end of period $ -- $ -- $ -- $ --
------------ ----------- ------------ ------------
Net gain (loss) as computed for federal tax purposes $ 86,649 $ 91,379 $ 403,809 $ 300,614
------------ ----------- ------------ ------------
</TABLE>
(a) For the period from December 26, 1994 (date of initial public investment) to
November 30, 1995.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS A SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Net Realized and Distributions from
Unrealized Gain/ Net Realized Gain
Net (Loss) on on Investments,
Period Net Asset Investment Investments, Distributions Futures
Ended Value, Income/ Futures Total from from Net Contracts and
November beginning (Operating Contracts, and Investment Investment Foreign Currency Total
30, of period Loss) Foreign Currency Operations Income Transactions Distributions
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BILTMORE EQUITY FUND
1993(a) $10.00 0.12 0.25 0.37 (0.09) -- (0.09)
1994 $10.28 0.20 0.12 0.32 (0.20) (0.08) (0.28)
1995 $10.32 0.23 2.64 2.87 (0.25) (0.23) (0.48)
1996 $12.71 0.22(i) 2.83 3.05 (0.22) (0.73) (0.95)
BILTMORE QUANTITATIVE EQUITY FUND
1994(b) $10.00 0.12 (0.43) (0.31) (0.09) -- (0.09)
1995 $ 9.60 0.22 3.51 3.73 (0.22) -- (0.22)
1996 $13.11 0.24(i) 2.77 3.01 (0.21) (0.24) (0.45)
BILTMORE EQUITY INDEX FUND
1993(a) $10.00 0.15 0.43 0.58 (0.11) -- (0.11)
1994 $10.47 0.25 (0.19) 0.06 (0.24) (0.02) (0.26)
1995 $10.27 0.28 3.37 3.65 (0.27) (0.03) (0.30)
1996 $13.62 0.32(i) 3.13 3.45 (0.31) (0.78) (1.09)
BILTMORE SPECIAL VALUES FUND
1993(a) $10.00 (0.002) 0.242 0.24 -- -- --
1994 $10.24 0.06 (0.22) (0.16) (0.05) (0.28) (0.33)
1995 $ 9.75 0.09 2.42 2.51 (0.02) (0.06) (0.08)
1996 $12.18 0.35 4.13 4.48 (0.08) (0.91) (0.99)
BILTMORE EMERGING MARKETS FUND
1995(c) $10.00 0.05 0.36 0.41 -- -- --
1996 $10.41 0.09(i) 1.20 1.29 (0.03) -- (0.03)
BILTMORE BALANCED FUND
1993(a) $10.00 0.19 0.29 0.48 (0.15) -- (0.15)
1994 $10.33 0.35 (0.38) (0.03) (0.33) (0.04) (0.37)
1995 $ 9.93 0.40 2.13 2.53 (0.38) (0.16) (0.54)
1996 $11.92 0.38(i) 1.72 2.10 (0.38) (0.34) (0.72)
BILTMORE FIXED INCOME FUND
1993(a) $10.00 0.31 (0.01) 0.30 (0.30) -- (0.30)
1994 $10.00 0.56 (0.98) (0.42) (0.55) (0.06) (0.61)
1995 $ 8.97 0.58 0.92 1.50 (0.57) -- (0.57)
1996 $ 9.90 0.61(i) (0.09) 0.52 (0.59) -- (0.59)
BILTMORE SHORT-TERM FIXED INCOME FUND
1993(a) $10.00 0.27 (0.10) 0.17 (0.26) -- (0.26)
1994 $ 9.91 0.45 (0.33) 0.12 (0.45) -- (0.45)
1995 $ 9.58 0.59 0.24 0.83 (0.52) -- (0.52)
1996 $ 9.89 0.56(i) (0.06) 0.50 (0.60) -- (0.60)
BILTMORE GEORGIA MUNICIPAL BOND FUND
1995(c) $10.00 0.41 0.96 1.37 (0.41) -- (0.41)
1996 $10.96 0.47 0.05 0.52 (0.47) (0.01) (0.48)
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND
1995(c) $10.00 0.43 0.99 1.42 (0.43) -- (0.43)
1996 $10.99 0.45 0.09 0.54 (0.45) (0.05) (0.50)
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND (D)
9/30/91(e) $10.00 0.43 0.17 0.60 (0.43) -- (0.43)
9/30/92 $10.17 0.60 0.36 0.96 (0.60) -- (0.60)
9/30/93 $10.53 0.59 0.74 1.33 (0.59) -- (0.59)
11/30/93(f) $11.27 0.10 (0.15) (0.05) (0.10) -- (0.10)
11/30/94 $11.12 0.56 (1.04) (0.48) (0.56) (0.03) (0.59)
11/30/95 $10.05 0.56 1.10 1.66 (0.56) (0.10) (0.66)
11/30/96 $11.05 0.55 0.03 0.58 (0.55) (0.03) (0.58)
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 10, 1993 (date of initial
public investment) to November 30, 1993.
(b) Reflects operations for the period from March 28, 1994 (date of initial
public investment) to November 30, 1994.
(c) Reflects operations for the period from December 26, 1994 (date of initial
public investment) to November 30, 1995.
(d) Prior to November 30, 1993 the Fund's year end was September 30.
(e) Reflects operations for the period from January 11, 1991 (date of initial
public investment) to September 30, 1991.
(f) Reflects operations for the two months ended November 30, 1993.
(g) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(h) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(i) Per share information is based on average shares outstanding.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS A SHARES--CONTINUED
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Period Ratios to Average Net Assets Net Assets,
Ended Net Asset Net end of Average Portfolio
November Value, end Total Investment Expense Waiver/ period (000 Commission Turnover
30, of period Return(g) Expenses Income Reimbursement(h) omitted) Rate Paid Rate
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BILTMORE EQUITY FUND
1993(a) $10.28 3.68% 0.81%* 2.18%* 0.32%* $ 61,997 -- 50%
1994 $10.32 3.10% 0.87% 1.98% 0.16% $ 87,022 -- 35%
1995 $12.71 28.74% 0.90% 1.99% 0.07% $130,150 -- 65%
1996 $14.81 25.56% 0.90% 1.62% 0.15% $ 20,774 $0.0652 64%
BILTMORE QUANTITATIVE EQUITY FUND
1994(b) $ 9.60 (3.08%) 0.90%* 1.83%* 0.10%* $ 91,979 -- 64%
1995 $13.11 39.33% 0.87% 1.93% 0.10% $121,895 -- 63%
1996 $15.67 23.74% 0.87% 1.70% 0.15% $ 15,742 $0.0532 44%
BILTMORE EQUITY INDEX FUND
1993(a) $10.47 5.80% 0.43%* 2.54%* 0.12%* $149,266 -- 9%
1994 $10.27 0.56% 0.46% 2.44% 0.08% $183,852 -- 9%
1995 $13.62 36.15% 0.48% 2.39% 0.05% $186,841 -- 60%
1996 $15.98 27.19% 0.48% 2.23% 0.13% $ 18,154 $0.0137 12%
BILTMORE SPECIAL VALUES FUND
1993(a) $10.24 2.40% 1.25%* (0.03%)* 1.79%* $ 12,072 -- 68%
1994 $ 9.75 (1.61%) 1.13% 0.63% 1.09% $ 17,431 -- 62%
1995 $12.18 25.91% 1.29% 0.80% 0.58% $ 24,093 -- 57%
1996 $15.67 39.78% 1.21% 0.47% 0.29% $ 6,642 $0.0650 38%
BILTMORE EMERGING MARKETS FUND
1995(c) $10.41 4.10% 1.80%* 0.85%* 0.28%* $ 71,276 -- 17%
1996 $11.67 12.45% 1.69% 0.73% 0.09% $ 5,488 $0.0009 30%
BILTMORE BALANCED FUND
1993(a) $10.33 4.89% 0.75%* 3.30%* 0.19%* $166,271 -- 60%
1994 $ 9.93 (0.39%) 0.75% 3.46% 0.17% $194,430 -- 74%
1995 $11.92 26.32% 0.76% 3.58% 0.16% $207,421 -- 102%
1996 $13.30 18.55% 0.76% 3.05% 0.24% $ 18,619 $0.0545 99%
BILTMORE FIXED INCOME FUND
1993(a) $10.00 3.02% 0.68%* 5.44%* 0.19%* $140,325 -- 149%
1994 $ 8.97 (4.30%) 0.71% 5.90% 0.13% $148,751 -- 148%
1995 $ 9.90 17.20% 0.74% 6.07% 0.10% $169,846 -- 155%
1996 $ 9.83 5.51% 0.74% 6.05% 0.18% $ 4,853 -- 181%
BILTMORE SHORT-TERM FIXED INCOME FUND
1993(a) $ 9.91 1.69% 0.58%* 4.78%* 0.22%* $154,459 -- 73%
1994 $ 9.58 1.27% 0.60% 4.62% 0.18% $148,326 -- 151%
1995 $ 9.89 8.82% 0.63% 5.83% 0.16% $124,720 -- 147%
1996 $ 9.79 5.29% 0.63% 5.50% 0.27% $ 1,675 -- 145%
BILTMORE GEORGIA MUNICIPAL BOND FUND
1995(c) $10.96 13.93% 0.92%* 4.30%* 1.88%* $ 10,220 -- 14%
1996 $11.00 4.97% 0.89% 4.40% 1.61% $ 7,531 -- 14%
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND
1995(c) $10.99 14.40% 0.85%* 4.40%* 1.19%* $ 18,679 -- 19%
1996 $11.03 5.17% 0.84% 4.24% 0.77% $ 13,752 -- 7%
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND (D)
9/30/91(e) $10.17 6.32% 0.82%* 5.73%* 0.86%* $ 21,438 -- 0%
9/30/92 $10.53 9.73% 0.61% 5.83% 0.73% $ 63,139 -- 0%
9/30/93 $11.27 13.03% 0.55% 5.46% 0.62% $ 82,674 -- 4%
11/30/93(f) $11.12 (0.48%) 0.55%* 5.11%* 0.60%* $ 83,371 -- 2%
11/30/94 $10.05 (4.52%) 0.60% 5.22% 0.59% $ 75,995 -- 23%
11/30/95 $11.05 16.97% 0.58% 5.23% 0.55% $ 93,725 -- 15%
11/30/96 $11.05 5.54% 0.57% 5.10% 0.59% $ 65,981 -- 20%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 10, 1993 (date of initial
public investment) to November 30, 1993.
(b) Reflects operations for the period from March 28, 1994 (date of initial
public investment) to November 30, 1994.
(c) Reflects operations for the period from December 26, 1994 (date of initial
public investment) to November 30, 1995.
(d) Prior to November 30, 1993 the Fund's year end was September 30.
(e) Reflects operations for the period from January 11, 1991 (date of initial
public investment) to September 30, 1991.
(f) Reflects operations for the two months ended November 30, 1993.
(g) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(h) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(i) Per share information is based on average shares outstanding.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS B SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Net Realized and
Unrealized Gain/
Net Asset (Loss) on Distributions
Value, Net Investments Total From from Net
Period Ended beginning Investment and Futures Investment Investment Net Asset Value, Total
November 30, of period Income Contracts Operations Income end of period Return(b)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BILTMORE EQUITY FUND
1996(a) $12.43 0.02 2.37 2.39 (0.03) $14.79 19.25%
BILTMORE QUANTITATIVE EQUITY FUND
1996(a) $13.09 0.04 2.56 2.60 (0.04) $15.65 19.90%
BILTMORE BALANCED FUND
1996(a) $11.68 0.09 1.59 1.68 (0.07) $13.29 14.47%
BILTMORE FIXED INCOME FUND
1996(a) $ 9.45 0.15 0.40 0.55 (0.17) $ 9.83 5.83%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) 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 BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS B SHARES--CONTINUED
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Period Ratios to Average Net Assets
Ended Net Expense Net Assets, Average Portfolio
November Investment Waiver/ end of period Commission Turnover
30, Expenses Income Reimbursement(c) (000 omitted) Rate Paid Rate
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BILTMORE EQUITY FUND
1996(a) 1.90%* 0.02%* 0.20%* $ 976 $0.0652 64%
BILTMORE QUANTITATIVE EQUITY FUND
1996(a) 1.87%* 0.46%* 0.11%* $1,414 $0.0532 44%
BILTMORE BALANCED FUND
1996(a) 1.76%* 1.93%* 0.16%* $1,821 $0.0545 99%
BILTMORE FIXED INCOME FUND
1996(a) 1.74%* 5.20%* 0.13%* $ 113 -- 181%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) 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 BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS Y SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Net Realized and
Unrealized Gain/
(Loss) on
Investments,
Net Asset Futures Distributions
Value, Net Contracts, and Total From from Net
Period Ended beginning Investment Foreign Currency Investment Investment Net Asset Value, Total
November 30, of period Income Transactions Operations Income end of period Return(b)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BILTMORE EQUITY FUND
1996(a) $12.43 0.03 2.40 2.43 (0.05) $14.81 19.57%
BILTMORE QUANTITATIVE EQUITY FUND
1996(a) $13.09 0.04 2.60 2.64 (0.06) $15.67 20.19%
BILTMORE EQUITY INDEX FUND
1996(a) $13.37 0.09(d) 2.60 2.69 (0.08) $15.98 20.14%
BILTMORE SPECIAL VALUES FUND
1996(a) $13.62 0.03 2.02 2.05 -- $15.67 15.05%
BILTMORE EMERGING MARKETS FUND
1996(a) $11.92 0.01(d) (0.26) (0.25) -- $11.67 (2.10%)
BILTMORE BALANCED FUND
1996(a) $11.68 0.08 1.63 1.71 (0.09) $13.30 14.69%
BILTMORE FIXED INCOME FUND
1996(a) $ 9.45 0.17 0.40 0.57 (0.19) $ 9.83 6.12%
BILTMORE SHORT-TERM FIXED INCOME FUND
1996(a) $ 9.67 0.11(d) 0.18 0.29 (0.17) $ 9.79 3.00%
BILTMORE GEORGIA MUNICIPAL BOND FUND
1996(a) $10.71 0.17 0.29 0.46 (0.17) $11.00 4.31%
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND
1996(a) $10.71 0.16 0.32 0.48 (0.16) $11.03 4.55%
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND
1996(a) $10.73 0.20 0.32 0.52 (0.20) $11.05 4.86%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Per share information is based on average shares outstanding.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS AND THE BILTMORE MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS Y SHARES--CONTINUED
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Period Ratios to Average Net Assets Net Assets,
Ended Net end of Average Portfolio
November Investment Expense Waiver/ period (000 Commission Turnover
30, Expenses Income Reimbursement(c) omitted) Rate Paid Rate
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BILTMORE EQUITY FUND
1996(a) 0.90%* 0.91%* 0.19%* $129,205 $0.0652 64%
BILTMORE QUANTITATIVE EQUITY FUND
1996(a) 0.87%* 1.19%* 0.11%* $152,571 $0.0532 44%
BILTMORE EQUITY INDEX FUND
1996(a) 0.48%* 1.92%* 0.06%* $213,833 $0.0137 12%
BILTMORE SPECIAL VALUES FUND
1996(a) 1.15%* 1.76%* 0.24%* $ 58,697 $0.0650 38%
BILTMORE EMERGING MARKETS FUND
1996(a) 0.63%* 0.45%* 0.13%* $123,036 $0.0009 30%
BILTMORE BALANCED FUND
1996(a) 0.76%* 2.85%* 0.16%* $235,791 $0.0545 99%
BILTMORE FIXED INCOME FUND
1996(a) 0.75%* 6.33%* 0.14%* $175,836 -- 181%
BILTMORE SHORT-TERM FIXED INCOME FUND
1996(a) 0.64%* 5.77%* 0.19%* $116,138 -- 145%
BILTMORE GEORGIA MUNICIPAL BOND FUND
1996(a) 0.89%* 4.84%* 1.57%* $ 6,803 -- 14%
BILTMORE NORTH CAROLINA MUNICIPAL BOND FUND
1996(a) 0.84%* 4.16%* 0.65%* $ 28,283 -- 7%
BILTMORE SOUTH CAROLINA MUNICIPAL BOND FUND
1996(a) 0.57%* 5.56%* 0.54%* $ 36,511 -- 20%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS
THE BILTMORE MUNICIPAL FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996
(1) ORGANIZATION
The Biltmore Funds and The Biltmore Municipal Funds (individually referred to as
the "Trust" or collectively as the "Trusts") are registered under the Investment
Company Act of 1940, as amended (the "Act") as open-end management investment
companies. The Trusts consist of fifteen portfolios. The financial statements of
the following portfolios (individually referred to as the "Fund", or
collectively as the "Funds") are presented herein:
THE BILTMORE FUNDS*
<TABLE>
<CAPTION>
Portfolio Name Investment Objective
<S> <C>
Biltmore Equity Fund ("Equity Fund") To produce growth of principal and income.
Biltmore Quantitative Equity Fund ("Quantita-
tive Equity Fund") To provide growth of principal and income.
Biltmore Equity Index Fund ("Equity Index Fund") To provide a total return that approximates that of the stock
market as measured by the S&P 500 Index.
Biltmore Special Values Fund ("Special Values
Fund") To produce growth of principal.
Biltmore Emerging Markets Fund ("Emerging
Markets Fund") To produce long-term capital appreciation.
Biltmore Balanced Fund ("Balanced Fund") To provide long-term growth of principal and current income.
Biltmore Fixed Income Fund ("Fixed Income Fund") To seek a high level of total return.
Biltmore Short-Term Fixed Income Fund To produce a high level of current income with a minimum of
("Short-Term Fixed Income Fund") principal volatility.
</TABLE>
THE BILTMORE MUNICIPAL FUNDS
<TABLE>
<CAPTION>
Portfolio Name Investment Objective
<S> <C>
Biltmore Georgia Municipal Bond Fund ("Georgia To provide current income which is exempt from federal regular
Municipal Bond Fund")** income tax and the personal income taxes imposed by the State
of Georgia.
Biltmore North Carolina Municipal Bond Fund To provide current income which is exempt from federal regular
("North Carolina Municipal Bond Fund")** income tax and the personal income taxes imposed by the State
of North Carolina.
Biltmore South Carolina Municipal Bond Fund To provide current income which is exempt from federal regular
("South Carolina Municipal Bond Fund")** income tax and South Carolina state income taxes.
</TABLE>
* In addition, The Biltmore Funds offers the following money market portfolios,
each having distinctive investment objectives and policies: Biltmore Money
Market Fund, Biltmore Prime Cash Management Fund, Biltmore Tax-Free Money
Market Fund, and Biltmore U.S. Treasury Money Market Fund. The financial
statements of the money market portfolios are presented separately.
** Non-diversified portfolio.
Effective July 22, 1996, the Funds designated the existing share class as Class
A Shares.
Also on July 22, 1996, the Funds added Class Y Shares. In addition, on July 22,
1996, Equity Fund, Quantitative Equity Fund, Balanced Fund and Fixed Income Fund
added Class B Shares.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS
THE BILTMORE MUNICIPAL FUNDS
The assets of each portfolio are segregated and a shareholder's interest is
limited to the portfolio in which shares are held.
(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.
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, unlisted
securities and private placement securities are generally valued at the
latest bid prices as furnished by an independent pricing service. Listed
equity securities and investments in closed-end investment companies are
valued at the last sale price reported on a national securities exchange.
Short-term securities are valued at the prices provided by an independent
pricing service. However, short-term securities with remaining maturities
of sixty days or less at the time of purchase may be valued at amortized
cost, which approximates fair market value. Investments in other open-end
regulated investment companies are valued at net asset value. With respect
to valuation of foreign securities, trading in foreign cities may be
completed at times which vary from the closing of the New York Stock
Exchange. Therefore, foreign securities are valued at the latest closing
price on the exchange on which they are traded prior to the closing of the
New York Stock Exchange. Foreign securities quoted in foreign currencies
are translated into US dollars at the foreign exchange rate in effect at
noon, eastern time, on the day the value of the foreign security is
determined.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require the
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 the guidelines and/or
standards reviewed or established by the Boards 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--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"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
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.
Withholding taxes on foreign interest and dividends have been provided for
in accordance with the Emerging Markets Fund's understanding of the
applicable country's tax rules and rates.
At November 30, 1996, the Funds listed below, for federal tax purposes, had
capital loss carryforwards, as noted, which will reduce each 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>
Amount Amount Amount Amount
Total Capital Loss Expiring Expiring Expiring Expiring
Fund Carryforward In 2001 In 2002 In 2003 In 2004
<S> <C> <C> <C> <C> <C>
Fixed Income Fund $3,203,415 -- $1,946,168 $1,257,247 --
Short-Term Fixed Income Fund $4,001,614 $493,199 $2,790,650 $ 250,580 $467,185
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS
THE BILTMORE MUNICIPAL FUNDS
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 their shares, have been deferred and are being
amortized over a period not to exceed five years from each Fund's
commencement date.
FUTURES CONTRACTS--The Funds listed below purchase stock index futures
contracts to manage cashflows, enhance yield, and to potentially reduce
transaction costs. Upon entering into a stock index futures contract with a
broker, the Funds listed below are required to deposit in a segregated
account a specified amount of cash or U.S. government securities. Futures
contracts are valued daily and unrealized gains or losses are recorded in a
"variation margin" account. Daily, the Funds receive from or pay to the
broker a specified amount of cash based upon changes in the variation
margin account. When a contract is closed, the Funds recognize a realized
gain or loss.
For the year ended November 30, 1996, the following Funds had realized
gains on futures contracts as follows:
<TABLE>
<CAPTION>
Realized Gain on
Fund Futures Contracts
<S> <C>
Equity Fund $ 917,268
Quantitative Equity Fund 861,388
Equity Index Fund 1,733,276
Balanced Fund 894,892
</TABLE>
Futures contracts have market risks, including the risk that the change in
the value of the contract may not correlate with changes in the value of
the underlying securities.
At November 30, 1996, the Funds had outstanding futures contracts as set
forth below:
EQUITY FUND
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
<C> <S> <C> <C>
December 1996 22 S&P 500 Index Futures Long $ 499,405
</TABLE>
QUANTITATIVE EQUITY FUND
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
<C> <S> <C> <C>
December 1996 23 S&P 500 Index Futures Long $1,006,892
</TABLE>
EQUITY INDEX FUND
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
<C> <S> <C> <C>
December 1996 74 S&P 500 Index Futures Long $3,324,860
</TABLE>
BALANCED FUND
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
<C> <S> <C> <C>
December 1996 33 S&P 500 Index Futures Long $1,279,905
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS
THE BILTMORE MUNICIPAL FUNDS
FOREIGN EXCHANGE CONTRACTS--Emerging Markets Fund may enter into foreign
currency exchange contracts as a way of managing foreign exchange rate
risk. The Fund may enter into these contracts for the purchase or sale of a
specific foreign currency at a fixed price on a future date as a hedge or
cross hedge against either specific transactions or portfolio positions.
The objective of the Fund's foreign currency hedging transactions is to
reduce the risk that the U.S. dollar value of the Fund's foreign currency
denominated securities will decline in value due to changes in foreign
currency exchange rates. All foreign currency exchange contracts are
"marked to market" daily at the applicable translation rates resulting in
unrealized gains or losses. Realized gains or losses are recorded at the
time the foreign currency exchange contract is offset by entering into a
closing transaction or by the delivery or receipt of the currency. Risk may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
At November 30, 1996, Emerging Markets Fund had no outstanding foreign
currency contracts.
FOREIGN CURRENCY TRANSLATION--The accounting records of Emerging Markets
Fund are maintained in U.S. dollars. All assets and liabilities denominated
in foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales
of FCs, currency gains or losses realized between the trade and settlement
dates on securities transactions, the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes
in the value of assets and liabilities other than investments in securities
at fiscal year end, resulting from changes in the exchange rate.
RECLASSIFICATION--In accordance with Statement of Position 93-2
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies
("SOP 93-2"), permanent book and tax differences have been reclassified to
paid-in-capital. These differences are primarily due to differing
treatments for foreign currency transactions and defaulted interest.
Amounts for the Emerging Market Fund and Quantitative Equity Fund, as of
November 30, 1996, have been reclassified to reflect the following:
<TABLE>
<CAPTION>
Increase (Decrease)
Accumulated Net Undistributed Net
Fund Paid In Capital Realized Gain/Loss Investment Income
<S> <C> <C> <C>
Emerging Markets ($644,110) $288,471 $355,639
Quantitative Equity -- $ 4,209 ($ 4,209)
</TABLE>
Net investment income, net realized gains/losses, and net assets were not
affected by this change.
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 of both The Biltmore Funds and The Biltmore Municipal
Funds permits the Trustees to issue an unlimited number of full and fractional
shares of beneficial interest (without par value).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS
THE BILTMORE MUNICIPAL FUNDS
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Equity Fund Quantitative Equity Fund
------------------------------------------------ -------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
November 30, 1996 November 30, 1995 November 30, 1996 November 30, 1995
CLASS A SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 3,573,564 $ 46,093,419 4,282,287 $ 48,585,296 2,247,495 $ 30,400,863 1,840,666 $ 20,816,453
Shares issued to
shareholders in
payment of
distributions
declared 648,674 7,928,297 351,282 3,740,311 280,873 3,632,489 180,286 1,962,206
Shares redeemed (13,058,201) (177,023,298) (2,825,368) (31,905,163) (10,818,173) (154,534,825) (2,308,489) (25,467,417)
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
Net change
resulting from
Class A Shares
transactions (8,835,963) ($123,001,582) 1,808,201 $ 20,420,444 (8,289,805) ($120,501,473) (287,537) ($2,688,758)
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended Year Ended
November 30, 1996** November 30, 1995 November 30, 1996 November 30, 1995
CLASS B SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 68,238 $ 938,331 -- -- 90,413 $ 1,298,561 -- --
Shares issued to
shareholders in
payment of
distributions
declared 38 519 -- -- 100 1,415 -- --
Shares redeemed (2,290) (31,569) -- -- (151) (2,206) -- --
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
Net change
resulting from
Class B Shares
transactions 65,986 $ 907,281 -- -- 90,362 $ 1,297,770 -- --
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended Year Ended
November 30, 1996** November 30, 1995 November 30, 1996** November 30, 1995
CLASS Y SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 10,334,286 $ 142,661,992 -- -- 9,959,050 $ 143,121,979 -- --
Shares issued to
shareholders in
payment of
distributions
declared 23,469 316,602 -- -- 35,172 496,978 -- --
Shares redeemed (1,632,543) (22,207,257) -- -- (256,357) (3,828,577) -- --
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
Net change
resulting from
Class Y Shares
transactions 8,725,212 $120,771,337 -- -- 9,737,865 $139,790,380 -- --
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
Net change
resulting from
fund shares
transactions (44,765) ($ 1,322,964) 1,808,201 $ 20,420,444 1,538,422 $ 20,586,677 (287,537) ($ 2,688,758)
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS
THE BILTMORE MUNICIPAL FUNDS
<TABLE>
<CAPTION>
Equity Index Fund Special Values Fund
------------------------------------------------ ---------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
November 30, 1996 November 30, 1995 November 30, 1996 November 30, 1995
CLASS A SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 4,245,012 $ 58,395,052 3,643,231 $ 42,901,737 2,051,670 $ 28,299,705 640,769 $ 7,295,013
Shares issued to
shareholders in
payment of
distributions
declared 1,080,710 14,197,673 423,558 4,807,483 163,047 1,868,520 13,395 128,327
Shares redeemed (17,907,828) (256,468,916) (8,252,788) (96,320,658) (3,768,276) (55,765,196) (464,783) (5,132,362)
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
Net change
resulting from
Class A Shares
transactions (12,582,106) ($183,876,191) (4,185,999) $(48,611,438) (1,553,559) ($ 25,596,971) 189,381 $ 2,290,978
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended Year Ended
November 30, 1996** November 30, 1995 November 30, 1996** November 30, 1995
CLASS Y SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 14,081,776 $ 204,344,132 -- -- 3,761,852 $ 55,994,595 -- --
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
Shares issued to
shareholders in
payment of
distributions
declared 69,106 993,742 -- -- -- -- -- --
Shares redeemed (772,944) (11,455,008) -- -- (17,001) (253,468) -- --
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
Net change
resulting from
Class Y Shares
transactions 13,377,938 $ 193,882,866 -- -- 3,744,851 $ 55,741,127 -- --
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
Net change
resulting from
fund shares
transactions 795,832 $ 10,006,675 (4,185,999) $(48,611,438) 2,191,292 $ 30,144,156 189,381 $ 2,290,978
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
Emerging Markets Fund Balanced Fund
------------------------------------------------ ---------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
November 30, 1996 November 30, 1995* November 30, 1996** November 30, 1995
CLASS A SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 3,906,620 $ 45,872,322 7,143,913 $ 77,297,434 4,734,155 $ 56,693,222 5,362,908 $ 57,249,693
Shares issued to
shareholders in
payment of
distributions
declared 9,503 99,884 -- -- 933,946 10,904,370 944,056 9,726,091
Shares redeemed (10,296,117) (121,538,320) (293,852) (3,001,080) (21,667,531) (267,918,591) (8,483,555) (90,810,110)
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
Net change
resulting from
Class A Shares
transactions (6,379,994) ($75,566,114) 6,850,061 $ 74,296,354 (15,999,430) ($200,320,999) (2,176,591) ($23,834,326)
----------- ------------- ---------- ------------ ----------- ------------- ---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS
THE BILTMORE MUNICIPAL FUNDS
<TABLE>
<CAPTION>
Emerging Markets Fund continued Balanced Fund continued
------------------------------------------------ ------------------------------------------------
Period Ended Year Ended Period Ended Year Ended
November 30, 1996 November 30, 1995 November 30, 1996** November 30, 1995
CLASS B SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold -- -- -- -- 138,824 $ 1,742,415 -- --
Shares issued to
shareholders in
payment of
distributions
declared -- -- -- -- 199 2,452 -- --
Shares redeemed -- -- -- -- (1,945) (24,476) -- --
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
Net change
resulting from
Class B Shares
transactions -- -- -- -- 137,078 $ 1,720,391 -- --
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
</TABLE>
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended Year Ended
November 30, 1996** November 30, 1995 November 30, 1996** November 30, 1995
CLASS Y SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 10,575,616 $124,884,916 -- -- 18,394,067 $229,263,647 -- --
Shares issued to
shareholders in
payment of
distributions
declared -- -- -- -- 116,320 1,430,732 -- --
Shares redeemed (37,203) (437,260) -- -- (777,484) (9,783,760) -- --
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
Net change
resulting from
Class Y Shares
transactions 10,538,413 $124,447,656 -- -- 17,732,903 $220,910,619 -- --
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
Net change
resulting from
fund shares
transactions 4,158,419 $ 48,881,542 6,850,061 $74,296,354 1,870,551 $ 22,310,011 (2,176,591) ($23,834,326)
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
</TABLE>
<TABLE>
<CAPTION>
Fixed Income Fund Short-Term Fixed Income Fund
------------------------------------------------ ------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
November 30, 1996 November 30, 1995 November 30, 1996 November 30, 1995
CLASS A SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 6,715,943 $ 64,981,743 4,450,994 $42,117,498 1,790,753 $ 17,444,566 2,200,207 $21,380,205
Shares issued to
shareholders in
payment of
distributions
declared 660,839 6,370,033 893,781 8,445,158 596,490 5,812,653 745,346 7,263,688
Shares redeemed (24,034,268) (231,527,214)(4,785,329) (45,177,829)(14,822,145) (144,192,757)(5,816,573) (56,861,374)
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
Net change
resulting from
Class A Shares
transactions (16,657,486)($160,175,438) 559,446 $ 5,384,827 (12,434,902)($120,935,538)(2,871,020)($28,217,481)
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS
THE BILTMORE MUNICIPAL FUNDS
<TABLE>
<CAPTION>
Fixed Income Fund continued Short-Term Fixed Income Fund continued
------------------------------------------------ ------------------------------------------------
Period Ended Year Ended Period Ended Year Ended
November 30, 1996** November 30, 1995 November 30, 1996 November 30, 1995
CLASS B SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 11,286 $ 108,503 -- -- -- -- -- --
Shares issued to
shareholders in
payment of
distributions
declared 173 1,660 -- -- -- -- -- --
Shares redeemed -- -- -- -- -- -- -- --
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
Net change
resulting from
Class B Shares
transactions 11,459 $ 110,163 -- -- -- -- -- --
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
</TABLE>
<TABLE>
<CAPTION>
Period Ended Year Ended Period Ended Year Ended
November 30, 1996** November 30, 1995 November 30, 1996** November 30, 1995
CLASS Y SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 18,920,202 $182,149,767 -- -- 12,375,109 $120,492,401 -- --
Shares issued to
shareholders in
payment of
distributions
declared 185,028 1,776,010 -- -- 142,721 1,387,283 -- --
Shares redeemed (1,212,034) (11,707,854) -- -- (653,343) (6,369,350) -- --
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
Net change
resulting from
Class Y Shares
transactions 17,893,196 $172,217,923 -- -- 11,864,487 $115,510,334 -- --
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
Net change
resulting from
fund shares
transactions 1,247,169 $ 12,152,648 559,446 $ 5,384,827 (570,415) ($ 5,425,204)(2,871,020)($28,217,481)
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
</TABLE>
<TABLE>
<CAPTION>
Georgia Municipal Bond Fund North Carolina Municipal Bond Fund
------------------------------------------------ ------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
November 30, 1996 November 30, 1995* November 30, 1996 November 30, 1995*
CLASS A SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 560,134 $ 6,056,816 1,096,122 $11,484,622 2,169,547 $ 23,350,755 1,712,554 $17,945,744
Shares issued to
shareholders in
payment of
distributions
declared 27,478 297,430 18,994 204,162 53,359 578,075 27,599 294,995
Shares redeemed (835,094) (9,088,233) (182,836) (1,952,528) (2,674,655) (29,234,426) (41,290) (439,748)
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
Net change
resulting from
Class A Shares
transactions (247,482) ($ 2,733,987) 932,280 $ 9,736,256 (451,749) ($ 5,305,596) 1,698,863 $17,800,991
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS
THE BILTMORE MUNICIPAL FUNDS
<TABLE>
<CAPTION>
Georgia Municipal Bond Fund continued North Carolina Municipal Bond Fund continued
------------------------------------------------ ------------------------------------------------
Period Ended Year Ended Period Ended Year Ended
November 30, 1996** November 30, 1995 November 30, 1996** November 30, 1995
CLASS Y SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 618,468 $ 6,747,412 -- -- 2,567,467 $ 28,088,051 -- --
Shares issued to
shareholders in
payment of
distributions
declared 113 1,250 -- -- 176 1,943 -- --
Shares redeemed -- -- -- -- (2,814) (30,872) -- --
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
Net change
resulting from
Class Y Shares
transactions 618,581 $ 6,748,662 -- -- 2,564,829 $ 28,059,122 -- --
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
Net change
resulting from
fund shares
transactions 371,099 $ 4,014,675 932,280 $ 9,736,256 2,113,080 $ 22,753,526 1,698,863 $17,800,991
---------- ------------ --------- ----------- ---------- ------------ --------- -----------
</TABLE>
<TABLE>
<CAPTION>
South Carolinia Muncipal Bond Fund
------------------------------------------------
Year Ended Year Ended
November 30, 1996 November 30, 1995
CLASS A SHARES Shares Dollars Shares Dollars
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,016,192 $ 21,951,155 1,737,284 $18,511,981
Shares issued to
shareholders in
payment of
distributions
declared 197,897 2,151,141 200,360 2,122,444
Shares redeemed (4,721,556) (51,567,032) (1,014,536) (10,775,249)
---------- ------------ --------- -----------
Net change
resulting from
Class A Shares
transactions (2,507,467) ($27,464,736) 923,108 $ 9,859,176
---------- ------------ --------- -----------
</TABLE>
<TABLE>
<CAPTION>
Period Ended Year Ended
November 30, 1996** November 30, 1995
CLASS Y SHARES Shares Dollars Shares Dollars
- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 3,322,198 $ 36,432,281 -- --
Shares issued to
shareholders in
payment of
distributions
declared 683 7,559 -- --
Shares redeemed (17,589) (193,563) -- --
---------- ------------ --------- -----------
Net change
resulting from
Class Y Shares
transactions 3,305,292 $ 36,246,277 -- --
---------- ------------ --------- -----------
Net change
resulting from
fund shares
transactions 797,825 $ 8,781,541 923,108 $ 9,859,176
---------- ------------ --------- -----------
</TABLE>
* For the period from December 26, 1994 (date of initial public investment) to
November 30, 1995.
** For the period from July 22, 1996 (date of initial public investment) to
November 30, 1996.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS
THE BILTMORE MUNICIPAL FUNDS
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Bank of North Carolina, N.A., the Funds'
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 as listed below. The Adviser may voluntarily choose to waive any portion
of its fee. The Adviser can modify or terminate this voluntary waiver at any
time at its sole discretion.
<TABLE>
<CAPTION>
Fund Annual Rate
<S> <C>
Equity Fund 0.70%
Quantitative Equity Fund 0.70%
Equity Index Fund 0.30%
Special Values Fund 0.80%
Emerging Markets Fund 1.00%
Balanced Fund 0.70%
Fixed Income Fund 0.60%
Short-Term Fixed Income Fund 0.55%
Georgia Municipal Bond Fund 0.75%
North Carolina Municipal Bond Fund 0.75%
South Carolina Municipal Bond Fund 0.75%
</TABLE>
SUB ADVISORY FEE--The Adviser has entered into a sub-advisory agreement with
Twin Capital (the "Sub-Adviser"). The Sub-Adviser furnishes certain advisory
services to the Adviser for Quantitative Equity Fund, including investment
research, quantitative analysis, statistical and other factual information, and
recommendations based on the Sub-Adviser's analysis, and assists the Adviser in
identifying securities for potential purchase and/or sale. The Sub-Adviser is
entitled to receive an annual fee of $55,000, payable by the Adviser. The
Sub-Adviser may elect to waive some or all of its fee.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Funds
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Trusts for the period.
DISTRIBUTION SERVICES FEE--Equity Fund, Quantitative Equity Fund, Balanced Fund,
and Fixed Income Fund have adopted a Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the Act. Under the terms of the Plan, each Fund will compensate
Federated Securities Corp. ("FSC"), the principal distributor, from its net
assets to finance certain activities intended to result in the sale of Class B
Shares. The Plan provides that each Fund may incur distribution expenses up to
0.75% of the average daily net assets of each Fund's Class B Shares, annually,
to compensate FSC. The distributor may voluntarily choose to waive any portion
of its fee and/or reimburse certain operating expenses of the Fund. The
distributor can modify or terminate this voluntary waiver and/or reimbursement
at any time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with FAS, each Fund will pay FAS up to 0.25% of average daily net assets of its
Class A Shares and Class B Shares for the period. The fee paid to FAS is used to
finance certain services for shareholders and to maintain shareholder accounts.
FAS may voluntarily choose to waive any portion of its fee. FAS can modify or
terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--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, through its subsidiary FAS, maintains the
Funds' accounting records for which it receives a fee. The fee is based on the
level of each Fund's average daily net assets for the period, plus out-of-pocket
expenses. FAS may voluntarily choose to waive any portion of its fee.
CUSTODIAN FEES--Wachovia Bank of North Carolina, N.A. is the Funds' custodian.
The fee is based on the level of each Fund's average daily 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 the effective date of each Fund. For the year
ended November 30, 1996, the following amounts were paid pursuant to this
agreement:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE BILTMORE FUNDS
THE BILTMORE MUNICIPAL FUNDS
<TABLE>
<CAPTION>
Organizational Organizational
Fund Expenses Expenses Paid
<S> <C> <C>
Equity Fund $ 34,484 $ 8,098
Quantitative Equity Fund 34,484 5,667
Equity Index Fund 34,484 7,985
Special Values Fund 33,777 8,256
Emerging Markets Fund 40,764 5,435
Balanced Fund 31,904 7,799
Fixed Income Fund 34,484 7,947
Short-Term Fixed Income Fund 34,484 8,429
Georgia Municipal Bond Fund 30,000 3,449
North Carolina Municipal Bond Fund 30,000 4,000
</TABLE>
GENERAL--Certain of the Officers of the Trusts are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
year ended November 30, 1996, were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales
<S> <C> <C>
Equity Fund $ 90,512,777 $ 80,301,436
Quantitative Equity Fund 79,382,184 57,669,082
Equity Index Fund 25,819,271 22,072,940
Special Values Fund 50,820,296 15,257,954
Emerging Markets Fund 81,268,587 27,540,801
Balanced Fund 247,680,340 210,171,255
Fixed Income Fund 324,036,286 308,391,264
Short-Term Fixed Income Fund 167,261,308 176,961,738
Georgia Municipal Bond Fund 5,594,851 1,519,567
North Carolina Municipal Bond Fund 23,505,306 1,835,766
South Carolina Municipal Bond Fund 28,744,860 19,477,442
</TABLE>
(6) CONCENTRATION OF CREDIT RISK
Since The Biltmore Municipal Funds invest a substantial portion of their assets
in issuers located in one state, they will be more susceptible to factors
adversely affecting issuers of that state than would be a comparable tax-exempt
mutual fund that invests nationally. In order to reduce the credit risk
associated with such factors, at November 30, 1996, the securities in the
portfolio of investments are backed by letters of credit or bond insurance of
various financial institutions and financial guaranty assurance agencies, as
indicated below. The largest percentage of investments insured by or supported
(backed) by a letter of credit from any one institution or agency is also
indicated below.
<TABLE>
<CAPTION>
% of Portfolio % of Portfolio backed by
Fund Guaranteed/Insured Largest Guarantor/Insurer
<S> <C> <C>
Georgia Municipal Bond Fund 48.6% 18.8%
North Carolina Municipal Bond Fund 42.3% 19.9%
South Carolina Municipal Bond Fund 67.4% 24.4%
</TABLE>
Emerging Markets Fund invests in securities of non-U.S. issuers. Although the
Fund maintains a diversified investment portfolio, the political or economic
developments within a particular country or region may have an adverse effect on
the ability of domiciled issuers to meet their obligations. Additionally,
political or economic developments may have an effect on the liquidity and
volatility of portfolio securities and currency holdings.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Trustees and Shareholders of
THE BILTMORE FUNDS and THE BILTMORE MUNICIPAL FUNDS:
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Biltmore Balanced Fund, Biltmore Emerging
Markets Fund, Biltmore Equity Fund, Biltmore Equity Index Fund, Biltmore Fixed
Income Fund, Biltmore Quantitative Equity Fund, Biltmore Short-Term Fixed Income
Fund, Biltmore Special Values Fund, Biltmore Georgia Municipal Bond Fund,
Biltmore North Carolina Municipal Bond Fund, and Biltmore South Carolina
Municipal Bond Fund (portfolios of The Biltmore Funds and The Biltmore Municipal
Funds, respectively) as of November 30, 1996, and the related statements of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended and financial highlights for the
periods presented. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Biltmore Balanced Fund, Biltmore Emerging Markets Fund, Biltmore Equity Fund,
Biltmore Equity Index Fund, Biltmore Fixed Income Fund, Biltmore Quantitative
Equity Fund, Biltmore Short-Term Fixed Income Fund, Biltmore Special Values
Fund, Biltmore Georgia Municipal Bond Fund, Biltmore North Carolina Municipal
Bond Fund, and Biltmore South Carolina Municipal Bond Fund of The Biltmore Funds
and The Biltmore Municipal Funds, respectively, at November 30, 1996, and the
results of their operations for the year then ended, changes in their net assets
for each of the two years in the period then ended, and financial highlights for
the periods presented, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
January 17, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRUSTEES* OFFICERS
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Charles L. Davis, Jr.
D. Dean Kaylor Vice President and Assistant Treasurer
Charles S. Way, Jr. Peter J. Germain
Secretary
Gail Cagney
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning its investment objective and policies, management fees, expenses and
other information.
*All Trustees are independent of the Trust.
Federated Securities Corp.
is the distributor of the fund.
831-27 (1/97) G01512-17(1/97)
APPENDIX
A1. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Equity Fund - Class A Shares is represented by a solid line. The S&P 500
Index is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the fund and the S&P 500 Index. The `x'' axis reflects
computation periods from May 7, 1993 to November 30, 1996. The `y'' axis
reflects the cost of the investment. The right margin reflects the ending
value of the hypothetical investment in the fund as compared to the S&P 500
Index; the ending values were $16,501 and $17,785, respectively. The
legend in the bottom quadrant of the graphic presentation indicates the
fund's Average Annual Total Returns for the period ended November 30, 1996;
beginning with the start of performance date of the fund ( May 7, 1993 ),
and the one-year period thereafter; the Average Annual Total Returns were
15.08% and 19.90%, respectively.
A2. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Equity Fund - Class B Shares is represented by a solid line. The S&P 500
Index is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the fund and the S&P 500 Index. The `x'' axis reflects
computation periods from July 23, 1996 to November 30, 1996. The `y''
axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the fund as compared to the
S&P 500 Index; the ending values were $11,425 and $11,921, respectively.
The legend in the bottom quadrant of the graphic presentation indicates the
fund's Cumulative Total Return for the period ended November 30, 1996;
beginning with the start of performance date of the fund ( July 23, 1996 );
the Cumulative Total Return was 14.25%.
A3. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Equity Fund - Class Y Shares is represented by a solid line. The S&P 500
Index is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the fund and the S&P 500 Index. The `x'' axis reflects
computation periods from July 23, 1996 to November 30, 1996. The `y''
axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the fund as compared to the
S&P 500 Index; the ending values were $11,957 and $11,921, respectively.
The legend in the bottom quadrant of the graphic presentation indicates the
fund's Cumulative Total Return for the period ended November 30, 1996;
beginning with the start of performance date of the fund ( July 23, 1996 );
the Cumulative Total Return was 19.57%.
A4. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Quantitative Equity Fund - Class A Shares is represented by a solid line.
The S&P 500 Index is represented by a dotted line. The line graph is a
visual representation of a comparison of change in value of a $10,000
hypothetical investment in the fund and the S&P 500 Index. The `x'' axis
reflects computation periods from March 25, 1994 to November 30, 1996. The
`y'' axis reflects the cost of the investment. The right margin reflects
the ending value of the hypothetical investment in the fund as compared to
the S&P 500 Index; the ending values were $15,960 and $16,669,
respectively. The legend in the bottom quadrant of the graphic
presentation indicates the fund's Average Annual Total Returns for the
period ended November 30, 1996; beginning with the start of performance
date of the fund (March 25, 1994 ), and the one-year period thereafter; the
Average Annual Total Returns were 19.04% and 18.15%, respectively.
A5. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Quantitative Equity Fund - Class B Shares is represented by a solid line.
The S&P 500 Index is represented by a dotted line. The line graph is a
visual representation of a comparison of change in value of a $10,000
hypothetical investment in the fund and the S&P 500 Index. The `x'' axis
reflects computation periods from July 23, 1996 to November 30, 1996. The
`y'' axis reflects the cost of the investment. The right margin reflects
the ending value of the hypothetical investment in the fund as compared to
the S&P 500 Index; the ending values were $11,492 and $11,921,
respectively. The legend in the bottom quadrant of the graphic
presentation indicates the fund's Cumulative Total Return for the period
ended November 30, 1996; beginning with the start of performance date of
the fund (July 23, 1996 ); the Cumulative Total Return was 14.92%.
A6. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Quantitative Equity Fund - Class Y Shares is represented by a solid line.
The S&P 500 Index is represented by a dotted line. The line graph is a
visual representation of a comparison of change in value of a $10,000
hypothetical investment in the fund and the S&P 500 Index. The `x'' axis
reflects computation periods from July 23, 1996 to November 30, 1996. The
`y'' axis reflects the cost of the investment. The right margin reflects
the ending value of the hypothetical investment in the fund as compared to
the S&P 500 Index; the ending values were $11,957 and $11,921,
respectively. The legend in the bottom quadrant of the graphic
presentation indicates the fund's Cumulative Total Return for the period
ended November 30, 1996; beginning with the start of performance date of
the fund ( July 23, 1996 ); the Cumulative Total Return was 19.57%.
A7. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Equity Index Fund - Class A Shares is represented by a solid line. The S&P
500 Index is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the fund and the S&P 500 Index. The `x'' axis reflects
computation periods from May 7, 1993 to November 30, 1996. The `y'' axis
reflects the cost of the investment. The right margin reflects the ending
value of the hypothetical investment in the fund as compared to the S&P 500
Index; the ending values were $17,595 and $17,785, respectively. The
legend in the bottom quadrant of the graphic presentation indicates the
fund's Average Annual Total Returns for the period ended November 30, 1996;
beginning with the start of performance date of the fund ( May 7, 1993 ),
and the one-year period thereafter; the Average Annual Total Returns were
17.17% and 21.48%, respectively.
A8. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Equity Index Fund - Class Y Shares is represented by a solid line. The S&P
500 Index is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the fund and the S&P 500 Index. The `x'' axis reflects
computation periods from July 23, 1996 to November 30, 1996. The `y''
axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the fund as compared to the
S&P 500 Index; the ending values were $12,014 and $11,921, respectively.
The legend in the bottom quadrant of the graphic presentation indicates the
fund's Cumulative Total Return for the period ended November 30, 1996;
beginning with the start of performance date of the fund ( July 23, 1996 );
the Cumulative Total Return was 20.14%.
A9. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Special Values Fund - Class A Shares is represented by a solid line. The
Russell 2000 Index is represented by a dotted line. The line graph is a
visual representation of a comparison of change in value of a $10,000
hypothetical investment in the fund and the Russell 2000 Index. The `x''
axis reflects computation periods from May 7, 1993 to November 30, 1996.
The `y'' axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the fund as
compared to the Russell 2000 Index; the ending values were $16,934 and
$16,391, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the fund's Average Annual Total Returns for the
period ended November 30, 1996; beginning with the start of performance
date of the fund (May 7, 1993 ), and the one-year period thereafter; the
Average Annual Total Returns were 15.90% and 33.53%, respectively.
A10. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Special Values Fund - Class Y Shares is represented by a solid line. The
Russell 2000 Index is represented by a dotted line. The line graph is a
visual representation of a comparison of change in value of a $10,000
hypothetical investment in the fund and the Russell 2000 Index. The `x''
axis reflects computation periods from July 23, 1996 to November 30, 1996.
The `y'' axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the fund as
compared to the Russell 2000 Index; the ending values were $11,505 and
$11,271, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the fund's Cumulative Total Return for the period
ended November 30, 1996; beginning with the start of performance date of
the fund ( July 23, 1996 ); the Cumulative Total Return was 15.05%.
A11. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Emerging Markets Fund - Class A Shares is represented by a solid line. The
IFC Investable Composite Index (Total Return Series) is represented by a
dotted line. The line graph is a visual representation of a comparison of
change in value of a $10,000 hypothetical investment in the fund and the
IFC Investable Composite Index (Total Return Series). The `x'' axis
reflects computation periods from December 23, 1994 to November 30, 1996.
The `y'' axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the fund as
compared to the IFC Investable Composite Index (Total Return Series); the
ending values were $11,179 and $9,972, respectively. The legend in the
bottom quadrant of the graphic presentation indicates the fund's Average
Annual Total Returns for the period ended November 30, 1996; beginning with
the start of performance date of the fund (December 23, 1994), and the one-
year period thereafter; the Average Annual Total Returns were 5.92% and
7.39%, respectively.
A12. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Emerging Markets Fund - Class Y Shares is represented by a solid line. The
IFC Investable Composite Index (Total Return Series) is represented by a
dotted line. The line graph is a visual representation of a comparison of
change in value of a $10,000 hypothetical investment in the fund and the
IFC Investable Composite Index (Total Return Series). The `x'' axis
reflects computation periods from July 23, 1996 to November 30, 1996. The
`y'' axis reflects the cost of the investment. The right margin reflects
the ending value of the hypothetical investment in the fund as compared to
the IFC Investable Composite Index (Total Return Series); the ending values
were $9,790 and $9,949, respectively. The legend in the bottom quadrant of
the graphic presentation indicates the fund's Cumulative Total Return for
the period ended November 30, 1996; beginning with the start of performance
date of the fund (July 23, 1996); the Cumulative Total Return was (2.10)%.
A13. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath Biltmore
Balanced Fund - Class A Shares is represented by a solid line. The Lehman
Aggregate Bond Index is represented by a broken solid line. The S&P 500
Index is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the fund and the Lehman Aggregate Bond Index and the S&P 500
Index. The `x'' axis reflects computation periods from May 7, 1993 to
November 30, 1996. The `y'' axis reflects the cost of the investment.
The right margin reflects the ending value of the hypothetical investment
in the fund as compared to the Lehman Aggregate Bond Index and the S&P 500
Index; the ending values were $14,942, $12,517, and $17,785, respectively.
The legend in the bottom quadrant of the graphic presentation indicates the
fund's Average Annual Total Returns for the period ended November 30, 1996;
beginning with the start of performance date of the fund (May 7, 1993 ),
and the one-year period thereafter; the Average Annual Total Returns were
11.93% and 13.23%, respectively.
A14. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath Biltmore
Balanced Fund - Class B Shares is represented by a solid line. The Lehman
Aggregate Bond Index is represented by a broken solid line. The S&P 500
Index is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the fund and the Lehman Aggregate Bond Index and the S&P 500
Index. The `x'' axis reflects computation periods from July 23, 1996 to
November 30, 1996. The `y'' axis reflects the cost of the investment.
The right margin reflects the ending value of the hypothetical investment
in the fund as compared to the Lehman Aggregate Bond Index and the S&P 500
Index; the ending values were $10,947, $10,560, and $11,921, respectively.
The legend in the bottom quadrant of the graphic presentation indicates the
fund's Cumulative Total Return for the period ended November 30, 1996;
beginning with the start of performance date of the fund (July 23, 1996);
the Cumulative Total Return was 9.47%.
A15. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath Biltmore
Balanced Fund - Class Y Shares is represented by a solid line. The Lehman
Aggregate Bond Index is represented by a broken solid line. The S&P 500
Index is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the fund and the Lehman Aggregate Bond Index and the S&P 500
Index. The `x'' axis reflects computation periods from July 23, 1996 to
November 30, 1996. The `y'' axis reflects the cost of the investment.
The right margin reflects the ending value of the hypothetical investment
in the fund as compared to the Lehman Aggregate Bond Index and the S&P 500
Index; the ending values were $11,469, $10,560, and $11,921, respectively.
The legend in the bottom quadrant of the graphic presentation indicates the
fund's Cumulative Total Return for the period ended November 30, 1996;
beginning with the start of performance date of the fund (July 23, 1996);
the Cumulative Total Return was 14.69%.
A16. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Fixed Income Fund - Class A Shares is represented by a solid line. The
Lehman Aggregate Bond Index is represented by a dotted line. The line
graph is a visual representation of a comparison of change in value of a
$10,000 hypothetical investment in the fund and the Lehman Aggregate Bond
Index. The `x'' axis reflects computation periods from May 7, 1993 to
November 30, 1996. The `y'' axis reflects the cost of the investment.
The right margin reflects the ending value of the hypothetical investment
in the fund as compared to the Lehman Aggregate Bond Index; the ending
values were $11,642 and $12,517, respectively. The legend in the bottom
quadrant of the graphic presentation indicates the fund's Average Annual
Total Returns for the period ended November 30, 1996; beginning with the
start of performance date of the fund (May 7, 1993), and the one-year
period thereafter; the Average Annual Total Returns were 4.36% and 0.72%,
respectively.
A17. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Fixed Income Fund - Class B Shares is represented by a solid line. The
Lehman Aggregate Bond Index is represented by a dotted line. The line
graph is a visual representation of a comparison of change in value of a
$10,000 hypothetical investment in the fund and the Lehman Aggregate Bond
Index. The `x'' axis reflects computation periods from July 23, 1996 to
November 30, 1996. The `y'' axis reflects the cost of the investment.
The right margin reflects the ending value of the hypothetical investment
in the fund as compared to the Lehman Aggregate Bond Index; the ending
values were $10,077 and $10,560, respectively. The legend in the bottom
quadrant of the graphic presentation indicates the fund's Cumulative Total
Return for the period ended November 30, 1996; beginning with the start of
performance date of the fund (July 23, 1996); the Cumulative Total Return
was 0.77%.
A18. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Fixed Income Fund - Class Y Shares is represented by a solid line. The
Lehman Aggregate Bond Index is represented by a dotted line. The line
graph is a visual representation of a comparison of change in value of a
$10,000 hypothetical investment in the fund and the Lehman Aggregate Bond
Index. The `x'' axis reflects computation periods from July 23, 1996 to
November 30, 1996. The `y'' axis reflects the cost of the investment.
The right margin reflects the ending value of the hypothetical investment
in the fund as compared to the Lehman Aggregate Bond Index; the ending
values were $10,612 and $10,560, respectively. The legend in the bottom
quadrant of the graphic presentation indicates the fund's Cumulative Total
Return for the period ended November 30, 1996; beginning with the start of
performance date of the fund (July 23, 1996); the Cumulative Total Return
was 6.12%.
A19. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Short-Term Fixed Income Fund - Class A Shares is represented by a solid
line. The Merrill Lynch 1-3 Year U.S. Treasury Index is represented by a
dotted line. The line graph is a visual representation of a comparison of
change in value of a $10,000 hypothetical investment in the fund and the
Merrill Lynch 1-3 Year U.S. Treasury Index. The `x'' axis reflects
computation periods from May 7, 1993 to November 30, 1996. The `y'' axis
reflects the cost of the investment. The right margin reflects the ending
value of the hypothetical investment in the fund as compared to the Merrill
Lynch 1-3 Year U.S. Treasury Index; the ending values were $11,267 and
$11,996, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the fund's Average Annual Total Returns for the
period ended November 30, 1996; beginning with the start of performance
date of the fund (May 7, 1993), and the one-year period thereafter; the
Average Annual Total Returns were 4.00% and 2.70%, respectively.
A20. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Short-Term Fixed Income Fund - Class Y Shares is represented by a solid
line. The Merrill Lynch 1-3 Year U.S. Treasury Index is represented by a
dotted line. The line graph is a visual representation of a comparison of
change in value of a $10,000 hypothetical investment in the fund and the
Merrill Lynch 1-3 Year U.S. Treasury Index. The `x'' axis reflects
computation periods from July 23, 1996 to November 30, 1996. The `y''
axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the fund as compared to the
Merrill Lynch 1-3 Year U.S. Treasury Index; the ending values were $10,318
and $10,300, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the fund's Cumulative Total Return for the
period ended November 30, 1996; beginning with the start of performance
date of the fund (July 23, 1996); the Cumulative Total Return was 3.00%.
A21. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Georgia Municipal Bond Fund - Class A Shares is represented by a solid
line. The Lehman State General Obligation Bond Index is represented by a
dotted line. The line graph is a visual representation of a comparison of
change in value of a $10,000 hypothetical investment in the fund and the
Lehman State General Obligation Bond Index. The `x'' axis reflects
computation periods from December 23, 1994 to November 30, 1996. The `y''
axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the fund as compared to the
Lehman State General Obligation Bond Index; the ending values were $11,421
and $12,215, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the fund's Average Annual Total Returns for
the period ended November 30, 1996; beginning with the start of performance
date of the fund (December 23, 1994), and the one-year period thereafter;
the Average Annual Total Returns were 7.09% and 0.21%, respectively.
A22. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
Georgia Municipal Bond Fund - Class Y Shares is represented by a solid
line. The Lehman State General Obligation Bond Index is represented by a
dotted line. The line graph is a visual representation of a comparison of
change in value of a $10,000 hypothetical investment in the fund and the
Lehman State General Obligation Bond Index. The `x'' axis reflects
computation periods from July 23, 1996 to November 30, 1996. The `y''
axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the fund as compared to the
Lehman State General Obligation Bond Index; the ending values were $10,431
and $10,422, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the fund's Cumulative Total Return for the
period ended November 30, 1996; beginning with the start of performance
date of the fund (July 23, 1996); the Cumulative Total Return was 4.31%.
A23. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
North Carolina Municipal Bond Fund - Class A Shares is represented by a
solid line. The Lehman State General Obligation Bond Index is represented
by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
fund and the Lehman State General Obligation Bond Index. The `x'' axis
reflects computation periods from December 23, 1994 to November 30, 1996.
The `y'' axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the fund as
compared to the Lehman State General Obligation Bond Index; the ending
values were $11,490 and $12,215, respectively. The legend in the bottom
quadrant of the graphic presentation indicates the fund's Average Annual
Total Returns for the period ended November 30, 1996; beginning with the
start of performance date of the fund (December 23, 1994), and the one-year
period thereafter; the Average Annual Total Returns were 7.43% and 0.42%,
respectively.
A24. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
North Carolina Municipal Bond Fund - Class Y Shares is represented by a
solid line. The Lehman State General Obligation Bond Index is represented
by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
fund and the Lehman State General Obligation Bond Index. The `x'' axis
reflects computation periods from July 23, 1996 to November 30, 1996. The
`y'' axis reflects the cost of the investment. The right margin reflects
the ending value of the hypothetical investment in the fund as compared to
the Lehman State General Obligation Bond Index; the ending values were
$10,455 and $10,422, respectively. The legend in the bottom quadrant of
the graphic presentation indicates the fund's Cumulative Total Return for
the period ended November 30, 1996; beginning with the start of performance
date of the fund (July 23, 1996); the Cumulative Total Return was 4.55%.
A25. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
South Carolina Municipal Bond Fund - Class A Shares is represented by a
solid line. The Lehman State General Obligation Bond Index is represented
by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
fund and the Lehman State General Obligation Bond Index. The `x'' axis
reflects computation periods from January 11, 1991 to November 30, 1996.
The `y'' axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the fund as
compared to the Lehman State General Obligation Bond Index; the ending
values were $14,754 and $15,681, respectively. The legend in the bottom
quadrant of the graphic presentation indicates the fund's Average Annual
Total Returns for the period ended November 30, 1996; beginning with the
start of performance date of the fund (January 11, 1991), and the one-year
and five-year periods thereafter; the Average Annual Total Returns were
6.85%,0.80% and 6.63%, respectively.
A26. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. Biltmore
South Carolina Municipal Bond Fund - Class Y Shares is represented by a
solid line. The Lehman State General Obligation Bond Index is represented
by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
fund and the Lehman State General Obligation Bond Index. The `x'' axis
reflects computation periods from July 23, 1996 to November 30, 1996. The
`y'' axis reflects the cost of the investment. The right margin reflects
the ending value of the hypothetical investment in the fund as compared to
the Lehman State General Obligation Bond Index; the ending values were
$10,486 and $10,422, respectively. The legend in the bottom quadrant of
the graphic presentation indicates the fund's Cumulative Total Return for
the period ended November 30, 1996; beginning with the start of performance
date of the fund (July 23, 1996); the Cumulative Total Return was 4.86%.
