Brundage,
Story and Rose
Investment Trust
-----------------------------
Semi-Annual Report
-----------------------------
May 31, 1998
-----------------------------
(Unaudited)
-----------------------------
-----------------------------
Short/Intermediate Term
-----------------------------
Fixed-Income Fund
-----------------------------
-----------------------------
Equity Fund
-----------------------------
-----------------------------
-----------------------------
[LOGO]
<PAGE>
Letter To Shareholders July 8, 1998
- --------------------------------------------------------------------------------
ECONOMIC & FINANCIAL MARKETS OUTLOOK
In our November 30, 1997 Annual Report we titled this portion of our Letter to
Shareholders "A Cold Wind Blows From Asia." We felt at that time that the crisis
in Asia would be of longer duration and greater severity than generally
acknowledged. In retrospect, that point of view has proven correct, and the
negative impact on the earnings of corporate America is now being felt.
Although earnings expectations have been reduced steadily throughout the year,
it is our feeling that they remain at least slightly too optimistic. We feel it
likely that corporate earnings in 1998 will exceed those of 1997 only by a very
modest margin. Asia, with two-thirds of the world's population, close to 40% of
gross world product (GWP) and historical growth rates which have provided over
50% of GWP growth over recent years, is bound to exert a substantial negative
economic force when it experiences severe financial duress and economic
recession.
Six months ago we expressed caution concerning the very generous statistical
valuations of equities and yet, so far in 1998, we see stock market performance
which just about equals the exceedingly strong returns experienced during the
same period a year ago. Now that stock valuations have exceeded just about every
statistical record dating back over a century, it seems timely to reflect upon
today's markets and the forces which have impelled them to such lofty levels.
When analyzing equity markets, we are fundamentalists: We analyze a business,
its management, its ability to generate cash and its record of either
reinvesting that cash profitably or returning that cash to shareholders.
Underlying this discipline is the knowledge that publicly traded common stocks
seldom, if ever, trade exactly at their economic value. But by focusing on
economic value, an investor will be able to look past periods of speculative
excess and those of rampant pessimism and focus on long-term value appreciation.
Indeed, as active participants in, and students of, the financial markets, we
sometimes find ourselves expecting something to happen which, from a purely
rational perspective, should not. Now is one of those times.
We can identify a number of reasons why stocks might trend higher over the near
term, but no really compelling reason why they should. On the positive side, the
single most important factor is the inflow of new cash into equities. Bolstered
by years of double-digit returns, long-time equity investors have become
complacent about their holdings and, to the extent that they have tried to focus
on value and judicious profit taking, they have been penalized repeatedly by
market trends. Moreover, novice market participants have been conditioned to
"buy the dips" and use any market setback as an opportunity to "get in on the
party" they have missed for so long.
We also find that the very weakness in Asia that makes this market environment
troubling has caused a global economic slowdown, relieving any current upward
pressure on interest rates. The implosion in Asia and continued strength of the
U.S. dollar have actually made U.S. financial assets more attractive to foreign
investors -- a "flight to quality" -- resulting in still more demand for stocks
as well as bonds.
While the outlook for bonds appears almost ideal -- low inflation, a strong
dollar and slower economic growth -- the outlook for equities is less clear as,
unfortunately (and troubling to us), the earnings of major U.S. corporations
have not been remotely as good as the fortunes of their stocks. But despite
declining expectations and a number of high profile corporate earnings
disappointments, the market has been able to log another strong period in a
string of truly unprecedented advances. Is the market then looking through to
better times ahead and discounting the undeniably negative impact of
developments in Asia and the heightened competition here at home? Or does the
market's continued strength signal a significant disconnection between stock
prices and earnings?
We do not have the answer but, from our perspective, we are now on new ground
where
1
<PAGE>
rising stock prices, in the face of stagnating fundamentals, have transformed
our cautious optimism into a near-term concern. As we have mentioned in the
past, the market's price/earnings (P/E) ratio based on trailing earnings has
looked high throughout the last few years. But it has been an unreliable
valuation benchmark simply because the market is a forward-looking mechanism and
earnings growth over the past four years has been extraordinary.
In fact, if one compares the market's price at the beginning of each calendar
year with actual earnings per share realized during that year, it is apparent
that high stock prices were simply accurately forecasting strong profit growth.
While trailing P/E ratios were in excess of 20 times, the market traded at
between 15 and 16 times forward-looking earnings consistently from 1994 through
1997. While still high historically, these P/E ratios, in retrospect, do not
look unreasonable given that growth in earnings for the four years from 1994
through 1997 averaged a very healthy 11%.
Unfortunately, if our estimates are right, this experience of seemingly high P/E
ratios proving justified by subsequent high growth rates may be coming to an
end. With lower earnings expectations and the market's strong advance in the
first quarter, the P/E ratio on the market's 1998 estimated earnings has now
reached about 25 times or a full 10 multiple points higher than when this
advance began in 1994; and this level of valuation is accompanied by the lowest
expected earnings growth rate for the market in the last five years. Even if our
forecast for 1998 proves to be too conservative, the P/E ratio on trailing
earnings is the highest it has ever been -- going all the way back to 1871.
So, given these very real concerns, why continue to own common stocks at all?
For one thing, there is no sign that the tide of money that has been lifting the
market has peaked, much less begun to ebb. As long as capital continues to flow
into the market, the corporate acquisition pace continues unabated and Wall
Street is unable to issue new equity fast enough to absorb it, stock prices are
likely to trend higher despite the earnings outlook. More important, as long as
interest rates remain low and a recession still does not appear in the offing,
investors may well look through the current slowdown of growth in corporate
profits and into 1999 when growth is expected to re-accelerate modestly toward
its historic 6 - 7% trend rate.
Finally, we justify continued common stock exposure on the premise that,
although stock prices are obviously high, the environment for long-term
financial assets remains remarkably good, perhaps better than at any time in the
past thirty years. Inflation seems still to be under control, interest rates are
likely to stay in their current trading range and the global economy, despite
the impact of the Asian crisis, looks positioned to deliver additional years of
continuing prosperity. Our prescription for investing in this high-risk market
remains unchanged: Allow the waves of market optimism and pessimism to wash over
us as we remain anchored to the fundamental business prospects for the
individual companies on which we focus, while eschewing fads and areas of
excessive overvaluation.
SHORT/INTERMEDIATE TERM FIXED-INCOME FUND
Interest rates on U.S. Treasury bonds fell significantly during the six-month
period ended May 31, 1998 and the flatness of the yield curve persisted.
Intermediate and longer maturity issues declined in yield by 25 to 30 basis
points. Total rates of return, which include interest accruals and price
changes, for various maturity Treasury issues are summarized below:
Treasury Issue Total Return
- ------------------------------
3 month 2.64%
- ------------------------------
2 year 3.05%
- ------------------------------
3 year 3.33%
- ------------------------------
5 year 3.68%
- ------------------------------
10 year 4.17%
- ------------------------------
30 year 6.43%
- ------------------------------
The Asian financial problems impacted the valuation of corporate bonds during
this period, causing yield spreads over Treasury issues to widen and resulting
in 3-5 year investment grade
2
<PAGE>
corporate bond returns which were no better than equivalent maturity Treasuries.
Selected corporate bonds, dependent on the issuer's exposure to the Asian
region, produced very poor results. Mortgage-backed securities also lagged
Treasury issues during the period as prepayment fears resulted in more muted
price increases for these issues than for equivalent maturity Treasury issues.
Despite the Fund's exposure to corporate bonds and mortgage-backed securities,
the total return for the six-month period of 3.85% was better than 3-5 year
Treasury issues and better than the 3.63% return of the Lehman Brothers
Intermediate Maturity Government/Corporate Bond Index.
The nominal and relative returns for the Fund during the first half of fiscal
1998 were favorable due to the good issue selection of individual bonds made by
our specialists in the corporate and mortgage-backed areas. Our current strategy
is to add gradually to our corporate and mortgage-backed holdings now that more
issues represent relatively good values.
EQUITY FUND
For the six months ended May 31, 1998, your Equity Fund generated a return of
10.9% which, although gratifying on an absolute basis, lagged the S&P 500 Index
(the Index). The best performing areas continue to be pharmaceuticals, consumer
staples and the financial sector. However, relative returns were penalized
somewhat by what your Fund did not own: the very largest consumer-oriented
companies which are selling at exceedingly high valuations and which heavily
impact the market capitalization-weighted S&P 500. As we have said in the past,
that Index continues to be driven by a small group of very generously valued
large capitalization companies and, because we feel that they are overly
expensive, we have underemphasized them in your Fund. The S&P 500 Index
generated a return of 15.1% for the period while, in contrast, on an unweighted
basis, its return was 10.8%. The S&P Small-Cap Index had a return of 7.9% and
the Russell 2000 Index, 6.9%. In short, company size was an important component
of returns during this period.
The characteristics of your Fund continue to be very positive. Five-year
compound rates of revenue growth, cash flow growth and book value growth exceed
the S&P 500 while price-to-book value and debt-to-capital ratios are more
conservative. The weighted average market capitalization of the companies in
your Fund is large but is substantially less than that of the Index. Our
strategy continues to be to emphasize fundamentally superior companies and to
lean against the current trend toward the small number of excessively overvalued
favorites.
SUMMARY
The current environment is, as we have said, very attractive for bond investors.
It is also positive in a macroeconomic sense because our rapidly growing trade
deficit and other repercussions of "the Asian flu" have calmed substantially
what might have become an overheated domestic economy. While the broad economic
picture continues to be positive, the impact of a surprisingly less attractive
environment for corporate earnings may, before too long, cool the equity
markets. Thus, we feel that a cautious posture is warranted over the near term.
More important, we continue to believe in the efficacy of equities for investors
with longer-term investment horizons.
Sincerely yours,
/s/ Malcolm D. Clarke, Jr.
Malcolm D. Clarke, Jr.
President
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<TABLE>
<CAPTION>
BRUNDAGE, STORY AND ROSE INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES
May 31, 1998 (Unaudited)
- -------------------------------------------------------------------------------------------------------------
Short/
Intermediate
Term
Fixed-Income Equity
Fund Fund
- -------------------------------------------------------------------------------------------------------------
ASSETS
Investment securities:
<S> <C> <C>
At amortized cost (original cost $36,507,811 and $25,497,713, respectively) $ 36,527,520 $ 25,497,713
============ ============
At market value (Note 2) .................................................. $ 37,124,703 $ 37,915,346
Investments in repurchase agreements (Note 2) ................................ 965,000 1,894,000
Cash ......................................................................... 921 766
Interest and principal paydowns receivable ................................... 448,834 813
Dividends receivable ......................................................... -- 43,197
Receivable for capital shares sold ........................................... 30,850 4,704
Receivable for securities sold ............................................... -- 807,558
Other assets ................................................................. 13,735 12,818
------------ ------------
TOTAL ASSETS .............................................................. 38,584,043 40,679,202
------------ ------------
LIABILITIES
Dividends payable ............................................................ 32,619 --
Payable for capital shares redeemed .......................................... 19,975 27,625
Payable for securities purchased ............................................. -- 569,387
Payable to affiliates (Note 4) ............................................... 12,298 33,203
Other accrued expenses and liabilities ....................................... 10,195 5,327
------------ ------------
TOTAL LIABILITIES ......................................................... 75,087 635,542
------------ ------------
NET ASSETS ................................................................... $ 38,508,956 $ 40,043,660
============ ============
Net assets consist of:
Paid-in capital .............................................................. $ 38,085,778 $ 25,568,779
Undistributed net investment income .......................................... 252 9,508
Accumulated net realized gains (losses) from security transactions ........... (174,257) 2,047,740
Net unrealized appreciation on investments ................................... 597,183 12,417,633
------------ ------------
Net assets ................................................................... $ 38,508,956 $ 40,043,660
============ ============
Shares of beneficial interest outstanding (unlimited number of shares
authorized, no par value) (Note 5) ........................................ 3,570,162 2,074,618
============ ============
Net asset value, offering price and redemption price per share (Note 2) ...... $ 10.79 $ 19.30
============ ============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
BRUNDAGE, STORY AND ROSE INVESTMENT TRUST
STATEMENTS OF OPERATIONS
For the Six Months Ended May 31, 1998 (Unaudited)
- ------------------------------------------------------------------------------------------------
Short/
Intermediate
Term
Fixed-Income Equity
Fund Fund
- ------------------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C>
Interest ........................................................ $ 1,197,812 $ 52,611
Dividends ....................................................... -- 214,801
----------- -----------
TOTAL INVESTMENT INCOME ...................................... 1,197,812 267,412
----------- -----------
EXPENSES
Investment advisory fees (Note 4) ............................... 93,942 125,421
Administrative services fees (Note 4) ........................... 37,924 38,992
Accounting services fees (Note 4) ............................... 18,000 16,200
Professional fees ............................................... 7,396 7,396
Transfer agent and shareholder service fees (Note 4) ............ 7,200 7,200
Trustees' fees and expenses ..................................... 6,500 6,500
Reports to shareholders ......................................... 4,935 5,913
Postage and supplies ............................................ 5,103 4,752
Insurance expense ............................................... 4,857 4,692
Custodian fees .................................................. 1,956 1,821
Pricing expense ................................................. 3,154 613
Registration fees ............................................... 1,513 594
Distribution expenses (Note 4) .................................. 471 500
Other expenses .................................................. 2,799 1,169
----------- -----------
TOTAL EXPENSES ............................................... 195,750 221,763
Fees waived by the Adviser (Note 4) ............................. (73,625) --
----------- -----------
NET EXPENSES ................................................. 122,125 221,763
----------- -----------
NET INVESTMENT INCOME .............................................. 1,075,687 45,649
----------- -----------
REALIZED AND UNREALIZED GAINS ON INVESTMENTS
Net realized gains from security transactions ................... 205,668 2,047,740
Net change in unrealized appreciation/depreciation on investments 126,599 1,806,509
----------- -----------
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS ................... 332,267 3,854,249
----------- -----------
NET INCREASE IN NET ASSETS FROM OPERATIONS ......................... $ 1,407,954 $ 3,899,898
=========== ===========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
BRUNDAGE, STORY AND ROSE INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended May 31, 1998 and November 30, 1997
- ------------------------------------------------------------------------------------------------------------------------
Short/Intermediate Term
Fixed-Income Fund Equity Fund
---------------------------- ----------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
May 31, 1998 November 30, May 31, 1998 November 30,
(Unaudited) 1997 (Unaudited) 1997
- ------------------------------------------------------------------------------------------------------------------------
FROM OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income ................................ $ 1,075,687 $ 1,970,130 $ 45,649 $ 106,761
Net realized gains (losses) from security transactions 205,668 (30,709) 2,047,740 3,535,218
Net change in unrealized appreciation/depreciation
on investments .................................... 126,599 33,026 1,806,509 3,111,825
------------ ------------ ------------ ------------
Net increase in net assets from operations .............. 1,407,954 1,972,447 3,899,898 6,753,804
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ........................... (1,075,435) (1,970,130) (49,509) (106,087)
From net realized gains from security transactions ... -- -- (3,535,218) (2,298,821)
------------ ------------ ------------ ------------
Decrease in net assets from distributions to
shareholders ......................................... (1,075,435) (1,970,130) (3,584,727) (2,404,908)
------------ ------------ ------------ ------------
FROM CAPITAL SHARE
TRANSACTIONS (Note 5):
Proceeds from shares sold ............................ 2,602,440 6,910,347 2,272,165 3,894,667
Net asset value of shares issued in reinvestment of
distributions to shareholders ..................... 861,084 1,580,414 3,541,755 2,352,415
Payments for shares redeemed ......................... (1,939,904) (5,216,812) (1,428,444) (2,793,087)
------------ ------------ ------------ ------------
Net increase in net assets
from capital share transactions ...................... 1,523,620 3,273,949 4,385,476 3,453,995
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS .............................. 1,856,139 3,276,266 4,700,647 7,802,891
NET ASSETS:
Beginning of period .................................. 36,652,817 33,376,551 35,343,013 27,540,122
End of period ........................................ $ 38,508,956 $ 36,652,817 $ 40,043,660 $ 35,343,013
============ ============ ============ ============
UNDISTRIBUTED NET INVESTMENT INCOME ..................... $ 252 $ -- $ 9,508 $ 13,368
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
BRUNDAGE, STORY AND ROSE INVESTMENT TRUST
SHORT/INTERMEDIATE TERM FIXED-INCOME FUND
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------------------------
Per Share Data for a Share Outstanding Throughout Each Period
- -----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended
May 31, Year Ended November 30,
1998 ------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ............. $ 10.69 $ 10.69 $ 10.73 $ 9.94 $ 10.77 $ 10.49
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income ........................... 0.31 0.62 0.62 0.64 0.59 0.64
Net realized and unrealized
gains (losses) on investments ................ 0.10 -- (0.04) 0.79 (0.79) 0.28
-------- -------- -------- -------- -------- --------
Total from investment operations ................... 0.41 0.62 0.58 1.43 (0.20) 0.92
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ............ (0.31) (0.62) (0.62) (0.64) (0.59) (0.64)
Distributions from net realized gains ........... -- -- -- -- (0.04) --
-------- -------- -------- -------- -------- --------
Total distributions ................................ (0.31) (0.62) (0.62) (0.64) (0.63) (0.64)
-------- -------- -------- -------- -------- --------
Net asset value at end of period ................... $ 10.79 $ 10.69 $ 10.69 $ 10.73 $ 9.94 $ 10.77
======== ======== ======== ======== ======== ========
Total return ....................................... 7.72%(B) 6.03% 5.65% 14.84% (1.98%) 9.00%
======== ======== ======== ======== ======== ========
Net assets at end of period (000's) ................ $ 38,509 $ 36,653 $ 33,377 $ 35,272 $ 35,390 $ 43,272
======== ======== ======== ======== ======== ========
Ratio of net expenses to average net assets(A) ..... 0.65%(B) 0.65% 0.65% 0.60% 0.50% 0.50%
Ratio of net investment income to average net assets 5.72%(B) 5.88% 5.90% 6.21% 5.67% 5.95%
Portfolio turnover rate ............................ 47%(B) 46% 40% 39% 57% 29%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Absent fee waivers and/or expense reimbursements by the Adviser, the ratios
of expenses to average net assets would have been 1.04%(B) for the six
months ended May 31, 1998 and 1.07%, 1.09%, 1.09%, 1.06% and 1.11% for the
years ended November 30, 1997, 1996, 1995, 1994 and 1993, respectively
(Note 4).
(B) Annualized.
See accompanying notes to financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
BRUNDAGE, STORY AND ROSE INVESTMENT TRUST
EQUITY FUND
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------------------------
Per Share Data for a Share Outstanding Throughout Each Period
- -----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended
May 31, Year Ended November 30,
1998 ------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period ............. $ 19.40 $ 17.18 $ 14.91 $ 12.43 $ 12.70 $ 12.26
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income ........................... 0.02 0.06 0.06 0.07 0.06 0.09
Net realized and unrealized
gains on investments ......................... 1.84 3.65 2.97 3.02 0.11 0.76
-------- -------- -------- -------- -------- --------
Total from investment operations ................... 1.86 3.71 3.03 3.09 0.17 0.85
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ............ (0.02) (0.06) (0.07) (0.06) (0.06) (0.10)
Distributions from net realized gains ........... (1.94) (1.43) (0.69) (0.55) (0.38) (0.31)
-------- -------- -------- -------- -------- --------
Total distributions ................................ (1.96) (1.49) (0.76) (0.61) (0.44) (0.41)
-------- -------- -------- -------- -------- --------
Net asset value at end of period ................... $ 19.30 $ 19.40 $ 17.18 $ 14.91 $ 12.43 $ 12.70
======== ======== ======== ======== ======== ========
Total return ....................................... 21.79%(C) 23.98% 21.27% 26.08% 1.35% 6.83%
======== ======== ======== ======== ======== ========
Net assets at end of period (000's) ................ $ 40,044 $ 35,343 $ 27,540 $ 24,191 $ 18,821 $ 19,150
======== ======== ======== ======== ======== ========
Ratio of net expenses to average net assets(A) ..... 1.15%(C) 1.19% 1.30% 1.45% 1.50% 1.50%
Ratio of net investment income to average net assets 0.24%(C) 0.34% 0.42% 0.52% 0.51% 0.74%
Portfolio turnover rate ............................ 47%(C) 49% 44% 42% 44% 45%
Average commission rate per share(B) ............... $ 0.0501 $ 0.0499 $ 0.0490 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Absent fee waivers by the Adviser, the ratio of expenses to average net
assets would have been 1.58% for the year ended November 30, 1993.
(B) Beginning with the year ended November 30, 1996, the Fund is required to
disclose its average commission rate per share for security trades on which
commissions are charged.
(C) Annualized.
See accompanying notes to financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
BRUNDAGE, STORY AND ROSE INVESTMENT TRUST
SHORT/INTERMEDIATE TERM FIXED-INCOME FUND
PORTFOLIO OF INVESTMENTS
May 31, 1998 (Unaudited)
- ----------------------------------------------------------------------------------------------------
Par Market
Value INVESTMENT SECURITIES -- 96.4% Rate Maturity Value
- ----------------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 27.0%
<S> <C> <C> <C>
$ 1,400,000 U.S. Treasury Notes .............................. 6.625% 7/31/01 $ 1,441,563
300,000 U.S. Treasury Notes .............................. 5.875 11/30/01 302,625
1,500,000 U.S. Treasury Notes .............................. 6.625 3/31/02 1,552,032
1,200,000 U.S. Treasury Notes .............................. 5.750 8/15/03 1,208,626
1,750,000 U.S. Treasury Notes .............................. 7.500 2/15/05 1,930,469
1,000,000 U.S. Treasury Notes .............................. 6.500 8/15/05 1,050,000
1,200,000 U.S. Treasury Notes .............................. 7.000 7/15/06 1,302,000
800,000 U.S. Treasury Notes .............................. 6.500 10/15/06 843,250
750,000 U.S. Treasury Notes .............................. 6.125 8/15/07 774,141
- ------------ ------------
$ 9,900,000 TOTAL U.S. TREASURY OBLIGATIONS
- ------------ (Amortized Cost $10,230,222) ..................... $ 10,404,706
------------
U.S. GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES -- 23.9%
$ 59,725 FHLMC GOLD #N-90875 .............................. 7.500% 2/01/99 $ 60,283
5,385 GNMA #114468 ..................................... 9.500 7/15/99 5,503
391,064 FHLMC GOLD #G-50274 .............................. 7.500 6/01/00 395,053
8,886 FHLMC GNOME #200068 .............................. 8.000 3/01/02 9,051
30,628 FNMA DWARF #51935 ................................ 8.000 4/01/02 31,388
944,223 FNMA REMIC #93-52E ............................... 6.000 4/25/05 942,835
54,506 FHLMC GOLD #140094 ............................... 7.500 5/01/05 55,662
500,000 FHLMC REMIC #1404-D .............................. 6.800 1/15/06 507,428
67,106 FNMA DWARF #50480 ................................ 8.000 9/01/06 69,267
700,000 FNMA REMIC #92-24H ............................... 7.500 11/25/06 716,192
592,373 GNMA #362109 ..................................... 9.000 9/15/08 623,876
1,455,229 FHLMC REMIC #1523-PE ............................. 6.000 10/15/15 1,455,185
770,010 FNMA REMIC #93-20PE .............................. 5.900 5/25/16 767,369
836,465 HLMC REMIC #1522-C ............................... 6.000 8/15/16 836,523
1,000,000 FNMA REMIC #94-29PE .............................. 6.000 5/25/18 998,300
15,822 GNMA #285639 ..................................... 9.000 2/15/20 17,042
1,000,000 FHLMC REMIC #1699-C .............................. 6.200 2/15/24 1,003,160
704,430 FNMA REMIC #250322 ............................... 7.500 8/01/25 724,168
- ------------ ------------
$ 9,135,852 TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
- ------------ SECURITIES (Amortized Cost $9,102,565) ........... $ 9,218,285
------------
OTHER MORTGAGE-BACKED SECURITIES -- 4.4%
$ 388,754 Advanta Home Equity Loan Trust #92-1A ............ 7.875% 9/25/08 $ 399,970
1,000,000 CMC Securities Corp. III #94-B ................... 6.000 2/25/09 996,600
287,579 Bear Stearns Mortgage Securities, Inc. #96-3-A2 .. 7.240 6/25/27 286,871
- ------------ ------------
$ 1,676,333 TOTAL OTHER MORTGAGE-BACKED SECURITIES
(Amortized Cost $1,670,841)....................... $ 1,683,441
------------
9
<PAGE>
<CAPTION>
SHORT/INTERMEDIATE TERM FIXED-INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
- ----------------------------------------------------------------------------------------------------
Par Market
Value INVESTMENT SECURITIES -- 96.4% (Continued) Rate Maturity Value
- ----------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES -- 11.2%
<C> <C> <C> <C>
$ 1,000,000 Circuit City Credit Card Trust #94-2-A ........... 8.000% 11/15/99 $ 1,029,620
1,000,000 Banc One Credit Card Trust #94-C-A ............... 7.800 12/15/00 1,009,100
1,000,000 J.C. Penney Credit Card Trust #B-A ............... 8.950 10/15/01 1,041,739
1,225,000 First Bank Corporate Card Trust #97-1-A .......... 6.400 2/15/03 1,244,784
- ------------ ------------
$ 4,225,000 TOTAL ASSET-BACKED SECURITIES
- ------------ (Amortized Cost $4,280,767)....................... $ 4,325,243
------------
CORPORATE BONDS -- 29.9%
$ 210,000 Homeside Lending, Inc. ........................... 6.875% 5/15/00 $ 212,634
1,000,000 Lehman Brothers, Inc. ............................ 6.125 2/01/01 998,755
1,000,000 Ford Motor Credit Co. Medium Term Notes .......... 5.900 2/23/01 995,357
1,000,000 General Motors Acceptance Corp. .................. 6.000 2/01/02 996,568
1,000,000 Bear Stearns & Co., Inc. ......................... 6.125 2/01/03 998,012
1,000,000 Asia Development Bank ............................ 5.750 5/19/03 996,991
1,000,000 Sears Roebuck Acceptance Corp. Medium Term Notes . 6.760 6/25/03 1,020,002
1,000,000 Salomon Smith Barney Holdings, Inc. .............. 6.625 11/15/03 1,019,980
1,000,000 American Home Products Corp. ..................... 7.900 2/15/05 1,097,925
1,000,000 GTE Southwest, Inc. .............................. 6.230 1/01/07 998,971
1,000,000 U. S. West Capital Funding, Inc. ................. 7.300 1/15/07 1,073,499
1,000,000 Bank One Corp. ................................... 7.600 5/01/07 1,084,334
- ------------ ------------
$ 11,210,000 TOTAL CORPORATE BONDS (Amortized Cost $11,243,126) $ 11,493,028
- ------------ ------------
$ 36,147,185 TOTAL INVESTMENT SECURITIES (Amortized Cost $36,527,520) $ 37,124,703
- ------------ ------------
- ----------------------------------------------------------------------------------------------------
Face Market
Amount REPURCHASE AGREEMENTS(1) -- 2.5% Value
- ----------------------------------------------------------------------------------------------------
$ 965,000 Fifth Third Bank, 5.15%, dated 5/29/98,
- ------------ due 6/01/98, repurchase proceeds $965,414 $ 965,000
------------
$ 965,000 TOTAL REPURCHASE AGREEMENTS $ 965,000
- ------------ ------------
TOTAL INVESTMENT SECURITIES AND REPURCHASE AGREEMENTS-- 98.9% $ 38,089,703
OTHER ASSETS IN EXCESS OF LIABILITIES-- 1.1% 419,253
------------
NET ASSETS-- 100.0% $ 38,508,956
------------
</TABLE>
(1) Repurchase agreements are fully collateralized by U.S. Government
obligations.
FHLMC - Federal Home Loan Mortgage Corporation.
FNMA - Federal National Mortgage Association.
GNMA - Government National Mortgage Association.
DWARF - A 15-year mortgage pool issued by FNMA.
GNOME - A 15-year mortgage pool issued by FHLMC.
REMIC - Real Estate Mortgage Investment Conduit.
GOLD - A 30-year mortgage pool issued by FHLMC with a shorter coupon payment
delay period.
See accompanying notes to financial statements.
10
<PAGE>
BRUNDAGE, STORY AND ROSE INVESTMENT TRUST
EQUITY FUND
PORTFOLIO OF INVESTMENTS
May 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Market
COMMON STOCKS -- 94.7% Shares Value
- --------------------------------------------------------------------------------
CAPITAL GOODS -- 18.1%
AlliedSignal, Inc. ..................................... 18,500 $ 790,875
Avery Dennison Corp. ................................... 27,200 1,409,300
The Boeing Co. ......................................... 21,300 1,014,412
Illinois Tool Works, Inc. .............................. 9,400 620,400
Molex, Inc. - Class A .................................. 49,306 1,285,038
Thermo Electron Corp.* ................................. 32,200 1,131,025
USA Waste Services, Inc.* .............................. 21,500 1,014,531
------------
$ 7,265,581
------------
FINANCIALS -- 12.0%
American Express Co. ................................... 11,500 $ 1,180,187
American International Group, Inc. ..................... 7,525 931,689
Chubb Corp. ............................................ 15,400 1,225,263
Fannie Mae ............................................. 24,700 1,478,913
------------
$ 4,816,052
------------
TECHNOLOGY -- 11.7%
Applied Materials, Inc.* ............................... 17,000 $ 544,000
Compaq Computer Corp. .................................. 27,500 751,094
Electronic Data Systems Corp. .......................... 18,800 683,850
First Data Corp. ....................................... 27,500 914,375
Hewlett-Packard Co. .................................... 10,100 627,462
Intel Corp. ............................................ 6,000 428,625
Motorola, Inc. ......................................... 7,000 370,563
QUALCOMM, Inc.* ........................................ 7,000 364,875
Siebel Systems, Inc.* .................................. 68 1,547
------------
$ 4,686,391
------------
HEALTH CARE -- 9.4%
Abbott Laboratories .................................... 12,500 $ 927,344
American Home Products Corp. ........................... 17,400 840,637
Merck & Co., Inc. ...................................... 2,600 304,363
Schering-Plough Corp. .................................. 13,500 1,129,781
Smithkline Beecham PLC - ADR ........................... 10,500 565,031
------------
$ 3,767,156
------------
CONSUMER CYCLICALS -- 8.4%
AutoZone, Inc.* ........................................ 30,700 $ 1,020,775
Catalina Marketing Corp.* .............................. 14,000 633,500
H&R Block, Inc. ........................................ 20,600 906,400
Nike, Inc. - Class B ................................... 17,000 782,000
------------
$ 3,342,675
------------
11
<PAGE>
EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
- --------------------------------------------------------------------------------
Market
COMMON STOCKS -- 94.7% (Continued) Shares Value
- --------------------------------------------------------------------------------
CONSUMER STAPLES -- 8.0%
Colgate-Palmolive Co. .................................. 4,800 $ 417,600
McDonald's Corp. ....................................... 12,500 820,312
PepsiCo, Inc. .......................................... 17,300 706,056
Sysco Corp. ............................................ 30,000 699,375
The Walt Disney Co. .................................... 5,000 565,625
------------
$ 3,208,968
------------
BASIC MATERIALS -- 10.3%
Carpenter Technology Corp. ............................. 20,000 $ 1,060,000
duPont (E.I.) de Nemours & Co. ......................... 6,000 462,000
Ecolab, Inc. ........................................... 39,000 1,204,125
Monsanto Co. ........................................... 11,000 609,125
Sonoco Products Co. .................................... 11,220 391,999
Willamette Industries, Inc. ............................ 11,300 387,731
------------
$ 4,114,980
------------
ENERGY -- 6.6%
Apache Corp. ........................................... 16,700 $ 570,931
Exxon Corp. ............................................ 6,000 423,000
Mobil Corp. ............................................ 10,000 780,000
Noble Affiliates, Inc. ................................. 22,700 886,719
------------
$ 2,660,650
------------
COMMUNICATION SERVICES -- 5.4%
AirTouch Communications, Inc.* ......................... 25,400 $ 1,209,675
AT&T Corp. ............................................. 15,500 943,563
------------
$ 2,153,238
------------
UTILITIES -- 2.7%
Duke Energy Corp. ...................................... 18,590 $ 1,071,249
------------
TRANSPORTATION -- 2.1%
Landstar System, Inc.* ................................. 24,500 $ 828,406
------------
TOTAL COMMON STOCKS (Cost $25,497,713).................. $ 37,915,346
------------
- --------------------------------------------------------------------------------
Face Market
REPURCHASE AGREEMENTS(1) -- 4.7% Amount Value
- --------------------------------------------------------------------------------
Fifth Third Bank, 5.15%, dated 5/29/98, due 6/01/98,
repurchase proceeds $1,894,813...................... $ 1,894,000 $ 1,894,000
----------- ------------
TOTAL REPURCHASE AGREEMENTS......................... $ 1,894,000 $ 1,894,000
=========== ============
TOTAL COMMON STOCKS AND REPURCHASE AGREEMENTS-- 99.4%... $ 39,809,346
OTHER ASSETS IN EXCESS OF LIABILITIES-- 0.6%............ 234,314
------------
NET ASSETS-- 100.0%..................................... $ 40,043,660
============
* Non-income producing security.
(1) Repurchase agreements are fully collateralized by U.S. Government
obligations.
See accompanying notes to financial statements.
12
<PAGE>
BRUNDAGE, STORY AND ROSE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
May 31, 1988 (Unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION
Brundage, Story and Rose Investment Trust (the Trust) was organized as an Ohio
business trust on October 1, 1990. The Trust offers two series of shares to
investors: the Brundage, Story and Rose Short/Intermediate Term Fixed-Income
Fund and the Brundage, Story and Rose Equity Fund (collectively, the Funds). The
Trust commenced operations on December 3, 1990, when Brundage, Story and Rose,
llc (the Adviser) purchased the initial 5,000 shares of each Fund at $10 per
share. The public offering of shares commenced on January 2, 1991.
The Brundage, Story and Rose Short/Intermediate Term Fixed-Income Fund (the Bond
Fund) seeks to provide a higher and more stable level of income than a money
market fund with more principal stability than a mutual fund investing in
intermediate and long-term fixed-income securities. The Bond Fund invests
primarily in short and intermediate-term fixed-income securities.
The Brundage, Story and Rose Equity Fund (the Equity Fund) seeks to provide
protection and enhancement of capital. The Equity Fund invests primarily in
common stocks and securities convertible into common stock.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of the regular session of trading on the New York Stock Exchange
(currently 4:00 p.m., Eastern time). Portfolio securities listed on stock
exchanges and securities traded in the over-the-counter market are valued at the
last sale price as of the close of business on the day the securities are being
valued. Securities not traded on a particular day, or for which the last sale
price is not readily available, are valued at the closing bid price quoted by
brokers that make markets in the securities. U.S. Government and agency
obligations, asset-backed securities and corporate bonds are valued at their
most recent bid price as obtained from one or more of the major market makers
for such securities or are valued at an estimated fair value obtained from an
independent pricing service based upon such factors as maturity, coupon, issuer
and type of security. Securities for which market quotations are not readily
available are valued at fair value as determined in good faith in accordance
with consistently applied procedures established by and under the general
supervision of the Board of Trustees.
Repurchase agreements -- Repurchase agreements, which are collateralized by U.S.
Government obligations, are valued at cost which, together with accrued
interest, approximates market. Collateral for repurchase agreements is held in
safekeeping in the customer-only account of the Funds' custodian at the Federal
Reserve Bank. At the time each Fund enters into a repurchase agreement, the
seller agrees that the value of the underlying securities, including accrued
interest, will be equal to or exceed the face amount of the repurchase
agreement. Each Fund enters into repurchase agreements only with institutions
deemed to be creditworthy by the Adviser, including the Funds' custodian, banks
having assets in excess of $10 billion and primary U.S. Government securities
dealers.
Share valuation -- The net asset value of each Fund is calculated daily by
dividing the total value of that Fund's assets, less liabilities, by the number
of shares outstanding. The offering and redemption price per share of each Fund
are equal to the net asset value per share.
Investment income -- Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date. Discounts and premiums on securities purchased
are accreted/amortized in accordance with income tax regulations which
approximate generally accepted accounting principles.
Distributions to shareholders -- Dividends arising from net investment income
for the Bond Fund are declared daily and paid monthly. Dividends arising from
net investment income for the Equity Fund are declared and paid quarterly. With
respect to each Fund, net realized short-term capital gains, if any, may be
distributed throughout the year and net realized long-term capital gains, if
any, are distributed at least once each year. Income distributions and capital
gain distributions are determined in accordance with income tax regulations.
13
<PAGE>
Security transactions -- Security transactions are accounted for on the trade
date. Securities sold are valued on a specific identification basis.
Securities traded on a to-be-announced basis -- The Bond Fund periodically
trades portfolio securities on a "to-be-announced" (TBA) basis. In a TBA
transaction, the Fund has committed to purchase securities for which all
specific information is not yet known at the time of the trade, particularly the
face amount and maturity date in mortgage-backed and asset-backed securities
transactions. Securities purchased on a TBA basis are recorded on the trade
date, however, they are not settled until they are delivered to the Fund,
normally 15 to 45 days later. These transactions are subject to market
fluctuations and their current value is determined in the same manner as for
other portfolio securities. When effecting such transactions, assets of a dollar
amount sufficient to make payment for the portfolio securities to be purchased
are placed in a segregated account on the trade date.
Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code available to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so qualifies
and distributes at least 90% of its taxable net income, the Fund (but not the
shareholders) will be relieved of federal income tax on the income distributed.
Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
fiscal year ended November 30) plus undistributed amounts from prior years.
The following information is based upon federal income tax cost of portfolio
investments (excluding repurchase agreements) as of May 31, 1998:
- --------------------------------------------------------------------------------
Bond Equity
Fund Fund
- --------------------------------------------------------------------------------
Gross unrealized appreciation .......... $ 634,630 $ 13,012,554
Gross unrealized depreciation .......... (37,447) (594,921)
------------ ------------
Net unrealized appreciation ............ $ 597,183 $ 12,417,633
------------ ------------
Federal income tax cost ................ $ 36,527,520 $ 25,497,713
============ ============
- --------------------------------------------------------------------------------
As of November 30, 1997, the Bond Fund had capital loss carryforwards for
federal income tax purposes of $379,925, none of which expire prior to November
30, 2002. These capital loss carryforwards may be utilized in the current and
future years to offset net realized capital gains prior to distributing such
gains to shareholders.
3. INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investment securities, other
than short-term investments, amounted to $9,644,825 and $8,436,767,
respectively, for the Bond Fund and $8,705,131 and $8,525,796, respectively, for
the Equity Fund, during the six months ended May 31, 1998.
4. TRANSACTIONS WITH AFFILIATES
Certain Trustees and officers of the Trust are principals of the Adviser.
Certain officers of the Trust are officers of Countrywide Fund Services, Inc.
(CFS), the administrative services agent, shareholder servicing and transfer
agent, and accounting services agent for the Trust, and of CW Fund Distributors,
Inc., the exclusive underwriter of the Funds' shares.
As of May 31, 1998, the Adviser, principals of the Adviser and certain employee
benefit plans of the Adviser were, collectively, a significant shareholder of
record of each Fund.
14
<PAGE>
ADVISORY AGREEMENT
Each Fund's investments are managed by the Adviser pursuant to the terms of an
Advisory Agreement. Under the Advisory Agreement, the Bond Fund and the Equity
Fund each pay the Adviser a fee, computed and accrued daily and paid monthly, at
an annual rate of 0.50% and 0.65%, respectively, of average daily net assets. In
order to reduce the operating expenses of the Bond Fund, the Adviser voluntarily
waived $73,625 of its investment advisory fees during the six months ended May
31, 1998.
ADMINISTRATIVE SERVICES AGREEMENT
Under the terms of the Administrative Services Agreement with the Trust, CFS
supplies non-investment related statistical and research data, internal
regulatory compliance services and executive and administrative services for the
Funds. CFS supervises the preparation of tax returns, reports to shareholders of
the Funds, reports to and filings with the Securities and Exchange Commission
and state securities commissions, and materials for meetings of the Board of
Trustees. For these services, CFS receives a monthly fee based on each Fund's
average daily net assets.
TRANSFER AGENT AND SHAREHOLDER SERVICE AGREEMENT
Under the terms of the Transfer, Dividend Disbursing, Shareholder Service and
Plan Agency Agreement with the Trust, CFS maintains the records of each
shareholder's account, answers shareholders' inquiries concerning their
accounts, processes purchases and redemptions of each Fund's shares, acts as
dividend and distribution disbursing agent and performs other shareholder
service functions. For these services, CFS receives a monthly fee based on the
number of shareholder accounts in each Fund. In addition, each Fund pays
out-of-pocket expenses including, but not limited to, postage and supplies.
ACCOUNTING SERVICES AGREEMENT
Under the terms of the Accounting Services Agreement with the Trust, CFS
calculates the daily net asset value per share and maintains the financial books
and records of each Fund. For these services, CFS receives a monthly fee from
each Fund. In addition, each Fund pays certain out-of-pocket expenses incurred
by CFS in obtaining valuations of such Fund's portfolio securities.
PLAN OF DISTRIBUTION
The Trust has a plan of distribution (the Plan) under which each Fund may incur
or reimburse the Adviser for expenses related to the distribution and promotion
of capital shares. The annual limitation for payment of such expenses under the
Plan is 0.25% of the average daily net assets of each Fund.
5. CAPITAL SHARE TRANSACTIONS
Proceeds and payments on capital shares sold and redeemed as shown in the
Statements of Changes in Net Assets are the result of the following capital
share transactions for the periods ended May 31, 1998 and November 30, 1997.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Bond Fund Equity Fund
----------------------------- ---------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
May 31, 1998 November 30, May 31, 1998 November 30,
(Unaudited) 1997 (Unaudited) 1997
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold ............................... 242,025 651,578 123,347 226,359
Shares issued in reinvestment
of distributions to shareholders ....... 79,965 149,272 206,420 154,343
Shares redeemed ........................... (180,408) (494,784) (76,733) (161,988)
--------- --------- --------- ---------
Net increase in shares outstanding ........ 141,582 306,066 253,034 218,714
Shares outstanding, beginning of period ... 3,428,580 3,122,514 1,821,584 1,602,870
--------- --------- --------- ---------
Shares outstanding, end of period ......... 3,570,162 3,428,580 2,074,618 1,821,584
========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
BRUNDAGE,
STORY AND ROSE
INVESTMENT TRUST
- ------------------------------------
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202-4094
BOARD OF TRUSTEES
- ------------------------------------
Francis S. Branin, Jr.
Malcolm D. Clarke, Jr.
Cheryl L.Grandfield
Antoinette Geyelin Hoar
Jerome B. Lieber
William M.R. Mapel
James G. Pepper
Crosby R. Smith
Charles G. Watson
INVESTMENT ADVISER
- ------------------------------------
Brundage, Story and Rose, LLC
One Broadway
New York, New York 10004
UNDERWRITER
- ------------------------------------
CW Fund Distributors, Inc.
312 Walnut Street, 21st Floor
Cincinnati, Ohio 45202-4094
TRANSFER AGENT
- ------------------------------------
Countrywide Fund Services, Inc.
P.O. Box 5354
Cincinnati, Ohio 45201-5354
SHAREHOLDER SERVICES
- ------------------------------------
Nationwide: (Toll Free) 800-320-2212
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> EQUITY FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 27,391,713
<INVESTMENTS-AT-VALUE> 39,809,346
<RECEIVABLES> 856,272
<ASSETS-OTHER> 766
<OTHER-ITEMS-ASSETS> 12,818
<TOTAL-ASSETS> 40,679,202
<PAYABLE-FOR-SECURITIES> 569,387
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 66,155
<TOTAL-LIABILITIES> 635,542
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25,568,779
<SHARES-COMMON-STOCK> 2,074,618
<SHARES-COMMON-PRIOR> 1,821,584
<ACCUMULATED-NII-CURRENT> 9,508
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,047,740
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 12,417,633
<NET-ASSETS> 40,043,660
<DIVIDEND-INCOME> 214,801
<INTEREST-INCOME> 52,611
<OTHER-INCOME> 0
<EXPENSES-NET> 221,763
<NET-INVESTMENT-INCOME> 45,649
<REALIZED-GAINS-CURRENT> 2,047,740
<APPREC-INCREASE-CURRENT> 1,806,509
<NET-CHANGE-FROM-OPS> 3,899,898
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 49,509
<DISTRIBUTIONS-OF-GAINS> 3,535,218
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 123,347
<NUMBER-OF-SHARES-REDEEMED> 76,733
<SHARES-REINVESTED> 206,420
<NET-CHANGE-IN-ASSETS> 4,700,647
<ACCUMULATED-NII-PRIOR> 13,368
<ACCUMULATED-GAINS-PRIOR> 3,535,218
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 125,421
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 221,763
<AVERAGE-NET-ASSETS> 38,722,856
<PER-SHARE-NAV-BEGIN> 19.40
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 1.84
<PER-SHARE-DIVIDEND> .02
<PER-SHARE-DISTRIBUTIONS> 1.94
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 19.30
<EXPENSE-RATIO> 1.15
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> SHORT/INTERMEDIATE TERM FIXED-INCOME FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 37,492,520
<INVESTMENTS-AT-VALUE> 38,089,703
<RECEIVABLES> 479,684
<ASSETS-OTHER> 921
<OTHER-ITEMS-ASSETS> 13,735
<TOTAL-ASSETS> 38,584,043
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 75,087
<TOTAL-LIABILITIES> 75,087
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 38,085,778
<SHARES-COMMON-STOCK> 3,570,162
<SHARES-COMMON-PRIOR> 3,428,580
<ACCUMULATED-NII-CURRENT> 252
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (174,257)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 597,183
<NET-ASSETS> 38,508,956
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,197,812
<OTHER-INCOME> 0
<EXPENSES-NET> 122,125
<NET-INVESTMENT-INCOME> 1,075,687
<REALIZED-GAINS-CURRENT> 205,668
<APPREC-INCREASE-CURRENT> 126,599
<NET-CHANGE-FROM-OPS> 1,407,954
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,075,435
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 242,025
<NUMBER-OF-SHARES-REDEEMED> 180,408
<SHARES-REINVESTED> 79,965
<NET-CHANGE-IN-ASSETS> 1,856,139
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (379,925)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 93,942
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 195,750
<AVERAGE-NET-ASSETS> 37,690,360
<PER-SHARE-NAV-BEGIN> 10.69
<PER-SHARE-NII> .31
<PER-SHARE-GAIN-APPREC> .10
<PER-SHARE-DIVIDEND> .31
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.79
<EXPENSE-RATIO> .65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
