THE QUAKER FAMILY
OF MUTUAL FUNDS
August 1998
Dear Shareholder:
As of the close of June, 1998, we have completed the first full year of
investment activity within the Quaker Family of Funds. And what a year it
has been! The assets in the Quaker Funds have increased by more than five
times during the year to close the period at $26 million. Equity markets
rose dramatically over this 12 month period to reward investors with
substantial gains. Fixed income markets showed steady growth during this
period to reward investors with an attractive return with low risk.
QUAKER ENHANCED STOCK MARKET FUND
An investment in this Fund returned 28.3% over the 12 months ending in
June 1998. This is a broadly diversified portfolio of more than 150 stocks
identified by an eighty factor quantitative model from all industry
sectors. The S&P 500, which serves as the Fund's benchmark, rose 30.2%
over the same period. While the Fund performed well, it was unable to keep
pace with the index because of conservative underweighting in a number of
stocks that were bid up to very high P/E levels during the past 6 months.
QUAKER CORE EQUITY FUND
This Fund continued its emphasis on industry leading, investment grade
stocks during the year. Industry sectors that were favored included
consumer staples, health care, financial services and technology. The Fund
held positions in 67 companies at the end of June. Quaker Core Equity
gained 24.2% during the twelve months, falling somewhat short of the S&P
500 index. This result was influenced by very significant new investments
arriving in January, one of the most ebullient periods for the stock
market. Since it took several weeks to bring the assets to a fully
invested position, performance was negatively affected.
QUAKER AGGRESSIVE GROWTH FUND
The Quaker Aggressive Growth Fund has been pursuing returns with a
two-pronged portfolio strategy. At the end of June, the Fund was invested
in a combination of "special situation" stocks and larger capitalization
issues. The special situations in the Fund are spin-offs, corporate
restructurings and "tracking stocks" (entities holding a potential spin-off
operation). Larger cap stocks held by the Fund have strong earnings
momentum and reasonable valuations given their projected growth rates.
This Fund returned 26.7% over the past 12 months, in contrast with the S&P
500's return of 30.2%.
QUAKER MID-CAP VALUE FUND
The Quaker Mid-Cap Value Fund began investment activities in January
1998. This Fund focuses on companies with market capitalizations up to $6
billion. Stocks are selected by using value parameters, emphasizing strong
cash flow and improving fundamentals. There were some early successes,
with Money Store being acquired in short order by First Union, realizing a
100% return for the Fund. The best performing stock held by the
<PAGE>
Fund, Telespectrum Worldwide, is a restructuring/turnaround situation
which has already doubled in the Fund. Near term disappointments include
Ballard Medical and Cooper Tire. During its first 6 months of operations
ending in June, Quaker Mid-Cap Value has returned 9.2%. The relevant
index, the S&P 400 Mid-Cap, generated 8.0% during the same period.
QUAKER SMALL-CAP VALUE FUND
This Fund has been a particularly strong relative performer. This has
been achieved using a conservative value investment approach, while the
market has been responding very favorably to growth attributes. This Fund
is broadly diversified, with more than 180 stocks which are held in the
portfolio according to the industry weights of the Russell 2000 index. A
major contributor to the excess return of this Fund was the momentum of its
holdings. While value is the primary discipline, there is a search for
improving sentiment among security analysts and favorable price action.
The Fund's slightly larger capitalization size in relation to its benchmark
was favorable as well. Quaker Small-Cap Value returned 27.1% for the year
ending in June, while the Russell 2000 returned 16.6%. Since inception
(November 25, 1996) this Fund has generated a total return of 52.9% while
the Russell 2000 rose by 33.4%.
QUAKER FIXED INCOME FUND
In the 12 months ended June 1998, the Quaker Fixed Income Fund
generated a return of 10% for its investors. This Fund holds a high
quality portfolio of fixed income securities, including governments,
agencies, corporates and asset backed bonds. The return benefited from a
decline in bond yields during the period which caused the market value of
portfolio holdings to rise. The Salomon Broad Investment Grade Index
returned 10.6% during the same 12 month period.
WHAT LIES AHEAD?
Domestic equity markets have moved downward rather abruptly during late
July and early August. There is much speculation among analysts about the
depth and duration of this adjustment. To what extent will the financial
turmoil in the rest of the world witnessed during the past year become a
problem for United States markets? This immediate concern for the
direction of the market must be tempered by the proposition that serious
long term investors have goals measured in years and decades and to
appreciate that we have been generously rewarded in the recent past.
This is a good time to review financial strategies to focus on asset
allocation among investment styles and capitalization sizes and to make
necessary adjustments. Also consider utilizing fixed income exposure and
cash positions to dampen volatility as events unfold.
Sincerely,
/S/PETER F. WAITNEIGHT
Peter F. Waitneight
Chairman
ii
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
PERFORMANCE UPDATE -- $1,000 INVESTMENT
FOR THE PERIOD FROM NOVEMBER 25, 1996
(COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1998
[ID -- PLOT POINTS FOR GRAPH]
Quaker Enhanced
---------------
11/25/96 $1,000 $1,000
12/31/96 1,016 981
3/31/97 1,021 1,007
6/30/97 1,190 1,183
9/30/97 1,292 1,271
12/31/97 1,323 1,308
3/31/98 1,484 1,490
6/30/98 1,528 1,539
|----------------------------|
| TOTAL RETURN |
|----------------------------|
| Commencement of operations |
| through 6/30/98 |
|----------------------------|
| 52.76% |
|----------------------------|
This graph depicts the performance of the Quaker Enhanced Stock Market
Fund versus the S&P 500 Total Return Index. It is important to note that
the Quaker Enhanced Stock Market Fund is a professionally managed mutual
fund while the indexes are not available for investment and are unmanaged.
The comparison is shown for illustrative purposes only.
o The graph assumes an initial $1,000 investment at November 25, 1996.
All dividends and distributions are reinvested.
o At June 30, 1998, the Fund would have grown to $1,528 -- total
investment return of 52.76% since November 25, 1996.
o At June 30, 1998, a similar investment in the S&P 500 Total Return
Index would have grown to $1,539 -- total investment return of 53.94% since
November 25, 1996.
o Past performance is not a guarantee of future performance. A mutual
fund's share price and investment return will vary with market conditions,
and the principal value of shares, when redeemed, may be worth more or less
than the original cost.
1
<PAGE>
QUAKER CORE EQUITY FUND
PERFORMANCE UPDATE -- $1,000 INVESTMENT
FOR THE PERIOD FROM NOVEMBER 25, 1996
(COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1998
[ID -- PLOT POINTS FOR GRAPH]
Quaker Core Equity S&P 500 Index
------------------ -------------
11/25/96 $1,000 $1,000
12/31/96 980 981
3/31/97 983 1,007
6/30/97 1,165 1,183
9/30/97 1,262 1,271
12/31/97 1,270 1,308
3/31/98 1,412 1,490
6/30/98 1,447 1,539
|----------------------------|
| TOTAL RETURN |
|----------------------------|
| Commencement of operations |
| through 6/30/98 |
|----------------------------|
| 44.70% |
|----------------------------|
This graph depicts the performance of the Quaker Core Equity Fund
versus the S&P 500 Total Return Index. It is important to note that the
Quaker Core Equity Fund is a professionally managed mutual fund while the
indexes are not available for investment and are unmanaged. The comparison
is shown for illustrative purposes only.
o The graph assumes an initial $1,000 investment at November 25, 1996.
All dividends and distributions are reinvested.
o At June 30, 1998, the Fund would have grown to $1,447 -- total
investment return of 44.70% since November 25, 1996.
o At June 30, 1998, a similar investment in the S&P 500 Total Return
Index would have grown to $1,539 -- total investment return of 53.94% since
November 25, 1996.
o Past performance is not a guarantee of future performance. A mutual
fund's share price and investment return will vary with market conditions,
and the principal value of shares, when redeemed, may be worth more or less
than the original cost.
2
<PAGE>
QUAKER AGGRESSIVE GROWTH FUND
PERFORMANCE UPDATE -- $1,000 INVESTMENT
FOR THE PERIOD FROM NOVEMBER 25, 1996
(COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1998
[ID -- PLOT POINTS FOR GRAPH]
Quaker Aggressive S&P 500 Index
----------------- -------------
11/25/96 $1,000 $1,000
12/31/96 1,034 981
3/31/97 1,045 1,007
6/30/97 1,127 1,183
9/30/97 1,307 1,271
12/31/97 1,244 1,308
3/31/98 1,408 1,490
6/30/98 1,427 1,539
|----------------------------|
| TOTAL RETURN |
|----------------------------|
| Commencement of operations |
| through 6/30/98 |
|----------------------------|
| 42.73% |
|----------------------------|
This graph depicts the performance of the Quaker Aggressive Growth Fund
versus the S&P 500 Total Return Index. It is important to note that the
Quaker Aggressive Growth Fund is a professionally managed mutual fund while
the indexes are not available for investment and are unmanaged. The
comparison is shown for illustrative purposes only.
o The graph assumes an initial $1,000 investment at November 25, 1996.
All dividends and distributions are reinvested.
o At June 30, 1998, the Fund would have grown to $1,427 -- total
investment return of 42.73% since November 25, 1996.
o At June 30, 1998, a similar investment in the S&P 500 Total Return
Index would have grown to $1,539 -- total investment return of 53.94% since
November 25, 1996.
o Past performance is not a guarantee of future performance. A mutual
fund's share price and investment return will vary with market conditions,
and the principal value of shares, when redeemed, may be worth more or less
than the original cost.
3
<PAGE>
QUAKER MID-CAP VALUE FUND
PERFORMANCE UPDATE -- $1,000 INVESTMENT
FOR THE PERIOD FROM JANUARY 6, 1998
(COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1998
[ID -- PLOT POINTS FOR GRAPH]
Quaker Mid-Cap S&P 400 Mid-Cap Index
----------------- ----------------------
1/ 6/98 $1,000 $1,000
1/31/98 1,002 980
2/28/98 1,062 1,060
3/31/98 1,117 1,107
4/30/98 1,141 1,126
5/31/98 1,097 1,074
6/30/98 1,092 1,080
|----------------------------|
| TOTAL RETURN |
|----------------------------|
| Commencement of operations |
| through 6/30/98 |
|----------------------------|
| 9.20% |
|----------------------------|
This graph depicts the performance of the Quaker Mid-Cap Value Fund
versus the S&P 400 Mid-Cap Index. It is important to note that the Quaker
Mid-Cap Value Fund is a professionally managed mutual fund while the
indexes are not available for investment and are unmanaged. The comparison
is shown for illustrative purposes only.
o The graph assumes an initial $1,000 investment at January 6, 1998.
All dividends and distributions are reinvested.
o At June 30, 1998, the Fund would have grown to $1,092 -- total
investment return of 9.20% since January 6, 1998.
o At June 30, 1998, a similar investment in the S&P 400 Mid-Cap Index
would have grown to $1,080 -- total investment return of 8.01% since
January 6, 1998.
o Past performance is not a guarantee of future performance. A mutual
fund's share price and investment return will vary with market conditions,
and the principal value of shares, when redeemed, may be worth more or less
than the original cost.
4
<PAGE>
QUAKER SMALL-CAP VALUE FUND
PERFORMANCE UPDATE -- $1,000 INVESTMENT
FOR THE PERIOD FROM NOVEMBER 25, 1996
(COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1998
[ID -- PLOT POINTS FOR GRAPH]
Quaker Small Cap Russell 2000 Index
----------------- ------------------
11/25/96 $1,000 $1,000
12/31/96 996 1,038
3/31/97 1,002 985
6/30/97 1,203 1,144
9/30/97 1,422 1,314
12/31/97 1,409 1,269
3/31/98 1,569 1,400
6/30/98 1,529 1,333
|----------------------------|
| TOTAL RETURN |
|----------------------------|
| Commencement of operations |
| through 6/30/98 |
|----------------------------|
| 52.89% |
|----------------------------|
This graph depicts the performance of the Quaker Small-Cap Value Fund
versus the Russell 2000 Index. It is important to note that the Quaker
Small-Cap Value Fund is a professionally managed mutual fund while the
indexes are not available for investment and are unmanaged. The
comparison is shown for illustrative purposes only.
o The graph assumes an initial $1,000 investment at November 25, 1996.
All dividends and distributions are reinvested.
o At June 30, 1998, the Fund would have grown to $1,529 -- total
investment return of 52.89% since November 25, 1996.
o At June 30, 1998, a similar investment in the Russell 2000 Index
would have grown to $1,333 -- total investment return of 33.34% since
November 25, 1996.
o Past performance is not a guarantee of future performance. A mutual
fund's share price and investment return will vary with market conditions,
and the principal value of shares, when redeemed, may be worth more or less
than the original cost.
5
<PAGE>
QUAKER FIXED INCOME FUND
PERFORMANCE UPDATE -- $1,000 INVESTMENT
FOR THE PERIOD FROM NOVEMBER 25, 1996
(COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1998
[ID -- PLOT POINTS FOR GRAPH]
Quaker Fixed Salomon BIG Index
----------------- ------------------
11/25/96 $1,000 $1,000
12/31/96 996 995
3/31/97 985 990
6/30/97 1,016 1,026
9/30/97 1,049 1,061
12/31/97 1,077 1,091
3/31/98 1,091 1,109
6/30/98 1,117 1,135
|----------------------------|
| TOTAL RETURN |
|----------------------------|
| Commencement of operations |
| through 6/30/98 |
|----------------------------|
| 11.69% |
|----------------------------|
This graph depicts the performance of the Quaker Fixed Income Fund
versus the Salomon Brothers Broad Investment-Grade Index. It is
important to note that the Quaker Fixed Income Fund is a professionally
managed mutual fund while the indexes are not available for investment
and are unmanaged. The comparison is shown for illustrative purposes
only.
o The graph assumes an initial $1,000 investment at November 25, 1996.
All dividends and distributions are reinvested.
o At June 30, 1998, the Fund would have grown to $1,117 -- total
investment return of 11.69% since November 25, 1996.
o At June 30, 1998, a similar investment in the Salomon Brothers Broad
Investment-Grade Index would have grown to $1,135 -- total investment
return of 13.46% since November 25, 1996.
o Past performance is not a guarantee of future performance. A mutual
fund's share price and investment return will vary with market conditions,
and the principal value of shares, when redeemed, may be worth more or less
than the original cost.
6
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- 95.99%
ADVERTISING -- 1.32%
Gannett Inc. Company 200 $ 14,213
Tribune Company 100 6,881
-----------
21,094
-----------
AEROSPACE & DEFENSE -- 2.22%
Allied Signal Inc. 400 17,750
General Dynamics Corp. 100 4,650
Parker Hannifin Corp. 100 3,813
United Technologies Corp. 100 9,250
-----------
35,463
-----------
AGRICULTURE -- 1.32%
Deere & Company 400 21,150
-----------
AIRCRAFT PARTS & AUXILIARY EQUIPMENT -- 0.24%
Teleflex Inc. 100 3,800
-----------
AIR TRANSPORTATION, SCHEDULED -- 1.23%
(a) America West Holdings Corp. CL B 100 2,856
Comair Holdings Inc. 100 3,088
SouthWest Airlines Company 200 5,925
UAL Corp. 100 7,800
-----------
19,669
-----------
APPAREL & FABRICS -- 0.35%
Burlington Industries Inc. New 400 5,625
-----------
AUTO CONTROLS -- 0.52%
Honeywell Inc. 100 8,356
-----------
AUTO & TRUCKS -- 1.20%
Ford Motor Company 100 5,900
General Motors Corp. 200 13,363
-----------
19,263
-----------
BAKERY PRODUCTS -- 0.41%
Interstate Bakeries Corp. New 200 6,638
-----------
BEVERAGES -- 2.39%
Coca-Cola Company 400 34,200
Coca-Cola Enterprises Inc. 100 3,925
-----------
38,125
-----------
7
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
BIOLOGICAL PRODUCTS -- 0.82%
(a) Amgen Inc. 200 $ 13,075
-----------
BUILDING MATERIALS -- 0.67%
Vulcan Materials Company 100 10,669
-----------
CABLE & OTHER PAY TELEVISION SERVICES -- 0.24%
(a) Tele-Communications, Inc. Ser A TCI Group 100 3,844
-----------
COMMERCIAL SERVICES -- 0.17%
Ogden Corp. 100 2,769
-----------
COMPUTERS -- 2.56%
(a) Dell Computer Corp. 100 9,281
International Business Machines Inc. 200 22,963
(a) Storage Technology Corp. Par $.10 200 8,675
-----------
40,919
-----------
COMPUTER PERIPHERAL EQUIPMENT -- 0.24%
Symbol Technologies, Inc. 100 3,775
-----------
COMPUTER SOFTWARE & SERVICES -- 2.03%
(a) Microsoft Corp. 300 32,513
-----------
CONSTRUCTION MACHINERY & EQUIPMENT -- 0.72%
Sunstrand Corp. 200 11,450
-----------
CONVERTED PAPER & PAPERBOARD PRODUCTS -- 0.85%
Avery Dennison Corp. 100 5,375
Minnesota Mining and Manufacturing Company 100 8,219
-----------
13,594
-----------
ELECTRIC & OTHER SERVICES COMBINED -- 0.18%
Nipsco Industries Inc. 100 2,800
-----------
ELECTRIC SERVICES -- 0.81%
DTE Energy Company 100 4,038
Ipalco Enterprises Inc. 200 8,888
-----------
12,925
-----------
ELECTRONICS -- 2.28%
General Electric Company 400 36,400
-----------
ELECTRONIC COMPUTERS -- 0.33%
Tandy Corp. 100 5,306
-----------
8
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
ELECTRONICS - SEMICONDUCTOR -- 0.46%
Intel Corp. 100 $ 7,413
-----------
ENTERTAINMENT -- 0.48%
(a) King World Productions, TNS Inc. 300 7,650
-----------
FABRICATED RUBBER PRODUCTS -- 0.27%
Carlisle Companies 100 4,306
-----------
FINANCIAL - BANKS, MONEY CENTER -- 3.35%
Chase Manhattan Corp. New 200 15,100
Comerica, Inc. 200 13,250
First Chicago NBD Corp. 200 17,725
Norwest Corp. 200 7,475
-----------
53,550
-----------
FINANCIAL - SAVINGS/LOANS/THRIFT -- 1.66%
First Federal Financial Corp. 100 5,200
Golden West Financial Corp. 200 21,263
-----------
26,463
-----------
FINANCIAL - SECURITIES BROKERS -- 4.01%
Bear Stearns Companies Inc. 300 17,063
Donaldson, Lufkin & Jenrette, Inc. New 300 15,244
Merrill Lynch & Co. Inc. 100 9,225
Morgan Stanley, Dean Witter, Discover and Co. New 200 18,275
Paine Webber Group Inc. 100 4,288
-----------
64,094
-----------
FINANCIAL SERVICES -- 2.71%
American Express Company 100 11,400
Comdisco, Inc. 400 7,600
Federal National Mortgage Assoc. 400 24,300
-----------
43,300
-----------
FIRE, MARINE & CASUALTY INSURANCE -- 0.40%
Mercury General Corp. New 100 6,444
-----------
FOOD AND KINDRED PRODUCTS -- 0.28%
Universal Foods Corp. 200 4,438
-----------
FOOD - WHOLESALE -- 0.83%
Supervalu Inc. 300 13,313
-----------
9
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
GAS - DISTRIBUTION -- 0.25%
Nicor Inc. 100 $ 4,013
-----------
GENERAL BUILDING CONTRACTORS -- 0.84%
Armstrong World Industries Inc. 200 13,475
-----------
GRAIN MILLS PRODUCTS -- 0.47%
Kellogg Co. 200 7,513
-----------
GREETING CARDS -- 0.34%
Knight-Ridder, Inc. 100 5,506
-----------
HOMEBUILDERS -- 0.71%
Centex Corp. 300 11,325
-----------
HOUSEHOLD FURNITURE -- 0.18%
(a) Furniture Brands Int'l Inc. 100 2,806
-----------
HOUSEHOLD PRODUCTS & HOUSEWARES -- 0.62%
Maytag Corp. 200 9,875
-----------
INDUSTRIAL INORGANIC CHEMICALS -- 0.79%
Air Products & Chem Inc. 200 8,000
Georgia Gulf Corp. New 200 4,563
-----------
12,563
-----------
INSURANCE AGENTS, BROKERS & SERVICES -- 0.37%
Ambac Financial Group, Inc. 100 5,850
-----------
INSURANCE CARRIERS -- 0.22%
Horace Mann Educators Corp. New 100 3,450
-----------
INSURANCE - LIFE & HEALTH -- 1.08%
Jefferson-Pilot 200 11,588
SunAmerica, Inc. 100 5,744
-----------
17,331
-----------
INSURANCE - MULTILINE -- 3.47%
Allstate Corp. 300 27,469
American International Group, Inc. 100 14,600
Old Republic International Corp. 300 8,794
Torchmark Corp. 100 4,575
-----------
55,438
-----------
10
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
LIFE INSURANCE -- 1.13%
Equitable Cos. Inc. 100 $ 7,494
Protective Life Corp. 100 3,669
Provident Cos. Inc. 200 6,900
-----------
18,063
-----------
MACHINE - CONSTRUCTION & MINING -- 0.99%
Caterpillar Inc. 300 15,863
-----------
MACHINE - DIVERSIFIED -- 1.85%
Aeroquip-Vickers Inc. 200 11,675
Cooper Industries, Inc. 200 10,988
Dover Corp. 200 6,850
-----------
29,513
-----------
MALT BEVERAGES -- 1.18%
Anheuser-Busch Co. Inc. 400 18,875
-----------
MISCELLANEOUS - DISTRIBUTION & WHOLESALE -- 0.49%
Unilever NV New York SHS ADR 100 7,894
-----------
MISCELLANEOUS - MANUFACTURING -- 0.32%
National Service Industries, Inc. 100 5,088
-----------
MORTGAGE BANKERS & CORRESPONDENTS -- 0.29%
Federal Home Loan Mtg. Corp. 100 4,706
-----------
MOTORCYCLES, BICYCLES, & PARTS -- 0.24%
Harley Davidson Inc. 100 3,875
-----------
MOTOR HOMES -- 0.25%
Fleetwood Enterprises Inc. 100 4,000
-----------
MOTOR VEHICLES & CARS BODIES -- 0.33%
Paccar Inc. 100 5,225
-----------
NATIONAL COMMERCIAL BANKS -- 3.35%
Bank America Corp. 100 8,644
First Tennessee Natl. Corp. 100 3,156
Mellon Bank Corp. 100 6,963
PNC Bank Corp. 100 5,381
Regions Financial Corp. 100 4,106
Republic New York Corp. 200 12,588
Star Banc Corp. 200 12,775
-----------
53,613
-----------
11
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
NATURAL GAS TRANSMISSION -- 0.68%
Costal Corp. 100 $ 6,981
El Paso Natural Gas Company New 100 3,825
-----------
10,806
-----------
NEWSPAPER: PUBLISHING OR PRINTING -- 3.62%
Washington Post Co. Cl B 100 57,900
-----------
OFFICE & BUSINESS EQUIPMENT -- 0.90%
Pitney-Bowes, Inc. 300 14,438
-----------
OIL & GAS - EXPLORATION -- 0.96%
Mobil Corp. 200 15,325
-----------
OIL & GAS - INTERNATIONAL -- 0.89%
Exxon Corp. 200 14,263
-----------
OPERATIVE BUILDERS -- 0.37%
Pulte Corp. 200 5,975
-----------
PAINTS, VARNISHES, LACQUERS, ENAMELS -- 0.87%
PPG Industries, Inc. 200 13,913
-----------
PAPER MILLS -- 0.24%
Chesapeake Corp. of Virginia 100 3,894
-----------
PHARMACEUTICALS -- 4.36%
Bristol-Myers Squibb Company 200 22,988
Merck & Co., Inc. 200 26,750
Pfizer Inc. 100 10,869
Schering-Plough Corp. 100 9,163
-----------
69,769
-----------
PHARMACEUTICAL PREPARATION -- 0.95%
Abbott Labs 200 8,175
Warner Lambert Company 100 6,938
-----------
15,113
-----------
PLASTICS, MATERIALS, SYNTHETIC RESINS -- 1.30%
Rohm & Haas Company 200 20,788
-----------
PLASTICS PRODUCTS -- 0.42%
Illinois Tool Works Inc. 100 6,669
-----------
12
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
PUMPS & PUMPING EQUIPMENT -- 0.23%
General Signal Corp. 100 $ 3,600
-----------
RADIO & TV BROADCASTING EQUIPMENT -- 0.84%
Harris Corp. 300 13,406
-----------
RAILROADS, LINE - HAUL OPERATING -- 1.02%
Canadian Pacific Ltd. New 400 11,350
Kansas City Southern Industries Company 100 4,963
-----------
16,313
-----------
REFUSE SYSTEMS -- 0.31%
USA Waste Services Inc. 100 4,938
-----------
RETAIL - APPAREL -- 0.95%
TJX Companies, Inc. New 200 4,825
VF Corp. 200 10,300
-----------
15,125
-----------
RETAIL - DEPARTMENT STORES -- 2.46%
Dayton Hudson Corp. 200 9,700
Wal-Mart Stores, Inc. 400 24,300
Federated Department Stores, Inc. 100 5,381
-----------
39,381
-----------
RETAIL - DRUG STORES & PROPRIETARY -- 0.26%
Walgreen Company 100 4,131
-----------
RETAIL - FAMILY CLOTHING STORES -- 0.77%
Gap Inc. 200 12,325
-----------
RETAIL - LUMBER & BUILDING MATERIALS DEALERS -- 0.51%
Lowe's Companies Inc. 200 8,113
-----------
RETAIL - WOMEN'S CLOTHING STORES -- 0.41%
Limited, Inc. 200 6,625
-----------
SAVINGS INSTITUTION, FEDERALLY CHARTERED -- 0.47%
Greenpoint Financial Corp. 200 7,525
-----------
SECURITY BROKERS, DEALERS & FLOTATION COS. -- 0.27%
Edwards (A.G.) Inc. 100 4,269
-----------
13
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
SEMICONDUCTORS & RELATED DEVICES -- 0.60%
Rockwell Int'l Corp. New 200 $ 9,613
-----------
SERVICES - HEALTH SERVICES -- 0.59%
Cardinal Health Inc. 100 9,375
-----------
SERVICES - MISCELLANEOUS BUSINESS SERVICES -- 0.48%
Servicemaster Company 200 7,613
-----------
SOAP DETERGENT, CLEANING
PREPARATIONS, PERFUMES -- 2.08%
Colgate Palmolive Co. 100 8,800
Ecolab Inc. 200 6,200
Procter & Gamble Co. 200 18,213
-----------
33,213
-----------
STATE COMMERCIAL BANKS -- 2.92%
Amsouth Bancorp 200 7,863
Bank of New York Co. Inc. 300 18,206
Southtrust Corp. 100 4,350
Suntrust Banks, Inc. 200 16,263
-----------
46,681
-----------
STEEL WORKS, BLAST FURNACES & ROLLING MILLS -- 0.33%
Texas Industries, Inc. New 100 5,300
-----------
SUGAR & CONFECTIONERY PRODUCTS -- 0.86%
Hershey Foods Corp. 200 13,800
-----------
SURETY INSURANCE -- 0.36%
MGIC Investment Corp. Wis 100 5,706
-----------
TELECOMMUNICATIONS -- 0.29%
Alltel Corporation 100 4,650
-----------
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE) -- 0.54%
Century Telephone Enterprises Inc. 100 4,588
SBC Communications Inc. 100 4,000
-----------
8,588
-----------
TELEPHONE - LONG DISTANCE -- 0.36%
AT&T Corporation 100 5,713
-----------
TRANSPORTATION - RAIL -- 0.61%
Burlington Northern Santa Fe Corporation 100 9,819
-----------
14
<PAGE>
QUAKER ENHANCED STOCK MARKET FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
UTILITIES - TELECOMMUNICATIONS -- 3.78%
Ameritech Corporation 400 $ 17,950
BellSouth Corporation 300 20,138
GTE Corporation 400 22,250
-----------
60,338
-----------
WATER SUPPLY -- 0.19%
American Water Works Co. Inc. 100 3,100
-----------
WHOLESALE - DURABLE GOODS - 0.31%
Grainger, W.W. Inc. 100 4,981
-----------
WHOLESALE - GROCERIES & RELATED PRODUCTS -- 0.32%
Sysco Corporation 200 5,125
-----------
TOTAL COMMON STOCKS (COST $1,413,526) 1,534,256
-----------
INVESTMENT COMPANIES -- 2.42%
Evergreen Money Market Treasury
Institutional Money 38,666
-----------
TOTAL INVESTMENT COMPANIES (COST $38,666) 38,666
-----------
TOTAL VALUE OF INVESTMENTS (COST $1,452,192 (b)) 98.41% $ 1,572,922
Other Assets Less Liabilities 1.59% 25,612
------- -----------
NET ASSETS 100.00% $ 1,598,534
======= ===========
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and federal income tax purposes is
the same. Unrealized appreciation of investments for financial reporting
and federal income tax purposes is as follows:
Unrealized appreciation $ 141,847
Unrealized depreciation (21,117)
-----------
NET UNREALIZED APPRECIATION $ 120,730
===========
See notes to financial statements.
15
<PAGE>
QUAKER CORE EQUITY FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- 98.71%
AEROSPACE & DEFENSE -- 4.25%
Allied Signal, Inc. 1,500 $ 66,563
The Boeing Company 1,400 62,388
Lockheed Martin Corporation 700 74,113
-----------
203,064
-----------
BEVERAGES -- 1.29%
PepsiCo, Inc. 1,500 61,781
-----------
BUSINESS SERVICES -- 2.56%
Electronic Data Systems Corporation 1,000 40,000
Reuters Group PLC 1,200 82,200
-----------
122,200
-----------
COMPUTERS -- 5.62%
Compaq Computer Corporation 2,000 56,750
Hewlett-Packard Company 2,000 119,750
International Business Machines, Inc. 800 91,850
-----------
268,350
-----------
COMPUTER SOFTWARE & HARDWARE -- 8.10%
Automatic Data Processing, Inc. 1,000 72,875
Ceridian Corporation 900 52,875
(a) Cisco Systems, Inc. 800 73,650
Computer Associates International, Inc. 1,500 83,344
(a) Safeguard Scientifics, Inc. 2,500 104,219
-----------
386,963
-----------
CONSUMER STAPLES -- 0.42%
(a) Vlasic Foods International, Inc. 1,000 20,125
-----------
CONTROLLED ENVIRONMENTS -- 0.35%
Honeywell Inc. 200 16,713
-----------
COSMETICS & PERSONAL CARE -- 6.72%
Colgate-Palmolive Company 1,300 114,400
Gillette Corporation 2,200 124,713
Procter & Gamble Company 900 81,956
-----------
321,069
-----------
ELECTRONICS -- 1.33%
General Electric Company 700 63,700
-----------
16
<PAGE>
QUAKER CORE EQUITY FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
ELECTRONICS - SEMICONDUCTORS -- 1.79%
Intel Corporation 800 $ 59,300
Motorola, Inc. 500 26,281
-----------
85,581
-----------
ENERGY -- 1.15%
Royal Dutch Petroleum Company 1,000 54,813
-----------
ENTERTAINMENT -- 3.07%
Time Warner Inc. 1,100 93,981
The Walt Disney Company 500 52,530
-----------
146,511
-----------
FINANCIAL SERVICES -- 5.37%
Franklin Resources, Inc. 1,200 64,800
Federal National Mortgage Association 1,200 72,900
Morgan Stanley, Dean Witter, Discover & Company 1,300 118,788
-----------
256,488
-----------
FINANCIAL - BANKS, MONEY CENTER -- 7.60%
J.P. Morgan & Company Inc. 500 58,563
Mellon Bank Corporation 2,500 174,063
Nations Bank Corporation 1,000 76,500
PNC Bank Corporation 1,000 53,813
-----------
362,939
-----------
FINANCIAL - SECURITY BROKERS -- 2.05%
SLM Holdings Corporation 2,000 98,000
-----------
FOOD - PROCESSING -- 4.88%
Campbell Soup Company 500 26,563
Heinz (H.J.) Company 1,500 84,188
Hershey Foods Corporation 1,200 82,800
Phillip Morris Companies Inc. 1,000 39,375
-----------
232,926
-----------
INSURANCE - LIFE & HEALTH -- 1.27%
AFLAC, Inc. 2,000 60,625
-----------
INSURANCE - MULTILINE -- 3.70%
American International Group, Inc. 500 73,000
Cigna Corporation 1,500 103,500
-----------
176,500
-----------
17
<PAGE>
QUAKER CORE EQUITY FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
MEDICAL SUPPLIES -- 2.32%
Johnson & Johnson 1,500 $ 110,625
-----------
MEDICAL - BIOTECHNOLOGY -- 6.26%
Merck & Company, Inc. 900 120,375
Pfizer Inc. 800 86,950
Schering-Plough Corporation 1,000 91,625
-----------
298,950
-----------
METALWORKING - MACHINERY & EQUIPMENT -- 0.79%
Kennametal Inc. 900 37,575
-----------
MINING -- 3.65%
Potash Corporation of Saskatachewan Inc. 1,600 120,900
Vulcan Materials Company 500 53,344
-----------
174,244
-----------
OFFICE & BUSINESS EQUIPMENT -- 2.10%
Xerox Corporation 700 71,138
(a) Staples, Inc. 1,000 28,938
-----------
100,076
-----------
OIL & GAS - EQUIPMENT & SERVICES -- 1.43%
Schlumberger Limited 1,000 68,312
-----------
OIL & GAS - EXPLORATION -- 1.12%
El Paso Natural Gas Company 1,400 53,550
-----------
OIL & GAS - INTERNATIONAL -- 1.19%
Exxon Corporation 800 57,050
-----------
PAPERBOARD PRODUCTS -- 1.20%
Minnesota Mining & Manufacturing 700 57,530
-----------
PAINTS, VARNISHES, LACQUERS,
ENAMELS & PRODUCTS -- 0.55%
Sherwin Williams Company 800 26,500
-----------
PLASTICS - SYNTHETICS -- 1.56%
DuPont De Nemours & Company 1,000 74,625
-----------
PHARMACEUTICAL PREPARATIONS -- 3.75%
Bristol-Myers Squibb Company 1,000 114,938
(a) Elan Corporation PLC 1,000 64,312
-----------
179,250
-----------
18
<PAGE>
QUAKER CORE EQUITY FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
PUBLISHING -- 0.57%
E.W. Scripps Company Class (A) 500 $ 27,405
-----------
RAILROADS - LINE HAULING -- 0.52%
Kansas City Southern Industries Company 500 24,812
-----------
RESTAURANTS FOOD & SERVICE -- 3.16%
McDonald's Corporation 1,500 103,500
(a) Tricon Global Restaurants, Inc. 1,500 47,530
-----------
151,030
-----------
SUGAR & CONFECTIONERY PRODUCTS -- 2.05%
W.M. Wrigley Jr. Company 1,000 98,000
-----------
TECHNOLOGY -- 0.07%
Docucorp International, Inc. 500 3,281
-----------
TELECOMMUNICATIONS EQUIPMENT -- 4.58%
Bell Atlantic Corporation 1,000 45,625
Lucent Technologies, Inc. 1,400 116,462
Northern Telecom Limited 1,000 56,750
-----------
218,837
-----------
WATER SUPPLY -- 0.33%
American Water Works Company, Inc. 500 15,500
-----------
TOTAL COMMON STOCKS (Cost $3,984,653) 4,715,500
-----------
TOTAL VALUE OF INVESTMENTS (COST $3,984,653 (b)) 98.71% $ 4,715,500
Other Assets Less Liabilities 1.29% 61,600
------- -----------
NET ASSETS 100.00% $ 4,777,100
======= ===========
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and
federal income tax purposes is the same.
Unrealized appreciation of investments for
financial reporting and federal income
tax purposes is as follows:
Unrealized appreciation $ 785,737
Unrealized depreciation (54,890)
-----------
NET UNREALIZED APPRECIATION $ 730,847
===========
See notes to the financial statements.
19
<PAGE>
QUAKER AGGRESSIVE GROWTH FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- 71.65%
BANKING -- 2.23%
Nations Bank Corp 500 $ 38,250
-----------
BEVERAGES -- 2.64%
The Coca-Cola Company 300 25,650
Coca-Cola Enterprises 500 19,625
-----------
45,275
-----------
BOTTLED & CANNED SOFTDRINKS -- 0.67%
Whitman Corporation 500 11,469
-----------
BUSINESS SERVICES -- 1.69%
Sodexho Marriot Services Inc. 1,000 29,000
-----------
CHEMICAL & ALLIED PRODUCTS -- 0.23%
Great Lakes Chemical Corporation 100 3,944
-----------
CIGARETTES -- 1.15%
Phillip Morris Company 500 19,688
-----------
CONSTRUCTION & MACHINERY EQUIPMENT -- 0.93%
Caterpillar, Inc. 300 15,862
-----------
CONTROLLED ENVIRONMENTS -- 1.03%
Oak Industries 500 17,688
-----------
CONSUMER SERVICES -- 1.33%
ServiceMaster Co. 600 22,838
-----------
DEPARTMENT STORES -- 1.15%
May Department Store 300 19,650
-----------
FAMILY CLOTHING STORES -- 0.02%
(a) Abercrombie & Fitch 8 352
-----------
FINANCIAL SERVICES -- 4.82%
Federal Home Loan Management Corp. 400 18,825
Providian Financial Corp. 300 23,569
(a) Tele-Communications TCI Ventures Group 2,000 40,125
-----------
82,519
-----------
FINANCIAL - BANKS, MONEY CENTER -- 1.63%
Banc One Corporation 500 27,906
-----------
20
<PAGE>
QUAKER AGGRESSIVE GROWTH FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
FOOD - PROCESSING -- 5.49%
Agibrands International, Inc. 650 $ 19,662
Campbell Soup Company 300 15,938
Ralstin-Ralston Purina Group 500 58,406
-----------
94,006
-----------
FOOD - WHOLESALE -- 1.10%
Ralcorp Holdings, Inc. 1,000 18,875
-----------
GROCERY STORES -- 0.71%
American Stores 500 12,094
-----------
HEALTHCARE -- 6.41%
Cardinal Health Inc. 200 18,750
(a) Neurex Corporation 3,000 91,125
-----------
109,875
-----------
INDUSTRIAL -- 2.71%
Hussman International, Inc. 2,500 46,406
-----------
INSURANCE AGENTS, BROKERS & SERVICES -- 2.60%
Hartford Financial Services Group Inc. 200 22,875
Mutual Risk Management Ltd. 600 21,750
-----------
44,625
-----------
INSURANCE - LIFE & HEALTH -- 0.85%
Old Republic International Corporation 500 14,656
-----------
INSURANCE - MULTILINE -- 2.42%
CIGNA Corporation 600 41,400
-----------
INSURANCE - PROPERTY & CASUALTY -- 3.01%
Mercury General Corporation 800 51,550
-----------
MEDICAL - BIOTECHNOLOGY -- 1.98%
Millennium Chemicals, Inc. 1,000 33,875
-----------
MEDICINAL - CHEMICALS & BOTANICAL PRODUCTS -- 0.85%
Martek Biosciences Corporation 1,000 14,563
-----------
MOTOR VEHICLES & CAR BODIES -- 1.72%
Ford Motor Company 500 29,500
-----------
PERSONAL CREDIT INSTITUTION -- 1.77%
Travelers Group, Inc. 500 30,312
-----------
21
<PAGE>
QUAKER AGGRESSIVE GROWTH FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
PHARAMACEUTICALS -- 1.32%
(a) Vion Pharamaceuticals Inc. 2,000 $ 9,500
Zeneca Group PLC 300 13,162
-----------
22,662
-----------
PLASTIC PRODUCTS -- 1.17%
Illinois Tool Works, Inc. 300 20,006
-----------
RETAIL - APPAREL -- 0.56%
The TJX Corporation 400 9,650
-----------
RETAIL - GENERAL MERCHANDISE -- 1.18%
BJ's Wholesale Club, Inc. 500 20,312
-----------
SECURITY BROKERS, DEALERS, FLOTATION COS. -- 4.33%
Donaldson, Lufkin, & Jenrette, Inc. 500 25,406
Morgan Stanley Dean Witter Discover & Company 300 27,412
Paine Webber Group Inc. 500 21,438
-----------
74,256
-----------
STATE COMMERCIAL BANKS -- 3.45%
Allegiance Corporation 800 41,000
Bank of New York, Inc. 300 18,206
-----------
59,206
-----------
TECHNOLOGY -- 0.71%
(a) New Era of Networks 400 12,200
-----------
TELEPHONE APPARATUS -- 1.66%
Northern Telecom Ltd. 500 28,375
-----------
UTILITIES - TELECOMMUNICATIONS -- 4.36%
AT&T Corporation 300 17,138
GTE Corporation 400 22,250
Sprint Corporation 500 35,250
-----------
74,638
-----------
VARIETY STORES -- 1.77%
Wal-Mart Stores Inc. 500 30,375
-----------
TOTAL COMMON STOCKS (COST $1,154,829) 31,158 $ 1,227,858
-----------
22
<PAGE>
QUAKER AGGRESSIVE GROWTH FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
INVESTMENT COMPANIES -- 13.50%
Evergreen Money Market Treasury Institutional $ 231,255
-----------
Treasury Money Market Fund Institutional
Service Shares
TOTAL INVESTMENT COMPANIES (COST $231,255) $ 231,255
-----------
TOTAL VALUE OF INVESTMENTS (COST $1,386,084) $ 1,459,113
===========
OPEN SHORT POSITIONS -- (5.74%)
(a) Elan Corporation PLC 1,530 (98,398)
-----------
TOTAL OPEN SHORT POSITIONS (PROCEEDS $94,302) (98,398)
===========
TOTAL VALUE OF INVESTMENTS AND
OPEN SHORT POSITIONS (b) 79.41% $ 1,360,715
Other Assets Less Liabilities 20.59% 352,870
------- -----------
NET ASSETS 100.00% $ 1,713,585
======= ===========
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and
federal income tax purposes is the same.
Unrealized appreciation of investments for
financial reporting and federal income
tax purposes is as follows:
Unrealized appreciation $ 92,308
Unrealized depreciation (23,375)
-----------
NET UNREALIZED APPRECIATION $ 68,933
===========
See notes to financial statements.
23
<PAGE>
QUAKER MID CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- 88.49%
CHEMICALS -- 4.54%
International Specialty Products 22,000 $ 409,750
-----------
COMMERCIAL SERVICES -- 5.58%
(a) Telespectrum Worldwide Inc. 25,400 222,250
The Reynolds & Reynolds Company 15,500 281,906
-----------
504,156
-----------
COMPUTER SOFTWARE & SERVICES -- 9.89%
Ceridian Corporation 7,100 417,125
(a) Daisytek International Corporation 10,500 267,094
(a) Symantec Corporation 8,000 209,000
-----------
893,219
-----------
CONSTRUCTION - HEAVY -- 1.93%
Granite Construction, Inc. 5,700 174,563
-----------
ELECTRONICS -- 2.78%
Tektronix, Inc 7,100 251,163
-----------
ENGINEERING & CONSTRUCTION -- 3.87%
Crane Company 7,200 349,650
-----------
ENERGY -- 3.19%
Ocean Energy, Inc. 14,744 288,430
-----------
FINANCIAL - THRIFT, SAVINGS & LOAN -- 14.29%
Roslyn Bancorp, Inc. 12,000 267,750
S&P Mid-Cap 400 Depository Receipts 14,700 1,023,487
-----------
1,291,237
-----------
HOLDING COMPANIES DIVERSIFIED -- 9.26%
The Coastal Corporation 5,300 370,006
Questar Corporation 14,800 290,450
Bergen Brunswig Corporation 3,800 176,225
-----------
836,681
-----------
MEDICAL SUPPLIES -- 5.49%
Ballard Medical Products 12,900 232,200
Becton, Dickinson & Company 3,400 263,925
-----------
496,125
-----------
MISCELLANEOUS - MANUFACTURING -- 6.55%
(a) Griffon Corporation 18,000 230,625
Kellwood Company 10,100 361,075
-----------
591,700
-----------
24
<PAGE>
QUAKER MID CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
OFFICE & BUSINESS EQUIPMENT -- 2.38%
Harris Corporation 4,800 $ 214,500
-----------
OIL & GAS - EXPLORATION -- 4.08%
(a) Newfield Exploration 14,800 368,150
-----------
OIL & GAS - DOMESTIC -- 1.99%
Amerada Hess Corporation 3,300 179,231
-----------
PERSONAL CREDIT INSTITUTIONS -- 2.88%
(a) Americredit Corporation 7,300 260,518
-----------
RETAIL - DEPARTMENT STORES -- 4.20%
(a) Profitt's, Inc 9,400 379,525
-----------
RETAIL - GROCERY -- 2.58%
Hannaford Brothers 5,300 233,200
-----------
TIRE & RUBBER -- 3.01%
Cooper Tire & Rubber Company 13,200 272,251
-----------
TOTAL COMMON STOCKS (COST $7,492,825) 7,994,049
-----------
INVESTMENT COMPANIES -- 2.81%
Evergreen Money Market Treasury Institutional
Treasury Money Market Fund Institutional
Service Shares
(COST $253,534) 253,534 253,534
-----------
TOTAL VALUE OF INVESTMENTS (COST $7,746,359) 91.30% $ 8,247,583
Other Assets Less Liabilities 8.70% 785,597
------- -----------
NET ASSETS 100.00% $ 9,033,180
======= ===========
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and
federal income tax purposes is the same.
Unrealized appreciation of investments for
financial reporting and federal income
tax purposes is as follows:
Unrealized appreciation $ 804,039
Unrealized depreciation (302,816)
-----------
NET UNREALIZED APPRECIATION $ 501,223
===========
See notes to financial statements.
25
<PAGE>
QUAKER SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- 80.80%
AEROSPACE & DEFENSE -- 1.16%
Litton Industries, Inc. 300 $ 17,700
Sunstrand Corporation 500 28,625
-----------
46,325
-----------
ADVERTISING AGENCIES -- 0.39%
(a) Catalina Marketing Corporation 300 15,580
-----------
AIR COURIER SERVICES -- 0.53%
Airborne Freight Corporation 600 20,963
-----------
AIR TRANSPORTATION -- 0.58%
(a) Midwest Express Holdings, Inc. 300 10,856
(a) Continental Airlines, Inc. 200 12,175
-----------
23,031
-----------
AUTO PARTS - ORIGINAL EQUIPMENT -- 0.45%
Arvin Industries, Inc. 500 18,156
-----------
AUTOS & TRUCKS -- 0.72%
Navistar International Corporation 1,000 28,875
-----------
BUILDING MATERIALS -- 1.71%
Lone Star Industries 400 30,825
Texas Industries, Inc. 300 15,900
Vulcan Materials Company 200 21,337
-----------
68,062
-----------
BUSINESS MACHINES -- 0.30%
Splash Technology Holdings, Inc. 700 12,030
-----------
BUSINESS SERVICES -- 2.60%
Complete Business Solutions, Inc. 900 32,344
(a) Integrated Circuit Systems, Inc. 1,000 16,625
(a) Mastech Corporation 1,000 28,125
(a) Personnel Group America, Inc. 600 12,000
Trigon Healthcare, Inc. 400 14,475
-----------
103,569
-----------
CATALOG & MAIL ORDER HOUSES -- 0.63%
(a) CDW Computer Center, Inc. 500 25,000
-----------
26
<PAGE>
QUAKER SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
CHEMICALS -- 1.68%
The Geon Company 500 $ 11,469
Georgia Gulf Corporation 500 11,406
Millenium Chemicals, Inc. 700 23,713
Wellman, Inc. 900 20,419
-----------
67,007
-----------
CHEMICAL SERVICES -- 0.68%
Leasing Solutions, Inc. 600 17,250
(a) Veritas DGC Inc. 200 9,988
-----------
27,238
-----------
COMMERCIAL PRINTING -- 0.53%
World Color Press, Inc. 600 21,000
-----------
COMPUTERS -- 0.15%
(a) SMART Modular Technologies, Inc. 400 5,850
-----------
COMPUTER SOFTWARE & SERVICES -- 3.31%
(a) Cambridge Technology Partners, Inc. 200 10,925
Comdisco, Inc. 600 11,400
(a) Computer Horizon Corporation 600 22,238
(a) InterVoice, Inc. 1,200 21,300
Keane Inc. 500 28,000
Madge Networks NV 4,700 22,325
(a) Pomeroy Computer Resources, Inc. 600 15,638
-----------
131,826
-----------
CONSUMER DURABLES -- 0.58%
C & D Technologies, Inc. 400 23,200
-----------
CONSTRUCTION -- 1.41%
Centex Construction Products 600 23,100
D.R. Horton, Inc. 675 14,090
(a) Walter Industries, Inc. 1,000 18,938
-----------
56,128
-----------
DRUGS & MEDICINE -- 2.46%
(a) Arterial Vascular Engineering, Inc. 1,000 35,750
(a) ESC Medical Systems Ltd. 700 23,625
(a) NBTY, Inc. 1,100 20,213
Bergen Brunswig Corporation Class (A) 400 18,550
-----------
98,138
-----------
27
<PAGE>
QUAKER SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
ELECTRICAL - MACHINERY, EQUIPMENT & SUPPLIES -- 0.51%
Exide Corporation 1,200 $ 20,175
-----------
ELECTRIC SERVICES -- 0.37%
El Paso Electric Company 1,600 14,700
-----------
ELECTRONICS -- 2.79%
Arrow Electronics, Inc. 500 10,875
(a) Berg Electronics Corporation 1,100 21,519
(a) CHS Electronics, Inc. 1,500 26,813
General Cable Corporation 1,000 28,875
(a) SCI Systems, Inc. 400 15,050
Technitrol, Inc. 200 7,988
-----------
111,120
-----------
ENERGY - RAW MATERIALS -- 0.30%
Cleco Corporation 400 11,900
-----------
ENTERTAINMENT -- 0.92%
Anchor Gaming 300 23,288
GTECH Holdings Corporation 400 13,475
-----------
36,763
-----------
FABRICATED RUBBER PRODUCTS -- 0.43%
Carlisle Companies, Inc. 400 17,225
-----------
FINANCIAL - BANKS, COMMERCIAL -- 1.87%
Commerce Bancshares, Inc. 157 7,664
Greenpoint Financial Corporation 400 15,050
Popular, Inc. 400 26,600
TR Financial Corporation 600 25,125
-----------
74,439
-----------
FINANCIAL - MISCELLANEOUS -- 3.01%
CMAC Investments Corporation 400 24,600
(a) Consumer Portfolio Services, Inc. 1,400 14,700
Dain Rauscher Corporation 300 16,425
Financial Security Assurance Holdings 300 17,625
SEI Corporation 400 24,800
(a) Southern Pacific Fund Corporation 1,400 21,963
-----------
120,113
-----------
28
<PAGE>
QUAKER SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
FINANCIAL - SAVINGS/LOAN/THRIFT -- 1.32%
AMRESCO, Inc. 400 $ 11,650
(a) ContiFinancial Corporation 300 6,938
Dime Bancorp, Inc. 411 12,304
(a) FIRSTPLUS Financial Group, Inc. 600 21,600
-----------
52,492
-----------
FINANCIAL - SECURITIES BROKERS -- 2.04%
Edwards (A.G.), Inc. 450 19,209
Donaldson, Lufkin & Jenrette, Inc. 400 20,325
Paine Webber Group Inc. 450 19,294
Raymond James Financial, Inc. 750 22,452
-----------
81,280
-----------
FINANCIAL SERVICES -- 1.84%
Acceptance Insurance Companies 600 14,738
(a) AmeriCredit Corporation 600 21,413
Capital One Financial Corporation 300 37,256
-----------
73,407
-----------
FOOD - PROCESSING -- 0.74%
Interstate Bakeries Corporation 700 23,231
(a) Smithfield Foods, Inc. 200 6,100
-----------
29,331
-----------
FOOD - WHOLESALE -- 0.60%
Fleming Companies, Inc. 600 10,538
Supervalu Inc. 300 13,313
-----------
23,851
-----------
GENERAL INDUSTRIAL MACHINERY & EQUIPMENT -- 0.21%
Regal-Beloit Corporation 300 8,550
-----------
HELP SUPPLY SERVICES -- 1.18%
(a) CDI Corporation 200 5,350
(a) Interim Services, Inc. 700 22,488
(a) Volt Info Services, Inc 700 18,988
-----------
46,826
-----------
HOLDING COMPANIES - DIVERSIFIED -- 0.53%
(a) Anixter International Inc. 1,100 20,968
-----------
29
<PAGE>
QUAKER SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
HOMEBUILDERS -- 0.75%
Centex Corporation 400 $ 15,100
(a) Champion Enterprises, Inc. 500 14,625
-----------
29,725
-----------
HOUSEHOLD PRODUCTS & HOUSEWARES -- 0.74%
(a) Furniture Brands International, Inc. 900 25,256
Harvety Furniture Company, Inc. 200 4,425
-----------
29,681
-----------
INSURANCE - LIFE & HEALTH -- 0.95%
Partnerre, Ltd. 300 15,300
PennCorp Financial Group, Inc. 900 18,450
Vesta Insurance Group, Inc. 200 4,262
-----------
38,012
-----------
INSURANCE - MULTILINE -- 0.80%
Americian National Insurance Company 100 10,525
Capital Re Corp 300 21,488
-----------
32,013
-----------
INSURANCE - PROPERTY & CASUALTY -- 3.52%
Everest Reinsurance Holdings, Inc. 500 19,219
Fremont General Corporation 200 10,838
LaSalle Re Holdings Ltd. 400 15,150
NAC Re Corp. 200 10,675
Orion Capital Corporation 300 16,762
PXRE Corporation 100 3,000
Reliance Group Holdings, Inc. 800 14,000
The First American Financial Corporation 300 27,000
The PMI Group, Inc. 200 14,675
TIG Holdings, Inc. 400 9,200
-----------
140,519
-----------
INSURANCE - TITLE -- 0.70%
Fidelity National Financial, Inc. 700 27,868
-----------
IRON & STEEL -- 1.30%
Bethlehem Steel Corporation 1,700 21,144
National Steel Corporation Class (B) 1,200 14,250
USX-U.S. Steel Group, Inc. 500 16,500
-----------
51,894
-----------
30
<PAGE>
QUAKER SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
LIQUOR -- 0.62%
(a) Canadaigua Brands Class (A) 500 $ 24,594
-----------
MEASURING & CONTROLLING DEVICES -- 0.36%
(a) Input/Output, Inc. 800 14,250
-----------
MEDIA -- 0.64%
Hollinger International, Inc. Class (A) 1,500 25,500
-----------
MEDICAL - HOSPITAL MANAGEMENT & SERVICES -- 1.74%
(a) American Home Patient, Inc. 500 9,562
Integrated Health Services, Inc. 406 15,225
Mariner Health Group, Inc. 1,000 16,625
(a) NovaCare, Inc. 1,500 17,625
Sun Healthcare Group, Inc. 700 10,238
-----------
69,275
-----------
MEDICAL SUPPLIES -- 0.30%
Owens & Minor, Inc. 1,200 12,000
-----------
METAL FABRICATION & HARDWARE -- 0.62%
The Timken Company 800 24,650
-----------
MISCELLANEOUS - MANUFACTURING -- 2.08%
(a) Lexmark International Group, Inc. Class (A) 400 24,400
NACCO Industries, Inc. Class (A) 200 25,850
Trinity Industries, Inc. 600 24,900
Vitro Sociedad Anonima ADR 1,200 7,650
-----------
82,800
-----------
NON-DURABLE & ENTERTAINMENT -- 1.21%
Department 56, Inc. 600 21,300
(a) Sonic Corporation 1,200 26,850
-----------
48,150
-----------
NON-FERROUS METALS -- 0.36%
(a) Encore Wire Corporation 900 14,513
-----------
OFFICE & CLININCS OF DOCTORS OF MEDICINE -- 0.22%
(a) Coventry Healthcare, Inc. 600 8,925
-----------
31
<PAGE>
QUAKER SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
OIL & GAS - DOMESTIC -- 1.84%
McDermott (J Ray) SA 300 $ 12,450
Sun Company, Inc. 500 19,406
Teekay Shipping, Corporation 900 22,556
Tesoro Petroleum Corporation 1,200 19,050
-----------
73,462
-----------
OIL & GAS - DRILLING -- 0.83%
(a) Cliffs Drilling Company 300 9,844
Helmerich & Payne, Inc. 400 8,900
(a) Key Energy Group, Inc. 1,100 14,439
-----------
33,183
-----------
OIL & GAS - FIELD SERVICES -- 0.33%
Pool Energy Services Company 900 13,275
-----------
OIL & GAS - OTHER SERVICES -- 1.06%
Rochester Gas & Electric Corporation 700 22,356
UGI Corporation 800 19,900
-----------
42,256
-----------
OPERATIVE BUILDERS -- 0.70%
(a) Fairfield Communities, Inc. 800 15,350
Kaufman & Broad Home Corporation 400 12,700
-----------
28,050
-----------
PACKAGING & CONTAINERS -- 0.30%
Ball Corporation 300 12,056
-----------
PAPER & FOREST PRODUCTS -- 0.44%
(a) Mail-Weil, Inc. 800 17,350
-----------
PHARMACEUTICALS -- 1.47%
Herbalife International, Inc. Class (A) 1,133 27,900
ICN Pharmaceuticals, Inc. 600 27,413
(a) PharMercia, Inc. 273 3,293
-----------
58,606
-----------
PREPACKAGED SOFTWARE -- 0.93%
(a) Intersolv, Inc. 1,000 16,062
(a) Symantec Corporation 800 20,900
-----------
36,962
-----------
32
<PAGE>
QUAKER SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
PRODUCER GOODS -- 1.16%
Aeroquip-Vickers, Inc. 200 $ 11,675
Chart Industries 600 14,325
The Maitowoc Company, Inc. 500 20,156
-----------
46,156
-----------
PUMPS & PUMPING EQUIPMENT -- 0.35%
Graco, Inc. 400 13,950
-----------
PUBLISHING - PRINTING -- 0.45%
Bowne & Company, Inc. 400 18,000
-----------
REAL PROPERTY -- 0.42%
CB Commercial Real Estate Service Group 500 16,718
-----------
RESTAURANTS & FOOD SERVICE -- 2.79%
(a) Brinker International, Inc. 1,000 19,250
CKE Restaurants, Inc. 700 28,875
Daren Restaurants, Inc. 1,200 19,050
Foodmaker, Inc. 600 10,125
(a) Ryan's Family Steak Houses, Inc. 900 9,225
Ruby Tuesday, Inc. 1,600 24,800
-----------
111,325
-----------
RETAIL - APPAREL -- 1.60%
Ross Stores, Inc. 400 17,200
(a) The Dress Barn, Inc. 300 7,462
Paul Harris Stores, Inc. 1,300 17,225
(a) Payless Shoesource, Inc. 300 22,106
-----------
63,993
-----------
RETAIL - GENERAL MERCHANDISE -- 1.06%
(a) Best Buy Co., Inc. 800 28,900
Fingerhut Companies, Inc. 400 13,200
-----------
42,100
-----------
RETAIL - SPECIALTY LINE -- 0.54%
(a) Micro Warehouse, Inc. 1,400 21,700
-----------
STATE COMMERCIAL BANKS -- 1.37%
Allegiance Corporation 500 25,625
(a) First Republic Bank 800 28,900
-----------
54,525
-----------
33
<PAGE>
QUAKER SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
TELECOMMUNICATIONS -- 1.08%
360 Communications Company 800 $ 25,600
(a) Brightpoint, Inc. 900 13,050
Cidco, Inc. 1,000 4,625
-----------
43,275
-----------
TELECOMMUNICATIONS EQUIPMENT -- 0.38%
(a) Paging Network, Inc. 600 8,400
Tadiran Ltd. 200 6,625
-----------
15,025
-----------
TEXTILES -- 0.60%
Burlington Industries, Inc. 1,700 23,906
-----------
TOBACCO -- 0.47%
Universal Corporation 500 18,688
-----------
TRANSPORTATION - AIR -- 1.12%
Alaska Air Group, Inc. 400 21,825
(a) America West Holdings, Company Class (B) 800 22,850
-----------
44,675
-----------
TRANSPORTATION - MISCELLANEOUS -- 0.48%
Sea Containers, Ltd. 500 19,125
-----------
UTILITIES - ELECTRIC -- 2.10%
Commonwealth Energy System 200 7,550
Marketspan Corporation 176 5,268
New York State Electric & Gas Corporation 500 20,812
Public Service Company of New Mexico 1,100 24,956
The United Illuminating Company 500 25,312
-----------
83,898
-----------
UTILITIES - GAS -- 0.17%
Westcoast Energy Inc. 300 6,694
-----------
VARIETY STORES -- 1.00%
AMES Department Stores, Inc. 1,000 26,312
Shopko Stores, Inc. 400 13,600
-----------
39,912
-----------
34
<PAGE>
QUAKER SMALL-CAP VALUE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
NUMBER MARKET
OF SHARES VALUE
--------- -----------
COMMON STOCK -- (continued)
WHOLESALE - SPECIAL LINE -- 0.32%
(a) CellStar Corporation 1,000 $ 12,938
-----------
TOTAL COMMON STOCKS (COST $2,914,935) 3,221,290
-----------
INVESTMENT COMPANIES -- 0.86%
Evergreen Money Market Treasury Institutional
Treasury Money Market Fund Institutional
Service Shares
(COST $34,101) 34,101 34,101
-----------
TOTAL VALUE OF INVESTMENTS (COST $2,949,036 (b)) 81.66% $ 3,255,391
Other Assets Less Liabilities 18.34% 731,335
------- -----------
NET ASSETS 100.00% $ 3,986,726
======= ===========
(a) Non-income producing investment.
(b) Aggregate cost for financial reporting and
federal income tax purposes is the same.
Unrealized appreciation of investments for
financial reporting and federal income
tax purposes is as follows:
Unrealized appreciation $ 464,679
Unrealized depreciation (158,324)
-----------
NET UNREALIZED APPRECIATION $ 306,355
===========
See notes to financial statements.
35
<PAGE>
QUAKER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998
INTEREST MATURITY
PRINCIPAL RATE DATE VALUE
--------- -------- -------- ---------
MORTGAGE BACKED SECURITIES -- 34.26%
FHLMC 450,000 5.75% 15-Apr-08 $ 449,260
FNMA 500,000 5.75% 15-Jun-05 501,761
FNMA 1,000,000 6.50% 01-May-28 995,700
TOTAL MORTGAGE BACKED SECURITIES ---------
(COST $1,933,721) 1,946,721
---------
U.S. GOVERNMENT OBLIGATIONS -- 56.29%
U.S. Treasury Bond 530,000 0.00% 15-Nov-21 139,607
U.S. Treasury Bond 270,000 10.375% 15-Nov-12 361,631
U.S. Treasury Bond 100,000 8.00% 15-Nov-21 128,906
U.S. Treasury Note 420,000 11.125% 15-Aug-03 522,900
U.S. Treasury Note 935,000 7.00% 15-Jul-06 1,021,487
U.S. Treasury Note 101,000 5.375% 15-Feb-01 100,653
U.S. Treasury Note 900,000 6.25% 31-Aug-02 923,344
TOTAL U.S. GOVERNMENT OBLIGATIONS ---------
(COST $3,156,921) 3,198,529
---------
SHARES
--------
INVESTMENT COMPANIES -- 6.02%
Evergreen Money Market Treasury
Institutional Money 341,823 341,823
---------
TOTAL INVESTMENT COMPANIES
(COST $341,823) 341,823
---------
TOTAL VALUE OF INVESTMENTS
(COST $5,432,465 (a)) 96.57% $5,487,073
Other Assets Less Liabilities 3.43% 195,079
------- ----------
NET ASSETS 100.00% $5,682,152
======= ==========
(a) Aggregate cost for financial reporting
and federal income tax purposes is the same.
Unrealized appreciation of investments for
financial reporting and federal income
tax purposes is as follows:
Unrealized appreciation $ 58,450
Unrealized depreciation (3,842)
----------
NET UNREALIZED APPRECIATION $ 54,608
==========
36
<PAGE>
QUAKER INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1998
<TABLE>
<CAPTION>
Enhanced Stock Core Equity Aggressive Mid-Cap Small Cap Fixed Income
Market Fund Fund Growth Fund Value Fund Value Fund Fund
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at value (cost $1,452,192,
$3,984,653, $1,386,084, $7,746,359,
$2,949,036 and $5,432,465) (note 2) $1,572,922 $4,715,500 $1,459,113 $8,247,583 $3,255,391 $5,487,073
Cash 14,118 5,450 25,363 667,291 117,439 71,450
Deposits with brokers for
securities sold short 0 0 47,468 0 0 0
Receivables:
Dividends and interest 1,707 4,613 2,799 8,013 2,563 86,978
Fund shares sold 0 55,870 102,837 144,751 606,440 35,182
Investment securities sold 0 0 169,514 125,033 0 0
Deferred organization expenses, net
(notes 2 and 4) 22,533 22,533 22,515 9,002 22,533 22,533
---------- ---------- ---------- ---------- ---------- ----------
TOTAL ASSETS 1,611,280 4,803,966 1,829,609 9,201,673 4,004,366 5,703,216
---------- ---------- ---------- ---------- ---------- ----------
LIABILITIES
Securities sold short, at value
(proceeds $94,302) 0 0 98,398 0 0 0
Payables:
Fund shares purchased 135 0 0 35,455 0 0
Investment securities purchased 0 0 1,269 112,145 0 0
Accrued expenses 10,878 11,147 12,020 8,923 11,311 8,411
Due to fund sponsor (notes 2 and 3) 1,733 15,719 4,337 11,970 6,329 12,653
---------- ---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES 12,746 26,866 116,024 168,493 17,640 21,064
---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS
(Applicable to 114,051, 331,256,
142,735, 826,469, 296,051 and 546,029
shares outstanding, respectively;
unlimited shares of $0.01 par value,
beneficial interest authorized) $1,598,534 $4,777,100 $1,713,585 $9,033,180 $3,986,726 $5,682,152
========== ========== ========== ========== ========== ==========
NET ASSET VALUE, REDEMPTION AND
OFFERING PRICE PER SHARE $14.02(1) $14.42(2) $12.01(3) $10.93(4) $13.47(5) $10.41(6)
========== ========== ========== ========== ========== ==========
NET ASSETS CONSIST OF
Paid-in capital $1,278,620 $4,032,994 $1,553,060 $8,412,859 $3,563,093 $5,640,544
Undistributed net investment
income (loss) 3,528 677 (540) (10,859) (4,147) 784
Accumulated net realized gain (loss)
on investments 195,656 12,582 92,132 129,957 121,425 (13,784)
Net unrealized appreciation
on investments 120,730 730,847 68,933 501,223 306,355 54,608
---------- ---------- ---------- ---------- ---------- ----------
$1,598,534 $4,777,100 $1,713,585 $9,033,180 $3,986,726 $5,682,152
========== ========== ========== ========== ========== ==========
</TABLE>
(1) $1,598,534 / 114,051 shares (4) $9,033,180 / 826,469 shares
(2) $4,777,100 / 331,256 shares (5) $3,986,726 / 296,051 shares
(3) $1,713,585 / 142,735 shares (6) $5,682,152 / 546,029 shares
See notes to the financial statements.
37
<PAGE>
QUAKER INVESTMENT TRUST
STATEMENTS OF OPERATIONS
YEAR ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
Enhanced Stock Core Equity Aggressive Mid-Cap(1) Small Cap Fixed Income
Market Fund Fund Growth Fund Value Fund Value Fund Fund
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME:
Dividends $ 17,908 $ 29,985 $ 7,924 $ 23,712 $ 21,252 $ 0
Interest 2,476 3,049 10,399 12,734 4,501 157,991
-------- -------- -------- -------- -------- --------
TOTAL INCOME 20,384 33,034 18,323 36,446 25,753 157,991
-------- -------- -------- -------- -------- --------
EXPENSES:
Investment advisory fees (note 2) 6,433 17,770 10,415 26,346 16,356 12,948
Fund administration fees (note 2) 2,353 3,377 2,525 4,186 3,406 3,981
Fund accounting fees (note 2) 22,829 22,829 22,876 10,731 22,829 22,829
Security pricing fees 7,920 2,245 3,142 4,098 10,242 119
Custody fees 617 578 2,149 319 683 595
Shareholder servicing fees 3,938 3,941 4,277 3,165 4,175 3,598
Shareholder recordkeeping fees 5,009 4,998 4,998 1,973 4,998 4,998
Shareholder servicing distribution
fees (note 3) 2,573 5,982 3,462 8,785 5,451 4,317
Registration and filing
administration fees 1,626 1,718 2,081 1,341 2,165 1,711
Trustee fees and meeting expenses 156 156 157 78 156 153
Audit fees 4,001 4,001 4,012 1,984 4,001 4,001
Legal fees 2,785 2,785 2,793 1,381 2,785 2,785
Registration and filing expenses 634 1,366 4,187 1,647 3,321 598
Printing expenses 1,482 1,579 1,702 820 1,653 1,307
Amortization of deferred organizational
expenses (note 4) 6,756 6,756 6,775 997 6,756 6,756
Other operating expenses 2,630 3,154 2,634 1,373 2,833 1,968
-------- -------- -------- -------- -------- --------
TOTAL EXPENSES 71,742 83,235 78,185 69,224 91,810 72,664
Less:
Expense reimbursements (note 3) (49,880) (27,126) (45,445) (3,206) (40,418) (29,618)
Investment advisory fees
waived (note 2) (6,433) (17,770) (10,415) (9,928) (16,356) (12,948)
Shareholder service fees
waived (note 3) (2,573) (5,982) (3,462) (8,785) (5,451) (4,317)
-------- -------- -------- -------- -------- --------
NET EXPENSES 12,856 32,357 18,863 47,305 29,585 25,781
-------- -------- -------- -------- -------- --------
NET INVESTMENT INCOME (LOSS) 7,528 677 (540) (10,859) (3,832) 132,210
-------- -------- -------- -------- -------- --------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Net realized gain (loss) from
investment transactions
before income taxes 290,761 16,584 297,196 129,957 259,589 (13,784)
Income taxes (note 1) 0 0 39,743 0 0 0
Less reimbursement (notes 1 and 3) 0 0 (39,743) 0 0 0
-------- -------- -------- -------- -------- --------
NET INCOME TAXES 0 0 0 0 0 0
-------- -------- -------- -------- -------- --------
NET REALIZED GAIN (LOSS) FROM
INVESTMENT TRANSACTIONS 290,761 16,584 297,196 129,957 259,589 (13,784)
-------- -------- -------- -------- -------- --------
INCREASE IN UNREALIZED APPRECIATION
ON INVESTMENTS 24,466 662,487 15,896 501,223 141,382 56,616
-------- -------- -------- -------- -------- --------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 315,227 679,071 313,092 631,180 400,971 42,832
-------- -------- -------- -------- -------- --------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $322,755 $679,748 $312,552 $620,321 $397,139 $175,042
======== ======== ======== ======== ======== ========
</TABLE>
(1) The Quaker Mid-Cap Value Fund commenced operations on January 6, 1998.
See notes to the financial statements.
38
<PAGE>
QUAKER INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Enhanced Stock Core Equity Aggressive Mid-Cap Small Cap Fixed Income
FOR THE YEAR ENDED JUNE 30, 1998 Market Fund Fund Growth Fund Value Fund(1) Value Fund Fund
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
OPERATIONS
Net investment income (loss) $ 7,528 $ 677 $ (540) $ (10,859) $ (3,832) $ 132,210
Net realized gain (loss) from
investment transactions 290,761 16,584 297,196 129,957 259,589 (13,784)
Increase in unrealized appreciation
on investments 24,466 662,487 15,896 501,223 141,382 56,616
---------- ---------- ---------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 322,755 679,748 312,552 620,321 397,139 175,042
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income (4,067) 0 (12) 0 (464) (131,435)
Net realized gain from investment
transactions (91,954) 0 (153,326) 0 0 0
Distribution in excess of net
realized gain 0 0 (51,738) 0 (138,164) 0
---------- ---------- ---------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS (96,021) 0 (205,076) 0 (138,628) (131,435)
---------- ---------- ---------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS
Increase in net assets from Fund
share transactions (note 7) 589,226 3,578,827 485,153 8,412,859 2,394,742 5,062,615
---------- ---------- ---------- ---------- ---------- ----------
TOTAL INCREASE IN NET ASSETS 815,960 4,258,575 592,629 9,033,180 2,653,253 5,106,222
NET ASSETS
Beginning of period 782,574 518,525 1,120,956 0 1,333,473 575,930
---------- ---------- ---------- ---------- ---------- ----------
End of period $1,598,534 $4,777,100 $1,713,585 $9,033,180 $3,986,726 $5,682,152
========== ========== ========== ========== ========== ==========
FOR THE PERIOD FROM NOVEMBER 25, 1996
(COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1997
INCREASE IN NET ASSETS
OPERATIONS
Net investment income $ 3,607 $ 1,024 $ 2,939 $ 0 $ 1,230 $ 12,277
Net realized gain (loss) from
investment transactions (3,149) (4,002) 6,734 0 54,417 0
Increase (decrease) in unrealized
appreciation on investments 96,264 68,360 53,037 0 164,973 (2,008)
---------- ---------- ---------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 96,722 65,382 62,710 0 220,620 10,269
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income (3,542) (1,024) (2,927) 0 (1,081) (12,268)
Net realized gain from
investment transactions 0 0 (6,734) 0 0 0
Distribution in excess of net
realized gain 0 0 0 0 (54,417) 0
---------- ---------- ---------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS (3,542) (1,024) (9,661) 0 (55,498) (12,268)
---------- ---------- ---------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS
Increase in net assets from
Fund share transactions
(note 7) 689,394 454,167 1,067,907 0 1,168,351 577,929
---------- ---------- ---------- ---------- ---------- ----------
TOTAL INCREASE IN NET ASSETS 782,574 518,525 1,120,956 0 1,333,473 575,930
NET ASSETS
Beginning of period 0 0 0 0 0 0
---------- ---------- ---------- ---------- ---------- ----------
End of period $ 782,574 $ 518,525 $1,120,956 $ 0 $1,333,473 $ 575,930
========== ========== ========== ========== ========== ==========
</TABLE>
(1) The Quaker Mid-Cap Value Fund commenced operations on January 6, 1998.
See notes to the financial statements.
39
<PAGE>
QUAKER INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
ENHANCED STOCK CORE EQUITY AGGRESSIVE GROWTH
MARKET FUND FUND FUND
--------------------------- ---------------------------- --------------------------
FOR THE FOR THE FOR THE
PERIOD FROM PERIOD FROM PERIOD FROM
YEAR NOVEMBER 25, 1996 YEAR NOVEMBER 25, 1996 YEAR NOVEMBER 25, 1996
ENDED (COMMENCEMENT OF ENDED (COMMENCEMENT OF ENDED (COMMENCEMENT OF
JUNE 30, OPERATIONS) TO JUNE 30, OPERATIONS) TO JUNE 30, OPERATIONS) TO
1998 JUNE 30, 1997 1998 JUNE 30, 1997 1998 JUNE 30, 1997
--------------------------- ---------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.83 $ 10.00 $ 11.61 $ 10.00 $ 11.16 $ 10.00
---------- -------- ---------- -------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) 0.07 0.07 0.00 0.04 0.00 0.04
Net realized and unrealized gain
(loss) on investments 3.10 1.83 2.81 1.61 2.69 1.23
---------- -------- ---------- -------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 3.17 1.90 2.81 1.65 2.69 1.27
---------- -------- ---------- -------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income (0.04) (0.07) 0.00 (0.04) 0.00 (0.04)
Net realized gain from investment
transactions (0.94) 0.00 0.00 0.00 (1.38) (0.07)
Distribution in excess of net
realized gain 0.00 0.00 0.00 0.00 (0.46) 0.00
---------- -------- ---------- -------- ---------- ----------
TOTAL DISTRIBUTIONS (0.98) (0.07) 0.00 (0.04) (1.84) (0.11)
---------- -------- ---------- -------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $14.02 $11.83 $14.42 $11.61 $12.01 $11.16
========== ======== ========== ======== ========== ==========
TOTAL RETURN 28.32% 19.04%(b) 24.20% 16.50%(b) 26.57% 12.68%(b)
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $1,598,534 $782,574 $4,777,100 $518,525 $1,713,585 $1,120,956
RATIO OF EXPENSES TO AVERAGE
NET ASSETS
Before expense reimbursements and
waived fees 5.58% 16.44%(a) 3.48% 21.30%(a) 8.09% 13.44%(a)
After expense reimbursements and
waived fees 1.00% 1.00%(a) 1.35% 1.35%(a) 1.35% 1.34%(a)
RATIO OF NET INVESTMENT INCOME (LOSS) TO
AVERAGE NET ASSETS
Before expense reimbursements and
waived fees (3.99%) (14.32%)(a) (2.10%) (19.47%)(a) (6.72%) (9.18%)(a)
After expense reimbursements and
waived fees 0.59% 1.14%(a) 0.03% 0.49%(a) (0.04%) 0.64%(a)
PORTFOLIO TURNOVER RATE 274.63% 34.26% 64.36% 11.49% 876.64% 778.01%
</TABLE>
(a) Annualized.
(b) Aggregate total return, not annualized.
See notes to the financial statements.
40
<PAGE>
QUAKER INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
MID-CAP SMALL CAP FIXED INCOME
VALUE FUND VALUE FUND FUND
---------------- -------------------------- ----------------------------
FOR THE FOR THE FOR THE
PERIOD FROM PERIOD FROM PERIOD FROM
JANUARY 6, 1998 YEAR NOVEMBER 25, 1996 YEAR NOVEMBER 25, 1996
(COMMENCEMENT OF ENDED (COMMENCEMENT OF ENDED (COMMENCEMENT OF
OPERATIONS) TO JUNE 30, OPERATIONS) TO JUNE 30, OPERATIONS) TO
JUNE 30, 1998 1998 JUNE 30, 1997 1998 JUNE 30, 1997
---------------- -------------------------- ----------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $ 11.53 $ 10.00 $ 9.89 $ 10.00
---------- ---------- ---------- ---------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.02) (0.01) 0.01 0.47 0.26
Net realized and unrealized gain
(loss) on investments 0.95 2.99 2.02 0.50 (0.11)
---------- ---------- ---------- ---------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.93 2.98 2.03 0.97 0.15
---------- ---------- ---------- ---------- --------
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income 0.00 0.00 (0.01) (0.45) (0.26)
Net realized capital gain 0.00 (1.04) (0.49) 0.00 0.00
Distribution in excess of net
realized gain 0.00 0.00 0.00 0.00 0.00
---------- ---------- ---------- ---------- --------
TOTAL DISTRIBUTIONS 0.00 (1.04) (0.50) (0.45) (0.26)
---------- ---------- ---------- ---------- --------
NET ASSET VALUE, END OF PERIOD $10.93 $13.47 $11.53 $10.41 $9.89
========== ========== ========== ========== ========
TOTAL RETURN 9.30%(b) 27.04% 20.35%(b) 9.97% 1.57%(b)
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $9,033,180 $3,792,089 $1,333,473 $5,682,152 $575,930
RATIO OF EXPENSES TO AVERAGE
NET ASSETS
Before expense reimbursements and
waived fees 1.97%(a) 4.20% 10.50%(a) 2.53% 16.56%(a)
After expense reimbursements and
waived fees 1.35%(a) 1.35% 1.31%(a) 0.90% 0.90%(a)
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS
Before expense reimbursements and
waived fees (0.93%)(a) (3.03%) (8.96%)(a) 2.96% (10.87%)(a)
After expense reimbursements and
waived fees (0.31%)(a) (0.18%) 0.22%(a) 4.59% 4.79%(a)
PORTFOLIO TURNOVER RATE 13.86% 129.58% 90.63% 81.55% 0.00%
</TABLE>
(a) Annualized.
(b) Aggregate total return, not annualized.
See notes to the financial statements.
41
<PAGE>
QUAKER INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 1998
- ------------------------------------------------------------------------------
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION
The Quaker Investment Trust (the "TRUST"), a diversified, open-end
management investment company, was organized as a Massachusetts Business Trust
on October 24, 1990, and is registered under the Investment Company Act of
1940, as amended. The Trust's Agreement and Declaration of Trust permits the
Trustees to issue an unlimited number of shares of beneficial interest. The
Trust has established six series: the Quaker Core Equity Fund, the Quaker
Aggressive Growth Fund, the Quaker Enhanced Stock Market Fund, the Quaker
Small Cap Value Fund, the Quaker Mid-Cap Value Fund and the Quaker Fixed
Income Fund (each a "FUND" and collectively, the "FUNDS"). The investment
objectives of each Fund are set forth below.
The Quaker Enhanced Stock Market Fund (the "ENHANCED STOCK MARKET FUND"),
The Quaker Core Equity Fund (the "CORE EQUITY FUND"), The Quaker Aggressive
Growth Fund (the "AGGRESSIVE GROWTH FUND"), and The Quaker Small Cap Value
Fund (the "SMALL CAP VALUE FUND") all commenced operations on November 25,
1996. The Quaker Mid-Cap Value Fund (the "MID-CAP VALUE FUND") commenced
operations on January 6, 1998. The investment objective of these Funds is to
provide shareholders with long-term capital growth by investing primarily in
equity securities of domestic U.S. companies.
The Quaker Fixed Income Fund (the "FIXED INCOME FUND") commenced
operations on November 25, 1996. The investment objective of this Fund is to
generate current income, preserve capital and maximize total returns through
active management of investment grade income securities.
A. SECURITY VALUATION. Each Fund's investments in securities are carried
at value. Securities listed on an exchange or quoted on a national market
system are valued at 4:00 p.m. (3:00 p.m. for securities of the Fixed Income
Fund), New York time on the day of valuation. Other securities traded in the
over-the-counter market and listed securities for which no sale was reported
on that date are valued at the most recent bid price. Securities for which
market quotations are not readily available, if any, are valued by using an
independent pricing service or by following procedures approved by the Board
of Trustees. Short-term investments are valued at cost, which approximates
value.
B. FEDERAL INCOME TAXES. The Aggressive Growth Fund did not comply with
the provisions of the Internal Revenue Code applicable to regulated investment
companies for the tax year ended August 31, 1997. Consequently, a provision
for federal and state income taxes on net built-in realized gains as of August
31, 1997, has been included in the financial statements. For the tax year
beginning September 1, 1997, the Fund has complied with the provisions of the
Internal Revenue Service Code applicable to regulated investment companies.
Quaker Funds, Inc. (the "SPONSOR") has agreed to pay all taxes associated
with the Aggressive Growth Fund's tax status.
For the other Funds, no provision has been made for federal income taxes
or personal holding company taxes since it is the policy of each Fund to
comply with the provisions of the Internal Revenue Code applicable to
regulated investment companies and personal holding companies and to make
sufficient distributions of taxable income to relieve it from substantially
all federal income taxes.
42
<PAGE>
QUAKER INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998
- ------------------------------------------------------------------------------
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER
INFORMATION -- (CONTINUED)
Due to a concentration of shareholders at June 30, 1998, each Fund is
subject to the provisions of the Internal Revenue Code applicable to personal
holding companies.
Net investment income (loss) and net realized gains (losses) may differ
for financial statement and income tax purposes primarily due to investments
which have a different basis for financial statement and income tax purposes.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for
federal income tax purposes. Also, due to the timing of dividend
distributions, the fiscal year in which amounts are distributed may differ
from the year that the income or realized gains were recorded by each Fund.
C. INVESTMENT TRANSACTIONS. Investment transactions are recorded on the
trade date. Realized gains and losses are determined using the specific
identification cost method. Interest income is recorded daily on an accrual
basis. Dividend income is recorded on the ex-dividend date.
The Aggressive Growth Fund makes short sales of investments, which are
transactions in which the Fund sells a security it does not own. To complete
such a transaction, the Fund must borrow the security to make delivery to the
buyer. The Fund is then obligated to replace the security borrowed by
purchasing it at the market price at the time of replacement. The proceeds of
short sales are retained by the broker to the extent necessary to meet margin
requirements, until the short position is closed out.
D. DISTRIBUTIONS TO SHAREHOLDERS. Except for the Fixed Income Fund which
declares dividends monthly, each Fund generally declares dividends annually,
payable in December, on a date selected by the Trust's Trustees. In addition,
distributions may be made annually in December out of net realized gains
through October 31 of that year. Distributions to shareholders are recorded
on the ex-dividend date. Each Fund may make a supplemental distribution
subsequent to the end of its fiscal year ending June 30.
E. USE OF ESTIMATES. The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that may affect the reported amounts of
assets and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
NOTE 2 -- INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
Pursuant to separate investment advisory agreements, the Advisors,
Fiduciary Asset Management Company for the Enhanced Stock Market Fund and the
Fixed Income Fund, West Chester Capital Advisors, Inc. for the Core Equity
Fund, DG Capital Management, Inc. for the Aggressive Growth Fund, Compu-Val
Investments, Inc. for the Mid-Cap Value Fund and Aronson + Partners for the
Small Cap Value Fund (the "ADVISORS") provide each Fund with a continuous
program of supervision of the Fund's assets, including the composition of its
portfolio, and furnish advice and recommendations with respect to investments,
investment policies and the purchase and sale of securities. As compensation
for their services, the Advisors receive a fee at an annual rate of the Fund's
average daily net assets. The Advisors intend to voluntarily waive
43
<PAGE>
QUAKER INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998
- ------------------------------------------------------------------------------
NOTE 2 -- INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY
TRANSACTIONS -- (CONTINUED)
all or a portion of their fees. There can be no assurance that the
foregoing voluntary fee waivers will continue. For the period ended June 30,
1998, each Advisor has voluntarily waived its fee as follows:
ADVISORY FEE ADVISORY FEE
RATE WAIVER
------------ ------------
Enhanced Stock Market Fund... 0.50% $ 6,433
Core Equity Fund ............ 0.75 17,770
Aggressive Growth Fund....... 0.75 10,415
Mid-Cap Value Fund........... 0.75 9,928
Small Cap Value Fund......... 0.75 16,356
Fixed Income Fund............ 0.45 12,948
As of May 1, 1998, The Declaration Service Company (the "ADMINISTRATOR")
replaced The Nottingham Company as the Administrator for each Fund. The
Administrator provides administrative services to and is generally responsible
for the overall management and day-to-day operations of each Fund pursuant to
an accounting and administrative agreement with the Trust. As compensation
for its services, the Administrator receives a fee at the annual rate of 0.05%
of each Fund's first $25 million of average daily net assets, 0.09% of the
next $25 million of average daily net assets, 0.07% of the next $50 million of
average daily net assets, and 0.06% of its average daily net assets in excess
of $100 million. The Administrator also receives an annual fee of $17,000 for
accounting and record keeping services. Additionally, the Administrator
charges each Fund for servicing of shareholder accounts and registration of
each Fund's shares. The Administrator also charges each Fund for certain
expenses involved with the daily valuation of portfolio securities.
As of May 1, 1998, The Declaration Service Company (the "TRANSFER AGENT")
replaced NC Shareholder Services, LLC as the Transfer Agent for each Fund.
The Transfer Agent maintains the records of each shareholder's account,
answers shareholder inquiries concerning accounts, processes purchases and
redemptions of Fund shares, acts as dividend and distribution disbursing
agent, and performs other shareholder servicing functions. As compensation
for its services, the Transfer Agent receives an annual fee of $15,000.
Certain Trustees and officers of the Trust are also officers of the
Advisor, the Distributor or the Administrator.
Certain organizational expenses totaling $10,000 were paid by Quaker
Funds, Inc. on behalf of the Mid-Cap Value Fund to a company controlled by the
Fund's former Administrator, The Nottingham Company.
Amounts due to the Fund Sponsor represent organizational costs paid by the
Sponsor on behalf of the Funds, net of expense reimbursements due from the
Sponsor for expenses incurred in excess of operating expense limitations.
NOTE 3 -- SERVICE FEES
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Investment Company Act of
1940 (the "ACT"), adopted a Shareholder Servicing Agreement (the "AGREEMENT").
Pursuant to this Agreement, Quaker Funds, Inc. (the "SPONSOR") will provide
oversight with respect to each Fund's
44
QUAKER INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998
- ------------------------------------------------------------------------------
NOTE 3 -- SERVICE FEES -- (CONTINUED)
investment advisor, arrange for payment of investment advisory and
administrative fees, coordinate payments under each Fund's Distribution Plan,
develop communications with existing Fund shareholders, assist in responding
to shareholder inquiries, and will provide other shareholder services. As
compensation for these services, Quaker Funds, Inc. receives a fee according
to the table below of each Fund's average daily net assets. The Sponsor
intends to voluntarily waive all or a portion of its fee and reimburse
expenses of each Fund to limit total Fund operating expenses. There can be no
assurance that the voluntary fee waivers or reimbursements will continue. For
the year ended June 30, 1998, the amounts are as follows:
SPONSOR OPERATING FEE REIMBURSED
FEE(1) EXPENSES(1) WAIVERS EXPENSES
------- ----------- ------- ----------
Enhanced Stock Market Fund. 0.20% 1.00% $2,573 $49,880
Core Equity Fund........... 0.25 1.35 5,982 27,126
Aggressive Growth Fund..... 0.25 1.35 3,462 85,188*
Mid-Cap Value Fund......... 0.25 1.35 8,785 3,206
Small Cap Value Fund....... 0.25 1.35 5,451 40,418
Fixed Income Fund.......... 0.45 0.90 4,317 29,618
(1) Percentage of average daily net assets.
* Reimbursed expenses for the Aggressive Growth Fund include
$39,743 in reimbursed taxes.
NOTE 4 -- DEFERRED ORGANIZATION EXPENSES
Expenses totaling $33,324 incurred in connection with its organization and
the registration of its shares, which were originally paid by the Fund's
Sponsor, have been assumed by each Fund except the Mid-Cap Value Fund. The
Mid-Cap Value Fund incurred $10,000 in connection with its organization and
registration of shares and has assumed that amount.
The organization expenses are being amortized using the straight-line
method over a period of sixty months. Investors purchasing shares of the Fund
bear such expenses only as they are amortized against the Fund's investment
income.
NOTE 5 -- PURCHASES AND SALES OF INVESTMENTS
For the year ended June 30, 1998, purchases and sales of investment
securities (excluding short-term investments) aggregated as follows:
PURCHASES SALES
----------- -----------
Enhanced Stock Market Fund...... $ 3,941,252 $ 3,480,305
Core Equity Fund................ 5,050,407 1,525,742
Aggressive Growth Fund.......... 10,168,331 10,289,905
Mid-Cap Value Fund.............. 8,184,328 821,460
Small Cap Value Fund............ 4,315,317 2,796,629
Fixed Income Fund............... 6,912,136 2,314,524
45
<PAGE>
QUAKER INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998
- ------------------------------------------------------------------------------
NOTE 6 -- DEFERRED INCOME TAXES
As discussed in Note 1, the Aggressive Growth Fund did not comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies for the tax year ended August 31, 1997. Deferred income taxes have
been provided on the net unrealized appreciation on investments for the period
from November 25, 1996 (commencement of operations) to June 30, 1997. The
Fund's total deferred tax assets, deferred tax liabilities, and deferred tax
valuation allowances as of June 30, 1998 and June 30, 1997 are as follows:
1998 1997
-------- --------
Deferred tax asset arising from unrealized
depreciation on investments $ 0 $ 3,300
Less valuation allowance 0 0
-------- --------
0 3,300
Deferred tax liability arising from
unrealized appreciation on investments 0 (12,600)
-------- --------
Net deferred tax liability $ 0 $ (9,300)
======== ========
The valuation allowance did not change for the year ended June 30, 1998.
The Fund Sponsor has agreed to pay all taxes associated with the Fund's
current year tax status.
For the tax year beginning September 1, 1997, all of the Funds complied
with the provisions of the Internal Revenue Code applicable to regulated
investment companies.
NOTE 7 -- FUND SHARE TRANSACTIONS
At June 30, 1998, there were an unlimited number of shares of beneficial
interest with a $0.01 par value, authorized. The following table summarizes
the activity in shares of each Fund:
ENHANCED STOCK MARKET FUND
FOR THE PERIOD FROM
FOR THE YEAR NOVEMBER 25, 1996
ENDED (COMMENCEMENT OF OPERATIONS)
JUNE 30, 1998 TO JUNE 30, 1997
------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------- --------- ------- ---------
Shares sold.................... 49,185 $ 612,241 67,743 $ 707,083
Shares issued to shareholders
in reinvestment
of distributions............. 7,682 92,775 301 3,442
Shares redeemed................ (8,976) (115,790) (1,884) (21,131)
------- --------- ------- ---------
Net increase................... 47,891 $ 589,226 66,160 $ 689,394
========= =========
Shares outstanding:
Beginning of period.......... 66,160 0
------- -------
End of period................114,051 66,160
======= =======
46
<PAGE>
QUAKER INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998
- ------------------------------------------------------------------------------
NOTE 7 -- FUND SHARE TRANSACTIONS -- (CONTINUED)
CORE EQUITY FUND
FOR THE PERIOD FROM
FOR THE YEAR NOVEMBER 25, 1996
ENDED (COMMENCEMENT OF OPERATIONS)
JUNE 30, 1998 TO JUNE 30, 1997
------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------- ---------
Shares sold................... 295,920 $3,698,776 45,060 $458,899
Shares issued to shareholders
in reinvestment
of distributions............ 404 5,088 93 1,024
Shares redeemed............... (9,731) (125,037) (490) (5,756)
------- ---------- ------ --------
Net increase.................. 286,593 $3,578,827 44,663 $454,167
========== ========
Shares outstanding:
Beginning of period......... 44,663 0
------- ------
End of period............... 331,256 44,663
======= ======
AGGRESSIVE GROWTH FUND
FOR THE PERIOD FROM
FOR THE YEAR NOVEMBER 25, 1996
ENDED (COMMENCEMENT OF OPERATIONS)
JUNE 30, 1998 TO JUNE 30, 1997
------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------- --------- ------- ---------
Shares sold................... 37,598 $ 437,842 101,462 $1,078,209
Shares issued to shareholders
in reinvestment
of distributions............ 18,893 205,076 868 9,661
Shares redeemed............... (14,243) (157,765) (1,843) (19,963)
------- -------- ------- ----------
Net increase.................. 42,248 $485,153 100,487 $1,067,907
======== ==========
Shares outstanding:
Beginning of period......... 100,487 0
------- -------
End of period............... 142,735 100,487
======= =======
47
<PAGE>
QUAKER INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998
- ------------------------------------------------------------------------------
NOTE 7 -- FUND SHARE TRANSACTIONS -- (CONTINUED)
MID-CAP VALUE FUND
FOR THE PERIOD FROM
JANUARY 6, 1998
(COMMENCEMENT OF OPERATIONS)
TO JUNE 30, 1998
----------------------------
SHARES AMOUNT
------- ---------
Shares sold........................ 881,764 9,018,099
Shares issued to shareholders
in reinvestment
of distributions................. 0 0
Shares redeemed.................... (55,295) (605,240)
------- ----------
Net increase....................... 826,469 $8,412,859
==========
Shares outstanding:
Beginning of period.............. 0
-------
End of period.................... 826,469
=======
SMALL CAP VALUE FUND
FOR THE PERIOD FROM
FOR THE YEAR NOVEMBER 25, 1996
ENDED (COMMENCEMENT OF OPERATIONS)
JUNE 30, 1998 TO JUNE 30, 1997
------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------- ----------
Shares sold................... 177,952 $2,372,489 110,840 $1,112,853
Shares issued to shareholders
in reinvestment
of distributions............ 11,315 138,626 4,820 55,498
Shares redeemed............... (8,876) (116,373) 0 0
------- ---------- ------- ----------
Net increase.................. 180,391 $2,394,742 115,660 $1,168,351
========== ==========
Shares outstanding:
Beginning of period......... 115,660 0
------- -------
End of period............... 296,051 115,660
======= =======
48
<PAGE>
QUAKER INVESTMENT TRUST
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1998
- ------------------------------------------------------------------------------
NOTE 7 -- FUND SHARE TRANSACTIONS -- (CONTINUED)
FIXED INCOME FUND
FOR THE PERIOD FROM
FOR THE YEAR NOVEMBER 25, 1996
ENDED (COMMENCEMENT OF OPERATIONS)
JUNE 30, 1998 TO JUNE 30, 1997
------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------- ----------
Shares sold................... 504,805 $5,237,479 56,957 $565,661
Shares issued to shareholders
in reinvestment
of distributions 12,743 131,435 1,248 12,268
Shares redeemed............... (29,724) (306,299) 0 0
------- ---------- ------ --------
Net increase.................. 487,824 $5,062,615 58,205 $577,929
========== ========
Shares outstanding:
Beginning of period......... 58,205 0
------- ------
End of period............... 546,029 58,205
======= ======
49
<PAGE>
INDEPENDENT AUDITOR'S REPORT
August 20, 1998
To the Shareholders and Board of Trustees
Quaker Investment Trust
Valley Forge, Pennsylvania
We have audited the statements of assets and liabilities, including the
schedules of investments, of the QUAKER INVESTMENT TRUST (comprising,
respectively, the Quaker Enhanced Stock Market Fund, the Quaker Core Equity
Fund, the Quaker Aggressive Growth Fund, the Quaker Mid Cap Value Fund, the
Quaker Small-Cap Value Fund, and the Quaker Fixed Income Fund) as of June 30,
1998, 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 the selected per share data and ratios for each of the two
years in the period then ended (except for the Quaker Mid Cap Value Fund which
is for the period from January 6, 1998, commencement of operations, to June
30, 1998.) The Quaker Enhanced Stock Market Fund, the Quaker Core Equity
Fund, the Quaker Aggressive Growth Fund, the Quaker Small-Cap Value Fund, and
the Quaker Fixed Income Fund commenced operations on November 25, 1996. These
financial statements and per share data and ratios are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements and per share data and ratios based on our audit.
We conducted our audit 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 per
share data and ratios 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 June 30, 1998, 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and selected per share data and
ratios referred to above present fairly, in all material respects, the
financial position of the QUAKER INVESTMENT TRUST as of June 30, 1998, and the
results of its operations for the year then ended, the changes in net assets
for each of the two years in the period then ended, and the selected per share
data and ratios for each of the two years in the period then ended (except for
the Quaker Mid Cap Value Fund which is for the period from January 6, 1998,
commencement of operations, to June 30, 1998) in conformity with generally
accepted accounting principles.
Goldenberg Rosenthal Friedlander, LLP /S/
Jenkintown, Pennsylvania
50
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
THE QUAKER FAMILY
OF MUTUAL FUNDS
800-220-8888
http://www.quakerfunds.com
THE QUAKER FAMILY
OF MUTUAL FUNDS
ANNUAL REPORT
---------------------
JUNE 30, 1998
