COMBINED ANNUAL REPORT
TO SHAREHOLDERS
April 30,1999
Class R Shares
Riggs U.S. Treasury Money Market Fund
Riggs Prime Money Market Fund
Riggs U.S. Government SecuritiesFund
Riggs Stock Fund
Riggs Small Company Stock Fund
Class Y Shares
Riggs U.S. Treasury Money Market Fund
Riggs Prime Money Market Fund
Mutual Funds are not FDIC insured and are not deposits or obligations of or
guaranteed by Riggs Bank N.A. They involve investment risks, including the
possible loss of the principal amount invested.
[RIGGS LOGO]
Federated Securities Corp., Distributor
PRESIDENT'S MESSAGE
Dear Investor:
I am pleased to present the Annual Report for the Riggs Funds for the 12-month
period from May 1, 1998 through April 30, 1999. It begins with an investment
commentary by each portfolio manager, followed by a complete list of holdings
and the financial statements for the Riggs U.S. Treasury Money Market Fund,
Riggs Prime Money Market Fund, Riggs U.S. Government Securities Fund, Riggs
Stock Fund, and Riggs Small Company Stock Fund.
The performance highlights of each fund is as follows:
Riggs U.S. Treasury Money Market Fund
As the most conservative Riggs fund, Riggs U.S. Treasury Money Market Fund
invests exclusively in U.S. Treasury money market securities to help
shareholders earn daily income on their ready cash. Over the reporting period,
the fund's portfolio paid a total of $0.04 per share in dividends for Class Y
Shares and $0.03 per share in dividends for Class R Shares.* Assets in the fund
totaled $141.4 million at the end of the reporting period.
Riggs Prime Money Market Fund
This fund helps shareholders earn daily income on their ready cash through a
portfolio of high-quality money market securities. The fund's Class Y Shares
paid dividends totaling $0.05 per share while Class R Shares paid dividends
totaling $0.04 per share.* The fund ended the reporting period with total assets
of $433.5 million.
Riggs U.S. Government Securities Fund
This fund's government bond portfolio paid dividends totaling $0.50 per share
for Class R Shares, while its net asset value rose from $9.77 to $9.85. The
dividends and net asset value increase resulted in a total return of 6.03%
(4.03% adjusted for the maximum 2.00% redemption fee) for Class R Shares.**
Assets in the fund totaled $38.9 million at the end of the reporting period,
which were invested primarily in government agency securities (61.7%), followed
by U.S. Treasury obligations (19.4%) and a repurchase agreement (15.5%), and
corporate bonds (2.6%).
Riggs Stock Fund
During the period, the fund's diversified portfolio of high-quality stocks--
which included many household names like Alcoa, American Express, Compaq, Intel,
Johnson & Johnson, Mobil, Sears, and Xerox--produced a total return of 6.50%
(4.60% adjusted for the maximum 2.00% redemption fee) for Class R Shares.**
These returns were the result of $0.04 per share in dividend income and $1.71
per share in capital gains for Class R Shares. The fund's total net assets
totaled $101.7 million at the end of the reporting period.
Riggs Small Company Stock Fund
As the most aggressive fund in the Riggs family, this fund invests in carefully
selected stocks issued by small companies.+ In an extremely weak environment for
small-company stocks, the fund produced a negative total return of (30.33%), or
(31.53%) adjusted for the maximum 2.00% redemption fee, for Class R Shares.**
These returns were the result of a decline in net asset value. Class R Shares
paid $1.85 per share in capital gains. At the end of the reporting period, fund
assets totaled $38.8 million.
Thank you for pursuing your financial goals through the diversification and
professional management of the Riggs Funds. We'll continue to update you on the
progress of your investment.
Sincerely,
/S/ Edward C. Gonzales
Edward C. Gonzales
President
June 15, 1999
* An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
money market funds seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the funds.
** Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
+ Small cap stocks have historically experienced greater volatility than
average.
INVESTMENT REVIEW
Riggs U.S. Treasury Money Market Fund
("Treasury Fund")
Riggs Prime Money Market Fund ("Prime Fund")
In mid-July 1998, concerns about the Russian economy began to increase and
spread to other countries. Investors feared a global economic meltdown and the
Federal Reserve Board and other central banks came to the rescue by cutting
interest rates early in the fourth quarter. The rate cuts fueled a sharp equity
market rebound. In the U.S., the healthy economic environment of low inflation,
low interest rates and strong consumer confidence fueled strong equity returns.
Treasury securities, considered the safest of havens, benefited from the global
flight to quality and posted their strongest annual performance since 1986.
In early 1999, the market was buffeted by reports that continued to suggest a
strong and expanding economy. These included higher personal spending, increased
manufacturing activity, low unemployment, higher factory orders and expanding
consumer credit. The yield curve between the 3 month and one year Treasury bills
widened from six to 23 basis points due primarily to a rise in rates in the
one-year area. Commercial paper yields moved from a slightly inverted curve to a
slightly positive curve going out as far as a year. We took opportunities to
extend the average maturity of the Prime and Treasury Funds at points when the
yields on short-term instruments such as Treasury bills and coupons, commercial
paper and short corporate issues looked attractive versus repurchase agreements.
Riggs U.S. Government Securities Fund
The last year in the bond market has been the best and worst of times for
investors. Key factors affecting the market in the second half of 1998 included
the emerging market crisis, hedge fund deleveraging, the budget surplus,
reductions in Treasury supply, falling commodity prices, and a flight to
quality. In response to severe turmoil in the global financial markets, the
Federal Reserve Board (the "Fed") stepped in with a series of three rate cuts
between September 1998 and November 1998 that took the federal funds rate from
5.50% to 4.75%. Treasury securities did very well during this period due to a
global flight to quality with the 30 year Treasury returning 17.1% for 1998. The
consumer remained confident and the wealth effect from a soaring stock market
remained intact supporting spending. The combination of low interest rates and
record low unemployment kept the housing market strong. The consumer price
index, meanwhile, came in at 1.6% for 1998, the smallest increase in 12 years.
Continued strong economic growth took its toll on the bond market in the first
few months of 1999 as inflationary expectations rose in response to rising oil
prices and sizable employment gains. Treasury yields rose sharply posting the
third-worst February performance of this decade. The expectation of a Fed on
hold for the near-term led most fixed income managers to reduce exposure to
Treasuries and overweight agencies, corporate issues and mortgages in order to
capture additional yield.
Our duration between October 1998 and April 1999 was maintained at a level
slightly below our benchmark. The bond market appeared to be vulnerable to
stronger economic growth and rising inflationary expectations led by a 50% rise
in oil prices since February 1998. The yield spread between one year and 30 year
Treasury securities widened from 58 to 92 basis points led by the rise in
inflationary expectations. We expect some form of a rally during the second
quarter and will likely position portfolios to take advantage of this situation
once it appears that an intermediate low has been seen. We believe Treasury
securities will likely be one of the better performing sectors in the next few
months.
Riggs Stock Fund ("Stock Fund")
Riggs Small Company Stock Fund ("Small Company Fund")
Over the past fiscal year ended April 30, 1999, the global equity markets
experienced the highest volatility since 1990. Foreign currency instability and
weak economies overseas were offset by a continued strong domestic economy. This
past year we also witnessed the second president since Andrew Johnson to be
impeached by the House of Representatives. The reaction to all the news in the
financial markets was an initial rush to the biggest and safest securities, yet
we ended the year with the nascent improvement of worldwide economies and the
broadening out of the equity markets. For the year as a whole, it was one of the
narrowest markets in over 30 years as the top 10% of stocks in the general
market generated 75% of the returns. It was also a challenging year for active
money managers. However, everything moves in cycles and as we start a new fiscal
year, we are encouraged by the improved earnings growth outlook for a large
number of companies and the market's appreciation of securities offering
excellent long term value.
For the fiscal year ended April 30, 1999, the Class R Shares of the Stock Fund
generated a total return of 6.50% based on net asset value while the Class R
Shares of the Small Company Fund generated a total return of (30.33%) based on
net asset value.* Our investment philosophy in managing both equity funds is to
balance long-term valuation with the catalyst of short-term earnings
acceleration. We employ our methodology which we call Value Momentum, by
initially analyzing four key factors: (1) relative price; (2) earnings growth
relative to the stock's price-to-earnings multiple; (3) earnings estimate
revisions; and (4) relative price strength. For stocks scoring highly in this
process, we focus on the fundamental changes that management is implementing
within these companies to generate earnings growth. We then invest in those
companies in which we have the most confidence in management.
We maintain a broad diversification of stocks among industries. In the Stock
Fund our largest sector exposure has been in technology, with IBM, our largest
stock in the sector and in the Stock Fund, at 3.0%. Management has done a
superior job turning around the earnings prospects by focusing on services,
software and products. At fiscal year end our largest overweights were in energy
and the basic materials sector. We see a higher degree of confidence in earnings
growth in these sectors based in part on industry consolidation and company
restructuring. Mobil, which is soon to be merged with Exxon, and BP AMOCO,
formed by the merger of British Petroleum and Amoco, are the leading
consolidators in the energy sector. We are encouraged by the restructuring at
Georgia Pacific to generate an accelerating earnings growth through cost cutting
and productivity initiatives. These initiatives were implemented several years
ago and are currently bearing fruit.
In the Small Company Fund, the current valuation of this sector of the market is
the most attractive we have seen in 30 years. We believe the opportunities
available are great as confidence in earnings growth appears to be improving.
Finance and consumer cyclicals are the largest sectors we have invested in, with
health care being the largest overweight. Rent-A-Center, Interdent, and
Apartment Investment & Management are some of the leading stocks in these
sectors. All three companies are generating improving earnings growth as they
consolidate their lead in their respective industries.
We believe the outlook for stocks to be encouraging due to the improved
prospects for corporate earnings growth as worldwide economies rebound. Through
all market environments, we believe that our disciplined focus on undervalued
companies with solid earnings growth should reward shareholders.
*Performance quoted represents past performance and is not indicative of future
results. Investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
Riggs U.S. Government Securities Fund
Class R Shares
Growth of $10,000 Invested in Riggs U.S. Government Securities Fund, Class R
Shares
The graph below illustrates the hypothetical investment of $10,000* in the Riggs
U.S. Government Securities Fund, Class R Shares (the "Fund") from May 11, 1992
(start of performance) to April 30, 1999, compared to the Lehman Brothers
Government/Corporate Total Index ("LBGCTI").+
"Graphic representation "A" omitted. See Appendix."
AVERAGE ANNUAL TOTAL RETURN** FOR THE PERIOD ENDED APRIL 30, 1999
1 Year 4.03%
5 Years 6.59%
Start of Performance (5/11/92) 6.93%
Past performance is not predictive of future performance. Your investment return
and principal value will fluctuate so when shares are redeemed, they may be
worth more or less than original cost. Mutual funds are not obligations of or
guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 3.50% ($10,000 investment minus $350 sales charge =
$9,650). The Fund's performance assumes the reinvestment of all dividends and
distributions. The LBGCTI has been adjusted to reflect reinvestment of
dividends on securities in the index. Effective December 18, 1995, the maximum
sales charge increased to 4.75%. Effective July 1, 1998, the front-end sales
charge was eliminated, and a contingent deferred sales charge of 2.00% was
implemented for newly purchased shares.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The LBGCTI is not adjusted to reflect sales charges, expenses, or other fees
that the Securities and Exchange Commission requires to be reflected in the
Fund's performance. This index is unmanaged.
Riggs Stock Fund
Class R Shares
Growth of $10,000 Invested in Riggs Stock Fund, Class R Shares
The graph below illustrates the hypothetical investment of $10,000* in the Riggs
Stock Fund, Class R Shares (the "Fund") from May 11, 1992 (start of performance)
to April 30, 1999, compared to the Standard & Poor's 500 Index ("S&P 500").+
"Graphic representation "B" omitted. See Appendix."
AVERAGE ANNUAL TOTAL RETURN** FOR THE PERIOD ENDED APRIL 30, 1999
1 Year 4.60%
5 Years 21.26%
Start of Performance (5/11/92) 18.43%
Past performance is not predictive of future performance. Your investment return
and principal value will fluctuate so when shares are redeemed, they may be
worth more or less than original cost. Mutual funds are not obligations of or
guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 3.50% ($10,000 investment minus $350 sales charge =
$9,650). The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 has been adjusted to reflect reinvestment of
dividends on securities in the index. Effective December 18, 1995, the maximum
sales charge increased to 5.75%. Effective July 1, 1998, the front-end sales
charge was eliminated, and a contingent deferred sales charge of 2.00% for
newly purchased Class R Shares was implemented.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+S&P 500 is not adjusted to reflect sales charges, expenses, or other fees that
the Securities and Exchange Commission requires to be reflected in the Fund's
performance. This index is unmanaged.
Riggs Small Company Stock Fund
Class R Shares
Growth of $10,000 Invested in Riggs Small Company Stock Fund, Class R Shares
The graph below illustrates the hypothetical investment of $10,000* in the Riggs
Small Company Stock Fund, Class R Shares (the "Fund") from February 27, 1995
(start of performance) to April 30, 1999, compared to the Russell 2000 Index
("Russell 2000").+
"Graphic representation "C" omitted. See Appendix."
AVERAGE ANNUAL TOTAL RETURN** FOR THE PERIOD ENDED APRIL 30, 1999
1 Year (31.53)%
Start of Performance (2/27/95) 13.79%
Past performance is not predictive of future performance. Your investment return
and principal value will fluctuate so when shares are redeemed, they may be
worth more or less than original cost. Mutual funds are not obligations of or
guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 3.50% ($10,000 investment minus $350 sales charge =
$9,650). The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 has been adjusted to reflect reinvestment of
dividends on securities in the index. Effective December 18, 1995, the maximum
sales charge increased to 5.75%. Effective July 1, 1998, the front-end sales
charge was eliminated and a contingent deferred sales charge of 2.00% for newly
purchased Class R Shares was implemented.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The Russell 2000 is not adjusted to reflect sales charges, expenses, or other
fees that the Securities and Exchange Commission requires to be reflected in
the Fund's performance. This index is unmanaged.
PORTFOLIO OF INVESTMENTS
Riggs U.S. Treasury Money Market Fund
April 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
Principal
Amount Value
U.S. Treasury Obligations--25.8%
U.S. Treasury Notes--25.8%
$9,400,000 5.375%, 1/31/2000 $ 9,445,188
9,000,000 5.500%, 2/29/2000 9,044,772
8,500,000 5.875%, 7/31/1999 8,525,654
9,400,000 (1) 5.875%, 11/15/1999 9,458,162
Total U.S. Treasury Obligations 36,473,776
(2) Repurchase Agreements--74.0%
34,902,000 Donaldson, Lufkin and Jenrette Securities Corp., 4.870%, dated 4/30/1999, due 5/3/1999 34,902,000
34,901,000 Paine Webber, 4.840%, dated 4/30/1999, due 5/3/1999 34,901,000
34,902,000 Prudential Securities, Inc., 4.830%, dated 4/30/1999, due 5/3/1999 34,902,000
Total Repurchase Agreements 104,705,000
Total Investments (at amortized cost)(3) $141,178,776
</TABLE>
(1) Certain principal amounts on loan to broker.
(2) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(3) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($141,406,436) at April 30, 1999.
(See Notes which are an integral part of the Financial Statements)
PORTFOLIO OF INVESTMENTS
Riggs Prime Money Market Fund
April 30, 1999
<TABLE>
<CAPTION>
Principal Value
Amount
Certificate Of Deposit--1.1%
<C> <S> <C>
$ 5,000,000 Canadian Imperial Bank of Commerce, NY, 5.120%, 2/23/2000 $ 4,998,790
Commercial Paper--35.3%
Chemicals--4.2%
18,000,000 Ciba Specialty Chemicals Corp., 4.820% - 4.850%, 5/11/1999 -
6/15/1999 17,961,717
Finance--24.1%
15,000,000 American General Finance Corp., 4.830%, 5/4/1999 14,993,963
8,000,000 American Express, 4.780%, 6/30/1999 7,936,267
18,000,000 Apreco, Inc., 4.820% - 4.850%, 5/24/1999 - 7/21/1999 17,902,836
10,000,000 CIT Group, Inc., 4.830%, 5/17/1999 9,978,533
1,000,000 Chase Manhattan Corp., 7.750%, 11/1/1999 1,013,480
6,000,000 Citibank Capital Markets Assets, 4.820%, 5/26/1999 5,979,917
13,000,000 Fleet Funding Corp., 4.800% - 4.820%, 5/20/1999 - 6/3/1999 12,952,080
5,786,000 Fleet Financial Group, Inc., 4.820%, 5/10/1999 - 5/14/1999 5,777,823
10,000,000 Household Finance Corp., 4.840%, 5/7/1999 9,991,967
10,000,000 Merrill Lynch & Co., Inc., 5.313%, 11/22/1999 10,006,143
8,000,000 Salomon Smith Barney Holdings, Inc., 4.810%, 7/9/1999 7,926,247
Total 104,459,256
Finance - Automotive--3.9%
2,000,000 General Motors Acceptance Corp., 1994-A, 6.500%, 1/17/2000 2,020,297
15,000,000 Daimler Benz North America Corp., 4.830%, 5/12/1999 14,977,863
Total 16,998,160
Health Technology--1.8%
8,000,000 Glaxo Wellcome PLC, 4.780%, 7/26/1999 7,908,649
Refining & Marketing--1.3%
5,629,000 Equilon Enterprise, 4.830%, 5/3/1999 5,627,490
Total Commercial Paper 152,955,272
Corporate Bonds--22.8%
Consumer Durables--0.9%
4,000,000 USL Capital Corp., 8.125%, 2/15/2000 4,091,740
Consumer Non-Durables--1.1%
4,500,000 PepsiCo, Inc., 6.375%, 12/31/1999 4,537,248
Finance--14.6%
13,429,000 Associates Financial Services Co. of Puerto Rico, Inc.,
(Guaranteed by Associates Corp. of North America), 4.810% -
4.850%, 5/18/1999 - 5/25/1999 13,390,101
5,825,000 Bear Stearns Cos., Inc., 7.625%, 9/15/1999 5,876,145
5,000,000 Beneficial Corp., 8.375%, 12/29/1999 5,106,967
1,650,000 Caterpillar Financial Services Corp., 6.800%, 7/1/1999 1,655,032
2,500,000 CIT Group, Inc., 6.250%, 10/4/1999 2,512,760
2,601,000 Chase Manhattan Corp., 10.000%, 6/15/1999 2,613,938
5,000,000 Chemical Banking Corp., 5.200%, 6/10/1999 5,001,412
1,670,000 Fleet Financial Group, Inc., 8.625%, 12/15/1999 1,707,100
4,000,000 IBM Credit Corp., 5.065%, 4/12/2000 3,997,335
5,550,000 International Lease Finance Corp., 5.750%, 12/15/1999 5,571,814
$ 3,000,000 (1) International Lease Finance Corp., 6.375%, 1/18/2000 $ 3,025,635
2,550,000 Morgan Stanley, Dean Witter & Co., 6.375%, 1/18/2000 2,571,623
8,000,000 Salomon Smith Barney Holdings, Inc., 7.000%, 5/15/1999 8,004,039
1,500,000 Salomon Smith Barney Holdings, Inc., 6.820%, 7/26/1999 1,506,382
775,000 Travelers Group, Inc., 7.250%, 1/15/2000 785,837
Total 63,326,120
Finance - Automotive--5.1%
2,000,000 Chrysler Financial Co. L.L.C., 6.160%, 7/28/1999 2,005,585
4,000,000 Ford Motor Credit Corp., 7.750%, 10/1/1999 4,044,951
3,797,000 Ford Motor Credit Corp., 8.375%, 1/15/2000 3,879,437
8,291,000 General Motors Acceptance Corp., 8.625%, 6/15/1999 8,319,473
2,000,000 General Motors Acceptance Corp., 6.250%, 1/6/2000 2,014,409
2,000,000 General Motors Acceptance Corp., 7.000%, 3/1/2000 2,029,081
Total 22,292,936
Health Technology--1.1%
4,585,000 American Home Products Corp., 7.700%, 2/15/2000 4,675,425
Total Corporate Bonds 98,923,469
Corporate Notes--4.3%
Finance--3.1%
5,000,000 American Express Co., 4.780%, 7/26/99 4,942,905
4,000,000 Beneficial Corp., 7.990%, 2/16/2000 4,084,442
1,000,000 Beneficial Corp., 9.200%, 8/25/1999 1,010,784
3,600,000 Household Finance Corp., 4.430%, 6/2/1999 3,596,718
Total 13,634,849
Finance - Automotive--1.2%
5,000,000 Ford Motor Credit Corp., 8.625%, 1/24/2000 5,120,000
Total Corporate Notes 18,754,849
(2) Government Agencies--9.1%
Federal National Mortgage Association--0.3%
1,250,000 4.637%, 5/25/1999 1,249,922
Student Loan Marketing Association--8.8%
11,000,000 (1) 4.566%, 8/2/1999 10,996,883
6,150,000 4.717%, 3/7/2001 6,092,051
2,000,000 5.037%, 7/15/1999 2,000,097
4,000,000 5.047%, 3/8/2000 4,003,599
10,000,000 5.107%, 1/12/2000 9,997,896
5,000,000 5.207%, 11/10/1999 5,001,282
Total 38,091,808
Total Government Agencies 39,341,730
(2) Notes - Variable--12.2%
Consumer Durables--1.1%
4,715,000 USL Capital Corp., 5.280%, 7/1/1999 4,717,907
Finance--9.9%
$ 5,000,000 Allstate Life Insurance Co., 4.986%, 6/30/1999 $ 5,000,000
3,000,000 Chemical Banking Corp., 5.373%, 10/26/1999 3,005,444
13,000,000 IBM Credit Corp., 4.970%, 11/02/1999 13,004,400
4,000,000 Merrill Lynch & Co., Inc., 5.146%, 10/04/1999 4,005,024
10,000,000 Morgan Stanley, Dean Witter & Co., 5.100%, 3/13/2001 10,000,000
3,000,000 NationsBank Corp., 5.060%, 10/22/1999 3,001,264
5,000,000 NationsBank Corp., 5.123%, 10/22/1999 5,003,342
Total 43,019,474
Finance-Insurance--1.2%
5,000,000 Allstate Life Insurance Co., GIC, 5.066%, 11/30/1999 5,000,000
Total Notes - Variable 52,737,381
(3) Repurchase Agreements--14.7%
21,239,000 Paine Webber, 4.840%, dated 4/30/1999, due 5/3/1999 21,239,000
21,240,000 Donaldson, Lufkin and Jenrette Securities Corp., 4.870%, dated
4/30/1999, due 5/3/1999 21,240,000
21,240,000 Prudential Securities, Inc., 4.830%, dated 4/30/1999, due 5/3/1999 21,240,000
Total Repurchase Agreements 63,719,000
Total Investments (at amortized cost)(4) $431,430,491
</TABLE>
(1) Certain principal amounts on loan to broker. (2) Current rate and next reset
date shown.
(3) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(4) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($433,475,244) at April 30, 1999.
The following acronyms are used throughout this portfolio:
GIC--Guaranteed Investment Contract
(See Notes which are an integral part of the Financial Statements)
PORTFOLIO OF INVESTMENTS
Riggs U.S. Government Securities Fund
April 30, 1999
<TABLE>
<CAPTION>
Principal Amount Value
Corporate
Bonds--2.6%
Finance--2.6%
<S> <C> <C>
$1,000,000 EQCC Home Equity Loan Trust 1997-3, Class A8, 6.41%, 12/15/2004 $ 997,920
Total Corporate Bonds (identified cost $999,844) 997,920
Government Agencies--61.7%
Federal Home Loan Mortgage Corporation--26.7%
9,700,000 5.75%, 7/15/2003 9,751,701
620,000 6.79%, 5/24/2001 620,769
Total 10,372,470
Federal National Mortgage Association--16.0%
3,000,000 (1) 5.625%, 3/15/2001 3,018,960
888,000 6.00%, 5/15/2008 894,216
658,348 7.50%, 6/1/2012 679,541
1,000,000 8.50%, 2/1/2005 1,023,230
433,718 9.50%, 6/25/2018 463,107
169,820 9.50%, 7/25/2019 180,872
Total 6,259,926
Government National Mortgage Association--19.0%
1,200,905 6.50%, 5/15/2028 1,194,155
2,108,096 7.00%, 8/15/2027 2,146,969
1,996,858 7.50%, 10/15/2027 2,058,640
1,919,244 8.00%, 10/15/2027 1,999,008
Total 7,398,772
Total Government Agencies (identified cost $24,447,972) 24,031,168
U.S. Treasury Obligations--19.4%
U.S. Treasury Bonds--19.4%
550,000 (1) 6.125%, 11/15/2027 568,293
4,251,000 (1) 6.25%, 8/15/2023 4,425,504
2,350,000 6.50%, 11/15/2026 2,538,611
1,000 (1) 6.50%, 5/15/2005 1,059
Total U.S. Treasury Obligations (identified cost $7,404,912) 7,533,467
(2) Repurchase Agreement--15.5%
6,039,000 Donaldson, Lufkin and Jenrette Securities Corp., 4.87%, dated 4/30/1999,
due 5/3/1999 (at amortized cost) 6,039,000
Total Investments (identified cost $38,891,728)(3) $38,601,555
</TABLE>
(1) Certain principal amounts on loan to broker.
(2) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(3) The cost of investments for federal tax purposes amounts to $38,891,728. The
net unrealized depreciation of investments on a federal tax basis amounts to
$290,173 which is comprised of $233,096 appreciation and $523,269
depreciation at April 30, 1999.
Note: The categories of investments are shown as a percentage of net assets
($38,927,951) at April 30, 1999.
(See Notes which are an integral part of the Financial Statements)
PORTFOLIO OF INVESTMENTS
Riggs Stock Fund
April 30, 1999
<TABLE>
<CAPTION>
Shares Value
Common Stocks--96.3%
<C> <S> <C>
Basic Materials--6.0%
28,640 Alcoa, Inc. $ 1,782,840
28,240 Fort James Corp. 1,073,120
21,681 Georgia-Pacific Corp. 2,005,493
40,620 USX-U.S. Steel Group, Inc. 1,228,755
Total 6,090,208
Capital Goods--10.2%
29,520 (1) Ingersoll-Rand Co. 2,042,415
21,870 Textron, Inc. 2,014,774
28,855 Tyco International Ltd. 2,344,469
15,245 United Technologies Corp. 2,208,619
31,085 Waste Management, Inc. 1,756,303
Total 10,366,580
Consumer Cyclical--8.4%
16,309 Eastman Kodak Co. 1,217,059
86,709 (2) Office Depot, Inc. 1,907,587
34,275 Sears, Roebuck & Co. 1,576,650
55,940 TJX Cos., Inc. 1,863,501
24,700 (2) UAL Corp. 1,994,525
Total 8,559,322
Consumer Services--5.4%
108,220 (2) Cendant Corp. 1,947,960
134,555 (1)(2) Modis Professional Services, Inc. 1,555,792
23,580 Tribune Co. 1,967,455
Total 5,471,207
Consumer Staples--7.5%
41,415 American Stores Co. 1,307,161
44,945 Philip Morris Cos., Inc. 1,575,884
34,230 (1) Nabisco Holding, Inc., Class A 1,294,322
44,684 (2) Safeway, Inc. 2,410,143
48,385 (2) The Pepsi Bottling Group, Inc. 1,019,109
Total 7,606,619
Technology--18.8%
35,255 (1)(2) Apple Computer, Inc. 1,621,730
20,705 (2) Cisco Systems, Inc. 2,361,664
51,645 Compaq Computer Corp. 1,152,329
9,480 (2) EMC Corp. Mass 1,032,728
24,730 Intel Corp. 1,513,167
17,730 International Business Machines Corp. 3,708,894
20,060 (1) Koninklijke (Royal) Philips Electronics NV, ADR 1,712,623
33,242 Lucent Technologies, Inc. 1,998,675
38,475 (2) SCI Systems, Inc. 1,464,455
42,840 Xerox Corp. 2,516,850
Total 19,083,115
Energy--10.0%
19,225 BP Amoco PLC, ADR $ 2,176,030
42,750 Coastal Corp. 1,635,188
22,430 Mobil Corp. 2,349,543
18,705 Schlumberger Ltd. 1,194,782
45,620 Texaco, Inc. 2,862,655
Total 10,218,198
Finance--13.8%
23,230 American Express Co. 3,035,871
39,545 Bank One Corporation 2,333,155
31,462 Bank of America Corp. 2,265,264
45,050 BankBoston Corp. 2,207,450
37,730 Hartford Financial Services Group, Inc. 2,223,712
48,505 Washington Mutual, Inc. 1,994,768
Total 14,060,220
Health Care--6.4%
27,815 American Home Products Corp. 1,696,715
18,649 Cardinal Health, Inc. 1,115,443
110,570 (2) Humana, Inc. 1,506,516
22,430 Johnson & Johnson 2,186,925
Total 6,505,599
Utilities-Gas & Electric--3.1%
36,865 Edison International 903,193
31,455 GPU, Inc. 1,199,222
21,185 Peco Energy Co. 1,004,963
Total 3,107,378
Utilities-Telephone--6.7%
42,503 AT&T Corp. 2,146,376
22,010 Ameritech Corp. 1,506,309
18,630 GTE Corp. 1,247,045
23,115 (2) MCI Worldcom, Inc. 1,899,764
Total 6,799,494
Total Common Stocks (identified cost $73,317,217) 97,867,940
Preferred Stock--0.5%
Consumer Services--0.5%
15,532 Cendant Corp., Conv. Pfd., $.94 (identified cost $595,424) 492,170
Principal
Amount Value
(3) Repurchase Agreement--4.3%
$4,415,000 Donaldson, Lufkin and Jenrette Securities Corp., 4.87%, dated 4/30/1999,
due 5/3/1999 (at amortized cost) $4,415,000
Total Investments (identified cost $78,327,641)(4) $102,775,110
</TABLE>
(1) Certain shares on loan to broker.
(2) Non-income producing security.
(3) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(4) The cost of investments for federal tax purposes amounts to $78,745,324. The
net unrealized appreciation of investments on a federal tax basis amounts to
$24,029,786 which is comprised of $27,577,389 appreciation and $3,547,603
depreciation at April 30, 1999.
Note: The categories of investments are shown as a percentage of net assets
($101,656,607) at April 30, 1999.
The following acronym is used throughout this portfolio:
ADR--American Depositary Receipt
(See Notes which are an integral part of the Financial Statements)
PORTFOLIO OF INVESTMENTS
Riggs Small Company Stock Fund
April 30, 1999
<TABLE>
<CAPTION>
Shares Value
Common Stocks--94.1%
<C> <S> <C>
Basic Materials--3.4%
19,100 (1) JLM Industries, Inc. $ 99,080
13,285 Southdown, Inc. 851,070
12,565 (1) Stillwater Mining Co. 355,747
Total 1,305,897
Capital Goods--8.3%
23,549 (1) Aeroflex, Inc. 344,404
31,920 (1)(2) Building One Services Corp. 486,780
49,320 (1) Group Maintenance America Corp. 659,655
9,770 (1) Landstar System, Inc. 380,419
25,890 (1) SLI, Inc. 710,357
19,805 (1) Zebra Technologies Corp., Class A 658,515
Total 3,240,130
Consumer Cyclical--17.5%
16,332 (1) Atlantic Coast Airlines Holdings, Inc. 504,250
18,270 (1) Furniture Brands International, Inc. 457,892
73,960 (1) Goody's Family Clothing, Inc. 665,640
35,365 (1) Just For Feet, Inc. 446,483
53,950 (1) Mesa Air Group, Inc. 364,163
16,255 (1) Pacific Sunwear of California 602,959
65,605 (1) Quaker Fabric Corp. 377,229
40,485 (1) Rainbow Rentals, Inc. 475,699
30,230 (1) Rent-A-Center, Inc. 937,130
13,315 (1) Ryanair Holdings PLC, ADR 595,845
17,345 SkyWest, Inc. 450,970
22,199 (1) United Stationers, Inc. 378,770
43,107 (1) White Cap Industries, Inc. 522,672
Total 6,779,702
Consumer Services--8.0%
18,576 (1)(2) Action Performance Cos., Inc. 629,262
33,650 (1) Global Imaging Systems, Inc. 483,719
39,075 (1) Metamor Worldwide, Inc. 764,405
33,895 (1) Rare Hospitality International, Inc. 610,110
15,131 (1) ResortQuest International, Inc. 253,444
42,379 (1) Travel Services International, Inc. 376,114
Total 3,117,054
Consumer Staples--5.4%
94,189 (1) NBTY, Inc. 476,832
19,353 (1) Performance Food Group Co. 512,855
34,795 Richfood Holdings, Inc. 434,938
17,800 (1)(2) Suiza Foods Corp. 668,613
Total 2,093,238
Energy--6.3%
51,777 (1) National-Oilwell, Inc. $ 673,101
74,246 (1) Newpark Resources, Inc. 682,135
72,960 (1) Patterson Energy, Inc. 588,240
18,245 Tidewater, Inc. 483,493
Total 2,426,969
Financial--21.6%
43,745 Advanta Corp., Class B 475,727
50,550 Allied Capital Corp. 909,900
87,595 (1) Amresco, Inc. 569,368
17,575 Apartment Investment & Management Co., Class A 704,098
35,035 ESG RE Ltd. 595,595
16,590 (1) FPIC Insurance Group, Inc. 746,550
11,620 First Charter Corp. 251,283
15,290 First Industrial Realty Trust 410,919
22,675 Hubco, Inc. 802,128
59,985 Imperial Credit Commercial Mortgage Investment Corp. 588,603
42,650 (1) Insurance Management Solutions Group, Inc. 447,825
42,131 (1) Long Beach Financial Corp. 468,707
12,735 Peoples Bancorp, Inc. 134,513
13,445 Southwest Securities Group, Inc. 711,745
14,272 Weingarten Realty Investors 591,395
Total 8,408,356
Healthcare--13.1%
15,025 Bindley Western Industries, Inc. 463,897
22,508 (1) Boron, LePore & Associates, Inc. 230,707
19,866 Cooper Companies, Inc. 312,890
56,360 (1) Coventry Health Care, Inc. 517,808
17,992 (1) InfoCure Corp. 473,415
79,208 (1) InterDent, Inc. 554,455
14,395 (1) Maxxim Medical, Inc. 229,420
67,436 (1) Physician Reliance Network, Inc. 556,347
12,199 (1) Priority HealthCare Corp., Class B 618,337
18,141 (1) Trigon Healthcare, Inc. 575,977
32,435 (1) United Payors & United Providers, Inc. 571,667
Total 5,104,920
Technology--2.9%
40,295 (1) Brooktrout Technology, Inc. 601,907
22,210 (1) ScanSource, Inc. 510,830
Total 1,112,737
Technology Services--6.4%
36,907 (1) Axent Technologies, Inc. 346,003
32,572 (1) Genesys Telecommunications Laboratories, Inc. 582,225
39,304 (1) International Telecommunication Data Systems, Inc. 444,627
Shares or
Principal
Amount Value
Common Stocks--continued
Technology Services--continued
57,273 (1) Savior Technology Group, Inc. $ 515,457
30,755 (1) Symix Systems, Inc. 242,195
15,410 (1) Tech Data Corp. 360,209
Total 2,490,716
Utilities--1.2%
17,495 Northwestern Corp. 452,683
Total Common Stocks (identified cost $36,537,517) 36,532,402
(3) Repurchase Agreement--6.3%
$2,465,000 Donaldson, Lufkin and Jenrette Securities Corp., 4.87% dated 4/30/1999, due 5/3/1999 (at
amortized cost) 2,465,000
Total Investments (identified cost $39,002,517)(4) $38,997,402
</TABLE>
(1) Non-income producing security.
(2) Certain shares on loan to broker.
(3) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(4) The cost of investments for federal tax purposes amounts to $39,002,517. The
net unrealized depreciation of investments on a federal tax basis amounts to
$5,115 which is comprised of $4,387,788 appreciation and $4,392,903
depreciation at April 30, 1999.
Note: The categories of investments are shown as a percentage of net assets
($38,828,719) at April 30, 1999.
The following acronym is used throughout this portfolio:
ADR--American Depositary Receipt
(See Notes which are an integral part of the Financial Statements)
STATEMENTS OF ASSETS AND LIABILITIES
Riggs Funds
April 30, 1999
<TABLE>
<CAPTION>
U.S. Treasury Prime U.S. Government
Money Market Money Market Securities
Fund Fund Fund
<S> <C> <C> <C>
Assets:
Investments in securities, at value $ 36,473,776 $367,711,491 $32,562,555
Investments in repurchase agreements 104,705,000 63,719,000 6,039,000
Total investments, at amortized cost and value 141,178,776 431,430,491 38,601,555
Cash 400 -- 3,733
Collateral for securities loaned, at fair value (Note 2) 9,905,250 2,625,000 5,637,041
Income receivable 602,029 2,938,909 446,443
Receivable for shares sold 328,571 107,003 87,018
Receivable for investments sold -- -- --
Deferred organizational costs -- -- --
Other Assets -- -- --
Total assets 152,015,026 437,101,403 44,775,790
Liabilities:
Income distribution payable 363,317 831,098 129,086
Payable for investments purchased -- -- --
Payable upon return of securities loaned (Note 2) 9,905,250 2,625,000 5,637,041
Payable for shares redeemed 329,869 146,861 38,783
Accrued expenses 10,154 23,200 42,929
Total liabilities 10,608,590 3,626,159 5,847,839
Net Assets $141,406,436 $433,475,244 $38,927,951
Net Assets Consists of:
Paid in capital $141,406,436 $433,762,588 $41,190,425
Net unrealized appreciation (depreciation) of investments -- -- (290,173)
Accumulated net realized gain (loss) on investments -- (867,389) (2,052,484)
Undistributed net investment income -- 580,045 80,183
Net operating loss -- -- --
Total Net Assets $141,406,436 $433,475,244 $38,927,951
Class Y Shares $138,097,102 $425,053,665 --
Class R Shares $ 3,309,334 $ 8,421,579 $38,927,951
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Net Asset Value Per Share
Class Y Shares $ 1.00 $ 1.00 --
Class R Shares $ 1.00 $ 1.00 $9.85
Offering Price Per Share(1)
Class Y Shares $ 1.00 $ 1.00 --
Class R Shares(3) $ 1.00 $ 1.00 $9.85
Redemption Proceeds Per Share(2)
Class Y Shares $ 1.00 $ 1.00 --
Class R Shares(4) $ 1.00 $ 1.00 $9.65
Shares Outstanding:
Class Y Shares 138,097,102 425,337,890 --
Class R Shares 3,309,334 8,421,162 3,951,293
Investments, at identified cost $141,178,776 $431,430,491 $38,891,728
Investments, at tax cost $141,178,776 $431,430,491 $38,891,728
</TABLE>
(1) See "What Shares Cost" in the Prospectus.
(2) See "Contingent Deferred Sales Charge" in the Prospectus.
(3) Computation of offering price per share 100/100.00 of net asset value.
(4) Computation of offering price per share 98/100 of net asset value.
(See Notes which are an integral part of the Financial Statements)
STATEMENTS OF ASSETS AND LIABILITIES--CONTINUED
Riggs Funds
April 30, 1999
<TABLE>
<CAPTION>
Small
Stock Company Stock
Fund Fund
<S> <C> <C>
Assets:
Investments in securities, at value $ 98,360,110 $36,532,402
Investments in repurchase agreements 4,415,000 2,465,000
Total investments, at amortized cost and value 102,775,110 38,997,402
Cash 6,804 1,620
Collateral for securities loaned at fair value (Note 2) 7,342,140 1,454,520
Income receivable 65,736 1,436
Receivable for shares sold 34,560 2,486
Receivable for investments sold 789,053 849,206
Deferred organizational costs -- 6,154
Other Assets -- 1,180
Total assets 111,013,403 41,314,004
Liabilities:
Payable for investments payable 1,722,398 940,073
Payable upon return of securities loaned (Note 2) 7,342,140 1,454,520
Payable for shares redeemed 166,393 54,592
Accrued expenses 125,865 36,100
Total liabilities 9,356,796 2,485,285
Net Assets $101,656,607 $38,828,719
Net Assets Consists of:
Paid in capital $ 69,114,729 $43,593,657
Net unrealized appreciation (depreciation) of investments 24,447,469 (5,115)
Accumulated net realized gain (loss) on investments 8,057,676 (4,759,823)
Undistributed net investment income 36,733 --
Total Net Assets $101,656,607 $38,828,719
Class R Shares $101,474,313 $38,727,652
Class B Shares $ 182,294 $ 101,067
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Net Asset Value Per Share
Class R Shares $ 15.80 $ 11.27
Class B Shares $ 15.73 $ 11.21
Offering Price Per Share(1)
Class R Shares(3) $ 15.80 $ 11.27
Class B Shares(3) $ 15.73 $ 11.21
Redemption Proceeds Per Share(2)
Class R Shares(4) $ 15.48 $ 11.04
Class B Shares(5) $ 14.94 $ 10.65
Shares Outstanding:
Class R Shares 6,421,021 3,437,661
Class B Shares 11,586 9,012
Investments, at identified cost $ 78,327,641 $39,002,517
Investments, at tax cost $ 78,745,324 $39,002,517
(1) See "What Shares Cost" in the Prospectus.
</TABLE>
(2) See "Contingent Deferred Sales Charge" in the Prospectus. (3) Computation of
offering price per share 100/100.00 of net asset value. (4) Computation of
offering price per share 98/100 of net asset value. (5) Computation of offering
price per share 95/100 of net asset value. (See Notes which are an integral part
of the Financial Statements)
STATEMENTS OF OPERATIONS
Riggs Funds
For the Year Ended April 30, 1999
<TABLE>
<CAPTION>
U.S. Treasury Prime U.S. Government Small Company
Money Market Money Market Securities Stock Stock
Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ -- $ -- $ -- $ 1,350,333(1) $ 370,959
Interest 6,486,513 17,663,101 2,228,642 143,799 139,941
Total investment income 6,486,513 17,663,101 2,228,642 1,494,132 510,900
Expenses:
Investment advisory fee 635,522 1,652,495 277,475 756,558 333,762
Administrative personnel and services fee 177,826 462,021 51,778 141,350 58,587
Custodian fees 25,421 66,100 7,399 20,175 8,549
Transfer and dividend disbursing agent fees
and expenses 13,346 35,592 17,161 46,248 27,006
Trustees' fees 1,464 4,831 1,730 3,009 2,009
Auditing fees 14,676 14,692 15,603 15,330 16,428
Legal fees 2,282 4,190 2,110 3,647 2,190
Portfolio accounting fees 1,861 2,617 4,475 3,024 3,193
Distribution services fee--Class R Shares 14,901(2) 17,064 92,719 241,118 95,808
Distribution services fee--Class B Shares -- -- -- 653(3) 709(4)
Shareholder services fees -- Class Y Shares 312,575 824,862 -- -- --
Shareholder services fees--Class R Shares 8,609(2) 9,405 82,762 216,250 85,927
Shareholder services fees--Class B Shares -- -- -- 211(3) 228(4)
Share registration costs 26,024 22,704 16,873 27,487 18,824
Printing and postage 6,931 5,668 5,472 7,110 9,116
Insurance premiums 3,277 4,475 2,644 2,739 2,374
Miscellaneous 4,131 5,665 3,018 5,926 11,592
Total expenses 1,248,846 3,132,381 581,219 1,490,835 676,302
Waivers:
Waiver of investment advisory fee -- -- (147,987) -- --
Waiver of Distribution service fee--Class R
Shares (7,104) (8,307) (37,524) (99,487) (40,526)
Waiver of Shareholder services fee -- Class
Y Shares (312,575) (824,862) -- -- --
Waiver of Shareholder services fee--Class R
Shares (6,312) (6,995) (60,683) (159,597) (63,815)
Waiver of Shareholder services fee--Class B
Shares -- -- -- (145) (160)
Total waivers (325,991) (840,164) (246,194) (259,229) (104,501)
Net expenses 922,855 2,292,217 335,025 1,231,606 571,801
Net investment income (loss) 5,563,658 15,370,884 1,893,617 262,526 (60,901)
Realized and Unrealized Gain (Loss) on
Investments:
Net realized gain (loss) on investments -- 20,206 695,321 8,227,259 (4,753,762)
Net change in unrealized appreciation
(depreciation)
of investments -- -- (498,899) (3,149,465) (11,661,505)
Net realized and unrealized gain (loss) on
investments -- 20,206 196,422 5,077,794 (16,415,267)
Change in net assets resulting from
operations $5,563,658 $15,391,090 $2,090,039 $ 5,340,320 $(16,476,168)
</TABLE>
(1) Net of taxes withheld $862.
(2) Reflects operations for the period from July 7, 1998 (date of initial public
investment) to April 30, 1999.
(3) Reflects operations for the period from July 19, 1998 (date of initial
public investment) to April 30, 1999.
(4) Reflects operations for the period from July 17, 1998 (date of initial
public investment) to April 30, 1999.
(See Notes which are an integral part of the Financial Statements)
STATEMENTS OF CHANGES IN NET ASSETS
Riggs Funds
<TABLE>
<CAPTION>
U.S. Treasury Prime Money U.S. Government
Money Market Market Securities
Fund Fund Fund
Year Ended April 30, Year Ended April 30, Year Ended April 30,
1999 1998 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net
Assets:
Operations--
Net investment income $ 5,563,658 $ 6,876,836 $ 15,370,884 $ 18,383,309 $ 1,893,617 $ 1,932,020
Net realized gain (loss) on
investments -- -- 20,206 (15,106) 695,321 933,219
Net change in unrealized
appreciation
(depreciation) of
investments -- -- -- -- (498,899) 349,287
Change in net assets
resulting from operations 5,563,658 6,876,836 15,391,090 18,368,203 2,090,039 3,214,526
Distributions to
Shareholders--
Distributions from net
investment income
Class Y Shares (5,454,096) (6,876,836) (15,228,454) (18,106,563) -- --
Class R Shares (109,562)(1) -- (142,430) (276,746) (1,847,619) (1,973,265)
Change in net assets
resulting from
distributions
to shareholders (5,563,658) (6,876,836) (15,370,884) (18,383,309) (1,847,619) (1,973,265)
Share Transactions--
Proceeds from sales of
shares 275,302,536 277,959,898 1,459,921,511 1,668,483,944 10,292,077 12,504,323
Net asset value of shares
issued to shareholders
in payment of distributions
declared 1,407,097 1,500,215 4,903,575 6,222,769 367,680 348,824
Cost of shares redeemed (252,727,690) (303,046,901) (1,350,000,108) (1,754,361,234) (6,526,922) (11,370,863)
Change in net assets
resultingfrom
share transactions 23,981,943 (23,586,788) 114,824,978 (79,654,521) 4,132,835 1,482,284
Change in net assets 23,981,943 (23,586,788) 114,845,184 (79,669,627) 4,375,255 2,723,545
Net Assets:
Beginning of period 117,424,493 141,011,281 318,630,060 398,299,687 34,552,696 31,829,151
End of period $ 141,406,436 $ 117,424,493 $ 433,475,244 $ 318,630,060 $38,927,951 $ 34,552,696
Undistributed net
investment income included
in
net assets at end of period -- -- $ 580,045 $ 578,296 $ 80,183 --
Net gain (loss) as computed
for federal
tax purposes -- -- $ 8,716 $ (4,102) $ 682,054 $ 843,130
</TABLE>
(1) Reflects operations for the period from July 7, 1998 (date of initial public
investment) to April 30, 1999.
(See Notes which are an integral part of the Financial Statements)
STATEMENTS OF CHANGES IN NET ASSETS--CONTINUED
Riggs Funds
<TABLE>
<CAPTION>
Small Company
Stock Fund Stock Fund
Year Ended April 30, Year Ended April 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income (loss) $ 262,526 $ 663,953 $ (60,901) $ (108,923)
Net realized gain (loss) on investments 8,227,259 23,430,065 (4,753,762) 10,175,481
Net change in unrealized appreciation
(depreciation) of investments (3,149,465) 10,177,213 (11,661,505) 12,217,509
Change in net assets resulting from operations 5,340,320 34,271,231 (16,476,168) 22,284,067
Distributions to Shareholders--
Distributions from net investment income
Class R Shares (292,776) (683,221) -- --
Class B Shares (57)(2) -- -- --
Distributions from net realized gains
Class R Shares (10,140,817) (23,035,017) (5,407,163) (7,596,605)
Class B Shares (11,768)(2) -- (18,999)(3) --
Change in net assets resulting from distributions
to shareholders (10,445,418) (23,718,238) (5,426,162) (7,596,605)
Share Transactions--
Proceeds from sales of shares 23,801,961 36,671,637 23,672,150 23,389,601
Net asset value of shares issued to shareholders in
payment of distributions declared 10,170,057 7,420,981 5,415,147 774,594
Cost of shares redeemed (44,325,647) (26,672,024) (26,579,582) (8,405,450)
Change in net assets resultingfrom share transactions (10,353,629) 17,420,594 2,507,715 15,758,745
Change in net assets (15,458,727) 27,973,587 (19,394,615) 30,446,207
Net Assets:
Beginning of period 117,115,334 89,141,747 58,223,334 27,777,127
End of period $101,656,607 $117,115,334 $ 38,828,719 $58,223,334
Undistributed net investment income included in
net assets at end of period $ 36,733 $ 79,672 -- --
Net gain (loss) as computed for federal tax purposes $ 8,539,951 $ 23,589,130 $ (3,967,647) $10,181,542
</TABLE>
(2) Reflects operations for the period from July 19, 1998 (date of initial
public investment) to April 30, 1999.
(3) Reflects operations for the period from July 17, 1998 (date of initial
public investment) to April 30, 1999.
FINANCIAL HIGHLIGHTS
Riggs Funds
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Net Asset Net Net Realized Distributions Distributions
Year Value, Investment and Unrealized Total From from Net from Net
Ended beginning Income Gain (Loss) on Investment Investment Realized Capital
April 30, of period (Loss) Investments Operations Income Gains Contribution
<S> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury Money Market Fund Y Shares
1995 $ 1.00 0.04 -- 0.04 (0.04) -- --
1996 $ 1.00 0.05 -- 0.05 (0.05) -- --
1997 $ 1.00 0.05 -- 0.05 (0.05) -- --
1998 $ 1.00 0.05 -- 0.05 (0.05) -- --
1999 $ 1.00 0.04 -- 0.04 (0.04) -- --
U.S. Treasury Money Market Fund R Shares
1999(3) $ 1.00 0.03 -- 0.03 (0.03) -- --
Prime Money Market Fund Y Shares
1995 $ 1.00 0.047 (0.003) 0.044 (0.047) -- 0.003
1996 $ 1.00 0.05 -- 0.05 (0.05) -- --
1997 $ 1.00 0.05 -- 0.05 (0.05) -- --
1998 $ 1.00 0.05 -- 0.05 (0.05) -- --
1999 $ 1.00 0.05 -- 0.05 (0.05) -- --
Prime Money Market Fund R Shares
1996(6) $ 1.00 0.02 -- 0.02 (0.02) -- --
1997 $ 1.00 0.05 -- 0.05 (0.05) -- --
1998 $ 1.00 0.05 -- 0.05 (0.05) -- --
1999 $ 1.00 0.04 -- 0.04 (0.04) -- --
U.S. Government Securities Fund R Shares
1995 $ 9.46 0.56 (0.11) 0.45 (0.56) -- --
1996 $ 9.35 0.59 0.12 0.71 (0.59) -- --
1997 $ 9.47 0.60 (0.07) 0.53 (0.59) -- --
1998 $ 9.41 0.56 0.37 0.93 (0.57) -- --
1999 $ 9.77 0.52 0.06 0.58 (0.50) -- --
Stock Fund Fund R Shares
1995 $11.89 0.20 1.39 1.59 (0.19) (0.60) --
1996 $12.69 0.18 4.00 4.18 (0.18) (0.85) --
1997 $15.84 0.20 2.28 2.48 (0.20) (2.71) --
1998 $15.41 0.11 5.20 5.31 (0.11) (4.04) --
1999 $16.57 0.04 0.94 0.98 (0.04) (1.71) --
Small Company Stock Fund R Shares
1995(7) $10.00 0.02 0.41 0.43 -- -- --
1996 $10.43 (0.02) 4.05 4.03 (0.01) (0.35) --
1997 $14.10 (0.01) (0.47) (0.48) -- (0.82) --
1998 $12.80 (0.04) 9.23 9.19 -- (3.19) --
1999 $18.80 (0.02) (5.66) (5.68) -- (1.85) --
</TABLE>
(1) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(2) During the period certain fees were voluntarily waived. If such waivers had
not occurred, the ratios would have been as indicated.
(3) Reflects operations for the period from July 7, 1998 (date of initial public
investment) to April 30, 1999.
(4) Computed on an annualized basis.
<TABLE>
<CAPTION>
Ratios to Average Net Assets
Net
Investment
Net Income Net Assets,
Net Asset Investment Expenses (Loss) end
Total Value, end Total Income (after (after of period Portfolio
Distributions of period Return(1) Expenses(2) (Loss)(2) waivers) waivers) (000 omitted) Turnover
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(0.04) $ 1.00 4.39% 0.80% 4.13% 0.60% 4.33% $ 81,089 --
(0.05) $ 1.00 5.28% 0.78% 4.99% 0.60% 5.17% $107,104 --
(0.05) $ 1.00 4.83% 0.70% 4.61% 0.57% 4.74% $141,011 --
(0.05) $ 1.00 5.00% 0.71% 4.80% 0.63% 4.88% $117,424 --
(0.04) $ 1.00 4.49% 0.97% 4.14% 0.72% 4.39% $138,097 --
(0.03) $ 1.00 3.35% 1.55%(4) 3.39%(4) 1.08%(4) 3.86%(4) $ 3,309 --
(0.044) $ 1.00 4.84%(5) 0.68% 4.48% 0.44% 4.72% $284,059 --
(0.05) $ 1.00 5.50% 0.70% 5.07% 0.51% 5.26% $367,742 --
(0.05) $ 1.00 5.09% 0.68% 4.83% 0.51% 5.00% $372,037 --
(0.05) $ 1.00 5.22% 0.69% 5.00% 0.58% 5.11% $318,122 --
(0.05) $ 1.00 4.76% 0.94% 4.40% 0.69% 4.65% $425,054 --
(0.02) $ 1.00 0.74% 1.26%(4) 4.39%(4) 1.07%(4) 4.58%(4) $ 10 --
(0.05) $ 1.00 4.57% 1.18% 4.41% 1.01% 4.58% $ 26,263 --
(0.05) $ 1.00 4.92% 1.18% 4.33% 1.00% 4.51% $ 508 --
(0.04) $ 1.00 4.49% 1.49% 3.79% 1.03% 4.25% $ 8,422 --
(0.56) $ 9.35 5.01% 1.20% 5.66% 0.80% 6.06% $ 46,820 62%
(0.59) $ 9.47 7.60% 1.20% 5.64% 0.80% 6.04% $ 50,919 28%
(0.59) $ 9.41 5.79% 1.27% 5.96% 0.87% 6.36% $ 31,829 71%
(0.57) $ 9.77 10.14% 1.22% 5.47% 0.82% 5.87% $ 34,521 75%
(0.50) $ 9.85 6.03% 1.58% 4.45% 0.91% 5.12% $ 38,928 55%
(0.79) $12.69 14.16% 1.12% 1.52% 0.98% 1.66% $ 66,019 46%
(1.03) $15.84 33.73% 1.08% 1.14% 0.96% 1.26% $ 84,797 81%
(2.91) $15.41 16.34% 1.03% 1.14% 0.91% 1.26% $ 89,142 75%
(4.15) $16.57 39.68% 1.00% 0.56% 0.93% 0.63% $117,115 94%
(1.75) $15.80 6.50% 1.48% 0.00% 1.22% 0.26% $101,474 52%
-- $10.43 4.30% 3.20%(4) (0.56%)(4) 1.66%(4) 0.98%(4) $ 7,609 8%
(0.36) $14.10 39.43% 1.94% (0.93%) 1.14% (0.13%) $ 19,289 70%
(0.82) $12.80 (3.76%) 1.46% (0.53%) 1.00% (0.07%) $ 27,777 93%
(3.19) $18.80 77.85% 1.18% (0.35%) 1.09% (0.26%) $ 58,223 108%
(1.85) $11.27 (30.33%) 1.63% (0.40%) 1.37% (0.14%) $ 38,728 100%
</TABLE>
(5) Total return would have remained at 4.84% absent the capital contribution by
Riggs National Corp.
(6) Reflects operations for the period from December 12, 1995 (date of initial
public investment) to April 30, 1996.
(7) Reflects operations for the period from February 27, 1995 (date of initial
public investment) to April 30, 1995.
(See Notes which are an integral part of the Financial Statements)
COMBINED NOTES TO FINANCIAL STATEMENTS
Riggs Funds
April 30, 1999
(1) Organization
Riggs Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act"), as an open-end management investment company. The
Board of Trustees approved a change in the name of the Trust from RIMCO Monument
Funds to Riggs Funds, the name of the Bond Fund to U.S. Government Securities
Fund, and the name of the Small Capitalization Equity Fund to Small Company
Stock Fund, effective July 1, 1998. The Trust consists of five diversified
portfolios (individually referred to as the "Fund", or collectively as the
"Funds") which are presented herein: <TABLE> <CAPTION> Portfolio Name Investment
Objective <S> <C> Riggs U.S. Treasury Money Market Fund To provide current
income consistent with ("Treasury Fund") stability of principal and liquidity.
Riggs Prime Money Market Fund To provide current income consistent with ("Prime
Fund") stability of principal and liquidity.
Riggs U.S. Government Securities Fund To achieve current income.
("U.S. Government Securities Fund")
Riggs Stock Fund ("Stock Fund") To provide growth of capital and income.
Riggs Small Company Stock Fund To provide long-term capital appreciation.
("Small Company Fund")
</TABLE>
Effective July 1, 1998, Prime Fund and Treasury Fund offered two classes of
shares, Class Y Shares and Class R Shares (formerly, Class A Shares and Class B
Shares, respectively, for Prime Fund); U.S. Government Securities Fund continued
to issue one class of shares (designated as Class R Shares); and Stock Fund and
Small Company Fund offered two classes of shares, its existing class
(redesignated as Class R Shares) and a new class (designated as Class B Shares).
The assets of each portfolio are segregated and a shareholder's interest is
limited to the portfolio in which shares are held.
(2) Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
Investment Valuations
U.S. government securities, listed corporate bonds (other fixed income and
asset-backed securities), and unlisted securities and private placement
securities are generally valued at the mean of the latest bid and asked price as
furnished by an independent pricing service. Listed equity securities (and
investments in closed-end investment companies) are valued at the last sale
price reported on its primary national securities exchange. For the money market
Funds within the Trust, the use of the amortized cost method to value portfolio
securities is in accordance with Rule 2a-7 under the Act. For fluctuating net
asset value Funds within the Trust, short-term securities are valued at the
prices provided by an independent pricing service. However, short-term
securities purchased with remaining maturities of sixty days or less may be
valued at amortized cost, which approximates fair market value.
Repurchase Agreements
It is the policy of the Funds to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Funds to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Funds' adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Funds could receive less
than the repurchase price on the sale of collateral securities.
Investment Income, Expenses and Distributions
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing book/tax treatments paydown
gains and losses, wash sales and net operating losses. The following
reclassifications have been made to the financial statements.
<TABLE>
<CAPTION>
Increase (Decrease)
Undistributed Accumulated
Paid-In Net Investment Net Realized
Fund Name Capital Income (Loss) Gain (Loss)
<S> <C> <C> <C>
Prime Fund $ 132 $ 1,749 $ (1,881)
U.S. Government Securities Fund 1 34,185 (34,186)
Stock Fund -- (12,632) 12,632
Small Company Fund (214,255) 60,901 153,354
Federal Taxes
</TABLE>
It is the Funds' policy to comply with the provisions of the Code applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of their income. Accordingly, no provisions for federal tax
are necessary.
At April 30, 1999, the Prime Fund, U.S. Government Fund and Small Company Fund
for federal tax purposes, had a capital loss carryforward of $867,389, 2,051,149
and $3,967,647, respectively, which will reduce each Fund's taxable income
arising from future net realized gains on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions to
shareholders which would otherwise be necessary to relieve the Prime Fund, U.S.
Government Securities Fund and Small Company Fund of any liability for federal
tax. Pursuant to the Code, such capital loss carryforward of the Prime Fund will
expire 2002 ($828,203), 2003 ($20,474), 2005 ($14,610), and 2006 ($4,102). The
capital loss carryforward of the U.S. Government Securities Fund will expire
2003 ($1,580,823), and 2005 ($470,326). The capital loss carryforward of the
Small Company Fund will expire in 2006.
When-Issued and Delayed Delivery Transactions
The Funds may engage in when-issued or delayed delivery transactions. The Funds
record when-issued securities on the trade date and maintain security positions
such that sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed delivery
basis are marked to market daily and begin earning interest on the settlement
date.
Deferred Expenses
The costs incurred by each Fund with respect to organization of their shares in
their first fiscal year, excluding the initial expense of registering their
shares, have been deferred and are being amortized over a period not to exceed
five years from each Fund's commencement date.
Securities Lending
Under guidelines adopted by the Board of Trustees, each Fund may lend portfolio
securities to brokers/dealers and other financial organizations in order to
generate additional income. Loans of portfolio securities by a Fund will be
collateralized by cash, letters of credit or U.S. government securities which
are maintained at 100% of the current market value of the loaned securities.
Collateral is either held as cash or reinvested in short-term securities
including overnight repurchase agreements, commercial paper, master notes,
floating rate corporate notes (with at least quarterly reset rates) and money
market funds. The Funds return a portion of interest on any cash received as
collateral and continue to receive interest or dividends on securities loaned.
Included in interest income is $4,736, $1,240, $2,755, $4,826 and $9,248 for
Treasury Fund, Prime Fund, U.S. Government Securities Fund, Stock Fund and Small
Company Fund, respectively, of income earned on securities lending transactions.
Loans will be made to firms deemed by the Company's adviser to be of good
financial standing and will not be made unless, in the judgment of the Company's
adviser, the consideration to be earned from such loans would justify the risk.
The risks associated with lending portfolio securities consist of possible
decline in value of collateral, possible delays receiving additional collateral
or in the recovery of the loaned securities or expenses from enforcing the
Funds' rights should the borrower of the securities fail financially.
As of April 30, 1999, the value of securities loaned plus interest, the payable
on collateral due to broker and the value of reinvested cash collateral
securities were as follows:
<TABLE>
<CAPTION>
Market Value of Payable on Collateral
Fund Securities Loaned Due Broker
<S> <C> <C>
Treasury Fund $9,458,162 $9,905,250
Prime Fund $2,551,595 $2,625,000
U.S. Government Securities Fund $5,529,870 $5,637,041
Stock Fund $7,195,507 $7,342,140
Small Company Fund $1,417,648 $1,454,520
Cash collateral is held in a segregated account.
</TABLE>
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those estimated.
Other
Investment transactions are accounted for on the trade date.
(3) Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Treasury Fund
Year Ended Year Ended
Class Y Shares April 30, 1999 April 30, 1998
<S> <C> <C> <C>
Shares sold 268,593,093 277,959,898
Shares issued to shareholders in payment of distributions
declared 1,297,638 1,500,215
Shares redeemed (249,218,122) (303,046,901)
Net change resulting from Class Y Share transactions 20,672,609 (23,586,788)
Treasury Fund
Period Ended
Class R Shares April 30, 1999(1)
Shares sold 6,709,443
Shares issued to shareholders in payment of distributions
declared 109,459
Shares redeemed (3,509,568)
Net change resulting from Class R Share transactions 3,309,334
Net change resulting from share transactions 23,981,943
Prime Fund
Year Ended Year Ended
Class Y Shares April 30, 1999 April 30, 1998
Shares sold 1,431,651,736 1,618,160,015
Shares issued to shareholders in payment of distributions
declared 4,766,066 6,212,437
Shares redeemed (1,329,505,824) (1,678,272,255)
Net change resulting from Class Y Share transactions 106,911,978 (53,899,803)
Prime Fund
Year Ended Year Ended
Class R Shares April 30, 1999 April 30, 1998
Shares sold 28,269,775 50,323,930
Shares issued to shareholders in payment of distributions
declared 137,509 10,332
Shares redeemed (20,494,284) (76,088,979)
Net change resulting from Class R Share transactions 7,913,000 (25,754,717)
Net change resulting from share transactions 114,824,978 (79,654,520)
U.S. Government
Securities Fund
Year Ended Year Ended
Class R Shares April 30, 1999 April 30, 1998
Shares sold 1,031,656 1,294,447
Shares issued to shareholders in payment of distributions
declared 36,800 35,958
Shares redeemed (653,284) (1,177,844)
Net change resulting from Class R Share transactions 415,172 152,561
</TABLE>
(1) Reflects operations for the period from July 7, 1998 (date of initial public
investment) to April 30, 1999.
<TABLE>
<CAPTION>
Stock Fund
Year Ended Year Ended
April 30, 1999 April 30, 1998
Class R Shares Amount Shares Amount Shares
<S> <C> <C> <C> <C>
Shares sold $ 23,625,339 1,542,657 $ 36,671,637 2,347,730
Shares issued to shareholders in payment of
distributions declared 10,158,300 676,733 7,420,981 530,956
Shares redeemed (44,312,176) (2,867,893) (26,672,024) (1,591,271)
Net change resulting from Class R Share transactions $ (10,528,537) (648,503) $ 17,420,594 1,287,415
</TABLE>
Stock Fund
Period Ended
April 30, 1999(2)
Class B Shares Amount Shares
Shares sold $ 176,622 11,692
Shares issued to shareholders in payment
of distributions declared 11,757 785
Shares redeemed (13,471) (891)
Net change resulting from Class B Share transactions $ 174,908 11,586
Net change resulting from share transactions $(10,353,629) (636,917)
Small Company Fund
Year Ended Year Ended
April 30, 1999 April 30, 1998
Class R Shares Amount Shares Amount Shares
Shares sold $ 23,513,675 1,811,335 $23,389,601 1,357,019
Shares issued to
shareholders in
payment of
distributions declared 5,396,154 472,104 774,594 51,264
Shares redeemed (26,536,536) (1,942,196) (8,405,450) (482,797)
Net change resulting
from Class R
Shares transactions $ 2,373,293 341,243 $15,758,745 925,486
Small Company Fund
Period Ended
April 30, 1999(3)
Class B Shares Amount Shares
Shares sold $ 158,475 11,167
Shares issued to shareholders in
payment of distributions declared 18,993 1,668
Shares redeemed (43,046) (3,822)
Net change resulting from Class B
Share transactions $ 134,422 9,013
Net change resulting from transactions $2,507,715 350,256
(2) Reflects operations for the period from July 19, 1998 (date of initial
public investment) to April 30, 1999.
(3) Reflects operations for the period from July 17, 1998 (date of initial
public investment) to April 30, 1999.
(4) Investment Advisory Fee and Other Transactions with Affiliates
Investment Advisery Fee
Riggs Investment Management Corp., the Trust's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee based on
a percentage of each Fund's average daily net assets (see below). The Adviser
may voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
Fund Annual Rate
Treasury Fund 0.50%
Prime Fund 0.50%
U.S. Government Securities Fund 0.75%
Stock Fund 0.75%
Small Company Fund 0.80%
Administrative Fee
Federated Administrative Services ("FAS") provides the Trust with certain
administrative personnel and services (including certain legal, fund accounting
and transfer agency services). The FAS fee is based on the level of average
aggregate net assets of the Trust for the period.
Distribution Services Fee
The Funds have adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Act. Under the terms of the Plan, the Fund will compensate Federated
Securities Corp. ("FSC"), the principal distributor, from the net assets of the
fund to finance activities intended to result in the sale of the Fund's Class R
and Class B Shares. Effective July 1, 1998, the Plan provides that the Funds may
incur distribution expenses according to the following schedule annually, to
compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC
can modify or terminate this voluntary waiver at any time at its sole
discretion.
Percentage of
Average Net Assets
Share Class Name of Class
Class R Shares 0.25%
Class B Shares 0.75%
The Class R Shares of the Money Market Funds may pay the distributor a fee
computed at an annual rate of up to 0.50% of the average daily net assets.
Shareholder Services Fee
Under the terms of a Shareholder Services Agreement with FAS, effective July 1,
1998, each Fund pays up to 0.25% of average daily net assets of the Fund for the
period. The fee is paid to FAS to finance certain services for shareholders and
to maintain shareholder accounts. FAS may voluntarily choose to waive any
portion of its fee. FSC can modify or terminate this voluntary waiver at any
time at its sole discretion.
Custodian Fees
Riggs Bank N.A. is the Fund's custodian. The fee is based on the level of each
Fund's average daily net assets for the period, plus out-of-pocket expenses.
Organizational Expenses
Organizational expenses were borne initially by FAS. The Funds have agreed to
reimburse FAS for the organizational expenses during the five year period
following each Fund's effective date. For the year ended April 30, 1999, the
following amounts were paid pursuant to this agreement:
Organizational
Expenses Paid
Organizational for the Year Ended
Fund Effective Date Expenses April 30, 1999
Small Company Fund February 6, 1995 $22,693 $6,150
General
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
(5) Investment Transactions
Purchases and sales of investments, excluding short-term obligations, for the
year ended April 30, 1999, were as follows:
Fund Purchases Sales
U.S. Government Securities Fund $20,568,571 $19,047,218
Stock Fund 51,204,037 70,897,158
Small Company Fund 39,722,586 40,278,012
(6) Year 2000 (unaudited)
Similar to other financial organizations, the Funds could be adversely affected
if the computer systems used by the Funds' service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Funds' Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the funds.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of
RIGGS FUNDS:
We have audited the accompanying statements of assets and liabilities of Riggs
U.S. Treasury Money Market Fund, Riggs Prime Money Market Fund, Riggs U.S.
Government Securities Fund, Riggs Stock Fund and Riggs Small Company Stock Fund
(investment portfolios of Riggs Funds, a Massachusetts business trust),
including the schedules of portfolios of investments, as of April 30, 1999, and
the related statements of operations for the year then ended, and the statements
of changes in net assets and the financial highlights for the period ended April
30, 1999 (as presented on pages 22 and 23). These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit. The financial highlights for each of
the four years ended April 30, 1998 and the statements of changes for the year
ended April 30, 1998 were audited by other auditors whose report dated June 22,
1998 expressed an unqualified opinion.
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 financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of April 30, 1999, by
correspondence with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Riggs
U.S. Treasury Money Market Fund, Riggs Prime Money Market Fund, Riggs U.S.
Government Securities Fund, Riggs Stock Fund and Riggs Small Company Stock Fund
(investment portfolios of Riggs Funds) as of April 30, 1999, the results of
their operations for the year then ended, and the changes in their net assets
and their financial highlights for the period ended April 30, 1999 (as presented
on pages 22 and 23), in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts,
June 22, 1999
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
Nicholas P. Constantakis
William J. Copeland
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Edward C. Gonzales
Peter E. Madden
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
John S. Walsh
*Trustees as of June 15, 1999.
OFFICERS
John F. Donahue
Chairman
Edward C. Gonzales
President and Treasurer
J. Christopher Donahue
Executive Vice President
John W. McGonigle
Executive Vice President and Secretary
Joseph S. Machi
Vice President and Assistant Treasurer
Richard B. Fisher
Vice President
C. Grant Anderson
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Funds' prospectus which contains facts concerning
the Funds' objectives and policies, management fees, expenses and other
information.
Cusip 76656A 104 Cusip 76656A 203 Cusip 76656A 302 Cusip 76656A 500 Cusip 76656A
609 Cusip 76656A 807 Cusip 76656A 401 2052603 (6/99)
COMBINED ANNUAL REPORT
TO SHAREHOLDERS
April 30,1999
Class B Shares
Riggs Stock Fund
Riggs Small Company Stock Fund
Mutual Funds are not FDIC insured and are not deposits or obligations of or
guaranteed by Riggs Bank N.A. They involve investment risks, including the
possible loss of the principal amount invested.
[RIGGS LOGO]
Federated Securities Corp., Distributor
PRESIDENT'S MESSAGE
Dear Investor:
I am pleased to present the first Annual Report for the Riggs Stock Funds--Class
B Shares, which covers the initial 9 1/2 month period of the operation of this
new share class through April 30, 1999. It begins with an investment commentary
by each portfolio manager, followed by a complete list of holdings and the
financial statements for Riggs Stock Fund and Riggs Small Company Stock Fund.
Although the Dow Jones Industrial Average continued its upward momentum, it was
a deceptive trend to many stock investors, because day-to-day volatility was
high and the market breadth was exceptionally narrow. Most of the market's
performance was concentrated in a narrow band of large-company growth stocks and
Internet-related stocks. The performance highlights of each Riggs stock fund is
as follows:
Riggs Stock Fund
During the period ended April 30, 1999, the fund's diversified portfolio of
high-quality stocks--which included many household names like Alcoa, American
Express, Compaq, Intel, Johnson & Johnson, Mobil, Sears, and Xerox--produced a
total return of 5.31% (0.59% adjusted for the maximum 5.00% redemption fee) for
Class B Shares (the fund's Class B Shares began operation on July 19, 1998).*
This return was the result of $0.01 per share in dividend income and $1.71 per
share in capital gains. The fund's total net assets totaled $101.7 million for
the period ended April 30, 1999.
Riggs Small Company Stock Fund
As the most aggressive fund in the Riggs family, this fund invests in carefully
selected stocks issued by small companies.+ In an extremely weak environment for
small-company stocks, the fund produced a negative total return of (24.43%), or
(27.68%) adjusted for the maximum 5.00% redemption fee, for Class B Shares (the
fund's Class B Shares began operation on July 17, 1998).* The negative return
resulted from a decline in net asset value. The fund paid $1.85 per share in
capital gains. For the period ended April 30, 1999, fund assets totaled $38.8
million.
Thank you for pursuing your financial goals through the diversification and
professional management of the Riggs stock funds. We'll continue to update you
on your investment.
Sincerely,
/s/ Edward C. Gonzales
Edward C. Gonzales
President
June 15, 1999
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
+ Small cap stocks have historically experienced greater volatility than
average.
INVESTMENT REVIEW
Riggs Stock Fund ("Stock Fund")
Riggs Small Company Stock Fund
("Small Company Fund")
Over the past fiscal year ended April 30, 1999, the global equity markets
experienced the highest volatility since 1990. Foreign currency instability and
weak economies overseas were offset by a continued strong domestic economy. This
past year we also witnessed the second president since Andrew Johnson to be
impeached by the House of Representatives. The reaction to all the news in the
financial markets was an initial rush to the biggest and safest securities, yet
we ended the year with the nascent improvement of worldwide economies and the
broadening out of the equity markets. For the year as a whole, it was one of the
narrowest markets in over 30 years as the top 10% of stocks in the general
market generated 75% of the returns. It was also a challenging year for active
money managers. However, everything moves in cycles and as we start a new fiscal
year, we are encouraged by the improved earnings growth outlook for a large
number of companies and the market's appreciation of securities offering
excellent long term value.
For the period from July 19, 1998 (start of performance) to April 30, 1999, the
Class B Shares of the Stock Fund generated a total return of 5.31%, based on net
asset value.* For the period from July 17, 1998 (start of performance) to April
30, 1999, the Class B Shares of the Small Company Fund generated a total return
of (24.43%), based on net asset value.* Our investment philosophy in managing
both equity funds is to balance long-term valuation with the catalyst of
short-term earnings acceleration. We employ our methodology which we call Value
Momentum, by initially analyzing four key factors: (1) relative price; (2)
earnings growth relative to the stock's price-to-earnings multiple; (3) earnings
estimate revisions; and (4) relative price strength. For stocks scoring highly
in this process, we focus on the fundamental changes that management is
implementing within these companies to generate earnings growth. We then invest
in those companies in which we have the most confidence in management.
We maintain a broad diversification of stocks among industries. In the Stock
Fund our largest sector exposure has been in technology, with IBM, our largest
stock in the sector and in the Stock Fund, at 3.0%. Management has done a
superior job turning around the earnings prospects by focusing on services,
software and products. At fiscal year end our largest overweights were in energy
and the basic materials sector. We see a higher degree of confidence in earnings
growth in these sectors based in part on industry consolidation and company
restructuring. Mobil, which is soon to be merged with Exxon, and BP AMOCO,
formed by the merger of British Petroleum and Amoco, are the leading
consolidators in the energy sector. We are encouraged by the restructuring at
Georgia Pacific to generate an accelerating earnings growth through cost cutting
and productivity initiatives. These initiatives were implemented several years
ago and are currently bearing fruit.
In the Small Company Fund, the current valuation of this sector of the market is
the most attractive we have seen in 30 years. We believe the opportunities
available are great as confidence in earnings growth appears to be improving.
Finance and consumer cyclicals are the largest sectors we have invested in, with
health care being the largest overweight. Rent-A-Center, Interdent, and
Apartment Investment & Management are some of the leading stocks in these
sectors. All three companies are generating improving earnings growth as they
consolidate their lead in their respective industries.
We believe the outlook for stocks to be encouraging due to the improved
prospects for corporate earnings growth as worldwide economies rebound. Through
all market environments, we believe that our disciplined focus on undervalued
companies with solid earnings growth should reward shareholders.
* Performance quoted represents past performance and is not indicative of future
results. Investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their original
cost.
Riggs Stock Fund
Class B Shares
Growth of $10,000 Invested in Riggs Stock Fund, Class B Shares
The graph below illustrates the hypothetical investment of $10,000* in the Riggs
Stock Fund, Class B Shares (the "Fund") from July 19, 1998 (start of
performance) to April 30, 1999, compared to the Standard & Poor's 500 Index
("S&P 500").+
"Graphic representation "D" omitted. See Appendix."
AVERAGE ANNUAL TOTAL RETURN** FOR THE PERIOD ENDED APRIL 30, 1999
Start of Performance (7/19/98) (cumulative) 0.59%
Past performance is not predictive of future performance. Your investment return
and principal value will fluctuate so when shares are redeemed, they may be
worth more or less than original cost. Mutual funds are not obligations of or
guaranteed by any bank and are not federally insured.
* Represents a hypothetical investment of $10,000 in the Fund. The ending
value of the Fund reflects a maximum 5.00% contingent deferred sales charge on
any redemption less than one year from the purchase date. The Fund's
performance assumes the reinvestment of all dividends and distributions. The
S&P 500 has been adjusted to reflect reinvestment of dividends on securities in
the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ S&P 500 is not adjusted to reflect sales charges, expenses, or other fees
that the Securities and Exchange Commission requires to be reflected in the
Fund's performance. This index is unmanaged.
Riggs Small Company Stock Fund
Class B Shares
Growth of $10,000 Invested in Riggs Small Company Stock Fund, Class B Shares
The graph below illustrates the hypothetical investment of $10,000* in the Riggs
Small Company Stock Fund, Class B Shares (the "Fund") from July 17, 1998 (start
of performance) to April 30, 1999, compared to the Russell 2000 Index ("Russell
2000").+
"Graphic representation "E" omitted. See Appendix."
AVERAGE ANNUAL TOTAL RETURN** FOR THE PERIOD ENDED APRIL 30, 1999
Start of Performance (7/17/98) (cumulative) (27.68)%
Past performance is not predictive of future performance. Your investment return
and principal value will fluctuate so when shares are redeemed, they may be
worth more or less than original cost. Mutual funds are not obligations of or
guaranteed by any bank and are not federally insured.
* Represents a hypothetical investment of $10,000 in the Fund. The ending
value of the Fund reflects a maximum 5.00% contingent deferred sales charge on
any redemption less than one year from the purchase date. The Fund's
performance assumes the reinvestment of all dividends and distributions. The
Russell 2000 has been adjusted to reflect reinvestment of dividends on
securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Russell 2000 is not adjusted to reflect sales charges, expenses, or
other fees that the Securities and Exchange Commission requires to be reflected
in the Fund's performance. This index is unmanaged.
PORTFOLIO OF INVESTMENTS
Riggs Stock Fund
April 30, 1999
<TABLE>
<CAPTION>
Shares Value
Common Stocks--96.3%
<S> <C> <C>
Basic Materials--6.0%
28,640 Alcoa, Inc. $ 1,782,840
28,240 Fort James Corp. 1,073,120
21,681 Georgia-Pacific Corp. 2,005,493
40,620 USX-U.S. Steel Group, Inc. 1,228,755
Total 6,090,208
Capital Goods--10.2%
29,520 (1) Ingersoll-Rand Co. 2,042,415
21,870 Textron, Inc. 2,014,774
28,855 Tyco International Ltd. 2,344,469
15,245 United Technologies Corp. 2,208,619
31,085 Waste Management, Inc. 1,756,303
Total 10,366,580
Consumer Cyclical--8.4%
16,309 Eastman Kodak Co. 1,217,059
86,709 (2) Office Depot, Inc. 1,907,587
34,275 Sears, Roebuck & Co. 1,576,650
55,940 TJX Cos., Inc. 1,863,501
24,700 (2) UAL Corp. 1,994,525
Total 8,559,322
Consumer Services--5.4%
108,220 (2) Cendant Corp. 1,947,960
134,555 (1)(2) Modis Professional Services, Inc. 1,555,792
23,580 Tribune Co. 1,967,455
Total 5,471,207
Consumer Staples--7.5%
41,415 American Stores Co. 1,307,161
44,945 Philip Morris Cos., Inc. 1,575,884
34,230 (1) Nabisco Holding, Inc., Class A 1,294,322
44,684 (2) Safeway, Inc. 2,410,143
48,385 (2) The Pepsi Bottling Group, Inc. 1,019,109
Total 7,606,619
Technology--18.8%
35,255 (1)(2) Apple Computer, Inc. 1,621,730
20,705 (2) Cisco Systems, Inc. 2,361,664
51,645 Compaq Computer Corp. 1,152,329
9,480 (2) EMC Corp. Mass 1,032,728
24,730 Intel Corp. 1,513,167
17,730 International Business Machines Corp. 3,708,894
20,060 (1) Koninklijke (Royal) Philips 1,712,623
Electronics NV, ADR
33,242 Lucent Technologies, Inc. 1,998,675
38,475 (2) SCI Systems, Inc. 1,464,455
42,840 Xerox Corp. 2,516,850
Total 19,083,115
Shares or
Principal
Amount Value
Energy--10.0%
19,225 BP Amoco PLC, ADR $ 2,176,030
42,750 Coastal Corp. 1,635,188
22,430 Mobil Corp. 2,349,543
18,705 Schlumberger Ltd. 1,194,782
45,620 Texaco, Inc. 2,862,655
Total 10,218,198
Finance--13.8%
23,230 American Express Co. 3,035,871
39,545 Bank One Corporation 2,333,155
31,462 Bank of America Corp. 2,265,264
45,050 BankBoston Corp. 2,207,450
37,730 Hartford Financial Services Group, Inc. 2,223,712
48,505 Washington Mutual, Inc. 1,994,768
Total 14,060,220
Health Care--6.4%
27,815 American Home Products Corp. 1,696,715
18,649 Cardinal Health, Inc. 1,115,443
110,570 (2) Humana, Inc. 1,506,516
22,430 Johnson & Johnson 2,186,925
Total 6,505,599
Utilities-Gas & Electric--3.1%
36,865 Edison International 903,193
31,455 GPU, Inc. 1,199,222
21,185 Peco Energy Co. 1,004,963
Total 3,107,378
Utilities-Telephone--6.7%
42,503 AT&T Corp. 2,146,376
22,010 Ameritech Corp. 1,506,309
18,630 GTE Corp. 1,247,045
23,115 (2) MCI Worldcom, Inc. 1,899,764
Total 6,799,494
Total Common Stocks (identified cost
$73,317,217) 97,867,940
Preferred Stock--0.5%
Consumer Services--0.5%
15,532 Cendant Corp., Conv. Pfd., $.94 492,170
(identified cost $595,424)
(3) Repurchase Agreement--4.3%
$4,415,000 Donaldson, Lufkin and Jenrette Securities
Corp., 4.87%, dated 4/30/1999, due
5/3/1999 (at amortized cost) 4,415,000
Total Investments (identified cost
$78,327,641)(4) $ 102,775,110
</TABLE>
(1) Certain shares on loan to broker.
(2) Non-income producing security.
(3) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(4) The cost of investments for federal tax purposes amounts to $78,745,324. The
net unrealized appreciation of investments on a federal tax basis amounts to
$24,029,786 which is comprised of $27,577,389 appreciation and $3,547,603
depreciation at April 30, 1999.
Note: The categories of investments are shown as a percentage of net assets
($101,656,607) at April 30, 1999. The following acronym is used throughout this
portfolio:
ADR--American Depositary Receipt
(See Notes which are an integral part of the Financial Statements)
PORTFOLIO OF INVESTMENTS
Riggs Small Company Stock Fund
April 30, 1999
<TABLE>
<CAPTION>
Shares Value
Common Stocks--94.1%
<C> <S> <C>
Basic Materials--3.4%
19,100 (1) JLM Industries, Inc. $ 99,080
13,285 Southdown, Inc. 851,070
12,565 (1) Stillwater Mining Co. 355,747
Total 1,305,897
Capital Goods--8.3%
23,549 (1) Aeroflex, Inc. 344,404
31,920 (1)(2) Building One Services Corp. 486,780
49,320 (1) Group Maintenance America Corp. 659,655
9,770 (1) Landstar System, Inc. 380,419
25,890 (1) SLI, Inc. 710,357
19,805 (1) Zebra Technologies Corp., Class A 658,515
Total 3,240,130
Consumer Cyclical--17.5%
16,332 (1) Atlantic Coast Airlines Holdings, Inc. 504,250
18,270 (1) Furniture Brands International, Inc. 457,892
73,960 (1) Goody's Family Clothing, Inc. 665,640
35,365 (1) Just For Feet, Inc. 446,483
53,950 (1) Mesa Air Group, Inc. 364,163
16,255 (1) Pacific Sunwear of California 602,959
65,605 (1) Quaker Fabric Corp. 377,229
40,485 (1) Rainbow Rentals, Inc. 475,699
30,230 (1) Rent-A-Center, Inc. 937,130
13,315 (1) Ryanair Holdings PLC, ADR 595,845
17,345 SkyWest, Inc. 450,970
22,199 (1) United Stationers, Inc. 378,770
43,107 (1) White Cap Industries, Inc. 522,672
Total 6,779,702
Consumer Services--8.0%
18,576 (1)(2) Action Performance Cos., Inc. 629,262
33,650 (1) Global Imaging Systems, Inc. 483,719
39,075 (1) Metamor Worldwide, Inc. 764,405
33,895 (1) Rare Hospitality International, Inc. 610,110
15,131 (1) ResortQuest International, Inc. 253,444
42,379 (1) Travel Services International, Inc. 376,114
Total 3,117,054
Consumer Staples--5.4%
94,189 (1) NBTY, Inc. 476,832
19,353 (1) Performance Food Group Co. 512,855
34,795 Richfood Holdings, Inc. 434,938
17,800 (1)(2) Suiza Foods Corp. 668,613
Total 2,093,238
Energy--6.3%
51,777 (1) National-Oilwell, Inc. 673,101
74,246 (1) Newpark Resources, Inc. 682,135
72,960 (1) Patterson Energy, Inc. 588,240
18,245 Tidewater, Inc. 483,493
Total 2,426,969
Financial--21.6%
43,745 Advanta Corp., Class B 475,727
50,550 Allied Capital Corp. 909,900
87,595 (1) Amresco, Inc. 569,368
17,575 Apartment Investment & Management Co., Class A 704,098
35,035 ESG RE Ltd. 595,595
16,590 (1) FPIC Insurance Group, Inc. 746,550
11,620 First Charter Corp. 251,283
15,290 First Industrial Realty Trust 410,919
22,675 Hubco, Inc. 802,128
59,985 Imperial Credit Commercial Mortgage Investment Corp. 588,603
42,650 (1) Insurance Management Solutions Group, Inc. 447,825
42,131 (1) Long Beach Financial Corp. 468,707
12,735 Peoples Bancorp, Inc. 134,513
13,445 Southwest Securities Group, Inc. 711,745
14,272 Weingarten Realty Investors 591,395
Total 8,408,356
Healthcare--13.1%
15,025 Bindley Western Industries, Inc. 463,897
22,508 (1) Boron, LePore & Associates, Inc. 230,707
19,866 Cooper Companies, Inc. 312,890
56,360 (1) Coventry Health Care, Inc. 517,808
17,992 (1) InfoCure Corp. 473,415
79,208 (1) InterDent, Inc. 554,455
14,395 (1) Maxxim Medical, Inc. 229,420
67,436 (1) Physician Reliance Network, Inc. 556,347
12,199 (1) Priority HealthCare Corp., Class B 618,337
18,141 (1) Trigon Healthcare, Inc. 575,977
32,435 (1) United Payors & United Providers, Inc. 571,667
Total 5,104,920
Technology--2.9%
40,295 (1) Brooktrout Technology, Inc. 601,907
22,210 (1) ScanSource, Inc. 510,830
Total 1,112,737
Technology Services--6.4%
36,907 (1) Axent Technologies, Inc. 346,003
32,572 (1) Genesys Telecommunications Laboratories, Inc. 582,225
39,304 (1) International Telecommunication Data Systems, Inc. 444,627
57,273 (1) Savior Technology Group, Inc. 515,457
Principal
Amount or
Shares Value
Common Stocks--continued
Technology Services--continued
30,755 (1) Symix Systems, Inc. $ 242,195
15,410 (1) Tech Data Corp. 360,209
Total 2,490,716
Utilities--1.2%
17,495 Northwestern Corp. 452,683
Total Common Stocks (identified cost $36,537,517) 36,532,402
(3) Repurchase Agreement--6.3%
$2,465,000 Donaldson, Lufkin and Jenrette Securities Corp., 4.870%
dated 4/30/1999, due 5/3/1999 (at amortized cost) 2,465,000
Total Investments (identified cost $39,002,517)(4) $ 38,997,402
</TABLE>
(1) Non-income producing security.
(2) Certain shares on loan to broker.
(3) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(4) The cost of investments for federal tax purposes amounts to $39,002,517. The
net unrealized depreciation of investments on a federal tax basis amounts to
$5,115 which is comprised of $4,387,788 appreciation and $4,392,903
depreciation at April 30, 1999.
Note: The categories of investments are shown as a percentage of net assets
($38,828,719) at April 30, 1999. The following acronym is used throughout this
portfolio:
ADR--American Depositary Receipt
(See Notes which are an integral part of the Financial Statements)
STATEMENTS OF ASSETS AND LIABILITIES
Riggs Funds
April 30, 1999
<TABLE>
<CAPTION>
Stock Small
Fund Company Stock Fund
Assets:
<S> <C> <C>
Investments in securities, at value $ 98,360,110 $ 36,532,402
Investments in repurchase agreements 4,415,000 2,465,000
Total investments, at amortized cost and value 102,775,110 38,997,402
Cash 6,804 1,620
Collateral for securities loaned at fair value (Note 2) 7,342,140 1,454,520
Income receivable 65,736 1,436
Receivable for shares sold 34,560 2,486
Receivable for investments sold 789,053 849,206
Deferred organizational costs -- 6,154
Other Assets -- 1,180
Total assets 111,013,403 41,314,004
Liabilities:
Payable for investments payable 1,722,398 940,073
Payable upon return of securities loaned (Note 2) 7,342,140 1,454,520
Payable for shares redeemed 166,393 54,592
Accrued expenses 125,865 36,100
Total liabilities 9,356,796 2,485,285
Net Assets $ 101,656,607 $ 38,828,719
Net Assets Consists of:
Paid in capital $ 69,114,729 $ 43,593,657
Net unrealized appreciation (depreciation) of investments 24,447,469 (5,115)
Accumulated net realized gain (loss) on investments 8,057,676 (4,759,823)
Undistributed net investment income 36,733 --
Total Net Assets $ 101,656,607 $ 38,828,719
Class R Shares $ 101,474,313 $ 38,727,652
Class B Shares $ 182,294 $ 101,067
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Net Asset Value Per Share
Class R Shares $ 15.80 $ 11.27
Class B Shares $ 15.73 $ 11.21
Offering Price Per Share(1)
Class R Shares(3) $ 15.80 $ 11.27
Class B Shares(3) $ 15.73 $ 11.21
Redemption Proceeds Per Share(2)
Class R Shares(4) $ 15.48 $ 11.04
Class B Shares(5) $ 14.94 $ 10.65
Shares Outstanding:
Class R Shares 6,421,021 3,437,661
Class B Shares 11,586 9,012
Investments, at identified cost $ 78,327,641 $ 39,002,517
Investments, at tax cost $ 78,745,324 $ 39,002,517
</TABLE>
(1) See "What Shares Cost" in the Prospectus.
(2) See "Contingent Deferred Sales Charge" in the Prospectus.
(3) Computation of offering price per share 100/100.00 of net asset value.
(4) Computation of offering price per share 98/100 of net asset value.
(5) Computation of offering price per share 95/100 of net asset value.
STATEMENTS OF OPERATIONS
Riggs Funds
For the Year Ended April 30, 1999
<TABLE>
<CAPTION>
Small
Stock Company Stock
Fund Fund
Investment Income:
<S> <C> <C>
Dividends $ 1,350,333(1) $ 370,959
Interest 143,799 139,941
Total investment income 1,494,132 510,900
Expenses:
Investment advisory fee 756,558 333,762
Administrative personnel and services fee 141,350 58,587
Custodian fees 20,175 8,549
Transfer and dividend disbursing agent fees and expenses 46,248 27,006
Trustees' fees 3,009 2,009
Auditing fees 15,330 16,428
Legal fees 3,647 2,190
Portfolio accounting fees 3,024 3,193
Distribution services fee--Class R Shares 241,118 95,808
Distribution services fee--Class B Shares 653(2) 709(3)
Shareholder services fees--Class R Shares 216,250 85,927
Shareholder services fees--Class B Shares 211(2) 228(3)
Share registration costs 27,487 18,824
Printing and postage 7,110 9,116
Insurance premiums 2,739 2,374
Miscellaneous 5,926 11,592
Total expenses 1,490,835 676,302
Waivers:
Waiver of Distribution services fee--Class R Shares (99,487) (40,526)
Waiver of Shareholder services fee--Class R Shares (159,597) (63,815)
Waiver of Shareholder services fee--Class B Shares (145) (160)
Total waivers (259,229) (104,501)
Net expenses 1,231,606 571,801
Net investment income (loss) $ 262,526 $ (60,901)
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) on investments 8,227,259 (4,753,762)
Net change in unrealized appreciation (depreciation) of investments (3,149,465) (11,661,505)
Net realized and unrealized gain (loss) on investments 5,077,794 (16,415,267)
Change in net assets resulting from operations $ 5,340,320 $ (16,476,168)
</TABLE>
(1) Net of foreign taxes withheld $862.
(2) Reflects operations for the period from July 19, 1998 (date of initial
public investment) to April 30, 1999.
(3) Reflects operations for the period from July 17, 1998 (date of initial
public investment) to April 30, 1999.
(See Notes which are an integral part of the Financial Statements)
STATEMENTS OF CHANGES IN NET ASSETS
Riggs Funds
<TABLE>
<CAPTION>
Small Company
Stock Fund Stock Fund
Year Ended April 30, Year Ended April 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income (loss) $ 262,526 $ 663,953 $ (60,901) $ (108,923)
Net realized gain (loss) on investments 8,227,259 23,430,065 (4,753,762) 10,175,481
Net change in unrealized appreciation (depreciation) of
investments (3,149,465) 10,177,213 (11,661,505) 12,217,509
Change in net assets resulting from operations 5,340,320 34,271,231 (16,476,168) 22,284,067
Distributions to Shareholders--
Distributions from net investment income
Class R Shares (292,776) (683,221) -- --
Class B Shares (57)(1) -- -- --
Distributions from net realized gains
Class R Shares (10,140,817) (23,035,017) (5,407,163) (7,596,605)
Class B Shares (11,768)(1) -- (18,999)(2) --
Change in net assets resulting from distributions to
shareholders (10,445,418) (23,718,238) (5,426,162) (7,596,605)
Share Transactions--
Proceeds from sales of shares 23,801,961 36,671,637 23,672,150 23,389,601
Net asset value of shares issued to shareholders
in payment of distributions declared 10,170,057 7,420,981 5,415,147 774,594
Cost of shares redeemed (44,325,647) (26,672,024) (26,579,582) (8,405,450)
Change in net assets resulting from share transactions (10,353,629) 17,420,594 2,507,715 15,758,745
Change in net assets (15,458,727) 27,973,587 (19,394,615) 30,446,207
Net Assets:
Beginning of period 117,115,334 89,141,747 58,223,334 27,777,127
End of period $ 101,656,607 $ 117,115,334 $ 38,828,719 $ 58,223,334
Undistributed net investment income included in net
assets at end of period $ 36,733 $ 79,672 -- --
Net gain (loss) as computed for federal tax purposes $ 8,539,951 $ 23,589,130 $ (3,967,647) $ 10,181,542
</TABLE>
(1) Reflects operations for the period from July 19, 1998 (date of initial
public investment) to April 30, 1999.
(2) Reflects operations for the period from July 17, 1998 (date of initial
public investment) to April 30, 1999.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS
Riggs Stock Fund
Class B Shares
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Period Ended
April 30, 1999 (1)
<S> <C>
Net asset value, beginning of period $16.65
Income from investment operations
Net investment loss (0.03)
Net realized and unrealized gain on investments 0.83
Total from investment operations 0.80
Less distributions
Distributions from net investment income (0.01)
Distributions from net realized gain on investments (1.71)
Total distributions (1.72)
Net asset value, end of period $15.73
Total return (2) 5.31%
Ratios to average net assets
Expenses (3) 2.16%(4)
Net investment loss (3) (0.67)(4)
Expenses (after waivers) 1.97%(4)
Net investment loss (after waivers) (0.48)(4)
Supplemental data
Net assets, end of period (000 omitted) $ 182
Portfolio turnover 52%
</TABLE>
(1) Reflects operations for the period from July 19, 1998 (date of initial
public investment) to April 30, 1999.
(2) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(3) During the period certain fees were voluntarily waived. If such voluntary
waivers had not been accrued, the ratios would have been as indicated.
(4) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS
Riggs Small Company Stock Fund
Class B Shares
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Period Ended
April 30, 1999 (1)
<S> <C>
Net asset value, beginning of period $ 17.25
Income from investment operations
Net investment loss (0.07)
Net realized and unrealized loss on investments (4.12)
Total from investment operations (4.19)
Less distributions
Distributions from net realized gain on investments (1.85)
Net asset value, end of period $ 11.21
Total return (2) (24.43)%
Ratios to average net assets
Expenses (3) 2.33%(4)
Net investment loss (3) (0.97)%(4)
Expenses (after waivers) 2.13%(4)
Net investment loss (after waivers) (0.77)%(4)
Supplemental data
Net assets, end of period (000 omitted) $ 101
Portfolio turnover 100%
</TABLE>
(1) Reflects operations for the period from July 17, 1998 (date of initial
public investment) to April 30, 1999.
(2) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(3) During the period certain fees were voluntarily waived. If such waivers had
not been accrued, the ratios would have been as indicated.
(4) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
COMBINED NOTES TO FINANCIAL STATEMENTS
Riggs Funds
April 30, 1999
(1) Organization
Riggs Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act"), as an open-end management investment company. The
Board of Trustees approved a change in the name of the Trust from RIMCO Monument
Funds to Riggs Funds, the name of the Small Capitalization Equity Fund to Small
Company Stock Fund, effective July 1, 1998. The Trust consists of five
diversified portfolios, two of which offer Class B Shares (individually referred
to as the "Fund", or collectively as the "Funds") which are presented herein:
Portfolio Name Investment Objective Riggs Stock Fund ("Stock Fund") To provide
growth of capital and income.
Riggs Small Company Stock Fund To provide long-term capital appreciation.
("Small Company Fund")
Effective July 1, 1998, Stock Fund and Small Company Fund offered two classes of
shares, its existing class (redesignated as Class R Shares) and a new class
(designated as Class B Shares). Class B Shares are presented herein. The assets
of each portfolio are segregated and a shareholder's interest is limited to the
portfolio in which shares are held.
(2) Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
Investment Valuations
U.S. government securities, listed corporate bonds (other fixed income and
asset-backed securities), and unlisted securities and private placement
securities are generally valued at the mean of the latest bid and asked price as
furnished by an independent pricing service. Listed equity securities (and
investments in closed-end investment companies) are valued at the last sale
price reported on its primary national securities exchange. For the money market
Funds within the Trust, the use of the amortized cost method to value portfolio
securities is in accordance with Rule 2a-7 under the Act. For fluctuating net
asset value Funds within the Trust, short-term securities are valued at the
prices provided by an independent pricing service. However, short-term
securities purchased with remaining maturities of sixty days or less may be
valued at amortized cost, which approximates fair market value.
Repurchase Agreements
It is the policy of the Funds to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Funds to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Funds' adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Funds could receive less
than the repurchase price on the sale of collateral securities.
Investment Income, Expenses and Distributions
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Dividend income and distributions to shareholders are recorded on
the ex-dividend date.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing book/tax treatments of wash
sales, and net operating losses. The following reclassifications have been made
to the financial statements.
Increase (Decrease)
Undistributed Accumulated
Paid-In Net Investment Net Realized
Fund Name Capital Income (Loss) Gain
Stock Fund -- $(12,632) $ 12,632
Small Company Fund $(214,255) 60,901 153,354
Federal Taxes
It is the Funds' policy to comply with the provisions of the Code applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of their income. Accordingly, no provisions for federal tax
are necessary.
At April 30, 1999, the Small Company Fund, for federal tax purposes, had a
capital loss carryforward of $3,967,647, which will reduce the Fund's taxable
income arising from future net realized gains on investments, if any, to the
extent permitted by the Code, and thus reduce the amount of the distributions to
shareholders which would otherwise be necessary to relieve the Small Company
Fund of any liability for federal tax. Pursuant to the Code, such capital loss
carryforward will expire in 2006.
When-Issued and Delayed Delivery Transactions
The Funds may engage in when-issued or delayed delivery transactions. The Funds
record when-issued securities on the trade date and maintain security positions
such that sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed delivery
basis are marked to market daily and begin earning interest on the settlement
date.
Deferred Expenses
The costs incurred by each Fund with respect to organization of their shares in
their first fiscal year, excluding the initial expense of registering their
shares, have been deferred and are being amortized over a period not to exceed
five years from each Fund's commencement date.
Securities Lending
Under guidelines adopted by the Board of Trustees, each Fund may lend portfolio
securities to brokers/dealers and other financial organizations in order to
generate additional income. Loans of portfolio securities by a Fund will be
collateralized by cash, letters of credit or U.S. government securities which
are maintained at 100% of the current market value of the loaned securities.
Collateral is either held as cash or reinvested in short-term securities
including overnight repurchase agreements, commercial paper, master notes,
floating rate corporate notes (with at least quarterly reset rates) and money
market funds. The Funds return a portion of interest on any cash received as
collateral and continue to receive interest or dividends on securities loaned.
Included in interest income is $4,826 and $9,248 for Stock Fund and Small
Company Fund, respectively, of income earned on securities lending transactions.
Loans will be made to firms deemed by the Company's adviser to be of good
financial standing and will not be made unless, in the judgment of the Company's
adviser, the consideration to be earned from such loans would justify the risk.
The risks associated with lending portfolio securities consist of possible
decline in value of collateral, possible delays receiving additional collateral
or in the recovery of the loaned securities or expenses from enforcing the
Funds' rights should the borrower of the securities fail financially.
As of April 30, 1999, the value of securities loaned plus interest, the payable
on collateral due to broker and the value of reinvested cash collateral
securities were as follows:
Payable on
Market Value of Collateral
Fund Securities Loaned Due Broker
Stock Fund $7,195,507 $7,342,140
Small Company Fund $1,417,648 $1,454,520
Cash collateral is held in a segregated account.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those estimated.
Other
Investment transactions are accounted for on the trade date.
(3) Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Stock Fund
Year Ended Year Ended
April 30, 1999 April 30, 1998
Class R Shares Amount Shares Amount Shares
<S> <C> <C> <C> <C>
Shares sold $ 23,625,339 1,542,657 $ 36,671,637 2,347,730
Shares issued to shareholders in payment of distributions declared 10,158,300 676,733 7,420,981 530,956
Shares redeemed (44,312,176) (2,867,893) (26,672,024) (1,591,271)
Net change resulting from Class R Share transactions $(10,528,537) (648,503) $ 17,420,594 1,287,415
</TABLE>
<TABLE>
<CAPTION>
Stock Fund
Period Ended
April 30, 1999 (1)
Class B Shares Amount Shares
<S> <C> <C>
Shares sold $ 176,622 11,692
Shares issued to shareholders in payment of distributions declared 11,757 785
Shares redeemed (13,471) (891)
Net change resulting from Class B Share transactions $ 174,908 11,586
Net change resulting from share transactions $(10,353,629) (636,917)
</TABLE>
<TABLE>
<CAPTION>
Small Company Fund
Year Ended Year Ended
April 30, 1999 April 30, 1998
Class R Shares Amount Shares Amount Shares
<S> <C> <C> <C> <C>
Shares sold $ 23,513,675 1,811,335 $23,389,601 1,357,019
Shares issued to shareholders in payment of distributions declared 5,396,154 472,104 774,594 51,264
Shares redeemed (26,536,536) (1,942,196) (8,405,450) (482,797)
Net change resulting from Class R Shares transactions $ 2,373,293 341,243 $15,758,745 925,486
</TABLE>
<TABLE>
<CAPTION>
Small Company Fund
Period Ended
April 30, 1999 (2)
Class B Shares Amount Shares
<S> <C> <C>
Shares sold $ 158,475 11,167
Shares issued to shareholders in payment of distributions declared 18,993 1,668
Shares redeemed (43,046) (3,822)
Net change resulting from Class B Share transactions $ 134,422 9,013
Net change resulting from transactions $2,507,715 350,256
</TABLE>
(1) Reflects operations for the period from July 19, 1998 (date of initial
public investment) to April 30, 1999.
(2) Reflects operations for the period from July 17, 1998 (date of initial
public investment) to April 30, 1999.
(4) Investment Advisory Fee and Other Transactions with Affiliates
Investment Advisory Fee
Riggs Investment Management Corp., the Trust's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee based on
a percentage of each Fund's average daily net assets (see below). The Adviser
may voluntarily choose to waive a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
Fund Annual Rate
Stock Fund 0.75%
Small Company Fund 0.80%
Administrative Fee
Federated Administrative Services ("FAS") provides the Trust with certain
administrative personnel and services (including certain legal, fund accounting
and transfer agency services). The FAS fee is based on the level of average
aggregate net assets of the Trust for the period.
Distribution Services Fee
The Funds have adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Act. Under the terms of the Plan, the Fund will compensate Federated
Securities Corp. ("FSC"), the principal distributor, from the net assets of the
fund to finance activities intended to result in the sale of the Fund's Class R
and Class B Shares. Effective July 1, 1998, the Plan provides that the Funds may
incur distribution expenses according to the following schedule annually, to
compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC
can modify or terminate this voluntary waiver at any time at its sole
disctretion.
Percentage of Average
Share Class Name Net Assets of Class
Class R Shares 0.25%
Class B Shares 0.75%
Shareholder Services Fee
Under the terms of a Shareholder Services Agreement with FAS, effective July 1,
1998, each Fund pays up to 0.25% of average daily net assets of the Fund for the
period. The fee is paid to FAS to finance certain services for shareholders and
to maintain shareholder accounts. FAS may voluntarily choose to waive any
portion of its fee. FAS can modify or terminate this voluntary waiver at any
time at its sole discretion.
Custodian Fees
Riggs Bank N.A. is the Fund's custodian. The fee is based on the level of each
Fund's average daily net assets for the period, plus out-of-pocket expenses.
Organizational Expenses
Organizational expenses were borne initially by FAS. The Funds have agreed to
reimburse FAS for the organizational expenses during the five year period
following each Fund's effective date. For the year ended April 30, 1999, the
following amounts were paid pursuant to this agreement:
<TABLE>
<CAPTION>
Organizational Expenses
Organizational Paid for the Year Ended
Fund Effective Date Expenses April 30, 1999
<S> <C> <C> <C>
Small Company Fund February 6, 1995 $22,693 $6,150
</TABLE>
General
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
(5) Investment Transactions
Purchases and sales of investments, excluding short-term obligations, for the
year ended April 30, 1999, were as follows:
Fund Purchases Sales
Stock Fund $51,204,037 $70,897,158
Small Company Fund 39,722,586 40,278,012
(6)Year 2000 (unaudited)
Similar to other financial organizations, the Funds could be adversely affected
if the computer systems used by the Funds' service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Funds' Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that theses steps will be
sufficient to avoid any adverse impact to the funds.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
RIGGS FUNDS:
We have audited the accompanying statements of assets and liabilities of Riggs
Stock Fund and Riggs Small Company Stock Fund (investment portfolios of Riggs
Funds, a Massachusetts business trust), including the schedules of portfolios of
investments, as of April 30, 1999, and the related statements of operations for
the year then ended, and the statements of changes in net assets and the
financial highlights for the period ended April 30, 1999 (as presented on pages
13 and 14). These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit. The statements of changes for the year ended April 30, 1998 were audited
by other auditors whose report dated June 22, 1998 expressed an unqualified
opinion.
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 financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of April 30, 1999, by
correspondence with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Riggs
Stock Fund and Riggs Small Company Stock Fund (investment portfolios of Riggs
Funds) as of April 30, 1999, the results of their operations for the year then
ended, and the changes in their net assets and their financial highlights (as
presented on pages 13 and 14) in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts,
June 22, 1999
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
Nicholas P. Constantakis
William J. Copeland
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr.
Edward C. Gonzales
Peter E. Madden
John E. Murray, Jr.
Wesley W. Posvar
Marjorie P. Smuts
John S. Walsh
*Trustees as of June 15, 1999.
OFFICERS
John F. Donahue
Chairman
Edward C. Gonzales
President and Treasurer
J. Christopher Donahue
Executive Vice President
John W. McGonigle
Executive Vice President and Secretary
Joseph S. Machi
Vice President and Assistant Treasurer
Richard B. Fisher
Vice President
C. Grant Anderson
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal. This report is authorized for distribution to prospective
investors only when preceded or accompanied by the Funds' prospectus which
contains facts concerning the Funds' objectives and policies, management fees,
expenses and other information.
Cusip 76656A 708
Cusip 76656A 880
G00356-01 (6/99)
A. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the upper left
quadrant. The Class R Shares of the Riggs U.S. Government Securities Fund ("U.S.
Government Securities Fund") is represented by a solid line. The Lehman Brothers
Government/Corporate Total Index ("LBGCTI") is represented by broken line. The
line graph is a visual representation of a comparison of change in value of a
$10,000 hypothetical investment in the U.S. Government Securities Fund and the
LGCTI. The "x" axis reflects computation periods from May 11, 1992 (start of
performance) to April 30, 1999. The "y" axis reflects the cost of the
investment. The right margin reflects the ending value of the hypothetical
investment in the U.S. Government Securities Fund, as compared to the LBGCTI;
the ending values were $15,395 and $16,989, respectively. The legend in the
bottom quadrant of the graphic presentation indicates the U.S. Government
Securities Fund's Average Annual Total Returns for the 1-year, 5-year, and start
of performance periods ended April 30, 1999, which were 4.03%, 6.59%, and 6.93%,
respectively.
B. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the upper left
quadrant. The Class R Shares of the Riggs Stock Fund ("Stock Fund") is
represented by a solid line. The Standard & Poor's 500 Index ("S&P 500") is
represented by a broken line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the Stock
Fund and the S&P 500. The "x" axis reflects computation periods from May 11,
1992 (start of performance) to April 30, 1999. The "y" axis reflects the cost of
the investment. The right margin reflects the ending value of the hypothetical
investment in the Stock Fund, as compared to the S&P 500; the ending values were
$31,385 and $37,742, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Stock Fund's Average Annual Total Returns for
the 1-year, 5-year, and start of performance periods ended April 30, 1999, which
were 4.60%, 21.26%, and 18.43%, respectively.
C. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the upper left
quadrant. The Class R Shares of the Riggs Small Company Stock Fund ("Small
Company Fund") is represented by a solid line. The Russell 2000 Index ("Russell
2000") is represented by a broken line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Small Company Fund and the Russell 2000. The "x" axis reflects
computation periods from February 27, 1995 (start of performance) to April 30,
1999. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Small Company
Fund, as compared to the Russell 2000; the ending values were $16,735 and
$22,460, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Small Company Fund's Average Annual Total Returns for
the 1-year and start of performance periods ended April 30, 1999, which were
(31.53%), and 13.79%, respectively.
<PAGE>
D The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the upper left
quadrant. The Class B Shares of the Riggs Stock Fund ("Stock Fund") is
represented by a solid line. The Standard & Poor's 500 Index ("S&P 500") is
represented by a broken line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the Stock
Fund and the S&P 500. The "x" axis reflects computation periods from July 19,
1998 (start of performance) to April 30, 1999. The "y" axis reflects the cost of
the investment. The right margin reflects the ending value of the hypothetical
investment in the Stock Fund, as compared to the S&P 500; the ending values were
$10,031 and $11,748, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Stock Fund's Cumulative Total Return from
July 19, 1998 (start of performance) to April 30, 1999, which was 0.59%.
E The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed in the upper left
quadrant. The Class B Shares of the Riggs Small Company Stock Fund ("Small
Company Fund") is represented by a solid line. The Russell 2000 Index ("Russell
2000") is represented by a broken line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Small Company Fund and the Russell 2000. The "x" axis reflects
computation periods from July 17, 1998 (start of performance) to April 30, 1999.
The "y" axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the Small Company Fund, as
compared to the Russell 2000; the ending values were $7,179 and $9,316,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Small Company Fund's Cumulative Total Return from July 17, 1998
(start of performance) to April 30, 1999, which was (27.68%).
