THE ADVISORS' INNER CIRCLE FUND
HGK FIXED INCOME FUND
SEMI-ANNUAL REPORT TO SHAREHOLDERS
AS OF APRIL 30, 1996
THIS INFORMATION MUST BE PRECEDED OR ACCOMPANIED
BY A CURRENT PROSPECTUS FOR THE FUND DESCRIBED.
<PAGE>
STATEMENT OF NET ASSETS THE ADVISORS' INNER CIRCLE FUND
April 30, 1996 Unaudited
Face Market
Amount Value
HGK FIXEDINCOMEFUND (000) (000)
- --------------------------------------------------------------
% of Total Fund Investments
PIE CHART
[GRAPHIC OMITTED]
Yankee Repurchase
12% Agreements
7%
Utility U.S. Treasury
8% Obligations
25%
Financial U.S. Gov't.
10% Agency
Obligations
Asset Backed 18%
1%
Industrial
19%
CORPORATE OBLIGATIONS (47.5%)
AMR Corporation
9.000%, 08/01/12 $100 $ 108
Bankers Trust New York
7.500%, 01/15/02 350 355
7.130%, 03/15/06 175 170
BCH Cayman Islands YB
6.500%, 02/15/06 300 276
Brascan
7.380%, 10/01/02 300 295
Countrywide Funding MTN
6.880%, 08/03/98 150 151
Ford Motor
7.130%, 11/15/25 245 226
General Motors
7.700%, 04/14/16 500 497
Kmart
7.950%, 02/01/23 90 69
Lehman Brothers
7.130%, 09/15/03 350 344
Nabisco
7.550%, 06/15/15 250 237
News America
7.700%, 10/30/25 450 411
Niagara Mohawk Power
7.750%, 05/15/06 500 439
Ontario Global Bond
6.000%, 02/21/06 125 114
Province of Manitoba
7.750%, 07/17/16 175 182
Province of Quebec
6.500%, 01/17/06 500 471
Salomon Brothers MTN
7.300%, 06/11/96 250 250
TCI Communications
8.750%, 08/01/15 100 97
Time Warner
6.850%, 01/15/26 425 410
Union Pacific Railroad
8.350%, 05/01/25 450 458
------
TOTAL CORPORATE OBLIGATIONS
(Cost $5,757,790) 5,560
------
ASSET-BACKED SECURITIES (0.9%)
Ford Credit Grantor Trust 94B A
7.300%, 10/15/99 107 109
------
TOTAL ASSET-BACKED SECURITIES
(Cost $107,600) 109
------
U.S. GOVERNMENT AGENCY
OBLIGATIONS (18.2%)
FNMA
5.880%, 02/02/06 450 414
6.020%, 09/19/97 375 374
Face Market
Amount Value
(000) (000)
- --------------------------------------------------------------
FNMA MTN
5.230%, 02/18/99 $350 $ 339
5.000%, 02/25/98 675 661
7.650%, 05/04/05 150 151
GNMA
5.000%, 12/20/25 199 194
-------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $2,195,394) 2,133
-------
U.S. TREASURY OBLIGATIONS (25.0%)
U.S. Treasury Bonds
7.500%, 11/15/16 425 444
7.250%, 08/15/22 100 102
U.S. Treasury Notes
6.250%, 08/31/96 275 276
5.000%, 01/31/99 250 242
6.250%, 05/31/00 500 498
7.500%, 11/15/01 400 418
5.750%, 08/15/03 850 808
6.250%, 08/15/23 150 135
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,969,314) 2,923
-------
REPURCHASE AGREEMENT (6.9%)
Lehman Brothers Securities 4.92%,
dated 04/30/96, matures
05/01/96, repurchase price
$812,369 (collateralized by
U.S. Treasury Bond, par value
$766,016, 7.625%, due
02/15/25, market value
$839,468) 812 812
-------
TOTAL REPURCHASE AGREEMENT
(Cost $812,264) 812
-------
TOTAL INVESTMENTS (98.5%)
(Cost $11,842,362) 11,537
-------
OTHER ASSETS AND LIABILITIES (1.5%)
Other Assets and Liabilities, Net 174
-------
NET ASSETS:
Portfolio shares (unlimited authorization,
no par value) based on 1,159,716
outstanding shares of beneficial
interest 11,886
Undistributed net investment income 7
Accumulated net realized gain on
investments 123
Net unrealized depreciation on
investments (305)
-------
TOTAL NET ASSETS (100.0%) $11,711
=======
Net Asset Value, Offering Price and
Redemption Price Per Share $ 10.10
=======
FNMA - FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA - GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MTN - MEDIUM TERM NOTE
YB - YANKEE BOND
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
STATEMENTS.
<PAGE>
STATEMENT OF OPERATIONS THE ADVISORS' INNER CIRCLE FUND
For the six-month period ended April 30,1996 Unaudited
HGK
Fixed Income
Fund
------------
11/01/95
to 04/30/96
(000)
- --------------------------------------------------------------------------------
Investment Income:
Interest....................................................... $ 395
- --------------------------------------------------------------------------------
Total Investment Income...................................... 395
- --------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees....................................... 28
Waiver and Reimbursements of Investment Advisory Fees.......... (33)
Administrative Fees............................................ 37
Custodian Fees................................................. 2
Professional Fees.............................................. 6
Transfer Agent Fees............................................ 11
Printing Fees.................................................. 3
Trustee Fees................................................... 2
- --------------------------------------------------------------------------------
Total Expenses............................................... 56
- --------------------------------------------------------------------------------
Net Investment Income...................................... 339
- --------------------------------------------------------------------------------
Net Realized Gain from Securities Sold......................... 123
Net Unrealized Depreciation of investment Securities........... (556)
- --------------------------------------------------------------------------------
Net Realized and Unrealized Loss on Investments.............. (433)
- --------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting From Operations........... (94)
================================================================================
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS THE ADVISORS' INNER CIRCLE FUND
For the six-month period ended April 30,1996 (Unaudited) and the period ended
October 31.
HGK
FIXED INCOME
FUND
---------------------------
11/01/95 11/03/94(1)
TO 4/30/96 TO 10/31/95
(000) (000)
- -------------------------------------------------------------------------------
nvestment Activities:
Net Investment Income ............................ $ 339 $ 505
Net Realized Gain on Securities Sold ............. 123 417
Net Unrealized Appreciation (Depreciation)
of Investment Securities ....................... (556) 251
- -------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets
Resulting From Operations..................... (94) 1,173
- -------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income ............................ (332) (505)
Realized Capital Gains ........................... (417) --
- -------------------------------------------------------------------------------
Total Distributions............................. (749) (505)
- -------------------------------------------------------------------------------
Capital Share Transactions:
Shares Issued .................................... 1,928 10,408
Shares Issued in Lieu of Cash Distributions ...... 746 504
Shares Redeemed .................................. (540) (1,160)
- -------------------------------------------------------------------------------
Increase in Net Assets Derived from Capital
Share Transactions ........................... 2,134 9,752
- -------------------------------------------------------------------------------
Total Increase in Net Assets ................. 1,291 10,420
- -------------------------------------------------------------------------------
Net Assets:
Beginning of Period .............................. 10,420 --
- -------------------------------------------------------------------------------
End of Period .................................... $11,711 $10,420
- -------------------------------------------------------------------------------
Shares Issued and Redeemed:
Issued ........................................... 183 1,022
Issued in Lieu of Cash Distributions ............. 71 48
Redeemed ......................................... (52) (112)
- -------------------------------------------------------------------------------
Net Increase in Share Transactions................ 202 958
===============================================================================
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) The HGK Fixed Income Fund commenced operations on November 3, 1994.
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS THE ADVISORS' INNER CIRCLE FUND
For the six-month period ended April 30, 1996 (Unaudited) and the period ended October 31.
For a Share Outstanding Throughout each Period
Net Realized and Net Net
Asset Unrealized Distributions Distributions Asset Assets
Value Net Gains or from Net from Value End
Beginning Investment (Losses) on Investment Capital End Total of Period
of Period Income Securities Income Gains of Period Return (000)
--------- ---------- ----------- ------------ ------------- --------- ------ ----------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------
HGK FIXED INCOME
- ----------------
1996 $10.88 0.31 (0.37) (0.31) (0.41) $10.10 (0.63%1 $11,711
1995(2) $10.00 0.67 0.88 (0.67) -- $10.88 16.07%* $10,420
</TABLE>
Ratio
Ratio of Net
of Expenses Income
Ratio to Average to Average
Ratio of Net Net Assets Net Assets
of Expenses Income (Excluding (Excluding Portfolio
to Average to Average Waivers and Waivers and Turnover
Net Assets Net Assets Reimbursements) Reimbursements) Rate
----------- ---------- --------------- --------------- ---------
- ----------------
HGK FIXED INCOME
- ----------------
1996 1.00%* 6.06%* 1.60%* 5.46%* 139.30%
1995(2) 1.00%* 6.38%* 2.37%* 5.01%* 300.48%
* Annualized
(1) Total return is for the period indicated and has not been annualized.
(2) The HGK Fixed Income Fund commenced operations on November 3, 1994.
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS THE ADVISORS' INNER CIRCLE FUND
April 30, 1996 Unaudited
1. ORGANIZATION:
THE ADVISORS' INNER CIRCLE FUND (the "Trust") is organized as a Massachusetts
business trust under a Declaration of Trust dated July 18, 1991. The Trust is
registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company with nine portfolios. The
financial statements herein are those of the HGK Fixed Income Fund (the "Fund").
The financial statements of the remaining portfolios are presented separately.
The assets of each portfolio are segregated, and a Shareholder's interest is
limited to the portfolio in which shares are held. The Funds' prospectus
provides a description of each Fund's investment objectives, policies and
strategies.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies followed by
the Fund.
SECURITY VALUATION -- Investments in equity securities which are traded on
a national exchange (or reported on the NASDAQ national market system) are
stated at the last quoted sales price if readily available for such equity
securities traded in the over-the counter market and listed equity
securities for which no sale was reported on that date are stated at the
last quoted bid price. Debt obligations exceeding sixty days to maturity
for which market quotations are readily available are valued at the most
recent quoted bid price. Debt obligations with sixty days or less remaining
until maturity may be valued at their amortized cost, which approximates
market value.
FEDERAL INCOME TAXES -- It is the Fund's intention to qualify as a
regulated investment company by complying with the appropriate provisions
of the Internal Revenue Code of 1986, as amended. Accordingly, no provision
for Federal income taxes is required.
SECURITY TRANSACTIONS AND RELATED INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Interest income is recognized on the accrual basis. Costs used in
determining realized gains and losses on the sales of investment securities
are those of the specific securities sold during the respective holding
period. Purchase discounts and premiums on securities held by the Fund are
accreted and amortized to maturity using the scientific interest method,
which approximates the effective interest method.
NET ASSET VALUE PER SHARE -- The net asset value per share of the Fund is
calculated on each business day by dividing the total value of assets, less
liabilities, by the number of shares outstanding.
OTHER -- Expenses that are directly related to the Fund are charged to the
Fund. Other operating expenses of the Trust are prorated to the Fund on the
basis of relative daily net assets.
Distributions from net investment income are declared daily and paid to
Shareholders monthly. Any net realized capital gains are distributed to
Shareholders at least annually.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. ORGANIZATION COSTS AND
TRANSACTIONS WITH AFFILIATES:
The Fund incurred organization costs of approximately $13,000. These costs have
been deferred and are being amortized on a straight line basis over a period of
sixty months commencing with operations. Organization costs include legal fees
of approximately $11,000 for organizational work performed by a law firm of
which a trustee of the Trust is a partner and two officers of the Trust are
partners. In the event any of the initial shares of the Trust are redeemed by
any holder thereof during the period that the Trust is amortizing its
organizational costs, the redemption proceeds payable to the holder thereof by
the Trust will be reduced by the unamortized organizational costs in the same
ratio as the number of initial shares
<PAGE>
NOTES TO FINANCIAL STATEMENTS THE ADVISORS' INNER CIRCLE FUND
April 30, 1996 Unaudited
being redeemed bears to the number of initial shares outstanding at the time of
redemption.
Certain officers of the Trust are also officers of SEI Financial Management
Corporation (the "Administrator") and/or SEI Financial Services Company (the
"Distributor"). Such officers are paid no fees by the Trust for serving as
officers of the Trust.
4. ADMINISTRATION, SHAREHOLDER SERVICING
AND DISTRIBUTION AGREEMENTS:
The Trust and the Administrator are parties to an Administration Agreement dated
November 14, 1991 as amended and restated on May 17, 1994 under which the
Administrator provides management and administrative services for an annual fee
equal to the higher of $75,000 or .20% of the Fund's average daily net assets.
DST Systems Inc. (the "Transfer Agent") serves as the transfer agent and
dividend disbursing agent for the Fund under a transfer agency agreement with
the Fund.
The Trust and Distributor are parties to a Distribution Agreement dated November
14, 1991 as amended and restated on August 8, 1994. The Distributor receives no
fees for its distribution services under this agreement.
5. INVESTMENT ADVISORY AND CUSTODIAN
AGREEMENTS:
The Trust and HGK Asset Management, Inc. (the "Adviser") are parties to an
Investment Advisory Agreement dated August 15, 1994 under which the Adviser
receives an annual fee equal to .50% of the Fund's average daily net assets. The
Adviser has voluntarily agreed to waive all or a portion of its fees and to
reimburse expenses in order to limit operating expenses to not more than 1.00%
of the average daily net assets of the Fund. Fee waivers and expense
reimbursements are voluntary and may be terminated at any time.
CoreStates Bank, N.A. acts as custodian (the "Custodian") for the Fund. Fees of
the Custodian are being paid on the basis of the net assets of the Fund. The
Custodian plays no role in determining the investment policies of the Fund or
which securities are to be purchased or sold by the Fund.
6. INVESTMENT TRANSACTIONS:
The cost of security purchases and the proceeds from security sales, other than
short-term investments, for the period ended April 30, 1996 are as follows:
HGK FIXED INCOME
FUND (000)
----------------
Purchases
Government............................ $ 4,647
Other................................. 10,003
Sales
Government............................ $ 4,920
Other................................. 8,436
At April 30, 1996, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes were not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the Fund
at April 30, 1996, are as follows:
HGK FIXED INCOME
FUND (000)
----------------
Aggregate gross unrealized
appreciation.......................... 68
Aggregate gross unrealized
depreciation.......................... (373)
----------------
Net unrealized depreciation................ (305)
================
<PAGE>
HGK-F-004-02
