[TIP LOGO]
TURNER GROWTH EQUITY FUND
TURNER SMALL CAP FUND
TURNER MIDCAP FUND
TURNER ULTRA LARGE CAP FUND
INVESTMENT ADVISOR'S REPORT TO SHAREHOLDERS
To Our Shareholders:
The stock market provided investors with unusually disparate returns over the
past six months ending March 31, 1997. The economy's slow growth environment,
controlled inflation, generally strong corporate earnings and low unemployment
bolstered investors enthusiasm during the period. This theme has been the
impetus for one of the longest bull markets without a significant correction in
the history of the market. This market rise, however, has been very narrowly
focused during the last six months. A small number of the most liquid large cap
stocks have benefited disproportionately from huge inflows of money into index
funds from institutional and retail investors. This increased flow of assets
into stock index funds comes at a time when these stocks have already had a
great run. On the other hand, smaller and mid cap stocks were penalized as
investors steered money away from these segments in favor of the very large
stocks.
The equity market rose 11.24% during the period October 1, 1996 to March 31,
1997 according to the S&P 500 Index. The market's increase was dominated by two
major factors during this six month time period: 1) value stocks outperformed
growth stocks, and 2) large cap equities surpassed the returns of small and mid
cap equities. This is evidenced by comparing the performance of the Russell Top
200 Value Index (large cap value stocks) which earned 13.92%, versus the Russell
2000 Growth Index (small cap growth stocks) which lost -10.25% during the six
month period. This represents a 24.89 percentage point spread between the best
performing class of stocks and the worst. It is unusual to see such wide
dispersion amongst various types of stocks during such a short period of time.
Unfortunately, given the recent market environment, the Turner Funds did not
perform as well as we would have liked. Our bias toward growth stocks and our
proclivity to own a broad range of securities within all capitalization
categories caused us to under perform our benchmarks.
The Turner Growth Equity Fund declined in value by -1.02% during the six months
ending March 31, 1997 compared to 6.61% for the Russell 1000 Growth Index. The
Fund's performance compared more favorably to the Lipper Capital Appreciation
Funds Average, which lost -0.68% during this same period. The Turner Midcap Fund
fell -1.12% during the past six months while the Russell Midcap Growth Index
lost -0.86%. The mutual fund proxy for mid cap
<PAGE>
investing fell -3.62%, according to the Lipper Mid Cap Funds Average. The Turner
Small Cap Fund gave back some of its earlier gains, falling -19.53% during this
period. In comparison, the Russell 2500 Index gained 2.09% and the Lipper Small
Cap Funds Average declined -4.65%. As stated earlier, small cap growth stocks
were pummeled compared to the broader small cap benchmarks, which contain a
significant amount of small cap value stocks in addition to growth. Finally, the
most recent addition to the Turner family of Funds, the Turner Ultra Large Cap
Fund, opened February 1, 1997. Timing is often everything and in this case it
did not work in our favor. The two-month return for this Fund was -5.80%
compared to the Russell Top 200 Growth Index, which lost -5.41%.
Inflationary warning bells went off during the first quarter, which prompted Fed
Chairman Alan Greenspan to raise the Federal Funds rate on March 25th. Interest
rates promptly rose, sparking an equity market sell-off as the quarter came to a
close. This action spooked large cap stocks the most, allowing the broader
market (and the Turner Funds) to pick up relative performance.
As you know, we follow a very disciplined investment process designed to seek
growth companies that will provide superior total returns for our investors.
Characteristics of our portfolios include above average earnings forecasts, more
rising earnings estimates and more positive earnings surprises than the overall
equity market. In addition, we strive to avoid owning companies experiencing
downward revisions in earnings estimates and negative earnings surprises (or at
least own fewer relative to the stock market). We continue to be successful in
the selection of companies with these attractive characteristics, though the
market has not rewarded these firms with strong stock performance. We are
disappointed that the market environment was not conducive to our style of
investing during the past six months, however, we certainly see this as a buying
opportunity because our stocks are very attractive at these levels.
We thank you for your support and confidence during this difficult time period.
We remain confident that our disciplines will once again allow us to outperform
when the market broadens out.
Sincerely,
/S/ SIGNATURE
Robert E. Turner
Chairman and Chief Investment Officer
Turner Investment Partners, Inc.
<PAGE>
[TIP LOGO]
Dear Shareholders:
The Turner Funds will undergo a series of changes in the coming months. These
changes are designed to improve service and reduce costs. Additionally, we will
be adding more investment choices, which will round out our fund family and
complement our growth and capital appreciation approach.
The first change you will notice will be the renaming of the Turner Funds to the
TIP Funds. This change will have no affect on the investment management process
or portfolio managers that manage the current Turner Funds: Growth Equity, Small
Cap, Midcap and Ultra Large Cap.
Why are we making these changes? The mutual fund industry has become a very
competitive business. It is our opinion that in order to remain competitive we
must offer our clients a full complement of investment choices. Under the TIP
Funds banner, we will be bringing in new investment management firms with
expertise in other asset classes such as fixed income, value stocks and
international equities to augment the number and quality of funds in the TIP
Funds family. These alliances will provide the foundation for the TIP Funds
family to meet our three goals of enhanced shareholder services, competitive
expense ratios and greater investment choices.
The current Turner Funds will maintain their names but will be listed under the
TIP Funds heading in most major publications. This will give you the opportunity
to round out your investment and asset allocation needs while staying within the
TIP (Turner) family of funds.
We look forward to an exciting future together as we expand our TIP Funds family
and continue to provide our shareholders with a full spectrum of growth equity
funds while maintaining competitive expense ratios supported by helpful customer
service. We will be providing you with more detailed information about our
upcoming plans as we progress. In the meantime, please do not hesitate to call
us with questions regarding these changes at 1-800-224-6312.
Sincerely,
/S/ SIGNATURE
Stephen J. Kneeley
Vice President & Assistant Secretary
TIP Funds
<PAGE>
STATEMENT OF NET ASSETS TIP FUNDS
March 31, 1997 (Unaudited)
Market
Value
GROWTH EQUITY FUND Shares (000)
- -------------------------------------------------------
COMMON STOCKS (100.7%)
AIRCRAFT (1.5%)
Allied Signal 8,980 $ 640
Boeing 6,650 656
-------
1,296
-------
AUTOMOTIVE (0.8%)
Harley-Davidson 20,000 678
-------
BANKS (0.9%)
NationsBank 14,000 775
-------
BEAUTY PRODUCTS (3.3%)
Avon Products 11,480 603
Colgate-Palmolive 6,880 685
Procter & Gamble 13,050 1,501
-------
2,789
-------
CHEMICALS (2.5%)
Avery Dennison 10,900 420
E.I. duPont de Nemours 10,190 1,080
Monsanto 16,950 648
-------
2,148
-------
COMMUNICATIONS EQUIPMENT (4.3%)
Andrew* 17,750 641
Ascend Communications* 14,670 598
DSC Communications* 43,010 901
Qualcomm* 8,450 476
Tellabs* 16,780 606
Ultratech Stepper* 17,910 396
-------
3,618
-------
COMPUTERS & SERVICES (0.7%)
Quantum* 16,280 629
-------
DRUGS (10.2%)
Amgen* 18,110 1,012
Bristol-Myers Squibb 23,510 1,387
Eli Lilly 18,240 1,500
Merck 22,200 1,870
Pfizer 15,245 1,282
Sigma Aldrich 24,540 758
Warner Lambert 9,890 856
-------
8,665
-------
Market
Value
Shares (000)
- -------------------------------------------------------
ELECTRICAL SERVICES (0.8%)
AES* 12,000 $ 672
-------
ENTERTAINMENT (1.3%)
Walt Disney 14,510 1,059
-------
ENVIRONMENTAL SERVICES (2.6%)
Republic Industries* 19,810 687
United Waste Systems* 11,140 415
U.S. Filter* 14,940 461
USA Waste Services* 17,900 635
-------
2,198
-------
FINANCIAL SERVICES (1.3%)
Associates First Capital 14,580 627
Household International 5,550 477
-------
1,104
-------
FOOD, BEVERAGE & TOBACCO (7.2%)
Anheuser Busch 21,180 892
Campbell Soup 23,000 1,067
Coca-Cola 40,700 2,274
Conagra 15,880 862
RJR Nabisco 12,000 387
Starbucks* 21,290 631
-------
6,113
-------
GAS/NATURAL GAS (1.0%)
Williams 18,525 824
-------
HOTELS & LODGING (1.0%)
HFS* 14,480 853
-------
HOUSEHOLD PRODUCTS (1.6%)
General Electric 13,970 1,387
-------
INSURANCE (3.0%)
Aetna 7,860 675
American International Group 7,100 833
Nationwide Financial Services* 17,620 454
SunAmerica 15,330 577
-------
2,539
-------
MACHINERY (1.0%)
Applied Materials* 18,230 845
-------
MEASURING DEVICES (0.5%)
KLA Instruments* 11,640 425
-------
<PAGE>
STATEMENT OF NET ASSETS TIP FUNDS
March 31, 1997 (Unaudited)
Market
GROWTH EQUITY FUND Value
(Continued) Shares (000)
- -------------------------------------------------------
MEDICAL PRODUCTS & SERVICES (5.8%)
Becton, Dickinson 15,430 $ 694
Depuy* 25,470 557
Healthsouth Rehabilitation* 57,380 1,097
Medtronic 18,710 1,165
Phycor* 35,680 972
Renal Treatment Centers* 20,570 463
-------
4,948
-------
MISCELLANEOUS BUSINESS SERVICES (13.3%)
Adobe Systems 23,810 955
Altera* 18,740 806
BMC Software* 17,920 827
CUC International* 36,640 824
Electronics for Imaging* 18,190 725
First Data 18,820 638
HBO & Company 25,730 1,222
Microsoft* 23,260 2,133
Remedy* 11,700 448
Sun Microsystems* 60,440 1,745
Teradyne* 17,650 510
Viasoft* 14,660 476
-------
11,309
-------
MISCELLANEOUS CONSUMER SERVICES (1.7%)
Accustaff* 33,490 561
Service International 28,400 845
-------
1,406
-------
PAPER & PAPER PRODUCTS (0.7%)
Kimberly-Clark 6,370 633
-------
PETROLEUM & FUEL PRODUCTS (2.0%)
Flores & Rucks* 15,830 641
Seagull Energy* 30,000 540
United Meridian* 16,340 492
-------
1,673
-------
PETROLEUM REFINING (0.5%)
Abacan Resource* 59,000 465
-------
PROFESSIONAL SERVICES (0.9%)
Paychex 18,250 751
-------
Market
Value
Shares (000)
- -------------------------------------------------------
RETAIL (10.8%)
Borders Group* 28,440 $ 537
Boston Market* 19,630 599
Estee Lauder 13,500 653
General Nutrition* 32,090 650
Home Depot 16,070 860
PepsiCo 46,510 1,517
PetSmart* 20,090 407
Sears Roebuck 21,140 1,062
U.S. Office Products* 17,470 432
Wal-Mart Stores 39,150 1,091
Walgreen 23,440 982
Williams Sonoma* 13,880 399
-------
9,189
-------
RUBBER & PLASTIC (1.0%)
Nike, Cl B 13,060 810
-------
SEMI-CONDUCTORS/INSTRUMENTS (10.2%)
Advanced Micro Devices* 16,810 698
Analog Devices* 50,580 1,138
Intel 12,745 1,773
LSI Logic* 34,830 1,210
Micron Technology 46,250 1,873
National Semiconductor* 42,380 1,165
Texas Instruments 10,650 797
-------
8,654
-------
TELEPHONES & TELECOMMUNICATION (1.4%)
AT&T 17,740 616
WorldCom* 24,000 528
-------
1,144
-------
WHOLESALE (6.9%)
Gillette 14,700 1,068
Johnson & Johnson 24,650 1,303
Motorola 15,770 952
Philip Morris 15,810 1,804
Safeway* 14,810 687
-------
5,814
-------
TOTAL COMMON STOCKS
(Cost $77,289) 85,413
-------
<PAGE>
STATEMENT OF NET ASSETS TIP FUNDS
March 31, 1997 (Unaudited)
Face Market
GROWTH EQUITY FUND Amount Value
(Concluded) (000) (000)
- -------------------------------------------------------
REPURCHASE AGREEMENT (0.2%)
Lehman Brothers
5.58%, dated 03/31/97, matures
04/01/97, repurchase price
$130,006 (collateralized by
U.S. Treasury Bond, par
value 137,894, 6.75%,
matures 08/15/25:
market value $133,586) $130 $ 130
-------
TOTAL REPURCHASE AGREEMENT
(Cost $130) 130
-------
TOTAL INVESTMENTS (100.9%)
(Cost $77,419) 85,543
-------
OTHER ASSETS AND LIABILITIES, NET (-0.9%) (740)
-------
NET ASSETS:
Portfolio Shares (unlimited authorization
-- no par value) based on 6,826,856
outstanding shares of beneficial
interest 71,217
Net investment loss (41)
Accumulated net realized gain
on investments 5,503
Net unrealized appreciation
on investments 8,124
-------
TOTAL NET ASSETS (100.0%) $84,803
=======
Net Asset Value, Offering and Redemption
Price Per Share $ 12.42
=======
* NON-INCOME PRODUCING SECURITY
CL-CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
STATEMENT OF NET ASSETS TIP FUNDS
March 31, 1997 (Unaudited)
Market
Value
SMALL CAP FUND Shares (000)
- -------------------------------------------------------
COMMON STOCKS (96.7%)
AIR TRANSPORTATION (1.0%)
Midwest Express* 16,312 $ 618
-------
APPAREL/TEXTILES (1.6%)
Nautica Enterprises* 19,186 482
Tommy Hilfiger* 11,235 587
-------
1,069
-------
BANKS (5.3%)
Astoria Financial 20,470 737
Bank United Corporation, Cl A 25,000 737
Glendale Federal* 35,400 814
TCF Financial 11,980 475
Washington Federal 30,228 688
-------
3,451
-------
BEAUTY PRODUCTS (0.8%)
Alberto-Culver, Cl B 18,810 491
-------
BROADCASTING, NEWSPAPERS &
ADVERTISING (1.5%)
Evergreen Media, Cl A* 18,030 526
Snyder Communications* 18,800 442
-------
968
-------
CHEMICALS (0.4%)
H.B. Fuller 5,040 246
-------
COMMUNICATIONS EQUIPMENT (1.0%)
Ultratech Stepper* 28,769 637
-------
COMPUTERS & SERVICES (2.3%)
Comverse Technology* 13,210 522
Jabil Circuit* 14,100 635
Network Appliance* 9,530 310
-------
1,467
-------
DRUGS (3.4%)
Agouron Pharmaceutical* 4,800 339
Jones Medical Industries 28,150 676
Medicis Pharmaceutical, Cl A* 24,990 743
Parexel International* 18,570 427
-------
2,185
-------
Market
Value
Shares (000)
- -------------------------------------------------------
ENERGY & POWER (2.1%)
Calenergy* 25,856 $ 879
Calpine* 28,280 513
-------
1,392
-------
ENVIRONMENTAL SERVICES (0.9%)
United Waste Systems* 14,940 557
-------
FINANCIAL SERVICES (7.4%)
Amresco 42,600 714
ContiFinancial* 19,367 600
Equitable of Iowa 11,540 577
Hambrecht & Quist* 18,595 311
Imperial Credit Industries* 37,924 763
Metris* 27,820 695
Sirrom Capital 15,930 577
The Money Store 26,571 558
-------
4,795
-------
FOOD, BEVERAGE & TOBACCO (1.3%)
Hudson Foods, Cl A 31,390 490
International Multifoods 17,240 353
-------
843
-------
GAS/NATURAL GAS (0.8%)
Western Gas Resources 28,700 517
-------
HOTELS & LODGING (0.7%)
Signature Resorts* 18,370 432
-------
INSURANCE (6.6%)
CRA Managed Care* 7,920 297
Everest Reinsurance Holdings 21,750 639
Executive Risk 14,120 655
HCC Insurance Holdings 25,970 636
Penn Treaty American* 13,560 353
Protective Life 12,800 538
Total Renal Care Holdings* 21,257 646
Western National 21,220 496
-------
4,260
-------
<PAGE>
STATEMENT OF NET ASSETS TIP FUNDS
March 31, 1997 (Unaudited)
Market
SMALL CAP FUND Value
(Continued) Shares (000)
- -------------------------------------------------------
LEASING & RENTING (0.8%)
Prime Service* 25,770 $ 490
-------
MACHINERY (2.7%)
CFM Technologies* 10,840 321
Lam Research* 16,860 569
SPX 18,760 851
-------
1,741
-------
MEASURING DEVICES (0.9%)
Waters* 22,403 599
-------
MEDICAL PRODUCTS & SERVICES (2.1%)
ESC Medical Systems* 13,050 330
National Surgery Centers* 23,128 671
Universal Health Services* 9,780 322
-------
1,323
-------
METALS & MINING (0.7%)
Titanium Metals* 18,800 477
-------
MISCELLANEOUS BUSINESS SERVICES (13.7%)
Advanced Technologies
Laboratories* 16,350 484
Apac Teleservices* 15,722 409
Aspen Technology* 18,992 518
Cambridge Technology Partners* 20,400 472
Cognex* 32,190 612
Concord EFS* 32,819 615
Forte Software* 14,950 344
HNC Software* 12,926 338
Keane* 16,200 533
National Data 14,944 529
National Techteam* 22,020 341
PMT Services* 45,672 502
Remedy* 12,600 482
Sapient* 11,500 368
Sitel* 33,024 442
Sykes Enterprises* 9,295 303
Viasoft* 16,940 551
Vincam Group* 14,400 394
Wind River Systems* 25,695 607
-------
8,844
-------
MISCELLANEOUS CONSUMER SERVICES (0.7%)
Sunrise Assisted Living* 16,800 470
-------
Market
Value
Shares (000)
- -------------------------------------------------------
MISCELLANEOUS MANUFACTURING (4.4%)
Chicago Miniature Lamp* 20,920 $ 411
Kaydon 11,560 484
RMI Titanium* 27,600 569
Samsonite* 13,750 595
Southdown 13,910 476
Triumph Group* 13,310 334
-------
2,869
-------
PAPER & PAPER PRODUCTS (3.0%)
American Pad & Paper* 18,470 277
Buckeye Cellulose* 15,942 474
Fort Howard* 19,663 612
Shorewood Packaging* 29,360 547
-------
1,910
-------
PETROLEUM & FUEL PRODUCTS (6.7%)
Flores & Rucks* 17,480 708
Global Industries* 45,900 981
KN Energy 15,330 606
Pride Petroleum Service* 37,650 781
Seagull Energy* 37,560 676
United Meridian* 19,465 586
-------
4,338
-------
PETROLEUM REFINING (0.7%)
Polymer Group* 32,340 429
-------
PROFESSIONAL SERVICES (2.5%)
Accustaff* 28,967 485
Administaff* 20,260 337
Billing Information Concepts* 19,820 476
Caribiner International* 6,220 291
-------
1,589
-------
RAILROADS (0.6%)
Coach USA* 13,000 377
-------
RETAIL (3.4%)
Borders Group* 29,800 562
Einstein/Noah Bagel* 18,900 475
Fine Host* 14,200 334
Quality Food Centers* 8,551 359
Williams Sonoma* 15,560 447
-------
2,177
-------
<PAGE>
STATEMENT OF NET ASSETS TIP FUNDS
March 31, 1997 (Unaudited)
Market
SMALL CAP FUND Value
(Concluded) Shares (000)
- -------------------------------------------------------
RUBBER & PLASTIC (1.0%)
Sealed Air* 15,403 $ 633
-------
SEMI-CONDUCTORS/INSTRUMENTS (5.2%)
Alliance Semiconductor* 41,160 334
BMC Industries 20,130 569
Novellus Systems* 8,650 597
Read-Rite* 18,340 463
Sanmina* 11,000 492
Sierra Semiconductor* 21,900 353
Silicon Valley Group* 24,970 537
-------
3,345
-------
SPECIALTY MACHINERY (0.9%)
U.S. Filter* 18,565 573
-------
STEEL & STEEL WORKS (0.9%)
Steel Dynamics* 33,650 589
-------
TECHNOLOGY, GENERAL (1.2%)
Tel-Save Holdings* 54,150 785
-------
TELEPHONES & TELECOMMUNICATION (2.8%)
ACC* 20,245 450
Brooks Fiber Properties* 26,410 472
Intermedia Communications
of Florida* 30,263 503
Mcleod* 23,150 411
-------
1,836
-------
TESTING LABORATORIES (0.9%)
Quintiles Transnational* 10,618 572
-------
WHOLESALE (3.8%)
Applied Analytical Industries* 17,350 338
Inacom* 11,860 270
Kent Electronics* 19,010 437
North Face* 32,270 536
U.S. Office Products* 17,210 426
Watsco 16,840 429
-------
2,436
-------
TOTAL COMMON STOCKS
(Cost $66,524) 62,330
-------
Face Market
Amount Value
(000) (000)
- -------------------------------------------------------
REPURCHASE AGREEMENT (3.0%)
Lehman Brothers
5.58%, dated 03/31/97, matures
04/01/97, repurchase price
$1,903,884 (collateralized by
U.S. Treasury Bond, par value
$2,019,124, 6.75%, matures
08/15/25: market value
$1,956,316) $ 1,904 $ 1,904
-------
TOTAL REPURCHASE AGREEMENT
(Cost $1,904) 1,904
-------
TOTAL INVESTMENTS (99.7%)
(Cost $68,428) 64,234
-------
OTHER ASSETS AND LIABILITIES, NET (0.3%) 226
-------
NET ASSETS:
Portfolio Shares (unlimited authorization
-- no par value) based on 3,546,490
outstanding shares of beneficial
interest 71,480
Net investment loss (332)
Accumulated net realized loss
on investments (2,494)
Net unrealized depreciation
on investments (4,194)
-------
TOTAL NET ASSETS (100.0%) $64,460
=======
Net Asset Value, Offering and Redemption
Price Per Share $ 18.18
=======
* NON-INCOME PRODUCING SECURITY
CL-CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
STATEMENT OF NET ASSETS TIP FUNDS
March 31, 1997 (Unaudited)
Market
Value
MIDCAP FUND Shares (000)
- -------------------------------------------------------
COMMON STOCKS (97.6%)
AGRICULTURE (0.9%)
Pioneer Hi Bred International 245 $ 15
-------
APPAREL/TEXTILES (1.3%)
Tommy Hilfiger* 400 21
-------
AUTOMOTIVE (2.7%)
Harley-Davidson 490 17
Federal Mogul 1,090 27
-------
44
-------
BANKS (1.5%)
Washington Mutual 490 24
-------
BEAUTY PRODUCTS (1.4%)
Avon Products 420 22
-------
BROADCASTING, NEWSPAPERS
& ADVERTISING (1.1%)
Clear Channel Communications* 410 18
-------
CHEMICALS (1.1%)
Avery Dennison 475 18
-------
COMMUNICATIONS EQUIPMENT (6.0%)
Andrew* 445 16
Ascend Communications* 360 15
DSC Communications* 980 20
Qualcomm* 420 24
Tellabs* 610 22
-------
97
-------
COMPUTERS & SERVICES (1.2%)
Quantum* 480 19
-------
DRUGS (2.3%)
Agouron Pharmaceutical* 240 17
Sigma Aldrich 640 20
-------
37
-------
ELECTRICAL SERVICES (1.5%)
AES* 430 24
-------
ENVIRONMENTAL SERVICES (6.0%)
Republic Industries* 780 27
United Waste Systems* 640 24
U.S. Filter* 750 23
USA Waste Services* 660 23
-------
97
-------
Market
Value
Shares (000)
- -------------------------------------------------------
FINANCIAL SERVICES (3.1%)
Green Tree Financial 700 $ 24
Household International 310 27
-------
51
-------
HOTELS & LODGING (1.4%)
HFS* 370 22
-------
INSURANCE (3.0%)
Nationwide Financial Services* 950 24
SunAmerica 650 24
-------
48
-------
MACHINERY (1.5%)
Applied Materials* 530 25
-------
MEASURING DEVICES (1.6%)
KLA Instruments* 700 26
-------
MEDICAL PRODUCTS & SERVICES (7.4%)
Becton, Dickinson 430 19
Dentsply International 400 20
Health Management
Associates, Cl A* 860 20
Healthsouth Rehabilitation* 950 18
Phycor* 730 20
Universal Health Services* 665 22
-------
119
-------
MISCELLANEOUS BUSINESS SERVICES (14.5%)
Adobe Systems 430 17
Altera* 410 18
BMC Software* 480 22
Compuware* 270 17
CUC International* 830 19
Electronics for Imaging* 580 23
HBO & Company 370 18
McAfee Associates* 450 20
Remedy* 500 19
Teradyne* 865 25
Viasoft* 630 20
Wind River Systems* 670 16
-------
234
-------
<PAGE>
STATEMENT OF NET ASSETS TIP FUNDS
March 31, 1997 (Unaudited)
Market
MIDCAP FUND Value
(Concluded) Shares (000)
- -------------------------------------------------------
MISCELLANEOUS CONSUMER SERVICES (2.5%)
Accustaff* 975 $ 16
Service International 820 24
-------
40
-------
MISCELLANEOUS MANUFACTURING (3.4%)
RMI Titanium* 860 18
Reynolds Metals 260 16
Samsonite* 495 21
-------
55
-------
PAPER & PAPER PRODUCTS (1.2%)
Fort Howard* 620 19
-------
PETROLEUM & FUEL PRODUCTS (5.6%)
Flores & Rucks* 780 32
Global Industries* 1,390 30
Louisiana Land & Exploration 610 29
-------
91
-------
PETROLEUM REFINING (1.6%)
Abacan Resource* 3,290 26
-------
PROFESSIONAL SERVICES (1.3%)
Paychex 500 21
-------
RETAIL (12.0%)
Borders Group* 1,030 19
Boston Market* 610 19
Estee Lauder 490 24
General Nutrition* 1,030 21
Kroger* 380 19
PetSmart* 865 17
Rite Aid 450 19
Starbucks* 650 19
U.S. Office Products* 580 14
Williams Sonoma* 805 23
-------
194
-------
SEMI-CONDUCTORS/INSTRUMENTS (7.9%)
Advanced Micro Devices* 400 17
Analog Devices* 750 17
LSI Logic* 620 22
Micron Technology 650 26
National Semiconductor* 765 21
Novellus Systems* 370 25
-------
128
-------
Market
Value
Shares (000)
- -------------------------------------------------------
STEEL & STEEL WORKS (1.2%)
Steel Dynamics* 1,150 $ 20
-------
WHOLESALE (1.4%)
Amerisource Health* 525 23
-------
TOTAL COMMON STOCKS
(Cost $1,647) 1,578
-------
TOTAL INVESTMENTS (97.6%)
(Cost $1,647) 1,578
-------
OTHER ASSETS AND LIABILITIES, NET (2.4%) 39
-------
NET ASSETS:
Portfolio Shares (unlimited authorization
-- no par value) based on 165,277
outstanding shares of beneficial
interest 1,637
Net investment loss (5)
Accumulated net realized gain
on investments 54
Net unrealized depreciation
on investments (69)
-------
TOTAL NET ASSETS (100.0%) $ 1,617
=======
Net Asset Value, Offering and Redemption
Price Per Share $ 9.78
=======
* NON-INCOME PRODUCING SECURITY
CL-CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
SCHEDULE OF INVESTMENTS TIP FUNDS
March 31, 1997 (Unaudited)
Market
Value
ULTRA LARGE CAP FUND Shares (000)
- -------------------------------------------------------
COMMON STOCKS (88.8%)
AIRCRAFT (2.6%)
Allied Signal 77 $ 5
Boeing 34 3
-------
8
-------
BANKS (1.7%)
Citicorp 42 5
-------
BEAUTY PRODUCTS (3.6%)
Colgate-Palmolive 33 3
Procter & Gamble 69 8
-------
11
-------
CHEMICALS (1.3%)
Monsanto 101 4
-------
COMMUNICATIONS EQUIPMENT (2.0%)
Ascend Communications* 154 6
-------
DRUGS (13.1%)
Amgen* 116 6
Bristol-Myers Squibb 105 6
Eli Lilly 81 7
Merck 154 13
Pfizer 92 8
-------
40
-------
ENTERTAINMENT (2.0%)
Walt Disney 84 6
-------
FOOD, BEVERAGE & TOBACCO (8.6%)
Coca-Cola 233 13
Conagra 111 6
RJR Nabisco 218 7
-------
26
-------
HOTELS & LODGING (1.3%)
HFS* 66 4
-------
HOUSEHOLD PRODUCTS (2.6%)
General Electric 82 8
-------
INSURANCE (1.7%)
American International Group 40 5
-------
Market
Value
Shares (000)
- -------------------------------------------------------
MACHINERY (3.0%)
Applied Materials* 76 $ 3
Minnesota Mining & Manufacturing 72 6
-------
9
-------
MEDICAL PRODUCTS & SERVICES (2.6%)
Medtronic 132 8
-------
MISCELLANEOUS BUSINESS SERVICES (10.2%)
CUC International* 202 5
First Data 171 6
Microsoft* 153 14
Sun Microsystems* 211 6
-------
31
-------
MISCELLANEOUS CONSUMER SERVICES (1.6%)
Service International 154 5
-------
PAPER & PAPER PRODUCTS (1.3%)
Kimberly-Clark 40 4
-------
PETROLEUM REFINING (0.3%)
Unocal 36 1
-------
RETAIL (6.6%)
Home Depot 73 4
PepsiCo 286 9
Wal-Mart Stores 235 7
-------
20
-------
RUBBER & PLASTIC (1.3%)
Nike, Cl B 62 4
-------
SEMI-CONDUCTORS/INSTRUMENTS (10.2%)
Intel 116 16
Micron Technology 219 9
Texas Instruments 74 6
-------
31
-------
<PAGE>
SCHEDULE OF INVESTMENTS TIP FUNDS
March 31, 1997 (Unaudited)
Market
ULTRA LARGE CAP FUND Value
(Concluded) Shares (000)
- -------------------------------------------------------
TELEPHONES & TELECOMMUNICATION (4.3%)
AT&T 161 $ 6
Sprint 62 3
WorldCom* 181 4
-------
13
-------
WHOLESALE (6.9%)
Gillette 108 8
Johnson & Johnson 159 8
Philip Morris 42 5
-------
21
-------
TOTAL COMMON STOCKS
(Cost $288) 270
-------
TOTAL INVESTMENTS (88.8%)
(Cost $288) $ 270
=======
* NON-INCOME PRODUCING SECURITY
CL-CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
STATEMENT OF ASSETS & LIABILITIES TIP FUNDS
March 31, 1997 (Unaudited)
ULTRA
LARGE CAP
FUND
(000)
- --------------------------------------------------------------------------------
Assets:
Investment Securities (Cost $288)................................... $ 270
Capital Shares Sold................................................. 15
Other Assets ....................................................... 45
- --------------------------------------------------------------------------------
Total Assets...................................................... 330
- --------------------------------------------------------------------------------
Liabilities:
Accrued Expenses Payable ........................................... 4
Capital Shares Redeemed............................................. 2
Other Liabilities................................................... 20
- --------------------------------------------------------------------------------
Total Liabilities................................................. 26
- --------------------------------------------------------------------------------
Net Assets:
Portfolio shares (unlimited authorization--
no par value) based on 32,254 outstanding
shares of beneficial interest ..................................... 325
Accumulated net realized loss on investments ........................ (3)
Net unrealized depreciation on investments .......................... (18)
- --------------------------------------------------------------------------------
Net Assets ................................................... $ 304
================================================================================
Net Asset Value, Offering Price
and Redemption Price Per Share .................................... $9.42
================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS TIP FUNDS
(Unaudited)
GROWTH EQUITY SMALL CAP MIDCAP ULTRA LARGE
FUND FUND FUND CAP FUND
------------------------------------------------------------------------------
FOR THE SIX FOR THE SIX FOR THE FOR THE
MONTH PERIOD MONTH PERIOD PERIOD PERIOD
ENDED 3/31/97 ENDED 3/31/97 ENDED 3/31/97(1) ENDED 3/31/97(2)
(000) (000) (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends ....................................... $ 380 $ 71 $ 2 $ 1
Interest ........................................ 33 55 3 --
- ---------------------------------------------------------------------------------------------------------------------------
Total Investment Income........................ 413 126 5 1
- ---------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees ........................ 352 367 6 1
Investment Advisory Fee Waiver .................. -- (28) (31) (1)
Contributions by Advisor......................... -- -- -- (9)
Administrator Fees .............................. 55 44 37 12
Administrator Fee Waiver.......................... -- -- (37) (12)
Custodian Fees .................................. 7 15 7 1
Transfer Agent Fees ............................. 9 8 6 2
Professional Fees ............................... 20 14 5 1
Trustee Fees .................................... 5 2 1 --
Registration Fees ............................... 27 21 11 5
Pricing Fees .................................... 1 1 -- --
Printing Expense ................................ 10 8 2 --
Amortization of Deferred Organizational Costs ... 4 4 2 --
Insurance and Other Fees ........................ 2 2 1 1
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses ................................ 492 458 10 1
Directed Brokerage ............................ (38) -- -- --
- ---------------------------------------------------------------------------------------------------------------------------
Net Expenses ................................ 454 458 10 1
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Loss ....................... (41) (332) (5) --
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss)From Securities Sold .... 7,499 (2,493) 72 (3)
Net Unrealized Depreciation
of Investment Securities ...................... (8,456) (12,857) (119) (18)
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Loss
on Investments .............................. (957) (15,350) (47) (21)
- ---------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting
From Operations .............................. $ (998) $(15,682) $ (52) $(21)
===========================================================================================================================
(1) Commenced operations on October 1, 1996.
(2) Commenced operations on February 1, 1997.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS TIP FUNDS
(Unaudited)
<TABLE>
<CAPTION>
GROWTH EQUITY
FUND
------------------------
FOR THE
SIX MONTH ELEVEN MONTH
PERIOD ENDED PERIOD ENDED
3/31/97 9/30/96
(000) (000)
- ---------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C>
Net Investment Income (Loss) ........................ $ (41) $ 129
Net Realized Gain (Loss) on Securities Sold ......... 7,499 21,978
Excess Market Value Over Book Value of Securities
Distributed Upon Redemption of Shares ............. -- --
Net Unrealized Appreciation (Depreciation) of
Investment Securities ............................. (8,456) (3,868)
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations ................................. (998) 18,239
- ---------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income ............................... -- (132)
Realized Capital Gain ............................... (23,871) (5,807)
- ---------------------------------------------------------------------------------------
Total Distributions ............................... (23,871) (5,939)
- ---------------------------------------------------------------------------------------
Capital Share Transactions:
Proceeds from Shares Issued ......................... 17,069 14,623
Proceeds from Shares Issued in Lieu of
Cash Distributions ................................ 23,565 5,650
Cost of Shares Redeemed ............................. (27,126) (52,228)
- ---------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Capital Share Transactions ...................... 13,508 (31,955)
- ---------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets............ (11,361) (19,655)
- ---------------------------------------------------------------------------------------
Net Assets:
Beginning of Period ............................... 96,164 115,819
Excess Market Value Over Book Value of Securities
Received in In-Kind Subscriptions................ -- --
- ---------------------------------------------------------------------------------------
End of Period ..................................... $84,803 $ 96,164
=======================================================================================
Shares Issued and Redeemed:
Issued .............................................. 1,195 946
Issued in Lieu of Cash Distributions ................ 1,832 394
Redeemed ............................................ (1,847) (3,428)
- ---------------------------------------------------------------------------------------
Net Increase (Decrease) in Share Transactions ..... 1,180 (2,088)
- ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP MIDCAP ULTRA LARGE
FUND FUND CAP FUND
------------------------ ----------- -----------
FOR THE FOR THE FOR THE
SIX MONTH ELEVEN MONTH PERIOD PERIOD
PERIOD ENDED PERIOD ENDED ENDED ENDED
3/31/97 9/30/96 3/31/97(1) 3/31/97(2)
(000) (000) (000) (000)
- ------------------------------------------------------------------------------------------------------------------------
Investment Activities:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) ........................ $ (332) $ (245) $ (5) --
Net Realized Gain (Loss) on Securities Sold ......... (2,493) 1,936 72 $ (3)
Excess Market Value Over Book Value of Securities
Distributed Upon Redemption of Shares ............. -- 1,924 -- --
Net Unrealized Appreciation (Depreciation) of
Investment Securities ............................. (12,857) 5,659 (119) (18)
- ------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
from Operations ................................. (15,682) 9,274 (52) (21)
- ------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders:
Net Investment Income ............................... -- -- -- --
Realized Capital Gain ............................... (1,689) (925) (18) --
- ------------------------------------------------------------------------------------------------------------------------
Total Distributions ............................... (1,689) (925) (18) --
- ------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Proceeds from Shares Issued ......................... 46,678 66,572 2,665 450
Proceeds from Shares Issued in Lieu of
Cash Distributions ................................ 1,339 904 17 --
Cost of Shares Redeemed ............................. (33,611) (21,472) (1,045) (125)
- ------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Capital Share Transactions ...................... 14,406 46,004 1,637 325
- ------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets............ (2,965) 54,353 1,567 304
- ------------------------------------------------------------------------------------------------------------------------
Net Assets:
Beginning of Period ............................... 67,425 13,072 -- --
Excess Market Value Over Book Value of Securities
Received in In-Kind Subscriptions................ -- -- 50(3) --
- ------------------------------------------------------------------------------------------------------------------------
End of Period ..................................... $64,460 $67,425 $1,617 $304
========================================================================================================================
Shares Issued and Redeemed:
Issued .............................................. 2,126 3,120 263 45
Issued in Lieu of Cash Distributions ................ 62 55 2 --
Redeemed ............................................ (1,556) (1,073) (100) (13)
- ------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Share Transactions ..... 632 2,102 165 32
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Turner Midcap Fund commenced operations on October 1, 1996.
(2) The Turner Ultra Large Cap Fund commenced operations on February 1, 1997.
(3) During 1997, the Fund received securities in-kind with unrealized
appreciation approximating $50,000.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS TIP FUNDS
For a Share Outstanding Throughout each Period (Unaudited)
<TABLE>
<CAPTION>
Realized Dis-
and trib- Ratio of Net
Net Unrealized bu- Investment Ratio of Net
Asset Gains tions Dis- Net Net Ratio Income Ratio of Investment
Value Net or from tribu- Asset Assets of (Loss) Expenses Income (Loss)
Begin- Invest-(Losses) Net tions Value End Expenses to to Average to Average Port- Average
ning ment on Invest- from End of to Average Net Assets Net Assets folio Com-
of Income Invest- ments Capital of Total Period Average Net (Excluding (Excluding Turnover mission
Period (Loss) ments Income Gains Period Return(5) (000) Assets Assets Waivers) Waivers) Rate Rate(6)
------ ----- ----- ------- ----- ------ --------- ----- ------- ------- ------- ----------- ------- -------
- ------------------
GROWTH EQUITY FUND
- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $17.03 (0.01) (0.01) -- (4.59) $12.42 (1.02)% $ 84,803 1.05%+* (0.17)%+* 1.05%+* (0.17)%+* 71.49% $0.0600
1996 $14.97 0.02 2.91 (0.02) (0.85) $17.03 20.61% $ 96,164 1.06%+* 0.03%+* 1.06%+* 0.03%+* 147.79% $0.0600
1995 $12.46 0.10 2.52 (0.11) -- $14.97 21.15% $115,819 1.03% 0.69% 1.03% 0.69% 177.86% n/a
1994 $13.12 0.10 (0.66) (0.10) -- $12.46 (4.28)% $112,959 0.95% 0.86% 1.08% 0.73% 164.81% n/a
1993 $10.40 0.09 2.72 (0.09) -- $13.12 27.08% $ 53,327 1.00% 0.80% 1.52% 0.28% 88.35% n/a
1992(1) $10.00 0.03 0.40 (0.03) -- $10.40 6.95% $ 7,781 1.44%* 0.73%* 2.55%* (0.38)%* 205.00% n/a
- --------------
SMALL CAP FUND
- --------------
1997 $23.13 (0.10) (4.34) -- (0.51) $18.18 (19.53)% $ 64,460 1.25%* (0.91)%* 1.32%* (0.98)%* 65.76% $0.0600
1996 $16.08 (0.08) 8.17 -- (1.04) $23.13 52.90% $ 67,425 1.25%* (0.88)%* 1.54%* (1.17)%* 149.00% $0.0600
1995 $10.90 (0.06) 5.24 -- -- $16.08 47.52% $ 13,072 1.25% (0.68)% 2.39% (1.82)% 183.49% n/a
1994(2) $10.00 (0.02) 0.92 -- -- $10.90 12.35% $ 4,806 1.09%* (0.27)%* 4.32%* (3.50)%* 173.92% n/a
- -----------
MIDCAP FUND
- -----------
1997(3) $10.00 (0.03) (0.08) -- (0.11) $9.78 (1.12)% $ 1,617 1.25%* (0.61)%* 9.57%* (8.93)%* 207.76% $0.0600
- --------------------
ULTRA LARGE CAP FUND
- --------------------
1997(4) $10.00 0.01 (0.59) -- -- $9.42 (5.80)% $ 304 1.00%* 0.82%* 39.85%* (38.03)%* 101.53% $0.0600
<FN>
* Annualized
(1) The Turner Growth Equity Fund commenced operations on March 11, 1992.
(2) The Turner Small Cap Fund commenced operations on February 7, 1994.
(3) The Turner Midcap Fund commenced operations on October 1, 1996.
(4) The Turner Ultra Large Cap Fund commenced operations on February 1, 1997.
(5) Returns are for the period indicated and have not been annualized.
(6) Average commission rate paid per share for security purchases and sales during the period. Presentation of the rate
is only required for fiscal years beginning after September 1, 1995.
+ The Ratios of Expenses to Average Net Assets and Net Investment Income to Average Net Assets do not reflect the
Advisor's use of arrangements whereby certain broker-dealers have agreed to pay certain expenses of the Turner Growth Equity
Fund in return for the direction of a percentage of the Fund's brokerage transactions. As a result of these
arrangements, the Ratio of Expenses to Average Net Assets was 0.94% for the eleven month period ended 9/30/96 and
0.97% for the six month period ended 3/31/97, and the Ratios of Net Investment Income (Loss) to Average Net Assets
were 0.15% and (0.09)% for the same periods described.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS TIP FUNDS
March 31, 1997 (Unaudited)
1. ORGANIZATION:
TIP FUNDS (the "Trust") a Massachusetts' business trust, is registered under the
Investment Company Act of 1940, as amended, as a diversified open-end management
investment company with five funds: the Turner Small Cap Fund ( the "Small Cap
Fund"), the Turner Growth Equity Fund (the "Growth Equity Fund"), the Turner
Midcap Fund (the "Midcap Fund"), the Turner Ultra Large Cap Fund (the "Ultra
Large Cap Fund") and the Turner Fixed Income Fund (the "Fixed Income Fund").
These statements relate only to the Small Cap, Growth Equity, Midcap, and Ultra
Large Cap Funds (the "Funds"). The assets of each fund are segregated, and a
shareholder's interest is limited to the fund in which shares are held. The
Funds' prospectus provides a description of each Fund's investment objectives,
policies and strategies.
On April 19, 1996, the shareholders of the Advisors' Inner Circle Turner Small
Cap Fund and the Advisors' Inner Circle Growth Equity Fund (the Advisors' Inner
Circle Trust) and together "the Turner Funds" voted to approve a tax-free
reorganization of the Turner Funds through a transfer of all the assets and
liabilities of the Turner Funds to the Turner Small Cap and Turner Growth Equity
Funds' portfolios. In connection with the reorganization, the Funds have changed
their fiscal year end from October 31, 1996 to September 30, 1996.
On February 21, 1997 the Board of Trustees of Turner Funds voted to change the
name of the Trust to TIP Funds.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies followed by
the Funds.
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 on each business day; other 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 recently 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 each 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).
Dividend income is recognized on the ex-dividend date, and 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.
NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is
calculated on each business day, by dividing the total value of the Fund's
assets, less liabilities, by the number of shares outstanding.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED) TIP FUNDS
March 31, 1997 (Unaudited)
of the repurchase agreements ensure that the market value of the
collateral, including accrued interest thereon, is sufficient in the event
of default of the counterparty. If the counterparty defaults and the value
of the collateral declines or if the counterparty enters an insolvency
proceeding, realization of the collateral by the Funds may be delayed or
limited.
OTHER -- Expenses that are directly related to one of the Funds are charged
to that Fund. Other operating expenses of the Trust are prorated to the
Funds on the basis of relative daily net assets.
Distributions from net investment income are declared and paid to
Shareholders on a quarterly basis. Any net realized capital gains on
sales of securities are distributed to Shareholders at least annually.
Dividends from net investment income and distributions from net realized
capital gains are determined in accordance with U.S. Federal income tax
regulations, which may differ from those amounts determined under generally
accepted accounting principals. These book/tax differences are either
temporary or permanent in nature. To the extent these differences are
permanent, they are charged or credited to paid-in-capital or accumulated
net realized gain, as appropriate, in the period that the differences
arise.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of income and expenses
during the reported period. Actual results could differ from those
estimates.
3. TRANSACTIONS WITH AFFILIATES:
Certain officers of the Trust are also officers of SEI Fund Resources (the
"Administrator") and/or SEI Financial Services Company (the "Distributor"). Such
officers are paid no fees by the Trust for serving as officers and trustees of
the Trust.
4. ADMINISTRATION, SHAREHOLDER SERVICING AND DISTRIBUTION AGREEMENTS:
The TIP Trust and the Administrator are parties to an agreement under which the
Administrator provides management and administrative services for an annual fee
of .12% of the average daily net assets of each of the Funds up to $75 million,
.10% on the next $75 million, .09% on the next $150 million, .08% on the next
$300 million and .075% of such assets in excess on $600 million. During fiscal
1997, the Administrator has voluntarily waived a portion of its fee.
The Growth Equity Fund had directed certain portfolio trades to brokers who paid
a portion of its expenses. For the six month period ended March 31, 1997, the
Growth Equity Fund's expenses were reduced by $37,549 under this arrangement.
DST Systems, Inc., (the "Transfer Agent") serves as the transfer agent and
dividend disbursing agent for the Funds under a transfer agency agreement with
the Trust.
The Trust and the Distributor are parties to a Distribution Agreement dated
April 30, 1996. The Distributor receives no fees for its distribution services
under this agreement.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONCLUDED) TIP FUNDS
March 31, 1997 (Unaudited)
5. INVESTMENT ADVISORY AND CUSTODIAN AGREEMENTS:
The Trust and Turner Investment Partners, Inc. (the "Adviser") are parties to an
Investment Advisory Agreement dated April 30, 1996, under which the Adviser
receives an annual fee equal to .75% of the average daily net assets of the
Ultra Large Cap, Growth Equity and Midcap Funds, 1.00% of those of the Small Cap
Fund and .50% of those of the Fixed Income Fund. The Adviser has voluntarily
agreed to waive all or a portion of its fees and to reimburse expenses of the
Ultra Large Cap, Growth Equity, Midcap, Small Cap and Fixed Income Funds in
order to limit their total operating expenses (as a percentage of average daily
net assets on an annualized basis) to not more than 1.00%, 1.00%, 1.25%, 1.25%
and 0.75%, respectively. 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 Funds. Fees of
the Custodian are being paid on the basis of the net assets of the Funds. The
Custodian plays no role in determining the investment policies of the Funds or
which securities are to be purchased or sold in the Funds.
6. INVESTMENT TRANSACTIONS:
The cost of security purchases and the proceeds from security sales, other than
short-term investments, for the six month period ended March 31, 1997 are as
follows:
ULTRA
GROWTH SMALL LARGE
EQUITY CAP MIDCAP CAP
FUND FUND FUND FUND
(000) (000) (000) (000)
- ------------------------------------------------------
Purchases
Government -- -- -- --
Other $66,030 $57,850 $ 4,183 $ 519
Sales
Government -- -- -- --
Other $75,934 $46,413 $ 3,048 $ 228
At March 31, 1997, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the Funds
at March 31, 1997, are as follows:
ULTRA
GROWTH SMALL LARGE
EQUITY CAP MIDCAP CAP
FUND FUND FUND FUND
(000) (000) (000) (000)
- ------------------------------------------------------
Aggregate gross
unrealized
appreciation $11,773 $ 4,077 $ 55 $ 3
Aggregate gross
unrealized
depreciation (3,649) (8,271) (124) (21)
- ------------------------------------------------------
Net unrealized
appreciation
(depreciation) $ 8,124 $(4,194) $(69) $(18)
======================================================
7. IN-KIND TRANSFER OF SECURITIES
During the period ended March 31, 1997, the Turner Midcap Fund issued shares of
beneficial interest in exchange for portfolio securities at their current value
from certain accounts managed by Turner Investment Partners, Inc.:
VALUE OF
SHARES SECURITIES UNREALIZED
ISSUED RECEIVED APPRECIATION
------ ---------- ------------
Midcap Fund 48,958 $489,579 $49,743
The historical tax basis of the securities exchanged for shares of beneficial
interest of the portfolio was recorded in the books of the Midcap Fund and
included the unrealized appreciation shown above.
<PAGE>
NOTES
<PAGE>
- --------------------------------------------------------------------------------
Trust:
TIP Funds
P.O. Box 419805
Kansas City, MO 64141-6805
Investment Advisor:
Turner Investment Partners, Inc.
Distributor:
SEI Financial Services Company
Administrator:
SEI Fund Resources
Legal Counsel:
Morgan, Lewis & Bockius LLP
Independent Public Accountants:
Ernst & Young LLP
[TURNER LOGO]
To open an account,
receive account information,
make inquiries or request
literature:
1-800-224-6312
TUR-F-018-04
SEMI-
ANNUAL
REPORT
MARCH 31, 1997
[TIP LOGO]
--------------------------
TURNER GROWTH EQUITY FUND
--------------------------
TURNER SMALL CAP FUND
--------------------------
TURNER MIDCAP FUND
--------------------------
TURNER ULTRA LARGE CAP FUND
--------------------------
This information must be preceded or
accompanied by a current prospectus for
each Fund described.