SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE
BALANCED FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
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PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of the Biltmore
Balanced Fund for the six-month period ended May 31, 1995. As always, the report
begins with a brief commentary on the stock and bond markets from the Fund's
portfolio manager. Following the commentary are a complete listing of the Fund's
portfolio of investments and its financial statements.
On your behalf, the Biltmore Balanced Fund pursues a popular investment
objective--long-term growth and current income--by investing in a quality
combination of stocks and bonds. The Fund invests in a portfolio of blue-chip
stocks issued by some of America's largest, best-known companies, as well as
high-quality corporate bonds and government bonds.
The Fund rewarded shareholders with strong performance during the period.
Dividends totaled $0.18 per share for the six-month reporting period, while
capital gains totaled $0.16 per share for total distributions of $0.34 per
share. I am also pleased to report that the Fund's net asset value increased
from $9.93 on the first day of the period to $10.92 on May 31, 1995, the last
day of the period, which helped it deliver total return figures based on net
asset value and maximum offering price of 13.75% and 8.61%, respectively.* Total
assets stood at $193 million on the last day of the reporting period.
Thank you for selecting the Biltmore Balanced Fund to pursue your financial
goals through a diversified portfolio of stocks and bonds. We look forward to
keeping you informed about your investment, and we welcome your comments and
suggestions.
Sincerely,
John W. McGonigle
President
July 14, 1995
*Performance quoted represents past performance. 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.
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BILTMORE BALANCED FUND
Evidence of the long-awaited slowdown in the U.S. economy continued to
accumulate during the past six months, suggesting that the Federal Reserve
Board's soft landing remained on track. Despite a steady increase in personal
income, consumer outlays were restrained by rising debt levels and higher
interest rates. Capacity utilization rates remained high, at levels frequently
associated with pricing pressures. Yet, the producer price index, a key
inflation indicator, rose modestly during the period.
The Fund's portfolio allocation of 52.9% in equities, 38.2% in bonds and 8.4% in
cash remained fairly consistent throughout the six-month period. Among equity
holdings, the Fund continued to concentrate on those sectors benefiting from the
dramatic expansion of emerging markets and new economies around the world.
During the six-month period between November 30, 1994 and May 31, 1995, the Fund
had total return figures of 13.75% based on net asset value and 8.61% based on
the maximum offering price.*
The bond component of the Fund reduced overweighted positions in long- and
short-term bonds as the yield curve steepened. As a result, the Fund's maturity
distribution was more closely aligned with the market at the end of the period.
The Fund's bond portfolio manager also took advantage of the strong fixed income
market rally to shorten duration.
On May 31, 1995, the Fund had net assets of $193.2 million, and a net asset
value of $10.92 per share. The Fund's 30-day SEC yield was 3.62% based on net
asset value and 3.46% based on the maximum offering price.* The average duration
for the fixed income portion of the Fund was 4.7 years.
*Performance quoted represents past performance. 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.
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BILTMORE BALANCED FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--52.9%
CAPITAL GOODS--4.7%
4,806 Browning Ferris Industries, Inc. $ 171,214
40,475 General Electric Co. 2,347,550
42,025 Giddings & Lewis, Inc. 730,184
46,131 Harsco Corp. 2,346,915
33,935 Honeywell, Inc. 1,344,674
22,854 Keystone International, Inc. 494,218
39,739 York International Corp. 1,649,169
--------------
Total 9,083,924
--------------
CONSUMER DURABLES--1.4%
7,162 Chrysler Corp. 312,442
5,946 Echlin Corp. 214,056
44,979 Ford Motor Co. 1,315,636
9,025 Stanley Works 361,000
9,677 Tecumseh Products, Co. 451,190
--------------
Total 2,654,324
--------------
CONSUMER NON-DURABLES--14.7%
33,998 Abbott Laboratories 1,359,920
20,020 American Greetings Corp. 565,565
18,642 American Home Products Co. 1,372,517
12,582 American Stores Co. 328,705
5,645 Avon Products, Inc. 380,332
8,087 Becton, Dickinson & Co. 465,003
11,551 Bergen Brunswig Corp, Class A 265,673
37,975 Bristol-Myers Squibb Co. 2,520,591
11,119 CPC International, Inc. 675,479
10,399 Dow Jones & Co., Inc. 379,564
19,215 Donnelley (R.R.) & Sons Co. 701,348
37,855 Fingerhut Companies, Inc. 520,506
65,388 Fruit of the Loom, Inc. Class A 1,740,956
19,891 Hasbro, Inc 701,158
22,932 IBP Inc. 859,950
6,038 Kimberly Clark, Corp 362,280
9,150 Lee Enterprises, Inc. 346,556
8,443 Loews Corp. 1,003,662
6,536 Melville Corp. 259,806
</TABLE>
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BILTMORE BALANCED FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
CONSUMER NON-DURABLES--CONTINUED
40,449 Merck & Co., Inc. $ 1,906,159
45,291 PepsiCo, Inc. 2,219,259
37,302 Philip Morris Cos., Inc. 2,718,383
6,531 Russell Corp. 189,399
27,342 Sara Lee Corp. 762,158
45,525 Sbarro, Inc. 1,047,075
8,545 Scotts, Co. 185,854
23,689 Service Corp., International 678,098
2,284 Supervalu, Inc. 64,809
29,212 Times Mirror New, Co. 679,179
12,477 Times Mirror New, Co. Pfd 290,090
64,145 *Toys R Us, Inc. 1,619,661
8,000 Unilever N.V. 1,018,000
9,630 Universal Corp. 223,898
--------------
Total 28,411,593
--------------
ENERGY--6.4%
13,986 Amoco Corp. 956,293
6,802 Chevron Corp. 334,148
36,981 Coastal Corp. 1,160,279
25,999 Exxon Corp. 1,855,679
2,565 Halliburton Co. 100,035
41,290 MAPCO, Inc. 2,430,949
5,282 Mobil Corp. 530,181
41,965 Phillips Petroleum Co. 1,521,231
17,342 Royal Dutch Petroleum Co. 2,198,099
19,122 Schlumberger, Ltd. 1,242,930
--------------
Total 12,329,824
--------------
FINANCE--8.2%
18,377 AMBAC, Inc. 735,080
16,681 American International Group, Inc. 1,897,464
9,390 Chubb, Corp 773,501
10,119 Citicorp 541,367
8,598 EXEL, Ltd. 401,957
20,531 Federal Home Loan Mortgage Corp. 1,398,674
24,306 Federal National Mortgage Association 2,260,458
8,708 First Tennessee National Corp. 382,064
</TABLE>
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BILTMORE BALANCED FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
FINANCE--CONTINUED
14,106 Huntington Bancshares, Inc. $ 276,830
28,499 KeyCorp. 872,782
2,699 Legg Mason, Inc. 72,873
19,438 MBIA, Inc. 1,227,024
7,985 Morgan Stanley Group, Inc. 607,858
35,454 Providian Corp. 1,289,630
4,988 Raymond James Financial 91,655
7,163 Salomon, Inc. 293,683
40,200 SPDR Trust 2,156,353
11,013 Travelers, Inc. 465,299
3,069 United Asset Management Corp. 112,786
--------------
Total 15,857,338
--------------
MATERIALS & SERVICES--5.9%
9,119 Crane Co. 312,326
4,566 Dow Chemical Co. 335,030
35,058 Ecolab, Inc. 889,597
27,470 *FMC Corp. 1,768,381
6,189 Georgia-Pacific Corp. 481,195
8,337 International Paper Co. 655,497
9,651 NCH Corp. 574,235
31,599 Potash Corp. Saskatchewan Inc. 1,512,802
55,593 Praxair, Inc. 1,382,876
26,586 Sigma-Aldrich 1,169,784
46,102 Sonoco Products Co. 1,141,023
22,768 Tyco International, Ltd. 1,232,318
--------------
Total 11,455,064
--------------
TECHNOLOGY--7.2%
28,543 AT&T Corp. 1,448,557
800 Augat, Inc. 16,400
29,011 Avnet, Inc. 1,320,001
5,940 *Bay Networks, Inc. 216,810
16,363 Boeing Co. 963,372
18,647 *Cisco Systems Inc. 815,806
26,676 *Computer Sciences Corp. 1,413,828
5,451 *Conner Peripherals, Inc. 70,182
10,381 General Motors Corp. Class E 441,193
</TABLE>
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BILTMORE BALANCED FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
TECHNOLOGY--CONTINUED
25,900 Hewlett-Packard Co. $ 1,712,638
2,418 Intel Corp. 271,421
84,389 MCI Communications Corp. 1,708,877
7,443 *Microsoft Corp. 630,329
5,677 Molex, Inc., Class A 198,695
8,737 Motorola, Inc. 523,128
4,001 Northern Telecom, Ltd. 153,538
7,763 *Thermo Electron Corp. 279,468
13,671 Xerox Corp. 1,549,950
3,672 *Zebra Technologies Corp., Class A 165,240
--------------
Total 13,899,433
--------------
TRANSPORTATION--1.2%
15,668 CSX, Corp 1,194,685
22,104 Conrail, Inc. 1,193,616
--------------
Total 2,388,301
--------------
UTILITIES--3.2%
11,044 ALLTEL Corp. 271,959
4,849 Bellsouth Corp. 297,607
28,294 Carolina Power & Light Co. 845,283
38,395 GTE Corp. 1,281,433
3,462 NICOR, lnc. 92,176
12,014 NYNEX Corp. 501,585
9,101 Pacific Gas & Electric Co. 263,929
48,962 P P & L Resources Inc. 942,519
9,159 SBC Communications 412,155
21,145 Scana Corp. 470,476
24,035 Telefonos De Mexico, ADR 675,984
2,396 U S West Inc. 98,835
--------------
Total 6,153,941
--------------
Total Common Stocks (identifed cost, $88,345,292) 102,233,742
--------------
</TABLE>
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BILTMORE BALANCED FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Corporate Bonds--9.3%
ASSET BACKED SECURITIES--1.9%
$ 1,060,000 Carco Auto Loan Master Trust, 7.875%, 7/15/1999 $ 1,094,779
535,000 Ford Credit Auto Lease Trust, 6.35%, (Series 1995-1), 10/15/1998 535,332
1,304,011 Prudential Home Mortgage Securities, 6.75%, 12/25/2023 1,301,560
779,928 USAA Auto Loan Grantors Trust, 3.90%, (Series 1993-1), 3/15/1999 767,004
--------------
Total 3,698,675
--------------
FINANCE--4.1%
790,000 American Express Credit Corp, 6.75%, 6/1/2001 795,317
775,000 Fleet Financial Group Inc., 7.125%, 5/1/2000 795,026
1,065,000 Ford Motor Credit Co., 8.00%, 12/1/1997 1,104,022
775,000 General Electric Capital Corp., 8.00% 2/1/1997 795,057
935,000 Keycorp, 7.82%, 4/1/1997 956,524
2,000,000 Nationwide Life Insurance Co., 6.50%, 2/15/2004 1,916,320
1,500,000 Norwest Corporation, 7.75%, 12/31/1996 1,533,000
--------------
Total 7,895,266
--------------
INDUSTRIAL--0.4%
775,000 Wal-Mart Stores, Inc., 6.125%, 10/1/1999 767,924
--------------
UTILITIES--0.8%
1,620,000 MCI Communications Corp., 7.75%, 3/23/2025 1,601,629
--------------
YANKEE--2.1%
1,750,000 Banque Parabas N.Y., 6.875%, 3/1/2009 1,649,708
1,000,000 International American Development Bank, 8.50%, 5/1/2001 1,100,430
1,500,000 Italy Rep, 6.875%, 9/27/2023 1,339,755
--------------
Total 4,089,893
--------------
Total Corporate Bonds (identified cost, $18,304,011) 18,053,387
--------------
Mortgage Backed Securities--6.1%
FEDERAL NATIONAL MORTGAGE ASSOCIATION--2.1 %
76,034 8.50%, 8/1/2016 79,080
76,633 8.50%, 6/1/2024 79,220
898,166 8.50%, 7/1/2024 928,479
48,898 8.50%, 10/1/2024 50,549
936,377 8.50%, 12/1/2024 967,980
463,611 8.00%, 6/1/2022 473,314
341,074 8.00%, 1/1/2023 348,212
257,567 7.50%, 4/1/2007 262,396
</TABLE>
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BILTMORE BALANCED FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Mortgage Backed Securities--continued
FEDERAL NATIONAL MORTGAGE ASSOCIATION--CONTINUED
$ 878,128 9/25/2018 REMIC, PO $ 810,495
--------------
Total 3,999,725
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--2.3%
451,181 7.50%, 3/15/2023 454,001
910,359 7.00%, 5/15/2023 895,848
477,951 7.00%, 8/15/2023 470,333
2,678,501 6.50%, 4/15/2024 2,570,503
--------------
Total 4,390,685
--------------
FEDERAL AGENCIES--1.7%
2,000,000 Federal Home Loan Bank, 4.587%, 8/27/1998 1,912,440
1,400,000 Federal Home Loan Mortgage Corporation, 7.125%, 7/21/1999 1,445,724
--------------
Total 3,358,164
--------------
Total Mortgage Backed Securities (identified cost, $11,798,037) 11,748,574
--------------
U.S. Treasury Obligations--22.8%
U.S. TREASURY NOTES--18.0%
3,690,000 7.875%, 4/15/1998 3,875,090
3,925,000 7.75%, 2/15/2001 4,234,722
785,000 7.50%, 10/31/1999 828,049
2,025,000 7.50%, 11/30/1999 2,157,577
2,055,000 7.50%, 5/15/2002 2,205,919
2,070,000 7.25%, 8/15/2004 2,200,658
580,000 6.50%, 4/30/1997 586,618
3,850,000 6.50%, 4/30/1999 3,911,369
2,480,000 6.375%, 8/15/2002 2,501,700
1,600,000 6.25%, 1/31/1997 1,609,744
1,890,000 5.375%, 5/31/1998 1,859,590
9,060,000 4.375%, 11/15/1996 8,874,540
--------------
Total 34,845,576
--------------
U.S. TREASURY BONDS--4.8%
1,255,000 10.75%, 8/15/2005 1,659,938
6,635,000 8.125%, 8/15/2019 7,665,482
--------------
Total 9,325,420
--------------
Total U.S. Treasury Obligations (identified cost, $42,535,229) 44,170,996
--------------
</TABLE>
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BILTMORE BALANCED FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
*Repurchase Agreement--8.4%
$ 16,211,645 Daiwa Securities America, Inc., 6.125%, dated 5/31/1995,
due 6/1/1995 (at amortized cost) $ 16,211,645
--------------
Total lnvestments (identified cost, $177,194,214) $ 192,418,344+
--------------
</TABLE>
* Non-income producing security.
** The repurchase agreement is fully collateralized by U.S. Government and /or
agency obligations based on market prices at the date of the portfolio.
The cost for federal tax purposes amounts to $177,194,214. The net unrealized
appreciation of investments on a federal tax basis amounts to $15,224,130,
which is comprised of $18,695,883 appreciation and $3,471,753 depreciation at
May 31, 1995.
The following abbreviations are used throughout this portfolio:
ADR--American Depositary Receipt
PO--Principal Only
REMIC--Real Estate Mortgage Investment Conduit
Note: The categories of investments are shown as a percentage of net assets
($193,287,518) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
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BILTMORE BALANCED FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in securities (identified and tax cost $177,194,214) $ 192,418,344
Income receivable 1,168,251
Receivable for investments sold 808,477
Receivable for shares sold 518,642
Deferred expenses 34,581
--------------
Total assets 194,948,295
Liabilities:
Payable for investments purchased $ 1,137,189
Payable for shares redeemed 399,483
Payable to Adviser 96,538
Accrued expenses 27,567
------------
Total liabilities 1,660,777
--------------
Net Assets for 17,695,193 shares outstanding $ 193,287,518
--------------
Net Assets Consists of:
Paid in capital $ 176,366,930
Net unrealized appreciation of investments 15,224,130
Accumulated net realized gain on investments 488,399
Undistributed net investment income 1,208,059
--------------
Total Net Assets $ 193,287,518
--------------
Net Asset Value and Redemption Proceeds Per Share:
($193,287,518 / 17,695,193 shares outstanding) $10.92
--------------
Offering Price Per Share: (100/95.50 of $10.92)* $11.43
--------------
</TABLE>
* See 'What Shares Cost' in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
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BILTMORE BALANCED FUND STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 3,049,900
Dividends 1,361,678
-------------
Total income 4,411,578
Expenses:
Investment advisory fee $ 700,419
Administrative personnel and services fee 90,702
Custodian fees 20,012
Transfer agent and dividend disbursing agent fees and expenses 17,779
Trustees' fees 6,939
Auditing fees 6,898
Legal fees 6,827
Portfolio accounting fees 31,255
Share registration costs 12,172
Printing and postage 8,824
Insurance premiums 2,829
Miscellaneous 6,757
----------
Total expenses 911,413
Deduct--Waiver of investment advisory fee 150,090
----------
Net expenses 761,323
-------------
Net investment income 3,650,255
-------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments 810,412
Net change in unrealized appreciation of investments 21,461,813
-------------
Net realized and unrealized gain on investments 22,272,225
-------------
Change in net assets resulting from operations $ 25,922,480
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
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BILTMORE BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
May 31, 1995 November 30,
(unaudited) 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 3,650,255 $ 6,435,680
Net realized gain on investments ($810,412 and $3,060,817,
respectively, as computed for federal tax purposes) 810,412 2,764,758
Net change in unrealized appreciation (depreciation) of investments 21,461,813 (10,061,721)
--------------- --------------
Change in net assets resulting from operations 25,922,480 (861,283)
--------------- --------------
Distributions to Shareholders--
Distributions from net investment income (3,522,340) (6,032,536)
Distributions from net realized gains (3,058,366) (669,917)
--------------- --------------
Change in net assets resulting from distributions to shareholders (6,580,706) (6,702,453)
--------------- --------------
Share Transactions--
Proceeds from sale of shares 32,134,147 62,911,836
Net asset value of shares issued to shareholders in payment of
distributions declared 6,445,487 6,649,214
Cost of shares redeemed (59,064,249) (33,837,708)
--------------- --------------
Change in net assets resulting from share transactions (20,484,615) 35,723,342
--------------- --------------
Change in net assets (1,142,841) 28,159,606
Net Assets:
Beginning of period 194,430,359 166,270,753
--------------- --------------
End of period (including undistributed net investment income of
$1,208,059 and $1,080,144, respectively) $ 193,287,518 $ 194,430,359
--------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
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BILTMORE BALANCED FUND FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months Ended Year Ended November
May 31, 1995 30,
(unaudited) 1994 1993(a)
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.93 $ 10.33 $ 10.00
Income from investment operations
Net investment income 0.19 0.35 0.19
Net realized and unrealized gain (loss) on investments 1.14 (0.38) 0.29
------- --------- -----------
Total from investment operations 1.33 (0.03) 0.48
------- --------- -----------
Less distributions
Distributions from net investment income (0.18) (0.33) (0.15)
Distributions from net realized gains (0.16) (0.04) --
------- --------- -----------
Total distributions (0.34) (0.37) (0.15)
------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 10.92 $ 9.93 $ 10.33
------- --------- -----------
Total Return(b) 13.75% (0.39%) 4.89%
Ratios to Average Net Assets
Expenses 0.76%(c) 0.75% 0.75%(c)
Net investment income 3.65%(c) 3.46% 3.30%(c)
Expense waiver/reimbursement(d) 0.15%(c) 0.17% 0.19%(c)
Supplemental Data
Net assets, end of period (000 omitted) $193,288 $194,430 $166,271
Portfolio turnover 41 % 74% 60 %
</TABLE>
(a) Reflects operations for the period from May 10, 1993 (date of initial
public investment) to
November 30, 1993.
(b) Based on net asset value, which does not reflect sales load or contingent
deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
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--------------------------------------------------------------------------------
BILTMORE BALANCED FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
1. ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein present only those of Biltmore Balanced Fund (the "Fund"). The
financial statements of the other 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.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on national securities exchanges. Listed corporate bonds,
unlisted securities, and short-term securities are generally valued at the
price provided by an independent pricing service. Short-term securities
with remaining maturities of sixty days or less at the time of purchase may
be valued at amortized cost, which approximates fair market value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require a 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 Fund 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's 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 Fund could receive less
than the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
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").
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
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BILTMORE BALANCED FUND
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>
Six Months
Ended Year Ended
May 31, 1995 November 30, 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Shares sold 3,139,134 6,165,635
Shares issued to shareholders in payment of distributions declared 652,125 653,174
Shares redeemed (5,672,203) (3,337,297)
--------------- --------------------
Net change resulting from share transactions (1,880,944) 3,481,512
--------------- --------------------
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Fund's
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to .70 of 1% of the Fund's average daily
net assets.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust and The Biltmore Municipal
Funds for the period. FAS may voluntarily choose to waive a portion of its fee.
SHAREHOLDER SERVICE FEE--Under the terms of a Shareholder Services Agreement
with FAS, the Fund will pay FAS up to 0.25 of 1% of average net assets of the
Fund for the period. This fee is to obtain certain services for shareholders and
to maintain the shareholder accounts. For the period ended May 31, 1995, the
Fund did not incur a shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES, PORTFOLIO ACCOUNTING
AND CUSTODIAN FEES--Federated Services Company ("FServ") serves as transfer and
dividend disbursing agent for the Fund. The fee is based on the size, type, and
number of accounts and transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A. is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average net assets
for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses ($31,904) were initially borne
by FAS. The Fund has agreed to reimburse FAS for such organizational expenses
during the five year period following April 3, 1993 (the date the Fund became
effective). For the period ended May 31, 1995, the Fund paid $3,190 pursuant to
this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
5. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the six
months ended May 31, 1995, were as follows:
<TABLE>
<S> <C>
Purchases $ 74,008,821
--------------
Sales $ 100,207,237
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other governmental
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 Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297821
3061809 (7/95)
SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE
EQUITY FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of the Biltmore
Equity Fund for the six-month period ended May 31, 1995. As always, the report
begins with a brief commentary on the stock market from the Fund's portfolio
manager. Following the commentary are a complete listing of the Fund's portfolio
of investments and its financial statements.
On your behalf, the Biltmore Equity Fund invests in a portfolio of blue-chip
stocks issued by some of America's largest, best-known companies. At the end of
the period, the Fund's portfolio included such names as Caterpillar, Chrysler,
Ford, Avon, Coca-Cola, Fruit of the Loom, Nike, Sears, Exxon, American Express,
Bristol-Myers Squibb, Merck, American Telephone & Telegraph and Xerox.
The Fund rewarded shareholders with very strong performance during the six-month
period. Dividends totaled $0.12 per share for the six-month reporting period,
while capital gains totaled $0.23 per share for total distributions of $0.35 per
share. I am also pleased to report that the Fund's net asset value increased
significantly from $10.32 on the first day of the period to $11.58 on May 31,
1995, the last day of the period, which helped it deliver total return figures
based on net asset value and maximum offering price of 16.03% and 10.77%,
respectively.* Total assets stood at $112.6 million on the last day of the
reporting period.
Thank you for selecting the Biltmore Equity Fund to pursue long-term performance
from stocks. We look forward to keeping you informed about your investment, and
we welcome your comments and suggestions.
Sincerely,
John W. McGonigle
President
July 14, 1995
*Performance quoted represents past performance. 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND
Evidence of the long-awaited slowdown in the U.S. economy continued to
accumulate during the past six months, suggesting that the Federal Reserve
Board's (the "Fed") soft landing remained on track. Despite a steady increase in
personal income, consumer outlays were restrained by rising debt levels and
higher interest rates. Capacity utilization rates remained high, at levels
frequently associated with pricing pressures. Yet, the producer price index, a
key inflation indicator, rose modestly during the period.
Several equities hit all-time highs during the period, sparked by excellent
corporate earnings, an encouraging inflation forecast and a powerful fixed
income rally. The Dow Jones Industrial Average eclipsed the 4,000-point barrier
and the Standard & Poor's Composite Index of 500 Stocks reached the 500-point
level amid declining economic growth that convinced many market participants the
Fed would not raise interest rates in the near future. The Biltmore Equity Fund
continued to concentrate on those sectors benefiting from the dramatic expansion
of emerging markets and new economies around the world. During the six-month
period between November 30, 1994 and May 31, 1995, the Fund had total return
figures of 16.03% based on net asset value and 10.77% based on the maximum
offering price.*
At May 31, 1995, the Fund had net assets of $112.6 million and a net asset value
of $11.58 per share, and the Fund's 30-day SEC yield was 1.95% based on net
asset value and 1.86% based on the maximum offering price.*
*Performance quoted represents past performance. 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--83.5%
CAPITAL GOODS--7.2%
9,300 Ametek, Inc. $ 160,425
1,000 Caterpillar, Inc. 60,250
11,500 Dover Corp. 754,688
44 *Gardner Denver Machinery, Inc. 660
21,935 General Electric Co. 1,272,230
9,300 Giddings & Lewis Inc. 161,588
38,335 Harsco Corp. 1,950,293
31,070 Honeywell, Inc. 1,231,149
31,245 Keystone International, Inc. 675,673
4,100 Lawson Products, Inc. 111,725
41,665 York International 1,729,098
--------------
Total 8,107,779
--------------
CONSUMER DURABLES--2.6%
12,500 Chrysler Corp. 545,313
24,490 Ford Motor Co. 716,333
5,000 LADD Furniture, Inc. 68,438
16,755 Stanley Works 670,200
19,165 Tecumseh Prods. Co. 893,568
--------------
Total 2,893,852
--------------
CONSUMER NON-DURABLES--23.9%
22,105 Abbott Laboratories 884,200
8,700 American Brands, Inc. 351,263
1,000 American Greetings Corp. 28,250
12,830 American Home Products Co. 944,609
12,000 American Stores Co. New 313,500
11,000 Avon Products, Inc. 741,125
3,100 Becton, Dickinson & Co. 178,250
11,655 Bergen Brunswig Corp. Class A 268,065
18,840 Bristol-Myers Squibb Co. 1,250,505
11,830 Coca-Cola Co. 731,981
7,620 CPC International, Inc. 462,915
13,000 Dun & Bradstreet Corp. 689,000
5,700 Fingerhut Cos., Inc. 78,375
77,960 Fruit of the Loom, Inc. Class A 2,075,685
43,760 Hasbro, Inc. 1,542,540
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
CONSUMER NON-DURABLES--CONTINUED
800 IBP Inc. $ 30,000
32,000 *International Dairy Queen, Inc. Class A 616,000
1,800 Kimberly-Clark Corp 108,000
37,095 Lee Enterprises, Inc. 1,404,973
4,400 Lilly (Eli) & Co. 328,350
13,000 Limited Inc. 289,250
19,925 Loews Corp. 2,368,584
27,700 Melville Corp. 1,101,075
20,572 Merck & Co., Inc. 969,456
3,665 Nike Inc. Class B 289,077
17,645 PepsiCo, Inc. 864,605
3,250 Pfizer, Inc. 286,406
18,780 Philip Morris Cos., Inc. 1,368,593
27,330 Sara Lee Corp. 761,824
48,900 Sbarro, Inc. 1,124,700
2,500 Sears, Roebuck & Co. 140,938
7,100 Service Corp., International 203,238
23,700 *Scotts Co. 515,475
6,000 Stanhome, Inc. 189,750
29,020 Times Mirror Co New 674,715
32,000 Times Mirror Co New-Publishing 744,000
43,125 *Toys R Us, Inc. 1,088,906
2,200 Unifi Inc. 53,625
6,935 Unilever N. V. 882,479
--------------
Total 26,944,282
--------------
ENERGY--11.8%
21,270 Amoco Corp. 1,454,336
5,000 Atlantic Richfield Co. 580,625
21,100 Baker Hughes, Inc. 474,750
26,500 Camco Intl. Inc. 586,313
27,485 Coastal Corp. 862,342
13,300 Dresser Industries, Inc. 304,238
17,395 Exxon Corp. 1,241,568
25,050 Halliburton Co. 976,950
30,880 MAPCO, Inc. 1,818,060
18,935 Phillips Petroleum Co. 686,394
18,400 Royal Dutch Petroleum Co. 2,332,200
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
ENERGY--CONTINUED
29,640 Schlumberger, Ltd. $ 1,926,600
--------------
Total 13,244,376
--------------
FINANCE--11.7%
1,000 Alex Brown, Inc. 39,750
30,675 Ambac, Inc 1,227,000
20,900 American Express Co. 744,563
10,105 American International Group, Inc. 1,149,444
3,090 Chubb Corp 254,539
4,500 Citicorp 240,750
24,325 Federal Home Loan Mortgage Corp. 1,657,141
20,990 Federal National Mortgage Association 1,952,070
37,875 Keycorp 1,159,922
3,220 Lehman Brothers Holdings, Inc. 63,595
15,450 MBIA, Inc. 975,281
4,800 Morgan (J.P.) & Co., Inc. 340,200
10,905 Morgan Stanley Group, Inc. 830,143
20,695 Providian Corp. 752,781
16,700 Salomon, Inc. 684,700
6,600 SunTrust Banks, Inc. 382,800
2,800 United Asset Management Corp. 102,900
7,600 Unitrin, Inc. 372,400
1,300 Wells Fargo & Co. 239,200
--------------
Total 13,169,179
--------------
MATERIALS & SERVICES--9.0%
13,480 Aluminum Co. of America 626,820
4,000 Crane Co. 137,000
900 Donnelley R R & Sons Co. 32,850
5,450 Dow Chemical Co. 399,894
23,445 Ecolab Inc 594,917
7,000 Equifax, Inc. 219,625
43,185 *FMC Corp. 2,780,034
5,840 Georgia Pacific Corp. 454,060
40,660 Hanson PLC 772,540
2,100 International Paper Co. 165,113
21,860 NCH Corp. 1,300,670
25,800 Potash Corp. Saskatchewan, Inc. 1,235,175
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
MATERIALS & SERVICES--CONTINUED
17,480 Praxair, Inc. $ 434,815
3,300 Sigma Aldrich 145,200
28,571 Sonoco Products Co. 707,120
2,400 Tyco International Ltd. 129,900
--------------
Total 10,135,733
--------------
TECHNOLOGY--10.2%
12,760 American Telephone & Telegraph, Inc. 647,570
11,265 Augat, Inc 230,933
21,360 Avnet, Inc. 971,880
18,200 Boeing Co. 1,071,525
4,895 *Cisco Systems, Inc. 214,156
6,140 *Computer Sciences Corp. 325,420
8,500 *Cray Research Inc. 194,438
27,100 *Digital Equipment Corp. 1,209,338
11,160 Hewlett-Packard Co. 737,955
3,000 International Business Machines, Inc. 279,750
38,065 MCI Communications Corp. 770,816
4,440 *Microsoft Corp. 376,013
6,715 Motorola Inc. 402,061
10,280 Northern Telecom Ltd. 394,495
8,800 *Novell, Inc. 169,950
12,000 Raytheon Co. 930,000
3,600 Sunstrand Corp. 199,800
19,446 *Thermo Electron Corp. 700,038
13,445 Xerox Corp. 1,524,327
3,000 *Zebra Technologies Corp. 135,000
--------------
Total 11,485,465
--------------
TRANSPORTATION--1.1%
2,400 CSX Corp 183,000
17,005 Conrail, Inc. 918,270
1,500 Delta Air Lines, Inc. 97,688
--------------
Total 1,198,958
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
UTILITIES--6.0%
20,465 BellSouth Corp. $ 1,256,037
4,300 Carolina Power & Light Co. 128,461
41,300 GTE Corp. 1,378,387
20,160 NYNEX Corp. 841,680
15,100 Pacific Gas & Electric Co. 437,900
6,800 Pacific Telesis Group 181,900
22,015 Pennsylvania Power & Light Co. 423,788
28,030 Scana Corp. 623,667
5,900 SCE Corp. 102,511
20,500 Southern Co. 453,561
10,410 Telefonos de Mexico, ADR 292,780
17,025 U.S. West, Inc. 702,280
--------------
Total 6,822,952
--------------
Total Common Stocks (identified cost, $81,653,105) 94,002,576
--------------
U.S. Treasury Obligations--6.4%
U.S. TREASURY BILLS
$ 7,250,000 6/15/1995 (identified cost, $7,233,948) 7,233,978
--------------
**Repurchase Agreement--11.3%
12,743,980 Daiwa Securities America, Inc., 6.125%, dated 5/31/1995,
due 6/1/1995 (at amortized cost) 12,743,980
--------------
Total Investments (identified cost, $101,631,033) $ 113,980,534+
--------------
</TABLE>
* Non-income producing security.
** The repurchase agreement is fully collateralized by U.S. Treasury obligations
based on market prices at the date of the portfolio.
+The cost of investments for federal tax purposes amounts to $101,631,033. The
net unrealized appreciation of investments on a federal tax basis amounts to
$12,349,501, which is comprised of $13,927,461 appreciation and $1,577,960
depreciation at May 31, 1995.
The following abbreviation is used in this portfolio:
ADR--American Depositary Receipt
Note: The categories of investments are shown as a percentage of net assets
($112,605,917) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investment in repurchase agreement $ 12,743,980
Investments in securities 101,236,554
--------------
Total investments in securities, at value (identified and tax cost, $101,631,033) $ 113,980,534
Income receivable 312,109
Receivable for investments sold 112,762
Receivable for shares sold 399,899
Deferred expenses 13,234
Receivable for daily variation margin 142,825
--------------
Total assets 114,961,363
Liabilities:
Payable for investments purchased 1,968,485
Payable for shares redeemed 306,084
Accrued expenses 80,877
--------------
Total liabilities 2,355,446
--------------
Net Assets for 9,725,290 shares outstanding $ 112,605,917
--------------
Net Assets Consist of:
Paid in capital $ 98,834,842
Net unrealized appreciation of investments (including unrealized appreciation of futures
contracts of $463,900) 12,813,401
Accumulated net realized gain on investments and futures contracts 574,021
Undistributed net investment income 383,653
--------------
Total Net Assets $ 112,605,917
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
($112,605,917 / 9,725,290 shares outstanding) $11.58
--------------
Offering Price Per Share: (100/95.50 of $11.58)* $12.13
--------------
</TABLE>
* See 'What Shares Cost' in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 386,035
Dividends 1,114,145
-------------
Total income 1,500,180
Expenses:
Investment advisory fee $ 333,135
Administrative personnel and services fee 43,118
Custodian fees 9,518
Transfer agent and dividend disbursing agent fees and expenses l9,574
Trustees' fees 2,749
Auditing fees 7,573
Legal fees 1,729
Portfolio accounting fees 27,739
Share registration costs 14,682
Printing and postage 7,849
Insurance premiums 2,158
Miscellaneous 6,083
----------
Total expenses 475,907
Deduct--Waiver of investment advisory fee 47,591
----------
Net expenses 428,316
-------------
Net investment income 1,071,864
-------------
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts:
Net realized gain on investments and futures contracts 759,268
Net change in unrealized appreciation of investments and futures contracts 12,625,793
-------------
Net realized and unrealized gain on investments and futures contracts 13,385,061
-------------
Change in net assets resulting from operations $ 14,456,925
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
May 31, 1995 Year Ended
(unaudited) November 30, 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 1,071,864 $ 1,446,277
Net realized gain on investments and futures contracts ($759,268
and $1,927,035, respectively, as computed for federal tax
purposes) 759,268 1,790,525
Net change in unrealized appreciation (depreciation) of
investments and futures contracts 12,625,793 (922,981)
--------------- --------------------
Change in net assets resulting from operations 14,456,925 2,313,821
--------------- --------------------
Distributions to Shareholders--
Distributions from net investment income (1,002,376) (1,351,595)
Distributions from net realized gains (l,933,454) (473,495)
--------------- --------------------
Change in net assets resulting from distributions
to shareholders (2,935,830) (1,825,090)
--------------- --------------------
Share Transactions--
Proceeds from sale of shares 25,251,941 45,572,500
Net asset value of shares issued to shareholders in payment of
distributions declared 2,675,969 1,766,826
Cost of shares redeemed (13,864,861) (22,803,523)
--------------- --------------------
Change in net assets resulting from share transactions 14,063,049 24,535,803
--------------- --------------------
Change in net assets 25,584,144 25,024,534
Net Assets:
Beginning of period 87,021,773 61,997,239
--------------- --------------------
End of period (including undistributed net investment income of
$383,653 and $314,165, respectively) $ 112,605,917 $ 87,021,773
--------------- --------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
May 31, 1995 November 30,
(unaudited) 1994 1993(a)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.32 $ 10.28 $ 10.00
Income from investment operations
Net investment income 0.12 0.20 0.12
Net realized and unrealized gain (loss) on investments
and futures contracts 1.49 0.12 0.25
------- --------- -----------
Total from investment operations 1.61 0.32 0.37
------- --------- -----------
Less distributions
Distributions from net investment income (0.12) (0.20) (0.09)
Distributions from net realized gain on investment
transactions (0.23) (0.08) --
------- --------- -----------
Total distributions (0.35) (0.28) (0.09)
------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 11.58 $ 10.32 $ 10.28
------- --------- -----------
Total return (b) 16.03% 3.10% 3.68%
Ratios to average net assets
Expenses 0.90%(c) 0.87% 0.81%(c)
Net investment income 2.25%(c) 1.98% 2.18%(c)
Expense waiver/reimbursement (d) 0.10%(c) 0.16% 0.32%(c)
Supplemental data
Net assets, end of period (000 omitted) $112,606 $87,022 $61,997
Portfolio turnover 17% 35% 50%
</TABLE>
(a) Reflects operations for the period from May 10, 1993 (date of initial
public investment) to November 30, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
(1) ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein present only those of Biltmore Equity Fund (the "Fund"). The
financial statements of the other 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.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Listed equity securities and futures contracts are
valued at the last sale price reported on national securities exchanges.
Unlisted securities and short-term securities are generally valued at the
price provided by an independent pricing service. Short-term securities
with remaining maturities of sixty days or less at the time of purchase may
be valued at amortized cost, which approximates fair market value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require a 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 Fund 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's 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 Fund could receive less
than the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
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").
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-LSSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND
FUTURES CONTRACTS--Upon entering into a financial futures contract with a
broker, the Fund is required to deposit in a segregated account, an amount
of cash or U.S. Government securities equal to a percentage of the contract
value. The Fund agrees to receive from or to pay to the broker an amount of
cash equal to a specific dollar amount times the difference between the
closing value and the price at which the contract was made. On a daily
basis, the value of the financial futures contract is determined and any
difference between such value and the original futures contract value is
reflected in the "daily variation margin" account. Daily variation margin
adjustments, arising from this "marking to market" process, are recorded by
the Fund as unrealized gains or losses.
The Fund may decide to close its position on a contract at any time prior
to the contract's expiration. When a contract is closed, the Fund
recognizes a realized gain or loss. Risks of entering into futures
contracts include the possibility that a change in the value of the
contract may not correlate with changes in the value of the underlying
securities. For the period ended May 31, 1995, the Fund had a realized gain
of $61,888 on futures contracts.
<TABLE>
<CAPTION>
Unrealized
Expiration Contracts to Appreciation
Date Deliver/Receive Position (Depreciation)
-------------------------------------------------------
<S> <C> <C> <C>
June 1995 29 Long $463,900
</TABLE>
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>
Six Months
Ended Year Ended
May 31, 1995 November 30, 1994
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 2,347,629 4,415,092
Shares issued to shareholders in payment of distributions
declared 262,444 170,048
Shares redeemed (1,315,455) (2,185,478)
---------------- --------------------
Net change resulting from share transactions 1,294,618 2,399,662
---------------- --------------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Fund's
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to .70 of 1% of the Fund's average daily
net assets.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust and The Biltmore Municipal
Funds for the period. FAS may voluntarily choose to waive a portion of its fee.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with FAS, the Fund will pay FAS up to .25 of 1% of average net assets of the
Fund for the period. This fee is to obtain certain services for shareholders and
to maintain shareholder accounts. For the six months ended May 31, 1995, the
Fund did not incur a shareholder services fee.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY FUND
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES, PORTFOLIO ACCOUNTING
AND CUSTODIAN FEES--Federated Services Company ("FServ") serves as transfer and
dividend disbursing agent for the Fund. This fee is based on the size, type, and
number of accounts and transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A. is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average net assets
for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses ($34,484) were initially borne
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following April 3, 1993 (the date the Fund became
effective). For the six months ended May 31, 1995, the Fund paid $3,313,
pursuant to this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the six
months ended May 31, 1995, were as follows:
<TABLE>
<S> <C>
Purchases $ 28,500,201
-------------
Sales $ 14,778,920
-------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other governmental
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 Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297839
3061811 (7/95)
SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE
EQUITY INDEX FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of the Biltmore
Equity Index Fund for the six-month period ended May 31, 1995. As always, the
report begins with a brief commentary on the stock market from the Fund's
portfolio manager. Following the commentary are a complete listing of the Fund's
portfolio of investments and its financial statements.
On your behalf, the Biltmore Equity Index Fund pursues a total return that
approximates that of the Standard & Poor's Composite Index of 500 Stocks ("S&P
500")--a classic benchmark of stock market performance. The Fund invests in a
portfolio of blue-chip stocks issued by some of America's largest, best-known
companies. At the end of the period, the Fund's portfolio included such names as
Caterpillar, Chrysler, Ford, Goodyear, American Brands, Avon, Bristol-Myers
Squibb, Gap, Heinz, K-Mart, Nike, Wal-Mart, and many, many more.
The Fund rewarded shareholders with extremely strong performance during the
six-month period. Dividends totaled $0.13 per share for the six-month reporting
period, while capital gains totaled $0.03 per share for total distributions of
$0.16 per share. I am also pleased to report that the Fund's net asset value
increased significantly from $10.27 on the first day of the period to $12.01 on
May 31, 1995, the last day of the period, which helped it deliver total return
figures based on net asset value and maximum offering price of 18.79% and
13.49%, respectively.* Total assets stood at $190.9 million on the last day of
the reporting period.
Thank you for selecting the Biltmore Equity Index Fund to pursue long-term
performance from an extremely diversified portfolio of stocks. We welcome your
comments and suggestions.
Sincerely,
John W. McGonigle
President
July 14, 1995
*Performance quoted represents past performance. 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
Evidence of the long-awaited slowdown in the U.S. economy continued to
accumulate during the past six months, suggesting that the Federal Reserve
Board's soft landing remained on track. Despite a steady increase in personal
income, consumer outlays were restrained by rising debt levels and higher
interest rates. Capacity utilization rates remained high, at levels frequently
associated with pricing pressures. Yet, the producer price index, a key
inflation indicator, rose modestly during the period.
Several equities hit all-time highs during the period, sparked by excellent
corporate earnings, an encouraging inflation forecast and a powerful fixed
income rally. During the six-month period between November 30, 1994 and May 31,
1995, the Fund had total return figures of 18.79% based on the net asset value
and 13.49% based on the maximum offering price.*
During the six-month period, the Fund's portfolio manager used index futures
contracts to more closely track the performance of the S&P 500, while
simultaneously managing the cash position required to handle cashflow into and
out of the Fund. On May 31, 1995, the Fund had net assets of $190.9 million and
a net asset value of $12.01 per share. The Fund's 30-day SEC yield was 2.10%
based on net aset value and 2.01% based on the maximum offering price.*
*Performance quoted represents past performance. 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.
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--91.8%
CAPITAL GOODS--4.7%
3,750 *Applied Materials Inc. $ 288,750
1,293 Briggs & Stratton Corp. 45,902
8,786 Browning-Ferris Industries, Inc. 313,001
9,056 Caterpillar, Inc. 545,624
1,508 Cincinnati Milacron Inc. 40,716
778 *Clark Equipment Co. 66,908
5,157 Cooper Industries, Inc. 190,809
1,859 Cummins Engine Co., Inc. 84,585
3,861 Deere & Co. 333,977
2,558 Dover Corp. 167,869
3,410 Eaton Corp. 208,436
10,011 Emerson Electric Co. 688,256
1,599 Foster Wheeler Corp. 52,567
76,407 General Electric Co. 4,431,606
1,533 Giddings & Lewis, Inc. 26,636
2,268 Grainger (W.W.) Inc. 135,797
2,054 Harnischfeger Industries, Inc. 71,377
5,771 Honeywell, Inc. 228,676
5,086 Illinois Tool Works Inc. 253,029
4,715 Ingersoll-Rand Co. 175,634
1,737 PACCAR Inc. 83,593
2,189 Parker-Hannifin Corp. 125,047
1,939 Raychem Corp. 70,531
1,965 *Varity Corp. 84,741
15,898 Westinghouse Electric Corp. 230,521
552 Zurn Industries, Inc. 11,109
--------------
Total 8,955,697
--------------
CONSUMER DURABLES--2.8%
1,677 Armstrong World Industries, Inc. 86,575
634 Bassett Furniture Industries, Inc. 17,118
3,776 Black & Decker Corp. 124,608
15,842 Chrysler Corp. 691,107
3,738 Cooper Tire & Rubber Co. 90,647
4,414 Dana Corp. 124,696
5,050 Dillard Department Stores, Inc. 145,188
2,641 Echlin, Inc. 95,076
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
CONSUMER DURABLES--CONTINUED
45,616 Ford Motor Co. $ 1,334,268
33,678 General Motors Corp. 1,616,544
5,511 Genuine Parts Co. 216,307
6,764 Goodyear Tire and Rubber Co. 285,779
4,796 Maytag Corp. 77,935
889 Outboard Marine Corp. 17,891
2,741 Pep Boys-Manny, Moe & Jack 76,405
1,232 Pulte Corp. 33,726
568 SPX Corp. 7,455
2,002 Stanley Works (The) 80,080
1,387 Timken Co. 58,427
1,287 TRINOVA Corp. 43,758
3,331 Whirlpool Corp. 190,283
1,977 *Zenith Electronics Corp. 15,322
--------------
Total 5,429,195
--------------
CONSUMER NON-DURABLES--30.1%
35,813 Abbott Laboratories, Inc. 1,432,520
1,263 Alberto-Culver Co., Class B 40,732
11,334 Albertson's, Inc. 317,352
2,840 Allergan Pharmaceuticals Inc. 75,615
88 *Allergan Ligand Retinoid rights 77
8,527 American Brands, Inc. 344,278
3,323 American Greetings Corp., Class A 93,875
13,669 American Home Products Co. 1,006,380
6,381 American Stores Co. 166,704
11,575 Anheuser-Busch Companies, Inc. 684,372
23,055 Archer-Daniels-Midland Co. 426,518
3,110 Avon Products, Inc. 209,536
2,325 Bard (C.R.), Inc. 68,588
2,643 Bausch & Lomb, Inc. 107,372
12,645 Baxter International, Inc. 440,994
3,000 Becton, Dickinson & Co. 172,500
3,825 *Beverly Enterprises, Inc. 43,509
4,661 Block (H&R), Inc. 168,379
6,659 *Boston Scientific Corp. 191,446
22,823 Bristol-Myers Squibb Co. 1,514,877
3,084 Brown-Forman Corp., Class B 102,543
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
CONSUMER NON-DURABLES--CONTINUED
802 Brown Group, Inc. $ 17,544
3,490 Brunos, Inc. 40,353
4,265 Brunswick Corp. 78,369
2,725 CBS, Inc. 182,575
6,600 CPC International Inc. 400,950
5,130 *CUC International Inc. 188,528
11,098 Campbell Soup Co. 545,189
6,884 Capital Cities/ABC, Inc. 664,306
4,594 Charming Shoppes, Inc. 20,099
4,306 Circuit City Stores, Inc. 118,415
2,391 Clorox Co. 143,161
57,461 Coca-Cola Co. 3,555,399
6,479 Colgate-Palmolive Co. 498,883
19,643 Columbia HCA/Healthcare Corp. 802,908
10,675 *Comcast Corp., Class A 186,813
1,947 *Community Psychiatric Centers 24,094
11,088 ConAgra, Inc. 370,062
1,712 Coors (Adolph) Co. 29,532
7,049 Darden Restaurants Inc. 77,539
3,200 Dayton-Hudson Corp 226,800
4,136 Dial Corp. 101,332
23,206 Disney (Walt) Co. (The) 1,290,834
6,856 Donnelley (R.R.) & Sons Co. 250,244
4,380 Dow Jones & Co., Inc. 159,870
7,588 Dun & Bradstreet Corp. 402,164
15,181 Eastman Kodak Co. 916,553
1,672 Fleming Companies, Inc. 43,263
3,400 *Fruit of the Loom Inc. 90,525
6,221 Gannett Co., Inc. 332,824
6,518 Gap, Inc. (The) 224,056
7,049 General Mills, Inc. 365,667
2,651 Giant Food Inc., Class A 76,216
9,891 *Gillette Co. 834,553
1,708 Great Atlantic & Pacific Tea Co., Inc. 42,487
1,499 Handleman Co. 17,426
1,362 Harland (John H.) Co. 32,177
3,916 Hasbro, Inc. 138,039
11,021 Heinz (H.J.) Co. 498,700
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
CONSUMER NON-DURABLES--CONTINUED
3,877 Hershey Foods Corp. $ 200,150
2,148 Hilton Hotels Corp. 143,916
20,199 Home Depot, Inc. 840,783
4,980 International Flavors & Fragrances, Inc. 245,265
3,439 Interpublic Group of Cos., Inc. 126,813
28,720 Johnson & Johnson 1,902,700
2,033 Jostens, Inc. 40,914
20,373 K-Mart Corp. 259,756
9,936 Kellogg Co. 666,954
7,157 Kimberly-Clark Corp. 429,420
1,652 *King World Productions Inc. 68,558
2,388 Knight-Ridder, Inc. 131,937
5,219 *Kroger Co. 135,694
13,059 Lilly (Eli) & Co. 974,528
16,006 Limited, Inc. (The) 356,134
3,484 Liz Claiborne, Inc. 61,841
2,700 Loews Corp. 320,963
923 Long's Drug Stores, Inc. 32,420
7,113 Lowe's Companies 193,829
1,137 Luby's Cafeterias, Inc. 23,166
2,787 Manor Care, Inc. 81,520
9,971 Mattell, Inc. 249,275
11,100 May Department Stores Co. 435,675
31,218 McDonald's Corp. 1,182,382
2,219 McGraw-Hill, Inc. 164,206
5,134 Medtronic, Inc. 386,334
4,719 Melville Corp. 187,580
1,647 Mercantile Stores Co., Inc. 77,203
56,238 Merck & Co., Inc. 2,650,216
1,226 Merideth Corp. 32,183
6,606 Morton International Inc. 209,741
8,873 *National Medical Enterprises, Inc. 147,514
4,451 New York Times Co. (The), Class A 100,704
3,275 Nike, Inc., Class B 258,316
3,671 Nordstrom, Inc. 152,347
10,432 Penney (J.C.) Co., Inc. 491,608
35,397 PepsiCo, Inc. 1,734,453
14,068 Pfizer, Inc. 1,239,743
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
CONSUMER NON-DURABLES--CONTINUED
38,051 Philip Morris Cos., Inc. $ 2,772,967
3,811 Pioneer Hi-Breed International Inc. 149,582
2,067 Polaroid Corp. 76,221
8,707 *Price/Costco Inc. 122,986
30,630 Proctor & Gamble Co. 2,201,531
5,967 Quaker Oats Co. 208,099
4,470 Ralston Purina Co. 224,618
3,623 Reebok International Ltd. 121,371
3,767 Rite-Aid Corp. 89,466
7,223 Rubbermaid Inc. 230,233
1,784 Russell Corp. 51,736
2,367 *Ryan's Family Steakhouses, Inc. 16,569
2,077 St. Jude Medical Inc. 93,984
21,504 Sara Lee Corp. 599,424
8,310 Schering-Plough Corp. 654,413
6,722 Scott Paper Co. 291,567
16,645 Seagram Co., Ltd. 499,350
17,304 Sears, Roebuck & Co. 975,513
4,196 Service Corp. International 120,111
1,840 *Shoney's Inc. 20,010
786 Spring Industries, Inc. 30,949
2,213 Stride Rite Corp. 24,896
3,195 SuperValu Stores, Inc. 90,658
8,186 Sysco Corp. 222,045
3,283 TJX Companies, Inc. (The) 43,910
28,255 *Tele-Communications, Inc., Class A 596,887
2,496 Temple-lnland Inc. 107,952
16,947 Time Warner Inc. 671,525
5,007 Times Mirror Co. 116,413
12,396 *Toys "R" Us, Inc. 312,999
2,993 Tribune Co. 178,458
8,979 UST Inc. 268,248
7,152 Unilever N.V. 910,092
7,699 United Healthcare Corp. 286,788
7,149 U.S. Healthcare, Inc. 222,066
2,537 United States Surgical Corp. 52,326
7,740 Upjohn Co. 281,543
2,893 V.F. Corp. 154,052
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
CONSUMER NON-DURABLES--CONTINUED
15,970 *Viacom Inc. $ 744,601
102,711 Wal-Mart Stores, Inc. 2,567,775
5,500 Walgreen Co. 264,688
6,012 Warner-Lambert Co. 498,245
4,538 Wendy's International, Inc. 77,713
4,714 Whitman Corp. 85,441
3,311 Winn-Dixie Stores, Inc. 189,969
5,920 Woolworth (F.W.) Corp. 91,020
5,197 Wrigley (Wm.), Jr. Co. 235,164
--------------
Total 57,379,531
--------------
ENERGY--10.2%
4,156 Amerada-Hess Corp. 210,917
22,207 Amoco Corp. 1,518,404
2,710 Ashland Oil, Inc. 100,609
7,180 Atlantic Richfield Co. 833,778
6,296 Baker Hughes, Inc. 141,660
5,667 Burlington Resources, Inc. 235,181
29,124 Chevron Corp. 1,430,717
4,681 Coastal Corp. 146,866
4,157 Consolidated Natural Gas Co. 165,760
8,214 Dresser Industries, Inc. 187,895
11,305 Enron Corp. 412,633
2,991 Enserch Corp. 51,969
10,162 Entergy Corp. 251,510
55,482 Exxon Corp. 3,960,007
3,687 Fluor Corp. 182,507
5,100 Halliburton Co. 198,900
1,104 Helmerich & Payne 32,982
2,310 Kerr-McGee Corp. 128,783
1,492 Louisiana Land & Exploration Co. 57,815
2,404 McDermott International, Inc. 63,105
17,666 Mobil Corp. 1,773,225
400 NACCO Industries, Inc., Class A 24,000
5,474 Noram Energy Corp. 36,265
13,964 Occidental Petroleum Co. 321,172
1,193 Oneok, Inc. 22,667
4,422 *Oryx Energy Co. 63,566
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
ENERGY--CONTINUED
6,664 Panhandle Eastern Corp. $ 167,433
2,060 Pennzoil Co. 101,713
11,691 Phillips Petroleum Co. 423,799
1,864 Pittston Company-Services Group 44,969
3,765 *Rowan Companies, Inc. 28,238
23,958 Royal Dutch Petroleum Co. 3,036,677
4,022 *Santa Fe Energy Resources, Inc. 39,215
10,878 Schlumberger, Ltd. 707,070
3,898 Sonat, Inc. 128,147
4,776 Sun Co., Inc. 150,444
8,428 Tenneco, Inc. 404,544
11,597 Texaco, Inc. 794,395
12,835 USX Marathon Corp. 255,096
10,877 Unocal Corp. 322,231
2,363 *Western Atlas, Inc. 106,630
4,049 Williams Companies, Inc. (The) 137,666
--------------
Total 19,401,160
--------------
FINANCE--10.5%
5,034 Aetna Life & Casualty Co. 300,152
5,233 Ahmanson (H.F.) & Co. 119,051
1,962 Alexander & Alexander Services 49,786
22,146 American Express Co. 788,951
9,190 American General Corp. 317,055
14,125 American International Group, Inc. 1,606,719
18,141 Banc One Corp. 630,400
4,790 Bank of Boston Corp. 174,835
8,420 Bank New York Inc. 343,115
16,604 BankAmerica Corp. 867,559
3,474 Bankers Trust New York Corp. 217,994
4,334 Barnett Banks, Inc. 215,075
2,342 Beneficial Corp. 104,219
5,658 Boatmen's Bancshares Inc. 184,592
3,228 CIGNA Corp. 241,293
7,919 Chase Manhattan Corp. 366,254
10,924 Chemical Banking Corp. 503,870
3,895 Chubb Corp. 320,851
17,593 Citicorp 941,226
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
FINANCE--CONTINUED
6,288 CoreStates Financial Corp. $ 209,076
7,623 Dean Witter Discover & Co. 363,045
8,057 Federal Home Loan Mortgage Corp. 548,883
12,214 Federal National Mortgage Association 1,135,902
4,105 First Chicago Corp. 235,524
3,650 First Fidelity Bancorporation 193,906
3,534 First Interstate Bancorp. 296,856
7,865 First Union Corp. 385,385
6,029 Fleet/Norstar Financial Group, Inc. 210,261
3,657 General Reinsurance Corp. 495,066
2,703 Golden West Financial Corp. 132,785
5,979 Great Western Financial Corp. 130,791
4,306 Household International, Inc. 212,609
2,165 Jefferson-Pilot Corp. 114,204
10,884 Keycorp 333,323
4,244 Lincoln National Corp. 192,041
6,637 MBNA Corp. 223,999
3,295 Marsh & McLennan Cos., Inc. 262,364
6,567 Mellon Bank Corp. 280,739
8,512 Merrill Lynch & Co., Inc. 400,064
8,442 Morgan (J.P.) & Co., Inc. 598,327
6,968 NBD Bancorp, Inc. 229,073
6,712 National City Corp. 203,877
12,359 NationsBank Corp. 699,828
13,793 Norwest Corp. 391,376
10,497 PNC Bank Corp. 283,419
4,382 Providian Corp. 159,395
2,815 SAFECO Corp. 165,381
3,761 St. Paul Companies, Inc. 191,341
4,730 Salomon, Inc. 193,930
5,377 Shawmut National Corp. 155,933
5,271 SunTrust Banks Inc. 305,718
3,197 Torchmark Corp. 127,480
3,140 Transamerica Corp. 187,615
14,320 Travelers Corp. 605,020
4,001 USF&G Corp. 69,017
4,399 U.S. Bancorp. 108,325
1,020 USLIFE Corp. 41,055
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
FINANCE--CONTINUED
7,646 Wachovia Corp. $ 289,592
2,326 Wells Fargo & Co. 427,984
--------------
Total 20,083,506
--------------
MATERIALS & SERVICES--9.3%
5,060 Air Products & Chemicals, Inc. 268,813
10,026 Alcan Aluminum Ltd. 297,020
2,439 Alco Standard Corp. 174,693
12,647 Allied-Signal, Inc. 510,623
7,986 Aluminum Co. of America 371,349
3,663 *Alza Corp. 76,465
4,689 *ARMCO Inc. 29,892
1,880 ASARCO Inc. 54,285
2,458 Avery Dennison Corp. 101,393
1,327 Ball Corp. 44,123
2,097 *Bally Entertainment Group 21,756
15,641 Barrick Gold Corp 394,935
2,289 Bemis, Inc. 65,237
4,906 *Bethlehem Steel Corporation 72,364
5,119 *Biomet Inc. 76,145
1,971 Boise Cascade Corp. 65,043
1,340 Centex Corp. 38,525
2,009 *Ceridan Corp. 64,790
4,169 Champion International Co. 193,337
10,169 Corning, Inc. 325,408
1,345 Crane Co. 46,066
3,988 *Crown Cork & Seal Co., Inc. 187,436
4,136 Cyprus Amax Minerals Co. 109,604
3,691 Deluxe Corp. 117,651
12,384 Dow Chemical Co. 908,676
25,760 du Pont (E.l.) de Nemours & Co., Inc. 1,748,460
3,696 Eastman Chemical Co. 221,760
5,027 Echo Bay Mines Ltd. 44,929
3,022 Ecolab, Inc. 76,683
4,256 Engelhard Corp. 177,156
1,630 *FMC Corp. 104,931
1,892 Federal Paper Board Co. 61,490
5,351 First Data Corp. 309,020
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
MATERIALS & SERVICES--CONTINUED
904 First Mississippi Corp. $ 20,905
2,056 Fleetwood Enterprises, Inc. 42,662
2,107 General Signal Corp. 77,959
4,043 Georgia-Pacific Corp. 314,343
1,153 Goodrich (B.F.) Co. 57,218
4,202 Grace (W.R.) & Co. 269,979
3,051 Great Lakes Chemical Corp. 186,111
3,240 Harcourt Gen, Inc. 136,485
5,250 Hercules, Inc. 275,625
6,158 Homestake Mining Co. 103,916
4,769 ITT Corp. 533,532
5,216 Inco. Ltd. 130,400
1,988 *Inland Steel Industries, Inc. 55,913
5,589 International Paper Co. 439,435
3,650 James River Corp. of Virginia 98,550
1,446 Kaufman & Broad Home Corp. 20,425
5,015 Louisana-Pacific Corp. 111,584
3,426 Mallinckrodt Group, Inc. 124,621
5,545 Marriott International, Inc. 187,837
7,144 Masco Industries, Inc. 206,283
2,659 Mead Corp. 143,254
1,104 Milipore Corp. 72,450
18,792 Minnesota Mining & Manufacturing Co. 1,125,171
5,196 Monsanto Co. 432,567
4,450 Moore Corp. Ltd. 97,344
1,478 Morrison Knudsen Corp. 8,129
3,050 Nalco Chemical Co. 115,138
2,201 National Services Industries, Inc. 63,554
7,054 Newell Co. 175,468
3,845 Newmont Mining Corp. 160,529
3,898 Nucor Corp. 186,130
1,949 Ogden Corp. 42,878
1,976 *Owens-Corning Fiberglass Corp. 71,630
9,211 PPG Industries, Inc. 383,408
5,154 Pall Corp. 113,388
3,160 Phelps Dodge Corp. 174,195
10,656 Placer Dome Inc. 269,064
1,306 Potlatch Corp. 55,995
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
MATERIALS & SERVICES--CONTINUED
6,134 Praxair, Inc. $ 152,583
2,857 Premark International, Inc. 142,493
4,576 *Promus Cos., Inc. (The) 191,620
2,773 Reynolds Metals Co. 136,917
3,026 Rohm & Haas Co. 178,156
2,581 Safety-Kleen Corp. 43,877
5,870 *Santa Fe Pacific Gold Corp. 73,375
3,825 Sherwin-Williams Co. 140,569
2,227 Sigma Aldrich 97,988
499 Skyline Corp. 9,107
1,916 Snap-On Tools Corp. 68,018
4,040 *Stone Container Corp. 70,700
2,478 *Teledyne, Inc. 60,401
24 *Teledyne, Inc. (pfd stock) 333
3,289 Tyco International Finance 178,017
3,389 USX-U.S. Steel Group 108,448
3,129 Union Camp Corp. 162,317
6,641 Union Carbide Corp. 194,249
3,240 UNUM Corp. 138,510
21,625 WMX Technologies, Inc. 589,281
2,999 Westvaco Corp. 128,207
9,189 Weyerhaeuser Co. 403,167
4,054 Worthington Industries, Inc. 84,627
--------------
Total 17,797,093
--------------
TECHNOLOGY--14.6%
70,090 AT&T Corp. 3,557,068
4,813 *Advanced Micro Devices, Inc. 158,227
22,058 *Airtouch Communications, Inc. 601,081
5,206 *Amdahl Corp. 67,678
5,940 *Amgen, Inc. 430,650
9,374 AMP, Inc. 399,567
1,705 *Andrew Corp. 83,119
5,316 Apple Computer, Inc. 220,946
2,103 Autodesk, Inc. 77,811
6,304 Automatic Data Processing, Inc. 392,424
15,230 Boeing Co. 896,666
3,250 Cabletron Systems Inc. 173,875
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
TECHNOLOGY--CONTINUED
11,999 *Cisco Systems, Inc. $ 524,956
11,548 *COMPAQ Computer Corp. 451,816
7,188 Computer Associates International, Inc. 470,814
2,273 *Computer Sciences Corp. 120,469
1,147 *Cray Research, Inc. 26,238
5,066 *DSC Communications Corp. 187,442
1,609 *Data General Corp. 12,872
6,380 *Digital Equipment Corp. 284,708
2,464 EG&G, Inc. 44,660
2,819 General Dynamics Corp. 123,331
1,762 Harris Corp. 93,606
22,724 Hewlett-Packard Co. 1,502,625
18,520 Intel Corp. 2,078,870
1,995 *Intergraph Corp. 26,933
26,241 International Business Machines Corp. 2,446,973
1,817 Johnson Controls Inc. 104,023
10,224 Lockheed Martin Corp. 608,328
3,758 Loral Corp. 179,914
2,134 *Lotus Development Corp. 65,087
1,155 *M/A Communications, Inc. 13,716
30,370 MCI Communications Corp. 614,993
5,304 McDonnell-Douglas Corp. 383,214
9,108 Micron Technology Inc. 406,445
26,028 *Microsoft Corp 2,204,246
26,201 Motorola, Inc. 1,568,785
5,496 *National Semiconductor Co. 137,400
11,303 Northern Telecom, Ltd. 433,753
2,198 Northrop-Grumman Corp. 115,120
16,529 *Novell, Inc. 319,216
19,182 *Oracle Systems Corp. 666,575
1,898 Perkin-Elmer Corp. 65,956
6,966 Pitney Bowes, Inc. 257,742
5,502 Raytheon Co. 426,405
9,809 Rockwell International Corp. 447,536
3,389 Scientific-Atlanta, Inc. 63,120
1,025 Shared Medical Systems Corp. 34,209
6,300 *Silicon Graphics Inc. 244,913
15,576 Sprint Corp. 521,796
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
TECHNOLOGY--CONTINUED
4,238 *Sun Microsystems $ 190,710
2,899 TRW, Inc. 228,659
5,149 *Tandem Computers, Inc. 68,224
3,279 Tandy Corp. 153,293
1,367 Tektronix, Inc. 62,882
4,140 Texas Instruments, Inc. 478,688
3,966 Textron, Inc. 241,430
875 Thomas & Betts Corp. 58,953
7,634 *Unisys Corp. 81,111
5,571 United Technologies Corp. 422,700
4,731 Xerox Corp. 536,377
--------------
Total 27,860,944
--------------
TRANSPORTATION--1.6%
3,391 *AMR Corp. 231,436
3,988 Burlington Northern Inc. 243,767
4,681 CSX Corp. 356,926
3,526 Conrail Inc. 190,404
1,622 Consolidate Freightways, Inc. 38,523
2,255 Delta Air Lines, Inc. 146,857
2,499 *Federal Express Corp. 149,628
12,380 Laidlaw Inc. 114,515
3,353 *Navistar International Corp. 51,972
6,020 Norfolk Southern Corp. 412,370
1,744 Roadway Services, Inc. 81,532
3,520 Ryder Systems, Inc. 89,320
6,647 Sante Fe Pacific Corp. 162,852
6,399 Southwest Airlines Co. 141,578
9,166 Union Pacific Corp. 507,567
2,706 *U.S. Air Group, Inc. 24,016
1,256 Yellow Corp. 23,864
--------------
Total 2,967,127
--------------
UTILITIES--8.0%
8,384 Alltel Corp. 206,456
8,263 American Electric Power Co., Inc. 283,008
24,601 Ameritech Corp. 1,091,669
6,593 Baltimore Gas & Electric Co. 171,418
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
UTILITIES--CONTINUED
19,495 Bell Atlantic Corp. $ 1,086,846
22,177 BellSouth Corp. 1,361,113
7,029 Carolina Power & Light Co. 209,991
8,490 Central & SouthWest Corp. 218,618
6,605 Cinergy Corp. 175 858
2,260 Columbia Gas System, Inc. 67,800
10,498 Consolidated Edison Co. 313,628
6,474 Detroit Edison Co. 195,029
7,702 Dominion Resources, Inc. 285,937
9,155 Duke Power Co. 382,221
921 Eastern Enterprises 27,630
8,348 FPL Group, Inc. 327,659
42,994 GTE Corp. 1,434,925
5,200 General Public Utilities Corp. 156,000
5,868 Houston Industries, Inc. 253,058
6,434 Niagara Mohawk Power Corp. 94,902
2,325 NICOR, Inc. 61,903
2,990 Northern States Power Co. 141,651
18,863 NYNEX Corp. 787,530
6,819 Ohio Edison Co. 149,166
9,903 PECO Energy Co. 278,522
3,669 Pacific Enterprises 92,642
19,319 Pacific Gas & Electric Co. 560,251
18,952 Pacific Telesis Group 506,966
12,653 Pacificorp 249,897
1,558 People's Energy Corp. 41,677
10,936 Public Service Enterprise Group, Inc. 325,346
26,799 SBC Communications Inc. 1,205,955
20,016 SCEcorp. 347,726
29,202 Southern Co. 646,094
10,093 Texas Utilities Co. 364,610
9,572 Unicom Corp. 260,837
4,564 Union Electric Co. 172,862
20,376 U.S. West, Inc. 840,510
--------------
Total 15,377,911
--------------
Total Common Stocks (identified cost $147,374,961) 175,252,164
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Long-Term U.S. Treasury Obligations--7.3%
U.S. TREASURY BILLS--7.3%
$ 14,035,000 6/15/1995 (identified cost $13,837,275) $ 14,003,983
--------------
**Repurchase Agreement--0.1%
228,343 Daiwa, Inc., 6.125%, dated 5/31/1995, due 6/1/1995 (at amortized cost) 228,343
--------------
Total Investments (identified cost $161,440,579) $ 189,484,490+
--------------
</TABLE>
The cost of investments for federal tax purposes amounts to $161,440,579. The
net unrealized appreciation of investments on a federal tax basis amounts to
$28,043,911, which is comprised of $32,173,226 appreciation and $4,129,315
depreciation at May 31, 1995.
* Non-income producing security.
** The repurchase agreement is fully collateralized by U.S. Government and/or
agency obligations based on market prices at the date of the portfolio.
Note: The categories of investments are shown as a percentage of net assets
($190,861,861) at
May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (identified and tax cost $161,440,579) $ 189,484,490
Income receivable 591,341
Receivable for investments sold 21,209
Receivable for shares sold 638,776
Deferred expenses 31,469
Receivable for daily variation margin 265,950
--------------
Total assets 191,033,235
Liabilities:
Payable for investments purchased $ 91,970
Payable to Adviser 38,712
Payable for shares redeemed 16,678
Payable to Administrator 14,235
Accrued expenses 9,779
---------
Total liabilities 171,374
--------------
Net Assets for 15,892,102 shares outstanding $ 190,861,861
--------------
Net Assets Consists of:
Paid-in capital $ 159,324,543
Net unrealized appreciation of investments (including unrealized appreciation of futures
contracts of $1,176,145) 29,220,056
Accumulated net realized gain on investments and futures contracts 1,532,011
Undistributed net investment income 785,251
--------------
Total Net Assets $ 190,861,861
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
($190,861,861 / 15,892,102 shares outstanding) $12.01
--------------
Offering Price Per Share: (100/95.50 of $12.01)* $12.58
--------------
</TABLE>
*See 'What Shares Cost' in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 472,564
Dividends 2,250,107
-------------
Total income 2,722,671
Expenses:
Investment advisory fee $ 267,420
Administrative personnel and services fee 80,810
Custodian fees 17,828
Transfer agent and dividend disbursing agent fees and expenses 16,703
Trustees' fees 6,605
Auditing fees 7,009
Legal fees 8,043
Portfolio accounting fees 34,776
Share registration costs 11,999
Printing and postage 9,479
Insurance premiums 3,924
Miscellaneous 7,847
------------
Total expenses 472,443
Deduct--
Waiver of investment advisory fee 45,581
------------
Net Expenses 426,862
-------------
Net investment income 2,295,809
-------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments and futures contracts 1,550,244
Net change in unrealized appreciation of investments and futures contracts 27,100,571
-------------
Net realized and unrealized gain on investments and futures contracts 28,650,815
-------------
Change in net assets resulting from operations $ 30,946,624
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
May 31, 1995 Year Ended
(unaudited) November 30, 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 2,295,809 4,099,231
Net realized gain on investments and futures contracts ($1,550,244
and $449,877, respectively, as computed for
federal tax purposes) 1,550,244 596,542
Net change in unrealized appreciation (depreciation) of
investments and futures contracts 27,100,571 (3,907,225)
--------------- --------------------
Change in net assets resulting from operations 30,946,624 788,548
--------------- --------------------
Distributions to Shareholders--
Distributions from net investment income (2,293,998) (3,872,917)
Distributions from net realized gains (598,243) (255,437)
--------------- --------------------
Change in net assets resulting from distributions to
shareholders (2,892,241) (4,128,354)
--------------- --------------------
Share Transactions--
Proceeds from sale of shares 20,670,521 53,300,273
Net asset value of shares issued to shareholders in payment of
distributions declared 2,800,426 4,124,935
Cost of shares redeemed (44,515,215) (19,499,382)
--------------- --------------------
Change in net assets resulting from share transactions (21,044,268) 37,925,826
--------------- --------------------
Change in net assets 7,010,115 34,586,020
Net Assets:
Beginning of period 183,851,746 149,265,726
--------------- --------------------
End of period (including undistributed net investment income of
$785,251 and $783,440, respectively) $ 190,861,861 $ 183,851,746
--------------- --------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months Ended Year Ended November
May 31, 1995 30,
(unaudited) 1994 1993(a)
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.27 $ 10.47 $ 10.00
Income from investment operations
Net investment income 0.14 0.25 0.15
Net realized and unrealized gain (loss) on investments
and futures contracts 1.76 (0.19) 0.43
------- --------- -----------
Total from investment operations 1.90 0.06 0.58
------- --------- -----------
Less distributions
Distributions from net investment income (0.13) (0.24) (0.11)
Distributions from net realized gains on investment
transactions (0.03) (0.02) --
------- --------- -----------
Total distributions (0.16) (0.26) (0.11)
------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 12.01 $ 10.27 $ 10.47
------- --------- -----------
Total return(b) 18.79% 0.56% 5.80%
Ratios to average net assets
Expenses 0.48%(c) 0.46% 0.43%(c)
Net investment income 2.58%(c) 2.44% 2.54%(c)
Expense waiver/reimbursement(d) 0.05%(c) 0.08% 0.12%(c)
Supplemental Data
Net assets, end of period (000 omitted) $190,862 $183,852 $149,266
Portfolio turnover 37 % 9% 9 %
</TABLE>
(a) Reflects operations for the period from May 10, 1993 (date of initial
public investment) to
November 30, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
(1) ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein present only those of Biltmore Equity Index Fund (the "Fund").
The financial statements of the other 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.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Listed equity securities and futures contracts are
valued at the last sale price reported on national securities exchanges.
U.S. Government securities are generally valued at the bid price as
furnished by an independent pricing service. Short-terrn securities with
remaining maturities of sixty days or less at the time of purchase may be
valued at amortized cost, which approximates fair market value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require a 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 Fund 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's 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 Fund could receive less
than the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
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").
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-LSSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
FUTURES CONTRACTS--Upon entering into a financial futures contract with a
broker, the Fund is required to deposit in a segregated account, an amount
of cash or U.S. Government securities equal to a percentage of the contract
value. The Fund agrees to receive from or to pay to the broker an amount of
cash equal to a specific dollar amount times the difference between the
closing value and the price at which the contract was made. On a daily
basis, the value of the financial futures contract is determined and any
difference between such value and the original futures contract value is
reflected in the "daily variation margin" account. Daily variation margin
adjustments, arising from this "marking to market" process, are recorded by
the Fund as unrealized gains or losses.
The Fund may decide to close its position on a contract at any time prior
to the contract's expiration. When a contract is closed, the Fund
recognizes a realized gain or loss. Risks of entering into futures
contracts include the possibility that a change in the value of the
contract may not correlate with changes in the value of the underlying
securities. For the period ended May 31, 1995, the Fund had a realized gain
of $1,057,491 on futures contracts.
<TABLE>
<CAPTION>
Unrealized
Expiration Contracts to Appreciation
Date Deliver/Receive Position (Depreciation)
<S> <C> <C> <C>
-------------------------------------------------------
June 1995 54 Long $1,176,145
</TABLE>
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>
Six Months
Ended Year Ended
May 31, 1995 November 30, 1994
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
Shares sold 1,903,439 5,136,588
Shares issued to shareholders in payment of
distributions declared 264,638 393,713
Shares redeemed (4,179,938) (1,878,820)
---------------- --------------------
Net change resulting from share transactions (2,011,861) 3,651,481
---------------- --------------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Fund's
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to .30 of 1% of the Fund's average daily
net assets.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust and The Biltmore Municipal
Funds for the period. FAS may voluntarily choose to waive a portion of its fee.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with FAS, the Fund
will pay FAS up to .25 of 1% of average net assets of the Fund for the period.
This fee is to obtain
certain services for shareholders and to maintain shareholder accounts. For the
six months ended
May 31, 1995, the Fund did not incur a shareholder services fee.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE EQUITY INDEX FUND
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES, PORTFOLIO ACCOUNTING
AND CUSTODIAN FEES--Federated Services Company ("FServ") serves as transfer and
dividend disbursing agent for the Fund. This fee is based on the size, type, and
number of accounts and transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A. is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average net assets
for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses ($34,484) were initially borne
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following
April 3, 1993 (the date the Fund became effective). For the six months ended May
31, 1995, the Fund paid $2,566, pursuant to this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the six
months ended
May 31, 1995, were as follows:
<TABLE>
<S> <C>
Purchases $ 65,491,725
-------------
Sales $ 85,588,261
-------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other governmental
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 Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297847
3061812 (7/95)
SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE
FIXED INCOME FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of the Biltmore
Fixed Income Fund for the six-month period ended May 31,1995. As always, the
report begins with a brief commentary on the bond market from the Fund's
portfolio manager. Following the commentary are a complete listing of the Fund's
portfolio of investments and its financial statements.
On your behalf, the Biltmore Fixed Income Fund pursues a high level of total
return from a diversified portfolio of high-quality corporate and U.S.
government bonds. At the end of the period, many of the Fund's corporate bonds
were issued by such well-known names as duPont, J.C. Penney, Motorola, American
Express, Exxon, General Electric, and Sears. The Fund's government bond holdings
included mortgage-backed bonds and U.S. Treasury bonds and notes.
The Fund rewarded shareholders with dividends totaling $0.29 per share over the
six-month reporting period. I am also pleased to report that the Fund's net
asset value increased from $8.97 on the first day of the period to $9.67 on May
31, 1995, the last day of the period, which helped it deliver total return
figures based on net asset value and maximum offering price of 11.21% and 6.23%,
respectively.* Total assets stood at $164.2 million on the last day of the
reporting period.
Thank you for selecting the Biltmore Fixed Income Fund to pursue income from
your investment. We welcome you comments and suggestions.
Sincerely,
John W. McGonigle
President
July 14, 1995
*Performance quoted represents past performance. 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND
The bond market rally that began in November gained momentum during the first
half of 1995 amid increasing signs of a slowing economy. Interest rates declined
across all but the shortest maturities as the fixed income markets posted their
strongest gains in four years. The largest declines in rates were in the
intermediate maturity range, reversing the trend toward a flatter yield curve
that had dominated the bond market for the previous two years. From November 30,
1994 to May 31, 1995, the Fund had total return figures of 11.21% based on net
asset value and 6.23% based on the maximum offering price.*
The Biltmore Fixed Income Fund reduced overweighted positions in long- and
short-term bonds as the yield curve steepened. As a result, the Fund's maturity
distribution was more closely aligned with the market at the end of the period.
The Fund's manager also took advantage of the strong bond market rally to
shorten duration.
On May 31, 1995, net assets totaled $164.2 million and a net asset value per
share of $9.67. The 30-day SEC yield was 6.16% based on net asset value and
5.87% based on the maximum offering price.* The Fund ended the period with an
average duration of 4.7 years.
*Performance quoted represents past performance. 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Asset Backed Securities--0.7%
$ 329,390 Ford Credit Trust, 4.85%, 1/15/1998 $ 326,198
525,341 GMAC Grantor Trust, 4.00%, 9/15/1998 515,963
311,971 USAA Auto Loan Grantors Trust, 3.90%, 3/15/1999 306,802
--------------
Total Asset-Backed Securities (identified cost $1,168,697) 1,148,963
--------------
Corporate Bonds--17.0%
BANKING--1.8%
1,000,000 Bankers Trust NY Corp., 7.25%, 11/1/1996 1,012,750
1,500,000 Branch Banking & Trust Co., 4.75%, 5/15/1996 1,479,000
500,000 NationsBank Corp., 5.375%, 4/15/2000 474,175
--------------
Total 2,965,925
--------------
CHEMICALS--1.1%
240,000 duPont (E.I.) de Nemours & Co., 7.00%, 4/16/1997 243,281
1,463,000 Monsanto Co., 7.09%, 12/15/2000 1,477,030
--------------
Total 1,720,311
--------------
CONSUMER NON-DURABLES--1.2%
2,000,000 Penney (J.C.) Co., Inc., 5.375%, 11/15/1998 1,934,780
--------------
DRUGS--0.8%
1,215,000 American Home Products, 6.875%, 4/15/1997 1,228,766
--------------
ELECTRONICS--0.4%
605,000 Motorola, Inc., 8.40%, 8/15/2031 722,648
--------------
FINANCE--9.9%
350,000 American Express Credit Corp., 6.75%, 6/1/2001 352,355
670,000 Barclays American Corp., 9.125%, 12/1/1997 710,582
850,000 Beneficial Corp., 10.00%, 12/1/2021 980,815
750,000 Beneficial Corp., 6.15%, 6/30/2000 733,283
1,250,000 Beneficial Corp., 7.99%, 2/14/2000 1,316,413
1,000,000 Chubb Capital Corp., 6.875%, 2/1/2003 1,004,000
1,500,000 CIGNA Corp., 6.375%, 1/15/2006 1,378,485
425,000 Exxon Capital Corp., 6.50%, 7/15/1999 426,585
945,000 General Electric Capital Corp., 8.125%, 11/9/2001 1,023,794
655,000 General Electric Capital Corp., 8.65%, 5/1/2018 668,093
240,000 General Electric Capital Corp., 9.50%, 8/24/1995 241,726
750,000 Grand Metropolitan Investment Corp., 7.45%, 4/15/2035 782,522
1,500,000 Household Finance Corp., 6.65%, 5/26/1998 1,503,765
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Corporate Bonds--continued
FINANCE--CONTINUED
$ 1,000,000 Household Finance Corp., 6.75%, 6/1/2000 $ 1,008,190
1,000,000 IBM Credit Corp., 5.00%, 5/10/1996 988,270
315,000 International Bank for Reconstruction & Development, 9.00%,
11/15/1995 318,978
1,100,000 Nationwide Life Insurance Co., 6.50%, 2/15/2004 1,053,976
1,000,000 Norwest Financial, Inc., 8.15%, 11/1/2001 1,087,200
630,000 TransAmerica Financial Corp., 9.25%, 6/30/1997 664,360
--------------
Total 16,243,392
--------------
FOREIGN BOND--0.4%
770,000 Italy Republic, 6.875%, 9/27/2023 687,741
--------------
HOME FURNISHINGS--0.2%
240,000 Armstrong World Industries, Inc., 9.75%, 4/15/2008 291,746
--------------
RETAIL STORES--0.6%
1,000,000 Sears, Roebuck & Co., 7.29%, 4/24/2000 1,029,000
--------------
SECURITIES--0.6%
1,080,000 Morgan Stanley Group, Inc., 5.65%, 6/15/1997 1,063,908
--------------
Total Corporate Bonds (identified cost $27,758,919) 27,888,217
--------------
U.S. Government Agencies--31.1%
FEDERAL HOME LOAN BANK--7.8%
750,000 7.75%, 2/26/1997 769,268
1,215,000 7.70%, 12/16/1996 1,244,427
4,500,000 7.15%, 11/21/1996 4,573,440
5,250,000 6.95%, 11/8/1996 5,319,300
1,000,000 5.10%, 7/8/1996 986,950
--------------
Total 12,893,385
--------------
FEDERAL HOME LOAN MORTGAGE CORP.--3.9%
1,521 12.50%, 4/1/2014 1,688
8,783 12.50%, 3/1/2014 9,749
13,729 12.50%, 7/1/2011 15,239
6,059 12.50%, 2/1/2010 6,726
28,384 11.00%, 10/1/2015 30,552
5,020 11.00%, 10/1/2010 5,387
1,571 10.00%, 2/1/2019 1,681
769 10.00%, 2/1/2019 824
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
U.S. Government Agencies--continued
FEDERAL HOME LOAN MORTGAGE CORP.--CONTINUED
$ 2,447 10.00%, 1/1/2019 $ 2,624
1,420 10.00%, 1/1/2019 1,523
2,743 9.50%, 2/1/2019 2,852
1,540 9.50%, 2/1/2019 1,601
44,550 9.50%, 7/1/2016 46,537
1,601 9.00%, 1/1/2019 1,657
2,691 9.00%, 1/1/2019 2,785
384 9.00%, 9/1/2017 397
2,579 8.50% 8/1/2017 2,659
7,151 8.50%, 7/1/2017 7,400
4,084 8.00%, 1/1/2019 4,175
3,059 8.00%, 7/1/2017 3,122
74,026 8.00%, 4/1/2009 75,658
13,699 8.00%, 2/1/2009 14,001
1,927 8.00%, 1/1/2009 1,969
31,284 8.00%, 12/1/2008 31,975
31,946 8.00%, 1/1/2008 32,656
160,128 7.50%, 2/1/2023 160,878
233,944 7.50%, 2/1/2023 235,039
213,403 7.50%, 2/1/2023 214,402
162,694 7.50%, 2/1/2023 163,455
169,704 7.50%, 2/1/2023 170,498
3,691,654 7.50%, 9/1/2007 3,762,017
785,852 7.00%, 6/1/2008 791,007
610,920 5.00%, 12/15/2000 608,440
--------------
Total 6,411,173
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--8.8%
780 12.50%, 9/1/2013 864
1,256 10.00%, 2/1/2019 1,358
6,069 10.00%, 2/1/2019 6,562
1,383 10.00%, 1/1/2019 1,495
2,588 9.50%, 2/1/2019 2,709
448 9.50%, 7/1/2016 470
1,790 9.50%, 7/1/2016 1,881
1,738 9.50%, 7/1/2016 1,823
4,571 9.00%, 8/1/2018 4,772
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
U.S. Government Agencies--continued
FEDERAL NATIONAL MORTGAGE ASSOCIATION--CONTINUED
$ 1,127 9.00%, 1/1/2017 $ 1,176
2,451 8.50%, 2/1/2019 2,544
463 8.50%, 2/1/2017 480
65,745 8.00%, 9/1/2009 67,591
11,367 8.00%, 1/1/2009 11,683
5,535 8.00%, 11/1/2008 5,689
217,608 7.50%, 1/1/2023 218,559
221,021 7.50%, 1/1/2023 221,987
550,548 7.50%, 1/1/2023 552,954
1,318,340 7.50%, 4/1/2007 1,343,059
3,350,000 6.27%, 4/3/1996 3,359,380
5,600,000 6.05%, 6/30/2003 5,460,000
1,816,889 6.00%, 1/1/2009 1,761,801
1,500,000 5.80%, 12/10/2003 1,428,510
--------------
Total 14,457,347
--------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--10.0%
4,483 12.25%, 5/15/2014 4,993
13,178 12.25%, 4/15/2014 14,677
2,157 12.25%, 3/15/2014 2,402
12,651 12.25%, 2/15/2014 14,090
9,822 12.25%, 10/15/2013 10,939
8,804 12.25%, 8/15/2013 9,805
2,232 11.50%, 12/15/2017 2,491
1,936 11.50%, 11/15/2015 2,161
717 11.50%, 6/15/2013 800
4,396 11.00%, 12/15/2015 4,863
370 11.00%, 11/15/2015 409
3,020 11.00%, 11/15/2015 3,341
1,872 11.00%, 11/15/2015 2,071
18,837 11.00%, 9/15/2015 20,838
20,023 11.00%, 9/15/2015 22,150
6,245 11.00%, 9/15/2015 6,908
7,940 11.00%, 9/15/2015 8,784
30,395 11.00%, 8/15/2015 33,624
3,437 10.50%, 8/15/2017 3,768
42,707 10.50%, 8/15/2017 46,751
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
U.S. Government Agencies--continued
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--CONTINUED
$ 10,036 10.50%, 7/15/2017 $ 10,987
7,461 10.50%, 9/15/2015 8,116
3,641 10.50%, 9/15/2015 3,992
7,853 10.50%, 11/15/2000 8,280
954 10.50%, 11/15/2000 1,006
4,273 10.50%, 11/15/2000 4,505
8,687 10.50%, 10/15/2000 9,159
1,808 10.00%, 2/15/2019 1,961
1,220 10.00%, 2/15/2019 1,323
603 10.00%, 2/15/2019 653
7,046 10.00%, 2/15/2019 7,636
4,476 10.00%, 1/15/2019 4,865
55,323 9.50%, 11/15/2020 58,744
28,389 9.50%, 11/15/2020 29,950
40,818 9.50%, 10/15/2020 43,063
32,776 9.50%, 10/15/2020 34,579
135,403 9.50%, 10/15/2020 142,856
73,806 9.50%, 9/15/2020 77,865
55,718 9.50%, 6/15/2020 58,785
34,330 9.50%, 4/15/2020 36,219
38,967 9.50%, 4/15/2020 41,112
68,002 9.50%, 4/15/2020 71,875
87,720 9.50%, 4/15/2020 92,548
34,376 9.50%, 4/15/2020 36,268
60,379 9.50%, 4/15/2020 63,702
1,087 9.50%, 2/15/2019 1,149
4,396 9.50%, 7/15/2018 4,667
17,836 9.50%, 10/15/2017 18,939
40,446 9.50%, 9/15/2017 42,825
296,168 9.50%, 12/15/2016 314,486
44,339 9.50%, 7/15/2016 47,068
8,883 9.50%, 7/15/2016 9,433
72,901 9.50%, 6/15/2016 77,389
2,731 9.50%, 5/15/2016 2,899
23,673 9.50%, 5/15/2016 25,130
3,474 9.50%, 5/15/2016 3,688
4,573 9.50%, 6/15/2001 4,808
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
U.S. Government Agencies--continued
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--CONTINUED
$ 86,101 9.00%, 1/15/2021 $ 90,271
83,163 9.00%, 1/15/2021 87,465
63,365 9.00%, 1/15/2021 66,434
101,066 9.00%, 1/15/2021 106,293
86,648 9.00%, 1/15/2021 91,130
58,252 9.00%, 11/15/2020 61,074
67,857 9.00%, 1/15/2020 71,429
79,803 9.00%, 12/15/2019 83,930
180,976 9.00%, 12/15/2019 190,336
96,495 9.00%, 11/15/2019 101,486
70,663 9.00%, 10/15/2019 74,317
29,438 9.00%, 6/15/2018 30,988
81,096 9.00%, 5/15/2018 85,434
18,102 9.00%, 4/15/2018 19,070
1,507 9.00%, 7/15/2017 1,589
24,022 9.00%, 6/15/2017 25,325
39,259 9.00%, 5/15/2017 41,501
76,203 9.00%, 1/15/2017 80,338
9,421 9.00%, 1/15/2017 9,939
69,943 9.00%, 1/15/2017 73,790
70,512 9.00%, 1/15/2017 74,391
103,512 9.00%, 1/15/2017 109,206
7,022 9.00%, 12/15/2016 7,408
78,040 9.00%, 11/15/2016 82,333
53,868 9.00%, 10/15/2016 56,831
293 9.00%, 10/15/2016 309
753 9.00%, 10/15/2016 794
60,335 9.00%, 10/15/2016 63,654
53,179 9.00%, 10/15/2016 56,215
51,581 9.00%, 9/15/2016 54,419
81,524 9.00%, 9/15/2016 86,009
6,052 9.00%, 9/15/2016 6,385
53,934 9.00%, 9/15/2016 57,013
20,775 9.00%, 9/15/2016 21,902
2,690 9.00%, 8/15/2016 2,838
224 9.00%, 8/15/2016 237
25,595 9.00%, 7/15/2016 27,003
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
U.S. Government Agencies--continued
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--CONTINUED
$ 33,040 9.00%, 6/15/2016 $ 34,925
1,938 9.00%, 6/15/2016 2,043
74,434 9.00%, 6/15/2016 78,529
57,547 9.00%, 5/15/2016 60,712
32,531 9.00%, 5/15/2016 34,320
11,518 9.00%, 5/15/2016 12,152
66,076 8.50%, 6/15/2022 68,595
156,806 8.50%, 5/15/2022 162,783
153,642 8.50%, 5/15/2022 159,499
28,077 8.50%, 4/15/2022 29,305
125,782 8.50%, 12/15/2021 130,576
92,607 8.50%, 11/15/2021 96,137
66,984 8.50%, 11/15/2021 69,537
121,417 8.50%, 11/15/2021 126,045
62,298 8.50%, 9/15/2021 64,673
82,949 8.50%, 5/15/2021 86,111
5,156 8.50%, 9/15/2017 5,407
8,116 8.50%, 6/15/2017 8,491
35,999 8.50%, 7/15/2016 37,748
15,055 8.50%, 6/15/2016 15,787
36,562 8.50%, 6/15/2016 38,340
138,696 8.50%, 6/15/2016 145,746
45,584 8.50%, 5/15/2016 47,800
215,280 8.00%, 9/15/2022 220,593
173,307 8.00%, 9/15/2022 177,584
1,380,761 8.00%, 9/15/2022 1,414,838
479,232 8.00%, 5/15/2022 491,059
166,833 8.00%, 4/15/2022 170,950
14,668 8.00%, 6/15/2017 15,139
21,114 8.00%, 2/15/2017 21,792
1,732,244 7.50%, 1/15/2024 1,743,070
107,145 7.50%, 3/15/2023 107,814
187,590 7.50%, 2/15/2023 188,762
212,136 7.50%, 2/15/2023 213,462
219,468 7.50%, 12/15/2022 220,840
215,865 7.50%, 12/15/2022 217,214
222,140 7.50%, 12/15/2022 223,528
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
U.S. Government Agencies--continued
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--CONTINUED
$ 174,768 7.50%, 12/15/2022 $ 175,860
213,865 7.50%, 11/15/2022 215,202
212,726 7.50%, 10/15/2022 214,055
212,823 7.50%, 8/15/2022 214,154
195,441 7.50%, 2/15/2022 196,662
918,168 7.00%, 6/15/2023 903,532
1,903,216 6.50%, 5/15/2009 1,883,575
1,912,129 6.00%, 5/15/2009 1,854,765
19,826 5.50%, 8/15/1998 19,584
20,154 5.50%, 8/15/1998 19,907
--------------
Total 16,356,683
--------------
AID TO ISRAEL--0.6%
1,000,000 5.625%, 9/15/2003 941,010
--------------
Total U.S. Government Agencies (identified cost $50,575,570) 51,059,598
--------------
U.S. Treasury Obligations--46.9%
U.S. TREASURY BONDS--15.9%
488,000 10.75%, 8/15/2005 645,458
22,549,000 7.875%, 2/15/2021 25,469,772
--------------
Total 26,115,230
--------------
U.S. TREASURY NOTES--31.0%
1,095,000 9.125%, 5/15/1999 1,213,052
3,250,000 8.75%, 10/15/1997 3,451,078
1,000,000 7.875%, 8/15/2001 1,087,810
500,000 7.75%, 1/31/2000 533,595
800,000 7.75%, 12/31/1999 853,128
1,500,000 7.75%, 11/30/1999 1,598,205
500,000 7.25%, 5/15/2004 531,015
2,000,000 6.75%, 4/30/2000 2,056,560
1,500,000 6.625%, 3/31/1997 1,519,920
4,000,000 6.50%, 4/30/1999 4,063,760
750,000 6.50%, 4/30/1997 758,558
850,000 6.375%, 8/15/2002 857,438
8,300,000 6.25%, 2/15/2003 8,288,297
1,200,000 6.125%, 5/15/1998 1,206,192
1,500,000 6.00%, 10/15/1999 1,497,180
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
U.S. Treasury Obligations--continued
U.S. TREASURY NOTES--CONTINUED
$ 1,500,000 6.00%, 12/31/1997 $ 1,502,580
500,000 5.75%, 10/31/1997 498,205
1,000,000 5.50%, 7/31/1997 992,340
12,750,000 5.125%, 3/31/1998 12,483,015
6,000,000 4.375%, 8/15/1996 5,898,720
--------------
Total 50,890,648
--------------
Total U.S. Treasury Obligations (identified cost, $75,695,829) 77,005,878
--------------
*Repurchase Agreement--3.3%
5,395,194 Daiwa Securities America, Inc., 6.125%, dated 5/31/1995,
due 6/1/1995 (at amortized cost) 5,395,194
--------------
Total Investments (identified cost $160,594,209) $ 162,497,850+
--------------
</TABLE>
* The repurchase agreement is fully collateralized by U.S. Treasury obligations
based on market prices at the date of the portfolio.
+ The cost of investments for federal tax purposes amounts to $160,594,209. The
net unrealized appreciation of investments on a federal tax basis amounts to
$1,903,641, which is comprised of $3,077,031 appreciation and $1,173,390
depreciation at May 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($164,240,863) at
May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (identified and tax cost $160,594,209) $ 162,497,850
Income receivable 2,074,371
Receivable for investments sold 1,015,217
Receivable for shares sold 312,169
Deferred expenses 29,462
--------------
Total assets 165,929,069
Liabilities:
Payable for investments purchased $ 1,357,332
Payable for shares redeemed 239,577
Accrued expenses 91,297
------------
Total liabilities 1,688,206
--------------
Net Assets for 16,983,622 shares outstanding $ 164,240,863
--------------
Net Assets Consist of:
Paid in capital $ 168,185,219
Net unrealized appreciation of investments 1,903,641
Accumulated net realized loss on investments (6,059,380)
Undistributed net investment income 211,383
--------------
Total Net Assets $ 164,240,863
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
($164,240,863 / 16,983,622 shares outstanding) $9.67
--------------
Offering Price Per Share: (100/95.50 of $9.67)* $10.13
--------------
</TABLE>
* See "What Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 5,320,458
Expenses:
Investment advisory fee $ 454,371
Administrative personnel and services fee 68,643
Custodian fees 15,146
Transfer agent and dividend disbursing agent fees and expenses 17,541
Trustees' fees 7,109
Auditing fees 6,968
Legal fees 5,034
Portfolio accounting fees 32,844
Share registration costs 13,479
Printing and postage 7,196
Insurance premiums 2,566
Miscellaneous 5,221
----------
Total expenses 636,118
Deduct--Waiver of investment advisory fee 75,728
----------
Net expenses 560,390
-------------
Net investment income 4,760,068
-------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments (2,122,508)
Net change in unrealized appreciation of investments 13,737,303
-------------
Net realized and unrealized gain on investments 11,614,795
-------------
Change in net assets resulting from operations $ 16,374,863
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
May 31, 1995 Year Ended
(unaudited) November 30, 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 4,760,068 $ 8,483,525
Net realized loss on investments ($2,122,508 and $3,749,695, net
loss, respectively, as computed for federal tax purposes) (2,122,508) (3,910,216)
Net change in unrealized appreciation (depreciation)
of securities 13,737,303 (10,860,025)
--------------- --------------------
Change in net assets resulting from operations 16,374,863 (6,286,716)
--------------- --------------------
Distributions to Shareholders--
Distributions from net investment income (4,720,725) (8,390,071)
Distributions from net realized gain on investment transactions -- (893,398)
--------------- --------------------
Change in net assets resulting from distributions
to shareholders (4,720,725) (9,283,469)
--------------- --------------------
Share Transactions--
Proceeds from sale of shares 22,246,205 45,809,510
Net asset value of shares issued to shareholders in payment of
distributions declared 4,282,751 8,987,006
Cost of shares redeemed (22,692,887) (30,801,044)
--------------- --------------------
Change in net assets resulting from share transactions 3,836,069 23,995,472
--------------- --------------------
Change in net assets 15,490,207 8,425,287
Net Assets:
Beginning of period 148,750,656 140,325,369
--------------- --------------------
End of period (including undistributed net investment income of
$211,383 and $172,040, respectively) $ 164,240,863 $ 148,750,656
--------------- --------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
May 31, 1995 November 30,
(unaudited) 1994 1993(a)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.97 $ 10.00 $ 10.00
Income from investment operations
Net investment income 0.29 0.56 0.31
Net realized and unrealized gain (loss) on investments 0.70 (0.98) (0.01)
------- --------- -----------
Total from investment operations 0.99 (0.42) 0.30
------- --------- -----------
Less distributions
Distributions from net investment income (0.29) (0.55) (0.30)
Distributions from net realized gain on investment
transactions -- (0.06) --
------- --------- -----------
Total distributions (0.29) (0.61) (0.30)
------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 9.67 $ 8.97 $ 10.00
------- --------- -----------
Total return(b) 11.21% (4.30%) 3.02%
Ratios to average net assets
Expenses 0.74%(c) 0.71% 0.68%(c)
Net investment income 6.29%(c) 5.90% 5.44%(c)
Expense waiver/reimbursement(d) 0.10%(c) 0.13% 0.19%(c)
Supplemental data
Net assets, end of period (000 omitted) $164,241 $148,751 $140,325
Portfolio turnover 64% 148% 149%
</TABLE>
(a) Reflects operations for the period from May 10, 1993 (date of initial
public investment) to November 30, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
(1) ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein present only those of Biltmore Fixed Income Fund (the "Fund").
The financial statements of the other 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.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--U.S. government securities are generally valued at
the bid prices as furnished by an independent pricing service. Listed
corporate bonds and other fixed-income and asset-backed securities,
unlisted securities and short-term securities are valued at the prices
provided by an independent pricing service. Short-term securities with
remaining maturities of sixty days or less at the time of purchase may be
valued at amortized cost, which approximates fair market value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require a 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 Fund 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards established or reviewed 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 Fund 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").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At November 30, 1994, the Fund, for federal tax purposes, had a capital
loss carryforward of $3,749,695, which will reduce the Fund's taxable
income arising from future net realized gain 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 Fund of any liability for federal tax. Pursuant to the Code, such
capital loss carryforward will expire in 2002.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
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>
Six Months
Ended Year Ended
May 31, 1995 November 30, 1994
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
Shares sold 2,408,264 4,885,157
Shares issued to shareholders in payment of distributions
declared 464,719 953,520
Shares redeemed (2,481,304) (3,277,961)
---------------- --------------------
Net change resulting from share transactions 391,679 2,560,716
---------------- --------------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Fund's
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to .60 of 1% of the Fund's average daily
net assets. The Adviser may voluntarily choose to waive any portion of its fee.
The Adviser can modify or terminate this voluntary waiver at any time at its
sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust and The Biltmore Municipal
Funds for the period. FAS may voluntarily choose to waive a portion of its fee.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with FAS, the Fund will pay FAS up to .25 of 1% of average net assets of the
Fund for the period. This fee is to obtain certain services for shareholders and
to maintain shareholder accounts. For the six months ended May 31, 1995, the
Fund did not incur a shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT, PORTFOLIO ACCOUNTING AND CUSTODIAN
FEES--Federated Services Company ("FServ") serves as transfer and dividend
disbursing agent for the Fund. The fee is based on the size, type, and number of
accounts and transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A. is the Fund's custodian. The fee is based
on the level of the Fund's average net assets for the period, plus out-of-pocket
expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses ($34,484) were initially borne
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following April 3, 1993 (the date the Fund became
effective). For the period ended May 31, 1995, the Fund paid $2,554 pursuant to
this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE FIXED INCOME FUND
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended May 31, 1995, were as follows:
<TABLE>
<S> <C>
Purchases $ 93,630,084
-------------
Sales $ 94,623,455
-------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other governmental
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 Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297854
3061810 (7/95)
INSTITUTIONAL SHARES
SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE
MONEY MARKET FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report of the Biltmore Money Market Fund
for the six-month period ended May 31, 1995. This report includes a list of the
Fund's investments and financial information.
During the six-month period, the Fund's portfolio of high quality money market
securities provided shareholders with dividends of $0.03 per share. Of course,
the Fund also maintained a stable share value of $1.00.* The Fund's assets stood
at $270 million on May 31, 1995, the last day of the period.
Thank you for selecting the Biltmore Money Market Fund to put your ready cash to
work--every day. We will continue to keep you up to date on your investment, and
provide your account with the highest level of service.
Sincerely,
John W. McGonigle
President
July 14, 1995
*Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment in
the Fund is neither insured nor guaranteed by the U.S. government.
BILTMORE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Bankers Acceptances--4.7%
$ 5,000,000 Bank of New York, 6.60%, 7/6/1995 $ 4,967,917
7,857,143 Morgan Guaranty, 5.87%, 10/27/1995 7,667,532
--------------
Total Bankers Acceptances 12,635,449
--------------
Certificates Of Deposit--31.8%
7,000,000 ABN - AMRO Bank, 6.17%, 7/3/1995 7,000,042
10,000,000 Barclays Bank, 6.23%, 6/9/1995 10,000,022
10,000,000 CIBC New York, 6.06%, 8/15/1995 10,000,759
10,000,000 Credit Suisse, 6.25%, 10/18/1995 10,001,310
10,000,000 Deutsche Bank, 6.31%, 10/10/1995 10,000,197
5,000,000 National Westminster Bank, USA, 6.875%, 6/15/1995 5,000,934
5,000,000 National Westminster, London, 6.14%, 8/31/1995 5,000,245
5,000,000 Rabobank, 6.32%, 9/22/1995 5,000,542
12,000,000 Societe General Bank, 6.02%-6.13%, 7/3/1995-7/10/1995 12,000,171
12,000,000 Swiss Bank of New York, 6.03%, 8/21/1995 12,000,000
--------------
Total Certificates of Deposit 86,004,222
--------------
*Commercial Paper--35.2%
CHEMICALS--2.2%
6,000,000 duPont E.I. de Nemours & Co., 6.02%, 8/22/1995 5,917,727
--------------
FINANCE--18.1%
10,000,000 Commercial Credit Co., 6.00%, 6/2/1995 9,998,333
7,000,000 Cortez Capital, 5.98%, 6/5/1995 6,995,349
9,000,000 General Electric Capital Corp., 6.40%, 6/12/1995 8,982,400
3,000,000 Hanson Finance, PLC, 6.12%, 6/5/1995 2,997,960
5,000,000 Southwestern Bell Capital Corp., 5.93%, 6/26/1995 4,979,410
5,000,000 USAA Capital Corp., 6.15%, 7/6/1995 4,970,104
10,000,000 USL Capital Corp., 5.96%, 6/13/1995 9,980,133
--------------
Total 48,903,689
--------------
FINANCE-AUTOMOTIVE--3.7%
10,000,000 Ford Motor Credit Corp., 6.18%, 6/1/1995 10,000,000
--------------
FINANCE-OIL--3.2%
8,800,000 Shell Oil Co., 6.21%, 8/21/1995 8,677,042
--------------
FOOD & BEVERAGE--6.2%
7,000,000 Coca Cola Co., 5.87%, 11/6/1995 6,819,661
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
*Commercial Paper--continued
FOOD & BEVERAGE--CONTINUED
$ 10,000,000 Sara Lee Corp., 6.00%, 8/9/1995 $ 9,885,000
--------------
Total 16,704,661
--------------
TRANSPORTATION--1.8%
5,000,000 Norfolk Southern Corp., 6.25%, 8/7/1995 4,941,840
--------------
Total Commercial Paper 95,144,959
--------------
**Variable Rate Notes--8.5%
FINANCE-BANKING--6.7%
5,000,000 Boatmens National Bank, St. Louis, 6.25%, 8/16/1995 5,000,000
10,000,000 First Union National Bank, 6.09%, 5/13/1996 10,000,000
3,000,000 Northern Trust Co., 5.75%, 7/20/1995 2,998,073
--------------
Total 17,998,073
--------------
FOOD & BEVERAGE--1.8%
5,000,000 Coca Cola Co., 5.92%, 8/29/1995 5,000,000
--------------
Total Variable Rate Notes 22,998,073
--------------
***Repurchase Agreements--19.9%
53,763,851 Goldman, Sachs & Co., 6.10%, dated 5/31/1995, due 6/1/1995 53,763,851
--------------
Total Investments, at amortized cost and value $ 270,546,554+
--------------
</TABLE>
* Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
** Current rate and next reset date shown.
*** The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($270,193,051) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in repurchase agreements $ 53,763,851
Investments in securities 216,782,703
--------------
Total investments in securities, at amortized cost
(identified and tax cost $270,546,554) $ 270,546,554
Income receivable 950,021
Deferred expenses 11,238
--------------
Total assets 271,507,813
Liabilities:
Income distribution payable 1,250,851
Accrued expenses 63,911
--------------
Total liabilities 1,314,762
--------------
Net Assets for 270,193,051 shares outstanding $ 270,193,051
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares: ($145,969,597 / 145,969,597 shares outstanding) $1.00
--------------
Investment Shares: ($124,223,454 / 124,223,454 shares outstanding) $1.00
--------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
Investment Income:
Interest $ 6,921,600
Expenses:
Investment advisory fee $ 569,568
Administrative personnel and services fee 103,204
Custodian fees 22,748
Transfer agent and dividend disbursing agent fees and expenses 20,706
Trustees' fees 8,238
Auditing fees 6,258
Legal fees 7,444
Portfolio accounting fees 29,931
Investment Shares--Distribution services fee 180,418
Share registration costs 38,725
Printing and postage 10,499
Insurance premiums 2,681
Miscellaneous 11,568
------------
Total expenses 1,011,988
Deduct--
Waiver of investment advisory fee $ 398,698
Waiver of distribution services fee 45,105
----------
Total waivers 443,803
------------
Net expenses 568,185
------------
Net investment income $ 6,353,415
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 1995 November 30,
(unaudited) 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 6,353,415 $ 6,331,857
------------------- ---------------
Distributions to Shareholders--
Institutional Shares--Distributions from net investment income (3,897,023) (5,146,447)
Investment Shares--Distributions from net investment income (2,456,392) (1,185,410)
------------------- ---------------
Change in net assets resulting from distributions
to shareholders (6,353,415) (6,331,857)
------------------- ---------------
Share Transactions--
Proceeds from sale of shares 283,230,775 479,663,256
Cost of shares redeemed (198,375,600) (481,257,539)
------------------- ---------------
Change in net assets resulting from share transactions 84,855,175 (1,594,283)
------------------- ---------------
Change in net assets 84,855,175 (1,594,283)
Net Assets:
Beginning of period 185,337,876 186,932,159
------------------- ---------------
End of period $ 270,193,051 $ 185,337,876
------------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended
May 31,
1995 Year Ended November 30,
(unaudited) 1994 1993 1992(a)
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.04 0.03 0.02
Less distributions
Distributions from net investment income (0.03) (0.04) (0.03) (0.02)
------------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- --------- --------- ---------
Total Return (b) 2.86% 3.77% 3.05% 1.71%
Ratios to average net assets
Expenses 0.38%(c) 0.38% 0.25% 0.14%(c)
Net investment income 5.70%(c) 3.74% 3.00% 3.38%(c)
Expense waiver/reimbursement (d) 0.35%(c) 0.40% 0.56% 0.65%(c)
Supplemental data
Net assets, end of period (000 omitted) $145,970 $129,233 $177,090 $84,698
</TABLE>
(a) Reflects operations for the period from June 2, 1992 (date of initial
public investment) to
November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended
May 31,
1995 Year Ended November 30,
(unaudited) 1994 1993 1992(a)
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.03 0.03 0.01
Less distributions
Distributions from net investment income (0.03) (0.03) (0.03) (0.01)
------------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- --------- --------- -----------
Total Return (b) 2.70% 3.46% 2.74% 1.48%
Ratios to average net assets
Expenses 0.68%(c) 0.68% 0.55% 0.48%(c)
Net investment income 5.40%(c) 3.44% 2.70% 3.44%(c)
Expense waiver/reimbursement (d) 0.45%(c) 0.50% 0.66% 0.75%(c)
Supplemental data
Net assets, end of period (000 omitted) $124,223 $56,105 $9,842 $3,106
</TABLE>
(a) Reflects operations for the period from June 9, 1992 (date of initial
public investment) to
November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
(1) ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein present only those of Biltmore Money Market Fund (the "Fund").
The financial statements of the other 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 Fund offers two classes of shares: Institutional Shares and Investment
Shares. Investment Shares are identical in all respects to Institutional Shares,
except that Investment Shares are sold pursuant to a Distribution Plan (the
"Plan") adopted in accordance with the Act's Rule 12b-1.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require a 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 Fund 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's 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 Fund 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").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
(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) for each
class of shares. At May 31, 1995, capital paid in aggregated $270,193,051.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
May 31, 1995 November 30, 1994
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
Institutional Shares
Shares sold 147,553,425 385,548,512
Shares redeemed (130,816,738) (433,405,663)
--------------- --------------------
Net change resulting from Institutional Share transactions 16,736,687 (47,857,151)
--------------- --------------------
<CAPTION>
Six Months Year
Ended Ended
May 31, 1995 November 30, 1994
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
Investment Shares
Shares sold 135,677,350 94,114,744
Shares redeemed (67,558,862) (47,851,876)
--------------- --------------------
Net change resulting from Investment Share transactions 68,118,488 46,262,868
--------------- --------------------
Net change resulting from share transactions 84,855,175 (1,594,283)
--------------- --------------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Fund's
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to .50 of 1% of the Fund's average daily
net assets. The Adviser may voluntarily choose to waive any portion of its fee.
The Adviser can modify or terminate the voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust and The Biltmore Municipal
Funds for the period. FAS may voluntarily choose to waive portion of its fee.
DISTRIBUTION SERVICES FEE--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 Investment Shares. The Plan provides that the Fund may incur distribution
expenses up to .40 of 1% of the average daily net assets of the Investment
Shares, annually, to compensate FSC. FSC may voluntarily choose to waive a
portion of its fee. FSC can modify or terminate this voluntary waiver at any
time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT, PORTFOLIO ACCOUNTING AND CUSTODIAN
FEES--Federated Services Company ("FServ") serves as transfer and dividend
disbursing agent for the Fund. The fee is based on the size, type, and number of
accounts and transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A. is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average net assets
for the period, plus out-of-pocket expenses.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
ORGANIZATIONAL EXPENSES--Organizational expenses ($63,357) were initially borne
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following June 2, 1992 (the date the Fund became
effective). For the six months ended May 31, 1995, the Fund paid $7,962 pursuant
to this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other governmental
agency. Investment in mutual funds involves risk, including possible loss
of principal. Although money market funds seek to maintain a stable net asset
value of $1.00 per share, there is no assurance that they will be able to
do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297102
G00376-01-IS (7/95)
INSTITUTIONAL SHARES
SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE PRIME
CASH MANAGEMENT FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report of the Biltmore Prime Cash
Management Fund for the six-month period ended May 31, 1995. This report
includes a list of the Fund's investments and financial information.
During the six-month period, the Fund's portfolio of high quality money market
securities provided shareholders with dividends of $0.03 per share. Of course,
the Fund also maintained a stable share value of $1.00.* The Fund's assets stood
at $974 million on May 31, 1995, the last day of the period.
Thank you for selecting the Biltmore Prime Cash Management Fund to put your
ready cash to work on a daily basis. We will continue to keep you up to date on
your investment, and provide your account with the highest level of service.
Sincerely,
John W. McGonigle
President
July 14, 1995
* Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment in
the Fund is neither insured nor guaranteed by the U.S. government.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE PRIME CASH MANAGEMENT FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Bankers Acceptance--1.0%
$ 10,000,000 Bank of New York, 6.53%, 6/12/1995 $ 9,980,047
--------------
Certificates of Deposit--36.0%
25,000,000 ABN Amro North America, 6.17%, 7/3/1995 25,000,149
20,000,000 Bank of New York Co., Inc., 6.18%, 6/15/1995 20,000,353
40,000,000 Barclays Bank, 6.23%, 6/9/1995 40,000,088
40,000,000 CIBC New York, 6.02%-6.06%, 8/15/1995 40,001,138
37,000,000 Credit Suisse, 5.42%-6.28%, 6/2/1995-10/10/1995 36,998,212
15,000,000 Deutsche Bank A.G., 6.31%, 10/10/1995 15,000,295
20,000,000 National Westminster Bank London, 6.14%, 8/31/1995 20,000,980
20,000,000 National Westminster Bank USA, 6.875%, 6/15/1995 20,003,736
17,000,000 Rabobank, 6.32%-6.40%, 8/23/1995-9/22/1995 16,999,565
45,000,000 Societe Generale Bank, 6.04%-6.20%, 6/13/1995-9/11/1995 45,000,750
40,000,000 Swiss Bank Corp., 6.03%, 8/21/1995 40,000,000
25,000,000 Toronto Dominion Bank, 6.21%, 10/31/1995 24,996,268
7,000,000 Union Bank of Switzerland, 6.82%, 8/14/1995 7,007,048
--------------
Total Certificates of Deposit 351,008,582
--------------
*Commercial Paper--27.4%
CHEMICALS--2.6%
25,000,000 duPont E.I. de Nemours & Co., 6.02%, 8/22/1995 24,657,194
--------------
FINANCE--6.6%
39,500,000 Hanson Finance, 6.12%, 6/5/1995 39,473,140
25,000,000 USL Capital Corp., 5.96%, 6/13/1995 24,950,333
--------------
Total 64,423,473
--------------
FINANCE-AUTOMOTIVE--4.1%
40,000,000 Ford Motor Credit Corp., 6.18%, 6/1/1995 40,000,000
--------------
FINANCE-COMMERCIAL--7.7%
40,000,000 Commercial Credit Corp., 6.00%, 6/2/1995 39,993,333
35,000,000 General Electric Capital Corp., 6.40%, 6/12/1995 34,931,556
--------------
Total 74,924,889
--------------
FINANCE-FOOD & BEVERAGE--1.5%
15,000,000 Bass Finance, 6.07%, 8/3/1995 14,840,663
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE PRIME CASH MANAGEMENT FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
*Commercial Paper--continued
FOOD & BEVERAGE--2.9%
$ 16,000,000 Coca Cola Co., 5.87%, 11/6/1995 $ 15,587,796
13,000,000 Sara Lee Corp., 6.00%, 8/9/1995 12,850,500
--------------
Total 28,438,296
--------------
TRANSPORTATION--2.0%
20,000,000 Norfolk Southern Corp., 6.25%, 8/7/1995 19,767,360
--------------
Total Commercial Paper 267,051,875
--------------
Notes--6.9%
37,000,000 Boatmen's National Bank of St. Louis, 6.25%-6.26%,
6/14/1995-8/16/1995 37,000,000
30,000,000 First Union National Bank, 6.09%, 5/13/1996 30,000,000
--------------
Total Notes 67,000,000
--------------
**Repurchase Agreements--28.7%
204,217,513 Goldman, Sachs & Co., 6.10%, dated 5/31/1995, due 6/1/1995 204,217,513
75,000,000 Nomura Securities International, Inc., 6.10%, dated 5/31/1995,
due 6/1/1995 75,000,000
--------------
Total Repurchase Agreements 279,217,513
--------------
Total Investments, at amortized cost and value $ 974,258,017+
--------------
</TABLE>
* Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
** The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
+ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($974,284,317) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE PRIME CASH MANAGEMENT FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in repurchase agreements $ 279,217,513
Investments in securities 695,040,504
--------------
Total investments in securities, at amortized cost (identified and tax cost
$974,258,017) $ 974,258,017
Income receivable 4,545,338
Deferred expenses 226,555
--------------
Total assets 979,029,910
Liabilities:
Income distribution payable 4,613,894
Accrued expenses 131,699
--------------
Total liabilities 4,745,593
--------------
Net Assets for 974,284,317 shares outstanding $ 974,284,317
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Net Asset Value Per Share ($974,284,317 / 974,284,317 shares outstanding) $1.00
--------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE PRIME CASH MANAGEMENT FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
Investment Income:
Interest $ 25,594,387
Expenses:
Investment advisory fee $ 1,269,504
Administrative personnel and services fee 383,575
Custodian fees 61,015
Transfer agent and dividend disbursing agent fees and expenses 13,222
Trustees' fees 10,980
Auditing fees 4,858
Legal fees 12,447
Portfolio accounting fees 35,664
Share registration costs 52,523
Printing and postage 6,714
Insurance premiums 6,734
Miscellaneous 7,426
------------
Total expenses 1,864,662
Deduct--
Waiver of investment advisory fee $ 930,969
Waiver of administrative personnel and services fee 171,991
----------
Total waivers 1,102,960
------------
Net expenses 761,702
-------------
Net investment income $ 24,832,685
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE PRIME CASH MANAGEMENT FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended
May 31, 1995 Period Ended
(unaudited) November 30, 1994*
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 24,832,685 $ 25,109,913
------------------- --------------------
Distributions to Shareholders--
Distributions from net investment income (24,832,685) (25,109,913)
------------------- --------------------
Share Transactions--
Proceeds from sale of shares 827,480,221 1,747,708,257
Cost of shares redeemed (669,203,629) (931,700,532)
------------------- --------------------
Change in net assets resulting from share transactions 158,276,592 816,007,725
------------------- --------------------
Change in net assets 158,276,592 816,007,725
Net Assets:
Beginning of period 816,007,725 --
------------------- --------------------
End of period $ 974,284,317 $ 816,007,725
------------------- --------------------
</TABLE>
* For the period from December 2, 1993 (date of initial public investment) to
November 30, 1994.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE PRIME CASH MANAGEMENT FUND FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months Ended Period Ended
May 31, 1995 November 30,
(unaudited) 1994(a)
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.04
Less distributions
Distributions from net investment income (0.03) (0.04)
------- -------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00
------- -------
Total return (b) 2.95% 4.02%
Ratios to average net assets
Expenses 0.18%(c) 0.18%(c)
Net investment income 5.87%(c) 4.31%(c)
Expense waiver/reimbursement (d) 0.26%(c) 0.28%(c)
Supplemental data
Net assets, end of period (000 omitted) $974,284 $816,008
</TABLE>
(a) Reflects operations for the period from December 2, 1993 (date of initial
public investment) to November 30, 1994.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE PRIME CASH MANAGEMENT FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
(1) ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein present only those of Biltmore Prime Cash Management Fund (the
"Fund"). The financial statements of the other 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.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require a 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 Fund 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's 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 Fund 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").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE PRIME CASH MANAGEMENT FUND
(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) for each
class of shares. At May 31, 1995, capital paid in aggregated $974,284,317.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Period
Six Months Ended
Ended November 30,
May 31, 1995 1994*
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Shares sold 827,480,221 1,747,708,257
Shares redeemed (669,203,629) (931,700,532)
--------------- ---------------
Net change resulting from Institutional Share transactions 158,276,592 816,007,725
--------------- ---------------
</TABLE>
* For the period from December 2, 1993 (date of initial public investment) to
November 30, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Fund's
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to .30 of 1% of the Fund's average daily
net assets. The Adviser may voluntarily choose to waive any portion of its fee.
The Adviser can modify or terminate the voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust and The Biltmore Municipal
Funds for the period. FAS may voluntarily choose to waive a portion of its fee.
TRANSFER AND DIVIDEND DISBURSING AGENT, PORTFOLIO ACCOUNTING AND CUSTODIAN
FEES--Federated Services Company ("FServ") serves as transfer and dividend
disbursing agent for the Fund. The fee is based on the size, type, and number of
accounts and transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A., is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average net assets
for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses ($35,156) were initially borne
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following April 3, 1993 (the date the Fund became
effective). For the six months ended May 31, 1995, the Fund paid $3,516 pursuant
to this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by
any bank, and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other governmental agency.
Investment in mutual funds involves risk, including possible loss of principal.
Although money market funds seek to maintain a stable net asset value of $1.00
per share, there is no assurance that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297805
G00236-01-IS (7/95)
SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE QUANTITATIVE
EQUITY FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of the Biltmore
Quantitative Equity Fund for the six-month period ended May 31, 1995. As always,
the report begins with a brief commentary on the stock market from the Fund's
portfolio manager. Following the commentary are a complete listing of the Fund's
portfolio of investments and its financial statements.
On your behalf, the Biltmore Quantitative Equity Fund pursues growth and income
by investing in a portfolio of blue-chip stocks issued by some of America's
largest, best-known companies. At the end of the period, the Fund's portfolio
included such names as General Electric, Chrysler, Ford, Goodyear, Bristol
Myers, PepsiCo, Exxon, Transamerica, Dow, duPont, Lilly, Federal Express, and
many more.
The Fund rewarded shareholders with very strong performance during the six-month
period. Dividends totaled $0.10 per share for the six-month reporting period. I
am also pleased to report that the Fund's net asset value increased
significantly from $9.60 on the first day of the period to $11.18 on May 31,
1995, the last day of the period, which helped it deliver total return figures
based on net asset value and maximum offering price of 17.68% and 12.41%,
respectively.* Total assets stood at $103 million on the last day of the
reporting period.
Thank you for selecting the Biltmore Quantitative Equity Fund to pursue your
long-term financial goals. We look forward to keeping you informed about your
investment, and we welcome your comments and suggestions.
Sincerely,
John W. McGonigle
President
July 14, 1995
*Performance quoted represents past performance. 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND
Evidence of the long-awaited slowdown in the U.S. economy continued to
accumulate during the past six months, suggesting that the Federal Reserve
Board's (the "Fed") soft landing remained on track. Despite a steady increase in
personal income, consumer outlays were restrained by rising debt levels and
higher interest rates. Capacity utilization rates remained high, at levels
frequently associated with pricing pressures. Yet, the producer price index, a
key inflation indicator, rose modestly during the period.
Several equities hit all-time highs during the period, sparked by excellent
corporate earnings, an encouraging inflation forecast and a powerful fixed
income rally. The Dow Jones Industrial Average eclipsed the 4000-point barrier
and the Standard & Poor's Composite Index of 500 Stocks reached the 500-point
level amid declining economic growth that convinced many market participants the
Fed would not raise interest rates in the near future. The Biltmore Quantitative
Equity Fund continued to concentrate on those sectors benefiting from the
dramatic expansion of emerging markets and new economies around the world.
During the six-month period between November 30, 1994 and May 31, 1995, the Fund
had total return figures of 17.68% based on net asset value and 12.41% based on
maximum offering price.*
On May 31, 1995, the Fund's largest holdings were U.S. Treasury Bills, General
Electric Co., Lockhead Corp., Sprint Corp., International Business Machines,
IBP, Inc., PepsiCo, Inc., Micron Technology, Inc., Ameritech Corp., and Philip
Morris Cos., Inc. At May 31, 1995 the Fund had net assets of $103 million and a
net asset value of $11.18 per share, and the Fund's 30-day SEC yield was 1.75%
based on net asset value and 1.67% based on the maximum offering price.*
*Performance quoted represents past performance. 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.
BILTMORE QUANTITATIVE EQUITY FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--95.2%
CAPITAL GOODS--5.4%
9,400 Briggs & Stratton Corp. $ 333,700
22,939 Cummins Engine, Inc. 1,043,724
16,400 Eaton Corp. 1,002,450
49,842 General Electric Co. 2,890,836
5,800 Parker Hannifin Corp. 331,325
--------------
Total 5,602,035
--------------
CONSUMER DURABLES--3.9%
41,504 Chrysler Corp. 1,810,612
22,226 Ford Motor Co. 650,110
5,286 Goodyear Tire and Rubber Co. 223,333
13,000 Leggett & Platt, Inc. 542,750
18,800 Timken Co. 791,950
--------------
Total 4,018,755
--------------
CONSUMER NON-DURABLES--26.6%
29,466 American Stores Co. 769,799
41,850 Archer-Daniels-Midland Co. 774,225
27,281 Banta Corp. 913,914
35,100 Baxter International, Inc. 1,224,112
21,200 Becton, Dickinson & Co. 1,219,000
54,075 Bergen Brunswig Corp., Class A 1,243,725
21,200 Bristol-Myers Squibb Co. 1,407,150
10,000 Capital Cities/ABC, Inc. 965,000
50,000 Circuit City Stores, Inc. 1,375,000
59,801 IBP, Inc. 2,242,537
19,257 Johnson & Johnson 1,275,776
6,300 Lilly, (Eli) & Co. 470,137
8,750 Mattel, Inc. 218,750
51,400 Mylan Laboratories 1,471,325
34,340 Penney (J.C.) Co., Inc. 1,618,272
43,140 PepsiCo, Inc. 2,113,860
28,319 Philip Morris Cos., Inc. 2,063,747
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
CONSUMER NON-DURABLES--CONTINUED
13,300 Procter & Gamble Co. $ 955,937
54,100 Rite-Aid Corp. 1,284,875
25,000 *Safeway, Inc. 912,500
17,935 Schering-Plough Corp. 1,412,381
6,000 Temple-Inland, Inc. 259,500
5,758 Unilever N.V., ADR 732,706
9,629 V.F. Corp. 512,744
--------------
Total 27,436,972
--------------
ENERGY--9.3%
12,460 Amoco Corp. 851,953
23,000 British Petroleum Company, PLC., ADR 1,963,625
40,800 Coastal Corp. 1,280,100
21,145 Exxon Corp. 1,509,224
14,608 Mobil Corp. 1,466,278
7,700 Royal Dutch Petroleum Co., ADR 975,975
43,706 Williams Cos., Inc. 1,486,004
--------------
Total 9,533,159
--------------
FINANCE--11.1%
33,000 Bank of New York Co., Inc. 1,344,750
29,000 Chase Manhattan Corp. 1,341,250
20,400 CIGNA Corp. 1,524,900
25,000 Citicorp 1,337,500
19,000 MBIA, Inc. 1,199,375
11,800 NationsBank Corp. 668,175
51,258 Southtrust Corp. 1,095,640
17,800 Transamerica Corp. 1,063,550
15,000 Travelers Group, Inc. 633,750
29,476 USLife Corp. 1,186,409
--------------
Total 11,395,299
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
MATERIALS & SERVICES--10.4%
15,500 Champion International Corp. $ 718,813
20,000 Dow Chemical Co. 1,467,500
17,300 du Pont (E.I.) de Nemours & Co., Inc. 1,174,238
23,977 Ennis Business Forms, Inc. 317,695
8,700 Georgia-Pacific Corp. 676,425
25,500 Marriot International, Inc. 863,813
27,500 Newell Co. 684,063
18,600 Olin Corp. 1,004,400
29,478 PHH Corp. 1,238,076
4,800 Premark International, Inc. 239,400
10,700 Rohm & Haas Co. 629,962
29,500 Union Carbide Corp. 862,875
18,000 Weyerhaeuser Co. 789,750
--------------
Total 10,667,010
--------------
TECHNOLOGY--16.1%
24,700 *Advanced Micro Devices, Inc. 812,013
12,000 Avnet, Inc. 546,000
49,559 Comdisco, Inc. 1,486,770
18,478 Computer Associates International, Inc. 1,210,309
24,200 International Business Machines 2,256,650
41,905 Lockheed Corp. 2,493,348
48,000 Micron Technology, Inc. 2,142,000
41,700 National Medical Enterprises 693,262
68,004 Sprint Corp. 2,278,134
39,700 *Sun Microsystems, Inc. 1,786,500
20,000 Tandy Corp. 935,000
--------------
Total 16,639,986
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
TRANSPORTATION--1.6%
4,700 CSX Corp. $ 358,375
4,059 *Federal Express Corp. 243,033
12,272 GATX Corp. 520,026
7,800 Norfolk Southern Corp. 534,300
1,880 *Strategic SEC Corp. 23,735
--------------
Total 1,679,469
--------------
UTILITIES--10.8%
47,671 Ameritech Corp. 2,115,401
28,000 BellSouth Corp. 1,718,500
42,700 Comsat Corp. 832,650
58,338 DQE 1,429,281
11,705 Duke Power Co. 488,684
33,865 General Public Utilities Corp. 1,015,950
8,835 New England Electric System 304,807
32,500 Pacific Telesis Group 869,375
37,193 *SBC Communications, Inc. 1,673,685
28,508 Scana Corp. 634,303
--------------
Total 11,082,636
--------------
Total Common Stocks (identified cost, $85,884,198) 98,055,321
--------------
U. S. Treasury Obligation--4.3%
$ 4,475,000 U.S. Treasury Bill, 6/15/1995 (at amortized cost) 4,465,173
--------------
**Repurchase Agreement--1.0%
985,820 Daiwa Securities America, Inc., 6.125%, dated 5/31/1995,
due 6/1/1995 (at amortized cost) 985,820
--------------
Total investments (identified cost, $91,335,191) $ 103,506,314+
--------------
</TABLE>
* Non-income producing securities.
** The repurchase agreement is fully collateralized by U.S. Treasury obligations
based on market prices at the date of the portfolio.
The cost of investments for federal tax purposes amounts to $91,335,191. The
net unrealized appreciation of investments on a federal tax basis amounts to
$12,171,123, which is comprised of $13,886,307 appreciation and $1,715,184
depreciation at May 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($103,036,198) at
May 31, 1995.
The following abbreviation is used in this portfolio:
ADR--American Depository Receipts
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at value (identified and tax cost $91,335,191) $ 103,506,314
Cash 83,725
Income receivable 258,877
Receivable for investments sold 1,388,534
Receivable for shares sold 83,129
Deferred expenses 25,228
--------------
Total assets 105,345,807
Liabilities:
Payable for investments purchased $ 2,092,484
Payable for shares redeemed 77,750
Accrued expenses 139,375
------------
Total liabilities 2,309,609
--------------
Net Assets for 9,218,455 shares outstanding $ 103,036,198
--------------
Net Assets Consist of:
Paid in capital $ 92,074,890
Net unrealized appreciation of investments (including unrealized appreciation on future
contracts of $255,910) 12,427,033
Accumulated net realized loss on investments and future contracts (1,818,238)
Undistributed net investment income 352,513
--------------
Total Net Assets $ 103,036,198
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
($103,036,198 / 9,218,455 shares outstanding) $11.18
--------------
Offering Price Per Share: (100/95.50 of $11.18)* $11.71
--------------
</TABLE>
*See 'What Shares Cost' in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 140,658
Dividends 1,333,004
-------------
Total income 1,473,662
Expenses:
Investment advisory fee $ 334,070
Administrative personnel and services fee 43,259
Custodian fees 9,545
Transfer agent and dividend disbursing agent fees and expenses 15,593
Trustees' fees 1,569
Auditing fees 6,927
Legal fees 4,083
Portfolio accounting fees 19,476
Share registration costs 10,776
Printing and postage 10,263
Insurance premiums 2,777
Miscellaneous 4,588
----------
Total expenses 462,926
Deduct--Waiver of investment advisory fee 47,724
----------
Net expenses 415,202
-------------
Net investment income 1,058,460
-------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments and future contracts 532,202
Net change in unrealized appreciation on investments and future contracts 14,115,444
-------------
Net realized and unrealized gain on investments and future contracts 14,647,646
-------------
Change in net assets resulting from operations $ 15,706,106
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended
May 31, 1995 Period Ended
(unaudited) November 30, 1994*
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 1,058,460 $ 1,151,854
Net realized gain (loss) on investments and future contracts
($532,202 net gain and $2,350,440 net loss, respectively, as
computed for federal tax purposes) 532,202 (2,350,440)
Net change in unrealized appreciation (depreciation) on invest-
ments and future contracts 14,115,444 (1,688,411)
--------------- ---------------------
Change in net assets resulting from operations 15,706,106 (2,886,997)
--------------- ---------------------
Distributions to Shareholders--
Distributions from net investment income (969,998) (887,803)
--------------- ---------------------
Share Transactions--
Proceeds from sale of shares 8,975,861 104,320,677
Net asset value of shares issued to shareholders in payment of
distributions declared 940,353 879,725
Cost of shares redeemed (13,595,049) (9,446,677)
--------------- ---------------------
Change in net assets resulting from share transactions (3,678,835) 95,753,725
--------------- ---------------------
Change in net assets 11,057,273 91,978,925
Net Assets:
Beginning of period 91,978,925 0
--------------- ---------------------
End of period (including undistributed net investment income of
$352,513 and $264,051, respectively) $ 103,036,198 $ 91,978,925
--------------- ---------------------
</TABLE>
*For the period from March 28, 1994 (date of initial public investment) to
November 30, 1994.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended
May 31, 1995 Period Ended
(unaudited) November 30, 1994*
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.60 $ 10.00
Income from investment operations
Net investment income 0.11 0.12
Net realized and unrealized gain (loss) on investments and
future contracts 1.57 (0.43)
------- -------
Total from investment operations 1.68 (0.31)
Less distributions
Distributions from net investment income (0.10) (0.09)
------- -------
NET ASSET VALUE, END OF PERIOD $ 11.18 $ 9.60
------- -------
Total return (a) 17.68% (3.08)%
Ratios to average net assets
Expenses 0.87%(b) 0.90%(b)
Net investment income 2.22%(b) 1.83%(b)
Expense waiver/reimbursement (c) 0.10%(b) 0.10%(b)
Supplemental data
Net assets, end of period (000 omitted) $103,036 $91,979
Portfolio turnover 26% 64%
</TABLE>
* Reflects operations for the period from March 28, 1994 (date of initial
public investment) to November 30, 1994.
(a) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(b) Computed on an annualized basis.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
(1) ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein present only those of Biltmore Quantitative Equity Fund (the
"Fund"). The financial statements of the other 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.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Listed equity securities and future contracts are
valued at the last sale price reported on national securities exchanges.
Unlisted securities and short-term securities are generally valued at the
prices provided by an independent pricing service. Short-term securities
with remaining maturities of sixty days or less at the time of purchase may
be valued at amortized cost, which approximates fair market value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require a 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 Fund 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees").
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
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").
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
FUTURES CONTRACTS--Upon entering into a financial futures contract with a
broker, the Fund is required to deposit in a segregated account an amount
("initial margin") of cash or U.S. Government securities equal to a
percentage of the contract value. The Fund agrees to receive from or to pay
the broker an
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND
amount of cash equal to a specific dollar amount times the difference
between the closing value and the price at which the contract was made. On
a daily basis, the value of the financial futures contract is determined
and any difference between such value and the original futures contract
value is reflected in the "daily variation margin" account. Daily variation
margin adjustments, arising from this "marking to market" process, are
recorded by the Fund as unrealized gains or losses.
The Fund may decide to close its position on a contract at any time prior
to the contract's expiration. When a contract is closed, the Fund
recognizes a realized gain or loss. Risks of entering into futures
contracts include the possibility that a change in the value of the
contract may not correlate with changes in the value of the underlying
securities. For the period ended May 31, 1995, the Fund had a realized gain
of $11,283 on futures contracts.
At May 31, 1995, the Fund had outstanding futures contracts as set out
below:
<TABLE>
<CAPTION>
Unrealized
Expiration Contracts to Appreciation
Date Deliver/Receive Position (Depreciation)
-------------------------------------------------------
<S> <C> <C> <C>
June 1995 17 Long $255,910
</TABLE>
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>
Six Months
Ended Period Ended
May 31, 1995 November 30, 1994*
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 866,201 10,458,666
Shares issued to shareholders in payment of distributions
declared 94,902 89,773
Shares redeemed (1,324,757) (966,330)
--------------- ---------------------
Net change resulting from share transactions (363,654) 9,582,109
--------------- ---------------------
</TABLE>
*For the period from March 28, 1994 to November 30, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Fund's
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to .70 of 1% of the Fund's average daily
net assets.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
SUB-ADVISORY FEE--The adviser has entered into a sub-advisory agreement with
Twin Capital (the "Sub-Adviser"). Twin Capital furnishes certain investment
advisory services to the Adviser, including investment research, quantitative
analysis, statistical and other factual information, and recommendations based
on Twin Capital's analysis, and assists the Adviser in identifying securities
for the potential purchase and/ or sale. Twin Capital is entitled to receive an
annual fee of $55,000. Twin Capital may elect to waive some or all of its fee.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE QUANTITATIVE EQUITY FUND
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust and The Biltmore Municipal
Funds for the period. FAS may voluntarily choose to waive a portion of its fee.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with FAS, the Fund will pay FAS up to .25 of 1% of average net assets of the
Fund for the period. This fee is to obtain certain services for shareholders and
to maintain shareholder accounts. For the six months ended May 3l, 1995, the
Fund did not incur a shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES, PORTFOLIO ACCOUNTING
AND CUSTODIAN FEES--Federated Services Company ("FServ") serves as transfer and
dividend disbursing agent for the Fund. This fee is based on the size, type, and
number of accounts and transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A. is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average net assets
for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses ($34,484) were initially borne
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following January 18, 1994 (the date the Fund became
effective). For the six months ended May 31, 1995, the Fund paid $1,833,
pursuant to this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the six
months ended
May 31, 1995, were as follows:
<TABLE>
<S> <C>
Purchases $ 25,268,421
-------------
Sales $ 23,880,840
-------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other governmental
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 Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297813
G00277-01 (7/95)
SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE SHORT-TERM
FIXED INCOME FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of the Biltmore
Short-Term Fixed Income Fund for the six-month period ended May 31, 1995. As
always, the report begins with a brief commentary on the bond market from the
Fund's portfolio manager. Following the commentary are a complete listing of the
Fund's portfolio of investments and its financial statements.
On your behalf, the Biltmore Short-Term Fixed Income Fund pursues a high level
of current income from a diversified portfolio of short-term corporate and
government bonds.
The Fund rewarded shareholders with dividends totaling $0.25 per share over the
six-month reporting period. I am also pleased to report that the Fund's net
asset value increased from $9.58 on the first day of the period to $9.84 on May
31, 1995, the last day of the period. Total assets stood at $142.3 million on
the last day of the reporting period.
Thank you for selecting the Biltmore Short-Term Fixed Income Fund as a
relatively conservative way to pursue investment income. We welcome your
comments and suggestions.
Sincerely,
John W. McGonigle
President
July 14, 1995
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SHORT-TERM FIXED INCOME FUND
The bond market rally that began in November gained momentum during the first
half of 1995 amid increasing signs of a slowing economy. Interest rates declined
across all but the shortest maturities as the fixed income markets posted their
strongest gains in four years. From November 30, 1994 to May 31, 1995, the Fund
had total return figures of 5.36% based on net asset value and 2.68% based on
the maximum offering price.*
Longer rates declined more than shorter rates, reversing the trend toward a
flatter yield curve that had dominated the bond market for the previous two
years. The Fund's portfolio manager generally maintained a position in line with
the targeted average maturity of 1-1/2 years.
The Fund had net assets of $142.3 million and a net asset value of $9.84 on May
31, 1995. The 30-day SEC yield was 5.97% based on net aset value and 5.82% based
on the maximum offering price.* The Fund ended the period with an average
duration of 1.3 years.
*Performance quoted represents past performance. 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Asset Backed Securities--2.4%
$ 850,366 CIT Group Securitization, Series 1993-1, 4.70%, 6/15/2018 $ 834,150
707,737 Ford Credit Grantor Trust, Series 1993-A, 4.85%, 1/15/1998 700,879
244,365 GMAC 1993-A, Grantor Trust, 4.15%, 3/15/1998 241,537
1,576,023 GMAC 1993-B, Grantor Trust, 4.00%, 9/15/1998 1,547,891
65,717 Shawmut National Grantor Trust, Series 1992-A, 5.55%, 11/15/1997 65,553
--------------
Total Asset Backed Securities (identified cost, $3,448,653) 3,390,010
--------------
Collateralized Mortgage Obligations--0.7%
946,891 Household Finance Corp., Series 1992A3, 5.80%, 4/20/2007
(identified cost, $957,847) 941,267
--------------
Corporate Bonds--16.5%
AEROSPACE--0.7%
1,000,000 Boeing Co., 8.375%, 3/1/1996 1,015,050
--------------
BANKING--3.6%
2,500,000 International American Development Bank, 9.50%, 10/15/1997 2,676,175
2,500,000 NationsBank Corp., 5.375%, 12/1/1995 2,489,225
--------------
Total 5,165,400
--------------
FINANCE--7.3%
1,500,000 Beneficial Corp., 9.15%, 7/31/1995 1,506,705
500,000 General Electric Capital Corp., 7.96%, 2/2/1998 518,665
2,000,000 General Electric Capital Corp., 8.75%, 11/26/1996 2,070,180
1,500,000 IBM Credit Corp., 5.00%, 5/10/1996 1,482,405
785,000 ITT Financial Corp., 5.00%, 8/15/1995 782,849
4,000,000 TransAmerica Financial Corp., 6.75%, 8/15/1997 4,030,320
--------------
Total 10,391,124
--------------
FINANCIAL SERVICES--2.5%
2,500,000 Merrill Lynch & Co., Inc., 5.00%, 12/15/1996 2,452,225
1,045,000 Merrill Lynch & Co., Inc., 5.50%, 7/28/1995 1,043,694
--------------
Total 3,495,919
--------------
FOOD & BEVERAGE--1.7%
1,500,000 PepsiCo, Inc., 4.60%, 6/30/1996 1,475,670
1,000,000 PepsiCo, Inc., 5.00%, 2/24/1997 979,810
--------------
Total 2,455,480
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Corporate Bonds--continued
OIL--0.7%
$ 1,000,000 Shell Oil Co., 7.70%, 2/1/1996 $ 1,009,150
--------------
Total Corporate Bonds (identified cost, $23,561,650) 23,532,123
--------------
Foreign Municipal Government Bond--2.9%
4,000,000 Ontario Province, Canada, 8.25%, 4/8/1996 (identified cost, $4,133,800) 4,064,040
--------------
U.S. Government Agencies--28.1%
FEDERAL HOME LOAN BANK--24.7%
2,000,000 5.10%, 7/8/1996 1,973,900
13,000,000 6.95%, 11/8/1996 13,171,600
3,500,000 7.15%, 11/21/1996 3,557,120
2,000,000 7.70%, 12/16/1996 2,048,440
3,000,000 7.75%, 2/26/1997 3,077,070
1,000,000 7.81%, 7/17/1996 1,018,590
10,000,000 7.915%, 1/17/1997 10,284,400
--------------
Total 35,131,120
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--3.4%
1,750,000 6.27%, 4/3/1996 1,754,900
3,000,000 6.84%, 10/3/1997 3,048,930
--------------
Total 4,803,830
--------------
Total U.S. Government Agencies (identified cost, $39,207,761) 39,934,950
--------------
U.S. Treasury Obligations--38.9%
U.S. TREASURY NOTES--38.9%
2,555,000 4.25%, 11/30/1995 2,535,045
4,365,000 4.375%, 11/15/1996 4,275,648
5,500,000 4.375%, 8/15/1996 5,407,160
3,050,000 5.125%, 3/31/1998 2,986,133
1,000,000 6.125%, 5/15/1998 1,005,160
750,000 6.50%, 4/30/1997 758,558
10,650,000 6.50%, 5/15/1997 10,773,114
5,000,000 6.50%, 8/15/1997 5,062,500
5,000,000 6.625%, 3/31/1997 5,066,400
500,000 6.75%, 2/28/1997 507,345
1,000,000 6.875%, 2/28/1997 1,016,560
8,000,000 7.50%, 1/31/1997 8,206,240
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
U.S. Treasury Obligations--continued
U.S. TREASURY NOTES--CONTINUED
$ 1,000,000 7.50%, 12/31/1996 $ 1,024,690
3,000,000 7.875%, 7/15/1996 3,063,750
1,000,000 7.875%, 7/31/1996 1,021,870
2,500,000 8.75%, 10/15/1997 2,654,675
--------------
Total U.S. Treasury Obligations (identified cost, $54,866,176) 55,364,848
--------------
*Variable Rate Instruments--2.4%
3,140,000 General Electric Capital Corp., 7.98%, 12/15/2007 (Putable
12/15/1997) (identified cost, $3,348,590) 3,413,023
--------------
**Repurchase Agreements--6.7%
9,601,632 Daiwa Securities America, Inc. 6.125%, dated 5/31/1995, due 6/1/1995
(at amortized cost) 9,601,632
--------------
Total Investments (identified cost $139,126,109) $ 140,241,893+
--------------
</TABLE>
* Denotes variable rate securities which show current rate and next demand
date.
** The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
+ The cost of investments for federal tax purposes amounts to $139,126,109. The
unrealized appreciation of investments on a federal tax basis amounts to
$1,115,784, which is comprised of $1,626,723 appreciation and $510,939
depreciation at May 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($142,338,296) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at amortized cost and value (identified and tax cost
$139,126,109) $ 140,241,893
Income receivable 1,937,311
Receivable for shares sold 364,272
Deferred expenses 32,581
--------------
Total assets 142,576,057
Liabilities:
Payable for shares redeemed $ 164,722
Accrued expenses 73,039
----------
Total liabilities 237,761
--------------
Net Assets for 14,461,774 shares outstanding $ 142,338,296
--------------
Net Assets Consists of:
Paid-in capital $ 144,764,526
Net unrealized appreciation of investments 1,115,784
Accumulated net realized loss on investments (4,075,275)
Undistributed net investment income 533,261
--------------
Total Net Assets $ 142,338,296
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
($142,338,296 / 14,461,774 shares outstanding) $9.84
--------------
Offering Price Per Share: (100/97.50 of $9.84)* $10.09
--------------
</TABLE>
*See 'What Shares Cost' in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND STATEMENT OF OPERATIONS
PERIOD ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 4,630,990
Expenses:
Investment advisory fee $ 407,562
Administrative personnel and services fee 66,847
Custodian fees 14,820
Transfer agent and dividend disbursing agent fees and expenses 16,300
Trustees' fees 3,658
Auditing fees 7,978
Legal fees 6,930
Portfolio accounting fees 23,379
Share registration costs 12,910
Printing and postage 8,159
Insurance premiums 3,307
Miscellaneous 6,147
----------
Total expenses 577,997
Deduct--Waiver of investment advisory fee 111,153
----------
Net expenses 466,844
------------
Net investment income 4,164,146
------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments (707,754)
Net change in unrealized appreciation of investments 4,262,548
------------
Net realized and unrealized gain on investments 3,554,794
------------
Change in net assets resulting from operations $ 7,718,940
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
May 31, 1995 Ended
(unaudited) November 30, 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 4,164,146 $ 6,859,182
Net realized loss on investments ($707,754 and $2,790,650 net
loss, respectively, as computed for federal tax purposes) (707,754) (2,862,364)
Net change in unrealized appreciation (depreciation) 4,262,548 (2,079,336)
--------------- --------------------
Change in net assets resulting from operations 7,718,940 1,917,482
--------------- --------------------
Distributions to Shareholders--
Distributions from net investment income (3,769,096) (6,884,557)
--------------- --------------------
Share Transactions--
Proceeds from sale of shares 14,619,256 37,631,676
Net asset value of shares issued to shareholders in payment of
distributions declared 3,743,189 6,862,521
Cost of shares redeemed (28,300,399) (45,659,892)
--------------- --------------------
Change in net assets resulting from share transactions (9,937,954) (1,165,695)
--------------- --------------------
Change in net assets (5,988,110) (6,132,770)
Net Assets:
Beginning of period 148,326,406 154,459,176
--------------- --------------------
End of period (including undistributed net investment income of
$533,261 and $138,211, respectively) $ 142,338,296 $ 148,326,406
--------------- --------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended
May 31, 1995 Year Ended November 30,
(unaudited) 1994 1993(a)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.58 $ 9.91 $ 10.00
Income from investment operations
Net investment income 0.28 0.45 0.27
Net realized and unrealized gain (loss)
on investments 0.23 (0.33) (0.10)
------- ------- -------
Total from investment operations 0.51 0.12 0.17
------- ------- -------
Less distributions
Distributions from net investment
income (0.25) (0.45) (0.26)
------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 9.84 $ 9.58 $ 9.91
------- ------- -------
Total return (b) 5.36% 1.27% 1.69%
Ratios to average net assets
Expenses 0.63%(c) 0.60%(c) 0.58%(c)
Net investment income 5.62%(c) 4.62%(c) 4.78%(c)
Expense waiver/reimbursement (d) 0.15%(c) 0.18%(c) 0.22%(c)
Supplemental data
Net assets, end of period (000 omitted) $142,338 $148,326 $154,459
Portfolio turnover 72% 151% 73%
</TABLE>
(a) Reflects operations for the period from May 10, 1993 (date of initial
public investment) to
November 30, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
(1) ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein present only those of Biltmore Short-Term Fixed Income Fund (the
"Fund"). The financial statements of the other 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.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--U.S. government securities are generally valued at
the bid prices as furnished by an independent pricing service. Listed
corporate bonds (and other fixed-income and asset backed securities),
unlisted securities (and other fixed-income and asset-backed securities
and/or private placements), and short-term securities are valued at the
prices provided by an independent pricing service. Short-term securities
with remaining maturities of sixty days or less at the time of purchase may
be valued at amortized cost, which approximates fair market value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require a custodian
bank to take possession, to have legally segregated in the Federal Reserve
Book Entry System, or to have segregated within the custodian's bank vault,
all securities held as collateral under repurchase agreement transactions.
Additionally, procedures have been established by the Fund 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's 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 counterparts to honor the
terms of the repurchase agreement. Accordingly, the Fund 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").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At November 30, 1994, the Fund, for federal tax purposes, had a capital
loss carryforward of $3,283,849 which will reduce the Fund's taxable income
arising from future net realized gain 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 Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforward will expire in 2001 ($493,199) and 2002 ($2,790,650).
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND
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 the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
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>
Six Months
Ended Year Ended
May 31, 1995 November 30, 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Shares sold 1,514,182 3,860,561
Shares issued to shareholders in payment of distributions declared 387,262 705,380
Shares redeemed (2,916,872) (4,674,812)
--------------- --------------------
Net change resulting from share transactions (1,015,428) (108,871)
--------------- --------------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Fund's
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to .55 of 1% of the Fund's average daily
net assets.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust and The Biltmore Municipal
Funds for the period. FAS may voluntarily choose to waive a portion of its fee.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with FAS, the Fund will pay FAS up to .25 of 1% of average net assets of the
Fund for the period. This fee is to obtain certain services for shareholders and
to maintain shareholder accounts. For the six months ended May 31, 1995, the
Fund did not incur a shareholder services fee.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT, PORTFOLIO ACCOUNTING AND CUSTODIAN
FEES--Federated Services Company ("FServ") serves as transfer and dividend
disbursing agent for the Fund. The fee is based on the size, type, and number of
accounts and transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A., is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average net assets
for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses ($34,484) were initially borne
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following April 3, 1993 ( the date the Fund became
effective). For the six months ended May 31, 1995, the Fund paid $3,448,
pursuant to this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SHORT-TERM FIXED INCOME FUND
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the six
months ended May 31, 1995, were as follows:
<TABLE>
<S> <C>
Purchases $ 100,507,573
--------------
Sales $ 114,020,270
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other governmental
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 Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297862
3061814 (7/95)
SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE
SPECIAL VALUES FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of the Biltmore
Special Values Fund for the six-month period ended May 31, 1995. As always, the
report begins with a brief commentary on the stock market from the Fund's
portfolio manager. Following the commentary are a complete listing of the Fund's
portfolio of investments and its financial statements.
On your behalf, the Biltmore Special Values Fund invests in a diversified
portfolio of small-company stocks to help your investment grow over the long
term. These stocks are selected especially for their potential to grow in value.
The Fund rewarded shareholders with very strong performance during the six-month
period. Dividends totaled $0.02 per share for the six-month reporting period,
while capital gains totaled $0.06 per share. I am also pleased to report that
the Fund's net asset value increased significantly from $9.75 on the first day
of the period to $11.16 on May 31, 1995, the last day of the period, which
helped it deliver total return figures based on net asset value and maximum
offering price of 15.37% and 10.17%, respectively.* Total assets stood at $20.9
million on the last day of the reporting period.
Thank you for selecting the Biltmore Special Values Fund to pursue your
long-term goals. We welcome your comments and suggestions.
Sincerely,
John W. McGonigle
President
July 14, 1995
* Performance quoted represents past performance. 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND
Evidence of the long-awaited slowdown in the U.S. economy continued to
accumulate during the past six months, suggesting that the Federal Reserve
Board's soft landing remained on track. Despite a steady increase in personal
income, consumer outlays were restrained by rising debt levels and higher
interest rates. Capacity utilization rates remained high, at levels frequently
associated with pricing pressures. Yet, the producer price index, a key
inflation indicator, rose modestly during the period. During the period between
November 30, 1994 and May 31, 1995, your Fund had total return figures of 15.37%
based on net asset value, and 10.17% based on the maximum offering price.*
The Fund's portfolio manager utilized an investment strategy that concentrated
on capital preservation by acquiring equities selling below their estimated
intrinsic value. On May 31, 1995, the Fund's largest holdings were Capital
Guaranty Corp., Mueller Industries, Inc., Triad Guaranty, Inc., Scotts Co.,
Boston Acoustics, Inc., Lawyers Title Corp., Potash Corp. Saskatchewan, Inc.,
Capsure Holdings Corp., Leucadia National Corp., and Lindsay Manufacturing Co.
On May 31, 1995, the Fund had net assets of $20.9 million, and a net asset value
of $11.16 per share.
*Performance quoted represents past performance. 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--92.4%
CAPITAL GOODS--4.3%
12,500 Joslyn Manufacturing Co. $ 325,000
13,000 *Lindsay Manufacturing Co. 409,500
26,000 UNR Industries, Inc. 170,625
-------------
Total 905,125
-------------
CONSUMER DURABLES--1.5%
6,500 Allen Organ Co., Class B 269,750
1,500 Gleason Corp. 32,625
-------------
Total 302,375
-------------
CONSUMER NON-DURABLES--14.4%
19,500 *American Media, Inc., Class A 112,125
10,000 *Carson, Pirie, Scott & Co. 167,500
16,000 *Charter Medical Corp. 274,000
1,400 *Consolidated Products, Inc. 19,950
35,000 *Cordiant PLC, ADR 175,000
15,000 *Craig Corp. 148,125
14,700 *Designs, Inc. 128,625
20,000 Dimon, Inc. 345,000
2,500 *Fabric Centers of America, Inc. 50,625
11,600 Midwest Grain Products, Inc. 211,700
4,500 Plenum Publishing Corp. 146,250
3,100 Pulitzer Publishing Co. 132,138
5,000 Sbarro, Inc. 115,000
22,000 *Scotts Co., Class A 478,500
6,500 Velcro Industries NV 377,000
5,000 Walbro Corp. 100,000
1,000 Weyco Group, Inc. 36,000
-------------
Total 3,017,538
-------------
ENERGY--10.1%
12,000 *Alamco, Inc. 93,000
18,000 *Arethusa (Offshore) Ltd. 288,000
16,000 *Cliffs Drilling Co. 220,000
20,000 *Global Natural Resources, Inc. 220,000
10,000 *Hornbeck Offshore Services, Inc. 155,000
5,000 KCS Energy, Inc. 92,500
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
ENERGY--CONTINUED
45,000 *Marine Drilling Cos., Inc. $ 185,625
30,000 *Nabors Industries, Inc. 258,750
25,000 *Noble Drilling Corp. 184,375
8,000 *Oceaneering International, Inc. 78,000
23,000 *Pool Energy Services Co. 189,750
20,000 *Pride Petroleum Services, Inc. 160,000
-------------
Total 2,125,000
-------------
FINANCE--31.6%
9,700 *American Premier Group, Inc. 243,713
3,500 Berkley (W.R.) Corp. 128,625
30,000 Capital Guaranty Corp. 528,750
3,500 Capital Southwest Corp. 138,687
30,000 *Capsure Holdings Corp. 420,000
40,000 *Danielson Holding Co. 295,000
20,800 Equus II Inc. 288,600
13,500 Financial Securities Assurance Holdings, Ltd. 305,437
1,400 *Fund American Enterprises 97,300
6,000 Jefferies Group, Inc. 216,000
14,000 John Nuveen Co., Class A 330,750
8,000 *Jupiter National, Inc. 185,000
8,000 Legg Mason, Inc. 216,000
32,000 Lawyers Title Corp. 456,000
8,800 Leucadia National Corp. 413,600
12,000 N S Bancorp, Inc. 360,000
23,000 Piper Jaffray Cos., Inc. 336,375
8,000 Reliastar Financial Corp. 297,000
16,000 Security Connecticut Corp. 378,000
20,000 Stewart Information Services Corp. 370,000
27,000 *Triad Guaranty, Inc. 484,312
26,000 Unico American Corp. 125,125
-------------
Total 6,614,274
-------------
MATERIAL & SERVICES--23.6%
3,500 *Alltrista Corp. 76,125
8,000 Cleveland Cliffs, Inc. 311,000
10,000 Forest City Enterprises, Class A 368,750
300 Forest City Enterprises, Class B 11,175
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Common Stocks--continued
MATERIAL & SERVICES--CONTINUED
17,000 Furon Co. $ 374,000
25,000 Geodynamics Corp. 225,000
25,000 *Griffon Corp. 212,500
7,000 Lone Star Industries, Inc. 147,000
14,000 Medusa Corp. 336,000
24,500 Mellon Participating Mortgage Trust 70,438
11,000 *Mueller Industries, Inc. 503,250
9,000 Potash Corp. Saskatchewan, Inc. 430,875
10,000 *Prime Hospitality Corp. 97,500
7,000 Puerto Rican Cement, Inc. 215,250
25,000 *Rawlings Sporting Goods Co. 250,000
12,000 *Rexel, Inc. 100,500
9,500 Sealright Co., Inc. 168,625
6,000 Somerset Group, Inc. 81,000
60,000 *Tyler Corp. 217,500
10,000 *Union Switch & Signal, Inc. 155,625
12,000 *Valassis Communications, Inc. 196,500
12,000 *White River Corp. 390,000
-------------
Total 4,938,613
-------------
TECHNOLOGY--6.3%
13,500 *Astrosystems, Inc. 67,500
25,000 Boston Acoustics, Inc. 475,000
14,000 *Dynatech Corp. 252,000
30,000 *Esco Electronics Corp. 251,250
12,000 *Moore Products Co. 192,000
21,000 *Sparton Corp. 89,250
-------------
Total 1,327,000
-------------
TRANSPORTATION--0.6%
25,000 *OMI Corp. 134,375
-------------
Total Common Stocks (identified cost, $17,796,404) 19,364,300
-------------
Preferred Stocks--2.8%
CONSUMER NON-DURABLES--1.1%
25,000 *Craig Corp., Class A 221,875
-------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Preferred Stocks--continued
INDUSTRIAL SERVICES--1.3%
4,000 Cliffs Drilling Co. $ 110,000
20,000 *Sunshine Mining & Refining Co. 160,000
-------------
Total 270,000
-------------
REAL ESTATE--0.4%
1,800 Catellus Development Corp. 88,425
-------------
Total Preferred Stocks (identified cost, $659,897) 580,300
-------------
**Repurchase Agreement--4.0%
$ 832,493 Daiwa Securities America, Inc., 6.125%, dated 5/31/1995,
due 6/1/1995 (at amortized cost) 832,493
-------------
Total Investments (identified cost, $19,288,794) $ 20,777,093+
-------------
</TABLE>
* Non-income producing securities.
** The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
+ The cost for federal tax purposes amounts to $19,288,794. The net unrealized
appreciation of investments on a federal tax basis amounts to $1,488,299,
which is comprised of $2,258,288 appreciation and $769,989 depreciation at May
31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($20,948,786) at
May 31, 1995.
The following abbreviation is used in this portfolio:
ADR--American Depository Receipts
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at amortized cost and value
(identified and tax cost $19,288,794) $ 20,777,093
Income receivable 23,004
Receivable for investments sold 206,683
Receivable for shares sold 41,169
Deferred expenses 3,602
-------------
Total assets 21,051,551
Liabilities:
Payable for investments purchased $ 57,889
Payable for shares redeemed 25,944
Accrued expenses 18,932
---------
Total liabilities 102,765
-------------
Net Assets for 1,877,695 shares outstanding $ 20,948,786
-------------
Net Assets Consists of:
Paid in capital $ 18,814,638
Net unrealized appreciation of investments 1,488,299
Accumulated net realized gain on investments 559,669
Undistributed net investment income 86,180
-------------
Total Net Assets $ 20,948,786
-------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
($20,948,786 / 1,877,695 shares outstanding) $11.16
-------------
Offering Price Per Share: (100/95.50 of $11.16)* $11.69
-------------
</TABLE>
* See 'What Shares Cost' in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 17,206
Dividends 201,721
------------
Total income 218,927
Expenses:
Investment advisory fee $ 74,123
Administrative personnel and services fee 8,396
Custodian fees 1,853
Transfer agent and dividend disbursing agent fees and expenses 14,543
Trustees' fees 560
Auditing fees 8,102
Legal fees 1,610
Portfolio accounting fees 26,674
Share registration costs 6,564
Printing and postage 9,133
Insurance premiums 1,703
Miscellaneous 3,308
----------
Total expenses 156,569
Deduct--
Waiver of investment advisory fee 37,061
----------
Net expenses 119,508
------------
Net investment income 99,419
------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments 559,551
Net change in unrealized appreciation of investments 2,036,534
------------
Net realized and unrealized gain on investments 2,596,085
------------
Change in net assets resulting from operations $ 2,695,504
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
May 31, 1995 November 30,
(unaudited) 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 99,419 $ 92,287
Net realized gain on investments ($559,551 and $107,758 net gain,
respectively, as computed for federal tax purposes) 559,551 107,758
Net change in unrealized appreciation (depreciation) of invest-
ments 2,036,534 (511,222)
--------------- --------------------
Change in net assets resulting from operations 2,695,504 (311,177)
--------------- --------------------
Distributions to Shareholders--
Distributions from net investment income (28,749) (74,663)
Distributions from net realized gains (107,630) (333,979)
--------------- --------------------
Change in net assets resulting from distributions to share-
holders (136,379) (408,642)
--------------- --------------------
Share Transactions--
Proceeds from sale of shares 2,330,576 7,239,665
Net asset value of shares issued to shareholders in payment of
distributions declared 128,318 404,334
Cost of shares redeemed (1,500,127) (1,565,034)
--------------- --------------------
Change in net assets resulting from share transactions 958,767 6,078,965
--------------- --------------------
Change in net assets 3,517,892 5,359,146
Net Assets:
Beginning of period 17,430,894 12,071,748
--------------- --------------------
End of period (including undistributed net investment income of
$86,180 and $15,510, respectively) $ 20,948,786 $ 17,430,894
--------------- --------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months Ended Year Ended November
May 31, 1995 30,
(unaudited) 1994 1993(a)
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.75 $ 10.24 $ 10.00
Income from investment operations
Net investment income 0.06 0.06 (0.002)
Net realized and unrealized gain (loss) on investments 1.43 (0.22) 0.242
------- --------- -----------
Total from investment operations 1.49 (0.16) 0.24
------- --------- -----------
Less distributions
Distributions from net investment income (0.02) (0.05) --
Distributions from net realized gains (0.06) (0.28) --
------- --------- -----------
Total distributions (0.08) (0.33) --
------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 11.16 $ 9.75 $ 10.24
------- --------- -----------
Total return(b) 15.37% (1.61%) 2.40%
Ratios to average net assets
Expenses 1.29%(c) 1.13% 1.25%(c)
Net investment income 1.07%(c) 0.63% (0.03%)(c)
Expense waiver/reimbursement(d) 0.40%(c) 1.09% 1.79%(c)
Supplemental data
Net assets, end of period (000 omitted) $20,949 $17,431 $12,072
Portfolio turnover 21% 62% 68%
</TABLE>
(a) Reflects operations for the period from May 10, 1993 (date of initial
public investment) to
November 30, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
1. ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein present only those of Biltmore Special Values Fund (the "Fund").
The financial statements of the other 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.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on national securities exchanges. Unlisted securities and
short-term securities are generally valued at the price provided by an
independent pricing service. Short-term securities with remaining
maturities of sixty days or less at the time of purchase may be valued at
amortized cost, which approximates fair market value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require a 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 Fund 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's 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 Fund could receive less
than the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
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").
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE SPECIAL VALUES FUND
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>
Six Months
Ended Year Ended
May 31, 1995 November 30, 1994
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 224,315 726,898
Shares issued to shareholders in payment of distributions declared 13,394 40,250
Shares redeemed (148,069) (157,522)
--------------- ----------
Net change resulting from share transactions 89,640 609,626
--------------- ----------
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Fund's
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to .80 of 1% of the Fund's average daily
net assets. The Adviser may voluntarily choose to waive any portion of its fee.
The Adviser can modify or terminate this voluntary waiver at any time at its
sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust and The Biltmore Municipal
Funds for the period. FAS may voluntarily choose to waive a portion of its fee.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with FAS, the Fund will pay FAS up to .25 of 1% of average net assets of the
Fund for the period. This fee is to obtain certain services for shareholders and
to maintain the shareholder accounts. For the period ended May 31, 1995, the
Fund did not incur a shareholder services fee.
TRANSFER AND DIVIDEND DISBURSING AGENT, PORTFOLIO ACCOUNTING AND CUSTODIAN
FEES--Federated Services Company ("FServ") serves as transfer and dividend
disbursing agent for the Fund. The fee is based on the size, type, and number of
accounts and transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A. is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average net assets
for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses ($31,492) were initially borne
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following April 3, 1993 (the date the Fund became
effective). For the period ended May 31, 1995, the Fund paid $2,678 pursuant to
this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
5. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended May 31, 1995, were as follows:
<TABLE>
<S> <C>
Purchases $ 4,789,259
-------------
Sales $ 3,787,782
-------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other
governmental 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 Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297870
3061813 (7/95)
INSTITUTIONAL SHARES
SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE TAX-FREE
MONEY MARKET FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report of the Biltmore Tax-Free Money
Market Fund for the six-month period ended May 31, 1995. This report includes a
list of the Fund's investments and financial information.
During the six-month period, the Fund's portfolio of municipal money market
securities provided shareholders with federally tax-free dividends of $0.02 per
share. Of course, the Fund maintained a stable share value of $1.00.* The Fund's
assets stood at $140 million on May 31, 1995, the last day of the period.
Thank you for selecting the Biltmore Tax-Free Money Market Fund to put your
ready cash to work--every day. We will continue to keep you up to date on your
investment, and provide your account with the highest level of service.
Sincerely,
John W. McGonigle
President
July 14, 1995
* Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment in
the Fund is neither insured nor guaranteed by the U.S. government.
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--98.5%
ALABAMA--7.1%
$ 2,395,000 Alabama, HFA, Weekly VRDNs Revenue Refunding Bonds (SouthTrust
Bank of Alabama LOC) A-1 $ 2,395,000
780,000 Alabama, HFA, Weekly VRDNs Revenue Refunding Bonds (Series
D)/(SouthTrust Bank of Alabama LOC) VMIG1 780,000
6,320,000 Birmingham, AL, Weekly VRDNs GO UT Refunding Bonds (Series
1992-A)/(First Alabama Bank LOC) VMIG1 6,320,000
435,000 Tuscaloosa County, AL, Port Authority Daily and Weekly VRDNs
Revenue Refunding Bonds (Capstone Hotel Ltd.
Project)/(Series A)/(SouthTrust Bank of Alabama LOC) P-1 435,000
--------------
Total 9,930,000
--------------
ARKANSAS--2.9%
3,300,000 Arkansas Hospital Equipment Finance Authority, Weekly VRDNs
Revenue Bonds (Credit Suisse LOC) AA+ 3,300,000
700,000 Fayetteville, AR, Public Facility, Weekly VRDNs Revenue
Refunding Bonds (Charter Vista Hospital)/(Mitsubishi Bank Ltd.
LOC) VMIG1 700,000
--------------
Total 4,000,000
--------------
CONNECTICUT--1.4%
1,900,000 Connecticut State Economic Recovery Notes, Weekly VRDNs GO UT
Bonds (Series B)/(Industrial Bank of Japan SPA) VMIG1 1,900,000
--------------
DISTRICT OF COLUMBIA--0.5%
700,000 District of Columbia, Weekly VRDNs Revenue Bonds
(Catholic University)/(Series A)/(Sanwa Bank Ltd. LOC) VMIG1 700,000
--------------
FLORIDA--14.7%
5,000,000 Broward County, FL, HFA Weekly VRDNs Revenue Bonds (Welleby
Apartments Project)/(Security Pacific National
Bank LOC) Aa3 5,000,000
4,100,000 Collier County, FL, HFA, Weekly VRDNs Revenue Bonds (River Reach
Project)/(Morgan Guaranty LOC) VMIG1 4,100,000
1,800,000 Escambia County, FL, Health Facility Authority, IDR, Monthly
VRDNs Refunding Bonds (Florida Convalescent
Centers Project)/(Series A)/(Toronto Dominion Bank LOC) P-1 1,800,000
1,500,000 Martin County, FL, School District, 4.35% TANs, 6/30/1995 MIG1 1,500,517
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--continued
FLORIDA--CONTINUED
$ 2,000,000 Palm Beach County, FL, School District, 4.75% TANs,
9/13/1995 MIG1 $ 2,004,383
750,000 Polk County, FL, IDA, Monthly VRDNs Refunding Bonds (Florida
Convalescent Centers Project)/(Toronto Dominion Bank LOC) P-1 750,000
2,000,000 St. Lucie County, FL, 3.90% Revenue Refunding Bonds (Florida
Power & Light Co.), 9/22/1995 VMIG1 2,000,000
3,500,000 Southeast Volusia, FL, Hospital Revenue, Weekly VRDNs (Bert Fish
Medical Center Issue)/(SouthTrust Bank of
Alabama LOC) A-1 3,500,000
--------------
Total 20,654,900
--------------
GEORGIA--9.4%
3,000,000 Burke County, GA, Development Pollution Authority,
4.10%-4.15% Revenue Refunding Bonds (Olglethorpe Power
Corp. Project)/(Series A)/(Credit Suisse of NY LOC),
6/8/1995-7/7/1995 P-1 3,000,000
5,100,000 De Kalb Private Hospital Authority GA, Weekly VRDNs RANs
(Engleston Childrens' Hospital)/(Series B)/(Trust
Company Bank LOC) VMIG1 5,100,000
1,500,000 Georgia State, 6.75% GO UT Bonds (Series E), 12/1/1995 AAA 1,515,610
1,035,000 Macon Bibb County, GA, Urban Development Authority
Revenue, Weekly VRDNs Refunding Bonds (Hotel Investors
Project)/(NBD Bank LOC) A-1+ 1,035,000
1,500,000 Marietta, GA, HFA, 5.25% Revenue Bonds (Falls at Bells Ferry)/
(Guardian S&L LOC), 1/15/1996 VMIG1 1,500,000
1,000,000 Newton County, GA, IDA, Weekly VRDNs Refunding Bonds (John H.
Harland Co. Project)/(NationsBank of Georgia LOC) A-1 1,000,000
--------------
Total 13,150,610
--------------
ILLINOIS--10.4%
1,000,000 Chicago, IL, School Finance Authority, 7.75% GO UT Refunding
Bonds 6/1/1995, Prerefunded AAA 1,020,000
3,500,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
(Aurora Central Catholic High School)/(Northern Trust LOC) A-1+ 3,500,000
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--continued
ILLINOIS--CONTINUED
$ 1,000,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
Refunding Bonds (Catholic Charities Housing)/
(Series B)/(National Westminster LOC) VMIG1 $ 1,000,000
1,000,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
(Lake Forest Academy Project)/(Northern
Trust LOC) A-1+ 1,000,000
1,475,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
(Little City Foundation Special Facilities)/
(LaSalle National Bank LOC) A-1+ 1,475,000
2,000,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
(St. Ignatius College Prep.)/(Northern Trust LOC) A-1+ 2,000,000
1,625,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
(St. Paul's House Project)/(LaSalle National Bank LOC) A-1+ 1,625,000
3,000,000 Illinois State Toll Highway Authority Weekly VRDNs
Revenue Refunding Bonds (Series B)/(MBIA Insured)/
(Societe Generale LOC) VMIG1 3,000,000
--------------
Total 14,620,000
--------------
INDIANA--0.2%
300,000 Indianapolis, IN, Weekly VRDNs Revenue Refunding Bonds (Canal
Square Project)/(Societe Generale LOC) VMIG1 300,000
--------------
IOWA--0.4%
600,000 Indianola, IA, IDR, Monthly VRDNs (HY-VEE Foods)/ (Rabobank
Nederland LOC) A-l+ 600,000
--------------
KANSAS--1.9%
500,000 Burlington, KS, Pollution Control, 4.05% Revenue Refunding Bonds
(KC Power & Light Project)/(Series B)/(Deutsche Bank A.G. LOC),
7/20/1995 AAA 500,000
2,175,000 Topeka, KS, 4.50% GO UT Bonds (Series A), 6/1/1995 MIG1 2,175,000
--------------
Total 2,675,000
--------------
KENTUCKY--0.6%
900,000 Georgetown, KY, Educational Institution, Weekly VRDNs Revenue
Bonds (Georgetown College Project)/(PNC Bank of Kentucky LOC) VMIG1 900,000
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--continued
LOUISIANA--3.9%
$ 1,700,000 Calcasieu Parish, LA, Weekly VRDNs Revenue Bonds (Citgo
Petroleum Corp.)/(Westdeutsche Landesbk LOC) Aa1 $ 1,700,000
2,800,000 Lake Charles, LA, Harbor & Terminal District, Weekly VRDNs
Revenue Bonds (Citgo Petroleum Corp.)/
(Westdeutsche Landesbk LOC) P-1 2,800,000
1,000,000 Louisiana State Recovery District Sales Tax Revenue, Daily VRDNs
(FGIC lnsured)/(Swiss Bank SPA) VMIG1 1,000,000
--------------
Total 5,500,000
--------------
MARYLAND--4.3%
6,000,000 Maryland State Health and Higher Education Facility, Weekly
VRDNs Revenue Bonds (North Arundel Hospital)/(Series B)/ (Mellon
Bank LOC) VMIG1 6,000,000
--------------
MASSACHUSETTS--2.6%
600,000 Massachusetts State, Daily VRDNs GO UT Bonds (Series E)/ (ABN
AMRO Bank LOC) VMIG1 600,000
3,000,000 Massachusetts Municipal Wholesale Electric Co., Weekly VRDNs
Power Supply System Revenue Refunding Bonds (Series C)/(Canadian
Imperial Bank LOC) A-1+ 3,000,000
--------------
Total 3,600,000
--------------
MINNESOTA--1.5%
2,020,000 Minnesota State, 6.60% GO UT Refunding Bonds, 8/1/1995 Aa1 2,028,347
--------------
MISSOURI--0.7%
1,000,000 Kansas City, MO, IDA, Weekly VRDNs (Mid America Health
Services)/(Mellon Bank LOC) A-1 1,000,000
--------------
NORTH CAROLINA--4.6%
2,500,000 North Carolina Eastern Municipal Power, 4.15% Revenue Bonds
(Series B)/(UBS & Morgan Guaranty LOC), 6/8/1995 A-1+ 2,500,000
2,000,000 North Carolina Eastern Municipal Power, 7.75% Revenue Refunding
Bonds (Series A), 1/1/1996, Prerefunded Aaa 2,098,153
1,795,000 Wake County, NC, 4.20% GO UT Refunding Bonds, 4/1/1996 AAA 1,795,692
--------------
Total 6,393,845
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--continued
OHIO--0.70%
$ 1,000,000 Centerville, OH, Healthcare Revenue, Weekly VRDNs
(Bethany Lutheran Village Project)/(PNC Bank of
Ohio LOC) VMIG1 $ 1,000,000
--------------
PENNSYLVANIA--6.1%
3,600,000 Allegheny County, PA, Port Authority, 4.10% GANs
(PNC Bank LOC), 7/3/1995 MIG1 3,600,017
1,000,000 Pennsylvania State University, 5.50% GO Bonds (University
Project Notes)/(Series A), 12/21/1995 MIG1 1,002,114
2,000,000 Philadelphia, PA, 4.75% GO UT Bonds RANs and TANs (Series
A)/(Canadian Imperial Bank LOC), 6/15/1995 MIG1 2,000,628
2,000,000 Sewickley Valley Hospital Authority, PA, 5 00% Revenue Refunding
Bonds (Series B)/(PNC Bank LOC), 12/15/1995 VMIG1 2,003,130
--------------
Total 8,605,889
--------------
TENNESSEE--11.6%
3,000,000 Metro Government Nashville & Davidson/County, TN, IDB, Weekly
VRDNs Revenue Bonds (Arbor Crest)/(Series B)/ (NationsBank of
GA) VMIG1 3,000,000
2,000,000 Metro Government Nashville & Davidson County, TN, Health and
Education Facilities Board, Weekly VRDNs Revenue Refunding Bonds
(West Meade Place Project)/(NationsBank of Georgia LOC) A-1 2,000,000
4,150,000 Metropolitan Nashville Airport, Weekly VRDNs Revenue Refunding
Bonds (FGIC Insured)/(Societe Generale LOC) VMIG1 4,150,000
7,100,000 Tennessee State, Weekly VRDNs GO UT BANs (Series B) VMIG1 7,100,000
--------------
Total 16,250,000
--------------
TEXAS--6.3%
1,800,000 Lower Neches Valley Authority, TX, 4.45% Revenue Refunding Bonds
(Chevron USA, Inc. Project), 8/15/1995 A-1+ 1,800,000
1,000,000 San Antonio, TX, 8.30% GO LT Refunding Bonds, 8/1/1995
(Prerefunded) AAA 1,007,000
3,000,000 Texas State, Weekly VRDNs (Series 144A) MIG1 3,000,000
3,000,000 Texas State, 5.00% RANs & TANs, 8/31/1995 MIG1 3,007,253
--------------
Total 8,814,253
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--continued
VIRGINIA--2.4%
$ 2,000,000 Harrisonburg, VA, HFA, 5.10% Revenue Bonds (Rolling Brook
Village Apartments)/(Guardian S&L LOC), 2/1/1996 VMIG1 $ 2,000,000
400,000 Peninsula Ports Authority, VA, Daily VRDNs Revenue Refunding
Bonds (Port Facility-Shell Oil Co.) AAA 400,000
1,000,000 Virginia State, Housing Development Authority, 4.25%
Revenue Bonds (Series D), 7/12/1995 VMIG1 1,000,000
--------------
Total 3,400,000
--------------
WASHINGTON--2.9%
4,000,000 Port Anacortes, WA, IDA, 4.10% Revenue Refunding Bonds (Texaco
Project), 6/15/1995 P-1 4,000,000
--------------
WISCONSIN--0.7%
1,000,000 West Allis Milwaukee, WI, School District, 5.00% GO UT Bonds,
RANs & TANs, 8/22/1995 MIG1 1,002,060
--------------
WYOMING--0.7%
1,000,000 **Uinta County, WY, PCR, 3.75% (Chevron USA, Inc.
Project), 6/15/1995 AA 1,000,000
--------------
Total Short-Term Municipal Securities 138,024,904
--------------
Regulated Investment Companies--0.8%
1,088,729 Fidelity Tax-Exempt Money Market Fund Instruments
Portfolio (at net asset value) 1,088,729
--------------
Total Investments, at amortized cost and value $ 139,113,633+
--------------
</TABLE>
+ Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings. Current credit ratings are unaudited.
** Denotes variable rate securities which show current rate and next demand
date.
Note: The categories of investments are shown as a percentage of net assets
($140,144,483) at May 31, 1995
The following acronyms are used throughout this portfolio:
BANs--Bond Anticipation Notes
FGIC--Financial Guaranty Insurance Co.
GANs--Grant Anticipation Notes
GO--General Obligation
HFA--Housing Finance Authority
IDA--Industrial Development Authority
IDB--Industrial Development Board
IDR--Industrial Development Revenue
LOC--Letter of Credit
LT--Limited Tax
MBIA--Municipal Bond Investors Assurance
PCR--Pollution Control Revenue
RANs--Revenue Anticipation Notes
SPA--Standby Purchase Agreement
TANs--Tax Anticipation Notes
UT--Unlimited Tax
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at amortized cost
(identified and tax cost $139,113,633) $ 139,113,633
Cash 10,483
Income receivable 1,510,526
Deferred expenses 11,322
--------------
Total assets 140,645,964
Liabilities:
Income distribution payable $ 476,134
Accrued expenses 25,347
----------
Total liabilities 501,481
--------------
Net Assets for 140,144,483 shares outstanding $ 140,144,483
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares: ($85,985,338 / 85,985,338 shares outstanding) $ 1.00
--------------
Investment Shares: ($54,159,145 / 54,159,145 shares outstanding) $1.00
--------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
Investment Income:
Interest $ 2,885,953
Expenses:
Investment advisory fee $ 362,900
Administrative personnel and services fee 65,800
Custodian fees 14,516
Transfer agent and dividend disbursing agent fees and expenses 22,778
Trustees' fees 5,101
Auditing fees 7,026
Legal fees 7,663
Portfolio accounting fees 24,480
Investment Shares--Distribution services fee 104,354
Share registration costs 22,947
Printing and postage 10,807
Insurance premiums 3,116
Miscellaneous 11,732
----------
Total expenses 663,220
Deduct--
Waiver of investment advisory fee $ 326,610
Waiver of distribution services fee 26,089
----------
Total waivers 352,699
----------
Net expenses 310,521
------------
Net investment income 2,575,432
------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments (150,000)
------------
Change in net assets resulting from operations $ 2,425,432
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
May 31, 1995 November 30,
(unaudited) 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 2,575,432 $ 2,894,643
Net realized loss on investments ($150,000 net loss and $0 respec-
tively, as computed for federal income tax purposes) (150,000) --
--------------- ---------------
Change in net assets resulting from operations 2,425,432 2,894,643
--------------- ---------------
Distributions to Shareholders--
Institutional Shares--Distributions from net investment income (1,699,245) (2,150,380)
Investment Shares--Distributions from net investment income (876,187) (744,263)
--------------- ---------------
Change in net assets resulting from distributions to shareholders (2,575,432) (2,894,643)
--------------- ---------------
Share Transactions--
Proceeds from sale of shares 204,543,699 263,497,759
Cost of shares redeemed (201,086,234) (210,055,320)
--------------- ---------------
Change in net assets resulting from share transactions 3,457,465 53,442,439
Capital Contributions 150,000 --
--------------- ---------------
Changes in net assets 3,457,465 53,442,439
Net Assets:
Beginning of period 136,687,018 83,244,579
--------------- ---------------
End of period $ 140,144,483 $ 136,687,018
--------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months Ended
May 31, 1995 Year Ended November 30,
(unaudited) 1994 1993 1992(a)
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.018 0.02 0.02 0.01
Net realized loss on investments (0.001) -- -- --
--------- --------- --------- -----------
Total from investment operations 0.017 0.02 0.02 0.01
Less distributions
Distributions from net investment income (0.018) (0.02) (0.02) (0.01)
--------- --------- --------- -----------
Capital contribution 0.001 -- -- --
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- -----------
Total Return(b) 1.84%(c) 2.42% 2.30% 1.49%
Ratios to Average Net Assets
Expenses 0.32%(d) 0.38% 0.29% 0.16%(d)
Net investment income 3.66%(d) 2.41% 2.28% 2.71%(d)
Expense waiver/reimbursement(e) 0.45%(d) 0.45% 0.60% 0.78%(d)
Supplemental Data
Net assets, end of period (000 omitted) $85,985 $93,867 $59,269 $61,632
</TABLE>
(a) Reflects operations for the period from May 14, 1992 (date of initial
public investment) to
November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Total return would have remained at 1.84% absent the capital contribution
by Wachovia Bank of North Carolina, N.A.
(d) Computed on an annualized basis.
(e) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months Ended
May 31, 1995 Year Ended November 30,
(unaudited) 1994 1993 1992(a)
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.017 0.02 0.02 0.01
Net realized loss on investments (0.001) -- -- --
--------- --------- --------- -----------
Total from investment operations 0.016 0.02 0.02 0.01
Less distributions
Distributions from net investment income (0.017) (0.02) (0.02) (0.01)
--------- --------- --------- -----------
Capital contribution 0.001 -- -- --
--------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- -----------
Total Return(b) 1.69%(c) 2.11% 1.99% 1.29%
Ratios to Average Net Assets
Expenses 0.62%(d) 0.68% 0.59% 0.50%(d)
Net investment income 3.36%(d) 2.11% 1.98% 2.37%(d)
Expense waiver/reimbursement(e) 0.55%(d) 0.55% 0.70% 0.88%(d)
Supplemental Data
Net assets, end of period (000 omitted) $54,159 $48,820 $23,976 $5,338
</TABLE>
(a) Reflects operations for the period from May 20, 1992 (date of initial
public investment) to
November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Total return would have remained at 1.69% absent the capital contribution
by Wachovia Bank of North Carolina, N.A.
(d) Computed on an annualized basis.
(e) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
1. ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein present only those of Biltmore Tax-Free Money Market Fund (the
"Fund"). The financial statements of the other 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 Fund offers two classes of shares: Institutional Shares and Investment
Shares. Investment Shares are identical in all respects to Institutional Shares,
except that Investment Shares are sold pursuant to a Distribution Plan (the
"Plan") adopted in accordance with the Act's Rule 12b-1.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
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").
Distributions to shareholders are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. The Fund has a permanent difference which
is due to the differing treatment of the capital contribution from Wachovia
Bank of North Carolina, N.A. related to the sale of the Orange County, CA
bond security. Amounts as of May 31, 1995, have been reclassified to
reflect a decrease in paid in capital of $150,000 and a decrease in
accumulated net realized loss of $150,000. Net investment income, net
realized gains, and net assets were not affected by this change.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
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) for each
class of shares. At May 31, 1995, capital paid in aggregated $140,294,483.
Transactions in shares were as follows:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
May 31, 1995 November 30, 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Institutional Shares
Shares sold 114,830,670 175,432,174
Shares redeemed (122,712,328) (140,833,740)
--------------- --------------------
Net change resulting from Institutional Share transactions (7,881,658) 34,598,434
--------------- --------------------
</TABLE>
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
May 31, 1995 November 30, 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Investment Shares
Shares sold 89,713,029 88,065,585
Shares redeemed (78,373,906) (69,221,580)
--------------- --------------------
Net change resulting from Investment Share transactions 11,339,123 18,844,005
--------------- --------------------
Net change resulting from share transactions 3,457,465 53,442,439
--------------- --------------------
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Fund's
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to .50 of 1% of the Fund's average daily
net assets. The Adviser may voluntarily choose to waive any portion of its fee.
The Adviser can modify or terminate this voluntary waiver at any time at its
sole discretion.
CAPITAL CONTRIBUTION--On December 7, 1994, the Fund sold at amortized cost an
Orange County bond security, with a $1,000,000 par value, to Wachovia Bank of
North Carolina, N.A. In connection with this purchase, Wachovia Bank of North
Carolina, N.A. is considered to have made a capital contribution in the amount
of $150,000 to the Fund, which represents the difference between the market
value and amortized cost of the security at the date of sale.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust and The Biltmore Municipal
Funds for the period. FAS may voluntarily waive a portion of its fee.
DISTRIBUTION SERVICES FEE--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 Investment Shares. The Plan provides that the Fund may incur distribution
expenses up to .40 of 1% of the average daily net assets of the Investment
Shares, annually, to compensate FSC. FSC may voluntarily choose to waive a
portion of its fee. FSC can modify or terminate this voluntary waiver at any
time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT, PORTFOLIO ACCOUNTING AND CUSTODIAN
FEES--Federated Services Company ("FServ") serves as transfer and dividend
disbursing agent for the Fund. The fee is based on the size, type, and number of
accounts and transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A. is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average net assets
for the period, plus out-of-pocket expenses.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
ORGANIZATIONAL EXPENSES--Organizational expenses ($59,661) were initially borne
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following May 4, 1992 (the date the Fund became
effective). For the six months ended May 31, 1995, the Fund paid $7,576 pursuant
to this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other
governmental agency. Investment in mutual funds involves risk, including
possible loss of principal. Although money market funds seek to maintain
a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297300
G00376-02-IS (7/95)
INSTITUTIONAL SHARES
SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE U.S. TREASURY
MONEY MARKET FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report of the Biltmore U.S. Treasury
Money Market Fund for the six-month period ended May 31, 1995. This report
includes a list of the Fund's investments and financial information.
During the six-month period, the Fund's portfolio of U.S. Treasury money market
securities provided shareholders with dividends of $0.03 per share. Of course,
the Fund also maintained a stable share value of $1.00.* More and more
shareholders are using the Fund to earn dividends on their cash, as shown by the
significant increase in the Fund's assets--from $133.9 million on May 31, 1994,
the first day of the period to $207.9 million on May 31, 1995, the last day of
the period.
Thank you for selecting the Biltmore U.S. Treasury Money Market Fund to put your
ready cash to work-- every day. We will continue to keep you up to date on your
investment, and provide your account with the highest level of service.
Sincerely,
John W. McGonigle
President
July 14, 1995
* Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment in
the Fund is neither insured nor guaranteed by the U.S. government.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
U.S. Treasury Obligations--32.4%
U.S. TREASURY BILLS
$ 68,500,000 6/29/95-10/26/95 $ 67,288,781
--------------
*Repurchase Agreements--68.1%
10,000,000 CS First Boston Corp., 6.05%, dated 5/31/95, due 6/1/95 10,000,000
52,000,000 Daiwa Securities America, Inc., 6.125%, dated 5/31/95, due 6/1/95 52,000,000
49,649,560 Goldman Sachs & Co., 6.10%, dated 5/31/95, due 6/1/95 49,649,560
10,000,000 Lehman Brothers Inc., 6.05%, dated 5/31/95, due 6/1/95 10,000,000
10,000,000 Morgan Stanley & Co., 5.95%, dated 5/31/95, due 6/1/95 10,000,000
10,000,000 Nomura Securities International, Inc., 6.10%, dated 5/31/95,
due 6/1/95 10,000,000
--------------
Total Repurchase Agreements 141,649,560
--------------
Total Investments, at amortized cost and value $ 208,938,341+
--------------
</TABLE>
* Repurchase agreements are fully collateralized by U.S. Treasury obligations
based on market prices at the date of the portfolio.
+ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($207,918,906) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in repurchase agreements $ 141,649,560
Investments in securities 67,288,781
--------------
Total investments, at amortized cost and value $ 208,938,341
Income receivable 23,969
Deferred expenses 7,076
--------------
Total assets 208,969,386
Liabilities:
Income distribution payable 973,996
Accrued expenses 76,484
--------------
Total liabilities 1,050,480
--------------
Net Assets for 207,918,906 shares of beneficial interest outstanding $ 207,918,906
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares ($138,296,718 / 138,296,718 shares of beneficial interest
outstanding) $1.00
--------------
Investment Shares ($69,622,188 / 69,622,188 shares of beneficial interest
outstanding) $1.00
--------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
Investment Income:
Interest $ 5,391,699
Expenses:
Investment advisory fee $ 455,802
Administrative personnel and services fee 82,566
Custodian fees 18,232
Transfer agent and dividend disbursing agent fees and expenses 25,991
Trustees' fees 5,324
Auditing fees 8,413
Legal fees 8,932
Portfolio accounting fees 35,890
Investment Shares--Distribution services fees 127,322
Share registration costs 35,986
Printing and postage 12,082
Insurance premiums 3,207
Miscellaneous 9,414
----------
Total expenses 829,161
Deduct--
Waiver of investment advisory fee $ 410,222
Waiver of distribution services fee 31,830
----------
Total waivers 442,052
----------
Net expenses 387,109
------------
Net investment income $ 5,004,590
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended
May 31, 1995 Year Ended
(unaudited) November 30, 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 5,004,590 $ 3,653,910
------------------- --------------------
Distributions to Shareholders--
Distributions from net investment income
Institutional Shares (3,319,868) (2,707,306)
Investment Shares (1,684,722) (946,604)
------------------- --------------------
Change in net assets resulting from distributions to
shareholders (5,004,590) (3,653,910)
------------------- --------------------
Share Transactions--
Proceeds from sale of shares 323,043,810 448,524,970
Cost of shares redeemed (249,052,492) (396,891,742)
------------------- --------------------
Change in net assets resulting from share transactions 73,991,318 51,633,228
------------------- --------------------
Change in net assets 73,991,318 51,633,228
Net Assets:
Beginning of period 133,927,588 82,294,360
------------------- --------------------
End of period $ 207,918,906 $ 133,927,588
------------------- --------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended
May 31,
1995 Year Ended November 30,
(unaudited) 1994 1993 1992(a)
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.04 0.03 0.02
Less distributions
Distributions from net investment income (0.03) (0.04) (0.03) (0.02)
------------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- --------- --------- -----------
Total Return (b) 2.79% 3.70% 2.91% 1.90%
Ratios to average net assets
Expenses 0.32%(c) 0.36% 0.28% 0.17%(c)
Net investment income 5.60%(c) 3.72% 2.87% 3.24%(c)
Expense waiver/reimbursement (d) 0.45%(c) 0.51% 0.63% 0.71%(c)
Supplemental Data
Net assets, end of period (000 omitted) $138,297 $87,531 $65,353 $55,408
</TABLE>
(a) Reflects operations for the period from May 7, 1992 (date of initial public
investment) to
November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended
May 31, Year Ended November
1995 30,
(unaudited) 1994 1993
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.03 0.01
Less distributions
Distributions from net investment income (0.03) (0.03) (0.01)
------------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
------------- --------- ---------
Total Return (b) 2.63% 3.39% 1.42%
Ratios to average net assets
Expenses 0.62%(c) 0.66% 0.65%(c)
Net investment income 5.30%(c) 3.42% 2.50%(c)
Expense waiver/reimbursement (d) 0.55%(c) 0.61% 0.73%(c)
Supplemental Data
Net assets, end of period (000 omitted) $69,622 $46,396 $16,941
</TABLE>
(a) Reflects operations for the period from May 12, 1993 (date of initial
public investment) to
November 30, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charges, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
(1) ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein present only those of Biltmore U.S. Treasury Money Market Fund
(the "Fund"). The financial statements of the other 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 Fund offers two classes of shares: Institutional Shares and Investment
Shares. Investment Shares are identical in all respects to Institutional Shares,
except that Investment Shares are sold pursuant to a Distribution Plan (the
"Plan") adopted in accordance with the Act's Rule 12b-1.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund 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 Fund 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 Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards established or reviewed 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 Fund 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").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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 the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from the Fund's commencement date.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND
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) for each
class of shares. At May 31, 1995, capital paid in aggregated $207,918,906.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
May 31, 1995 November 30, 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Institutional Shares
Shares sold 236,074,600 337,402,499
Shares redeemed (185,309,315) (315,224,009)
--------------- --------------------
Net change resulting from Institutional Share transactions 50,765,285 22,178,490
--------------- --------------------
---------------------------------------------------------------------------------------------------------
Investment Shares
Shares sold 86,969,210 111,122,471
Shares redeemed (63,743,177) (81,667,733)
--------------- --------------------
Net change resulting from Investment Share transactions 23,226,033 29,454,738
--------------- --------------------
Net change resulting from share transactions 73,991,318 51,633,228
--------------- --------------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Fund's
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to .50 of 1% of the Fund's average daily
net assets. The Adviser may voluntarily choose to waive any portion of its fee.
The Adviser can modify or terminate the voluntary waiver at any time at its sole
discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of the Trust and The Biltmore Municipal
Funds for the period. FAS may voluntarily choose to waive a portion of its fee.
FAS can modify or terminate this voluntary waiver at any time at its sole
discretion.
DISTRIBUTION SERVICES FEE--The Fund has adopted a 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
Investment Shares. The Plan provides that the Fund may incur distribution
expenses up to .40 of 1% of the average daily net assets of the Investment
Shares, annually, to compensate FSC. FSC may voluntarily choose to waive a
portion of its fee. FSC can modify or terminate this voluntary waiver at any
time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT, ACCOUNTING AND CUSTODIAN FEES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. The fee is based on the size, type, and number of accounts and
transactions made by shareholders.
FServ also maintains the Fund's accounting records for which it receives a fee.
The fee is based on the level of the Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A., is the Fund's custodian. The fee is based
on the level of the Fund's average net assets for the period, plus out-of-pocket
expenses.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND
ORGANIZATIONAL EXPENSES--Organizational expenses ($33,032) were initially borne
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following May 4, 1992 (the date the Fund became
effective). For the six months ended May 31, 1995, the Fund paid $6,377 pursuant
to this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other governmental
agency. Investment in mutual funds involves risk, including possible
loss of principal. Although money market funds seek to maintain a
stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297706
G00376-03-IS (7/95)
INVESTMENT SHARES
SEMI-ANNUAL REPORT
DATED
MAY 31, 1995
JULY 31, 1995
BILTMORE MONEY MARKET FUND
BILTMORE TAX-FREE MONEY MARKET FUND
BILTMORE U.S. TREASURY MONEY MARKET FUND
WACHOVIA INVESTMENTS
MAKE YOURSELF COMFORTABLE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of the Biltmore
Money Market Funds for the six-month period ended May 31, 1995. This report
includes a list of investments and financial information for each Fund.
Please note the following highlights for each Fund over the six-month period:
BILTMORE MONEY MARKET FUND
The Fund's portfolio of high quality money market securities provided
shareholders with dividends of $0.03 per share, while maintaining a stable share
value of $1.00.* The Fund's assets stood at $270 million on May 31, 1995, the
last day of the period.
BILTMORE TAX-FREE MONEY MARKET FUND
The Fund's portfolio of municipal money market securities provided shareholders
with federally tax-free dividends of $0.02 per share, while maintaining a stable
share value of $1.00.* The Fund's assets stood at $140 million on May 31, 1995,
the last day of the period.
BILTMORE U.S. TREASURY MONEY MARKET FUND
The Fund's portfolio of U.S. Treasury money market securities provided
shareholders with dividends of $0.03 per share, while maintaining a stable share
value of $1.00.* More and more shareholders are using the Fund to earn dividends
on their cash, as shown by the significant increase in the Fund's assets--from
$133.9 million on the first day of the period to $207.9 million on May 31, 1995,
the last day of the period.
Thank you for selecting to put your ready cash to work--every day--through the
Biltmore Money Market Funds. We will continue to keep you up to date on your
investment, and provide your account with the highest level of service.
Sincerely,
John W. McGonigle
President
July 14, 1995
* Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment in
the Funds is neither insured nor guaranteed by the U.S. government.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
Bankers Acceptances--4.7%
$ 5,000,000 Bank of New York, 6.60%, 7/6/1995 $ 4,967,917
7,857,143 Morgan Guaranty, 5.87%, 10/27/1995 7,667,532
--------------
Total Bankers Acceptances 12,635,449
--------------
Certificates Of Deposit--31.8%
7,000,000 ABN - AMRO Bank, 6.17%, 7/3/1995 7,000,042
10,000,000 Barclays Bank, 6.23%, 6/9/1995 10,000,022
10,000,000 CIBC New York, 6.06%, 8/15/1995 10,000,759
10,000,000 Credit Suisse, 6.25%, 10/18/1995 10,001,310
10,000,000 Deutsche Bank, 6.31%, 10/10/1995 10,000,197
5,000,000 National Westminster Bank, USA, 6.875%, 6/15/1995 5,000,934
5,000,000 National Westminster, London, 6.14%, 8/31/1995 5,000,245
5,000,000 Rabobank, 6.32%, 9/22/1995 5,000,542
12,000,000 Societe General Bank, 6.02%-6.13%, 7/3/1995-7/10/1995 12,000,171
12,000,000 Swiss Bank of New York, 6.03%, 8/21/1995 12,000,000
--------------
Total Certificates of Deposit 86,004,222
--------------
*Commercial Paper--35.2%
CHEMICALS--2.2%
6,000,000 duPont E.I. de Nemours & Co., 6.02%, 8/22/1995 5,917,727
--------------
FINANCE--18.1%
10,000,000 Commercial Credit Co., 6.00%, 6/2/1995 9,998,333
7,000,000 Cortez Capital, 5.98%, 6/5/1995 6,995,349
9,000,000 General Electric Capital Corp., 6.40%, 6/12/1995 8,982,400
3,000,000 Hanson Finance, PLC, 6.12%, 6/5/1995 2,997,960
5,000,000 Southwestern Bell Capital Corp., 5.93%, 6/26/1995 4,979,410
5,000,000 USAA Capital Corp., 6.15%, 7/6/1995 4,970,104
10,000,000 USL Capital Corp., 5.96%, 6/13/1995 9,980,133
--------------
Total 48,903,689
--------------
FINANCE-AUTOMOTIVE--3.7%
10,000,000 Ford Motor Credit Corp., 6.18%, 6/1/1995 10,000,000
--------------
FINANCE-OIL--3.2%
8,800,000 Shell Oil Co., 6.21%, 8/21/1995 8,677,042
--------------
FOOD & BEVERAGE--6.2%
7,000,000 Coca Cola Co., 5.87%, 11/6/1995 6,819,661
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
*Commercial Paper--continued
FOOD & BEVERAGE--CONTINUED
$ 10,000,000 Sara Lee Corp., 6.00%, 8/9/1995 $ 9,885,000
--------------
Total 16,704,661
--------------
TRANSPORTATION--1.8%
5,000,000 Norfolk Southern Corp., 6.25%, 8/7/1995 4,941,840
--------------
Total Commercial Paper 95,144,959
--------------
**Variable Rate Notes--8.5%
FINANCE-BANKING--6.7%
5,000,000 Boatmens National Bank, St. Louis, 6.25%, 8/16/1995 5,000,000
10,000,000 First Union National Bank, 6.09%, 5/13/1996 10,000,000
3,000,000 Northern Trust Co., 5.75%, 7/20/1995 2,998,073
--------------
Total 17,998,073
--------------
FOOD & BEVERAGE--1.8%
5,000,000 Coca Cola Co., 5.92%, 8/29/1995 5,000,000
--------------
Total Variable Rate Notes 22,998,073
--------------
***Repurchase Agreements--19.9%
53,763,851 Goldman, Sachs & Co., 6.10%, dated 5/31/1995, due 6/1/1995 53,763,851
--------------
Total Investments, at amortized cost and value $ 270,546,554+
--------------
</TABLE>
* Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
** Current rate and next reset date shown.
*** The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
+ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($270,193,051) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in repurchase agreements $ 53,763,851
Investments in securities 216,782,703
--------------
Total investments in securities, at amortized cost
(identified and tax cost $270,546,554) $ 270,546,554
Income receivable 950,021
Deferred expenses 11,238
--------------
Total assets 271,507,813
Liabilities:
Income distribution payable 1,250,851
Accrued expenses 63,911
--------------
Total liabilities 1,314,762
--------------
Net Assets for 270,193,051 shares outstanding $ 270,193,051
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares ($145,969,597 / 145,969,597 shares outstanding) $ 1.00
--------------
Investment Shares ($124,223,454 / 124,223,454 shares outstanding) $ 1.00
--------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
Investment Income:
Interest $ 6,921,600
Expenses:
Investment advisory fee $ 569,568
Administrative personnel and services fee 103,204
Custodian fees 22,748
Transfer agent and dividend disbursing agent fees and expenses 20,706
Trustees' fees 8,238
Auditing fees 6,258
Legal fees 7,444
Portfolio accounting fees 29,931
Investment Shares--Distribution services fee 180,418
Share registration costs 38,725
Printing and postage 10,499
Insurance premiums 2,681
Miscellaneous 11,568
------------
Total expenses 1,011,988
Deduct--
Waiver of investment advisory fee $ 398,698
Waiver of distribution services fee 45,105
----------
Total waivers 443,803
------------
Net expenses 568,185
------------
Net investment income $ 6,353,415
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended Year Ended
May 31, 1995 November 30,
(unaudited) 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 6,353,415 $ 6,331,857
------------------- ---------------
Distributions to Shareholders--
Institutional Shares--Distributions from net investment income (3,897,023) (5,146,447)
Investment Shares--Distributions from net investment income (2,456,392) (1,185,410)
------------------- ---------------
Change in net assets resulting from distributions
to shareholders (6,353,415) (6,331,857)
------------------- ---------------
Share Transactions--
Proceeds from sale of shares 283,230,775 479,663,256
Cost of shares redeemed (198,375,600) (481,257,539)
------------------- ---------------
Change in net assets resulting from share transactions 84,855,175 (1,594,283)
------------------- ---------------
Change in net assets 84,855,175 (1,594,283)
Net Assets:
Beginning of period 185,337,876 186,932,159
------------------- ---------------
End of period $ 270,193,051 $ 185,337,876
------------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended
May 31,
1995 Year Ended November 30,
(unaudited) 1994 1993 1992(a)
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.03 0.03 0.01
Less distributions
Distributions from net investment income (0.03) (0.03) (0.03) (0.01)
------------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- --------- --------- -----------
Total Return (b) 2.70% 3.46% 2.74% 1.48%
Ratios to average net assets
Expenses 0.68%(c) 0.68% 0.55% 0.48%(c)
Net investment income 5.40%(c) 3.44% 2.70% 3.44%(c)
Expense waiver/reimbursement (d) 0.45%(c) 0.50% 0.66% 0.75%(c)
Supplemental data
Net assets, end of period (000 omitted) $124,223 $56,105 $9,842 $3,106
</TABLE>
(a) Reflects operations for the period from June 9, 1992 (date of initial
public investment) to November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended
May 31,
1995 Year Ended November 30,
(unaudited) 1994 1993 1992(a)
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.04 0.03 0.02
Less distributions
Distributions from net investment income (0.03) (0.04) (0.03) (0.02)
------------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- --------- --------- ---------
Total Return (b) 2.86% 3.77% 3.05% 1.71%
Ratios to average net assets
Expenses 0.38%(c) 0.38% 0.25% 0.14%(c)
Net investment income 5.70%(c) 3.74% 3.00% 3.38%(c)
Expense waiver/reimbursement (d) 0.35%(c) 0.40% 0.56% 0.65%(c)
Supplemental data
Net assets, end of period (000 omitted) $145,970 $129,233 $177,090 $84,698
</TABLE>
(a) Reflects operations for the period from June 2, 1992 (date of initial
public investment) to November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--98.5%
ALABAMA--7.1%
$ 2,395,000 Alabama, HFA, Weekly VRDNs Revenue Refunding Bonds (SouthTrust
Bank of Alabama LOC) A-1 $ 2,395,000
780,000 Alabama, HFA, Weekly VRDNs Revenue Refunding Bonds (Series
D)/(SouthTrust Bank of Alabama LOC) VMIG1 780,000
6,320,000 Birmingham, AL, Weekly VRDNs GO UT Refunding Bonds (Series
1992-A)/(First Alabama Bank LOC) VMIG1 6,320,000
435,000 Tuscaloosa County, AL, Port Authority Daily and Weekly VRDNs
Revenue Refunding Bonds (Capstone Hotel Ltd.
Project)/(Series A)/(SouthTrust Bank of Alabama LOC) P-1 435,000
--------------
Total 9,930,000
--------------
ARKANSAS--2.9%
3,300,000 Arkansas Hospital Equipment Finance Authority, Weekly VRDNs
Revenue Bonds (Credit Suisse LOC) AA+ 3,300,000
700,000 Fayetteville, AR, Public Facility, Weekly VRDNs Revenue
Refunding Bonds (Charter Vista Hospital)/(Mitsubishi Bank Ltd.
LOC) VMIG1 700,000
--------------
Total 4,000,000
--------------
CONNECTICUT--1.4%
1,900,000 Connecticut State Economic Recovery Notes, Weekly VRDNs GO UT
Bonds (Series B)/(Industrial Bank of Japan SPA) VMIG1 1,900,000
--------------
DISTRICT OF COLUMBIA--0.5%
700,000 District of Columbia, Weekly VRDNs Revenue Bonds
(Catholic University)/(Series A)/(Sanwa Bank Ltd. LOC) VMIG1 700,000
--------------
FLORIDA--14.7%
5,000,000 Broward County, FL, HFA Weekly VRDNs Revenue Bonds (Welleby
Apartments Project)/(Security Pacific National
Bank LOC) Aa3 5,000,000
4,100,000 Collier County, FL, HFA, Weekly VRDNs Revenue Bonds (River Reach
Project)/(Morgan Guaranty LOC) VMIG1 4,100,000
1,800,000 Escambia County, FL, Health Facility Authority, IDR, Monthly
VRDNs Refunding Bonds (Florida Convalescent
Centers Project)/(Series A)/(Toronto Dominion Bank LOC) P-1 1,800,000
1,500,000 Martin County, FL, School District, 4.35% TANs, 6/30/1995 MIG1 1,500,517
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--continued
FLORIDA--CONTINUED
$ 2,000,000 Palm Beach County, FL, School District, 4.75% TANs,
9/13/1995 MIG1 $ 2,004,383
750,000 Polk County, FL, IDA, Monthly VRDNs Refunding Bonds (Florida
Convalescent Centers Project)/(Toronto Dominion Bank LOC) P-1 750,000
2,000,000 St. Lucie County, FL, 3.90% Revenue Refunding Bonds (Florida
Power & Light Co.), 9/22/1995 VMIG1 2,000,000
3,500,000 Southeast Volusia, FL, Hospital Revenue, Weekly VRDNs (Bert Fish
Medical Center Issue)/(SouthTrust Bank of
Alabama LOC) A-1 3,500,000
--------------
Total 20,654,900
--------------
GEORGIA--9.4%
3,000,000 Burke County, GA, Development Pollution Authority,
4.10%-4.15% Revenue Refunding Bonds (Olglethorpe Power
Corp. Project)/(Series A)/(Credit Suisse of NY LOC),
6/8/1995-7/7/1995 P-1 3,000,000
5,100,000 De Kalb Private Hospital Authority GA, Weekly VRDNs RANs
(Engleston Childrens' Hospital)/(Series B)/(Trust
Company Bank LOC) VMIG1 5,100,000
1,500,000 Georgia State, 6.75% GO UT Bonds (Series E), 12/1/1995 AAA 1,515,610
1,035,000 Macon Bibb County, GA, Urban Development Authority
Revenue, Weekly VRDNs Refunding Bonds (Hotel Investors
Project)/(NBD Bank LOC) A-1+ 1,035,000
1,500,000 Marietta, GA, HFA, 5.25% Revenue Bonds (Falls at Bells Ferry)/
(Guardian S&L LOC), 1/15/1996 VMIG1 1,500,000
1,000,000 Newton County, GA, IDA, Weekly VRDNs Refunding Bonds (John H.
Harland Co. Project)/(NationsBank of Georgia LOC) A-1 1,000,000
--------------
Total 13,150,610
--------------
ILLINOIS--10.4%
1,000,000 Chicago, IL, School Finance Authority, 7.75% GO UT Refunding
Bonds 6/1/1995, Prerefunded AAA 1,020,000
3,500,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
(Aurora Central Catholic High School)/(Northern Trust LOC) A-1+ 3,500,000
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--continued
ILLINOIS--CONTINUED
$ 1,000,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
Refunding Bonds (Catholic Charities Housing)/
(Series B)/(National Westminster LOC) VMIG1 $ 1,000,000
1,000,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
(Lake Forest Academy Project)/(Northern
Trust LOC) A-1+ 1,000,000
1,475,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
(Little City Foundation Special Facilities)/
(LaSalle National Bank LOC) A-1+ 1,475,000
2,000,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
(St. Ignatius College Prep.)/(Northern Trust LOC) A-1+ 2,000,000
1,625,000 Illinois Development Finance Authority Revenue, Weekly VRDNs
(St. Paul's House Project)/(LaSalle National Bank LOC) A-1+ 1,625,000
3,000,000 Illinois State Toll Highway Authority Weekly VRDNs
Revenue Refunding Bonds (Series B)/(MBIA Insured)/
(Societe Generale LOC) VMIG1 3,000,000
--------------
Total 14,620,000
--------------
INDIANA--0.2%
300,000 Indianapolis, IN, Weekly VRDNs Revenue Refunding Bonds (Canal
Square Project)/(Societe Generale LOC) VMIG1 300,000
--------------
IOWA--0.4%
600,000 Indianola, IA, IDR, Monthly VRDNs (HY-VEE Foods)/ (Rabobank
Nederland LOC) A-l+ 600,000
--------------
KANSAS--1.9%
500,000 Burlington, KS, Pollution Control, 4.05% Revenue Refunding Bonds
(KC Power & Light Project)/(Series B)/(Deutsche Bank A.G. LOC),
7/20/1995 AAA 500,000
2,175,000 Topeka, KS, 4.50% GO UT Bonds (Series A), 6/1/1995 MIG1 2,175,000
--------------
Total 2,675,000
--------------
KENTUCKY--0.6%
900,000 Georgetown, KY, Educational Institution, Weekly VRDNs Revenue
Bonds (Georgetown College Project)/(PNC Bank of Kentucky LOC) VMIG1 900,000
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--continued
LOUISIANA--3.9%
$ 1,700,000 Calcasieu Parish, LA, Weekly VRDNs Revenue Bonds (Citgo
Petroleum Corp.)/(Westdeutsche Landesbk LOC) Aa1 $ 1,700,000
2,800,000 Lake Charles, LA, Harbor & Terminal District, Weekly VRDNs
Revenue Bonds (Citgo Petroleum Corp.)/
(Westdeutsche Landesbk LOC) P-1 2,800,000
1,000,000 Louisiana State Recovery District Sales Tax Revenue, Daily VRDNs
(FGIC lnsured)/(Swiss Bank SPA) VMIG1 1,000,000
--------------
Total 5,500,000
--------------
MARYLAND--4.3%
6,000,000 Maryland State Health and Higher Education Facility, Weekly
VRDNs Revenue Bonds (North Arundel Hospital)/(Series B)/ (Mellon
Bank LOC) VMIG1 6,000,000
--------------
MASSACHUSETTS--2.6%
600,000 Massachusetts State, Daily VRDNs GO UT Bonds (Series E)/ (ABN
AMRO Bank LOC) VMIG1 600,000
3,000,000 Massachusetts Municipal Wholesale Electric Co., Weekly VRDNs
Power Supply System Revenue Refunding Bonds (Series C)/(Canadian
Imperial Bank LOC) A-1+ 3,000,000
--------------
Total 3,600,000
--------------
MINNESOTA--1.5%
2,020,000 Minnesota State, 6.60% GO UT Refunding Bonds, 8/1/1995 Aa1 2,028,347
--------------
MISSOURI--0.7%
1,000,000 Kansas City, MO, IDA, Weekly VRDNs (Mid America Health
Services)/(Mellon Bank LOC) A-1 1,000,000
--------------
NORTH CAROLINA--4.6%
2,500,000 North Carolina Eastern Municipal Power, 4.15% Revenue Bonds
(Series B)/(UBS & Morgan Guaranty LOC), 6/8/1995 A-1+ 2,500,000
2,000,000 North Carolina Eastern Municipal Power, 7.75% Revenue Refunding
Bonds (Series A), 1/1/1996, Prerefunded Aaa 2,098,153
1,795,000 Wake County, NC, 4.20% GO UT Refunding Bonds, 4/1/1996 AAA 1,795,692
--------------
Total 6,393,845
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--continued
OHIO--0.70%
$ 1,000,000 Centerville, OH, Healthcare Revenue, Weekly VRDNs
(Bethany Lutheran Village Project)/(PNC Bank of
Ohio LOC) VMIG1 $ 1,000,000
--------------
PENNSYLVANIA--6.1%
3,600,000 Allegheny County, PA, Port Authority, 4.10% GANs
(PNC Bank LOC), 7/3/1995 MIG1 3,600,017
1,000,000 Pennsylvania State University, 5.50% GO Bonds (University
Project Notes)/(Series A), 12/21/1995 MIG1 1,002,114
2,000,000 Philadelphia, PA, 4.75% GO UT Bonds RANs and TANs (Series
A)/(Canadian Imperial Bank LOC), 6/15/1995 MIG1 2,000,628
2,000,000 Sewickley Valley Hospital Authority, PA, 5 00% Revenue Refunding
Bonds (Series B)/(PNC Bank LOC), 12/15/1995 VMIG1 2,003,130
--------------
Total 8,605,889
--------------
TENNESSEE--11.6%
3,000,000 Metro Government Nashville & Davidson/County, TN, IDB, Weekly
VRDNs Revenue Bonds (Arbor Crest)/(Series B)/ (NationsBank of
GA) VMIG1 3,000,000
2,000,000 Metro Government Nashville & Davidson County, TN, Health and
Education Facilities Board, Weekly VRDNs Revenue Refunding Bonds
(West Meade Place Project)/(NationsBank of Georgia LOC) A-1 2,000,000
4,150,000 Metropolitan Nashville Airport, Weekly VRDNs Revenue Refunding
Bonds (FGIC Insured)/(Societe Generale LOC) VMIG1 4,150,000
7,100,000 Tennessee State, Weekly VRDNs GO UT BANs (Series B) VMIG1 7,100,000
--------------
Total 16,250,000
--------------
TEXAS--6.3%
1,800,000 Lower Neches Valley Authority, TX, 4.45% Revenue Refunding Bonds
(Chevron USA, Inc. Project), 8/15/1995 A-1+ 1,800,000
1,000,000 San Antonio, TX, 8.30% GO LT Refunding Bonds, 8/1/1995
(Prerefunded) AAA 1,007,000
3,000,000 Texas State, Weekly VRDNs (Series 144A) MIG1 3,000,000
3,000,000 Texas State, 5.00% RANs & TANs, 8/31/1995 MIG1 3,007,253
--------------
Total 8,814,253
--------------
</TABLE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
-----------------------------------------------------------------------------------------------------------
Short-Term Municipal Securities--continued
VIRGINIA--2.4%
$ 2,000,000 Harrisonburg, VA, HFA, 5.10% Revenue Bonds (Rolling Brook
Village Apartments)/(Guardian S&L LOC), 2/1/1996 VMIG1 $ 2,000,000
400,000 Peninsula Ports Authority, VA, Daily VRDNs Revenue Refunding
Bonds (Port Facility-Shell Oil Co.) AAA 400,000
1,000,000 Virginia State, Housing Development Authority, 4.25%
Revenue Bonds (Series D), 7/12/1995 VMIG1 1,000,000
--------------
Total 3,400,000
--------------
WASHINGTON--2.9%
4,000,000 Port Anacortes, WA, IDA, 4.10% Revenue Refunding Bonds (Texaco
Project), 6/15/1995 P-1 4,000,000
--------------
WISCONSIN--0.7%
1,000,000 West Allis Milwaukee, WI, School District, 5.00% GO UT Bonds,
RANs & TANs, 8/22/1995 MIG1 1,002,060
--------------
WYOMING--0.7%
1,000,000 **Uinta County, WY, PCR, 3.75% (Chevron USA, Inc.
Project), 6/15/1995 AA 1,000,000
--------------
Total Short-Term Municipal Securities 138,024,904
--------------
Regulated Investment Companies--0.8%
1,088,729 Fidelity Tax-Exempt Money Market Fund Instruments
Portfolio (at net asset value) 1,088,729
--------------
Total Investments, at amortized cost and value $ 139,113,633+
--------------
</TABLE>
+ Also represents cost for federal tax purposes.
* Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings. Current credit ratings are unaudited.
** Denotes variable rate securities which show current rate and next demand
date.
Note: The categories of investments are shown as a percentage of net assets
($140,144,483) at May 31, 1995
The following acronyms are used throughout this portfolio
BANs--Bond Anticipation Notes
FGIC--Financial Guaranty Insurance Co.
GANs--Grant Anticipation Notes
GO--General Obligation
HFA--Housing Finance Authority
IDA--Industrial Development Authority
IDB--Industrial Development Board
IDR--Industrial Development Revenue
LOC--Letter of Credit
LT--Limited Tax
MBIA--Municipal Bond Investors Assurance
PCR--Pollution Control Revenue
RANs--Revenue Anticipation Notes
SPA--Standby Purchase Agreement
TANs--Tax Anticipation Notes
UT--Unlimited Tax
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in securities, at amortized cost (identified and tax cost $139,113,633) $ 139,113,633
Cash 10,483
Income receivable 1,510,526
Deferred expenses 11,322
--------------
Total assets 140,645,964
Liabilities:
Income distribution payable $ 476,134
Accrued expenses 25,347
----------
Total liabilities 501,481
--------------
Net Assets for 140,144,483 shares outstanding $ 140,144,483
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares ($85,985,338 / 85,985,338 shares outstanding) $ 1.00
--------------
Investment Shares ($54,159,145 / 54,159,145 shares outstanding) $ 1.00
--------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
Investment Income:
Interest $ 2,885,953
Expenses:
Investment advisory fee $ 362,900
Administrative personnel and services fee 65,800
Custodian fees 14,516
Transfer agent and dividend disbursing agent fees and expenses 22,778
Trustees' fees 5,101
Auditing fees 7,026
Legal fees 7,663
Portfolio accounting fees 24,480
Investment Shares--Distribution services fee 104,354
Share registration costs 22,947
Printing and postage 10,807
Insurance premiums 3,116
Miscellaneous 11,732
----------
Total expenses 663,220
Deduct--
Waiver of investment advisory fee $ 326,610
Waiver of distribution services fee 26,089
----------
Total waivers 352,699
----------
Net expenses 310,521
------------
Net investment income 2,575,432
------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments (150,000)
------------
Change in net assets resulting from operations $ 2,425,432
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
May 31, 1995 November 30,
(unaudited) 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 2,575,432 $ 2,894,643
Net realized loss on investments ($150,000 net loss and $0 respec-
tively, as computed for federal income tax purposes) (150,000) --
--------------- ---------------
Change in net assets resulting from operations 2,425,432 2,894,643
--------------- ---------------
Distributions to Shareholders--
Institutional Shares--Distributions from net investment income (1,699,245) (2,150,380)
Investment Shares--Distributions from net investment income (876,187) (744,263)
--------------- ---------------
Change in net assets resulting from distributions to shareholders (2,575,432) (2,894,643)
--------------- ---------------
Share Transactions--
Proceeds from sale of shares 204,543,699 263,497,759
Cost of shares redeemed (201,086,234) (210,055,320)
--------------- ---------------
Change in net assets resulting from share transactions 3,457,465 53,442,439
Capital Contributions 150,000 --
--------------- ---------------
Changes in net assets 3,457,465 53,442,439
Net Assets:
Beginning of period 136,687,018 83,244,579
--------------- ---------------
End of period $ 140,144,483 $ 136,687,018
--------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months Ended
May 31, 1995 Year Ended November 30,
(unaudited) 1994 1993 1992(a)
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.017 0.02 0.02 0.01
Net realized loss on investments (0.001) -- -- --
--------- --------- --------- -----------
Total from investment operations 0.016 0.02 0.02 0.01
Less distributions
Distributions from net investment income (0.017) (0.02) (0.02) (0.01)
--------- --------- --------- -----------
Capital contribution 0.001 -- -- --
--------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- -----------
Total Return(b) 1.69%(c) 2.11% 1.99% 1.29%
Ratios to Average Net Assets
Expenses 0.62%(d) 0.68% 0.59% 0.50%(d)
Net investment income 3.36%(d) 2.11% 1.98% 2.37%(d)
Expense waiver/reimbursement(e) 0.55%(d) 0.55% 0.70% 0.88%(d)
Supplemental Data
Net assets, end of period (000 omitted) $54,159 $48,820 $23,976 $5,338
</TABLE>
(a) Reflects operations for the period from May 20, 1992 (date of initial
public investment) to November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Total return would have remained at 1.69% absent the capital contribution
by Wachovia Bank of North Carolina, N.A.
(d) Computed on an annualized basis.
(e) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months Ended
May 31, 1995 Year Ended November 30,
(unaudited) 1994 1993 1992(a)
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.018 0.02 0.02 0.01
Net realized loss on investments (0.001) -- -- --
--------- --------- --------- -----------
Total from investment operations 0.017 0.02 0.02 0.01
Less distributions
Distributions from net investment income (0.018) (0.02) (0.02) (0.01)
--------- --------- --------- -----------
Capital contribution 0.001 -- -- --
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- -----------
Total Return(b) 1.84%(c) 2.42% 2.30% 1.49%
Ratios to Average Net Assets
Expenses 0.32%(d) 0.38% 0.29% 0.16%(d)
Net investment income 3.66%(d) 2.41% 2.28% 2.71%(d)
Expense waiver/reimbursement(e) 0.45%(d) 0.45% 0.60% 0.78%(d)
Supplemental Data
Net assets, end of period (000 omitted) $85,985 $93,867 $59,269 $61,632
</TABLE>
(a) Reflects operations for the period from May 14, 1992 (date of initial
public investment) to November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Total return would have remained at 1.84% absent the capital contribution
by Wachovia Bank of North Carolina, N.A.
(d) Computed on an annualized basis.
(e) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
--------------------------------------------------------------------------------------------------------
U.S. Treasury Obligations--32.4%
U.S. TREASURY BILLS
$ 68,500,000 6/29/95-10/26/95 $ 67,288,781
--------------
*Repurchase Agreements--68.1%
10,000,000 CS First Boston Corp., 6.05%, dated 5/31/95, due 6/1/95 10,000,000
52,000,000 Daiwa Securities America, Inc., 6.125%, dated 5/31/95, due 6/1/95 52,000,000
49,649,560 Goldman Sachs & Co., 6.10%, dated 5/31/95, due 6/1/95 49,649,560
10,000,000 Lehman Brothers Inc., 6.05%, dated 5/31/95, due 6/1/95 10,000,000
10,000,000 Morgan Stanley & Co., 5.95%, dated 5/31/95, due 6/1/95 10,000,000
10,000,000 Nomura Securities International, Inc., 6.10%, dated 5/31/95,
due 6/1/95 10,000,000
--------------
Total Repurchase Agreements 141,649,560
--------------
Total Investments, at amortized cost and value $ 208,938,341+
--------------
</TABLE>
* Repurchase agreements are fully collateralized by U.S. Treasury obligations
based on market prices at the date of the portfolio.
+ Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($207,918,906) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C>
Assets:
Investments in repurchase agreements $ 141,649,560
Investments in securities 67,288,781
--------------
Total investments, at amortized cost and value $ 208,938,341
Income receivable 23,969
Deferred expenses 7,076
--------------
Total assets 208,969,386
Liabilities:
Income distribution payable 973,996
Accrued expenses 76,484
--------------
Total liabilities 1,050,480
--------------
Net Assets for 207,918,906 shares of beneficial interest outstanding $ 207,918,906
--------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares ($138,296,718 / 138,296,718 shares of beneficial interest
outstanding) $1.00
--------------
Investment Shares ($69,622,188 / 69,622,188 shares of beneficial interest
outstanding) $1.00
--------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
Investment Income:
Interest $ 5,391,699
Expenses:
Investment advisory fee $ 455,802
Administrative personnel and services fee 82,566
Custodian fees 18,232
Transfer agent and dividend disbursing agent fees and expenses 25,991
Trustees' fees 5,324
Auditing fees 8,413
Legal fees 8,932
Portfolio accounting fees 35,890
Investment Shares--Distribution services fees 127,322
Share registration costs 35,986
Printing and postage 12,082
Insurance premiums 3,207
Miscellaneous 9,414
----------
Total expenses 829,161
Deduct--
Waiver of investment advisory fee $ 410,222
Waiver of distribution services fee 31,830
----------
Total waivers 442,052
----------
Net expenses 387,109
------------
Net investment income $ 5,004,590
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months Ended
May 31, 1995 Year Ended
(unaudited) November 30, 1994
<S> <C> <C>
---------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 5,004,590 $ 3,653,910
------------------- --------------------
Distributions to Shareholders--
Distributions from net investment income
Institutional Shares (3,319,868) (2,707,306)
Investment Shares (1,684,722) (946,604)
------------------- --------------------
Change in net assets resulting from distributions to
shareholders (5,004,590) (3,653,910)
------------------- --------------------
Share Transactions--
Proceeds from sale of shares 323,043,810 448,524,970
Cost of shares redeemed (249,052,492) (396,891,742)
------------------- --------------------
Change in net assets resulting from share transactions 73,991,318 51,633,228
------------------- --------------------
Change in net assets 73,991,318 51,633,228
Net Assets:
Beginning of period 133,927,588 82,294,360
------------------- --------------------
End of period $ 207,918,906 $ 133,927,588
------------------- --------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND FINANCIAL HIGHLIGHTS
INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended
May 31, Year Ended November
1995 30,
(unaudited) 1994 1993
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.03 0.01
Less distributions
Distributions from net investment income (0.03) (0.03) (0.01)
------------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
------------- --------- ---------
Total Return (b) 2.63% 3.39% 1.42%
Ratios to average net assets
Expenses 0.62%(c) 0.66% 0.65%(c)
Net investment income 5.30%(c) 3.42% 2.50%(c)
Expense waiver/reimbursement (d) 0.55%(c) 0.61% 0.73%(c)
Supplemental Data
Net assets, end of period (000 omitted) $69,622 $46,396 $16,941
</TABLE>
(a) Reflects operations for the period from May 12, 1993 (date of initial
public investment) to November 30, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charges, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE U.S. TREASURY MONEY MARKET FUND FINANCIAL HIGHLIGHTS
INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Six Months
Ended
May 31,
1995 Year Ended November 30,
(unaudited) 1994 1993 1992(a)
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.04 0.03 0.02
Less distributions
Distributions from net investment income (0.03) (0.04) (0.03) (0.02)
------------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- --------- --------- -----------
Total Return (b) 2.79% 3.70% 2.91% 1.90%
Ratios to average net assets
Expenses 0.32%(c) 0.36% 0.28% 0.17%(c)
Net investment income 5.60%(c) 3.72% 2.87% 3.24%(c)
Expense waiver/reimbursement (d) 0.45%(c) 0.51% 0.63% 0.71%(c)
Supplemental Data
Net assets, end of period (000 omitted) $138,297 $87,531 $65,353 $55,408
</TABLE>
(a) Reflects operations for the period from May 7, 1992 (date of initial public
investment) to November 30, 1992.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
(1) ORGANIZATION
The Biltmore Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company.
The Trust consists of twelve diversified portfolios. The financial statements
included herein are only those of Biltmore Money Market Fund (the "Money Market
Fund"), Biltmore Tax-Free Money Market Fund (the "Tax-Free Fund"), and Biltmore
U.S. Treasury Money Market Fund (the "U.S. Treasury Fund"), (individually
referred to as the "Fund", or collectively as the "Funds"). The financial
statements of the other 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 offer two classes of shares: Institutional Shares and Investment
Shares. Investment Shares are identical in all respects to Institutional Shares,
except that Investment Shares are sold pursuant to a Distribution Plan (the
"Plan") adopted in accordance with the Act's Rule 12b-1.
(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--The Funds' use of the amortized cost method to value
their portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require a 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").
Distributions to shareholders are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. The Tax Free Money Market Fund has a
permanent difference which is due to the differing treatment of the capital
contribution from Wachovia Bank of North Carolina, N.A. related to the sale
of the Orange County, CA bond security. Amounts as of May 31, 1995, have
been reclassified to reflect a decrease in paid in capital of $150,000 and
a decrease in accumulated net realized loss of $150,000. Net investment
income, net realized gains, and net assets were not affected by this
change.
FEDERAL TAXES--It is each Fund's policy to comply with the provisions of
the Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUNDS
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
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method not to exceed a period of five
years from each Fund's commencement date.
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) for each
class of shares. At May 31, 1995, capital paid in for the Money Market Fund,
Tax-Free Fund and U.S. Treasury Fund aggregated $270,193,051, $140,294,483, and
$207,918,906, respectively. Transactions in shares were as follows:
<TABLE>
<CAPTION>
Money Market Tax-Free U.S. Treasury
Fund Fund Fund
------------------------ ------------------------ ------------------------
Year Year Year
Six Months Ended Six Months Ended Six Months Ended
Ended November Ended November Ended November
May 31, 30, May 31, 30, May 31, 30,
1995 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C> <C>
----------- ----------- ----------- ----------- ----------- -----------
INSTITUTIONAL SHARES
---------------------------
Shares sold 147,553,425 385,548,512 114,830,670 175,432,174 236,074,600 337,402,499
Shares redeemed (130,816,738) (433,405,663) (122,712,328) (140,833,740) (185,309,315) (315,224,009)
--------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Net change resulting from
Institutional share
transactions 16,736,687 (47,857,151) (7,881,658) 34,598,434 50,765,285 22,178,490
----------- ----------- ----------- ----------- ----------- -----------
INVESTMENT SHARES
---------------------------
Shares sold 135,677,350 94,114,744 89,713,029 88,065,585 86,969,210 111,122,471
Shares redeemed (67,558,862) (47,851,876) (78,373,906) (69,221,580) (63,743,177) (81,667,733)
--------------------------- ----------- ----------- ----------- ----------- ----------- -----------
Net change resulting from
Investment share
transactions 68,118,488 46,262,868 11,339,123 18,844,005 23,226,033 29,454,738
----------- ----------- ----------- ----------- ----------- -----------
Net change resulting from
share transactions 84,855,175 (1,594,283) 3,457,465 53,442,439 73,991,318 51,633,228
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Investment Management Group, the Funds'
investment adviser (the "Adviser"), is entitled to receive for its services an
annual investment advisory fee equal to 0.50 of 1% of each Fund's average daily
net assets. The Adviser may voluntarily choose to waive any portion of its fee.
The Adviser can modify or terminate this voluntary waiver at any time at its
sole discretion.
CAPITAL CONTRIBUTION--On December 7, 1994, the Tax-Free Fund sold at amortized
cost an Orange County bond security, with a $1,000,000 par value, to Wachovia
Bank of North Carolina, N.A. In connection with this purchase, Wachovia Bank of
North Carolina, N.A. is considered to have made a capital contribution in the
amount of $150,000 to the Fund, which represents the difference between the
market value and amortized cost of the security at the date of sale.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Funds
with certain administrative personnel and services. The FAS fee is based on the
level of average aggregate net assets of
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BILTMORE MONEY MARKET FUNDS
the Trust and The Biltmore Municipal Funds for the period. FAS may voluntarily
choose to waive a portion of its fee.
DISTRIBUTION PLAN--Under the terms of the Plan, each Fund will compensate
Federated Securities Corp. ("FSC"), the principal distributor, from its net
assets to finance activities intended to result in the sale of each Fund's
Investment Shares. The Plan provides that each Fund may incur distribution
expenses up to 0.40 of 1% of the average daily net assets of its Investment
Shares, annually, to compensate FSC.
TRANSFER AND DIVIDEND DISBURSING AGENT, PORTFOLIO ACCOUNTING AND CUSTODIAN
FEES--Federated Services Company ("FServ") serves as transfer and dividend
disbursing agent for the Funds. The fee is based on the size, type, and number
of accounts and transactions made by shareholders.
FServ also maintains each Fund's accounting records for which it receives a fee.
The fee is based on the level of each Fund's average net assets for the period,
plus out-of-pocket expenses.
Wachovia Bank of North Carolina, N.A. is the Funds' custodian for which it
receives a fee. The fee is based on the level of each Fund's average net assets
for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses were initially borne by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five year period following the date that each Fund became effective. For the
six months ended May 31, 1995, pursuant to this agreement, the Funds paid FAS as
follows:
<TABLE>
<CAPTION>
Organizational
Initial Organizational Expenses
Fund Effective Date Expenses Reimbursed
<S> <C> <C> <C>
Money Market Fund 6/2/92 $63,357 $7,962
Tax-Free Fund 5/14/92 59,661 7,576
U.S. Treasury Fund 5/4/92 33,032 6,377
</TABLE>
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Ronald M. Petnuch
D. Dean Kaylor Vice President and Assistant Treasurer
Peter J. Germain
Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and
are not insured or guaranteed by the Federal Deposit Insurance Corporation, the
Federal
Reserve Board, or any other governmental agency. Investment in mutual funds
involves risk,
including possible loss of principal. Although money market funds seek to
maintain a
stable net asset value of $1.00 per share, there is no assurance that they
will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the Funds' prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
Federated Securities Corp.
is the distributor of the fund.
Cusip 090297201
Cusip 090297409
Cusip 090297888
