THE PILLAR
FUNDS
[GRAPHIC OMITTED]
(THE PILLAR FUNDS LOGO)
SEMI-ANNUAL
REPORT TO
SHAREHOLDERS
JUNE 30, 1996
(UNAUDITED)
<PAGE>
THE PILLAR FUNDS
================================================================================
To Our Shareholders:
Three factors have sustained the rising trend of stock market prices over the
last several years: generally declining interest rates, rapidly rising corporate
earnings and a growing appetite by the public investor for equity mutual funds.
During the last several quarters, these influences have started to wane.
Corporate earnings slowed significantly in the fourth quarter of 1995 and
interest rates reversed course in the first quarter of this year, leaving only
mutual fund flows to sustain the advance. And the character of the stock
market's advance has defined not only the magnitude of these flows, which have
been record-breaking this year, but also an increasing willingness to assume
risk by investing in funds oriented toward smaller companies traded primarily
over-the-counter. However, while indicators of small company investing still
show up well for the most recent quarter, they mask a significant shift in the
last month or so with the NASDAQ index dropping over 11% from its high. The
dollar flow to mutual funds is also starting to diminish with outright
redemptions occurring in some cases. All of these indicators suggest that we
have entered a more speculative phase in the stock market. Future investment
performance will be dependent on how the interest rate environment unfolds and
the health of the corporate income statement.
Economic growth reaccelerated in the second quarter as revived consumer spending
stimulated greater activity at the manufacturing level. The sixty four thousand
dollar question with respect to future growth is the ability of the consumer to
sustain the recent more robust spending patterns. We must be cautious on that
score. On the positive side, job creation has been quite healthy this year and
wage gains have seen a modest acceleration, leading to growing incomes. Activity
in the housing market and autos has been excellent, although housing may be
benefiting from the perverse impact on demand that a turn in interest rates
produces and the auto companies are back to offering rebates and other
incentives. Arguing for a more subdued environment are the sustained demographic
impact of the "baby boomers" as they reach an age where the propensity to save
tends to be the highest, the strained condition of the consumer's balance sheet
as evidenced by the rising trend of delinquencies on debt, and a likely squeeze
on discretionary spending caused by rising food and energy prices.
Also buttressing the argument for subdued growth are the diminished level of
corporate capital spending plans, the straightened circumstances of government
at all levels and the diminished economic health of many of our major trading
partners.
Much of the dramatic improvement in corporate profits over the last several
years has come from a focus on cost reduction and improvement in margins. While
the corporate world is not relaxing its scrutiny of the cost side of the ledger
(corporate layoffs for the first half of 1996 were a record), further general
gains for margins will be very difficult to come by. To grow profits, emphasis
must shift to the top line and stimulating sales will be, in many cases, an even
tougher task for corporate management in a world of low inflation and modest
income growth.
1
<PAGE>
THE PILLAR FUNDS (Continued)
================================================================================
The rise in interest rates this year has been ascribed to fears about rising
inflation. Food grains and energy are likely to cost significantly more than in
1995 and there has been some modest acceleration in the rate of gain in labor
costs. However, we can take heart from the experience of 1994 when many
industrial commodities advanced sharply in price without any affect showing in
the prices that the consumer paid. Also, this year's rise in rates has not been
validated by either a reaction from the price of gold or from the value of our
dollar versus any other major currencies. More to blame for the recent increase
may be the lower level of demand for U.S. Treasuries from other central banks,
particularly since last year their purchases accounted for more than the entire
amount of our nation's increase in federal debt. Most encouragingly from the
standpoint of keeping inflation under control, there are no signs that the U.S.
consumer has relaxed his vigilance and patience in waiting for the right price
before purchasing. Over the next twelve months, we expect to see long rates
significantly lower than they are today.
Our investment strategies are based on the assumptions that growth will be in
tight supply and that inflation will not present a problem. Opportunities
continue to exist in the equity market to develop sensible value and growth
strategies, the former built around a very diversified portfolio with an
emphasis on companies that are restructuring themselves and the latter based on
a more concentrated approach that stresses companies with the ability to
generate superior sales growth.
Sincerely,
/s/David G. Lee
David G. Lee
President and Chief Executive Officer
The Pillar Funds
/s/Fernando Garip
Fernando Garip
Vice President
Senior Investment Officer
United Jersey Bank
2
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
U.S. TREASURY SECURITIES
MONEY MARKET FUND
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--97.2%
U.S. Treasury Bills
4.905%, 07/05/96 $45,000 $ 44,976
5.415%, 07/25/96 55,000 54,821
5.482%, 08/01/96 90,000 89,629
5.035%, 08/08/96 60,000 59,692
5.342%, 08/15/96 60,000 59,627
5.330%, 08/22/96 50,000 49,636
5.418%, 08/29/96 40,000 39,669
5.450%, 09/12/96 40,000 39,584
-------
Total U.S. Treasury Obligations
(Cost $437,634) 437,634
-------
CASH EQUIVALENT--3.2%
SEI Liquid Asset Trust -
Treasury Portfolio 14,191 14,191
-------
Total Cash Equivalent
(Cost $14,191) 14,191
-------
Total Investments--100.4%
(Cost $451,825) 451,825
-------
OTHER ASSETS AND LIABILITIES--(0.4%)
Other Assets and Liabilities, Net (1,699)
-------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on 446,326,345
outstanding shares of beneficial
interest 446,326
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 3,642,790
outstanding shares of beneficial
interest 3,643
Accumulated net realized gain
on investments 157
--------
TOTAL NET ASSETS--100.0% $450,126
========
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER
SHARE--CLASS A $ 1.00
========
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE
AND REDEMPTION PRICE PER
SHARE--CLASS B $ 1.00
========
PRIME OBLIGATION
MONEY MARKET FUND
U.S. GOVERNMENT AGENCY
OBLIGATIONS--61.9%
Federal Farm Credit Bank
5.260%, 07/01/96 $ 5,000 5,000
3.960%, 07/02/96 2,000 2,000
4.810%, 07/10/96 10,000 9,987
4.970%, 07/19/96 5,000 4,987
5.070%, 07/26/96 3,200 3,188
5.300%, 08/01/96 5,000 5,000
5.240%, 08/26/96 5,000 4,959
5.320%, 09/03/96 5,000 5,000
5.410%, 10/01/96 5,000 5,000
Federal Home Loan Bank
5.356%, 07/01/96 5,000 5,000
4.200%, 07/03/96 10,000 9,997
4.770%, 07/10/96 5,000 4,994
4.980%, 07/15/96 5,000 4,990
4.940%, 07/17/96 10,000 9,977
5.140%, 07/29/96 5,000 4,979
5.100%, 07/31/96 10,000 9,956
5.110%, 08/05/96 5,000 4,975
5.120%, 08/14/96 5,000 4,968
5.140%, 08/21/96 5,000 4,963
5.310%, 09/12/96 5,000 4,946
5.560%, 12/27/96 5,000 5,000
5.525%, 01/03/97 5,000 5,000
5.430%, 01/10/97 5,000 5,000
5.300%, 01/16/97 5,000 5,000
5.255%, 01/29/97 5,000 5,000
5.245%, 02/06/97 5,000 5,000
5.250%, 02/07/97 5,000 5,000
5.050%, 02/21/97 5,000 5,000
5.265%, 03/13/97 5,000 5,000
5.400%, 03/25/97 5,000 4,996
3
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
PRIME OBLIGATION MONEY
MARKET FUND--CONTINUED
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--CONTINUED
Federal Home Loan
Bank--continued
5.590%, 04/01/97 $ 5,000 $ 5,000
5.670%, 04/24/97 5,000 5,000
5.705%, 05/01/97 5,000 5,000
5.875%, 05/16/97 5,000 5,000
5.760%, 05/28/97 4,675 4,675
5.925%, 06/13/97 5,000 5,000
Federal National Mortgage
Association
4.230%, 07/03/96 3,000 2,999
4.780%, 07/09/96 10,000 9,988
5.240%, 08/06/96 10,000 9,947
5.140%, 08/16/96 10,000 9,933
5.310%, 10/18/96 5,000 5,000
-------
Total U.S. Government Agency
Obligations
(Cost $232,404) 232,404
-------
COMMERCIAL PAPER--14.6%
American General Finance
5.210%, 07/10/96 5,000 4,993
5.210%, 08/12/96 5,000 4,969
Ford Motor Credit
4.990%, 07/15/96 5,000 4,990
5.140%, 07/29/96 5,000 4,980
General Electric Capital
4.970%, 07/11/96 5,000 4,993
5.200%, 08/05/96 5,000 4,974
Merrill Lynch
5.200%, 08/05/96 5,000 4,974
5.150%, 07/22/96 5,000 4,984
PHH Corporation
5.210%, 07/30/96 5,000 4,978
Travelers Group
5.020%, 07/12/96 10,000 9,984
-------
Total Commercial Paper
(Cost $54,819) 54,819
-------
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
CERTIFICATE OF DEPOSIT--1.3%
Deutsche Bank
5.270%, 07/18/96 $ 5,000 $ 5,000
-------
Total Certificate of Deposit
(Cost $5,000) 5,000
-------
REPURCHASE AGREEMENTS--23.5%
J.P. Morgan Securities
5.36% dated 06/28/96, matures
07/01/96, repurchase price
$16,528,935 (collateralized by
U.S. Treasury Notes, par value
$16,634,000, matures 03/31/98,
market value $16,853,932) (A) 16,522 16,522
Nomura Securities
5.36%, dated 06/28/96, matures
07/01/96, repurchase price
$71,967,863 (collateralized by
U.S. Treasury securities, par
value $224,758,000, maturity
dates ranging from 12/05/96
to 11/15/18, market value
$73,375,254) (A) 71,936 71,936
-------
Total Repurchase Agreements
(Cost $88,458) 88,458
-------
Total Investments--101.3%
(Cost $380,681) 380,681
-------
OTHER ASSETS AND LIABILITIES--(1.3%)
Other Assets and Liabilities, Net (5,000)
-------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on 367,573,649
outstanding shares of beneficial
interest 367,574
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 8,123,497
outstanding shares of beneficial
interest 8,123
4
<PAGE>
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
NET ASSETS:--CONTINUED
Accumulated net realized loss on
investments $ (16)
--------
TOTAL NET ASSETS--100.0% $375,681
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE--
CLASS A $ 1.00
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE--
CLASS B $ 1.00
========
(A) TRI PARTY REPURCHASE AGREEMENT.
TAX-EXEMPT MONEY
MARKET FUND
MUNICIPAL BONDS--98.1%
ALABAMA--2.2%
Stevenson, Industrial
Development Authority
Environmental Improvement,
Mead Project, (A) (C)
3.650%, 07/01/96 $1,700 1,700
--------
ARKANSAS--0.7%
Clark County, Reynolds Metals
Company Project,
(AMT) (A) (B) (C)
3.550%, 07/03/96 500 500
--------
CALIFORNIA--11.0%
Long Beach, (TRAN)
4.500%, 09/19/96 1,870 1,872
Los Angeles, Regional Airport
Improvement Corporation,
Sublease L, (A) (B) (C)
3.650%, 07/01/96 3,000 3,000
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
State, Pollution Control Financing
Authority, Burney Forest
Products, (AMT) (A) (B) (C)
3.650%, 07/01/96 $1,500 $ 1,500
State, School Cash Reserve
4.500%, 12/20/96 2,000 2,006
--------
8,378
--------
DELAWARE--3.3%
State, Economic Development
Authority (A) (B) (C)
3.600%, 07/03/96 2,500 2,500
--------
FLORIDA--3.9%
Alachua County, Refunding
Bonds (A) (B) (C)
3.650%, 07/01/96 700 700
Orange County, Housing
Finance Authority, Windscape
Project (A) (B) (C)
3.850%, 07/03/96 400 400
State, Housing Finance
Authority (A) (B) (C)
3.600%, 07/03/96 1,900 1,900
--------
3,000
--------
GEORGIA--2.6%
Marietta, Housing Authority,
Bells Ferry (B) (C)
3.550%, 01/15/09 2,000 2,000
--------
ILLINOIS--4.5%
State, Development Finance
Authority, Illinois Power
Project, Series B (A) (B) (C)
3.400%, 07/03/96 2,000 2,000
State, Health Facilities Authority,
Sisters Hospital Service,
Series E (MBIA) (A) (B) (C)
3.400%, 07/03/96 1,400 1,400
--------
3,400
--------
5
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
TAX-EXEMPT MONEY
MARKET FUND--CONTINUED
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
IOWA--0.6%
Polk County, Hospital Equipment
Improvement Authority,
(MBIA) (A) (B)
3.100%, 07/03/96 $ 450 $ 450
-------
LOUISIANA--6.3%
New Orleans, Aviation Board,
Series A (MBIA) (A) (B) (C)
3.250%, 07/03/96 900 900
New Orleans, Aviation Board,
Series B (MBIA) (A) (B) (C)
3.250%, 07/03/96 900 900
State, Public Facilities Authority,
Hospital Revenue (AMBAC)
(A) (B) (C)
3.300%, 07/03/96 1,000 1,000
State, Public Facilities Authority,
Willis-Knighton Medical
Center, (AMBAC) (A) (B)
3.300%, 07/03/96 2,000 2,000
-------
4,800
-------
MARYLAND--3.5%
Baltimore, Industrial Development
Authority (B) (C)
3.550%, 09/03/96 1,000 1,000
Howard County, Multi-Family
Housing Authority, Sherwood
Crossing Project (B) (C)
3.750%, 12/01/96 1,690 1,690
-------
2,690
-------
MICHIGAN--2.9%
State, Hospital Financing
Authority (A) (B) (C)
3.550%, 07/03/96 2,200 2,200
-------
MINNESOTA--1.8%
New Brighton, Industrial
Development Authority,
Unicare Nursing Homes
Project (A) (B) (C)
3.850%, 07/03/96 1,400 1,400
-------
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
MISSOURI--3.4%
Osage Beach, Industrial
Development Authority
(A) (B) (C)
3.650%, 07/01/96 $ 275 $ 275
Saint Charles County, Industrial
Development Authority, Cedar
Ridge Apartments (A) (B) (C)
3.350%, 07/03/96 685 685
Saint Louis County, Industrial
Development Authority,
Riverport Associates (A) (B) (C)
3.650%, 07/03/96 400 400
Springfield, Industrial
Development Authority,
Pebblecreek Apartments
(A) (B) (C)
3.200%, 07/03/96 1,200 1,200
-------
2,560
-------
NEW JERSEY--4.5%
Rutgers State University, Series A,
Prerefunded @ 102 (B) (C) (D)
8.100%, 05/01/97 1,000 1,055
State, (GO)
5.800%, 08/01/96 1,000 1,002
State, Economic Development
Authority, Peddie School
Project (A) (B) (C)
3.350%, 07/05/96 1,350 1,350
-------
3,407
-------
NEW MEXICO--1.7%
State, Student Loan Revenue,
Series 1-A (AMT) (C)
5.100%, 12/01/96 1,250 1,257
-------
NORTH CAROLINA--2.0%
Wake County, Carolina Power &
Light Company (A) (B) (C)
3.400%, 07/03/96 1,100 1,100
Winston Salem, Risk Acceptance
Management Corporation
(A) (B) (C)
3.150%, 07/03/96 400 400
-------
1,500
-------
6
<PAGE>
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
OHIO--4.0%
Cleveland, Waterworks Revenue
Series F-92 A (AMBAC)
5.200%, 01/01/97 $1,000 $ 1,007
Columbus, Series 1 T (A) (B)
3.000%, 07/05/96 1,000 1,000
State, Public Facilities
Commision,
Higher Education (C)
5.300%, 12/01/96 1,000 1,007
-------
3,014
-------
OREGON--1.3%
Port of Portland, Pollution
Control Authority,
Dates-Reynolds Metals
Project (A) (B) (C)
3.650%, 07/01/96 1,000 1,000
-------
TENNESSEE--7.6%
Morristown, Industrial
Development Board,
Williamhouse Regency
Project (A) (B) (C)
3.550%, 07/03/96 2,100 2,100
Nashville & Davidson Counties,
Old Hickory Towers, Series A
(A) (B) (C)
3.500%, 07/01/96 2,000 2,000
Sullivan County, Industrial
Development Authority,
Pollution Control Revenue
Mead Project (A) (B) (C)
3.650%, 07/01/96 1,700 1,700
-------
5,800
-------
TEXAS--17.8%
Corsicana, Industrial
Development Authority,
Kent Paper Company Project
AMT (A) (B) (C)
3.550%, 07/03/96 400 400
Harris County, Housing Finance
Authority, Idlewood Park
Project, Series A (A) (B) (C)
3.600%, 07/03/96 1,400 1,400
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
Hunt County, Industrial
Development Authority, Trico
Industries
(A) (B) (C)
3.600%, 07/02/96 $2,700 $ 2,700
Lone Star, Airport Authority,
Series A (A) (B) (C)
3.650%, 07/01/96 1,600 1,600
Lone Star, Airport Improvement
Authority (A) (B) (C)
3.650%, 07/01/96 1,600 1,600
State, Association of School
Boards, Series A (TAN)
4.750%, 08/30/96 1,000 1,001
State, Health Facilities
Development, Hospital
Revenues, Pool H-85A
(A) (B) (C)
3.400%, 07/03/96 3,000 3,000
State, Veterans Housing
Assistance Fund, Series II-E
(RB) (B)
3.900%, 11/06/96 1,500 1,500
Travis County, Housing Finance
Authority, Channings Mark
Apartments Project (A) (B) (C)
3.650%, 07/03/96 400 400
-------
13,601
-------
VIRGINIA--3.9%
Harrisonburg, Redevelopment
and Housing Authority, Rolling
Brook Village Apartments (B) (C)
3.500%, 02/01/08 1,935 1,935
Richmond, Capital Region
Authority, International Airport,
Series B (AMBAC) (A) (B) (C)
3.200%, 07/03/96 1,000 1,000
-------
2,935
-------
WASHINGTON--4.6%
Snohomish, Public Utility,
Electric Revenue, Prerefunded
@ 102 (RB) (B) (C) (D)
8.000%, 01/01/97 2,000 2,081
7
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
TAX-EXEMPT MONEY
MARKET FUND--CONTINUED
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
WASHINGTON--CONTINUED
State, Series 86-D, Prerefunded
@ 100 (GO) (B) (D)
8.000%, 09/01/96 $1,400 $ 1,410
-------
3,491
-------
WASHINGTON D.C.--1.4%
Abraham & Laura Lisner
Project (A) (B) (C)
3.400%, 07/03/96 1,100 1,100
-------
WISCONSIN--2.6%
Milwaukee, Revenue Anticipation
Note, Series A
3.500%, 02/27/97 2,000 1,998
-------
Total Municipal Bonds
(Cost $74,681) 74,681
-------
CASH EQUIVALENT--1.3%
SEI Institutional Tax-Free
Portfolio 1,003 1,003
-------
Total Cash Equivalent
(Cost $1,003) 1,003
-------
Total Investments--99.4%
(Cost $75,684) 75,684
-------
OTHER ASSETS AND LIABILITIES--0.6%
Other Assets and Liabilities, Net 429
-------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no par
value) based on 72,611,058
outstanding shares of beneficial
interest 72,611
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 3,508,250
outstanding shares of beneficial
interest 3,508
Accumulated net realized loss
on investments (6)
-------
TOTAL NET ASSETS--100.0% $76,113
=======
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 1.00
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE--CLASS B $ 1.00
=======
(A) FLOATING RATE INSTRUMENT WITH DEMAND FEATURES. THE RATE REFLECTED ON THE
STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON JUNE 30, 1996. THE DATE
SHOWN IS THE LONGER OF THE RESET DATE OR THE DEMAND DATE.
(B) PUT OR DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE NEXT DEMAND
DATE.
(C) SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT OR OTHER CREDIT
SUPPORT.
(D) PREREFUNDED SECURITY-THE MATURITY DATE SHOWN IS THE PREREFUNDED DATE.
AMT -- ALTERNATIVE MINIMUM TAX
GO -- GENERAL OBLIGATION
RB -- REVENUE BOND
TAN -- TAX ANTICIPATION NOTE
TRAN -- TAX AND REVENUE ANTICIPATION NOTE
THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT SUPPORT FOR CERTAIN
SECURITIES AS DEFINED IN THE STATEMENT OF NET ASSETS:
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
U.S. TREASURY SECURITIES
PLUS MONEY MARKET FUND
U.S. TREASURY OBLIGATIONS--52.6%
U.S. Treasury Bills
5.035%, 08/08/96 $3,000 2,984
5.330%, 08/22/96 3,000 2,979
5.000%, 08/29/96 3,000 2,975
5.110%, 09/12/96 3,000 2,969
5.000%, 09/19/96 6,000 5,933
5.090%, 10/03/96 3,000 2,960
8
<PAGE>
- --------------------------------------------------------------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--CONTINUED
U.S. Treasury Bills--continued
5.150%, 10/17/96 $ 6,000 $ 5,908
5.160%, 11/14/96 3,000 2,942
-------
Total U.S. Treasury Obligations
(Cost $29,650) 29,650
-------
REPURCHASE AGREEMENTS--47.8%
J.P. Morgan Securities
5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$2,439,158 (collateralized by
U.S. Treasury securities, par
value $4,041,375, maturity
dates ranging from 02/15/98 to
05/15/09, market value
$2,487,116) (A) 2,438 2,438
Lehman Brothers
5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$11,839,234 (collateralized by
U.S.Treasury Bill, par value
$12,245,000, matures
10/03/96, market value
$12,075,039) (A) 11,834 11,834
Nomura Securities
5.40%, dated 06/28/96, matures
07/01/96, repurchase price
$12,679,834 (collateralized by
U.S.Treasury securities, par
value $13,252,000, maturity
dates ranging from 11/30/97
to 08/15/23, market value
$12,927,936) (A) 12,674 12,674
-------
Total Repurchase Agreements
(Cost $26,946) 26,946
-------
Total Investments--100.4%
(Cost $56,596) 56,596
-------
OTHER ASSETS AND LIABILITIES--(0.4%)
Other Assets and Liabilities, Net (243)
-------
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
NET ASSETS:
Portfolio shares (unlimited
authorization--no par value)
based on 56,373,199 outstanding
shares of beneficial interest $56,373
Accumulated net realized loss
on investments (20)
-------
TOTAL NET ASSETS--100.0% $56,353
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $ 1.00
=======
(A) TRI PARTY REPURCHASE AGREEMENT.
SHORT-TERM
INVESTMENT FUND
CORPORATE BONDS--73.2%
American Express Credit
7.875%, 12/01/96 $ 275 277
American General Finance MTN
6.730%, 06/02/97 500 503
American Home Products
6.875%, 04/15/97 1,612 1,622
AT&T Capital MTN
7.590%, 01/31/97 600 606
4.790%, 02/03/97 1,000 994
Baxter International
9.250%, 09/15/96 1,390 1,399
Central Illinois Light
5.500%, 03/01/97 100 100
Chesapeake and Ohio Railroad
11.500%, 08/15/96 100 101
11.625%, 11/15/96 350 357
Chrysler Financial MTN
7.280%, 03/18/97 1,000 1,010
Consolidated Natural Gas
9.375%, 02/01/97 160 163
E.I. duPont de Nemours
8.450%, 10/15/96 1,057 1,065
Ford Motor Credit Coporation
8.000%, 10/01/96 110 111
Ford Motor Credit MTN
7.950%, 03/27/97 300 304
9
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
SHORT-TERM INVESTMENT
FUND--CONTINUED
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
CORPORATE BONDS--CONTINUED
Ford Motor Credit
7.875%, 01/15/97 $ 550 $ 556
General Electric Capital
8.750%, 11/26/96 300 304
8.000%, 02/01/97 50 51
General Motors
7.625%, 02/15/97 300 303
General Motors Acceptance
8.000%, 10/01/96 145 146
General Motors Acceptance MTN
8.250%, 08/29/96 250 251
7.900%, 05/01/97 500 507
Household Finance
7.500%, 03/15/97 1,000 1,011
Houston Power & Light
7.625%, 03/01/97 1,000 1,010
ITT Hartford
7.250%, 12/01/96 750 754
John Deere
9.125%, 07/01/96 500 500
John Deere Capital
4.625%, 09/02/96 300 299
Mobil
6.500%, 02/15/97 400 400
Morgan Stanley Group
7.320%, 01/15/97 250 252
Norwest Financial
7.100%, 11/15/96 100 101
Paccar Financial
6.050%, 09/12/96 389 389
Pepsico
7.000%, 11/15/96 390 391
Pepsico Capital (A)
0.000%, 04/01/97 233 224
Pfizer
7.125%, 10/01/96 1,075 1,079
Pitney Bowes Credit
5.625%, 02/15/97 1,600 1,600
Private Export Funding
8.150%, 04/30/97 500 508
Procter and Gamble
6.850%, 06/01/97 300 301
Public Service Electrical and Gas
7.100%, 04/07/97 1,500 1,509
Sears Roebuck
8.550%, 08/01/96 1,000 1,001
9.000%, 09/15/96 150 151
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
Shell Oil
6.000%, 01/15/97 $ 710 $ 711
Southern California Edison
5.900%, 01/15/97 361 361
Southern New England
Telecommunications
7.610%, 09/20/96 1,000 1,002
Texaco Capital
9.000%, 11/15/96 1,545 1,563
Transamerica Financial
7.875%, 02/15/97 1,000 1,013
U.S. West Capital
8.000%, 10/15/96 500 503
-------
Total Corporate Bonds
(Cost $27,393) 27,363
-------
U.S. TREASURY OBLIGATIONS--16.9%
U.S. Treasury Bills
5.579%, 04/03/97 1,500 1,438
5.688%, 05/29/97 3,000 2,850
U.S. Treasury Note
6.500%, 04/30/97 2,000 2,013
-------
Total U.S. Treasury Obligations
(Cost $6,303) 6,301
-------
U.S. GOVERNMENT AGENCY OBLIGATIONS--2.7%
Federal Home Loan Bank
5.555%, 05/22/97 1,000 997
-------
Total U.S. Government Agency
Obligations
(Cost $999) 997
-------
CASH EQUIVALENTS--7.2%
SEI Liquid Asset Trust -
Government Portfolio 1,589 1,590
SEI Liquid Asset Trust -
Treasury Portfolio 1,122 1,122
-------
Total Cash Equivalents
(Cost $2,712) 2,712
-------
Total Investments--100.0%
(Cost $37,407) 37,373
-------
10
<PAGE>
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
OTHER ASSETS AND LIABILITIES--0.0%
Other Assets and Liabilities, Net $ 1
-------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on 3,626,841
outstanding shares of beneficial
interest 36,327
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 149,307
outstanding shares of beneficial
interest 1,497
Distributions in excess of net investment
income (1)
Accumulated net realized loss on investments (55)
Net unrealized depreciation on investments (34)
-------
TOTAL NET ASSETS--100.0% $37,734
=======
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 9.99
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE--CLASS B $ 10.01
=======
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE--CLASS B ($10.01 / 99%) $ 10.11
=======
(A) ZERO COUPON BOND
MTN -- MEDIUM TERM NOTE
FIXED INCOME FUND
U.S. TREASURY OBLIGATIONS--48.6%
U.S. Treasury Notes
5.625%, 10/31/97 $ 4,250 4,234
5.375%, 11/30/97 10,000 9,921
7.250%, 02/15/98 5,000 5,091
6.375%, 01/15/00 4,000 4,000
6.375%, 08/15/02 30,000 29,746
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
U.S. Treasury STRIPS
6.656%, 08/15/03 $4,800 $ 3,010
-------
Total U.S. Treasury Obligations
(Cost $57,186) 56,002
-------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--23.6%
Federal Farm Credit Bank
8.650%, 10/01/99 1,000 1,062
Federal Home Loan Bank
7.780%, 10/19/01 2,000 2,095
6.500%, 11/29/05 500 480
Federal National Mortgage
Association
7.600%, 01/10/97 1,000 1,010
7.050%, 12/10/98 1,000 1,016
7.200%, 01/10/02 2,000 1,997
7.900%, 04/10/02 1,000 1,003
7.800%, 06/10/02 1,000 1,003
7.000%, 08/12/02 4,000 3,954
6.950%, 09/10/02 1,000 984
6.450%, 06/10/03 2,000 1,926
6.200%, 07/10/03 2,000 1,894
6.240%, 08/19/03 2,000 1,897
5.930%, 09/26/03 1,750 1,648
5.750%, 10/24/03 1,000 931
6.200%, 11/12/03 1,000 945
6.400%, 01/13/04 2,500 2,376
6.850%, 09/12/05 1,000 964
-------
Total U.S. Government Agency
Obligations
(Cost $27,568) 27,185
-------
CORPORATE BONDS--22.4%
Anheuser Busch
6.750%, 06/01/05 1,000 970
AT&T
7.500%, 06/01/06 1,000 1,025
Boeing
6.350%, 06/15/03 2,000 1,943
E.I. duPont de Nemours
6.000%, 12/01/01 2,000 1,918
6.750%, 10/15/02 1,000 996
11
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
FIXED INCOME FUND--CONTINUED
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
CORPORATE BONDS--CONTINUED
Eli Lilly
6.250%, 03/15/03 $2,000 $ 1,935
Emerson Electric
6.300%, 11/01/05 500 473
Ford Capital BV
9.125%, 05/01/98 1,000 1,046
Ford Motor Credit
6.375%, 10/06/00 1,000 981
Gannett
5.850%, 05/01/00 1,000 966
General Electric Capital
8.750%, 11/26/96 2,500 2,530
5.500%, 11/01/01 1,000 935
H.J. Heinz
6.875%, 01/15/03 1,000 995
New York Telephone
6.250%, 02/15/04 1,000 944
Philip Morris
7.500%, 01/15/02 2,000 2,030
SmithKline Beecham MTN
6.625%, 10/01/05 2,000 1,900
Union Pacific
6.125%, 01/15/04 1,000 932
U.S. West Communications
6.125%, 11/15/05 2,000 1,853
Wal-Mart Stores
6.500%, 06/01/03 500 487
5.875%, 10/15/05 1,000 914
-------
Total Corporate Bonds
(Cost $26,275) 25,773
-------
CASH EQUIVALENTS--4.5%
SEI Liquid Asset Trust -
Treasury Portfolio 1,836 1,836
SEI Liquid Asset Trust
Government Portfolio 3,339 3,339
-------
Total Cash Equivalents
(Cost $5,175) 5,175
-------
Total Investments--99.1%
(Cost $116,204) 114,135
-------
- --------------------------------------------------------------
MARKET
DESCRIPTION VALUE (000)
- --------------------------------------------------------------
OTHER ASSETS AND LIABILITIES--0.9%
Other Assets and Liabilities, Net $ 1,023
--------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on
10,777,104 outstanding
shares of beneficial
interest 110,167
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 652,756
outstanding shares of beneficial
interest 7,160
Accumulated net realized loss
on investments (100)
Net unrealized depreciation
on investments (2,069)
--------
TOTAL NET ASSETS--100.0% $115,158
========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 10.08
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE--CLASS B $ 10.07
========
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE--CLASS B ($10.07 / 96%) $ 10.49
========
MTN -- MEDIUM TERM NOTE
STRIPS -- SEPARATE TRADING OF REGISTERED INTEREST AND PRINCIPAL OF SECURITIES
12
<PAGE>
================================================================================
NEW JERSEY MUNICIPAL
SECURITIES FUND
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
MUNICIPAL BONDS--98.3%
NEW JERSEY--97.0%
Atlantic County, (GO) (MBIA)
5.400%, 12/01/05 $300 $ 303
Bergen County, General
Improvement Bonds, (GO)
5.250%, 08/15/00 300 309
4.700%, 07/15/02 400 401
Bergen County, Utilities Authority,
Series A, (RB) (FGIC)
6.100%, 06/15/04 250 268
Bridgeton, (GO) (AMBAC)
5.000%, 01/01/05 300 296
Bridgewater & Raritan, (GO)
6.125%, 05/01/05 200 208
6.125%, 05/01/06 100 103
Burlington County, (GO)
4.400%, 03/15/01 500 493
Camden County, (GO) (FGIC)
5.000%, 02/01/04 200 200
5.000%, 02/01/08 500 478
Camden County, (GO) (MBIA)
5.000%, 06/01/99 100 102
5.600%, 06/01/03 200 207
Camden, School District, (RB) (FSA)
4.000%, 10/01/98 300 298
Cape May County, (GO) (AMBAC)
5.850%, 04/15/01 150 156
Cape May County, Municipal
Utilities Authority, (RB)
(AMBAC)
5.000%, 08/01/03 500 503
Cape May County, Municipal
Utilities Authority, Series B,
(RB) (FGIC)
3.800%, 01/01/98 250 248
4.500%, 01/01/03 500 488
Dover Township, (GO) (AMBAC)
6.000%, 10/15/03 200 215
Dover, Municipal Utilities
Authority, Series F, (RB) (MBIA)
4.200%, 02/15/99 300 298
Edgewater Borough, (GO) (MBIA)
5.100%, 09/15/00 300 306
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
Edison Township, (AMBAC)
4.800%, 01/01/05 $300 $ 291
Edison Township, (GO) (AMBAC)
4.500%, 01/01/02 500 488
Edison Township, (GO)
4.700%, 06/01/98 250 252
5.400%, 06/01/02 250 257
Essex County, Improvement
Authority, (RB) (AMBAC)
4.875%, 12/01/02 300 300
5.000%, 12/01/08 250 238
Essex County, Ultilities Authority,
Solid Waste Revenue, (RB) (FSA)
5.000%, 04/01/04 250 246
Fort Lee, (GO)
4.850%, 02/01/02 250 250
Franklin Township, (GO)
5.600%, 11/01/05 300 309
Galloway Township, (GO)
(AMBAC)
5.000%, 12/15/09 350 333
Gloucester County, (GO)
5.000%, 09/01/03 500 493
Gloucester County, General
Improvement, Series A,
(GO) (AMBAC)
4.500%, 01/01/03 200 195
Gloucester County, Improvement
Authority, Landfill Project,
Series A, (RB)
6.000%, 09/01/06 300 312
Gloucester Township, Municipal
Utilities Authority, (RB)
(AMBAC)
4.800%, 03/01/02 300 299
Hackensack, (GO)
6.100%, 06/01/05 250 262
Hackettstown, Municipal Utilities
Authority, Series F, (RB) (FGIC)
5.050%, 10/01/04 500 498
Hillsborough Township, Board
of Education (COP) (FSA)
5.500%, 12/15/99 250 258
13
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
NEW JERSEY MUNICIPAL
SECURITIES FUND--CONTINUED
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
NEW JERSEY--CONTINUED
Long Branch, Sewer Authority,
(RB) (FGIC)
5.200%, 06/01/05 $500 $ 501
Maple Shade Township, (GO)
(AMBAC)
4.300%, 10/01/99 200 200
Maplewood Township, (GO)
4.000%, 12/01/99 200 197
Mercer County, Improvement
Authority, Ewing Board of
Education Project, (RB) (MBIA)
6.300%, 05/15/07 250 273
Mercer County, Improvement
Authority, Hamilton Board of
Education Project, (RB) (MBIA)
5.500%, 06/01/01 200 206
4.900%, 12/15/05 300 294
Middlesex County, (GO)
3.900%, 07/15/97 300 301
4.050%, 07/15/98 100 100
4.500%, 07/15/01 500 497
4.350%, 01/15/02 300 293
Middlesex County, Improvement
Authority, (RB)
4.000%, 03/01/98 150 150
4.150%, 03/01/99 250 248
4.350%, 03/01/01 250 247
Middletown Township, Sewer
Authority, Series A, (RB) (FGIC)
4.900%, 01/01/05 300 294
Monmouth County, (RB)
4.500%, 10/01/98 500 503
4.200%, 07/15/99 250 247
4.750%, 07/15/03 200 197
Moorestown Township, (GO)
(AMBAC)
6.000%, 09/01/07 300 311
Moorestown Township, (GO)
5.000%, 02/01/12 150 140
5.000%, 02/01/15 150 136
Morris Plains, (GO)
5.000%, 07/01/04 200 196
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
Mount Laurel Township, (GO)
4.650%, 08/01/05 $500 $ 476
New Brunswick, (GO) (FGIC)
4.000%, 10/01/97 200 200
New Brunswick, Parking
Authority, (RB) (FGIC)
4.300%, 09/01/99 300 299
North Bergen Township, (MBIA)
4.400%, 08/01/01 500 486
North Bergen Township, Municipal
Utilities Authority, (RB) (FGIC)
4.800%, 12/15/03 300 296
North Jersey, District Water Supply,
Wanaque South Project, (MBIA)
5.400%, 07/01/02 300 308
Ocean County, (GO)
4.600%, 11/01/03 500 489
Ocean Township, (GO) (MBIA)
5.400%, 06/01/15 250 238
Parsippany Troy Hills
Township, (GO)
4.500%, 02/01/01 500 494
4.700%, 12/01/03 500 489
4.700%, 12/01/04 600 582
Passaic County, (GO)
4.700%, 09/01/03 250 245
Passaic County, (GO) (FGIC)
4.750%, 09/01/04 500 489
5.550%, 04/01/09 250 252
Passaic County, (GO) (MBIA)
4.350%, 05/01/03 200 191
4.450%, 05/01/04 200 192
Pequannock-Lincoln Park, Sewer
Authority, (RB) (MBIA)
4.400%, 12/01/02 500 488
Piscataway Township, (GO)
(STAID)
4.050%, 03/01/02 300 285
Pleasantville, (GO) (MBIA)
4.350%, 10/01/00 400 394
Port Authority of New York &
New Jersey, (RB)
5.300%, 08/01/03 300 308
14
<PAGE>
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
NEW JERSEY--CONTINUED
Princeton, (GO)
4.400%, 09/01/01 $300 $ 296
Roselle, (GO) (MBIA)
4.750%, 10/15/04 500 488
Roxbury, (COP)
5.000%, 10/15/00 250 250
Rutgers State University,
Series A, (RB)
4.375%, 05/01/01 500 489
Rutgers State University,
Series S, (RB)
5.000%, 05/01/04 500 497
Somerset County, (GO)
5.000%, 10/01/02 200 203
4.450%, 12/01/02 500 492
4.350%, 12/01/04 300 284
Somerset Raritan Valley, Sewer
Improvement Authority,
Series H, (RB)
5.150%, 07/01/01 300 305
South Brunswick Township, (GO)
6.300%, 04/01/04 250 265
South Jersey Transportation
Authority, Transportation
Systems, Series B, (RB) (MBIA)
5.500%, 11/01/02 250 257
State, (GO)
4.750%, 02/15/98 300 302
5.100%, 02/15/00 500 509
5.300%, 02/15/02 600 616
5.400%, 02/15/03 300 309
State, Building Authority, (RB)
4.400%, 06/15/03 500 480
4.500%, 06/15/04 500 477
4.700%, 06/15/06 250 238
State, Economic Development
Authority, Series A, (RB) (MBIA)
5.125%, 07/01/00 300 303
5.400%, 07/01/02 300 304
State, Educational Facilities
Authority, Medicine and
Dentistry, Series B, (RB)
(AMBAC)
5.000%, 12/01/07 250 242
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
State, Educational Facilities
Authority, Rowan College,
Series C, (RB) (MBIA)
4.300%, 07/01/98 $300 $ 300
5.250%, 07/01/05 300 301
State, Educational Facilities
Authority, Series A, (RB)
(AMBAC)
5.125%, 09/01/06 300 298
State, Educational Facilities
Authority, Stockton State
College, Series B, (RB) (AMBAC)
6.200%, 07/01/04 300 322
State, Health Care Facilities
Authority, Atlantic City
Medical Center, (RB) (AMBAC)
5.000%, 07/01/02 300 301
State, Health Care Facilities
Authority, Chilton Memorial
Hospital, (RB)
6.550%, 07/01/03 300 315
State, Health Care Facilities
Authority, Hackensack Medical
Center, (RB) (MBIA)
5.100%, 07/01/03 500 502
State, Health Care Facilities
Authority, JFK Health Systems,
(RB) (FGIC)
4.600%, 07/01/05 250 238
State, Health Care Facilities
Authority, Mountain Side
Hospital, (RB) (FGIC)
6.000%, 07/01/00 300 316
State, Health Care Facilities
Authority, Shore Memorial
Healthcare Systems, (RB) (FGIC)
4.800%, 07/01/03 200 197
State, Health Care Facilities
Authority, Somerset Medical
Center, (RB) (MBIA)
4.500%, 07/01/03 500 485
15
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
NEW JERSEY MUNICIPAL
SECURITIES FUND--CONTINUED
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
NEW JERSEY--CONTINUED
State, Health Care Facilities,
St. Peters Medical Center,
Series F, (RB) (MBIA)
5.000%, 07/01/13 $100 $ 91
State, Health Care Facilities
Authority, Underwood
Memorial Hospital, (RB) (MBIA)
3.750%, 07/01/96 300 300
4.500%, 07/01/04 500 481
State, Highway Authority, Garden
State Parkway, (RB)
5.300%, 01/01/99 250 255
State, Housing & Mortgage
Finance Agency, (RB) (AMBAC)
5.300%, 05/01/06 200 200
State, Housing & Mortgage Finance
Agency, Home Buyer, Series N,
(RB) (AMBAC)
4.000%, 10/01/98 200 200
4.200%, 04/01/99 200 201
State, Series E, (GO)
5.000%, 07/15/04 100 100
State, Sports & Exposition
Authority, Series A, (RB)
5.000%, 09/01/06 315 309
State, Transportation Trust
Authority, Transportation
System, Series A, (RB)
5.600%, 06/15/98 200 205
4.600%, 06/15/01 500 497
State, Transportation Trust
Authority, Transportation
System, Series A, (RB) (MBIA)
4.625%, 06/15/02 500 494
5.500%, 06/15/13 250 244
State, Turnpike Authority, Series A,
(RB) (AMBAC)
5.700%, 01/01/01 300 307
5.900%, 01/01/04 200 207
6.400%, 01/01/07 300 318
State, Wastewater Treatment
Authority, (RB) (AMBAC)
4.250%, 03/01/99 500 497
4.250%, 03/01/00 500 493
4.400%, 03/01/04 500 478
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
Stony Brook, Sewer Authority, (RB)
4.500%, 12/01/00 $500 $ 499
Union County, (GO)
4.400%, 10/01/04 500 479
Union County, Environmental
Improvement Authority, (RB)
4.900%, 04/01/02 250 251
5.150%, 04/01/05 500 506
Wanaque Valley, Sewer Authority,
Series B, (RB) (AMBAC)
5.100%, 09/01/03 300 301
Warren County, Pollution Control
Finance Authority, Series B,
(RB) (MBIA)
5.700%, 12/01/03 300 316
Wayne Township, (GO)
5.450%, 10/01/04 250 255
West New York, Municipal Utilities
Authority, (RB) (FGIC)
4.000%, 12/15/99 500 492
West Windsor Township, (GO)
6.000%, 10/15/05 200 205
Western Monmouth, Utilities
Authority, Series A , (RB) (AMBAC)
4.400%, 02/01/01 250 246
Woodbridge Township, Sewer
Utility Authority, Series B, (GO)
4.250%, 09/15/01 500 485
4.450%, 09/15/03 300 287
5.000%, 09/15/10 250 232
--------
45,505
--------
PUERTO RICO--1.3%
Puerto Rico, Public Buildings
Authority, Series A, (RB)
(AMBAC)
4.400%, 07/01/00 300 297
Puerto Rico, Telephone Authority,
Series M, (RB) (MBIA)
4.400%, 01/01/99 300 299
--------
596
--------
Total Municipal Bonds
(Cost $46,162) 46,101
--------
Total Investments--98.3%
(Cost $46,162) 46,101
--------
16
<PAGE>
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
OTHER ASSETS AND LIABILITIES--1.7%
Other Assets and Liabilities, Net $ 789
------
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
2,262,199 outstanding shares of beneficial
interest 23,978
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 2,177,964
outstanding shares of beneficial
interest 23,304
Accumulated net realized loss
on investments (331)
Net unrealized depreciation
on investments (61)
-------
TOTAL NET ASSETS--100.0% $46,890
=======
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 10.56
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE--CLASS B $ 10.56
=======
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE--CLASS B ($10.56 / 99%) $ 10.67
=======
COP -- CERTIFICATE OF PARTICIPATION
GO -- GENERAL OBLIGATION
RB -- REVENUE BOND
THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT
SUPPORT FOR CERTAIN SECURITIES AS DEFINED IN THE STATEMENT OF NET ASSETS:
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
FGIC -- FEDERAL GUARANTY INSURANCE CORPORATION
FSA -- FINANCIAL SECURITY ASSURANCE
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
STAID -- STATE AID WITHHOLDING
INTERMEDIATE-TERM
GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--46.5%
U.S. Treasury Notes
7.500%, 12/31/96 $ 200 $ 202
6.500%, 05/15/97 500 503
5.750%, 09/30/97 2,000 1,996
4.750%, 10/31/98 1,000 969
5.125%, 11/30/98 1,500 1,464
5.000%, 01/31/99 1,000 971
6.750%, 06/30/99 1,000 1,012
7.750%, 12/31/99 500 521
6.875%, 03/31/00 1,300 1,320
5.875%, 06/30/00 500 490
5.750%, 10/31/00 2,000 1,948
5.625%, 11/30/00 2,000 1,937
6.625%, 06/30/01 1,000 1,006
-------
Total U.S. Treasury Obligations
(Cost $14,439) 14,339
-------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--50.8%
Federal Farm Credit Bank
5.250%, 05/26/98 1,000 981
Federal Home Loan Bank
6.320%, 12/04/97 500 502
6.100%, 02/17/00 1,000 982
5.800%, 07/26/00 1,000 967
5.250%, 09/01/00 500 475
5.040%, 10/26/00 500 471
5.800%, 02/20/01 500 479
Federal Home Loan Mortgage
Corporation
6.130%, 08/19/99 500 496
5.875%, 03/15/00 1,000 975
5.400%, 11/01/00 1,000 950
Federal National Mortgage
Association
6.050%, 11/10/97 500 501
6.350%, 08/10/99 750 748
7.240%, 09/02/99 500 505
7.000%, 04/30/01 750 749
7.140%, 08/15/02 800 794
7.200%, 08/19/02 500 497
6.250%, 01/13/03 1,000 956
6.720%, 02/25/03 1,000 975
17
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
INTERMEDIATE-TERM
GOVERNMENT SECURITIES FUND--CONTINUED
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--CONTINUED
Federal National Mortgage
Association--continued
7.370%, 05/14/03 $ 750 $ 749
5.930%, 09/26/03 1,000 942
7.600%, 05/24/06 1,000 997
-------
Total U.S. Government Agency
Obligations
(Cost $16,047) 15,691
-------
CASH EQUIVALENT--1.5%
SEI Liquid Asset Trust -
Government Portfolio 465 465
-------
Total Cash Equivalent
(Cost $465) 465
-------
Total Investments--98.8%
(Cost $30,951) 30,495
-------
OTHER ASSETS AND LIABILITIES--1.2%
Other Assets and Liabilities, Net 373
-------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on
2,738,291 outstanding
shares of beneficial
interest 29,027
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 327,515
outstanding shares of beneficial
interest 3,578
Distributions in excess of net
investment income (8)
Accumulated net realized loss
on investments (1,273)
Net unrealized depreciation
on investments (456)
-------
TOTAL NET ASSETS--100.0% $30,868
=======
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 10.07
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE--CLASS B $ 10.07
=======
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE--CLASS B ($10.07 / 96%) $ 10.49
=======
PENNSYLVANIA MUNICIPAL
SECURITIES FUND
MUNICIPAL BONDS--97.7%
PENNSYLVANIA--93.8%
Allegheny County, Series C-44,
(GO) (FGIC)
5.200%, 06/01/08 $150 147
Allentown, Water Improvement
Authority, (RB) (AMBAC)
4.850%, 07/15/01 150 149
Beaver County, Series A, (GO)
(FGIC)
4.750%, 10/01/03 100 98
Berks County, Series 2 (GO)
(FGIC)
4.700%, 05/15/05 150 144
Bethel Park, School District,
(GO) (FGIC)
5.000%, 08/01/04 150 149
Bethlehem, School District,
(GO) (FGIC)
4.600%, 09/01/00 150 149
Chester County, (GO)
5.500%, 11/15/10 25 25
Chester County, Health and
Education Facilities Authority
Main Line Health Systems,
Series A, (RB)
5.400%, 05/15/09 50 48
Erie County, (GO) (FGIC)
5.250%, 09/01/12 95 91
18
<PAGE>
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
PENNSYLVANIA--CONTINUED
Fort Cherry, School District
Authority, (GO) (AMBAC)
4.900%, 10/01/08 $100 $ 94
Geisinger, Health System
Authority, (RB)
7.375%, 07/01/02 75 81
Lancaster, Higher Education
Authority, Franklin & Marshall
College, (RB) (MBIA)
5.650%, 04/15/10 110 110
Langhorne Manor Borough,
Higher Education and Health
Authority, Wood Services, (RB)
6.400%, 11/15/06 150 160
Lehigh County, General Purpose
Authority, St. Luke's Hospital,
(RB) (AMBAC)
4.750%, 11/15/00 100 100
Lycoming County, Pennsylvania
College of Technology, (RB)
(AMBAC)
5.000%, 11/01/02 150 150
North Allegheny, School District,
Series A, (GO) (AMBAC)
5.850%, 11/01/02 150 157
Pittsburgh, Water and Sewer
Authority, Series A, (RB) (FGIC)
5.000%, 09/01/08 125 118
Pittsburgh, Urban Redevelopment
Authority, (RB) (A)
5.750%, 10/01/14 100 99
Southern York County, School
District Authority, (GO) (FSA)
5.000%, 09/01/12 105 96
State, Brookville Area School
District Project, Series G,
(RB) (MBIA)
4.850%, 11/15/02 150 148
State, Higher Education Authority,
Series I, (RB) (AMBAC)
5.000%, 06/15/03 100 99
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
State, Higher Education Authority,
Thomas Jefferson University,
Series A, (RB)
6.625%, 08/15/09 $ 50 $ 54
State, Higher Education Authority,
University of Pennsylvania,
Series A, (RB)
5.600%, 01/01/10 150 149
State, Refunding and Projects
Authority, Series 1, (GO)
5.000%, 04/15/07 130 124
State, School Building Authority,
Delaware County Community
College, (RB) (MBIA)
5.200%, 04/01/08 250 241
State, Second Series, (GO)
5.500%, 07/01/01 150 154
State, Series 2 (GO)
6.250%, 07/01/11 50 53
State, Series 3, (GO)
5.000%, 09/01/11 100 92
Swarthmore College, (RB)
7.375%, 09/15/18 50 54
Wattsburg, School District, (GO)
(AMBAC)
5.700%, 04/01/04 75 78
Wayne County, Hospital and
Health Authority, Wayne
Memorial Hospital, (GO) (MBIA)
5.375%, 07/01/12 100 96
Westmoreland County, Series C,
(GO) (MBIA)
4.400%, 10/01/00 150 149
York County, Southwestern School
District Authority, (GO) (FGIC)
5.000%, 06/15/09 100 96
-------
3,752
-------
GUAM--3.9%
Guam, Power Authority, (RB)
(AMBAC)
6.000%, 10/01/09 150 155
-------
Total Municipal Bonds
(Cost $3,919) 3,907
-------
19
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
PENNSYLVANIA MUNICIPAL
SECURITIES FUND--CONTINUED
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
CASH EQUIVALENT--1.3%
PNC Pennsylvania Tax-Free
Money Market Fund $54 $ 54
------
Total Cash Equivalent
(Cost $54) 54
------
Total Investments--99.0%
(Cost $3,973) 3,961
------
OTHER ASSETS AND LIABILITIES--1.0%
Other Assets and Liabilities, Net 39
------
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
367,549 outstanding shares of beneficial
interest 3,677
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 33,991
outstanding shares of beneficial
interest 346
Accumulated net realized loss
on investments (11)
Net unrealized depreciation
on investments (12)
------
TOTAL NET ASSETS--100.0% $4,000
======
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 9.96
======
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE--CLASS B $ 9.96
======
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE--CLASS B ($9.96 / 99%) $10.06
======
(A) FLOATING RATE INSTRUMENT WITH DEMAND FEATURES. THE RATE REFLECTED ON THE
STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON JUNE 30, 1996. THE DATE
SHOWN IS THE LONGER OF THE RESET DATE OR THE DEMAND DATE.
GO -- GENERAL OBLIGATION
RB -- REVENUE BOND
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT SUPPORT FOR CERTAIN
SECURITIES AS DEFINED IN THE STATEMENT OF NET ASSETS:
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FSA -- FINANCIAL SECURITY ASSURANCE
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
GNMA FUND
U.S. AGENCY MORTGAGE-BACKED
BONDS--92.2%
Government National Mortgage
Association
8.000%, 04/15/23 $ 48 $ 49
8.000%, 05/15/23 345 349
7.000%, 06/15/23 151 145
6.000%, 10/15/23 179 162
6.000%, 11/15/23 955 864
6.500%, 11/15/23 820 764
7.000%, 11/15/23 81 78
6.000%, 12/15/23 1,362 1,233
6.500%, 12/15/23 439 410
7.000%, 12/15/23 891 855
6.000%, 01/15/24 187 169
6.000%, 01/20/24 905 815
8.000%, 08/15/24 445 449
8.000%, 09/15/24 1,220 1,233
7.500%, 08/15/25 303 299
------
Total U.S. Agency Mortgage-Backed
Bonds
(Cost $8,192) 7,874
------
U.S. TREASURY OBLIGATIONS--6.4%
U.S. Treasury Note
7.250%, 11/30/96 350 353
U.S. Treasury Bond
13.125%, 05/15/01 150 191
------
Total U.S. Treasury Obligations
(Cost $545) 544
------
20
<PAGE>
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
CASH EQUIVALENT--1.0%
SEI Liquid Asset Trust -
Government Portfolio $ 85 $ 85
------
Total Cash Equivalent
(Cost $85) 85
------
Total Investments--99.6%
(Cost $8,822) 8,503
------
OTHER ASSETS AND LIABILITIES--0.4%
Other Assets and Liabilities, Net 34
------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on
737,848 outstanding shares
of beneficial interest 7,860
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 166,714
outstanding shares of beneficial
interest 1,795
Accumulated net realized loss
on investments (799)
Net unrealized depreciation
on investments (319)
------
TOTAL NET ASSETS--100.0% $8,537
======
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 9.44
======
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE--CLASS B $ 9.43
======
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE--CLASS B ($9.43 / 97%) $ 9.72
======
EQUITY VALUE FUND
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
COMMON STOCK--86.0%
AEROSPACE & DEFENSE--1.9%
Raytheon 40,000 $ 2,065
--------
AIRCRAFT--3.5%
Boeing 16,500 1,438
United Technologies 20,000 2,300
--------
3,738
--------
AUTOMOTIVE--4.8%
Borg-Warner Automotive 35,000 1,382
Chrysler 25,000 1,550
Echlin 60,000 2,273
--------
5,205
--------
BANKS--5.8%
Boatmen's Bancshares 50,000 2,006
Citicorp 25,000 2,066
J.P. Morgan 25,000 2,116
--------
6,188
--------
CHEMICALS--1.5%
Monsanto 50,000 1,625
--------
COMPUTERS & SERVICES--5.4%
Compaq Computer* 40,000 1,970
Hewlett Packard 20,000 1,992
Microsoft * 15,000 1,802
--------
5,764
--------
CONTAINERS & PACKAGING--1.2%
Crown Cork & Seal 30,000 1,350
--------
DRUGS--4.7%
Bristol-Myers Squibb 15,000 1,350
Merck 25,000 1,616
Pfizer 30,000 2,141
--------
5,107
--------
ELECTRICAL & ELECTRONIC
PRODUCTS--4.5%
Emerson Electric 25,000 2,259
General Electric 30,000 2,595
--------
4,854
--------
21
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
EQUITY VALUE
FUND--CONTINUED
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
ELECTRICAL UTILITIES--1.3%
FPL Group 30,000 $ 1,380
--------
FINANCIAL SERVICES--3.7%
American Express 45,000 2,008
Federal National Mortgage
Association 60,000 2,010
--------
4,018
--------
FOOD, BEVERAGE & TOBACCO--9.6%
Anheuser Busch 20,000 1,500
CPC International 25,000 1,800
Nestle S.A., ADR 25,000 1,427
PepsiCo 60,000 2,122
Sara Lee 40,000 1,295
Unilever NV, ADR 15,000 2,177
--------
10,321
--------
GAS/NATURAL GAS--1.7%
Consolidated Natural Gas 35,000 1,829
--------
HOUSEHOLD PRODUCTS--3.6%
Colgate-Palmolive 20,000 1,695
Procter & Gamble 20,000 1,813
Whirlpool 10,000 496
--------
4,004
--------
INSURANCE--3.5%
American International Group 20,000 1,973
CIGNA 15,000 1,768
--------
3,741
--------
MANUFACTURING--1.3%
Minnesota Mining &
Manufacturing 20,000 1,380
--------
PETROLEUM & FUEL PRODUCTS--2.0%
Schlumberger 25,000 2,106
--------
PETROLEUM REFINING--7.2%
Amoco 20,000 1,447
Exxon 20,000 1,738
Mobil 20,000 2,242
Royal Dutch Petroleum 15,000 2,306
--------
7,733
--------
- --------------------------------------------------------------
SHARES/FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
PRINTING & PUBLISHING--2.6%
Gannett 20,000 $ 1,415
Time Warner 35,000 1,374
--------
2,789
--------
RAILROADS--4.2%
Burlington Northern Santa Fe 20,000 1,617
Union Pacific 41,000 2,865
--------
4,482
--------
RETAIL--2.4%
J.C. Penney 30,000 1,575
Sears Roebuck 20,000 973
--------
2,548
--------
SEMI-CONDUCTORS/
INSTRUMENTS--2.4%
Intel 30,000 2,203
Memc Electronic Materials* 10,000 388
--------
2,591
--------
TELEPHONES &
TELECOMMUNICATION--6.1%
Ameritech 25,000 1,484
AT&T 30,000 1,860
Bell Atlantic 25,000 1,594
BellSouth 20,000 847
SBC Communications 15,000 739
--------
6,524
--------
WHOLESALE--1.1%
Safeguard Scientifics* 15,000 1,170
--------
Total Common Stock
(Cost $74,842) 92,512
--------
CASH EQUIVALENTS--9.2%
SEI Liquid Asset Trust -
Government Portfolio $5,044 5,044
SEI Liquid Asset Trust -
Treasury Portfolio 4,803 4,803
--------
Total Cash Equivalents
(Cost $9,847) 9,847
--------
Total Investments--95.2%
(Cost $84,689) 102,359
--------
22
<PAGE>
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
OTHER ASSETS AND LIABILITIES--4.8%
Other Assets and Liabilities, Net $ 5,148
--------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on
7,095,335 outstanding
shares of beneficial interest 75,205
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 663,850
outstanding shares of beneficial
interest 7,751
Distributions in excess of net investment
income (3)
Accumulated net realized gain
on investments 6,884
Net unrealized appreciation
on investments 17,670
--------
TOTAL NET ASSETS--100.0% $107,507
========
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 13.85
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE--CLASS B $ 13.87
========
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE--CLASS B ($13.87 / 96%) $ 14.45
========
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
EQUITY INCOME FUND
COMMON STOCK--93.8%
AEROSPACE & DEFENSE--4.4%
Raytheon 26,000 1,342
Rockwell International 22,000 1,260
--------
2,602
--------
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
AIRCRAFT--4.6%
Textron 15,000 $ 1,198
United Technologies 13,000 1,495
-------
2,693
-------
AUTOMOTIVE--3.4%
Echlin 25,000 947
Ford Motor 33,000 1,068
-------
2,015
-------
BANKS--8.8%
Bank of New York 25,000 1,281
Bankers Trust New York 12,000 886
J.P. Morgan 11,000 931
Norwest 35,000 1,221
Wachovia 20,000 875
-------
5,194
-------
DRUGS--6.7%
Bristol-Myers Squibb 16,000 1,440
Merck 22,000 1,422
SmithKline Beecham 20,000 1,087
-------
3,949
-------
ELECTRICAL & ELECTRONIC
PRODUCTS--6.1%
Emerson Electric 12,000 1,084
General Electric 13,000 1,124
Houston Industries 33,000 813
WPS Resources 20,000 633
-------
3,654
-------
FINANCIAL SERVICES--2.8%
Cali Realty 15,000 364
Equity Residential Properties
Trust 13,000 427
Hospitality Properties Trust 22,000 588
Storage Trust Realty 15,000 308
-------
1,687
-------
23
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
EQUITY INCOME
FUND--CONTINUED
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO--3.6%
CPC International 16,000 $ 1,152
Sara Lee 30,000 971
-------
2,123
-------
GAS/NATURAL GAS--8.3%
Consolidated Natural Gas 25,000 1,306
National Fuel & Gas 30,000 1,080
Sonat 40,000 1,800
Trans Canada Pipeline 50,000 738
-------
4,924
-------
GLASS PRODUCTS--4.0%
Corning 30,000 1,151
PPG Industries 25,000 1,219
-------
2,370
-------
HOUSEHOLD PRODUCTS--3.7%
Colgate-Palmolive 16,000 1,356
Procter & Gamble 9,000 816
-------
2,172
-------
INSURANCE--3.2%
Aetna Life & Casualty 18,000 1,287
Cigna 5,000 589
-------
1,876
-------
LUMBER & WOOD PRODUCTS--1.8%
Georgia-Pacific 15,000 1,065
-------
MACHINERY--1.5%
Deere 22,000 880
-------
MEDICAL PRODUCTS & SERVICES--1.6%
Baxter International 20,000 945
-------
PAPER & PACKAGING--0.8%
Crown Cork and Seal* 10,000 455
-------
PAPER & PAPER PRODUCTS--2.6%
Kimberly Clark 20,000 1,545
-------
PETROLEUM REFINING--8.4%
Amoco 11,000 796
Mobil 10,000 1,121
- --------------------------------------------------------------
SHARES/FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
Royal Dutch Petroleum 7,000 $ 1,076
Sun 25,000 738
Texaco 15,000 1,258
-------
4,989
-------
PRINTING & PUBLISHING--1.9%
McGraw-Hill 25,000 1,144
-------
RAILROADS--3.4%
Burlington Northern Santa Fe 12,000 971
Union Pacific 15,000 1,048
-------
2,019
-------
RETAIL--5.6%
Dayton-Hudson 10,000 1,031
J.C. Penney 20,000 1,050
Sears Roebuck 25,000 1,216
-------
3,297
-------
SEMI-CONDUCTORS/INSTRUMENTS--1.9%
Thomas & Betts 30,000 1,125
-------
TELEPHONES & TELECOMMUNICATION--4.7%
Bell Atlantic 12,000 765
BellSouth 20,000 847
GTE 26,000 1,164
-------
2,776
-------
Total Common Stock
(Cost $46,692) 55,499
-------
U.S. TREASURY OBLIGATIONS--1.7%
U.S. Treasury Bills
4.905%, 07/05/96 $ 500 500
5.126%, 07/11/96 499 499
-------
Total U.S. Treasury Obligations
(Cost $999) 999
-------
CASH EQUIVALENTS--9.3%
SEI Liquid Asset Trust -
Government Portfolio 2,988 2,988
24
<PAGE>
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
CASH EQUIVALENTS--CONTINUED
SEI Liquid Asset Trust -
Treasury Portfolio $2,482 $ 2,482
-------
Total Cash Equivalents
(Cost $5,470) 5,470
-------
Total Investments--104.8%
(Cost $53,161) 61,968
-------
OTHER ASSETS AND LIABILITIES--(4.8%)
Other Assets and Liabilities, Net (2,817)
-------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no par
value) based on 3,334,945
outstanding shares of beneficial
interest 34,060
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 880,451
outstanding shares of beneficial
interest 10,402
Distributions in excess of net investment
income (2)
Accumulated net realized gain
on investments 5,884
Net unrealized appreciation
on investments 8,807
-------
TOTAL NET ASSETS--100.0% $59,151
=======
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 14.02
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE--CLASS B $ 14.06
=======
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE--CLASS B ($14.06 / 96%) $ 14.65
=======
* NON-INCOME PRODUCING SECURITY
MID CAP VALUE FUND
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
COMMON STOCK--102.7%
AEROSPACE & DEFENSE--1.2%
Sci Systems* 15,000 $ 609
-------
APPAREL/TEXTILES--2.2%
Albany International 50,000 1,131
-------
AUTOMOTIVE--7.9%
A.O. Smith 40,000 1,000
Cooper * 30,000 353
Federal Signal 52,000 1,222
Regal Beloit 72,000 1,422
-------
3,997
-------
BANKS--8.7%
Associated Bancorp 15,000 581
Dauphin Deposit Bank & Trust 20,000 570
First Bank of Puerto Rico 25,000 575
First Tennessee National 32,000 980
Merchantile Bancorp 12,000 534
Wilmington Trust 20,000 649
Zions Bancorp 7,000 509
-------
4,398
-------
BUILDING & CONSTRUCTION--6.9%
Foster Wheeler 30,000 1,346
Granite Construction 10,000 230
Jacobs Engineering Group * 50,000 1,319
Pitt Des Moines 14,000 595
-------
3,490
-------
CHEMICALS--8.1%
Cytec Industries * 20,000 1,710
Olin 10,000 892
Praxair 35,000 1,479
-------
4,081
-------
COMMUNICATIONS EQUIPMENT--2.7%
Act Manufacturing * 25,000 366
Vishay Intertechnology* 42,000 992
-------
1,358
-------
25
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
MID CAP VALUE FUND--CONTINUED
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
COMPUTERS & SERVICES--1.6%
In Focus Systems * 20,000 $ 485
Visioneer * 30,000 304
-------
789
-------
DRUGS--2.9%
Loctite 15,000 697
Watson Pharmaceuticals* 20,000 758
-------
1,455
-------
ELECTRICAL TECHNOLOGY--1.8%
Anixter International* 60,000 893
-------
FINANCIAL SERVICES--1.2%
Franklin Resources 10,000 610
-------
FOOD, BEVERAGE & TOBACCO--1.5%
Universal Foods 20,000 738
-------
HOUSEHOLD PRODUCTS--2.7%
Valspar 30,000 1,380
-------
INSURANCE--2.9%
Cincinnati Financial 21,000 1,205
Delphi Financial Group* 10,000 270
-------
1,475
-------
MACHINERY--12.0%
Astec Industries* 61,000 564
Baldor Electric 45,000 1,013
Case 20,000 960
Lindsay Manufacturing* 50,000 2,012
Nordson 20,000 1,130
Submicron Systems 40,000 350
-------
6,029
-------
MEASURING DEVICES--2.9%
Oak Industries* 50,000 1,481
-------
MEDICAL PRODUCTS & SERVICES--3.0%
Coherent 20,000 1,040
Maxicare Health Plans 25,000 472
-------
1,512
-------
METALS & MINING--4.3%
Cleveland Cliffs 32,000 1,252
Vulcan Materials 15,000 891
-------
2,143
-------
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
MISCELLANEOUS MANUFACTURING--1.4%
Wolverine Tube* 20,000 $ 700
-------
PAPER & PAPER PRODUCTS--5.4%
Bemis 55,000 1,925
Wausau Paper Mills 40,000 790
-------
2,715
-------
PETROLEUM REFINING--3.2%
Saga Petroleum, Cl B * 80,000 1,085
Tesoro Petroleum 45,000 517
-------
1,602
-------
RAILROADS--1.5%
Kansas City Southern Industries 18,000 772
-------
RETAIL--1.7%
Piercing Pagoda * 45,000 832
-------
RUBBER & PLASTIC--2.0%
Sonoco Products 35,000 993
-------
SEMI-CONDUCTORS/INSTRUMENTS--5.3%
Cypress Semiconductor * 55,000 660
Memc Electronic Materials* 15,000 581
Microsemi* 50,000 456
Xicor * 85,000 999
-------
2,696
-------
STEEL & STEEL WORKS--1.3%
Schnitzer Steel Industries,
Cl A 25,000 669
-------
TELEPHONES &
TELECOMMUNICATION--1.1%
Lincoln Telecommunications 35,000 573
-------
TRUCKING--1.0%
Kenan Transport 25,479 510
-------
WHOLESALE--4.3%
Chronimed * 30,000 551
Intelligent Electronics 85,000 722
Neopath * 35,000 884
-------
2,157
-------
Total Common Stock
(Cost $42,950) 51,788
-------
26
<PAGE>
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
CASH EQUIVALENT--2.1%
SEI Liquid Asset Trust -
Government Portfolio $1,065 $ 1,065
-------
Total Cash Equivalent
(Cost $1,065) 1,065
-------
Total Investments--104.8%
(Cost $44,015) 52,853
-------
OTHER ASSETS AND LIABILITIES--(4.8%)
Other Assets and Liabilities, Net (2,434)
-------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on
3,333,174 outstanding shares
of beneficial interest 34,826
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 452,799
outstanding shares of beneficial
interest 5,201
Distributions in excess of net investment
income (3)
Accumulated net realized gain
on investments 1,557
Net unrealized appreciation
on investments 8,838
-------
TOTAL NET ASSETS--100.0% $50,419
=======
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 13.32
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE--CLASS B $ 13.30
=======
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE--CLASS B ($13.30 / 96%) $ 13.85
=======
* NON-INCOME PRODUCING SECURITY
BALANCED GROWTH FUND
- --------------------------------------------------------------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--15.4%
U.S. Treasury Bill
5.126%, 07/11/96 $1,200 $ 1,198
U.S. Treasury Notes
6.875%, 02/28/97 500 504
6.625%, 03/31/97 500 503
5.000%, 01/31/99 500 485
5.000%, 02/15/99 1,000 970
7.000%, 04/15/99 500 509
7.750%, 11/30/99 500 521
5.875%, 06/30/00 500 490
5.750%, 10/31/00 500 487
7.500%, 11/15/01 500 522
6.375%, 08/15/02 500 496
-------
Total U.S. Treasury Obligations
(Cost $6,684) 6,685
-------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--25.9%
Federal Farm Credit Bank
7.950%, 04/01/02 500 503
Federal Home Loan Bank
5.960%, 10/30/97 250 250
6.300%, 11/02/98 500 497
Federal Home Loan Mortgage
Corporation
6.550%, 01/04/00 500 498
6.550%, 10/02/02 500 493
Federal National Mortgage
Association
6.750%, 04/22/97 500 504
7.680%, 12/01/97 300 307
6.350%, 08/10/99 500 499
8.350%, 11/10/99 500 527
8.500%, 01/13/00 500 504
6.100%, 02/10/00 500 491
7.000%, 05/10/01 1,000 1,004
7.900%, 04/10/02 500 501
6.950%, 09/10/02 500 492
6.720%, 02/25/03 500 487
6.380%, 06/25/03 500 478
5.800%, 12/10/03 500 471
27
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
BALANCED GROWTH FUND--CONTINUED
- --------------------------------------------------------------
FACE AMOUNT MARKET
DESCRIPTION (000)/SHARES VALUE (000)
- --------------------------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--CONTINUED
Federal National Mortgage
Association--continued
8.625%, 11/10/04 $ 500 $ 521
8.550%, 12/10/04 750 760
8.000%, 04/13/05 500 501
Tennessee Valley Authority
7.450%, 10/15/01 500 513
6.375%, 06/15/05 500 478
-------
Total U.S. Government Agency Obligations
(Cost $11,300) 11,279
-------
CORPORATE BONDS--3.9%
American Express Credit
6.750%, 06/01/01 500 498
E.I. duPont de Nemours
6.750%, 10/15/02 500 498
Philip Morris
8.750%, 12/01/96 100 101
9.250%, 02/15/00 100 107
Southern California Edison
6.750%, 01/15/00 500 498
-------
Total Corporate Bonds
(Cost $1,699) 1,702
-------
COMMON STOCK--44.7%
AIRCRAFT--1.9%
Boeing 4,000 349
United Technologies 4,000 460
-------
809
-------
AUTOMOTIVE--2.5%
Borg-Warner Automotive 9,000 356
Chrysler 6,000 372
Echlin 9,000 341
-------
1,069
-------
BANKS--3.5%
Boatmen's Bancshares 7,000 281
Citicorp 4,000 331
J.P. Morgan 6,000 508
Norwest 12,000 419
-------
1,539
-------
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
BEAUTY PRODUCTS--0.8%
Colgate-Palmolive 4,000 $ 339
-------
CHEMICALS--0.7%
Monsanto 10,000 325
-------
COMPUTERS & SERVICES--3.1%
Compaq Computer* 7,500 369
Hewlett Packard 4,000 399
Safeguard Scientifics * 7,000 546
U.S. Data * 2,500 46
-------
1,360
-------
CONCRETE & MINERAL PRODUCTS--1.1%
Minnesota Mining &
Manufacturing 7,000 483
-------
CONTAINERS & PACKAGING--0.7%
Crown Cork & Seal 6,500 293
-------
DRUGS--2.2%
Bristol-Myers Squibb 5,000 450
Merck 8,000 517
-------
967
-------
ELECTRICAL & ELECTRONIC PRODUCTS--1.8%
Emerson Electric 4,000 362
General Electric 5,000 433
-------
795
-------
ELECTRICAL UTILITIES--0.8%
FPL Group 8,000 368
-------
FINANCIAL SERVICES--1.7%
American Express 7,000 312
Federal National Mortgage
Association 13,000 436
-------
748
-------
FOOD, BEVERAGE & TOBACCO--5.8%
Anheuser Busch 6,000 450
CPC International 7,000 504
Nestle S.A., ADR 8,000 457
PepsiCo 14,000 495
28
<PAGE>
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO--CONTINUED
Sara Lee 10,000 $ 324
Unilever NV, ADR 2,000 290
------
2,520
------
FORESTRY--1.0%
Rayonier 12,000 456
------
HOUSEHOLD PRODUCTS--0.8%
Whirlpool 7,000 347
------
INSURANCE--2.0%
American International Group 4,000 394
Cigna 4,000 472
------
866
------
MISCELLANEOUS BUSINESS SERVICES--1.1%
Microsoft* 4,000 481
------
PETROLEUM & FUEL PRODUCTS--1.0%
Schlumberger 5,000 421
------
PETROLEUM REFINING--2.7%
Amoco 5,000 362
Mobil 3,000 336
Royal Dutch Petroleum 3,000 461
------
1,159
------
PRINTING & PUBLISHING--1.5%
Gannett 6,000 424
Time Warner 6,000 236
------
660
------
RAILROADS--2.1%
Burlington Northern Santa Fe 5,000 404
Union Pacific 7,000 489
------
893
------
RETAIL--1.1%
J.C. Penney 9,000 473
------
SEMI-CONDUCTORS/INSTRUMENTS--1.1%
Intel 6,500 477
------
- --------------------------------------------------------------
SHARES/FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
TELEPHONES &
TELECOMMUNICATION--3.7%
Ameritech 7,000 $ 416
AT&T 6,000 372
Bell Atlantic 6,000 382
BellSouth 10,000 424
-------
1,594
-------
Total Common Stock
(Cost $14,445) 19,442
-------
CASH EQUIVALENTS--9.4%
SEI Liquid Asset Trust -
Government Portfolio $2,036 2,036
SEI Liquid Asset Trust -
Treasury Portfolio 2,033 2,033
-------
Total Cash Equivalents
(Cost $4,069) 4,069
-------
Total Investments--99.3%
(Cost $38,197) 43,177
-------
OTHER ASSETS AND LIABILITIES--0.7%
Other Assets and Liabilities, Net 306
-------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on 2,772,507
outstanding shares of beneficial
interest 28,709
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 720,420
outstanding shares of beneficial
interest 7,734
Undistributed net investment income 9
Accumulated net realized gain
on investments 2,051
Net unrealized appreciation
on investments 4,980
-------
TOTAL NET ASSETS--100.0% $43,483
=======
29
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
BALANCED GROWTH
FUND--CONTINUED
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 12.45
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE--CLASS B $ 12.46
=======
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE--CLASS B ($12.46 / 96%) $ 12.98
=======
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
INTERNATIONAL GROWTH
FUND
FOREIGN COMMON STOCK--94.7%
ARGENTINA--1.9%
Banco Frances ADR 2,750 79
Buenos Aires Embotelladora ADR 2,250 30
Perez Companc 5,000 33
Quilmes Industrial 3,600 37
Telefonica Argentina ADR 2,600 77
-------
256
-------
AUSTRALIA--4.7%
Amcor 13,100 89
Australian & New Zealand Bank 32,000 151
Boral 20,325 53
Broken Hill Proprietary 10,876 150
Goodman Fielder 71,367 72
Pioneer International 10,000 29
Qantas Air ADR 5,350 90
-------
634
-------
BRAZIL--1.1%
Aracruz Cellulose ADR 5,000 48
Electrobras ADR 4,300 60
Petrol Brasileiros 250,000 31
White Martins 2,959,300 4
-------
143
-------
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
CANADA--1.7%
Canada Pacific ADR 8,500 $ 187
Canwest Global Communication 1,600 44
------
231
------
CHILE--0.7%
Compania de Telecom Chile ADR 350 34
Enersis ADR 1,900 59
------
93
------
DENMARK--2.3%
Tele Denmark ADS 4,750 121
Unidanmark series A 4,100 190
------
311
------
FINLAND--1.8%
Metsa Serla series B 10,500 75
Nokia ADR series A 2,300 85
Unitas Bank series A* 28,000 59
Valmet series A 1,700 29
------
248
------
FRANCE--8.4%
Accor 500 70
Assurances Generales de France 3,000 82
Banque National Paris series A 3,750 132
Cie de Saint Gobain 900 121
Danone 458 69
Dassault ADR 200 5
Havas 700 57
Paribas 500 30
Peugeot 300 40
Rhone Poulenc 6,930 182
Societe Generale 873 96
Societe Nationale Elf Aquitaine 1,900 140
Total Compaigne series B 1,300 97
------
1,121
------
GERMANY--4.3%
Bayer 250 9
Daimler Benz 250 134
Daimler Benz Rights* 250 --
30
<PAGE>
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
GERMANY--CONTINUED
Degussa 345 $ 117
Deutsche Bank 2,000 95
Karstadt 290 116
Mannesmann 120 41
Metallgesellschaft* 4,000 69
------
581
------
HONG KONG--3.7%
Citic Pacific 20,000 81
Hutchison Whampoa 23,000 145
Sung Hung Kai Properties 14,000 142
Swire Pacific series A 15,000 128
Tingyi (Cayman Island)* 2,000 1
------
497
------
INDIA--0.1%
Arvind Mills GDR* 4,000 20
------
INDONESIA--0.4%
Jaya Real Property 15,000 48
------
IRELAND--0.5%
Allied Irish Bank 12,600 66
------
ITALY--2.1%
Banca Commerciale Italiana 40,000 80
Fiat 20,000 67
Finanziaria Autogrill 30,000 34
Stet Societa Finanziaria
Telefonica 13,000 44
Telecom Italia 25,000 54
------
279
------
JAPAN--26.1%
Aichi Machine Industries 3,000 21
Asahi Organic Chemical 5,000 39
Bank of Tokyo-Mitsubishi 4,000 93
Canon Sales 3,000 84
Chichibu Onoda Cement 7,000 40
Chudenko 1,000 36
Chugai Pharmaceutical 14,000 137
Cosel 1,200 29
Dai Nippon Printing 7,000 136
Danto 1,000 13
Eisai 4,000 76
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
Ito Yokado 2,000 $ 121
JGC 5,000 66
Kawasaki Steel 20,000 72
Kyudenko 3,000 40
Mabuchi Motor 1,000 64
Maruichi Steel Tube 2,000 36
Matsushita Electric 8,000 149
Mitsubishi Heavy Industries 14,000 122
Murata Manufacturing 3,000 114
Nihon Jumbo 2,000 80
Nippon Express 8,000 78
Nippondenso 3,000 65
NKK* 30,000 91
Nomura Securities 6,000 117
Onward Kashiyama 8,000 131
Sakura Bank 9,000 100
Sankyo 4,000 104
Sanwa Bank 3,000 56
Secom 2,000 132
Seven Eleven 1,000 64
Shimamura 2,000 88
Sony 2,000 132
Sumitomo Marine & Fire
Insurance 10,000 87
Sumitomo Realty &
Development 11,000 87
Sumitomo Trust & Banking 5,000 69
Toda Construction 7,000 68
Tokio Marine & Fire Insurance 10,000 133
Toyo Ink 11,000 63
Toyota Motor 6,000 150
Yamato Kogyo 6,000 72
Yamazaki Baking 2,000 37
------
3,492
------
KOREA--0.9%
Hanil Bank 3,000 30
Hanwha Chemical 2,000 22
Pohang Iron & Steel ADR 2,000 49
Shinsegae Department Store 200 14
------
115
------
MALAYSIA--1.9%
Aokam Perdana 4,000 7
31
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
INTERNATIONAL GROWTH
FUND--CONTINUED
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
MALAYSIA--CONTINUED
Land and General 20,000 $ 49
Resorts World Berhad 13,000 75
Sime Darby 46,000 127
------
258
------
MEXICO--0.8%
Cemex SA de CV series A 6,000 22
Grupo Ind Alfa series A 10,371 47
Telefonos de Mexico ADR 850 28
Trans Maritima ADR 2,350 15
------
112
------
NETHERLANDS--3.8%
Akzo Nobel 200 24
Elsevier 4,000 61
International Nederland 5,000 149
KLM 1,000 32
Polygram 1,000 59
Unilever CVA 650 94
Verenigde Nederlandse
Uigevbedrijven 5,500 85
------
504
------
NEW ZEALAND--0.9%
Air New Zealand series B 17,500 56
Carter Holt Harvey 30,000 69
------
125
------
NORWAY--1.9%
Christiana Bank 14,200 33
Hafslund Nycomed series A 2,800 20
Nycomed ASA series A* 2,800 40
Orkla AS series A 1,750 92
Saga Petroleum AS series A 4,800 71
------
256
------
PHILIPPINES--0.4%
Philippine National Bank* 3,000 50
------
SINGAPORE--3.2%
Development Bank of Singapore 11,000 137
Far East Levingston Shipbuilding 10,000 55
Keppel 15,000 125
- --------------------------------------------------------------
MARKET
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------
United Overseas Bank 12,000 $ 115
------
432
------
SPAIN--2.6%
Acerinox S.A. 650 68
Empresa Nacional de Electricidad 1,600 100
Empresa Nacional Electricidad ADR 100 6
Repsol ADR 3,000 104
Telefonica de Espana 3,500 65
------
343
------
SWEDEN--2.9%
Astra AB series A 800 35
Avesta Sheffield 5,500 52
BT Industries* 5,300 82
Electrolux series B 1,000 50
Nordbanken 2,000 39
Skandinaviska Enskilda Bank 10,000 80
Stora Kopparbergs series A 2,800 37
------
375
------
SWITZERLAND--3.6%
Ciba Geigy 90 110
Compagnie Financiere Richemont 20 31
Nestle SA 140 160
Schweiz Bankverein 400 79
Sulzer Gerbruder 145 87
------
467
------
THAILAND--1.1%
Bangkok Metro Bank 174,909 129
Siam City Cement 2,000 23
------
152
------
UNITED KINGDOM--10.9%
Associated British Foods 14,000 84
Boots 10,000 90
British Gas 30,000 84
British Steel 30,000 77
British Telecommunications 18,750 101
BTR 25,000 98
National Grid Group 20,000 53
Northern Foods 10,000 29
32
<PAGE>
- --------------------------------------------------------------
SHARES/FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
UNITED KINGDOM--CONTINUED
Powergen 22,073 $ 161
Rank Organization 12,500 97
Reckitt & Coleman 6,000 63
Royal Bank of Scotland 10,000 76
Royal Insurance 11,000 68
Sainsbury (J) 20,000 118
Sun Life & Provincial Holdings 20,000 69
United Biscuits 10,000 33
Vodafone Group 42,191 157
------
1,458
------
Total Foreign Common Stock
(Cost $12,076) 12,667
------
FOREIGN PREFERRED STOCK--0.4%
GERMANY--0.4%
Hornbach 600 52
------
Total Foreign Preferred Stock
(Cost $37) 52
------
REPURCHASE AGREEMENT--5.2%
Swiss Bank Securities 5.48%,
dated 06/28/96, matures
07/01/96, repurchase price
$696,313 (collateralized by
U.S. Treasury Note, par value
621,000, 9.125%, due 05/15/09,
market value $703,407) $696 696
------
Total Repurchase Agreement
(Cost $696) 696
------
Total Investments--100.3%
(Cost $12,809) 13,415
------
OTHER ASSETS AND LIABILITIES, NET--(0.3%)
Other Assets and Liabilities, Net (41)
------
- ------------------------------------------------------------------
MARKET
DESCRIPTION VALUE (000)
- ------------------------------------------------------------------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on 1,075,886
outstanding shares of beneficial
interest $11,118
Portfolio shares of Class B
unlimited authorization--no
par value) based on 88,514
outstanding shares of beneficial
interest 931
Undistributed net investment income 118
Accumulated net realized loss
on foreign currency transactions (22)
Accumulated net realized gain
on investments 622
Net unrealized appreciation on
foreign currency and translation
of other assets and liabilities
denominated in foreign currency 1
Net unrealized appreciation
on investments 606
-------
TOTAL NET ASSETS--100.0% $13,374
=======
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER
SHARE--CLASS A $ 11.49
=======
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE--CLASS B $ 11.47
=======
MAXIMUM PUBLIC OFFERING PRICE PER
SHARE--CLASS B ($11.47 / 96%) $ 11.95
=======
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPTS
ADS -- AMERICAN DEPOSITORY SHARES
GDR -- GLOBAL DEPOSITORY RECEIPTS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
33
<PAGE>
This page intentionally left blank
<PAGE>
STATEMENT OF OPERATIONS (000)
================================================================================
THE PILLAR FUNDS -- FOR THE PERIOD ENDED JUNE 30, 1996 (UNAUDITED)
U.S. U.S.
TREASURY PRIME TAX- TREASURY
SECURITIES OBLIGATION EXEMPT SECURITIES
MONEY MONEY MONEY PLUS MONEY
MARKET MARKET MARKET MARKET
FUND FUND FUND FUND
-------- ------- ------ -------
INTEREST INCOME: $10,119 $ 8,766 $1,203 $1,780
------- ------- ------ -------
EXPENSES:
Administration fee 395 326 67 117
Investment advisory fee 692 571 118 50
Less investment advisory
fee waived (12) (4) (3) (19)
Custodian fee 50 37 8 10
Transfer agent fee 42 43 16 9
Professional fees 66 52 8 6
Registration fees 26 17 1 1
Distribution fees (1) 4 9 5 8
Printing expense 15 9 1 1
Amortization of deferred
organizational costs 6 3 3 2
Insurance and other expenses 6 6 -- --
------- ------- ------ ------
Total expenses, net of
waivers 1,290 1,069 224 185
------- ------- ------ ------
NET INVESTMENT INCOME 8,829 7,697 979 1,595
------- ------- ------ ------
Net realized gain (loss)
on investments 25 (29) -- --
------- ------- ------ ------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 8,854 $ 7,668 $ 979 $1,595
======= ======= ====== ======
(1) ALL DISTRIBUTION FEES ARE INCURRED AT THE CLASS B LEVEL EXCEPT FOR U.S.
TREASURY SECURITIES PLUS MONEY MARKET FUND.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
35
<PAGE>
STATEMENT OF OPERATIONS (000)
================================================================================
THE PILLAR FUNDS -- FOR THE PERIOD ENDED JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
---------- ------ ----------- ------------- ----------- ----
INTERMEDIATE-
NEW JERSEY TERM PENNSYLVANIA
SHORT-TERM FIXED MUNICIPAL GOVERNMENT MUNICIPAL
INVESTMENT INCOME SECURITIES SECURITIES SECURITIES GNMA
FUND FUND FUND FUND FUND FUND
---------- ------ ----------- ------------ ----------- ----
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income -- -- -- -- -- --
Interest income $ 965 $ 3,762 $1,210 $ 956 $ 97 $ 322
Less: Foreign taxes withheld -- -- -- -- -- --
----- ------- ------ ------ ----- -----
Total income 965 3,762 1,210 956 97 322
----- ------- ------ ------ ----- -----
EXPENSES:
Administration fee 34 118 51 32 4 9
Less administration fee waived -- -- (9) -- (4) --
Investment advisory fee 102 354 153 96 11 28
Less investment advisory fee waived (25) (53) (86) (18) (11) (18)
Custodian fee 4 15 6 4 1 1
Transfer agent fee 12 15 19 11 14 14
Professional fees 3 12 7 -- -- 1
Registration fees 1 2 -- 1 -- 1
Distribution fees (1) 2 8 31 4 -- 2
Printing expense 1 1 -- -- -- --
Amortization of deferred organizational
costs 3 3 2 3 1 1
Insurance and other expenses 1 4 -- -- -- --
----- ------- ------ ------ ----- -----
Total expenses, net of waivers 138 479 174 133 16 39
----- ------- ------ ------ ----- -----
NET INVESTMENT INCOME 827 3,283 1,036 823 81 283
----- ------- ------ ------ ----- -----
Net realized gain (loss)
on investments (22) 193 (23) (82) (2) 7
Net realized loss on foreign currency
transactions and foreign currency contracts
Net change in unrealized appreciation on
foreign currency and translation of other
assets and liabilities denominated in
foreign currency
Net unrealized appreciation (depreciation)
on investment securities (88) (5,029) (1,136) (894) (101) (485)
----- ------- ------ ------ ----- -----
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 717 $(1,553) $ (123) $ (153) $ (22) $(195)
===== ======= ====== ====== ===== =====
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
------ ------ ------- -------- -------------
EQUITY EQUITY MID CAP BALANCED INTERNATIONAL
VALUE INCOME VALUE GROWTH GROWTH
FUND FUND FUND FUND FUND
------ ------ ------- -------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income $ 994 $ 830 $ 393 $ 237 $ 200
Interest income 200 111 35 709 15
Less: Foreign taxes withheld -- -- -- -- (16)
------ ------ ------ ------ ----
Total income 1,194 941 428 946 199
------ ------ ------ ------ ----
EXPENSES:
Administration fee 96 58 51 42 12
Less administration fee waived -- -- -- -- --
Investment advisory fee 362 217 192 159 61
Less investment advisory fee waived (116) (74) (69) (60) (14)
Custodian fee 12 7 6 5 10
Transfer agent fee 15 12 13 13 10
Professional fees 11 5 5 4 1
Registration fees 2 1 1 2 2
Distribution fees (1) 11 14 8 11 1
Printing expense 1 1 1 1 2
Amortization of deferred organizational
costs 3 3 3 3 2
Insurance and other expenses 1 2 1 1 6
------ ------ ------ ------ ----
Total expenses, net of waivers 398 246 212 181 93
------ ------ ------ ------ ----
NET INVESTMENT INCOME 796 695 216 765 106
------ ------ ------ ------ ----
Net realized gain (loss)
on investments 7,048 5,051 1,242 2,093 561
Net realized loss on foreign currency
transactions and foreign currency contracts (6)
Net change in unrealized appreciation on
foreign currency and translation of other
assets and liabilities denominated in
foreign currency 1
Net unrealized appreciation (depreciation)
on investment securities 563 (931) 1,737 (731) 133
------ ------ ------ ------ ----
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $8,407 $4,815 $3,195 $2,127 $795
====== ====== ====== ====== ====
<FN>
(1) ALL DISTRIBUTION FEES ARE INCURRED AT THE CLASS B LEVEL.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
37
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) (Unaudited)
================================================================================
<TABLE>
<CAPTION>
------------------------- -------------------------
U.S. TREASURY PRIME OBLIGATION
SECURITIES MONEY MONEY MARKET
MARKET FUND FUND
------------------------- -------------------------
01/01/96 01/01/95 01/01/96 01/01/95
to 06/30/96 to 12/31/95 to 06/30/96 to 12/31/95
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 8,829 $ 19,550 $ 7,697 $ 11,821
Net realized gain (loss) on investments 25 110 (29) 44
-------- ---------- -------- --------
Net increase in net assets resulting
from operations 8,854 19,660 7,668 11,865
-------- ---------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (8,755) (19,473) (7,531) (11,601)
Class B (74) (77) (166) (220)
Realized capital gains:
Class A -- -- -- --
Class B -- -- -- --
-------- ---------- -------- --------
Total distributions (8,829) (19,550) (7,697) (11,821)
-------- ---------- -------- --------
SHARE TRANSACTIONS (ALL AT $1.00
PER SHARE):
Class A:
Shares issued 632,355 1,066,121 421,859 610,748
Shares issued in lieu of cash
distributions 1 1 39 --
Shares redeemed (649,430) (1,067,826) (313,978) (508,503)
-------- ---------- -------- --------
Net Class A share transactions (17,074) (1,704) 107,920 102,245
-------- ---------- -------- --------
Class B:
Shares issued 2,242 6,412 6,461 9,612
Shares issued in lieu of cash
distributions 71 65 163 199
Shares redeemed (2,201) (3,578) (5,426) (6,167)
-------- ---------- -------- --------
Net Class B share transactions 112 2,899 1,198 3,644
-------- ---------- -------- --------
Increase (decrease) in net assets from
share transactions (16,962) 1,195 109,118 105,889
-------- ---------- -------- --------
Total increase (decrease) in net assets (16,937) 1,305 109,089 105,933
-------- ---------- -------- --------
NET ASSETS:
Beginning of period 467,063 465,758 266,592 160,659
-------- ---------- -------- --------
NET ASSETS:
End of period $450,126 $ 467,063 $375,681 $266,592
======== ========== ======== ========
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
------------------------- -------------------------
TAX-EXEMPT U.S.TREASURY
MONEY MARKET SECURITIES PLUS
FUND MONEY MARKET FUND
------------------------- -------------------------
01/01/96 01/01/95 01/01/96 01/01/95
to 06/30/96 to 12/31/95 to 06/30/96 to 12/31/95
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 979 $ 1,896 $ 1,595 $ 2,995
Net realized gain (loss) on investments -- (5) -- 4
------- -------- -------- -------
Net increase in net assets resulting
from operations 979 1,891 1,595 2,999
------- -------- -------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (925) (1,764) (1,595) (2,995)
Class B (54) (132) -- --
Realized capital gains:
Class A -- -- -- --
Class B -- -- -- --
------- -------- -------- -------
Total distributions (979) (1,896) (1,595) (2,995)
------- -------- -------- -------
SHARE TRANSACTIONS (ALL AT $1.00
PER SHARE):
Class A:
Shares issued 66,793 140,400 261,664 418,839
Shares issued in lieu of cash
distributions 9 -- 1,421 2,350
Shares redeemed (57,825) (114,513) (271,429) (402,797)
------- -------- -------- -------
Net Class A share transactions 8,977 25,887 (8,344) 18,392
------- -------- -------- -------
Class B:
Shares issued 2,622 7,924 -- --
Shares issued in lieu of cash
distributions 54 112 -- --
Shares redeemed (4,406) (5,587) -- --
------- -------- -------- -------
Net Class B share transactions (1,730) 2,449 -- --
------- -------- -------- -------
Increase (decrease) in net assets from
share transactions 7,247 28,336 (8,344) 18,392
------- -------- -------- -------
Total increase (decrease) in net assets 7,247 28,331 (8,344) 18,396
------- -------- -------- -------
NET ASSETS:
Beginning of period 68,866 40,535 64,697 46,301
------- -------- -------- -------
NET ASSETS:
End of period $76,113 $ 68,866 $ 56,353 $64,697
======= ======== ======== =======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
39
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) (Unaudited)
================================================================================
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM FIXED NEW JERSEY
INVESTMENT INCOME MUNICIPAL
FUND FUND SECURITIES FUND
------------------------- ------------------------- -------------------------
01/01/96 01/01/95 01/01/96 01/01/95 01/01/96 01/01/95
to 06/30/96 to 12/31/95 to 06/30/96 to 12/31/95 to 06/30/96 to 12/31/95
----------- ----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 827 $ 1,741 $ 3,283 $ 6,455 $ 1,036 $ 2,036
Net realized gain (loss) on investments (22) 43 193 (191) (23) (59)
Net unrealized appreciation (depreciation)
on investment securities (88) 134 (5,029) 11,725 (1,136) 3,802
------- ------- -------- -------- ------- -------
Net increase (decrease) in net assets
resulting from operations 717 1,918 (1,553) 17,989 (123) 5,779
------- ------- -------- -------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (788) (1,676) (3,114) (6,151) (546) (1,069)
Class B (41) (64) (169) (305) (489) (965)
Realized capital gains:
Class A -- -- -- -- -- --
Class B -- -- -- -- -- --
------- ------- -------- -------- ------- -------
Total distributions (829) (1,740) (3,283) (6,456) (1,035) (2,034)
------- ------- -------- -------- ------- -------
SHARE TRANSACTIONS:
Class A:
Proceeds from shares issued 9,307 10,526 7,069 14,073 3,143 10,887
Reinvestment of cash distributions 755 1,642 3,110 5,297 483 881
Cost of shares redeemed (4,360) (10,885) (10,519) (13,377) (7,218) (5,551)
------- ------- -------- -------- ------- -------
Net Class A share transactions 5,702 1,283 (340) 5,993 (3,592) 6,217
------- ------- -------- -------- ------- -------
Class B:
Proceeds from shares issued 470 1,553 2,218 1,524 2,480 7,955
Reinvestment of cash distributions 35 58 149 197 394 783
Cost of shares redeemed (1,046) (343) (1,386) (1,977) (5,268) (5,838)
------- ------- -------- -------- ------- -------
Net Class B share transactions (541) 1,268 981 (256) (2,394) 2,900
------- ------- -------- -------- ------- -------
Increase (decrease) in net assets from
share transactions 5,161 2,551 641 5,737 (5,986) 9,117
------- ------- -------- -------- ------- -------
Total increase (decrease) in net assets 5,049 2,729 (4,195) 17,270 (7,144) 12,862
------- ------- -------- -------- ------- -------
NET ASSETS:
Beginning of period 32,685 29,956 119,353 102,083 54,034 41,172
------- ------- -------- -------- ------- -------
NET ASSETS:
End of period $37,734 $32,685 $115,158 $119,353 $46,890 $54,034
======= ======= ======== ======== ======= =======
CAPITAL SHARE TRANSACTIONS:
Class A shares:
Issued 931 1,050 652 1,399 292 1,033
Issued in lieu of cash distributions 75 164 336 526 45 84
Redeemed (436) (1,086) (1,031) (1,336) (677) (528)
------- ------- -------- -------- ------- -------
Net Class A share transactions 570 128 (43) 589 (340) 589
------- ------- -------- -------- ------- -------
Class B shares:
Issued 47 154 218 149 233 754
Issued in lieu of cash distributions 3 6 15 20 37 75
Redeemed (104) (34) (137) (197) (497) (559)
------- ------- -------- -------- ------- -------
Net Class B shares (54) 126 96 (28) (227) 270
------- ------- -------- -------- ------- -------
Net increase (decrease) in capital
shares 516 254 53 561 (567) 859
======= ======= ======== ======== ======= =======
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE- PENNSYLVANIA
TERM GOVERNMENT MUNICIPAL GNMA
SECURITIES FUND SECURITIES FUND FUND
------------------------- ------------------------ -------------------------
01/01/96 01/01/95 01/01/96 01/01/95 01/01/96 01/01/95
to 06/30/96 to 12/31/95 to 06/30/96 to 12/31/95 to 06/30/96 to 12/31/95
----------- ----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 823 $ 1,683 $ 81 $ 133 $ 283 $ 581
Net realized gain (loss) on investments (82) (624) (2) 16 7 1
Net unrealized appreciation (depreciation)
on investment securities (894) 3,243 (101) 205 (485) 1,054
------- ------- ------ ------ ------ -------
Net increase (decrease) in net assets
resulting from operations (153) 4,302 (22) 354 (195) 1,636
------- ------- ------ ------ ------ -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (745) (1,545) (76) (123) (233) (472)
Class B (86) (139) (5) (10) (50) (105)
Realized capital gains:
Class A -- -- -- -- -- --
Class B -- -- -- -- -- --
------- ------- ------ ------ ------ -------
Total distributions (831) (1,684) (81) (133) (283) (577)
------- ------- ------ ------ ------ -------
SHARE TRANSACTIONS:
Class A:
Proceeds from shares issued 4,925 11,820 658 651 1,409 2,519
Reinvestment of cash distributions 601 1,271 4 -- 179 325
Cost of shares redeemed (5,955) (12,889) (249) (242) (2,982) (1,935)
------- ------- ------ ------ ------ -------
Net Class A share transactions (429) 202 413 409 (1,394) 909
------- ------- ------ ------ ------ -------
Class B:
Proceeds from shares issued 589 1,667 71 59 171 193
Reinvestment of cash distributions 73 112 5 8 34 68
Cost of shares redeemed (923) (706) -- (153) (307) (554)
------- ------- ------ ------ ------ -------
Net Class B share transactions (261) 1,073 76 (86) (102) (293)
------- ------- ------ ------ ------ -------
Increase (decrease) in net assets from
share transactions (690) 1,275 489 323 (1,496) 616
------- ------- ------ ------ ------ -------
Total increase (decrease) in net assets (1,674) 3,893 386 544 (1,974) 1,675
------- ------- ------ ------ ------ -------
NET ASSETS:
Beginning of period 32,542 28,649 3,614 3,070 10,511 8,836
------- ------- ------ ------ ------ -------
NET ASSETS:
End of period $30,868 $32,542 $4,000 $3,614 $8,537 $10,511
======= ======= ====== ====== ====== =======
CAPITAL SHARE TRANSACTIONS:
Class A shares:
Issued 481 1,176 66 65 146 262
Issued in lieu of cash distributions 59 126 -- -- 19 34
Redeemed (585) (1,280) (25) (24) (307) (205)
------- ------- ------ ------ ------ -------
Net Class A share transactions (45) 22 41 41 (142) 91
------- ------- ------ ------ ------ -------
Class B shares:
Issued 59 164 7 6 19 19
Issued in lieu of cash distributions 7 11 1 1 3 7
Redeemed (91) (71) -- (16) (32) (59)
------- ------- ------ ------ ------ -------
Net Class B shares (25) 104 8 (9) (10) (33)
------- ------- ------ ------ ------ -------
Net increase (decrease) in capital
shares (70) 126 49 32 (152) 58
======= ======= ====== ====== ====== =======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
41
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) (Unaudited)
================================================================================
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY EQUITY MID CAP
VALUE INCOME VALUE
FUND FUND FUND
------------------------- ------------------------- -------------------------
01/01/96 01/01/95 01/01/96 01/01/95 01/01/96 01/01/95
to 06/30/96 to 12/31/95 to 06/30/96 to 12/31/95 to 06/30/96 to 12/31/95
----------- ----------- ----------- ----------- ----------- -----------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 796 $ 1,586 $ 695 $ 1,178 $ 216 $ 535
Net realized gain on investments 7,048 6,540 5,051 2,837 1,242 764
Net realized loss on foreign currency
transactions -- -- -- -- -- --
Net unrealized appreciation on
foreign currency and translation of
other assets and liabilities in
foreign currency -- -- -- -- -- --
Net unrealized appreciation
(depreciation) on investment securities 563 15,433 (931) 9,914 1,737 6,078
-------- ------- ------- ------- ------- -------
Net increase in net assets resulting
from operations 8,407 23,559 4,815 13,929 3,195 7,377
-------- ------- ------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (741) (1,491) (583) (1,011) (200) (484)
Class B (58) (95) (114) (174) (19) (55)
Realized capital gains:
Class A -- (5,108) -- (1,576) -- (740)
Class B -- (471) -- (336) -- (101)
-------- ------- ------- ------- ------- -------
Total distributions (799) (7,165) (697) (3,097) (219) (1,380)
-------- ------- ------- ------- ------- -------
SHARE TRANSACTIONS:
Class A:
Proceeds from shares issued 13,397 11,043 4,017 4,217 3,449 5,976
Reinvestment of cash distributions 725 6,427 551 2,481 193 1,187
Cost of shares redeemed (5,437) (11,758) (5,296) (6,188) (4,252) (3,497)
-------- ------- ------- ------- ------- -------
Net Class A share transactions 8,685 5,712 (728) 510 (610) 3,666
-------- ------- ------- ------- ------- -------
Class B:
Proceeds from shares issued 1,635 3,923 3,874 3,547 563 1,272
Reinvestment of cash distributions 51 489 112 497 19 154
Cost of shares redeemed (793) (635) (2,039) (1,743) (557) (1,076)
-------- ------- ------- ------- ------- -------
Net Class B share transactions 893 3,777 1,947 2,301 25 350
-------- ------- ------- ------- ------- -------
Increase (decrease) in net assets
from share transactions 9,578 9,489 1,219 2,811 (585) 4,016
-------- ------- ------- ------- ------- -------
Total increase in net assets 17,186 25,883 5,337 13,643 2,391 10,013
-------- ------- ------- ------- ------- -------
NET ASSETS:
Beginning of period 90,321 64,438 53,814 40,171 48,028 38,015
-------- ------- ------- ------- ------- -------
NET ASSETS:
End of period $107,507 $90,321 $59,151 $53,814 $50,419 $48,028
======== ======= ======= ======= ======= =======
CAPITAL SHARE TRANSACTIONS:
Class A shares:
Issued 1,000 912 295 355 263 491
Issued in lieu of cash distributions 53 508 40 197 15 96
Redeemed (410) (993) (383) (533) (323) (296)
-------- ------- ------- ------- ------- -------
Net Class A share transactions 643 427 (48) 19 (45) 291
-------- ------- ------- ------- ------- -------
Class B shares:
Issued 119 313 287 289 43 106
Issued in lieu of cash distributions 8 38 8 39 2 12
Redeemed (59) (52) (150) (144) (43) (89)
-------- ------- ------- ------- ------- -------
Net Class B shares 68 299 145 184 2 29
-------- ------- ------- ------- ------- -------
Net increase (decrease) in capital shares 711 726 97 203 (43) 320
======== ======= ======= ======= ======= =======
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
BALANCED INTERNATIONAL
GROWTH GROWTH
FUND FUND
------------------------- -------------------------
01/01/96 01/01/95 01/01/96 05/01/95(1)
to 06/30/96 to 12/31/95 to 06/30/96 to 12/31/95
----------- ----------- ----------- -----------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C>
Net investment income $ 765 $ 1,446 $ 106 $ 32
Net realized gain on investments 2,093 1,009 561 81
Net realized loss on foreign currency
transactions -- -- (6) (16)
Net unrealized appreciation on
foreign currency and translation of
other assets and liabilities in
foreign currency -- -- 1 --
Net unrealized appreciation
(depreciation) on investment securities (731) 6,664 133 473
------- ------- ------- -------
Net increase in net assets resulting
from operations 2,127 9,119 795 570
------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (608) (1,174) -- (19)
Class B (148) (275) -- (1)
Realized capital gains:
Class A -- (358) -- (19)
Class B -- (92) -- (1)
------- ------- ------- -------
Total distributions (756) (1,899) -- (40)
------- ------- ------- -------
SHARE TRANSACTIONS:
Class A:
Proceeds from shares issued 3,723 3,566 2,815 9,881
Reinvestment of cash distributions 577 1,457 -- 21
Cost of shares redeemed (3,030) (5,599) (1,188) (411)
------- ------- ------- -------
Net Class A share transactions 1,270 (576) 1,627 9,491
------- ------- ------- -------
Class B:
Proceeds from shares issued 792 1,472 690 604
Reinvestment of cash distributions 143 357 -- 2
Cost of shares redeemed (690) (1,534) (349) (16)
------- ------- ------- -------
Net Class B share transactions 245 295 341 590
------- ------- ------- -------
Increase (decrease) in net assets
from share transactions 1,515 (281) 1,968 10,081
------- ------- ------- -------
Total increase in net assets 2,886 6,939 2,763 10,611
------- ------- ------- -------
NET ASSETS:
Beginning of period 40,597 33,658 10,611 --
------- ------- ------- -------
NET ASSETS:
End of period $43,483 $40,597 $13,374 $10,611
======= ======= ======= =======
CAPITAL SHARE TRANSACTIONS:
Class A shares:
Issued 305 315 252 969
Issued in lieu of cash distributions 47 126 -- 2
Redeemed (247) (491) (106) (41)
------- ------- ------- -------
Net Class A share transactions 105 (50) 146 930
------- ------- ------- -------
Class B shares:
Issued 64 132 61 59
Issued in lieu of cash distributions 12 31 -- --
Redeemed (56) (141) (30) (1)
------- ------- ------- -------
Net Class B shares 20 22 31 58
------- ------- ------- -------
Net increase (decrease) in capital shares 125 (28) 177 988
======= ======= ======= =======
<FN>
(1) THE INTERNATIONAL GROWTH FUND COMMENCED OPERATIONS ON MAY 1, 1995.
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
43
<PAGE>
FINANCIAL HIGHLIGHTS
===============================================================================
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 (UNAUDITED) AND THE PERIODS ENDED
DECEMBER 31
FOR A SHARE OUTSTANDING THROUGHOUT THE YEAR
<TABLE>
<CAPTION>
RATIO OF RATIO OF
EXPENSES NET INCOME
NET ASSET DISTRIBUTIONS RATIO OF RATIO OF TO AVERAGE TO AVERAGE
VALUE NET FROM NET NET ASSET NET ASSETS EXPENSES NET INCOME NET ASSETS NET ASSETS
BEGINNING INVESTMENT INVESTMENT VALUE END TOTAL END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
OF PERIOD INCOME INCOME OF PERIOD RETURN PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------
U.S. TREASURY SECURITIES
- ------------------------
CLASS A
1996** $1.00 $0.02 $(0.02) $1.00 2.24% $446,484 0.65% 4.45% 0.65% 4.45%
1995 1.00 0.05 (0.05) 1.00 5.05 463,531 0.65 4.92 0.65 4.92
1994 1.00 0.03 (0.03) 1.00 3.44 465,125 0.62 3.39 0.62 3.39
1993 1.00 0.02 (0.02) 1.00 2.46 420,947 0.64 2.42 0.64 2.42
1992(1) 1.00 0.02 (0.02) 1.00 2.81* 387,960 0.65 2.67 0.70 2.62
CLASS B
1996** $1.00 $0.02 $(0.02) $1.00 2.11% $ 3,642 0.90% 4.20% 0.90% 4.20%
1995 1.00 0.05 (0.05) 1.00 4.80 3,532 0.90 4.66 0.90 4.66
1994 1.00 0.03 (0.03) 1.00 3.17 633 0.87 3.07 0.87 3.07
1993 1.00 0.02 (0.02) 1.00 2.21 834 0.89 2.17 0.89 2.17
1992(1) 1.00 0.02 (0.02) 1.00 2.56* 436 0.90 2.27 0.95 2.22
- ----------------
PRIME OBLIGATION
- ----------------
CLASS A
1996** $1.00 $0.02 $(0.02) $1.00 2.38% $367,557 0.65% 4.73% 0.65% 4.73%
1995 1.00 0.05 (0.05) 1.00 5.40 259,667 0.65 5.26 0.66 5.25
1994 1.00 0.04 (0.04) 1.00 3.67 157,378 0.62 3.68 0.62 3.68
1993 1.00 0.03 (0.03) 1.00 2.65 129,780 0.64 2.63 0.64 2.63
1992(1) 1.00 0.02 (0.02) 1.00 2.85* 124,811 0.65 2.63 0.77 2.51
CLASS B
1996** $1.00 $0.02 $(0.02) $1.00 2.25% $ 8,124 0.90% 4.48% 0.90% 4.48%
1995 1.00 0.05 (0.05) 1.00 5.14 6,925 0.90 5.01 0.91 5.00
1994 1.00 0.03 (0.03) 1.00 3.40 3,281 0.87 3.89 0.87 3.89
1993 1.00 0.02 (0.02) 1.00 2.40 377 0.89 2.38 0.89 2.38
1992(1) 1.00 0.02 (0.02) 1.00 2.60* 243 0.89 2.43 1.01 2.31
- ----------
TAX-EXEMPT
- ----------
CLASS A
1996** $1.00 $0.01 $(0.01) $1.00 1.46% $ 72,605 0.65% 2.92% 0.66% 2.91%
1995 1.00 0.03 (0.03) 1.00 3.42 63,628 0.65 3.37 0.72 3.30
1994 1.00 0.02 (0.02) 1.00 2.27 37,745 0.65 2.27 0.68 2.24
1993 1.00 0.02 (0.02) 1.00 1.99 32,994 0.65 1.97 0.69 1.93
1992(2) 1.00 0.02 (0.02) 1.00 2.42* 22,963 0.65 2.39 0.79 2.25
CLASS B
1996** $1.00 $0.01 $(0.01) $1.00 1.34% $ 3,508 0.90% 2.67% 0.91% 2.66%
1995 1.00 0.03 (0.03) 1.00 3.17 5,238 0.90 3.14 0.96 3.08
1994 1.00 0.02 (0.02) 1.00 2.02 2,790 0.90 1.97 0.92 1.95
1993 1.00 0.02 (0.02) 1.00 1.74 3,866 0.90 1.72 0.94 1.68
1992(2) 1.00 0.02 (0.02) 1.00 2.17* 2,273 0.90 2.07 1.04 1.93
- -----------------------------
U.S. TREASURY SECURITIES PLUS
- -----------------------------
CLASS A
1996** $1.00 $0.02 $(0.02) $1.00 2.38% $ 56,353 0.55% 4.74% 0.61% 4.68%
1995 1.00 0.05 (0.05) 1.00 5.40 64,697 0.55 5.26 0.62 5.19
1994 1.00 0.04 (0.04) 1.00 3.60 46,301 0.55 3.42 0.63 3.34
1993(3) 1.00 0.02 (0.02) 1.00 2.66* 89,278 0.55 2.62 0.68 2.49
<FN>
* ANNUALIZED
** RATIOS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 HAVE BEEN ANNUALIZED.
(1) THE U.S. TREASURY SECURITIES MONEY MARKET AND PRIME OBLIGATION MONEY
MARKET FUNDS COMMENCED OPERATIONS ON APRIL 1, 1992.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(2) THE TAX-EXEMPT MONEY MARKET FUND COMMENCED OPERATIONS ON APRIL 6, 1992.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(3) THE U.S. TREASURY SECURITIES PLUS MONEY MARKET FUND COMMENCED OPERATIONS
ON MAY 3, 1993. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
44
<PAGE>
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 (UNAUDITED) AND THE PERIODS ENDED
DECEMBER 31
FOR A SHARE OUTSTANDING THROUGHOUT THE YEAR
<TABLE>
<CAPTION>
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS
VALUE NET UNREALIZED FROM NET FROM NET ASSET NET ASSETS
BEGINNING INVESTMENT GAINS OR LOSSES INVESTMENT CAPITAL VALUE END TOTAL END OF
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN(DAGGER) PERIOD (000)
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------
SHORT-TERM INVESTMENT
- ---------------------
CLASS A
1996** $10.02 $0.24 $(0.03) $(0.24) -- $ 9.99 2.14% $ 36,239
1995 9.97 0.55 0.05 (0.55) -- 10.02 6.19 30,642
1994 10.01 0.35 (0.04) (0.35) -- 9.97 3.21 29,187
1993 10.01 0.29 -- (0.29) -- 10.01 2.96 31,337
1992(1) 10.00 0.27 0.03 (0.27) $(0.02) 10.01 3.47* 30,998
CLASS B
1996** $10.05 $0.23 $(0.04) $(0.23) -- $10.01 1.92% $ 1,495
1995 9.98 0.53 0.07 (0.53) -- 10.05 6.13 2,043
1994 10.03 0.33 (0.05) (0.33) -- 9.98 2.85 769
1993 10.01 0.28 0.01 (0.27) -- 10.03 2.90 205
1992(1) 10.00 0.25 0.03 (0.25) (0.02) 10.01 3.23* 193
- ------------
FIXED INCOME
- ------------
CLASS A
1996** $10.49 $0.28 $(0.41) $(0.28) -- $10.08 (1.20)% $108,586
1995 9.44 0.59 1.05 (0.59) -- 10.49 17.76 113,509
1994 10.68 0.59 (1.18) (0.59) $(0.06) 9.44 (5.66) 96,558
1993 10.38 0.61 0.52 (0.61) (0.22) 10.68 11.05 113,892
1992(1) 10.00 0.49 0.44 (0.49) (0.06) 10.38 11.60* 89,701
CLASS B
1996** $10.48 $0.27 $(0.41) $(0.27) -- $10.07 (1.33)% $ 6,572
1995 9.44 0.56 1.04 (0.56) -- 10.48 17.36% 5,844
1994 10.68 0.56 (1.18) (0.56) $(0.06) 9.44 (5.90) 5,525
1993 10.38 0.58 0.52 (0.58) (0.22) 10.68 10.76 6,519
1992(1) 10.00 0.47 0.44 (0.47) (0.06) 10.38 11.39* 1,214
- -------------------------------
NEW JERSEY MUNICIPAL SECURITIES
- -------------------------------
CLASS A
1996** $10.79 $0.22 $(0.23) $(0.22) -- $10.56 (0.08)% $ 23,894
1995 9.93 0.47 0.86 (0.47) -- 10.79 13.57 28,080
1994 10.85 0.48 (0.92) (0.48) -- 9.93 (4.12) 19,977
1993 10.29 0.50 0.56 (0.50) -- 10.85 10.48 27,064
1992(2) 10.00 0.30 0.29 (0.30) -- 10.29 9.01* 9,395
CLASS B
1996** $10.79 $0.21 $(0.23) $(0.21) -- $10.56 (0.21)% $ 22,996
1995 9.93 0.44 0.86 (0.44) -- 10.79 13.30 25,954
1994 10.85 0.45 (0.92) (0.45) -- 9.93 (4.35) 21,195
1993 10.29 0.46 0.56 (0.46) -- 10.85 10.09 22,061
1992(2) 10.00 0.29 0.29 (0.29) -- 10.29 8.29* 5,424
</TABLE>
<TABLE>
<CAPTION>
RATIO OF RATIO OF NET
EXPENSES INCOME
RATIO OF RATIO OF NET TO AVERAGE TO AVERAGE
EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO
TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
============================================================================
<S> <C> <C> <C> <C> <C>
- ---------------------
SHORT-TERM INVESTMENT
- ---------------------
CLASS A
1996** 0.80% 4.89% 0.95% 4.74% 21.57%
1995 0.80 5.52 0.97 5.35 64.85
1994 0.80 3.51 0.94 3.37 68.39
1993 0.80 2.94 0.95 2.79 81.92
1992(1) 0.80 3.50 1.01 3.29 68.15
CLASS B
1996** 1.05% 4.65% 1.20% 4.50% 21.57%
1995 1.05 5.27 1.22 5.10 64.85
1994 1.05 3.50 1.20 3.35 68.39
1993 1.05 2.09 1.13 2.01 81.92
1992(1) 1.05 3.14 1.26 2.93 68.15
- ------------
FIXED INCOME
- ------------
CLASS A
1996** 0.80% 5.59% 0.89% 5.50% 16.11%
1995 0.80 5.83 0.91 5.72 35.49
1994 0.80 5.91 0.90 5.81 15.24
1993 0.80 5.59 0.91 5.48 49.49
1992(1) 0.80 6.24 0.94 6.10 23.86
CLASS B
1996** 1.05% 5.34% 1.14% 5.25% 16.11%
1995 1.05 5.58 1.16 5.47 35.49
1994 1.05 5.65 1.15 5.55 15.24
1993 1.05 5.24 1.13 5.16 49.49
1992(1) 1.05 5.93 1.20 5.78 23.86
- -------------------------------
NEW JERSEY MUNICIPAL SECURITIES
- -------------------------------
CLASS A
1996** 0.56% 4.19% 0.93% 3.82% 7.65%
1995 0.41 4.43 0.93 3.91 2.83
1994 0.27 4.65 0.93 3.99 16.81
1993 0.20 4.57 1.00 3.77 23.83
1992(2) 0.46 4.56 1.22 3.80 2.23
CLASS B
1996** 0.81% 3.94% 1.18% 3.57% 7.65%
1995 0.66 4.18 1.18 3.66 2.83
1994 0.52 4.40 1.18 3.74 16.81
1993 0.45 4.34 1.23 3.54 23.83
1992(2) 0.62 4.44 1.39 3.67 2.23
<FN>
* ANNUALIZED
** RATIOS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 HAVE BEEN ANNUALIZED.
(DAGGER) TOTAL RETURN DOES NOT REFLECT SALES LOADS ON CLASS B SHARES.
(1) THE SHORT-TERM INVESTMENT AND FIXED INCOME FUNDS COMMENCED OPERATIONS ON
APRIL 1, 1992. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(2) THE NEW JERSEY MUNICIPAL SECURITIES FUND COMMENCED OPERATIONS ON MAY 4,
1992. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
45
<PAGE>
FINANCIAL HIGHLIGHTS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 (UNAUDITED) AND THE PERIODS ENDED
DECEMBER 31
FOR A SHARE OUTSTANDING THROUGHOUT THE YEAR
<TABLE>
<CAPTION>
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS
VALUE NET UNREALIZED FROM NET FROM NET ASSET NET ASSETS
BEGINNING INVESTMENT GAINS OR LOSSES INVESTMENT CAPITAL VALUE END TOTAL END OF
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN(DAGGER) PERIOD (000)
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------
INTERMEDIATE-TERM GOVERNMENT SECURITIES
- ---------------------------------------
CLASS A
1996** $10.37 $0.26 $(0.29) $(0.27) -- $10.07 (0.33)% $27,571
1995 9.51 0.54 0.86 (0.54) -- 10.37 15.00 28,877
1994 10.53 0.51 (1.01) (0.51) $(0.01) 9.51 (4.85) 26,277
1993 10.23 0.52 0.32 (0.52) (0.02) 10.53 8.32 34,075
1992(1) 10.00 0.41 0.24 (0.41) (0.01) 10.23 7.95* 16,327
CLASS B
1996** $10.37 $0.25 $(0.30) $(0.25) -- $10.07 (0.45)% $ 3,297
1995 9.51 0.51 0.86 (0.51) -- 10.37 14.71 3,665
1994 10.53 0.49 (1.01) (0.49) $(0.01) 9.51 (5.09) 2,372
1993 10.24 0.49 0.31 (0.49) (0.02) 10.53 7.94 4,903
1992(1) 10.00 0.39 0.25 (0.39) (0.01) 10.24 7.86* 2,190
- ---------------------------------
PENNSYLVANIA MUNICIPAL SECURITIES
- ---------------------------------
CLASS A
1996** $10.23 $0.21 $(0.27) $(0.21) -- $ 9.96 (0.55)% $ 3,661
1995 9.55 0.40 0.68 (0.40) -- 10.23 11.53 3,345
1994 10.17 0.36 (0.62) (0.36) -- 9.55 (2.58) 2,734
1993(2) 10.00 0.23 0.17 (0.23) -- 10.17 6.01 2,922
CLASS B
1996** $10.22 $0.20 $(0.26) $(0.20) -- $ 9.96 (0.58)% $ 339
1995 9.55 0.38 0.67 (0.38) -- 10.22 11.15 269
1994 10.17 0.33 (0.62) (0.33) -- 9.55 (2.83) 336
1993(3) 9.98 0.20 0.19 (0.20) -- 10.17 6.28* 289
- ----
GNMA
- ----
CLASS A
1996** $ 9.94 $0.30 $(0.50) $(0.30) -- $ 9.44 (2.03)% $ 6,965
1995 8.85 0.60 1.09 (0.60) -- 9.94 19.52 8,750
1994 9.85 0.54 (1.00) (0.53) $(0.01) 8.85 (4.71) 6,983
1993(2) 10.00 0.34 (0.15) (0.34) -- 9.85 2.80* 10,900
CLASS B
1996** $ 9.93 $0.29 $(0.50) $(0.29) -- $ 9.43 (2.16)% $ 1,572
1995 8.84 0.58 1.08 (0.57) -- 9.93 19.24 1,761
1994 9.85 0.50 (1.00) (0.50) (0.01) 8.84 (5.05) 1,853
1993(4) 10.01 0.31 (0.16) (0.31) -- 9.85 2.31* 2,633
- ------------
EQUITY VALUE
- ------------
CLASS A
1996** $12.81 $0.11 $1.04 $(0.11) -- $13.85 9.01% $98,300
1995 10.19 0.25 3.46 (0.25) (0.84) 12.81 36.71 82,677
1994 11.10 0.21 (0.83) (0.21) (0.08) 10.19 (5.61) 61,407
1993 10.64 0.18 0.46 (0.18) -- 11.10 6.12 67,383
1992(1) 10.00 0.14 0.64 (0.14) -- 10.64 10.51* 62,116
CLASS B
1996** $12.83 $0.10 $1.03 $(0.09) -- $13.87 8.81% $ 9,207
1995 10.21 0.21 3.47 (0.22) (0.84) 12.83 36.35 7,644
1994 11.12 0.18 (0.83) (0.18) (0.08) 10.21 (5.83) 3,031
1993 10.66 0.16 0.46 (0.16) -- 11.12 5.85 2,741
1992(1) 10.00 0.09 0.67 (0.10) -- 10.66 10.35* 1,562
</TABLE>
<TABLE>
<CAPTION>
RATIO OF RATIO OF NET
EXPENSES INCOME
RATIO OF RATIO OF NET TO AVERAGE TO AVERAGE AVERAGE
EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO COMMISSION
TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER RATE
NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE (DOUBLE DAGGER)
==============================================================================================
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------
INTERMEDIATE-TERM GOVERNMENT SECURITIES
- ---------------------------------------
CLASS A
1996** 0.80% 5.18% 0.91% 5.07% 29.80% n/a
1995 0.80 5.33 1.05 5.08 68.29 n/a
1994 0.80 5.13 0.95 4.98 40.27 n/a
1993 0.80 4.87 1.00 4.67 31.69 n/a
1992(1) 0.80 5.30 1.11 4.99 12.38 n/a
CLASS B
1996** 1.05% 4.93% 1.16% 4.82% 29.80% n/a
1995 1.05 5.08 1.30 4.83 68.29 n/a
1994 1.05 4.83 1.20 4.68 40.27 n/a
1993 1.05 4.59 1.23 4.41 31.69 n/a
1992(1) 1.05 5.00 1.36 4.69 12.38 n/a
- ---------------------------------
PENNSYLVANIA MUNICIPAL SECURITIES
- ---------------------------------
CLASS A
1996** 0.80% 4.28% 1.59% 3.48% 18.04% n/a
1995 0.80 4.05 1.27 3.58 36.92 n/a
1994 0.80 3.67 1.61 2.86 38.20 n/a
1993(2) 0.80 3.35 1.48 2.67 16.51 n/a
CLASS B
1996** 1.05% 4.03% 1.84% 3.23% 18.04% n/a
1995 1.05 3.80 1.55 3.30 36.92 n/a
1994 1.05 3.42 1.92 2.55 38.20 n/a
1993(3) 1.05 3.24 1.48 2.81 16.51 n/a
- ----
GNMA
- ----
CLASS A
1996** 0.80% 6.23% 1.19% 5.84% 0.00% n/a
1995 0.80 6.29 1.13 5.96 9.69 n/a
1994 0.80 5.72 0.97 5.55 102.77 n/a
1993(2) 0.80 4.48 1.08 4.20 252.73 n/a
CLASS B
1996** 1.05% 5.98% 1.44% 5.59% 0.00% n/a
1995 1.05 6.05 1.37 5.73 9.69 n/a
1994 1.05 5.47 1.22 5.30 102.77 n/a
1993(4) 1.05 4.70 1.29 4.46 252.73 n/a
- ------------
EQUITY VALUE
- ------------
CLASS A
1996** 0.80% 1.67% 1.04% 1.43% 43.93% $0.1109
1995 0.80 2.08 1.07 1.81 61.88 n/a
1994 0.80 1.92 1.06 1.66 44.98 n/a
1993 0.80 1.74 1.07 1.47 89.91 n/a
1992(1) 0.80 1.82 1.10 1.52 45.68 n/a
CLASS B
1996** 1.05% 1.43% 1.29% 1.19% 43.93% $0.1109
1995 1.05 1.83 1.32 1.56 61.88 n/a
1994 1.05 1.67 1.31 1.41 44.98 n/a
1993 1.05 1.51 1.30 1.26 89.91 n/a
1992(1) 1.05 1.64 1.36 1.33 45.68 n/a
<FN>
* ANNUALIZED
** RATIOS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 HAVE BEEN ANUALIZED.
(DAGGER) TOTAL RETURN DOES NOT REFLECT SALES LOADS ON CLASS B SHARES.
(DOUBLE DAGGER) AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES
AND SALES DURING THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR
THE FISCAL YEARS BEGINNING AFTER SEPTEMBER 1, 1995.
(1) THE INTERMEDIATE-TERM GOVERNMENT SECURITIES AND EQUITY VALUE FUNDS
COMMENCED OPERATIONS ON APRIL 1, 1992. RATIOS FOR THIS PERIOD HAVE BEEN
ANNUALIZED.
(2) THE PENNSYLVANIA MUNICIPAL SECURITIES--CLASS A FUND AND THE GNMA--CLASS A
FUND COMMENCED OPERATIONS ON MAY 3, 1993. RATIOS FOR THIS PERIOD HAVE BEEN
ANNUALIZED.
(3) THE PENNSYLVANIA MUNICIPAL SECURITIES--CLASS B FUND COMMENCED OPERATIONS ON
MAY 13, 1993. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(4) THE GNMA--CLASS B FUND COMMENCED OPERATIONS ON MAY 5, 1993. RATIOS FOR THIS
PERIOD HAVE BEEN ANNUALIZED.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
46
<PAGE>
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 (UNAUDITED) AND THE PERIODS ENDED
DECEMBER 31
FOR A SHARE OUTSTANDING THROUGHOUT THE YEAR
<TABLE>
<CAPTION>
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS
VALUE NET UNREALIZED FROM NET FROM NET ASSET NET ASSETS
BEGINNING INVESTMENT GAINS OR LOSSES INVESTMENT CAPITAL VALUE END TOTAL END OF
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN(DAGGER) PERIOD (000)
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------
EQUITY INCOME
- -------------
CLASS A
1996** $13.07 $0.16 $0.96 $(0.17) $ -- $14.02 8.65% $46,771
1995 10.26 0.31 3.29 (0.31) (0.48) 13.07 35.55 44,202
1994 11.17 0.32 (0.81) (0.32) (0.10) 10.26 (4.42) 34,514
1993 10.72 0.29 0.80 (0.29) (0.35) 11.17 10.27 38,237
1992(1) 10.00 0.22 0.72 (0.22) -- 10.72 12.72* 32,538
CLASS B
1996** $13.08 $0.15 $0.96 $(0.13) $ -- $14.06 8.53% $12,380
1995 10.27 0.28 3.29 (0.28) (0.48) 13.08 35.21 9,612
1994 11.17 0.29 (0.80) (0.29) (0.10) 10.27 (4.56) 5,657
1993 10.73 0.28 0.78 (0.27) (0.35) 11.17 9.94 4,421
1992(1) 10.00 0.15 0.77 (0.19) -- 10.73 12.43* 585
- -------------
MID CAP VALUE
- -------------
CLASS A
1996** $12.55 $0.06 $0.77 $(0.06) $ -- $13.32 6.60% $44,398
1995 10.83 0.15 1.95 (0.15) (0.23) 12.55 19.49 42,375
1994 12.32 0.12 (1.27) (0.12) (0.22) 10.83 (9.34) 33,448
1993 10.99 0.11 1.33 (0.11) -- 12.32 13.22 35,648
1992(1) 10.00 0.07 0.99 (0.07) -- 10.99 14.30* 29,507
CLASS B
1996** $12.53 $0.04 $0.77 $(0.04) $ -- $13.30 6.49% $ 6,021
1995 10.82 0.12 1.94 (0.12) (0.23) 12.53 19.13 5,653
1994 12.31 0.10 (1.27) (0.10) (0.22) 10.82 (9.54) 4,567
1993 10.99 0.09 1.32 (0.09) -- 12.31 12.88 2,720
1992(1) 10.00 0.05 1.00 (0.06) -- 10.99 14.08* 637
- ---------------
BALANCED GROWTH
- ---------------
CLASS A
1996** $12.05 $0.22 $0.40 $(0.22) $ -- $12.45 5.10% $34,504
1995 9.91 0.44 2.27 (0.44) (0.13) 12.05 27.76 32,145
1994 10.78 0.37 (0.86) (0.38) -- 9.91 (4.61) 26,921
1993 10.35 0.38 0.43 (0.38) -- 10.78 7.89 25,712
1992(1) 10.00 0.29 0.34 (0.28) -- 10.35 8.53* 16,899
CLASS B
1996** $12.07 $0.21 $0.39 $(0.21) $ -- $12.46 4.97% $ 8,979
1995 9.92 0.42 2.28 (0.42) (0.13) 12.07 27.53 8,452
1994 10.79 0.35 (0.87) (0.35) -- 9.92 (4.87) 6,737
1993 10.36 0.37 0.42 (0.36) -- 10.79 7.62 8,122
1992(1) 10.00 0.20 0.40 (0.24) -- 10.36 8.15* 2,990
- --------------------
INTERNATIONAL GROWTH
- --------------------
CLASS A
1996** $10.74 $0.09 $0.66 $ -- $ -- $11.49 6.98% $12,359
1995(2) 10.00 0.03 0.75 (0.02) (0.02) 10.74 7.81* 9,990
CLASS B
1996** $10.73 $0.08 $0.66 $ -- $ -- $11.47 6.90% $ 1,015
1995(3) 10.00 0.01 0.75 (0.01) (0.02) 10.73 7.64* 621
</TABLE>
<TABLE>
<CAPTION>
RATIO OF RATIO OF NET
EXPENSES INCOME
RATIO OF RATIO OF NET TO AVERAGE TO AVERAGE AVERAGE
EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO COMMISSION
TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER RATE
0) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE (DOUBLE DAGGER)
===============================================================================================
<S> <C> <C> <C> <C> <C>
- -------------
EQUITY INCOME
- -------------
CLASS A
1996** 0.80% 2.45% 1.06% 2.19% 41.70% $0.1225
1995 0.80 2.61 1.10 2.31 42.97 n/a
1994 0.80 2.96 1.08 2.68 37.76 n/a
1993 0.80 2.65 1.10 2.35 89.89 n/a
1992(1) 0.80 2.88 1.14 2.54 58.41 n/a
CLASS B
1996** 1.05% 2.21% 1.31% 1.95% 41.70% $0.1225
1995 1.05 2.36 1.35 2.06 42.97 n/a
1994 1.05 2.71 1.33 2.43 37.76 n/a
1993 1.05 2.42 1.35 2.12 89.89 n/a
1992(1) 1.05 2.54 1.40 2.19 58.41 n/a
- -------------
MID CAP VALUE
- -------------
CLASS A
1996** 0.80% 0.87% 1.07% 0.60% 24.66% $0.0957
1995 0.80 1.28 1.10 0.98 32.96 n/a
1994 0.80 1.06 1.08 0.78 13.82 n/a
1993 0.80 1.03 1.10 0.73 24.49 n/a
1992(1) 0.80 0.98 1.15 0.63 09.29 n/a
CLASS B
1996** 1.05% 0.62% 1.32% 0.35% 24.66% $0.0957
1995 1.05 1.03 1.35 0.73 32.96 n/a
1994 1.05 0.85 1.33 0.57 13.82 n/a
1993 1.05 0.83 1.35 0.53 24.49 n/a
1992(1) 1.05 0.88 1.40 0.53 09.29 n/a
- ---------------
BALANCED GROWTH
- ---------------
CLASS A
1996** 0.80% 3.67% 1.08% 3.39% 19.01% $0.1203
1995 0.80 3.89 1.11 3.58 41.63 n/a
1994 0.80 3.64 1.09 3.35 27.15 n/a
1993 0.80 3.75 1.14 3.41 63.03 n/a
1992(1) 0.80 3.88 1.20 3.48 82.76 n/a
CLASS B
1996** 1.05% 3.42% 1.33% 3.14% 19.01% $0.1203
1995 1.05 3.64 1.36 3.33 41.63 n/a
1994 1.05 3.39 1.34 3.10 27.15 n/a
1993 1.05 3.47 1.38 3.14 63.03 n/a
1992(1) 1.05 3.59 1.45 3.19 82.76 n/a
- --------------------
INTERNATIONAL GROWTH
- --------------------
CLASS A
1996** 1.50% 1.73% 1.73% 1.50% 34.44% $0.0067
1995(2) 1.50 0.79 2.11 0.18 14.32 n/a
CLASS B
1996** 1.75% 1.62% 1.98% 1.39% 34.44% $0.0067
1995(3) 1.75 0.45 2.38 (0.18) 14.32 n/a
<FN>
* ANNUALIZED
** RATIOS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 HAVE BEEN ANNUALIZED.
(DAGGER) TOTAL RETURN DOES NOT REFLECT SALES LOADS ON CLASS B SHARES.
(DOUBLE DAGGER) AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES
AND SALES DURING THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR
THE FISCAL YEARS BEGINNING AFTER SEPTEMBER 1, 1995.
(1) THE EQUITY INCOME, THE MID CAP VALUE AND BALANCED GROWTH FUNDS COMMENCED
OPERATIONS ON APRIL 1, 1992. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(2) THE INTERNATIONAL GROWTH FUND--CLASS A COMMENCED OPERATIONS ON MAY 1, 1995.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
(3) THE INTERNATIONAL GROWTH FUND--CLASS B COMMENCED OPERATIONS ON MAY 4, 1995.
RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
47
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
1. ORGANIZATION The Pillar Funds (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
investment company with fifteen funds: the U.S. Treasury Securities Money Market
Fund, the Prime Obligation Money Market Fund, the Tax-Exempt Money Market Fund,
the U.S. Treasury Securities Plus Money Market Fund (the "Money Market Funds"),
the Short-Term Investment Fund, the Fixed Income Fund, the New Jersey Municipal
Securities Fund, the Intermediate-Term Government Securities Fund, the
Pennsylvania Municipal Securities Fund, the GNMA Fund (the "Fixed Income
Funds"), the Equity Value Fund (formerly known as the Equity Growth Fund), the
Equity Income Fund, the Mid Cap Value Fund (formerly known as the Equity
Aggressive Growth Fund), International Growth Fund (the "Equity Funds") and the
Balanced Growth Fund. Each of the Funds is "diversified" for purposes of the
1940 Act except for the New Jersey Municipal Securities Fund, the Pennsylvania
Municipal Securities Fund and the International Growth Fund, each of which is a
non-diversified Fund. Shares of the U.S. Treasury Securities Plus Money Market
Fund are offered exclusively to customers of the Money Desk of the Bank
Investment Division of Summit Bank. The minimum investment for this Fund is
$100,000. The financial statements included herein present information relating
to all of the Funds. The assets of each Fund are segregated and a shareholder's
interest is limited to the Fund in which shares are held. The Fund's prospectus
provides a description of the Fund's investment objectives, policies and
strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by
the Trust.
SECURITY VALUATION--The value of investment securities held by the Money
Market Funds are stated at amortized cost, which approximates market value.
Under this valuation method, purchase discounts and premiums are accreted and
amortized ratably to maturity and are included in interest income.
Investment in equity securities which are traded on a national securities
exchange (or reported on the NASDAQ national market system) are stated at the
last quoted sales price if readily available for such equity securities on each
business day; other equity securities traded in the over-the-counter market and
listed equity securities for which no sale was reported on that date are stated
at the last quoted bid price. Debt obligations exceeding sixty days to maturity
for which market quotations are readily available are valued at the most
recently quoted bid price. Debt obligations with sixty days or less remaining
until maturity may be valued at their amortized cost. Restricted securities for
which quotations are not readily available are valued at fair value using
methods determined in good faith under general trustee supervision.
FEDERAL INCOME TAXES--It is each Fund's intention to qualify as a regulated
investment company for Federal income tax purposes and to distribute all of its
taxable income and net capital gains. Accordingly, no provisions for Federal
income taxes are required.
The International Growth Fund may be subject to taxes imposed by countries
in which it invests with respect to its investments in issuers existing or
operating in such countries. Such taxes are generally based on either income
earned or repatriated. The International Growth Fund accrues such taxes when the
related income is earned.
FOREIGN CURRENCY TRANSLATION--The books and records of the International
Growth Fund are maintained in U.S. dollars. Foreign currency amounts are
translated into U.S. dollars on the following basis: (I) market value of
investment securities, other assets and liabilities at the current rate of
exchange; and (II) purchases and sales of investment securities, income and
expenses at the rele-
48
<PAGE>
vant rates of exchange prevailing on the respective dates of such transactions.
The International Growth Fund does not isolate that portion of gains and
losses on investment securities which is due to changes in foreign exchange
rates from that which is due to changes in market prices of such securities.
The International Growth Fund reports gains and losses on foreign currency
related transactions as realized and unrealized gains and losses for financial
reporting purposes, whereas such gains and losses are treated as ordinary income
or loss for Federal income tax purposes.
REPURCHASE AGREEMENTS--Securities pledged as collateral for Repurchase
Agreements are held by the custodian bank until the respective agreements
mature. Provisions of the Repurchase Agreements and procedures adopted by the
Adviser ensure that the market value of the collateral including accrued
interest thereon, is sufficient in the event of default by the counterparty. If
the counterparty defaults and the value of the collateral declines or if the
counterparty enters into an insolvency proceeding, realization of the collateral
by the Fund may be delayed or limited.
SECURITY TRANSACTIONS AND INVESTMENT INCOME--Security transactions are
accounted for on the date the security is purchased or sold (trade date). Costs
used in determining realized gains and losses on the sale of investment
securities are those of the specific securities sold adjusted for the accretion
and amortization of purchase discounts and premiums during the respective
holding periods. Interest income is recorded on the accrual basis; dividend
income is recorded on the ex-dividend date. Purchase discounts and premiums on
securities held by the Fixed Income Funds and the Balanced Growth Fund are
accreted and amortized to maturity using the scientific interest method, which
approximates the effective interest method.
DISTRIBUTIONS TO SHAREHOLDERS--Distributions from net investment income for
the Money Market Funds and the Fixed Income Funds are declared daily and paid
monthly. The Equity Funds and the Balanced Growth Fund declare and pay
distributions from net investment income quarterly, except for the International
Growth Fund which declares and pays distributions periodically. Any net realized
capital gains will be distributed at least annually for all the Funds.
EXPENSES--Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses of the Trust are
prorated to the Funds on the basis of relative net assets. Class specific
expenses, such as the 12b-1 fees, are borne by that class. Income, other
expenses and realized and unrealized gains and losses of a Fund are allocated to
the respective classes on the basis of the relative net assets each day.
In February of 1996, the Trust was notified of possible claims, which are
associated with inappropriate deposits made by certain shareholders in the U.S.
Treasury Securities, Prime Obligation and Tax-Exempt Money Market Funds. While
each Fund's exposure varies, as of February 22, 1996, the Funds' aggregate
exposure from these possible claims is less than .1% of aggregate net assets of
these Funds. The Trust and its service providers maintain insurance coverage
which may insure these claims. In management's opinion, the resolution of this
matter will not have a material effect on the financial condition and results of
operations of these Funds.
USE OF ESTIMATES--The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect the reported amount of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and reported amounts of revenues and expenses during the
reporting period. Actual amounts could differ from these estimates.
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
3. ORGANIZATIONAL COSTS AND
TRANSACTIONS WITH AFFILIATES
The Trust incurred organizational costs of approximately $211,000.
Organizational costs have been capitalized by the fund and are being amortized
over sixty months commencing with operations. In the event of the initial shares
of the fund redeemed by any holder thereof during the period that the fund is
amortizing its organizational costs the redemption proceeds payable to the
holder thereof by the fund will be reduced by the unamoritzed organizational
costs in the same ratio as the number of initial shares being redeemed bears to
the number of initial shares outstanding at the time of redemption. These costs
include legal fees of approximately $47,000 for organizational work performed by
a law firm of which an officer of the fund is a partner.
Certain officers of the Trust are also officers of SEI Fund Resources (the
"Administrator"). The Trust pays each unaffiliated Trustee an annual fee for
attendance at quarterly, interim and committee meetings. Compensation of
officers and affiliated Trustees is paid by the Administrator.
4. ADMINISTRATION AND DISTRIBUTION
AGREEMENTS
The Trust and the Administrator are parties to an Administration Agreement (the
"Agreement"), under which the Administrator provides the Trust with
administrative services for an annual fee which is calculated daily and paid
monthly at an annual rate of .20% of the average daily net assets of each Fund
with the exception of the U.S. Treasury Securities Plus Money Market Fund which
has an annual fee which is calculated daily and paid monthly at an annual rate
of .35% of average daily net assets. The Administrator has voluntarily agreed to
waive all or a portion of its fee in order to limit the operating expenses of
certain Funds.
SEI Financial Services Company (the "Distributor") acts as the distributor
of the Trust's shares. The Trust has adopted a Distribution Plan (the "Plan") on
behalf of the Class B shares pursuant to Rule 12b-1. The Plan provides for
payment to the Distributor at an annual rate of .25% of the Funds' Class B
average daily net assets. The Distributor receives no fees for its distribution
services under this Plan for Class A shares of any fund with the exception of
the U.S. Treasury Securities Plus Money Market Fund which pays a distribution
fee of .03% of net assets.
5. INVESTMENT ADVISORY AND CUSTODIAN
AGREEMENTS
The Trust and Summit Bank Investment Management Division, a division of Summit
Bank, (the "Adviser") are parties to an advisory agreement. Under the terms of
the agreement, the Adviser will receive a fee, which is calculated daily and
paid monthly, at an annual rate of .35% of the average daily net assets of the
U.S. Treasury Securities Money Market, Prime Obligation and Tax-Exempt Money
Market Funds, .15% of the average daily net assets of the U.S. Treasury
Securities Plus Money Market Fund, .60% of the average daily net assets of the
Fixed Income Funds and .75% of the average daily net assets of each of the
Equity Funds (except the International Growth Fund) and the Balanced Growth
Fund. The Trust and the Adviser are also parties to a second advisory agreement
relating only to the International Growth Fund. Under the terms of the agreement
the Adviser will receive a fee, which is calculated daily and paid monthly, at
an annual rate of 1.00% of the average daily net assets of the International
Growth Fund. The Adviser has voluntarily agreed to waive all or a portion of its
fee in order to limit the operating expenses of the Funds.
Wellington Management Company serves as the investment sub-advisor to the
International Growth Fund.
50
<PAGE>
Summit Bank also acts as Custodian of securities for the Trust. The
Custodian plays no role in determining the investment policies of the Trust or
which securities are to be purchased or sold in the Funds. For its services, the
Custodian receives a fee, which is calculated daily and paid monthly, at an
annual rate of .025% of the average daily net assets of each domestic Fund and
an annual rate of .17% of the average daily net assets of the International
Growth Fund. The Trust has a line of credit agreement with the Custodian to
provide for the advance of funds as required to meet redemption requests.
6. INVESTMENT TRANSACTIONS
The cost of security purchases and the proceeds from the sale of securities,
other than short-term investments, during the period ended June 30, 1996 were as
follows:
NEW
SHORT-TERM FIXED JERSEY INT.-TERM PA
INV. INCOME MUNI. GOVT. MUNI. GNMA
---------- ------- ------- --------- ------ -----
(000) (000) (000) (000) (000) (000)
Purchases
U.S. Gov't $ -- $15,845 $ -- $ 9,188 $ -- $ --
Other 303 1,927 3,743 -- 1,232 --
Sales
U.S. Gov't -- 16,052 -- 10,457 -- 945
Other 3,340 4,107 7,423 -- 673 --
MID
EQUITY EQUITY CAP BALANCED INTERNATIONAL
VALUE INCOME VALUE GROWTH GROWTH
------- ------- ------- -------- -------------
(000) (000) (000) (000) (000)
Purchases
U.S. Gov't $ -- $ -- $ -- $3,469 $ --
Other 40,934 22,334 13,821 3,909 5,741
Sales
U.S. Gov't -- -- -- 4,052 --
Other 39,183 24,581 12,291 6,821 4,065
At June 30, 1996, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized gain or loss on securities at June 30, 1996, for each Fund is
as follows:
NEW
SHORT-TERM FIXED JERSEY INT.-TERM PA
INV. INCOME MUNI. GOVT. MUNI. GNMA
---------- ------- ------ --------- ------ ----
(000) (000) (000) (000) (000) (000)
Aggregate gross
unrealized gain $ 4 $ 460 $450 $ 83 $ 38 $ 68
Aggregate gross
unrealized loss (38) (2,529) (511) (539) (50) (387)
----- ------- ----- ----- ----- ------
Net unrealized loss $(34) $(2,069) $(61) $(456) $(12) $(319)
MID
EQUITY EQUITY CAP BALANCED INTERNATIONAL
VALUE INCOME VALUE GROWTH GROWTH
------- ------- ------- -------- -------------
(000) (000) (000) (000) (000)
Aggregate gross
unrealized gain $18,146 $8,981 $10,625 $5,200 $945
Aggregate gross
unrealized loss (476) (174) (1,787) (220) (339)
------- ------ ------- ------ ----
Net unrealized gain $17,670 $8,807 $ 8,838 $4,980 $606
7. CONCENTRATION OF CREDIT RISK
The money market funds invest primarily in a portfolio of money market
instruments maturing in one year or less whose ratings are within one of the two
highest ratings category assigned by a nationally recognized statistical rating
agency ("NRSRO") or, if not rated, are believed to be of comparable quality. The
ability of the issuers of the securities held by a Fund to meet their
obligations may be affected by economic developments in a specific industry,
state or region. The Fixed Income Funds invest in debt instruments and the
Balanced Growth Fund invests in a combination of equity, fixed income and money
market securities.
The taxable funds may invest in bank obligations. As a result of this
policy, these investments may be subject to greater risk than a fund that does
not invest in the banking industry. In particular, bank obligations may be
subject to the risks associated with interest rate volatility, changes in
federal and state laws and regulations governing banking and the inability of
borrowers to pay principal and interest when due. In addition, foreign banks
present the risk of investing in foreign securities and are not subject to the
same reserve requirements and other regulations as those of U.S. banks.
51
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
THE PILLAR FUNDS -- JUNE 30, 1996 (UNAUDITED)
The New Jersey Municipal Securities and the Pennsylvania Municipal
Securities Funds invest primarily in a diversified portfolio of municipal
securities, including municipal bonds and debentures, rated Baa or better by a
NRSRO, or, if not rated, determined by the Adviser to be of comparable quality.
Although the Funds maintain a diversified portfolio, the issuers' abilities to
meet their obligations may be affected by economic developments in a specific
state or region.
The following tables present a summary of holdings in each of these portfolios:
TAX-
U.S. EXEMPT U.S.
TREASURY PRIME MONEY TREASURY
SECURITIES OBLIGATION MARKET SECURITIES PLUS
---------- ---------- ------- ---------------
U.S. Gov't. Securities 96.9% 61.1% -- 52.4%
Repurchase Agreements -- 23.2 -- 47.6
Municipal Securities -- -- 100% --
Commercial Paper -- 14.4 -- --
Other Short Term
Securities 3.1 1.3 -- --
SHORT-TERM FIXED NEW JERSEY INT.-TERM
INV. INCOME MUNI. GOVT.
---------- ------- ---------- ----------
U.S. Gov't. Securities 19.5% 72.9% -- 98.5%
Repurchase Agreements -- -- -- --
AAA 7.1 3.0 55.5% --
AA 15.5 11.0 32.1 --
A 48.8 7.8 4.6 --
BBB -- 0.8 0.5 --
BB -- -- -- --
NR 1.8 -- 7.3 --
All Other 7.3 4.5 -- 1.5
BALANCED PA
GROWTH MUNI. GNMA
-------- ----- -----
U.S. Gov't. Securities 41.6% -- 99.0%
Repurchase Agreements -- -- --
AAA -- 75.0% --
AA 1.2 17.4 --
A 2.8 3.9
BBB -- -- --
BB -- -- --
NR -- 2.4 --
Common Stock 45.0 -- --
All Other 9.4 1.3 1.0
8. SHAREHOLDER VOTING RESULTS
A special meeting of shareholders was called on February 9, 1996, at which time
the shareholders of the Trust voted on a proposal to elect a Board of Trustees.
The results of the shareholder meeting are set forth below:
ARTHUR L. BERMAN JAMES B. GRECCO RAYMOND KONRAD
For 465,036,970 465,008,763 465,043,044
Against 94,777 122,984 86,703
Abstain -- -- --
ROBERT A. NESHER CHRISTINE H. YACKMAN
For 465,038,437 465,024,899
Against 93,310 106,848
Abstain -- --
A special meeting of shareholders originally called for March 1, 1996 was
adjourned until April 29, 1996 at which time the shareholders of the Trust voted
on a series of proposals (the "Proposals"). Each Proposal and the results of the
shareholder meeting are set forth below:
52
<PAGE>
I. Proposal to approve a new Investment Advisory Agreement between Summit Bank
and the Trust with respect to all Funds, other than the International Growth
Fund.
<TABLE>
<CAPTION>
U.S. TREASURY PRIME TAX-EXEMPT U.S. TREASURY SHORT-TERM
SECURITIES OBLIGATION MONEY MARKET SECURITIES PLUS INV.
------------- ----------- ------------ --------------- ----------
<S> <C> <C> <C> <C> <C>
For 383,759,904 311,686,861 67,704,845 45,862,405 2,611,540
Against --- 43,168 1,606,973 10,557 1,723
Abstain 3,053 847,433 10,232 383,373 47,178
FIXED NEW JERSEY INT-TERM PA
INCOME MUNI GOVT. MUNI GNMA
------------- ----------- ------------ --------------- ----------
For 10,367,325 2,878,801 2,611,021 348,153 671,846
Against 14,018 22,643 6,571 --- 8,661
Abstain 21,661 84,109 15,245 --- 38,922
EQUITY EQUITY MID CAP BALANCED
VALUE INCOME VALUE GROWTH
------------- ----------- ------------ ---------------
For 6,670,099 3,504,607 3,520,367 2,997,677
Against 3,256 19,652 2,690 8,737
Abstain 25,726 12,338 6,355 8,962
</TABLE>
II. Proposal to approve a new Investment Advisory Agreement between Summit Bank
and the Trust with respect to the International Growth Fund.
For 968,978
Against 277
Abstain 977
III. Proposal to approve a new Investment Sub-Advisory Agreement among Summit
Bank, Wellington Management Company and the Trust with respect to the
International Growth Fund.
For 969,516
Against 218
Abstain 497
There were no other proposals voted on at such meeting.
53
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
ADVISOR:
REACH HIGHER
(SUMMIT BANK LOGO)
[GRAPHIC OMITTED]
DISTRIBUTOR:
SEI FINANCIAL SERVICES COMPANY
680 East Swedesford Road
Wayne, Pennsylvania 19087-1658
1-800-342-5734
PIL-F-008-05 66 184 004 6/96
