[LOGO]
THE PILLAR
FUNDS (REGISTRATION MARK)
ANNUAL
REPORT TO
SHAREHOLDERS
DECEMBER 31, 1995
This information must be preceded or accompanied by a current prospectus for
each portfolio described.
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THE PILLAR FUNDS
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To Our Shareholders:
The year just concluded was the best of the decade for U.S. financial assets.
Fixed income returns varied from 10% to 20% or more, depending on maturity and
equity returns were above 35% as measured by the Popular Averages. For the most
part, these returns were unanticipated at the beginning of the year as profit
gains proved larger than expected and interest rates reversed the sharp
increases of 1994. However, most equity gains were in large capitalization blue
chips, with small and mid-cap stocks lagging. U.S. markets far exceeded returns
in most overseas and emerging markets.
Despite stocks and bonds ending 1995 at record levels, economic growth seemed to
weaken late in the year. Consumer spending during Christmas was lackluster, auto
sales edged lower and export growth weakened as the economies of our major
trading partners slowed. Whatever the outcome of the current budget wrangle
between the Administration and Congress, it appears that federal spending as a
source of economic output will be lower, going forward. Slowing growth is
generally not the prescription for continuing substantial market gains.
THE ECONOMY
We do not expect a recession in 1996. We believe that growth has slowed from the
high water mark of 4.2% in the third quarter but that it will not turn negative
in 1996. Recent weakness in consumer sales data is seen as somewhat ambiguous.
The data does not adequately capture mail order, electronic and
telecommunication services which have become a larger portion of consumer
spending. In addition, personal income growth as measured in the GDP continues
to grow nicely augmented by strong financial markets. Worrisome trends include,
rising delinquency rates on consumer credit cards and weakness in new car sales.
Mortgage delinquency rates, on the other hand, have remained steady. All-in-all,
we would expect GDP to rise about 2.0% in 1996. With the consumer still
accounting for about two-thirds of GDP, this should be enough to avoid
recession.
But we do believe that corporate profit growth could be a casualty in 1996.
Export growth will slow, government spending will be flat at best and the
ability to raise prices will be constricted. Inventories seem high in relation
to current order trends. Offsetting this somewhat is that corporate
restructurings continue at a strong pace. Inflation remains under control, with
the CPI likely to finish under 3% for the fourth straight year. This has allowed
productivity gains to accrue to net profits. Nevertheless, we would expect
profit growth to fall to 5-10% in 1996, form the 15-20% rate in 1995. Growth
will likely be better in the second half of the year when comparisons get
easier.
We would add one caveat to this benign profit forecast. Since the beginning of
this recovery in 1991, there has been a large shift in the make-up of the GDP
with capital spending leading the way as corporations substitute capital for
labor. This is a consequence of lower interest rates and reduced prices for
equipment, particularly technology. This could be nearing its end as slowing
labor force growth leads to rising labor costs and a greater share of corporate
profits going to labor rather than shareholders. This should not be an issue
until later in the decade.
THE MARKETS
Most investors, ourselves included, were not expecting the robust markets we
enjoyed from the beginning of the year. In retrospect we see three reasons for
this. The first was that other types of investment assets offered uninspiring
returns. Real estate, commodities and other tangible assets had seen large
increases through most of the last two decades and were also impaired by adverse
tax law changes. Secondly, financial assets were fueled by liquidity offered by
growing use of 401(k) plans. These plans are substituting in large measure for
traditional employee benefit plans and placing the responsibility for retirement
savings on the individual. While the evidence is still scant, it would appear
that aging baby boomers are heeding frequent comment about the possible future
insolvency of the Social Security System and taking matters into their own hands
by starting to provide for their own future. Third was the sharp decline in
interest rates that occurred with the 30 year Treasury bond declining from 8% to
6% at year end.
We think financial asset returns will be positive in 1996. But we would be
remiss in not warning that expected returns will likely be much less than in the
year just concluded. We see three reasons for caution: the near term uncertainty
over the shape of the budget; the probability of slowing profit growth mostly in
the first half; and the longer term uncertainty of the elections in November.
Some building of reserves as we go through the year may be in order.
With inflation under control, we think interest rates could continue to fall.
Taxable bonds could provide a total return of 6-8% but the outsized gains of
1995 are probably not in the cards. We continue to recommend maturities of
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THE PILLAR FUNDS (Continued)
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three to seven years with the average about equal to the relevant index. In the
municipal arena, we think fears of a flat tax are overdone and there may be some
bargains in longer maturities.
We are in the fourth year of a Presidential cycle and if history is a guide,
stocks usually advance. The theory being that the party in power will do
everything to keep the economy moving. Additionally, where previous year's gains
have been as large as 1995, subsequent years usually provide continued upside.
As in most Presidential election years, we think most of the gain will occur in
the first half as the uncertainty of the outcome plays a greater role the nearer
we get to November. We think stocks have a potential 8-10% total return here but
believe that leadership may change from those groups which led last year.
We will continue to emphasize those companies and industries which are in the
midst of long term restructuring and consolidation. This is often fertile ground
for improving cash flows which may benefit shareholders through share
repurchase, acquisitions which improve the growth rate or higher dividends. We
will also continue to invest in those companies that have predictable earnings
based on unit growth or companies that are exposed to overseas markets where
growth may be higher than in the U.S.
We will also look to laggard market sectors for sources of new investment
opportunities. Many international markets have lagged the U.S., valuations are
not expensive and room for interest cuts are good. In the U.S. markets, small
and mid-cap segments may offer possibilities as well as lagging sectors such as
retail. We think the above areas will offer new opportunities and represent our
best judgment as we enter 1996.
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
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MONEY MARKET REVEIW
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The Pillar Funds -- December 31, 1995
U.S. TREASURY SECURITIES MONEY MARKET FUND
PRIME OBLIGATION MONEY MARKET FUND
U.S. TREASURY SECURITIES PLUS
MONEY MARKET FUND
After rising substantially during 1994, short term interest rates began a
gradual decline during the middle of the 1995. After peaking at 6%, the Federal
Reserve decided to lower short term "policy" rates, i.e., Fed Funds, by a total
of 50 basis points in two incremental moves of 25 basis points each. This has
brought the benchmark Funds rate to 5.5% from its earlier peak of 6%.
As the overall Treasury Yield Curve continued to flatten, it remained clear to
us that short term interest rates would fall. Thus, throughout 1995 we
maintained maturities in all of the Pillar Money Market Funds towards the longer
end of their allowable ranges. Ironically, however, the highest yields were to
be attained at the very shortest maturities such as overnight repurchase
agreements as the markets had continually discounted further Federal Reserve
actions towards lower policy rates. Where permissible, therefore, we maintained
substantial positions in these overnight investments to boost overall Fund
yields.
Going forward, we continue to see an accommodative monetary policy resulting in
further short term interest rate reductions, albeit at a gradual pace. This
could bring short term T-Bill yields towards the 4.5% level of year end 1996.
Clearly, the various economic indicators appear to show continued sluggish
growth and very moderate inflation for now which should set the stage for the
aforementioned action.
TAX-EXEMPT MONEY MARKET FUND
After rising sharply during 1994, yields on tax-exempt instruments declined
throughout 1995. As measured by the Bond Buyer One Year Note Index, yields fell
from 4.95% at year-end 1994 to 3.60% by year-end 1995. Currently, signs of
modest economic growth, subdued inflationary pressures and an accommodative
Federal Reserve point toward a less volatile interest rate environment.
The average maturity of the Tax-Exempt Money Market Fund at year-end was 50
days. Based upon our belief that rates will decline moderately in the first
quarter of the year, we expect to modestly lengthen the average maturity of the
fund.
3
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MANAGER'S DISCUSSION AND ANALYSIS OF FUND PERFORMANCE
================================================================================
The Pillar Funds -- December 31, 1995
SHORT-TERM INVESTMENT FUND
During 1995 the Pillar Fund Short Term Investment Fund Class A showed a total
return of 6.19% while the Salomon One-Year Treasury Benchmark On-the-Run showed
a total return of 8.09%. Late in the year Morningstar awarded the Fund five
stars.
There was an inverted curve on the short end for much of the year and our
relatively short weighted average maturity range took advantage of the yields.
Towards the end of 1995 we slowly lengthened maturities always staying inside
the 1 year maximum for any single issue.
We expect rates to work slightly lower as we move into 1996 and the Fund is
prepared for that.
-------------- Investment Growth Analysis ------------
AVERAGE ANNUAL TOTAL RETURN1
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ONE YEAR THREE YEAR SINCE INCEPTION
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Class A 6.19% 4.11% 3.98%
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Class B (without load) 6.13% 3.95% 3.81%
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Class B* (with load) 5.08% 3.61% 3.53%
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[GRAPHIC OMITTED]
A line graph depicting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Pillar Short-Term Investment Fund Class A and the Pillar Short-Term Investment
Fund Class B from April 30,1992 through December 31, 1995 as compared with the
growth of a $10,000 investment in the Salomon One-Year Treasury Benchmark
On-the-Run. The plot points used to draw the line graph were as follows:
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Pillar Invested in Pillar Invested in
Short-Term Investment Short-Term Investment Salomon One-Year
Fund Class A Fund Class B Treasury Benchmark
On-the-Run
4/30/92 $10,000 $9,900 $10,000
12/31/92 $10,250 $10,130 $10,344
12/31/93 $10,553 $10,425 $10,750
12/31/94 $10,892 $10,722 $11,034
12/31/95 $11,566 $11,379 $11,927
* Return figures reflect the impact of the maximum 1.00% sales charge.
1 For the period ended December 31, 1995. Past performance of the period is not
predicitive of future performance. The investment return and principal value
of an investment will fluctuate, so an investor's shares, when redeemed, may
be worth more or less than their original cost. Short-Term Investment Class A
and Class B shares commenced operations on April 1, 1992.
FIXED INCOME FUND
1995 was an excellent year for the Pillar Fixed Income Fund Class A with a total
return of 17.76%. This compares to the Lehman Brothers Intermediate Term
Government/ Corporate Index of 15.3%. We expect that interest rates will
continue to decline slightly into 1996 and the Fund is structured to take
advantage of that decline.
We are holding to a duration of 4 1/2 to 5 years which translates to a weighted
average maturity of 6 1/2 - 7 years.
-------------- Investment Growth Analysis ------------
AVERAGE ANNUAL TOTAL RETURN1
- --------------------------------------------------------------------------------
ONE YEAR THREE YEAR SINCE INCEPTION
- --------------------------------------------------------------------------------
Class A 17.76% 7.26% 8.13%
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Class B (without load) 17.36% 6.95% 7.85%
- --------------------------------------------------------------------------------
Class B* (with load) 12.70% 5.51% 6.67%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
A line graph depicting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Pillar Fixed Income Fund Class A and the Pillar Fixed Income Fund Class B from
April 30,1992 through December 31, 1995 as compared with the growth of a $10,000
investment in the Lehman Brothers Intermediate Government/Corporate Index. The
plot points used to draw the line graph were as follows:
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Pillar Invested in Pillar Invested in
Fixed Income Fixed Income Lehman Brothers
Fund Class A Fund Class B Intermediate Government/
Corporate Index
4/30/92 $10,000 $ 9,600 $10,000
12/31/92 $10,866 $10,417 $10,721
12/31/93 $12,068 $11,539 $11,663
12/31/94 $11,385 $10,858 $11,438
12/31/95 $13,406 $12,743 $13,189
* Return figures reflect the impact of the maximum 4.00% sales charge.
1 For the period ended December 31, 1995. Past performance of the period is not
predicitive of future performance. The investment return and principal value
of an investment will fluctuate, so an investor's shares, when redeemed, may
be worth more or less than their original cost. Fixed Income Fund Class A and
Class B shares commenced operations on April 1, 1992.
NEW JERSEY MUNICIPAL
SECURITIES FUND
Although the municipal market was beset throughout 1995 with the prospect of
federal income tax reform, declining interest rates coupled with benign
inflation
4
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statistics provided a favorable environment for tax exempt securities.
The Class A shares of the Pillar New Jersey Municipal Securities Fund posted a
total return of 13.57% for the year ending December 31, 1995 while the Lehman
Brothers 7 year municipal index rose 14.15%. The variance in returns can be
attributed to the Fund's single state status and higher average quality of the
underlying securities held in the portfolio. As of year end, the Fund had an
average maturity of 6.04 years and a duration of 5.03 years.
As we enter 1996, several tax reform proposals are in debate and the outcome
remains unknown, clouding the outlook for municipals. However, against a back
drop of strong demand, low new issuance volume, and modest inflation
expectations are positively inclined.
-------------- Investment Growth Analysis ------------
AVERAGE ANNUAL TOTAL RETURN1
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ONE YEAR THREE YEAR SINCE INCEPTION
- --------------------------------------------------------------------------------
Class A 13.57% 6.36% 6.84%
- --------------------------------------------------------------------------------
Class B (without load) 13.30% 6.06% 6.46%
- --------------------------------------------------------------------------------
Class B* (with load) 12.17% 5.72% 6.17%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
A line graph depicting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Pillar New Jersey Municipal Fund Class A and the Pillar New Jersey Municipal
Fund Class B from May 31,1992 through December 31, 1995 as compared with the
growth of a $10,000 investment in the Lehman Brothers 7-year Municipal Bond
Index. The plot points used to draw the line graph were as follows:
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Pillar Invested in Pillar Invested in
New Jersey Municipal New Jersey Municipal Lehman Brothers
Fund Class A Fund Class B 7-year Municipal
Bond Index
5/31/92 $10,000 $ 9,900 $10,000
12/31/92 $10,505 $10,386 $10,610
12/31/93 $11,605 $11,434 $11,716
12/31/94 $11,127 $10,937 $11,392
12/31/95 $12,637 $12,391 $13,006
* Return figures reflect the impact of the maximum 1.00% sales charge.
1 For the period ended December 31, 1995. Past performance of the period is not
predicitive of future performance. The investment return and principal value
of an investment will fluctuate, so an investor's shares, when redeemed, may
be worth more or less than their original cost. New Jersey Municipal
Securities Fund Class A and Class B shares commenced operations on May 4,
1992.
INTERMEDIATE-TERM GOVERNMENT
SECURITIES FUND
The Pillar Intermediate-Term Government Securities Fund Class A ended the year
with a 15% total return. This compares favorably to the 14.4% return for the
Lehman Brothers Intermediate Government/Corporate Index. At the beginning of the
year, the Fund had been invested in longer term government and agency issues. A
strong bond rally started in the first quarter of 1995. During the second and
third quarter, maturity in the Fund was shortened to take advantage of the
rally. At the end of the year, the Fund had a average maturity of 3.74 years
and a duration of 3.29 years. At this time, the average maturity will continue
to be in the 3 to 5 year range.
-------------- Investment Growth Analysis ------------
AVERAGE ANNUAL TOTAL RETURN1
- --------------------------------------------------------------------------------
ONE YEAR THREE YEAR SINCE INCEPTION
- --------------------------------------------------------------------------------
Class A 15.00% 5.83% 6.26%
- --------------------------------------------------------------------------------
Class B (without load) 14.71% 5.53% 6.00%
- --------------------------------------------------------------------------------
Class B* (with load) 10.08% 4.09% 4.84%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
A line graph depicting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Pillar Intermediate-Term Government Fund Class A and the Pillar
Intermediate-Term Government Fund Class B from April 30,1992 through December
31, 1995 as compared with the growth of a $10,000 investment in the Lehman
Brothers Intermediate Government/Corporate Index. The plot points used to draw
the line graph were as follows:
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Pillar Invested in Pillar Invested in
Intermediate-Term Intermediate-Term Lehman Brothers
Government Government Intermediate
Fund Class A Fund Class B Government/Corporate
Index
4/30/92 $10,000 $9,600 $10,000
12/31/92 $10,540 $10,112 $10,721
12/31/93 $11,417 $10,915 $11,663
12/31/94 $10,863 $10,360 $11,438
12/31/95 $12,493 $11,884 $13,189
* Return figures reflect the impact of the maximum 4.00% sales charge.
1 For the period ended December 31, 1995. Past performance of the period is not
predicitive of future performance. The investment return and principal value
of an investment will fluctuate, so an investor's shares, when redeemed, may
be worth more or less than their original cost. Intermediate-Term Government
Securities Fund Class A and Class B shares commenced operations on April 2,
1992.
5
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MANAGER'S DISCUSSION AND ANALYSIS OF FUND PERFORMANCE (Continued)
================================================================================
The Pillar Funds -- December 31, 1995
PENNSYLVANIA MUNCIPAL SECURITIES FUND
Market yields climbed during the first quarter of the year and then fell during
the remainder of 1995. Inflation remained subdued and the Federal Reserve
started to ease rates during the summer. The economy continued to grow for the
fourth consecutive year. Due to increased cash flows to municipalities and the
public sentiment for smaller government, issuance of tax-exempts declined for
the year. We made some adjustments to the fund in the first half of the year,
causing some underperformance, but we ended the year with a strong quarter. For
1995 the Class A shares returned 11.53% as compared with the Lehman Brothers 5
Year Municipal Bond Index return of 11.65%.
-------------- Investment Growth Analysis ------------
AVERAGE ANNUAL TOTAL RETURN1
- --------------------------------------------------------------------------------
ONE YEAR SINCE INCEPTION
- --------------------------------------------------------------------------------
Class A 11.53% 4.68%
- --------------------------------------------------------------------------------
Class B (without load) 11.15% 4.49%
- --------------------------------------------------------------------------------
Class B* (with load) 10.00% 4.10%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
A line graph depicting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Pillar Pennsylvania Municipal Securities Fund Class A and the Pillar
Pennsylvania Municipal Securities Fund Class B from May 31,1993 through December
31, 1995 as compared with the growth of a $10,000 investment in the Lehman
5-year Municipal Bond Index. The plot points used to draw the line graph were as
follows:
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Pillar Invested in Pillar Invested in
Pennsylvania Municipal Pennsylvania Municipal Lehman 5-Year
Securities Securities Municipal
Fund Class A Fund Class B Bond Index
5/31/93 $10,000 $ 9,900 $10,000
12/31/93 $10,417 $10,309 $10,501
12/31/94 $10,149 $10,018 $10,338
12/31/95 $11,319 $11,135 $11,541
* Return figures reflect the impact of the maximum 1.00% sales charge.
1 For the period ended December 31, 1995. Past performance of the period is not
predicitive of future performance. The investment return and principal value
of an investment will fluctuate, so an investor's shares, when redeemed, may
be worth more or less than their original cost. Pennsylvania Municipal
Securities Fund Class A and Class B shares commenced operations on May 3, 1993
and May 13, 1993, respectively.
GNMA FUND
This Fund was restructured in late 1994 into mostly discount pools and this
proved to be an excellent decision for the declining rates that we had in 1995.
The total return for Class A was 19.52%. This compares to the Salomon Mortgage
Index of 16.8% and the Lehman Brothers Government/Corporate Index, a much longer
duration of 19.2%. Cash flow to the Fund has been moderate and we expect that to
pick up as the performance is recognized.
Currently, we will continue to invest that cash flow into discount pools.
-------------- Investment Growth Analysis ------------
AVERAGE ANNUAL TOTAL RETURN1
- --------------------------------------------------------------------------------
ONE YEAR SINCE INCEPTION
- --------------------------------------------------------------------------------
Class A 19.52% 5.73%
- --------------------------------------------------------------------------------
Class B (without load) 19.24% 5.37%
- --------------------------------------------------------------------------------
Class B* (with load) 15.71% 4.17%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
A line graph depicting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Pillar GNMA Fund Class A and the Pillar GNMA Fund Class B from May 31,1993
through December 31, 1995 as compared with the growth of a $10,000 investment in
the Salomon Mortgage Bond Index. The plot points used to draw the line graph
were as follows:
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Pillar Invested in Pillar Invested in
GNMA GNMA Salomon Mortgage
Fund Class A Fund Class B Bond Index
5/31/93 $10,000 $ 9,700 $10,000
12/31/93 $10,162 $ 9,850 $10,281
12/31/94 $9,684 $ 9,353 $10,135
12/31/95 $11,574 $11,152 $11,835
* Return figures reflect the impact of the maximum 3.00% sales charge.
1 For the period ended December 31, 1995. Past performance of the period is not
predicitive of future performance. The investment return and principal value
of an investment will fluctuate, so an investor's shares, when redeemed, may
be worth more or less than their original cost. GNMA Fund Class A and Class B
shares commenced operations on May 3, 1993 and May 5, 1993, respectively.
6
<PAGE>
REPORT OF INVESTMENT ADVISERS
================================================================================
The Pillar Funds -- December 31, 1995
EQUITY VALUE FUND
The Pillar Equity Value Fund posted good performance for 1995 with the Class A
shares rising a total of 36.71% vs. the S&P 500 Composite Index return of
37.58%. Shareholders benefited from substantial sector weightings in financial
services, technology, and health care issues which were the leading market
sectors during 1995. Frequent market sector rotation was one of several factors
which required an exceptionally nimble disposition during the year with momentum
driving one sector or another to short term cyclical extremes. Technology was
one such example where shares were driven to extreme valuations earlier in the
year only to see prices fall sharply during the 4th quarter. Nevertheless, our
conservative disposition during the year with respect to issue selection and
diversification prevented the kind of volatility which might have otherwise been
the case.
As the economy appears to be slowing, corporate profits and stated earnings have
also been decelerating. Recently, there has been little in the way of overall
market leadership with an eclectic mix of companies posing better than expected
earnings increases and a rising number of companies posting disappointing
results as well. The generally negative impact this might have, however, is
being offset by the accommodative stance of the Federal Reserve which has
lowered short term rates on two separate occasions providing, at the very least,
a solid base under what some might see as an overvalued market.
1996 should see more modest returns than was the case in 1995, however, given
the fact that a recession seems unlikely while bond yields remain at
historically low levels, our shareholders may again be pleasantly surprised.
-------------- Investment Growth Analysis ------------
AVERAGE ANNUAL TOTAL RETURN1
- --------------------------------------------------------------------------------
ONE YEAR THREE YEAR SINCE INCEPTION
- --------------------------------------------------------------------------------
Class A 36.71% 11.05% 10.96%
- --------------------------------------------------------------------------------
Class B (without load) 36.35% 10.77% 10.70%
- --------------------------------------------------------------------------------
Class B* (with load) 30.84% 9.29% 9.50%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Pillar Equity
Value Fund Class A and the Pillar Equity Value Fund Class B from April 30,1992
through December 31, 1995 as compared with the growth of a $10,000 investment in
the Standard & Poor's 500 Composite Index. The plot points used to draw the line
graph were as follows:
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Pillar Invested in Pillar Invested in Pillar
Equity Value Equity Value Standard & Poor's
Fund Class A Fund Class B 500 Composite Index
4/30/92 $10,000 $ 9,600 $10,000
12/31/92 $10,688 $10,231 $10,725
12/31/93 $11,321 $10,829 $11,807
12/31/94 $10,686 $10,199 $11,960
12/31/95 $14,608 $13,906 $16,453
* Return figures reflect the impact of the maximum 4.00% sales charge.
1 For the period ended December 31, 1995. Past performance of the period is not
predicitive of future performance. The investment return and principal value
of an investment will fluctuate, so an investor's shares, when redeemed, may
be worth more or less than their original cost. Equity Value Fund Class A and
Class B shares commenced operations on April 1, 1992.
EQUITY INCOME FUND
During 1995, stocks recorded their best performance in recent years with the
Standard & Poor's 500 Composite Index rising 37.58%. Results were aided by
falling interest rates and sharply rising corporate profits. Large
capitalization stocks outperformed smaller companies. Your Fund's Class A shares
advanced 35.55%, (led by gains in financial and telephone shares where the Fund
was well represented).
7
<PAGE>
REPORT OF INVESTMENT ADVISERS (Continued)
================================================================================
The Pillar Funds -- December 31, 1995
Looking to 1996, the manager believes that stable inflation should provide
steady interest rates and together with more modest profit growth should provide
a setting for moderate growth in financial assets. This should be a good
environment for shares offering some growth with rising dividends which account
for a preponderance of the Fund's holdings.
-------------- Investment Growth Analysis ------------
AVERAGE ANNUAL TOTAL RETURN1
- --------------------------------------------------------------------------------
ONE YEAR THREE YEAR SINCE INCEPTION
- --------------------------------------------------------------------------------
Class A 35.55% 12.63% 12.68%
- --------------------------------------------------------------------------------
Class B (without load) 35.21% 12.37% 12.41%
- --------------------------------------------------------------------------------
Class B* (with load) 29.78% 10.84% 11.18%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
A line graph depicting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Pillar Equity Income Fund Class A and the Pillar Equity Income Fund Class B from
April 30,1992 through December 31, 1995 as compared with the growth of a $10,000
investment in the Standard & Poor's 500 Composite Index. The plot points used to
draw the line graph were as follows:
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Pillar Invested in Pillar Invested in Pillar
Equity Income Equity Income Standard & Poor's
Fund Class A Fund Class B 500 Composite Index
4/30/92 $10,000 $ 9,600 $10,000
12/31/92 $10,662 $10,215 $10,725
12/31/93 $11,757 $11,231 $11,807
12/31/94 $11,238 $10,719 $11,960
12/31/95 $15,233 $14,493 $16,453
* Return figures reflect the impact of the maximum 4.00% sales charge.
1 For the period ended December 31, 1995. Past performance of the period is not
predicitive of future performance. The investment return and principal value
of an investment will fluctuate, so an investor's shares, when redeemed, may
be worth more or less than their original cost. Equity Income Fund Class A and
Class B shares commenced operations on April 1, 1992.
MID CAP VALUE FUND
Although the Fund had a very positive year we underperformed some of the more
popular indices. This underperformance was the result of (1) an overweighting in
material and transportation companies; (2) an underweighting in technology
(although this sector suffered sharp declines in the fourth quarter it still
outperformed for the year) and (3) the impact of sharp declines in several
stocks caused by earnings' shortfalls compared to analysts expectations. The
concentration of assets in fewer manager's hands again saw large capitalization
stocks out performing small to mid-cap stocks. Our performance return of 19.49%
for Class A shares is in comparison to the S&P Mid-Cap 400 Index of 30.93% and
the Russell 2,000 value index of 25.75%. Reduction or repeal of the capital
gains tax would be particularly helpful to this market sector going forward.
-------------- Investment Growth Analysis ------------
AVERAGE ANNUAL TOTAL RETURN1
- --------------------------------------------------------------------------------
ONE YEAR THREE YEAR SINCE INCEPTION
- --------------------------------------------------------------------------------
Class A 19.49% 7.04% 8.49%
- --------------------------------------------------------------------------------
Class B (without load) 19.13% 6.75% 8.21%
- --------------------------------------------------------------------------------
Class B* (with load) 14.37% 5.30% 7.03%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
A line graph depicting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Pillar Mid Cap Value Fund Class A and the Pillar Mid Cap Value Fund Class B from
April 30,1992 through December 31, 1995 as compared with the growth of a $10,000
investment in Standard & Poor's Mid-Cap 400 Index. The plot points used to draw
the line graph were as follows:
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Pillar Invested in Pillar Invested in Standard
Mid Cap Value Mid Cap Value & Poor's Mid-Cap
Fund Class A Fund Class B 400 Index
4/30/92 $10,000 $ 9,600 $10,000
12/31/92 $11,037 $10,589 $11,385
12/31/93 $12,496 $11,953 $12,972
12/31/94 $11,329 $10,813 $12,506
12/31/95 $13,537 $12,881 $16,378
* Return figures reflect the impact of the maximum 4.00% sales charge.
1 For the period ended December 31, 1995. Past performance of the period is not
predicitive of future performance. The investment return and principal value
of an investment will fluctuate, so an investor's shares, when redeemed, may
be worth more or less than their original cost. Mid Cap Value Fund Class A and
Class B shares commenced operations on April 1, 1992.
BALANCED GROWTH FUND
Pillar Balanced Growth Fund shareholders enjoyed a particularly good year
realizing a total return in the Class A shares of 27.76% vs a balanced index
return of 26.4%. (The balanced index consists of 50% S&P 500 and 50% Lehman
Brothers Government/Corporate Intermediate Index).
8
<PAGE>
================================================================================
The asset allocation of the Fund remained at 50% equity and 50% fixed income for
most of 1995, which, while less aggressive than many similar funds, was
consistent with a conservative value oriented position.
Regarding the equity portion, substantial emphasis was placed on the Financial,
Health Care, and Technology sectors where overall returns were highest. The vast
majority of issues in this segment were large capitalization stocks that are
leaders in their particular field.
The Fixed Income segment, as in past years, continued to emphasize very high
quality and a maturity pattern similar to that of the Lehman Intermediate
Government/Corporate Index of 4.5 yrs. As long and short rates fell for most of
year, shareholders of the fund were able to capture most of the available return
in the fixed income markets.
-------------- Investment Growth Analysis ------------
AVERAGE ANNUAL TOTAL RETURN1
- --------------------------------------------------------------------------------
ONE YEAR THREE YEAR SINCE INCEPTION
- --------------------------------------------------------------------------------
Class A 27.76% 9.55% 9.36%
- --------------------------------------------------------------------------------
Class B (without load) 27.53% 9.30% 9.08%
- --------------------------------------------------------------------------------
Class B* (with load) 22.47% 7.83% 7.89%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
A line graph depicting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Pillar Balanced Growth Fund Class A and the Pillar Balanced Growth Fund Class B
from April 30,1992 through December 31, 1995 as compared with the growth of a
$10,000 investment in the Lehman Intermediate Government/Corporate Index and
Standard & Poor's 500 Composite Index. The plot points used to draw the line
graph were as follows:
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Pillar Invested in Pillar Invested in Lehman
Balanced Growth Balanced Growth Intermediate
Fund Class A Fund Class B Government/
Corporate Index
4/30/92 $10,000 $9,600 $10,000
12/31/92 $10,533 $10,093 $10,721
12/31/93 $11,364 $10,862 $11,663
12/31/94 $10,840 $10,333 $11,438
12/31/95 $13,849 $13,177 $13,189
Growth of $10,000
Invested in Standard
& Poor's 500
Composite Index
4/30/92 $10,000
12/31/92 $10,725
12/31/93 $11,807
12/31/94 $11,960
12/31/95 $16,453
* Return figures reflect the impact of the maximum 4.00% sales charge.
1 For the period ended December 31, 1995. Past performance of the period is not
predicitive of future performance. The investment return and principal value
of an investment will fluctuate, so an investor's shares, when redeemed, may
be worth more or less than their original cost. Balanced Growth Fund Class A
and Class B shares commenced operations on April 1, 1992.
INTERNATIONAL GROWTH FUND
Against a global backdrop of low inflation and slowing economic growth, the
Pillar InternationalGrowth Fund posted positive returns for the eight month
period ended December 31, 1995 (or since the Fund's inception). For the eight
months ended December 31, 1995, the Pillar InternationalGrowth Fund Class A
provided a return to shareholders of 7.81%.The Fund outperformed its benchmark,
the Morgan Stanley Capital International-Europe,Australia, Far East-Index
(MSCIEAFE), which returned 5.4% for the same period.
In general, markets throughout the world were up
during 1995. The Japanese market (the world's second largest equity market)
finished the year on a strong note as the Nikkei Index rose 5% in U.S. dollar
terms during the fourth quarter alone (although the full-year gain was just
0.9%).The market was buoyed in the second half by strong interim corporate
profits and continued signs of economic recovery.This highlights a dramatic
difference between the first half and second half of the year. The first half
saw the Japanese equity market fall to a ten-year low as the yen
skyrocketed.From there, a rather spectacular rise has unfolded.While there are
still large structural issues around the Japanese economy, decisive policy
actions, a more reasonably valued currency, and some sense of cyclical
improvement suggest profits should be on a strong upward trend in 1996.
In Europe, both consumption and investment were weak during 1995. Fiscal
austerity aimed at cutting budget deficits to get ready for European Monetary
Union hurt growth and confidence.For France andGermany, strong currencies
dampened foreign sales and kept exports from offsetting weak domestic demand. By
contrast, weak currencies boosted export revenues and helped the economies of
Spain, Italy and Sweden.The U.K.equity market (the world's third largest)
provided a strong 22.2% return for the year.Here, too, good profit results,
quiescent inflation, and lower interest rates have been key favorable trends.
In many other relatively mature and developed
equity markets there were also positive results for the year. The smaller Asian
markets generally provided respectable performance. Hong Kong ended up as the
region's best performer for the year, up 23%. Negative returns were widespread
in the emerging markets of Latin America, Asia, and Europe.
9
<PAGE>
REPORT OF INVESTMENT ADVISERS (Continued)
================================================================================
The Pillar Funds -- December 31, 1995
The Fund's largest country weightings are in Japan, the U.K., France and
Germany.Relative to its benchmark, the Fund's underweighting in Japan
contributed to positive relative performance while its underweighting in Germany
held performance back slightly. Stock selection in countries such as Spain,
Sweden, and the Netherlands contributed to its outperformance relative to its
benchmark.
Going forward, we remain relatively constructive
on the Japanese market and believe the recent set of positive corporate profits
is just the beginning of more good news to come on the earnings front. The Fund
continues to focus on Japanese companies that will benefit from a domestic
(Japan) recovery and monetary realignment. In Europe, the focus is on more
economically-sensitive stocks as we believe the current economic slowdown is
largely a mid-cycle inventory correction problem and not the peak of the
region's economic cycle.
-------------- Investment Growth Analysis ------------
AVERAGE ANNUAL TOTAL RETURN1
- --------------------------------------------------------------------------------
SINCE INCEPTION(2)
- --------------------------------------------------------------------------------
Class A 7.81%
- --------------------------------------------------------------------------------
Class B (without load) 7.64%
- --------------------------------------------------------------------------------
Class B* (with load) 3.30%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
A line graph depicting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Pillar International Growth Fund Class A and the Pillar International Growth
Fund Class B from May 31, 1995 through December 31, 1995 as compared with the
growth of a $10,000 investment in the Morgan Stanley EAFE Index. The plot points
used to draw the line graph were as follows:
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Pillar Invested in Pillar Invested in Morgan
International Growth International Growth Stanley EAFE Index
Fund Class A Fund Class B
5/31/95 $10,000 $ 9,600 $10,000
12/31/95 $10,747 $10,302 $10,645
* Return figures reflect the impact of the maximum 4.00% sales charge.
1 For the period ended December 31, 1995. Past performance of the period is not
predicitive of future performance. The investment return and principal value
of an investment will fluctuate, so an investor's shares, when redeemed, may
be worth more or less than their original cost. International Growth Fund
Class A and Class B shares commenced operations on May 1, 1995 and May 4,
1995, respectively.
2 Annualized
10
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
U.S. TREASURY SECURITIES
MONEY MARKET FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--95.7%
U.S. Treasury Bills
5.430%, 01/04/96 $ 5,000 $ 4,998
5.480%, 01/11/96 40,000 39,942
5.430%, 01/18/96 30,000 29,925
5.360%, 01/25/96 55,000 54,806
5.420%, 02/01/96 60,000 59,727
5.350%, 02/08/96 50,000 49,716
5.300%, 02/15/96 45,000 44,696
5.300%, 02/22/96 35,000 34,730
5.490%, 02/29/96 25,000 24,783
5.510%, 03/07/96 50,000 49,534
4.940%, 03/14/96 25,000 24,755
4.980%, 03/28/96 30,000 29,649
--------
Total U.S. Treasury Obligations
(Cost $447,261,060) 447,261
--------
CASH EQUIVALENT--4.7%
SEI Liquid Asset Trust-
Treasury Portfolio 21,853 21,853
--------
Total Cash Equivalent
(Cost $21,852,943) 21,853
--------
Total Investments--100.4%
(Cost $469,114,003) 469,114
--------
OTHER ASSETS AND LIABILITIES--(0.4%)
Other Assets and Liabilities, Net (2,051)
--------
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
463,400,425 outstanding shares of
beneficial interest 463,400
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 3,531,344
outstanding shares of beneficial
interest 3,531
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C>
Accumulated net realized gain
on investments $ 132
--------
Total Net Assets--100.0% $467,063
========
Net Asset Value, Offering Price
and Redemption Price Per
Share--Class A $ 1.00
========
Net Asset Value, Offering Price
and Redemption Price Per
Share--Class B $ 1.00
========
PRIME OBLIGATION
MONEY MARKET FUND
U.S. GOVERNMENT AGENCY
OBLIGATIONS--34.7%
Federal Farm Credit Bank
5.660%, 02/01/96 $ 3,000 $ 3,000
5.630%, 03/01/96 4,000 4,000
5.320%, 04/01/96 3,000 3,000
5.700%, 04/01/96 5,000 5,000
5.400%, 05/14/96 1,500 1,470
Federal Home Loan Bank
5.550%, 01/22/96 5,000 4,984
5.710%, 01/24/96 5,000 5,000
5.480%, 02/08/96 4,000 3,977
5.450%, 02/20/96 3,000 2,977
5.530%, 03/15/96 6,400 6,329
5.810%, 05/16/96 10,000 10,000
5.840%, 10/03/96 5,000 5,000
5.880%, 10/24/96 5,000 5,000
5.900%, 10/30/96 5,000 5,000
5.770%, 11/20/96 5,000 5,000
5.560%, 12/27/96 5,000 5,000
5.530%, 01/03/97 5,000 5,000
Federal National Mortgage
Association
5.450%, 02/02/96 3,000 2,985
5.660%, 03/15/96 5,000 5,000
</TABLE>
11
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
PRIME OBLIGATION MONEY
MARKET FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY
OBLIGATIONS--CONTINUED
Tennessee Valley Authority
4.190%, 09/09/96 $ 5,000 $ 4,949
-------
Total U.S. Government Agency
Obligations
(Cost $92,670,851) 92,671
-------
COMMERCIAL PAPER--26.6%
American General Finance
5.830%, 01/12/96 10,000 9,982
Dun and Bradstreet
5.820%, 01/16/96 11,000 10,974
Ford Motor Credit
5.710%, 01/05/96 5,000 4,997
5.690%, 02/20/96 5,000 4,960
General Electric Capital
4.830%, 01/11/96 5,000 4,992
5.630%, 01/22/96 5,000 4,984
Merrill Lynch
5.740%, 01/19/96 5,000 4,986
Norwest Financial
5.790%, 01/16/96 5,000 4,988
Safeco Credit
5.700%, 01/17/96 5,000 4,987
5.700%, 01/23/96 5,000 4,983
Southern California Edison
5.830%, 01/12/96 5,000 4,991
Transamerica Finance
5.720%, 01/08/96 5,000 4,994
-------
Total Commercial Paper
(Cost $70,818,168) 70,818
-------
CERTIFICATES OF DEPOSIT--7.1%
ABN-Amro
5.810%, 01/16/96 5,000 5,000
Bank of Nova Scotia
5.750%, 03/15/96 4,000 4,001
Rabo London
5.620%, 01/16/96 5,000 5,000
Societe Generale
5.750%, 02/15/96 5,000 5,000
-------
Total Certificates of Deposit
(Cost $19,000,582) 19,001
-------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
TIME DEPOSITS--1.9%
Deutsche Bank
5.800%, 01/03/96 $ 5,000 $ 5,000
-------
Total Time Deposits
(Cost $5,000,000) 5,000
-------
REPURCHASE AGREEMENTS--32.8%
JP Morgan Securities Incorporated,
5.84%, dated 12/29/95, matures
01/02/96, repurchase price
$36,364,374 (collateralized by
U.S. Treasury Notes, par value
$35,145,000, rates 6.25%,
maturity dates ranging from
08/31/00 to 02/15/03,
market value $37,072,851) 36,341 36,341
Nomura Securities Incorporated,
5.84% dated 12/29/95, matures
01/02/96, repurchase price
$51,032,841 (collateralized by
U.S. Treasury Bond, par value
$6,639,000, 11.125%, 08/15/03,
market value $9,164,096 and by
U.S. Treasury Notes, par value
$40,784,000, rates ranging from
5.75% to 8.875%, maturity dates
ranging from 08/31/96 to
11/15/05, market value
$42,856,071) 50,999 50,999
--------
Total Repurchase Agreements
(Cost $87,340,541) 87,340
--------
Total Investments--103.1%
(Cost $274,830,142) 274,830
--------
OTHER ASSETS AND LIABILITIES--(3.1%)
Other Assets and Liabilities, Net (8,238)
--------
</TABLE>
12
<PAGE>
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on 259,654,025
outstanding shares of
beneficial interest $259,654
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 6,924,558
outstanding shares of beneficial
interest 6,925
Accumulated net realized gain on
investments 13
--------
Total Net Assets--100.0% $266,592
========
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
========
TAX-EXEMPT MONEY
MARKET FUND
MUNICIPAL BONDS--97.2%
ARIZONA--1.5%
State, Salt River Project,
Series C, Prerefunded @ 102
7.130%, 01/01/96 $ 1,000 $ 1,020
--------
ARKANSAS--0.7%
Clark County, Reynolds Metals
Company Project, AMT
(A) (B) (C)
5.200%, 01/02/96 500 500
--------
CALIFORNIA--9.0%
State, School Cash Reserve
4.500%, 12/20/96 2,000 2,013
Long Beach (TRAN)
4.500%, 09/19/96 1,870 1,877
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
Los Angeles, Regional Airport
Improvement Corporation,
Series F (A) (B) (C)
6.000%, 01/02/96 $ 1,300 $ 1,300
Orange County, Water District
(COP) (A) (B) (C)
5.800%, 01/02/96 1,000 1,000
--------
6,190
--------
DELAWARE--8.0%
State, Economic Development
Authority (A) (B) (C)
5.200%, 01/03/96 2,500 2,500
Wilmington, Hospital Revenue,
Franciscan Health System
Project, Series A (A) (B) (C)
6.000%, 01/02/96 3,000 3,000
--------
5,500
--------
FLORIDA--4.4%
Alachua County, Refunding
Bonds (A) (B) (C)
4.050%, 01/02/96 700 700
Orange County, Housing
Finance Authority,
Windscape Project (A) (B) (C)
5.800%, 01/03/96 400 400
State, Housing Finance
Authority (A) (B) (C)
5.200%, 01/03/96 1,900 1,900
--------
3,000
--------
GEORGIA--1.3%
Gwinnett County, School
District, Prerefunded @ 102
7.500%, 02/01/96 875 895
--------
ILLINOIS--5.7%
Chicago, O'Hare International
Airport (A) (B) (C)
5.100%, 01/03/96 2,900 2,900
State, Revenue Anticipation
Certificates
4.500%, 04/12/96 1,000 1,002
--------
3,902
--------
</TABLE>
13
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
TAX-EXEMPT MONEY
MARKET FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
IOWA--0.7%
Polk County, Hospital
Equipment Improvement
Authority (MBIA) (A) (B)
5.150%, 01/03/96 $ 450 $ 450
--------
LOUSIANA--4.2%
New Orleans, Aviation Board,
Series A (MBIA) (A) (B)
4.950%, 01/03/96 900 900
New Orleans, Aviation Board,
Series B (MBIA) (A) (B)
4.950%, 01/03/96 1,000 1,000
State, Public Facilities
Authority (AMBAC) (A) (B)
5.000%, 01/03/96 1,000 1,000
--------
2,900
--------
MAINE--0.7%
State (TANS)
4.500%, 06/28/96 500 502
--------
MARYLAND--6.5%
Baltimore, Industrial
Development Authority
(A) (B) (C)
5.350%, 01/03/96 1,000 1,000
Howard County, Multi-Family
Housing Authority, Sherwood
Crossing Project (B) (C)
4.250%, 06/01/96 1,000 1,000
Montgomery County, Housing
Revenue Authority, Falklands
Project (A) (B) (C)
5.150%, 01/03/96 2,500 2,500
--------
4,500
--------
MICHIGAN--3.2%
State, Hospital Financing
Authority (A) (B) (C)
5.200%, 01/03/96 2,200 2,200
--------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
MINNESOTA--2.0%
New Brighton, Industrial
Development Authority,
Unicare Nursing Homes
Project (A) (B) (C)
5.200%, 01/03/96 $ 1,400 $ 1,400
--------
MISSOURI--3.7%
Osage Beach, Industrial
Development Authority
(A) (B) (C)
4.050%, 01/02/96 275 275
Saint Charles County, Industrial
Development Authority, Cedar
Ridge Apartments (A) (B) (C)
5.150%, 01/03/96 685 685
Saint Louis County, Industrial
Development Authority,
Riverport Associates
(A) (B) (C)
5.300%, 01/03/96 400 400
Springfield, Industrial
Development Authority,
Pebblecreek Apartments
(A) (B) (C)
5.100%, 01/03/96 1,200 1,200
--------
2,560
--------
NEW JERSEY--2.9%
State, (GO)
5.800%, 08/01/96 1,000 1,011
Ocean County, Utilities
Authority, Wastewater Project,
Prerefunded @ 102
8.700%, 01/01/96 1,000 1,020
--------
2,031
--------
NEW YORK--4.2%
Babylon, Industrial Development
Agency, Babylon Project
AMT (A) (B) (C)
6.000%, 01/02/96 1,900 1,900
Nassau County, Series E (BANS)
4.250%, 03/15/96 1,000 1,001
--------
2,901
--------
</TABLE>
14
<PAGE>
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
NORTH CAROLINA--2.2%
Wake County, Carolina Power &
Light Company (A) (B) (C)
5.000%, 01/03/96 $ 1,100 $ 1,100
Winston Salem, Risk
Acceptance Management
Corporation (A) (B) (C)
5.200%, 01/03/96 400 400
--------
1,500
--------
NORTH DAKOTA--1.5%
State, Housing Finance
Program (RB) (B)
3.950%, 05/01/96 1,000 1,000
--------
OREGON--4.4%
Port of Portland, Pollution
Control Authority, Dates-
Reynolds Metals Project
(A) (B) (C)
6.000%, 01/02/96 3,000 3,000
--------
TENNESSEE--6.8%
Nashville, Airport Authority,
American Airlines Project,
Series B (A) (B) (C)
6.000%, 01/02/96 2,000 2,000
Morristown, Industrial
Development Board,
Williamhouse Regency
Project (A) (B) (C)
5.250%, 01/02/96 2,200 2,200
Sumner County, (GO)
6.500%, 04/01/96 510 513
--------
4,713
--------
TEXAS--17.0%
Corsicana, Industrial
Development Authority, Kent
Paper Company Project AMT
(A) (B) (C)
5.250%, 01/03/96 400 400
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
Harris County, Housing
Finance Authority, Idlewood
Park Project, Series A
(A) (B) (C)
5.200%, 01/03/96 $ 1,200 $ 1,200
Hunt County, Industrial
Development Authority,
Trico Industries Incorporated
(A) (B) (C)
5.100%, 01/02/96 2,700 2,700
Lone Star, Airport Authority,
Series A (A) (B) (C)
6.000%, 01/02/96 1,000 1,000
Lone Star, Airport Authority,
Series B (A) (B) (C)
6.000%, 01/02/96 1,000 1,000
State, Association of School
Boards, Series A (TANS)
4.750%, 08/30/96 1,000 1,004
State, Health Facilities
Development, North Texas
Pooled Health (A) (B) (C)
5.050%, 01/03/96 2,500 2,500
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)
5.200%, 01/03/96 400 400
--------
11,704
--------
VIRGINIA--2.9%
Richmond, Capital Region
Authority, International
Airport, Series B (AMBAC)
(A) (B) (C)
4.900%, 01/03/96 1,000 1,000
</TABLE>
15
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
TAX-EXEMPT MONEY
MARKET FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
VIRGINIA--CONTINUED
Harrisonburg, Redevelopment
and Housing Authority,
Rolling Brook Apartments
(B) (C)
5.100%, 02/01/96 $ 1,000 $ 1,000
--------
2,000
--------
WASHINGTON--2.1%
State, Series 86-D, Prerefunded
@ 100
8.000%, 09/01/96 1,400 1,438
--------
WASHINGTON, D.C.--1.6%
Abraham & Laura Lisner
Project (A) (B) (C)
5.100%, 01/03/96 1,100 1,100
--------
Total Municipal Bonds
(Cost $66,906,271) 66,906
--------
CASH EQUIVALENT--3.9%
Goldman Sachs Tax-Free
Money Market 1,639 1,639
SEI Institutional Tax Free
Portfolio 1,062 1,062
--------
Total Cash Equivalent
(Cost $2,701,070) 2,701
--------
Total Investments--101.1%
(Cost $69,607,341) 69,607
--------
OTHER ASSETS AND LIABILITIES--(1.1%)
Other Assets and Liabilities, Net (741)
--------
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
63,634,243 outstanding shares of
beneficial interest 63,634
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Description Value (000)
- ----------------------------------------------------------
<S> <C>
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 5,238,358
outstanding shares of beneficial
interest $ 5,238
Accumulated net realized loss
on investments (6)
--------
Total Net Assets--100.0% $ 68,866
========
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
========
<FN>
(A) The rate reported on the Statement of Net Assets is the rate in effect on
December 31, 1995.
(B) Put and 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.
AMT -- Alternative Minimum Tax
BANS -- Bond Anticipation Notes
COP -- Certificate of Participation
GO -- General Obligation
RB -- Revenue Bond
TANS -- Tax Anticipation Notes
TRANS -- Tax and Revenue Anticipation Notes
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
</FN>
</TABLE>
16
<PAGE>
================================================================================
U.S. TREASURY SECURITIES
PLUS MONEY MARKET FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--58.1%
U.S. Treasury Bills
5.620%, 01/11/96 $ 5,000 $ 4,992
5.350%, 02/08/96 3,000 2,983
5.300%, 02/15/96 3,000 2,980
5.680%, 03/07/96 8,000 7,921
5.490%, 03/14/96 3,000 2,968
5.550%, 03/21/96 5,000 4,941
5.240%, 04/04/96 5,000 4,931
5.560%, 04/11/96 3,000 2,955
5.240%, 05/09/96 3,000 2,946
--------
Total U.S. Treasury Obligations
(Cost $37,617,360) 37,617
--------
REPURCHASE AGREEMENTS--42.3%
Lehman Securities Incorporated,
5.90%, dated 12/29/95,
matures 01/02/96, repurchase
price $13,344,909 (collateralized
by U.S. Treasury STRIP, par
value $70,435,000, 7.625%,
11/15/22, market value
$13,603,111) 13,336 13,336
Nomura Securities Incorporated,
5.90%, dated 12/29/95, matures
01/02/96, repurchase price
$14,044,052 (collateralized by
U.S. Treasury Notes, par value
$13,346,000, rates ranging from
5.50% to 8.50%, maturity dates
ranging from 04/30/96 to
02/15/00, market value
$14,316,150) 14,035 14,035
--------
Total Repurchase Agreements
(Cost $27,371,017) 27,371
--------
Total Investments--100.4%
(Cost $64,988,377) 64,988
--------
OTHER ASSETS AND LIABILITIES--(0.4)%
Other Assets and Liabilities, Net (291)
--------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
NET ASSETS:
Portfolio shares (unlimited
authorization--no par value)
based on 64,717,085 outstanding
shares of beneficial interest $ 64,717
Accumulated net realized loss
on investments (20)
--------
Total Net Assets--100.0% $ 64,697
========
Net Asset Value, Offering and
Redemption Price Per Share $ 1.00
========
SHORT-TERM
INVESTMENT FUND
CORPORATE BOND--78.2%
AT&T
4.500%, 02/15/96 $ 1,229 $ 1,229
Allied
01/15/96 (A) 880 879
Aluminum Company of
America
4.630%, 02/15/96 900 899
American Express Credit
6.800%, 02/28/96 1,000 1,002
American General Finance
5.000%, 06/15/96 1,000 997
Atlantic City Electric
5.130%, 02/01/96 100 100
BP America
10.150%, 03/15/96 1,150 1,160
Baxter International
9.250%, 09/15/96 390 400
Bell Atlantic
6.030%, 05/28/96 225 225
Boeing
8.380%, 03/01/96 450 452
California Petroleum
Transportation
6.710%, 04/01/96 1,000 1,003
Commercial Credit
6.380%, 01/01/96 500 500
</TABLE>
17
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
SHORT-TERM INVESTMENT
FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
CORPORATE BOND--CONTINUED
Dow Capital
8.250%, 02/15/96 $ 1,000 $ 1,003
E.I. DuPont de Nemours
8.450%, 10/15/96 400 410
Exxon Capital
7.880%, 04/15/96 250 252
Ford Motor Credit
8.880%, 03/15/96 1,000 1,006
General Electric
7.880%, 05/01/96 1,000 1,008
General Electric Capital
8.750%, 11/26/96 100 103
John Deere
8.250%, 06/01/96 190 192
9.130%, 07/01/96 500 509
Martin Marietta
8.500%, 03/01/96 1,000 1,004
Merck
7.750%, 05/01/96 549 553
Morgan Guaranty Trust
8.130%, 03/15/96 250 252
New York Telephone
3.380%, 04/01/96 164 163
Northwestern Bell Telephone
3.250%, 02/01/96 130 130
Paccar Financial
6.050%, 09/12/96 389 390
Pepsico
6.850%, 02/23/96 1,000 1,001
7.000%, 11/15/96 185 188
Pfizer
7.130%, 10/01/96 1,000 1,012
Sears Robuck
8.550%, 08/01/96 1,000 1,016
Shell Oil
7.700%, 02/01/96 250 250
Smithkline Beecham
5.250%, 01/26/96 1,000 1,000
Southern New England
Telecommunications
7.610%, 09/20/96 1,000 1,016
Southwestern Bell
8.300%, 06/01/96 672 680
Texaco Capital
9.000%, 11/15/96 448 461
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
Virginia Electric & Power
8.350%, 06/15/96 $ 1,000 $ 1,011
WMX Techmologies
4.880%, 06/15/96 400 398
Wal-Mart Stores
8.000%, 05/01/96 570 575
Waste Management
4.630%, 04/14/96 547 545
Whirlpool
8.570%, 03/11/96 250 251
Xerox Credit
6.250%, 01/15/96 330 330
--------
Total Corporate Bond
(Cost $25,509,567) 25,555
--------
U.S. TREASURY OBLIGATIONS--13.6%
U.S. Treasury Bills
5.320%, 05/30/96 $1,100 $ 1,077
5.370%, 06/06/96 750 733
5.330%, 08/22/96 1,500 1,451
5.420%, 11/14/96 1,250 1,195
--------
Total U.S. Treasury Obligations
(Cost $4,452,747) 4,456
--------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--6.2%
Federal Farm Credit Bank
6.500%, 04/01/96 1,000 1,003
6.380%, 05/01/96 1,000 1,003
--------
Total U.S. Government Agency
Obligations
(Cost $2,000,000) 2,006
--------
CASH EQUIVALENT--0.7%
SEI Liquid Asset Trust -
Government Portfolio 240 240
--------
Total Cash Equivalent
(Cost $240,172) 240
--------
Total Investments--98.7%
(Cost $32,202,486) 32,257
--------
</TABLE>
18
<PAGE>
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
OTHER ASSETS AND LIABILITIES--1.3%
Other Assets and Liabilities, Net $ 428
--------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on
3,056,683 outstanding shares
of beneficial interest 30,625
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 203,375
outstanding shares of beneficial
interest 2,038
Undistributed net investment
income 1
Accumulated net realized loss
on investments (33)
Net unrealized appreciation
on investments 54
--------
Total Net Assets--100.0% $ 32,685
========
Net Asset Value, Offering Price and
Redemption Price Per
Share--Class A $ 10.02
========
Net Asset Value and Redemption
Price Per Share--Class B $ 10.05
========
Maximum Public Offering Price Per
Share--Class B ($10.05 / 99%) $ 10.15
========
<FN>
(A) Zero-Coupon Bond
</FN>
</TABLE>
FIXED INCOME FUND
<TABLE>
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--49.0%
U.S. Treasury Notes
6.880%, 02/28/97 $14,250 $ 14,515
7.250%, 02/15/98 5,000 5,201
6.380%, 01/15/00 4,000 4,147
6.380%, 08/15/02 30,000 31,486
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
U.S. Treasury STRIP
5.570%, 08/15/03 $ 4,800 $ 3,163
--------
Total U.S. Treasury Obligations
(Cost $57,299,941) 58,512
--------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--23.6%
Federal Farm Credit Bank
8.650%, 10/01/99 1,000 1,108
Federal Home Loan Bank
7.780%, 10/19/01 2,000 2,204
5.670%, 09/02/03 1,680 1,661
6.500%, 11/29/05 500 501
Federal National Mortgage
Association
7.600%, 01/10/97 1,000 1,023
7.050%, 12/10/98 1,000 1,042
7.200%, 01/10/02 2,000 2,025
7.900%, 04/10/02 1,000 1,024
7.800%, 06/10/02 1,000 1,027
7.000%, 08/12/02 4,000 4,044
6.950%, 09/10/02 1,000 1,010
6.450%, 06/10/03 2,000 2,016
6.200%, 07/10/03 2,000 1,992
6.240%, 08/19/03 2,000 2,002
5.750%, 10/24/03 1,000 973
6.200%, 11/12/03 1,000 1,003
6.400%, 01/13/04 2,500 2,489
6.850%, 09/12/05 1,000 1,021
--------
Total U.S. Government Agency
Obligations
(Cost $27,513,161) 28,165
--------
CORPORATE BOND--24.7%
AT&T
6.750%, 04/01/04 2,000 2,095
7.500%, 06/01/06 1,000 1,107
Anheuser Busch
6.750%, 06/01/05 1,000 1,048
BP America
8.500%, 04/15/01 2,000 2,237
</TABLE>
19
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
FIXED INCOME FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
CORPORATE BOND--CONTINUED
Boeing
6.350%, 06/15/03 $ 2,000 $ 2,050
E.I. DuPont de Nemours
6.000%, 12/01/01 2,000 2,018
6.750%, 10/15/02 1,000 1,048
Emerson Electric
6.300%, 11/01/05 500 510
Ford Capital BV
9.130%, 05/01/98 1,000 1,074
Ford Motor Credit
6.380%, 10/06/00 1,000 1,015
Gannett
5.850%, 05/01/00 1,000 996
General Electric Capital
8.750%, 11/26/96 2,500 2,569
5.500%, 11/01/01 1,000 977
H.J. Heinz
6.880%, 01/15/03 1,000 1,052
Eli Lilly
6.250%, 03/15/03 2,000 2,047
New York Telephone
6.250%, 02/15/04 1,000 1,007
Philip Morris
7.500%, 01/15/02 2,000 2,120
Union Pacific
6.130%, 01/15/04 1,000 993
US West Communications
6.130%, 11/15/05 2,000 2,005
Wal-Mart Stores
6.500%, 06/01/03 500 514
5.880%, 10/15/05 1,000 984
--------
Total Corporate Bond
(Cost $28,370,351) 29,466
--------
CASH EQUIVALENT--1.3%
SEI Liquid Asset Trust
Government Portfolio 1,527 1,527
--------
Total Cash Equivalent
(Cost $1,526,565) 1,527
--------
Total Investments--98.6%
(Cost $114,710,018) 117,670
--------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
OTHER ASSETS AND LIABILITIES--1.4%
Other Assets and Liabilities, Net $ 1,683
--------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on
10,820,274 outstanding shares
of beneficial interest 110,507
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 557,415
outstanding shares of
beneficial interest 6,179
Accumulated net realized loss
on investments (293)
Net unrealized appreciation
on investments 2,960
--------
Total Net Assets--100.0% $119,353
========
Net Asset Value, Offering Price and
Redemption Price Per
Share--Class A $ 10.49
========
Net Asset Value and Redemption
Price Per Share--Class B $ 10.48
========
Maximum Public Offering Price Per
Share--Class B ($10.48 / 96%) $ 10.92
========
NEW JERSEY MUNICIPAL
SECURITIES FUND
MUNICIPAL BONDS--94.8%
NEW JERSEY--93.7%
Atlantic County, (GO) (MBIA)
5.400%, 12/01/05 $ 300 $ 312
Bergen County, General
Improvement Bonds, (GO)
5.250%, 08/15/00 300 314
4.700%, 07/15/02 400 409
</TABLE>
20
<PAGE>
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
NEW JERSEY--CONTINUED
Bergen County, Municipal
Utilities Authority, Water
Pollution Control, Series B,
(RB) (FGIC)
5.000%, 12/15/99 $ 300 $ 308
Bergen County, Utilities
Authority, Series A, (RB)
(FGIC)
6.100%, 06/15/04 250 272
Bridgeton, (GO) (AMBAC)
5.000%, 01/01/05 300 303
Bridgewater & Raritan, (GO)
6.130%, 05/01/05 200 215
6.130%, 05/01/06 100 107
Burlington County, (GO)
4.400%, 03/15/01 500 500
Camden County, (GO) (FGIC)
5.000%, 02/01/04 200 205
5.000%, 02/01/08 500 500
Camden County, (GO) (MBIA)
5.000%, 06/01/99 100 103
5.600%, 06/01/03 200 212
Camden, School District,
(RB) (FSA)
4.000%, 10/01/98 500 498
Cape May County, (GO)
(AMBAC)
5.850%, 04/15/01 150 160
Cape May County, Municipal
Utilities Authority, (RB)
(AMBAC)
5.000%, 08/01/03 500 514
Cape May County, Municipal
Utilities Authority, Series B,
(RB) (FGIC)
3.800%, 01/01/98 500 498
4.500%, 01/01/03 500 499
Cumberland County, (GO) (FGIC)
4.300%, 12/01/99 500 503
Dover Township, (GO) (AMBAC)
6.000%, 10/15/03 200 221
Dover, Municipal Utilities
Authority, Series F, (RB) (MBIA)
4.200%, 02/15/99 300 300
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
Edgewater Borough, (GO) (MBIA)
5.100%, 09/15/00 $ 300 $ 311
Edison Township, (AMBAC)
4.800%, 01/01/05 300 303
Edison Township, (GO)
4.700%, 06/01/98 250 253
5.400%, 06/01/02 250 263
Edison Township, (GO) (AMBAC)
4.500%, 01/01/02 500 503
Essex County, Improvement
Authority, (RB) (AMBAC)
4.880%, 12/01/02 300 305
Fort Lee, (GO)
4.850%, 02/01/02 500 513
Franklin Township, (GO)
5.600%, 11/01/05 300 320
Gloucester County, (GO)
5.000%, 09/01/03 500 507
Gloucester County, General
Improvement, Series A, (GO)
(AMBAC)
4.500%, 01/01/03 200 201
Gloucester County, Improvement
Authority, Landfill Project,
Series A, (RB) (B)
6.000%, 09/01/06 300 320
Gloucester Township, Municipal
Utilities Authority, (RB)
(AMBAC)
4.800%, 03/01/02 300 305
Hackensack, (GO)
6.100%, 06/01/05 250 269
Hackettstown, Municipal Utilities
Authority, Series F, (RB) (FGIC)
5.050%, 10/01/04 500 514
Hamilton Township, (GO)
(AMBAC)
4.100%, 02/01/98 400 400
Hillsborough Township, Board of
Education (COP) (FSA)
5.500%, 12/15/99 250 263
Long Branch, Sewer Authority,
(RB) (FGIC)
5.200%, 06/01/05 500 518
</TABLE>
21
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
NEW JERSEY MUNICIPAL
SECURITIES FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
NEW JERSEY--CONTINUED
Maplewood Township, (GO)
4.000%, 12/01/99 $ 200 $ 199
Mercer County, Improvement
Authority, Ewing Board of
Education Project, (RB) (MBIA)
6.300%, 05/15/07 250 272
Mercer County, Improvement
Authority, Hamilton Board of
Education Project, (RB) (MBIA)
5.500%, 06/01/01 200 210
4.900%, 12/15/05 300 304
Middlesex County, (GO)
3.900%, 07/15/97 300 300
4.500%, 07/15/01 500 506
4.600%, 07/15/02 500 509
Middlesex County, Improvement
Authority, (RB) (B)
3.800%, 03/01/97 250 250
4.000%, 03/01/98 250 250
4.150%, 03/01/99 250 251
4.350%, 03/01/01 250 252
Middletown Township, Sewer
Authority, Series A, (RB) (FGIC)
4.900%, 01/01/05 300 304
Monmouth County, (RB)
3.900%, 07/15/97 500 500
4.500%, 10/01/98 500 507
4.200%, 07/15/99 250 250
4.750%, 07/15/03 200 200
Moorestown Township, (GO)
(AMBAC)
6.000%, 09/01/07 300 320
Morris Plains, (GO)
5.000%, 07/01/04 200 203
Mount Laurel Township, (GO)
4.650%, 08/01/05 500 495
New Brunswick, (GO) (FGIC)
4.000%, 10/01/97 500 502
New Brunswick, Parking
Authority, (RB) (FGIC)
4.300%, 09/01/99 300 302
North Bergen Township (MBIA)
4.400%, 08/01/01 500 494
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
North Bergen Township,
Municipal Utilities Authority,
(RB) (FGIC)
4.800%, 12/15/03 $ 300 $ 303
North Haledon (AN)
4.220%, 05/17/96 350 351
North Jersey, District Water
Supply, Wanaque South
Project (MBIA)
5.400%, 07/01/02 300 316
Ocean County, (GO)
4.600%, 11/01/03 500 494
Parsippany Troy Hills
Township, (GO)
4.500%, 02/01/01 500 502
4.700%, 12/01/03 500 504
4.700%, 12/01/04 600 601
Passaic County, (GO)
4.700%, 09/01/03 250 252
Passaic County, (GO) (FGIC)
4.750%, 09/01/04 500 501
Passaic County, (GO) (MBIA)
4.350%, 05/01/03 200 198
4.450%, 05/01/04 200 196
Pequannock-Lincoln Park, Sewer
Authority, (RB) (MBIA)
4.400%, 12/01/02 500 500
Piscataway Township, (GO)
(STAID)
4.050%, 03/01/02 300 291
Pleasantville, (GO) (MBIA)
4.350%, 10/01/00 400 400
Port Authority of New York &
New Jersey, (RB) (B)
4.300%, 10/01/02 500 494
5.300%, 08/01/03 300 318
Princeton, (GO)
4.400%, 09/01/01 300 301
Roselle, (GO) (MBIA)
4.750%, 10/15/04 500 503
Rutgers State University, Series A,
(RB) (B)
4.380%, 05/01/01 500 499
</TABLE>
22
<PAGE>
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
NEW JERSEY--CONTINUED
Rutgers State University, Series S,
(RB) (B)
5.000%, 05/01/04 $ 500 $ 513
Somerset County, (GO)
5.000%, 10/01/02 200 208
4.450%, 12/01/02 500 505
4.350%, 12/01/04 300 297
Somerset Raritan Valley, Sewer
Improvement Authority,
Series H, (RB)
5.150%, 07/01/01 300 312
South Brunswick Township, (GO)
6.300%, 04/01/04 250 273
South Jersey Transportation
Authority, Transportation
Systems, Series B, (RB) (MBIA)
5.500%, 11/01/02 250 265
State, (GO)
4.750%, 02/15/98 300 304
5.100%, 02/15/00 500 516
5.300%, 02/15/02 600 627
5.400%, 02/15/03 300 315
State, Building Authority, (RB)
4.400%, 06/15/03 500 492
4.500%, 06/15/04 500 492
4.700%, 06/15/06 500 492
State, Economic Development
Authority, Series A, (RB) (MBIA)
5.130%, 07/01/00 300 309
5.400%, 07/01/02 300 315
State, Educational Facilities
Authority, Ramapo College,
Series E, (RB) (MBIA)
4.700%, 07/01/00 500 508
State, Educational Facilities
Authority, Rowan College,
Series C, (RB) (MBIA)
4.300%, 07/01/98 300 302
5.250%, 07/01/05 300 312
State, Educational Facilities
Authority, Stockton State
College, Series B, (RB)
(AMBAC)
6.200%, 07/01/04 300 332
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
State, Health Care Facilities
Authority, Atlantic City Medical
Center, (RB) (AMBAC)
6.550%, 07/01/03 $ 300 $ 325
State, Health Care Facilities
Authority, Chilton Memorial
Hospital, (RB)
3.750%, 07/01/96 500 500
State, Health Care Facilities
Authority, Hackensack Medical
Center, (RB) (MBIA)
6.000%, 07/01/00 300 322
State, Health Care Facilities
Authority, JFK Health Systems,
(RB) (FGIC)
4.800%, 07/01/03 200 203
State, Health Care Facilities
Authority, Mountain Side
Hospital, (RB) (FGIC)
5.100%, 07/01/03 500 517
State, Health Care Facilities
Authority, Shore Memorial
Healthcare Systems, (RB) (FGIC)
4.500%, 07/01/03 500 497
State, Health Care Facilities
Authority, Somerset Medical
Center, (RB) (MBIA)
4.600%, 07/01/05 250 247
State, Health Care Facilities
Authority, St.Peters Medical
Center, (RB) (AMBAC)
4.500%, 07/01/04 500 491
State, Health Care Facilities
Authority, Underwood
Memorial Hospital, (RB) (MBIA)
4.200%, 07/01/97 300 301
5.000%, 07/01/02 300 309
State, Highway Authority,
Garden State Parkway, (RB)
5.300%, 01/01/99 250 259
State, Housing & Mortgage
Finance Agency, (RB) (AMBAC)
5.300%, 05/01/06 200 207
</TABLE>
23
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
NEW JERSEY MUNICIPAL
SECURITIES FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
NEW JERSEY--CONTINUED
State, Housing & Mortgage
Finance Agency, Home Buyer,
Series N, (RB) (AMBAC)
4.000%, 10/01/98 $ 200 $ 202
4.200%, 04/01/99 200 203
4.200%, 10/01/99 300 305
State, Sports & Exposition
Authority, Series A, (RB)
4.900%, 09/01/05 315 319
5.000%, 09/01/06 315 318
State, Transportation Trust
Authority, Transportation
System, Series A, (RB)
3.800%, 06/15/96 500 500
5.600%, 06/15/98 200 207
4.600%, 06/15/01 500 509
4.630%, 06/15/02 500 506
State, Turnpike Authority,
Series A, (RB) (AMBAC)
5.700%, 01/01/01 300 315
5.900%, 01/01/04 200 212
6.400%, 01/01/07 300 326
State, Wastewater Treatment
Authority, (RB) (AMBAC)
4.200%, 03/01/97 500 502
4.250%, 03/01/99 500 501
4.250%, 03/01/00 500 499
4.400%, 03/01/04 500 492
Stony Brook, Sewer Authority,
(RB) (B)
4.500%, 12/01/00 500 508
Union County, (GO)
4.400%, 10/01/04 500 487
Union County, Environmental
Improvement Authority,
(RB) (B)
4.900%, 04/01/02 500 514
5.150%, 04/01/05 500 521
Wanaque Valley, Sewer Authority,
Series B, (RB) (AMBAC)
5.100%, 09/01/03 300 310
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
Warren County, Pollution Control
Finance Authority, Series B,
(RB) (MBIA)
5.700%, 12/01/03 $ 300 $ 326
Wayne Township, (GO)
5.450%, 10/01/04 250 261
West New York, Municipal
Utilities Authority, (RB) (FGIC)
4.000%, 12/15/99 500 497
West Windsor Township, (GO)
6.000%, 10/15/05 200 209
Western Monmouth, Utilities
Authority, Series A , (RB)
(AMBAC)
4.400%, 02/01/01 250 251
4.400%, 02/01/03 250 248
Woodbridge Township, Sewer
Utility Authority, Series B, (GO)
4.250%, 09/15/01 500 492
4.450%, 09/15/03 300 295
--------
50,627
--------
PUERTO RICO--1.1%
Puerto Rico, Public Buildings
Authority, Series A, (RB)
(AMBAC)
4.400%, 07/01/00 300 302
Puerto Rico, Telephone Authority,
Series M, (RB) (MBIA)
4.400%, 01/01/99 300 302
--------
604
--------
Total Municipal Bonds
(Cost $50,157,088) 51,231
--------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--1.8%
Federal Farm Credit Bank
5.720%, 02/12/96 500 497
</TABLE>
24
<PAGE>
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY
OBLIGATIONS--CONTINUED
Federal Home Loan Bank
5.620%, 01/12/96 $ 500 $ 499
-------
Total U.S. Government Agency
Obligations
(Cost $995,943) 996
-------
CASH EQUIVALENT--2.1%
Federated New Jersey Municipal
Cash Trust 355 355
Nuveen, Investment Quality 750 750
-------
Total Cash Equivalent
(Cost $1,104,552) 1,105
-------
Total Investments--98.7%
(Cost $52,257,583) $53,332
-------
OTHER ASSETS AND LIABILITIES--1.3%
Other Assets and Liabilities, Net 702
-------
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
2,601,629 outstanding shares of
beneficial interest 27,570
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 2,405,430
outstanding shares of beneficial
interest 25,698
Distributions in excess of net
investment income (1)
Accumulated net realized loss
on investments (308)
Net unrealized appreciation
on investments 1,075
-------
Total Net Assets--100.0% $54,034
=======
Net Asset Value, Offering Price and
Redemption Price Per
Share--Class A $ 10.79
=======
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
Net Asset Value and Redemption
Price Per Share--Class B $ 10.79
=======
Maximum Public Offering Price Per
Share--Class B ($10.79 / 99%) $ 10.90
=======
<FN>
(A) The rate reported on the Statement of Net Assets is the rate in effect on
December 31, 1995.
(B) Put and Demand features exist requiring the issurer to repurchase the
instrument prior to maturity. The maturity date shown is the next demand date.
AN -- Anticipation Notes
COP -- Certificate of Participation
GO -- General Obligation
RB -- Revenue Bond
The following organizations have underlying credit support for certain
securities as defined in the Statement of Net Assets:
(AMBAC) -- American Municipal Bond Insurance Company
(FGIC) -- Financial Guaranty Insurance Company
(FSA) -- Financial Security Assurance
(MBIA) -- Municipal Bond Insurance Association
(STAID) -- State Aid Withholding
</FN>
</TABLE>
INTERMEDIATE-TERM
GOVERNMENT SECURITIES
FUND
<TABLE>
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--47.8%
U.S. Treasury Notes
7.500%, 12/31/96 $ 200 $ 204
6.500%, 05/15/97 1,200 1,220
5.750%, 09/30/97 2,000 2,018
4.750%, 09/30/98 100 99
4.750%, 10/31/98 1,000 987
5.130%, 11/30/98 1,500 1,495
5.000%, 01/31/99 1,000 992
6.750%, 06/30/99 1,000 1,045
6.000%, 10/15/99 1,000 1,024
7.750%, 12/31/99 500 543
6.880%, 03/31/00 1,300 1,374
5.500%, 04/15/00 2,000 2,016
</TABLE>
25
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
INTERMEDIATE-TERM
GOVERNMENT SECURITIES FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
U.S. TREASURY
OBLIGATIONS--CONTINUED
5.880%, 06/30/00 $ 500 $ 510
5.750%, 10/31/00 2,000 2,030
--------
Total U.S. Treasury Obligations
(Cost $15,269,066) 15,557
--------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--49.0%
Federal Farm Credit Bank
5.250%, 05/26/98 1,000 998
Federal Home Loan Bank
6.320%, 12/04/97 500 509
6.100%, 02/17/00 1,000 1,017
5.920%, 06/29/00 1,000 1,012
7.000%, 07/05/00 500 500
5.800%, 07/26/00 1,000 1,002
5.250%, 09/01/00 500 493
5.040%, 10/26/00 500 488
Federal Home Loan Mortgage
Corporation
5.570%, 08/20/97 1,000 1,003
6.550%, 04/19/99 1,000 1,032
6.130%, 08/19/99 500 510
5.880%, 03/15/00 1,000 1,005
5.400%, 11/01/00 1,000 985
Federal National Mortgage
Association
6.050%, 11/10/97 500 506
6.350%, 08/10/99 750 770
7.240%, 09/02/99 500 512
6.110%, 09/20/00 1,250 1,276
7.140%, 08/15/02 800 811
7.200%, 08/19/02 500 507
6.720%, 02/25/03 1,000 1,026
-------
Total U.S. Government Agency
Obligations
(Cost $15,811,849) 15,962
-------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
CASH EQUIVALENT--1.4%
SEI Liquid Asset Trust -
Government Portfolio $ 442 $ 442
SEI Liquid Asset Trust -
Treasury Portfolio 1 1
--------
Total Cash Equivalent
(Cost $442,581) 443
--------
Total Investments--98.2%
(Cost $31,523,496) 31,962
--------
OTHER ASSETS AND LIABILITIES--1.8%
Other Assets and Liabilities, Net 580
--------
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
2,783,478 outstanding shares of
beneficial interest 29,456
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 353,423
outstanding shares of beneficial
interest 3,839
Accumulated net realized loss
on investments (1,191)
Net unrealized appreciation
on investments 438
--------
Total Net Assets--100.0% $ 32,542
========
Net Asset Value, Offering Price and
Redemption Price Per
Share--Class A $ 10.37
========
Net Asset Value and Redemption
Price Per Share--Class B $ 10.37
========
Maximum Public Offering Price Per
Share--Class B ($10.37 / 96%) $ 10.80
========
</TABLE>
26
<PAGE>
================================================================================
PENNSYLVANIA MUNICIPAL
SECURITIES FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS--95.6%
PENNSYLVANIA--91.1%
Allegheny County, Series C-44,
(GO) (FGIC)
5.200%, 06/01/08 $150 $ 152
Allentown, Water Improvement
Authority, (RB) (AMBAC)
4.850%, 07/15/01 150 153
Beaver County, Series A,
(GO) (FGIC)
4.750%, 10/01/03 100 101
Bethel Park, School District,
(GO) (FGIC)
5.000%, 08/01/04 150 153
Bethlehem, School District,
(GO) (FGIC)
4.600%, 09/01/00 150 151
Chester County, (GO)
5.500%, 11/15/10 25 26
Dauphin County, General Purpose
Authority, (RB) (MBIA)
4.450%, 10/01/99 150 149
East Stroudsburg, School District,
Series AA, (GO) (AMBAC)
4.700%, 11/15/00 125 126
Geisinger, Health System
Authority, (RB)
7.380%, 07/01/02 75 82
Governor-Mifflin, School District,
(GO) (AMBAC)
4.400%, 11/15/99 150 151
Lancaster, Higher Education
Authority, Franklin & Marshall
College, (RB) (MBIA)
5.650%, 04/15/10 110 112
Langhorne Manor Borough,
Higher Education and Health
Authority, Wood Services, (RB)
6.400%, 11/15/06 150 165
Lehigh County, General Purpose
Authority, St. Luke's Hospital,
(RB) (AMBAC)
4.750%, 11/15/00 100 102
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
Lycoming County, Pennsylvania
College of Technology,
(RB) (AMBAC)
5.000%, 11/01/02 $150 $ 153
North Allegheny, School District,
Series A, (GO) (AMBAC)
5.850%, 11/01/02 150 161
Oley Valley, School District,
(GO) (AMBAC)
3.950%, 05/15/97 100 100
State, Second Series, (GO)
5.500%, 07/01/01 150 158
State, Higher Education Authority,
Thomas Jefferson University,
Series A, (RB)
6.630%, 08/15/09 50 55
State, Higher Education Authority,
Series I, (RB) (AMBAC)
5.000%, 06/15/03 150 154
Pittsburgh, Series B, (GO)
(AMBAC)
4.500%, 09/01/96 100 100
Pittsburgh, Urban Redevelopment
Authority, (RB) (A)
5.750%, 10/01/14 100 102
State, School Building Authority,
Delaware County Community
College,(RB) (MBIA)
5.200%, 04/01/08 250 251
State, Brookville Area School
District Project, Series G,
(RB) (MBIA)
4.850%, 11/15/02 150 150
Swarthmore College, (RB)
7.380%, 09/15/18 50 55
Wattsburg, School District,
(GO) (AMBAC)
5.700%, 04/01/04 75 78
Westmoreland County, Series C,
(GO) (MBIA)
4.400%, 10/01/00 150 152
------
3,292
------
</TABLE>
27
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
PENNSYLVANIA MUNICIPAL
SECURITIES FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
GUAM--4.5%
Guam, Power Authority, (RB)
(AMBAC)
6.000%, 10/01/09 $ 150 $ 161
-------
Total Municipal Bonds
(Cost $3,363,622) 3,453
-------
CASH EQUIVALENT--3.6%
PNC Pennsylvania Tax-Free
Money Market Fund 131 131
-------
Total Cash Equivalent
(Cost $131,567) 131
-------
Total Investments--99.2%
(Cost $3,495,189) 3,584
-------
OTHER ASSETS AND LIABILITIES--0.8%
Other Assets and Liabilities, Net 30
-------
NET ASSETS:
Portfolio shares of Class A
(unlimited authorization--no
par value) based on 327,077
outstanding shares of beneficial
interest 3,264
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 26,366
outstanding shares of beneficial
interest 270
Accumulated net realized loss
on investments (9)
Net unrealized appreciation
on investments 89
------
Total Net Assets--100.0% $3,614
======
Net Asset Value, Offering Price and
Redemption Price Per
Share--Class A $10.23
======
Net Asset Value and Redemption Price
Per Share--Class B $10.22
======
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C>
Maximum Public Offering Price Per
Share--Class B ($10.22 / 99%) $10.32
======
<FN>
(A) Put and Demand features exist requiring the issurer to repurchase the
instrument prior to maturity. The maturity date shown is the next demand date.
GO -- General Obligation
RB -- Revenue Bond
The following organizations have provided underlying support for certain
securities as defined in the Statement of Net Assets:
(AMBAC) -- American Municipal Bond Assurance Company
(FGIC) -- Financial Guaranty Insurance Company
(MBIA) -- Municipal Bond Insurance Association
</FN>
</TABLE>
GNMA FUND
<TABLE>
<S> <C> <C>
MORTGAGE-BACKED POOLED NOTES--82.5%
Government National Mortgage
Association
6.000%, 10/15/23 $ 181 $ 175
6.000%, 11/15/23 965 938
6.000%, 12/15/23 1,430 1,390
6.000%, 01/15/24 192 186
6.000%, 01/20/24 937 903
6.500%, 11/15/23 826 820
6.500%, 12/15/23 116 115
6.500%, 12/15/23 352 349
7.000%, 06/15/23 164 166
7.000%, 11/15/23 85 86
7.000%, 12/15/23 946 957
7.500%, 08/15/25 305 314
8.000%, 04/15/23 51 53
8.000%, 05/15/23 366 382
8.000%, 08/15/24 228 237
8.000%, 08/15/24 239 249
8.000%, 09/15/24 211 220
8.000%, 09/15/24 352 367
8.000%, 09/15/24 248 258
8.000%, 09/15/24 486 507
-------
Total Mortgage-Backed Pooled
Notes
(Cost $8,522,264) 8,672
-------
</TABLE>
28
<PAGE>
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--11.1%
U.S. Treasury Bond
13.130%, 05/15/01 $ 150 $ 203
U.S. Treasury Notes
7.250%, 11/30/96 450 458
6.000%, 08/31/97 500 506
-------
Total U.S. Treasury Obligations
(Cost $1,150,388) 1,167
-------
CASH EQUIVALENT--5.9%
SEI Liquid Asset Trust -
Government Portfolio 432 432
SEI Liquid Asset Trust -
Treasury Portfolio 191 191
-------
Total Cash Equivalent
(Cost $622,846) 623
-------
Total Investments--99.5%
(Cost $10,295,498) 10,462
-------
OTHER ASSETS AND LIABILITIES--0.5%
Other Assets and Liabilities, Net 49
-------
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
879,855 outstanding shares of beneficial
interest 9,254
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 177,389
outstanding shares of beneficial
interest 1,897
Accumulated net realized loss
on investments (806)
Net unrealized appreciation
on investments 166
-------
Total Net Assets--100.0% $10,511
=======
Net Asset Value, Offering Price and
Redemption Price Per
Share--Class A $ 9.94
=======
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
Net Asset Value and Redemption
Price Per Share--Class B $ 9.93
=======
Maximum Public Offering Price Per
Share--Class B ($9.93 / 97%) $ 10.24
=======
EQUITY VALUE FUND
COMMON STOCK--92.1%
AEROSPACE & DEFENSE--3.7%
Loral 40,000 $ 1,415
Raytheon 40,000 1,890
-------
3,305
-------
AIRCRAFT--2.6%
United Technologies 25,000 2,372
-------
AUTOMOTIVE--3.1%
Borg-Warner Automotive 20,000 640
Echlin 60,000 2,190
-------
2,830
-------
BANKS--5.8%
Bank of New York 25,000 1,219
Boatmen's Bancshares 45,000 1,839
Mellon Bank 40,000 2,150
-------
5,208
-------
CHEMICALS--1.2%
E.I. DuPont de Nemours 15,000 1,048
-------
COMMUNICATIONS EQUIPMENT--0.9%
ITT Industries 10,000 240
ITT * 10,000 530
-------
770
-------
COMPUTERS & SERVICES--5.7%
Compaq Computer* 45,000 2,160
Hewlett Packard 25,000 2,094
Microsoft * 10,000 877
-------
5,131
-------
</TABLE>
29
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
EQUITY VALUE
FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
DRUGS--5.2%
Bristol-Myers Squibb 10,000 $ 859
Merck 20,000 1,315
Pfizer 40,000 2,520
-------
4,694
-------
ELECTRICAL & ELECTRONIC PRODUCTS--5.8%
Emerson Electric 25,000 2,044
General Electric 45,000 3,240
-------
5,284
-------
FINANCIAL SERVICES--0.5%
ITT Hartford Group* 10,000 484
-------
FOOD, BEVERAGE & TOBACCO--6.5%
CPC International 5,000 343
Nestle S.A., ADR 20,000 1,111
PepsiCo 30,000 1,676
Sara Lee 20,000 638
Unilever NV, ADR 15,000 2,111
-------
5,879
-------
GAS/NATURAL GAS--7.0%
Consolidated Natural Gas 35,000 1,588
National Fuel & Gas 50,000 1,681
Sonat 50,000 1,781
Trans Canada Pipeline 90,000 1,238
-------
6,288
-------
GLASS PRODUCTS--1.0%
PPG Industries 20,000 915
-------
HOUSEHOLD PRODUCTS--3.7%
Colgate-Palmolive 15,000 1,054
Procter & Gamble 15,000 1,245
Whirlpool 20,000 1,065
-------
3,364
-------
INSURANCE--6.8%
Aetna Life & Casualty 25,000 1,731
American International Group 15,000 1,388
Chubb 25,000 2,419
Providian 15,000 611
-------
6,149
-------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
MEASURING DEVICES--1.6%
Honeywell 30,000 $ 1,459
-------
PAPER & PAPER PRODUCTS--1.6%
Weyerhaeuser 20,000 865
Willamette Industries 10,000 562
-------
1,427
-------
PETROLEUM REFINING--9.5%
Amoco 20,000 1,437
Exxon 20,000 1,602
Mobil 20,000 2,240
Royal Dutch Petroleum 15,000 2,117
Texaco 15,000 1,178
-------
8,574
-------
PHOTOGRAPHIC EQUIPMENT &
SUPPLIES--0.8%
Xerox 5,000 685
-------
RAILROADS--6.7%
Burlington Northern Santa Fe 30,000 2,340
Illinois Central 45,000 1,727
Union Pacific 30,000 1,980
-------
6,047
-------
RETAIL--2.6%
Dayton-Hudson 10,000 750
May Department Stores 20,000 845
Sears Roebuck 20,000 780
-------
2,375
-------
RUBBER & PLASTIC--1.5%
Goodyear Tire & Rubber 30,000 1,361
-------
SEMI-CONDUCTORS/
INSTRUMENTS--2.2%
Intel 35,000 1,986
-------
TELEPHONES &
TELECOMMUNICATION--6.1%
AT&T 35,000 2,266
Bell Atlantic 25,000 1,672
</TABLE>
30
<PAGE>
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Amount Market
Description (000)/Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
TELEPHONES &
TELECOMMUNICATION--CONTINUED
SBC Communications 15,000 $ 863
US West 20,000 715
-------
5,516
-------
Total Common Stock
(Cost $66,043,466) 83,151
-------
CASH EQUIVALENT--7.7%
SEI Liquid Asset Trust -
Government Portfolio $3,928 3,928
SEI Liquid Asset Trust -
Treasury Portfolio 3,049 3,049
-------
Total Cash Equivalent
(Cost $6,977,125) 6,977
-------
Total Investments--99.8%
(Cost $73,020,591) 90,128
-------
OTHER ASSETS AND LIABILITIES--0.2%
Other Assets and Liabilities, Net 193
-------
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
6,452,508 outstanding shares of
beneficial interest 66,520
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 596,012
outstanding shares of beneficial
interest 6,858
Accumulated net realized loss
on investments (164)
Net unrealized appreciation
on investments 17,107
-------
Total Net Assets--100.0% $90,321
=======
Net Asset Value, Offering Price and
Redemption Price Per
Share--Class A $ 12.81
=======
Net Asset Value and Redemption
Price Per Share--Class B $ 12.83
=======
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
Maximum Public Offering Price Per
Share--Class B ($12.83 / 96%) $ 13.36
=======
<FN>
* Non-income producing security
ADR -- American Depository Receipt
</FN>
</TABLE>
EQUITY INCOME FUND
COMMON STOCK--99.6%
<TABLE>
<S> <C> <C>
AEROSPACE & DEFENSE--4.2%
Raytheon 26,000 $ 1,228
Rockwell International 20,000 1,058
-------
2,286
-------
AIRCRAFT--4.7%
Textron 18,000 1,215
United Technologies 14,000 1,328
-------
2,543
-------
AUTOMOTIVE--2.6%
Echlin 30,000 1,095
Ford Motor 10,000 290
-------
1,385
-------
BANKS--6.4%
Bank of New York 24,000 1,170
Norwest 35,000 1,155
Wachovia 25,000 1,144
-------
3,469
-------
DRUGS--4.8%
Bristol-Myers Squibb 15,000 1,288
Merck 20,000 1,315
-------
2,603
-------
ELECTRICAL & ELECTRONIC
PRODUCTS--3.6%
Emerson Electric 12,000 981
General Electric 13,000 936
-------
1,917
-------
ELECTRICAL UTILITIES--5.7%
Houston Industries 30,000 727
Public Service Enterprise Group 25,000 766
Utilicorp United 30,000 881
WPS Resources 20,000 680
-------
3,054
-------
</TABLE>
31
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
The Pillar Funds -- December 31, 1995
EQUITY INCOME
FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
FOOD, BEVERAGE & TOBACCO--8.6%
Anheuser Busch 15,000 $ 1,003
CPC International 16,000 1,098
General Mills 15,000 866
Sara Lee 30,000 956
Unilever NV, ADR 5,000 704
-------
4,627
-------
GAS/NATURAL GAS--7.9%
Consolidated Natural Gas 25,000 1,134
National Fuel & Gas 30,000 1,009
Sonat 40,000 1,425
Trans Canada Pipeline 50,000 688
-------
4,256
-------
GLASS PRODUCTS--3.9%
Corning 30,000 960
PPG Industries 25,000 1,144
-------
2,104
-------
HOUSEHOLD PRODUCTS--5.8%
Colgate-Palmolive 16,000 1,124
Procter & Gamble 11,000 913
Whirlpool 20,000 1,065
-------
3,102
-------
INSURANCE--3.8%
Aetna Life & Casualty 15,000 1,039
Cigna 10,000 1,032
-------
2,071
-------
MEASURING DEVICES--1.8%
Honeywell 20,000 973
-------
PAPER & PAPER PRODUCTS--3.1%
Kimberly Clark 20,000 1,655
-------
PETROLEUM REFINING--10.1%
Amoco 10,000 719
Chevron 15,000 787
Mobil 12,000 1,344
Royal Dutch Petroleum 10,000 1,411
Texaco 15,000 1,178
-------
5,439
-------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
PRINTING & PUBLISHING--1.7%
Gannett 15,000 $ 921
-------
RAILROADS--3.2%
Burlington Northern Santa Fe 12,000 936
Illinois Central 20,000 768
-------
1,704
-------
RETAIL--5.9%
Dayton-Hudson 15,000 1,125
May Department Stores 25,000 1,056
Sears Roebuck 25,000 975
-------
3,156
-------
SEMI-CONDUCTORS/INSTRUMENTS--2.7%
Thomas & Betts 20,000 1,475
-------
TELEPHONES &
TELECOMMUNICATION--9.1%
Ameritech 20,000 1,180
Bell Atlantic 12,000 802
Bellsouth 24,000 1,044
GTE 26,000 1,144
US West 20,000 715
-------
4,885
-------
Total Common Stock
(Cost $43,886,661) 53,625
-------
CASH EQUIVALENT--0.4%
SEI Liquid Asset Trust -
Government Portfolio $202 202
-------
Total Cash Equivalent
(Cost $202,198) 202
-------
Total Investments--100.0%
(Cost $44,088,859) 53,827
-------
OTHER ASSETS AND LIABILITIES--0.0%
Other Assets and Liabilities, Net (13)
-------
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
3,382,510 outstanding shares of
beneficial interest 34,788
</TABLE>
32
<PAGE>
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C>
NET ASSETS:--CONTINUED
Portfolio shares of Class B (unlimited
authorization--no par value) based on
735,130 outstanding shares of beneficial
interest $ 8,455
Accumulated net realized gain
on investments 833
Net unrealized appreciation
on investments 9,738
-------
Total Net Assets--100.0% $53,814
=======
Net Asset Value, Offering Price and
Redemption Price Per
Share--Class A $ 13.07
=======
Net Asset Value and Redemption
Price Per Share--Class B $ 13.08
=======
Maximum Public Offering Price Per
Share--Class B ($13.08 / 96%) $ 13.63
=======
<FN>
ADR -- American Depository Receipt
</FN>
</TABLE>
MID CAP VALUE FUND
<TABLE>
<S> <C> <C>
COMMON STOCK--96.6%
APPAREL/TEXTILES--1.9%
Albany International 50,000 $ 906
-------
AUTOMOTIVE--10.5%
A.O.Smith 40,000 830
Echlin 36,000 1,314
Federal Signal 52,000 1,345
Regal Beloit 72,000 1,566
-------
5,055
-------
BANKS--8.1%
Associated Bancorp 15,000 614
Dauphin Deposit Bank & Trust 20,000 575
First Tennessee National 16,000 968
Merchantile Bancorp 12,000 552
Wilmington Trust 20,000 617
Zions Bancorp 7,000 562
-------
3,888
-------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
BUILDING & CONSTRUCTION--7.5%
Foster Wheeler 30,000 $ 1,275
Granite Construction 10,000 315
Pitt Des Moines 20,000 765
Jacobs Engineering Group * 50,000 1,250
-------
3,605
-------
CHEMICALS--9.0%
Cytec Industries * 20,000 1,247
Lawter International 100,000 1,162
Olin 10,000 742
Praxair 35,000 1,177
-------
4,328
-------
COMMUNICATIONS EQUIPMENT--2.0%
Vishay Intertechnology* 30,000 945
-------
DRUGS--1.5%
Loctite 15,000 713
-------
ELECTRICAL TECHNOLOGY--2.3%
Anixter International * 60,000 1,117
-------
FINANCIAL SERVICES--1.1%
Franklin Resources 10,000 504
-------
FOOD, BEVERAGE & TOBACCO--4.9%
McCormick 65,000 1,568
Universal Foods 20,000 802
-------
2,370
-------
HOUSEHOLD PRODUCTS--2.8%
Valspar 30,000 1,339
-------
INSURANCE--2.7%
Cincinnati Financial 20,000 1,305
-------
MACHINERY--11.2%
Astec Industries * 50,000 494
Baldor Electric 45,000 906
Case 20,000 915
Lindsay Manufacturing* 36,000 1,386
Nordson 20,000 1,125
Stewart & Stevenson Services 22,000 555
-------
5,381
-------
</TABLE>
33
<PAGE>
STATEMENT OF NET ASSETS
===============================================================================
The Pillar Funds -- December 31, 1995
MID CAP VALUE FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C>
MARINE TRANSPORTATION--2.4%
Kirby* 70,000 $ 1,138
-------
MEASURING DEVICES--3.2%
Andros Analyzers* 10,000 153
Oak Industries* 50,000 937
Trimble Navigation* 25,000 466
-------
1,556
-------
METALS & MINING--4.5%
Cleveland Cliffs 32,000 1,312
Vulcan Materials 15,000 864
-------
2,176
-------
PAPER & PAPER PRODUCTS--6.0%
Bemis 60,000 1,537
Wausau Paper Mills 50,000 1,363
-------
2,900
-------
PETROLEUM REFINING--2.1%
Saga Petroleum, Class B * 80,000 1,000
-------
PRINTING & PUBLISHING--2.2%
Belo, Class A 30,000 1,043
-------
RAILROADS--4.1%
Illinois Central 30,000 1,151
Kansas City Southern
Industries 18,000 824
-------
1,975
-------
RUBBER & PLASTIC--4.5%
Cooper Tire & Rubber 50,000 1,231
Sonoco Products 35,000 919
-------
2,150
-------
STEEL & STEEL WORKS--1.0%
Schnitzer Steel Industries, Cl A 15,000 458
-------
TRUCKING--1.1%
Kenan Transport 25,479 529
-------
Total Common Stock
(Cost $39,280,076) 46,381
-------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
CASH EQUIVALENT--1.8%
SEI Liquid Asset Trust -
Government Portfolio $866 $ 866
-------
Total Cash Equivalent
(Cost $866,338) 866
-------
Total Investments--98.4%
(Cost $40,146,414) 47,247
-------
OTHER ASSETS AND LIABILITIES--1.6%
Other Assets and Liabilities, Net 781
-------
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
3,377,962 outstanding shares of
beneficial interest 35,436
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 451,242
outstanding shares of beneficial
interest 5,176
Accumulated net realized gain
on investments 315
Net unrealized appreciation
on investments 7,101
-------
Total Net Assets--100.0% $48,028
=======
Net Asset Value, Offering Price and
Redemption Price Per
Share--Class A $ 12.55
=======
Net Asset Value and Redemption
Price Per Share--Class B $ 12.53
=======
Maximum Public Offering Price Per
Share--Class B ($12.53 / 96%) $ 13.05
=======
<FN>
* Non-income producing security
ADR -- American Depository Receipt
</FN>
</TABLE>
34
<PAGE>
===============================================================================
BALANCED GROWTH FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS--12.8%
U.S. Treasury Notes
6.880%, 02/28/97 $ 500 $ 509
6.630%, 03/31/97 500 509
5.880%, 08/15/98 500 508
5.000%, 01/31/99 500 496
7.000%, 04/15/99 500 525
7.750%, 11/30/99 500 542
5.880%, 06/30/00 500 510
5.750%, 10/31/00 500 507
7.500%, 11/15/01 500 551
6.380%, 08/15/02 500 525
------
Total U.S. Treasury Obligations
(Cost $5,008,381) 5,182
------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--30.8%
Federal Farm Credit Bank
7.610%, 03/16/98 100 100
7.950%, 04/01/02 500 519
Federal Home Loan Bank
6.330%, 07/14/97 500 501
6.300%, 11/02/98 500 501
6.490%, 12/01/99 500 501
Federal Home Loan Mortgage
6.300%, 08/25/99 500 501
6.550%, 01/04/00 500 516
6.550%, 10/02/02 500 525
Federal National Mortgage
Association
6.750%, 04/22/97 500 509
7.680%, 12/01/97 300 312
6.350%, 08/10/99 500 513
8.350%, 11/10/99 500 548
8.500%, 01/13/00 500 530
6.100%, 02/10/00 500 509
7.900%, 04/10/02 500 512
6.950%, 09/10/02 500 505
6.720%, 02/25/03 500 513
6.380%, 06/25/03 500 504
6.200%, 11/12/03 500 502
5.800%, 12/10/03 500 500
8.630%, 11/10/04 500 544
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Face Amount Market
Description (000)/Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
8.550%, 12/10/04 $ 750 $ 784
8.000%, 04/13/05 500 522
Tennessee Valley Authority
7.450%, 10/15/01 500 525
6.380%, 06/15/05 500 519
-------
Total U.S. Government Agency
Obligations
(Cost $12,153,933) 12,515
-------
CORPORATE BOND--4.4%
American Express Credit
6.750%, 06/01/01 500 518
E.I. DuPont de Nemours
6.750%, 10/15/02 500 524
Philip Morris
8.750%, 12/01/96 100 103
9.250%, 02/15/00 100 111
Southern California Edison
6.750%, 01/15/00 500 513
------
Total Corporate Bond
(Cost $1,699,706) 1,769
------
COMMON STOCK--50.0%
AEROSPACE & DEFENSE--1.1%
Loral 13,000 460
------
AIRCRAFT--1.7%
Boeing 4,000 313
United Technologies 4,000 380
------
693
------
AUTOMOTIVE--1.5%
Borg-Warner Automotive 9,000 288
Echlin 9,000 329
------
617
------
BANKS--3.4%
Boatmen's Bancshares 12,000 490
J.P. Morgan 6,000 482
Norwest 12,000 396
------
1,368
------
</TABLE>
35
<PAGE>
STATEMENT OF NET ASSETS
===============================================================================
The Pillar Funds -- December 31, 1995
BALANCED GROWTH FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
CHEMICALS--1.2%
Monsanto 4,000 $ 490
------
COMMUNICATIONS EQUIPMENT--0.7%
ITT Industries 4,000 96
ITT * 4,000 212
------
308
------
COMPUTERS & SERVICES--3.0%
Compaq Computer* 7,500 360
Hewlett Packard 4,000 335
Safeguard Scientifics * 10,000 495
US Data * 2,500 36
------
1,226
------
CONCRETE & MINERAL PRODUCTS--2.4%
Armstrong World Industries 8,000 496
Minnesota Mining &
Manufacturing 7,000 464
------
960
------
CONTAINERS & PACKAGING--0.7%
Crown Cork & Seal* 6,500 271
------
DRUGS--2.6%
Bristol-Myers Squibb 6,000 515
Merck 8,000 526
------
1,041
------
ELECTRICAL & ELECTRONIC
PRODUCTS--2.4%
Emerson Electric 5,000 409
General Electric 8,000 576
------
985
------
ELECTRIC UTILITIES--0.9%
FPL Group 8,000 371
------
FINANCIAL SERVICES--1.7%
Federal National Mortgage
Association 4,000 496
ITT Hartford Group* 4,000 194
------
690
------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
FOOD, BEVERAGE & TOBACCO--6.4%
CPC International 7,000 $ 480
H.J. Heinz 14,250 472
Nestle S.A., ADR 10,000 555
Pepsico 9,000 503
Sara Lee 10,000 319
Unilever NV, ADR 2,000 282
------
2,611
------
FORESTRY--1.0%
Rayonier 12,000 400
------
HOUSEHOLD PRODUCTS--0.9%
Whirlpool 7,000 373
------
INSURANCE--2.5%
American International Group 6,000 555
Cigna 4,500 465
------
1,020
------
PETROLEUM & FUEL PRODUCTS--1.2%
Schlumberger 7,000 485
------
PETROLEUM REFINING--4.0%
Amoco 7,000 503
Mobil 5,000 560
Royal Dutch Petroleum 4,000 565
------
1,628
------
PRINTING & PUBLISHING--1.5%
Gannett 6,000 368
Time Warner 6,000 227
------
595
------
RAILROADS--2.3%
Burlington Northern Santa Fe 6,000 468
Illinois Central 12,000 461
------
929
------
RETAIL--1.1%
May Department Stores 11,000 465
------
</TABLE>
36
<PAGE>
===============================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
SEMI-CONDUCTORS/
INSTRUMENTS--0.8%
Intel 5,500 $ 312
-------
TELEPHONES &
TELECOMMUNICATION--5.0%
AT&T 8,000 518
Ameritech 7,600 448
Bell Atlantic 8,000 535
Bellsouth 12,000 522
-------
2,023
-------
Total Common Stock
(Cost $15,214,190) 20,321
-------
CASH EQUIVALENT--1.2%
SEI Liquid Asset Trust -
Government Portfolio $476 476
-------
Total Cash Equivalent
(Cost $475,751) 476
-------
Total Investments--99.2%
(Cost $34,551,961) 40,263
-------
OTHER ASSETS AND LIABILITIES--0.8%
Other Assets and Liabilities, Net 334
-------
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
2,667,147 outstanding shares of
beneficial interest 27,439
Portfolio shares of Class B
(unlimited authorization--no
par value) based on 700,302
outstanding shares of beneficial
interest 7,489
Accumulated net realized loss
on investments (42)
Net unrealized appreciation
on investments 5,711
-------
Total Net Assets--100.0% $40,597
=======
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C>
Net Asset Value, Offering Price and
Redemption Price Per
Share--Class A $ 12.05
========
Net Asset Value and Redemption
Price Per Share--Class B $ 12.07
========
Maximum Public Offering Price Per
Share--Class B ($12.07 / 96%) $ 12.57
========
<FN>
* Non-income producing security
ADR -- American Depository Receipt
</FN>
</TABLE>
INTERNATIONAL GROWTH FUND
<TABLE>
<S> <C> <C>
FOREIGN STOCKS--97.5%
ARGENTINA--0.8%
Buenos Aires Embotelladora
ADR 2,250 $ 46
Telefonica Argentina ADR 1,600 44
--------
90
--------
AUSTRALIA--5.3%
Advance Bank Australia 9,590 77
Amcor 13,100 92
Australian & New Zealand
Bank 28,000 131
Broken Hill Proprietary 11,076 156
Qantas Air ADR 2,050 34
Westpac Banking 15,000 67
--------
557
--------
AUSTRIA--0.8%
EVN 650 89
--------
BELGIUM--0.6%
Delhaize-Le Lion 1,550 64
--------
BRAZIL--0.7%
Electrobras ADR 4,300 58
Usiminas ADR 2,000 16
--------
74
--------
</TABLE>
37
<PAGE>
STATEMENT OF NET ASSETS
===============================================================================
The Pillar Funds -- December 31, 1995
INTERNATIONAL GROWTH
FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
CANADA--1.6%
Canada Pacific ADR 9,500 $ 172
------
CHILE--0.3%
Compania de Telecom Chile ADR 400 33
------
DENMARK--2.0%
Tele Denmark ADS 5,750 159
Unidanmark series A 1,100 54
------
213
------
FINLAND--1.2%
Metsa Serla series B 1,700 52
Unitas Bank series A * 28,000 71
------
123
------
FRANCE--8.0%
Banque National Paris series A 1,450 66
Canal Plus 525 99
Cie de Saint Gobain 600 66
Danone 350 58
Peugeot 400 53
Renault 1,700 49
Rhone Poulenc 6,750 145
Societe Generale 650 80
Societe Nationale Elf Aquitaine 1,900 140
Total Compaigne series B 1,300 88
------
844
------
GERMANY--5.5%
Bayer 375 100
Biersdorf 20 14
Daimler Benz 150 76
Degussa 245 82
Deutsche Bank 1,700 81
Karstadt 160 66
Mannesmann 250 79
Veba 2,000 86
------
584
------
HONG KONG--4.1%
Hong Kong Telecommunications 29,600 53
Hutchison Whampoa 23,000 140
Sung Hung Kai Properties 16,000 131
Swire Pacific series A 14,000 108
------
432
------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
INDONESIA--0.4%
Jaya Real Property 15,000 $ 40
Semen Gresik 2,500 7
------
47
------
ITALY--2.3%
Banca Commerciale Italiana 40,000 85
Stet Societa Finanziaria
Telefonica 43,000 122
Telecom Italia 25,000 39
------
246
------
JAPAN--27.7%
Canon Sales 3,150 84
Chugai Pharmaceutical 14,000 134
Dai Nippon Printing 7,000 119
Eisai 4,000 70
Home Wide 3,000 35
Ito Yokado 2,000 123
Kajima 6,000 59
Kawasaki Heavy Industries 14,000 64
Kawasaki Steel 20,000 70
Keio Teito Electric Railway 8,000 47
Kyoritsu Air Tech 1,000 11
Matsushita Electric 6,000 98
Minebea 6,000 50
Mitsubishi 6,000 74
Mitsubishi Bank 4,000 94
Mitsui Petrochem 5,000 41
Nihon Jumbo 2,000 70
Nippon Express 8,000 77
Nippon Telegraph & Telephone 9 73
NKK 30,000 81
Nokia ADR series A 2,300 89
Nomura Securities 5,000 109
Orix 3,000 124
Riso Kagaku 500 42
Sakura Bank 8,000 102
Sankyo 4,000 90
Sanwa Bank 3,000 61
Secom 2,000 139
Sekisui Chemical 1,000 15
Seven Eleven 1,000 71
Shimamura 2,000 77
</TABLE>
38
<PAGE>
===============================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
JAPAN--CONTINUED
Showa 5,000 $ 38
Sony 1,000 60
Sumitomo Marine &
Fire Insurance 7,000 58
Sumitomo Realty &
Development 11,000 78
Sumitomo Trust & Banking 5,000 71
Toda Construction 5,000 43
Tohoku Electric Power 2,000 48
Tokio Marine & Fire Insurance 10,000 131
Tsutsumi Jewelry 200 10
------
2,930
------
MALAYSIA--1.8%
Resorts World Berhad 13,000 70
Sime Darby 36,000 96
Telekom Malaysia 3,000 23
------
189
------
MEXICO--1.0%
Cemex SA de CV series A 6,000 20
Femsa series B 10,500 24
Grupo Carso * 3,300 18
Telefonos de Mexico ADR
series L 850 27
Trans Maritima ADR 2,350 18
------
107
------
NETHERLANDS--4.1%
Elsevier 4,000 53
International Nederland 2,000 134
Unilever CVA 650 92
Vendex International 4,000 119
Verenigde Nederlandse
Uigevbedrijven 250 34
------
432
------
NEW ZEALAND--1.4%
Air New Zealand series B 17,500 59
Brierley Investment 115,000 91
------
150
------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Shares Value (000)
- ----------------------------------------------------------
<S> <C> <C>
NORWAY--3.9%
Christiana Bank 24,100 $ 57
Hafslund Nycomed series A 2,800 73
Kvaerner 2,500 89
Orkla AS series A 1,750 87
Saga Petroleum AS series A 7,800 104
------
410
------
PHILIPPINES--1.0%
Philippine National Bank* 6,000 66
Phillipino Telephone 40,000 41
------
107
------
PORTUGAL--0.5%
Portugal Telecom S.A. ADR* 3,000 57
------
SINGAPORE--3.4%
Keppel 15,000 134
Overseas Chinese Banking 9,000 113
United Overseas Bank 12,000 115
------
362
------
SPAIN--4.8%
Acerinox S.A. 850 86
Banco Bilbao Vizcaya 3,750 135
Empresa Nacional de
Electricidad 1,600 91
Repsol 400 13
Telefonica de Espana 3,500 48
Repsol ADR 4,000 132
------
505
------
SWEDEN--2.0%
Astra AB series A 1,100 44
Avesta Sheffield 4,500 40
BT Industries* 5,300 58
Stora Kopparbergs series A 5,800 68
------
210
------
SWITZERLAND--2.9%
Ciba Geigy 90 79
Nestle SA 140 155
Sulzer Gerbruder 145 78
------
312
------
</TABLE>
39
<PAGE>
STATEMENT OF NET ASSETS
===============================================================================
The Pillar Funds -- December 31, 1995
INTERNATIONAL GROWTH
FUND--CONTINUED
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Shares/Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------
<S> <C> <C>
THAILAND--0.9%
Bangkok Bank 1,500 $ 18
Bangkok Metro Bank 38,000 35
Siam Commercial Bank 3,000 40
------
93
------
UNITED KINGDOM--8.5%
Associated British Foods 8,000 46
Bass 2,000 22
BET 82,000 162
Body Shop International 14,000 33
British Steel 30,000 76
British Telecommunications 8,750 48
Powergen 6,073 50
Rank Organization 17,500 127
Royal Insurance 21,000 125
Tomkins 15,000 66
Vodafone Group 42,000 150
------
905
------
Total Foreign Stocks
(Cost $9,864,107) 10,337
------
REPURCHASE AGREEMENTS--2.8%
Swiss Bank Securities 5.85%,
dated 12/29/95, matures
1/2/96, repurchase price
$294,191 (collateralized by
U.S. Treasury Note, par
value $180,000, 14%, due
11/15/11, market value
$301,171) 294 294
------
Total Repurchase Agreements
(Cost $294,000) 294
------
Total Investments--100.3%
(Cost $10,158,107) 10,631
------
OTHER ASSETS AND LIABILITIES-- (0.3%) (20)
------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Market
Description Value (000)
- ----------------------------------------------------------
<S> <C>
NET ASSETS:
Portfolio shares of Class A (unlimited
authorization--no par value) based on
930,244 outstanding shares of beneficial
interest $ 9,491
Portfolio shares of Class B
unlimited authorization--no
par value) based on 57,822
outstanding shares of beneficial
interest 590
Undistributed net investment income 12
Accumulated net realized loss
on foreign currency transactions (16)
Accumulated net realized gain
on investments 61
Net unrealized appreciation
on investments 473
-------
Total Net Assets--100.0% $10,611
=======
Net Asset Value, Offering Price and
Redemption Price Per
Share--Class A $ 10.74
=======
Net Asset Value and Redemption
Price Per Share--Class B $ 10.73
=======
Maximum Public Offering Price Per
Share--Class B ($10.73 / 96%) $ 11.18
=======
<FN>
* Non-income producing security
ADR -- American Depository Receipts
ADS -- American Depository Shares
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
40
<PAGE>
STATEMENT OF OPERATIONS (000)
================================================================================
The Pillar Funds -- For the year ended December 31, 1995
<TABLE>
<CAPTION>
------------- ---------- ---------- -------------
U.S. TREASURY PRIME U.S. TREASURY
SECURITIES OBLIGATION TAX-EXEMPT SECURITIES
MONEY MONEY MONEY PLUS MONEY
MARKET MARKET MARKET MARKET
FUND FUND FUND FUND
------------- ---------- ---------- -------------
<S> <C> <C> <C> <C>
INTEREST INCOME: $ 22,136 $ 13,294 $ 2,274 $ 3,308
-------- -------- -------- --------
EXPENSES:
Administration fee 795 450 112 199
Investment advisory fee 1,391 787 198 85
Less investment advisory fee waived (11) (11) (28) (41)
Custodian fee 99 56 15 14
Transfer agent fee 143 65 36 34
Professional fees 93 37 11 8
Registration fees 19 50 12 (8)
Distribution fees (1) 4 11 11 17
Printing expense 38 16 4 3
Amortization of deferred
organizational costs 4 4 3 2
Insurance and other expenses 11 8 4 --
-------- -------- -------- --------
Total expenses 2,586 1,473 378 313
-------- -------- -------- --------
NET INVESTMENT INCOME 19,550 11,821 1,896 2,995
-------- -------- -------- --------
Net realized gain (loss)
on investments 110 44 (5) 4
-------- -------- -------- --------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 19,660 $ 11,865 $ 1,891 $ 2,999
======== ======== ======== ========
<FN>
(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.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
41
<PAGE>
STATEMENT OF OPERATIONS (000)
================================================================================
The Pillar Funds -- For the year ended December 31, 1995
<TABLE>
<CAPTION>
---------- ---------- ----------- -------------
INTERMEDIATE-
NEW JERSEY TERM
SHORT-TERM FIXED MUNICIPAL GOVERNMENT
INVESTMENT INCOME SECURITIES SECURITIES
FUND FUND FUND FUND
---------- ---------- ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income -- -- -- --
Interest income $ 1,997 $ 7,357 $ 2,288 $ 1,944
Less: Foreign taxes withheld -- -- -- --
-------- -------- -------- --------
Total income 1,997 7,357 2,288 1,944
-------- -------- -------- --------
EXPENSES:
Administration fee 63 222 90 63
Less administration fee waived -- -- (34) --
Investment advisory fee 189 666 283 190
Less investment advisory fee waived (53) (117) (214) (78)
Custodian fee 8 28 11 9
Transfer agent fee 30 49 30 35
Professional fees 6 19 9 19
Registration fees 1 -- 3 --
Distribution fees (1) 3 14 58 7
Printing expense 2 7 5 5
Amortization of deferred
organizational costs 4 3 3 4
Insurance and other expenses 3 11 8 7
-------- -------- -------- --------
Total expenses 256 902 252 261
-------- -------- -------- --------
NET INVESTMENT INCOME 1,741 6,455 2,036 1,683
-------- -------- -------- --------
Net realized gain (loss)
on investments 43 (191) (59) (624)
-------- -------- -------- --------
Net realized loss on foreign currency
transactions and foreign currency
contracts -- -- -- --
Net change in unrealized depreciation
on foreign currency and translation
of other assets and liabilities
denominated in foreign currency -- -- -- --
Net unrealized appreciation
of investment securities 134 11,725 3,802 3,243
-------- -------- -------- --------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 1,918 $ 17,989 $ 5,779 $ 4,302
======== ======== ======== ========
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
------------ ---------- -------- -------- -------- -------- -------------
PENNSYLVANIA
MUNICIPAL EQUITY EQUITY MID CAP BALANCED INTERNATIONAL
SECURITIES GNMA VALUE INCOME VALUE GROWTH GROWTH
FUND FUND FUND FUND FUND FUND FUND (2)
------------ ---------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income -- -- $ 1,947 $ 1,512 $ 770 $ 469 $ 55
Interest income $ 160 $ 660 265 50 120 1,296 44
Less: Foreign taxes withheld -- -- -- -- -- -- (6)
-------- -------- -------- -------- -------- -------- --------
Total income 160 660 2,212 1,562 890 1,765 93
-------- -------- -------- -------- -------- -------- --------
EXPENSES:
Administration fee 5 19 153 92 86 75 8
Less administration fee waived (5) -- -- -- -- -- --
Investment advisory fee 19 56 575 344 321 282 41
Less investment advisory fee waived (19) (31) (208) (136) (130) (115) (25)
Custodian fee 1 3 19 11 10 9 7
Transfer agent fee 24 26 40 34 34 32 13
Professional fees 1 1 13 9 8 7 2
Registration fees -- (1) 4 2 3 1 3
Distribution fees (1) 1 4 12 18 13 19 --
Printing expense -- -- 5 3 3 3 3
Amortization of deferred
organizational costs -- 1 4 4 3 3 2
Insurance and other expenses -- 1 9 3 4 3 7
-------- -------- -------- -------- -------- -------- --------
Total expenses 27 79 626 384 355 319 61
-------- -------- -------- -------- -------- -------- --------
NET INVESTMENT INCOME 133 581 1,586 1,178 535 1,446 32
-------- -------- -------- -------- -------- -------- --------
Net realized gain (loss)
on investments 16 1 6,540 2,837 764 1,009 81
-------- -------- -------- -------- -------- -------- --------
Net realized loss on foreign currency
transactions and foreign currency
contracts -- -- -- -- -- -- (16)
Net change in unrealized depreciation
on foreign currency and translation
of other assets and liabilities
denominated in foreign currency -- -- -- -- -- --
Net unrealized appreciation
of investment securities 205 1,054 15,433 9,914 6,078 6,664 473
-------- -------- -------- -------- -------- -------- --------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 354 $ 1,636 $ 23,559 $ 13,929 $ 7,377 $ 9,119 $ 570
======== ======== ======== ======== ======== ======== ========
<FN>
(1) All distribution fees are incurred at the Class B level.
(2) 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>
STATEMENT OF CHANGES IN NET ASSETS (000)
================================================================================
The Pillar Funds -- For the year ended December 31, 1995
<TABLE>
<CAPTION>
--------------------- -------------------
U.S. TREASURY PRIME OBLIGATION
SECURITIES MONEY MONEY MARKET
MARKET FUND FUND
--------------------- -------------------
1995 1994 1995 1994
---------- -------- -------- --------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 19,550 $ 14,428 $ 11,821 $ 5,065
Net realized gain (loss) on
securities sold 110 17 44 (18)
---------- -------- -------- --------
Net increase in net assets resulting
from operations 19,660 14,445 11,865 5,047
---------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (19,473) (14,405) (11,601) (5,007)
Class B (77) (23) (220) (58)
Realized capital gains:
Class A -- -- -- --
Class B -- -- -- --
---------- -------- -------- --------
Total distributions (19,550) (14,428) (11,821) (5,065)
---------- -------- -------- --------
SHARE TRANSACTIONS (ALL AT $1.00
PER SHARE):
Class A:
Shares issued 1,066,121 1,026,987 610,748 427,745
Shares issued in lieu of cash
distributions 1 1 -- --
Shares redeemed (1,067,826) (982,827) (508,503) (400,130)
---------- -------- -------- --------
Net Class A share transactions (1,704) 44,161 102,245 27,615
---------- -------- -------- --------
Class B:
Shares issued 6,412 1,996 9,612 5,071
Shares issued in lieu of cash
distributions 65 22 199 44
Shares redeemed (3,578) (2,219) (6,167) (2,210)
---------- -------- -------- --------
Net Class B share transactions 2,899 (201) 3,644 2,905
---------- -------- -------- --------
Increase/decrease in net assets from
share transactions 1,195 43,960 105,889 30,520
---------- -------- -------- --------
Total increase/decrease in net assets 1,305 43,977 105,933 30,502
---------- -------- -------- --------
NET ASSETS:
Beginning of period 465,758 421,781 160,659 130,157
---------- -------- -------- --------
NET ASSETS:
End of period $ 467,063 $465,758 $266,592 $160,659
========== ======== ======== ========
</TABLE>
44
<TABLE>
<CAPTION>
------------------- -----------------
TAX-EXEMPT U.S.TREASURY
MONEY MARKET SECURITIES PLUS
FUND MONEY MARKET FUND
------------------- -----------------
1995 1994 1995 1994
-------- -------- ------- -------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 1,896 $ 911 $ 2,995 $ 2,175
Net realized gain (loss) on
securities sold (5) 2 4 (19)
-------- -------- ------- -------
Net increase in net assets resulting
from operations 1,891 913 2,999 2,156
-------- -------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (1,764) (848) (2,995) (2,175)
Class B (132) (62) -- --
Realized capital gains:
Class A -- -- -- --
Class B -- -- -- --
-------- -------- ------- -------
Total distributions (1,896) (910) (2,995) (2,175)
-------- -------- ------- -------
SHARE TRANSACTIONS (ALL AT $1.00
PER SHARE):
Class A:
Shares issued 140,400 97,150 418,839 458,343
Shares issued in lieu of cash
distributions -- -- 2,350 1,592
Shares redeemed (114,513) (92,401) (402,797) (502,893)
-------- -------- ------- -------
Net Class A share transactions 25,887 4,749 18,392 (42,958)
-------- -------- ------- -------
Class B:
Shares issued 7,924 4,033 -- --
Shares issued in lieu of cash
distributions 112 53 -- --
Shares redeemed (5,587) (5,163) -- --
-------- -------- ------- -------
Net Class B share transactions 2,449 (1,077) -- --
-------- -------- ------- -------
Increase/decrease in net assets from
share transactions 28,336 3,672 18,392 (42,958)
-------- -------- ------- -------
Total increase/decrease in net assets 28,331 3,675 18,396 (42,977)
-------- -------- ------- -------
NET ASSETS:
Beginning of period 40,535 36,860 46,301 89,278
-------- -------- ------- -------
NET ASSETS:
End of period $ 68,866 $ 40,535 $64,697 $46,301
======== ======== ======= =======
<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.
45
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000)
===============================================================================
The Pillar Funds -- For the year ended December 31, 1995
<TABLE>
<CAPTION>
---------------------- ----------------------
SHORT-TERM FIXED
INVESTMENT INCOME
FUND FUND
---------------------- ----------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 1,741 $ 1,073 $ 6,455 $ 6,534
Net realized gain (loss) on
securities sold 43 (75) (191) 29
Net unrealized appreciation (depreciation)
of investment securities 134 (53) 11,725 (13,385)
--------- --------- --------- ---------
Net increase in net assets resulting
from operations 1,918 945 17,989 (6,822)
--------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (1,676) (1,057) (6,151) (6,173)
Class B (64) (17) (305) (360)
Realized capital gains:
Class A -- (13) -- (597)
Class B -- -- -- (36)
--------- --------- --------- ---------
Total distributions (1,740) (1,087) (6,456) (7,166)
--------- --------- --------- ---------
SHARE TRANSACTIONS:
Class A:
Shares issued 10,526 6,290 14,073 8,529
Shares issued in lieu of cash
distributions 1,642 1,054 5,297 6,469
Shares redeemed (10,885) (9,352) (13,377) (19,157)
--------- --------- --------- ---------
Net Class A share transactions 1,283 (2,008) 5,993 (4,159)
--------- --------- --------- ---------
Class B:
Shares issued 1,553 672 1,524 1,823
Shares issued in lieu of cash
distributions 58 17 197 294
Shares redeemed (343) (125) (1,977) (2,298)
--------- --------- --------- ---------
Net Class B share transactions 1,268 564 (256) (181)
--------- --------- --------- ---------
Increase (decrease) in net assets
from share transactions 2,551 (1,444) 5,737 (4,340)
--------- --------- --------- ---------
Total increase (decrease) in net
assets 2,729 (1,586) 17,270 (18,328)
--------- --------- --------- ---------
NET ASSETS:
Beginning of period 29,956 31,542 102,083 120,411
--------- --------- --------- ---------
NET ASSETS:
End of period $ 32,685 $ 29,956 $ 119,353 $ 102,083
========= ========= ========= =========
SHARES ISSUED AND REDEEMED:
Class A shares:
Issued 1,050 631 1,399 848
Issued in lieu of cash distributions 164 105 526 656
Redeemed (1,086) (938) (1,336) (1,935)
--------- --------- --------- ---------
Net Class A share transactions 128 (202) 589 (431)
--------- --------- --------- ---------
Class B shares:
Issued 154 67 149 178
Issued in lieu of cash distributions 6 2 20 30
Redeemed (34) (12) (197) (233)
--------- --------- --------- ---------
Net Class B shares 126 57 (28) (25)
--------- --------- --------- ---------
Net increase (decrease) in shares 254 (145) 561 (456)
========= ========= ========= =========
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
--------------------- ---------------------- ---------------------- --------------------
NEW JERSEY INTERMEDIATE- PENNSYLVANIA
MUNICIPAL TERM GOVERNMENT MUNICIPAL GNMA
SECURITIES FUND SECURITIES FUND SECURITIES FUND FUND
--------------------- ---------------------- ---------------------- --------------------
1995 1994 1995 1994 1995 1994 1995 1994
--------- --------- ---------- ---------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 2,036 $ 2,248 $ 1,683 $ 1,791 $ 133 $ 112 $ 581 $ 708
Net realized gain (loss) on
securities sold (59) (245) (624) (571) 16 (26) 1 (654)
Net unrealized appreciation
(depreciation) of investment
securities 3,802 (4,315) 3,243 (3,187) 205 (169) 1,054 (812)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase in net assets
resulting from operations 5,779 (2,312) 4,302 (1,967) 354 (83) 1,636 (758)
--------- --------- --------- --------- --------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (1,069) (1,174) (1,545) (1,618) (123) (100) (472) (575)
Class B (965) (1,077) (139) (172) (10) (12) (105) (137)
Realized capital gains:
Class A -- -- -- (17) -- -- -- (12)
Class B -- -- -- (2) -- -- -- (3)
--------- --------- --------- --------- --------- --------- --------- ---------
Total distributions (2,034) (2,251) (1,684) (1,809) (133) (112) (577) (727)
--------- --------- --------- --------- --------- --------- --------- ---------
SHARE TRANSACTIONS:
Class A:
Shares issued 10,887 9,207 11,820 9,375 651 299 2,519 3,392
Shares issued in lieu of cash
distributions 881 950 1,271 1,467 -- -- 325 401
Shares redeemed (5,551) (14,894) (12,889) (15,297) (242) (314) (1,935) (6,518)
--------- --------- --------- --------- --------- --------- --------- ---------
Net Class A share transactions 6,217 (4,737) 202 (4,455) 409 (15) 909 (2,725)
--------- --------- --------- --------- --------- --------- --------- ---------
Class B:
Shares issued 7,955 9,781 1,667 1,162 59 140 193 737
Shares issued in lieu of cash
distributions 783 871 112 137 8 11 68 81
Shares redeemed (5,838) (9,845) (706) (3,397) (153) (82) (554) (1,305)
--------- --------- --------- --------- --------- --------- --------- ---------
Net Class B share transactions 2,900 807 1,073 (2,098) (86) 69 (293) (487)
--------- --------- --------- --------- --------- --------- --------- ---------
Increase (decrease) in net assets
from share transactions 9,117 (3,930) 1,275 (6,553) 323 54 616 (3,212)
--------- --------- --------- --------- --------- --------- --------- ---------
Total increase (decrease) in net
assets 12,862 (8,493) 3,893 (10,329) 544 (141) 1,675 (4,697)
--------- --------- --------- --------- --------- --------- --------- ---------
NET ASSETS:
Beginning of period 41,172 49,665 28,649 38,978 3,070 3,211 8,836 13,533
--------- --------- --------- --------- --------- --------- --------- ---------
NET ASSETS:
End of period $ 54,034 $ 41,172 $ 32,542 $ 28,649 $ 3,614 $ 3,070 $ 10,511 $ 8,836
========= ========= ========= ========= ========= ========= ========= =========
SHARES ISSUED AND REDEEMED:
Class A shares:
Issued 1,033 879 1,176 924 65 30 262 352
Issued in lieu of cash
distributions 84 92 126 148 -- -- 34 43
Redeemed (528) (1,453) (1,280) (1,547) (24) (31) (205) (712)
--------- --------- --------- --------- --------- --------- --------- ---------
Net Class A share
transactions 589 (482) 22 (475) 41 (1) 91 (317)
--------- --------- --------- --------- --------- --------- --------- ---------
Class B shares:
Issued 754 934 164 117 6 14 19 77
Issued in lieu of cash
distributions 75 85 11 14 1 1 7 9
Redeemed (559) (967) (71) (347) (16) (8) (59) (144)
--------- --------- --------- --------- --------- --------- --------- ---------
Net Class B shares 270 52 104 (216) (9) 7 (33) (58)
--------- --------- --------- --------- --------- --------- --------- ---------
Net increase (decrease)
in shares 859 (430) 126 (691) 32 6 58 (375)
========= ========= ========= ========= ========= ========= ========= =========
<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.
47
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000)
================================================================================
The Pillar Funds -- For the year ended December 31, 1995
<TABLE>
<CAPTION>
------------------- --------------------
EQUITY EQUITY
VALUE INCOME
FUND FUND
-------------------- --------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 1,586 $ 1,346 $ 1,178 $ 1,243
Net realized gain (loss) on
securities sold 6,540 (483) 2,837 499
Net realized loss on foreign
currency transactions -- -- -- --
Net unrealized depreciation on
foreign currency and translation
of other assets and liabilities
in foreign currency -- -- -- --
Net unrealized depreciation of
investment securities 15,433 (5,037) 9,914 (3,625)
-------- -------- -------- --------
Net increase (decrease) in net assets
resulting from operations 23,559 (4,174) 13,929 (1,883)
-------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (1,491) (1,293) (1,011) (1,081)
Class B (95) (53) (174) (154)
Realized capital gains:
Class A (5,108) (491) (1,576) (346)
Class B (471) (24) (336) (56)
-------- -------- -------- --------
Total distributions (7,165) (1,861) (3,097) (1,637)
-------- -------- -------- --------
SHARE TRANSACTIONS:
Class A:
Shares issued 11,043 11,046 4,217 3,972
Shares issued in lieu of cash
distributions 6,427 1,758 2,481 1,372
Shares redeemed (11,758) (13,006) (6,188) (6,021)
-------- -------- -------- --------
Net Class A share transactions 5,712 (202) 510 (677)
-------- -------- -------- --------
Class B:
Shares issued 3,923 1,040 3,547 2,601
Shares issued in lieu of cash
distributions 489 58 497 204
Shares redeemed (635) (547) (1,743) (1,095)
-------- -------- -------- --------
Net Class B share transactions 3,777 551 2,301 1,710
-------- -------- -------- --------
Increase (decrease) in net assets
from share transactions 9,489 349 2,811 1,033
-------- -------- -------- --------
Total increase (decrease) in
net assets 25,883 (5,686) 13,643 (2,487)
-------- -------- -------- --------
NET ASSETS:
Beginning of period 64,438 70,124 40,171 42,658
-------- -------- -------- --------
NET ASSETS:
End of period $ 90,321 $ 64,438 $ 53,814 $ 40,171
======== ======== ======== ========
SHARES ISSUED AND REDEEMED:
Class A shares:
Issued 912 1,019 355 367
Issued in lieu of cash distributions 508 171 197 131
Redeemed (993) (1,235) (533) (559)
-------- -------- -------- --------
Net Class A share transactions 427 (45) 19 (61)
-------- -------- -------- --------
Class B shares:
Issued 313 96 289 238
Issued in lieu of cash distributions 38 6 39 19
Redeemed (52) (52) (144) (102)
-------- -------- -------- --------
Net Class B shares 299 50 184 155
-------- -------- -------- --------
Net increase (decrease) in shares 726 5 203 94
======== ======== ======== ========
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
-------------------- ------------------- --------------
MID CAP BALANCED INTERNATIONAL
VALUE GROWTH GROWTH
FUND FUND FUND (1)
-------------------- -------------------- -------------
1995 1994 1995 1994 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 535 $ 415 $ 1,446 $ 1,265 $ 32
Net realized gain (loss) on
securities sold 764 1,116 1,009 (334) 81
Net realized loss on foreign
currency transactions -- -- -- -- (16)
Net unrealized depreciation on
foreign currency and translation
of other assets and liabilities
in foreign currency -- -- -- -- --
Net unrealized depreciation of
investment securities 6,078 (5,588) 6,664 (2,694) 473
-------- -------- -------- -------- --------
Net increase (decrease) in net assets
resulting from operations 7,377 (4,057) 9,119 (1,763) 570
-------- -------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (484) (375) (1,174) (1,004) (19)
Class B (55) (36) (275) (259) (1)
Realized capital gains:
Class A (740) (670) (358) -- (19)
Class B (101) (90) (92) -- (1)
-------- -------- -------- -------- --------
Total distributions (1,380) (1,171) (1,899) (1,263) (40)
-------- -------- -------- -------- --------
SHARE TRANSACTIONS:
Class A:
Shares issued 5,976 6,073 3,566 6,221 9,881
Shares issued in lieu of cash
distributions 1,187 1,028 1,457 964 21
Shares redeemed (3,497) (4,646) (5,599) (3,625) (411)
-------- -------- -------- -------- --------
Net Class A share transactions 3,666 2,455 (576) 3,560 9,491
-------- -------- -------- -------- --------
Class B:
Shares issued 1,272 3,278 1,472 1,511 604
Shares issued in lieu of cash
distributions 154 125 357 252 2
Shares redeemed (1,076) (983) (1,534) (2,473) (16)
-------- -------- -------- -------- --------
Net Class B share transactions 350 2,420 295 (710) 590
-------- -------- -------- -------- --------
Increase (decrease) in net assets
from share transactions 4,016 4,875 (281) 2,850 10,081
-------- -------- -------- -------- --------
Total increase (decrease) in
net assets 10,013 (353) 6,939 (176) 10,611
-------- -------- -------- -------- --------
NET ASSETS:
Beginning of period 38,015 38,368 33,658 33,834 --
-------- -------- -------- -------- --------
NET ASSETS:
End of period $ 48,028 $ 38,015 $ 40,597 $ 33,658 $ 10,611
======== ======== ======== ======== ========
SHARES ISSUED AND REDEEMED:
Class A shares:
Issued 491 505 315 591 969
Issued in lieu of cash distributions 96 95 126 95 2
Redeemed (296) (406) (491) (354) (41)
-------- -------- -------- -------- --------
Net Class A share transactions 291 194 (50) 332 930
-------- -------- -------- -------- --------
Class B shares:
Issued 106 275 132 143 59
Issued in lieu of cash distributions 12 12 31 25 --
Redeemed (89) (86) (141) (242) (1)
-------- -------- -------- -------- --------
Net Class B shares 29 201 22 (74) 58
-------- -------- -------- -------- --------
Net increase (decrease) in shares 320 395 (28) 258 988
======== ======== ======== ======== ========
<FN>
(1) The International Growth Fund commenced operations on May 1, 1995. The
information presented is for the period ended December 31, 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.
49
<PAGE>
FINANCIAL HIGHLIGHTS
===============================================================================
The Pillar Funds
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)
- ---------------------------------------------------------------------------------------------------------------------------
- ------------------------
U.S. TREASURY SECURITIES
- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
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
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
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
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
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
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
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
(1) The U.S. Treasury Securities Money Market and the Prime Obligations 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.
50
<PAGE>
================================================================================
For a Share Outstanding Throughout the Year
<TABLE>
<CAPTION>
Realized and
Net Asset Unrealized Distributions Distributions Ratio of Ratio of Net
Value Net Gains or from Net from Net Asset Total Net Assets Expenses Income
Beginning Investment Losses on Investment Capital Value End Return End of to Average to Average
of Period Income Securities Income Gains of Period (DAGGER) Period (000) Net Assets Net Assets
- ------------------------------------------------------------------------------------------------------------------------------
- ---------------------
SHORT-TERM INVESTMENT
- ---------------------
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1995 $ 9.97 $0.55 $0.05 $(0.55) -- $10.02 6.19% $ 30,642 0.80% 5.52%
1994 10.01 0.35 (0.04) (0.35) -- 9.97 3.21 29,187 0.80 3.51
1993 10.01 0.29 -- (0.29) -- 10.01 2.96 31,337 0.80 2.94
1992(1) 10.00 0.27 0.03 (0.27) $(0.02) 10.01 3.47* 30,998 0.80 3.50
CLASS B
1995 $ 9.98 $0.53 $0.07 $(0.53) -- $10.05 6.13% $ 2,043 1.05% 5.27%
1994 10.03 0.33 (0.05) (0.33) -- 9.98 2.85 769 1.05 3.50
1993 10.01 0.28 0.01 (0.27) -- 10.03 2.90 205 1.05 2.09
1992(1) 10.00 0.25 0.03 (0.25) $(0.02) 10.01 3.23* 193 1.05 3.14
- ------------
FIXED INCOME
- ------------
CLASS A
1995 $ 9.44 $0.59 $1.05 $(0.59) -- $10.49 17.76% $113,509 0.80% 5.83%
1994 10.68 0.59 (1.18) (0.59) $(0.06) 9.44 (5.66) 96,558 0.80 5.91
1993 10.38 0.61 0.52 (0.61) (0.22) 10.68 11.05 113,892 0.80 5.59
1992(1) 10.00 0.49 0.44 (0.49) (0.06) 10.38 11.60* 89,701 0.80 6.24
CLASS B
1995 $ 9.44 $0.56 $1.04 $(0.56) -- $10.48 17.36% $ 5,844 1.05% 5.58%
1994 10.68 0.56 (1.18) (0.56) $(0.06) 9.44 (5.90) 5,525 1.05 5.65
1993 10.38 0.58 0.52 (0.58) (0.22) 10.68 10.76 6,519 1.05 5.24
1992(1) 10.00 0.47 0.44 (0.47) (0.06) 10.38 11.39* 1,214 1.05 5.93
- --------------------
NEW JERSEY MUNICIPAL
- --------------------
CLASS A
1995 $ 9.93 $0.47 $0.86 $(0.47) -- $10.79 13.57% $ 28,080 0.41% 4.43%
1994 10.85 0.48 (0.92) (0.48) -- 9.93 (4.12) 19,977 0.27 4.65
1993 10.29 0.50 0.56 (0.50) -- 10.85 10.48 27,064 0.20 4.57
1992(2) 10.00 0.30 0.29 (0.30) -- 10.29 9.01* 9,395 0.46 4.56
CLASS B
1995 $ 9.93 $0.44 $0.86 $(0.44) -- $10.79 13.30% $ 25,954 0.66% 4.18%
1994 10.85 0.45 (0.92) (0.45) -- 9.93 (4.35) 21,195 0.52 4.40
1993 10.29 0.46 0.56 (0.46) -- 10.85 10.09 22,061 0.45 4.34
1992(2) 10.00 0.29 0.29 (0.29) -- 10.29 8.29* 5,424 0.62 4.44
- ----------------------------
INTERMEDIATE-TERM GOVERNMENT
- ----------------------------
CLASS A
1995 $ 9.51 $0.54 $0.86 $(0.54) -- $10.37 15.00% $ 28,877 0.80% 5.33%
1994 10.53 0.51 (1.01) (0.51) $(0.01) 9.51 (4.85) 26,277 0.80 5.13
1993 10.23 0.52 0.32 (0.52) (0.02) 10.53 8.32 34,075 0.80 4.87
1992(1) 10.00 0.41 0.24 (0.41) (0.01) 10.23 7.95* 16,327 0.80 5.30
CLASS B
1995 $ 9.51 $0.51 $0.86 $(0.51) -- $10.37 14.71% $ 3,665 1.05% 5.08%
1994 10.53 0.49 (1.01) (0.49) $(0.01) 9.51 (5.09) 2,372 1.05 4.83
1993 10.24 0.49 0.31 (0.49) (0.02) 10.53 7.94 4,903 1.05 4.59
1992(1) 10.00 0.39 0.25 (0.39) (0.01) 10.24 7.86* 2,190 1.05 5.00
</TABLE>
<TABLE>
<CAPTION>
Ratio of Ratio of Net
Expenses Income
to Average to Average
Net Assets Net Assets Portfolio
(Excluding (Excluding Turnover
Waivers) Waivers) Rate
- -------------------------------------------
- ---------------------
SHORT-TERM INVESTMENT
- ---------------------
CLASS A
<S> <C> <C> <C>
1995 0.97% 5.35% 64.85%
1994 0.94 3.37 68.39
1993 0.95 2.79 81.92
1992(1) 1.01 3.29 68.15
CLASS B
1995 1.22% 5.10% 64.85%
1994 1.20 3.35 68.39
1993 1.13 2.01 81.92
1992(1) 1.26 2.93 68.15
- ------------
FIXED INCOME
- ------------
CLASS A
1995 0.91% 5.72% 35.49%
1994 0.90 5.81 15.24
1993 0.91 5.48 49.49
1992(1) 0.94 6.10 23.86
CLASS B
1995 1.16% 5.47% 35.49%
1994 1.15 5.55 15.24
1993 1.13 5.16 49.49
1992(1) 1.20 5.78 23.86
- --------------------
NEW JERSEY MUNICIPAL
- --------------------
CLASS A
1995 0.93% 3.91% 2.83%
1994 0.93 3.99 16.81
1993 1.00 3.77 23.83
1992(2) 1.22 3.80 02.23
CLASS B
1995 1.18% 3.66% 2.83%
1994 1.18 3.74 16.81
1993 1.23 3.54 23.83
1992(2) 1.39 3.67 02.23
- ----------------------------
INTERMEDIATE-TERM GOVERNMENT
- ----------------------------
CLASS A
1995 1.05% 5.08% 68.29%
1994 0.95 4.98 40.27
1993 1.00 4.67 31.69
1992(1) 1.11 4.99 12.38
CLASS B
1995 1.30% 4.83% 68.29%
1994 1.20 4.68 40.27
1993 1.23 4.41 31.69
1992(1) 1.36 4.69 12.38
<FN>
* Annualized
(DAGGER) Total Return does not reflect sales loads on Class B shares.
(1) The Short-Term Investment, Fixed Income and the Intermediate-Term Government
Securities Fund`s 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.
51
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
The Pillar Funds
For a Share Outstanding Throughout the Year
<TABLE>
<CAPTION>
Realized and
Net Asset Unrealized Distributions Distributions Ratio of Ratio of Net
Value Net Gains or from Net from Net Asset Total Net Assets Expenses Income
Beginning Investment Losses on Investment Capital Value End Return End of to Average to Average
of Period Income Securities Income Gains of Period (DAGGER) Period (000) Net Assets Net Assets
- -----------------------------------------------------------------------------------------------------------------------------
- ----------------------
PENNSYLVANIA MUNICIPAL
- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
1995 $ 9.55 $0.40 $0.68 $(0.40) -- $10.23 11.53% $ 3,345 0.80% 4.05%
1994 10.17 0.36 (0.62) (0.36) -- 9.55 (2.58) 2,734 0.80 3.67
1993(1) 10.00 0.23 0.17 (0.23) -- 10.17 6.01 2,922 0.80 3.35
CLASS B
1995 $ 9.55 $0.38 $0.67 $(0.38) -- $10.22 11.15% $ 269 1.05% 3.80%
1994 10.17 0.33 (0.62) (0.33) -- 9.55 (2.83) 336 1.05 3.42
1993(2) 9.98 0.20 0.19 (0.20) -- 10.17 6.28* 289 1.05 3.24
- ----
GNMA
- ----
CLASS A
1995 $ 8.85 $0.60 $1.09 $(0.60) -- $ 9.94 19.52% $ 8,750 0.80% 6.29%
1994 9.85 0.54 (1.00) (0.53) $(0.01) 8.85 (4.71) 6,983 0.80 5.72
1993(3) 10.00 0.34 (0.15) (0.34) -- 9.85 2.80* 10,900 0.80 4.48
CLASS B
1995 $ 8.84 $0.58 $1.08 $(0.57) -- $ 9.93 19.24% $ 1,761 1.05% 6.05%
1994 9.85 0.50 (1.00) (0.50) (0.01) 8.84 (5.05) 1,853 1.05 5.47
1993(1) 10.01 0.31 (0.16) (0.31) -- 9.85 2.31* 2,633 1.05 4.70
- ------------
EQUITY VALUE
- ------------
CLASS A
1995 $10.19 $0.25 $3.46 $(0.25) $(0.84) $12.81 36.71% $82,677 0.80% 2.08%
1994 11.10 0.21 (0.83) (0.21) (0.08) 10.19 (5.61) 61,407 0.80 1.92
1993 10.64 0.18 0.46 (0.18) -- 11.10 6.12 67,383 0.80 1.74
1992(4) 10.00 0.14 0.64 (0.14) -- 10.64 10.51* 62,116 0.80 1.82
CLASS B
1995 $10.21 $0.21 $3.47 $(0.22) $(0.84) $12.83 36.35% $ 7,644 1.05% 1.83%
1994 11.12 0.18 (0.83) (0.18) (0.08) 10.21 (5.83) 3,031 1.05 1.67
1993 10.66 0.16 0.46 (0.16) -- 11.12 5.85 2,741 1.05 1.51
1992(4) 10.00 0.09 0.67 (0.10) -- 10.66 10.35* 1,562 1.05 1.64
- -------------
EQUITY INCOME
- -------------
CLASS A
1995 $10.26 $0.31 $3.29 $(0.31) $(0.48) $13.07 35.55% $44,202 0.80% 2.61%
1994 11.17 0.32 (0.81) (0.32) (0.10) 10.26 (4.42) 34,514 0.80 2.96
1993 10.72 0.29 0.80 (0.29) (0.35) 11.17 10.27 38,237 0.80 2.65
1992(4) 10.00 0.22 0.72 (0.22) -- 10.72 12.72* 32,538 0.80 2.88
CLASS B
1995 $10.27 $0.28 $3.29 $(0.28) $(0.48) $13.08 35.21% $ 9,612 1.05% 2.36%
1994 11.17 0.29 (0.80) (0.29) (0.10) 10.27 (4.56) 5,657 1.05 2.71
1993 10.73 0.28 0.78 (0.27) (0.35) 11.17 9.94 4,421 1.05 2.42
1992(4) 10.00 0.15 0.77 (0.19) -- 10.73 12.43* 585 1.05 2.54
</TABLE>
<TABLE>
<CAPTION>
Ratio of Ratio of Net
Expenses Income
to Average to Average
Net Assets Net Assets Portfolio
(Excluding (Excluding Turnover
Waivers) Waivers) Rate
- ---------------------------------------------
- ----------------------
PENNSYLVANIA MUNICIPAL
- ----------------------
<S> <C> <C> <C>
CLASS A
1995 1.27% 3.58% 36.92%
1994 1.61 2.86 38.20
1993(1) 1.48 2.67 16.51
CLASS B
1995 1.55% 3.30% 36.92%
1994 1.92 2.55 38.20
1993(2) 1.48 2.81 16.51
- ----
GNMA
- ----
CLASS A
1995 1.13% 5.96% 9.69%
1994 0.97 5.55 102.77
1993(3) 1.08 4.20 252.73
CLASS B
1995 1.37% 5.73% 9.69%
1994 1.22 5.30 102.77
1993(1) 1.29 4.46 252.73
- ------------
EQUITY VALUE
- ------------
CLASS A
1995 1.07% 1.81% 61.88%
1994 1.06 1.66 44.98
1993 1.07 1.47 89.91
1992(4) 1.10 1.52 45.68
CLASS B
1995 1.32% 1.56% 61.88%
1994 1.31 1.41 44.98
1993 1.30 1.26 89.91
1992(4) 1.36 1.33 45.68
- -------------
EQUITY INCOME
- -------------
CLASS A
1995 1.10% 2.31% 42.97%
1994 1.08 2.68 37.76
1993 1.10 2.35 89.89
1992(4) 1.14 2.54 58.41
CLASS B
1995 1.35% 2.06% 42.97%
1994 1.33 2.43 37.76
1993 1.35 2.12 89.89
1992(4) 1.40 2.19 58.41
<FN>
* Annualized
(DAGGER) Total Return does not reflect sales loads on Class B shares.
(1) The Pennsylvania Municipal--Class A Fund and the GNMA--Class A Fund
commenced operations on May 3, 1993. Ratios for this period have been
annualized.
(2 The Pennsylvania Municipal--Class B Fund commenced operations on May 13,
1993. Ratios for this period have been annualized.
(3) The GNMA--Class B Fund commenced operations on May 5, 1993. Ratios for this
period have been annualized.
(4) The Equity Value and the Equity Income Funds commenced operations on
April 1, 1992. Ratios for this period have been annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
52
<PAGE>
================================================================================
For a Share Outstanding Throughout the Year
<TABLE>
<CAPTION>
Realized and
Net Asset Unrealized Distributions Distributions Ratio of Ratio of Net
Value Net Gains or from Net from Net Asset Total Net Assets Expenses Income
Beginning Investment Losses on Investment Capital Value End Return End of to Average to Average
of Period Income Securities Income Gains of Period (DAGGER) Period (000) Net Assets Net Assets
- -------------------------------------------------------------------------------------------------------------------------------
- ------------------
MID CAP VALUE FUND
- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
1995 $10.83 $0.15 $1.95 $(0.15) $(0.23) $12.55 19.49% $42,375 0.80% 1.28%
1994 12.32 0.12 (1.27) (0.12) (0.22) 10.83 (9.34) 33,448 0.80 1.06
1993 10.99 0.11 1.33 (0.11) -- 12.32 13.22 35,648 0.80 1.03
1992(1) 10.00 0.07 0.99 (0.07) -- 10.99 14.30* 29,507 0.80 0.98
CLASS B
1995 $10.82 $0.12 $1.94 $(0.12) $(0.23) $12.53 19.13% $ 5,653 1.05% 1.03%
1994 12.31 0.10 (1.27) (0.10) (0.22) 10.82 (9.54) 4,567 1.05 0.85
1993 10.99 0.09 1.32 (0.09) -- 12.31 12.88 2,720 1.05 0.83
1992(1) 10.00 0.05 1.00 (0.06) -- 10.99 14.08* 637 1.05 0.88
- ---------------
BALANCED GROWTH
- ---------------
CLASS A
1995 $ 9.91 $0.44 $2.27 $(0.44) $(0.13) $12.05 27.76% $32,145 0.80% 3.89%
1994 10.78 0.37 (0.86) (0.38) -- 9.91 (4.61) 26,921 0.80 3.64
1993 10.35 0.38 0.43 (0.38) -- 10.78 7.89 25,712 0.80 3.75
1992(1) 10.00 0.29 0.34 (0.28) -- 10.35 8.53* 16,899 0.80 3.88
CLASS B
1995 $ 9.92 $0.42 $2.28 $(0.42) $(0.13) $12.07 27.53% $ 8,452 1.05% 3.64%
1994 10.79 0.35 (0.87) (0.35) -- 9.92 (4.87) 6,737 1.05 3.39
1993 10.36 0.37 0.42 (0.36) -- 10.79 7.62 8,122 1.05 3.47
1992(1) 10.00 0.20 0.40 (0.24) -- 10.36 8.15* 2,990 1.05 3.59
- --------------------
INTERNATIONAL GROWTH
- --------------------
CLASS A
1995(2) $10.00 $0.03 $0.75 $(0.02) $(0.02) $10.74 7.81% $ 9,990 1.50%* 0.79%*
CLASS B
1995(3) $10.00 $0.01 $0.75 $(0.01) $(0.02) $10.73 7.64% $ 621 1.75%* 0.45%*
</TABLE>
<TABLE>
<CAPTION>
Ratio of Ratio of Net
Expenses Income
Neto Average to Average
Net Assets Net Assets Portfolio
Be(Excluding (Excluding Turnover
of Waivers) Waivers) Rate
- ---------------------------------------------
- ------------------
MID CAP VALUE FUND
- ------------------
<S> <C> <C> <C>
CLASS A
1995 1.10% 0.98% 32.96%
1994 1.08 0.78 13.82
1993 1.10 0.73 24.49
1992(1) 1.15 0.63 09.29
CLASS B
1995 1.35% 0.73% 32.96%
1994 1.33 0.57 13.82
1993 1.35 0.53 24.49
1992(1) 1.40 0.53 09.29
- ---------------
BALANCED GROWTH
- ---------------
CLASS A
1995 1.11% 3.58% 41.63%
1994 1.09 3.35 27.15
1993 1.14 3.41 63.03
1992(1) 1.20 3.48 82.76
CLASS B
1995 1.36% 3.33% 41.63%
1994 1.34 3.10 27.15
1993 1.38 3.14 63.03
1992(1) 1.45 3.19 82.76
- ------------------
INTERNATION GROWTH
- ------------------
CLASS A
1995(2) 2.11%* 0.18%* 14.32%
CLASS B
1995(3) 2.38%* (0.18)%* 14.32%
<FN>
* Annualized
(DAGGER) Total Return does not reflect sales loads on Class B shares.
(1) The Mid Cap Value and the 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.
53
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
The Pillar Funds -- December 31, 1995
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 Short-Term Investment Fund, the
Fixed Income Fund, the New Jersey Municipal Securities Fund, the
Intermediate-Term Government Securities Fund, the Pennsyl- vania Municipal
Securities Fund, the GNMA Fund, 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 Agressive Growth Fund), the Balanced Growth Fund and the
International Growth Fund ("the Funds"). 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 United Jersey 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.
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 U.S.
Treasury Securities Money Market Fund, the Prime Obligation Money Market Fund,
the Tax-Exempt Money Market Fund and the U.S. Treasury Securities Plus Money
Market Fund ("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-
54
<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 Funds.
RECLASSIFICATION--Certain reclassifications have been made to prior year
amounts to conform with current year presentation.
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 asset value. 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 asset value each day.
Subsequent to year-end, the Trust was notified of possible claims, which
are associated with inappropriate deposits made by certain shareholders in the
U.S. Treasury, 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.
55
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
The Pillar Funds -- December 31, 1995
3. ORGANIZATION COSTS AND TRANSACTIONS WITH AFFILIATES
The Trust incurred organization 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 and /or Trustees of the Trust are also officers and/or
Directors of SEI Financial Management Company (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 with
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 United Jersey Bank Investment Management Division, a division of
United Jersey 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 the Equity
Funds 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.
56
<PAGE>
================================================================================
United Jersey 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 December 31, 1995
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 -- $37,400 -- $21,853 -- $1,158
Other $2,844 4,927 $6,837 -- $1,447 --
Sales
U.S. Gov't -- 36,365 -- 20,989 -- 872
Other 4,000 1,970 1,238 -- 1,183 --
Mid
Equity Equity Cap Balanced International
Value Income Value Growth Growth
-------- -------- -------- --------- -------------
(000) (000) (000) (000) (000)
Purchases
U.S. Gov't -- -- -- $8,389 --
Other $44,327 $20,144 $15,901 6,708 $10,755
Sales
U.S. Gov't -- -- -- 7,031 --
Other 44,232 19,284 13,427 8,627 969
At December 31, 1995, 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 December 31, 1995, 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 $55 $3,114 $1,132 $520 $90 $185
Aggregate gross
unrealized loss (1) (154) (57) (82) (1) (19)
--- ------ ------ ---- --- ----
Net unrealized
gain (loss) $54 $2,960 $1,075 $438 $89 $166
Mid
Equity Equity Cap Balanced International
Value Income Value Growth Growth
-------- -------- -------- --------- -------------
(000) (000) (000) (000) (000)
Aggregate gross
unrealized gain $17,567 $10,205 $8,448 $5,730 $616
Aggregate gross
unrealized loss (460) (467) (1,347) (19) (143)
------- ------- ------ ------ ----
Net unrealized
gain (loss) $17,107 $ 9,738 $7,101 $5,711 $473
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
57
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
December 31, 1995
requirements and other regulations as those of U.S. banks.
The New Jersey Municipal 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 95.3% 33.7% -- 57.9%
Repurchase Agreements -- 31.8 -- 42.1
Municipal Securities -- -- 96.1% --
Commercial Paper -- 25.8 -- --
Other Short Term
Securities 4.7 8.7 3.9 --
Short-Term Fixed New Jersey Int.-Term
Inv. Income Muni. Govt.
---------- ------ ---------- ---------
U.S. Gov't. Securities 20.0% 73.6% 1.9% 98.6%
Repurchase Agreements -- -- -- --
AAA 9.9 3.0 62.2 --
AA 24.5 15.9 29.3 --
A 44.9 6.2 4.5 --
BBB -- -- -- --
BB -- -- -- --
NR .7 1.3 2.1 1.4
All Other -- -- -- --
Balanced PA
Growth Muni. GNMA
-------- ----- -----
U.S. Gov't. Securities 44.0% -- 94.2%
Repurchase Agreements -- -- --
AAA -- 83.0% --
AA 2.6 10.5 --
A 1.8 2.8 --
BBB -- -- --
BB -- -- --
NR 1.1 3.7 5.8
Common Stock 50.5 -- --
All Other -- -- --
8. CAPITAL LOSS CARRYFORWARDS
The capital loss carryforwards at December 31, 1995, for Federal Income Tax
purposes are as follows:
Tax-Exempt Money Market $1,752
expiring in 2000.
Tax-Exempt Money Market $4,471
expiring in 2003.
U.S. Treasury Securities plus $1,438
expiring in 2001.
U.S. Treasury Securities plus $18,663
expiring in 2002.
Short-Term Investment $29,455
expiring in 2002.
Fixed Income $291,922 expiring in 2003.
New Jersey Municipal Securities $318
expiring in 2001.
New Jersey Municipal Securities $127,146
expiring in 2002.
New Jersey Municipal Securities $180,569
expiring in 2003.
Intermediate-Term Government Securities $402,817 expiring in 2002.
Intermediate-Term Government Securities $792,812 expiring in 2003.
Pennsylvania Municipal Securities $1,763 expiring in 2002.
Pennsylvania Municipal Securities $7,946 expiring in 2003.
GNMA $291,101 expiring in 2003.
The capital loss carryforwards will be used to offset future net realized gains,
if any, and such gains so offset will not be distributed.
9. SECURITIES LENDING
The U.S. Treasury Securities Money Market Fund loaned securities to certain
brokers who paid the Fund negotiated lenders' fees. These fees are included in
interest income. The Fund receives U.S. Treasury obligations and/or cash as
collateral against the loaned securities, in an amount at least equal to 102% of
the market value of the loaned securities. At year end the U.S. Treasury
Securities Money Market Fund had no loaned securities.
58
<PAGE>
REPORT OF THE INDEPENDENT PUBLIC ACCOUNTANTS
================================================================================
To the Shareholders and Trustees of The Pillar Funds:
We have audited the accompanying statements of net assets of the U.S. Treasury
Securities Money Market, Prime Obligation Money Market, Tax-Exempt Money Market,
U. S. Treasury Securities Plus Money Market, Short-Term Investment, Fixed
Income, New Jersey Municipal Securities, Intermediate-Term Government
Securities, Pennsylvania Municipal Securities, GNMA, Equity Value, Equity
Income, Mid Cap Value, Balanced Growth, and International Growth Funds of the
Pillar Funds as of December 31, 1995, and the related statements of operations,
statements of changes in net assets, and financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
U.S. Treasury Securities Money Market, Prime Obligation Money Market, Tax-Exempt
Money Market, U. S. Treasury Securities Plus Money Market, Short-Term
Investment, Fixed Income, New Jersey Municipal Securities, Intermediate-Term
Government Securities, Pennsylvania Municipal Securities, GNMA, Equity Value,
Equity Income, Mid Cap Value, Balanced Growth, and International Growth Funds of
the Pillar Funds as of December 31, 1995, the results of their operations,
changes in their net assets and financial highlights for the periods presented,
in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.
February 22, 1996
59
<PAGE>
NOTICE TO SHAREHOLDERS OF THE PILLAR FUND (UNAUDITED)
================================================================================
December 31, 1995
Dear Pillar Shareholders:
For the fiscal year ended December 31, 1995, each Fund is designating long term
capital gains, qualifying dividends and exempt income with regard to
distributions paid during the year as follows:
<TABLE>
<CAPTION>
(A)
LONG TERM (B)
CAPITAL ORDINARY (C) (E)
GAINS INCOME TOTAL (D) TAX-
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS QUALIFYING EXEMPT
PORTFOLIO (TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS (1) INTEREST
- --------- -------------- ------------- ------------- ------------- --------
<S> <C> <C> <C> <C> <C>
U.S. Treasury Securities
MM Fund 0% 100% 100% 0% 0%
Prime Obligations MM Fund 0 100 100 0 0
Tax Exempt MM Fund 0 100 100 0 100
U.S. Treasury Securities
Plus MM Fund 0 100 100 0 0
Short-Term Investment Fund 0 100 100 0 0
Fixed Income Fund 0 100 100 0 0
New Jersey Municipal
Securities Fund 0 100 100 0 97
Intermediate-Term Government
Securities Fund 0 100 100 0 0
Pennsylvania Municipal
Securities Fund 0 100 100 0 100
GNMA Fund 0 100 100 0 0
Equity Value Fund 72 28 100 100 0
Equity Income Fund 56 44 100 100 0
Mid Cap Value Fund 33 67 100 100 0
Balanced Growth Fund 24 76 100 31 0
International Growth Fund 0 100 100 0 0
<FN>
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction.
* Items (A) and (B) are based on a percentage of the fund's total distributions.
** Items (D) and (E) are based on a percentage of ordinary income distributions
of the fund.
Please consult your tax adviser for proper treatment of this information.
</FN>
</TABLE>
60
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
ADVISOR:
[UNITED JERSEY BANK LOGO]
DI\STRIBUTOR:
SEI FINANCIAL SERVICES COMPANY
680 East Swedesford Road
Wayne, Pennsylvania 19087-1658
1-800-342-5734
PIL-F-015-05
