<PAGE>
The Shelby Fund
- -------------------------------------------------------------------------------
Dear Shareholder:
The Shelby Fund had an outstanding third quarter, returning 19.75%. This
compares very favorably to returns of 7.95% and 9.81% for the S&P 500 and the
Russell 2000 indexes respectively. For the six month period ending September
30, 1995, the fund returned 36.85% while the S&P 500 returned 18.27% and the
Russell 2000 posted a 19.88% gain. For the first nine months of 1995, the fund
returned 42.02% versus 29.79% for the S&P 500 and 25.74% for the Russell 2000.
On a trailing twelve month basis, the fund has returned 44.98% versus 29.76%
for the S&P 500 and 23.42% for the Russell 2000. According to the American
Banker, the third quarter return of 19.75% was the best of any bank sponsored
mutual fund in the country.
Much of the fund's return for the third quarter was attributable to its
positions in the technology and financial sectors. The fund's largest gains
came from Intel warrants, Meridian Data, Diamond Multimedia and Maxim
Integrated Products, just to name a few. Going into the final quarter of 1995,
we have been repositioning the holdings within the technology area. We are
moving away from companies which are more commodity oriented, such as those
players in the SRAM or DRAM arena, and emphasizing companies in sectors where
gross margin pressure is less likely. Software services, networking and
specialty semiconductor companies would be examples of industries where we are
focusing.
Now that we are full force into October, conventional wisdom is that the
technology sector has reached a cyclical peak. While we believe that all boats
will not be taken up with the tide, we feel this move in technology stocks is
secular and not cyclical. The telecommunications cycle has yet to really get
under way in earnest. If Washington will deliver a telecom bill, this cycle
could really accelerate, dwarfing the PC cycle. Given the current trend in
interest rates, we are still very constructive within the technology sector.
Finally, it is our feeling that this correction we are currently experiencing
has been a self-fulfilling prophecy from the media and can be traced to the
uncertainty surrounding Washington's inability to come up with a budget
accord. Mr. Greenspan has been held hostage by this ordeal and has been unable
to lower rates for fear of devaluing the dollar. If this uncertainty can be
put to rest, a significant decrease in short term rates could occur as the
dollar strengthens on a concerted effort by Washington to cut spending and
lower the deficit. Contrary to popular opinion, earnings have been pretty
good. If this scenario comes together, we think the names which have performed
so well for us, could be significantly higher over the next six to twelve
months.
/s/ B. Anthony Weber /s/ Darrell Wells
B. Anthony Weber Darrell Wells
Investment Advisor Investment Advisor
- -------------------------------------------------------------------------------
-1-
<PAGE>
The Shelby Fund
- -------------------------------------------------------------------------------
The performance of the Fund is measured against the Standard & Poor's 500
Index, an unmanaged index generally representative of the U.S. stock market,
and the Russell 2000 Index, an index of small cap stocks. These indices do not
reflect the deduction of expenses associated with a mutual fund, such as
investment management and fund accounting fees. However, the Fund's
performance reflects the deduction of the fees for these value-added services.
Performance data represent past performance and are not predictive of future
performance. Investment return and the principal value of an investment in the
Fund will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost. The composition of the Fund's holdings
is subject to change.
For more complete information, including charges and expenses, call 1-800-774-
3529 for a prospectus, which you should read carefully before you invest or
send money. Shares are distributed by BISYS Fund Services.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, SHELBY COUNTY TRUST BANK OR ITS AFFILIATES, AND SHARES ARE NOT
FEDERALLY INSURED BY THE FDIC OR ANY OTHER AGENCY. AN INVESTMENT IN MUTUAL
FUND SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
- -------------------------------------------------------------------------------
-2-
<PAGE>
TABLE OF CONTENTS
Statement of Assets and Liabilities
Page 4
Statement of Operations
Page 5
Statements of Changes in Net Assets
Page 6
Schedule of Portfolio Investments
Page 7
Notes to Financial Statements
Page 9
Financial Highlights
Page 13
-3-
<PAGE>
THE COVENTRY GROUP
THE SHELBY FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995
(UNUADITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value............................................. $84,045,931
Repurchase agreements............................................. 2,638,066
-----------
86,683,997
Interest receivable............................................... 843
Receivable from brokers for investments sold...................... 3,757,462
Unamortized organization costs.................................... 19,378
-----------
Total Assets.................................................. 90,461,680
-----------
LIABILITIES:
Payable to brokers for investments purchased...................... 509,958
Accrued expenses and other payables:
Investment advisory fees........................................ 72,553
Administration fees............................................. 3,691
Custodian, accounting, and transfer agent fees.................. 2,328
Legal and audit fees............................................ 11,040
Other........................................................... 9,175
-----------
Total Liabilities............................................. 608,745
-----------
NET ASSETS:
Capital........................................................... 60,181,543
Distributions in excess of net investment income.................. (306,166)
Net unrealized appreciation from investments...................... 15,729,500
Accumulated undistributed net realized gains from investment
transactions...................................................... 14,248,058
-----------
Net Assets.................................................... $89,852,935
===========
Outstanding units of beneficial interest (shares)................. 5,974,959
===========
Net asset value--offering and redemption price per share.......... $ 15.04
===========
Investments, at cost.............................................. $70,954,497
===========
</TABLE>
See notes to financial statements.
-4-
<PAGE>
THE COVENTRY GROUP
THE SHELBY FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income.................................................... $ 107,193
Dividend income.................................................... 97,347
-----------
Total Income..................................................... 204,540
-----------
EXPENSES:
Investment advisory fees........................................... 377,360
Administration fees................................................ 75,472
Custodian and accounting fees...................................... 20,866
Legal and audit fees............................................... 8,601
Organization costs................................................. 12,696
Trustees' fees..................................................... 1,578
Transfer agent fees................................................ 6,543
Registration and filing fees....................................... 5,148
Printing costs..................................................... 9,200
Other.............................................................. 1,716
Expenses waived by adviser and administrator....................... (19,306)
-----------
Total Expenses................................................... 499,874
-----------
Net investment income.............................................. (295,334)
-----------
REALIZED/UNREALIZED GAINS FROM INVESTMENTS:
Net realized gains from investment transactions.................... 14,917,901
Net change in unrealized appreciation from investments............. 9,311,926
-----------
Net realized/unrealized gains from investments..................... 24,229,827
-----------
Change in net assets resulting from operations..................... $23,934,493
===========
</TABLE>
See notes to financial statements.
-5-
<PAGE>
THE COVENTRY GROUP
THE SHELBY FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED JULY 1, 1994 TO
SEPTEMBER 30, 1995 MARCH 31, 1995 (A)
------------------ ------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES: (UNAUDITED)
OPERATIONS:
Net investment income (loss)............ $ (295,334) $ 333,953
Net realized gains (losses) from
investment transactions................ 14,917,901 (388,642)
Net change in unrealized appreciation
from investments....................... 9,311,926 6,417,574
----------- -----------
Change in net assets resulting from
operations............................... 23,934,493 6,362,885
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income.............. (344,785)
From net realized gains from investment
transactions............................ (281,201)
----------- -----------
Change in net assets from shareholder
distributions............................ (625,986)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............. 6,827,613 63,316,773
Dividends reinvested.................... 625,986
Cost of shares redeemed................. (5,066,011) (5,522,818)
----------- -----------
Change in net assets from share
transactions............................ 1,761,602 58,419,941
----------- -----------
Change in net assets..................... 25,696,095 64,156,840
NET ASSETS:
Beginning of period..................... 64,156,840
----------- -----------
End of period........................... $89,852,935 $64,156,840
=========== ===========
SHARE TRANSACTIONS:
Issued.................................. 516,285 6,303,107
Reinvested.............................. 60,624
Redeemed................................ (377,763) (527,294)
----------- -----------
Change in shares......................... 138,522 5,836,437
=========== ===========
</TABLE>
- ------
(a) Period from commencement of operations.
See notes to financial statements.
-6-
<PAGE>
THE COVENTRY GROUP
THE SHELBY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (93.5%):
Airlines (2.4%):
54,000 Valuejet Airlines, Inc. (b)............................ $ 1,761,750
36,200 World Corp., Inc. (b).................................. 438,925
-----------
2,200,675
-----------
Banks (2.5%):
38,200 BankAmerica Corp....................................... 2,287,225
-----------
Banks--Money Centers (5.3%):
36,000 Chemical Banking Corp.................................. 2,191,500
36,000 Citicorp............................................... 2,547,000
-----------
4,738,500
-----------
Biotechnology (0.7%):
34,300 Northfield Labs (b).................................... 634,550
-----------
Brokerage Firms & Security Dealers (3.0%):
95,200 Charles Schwab Corp.................................... 2,665,600
-----------
Computer Communication Equipment (3.1%):
52,800 Bay Networks (b)....................................... 2,818,200
-----------
Drilling Oil & Gas Wells (1.0%):
124,000 Global Marine, Inc. (b)................................ 883,500
-----------
Electronic Components (4.2%):
25,150 CP Clare Corp. (b)..................................... 641,325
53,000 Kemet Corp. (b)........................................ 1,815,250
95,700 Lasersight, Inc. (b)................................... 1,327,838
-----------
3,784,413
-----------
Engineering, Accounting Management (3.2%):
101,500 Medaphis Corp. (b)..................................... 2,842,000
-----------
Fabrics (0.4%):
14,800 Westpoint Stevens, Inc. (b)............................ 318,200
-----------
Financial Services (2.3%):
5,000 M.S. Financial, Inc. (b)............................... 57,500
44,900 PMT Services, Inc. (b)................................. 1,083,212
14,000 Sirrom Capital Corp.................................... 253,750
29,100 WFS Financial, Inc. (b)................................ 662,025
-----------
2,056,487
-----------
Leisure--Recreation (2.6%):
58,100 Grand Casinos, Inc. (b)................................ 2,360,312
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Lodging/Hotel (1.8%):
56,900 La Quinta Motor Inn.................................... $ 1,593,200
-----------
Machine Tools (1.3%):
14,700 KLA Instruments Corp. (b).............................. 1,179,675
-----------
Machinery (7.3%):
177,800 Genus, Inc. (b)........................................ 2,778,125
69,400 Kulicke & Soffa Industries (b)......................... 2,533,100
31,300 PRI Automation, Inc. (b)............................... 1,283,300
-----------
6,594,525
-----------
Measuring & Controlling Devices (2.4%):
49,000 Tencor Instruments (b)................................. 2,168,250
-----------
Medical Services--Hospital, Management, &
Nursing (0.3%):
6,000 American Oncology Resources,
Inc. (b).............................................. 258,000
500 Med Partners, Inc. (b)................................. 15,750
-----------
273,750
-----------
Paper Mills (1.4%):
73,200 Abitibi Price, Inc..................................... 1,271,850
-----------
Petroleum Products--Wholesale (3.8%):
153,000 Barrett Resources Corp. (b)............................ 3,442,500
-----------
Pharmaceuticals (0.6%):
23,300 Neurogen Corp. (b)..................................... 518,425
-----------
Photographic Equipment & Supplies (1.6%):
34,100 Ultratech Stepper, Inc. (b)............................ 1,440,725
-----------
Plastic Products (1.3%):
62,400 Applied Extrusion Technologies,
Inc. (b).............................................. 1,146,600
-----------
Prepackaged Software (0.6%):
15,200 Hummingbird Communications,
Inc. (b).............................................. 566,200
-----------
Radio, TV, Broadcasting, Communication
Equipment (2.9%):
45,500 Microdyne Corp. (b).................................... 1,154,562
65,700 Tekelec (b)............................................ 1,478,250
-----------
2,632,812
-----------
</TABLE>
Continued
-7-
<PAGE>
THE COVENTRY GROUP
THE SHELBY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Restaurants (4.8%):
242,200 Landry's Seafood Restaurants (b)....................... $ 4,359,600
-----------
Retail Specialty (1.8%):
52,600 Books A Million (b).................................... 927,075
47,200 Zale Corp. (b)......................................... 654,900
-----------
1,581,975
-----------
Semiconductors (14.9%):
43,600 Altera Corp. (b)....................................... 2,719,550
5,000 Information Storage Devices (b)........................ 113,125
21,600 Linear Technology...................................... 896,400
32,600 Maxim Integrated Products, Inc. (b).................... 2,412,400
4,000 S3, Inc. (b)........................................... 139,500
39,000 Tower Semiconductors Ltd. (b).......................... 1,267,500
130,000 Uniphase Corp. (b)..................................... 4,582,500
36,300 VLSI Technology (b).................................... 1,243,275
-----------
13,374,250
-----------
Shoes, Leather Goods & Clothing (0.4%):
10,800 Just For Feet, Inc. (b)................................ 332,100
-----------
Software & Computer Services (12.8%):
92,900 Diamond Multimedia (b)................................. 2,996,025
31,800 Discreet Logic, Inc. (b)............................... 1,749,000
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Software & Computer Services, continued:
1,000 HNC Software, Inc. (b)................................ $ 26,250
208,750 Meridian Data, Inc. (b)............................... 2,113,594
70,300 NetManage (b)......................................... 1,669,625
24,300 Parametric Technology Corp. (b)....................... 1,494,450
36,300 System Software Association........................... 1,456,538
-----------
11,505,482
-----------
Technology (0.1%):
6,000 ON Technology Corp. (b)............................... 103,500
-----------
Telecommunication (0.9%):
26,200 Pronet, Inc. (b)...................................... 763,075
-----------
Telephone & Telegraph (1.8%):
29,100 StrataCom, Inc. (b)................................... 1,607,775
-----------
Total Common Stocks 84,045,931
-----------
Total Investments, at Value 84,045,931
-----------
REPURCHASE AGREEMENTS (2.9%):
2,638,066 Fifth Third Bank, 5.75%, 10/2/95
(Collateralized by 2,737,000 Federal
National Mortgage Assoc., 5.70%,
2/25/03 market value--$2,691,668).................... 2,638,066
-----------
Total Repurchase Agreements 2,638,066
-----------
Total (Cost--$70,954,497) (a) $86,683,997
===========
</TABLE>
- --------
Percentages are based on net assets of $89,852,935.
(a) Represents cost for federal income tax purposes and differs from value by
net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.......... $16,332,613
Unrealized depreciation.......... (603,113)
-----------
Net unrealized appreciation...... $15,729,500
===========
</TABLE>
(b) Non-income producing securities.
See notes to financial statements.
-8-
<PAGE>
THE COVENTRY GROUP
THE SHELBY FUND
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(UNAUDITED)
1. ORGANIZATION:
The Coventry Group (the "Group") was organized on January 8, 1992 as a
Massachusetts business trust, and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. Between the date of organization and the date
of commencement of operations of The Shelby Fund (the "Fund"), a series of
the Group, the Fund earned no investment income and had no operations other
than incurring organizational expenses.
The Fund is authorized to issue an unlimited number of shares which are
units of beneficial interest with a par value of $0.01 per share. Sale of
shares of the Fund may be made to the general public.
2. SIGNIFICANT ACCOUNTING PRINCIPLES:
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
SECURITIES VALUATION:
Investments in common and preferred stocks, commercial paper, corporate
bonds, U.S. Government securities and U.S. Government agency securities
of The Shelby Fund are valued at their market values determined on the
basis of the latest available bid quotation in the principal market
(closing sales prices if the principal market is an exchange) in which
such securities are normally traded. Investments in investment companies
are valued at their respective net asset values as reported by such
companies. Securities, including restricted securities, for which market
quotations are not readily available, are valued at fair market value by
the investment adviser under the supervision of the Group's Board of
Trustees. The differences between the cost and market values of
investments held by the Fund are reflected as either unrealized
appreciation or depreciation.
SECURITY TRANSACTIONS AND RELATED INCOME:
Security transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the
accrual basis and includes, where applicable, the pro rata amortization
of premium or discount. Dividend income is recorded on the ex-dividend
date. Gains or losses realized on sales of securities are determined by
comparing the identified cost of the security lot sold with the net sales
proceeds.
REPURCHASE AGREEMENTS:
The Fund may acquire repurchase agreements from financial institutions
such as banks and broker dealers which the investment adviser, Shelby
County Trust Bank, deems creditworthy under guidelines approved
Continued
-9-
<PAGE>
THE COVENTRY GROUP
THE SHELBY FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1995
(UNAUDITED)
by the Board of Trustees, subject to the seller's agreement to repurchase
such securities at a mutually agreed-upon date and price. The repurchase
price generally equals the price paid by the Fund plus interest
negotiated on the basis of current short-term rates, which may be more or
less than the rate on the underlying portfolio securities. The seller,
under a repurchase agreement, is required to maintain the value of
collateral held pursuant to the agreement at not less than the repurchase
price (including accrued interest). Securities subject to repurchase
agreements are held by the Fund's custodian or another qualified
custodian or in the Federal Reserve/Treasury book-entry system.
Repurchase agreements are considered to be loans by the Fund under the
1940 Act.
OPTIONS TRANSACTIONS:
The Fund enters into options transactions only as a hedge against
fluctuations in the value of securities which the Fund holds or intends
to purchase.
When the Fund writes a covered call or put option, an amount equal to the
net premium received is included in the Fund's statement of assets and
liabilities as a liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option. If an
option expires on its stipulated expiration date or if the Fund enters
into a closing purchase transaction, a gain or loss is realized. If a
written call option is exercised, a gain or loss is realized for the sale
of the underlying security and the proceeds from the sale are increased
by the premium originally received. If a written put option is exercised,
the cost of the security acquired is decreased by the premium originally
received.
When the Fund purchases a call or put option, an amount equal to the
premium paid is included in the Fund's statement of assets and
liabilities as an investment, and is subsequently marked-to-market to
reflect the current market value of the option. If an option expires on
the stipulated expiration date or if the Fund enters into a closing sale
transaction, a gain or loss is realized. If the Fund exercises a call
option, the cost of the security acquired is increased by the premium
paid for the call. If the Fund exercises a put option, a gain or loss is
realized from the sale of the underlying security, and the proceeds from
such sale are decreased by the premium originally paid. Written and
purchased options are non-income producing securities.
During the period ended September 30, 1995, the Fund entered no options
transactions.
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income are declared and paid quarterly and
distributable net realized capital gains, if any, are declared and
distributed at least annually for the Fund.
Dividends from net investment income and from net realized capital gains
are determined in accordance with income tax regulations which may differ
from generally accepted accounting principles. These differences are
primarily due to differing treatments for organization costs and
deferrals of certain losses.
Continued
-10-
<PAGE>
THE COVENTRY GROUP
THE SHELBY FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1995
(UNAUDITED)
FEDERAL INCOME TAXES:
It is the policy of the Fund to qualify as a regulated investment company
by complying with the provisions available to certain investment
companies, as defined in applicable sections of the Internal Revenue
Code, and to make distributions of net investment income and net realized
capital gains sufficient to relieve it from all, or substantially all,
Federal income taxes.
OTHER:
Expenses that are directly related to the Fund are charged directly to
the Fund. Expenses relating to the Group are prorated to all the
investment portfolios of the Group, including the Fund, on the basis of
each fund's relative net assets.
ORGANIZATION COSTS:
All expenses in connection with the Fund's organization and registration
under the 1940 Act and the Securities Act of 1933 were paid by the Fund.
Such expenses are being amortized over a period of two years commencing
with the date of the initial public offering.
3. PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
six months ended September 30, 1995 are $103,715,935 and $103,637,707,
respectively.
4. RELATED PARTY TRANSACTIONS:
Investment advisory services are provided to the Fund by Shelby County Trust
Bank. Under the terms of the investment advisory agreement, Shelby County
Trust Bank is entitled to receive fees computed daily based on a percentage
of the average net assets of the Fund. SMC Capital, Inc. is the sub-
investment adviser for the Fund.
The Winsbury Company Limited Partnership d/b/a The Winsbury Company
("Winsbury") is an Ohio limited partnership. The sole general partner of
Winsbury is BISYS Fund Services, Inc. The sole limited partner of Winsbury
is WC Subsidiary Corporation. BISYS Fund Services, Inc., BISYS Fund Services
Ohio, Inc., and WC Subsidiary Corporation are all subsidiaries of The BISYS
Group, Inc. On October 10, 1995, Winsbury changed its name to BISYS Fund
Services Limited Partnership d/b/a BISYS Fund Services.
Winsbury, with whom certain officers and trustees of the Group are
affiliated, serves the Fund as administrator. Such officers and trustees are
paid no fees directly by the Fund for serving as officers and trustees of
the Group. Under the terms of the administration agreement, Winsbury's fees
are computed daily as a percentage of the average net assets of the Fund.
Continued
-11-
<PAGE>
THE COVENTRY GROUP
THE SHELBY FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SEPTEMBER 30, 1995
(UNAUDITED)
BISYS Fund Services Ohio, Inc. (the "Company"), serves the Fund as Transfer
Agent and Fund Accountant. Under the terms of the Transfer Agent and Fund
Accountant Agreements, the Company's fees are computed on the basis of the
number of shareholders and average net assets, respectively.
Fees may be voluntarily reduced to assist the Fund in maintaining
competitive expense ratios.
Information regarding these transactions is as follows for the six months
ended September 30, 1995:
<TABLE>
<S> <C>
INVESTMENT ADVISORY FEES:
Annual fee before voluntary fee reductions (percentage of average
net assets)........................................................ 1.00%
Voluntary fee reductions............................................ $ 381
ADMINISTRATION FEES:
Annual fee before voluntary fee reductions (percentage of average
net assets)........................................................ 0.20%
Voluntary fee reductions............................................ $18,925
TRANSFER AGENT & FUND ACCOUNTANT FEES:.............................. $22,979
</TABLE>
-12-
<PAGE>
THE COVENTRY GROUP
THE SHELBY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED JULY 1, 1994 TO
SEPTEMBER 30, 1995 MARCH 31, 1995 (A)
------------------ ------------------
(UNAUDITED)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD..... $ 10.99 $ 10.00
------- -------
INVESTMENT ACTIVITIES:
Net investment income (loss)............ (0.05) 0.06
Net realized and unrealized gains from
investments............................. 4.10 1.04
------- -------
Total from Investment Activities....... 4.05 1.10
------- -------
DISTRIBUTIONS:
Net investment income................... (0.06)
Net realized gains...................... (0.05)
------- -------
Total Distributions.................... (0.11)
------- -------
NET ASSET VALUE, END OF PERIOD........... $ 15.04 $ 10.99
======= =======
Total Return............................. 39.68% (b) 11.04%(b)
RATIOS/SUPPLEMENTAL DATA
Net Assets at end of period (000)....... $89,853 $64,157
Ratio of expenses to average net assets. 1.32% (c) 1.41%(c)
Ratio of net investment income to
average net assets..................... (0.78%)(c) 0.74%(c)
Ratio of expenses to average net
assets*................................ 1.38% (c) 1.46%(c)
Ratio of net investment income to
average net assets*.................... (0.83%)(c) 0.69%(c)
Portfolio turnover...................... 145.77% 101.86%
</TABLE>
- ------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratios would have been as indicated.
(a) Period from commencement of operations.
(b) Not annualized.
(c) Annualized.
See notes to financial statements.
-13-
<PAGE>
INVESTMENT ADVISER
Shelby County Trust Bank
P.O. Box 249
Shelbyville, Kentucky 40066
SUB-INVESTMENT ADVISER
SMC Capital, Inc.
4350 Brownsboro Rd.
Suite 310
Louisville, KY 40207
ADMINISTRATOR AND DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
LEGAL COUNSEL
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005
AUDITORS
Arthur Andersen LLP
2300 Meidinger Tower
Louisville Galleria
Louisville, KY 40202
[LOGO of The Shelby Fund]
SHELBY COUNTY TRUST BANK
INVESTMENT ADVISER
SMC CAPITAL, INC.
SUB-INVESTMENT ADVISER
SEMI-ANNUAL REPORT
TO
SHAREHOLDERS
SEPTEMBER 30, 1995
BISYS FUND SERVICES
3435 STELZER ROAD
COLUMBUS, OHIO 43219
