<PAGE>
Message From The Investment Adviser Brenton Mutual Funds
- -------------------------------------------------------------------------------
Dear Shareholders:
Since our last report six months ago, the U.S. economy has exhibited stronger-
than-expected growth. Strong job growth, rising wages, and higher consumer
confidence in combination with year-end bonuses, tax refunds, and a jump in
mortgage refinancings served to boost the economy in the fourth quarter of
1996 and into the first quarter of 1997. Estimates for first quarter real GDP
growth have in recent weeks been raised to a very solid 4.0%.
The economy is currently growing faster than the Federal Reserve would like,
and in response, the Fed decided to raise the target Fed Funds rate by 0.25%
to 5.5% on March 25, 1997. This was the first interest rate hike by the Fed in
two years! The Fed is concerned that rapid economic growth could result in
building inflationary pressures. The big question which now faces the
financial markets is whether this is the first in a series of Fed tightenings
or if one rate hike will be enough to slow the economy.
We believe the economy is currently experiencing a short-term cyclical bounce
much like what occurred during the first half of last year. Looking ahead, we
expect the economy to slow in the latter half of the year. While it may be
premature, there are signs which suggest the economy may already be slowing
from its rapid pace of the last six months. Surveys of current business
conditions have softened in the past several weeks, unemployment claims have
stopped falling and have been stable for the last two months, Business Week's
production index has recently slowed, and the U.S. dollar has been strong. In
addition, year-end bonuses are now behind us, and the pace of tax refunds has
slowed significantly from the first of the year. Also, in the past when the
Fed has raised rates over a prolonged period of time, raw industrial commodity
prices have been soaring indicating strong economic conditions. Currently, raw
industrial prices are not in a strong upward trend. They have actually been in
a sideways trading range for the last two years and more recently have been
declining. This is not suggestive of strong, sustainable growth for the
economy.
While the economy has clearly strengthened in the last six months, we do not
think it is booming. We would not be surprised to see the economy slow to a
growth rate of 2.0% to 2.5 % later in the year and for inflation to remain
under control.
INTERMEDIATE U.S. GOVERNMENT FUND
The first three months of 1997 were not kind to fixed income investors. After
a strong bond rally carried the 10 year Treasury yield to 6.04% in late
November, interest rates began rising in December and this rise in rates
accelerated during the first quarter. By quarter-end, the ten-year yield had
surged to 6.90%. To put this information into proper perspective, an investor
who bought the ten-year Treasury on November 29, 1996, at a yield of 6.04%,
would have realized an annualized total return of -11.99% between November 29
and March
SHARES OF THE FUNDS ARE NOT FDIC INSURED, NOR ARE THEY INSURED BY ANY
GOVERNMENT AGENCY. FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, BRENTON BANK OR ITS AFFILIATES. AN INVESTMENT IN
THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED.
THE BRENTON MUTUAL FUNDS ARE A FAMILY OF MUTUAL FUNDS DISTRIBUTED BY BISYS
FUND SERVICES WHICH IS INDEPENDENT OF BRENTON BANK AND IT AFFILIATES. BRENTON
BROKERAGE IS A REGISTERED BROKER-DEALER FROM WHOM SHARES OF THE BRENTON MUTUAL
FUNDS MAY BE PURCHASED.
- -------------------------------------------------------------------------------
-1-
<PAGE>
Message From The Investment Adviser Brenton Mutual Funds
- --------------------------------------------------------------------------------
31, 1997. Even the "safe" two-year Treasury produced a very nominal annualized
return of 2.12% during this period.
Despite howls of protest from many camps, Democrat as well as Republican, the
Federal Reserve appears to have embarked on a mission that will sustain our low
inflation environment for the foreseeable future. The Fed tries to be a
forward-looking body, and those who use the Consumer Price Index, for example,
as a proxy for future inflation are missing the point. The Fed apparently
believes that the strong economy that has been in evidence during the past six
months has significantly raised the risk of higher prices for goods and
services in the near future. Unless economic reports begin showing signs of
moderation, we expect to see at least one and probably two additional 25 basis
point (0.25%) increases in the overnight lending rate. At this point in time,
the odds are favorable that this will be enough "medicine" to cure any
inflationary virus that may have emerged.
We believe the Intermediate U.S. Government Fund is currently structured to
take advantage of the forecast described in the preceding paragraph. We have
adopted a "barbell" investment strategy which should work well in a time of
rising interest rates. We believe short-term and intermediate (less than five
years) rates will rise more than long-term rates. Thus, we are projecting a
flatter yield curve over the next few months. At the time of this writing, the
Fund's duration, that is the sensitivity to the interest rate movements, is
roughly equal to the duration of our benchmark index.
Our mission is unchanged. We will seek to add value to our shareholders by
purchasing bonds that we believe are undervalued or underappreciated by the
market. We do not believe the rise in interest rates is over, but we will be
watching closely for consistent signs of economic moderation in order to begin
extending our maturities.
Intermediate U.S. Government Securitites Fund
Value of a $10,000 Investment
<TABLE>
<CAPTION>
Intermediate Intermediate
U.S. Government U.S. Government Merrill Lynch -----------------------------------
Securities Fund load Securities Fund no load Government Index Since
<S> <C> <C> <C> Date 1 Year Inception
8/9/94 9,650 10,000 10,000 (08/09/94)
3/31/95 9,983 10,342 10,372 -----------------------------------
3/31/96 10,730 11,116 11,465 03/31/97 -0.13%/*/ 4.05%/*/
3/31/97 11,106 11,506 11,955 -----------------------------------
</TABLE>
The performance of the Brenton Intermediate U.S. Government Securities Fund is
measured against the Merrill Lynch 3-7 year Government Index, which is
generally representative of the performance of intermediate U.S. Government
securities. The index does not reflect the deduction of fees associated with a
mutual fund, such as investment management and fund accounting fees.
- --------------------------------------------------------------------------------
-2-
<PAGE>
Message From The Investment Adviser Brenton Mutual Funds
- --------------------------------------------------------------------------------
VALUE EQUITY FUND
We were pleased with the performance of the Fund during the 12-month period
ended March 31, 1997. During the period, the Fund's return slightly trailed the
S&P 500 but was ahead of the average equity fund. The last year has been a
difficult environment for portfolio managers to outperform the S&P 500 as
market leadership has narrowed to a small group of highly favored large
capitalization stocks. Small capitalization stocks significantly underperformed
large capitalization stocks during the period which hurt the returns for many
portfolio managers.
The stock market started out the new year with strong returns in January only
to lose much of its early gains in March when the Fed raised interest rates by
0.25%. Interest rate sensitive stocks, such as banks, insurance companies,
utilities and oils were hit the hardest by the rise in rates. Financial stocks,
while one of the leading sectors of the market last year, will most likely lag
the market averages in the near future as investors sort through the potential
for additional interest rate hikes. We would not be surprised to see cyclical
stocks, such as capital goods and retailers, perform better in the coming weeks
as investors anticipate higher interest rates.
Over the last year, investors have increasingly focused on the slowdown in the
growth rate of corporate earnings. Earnings are still growing, but at a slower
pace compared to the last several years. Corporations appear to have increased
the earnings gains achieved from downsizing and productivity enhancements.
During periods of slowing earnings growth, investors favor large capitalization
stocks which have the potential to generate very predictable and consistent
earnings growth. Going forward, we believe earnings growth will remain slower
which will favor large capitalization stocks. Our strategy of emphasizing high-
quality growth companies that have a solid record of producing consistent
earnings growth has historically worked well during this environment.
The decision by the Fed to raise interest rates, for the near-term, diminishes
the positive environment the overall stock market has been enjoying the last
two years. Stocks were on a roll during that time as interest rates were low,
corporate earnings were good and inflation was stable. Now the stock market
will be worrying about the potential for additional hikes in interest rates and
the negative consequence this may have for future corporate earnings. During
the near-term, we expect the stock market to exhibit volatility as first
quarter corporate earnings and economic reports are announced. We do not
believe the strength the economy has shown in the last six months is
sustainable and that later in the year the economy should slow.
The stock market should perform better later in the year as a slowing economy
reduces the need for additional rate hikes by the Fed. Although the growth rate
of corporate earnings is slowing, earnings should still be up 5% to 10% this
year and inflation should remain under control. These positive fundamentals
should provide support for stocks going forward.
- --------------------------------------------------------------------------------
-3-
<PAGE>
Message From The Investment Adviser Brenton Mutual Funds
- -------------------------------------------------------------------------------
Value Equity Fund
Value of a $10,000 Investment
<TABLE>
<CAPTION>
---------------------------------------
Equity Fund load Equity Fund no load S&P 500 Index Since
<S> <C> <C> <C> Date 1 Year Inception
8/9/94 9,550 10,000 10,000 (08/09/94)
3/31/95 10,435 10,925 11,142 ---------------------------------------
3/31/96 13,162 13,781 14,713 03/31/97 12.16%/*/ 17.91%/*/
3/31/97 15,457 16,184 17,623 ---------------------------------------
</TABLE>
The performance of the Brenton Value Equity Fund is measured against the
Standard & Poor's 500 Index, which is generally representative of the
performance of the stock market as a whole. The index does not reflect the
deduction of fees associated with a mutual fund, such as investment management
and fund accounting fees.
U.S. GOVERNMENT MONEY MARKET FUND(/1/)
Since the Federal Reserve increased the Fed Funds rate by 0.25% last March,
the average maturity of the Fund is now slightly shorter than normal in
anticipation of additional interest rate increases by the Fed. We expect a
further increase of 0.25% to 0.50% in rates which could occur gradually over
the next few months. As rates rise, we will look for opportunities to begin
lengthening the average maturity of the Fund to take advantage of higher
rates. We continue to maintain high credit quality in the Fund and have
invested only in direct obligations of the U.S. Government or its agencies.
Thank you for your continuing support of the Brenton Mutual Funds. We will
continue to do our best to meet your investment needs. If you have any
questions, would like a prospectus, or require any assistance, please contact
your investment representative or call 1-800-706-FUND.
Sincerely,
/s/ Douglas P. Muenzemay
- ------------------------
Douglas P. Muenzenmay
Trust Investment Officer/Portfolio Manager
Brenton Bank
FOR MORE COMPLETE INFORMATION ON ANY OF THE BRENTON MUTUAL FUNDS, INCLUDING
FEES, EXPENSES AND SALES CHARGES, PLEASE CALL 1-800-706-FUND FOR A FREE
PROSPECTUS. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING OR SENDING
MONEY.
THE INVESTMENT RETURN AND NET ASSET VALUE (NAV) WILL FLUCTUATE SO THAT AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL
COST. THE COMPOSITION OF THE FUNDS' HOLDINGS IS SUBJECT TO CHANGE.
/1/An investment in the Fund is neither insured nor guaranteed by the U.S.
Government. Yields will fluctuate, and there can be no assurance that the Fund
will be able to maintain a stable Net Asset Value (NAV) of $1 per share.
- -------------------------------------------------------------------------------
-4-
<PAGE>
TABLE OF CONTENTS
Report of Independent Auditors
Page 6
Statements of Assets and Liabilities
Page 7
Statements of Operations
Page 8
Statements of Changes in Net Assets
Page 9
Schedules of Portfolio Investments
Page 11
Notes to Financial Statements
Page 15
Financial Highlights
Page 20
-5-
<PAGE>
Report of Independent Auditors Brenton Mutual Funds
- -------------------------------------------------------------------------------
To the Shareholders and Trustees of
The Coventry Group--Brenton Mutual Funds
We have audited the accompanying statements of assets and liabilities,
including the schedules of portfolio investments of the Brenton Mutual Funds
(one of the series of portfolios constituting The Coventry Group, comprising,
respectively, Brenton U.S. Government Money Market Fund, Brenton Intermediate
U.S. Government Securities Fund, and the Brenton Value Equity Fund) as of
March 31, 1997, and the related statements of operations, the statements of
changes in net assets, and the financial highlights presented herein for each
of the respective years or periods in the period ended March 31, 1997. These
financial statements and financial highlights are the responsibility of the
Funds' 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 March 31, 1997, 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 each
of the respective portfolios constituting the Brenton Mutual Funds of The
Coventry Group as of March 31, 1997, the results of their operations, the
changes in their net assets and the financial highlights presented herein for
each of the respective years or periods in the period ended March 31, 1997, in
conformity with generally accepted accounting principles.
Ernst & Young LLP
Columbus, Ohio
May 9, 1997
- -------------------------------------------------------------------------------
-6-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1997
<TABLE>
<CAPTION>
INTERMEDIATE
U.S. GOVERNMENT U.S. GOVERNMENT VALUE
MONEY MARKET SECURITIES EQUITY
FUND FUND FUND
--------------- --------------- -----------
<S> <C> <C> <C>
ASSETS:
Investments, at value (cost
$38,923,451; $34,750,178 and
$31,596,352, respectively)...... $38,923,451 $33,915,425 $41,784,263
Interest and dividends
receivable...................... 18,295 444,678 77,855
Prepaid expenses and other
assets.......................... 477 430 1,844
----------- ----------- -----------
Total Assets................. 38,942,223 34,360,533 41,863,962
----------- ----------- -----------
LIABILITIES:
Dividends payable................ 130,439 162,573 80,937
Due to custodian................. 4,050
Payable to brokers for securities
purchased....................... 3,975,830
Accrued expenses and other
payables:
Investment advisory fees....... 4,238 13,106 25,146
Administration fees............ 1,238 1,118 1,405
Distribution and shareholder
service fees.................. 1,413 1,477 1,848
Custodian, accounting and
transfer agent fees........... 9,884 6,536 8,696
Legal and audit fees........... 14,482 13,196 15,557
Printing fees.................. 4,924 4,700 3,692
Other.......................... 92 70 23
----------- ----------- -----------
Total Liabilities............ 4,146,590 202,776 137,304
----------- ----------- -----------
NET ASSETS:
Capital.......................... 34,795,373 34,982,636 31,865,283
Undistributed (distributions in
excess of)
net investment income (loss).... 626 16,890 (6,169)
Net unrealized appreciation
(depreciation) from investments. (834,753) 10,187,911
Accumulated undistributed net
realized gains (losses) from
investment transactions......... (366) (7,016) (320,367)
----------- ----------- -----------
Net Assets................... $34,795,633 $34,157,757 $41,726,658
=========== =========== ===========
Outstanding units of beneficial
interest (shares)............... 34,795,400 3,445,205 2,820,271
=========== =========== ===========
Net asset value--redemption price
per share....................... $ 1.00 $ 9.91 $ 14.80
=========== =========== ===========
Maximum Sales Charge............. 3.50% 4.50%
----------- -----------
Maximum Offering Price per share
(100%/(100%-Maximum Sales
Charge) of net asset value
adjusted to nearest cent)....... $ 1.00(a) $ 10.27 $ 15.50
=========== =========== ===========
</TABLE>
- ------
(a) Offering price and redemption price are the same for the U.S. Government
Money Market Fund.
See notes to financial statements.
-7-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
INTERMEDIATE
U.S. GOVERNMENT U.S. GOVERNMENT
MONEY MARKET SECURITIES VALUE EQUITY
FUND FUND FUND
--------------- --------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income................... $1,654,372 $2,206,602 $
Dividend income................... 49,221 45,399 805,035
---------- ---------- ----------
Total Income.................... 1,703,593 2,252,001 805,035
---------- ---------- ----------
EXPENSES:
Investment advisory fees.......... 127,413 151,209 257,306
Administration fees............... 63,625 67,546 74,135
Distribution and shareholder
services fees.................... 159,356 169,189 185,837
Custodian and accounting fees..... 43,806 41,471 39,948
Legal and audit fees.............. 16,955 16,365 20,685
Organization costs................ 3,087 610 637
Trustees' fees and expenses....... 1,916 1,818 1,892
Transfer agent fees............... 36,321 26,928 40,061
Registration and filing fees...... 3,859 8,104 6,198
Printing costs.................... 11,065 11,837 15,857
Other............................. 1,905 1,899 1,460
---------- ---------- ----------
Total Expenses.................. 469,308 496,976 644,016
Less: Fee waivers and expense
reimbursements (223,144) (152,302) (167,305)
---------- ---------- ----------
Net Expenses.................... 246,164 344,674 476,711
---------- ---------- ----------
Net Investment Income............. 1,457,429 1,907,327 328,324
---------- ---------- ----------
REALIZED/UNREALIZED GAINS (LOSSES)
FROM INVESTMENTS:
Net realized gains (losses) from
investment transactions.......... 30 25,161 502,713
Net change in unrealized
appreciation (depreciation) from
investments...................... (814,536) 5,121,200
---------- ---------- ----------
Net realized/unrealized gains
(losses) from investments........ 30 (789,375) 5,623,913
---------- ---------- ----------
Change in net assets resulting
from operations.................. $1,457,459 $1,117,952 $5,952,237
========== ========== ==========
</TABLE>
See notes to financial statements.
-8-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE
U.S. GOVERNMENT MONEY U.S. GOVERNMENT
MARKET FUND SECURITIES FUND
--------------------------- ------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1997 1996
------------ ------------- ----------- -----------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES:
OPERATIONS:
Net investment income.. $ 1,457,429 $ 1,742,090 $ 1,907,327 $ 1,702,592
Net realized gains
(losses) from
investment
transactions.......... 30 129 25,161 52,778
Net change in
unrealized
appreciation
(depreciation) from
investments........... (814,536) (98,776)
------------ ------------- ----------- -----------
Change in net assets
resulting from
operations.............. 1,457,459 1,742,219 1,117,952 1,656,594
------------ ------------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income................ (1,457,429) (1,742,090) (1,906,249) (1,681,389)
In excess of net
investment income.....
Dividends to
shareholders from net
realized gains from
investment
transactions.......... (25,161)
In excess of net
realized gains........ (6,612)
------------ ------------- ----------- -----------
Change in net assets
from shareholder
distributions.......... (1,457,429) (1,742,090) (1,938,022) (1,681,389)
------------ ------------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares
issued................ 89,015,767 113,364,161 9,073,851 23,288,320
Dividends reinvested... 177,120 64,614 430,122 295,157
Cost of shares
redeemed.............. (89,833,623) (105,802,190) (8,916,346) (5,606,941)
------------ ------------- ----------- -----------
Change in net assets
from capital share
transactions.......... (640,736) 7,626,585 587,627 17,976,536
------------ ------------- ----------- -----------
Change in net assets... (640,706) 7,626,714 (232,443) 17,951,741
NET ASSETS:
Beginning of period.... 35,436,339 27,809,625 34,390,200 16,438,459
------------ ------------- ----------- -----------
End of period.......... $ 34,795,633 $ 35,436,339 $34,157,757 $34,390,200
============ ============= =========== ===========
SHARE TRANSACTIONS:
Issued................. 89,015,767 113,364,161 900,765 2,259,352
Reinvested............. 177,120 64,614 42,750 28,770
Redeemed............... (89,833,639) (105,802,190) (888,437) (544,042)
------------ ------------- ----------- -----------
Change in shares........ (640,752) 7,626,585 55,078 1,744,080
============ ============= =========== ===========
</TABLE>
See notes to financial statements
-9-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
VALUE EQUITY
FUND
------------------------
YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31,
1997 1996
----------- -----------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income............................... $ 328,324 $ 192,540
Net realized gains (losses) from investment
transactions....................................... 502,713 900,818
Net change in unrealized appreciation (depreciation)
from investments................................... 5,121,200 4,109,404
----------- -----------
Change in net assets resulting from operations....... 5,952,237 5,202,762
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income.......................... (328,324) (190,473)
In excess of net investment income.................. (6,955)
Dividends to shareholders from net realized gains
from investment
transactions....................................... (502,713) (1,166,653)
In excess of net realized gains..................... (200,285)
----------- -----------
Change in net assets from shareholder distributions.. (1,038,277) (1,357,126)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued......................... 12,165,965 14,541,750
Dividends reinvested................................ 700,687 860,805
Cost of shares redeemed............................. (8,406,836) (2,523,709)
----------- -----------
Change in net assets from capital share
transactions....................................... 4,459,816 12,878,846
----------- -----------
Change in net assets................................ 9,373,776 16,724,482
NET ASSETS:
Beginning of period................................. 32,352,882 15,628,400
----------- -----------
End of period....................................... $41,726,658 $32,352,882
=========== ===========
SHARE TRANSACTIONS:
Issued.............................................. 858,261 1,193,101
Reinvested.......................................... 49,747 70,242
Redeemed............................................ (586,543) (206,938)
----------- -----------
Change in shares..................................... 321,465 1,056,405
=========== ===========
</TABLE>
See notes to financial statements.
-10-
<PAGE>
THE COVENTRY GROUP
BRENTON U.S. GOVERNMENT MONEY MARKET FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
----------- ------------------------------------------------------ -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES (108.9%):
Federal Farm Credit Bank:
$ 5,000,000 5.45%*, 4/7/97........................................ $ 4,995,458
3,000,000 5.16%*, 4/10/97....................................... 2,996,130
2,000,000 5.55%*, 6/30/97....................................... 1,972,250
1,500,000 5.85%, 8/1/97......................................... 1,500,449
Federal Home Loan Bank:
11,000,000 6.45%*, 4/1/97........................................ 11,000,000
4,120,000 5.21%*, 4/3/97........................................ 4,118,807
5,000,000 5.23%*, 7/28/97....................................... 4,914,368
1,000,000 5.21%*, 9/8/97........................................ 976,844
1,500,000 5.42%*, 12/4/97....................................... 1,444,219
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY AMORTIZED
AMOUNT DESCRIPTION COST
----------- ----------------------------------------------------- -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED:
Tennessee Valley Authority:
$ 2,000,000 5.50%*, 4/24/97...................................... $ 1,993,266
2,000,000 5.51%*, 5/27/97...................................... 1,983,160
-----------
Total U.S. Government Agencies 37,894,951
-----------
INVESTMENT COMPANIES (3.0%):
1,028,500 Dreyfus Treasury Prime Money Market Portfolio........ 1,028,500
-----------
Total Investment Companies 1,028,500
-----------
Total (Cost--$38,923,451)(a) $38,923,451
===========
</TABLE>
- ------
* Effective Yield at date of purchase.
Percentages indicated are based on net assets of $34,795,633.
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
See notes to financial statements.
-11-
<PAGE>
THE COVENTRY GROUP
BRENTON INTERMEDIATE U.S. GOVERNMENT SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------------------------------- -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES (75.5%):
Federal Home Loan Bank:
$1,000,000 7.02%, 7/6/99.......................................... $ 1,010,000
1,000,000 5.97%, 11/8/99......................................... 987,170
2,000,000 6.50%, 6/5/02.......................................... 1,963,740
1,000,000 6.89%, 4/6/04.......................................... 992,170
1,000,000 7.36% 7/1/04........................................... 1,017,070
1,000,000 7.32%, 4/21/05......................................... 1,007,430
3,000,000 6.32%, 6/28/05......................................... 2,838,240
1,000,000 6.15%, 11/28/05........................................ 933,660
Federal Home Loan Mortgage Corporation:
1,500,000 6.55%, 10/2/02......................................... 1,474,395
1,982,911 7.50%, 5/1/03, Gold.................................... 1,997,783
1,000,000 6.75%, 8/1/05.......................................... 972,590
1,000,000 5.90%, 2/14/06......................................... 916,340
1,000,000 6.28%, 3/6/06.......................................... 939,460
414,424 7.00%, 5/25/06......................................... 408,046
1,246,591 6.50%, 7/1/08.......................................... 1,205,291
730,623 6.50%, 3/1/09.......................................... 706,643
1,373,256 7.00%, 11/1/10......................................... 1,352,218
2,492,655 7.50%, 11/1/17......................................... 2,464,612
1,803,799 7.50%, 12/1/25......................................... 1,771,096
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
---------- ------------------------------------------------------ -----------
<C> <S> <C>
U.S. GOVERNMENT AGENCIES, CONTINUED:
Government National Mortgage Assoc.:
$ 863,303 7.00%, 5/1/10......................................... $ 846,840
-----------
Total U.S. Government Agencies 25,804,794
-----------
U.S. TREASURY BILLS (0.7%):
250,000 5.15%, 7/17/97........................................ 246,098
-----------
Total U.S. Treasury Bills 246,098
-----------
U.S. TREASURY NOTES (18.9%):
1,000,000 6.13%, 3/31/98........................................ 1,000,710
2,000,000 6.38%, 1/15/99........................................ 2,000,220
2,500,000 6.25%, 1/31/02........................................ 2,447,275
1,000,000 7.00%, 7/15/06........................................ 1,002,610
-----------
Total U.S. Treasury Notes 6,450,815
-----------
INVESTMENT COMPANIES (4.1%):
1,413,718 Goldman Federal Portfolio Money Market Portfolio...... 1,413,718
-----------
Total Investment Companies 1,413,718
-----------
Total (Cost--$34,750,178)(a) $33,915,425
===========
</TABLE>
- ------
Percentages indicated are based on net assets of $34,157,757.
(a) Represents cost for federal income tax purposes and differs from market
value by net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation........... $ 30,650
Unrealized depreciation........... (865,403)
---------
Net unrealized depreciation....... $(834,753)
=========
</TABLE>
See notes to financial statements.
-12-
<PAGE>
THE COVENTRY GROUP
BRENTON VALUE EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (96.7%):
Aerospace/Defense (1.4%):
11,000 General Motors Corp.--Class H.......................... $ 596,750
-----------
Auto Parts (1.5%):
12,000 TRW, Inc............................................... 621,000
-----------
Banks (5.1%):
8,000 BankAmerica Corp....................................... 806,000
20,000 Barnett Banks, Inc..................................... 930,000
1,400 Wells Fargo & Co....................................... 397,775
-----------
2,133,775
-----------
Beverages--Non-alcoholic (2.5%):
9,200 Coca-Cola Co........................................... 514,050
16,700 PepsiCo, Inc........................................... 544,837
-----------
1,058,887
-----------
Beverages--Wines & Spirits (1.7%):
17,400 Anheuser-Busch Cos., Inc............................... 732,975
-----------
Capital Equipment (2.0%):
10,000 Illinois Tool Works, Inc............................... 816,250
-----------
Chemicals--Diversified (1.1%):
4,300 Du Pont (E.I.) de Nemours & Co......................... 455,800
-----------
Chemicals--Specialty (3.8%):
10,900 Great Lakes Chemical Corp.............................. 501,400
12,000 IMC Global, Inc........................................ 433,500
21,000 Sigma-Aldrich Corp..................................... 648,375
-----------
1,583,275
-----------
Computer Software (2.5%):
16,000 Electronic Data Systems Corp........................... 646,000
10,600 Oracle Corp.(b)........................................ 408,762
-----------
1,054,762
-----------
Diversified Operations (5.8%):
7,500 General Electric Co.................................... 744,375
8,100 Minnesota Mining & Manufacturing Co.................... 684,450
12,000 Varian Associates Inc.................................. 642,000
21,000 Viad Corp.............................................. 336,000
-----------
2,406,825
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Electrical Equipment (2.6%):
13,000 AMP, Inc............................................... $ 446,875
14,000 Emerson Electric Co.................................... 630,000
-----------
1,076,875
-----------
Electronic Components (2.7%):
5,000 Intel Corp............................................. 695,625
7,000 Motorola, Inc.......................................... 422,625
-----------
1,118,250
-----------
Financial Services (4.2%):
24,000 Capital One Financial Corp............................. 894,000
11,900 MGIC Investment Corp................................... 841,925
-----------
1,735,925
-----------
Food Products & Services (3.9%):
15,600 ConAgra, Inc........................................... 846,300
19,300 Sara Lee Corp.......................................... 781,650
-----------
1,627,950
-----------
Health Care--Drugs (5.8%):
12,000 American Home Products Corp............................ 720,000
15,000 Bristol Myers Squibb Co................................ 885,000
9,600 Merck & Co., Inc....................................... 808,800
-----------
2,413,800
-----------
Health Care--General Products (0.7%):
5,400 Johnson & Johnson...................................... 285,525
-----------
Health Care--Hospitals (1.6%):
19,950 Columbia/HCA Healthcare Corp........................... 670,819
-----------
Household--General Products (1.8%):
22,500 Newell Co.............................................. 753,750
-----------
Insurance (5.8%):
14,000 ReliaStar Financial Corp............................... 827,750
19,300 Safeco Corp............................................ 772,000
11,600 UNUM Corp.............................................. 846,800
-----------
2,446,550
-----------
Leisure & Recreation (1.3%):
20,000 Brunswick Corp......................................... 537,500
-----------
Non-hazardous Waste Disposal (1.6%):
21,400 WMX Technologies, Inc.................................. 655,375
-----------
</TABLE>
Continued
-13-
<PAGE>
THE COVENTRY GROUP
BRENTON VALUE EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS, CONTINUED
MARCH 31, 1997
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Office Automation & Equipment (1.3%):
9,000 Pitney Bowes, Inc...................................... $ 528,750
-----------
Oil Companies--Integrated (4.6%):
8,800 Amoco Corp............................................. 762,300
4,400 Exxon Corp............................................. 474,100
5,300 Mobil Corp............................................. 692,313
-----------
1,928,713
-----------
Oil Field Services (2.1%):
8,000 Schlumberger Ltd....................................... 858,000
-----------
Paint & Related Products (1.9%):
29,800 Sherwin-Williams Co.................................... 804,600
-----------
Paper & Related Products (2.2%):
9,400 Kimberly-Clark Corp.................................... 934,125
-----------
Restaurants (1.2%):
10,300 McDonald's Corp........................................ 486,675
-----------
Retail--Convenience Stores (1.2%):
26,800 Casey's General Stores, Inc............................ 515,900
-----------
Retail--General Merchandise (1.7%):
17,700 Costco Cos, Inc. (b)................................... 488,963
7,000 Dillard Department Stores, Inc......................... 220,500
-----------
709,463
-----------
Retail--Specialty Stores (2.5%):
3,800 Home Depot, Inc........................................ 203,300
7,000 Lowe's Cos., Inc....................................... 622,125
7,500 Toys "R" Us, Inc. (b).................................. 210,000
-----------
1,035,425
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
--------- ------------------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Soap & Cleaning Preparations (0.8%):
21,000 Dial Corp.............................................. $ 338,625
-----------
Tobacco (1.8%):
6,515 Philip Morris Cos., Inc................................ 743,524
-----------
Utilities--Electric (6.3%):
12,500 AES Corp. (b).......................................... 700,000
29,000 Boston Edison Co....................................... 761,250
26,000 Houston Industries, Inc................................ 542,750
28,800 Ohio Edison Co......................................... 608,400
-----------
2,612,400
-----------
Utilities--Gas & Pipeline (2.0%):
15,300 Sonat, Inc............................................. 833,850
-----------
Utilities--Telephone (4.6%):
14,800 GTE Corp............................................... 690,050
9,900 SBC Communications, Inc................................ 520,988
32,000 WorldCom, Inc. (b)..................................... 704,000
-----------
1,915,038
-----------
Wholesale (3.1%):
13,000 Arrow Electronics, Inc. (b)............................ 732,875
17,000 Sysco Corp............................................. 580,125
-----------
1,313,000
-----------
Total Common Stocks 40,340,706
-----------
INVESTMENT COMPANIES (3.4%):
1,443,558 Goldman Federal Money Market Portfolio................. 1,443,557
-----------
Total Investment Companies 1,443,557
-----------
Total (Cost--$31,596,352)(a) $41,784,263
===========
</TABLE>
- ------
Percentages indicated are based on net assets of $41,726,658.
(a) Represents cost for federal income tax purposes and differs from market
value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.......... $10,724,532
Unrealized depreciation.......... (536,621)
-----------
Net unrealized appreciation...... $10,187,911
===========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
-14-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
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 Brenton U.S. Government Money Market
Fund, the Brenton Intermediate U.S. Government Securities Fund, and the
Brenton Value Equity Fund, (individually, a "Fund"; collectively, the
"Funds"), a series of the Group, the Funds earned no investment income and
had no operations other than incurring organizational expenses.
The Brenton U.S. Government Money Market Fund's investment objective is to
seek current income consistent with maintaining liquidity and stability of
principal. The Fund invests exclusively in short-term U.S. Treasury bills
and notes and other short-term obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities ("U.S. Government
Obligations"). The investment objective of the Brenton Intermediate U. S.
Government Securities Fund is to seek total return consistent with the
production of current income and the preservation of capital. The Fund
invests primarily in U.S. Government Obligations and intends to maintain a
dollar-weighted average portfolio maturity of 3 to 10 years. The investment
objective of the Brenton Value Equity Fund is long-term capital
appreciation. The Fund invests primarily in a diversified portfolio of
equity securities.
The Group is authorized to issue an unlimited number of shares which are
equal units of beneficial interest with a par value of $0.01 per share.
Sales of Fund shares may be made to the general public.
2. SIGNIFICANT ACCOUNTING PRINCIPLES:
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. The policies are
in conformity with generally accepted accounting principles. The preparation
of financial statements requires management to make estimates and
assumptions that effect the reported amounts and disclosures. Actual amounts
could differ from those estimates.
SECURITIES VALUATION:
Investments of the Brenton U.S. Government Money Market Fund are valued
at either amortized cost, which approximates market value, or at original
cost which when combined with accrued interest approximates market value.
Under the amortized cost valuation method, discount or premium is
amortized on a constant basis to the maturity of the security. In
addition, the Brenton U.S. Government Money Market Fund may not (a)
purchase any instrument with a remaining maturity greater than thirteen
months unless such investment is subject to a demand feature, or (b)
maintain a dollar-weighted-average portfolio maturity which exceeds 90
days.
Continued
-15-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1997
Investments in common and preferred stocks, commercial paper, corporate
bonds, municipal bonds, U.S. Government securities and U.S. Government
agency securities of the Brenton Intermediate U.S. Government Securities
Fund and the Brenton Value Equity Fund (collectively "the variable net
asset value funds") 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 or
as determined in good faith by the investment adviser under the
supervision of the Group's Board of Trustees. The difference between the
cost and market values of investments held by the variable net asset
value funds is 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 Funds may acquire repurchase agreements from financial institutions
such as bank, brokers, or dealers that the investment adviser deems
creditworthy under guidelines approved by the Group's 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 a 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 an agreement to
repurchase is required to maintain with the Fund's custodian, another
qualified custodian or in the Federal Reserve/Treasury book-entry system,
the value of collateral held pursuant to the agreement at not less than
the repurchase price (including accrued interest). Repurchase agreements
are considered to be loans by a Fund under the 1940 Act.
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income are declared daily and paid monthly
for the U.S. Government Money Market Fund. Dividends from net investment
income are declared and paid monthly for the Intermediate U.S. Government
Securities Fund. Dividends from net investment income are declared and
paid quarterly for the Value Equity Fund. Distributable net realized
capital gains, if any, are declared and distributed at least annually for
each Fund.
Continued
-16-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1997
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, expiring
capital loss carry forwards and deferrals of certain losses.
FEDERAL INCOME TAXES:
It is the policy of each of the Funds 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 each of the Funds from all,
or substantially all, federal income taxes. For federal income tax
purposes, the Brenton U.S. Government Money Market Fund as of March 31,
1997, has capital loss carryforwards of $353 (expires in FYE 2005) which
are available to offset future capital gains.
EXPENSES:
Expenses that are directly related to one of the Funds are charged
directly to that Fund. Expenses relating to the Funds collectively are
prorated to the Funds on the basis of each Fund's relative net assets.
Other expenses for the Group are prorated to the Funds and any other
portfolios of the Group on the basis of relative net assets.
ORGANIZATION COSTS:
All expenses in connection with the Funds' organization and registration
under the 1940 Act and the Securities Act of 1933 were paid by the Funds.
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
year ended March 31, 1997 are as follows:
<TABLE>
<CAPTION>
PROCEEDS
FROM
PURCHASES SALES
----------- -----------
<S> <C> <C>
Intermediate U.S. Government Securities Fund............ $25,713,224 $27,305,937
Value Equity Fund....................................... 11,266,580 6,104,925
</TABLE>
4. RELATED PARTY TRANSACTIONS:
Investment advisory services are provided to the Group by Brenton Bank.
Under the terms of the investment advisory agreement, Brenton Bank is
entitled to receive fees computed daily based on a percentage of the
Continued
-17-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1997
average net assets of each Fund. Brenton Bank also serves as custodian to
the Funds. The Northern Trust Company serves as sub-investment adviser to
the U.S. Government Money Market Fund. For such services, the Northern Trust
Company receives an annual fee of 0.08% of the U.S. Government Money Market
Fund's average daily net assets.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"),
an Ohio Limited Partnership, and BISYS Fund Services Ohio, Inc. ("BISYS
Ohio") are subsidiaries of the BISYS Group, Inc.
BISYS, with whom certain officers and trustees of the Group are affiliated,
serves the Funds as administrator. Such officers and trustees are paid no
fees directly by the Funds for serving as officers and trustees of the
Group. Under the terms of the administration agreement, BISYS's fees are
computed daily as a percentage of the average net assets of each of the
Funds.
BISYS Ohio serves as transfer agent to the Funds. Under the terms of the
transfer agency agreement, BISYS Ohio is entitled to receive fees based upon
a specified amount per shareholder with specified minimum per portfolio
amounts and surcharges, plus certain out-of-pocket expenses. BISYS Ohio also
serves as fund accountant. Under the terms of the fund accounting agreement,
BISYS Ohio receives fees monthly at an annual rate of $30,000 for the U.S.
Government Money Market Fund, the Intermediate U.S. Government Securities
Fund, and the Value Equity Fund, plus certain out-of-pocket expenses.
The Funds have adopted a Distribution and Shareholder Services Plan in
accordance with Rule 12b-1 under the Investment Company Act of 1940,
pursuant to which the Funds are authorized to pay or reimburse BISYS, as
distributor, a periodic amount, calculated at an annual rate not to exceed
.50% of the average daily net asset value of the Funds. These fees are used
by BISYS to pay banks, including Brenton Bank, brokers, dealers and other
institutions, or to reimburse BISYS or its affiliates, for administration,
distribution and shareholder services in connection with the distribution of
Fund shares.
Continued
-18-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 1997
Fees may be voluntarily reduced to assist the Funds in maintaining
competitive expense ratios. Information regarding these transactions is as
follows for the year ended March 31, 1997:
<TABLE>
<CAPTION>
U.S. INTERMEDIATE
GOVERNMENT U.S.
MONEY GOVERNMENT VALUE
MARKET SECURITIES EQUITY
FUND FUND FUND
---------- ------------ --------
<S> <C> <C> <C>
INVESTMENT ADVISOR FEES:
Annual fee before voluntary fee reductions 0.40% 0.45% 0.69%
(percentage of average net assets)..........
Voluntary fee reductions..................... $ 79,694 NA NA
ADMINISTRATION FEES:
Annual fee (percentage of average net 0.20% 0.20% 0.20%
assets)......................................
12B-1 FEES
Annual fee before voluntary fee reductions 0.50% 0.50% 0.50%
(percentage of average net assets)..........
Voluntary fee reductions..................... $143,450 $152,302 $167,305
CUSTODIAN AND ACCOUNTING FEES:............... $ 43,806 $ 41,471 $ 39,948
TRANSFER AGENT FEES:......................... $ 36,321 $ 26,928 $ 40,061
</TABLE>
5.FEDERAL INCOME TAX INFORMATION (UNAUDITED):
Under current tax law, capital losses realized after October 31 may be
deferred and treated as occurring on the first day of the following fiscal
year. The U.S. Government Money Market Fund, The Intermediate U.S.
Government Securities Fund, and The Value Equity Fund had deferred losses of
$13, $7,016, and $320,367 respectively, which will be treated as arising on
the first day of the fiscal year ending March 31, 1998.
During the year ended March 31, 1997, the following Portfolios declared
long-term capital gain distributions in the following amounts:
<TABLE>
<CAPTION>
FUND AMOUNT
---- --------
<S> <C>
Intermediate U.S. Government Securities Fund $ 10,262
Value Equity Fund $703,998
</TABLE>
For the taxable year ended March 31, 1997, 79.41% of income dividends paid
by the Brenton Value Equity Fund qualify for the dividends received
deduction available to corporations.
-19-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. GOVERNMENT INTERMEDIATE U.S. GOVERNMENT
MONEY MARKET FUND SECURITIES FUND
----------------------------- -----------------------------
YEAR YEAR AUGUST 9, YEAR YEAR AUGUST 9,
ENDED ENDED 1994 TO ENDED ENDED 1994 TO
MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31, MARCH 31,
1997 1996 1995 (A) 1997 1996 1995 (A)
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 1.00 $ 1.00 $ 1.00 $ 10.14 $ 9.99 $ 10.00
------- ------- ------- ------- ------- -------
INVESTMENT ACTIVITIES
Net investment income.. 0.046 0.050 0.028 0.57 0.59 0.35
Net realized and
unrealized gains
(losses) from
investments........... -- -- -- (0.22) 0.15 (0.02)
------- ------- ------- ------- ------- -------
Total from Investment
Activities........... 0.046 0.050 0.028 0.35 0.74 0.33
------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net investment income.. (0.046) (0.050) (0.028) (0.57) (0.59) (0.34)
Net realized gains from
investments........... -- -- -- (0.01) -- --
------- ------- ------- ------- ------- -------
Total Distributions... (0.046) (0.050) 0.028 (0.58) (0.59) (0.34)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 1.00 $ 1.00 $ 1.00 $ 9.91 $ 10.14 $ 9.99
======= ======= ======= ======= ======= =======
Total Return (excludes
sales charge)........... 4.67% 5.12% 2.84%(b) 3.51% 7.48% 3.42%(b)
RATIOS/SUPPLEMENTARY
DATA:
Net Assets at end of
period (000).......... $34,796 $35,436 $27,810 $34,158 $34,390 $16,438
Ratio of expenses to
average net assets.... 0.77% 0.75% 0.97%(c) 1.02% 1.07% 1.53%(c)
Ratio of net investment
income to average net
assets................ 4.57% 4.99% 4.37%(c) 5.64% 5.82% 5.71%(c)
Ratio of expenses to
average net assets*... 1.47% 1.46% 1.66%(c) 1.47% 1.55% 2.03%(c)
Ratio of net investment
income to average net
assets*............... 3.87% 4.28% 3.68%(c) 5.19% 5.34% 5.21%(c)
Portfolio Turnover..... -- -- -- 78.95% 30.85% 20.69%
</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.
-20-
<PAGE>
THE COVENTRY GROUP
BRENTON MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
VALUE EQUITY
FUND
-------------------------------
YEAR YEAR AUGUST 9,
ENDED ENDED 1994 TO
MARCH 31, MARCH 31, MARCH 31,
1997 1996 1995 (A)
--------- --------- ---------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 12.95 $ 10.83 $ 10.00
------- ------- -------
INVESTMENT ACTIVITIES
Net investment income...................... 0.13 0.10 0.09
Net realized and unrealized gains (losses)
from investments.......................... 2.11 2.70 0.83
------- ------- -------
Total from Investment Activities.......... 2.24 2.80 0.92
------- ------- -------
DISTRIBUTIONS
Net investment income...................... (0.13) (0.10) (0.09)
Net realized gains from investments........ (0.19) (0.58) --
In excess of net realized gains from
investments............................... (0.07)
------- ------- -------
Total Distributions....................... (0.39) (0.68) (0.09)
------- ------- -------
NET ASSET VALUE, END OF PERIOD.............. $ 14.80 $ 12.95 $ 10.83
======= ======= =======
Total Return (excludes sales charge)........ 17.44% 26.13% 9.25%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).......... $41,727 $32,353 $15,628
Ratio of expenses to average net assets.... 1.28% 1.45% 1.80%(c)
Ratio of net investment income to average
net assets................................ 0.88% 0.83% 1.39%(c)
Ratio of expenses to average net assets*... 1.73% 1.92% 2.30%(c)
Ratio of net investment income to average
net assets*............................... 0.43% 0.36% 0.89%(c)
Portfolio Turnover......................... 17.15% 43.80% 18.30%
Average commission rate paid............... $0.0824(d) -- --
</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.
(d) Represents the total dollar amount of commissions paid on portfolio
transactions divided by total number of portfolio shares purchased and
sold for which commissions were charged. Disclosure is not required for
periods prior to the year ended March 31, 1997.
See notes to financial statements.
-21-
<PAGE>
INVESTMENT ADVISER
Brenton Bank
400 Locust Street
Des Moines, Iowa
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
Ernst & Young LLP
10 West Broad Street
Suite 2300
Columbus, Ohio 43215
[LOGO OF BRENTON
MUTUAL FUNDS APPEARS HERE]
BRENTON BANK
Investment Adviser
ANNUAL REPORT
TO
SHAREHOLDERS
March 31, 1997
