<PAGE> 1
LETTER FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
- --------------------------------------------------------------------------------
Dear Investor:
We are pleased to present this report for the 12-month period ended March 31,
2000. Heavy volatility in the stock market and rising yields in the bond market
characterized the period. Strong economic growth led to fears of inflation, and
the Federal Reserve Board (the "Fed") during the period raised the federal funds
rate five times-each time by one quarter of a percentage point. The economy
nonetheless continued to grow strongly, fueled by increased productivity and
strong consumer spending.
The Dow Jones Industrial Average(1) was very volatile during the period, peaking
at 11,723 in January, and then falling to 9,796 in early March before recovering
to end the period at 10,922. The technology-heavy NASDAQ Composite Index(2)
climbed precipitously during most of the period, breaking 5,000 on March 10. The
NASDAQ then fell sharply, and ended the period at 4,572.
STOCK MARKET DIVERGENCE
Investors for most of the year poured money into stocks of Internet companies
and other technology firms. That phenomenon boosted valuations on those
companies to unprecedented levels. The shift toward technology drew money out of
market sectors such as financial services, retail and manufacturing. That trend
reversed during the last three weeks of the period, as investors became
concerned about the valuations of technology stocks and rotated back into "old
economy" sectors.
Large-capitalization stocks outperformed small-and mid-cap stocks during most of
the period. Small-caps rallied in the second half of the year, but that rally
was driven by a small number of technology companies and did not reflect a major
recovery in the sector as a whole. Growth stocks significantly outperformed
value stocks during the period.
Bond yields rose throughout the period. The Fed's rate hikes caused investors to
sell bonds, especially short- and intermediate-term issues. That environment led
to an unusual inverted yield curve, in which yields on some intermediate-term
bonds were higher than yields on long-term bonds.
LOOKING AHEAD
The economy should continue its strong growth in the short term, causing the Fed
to raise short-term interest rates further. That said, the economy currently is
in its longest expansion in history, and we believe its growth will probably
pause at some point in the next several years. Likewise, the stock market has
produced unusually high returns during the past several years. Those gains are
likely to revert to levels closer to a historical norm. The divergence between
technology stocks and other sectors has created opportunities for investors who
focus on fundamentals and value. Such opportunities abound among small- and
mid-cap stocks, which have underperformed large-caps for several years. Our
Funds are well-positioned to take advantage of an upturn in those sectors.
Bonds will likely be hurt in the short term, as the Fed raises rates
aggressively to slow the economy and prevent inflation. An increasingly tight
monetary policy could put upward pressure on bond yields, especially among
shorter-term issues. However, we believe investors will regain confidence in the
bond market if future rate hikes ward off inflation. In that case, yields should
decline to a more modest level-boosting long-term returns in the bond markets.
(1)The Dow Jones Industrial Average is a price-weighted average based on the
price movements of 30 blue-chip stocks.
(2)NASDAQ Composite Index is a market capitalization price-only index that
tracks the performance of domestic common stocks traded on the regular NASDAQ
market, as well as National market System-traded foreign common stocks and
American Depositary Receipts.
- --------------------------------------------------------------------------------
-1-
<PAGE> 2
LETTER FROM THE INVESTMENT ADVISER 1st Source Monogram Funds
- --------------------------------------------------------------------------------
A portfolio diversified among different sectors of the stock market will provide
the best mix of return and risk management over the long term. The Monogram
family offers funds that let shareholders build diversified portfolios to meet
long-term financial goals-no matter what the stock markets do in the short term.
IN CLOSING. . .
Your Fund managers in the following pages discuss the factors that influenced
their investment decisions during the past year and their outlooks for their
Funds in the months to come. You will also find detailed financial information
and a schedule of investments for each Fund. We encourage you to read this
material closely.
Thanks for your continued confidence in us. We look forward to providing you
with superior investment management services in the months and years to come. If
you have any questions or require assistance, please do not hesitate to contact
your account representative or to call the Monogram Funds directly at
1-800-766-8938.
Sincerely,
Ralph C. Shive, CFA
Brian A. Bythrow, CFA
Paul W. Gifford, CFA
Kevin A. Carey
Bruno Riboni
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-2-
<PAGE> 3
1st Source Monogram Funds
- --------------------------------------------------------------------------------
INCOME EQUITY FUND
RALPH C. SHIVE, CFA
Q. HOW DID THE INCOME EQUITY FUND PERFORM RELATIVE TO ITS INDEX DURING THE
12-MONTH PERIOD THROUGH MARCH 31, 2000?
A. The Fund's total return (without the sales load) was 11.35%. The Russell
1000 Value Index produced a total return of 6.34%, and the Lipper Equity
Income Funds Average returned 4.24%.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
A. We did have exposure to technology securities (many of which were purchased
years ago) which we believed were a good value relative to the industry.
They carried the investment load, while the total portfolio maintained a
gross yield of about 3%. Most of the stocks in the Fund's portfolio were
relatively stagnant. Financial stocks such as shares of banks and insurance
companies were down. Retail stocks, utility stocks, REITs (real estate
investment trusts) and manufacturing stocks also performed poorly. The
energy sector helped the Fund's performance over the past 12 months.
The price-to-earnings (P/Es) ratios of many high-quality stocks declined
while the P/Es of Internet-related companies with no track record expanded
wildly. We continue to find inexpensive shares of good companies.
Q. HOW DID YOU APPLY YOUR INVESTMENT STRATEGY DURING THE PERIOD?
A. We maintained our value style, but we recognized the market's on-going
infatuation with technology stocks. We held shares of some technology
companies trading at relatively high P/Es, including Hewlett-Packard
(2.56%), Dallas Semiconductor (2.03%) and Montana Power (3.02%). We also
added exposure to convertible bonds or convertible preferred securities of
technology firms such as Integrated Device Technologies (2.32%) and Lernout
& Hauspie (1.63%).(1)
Q. WHAT IS YOUR SIX-MONTH OUTLOOK ON THE STOCK MARKET?
A. The value style has been out of favor for almost two years and is due for a
comeback. In particular, valuations between the technology sector and the
rest of the market are extremely skewed. We feel the increased volatility in
the Internet sector may encourage investors to focus on stocks that offer
safer prospects. In that case, money will begin to flow from expensive
stocks of untested companies to reasonably priced stocks of solid
corporations.
We do have some near-term concerns about rising interest rates and potential
inflation. Nevertheless, the U.S. and global economies remain quite robust
and should create an environment for higher corporate earnings.
(1) The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
- --------------------------------------------------------------------------------
-3-
<PAGE> 4
1st Source Monogram Funds
- --------------------------------------------------------------------------------
Growth of a $10,000 Investment
[INCOME EQUITY FUND GRAPH]
<TABLE>
<CAPTION>
LIPPER EQUITY INCOME
FUNDS AVERAGE RUSSELL 1000 VALUE INDEX INCOME EQUITY FUND*
-------------------- ------------------------ -------------------
<S> <C> <C> <C>
3/90 10000 10000 9508
3/91 10794 10704 9877
3/92 12191 11925 11045
3/93 14241 14719 13443
3/94 14673 15300 15369
3/95 16217 17016 15963
3/96 20537 22715 19693
3/97 23690 26820 22596
3/98 32639 39471 30974
3/99 32627 41461 30413
3/00 33380 44088 33863
</TABLE>
* Reflects 5.00% sales charge
Average Annual Total Return
as of 3/31/00
<TABLE>
<CAPTION>
1 5 10
YEAR YEAR YEAR
<S> <C> <C> <C>
Without Sales Load 11.35% 16.23% 13.54%
With Sales Load* 5.77% 15.04% 12.97%
</TABLE>
The chart represents a historical investment of $10,000 in the 1st Source
Monogram Income Equity Fund from 3/90 to 3/00, and represents the reinvestment
of dividends and capital gains in the Fund.
The quoted performance of the 1st Source Monogram Income Equity Fund includes
performance of certain collective trust fund ("Commingled") accounts advised by
1st Source Bank that had investment objectives and policies substantially
similar to those of the Fund, for periods dating back to 11/30/85, and prior to
the mutual fund's commencement of operations on 9/25/96, as adjusted to reflect
the expenses associated with the mutual fund. The Commingled accounts were not
registered with the Securities & Exchange Commission and, therefore, were not
subject to the investment restrictions imposed by law on registered mutual
funds. If the Commingled accounts had been registered, the Commingled accounts'
performance may have been adversely affected.
The Russell 1000 Value Index is an unmanaged index that contains 1000 securities
with a less-than-average growth orientation. Securities in this index generally
have lower price-to-book and price-to-earnings ratios, higher dividend yields
and lower forecasted growth values than the Growth Universe. This index is
unmanaged and does not reflect the deduction of fees associated with a mutual
fund, such as investment management and fund accounting fees. The performance of
the Fund reflects the deduction of fees for these value-added services.
The Lipper Equity Income Average consists of funds that seek relatively high
current income and growth of income through investing 60% or more of its
portfolio in equities. Lipper is an independent mutual fund performance monitor
whose results are based on total return and do not reflect a sales charge.
Investors cannot invest directly in an index, although they can invest in its
underlying securities.
The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
- --------------------------------------------------------------------------------
-4-
<PAGE> 5
1st Source Monogram Funds
- --------------------------------------------------------------------------------
INCOME FUND
PAUL GIFFORD, CFA
BRUNO RIBONI
Q. HOW DID THE FUND PERFORM DURING THE PERIOD?
A. Paul Gifford:
The Fund posted a total return of 0.96% (without the sales load) during the
12-month period ended March 31, 2000. That compares to a 2.09% total return
for the Fund's benchmark, the Lehman Brothers Intermediate
Government/Corporate Bond Index.
Q. WHAT WERE CONDITIONS LIKE IN THE BOND MARKET DURING THE PERIOD?
A. Bruno Riboni:
The economy experienced extremely strong economic growth, spurred by strong
consumer spending and productivity gains in the workplace. Those factors
caused investors to fear that the Fed would raise short-term interest rates
to head off potential rising inflation. In fact, the Fed did raise rates
five times during the period. The economy continued to grow rapidly despite
those rate increases.
A. Paul Gifford:
Bonds performed poorly in that environment. Yields on short-term Treasuries
rose by 150 basis points, while yields on long-term Treasures rose by 30
basis points. Long-term bonds held up better than shorter-term issues and
even rallied somewhat toward the end of the period. That outperformance in
part reflected investors' views that inflationary concerns would fade,
allowing long-term rates to fall. Furthermore, the U.S. Treasury department
began buying back longer-term securities, which reduced the supply of such
issues and helped support their prices.
Q. HOW DID YOU POSITION THE FUND IN THAT ENVIRONMENT?
A. Paul Gifford:
It appeared at the beginning of the period that interest rates might fall,
so we positioned the Fund with a longer duration than that of its benchmark
index. That decision dampened the Fund's performance, since rates rose
during much of the period. We reduced the Fund's duration later in the
period, trimming it to a level slightly shorter than the duration of the
index.
A. Bruno Riboni:
We also maintained the Fund's strong credit quality. The average credit
rating of the Fund's portfolio was very high, at AA. All of the Fund's
corporate holdings were rated A or higher. Instead, the Fund benefited from
its 50% allocation to U.S. Treasury securities, which outperformed agency
and corporate issues.(1)
Q. WHAT IS YOUR OUTLOOK FOR THE ECONOMY AND THE BOND MARKET GOING FORWARD?
A. Bruno Riboni:
We believe that heavy consumer spending and continued investments in
technology and other productivity enhancements by corporations will fuel
strong economic growth during the coming months. In that environment, we
anticipate that the Fed will continue to raise short-term interest rates in
an effort to prevent rising inflation. In fact, we may see the Fed increase
rates more aggressively than they have in the past, given that the last five
rate increases have done little to cool the economy.
A. Paul Gifford:
The overall bond market will probably not perform especially well in that
environment. Therefore, until we see a positive sign for bonds we will
position the Fund with a short to neutral duration relative to its
benchmark. We also will look to increase the Fund's position in U.S.
Government agency securities. Such issues offer attractive yields without
additional duration risk. We will continue to invest in high-quality, liquid
issues, as lower-quality bonds still do not offer extra yield to compensate
for their additional risk.
(1) The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
- --------------------------------------------------------------------------------
-5-
<PAGE> 6
1st Source Monogram Funds
- --------------------------------------------------------------------------------
Growth of a $10,000 Investment
[INCOME FUND GRAPH]
<TABLE>
<CAPTION>
LEHMAN INCOME FUND*
BROTHERS|INTERMEDIATE|GOV'T/CORPORATE|BOND ------------
INDEX
------------------------------------------
<S> <C> <C>
3/90 10000.00 9601.00
3/91 11208.00 10553.00
3/92 12417.00 11751.00
3/93 13963.00 13118.00
3/94 14306.00 13472.00
3/95 14944.00 13917.00
3/96 16372.00 15223.00
3/97 17159.00 15791.00
3/98 18818.00 17250.00
3/99 20052.00 18103.00
3/00 20468.00 18277.00
</TABLE>
* Reflects 4.00% sales charge
Average Annual Total Return
as of 3/31/00
<TABLE>
<CAPTION>
1 YEAR 5 YEAR 10 YEAR
<S> <C> <C> <C>
Without Sales Load 0.96% 5.60% 6.65%
With Sales Load* -3.11% 4.74% 6.22%
</TABLE>
The chart represents a historical investment of $10,000 in the 1st Source
Monogram Income Fund from 3/90 to 3/00, and represents the reinvestment of
dividends and capital gains in the Fund.
The quoted performance of the 1st Source Monogram Income Fund includes
performance of certain collective trust fund ("Commingled") accounts advised by
1st Source Bank that had investment objectives and policies substantially
similar to those of the Fund, for periods dating back to 6/30/85, and prior to
the mutual fund's commencement of operations on 9/24/96, as adjusted to reflect
the expenses associated with the mutual fund. The Commingled accounts were not
registered with the Securities & Exchange Commission and, therefore, were not
subject to the investment restrictions imposed by law on registered mutual
funds. If the Commingled accounts had been registered, the Commingled accounts'
performance may have been adversely affected.
The Lehman Brothers Intermediate Government/Corporate Bond Index is an unmanaged
index considered to be representative of the performance of government and
corporate bonds with maturities of less than ten years. This index is unmanaged
and does not reflect the deduction of fees associated with a mutual fund, such
as investment management and fund accounting fees. The performance of the Fund
reflects the deduction of fees for these value-added services.
Investors cannot invest directly in an index, although they can invest in its
underlying securities.
The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
- --------------------------------------------------------------------------------
-6-
<PAGE> 7
1st Source Monogram Funds
- --------------------------------------------------------------------------------
SPECIAL EQUITY FUND
BRIAN A. BYTHROW, CFA
Q. HOW DID THE SPECIAL EQUITY FUND PERFORM DURING THE 12 MONTHS THROUGH MARCH
31, 2000?
A. The Fund produced a total return of 50.11% (without the sales load). The
Fund's benchmark index, the Russell 2000, posted a total return of 37.29%.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
A. The Fund's management team aims to find reasonably priced shares of
companies with above-average growth rates. This approach eliminates most of
the high-priced biotechnology and Internet companies. The Fund thus
struggled during the first six months of the recent period when shares of
these companies were strong. However, the Fund outperformed its index later
in the period as investors shifted their assets from shares of Internet
companies to stocks of companies that posted earnings.
Q. HOW DID YOU APPLY YOUR INVESTMENT STRATEGY DURING THIS PERIOD?
A. The Fund invested relatively heavily in communications and technology
stocks, including shares of semiconductor companies and electronic contract
manufacturers. For example, contract manufacturer Flextronics International
(1.81% of the Fund's portfolio) benefited as large technology companies such
as Cisco and Hewlett-Packard continued to outsource their manufacturing.
Meanwhile, popular new handheld electronic products created growing demand
for semiconductors and chips. That was good news for companies such as Amkor
Technology (1.17%), International Rectifier (1.12%) and MKS Instruments
(1.11%).(1)
The Fund held a large position in the oil services sector, which is heading
into the sweet part of its cycle. Oil service companies such as Key Energy
Services (1.71%) and Hanover Compressor (0.63%) helped fuel the Fund's
outperformance. Shares of health care companies, including Biovale (1.14%),
also helped the Fund's total return.(1)
We took opportunities to sell names whose valuations became excessive
relative to their growth rates. This helped the Fund outperform its
benchmark as many of the high-priced stocks have since corrected rather
substantially. We also held an underweight position in shares of financial
companies, which helped the fund since most of these stocks went down during
the period.
Q. WHAT IS YOUR OUTLOOK FOR SMALL COMPANY STOCKS IN THE SIX MONTHS AHEAD?
A. We think investors will continue to shift money from high-priced Internet
stocks to shares of fast-growing companies with genuine earnings. In our
opinion, monies will move from technology stocks to sectors such as business
services, oil and education. We look for companies with annual earnings
growth of 20% or greater.(1)
(1) The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
- --------------------------------------------------------------------------------
-7-
<PAGE> 8
1st Source Monogram Funds
- --------------------------------------------------------------------------------
Growth of a $10,000 Investment
[SPECIAL EQUITY FUND GRAPH]
<TABLE>
<CAPTION>
SPECIAL EQUITY FUND* RUSSELL 2000 INDEX 3
-------------------- --------------------
<S> <C> <C>
3/90 9492.00 10000.00
3/91 10660.00 10679.00
3/92 13122.00 12924.00
3/93 14340.00 14844.00
3/94 16168.00 16477.00
3/95 16523.00 17384.00
3/96 22716.00 22434.00
3/97 22232.00 23579.00
3/98 27309.00 33486.00
3/99 24427.00 28042.00
3/00 36667.00 38500.00
</TABLE>
* Reflects 5.00% sales charge
Average Annual Total Return
as of 3/31/00
<TABLE>
<CAPTION>
1 5 10
YEAR YEAR YEAR
<S> <C> <C> <C>
Without Sales Load 50.11% 17.28% 14.47%
With Sales Load* 42.65% 16.10% 13.87%
</TABLE>
The chart represents a historical investment of $10,000 in the 1st Source
Monogram Special Equity Fund from 3/90 to 3/00, and represents the reinvestment
of dividends and capital gains in the Fund.
The quoted performance of the 1st Source Monogram Special Equity Fund includes
performance of certain collective trust fund ("Commingled") accounts advised by
1st Source Bank that had investment objectives and policies substantially
similar to those of the Fund, for periods dating back to 11/30/85, and prior to
the mutual fund's commencement of operations on 9/20/96, as adjusted to reflect
the expenses associated with the mutual fund. The Commingled accounts were not
registered with the Securities & Exchange Commission and, therefore, were not
subject to the investment restrictions imposed by law on registered mutual
funds. If the Commingled accounts had been registered, the Commingled accounts'
performance may have been adversely affected.
The Russell 2000 Index is an unmanaged index that represents the performance of
domestically traded common stocks of small to mid-sized companies. This index is
unmanaged and does not reflect the deduction of fees associated with a mutual
fund, such as investment management and fund accounting fees. The performance of
the Fund reflects the deduction of fees for these value-added services.
Investors cannot invest directly in an index, although they can invest in its
underlying securities.
The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
- --------------------------------------------------------------------------------
-8-
<PAGE> 9
1st Source Monogram Funds
- --------------------------------------------------------------------------------
DIVERSIFIED EQUITY FUND
BRIAN BYTHROW, CFA
KEVIN CAREY
Q. HOW DID THE DIVERSIFIED EQUITY FUND PERFORM DURING THE PERIOD?
A. Brian Bythrow:
The Fund's total return was 19.60% (without the sales load) for the 12-month
period through March 31, 2000. The Fund's benchmark, the S&P 500 Stock
Index, gained 17.93%.
Q. WHAT FACTORS AFFECTED THE FUND'S PERFORMANCE?
A. Brian Bythrow:
Three outside managers ran the Fund during the nine months through December
1999. They provided a blend of three management styles: growth, value and
rotation. The Fund during those nine months underperformed its index.
In-house managers here at 1st Source Bank now manage the portfolio. Our aim
is to improve the Fund's returns and reduce its expenses. We have changed
the Fund's investment style, focusing on growth-oriented stocks. The Fund
has since outperformed its benchmark by seven percentage points.
A. Kevin Carey:
The major factor affecting the Fund's performance during the first quarter
was strong returns by technology stocks, especially large-cap shares of
technology and telecommunications firms.
Q. HOW DID YOU APPLY YOUR INVESTMENT STRATEGY DURING THE PERIOD?
A. Brian Bythrow:
We look for large-cap growth companies with above-average growth rates. We
invest in companies with average sales and earnings growth rates higher than
15%. We like to find expanding companies that have not been recognized by
the market, as well as stocks that have been somewhat out of favor. We look
for companies with reasonable price-to-earnings ratios that have room to
move higher. For that reason, the Fund's portfolio does not include many
Internet stocks. The Fund owns America Online (0.89% of the Fund's
portfolio) but not shares of popular Internet stocks such as Amazon.com,
eBay, Verisign or CMGI.(1)
A. Kevin Carey:
We look for stable growth companies, including leading companies with large
market shares and powerful franchises. Stocks we added to the portfolio
during the period included Dell (0.90%), Citigroup (1.95%), Wells Fargo
(0.65%), Lucent (1.44%), MCI Worldcom (1.44%), SBC Communications (1.39%),
SCI Systems (0.71%), Kimberly Clark (0.37%), Schwab (1.28%), UPS (0.77%),
and Williams Companies (0.58%).(1)
Q. WHAT IS YOUR SIX-MONTH OUTLOOK FOR THE MARKET?
A. Brian Bythrow:
We think the market will use this time to digest some of the high valuations
out there. Many stocks on the NASDAQ have unrealistically high P/E
multiples. Meanwhile, we believe the Fed will help keep a lid on some of
these stocks by raising short-term interest rates. Investors will likely
shift some money toward basic growth and service companies. The Fund is well
represented in those sectors.
A. Kevin Carey:
We will work hard to maintain low turnover. This approach goes back to our
basic strategy: buy shares of good companies when the stocks are reasonably
priced and hold them through a strong earnings and revenue growth stage.
(1) The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE FOR FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
- --------------------------------------------------------------------------------
-9-
<PAGE> 10
1st Source Monogram Funds
- --------------------------------------------------------------------------------
Growth of a $10,000 Investment
[DIVERSIFIED EQUITY FUND GRAPH]
<TABLE>
<CAPTION>
DIVERSIFIED EQUITY FUND* S&P 500 STOCK INDEX
------------------------ -------------------
<S> <C> <C>
3/90 9510.00 10000.00
3/91 11002.00 11438.00
3/92 12431.00 12702.00
3/93 14030.00 14636.00
3/94 14414.00 14848.00
3/95 15693.00 17161.00
3/96 20085.00 22660.00
3/97 22433.00 27142.00
3/98 31863.00 40197.00
3/99 32631.00 47617.00
3/00 39029.00 56162.00
</TABLE>
* Reflects 5.00% sales charge
Average Annual Total Return
as of 3/31/00
<TABLE>
<CAPTION>
1 5 10
YEAR YEAR YEAR
<S> <C> <C> <C>
Without Sales Load 19.60% 19.99% 15.17%
With Sales Load* 13.65% 18.75% 14.59%
</TABLE>
The chart represents a historical investment of $10,000 in the 1st Source
Monogram Diversified Equity Fund from 3/90 to 3/00, and represents the
reinvestment of dividends and capital gains in the Fund.
The quoted performance of the 1st Source Monogram Diversified Equity Fund
includes performance of certain collective trust fund ("Commingled") accounts
advised by 1st Source Bank that had investment objectives and policies
substantially similar to those of the Fund, for periods dating back to 6/30/85,
and prior to the mutual fund's commencement of operations on 9/23/96, as
adjusted to reflect the expenses associated with the mutual fund. The Commingled
accounts were not registered with the Securities & Exchange Commission and,
therefore, were not subject to the investment restrictions imposed by law on
registered mutual funds. If the Commingled accounts had been registered, the
Commingled accounts' performance may have been adversely affected.
The S&P 500 Stock Index is an unmanaged index that generally reflects the
performance of the U.S. stock market as a whole. This index is unmanaged and
does not reflect the deduction of fees associated with a mutual fund, such as
investment management and fund accounting fees. The performance of the Fund
reflects the deduction of fees for these value-added services. Investors cannot
invest directly in an index, although they can invest in the underlying
securities.
Investors cannot invest directly in an index, although they can invest in its
underlying securities.
The Fund's portfolio composition is subject to change.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE INVESTMENT RETURN AND
NET ASSET VALUE PER SHARE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
- --------------------------------------------------------------------------------
-10-
<PAGE> 11
TABLE OF CONTENTS
Statements of Assets and Liabilities
PAGE 12
Statements of Operations
PAGE 13
Statements of Changes in Net Assets
PAGE 14
Schedules of Portfolio Investments
PAGE 16
Notes to Financial Statements
PAGE 26
Financial Highlights
PAGE 32
Report of Independent Accountants
PAGE 36
-11-
<PAGE> 12
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1999
<TABLE>
<CAPTION>
INCOME DIVERSIFIED SPECIAL
EQUITY EQUITY EQUITY INCOME
FUND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (cost $43,263,767;
$56,788,289; $18,287,035; and $58,774,586
respectively)................................... $46,636,348 $75,272,759 $24,684,635 $56,103,861
Repurchase agreements, at cost.................... -- 475,291 2,525,131 877,757
----------- ----------- ----------- -----------
Total Investments............................. 46,636,348 75,748,050 27,209,766 56,981,618
----------- ----------- ----------- -----------
Interest and dividends receivable................. 94,622 44,181 18,725 1,064,017
Receivable for capital shares issued.............. 147,906 199,433 127,591 94,097
Receivable for investments sold................... 942,132 -- 1,149,289 --
Unamortized organization costs.................... 3,749 6,423 3,582 5,405
Prepaid expenses and other assets................. 610 -- 475 943
----------- ----------- ----------- -----------
Total Assets.................................. 47,825,367 75,998,087 28,509,428 58,146,080
----------- ----------- ----------- -----------
LIABILITIES:
Payable to custodian.............................. 107,973 -- -- --
Payable for investments purchased................. 283,953 -- 1,204,223 --
Payable for capital shares redeemed............... 412,793 308,670 339,463 776,815
Accrued expenses and other payables:
Investment advisory fees........................ 30,345 53,111 18,943 26,890
Administration fees............................. 8,988 15,197 5,593 11,666
Other........................................... 14,110 33,653 9,336 19,754
----------- ----------- ----------- -----------
Total Liabilities............................. 858,162 410,631 1,577,558 835,125
----------- ----------- ----------- -----------
Net Assets.................................... $46,967,205 $75,587,456 $26,931,870 $57,310,955
=========== =========== =========== ===========
NET ASSETS:
Capital........................................... $41,516,783 $56,379,219 $15,869,489 $61,797,182
Undistributed (distributions in excess of) net
investment income............................... 44,651 (691) (544) 12,052
Undistributed (distributions in excess of) net
realized gains (losses) on futures and
investments..................................... 2,033,190 724,458 4,665,325 (1,827,554)
Unrealized appreciation (depreciation) on
investments..................................... 3,372,581 18,484,470 6,397,600 (2,670,725)
----------- ----------- ----------- -----------
Net Assets.................................... $46,967,205 $75,587,456 $26,931,870 $57,310,955
=========== =========== =========== ===========
Outstanding units of beneficial
interest (shares)............................... 4,359,919 6,674,650 1,954,144 6,018,644
=========== =========== =========== ===========
Net asset value -- redemption price per share..... $ 10.77 $ 11.32 $ 13.78 $ 9.52
=========== =========== =========== ===========
Maximum Sales Charge.............................. 5.00% 5.00% 5.00% 4.00%
=========== =========== =========== ===========
Maximum Offering Price (NAV/(1-Maximum Sales
Charge) of net asset value adjusted to the
nearest cent) per share......................... $ 11.34 $ 11.92 $ 14.51 $ 9.92
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
-12-
<PAGE> 13
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
INCOME DIVERSIFIED SPECIAL
EQUITY EQUITY EQUITY INCOME
FUND FUND FUND FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income.......................... $ 433,330 $ 132,792 $ 220,477 $ 4,135,202
Dividend income.......................... 1,184,979 702,132 118,861 --
Foreign tax withholding.................. (2,857) -- (964) --
----------- ----------- ----------- -----------
Total Income........................ 1,615,452 834,924 338,374 4,135,202
----------- ----------- ----------- -----------
EXPENSES:
Investment advisory fees................. 384,922 789,233 219,355 345,026
Administration fees...................... 96,231 159,441 54,839 125,465
12b-1 fees............................... 120,266 199,242 68,523 156,768
Accounting fees.......................... 19,113 29,351 13,840 21,621
Custodian fees........................... 8,853 27,680 8,658 7,021
Organization fees........................ 2,702 4,566 2,563 3,858
Transfer agent fees...................... 23,173 27,814 21,257 17,323
Trustees' fees and expenses.............. 5,208 9,771 3,004 7,069
Other fees............................... 28,842 47,614 18,041 36,868
----------- ----------- ----------- -----------
Total expenses before voluntary fee
reductions........................ 689,310 1,294,712 410,080 721,019
----------- ----------- ----------- -----------
Expenses voluntarily reduced........ (120,266) (234,379) (68,523) (156,768)
----------- ----------- ----------- -----------
Net Expenses............................. 569,044 1,060,333 341,557 564,251
----------- ----------- ----------- -----------
Net Investment Income (Loss)............. 1,046,408 (225,409) (3,183) 3,570,951
----------- ----------- ----------- -----------
REALIZED/UNREALIZED GAINS (LOSSES) ON
INVESTMENTS:
Realized gains (losses) on futures and
investments............................ 5,964,862 5,018,694 5,214,593 (1,374,889)
Change in unrealized appreciation
(depreciation) on investments.......... (1,282,624) 9,607,238 5,698,189 (1,695,354)
----------- ----------- ----------- -----------
Net realized/unrealized gains (losses)
from investments....................... 4,682,238 14,625,932 10,912,782 (3,070,243)
----------- ----------- ----------- -----------
Change in net assets resulting from
operations............................. $ 5,728,646 $14,400,523 $10,909,599 $ 500,708
=========== =========== =========== ===========
</TABLE>
See notes to financial statements.
-13-
<PAGE> 14
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INCOME EQUITY FUND DIVERSIFIED EQUITY FUND
--------------------------- ---------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2000 1999(a) 2000 1999(a)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss)....... $ 1,046,408 $ 848,483 $ (225,409) $ (157,786)
Realized gains on investments...... 5,964,862 1,989,853 5,018,694 12,914,962
Change in unrealized appreciation
(depreciation) on investments... (1,282,624) (3,021,716) 9,607,238 (13,542,991)
------------ ------------ ------------ ------------
Change in net assets resulting from
operations......................... 5,728,646 (183,380) 14,400,523 (785,815)
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income......... (1,087,542) (859,046) -- --
From net realized gain on
investments..................... (4,793,055) (5,549,465) (12,924,461) (13,464,080)
------------ ------------ ------------ ------------
Change in net assets from shareholder
distributions...................... (5,880,597) (6,408,511) (12,924,461) (13,464,080)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued........ 16,935,163 15,400,045 19,329,425 19,352,100
Dividends reinvested............... 5,782,156 6,124,576 12,826,694 13,109,770
Cost of shares redeemed............ (26,501,007) (16,480,278) (43,405,790) (30,934,128)
------------ ------------ ------------ ------------
Change in net assets from capital
transactions....................... (3,783,688) 5,044,343 (11,249,671) 1,527,742
------------ ------------ ------------ ------------
Change in net assets................. (3,935,639) (1,547,548) (9,773,609) (12,722,153)
NET ASSETS:
Beginning of period................ 50,902,844 52,450,392 85,361,065 98,083,218
------------ ------------ ------------ ------------
End of period...................... $ 46,967,205 $ 50,902,844 $ 75,587,456 $ 85,361,065
============ ============ ============ ============
SHARE TRANSACTIONS:
Issued............................. 1,534,426 1,327,864 1,732,814 1,610,936
Reinvested......................... 549,589 572,233 1,239,294 1,196,147
Redeemed........................... (2,352,785) (1,435,697) (3,876,545) (2,597,527)
------------ ------------ ------------ ------------
Change in Shares..................... (268,770) 464,400 (904,437) 209,556
============ ============ ============ ============
</TABLE>
- ---------------
(a) For the period from July 1, 1998 through March 31, 1999.
See notes to financial statements.
-14-
<PAGE> 15
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SPECIAL EQUITY FUND INCOME FUND
--------------------------- ---------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2000 1999(a) 2000 1999(a)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss)....... $ (3,183) $ 5,119 $ 3,570,951 $ 2,588,937
Realized gains (losses) on
investments..................... 5,214,593 1,757,252 (1,374,889) 624,093
Change in unrealized appreciation
(depreciation) on investments... 5,698,189 (3,177,218) (1,695,354) (1,327,173)
------------ ------------ ------------ ------------
Change in net assets resulting from
operations......................... 10,909,599 (1,414,847) 500,708 1,885,857
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income......... (299) (6,474) (3,605,588) (2,590,721)
Tax return of capital.............. -- (31,820) -- --
From net realized gain on
investments..................... -- -- -- (1,133,720)
In excess of net realized gain on
investments..................... -- -- -- (452,672)
------------ ------------ ------------ ------------
Change in net assets from shareholder
distributions...................... (299) (38,294) (3,605,588) (4,177,113)
------------ ------------ ------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from shares issued........ 8,937,457 9,738,376 19,389,440 19,281,043
Dividends reinvested............... 294 36,604 3,570,542 4,012,826
Cost of shares redeemed............ (23,860,813) (12,817,329) (29,794,685) (19,727,161)
------------ ------------ ------------ ------------
Change in net assets from capital
transactions....................... (14,923,062) (3,042,349) (6,834,703) 3,566,708
------------ ------------ ------------ ------------
Change in net assets................. (4,013,762) (4,495,490) (9,939,583) 1,275,452
NET ASSETS:
Beginning of period................ 30,945,632 35,441,122 67,250,538 65,975,086
------------ ------------ ------------ ------------
End of period...................... $ 26,931,870 $ 30,945,632 $ 57,310,955 $ 67,250,538
============ ============ ============ ============
SHARE TRANSACTIONS:
Issued............................. 860,633 1,092,574 1,998,293 1,868,593
Reinvested......................... 32 4,411 369,884 392,040
Redeemed........................... (2,277,234) (1,407,159) (3,084,298) (1,904,079)
------------ ------------ ------------ ------------
Change in Shares..................... (1,416,569) (310,174) (716,121) 356,554
============ ============ ============ ============
</TABLE>
- ---------------
(a) For the period from July 1, 1998 through March 31, 1999.
See notes to financial statements.
-15-
<PAGE> 16
THE COVENTRY GROUP
1ST SOURCE MONOGRAM INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (90.4%):
Aerospace/Defense (1.1%):
30,000 Raytheon Co..................... $ 532,500
-----------
Automotive Parts (3.1%):
28,000 Dana Corp....................... 789,250
21,000 Superior Industries
International................. 665,438
-----------
1,454,688
-----------
Banking (2.1%):
18,000 National City Corp.............. 371,250
19,434 Union Planters Corp............. 598,810
-----------
970,060
-----------
Building Materials (1.1%):
9,000 Southdown, Inc.................. 531,000
-----------
Chemicals (4.1%):
7,000 Dow Chemical Co................. 797,999
25,000 Hercules, Inc................... 403,125
65,000 M.A. Hanna Co................... 735,313
-----------
1,936,437
-----------
Commercial Goods & Services (1.3%):
30,000 McKesson HBOC, Inc.............. 630,000
-----------
Communications Equipment (2.1%):
28,000 Harris Corp..................... 967,750
-----------
Computer Services (2.7%):
20,000 Ceridian Corp. (b).............. 383,750
14,000 Electronic Data Systems Corp.... 898,625
-----------
1,282,375
-----------
Computers (4.5%):
34,000 Diebold, Inc.................... 935,000
9,000 Hewlett-Packard Co.............. 1,193,062
-----------
2,128,062
-----------
Consumer Goods & Services (2.7%):
17,000 American Greetings Corp......... 310,250
15,000 Avon Products, Inc.............. 435,938
50,000 Mattel, Inc..................... 521,875
-----------
1,268,063
-----------
Electronic Components (5.2%):
27,000 Dallas Semiconductor Corp....... 948,374
19,000 Parker-Hannifin Corp............ 784,938
23,000 Thomas & Betts Corp............. 649,750
-----------
2,383,062
-----------
Energy (0.8%):
17,000 Reliant Energy, Inc............. 398,438
-----------
Financial Services (1.7%):
18,000 Paine Webber Group, Inc......... 792,000
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Food & Related (1.9%):
15,000 Quaker Oats Co.................. $ 909,375
-----------
Forest & Paper Products (1.8%):
15,000 Weyerhaeuser Co................. 855,000
-----------
Insurance (3.3%):
22,000 Conseco, Inc.................... 251,625
16,000 Lincoln National Corp........... 536,000
22,412 St. Paul Companies, Inc......... 764,810
-----------
1,552,435
-----------
Investment Companies (3.0%):
25,000 Conning Corp.................... 310,938
26,000 Waddell & Reed Financial,
Inc........................... 1,100,125
-----------
1,411,063
-----------
Leisure (1.1%):
14,226 Sabre Holdings Corp. (b)........ 525,473
-----------
Machinery -- Diversified (3.9%):
60,000 Esterline Technologies Corp.
(b)........................... 780,000
19,000 W.W. Grainger, Inc.............. 1,030,749
-----------
1,810,749
-----------
Manufacturing (1.2%):
24,000 Trinity Industries, Inc......... 568,500
-----------
Media (1.6%):
42,000 A.H. Belo Corp.- Series A....... 750,750
-----------
Medical -- Instruments/Products (1.5%):
20,000 Biomet, Inc..................... 727,500
-----------
Medical -- Wholesale Drug Distribution
(1.0%):
70,000 Bergen Brunswig Corp............ 472,500
-----------
Metals -- Diversified (1.3%):
35,000 Brush Wellman, Inc.............. 616,875
-----------
Motor Vehicles (3.9%):
15,000 Ford Motor Co................... 689,063
9,000 General Motors Corp. -- Class H
(b)........................... 1,120,500
-----------
1,809,563
-----------
Oil -- Integrated Companies (3.6%):
17,000 Phillips Petroleum Co........... 786,250
35,000 USX -- Marathon Group, Inc...... 912,188
-----------
1,698,438
-----------
Paint & Related Products (1.9%):
40,000 Sherwin-Williams Co............. 877,500
-----------
</TABLE>
Continued
-16-
<PAGE> 17
THE COVENTRY GROUP
1ST SOURCE MONOGRAM INCOME EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- --------- ------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Pharmaceuticals (4.5%):
16,000 Abbott Laboratories............ $ 563,000
14,000 Bristol-Myers Squibb Co. ...... 808,499
12,000 Merck & Co., Inc. ............. 745,500
-----------
2,116,999
-----------
Publishing (1.8%):
23,000 Tribune Co. ................... 840,938
-----------
Real Estate Investment Trust (4.1%):
53,000 Burnham Pacific Properties,
Inc. ........................ 374,312
40,000 Captec Net Lease Realty,
Inc. ........................ 333,750
12,000 Hospitality Properties Trust... 243,000
31,000 Prentiss Properties Trust...... 691,687
41,300 Thornburg Mortgage Asset
Corp. ....................... 304,588
-----------
1,947,337
-----------
Retail (4.8%):
40,000 Claire's Stores, Inc. ......... 802,499
30,000 Dillard's, Inc. ............... 493,125
35,000 KMart Corp. (b)................ 339,063
25,000 Longs Drug Stores, Inc. ....... 568,750
-----------
2,203,437
-----------
Steel (1.6%):
36,800 Carpenter Technology Corp. .... 765,900
-----------
Telecommunications (1.1%):
22,000 Andrew Corp. (b)............... 503,250
-----------
Tires & Rubber Products (1.2%):
43,000 Cooper Tire & Rubber Co........ 540,188
-----------
Transportation -- Misc. (1.4%):
29,000 Ryder System, Inc. ............ 657,938
-----------
Utilities -- Electric (4.2%):
19,000 American Electric Power Co. ... 566,438
22,000 Montana Power Co. ............. 1,407,999
-----------
1,974,437
-----------
Utilities -- Gas & Pipeline (0.9%):
10,000 Williams Co., Inc. ............ 439,375
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Utilities -- Telephone (1.3%):
14,000 SBC Communications, Inc........ $ 588,000
-----------
Total Common Stocks............ 42,437,955
-----------
PREFERRED STOCKS (2.1%):
Electrical & Electronic (1.6%):
8,000 L&H Capital Trust I (c)........ 759,000
-----------
Pharmaceuticals (0.5%):
5,000 Biovail Corp (b)............... 231,250
-----------
Total Preferred Stocks......... 990,250
-----------
CONVERTIBLE BONDS (6.8%):
Computer Software (1.5%):
$500,000 Wind River Systems, 5.00%,
8/1/02, Callable 8/2/00 @
102.00....................... 712,500
-----------
Electronic Components (0.8%):
300,000 Cypress Semiconductor Corp.,
4.00%, 2/1/05................ 374,250
-----------
Health & Personal Care (1.3%):
800,000 Sunrise Assisted Living, Inc.,
5.50%, 6/15/02, Callable
6/15/00 @ 102.20............. 626,000
-----------
Industrial Goods & Services (2.3%):
778,000 Integrated Device Technology,
Inc., 5.50%, 6/1/02, Callable
5/10/00 @ 101.38............. 1,082,393
-----------
Shipbuilding (0.9%):
800,000 Friede Goldman Halter, Inc.,
4.50%, 9/15/04, Callable
9/15/04 @ 102.57............. 413,000
-----------
Total Convertible Bonds........ 3,208,143
-----------
Total Investments(Cost
$43,263,767) (a)............. $46,636,348
===========
</TABLE>
- ---------
Percentages indicated are based on net assets of $46,967,205.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses and REIT adjustments
of $11,304 and ($33,038), respectively, recognized for income tax purposes
in excess of financial reporting. Cost for federal income tax purposes
differs from market value by net unrealized appreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation......................... $10,128,817
Unrealized depreciation......................... (6,734,502)
-----------
Net unrealized appreciation..................... $ 3,394,315
===========
</TABLE>
(b) Represents non-income producing securities.
(c) 144A Security which is restricted as to resale to institutional investors.
See notes to financial statements.
-17-
<PAGE> 18
THE COVENTRY GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (99.6%):
Air Transportation (0.3%):
5,700 FedEx Corp. .................... $ 222,300
-----------
Automotive Parts (0.4%):
4,800 TRW, Inc........................ 280,800
-----------
Banking (4.5%):
16,450 AmSouth Bancorporation.......... 245,722
14,700 Bank Of America Corp............ 770,831
5,700 J.P. Morgan & Co................ 750,975
10,000 MBNA Corp....................... 255,000
6,100 PNC Bank Corp................... 274,881
7,300 The Chase Manhattan Corp........ 636,469
12,000 Wells Fargo & Co................ 491,250
-----------
3,425,128
-----------
Beverages (0.5%):
7,800 Coca-Cola Co.................... 366,113
-----------
Communications Equipment (1.2%):
10,000 Convergys Corp.................. 386,250
6,000 Symbol Technologies, Inc........ 493,875
-----------
880,125
-----------
Computer Services (0.9%):
10,000 America Online, Inc. (b)........ 672,500
-----------
Computer Software (6.6%):
7,200 Computer Associates
International, Inc............ 426,150
20,000 Compuware Corp. (b)............. 421,250
21,000 Microsoft Corp. (b)............. 2,231,250
24,400 Oracle Corp. (b)................ 1,904,725
-----------
4,983,375
-----------
Computers (10.9%):
5,300 Apple Computer, Inc. (b)........ 719,806
12,600 Dell Computer Corp. (b)......... 679,613
13,100 EMC Corp. (b)................... 1,637,499
4,000 Hewlett-Packard Co. ............ 530,250
7,000 Intel Corp...................... 923,563
10,000 International Business Machines
Corp. ........................ 1,180,000
32,700 Quantum Corp. DLT and
Storage (b)................... 390,356
20,000 Sun Microsystems, Inc. (b)...... 1,874,062
14,800 Unisys Corp. (b)................ 377,400
-----------
8,312,549
-----------
Cosmetics & Toiletries (0.8%):
10,400 Proctor & Gamble Co............. 585,000
-----------
Data Processing & Reproduction (0.4%):
7,300 First Data Corp. ............... 323,025
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Defense (0.7%):
7,800 United Technologies Corp. ...... $ 492,863
-----------
Electrical Equipment (0.4%):
6,000 Emerson Electric Co............. 317,250
-----------
Electronic Components (7.2%):
4,000 Conexant Systems, Inc. (b)...... 284,000
10,700 Cypress Semiconductor Corp.
(b)........................... 527,644
8,000 LSI Logic Corp. (b)............. 581,000
10,000 SCI Systems, Inc. (b)........... 538,125
26,600 Solectron Corp. (b)............. 1,065,663
18,600 Tandy Corp...................... 943,950
10,000 Texas Instruments, Inc.......... 1,599,999
-----------
5,540,381
-----------
Financial Services (6.9%):
6,300 American Express Co............. 938,306
9,000 Associates First Capital
Corp.......................... 192,938
24,850 Citigroup, Inc.................. 1,473,915
3,800 Fannie Mae...................... 214,463
17,600 Morgan Stanley Dean Witter &
Co. .......................... 1,435,499
17,000 Schwab (Charles) Corp........... 965,813
-----------
5,220,934
-----------
Forest & Paper Products (0.4%):
5,000 Kimberly-Clark Corp. ........... 280,000
-----------
Household -- Major Appliances (0.6%):
7,400 Whirlpool Corp. ................ 433,825
-----------
Household Products (0.3%):
6,200 The Clorox Company.............. 201,500
-----------
Instruments -- Scientific (1.9%):
12,400 PE Corp. Biosystems Group....... 1,196,600
2,200 Waters Corp. (b)................ 209,550
-----------
1,406,150
-----------
Insurance (1.4%):
1,600 American General Corp........... 89,800
6,600 American International Group,
Inc........................... 722,700
4,500 Hartford Financial Services
Group......................... 237,375
-----------
1,049,875
-----------
Leisure (0.3%):
5,419 Sabre Holdings Corp. (b)........ 200,164
-----------
Machinery & Equipment (1.9%):
15,000 Applied Materials, Inc. (b)..... 1,413,750
-----------
</TABLE>
Continued
-18-
<PAGE> 19
THE COVENTRY GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Manufacturing (3.1%):
12,000 General Electric Co............. $ 1,862,250
10,000 Tyco International Ltd. ........ 498,750
-----------
2,361,000
-----------
Medical -- Biotechnology (1.3%):
6,600 Genentech, Inc. ................ 1,003,200
-----------
Medical -- Instruments/Products (1.3%):
3,900 Beckman Coulter, Inc. .......... 250,331
13,500 Boston Scientific Corp. (b)..... 287,719
7,300 Guidant Corp.................... 429,331
-----------
967,381
-----------
Motor Vehicles (1.7%):
8,800 Ford Motor Co................... 404,250
10,200 General Motors Corp............. 844,688
-----------
1,248,938
-----------
Multimedia (1.6%):
13,000 CBS Corp. (b)................... 736,125
5,100 Time Warner, Inc. .............. 510,000
-----------
1,246,125
-----------
Networking Software (3.5%):
34,000 Cisco Systems, Inc. (b)......... 2,628,625
-----------
Oil & Gas (3.7%):
6,000 Enron Corp...................... 449,250
15,000 Exxon Mobil Corp................ 1,167,188
10,000 Royal Dutch Petroleum Co. ...... 575,625
12,800 The Coastal Corp................ 588,800
-----------
2,780,863
-----------
Oil & Gas -- Exploration/Production (0.3%):
7,800 Ultramar Diamond Shamrock
Corp.......................... 197,925
-----------
Oil & Gas Drilling (0.5%):
10,400 Nabors Industries, Inc. (b)..... 403,650
-----------
Oil & Gas Services (0.8%):
4,200 Schlumberger Ltd................ 321,300
5,184 Transocean Sedco Forex, Inc..... 266,004
-----------
587,304
-----------
Oil -- Integrated Companies (0.9%):
12,600 BP Amoco -- PLC-ADR............. 668,588
-----------
Pharmaceuticals (4.8%):
15,000 Amgen, Inc. (b)................. 920,625
8,400 Johnson & Johnson............... 588,525
17,000 Merck & Co., Inc. .............. 1,056,125
20,000 Pfizer, Inc..................... 731,250
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
10,000 Schering-Plough Corp............ $ 367,500
-----------
3,664,025
-----------
Pipelines (0.5%):
9,200 El Paso Energy Corp............. 371,450
-----------
Restaurants (1.4%):
12,200 McDonald's Corp................. 458,263
14,000 Starbucks Corp. (b)............. 627,375
-----------
1,085,638
-----------
Retail (6.0%):
4,000 Bed Bath & Beyond, Inc. (b)..... 157,500
16,050 Home Depot, Inc. ............... 1,035,225
8,800 Kohl's Corp. (b)................ 902,000
10,200 Safeway, Inc. (b)............... 461,550
33,000 Wal-Mart Stores, Inc. .......... 1,831,500
5,000 Walgreen Co. ................... 128,750
-----------
4,516,525
-----------
Telecommunications (12.8%):
10,000 Bell Atlantic Corp. ............ 611,250
10,000 Ciena Corp. (b)................. 1,261,249
20,000 Comcast Corp. (b)............... 867,500
14,000 JDS Uniphase Corp. ............. 1,687,874
17,900 Lucent Technologies, Inc. ...... 1,087,425
4,500 Motorola, Inc. ................. 640,688
6,500 NEXTEL Communications (b)....... 963,625
9,000 Nortel Networks Corp............ 1,134,000
3,000 QUALCOMM, Inc. (b).............. 447,938
7,800 Sprint Corp. (PCS Group) (b).... 509,438
9,000 Tellabs, Inc. (b)............... 566,859
-----------
9,777,846
-----------
Transportation -- Misc. (0.8%):
9,300 United Parcel Service, Inc.
Class B....................... 585,900
-----------
Utilities -- Gas & Pipeline (0.6%):
10,000 Williams Co., Inc............... 439,375
-----------
Utilities -- Telephone (5.5%):
14,000 AT&T Corp....................... 787,500
12,000 BellSouth Corp.................. 564,000
24,100 MCI Worldcom, Inc. (b).......... 1,092,031
7,000 Qwest Communications
International (b)............. 339,500
25,000 SBC Communications, Inc......... 1,050,000
4,100 U S WEST, Inc................... 297,763
-----------
4,130,794
-----------
Total Common Stocks............. 75,272,759
-----------
</TABLE>
Continued
-19-
<PAGE> 20
THE COVENTRY GROUP
1ST SOURCE MONOGRAM DIVERSIFIED EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- -------------------------------- -----------
<C> <S> <C>
REPURCHASE AGREEMENT (0.6%):
$475,291 Fifth Third Bank Repurchase
Agreement, 3/31/00, 5.65%,
matures 4/3/00,
(Collateralized by $490,000
GNMA #780848, 6.50%, 8/15/13,
market value = $477,991)...... 475,291
-----------
Total Repurchase Agreement...... 475,291
-----------
Total Investments
(Cost $57,263,580) (a)........ $75,748,050
===========
</TABLE>
- ---------
Percentages indicated are based on net assets of $75,587,456.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $41,722.
Cost for federal income tax purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation......................... $21,170,382
Unrealized depreciation......................... (2,727,634)
-----------
Net unrealized appreciation..................... $18,442,748
===========
</TABLE>
(b) Represents non-income producing securities
PLC -- Public Limited Company
ADR -- American Depository Receipt
See notes to financial statements.
-20-
<PAGE> 21
THE COVENTRY GROUP
1ST SOURCE MONOGRAM SPECIAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS (88.7%):
Advertising (1.4%):
6,000 Lamar Advertising Co. (b)..... $ 273,000
10,000 MDC Corporation, Inc. (b)..... 116,250
-----------
389,250
-----------
Aerospace/Defense -- Equipment (0.5%):
7,500 AAR Corp...................... 125,156
-----------
Banking (1.9%):
15,000 East West Bancorp, Inc........ 165,938
7,500 GBC Bancorp./California ...... 173,906
7,500 UCBH Holdings, Inc. (b)....... 161,250
-----------
501,094
-----------
Commercial Goods & Services (1.2%):
8,000 Carey International, Inc.
(b)......................... 136,000
10,000 Source Information Mgmt. Co.
(b)......................... 175,000
-----------
311,000
-----------
Computer Networking (3.5%):
30,000 Digital Biometrics, Inc.
(b)......................... 247,500
7,500 Electronics Boutique Holdings
Corp. (b)................... 143,438
15,000 Hypercom Corp. (b)............ 256,875
10,000 PC Connection, Inc. (b)....... 282,500
-----------
930,313
-----------
Computer Services (0.1%):
15,000 DA Consulting Group, Inc.
(b)......................... 37,500
-----------
Computer Software (8.2%):
7,500 APEX, Inc. (b)................ 278,437
13,000 AVT Corp. (b)................. 153,563
3,000 Brio Technology, Inc. (b)..... 113,250
15,000 Deltek Systems, Inc. (b)...... 229,688
2,500 Inso Corp. (b)................ 33,750
6,000 J.D. Edwards & Co. (b)........ 195,375
3,000 Marimba, Inc. (b)............. 132,375
2,000 Micromuse, Inc. (b)........... 277,624
20,000 Netsmart Technologies, Inc.
(b)......................... 218,750
6,000 Smartforce PLC (b)............ 275,250
15,000 Take-Two Interactive Software,
Inc. (b).................... 198,750
3,500 Xircom, Inc. (b).............. 129,500
-----------
2,236,312
-----------
Computers (2.9%):
7,500 Aspeon, Inc. (b).............. 151,875
4,000 Eloyalty Corp. (b)............ 95,500
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
10,000 Ikos Systems, Inc. (b)........ $ 129,375
5,000 Insight Enterprises, Inc.
(b)......................... 182,188
25,000 Tidel Technologies, Inc.
(b)......................... 218,750
-----------
777,688
-----------
Computers & Manufacturing Memory Devices (0.7%):
15,000 Maxtor Corp. (b).............. 194,063
-----------
Cosmetics/Personal Care (0.5%):
10,000 Playtex Products, Inc. (b).... 130,000
-----------
Data Processing Services (0.9%):
15,000 Informix Corp. (b)............ 254,063
-----------
Electrical & Electronic (0.9%):
6,000 Integrated Device Technology,
Inc. (b).................... 237,750
-----------
Electronic Components (14.4%):
3,000 ACT Manufacturing, Inc. (b)... 167,813
6,000 Amkor Technology, Inc. (b).... 318,375
3,000 Amphenol Corp. (b)............ 306,750
6,000 ATMI, Inc. (b)................ 286,500
5,000 Audiovox Corp. (b)............ 218,125
6,000 Celestica, Inc. (b)........... 318,375
7,000 Flextronics International Ltd.
(b)......................... 493,062
4,000 Galileo Technology Ltd. (b)... 73,000
7,000 Integrated Measurement Systems
(b)......................... 142,188
8,000 International Rectifier Corp.
(b)......................... 305,000
15,000 Micro Linear Corp. (b)........ 127,500
6,000 MKS Instruments, Inc. (b)..... 303,000
6,000 Photronics, Inc. (b).......... 211,875
9,000 Robotic Vision Systems, Inc.
(b)......................... 144,000
5,000 Transwitch Corp. (b).......... 480,624
-----------
3,896,187
-----------
Electronic Instruments (0.6%):
6,000 Measurement Specialties, Inc.
(b)......................... 151,875
-----------
Electronics (0.6%):
6,000 Power Integrations, Inc.
(b)......................... 150,000
-----------
Environmental Services (0.9%):
10,000 Stericycle, Inc. (b).......... 250,000
-----------
Fiber Optics (1.4%):
4,000 Metromedia Fiber Network, Inc.
(b)......................... 386,750
-----------
</TABLE>
Continued
-21-
<PAGE> 22
THE COVENTRY GROUP
1ST SOURCE MONOGRAM SPECIAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Financial Services (1.1%):
15,000 Capitol Federal Financial..... $ 141,563
15,000 Microfinancial, Inc........... 155,625
-----------
297,188
-----------
Food & Related (2.2%):
5,000 Metris Co., Inc............... 194,375
20,000 Monterey Pasta Co. (b)........ 85,000
15,000 Suprema Specialties, Inc.
(b)......................... 149,063
7,500 Wild Oats Markets, Inc. (b)... 153,750
-----------
582,188
-----------
Forest & Paper Products (0.5%):
10,000 Longview Fibre Co............. 147,500
-----------
Health & Personal Care (2.1%):
15,000 Abaxis, Inc. (b).............. 125,625
5,500 EP Medsystems, Inc. (b)....... 33,344
7,500 Laser Vision Centers, Inc.
(b)......................... 52,031
15,000 LCA-Vision, Inc. (b).......... 76,406
20,000 Merit Medical Systems, Inc.
(b)......................... 197,500
25,000 Total Renal Care Holdings
(b)......................... 78,125
-----------
563,031
-----------
Household Products (0.6%):
10,000 Church & Dwight, Inc.......... 171,875
-----------
Investment Companies (0.5%):
10,000 Conning Corp.................. 124,375
-----------
Machinery & Equipment (0.9%):
6,000 Gasonics International Corp.
(b)......................... 237,938
-----------
Media (1.0%):
6,000 Ligand Pharmaceuticals, Inc.
(b)......................... 106,500
15,000 Medialink Worldwide, Inc.
(b)......................... 97,500
15,000 NTN Communications, Inc.
(b)......................... 60,000
-----------
264,000
-----------
Medical -- Biotechnology (1.2%):
10,000 Diametrics Medical, Inc.
(b)......................... 112,500
6,000 Interpore International (b)... 50,250
4,000 Liposome Co, Inc. (b)......... 69,875
10,000 Nymox Pharmaceutical Corp.
(b)......................... 56,250
13,000 ZymeTx, Inc. (b).............. 34,938
-----------
323,813
-----------
Medical -- Instruments/Products (2.5%):
13,000 America Service Group, Inc.
(b)......................... 195,000
8,000 Exactech, Inc. (b)............ 135,500
8,000 Osteotech, Inc. (b)........... 107,000
15,000 Zevex International, Inc.
(b)......................... 167,813
1,500 Zoll Medical Corp. (b)........ 76,875
-----------
682,188
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Multimedia (0.8%):
15,000 Canwest Global Comm Corp...... $ 161,250
2,500 Corus Entertainment, Inc.
(b)......................... 65,435
-----------
226,685
-----------
Oil & Gas -- Exploration/Production (3.5%):
10,000 Cross Timbers Oil Co.......... 130,625
30,000 Denbury Resources, Inc. (b)... 120,000
10,000 EOG Resources, Inc............ 211,874
50,000 Meridian Resource Corp. (b)... 193,750
13,000 Pioneer Natural Resources Co.
(b)......................... 138,125
8,000 Vintage Petroleum, Inc. (b)... 161,000
-----------
955,374
-----------
Oil & Gas Drilling (3.9%):
40,000 Key Energy Services, Inc.
(b)......................... 464,999
7,500 Noble Drilling Corp. (b)...... 310,781
7,500 Santa Fe International
Corp........................ 277,500
-----------
1,053,280
-----------
Oil -- Field Services (0.6%):
3,000 Hanover Compressor Co. (b).... 170,625
-----------
Pharmaceuticals (6.1%):
7,000 Biovail Corp. (b)............. 310,187
6,000 Elan Corp. Plc. (b)........... 285,000
7,000 Hi-Tech Pharmacal Co., Inc.
(b)......................... 38,500
3,000 Immtech International, Inc.
(b)......................... 84,750
10,000 K V Pharmaceutical Co. (b).... 268,750
3,000 King Pharmaceuticals, Inc.
(b)......................... 94,500
5,000 Medicis Pharmaceutical (b).... 200,000
20,000 SICOR, Inc.................... 207,500
15,000 Taro Pharmaceutical Industries
(b)......................... 161,250
-----------
1,650,437
-----------
Railroad (0.2%):
7,500 Railamerica, Inc. (b)......... 50,625
-----------
Real Estate (0.6%):
11,000 Catellus Development Corp.
(b)......................... 152,625
-----------
Real Estate Investment Trust (0.7%):
6,000 Alexandria Real Estate
Equities.................... 180,000
-----------
Recreation Centers (0.7%):
7,500 Bally Total Fitness Holding
Corp. (b)................... 183,750
-----------
</TABLE>
Continued
-22-
<PAGE> 23
THE COVENTRY GROUP
1ST SOURCE MONOGRAM SPECIAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Restaurants (0.9%):
7,500 Outback Steakhouse, Inc.
(b)......................... $ 240,469
-----------
Retail (4.2%):
6,900 Family Dollar Stores, Inc..... 143,606
20,000 Fred's, Inc. ................. 304,999
10,000 Hollywood Entertainment Corp.
(b)......................... 80,625
30,000 J. Jill Group, Inc. (b)....... 118,125
20,000 Officemax, Inc. (b)........... 130,000
10,000 Tuesday Morning Corp. (b)..... 143,750
10,000 Ulimate Electronics, Inc.
(b)......................... 218,750
-----------
1,139,855
-----------
Schools (0.9%):
15,000 Argosy Education Group, Inc.
(b)......................... 85,313
10,000 ITT Educational Services, Inc.
(b)......................... 160,000
-----------
245,313
-----------
Telecommunication & Satellite (2.2%):
5,000 Gilat Satellite Networks Ltd.
(b)......................... 586,250
-----------
Telecommunications (7.1%):
8,000 ACT Teleconferencing, Inc.
(b)......................... 100,500
4,000 AT&T Canada, Inc. (b)......... 244,000
3,000 Carrier Access Corp. (b)...... 159,750
2,000 Ciena Corp. (b)............... 252,249
6,000 Dobson Communications Corp.
(b)......................... 138,000
4,000 Global Telesystems Group, Inc.
(b)......................... 82,000
10,000 Grupo Iusacell S.A. de C.V.
(b)......................... 202,500
7,000 I D Systems, Inc. (b)......... 58,625
6,000 Latitude Communications, Inc.
(b)......................... 157,500
17,000 Network Equipment
Technologies, Inc. (b)...... 170,000
2,500 Powertel, Inc. (b)............ 172,969
7,000 RSL Communications Ltd. (b)... 168,000
-----------
1,906,093
-----------
Toys (0.3%):
20,000 Racing Champions Corp. (b).... 76,250
-----------
Transportation (0.6%):
10,000 Midcoast Energy Resources..... 169,375
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- ------------------------------ ------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Utilities -- Electric (1.7%):
7,000 Montana Power Co.............. $ 448,000
-----------
Utilities -- Gas & Pipeline (0.5%):
3,000 Equitable Resources, Inc...... 134,438
-----------
Total Common Stocks........... 23,922,541
-----------
CONVERTIBLE BONDS (1.5%):
Electronic Components (0.9%):
$ 150,000 Advanced Micro Devices, 6.00%,
5/15/2005, Converts to
27.027 Shares Per 1000,
Convertible Until
5/15/2005................... 244,500
-----------
Retail (0.6%):
150,000 Devon Energy Corp., 4.90%,
8/15/08, Conv to 9.3283 Shrs
Per 1000.................... 150,188
-----------
Total Convertible Bonds....... 394,688
-----------
CORPORATE BONDS (1.4%):
Computer Software (1.4%):
250,000 Aspen Technology, Inc., 5.25%,
6/15/05..................... 233,750
25,000 BEA Systems, Inc., 4.00%,
6/15/05..................... 133,656
-----------
Total Corporate Bonds......... 367,406
-----------
REPURCHASE AGREEMENT (9.4%):
$2,525,131 Fifth Third Bank Repurchase
Agreement, 3/31/00, 5.65%,
matures 4/3/00,
(Collateralized by
$2,580,000 GNMA #780848,
6.50%, 8/15/13, market value
= $2,516,769................ 2,525,131
-----------
Total Repurchase Agreement.... 2,525,131
-----------
Total Investments
(Cost $20,812,166) (a)...... $27,209,766
===========
</TABLE>
Continued
-23-
<PAGE> 24
THE COVENTRY GROUP
1ST SOURCE MONOGRAM SPECIAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
- ---------
Percentages indicated are based on net assets of $26,931,870.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $13,663.
Cost for federal income tax purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation......................... $ 7,742,718
Unrealized depreciation......................... (1,358,781)
-----------
Net unrealized appreciation..................... $ 6,383,937
===========
</TABLE>
(b) Represents non-income producing securities
PLC -- Public Limited Company
See notes to financial statements.
-24-
<PAGE> 25
THE COVENTRY GROUP
1ST SOURCE MONOGRAM INCOME FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
CORPORATE BONDS (29.0%):
Automotive (5.3%):
$3,000,000 Ford Motor Credit, 8.20%,
2/15/02..................... $ 3,037,890
-----------
Financial Services (6.4%):
2,000,000 Associates Corp., 6.75%,
8/1/01...................... 1,985,134
1,800,000 Bear Stearns Co., 6.25%,
7/15/05..................... 1,683,581
-----------
3,668,715
-----------
Industrial Goods & Services (7.1%):
2,000,000 American Home Products, 7.90%,
2/15/05..................... 2,045,624
2,000,000 Procter & Gamble, 8.00%,
11/15/03.................... 2,054,144
-----------
4,099,768
-----------
Manufacturing -- Capital Goods (3.4%):
2,000,000 Eaton Corp., 6.95%,
11/15/04.................... 1,958,156
-----------
Oil & Gas Exploration (1.7%):
1,000,000 Atlantic Richfield, 5.55%,
4/15/03..................... 956,835
-----------
Telecommunications (1.8%):
1,000,000 MCI Worldcom Inc., 7.75%,
4/1/07...................... 1,016,555
-----------
Utilities -- Electric (3.3%):
2,000,000 Pennsylvania Electric Co.,
5.75%, 4/1/04............... 1,884,366
-----------
Total Corporate Bonds......... 16,622,285
-----------
U.S. TREASURY OBLIGATIONS (50.0%):
4,500,000 6.25%, 8/31/02................ 4,473,284
6,000,000 6.25%, 2/15/03................ 5,968,128
7,000,000 7.25%, 5/15/04................ 7,216,566
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS, CONTINUED:
$6,000,000 6.50%, 5/15/05................ $ 6,039,378
5,000,000 6.13%, 8/15/07................ 4,953,125
-----------
Total U.S. Treasury
Obligations................. 28,650,481
-----------
U.S. GOVERNMENT AGENCIES (18.9%):
Fannie Mae (5.2%):
3,000,000 9.05%, 04/10/00............... 3,001,617
-----------
Federal Home Loan Mortgage Corporation (3.5%):
2,000,000 Federal Home Loan Mortgage
Corp., 7.00%, 3/15/10....... 1,985,779
-----------
Federal Home Loan Bank (5.1%):
1,000,000 Federal Home Loan Bank, 5.69%,
12/28/01.................... 979,323
2,000,000 Federal Home Loan Bank, 6.25%,
11/15/02.................... 1,961,732
-----------
2,941,055
-----------
Freddie Mac (5.1%):
3,000,000 6.24%, 10/6/04................ 2,902,644
-----------
Total U.S. Government
Agencies.................... 10,831,095
-----------
REPURCHASE AGREEMENT (1.5%):
877,757 Fifth Third Bank Repurchase
Agreement, 3/31/00, 5.65%,
matures 4/3/00,
(Collateralized by $900,000
GNMA #780848, 6.50%,
8/15/13, market value =
$877,943)................... 877,757
-----------
Total Repurchase Agreement.... 877,757
-----------
Total Investments
(Cost $59,652,343) (a)...... $56,981,618
-----------
</TABLE>
- ---------
Percentages indicated are based on net assets of $57,310,955
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $37,335.
Cost for federal income tax purposes differs from market value by net
unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation......................... $ 5,174
Unrealized depreciation......................... (2,713,234)
-----------
Net unrealized depreciation..................... $(2,708,060)
===========
</TABLE>
See notes to financial statements.
-25-
<PAGE> 26
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
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. The Group offers shares of a number of
different series, including the following series for which 1st Source Bank
serves as investment adviser: the 1st Source Monogram Income Equity Fund,
the 1st Source Monogram Diversified Equity Fund, the 1st Source Monogram
Special Equity Fund, and the 1st Source Monogram Income Fund,
(collectively, the "Funds" and individually, a "Fund"). On October 24,
1998, the 1st Source Monogram Funds were reorganized and moved from The
Sessions Group to The Coventry Group.
The investment objectives of the Income Equity Fund are capital
appreciation with current income as a secondary objective. The investment
objective for each of the Diversified Equity Fund and the Special Equity
Fund is capital appreciation. The investment objective of the Income Fund
is current income consistent with preservation of capital.
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 POLICIES:
The following is a summary of significant accounting policies followed by
the Group in the preparation of its 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 may affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of income and expenses for the period. Actual results could differ
from those estimates.
SECURITIES VALUATION:
Investments in common and preferred stocks, corporate bonds, commercial
paper, municipal securities and U.S. Government securities of the Income
Equity Fund, the Diversified Equity Fund, the Special Equity Fund, and the
Income Fund are valued at their market values determined on the basis of
the current available prices in the principal market (closing sales prices
if the principal market is an exchange or NASDAQ National Market) in which
such securities are normally traded. Investments in investment companies
are valued at their net asset values as reported by such companies. Other
securities for which quotations are not readily available are valued at
their fair value under procedures established by the Group's Board of
Trustees. Investments in debt securities with remaining maturities of 60
days or less may be valued based upon the amortized cost method.
REPURCHASE AGREEMENTS:
The Funds may acquire repurchase agreements from financial institutions
such as banks and broker-dealers which 1st Source Bank deems creditworthy
under guidelines approved by the Board of Trustees, subject to the seller's
agreement to repurchase such securities at a mutually agreed-upon date and
price.
Continued
-26-
<PAGE> 27
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 2000
The repurchase price generally equals the price paid by each 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 transferred to an account of the Fund at a bank custodian.
DERIVATIVES:
A derivative is defined as a financial instrument whose value is derived
from the performance of underlying assets, interest rate and currency
exchange rates, or indices, and include (but are not limited to) structured
debt obligations, interest rates, futures contracts, options, and forward
currency contracts. Risks of entering into such transactions include the
potential inability of the dealer to meet its obligations and unanticipated
movements in the value of the security or the underlying assets or indices.
It is possible that the Funds will incur a loss as a result of their
investments in derivative instruments. It is the policy of the Funds, to
the extent that there exists no readily available market for such
securities, that the investment will be treated as an illiquid security for
purposes of calculating the Funds' limitations on investments in illiquid
securities as set forth in the Funds' investment restrictions.
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 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.
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 each Fund's organization and registration
under the 1940 Act and the Securities Act of 1933 were paid by that Fund.
Such expenses are amortized over a period of five years commencing with the
date of the initial public offering.
DIVIDENDS TO SHAREHOLDERS:
A dividend for each of the Funds, other than the Special Equity Fund, is
declared monthly at the close of business on the day of declaration and is
generally paid monthly. A dividend for the Special Equity Fund
Continued
-27-
<PAGE> 28
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 2000
is declared quarterly at the close of business on the day of declaration
and is paid quarterly. Distributable net realized capital gains for each
Fund, if any, are distributed at least annually.
Dividends from net investment income and net realized capital gains are
determined in accordance with Federal income tax regulations, which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments for net investment losses, expiring
capital loss carry forwards, and deferral of certain losses.
These "book/tax" differences are either considered temporary or permanent
in nature. To the extent these differences are permanent in nature, such
amounts are reclassified within the composition of net assets on their
federal tax-basis treatment; temporary differences do not require
reclassifications. Dividends and distributions to shareholders which exceed
net investment income and net realized gains for financial reporting
purposes but not for tax purposes are reported as dividends in excess of
net investment income or distributions in excess of net realized gains. To
the extent they exceed net investment income and net realized gains for tax
purposes, they are reported as distributions of capital.
As of March 31, 2000, the following reclassifications have been made to
increase (decrease) the following components of net assets with offsetting
adjustments, if any, to paid-in-capital:
<TABLE>
<CAPTION>
ACCUMULATED ACCUMULATED NET
UNDISTRIBUTED NET REALIZED GAIN/(LOSS)
INVESTMENT INCOME ON INVESTMENTS
----------------- --------------------
<S> <C> <C>
Income Equity Fund........................ $ 29,991 $ (29,991)
Diversified Equity Fund................... $224,879 $(224,879)
Special Equity Fund....................... $ 3,023 $ (2,932)
</TABLE>
FEDERAL INCOME TAXES:
It is the policy of the Funds to continue 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.
3. PURCHASES AND SALES OF SECURITIES:
The costs of purchases and proceeds from sales of securities (excluding
short-term securities) for the year ended March 31, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- ------------
<S> <C> <C>
Income Equity Fund............................... $22,037,704 $ 29,261,729
Diversified Equity Fund.......................... 80,550,582 104,063,766
Special Equity Fund.............................. 40,442,527 48,878,401
Income Fund...................................... 38,580,086 45,436,497
</TABLE>
Continued
-28-
<PAGE> 29
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 2000
4. RELATED PARTY TRANSACTIONS:
Investment advisory services are provided to the Funds by 1st Source Bank.
Under the terms of the investment advisory agreement, 1st Source Bank is
entitled to receive fees based on a percentage of the average net assets of
each Fund.
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 distributor. Such officers and trustees are paid no
fees directly by the Funds for serving as officers and trustees of the
Group. BISYS Ohio serves the Funds as administrator, transfer agent and
fund accountant. Under the terms of the administration agreement, BISYS's
fees are computed daily as a percentage of the average net assets of each
Fund.
The Group has adopted a Distribution and Shareholder Service Plan in
accordance with Rule 12b-1 under the 1940 Act, pursuant to which each Fund
is authorized to pay or reimburse BISYS, as distributor, a periodic amount,
calculated at an annual rate not to exceed 0.25% of the average daily net
asset value of each Fund. These fees may be used by BISYS to pay banks,
including 1st Source Bank, broker-dealers and other institutions, or to
reimburse BISYS or its affiliates, for distribution and shareholder
services in connection with the distribution of Fund shares.
The Group has adopted an Administrative Services Plan, pursuant to which
each Fund is authorized to pay compensation to banks and other financial
institutions, which may include 1st Source Bank, its correspondent and
affiliated banks and BISYS, for providing ministerial, record keeping
and/or administrative support services to their customers who are the
beneficial or record owners of a Fund. The compensation which may be paid
under the Administrative Services Plan is a fee computed daily at an annual
rate of up to 0.25% of the average net assets of each Fund. As of the date
of this report, no such servicing agreements have been entered into by the
Group with respect to the Funds.
BISYS is also entitled to receive commissions on sales of shares of the
Funds. For the year ended March 31, 2000, BISYS received $822 from
commissions earned on sales of shares of the Funds, of which $741 was
reallowed to broker/dealers affiliated with 1st Source Bank.
Continued
-29-
<PAGE> 30
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 2000
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, 2000:
<TABLE>
<CAPTION>
INCOME DIVERSIFIED SPECIAL
EQUITY EQUITY EQUITY INCOME
FUND FUND FUND FUND
-------- ----------- ------- --------
<S> <C> <C> <C> <C>
INVESTMENT ADVISORY:
Annual fee before voluntary fee
reductions (percentage of
average net assets)............ .80% .99% .80% .55%
Voluntary fee reductions......... -- $ 35,137 -- --
ADMINISTRATION FEES:
Annual fee before voluntary fee
reductions (percentage of
average net assets)............ .20% .20% .20% .20%
12B-1 FEES:
Annual fee before voluntary fee
reductions (percentage of
average net assets)............ .25% .25% .25% .25%
Voluntary fee reductions......... $120,266 $199,242 $68,523 $156,768
</TABLE>
5. FEDERAL INCOME TAX INFORMATION:
During the year ended March 31, 2000 the Funds declared long-term capital
gain distributions as follows:
<TABLE>
<CAPTION>
LONG-TERM
20%
----------
<S> <C>
Income Equity Fund.......................................... $2,772,704
Diversified Equity Fund..................................... $9,239,139
</TABLE>
For corporate shareholders the following percentage of the total ordinary
income distributions paid during the year ended March 31, 2000 qualify for
the corporate dividends received deduction for the following funds:
<TABLE>
<CAPTION>
PERCENTAGE
----------
<S> <C>
Income Equity Fund.......................................... 29.33%
Diversified Equity Fund..................................... 30.02%
Special Equity Fund......................................... 2.87%
</TABLE>
Capital losses incurred for the Funds after October 31, within the Funds'
fiscal year are deemed to arise on the first business day of the following
fiscal year for tax purposes. The Income Fund has incurred and will elect
to defer such capital losses of $650,407.
Continued
-30-
<PAGE> 31
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
NOTES TO FINANCIAL STATEMENTS, CONTINUED
MARCH 31, 2000
At March 31, 2000, the Funds had net capital loss carryforwards, as
follows:
<TABLE>
<CAPTION>
CAPITAL LOSS CARRYFORWARD
------------------------------------ AVAILABLE
FUND BEGINNING UTILIZED ENDING THROUGH
---- ---------- -------- ---------- --------------
<S> <C> <C> <C> <C>
Special Equity Fund....... $ 522,780 $522,780 -- --
Income Fund............... $1,139,812 -- $1,139,812 March 31, 2008
</TABLE>
The capital loss carryforwards will be available to offset future net
capital gains, if any, to the extent provided by the Treasury regulations.
To the extent that this carryforward is used to offset future capital
gains, it is probably that these gains so offset will not be distributed to
shareholders.
-31-
<PAGE> 32
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
FINANCIAL HIGHLIGHTS
REPRESENTS AN OUTSTANDING UNIT OF BENEFICIAL INTEREST.
<TABLE>
<CAPTION>
INCOME EQUITY FUND
-----------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, MARCH 31, JUNE 30, JUNE 30,
2000 1999(a) 1998 1997(b)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD... $ 11.00 $ 12.60 $ 12.28 $ 10.00
------- ------- ------- -------
INVESTMENT ACTIVITIES:
Net investment income................ 0.25 0.20 0.27 0.20
Net realized and unrealized gains
(losses) on investments........... 0.94 (0.26) 1.79 2.32
------- ------- ------- -------
Total from Investment
Activities...................... 1.19 (0.06) 2.06 2.52
------- ------- ------- -------
DIVIDENDS:
Net investment income................ (0.26) (0.20) (0.27) (0.19)
Net realized gains................... (1.16) (1.34) (1.47) (0.05)
------- ------- ------- -------
Total Dividends................... (1.42) (1.54) (1.74) (0.24)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD......... $ 10.77 $ 11.00 $ 12.60 $ 12.28
======= ======= ======= =======
Total Return (excludes sales charge)... 11.35% 0.04%(c) 18.15% 25.58%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).... $46,967 $50,903 $52,450 $39,196
Ratio of expenses to average net
assets............................ 1.18% 1.21%(d) 1.21% 1.37%(d)
Ratio of net investment income to
average net assets................ 2.18% 2.29%(d) 2.16% 2.38%(d)
Ratio of expenses to average net
assets*........................... 1.43% 1.46%(d) 1.46% 1.62%(d)
Portfolio turnover................... 47.31% 34.41% 70.46% 38.49%
</TABLE>
- ---------------
* During the year certain fees were voluntarily reduced. If such voluntary fee
reductions had not occurred, the ratios would have been as indicated.
(a) For the period from July 1, 1998 through March 31, 1999.
(b) Commencement of operations on September 25, 1996.
(c) Not Annualized.
(d) Annualized.
-32-
<PAGE> 33
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
FINANCIAL HIGHLIGHTS
REPRESENTS AN OUTSTANDING UNIT OF BENEFICIAL INTEREST.
<TABLE>
<CAPTION>
DIVERSIFIED EQUITY FUND
-----------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, MARCH 31, JUNE 30, JUNE 30,
2000 1999(A) 1998 1997(B)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 11.26 $ 13.31 $ 11.80 $ 10.00
------- ------- ------- -------
INVESTMENT ACTIVITIES:
Net investment loss................... (0.03) (0.02) (0.02) (0.01)
Net realized and unrealized gains
(losses) on investments............ 2.05 (0.11) 3.00 2.03
------- ------- ------- -------
Total from Investment Activities... 2.02 (0.13) 2.98 2.02
------- ------- ------- -------
DIVIDENDS:
Net realized gains.................... (1.96) (1.92) (1.47) (0.22)
------- ------- ------- -------
Total Dividends.................... (1.96) (1.92) (1.47) (0.22)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD.......... $ 11.32 $ 11.26 $ 13.31 $ 11.80
======= ======= ======= =======
Total Return (excludes sales charge).... 19.60% (0.59)%(c) 27.85% 20.42%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)..... $75,587 $85,361 $98,083 $74,990
Ratio of expenses to average net
assets............................. 1.33% 1.43%(d) 1.48% 1.62%(d)
Ratio of net investment loss to
average net assets................. (0.28)% (0.24)%(d) (0.18)% (0.10)%(d)
Ratio of expenses to average net
assets*............................ 1.62% 1.68%(d) 1.73% 1.87%(d)
Portfolio turnover.................... 104.36% 107.94% 95.13% 76.54%
</TABLE>
- ---------------
* During the year certain fees were voluntarily reduced. If such voluntary fee
reductions had not occurred, the ratios would have been as indicated.
(a) For the period from July 1, 1998 through March 31, 1999.
(b) Commencement of operations on September 23, 1996.
(c) Not Annualized.
(d) Annualized.
-33-
<PAGE> 34
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
FINANCIAL HIGHLIGHTS
REPRESENTS AN OUTSTANDING UNIT OF BENEFICIAL INTEREST.
<TABLE>
<CAPTION>
SPECIAL EQUITY FUND
-----------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, MARCH 31, JUNE 30, JUNE 30,
2000 1999(a) 1998 1997(b)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD... $ 9.18 $ 9.63 $ 9.59 $ 10.00
------- ------- ------- -------
INVESTMENT ACTIVITIES:
Net investment income (loss)......... ** ** ** **
Net realized and unrealized gains
(losses) on investments........... 4.60 (0.44) 0.17 (0.10)
------- ------- ------- -------
Total from Investment
Activities...................... 4.60 (0.44) 0.17 (0.10)
------- ------- ------- -------
DIVIDENDS:
Net investment income................ ** ** ** **
Net realized gains................... -- -- (0.13) --
In excess of net realized gains...... -- -- -- (0.31)
Tax return of capital................ -- (0.01) -- --
------- ------- ------- -------
Total Dividends................... -- (0.01) (0.13) (0.31)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD......... $ 13.78 $ 9.18 $ 9.63 $ 9.59
======= ======= ======= =======
Total Return (excludes sales charge)... 50.11% (4.55)%(c) 1.86% (1.03)%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).... $26,932 $30,946 $35,441 $30,524
Ratio of expenses to average net
assets............................ 1.25% 1.24%(d) 1.27% 1.39%(d)
Ratio of net investment income (loss)
to average net assets............. (0.01)% 0.02%(d) 0.04% 0.05%(d)
Ratio of expenses to average net
assets*........................... 1.50% 1.49%(d) 1.52% 1.65%(d)
Portfolio turnover................... 173.84% 247.95% 124.55% 152.81%
</TABLE>
- ---------------
* During the year certain fees were voluntarily reduced. If such voluntary fee
reductions had not occurred, the ratios would have been as indicated.
** Amount is less than $0.005
(a) For the period from July 1, 1998 through March 31, 1999.
(b) Commencement of operations on September 20, 1996.
(c) Not Annualized.
(d) Annualized.
-34-
<PAGE> 35
THE COVENTRY GROUP
1ST SOURCE MONOGRAM FUNDS
FINANCIAL HIGHLIGHTS
REPRESENTS AN OUTSTANDING UNIT OF BENEFICIAL INTEREST.
<TABLE>
<CAPTION>
INCOME FUND
-----------------------------------------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
MARCH 31, MARCH 31, JUNE 30, JUNE 30,
2000 1999(a) 1998 1997(b)
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD... $ 9.99 $ 10.34 $ 10.13 $ 10.00
------- ------- ------- -------
INVESTMENT ACTIVITIES:
Net investment income................ 0.55 0.41 0.60 0.44
Net realized and unrealized gains
(losses) on investments........... (0.46) (0.10) 0.21 0.12
------- ------- ------- -------
Total from Investment
Activities...................... 0.09 0.31 0.81 0.56
------- ------- ------- -------
DIVIDENDS:
Net investment income................ (0.56) (0.41) (0.60) (0.43)
Net realized gains................... -- (0.18) -- --
In excess of net realized gains...... -- (0.07) -- --
------- ------- ------- -------
Total Dividends................... (0.56) (0.66) (0.60) (0.43)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD......... $ 9.52 $ 9.99 $ 10.34 $ 10.13
======= ======= ======= =======
Total Return (excludes sales
charge)......................... 0.96% 3.00%(c) 8.24% 5.71%(c)
RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).... $57,311 $67,251 $65,975 $54,789
Ratio of expenses to average net
assets............................ 0.90% 0.92%(d) 0.92% 1.05%(d)
Ratio of net investment income to
average net assets................ 5.69% 5.23%(d) 5.90% 5.71%(d)
Ratio of expenses to average net
assets*........................... 1.15% 1.17%(d) 1.17% 1.30%(d)
Portfolio turnover................... 67.03% 301.44% 208.32% 118.33%
</TABLE>
- ---------------
* During the year certain fees were voluntarily reduced. If such voluntary fee
reductions had not occurred, the ratios would have been as indicated.
(a) For the period from July 1, 1998 through March 31, 1999.
(b) Commencement of operations on September 24, 1996.
(c) Not Annualized.
(d) Annualized.
-35-
<PAGE> 36
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To Trustees of
1st Source Monogram Funds:
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the 1st Source Monogram Income
Equity Fund, 1st Source Monogram Diversified Equity Fund, 1st Source Monogram
Special Equity Fund, and 1st Source Monogram Income Fund (separate portfolios
constituting 1st Source Monogram funds, hereafter referred to as the "Funds") at
March 31, 2000, the results of their operations for the year then ended, the
changes in their net assets for each of the two periods then ended, and their
financial highlights for each of the periods presented in conformity with
accounting principles generally accepted in the United States. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at March
31, 2000, by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Columbus, Ohio
May 22, 2000
-36-
<PAGE> 37
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 38
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 39
[1st Source Monogram Funds(SM) Logo] A N N U A L R E P O R T
INVESTMENT ADVISER
1st Source Bank
100 North Michigan Street
South Bend, IN 46601
DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219
[1st Source Monogram Funds(SM) Logo]
FOR ADDITIONAL INFORMATION, CALL:
1-800-766-8938
This material must be preceded or
accompanied by a current prospectus. Annual Report
March 31, 2000
5/00
