<PAGE>
THE MENTOR FUNDS
MANAGERS' COMMENTARY
MENTOR/CAMBRIDGE GROWTH PORTFOLIO
MENTOR CAPITAL GROWTH PORTFOLIO
Advised by Commonwealth Advisors, Inc.
The recent decline in interest rates sparked the initial stock rally
that gained momentum through-out the quarter as under-invested managers
succumbed to the pressure to be in the market. The S&P 500* gained more
than 9% in the first quarter, the best showing since early 1991.
The S&P 500 meaningfully outpaced every other broad index. The general
uncertainty stemming from the current economic transition kept investors focused
principally on the largest, most liquid and highest quality stocks. In other
words, while investors felt the pressure to be in the market, an uncertain
economic outlook steered them into the "safe" stocks. This flight to quality
explains the strong relative performance of the S&P 500, which is dominated by
larger companies.
The recent rise in the stock market has returned the S&P 500 to a more
reasonable valuation given current interest rates and inflation. During periods
of moderate inflation, these stocks have averaged a level of 15 to 16 times
their earnings. These stocks now trade at an average of 15.5 times their
current earnings. This basket of stocks appears -- on average -- to be fairly
valued.
The combined earnings of the companies of the S&P 500 have cycled around a
long-term growth trend of approximately 7%. After falling well behind the
growth trend by 1991, earnings have more than fully recovered. Looking forward,
we believe the surge in corporate earnings over the past three years has led
analysts to be too optimistic about future results. Ignoring the fact that the
economy is a series of ups and downs, the analyst community traditionally
projects recent trends forward into the future. For example, analysts are now
forecasting -- as a group -- average 1996 earnings of $42 for the companies in
the S&P 500. We believe that, given the increase in interest rates and its
moderating effect on the economy, such an aggregate level of earnings for these
companies is improbable. In our opinion, the majority of companies will not
meet earnings expectations over the next two years.
In this environment the key equity performance criteria will be earnings
stability and visibility -- distinctions that favor our "quality-growth"
approach. Investors are beginning once again to recognize growth companies'
superior sustainable earnings growth. Given our conviction that these companies
are much better prepared to meet expectations, we believe this recent strength
can continue.
John G. Davenport
PORTFOLIO MANAGER
*THE STANDARD & POOR'S 500 INDEX (S&P 500) IS AN UNMANAGED,
MARKET-VALUE WEIGHTED INDEX OF 500 WIDELY-HELD COMMON STOCKS.
<PAGE>
THE MENTOR FUNDS
MANAGERS' COMMENTARY
MENTOR QUALITY INCOME PORTFOLIO
Advised by Commonwealth Advisors, Inc.
On April 12, 1995, the Cambridge Government Income Portfolio
changed its name to Mentor Quality Income Portfolio. The Portfolio will
be managed by Commonwealth Advisors, Inc. and will target the 7-year
Treasury in determining its level of interest-rate-risk. However,
unlike a Treasury, the Portfolio's net asset value (NAV) is not
guaranteed and will fluctuate in value.
Average credit quality will remain high in the Portfolio; 80% of the total
assets must be invested in securities rated "A" or better, with the remaining
20% rated at least BBB. This compares with the previous credit policy requiring
65% of the assets be invested in government or agency securities, but allowing
35% to be invested in BBB rated securities. Allowing the Portfolio to diversify
assets across all of the high quality sectors of the bond market, should, over
time, help to reduce the Portfolio's risk and at the same time improve total
returns.
We believe that the outlook for the bond market for the balance of 1995 is
reasonably good. The Federal Reserve Bank has aggressively acted to contain
inflation, and the economy is showing signs of a slowdown. The bond market has
also received encouraging news on the budget deficit; both the House of
Representatives and the Senate have introduced budget resolutions that lead to a
balanced budget by the year 2002. This optimistic news must be tempered in part
by the tremendous rally that has already occurred during 1995. We will have to
wait and see whether lower interest rates will reignite the economic expansion.
Should growth pick up and interest rates increase, we would view it as a short-
term situation. The Fed proved in 1994 that it is serious about eliminating
inflation as a threat to the U.S. economy, and low inflation ultimately means
low interest rates.
Charles W. Grant P. Michael Jones
Portfolio Manager Portfolio Manager
COMMONWEALTH'S
BOND FUND PHILOSOPHY
At Commonwealth we follow two primary principals when managing
bond funds:
OUR FIRST PRIORITY IS RISK MANAGEMENT.
We seek to ensure that portfolio risk is held within a reasonable range
around the targeted risk level. Our intention is to provide net asset value
performance consistent with client expectations; an NAV that should go up as
expected in good markets, and decline no more than should be expected in bad
markets.
SECOND, WE SEEK AN ATTRACTIVE COMBINATION OF INCOME AND GOOD RELATIVE NAV
PERFORMANCE.
Commonwealth attempts to balance an investor's desire for added
income with the need to provide good NAV performance. Although
generating income is the primary objective of Mentor's bond funds, we
view that objective in a long-term context. Ultimately, good NAV
performance translates into a higher level of total income for long-term
investors.
<PAGE>
THE MENTOR FUNDS
MANAGERS' COMMENTARY
MENTOR MUNICIPAL INCOME PORTFOLIO
Sub-advised by Van Kampen American Capital
The fixed-income markets moved in a rather large range over the
last six months as they tried to digest various economic releases, and
wrestled with dollar-related problems. The 30-year US Treasury bond
contract hit a low of 94 27/32 on November 11 and a high of 104 30/32 on
March 27. The Municipal Bond Index* had a slightly wider range, with a
low of 80 26/32 and a high of 91 24/32. The market traded off as
inflation fears were prevalent in November. Subsequent economic numbers
indicated that the Federal Reserve's actions might, in fact, cause the
economy to experience a much discussed "soft landing," with slow growth
and low inflation.
The municipal market had a very light supply of new issues in 1994, down
45% when compared to 1993, and this trend appears to be continuing in 1995.
This light supply caused spreads between high-and low-quality bonds to be
extremely narrow. We purchased higher-quality bonds because we felt that we
were not being compensated for taking on additional credit risk. We also
purchased 15-to 20-year maturities and "cushion" bonds because these bonds were
yielding 85-90% of long bonds, but had only 65 to 75% of the price volatility.
We anticipate that this strategy will continue over the short term. If credit
spreads start to widen and approach more historical levels, we may start to look
at purchasing lower-quality bonds.
We expect the market to take a bit of a breather in the second quarter, but to
resume its upward bias, with a target of 6 3/4 to 7% on the 30-year US Treasury.
Municipal supply will continue to be a dominant topic through 1995.
David C. Johnson William V. Grady
Portfolio Manager Portfolio Manager
* THE MUNICIPAL BOND INDEX IS ADJUSTED TO REFLECT REINVESTMENT OF DIVIDENDS ON
SECURITIES IN THE INDEX. IT IS NOT ADJUSTED TO REFLECT SALES CHARGES OR OTHER
EXPENSES. YOU CAN NOT INVEST IN THE INDEX.
ALTERNATIVE MINIMUM TAXES MAY APPLY. CONSULT YOUR TAX ADVISOR.
<PAGE>
THE MENTOR FUNDS
MANAGERS' COMMENTARY
MENTOR INCOME & GROWTH PORTFOLIO
Sub-Advised by Wellington Management Company
Returns in the US equity and fixed-income markets surged sharply
over the past six months. These returns came as welcome news to
investors who experienced the disappointing returns of 1994. The U.S.
equity market, represented by the S&P 500 Index*, returned 9.7% during
the first quarter of 1995, and 9.7% for the past six months. U.S.
bonds, as measured by the Lehman Brothers Aggregate Index*, returned
5.0% for the first quarter and 5.4% over the last six months.
As of March 31, 1995, the Portfolio reflects our neutral stance to relative
valuations between the equity and fixed-income markets, with a 58% weighting in
equities, 36% in fixed-income securities, and a small weighting in cash.
EQUITY HOLDINGS
Wellington Management Company emphasizes value when investing on behalf
of the Portfolio. We seek companies that provide an above-average
total return which is available at a low price-earnings ratio. Even
though the stock market has surged to record levels, corporate earnings
have risen in tandem. Therefore, the stock market's price to earnings
ratio remains near its historical average.
We believe that investors have underestimated the current earnings
strength of value-oriented cyclical companies, especially those driven
by international demand. We continue to build positions in the energy
sector, primarily domestic gas producers, because we believe that energy
prices will recover, as world oil and gas production is nearing capacity
and exploration activity is not increasing rapidly enough to meet
long-term demand.
BOND HOLDINGS
Since our last report, the Federal Reserve has increased short-term
interest rates several times, slowing economic growth. In our view
interest rates are still attractive because inflation has been, and is
likely to remain, moderate when compared with market yields. The
majority of the fixed-income holdings of the portfolio are in Treasury
securities, which currently offer good value. Corporate bonds are
generally overvalued, particularly for issuers with low investment-grade
quality ratings. Most of our corporate bond holdings are therefore
concentrated in the high quality sector of the market. Mortgage
valuations are fair and we expect to re-establish positions in GNMA
issues with yields at current rates.
Arnold C. Schneider, III Paul D. Kaplan
EQUITY FIXED-INCOME
PORTFOLIO MANAGER PORTFOLIO MANAGER
*THE STANDARD & POOR'S 500 INDEX (S&P 500) IS AN UNMANAGED, MARKET-VALUE
WEIGHTED INDEX OF 500 WIDELY-HELD COMMON STOCKS. THE LEHMAN BROTHERS AGGREGATE
INDEX IS MADE UP OF THE GOVERNMENT/CORPORATE INDEX, THE MORTGAGE-BACKED
SECURITIES INDEX, AND THE ASSET-BACKED SECURITIES INDEX.
<PAGE>
THE MENTOR FUNDS
MANAGERS' COMMENTARY
MENTOR PERPETUAL GLOBAL PORTFOLIO
Advised by Mentor Perpetual Advisors
Mentor Perpetual Advisors, based in Henley-on-Thames, England,
is the new manager for the Mentor Perpetual Global Portfolio. Founded
in 1974, Perpetual manages over $6 billion worldwide and is well-known
as a leader in global investing.
In April, Perpetual assumed responsibility for managing the Mentor Perpetual
Global Portfolio. The company is founded on the belief that investors should
diversify and invest in countries all over the world, including the United
States.
A key factor to fund managers' success in this strategy is their ability to
invest in the countries that present the best opportunity at any given time.
Following research, technology, and benchmark comparisons, our Asset Allocation
Committee meets monthly - more frequently when necessary - to determine which
world markets appear most attractive and we allocate assets accordingly. When
determining which countries' markets look most attractive, we also consider how
our management teams in each country have performed relative to benchmarks and
to our competition.
EUROPE/ UK
55% OF THE PORTFOLIO*
The recent upward struggle in the European markets has an unconvincing feel to
it. The unexpected cut in German interest rates and a recovery in the dollar
have been the main factors contributing to the market's gentle upward movement.
While these factors are not sufficient to inspire a strong bull market, the
recent onset of bond market stability will hopefully limit the downside for
European equities.
With authorities anxious to keep inflation under control, the UK monetary
environment has tightened as the economic recovery continues. The
UK stock market has made progress this year as investors wait for a clear
indication that interest rates have peaked. If rates decrease to lower than
anticipated as we suspect they will, useful gains can be expected, given the
market's current relatively modest valuation.
FAR EAST
22% OF THE PORTFOLIO*
Asian markets continue to trade nervously and inconsistently, despite the
positive influence of US interest rates and Wall Street at a record high. The
Japanese Government's recent package of measures to stabilize the Yen is
disappointing. With the Yen at a current premium to the US Dollar, the economy
is likely to be pushed back into recession causing the corporate profits
recovery of the past six months to be aborted. Although interest rates are
coming down, the Japanese stock market is unlikely to make any headway until
investors become convinced that the peak in the Yen has been seen. The
composite regional picture is one of high absolute economic and earnings growth,
less threatening interest rates, and valuations which have come down
considerably. Markets represent good value and tend to be oversold, but an
absence of positive stimuli suggests a continued sideways trading pattern.
AMERICA
17% OF THE PORTFOLIO*
A theme of improving performance is still apparent in the US stock market and we
continue with a positive outlook. The impact of the Mexican aid package and a
slowing of the US economy combined to weaken the
<PAGE>
dollar; however, given signs that interest rates have peaked, and the
possibility of rate cuts on the horizon, we see increased potential for a strong
stock market. In this situation smaller companies will be the first to improve
after a year of lagging behind mainstream stocks.
LATIN AMERICA
1% OF THE PORTFOLIO*
It appears that Latin America has weathered the worst of the recent turbulence
in its markets. For the past month these regional markets have enjoyed a period
of stable trading, with a gradual upwards trend based on decent volumes. Peru
and Chile remain the most steady markets, while some concern exists over
Argentina regarding its banking sector risk. Structural reforms in Brazil could
lead to positive movements in this market. In Mexico officials have announced a
new monetary policy which has slowly begun to instill investor confidence in
selected sectors in this country.
Markets around the world operate under different rules. At Perpetual, we
recognize this and do not restrict our managers to a specific investment style.
Each investment team has complete autonomy with regard to portfolio strategy and
investment style so that they can best take advantage of the growth
opportunities that exist in their region of the world. It is each team's charge
to research the markets and invest in companies that they believe should
increase in value over time. While this strategy seems logical, it has been a
unique feature that distinguishes us from our competition.
We believe that this strategy will serve Mentor investors well and we at
Perpetual look forward to putting our skills to work on your behalf.
Scott S. McGlashan
PORTFOLIO MANAGER
HEAD OF JAPANESE INVESTMENTS
*AS OF MAY 12, 1995
INVESTORS NEED TO KEEP IN MIND THAT INVESTMENTS OUTSIDE THE UNITED STATES
ARE SUBJECT TO SOME ADDITIONAL CONSIDERATIONS, INCLUDING CURRENCY FLUCTUATIONS,
POLITICAL AND SOCIAL INSTABILITY, DIFFERING SECURITIES REGULATIONS AND
ACCOUNTING STANDARDS, POSSIBLE CHANGES IN TAXATION, AND PERIODS OF ILLIQUIDITY.
<PAGE>
PERFORMANCE COMPARISONS
MENTOR/CAMBRIDGE GROWTH PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL
$10,000 PURCHASE IN MENTOR/CAMBRIDGE GROWTH
PORTFOLIO CLASS A AND CLASS B SHARES AND S&P 500+.
Points
Date A Shares B Shares S&P 500
4/29/92 9,450 10,000 10,000
9/30/92 9,417 9,965 10,140
9/30/93 11,141 11,700 11,139
9/30/94 9,799 10,240 11,230
3/31/95 10,440 10,874 12,320
Return
1 Year (2.86%) 1.05%
Inception 1.43% 2.83%
AVERAGE ANNUAL TOTAL RETURNS AT 3/31/94
INCLUDING SALES CHARGES
1 Year Since Inception*
Class A Shares (2.86%) 1.43%
Class B Shares 1.05% 2.83%
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
QUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Reflects operations of Mentor/Cambridge Growth Portfolio Class A
and Class B Shares from the date of initial public investment 4/29/92
through 3/31/95.
** Represents a hypothetical investment of $10,000 in
Mentor/Cambridge Growth Portfolio Class A Shares, after deducting
the maximum sales charge of 5.50% ($10,000 investment minus
$550 sales charge = $9,450). The Class A Shares' performance
assumes the reinvestment of all dividends and distributions.
*** Represents a hypothetical investment of $10,000 in
Mentor/Cambridge Growth Portfolio Class B Shares. Class B Shares
are charged a redemption fee of 1.00% on any redemption less than
1 year from the purchase date. The Class B Shares' performance
assumes the reinvestment of all dividends and distributions.
+ The S&P 500 is adjusted to reflect reinvestment of dividends on secu-
rities in the index. The S&P 500 is not adjusted to reflect sales loads,
expenses, or other fees that the SEC requires to be reflected in the
Portfolio's performance.
PERFORMANCE COMPARISONS
MENTOR CAPITAL GROWTH PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL
$10,000 PURCHASE IN MENTOR CAPITAL GROWTH PORTFOLIO
CLASS A AND CLASS B SHARES AND S&P 500+.
Points
Date A Shares B Shares S&P 500
4/29/92 9,450 10,000 10,000
9/30/92 9,525 10,061 10,140
9/30/93 10,306 10,818 11,139
9/30/94 10,165 10,601 11,230
3/31/95 10,921 11,402 12,320
Return
1 Year 4.15% 8.37%
Inception 2.97% 4.26%
AVERAGE ANNUAL TOTAL RETURNS AT 3/31/94
INCLUDING SALES CHARGES
1 Year Since Inception*
Class A Shares 4.15% 2.97%
Class B Shares 8.37% 4.26%
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
QUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Reflects operations of Mentor Capital Growth Portfolio Class A and
Class B Shares from the date of initial public investment 4/29/92
through 3/31/95.
** Represents a hypothetical investment of $10,000 in Mentor Capital
Growth Portfolio Class A Shares, after deducting the maximum sales
charge of 5.50% ($10,000 investment minus $550 sales charge =
$9,450). The Class A Shares' performance assumes the reinvestment
of all dividends and distributions.
*** Represents a hypothetical investment of $10,000 in Mentor Capital
Growth Portfolio Class B Shares. Class B Shares are charged a
redemption fee of 1.00% on any redemption less than 1 year from
the purchase date. The Class B Shares' performance assumes the rein-
vestment of all dividends and distributions.
+ The S&P 500 is adjusted to reflect reinvestment of dividends on secu-
rities in the index. The S&P 500 is not adjusted to reflect sales loads,
expenses, or other fees that the SEC requires to be reflected in the
Portfolio's performance.
<PAGE>
PERFORMANCE COMPARISONS
MENTOR QUALITY INCOME PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL
$10,000 PURCHASE IN MENTOR QUALITY INCOME PORTFOLIO
CLASS A AND CLASS B SHARES AND MERRILL LYNCH 5-YEAR
TREASURY INDEX+.
Points
Date A Shares B Shares 5 Year Treasury
4/29/92 9,525 10,000 10,000
9/30/92 9,846 10,324 10,946
9/30/93 10,378 10,826 11,869
9/30/94 10,035 10,405 11,354
3/31/95 10,502 10,790 11,769
Return
1 Year (1.35%) 1.95%
Inception 1.43% 2.56%
AVERAGE ANNUAL TOTAL RETURNS AT 3/31/94
INCLUDING SALES CHARGES
1 Year Since Inception*
Class A Shares (1.35%) 1.43%
Class B Shares 1.95% 2.56%
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
QUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Reflects operations of Mentor Quality Income Portfolio Class A and
Class B Shares from the date of initial public investment 4/29/92
through 3/31/95.
** Represents a hypothetical investment of $10,000 in Mentor Quality
Income Portfolio Class A Shares, after deducting the maximum sales
charge of 4.75% ($10,000 investment minus $475 sales charge =
$9,525). The Class A Shares' performance assumes the reinvestment
of all dividends and distributions.
*** Represents a hypothetical investment of $10,000 in Mentor Quality
Income Portfolio Class B Shares. Class B Shares are charged a
redemption fee of 1.00% on any redemption less than 1 year from
the purchase date. The Class B Shares' performance assumes the rein-
vestment of all dividends and distributions.
+ The Merrill Lynch 5-Year Treasury Index is adjusted to reflect rein-
vestment of dividends on securities in the index. The Merrill Lynch 5-
Year Treasury Index is not adjusted to reflect sales loads, expenses, or
other fees that the SEC requires to be reflected in the Portfolio's per-
formance.
MENTOR MUNICIPAL INCOME PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL
$10,000 PURCHASE IN MENTOR MUNICIPAL INCOME
PORTFOLIO CLASS A AND CLASS B SHARES AND LEHMAN
MUNICIPAL BOND INDEX+.
Points Lehman Municipal
Date A Shares B Shares Bond Index
4/29/92 9,525 10,000 10,000
9/30/92 10,034 10,528 10,846
9/30/93 11,639 12,136 12,874
9/30/94 11,101 11,512 12,436
3/31/95 11,649 12,060 13,124
Return
1 Year 1.19% 4.69%
Inception 5.22% 6.44%
AVERAGE ANNUAL TOTAL RETURNS AT 3/31/94
INCLUDING SALES CHARGES
1 Year Since Inception*
Class A Shares 1.19% 5.22%
Class B Shares 4.69% 6.44%
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY
BE WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF
OR QUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Reflects operations of Mentor Municipal Income Portfolio Class A
and Class B Shares from the date of initial public investment 4/29/92
through 3/31/95.
** Represents a hypothetical investment of $10,000 in Mentor
Municipal Income Portfolio Class A Shares, after deducting the maxi-
mum sales charge of 4.75% ($10,000 investment minus $475 sales
charge = $9,525). The Class A Shares' performance assumes the rein-
vestment of all dividends and distributions.
*** Represents a hypothetical investment of $10,000 in Mentor
Municipal Income Portfolio Class B Shares. Class B Shares are
charged a redemption fee of 1.00% on any redemption less than 1
year from the purchase date. The Class B Shares' performance
assumes the reinvestment of all dividends and distributions.
+ The Lehman Municipal Bond Index is adjusted to reflect reinvestment
of dividends on securities in the index. The Lehman Municipal Bond
Index is not adjusted to reflect sales loads, expenses, or other fees that
the SEC requires to be reflected in the Portfolio's performance.
<PAGE>
PERFORMANCE COMPARISONS
MENTOR INCOME & GROWTH PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL
$10,000 PURCHASE IN MENTOR INCOME & GROWTH
PORTFOLIO CLASS A AND CLASS B SHARES AND S&P 500+
AND SHEARSON LEHMAN AGGREGATE BOND INDEX+.
Points
Date A Shares B Shares S&P 500* SLAGG*
5/31/93 9,450 10,000 10,000 10,000
9/30/93 9,928 10,506 10,244 10,446
9/30/94 10,578 11,101 10,328 10,109
3/31/95 10,932 11,431 11,331 10,659
Return
1 Year 2.74% 6.88%
Inception 4.94% 7.37%
AVERAGE ANNUAL TOTAL RETURNS AT 3/31/94
INCLUDING SALES CHARGES
1 Year Since Inception*
Class A Shares 2.74% 4.94%
Class B Shares 6.88% 7.37%
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED,
THEY MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE
NOT OBLIGATIONS OF OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY
INSURED.
* Reflects operations of Mentor Income & Growth Portfolio Class A and
Class B Shares from the date of initial public investment 5/9/93
through 3/31/95. The date of initial public investment was May 24,
1993. Performance begins May 31, 1993 to show competitive data.
** Represents a hypothetical investment of $10,000 in Mentor Income &
Growth Portfolio Class A Shares, after deducting the maximum sales
charge of 5.50% ($10,000 investment minus $550 sales charge = $9,450).
The Class A Shares' performance assumes the reinvestment of all
dividends and distributions.
*** Represents a hypothetical investment of $10,000 in Mentor Income &
Growth Portfolio Class B Shares. Class B Shares are charged a redemption
fee of 1.00% on any redemption less than 1 year from the purchase
date. The Class B Shares' performance assumes the reinvestment of all
dividends and distributions.
+ The Shearson Lehman Aggregate Bond Index and S&P 500 are adjusted to
reflect reinvestment of dividends on securities in the indices. The
Shearson Lehman Aggregate Bond Index and S&P 500 are not adjusted to
reflect sales loads, expenses, or other fees that the SEC requires
to be reflected in the Portfolio's performance.
PERFORMANCE COMPARISONS
MENTOR PERPETUAL GLOBAL PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL
$10,000 PURCHASE IN MENTOR PERPETUAL GLOBAL
PORTFOLIO CLASS A AND CLASS B SHARES AND MORGAN
STANLEY CAPITAL INTERNATIONAL+.
Points
Date A Shares B Shares MSCI World Gross Index
3/30/94 9,450 10,000 10,000
9/30/94 9,487 9,883 10,545
3/31/95 9,313 9,764 10,985
Return
1 Year (6.80%) (3.31%)
Inception (6.33%) (2.17%)
AVERAGE ANNUAL TOTAL RETURNS AT 3/31/94
INCLUDING SALES CHARGES
1 Year Since Inception*
Class A Shares (6.80)% (6.33)%
Class B Shares (3.31)% (2.17)%
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED,
THEY MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE
NOT OBLIGATIONS OF OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY
INSURED.
* Reflects operations of Mentor Perpetual Global Portfolio Class A and
Class B Shares from the date of initial public investment 3/29/94
through 3/31/95.
** Represents a hypothetical investment of $10,000 in Mentor Perpetual
Global Portfolio Class A Shares, after deducting the maximum sales
charge of 5.50% ($10,000 investment minus $550 sales charge =
$9,450). The Class A Shares' performance assumes the reinvestment
of all dividends and distributions.
*** Represents a hypothetical investment of $10,000 in Mentor Perpetual
Global Portfolio Class B Shares. Class B Shares are charged a
redemption fee of 1.00% on any redemption less than 1 year from the
purchase date. The Class B Shares' performance assumes the reinvestment
of all dividends and distributions.
+ The Morgan Stanley Capital International is adjusted to reflect
reinvestment of dividends on securities in the index. The Morgan
Stanley Capital International is not adjusted to reflect sales
loads, expenses, or other fees that the SEC requires to be reflected
in the Portfolio's performance.
<PAGE>
MENTOR/CAMBRIDGE GROWTH FUND
PORTFOLIO OF INVESTMENTS
MARCH 31, 1995 (UNAUDITED)
PERCENT OF
NET ASSETS SHARES VALUE
COMMON STOCKS 99.83%
BASIC MATERIALS 6.83%
Air Products & Chemicals, Inc. 8,000 $ 417,000
Alco Standard Corporation 9,000 652,500
Monsanto Company 6,500 521,625
Newell Company 26,000 663,000
Nucor Corporation 3,000 166,500
Scott Paper Company* 1,500 134,063
2,554,688
CAPITAL GOODS & CONSTRUCTION 5.46%
Boeing Company 2,500 134,688
Emerson Electric Company 8,900 591,850
General Electric Company 15,500 838,938
Grainger, Inc. 4,500 283,500
WMX Technologies, Inc. 7,000 192,500
2,041,476
CONSUMER CYCLICAL 15.48%
Ann Taylor Stores, Inc.* 7,700 286,825
CUC International, Inc.* 6,900 268,238
Duracell International, Inc. 3,500 156,625
Franklin Quest Company* 11,500 362,250
Home Depot, Inc. 17,300 765,525
Manpower, Inc. 19,500 626,437
McDonald's Corporation 10,000 341,250
Office Depot, Inc.* 10,800 268,650
Promus Companies, Inc. 9,500 356,250
Starbucks Corporation* 14,000 336,000
The Walt Disney Company 10,000 533,750
Viacom, Inc.-Class B* 7,909 353,928
Viking Office Products, Inc.* 9,000 279,000
Wal-Mart Stores, Inc. 33,600 856,800
5,791,528
CONSUMER STAPLES 15.89%
Abbott Laboratories 22,100 787,312
Campbell Soup Company 8,800 425,700
Coca Cola Company 14,000 791,000
Colgate Palmolive Company 6,100 402,600
Conagra, Inc. 11,000 364,375
CPC International, Inc. 5,000 270,625
Gillette Company 5,000 408,125
Pepsico, Inc.* 4,000 156,000
Philip Morris Companies, Inc. 9,900 645,975
Procter & Gamble Company 12,000 795,000
Sara Lee Corporation* 16,100 420,613
Seagram Company, Limited* 6,000 190,500
UST, Inc. 9,000 285,750
5,943,575
ENERGY 2.23%
Enron Corporation 16,900 557,700
Mobile Corporation 3,000 277,875
835,575
FINANCIAL 11.70%
American International Group, Inc.* 3,700 385,725
Boatmen's Bancshares, Inc. 13,000 393,250
Conseco, Inc. 3,300 131,588
First Financial Management Corp. 10,000 722,500
First USA, Inc. 12,100 508,200
General RE Corporation 3,400 448,800
MBNA Corporation 23,500 681,500
MGIC Investment Corporation 15,900 647,925
Nationsbank Corporation 9,000 456,750
4,376,238
HEALTH 15.70%
Columbia HCA Healthcare Corp. 10,000 430,000
Idexx Laboratories, Inc.* 5,000 207,500
Integrated Health Services, Inc.* 8,500 321,937
Johnson & Johnson 15,000 892,500
Lilly (Eli) & Company* 3,000 219,375
Medtronic, Inc. 9,600 666,000
Merck & Company, Inc.* 20,000 852,500
Pfizer, Inc. 4,000 343,000
R.P. Scherer Corporation 4,800 241,200
<PAGE>
Schering Plough Corporation 6,600 490,875
United Healthcare Corporation 7,500 350,625
US Healthcare, Inc. 6,500 287,625
Value Health, Inc.* 6,500 248,625
Warner Lambert Company 4,100 320,825
5,872,587
TECHNOLOGY 17.52%
3COM Corporation* 7,200 407,700
Adobe Systems, Inc.* 3,000 148,500
AMP Inc.* 11,000 396,000
AT&T Corporation 10,400 538,200
Cisco Systems, Inc.* 3,000 114,375
Compuware Corporation* 10,000 370,000
First Data Corporation 7,600 394,250
General Motors Corporation - Class E 10,400 404,300
Hewlett Packard Company 4,000 481,500
Informix Corporation* 10,000 343,750
Intel Corporation* 2,500 212,188
LDDS Communications, Inc. 6,000 140,250
Linear Technology Corporation 7,000 392,000
Loral Corporation 6,000 255,000
Microsoft Corporation* 5,000 355,625
Motorola, Inc. 6,000 327,750
Reynolds & Reynolds Company 10,000 275,000
Silicon Graphics, Inc.* 15,000 532,500
Tellabs, Inc.* 8,000 466,000
6,554,888
TRANSPORTATION & SERVICES 1.64%
Kansas City Southern Industries, Inc. 5,800 235,625
Wisconsin Central Transport* 7,900 376,238
611,863
MISCELLANEOUS 2.85%
Corning Inc.* 12,000 432,000
Flour Corporation* 5,000 241,250
Service Corporation International* 14,000 392,000
1,065,250
FOREIGN SECURITIES 4.53%
AAlberts Industries 400 $ 21,053
Amada Company, Ltd. 5,000 53,053
Astra AB A-F 1,500 39,840
Atlas Copco AB 2,800 33,769
British Petroleum Company 8,440 58,801
Carrefour Supermarch 60 30,325
DBS Land 4,000 10,655
DDI Corporation 6 51,843
Ericsson 1,295 80,460
Gambro AB 1,600 18,646
Genting Berhad 2,000 18,029
Glaxo PLC 3,000 34,396
Greencore Group PLC 3,000 20,541
Hagemeyer NV 300 25,146
Honda Motors Company 3,000 51,152
Keiyo Company 2,000 22,926
Keppel Corporation 5,000 40,383
Koninklijke Van Ommeren 600 20,741
Kyocera Corporation 1,000 74,424
Lloyds Bank PLC 2,400 24,009
Manweb PLC 2,500 26,187
Matsushita Electric 3,000 48,387
Marui Company, Ltd. 2,000 31,567
Nestle 30 29,284
Nokia AB 433 63,109
Omron Corporation 2,000 39,401
Polygram NV 600 33,294
Reed International PLC 3,500 44,051
Repsol SA 1,400 39,747
Road Builder Holdings 2,200 7,089
Roche Holding AG-GEN 10 57,774
Sandvik AB B-F 645 10,226
Sanyo Shinpan Finance Company 600 47,143
Sharp Corporation 3,000 48,733
Singapore Press Holdings 1,000 16,932
Sumitomo Bank 2,000 42,627
Sumitomo Corporation 3,000 27,304
Tabcorp Holdings, Ltd. 7,900 16,026
Technology Resources Industries 4,900 14,046
Telewest Communications 1,000 2,777
Tesco PLC 5,000 21,680
<PAGE>
TNT Ltd. 12,300 16,092
Tokyo Electron, Ltd. 3,000 91,244
Unilever NV 160 20,980
Veba AG 200 72,555
Vodafone Group PLC 16,462 53,068
Wai Kee Holdings 52,000 8,339
Waterford Wedgewood 21,000 18,058
Wolter Kluwer 225 17,354
1,695,266
TOTAL COMMON STOCKS
(COST $32,332,447) 37,342,934
TOTAL INVESTMENTS
(COST $32,332,447) 99.83% 37,342,934
OTHER ASSETS LESS LIABILITIES 0.17% 63,976
NET ASSETS 100.00% $37,406,910
* Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
MENTOR CAPITAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1995 (UNAUDITED)
PERCENT OF
NET ASSETS SHARES VALUE
COMMON STOCKS 90.80%
CAPITAL GOODS & CONSTRUCTION 10.15%
Boeing Company* 17,000 $ 915,875
Brown Boveri & Cie 800 760,424
Browning Ferris Industries, Inc. 30,000 1,020,000
McDonnell Douglas Company* 10,000 557,500
PPG Industries, Inc. 20,000 755,000
Raytheon Company 17,000 1,238,875
United Technologies Corporation 10,000 691,250
5,938,924
CONSUMER CYCLICAL 16.59%
Capital Cities/ABC 11,000 970,750
Carnival Corporation 50,000 1,168,750
Harcourt General, Inc. 20,000 780,000
Home Depot, Inc. 25,000 1,106,250
LVMH Moet Hennessy 4,000 786,816
Marriott International, Inc. 31,500 1,094,625
Nike Inc. / B* 11,500 858,187
Staples, Inc.* 14,000 369,250
Starbucks Corporation 20,000 480,000
The Walt Disney Company* 20,000 1,067,500
Viacom, Inc.- Class B* 23,000 1,029,250
9,711,378
CONSUMER STAPLES 10.06%
Abbott Laboratories 30,000 1,068,750
Astra AB 25,000 663,997
CPC International Industries* 15,000 811,875
Gillette Company* 10,000 816,250
Merck & Company, Inc. 28,000 1,193,500
Philip Morris Companies, Inc. 20,500 1,337,625
5,891,997
ENERGY 11.98%
Amoco Corporation* 20,000 1,272,500
British Petroleum PLC, ADS+ 9,000 754,875
Chevron Corporation 12,500 600,000
Dresser Industries, Inc. 50,000 1,062,500
Enron Corporation 25,000 825,000
<PAGE>
Mobil Corporation 14,000 1,296,750
Royal Dutch Petroleum Company 10,000 1,200,000
7,011,625
FINANCIAL 1.48%
First Financial Management Corp.* 12,000 867,000
HEALTH 11.05%
American International* 10,000 1,042,500
CIGNA Corporation* 17,500 1,308,125
Columbia/HCA Healthcare Corp. 29,000 1,247,000
Coram Healthcare Corporation 10,000 253,750
Humana Inc. 37,500 960,938
United Healthcare Company* 15,000 701,250
Value Health Inc.* 25,000 956,250
6,469,813
TECHNOLOGY 21.55%
3Com Corporation* 10,000 566,250
Archer Daniels Company* 33,750 628,594
Bay Network, Inc. 21,500 792,812
Cisco Systems, Inc.* 22,500 857,813
Computer Associates International,
Inc. 15,000 890,625
Compuware Corporation 17,500 647,500
Emerson Electric Company* 15,000 997,500
Ericsson Telecommunication Company 10,000 618,125
General Motors Corporation - Class E 22,000 1,190,750
Hewlett Packard Company 6,500 782,438
Intel Corporation* 7,500 636,563
Motorola Inc.* 14,000 764,750
Parametric Technology Corporation* 10,000 400,000
Perkin-Elmer Corporation 15,000 436,875
Philips Electronics Holdings Company 20,000 682,500
Sun Microsystems, Inc. 22,500 781,875
Xerox Corporation 8,000 939,000
12,613,970
UTILITIES 3.30%
Ameritech Corporation 27,500 1,134,375
Royal PTT Nederland 22,500 798,246
1,932,621
MISCELLANEOUS 4.64%
ITT Corporation 10,000 $1,026,250
Nabisco Holdings Corporation 25,000 715,625
Smithkline Beecham-A* 26,000 975,000
2,716,875
TOTAL COMMON STOCKS
(COST $47,299,787) 53,154,203
PREFERRED STOCKS 0.62%
Nokia AB (cost $202,825) 2,500 364,372
SHORT-TERM INVESTMENTS 9.75%
COMMERCIAL PAPER 7.40%
Abbott Labs, 5.96%, 5/3/95 $ 243,000 241,793
Mcdonald's, 6.00%, 4/10/95 1,500,000 1,498,250
Wal-Mart Discount Stores,
6.10%, 4/13/95 1,295,000 1,292,806
Warner Lambert, 5.98%, 4/24/95 1,305,000 1,300,447
TOTAL COMMERCIAL PAPER 4,333,296
U.S. GOVERNMENT AGENCY 2.35%
Federal National Mortgage
Association, 6.00%, 4/3/95 1,375,000 1,375,000
TOTAL SHORT-TERM INVESTMENTS
(COST $5,708,296) 5,708,296
TOTAL INVESTMENTS
(COST $53,210,908) 101.17% 59,226,871
OTHER ASSETS LESS LIABILITIES (1.17%) (687,327)
NET ASSETS 100.00% $58,539,544
* Non-income producing.
+ American Depository Receipts.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MENTOR QUALITY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1995 (UNAUDITED)
PERCENT OF PRINCIPAL
NET ASSETS AMOUNT VALUE
LONG-TERM INVESTMENTS 95.81%
U.S. GOVERNMENT
AND FEDERAL AGENCIES 62.25%
FEDERAL HOME LOAN
MORTGAGE CORPORATION 18.22%
10.00%, 3/1/21 $ 1,387,326 $ 1,473,909
6.75%, 5/15/21 3,000,000 2,704,680
7.38%, 7/1/21 2,961,602 2,906,072
7.43%, 12/1/21 992,123 976,156
9.50%, 12/1/22 694,510 725,110
CMO, IO, 9.98%, 7/15/06 48,390 1,073,814
CMO, IO, 11.66%, 7/15/07 46,606 694,736
IO, REMIC, 4.60%, 12/15/08 6,545,152 196,355
IO, REMIC, 6.50%, 6/15/16 8,160,412 973,512
CMO, IO, 11.65%, 11/15/16 104,389 2,026,647
IO, REMIC, 7.00%, 5/15/23 17,098,277 3,052,309
16,803,300
FEDERAL NATIONAL MORTGAGE
ASSOCIATION 1.89%
11.00%, 12/1/20 402,598 437,322
IO, 7.00%, 3/25/14 5,152,317 359,455
IO, 4.85%, 1/25/24 5,243,373 199,494
IO, 4.00%, 3/25/24 17,013,494 745,670
1,741,941
FEDERAL NATIONAL MORTGAGE
ASSOCIATION - REMIC 6.96%
8.00%, 1991 Class 155ZA,
2/25/17 2,805,807 2,798,793
6.15%, 1993 Class 160AG,
12/25/20 2,000,000 1,833,120
6.50%, 1993 Class 189PK,
3/25/22 2,000,000 1,788,120
6,420,033
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION 33.09%
12.00%, 12/15/12 - 5/15/15 2,806,268 3,143,020
11.50%, 2/15/13 - 6/20/19 531,357 582,283
10.50%, 5/20/14 - 6/15/19 2,529,923 2,715,626
11.00%, 1/15/16 - 6/15/21 2,702,190 2,959,656
6.50%, 8/20/22 - 11/15/23 2,286,960 2,150,207
9.00%, 1/15/28 2,835,730 2,911,926
9.50%, 9/15/10 - 1/15/28 4,999,101 5,205,314
8.75%, 1/15/28 - 5/15/28 4,383,516 4,399,955
10.00%, 5/15/24 - 7/15/28 4,009,461 4,260,508
9.75%, 2/15/29 2,057,516 2,184,568
30,513,063
TREASURY SECURITIES 2.09%
U.S. Treasury Note, 6.38%,
1/15/00 1,980,000 1,924,006
TOTAL U.S. GOVERNMENT AND
FEDERAL AGENCIES 57,402,343
CORPORATE BONDS 18.93%
CONSUMER NON-DURABLES 3.92%
RJR Nabisco, Inc., 8.30%,
4/15/99 3,600,000 3,618,000
FINANCE 4.78%
Banesto Finance, 7.31%, 4/25/03 1,000,000 1,002,900
Salamon, Inc., 6.87% - 9.00%,
7/1/95 - 11/21/96 3,400,000 3,400,769
4,403,669
TRANSPORTATION 5.97%
American Airlines, 9.78%,
11/26/11 5,000,000 5,506,565
UTILITIES 1.10%
Long Island Lighting, 8.75%,
5/1/96 1,000,000 1,014,528
MISCELLANEOUS 3.16%
BRW Real Estate Operating
Company, 5.69%, 12/1/98
(3/24/94, $1,189,483) (a) (b) 1,192,464 1,189,111
General Motors Acceptance
Corporation, 8.13%, 1/27/97 1,700,000 1,723,137
2,912,248
<PAGE>
TOTAL CORPORATE BONDS $ 17,455,010
COLLATERALIZED MORTGAGE
OBLIGATIONS 12.38%
Prudential Home Mortgage
Securities Corporation, Series
1992-34, 6.50%, 11/25/07 $ 3,000,000 $ 2,882,790
Prudential Home Mortgage
Securities Corporation, Series
1993-15, 11.50%, 5/25/08 3,208,481 3,395,977
Resolution Trust Corporation,
Series 1992-C5, 6.90%, 5/25/22 (a) 1,586,817 1,514,915
Resolution Trust Corporation,
Series 1992-C1, 8.80%, 8/25/23 (a) 2,927,286 2,964,794
Sears Mortgage Securities
Corporation, Series 1992-9,
7.15%, 10/25/21 (a) 647,678 656,887
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS 11,415,363
MORTGAGES 2.25%
Chase Mortgage Finance
Corporation, IO, Series 1994-F,
2.50%, 3/25/25 10,511,000 664,328
Prudential Home Mortgage
Securities Corporation, IO,
Series 1993-63, 6.75%, 1/25/24 4,451,111 911,525
Residential Funding Mortgage
Securities, IO, 6.50%, 3/25/09 2,912,931 505,446
TOTAL MORTGAGES 2,081,299
TOTAL LONG-TERM INVESTMENTS
(COST $90,608,302) 88,354,015
SHORT-TERM INVESTMENTS 4.57%
COMMERICAL PAPER 3.78%
U.S. West Communications,
5.95%, 4/20/95 3,500,000 3,490,166
TIME DEPOSIT 0.42%
United Missouri Bank,
5.07%, 4/3/95 383,000 383,000
TREASURY SECURITIES 0.37%
U.S. Treasury Bills,
5.10% - 5.87%, 4/6/95 - 5/4/95 $340,000 $339,794
TOTAL SHORT-TERM INVESTMENTS
(COST $4,212,960) 4,212,960
TOTAL INVESTMENTS
(COST $94,821,262) 100.38% 92,566,975
OTHER ASSETS LESS LIABILITIES (0.38%) (349,875)
NET ASSETS 100.00% $92,217,100
Investment abbreviations
CMO - Collateralized Mortgage Obligation
IO - Interest Only
REMIC - Real Estate Mortgage Investment Conduit
(a) Securities are valued based upon their fair value determined under
procedures approved by the Board of Trustees. At March 31, 1995, the fair
value of these securities was $6,325,707 (6.9% of net assets).
(b) All or a portion of these securities are restricted (i.e. securities which
may not be publicly sold without registration under the Federal Securities
Act of 1933). Dates of acquisition and costs are set forth in parentheses
after the title of the restricted securities.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MENTOR MUNICIPAL INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1995 (UNAUDITED)
PERCENT OF PRINCIPAL
NET ASSETS AMOUNT VALUE
LONG-TERM MUNICIPAL
SECURITIES 97.86%
ARIZONA 3.40%
Pima County Arizona,
7.25%, 7/15/10 $ 2,000,000 $ 2,194,160
CALIFORNIA 8.49%
California Educational
Facilities, College of
Osteopathic Medicine,
7.50%, 6/1/18 985,000 1,008,748
Carson Improvement Board
Act 1915, Special
Assessment District 92,
7.38%, 9/2/22 740,000 760,076
Los Angeles Convention,
Series A, 5.13%, 8/15/21 1,750,000 1,539,947
Orange County Community
Facilities District, Series A,
7.35%, 8/15/18 300,000 346,968
San Francisco City Sewer
Revenue Refunding, 5.38%,
10/1/22 2,000,000 1,822,660
5,478,399
COLORADO 5.55%
Colorado HFA, SFM,
Series A-3, 7.00%, 11/1/24 655,000 671,512
Denver City & County
Airport Revenue,
7.75%, 11/15/13 1,000,000 1,081,630
Denver City & County
Airport Revenue,
8.50%, 11/15/23 1,700,000 1,830,679
3,583,821
DISTRICT OF COLUMBIA 1.28%
Metropolitan Washington,
General Airport Revenue,
Series A, 6.63%, 10/1/19 800,000 825,872
FLORIDA 5.09%
Dade County, 6.50%,
10/1/26 1,930,000 2,007,103
Sarasota County, Health
Facilities Authority Revenue,
10.00%, 7/1/22 1,200,000 1,280,280
3,287,383
GEORGIA 3.23%
Cobb County Development
Authority Revenue Bonds,
Series 92A, 8.00%, 6/1/22 1,000,000 1,020,000
Monroe County Development
Authority PCR, 6.75%, 1/1/10 1,000,000 1,064,510
2,084,510
ILLINOIS 10.25%
Broadview Tax Increment
Revenue, 8.25%, 7/1/13 1,000,000 1,029,320
Chicago Heights Residential
Mortgage Revenue, Series B,
(effective yield-7.80%)
(a), 6/1/09 3,465,000 1,284,302
Chicago O'Hare International
Airport Special Facilities
Revenue, 6.75%, 1/1/18 1,350,000 1,399,383
Chicago, Capital A,
(effective yield-4.85%), 7/1/16 2,000,000 475,920
Illinois Health Facilities Authority
Revenue, 9.50%, 10/1/22 1,250,000 1,337,925
Robins Illinois Residential,
9.25%, 10/15/14 1,000,000 1,085,410
6,612,260
INDIANA 4.21%
Indianapolis Public Improvement
Bond, Series D, 6.75%, 2/1/20 2,400,000 2,470,896
Indiana Transportation Finance
Authority, Series A,
(effective yield-4.73%), 6/1/17 1,000,000 245,870
2,716,766
<PAGE>
IOWA 1.01%
Student Loan Liquidity
Corporation, Student Loan
Revenue, Series C,
6.95%, 3/1/06 $625,000 $652,775
KENTUCKY 3.08%
Jefferson County, Hospital
Revenue, 8.24%, 10/1/08 500,000 550,000
Kenton County Airport
Board Revenue, OID,
7.50%, 2/1/20 1,400,000 1,437,926
1,987,926
LOUISIANA 3.27%
Louisiana State, Series A,
6.50%, 5/1/10 2,000,000 2,108,120
MAINE 1.58%
Maine State Housing
Authority, Series C,
6.88%, 11/15/23 1,000,000 1,019,490
MASSACHUSETTS 3.80%
Massachusetts State Health
and Educational Facilities
Authority, OID Revenue Bonds,
Series A, 6.00%, 10/1/23 2,000,000 1,395,140
Massachusetts State Health
and Education, 6.88%, 4/1/22 1,000,000 1,057,320
2,452,460
MICHIGAN 0.77%
Romulus Community Schools,
Refunding, (effective yield-
4.03%) (a), 5/1/20 2,385,000 499,586
MONTANA 0.73%
Montana State Resource
Recovery Revenue Bonds,
7.00%, 12/31/19 $500,000 $473,580
NEBRASKA 0.63%
Nebraska Finance
Authority, SFM, 8.67%,
9/15/24 400,000 405,500
NEVADA 0.81%
Henderson Local
Improvement District,
Special Assessment, Series
A, 8.50%, 11/1/12 500,000 525,160
NEW JERSEY 1.33%
New Jersey Healthcare
Facilities Financing Authority,
Refunding, 6.80%, 7/1/11 825,000 855,814
NEW YORK 8.71%
Clifton Springs Hospital
Refunding & Improvement,
8.00%, 1/1/20 930,000 904,481
Herkimer County, IDA,
8.00%, 1/1/09 1,000,000 1,049,060
New York City, Series H,
7.20%, 2/1/13 1,500,000 1,551,210
New York, New York,
Series A, 7.00%, 8/1/04 1,000,000 1,044,580
New York State Dorm
Authority, 6.75%, 7/1/24 1,000,000 1,069,040
5,618,371
NORTH DAKOTA 1.67%
Ward County Health
Facility, 8.88%, 11/15/24 1,000,000 1,078,560
OHIO 1.52%
Cleveland Airport Revenue,
Series A, 6.00%, 1/1/24 1,000,000 978,450
OKLAHOMA 1.56%
Oklahoma City, Industrial
and Cultural Facilities Trust,
6.75%, 9/15/17 1,000,000 1,009,930
<PAGE>
PENNSYLVANIA 3.61%
Pennsylvania Economic
Development, 6.40%, 1/1/09 $500,000 $481,385
Pennsylvania Intergovern-
mental Cooperative Authority,
Special Tax Revenue,
6.80%, 6/15/12 750,000 825,998
Philadelphia Hospital and
Higher Education Facilities,
6.50%, 11/15/08 1,000,000 1,022,610
2,329,993
PUERTO RICO 1.37%
Puerto Rico, Commonwealth
Highway Transportation
Authority, Series T,
6.50%, 7/1/22 800,000 885,688
RHODE ISLAND 0.77%
West Warwick, Series A,
G.O. Bond, 6.80% - 7.30%,
7/15/98 - 7/15/08 475,000 499,881
TENNESSEE 7.00%
Memphis Shelby County
Airport Authority Special
Facilities Revenue Refunding,
7.88%, 9/1/09 1,500,000 1,638,195
Tennessee Housing, 7.38%,
7/1/23 2,750,000 2,876,390
4,514,585
TEXAS 4.45%
Brazos Higher Education
Authority Student Loan Revenue,
7.10%, 11/1/04 1,000,000 1,055,350
Dallas-Fort Worth International
Airport Facility Revenue
Bonds, 7.25%, 11/1/30 1,000,000 1,011,590
Texas State Department of
Housing and Community Affairs
Refunding, Series C, 9.31%, 7/2/24 750,000 803,438
2,870,378
UTAH 3.23%
Bountiful Hospital Revenue,
9.50%, 12/15/18 $245,000 $259,122
Utah State Housing Finance
Commission, 7.20%, 1/1/27 1,750,000 1,827,368
2,086,490
WEST VIRGINIA 5.46%
Harrison County, 6.75%,
8/1/24 2,000,000 2,081,760
West Virginia State Hospital
Finance Authority Revenue,
9.70%, 1/1/18 1,500,000 1,444,125
3,525,885
TOTAL LONG-TERM MUNICIPAL
SECURITIES (COST $61,665,681) 63,161,793
SHORT-TERM MUNICIPAL
SECURITIES 0.78%
WYOMING
Lincoln County Wyoming
Poll, 4.60%, 11/1/14, VRDN 500,000 500,000
TOTAL SHORT-TERM MUNICIPAL
SECURITIES (COST $500,000) 500,000
TOTAL INVESTMENTS
(COST $62,165,681) 98.64% 63,661,793
OTHER ASSETS LESS LIABILITIES 1.36% 877,990
NET ASSETS 100.00% $64,539,783
INVESTMENT ABBREVIATIONS
GO - General Obligation / HFA - Housing Finance Authority
IDA- Industrial Development Authority / OID - Original Issue Discount
PCR- Pollution Control Revenue / PFA - Public Financing Authority
SFM- Single Family Mortgage
VRDN- Variable Rate Demand Note, rate shown represents current
interest rate at 3/31/95.
(a) Effective yield is the yield as calculated at time of purchase at
which the bond accretes on an annual basis until its maturity date.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MENTOR INCOME & GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1995 (UNAUDITED)
PERCENT OF
NET ASSETS SHARES VALUE
COMMON STOCKS 55.47%
BASIC MATERIALS 9.57%
Aluminum Company of America 46,000 $ 1,903,250
International Paper Company 23,200 1,742,900
International Specialty Products, Inc. 12,600 86,625
Pichiney SA 13,000 873,175
Potash Corporation 3,200 142,400
Rayonier, Inc. 5,100 158,737
Rhone Poulenc SA+ 15,700 368,950
St. Lawrence Cement, Inc.* 25,000 160,915
Temple-Inland, Inc. 7,900 354,512
5,791,464
CAPITAL GOODS & CONSTRUCTION 5.36%
American R E Partners 44,358 349,319
BE Aerospace, Inc.* 42,700 277,550
Boeing Company 7,000 377,125
Centex Construction Products, Inc.* 36,200 447,975
Giddings & Lewis, Inc. 11,400 193,800
Honeywell, Inc. 900 33,637
Sequa Corporation* 18,100 529,425
Southdown, Inc.* 13,900 236,300
Standard Pacific Corporation 77,200 501,800
York International Corporation 7,500 296,250
3,243,181
CONSUMER STAPLES 3.89%
Chiquita Brands International 13,600 171,700
Hills Stores Company 17,549 355,367
Interstate Bakeries Corporation 19,000 275,500
Monk Austin, Inc. 11,800 163,725
Morningstar Group, Inc.* 15,200 110,200
Seagram Company, Ltd. 2,500 79,375
Standard Commercial Corporation 16,321 218,293
Universal Corporation 47,000 981,125
2,355,285
ENERGY 10.92%
Amerada Hess Corporation 7,600 375,250
Arethusa Off-Shore, Ltd.* 29,200 385,075
Ashland Oil, Inc. 5,400 192,375
Atlantic Richfield Company 1,900 218,500
Burlington Resources, Inc. 12,200 497,150
Enserch Corporation 10,600 157,675
Gerrity Oil & Gas Corporation* 87,000 337,125
Home Oil Company* 13,200 136,950
Lone Star Technologies, Inc. 25,100 200,800
Maxus Energy Corporation* 64,500 354,750
Mitchell Energy 100 1,763
Nabors Industries, Inc.* 15,000 112,500
Noble Drilling Corporation* 59,500 364,437
Norcen Energy 2,100 26,283
Oryx Energy* 22,000 277,750
Petroleum Heat & Power Company 57,600 417,600
Ranchmen's Resources 41,900 172,305
Santa Fe Energy Resources, Inc.* 10,000 96,250
Seagull Energy Corporation* 26,000 513,500
Sonat Offshore Drilling, Inc. 22,400 520,800
U.S.X. Marathon Group, Inc. 28,300 495,250
Unocal Corporation 16,400 471,500
YPF Associadad 15,000 285,000
6,610,588
FINANCIAL 11.16%
ACE, Ltd. 32,500 820,625
Astoria Financial Corporation* 7,300 224,475
BankAmerica Corporation 16,338 788,309
Bank Bilbao Vicz+* 600 15,150
California Federal Bank* 15,556 165,282
Chubb Corporation 12,300 971,700
CIGNA Corporation 8,900 665,275
Coast Savings Financial, Inc.* 8,800 141,900
First Union Center 2,000 86,750
Gables Residential Trust 8,000 149,000
GP Financial Corporation 7,400 171,125
Keycorp 5,100 144,075
Koger Equity, Inc. REIT* 37,900 255,825
Lehman Brothers Holding, Inc. 24,840 447,120
Loews Corporation 1,200 118,500
Long Island Bancorp 10,000 175,000
Newhall Land & Farming Company 8,100 119,475
Old Republic International Corporation 16,000 384,000
Paul Revere Corporation 10,000 162,500
<PAGE>
Storage Equities, Inc. 13,400 227,800
Union Bank 15,200 524,400
6,758,286
TECHNOLOGY 5.77%
Alcatel Alsthom* 14,900 270,063
B.C.E., Inc. 25,400 784,225
BMC Software* 5,500 350,625
Cooper Industries, Inc. 5,300 205,375
General Motors Corporation 15,900 703,575
Philips Electronics 5,000 170,625
Policy Management Systems Corporation* 6,900 302,738
LDDS Communications* 13,781 322,131
Raychem Corporation 9,500 385,938
3,495,295
TRANSPORTATION & SERVICES 1.77%
AMR Corporation* 6,000 388,500
American West Airlines* 10,000 86,250
Canadian Pacific, Ltd.* 23,500 352,500
OMI Corporation* 25,900 142,450
Overseas Shipholding Group 5,000 102,500
1,072,200
UTILITIES 2.40%
Central Maine Power 15,500 170,500
Entergy Corporation 20,000 417,500
New York State Electric & Gas Company 11,500 245,813
Niagra Mohawk Power 23,800 327,250
Public Service Company of New Mexico* 10,500 131,250
Unicom Corporation 6,600 156,750
1,449,063
MISCELLANEOUS 4.63%
Brascan, Ltd. 19,200 259,200
Comsat Corporation 5,500 102,438
CRSS, Inc. 2,900 26,462
Davids Limited 135,000 124,031
Eastman Kodak Company 10,500 557,812
Essex Property Trust, Inc. 19,900 315,913
Onex Corporation 21,400 197,050
Pennsylvania Enterprises 400 12,450
Sun Communities, Inc. 12,600 283,500
Technip SA 7,500 423,185
Telecom Italia SPA 11,000 25,590
United Mobile Homes, Inc. 16,100 122,763
W.M.X. Technologies, Inc. 12,800 352,000
2,802,394
TOTAL COMMON STOCKS
(COST $32,272,527) 33,577,756
PREFERRED STOCKS 1.67%
BASIC MATERIALS 0.56%
Boise Cascade Corporation 9,000 266,625
Reynolds Metals Company 1,500 71,438
338,063
FINANCIAL 1.11%
American R E Partners 3,143 31,430
Glendale Federal Bank 21,700 640,150
671,580
TOTAL PREFERRED STOCKS
(COST $802,233) 1,009,643
CORPORATE BONDS 8.13%
BASIC MATERIALS 0.38%
Aluminum Company
of America, 5.75%, 2/1/01 $250,000 $229,360
CAPITAL GOODS
& CONSTRUCTION 0.16%
Lockheed Corporation,
6.75%, 3/15/03 100,000 94,508
CONSUMER CYCLICAL 1.06%
Circus Circus Enterprises, Inc.,
7.63%, 7/15/13 250,000 216,640
Sears Roebuck Company,
9.25%, 4/15/98 175,000 183,379
Time Warner Entertainment, Inc.,
8.88%, 10/1/12 250,000 241,510
641,529
<PAGE>
CONSUMER STAPLES 0.36%
Gillette Company,
5.75%, 10/15/05 $250,000 $216,105
FINANCIAL 3.77%
American General Finance
Corporation, 5.88%, 7/1/00 250,000 230,950
Associates Corporation of
North America, 5.25%, 3/30/00 250,000 225,777
Chase Manhattan Corporation,
7.75%, 11/1/99 250,000 250,347
Chrysler Financial Corporation,
6.63% ,8/15/20 250,000 238,773
Comerica Bank Inc., 7.13%,
12/1/13 250,000 219,220
Dean Witter Discover, 6.25%,
3/15/00 100,000 93,914
First National Bank, 8.00%,
9/15/04 250,000 246,752
Ford Motor Credit, 8.88%,
6/15/99 100,000 104,567
Great Western Financial, 6.38%,
7/1/00 250,000 234,265
Home Savings of Americas, 6.00%,
11/1/00 250,000 228,628
Toronto-Dominion Bank-NY,
6.13%, 11/1/08 250,000 211,015
2,284,208
TRANSPORTATION 0.39%
AMR Corporation, 6.13%,
11/01/24 250,000 236,610
UTILITIES 2.01%
Duke Power Company,
7.00%, 6/1/00 100,000 98,030
Florida Power & Light Company,
5.38%, 4/1/00 250,000 227,295
Long Island Lighting Company,
7.05%, 3/15/03 100,000 84,548
Pacific Gas & Electric Company,
5.93%, 10/8/03 250,000 221,680
Philadelphia Electric Company,
7.50%, 1/15/99 100,000 99,620
Southwestern Public Service
Company, 6.88%, 12/1/99 250,000 244,055
Union Electric Company,
6.75%, 10/15/99 250,000 243,025
1,218,253
TOTAL CORPORATE BONDS
(COST $5,388,059) 4,920,573
GOVERNMENT BONDS 28.20%
Government National
Mortgage Association,
6.50%, 10/15/23-4/15/24 1,461,555 1,319,945
Government National
Mortgage Association,
7.00%, 1/15/24 2,433,890 2,279,460
U.S. Treasury Bond,
5.13%, 3/31/98 2,500,000 2,379,625
U.S. Treasury Bond,
7.25%, 5/15/16 1,000,000 966,750
U.S. Treasury Bond,
7.50%, 11/15/16 4,500,000 4,467,465
U.S. Treasury Note,
6.88%, 2/28/97 2,000,000 2,001,720
U.S. Treasury Note,
4.75%, 9/30/98 1,000,000 931,640
U.S. Treasury Note,
5.75%, 8/15/03 3,000,000 2,722,560
TOTAL GOVERNMENT BONDS
(COST $17,152,763) 17,069,165
SHORT-TERM INVESTMENT 3.42%
REPURCHASE AGREEMENT
Lehman Brothers, Inc.
Dated 3/31/95, 6.25%,
Due 4/03/95, collateralized by
$2,085,000, U.S. Treasury
Note, 3.88%, 4/30/95 2,071,000 2,071,000
<PAGE>
TOTAL SHORT-TERM INVESTMENTS
(COST $2,071,000) $ 2,071,000
TOTAL INVESTMENTS
(COST $57,686,582) 96.89% 58,648,137
OTHER ASSETS LESS LIABILITIES 3.11% 1,885,233
NET ASSETS 100.00% $60,533,370
* Non-income producing.
+ American Depository Receipts.
SEE NOTES TO FINANCIAL STATEMENTS.
MENTOR PERPETUAL GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
MARCH 31, 1995 (UNAUDITED)
PERCENT OF
NET ASSETS SHARES VALUE
COMMON STOCKS 93.05%
AUSTRALIA 4.55%
Ampolex Limited 17,000 $ 43,482
Broken Hill Proprietary Company* 24,345 319,937
Fosters Brewing 101,000 83,885
Woodside Petroleum, Ltd. 79,500 316,705
764,009
CANADA 3.95%
Alcan Aluminum, Ltd. 9,217 244,721
Canadian Pacific, Ltd. 15,033 224,435
Rogers Communications, Inc.* 14,900 194,475
663,631
DENMARK 2.15%
FLS Industries A/S 'B' 3,750 361,636
GERMANY 9.16%
Bayerische Ver 720 205,714
Hoechst AG 1,390 288,004
Mannesmann AG 1,100 285,096
Munich Reinsurance 155 281,152
Rhine Westphal 650 172,010
Veba AG 590 214,039
Viag AG 260 93,188
1,539,203
GREAT BRITAIN 10.33%
British Gas PLC 44,500 207,048
Carlton Communications ORD 18,600 278,200
Enterprise Oil ORD 45,500 289,657
Lasmo PLC 129,857 341,639
Rio Tinto-Zinc Corporation ORD 19,700 256,583
Saint James Place 130,000 236,454
Waste Management International PLC* 30,600 125,229
1,734,810
HONG KONG 0.79%
Hong Kong Telecom, Ltd.+ 200 389
Hutchison Whampoa, Ltd. 30,000 132,307
132,696
<PAGE>
ITALY 1.03%
INA 37,000 $ 43,710
STET Societa Finanz 23,300 59,872
Telecom Italia SPA 29,600 68,861
172,443
JAPAN 9.41%
Canon, Inc. 14,000 230,645
Hitachi, Ltd. 28,000 290,323
Kyocera Corporation 4,000 297,695
Matsushita Electric 8,000 129,033
Nichiei Company 1,000 58,755
Nisshin Steel 18,000 80,875
NSK, Ltd. 27,000 192,235
Sony Corporation+ 500 24,439
Sony Corporation 3,200 160,369
Toshiba Corporation 17,000 115,357
1,579,726
SOUTH AFRICA 0.65%
Impala Platinum Holdings+ 4,900 110,974
SOUTH KOREA 1.56%
Goldstar (b) 13,400 167,500
Yukong, Ltd.* (b) 8,000 94,000
261,500
SWEDEN 6.87%
Astra AB 7,000 185,919
Autoliv AB 8,900 336,484
Skandia Forsak 6,000 92,689
SKF AB* 15,200 253,348
Volvo AB 16,500 285,078
1,153,518
SWITZERLAND 9.70%
Brown Boveri & CIE 295 280,407
CIBA Geigy AG Basel 314 209,704
Nestle Cham Et Vevey 247 241,108
Sandoz AG Base 280 180,565
SCHW Rueckversicherungs 420 279,381
SGS Societe Gen De Surveill 165 260,181
Sulzer AG* (Participation
Certificate) 293 177,042
1,628,388
UNITED STATES 31.97%
AMBAC, Inc. 7,600 $ 308,750
American President Companies., Ltd. 8,000 175,000
Amway Asia Pacific, Ltd. 1,600 59,600
Barrick Gold Corporation 3,400 85,000
Boeing Company 4,500 242,438
Centrais Eletricas Bras+ 1,100 10,607
Compania Electrique Sao Palo+ 1,100 12,876
Comsat Corporation 5,400 100,575
Destec Energy, Inc.* 27,400 274,000
Enron Corporation 8,700 287,100
Exel, Ltd. ORD 7,400 326,525
General RE Corporation 2,220 293,040
Harnischfeger 1,300 36,400
Homestake Mining 9,800 181,300
Huaneng Power International, Inc. 7,000 111,125
International Business Machines Corp. 2,290 187,495
Jardine Mathes 18,000 162,000
Jardine Strate 25,000 95,000
Korea Europe 18 65,250
LaFarge Corporation 13,800 258,750
MBIA, Inc. 5,200 326,950
Mid Ocean, Ltd. ORD* 10,800 294,300
Partnerre Holdings, Ltd. 10,000 212,500
PT Indonesia Satellite A 4,800 169,200
Placer Dome, Incorporated 3,600 87,750
Schlumberger, Ltd. 3,200 190,800
Thermo Electron Corporation* 2,700 137,364
United Healthcare Corporation 6,100 285,175
United Technologies Corporation 3,300 228,113
WMX Technologies, Inc. 4,600 126,500
YPF Sociedad Anonima 2,000 38,000
5,369,483
VENEZUELA 0.93%
Venezolana De Prerredicidos
(4/13/94, $260,293) (a) (b) 35,600 155,750
TOTAL COMMON STOCKS
(COST $15,600,310) 15,627,767
<PAGE>
CORPORATE BONDS 1.27%
CANADA 0.42%
Teck Corporation,
3.75%, 7/15/06+ $ 80,000 $71,100
MALAYSIA 0.85%
Telekom Malaysia
Berhad, 4.00%, 10/3/04+
(a) (b) (9/22/97, $170,000) 170,000 142,695
TOTAL CORPORATE BONDS
(COST $234,753) 213,795
TREASURY SECURITIES 5.31%
U.S. Treasury Bond,
8.0%, 11/15/21
(cost $854,648) 850,000 891,038
TOTAL LONG-TERM INVESTMENTS
(COST $16,689,711) 16,732,600
SHORT-TERM INVESTMENTS 0.71%
REPURCHASE AGREEMENT
Donaldson, Lufkin, &
Jenrette Securities Corporation
Dated 3/31/95, 6.15%,
due 4/3/95, collateralized by
$131,000, U.S. Treasury
Note, 7.75%, 11/30/99 118,000 118,000
TOTAL SHORT-TERM INVESTMENTS
(COST $118,000) 118,000
TOTAL INVESTMENTS
(COST $16,807,711) 100.34% 16,850,600
OTHER ASSETS LESS LIABILITIES (0.34%) $(55,792)
NET ASSETS 100.00% $16,794,808
* Non-income producing.
+ American Depository Receipts.
(a) All or a portion of these securities are restricted (i.e., securities
which may not be publicly sold without registration under the
Federal Securities Act of 1933). Dates of acquisition and costs
are set forth in parentheses after the title of the restricted secu-
rities.
(b) These are securities that may be resold to qualified institu-
tional buyers under Rule 144A or securities offered pursuant
to Section 4 (2) of the Securities Act of 1933, as amended.
These securities have been determined to be liquid under
guidelines established by the Board of Trustees.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
March 31, 1995 (Unaudited)
<TABLE>
MENTOR/ MENTOR MENTOR MENTOR MENTOR MENTOR
CAMBRIDGE CAPITAL QUALITY MUNICIPAL INCOME AND PERPETUAL
GROWTH GROWTH INCOME INCOME GROWTH GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at market value *(Note 2) $37,342,934 $59,226,871 $92,566,975 $63,661,793 $58,648,137 $16,850,600
Cash - - 2,666 48,657 263,537 178,292
Receivables
Investments sold 1,161,932 520,740 1,046,957 - 2,015,721 144,880
Fund shares sold 47,646 47,829 61,758 615 208,164 26,475
Dividends and interest 65,262 118,920 1,018,324 1,234,261 524,148 68,059
Forward currency contracts held 12,453 159,712 - - - 3,831
Deferred expenses (Note 2) - - - - - 44,824
Total assets 38,630,227 60,074,072 94,696,680 64,945,326 61,659,707 17,316,961
LIABILITIES
Payables
Investments purchased 131,050 905,575 1,042,700 - 284,118 391,251
Fund shares redeemed 302,733 491,102 1,047,101 214,294 558,794 60,705
Dividends - - 282,986 183,069 - -
Forward contract payable (Note 7) - - - - - 19,676
Variation margin (Note 2) - - 13,594 - - -
Accrued expenses and other liabilities 789,534 137,851 93,199 8,180 283,425 50,521
Total liabilities 1,223,317 1,534,528 2,479,580 405,543 1,126,337 522,153
NET ASSETS $37,406,910 $58,539,544 $92,217,100 $64,539,783 $60,533,370 $16,794,808
Net Assets represented by: (Note 2)
Additional paid-in capital $34,767,770 $53,051,601 $108,863,701 $65,575,073 $59,060,248 $17,131,055
Undistributed net investment
income (loss) (172,160) - 262,027 - - (68,177)
Accumulated distributions in
excess of net investment income - (96,678) - (5,807) (90,146) -
Undistributed realized gain (loss) on
investment transactions (2,199,365) (431,421) (14,812,016) (2,365,100) 601,425 (311,925)
Net unrealized appreciation
(depreciation) of investments and
foreign currency related transactions 5,010,665 6,016,042 (2,096,612) 1,335,617 961,843 43,855
NET ASSETS $37,406,910 $58,539,544 $92,217,100 $64,539,783 $60,533,370 $16,794,808
NET ASSETS VALUE PER SHARE
Class A Shares $15.64 $15.63 $12.81 $14.71 $15.26 $13.97
Class B Shares $15.42 $15.47 $12.82 $14.74 $15.28 $13.84
OFFERING PRICE PER SHARE
Class A Shares $16.55(a) $16.54(a) $13.45(b) $15.44(b) $16.15(a) $14.78(a)
Class B shares $15.42 $15.47 $12.82 $14.74 $15.28 $13.84
REDEMPTION PROCEEDS PER SHARE
Class A Shares $ 15.64 $ 15.63 $ 12.81 $ 14.71 $ 15.26 $ 13.97
Class B Shares (c) $ 15.27 $ 15.32 $ 12.69 $ 14.59 $ 15.13 $ 13.70
SHARES OUTSTANDING
Class A Shares 839,258 1,267,361 2,098,263 1,489,063 1,206,292 584,091
Class B Shares 1,574,382 2,503,373 5,095,044 2,893,403 2,756,679 623,948
Total Shares Outstanding 2,413,640 3,770,734 7,193,307 4,382,466 3,962,971 1,208,039
</TABLE>
* Investments at cost $32,332,447, $53,210,909, $94,821,262, $62,165,681,
$57,686,582, and $16,807,711 respectively.
(a) Computation of offering price: 100/94.5 of net asset value.
(b) Computation of offering price: 100/95.25 of net asset value.
(c) Computation of redemption proceeds: 99/100 of net asset value.
<PAGE>
THE MENTOR FUNDS
STATEMENTS OF OPERATIONS
Six Months Ended March 31, 1995 (Unaudited)
<TABLE>
MENTOR/ MENTOR MENTOR MENTOR MENTOR MENTOR
CAMBRIDGE CAPITAL QUALITY MUNICIPAL INCOME AND PERPETUAL
GROWTH GROWTH INCOME INCOME GROWTH GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 16,288 $ 249,731 $4,238,889* $2,379,525 $ 825,100 $ 44,386
Dividends (Net of withholding taxes)** 283,444 458,103 - - 484,553 89,733
Total investment income (Note 2) 299,732 707,834 4,238,889 2,379,525 1,309,653 134,119
EXPENSES
Management fee (Note 4) 161,118 240,136 298,013 197,610 225,134 94,167
Distribution fees (Note 4) 99,537 148,326 177,718 107,582 159,309 31,790
Transfer agent fee 71,972 113,539 137,826 59,803 72,743 27,168
Shareholder services fees (Note 4) 50,350 75,042 124,172 82,338 75,044 21,401
Administration fee (Note 4) 25,175 37,521 62,086 41,169 37,522 10,700
Custodian fee 13,441 15,792 29,870 20,474 23,762 6,400
Registration expenses 24,492 33,746 30,371 27,824 30,249 18,243
Shareholder reports and postage expenses 4,651 9,181 12,540 8,464 11,945 1,432
Organizational expenses 7,722 4,835 4,485 8,405 1,957 1,152
Legal and Audit fees 8,681 14,033 15,746 12,028 12,586 5,219
Directors' fees and expenses 2,002 3,670 4,822 3,215 3,297 891
Miscellaneous 2,751 5,605 9,202 4,972 3,657 376
Total expenses 471,892 701,426 906,851 573,884 657,205 218,939
Deduct
Waiver of management fee (Note 4) - - - - - 16,643
Net Expenses 471,892 701,426 906,851 573,884 657,205 202,296
Net investment income (loss) (172,160) 6,408 3,332,038 1,805,641 652,448 (68,177)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on
investments (Note 2) 620,251 (373,054) (3,093,518)(a) (1,733,466)(a) 497,508 (329,747)
Change in unrealized appreciation
of investments 1,850,002 4,390,496 3,219,455(b) 2,814,682 705,509 23,545
Net realized and unrealized gain
(loss) on investments 2,470,253 4,017,442 125,937 1,081,216 1,203,017 (306,202)
Net increase (decrease) in net assets
resulting from operations $2,298,093 $4,023,850 $3,457,975 $2,886,857 $1,855,465 $(374,379)
</TABLE>
* Net of interest expense ($125,954).
** Withholding taxes were $1,446, $7,078, $5,992, and $7,082 for the
Mentor/Cambridge Growth Portfolio, Mentor Capital Growth Portfolio,
Mentor Income and Growth Portfolio and Mentor Perpetual Global Portfolio,
respectively for the six months ended March 31, 1995.
(a) Includes net realized gain on futures contracts of $184,640 on Mentor
Quality Income Portfolio and net realized loss of $109,169 on Mentor
Municipal Income Portfolio.
(b) Includes unrealized appreciation on options written and variation margin
receivable of $133,394 and $24,281 respectively, on Mentor Quality Income
Portfolio.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
MENTOR/CAMBRIDGE MENTOR MENTOR
GROWTH CAPITAL GROWTH QUALITY INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
3/31/95 9/30/94 3/31/95 9/30/94 3/31/95 9/30/94
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (loss) $ (172,160) $ (587,135) $ 6,408 $ 29,871 $ 3,332,038 $ 8,732,749
Net realized gain (loss) on
investments 620,251 (514,259) (373,054) 1,128,751 (3,093,518) (8,118,106)
Net unrealized appreciation
(depreciation) of investments 1,850,002 (5,796,253) 4,390,496 (2,465,351) 3,219,455 (5,963,957)
Increase (decrease) in net assets
from operations 2,298,093 (6,897,647) 4,023,850 (1,306,729) 3,457,975 (5,349,314)
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income
Class A - - - (87,466) (974,306) (2,342,783)
Class B - - - - (2,260,989) (5,799,239)
Distributions in excess
of net investment income
Class A - - - - - -
Class B - - - - - -
Net realized gain on investments
Class A - - (450,888) (241,102) - -
Class B - - (871,914) (445,582) - -
Net decrease from distributions - - (1,322,802) (774,150) (3,235,295) (8,142,022)
CAPITAL SHARE TRANSACTIONS (NOTE 8)
Net proceeds from sale of shares 2,506,804 15,028,646 2,324,644 9,607,870 2,589,649 14,581,398
Reinvested distributions - - 1,293,598 755,452 2,080,345 5,302,074
Cost of shares redeemed (10,654,673) (19,651,657) (10,066,659) (34,385,554) (20,705,223) (73,488,727)
Change in net assets from portfolio
share transactions (8,147,869) (4,623,011) (6,448,417) (24,022,232) (16,035,229) (53,605,255)
Increase (decrease) in net assets (5,849,776) (11,520,658) (3,747,369) (26,103,111) (15,812,549) (67,096,591)
NET ASSETS
Beginning of period 43,256,686 54,777,344 62,286,913 88,390,024 108,029,649 175,126,240
End of period $37,406,910 $43,256,686 $58,539,544 $62,286,913 $92,217,100 $108,029,649
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
MENTOR MENTOR MENTOR
MUNICIPAL INCOME INCOME AND GROWTH PERPETUAL GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
3/31/95 9/30/94 3/31/95 9/30/94 3/31/95 9/30/94*
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income (loss) $ 1,805,641 $ 3,986,208 $ 652,448 $ 853,291 $ (68,177) $ (25,881)
Net realized gain (loss) on investments (1,733,466) (527,018) 497,508 1,523,312 (329,747) 17,822
Net unrealized appreciation
(depreciation) of investments 2,814,682 (7,578,461) 705,509 (248,910) 23,545 20,310
Increase (decrease) in net assets
from operations 2,886,857 (4,119,271) 1,855,465 2,127,693 (374,379) 12,251
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income
Class A (653,142) (1,463,600) (297,519) (300,723) - -
Class B (1,099,429) (2,444,169) (521,019) (476,423) - -
Net realized gain on investments
Class A - (189,589) (298,324) (204,420) - -
Class B - (340,533) (712,920) (470,138) - -
Net decrease from distributions (1,752,571) (4,437,891) (1,829,782) (1,451,704) - -
CAPITAL SHARE TRANSACTIONS (NOTE 8)
Net proceeds from sale of shares 2,113,153 14,229,526 5,898,857 38,661,567 2,580,441 18,542,494
Reinvested distributions 1,100,966 2,491,222 1,737,558 1,370,230 - -
Cost of shares redeemed (11,022,376) (17,170,919) (8,120,244) (7,692,563) (2,280,793) (1,685,206)
Change in net assets from portfolio
share transactions (7,808,257) (450,171) (483,829) 32,339,234 299,648 16,857,288
Increase (decrease) in net assets (6,673,971) (9,007,333) (458,146) 33,015,223 (74,731) 16,869,539
NET ASSETS
Beginning of period 71,213,754 80,221,087 60,991,516 27,976,293 16,869,539 -
End of period $64,539,783 $71,213,754 $60,533,370 $60,991,516 $16,794,808 $16,869,539
</TABLE>
* For the period from March 30, 1994 (commencement of operations) to September
30, 1994.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class A Shares
<TABLE>
MENTOR/CAMBRIDGE
GROWTH PORTFOLIO
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
3/31/95 9/30/94 9/30/93 9/30/92*
(UNAUDITED)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.68 $ 16.69 $ 14.14 $ 14.18
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.03) (0.11) (0.07) 0.03
Net realized and unrealized gain (loss) on investments 0.99 (1.90) 2.65 (0.07)
Total from investment operations 0.96 (2.01) 2.58 (0.04)
LESS DISTRIBUTIONS
Dividends from income - - - -
Distributions from capital gains - - - -
Distributions in excess of net investment income - - (0.03) -
Total distributions - - (0.03) -
NET ASSET VALUE, END OF PERIOD $ 15.64 $ 14.68 $ 16.69 $ 14.14
Total Return 6.54% (12.04%) 18.23% (0.28%)
Ratios / Supplemental Data
Net assets, end of period (in thousands) $ 13,129 $ 14,579 $ 19,708 $ 11,464
Ratio of expenses to average net assets 1.86%(a) 1.81% 1.66% 1.33%(a)
Ratio of expenses to average net asset excluding waiver 1.86%(a) 1.82% 1.78% 1.72%(a)
Ratio of net investment income to average net assets (0.36%)(a) (0.65%) (0.49%) 0.59%(a)
Portfolio turnover rate 57%(a) 132% 137% 26%
</TABLE>
(a) Annualized.
* Reflects operations for the period from April 29, 1992 (commencement of
operations), to September 30, 1992.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class A Shares
<TABLE>
MENTOR
CAPITAL GROWTH PORTFOLIO
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
3/31/95 9/30/94 9/30/93 9/30/92*
(UNAUDITED)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.88 $ 15.26 $ 14.21 $ 14.18
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.12 0.09 0.14 0.08
Net realized and unrealized gain (loss) on investments 0.96 (0.30) 1.02 0.03
Total from investment operations 1.08 (0.21) 1.16 0.11
LESS DISTRIBUTIONS
Dividends from income - (0.04) (0.11) (0.08)
Distributions from capital gains (0.33) (0.13) - -
Distributions in excess of net investment income - - - -
Total distributions (0.33) (0.17) (0.11) (0.08)
NET ASSET VALUE, END OF PERIOD $ 15.63 $ 14.88 $ 15.26 $ 14.21
Total Return 7.26% (1.37%) 8.21% 0.78%
Ratios / Supplemental Data
Net assets, end of period (in thousands) $ 19,804 $ 21,181 $ 31,360 $ 20,864
Ratio of expenses to average net assets 1.85%(a) 1.70% 1.49% 1.14%(a)
Ratio of expenses to average net asset excluding waiver 1.85%(a) 1.70% 1.59% 1.43%(a)
Ratio of net investment income to average net assets 0.52%(a) 0.53% 0.96% 1.54%(a)
Portfolio turnover rate 113%(a) 149% 192% 61%
</TABLE>
(a) Annualized.
* Reflects operations for the period from April 29, 1992 (commencement of
operations), to September 30, 1992.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class A Shares
<TABLE>
MENTOR
QUALITY INCOME PORTFOLIO
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
3/31/95 9/30/94 9/30/93 9/30/92*
(UNAUDITED)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.75 $ 14.04 $ 14.39 $ 14.30
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.05 0.84 1.06 0.44
Net realized and unrealized gain (loss) on investments 0.05 (1.30) (0.31) 0.09
Total from investment operations 0.10 (0.46) 0.75 0.53
LESS DISTRIBUTIONS
Dividends from income (0.04) (0.83) (1.06) (0.44)
Distributions from capital gains - - - -
Distributions in excess of net investment income - - (0.04) -
Total distributions (0.04) (0.83) (1.10) (0.44)
NET ASSET VALUE, END OF PERIOD $ 12.81 $ 12.75 $ 14.04 $ 14.39
Total Return 0.78% (3.39%) 5.41% 3.37%
Ratios / Supplemental Data
Net assets, end of period (in thousands) $ 26,885 $ 30,142 $ 47,780 $ 36,740
Ratio of expenses to average net assets 1.48%(a) 1.38% 1.04% 0.36%(a)
Ratio of expenses to average net asset excluding waiver 1.48%(a) 1.39% 1.22% 1.21%(a)
Ratio of net investment income to average net assets 7.06%(a) 6.33% 7.31% 8.00%(a)
Portfolio turnover rate 63%(a) 455% 102% 9%
</TABLE>
(a) Annualized.
* Reflects operations for the period from April 29, 1992 (commencement of
operations), to September 30, 1992.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class A Shares
<TABLE>
MENTOR
MUNICIPAL INCOME PORTFOLIO
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
3/31/95 9/30/94 9/30/93 9/30/92*
(UNAUDITED)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.42 $ 16.05 $ 14.76 $ 14.29
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.41 0.82 0.92 0.32
Net realized and unrealized gain (loss)
on investments 0.28 (1.54) 1.32 0.47
Total from investment operations 0.69 (0.72) 2.24 0.79
LESS DISTRIBUTIONS
Dividends from income (0.40) (0.81) (0.92) (0.32)
Distributions from capital gains - (0.10) - -
Distributions in excess of net investment income - - (0.03) -
Total distributions (0.40) (0.91) (0.95) (0.32)
NET ASSET VALUE, END OF PERIOD $ 14.71 $ 14.42 $ 16.05 $ 14.76
Total Return 4.79% (4.83%) 16.0% 5.34%
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 21,902 $ 25,056 $ 29,245 $ 18,801
Ratio of expenses to average net assets 1.43%(a) 1.24% 0.71% 0.00%(a)
Ratio of expenses to average net asset excluding waiver 1.43%(a) 1.33% 1.39% 1.26%(a)
Ratio of net investment income to average net assets 5.78%(a) 5.43% 5.92% 6.21%(a)
Portfolio turnover rate 64%(a) 87% 88% 0%
</TABLE>
(a) Annualized.
* Reflects operations for the period from April 29, 1992
(commencement of operations), to September 30, 1992.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class A Shares
<TABLE>
MENTOR
INCOME AND GROWTH PORTFOLIO
SIX MONTHS YEAR YEAR
ENDED ENDED ENDED
3/31/95 9/30/94 9/30/93**
(UNAUDITED)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.27 $ 14.88 $ 14.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.20 0.31 0.09
Net realized and unrealized gain on investments 0.29 0.64 0.73
Total from investment operations 0.49 0.95 0.82
LESS DISTRIBUTIONS
Dividends from income (0.25) (0.30) (0.08)
Distributions from capital gains (0.25) (0.26) -
Distributions in excess of net investment income - - -
Total distributions (0.50) (0.56) (0.08)
NET ASSET VALUE, END OF PERIOD $ 15.26 $ 15.27 $ 14.88
Total Return 3.21% 6.54% 5.54%
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 18,410 $ 17,773 $ 9,849
Ratio of expenses to average net assets 1.67%(a) 1.75% 1.56%(a)
Ratio of expenses to average net asset
excluding waiver 1.67%(a) 1.75% 1.94%(a)
Ratio of net investment income to average net assets 2.71%(a) 2.20% 2.35%(a)
Portfolio turnover rate 73%(a) 78% 13%
</TABLE>
(a) Annualized.
** Reflects operations for the period from May 24, 1993 (commencement
of operations), to September 30, 1993.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class A Shares
<TABLE>
MENTOR PERPETUAL GLOBAL PORTFOLIO
SIX MONTHS YEAR
ENDED ENDED
3/31/95 9/30/94(b)
(UNAUDITED)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.23 $ 14.18
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.03) (0.01)
Net realized and unrealized loss on investments (0.23) 0.06
Total from investment operations (0.26) 0.05
LESS DISTRIBUTIONS
Dividends from income - -
Distributions from capital gains - -
Distributions in excess of net investment income - -
Total distributions
NET ASSET VALUE, END OF PERIOD $ 13.97 $ 14.23
Total Return (1.83%) 0.35%
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 8,161 $ 8,882
Ratio of expenses to average net assets 2.09%(a) 2.09%(a)
Ratio of expenses to average net asset exluding waiver 2.28%(a) 3.18%(a)
Ratio of net investment loss to average net assets (0.44%)(a) (0.10%)(a)
Portfolio turnover rate 37%(a) 2%
</TABLE>
(a) Annualized.
(b) Reflects operations for the period from March 29, 1994
(commencement of operations), to September 30, 1994
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class B Shares
<TABLE>
MENTOR/CAMBRIDGE
GROWTH PORTFOLIO
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
3/31/95 9/30/94 9/30/93 9/30/92*
(UNAUDITED)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.53 $ 16.59 $ 14.14 $ 14.18
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (0.09) (0.25) (0.14) (0.01)
Net realized and unrealized gain (loss)
on investments 0.98 (1.81) 2.59 (0.03)
Total from investment operations 0.89 (2.06) 2.45 (0.04)
LESS DISTRIBUTIONS
Dividends from income - - - -
Distributions from capital gains - - - -
Distributions in excess of net investment income - - - -
Total distributions - - - -
NET ASSET VALUE, END OF PERIOD $ 15.42 $ 14.53 $ 16.59 $ 14.14
Total Return 6.13% (12.48%) 17.33% (0.28%)
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 24,278 $ 28,678 $ 35,069 $ 13,828
Ratio of expenses to average net assets 2.61%(a) 2.56% 2.41% 2.07%(a)
Ratio of expenses to average net asset
excluding waiver 2.61%(a) 2.58% 2.53% 2.47%(a)
Ratio of net investment loss to average net assets (1.12%)(a) (1.40%) (1.24%) (0.17%)(a)
Portfolio turnover rate 57%(a) 132% 137% 26%
</TABLE>
(a) Annualized.
* Reflects operations for the period from April 29, 1992
(commencement of operations), to September 30, 1992.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class B Shares
<TABLE>
MENTOR
CAPITAL GROWTH PORTFOLIO
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
3/31/95 9/30/94 9/30/93 9/30/92*
(UNAUDITED)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.80 $ 15.23 $ 14.22 $ 14.18
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.01) (0.04) 0.05 0.46
Net realized and unrealized gain (loss) on investments 1.01 (0.26) 1.02 0.04
Total from investment operations 1.00 (0.30) 1.07 0.50
LESS DISTRIBUTIONS
Dividends from income - - (0.05) (0.46)
Distributions from capital gains (0.33) (0.13) - -
Distributions in excess of net investment income - - (0.01) -
Total distributions (0.33) (0.13) (0.06) (0.46)
NET ASSET VALUE, END OF PERIOD $ 15.47 $ 14.80 $ 15.23 $ 14.22
Total Return 6.76% (2.00%) 7.52% 0.61%
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 38,736 $ 41,106 $ 57,030 $ 25,468
Ratio of expenses to average net assets 2.60%(a) 2.46% 2.24% 1.86%(a)
Ratio of expenses to average net asset excluding waiver 2.60%(a) 2.46% 2.34% 2.16%(a)
Ratio of net investment income (loss) to average net assets (0.24%)(a) (0.22%) 0.21% 0.83%(a)
Portfolio turnover rate 113%(a) 149% 192% 61%
</TABLE>
(a) Annualized.
* Reflects operations for the period from April 29, 1992
(commencement of operations), to September 30, 1992.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class B Shares
<TABLE>
MENTOR
QUALITY INCOME PORTFOLIO
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
3/31/95 9/30/94 9/30/93 9/30/1992*
(UNAUDITED)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.76 $ 14.06 $ 14.40 $ 14.30
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.06 0.82 0.99 0.41
Net realized and unrealized gain (loss) on
investments 0.04 (1.37) (0.31) 0.10
Total from investment operations 0.10 (0.55) 0.68 0.51
LESS DISTRIBUTIONS
Dividends from income (0.04) (0.75) (0.99) (0.41)
Distributions from capital gains - - - -
Distributions in excess of net investment income - - (0.03) -
Total distributions (0.04) (0.75) (1.02) (0.41)
NET ASSET VALUE, END OF PERIOD $ 12.82 $ 12.76 $ 14.06 $ 14.40
Total Return 0.78% (3.97%) 4.86% 3.24%
Ratios / Supplemental Data
Net assets, end of period (in thousands) $ 65,335 $ 77,888 $ 127,346 $ 65,661
Ratio of expenses to average net assets 1.97%(a) 1.88% 1.54% 0.83%(a)
Ratio of expenses to average net asset excluding waiver 1.97%(a) 1.90% 1.72% 1.67%(a)
Ratio of net investment income to average net assets 6.58%(a) 6.21% 6.81% 7.53%(a)
Portfolio turnover rate 63%(a) 455% 102% 9%
</TABLE>
(a) Annualized.
* Reflects operations for the period from April 29, 1992
(commencement of operations), to September 30, 1992.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class B Shares
<TABLE>
MENTOR
MUNICIPAL INCOME PORTFOLIO
SIX MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
3/31/95 9/30/94 9/30/93 9/30/1992*
(UNAUDITED)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.43 $ 16.06 $ 14.78 $ 14.29
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.42 0.74 0.82 0.29
Net realized and unrealized gain (loss) on investments 0.29 (1.54) 1.32 0.49
Total from investment operations 0.71 (0.80) 2.14 0.78
LESS DISTRIBUTIONS
Dividends from income (0.40) (0.73) (0.82) (0.29)
Distributions from capital gains - (0.10) - -
Distributions in excess of net investment income - - (0.04) -
Total distributions (0.40) (0.83) (0.86) (0.29)
NET ASSET VALUE, END OF PERIOD $ 14.74 $ 14.43 $ 16.06 $ 14.78
Total Return 4.92% (5.34%) 15.27% 5.28%
Ratios / Supplemental Data
Net assets, end of period (in thousands) $ 42,638 $ 46,157 $ 50,976 $ 24,265
Ratio of expenses to average net assets 1.91%(a) 1.74% 1.21% 0.50%(a)
Ratio of expenses to average net asset excluding waiver 1.91%(a) 1.86% 1.89% 1.76%(a)
Ratio of net investment income to average net assets 5.31%(a) 4.93% 5.42% 5.80%(a)
Portfolio turnover rate 64%(a) 87% 88% 0%
</TABLE>
(a) Annualized.
* Reflects operations for the period from April 29, 1992
(commencement of operations), to September 30, 1992.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class B Shares
<TABLE>
MENTOR
INCOME AND GROWTH PORTFOLIO
SIX MONTHS YEAR YEAR
ENDED ENDED ENDED
3/31/95 9/30/94 9/30/93**
(UNAUDITED)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.28 $ 14.91 $ 14.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.19 0.21 0.05
Net realized and unrealized gain on investments 0.25 0.61 0.77
Total from investment operations 0.44 0.82 0.82
LESS DISTRIBUTIONS
Dividends from income (0.19) (0.19) (0.05)
Distributions from capital gains (0.25) (0.26) -
Distributions in excess of net investment income - - -
Total distributions (0.44) (0.45) (0.05)
NET ASSET VALUE, END OF PERIOD $ 15.28 $ 15.28 $ 14.91
Total Return 2.88% 6.54% 5.54%
Ratios / Supplemental Data
Net assets, end of period (in thousands) $ 42,123 $ 43,219 $ 18,127
Ratio of expenses to average net assets 2.45%(a) 2.44% 2.31%(a)
Ratio of expenses to average net asset excluding
waiver 2.45%(a) 2.44% 2.69%(a)
Ratio of net investment income to average net assets 1.96%(a) 1.51% 1.60%(a)
Portfolio turnover rate 73%(a) 78% 13%
</TABLE>
(a) Annualized.
** Reflects operations for the period from May 24, 1993
(commencement of operations), to September 30, 1993.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
FINANCIAL HIGHLIGHTS
Class B Shares
<TABLE>
MENTOR PERPETUAL GLOBAL PORTFOLIO
SIX MONTHS YEAR
ENDED ENDED
3/31/95 9/30/94(B)
(UNAUDITED)
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.15 $ 14.18
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (0.13) (0.04)
Net realized and unrealized gain (loss) on investments (0.18) 0.01
Total from investment operations (0.31) (0.03)
LESS DISTRIBUTIONS
Dividends from income - -
Distributions from capital gains - -
Distributions in excess of net investment income - -
Total distributions - -
NET ASSET VALUE, END OF PERIOD $ 13.84 $ 14.15
Total Return (2.19%) 0.35%
Ratios / Supplemental Data
Net assets, end of period (in thousands) $ 8,634 $ 7,987
Ratio of expenses to average net assets 2.86%(a) 2.97%(a)
Ratio of expenses to average net asset excluding waiver 3.06%(a) 3.93%(a)
Ratio of net investment loss to average net assets (1.18%)(a) (0.82%)(a)
Portfolio turnover rate 37%(a) 2%
</TABLE>
(a) Annualized.
(b) Reflects operations for the period from March 29, 1994
(commencement of operations), to September 30, 1994
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
THE MENTOR FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995 (UNAUDITED)
NOTE 1: ORGANIZATION
The Mentor Funds, formerly Cambridge Series Trust ("Trust"), is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company. On April 12, 1995 the name of the Trust was changed to The
Mentor Funds ("Mentor"). Mentor consists of six separate diversified portfolios
(hereinafter each individually referred to as a "Portfolio" or collectively as
the "Portfolios") at March 31, 1995, as follows:
Mentor/Cambridge Growth Portfolio (formerly Cambridge Growth Portfolio)
("Growth Portfolio")
Mentor Capital Growth Portfolio (formerly
Cambridge Capital Growth
Portfolio) ("Capital Growth Portfolio")
Mentor Quality Income Portfolio (formerly
Cambridge Government Income Portfolio
("Quality Income Portfolio")
Mentor Municipal Income Portfolio (formerly
Cambridge Municipal Income Portfolio
("Municipal Income Portfolio")
Mentor Income and Growth Portfolio (for
merly Cambridge Income and Growth Portfolio
("Income and Growth Portfolio")
Mentor Perpetual Global Portfolio (formerly
Cambridge Global Portfolio)
("Global Portfolio")
The assets of each Portfolio of Mentor are segregated and a shareholder's
interest is limited to the Portfolio in which shares are held.
Each Portfolio provides two classes of shares (Class A and Class B). Class B
shares are identical in all respects to Class A shares except that Class B
shares are sold pursuant to a distribution plan (Plan) adopted in accordance
with Investment Company Act Rule 12b-1 and are not subject to a sales load.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Portfolios:
(a) Valuation of Securities- Listed equity securities held by the Growth
Portfolio, the Capital Growth Portfolio, the Income and Growth Portfolio and the
Global Portfolio are valued at last sale prices reported on national securities
exchanges. Listed equity securities in which there were no sales are valued at
the mean between the bid and asked prices. Unlisted equity securities are
valued at the latest mean price. Bonds and other fixed-income securities are
valued at the last sale price on a national securities exchange, if available.
Otherwise, they are valued on the basis of prices furnished by an independent
pricing service. Short-term obligations are ordinarily valued at the mean
between the bid and asked prices as furnished by an independent pricing service.
However, short-term obligations with maturities of 60 days or less are valued at
amortized cost, which approximates value.
U.S. government obligations, held by the Quality Income Portfolio and the Income
and Growth Portfolio are valued at the mean between the over-the-counter bid and
asked prices as furnished by an independent pricing service. U.S. government
obligations and other short-term obligations maturing in 60 days or less are
valued at amortized cost, which approximates value.
Debt securities held by the Quality Income Portfolio for which current market
quotations are not readily available are valued at their fair value. An
independent pricing service values such securities taking into consideration
yield, stability, risk, quality, coupon, maturity, type of issue, trading
characteristics, special circumstances of a security or trading market, and any
other factors or market data it deems relevant in determining valuations for
normal institutional size trading units of debt securities and does not rely
exclusively on quoted prices. Any securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith under procedures established by and under the general
supervision and responsibility of the Mentor's Board of Trustees.
<PAGE>
Municipal bonds, held by the Municipal Income Portfolio, are valued at fair
value. An independent pricing service values the Portfolio's municipal bonds
taking into consideration yield, stability, risk, quality, coupon, maturity,
type of issue, trading characteristics, special circumstances of a security or
trading market, and any other factors or market data it deems relevant in
determining valuations for normal institutional size trading units of debt
securities and does not rely exclusively on quoted prices. The Board of
Trustees has determined that the fair value of debt securities with remaining
maturities of 60 days or less shall be their amortized cost value unless the
particular circumstances of the security indicate otherwise.
(b) Repurchase Agreements- It is the policy of Mentor to require the custodian
bank to take possession, to have legally segregated in the Federal Reserve Book
entry system, or to have segregated within the custodian bank's vault all
securities held as collateral in support of repurchase agreement investments.
Additionally, procedures have been established by Mentor to monitor, on a daily
basis, the market value of each repurchase agreement's underlying securities to
ensure the existence of a proper level of collateral.
Mentor will only enter into repurchase agreements with banks and other
recognized financial institutions such as broker/dealers which are deemed by the
Mentor's adviser to be creditworthy pursuant to guidelines established by the
Mentor's Trustees. Risks may arise from the potential inability of
counterparties to honor the terms of the repurchase agreement. Accordingly,
Mentor could receive less than the repurchase price on the sale of collateral
securities.
(c) Borrowings- Each of the Portfolios (except for Municipal Income Portfolio)
may, under certain circumstances, borrow money directly or through reverse
repurchase agreements (arrangements in which the Portfolio sells a security for
a percentage of its market value with an agreement to buy it back on a set date)
or pledge securities. Each Portfolio may borrow up to one-third of the value of
its net assets and pledge up to 10% of the value of those assets to secure such
borrowings.
(d) Security Transactions and Investment Income-Security transactions for the
Portfolios are accounted for on trade date. Dividend income is recorded on the
ex-dividend date. Interest income (except for Municipal Income Portfolio) is
recorded on the accrual basis. Interest income includes interest and discount
earned (net of premium) on short-term obligations, and interest earned on all
other debt securities including original issue discount as required by the
Internal Revenue Code. Dividends to shareholders and capital gain
distributions, if any, are recorded on the ex-dividend date.
Interest income for the Municipal Income Portfolio includes interest earned net
of premium, and original issue discount as required by the Internal Revenue
Code.
(e) Federal Taxes- No provision for federal income taxes has been made since it
is each Portfolio's intent to comply with the provisions applicable to regulated
investment companies under the Internal Revenue Code and to distribute to its
shareholders within allowable time limit substantially all taxable income and
realized capital gains.
Dividends paid by the Municipal Income Portfolio representing net interest
received on tax-exempt municipal securities are not includable by shareholders
as gross income for federal income tax purposes because the Portfolio intends to
meet certain requirements of the Internal Revenue Code applicable to regulated
investment companies which will enable the Portfolio to pay tax-exempt interest
dividends. The portion of such interest, if any, earned on private purpose
municipal bonds issued after August 7, 1986, may be considered a tax preference
item to shareholders.
<PAGE>
At September 30, 1994, Growth Portfolio for federal tax purposes, had a capital
loss carryforward of approximately $2,690,000. Pursuant to the Code, such
capital loss carryforwards expire as follows: $1,065,000 in 2001 and $1,625,000
in 2002.
At September 30, 1994, Quality Income Portfolio for federal tax purposes, had a
capital loss carryforward of approximately $4,500,000. Pursuant to the Code,
such capital loss carryforwards expire as follows: $821,000 in 2001 and
$3,679,000 in 2002.
At September 30, 1994, Income and Growth Portfolio for federal tax purposes, had
a capital loss carryforward of approximately $92,000. Pursuant to the Code,
such capital loss carryforwards will expire in 2002.
Such capital loss carryforwards will reduce the Portfolios' taxable income
arising from future net realized gains on investments, if any, to the extent
permitted by the Internal Revenue Code, and thus will reduce the amount of the
distributions to shareholders which would otherwise relieve the Portfolios of
any liability for federal tax.
(f) When-Issued and Delayed Delivery Transactions- The Portfolios may engage in
when-issued or delayed delivery transactions. To the extent the Portfolios
engage in such transactions, they will do so for the purpose of acquiring
portfolio securities consistent with their investment objectives and policies
and not for the purpose of investment leverage. The Portfolios will record a
when-issued security and the related liability on the trade date. Until the
securities are received and paid for, the Portfolios will maintain security
positions such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
(g) In order to gain exposure to or protect against declines in security values,
the Quality Income Portfolio and Municipal Income Portfolio may buy and sell
futures contracts. The Portfolios may also buy or write put or call options on
these futures contracts.
The Portfolios generally sell futures contracts to hedge against declines in the
value of portfolio securities. The Portfolios may also purchase futures
contracts to gain exposure to market changes as it may be more efficient or cost
effective than actually buying securities. The Portfolios will segregate assets
to cover its commitments under such speculative futures contracts.
Upon entering into a futures contract, the Portfolios are required to deposit
either cash or securities in an amount (initial margin) equal to a certain
percentage of the contract value. Subsequent payments (variation margin) are
made or received by the Portfolios each day. The variation margin payments are
equal to the daily changes in the contract value and are recorded as unrealized
gains and losses. The Portfolios recognize a realized gain or loss when the
contract is closed. For the six months ended March 31, 1995, the Quality Income
Portfolio had a net realized gain of $184,640 and Municipal Income Portfolio had
a net realized loss of $109,169 on closed futures contracts.
Risks of entering into futures contracts (and related options) include the
possibility that there may be an illiquid market and that a change in the value
of the contract or option may not correlate with changes in the value of the
underlying securities. At March 31, 1995, the Quality Income Portfolio had open
U.S. Treasury Note futures contracts with an aggregate notional value of
$7,400,000. The Portfolio recorded unrealized gains of $24,281 on such futures
contracts.
(h) In order to produce incremental earnings or protect against changes in the
value of portfolio securities, the Quality Income Portfolio may buy and sell put
and call options, write covered call options on portfolio securities and write
cash-secured put options.
<PAGE>
The Portfolio generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. The
Portfolio may also use options for speculative purposes, although it does not
employ options for this at the present time. The Portfolio will segregate
assets to cover its obligations under option contracts.
Options contracts are valued daily based upon the last sales price on the
principal exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Portfolio will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
The risk in writing a call option is that the Portfolio gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Portfolio may incur a
loss if the market price of the security decreases and the option is exercised.
The risk in buying an option is that the Portfolio pays a premium whether or not
the option is exercised. The Portfolio also has the additional risk of not
being able to enter into a closing transaction if a liquid secondary market does
not exist. The Portfolio may also write over-the-counter options where the
completion of the obligation is dependent upon the credit standing of the
counterparty. At March 31, 1995, Quality Income Portfolio had open Eurodollar
Futures option contracts with an aggregate notional value of $48,000,000. The
Portfolio recorded unrealized gains of $133,394 on such options contract.
(i) Deferred Expenses- Costs incurred by the Portfolios in connection with their
initial share registration, other than organization expenses, were deferred and
are being amortized on a straight-line basis through April 1997.
(j) Expenses- Expenses of the Portfolios (other than distribution services fees)
and waivers and reimbursements, if any, are allocated to each class of shares
based on their relative daily average net assets for the period. Expenses
incurred by the Portfolios which do not specifically relate to an individual
Portfolio are allocated among all Portfolios based on a Portfolio's relative net
asset value size or as deemed appropriate by the administrator.
(k) Dollar Roll Transactions- The Quality Income Portfolio, Income and Growth
Portfolio and Global Portfolio may enter into dollar roll transactions, with
respect to mortgage securities issued by GNMA, FNMA, FHLMC, in which the
Portfolios sell mortgage securities to financial institutions and simultaneously
agree to repurchase substantially similar (same type, coupon and maturity)
securities at a later date at an agreed upon price. During the period between
the sale and repurchase, the Portfolios forego principal and interest paid on
the mortgage security sold. The Portfolios are compensated by the interest
earned on the cash proceeds of the initial sale and any additional fee income
received on the sale.
(l) Currency Transactions- Foreign currency amounts are converted into U.S.
dollars at the current rate of such currencies against U.S. dollars as follows:
assets and liabilities at the rate of exchange at the end of the respective
period; purchases and sales of securities and income and expenses at the rate of
exchange prevailing on the dates of such transactions. It is not practicable to
isolate that portion of the results of operations arising from changes in the
exchange rates from the portion arising from changes in the market prices of
investment securities.
(m) Distributions to shareholders are determined in accordance with income tax
regulations. Distributions from taxable net investment income and net capital
gains can
<PAGE>
exceed book basis net investment income and net capital gains. Effective
October 1, 1993, the Portfolios adopted statement of Position 93-2:
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain and Return of capital Distributions by Investment Companies. As a
result of this statement, the Portfolios changed the financial statement
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions determined in
accordance with income tax regulations. Accordingly, the following Portfolios
have made reclassifications as of September 31, 1993 to reflect the adoption of
the statement. The Growth Portfolio reclassification resulted in an increase in
undistributed net investment income of $367,348 and a decrease in additional
paid-in capital of $367,348. The Capital Growth Portfolio reclassification
resulted in an increase in undistributed net investment income of $49,507 and a
decrease in undistributed realized gain (loss) on investment transactions and
additional paid-in capital of $49,484 and $23, respectively.
Differences between book basis investment income available for distribution and
tax basis investment income available for distribution are primarily
attributable to differences in the treatment on net operation losses.
NOTE 3: DIVIDENDS
Dividends will be declared daily and paid monthly to all shareholders invested
in the Quality Income Portfolio and the Municipal Income Portfolio on the record
date. Dividends are declared and paid semi-annually to all shareholders invested
in the Capital Growth Portfolio on the record date, dividends are declared and
paid annually to all shareholders invested in the Growth Portfolio and the
Global Portfolio on the record date, and dividends are declared and paid
quarterly to all shareholders invested in the Income and Growth Portfolio on the
record date. Dividends will be reinvested in additional shares of the same class
and Portfolio on payment dates at the ex-dividend date net asset value without
a sales charge unless cash payments are requested by shareholders in writing to
the Mentor. Capital gains realized by each Portfolio, if any, will be
distributed at least once every 12 months.
NOTE 4: INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Commonwealth Advisors, Inc., (formerly Cambridge Investment Advisors, Inc.), the
Portfolios' investment adviser (Investment Adviser), receives for its services
an annual investment advisory fee not to exceed the following percentages of the
average daily net assets of the particular Portfolio: Growth Portfolio, 0.80%;
Capital Growth Portfolio, 0.80%; Qulity Income Portfolio, 0.60%; Municipal
Income Portfolio, 0.60%; Income and Growth Portfolio, 0.75%; and Global
Portfolio, 1.10%. The Investment Adviser may, from time to time, voluntarily
waive some or all of its investment advisory fee and may terminate any such
voluntary waiver at any time at its sole discretion.
The Investment Adviser pays each sub-adviser an annual fee not to exceed the
following percentage of Portfolio assets: Growth Portfolio, 0.40%, Capital
Growth Portfolio, 0.40%; Quality Income Portfolio, 0.30%; and Municipal Income
Portfolio, 0.30%. The sub-adviser to the Income and Growth Portfolio receives
from the Investment Adviser an annual fee expressed as a percentage of that
Portfolio's assets as follows: 0.325% on the first $50 million in Portfolio
assets, .0275% on the next $150 million in assets, and 0.200% on assets over
$500 million. The sub-adviser to the Global Portfolio receives 0.55% on the
first $75 million in Portfolio assets and 0.50% over $75 million. No
performance or incentive fees are paid to the sub-advisers. Under certain Sub-
Advisory Agreements, the particular sub-adviser may, from time to time,
voluntarily waiver some or all of its sub-advisory fee charged to the Investment
Adviser and may terminate any such voluntary waiver at any time in its sole
discretion.
<PAGE>
Effective April 12, 1995, Growth Portfolio, Capital Growth Portfolio,
Quality Income Portfolio and Global Portfolio terminated their existing
sub advisory agreements. Also, on April 12, 1995, the Board of Trustees
approved new investment advisory agree- ments with Commonwealth
Advisors, Inc. for the Growth Portfolio, Capital Growth Portfolio and
with Mentor Perpetual Advisors, Inc. for the Global Portfolio, all of
which are subject to shareholders approval.
For the six months ended March 31, 1995 the Investment Adviser and
sub-advisers earned and voluntarily waived the following advisory fees:
<TABLE>
Adviser Adviser Fee Sub Adviser Sub-Adviser Fee
Fee Voluntarily Fee Voluntarily
Portfolio Earned Waived Earned Waiver
<S> <C> <C> <C> <C>
Growth $161,118 - $ 80,559 -
Capital Growth 240,136 - 120,068 -
Quality Income 298,013 - 149,007 -
Municipal Income 197,610 - 98,805 -
Income and Growth 225,134 112,567 -
Global 94,167 $16,643 47,084 -
</TABLE>
Administrative personnel and services are provided by Mentor Investment
Group, Inc. (formerly Investment Management Group, Inc.) at an annual
rate of 0.125 of 1% on the first $1.5 billion of average aggregate daily
net assets of Mentor and 0.120 of 1% on average aggregate daily net
assets in excess of $1.5 billion. On April 12, 1995, Investment
Management Group, Inc. changed its name to Mentor Investment Group, Inc.
("Mentor Group") and the Board of Trustees approved a new administration
agreement at the annual rate of 0.10% of average daily net assets for
each of the Portfolios. Mentor Group may voluntarily waive some or all
of its fee.
For the six months ended March 31, 1995, Mentor Investment Group earned
administrative fees of $25,175 (Growth Portfolio), $37,521 (Capital
Growth Portfolio), $62,086 (Quality Income Portfolio), $41,169
(Municipal Income Portfolio), $37,522 (Income and Growth Portfolio), and
$10,700 (Global Portfolio).
The Class B shares of the Portfolios have adopted a Distribution Plan
(the Plan) pursuant to Rule 12b-1 under the Investment Company Act of
1940. Each Portfolio will reimburse Mentor Distributors, Inc. (formerly
Cambridge Distributors, Inc.), from the assets of the Class B Shares of
each Portfolio, for fees it paid which relate to the distribution and
administration of each Portfolio's Class B Shares. The Plan provides
that the Portfolio may incur distribution expenses up to 0.75% of 1% of
the average daily net assets of the Class B shares for the Growth
Portfolio, Capital Growth Portfolio, Income and Growth and Global
Portfolio and 0.50% of 1% of the average daily net assets of the Class B
shares for the Quality Income Portfolio and Municipal Income Portfolio.
Effective April 12, 1995, Cambridge Distributors, Inc. changed its name
to Mentor Distributors, Inc.
Mentor has adopted a Shareholder Servicing Plan (the Service Plan) with
respect to Class A and Class B shares of each Portfolio. Under the
Service Plan, financial institutions will enter into shareholder service
agreements with the Portfolios to provide administrative support
services to their customers who from time to time may be owners of
record or beneficial owners of Class A or Class B shares of one or more
Portfolios. In return for providing these support services, a financial
institution may receive payments from one or more Portfolios at a rate
not exceeding .25 of 1% of the average daily net assets of the Class A
or Class B shares of the particular Portfolio or Portfolios beneficially
owned by the financial institution's customers for whom it is holder of
record or with whom it has a servicing relationship.
<PAGE>
NOTE 5: INVESTMENT TRANSACTIONS
Purchases, and sales of investments (excluding short-term investment),
for the six months ended March 31, 1995, were as follows:
Portfolio Purchases Sales
Growth $ 11,075,382 $ 17,581,519
Capital Growth 29,106,291 33,116,584
Quality Income 33,460,927 79,556,113
Municipal Income 20,537,447 31,148,699
Income and Growth 20,573,272 21,044,934
Global 3,972,845 2,981,213
NOTE 6: UNREALIZED APPRECIATION AND DEPRECIATION OF INVESTMENTS The
cost of investments for federal income tax purposes, exclusive of
investments in short-term securities, amounted to $32,332,447 for the
Growth Portfolio, $47,502,612 for the Capital Growth, $90,608,302 for
the Quality Income Portfolio, $61,665,681 for Municipal Income
Portfolio, $55,615,582 for the Income and Growth Portfolio, and
$16,689,711 for the Global Portfolio at March 31, 1995. Gross
unrealized appreciation and depreciation of investments at March 31,
1995 were as follows:
Net
Gross Gross Unrealized
Unrealized Unrealized Appreciation
Portfolio Appreciation Depreciation Depreciation
Growth $5,528,931 $ 518,444 $ 5,010,487
Capital Growth 6,306,807 290,845 6,015,962
Quality Income 866,303 3,120,590 (2,254,287)
Municipal Income 2,251,179 755,067 1,496,112
Income and Growth 2,941,473 1,979,918 961,555
Global 1,060,104 1,017,215 42,889
NOTE 7: FORWARD CONTRACTS
In connection with portfolio purchases and sales of securities denominated in a
foreign currency, the Growth Portfolio, the Capital Growth Portfolio, the Income
and Growth Portfolio and the Global Portfolio may enter into forward foreign
currency exchange contracts (contracts). Additionally, from time to time the
Growth Portfolio, the Capital Growth Portfolio, the Income and Growth Portfolio
and the Global Portfolio may enter into contracts to hedge certain foreign
currency assets. Contracts are recorded at market value. Realized gains and
losses arising from such transactions are included in net gain (loss) on
investments and forward foreign currency exchange contracts. The Portfolios are
subject to the credit risk that the other party will not complete the
obligations of the contract. At March 31, 1995 the Growth Portfolio, the
Capital Growth Portfolio and the Global Portfolio had net realized losses of
$1,572, $3,633 and $16, respectively on forward contracts.
<PAGE>
NOTE 8: CAPITAL SHARES TRANSACTIONS
The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value) for each class of shares. Transactions in Portfolio shares were
as follows:
<TABLE>
Mentor/Cambridge Growth Portfolio
Six Months Year
Ended 3/31/95 Ended 9/30/94
Shares Dollars Shares Dollars
<S> <C> <C> <C> <C>
CLASS A:
Shares outstanding, beginning of period 993,054 $14,384,001 1,180,695 $ 17,187,308
Shares sold 37,706 549,904 220,548 3,512,282
Shares issued upon reinvestment of distributions - - - -
Shares redeemed (191,502) (2,821,272) (408,189) (6,315,589)
Shares outstanding, end of period 839,258 $12,112,633 993,054 $ 14,384,001
CLASS B:
Shares outstanding, beginning of period 1,974,036 $29,476,672 2,113,910 $ 31,296,376
Shares sold 132,112 1,956,899 733,554 11,516,364
Shares issued upon reinvestment of distributions - - - -
Shares redeemed (531,766) (7,809,735) (873,428) (13,336,068)
Shares outstanding, end of period 1,574,382 $23,623,836 1,974,036 $ 29,476,672
</TABLE>
<TABLE>
Mentor Capital Growth Portfolio
Six Months Year
Ended 3/31/95 Ended 9/30/94
Shares Dollars Shares Dollars
<S> <C> <C> <C> <C>
CLASS A:
Shares outstanding, beginning of period 1,423,010 $19,871,755 2,055,500 $ 29,379,736
Shares sold 35,859 533,755 155,406 2,353,285
Shares issued upon reinvestment of distributions 30,563 441,634 21,385 320,355
Shares redeemed (222,071) (3,303,527) (809,281) (12,181,621)
Shares outstanding, end of period 1,267,361 $17,543,617 1,423,010 $ 19,871,755
CLASS B:
Shares outstanding, beginning of period 2,778,026 $39,640,479 3,744,511 $ 54,154,730
Shares sold 122,104 1,784,420 484,356 7,254,585
Shares issued upon reinvestment of distributions 59,412 851,964 29,045 435,097
Shares redeemed (456,169) (6,759,774) (1,479,886) (22,203,933)
Shares outstanding, end of period 2,503,373 $35,517,089 2,778,026 $ 39,640,479
</TABLE>
<PAGE>
<TABLE>
Mentor Quality Income Portfolio
Six Months Year
Ended 3/31/95 Ended 9/30/94
Shares Dollars Shares Dollars
<S> <C> <C> <C> <C>
CLASS A:
Shares outstanding, beginning of period 2,363,773 $ 34,735,118 3,403,828 $48,807,954
Shares sold 73,110 920,366 175,391 2,326,934
Shares issued upon reinvestment of distributions 47,222 594,580 104,113 1,395,612
Shares redeemed (385,842) (4,836,947) (1,319,559) (17,795,382)
Shares outstanding, end of period 2,098,263 $ 31,413,117 2,363,773 $34,735,118
CLASS B:
Shares outstanding, beginning of period 6,103,595 $ 90,175,927 9,059,536 $129,708,345
Shares sold 132,155 1,669,282 895,699 12,254,465
Shares issued upon reinvestment of distributions 117,900 1,485,765 290,900 3,906,462
Shares redeemed (1,258,606) (15,868,276) (4,142,540) (55,693,345)
Shares outstanding, end of period 5,095,044 $ 77,462,698 6,103,595 $90,175,927
</TABLE>
<TABLE>
Mentor Municipal Income Portfolio
Six Months Year
Ended 3/31/95 Ended 9/30/94
Shares Dollars Shares Dollars
<S> <C> <C> <C> <C>
CLASS A:
Shares outstanding, beginning of period 1,738,078 $25,481,099 1,822,030 $ 26,713,229
Shares sold 43,260 608,782 192,548 2,946,139
Shares issued upon reinvestment of distributions 24,305 344,270 51,632 797,051
Shares redeemed (316,580) (4,449,896) (328,132) (4,975,320)
Shares outstanding, end of period 1,489,063 $21,984,255 1,738,078 $ 25,481,099
CLASS B:
Shares outstanding, beginning of period 3,198,229 $47,912,628 3,173,809 $ 47,130,669
Shares sold 107,107 1,504,372 723,926 11,283,387
Shares issued upon reinvestment of distributions 53,335 756,696 109,721 1,694,171
Shares redeemed (465,268) (6,572,481) (809,227) (12,195,599)
Shares outstanding, end of period 2,893,403 $43,601,215 3,198,229 $ 47,912,628
</TABLE>
<PAGE>
<TABLE>
Mentor Income and Growth Portfolio
Six Months Year
Ended 3/31/95 Ended 9/30/94
Shares Dollars Shares Dollars
<S> <C> <C> <C> <C>
CLASS A:
Shares outstanding, beginning of period 1,164,060 $ 17,220,516 661,893 $ 9,518,102
Shares sold 140,829 2,064,318 621,368 9,508,705
Shares issued upon reinvestment of distributions 38,628 560,297 31,362 474,885
Shares redeemed (137,225) (2,019,250) (150,563) (2,281,176)
Shares outstanding, end of period 1,206,292 $ 17,825,881 1,164,060 $17,220,516
CLASS B
Shares outstanding, beginning of period 2,828,735 $ 42,323,576 1,216,165 $17,686,756
Shares sold 258,920 3,834,539 1,909,839 29,152,862
Shares issued upon reinvestment of distributions 81,468 1,177,260 59,116 895,345
Shares redeemed (412,444) (6,100,993) (356,385) (5,411,387)
Shares outstanding, end of period 2,756,679 $ 41,234,382 2,828,735 $42,323,576
</TABLE>
<TABLE>
Mentor Perpetual Global Portfolio
Six Months Year
Ended 3/31/95 Ended 9/30/94*
Shares Dollars Shares Dollars
<S> <C> <C> <C> <C>
CLASS A:
Shares outstanding, beginning of period 624,181 $ 8,852,179 - $ -
Shares sold 57,358 797,810 713,962 10,133,334
Shares issued upon reinvestment of distributions - - - -
Shares redeemed (97,448) (1,330,310) (89,781) (1,281,155)
Shares outstanding, end of period 584,091 $ 8,319,679 624,181 $ 8,852,179
CLASS B:
Shares outstanding, beginning of period 564,671 $ 8,005,109 - $ -
Shares sold 128,977 1,756,750 593,033 8,409,160
Shares issued upon reinvestmentof distributions - - - -
Shares redeemed (69,701) (950,483) (28,362) (404,051)
Shares outstanding, end of period 623,947 $ 8,811,376 564,671 $ 8,005,109
</TABLE>
* For the period from March 29, 1994 (date of initial public investment) to
September 30, 1994.
<PAGE>
TRUSTEES
Daniel J. Ludeman, TRUSTEE & CHAIRMAN
Chairman and Chief Executive Officer
Mentor Investment Group, Inc.
Arnold H. Dreyfuss, TRUSTEE
Former Chairman and Chief Executive Officer
Hamilton Beach/Proctor-Silex, Inc.
Thomas F. Keller, TRUSTEE
Dean, Fuqua School of Business
Duke University
Louis W. Moelchert, Jr., TRUSTEE
Vice President for Business & Finance
University of Richmond
Stanley F. Pauley, Jr., TRUSTEE
Chairman and Chief Executive Officer
E. R. Carpenter Company, Incorporated
Troy A. Peery, Jr., TRUSTEE
President
Heilig-Meyers Company
Peter J. Quinn, Jr., TRUSTEE
Managing Director
Mentor Investment Group, Inc.
OFFICERS
Paul F. Costello, PRESIDENT
Managing Director
Mentor Investment Group, Inc.
Terry L. Perkins, TREASURER
Vice President
Mentor Investment Group, Inc.
John M. Ivan, SECRETARY
Managing Director and Assistant General Counsel
Wheat First Butcher Singer, Inc.
Michael A. Wade, ASSISTANT TREASURER
Associate Vice President
Mentor Investment Group, Inc.
SHAREHOLDER SERVICES
1-800-382-0016
DISTRIBUTOR
Mentor Distributors, Inc.
901 East Byrd Street, Richmond, VA 23219
<PAGE>
MENTOR FUNDS
Mentor Semi-Annual Report
Riverfront Plaza
901 East Byrd Street
Richmond, Virginia 23219
1-800-382-0016
This report is authorized for distribution to prospective investors
only when preceded or accompanied by the Trust's prospectus, which
contains facts concerning its objective and policies, management fees,
expenses, and other information.
5/95 MK204
