Mentor Institutional Money Market Portfolio
Mentor Institutional U.S. Government
Money Market Portfolio
---------------------
Semi-Annual Report
---------------------
March 31, 1998
[logo]
<PAGE>
Mentor Institutional Money Market Portfolio
Mentor Institutional U.S. Government Money Market Portfolio
March 31, 1998
Message from the Chairman and President
- --------------------------------------------------------------------------------
To Our Shareholders:
It is a privilege to send you the semi-annual report for the two Mentor
institutional cash management funds -- the U.S. Government Money Market
Portfolio and the new Money Market Portfolio -- for the period ended March 31,
1998.
At Mentor Investment Group* we provide diversified financial management services
to a broad range of investors including corporations, foundations, endowments,
municipalities, public funds, and individual investors. We offer a wide variety
of investment styles to investors through mutual funds, variable annuities, and
separately-invested portfolios.
The cash Portfolios are designed to help institutional investors and high net
worth individuals manage their daily cash needs. The objective of the Portfolios
is to seek as high a rate of current income as Mentor Investment Advisors
believes to be consistent with the preservation of capital and maintenance of
liquidity.** Investments in the Government Portfolio include U.S. government
securities and repurchase agreements collateralized by U.S. government
securities. The Money Market Portfolio, recently launched and represented for
the first time in this report to shareholders, invests solely in a diversified
list of high-quality money market securities.
In the commentary that follows members of the cash management team present their
perspective on the markets and their investment strategy for the Portfolios.
Please review the information carefully. Should you have questions, please
contact your consultant, or call us directly at (800) 382-0016. We welcome your
communications. On behalf of all of us at Mentor Investment Group, we thank you
for your investment in the cash Portfolios.
Sincerely,
/s/ Daniel J. Ludeman /s/Paul F. Costello
- --------------------- -------------------
Daniel J. Ludeman Paul F. Costello
Chairman President
* Mentor Investment Advisors, LLC/dba Mentor Investment Group, LLC
** While the managers seek to invest the Portfolios in accordance with their
proprietary strategy, there is no guarantee of investment success. An
investment in the Portfolios is neither insured nor guaranteed by the U.S.
government, and there can be no assurance that they will maintain a stable
net asset value of $1.00 per share.
1
<PAGE>
Mentor Institutional Money Market Portfolio
Mentor Institutional U.S. Government Money Market Portfolio
Managers' Commentary: The Cash Management Team
March 31, 1998
- --------------------------------------------------------------------------------
Economic Overview
For the six months ended March 31, 1998, the U.S. economy continued the pattern
of unprecedented stability which has become so familiar over the past two years.
Activity was strong enough to keep us moving ahead, but not so strong as to
cause overheating and the risk of inflation. Indeed, economic stability has been
such that we have now completed a full year since the last Fed move. Production
costs have risen as a result of a tight labor market and high capacity
utilization, but improved productivity and wide profit margins have allowed
industry to refrain from price increases, and inflation has not surfaced.
About halfway through the reporting period just ended, however, an element was
introduced which cast doubt on the sustainability of the economic stability we
have enjoyed for so long. In December and January, a financial crisis erupted in
Asia, throwing the economies in that area into turmoil and threatening to have a
ripple effect on the U.S. economy. It was anticipated that exports would slump
as demand for U.S. products in those countries decreased, while imports would
increase as soaring exchange rates made foreign products cheap. Both factors
tend to dampen U.S. production.
Evidence indicates that the Asian turmoil is indeed having a dampening effect,
but so far, it appears to be minor. Exports have declined and imports have
risen, causing a widening of the trade gap. Certain companies heavily engaged in
the Asian trade have reported a softening in demand, but the overall effect on
the economy seems to be nominal at this point. Granted, it may still be too
early to determine the full effect. Fed chairman Greenspan himself has indicated
that we can expect some effect "in the spring." He has also indicated that the
Fed is more or less "on hold" pending further evidence of either inflation or
economic weakness.
Economists have predicted that the Asian ripple effect could cut our GDP (gross
domestic product) growth by 1% or more. With our economic expansion now more
than five years old and growing tired, it would seem to us that the greater
challenge for the Federal Reserve in 1998 will be to sustain growth rather than
contain inflation. In other words, we see little prospect of a Fed increase in
rates except perhaps late in the year. The greater probability, we think, is for
a continuation of the neutrality we have seen, or even a Fed ease if the Asian
ripple effect begins to make itself felt.
In response to our expectations with regard to interest rates specifically and
to the economy in general, we are managing the Portfolios to a target average
maturity of 55-60 days - longer than the industry average. We intend to maintain
that target at least through the second quarter. At no time, however, will we
compromise our primary objectives of safety and liquidity.
The Portfolios+
o The period ended March 31, 1998 marked the initial operating period for the
new Mentor Institutional Money Market Portfolio. Developed for institutional
clients, this fund is designed to provide safety and liquidity, combined
with reasonable income, by investing in a diversified list of high-quality
money market securities.
o The Mentor Institutional U.S. Government Money Market Portfolio is intended
for use by institutional clients and is designed to provide maximum safety
and liquidity combined with reasonable income by investing only in U.S.
government and government agency securities, and repurchase agreements
backed by such securities. It is rated AAAm by Standard & Poors.
+ While the managers seek to invest the Portfolios in accordance with their
proprietary strategy, there is no guarantee of investment success. An
investment in the Portfolios is neither insured nor guaranteed by the U.S.
government, and there can be no assurance that they will maintain a stable
net asset value of $1.00 per share.
2
<PAGE>
Mentor Institutional
Money Market Portfolio
Portfolio of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
<S> <C>
Bankers Acceptances - 6.31%
American National Bank,
5.66%, 6/08/98 $ 1,000,000 $ 989,309
CoreStates Bank, 5.62%,
5/26/98 1,000,000 991,414
-----------
Total Bankers Acceptances 1,980,723
-----------
Bank Notes - 19.11%
Abbey National, North
America, 5.88%, 12/22/98 1,000,000 1,002,143
Banc One Milwaukee, North
America, 5.55%, 1/29/99 1,000,000 999,602
Fifth Third Bank, 5.53%,
5/18/98 1,000,000 999,974
Greenwood Trust Company,
5.56%, 5/11/98 1,000,000 1,000,000
Harris Trust, 5.54%, 4/08/98 1,000,000 1,000,000
Key Bank, North America,
5.54%, 1/14/99 1,000,000 999,673
-----------
Total Bank Notes 6,001,392
-----------
Commercial Paper - 31.59%
Alpine Securitization
Corporation, 5.55%,
5/07/98 (a) 1,000,000 994,450
Bankers Trust Company,
5.71%, 6/05/98 1,000,000 989,690
General Electric Capital,
5.35%, 7/20/98 1,000,000 983,653
Glencore Financial Limited,
5.51%, 6/04/98 1,000,000 990,204
Greenwich Funding
Corporation, 5.50%,
4/16/98 (a) 1,000,000 997,708
Merrill Lynch, 5.67%,
4/30/98 1,000,000 995,433
Mont Blanc Capital
Corporation, 5.57%,
4/27/98 1,000,000 995,977
JP Morgan, 5.50%, 6/15/98 1,000,000 988,542
Repeat Offering Securities,
5.55%, 4/28/98 1,000,000 995,838
Salomon Smith Barney,
5.49%, 7/01/98 1,000,000 986,123
-----------
Total Commercial Paper 9,917,618
-----------
Food and Kindred Products - 3.18%
Mississippi Business Financial
Corporation (Taxable
Variable Rate Demand),
5.80%, 1/01/23 (b) 1,000,000 1,000,000
-----------
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 2)
<S> <C>
Health Care - 3.18%
Catholic Health Initiatives
(Taxable Variable Rate
Demand), 5.65%, 12/01/27 $ 1,000,000 $ 1,000,000
-----------
Real Estate - 3.82%
C.C.M. Properties, 5.75%,
2/01/11 1,200,000 1,200,000
-----------
U.S. Government Agencies - 9.20%
Federal Home Loan Mortgage
Corporation, 5.57%,
6/05/98 1,000,000 989,942
Federal National Mortgage
Association, 5.58%,
1/21/99 (b) 1,000,000 999,677
Student Loan Mortgage
Association, 5.38%,
11/10/98 900,000 898,136
-----------
Total U.S. Government
Agencies 2,887,755
-----------
Repurchase Agreements - 23.84%
Goldman, Sachs & Company
Dated 3/31/98, 6.08%,
due 4/01/98, collateralized by
$8,861,606 (original face value)
Federal Home Loan Mortgage
Corporation, 6.50%, 4/01/02;
market value $7,636,195
(cost $7,486,466) 7,486,466 7,486,466
-----------
Total Investments
(cost $31,473,954)--100.23%
31,473,954
-----------
Other Assets less Liabilities -- (0.23%) (73,419)
-----------
Net Assets -- 100.00%
$31,400,535
===========
</TABLE>
Interest rates disclosed represent annualized yield to date of maturity, except
for floating rate securities described in (b).
(a) These are securities that may be resold to qualified institutional 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 illiquid under guidelines that have been established by the Board of
Trustees.
(b) Floating Rate Securities - The rates shown are the effective rates at March
31, 1998.
See notes to financial statements.
3
<PAGE>
Mentor Institutional U.S. Government
Money Market Portfolio
Portfolio of Investments
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C>
U.S. Government Agencies - 59.38%
Federal Farm Credit Bank
5.70%, 11/03/98 $ 1,000,000 $ 1,001,129
Federal Home Loan Bank
5.40% - 5.90%,
04/01/98 - 02/02/99 29,360,000 29,331,040
Federal Home Loan
Mortgage Corporation
5.43% - 5.57%,
05/29/98 - 1/26/99 8,000,000 7,951,932
Federal National Mortgage
Association
5.33% - 5.59%, 4/22/98
- 3/16/99 18,000,000 17,977,731
-----------
Total U.S. Government
Agencies 56,261,832
===========
Repurchase Agreements - 40.72%
Goldman Sachs & Company
Dated 03/31/98, 6.08%,
due 04/01/98,
collateralized by
$24,091,895 (original
face value) Federal
National Mortgage
Association, 6.50%,
9/01/12, market value
$23,030,049 22,578,479 22,578,479
Dean Witter Dated 03/31/98, 6.06%, due
4/01/98, collateralized by $3,971,000
(original face value) U.S. Government
Treasury Securities, 5.50% - 7.88%,
7/23/98 - 2/15/21, market value
$4,080,795 4,000,000 4,000,000
Lehman Brothers, Inc.
Dated 03/31/98, 6.08%, due 4/01/98,
collateralized by $3,155,000 (par value)
International Bank Reconstruction &
Development Bond, 8.62%, 10/15/16, market
value $4,083,046 4,000,000 4,000,000
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C>
Repurchase Agreements (continued)
Merrill Lynch (a) Dated 03/31/98,
5.54%, due 04/16/98, collateralized
by $7,465,000 (par value) Government
National Mortgage Association, 8.00%,
12/15/21, market value $3,061,516 $3,000,000 $3,000,000
First Boston(a)
Dated 03/31/98, 5.50%, due 04/21/98,
collateralized by $5,086,000 (original
face value) Federal Home Loan Mortgage
Corporation, 7.00%, 12/01/27, market
value $5,150,739 5,000,000 5,000,000
Total Repurchase
Agreements 38,578,479
-----------
Total Investments
(cost $61,875,120) -- 100.10% 94,840,311
-----------
Other Assets less Liabilities -- (0.10%) (93,209)
-----------
Net Assets -- 100.00% $94,747,102
===========
</TABLE>
(a) These repurchase agreements are deemed illiquid because they cannot be
resold within seven business days from March 31, 1998
See notes to portfolios of investments.
4
<PAGE>
Mentor Funds
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
March 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Institutional
Institutional U.S. Government
Money Market Money Market
Portfolio Portfolio
<S> <C>
Assets
Investments, at amortized
cost (Note 2)
Investment securities $ 23,987,488 $ 56,261,832
Repurchase agreements 7,486,466 38,578,479
------------ ------------
Total investments 31,473,954 94,840,311
Receivables
Dividends and interest 80,826 247,544
Deferred expenses (Note 2) 16,329 13,925
Other -- 26,212
------------ ------------
Total assets 31,571,109 95,127,992
============ ============
Liabilities
Payables
Dividends 142,754 379,912
Accrued expenses and other
liabilities 27,820 978
------------ ------------
Total liabilities 170,574 380,890
------------ ------------
Net Assets $ 31,400,535 $ 94,747,102
============ ============
Shares outstanding 31,400,535 94,747,102
Net Asset Value per Share $ 1.00 $ 1.00
============ ============
</TABLE>
See notes to financial statements.
Statements of Operations
Six Months Ended March 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Institutional
Institutional U.S. Government
Money Market Money Market
Portfolio (a) Portfolio
<S> <C>
Investment income
Interest (Note 2) $ 708,016 $ 2,235,617
--------- -----------
Expenses
Management fee (Note 4) 8,641 86,777
Transfer agent fee 8,012 5,766
Custodian and accounting fees 7,475 14,597
Registration expenses 3,348 13,507
Shareholder reports and postage
expenses 1,173 1,866
Legal fees 615 1,287
Directors' fees and expenses 522 1,070
Audit fees 503 711
Organizational expenses -- 1,046
Miscellaneous 10,424 3,538
--------- -----------
Total expenses 40,713 130,165
--------- -----------
Net investment income $ 667,303 $ 2,105,452
========= ===========
</TABLE>
(a) For the period from November 19, 1997 (commencement of operations) to
March 31, 1998.
See notes to financial statements.
5
<PAGE>
Mentor Funds
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Institutional
Money Market Institutional U.S. Government
Portfolio Money Market Portfolio
------------------- -----------------------------------
Period Six Months
Ended 3/31/98 (a) Ended 3/31/98 Period
(Unaudited) (Unaudited) Ended 9/30/97 (b)
<S> <C>
Net Increase in Net Assets
Operations
Net investment income $ 667,303 $ 2,105,452 $ 741,466
------------- ------------- ------------
Increase in net assets resulting from operations 667,303 2,105,452 741,466
------------- ------------- ------------
Distributions to Shareholders
From net investment income (667,303) (2,105,452) (741,466)
------------- ------------- ------------
Total distributions to shareholders (667,302) (2,105,451) (741,465)
------------- ------------- ------------
Capital Share Transactions (Note 5)
Proceeds from sale of shares 46,673,120 64,441,720 70,658,240
Reinvested distributions 486,387 1,837,104 612,639
Shares redeemed (15,758,972) (33,336,369) (9,466,232)
------------- ------------- ------------
Change in net assets resulting from capital share transactions 31,400,535 32,942,455 61,804,647
------------- ------------- ------------
Increase in net assets 31,400,535 32,942,455 61,804,647
Net Assets
Beginning of period - 61,804,647 -
------------- ------------- ------------
End of period $ 31,400,535 $ 94,747,102 $ 61,804,647
============= ============= ============
</TABLE>
(a) For the period from November 19, 1997 (commencement of operations) to March
31, 1998. (b) For the period from June 27, 1997 (commencement of
operations) to September 30, 1997.
See notes to financial statements.
Financial Highlights
<TABLE>
<CAPTION>
Institutional
Money Market Institutional U.S. Government
Portfolio Money Market Portfolio
------------------- ----------------------------------
Period Six Months Period
Ended 3/31/98 (c) Ended 3/31/98 Ended
(Unaudited) (Unaudited) 9/30/97 (d)
<S> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00
------- ------- -------
Income from investment operations
Net investment income 0.02 0.03 0.01
------- ------- -------
Total from investment operations 0.02 0.03 0.01
------- ------- -------
Less distributions
From net investment income (0.02) (0.03) (0.01)
-------- -------- --------
Total distributions (0.02) (0.03) (0.01)
-------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00
======== ======== ========
Total Return* 1.33% 2.68% 1.39%
Ratios / Supplemental Data
Net assets, end of period (in thousands) $31,401 $ 94,747 $ 61,805
Ratio of expenses to average net assets 0.33%(e) 0.33%(e) 0.33%(e)
Ratio of net investment income to average net assets 5.37%(e) 5.25%(e) 5.26%(e)
</TABLE>
(c) For the period from November 19, 1997 (commencement of operations) to March
31, 1998.
(d) For the period from June 27, 1997 (commencement of operations) to
September 30, 1997.
(e) Annualized.
* Total return does not reflect sales commisssions and is not annualized.
See notes to financial statements.
6
<PAGE>
Mentor Funds
Notes to Financial Statements
March 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Note 1: Organization
Mentor Funds is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company. Mentor Funds consists of eleven
separate Portfolios (hereinafter each individually referred to as a "Portfolio"
or collectively as the "Portfolios") at March 31, 1998, as follows:
Mentor Growth Portfolio ("Growth Portfolio")
Mentor Capital Growth Portfolio
("Capital Growth Portfolio")
Mentor Strategy Portfolio ("Strategy Portfolio")
Mentor Income and Growth Portfolio
("Income and Growth Portfolio")
Mentor Perpetual Global Portfolio
("Global Portfolio")
Mentor Quality Income Portfolio
("Quality Income Portfolio")
Mentor Short-Duration Income Portfolio
("Short-Duration Income Portfolio")
Mentor Municipal Income Portfolio
("Municipal Income Portfolio")
Mentor Balanced Portfolio ("Balanced Portfolio")
Mentor Institutional U.S. Government Money Market Portfolio
("Government Portfolio")
Mentor Institutional Money Market Portfolio
("Money Market Portfolio")
The assets of each Portfolio are segregated and a shareholder's interest is
limited to the Portfolio in which shares are held.
These financial statements include only the Government Portfolio and Money
Market Portfolio.
Note 2: Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Portfolios in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles which
require management to make estimates and assumptions that affect amounts
reported therein. Although actual results could differ from these estimates, any
such differences are expected to be immaterial to the net assets of the
Portfolio.
a. Valuation of Securities
Securities held by the Portfolios are stated at amortized cost, which
approximates market value as permitted by Rule 2a-7 of the Investment Company
Act of 1940. In the event that a deviation of 1/2 of 1% or more exists between
the Portfolios' $1.00 per share net asset value calculated at amortized cost,
and the net asset value calculated by reference to market-based values, or if
there is any other deviation that the Board of Trustees believes would result in
a material dilution to shareholders or purchasers, the Board of Trustees will
promptly consider what action should be initiated. Net asset value per share is
determined each business day for the Portfolios and is calculated by dividing
net asset value by the number of shares outstanding at the end of each business
day.
b. Repurchase Agreements
It is the policy of the Trust 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 possession all securities held as
collateral in support of repurchase agreement investments. Additionally,
procedures have been established by the Trust 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.
The Trust will only enter into repurchase agreements with banks and other
recognized financial institutions
7
<PAGE>
Mentor Funds
Notes to Financial Statements
(continued)
- --------------------------------------------------------------------------------
such as broker/dealers which are deemed by the Trust's adviser to be
creditworthy pursuant to guidelines established by the Trustees. Risks may arise
from the potential inability of counterparties to honor the terms of the
repurchase agreement. Accordingly, the Trust could receive less than the
repurchase price on the sale of collateral securities.
c. Security Transactions and Interest Income
Security transactions for the Portfolios are accounted for on a trade date
basis. Interest income is recorded on the accrual basis and includes
amortization of premium and discount on investments.
d. Federal Taxes
No provision for federal income taxes has been made since it is the Portfolios'
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.
e. Deferred Expenses
Costs incurred by the Portfolios in connection with their initial share
registration and organization costs were deferred by the Portfolios and are
being amortized on a straight-line basis over a five-year period.
f. Distributions
Income distributions and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to deferral of wash sales.
Note 3: Dividends
Dividends will be declared daily and paid monthly by the Portfolios. Capital
gains realized by the Portfolios, if any, will be distributed annually.
Note 4: Investment Management and Administration Agreements
Mentor Investment Advisors, LLC ("Mentor Advisors"), the Portfolios' 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
Portfolios: 0.22% of the first $500 million of the Portfolio's average net
assets; 0.20% of the next $500 million; 0.175% of the next $1 billion; 0.16% of
the next $1 billion; and 0.15% of any amounts over $3 billion. For the period
ended March 31, 1998, Mentor Advisors earned advisory fees of $8,641 and $86,777
from Money Market Portfolio and Government Portfolio, respectively.
Mentor Advisors is a wholly-owned subsidiary of Mentor Investment Group, LLC
("Mentor") which is in turn a subsidiary of Wheat First Union ("Wheat"). EVEREN
Capital Corporation owns 20% of the outstanding interest in Mentor.
8
<PAGE>
Mentor Funds
Notes to Financial Statements
(continued)
- --------------------------------------------------------------------------------
Note 5: Capital Share Transactions
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest. Transactions in capital
shares were as follows:
<TABLE>
<CAPTION>
Mentor Institutional
Money Market
Portfolio
Period Ended
3/31/98 (a)
---------------------
<S> <C>
Shares sold 46,673,120
Shares issued upon reinvestment of distributions 486,387
Shares redeemed (15,758,972)
-----------
Change in net assets from capital share transactions 31,400,535
===========
</TABLE>
<TABLE>
<CAPTION>
Mentor Institutional U.S.
Government
Money Market Portfolio
Six Months Period Ended
Ended 3/31/98 9/30/97 (b)
--------------- ---------------
<S> <C>
Shares sold 64,441,720 70,658,240
Shares issued upon reinvestment of distributions 1,837,104 612,639
Shares redeemed (33,336,369) (9,466,232)
----------- ----------
Change in net assets from capital share transactions 32,942,455 61,804,647
=========== ==========
</TABLE>
(a) For the period from November 19, 1997 (commencement of operations) to March
31, 1998.
(b) For the period from June 27, 1997 (commencement of operations) to
September 30, 1997.
Year 2000
The Portfolios receive services from a number of providers which rely on the
smooth functioning of their respective systems and the systems of others to
perform those services. It is generally recognized that certain systems in use
today may not perform their intended functions adequately after the Year 1999
because of the inability of computer software to distinguish the Year 2000 from
the Year 1900. Mentor Advisors is taking steps that it believes are reasonably
designed to address this potential "Year 2000" problem and to obtain
satisfactory assurances that comparable steps are being taken by each of the
Portfolio's other major service providers. There can be no assurance, however,
that these steps will be sufficient to avoid any adverse impact on the
Portfolios from this problem.
Additional Information (Unaudited)
Shareholders of the Portfolio considered and acted upon the proposals listed
below at a special meeting of shareholders held Monday December 22, 1997. In
addition, below each proposals are the results of that vote.
9
<PAGE>
Mentor Funds
Notes to Financial Statements
(continued)
- --------------------------------------------------------------------------------
1. To elect the following Trustees:
<TABLE>
<CAPTION>
Mentor Institutional
U.S. Government Mentor Institutional
Money Market Portfolio Money Market Portfolio
-------------------------- -------------------------
Affirmative Withheld Affirmative Withheld
<S> <C>
Daniel J. Ludeman 48,414,623 -- 151 --
Troy A. Peery, Jr. 48,414,623 -- 151 --
Arnold H. Dreyfuss 48,414,623 -- 151 --
Thomas F. Keller 48,414,623 -- 151 --
Peter J. Quinn, Jr. 48,414,623 -- 151 --
Louis W. Moelchert, Jr. 48,414,623 -- 151 --
Arch T. Allen, III 48,414,623 -- 151 --
Weston E. Edwards 48,414,623 -- 151 --
Jerry R. Barrentine 48,414,623 -- 151 --
J. Garnett Nelson 48,414,623 -- 151 --
</TABLE>
2. To approve a new management contract between the Portfolio and Mentor
Investment Advisors, LLC to take effect upon the merger of Wheat First Butcher
Singer, Inc., with First Union Corporation:
Affirmative 48,276,828 151
Against -- --
Abstain 137,795 --
3. To approve a new management contract between the Portfolio and Mentor
Investment Advisors, LLC in contemplation of the potential acquisition of an
additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.:
Affirmative 48,276,828 151
Against -- --
Abstain 137,795 --
10
<PAGE>
Mentor Institutional U.S. Government Money Market Portfolio
Mentor Institutional Money Market Portfolio
Shareholder Information
- --------------------------------------------------------------------------------
Trustees
Daniel J. Ludeman, Trustee & Chairman
Chairman and Chief Executive Officer
Mentor Investment Group, LLC
Arch T. Allen III, Trustee
Attorney at Law
Allen & Moore, LLP
Jerry R. Barrentine, Trustee
President
J.R. Barrentine & Associates
Arnold H. Dreyfuss, Trustee
Former Chairman & Chief Executive
Officer Hamilton Beach/Proctor-Silex, Inc.
Weston E. Edwards, Trustee
President
Weston Edwards & Associates
Thomas F. Keller, Trustee
Former Dean, Fuqua School of Business
Duke University
Louis W. Moelchert, Jr., Trustee
Vice President for Business & Finance
University of Richmond
J. Garnett Nelson, Trustee
Consultant
Mid-Atlantic Holdings, LLC
Troy A. Peery, Jr., Trustee
President
Heilig-Meyers Company
Peter J. Quinn, Jr., Trustee
Managing Director
Mentor Investment Group, LLC
Officers
Paul F. Costello, President
Managing Director
Mentor Investment Group, LLC
Terry L. Perkins, Treasurer
Senior Vice President
Mentor Investment Group, LLC
Geoffrey B. Sale, Secretary
Associate Vice President
Mentor Investment Group, LLC
Michael A. Wade, Assistant Treasurer
Vice President
Mentor Investment Group, LLC
This report is authorized for distribution to prospective investors only when
preceded or accompanied by prospectuses for the
Mentor Institutional U.S. Government Money Market Portfolio and the Mentor
Institutional Money Market Portfolio, which contain
complete information about fees, sales charges and expenses. Please
read this information carefully before you invest or send money.
<PAGE>
[logo]
Riverfront Plaza
901 East Byrd Street
Richmond, Virginia 23219
(800) 382-0016
1998 Mentor Distributors, LLC
SECURITIES: NOT FDIC-INSURED/NOT BANK-GUARANTEED MAY LOSE VALUE
