LOGO
111 Corcoran
Bond Fund
Semi-Annual Report
November 30, 1996
Federated Securities Corp. is the distributor of the fund.
Cusip 682365200
2122402 (1/97)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present your Semi-Annual Report to Shareholders for 111 Corcoran
Bond Fund, which covers the six-month period ended November 30, 1996.
This report contains complete information about the fund's operation during the
reporting period, including an investment review by the fund's portfolio
manager, a listing of the fund's bond holdings, and the fund's financial
statements.
To help your investment earn income, the fund invests primarily in U.S.
government bonds and corporate bonds rated A or better by a nationally
recognized rating agency. At the end of the six-month reporting period, the
fund's portfolio was primarily composed of government obligations (83.6%),
followed by corporate bonds (15.7%), and short-term obligations consisting of a
U.S. Treasury note (1.1%) and a money market fund investment (1.3%).
During the six-month period ended November 30, 1996, the fund produced a total
return based on net asset value of 7.18% through income totaling $0.33 per
share, and a 4% increase in net asset value. The fund's net assets stood at $90
million at the end of the period.*
Thank you for selecting 111 Corcoran Bond Fund as a high quality income
investment. We will continue to keep you informed about your fund's progress.
Sincerely,
LOGO
Edward C. Gonzales
President
January 15, 1997
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Total return for the
period reflecting the fund's sales charge was 2.36%.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
After a flat first fiscal quarter, the bond market staged a good rally into
November 1996. This was a welcome change from the weak market early in the year.
111 Corcoran Bond Fund produced a satisfying total return based on net asset
value of 7.18% for the six-month reporting period ended November 30, 1996.
The yield curve flattened during the reporting period and, as a result, we feel
that intermediate maturity bonds currently represent the best risk-reward and
that governments and CMO's are still the best value versus corporates.
Although there are some negatives going into 1997, we are relatively optimistic.
We believe inflation should remain under control and the political balance of
power should move in a conservative direction. We plan to emphasize quality in
the portfolio. We simply do not think there is enough extra yield in lower
quality issues to assume the extra risk at this time.
111 CORCORAN BOND FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
CORPORATE BONDS--15.7%
- ------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES--0.5%
------------------------------------------------------------------
$ 500,000 Discover Card Trust , 6.25%, Series 19963 B, 8/18/2008 $ 481,565
------------------------------------------------------------------ -----------
AUTO/TRUCK MANUFACTURER--1.2%
------------------------------------------------------------------
1,000,000 Ford Motor Co., 9.00%, 9/15/2001 1,109,300
------------------------------------------------------------------ -----------
CONSUMER PRODUCTS--3.2%
------------------------------------------------------------------
1,000,000 Philip Morris Cos., Inc., 7.125%, 8/15/2002 1,022,820
------------------------------------------------------------------
1,000,000 Philip Morris Cos., Inc., 9.00%, 1/1/2001 1,090,310
------------------------------------------------------------------
750,000 RJR Nabisco, Inc., 8.00%, 1/15/2000 787,057
------------------------------------------------------------------ -----------
Total 2,900,187
------------------------------------------------------------------ -----------
FINANCE--INSURANCE--1.7%
------------------------------------------------------------------
500,000 Cigna Corp., 7.40%, 1/15/2003 522,165
------------------------------------------------------------------
1,000,000 Continental Corp., 7.25%, 3/1/2003 1,034,690
------------------------------------------------------------------ -----------
Total 1,556,855
------------------------------------------------------------------ -----------
FINANCIAL SECURITIES--1.1%
------------------------------------------------------------------
1,000,000 Salomon, Inc., 6.875%, 12/15/2003 1,000,820
------------------------------------------------------------------ -----------
METALS--0.6%
------------------------------------------------------------------
500,000 Reynolds Metals Co., 9.00%, 8/15/2003 564,255
------------------------------------------------------------------ -----------
MULTI-INDUSTRY--1.0%
------------------------------------------------------------------
750,000 Loews Corp., 8.875%, 4/15/2011 880,995
------------------------------------------------------------------ -----------
RETAIL TRADE--1.2%
------------------------------------------------------------------
1,000,000 Penney (J.C.) Co., Inc., 7.375%, 8/15/2008 1,054,660
------------------------------------------------------------------ -----------
</TABLE>
111 CORCORAN BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
CORPORATE BONDS--CONTINUED
- ------------------------------------------------------------------------------------
UTILITIES--5.2%
------------------------------------------------------------------
$1,000,000 Gulf States Utilities Co., 6.77%, 8/1/2005 $ 989,170
------------------------------------------------------------------
1,000,000 Pacific Gas & Electric Co., MTN, 7.75%, 6/30/2004 1,067,200
------------------------------------------------------------------
1,500,000 Southwestern Bell Telephone Co., 7.375%, 5/1/2012 1,502,610
------------------------------------------------------------------
1,000,000 West Penn Power Co., 7.875%, 12/1/2004 1,065,710
------------------------------------------------------------------ -----------
Total 4,624,690
------------------------------------------------------------------ -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST $13,380,965) 14,173,327
------------------------------------------------------------------ -----------
GOVERNMENT OBLIGATIONS--83.6%
- ------------------------------------------------------------------------------------
FARM CREDIT SYSTEM FINANCIAL ASSISTANCE CORP.--0.6%
------------------------------------------------------------------
500,000 9.20%, 9/27/2005 548,935
------------------------------------------------------------------ -----------
FEDERAL HOME LOAN BANK--13.0%
------------------------------------------------------------------
1,250,000 (a) 4.914% Structured Note, 12/2/1996 1,213,999
------------------------------------------------------------------
500,000 (a) 4.449% Structured Note, 12/3/1996 494,210
------------------------------------------------------------------
1,000,000 (a) 5.675% Structured Note, 12/23/1996 978,990
------------------------------------------------------------------
500,000 (a) 5.05% Structured Note, 12/29/1996 488,205
------------------------------------------------------------------
1,000,000 (a) 3.81% Structured Note, 2/25/1997 968,946
------------------------------------------------------------------
750,000 (a) 4.081% Structured Note, 6/2/1997 728,616
------------------------------------------------------------------
1,000,000 (a) 6.25% Step-Up, 5/11/1998 1,008,540
------------------------------------------------------------------
1,550,000 (a) 5.20% Step-Up, 10/20/1998 1,524,673
------------------------------------------------------------------
1,000,000 6.30%, 11/28/2000 1,000,000
------------------------------------------------------------------
1,000,000 6.48%, 3/27/2001 1,008,298
------------------------------------------------------------------
1,250,000 6.75%, 10/29/2001 1,263,619
------------------------------------------------------------------
1,000,000 6.33%, 11/20/2001 1,002,280
------------------------------------------------------------------ -----------
Total 11,680,376
------------------------------------------------------------------ -----------
FEDERAL HOME LOAN MORTGAGE CORPORATION--33.5%
------------------------------------------------------------------
2,500,000 (a) 5.00% Structured Note, 3/10/1997 2,434,650
------------------------------------------------------------------
1,000,000 (a) 4.75% Structured Note, Step-Up, 9/20/1997 991,240
------------------------------------------------------------------
1,000,000 5.90%, 4/21/2000 996,310
------------------------------------------------------------------
</TABLE>
111 CORCORAN BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
GOVERNMENT OBLIGATIONS--CONTINUED
- ------------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION--CONTINUED
------------------------------------------------------------------
$1,000,000 5.69%, 11/29/2000 $ 985,830
------------------------------------------------------------------
500,000 6.80%, 9/18/2002 500,750
------------------------------------------------------------------
1,000,000 8.19%, 10/6/2004 1,049,810
------------------------------------------------------------------
128,808 5.00%, Series 1194F, 11/15/2005 127,744
------------------------------------------------------------------
1,500,000 7.50%, Series 1143VD, 1/15/2006 1,557,720
------------------------------------------------------------------
1,000,000 8.00%, Series 1033G, 1/15/2006 1,034,190
------------------------------------------------------------------
1,000,000 6.00%, Series 1366G, 5/15/2006 987,130
------------------------------------------------------------------
2,500,000 6.25%, Series 1506G, 10/15/2006 2,461,525
------------------------------------------------------------------
4,000,000 8.00%, Series 1171G, 11/15/2006 4,239,000
------------------------------------------------------------------
1,490,000 6.00%, Series 1337C, 12/15/2006 1,465,102
------------------------------------------------------------------
1,000,000 7.00%, Series 1187H, 12/15/2006 1,020,450
------------------------------------------------------------------
84,445 6.50%, Series 1422E, 2/15/2007 82,014
------------------------------------------------------------------
1,000,000 7.00%, Series 1338J, 2/15/2007 1,018,070
------------------------------------------------------------------
1,500,000 6.25%, Series 1553E, 4/15/2007 1,497,945
------------------------------------------------------------------
1,000,000 7.00%, Series 1458J, 8/15/2007 1,026,590
------------------------------------------------------------------
1,000,000 7.00%, Series 1341K, 8/15/2007 1,010,520
------------------------------------------------------------------
1,000,000 6.50%, Series 1551E, 9/15/2007 1,009,600
------------------------------------------------------------------
176,459 6.50%, Series 1452C, 12/15/2007 169,593
------------------------------------------------------------------
400,000 7.00%, Series 1324VE, 8/15/2008 403,448
------------------------------------------------------------------
1,000,000 7.00%, Series 1465GA, 2/15/2008 1,004,640
------------------------------------------------------------------
1,000,000 7.00%, Series 1477ID, 11/15/2009 1,007,300
------------------------------------------------------------------
595,000 7.00%, Series 1468M, 1/15/2010 598,576
------------------------------------------------------------------
</TABLE>
111 CORCORAN BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
GOVERNMENT OBLIGATIONS--CONTINUED
- ------------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION--CONTINUED
------------------------------------------------------------------
$1,000,000 6.85%, Series 1808VB, 10/15/2010 $ 985,000
------------------------------------------------------------------
500,000 7.00%, Series 1228H, 2/15/2022 487,820
------------------------------------------------------------------ -----------
Total 30,152,567
------------------------------------------------------------------ -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--15.2%
------------------------------------------------------------------
1,700,000 (a) 6.78125%, Structured Note, Inverse Floater, 12/2/1996 1,700,034
------------------------------------------------------------------
2,000,000 7.30%, 10/28/2002 2,020,620
------------------------------------------------------------------
2,000,000 6.675%, 4/10/2003 2,003,060
------------------------------------------------------------------
1,000,000 7.00%, 9/3/2003 1,020,730
------------------------------------------------------------------
1,000,000 6.48%, 2/18/2004 987,900
------------------------------------------------------------------
2,000,000 8.25%, 10/12/2004 2,103,540
------------------------------------------------------------------
2,775,000 8.50%, 2/1/2005 2,951,018
------------------------------------------------------------------
1,000,000 Principal STRIP, 4/12/2006 (Callable 4/12/1999 @ 100) 864,980
------------------------------------------------------------------ -----------
Total 13,651,882
------------------------------------------------------------------ -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--REMIC--17.8%
------------------------------------------------------------------
1,000,000 7.00%, REMIC, Series 199479G, 11/25/2004 1,022,800
------------------------------------------------------------------
1,450,000 7.50%, REMIC, Series 199248G, 11/25/2005 1,482,857
------------------------------------------------------------------
1,000,000 7.00%, REMIC, Series 199270H, 4/25/2006 1,015,580
------------------------------------------------------------------
1,000,000 7.50%, REMIC, Series 199336J, 5/25/2006 1,021,580
------------------------------------------------------------------
2,000,000 7.00%, REMIC, Series 1993139KD, 7/25/2006 2,043,448
------------------------------------------------------------------
1,000,000 8.00%, REMIC, Series 1991150G, 11/25/2006 1,051,710
------------------------------------------------------------------
1,000,000 7.25%, REMIC, Series 199250J, 12/25/2006 1,024,510
------------------------------------------------------------------
1,000,000 7.00%, REMIC, Series 199253G, 4/25/2007 1,016,130
------------------------------------------------------------------
1,000,000 6.00%, REMIC, Series 1993209H, 3/25/2008 968,960
------------------------------------------------------------------
996,078 6.00%, REMIC, Series 199376B, 6/25/2008 923,952
------------------------------------------------------------------
2,500,000 6.50%, REMIC, Series 199427CB, 9/25/2008 2,487,550
------------------------------------------------------------------
</TABLE>
111 CORCORAN BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT CREDIT
OR SHARES RATING*
- ---------- ------------------------------------------------------------------ -----------
<C> <C> <S> <C>
GOVERNMENT OBLIGATIONS--CONTINUED
- -----------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--REMIC--CONTINUED
-----------------------------------------------------------------
$1,000,000 6.75%, REMIC, Series 199333H, 9/25/2008 $ 1,013,720
-----------------------------------------------------------------
1,000,000 7.00%, REMIC, Series 1992124D, 4/25/2010 999,590
----------------------------------------------------------------- -----------
Total 16,072,387
----------------------------------------------------------------- -----------
STUDENT LOAN MARKETING ASSOCIATION--2.2%
-----------------------------------------------------------------
2,000,000 6.38%, 12/11/2001 2,002,200
----------------------------------------------------------------- -----------
MORTGAGE BACKED SECURITIES--1.3%
-----------------------------------------------------------------
1,250,000 CMC CMO, 5.98%, Series 1994CA14, 12/25/1996 1,197,825
----------------------------------------------------------------- -----------
TOTAL GOVERNMENT OBLIGATIONS (IDENTIFIED COST $74,530,466) 75,306,172
----------------------------------------------------------------- -----------
U.S. TREASURY--1.1%
- -----------------------------------------------------------------------------------
1,000,000 United States Treasury Note, 5.75%, 8/15/2003
(IDENTIFIED COST $957,344) 989,680
----------------------------------------------------------------- -----------
MUTUAL FUND--1.3%
- -----------------------------------------------------------------------------------
1,187,947 Goldman Sachs Money Market Fund (AT NET ASSET VALUE) 1,187,947
----------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $90,056,722)(B) $91,657,126
----------------------------------------------------------------- -----------
</TABLE>
(a) Current rate and next reset date are shown.
(b) The cost of investments for federal tax purposes amounts to $90,056,722. The
net unrealized appreciation of investments on a federal tax basis amounts to
$1,600,404 which is comprised of $2,201,881 appreciation and $601,477
depreciation at November 30, 1996.
Note: The categories of investments are shown as a percentage of net assets
($90,083,269) at November 30, 1996.
The following abbreviations are used in this portfolio:
<TABLE>
<S> <C>
CMO -- Collateralized Mortgage Obligation
MTN -- Medium Term Note
REMIC -- Real Estate Mortgage Investment Conduit
STRIP -- Separate Trading of Registered Interest and Principal Securities
</TABLE>
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $90,056,722) $91,657,126
- ---------------------------------------------------------------------------------
Cash 34,032
- ---------------------------------------------------------------------------------
Income receivable 939,430
- ---------------------------------------------------------------------------------
Deferred expenses 2,492
- --------------------------------------------------------------------------------- -----------
Total assets 92,633,080
- ---------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------
Payable for investments purchased $2,000,000
- --------------------------------------------------------------------
Income distribution payable 541,848
- --------------------------------------------------------------------
Accrued expenses 7,963
- -------------------------------------------------------------------- ----------
Total liabilities 2,549,811
- --------------------------------------------------------------------------------- -----------
Net Assets for 8,883,144 shares outstanding $90,083,269
- --------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------
Paid in capital $92,455,577
- ---------------------------------------------------------------------------------
Net unrealized appreciation of investments 1,600,404
- ---------------------------------------------------------------------------------
Accumulated net realized loss on investments (3,972,712)
- --------------------------------------------------------------------------------- -----------
Total Net Assets $90,083,269
- --------------------------------------------------------------------------------- -----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- ---------------------------------------------------------------------------------
Net Asset Value and Redemption Proceeds Per Share ($90,083,269 / 8,883,144 shares
outstanding) $10.14
- --------------------------------------------------------------------------------- -----------
Offering Price Per Share (100/95.50 of $10.14)* $10.62
- --------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN BOND FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------
Interest $3,070,199
- ---------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------
Investment advisory fee $ 334,099
- ---------------------------------------------------------------------
Administrative personnel and services fee 66,404
- ---------------------------------------------------------------------
Custodian fees 11,200
- ---------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 16,139
- ---------------------------------------------------------------------
Directors'/Trustees' fees 3,359
- ---------------------------------------------------------------------
Auditing fees 7,946
- ---------------------------------------------------------------------
Legal fees 2,285
- ---------------------------------------------------------------------
Portfolio accounting fees 29,832
- ---------------------------------------------------------------------
Share registration costs 10,399
- ---------------------------------------------------------------------
Printing and postage 4,728
- ---------------------------------------------------------------------
Insurance premiums 4,277
- ---------------------------------------------------------------------
Miscellaneous 7,733
- --------------------------------------------------------------------- ---------
Total expenses 498,401
- ---------------------------------------------------------------------
Waiver of investment advisory fee (334,099)
- --------------------------------------------------------------------- ---------
Net expenses 164,302
- --------------------------------------------------------------------------------- ----------
Net investment income 2,905,897
- --------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------
Net realized gain on investments 190,827
- ---------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 3,068,751
- --------------------------------------------------------------------------------- ----------
Net realized and unrealized gain on investments 3,259,578
- --------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $6,165,475
- --------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
NOVEMBER 30, YEAR ENDED
1996 MAY 31,
(UNAUDITED) 1996
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------------
Net investment income $2,905,897 $ 5,892,547
- --------------------------------------------------------------
Net realized gain (loss) on investments ($190,827 net gain and
$1,187,066 net loss, respectively, as computed for federal tax
purposes) 190,827 107,010
- --------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 3,068,751 (2,089,765)
- -------------------------------------------------------------- ----------- -----------
Change in net assets resulting from operations 6,165,475 3,909,792
- -------------------------------------------------------------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------------------
Distributions from net investment income (2,905,897) (5,902,091)
- -------------------------------------------------------------- ----------- -----------
SHARE TRANSACTIONS--
- --------------------------------------------------------------
Proceeds from sale of shares 6,006,647 14,489,005
- --------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 98,097 245,617
- --------------------------------------------------------------
Cost of shares redeemed (7,164,454) (11,973,664)
- -------------------------------------------------------------- ----------- -----------
Change in net assets resulting from share transactions (1,059,710) 2,760,958
- -------------------------------------------------------------- ----------- -----------
Change in net assets 2,199,868 768,659
- --------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------
Beginning of period 87,883,401 87,114,742
- -------------------------------------------------------------- ----------- -----------
End of period $90,083,269 $87,883,401
- -------------------------------------------------------------- ----------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN BOND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED MAY 31,
NOVEMBER 30, -------------------------------------------
1996 1996 1995 1994 1993(A)
------------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.78 $10.00 $ 9.63 $10.13 $10.00
- --------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------
Net investment income 0.33 0.66 0.66 0.63 0.49
- --------------------------------------
Net realized and unrealized gain
(loss) on investments 0.36 (0.22) 0.37 (0.50) 0.13
- -------------------------------------- ------ ------ ------ ------ ------
Total from investment operations 0.69 0.44 1.03 0.13 0.62
- -------------------------------------- ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
- --------------------------------------
Distributions from net investment
income (0.33) (0.66) (0.66) (0.63) (0.49)
- -------------------------------------- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.14 $ 9.78 $10.00 $ 9.63 $10.13
- -------------------------------------- ------ ------ ------ ------ ------
TOTAL RETURN(B) 7.18% 4.41% 11.32% 1.21% 6.28%
- --------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------
Expenses 0.37%* 0.32% 0.34% 0.50% 0.70%*
- --------------------------------------
Net investment income 6.52%* 6.65% 6.98% 6.32% 6.00%*
- --------------------------------------
Expense waiver/reimbursement(c) 0.75%* 0.75% 0.75% 0.75% 0.78%*
- --------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------
Net assets, end of period (000
omitted) $90,083 $87,883 $87,115 $97,823 $31,928
- --------------------------------------
Portfolio turnover 7% 32% 37% 76% 59%
- --------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 15, 1992 (date of initial
public investment) to May 31, 1993.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN BOND FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
The 111 Corcoran Funds (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act") as an open-end, management investment
company. The Trust consists of three portfolios. The financial statements
included herein are only those of 111 Corcoran Bond Fund (the "Fund"), a
diversified portfolio. The investment objective of the Fund is to achieve
income. The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--U.S. government securities, listed corporate bonds,
other fixed income and asset-backed securities, and unlisted securities and
private placement securities are generally valued at the mean of the latest
bid and asked price as furnished by an independent pricing service.
Short-term securities are valued at the prices provided by an independent
pricing service. However, short-term securities with remaining maturities
of sixty days or less at the time of purchase may be valued at amortized
cost, which approximates fair market value. Investments in other open-end
regulated investment companies are valued at net asset value.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal taxes are necessary. At May 31, 1996 the Fund, for
federal tax purposes, had a capital loss carryforward of $4,085,059, which
will reduce the Fund's taxable income arising from future net realized gain
on investments, if any, to the extent permitted by the Code, and thus will
reduce the amount of the distributions to shareholders which would
otherwise be necessary to relieve the fund of any liability for federal
tax. Pursuant to the Code, such capital loss carryforward will expire in
2002 $48,353, 2003 $2,849,640 and 2004 $1,187,066. Additionally, net
capital losses of $78,365 attributable to security transactions incurred
after October 31, 1995, are treated as arising on June 1, 1996, the first
day of the Fund's next taxable year.
111 CORCORAN BOND FUND
- --------------------------------------------------------------------------------
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from the Fund's
commencement date.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1996 MAY 31, 1996
- ------------------------------------------------------ ------------------ --------------
<S> <C> <C>
Shares sold 9,925 1,440,835
- ------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 606,383 24,434
- ------------------------------------------------------
Shares redeemed (721,778) (1,187,303)
- ------------------------------------------------------ -------- ----------
Net change resulting from share transactions (105,470) 277,966
- ------------------------------------------------------ -------- ----------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Central Carolina Bank and Trust Company, the Fund's
investment adviser, (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.75% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
111 CORCORAN BOND FUND
- --------------------------------------------------------------------------------
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Trust for the period.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ"), through its subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the Fund. The fee
paid to FSSC is based on the size, type, and number of accounts and transactions
made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $46,033 were borne initially
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following May 1, 1992 (the date the Fund became
effective). For the period ended November 30, 1996, the Fund paid $7,787
pursuant to this agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended November 30, 1996, were as follows:
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
Purchases $7,398,931
- -------------------------------------------------------------------------------- ----------
Sales $6,317,962
- -------------------------------------------------------------------------------- ----------
</TABLE>
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Edward C. Gonzales
William J. Copeland President and Treasurer
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Executive Vice President
Edward L. Flaherty, Jr. John W. McGonigle
Edward C. Gonzales Executive Vice President and Secretary
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
John E. Murray, Jr. Joseph S. Machi
Wesley W. Posvar Vice President and Assistant Treasurer
Marjorie P. Smuts C. Grant Anderson
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
LOGO
111 Corcoran
Equity Fund
Semi-Annual Report
November 30, 1996
Federated Securities Corp. is the distributor of the fund.
Cusip 682365309
G00926-01 (1/97)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present your Semi-Annual Report to Shareholders for 111 Corcoran
Equity Fund, which covers the six-month period ended November 30, 1996.
This report contains complete information that includes an investment review by
the fund's portfolio manager, a listing of the fund's stock holdings, and the
fund's financial statements.
To help your money grow in value over the long term, the fund invests in a
diversified portfolio of high-quality stocks. As you can see from the list of
holdings, many of these stocks are issued by industry leaders whose products and
services you may use every day.
During the six-month reporting period, the economic environment continued to
offer extremely favorable opportunities for stocks. As a result, on November 30,
1996, the fund delivered a strong total return based on net asset value of
13.26% through income totaling $0.07 per share, and a 13% increase in net asset
value. The fund's net assets soared over the six-month reporting period, rising
from $29 million to $152.8 million.*
Thank you for selecting 111 Corcoran Equity Fund to help your investment grow
over time. We hope you are pleased with your investment progress.
Sincerely,
LOGO
Edward C. Gonzales
President
January 15, 1997
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Total return for the
period reflecting the fund's sales charge was 8.17%.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
The U.S. equity market turned in a strong performance for the period ended
November 30, 1996. Stock prices resumed their advance in late July 1996, when
investors recognized that corporate profit increases were continuing despite a
slowing in economic growth.
111 Corcoran Equity Fund delivered a total return of 13.26% based on net asset
value for the six-month period ended November 30, 1996, as compared to 11.89%
for the average growth and income fund as reported by Lipper Analytical
Services, Inc.* The fund benefited from an overweighting in the financial
services and technology sectors.
As of November 30, 1996, the portfolio was 99.4% invested in stocks and had a
minimal cash position of 0.6%. Total fund assets were approximately $152.8
million. The fund's ten largest holdings were:
<TABLE>
<S> <C>
Federal National Mortgage Association 5.3%
EMC Corp. 5.1
Intel Corp. 3.3
Jefferson-Pilot Corp. 3.3
General Electric Co. 3.2
Everest Reinsurance Holdings, Inc. 3.2
United Technologies Corp. 2.9
Equitable Cos., Inc. 2.8
Mobil Corp. 2.8
Merck & Co., Inc. 2.8
</TABLE>
With continued modest economic growth, low inflation, and stable interest rates,
the outlook for stocks remains positive. Although U.S. shares may no longer be
undervalued following two exceptionally good years, we believe equities can
continue to generate returns comparable to the growth in corporate earnings and
cash flow.
* Lipper figures represent the average of the total returns reported by all of
the mutual funds designated by Lipper Analytical Services, Inc. as falling
into the respective categories indicated. These figures do not reflect sales
charges.
111 CORCORAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--99.1%
- ----------------------------------------------------------------------------------
AEROSPACE--3.3%
------------------------------------------------------------------
8,000 Allied-Signal, Inc. $ 586,000
------------------------------------------------------------------
31,000 United Technologies Corp. 4,347,750
------------------------------------------------------------------ ------------
Total 4,933,750
------------------------------------------------------------------ ------------
AUTOMOBILE--2.1%
------------------------------------------------------------------
56,600 General Motors Corp. 3,261,575
------------------------------------------------------------------ ------------
CHEMICALS--4.3%
------------------------------------------------------------------
6,300 Du Pont E.I. de Nemours & Co. 593,775
------------------------------------------------------------------
30,900 Eastman Kodak Co. 2,502,900
------------------------------------------------------------------
71,600 Praxair, Inc. 3,481,550
------------------------------------------------------------------ ------------
Total 6,578,225
------------------------------------------------------------------ ------------
COMPUTER SERVICES--2.9%
------------------------------------------------------------------
40,000 Electronic Arts, Inc. 1,285,000
------------------------------------------------------------------
65,000 Electronic Data Systems Corp. 3,144,375
------------------------------------------------------------------ ------------
Total 4,429,375
------------------------------------------------------------------ ------------
CONSUMER GOODS--5.1%
------------------------------------------------------------------
30,000 Emerson Electric Co. 2,943,750
------------------------------------------------------------------
47,200 General Electric Co. 4,908,800
------------------------------------------------------------------ ------------
Total 7,852,550
------------------------------------------------------------------ ------------
ELECTRONICS--13.4%
------------------------------------------------------------------
25,000 Compaq Computer Corp. 1,981,250
------------------------------------------------------------------
200,000 Data General Corp. 2,925,000
------------------------------------------------------------------
6,500 Duracell International, Inc. 433,062
------------------------------------------------------------------
240,000 EMC Corp. Mass 7,740,000
------------------------------------------------------------------
40,000 Intel Corp. 5,075,000
------------------------------------------------------------------
60,000 Seagate Technology, Inc. 2,370,000
------------------------------------------------------------------ ------------
Total 20,524,312
------------------------------------------------------------------ ------------
</TABLE>
111 CORCORAN EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
ENTERTAINMENT--2.2%
------------------------------------------------------------------
85,000 Carnival Corp., Class A $ 2,688,125
------------------------------------------------------------------
9,000 Disney Walt Co. 663,750
------------------------------------------------------------------ ------------
Total 3,351,875
------------------------------------------------------------------ ------------
FINANCE--9.5%
------------------------------------------------------------------
48,700 American Express Co. 2,544,575
------------------------------------------------------------------
16,000 American International Group, Inc. 1,840,000
------------------------------------------------------------------
172,900 Everest Reinsurance Holdings, Inc. 4,862,813
------------------------------------------------------------------
30,000 Household International, Inc. 2,842,500
------------------------------------------------------------------
20,000 MGIC Investment Corp. 1,497,500
------------------------------------------------------------------
30,000 Vesta Insurance Group, Inc. 967,500
------------------------------------------------------------------ ------------
Total 14,554,888
------------------------------------------------------------------ ------------
FOOD & BEVERAGE--1.5%
------------------------------------------------------------------
28,600 Coca-Cola Co. 1,462,175
------------------------------------------------------------------
30,000 PepsiCo, Inc. 896,250
------------------------------------------------------------------ ------------
Total 2,358,425
------------------------------------------------------------------ ------------
HEALTH CARE--8.8%
------------------------------------------------------------------
30,000 Abbott Laboratories 1,672,500
------------------------------------------------------------------
40,000 American Home Products Corp. 2,570,000
------------------------------------------------------------------
52,000 Johnson & Johnson 2,762,500
------------------------------------------------------------------
51,000 Merck & Co., Inc. 4,233,000
------------------------------------------------------------------
100,000 Tenet Healthcare Corp. 2,237,500
------------------------------------------------------------------ ------------
Total 13,475,500
------------------------------------------------------------------ ------------
HOUSEHOLD PRODUCTS--1.6%
------------------------------------------------------------------
23,000 Procter & Gamble Co. 2,501,250
------------------------------------------------------------------ ------------
INSURANCE--6.1%
------------------------------------------------------------------
172,000 Equitable Cos., Inc. 4,257,000
------------------------------------------------------------------
86,250 Jefferson-Pilot Corp. 5,024,063
------------------------------------------------------------------ ------------
Total 9,281,063
------------------------------------------------------------------ ------------
</TABLE>
111 CORCORAN EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
METALS--2.0%
------------------------------------------------------------------
48,000 Aluminum Co. of America $ 3,054,000
------------------------------------------------------------------ ------------
MORTGAGE--6.8%
------------------------------------------------------------------
20,000 Federal Home Loan Mortgage Corp. 2,285,000
------------------------------------------------------------------
197,000 Federal National Mortgage Association 8,126,250
------------------------------------------------------------------ ------------
Total 10,411,250
------------------------------------------------------------------ ------------
OFFICE EQUIPMENT--1.3%
------------------------------------------------------------------
12,000 International Business Machines Corp. 1,912,500
------------------------------------------------------------------ ------------
OIL--8.8%
------------------------------------------------------------------
25,000 British Petroleum Co. PLC, ADR 3,468,750
------------------------------------------------------------------
23,000 Chevron Corp. 1,541,000
------------------------------------------------------------------
17,000 Exxon Corp. 1,608,625
------------------------------------------------------------------
40,200 Halliburton Co. 2,422,050
------------------------------------------------------------------
35,000 Mobil Corp. 4,235,000
------------------------------------------------------------------ ------------
Total 13,275,425
------------------------------------------------------------------ ------------
PERSONAL CARE PRODUCTS--0.6%
------------------------------------------------------------------
13,000 Gillette Co. 958,750
------------------------------------------------------------------ ------------
PHARMACEUTICALS--1.9%
------------------------------------------------------------------
75,000 Watson Pharmaceuticals, Inc. 2,925,000
------------------------------------------------------------------ ------------
PROCESS INDUSTRIES--1.0%
------------------------------------------------------------------
35,500 International Paper Co. 1,508,750
------------------------------------------------------------------ ------------
PRODUCER MANUFACTURING--1.4%
------------------------------------------------------------------
25,000 Minnesota Mining & Manufacturing Co. 2,093,750
------------------------------------------------------------------ ------------
RESTAURANTS--1.8%
------------------------------------------------------------------
59,000 McDonald's Corp. 2,758,250
------------------------------------------------------------------ ------------
RETAIL--7.4%
------------------------------------------------------------------
100,000 Federated Department Stores, Inc. 3,412,500
------------------------------------------------------------------
300,000 K Mart Corp. 3,337,500
------------------------------------------------------------------
</TABLE>
111 CORCORAN EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- -------- ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
RETAIL--CONTINUED
------------------------------------------------------------------
40,000 Sears, Roebuck & Co. $ 1,990,000
------------------------------------------------------------------
100,000 Wal-Mart Stores, Inc. 2,550,000
------------------------------------------------------------------ ------------
Total 11,290,000
------------------------------------------------------------------ ------------
TELECOMMUNICATIONS--1.4%
------------------------------------------------------------------
53,100 AT&T Corp. 2,084,175
------------------------------------------------------------------ ------------
TRANSPORTATION--1.0%
------------------------------------------------------------------
15,000 Canadian Pacific, Ltd. 412,500
------------------------------------------------------------------
25,000 North Carolina Railroad Co. 1,003,125
------------------------------------------------------------------ ------------
Total 1,415,625
------------------------------------------------------------------ ------------
UTILITIES--2.9%
------------------------------------------------------------------
24,000 Houston Industries, Inc. 528,000
------------------------------------------------------------------
20,000 Public Service Co. North Carolina, Inc. 380,000
------------------------------------------------------------------
165,000 Union Texas Petroleum Holdings, Inc. 3,671,250
------------------------------------------------------------------ ------------
Total 4,579,250
------------------------------------------------------------------ ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $135,706,804) 151,369,513
------------------------------------------------------------------ ------------
MUTUAL FUND SHARES--0.6%
- ----------------------------------------------------------------------------------
934,780 Goldman Sachs Money Market Fund (AT NET ASSET VALUE) 934,780
------------------------------------------------------------------ ------------
TOTAL INVESTMENTS (IDENTIFIED COST $136,641,584)(A) $152,304,293
------------------------------------------------------------------ ------------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to $136,641,584.
The net unrealized appreciation of investments on a federal tax basis
amounts to $15,662,709 which is comprised of $16,360,099 appreciation and
$697,390 depreciation at November 30, 1996.
Note: The categories of investments are shown as a percentage of net assets
($152,759,692) at November 30, 1996.
The following acronyms are used throughout this portfolio:
ADR--American Depository Receipt
PLC--Public Limited Company
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $136,641,584) $152,304,293
- --------------------------------------------------------------------------------
Income receivable 341,475
- --------------------------------------------------------------------------------
Receivable for investments sold 2,590,781
- --------------------------------------------------------------------------------
Deferred expenses 4,818
- -------------------------------------------------------------------------------- ------------
Total assets 155,241,367
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable for investments purchased $1,787,773
- -------------------------------------------------------------------
Payable to Bank 23,041
- -------------------------------------------------------------------
Options written, at value (Premium received $445,415) 523,072
- -------------------------------------------------------------------
Accrued expenses 147,789
- ------------------------------------------------------------------- ----------
Total liabilities 2,481,675
- -------------------------------------------------------------------------------- ------------
Net Assets for 9,822,462 shares outstanding $152,759,692
- -------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid in capital $134,484,763
- --------------------------------------------------------------------------------
Net unrealized appreciation of investments and options 15,585,052
- --------------------------------------------------------------------------------
Accumulated net realized gain on investments and options 2,467,465
- --------------------------------------------------------------------------------
Undistributed net investment income 222,412
- -------------------------------------------------------------------------------- ------------
Total Net Assets $152,759,692
- -------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- --------------------------------------------------------------------------------
Net Asset Value and Redemption Proceeds Per Share
($152,759,692 / 9,822,462 shares outstanding) $15.55
- -------------------------------------------------------------------------------- ------------
Offering Price Per Share (100/95.50 of $15.55)* $16.28
- -------------------------------------------------------------------------------- ------------
</TABLE>
* See "What Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN EQUITY FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------
Dividends $ 622,296
- ---------------------------------------------------------------------------------------
Interest 30,295
- --------------------------------------------------------------------------------------- -----------
Total income 652,591
- ---------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Investment advisory fee $248,489
- ---------------------------------------------------------------------------
Administrative personnel and services fee 45,834
- ---------------------------------------------------------------------------
Custodian fees 11,774
- ---------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 14,932
- ---------------------------------------------------------------------------
Directors'/Trustees' fees 1,462
- ---------------------------------------------------------------------------
Auditing fees 5,738
- ---------------------------------------------------------------------------
Legal fees 1,261
- ---------------------------------------------------------------------------
Portfolio accounting fees 25,020
- ---------------------------------------------------------------------------
Share registration costs 13,375
- ---------------------------------------------------------------------------
Printing and postage 4,758
- ---------------------------------------------------------------------------
Insurance premiums 1,756
- ---------------------------------------------------------------------------
Miscellaneous 2,989
- --------------------------------------------------------------------------- --------
Total expenses 377,388
- ---------------------------------------------------------------------------
Waivers--
- ---------------------------------------------------------------------------
Waiver of investment advisory fee $(49,089)
- ----------------------------------------------------------------
Waiver of administrative personnel and services fee (1,876)
- ---------------------------------------------------------------- --------
Total waivers and reimbursements (50,965)
- --------------------------------------------------------------------------- --------
Net expenses 326,423
- --------------------------------------------------------------------------------------- -----------
Net investment income 326,168
- --------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND OPTIONS:
- ---------------------------------------------------------------------------------------
Net realized gain on investments and options 933,543
- ---------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments and options 10,911,599
- --------------------------------------------------------------------------------------- -----------
Net realized and unrealized gain on investments and options 11,845,142
- --------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $12,171,310
- --------------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
NOVEMBER 30, 1996 MAY 31, 1996
----------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------
Net investment income $ 326,168 $ 294,032
- --------------------------------------------------------
Net realized gain on investments and options ($933,543
and $1,973,979 net gain, respectively, as computed for
federal tax purposes) 933,543 1,973,979
- --------------------------------------------------------
Net change in unrealized appreciation 10,911,599 3,538,240
- -------------------------------------------------------- ------------ -----------
Change in net assets resulting from operations 12,171,310 5,806,251
- -------------------------------------------------------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------------
Distributions from net investment income (149,967) (337,321)
- --------------------------------------------------------
Distributions from net realized gains -- (479,791)
- -------------------------------------------------------- ------------ -----------
Change in net assets resulting from distributions
to shareholders (149,967) (817,112)
- -------------------------------------------------------- ------------ -----------
SHARE TRANSACTIONS--
- --------------------------------------------------------
Proceeds from sale of shares 114,183,736 5,713,327
- --------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 13,695 47,934
- --------------------------------------------------------
Cost of shares redeemed (2,653,478) (6,136,880)
- -------------------------------------------------------- ------------ -----------
Change in net assets resulting from share
transactions 111,543,953 (375,619)
- -------------------------------------------------------- ------------ -----------
Change in net assets 123,565,296 4,613,520
- --------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------
Beginning of period 29,194,396 24,580,876
- -------------------------------------------------------- ------------ -----------
End of period (including undistributed net investment
income of $222,412 and $46,211, respectively) $152,759,692 $29,194,396
- -------------------------------------------------------- ------------ -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN EQUITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
NOVEMBER
30, YEAR ENDED
(UNAUDITED) MAY 31,
----------- -------------------
1996 1996 1995(A)
----------- ------ -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $13.80 $11.48 $10.00
- ---------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------
Net investment income 0.07 0.14 0.11
- ---------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
options 1.75 2.57 1.44
- --------------------------------------------------------------- ------ ------ ------
Total from investment operations 1.82 2.71 1.55
- --------------------------------------------------------------- ------ ------ ------
LESS DISTRIBUTIONS
- ---------------------------------------------------------------
Distributions from net investment income (0.07) (0.16) (0.07)
- ---------------------------------------------------------------
Distributions from net realized gain on investments and
options -- (0.23) --
- --------------------------------------------------------------- ------ ------ ------
Total distributions (0.07) (0.39) (0.07)
- --------------------------------------------------------------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD $15.55 $13.80 $11.48
- --------------------------------------------------------------- ------ ------ ------
TOTAL RETURN(B) 13.26% 23.91% 15.55%
- ---------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------
Expenses 1.12%* 1.25% 1.25%*
- ---------------------------------------------------------------
Net investment income 1.12%* 1.08% 3.00%*
- ---------------------------------------------------------------
Expense waiver/reimbursement(c) 0.17%* 0.20% 1.42%*
- ---------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------
Net assets, end of period (000 omitted) $152,760 $29,194 $24,581
- ---------------------------------------------------------------
Portfolio turnover 56% 69% 4%
- ---------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from December 5, 1994 (date of initial
public investment) to May 31, 1995.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
111 Corcoran Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act") as an open-end, management investment company.
The Trust consists of three portfolios. The financial statements included herein
are only those of 111 Corcoran Equity Fund (the "Fund"), a diversified
portfolio. The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The investment
objective of the Fund is to provide high total return over longer periods of
time through appreciation of capital and current income provided by dividends
and interest payments.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Listed equity securities are valued at the last sale
price reported on a national securities exchange. Unlisted equity
securities are generally valued at the mean of the latest bid and asked
price as furnished by an independent pricing service. Short-term securities
are valued at the prices provided by an independent pricing service.
However, short-term securities with remaining maturities of sixty days or
less at the time of purchase may be valued at amortized cost, which
approximates fair market value. Investments in other open-end regulated
investment companies are valued at net asset value.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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.
111 CORCORAN EQUITY FUND
- --------------------------------------------------------------------------------
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from the Fund's
commencement date.
OPTIONS CONTRACTS--The Fund may write option contracts. A written option
obligates the Fund to deliver (a call), or to receive (a put), the contract
amount upon exercise by the holder of the option. The value of the option
contract is recorded as a liability and an unrealized gain or loss is
measured by the difference between the current value and the premium
received. For the period ended November 30, 1996, the Fund had a realized
loss of $216,698 on written options.
The following is a summary of the Fund's written options activity:
<TABLE>
<CAPTION>
NUMBER OF AGGREGATE
CONTRACTS CONTRACTS FACE VALUE
-------------------------------------------------------------- ---------- -----------
<S> <C> <C>
Outstanding at May 31, 1996 0 $ 0
Contracts opened 1,150 445,415
Contracts expired 0 0
----- --------
Outstanding at November 30, 1996 1,150 $445,415
===== ========
</TABLE>
At November 30, 1996, the Fund had the following outstanding options:
<TABLE>
<CAPTION>
UNREALIZED
EXERCISE NUMBER OF APPRECIATION MARKET
ISSUER TYPE EXPIRATION DATE PRICE CONTRACTS (DEPRECIATION) VALUE
----------------- ----- ---------------- -------- --------- -------------- --------
<S> <C> <C> <C> <C> <C> <C>
Halliburton Call December 1996 $ 60 400 $(17,794) $ 80,000
Proctor & Gamble Call December 1996 105 230 90,456 158,072
Intel Call December 1996 130 400 2,407 120,000
IBM Call January 1997 150 120 2,588 165,000
-------- --------
Total $ 77,657 $523,072
======== ========
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
111 CORCORAN EQUITY FUND
- --------------------------------------------------------------------------------
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1996 MAY 31, 1996
- ------------------------------------------------------ ------------------ --------------
<S> <C> <C>
Shares sold 7,894,778 457,100
- ------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 980 3,800
- ------------------------------------------------------
Shares redeemed (189,040) (485,448)
- ------------------------------------------------------ --------- --------
Net change resulting from share transactions 7,706,718 (24,548)
- ------------------------------------------------------ --------- --------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Central Carolina Bank and Trust Company, the Fund's
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.85% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
Under the terms of an investment sub-advisory agreement between the Adviser and
Franklin Street Advisors, Inc., (the "Sub-Adviser"), the Sub-Adviser receives an
annual fee equal to 0.65% of the Fund's average daily net assets payable by the
investment adviser from the Advisory fees. The Sub-Adviser may voluntarily
choose to waive any portion of its fee.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Trust for the period.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ"), through its subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the Fund. The fee
paid to FSSC is based on the size, type, and number of accounts and transactions
made by shareholders.
PORTFOLIO ACCOUNTING FEES--Fserv maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $35,000 were borne initially
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following December 2, 1994 (the date the Fund became
effective). For the period ended November 30, 1996, the Fund paid $1,470
pursuant to this agreement.
111 CORCORAN EQUITY FUND
- --------------------------------------------------------------------------------
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended November 30, 1996, were as follows:
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------
Purchases $145,915,636
- ------------------------------------------------------------------------------ ------------
Sales $ 34,438,867
- ------------------------------------------------------------------------------ ------------
</TABLE>
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Edward C. Gonzales
William J. Copeland President and Treasurer
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Executive Vice President
Edward L. Flaherty, Jr. John W. McGonigle
Edward C. Gonzales Executive Vice President and Secretary
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
John E. Murray, Jr. Joseph S. Machi
Wesley W. Posvar Vice President and Assistant Treasurer
Marjorie P. Smuts C. Grant Anderson
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
LOGO
111 Corcoran
North Carolina
Municipal
Securities Fund
Semi-Annual Report
November 30, 1996
Federated Securities Corp. is the distributor of the fund.
Cusip 682365101
2122401 (1/97)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present your Semi-Annual Report to Shareholders for 111 Corcoran
North Carolina Municipal Securities Fund, which covers the six-month period
ended November 30, 1996.
This report contains complete information about the fund's operations during the
reporting period, including an investment review by the fund's portfolio
manager, a listing of the fund's municipal bond holdings, and the fund's
financial statements.
To help your money earn double-tax-free income--exempt from federal and North
Carolina state income taxes--the fund invests primarily in a portfolio of
high-quality bonds issued by North Carolina municipalities.* All bonds in the
fund's portfolio are rated A or higher by nationally recognized rating agencies.
During the six-month period ended November 30, 1996, the fund had achieved a
total return based on net asset value of 5.91% through double-tax-free income
totaling $0.24 per share, and a 3% increase in net asset value. The fund's net
assets stood at $37.4 million at the end of the six-month period.+
Thank you for selecting this fund as a way to help keep more of your investment
income in your pocket. We will continue to keep you informed about your fund's
progress.
Sincerely,
LOGO
Edward C. Gonzales
President
January 15, 1997
* Income may be subject to the federal alternative minimum tax.
+ Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost. Total return for the
period reflecting the fund's sales charge was 1.12%.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Municipal bonds reflected good strength over the six-month period ended November
30, 1996, and the North Carolina Municipal Securities Fund generated a total
return based on net asset value for this period of 5.91%. This rally was a
welcome relief from the weakness exhibited during the first few months of 1996.
During the six-month reporting period North Carolina bonds produced lower
returns than the national municipal credits. Recently, North Carolina bonds have
not commanded the big premiums that were formerly present. This is probably due
to the elimination of the intangibles tax which penalized out-of-state issues.
Also, it appears that there are more lower quality revenue issues and
certificates of participation versus the higher quality general obligation
credits.
Going into 1997, we are fairly positive on the bond market. Inflation seems to
be well under control and the political balance of power seems to be moving to
the right. Our plan for the next several months is to stay with high quality
issues since lowering quality does not currently reward the investor with
sufficient increased return for the risk.
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- -------- -----------
<C> <C> <S> <C> <C>
MUNICIPAL SECURITIES--97.0%
- -------------------------------------------------------------------------
NORTH CAROLINA--95.6%
-------------------------------------------------------
$ 550,000 Alamance County, NC, 4.90% GO UT Bonds, 4/1/2010 AA- $ 540,821
-------------------------------------------------------
250,000 Alamance County, NC, 5.90% GO UT, 5/1/2006 AA- 269,425
-------------------------------------------------------
500,000 Buncombe County, NC, 4.90% GO UT Bonds, 4/1/2007 AA- 507,060
-------------------------------------------------------
410,000 Buncombe County, NC, 4.90% GO UT Bonds, 4/1/2008 AA- 412,636
-------------------------------------------------------
500,000 Buncombe County, NC, 5.10% GO UT Refunding Bonds,
3/1/2009 AA- 507,940
-------------------------------------------------------
500,000 Burke County, NC, 6.30% GO UT Bonds, (MBIA INS),
3/1/2006 AAA 550,415
-------------------------------------------------------
500,000 Cabarrus County, NC, 4.80% GO UT Bonds, (FGIC INS)/
(Original Issue Yield: 4.85%), 3/1/2009 AAA 491,105
-------------------------------------------------------
865,000 Cabarrus County, NC, 4.80% GO UT Refunding Bonds, (FGIC
INS), 3/1/2010 AAA 836,671
-------------------------------------------------------
250,000 Catawba County, NC, 5.70% GO UT Bonds, 6/1/2003 AA- 269,017
-------------------------------------------------------
500,000 Catawba County, NC, 5.75% GO UT Bonds, 6/1/2007 AA- 537,350
-------------------------------------------------------
500,000 Catawba County, NC, 5.85% Hospital Refunding Revenue
Bond, (AMBAC), 10/1/2004 AAA 539,720
-------------------------------------------------------
500,000 Catawba County, NC, 5.95% Hospital Refunding Revenue
Bonds, (AMBAC)/(Original Issue Yield: 6.00%), 10/1/2005 AAA 539,845
-------------------------------------------------------
500,000 Charlotte, NC, 5.30% GO UT Bonds, 4/1/2008 AAA 521,855
-------------------------------------------------------
250,000 Charlotte, NC, 6.50% GO UT Bonds, (United States
Treasury PRF), 1/1/2001 (@102) AAA 276,235
-------------------------------------------------------
250,000 Charlotte, NC, 6.50% GO UT Bonds, (United States
Treasury PRF), 2/1/2001 (@102) AAA 276,235
-------------------------------------------------------
750,000 Charlotte, NC, 5.30% GO UT Public Improvement Bonds,
4/1/2008 AAA 782,783
-------------------------------------------------------
500,000 Charlotte, NC, 5.50% GO UT Refunding Bonds (Series A),
7/1/2004 AAA 531,270
-------------------------------------------------------
</TABLE>
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- -------- -----------
<C> <C> <S> <C> <C>
MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
-------------------------------------------------------
$ 400,000 Charlotte-Mecklenburg Hospital Authority, NC, 6.375%
Health Care System Revenue Refunding Bonds, 1/1/2009 AA 427,008
-------------------------------------------------------
500,000 Chatham County, NC, 5.40% GO UT Bonds, 4/1/2007 A+ 525,750
-------------------------------------------------------
500,000 Chatham County, NC, 5.40% GO UT Bonds, 4/1/2010 A+ 514,595
-------------------------------------------------------
1,000,000 (b) Craven County, NC, 5.50% GO UT Bonds, (MBIA INS),
6/1/2010 AAA 1,044,170
-------------------------------------------------------
600,000 Cumberland County, NC, 5.80% GO UT Bonds, (MBIA INS),
2/1/2007 AAA 642,666
-------------------------------------------------------
470,000 Duplin County, NC, 5.30% GO UT Bonds, (MBIA INS),
4/1/2007 AAA 489,138
-------------------------------------------------------
500,000 Durham & Wake Counties Special Airport District, NC,
5.75% GO UT Refunding Bonds, 4/1/2002 AAA 536,270
-------------------------------------------------------
250,000 Fayetteville, NC Public Works Commission, 5.90% Revenue
Bonds (Series B), (FSA LOC), 3/1/2007 AAA 266,335
-------------------------------------------------------
1,250,000 Forsyth County, NC, 5.70% GO UT , 8/1/2010 AAA 1,309,200
-------------------------------------------------------
500,000 Forsyth County, NC, Public Improvement, 5.60% GO UT
Bonds, 8/1/2009 AAA 524,180
-------------------------------------------------------
500,000 Gaston County, NC, 5.00% GO UT Bonds, (AMBAC INS),
3/1/2010 AAA 498,760
-------------------------------------------------------
750,000 Gaston County, NC, 5.10% GO UT Bonds, (AMBAC INS),
3/1/2011 AAA 751,830
-------------------------------------------------------
500,000 Greensboro, NC, 6.30% GO UT Bonds, PRF, 3/1/2002 (@
102) AAA 554,425
-------------------------------------------------------
500,000 Guilford County, NC, 5.30% GO UT Bonds, 5/1/2010 AA+ 512,305
-------------------------------------------------------
500,000 Guilford County, NC, 5.30% GO UT Bonds, 5/1/2009 AA+ 517,250
-------------------------------------------------------
1,000,000 Guilford County, NC, 5.40% GO UT Bonds, (Original Issue
Yield: 5.55%), 4/1/2009 AA+ 1,039,660
-------------------------------------------------------
500,000 Iredell County, NC, 5.50% Certificates of
Participation, (FGIC INS), 6/1/2001 AAA 523,815
-------------------------------------------------------
</TABLE>
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- -------- -----------
<C> <C> <S> <C> <C>
MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
-------------------------------------------------------
$ 350,000 Iredell County, NC, 6.125% Certificates of
Participation, (FGIC INS), 6/1/2007 AAA 376,800
-------------------------------------------------------
500,000 Mecklenburg County, NC, 5.90% GO UT Refunding Bonds,
3/1/2004 AAA 538,425
-------------------------------------------------------
500,000 Mooresville, NC Grade School District Facilities Corp.,
6.30% Certificates of Participation, (AMBAC INS),
10/1/2009 AAA 543,070
-------------------------------------------------------
500,000 Morganton, NC, 5.60% GO UT Revenue Bonds, (FGIC INS),
6/1/2007 AAA 534,800
-------------------------------------------------------
500,000 Morganton, NC, 5.70% GO UT Revenue Bonds, (FGIC INS),
6/1/2012 AAA 525,340
-------------------------------------------------------
500,000 Morganton, NC, 5.60% Water & Sewer GO UT Revenue Bonds,
6/1/2008 AAA 531,915
-------------------------------------------------------
1,000,000 New Hanover County, NC, (Project R-5) 5.40% GO UT
Bonds, 3/1/2009 A+ 1,033,000
-------------------------------------------------------
500,000 New Hanover County, NC, 5.50% GO UT Bonds, 3/1/2012 A+ 513,760
-------------------------------------------------------
200,000 North Carolina Medical Care Commission Hospital, 5.95%
Revenue Bonds, (Presbyterian Health Services Corp),
10/1/2007 AA 207,650
-------------------------------------------------------
1,750,000 North Carolina Municipal Power Agency No. 1, 10.50%
Revenue Bonds, (Catawba Electric)/(United States
Treasury COL), 1/1/2010 AAA 2,471,210
-------------------------------------------------------
500,000 North Carolina Municipal Power Agency No. 1, 5.25%
Revenue Refunding Bonds, (Catawba Electric)/ (AMBAC
INS)/(Original Issue Yield: 5.55%), 1/1/2008 AAA 514,165
-------------------------------------------------------
500,000 North Carolina Municipal Power Agency No. 1, 5.75%
Revenue Refunding Bonds, (Catawba Electric)/(AMBAC
INS), 1/1/2002 AAA 528,120
-------------------------------------------------------
535,000 North Carolina State, 6.20% GO UT Bonds (Series A),
(United States Treasury PRF), 3/1/2002 (@102) AAA 590,688
-------------------------------------------------------
</TABLE>
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
- ---------- ------------------------------------------------------- -------- -----------
<C> <C> <S> <C> <C>
MUNICIPAL SECURITIES--CONTINUED
- -------------------------------------------------------------------------
NORTH CAROLINA--CONTINUED
-------------------------------------------------------
$ 250,000 Pitt County, NC, 6.05% Certificate of Participation,
(FGIC INS), 4/1/1998 AAA 257,330
-------------------------------------------------------
500,000 Randolph County, NC, 6.20% GO UT Bonds, 5/1/2005 A+ 544,275
-------------------------------------------------------
500,000 Rowan County, NC, 5.60% GO UT Bonds, (FGIC INS),
5/1/2011 AAA 519,715
-------------------------------------------------------
500,000 Rowan County, NC, 5.60% GO UT Bonds, (MBIA INS),
4/1/2009 AAA 528,565
-------------------------------------------------------
1,000,000 Union County, NC, 5.00% GO UT Bonds, (MBIA INS),
5/1/2007 AAA 1,020,740
-------------------------------------------------------
500,000 Union County, NC, 5.80% GO UT School Bonds, 3/1/2006 A+ 533,120
-------------------------------------------------------
500,000 Wake County, NC Industrial Facilities & PCFA, 6.90%
Revenue Bonds, (Carolina Power & Light Co.), 4/1/2009 A 539,565
-------------------------------------------------------
500,000 Wilmington, NC, 6.30% GO UT Bonds, 3/1/2005 A+ 545,515
-------------------------------------------------------
1,185,000 Wilmington, NC, 4.80% GO UT Refunding Bonds, 3/1/2008 A+ 1,171,823
-------------------------------------------------------
1,000,000 Winston-Salem, NC, 6.25% Water & Sewer System Bonds,
6/1/2005 AA+ 1,095,790
-------------------------------------------------------
500,000 Winston-Salem, NC, 5.40% GO UT Bonds, (Original Issue
Yield: 5.30%), 6/1/2009 AAA 521,505
-------------------------------------------------------
500,000 Winston-Salem, NC, 5.40% GO UT Bonds, 6/1/2011 AAA 514,985
------------------------------------------------------- -----------
Total 35,769,611
------------------------------------------------------- -----------
PUERTO RICO--1.4%
-------------------------------------------------------
500,000 Puerto Rico Electric Power Authority, 5.75% Refunding
Revenue Bonds (Series V), (FSA INS), 7/1/2007 AAA 529,405
------------------------------------------------------- -----------
TOTAL MUNICIPAL SECURITIES (IDENTIFIED COST
$35,023,864) 36,299,016
------------------------------------------------------- -----------
</TABLE>
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
SHARES RATING* VALUE
- ---------- ---------------------------------------------------------- -------- -----------
<C> <S> <C> <C>
MUTUAL FUND SHARES--1.8%
- ------------------------------------------------------------------------
5,000 North Carolina Daily Tax-Free Income Money Market Fund $ 5,000
----------------------------------------------------------
686,325 PNC North Carolina Money Market Fund 686,325
---------------------------------------------------------- -----------
TOTAL MUTUAL FUND SHARES (AT NET ASSET VALUE) 691,325
---------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $35,715,189)(A) $36,990,341
---------------------------------------------------------- -----------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to $35,715,189. The
net unrealized appreciation of investments on a federal tax basis amounts to
$1,275,152 which is comprised of $1,311,681 appreciation and $36,529
depreciation at November 30, 1996.
(b) Represents delayed delivery security.
* Please refer to the Appendix of the Statement of Additional Information for
an explanation of the credit ratings. Current credit ratings are unaudited.
Note: The categories of investments are shown as a percentage of net assets
($37,405,916) at November 30, 1996.
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation
COL -- Collateralized
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
GO -- General Obligation
INS -- Insured
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
PCFA -- Pollution Control Finance Authority
PRF -- Prerefunded
UT -- Unlimited Tax
</TABLE>
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $35,715,189) $36,990,341
- --------------------------------------------------------------------------------
Income receivable 583,067
- --------------------------------------------------------------------------------
Deferred expenses 2,499
- -------------------------------------------------------------------------------- -----------
Total assets 37,575,907
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Income distribution payable $168,269
- ---------------------------------------------------------------------
Accrued expenses 1,722
- --------------------------------------------------------------------- --------
Total liabilities 169,991
- -------------------------------------------------------------------------------- -----------
Net Assets for 3,496,985 shares outstanding $37,405,916
- -------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid in capital $36,404,267
- --------------------------------------------------------------------------------
Net unrealized appreciation of investments 1,275,152
- --------------------------------------------------------------------------------
Accumulated net realized loss on investments (273,503)
- -------------------------------------------------------------------------------- -----------
Total Net Assets $37,405,916
- -------------------------------------------------------------------------------- -----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- --------------------------------------------------------------------------------
Net Asset Value and Redemption Proceeds Per Share
($37,405,916 / 3,496,985 shares outstanding) $10.70
- -------------------------------------------------------------------------------- -----------
Offering Price Per Share (100/95.50 of $10.70)* $11.20
- -------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------
Interest $ 968,901
- ---------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------
Investment advisory fee $ 139,726
- ---------------------------------------------------------------------
Administrative personnel and services fee 27,755
- ---------------------------------------------------------------------
Custodian fees 12,148
- ---------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 15,848
- ---------------------------------------------------------------------
Directors'/Trustees' fees 1,398
- ---------------------------------------------------------------------
Auditing fees 6,724
- ---------------------------------------------------------------------
Legal fees 1,454
- ---------------------------------------------------------------------
Portfolio accounting fees 28,047
- ---------------------------------------------------------------------
Share registration costs 8,543
- ---------------------------------------------------------------------
Printing and postage 2,830
- ---------------------------------------------------------------------
Insurance premiums 2,032
- ---------------------------------------------------------------------
Miscellaneous 6,653
- --------------------------------------------------------------------- ---------
Total expenses 253,158
- ---------------------------------------------------------------------
Waivers--
- ---------------------------------------------------------------------
Waiver of investment advisory fee (139,726)
- --------------------------------------------------------------------- ---------
Net expenses 113,432
- --------------------------------------------------------------------------------- ----------
Net investment income 855,469
- --------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------
Net realized gain on investments 54,608
- ---------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 1,214,610
- --------------------------------------------------------------------------------- ----------
Net realized and unrealized gain on investments 1,269,218
- --------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $2,124,687
- --------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
NOVEMBER 30, YEAR ENDED
1996 MAY 31,
(UNAUDITED) 1996
------------ ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------------
Net investment income $ 855,469 $ 1,765,532
- --------------------------------------------------------------
Net realized gain (loss) on investments ($54,608 net gain and
$54,981 net loss, respectively, as computed for federal tax
purposes) 54,608 452,751
- --------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 1,214,610 (780,988)
- -------------------------------------------------------------- ----------- ----------
Change in net assets resulting from operations 2,124,687 1,437,295
- -------------------------------------------------------------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------------------
Distributions from net investment income (855,469) (1,766,573)
- -------------------------------------------------------------- ----------- ----------
SHARE TRANSACTIONS--
- --------------------------------------------------------------
Proceeds from sale of shares 2,696,014 6,836,955
- --------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 89,804 255,401
- --------------------------------------------------------------
Cost of shares redeemed (3,521,117) (9,694,151)
- -------------------------------------------------------------- ----------- ----------
Change in net assets resulting from share transactions (735,299) (2,601,795)
- -------------------------------------------------------------- ----------- ----------
Change in net assets 533,919 (2,931,073)
- --------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------
Beginning of period 36,871,997 39,803,070
- -------------------------------------------------------------- ----------- ----------
End of period $37,405,916 $36,871,997
- -------------------------------------------------------------- ----------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED MAY 31,
NOVEMBER 30, ----------------------------------------------
1996 1996 1995 1994 1993(A)
------------ ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $10.34 $10.44 $10.17 $10.36 $10.00
- -----------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------
Net investment income 0.24 0.49 0.48 0.47 0.37
- -----------------------------------
Net realized and unrealized gain
(loss) on investments 0.36 (0.10) 0.27 (0.18) 0.36
- ----------------------------------- ------ ------ ------ ------ ------
Total from investment operations 0.60 0.39 0.75 0.29 0.73
- ----------------------------------- ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
- -----------------------------------
Distributions from net investment
income (0.24) (0.49) (0.48) (0.47) (0.37)
- -----------------------------------
Distributions from net realized
gain on investments -- -- -- (0.01) --
- ----------------------------------- ------ ------ ------ ------ ------
Total distributions (0.24) (0.49) (0.48) (0.48) (0.37)
- ----------------------------------- ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $10.70 $10.34 $10.44 $10.17 $10.36
- ----------------------------------- ------ ------ ------ ------ ------
TOTAL RETURN(B) 5.91% 3.72% 7.71% 2.68% 7.37%
- -----------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------
Expenses 0.61%* 0.52% 0.57% 0.69% 0.70%*
- -----------------------------------
Net investment income 4.59%* 4.73% 4.82% 4.42% 4.51%*
- -----------------------------------
Expense waiver/reimbursement(c) 0.75%* 0.75% 0.75% 0.75% 0.99%*
- -----------------------------------
SUPPLEMENTAL DATA
- -----------------------------------
Net assets, end of period (000
omitted) $37,406 $36,872 $39,803 $45,864 $28,152
- -----------------------------------
Portfolio turnover 13% 61% 47% 24% 17%
- -----------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 22, 1992 (date of initial
public investment) to May 31, 1993.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
The 111 Corcoran Funds (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act") as an open-end, management investment
company. The Trust consists of three portfolios. The financial statements
included herein are only those of 111 Corcoran North Carolina Municipal
Securities Fund (the "Fund"), a non-diversified portfolio. The investment
objective of the Fund is to provide income which is exempt from federal regular
income tax and North Carolina state income tax. The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service, taking into consideration yield, liquidity, risk, credit quality,
coupon, maturity, type of issue, and any other factors or market data the
pricing service deems relevant. Short-term securities are valued at the
prices provided by an independent pricing service. However, short-term
securities with remaining maturities of sixty days or less at the time of
purchase may be valued at amortized cost, which approximates fair market
value. Investments in other open-end regulated investment companies are
valued at net asset value.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At May 31, 1996, the Fund, for federal tax purposes, had a capital loss
carryforward of $327,976, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforward of $272,995 will expire in 2003 and $54,981 will expire in
2004.
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
- --------------------------------------------------------------------------------
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains 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.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from the Fund's
commencement date.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
NOVEMBER 30, MAY 31,
1996 1996
- ------------------------------------------------------------- ------------ ----------
<S> <C> <C>
Shares sold 258,614 651,305
- -------------------------------------------------------------
Shares issued to shareholders in payment of distributions
declared 8,600 24,282
- -------------------------------------------------------------
Shares redeemed (337,098) (923,053)
- ------------------------------------------------------------- -------- --------
Net change resulting from share transactions (69,884) (247,466)
- ------------------------------------------------------------- -------- --------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Central Carolina Bank and Trust Company, the Fund's
investment adviser (the "Adviser"), receives for its services an annual
investment advisory fee equal to 0.75% of the Fund's average daily net assets.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
111 CORCORAN NORTH CAROLINA MUNICIPAL
SECURITIES FUND
- --------------------------------------------------------------------------------
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Trust for the period.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ"), through its subsidiary, Federated Shareholder Services
Company ("FSSC") serves as transfer and dividend disbursing agent for the Fund.
The fee paid to FSSC is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $43,033 were borne initially
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following May 1, 1992 (the date the Fund became
effective). For the period ended November 30, 1996, the Fund paid $7,172
pursuant to this agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended November 30, 1996, were as follows:
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
Purchases $4,688,421
- -------------------------------------------------------------------------------- ----------
Sales $5,874,550
- -------------------------------------------------------------------------------- ----------
</TABLE>
(6) CONCENTRATION OF CREDIT RISK
Since the Fund invests a substantial portion of its assets in issuers located in
one state, it will be more susceptible to factors adversely affecting issuers of
that state than would be a comparable tax-exempt mutual fund that invests
nationally. In order to reduce the credit risk associated with such factors, at
November 30, 1996, 35% of the securities in the portfolio of investments are
backed by letters of credit or bond insurance of various financial institutions
and financial guaranty assurance agencies. The percentage of investments insured
by or supported (backed) by a letter of credit from any one institution or
agency did not exceed 12% of total investments.
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Edward C. Gonzales
William J. Copeland President and Treasurer
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Executive Vice President
Edward L. Flaherty, Jr. John W. McGonigle
Edward C. Gonzales Executive Vice President and Secretary
Peter E. Madden Richard B. Fisher
Gregor F. Meyer Vice President
John E. Murray, Jr. Joseph S. Machi
Wesley W. Posvar Vice President and Assistant Treasurer
Marjorie P. Smuts C. Grant Anderson
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
