PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present you with the Semi-Annual Report of the SouthTrust
Vulcan Funds (collectively referred to as the "Funds" or individually as the
"Fund") for the six-month period ended October 31, 1994. This Report contains
complete financial information for the Funds, including the Investment Review
and Portfolio of Investments for the SouthTrust Vulcan Stock Fund, the
SouthTrust Vulcan Bond Fund, and the SouthTrust Vulcan Treasury Obligations
Money Market Fund.
Total net assets in two of the three Funds have grown during the reporting
period. As of October 31, 1994, net assets in the SouthTrust Vulcan Stock Fund
increased to $118.4 million, and dividends totaled $330,917, or $0.09 per
share. The SouthTrust Vulcan Bond Fund grew to $73.5 million in net assets, and
paid more than $1.2 million, or $0.30 per share in dividends. Lastly, while the
SouthTrust Vulcan Treasury Obligations Money Market Fund experienced a minor
decrease in net assets, the Fund paid shareholders more than $4.8 million in
dividends, or $0.02 per share.*
We appreciate your confidence in the SouthTrust Vulcan Funds, and will continue
to keep you informed about the progress of your investment. As always, we
welcome your questions and comments.
Sincerely,
Edward C. Gonzales
President
December 15, 1994
* Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the SouthTrust Vulcan Treasury Obligations Money Market Fund is not
insured by, guaranteed by, and is not a deposit or obligation of the bank
or its affiliates, the Federal Deposit Insurance Corporation, the Federal
Reserve Board, the U.S. government, or any other government agency.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
The U.S. economy is about to complete its fourth year of positive growth.
Despite repeated efforts by the Federal Reserve Board (the "Fed") to slow the
rate of growth, the economy continues to surprise the financial markets with
its strength. Third quarter real Gross Domestic Product ("GDP") was recently
revised upward to 3.9%, following a 4.1% rate of growth in the second quarter
and a 3.3% rate in the first quarter. Most economists expect fourth quarter
real GDP to come in above the 4.0% rate.
Despite this cycle's slower-than-normal economic expansion, financial markets
remain worried about an acceleration in the rate of inflation. Thus far, the
economic statistics have not shown a meaningful acceleration in inflation. The
12-month change in the Consumer Price Index is 2.6% overall, and 2.9% for the
core (excluding the volatile food and energy components). However, with the
economy still showing signs of strong growth, the supply of resources (raw
materials, manufacturing capacity, labor, etc.) continues to tighten. Capacity
utilization moved up to 84.9% in October, three percentage points above the 25-
year average.
Since February, the Fed has cumulatively increased the federal funds' rate by
175 basis points and the discount rate by 100 basis points, in an effort to
slow the economy and keep inflation under control. The difficult aspect of
understanding the current environment is that changes in monetary policy take
time to work through the economy. Often times, the Fed overshoots its mark and
rather than engineering a "soft-landing," it creates a recession. The magnitude
of the slow-down will be the critical question for 1995. One positive
development that may provide a partial offset to this risk is the export
opportunities offered by an accelerating European economy and a recovering
Japanese economy. While U.S. economic growth should slow in 1995, a recession
is very unlikely.
The SouthTrust Vulcan Stock Fund seeks long-term capital appreciation by
investing in securities, primarily common stocks, that have attractive growth
prospects that, in the opinion of SouthTrust Bank of Alabama, N.A. (the
"Adviser"), are not fully reflected in the stocks' prices. Under normal
circumstances, the Fund's level of cash and cash equivalents will fluctuate
between 0% and 10% of total assets, with 90% to 100% of assets invested in
equities.
During the most recent calendar quarter, the best performing sectors included:
. HEALTHCARE--Beneficiary of the collapse of the Clinton health care reform
proposal and speculation of further consolidation following two announced
acquisitions;
. TECHNOLOGY--Beneficiary of capital spending boom targeted at improving
productivity; and
. BASIC MATERIALS--Beneficiary of projected strong worldwide demand, and the
inflation hedging characteristics of commodities.
During the same period, the worst performing sectors included:
. TRANSPORTATION--Concerns that increasing interest rates may lead to an
economic slowdown, thus impacting the highly cyclical transportation
industry;
. FINANCE--Concerns that higher interest rates will negatively impact net
interest margins, and lead to losses in securities portfolios; and
. CONSUMER CYCLICAL--Concerns that increasing interest rates may lead to a
slowdown in consumer spending.
The Adviser currently favors capital goods companies for several reasons:
improving worldwide economies may lead to strong demand for capital goods;
these companies are beneficiaries of the weak dollar; and they continue to
benefit from the substitution of capital for labor.
The lowering of trade barriers (resulting from the enactment of NAFTA and GATT)
may benefit the most efficient producers. The efficiency of U.S. manufacturers
has increased substantially over the past several years. Reasons for this
increased efficiency include: an emphasis on cost control, better labor
relations, better inventory management, the trend toward downsizing and
outsourcing, and the move toward flexible manufacturing. Recently, the
efficiency gains of U.S. manufacturers have outstripped the gains made by
foreign manufacturers.
Strength in corporate earnings during the past year coupled with pressure on
stock prices, have resulted in stocks selling at the most attractive valuations
seen in a number of years. While it is too soon to expect a strong upward move
in stock prices, many well-positioned stocks are valued at levels where they
potentially offer above-average total return prospects.
In response to the difficult bond market environment created by the Fed
actions, the SouthTrust Vulcan Bond Fund is positioned in laddered maturities
with a weighted average maturity of 6.4 years. Defensive actions in the
portfolio have resulted in the current average maturity being reduced 29% from
one year ago, when the average maturity was 9.1 years. Purchases by the Fund
have been in mortgage-backed securities and high quality short to intermediate
maturity corporate bonds.
While interest rates have continued to climb throughout 1994, the yield curve
has flattened. Last year at this time, the yields on the 2-year Treasury note
and the 30-year Treasury bond were 4.10% and 6.03%, respectively. Now those
yields are 6.83% and 7.97%, respectively, representing a yield curve flattening
of 78 basis points. The increase in yields resulted from the strengthening
economy and uncertainty regarding prospects of a resurgence in inflation.
Although in the near-term there remains upward pressure on short maturity
interest rates, yields have reached levels where bonds provide attractive
income and total return potential.
In its efforts to slow economic growth, the Fed has increased short-term
interest rates 5 times, with the first increase occurring on February 4, 1994.
The targeted federal funds' rate has increased by approximately 1.75% during
this period. With the increase in short-term rates, the yield on the SouthTrust
Vulcan Treasury Obligations Money Market Fund has also increased. The 30-day
yield as of October 31, 1994 was 4.37%.* Over the next six months, the Fed
should continue to increase rates in its effort to slow economic growth. The
yield on the Fund may continue to rise with each increase in rates by the Fed.
* Performance quoted represents past performance and is not indicative of
future results. Yield will vary.
SOUTHTRUST VULCAN TREASURY OBLIGATIONS
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- --------------------------------------------------- ------------
<C> <S> <C>
U.S. TREASURY BILLS--49.8%
- -------------------------------------------------------------------------------
$10,000,000 11/10/94 $ 9,988,756
---------------------------------------------------
10,000,000 11/17/94 9,980,244
---------------------------------------------------
5,000,000 11/25/94 4,984,983
---------------------------------------------------
5,000,000 12/1/94 4,981,229
---------------------------------------------------
10,000,000 12/8/94 9,952,825
---------------------------------------------------
15,000,000 12/15/94 14,913,253
---------------------------------------------------
20,000,000 12/22/94 19,868,675
---------------------------------------------------
5,000,000 1/5/95 4,956,757
---------------------------------------------------
5,000,000 1/12/95 4,953,750
---------------------------------------------------
10,000,000 1/19/95 9,893,460
---------------------------------------------------
5,000,000 1/26/95 4,942,308
---------------------------------------------------
5,000,000 2/9/95 4,933,125
---------------------------------------------------
15,000,000 2/16/95 14,780,279
---------------------------------------------------
5,000,000 3/2/95 4,913,451
---------------------------------------------------
10,000,000 3/16/95 9,806,594
---------------------------------------------------
5,000,000 4/13/95 4,880,014
--------------------------------------------------- ------------
TOTAL U.S. TREASURY BILLS 138,729,703
--------------------------------------------------- ------------
U.S. TREASURY NOTES--5.4%
- -------------------------------------------------------------------------------
10,000,000 4.625%, 11/30/94 9,997,909
---------------------------------------------------
5,000,000 3.875%, 3/31/95 4,974,724
--------------------------------------------------- ------------
TOTAL U.S. TREASURY NOTES 14,972,633
--------------------------------------------------- ------------
*REPURCHASE AGREEMENTS--45.1%
- -------------------------------------------------------------------------------
45,799,000 First Boston Corp., 4.75%, dated 10/31/94, due
11/1/94 45,799,000
---------------------------------------------------
50,000,000 Kidder, Peabody & Co., Inc., 4.77%, dated 10/31/94,
due 11/1/94 50,000,000
---------------------------------------------------
15,000,000 Nikko Securities Co. International, Inc., 4.75%,
dated 10/31/94, due 11/1/94 15,000,000
---------------------------------------------------
$15,000,000 Prudential Securities, Inc., 4.75%, dated
10/31/94, due 11/1/94 $ 15,000,000
--------------------------------------------------- ------------
TOTAL REPURCHASE AGREEMENTS 125,799,000
-------------------------------------------------- ------------
TOTAL INVESTMENTS, AT AMORTIZED COST $279,501,336+
-------------------------------------------------- ------------
</TABLE>
+ Also represents cost for federal tax purposes.
* The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
Note: The categories of investments are shown as a percentage of net assets
($278,831,713) at October 31, 1994.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN STOCK FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
--------- --------------------------------------------------- ------------
<C> <S> <C>
SHORT-TERM INVESTMENTS--6.2%
- -----------------------------------------------------------------------------
MUTUAL FUND SHARES--6.2%
---------------------------------------------------
7,391,132 Federated Short-Term Government Trust (at net asset
value) $ 7,391,132
--------------------------------------------------- ------------
COMMON STOCKS--94.5%
- -----------------------------------------------------------------------------
BUSINESS EQUIPMENT & SERVICES--1.6%
---------------------------------------------------
32,200 Automatic Data Processing 1,879,675
--------------------------------------------------- ------------
CAPITAL GOODS--12.4%
---------------------------------------------------
21,200 Caterpillar, Inc. 1,266,700
---------------------------------------------------
24,100 Emerson Electric Co. 1,464,075
---------------------------------------------------
41,900 General Electric Co. 2,047,862
---------------------------------------------------
53,700 Illinois Tool Works, Inc. 2,409,787
---------------------------------------------------
37,900 Loral Corp. 1,501,787
---------------------------------------------------
41,900 PACCAR, Inc. 1,875,025
---------------------------------------------------
89,500 Pall Corp. 1,622,187
---------------------------------------------------
72,000 Rockwell International Corp. 2,511,000
--------------------------------------------------- ------------
Total 14,698,423
--------------------------------------------------- ------------
CONSUMER DURABLES--6.8%
---------------------------------------------------
56,500 Chrysler Corp. 2,754,375
---------------------------------------------------
110,100 Echlin, Inc. 3,385,575
---------------------------------------------------
37,100 Whirlpool Corp. 1,929,200
--------------------------------------------------- ------------
Total 8,069,150
--------------------------------------------------- ------------
CONSUMER NON-DURABLES--8.6%
---------------------------------------------------
36,600 Campbell Soup Co. 1,509,750
---------------------------------------------------
43,300 Philip Morris Cos., Inc. 2,652,125
---------------------------------------------------
71,000 Procter & Gamble Co. 4,437,500
---------------------------------------------------
62,300 Sara Lee Corp. 1,534,138
--------------------------------------------------- ------------
Total 10,133,513
--------------------------------------------------- ------------
CONSUMER SERVICES--6.6%
-------------------------------------
43,900 Block, H&R, Inc. $ 1,948,062
-------------------------------------
67,600 Disney, Walt Co. 2,661,750
-------------------------------------
74,200 Reader's Digest Associates, Inc. 3,255,525
------------------------------------- ------------
Total 7,865,337
------------------------------------- ------------
ENERGY--10.5%
-------------------------------------
33,200 Amoco Corp. 2,104,050
-------------------------------------
34,200 Ashland Oil, Inc. 1,329,525
-------------------------------------
42,000 Coastal Corp. 1,197,000
-------------------------------------
58,400 Exxon Corp. 3,671,900
-------------------------------------
48,200 Mobil Corp. 4,145,200
------------------------------------- ------------
Total 12,447,675
------------------------------------- ------------
FINANCIAL SERVICES--8.4%
-------------------------------------
37,900 American International Group 3,548,388
-------------------------------------
14,000 Federal National Mortgage Association 1,064,000
-------------------------------------
72,800 KeyCorp 2,083,900
-------------------------------------
15,700 Marsh & McLennan Co. 1,177,500
-------------------------------------
42,400 NationsBank Corp. 2,098,800
------------------------------------- ------------
Total 9,972,588
------------------------------------- ------------
HEALTH CARE--3.5%
-------------------------------------
44,500 Merck & Co., Inc. 1,590,875
-------------------------------------
34,700 Pfizer, Inc. 2,572,137
------------------------------------- ------------
Total 4,163,012
------------------------------------- ------------
MULTI-INDUSTRY--3.4%
-------------------------------------
55,200 Minnesota Mining & Manufacturing Co. 3,056,700
-------------------------------------
21,100 Tenneco, Inc. 933,675
------------------------------------- ------------
Total 3,990,375
------------------------------------- ------------
RAW MATERIALS--7.5%
--------------------------------------
54,300 Air Products & Chemicals, Inc. $ 2,592,825
--------------------------------------
43,100 Rohm & Haas 2,602,163
--------------------------------------
76,900 Sherwin Williams Co. 2,508,863
--------------------------------------
34,700 Union Carbide Corp. 1,149,437
-------------------------------------- ------------
Total 8,853,288
-------------------------------------- ------------
RETAIL--5.2%
--------------------------------------
53,000 Dillard Department Stores 1,404,500
--------------------------------------
43,600 May Department Stores Co. 1,640,450
--------------------------------------
130,000 Wal-Mart Stores, Inc. 3,055,000
-------------------------------------- ------------
Total 6,099,950
-------------------------------------- ------------
SHELTER, FOREST PRODUCTS & PAPER--1.0%
--------------------------------------
78,100 Shaw Industries 1,142,213
-------------------------------------- ------------
TECHNOLOGY--13.4%
--------------------------------------
56,200 AT&T Corp. 3,091,000
--------------------------------------
21,300 Hewlett Packard Co. 2,082,075
--------------------------------------
61,500 Intel Corp. 3,820,688
--------------------------------------
81,800 MCI Communications 1,881,400
--------------------------------------
46,300 Microsoft Corp. 2,916,900(a)
--------------------------------------
35,800 Motorola, Inc. 2,107,725
-------------------------------------- ------------
Total 15,899,788
-------------------------------------- ------------
TRANSPORTATION--1.6%
--------------------------------------
30,300 Norfolk Southern Corp. 1,908,900
-------------------------------------- ------------
UTILITIES--4.0%
---------------------------------------------------
66,800 Carolina Power & Light Co. $ 1,761,850
---------------------------------------------------
62,500 Consolidated Edison Co. of New York, Inc. 1,554,688
---------------------------------------------------
88,800 Westcoast Energy, Inc. 1,454,100
--------------------------------------------------- ------------
Total 4,770,638
--------------------------------------------------- ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $108,052,424) 111,894,525
--------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $115,443,556) $119,285,657+
--------------------------------------------------- ------------
</TABLE>
(a) Non-income producing.
+ The cost of investments for federal tax purposes amounts to $115,443,556.
The net unrealized appreciation of investments on a federal tax basis
amounts to $3,842,101, which is comprised of $5,214,028 appreciation and
$1,371,927 depreciation at October 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($118,396,306) at October 31, 1994.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN BOND FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
---------- ---------------------------------------------------- -----------
<C> <S> <C>
SHORT-TERM INVESTMENTS--7.8%
- ------------------------------------------------------------------------------
MUTUAL FUND SHARES--7.8%
----------------------------------------------------
5,755,735 Federated Short-Term Government Trust (at net asset
value) $ 5,755,735
---------------------------------------------------- -----------
LONG-TERM INVESTMENTS--103.7%
- ------------------------------------------------------------------------------
CORPORATE BONDS--41.8%
- ------------------------------------------------------------------------------
BANKING--1.8%
----------------------------------------------------
$ 500,000 State Street Boston Corp., 5.95%, 9/15/2003 426,435
----------------------------------------------------
1,000,000 Wachovia Corp., 6.375%, 4/15/2003 889,980
---------------------------------------------------- -----------
Total 1,316,415
---------------------------------------------------- -----------
CONSUMER NON-DURABLES--6.3%
----------------------------------------------------
1,500,000 General Mills, Inc., 5.73%, 10/3/97 1,425,450
----------------------------------------------------
1,000,000 PepsiCo, Inc., 6.25%, 9/1/99 936,770
----------------------------------------------------
1,000,000 Philip Morris Cos., Inc., 7.125%, 12/1/99 959,290
----------------------------------------------------
1,500,000 Philip Morris Cos., Inc., 7.125%, 10/1/2004 1,352,100
---------------------------------------------------- -----------
Total 4,673,610
---------------------------------------------------- -----------
CONSUMER SERVICES--3.2%
----------------------------------------------------
2,000,000 Gannett Co., 5.85%, 5/1/2000 1,821,260
----------------------------------------------------
500,000 Kimberly-Clark Corp., 8.625%, 5/1/2001 516,060
---------------------------------------------------- -----------
Total 2,337,320
---------------------------------------------------- -----------
ELECTRICAL--2.7%
----------------------------------------------------
2,300,000 Motorola, Inc., 6.50%, 3/1/2008 1,973,262
---------------------------------------------------- -----------
FINANCE--13.6%
----------------------------------------------------
765,000 Associates Corp. of North America, 5.25%, 3/30/2000 674,133
----------------------------------------------------
2,000,000 Associates Corp. of North America, 6.00%, 6/15/2000 1,820,340
----------------------------------------------------
2,000,000 Equifax, Inc., 6.50%, 6/15/2003 1,779,680
----------------------------------------------------
2,500,000 Ford Motor Credit Corp., 7.75%, 10/1/99 2,476,175
----------------------------------------------------
1,000,000 International Business Machines Credit Corp., 5.22%,
2/16/96 980,560
----------------------------------------------------
$ 275,000 International Lease Financing Corp., 5.75%, 1/15/96 $ 272,189
----------------------------------------------------
2,000,000 International Lease Financing Corp., 5.60%, 1/17/96 1,974,460
---------------------------------------------------- -----------
Total 9,977,537
--------------------------------------------------- -----------
Health Care--2.4%
----------------------------------------------------
1,000,000 Johnson & Johnson, 8.00%, 9/1/98 1,015,020
----------------------------------------------------
750,000 Merck & Co., Inc., 6.00%, 1/15/97 731,287
---------------------------------------------------- -----------
Total 1,746,307
---------------------------------------------------- -----------
OIL & OIL FINANCE--1.1%
----------------------------------------------------
900,000 Amoco CDA Pete Co., 6.75%, 2/15/2005 806,958
---------------------------------------------------- -----------
RAW MATERIALS--1.3%
----------------------------------------------------
1,000,000 du Pont (E.I.) de Nemours & Co., 8.125%, 3/15/2004 992,100
---------------------------------------------------- -----------
RETAIL--0.8%
----------------------------------------------------
750,000 Wal-Mart Stores, Inc., 6.75%, 10/15/2023 611,160
---------------------------------------------------- -----------
TELEPHONES--1.3%
----------------------------------------------------
1,000,000 New England Telephone & Telegraph Co., 6.25%,
12/15/97 968,430
---------------------------------------------------- -----------
TRANSPORTATION--3.3%
----------------------------------------------------
1,000,000 Norfolk Southern Corp., 7.75%, 8/15/2006 958,670
----------------------------------------------------
1,500,000 Union Pacific Corp., 6.44%, 1/15/98 1,451,085
---------------------------------------------------- -----------
Total 2,409,755
---------------------------------------------------- -----------
UTILITIES--4.0%
----------------------------------------------------
700,000 Baltimore Gas & Electric Co., 5.50%, 7/15/2000 621,005
----------------------------------------------------
2,000,000 Baltimore Gas & Electric Co., 5.85%, 7/19/2000 1,797,480
----------------------------------------------------
500,000 Southern Co., 10.00%, 7/15/96 525,225
---------------------------------------------------- -----------
Total 2,943,710
---------------------------------------------------- -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST $31,722,811) 30,756,564
---------------------------------------------------- -----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--14.7%
- ----------------------------------------------------------------
$1,871,566 7.00%, 8/15/2008 $ 1,773,290
----------------------------------------------------
2,500,000 8.50%, 10/15/2009 2,549,219
----------------------------------------------------
248,856 9.50%, 9/15/2019 260,286
----------------------------------------------------
1,489,877 9.50%, 4/15/2020 1,558,308
----------------------------------------------------
1,056,443 8.00%, 5/15/2022 1,013,509
----------------------------------------------------
2,500,000 9.50%, 1/1/2024 2,613,250
----------------------------------------------------
1,005,553 8.50%, 8/15/2024 992,974
---------------------------------------------------- -----------
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(IDENTIFIED COST $10,848,157) 10,760,836
---------------------------------------------------- -----------
U.S. TREASURY BONDS--7.4%
- ----------------------------------------------------------------
1,500,000 7.25%, 5/15/2016 1,372,905
----------------------------------------------------
1,000,000 7.875%, 2/15/2021 974,780
----------------------------------------------------
1,000,000 8.00%, 11/15/2021 990,370
----------------------------------------------------
2,600,000 6.25%, 8/15/2023 2,080,988
---------------------------------------------------- -----------
TOTAL U.S. TREASURY BONDS (IDENTIFIED COST
$5,654,065) 5,419,043
---------------------------------------------------- -----------
U.S. TREASURY NOTES--28.9%
- ----------------------------------------------------------------
1,000,000 7.75%, 2/15/95 1,006,820
----------------------------------------------------
1,000,000 3.875%, 10/31/95 978,200
----------------------------------------------------
1,000,000 7.50%, 1/31/96 1,013,260
----------------------------------------------------
800,000 8.00%, 10/15/96 817,728
----------------------------------------------------
2,000,000 4.375%, 11/15/96 1,908,660
----------------------------------------------------
1,000,000 6.50%, 11/30/96 993,670
----------------------------------------------------
1,500,000 4.75%, 2/15/97 1,432,065
----------------------------------------------------
500,000 6.75%, 2/28/97 498,195
----------------------------------------------------
1,000,000 5.50%, 7/31/97 962,610
----------------------------------------------------
2,000,000 6.50%, 8/15/97 1,973,300
----------------------------------------------------
1,000,000 8.125%, 2/15/98 1,027,250
----------------------------------------------------
1,000,000 7.125%, 10/15/98 993,910
----------------------------------------------------
1,750,000 5.00%, 1/31/99 1,600,305
----------------------------------------------------
1,000,000 7.00%, 4/15/99 984,900
----------------------------------------------------
$1,000,000 8.00%, 8/15/99 $ 1,022,770
----------------------------------------------------
1,000,000 5.50%, 4/15/2000 912,050
----------------------------------------------------
1,000,000 8.00%, 5/15/2001 1,020,970
----------------------------------------------------
200,000 6.25%, 2/15/2003 182,056
----------------------------------------------------
2,000,000 7.25%, 8/15/2004 1,925,660
---------------------------------------------------- -----------
TOTAL U.S. TREASURY NOTES (IDENTIFIED COST
$21,632,474) 21,254,379
---------------------------------------------------- -----------
U.S. TREASURY STRIPS--10.9%
- ----------------------------------------------------------------
3,100,000 0.00%, 2/15/96 2,858,789
----------------------------------------------------
1,690,000 0.00%, 8/15/96 1,504,809
----------------------------------------------------
2,260,000 0.00%, 2/15/97 1,933,724
----------------------------------------------------
1,800,000 0.00%, 2/15/2004 870,786
----------------------------------------------------
2,310,000 0.00%, 2/15/2007 862,993
---------------------------------------------------- -----------
TOTAL U.S. TREASURY STRIPS (IDENTIFIED COST
$8,293,038) 8,031,101
---------------------------------------------------- -----------
TOTAL LONG-TERM INVESTMENTS (IDENTIFIED COST
$78,150,545) 76,221,923
---------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $83,906,280) $81,977,658+
---------------------------------------------------- -----------
</TABLE>
+ The cost of investments for federal tax purposes amounts to $83,906,280. The
net unrealized depreciation of investments on a federal tax basis amounts to
$1,928,622, which is comprised of $13,024 appreciation and $1,941,646
depreciation at October 31, 1994.
Note:The categories of investments are shown as a percentage of net assets
($73,519,138) at October 31, 1994.
The following abbreviation is used in this portfolio:
STRIPs--Separate Trading of Registered Interest & Principal of Securities
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY OBLIGATIONS STOCK BOND
MONEY MARKET FUND FUND FUND
-------------------- ------------ -----------
<S> <C> <C> <C>
ASSETS:
- ---------------------------
Investments in repurchase
agreements $125,799,000 $ -- $ --
- ---------------------------
Investments in securities 153,702,336 119,285,657 81,977,658
- --------------------------- ------------ ------------ -----------
Total investments, at 279,501,336 119,285,657 81,977,658
amortized cost and value ------------ ------------ -----------
- ---------------------------
Income receivable 228,419 184,104 1,016,038
- ---------------------------
Receivable for Fund shares
sold -- 1,628 97,098
- ---------------------------
Deferred expenses 53,187 18,356 17,262
- --------------------------- ------------ ------------ -----------
Total assets 279,782,942 119,489,745 83,108,056
- --------------------------- ------------ ------------ -----------
LIABILITIES:
- ---------------------------
Payable for Fund shares
redeemed -- 491,249 4,407,481
- ---------------------------
Payable for investments
purchased -- 591,984 5,177,083
- ---------------------------
Dividends payable 915,763 -- --
- ---------------------------
Accrued expenses 35,466 10,206 4,354
- --------------------------- ------------ ------------ -----------
Total liabilities 951,229 1,093,439 9,588,918
- --------------------------- ------------ ------------ -----------
Total Net Assets $278,831,713 $118,396,306 $73,519,138
- --------------------------- ------------ ------------ -----------
NET ASSETS CONSIST OF:
- ---------------------------
Paid-in capital $278,831,713 $114,902,068 $75,663,199
- ---------------------------
Net unrealized appreciation
(depreciation) of
investments -- 3,842,101 (1,928,622)
- ---------------------------
Accumulated undistributed
net realized gain (loss) on
investments -- (493,171) (247,249)
- ---------------------------
Undistributed net -- 145,308 31,810
investment income ------------ ------------ -----------
- ---------------------------
Total Net Assets $278,831,713 $118,396,306 $73,519,138
- --------------------------- ------------ ------------ -----------
Shares Outstanding 278,831,713 11,284,294 7,586,616
- --------------------------- ------------ ------------ -----------
Net Asset Value Per Share:
(Net Assets / Shares
Outstanding) $ 1.00 $ 10.49 $ 9.69
- --------------------------- ------------ ------------ -----------
Offering Price Per Share:* $ -- $ 10.98** $ 10.09***
- --------------------------- ------------ ------------ -----------
Redemption Proceeds Per $ -- $ 10.39+ $ 9.59+
Share: ------------ ------------ -----------
- ---------------------------
Investments, at identified
cost $ -- $115,443,556 $83,906,280
- --------------------------- ------------ ------------ -----------
</TABLE>
* See "How to Purchase, Exchange, and Redeem Shares" in the prospectus.
** Computation of offering price: 100/95.5 of net asset value.
*** Computation of offering price: 100/96 of net asset value.
+ Computation of redemption proceeds: 99/100 of net asset value.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1994
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY OBLIGATIONS STOCK BOND
MONEY MARKET FUND FUND FUND
-------------------- ---------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------
Interest income $5,405,833 $ 32,529 $1,337,343
- --------------------------------
Dividend income -- 583,759 --
- -------------------------------- ---------- ---------- -----------
Total income 5,405,833 616,288 1,337,343
- -------------------------------- ---------- ---------- -----------
Expenses:
- --------------------------------
Investment advisory fee 631,484 189,529 118,336
- --------------------------------
Trustees' fees 9,492 1,135 918
- --------------------------------
Administrative personnel and
services fees 181,431 34,858 28,718
- --------------------------------
Custodian fees 20,840 11,166 9,781
- --------------------------------
Transfer and dividend disbursing
agent fees and expenses 13,941 12,465 11,065
- --------------------------------
Fund share registration fees 13,033 13,566 10,721
- --------------------------------
Auditing fees 5,331 2,850 3,238
- --------------------------------
Legal fees 13,971 2,721 2,008
- --------------------------------
Printing and postage 5,216 5,428 4,718
- --------------------------------
Portfolio accounting fees 21,235 21,498 22,098
- --------------------------------
Insurance premiums 6,184 2,133 1,779
- --------------------------------
Miscellaneous 9,006 1,113 1,198
- -------------------------------- ---------- ---------- -----------
Total expenses 931,164 298,462 214,578
- -------------------------------- ---------- ---------- -----------
Deduct--
- --------------------------------
Waiver of investment advisory
fee 378,890 143,313 86,111
- --------------------------------
Waiver of administrative 37,904 -- --
personnel and services fees ---------- ---------- -----------
- --------------------------------
Net expenses 514,370 155,149 128,467
- -------------------------------- ---------- ---------- -----------
Net investment income 4,891,463 461,139 1,208,876
- -------------------------------- ---------- ---------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
- --------------------------------
Net realized gain (loss) on
investments (identified cost
basis) -- (246,612) (247,348)
- --------------------------------
Net change in unrealized
appreciation (depreciation) of
investments -- 3,940,123 (1,159,345)
- -------------------------------- ---------- ---------- -----------
Net realized and unrealized
gain (loss) on investments -- 3,693,511 (1,406,693)
- -------------------------------- ---------- ---------- -----------
Change in net assets
resulting from operations $4,891,463 $4,154,650 ($ 197,817)
- -------------------------------- ---------- ---------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY OBLIGATIONS STOCK BOND
MONEY MARKET FUND FUND FUND
---------------------------- ------------------------- ------------------------
YEAR ENDED APRIL 30, YEAR ENDED APRIL 30, YEAR ENDED APRIL 30,
---------------------------- ------------------------- ------------------------
1995* 1994 1995* 1994 1995* 1994
- ------------------------ ------------- ------------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
- ------------------------
OPERATIONS--
- ------------------------
Net investment income $ 4,891,463 $ 7,076,668 $ 461,139 $ 650,701 $ 1,208,876 $ 1,762,775
- ------------------------
Net realized gain (loss)
on investments -- -- (246,612) 173,268 (247,348) 23,027
- ------------------------
Net change in unrealized
appreciation
(depreciation)
of investments -- -- 3,940,123 (1,304,643) (1,159,345) (1,952,481)
- ------------------------ ------------- ------------- ------------ ----------- ----------- -----------
Change in net assets
resulting from
operations 4,891,463 7,076,668 4,154,650 (480,674) (197,817) (166,679)
- ------------------------ ------------- ------------- ------------ ----------- ----------- -----------
DISTRIBUTIONS TO
SHAREHOLDERS--
- ------------------------
Dividends to
shareholders from net
investment income (4,891,463) (7,076,668) (330,917) (654,641) (1,208,681) (1,818,557)
- ------------------------
Distributions to
shareholders from net
realized gain on
investment transactions -- -- -- -- -- (184,224)
- ------------------------ ------------- ------------- ------------ ----------- ----------- -----------
Change in net assets
from distributions to
shareholders (4,891,463) (7,076,668) (330,917) (654,641) (1,208,681) (2,002,781)
- ------------------------ ------------- ------------- ------------ ----------- ----------- -----------
FUND SHARE (PRINCIPAL)
TRANSACTIONS--
- ------------------------
Proceeds from sale of
shares 513,029,127 560,051,555 80,628,097 11,512,558 49,025,940 11,400,885
- ------------------------
Net asset value of
shares issued to
shareholders in payment
of dividends declared 17,510 24,997 38,935 93,861 22,534 118,424
- ------------------------
Cost of shares redeemed (513,139,179) (475,923,119) (3,208,531) (4,291,790) (6,890,231) (2,571,009)
- ------------------------ ------------- ------------- ------------ ----------- ----------- -----------
Change in net assets
from Fund share
transactions (92,542) 84,153,433 77,458,501 7,314,629 42,158,243 8,948,300
- ------------------------ ------------- ------------- ------------ ----------- ----------- -----------
Change in net assets (92,542) 84,153,433 81,282,234 6,179,314 40,751,745 6,778,840
- ------------------------
NET ASSETS:
- ------------------------
Beginning of period 278,924,255 194,770,822 37,114,072 30,934,758 32,767,393 25,988,553
- ------------------------ ------------- ------------- ------------ ----------- ----------- -----------
End of period $ 278,831,713 $ 278,924,255 $118,396,306 $37,114,072 $73,519,138 $32,767,393
- ------------------------ ------------- ------------- ------------ ----------- ----------- -----------
Undistributed net
investment income $ -- $ -- $ 145,308 $ 15,086 $ 31,810 $ 31,615
- ------------------------ ------------- ------------- ------------ ----------- ----------- -----------
</TABLE>
*Six months ended October 31, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
TREASURY OBLIGATIONS
MONEY MARKET FUND STOCK FUND
------------------------------- ------------------------------
YEAR ENDED APRIL 30, YEAR ENDED APRIL 30,
------------------------------- ------------------------------
1995* 1994 1993** 1995* 1994 1993**
- ------------------------ -------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $10.08 $10.36 $10.00
- ------------------------
Income from investment
operations
- ------------------------
Net investment income 0.02 0.03 0.03 0.10 0.19 0.19
- ------------------------
Net realized and
unrealized gain (loss)
on investments -- -- -- 0.40 (0.28) 0.35
- ------------------------ -------- -------- -------- -------- ------- -------
Total from investment
operations 0.02 0.03 0.03 0.50 (0.09) 0.54
- ------------------------ -------- -------- -------- -------- ------- -------
LESS DISTRIBUTIONS
- ------------------------
Dividends to
shareholders from net
investment income (0.02) (0.03) (0.03) (0.09) (0.19) (0.18)
- ------------------------ -------- -------- -------- -------- ------- -------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $10.49 $10.08 $10.36
- ------------------------ -------- -------- -------- -------- ------- -------
TOTAL RETURN*** 1.96% 2.83% 2.93% 4.97% (0.90%) 5.54%
- ------------------------
RATIOS TO AVERAGE NET
ASSETS
- ------------------------
Expenses 0.41%(b) 0.40% 0.39%(b) 0.61%(b) 0.48% 0.39%(b)
- ------------------------
Net investment income 3.87%(b) 2.81% 2.93%(b) 1.82%(b) 1.82% 1.91%(b)
- ------------------------
Expense
waiver/reimbursement (a) 0.33%(b) 0.33% 0.36%(b) 0.57%(b) 0.69% 0.74%(b)
- ------------------------
SUPPLEMENTAL DATA
- ------------------------
Net assets, end of
period (000 omitted) $278,832 $278,924 $194,771 $118,396 $37,114 $30,935
- ------------------------
Portfolio turnover rate -- -- -- 37% 46% 34%
- ------------------------
</TABLE>
* Six months ended October 31, 1994 (unaudited).
** Reflects operations for the period from May 8, 1992 (date of initial public
investment) to April 30, 1993.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
BOND FUND
----------------------------
YEAR ENDED APRIL 30,
----------------------------
1995* 1994 1993**
- ------------------------------------------- ------- ------- -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.04 $10.71 $10.00
- -------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------
Net investment income 0.30 0.63 0.66
- -------------------------------------------
Net realized and unrealized gain (loss) on
investments (0.35) (0.58) 0.69
- ------------------------------------------- ------- ------- -------
Total from investment operations (0.05) 0.05 1.35
- ------------------------------------------- ------- ------- -------
LESS DISTRIBUTIONS
- -------------------------------------------
Dividends to shareholders from net
investment income (0.30) (0.65) (0.62)
- -------------------------------------------
Distributions to shareholders from net
realized gain on investment transactions -- (0.07) (0.02)
- ------------------------------------------- ------- ------- -------
Total distributions (0.30) (0.72) (0.64)
- ------------------------------------------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 9.69 $10.04 $10.71
- ------------------------------------------- ------- ------- -------
TOTAL RETURN*** (0.49%) 0.33% 13.44%
- -------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------
Expenses 0.65%(b) 0.51% 0.39%(b)
- -------------------------------------------
Net investment income 6.13%(b) 5.97% 6.53%(b)
- -------------------------------------------
Expense waiver/reimbursement (a) 0.44%(b) 0.58% 0.59%(b)
- -------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------
Net assets, end of period (000 omitted) $73,519 $32,767 $25,989
- -------------------------------------------
Portfolio turnover rate 24% 6% 19%
- -------------------------------------------
</TABLE>
* Six months ended October 31, 1994 (unaudited).
** Reflects operations for the period from May 8, 1992 (date of initial public
investment) to April 30, 1993.
*** Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(a) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(b) Computed on an annualized basis.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1994
(UNAUDITED)
- -------------------------------------------------------------------------------
(1) ORGANIZATION
SouthTrust Vulcan Funds (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Company consists of three diversified portfolios:
Treasury Obligations Money Market Fund ("Treasury Obligations"), Stock Fund
("Stock"), and Bond Fund ("Bond") (individually referred to as a "Fund," or
collectively as the "Funds"). 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 Company in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--Listed equity securities, corporate bonds and other
fixed income and asset-backed securities are valued at the last sale price
reported on national securities exchanges. U.S. government securities are
generally valued at the mean between the over-the-counter bid and asked
prices as furnished by an independent pricing service. Securities with re-
maining maturities of sixty days or less may be valued at amortized cost,
which approximates value. The Company's use of the amortized cost method to
value its securities is in accordance with Rule 2a-7 under the Act. Invest-
ments in other regulated investment companies are valued at net asset val-
ue.
B. REPURCHASE AGREEMENTS--It is the policy of the Company to require the cus-
todian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System, or to have segregated within the custodian
bank's vault, all securities held as collateral in support of repurchase
agreement investments. Additionally, procedures have been established by
the Company to monitor, on a daily basis, the market value of each repur-
chase agreement's underlying collateral to ensure that the value of collat-
eral at least equals the principal amount of the repurchase agreement, in-
cluding accrued interest.
The Company will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Company's adviser to be creditworthy pursuant to guidelines estab-
lished by the Board of Trustees (the "Trustees"). Risks may arise from the
potential inability of counterparties to honor the terms of the repurchase
agreement. Accordingly, the Company could receive less than the repurchase
price on the sale of collateral securities.
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and distri-
butions to shareholders are recorded on the ex-dividend date. Interest in-
come and expenses are accrued daily. Bond premium and discount, if applica-
ble, are amortized as required by the Internal Revenue Code, as amended
(the "Code").
D. FEDERAL TAXES--It is the Company'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 pro-
visions for federal tax are necessary.
At April 30, 1994, the Stock Fund, for federal tax purposes, had a capital
loss carryforward of $156,224, 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 as follows:
<TABLE>
<CAPTION>
EXPIRATION YEAR EXPIRATION AMOUNT
--------------- -----------------
<S> <C>
2001 $112,348
2002 $ 43,876
</TABLE>
Additionally, net capital losses of $87,867 attributable to security
transactions incurred after October 31, 1993, are treated as arising on the
first day of the Fund's next taxable year.
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Company may engage in
when-issued or delayed delivery transactions. The Company records when-is-
sued securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securi-
ties purchased. Securities purchased on a when-issued or delayed delivery
basis are marked to market daily and begin earning interest on the settle-
ment date.
F. DEFERRED EXPENSES--The costs incurred by the Company with respect to regis-
tration of its shares in its first fiscal year, excluding the initial ex-
pense of registering the shares, have been deferred and are being amortized
using the straight-line method not to exceed a period of five years from the
Company's commencement date.
G. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Master Trust Agreement permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (par value of $0.001). Trans-
actions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
----------------------------------------------------------------------
1995* 1994
---------------------------------- ----------------------------------
TREASURY TREASURY
OBLIGATIONS STOCK BOND OBLIGATIONS STOCK BOND
- ----------------------- ------------ --------- --------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 513,029,127 7,911,670 5,023,542 560,051,555 1,160,044 1,125,524
- -----------------------
Shares issued to
shareholders in payment
of dividends declared 17,510 3,836 2,279 24,997 8,999 11,129
- -----------------------
Shares redeemed (513,139,179) (312,075) (704,162) (475,923,119) (474,016) (298,375)
- ----------------------- ------------ --------- --------- ------------ --------- ---------
Net change resulting
from Fund share
transactions (92,542) 7,603,431 4,321,659 84,153,433 695,027 838,278
- ----------------------- ------------ --------- --------- ------------ --------- ---------
</TABLE>
*Six months ended October 31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Southtrust Bank of Alabama, N.A., the Company's
investment adviser ("Adviser"), receives for its services an annual investment
advisory fee based on a percentage of each Fund's average daily net assets
(see below). The Adviser may voluntarily choose to waive all or a portion of
its fee. The Adviser can modify or terminate this voluntary waiver at any time
at its sole discretion.
<TABLE>
<CAPTION>
ANNUAL
FUND RATE
- -------------------- ------
<S> <C>
Treasury Obligations 0.50%
- --------------------
Stock 0.75%
- --------------------
Bond 0.60%
- --------------------
</TABLE>
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the
Company with certain administrative personnel and services. The FAS fee is
based on the level of average aggregate net assets of the Company for the
period. FAS may voluntarily choose to waive a portion of its fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Company.
The FServ fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--Fserv also maintains the Company's accounting
records. The fee is based on the level of each Fund's average net assets for
the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by
Adviser. The Company has agreed to reimburse Adviser for the organizational
expenses borne by Adviser during the five year period following the date the
Funds first became effective. For the period ended October 31, 1994, the
following amounts were paid to the Adviser pursuant to this agreement:
<TABLE>
<CAPTION>
ORGANIZATIONAL ORGANIZATIONAL
FUND EXPENSES EXPENSES PAID
- -------------------- -------------- --------------
<S> <C> <C>
Treasury Obligations $25,255 $2,489
- --------------------
Stock 5,959 624
- --------------------
Bond 5,579 558
- --------------------
</TABLE>
INTERFUND TRANSACTIONS--During the six months ended October 31, 1994, Stock
and Bond engaged in purchase transactions at current market value with other
funds pursuant to Rule 17a-7 under the Act amounting to $75,902,883 and
$44,643,638, respectively.
Certain of the Officers of the Company are Officers and Trustees or Directors
of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1994, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
STOCK $89,074,116 $17,523,490
- ----- ----------- -----------
BOND $54,277,599 $ 9,000,953
- ----- ----------- -----------
</TABLE>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
Charles G. Brown, III William O. Vann
Russell W. Chambliss Chairman
Thomas L. Merrill, Sr. Thomas L. Merrill, Sr.
D. Riley Stuart Vice Chairman
William O. Vann Edward C. Gonzales
President and Treasurer
Margaret P. Tessaro
Vice President and Assistant Treasurer
Peter J. Germain
Secretary
Mark A. Sheehan
Assistant Secretary
*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. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance
that they will be able to do so.
*This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Company's prospectus, which contains facts
concerning the Funds'objectives and policies, management fees, expenses and
other information.
