[SOUTHTRUST VULCAN FUNDS LOGO]
TREASURY OBLIGATIONS
MONEY MARKET FUND
BOND FUND
STOCK FUND
INCOME FUND
ANNUAL REPORT
DATED APRIL 30, 1996
PRESIDENT'S MESSAGE
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- ----
Dear Investor:
I am pleased to present the Annual Report of the SouthTrust Vulcan Funds
for
the 12-month period from May 1, 1995 through April 30, 1996. This report
begins with an Investment Review of the economy and developments in the
financial markets over the period. Next, you'll find a series of graphs,
the
Portfolio of Investments and Financial Statements for the SouthTrust Vulcan
Treasury Obligations Money Market Fund, the Vulcan Bond Fund, and the
Vulcan
Stock Fund. We also report on the newest member of the SouthTrust Vulcan
Funds, the Vulcan Income Fund.
Please note the following highlights for each fund over the 12-month
reporting
period.
SOUTHTRUST VULCAN TREASURY OBLIGATIONS MONEY MARKET FUND
This portfolio of U.S. Treasury money market securities paid a total of
$0.05
per share in dividends on shareholders' ready cash. Total net assets in the
fund rose by more than $100 million to reach $445.7 million at the end of
the
period.*
SOUTHTRUST VULCAN BOND FUND
This fund's diversified portfolio of corporate and government bonds paid a
good dividend stream that totaled $0.56 per share. Its net asset value rose
from $9.95 on the first day of the period to $10.01 on the last day of the
period. The fund achieved a total return of 6.78% for the year ended April
30,
1996 (3.05% taking into account the fund's sales charge). Total net assets
in
the fund stood at $83.2 million at the end of the period.**
SOUTHTRUST VULCAN STOCK FUND
In a very strong environment for stocks, the Vulcan Stock Fund delivered
extremely strong performance. The fund's diversified portfolio of high-
quality
stocks delivered a total return of 31.51% for year ended April 30, 1996
(26.88% taking into account the fund's sales charge). Its net asset value
increased by 25% to reach $14.40 on the last day of the period. The fund
paid
$0.23 per share in dividends and $0.44 in capital gains. Total net assets
reached $204.4 million.**
SOUTHTRUST VULCAN INCOME FUND
Beginning operation on January 10, 1996, the Vulcan Income Fund is the
newest
addition to the Vulcan family. It invests in a diversified portfolio of
income-producing investments that, in its initial four months of operation,
paid dividends totaling $0.14 per share. Its net asset value ended the
period
at $9.77. The fund achieved a total return of (0.93%) for the period from
January 10, 1996 (date of initial public investment) to April 30, 1996
[(4.37%) taking into account the fund's sales charge]. Total net assets in
the
fund stood at $78.1 million at the end of the period.**
We hope you are pleased with your investment in the SouthTrust Vulcan
Funds.
We'll keep you up-to-date on your progress with the highest quality of
service.
Sincerely,
[LOGO]
Edward C. Gonzales
President
June 17, 1996
* Although money market funds seek to maintain a stable net asset value of
$1.00 per share, there is no assurance they will be able to do so. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
** Performance quoted reflects past performance and is not indicative of
future results. 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.
INVESTMENT REVIEW
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The investment markets have an amazing way of doing what is least expected.
Entering 1996, one of the most commonly accepted themes was that the
Federal
Reserve Board ("Fed") would cut the Fed funds and discount rates several
more
times, pushing short-term interest rates lower. Sluggish economic growth
and
few signs of inflationary pressures were expected to allow long-term
interest
rates to move lower as well. Instead, almost the exact opposite took place.
The February unemployment report, which showed dramatic job growth, shifted
perceptions rapidly. The bond market interpreted this data as clear
evidence
of surprising underlying strength in the U.S. economy, and sold off. Both
short and long-term interest rates moved higher, with most yields, other
than
those on very short-term obligations, having moved up by approximately 1%
since year-end 1995. These perceptions proved accurate, as the U.S. economy
expanded 2.8% in the first quarter, rebounding from only 0.5% growth in the
fourth quarter last year. While evidence mounted that the economy was
stronger
than expected, inflation remained well behaved. The Consumer Price Index
was
up only 2.9% year-over-year in April, while the core rate, excluding the
volatile food and energy components, rose just 2.7%.
While bonds have been a disappointment to investors so far in 1996, stocks
have surpassed the expectations of most investment professionals.
Strategists
were cautiously optimistic entering 1996, and few believed 1995's momentum
could be sustained. Given a forewarning of the increase in interest rates
during the first quarter, most would have expected a sharp correction for
stocks. Instead, stocks continued their strong performance despite higher
interest rates, increasingly negative earnings surprises, and slowing
earnings
growth. Our stock market outlook for 1996 said that equity return may well
depend upon how long individuals continue their active purchasing of mutual
funds. In the first quarter of 1996, investors poured an all-time record
$72
billion into equity mutual funds. The question now is whether individuals
have
enough liquidity remaining to continue their buying.
Where do we go from here? The economy appears to have bottomed in the
fourth
quarter of 1995, and we believe growth should remain solid throughout the
balance of this year. Growth of approximately 2% remains a realistic
forecast
for 1996. While few signs of inflationary pressures have been seen so far
in
1996, there is a growing realization among investors that declining
productivity gains and a small increase in wage growth will put some upward
pressure on inflation. We feel it will be difficult for inflation to
continue
the year-over-year declines seen so far in this decade. However, in our
estimation inflation should remain well under control with estimates of
around
3% being realistic for 1996.
The factors driving bond prices lower have probably not been economic, as
much
as excessive optimism by bond investors at year-end, and the unwinding of
the
arbitrage trade that had resulted in hedge funds borrowing in Japan to buy
U.S. Treasuries. The bond market now appears to be anticipating that the
Fed
will raise interest rates later in 1996, a move we do not believe will
happen.
With the real yield on long U.S. Treasury bonds now above 4%, bonds would
appear to represent an attractive alternative to stocks. The outperformance
of
stocks relative to bonds has been so significant that we believe that
stocks
should begin to find gains difficult unless interest rates reverse and move
lower.
In spite of the difficulties facing the investment markets, the environment
remains favorable for investors. Strength in the economy has been adequate
to
remove the risk of a recession in 1996. While economic growth has surprised
on
the upside, neither the consumer nor business capital spending is likely to
be
strong enough to result in anything other than moderate, non-inflationary
growth. Slow growth and modest inflation have historically been very
favorable
for both bond and stock investors. Despite consumers' active spending
patterns, their level of savings has been increasing and their investments
in
money market funds have been growing
rapidly. The powerful demographic story of aging baby boomers needing to
save
more and invest for their eventual retirements creates a powerful
investment
theme that should last well into the next century. Near-term, we believe
the
aging bull market provides plenty of reasons for concern. But, for now, the
bull market remains intact, and the long-term outlook is very positive.
We appreciate your continued confidence in allowing our experienced team to
guide your investments.
VULCAN BOND FUND
For the fiscal year ended April 30, 1996, the Vulcan Bond Fund realized a
total return on net asset value of 6.8%.* Conservative portfolio positions
resulted in the fund's performance being slightly below the total return of
8.6% for the Lehman Brothers Government/Corporate Index.**
We have recently started to extend the Fund's duration, as faster than
expected economic growth has driven inflation worries and moved rates
higher
in early 1996. We believe the market is currently overly concerned about
potential economic strength and consequently a resurgence of inflation. If
our
outlook is correct, bonds purchased at current yields will prove to be an
attractive investment. Our most recent portfolio focus has been on the
purchase of intermediate maturity obligations offering strong relative
value
and sector swaps to enhance the Fund's yield potential.
After experiencing strong year-end 1995 performance in the fixed income
markets, investors have suffered a major disappointment. Beginning in
February, investors shifted from a high level of confidence that the
Federal
Reserve would continue to ease monetary policy to a view that the Fed was
actually more likely to raise interest rates. The result of this
uncertainty
has been seen in longer-term interest rates rising sharply higher while
short-
term rates remained relatively stable, thereby steepening the yield curve.
In spite of our increased attraction to intermediate and long maturity
bonds,
we would not be surprised to see interest rates move higher between now and
mid-year. Unless something changes our view that the consumer is not in
position to sustain recent economic strength, we will use higher interest
rates as an opportunity to more aggressively extend the portfolio's
duration.
For now, we continue to emphasize high quality issues, and look for
attractive
extension trades while maintaining a duration neutral strategy.
VULCAN STOCK FUND
For the fiscal year ended April 30, 1996, the Vulcan Stock Fund generated a
total return of 31.51%.* This strong performance exceeded that of other
mutual
funds with similar objectives,*** and outperformed the total return of
30.21%
for the Standard & Poor's 500 Index (the "S&P 500").****
* Performance quoted is based on net asset value and represents past
performance. Performance is not indicative of future results.
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.
** Lehman Brothers Government/Corporate Total Index is an unmanaged index
comprised of approximately 5,000 issues which include non-convertible
bonds publicly issued by the U.S. government or its agencies;
corporate
bonds guaranteed by the U.S. government and quasi-federal
corporations;
and publicly issued, fixed-rate, non-convertible domestic bonds of
companies in industry, public utilities, and finance. Tracked by
Lehman
Brothers, the index has an average maturity of nine years. It
calculates
total returns for one month, three months, twelve months, and ten year
periods, and year-to-date. Investments may not be made in an index.
*** The total return for the average Lipper Growth Fund was 29.25% during
the
same period. Source: Lipper Analytical Services, Inc.
**** The S&P 500 is an unmanaged index of common stocks in industry,
finance,
public utilities and transportation. Actual investment may not be made
in
an index.
During the fiscal year, performance for the Vulcan Stock fund was aided by
a
moderate overweighting in the finance and technology sectors. In the
finance
sector, we increased our weighting in banks by adding to KeyCorp. We also
found attractive investment opportunities in the insurance industry and
purchased Old Republic International and Chubb Corporation. In the
technology
sector, we continue to find Hewlett Packard very attractive, and twice
increased our weighting during the fiscal year. We also established new
positions in IBM and Seagate Technology late in the fiscal year.
Portfolio weightings in the capital goods and consumer cyclical sectors
were
reduced during the fiscal year. Reductions followed stronger than expected
economic growth in the first quarter of 1996, which drove up the stock
prices
of most cyclical companies. This resulted in selected stocks becoming
overvalued based on our calculations, and we thus reduced exposure to the
auto/truck manufacturing and aerospace/defense industries.
The Vulcan Stock Fund also benefitted from the takeover of two of its
holdings. Loral Corporation was bought by Lockheed Martin, and Teledyne
Inc.
was purchased by Allegheny Ludlum Corporation. We began buying Teledyne in
February based on our analysis of the company's improving fundamentals and
attractive valuation. On April 1, 1996, Allegheny Ludlum Corporation made a
bid for the company, valued at a minimum of 25% above where the stock had
been
trading.
The Vulcan Stock Fund's disciplined search for undervalued growth companies
always weighs the downside risk versus upside potential. While our
disciplines
have resulted in a strong performance during the current bull market, they
also have inherent defense characteristics. Most recently, our analysis has
resulted in fewer purchase ideas and more defensive holdings appearing
attractive. We do not use stock market forecasts to drive our investments
or
make any conscious effort to build cash reserves. Our disciplined process
is
designed to guide our portfolio towards quality companies whose growth
prospects do not appear to be adequately reflected in their stock price.
Risk
versus reward analysis drives every decision.
VULCAN INCOME FUND
The Vulcan Income Fund was launched on January 10, 1996, near the end of
the
major bull market bond rally that started in late 1994. As the quarter
progressed, several events occurred which turned bond bulls into bears and
led
to a sharp increase in interest rates. The snap up in rates resulted in
negative returns for most notes and bonds (over one year maturity). The
Vulcan
Income Fund provided a total return of (0.93%) between its inception and
April
30, 1996.*
Employment growth showed dramatic strength in February with an unexpected
increase of 705,000 jobs being reported. This along with other signs of
economic strength caused investors to abandon any recessionary concerns and
expectations for further interest rate cuts by the Fed. The negative shift
in
bond market sentiment was further hurt by the end of any serious effort to
cut
the budget deficit and by anti-trade talk during the early stages of the
Presidential primary. The resulting increase in interest rates was further
exacerbated by leveraged hedge funds being forced to sell U.S. Treasury
Bonds
that had been purchased with funds borrowed in Japan. All but money market
interest rates have increased close to 1% from their lows, and the entire
yield curve as well as the three-month through five-year curve has
increased
sharply.
Purchases by the Fund have focused on short-term mortgage-backed securities
and asset-backed securities, helping to increase the Fund's income stream.
The
recent rise in rates has made the one to five year maturity sector that
this
fund targets much more attractive and allowed the yield of the fund to
increase.
* Performance quoted is based on net asset vlaue and represents past
performance. Performance is not indicative of future results.
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.
SOUTHTRUST VULCAN BOND FUND
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GROWTH OF $10,000 INVESTED IN SOUTHTRUST VULCAN BOND FUND
The graph below illustrates the hypothetical investment of $10,000 in
the
SouthTrust Vulcan Bond Fund from May 8, 1992, (start of performance) to
April
30, 1996, compared to the Lehman Brothers Intermediate
Government/Corporate
Index ("LBIG/C")+
See Appendix A.1
AVERAGE ANNUAL TOTAL RETURN** FOR THE PERIOD ENDED APRIL 30, 1996
1 YEAR 2.55%
START OF PERFORMANCE(MAY 8, 1992) 5.32%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT
OBLIGATIONS
OF OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
*Represents a hypothetical investment of $10,000 in the fund after
deducting
the maximum sales charge of 4.00% ($10,000 investment minus $400 sales
charge=$9,600). The fund's performance assumes the reinvestment of all
dividends and distributions. The LBIG/C has been adjusted to reflect
reinvestment of dividends on securities in the index.
**Total returns reflect all maximum applicable fees. On March 1, 1996, the
sales charge for SouthTrust Vulcan Bond Fund was lowered to 3.50%. The
total
returns and graph above are based on the original sales charge of 4.00%.
+The LBIG/C is not adjusted to reflect sales charges, expenses, or other
fees
that the SEC requires to be reflected in the Fund's performance.
SOUTHTRUST VULCAN STOCK FUND
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GROWTH OF $10,000 INVESTED IN SOUTHTRUST VULCAN STOCK FUND
The graph below illustrates the hypothetical investment of $10,000 in
the
SouthTrust Vulcan Stock Fund from May 8, 1992, (start of performance) to
April
30, 1996, compared to the Standard & Poors 500 Index ("S&P 500")+
SEE APPENDIX A.2
AVERAGE ANNUAL TOTAL RETURN** FOR THE PERIOD ENDED APRIL 30, 1996
1 YEAR 25.62%
START OF PERFORMANCE (MAY 8, 1992) 11.24%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT
OBLIGATIONS
OF OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
*Represents a hypothetical investment of $10,000 in the fund after
deducting
the original maximum sales charge of 4.50% ($10,000 investment minus $450
sales charge=$9,550). The fund's performance assumes the reinvestment of
all
dividends and distributions. The S&P 500 has been adjusted to reflect
reinvestment of dividends on securities in the index.
**Total returns reflect all maximum applicable fees. On March 1, 1996 the
sales charge for SouthTrust Vulcan Stock Fund was lowered to 3.50%. The
total
returns and graph above are based on the original sales charge of 4.50%.
Effective July 1, 1996, the sales charge for SouthTrust Vulcan Fund will
change to 4.50%.
+The S&P 500 is not adjusted to reflect sales charges, expenses, or other
fees that the SEC requires to be reflected in the fund's performance.
SOUTHTRUST VULCAN INCOME FUND
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GROWTH OF $10,000 INVESTED IN SOUTHTRUST VULCAN INCOME FUND
The graph below illustrates the hypothetical investment of $10,000 in
the
SouthTrust Vulcan Income Fund from January 10, 1996, (start of performance)
to
April 30, 1996, compared to the Merrill Lynch Corporate/Government 1-5
Year
Index ("MLC/G 1-5")+
SEE APPENDIX A.3
AVERAGE ANNUAL TOTAL RETURN** FOR THE PERIOD ENDED APRIL 30, 1996%
START OF PERFORMANCE (JANUARY 10, 1996)(CULULATIVE) (4.37%)
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY
MAY BE WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT
OBLIGATIONS
OF OR GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
*Represents a hypothetical investment of $10,000 in the fund after
deducting
the maximum sales charge of 3.50% ($10,000 investment minus $350 sales
charge=$9,650). The fund's performance assumes the reinvestment of all
dividends and distributions. The MLC/G 1-5 has been adjusted to reflect
reinvestment of dividends on securities in the index.
**Total return reflects all maximum applicable fees.
+The MLC/G 1-5 is not adjusted to reflect sales charges, expenses, or
other
fees that the SEC requires to be reflected in the fund's performance.
SOUTHTRUST VULCAN TREASURY OBLIGATIONS MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- ------------------------------------------------ -----------
- -
<S> <C> <C>
U.S. TREASURY BILLS--53.3%
- ---------------------------------------------------------------------------
- -
$20,000,000 5/2/1996 $
19,997,203
------------------------------------------------
20,000,000 5/16/1996
19,958,646
------------------------------------------------
15,000,000 5/30/1996
14,939,946
------------------------------------------------
15,000,000 6/6/1996
14,926,500
------------------------------------------------
10,000,000 6/13/1996
9,940,576
------------------------------------------------
15,000,000 6/20/1996
14,895,729
------------------------------------------------
15,000,000 7/5/1996
14,865,261
------------------------------------------------
10,000,000 7/11/1996
9,902,572
------------------------------------------------
15,000,000 7/25/1996
14,821,500
------------------------------------------------
10,000,000 8/8/1996
9,870,475
------------------------------------------------
15,000,000 8/15/1996
14,777,621
------------------------------------------------
15,000,000 8/22/1996
14,770,233
------------------------------------------------
15,000,000 9/5/1996
14,743,883
------------------------------------------------
25,000,000 9/19/1996
24,505,227
------------------------------------------------
15,000,000 10/3/1996
14,668,688
------------------------------------------------
10,000,000 10/10/1996
9,775,225
------------------------------------------------ -----------
- -
TOTAL U.S. TREASURY BILLS
237,359,285
------------------------------------------------ -----------
- -
(A) REPURCHASE AGREEMENTS--47.1%
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- -
25,000,000 Donaldson, Lufkin and Jenrette Securities Corp.,
5.30%, 5/1/1996
25,000,000
------------------------------------------------
50,000,000 Dresdner Securities (USA), Inc., 5.30%, 5/1/1996
50,000,000
------------------------------------------------
50,000,000 J.P. Morgan & Co., Inc., 5.30%, 5/1/1996
50,000,000
------------------------------------------------
50,000,000 Morgan Stanley Group, Inc., 5.30%, 5/1/1996
50,000,000
------------------------------------------------
35,015,000 Nikko Securities, 5.30%, 5/1/1996
35,015,000
------------------------------------------------ -----------
- -
TOTAL REPURCHASE AGREEMENTS
210,015,000
------------------------------------------------ -----------
- -
TOTAL INVESTMENTS, AT AMORTIZED COST (B)
$447,374,285
------------------------------------------------ -----------
- -
</TABLE>
(a) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($445,728,957) at April 30, 1996.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996
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- -----
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
---------- ---------------------------------------------------------------
- ----- -----------
<S> <C>
<C>
LONG-TERM INVESTMENTS--92.5%
- ---------------------------------------------------------------------------
- -------------------
CORPORATE BONDS--43.4%
- ---------------------------------------------------------------------------
- -------------------
BANKING--3.3%
---------------------------------------------------------------
- -----
$2,500,000 Bank of New York Co., Inc., 8.50%, 12/15/2004
$ 2,702,240
---------------------------------------------------------------
- ----- -----------
CONSUMER NON-DURABLES--3.0%
---------------------------------------------------------------
- -----
1,500,000 Philip Morris Cos., Inc., 7.125%, 10/1/2004
1,476,306
---------------------------------------------------------------
- -----
1,000,000 Philip Morris Cos., Inc., 7.125%, 12/1/1999
1,008,154
---------------------------------------------------------------
- ----- -----------
Total
2,484,460
---------------------------------------------------------------
- ----- -----------
CONSUMER SERVICES--2.3%
---------------------------------------------------------------
- -----
2,000,000 Gannett Co., Inc., 5.85%, 5/1/2000
1,937,596
---------------------------------------------------------------
- ----- -----------
ELECTRONIC TECHNOLOGY--2.6%
---------------------------------------------------------------
- -----
2,300,000 Motorola, Inc., 6.50%, 3/1/2008
2,184,975
---------------------------------------------------------------
- ----- -----------
FINANCE--20.1%
---------------------------------------------------------------
- -----
2,000,000 Associates Corp. of North America, 6.00%, 6/15/2000
1,945,176
---------------------------------------------------------------
- -----
2,000,000 Equifax, Inc., 6.50%, 6/15/2003
1,914,522
---------------------------------------------------------------
- -----
2,500,000 Ford Motor Credit Corp., 7.75%, 10/1/1999
2,580,227
---------------------------------------------------------------
- -----
3,000,000 General Motors Acceptance Corp., 6.65%, 11/15/2005
2,854,140
---------------------------------------------------------------
- -----
3,500,000 Northern Trust Corp., 6.70%, 9/15/2005
3,372,582
---------------------------------------------------------------
- -----
1,500,000 Prudential Home Mortgage Securities, 7.05%, 3/25/2008
1,477,094
---------------------------------------------------------------
- -----
2,500,000 Standard Credit Card Master Trust, 7.875%, 11/7/1998
2,582,722
---------------------------------------------------------------
- ----- -----------
Total
16,726,463
---------------------------------------------------------------
- ----- -----------
HEALTHCARE--2.1%
---------------------------------------------------------------
- -----
1,000,000 Johnson & Johnson, 8.00%, 9/1/1998
1,007,401
---------------------------------------------------------------
- -----
750,000 Merck & Co., Inc., 6.00%, 1/15/1997
751,821
---------------------------------------------------------------
- ----- -----------
Total
1,759,222
---------------------------------------------------------------
- ----- -----------
RAW MATERIALS--1.3%
---------------------------------------------------------------
- -----
1,000,000 du Pont (E.I.) de Nemours & Co., 8.125%, 3/15/2004
1,072,034
---------------------------------------------------------------
- ----- -----------
</TABLE>
SOUTHTRUST VULCAN BOND FUND
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
---------- ---------------------------------------------------------------
- ----- -----------
<S> <C>
<C>
LONG-TERM INVESTMENTS--CONTINUED
- ---------------------------------------------------------------------------
- -------------------
CORPORATE BONDS--CONTINUED
- ---------------------------------------------------------------------------
- -------------------
RETAIL TRADE--3.8%
---------------------------------------------------------------
- -----
$3,500,000 Wal-Mart Stores, Inc., 5.875%, 10/15/2005
$ 3,202,973
---------------------------------------------------------------
- ----- -----------
TELECOMMUNICATIONS--1.2%
---------------------------------------------------------------
- -----
1,000,000 New England Telephone & Telegraph Co., 6.25%, 12/15/1997
999,696
---------------------------------------------------------------
- ----- -----------
TRANSPORTATION--3.1%
---------------------------------------------------------------
- -----
1,000,000 Norfolk Southern Corp., 7.75%, 8/15/2006
1,049,311
---------------------------------------------------------------
- -----
1,500,000 Union Pacific Railroad Co., 6.44%, 1/15/1998
1,503,249
---------------------------------------------------------------
- ----- -----------
Total
2,552,560
---------------------------------------------------------------
- ----- -----------
UTILITIES--0.6%
---------------------------------------------------------------
- -----
500,000 Southern Railway Co., 10.00%, 7/15/1996
504,109
---------------------------------------------------------------
- ----- -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST $35,435,500)
36,126,328
---------------------------------------------------------------
- ----- -----------
GOVERNMENT AGENCIES--24.7%
- ---------------------------------------------------------------------------
- -------------------
FEDERAL HOME LOAN MORTGAGE CORP.--3.5%
---------------------------------------------------------------
- -----
3,000,000 7.41%, 8/3/2005
2,961,576
---------------------------------------------------------------
- ----- -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--6.9%
---------------------------------------------------------------
- -----
1,075,000 REMIC, 7.50%, 11/25/2004
1,087,029
---------------------------------------------------------------
- -----
2,500,000 8.25%, 10/12/2004
2,563,392
---------------------------------------------------------------
- -----
1,874,443 10.00%, 1/1/2020
2,058,373
---------------------------------------------------------------
- ----- -----------
Total
5,708,794
---------------------------------------------------------------
- ----- -----------
UNASSIGNED--3.5%
---------------------------------------------------------------
- -----
3,000,000 Resolution Trust Corp., 7.50%, 10/25/2028
2,927,820
---------------------------------------------------------------
- ----- -----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--10.8%
---------------------------------------------------------------
- -----
1,557,550 7.00%, 8/15/2008
1,549,762
---------------------------------------------------------------
- -----
842,991 8.00%, 5/15/2022
854,581
---------------------------------------------------------------
- -----
2,085,004 8.50%, 10/15/2009
2,169,707
---------------------------------------------------------------
- -----
993,464 8.50%, 8/15/2024
1,026,683
---------------------------------------------------------------
- -----
181,550 9.50%, 9/15/2019
194,656
---------------------------------------------------------------
- -----
1,055,472 9.50%, 4/15/2020
1,131,663
---------------------------------------------------------------
- -----
</TABLE>
SOUTHTRUST VULCAN BOND FUND
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- --------------------------------------------------- ---------
- --
<S> <C> <C>
LONG-TERM INVESTMENTS--CONTINUED
- ---------------------------------------------------------------------------
- --
GOVERNMENT AGENCIES--CONTINUED
- ---------------------------------------------------------------------------
- --
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--CONTINUED
---------------------------------------------------
$1,922,775 9.50%, 11/15/2024 $
2,061,575
--------------------------------------------------- ---------
- --
Total
8,988,627
--------------------------------------------------- ---------
- --
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST
$20,288,325)
20,586,817
--------------------------------------------------- ---------
- --
U.S. TREASURY--24.4%
- ---------------------------------------------------------------------------
- --
TREASURY SECURITIES--5.7%
---------------------------------------------------
2,900,000 STRIP, 5/15/2006
1,470,596
---------------------------------------------------
8,050,000 STRIP, 5/15/2009
3,251,234
--------------------------------------------------- ---------
- --
Total
4,721,830
--------------------------------------------------- ---------
- --
TREASURY BONDS--7.6%
---------------------------------------------------
3,500,000 6.00%, 2/15/2026
3,112,813
---------------------------------------------------
1,000,000 7.25%, 5/15/2016
1,019,375
---------------------------------------------------
1,000,000 7.875%, 2/15/2021
1,090,000
---------------------------------------------------
1,000,000 8.00%, 11/15/2021
1,105,625
--------------------------------------------------- ---------
- --
Total
6,327,813
--------------------------------------------------- ---------
- --
TREASURY NOTES--11.1%
---------------------------------------------------
2,000,000 6.50%, 8/15/1997
2,016,250
---------------------------------------------------
1,000,000 7.00%, 4/15/1999
1,020,625
---------------------------------------------------
1,000,000 7.125%, 10/15/1998
1,022,500
---------------------------------------------------
2,000,000 7.25%, 8/15/2004
2,071,872
---------------------------------------------------
1,000,000 8.00%, 8/15/1999
1,050,000
---------------------------------------------------
1,000,000 8.00%, 5/15/2001
1,067,500
---------------------------------------------------
1,000,000 8.125%, 2/15/1998
1,035,311
--------------------------------------------------- ---------
- --
Total
9,284,058
--------------------------------------------------- ---------
- --
TOTAL U.S. TREASURY (IDENTIFIED COST $20,465,369)
20,333,701
--------------------------------------------------- ---------
- --
TOTAL LONG-TERM INVESTMENTS (IDENTIFIED COST
$76,189,194)
77,046,846
--------------------------------------------------- ---------
- --
</TABLE>
SOUTHTRUST VULCAN BOND FUND
- ---------------------------------------------------------------------------
- ----
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES
VALUE
---------- ---------------------------------------------------------------
- ----- -----------
<S> <C>
<C>
SHORT-TERM INVESTMENTS--5.8%
- ---------------------------------------------------------------------------
- -------------------
COMMERCIAL PAPER--3.0%
---------------------------------------------------------------
- -----
FINANCE--3.0%
---------------------------------------------------------------
- -----
$2,500,000 General Electric Capital Corp., 5.225%, 5/3/1996 (at amortized
cost) $ 2,500,000
---------------------------------------------------------------
- ----- -----------
MUTUAL FUNDS--2.8%
---------------------------------------------------------------
- -----
2,313,607 Seven Seas Series Government Money Market Fund (at net asset
value) 2,313,607
---------------------------------------------------------------
- ----- -----------
TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST AND VALUE)
4,813,607
---------------------------------------------------------------
- ----- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $81,002,801)(A)
$81,860,453
---------------------------------------------------------------
- ----- -----------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to
$81,006,421.
The net unrealized appreciation of investments on a federal tax basis
amounts to $854,032 which is comprised of $1,917,607 appreciation and
$1,063,575 depreciation at April 30, 1996.
Note:The categories of investments are shown as a percentage of net assets
($83,257,087) at April 30, 1996.
The following acronyms are used in this portfolio:
REMIC--Real Estate Mortgage Investment Conduit
STRIP--Separate Trading of Registered Interest & Principal of Securities
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN STOCK FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
SHARES
VALUE
- --------- ----------------------------------------------------------------
- ---- ------------
<S> <C>
<C>
COMMON STOCKS--87.1%
- ---------------------------------------------------------------------------
- -----------------
CAPITAL GOODS--6.5%
----------------------------------------------------------------
- ----
33,500 Caterpillar, Inc.
$ 2,144,000
----------------------------------------------------------------
- ----
41,900 General Electric Co.
3,247,250
----------------------------------------------------------------
- ----
53,700 Illinois Tool Works, Inc.
3,611,325
----------------------------------------------------------------
- ----
20,000 PACCAR, Inc.
990,000
----------------------------------------------------------------
- ----
56,100 Rockwell International Corp.
3,281,850
----------------------------------------------------------------
- ---- ------------
Total
13,274,425
----------------------------------------------------------------
- ---- ------------
CONSUMER DURABLES--3.0%
----------------------------------------------------------------
- ----
42,400 Chrysler Corp.
2,660,600
----------------------------------------------------------------
- ----
101,400 Echlin, Inc.
3,485,625
----------------------------------------------------------------
- ---- ------------
Total
6,146,225
----------------------------------------------------------------
- ---- ------------
CONSUMER NON-DURABLES--9.4%
----------------------------------------------------------------
- ----
43,000 CPC International, Inc.
2,972,375
----------------------------------------------------------------
- ----
111,000 Hudson Foods, Inc., Class A
1,470,750
----------------------------------------------------------------
- ----
124,300 IBP, Inc.
3,325,025
----------------------------------------------------------------
- ----
59,300 Philip Morris Cos., Inc.
5,344,413
----------------------------------------------------------------
- ----
59,700 Premark International, Inc.
3,067,088
----------------------------------------------------------------
- ----
94,700 Sara Lee Corp.
2,935,700
----------------------------------------------------------------
- ---- ------------
Total
19,115,351
----------------------------------------------------------------
- ---- ------------
CONSUMER SERVICES--1.2%
----------------------------------------------------------------
- ----
39,300 Disney (Walt) Co.
2,436,600
----------------------------------------------------------------
- ---- ------------
ENERGY--8.6%
----------------------------------------------------------------
- ----
33,200 Amoco Corp.
2,423,600
----------------------------------------------------------------
- ----
77,900 Ashland, Inc.
3,203,637
----------------------------------------------------------------
- ----
128,100 Coastal Corp.
5,075,962
----------------------------------------------------------------
- ----
38,100 Exxon Corp.
3,238,500
----------------------------------------------------------------
- ----
32,000 Mobil Corp.
3,680,000
----------------------------------------------------------------
- ---- ------------
Total
17,621,699
----------------------------------------------------------------
- ---- ------------
</TABLE>
SOUTHTRUST VULCAN STOCK FUND
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------------------------------- ------------
<S> <C> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------
FINANCIAL SERVICES--8.6%
-------------------------------------
46,100 Bank of New York Co., Inc. $ 2,235,850
-------------------------------------
113,700 Federal National Mortgage Association 3,482,062
-------------------------------------
120,400 KeyCorp 4,650,450
-------------------------------------
54,200 NationsBank Corp. 4,322,450
-------------------------------------
54,450 Sunamerica, Inc. 2,967,525
------------------------------------- ------------
Total 17,658,337
------------------------------------- ------------
HEALTH CARE--10.3%
-------------------------------------
45,500 Bristol-Myers Squibb Co. 3,742,375
-------------------------------------
55,300 Columbia/HCA Healthcare Corp. 2,937,812
-------------------------------------
69,700 (a) FHP International Corp. 2,056,150
-------------------------------------
126,700 Integrated Health Services, Inc. 3,484,250
-------------------------------------
101,900 Mallinckrodt Group, Inc. 4,012,313
-------------------------------------
69,400 Pfizer, Inc. 4,779,925
------------------------------------- ------------
Total 21,012,825
------------------------------------- ------------
INSURANCE--3.3%
-------------------------------------
39,800 Chubb Corp. 3,766,075
-------------------------------------
93,100 Old Republic International Corp. 3,072,300
------------------------------------- ------------
Total 6,838,375
------------------------------------- ------------
MULTI-INDUSTRY--2.7%
-------------------------------------
53,500 Tenneco, Inc. 2,935,813
-------------------------------------
67,700 Teledyne, Inc. 2,513,363
------------------------------------- ------------
Total 5,449,176
------------------------------------- ------------
RAW MATERIALS--7.2%
-------------------------------------
105,600 International Paper Co. 4,210,800
-------------------------------------
46,400 Praxair, Inc. 1,792,200
-------------------------------------
76,900 Sherwin-Williams Co. 3,595,075
-------------------------------------
56,000 Union Carbide Corp. 2,548,000
-------------------------------------
69,900 (a) Wolverine Tube, Inc. 2,568,825
------------------------------------- ------------
Total 14,714,900
------------------------------------- ------------
</TABLE>
SOUTHTRUST VULCAN STOCK FUND
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------------------------------------------- ---------
- ---
<S> <C> <C>
COMMON STOCKS--CONTINUED
- ---------------------------------------------------------------------------
- ---
RETAIL--5.6%
---------------------------------------------------
124,900 Dillard Department Stores, Inc., Class A $
5,011,612
---------------------------------------------------
69,200 J.C. Penney Co., Inc.
3,425,400
---------------------------------------------------
130,000 Wal-Mart Stores, Inc.
3,103,750
--------------------------------------------------- ---------
- ---
Total
11,540,762
--------------------------------------------------- ---------
- ---
TECHNOLOGY SERVICES--15.2%
---------------------------------------------------
61,800 Hewlett-Packard Co.
6,543,075
---------------------------------------------------
82,800 Intel Corp.
5,609,700
---------------------------------------------------
26,400 International Business Machines Corp.
2,838,000
---------------------------------------------------
188,600 MCI Communications Corp.
5,551,913
---------------------------------------------------
37,500 Motorola, Inc.
2,296,875
---------------------------------------------------
17,100 (a) Seagate Technology, Inc.
991,800
---------------------------------------------------
94,800 Sprint Corp.
3,993,450
---------------------------------------------------
58,800 (a) Sun Microsystems, Inc.
3,189,900
--------------------------------------------------- ---------
- ---
Total
31,014,713
--------------------------------------------------- ---------
- ---
TRANSPORTATION--1.2%
---------------------------------------------------
31,600 CSX Corp.
1,619,500
---------------------------------------------------
10,000 Norfolk Southern Corp.
840,000
--------------------------------------------------- ---------
- ---
Total
2,459,500
--------------------------------------------------- ---------
- ---
UTILITIES--4.3%
---------------------------------------------------
76,200 Consolidated Edison Co.
2,238,375
---------------------------------------------------
102,600 Houston Industries, Inc.
2,193,075
---------------------------------------------------
42,600 Northern States Power Co.
1,991,550
---------------------------------------------------
156,100 Westcoast Energy, Inc.
2,419,550
--------------------------------------------------- ---------
- ---
Total
8,842,550
--------------------------------------------------- ---------
- ---
TOTAL COMMON STOCKS (IDENTIFIED COST $137,982,781)
178,125,438
--------------------------------------------------- ---------
- ---
</TABLE>
SOUTHTRUST VULCAN STOCK FUND
- ---------------------------------------------------------------------------
- ----
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES VALUE
---------- ---------------------------------------------------- --------
- ----
<S> <C> <C>
PREFERRED STOCKS--0.7%
- ---------------------------------------------------------------------------
- ----
INSURANCE--0.7%
----------------------------------------------------
51,000 FHP International Corp., Cumulative Conv. Pfd.,
Series A, $1.25 $
1,396,125
---------------------------------------------------- --------
- ----
TOTAL PREFERRED STOCKS (IDENTIFIED COST $1,230,376)
1,396,125
---------------------------------------------------- --------
- ----
COMMERCIAL PAPER--10.8%
- ---------------------------------------------------------------------------
- ----
$1,000,000 Chevron Oil Finance Co., 5.10%, 5/2/96
1,000,000
----------------------------------------------------
3,000,000 Chevron Oil Finance Co., 5.26%, 5/2/96
3,000,000
----------------------------------------------------
5,000,000 Exxon Funding BV, 5.22%, 5/2/96
5,000,000
----------------------------------------------------
3,000,000 Ford Motor Credit Corp., 5.26%, 5/2/96
3,000,000
----------------------------------------------------
1,000,000 Ford Motor Credit Corp., 5.29%, 5/2/96
1,000,000
----------------------------------------------------
5,000,000 General Electric Capital Corp., 5.33%, 5/2/96
5,000,000
----------------------------------------------------
1,000,000 IBM Credit Corp., 5.08%, 5/2/96
1,000,000
----------------------------------------------------
3,000,000 IBM Credit Corp., 5.33%, 5/2/96
3,000,000
---------------------------------------------------- --------
- ----
TOTAL COMMERCIAL PAPER (AT AMORTIZED COST)
22,000,000
---------------------------------------------------- --------
- ----
MUTUAL FUNDS--2.8%
- ---------------------------------------------------------------------------
- ----
5,781,403 Seven Seas Government Money Market Fund (at net
asset value)
5,781,403
---------------------------------------------------- --------
- ----
TOTAL INVESTMENTS (IDENTIFIED COST $166,994,560)
(B)
$207,302,966
---------------------------------------------------- --------
- ----
</TABLE>
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to
$166,994,560.
The net unrealized appreciation of investments on a federal tax basis
amounts to $40,308,406 which is comprised of $40,993,507 appreciation
and
$685,101 depreciation at April 30, 1996.
Note: The categories of investments are shown as a percentage of net assets
($204,421,244) at April 30, 1996.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN INCOME FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
---------- ---------------------------------------------------------------
- ----- -----------
<S> <C>
<C>
LONG-TERM INVESTMENTS--82.0%
- ---------------------------------------------------------------------------
- -------------------
ASSET-BACKED SECURITIES--5.7%
- ---------------------------------------------------------------------------
- -------------------
AUTO LOANS--4.3%
---------------------------------------------------------------
- -----
$3,367,987 Bank One Auto Trust 1996-A, Class A, 6.10%, 10/15/2002
$ 3,368,388
---------------------------------------------------------------
- ----- -----------
BANK CREDIT CARDS--1.4%
---------------------------------------------------------------
- -----
1,000,000 Standard Credit Card Master Trust, Class A, 8.25%, 11/7/2003
1,060,559
---------------------------------------------------------------
- ----- -----------
TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $4,365,208)
4,428,947
---------------------------------------------------------------
- ----- -----------
COLLATERALIZED MORTGAGE OBLIGATIONS--6.6%
- ---------------------------------------------------------------------------
- -------------------
GOVERNMENT AGENCY--2.3%
---------------------------------------------------------------
- -----
1,000,000 Federal National Mortgage Association, REMIC, Series 1992-79,
Class
LC, 7.00%, 6/25/2006
986,269
---------------------------------------------------------------
- -----
750,000 Federal National Mortgage Association, REMIC, Series G92-35,
Class
C, 7.50%, 7/25/2020
754,447
---------------------------------------------------------------
- ----- -----------
Total
1,740,716
---------------------------------------------------------------
- ----- -----------
UNASSIGNED--4.3%
---------------------------------------------------------------
- -----
3,500,000 Prudential Home Mortgage Securities, Series 1993-13, Class A7,
6.25%, 4/25/2008
3,379,037
---------------------------------------------------------------
- ----- -----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST
$5,303,059)
5,119,753
---------------------------------------------------------------
- ----- -----------
CORPORATE BONDS--17.9%
- ---------------------------------------------------------------------------
- -------------------
AUTOMOTIVE--2.6%
---------------------------------------------------------------
- -----
1,000,000 Ford Motor Credit Corp., 8.20%, 2/15/2002
1,054,135
---------------------------------------------------------------
- -----
1,000,000 General Motors Acceptance Corp., 6.625%, 10/1/2002
977,830
---------------------------------------------------------------
- ----- -----------
Total
2,031,965
---------------------------------------------------------------
- ----- -----------
BANKING--1.2%
---------------------------------------------------------------
- -----
1,000,000 NationsBank Corp., 5.125%, 9/15/1998
970,954
---------------------------------------------------------------
- ----- -----------
COMMERCIAL--1.3%
---------------------------------------------------------------
- -----
1,000,000 International Lease Finance Corp., 7.00%, 6/1/1998
1,010,551
---------------------------------------------------------------
- ----- -----------
CONSUMER NON-DURABLES--0.7%
---------------------------------------------------------------
- -----
500,000 Procter & Gamble Co., Deb., 8.70%, 8/1/2001
543,631
---------------------------------------------------------------
- ----- -----------
</TABLE>
SOUTHTRUST VULCAN INCOME FUND
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
VALUE
---------- ---------------------------------------------------------------
- ----- -----------
<S> <C>
<C>
LONG-TERM INVESTMENTS--CONTINUED
- ---------------------------------------------------------------------------
- -------------------
CORPORATE BONDS--CONTINUED
- ---------------------------------------------------------------------------
- -------------------
DIVERSIFIED--1.3%
---------------------------------------------------------------
- -----
$1,000,000 Philip Morris Cos., Inc., 7.625%, 5/15/2002
$ 1,021,382
---------------------------------------------------------------
- ----- -----------
ENTERTAINMENT--4.4%
---------------------------------------------------------------
- -----
3,500,000 Disney (Walt) Co., 6.375%, 3/30/2001
3,445,750
---------------------------------------------------------------
- ----- -----------
FINANCIAL SERVICES--1.3%
---------------------------------------------------------------
- -----
1,000,000 Merrill Lynch & Co., Inc., 8.375%, 2/9/2000
1,052,677
---------------------------------------------------------------
- ----- -----------
RETAIL--0.7%
---------------------------------------------------------------
- -----
500,000 Dillard Department Stores, Inc., 7.375%, 6/15/1999
510,295
---------------------------------------------------------------
- ----- -----------
TRANSPORTATION--1.9%
---------------------------------------------------------------
- -----
1,000,000 CSX Transportation, Inc., Equip. Trust, 6.26%, 3/15/2003
954,676
---------------------------------------------------------------
- -----
500,000 Norfolk & Western Railroad Co., Equip. Trust, 8.75%, 2/1/1998
520,201
---------------------------------------------------------------
- ----- -----------
Total
1,474,877
---------------------------------------------------------------
- ----- -----------
UTILITIES--2.5%
---------------------------------------------------------------
- -----
1,000,000 Consolidated Edison Co., Deb., 6.50%, 2/1/2001
982,930
---------------------------------------------------------------
- -----
1,000,000 Southwestern Bell Telephone Co., 6.125%, 3/1/2000
976,147
---------------------------------------------------------------
- ----- -----------
Total
1,959,077
---------------------------------------------------------------
- ----- -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST $14,003,269)
14,021,159
---------------------------------------------------------------
- ----- -----------
GOVERNMENT AGENCIES--5.4%
- ---------------------------------------------------------------------------
- -------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--5.4%
---------------------------------------------------------------
- -----
1,000,000 7.125%, 11/7/2005
959,077
---------------------------------------------------------------
- -----
3,500,000 5.875%, 2/2/2006
3,239,597
---------------------------------------------------------------
- ----- -----------
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $4,505,320)
4,198,674
---------------------------------------------------------------
- ----- -----------
MORTGAGE BACKED SECURITIES--24.2%
- ---------------------------------------------------------------------------
- -------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION--4.3%
---------------------------------------------------------------
- -----
3,484,457 5.50%, 12/1/2000
3,391,801
---------------------------------------------------------------
- ----- -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--9.1%
---------------------------------------------------------------
- -----
3,475,743 7.00%, 4/1/1999
3,502,155
---------------------------------------------------------------
- -----
3,586,390 7.00%, 6/1/2002
3,593,200
---------------------------------------------------------------
- ----- -----------
Total
7,095,355
---------------------------------------------------------------
- ----- -----------
</TABLE>
SOUTHTRUST VULCAN INCOME FUND
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -------------------------------------------------- ----------
- -
<S> <C> <C>
LONG-TERM INVESTMENTS--CONTINUED
-------------------------------------------------------------
MORTGAGE BACKED SECURITIES--CONTINUED
-------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOC.--10.8%
--------------------------------------------------
$ 828,886 8.50%, 7/15/2024 $
857,606
--------------------------------------------------
908,872 8.00%, 10/15/2009
936,601
--------------------------------------------------
3,403,106 7.00%, 1/15/2023
3,292,978
--------------------------------------------------
3,397,218 6.00%, 8/20/2025
3,374,827
-------------------------------------------------- ----------
- -
Total
8,462,012
-------------------------------------------------- ----------
- -
TOTAL MORTGAGE BACKED SECURITIES (IDENTIFIED COST
$19,330,270)
18,949,168
-------------------------------------------------- ----------
- -
U.S. TREASURY NOTES--22.2%
-------------------------------------------------------------
500,000 8.00%, 10/15/1996
505,781
--------------------------------------------------
500,000 8.00%, 5/15/2001
533,750
--------------------------------------------------
550,000 7.50%, 10/31/1999
569,938
--------------------------------------------------
1,000,000 7.375%, 11/15/1997
1,020,936
--------------------------------------------------
1,000,000 6.625%, 3/31/1997
1,009,061
--------------------------------------------------
600,000 6.50%, 11/30/1996
603,562
--------------------------------------------------
1,000,000 6.125%, 5/15/1998
1,001,250
--------------------------------------------------
1,000,000 5.875%, 3/31/1999
991,250
--------------------------------------------------
3,500,000 5.875%, 11/15/2005
3,304,214
--------------------------------------------------
1,000,000 5.50%, 7/31/1997
996,561
--------------------------------------------------
1,000,000 5.50%, 11/15/1998
984,375
--------------------------------------------------
1,000,000 5.50%, 12/31/2000
964,375
--------------------------------------------------
1,000,000 5.375%, 5/31/1998
986,561
--------------------------------------------------
1,000,000 5.25%, 12/31/1997
988,750
--------------------------------------------------
1,000,000 5.50%, 1/31/1999
970,000
--------------------------------------------------
1,000,000 4.75%, 8/31/1998
971,250
--------------------------------------------------
1,000,000 4.75%, 9/30/1998
970,311
-------------------------------------------------- ----------
- -
TOTAL U.S. TREASURY NOTES (IDENTIFIED COST
$17,751,508)
17,371,925
-------------------------------------------------- ----------
- -
TOTAL LONG-TERM INVESTMENTS (IDENTIFIED COST
$65,258,634)
64,089,626
-------------------------------------------------- ----------
- -
</TABLE>
SOUTHTRUST VULCAN INCOME FUND
- ---------------------------------------------------------------------------
- ----
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
OR SHARES
VALUE
---------- ----------------------------------------------------- -------
- ----
<S> <C> <C>
SHORT-TERM INVESTMENTS--16.6%
- ---------------------------------------------------------------------------
- ----
COMMERCIAL PAPER--3.9%
- ---------------------------------------------------------------------------
- ----
$3,000,000 General Electric Capital Corp., 5.22%, 5/2/1996 $
3,000,000
----------------------------------------------------- -------
- ----
GOVERNMENT AGENCIES--9.2%
- ---------------------------------------------------------------------------
- ----
7,200,000 Federal National Mortgage Association, Discount Note,
5/9/1996
7,192,064
----------------------------------------------------- -------
- ----
MUTUAL FUND SHARES--3.5%
- ---------------------------------------------------------------------------
- ----
2,732,966 Seven Seas Series Government Fund (at net asset
value)
2,732,966
----------------------------------------------------- -------
- ----
TOTAL SHORT-TERM INVESTMENTS (AT AMORTIZED COST AND
VALUE)
12,925,030
----------------------------------------------------- -------
- ----
TOTAL INVESTMENTS (IDENTIFIED COST $78,183,664)(A)
$77,014,656
----------------------------------------------------- -------
- ----
</TABLE>
(a) The cost of investments for federal tax purposes amounts to
$78,183,664.
The net unrealized depreciation of investments on a federal tax basis
amounts to $1,169,008, which is comprised of $425,284 appreciation and
$1,594,292 depreciation at April 30, 1996.
Note: The categories of investments are shown as a percentage of net assets
($78,146,571) at April 30, 1996.
The following acronym is used throughout this portfolio:
REMIC--Real Estate Mortgage Investment Conduit
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
TREASURY
OBLIGATIONS
MONEY BOND
STOCK INCOME
MARKET FUND FUND
FUND FUND
------------ ----------- ---
- --------- -----------
<S> <C> <C> <C>
<C>
ASSETS:
- -------------------------------------------
Investments in repurchase agreements $210,015,000 $ -- $
- -- $ --
- -------------------------------------------
Investments in securities 237,359,285 81,860,453
207,302,966 77,014,656
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
Total investments in securities, at
amortized cost and value 447,374,285 81,860,453
207,302,966 77,014,656
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
Cash 225 --
- -- --
- -------------------------------------------
Income receivable 30,919 1,040,161
201,986 819,900
- -------------------------------------------
Receivable for investments sold -- --
251,250 --
- -------------------------------------------
Receivable for shares sold -- 388,472
460,107 334,252
- -------------------------------------------
Prepaid expenses 3,775 --
- -- --
- -------------------------------------------
Deferred expenses 21,275 7,013
7,312 --
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
Total assets 447,430,479 83,296,099
208,223,621 78,168,808
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
LIABILITIES:
- -------------------------------------------
Payable for investments purchased -- --
3,725,467 --
- -------------------------------------------
Payable for shares redeemed -- 9,804
50,000 --
- -------------------------------------------
Income distribution payable 1,701,522 --
- -- --
- -------------------------------------------
Accrued expenses -- 29,208
26,910 22,237
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
Total liabilities 1,701,522 39,012
3,802,377 22,237
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
NET ASSETS CONSIST OF:
- -------------------------------------------
Paid-in capital $445,728,957 $83,037,664
$152,198,185 $79,358,641
- -------------------------------------------
Net unrealized appreciation (depreciation)
of investments -- 857,652
40,308,406 (1,169,008)
- -------------------------------------------
Accumulated net realized gain (loss) on
investments -- (982,117)
11,715,360 (100,747)
- -------------------------------------------
Undistributed net investment income -- 343,888
199,293 57,685
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
Total Net Assets $445,728,957 $83,257,087
$204,421,244 $78,146,571
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
Shares Outstanding 445,728,957 8,314,506
14,195,120 7,999,696
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
Net Asset Value Per Share:
(Net Assets / Shares Outstanding) $ 1.00 $ 10.01 $
14.40 $ 9.77
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
Offering Price Per Share* $ -- $ 10.37** $
14.92** $ 10.12**
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
Redemption Proceeds Per Share* $ -- $ 9.91*** $
14.26*** $ 9.67***
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
Investments, at identified cost $ -- $81,002,801
$166,994,560 $78,183,664
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
Investments, at tax cost $ -- $81,006,421
$166,994,560 $78,183,664
- ------------------------------------------- ------------ ----------- ---
- --------- -----------
</TABLE>
* See "How to Purchase, Exchange, and Redeem Shares."
** Computation of offering price: 100/96.5 of net asset value. Effective
July
1, 1996 the Stock Fund's computation of offering price becomes:
100/95.5 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
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 1996
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
TREASURY
OBLIGATIONS
MONEY MARKET BOND STOCK INCOME
FUND FUND FUND FUND*
------------ ---------- ----------- --------
- ---
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------
Dividends $ -- $ -- $ 3,268,639 $ --
- --------------------------
Interest 17,287,730 5,856,676 1,126,193
1,260,762
- -------------------------- ----------- ---------- ----------- --------
- ---
Total income 17,287,730 5,856,676 4,394,832
1,260,762
- -------------------------- ----------- ---------- ----------- --------
- ---
EXPENSES:
- --------------------------
Investment advisory fee 1,546,225 491,657 1,257,372
122,936
- --------------------------
Administrative personnel
and services fee 408,456 108,910 222,204
30,501
- --------------------------
Custodian fees 29,193 25,651 18,569
9,456
- --------------------------
Transfer and dividend
disbursing agent fees and
expenses 25,921 30,525 29,503
2,288
- --------------------------
Directors/Trustees' fees 15,553 7,003 6,414
568
- --------------------------
Auditing fees 7,817 10,986 7,969 --
- --------------------------
Legal fees 592 6,130 975
792
- --------------------------
Portfolio accounting fees 69,997 56,592 48,540
16,164
- --------------------------
Share registration costs 39,213 24,954 32,886
333
- --------------------------
Printing and postage 6,021 7,336 3,086
508
- --------------------------
Insurance premiums 3,362 3,294 2,946 --
- --------------------------
Miscellaneous 3,209 4,542 3,127
1,068
- -------------------------- ----------- ---------- ----------- --------
- ---
Total expenses 2,155,559 777,580 1,633,591
184,614
- -------------------------- ----------- ---------- ----------- --------
- ---
Waivers--
- --------------------------
Waiver of investment
advisory fee (618,490) (40,971) (124,311)
(10,245)
- --------------------------
Waiver of administrative
personnel and services fee (57,426) (27,289) (52,868) --
- -------------------------- ----------- ---------- ----------- --------
- ---
Total waivers (675,916) (68,260) (177,179)
(10,245)
- -------------------------- ----------- ---------- ----------- --------
- ---
Net expenses 1,479,643 709,320 1,456,412
174,369
- -------------------------- ----------- ---------- ----------- --------
- ---
Net investment income 15,808,087 5,147,356 2,938,420
1,086,393
- -------------------------- ----------- ---------- ----------- --------
- ---
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
- --------------------------
Net realized gain (loss)
on investments -- 86,918 15,684,545
(100,747)
- --------------------------
Change in unrealized
appreciation
(depreciation) of
investments -- 63,058 27,055,507
(1,169,008)
- -------------------------- ----------- ---------- ----------- --------
- ---
Net realized and
unrealized gain (loss)
on investments -- 149,976 42,740,052
(1,269,755)
- -------------------------- ----------- ---------- ----------- --------
- ---
Change in net assets
resulting from
operations $15,808,087 $5,297,332 $45,678,472 $
(183,362)
- -------------------------- ----------- ---------- ----------- --------
- ---
</TABLE>
* For the period from January 10, 1996 (date of initial public investment)
to
April 30, 1996.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
TREASURY OBLIGATIONS BOND
MONEY MARKET FUND FUND
----------------------------- -----------------
- ---------
YEAR ENDED APRIL 30, YEAR ENDED
APRIL 30,
----------------------------- -----------------
- ---------
1996 1995 1996
1995
- ------------------------ -------------- ------------- ------------ ---
- ---------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
- ------------------------
OPERATIONS--
- ------------------------
Net investment income $ 15,808,087 $ 11,615,086 $ 5,147,356 $
3,580,655
- ------------------------
Net realized gain (loss)
on investments -- -- 86,918
(1,069,134)
- ------------------------
Net change in unrealized
appreciation
(depreciation)
of investments -- -- 63,058
1,563,871
- ------------------------ -------------- ------------- ------------ ---
- ---------
Change in net assets
resulting from
operations 15,808,087 11,615,086 5,297,332
4,075,392
- ------------------------ -------------- ------------- ------------ ---
- ---------
DISTRIBUTIONS TO
SHAREHOLDERS--
- ------------------------
Dividends from net
investment income (15,808,087) (11,615,086) (4,879,000)
(3,536,738)
- ------------------------
Distributions from net
realized gain on
investment transactions -- -- --
- --
- ------------------------ -------------- ------------- ------------ ---
- ---------
Change in net assets
from distributions to
shareholders (15,808,087) (11,615,086) (4,879,000)
(3,536,738)
- ------------------------ -------------- ------------- ------------ ---
- ---------
SHARE TRANSACTIONS--
- ------------------------
Proceeds from sale of
shares 1,137,724,946 906,326,761 20,766,411
58,552,670
- ------------------------
Net asset value of
shares issued to
shareholders in payment
of distributions
declared 162,859 56,458 31,087
41,423
- ------------------------
Cost of shares redeemed (1,006,358,894) (871,107,428) (14,367,477)
(15,491,406)
- ------------------------ -------------- ------------- ------------ ---
- ---------
Change in net assets
resulting from share
transactions 131,528,911 35,275,791 6,430,021
43,102,687
- ------------------------ -------------- ------------- ------------ ---
- ---------
Change in net assets 131,528,911 35,275,791 6,848,353
43,641,341
- ------------------------
NET ASSETS:
- ------------------------
Beginning of period 314,200,046 278,924,255 76,408,734
32,767,393
- ------------------------ -------------- ------------- ------------ ---
- ---------
End of period $ 445,728,957 $ 314,200,046 $ 83,257,087 $
76,408,734
- ------------------------ -------------- ------------- ------------ ---
- ---------
Undistributed net
investment income
included in net assets
at the end of the period $ -- $ -- $ 343,888 $
75,532
- ------------------------ -------------- ------------- ------------ ---
- ---------
</TABLE>
SOUTHTRUST VULCAN FUNDS
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------
- -----
<TABLE>
<CAPTION>
STOCK INCOME
FUND FUND
---------------------------- --------
- ---
*PERIOD
ENDED
YEAR ENDED APRIL 30, APRIL
30,
---------------------------- --------
- ---
1996 1995 1996
- ----------------------------------- ------------- ------------- --------
- ---
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------
OPERATIONS--
- -----------------------------------
Net investment income $ 2,938,420 $ 1,668,815 $
1,086,393
- -----------------------------------
Net realized gain (loss) on
investments 15,684,545 1,895,010
(100,747)
- -----------------------------------
Net change in unrealized
appreciation (depreciation)
of investments 27,055,507 13,350,921
(1,169,008)
- ----------------------------------- ------------- ------------- --------
- ---
Change in net assets resulting
from operations 45,678,472 16,914,746
(183,362)
- ----------------------------------- ------------- ------------- --------
- ---
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------
Dividends from net investment
income (2,853,915) (1,569,099)
(1,028,708)
- -----------------------------------
Distributions from net realized
gain on investment transactions (5,617,636) -- --
- ----------------------------------- ------------- ------------- --------
- ---
Change in net assets from
distributions to shareholders (8,471,551) (1,569,099)
(1,028,708)
- ----------------------------------- ------------- ------------- --------
- ---
SHARE TRANSACTIONS--
- -----------------------------------
Proceeds from sale of shares 57,273,724 99,535,036
82,289,179
- -----------------------------------
Net asset value of shares issued to
shareholders in payment of
distributions declared 217,397 78,162 --
- -----------------------------------
Cost of shares redeemed (28,557,564) (13,792,151)
(2,930,538)
- ----------------------------------- ------------- ------------- --------
- ---
Change in net assets resulting
from share transactions 28,933,557 85,821,047
79,358,641
- ----------------------------------- ------------- ------------- --------
- ---
Change in net assets 66,140,478 101,166,694
78,146,571
- -----------------------------------
NET ASSETS:
- -----------------------------------
Beginning of period 138,280,766 37,114,072
0
- ----------------------------------- ------------- ------------- --------
- ---
End of period $ 204,421,244 $ 138,280,766
$78,146,571
- ----------------------------------- ------------- ------------- --------
- ---
Undistributed net investment income
included in net assets at the end
of the period $ 199,293 $ 114,802 $
57,685
- ----------------------------------- ------------- ------------- --------
- ---
</TABLE>
* Reflects operations for the period from January 10, 1996 (date of initial
public investment) to April 30, 1996.
(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
BOND FUND
----------------------------------- ----------
- ------------------------
YEAR ENDED APRIL 30, YEAR
ENDED APRIL 30,
----------------------------------- ----------
- ------------------------
1996 1995 1994 1993(A) 1996
1995 1994 1993(A)
- ------------------------ -------- -------- -------- -------- ------- -
- ------ ------- -------
<S> <C> <C> <C> <C> <C>
<C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 9.95
$10.04 $10.71 $10.00
- ------------------------
INCOME FROM INVESTMENT
OPERATIONS
- ------------------------
Net investment income 0.05 0.05 0.03 0.03 0.59
0.61 0.63 0.66
- ------------------------
Net realized and
unrealized gain (loss)
on investments -- -- -- -- 0.03
(0.09) (0.58) 0.69
- ------------------------ ------ ------ ------ ------ ------ -
- ----- ------ ------
Total from investment
operations 0.05 0.05 0.03 0.03 0.62
0.52 0.05 1.35
- ------------------------ ------ ------ ------ ------ ------ -
- ----- ------ ------
LESS DISTRIBUTIONS
- ------------------------
Distributions from net
investment income (0.05) (0.05) (0.03) (0.03) (0.56)
(0.61) (0.65) (0.62)
- ------------------------
Distributions from net
realized gain on
investment transactions -- -- -- -- --
- -- (0.07) (0.02)
- ------------------------ ------ ------ ------ ------ ------ -
- ----- ------ ------
Total distributions (0.05) (0.05) (0.03) (0.03) (0.56)
(0.61) (0.72) (0.64)
- ------------------------ ------ ------ ------ ------ ------ -
- ----- ------ ------
NET ASSET VALUE, END OF
PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $10.01 $
9.95 $10.04 $10.71
- ------------------------ ------ ------ ------ ------ ------ -
- ----- ------ ------
TOTAL RETURN(B) 5.26% 4.62% 2.83% 2.93% 6.78%
5.41% 0.33% 13.44%
- ------------------------
RATIOS TO AVERAGE NET
ASSETS
- ------------------------
Expenses 0.48% 0.43% 0.40% 0.39%(c) 0.87%
0.75% 0.51% 0.39%(c)
- ------------------------
Net investment income 5.11% 4.56% 2.81% 2.93%(c) 6.28%
6.29% 5.97% 6.53%(c)
- ------------------------
Expense
waiver/reimbursement (d) 0.22% 0.30% 0.33% 0.36%(c) 0.08%
0.28% 0.58% 0.59%(c)
- ------------------------
SUPPLEMENTAL DATA
- ------------------------
<CAPTION>
Net assets, end of
period
(000 omitted) $445,729 $314,200 $278,924 $194,771 $83,257
$76,409 $32,767 $25,989
- ------------------------
Portfolio turnover -- -- -- -- 28%
48% 6% 19%
- ------------------------
</TABLE>
(a) Reflects operations for the period from May 8, 1992 (date of initial
public
investment) to April 30, 1993.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) 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)
SOUTHTRUST VULCAN FUNDS
FINANCIAL HIGHLIGHTS--CONTINUED
- ---------------------------------------------------------------------------
- -----
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
STOCK FUND
INCOME FUND
------------------------------------- --------
- --------------
YEAR ENDED APRIL 30, PERIOD
ENDED APRIL 30,
------------------------------------- --------
- --------------
1996 1995 1994 1993(A)
1996(E)
- ------------------------ -------- -------- ------- ------- -
- ------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $ 11.51 $ 10.08 $ 10.36 $ 10.00
$10.00
- ------------------------
INCOME FROM INVESTMENT
OPERATIONS
- ------------------------
Net investment income 0.23 0.20 0.19 0.19
0.16
- ------------------------
Net realized and
unrealized gain (loss)
on investments 3.33 1.43 (0.28) 0.35
(0.25)
- ------------------------ ------- ------- ------- -------
- ------
Total from investment
operations 3.56 1.63 (0.09) 0.54
(0.09)
- ------------------------ ------- ------- ------- -------
- ------
LESS DISTRIBUTIONS
- ------------------------
Distributions from net
investment income (0.23) (0.20) (0.19) (0.18)
(0.14)
- ------------------------
Distributions from net
realized gain on
investment transactions (0.44) -- -- --
- --
- ------------------------ ------- ------- ------- -------
- ------
Total distributions (0.67) (0.20) (0.19) (0.18)
(0.14)
- ------------------------ ------- ------- ------- -------
- ------
NET ASSET VALUE, END OF
PERIOD $ 14.40 $ 11.51 $ 10.08 $ 10.36
$ 9.77
- ------------------------ ------- ------- ------- -------
- ------
TOTAL RETURN(B) 31.51% 16.36% (0.90%) 5.54%
(0.93%)
- ------------------------
RATIOS TO AVERAGE NET
ASSETS
- ------------------------
Expenses 0.87% 0.74% 0.48% 0.39%(c)
0.85%(c)
- ------------------------
Net investment income 1.75% 1.95% 1.82% 1.91%(c)
5.30%(c)
- ------------------------
Expense
waiver/reimbursement
(d) 0.11% 0.39% 0.69% 0.74%(c)
0.05%(c)
- ------------------------
SUPPLEMENTAL DATA
- ------------------------
<CAPTION>
Net assets, end of
period
(000 omitted) $204,421 $138,281 $37,114 $30,935
$78,147
- ------------------------
Average commission rate
paid $ 0.0747 $ -- $ -- $ --
$ --
- ------------------------
Portfolio turnover 39% 57% 46% 34%
61%
- ------------------------
</TABLE>
(a) Reflects operations for the period from May 8, 1992 (date of initial
public
investment) to April 30, 1993.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and
net
investment income ratios shown above.
(e) Reflects operations for the period from January 10, 1996 (date of
initial
public investment) to April 30, 1996.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996
- ---------------------------------------------------------------------------
- ----
(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 four diversified portfolios
(individually referred to as the "Fund", or collectively as the "Funds")
which
are presented herein:
<TABLE>
PORTFOLIO NAME INVESTMENT
OBJECTIVE
- ---------------------------------------------------------------------------
- ---------------------
<S> <C>
Vulcan Treasury Obligations Money To provide as high a level of
current interest
Market Fund ("Treasury Obligations") income as is consistent with
maintaining liquidity
and stability of principal.
- ---------------------------------------------------------------------------
- ---------------------
Vulcan Bond Fund ("Bond") To provide a level of total
return consistent with a
portfolio of high-quality debt
securities.
- ---------------------------------------------------------------------------
- ---------------------
Vulcan Stock Fund ("Stock") To provide long-term capital
appreciation, with
income a secondary
consideration.
- ---------------------------------------------------------------------------
- ---------------------
Vulcan Income Fund ("Income") To provide current income.
- ---------------------------------------------------------------------------
- ---------------------
</TABLE>
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 their financial statements.
These policies are in conformity with generally accepted accounting
principles.
INVESTMENT VALUATIONS--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. 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. Listed equity
securi-
ties are valued at the last sale price reported on a national securities
exchange. For Treasury Obligations, the use of the amortized cost method
to
value its portfolio securities is in accordance with Rule 2a-7 under the
Act. For fluctuating net asset value Funds within the Company, short-term
securities are valued at the prices provided by an independent pricing
service. However, short-term securities purchased with remaining
maturities
of sixty days or less may be valued at amortized cost, which approximates
fair market value. Investments in other open-end regulated investment
com-
panies are valued at net asset value.
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 under repurchase
agreement
transactions.
Additionally, procedures have been established by the Company to
monitor,
on a daily basis, the market value of each repurchase agreement's
collat-
eral to ensure that the value of collateral at least equals the
repurchase
price to be paid under the repurchase agreement transaction.
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 the guidelines
and/or standards reviewed or established 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.
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 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
provisions for federal tax are necessary.
At April 30, 1996, Bond had a capital loss carryforward of $986,973 for
federal tax purposes, which will reduce its 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, the capital loss
carryforward will expire as follows ($252,919) in 2003 and ($734,054) in
2004.
Net capital losses of $100,747 on Income attributable to security
transactions incurred after October 31, 1995, are treated as arising on
May
1, 1996, the first day of the Fund's next taxable year.
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
se-
curities purchased. Securities purchased on a when-issued or delayed
deliv-
ery basis are marked to market daily and begin earning interest on the
set-
tlement date.
DEFERRED EXPENSES--The costs incurred by each Fund with respect to
organi-
zational expenses and registration of their shares in their first fiscal
year, excluding the initial expense of registering their shares, have
been
deferred and are being amortized using the straight-line method not to
ex-
ceed a period of five years from each Company'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 Master Trust Agreement permits the Trustees to issue an unlimited
number
of full and fractional shares of beneficial interest (par value of $0.001).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
--------------------------------------------------
- --------------------------
1996
1995
-------------------------------------- ----------
- --------------------------
TREASURY TREASURY
OBLIGATIONS BOND STOCK
OBLIGATIONS BOND STOCK
- ----------------------- -------------- ---------- ---------- ----------
- -- ---------- ----------
<S> <C> <C> <C> <C>
<C> <C>
Shares sold 1,137,724,946 2,024,389 4,334,642
906,326,761 5,999,668 9,649,918
- -----------------------
Shares issued to
shareholders in payment
of distributions
declared 162,859 3,035 16,554
56,458 4,223 7,567
- -----------------------
Shares redeemed (1,006,358,894) (1,390,568) (2,174,617)
(871,107,428) (1,591,198) (1,319,808)
- ----------------------- -------------- ---------- ---------- ----------
- -- ---------- ----------
Net change from share
transactions 131,528,911 636,856 2,176,579
35,275,791 4,412,693 8,337,677
- ----------------------- -------------- ---------- ---------- ----------
- -- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED APRIL 30,
----------------------
1996*
-----
INCOME
------
<S> <C>
- ----------------------------------------------
Shares sold 8,293,583
- ----------------------------------------------
Shares redeemed (293,887)
- ---------------------------------------------- ---------
Net change resulting from share transactions 7,999,696
- ---------------------------------------------- ---------
</TABLE>
*For the period from January 10, 1996 (date of initial public investment)
to
April 30, 1996.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--SouthTrust Bank of Alabama, N.A., the Company's
investment adviser (the "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 any portion
of
its fee. The Adviser can modify or terminate this voluntary waiver at any
time
at its sole discretion.
<TABLE>
<CAPTION>
ANNUAL
RATE
FUND ------
<S> <C>
- --------------------
TREASURY OBLIGATIONS 0.50%
- --------------------
BOND 0.60%
- --------------------
STOCK 0.75%
- --------------------
INCOME 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 AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services
Company
("FServ"), through its subsidiary, Federated Shareholder Services Company
serves as transfer and dividend disbursing agent for the Company. The fee
paid
to FServ is based on the size, type, and number of accounts and
transactions
made by shareholders.
PORTFOLIO ACCOUNTING FEES--FAS also maintains the Company's accounting
records
for which it receives a fee. The fee is based on the level of each Fund's
average daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Directors of the Company are Officers
and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for
the
year ended April 30, 1996, were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ------ ------------ -----------
<S> <C> <C>
BOND $ 26,663,116 $21,449,049
- ------ ------------ -----------
STOCK $ 75,809,397 $58,154,562
- ------ ------------ -----------
INCOME $105,787,820 $40,514,809
- ------ ------------ -----------
</TABLE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
SOUTHTRUST VULCAN FUNDS
We have audited the accompanying statements of assets and liabilities of
the
SouthTrust Vulcan Funds, a Massachusetts business trust (comprising,
respectively, the Treasury Obligations Money Market, the Stock, the Bond,
and
the Income Portfolios), as of April 30, 1996, and the related statements of
operations for the year then ended, and the statements of changes in net
assets and the financial highlights for the periods presented. These
financial
statements and financial highlights are the responsibility of the Funds
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in
the financial statements. Our procedures included confirmation of
securities
owned as of April 30, 1996, by correspondence with the custodian and
brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred
to above present fairly, in all material respects, the financial position
of
each of the respective portfolios constituting the SouthTrust Vulcan Funds
as
of April 30, 1996, the results of their operations for the year then ended,
and the changes in their net assets and the financial highlights for the
periods presented, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania,
June 4, 1996
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------
- -----
Charles G. Brown, III William O. Vann
Russell W. Chambliss Chairman
Thomas Grady Edward C. Gonzales
Thomas L. Merrill, Sr. President and Treasurer
William O. Vann C. Christine Thomson
Vice President and Assistant
Treasurer
Peter J. Germain
Secretary
C. Todd Gibson
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.
Investment Adviser:
SouthTrust Bank
[SOUTHTRUST BANK LOGO]
of Alabama, N.A.
G00859-01 (6/96)
APPENDIX
A.1 The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The
SouthTrust Vulcan Bond Fund is represented by a solid line. Lehman
Brothers Intermediate Government/Corporate Index (`LBIG/C'') is
represented by a broken line. The line graph is a visual
representation of a comparison of change in value of a $10,000
hypothetical investment in the fund and the LBIG/C. The `x'' axis
reflects computation periods from 5/8/92 to 4/30/96. The `y'' axis
reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the fund as compared to
the LBIG/C; the ending values were $12,298 and $13,034, respectively.
The legend in the bottom quadrant of the graphic presentation
indicates the fund's Average Annual Total Returns for the period ended
4/30/96; for one year and since start of performance (5/8/92) are
2.55% and 5.32%, respectively.
A.2 The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The
SouthTrust Vulcan Stock Fund is represented by a solid line. Standard
& Poor's 500 Index (`S&P 500'') is represented by a broken line. The
line graph is a visual representation of a comparison of change in
value of a $10,000 hypothetical investment in the fund and the S&P
500. The `x'' axis reflects computation periods from 5/8/92 to
4/30/96. The `y'' axis reflects the cost of the investment. The right
margin reflects the ending value of the hypothetical investment in the
fund as compared to the S&P 500; the ending values were $15,284 and
$17,569, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the fund's Average Annual Total Returns
for the period ended 4/30/96; for one year and since start of
performance (5/8/92) are 25.62% and 11.24%, respectively.
A.3 The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The
SouthTrust Vulcan Income Fund is represented by a solid line. Merrill
Lynch Corporate/Government 1-5 Year Index (`MLC/G 1-5'') is
represented by a broken line. The line graph is a visual
representation of a comparison of change in value of a $10,000
hypothetical investment in the fund and the MLC/G 1-5. The `x'' axis
reflects computation periods from 1/10/96 to 4/30/96. The `y'' axis
reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the fund as compared to
the MLC/G 1-5; the ending values were $9,560 and $9,981, respectively.
The legend in the bottom quadrant of the graphic presentation
indicates the fund's Average Annual Total Return of
-4.37%, for the period from start of performance (5/8/92) to the
fiscal year end 4/30/96.
