[LOGO OF SOUTHTRUST VULCAN FUNDS]
Treasury Obligations
Money Market Fund
Bond Fund
Stock Fund
Income Fund
Annual Report
April 30, 1997
PRESIDENT'S MESSAGE
- -------------------------------------------------------------------------------
Dear Investor:
I am pleased to present the Annual Report of the SouthTrust Vulcan Funds for the
twelve-month reporting period from May 1, 1996 through April 30, 1997. This
report begins with an investment review of the economy and developments in the
financial markets over the reporting period. Next, you will find a complete list
of investments and financial statements for the SouthTrust Vulcan Treasury
Obligations Money Market Fund, the SouthTrust Vulcan Bond Fund, the SouthTrust
Vulcan Stock Fund, and the SouthTrust Vulcan Income Fund.
The highlights for each fund over the fiscal year, ended April 30, 1997, are as
follows:
SOUTHTRUST VULCAN TREASURY OBLIGATIONS MONEY MARKET FUND
This portfolio of U.S. Treasury money market securities paid a dividend stream
totaling $0.05 per share during the year. Total net assets in the fund reached
$524.5 million at the end of the reporting period.
SOUTHTRUST VULCAN INCOME FUND
SouthTrust Vulcan Income Fund, a diversified portfolio of income-producing
investments, paid dividends totaling $0.56 per share, which contributed to a
total return of 4.90%* (1.27% taking into account the fund's sales charge). Due
to a difficult bond environment that decreased bond prices, the fund's net asset
value decreased slightly by $0.09 per share. Total net assets in the fund stood
at $38.6 million at the end of the reporting period.
SOUTHTRUST VULCAN BOND FUND
This fund's diversified portfolio of corporate and government bonds paid
distributions totaling $0.64 per share, which contributed to a total return
during the period of 5.98%* (2.30% taking into account the fund's sales charge).
Due to a difficult bond environment that decreased bond prices, the fund's net
asset value decreased slightly by $0.06 per share. Total net assets in the fund
stood at $91.2 million at the end of the reporting period.
SOUTHTRUST VULCAN STOCK FUND
In a continued favorable environment for high-quality stocks, Vulcan Stock Fund
produced a total return during the period of 19.99%* (14.58% taking into account
the fund's sales charge). Contributing to the total return was a 9% increase in
net asset value, $0.21 per share in dividends and $1.17 in capital gains. Total
net assets reached $272.7 million.
Thank you for putting your money to work in one or more key financial markets
through the SouthTrust Vulcan Funds. We look forward to keeping you up-to-date
on your progress.
Sincerely,
LOGO
Edward C. Gonzales
President June 15, 1997
* 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.
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.
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
The nearly ideal investment environment experienced during 1996 continued to
improve for equity investors in early 1997. Stronger than expected economic
growth has resulted in positive earnings surprises, which have helped boost
stock prices. While no visible signs of inflationary pressures have surfaced
yet, the strong economy and tight labor markets have raised inflation concerns,
and kept bond prices under pressure.
During the past year, stock prices of large companies have tended to move
consistently higher, with the pace accelerating during the last six months.
Meanwhile, interest rates have been very volatile, but generally have moved
higher since late 1996. Higher interest rates resulted in lower bond prices, and
have created a difficult environment for fixed-income investors.
ECONOMIC PERSPECTIVE
The U.S. economy has continued to confound the experts, but then it has always
tended to do what is least expected. While this economic expansion is already
longer than average, at six years old, the relatively slow pace of growth has
kept total growth this cycle well below average. The economy has been expected
to slow for some time now, given the heavily indebted consumer, a government
that is pressured to cut spending, and an aging capital spending cycle. However,
a strong job market, solid growth in personal income, and vastly improved
household wealth has resulted in high consumer confidence and spending. The
surprisingly strong consumer, coupled with a political system that delays real
budget cuts, and record spending for technological improvement by business, has
kept the economy much stronger over the past year than expected.
An important question for investors now is whether true inflationary pressures
will emerge, as is typical late in business cycles. The majority of economists
seem to agree that in the global economy, there are excesses of natural
resources, goods, and labor, which should keep inflation under control. However,
some economists are concerned that the strong job market will lead to wage
pressures and higher inflation. Current evidence supports the case that
inflation is not a major concern. However, given the poor history of economic
forecasts, it is important for investors to be mindful of potential inflation
surprises.
FIXED INCOME MARKET
The most important event for fixed income markets during the last six months was
probably the Federal Reserve Board's (the "Fed") decision to raise short-term
interest rates by 0.25% in late March of this year. That followed last
November's now infamous "irrational exuberance" comment by Fed Chairman
Greenspan which had led many to expect the increase sooner. So far in 1997,
inflation has proven very tame, running at around 2.0% versus last year's 3.3%
pace. This normally would have been good news for bonds, but the strong job
market and overall economic strength have been too much for bonds to overcome.
The weak bond market since early 1996 has been in sharp contrast to the strong
equity market. Of course, this has boosted investors' confidence in stocks,
relative to bonds. Without record foreign buying of U.S. bonds last year, the
performance gap between our bond and stock markets could have been even greater.
The weak bond market and benign inflation have resulted in high real interest
rates (nominal rates less inflation) that make bonds look quite attractive. Most
quantitative measures of the relative attractiveness between bonds and stocks
now favor bonds. History supports the importance of a balanced portfolio
including both bonds and stocks to provide a defensive hedge during periods of
stock market volatility. Although no one knows for certain when bonds will once
again provide attractive investment returns, their importance as part of a
prudent investment portfolio could easily surface during the next year.
Our family of funds includes fixed-income offerings designed to meet a variety
of needs. The investment objective of the SOUTHTRUST VULCAN BOND FUND is to
provide a level of total return consistent with a portfolio of high-quality debt
securities. The weighted-average maturity of the fund's holdings will generally
be between 5-10 years, but may be longer when bonds are considered to be
particularly attractive. The fund's average maturity is adjusted based upon
anticipated market conditions. Since we believe bonds are becoming increasingly
attractive, we have generally used any weakness in bond prices to lengthen
duration and maturity. Our focus is on high-quality securities likely to perform
best if the economy slows, raising credit concerns. We are positioning the
fund's portfolio for shareholders to potentially benefit from the next bull
market in bonds.
Meanwhile, the SOUTHTRUST VULCAN INCOME FUND invests in short and intermediate
maturity bonds and notes with an investment objective of providing current
income. The fund will pursue this objective while attempting to minimize
principal volatility. The fund invests in a portfolio of high-quality debt
securities with a weighted-average maturity of 1 1/2-5 years. Here again, we
have tended to extend maturities within our target range, but with an effort to
maximize current income potential.
For those desiring income and safety without price volatility, the objective of
the SOUTHTRUST VULCAN TREASURY OBLIGATIONS MONEY MARKET FUND is to provide as
high a level of current interest income as is consistent with maintaining
liquidity and stability of principal.* The fund invests solely in direct
obligations of the U.S. Treasury, consisting of Treasury bills and notes and
repurchase agreements collateralized by direct Treasury obligations. All
securities acquired will have remaining maturities of thirteen months or less,
and the dollar-weighted average portfolio maturity of the fund will not exceed
90-days. The yield of the fund is affected by changes in short-term interest
rates.
EQUITY REVIEW
Once again, the stock market got off to a strong start during the new year.
Stock indices have rocketed to all-time highs, in spite of a March correction in
large-cap stock indices, and significant weakness in small company stocks that
has lasted since mid-1996. The market's strength early in 1997 was fueled by
strong mutual fund cash inflows and generally better-than-expected fourth
quarter earnings reports. In March, stocks finally began to reflect the pressure
of higher bond yields, which had increased throughout the quarter. Mutual fund
inflows slowed from January's torrid pace, and the financial markets braced for
the first Fed tightening in over two years. The decline intensified during the
last few days of the quarter following the 25 basis point increase in the
federal funds target rate. An environment of Fed tightening is typically not
favorable for stocks, as it implies that the Fed perceives a near-term risk of
inflation. The rising interest rates and inflationary pressures reduce corporate
profitability, as the economy slows and borrowing costs rise. In turn, the
higher yields on bonds reduce the relative attractiveness of stocks.
After two years of spectacular stock market returns in an extremely favorable
environment of strong profitability and low inflation, the level of risk in the
market has increased substantially. There are several macro factors that could
create a challenging environment for stocks during the balance of 1997. The most
obvious factors include a less friendly Fed, relatively high valuations,
declining earnings momentum, moderation in mutual fund cash inflows, and the
advancing age of both the economic cycle and the bull market. We believe it is
probable that the Fed will increase rates one or two more times this year. If
the economy continues to surprise on the upside and/or if inflation turns out to
be a problem, a sharp market decline is possible. If, on the other hand, the
economy slows enough to allow a return to a benign monetary environment,
long-term interest rates decline, and corporate
* Money market funds seek to maintain a stable net asset value of $1.00 per
share. There is no assurance that they will be able to do so. An investment
in the fund is not insured or guaranteed by the U.S. government.
earnings demonstrate continued stability, higher stock prices are likely.
Increased caution, selectivity, and adherence to prudent investment disciplines
are especially important in the current difficult environment for equities, as
it appears to us that volatility will remain very high.
In spite of these concerns, the simple truth is that the environment for stock
investing has rarely been better. A surprisingly strong economy, without serious
inflationary pressures and with few of the normal excesses that usually lead to
recession, is very favorable for stocks. We see no reason to expect the
environment to materially change any time soon. So while your SOUTHTRUST VULCAN
STOCK FUND portfolio managers are cautious, having experienced many market
cycles, we also know enough not to fight this powerful bull market. We have not
raised a significant cash position, and do not plan to do so. Our constant
search is for solid companies with attractive earnings growth prospects which
are not fully reflected in their stock's price. The disciplined process we use
to accomplish this has led to a significant increase in more defensive stocks
such as telephones, while our weighting in technology stocks has at least
temporarily been reduced. The fund has also overweighted financial and
healthcare stocks that benefit from our country's aging population. Every
investment made in the fund weighs potential reward versus downside risk, a
discipline that often leads the fund to undervalued and overlooked stocks that
can exhibit defensive qualities if the market experiences turbulence.
Thank you for your continued confidence in our management. We look forward to
serving you during the next year.
SOUTHTRUST VULCAN BOND FUND
- -------------------------------------------------------------------------------
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 (the "Fund") from May 8, 1992, (start of
performance) to April 30, 1997, compared to the Lehman Brothers Intermediate
Government/Corporate Index ("LBIG/C")+
Graphic representation omitted; see Appendix A.
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.
+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. This index is
unmanaged.
++Total return quoted reflects all applicable sales charges and contingent
deferred sales charges. Subsequent to March 1, 1996, the sales charge on the
SouthTrust Vulcan Bond Fund has been changed to 3.50%.
SOUTHTRUST VULCAN STOCK FUND
- -------------------------------------------------------------------------------
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 (the "Fund") from May 8, 1992, (start of
performance) to April 30, 1997, compared to the Standard & Poor's 500 Index
("S&P 500")+
Graphic representation omitted; see Appendix B.
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 4.50% ($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.
+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. This
index is unmanaged.
++Total return quoted reflects all applicable sales charges and contingent
deferred sales charges. On March 1, 1996 the sales charge for SouthTrust Vulcan
Stock Fund changed 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 Stock Fund was changed back to 4.50%.
SOUTHTRUST VULCAN INCOME FUND
- -------------------------------------------------------------------------------
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 (the "Fund") from January 10, 1996, (start of
performance) to April 30, 1997, compared to the Merrill Lynch
Corporate/Government 1-5 Year Index ("MLC/G 1-5")+
Graphic representation omitted; see Appendix C.
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.
+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. This
index is unmanaged.
++Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
SOUTHTRUST VULCAN TREASURY OBLIGATIONS
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- ------------------------------------------------- ------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS--37.1%
- -----------------------------------------------------------------------------
U.S. TREASURY BILLS--9.4%
-------------------------------------------------
$15,000,000 5/29/1997 $ 14,941,550
-------------------------------------------------
20,000,000 6/5/1997 19,903,167
-------------------------------------------------
15,000,000 7/17/1997 14,837,177
------------------------------------------------- ------------
Total 49,681,894
------------------------------------------------- ------------
U.S. TREASURY NOTES--27.7%
-------------------------------------------------
25,000,000 8.500%, 5/15/1997 25,029,860
-------------------------------------------------
25,000,000 5.625%, 6/30/1997 25,015,904
-------------------------------------------------
40,000,000 5.875%, 7/31/1997 40,048,274
-------------------------------------------------
55,000,000 5.500%-5.750%, 9/30/1997 55,040,068
------------------------------------------------- ------------
Total 145,134,106
------------------------------------------------- ------------
TOTAL U.S. TREASURY OBLIGATIONS 194,816,000
------------------------------------------------- ------------
(A) REPURCHASE AGREEMENTS--62.8%
- -----------------------------------------------------------------------------
Barclays de Zoete Wedd Securities, Inc., 5.320%, 50,000,000
50,000,000 5/1/1997
-------------------------------------------------
24,400,000 Credit Suisse First Boston, 5.200%, 5/1/1997 24,400,000
-------------------------------------------------
Donaldson, Lufkin and Jenrette Securities Corp., 50,000,000
50,000,000 5.350%, 5/1/1997
-------------------------------------------------
120,000,000 Dresdner Securities (USA), Inc., 5.320%, 5/1/1997 120,000,000
-------------------------------------------------
25,000,000 Lehman Brothers, Inc., 5.370%, 5/1/1997 25,000,000
-------------------------------------------------
35,000,000 Merrill Lynch, Pierce, Fenner and Smith, 5.250%,
5/1/1997 35,000,000
-------------------------------------------------
25,000,000 Morgan Stanley Group, Inc., 5.030%, 5/1/1997 25,000,000
------------------------------------------------- ------------
TOTAL REPURCHASE AGREEMENTS 329,400,000
------------------------------------------------- ------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $524,216,000
------------------------------------------------- ------------
</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
($524,462,069) at April 30, 1997.
(See Notes which are an integral part of the Financial Statements)
VULCAN BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ---------------------------------------------------- -----------
<C> <S> <C>
LONG-TERM INVESTMENTS--96.9%
- ------------------------------------------------------------------------------
CORPORATE BONDS--30.6%
- ------------------------------------------------------------------------------
BANKING--6.7%
----------------------------------------------------
Bank of New York Co., Inc., Sub. Note, 8.50%, $ 2,683,897
$2,500,000 12/15/2004
----------------------------------------------------
3,500,000 Northern Trust Corp., Sub. Note, 6.70%, 9/15/2005 3,391,829
---------------------------------------------------- -----------
Total 6,075,726
---------------------------------------------------- -----------
COMMERCIAL SERVICES--2.1%
----------------------------------------------------
2,000,000 Equifax, Inc., Sr. Note, 6.50%, 6/15/2003 1,921,328
---------------------------------------------------- -----------
CONSUMER NON-DURABLES--2.7%
----------------------------------------------------
Philip Morris Cos., Inc., Unsecd. Note, 7.125%, 1,467,273
1,500,000 10/1/2004
----------------------------------------------------
Philip Morris Cos., Inc., Unsecd. Note, 7.125%, 1,004,281
1,000,000 12/1/1999
---------------------------------------------------- -----------
Total 2,471,554
---------------------------------------------------- -----------
CONSUMER SERVICES--2.2%
----------------------------------------------------
2,000,000 Gannett Co., Inc., Unsecd. Note, 5.85%, 5/1/2000 1,954,484
---------------------------------------------------- -----------
FINANCE--11.0%
----------------------------------------------------
Associates Corp. of North America, Sr. Note, 6.00%, 1,956,472
2,000,000 6/15/2000
----------------------------------------------------
Ford Motor Credit Corp., Unsecd. Note, 7.75%, 2,561,435
2,500,000 10/1/1999
----------------------------------------------------
General Motors Acceptance Corp., Note, 6.65%, 963,180
1,000,000 11/15/2005
----------------------------------------------------
National Rural Utilities Cooperative Finance Corp., 1,992,748
2,000,000 Sr. Note, 6.75%, 9/1/2001
----------------------------------------------------
Standard Credit Card Master Trust 1991-6, Class A, 2,558,550
2,500,000 7.875%, 1/7/1998
---------------------------------------------------- -----------
Total 10,032,385
---------------------------------------------------- -----------
TRANSPORTATION--1.1%
----------------------------------------------------
Norfolk Southern Corp., Equip. Trust, Series C, 1,040,841
1,000,000 7.75%, 8/15/2006
---------------------------------------------------- -----------
UTILITIES--4.8%
----------------------------------------------------
3,500,000 Georgia Power Co., 1st Mtg. Bond, 6.625%, 4/1/2003 3,401,930
----------------------------------------------------
New England Telephone & Telegraph, Unsecd. Note, 1,000,887
1,000,000 6.25%, 12/15/1997
---------------------------------------------------- -----------
Total 4,402,817
---------------------------------------------------- -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST $27,200,320) 27,899,135
---------------------------------------------------- -----------
</TABLE>
VULCAN BOND FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ---------------------------------------------- -----------
<C> <S> <C>
LONG-TERM INVESTMENTS--CONTINUED
- ------------------------------------------------------------------------
GOVERNMENT AGENCIES--24.4%
- ------------------------------------------------------------------------
FEDERAL HOME LOAN BANK--10.4%
----------------------------------------------
$2,995,652 7.00%, 2/1/2027 $ 2,914,886
----------------------------------------------
2,341,236 7.50%, 5/1/2011 2,370,008
----------------------------------------------
2,326,020 8.00%, 3/1/2000 2,363,443
----------------------------------------------
1,827,151 8.00%, 1/1/2007 1,874,600
---------------------------------------------- -----------
Total 9,522,937
---------------------------------------------- -----------
FEDERAL HOME LOAN MORTGAGE CORP.--1.7%
----------------------------------------------
1,467,753 9.50%, 2/15/2020 1,563,243
---------------------------------------------- -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--6.8%
----------------------------------------------
1,980,824 7.50%, 6/1/2002 2,007,701
----------------------------------------------
2,500,000 8.25%, 10/12/2004 2,566,240
----------------------------------------------
1,487,006 10.00%, 1/1/2020 1,625,018
---------------------------------------------- -----------
Total 6,198,959
---------------------------------------------- -----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--5.5%
----------------------------------------------
1,398,397 7.00%, 8/15/2008 1,392,716
----------------------------------------------
723,590 8.00%, 5/15/2022 735,121
----------------------------------------------
1,779,125 8.50%, 10/15/2009 1,844,730
----------------------------------------------
984,964 8.50%, 5/15/2024 1,019,130
---------------------------------------------- -----------
Total 4,991,697
---------------------------------------------- -----------
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST 22,276,836
$22,100,429)
---------------------------------------------- -----------
U.S. TREASURY--41.9%
- ------------------------------------------------------------------------
U.S. TREASURY SECURITIES--3.9%
----------------------------------------------
8,050,000 STRIP, 5/15/2009 3,516,321
---------------------------------------------- -----------
U.S. TREASURY BONDS--21.3%
----------------------------------------------
4,000,000 6.875%, 8/15/2025 3,925,000
----------------------------------------------
3,000,000 7.125%, 2/15/2023 3,020,625
----------------------------------------------
4,000,000 7.25%, 5/15/2016 4,087,500
----------------------------------------------
2,000,000 7.25%, 8/15/2022 2,041,250
----------------------------------------------
4,000,000 7.50%, 11/15/2016 4,188,748
----------------------------------------------
</TABLE>
VULCAN BOND FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ----------------------------------------------- -----------
<C> <S> <C> <C>
LONG-TERM INVESTMENTS--CONTINUED
- -----------------------------------------------------------------------------
U.S. TREASURY--CONTINUED
- -----------------------------------------------------------------------------
$1,000,000 7.875%, 2/15/2021 $ 1,091,562
-----------------------------------------------
1,000,000 8.00%, 11/15/2021 1,107,187
----------------------------------------------- -----------
Total 19,461,872
----------------------------------------------- -----------
U.S. TREASURY NOTES--16.7%
-----------------------------------------------
1,750,000 6.00%, 8/15/1999 1,736,875
-----------------------------------------------
3,000,000 6.25%, 10/31/2001 2,963,436
-----------------------------------------------
2,500,000 6.25%, 2/15/2007 2,417,967
-----------------------------------------------
1,000,000 6.50%, 4/30/1999 1,004,375
-----------------------------------------------
1,000,000 6.50%, 8/15/2005 985,000
-----------------------------------------------
1,000,000 6.75%, 6/30/1999 1,008,750
-----------------------------------------------
1,000,000 7.00%, 4/15/1999 1,013,437
-----------------------------------------------
1,000,000 7.125%, 10/15/1998 1,013,750
-----------------------------------------------
1,000,000 8.00%, 5/15/2001 1,051,250
-----------------------------------------------
1,000,000 8.00%, 8/15/1999 1,034,687
-----------------------------------------------
1,000,000 8.125%, 2/15/1998 1,016,875
----------------------------------------------- -----------
Total 15,246,402
----------------------------------------------- -----------
TOTAL U.S. TREASURY (IDENTIFIED COST 38,224,595
$38,530,864)
----------------------------------------------- -----------
TOTAL LONG-TERM INVESTMENTS (IDENTIFIED COST 88,400,566
$87,831,613)
----------------------------------------------- -----------
SHORT-TERM INVESTMENTS--0.8%
- -----------------------------------------------------------------------------
MUTUAL FUNDS--0.8%
-----------------------------------------------
Seven Seas Series Government Fund (at net asset 684,769
684,769 value)
----------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST
$88,516,382)(A) $89,085,335
----------------------------------------------- -----------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to $88,539,195. The
net unrealized appreciation of investments on a federal tax basis amounts to
$568,953 which is comprised of $1,460,114 appreciation and $891,161
depreciation at April 30, 1997.
Note: The categories of investments are shown as a percentage of net assets
($91,184,573) at April 30, 1997.
The following acronym is used throughout this portfolio:
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, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
----------- --------------------------------- ----------
<C> <S> <C>
COMMON STOCKS--94.0%
- -----------------------------------------------------------
CAPITAL GOODS--8.6%
---------------------------------
37,700 Dover Corp. $1,998,100
---------------------------------
57,500 Fluor Corp. 3,162,500
---------------------------------
41,900 General Electric Co. 4,645,662
---------------------------------
153,400 (a)Jacobs Engineering Group, Inc. 3,911,700
---------------------------------
144,800 (a)Litton Industries, Inc. 6,135,900
---------------------------------
56,100 Rockwell International Corp. 3,730,650
--------------------------------- ----------
Total 23,584,512
--------------------------------- ----------
CONSUMER DURABLES--1.5%
---------------------------------
77,000 Goodyear Tire & Rubber Co. 4,052,125
--------------------------------- ----------
CONSUMER NON-DURABLES--9.3%
---------------------------------
43,000 CPC International, Inc. 3,552,875
---------------------------------
168,800 IBP, Inc. 4,009,000
---------------------------------
91,000 PepsiCo, Inc. 3,173,625
---------------------------------
127,200 Philip Morris Cos., Inc. 5,008,500
---------------------------------
96,650 Hanson PLC, ADR 2,343,762
---------------------------------
94,700 Sara Lee Corp. 3,977,400
---------------------------------
127,600 UST, Inc. 3,333,550
--------------------------------- ----------
Total 25,398,712
--------------------------------- ----------
CONSUMER SERVICES--1.2%
---------------------------------
39,300 Disney (Walt) Co. 3,222,600
--------------------------------- ----------
ENERGY--5.3%
---------------------------------
51,900 Amoco Corp. 4,340,137
---------------------------------
128,100 Coastal Corp. 6,084,750
---------------------------------
32,000 Mobil Corp. 4,160,000
--------------------------------- ----------
Total 14,584,887
--------------------------------- ----------
FINANCE--16.1%
---------------------------------
92,200 Bank of New York Co., Inc. 3,641,900
---------------------------------
46,000 Chase Manhattan Corp. 4,260,750
---------------------------------
</TABLE>
SOUTHTRUST VULCAN STOCK FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- ------------------------------------------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------
FINANCE--CONTINUED
-------------------------------------------
79,600 Chubb Corp. $ 4,596,900
-------------------------------------------
113,700 Federal National Mortgage Association 4,675,912
-------------------------------------------
120,400 KeyCorp 6,275,850
-------------------------------------------
108,400 NationsBank Corp. 6,544,650
-------------------------------------------
139,650 Old Republic International Corp. 3,945,113
-------------------------------------------
58,300 Providian Corp. 3,366,825
-------------------------------------------
48,000 Reliastar Financial Corp. 2,904,000
-------------------------------------------
77,500 SunAmerica, Inc. 3,565,000
------------------------------------------- -----------
Total 43,776,900
------------------------------------------- -----------
HEALTH CARE--13.8%
-------------------------------------------
115,400 Bristol-Myers Squibb Co. 7,558,700
-------------------------------------------
151,950 Columbia/HCA Healthcare Corp. 5,318,250
-------------------------------------------
126,700 Integrated Health Services, Inc. 4,070,237
-------------------------------------------
101,900 Mallinckrodt, Inc. 3,706,613
-------------------------------------------
157,000 (a)MedPartners, Inc. 2,865,250
-------------------------------------------
21,971 (a)PacifiCare Health Systems, Inc., Class A 1,686,274
-------------------------------------------
34,695 (a)PacifiCare Health Systems, Inc., Class B 2,784,274
-------------------------------------------
69,400 Pfizer, Inc. 6,662,400
-------------------------------------------
3,601 Talbert Medical Management Corp., Rights 63,018
-------------------------------------------
111,240 (a)Tenet Healthcare Corp. 2,892,240
------------------------------------------- -----------
Total 37,607,256
------------------------------------------- -----------
MULTI INDUSTRY--0.9%
-------------------------------------------
53,500 Tenneco, Inc. 2,133,313
------------------------------------------- -----------
RAW MATERIALS--5.1%
-------------------------------------------
105,600 International Paper Co. 4,461,600
-------------------------------------------
181,042 (a)Millennium Chemicals, Inc. 3,213,496
-------------------------------------------
46,400 Praxair, Inc. 2,395,400
-------------------------------------------
145,200 (a)Wolverine Tube, Inc. 3,775,200
------------------------------------------- -----------
Total 13,845,696
------------------------------------------- -----------
</TABLE>
SOUTHTRUST VULCAN STOCK FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------- --------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- ---------------------------------------------------------------------------
RETAIL--5.3%
---------------------------------------------------
120,400 (a)Carson Pirie Scott & Co. $ 3,581,900
---------------------------------------------------
78,000 Home Depot, Inc. 4,524,000
---------------------------------------------------
200,000 (a)Office Depot, Inc. 2,800,000
---------------------------------------------------
130,000 Wal-Mart Stores, Inc. 3,672,500
--------------------------------------------------- ------------
Total 14,578,400
--------------------------------------------------- ------------
TECHNOLOGY--12.6%
---------------------------------------------------
123,600 Hewlett-Packard Co. 6,489,000
---------------------------------------------------
35,700 Intel Corp. 5,466,562
---------------------------------------------------
43,500 International Business Machines Corp. 6,992,625
---------------------------------------------------
82,500 Motorola, Inc. 4,723,125
---------------------------------------------------
127,200 (a)Seagate Technology, Inc. 5,835,300
---------------------------------------------------
171,600 (a)Sun Microsystems, Inc. 4,944,225
--------------------------------------------------- ------------
Total 34,450,837
--------------------------------------------------- ------------
TELECOMMUNICATION SERVICES--8.6%
---------------------------------------------------
75,000 Ameritech Corp. 4,584,375
---------------------------------------------------
73,500 Bell Atlantic Corp. 4,979,625
---------------------------------------------------
106,300 GTE Corp. 4,876,512
---------------------------------------------------
126,900 MCI Communications Corp. 4,838,063
---------------------------------------------------
94,800 Sprint Corp. 4,159,350
--------------------------------------------------- ------------
Total 23,437,925
--------------------------------------------------- ------------
TRANSPORTATION--1.6%
---------------------------------------------------
95,100 CSX Corp. 4,434,037
--------------------------------------------------- ------------
UTILITIES--4.1%
---------------------------------------------------
76,200 Consolidated Edison Co. 2,114,550
---------------------------------------------------
102,600 Houston Industries, Inc. 2,052,000
---------------------------------------------------
42,600 Northern States Power Co. 1,938,300
---------------------------------------------------
76,850 (a)Energy Group PLC, ADR 2,411,169
---------------------------------------------------
156,100 Westcoast Energy, Inc. 2,673,213
--------------------------------------------------- ------------
Total 11,189,232
--------------------------------------------------- ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $195,725,486) 256,296,432
--------------------------------------------------- ------------
</TABLE>
SOUTHTRUST VULCAN STOCK FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
----------- ----------------------------------------------- ------------
<C> <S> <C>
PREFERRED STOCKS--0.3%
- ---------------------------------------------------------------------------
HEALTH SERVICES--0.3%
-----------------------------------------------
25,500 PacifiCare Health Systems, Inc., Conv., Pfd.,
Series C, $1.00
(IDENTIFIED COST $843,094) $ 796,875
----------------------------------------------- ------------
MUTUAL FUNDS--1.2%
- ---------------------------------------------------------------------------
Seven Seas Series Government Fund (at net asset 3,377,307
3,377,307 value)
----------------------------------------------- ------------
(B)(C) REPURCHASE AGREEMENT--4.4%
- ---------------------------------------------------------------------------
$12,000,000 Morgan Stanley Group, Inc., 5.30%, 5/6/1997 (AT
AMORTIZED COST) 12,000,000
----------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $272,470,614
$211,945,887)(D)
----------------------------------------------- ------------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement is fully collateralized by U.S. Treasury
obligations based on the market prices at the date of the portfolio.
(c) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days.
(d) The cost of investments for federal tax purposes amounts to $211,945,887.
The net unrealized appreciation of investments on a federal tax basis
amounts to $60,524,727 which is comprised of $64,970,965 appreciation and
$4,446,238 depreciation at April 30, 1997.
Note: The categories of investments are shown as a percentage of net assets
($272,664,726) at April 30, 1997.
The following acronyms are used throughout this portfolio:
ADR--American Depositary Receipt
PLC--Public Limited Company
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN INCOME FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ---------------------------------------------------- -----------
<C> <S> <C>
CORPORATE BONDS--19.7%
- ------------------------------------------------------------------------------
FINANCE--7.9%
----------------------------------------------------
$1,000,000 Ford Motor Credit Corp., 8.20%, 2/15/2002 $ 1,046,836
----------------------------------------------------
1,000,000 General Motors Acceptance Corp., 6.625%, 10/1/2002 982,032
----------------------------------------------------
1,000,000 International Lease Finance Corp., 7.00%, 6/1/1998 1,006,701
---------------------------------------------------- -----------
Total 3,035,569
---------------------------------------------------- -----------
BANKING--2.5%
----------------------------------------------------
1,000,000 NationsBank Corp., 5.125%, 9/15/1998 983,193
---------------------------------------------------- -----------
CONSUMER NON-DURABLES--4.0%
----------------------------------------------------
500,000 Procter & Gamble Co., Deb., 8.70%, 8/1/2001 534,186
----------------------------------------------------
1,000,000 Philip Morris Cos., Inc., Note, 7.625%, 5/15/2002 1,016,351
---------------------------------------------------- -----------
Total 1,550,537
---------------------------------------------------- -----------
FINANCIAL SERVICES--2.7%
----------------------------------------------------
1,000,000 Merrill Lynch & Co., Inc., 8.375%, 2/9/2000 1,040,751
---------------------------------------------------- -----------
RETAIL--1.3%
----------------------------------------------------
500,000 Dillard Department Stores, Inc., 7.375%, 6/15/1999 508,277
---------------------------------------------------- -----------
TRANSPORTATION--1.3%
----------------------------------------------------
Norfolk & Western Railroad Co., Equip. Trust, 8.75%, 509,104
500,000 2/1/1998
---------------------------------------------------- -----------
TOTAL CORPORATE BONDS (IDENTIFIED COST $7,508,180) 7,627,431
---------------------------------------------------- -----------
GOVERNMENT AGENCIES--9.0%
- ------------------------------------------------------------------------------
FEDERAL HOME LOAN BANK--3.9%
----------------------------------------------------
1,500,000 6.58%, 1/23/2002 1,489,215
---------------------------------------------------- -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--5.1%
----------------------------------------------------
2,000,000 6.30%, 12/3/2001 1,962,014
---------------------------------------------------- -----------
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST 3,451,229
$3,498,609)
---------------------------------------------------- -----------
MORTGAGE BACKED SECURITIES--27.7%
- ------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION--8.7%
----------------------------------------------------
1,879,315 7.50%, 2/1/2000 1,902,034
----------------------------------------------------
</TABLE>
SOUTHTRUST VULCAN INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- -------------------------------------------------- -----------
<C> <S> <C>
MORTGAGE BACKED SECURITIES--CONTINUED
- ----------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION--CONTINUED
--------------------------------------------------
$1,497,826 7.00%, 2/1/2027 $ 1,457,443
-------------------------------------------------- -----------
Total 3,359,477
-------------------------------------------------- -----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--14.7%
--------------------------------------------------
862,122 8.00%, 8/1/2003 881,838
--------------------------------------------------
1,325,390 8.00%, 5/1/2006 1,357,715
--------------------------------------------------
1,548,862 7.00%, 4/1/1999 1,556,202
--------------------------------------------------
1,897,093 7.00%, 5/1/2003 1,900,297
-------------------------------------------------- -----------
Total 5,696,052
-------------------------------------------------- -----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--4.3%
--------------------------------------------------
768,284 8.50%, 7/15/2024 797,931
--------------------------------------------------
820,476 8.00%, 10/15/2009 843,211
-------------------------------------------------- -----------
Total 1,641,142
-------------------------------------------------- -----------
TOTAL MORTGAGE BACKED SECURITIES (IDENTIFIED COST 10,696,671
$10,708,133)
-------------------------------------------------- -----------
U.S. TREASURY OBLIGATIONS--40.2%
- ----------------------------------------------------------------------------
U.S. TREASURY BILL--2.6%
--------------------------------------------------
1,000,000 7/31/1997 987,183
-------------------------------------------------- -----------
U.S. TREASURY NOTES--37.6%
--------------------------------------------------
1,000,000 7.125%, 10/15/1998 1,013,750
--------------------------------------------------
1,000,000 7.125%, 2/29/2000 1,017,812
--------------------------------------------------
1,000,000 7.00%, 4/15/1999 1,013,437
--------------------------------------------------
1,500,000 6.75%, 6/30/1999 1,513,125
--------------------------------------------------
3,000,000 6.375%, 1/15/1999 3,009,375
--------------------------------------------------
2,000,000 6.375%, 5/15/1999 2,003,124
--------------------------------------------------
2,000,000 6.375%, 3/31/2001 1,988,750
--------------------------------------------------
2,000,000 6.125%, 3/31/1998 2,004,374
--------------------------------------------------
1,000,000 5.625%, 1/31/1998 998,125
-------------------------------------------------- -----------
Total 14,561,872
-------------------------------------------------- -----------
TOTAL U.S. TREASURY OBLIGATIONS (IDENTIFIED COST 15,549,055
$15,558,103)
-------------------------------------------------- -----------
</TABLE>
SOUTHTRUST VULCAN INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------------------------------------------- -----------
<C> <S> <C>
MUTUAL FUND SHARES--2.2%
- -----------------------------------------------------------------------------
Seven Seas Series Government Fund (AT NET ASSET $ 849,825
849,825 VALUE)
--------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $38,122,850)(A) $38,174,211
--------------------------------------------------- -----------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to $38,122,850. The
net unrealized appreciation of investments on a federal tax basis amounts to
$51,361 which is comprised of $230,453 appreciation and $179,092
depreciation at April 30, 1997.
Note: The categories of investments are shown as a percentage of net assets
($38,597,602) at April 30, 1997.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY
OBLIGATIONS
MONEY BOND STOCK INCOME
MARKET FUND FUND FUND FUND
- ---------------------------------------- ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
- ----------------------------------------
Investments in repurchase agreements $329,400,000 $ -- $ 12,000,000 $ --
- ----------------------------------------
Investments in securities 194,816,000 89,085,335 260,470,614 38,174,211
- ---------------------------------------- ------------ ----------- ------------ -----------
Total investments in securities, at $524,216,000 $89,085,335 $272,470,614 $38,174,211
value ------------ ----------- ------------ -----------
- ----------------------------------------
Cash 939 -- -- --
- ----------------------------------------
Income receivable 2,345,589 1,285,287 227,025 476,759
- ----------------------------------------
Receivable for investments sold -- 3,076,375 68,891 --
- ----------------------------------------
Receivable for shares sold -- 841,394 69,425 145,402
- ---------------------------------------- ------------ ----------- ------------ -----------
Total assets 526,562,528 94,288,391 272,835,955 38,796,372
- ---------------------------------------- ------------ ----------- ------------ -----------
LIABILITIES:
- ----------------------------------------
Payable for investments purchased -- 3,020,988 -- --
- ----------------------------------------
Payable for shares redeemed -- 51,384 131,546 183,048
- ----------------------------------------
Income distribution payable 2,041,955 -- -- --
- ----------------------------------------
Accrued expenses 58,504 31,446 39,683 15,722
- ---------------------------------------- ------------ ----------- ------------ -----------
Total liabilities 2,100,459 3,103,818 171,229 198,770
- ---------------------------------------- ------------ ----------- ------------ -----------
NET ASSETS CONSIST OF:
- ----------------------------------------
Paid in capital 524,462,069 91,505,934 198,356,104 40,288,292
- ----------------------------------------
Net unrealized appreciation
(depreciation) of investments -- 568,953 60,524,727 51,361
- ----------------------------------------
Accumulated net realized gain (loss) on
investments -- (1,001,411) 13,691,901 (1,786,134)
- ----------------------------------------
Undistributed net investment income -- 111,097 91,994 44,083
- ---------------------------------------- ------------ ----------- ------------ -----------
Total Net Assets $524,462,069 $91,184,573 $272,664,726 $38,597,602
- ---------------------------------------- ------------ ----------- ------------ -----------
Shares Outstanding 524,462,069 9,166,016 17,244,227 3,985,474
- ---------------------------------------- ------------ ----------- ------------ -----------
NET ASSET VALUE PER SHARE: $ 1.00 $ 9.95 $ 15.81 $ 9.68
(Net Assets / Shares Outstanding) ------------ ----------- ------------ -----------
- ----------------------------------------
Offering Price Per Share(a) -- $ 10.31(b) $ 16.55(c) $ 10.03(b)
- ---------------------------------------- ------------ ----------- ------------ -----------
Redemption Proceeds Per Share(a) -- $ 9.85(d) $ 15.65(d) $ 9.58(d)
- ---------------------------------------- ------------ ----------- ------------ -----------
Investments, at identified cost -- $88,516,382 $211,945,887 $38,122,850
- ---------------------------------------- ------------ ----------- ------------ -----------
Investments, at tax cost -- $88,539,195 $211,945,887 $38,122,850
- ---------------------------------------- ------------ ----------- ------------ -----------
</TABLE>
(a)See "How to Purchase, Exchange and Redeem Shares" in the prospectus.
(b) Computation of offering price: 100/96.5 of net asset value.
(c)Computation of offering price: 100/95.5 of net asset value.
(d) 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, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY
OBLIGATIONS
MONEY MARKET BOND STOCK INCOME
FUND FUND FUND FUND
- ------------------------- ------------ ---------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------
Dividends $ -- $ -- $ 3,957,093 $ --
- -------------------------
Interest 22,874,042 6,198,029 1,332,363 2,694,807
- ------------------------- ----------- ---------- ----------- -----------
Total income 22,874,042 6,198,029 5,289,456 2,694,807
- ------------------------- ----------- ---------- ----------- -----------
EXPENSES:
- -------------------------
Investment advisory fee 2,163,019 528,799 1,750,919 248,407
- -------------------------
Administrative personnel
and services fee 526,824 107,564 284,437 100,160
- -------------------------
Custodian fees 94,420 27,124 40,962 23,288
- -------------------------
Transfer and dividend
disbursing agent fees and
expenses 52,535 34,288 38,744 24,658
- -------------------------
Directors'/Trustees' fees 15,773 4,902 11,151 2,236
- -------------------------
Auditing fees 9,982 9,887 10,803 7,217
- -------------------------
Legal fees 8,547 2,066 7,795 4,488
- -------------------------
Portfolio accounting fees 98,212 56,490 69,974 47,391
- -------------------------
Share registration costs 83,832 21,440 25,074 43,805
- -------------------------
Printing and postage 7,213 1,973 6,703 7,216
- -------------------------
Insurance premiums 8,489 2,725 6,287 2,285
- -------------------------
Miscellaneous 10,707 2,373 4,360 3,390
- ------------------------- ----------- ---------- ----------- -----------
Total expenses 3,079,553 799,631 2,257,209 514,541
- ------------------------- ----------- ---------- ----------- -----------
Waivers--
- -------------------------
Waiver of investment
advisory fee (865,208) (44,067) (70,037) (113,723)
- -------------------------
Waiver of administrative
personnel and services -- -- -- (21,981)
fee ----------- ---------- ----------- -----------
- -------------------------
Total waivers (865,208) (44,067) (70,037) (135,704)
- ------------------------- ----------- ---------- ----------- -----------
Net expenses 2,214,345 755,564 2,187,172 378,837
- ------------------------- ----------- ---------- ----------- -----------
Net investment 20,659,697 5,442,465 3,102,284 2,315,970
income ----------- ---------- ----------- -----------
- -------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
- -------------------------
Net realized gain (loss)
on investments -- (15,674) 19,606,552 (1,685,387)
- -------------------------
Change in unrealized
appreciation
(depreciation) of -- (288,699) 20,216,321 1,220,369
investments ----------- ---------- ----------- -----------
- -------------------------
Net realized and
unrealized gain (loss) -- (304,373) 39,822,873 (465,018)
on investments ----------- ---------- ----------- -----------
- -------------------------
Change in net assets $20,659,697 $5,138,092 $42,925,157 $ 1,850,952
resulting from operations ----------- ---------- ----------- -----------
- -------------------------
</TABLE>
(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,
-------------------------------- --------------------------
1997 1996 1997 1996
- ------------------------ --------------- --------------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
- ------------------------
OPERATIONS--
- ------------------------
Net investment income $ 20,659,697 $ 15,808,087 $ 5,442,465 $ 5,147,356
- ------------------------
Net realized gain (loss)
on investments -- -- (15,674) 86,918
- ------------------------
Net change in unrealized
appreciation
(depreciation)
of investments -- -- (288,699) 63,058
- ------------------------ --------------- --------------- ------------ ------------
Change in net assets
resulting from
operations 20,659,697 15,808,087 5,138,092 5,297,332
- ------------------------ --------------- --------------- ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS--
- ------------------------
Distributions from net
investment income (20,659,697) (15,808,087) (5,678,876) (4,879,000)
- ------------------------ --------------- --------------- ------------ ------------
Change in net assets
from distributions to
shareholders (20,659,697) (15,808,087) (5,678,876) (4,879,000)
- ------------------------ --------------- --------------- ------------ ------------
SHARE TRANSACTIONS--
- ------------------------
Proceeds from sale of
shares 1,208,046,850 1,137,724,946 32,302,907 20,766,411
- ------------------------
Net asset value of
shares issued to
shareholders
in payment of
distributions declared 629,753 162,859 28,092 31,087
- ------------------------
Cost of shares redeemed (1,129,943,491) (1,006,358,894) (23,862,729) (14,367,477)
- ------------------------ --------------- --------------- ------------ ------------
Change in net assets
resulting from share
transactions 78,733,112 131,528,911 8,468,270 6,430,021
- ------------------------ --------------- --------------- ------------ ------------
Change in net assets 78,733,112 131,528,911 7,927,486 6,848,353
- ------------------------
NET ASSETS:
- ------------------------
Beginning of period 445,728,957 314,200,046 83,257,087 76,408,734
- ------------------------ --------------- --------------- ------------ ------------
End of period $ 524,462,069 $ 445,728,957 $ 91,184,573 $ 83,257,087
- ------------------------ --------------- --------------- ------------ ------------
Undistributed net
investment income
included
in net assets at the end
of the period $ -- $ -- $ 111,097 $ 343,888
- ------------------------ --------------- --------------- ------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK INCOME
FUND FUND
-------------------------- -------------------------
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
-------------------------- -------------------------
1997 1996 1997 1996*
- ------------------------ ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
- ------------------------
OPERATIONS--
- ------------------------
Net investment income $ 3,102,284 $ 2,938,420 $ 2,315,970 $ 1,086,393
- ------------------------
Net realized gain (loss)
on investments 19,606,552 15,684,545 (1,685,387) (100,747)
- ------------------------
Net change in unrealized
appreciation
(depreciation)
of investments 20,216,321 27,055,507 1,220,369 (1,169,008)
- ------------------------ ------------ ------------ ------------ -----------
Change in net assets
resulting from
operations 42,925,157 45,678,472 1,850,952 (183,362)
- ------------------------ ------------ ------------ ------------ -----------
DISTRIBUTIONS TO
SHAREHOLDERS--
- ------------------------
Distributions from net
investment income (3,209,583) (2,853,915) (2,329,572) (1,028,708)
- ------------------------
Distributions from net
realized gain on
investment transactions (17,630,011) (5,617,636) -- --
- ------------------------ ------------ ------------ ------------ -----------
Change in net assets
from distributions to
shareholders (20,839,594) (8,471,551) (2,329,572) (1,028,708)
- ------------------------ ------------ ------------ ------------ -----------
SHARE TRANSACTIONS--
- ------------------------
Proceeds from sale of
shares 58,030,705 57,273,724 10,063,184 82,289,179
- ------------------------
Net asset value of
shares issued to
shareholders
in payment of
distributions declared 16,925,121 217,397 -- --
- ------------------------
Cost of shares redeemed (28,797,907) (28,557,564) (49,133,533) (2,930,538)
- ------------------------ ------------ ------------ ------------ -----------
Change in net assets
resulting from share
transactions 46,157,919 28,933,557 (39,070,349) 79,358,641
- ------------------------ ------------ ------------ ------------ -----------
Change in net assets 68,243,482 66,140,478 (39,548,969) 78,146,571
- ------------------------
NET ASSETS:
- ------------------------
Beginning of period 204,421,244 138,280,766 78,146,571 --
- ------------------------ ------------ ------------ ------------ -----------
End of period $272,664,726 $204,421,244 $ 38,597,602 $78,146,571
- ------------------------ ------------ ------------ ------------ -----------
Undistributed net
investment income
included
in net assets at the end
of the period $ 91,994 $ 199,293 $ 44,083 $ 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>
NET
REALIZED
AND DISTRIBUTIONS
NET ASSET UNREALIZED DISTRIBUTIONS FROM NET
VALUE, NET GAIN(LOSS) TOTAL FROM FROM NET REALIZED
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT GAIN ON TOTAL
YEAR ENDED APRIL 30, OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME INVESTMENTS DISTRIBUTIONS
- -------------------- --------- ---------- ----------- ---------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
TREASURY OBLIGATIONS
MONEY MARKET FUND
1993(a) $ 1.00 0.03 -- 0.03 (0.03) -- (0.03)
1994 $ 1.00 0.03 -- 0.03 (0.03) -- (0.03)
1995 $ 1.00 0.05 -- 0.05 (0.05) -- (0.05)
1996 $ 1.00 0.05 -- 0.05 (0.05) -- (0.05)
1997 $ 1.00 0.05 -- 0.05 (0.05) -- (0.05)
BOND FUND
1993(a) $10.00 0.66 0.69 1.35 (0.62) (0.02) (0.64)
1994 $10.71 0.63 (0.58) 0.05 (0.65) (0.07) (0.72)
1995 $10.04 0.61 (0.09) 0.52 (0.61) -- (0.61)
1996 $ 9.95 0.59 0.03 0.62 (0.56) -- (0.56)
1997 $10.01 0.61 (0.03) 0.58 (0.64) -- (0.64)
STOCK FUND
1993(a) $10.00 0.19 0.35 0.54 (0.18) -- (0.18)
1994 $10.36 0.19 (0.28) (0.09) (0.19) -- (0.19)
1995 $10.08 0.20 1.43 1.63 (0.20) -- (0.20)
1996 $11.51 0.23 3.33 3.56 (0.23) (0.44) (0.67)
1997 $14.40 0.20 2.59 2.79 (0.21) (1.17) (1.38)
INCOME FUND
1996(e) $10.00 0.16 (0.25) (0.09) (0.14) -- (0.14)
1997 $ 9.77 0.56 (0.09) 0.47 (0.56) -- (0.56)
</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) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Computed on an annualized basis.
(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)
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
NET ASSET -------------------------------------------- NET ASSETS,
VALUE, NET END OF PORTFOLIO AVERAGE
END OF TOTAL INVESTMENT EXPENSE/REIMBURSEMENT PERIOD TURNOVER COMMISSION
PERIOD RETURN(B) EXPENSES INCOME WAIVER(C) (000 OMITTED) RATE PAID
- --------- --------- -------- ---------- --------------------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1.00 2.93% 0.39%(d) 2.93%(d) 0.36%(d) $194,771 $ -- --
$ 1.00 2.83% 0.40% 2.81% 0.33% $278,924 $ -- --
$ 1.00 4.62% 0.43% 4.56% 0.30% $314,200 $ -- --
$ 1.00 5.26% 0.48% 5.11% 0.22% $445,729 $ -- --
$ 1.00 4.88% 0.51% 4.78% 0.20% $524,462 $ -- --
$10.71 13.44% 0.39%(d) 6.53%(d) 0.59%(d) $ 25,989 19% --
$10.04 0.33% 0.51% 5.97% 0.58% $ 32,767 6% --
$ 9.95 5.41% 0.75% 6.29% 0.28% $ 76,409 48% --
$10.01 6.78% 0.87% 6.28% 0.08% $ 83,257 28% --
$ 9.95 5.98% 0.86% 6.18% 0.05% $ 91,185 63% --
$10.36 5.54% 0.39%(d) 1.91%(d) 0.74%(d) $ 30,935 34% --
$10.08 (0.90%) 0.48% 1.82% 0.69% $ 37,114 46% --
$11.51 16.36% 0.74% 1.95% 0.39% $138,281 57% --
$14.40 31.51% 0.87% 1.75% 0.11% $204,421 39% $0.0747
$15.81 19.99% 0.94% 1.33% 0.03% $272,665 27% $0.0747
$ 9.77 (0.93%) 0.85%(d) 5.30%(d) 0.05%(d) $ 78,147 61% --
$ 9.68 4.90% 0.92% 5.59% 0.32% $ 38,598 112% --
</TABLE>
SOUTHTRUST VULCAN FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997
- -------------------------------------------------------------------------------
(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>
<CAPTION>
PORTFOLIO NAME INVESTMENT OBJECTIVE
- -------------------------------------------------------------------------------------
<S> <C>
Vulcan Treasury Obligations To provide as high a level of current interest
Money Market Fund ("Treasury income as is consistent with maintaining
liquidity Obligations") 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 securities 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 companies are valued at net
asset value.
REPURCHASE AGREEMENTS--It is the policy of the Company to require the
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System, or to have segregated within the custodian bank's
vault, all securities held as collateral 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 collateral 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.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to partnership income. The
following reclassifications have been made to the financial statements.
<TABLE>
INCREASE (DECREASE)
-----------------------------------------------------------------
FUND NAME UNDISTRIBUTED NET INVESTMENT INCOME ACCUMULATED NET REALIZED LOSS
--------- ----------------------------------- -----------------------------
<S> <C> <C>
Bond Fund $3,620 $(3,620)
---------
</TABLE>
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 their income. Accordingly, no
provisions for federal tax are necessary.
At April 30, 1997, the Company, for federal tax purposes, had a capital loss
carryforwards, as noted below, which will reduce the Company's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions to
shareholders which would otherwise be necessary to relieve the Company of any
liability for federal tax.
Pursuant to the Code, such capital loss carryforwards will expire as follows:
<TABLE>
<CAPTION>
EXPIRATION YEAR
---------------------------- TOTAL TAX LOSS
FUND 2003 2004 2005 CARRYFORWARD
----------- -------- -------- ---------- ---------------
<S> <C> <C> <C> <C>
Bond Fund $225,282 $734,054 -- $ 959,336
-----------
Income Fund -- -- $1,561,092 $1,561,092
-----------
</TABLE>
Additionally, net capital losses, as noted below, attributable to security
transactions incurred after October 31, 1996 are treated as arising on May 1,
1997 the first day of the Funds' next taxable year.
<TABLE>
<CAPTION>
TOTAL TAX LOSS
FUND PUSHFORWARD
----------- ---------------
<S> <C>
Bond Fund $ 24,118
-----------
Income Fund $225,042
-----------
</TABLE>
- -------------------------------------------------------------------------------
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Company may engage in
when-issued or delayed delivery transactions. The Company records when- issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis are
marked to market daily and begin earning interest on the settlement date.
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,
------------------------------------------------------------------------------
1997 1996
-------------------------------------- --------------------------------------
TREASURY TREASURY
OBLIGATIONS BOND STOCK OBLIGATIONS BOND STOCK
- ---------------------- -------------- ---------- ---------- -------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 1,208,046,850 3,223,005 3,804,196 1,137,724,946 2,024,389 4,334,642
- ----------------------
Shares issued to
shareholders in
payment of
distributions declared 629,753 2,805 1,120,754 162,859 3,035 16,554
- ----------------------
Shares redeemed (1,129,943,491) (2,374,300) (1,875,843) (1,006,358,894) (1,390,568) (2,174,617)
- ---------------------- -------------- ---------- ---------- -------------- ---------- ----------
Net change resulting
from share
transactions 78,733,112 851,510 3,049,107 (131,528,911) 636,856 2,176,579
- ---------------------- -------------- ---------- ---------- -------------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
APRIL 30, 1997 APRIL 30, 1996(A)
-------------- -----------------
INCOME INCOME
- --------------------------- -------------- -----------------
<S> <C> <C>
Shares sold 1,031,600 8,293,583
- ---------------------------
Shares redeemed (5,045,822) (293,887)
- --------------------------- ---------- ---------
Net change resulting from
share transactions (4,014,222) 7,999,696
- --------------------------- ---------- ---------
</TABLE>
(a) 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 as shown 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
FUND RATE
<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 fee is based on
the level of average aggregate net assets of the Company for the period. FAS may
voluntarily choose to waive a portion of its fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ"), through its subsidiary, Federated Shareholder Services
Company ("FSSC") serves as transfer and dividend disbursing agent for the
Company. The fee paid to FSSC is based on the size, type, and number of
accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Company's accounting records
for which it receives a fee. The fee is based on the level of each Fund's
average net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers 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, 1997, were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ------ ------------ -----------
<S> <C> <C>
BOND $ 66,523,564 $53,110,198
- ------ ------------ -----------
STOCK $113,252,130 $57,484,937
- ------ ------------ -----------
INCOME $ 44,967,003 $70,876,490
- ------ ------------ -----------
</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, 1997, and the related statements of
operations for the year then ended, and the statements of changes in net assets,
and the financial highlights for each of 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, 1997, 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, 1997, the results of their operations for the year then ended, and the
changes in their net assets and their financial highlights for each of the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania, June 10, 1997
TRUSTEESOFFICERS
- --------------------------------------------------------------------------------
Charles G. Brown, III William O. Vann
Russell W. Chambliss Chairman
Thomas M. 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.
NOTES
NOTES
INVESTMENT ADVISER: Cusip 844734202
Cusip 844734301
[LOGO OF SOUTHTRUST BANK] Cusip 844734103
Cusip 844734400
of Alabama, N.A. G00859-01 (6/97)
Appendix A. 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, based on a 4.00% sales charge, is represented by a
solid line. The Lehman Brothers Intermediate Government/Corporate Index (the
"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 4/30/97. The "y" axis reflects the cost of the investment. The
right margin reflects the ending value of the hypothetical investment in the f
und, based on a 4.00% sales charge, as compared to LBIG/C. The ending values
were $13,033 and $13,871, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the fund's Average Annual Total Returns for the
one-year period and from the fund's start of performance (5/8/92) to 4/30/97.
The total returns were 2.30% and 5.58%, respectively.
Appendix B. 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, based on a 4.50% sales charge, is represented by a
solid line. The Standard & Poor's 500 Index (the "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 4/30/97. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the fund, based on a 4.50% sales charge, as
compared to the S&P 500. The ending values were $18,339 and $21,986,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the fund's Average Annual Total Returns for the one-year period and
from the fund's start of performance (5/8/92) to 4/30/97. The total returns were
14.58% and 12.95%, respectively.
Appendix C. 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, based on a 3.50% sales charge, is represented by
a solid line. The Merrill Lynch Corporate/Government 1-5 Year Index (the "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 4/30/97. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the fund, based on a
3.50% sales charge, as compared to the MLC/G 1-5. The ending values were $10,028
and $10,603, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the fund's Average Annual Total Returns for the one-year
period and from the fund's start of performance (1/10/96) to 4/30/97. The total
returns were 1.27% and 0.24%, respectively.
