[LOGO] SouthTrust
Vulcan
Funds
Treasury Obligations
Money Market Fund
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Bond Fund
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Stock Fund
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Income Fund
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Annual Report
April 30, 1998
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 fiscal year reporting period from May 1, 1997 through April 30, 1998.
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
listing 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 12-month fiscal year reporting period are
as follows:
SOUTHTRUST VULCAN TREASURY OBLIGATIONS MONEY MARKET
The 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
$631.9 million at the end of the reporting period.*
SOUTHTRUST VULCAN BOND FUND
This fund's diversified portfolio of corporate and government bonds paid income
distributions totaling $0.60 per share, which contributed to a total return of
10.80% (6.93% taking into account the fund's sales charge).** Also contributing
to the total return was a net asset value increase of $0.45 per share. Total net
assets in the fund passed the $100 million mark, reaching $114.7 million at the
end of the reporting period.
SOUTHTRUST VULCAN STOCK FUND
In a favorable yet volatile environment for stocks, Vulcan Stock Fund produced a
total return of 36.39% (30.29% taking into account the fund's sales charge).**
Contributing to the total return was a $3.24 increase in net asset value per
share, $0.15 per share in dividends and $2.02 per share in capital gains. Total
net assets surpassed the $400 million mark, reaching $412.9 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 $0.58 per share, which contributed to a
total return of 7.46% (3.71% taking into account the fund's sales charge).**
Also contributing to the total return was a net asset value increase of $0.13
per share. Total net assets in the fund reached $40.0 million at the end of the
reporting period.
Thank you for pursuing your financial goals through the professional management
and diversification of the SouthTrust Vulcan Funds. We look forward to keeping
you up-to-date on your progress.
Sincerely,
/s/ Edward C. Gonzales
Edward C. Gonzales
President
June 15, 1998
* 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 not insured or guaranteed by the U.S. government.
**Performance quoted represents 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
- -------------------------------------------------------------------------------
It just keeps getting better! We, like many investment managers, believed the
ideal environment in 1997 was about as good as it could get for investors. The
surprising strength in the U.S. economy and the further reduction of the
inflation rate thus far in 1998 have forced those views to be reevaluated. While
the non-inflationary growth we are experiencing should, in theory, be ideal for
bonds and stocks, investors' attention has been focused almost exclusively on
stocks. The strong domestic economy has kept alive questions of whether or not
the Federal Reserve Board (the "Fed") will raise interest rates. The normal
inflation concerns that result from faster than expected economic growth appear
to have placed a floor under interest rates, keeping them higher than typical
analysis might suggest they should be.
ECONOMIC PERSPECTIVE
The current U.S. economic expansion is now the third longest in history, with no
sign of an end in sight. Inflation has never been this low at such an advanced
stage of a cycle. In the two economic expansions that lasted longer than this
one (1961-1969 and 1982-1990), inflation began to accelerate by the fifth year.
So far in the 1990's though, inflation has actually declined in six of the last
seven years. This is due mostly to lower energy prices, the globalization of
U.S. markets, sweeping technological improvements throughout the economy, and
increased productivity by the labor markets.
The dramatic returns in the U.S. stock market have probably been the primary
reason for the economic strength we are experiencing. Consumers feel confident
and are spending some of their new-found wealth. Housing has been especially
strong. Even the very weak economies of Southeast Asia have not yet been able to
put a damper on our party.
What should investors be concerned about? The biggest worry is that the Fed
becomes so concerned about the rapid growth and developing inflationary
pressures, that they raise short-term interest rates. Historically, such an
action tends to be negative for bonds and stocks. A second concern is that
inflationary pressures are building, but are not yet obvious. If inflation does
reverse course and trend higher, the change would most likely also hurt both
bond and stock prices. The third concern is that the economy slows so much that
it puts enough pressure on corporate profits that stocks lose their earning
support and sell-off. Such weakness should tend to be positive for bonds.
Interestingly, earnings growth has slowed dramatically this year, and so far
stock investors do not seem to care.
FIXED-INCOME MARKET
Are U.S. bonds one of the most attractive investments in the world? The answer
will be determined by the actions of the Fed, the direction of inflation, and
the movement of the stock market. Unfortunately, such events are impossible to
predict.
The Fed does appear to be increasingly concerned about the strong U.S. economy
and the likelihood of developing inflationary pressures. There are also
indications that they have become concerned about financial inflation, and that
they may want to take actions to prevent stock market speculation. Whether or
not the Fed raises short-term interest rates is anyone's guess. Our view is that
Fed action is unnecessary as the domestic economy should eventually slow on its
own, especially given the weakness in Asian economies.
Inflation, however, is another issue. The tight labor market and early signs of
building cost pressures must continue to be offset by productivity improvements.
Labor costs contribute about two-thirds of inflation and are definitely putting
upward pressure on costs. It is impossible to predict whether or not higher
productivity will offset these pressures. Our view is that inflation is not yet
a problem, but there are some awfully smart economists and strategists who
disagree with this viewpoint.
The one issue that is less debatable is that real interest rates (interest rate
returns above inflation) are at historically high levels. If the Fed does not
raise short-term interest rates and inflation does not accelerate, bonds are
likely to perform very well. For now, investors still have a strong preference
for stocks, which by itself will keep downward pressure on bond returns.
As we said last year, "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 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."
The only comment we would add this year is that traditional risk-adjusted
analysis tends to suggest that U.S. bonds may be one of the most attractive
investments in the world. This could make the potential benefits of a well-
diversified balanced portfolio more important than ever.
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 interest rates
moving lower over the next year.
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 between 1 1/2 and 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.
* 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.
EQUITY REVIEW
The U.S. stock market stagnated in the later part of 1997, and even started this
year on a weak note, but the bulls ultimately prevailed. A strong surge
beginning in late January moved stocks to new high after new high. The power of
the move went a long way toward calming investor concerns and showed once again
that the course of least resistance for stocks is still up. Even all-time record
valuations on almost every known measurement and a dramatic slow- down in
earnings growth have not tempered investors' enthusiasm.
As we indicated in last year's report, "despite concerns we may have, the simple
truth is that the equity environment has rarely been better. A surprisingly
strong economy, without serious inflationary pressures and with few of the
normal excesses that usually lead to recession, creates a very favorable
backdrop for stocks. We see no reason to expect the environment to change
materially any time soon. So, while your SOUTHTRUST VULCAN STOCK FUND portfolio
managers are cautious, we also know enough, having experienced many market
cycles, 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 that are not fully reflected
in their stock's price."
Ironically, these same value disciplines are now uncovering some of the most
attractive opportunities in stocks that we have found in several years. The
market's single-minded focus on a limited number of very large growth stocks has
left many companies out-of-favor and attractively valued relative to the overall
market. We believe opportunities have presented themselves in industries as
diverse as oil-service to selected technology stocks. Even some multi-industry
and out of favor consumer staple stocks are now beginning to offer good value.
There-in lies the irony. As with most investors who survived the 1973-74 bear
market, we are concerned about the current high level of investor confidence and
excessively optimistic expectations that have resulted in valuation levels on
stocks never before seen. Yet, we also recognize that the United States is
undergoing a powerful demographic shift to an older, more savings-and-investment
oriented society. This shift is clearly a factor which is helping to fuel
impressive equity returns. Given our recognition of the major secular changes
that are lending support to stocks, and despite our serious valuation concerns
about the overall equity market, we are having no trouble finding individual
stocks that appear to offer attractive total return potential.
Once again, we thank you for your continued confidence in our management and
look forward to serving you during the next year.
SHAREHOLDER MEETING RESULTS
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A Special Meeting of the shareholders of SouthTrust Vulcan Funds was held on
March 20, 1998. On February 9, 1998, the record date for determination of
shareholders entitled to vote at the meeting, there were 546,491,011 total
outstanding shares. The following item was considered by shareholders and the
results of their voting is as follows:
AGENDA ITEM
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1. To elect two Trustees of the Company to serve until the election and
qualification of their successors.
<TABLE>
<CAPTION>
FOR AGAINST WITHHOLD AUTHORITY TO VOTE
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<S> <C> <C> <C>
Thomas M. Grady 285,472,319 0 1,664
Billy L. Harbert, Jr. 285,472,319 0 1,664
</TABLE>
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 (the "Fund") from May 8, 1992, (start of
performance) to April 30, 1998, compared to the Lehman Brothers Intermediate
Government/Corporate Index ("LBIG/C")+
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A.1]
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
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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 (the "Fund") from May 8, 1992, (start of
performance) to April 30, 1998, compared to the Standard & Poor's 500 Index
("S&P 500")+
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A.2]
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
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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 (the "Fund") from January 10, 1996, (start of
performance) to April 30, 1998, compared to the Merrill Lynch
Corporate/Government 1-5 Year Index ("MLC/G 1-5")+
[GRAPHIC REPRESENTATION OMITTED. SEE APPENDIX A.3]
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 loads, 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.
<TABLE>
<CAPTION>
<C> <S> <C>
SouthTrust Vulcan
Treasury Obligations Money Market Fund
Portfolio of Investments
U.S. TREASURY OBLIGATIONS--37.5%
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U.S. TREASURY BILLS--35.1%
------------------------------------------------
$ 20,000,000 5/21/1998 $ 19,944,333
------------------------------------------------
25,000,000 6/4/1998 24,882,299
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25,000,000 7/2/1998 24,783,000
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45,000,000 7/23/1998 44,481,020
------------------------------------------------
20,000,000 8/20/1998 19,691,975
------------------------------------------------
20,000,000 8/27/1998 19,669,928
------------------------------------------------
25,000,000 9/10/1998 24,539,833
------------------------------------------------
25,000,000 10/1/1998 24,459,187
------------------------------------------------
20,000,000 10/8/1998 19,548,889
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Total 222,000,464
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U.S. TREASURY NOTES--2.4%
------------------------------------------------
15,000,000 6.250%, 7/31/1998 15,033,067
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TOTAL U.S. TREASURY OBLIGATIONS 237,033,531
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(A) REPURCHASE AGREEMENTS--58.9%
-------------------------------------------------------------
150,000,000 Barclays de Zoete Wedd Securities, Inc., 5.450%,
dated 4/30/1998, due 5/1/1998 150,000,000
------------------------------------------------
30,000,000 Donaldson, Lufkin and Jenrette Securities Corp.,
5.450%, dated 4/30/1998, due 5/1/1998 30,000,000
------------------------------------------------
Dresdner Securities (USA), Inc., 5.480%, dated
150,000,000 4/30/1998, due 5/1/1998 150,000,000
------------------------------------------------
Lehman Brothers, Inc., 5.500%, dated 4/30/1998,
30,000,000 due 5/1/1998 30,000,000
------------------------------------------------
Morgan Stanley Group, Inc., 5.300%, dated
12,256,000 4/30/1998, due 5/1/1998 12,256,000
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TOTAL REPURCHASE AGREEMENTS 372,256,000
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TOTAL INVESTMENTS (AT AMORTIZED COST)(B) $609,289,531
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</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
($631,868,782) at April 30, 1998.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN BOND FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- --------------------------------------------------- ------------
<C> <S> <C>
CORPORATE BONDS--36.9%
--------------------------------------------------------------
CHEMICALS--3.5%
---------------------------------------------------
$2,000,000 Solutia, Inc., Note, 6.50%, 10/15/2002 $ 2,013,180
---------------------------------------------------
2,000,000 Praxair, Inc., Note, 6.15%, 4/15/2003 1,988,960
--------------------------------------------------- ------------
Total 4,002,140
--------------------------------------------------- ------------
COMMERCIAL SERVICES--1.8%
---------------------------------------------------
2,000,000 Equifax, Inc., Sr. Note, 6.50%, 6/15/2003 2,011,230
--------------------------------------------------- ------------
CONSUMER NON-DURABLES--2.2%
---------------------------------------------------
Philip Morris Cos., Inc., Unsecd. Note, 7.125%,
1,500,000 10/1/2004 1,549,227
---------------------------------------------------
Philip Morris Cos., Inc., Unsecd. Note, 7.125%,
1,000,000 12/1/1999 1,014,492
--------------------------------------------------- ------------
Total 2,563,719
--------------------------------------------------- ------------
CONSUMER SERVICES--2.6%
---------------------------------------------------
3,000,000 Service Corp. International, Note, 6.30%, 3/15/2003 2,999,706
--------------------------------------------------- ------------
FINANCE--8.7%
---------------------------------------------------
2,000,000 BB&T Corp., Sub. Note, 7.25%, 6/15/2007 2,100,390
---------------------------------------------------
Bank of New York Co., Inc., Sub. Note, 8.50%,
2,500,000 12/15/2004 2,795,318
---------------------------------------------------
Ford Motor Credit Corp., Unsecd. Note, 7.75%,
2,500,000 10/1/1999 2,561,320
---------------------------------------------------
Standard Credit Card Master Trust 1991-6, Class A,
2,500,000 7.875%, 11/7/1998 2,527,313
--------------------------------------------------- ------------
Total 9,984,341
--------------------------------------------------- ------------
PROCESS INDUSTRIES--4.6%
---------------------------------------------------
5,000,000 Archer-Daniels-Midland Co., Deb., 7.125%, 3/1/2013 5,305,920
--------------------------------------------------- ------------
TRANSPORTATION--1.0%
---------------------------------------------------
Norfolk Southern Corp., Equip. Trust, Series C,
1,000,000 7.75%, 8/15/2006 1,102,813
--------------------------------------------------- ------------
UTILITIES--12.5%
---------------------------------------------------
BellSouth Telecommunications, Inc., Deb., 7.00%,
5,000,000 10/1/2025 5,250,465
---------------------------------------------------
Carolina Power & Light Co., 1st Mtg. Bond, 6.80%,
2,000,000 8/15/2007 2,070,738
---------------------------------------------------
National Rural Utilities Cooperative Finance Corp.,
2,000,000 Sr. Note, 6.75%, 9/1/2001 2,038,284
---------------------------------------------------
</TABLE>
SOUTHTRUST VULCAN BOND FUND
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<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
CORPORATE BONDS--CONTINUED
---------------------------------------------------------------
UTILITIES--CONTINUED
---------------------------------------------------------------
$5,000,000 Pacific Bell, Note, 6.125%, 2/15/2008 $ 4,942,750
---------------------------------------------------- ------------
Total 14,302,237
---------------------------------------------------- ------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $41,214,345) 42,272,106
---------------------------------------------------- ------------
GOVERNMENT AGENCIES--14.7%
---------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORPORATION--10.0%
----------------------------------------------------
3,500,000 6.52%, 1/2/2002 3,577,123
----------------------------------------------------
5,000,000 7.225%, 5/17/2005 5,136,560
----------------------------------------------------
1,420,154 8.00%, 1/1/2007 1,465,073
----------------------------------------------------
1,154,779 9.50%, 2/15/2020 1,247,415
---------------------------------------------------- ------------
Total 11,426,171
---------------------------------------------------- ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--4.7%
----------------------------------------------------
2,085,000 7.35%, 3/22/2006 2,112,678
----------------------------------------------------
2,000,000 8.50%, 2/1/2005 2,071,352
----------------------------------------------------
1,164,684 10.00%, 1/1/2020 1,263,682
---------------------------------------------------- ------------
Total 5,447,712
---------------------------------------------------- ------------
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST
$16,780,390) 16,873,883
---------------------------------------------------- ------------
U.S. TREASURY--42.0%
---------------------------------------------------------------
U.S. TREASURY BONDS--20.6%
----------------------------------------------------
5,000,000 6.00%, 2/15/2026 4,989,065
----------------------------------------------------
1,125,000 7.25%, 5/15/2004 1,212,540
----------------------------------------------------
4,000,000 7.25%, 5/15/2016 4,543,752
----------------------------------------------------
5,000,000 7.25%, 8/15/2022 5,764,065
----------------------------------------------------
4,000,000 7.50%, 11/15/2016 4,653,752
----------------------------------------------------
1,000,000 7.875%, 2/15/2021 1,224,688
----------------------------------------------------
1,000,000 8.00%, 11/15/2021 1,243,751
---------------------------------------------------- ------------
Total 23,631,613
---------------------------------------------------- ------------
</TABLE>
SOUTHTRUST VULCAN BOND FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
SHARES VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
U.S. TREASURY--CONTINUED
---------------------------------------------------------------
U.S. TREASURY NOTES--21.4%
----------------------------------------------------
$1,000,000 5.50%, 4/15/2000 $ 998,438
----------------------------------------------------
1,000,000 5.875%, 7/31/1999 1,003,438
----------------------------------------------------
1,250,000 6.00%, 8/15/1999 1,256,641
----------------------------------------------------
2,000,000 6.125%, 9/30/2000 2,023,126
----------------------------------------------------
3,000,000 6.25%, 10/31/2001 3,055,314
----------------------------------------------------
2,000,000 6.25%, 2/15/2003 2,047,502
----------------------------------------------------
2,750,000 6.375%, 3/31/2001 2,804,142
----------------------------------------------------
3,000,000 6.50%, 5/15/2005 3,131,253
----------------------------------------------------
1,500,000 6.50%, 8/15/2005 1,566,564
----------------------------------------------------
3,000,000 6.625%, 5/15/2007 3,182,814
----------------------------------------------------
1,125,000 7.25%, 8/15/2004 1,215,001
----------------------------------------------------
1,125,000 7.50%, 2/15/2005 1,235,040
----------------------------------------------------
1,000,000 8.00%, 5/15/2001 1,065,312
---------------------------------------------------- ------------
Total 24,584,585
---------------------------------------------------- ------------
TOTAL U.S. TREASURY (IDENTIFIED COST $45,875,537) 48,216,198
---------------------------------------------------- ------------
SHORT-TERM INVESTMENT--4.8%
---------------------------------------------------------------
MUTUAL FUND--4.8%
----------------------------------------------------
AIM Short-Term Investment Co. Prime Portfolio (AT
5,465,705 NET ASSET VALUE) 5,465,705
---------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $109,335,977)(A) $112,827,892
---------------------------------------------------- ------------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to $109,335,977.
The net unrealized appreciation of investments on a federal tax basis
amounts to $3,491,915 which is comprised of $3,710,666 appreciation and
$218,751 depreciation at April 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($114,650,313) at April 30, 1998.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN STOCK FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------------------------------ ------------
<C> <S> <C>
COMMON STOCKS--97.9%
----------------------------------------------
CAPITAL GOODS--13.2%
------------------------------------
150,000 Allied-Signal, Inc. $ 6,571,875
------------------------------------
87,500 Honeywell, Inc. 8,148,438
------------------------------------
220,000 Ingersoll-Rand Co. 10,133,750
------------------------------------
226,000 (a)Jacobs Engineering Group, Inc. 7,542,750
------------------------------------
144,800 (a)Litton Industries, Inc. 8,688,000
------------------------------------
78,000 United Technologies Corp. 7,678,125
------------------------------------
145,200 (a)Wolverine Tube, Inc. 5,717,250
Total 54,480,188
CONSUMER CYCLICAL -17.8%
315,000 Deluxe Corp. 10,552,500
122,500 (a)Federated Department Stores, Inc. 6,025,469
120,000 Goodyear Tire & Rubber Co. 8,400,000
------------------------------------
87,000 Home Depot, Inc. 6,057,375
------------------------------------
200,000 Liz Claiborne, Inc. 9,837,500
------------------------------------
146,200 (a)Meadowcraft, Inc. 2,284,375
------------------------------------
310,000 (a)Office Depot, Inc. 10,268,750
------------------------------------
125,000 Sherwin-Williams Co. 4,453,125
------------------------------------
255,000 (a)Toys 'R' Us, Inc. 7,028,437
------------------------------------
490,000 (a)U.S. Office Products Co. 8,666,875
------------------------------------ ------------
Total 73,574,406
------------------------------------ ------------
CONSUMER STAPLES--9.3%
------------------------------------
105,000 Crown Cork & Seal Co., Inc. 5,466,562
------------------------------------
355,000 Dial Corp. 8,653,125
------------------------------------
177,000 PepsiCo, Inc. 7,024,687
------------------------------------
303,200 Philip Morris Cos., Inc. 11,313,150
------------------------------------
216,900 Richfood Holdings, Inc. 5,951,194
------------------------------------ ------------
Total 38,408,718
------------------------------------ ------------
</TABLE>
SOUTHTRUST VULCAN STOCK FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
-----------------------------------------------
ENERGY--6.8%
-------------------------------------
120,000 Coastal Corp. $ 8,572,500
-------------------------------------
90,000 Mobil Corp. 7,110,000
-------------------------------------
140,000 (a)Sante Fe International Corp. 5,486,250
-------------------------------------
190,000 USX Marathon Group 6,804,375
------------------------------------- ------------
Total 27,973,125
------------------------------------- ------------
FINANCE--14.5%
-------------------------------------
167,400 Ace, Ltd., ADR 6,340,275
-------------------------------------
92,200 Bank of New York Co., Inc. 5,445,562
-------------------------------------
55,000 Chase Manhattan Corp. 7,620,938
-------------------------------------
170,000 Federal National Mortgage Association 10,178,750
-------------------------------------
152,000 KeyCorp 6,032,500
-------------------------------------
107,000 NationsBank Corp. 8,105,250
-------------------------------------
148,250 Old Republic International Corp. 6,708,313
-------------------------------------
80,000 Reliastar Financial Corp. 3,650,000
-------------------------------------
116,250 SunAmerica, Inc. 5,805,234
------------------------------------- ------------
Total 59,886,822
------------------------------------- ------------
HEALTH CARE--12.9%
-------------------------------------
46,000 American Home Products Corp. 4,283,750
-------------------------------------
84,000 Bristol-Myers Squibb Co. 8,893,500
-------------------------------------
260,000 (a)Humana, Inc. 7,020,000
-------------------------------------
90,000 Johnson & Johnson 6,423,750
-------------------------------------
48,000 Merck & Co., Inc. 5,784,000
-------------------------------------
265,000 (a)Phycor, Inc. 6,028,750
-------------------------------------
186,240 (a)Tenet Healthcare Corp. 6,972,360
-------------------------------------
110,000 United Healthcare Corp. 7,727,500
------------------------------------- ------------
Total 53,133,610
------------------------------------- ------------
MISCELLANEOUS--1.3%
-------------------------------------
146,800 (a)AccuStaff, Inc. 5,266,450
------------------------------------- ------------
</TABLE>
SOUTHTRUST VULCAN STOCK FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ----------------------------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
---------------------------------------------------------------
TECHNOLOGY--16.8%
-----------------------------------------------------
300,000 Compaq Computer Corp. $ 8,418,750
-----------------------------------------------------
200,000 Electronic Data Systems Corp. 8,600,000
-----------------------------------------------------
265,000 First Data Corp., Class 8,976,875
-----------------------------------------------------
163,400 Harris Corp. 7,904,475
-----------------------------------------------------
64,000 Hewlett-Packard Co. 4,820,000
-----------------------------------------------------
48,000 Intel Corp. 3,879,000
-----------------------------------------------------
92,000 International Business Machines Corp. 10,660,500
-----------------------------------------------------
254,600 (a)Sun Microsystems, Inc. 10,486,338
-----------------------------------------------------
200,000 (a)Symantec Corp. 5,800,000
----------------------------------------------------- ------------
Total 69,545,938
----------------------------------------------------- ------------
TELECOMMUNICATION SERVICES--4.6%
-----------------------------------------------------
73,500 Bell Atlantic Corp. 6,876,844
-----------------------------------------------------
138,000 GTE Corp. 8,064,375
-----------------------------------------------------
59,800 Sprint Corp. 4,085,088
----------------------------------------------------- ------------
Total 19,026,307
----------------------------------------------------- ------------
UTILITIES--0.7%
-----------------------------------------------------
111,200 Entergy Corp. 2,766,100
----------------------------------------------------- ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $300,728,222) 404,061,664
----------------------------------------------------- ------------
MUTUAL FUND--2.0%
---------------------------------------------------------------
AIM Short-Term Investment Co. Prime Portfolio (AT NET
8,063,495 ASSET VALUE) 8,063,495
----------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $308,791,717)(B) $412,125,159
----------------------------------------------------- ------------
</TABLE>
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to $308,913,566.
The net unrealized appreciation of investments on a federal tax basis
amounts to $103,211,593 which is comprised of $104,673,899 appreciation and
$1,462,306 depreciation at April 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($412,856,534) at April 30, 1998.
The following acronym is used throughout this portfolio:
ADR--American Depository Receipt
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN INCOME FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
CORPORATE BONDS--35.6%
---------------------------------------------------------------
CHEMICALS--5.0%
----------------------------------------------------
$1,000,000 Praxair, Inc., Note, 6.15%, 4/15/2003 $ 994,480
----------------------------------------------------
1,000,000 Solutia, Inc., Note, 6.50%, 10/15/2002 1,006,590
---------------------------------------------------- ------------
Total 2,001,070
---------------------------------------------------- ------------
CONSUMER NON-DURABLES--4.0%
----------------------------------------------------
1,000,000 Philip Morris Cos., Inc., Note, 7.625%, 5/15/2002 1,042,605
----------------------------------------------------
500,000 Procter & Gamble Co., Deb., 8.70%, 8/1/2001 540,333
---------------------------------------------------- ------------
Total 1,582,938
---------------------------------------------------- ------------
CONSUMER SERVICES--5.0%
----------------------------------------------------
1,000,000 Service Corp. International, Note, 6.30%, 3/15/2003 999,902
----------------------------------------------------
1,000,000 Service Corp. International, Note, 6.375%, 10/1/2000 1,005,653
---------------------------------------------------- ------------
Total 2,005,555
---------------------------------------------------- ------------
ENERGY--2.5%
----------------------------------------------------
1,000,000 Amoco Corp., Company Guarantee, 6.25%, 10/15/2004 1,008,500
---------------------------------------------------- ------------
FINANCIAL SERVICES--10.3%
----------------------------------------------------
Ford Motor Credit Corp., Unsecd. Note, 8.20%,
1,000,000 2/15/2002 1,066,377
----------------------------------------------------
General Motors Acceptance Corp., Note, 6.625%,
1,000,000 10/1/2002 1,015,766
----------------------------------------------------
1,000,000 IBM Credit Corp., Note, 6.80%, 5/22/2001 1,007,958
----------------------------------------------------
1,000,000 Merrill Lynch & Co., Inc., Note, 8.375%, 2/9/2000 1,040,448
---------------------------------------------------- ------------
Total 4,130,549
---------------------------------------------------- ------------
MANUFACTURING--2.5%
----------------------------------------------------
1,000,000 Sony Corp., Bond, 6.125%, 3/4/2003 999,697
---------------------------------------------------- ------------
RETAIL--1.3%
----------------------------------------------------
Dillard Department Stores, Inc., Note, 7.375%,
500,000 6/15/1999 507,902
---------------------------------------------------- ------------
UTILITIES--5.0%
----------------------------------------------------
New England Telephone & Telegraph, Deb., 6.375%,
1,000,000 9/1/2008 982,585
----------------------------------------------------
</TABLE>
SOUTHTRUST VULCAN INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
CORPORATE BONDS--CONTINUED
---------------------------------------------------------------
UTILITIES--CONTINUED
----------------------------------------------------
$1,000,000 Pacific Telephone & Telegraph, Deb., 6.50%, 7/1/2003 $ 1,001,426
---------------------------------------------------- ------------
Total 1,984,011
---------------------------------------------------- ------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $14,028,172) 14,220,222
---------------------------------------------------- ------------
GOVERNMENT AGENCIES--23.7%
---------------------------------------------------------------
FEDERAL HOME LOAN BANK--5.1%
----------------------------------------------------
2,000,000 7.00%, 11/13/2007 2,030,196
---------------------------------------------------- ------------
FEDERAL HOME LOAN MORTGAGE CORPORATION--5.1%
----------------------------------------------------
2,000,000 7.225%, 5/17/2005 2,054,624
---------------------------------------------------- ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--13.5%
----------------------------------------------------
2,000,000 6.44%, 6/21/2005 2,062,120
----------------------------------------------------
1,775,000 6.59%, 5/16/2002 1,818,848
----------------------------------------------------
1,500,000 7.80%, Medium Term Note, 2/21/2007 1,525,508
---------------------------------------------------- ------------
Total 5,406,476
---------------------------------------------------- ------------
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST
$9,461,578) 9,491,296
---------------------------------------------------- ------------
U.S. TREASURY OBLIGATIONS--36.8%
---------------------------------------------------------------
U.S. TREASURY BOND--2.7%
----------------------------------------------------
1,000,000 7.25%, 5/15/2004 1,077,813
---------------------------------------------------- ------------
U.S. TREASURY NOTE--34.1%
----------------------------------------------------
1,000,000 8.00%, 8/15/1999 1,029,688
----------------------------------------------------
1,000,000 7.75%, 2/15/2001 1,054,060
----------------------------------------------------
1,000,000 7.50%, 11/15/2001 1,058,126
----------------------------------------------------
1,000,000 7.50%, 10/31/1999 1,026,563
----------------------------------------------------
1,000,000 7.125%, 2/29/2000 1,026,251
----------------------------------------------------
1,500,000 6.875%, 3/31/2000 1,534,220
----------------------------------------------------
1,500,000 6.75%, 6/30/1999 1,519,689
----------------------------------------------------
1,000,000 6.50%, 10/15/2006 1,048,751
----------------------------------------------------
1,000,000 6.50%, 8/31/2001 1,025,313
----------------------------------------------------
1,000,000 6.375%, 3/31/2001 1,019,688
----------------------------------------------------
</TABLE>
SOUTHTRUST VULCAN INCOME FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- ----------------------------------------------------- -----------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS--CONTINUED
----------------------------------------------------------------
U.S. TREASURY NOTE--CONTINUED
-----------------------------------------------------
$1,000,000 6.375%, 1/15/2000 $ 1,012,188
-----------------------------------------------------
1,250,000 6.25%, 8/31/2000 1,267,577
----------------------------------------------------- -----------
Total 13,622,114
----------------------------------------------------- -----------
TOTAL U.S. TREASURY OBLIGATIONS (IDENTIFIED COST
$14,500,664) 14,699,927
----------------------------------------------------- -----------
MUTUAL SHARES FUND--2.3%
----------------------------------------------------------------
AIM Short-Term Investment Co. Prime Portfolio (AT NET
936,474 ASSET VALUE) 936,474
----------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $38,926,888)(A) $39,347,919
----------------------------------------------------- -----------
</TABLE>
(a) The cost of investments for federal tax purposes amounts to $38,926,888. The
net unrealized appreciation of investments on a federal tax basis amounts to
$421,031 which is comprised of $475,197 appreciation and $54,166
depreciation at April 30, 1998.
Note: The categories of investments are shown as a percentage of net assets
($39,968,956) at April 30, 1998.
(See Notes which are an integral part of the Financial Statements)
SOUTHTRUST VULCAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY
OBLIGATIONS
MONEY BOND STOCK INCOME
MARKET FUND FUND FUND FUND
- ---------------------------------------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
- ----------------------------------------
Investments in repurchase agreements $372,256,000 $ -- $ -- $ --
- ----------------------------------------
Investments in securities 237,033,531 112,827,892 412,125,159 39,347,919
- ---------------------------------------- ------------ ------------ ------------ -----------
Total investments in securities, at
value $609,289,531 $112,827,892 $412,125,159 $39,347,919
- ---------------------------------------- ------------ ------------ ------------ -----------
Cash 525 10 1,000 --
- ----------------------------------------
Income receivable 289,551 1,797,296 279,109 661,195
- ----------------------------------------
Receivable for investments sold 24,512,052 -- 13,957,697 --
- ----------------------------------------
Receivable for shares sold -- 99,718 114,992 4,433
- ----------------------------------------
Deferred organizational costs -- -- -- 13,203
- ---------------------------------------- ------------ ------------ ------------ -----------
Total assets 634,091,659 114,724,916 426,477,957 40,026,750
- ---------------------------------------- ------------ ------------ ------------ -----------
LIABILITIES:
- ----------------------------------------
Payable for investments purchased -- -- 13,255,644 --
- ----------------------------------------
Payable for shares redeemed -- 27,166 249,046 30,220
- ----------------------------------------
Payable to Bank -- -- -- 240
- ----------------------------------------
Income distribution payable 2,114,621 -- -- --
- ----------------------------------------
Accrued expenses 108,256 47,437 116,733 27,334
- ---------------------------------------- ------------ ------------ ------------ -----------
Total liabilities 2,222,877 74,603 13,621,423 57,794
- ---------------------------------------- ------------ ------------ ------------ -----------
NET ASSETS CONSIST OF:
- ----------------------------------------
Paid in capital 631,868,782 110,811,242 275,101,481 41,145,479
- ----------------------------------------
Net unrealized appreciation -- 3,491,914 103,333,442 421,031
(depreciation) of investments
- ----------------------------------------
Accumulated net realized gain (loss) on -- 211,130 34,364,117 (1,634,514)
investments
- ----------------------------------------
Undistributed net investment income -- 136,027 57,494 36,960
- ---------------------------------------- ------------ ------------ ------------ -----------
Total Net Assets $631,868,782 $114,650,313 $412,856,534 $39,968,956
- ---------------------------------------- ------------ ------------ ------------ -----------
Shares Outstanding 631,868,782 11,027,964 21,674,634 4,072,286
- ---------------------------------------- ------------ ------------ ------------ -----------
NET ASSET VALUE PER SHARE:
(Net Assets / Shares Outstanding) $ 1.00 $ 10.40 $ 19.05 $ 9.81
- ---------------------------------------- ------------ ------------ ------------ -----------
Offering Price Per Share(a) -- $ 10.78(b) $ 19.95(c) $ 10.17(b)
- ---------------------------------------- ------------ ------------ ------------ -----------
Redemption Proceeds Per Share(a) -- $ 10.30(d) $ 18.86(d) $ 9.71(d)
- ---------------------------------------- ------------ ------------ ------------ -----------
Investments, at identified cost -- 109,335,977 308,791,717 38,926,888
- ---------------------------------------- ------------ ------------ ------------ -----------
Investments, at tax cost -- 109,335,977 308,913,566 38,926,888
- ---------------------------------------- ------------ ------------ ------------ -----------
</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, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY
OBLIGATIONS
MONEY MARKET BOND STOCK INCOME
FUND FUND FUND FUND
- ------------------------- ------------ ----------- ------------ ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------
Dividends $ -- $ -- $ 4,897,709 $ --
- -------------------------
Interest 27,631,949 6,787,879 911,501 2,572,938
- ------------------------- ----------- ----------- ------------ ----------
Total income 27,631,949 6,787,879 5,809,210 2,572,938
- ------------------------- ----------- ----------- ------------ ----------
EXPENSES:
- -------------------------
Investment advisory fee 2,507,721 604,746 2,550,383 233,648
- -------------------------
Administrative personnel 567,937 114,117 384,783 99,999
and services fee
- -------------------------
Custodian fees 47,696 8,463 27,950 4,091
- -------------------------
Transfer and dividend 26,336 32,945 67,291 32,864
disbursing agent fees and
expenses
- -------------------------
Directors'/Trustees' fees 17,544 3,369 10,921 807
- -------------------------
Auditing fees 10,031 11,226 8,990 8,700
- -------------------------
Legal fees 13,788 1,008 8,631 1,158
- -------------------------
Portfolio accounting fees 100,899 43,076 79,324 50,925
- -------------------------
Share registration costs 26,356 14,254 26,525 15,074
- -------------------------
Printing and postage 15,046 12,779 17,753 10,877
- -------------------------
Insurance premiums 5,645 4,535 3,299 3,696
- -------------------------
Miscellaneous 5,645 3,711 12,062 3,923
- ------------------------- ----------- ----------- ------------ ----------
Total expenses 3,344,644 854,229 3,197,912 465,762
- ------------------------- ----------- ----------- ------------ ----------
Waivers--
- -------------------------
Waiver of investment
advisory fee (959,228) (5,747) (10,794) (116,824)
- -------------------------
Waiver of administrative
personnel and services
fee -- -- -- (55,841)
- ------------------------- ----------- ----------- ------------ ----------
Total waivers (959,228) (5,747) (10,794) (172,665)
- ------------------------- ----------- ----------- ------------ ----------
Net expenses 2,385,416 848,482 3,187,118 293,097
- ------------------------- ----------- ----------- ------------ ----------
Net investment
income 25,246,533 5,939,397 2,622,092 2,279,841
- ------------------------- ----------- ----------- ------------ ----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
- -------------------------
Net realized gain (loss)
on investments -- 1,212,542 58,160,304 151,620
- -------------------------
Change in unrealized
appreciation
(depreciation) of
investments -- 2,922,962 42,808,715 369,670
- ------------------------- ----------- ----------- ------------ ----------
Net realized and
unrealized gain (loss) on
investments -- 4,135,504 100,969,019 521,290
- ------------------------- ----------- ----------- ------------ ----------
Change in net assets
resulting from operations $25,246,533 $10,074,901 $103,591,111 $2,801,131
- ------------------------- ----------- ----------- ------------ ----------
</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,
-------------------------------- --------------------------
1998 1997 1998 1997
- ------------------------ --------------- --------------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
- ------------------------
OPERATIONS--
- ------------------------
Net investment income $ 25,246,533 $ 20,659,697 $ 5,939,397 $ 5,442,465
- ------------------------
Net realized gain (loss)
on investments -- -- 1,212,542 (15,674)
- ------------------------
Net change in unrealized
appreciation
(depreciation)
of investments -- -- 2,922,962 (288,699)
- ------------------------ --------------- --------------- ------------ ------------
Change in net assets
resulting from
operations 25,246,533 20,659,697 10,074,901 5,138,092
- ------------------------ --------------- --------------- ------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS--
- ------------------------
Distributions from net
investment income (25,246,533) (20,659,697) (5,914,468) (5,678,876)
- ------------------------ --------------- --------------- ------------ ------------
Change in net assets
from distributions to
shareholders (25,246,533) (20,659,697) (5,914,468) (5,678,876)
- ------------------------ --------------- --------------- ------------ ------------
SHARE TRANSACTIONS--
- ------------------------
Proceeds from sale of
shares 1,160,628,263 1,208,046,850 32,780,331 32,302,907
- ------------------------
Net asset value of
shares issued to
shareholders
in payment of
distributions declared 1,286,356 629,753 27,482 28,092
- ------------------------
Cost of shares redeemed (1,054,507,906) (1,129,943,491) (13,502,506) (23,862,729)
- ------------------------ --------------- --------------- ------------ ------------
Change in net assets
resulting from share
transactions 107,406,713 78,733,112 19,305,307 8,468,270
- ------------------------ --------------- --------------- ------------ ------------
Change in net assets 107,406,713 78,733,112 23,465,740 7,927,486
- ------------------------
NET ASSETS:
- ------------------------
Beginning of period 524,462,069 445,728,957 91,184,573 83,257,087
- ------------------------ --------------- --------------- ------------ ------------
End of period $ 631,868,782 $ 524,462,069 $114,650,313 $ 91,184,573
- ------------------------ --------------- --------------- ------------ ------------
Undistributed net
investment income
included
in net assets at the end
of the period $ -- $ -- $ 136,027 $ 111,097
- ------------------------ --------------- --------------- ------------ ------------
</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,
-------------------------- -------------------------
1998 1997 1998 1997
- ------------------------ ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
- ------------------------
OPERATIONS--
- ------------------------
Net investment income $ 2,622,092 $ 3,102,284 $ 2,279,841 $ 2,315,970
- ------------------------
Net realized gain (loss)
on investments 58,160,304 19,606,552 151,620 (1,685,387)
- ------------------------
Net change in unrealized
appreciation
(depreciation)
of investments 42,808,715 20,216,321 369,670 1,220,369
- ------------------------ ------------ ------------ ----------- ------------
Change in net assets
resulting from
operations 103,591,111 42,925,157 2,801,131 1,850,952
- ------------------------ ------------ ------------ ----------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS--
- ------------------------
Distributions from net
investment income (2,656,592) (3,209,583) (2,286,964) (2,329,572)
- ------------------------
Distributions from net
realized gain on
investment transactions (37,488,088) (17,630,011) -- --
- ------------------------ ------------ ------------ ----------- ------------
Change in net assets
from distributions to
shareholders (40,144,680) (20,839,594) (2,286,964) (2,329,572)
- ------------------------ ------------ ------------ ----------- ------------
SHARE TRANSACTIONS--
- ------------------------
Proceeds from sale of
shares 85,834,433 58,030,705 8,595,541 10,063,184
- ------------------------
Net asset value of
shares issued to
shareholders
in payment of
distributions declared 35,274,684 16,925,121 -- --
- ------------------------
Cost of shares redeemed (44,363,740) (28,797,907) (7,738,354) (49,133,533)
- ------------------------ ------------ ------------ ----------- ------------
Change in net assets
resulting from share
transactions 76,745,377 46,157,919 857,187 (39,070,349)
- ------------------------ ------------ ------------ ----------- ------------
Change in net assets 140,191,808 68,243,482 1,371,354 (39,548,969)
- ------------------------
NET ASSETS:
- ------------------------
Beginning of period 272,664,726 204,421,244 38,597,602 78,146,571
- ------------------------ ------------ ------------ ----------- ------------
End of period $412,856,534 $272,664,726 $39,968,956 $ 38,597,602
- ------------------------ ------------ ------------ ----------- ------------
Undistributed net
investment income
included
in net assets at the end
of the period $ 57,494 $ 91,994 $ 36,960 $ 44,083
- ------------------------ ------------ ------------ ----------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
[This Page Intentionally Left Blank]
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)
1998 $ 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)
1998 $ 9.95 0.60 0.45 1.05 (0.60) -- (0.60)
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)
1998 $15.81 0.15 5.26 5.41 (0.15) (2.02) (2.17)
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)
1998 $ 9.68 0.58 0.13 0.71 (0.58) -- (0.58)
</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.
(f) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commisssions were charged.
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
NET ASSET ------------------------------------- NET ASSETS, AVERAGE
VALUE, NET EXPENSE END OF PORTFOLIO COMMISSION
END OF TOTAL INVESTMENT REIMBURSEMENT/ PERIOD TURNOVER RATE
PERIOD RETURN(B) EXPENSES INCOME WAIVER(C) (000 OMITTED) RATE PAID(F)
- --------- --------- -------- ---------- -------------- ------------- --------- ----------
<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 -- --
$ 1.00 5.14% 0.48% 5.03% 0.19% $631,869 -- --
$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% --
$10.40 10.80% 0.84% 5.88% 0.01% $114,650 107% --
$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
$19.05 36.39% 0.94% 0.77% 0.00% $412,857 75% $0.0570
$ 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% --
$ 9.81 7.46% 0.75% 5.86% 0.44% $ 39,969 112% --
</TABLE>
SOUTHTRUST VULCAN FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998
- -------------------------------------------------------------------------------
(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>
Treasury Obligations To provide as high a level of current interest Money
Market Fund income as is consistent with maintaining liquidity ("Treasury
Obligations") and stability of principal.
- --------------------------------------------------------------------------------
Bond Fund ("Bond") To provide a level of total return
consistent with a portfolio of high-quality debt
securities.
- --------------------------------------------------------------------------------
Stock Fund ("Stock") To provide long-term capital
appreciation, with income a secondary consideration.
- --------------------------------------------------------------------------------
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.
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, 1998, the Company, for federal tax purposes, had 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 2005 2006 CARRYFORWARD
----------- --------- ------ --------------
<S> <C> <C> <C>
Income Fund 1,561,092 73,422 1,634,514
-----------
</TABLE>
Additionally, net capital losses of $19,052 attributable to security
transactions incurred after October 31, 1997, are treated as arising on May 1,
1998, 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- 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,
------------------------------------------------------------------------------
1998 1997
-------------------------------------- --------------------------------------
TREASURY TREASURY
OBLIGATIONS BOND STOCK OBLIGATIONS BOND STOCK
- ---------------------- -------------- ---------- ---------- -------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 1,160,628,263 3,180,087 4,743,525 1,208,046,850 3,223,005 3,804,196
- ----------------------
Shares issued to
shareholders in
payment of
distributions declared 1,286,356 2,667 2,137,883 629,753 2,805 1,120,754
- ----------------------
Shares redeemed (1,054,507,906) (1,320,806) (2,451,001) (1,129,943,491) (2,374,300) (1,875,843)
- ---------------------- -------------- ---------- ---------- -------------- ---------- ----------
Net change resulting
from share
transactions 107,406,713 1,861,948 4,430,407 78,733,112 851,510 3,049,107
- ---------------------- -------------- ---------- ---------- -------------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, 1998 APRIL 30, 1997
-------------- --------------
INCOME INCOME
- --------------------------- -------------- --------------
<S> <C> <C>
Shares sold 876,213 1,031,600
- ---------------------------
Shares redeemed (789,401) (5,045,822)
- --------------------------- -------- ----------
Net change resulting from
share transactions 86,812 (4,014,222)
- --------------------------- -------- ----------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--SouthTrust Bank, 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, 1998, were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ------ ------------ ------------
<S> <C> <C>
BOND $119,754,067 $105,008,097
- ------ ------------ ------------
STOCK $290,289,675 $244,290,338
- ------ ------------ ------------
INCOME $ 42,994,023 $ 42,466,644
- ------ ------------ ------------
</TABLE>
(6) YEAR 2000
Similar to other financial organizations, the Funds could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and Administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Funds.
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 Vulcan
Treasury Obligations Money Market Fund, Vulcan Bond Fund, Vulcan Stock Fund and
Vulcan Income Fund (investment portfolios of Southtrust Vulcan Funds, a
Massachusetts business trust), including the schedules of portfolios
investments, as of April 30, 1998, 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, 1998, 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 Vulcan
Treasury Obligations Money Market Fund, Vulcan Bond Fund, Vulcan Stock Fund and
Vulcan Income Fund (investment portfolios of SouthTrust Vulcan Funds) as of
April 30, 1998, the results of their operations for the year then ended, and the
changes in their net assets and their financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania,
June 5, 1998
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
Charles G. Brown, III William O. Vann
Russell W. Chambliss Chairman
Thomas M. Grady Edward C. Gonzales
President and Treasurer
Billy L. Harbert, Jr. C. Christine Thomson
William O. Vann 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: Cusip 844734202
SouthTrust Cusip 844734301
Bank [LOGO] Cusip 844734103
N.A. Cusip 844734400
G00859-01 (6/98)
SOUTHTRUST VULCAN FUNDS APPENDIX
A1. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath the graphic
presentation. The SouthTrust Vulcan Bond Fund is represented by a solid line,
whereas the Lehman Brothers Intermediate Government/Corporate Index ("LBIG/C")
is represented by a dotted line. The line graph is a visual representation of a
comparison of change in value of a hypothetical investment of $10,000 in the
SouthTrust Vulcan Bond Fund for the period from May 8, 1992 (start of
performance) to April 30, 1998. The "y" axis reflects the cost of the investment
ranging from $9,000 to $16,000. The "x" axis reflects computation periods from
the ending value of the hypothetical investment in the SouthTrust Vulcan Bond
Fund as compared to LBIG/C, the ending values are $14,441 and $15,109,
respectively. Beneath the list of components that correspond to the line graph
are the following average annual total return data for the SouthTrust Vulcan
Bond Fund. Total return figures for the one-year, five year and start of
performance-to-date are 6.93%, 5.05% and 6.44%, respectively. The performance
disclaimer and footnotes are listed directly under the graphic presentation.
A2. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath the graphic
presentation. The SouthTrust Vulcan Stock Fund is represented by a solid line,
whereas the Standard & Poor's 500 Index ("S&P") is represented by a dotted line.
The line graph is a visual representation of a comparison of change in value of
a hypothetical investment of $10,000 in the SouthTrust Vulcan Stock Fund for the
period from May 8, 1992 (start of performance) to April 30, 1998. The "y" axis
reflects the cost of the investment ranging from $8,000 to $33,000. The "x" axis
reflects computation periods from the ending value of the hypothetical
investment in the SouthTrust Vulcan Stock Fund as compared to S&P, the ending
values are $25,014 and $31,014 respectively. Beneath the list of components that
correspond to the line graph are the following average annual total return data
for the SouthTrust Vulcan Stock Fund. Total return figures for the one-year,
five year and start of performance-to-date are 30.29%, 18.83% and 16.57%,
respectively. The performance disclaimer and footnotes are listed directly under
the graphic presentation.
A3. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath the graphic
presentation. The SouthTrust Vulcan Income Fund is represented by a solid line,
whereas the Merrill Lynch Corporate/Government 1-5 Year Index ("MLC/G 1-5") is
represented by a dotted line. The line graph is a visual representation of a
comparison of change in value of a hypothetical investment of $10,000 in the
SouthTrust Vulcan Income Fund for the period from January 10, 1996 (start of
performance) to April 30, 1998. The "y" axis reflects the cost of the investment
ranging from $9,000 to $12,000. The "x" axis reflects computation periods from
the ending value of the hypothetical investment in the SouthTrust Vulcan Income
Fund as compared to MLC/G 1-5, the ending values are $10,777 and $11,438,
respectively. Beneath the list of components that correspond to the line graph
are the following average annual total return data for the SouthTrust Vulcan
Income Fund. Total return figures for the one-year and start of
performance-to-date periods are 3.71%, and 3.30%, respectively. The performance
disclaimer and footnotes are listed directly under the graphic presentation.
