<PAGE>
- -------------------------------------------------------------------------------
ANNUAL REPORT, June 30, 1996
CAPPIELLO-RUSHMORE TRUST
4922 FAIRMONT AVENUE, BETHESDA, MD 20814
[LOGO of Cappiello Rushmore Fund] (800) 622-1386 (301) 657-1510
- -------------------------------------------------------------------------------
Dear Fellow Investor:
This is the Cappiello-Rushmore Trust's fourth annual report. The Funds'
performances for the fiscal year ended June 30, 1996 were as follows:
- -------------------------------------------------------------------------------
TOTAL RETURN COMPARISON
(Average annual total return for the period ended June 30, 1996)
<TABLE>
<CAPTION>
Since
One Year Inception*
-------- ----------
<S> <C> <C>
Cappiello-Rushmore Emerging Growth Fund 14.36% 15.84 %
Cappiello-Rushmore Growth Fund 22.06% 16.88 %
Cappiello-Rushmore Utility Income Fund 20.60% 6.51 %
Standard & Poor's 500 Index 26.10% 17.32 %
Cappiello-Rushmore Gold Fund 0.40% (0.30)%
Philadelphia Exchange Gold & Silver Index (XAU) 2.77% 13.19 %
</TABLE>
Returns are historical and include changes in principal and reinvested
dividends and capital gains. Your return and principal will vary and you may
have a gain or loss when you sell shares.
*Inception dates: October 6, 1992 for Emerging Growth Fund, Growth Fund and
Utility Income Fund; Gold Fund inception: March 7, 1994
- -------------------------------------------------------------------------------
SUMMARY
Since early January, stock market momentum, measured by the popular averages
(Standard & Poor's 500 Stock Index and the Dow Jones Industrials) slowed from
its hectic pace of last Fall, culminating in a steady decline in June and a
sharp and sudden correction in July. Beneath the big-capitalization stock
surge of the past twelve months has been a bear market in the technology and
health care stocks, particularly the smaller companies on NASDAQ. Many of the
big gains in technology stocks achieved in the summer and early fall of 1995
(most notably the semi-conductors and computer equipment), dissipated in 1996.
The July correction moderated if not eliminated two of the market's
excesses: the high flying speculation stocks (chiefly technology and initial
public offerings) and the almost universal bullishness on the part of
portfolio managers. In this most recent recovery from the July lows we have
seen financial stocks and other interest sensitive issues outperforming the
averages, reflecting a more positive attitude toward interest rates. This has
been accompanied by growing bearish sentiment (a great contrary indicator).
Declining bond yields, a necessary element for improving stock prices,
indicates conviction that the economy is slowing from its surging pace of the
second quarter. Earnings disappointments such as Motorola and Hewlett Packard,
which helped set off the July decline, have now been replaced by earnings
surprises such as Microsoft which bodes well for third quarter earnings when
reported in early October. While earnings surprises may be past history,
inflation is not. Flat to falling commodity prices reflect no imminent price
threat, but the shifting political agenda regarding the economy from deficit
reduction to growth stimulation on the part of both Democrats and Republicans
poses a longer term threat to the economy.
- -------------------------------------------------------------------------------
<PAGE>
CAPPIELLO-RUSHMORE EMERGING GROWTH FUND
The Emerging Growth Fund invests primarily in common stocks of smaller
capitalization growth companies (predominantly in the technology, specialty
retailing and health care) with above-average growth potential.
The Fund enjoyed another year of double digit growth with a return of 14%.
While not comparable to the sterling returns of 1995, the performance is
satisfactory considering the frantic declines of high tech stocks during the
year. The technology sector, after several years of fast growth, underwent a
severe correction of nearly a year. Earlier, we had adopted a more cautious
stance toward this group reducing our overweighted positions in micro-chip
producers and software manufacturers. However, our decreased exposure to high
tech stocks, (software and computer equipment) last Fall was not nearly
enough, in retrospect. Nevertheless, the shift to other sectors was
significant enough, particularly in the consumer non-durables and health care
area, to show some impressive performances. Among the better performing stocks
in the portfolio as of June 30, 1996 were:
<TABLE>
<S> <C>
National Media Corp. +88%
KV Pharmaceutical Co., Class A +73%
Shared Medical Systems Corp. +60%
National Data Corp. +48%
Transaction Network Services, Inc. +34%
</TABLE>
Also indicative of shifts in the portfolio during the year were purchases in
energy-related stocks. (Reading & Bates Corp. up 97%, Mesa, Inc. up 64%, Nice
Systems, Ltd. (ADR) up 90% and Hub Group, Inc. Class A up 46%.)
With our holdings in technology reduced (but still substantial), added to
our exposure in consumer non-durables and smaller capitalization companies in
sectors such as health care services, retail, and marketing, we believe we are
well positioned to take advantage of an evolving, yet highly selective ongoing
bull market.
We are optimistic about the Fund's prospects for the next twelve months.
Many of our holdings sell at attractive valuations, relative to their growth.
While a number of institutional favorite NASDAQ issues, especially in the
technology sector, have moved up in price the past few weeks, the large
majority of stocks are still closer to their yearly lows than their highs.
CAPPIELLO-RUSHMORE GROWTH FUND
The Growth Fund maintained its larger capitalization focus and enjoyed a
return of 22% for the year. Our emphasis remains technology (although less
weighted than in 1995), consumer non-durables and "quality" names in energy,
financial service as well as sectors such as health care, retailing, and
marketing. Health care stocks represented by Shared Medical Systems Corp. and
Tenet Healthcare Corp. occupy major positions in the portfolio as we seek to
capitalize on the accelerating movement of the U.S. health care system to
managed care.
The retailing and marketing business presents a restructuring opportunity.
This sector has been plagued by over-capacity for some years. Currently,
capacity is being restrained; however, with costs managed more effectively and
modest revenue growth, the result has been stronger earnings gains in the case
of stocks such as Federated Department Stores, Inc. WTS C. Other stocks in
this area represented in the portfolio are Albertsons, Inc., National Media
Corp., and K-Mart Corp.
Among the best performing stocks held in the portfolio as of the end of the
year were:
<TABLE>
<S> <C>
Federated Department Stores, Inc. Warrants "C" +100%
Reynolds & Reynolds Co. + 81%
Shared Medical Systems Corp. + 60%
Student Loan Marketing Association + 58%
Coca-Cola Co. + 53%
</TABLE>
2
<PAGE>
CAPPIELLO-RUSHMORE UTILITY INCOME FUND
The Utility Income Fund portfolio is concentrated in electric utilities with
greater than average dividend yields in order to maximize shareholder income.
We are pleased to report that the Fund's total return (income plus
appreciation) was more than 20% for the year ended June 30, 1996. Our exposure
to the telephone sector has increased, while our exposure to electric and gas
utilities has declined.
Forthcoming competition in all sectors of the utility industry has prompted
utility management to prepare for a more competitive future. Consolidation is
inevitable, leading to significant savings and subsequent stock appreciation.
The recent announcement by SBC Communications to purchase Pacific Telesis is
indicative of this forthcoming takeover trend.
CAPPIELLO-RUSHMORE GOLD FUND
The Gold Fund's principal investment objective is to achieve capital
appreciation by investing in equity securities of companies engaged in gold
and other precious metals production throughout the world. The Fund's
performance of +.40% for the year, while disappointing, is reflective of the
flat price of the metal, itself. Gold continues to be a hedge against loss of
purchasing power through inflation or devaluation of the dollar as well as an
insurance policy against disasters, both financial, diplomatic and political.
The demand for gold and other precious metals is expected to be positive over
the next twelve months and should be translated into higher prices for mining
company stocks. Our investment philosophy continues to center on those
companies who have the capacity to increase their profitability per ounce of
gold production and to expand the amount of gold produced.
OUTLOOK FOR 1996-1997
Our expectations for the next twelve months include an economy growing at a
rate between 2 1/2 and 3% measured in terms of Gross Domestic Product. Part of
the growth is based on an optimistic view of consumer spending behavior.
Historically consumer spending patterns are more determined by changes in
income than any other factor, and income continues to rise. We also see
improvement in the manufacturing sector. While capital spending will not grow
at 1995 rates, the better-than-expected improvement in second quarter profits
indicates that cash flow remains healthy, which means investment in plant and
equipment will increase. Finally, the economies of our major trading partners
are either beginning to recover, like Japan and Canada; or bottoming out, as
in Mexico and Europe. Consequently, a better trade balance should also be part
of the growth picture.
With interest rates over the next few months only modestly higher than
current levels and inflation pretty much in check, the U.S. equity market
continues to represent a positive environment. Accordingly, despite the recent
volatile market, your Funds continue to be managed with an essentially long
term view, based on opportunities for exceptional corporate development and
growth.
As always, thank you for your continued support.
[Signature of Frank A. Cappiello]
Frank A. Cappiello
Chairman, Cappiello-Rushmore Trust
August 13, 1996
3
<PAGE>
June 30, 1996 CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
UTILITY INCOME FUND
<TABLE>
- -----------------------------------------------------------------------------
<CAPTION>
Market Value
Shares (Note 1)
- -----------------------------------------------------------------------------
COMMON STOCKS
<C> <S> <C>
GAS & ELECTRIC -- 68.70%
15,000 Allegheny Power Systems, Inc. $ 463,125
27,000 Central and South West Corp. 783,000
20,000 CMS Energy Corp. 617,500
23,500 Detroit Edison Co. 725,562
20,000 Interstate Power Co. 642,500
40,000 Long Island Lighting Co. 670,000
20,000 Potomac Electric Power Co. 530,000
20,000 Public Service Co. of Colorado 735,000
26,000 Public Service Enterprise Group, Inc. 711,750
28,000 Southern Co. 689,500
40,000 TNP Enterprises, Inc. 1,135,000
17,000 Union Electric Co. 684,250
25,000 United Illuminating Co. 934,375
30,000 Washington Water Power Co. 558,750
-----------
9,880,312
-----------
NATURAL GAS DISTRIBUTION -- 5.36%
35,000 Washington Gas Light Co. 770,000
-----------
TELEPHONE -- 17.13%
25,000 Alltel Corp. 768,750
18,000 Nynex Corp. 855,000
20,000 Southern New England Telecommunications Corp. 840,000
-----------
2,463,750
-----------
TOTAL COMMON STOCKS -- 91.19%
(COST $11,239,826) 13,114,062
-----------
CONVERTIBLE PREFERRED -- 5.85%
17,900 Sea Containers, Ltd. Conv. Pfd. $4.00 (Cost $806,512) 841,300
-----------
MUTUAL FUNDS -- 2.96%
425,669 Fund for Government Investors
(Cost $425,669) 425,669
-----------
TOTAL INVESTMENTS -- 100.00%
(COST $12,472,007) $14,381,031
===========
</TABLE>
GROWTH FUND
- ---------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares (Note 1)
- ---------------------------------------------------------------
COMMON STOCKS
<C> <S> <C>
BEVERAGES -- SOFT DRINKS -- 3.08%
20,000 Coca-Cola Co. $ 977,500
-----------
COMPUTER AND BUSINESS
EQUIPMENT -- 7.12%
30,000 Sun Microsystems, Inc.* 1,766,250
40,000 Tandem Computers, Inc.* 495,000
-----------
2,261,250
-----------
COMPUTER SOFTWARE INFORMATION PROCESSING --
13.89%
149,900 Amdahl Corp.* 1,611,425
20,000 Reynolds & Reynolds Co. 1,065,000
27,000 Shared Medical Systems Corp. 1,734,750
-----------
4,411,175
-----------
CONSUMER ELECTRONICS -- 0.78%
5,000 Harman International Industries, Inc. 246,250
-----------
DIVERSIFIED ELECTRONICS -- 6.24%
30,000 Comsat Corp. 780,000
20,000 GM Hughes Electronics Corp. 1,202,500
-----------
1,982,500
-----------
FINANCIAL -- 13.11%
15,000 American Express Co. 669,375
50,000 Charles Schwab Corp. 1,225,000
19,000 Franklin Resources, Inc. 1,159,000
15,000 Student Loan Marketing Association 1,110,000
-----------
4,163,375
-----------
HEALTHCARE -- 13.17%
20,000 CR Bard, Inc. 680,000
30,000 Foundation Health Corp.* 1,076,250
30,000 Health Systems International, Inc.* 813,750
35,000 Horizon/CMS Healthcare* 450,625
30,000 I-STAT Corp.* 566,250
27,900 Tenet Healthcare Corp.* 596,363
-----------
4,183,238
-----------
MERCHANDISING -- 13.76%
25,000 Albertsons, Inc. 1,034,375
150,000 K-Mart Corp.* 1,856,250
84,000 National Media Corp.* 1,480,500
-----------
4,371,125
-----------
</TABLE>
*Non-income producing.
See Notes to Financial Statements.
4
<PAGE>
June 30, 1996 CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONTINUED)
GROWTH FUND (CONTINUED)
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares (Note 1)
- -----------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
OIL AND GAS -- 2.41%
23,700 Nuevo Energy Co.* $ 764,325
-----------
OIL AND GAS SERVICES -- 4.84%
19,400 Ensco International, Inc.* 630,500
50,000 Varco International, Inc.* 906,250
-----------
1,536,750
-----------
SEMICONDUCTORS/COMPONENTS -- 2.82%
20,000 LSI Logic Corp.* 520,000
20,000 Silicon Valley Group, Inc.* 375,000
-----------
895,000
-----------
TRANSPORTATION -- 9.97%
40,487 KLM Royal Dutch Airlines 1,285,462
35,250 Pittston Burlington Group 762,281
60,000 Stolt Nielsen (ADR), Rep. B 1,117,500
-----------
3,165,243
-----------
TOTAL COMMON STOCKS -- 91.19%
(COST $23,151,990) 28,957,731
-----------
WARRANTS -- 5.41%
125,000 Federated Department Stores, Inc. WTS C*
(Cost $734,513) 1,718,750
-----------
MUTUAL FUNDS -- 3.40%
1,077,798 Fund for Government Investors
(Cost $1,077,798) 1,077,798
-----------
TOTAL INVESTMENTS -- 100.00%
(COST $24,964,301) $31,754,279
===========
</TABLE>
EMERGING GROWTH FUND
- -------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares (Note 1)
- -------------------------------------------------------------
COMMON STOCKS
<C> <S> <C>
COMMUNICATIONS PRODUCTS -- 6.96%
15,000 Madge Networks NV* $ 217,500
43,000 Netstar, Inc.* 849,250
80,000 Nice Systems, Ltd. (ADR)* 1,520,000
26,500 Remec, Inc.* 470,375
15,000 Voice Control Systems, Inc.* 136,875
-----------
3,194,000
-----------
COMPUTER AND BUSINESS
EQUIPMENT -- 2.02%
70,000 Multiple Zones International, Inc.* 927,500
-----------
COMPUTER SOFTWARE -- 10.49%
15,000 Analogy, Inc.* 108,750
74,000 Dataworks Corp.* 1,313,500
15,000 EIS International, Inc.* 382,500
57,800 National Data Corp. 1,979,650
30,000 Transaction Network Services, Inc.* 645,000
42,000 Vmark Software, Inc.* 383,250
-----------
4,812,650
-----------
COMPUTER SOFTWARE INFORMATION PROCESSING --
4.90%
35,000 Shared Medical Systems Corp. 2,248,750
-----------
ELECTRONICS -- 1.66%
43,000 Mylex Corp.* 763,250
-----------
FINANCIAL -- 0.28%
106,500 Search Capital Group, Inc.* 126,469
-----------
FOOD PROCESSING -- 0.73%
20,000 Unimark Group, Inc.* 332,500
-----------
HEALTHCARE PRODUCTS -- 4.75%
50,500 Avigen, Inc.* 353,500
50,000 I-STAT Corp.* 943,750
53,000 KV Pharmaceutical Co., Class A* 755,250
17,000 Lifequest Medical, Inc.* 36,125
10,000 Virus Research Institute, Inc.* 91,250
-----------
2,179,875
-----------
HEALTHCARE SERVICES -- 3.85%
75,000 Cardiovascular Dynamics, Inc.* 918,750
100,000 Universal Hospital Services, Inc.* 850,000
-----------
1,768,750
-----------
</TABLE>
*Non-income producing.
ADR -- American Depository Receipt
See Notes to Financial Statements.
5
<PAGE>
June 30, 1996 CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONTINUED)
EMERGING GROWTH FUND (CONTINUED)
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares (Note 1)
- --------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
LEISURE -- 2.94%
100,000 Ek Chor China Motorcycle Co., Ltd. $ 1,350,000
-----------
MANUFACTURING -- 2.39%
17,000 Furon Co. 420,750
33,500 Oxford Industries, Inc. 540,188
7,700 Simula, Inc.* 135,712
-----------
1,096,650
-----------
MERCHANDISING -- 21.58%
100,000 Charming Shoppes, Inc.* 706,250
300,000 Filenes Basement Corp.* 1,462,500
100,000 Intertan, Inc.* 575,000
206,000 National Media Corp.* 3,630,750
21,000 Phillips Van Heusen Corp. 267,750
385,000 Score Board, Inc. * 1,828,750
154,400 Service Merchandise Co., Inc.* 868,500
100,000 Topps Company, Inc.* 562,500
-----------
9,902,000
-----------
MISCELLANEOUS -- 4.00%
100,000 Lo-Jack Corp.* 1,125,000
20,000 Uniphase Corp. 710,000
-----------
1,835,000
-----------
OIL -- DOMESTIC & CRUDE -- 3.00%
250,000 Mesa, Inc.* 1,375,000
-----------
OIL AND GAS SERVICES -- 8.09%
100,000 Reading & Bates Corp.* 2,212,500
50,000 Weatherford Enterra, Inc.* 1,500,000
-----------
3,712,500
-----------
SERVICE -- 2.82%
140,000 Forensic Technologies International Corp.* 1,295,000
-----------
TELECOMMUNICATIONS -- 8.31%
30,000 Celeritek, Inc.* 330,000
8,000 Davox Corp.* 236,000
70,000 Hungarian Telephone & Cable Co.* 840,000
48,000 JPM Co.* 402,000
60,000 Metricom, Inc.* 945,000
50,000 Network Equipment Technologies, Inc.* 1,062,500
-----------
3,815,500
-----------
</TABLE>
EMERGING GROWTH FUND (CONTINUED)
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares (Note 1)
- -------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
TRANSPORTATION -- 6.01%
25,000 Hub Group, Inc. Class A* $ 509,375
45,000 Pittston Burlington Group 973,125
86,000 World Airways, Inc.* 602,000
100,000 Worldcorp, Inc.* 675,000
-----------
2,759,500
-----------
TOTAL COMMON STOCKS -- 94.78%
(COST $38,193,565) 43,494,894
-----------
MUTUAL FUNDS -- 5.22%
2,395,721 Fund for Government Investors (Cost $2,395,721) 2,395,721
-----------
TOTAL INVESTMENTS -- 100.00%
(COST $40,589,286) $45,890,615
===========
</TABLE>
*Non-income producing.
See Notes to Financial Statements.
6
<PAGE>
June 30, 1996 CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONTINUED)
GOLD FUND
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Shares (Note 1)
- ---------------------------------------------------------------------
COMMON STOCKS
<C> <S> <C>
METALS AND MINING
DOMESTIC -- 47.12%
50,000 Amax Gold, Inc.* $ 275,000
40,000 Battle Mountain Gold Co. 290,000
15,000 Coeur D'Alene Mines Corp. 275,625
17,000 Homestake Mining Co. 291,125
5,000 Newmont Gold Co. 251,875
7,000 Newmont Mining Corp. 345,625
25,000 Pegasus Gold, Inc.* 306,250
25,000 Santa Fe Pacific Gold Corp. 353,125
15,000 Stillwater Mining Co.* 354,375
----------
2,743,000
----------
FOREIGN -- 48.90%
25,000 Agnico Eagle Mines, Ltd. 406,250
10,000 Barrick Gold Corp. 271,250
26,000 Cambior, Inc. 347,750
8,000 De Beers Consolidated Mines (ADR) 270,000
40,000 Kinross Gold Corp.* 300,000
60,000 Miramar Mining Corp.* 330,000
11,000 Placer Dome, Inc. 262,625
100,000 Royal Oak Mines, Inc.* 368,750
40,000 TVX Gold, Inc.* 290,000
----------
2,846,625
----------
TOTAL COMMON STOCKS -- 96.02%
(COST $5,236,445) 5,589,625
----------
MUTUAL FUNDS -- 3.98%
231,433 Fund for Government Investors (Cost $231,433) 231,433
----------
TOTAL INVESTMENTS -- 100.00%
(COST $5,467,878) $5,821,058
==========
</TABLE>
*Non-income producing.
ADR -- American Depository Receipt
See Notes to Financial Statements.
7
<PAGE>
June 30, 1996 CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
UTILITY EMERGING
INCOME FUND GROWTH FUND GROWTH FUND GOLD FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Securities at Value (Note 1,
see portfolios for cost
information)............... $14,381,031 $31,754,279 $45,890,615 $ 5,821,058
Dividends Receivable........ 82,403 10,260 7,350 --
Interest Receivable......... 1,034 5,449 5,599 1,359
Receivable for Securities
Sold....................... 259,466 -- 700,117 260,606
Receivable for Shares Sold.. 428,918 79,021 87,305 48,838
----------- ----------- ----------- -----------
Total Assets.............. 15,152,852 31,849,009 46,690,986 6,131,861
----------- ----------- ----------- -----------
LIABILITIES
Dividends Payable........... 17,383 -- -- --
Investment Advisory Fee
Payable.................... 4,052 13,255 18,982 3,904
Administration Fee Payable.. 8,104 26,511 37,964 5,577
Liability for Shares
Redeemed................... 17,184 32,327 391,670 --
Liability for Securities
Purchased.................. -- -- 1,256,875 --
----------- ----------- ----------- -----------
Total Liabilities......... 46,723 72,093 1,705,491 9,481
----------- ----------- ----------- -----------
NET ASSETS................... $15,106,129 $31,776,916 $44,985,495 $ 6,122,380
=========== =========== =========== ===========
SHARES OUTSTANDING........... 1,424,777 1,778,484 2,647,080 616,426
=========== =========== =========== ===========
NET ASSET VALUE PER SHARE.... $10.60 $17.87 $16.99 $9.93
=========== =========== =========== ===========
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
8
<PAGE>
For the Year Ended June 30, 1996 CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
UTILITY EMERGING
INCOME FUND GROWTH FUND GROWTH FUND GOLD FUND
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest.................... $ 59,165 $ 70,296 $ 171,003 $ 39,042
Dividends................... 964,420 227,318 91,865 46,017
---------- ---------- ----------- ---------
Total Investment Income.... 1,023,585 297,614 262,868 85,059
---------- ---------- ----------- ---------
EXPENSES
Investment Advisory Fee
(Note 2)................... 61,055 137,107 253,800 53,459
Administrative Fee (Note 2). 122,110 274,215 507,600 76,369
---------- ---------- ----------- ---------
Total Expenses............. 183,165 411,322 761,400 129,828
---------- ---------- ----------- ---------
NET INVESTMENT INCOME (LOSS). 840,420 (113,708) (498,532) (44,769)
---------- ---------- ----------- ---------
Net Realized Gain on
Investment Transactions..... 1,027,583 1,720,027 6,135,405 322,082
Net Change in Unrealized
Appreciation (Depreciation)
of Investments.............. 1,280,283 3,405,681 (1,388,307) (185,846)
---------- ---------- ----------- ---------
NET GAIN ON INVESTMENTS...... 2,307,866 5,125,708 4,747,098 136,236
---------- ---------- ----------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS... $3,148,286 $5,012,000 $ 4,248,566 $ 91,467
========== ========== =========== =========
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
9
<PAGE>
CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
UTILITY
INCOME FUND GROWTH FUND
- ----------------------------------------------------------------------------------
FOR THE YEAR ENDED JUNE 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES
Net Investment Income
(Loss)................ $ 840,420 $ 988,845 $ (113,708) $ 15,477
Net Realized Gains
(Losses) on Investment
Transactions.......... 1,027,583 (1,427,789) 1,720,027 842,836
Net Change in
Unrealized
Appreciation of
Investments........... 1,280,283 2,715,291 3,405,681 3,175,447
------------ ------------ ------------ ------------
Net Increase in Net
Assets Resulting from
Operations........... 3,148,286 2,276,347 5,012,000 4,033,760
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHARE-
HOLDERS
From Net Investment
Income................ (839,386) (981,811) -- (18,530)
From Net Realized Gain
on Investments........ -- -- -- --
------------ ------------ ------------ ------------
Total Distributions to
Shareholders......... (839,386) (981,811) -- (18,530)
------------ ------------ ------------ ------------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales
of Shares............. 22,326,670 37,117,411 36,733,251 22,155,069
Reinvestment of
Distributions......... 671,443 803,619 -- 11,598
Cost of Shares
Redeemed.............. (27,351,733) (31,181,674) (29,304,990) (16,837,874)
------------ ------------ ------------ ------------
Net Increase
(Decrease) in Net
Assets Resulting from
Share Transactions... (4,353,620) 6,739,356 7,428,261 5,328,793
------------ ------------ ------------ ------------
TOTAL INCREASE (DE-
CREASE) IN NET AS-
SETS................. (2,044,720) 8,033,892 12,440,261 9,344,023
NET ASSETS -- Beginning
of Year................ 17,150,849 9,116,957 19,336,655 9,992,632
------------ ------------ ------------ ------------
NET ASSETS -- End of
Year................... $15,106,129 $17,150,849 $31,776,916 $19,336,655
============ ============ ============ ============
SHARES
Sold................... 2,216,170 4,159,987 2,234,071 1,788,616
Issued in Reinvestment
of Distributions...... 64,781 90,906 -- 966
Redeemed............... (2,711,615) (3,481,616) (1,776,492) (1,372,991)
------------ ------------ ------------ ------------
Net Increase
(Decrease) in Shares. (430,664) 769,277 457,579 416,591
============ ============ ============ ============
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
10
<PAGE>
CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
EMERGING
GROWTH FUND GOLD FUND
- -----------------------------------------------------------------------------------
FOR THE YEAR ENDED JUNE 30,
1996 1995 1996 1995
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES
Net Investment Loss.... $ (498,532) $ (153,941) $ (44,769) $ (32,385)
Net Realized Gains
(Losses) on Investment
Transactions.......... 6,135,405 396,260 322,082 (265,143)
Net Change in
Unrealized
Appreciation
(Depreciation) of
Investments........... (1,388,307) 9,024,889 (185,846) 680,092
------------- ------------ ------------ ------------
Net Increase in Net
Assets Resulting from
Operations........... 4,248,566 9,267,208 91,467 382,564
------------- ------------ ------------ ------------
DISTRIBUTIONS TO SHARE-
HOLDERS
From Net Investment
Income................ -- -- -- --
From Net Realized Gain
on Investments........ (344,847) -- -- --
------------- ------------ ------------ ------------
Total Distributions to
Shareholders......... (344,847) -- -- --
------------- ------------ ------------ ------------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales
of Shares............. 133,412,070 61,618,131 32,770,950 21,826,166
Reinvestment of
Distributions......... 291,283 -- -- --
Cost of Shares
Redeemed.............. (129,227,353) (52,412,473) (33,535,892) (21,808,138)
------------- ------------ ------------ ------------
Net Increase
(Decrease) in Net
Assets Resulting from
Share Transactions... 4,476,000 9,205,658 (764,942) 18,028
------------- ------------ ------------ ------------
TOTAL INCREASE
(DECREASE) IN NET
ASSETS............... 8,379,719 18,472,866 (673,475) 400,592
NET ASSETS -- Beginning
of Year................ 36,605,776 18,132,910 6,795,855 6,395,263
------------- ------------ ------------ ------------
NET ASSETS -- End of
Year................... $ 44,985,495 $ 36,605,776 $ 6,122,380 $ 6,795,855
============= ============ ============ ============
SHARES
Sold................... 8,118,604 4,797,089 3,126,181 2,371,129
Issued in Reinvestment
of Distributions...... 18,518 -- -- --
Redeemed............... (7,936,795) (4,092,329) (3,196,969) (2,355,424)
------------- ------------ ------------ ------------
Net Increase
(Decrease) in Shares. 200,327 704,760 (70,788) 15,705
============= ============ ============ ============
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
11
<PAGE>
CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
UTILITY INCOME FUND
- --------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1994 1993*
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net Asset Value --
Beginning of Year....... $ 9.24 $ 8.39 $ 10.82 $ 10.00
------- ------- ------- -------
Income from Investment
Operations:
Net Investment Income..... 0.489 0.555 0.527 0.255
Net Realized and
Unrealized Gains (Losses)
on Securities............ 1.391 0.846 (2.421) 0.820
------- ------- ------- -------
Total from Investment
Operations.............. 1.880 1.401 (1.894) 1.075
------- ------- ------- -------
Distributions to
Shareholders:
From Net Investment
Income................... (0.520) (0.551) (0.525) (0.255)
From Net Realized Capital
Gains.................... -- -- (0.011) --
------- ------- ------- -------
Total Distributions to
Shareholders............ (0.520) (0.551) (0.536) (0.255)
------- ------- ------- -------
Net Increase (Decrease) in
Net Asset Value.......... 1.36 0.85 (2.43) 0.82
------- ------- ------- -------
Net Asset Value -- End of
Year..................... $ 10.60 $ 9.24 $ 8.39 $ 10.82
======= ======= ======= =======
TOTAL INVESTMENT RETURN.... 20.60 % 16.62 % (18.18)% 9.98 %/A/
RATIOS TO AVERAGE NET
ASSETS:
Expenses.................. 1.05 % 1.05 % 1.05 % 1.05 %/B/
Net Investment Income..... 4.82 % 6.26 % 5.21 % 3.31 %/B/
SUPPLEMENTARY DATA:
Portfolio Turnover Rate... 45.11 % 147.04 % 26.13 % 15.93 %
Net Assets at End of Year
(000's omitted).......... $15,106 $17,151 $9,117 $8,415
Number of Shares
Outstanding at End of
Year (000's omitted)..... 1,425 1,855 1,086 778
</TABLE>
-----
/A/ Total Investment Return for periods of less than one year are not
annualized.
/B/ Annualized.
- --------------------------------------------------------------------------------
*From Commencement of Operations October 6, 1992.
See Notes to Financial Statements.
12
<PAGE>
CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
GROWTH FUND
- --------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1994 1993*
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net Asset Value --
Beginning of Year....... $ 14.64 $ 11.05 $ 10.63 $ 10.00
------- ------- ------- -------
Income from Investment
Operations:
Net Investment Income
(Loss)................... (0.069) 0.014 (0.021) 0.012
Net Realized and
Unrealized Gains on
Securities............... 3.299 3.593 0.444 0.620
------- ------- ------- -------
Total from Investment
Operations.............. 3.230 3.607 0.423 0.632
------- ------- ------- -------
Distributions to
Shareholders:
From Net Investment
Income................... -- (0.017) (0.003) (0.002)
From Net Realized Capital
Gains.................... -- -- -- --
------- ------- ------- -------
Total Distributions to
Shareholders............ -- (0.017) (0.003) (0.002)
------- ------- ------- -------
Net Increase in Net Asset
Value.................... 3.23 3.59 0.42 0.63
------- ------- ------- -------
Net Asset Value -- End of
Year..................... $ 17.87 $ 14.64 $ 11.05 $ 10.63
======= ======= ======= =======
TOTAL INVESTMENT RETURN.... 22.06 % 32.65 % 3.99 % 6.34 %/A/
RATIOS TO AVERAGE NET
ASSETS:
Expenses.................. 1.50 % 1.50 % 1.50 % 1.50 %/B/
Net Investment Income
(Loss)................... (0.41)% 0.12 % (0.18)% 0.17 %/B/
SUPPLEMENTARY DATA:
Portfolio Turnover Rate... 74.50 % 70.89 % 119.03 % 21.13 %
Net Assets at End of Year
(000's omitted).......... $31,777 $19,337 $9,993 $3,165
Number of Shares
Outstanding at End of
Year (000's omitted)..... 1,778 1,321 904 298
</TABLE>
-----
/A/ Total Investment Return for periods of less than one year are not
annualized.
/B/ Annualized.
- --------------------------------------------------------------------------------
*From Commencement of Operations October 6, 1992.
See Notes to Financial Statements.
13
<PAGE>
CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
EMERGING GROWTH FUND
- --------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1994 1993*
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net Asset Value --
Beginning of Year....... $ 14.96 $ 10.41 $ 11.32 $ 10.00
------- ------- ------- -------
Income from Investment
Operations:
Net Investment Loss....... (0.161) (0.075) (0.104) (0.050)
Net Realized and
Unrealized Gains (Losses)
on Securities............ 2.300 4.625 (0.686) 1.377
------- ------- ------- -------
Total from Investment
Operations.............. 2.139 4.550 (0.790) 1.327
------- ------- ------- -------
Distributions to
Shareholders:
From Net Investment
Income................... -- -- -- --
From Net Realized Capital
Gains.................... (0.109) -- (0.120) (0.007)
------- ------- ------- -------
Total Distributions to
Shareholders............ (0.109) -- (0.120) (0.007)
------- ------- ------- -------
Net Increase (Decrease) in
Net Asset Value.......... 2.03 4.55 (0.91) 1.32
------- ------- ------- -------
Net Asset Value -- End of
Year..................... $ 16.99 $ 14.96 $ 10.41 $ 11.32
======= ======= ======= =======
TOTAL INVESTMENT RETURN.... 14.36 % 43.71 % (7.31)% 13.35 %/A/
RATIOS TO AVERAGE NET
ASSETS:
Expenses.................. 1.50 % 1.50 % 1.50 % 1.50 %/B/
Net Investment Loss....... (0.98)% (0.61)% (0.85)% (0.63)%/B/
SUPPLEMENTARY DATA:
Portfolio Turnover Rate... 121.22 % 96.11 % 128.13 % 67.90 %
Net Assets at End of Year
(000's omitted).......... $44,985 $36,606 $18,133 $4,750
Number of Shares
Outstanding at End of
Year (000's omitted)..... 2,647 2,447 1,742 420
</TABLE>
-----
/A/ Total Investment Return for periods of less than one year are not
annualized.
/B/ Annualized.
- --------------------------------------------------------------------------------
*From Commencement of Operations October 6, 1992.
See Notes to Financial Statements.
14
<PAGE>
CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
GOLD FUND
- --------------------------------------------------------------------------------
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED PERIOD ENDED
JUNE 30, JUNE 30, JUNE 30,
1996 1995 1994*
---------- ---------- ------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net Asset Value -- Beginning of Year.... $ 9.89 $ 9.52 $ 10.00
------ ------ -------
Income from Investment Operations:
Net Investment Loss..................... (0.060) (0.047) (0.008)
Net Realized and Unrealized Gains
(Losses) on Securities................. 0.100 0.417 (0.472)
------ ------ -------
Total from Investment Operations....... 0.040 0.370 (0.480)
------ ------ -------
Distributions to Shareholders:
From Net Investment Income.............. -- -- --
From Net Realized Capital Gains......... -- -- --
------ ------ -------
Total Distributions to Shareholders.... -- -- --
------ ------ -------
Net Increase (Decrease) in Net Asset
Value.................................. 0.04 0.37 (0.48)
------ ------ -------
Net Asset Value -- End of Year.......... $ 9.93 $ 9.89 $ 9.52
====== ====== =======
TOTAL INVESTMENT RETURN.................. 0.40 % 3.89 % (4.80)%/A/
RATIOS TO AVERAGE NET ASSETS:
Expenses................................ 1.70 % 1.70 % 1.68 %/B/
Net Investment Loss..................... (0.59)% (0.51)% (0.25)%/B/
SUPPLEMENTARY DATA:
Portfolio Turnover Rate................. 59.06 % 51.23 % 22.85 %
Net Assets at End of Year (000's
omitted)............................... $6,122 $6,796 $6,395
Number of Shares Outstanding at End of
Year (000's omitted)................... 616 687 672
</TABLE>
-----
/A/ Total Investment Return for periods of less than one year are not
annualized.
/B/ Annualized.
- --------------------------------------------------------------------------------
*From Commencement of Operations March 7, 1994.
See Notes to Financial Statements.
15
<PAGE>
June 30, 1996 CAPPIELLO-RUSHMORE TRUST
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
Cappiello-Rushmore Trust ("Trust") is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 as a no-load,
open-end investment company and is authorized to issue an unlimited number of
shares. The Trust consists of four separate portfolios ("Funds"), each with a
different investment objective. The financial statements have been prepared in
conformity with generally accepted accounting principles which permit
management to make certain estimates and assumptions at the date of the
financial statements. The following is a summary of significant accounting
policies which the Funds follow:
(a) Listed securities are valued at the last sales price of the New York
Stock Exchange and other major exchanges. Over-the-Counter securities are
valued at the last sales price. If market quotations are not readily
available, the Board of Trustees will value the Funds' securities in good
faith. The trustees will periodically review this method of valuation and
recommend changes which may be necessary to assure that the Funds'
instruments are valued at fair value.
(b) Security transactions are recorded on the trade date (the date the
order to buy or sell is executed). Interest income is accrued on a daily
basis. Dividend income is recorded on the ex-dividend date. Realized gains
and losses from securities transactions are computed on an identified cost
basis.
(c) Dividends from net investment income are declared and paid annually in
the Growth, Emerging Growth and Gold Funds and quarterly in the Utility
Income Fund. Dividends are re-invested in additional shares unless
shareholders request payment in cash. Net capital gains, if any, are
distributed annually.
(d) For Federal income tax purposes, each Fund of the Trust is treated as a
separate corporation. Each Fund intends to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and
distribute all net investment income and realized capital gains to their
shareholders. If for some reason one or more Funds fails to qualify as a
regulated investment company, the Investment Adviser and Administrator will
indemnify the Fund. Therefore, no Federal income tax provision is required.
2. Investment Advisory Fees and Other Transactions with Affiliates
Investment advisory services are provided by McCullough, Andrews and
Cappiello, Inc., ("Adviser"). Under an agreement with the Adviser, the Trust
pays a fee at the annual rate of 0.50% of the daily net assets of the Growth
and Emerging Growth Funds, 0.70% of the daily net assets of the Gold Fund and
0.35% of the daily net assets of the Utility Income Fund. Certain Officers and
Trustees of the Trust are affiliated with the Adviser.
The Trust has contracted with Money Management Associates ("Administrator")
to provide Administrative services to the Trust. Under the administrative
services agreement with the Administrator, the Trust pays a fee at the annual
rate of 1.00% of the daily net assets of the Growth, Emerging Growth and Gold
Funds, and 0.70% of the daily net assets of the Utility Income Fund. Certain
Officers and Trustees of the Trust are affiliated with the Administrator.
Certain of these administrative services are provided by Rushmore Trust and
Savings, FSB ("Rushmore Trust"), a majority-owned subsidiary of the
Administrator, under a subcontractual agreement with the Administrator. These
services include transfer agency functions, dividend disbursing and other
shareholder services and custody of the Trust's assets.
Each Fund of the Trust invests excess cash in Fund for Government Investors,
a money market mutual fund. Certain Officers and Trustees of Fund for
Government Investors are affiliated with the Trust.
16
<PAGE>
June 30, 1996 CAPPIELLO-RUSHMORE TRUST
- -------------------------------------------------------------------------------
3. Securities Transactions
For the year ended June 30, 1996, purchases and sales (including maturities)
of securities (excluding short-term securities) were as follows:
<TABLE>
<CAPTION>
UTILITY EMERGING
INCOME FUND GROWTH FUND GROWTH FUND GOLD FUND
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Purchases...................... $ 7,197,060 $26,989,712 $61,383,739 $3,990,203
----------- ----------- ----------- ----------
Sales.......................... $11,471,189 $19,307,439 $57,492,616 $4,845,639
----------- ----------- ----------- ----------
</TABLE>
4. Net Unrealized Appreciation/Depreciation of Investments
Unrealized appreciation (depreciation) as of June 30, 1996, based on the
cost for Federal income tax purposes is as follows:
<TABLE>
<CAPTION>
UTILITY EMERGING
INCOME FUND GROWTH FUND GROWTH FUND GOLD FUND
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Gross Unrealized
Appreciation............. $ 1,925,034 $ 8,281,724 $ 9,336,083 $ 525,296
Gross Unrealized
Depreciation............. (47,035) (1,494,410) (4,406,241) (396,176)
----------- ----------- ----------- ----------
Net Unrealized
Appreciation............. $ 1,877,999 $ 6,787,314 $ 4,929,842 $ 129,120
=========== =========== =========== ==========
Cost of Investments for
Federal Income Tax
Purposes................. $12,503,032 $24,966,965 $40,960,773 $5,691,938
=========== =========== =========== ==========
</TABLE>
5. Net Assets
At June 30, 1996, net assets consisted of the following:
<TABLE>
<CAPTION>
UTILITY EMERGING
INCOME FUND GROWTH FUND GROWTH FUND GOLD FUND
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Paid-in-Capital.............. $13,835,881 $22,841,419 $33,534,533 $5,630,582
Undistributed Net Investment
Income...................... 10,123 -- -- --
Accumulated Net Realized Gain
(Loss) on Investments....... (648,899) 2,145,519 6,149,633 138,618
Net Unrealized Appreciation
on Investments.............. 1,909,024 6,789,978 5,301,329 353,180
----------- ----------- ----------- ----------
Net Assets................... $15,106,129 $31,776,916 $44,985,495 $6,122,380
=========== =========== =========== ==========
</TABLE>
17
<PAGE>
June 30, 1996 CAPPIELLO-RUSHMORE TRUST
- -------------------------------------------------------------------------------
6. Federal Income Tax
Permanent differences between tax and financial reporting of net investment
income and realized gains/(losses) are reclassified to paid-in-capital. As of
June 30, 1996, net investment losses were reclassified to paid-in-capital as
follows:
<TABLE>
<CAPTION>
UTILITY EMERGING
INCOME FUND GROWTH FUND GROWTH FUND GOLD FUND
----------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Reduction of paid-in-capital.... -- $113,708 $498,532 $44,769
</TABLE>
At June 30, 1996, for Federal income tax purposes, the following Funds had
capital loss carryovers which may be applied against future net taxable
realized gains of each succeeding year until the earlier of its utilization or
its expiration:
<TABLE>
<CAPTION>
UTILITY EMERGING
EXPIRES JUNE 30, INCOME FUND GROWTH FUND GROWTH FUND GOLD FUND
---------------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
1998........................... $ -- $ -- $ -- $1,010,282
1999........................... -- -- 657,715 --
2000........................... -- -- -- 434,866
2001........................... -- -- 287,195 281,566
2002........................... -- -- -- --
2003........................... 617,886 -- -- --
-------- ------- -------- ----------
Total......................... $617,886 $ -- $944,910 $1,726,714
======== ======= ======== ==========
</TABLE>
18
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees of Cappiello-Rushmore Trust:
We have audited the statements of assets and liabilities including the
portfolios of investments of the Utility Income, Growth, Emerging Growth and
Gold Funds of Cappiello-Rushmore Trust as of June 30, 1996, the related
statements of operations, changes in net assets and the financial highlights
for the periods presented. These financial statements and financial highlights
are the responsibility of the Trust's 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 June 30, 1996 by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the Utility
Income, Growth, Emerging Growth and Gold Funds of Cappiello-Rushmore Trust as
of June 30, 1996, the results of their operations, the changes in their net
assets and financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
Deloitte & Touche llp
Washington, DC
August 5, 1996
19
<PAGE>
CAPPIELLO-
RUSHMORE
TRUST
UTILITY INCOME FUND
GROWTH FUND
EMERGING GROWTH FUND
GOLD FUND
- --------------------------------------------------------------------------------
ANNUAL REPORT
JUNE 30, 1996
[LOGO of Cappiello Rushmore Fund]
[LOGO of Printed on Recycled Paper]
[LOGO of Printed with SOY INK]
