<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SEMI-ANNUAL REPORT, December 31, 1996
[LOGO] CAPPIELLO-RUSHMORE TRUST
4922 FAIRMONT AVENUE, BETHESDA, MD 20814
(800) 622-1386 (301) 657-1510
</TABLE>
- --------------------------------------------------------------------------------
Dear Fellow Investor:
The year 1996 witnessed a continuation of the uptrend in stocks with the
Standard & Poor's 500 Index reflecting a total return of 22.96%. The catalyst
for the overall rise in prices was basically better than expected corporate
earnings against a backdrop of low inflation and relatively low interest rates.
It was a "Goldilocks Economy" -- not too hot, not too cold, but just right, with
remarkably few excesses in a nurturing climate of business optimism. Beneath the
surface of the rising tide of prices was substantial price volatility. The
market break in July, particularly in over-the-counter stocks, was one prominent
example. Further, there was relentless sector rotation as group after group was
bid up in price and subsequently sold off from aggressive portfolios: the health
care stocks in early Spring, the high-tech stock crash in the Summer resulting
in a near 20% decline in the NASDAQ, and most recently (late last Fall) the rise
in energy related stock.
Overall, the market gains in 1996 masked two sharply divergent trends. The
first half of the year was primarily a small-capitalization market and the
second half (beginning at the bottom of the sharp market correction in July) was
essentially a big capitalization market as the large "Blue Chip" stocks took
off, leaving the smaller stocks behind.
Unlike 1995, the Cappiello-Rushmore Funds' investment performance in 1996
lagged the market indices in varying degrees as follows:
- --------------------------------------------------------------------------------
TOTAL RETURN 1996
JANUARY 1, 1996 -- DECEMBER 31, 1996
<TABLE>
<S> <C>
Cappiello-Rushmore Growth + 7.21%
Cappiello-Rushmore Emerging Growth + 2.03%
Cappiello-Rushmore Gold - 6.33%
Cappiello-Rushmore Utility Income + 4.38%
*****************************************************************************
Standard & Poor's 500 Index + 22.96%
Philadelphia Exchange Gold & Silver Index (XAU) - 3.05%
</TABLE>
THE S&P 500 IS AN UNMANAGED INDEX AND, UNLIKE THE FUNDS, HAS NO MANAGEMENT FEES
OR OTHER OPERATING EXPENSES TO REDUCE ITS REPORTED RETURN. RETURNS ARE
HISTORICAL AND INCLUDE CHANGES IN PRINCIPAL AND REINVESTED DIVIDENDS AND CAPITAL
GAINS.
- --------------------------------------------------------------------------------
The Growth Fund's performance, up 7.21%, reflected our focus on "value"
growth as opposed to the "Blue Chip" growth stocks that were in vogue last year
(General Electric, Proctor & Gamble, Gillette, Microsoft). Our approach to stock
selection is to search out earnings growth while minimizing risk in the
portfolio by restraining the price paid for securities. Our bottom-up selection
process starts with a business analysis and ends with an evaluation of price and
value. The companies we usually buy in the mid-to-large cap sectors may not be
household
<PAGE>
names, but companies like Federated Department Stores, Inc. WTS C, General
Motors Corp. Class H, and Reynolds & Reynolds, Co. Though "Blue Chip" growth
stocks have been strong, our view is that they are already heavily owned by
institutions at high prices. It is doubtful if there are any large-cap growth
funds that don't own Microsoft, Intel, Cisco, Gillette or General Electric in
size. The danger here is that once the relative performance of these stocks
flatten, they will be deserted by their institutions for something more popular.
Recently, we've been encouraged by the rising interest and performance in energy
stocks (20.8% of the portfolio) last Fall and the growing interest in retailing
stocks (16.9% of the portfolio).
The Emerging Growth Fund was up 2.03% last year despite the difficult
environment for small capitalization stocks, generally. Small cap stocks were in
a rising market in the first five months of the year but as was noted, the sharp
sell-off in the Summer effectively erased most profits in just nine weeks and
emerging growth stocks never recovered their price momentum. While the major
market averages (the Dow Industrials and the S&P 500) moved up strongly in the
Fall, particularly in the last quarter, emerging growth lagged the market.
Nevertheless, we believe the stage has been set for an improved small
capitalization stock climate. There are few if any speculative excesses in the
small cap sector, and yet earnings growth is intact and selling at reasonable
valuation on a relative basis when compared to their larger Blue Chip brethren.
We continue to be positioned in the fastest growth sectors of the economy such
as drug and hospital supplies (14.27% of the portfolio) and electronic and
equipment (21.24% of the portfolio).
The Utility Income Fund was 4.38% on a total return basis. Since our focus
in the Fund has been to achieve a higher than average yield, we are happy to
report that the current yield (as of 1/31/97) is 5.9%, one of the highest yields
in the utility mutual fund universe according to MUTUAL FUNDS MAGAZINE.
Additionally, we continue to diversify in the utility sector with recent
purchases of telephone stocks as well as natural gas companies.
The Gold Fund recorded a 6.33% decline in total return. Unhappily, this
mirrors the depressed price of gold bullion which drifted lower most of the
year. We have had, for reasons of diversification, to go beyond the major gold
mining companies since the Fund cannot carry outsized weightings (purchases
beyond 5% of the total assets in the portfolio). This has forced us to seek
diversification beyond North America. The gold and silver sector (XAU, our
benchmark) on the other hand, does have the ability to overemphasize positions;
for example, Placer Dome, Inc. represents 25% of the total index and Barrick
Gold Corp. 37%. Nevertheless, we continue to search for value, for companies
possessing unique mining or reserve capabilities that will offset the declining
price of gold.
In our opinion, while gold doesn't fit the current optimistic view of the
world economy, we believe that there is sufficient support for gold as an
insurance policy in case things go wrong in the world. Gold has had this
insurance role for thousands of years and we see no end to this investment
approach. Further, ever-increasing jewelry demand on a global basis remains one
significant positive.
THE ECONOMY AND THE MARKET
Our overall view of the U.S. economy for 1997 is that it will continue to
expand at a moderate pace (2 1/2 - 3% growth in GDP) with inflation not a
serious threat (probably 3% or less). Interest rates in terms of the 30 year
Treasury Bond will range between 6% and 7 1/4% with rates probably retreating to
the 6% level in the Fall.
Against this economic backdrop of moderate, sustainable economic growth, a
sound financial system, low inflation, benign interest rates, rising profits,
and a massive flow of funds into equities, we have a Republican Congress with a
Democratic President that is expected to avoid risky fiscal activism and
experimentation.
Accordingly, it appears we have the conditions for a continuation of the
bull market. Any change in any of the foregoing factors could cause change in
investor psychology or in the economy with a resultant stock decline.
2
<PAGE>
Now entering its seventh year of rising stock prices, the current bull
market is facing more imponderables and problems than ever before. Further,
after more than six years of rising prices, and based on 1997 earnings
projections, the stock market (in terms of the Dow 30 and S&P 500) appears to
be, at minimum, fairly priced. The key to further price gains this year will be
the performance of the economy; our estimate of economic fundamentals indicate a
growth about the same as last year but with the rising possibility of wage
pressures which could reflect a mild rise in rates. We continue to be bullish
but only mildly so. Further, we expect a modest corporate earnings increase
overall but no general rise in price earnings multiples that were a major factor
in stock prices last year. Thus, in the months ahead, we expect more volatility
in stocks, with this being a year where individual stocks will be the key to
portfolio success rather than sector or big Blue Chip investing. The year 1996
was a year for large company stocks and particularly for large company growth
stocks. The biggest 50 companies, by market capitalization, in the S&P 500 Stock
Index, had an average price rise of over 24% in 1996, while the other 450 stocks
averaged a 16% gain. After underperforming for most of 1996, we believe this
latter group will outperform in 1997. We believe the best values for stock
selections will be found in the energy sector (oil and oil drilling), as well as
some of the more battered retail stocks.
As long term investors we acknowledge that this economy and stock market are
different. This continues to be an economy with no obvious excesses and subdued
inflation with an important but still immeasurable contribution from the
emerging information revolution. Further, business reorganization and rising
productivity have made U.S. corporations power houses of efficiency and
productivity. Their major competitors in Japan and Germany as well as the rest
of Europe are looking to emulate the U.S. in terms of work force and workplace
changes, but they have a long way to go.
Finally, the appetite for stocks by the public continues unabated:
approximately $165-170 billion in cash flowed into U.S. stock funds in 1996.
While it will be hard to duplicate similar flows in 1997, the long term trend is
clearly up over the next few years as baby boomers continue to invest for
retirement with concentration on stocks. Further, we believe the solution to the
Social Security problem will be some form of semi-privatization of the system
over the next few years which could, over the long term, represent another
significant cash flow into the stock market.
[SIGNATURE]
Frank A. Cappiello
Chairman
Cappiello-Rushmore Trust
February 3, 1997
3
<PAGE>
DECEMBER 31, 1996 CAPPIELLO-RUSHMORE TRUST
- ---------------------------------------------------------
PORTFOLIO OF INVESTMENTS
UTILITY INCOME FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------
<C> <S> <C>
MARKET VALUE
SHARES (NOTE 1)
<CAPTION>
- -----------------------------------------------------------
<C> <S> <C>
COMMON STOCKS
GAS & ELECTRIC -- 68.40%
15,000 Allegheny Power Systems, Inc. $ 455,625
20,000 Central and South West Corp. 512,500
20,000 CMS Energy Corp. 672,500
17,000 DTE Energy Co. 550,375
19,000 Interstate Power Co. 551,000
25,000 Long Island Lighting Co. 553,125
12,000 Peoples Energy Corp. 406,500
20,000 Potomac Electric Power Co. 515,000
14,500 Public Service Co. of Colorado 563,688
24,000 Southern Co. 543,000
20,000 TNP Enterprises, Inc. 547,500
16,000 Union Electric Co. 616,000
18,000 United Illuminating Co. 564,750
30,000 Washington Water Power Co. 558,750
-------------
7,610,313
-------------
NATURAL GAS DISTRIBUTION -- 5.69%
28,000 Washington Gas Light Co. 633,500
-------------
TELEPHONE -- 17.95%
22,000 Alltel Corp. 690,250
11,000 Nynex Corp. 529,375
20,000 Southern New England
Telecommunications Corp. 777,500
-------------
1,997,125
-------------
TOTAL COMMON STOCKS -- 92.04%
(COST $8,960,898) 10,240,938
-------------
CONVERTIBLE PREFERRED -- 6.34%
15,500 Sea Containers, Ltd. Conv. Pfd.
$4.00 (Cost $697,840) 705,250
-------------
MUTUAL FUNDS -- 1.62%
179,871 Fund for Government Investors
(Cost $179,871) 179,871
-------------
TOTAL INVESTMENTS -- 100.00%
(COST $9,838,609) $ 11,126,059
-------------
-------------
</TABLE>
GROWTH FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------
<C> <S> <C>
MARKET VALUE
SHARES (NOTE 1)
<CAPTION>
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCKS
BEVERAGES -- SOFT DRINKS -- 4.18%
20,000 Coca-Cola Co. $ 1,052,500
-------------
COMPUTER AND BUSINESS
EQUIPMENT -- 4.10%
75,000 Tandem Computers, Inc.* 1,031,250
-------------
COMPUTER SOFTWARE INFORMATION
PROCESSING -- 12.88%
90,000 Amdahl Corp.* 1,091,250
29,600 Reynolds & Reynolds Co. 769,600
28,000 Shared Medical Systems Corp. 1,379,000
-------------
3,239,850
-------------
DIVERSIFIED ELECTRONICS -- 11.06%
7,000 3COM Corp.* 513,625
20,000 General Motors Corp., Class H 1,125,000
155,000 Gulf Canada Resources Ltd.* 1,143,125
-------------
2,781,750
-------------
FINANCIAL -- 20.44%
15,000 American Express Co. 847,500
50,000 Charles Schwab Corp. 1,600,000
19,000 Franklin Resources, Inc. 1,299,125
15,000 Student Loan Marketing
Association 1,396,875
-------------
5,143,500
-------------
MERCHANDISING -- 11.17%
25,000 Albertsons, Inc. 890,625
140,000 National Media Corp.* 980,000
221,100 Service Merchandise Co.,
Inc.* 939,675
-------------
2,810,300
-------------
OIL AND GAS -- 8.64%
19,400 Ensco International, Inc.* 940,900
23,700 Nuevo Energy Co.* 1,232,400
-------------
2,173,300
-------------
</TABLE>
*NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
DECEMBER 31, 1996 CAPPIELLO-RUSHMORE TRUST
- ---------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONTINUED)
GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------
<C> <S> <C>
MARKET VALUE
SHARES (NOTE 1)
<CAPTION>
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
OIL AND GAS SERVICES -- 6.98%
6,000 Schlumberger Ltd. $ 599,250
50,000 Varco International, Inc.* 1,156,250
-------------
1,755,500
-------------
PERSONAL PRODUCTS -- 2.49%
20,300 Nu Skin Asia Pacific, Inc.* 626,762
-------------
TRANSPORTATION -- 7.45%
41,932 KLM Royal Dutch Airlines 1,168,855
35,250 Pittston Burlington Group 705,000
-------------
1,873,855
-------------
TOTAL COMMON STOCKS - 89.39%
(COST $17,396,318) 22,488,567
-------------
WARRANTS -- 6.46%
125,000 Federated Department Stores,
Inc. WTS C* (Cost $734,513) 1,625,000
-------------
MUTUAL FUNDS -- 4.15%
1,044,134 Fund for Government Investors
(Cost $1,044,134) 1,044,134
-------------
TOTAL INVESTMENTS -- 100.00%
(COST $19,174,965) $ 25,157,701
-------------
-------------
</TABLE>
EMERGING GROWTH FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------
<C> <S> <C>
MARKET VALUE
SHARES (NOTE 1)
<CAPTION>
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCKS
COMMUNICATIONS PRODUCTS -- 1.05%
10,000 Remec, Inc.* $ 196,250
15,000 Voice Control Systems, Inc.* 118,125
-------------
314,375
-------------
COMPUTER AND BUSINESS
EQUIPMENT -- 2.29%
25,000 Larscom, Inc., Class A* 284,375
14,000 Quantum Corp.* 400,750
-------------
685,125
-------------
COMPUTER SOFTWARE -- 10.04%
10,000 Midway Games, Inc.* 202,500
44,000 National Data Corp. 1,914,000
25,000 Planning Sciences
International* 300,000
45,000 Premis Corp.* 253,125
25,700 Quadramed Corp.* 295,550
5,000 Sonic Solutions* 33,750
-------------
2,998,925
-------------
COMPUTER SOFTWARE INFORMATION
PROCESSING -- 5.93%
36,000 Shared Medical Systems Corp. 1,773,000
-------------
ELECTRONICS -- 1.93%
28,000 Barringer Technologies, Inc.* 234,500
20,000 CHS Electronics, Inc.* 342,500
-------------
577,000
-------------
FINANCIAL -- 0.22%
13,312 Search Capital Group, Inc.* 66,560
-------------
HEALTHCARE PRODUCTS -- 11.86%
100,000 Angeion Corp.* 350,000
50,500 Avigen, Inc.* 252,500
60,000 IBAH, Inc.* 405,000
80,000 I-STAT Corp. * 1,900,000
53,000 KV Pharmaceutical Co., Class
A * 636,000
-------------
3,543,500
-------------
HEALTHCARE SERVICES -- 2.41%
55,500 Cardiovascular Dynamics,
Inc.* 721,500
-------------
</TABLE>
*NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
DECEMBER 31, 1996 CAPPIELLO-RUSHMORE TRUST
- ---------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONTINUED)
EMERGING GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------
<C> <S> <C>
MARKET VALUE
SHARES (NOTE 1)
<CAPTION>
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
LEISURE -- 0.57%
23,000 Ek Chor China Motorcycle Co.,
Ltd. $ 169,625
-------------
LODGING -- 2.42%
75,000 Candlewood Hotel Co., Inc.* 721,875
-------------
MANUFACTURING -- 1.13%
31,000 Alyn Corp.* 337,125
-------------
MERCHANDISING -- 16.91%
100,000 Charming Shoppes, Inc.* 506,250
192,000 National Media Corp.* 1,344,000
70,000 Paul Harris Stores, Inc.* 1,242,500
382,000 Score Board, Inc. * 740,125
286,900 Service Merchandise Co.,
Inc.* 1,219,325
-------------
5,052,200
-------------
MISCELLANEOUS -- 0.65%
25,000 Innotech Inc.* 193,750
-------------
OIL -- DOMESTIC & CRUDE -- 1.76%
100,000 Mesa, Inc.* 525,000
-------------
OIL AND GAS SERVICES -- 5.76%
65,000 Reading & Bates Corp.* 1,722,500
-------------
SEMICONDUCTORS/COMPONENTS -- 3.77%
75,000 Sierra Semiconductor Corp.* 1,125,000
-------------
SERVICE -- 4.57%
140,000 Forensic Technologies
International Corp.* 1,365,000
-------------
TELECOMMUNICATIONS -- 12.75%
20,000 Celeritek, Inc.* 212,500
22,500 Centigram Communications
Corp.* 286,875
67,500 Hungarian Telephone & Cable
Co.* 632,812
38,000 JPM Co.* 665,000
60,000 Metricom, Inc.* 900,000
15,000 Superior Telecommunications,
Inc.* 305,625
25,000 Talx Corp.* 206,250
75,000 World Access, Inc.* 600,000
-------------
3,809,062
-------------
</TABLE>
EMERGING GROWTH FUND (CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------
<C> <S> <C>
MARKET VALUE
SHARES (NOTE 1)
<CAPTION>
- -------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
TRANSPORTATION -- 6.86%
25,000 Hub Group, Inc. Class A* $ 668,750
45,000 Pittston Burlington Group 900,000
16,000 World Airways, Inc.* 130,000
80,000 Worldcorp, Inc.* 350,000
-------------
2,048,750
-------------
TOTAL COMMON STOCKS -- 92.88%
(COST $26,191,392) 27,749,872
-------------
CONVERTIBLE PREFERRED -- 5.02%
235,247 Mesa, Inc. 8% Conv. Pfd.
Class A (Cost $832,541) 1,499,700
-------------
WARRANTS -- 0.13%
28,000 Barringer Technologies, Inc.
WTS* (Cost $1,400) 38,500
-------------
MUTUAL FUNDS -- 1.97%
588,516 Fund for Government Investors
(Cost $588,516) 588,516
-------------
TOTAL INVESTMENTS -- 100.00%
(COST $27,613,849) $ 29,876,588
-------------
-------------
</TABLE>
*NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
DECEMBER 31, 1996 CAPPIELLO-RUSHMORE TRUST
- ---------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONTINUED)
GOLD FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------
<C> <S> <C>
MARKET VALUE
SHARES (NOTE 1)
<CAPTION>
- --------------------------------------------------------
<C> <S> <C>
COMMON STOCKS
METALS AND MINING
DOMESTIC -- 43.06%
35,000 Amax Gold, Inc.* $ 223,125
30,000 Battle Mountain Gold Co. 206,250
16,000 Coeur D'Alene Mines Corp. 242,000
15,500 Homestake Mining Co. 220,875
7,000 Newmont Mining Corp. 313,250
20,000 Pegasus Gold, Inc.* 151,250
20,000 Santa Fe Pacific Gold Corp. 307,500
15,500 Stillwater Mining Co.* 280,938
------------
1,945,188
------------
FOREIGN -- 52.46%
16,000 Agnico Eagle Mines, Ltd. 224,000
6,000 ASA, Ltd. 208,500
15,000 Ashanti Goldfields, Ltd. 185,625
7,000 Barrick Gold Corp. 201,250
18,000 Cambior, Inc. 263,250
34,000 Echo Bay Mines, Ltd. 225,250
35,000 Kinross Gold Corp.* 249,375
60,000 Miramar Mining Corp.* 262,500
10,000 Placer Dome, Inc. 217,500
105,000 Rea Gold Corp.* 137,812
60,000 Royal Oak Mines, Inc.* 195,000
------------
2,370,062
------------
TOTAL COMMON STOCKS -- 95.52%
(COST $4,709,690) 4,315,250
------------
MUTUAL FUNDS -- 4.48%
202,577 Fund for Government Investors
(Cost $202,577) 202,577
------------
TOTAL INVESTMENTS -- 100.00%
(COST $4,912,267) $ 4,517,827
------------
------------
</TABLE>
*NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
DECEMBER 31, 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)....... $11,126,059 $25,157,701 $29,876,588 $4,517,827
Receivable for Securities
Sold.................... 382,725 1,430,621 213,843 13,612
Receivable for Shares
Sold.................... 3,227 187,602 37,624 5,095
Dividends Receivable...... 75,115 16,023 7,560 --
Interest Receivable....... 113 8,180 2,229 1,353
Cash in Custodian Bank.... -- -- -- 797
----------- ----------- ----------- -----------
Total Assets............ 11,587,239 26,800,127 30,137,844 4,538,684
----------- ----------- ----------- -----------
LIABILITIES
Investment Advisory Fee
Payable................. 3,389 11,719 13,252 2,762
Administration Fee
Payable................. 21,252 70,648 86,635 12,271
Liability for Shares
Redeemed................ 198,308 2,414,897 1,236,347 98,705
Dividends Payable......... 14,665 145 1,941 --
----------- ----------- ----------- -----------
Total Liabilities....... 237,614 2,497,409 1,338,175 113,738
----------- ----------- ----------- -----------
NET ASSETS.................. $11,349,625 $24,302,718 $28,799,669 $4,424,946
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
SHARES OUTSTANDING.......... 1,087,116 1,425,119 2,156,035 515,943
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
NET ASSET VALUE PER SHARE... $10.44 $17.05 $13.36 $8.58
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
FOR THE SIX MONTHS ENDED DECEMBER 31, 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..................... $ 3,494 $ 58,578 $ 24,409 $ 14,087
Dividends.................... 371,590 132,623 36,251 10,029
------------- ------------- ------------- -----------
Total Investment Income.... 375,084 191,201 60,660 24,116
------------- ------------- ------------- -----------
EXPENSES
Investment Advisory Fee (Note
2)......................... 22,132 70,419 92,999 19,145
Administrative Fee (Note
2)......................... 44,264 140,838 185,999 27,350
------------- ------------- ------------- -----------
Total Expenses............. 66,396 211,257 278,998 46,495
------------- ------------- ------------- -----------
NET INVESTMENT INCOME (LOSS)... 308,688 (20,056) (218,338) (22,379)
------------- ------------- ------------- -----------
Net Realized Gain (Loss) on
Investment Transactions..... 388,436 190,173 1,010,402 (45,879)
Net Change in Unrealized
Appreciation (Depreciation)
of Investments.............. (621,574) (807,242) (3,038,590) (747,620)
------------- ------------- ------------- -----------
NET LOSS ON INVESTMENTS........ (233,138) (617,069) (2,028,188) (793,499)
------------- ------------- ------------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS.................. $ 75,550 $(637,125) ($2,246,526) $(815,878)
------------- ------------- ------------- -----------
------------- ------------- ------------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
UTILITY
INCOME FUND GROWTH FUND
<S> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED DECEMBER 31,
<CAPTION>
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Income (Loss).......... $ 308,688 $ 458,039 $ (20,056) $ (22,632)
Net Realized Gains on Investment
Transactions........................ 388,436 338,976 190,173 933,898
Net Change in Unrealized Appreciation
(Depreciation)
of Investments...................... (621,574) 1,895,137 (807,242) 1,542,323
----------- ----------- ----------- -----------
Net Increase (Decrease) in Net
Assets Resulting from
Operations........................ 75,550 2,692,152 (637,125) 2,453,589
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income............ (318,212) (459,010) -- --
From Net Realized Gain on
Investments......................... -- -- (890,035) --
----------- ----------- ----------- -----------
Total Distributions to
Shareholders...................... (318,212) (459,010) (890,035) --
----------- ----------- ----------- -----------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares..... 1,966,515 17,225,638 13,484,967 20,114,394
Reinvestment of Distributions......... 268,048 354,025 862,636 --
Cost of Shares Redeemed............... (5,748,405) (15,545,212) (20,294,641) (15,192,051)
----------- ----------- ----------- -----------
Net Increase (Decrease) in Net
Assets Resulting from Share
Transactions...................... (3,513,842) 2,034,451 (5,947,038) 4,922,343
----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET
ASSETS............................ (3,756,504) 4,267,593 (7,474,198) 7,375,932
NET ASSETS -- Beginning of Period....... 15,106,129 17,150,849 31,776,916 19,336,655
----------- ----------- ----------- -----------
NET ASSETS -- End of Period............. $11,349,625 $21,418,442 $24,302,718 $26,712,587
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
SHARES
Sold.................................. 191,153 1,733,435 792,370 1,244,259
Issued in Reinvestment of
Distributions....................... 26,249 34,642 50,329 --
Redeemed.............................. (555,063) (1,589,311) (1,196,064) (941,432)
----------- ----------- ----------- -----------
Net Increase (Decrease) in Shares... (337,661) 178,766 (353,365) 302,827
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</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
<S> <C> <C> <C> <C>
FOR THE SIX MONTHS ENDED DECEMBER 31,
<CAPTION>
1996 1995 1996 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
FROM INVESTMENT ACTIVITIES
Net Investment Loss....................................... $ (218,338) $ (244,315) $ (22,379) $ (21,502)
Net Realized Gains (Losses) on Investment Transactions.... 1,010,402 1,069,454 (45,879) (135,262)
Net Change in Unrealized Appreciation (Depreciation) of
Investments............................................. (3,038,590) (134,464) (747,620) (329,492)
-------------- -------------- -------------- --------------
Net Increase (Decrease) in Net Assets Resulting from
Operations............................................ (2,246,526) 690,675 (815,878) (486,256)
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income................................ -- -- -- --
From Net Realized Gain on Investments..................... (5,065,773) (344,884) -- --
-------------- -------------- -------------- --------------
Total Distributions to Shareholders..................... (5,065,773) (344,884) -- --
-------------- -------------- -------------- --------------
FROM SHARE TRANSACTIONS
Net Proceeds from Sales of Shares......................... 35,551,978 88,073,655 16,774,063 11,138,137
Reinvestment of Distributions............................. 4,753,756 291,283 -- --
Cost of Shares Redeemed................................... (49,179,261) (76,553,921) (17,655,619) (11,441,605)
-------------- -------------- -------------- --------------
Net Increase (Decrease) in Net Assets Resulting from
Share Transactions.................................... (8,873,527) 11,811,017 (881,556) (303,468)
-------------- -------------- -------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS................. (16,185,826) 12,156,808 (1,697,434) (789,724)
NET ASSETS -- Beginning of Period........................... 44,985,495 36,605,776 6,122,380 6,795,855
-------------- -------------- -------------- --------------
NET ASSETS -- End of Period................................. $28,799,669 $48,762,584 $ 4,424,946 $ 6,006,131
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
SHARES
Sold...................................................... 2,194,314 5,306,197 1,743,147 1,173,445
Issued in Reinvestment of Distributions................... 359,045 18,518 -- --
Redeemed.................................................. (3,044,404) (4,671,551) (1,843,630) (1,204,631)
-------------- -------------- -------------- --------------
Net Increase (Decrease) in Shares....................... (491,045) 653,164 (100,483) (31,186)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
UTILITY INCOME FUND
<S> <C> <C> <C> <C> <C>
FOR THE SIX FOR THE
MONTHS ENDED FOR THE YEAR ENDED JUNE 30, PERIOD ENDED
DECEMBER 31, ------------------------------------ JUNE 30,
1996 1996 1995 1994 1993*
------------ ---------- ---------- ---------- ------------
PER SHARE OPERATING PERFORMANCE:
Net Asset Value -- Beginning of Period......................... $10.60 $9.24 $8.39 $10.82 $10.00
------------ ---------- ---------- ---------- ------------
Income from Investment Operations:
Net Investment Income........................................ 0.269 0.489 0.555 0.527 0.255
Net Realized and Unrealized Gains (Losses) on Securities..... (0.153) 1.391 0.846 (2.421) 0.820
------------ ---------- ---------- ---------- ------------
Total from Investment Operations........................... 0.116 1.880 1.401 (1.894) 1.075
------------ ---------- ---------- ---------- ------------
Distributions to Shareholders:
From Net Investment Income................................... (0.276) (0.520) (0.551) (0.525) (0.255)
From Net Realized Capital Gains.............................. -- -- -- (0.011) --
------------ ---------- ---------- ---------- ------------
Total Distributions to Shareholders........................ (0.276) (0.520) (0.551) (0.536) (0.255)
------------ ---------- ---------- ---------- ------------
Net Increase (Decrease) in Net Asset Value..................... (0.16) 1.36 0.85 (2.43) 0.82
------------ ---------- ---------- ---------- ------------
Net Asset Value -- End of Period............................... $10.44 $10.60 $9.24 $8.39 $10.82
------------ ---------- ---------- ---------- ------------
------------ ---------- ---------- ---------- ------------
TOTAL INVESTMENT RETURN........................................ 1.17%(A) 20.60% 16.62% (18.18)% 9.98%(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses..................................................... 1.05%(B) 1.05% 1.05% 1.05% 1.05%(B)
Net Investment Income........................................ 4.88%(B) 4.82% 6.26% 5.21% 3.31%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate...................................... 7.42% 45.11% 147.04% 26.13% 15.93%
Net Assets at End of Period (000's omitted).................. $11,350 $15,106 $17,151 $9,117 $8,415
Number of Shares Outstanding at End of Period (000's
omitted)................................................... 1,087 1,425 1,855 1,086 778
Average Commission Rate Paid................................. $0.0525(C)
</TABLE>
-------------------------------------------------------------------
(A) Total Investment Return for periods of less than one year are not
annualized.
(B) Annualized.
(C) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for
security trades on which commissions are charged. This amount may
vary from period to period and fund to fund depending on the mix of
trades executed in various markets where trading practices and
commission rate structures may differ.
*FROM COMMENCEMENT OF OPERATIONS OCTOBER 6, 1992.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
GROWTH FUND
<S> <C> <C> <C> <C> <C>
FOR THE SIX FOR THE
MONTHS ENDED FOR THE YEAR ENDED JUNE 30, PERIOD ENDED
DECEMBER 31, ------------------------------------ JUNE 30,
1996 1996 1995 1994 1993*
------------ ---------- ---------- ---------- ------------
PER SHARE OPERATING
PERFORMANCE:
Net Asset Value --
Beginning of Period...... $17.87 $14.64 $11.05 $10.63 $10.00
------------ ---------- ---------- ---------- ------------
Income from Investment
Operations:
Net Investment Income
(Loss)................. (0.014) (0.069) 0.014 (0.021) 0.012
Net Realized and
Unrealized Gains
(Losses) on
Securities............. (0.217) 3.299 3.593 0.444 0.620
------------ ---------- ---------- ---------- ------------
Total from Investment
Operations........... (0.231) 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.................. (0.589) -- -- -- --
------------ ---------- ---------- ---------- ------------
Total Distributions to
Shareholders......... (0.589) -- (0.017) (0.003) (0.002)
------------ ---------- ---------- ---------- ------------
Net Increase (Decrease) in
Net Asset Value.......... (0.82) 3.23 3.59 0.42 0.63
------------ ---------- ---------- ---------- ------------
Net Asset Value -- End of
Period................... $17.05 $17.87 $14.64 $11.05 $10.63
------------ ---------- ---------- ---------- ------------
------------ ---------- ---------- ---------- ------------
TOTAL INVESTMENT RETURN...... (1.31)%(A) 22.06% 32.65% 3.99% 6.34%(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses................... 1.50%(B) 1.50% 1.50% 1.50% 1.50%(B)
Net Investment Income
(Loss)................... (0.14)%(B) (0.41)% 0.12% (0.18)% 0.17%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate.... 22.89% 74.50% 70.89% 119.03% 21.13%
Net Assets at End of Period
(000's omitted).......... $24,303 $31,777 $19,337 $9,993 $3,165
Number of Shares
Outstanding at End of
Period (000's omitted)... 1,425 1,778 1,321 904 298
Average Commission Rate
Paid..................... $0.0469(C)
</TABLE>
-------------------------------------------------------------------
(A) Total Investment Return for periods of less than one year are not
annualized.
(B) Annualized.
(C) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for
security trades on which commissions are charged. This amount may
vary from period to period and fund to fund depending on the mix of
trades executed in various markets where trading practices and
commission rate structures may differ.
*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
<S> <C> <C> <C> <C> <C>
FOR THE SIX FOR THE
MONTHS ENDED FOR THE YEAR ENDED JUNE 30, PERIOD ENDED
DECEMBER 31, ------------------------------------ JUNE 30,
1996 1996 1995 1994 1993*
------------ ---------- ---------- ---------- ------------
PER SHARE OPERATING PERFORMANCE:
Net Asset Value -- Beginning of Period....................... $16.99 $14.96 $10.41 $11.32 $10.00
------------ ---------- ---------- ---------- ------------
Income from Investment Operations:
Net Investment Loss........................................ (0.101) (0.161) (0.075) (0.104) (0.050)
Net Realized and Unrealized Gains (Losses) on Securities... (0.864) 2.300 4.625 (0.686) 1.377
------------ ---------- ---------- ---------- ------------
Total from Investment Operations......................... (0.965) 2.139 4.550 (0.790) 1.327
------------ ---------- ---------- ---------- ------------
Distributions to Shareholders:
From Net Investment Income................................. -- -- -- -- --
From Net Realized Capital Gains............................ (2.665) (0.109) -- (0.120) (0.007)
------------ ---------- ---------- ---------- ------------
Total Distributions to Shareholders...................... (2.665) (0.109) -- (0.120) (0.007)
------------ ---------- ---------- ---------- ------------
Net Increase (Decrease) in Net Asset Value................... (3.63) 2.03 4.55 (0.91) 1.32
------------ ---------- ---------- ---------- ------------
Net Asset Value -- End of Period............................. $13.36 $16.99 $14.96 $10.41 $11.32
------------ ---------- ---------- ---------- ------------
------------ ---------- ---------- ---------- ------------
TOTAL INVESTMENT RETURN........................................ (5.54)%(A) 14.36% 43.71% (7.31)% 13.35%(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses..................................................... 1.50%(B) 1.50% 1.50% 1.50% 1.50%(B)
Net Investment Loss.......................................... (1.17)%(B) (0.98)% (0.61)% (0.85)% (0.63)%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate...................................... 45.53% 121.22% 96.11% 128.13% 67.90%
Net Assets at End of Period (000's omitted).................. $28,800 $44,985 $36,606 $18,133 $ 4,750
Number of Shares Outstanding at End of Period (000's
omitted)................................................... 2,156 2,647 2,447 1,742 420
Average Commission Rate Paid................................. $0.0375(C)
</TABLE>
-------------------------------------------------------------------
(A) Total Investment Return for periods of less than one year are not
annualized.
(B) Annualized.
(C) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for
security trades on which commissions are charged. This amount may
vary from period to period and fund to fund depending on the mix of
trades executed in various markets where trading practices and
commission rate structures may differ.
*FROM COMMENCEMENT OF OPERATIONS OCTOBER 6, 1992.
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
GOLD FUND
<S> <C> <C> <C> <C>
FOR THE SIX FOR THE YEAR ENDED JUNE FOR THE
MONTHS ENDED 30, PERIOD ENDED
DECEMBER 31, ----------------------- JUNE 30,
1996 1996 1995 1994*
------------ ---------- ---------- ------------
PER SHARE OPERATING PERFORMANCE:
Net Asset Value -- Beginning of Period.................................... $9.93 $9.89 $9.52 $10.00
------------ ---------- ---------- ------------
Income from Investment Operations:
Net Investment Loss..................................................... (0.043) (0.060) (0.047) (0.008)
Net Realized and Unrealized Gains (Losses) on Securities................ (1.307) 0.100 0.417 (0.472)
------------ ---------- ---------- ------------
Total from Investment Operations...................................... (1.350) 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................................ (1.35) 0.04 0.37 (0.48)
------------ ---------- ---------- ------------
Net Asset Value -- End of Period.......................................... $8.58 $9.93 $9.89 $9.52
------------ ---------- ---------- ------------
------------ ---------- ---------- ------------
TOTAL INVESTMENT RETURN..................................................... (13.60)%(A) 0.40% 3.89% (4.80)%(A)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................................. 1.70%(B) 1.70% 1.70% 1.68%(B)
Net Investment Loss....................................................... (0.82)%(B) (0.59)% (0.51)% (0.25)%(B)
SUPPLEMENTARY DATA:
Portfolio Turnover Rate................................................... 62.70% 59.06% 51.23% 22.85%
Net Assets at End of Period (000's omitted)............................... $4,425 $6,122 $6,796 $6,395
Number of Shares Outstanding at End of Period (000's omitted)............. 516 616 687 672
Average Commission Rate Paid.............................................. $0.0511(C)
</TABLE>
-------------------------------------------------------------------
(A) Total Investment Return for periods of less than one year are not
annualized.
(B) Annualized.
(C) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for
security trades on which commissions are charged. This amount may
vary from period to period and fund to fund depending on the mix of
trades executed in various markets where trading practices and
commission rate structures may differ.
*FROM COMMENCEMENT OF OPERATIONS MARCH 7, 1994.
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
DECEMBER 31, 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., (the "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 (the
"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.
3. Securities Transactions
For the period ended December 31, 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.............................................. $ 911,950 $ 5,809,268 $16,277,876 $3,038,620
------------- ------------- ------------- -----------
Sales.................................................. $ 3,687,987 $11,755,113 $28,390,678 $3,519,495
------------- ------------- ------------- -----------
</TABLE>
16
<PAGE>
DECEMBER 31, 1996 CAPPIELLO-RUSHMORE TRUST
- --------------------------------------------------------------------------------
4. Net Unrealized Appreciation/Depreciation of Investments
Unrealized appreciation (depreciation) as of December 31, 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.......................... $ 1,327,580 $ 7,515,608 $ 6,655,249 $ 178,013
Gross Unrealized Depreciation.......................... (71,155) (1,532,872) (4,934,498) (817,900)
------------- ------------- ------------- -----------
Net Unrealized Appreciation (Depreciation)............. $ 1,256,425 $ 5,982,736 $ 1,720,751 $(639,887)
------------- ------------- ------------- -----------
------------- ------------- ------------- -----------
Cost of Investments for Federal Income Tax Purposes.... $ 9,869,634 $19,174,965 $28,155,837 $5,157,714
------------- ------------- ------------- -----------
------------- ------------- ------------- -----------
</TABLE>
5. Net Assets
At December 31, 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........................................ $10,322,039 $16,894,381 $24,661,006 $4,749,026
Undistributed Net Investment Income (Loss)............. 599 (20,056) (218,338) (22,379)
Accumulated Net Realized Gain (Loss) on Investments.... (260,463) 1,445,657 2,094,262 92,739
Net Unrealized Appreciation (Depreciation) on
Investments.......................................... 1,287,450 5,982,736 2,262,739 (394,440)
------------- ------------- ------------- -----------
Net Assets............................................. $11,349,625 $24,302,718 $28,799,669 $4,424,946
------------- ------------- ------------- -----------
------------- ------------- ------------- -----------
</TABLE>
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>
17
<PAGE>
[LOGO]
CAPPIELLO-RUSHMORE
TRUST
Semi-Annual Report
-----------------------------------------------------------
December 31, 1996
