Cappiello-Rushmore Trust
4922 Fairmont Avenue
Bethesda, Maryland 20814
To the Board of Trustees of Cappiello-Rushmore Trust:
We are the auditors of the Cappiello-Rushmore Trust
(the Trust), a series investment company comprised of
four portfolios, Utility Income, Growth, Emerging
Growth and Gold portfolios (the Portfolios). Rushmore
Trust and Savings, FSB (Rushmore Trust), a related
entity, is custodian of all of the Trust's portfolios
and the Trust is therefore subject to the provisions
of Rule 17f-2 under the Investment Company Act of 1940.
Accordingly, we have, without prior notice to the Trust
or to Rushmore Trust, accounted for the Portfolios'
investment securities held by Rushmore Trust as of the
close of business on August 21, 1998. It is understood
that this report is solely for the use of management
and for the information of the Securities and Exchange
Commission and should not be used for any other purpose.
Rushmore Trust, in addition to acting as custodian for
the Portfolios, is custodian for other customers.
Agents of Rushmore Trust hold, or account for by book
entry, securities that are the responsibility of
Rushmore Trust through custodial or trust agreements.
Securities held by agents of Rushmore Trust, while
identified by such agents as being deposited by
Rushmore Trust, cannot be identified by such agents
as to the specific customers of Rushmore Trust whom
have securities included in such deposits.
Rushmore Trust confirmed to us that the portfolio
securities owned by the Trust on August 21, 1998 were
held for the account of Rushmore Trust by Mellon Bank,
N.A. (Mellon), as agent for Rushmore Trust. We
obtained confirmation from Mellon of the securities
held for the account of Rushmore Trust as of August
21, 1998. We reviewed Rushmore Trust's reconciliation
of Mellon's confirmation to Rushmore Trust's internal
records, identifying securities held by Mellon as a
part of Rushmore Trust's aggregate security position
with Mellon. We also reviewed Rushmore Trust's
records that show the owners of the securities held by
Mellon for the account of the Rushmore Trust at August
21, 1998. We determined that these securities,
identified by such records as the property of the
Trust's Portfolios, were in agreement with the
Trust's records of securities owned at August 21,
998. In addition, a broker confirmed to us the
purchases outstanding at August 21, 1998, which
were in agreement with the Portfolios' records. We
also agreed an analysis of portfolio transactions
recorded subsequent to June 30, 1998, the date of the
last audit of the financial statements, in the
investment accounts to supporting records and
verified a sample of portfolio security transactions
to supporting records and documentation.
Because the above procedures were not sufficient to
constitute an audit made in accordance with
generally accepted auditing standards, we do not
express an opinion on the investment accounts
referred to above as of the dates indicated. In
connection with the procedures referred to above,
no matters came to our attention that caused us to
believe that the specified accounts should be
adjusted. Had we performed additional procedures or
had we made an audit of the financial statements of
the Trust in accordance with generally accepted
auditing standards, matters might have come to our
attention that would have been reported to you.
This report relates only to the investments
specified above and does not extend to the
financial statements of the Trust, taken as a whole
for any date or period.
Deloitte & Touche LLP
Princeton, New Jersey
October 2, 1998
