FORM 24F-2
ANNUAL NOTICE OF SECURITIES SOLD
PURSUANT TO RULE 24F-2
1. Name and address of issuer: THE PREFERRED GROUP OF MUTUAL FUNDS
FIRST FINANCIAL PLAZA
411 HAMILTON BOULEVARD, SUITE 1200
PEORIA, ILLINOIS 61602
2. Name of each series or class of funds for which this notice is filed:
PREFERRED VALUE FUND
PREFERRED GROWTH FUND
PREFERRED INTERNATIONAL FUND
PREFERRED FIXED INCOME FUND
PREFERRED ASSET ALLOCATION FUND
PREFERRED SHORT-TERM GOVERNMENT SECURITIES FUND
PREFERRED MONEY MARKET FUND
PREFERRED BALANCED FUND
PREFERRED SMALL CAP FUND
3. Investment Company Act File Number: 811-06602
Securities Act File Number: 33-46479
4. Last day of fiscal year for which this notice is filed: JUNE 30, 1997
5. Check box if this notice is being filed more than 180 days after the
close of the issuer's fiscal year for purposes of reporting securities
sold after the close of the fiscal year but before termination of the
issuer's 24f-2 declaration:
[ ]
6. Date of termination of issuer's declaration under rule 24f-2(a)(1),
if applicable (see Instruction A.6):
7. Number and amount of securities of the same class or series which had
been registered under the Securities Act of 1933 other than pursuant to
rule 24f-2 in a prior fiscal year, but which remained unsold at the
beginning of the fiscal year:
PREFERRED SHORT-TERM GOVT SECURITIES FUND 69,106.69 SHARES $ 678,628
PREFERRED MONEY MARKET FUND 5,683,139 SHARES $ 5,683,139
PREFERRED BALANCED FUND 576.23 SHARES $ 6,016
8. Number and amount of securities registered during the fiscal year
other than pursuant to rule 24f-2:
NONE
9. Number and aggregate sale price of securities sold during the
fiscal year:
228,458,173 SHARES $709,485,302
10. Number and aggregate sale price of securities sold during the fiscal
year in reliance upon registration pursuant to rule 24f-2:
222,705,351 SHARES $703,120,328
11. Number and aggregate sale price of securities issued during the fiscal
year in connection with dividend reinvestment plans, if applicable
(see Instruction B.7):
11,372,638 SHARES $102,332,341
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12. Calculation of registration fee:
(i) Aggregate sale price of securities sold during
the fiscal year in reliance on rule 24f-2
(from Item 10): $703,120,328
(ii) Aggregate price of shares issued in connec-
tion with dividend reinvestment plans (from
Item 11, if applicable): +102,332,341
------------
(iii) Aggregate price of shares redeemed or
repurchased during the fiscal year (if
applicable): -(592,208,805)
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(iv) Aggregate price of shares redeemed or
repurchased and previously applied as a
reduction to filing fees pursuant to
rule 24f-2 (if applicable): -0-
-------------
(v) Net aggregate price of securities sold
and issued during the fiscal year in
reliance on rule 24f-2 [line (i), plus
line (ii), less line (iii), plus
line (iv)] (if applicable): 213,243,864
-------------
(vi) Multiplier prescribed by Section 6(b)
of the Securities Act of 1933 or other
applicable law or regulation
(see Instruction C.6): x 1/33rd of .01
(vii) Fee due [line (i) or line (v) multiplied
by line (vi)]: 64,619.35
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INSTRUCTION: ISSUERS SHOULD COMPLETE LINES (II), (III), (IV), AND (V) ONLY
IF THE FORM IS BEING FILED WITHIN 60 DAYS AFTER THE CLOSE OF
THE ISSUER'S FISCAL YEAR. See Instruction C.3.
13. Check box if fees are being remitted to the Commission's lockbox
depository as described in section 3a of the Commission's Rules of
Informal and Other Procedures (17 CRF 202.3a).
[ X ]
Date of mailing or wire transfer of filing fees to the Commission's lockbox
depository: August 25, 1997
SIGNATURES
This report has been signed below by the following persons on behalf
of the issuer and in the capacities and on the dates indicated.
By (Signature and Title)* ---------------------------------------------
FRED L. KAUFMAN, VICE PRESIDENT AND TREASURER
Date AUGUST 26, 1997
*Please print the name and title of the signing officer below
the signature.
ROPES & GRAY
One International Place
Boston, Massachusetts 02110-2624
(617) 951-7000
FAX: (617) 951-7050
Writer's Direct Dial Number: (617) 951-7801
August 21, 1997
The Preferred Group of Mutual Funds
100 N.E. Adams Street
Peoria, Illinois 61629
Gentlemen:
You have informed us that you intend to file a Rule 24f-2 notice (the
"Notice") with the Securities and Exchange Commission (the "Commission")
pursuant to Rule 24f-2 (the "Rule") under the Investment Company Act of 1940, as
amended, making definite the registration of 222,705,351 shares of beneficial
interest (the "Shares") of your Preferred Growth Fund, Preferred Value Fund,
Preferred International Fund, Preferred Small Cap Fund, Preferred Asset
Allocation Fund, Preferred Balanced Fund, Preferred Fixed Income Fund, Preferred
Short-Term Government Securities Fund and Preferred Money Market Fund (each, a
"Fund") sold in reliance upon the Rule during your fiscal year ended June 30,
1996. We understand that the Shares do not include shares issued pursuant to
reinvestment of dividends but that the fee accompanying the Notice takes into
account those shares as well as shares redeemed during said fiscal year.
We have examined your Agreement and Declaration of Trust, as amended,
as on file at the office of the Secretary of State of The Commonwealth of
Massachusetts. We are familiar with the actions taken by your Trustees to
authorize the issue and sale from time to time of your shares of beneficial
interest at not less than net asset value and have assumed that the Shares have
been issued and sold in accordance with such action. We have also examined a
copy of your Bylaws and such other documents as we have deemed necessary for the
purposes of this opinion.
Based on the foregoing, we are of the opinion that the Shares have been
duly authorized and validly issued and are fully paid and nonassessable.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and requires that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed by
the Trust or its Trustees. The Agreement and Declaration of Trust provides for
indemnification out of the property of the relevant Fund for all loss and
expense of any shareholder held personally liable for the obligations of the
Trust solely by reason of his being or having been a shareholder of that Fund.
Thus, the risk of a shareholder incurring financial
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loss on account of shareholder liability is limited to circumstances in which
the Fund itself would be unable to meet its obligations.
We consent to this opinion accompanying the Notice.
Very truly yours,
ROPES & GRAY
Ropes & Gray
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