As filed with the Securities and Exchange Commission on April 29, 1997.
File No. 811-6648
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 6
TO
FORM N-1A
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
BOND PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
P.O. Box 7177, 6000 Memorial Drive
Dublin, Ohio 43017
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 614-766-7000
Donald F. Meeder, P.O. Box 7177, 6000 Memorial Drive, Dublin, OH 43017
(Name and Address of Agent for Service)
Copy to:
James B. Craver
P. O. Box 811
Dover, MA 02030-0811
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EXPLANATORY NOTE
This Amendment to the Registration Statement of Bond Portfolio has been
filed by the Registrant pursuant to Section 8(b) of the Investment Company Act
of 1940, as amended (the "1940 Act"). However, beneficial interests in the
Registrant are not being registered under the Securities Act of 1933, as amended
(the "1933 Act"), since such interests will be offered solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Registrant may only
be made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or entities which are
"accredited investors" as defined in Regulation D under the 1933 Act. This
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any beneficial interests in the Registrant.
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PART A
Responses to Items 1 through 3 have been omitted pursuant to paragraph 4 of
Instruction F of the General Instructions to Form N-1A.
ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.
Bond Portfolio (the "Portfolio") is a diversified, open-end management
investment company which was organized as a trust under the laws of the State of
New York on November 1, 1991.
Beneficial interests in the Portfolio are offered solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act"). Investments in the Portfolio may only be made by investment companies,
insurance company separate accounts, common or commingled trust funds or similar
organizations or entities which are "accredited investors" as defined in
Regulation D under the 1933 Act. This Registration Statement does not constitute
an offer to sell, or the solicitation of an offer to buy, any "security" within
the meaning of the 1933 Act.
The Portfolio's investment adviser is R. Meeder & Associates, Inc. (the
"Adviser"). The investment objective of the Bond Portfolio is to maximize,
consistent with its permitted universe of investments, current income through
investment in securities which are issued, or guaranteed as to payment of
principal and interest, by the U.S. government or any of its agencies or
instrumentalities. Under normal circumstances, at least 65% of the value of the
Portfolio's total assets will be invested in U.S. government debt securities.
The Portfolio may invest temporarily in money market instruments as often as
necessary to meet changing conditions in the fixed income market. Although
realizing capital gains will not be an objective, some gains or losses may be
realized from the sale of fixed income securities when the Portfolio's assets
are changed to a defensive position.
The U.S. government securities in which the Portfolio invests are either
issued or guaranteed by the U.S. government, its agencies, or instrumentalities.
These securities are limited to: (1) direct obligations of the U.S. Treasury,
such as U.S. Treasury bills, notes, and bonds; (2) notes, bonds, and discount
notes of U.S. government agencies or instrumentalities, such as the: Farm Credit
System, including the National Bank for Cooperatives, Farm Credit Banks, and
Banks for Cooperatives; Farmers Home Administration; Federal Home Loan Banks;
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Federal Home Loan Mortgage Corporation; Federal National Mortgage Association;
Government National Mortgage Association; and Student Loan Marketing
Association; and (3) repurchase agreements relating to any of the foregoing U.S.
government securities.
Some obligations issued or guaranteed by agencies or instrumentalities of
the U.S. government, such as Government National Mortgage Association
participation certificates, are backed by the full faith and credit of the U.S.
Treasury. No assurance can be given that the U.S. government will provide
financial support to other agencies or instrumentalities, since it is not
obligated to do so. These agencies and instrumentalities are supported by: (1)
the issuer's right to borrow an amount limited to a specific line of credit from
the U.S. Treasury; (2) discretionary authority of the U.S. government to
purchase certain obligations of an agency or instrumentality; or (3) the credit
of the agency or instrumentality.
The prices of U.S. government securities fluctuate inversely to the
direction of interest rates.
Repurchase agreements are arrangements in which banks, broker/dealers, and
other recognized financial institutions sell U.S. government securities to the
Portfolio and agree at the time of sale to repurchase them at a mutually agreed
upon time and price. To the extent that the original seller does not repurchase
the securities from the Portfolio, it could receive less than the repurchase
price on any sale of such securities.
The Portfolio will invest in U.S. government securities of varying
maturities. Normally the average portfolio maturity will be approximately ten
years as long as the Investment Adviser believes interest rates are stable or
declining. The Portfolio's assets will be invested in money market instruments
when the Investment Adviser believes an unstable or rising interest rate trend
is occurring. If the Investment Adviser believes that long-term interest rates
offer an abnormally high current return versus inflation, the Bond Portfolio may
be invested in U.S. government securities with maturities as long as 30 years.
Information concerning the selection of money market instruments and bonds
is set forth in Part B of this Registration Statement.
HEDGING STRATEGIES
Derivatives are financial instruments whose performance is derived, at
least in part, from the performance of an underlying asset, security or index.
Financial futures contracts or related options used by a Portfolio to implement
its hedging strategies are considered derivatives. The value of derivatives can
be affected significantly by even small market movements, sometimes in
unpredictable ways. They do not necessarily increase risk, and may in fact
reduce risk.
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The Portfolio may engage in hedging transactions in carrying out its
investment policies. A hedging program may be implemented for the following
reasons: (1) To protect the value of specific securities owned or intended to be
purchased while the Adviser is implementing a change in the Portfolio's
investment position; (2) To protect portfolio values during periods of
extraordinary risk without incurring transaction costs associated with buying or
selling actual securities; and (3) To utilize the "designated hedge" provisions
of Subchapter M of the Internal Revenue Code as a permitted means of avoiding
taxes that would otherwise have to be paid on gains from the sale of portfolio
securities.
A hedging program involves entering into an "option" or "futures"
transaction in lieu of the actual purchase or sale of securities. At present,
government securities such as Treasury bonds and notes are among debt securities
currently covered by futures contracts.
The Portfolio will not engage in transactions in financial futures
contracts or related options for speculation but only as a hedge against changes
in the market value of securities held or intended for purchase, and where the
transactions are economically appropriate to the reduction of risks inherent in
the ongoing management of the Portfolio.
For certain regulatory purposes, the Commodity Futures Trading Commission
("CFTC") limits the types of futures positions that can be taken in conjunction
with the management of a securities portfolio for management investment
companies, such as the Bond Portfolio. All futures transactions for the
Portfolio will consequently be subject to the restrictions on the use of futures
contracts established in CFTC rules, such as observation of the CFTC's
definition of "hedging". In addition, whenever the Portfolio establishes a long
futures position, it will set aside cash or cash equivalents equal to the
underlying commodity value of the long futures contracts held by the Portfolio.
Although all futures contracts involve leverage by virtue of the margin system
applicable to trading on futures exchanges, the Portfolio will not, on a net
basis, have leverage exposure on any long futures contracts that it establishes
because of the cash set aside requirement. All futures transactions can produce
a gain or a loss when they are closed, regardless of the purpose for which they
have been established. Unlike short futures contracts positions established to
protect against the risk of a decline in value of existing securities holdings,
the long futures positions established by the Portfolio to protect against
reinvestment risk are intended to protect the Portfolio against the risks of
reinvesting portfolio assets that arise during periods when the assets are not
fully invested in securities.
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The Portfolio may not purchase or sell futures or purchase related options
if immediately thereafter the sum of the amount of margin deposits on the
Portfolio's existing futures positions and premiums paid for related options
would exceed 5% of the market value of the Portfolio's total assets.
The Portfolio expects that any gain or loss on hedging transactions will be
substantially offset by any gain or loss on the securities underlying the
contracts or being considered for purchase.
ITEM 5. MANAGEMENT OF THE PORTFOLIO.
The Portfolio's Board of Trustees provides broad supervision over the
affairs of the Portfolio. The address of the Adviser is P.O. Box 7177, 6000
Memorial Drive, Dublin, Ohio 43017. A majority of the Portfolio's Trustees are
not affiliated with the Adviser. Star Bank, N.A., Cincinnati ("Star Bank") is
the Portfolio's custodian and Mutual Funds Service Co. ("MFSCo") is the
Portfolio's transfer agent and dividend paying agent. The address of the
custodian is Star Bank Center, 425 Walnut Street, Cincinnati, Ohio 45202 and the
address of MFSCo is 6000 Memorial Drive, Dublin, Ohio 43017.
The Portfolio has not retained the services of a principal underwriter or
distributor, as interests in the Portfolio are offered solely in private
placement transactions.
The Adviser has been an adviser to individuals and retirement plans since
1974 and has served as investment adviser to registered investment companies
since 1982. The Adviser serves the Portfolio pursuant to an Investment Advisory
Agreement under the terms of which it has agreed to provide an investment
program within the limitations of the Portfolio's investment policies and
restrictions, and to furnish all executive, administrative, and clerical
services required for the transaction of Portfolio business, other than
accounting services and services which are provided by the Portfolio's
custodian, transfer agent, independent accountants and legal counsel.
The Adviser was incorporated in Ohio in 1974 and maintains its principal
offices at 6000 Memorial Drive, Dublin, Ohio 43017. The Adviser is a
wholly-owned subsidiary of Muirfield Investors, Inc. ("MII"). MII is controlled
by Robert S. Meeder, Sr. through the ownership of voting common stock. MII
conducts business only through its subsidiaries which are the Adviser; MFSCo;
Adviser Dealer Services, Inc., a registered broker-dealer; Opportunities
Management Co., a venture capital investor; Meeder Advisory Services, Inc., a
registered investment adviser; and OMCO, Inc., a registered commodity trading
adviser and commodity pool operator.
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The Adviser's officers and directors, their principal offices, are as
follows: Robert S. Meeder, Sr., Chairman and Sole Director; Robert S. Meeder,
Jr., President and Treasurer; Philip A. Voelker, Senior Vice President and Chief
Operating Officer; Donald F. Meeder, Vice President and Secretary; Sherrie L.
Acock, Vice President; Robert D. Baker, Vice President; Wesley F. Hoag, Vice
President and General Counsel; Steven T. McCabe, Vice President; and Roy E.
Rogers, Vice President.
Joseph A. Zarr is the portfolio manager primarily responsible for the
day-to-day management of the Bond Portfolio. Mr. Zarr was the portfolio manager
of the Short-Term Global Portfolio from May of 1992 until May of 1996. Mr. Zarr
is also a portfolio manager for the Adviser. He has been associated with the
Adviser since 1991. Mr. Zarr has been a licensed stockbroker since 1978.
The Adviser earns an annual fee, payable in monthly installments, at the
rate of 0.40% of the first $100 million and 0.20% in excess of $100 million of
the Portfolio's average net assets.
Accounting, transfer agency and dividend disbursing services are provided
to the Portfolio by MFSCo, a wholly-owned subsidiary of MII. The minimum annual
fee for all such services for the Portfolio is $7,500. Subject to the minimum
fee, the Portfolio's annual fee, payable monthly, is computed at the rate of
0.15% of the first $10 million, 0.10% of the next $20 million, 0.02% of the next
$50 million and 0.01% in excess of $80 million of the Portfolio's average net
assets. For the year ended December 31, 1996, total payments from the Portfolio
to MFSCo. amounted to $22,555.
TRANSFER AGENT AND CUSTODIAN
The Portfolio has entered into an Administration and Accounting Services
Agreement with MFSCo pursuant to which MFSCo acts as transfer agent for the
Portfolio, maintains an account for each investor in the Portfolio, performs
other transfer agency functions, and acts as dividend disbursing agent for the
Portfolio. Pursuant to a Custody Agreement, Star Bank acts as the custodian of
the Portfolio's assets. See Part B for more detailed information concerning
custodial arrangements.
EXPENSES
The expenses of the Portfolio include the compensation of its Trustees who
are not affiliated with the Adviser; governmental fees; interest charges; taxes;
fees and expenses of independent auditors, of legal counsel and of any transfer
agent, custodian, registrar or dividend disbursing agent of the Portfolio;
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insurance premiums; expenses of calculating the net asset value of, and the net
income on, the Portfolio; all fees under its Administration and Accounting
Services and Subadministrative Services Agreements; the expenses connected with
the execution, recording and settlement of security transactions; fees and
expenses of the Portfolio's custodian for all services to the Portfolio,
including safekeeping of funds and securities and maintaining required books and
accounts; expenses of preparing and mailing reports to investors and to
governmental officers and commissions; expenses of meetings of investors and
Trustees; and the advisory fees payable to the Adviser under the Investment
Advisory Agreement.
ITEM 6. CAPITAL STOCK AND OTHER SECURITIES.
The Portfolio is organized as a trust under the laws of the State of New
York. Under the Declaration of Trust, the Trustees are authorized to issue
beneficial interests in the Portfolio. Each investor is entitled to a vote in
proportion to the amount of its investment in the Portfolio. Investments in the
Portfolio may not be transferred, but an investor may withdraw all or any
portion of its investment at any time at net asset value. Investors in the
Portfolio (e.g., investment companies, insurance company separate accounts and
common and commingled trust funds) will each be liable for all obligations of
the Portfolio. However, the risk of an investor in the Portfolio incurring
financial loss on account of such liability is limited to circumstances in which
both inadequate insurance existed and the Portfolio itself was unable to meet
its obligations.
The net income of the Portfolio is determined each day on which the New
York Stock Exchange is open for trading (and on such other days as are deemed
necessary in order to comply with Rule 22c-1 under the 1940 Act) ("Fund Business
Day"). This determination is made once during each such day. All the net income
of the Portfolio, as defined below, so determined is allocated pro rata among
the investors in the Portfolio at the time of such determination.
For this purpose the net income of the Portfolio (from the time of the
immediately preceding determination thereof) shall consist of (i) all income
accrued, less the amortization of any premium, on the assets of the Portfolio,
less (ii) all actual and accrued expenses of the Portfolio determined in
accordance with generally accepted accounting principles. Interest income
includes discount earned (including both original issue and market discount) on
discount paper accrued ratably to the date of maturity and any net realized
gains or losses on the assets of the Portfolio.
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Investments in the Portfolio have no preemptive or conversion rights and
are fully paid and nonassessable, except as set forth below. The Portfolio is
not required to hold annual meetings of investors but the Portfolio will hold
special meetings of investors when in the judgment of the Trustees it is
necessary or desirable to submit matters for an investor vote. Investors have
the right to communicate with other investors to the extent provided in Section
16(c) of the 1940 Act in connection with requesting a meeting of investors for
the purpose of removing one or more Trustees, which removal requires a
two-thirds vote of the Portfolio's beneficial interests. Investors also have
under certain circumstances the right to remove one or more Trustees without a
meeting. Upon liquidation or dissolution of the Portfolio, investors would be
entitled to share pro rata in the net assets of the Portfolio available for
distribution to investors.
Under the anticipated method of operation of the Portfolio, the Portfolio
will not be subject to any income tax. However, each investor in the Portfolio
will be taxable on its share (as determined in accordance with the governing
instruments of the Portfolio) of the Portfolio's taxable income, gain, loss,
deductions and credits in determining its income tax liability. The
determination of such share will be made in accordance with the Internal Revenue
Code of 1986, as amended, and regulations promulgated thereunder.
The Portfolio's assets, income and distributions are managed in such a way
that an investor in the Portfolio will be able to satisfy the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended, assuming that the
investor invested all of its investable assets in the Portfolio.
Investor inquiries may be directed to the Portfolio at 6000 Memorial Drive,
Dublin, Ohio 43017.
ITEM 7. PURCHASE OF SECURITIES.
Beneficial interests in the Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolio may only
be made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or entities which are
"accredited investors" as defined in Regulation D under the 1933 Act. This
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" within the meaning of the 1933 Act.
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An investment in the Portfolio may be made without a sales load at the net
asset value next determined after an order is received in "good order" by the
Portfolio. Securities owned by the Portfolio and listed or traded on any
national securities exchange are valued each Fund Business Day at 3:00 p.m. If
there has been no sale on that day, or if the security is not listed, it is
valued at its last bid quotation on the exchange or, in the case of unlisted
securities, as obtained from an established market maker. Futures contracts are
valued on the basis of the cost of closing out the liability; i.e., at the
settlement price of a closing contract or at the asked quotation for such a
contract if there has been no sale. Money market instruments having maturities
of 60 days or less are valued at amortized cost if not materially different from
market value. Portfolio securities for which market quotations are not readily
available are to be valued by the Adviser in good faith at its own expense under
the direction of the Trustees.
There is no minimum initial or subsequent investment in the Portfolio.
However, since the Portfolio intends to be as fully invested at all times as is
reasonably practicable in order to enhance the yield on its assets, investments
must be made in federal funds (i.e., monies credited to the account of the
Portfolio's custodian bank by a Federal Reserve Bank).
The Portfolio reserves the right to cease accepting investments at any time
or to reject any investment order.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each Fund Business Day. As of 4:00 p.m., New York time, on each
such day, the value of each investor's beneficial interest in the Portfolio will
be determined by multiplying the net asset value of the Portfolio by the
percentage, effective for that day, which represents that investor's share of
the aggregate beneficial interests in the Portfolio. Any additions or
reductions, which are to be effected as of 4:00 p.m., New York time, on such
day, will then be effected. The investor's percentage of the aggregate
beneficial interests in the Portfolio will then be recomputed as the percentage
equal to the fraction (i) the numerator of which is the value of such investor's
investment in the Portfolio as of 4:00 p.m., New York time, on such day plus or
minus, as the case may be, the amount of net additions to or reductions in the
investor's investment in the Portfolio effected as of 4:00 p.m., New York time,
on such day, and (ii) the denominator of which is the aggregate net asset value
of the Portfolio as of 4:00 p.m., New York time, on such day, plus or minus, as
the case may be, the amount of net additions to or reductions in the aggregate
investments in the Portfolio by all investors in the Portfolio. The percentage
so determined will then be applied to determine the value of the investor's
interest in the Portfolio as of 4:00 p.m., New York time, on the following Fund
Business Day.
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ITEM 8. REDEMPTION OR REPURCHASE.
An investor in the Portfolio may reduce any portion or all of its
investment at any time at the net asset value next determined after a request in
"good order" is furnished by the investor to the Portfolio. The proceeds of a
reduction will be paid by the Portfolio in federal funds normally on the next
business day after the reduction is effected, but in any event within seven
days. Investments in the Portfolio may not be transferred.
The right of any investor to receive payment with respect to any reduction
may be suspended or the payment of the proceeds therefrom postponed during any
period in which the New York Stock Exchange is closed (other than weekends or
holidays) or trading on such Exchange is restricted, or, to the extent otherwise
permitted by the 1940 Act, if an emergency exists.
ITEM 9. PENDING LEGAL PROCEEDINGS.
Not applicable.
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PART B
ITEM 10. COVER PAGE.
Not applicable.
ITEM 11. TABLE OF CONTENTS.
Page
General Information and History . . . . . . . . . . . . B-1
Investment Objective and Policies . . . . . . . . . . . B-1
Management of the Portfolio . . . . . . . . . . . . . . B-6
Control Persons and Principal Holders of Securities . . B-10
Investment Advisory and Other Services . . . . . . . . B-10
Brokerage Allocation and Other Practices . . . . . . . B-12
Capital Stock and Other Securities . . . . . . . . . . B-13
Purchase, Redemption and Pricing of Securities . . . . B-14
Tax Status . . . . . . . . . . . . . . . . . . . . . . B-15
Underwriters . . . . . . . . . . . . . . . . . . . . . B-16
Calculation of Performance Data . . . . . . . . . . . . B-16
Financial Statements . . . . . . . . . . . . . . . . . B-16
ITEM 12. GENERAL INFORMATION AND HISTORY.
Not applicable.
ITEM 13. INVESTMENT OBJECTIVE AND POLICIES.
Part A contains additional information about the investment objective and
policies of the Bond Portfolio (the "Portfolio"). This Part B should only be
read in conjunction with Part A.
The investment policies set forth below represent the Portfolio's policies
as of the date of this Registration Statement. The investment policies are not
fundamental and may be changed by the Trustees of the Portfolio without investor
approval. No such change would be made, however, without 30 days' written notice
to investors.
R. Meeder & Associates, Inc., the investment adviser of the Portfolio (the
"Adviser"), places a high degree of importance on protecting portfolio values
from severe market declines. Consequently, the Portfolio's assets may at times
be invested for defensive purposes in money market instruments.
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Because the Adviser intends to employ flexible defensive investment
strategies when market trends are not considered favorable, the Adviser may
occasionally change the entire Portfolio.
This defensive investment strategy can produce high portfolio turnover
ratios when calculated in accordance with SEC rules. The portfolio turnover rate
for the Portfolio was 779% for the year ended December 31, 1996 (232% in 1995:
708% in 1994).
The Portfolio began the year in a fully invested posture with 100% of its
investments being in ten-year U.S. Treasuries. By-mid February the Portfolio
reduced its exposure to 50%, and to a fully defensive position by the start of
March, due to concerns that the Federal Reserve would not be reducing interest
rates in the coming months. An increase in yields ensured while the Portfolio
remained defensive in short-term U.S. obligations until late June. During June
and July, exposure fluctuated between 0% and 20% as we perceived the risk reward
relationship to be either positive or negative.
During the April-June time frame the market had turned its attention to a
potential Fed rate increase. As economic data came forth during the summer,
however, the market stabilized and started a slow rally. By the first week of
October, the Portfolio was once again fully invested and remained so until the
end of the year at which point the rally had exhausted itself and a 50%
defensive position was reinstated on increasing evidence that economic growth
was greater than anticipated.
The Adviser is presently unable to predict the portfolio turnover rate for
the current year, as any major change in investment posture to a defensive
position, or vice versa, will result in a portfolio turnover of 100% or more. It
is conceivable that the turnover rate of the Portfolio will exceed 700% in the
current year.
The Portfolio intends to comply with the short-term trading restrictions of
Subchapter M of the Internal Reverse Code of 1986, as amended, although these
restrictions could inhibit a rapid change in the Portfolio's investment. The
Portfolio will strive for a positive investment return each calendar year.
Except as otherwise expressly provided herein, the Portfolio will limit its
purchases, denominated in U.S. dollars, to the following securities:
o U.S. Government Securities and Securities of its Agencies and
Instrumentalities obligations issued or guaranteed as to principal or
interest by the United States or its agencies (such as the Export
Import Bank of the United States, Federal Housing Administration, and
Government National Mortgage Association) or its instrumentalities
(such as the Federal Home Loan Bank, Federal Intermediate Credit Banks
and Federal Land Bank), including Treasury bills, notes and bonds.
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o Repurchase Agreements - The Portfolio may invest in repurchase
obligations relating to U.S. Government Securities. The Portfolio may
invest without limit in repurchase agreements with any Federal Reserve
reporting dealer or member bank of the Federal Reserve System. A
repurchase agreement is an instrument under which the purchaser (i.e.,
the Portfolio) acquires ownership of a debt security and the seller
agrees, at the time of the sale, to purchase the obligation at a
mutually agreed upon time and price, thereby determining the yield
during the purchaser's holding period. This results in a fixed rate of
return insulated from market fluctuations during such period. The
underlying securities could be any of those described above, some of
which might bear maturities exceeding one year. The Portfolio's risk
is that the seller may fail to repurchase the security on the delivery
date. If the seller defaults, the underlying security constitutes
collateral for the seller's obligation to pay. It is a policy of the
Portfolio to make settlement on repurchase agreements only upon proper
delivery of the underlying collateral. Repurchase agreements usually
are for short periods, such as one week or less, but could be longer.
The Portfolio may enter into repurchase agreements with its custodian
(Star Bank, N.A., Cincinnati) when it is advantageous to do so. The
Portfolio will invest more than 10% of its assets, at time of
purchase, in repurchase agreements which mature in excess of seven
days.
When investing in money market instruments, the Portfolio will limit its
purchases, denominated in U.S. dollars, to securities which are issued, or
guaranteed as to payment of principal and interest, by the U.S. government or
any of its agencies or instrumentalities, and any relating repurchase agreements
thereto.
The Manager exercises due care in the selection of money market instruments
and bonds. However, there is a risk that the issuers of the securities may not
be able to meet their obligations to pay interest or principal when due. There
is also a risk that some of the Portfolio's securities might have to be
liquidated prior to maturity at a price less than original amortized cost or
value, face amount or maturity value to meet larger than expected redemptions.
Any of these risks, if encountered, could cause a reduction in net income or in
the net asset value of the Portfolio.
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HEDGING STRATEGIES
The Adviser may conduct a hedging program on behalf of the Portfolio for
any of the reasons described in Part A. Such a program would involve entering
into options or futures transactions.
The objective of an option or futures transaction could be to protect a
profit or offset a loss in the Portfolio from future price erosion. Or, the
objective could be to acquire the right to purchase a fixed amount of securities
at a future date for a definite price. In either case, it would not be necessary
for the Portfolio to actually buy or sell the securities currently. Instead, the
option or futures contract would give the Portfolio the right at a future date
to sell, or in other instances buy, the particular securities under
consideration or similar securities. The quantity of the securities covered by
the futures contract would be the same, or approximately the same, as the
quantity held in the Portfolio or the quantity under consideration for purchase.
In lieu of the sale of a security, an option transaction could involve the
purchase of a put option contract, which would give the Portfolio the right to
sell a security or futures contract on an index (see below) at a specified price
until the expiration date of the option. A Portfolio will only purchase a put
option contract when the quantity of the underlying security involved in the
option transaction is equal to that owned by the Portfolio. Limitations on the
use of put option contracts on an index are described below.
Also, in lieu of the sale of securities, a futures transaction could
involve the sale of a futures contract which would require a Portfolio either
(a) to deliver to the other party to the contract the securities specified and
receive payment at the price contracted for, prior to the expiration date of the
contract, or (b) to make or entitle it to receive payments representing
(respectively) the loss or gain on the security or securities involved in the
futures contract.
In lieu of the purchase of a security, an option transaction could involve
the purchase of a call option which would give the Portfolio the right to buy a
specified security or index aggregate at a specified price until the expiration
date of the option contract. Sufficient cash or money market instruments will be
segregated and maintained in reserve to complete the purchase.
In lieu of the purchase of securities, a futures transaction could involve
the purchase of a futures contract which would either (a) require the Portfolio
to receive and pay for the securities specified in the futures contract at the
price contracted for prior to the expiration date of the contract or (b) require
the Portfolio to make payment or receive payment representing respectively the
loss or gain on the security or securities involved in the contract.
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INVESTMENT RESTRICTIONS
The investment restrictions below have been adopted by the Portfolio as
fundamental policies. Under the Investment Company Act of 1940 (the "1940 Act"),
a "fundamental" policy may not be changed without the vote of a majority of the
outstanding voting securities of the Portfolio, which is defined in the 1940 Act
with respect to the Portfolio as the lesser of (a) 67 percent or more of the
Portfolio's beneficial interests represented at a meeting of investors if the
holders of more than 50 percent of the outstanding beneficial interests are
present or represented by proxy, or (b) more than 50 percent of the outstanding
beneficial interests ("Majority Vote"). The percentage limitations contained in
the restrictions listed below apply at the time of the purchase of the
securities.
The Portfolio may not: (a) Issue senior securities; (b) Borrow money except
as a temporary measure, and then only in an amount not to exceed 5% of the value
of its net assets (whichever is less) taken at the time the loan is made, or
pledge its assets taken at value to any extent greater than 15% of its gross
assets taken at cost; (c) Act as underwriter of securities of other issuers; (d)
Invest in real estate except for office purposes; (e) Purchase or sell
commodities or commodity contracts, except that it may purchase or sell
financial futures contracts involving U.S. Treasury securities, corporate
securities, or financial indexes; (f) Lend its funds or other assets to any
other person; however, the purchase of a portion of publicly distributed bonds,
debentures or other debt instruments, the purchase of certificates of deposit,
U.S. Treasury debt securities, and the making of repurchase agreements are
permitted, provided repurchase agreements with fixed maturities in excess of
seven days do not exceed 10% of its total assets; (g) Purchase more than 10% of
any class of securities, including voting securities of any issuer, except that
the purchase of U.S. Treasury debt instruments shall not be subject to this
limitation; (h) Invest more than 5% of its total assets (taken at value) in the
securities of any one issuer, other than obligations of the U.S. Treasury; (i)
Purchase securities on margin, or participate in any joint or joint and several
trading account; (j) Make any so-called "short" sales of securities, except
against an identical portfolio position (i.e., a "short sale against the box");
(k) Invest more than 25% of its total assets at time of purchase (taken at
value) in the securities of companies in any one industry; (l) Purchase the
securities of another investment company except where such purchase is part of a
plan of merger or consolidation; (m) Purchase or retain any securities of an
issuer, any of whose officers, directors or security holders is an officer or
director of the Portfolio, if such officer or director owns beneficially more
than 1/2 of 1% of the issuer's securities or together they own beneficially more
B-5
<PAGE>
than 5% of such securities; (n) Invest in securities of companies which have a
record of less than three years' continuous operation, if at the time of such
purchase, more than 5% of its assets (taken at value) would be so invested; (o)
Purchase participations or other direct interests in oil, gas or other mineral
exploration or development programs; (p) Invest in warrants; and (q) Invest more
than 10% of its net assets in restricted securities and securities for which
market quotations are not readily available and repurchase agreements which
mature in excess of seven days; however, this shall not prohibit the purchase of
money market instruments or other securities which are not precluded by other
particular restrictions.
In order to comply with certain state investment restrictions, the
Portfolio's operating policy is not to: (a) Notwithstanding (b) above, pledge
assets having a value in excess of 10% of its gross assets; (b) Invest in oil,
gas or mineral leases or programs; and (c) Purchase real estate limited
partnerships.
ITEM 14. MANAGEMENT OF THE PORTFOLIO.
The Trustees and officers of the Portfolio and their principal occupations
during the past five years are set forth below. Their titles may have varied
during that period. Asterisks indicate those Trustees who are "interested
persons" (as defined in the 1940 Act) of the Portfolio. Unless otherwise
indicated, the address of each Trustee and officer is P.O. Box 7177, 6000
Memorial Drive, Dublin, Ohio 43017.
TRUSTEES AND OFFICERS
<TABLE>
<CAPTION>
Name, Address and Age Position Held Principal Occupation
- --------------------- ------------- --------------------
<S> <C> <C>
ROBERT S. MEEDER, SR.*+, 68 Trustee/President Chairman, R. Meeder & Associates,
Inc., an investment adviser.
MILTON S. BARTHOLOMEW, 68 Trustee Retired; formerly a practicing
1424 Clubview Boulevard, S. attorney in Columbus, Ohio;
Worthington, OH 43235 member of the Portfolio's Audit
Committee.
ROGER D. BLACKWELL, 56 Trustee Professor of Marketing and
Blackwell Associates, Inc. Consumer Behavior, The Ohio State
3380 Tremont Road University; President of
Columbus, OH 43221 Blackwell Associates, Inc., a
strategic consulting firm.
B-6
<PAGE>
<S> <C> <C>
JOHN M. EMERY, 76 Trustee Retired; formerly Vice President
2390 McCoy Road and Treasurer of Columbus &
Columbus, OH 43220 Southern Ohio Electric Co.;
member of the Portfolio's Audit
Committee.
RICHARD A. FARR, 78 Trustee President of R&R Supply Co. and
3250 W. Henderson Road Farrair Concepts, Inc., two
Columbus, OH 43220 companies involved in
engineering, consulting and sales
of heating and air conditioning
equipment.
WILLIAM L. GURNER*, 50 Trustee President, Sector Capital
Sector Capital Management, Inc. Management, an investment adviser
5350 Poplar Avenue, Suite 490 (since January 1995); Manager of
Memphis, TN 38119 Trust Investments of Federal
Express Corporation (1987-1994).
RUSSEL G. MEANS, 71 Trustee Retired; formerly Chairman of
5711 Barry Trace Employee Benefit Management
Dublin, OH 43017 Corporation, consultants and
administrators of self-funded
health and retirement plans.
ROBERT S. MEEDER, JR.*+, 36 Trustee and Vice President President of R. Meeder &
Associates, Inc.
B-7
<PAGE>
<S> <C> <C>
LOWELL G. MILLER*, 48 Trustee President, Miller/Howard
Miller/Howard Investments, Inc. Investments, Inc., an investment
141 Upper Byrdcliffe Road adviser whose clients include the
P. O. Box 549 Utilities Stock Portfolio and the
Woodstock, NY 12498 Growth Stock Portfolio.
WALTER L. OGLE, 58 Trustee Executive Vice President of Aon
400 Interstate North Parkway, Suite 1630 Consulting, an employee benefits
Atlanta, GA 30339 consulting group.
PHILIP A. VOELKER*+, 43 Trustee and Vice President Senior Vice President and Chief
Operating Officer of R. Meeder &
Associates, Inc.
JAMES B. CRAVER*, 53 Assistant Secretary Practicing Attorney; Special
42 Miller Hill Road Counsel to Flex-Partners,
Box 811 Flex-funds and their Portfolios;
Dover, MA 02030 Senior Vice President of
Signature Financial Group, Inc.
(January 1991 to August 1995).
STEVEN T. MCCABE*+, 32 Assistant Treasurer Vice President, R. Meeder &
Associates, Inc., and Vice
President of Mutual Funds Service
Co.
DONALD F. MEEDER*+, 58 Secretary/Treasurer Vice President of R. Meeder &
Associates, Inc., and President
of Mutual Funds Service Company.
B-8
<PAGE>
<S> <C> <C>
WESLEY F. HOAG*+, 40 Vice President Vice President and General
Counsel of R. Meeder &
Associates, Inc. (since July
1993); Attorney, Porter, Wright,
Morris & Arthur, a law firm
(October 1984 to June 1993).
</TABLE>
Robert S. Meeder, Sr. is Donald F. Meeder's uncle and Robert S. Meeder,
Jr.'s father.
Each Trustee and each officer of the Portfolio hold the same positions with
other Portfolios, each a corresponding Portfolio of The Flex-funds or
Flex-Partners, each a Massachusetts business trust consisting of several
separate series.
The following table shows the compensation paid by the Portfolio and all
other mutual funds advised by the Adviser, including The Flex-funds, The
Flex-Partners and the corresponding portfolios of The Flex-Partners and The
Flex-funds (collectively, the "Fund Complex") as a whole to the Trustees of the
Portfolio and during the fiscal year ended December 31, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
Pension or
Retirement Total
Aggregate Benefits Accrued Estimated Compensation
Compensation as Part of Annual Benefits from Registrant
from the Portfolio or Upon and Fund Complex
Trustee Portfolio Fund Expense Retirement Paid to Trustee
- ------- --------- ------------ ---------- ---------------
<S> <C> <C> <C> <C>
Robert S. Meeder, Sr. None None None None
Milton S. Bartholomew $1,485 None None $7,550
John M. Emery None None None $7,550
Richard A. Farr None None None $6,750
William F. Gurner None None None $5,250
Russel G. Means $1,325 None None $6,750
Lowell G. Miller None None None None
Robert S. Meeder, Jr. None None None None
Walter L. Ogle $1,200 None None $6,000
Philip A. Voelker None None None None
Roger A. Blackwell None None None $5,250
</TABLE>
B-9
<PAGE>
Neither the Trust nor any other member of the Fund Complex pays any pension
or retirement benefits to any Trustee or officer or maintains any plan for such
purpose.
Each Trustee who is not an "interested person" is paid a meeting fee of
$250 per meeting for each of the five Portfolios. In addition, each such Trustee
earns an annual fee, payable quarterly, based on the average net assets in each
Portfolio based on the following schedule: Money Market Portfolio, 0.0005% of
the amount of average net assets between $500 million and $1 billion; 0.0025% of
the amount of average net assets exceeding $1 billion. For the other four
Portfolios, including the Portfolio, each Trustee is paid a fee of 0.00375% of
the amount of each Portfolio's average net assets exceeding $15 million. Mr.
Bartholomew comprises the Audit Committee for each corresponding Portfolio of
The Flex-funds and the Flex-Partners Trusts. Mr. Bartholomew is paid $500 for
each meeting of the Audit Committees attended regardless of the number of Audit
Committees on which he serves. Trustees fees for the Bond Portfolio totaled
$4,010 for the year ended December 31, 1996 ($3,925 in 1995). Audit Committee
fees for the Portfolio totaled $160 for the year ended December 31, 1996 ($147
in 1995) All other officers and Trustees serve without compensation from the
Portfolio.
The Declaration of Trust provides that the Portfolio will indemnify its
Trustees and officers as described below under Item 18.
ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
The Flex-funds The Bond Fund (the "Fund") has an investment in the
Portfolio equaling approximately 100% of the Portfolio's interests. No Trustee
or officer of the Portfolio or any other person, except the Fund, own in the
aggregate more than a 1% interest in the Portfolio as of the date of this
Registration Statement.
ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.
ADVISER
R. Meeder & Associates, Inc. (the "Adviser") is the investment adviser for
the Portfolio. The Adviser serves the Portfolio pursuant to an Investment
Advisory Agreement which has been approved by a vote of a majority of the
Trustees, including a majority of those Trustees who are not "interested
B-10
<PAGE>
persons" (as defined in the 1940 Act) of the Portfolio and which will remain in
force so long as renewal thereof is specifically approved at least annually by a
majority of the Trustees or by a majority vote of the investors in the Portfolio
(with the vote of each being in proportion to the amount of its investment)
("Majority Portfolio Vote"), and in either case by vote of a majority of the
Trustees who are not "interested persons" (as defined in the 1940 Act) at a
meeting called for the purpose of voting on such renewal.
The Investment Advisory Agreement will terminate automatically if assigned
and may be terminated without penalty at any time upon 60 days' prior written
notice by Majority Portfolio Vote, by the Trustees of the Portfolio, or by the
Adviser.
The Adviser earns an annual fee, payable in monthly installments at the
rate of 0.40% of the first $100 million and 0.20% in excess of $100 million of
the Portfolio's average net assets. For the year ended December 31, 1996 the
Portfolio paid fees to the Adviser totaling $59,346 ($38,275 in 1995; $33,422 in
1994).
TRANSFER AGENT
The Portfolio has entered into an Administration and Accounting Services
Agreement with Mutual Funds Service Co. ("MFSCo"), which acts as transfer agent
for the Portfolio. MFSCo maintains an account for each investor in the
Portfolio, performs other transfer agency functions and acts as dividend
disbursing agent for the Portfolio.
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP, Two Nationwide Plaza, Columbus, Ohio 43215, serves
as the Portfolio's independent accountant. The auditor examines financial
statements for the Portfolio and provides other audit, tax, and related
services.
CUSTODIAN
Pursuant to a Custody Agreement, Star Bank, N.A., Cincinnati, acts as the
custodian of the Portfolio's assets (the "Custodian"). The Custodian's
responsibilities include safeguarding and controlling the Portfolio's cash and
securities, handling the receipt and delivery of securities, determining income
and collecting interest on the Portfolio's investments and maintaining books of
original entry for Portfolio accounting and other required books and accounts.
Securities held by the Portfolio may be deposited into the Federal
Reserve-Treasury Department Book Entry System or the Depository Trust Company
and may be held by a subcustodian bank if such arrangements are reviewed and
approved by the Trustees of the Portfolio. The Custodian does not determine the
B-11
<PAGE>
investment policies of the Portfolio or decide which securities the Portfolio
will buy or sell. The Portfolio may, however, invest in securities of the
Custodian and may deal with the Custodian as principal in securities
transactions. For its services, the Custodian will receive such compensation as
may from time to time be agreed upon by it and the Portfolio.
ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.
The Portfolio seeks to obtain the best available prices on, and firm
execution of, all purchases and sales of portfolio securities. In order to do
so, it may buy securities from or sell securities to broker-dealers acting as
principals and may use primary markets in the purchase or sale of
over-the-counter securities, unless best price and execution can be obtained in
some other way.
Satisfied that it is obtaining the best available price and favorable
execution, the Portfolio may, from time to time, place orders for the purchase
or sale of portfolio securities with broker-dealers who provide research,
statistical or other financial information or services ("research") to it or to
the Adviser, or to any other client for which the Adviser acts as investment
adviser. The Portfolio's portfolio transactions are reviewed periodically by its
Board of Trustees.
The Adviser is the principal source of information and advice to the
Portfolio and is responsible for making and initiating the execution of
investment decisions for the Portfolio. However, it is recognized by the
Trustees that it is important for the Adviser, in performing its
responsibilities to the Portfolio, to continue to receive and evaluate the broad
spectrum of economic and financial information which many securities
broker-dealers have customarily furnished in connection with portfolio
transactions and that, in compensating broker-dealers for their services, it is
in the interest of the Portfolio to take into account the value of the
information received for use in advising the Portfolio. The extent, if any, to
which the obtaining of such information may reduce the expenses of the Adviser
in providing management services to the Portfolio is not determinable. In
addition, it is understood by the Trustees that other clients of the Adviser
might also benefit from the information obtained for the Portfolio, in the same
manner that the Portfolio might also benefit from information obtained by the
Adviser in performing services to others.
It is the opinion of the Trustees of the Portfolio and of the Adviser that
the receipt of research from broker-dealers will not materially reduce the
Adviser's own research activities or the overall cost of fulfilling its
contractual obligations to the Portfolio.
B-12
<PAGE>
During the year ended December 31, 1996, the Bond Portfolio paid total
commissions of $15,691 on the purchase and sale of futures contracts.
ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.
Under the Declaration of Trust, the Trustees are authorized to issue
beneficial interests in the Portfolio. Investors are entitled to participate pro
rata in distributions of taxable income, loss, gain and credit of the Portfolio.
Upon liquidation or dissolution of the Portfolio, investors are entitled to
share pro rata in the Portfolio's net assets available for distribution to its
investors. Investments in the Portfolio have no preference, preemptive,
conversion or similar rights and are fully paid and nonassessable, except as set
forth below. Investments in the Portfolio may not be transferred. Certificates
representing an investor's beneficial interest in the Portfolio are issued only
upon the written request of an investor.
Each investor is entitled to a vote in proportion to the amount of its
investment in the Portfolio. Investors in the Portfolio do not have cumulative
voting rights, and investors holding more than 50% of the aggregate beneficial
interest in the Portfolio may elect all of the Trustees of the Portfolio if they
choose to do so and in such event the other investors in the Portfolio would not
be able to elect any Trustee. The Portfolio is not required to hold annual
meetings of investors but the Portfolio will hold special meetings of investors
when in the judgment of the Portfolio's Trustees it is necessary or desirable to
submit matters for an investor vote. No material amendment may be made to the
Portfolio's Declaration of Trust without the affirmative majority vote of
investors (with the vote of each being in proportion to the amount of their
investment).
The Portfolio may enter into a merger or consolidation, or sell all or
substantially all of its assets, if approved by the vote of two-thirds of its
investors (with the vote of each being in proportion to the amount of their
investment), except that if the Trustees of the Portfolio recommend such sale of
assets, the approval by vote of a majority of the investors (with the vote of
each being in proportion to the amount of their investment) will be sufficient.
The Portfolio may also be terminated (i) upon liquidation and distribution of
its assets, if approved by the vote of two-thirds of its investors (with the
vote of each being in proportion to the amount of their investment), or (ii) by
the Trustees of the Portfolio by written notice to its investors.
The Portfolio is organized as a trust under the laws of the State of New
York. Investors in the Portfolio will be held personally liable for its
obligations and liabilities, subject, however, to indemnification by the
Portfolio in the event that there is imposed upon an investor a greater portion
of the liabilities and obligations of the Portfolio than its proportionate
beneficial interest in the Portfolio. The Declaration of Trust also provides
B-13
<PAGE>
that the Portfolio shall maintain appropriate insurance (for example, fidelity
bonding and errors and omissions insurance) for the protection of the Portfolio,
its investors, Trustees, officers, employees and agents covering possible tort
and other liabilities. Thus, the risk of an investor incurring financial loss on
account of investor liability is limited to circumstances in which both
inadequate insurance existed and the Portfolio itself was unable to meet its
obligations.
The Declaration of Trust further provides that obligations of the Portfolio
are not binding upon the Trustees individually but only upon the property of the
Portfolio and that the Trustees will not be liable for any action or failure to
act, but nothing in the Declaration of Trust protects a Trustee against any
liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office. The Declaration of Trust provides that
the trustees and officers will be indemnified by the Portfolio against
liabilities and expenses incurred in connection with litigation in which they
may be involved because of their offices with the Portfolio, unless, as to
liability to the Portfolio or its investors, it is finally adjudicated that they
engaged in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in their offices, or unless with respect to any
other matter it is finally adjudicated that they did not act in good faith in
the reasonable belief that their actions were in the best interests of the
Portfolio. In the case of settlement, such indemnification will not be provided
unless it has been determined by a court or other body approving the settlement
or other disposition, or by a reasonable determination, based upon a review of
readily available facts, by vote of a majority of disinterested Trustees or in a
written opinion of independent counsel, that such officers or Trustees have not
engaged in willful misfeasance, bad faith, gross negligence or reckless
disregard of their duties.
ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.
Beneficial interests in the Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act"). Investments in the Portfolio may only be made by investment companies,
insurance company separate accounts, common or commingled trust funds or similar
organizations or entities which are "accredited investors" as defined in
Regulation D under the 1933 Act. This Registration Statement does not constitute
an offer to sell, or the solicitation of an offer to buy, any "security" within
the meaning of the 1933 Act.
B-14
<PAGE>
The Portfolio determines its net asset value as of 3:00 p.m., New York
time, each Fund Business Day by dividing the value of the Portfolio's net assets
by the value of the investment of the investors in the Portfolio at the time the
determination is made. (Net asset value will not be determined on Good Friday or
any holiday observed by the Federal Reserve System. These presently include New
Year's Day, Martin Luther King Day, President's Day, Memorial Day, Independence
Day, Labor Day, Columbus Day, Veteran's Day, Thanksgiving Day and Christmas.)
Purchases and reductions will be effected at the time of determination of net
asset value next following the receipt of any purchase or reduction order.
Securities owned by the Portfolio and listed or traded on any national
securities exchange are valued at 3:00 p.m. each day that the exchange is open
for business. If there is no sale on that day, or if the security is not listed,
it is valued at its last bid quotation on the exchange or, in the case of
unlisted securities, as obtained from an established market maker. Futures
contracts are valued on the basis of the cost of closing out the liability;
i.e., at the settlement price of a closing contract or at the asked quotation
for such a contract if there is no sale. Money market instruments having
maturities of 60 days or less are valued at amortized cost if not materially
different from market value. Portfolio securities for which market quotations
are not readily available are to be valued by the Adviser in good faith at its
own expense under the direction of the Trustees.
ITEM 20. TAX STATUS.
The Portfolio is organized as a trust under New York law. Under the method
of operation of the Portfolio, the Portfolio is not subject to any income tax.
However, each investor in the Portfolio is taxable on its share (as determined
in accordance with the governing instruments of the Portfolio) of the
Portfolio's ordinary income and capital gain in determining its income tax
liability. The determination of such share is made in accordance with the
Internal Revenue Code of 1986, as amended, and regulations promulgated
thereunder.
The Portfolio's taxable year-end is December 31. Although, as described
above, the Portfolio is not subject to federal income tax, it files appropriate
federal income tax returns.
The Portfolio's assets, income and distributions are managed in such a way
that an investor in the Portfolio will be able to satisfy the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended, assuming that the
investor invested all of its investable assets in the Portfolio.
B-15
<PAGE>
ITEM 21. UNDERWRITERS.
The Portfolio has not retained the services of a principal underwriter or
distributor, as interests in the Portfolio are offered solely in private
placement transactions. Investment companies, insurance company separate
accounts, common and commingled trust funds and similar organizations and
entities may continuously invest in the Portfolio.
ITEM 22. CALCULATION OF PERFORMANCE DATA.
Not applicable.
ITEM 23. FINANCIAL STATEMENTS.
The following financial statements are intended to provide information only
with respect to the Bond Portfolio. Persons interested in obtaining information
about any of the other Portfolios should contact the Investment Adviser to
obtain a copy of such Portfolio's current Registration Statement.
B-16
<PAGE>
<TABLE>
<CAPTION>
BOND PORTFOLIO
Portfolio of Investments as of December 31, 1996
FACE AMOUNT VALUE
<S> <C> <C>
U.S.TREASURY NOTES - 66.6%
U.S. Treasury Note, 6.50%, due 10/15/2006 $ 9,000,000 $ 9,054,844
TOTAL U.S.TREASURY NOTES =========
(Cost $9,169,393) 9,054,844
---------
U.S. GOVERNMENT AGENCY - 29.9%
Federal National Mortgage Association Discount Note, 5.48%, due 1/06/97 2,000,000 1,998,478
Federal National Mortgage Association Discount Note, 5.48%, due 1/14/97 2,000,000 1,996,042
Federal National Mortgage Association Note, 4.80%, due 6/25/97 79,359 78,937
TOTAL U.S. GOVERNMENT AGENCY =========
(Cost $4,073,521) 4,073,457
---------
U.S.TREASURY BILLS - 1.9%
U.S. Treasury Bill, 4.97%, due 2/20/97 100,000 99,310
U.S. Treasury Bill, 5.34%, due 3/06/97 100,000 99,105
U.S. Treasury Bill, 4.99%, due 3/06/97 50,000 49,552
U.S. Treasury Bill, 4.90%, due 1/09/97 4,800 4,794
TOTAL U.S.TREASURY BILLS =========
(Cost $252,711) 252,761
---------
REPURCHASE AGREEMENTS - 1.6%
(Collateralized by U.S. government obligations - market value $227,072)
Prudential Bache Securities, dated 12/31/96, 6.75%, due 1/02/97 225,000 225,000
---------
TOTAL REPURCHASE AGREEMENTS
(Cost $225,000) 225,000
---------
TOTAL INVESTMENTS - 100% ===========
(Cost $13,720,625) $13,606,062
-----------
See accompanying notes to financial statements
</TABLE>
B-17
<PAGE>
<TABLE>
<CAPTION>
MUTUAL FUND PORTFOLIO
Portfolio of Investments as of December 31, 1996
SHARES OR
FACE AMOUNT VALUE
<S> <C> <C>
MUTUAL FUNDS - 59.5%
Aim Constellation Fund 86 $2,185
Aim Weingarten Fund 99 1,832
Charles Schwab Money Market Fund 16,172,563 16,172,563
Fidelity Blue Chip Fund 235,580 7,701,108
Fidelity Core Money Market Fund 19,964,557 19,964,557
Fidelity Fund 236,798 5,848,911
Fidelity Growth & Income Fund 251,433 7,726,531
Mutual Series Fund 58 5,412
PBHG Growth Fund 624 16,398
Rydex U.S. Government Money Market Fund 5,927,310 5,927,310
Rydex Nova Fund 721,714 12,666,082
T. Rowe Price New Era Fund 132 3,443
T. Rowe Price New Horizons Fund 151 3,287
Value Line Fund 292,179 5,636,131
TOTAL MUTUAL FUNDS ==========
(Cost $81,126,588) 81,675,750
----------
U.S.TREASURY BILLS - 2.9%
*U.S. Treasury Bill, 5.34%, due 3/06/97 $1,650,000 1,635,222
*U.S. Treasury Bill, 5.00%, due 3/06/97 1,000,000 991,044
*U.S. Treasury Bill, 4.84%, due 3/06/97 900,000 891,940
*U.S. Treasury Bill, 4.90%, due 3/06/97 200,000 198,209
*U.S. Treasury Bill, 4.99%, due 3/06/97 150,000 148,657
U.S. Treasury Bill, 4.90%, due 1/09/97 30,100 30,068
TOTAL U.S. TREASURY BILLS =========
(Cost $3,894,698) 3,895,140
---------
<FN>
*Pledged $2,960,000 face amount as collateral on futures contracts
</FN>
B-18
<PAGE>
<CAPTION>
MUTUAL FUND PORTFOLIO, continued
<S> <C> <C>
REPURCHASE AGREEMENTS - 37.6%
(Collateralized by U.S. government
obligations - market value $52,366,298)
Paine Webber Incorporated, dated 12/30/96,
6.35%, due 1/02/97 25,000,000 25,000,000
Prudential Bache Securities, dated 12/31/96,
6.75%, due 1/02/97 14,343,000 14,343,000
State Street Bank, dated 12/31/96,
6.00%, due 1/02/97 12,318,000 12,318,000
TOTAL REPURCHASE AGREEMENTS ==========
(Cost $51,661,000) 51,661,000
----------
TOTAL INVESTMENTS - 100% ============
(Cost $136,682,286) $137,231,890
------------
CONTRACTS
FUTURES CONTRACTS
Long, S&P 500 futures contracts,
face amount $90,456,750 expiring in March, 1997. 243 (1,773,830)
Long, Midcap futures contracts,
face amount $2,181,100 expiring in March, 1997. 17 (11,475)
-----------
NET PAYABLE FOR FUTURES CONTRACTS SETTLEMENTS (1,785,305)
-----------
See accompanying notes to financial statements
</TABLE>
B-19
<PAGE>
<TABLE>
<CAPTION>
GROWTH STOCK PORTFOLIO
Portfolio of Investments as of December 31, 1996
SHARES OR
INDUSTRIES/CLASSIFICATIONS FACE AMOUNT VALUE
<S> <C> <C>
COMMON STOCKS - 67.6%
AEROSPACE/DEFENSE - (3.4%)
Boeing Company 7,850 $835,044
--------
ALUMINUM - (2.0%)
Aluminum Company of America 7,850 500,438
--------
AUTO AND TRUCK - (1.8%)
General Motors 7,850 437,637
--------
BANKING - (3.1%)
J.P. Morgan & Company, Inc. 7,850 766,356
--------
BEVERAGE - (1.7%)
Coca Cola 7,850 413,106
--------
CHEMICAL (BASIC) - (4.3%)
Dupont 7,850 740,844
Union Carbide 7,850 320,869
========
1,061,713
--------
CHEMICAL (DIVERSIFIED) - (2.7%)
Minnesota Mining & Manufacturing 7,850 650,569
--------
COMPUTER AND PERIPHERALS - (4.8%)
International Business Machines 7,850 1,185,350
--------
DRUG - (2.5%)
Merck & Company, Inc. 7,850 622,112
--------
B-20
<PAGE>
<CAPTION>
GROWTH STOCK PORTFOLIO, continued
<S> <C> <C>
ELECTRICAL EQUIPMENT - (3.8%)
General Electric Company 7,850 776,169
Westinghouse Electric Corporation 7,850 156,018
========
932,187
--------
FINANCIAL SERVICES - (1.8%)
American Express 7,850 443,525
--------
HOUSEHOLD PRODUCTS - (3.4%)
Procter & Gamble 7,850 843,875
--------
MACHINERY (CONSTRUCTION & MINING) - (2.4%)
Caterpillar Inc. 7,850 590,713
--------
MULTIFORM - (4.3%)
Allied-Signal Inc. 7,850 525,950
United Technologies 7,850 518,100
========
1,044,050
--------
PAPER AND FOREST PRODUCTS - (1.3%)
International Paper 7,850 316,943
--------
PETROLEUM (INTEGRATED) - (8.3%)
Chevron Corporation 7,850 510,250
Exxon 7,850 769,300
Texaco 7,850 770,281
========
2,049,831
--------
B-21
<PAGE>
<CAPTION>
Growth Stock Portfolio, continued
<S> <C> <C>
PRECISION INSTRUMENT - (2.7%)
Eastman Kodak 7,850 629,963
Imation Corporation 785 22,078
========
652,041
--------
RECREATION - (2.2%)
Walt Disney Company 7,850 546,556
--------
RESTAURANT - (1.5%)
McDonalds Corporation 7,850 355,213
--------
RETAIL STORE - (2.2%)
Sears 7,850 362,081
Woolworth Corporation 7,850 171,719
========
533,800
--------
STEEL (INTEGRATED) - (.3%)
Bethlehem Steel 7,850 70,650
--------
TELECOMMUNICATION EQUIPMENT & SERVICES - (1.9%)
American Telephone & Telegraph 7,850 341,475
Lucent Technologies Incorporated 2,544 117,660
========
459,135
--------
TIRE AND RUBBER - (1.6%)
Goodyear Tire & Rubber 7,850 403,294
--------
TOBACCO - (3.6%)
Philip Morris Companies, Inc. 7,850 884,106
TOTAL COMMON STOCKS ==========
(Cost $13,435,117) 16,598,244
----------
B-22
<PAGE>
<CAPTION>
GROWTH STOCK PORTFOLIO, continued
<S> <C> <C>
U.S. TREASURY BILLS - 4.0%
*U.S. Treasury Bill, 5.34%, due 3/06/97 $800,000 792,836
U.S. Treasury Bill, 5.01%, due 3/06/97 100,000 99,105
U.S. Treasury Bill, 4.84%, due 3/06/97 100,000 99,104
U.S. Treasury Bill, 4.90%, due 1/09/97 6,000 5,994
TOTAL U.S. TREASURY BILLS ========
(Cost $996,649) 997,039
--------
<FN>
*Pledged $390,000 face amount as collateral on futures
</FN>
REPURCHASE AGREEMENTS - 28.4%
(Collateralized by U.S. government obligations
- market value $7,047,064)
Paine Webber Incorporated, dated 12/30/96,
6.35%, due 1/02/97 4,000,000 4,000,000
Prudential Bache Securities, dated 12/31/96,
6.75%, due 1/02/97 2,968,000 2,968,000
TOTAL REPURCHASE AGREEMENTS =========
(Cost $6,968,000) 6,968,000
---------
TOTAL INVESTMENTS - 100% ===========
(Cost $21,399,766) $24,563,283
-----------
CONTRACTS
FUTURES CONTRACTS
Long, S&P 500 futures contracts,
face amount $7,817,250 expiring in March, 1997. 21 (153,300)
=========
NET PAYABLE FOR FUTURES CONTRACTS SETTLEMENTS (153,300)
---------
See accompanying notes to financial statements
</TABLE>
B-23
<PAGE>
<TABLE>
<CAPTION>
UTILITIES STOCK PORTFOLIO
Portfolio of Investments as of December 31, 1996
SHARES OR
INDUSTRIES/CLASSIFICATIONS FACE AMOUNT VALUE
<S> <C> <C>
COMMON STOCKS - 88.5%
ELECTRIC/GAS UTILITY - (4.1%)
MDU Resources Group Incorporated 6,100 $ 140,300
Nipsco Industries Incorporated 4,700 186,238
========
326,538
--------
ELECTRIC UTILITY - (18.1%)
Cinergy Corporation 7,900 263,663
Ipalco Enterprises Incorporated 6,000 163,500
KU Energy Corporation 3,300 99,000
LG&E Energy Corporation 8,600 210,700
Pacificorp 10,000 205,000
Public Service Company of Colorado 5,900 229,362
Teco Energy Incorporated 11,000 265,375
========
1,436,600
--------
DIVERSIFIED UTILITY - (1.9%)
Citizens Utilities Company Class B 13,514 150,341
--------
NATURAL GAS (DISTRIBUTOR) - (21.8%)
Bay State Gas Company 2,200 62,150
Brooklyn UN Gas Company 5,900 177,738
Consolidated Natural Gas Company 3,900 215,475
MCN Corporation 6,200 179,025
Nicor Incorporated 1,800 64,350
Pacific Enterprises 7,000 212,625
Panenergy Corporation 5,500 247,500
Transcanada Pipelines Ltd. 8,200 143,500
UGI Corporation 2,000 44,750
Wicor Incorporated 5,800 208,075
Williams Companies Incorporated 4,800 180,000
========
1,735,188
--------
B-24
<PAGE>
<CAPTION>
Utilities Stock Portfolio, continued
<S> <C> <C>
OIL/GAS (DOMESTIC) - (7.9%)
El Paso Natural Gas Company 4,800 242,400
Enron Corporation 3,000 129,375
Questar Corporation 5,300 194,775
Sante Fe Pacific Pipeline Partners 1,600 60,800
========
627,350
--------
TELECOMMUNICATION EQUIPMENT - (2.1%)
LCC International A 5,000 92,500
Vanguard Cellular 4,700 74,025
========
166,525
--------
TELECOMMUNICATION SERVICES - (28.7%)
Airtouch Communications 5,600 141,400
Alltel Corporation 8,100 254,138
Bell Atlantic Corporation 2,400 155,400
Bellsouth Corporation 3,000 121,125
Century Telephone 8,500 262,437
Frontier Corporation 9,500 214,937
GTE Corporation 5,200 236,600
Intellicell Corporation 30,000 221,250
MCI Communications 5,000 163,437
Sprint Corporation 4,400 175,450
Tele Denmark 5,000 136,250
U.S. West Incorporated 6,000 193,500
=========
2,275,924
---------
WATER UTILITY - (3.9%)
American Water Works Incorporated 15,200 313,500
--------
TOTAL COMMON STOCKS
(Cost $6,252,239) 7,031,966
---------
B-25
<PAGE>
<CAPTION>
UTILITIES STOCK PORTFOLIO, continued
<S> <C> <C>
U.S. TREASURY BILLS - 0.0%
U.S. Treasury Bill, 4.90%, due 1/09/97 $ 1,000 1,000
-------
TOTAL U.S. TREASURY BILLS
(Cost $1,000) 1,000
-------
REPURCHASE AGREEMENTS - 11.5%
(Collateralized by U.S. government
obligations - market value $922,418)
Prudential Bache Securities, dated 12/31/96,
6.75%, due 1/02/97 914,000 914,000
-------
TOTAL REPURCHASE AGREEMENTS
(Cost $914,000) 914,000
-------
TOTAL INVESTMENTS - 100% ==========
(Cost $7,167,239) $7,946,966
----------
See accompanying notes to financial statements
</TABLE>
B-26
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
Portfolio of Investments as of December 31, 1996
AMORTIZED
FACE AMOUNT COST
<S> <C> <C>
COMMERCIAL PAPER - 49.5%
American Trading & Production, 5.35%, due 1/14/97 $ 4,000,000 $ 3,992,272
Bell South, 5.42%, due 1/21/97 5,030,000 5,014,854
Calcot, 5.75%, due 2/21/97 3,000,000 2,975,562
Calcot, 5.40%, due 1/24/97 5,000,000 4,982,750
Calcot, 5.36%, due 1/22/97 5,000,000 4,984,367
Cargill Financial, 5.58%, due 6/16/97 5,000,000 4,871,350
Coca-Cola Company, 5.80%, due 1/17/97 15,000,000 14,961,333
Equitable of Iowa, 5.61%, due 1/17/97 12,000,000 11,970,080
Fingerhut Owners Trust, 5.50%, due 1/09/97 10,000,000 9,987,778
Fleet Funding, 5.48%, due 1/24/97 2,200,000 2,192,298
Hertz Corporation, 5.90%, due 1/03/97 10,000,000 9,996,722
Hitachi America Ltd., 5.35%, due 3/25/97 8,160,000 8,059,349
JC Penney Funding, 5.39%, due 3/27/97 15,000,000 14,809,104
Merrill Lynch & Company, 5.55%, due 6/13/97 5,000,000 4,874,354
Michigan Consolidated Gas, 5.33%, due 2/07/97 8,000,000 7,956,175
National Rural Utilities, 5.31%, due 2/14/97 4,200,000 4,172,742
PHH Corporation, 5.50%, due 1/17/9710,000,000 9,975,556
Portland General Electric, 5.33%, due 1/21/97 10,000,000 9,970,389
Receivables Capital Corporation, 5.75%, due 1/15/97 10,000,000 9,977,639
Toyota Motor Company, 5.31%, due 2/06/97 8,000,000 7,957,520
WMX Technologies, 5.60%, due 5/13/97 20,000,000 19,589,333
TOTAL COMMERCIAL PAPER ===========
(Cost $173,271,527) 173,271,527
-----------
CORPORATE OBLIGATIONS - 33.1%
American Home Products Corporation, 6.875%, due 4/15/97 1,005,000 1,008,499
American General Finance, 7.75%, due 1/15/97 450,000 450,335
Associates Corporation, 6.875%, due 1/15/97 425,000 425,179
*Bank One Capital Demand Note, 5.95%, next redemption
date 1/02/97, due 4/01/2113 3,536,000 3,536,000
Bell Atlantic Corporation, 7.22%, due 6/16/97 4,000,000 4,029,304
Bell Tri LSG, 8.05%, due 2/19/97 500,000 501,663
*Care Life Project Floating Rate Note, 5.80%, next
redemption date 1/02/97, due 8/01/2111 1,350,000 1,350,000
*Caterpillar Financial Incorporated Floating Rate
Note, 5.654%, due 6/20/97 1,000,000 1,000,473
Caterpillar Incorporated, 5.05%, due 1/15/97 500,000 499,933
Central Illinois Public Service, 6.125%, due 7/01/97 2,000,000 2,003,840
Chase Manhattan Bank, 7.875%, due 1/15/97 750,000 750,574
B-27
<PAGE>
<CAPTION>
MONEY MARKET PORTFOLIO, continued
<S> <C> <C>
Consolidated Rail, 6.00%, due 7/01/97 142,000 141,977
Cooper Industries, 7.77%, due 10/21/97 5,000,000 5,063,808
Cooper Industries, 7.81%, due 10/15/97 3,000,000 3,038,398
*Espanola/Nambe Variable Rate Demand Note, 5.84%, next
redemption date 1/02/97, due 6/01/2006 2,500,000 2,500,000
Ford Capital, 9.75%, due 6/05/97 3,700,000 3,755,316
Ford Holdings, 9.25%, due 7/15/97 3,168,000 3,220,923
Ford Motor Credit Corporation, 6.75%, put date 7/15/97 350,000 351,922
GE Capital Corporation, 7.00%, due 4/03/97 1,518,000 1,522,190
GE Capital Corporation, 4.55%, due 10/27/97 2,500,000 2,471,888
*General Motors Acceptance Corporation Floating Rate Note,
5.68%, next redemption date 4/13/97, due 4/13/98 10,000,000 10,000,000
General Motors Acceptance Corporation, 7.40%, due 1/14/97 170,000 170,130
General Motors Acceptance Corporation, 7.80%, due 5/05/97 9,200,000 9,264,405
General Motors Acceptance Corporation, 7.90%, due 5/01/97 1,500,000 1,509,712
General Telephone, California, 6.75%, due 12/01/97 2,500,000 2,500,000
General Nutrition Corporation, 11.375%, redemption date 3/03/97 5,000,000 5,183,933
Golden West Financial, 10.25%, due 5/15/97 475,000 482,422
*Hancor Incorporated Floating Rate Note, 5.84%, next redemption
date 1/02/97, due 12/01/2004 800,000 800,000
Hertz Corporation, 10.125%, due 3/01/97 2,000,000 2,014,965
Marshall & Isley, 7.375%, due 10/31/97 10,000,000 10,125,300
Michigan Consolidated Gas, 6.25%, due 5/01/97 1,500,000 1,502,857
Minnesota Mining & Manufacturing, 6.375%, due 6/16/97 1,000,000 1,001,186
Morgan Stanley Incorporated, 7.32%, due 1/15/97 500,000 500,292
*Mubea, Incorporated Floating Rate Note, 5.84%, next redemption
date 1/02/97, due 12/01/2004 5,000,000 5,000,000
NBD Bank N.A., 7.875%, due 1/21/97 250,000 250,266
Philip Morris Companies, 9.25%, due 12/01/97 1,568,000 1,615,090
Philip Morris Companies, 9.75%, due 5/01/97 814,000 824,532
Philip Morris Companies, 8.75%, due 6/15/97 500,000 506,712
Philip Morris Companies, 7.50%, due 3/15/97 870,000 873,155
*Presrite Corporation Floating Rate Note, 5.84%, next redemption
date 1/02/97, due 1/01/2004 2,540,000 2,540,000
*Seariver Maritime Financial Holdings Floating Rate Note, 5.405%,
next redemption date 1/02/97, due 10/01/2111 7,000,000 7,000,000
Sears Roebuck & Company, 6.66%, due 5/20/97 1,000,000 1,003,456
Sears Roebuck & Company, 7.41%, due 6/11/97 100,000 100,629
Southern California Edison, 5.90%, due 1/15/97 1,000,000 1,000,237
Virginia Electric & Power, 7.25%, due 3/01/97 3,250,000 3,258,635
*White Castle Corporation, Floating Rate Note, 5.84%, next
redemption date 1/02/97, due 12/01/2010 9,000,000 9,000,000
TOTAL CORPORATE OBLIGATIONS ===========
(Cost $115,650,136) 115,650,136
-----------
U.S. TREASURY NOTES - 4.0%
U.S. Treasury Note, 6.00%, due 8/31/97 4,000,000 4,005,201
U.S. Treasury Note, 6.00%, due 11/30/97 10,000,000 10,043,606
B-28
<PAGE>
<CAPTION>
MONEY MARKET PORTFOLIO, continued
<S> <C> <C>
TOTAL U.S. TREASURY NOTES ==========
(Cost $14,048,807) 14,048,807
----------
U.S. TREASURY BILLS - 0.0% ==========
U.S. Treasury Bill, 4.906%, due 1/09/97 63,100 63,031
----------
TOTAL U.S. TREASURY BILLS
(Cost $63,031) 63,031
U.S. GOVERNMENT OBLIGATIONS - 4.1%
Federal Home Loan Mortgage Corporation, 5.10%, due 1/13/97 100,000 99,995
Federal Home Loan Mortgage Corporation, 6.47%, due 7/07/97 500,000 501,978
Federal Home Loan Bank Note, 5.50%, due 3/21/97 235,000 235,000
Federal Farm Credit, 5.32%, due 2/03/97 200,000 199,895
*Federal Home Loan Bank Floating Rate Note, 5.803%,
due 4/08/97, next redemption date 1/02/97 2,000,000 2,000,863
*Student Loan Marketing Association Floating Rate
Note, 5.48%, due 8/03/99, next redemption date
7/02/96 4,350,000 4,353,782
*Student Loan Marketing Association Floating Rate Note,
5.43%, due 11/10/98, next redemption date 7/02/96 5,000,000 5,000,000
*Student Loan Marketing Association Floating Rate Note,
5.41%, due 11/24/97, next redemption date 7/02/96 2,000,000 1,999,816
Tennesee Valley Authority, 6.00%, due 1/15/97 100,000 100,009
TOTAL U.S. GOVERNMENT OBLIGATIONS ==========
(Cost $14,491,338) 14,491,338
----------
REPURCHASE AGREEMENTS - 9.3%
(Collateralized by U.S. government obligations - market value $32,927,954)
Paine Webber Incorporated, dated 12/31/96, 6.35%, due 1/02/97 21,000,000 21,000,000
Prudential Bache Securities, dated 12/31/96, 6.75%, due 1/02/97 11,550,000 11,550,000
TOTAL REPURCHASE AGREEMENTS ==========
(Cost $32,550,000) 32,550,000
----------
TOTAL INVESTMENTS - 100% ============
(Cost $350,074,839) $350,074,839
------------
<FN>
* - Floating Rate as of 12/31/96.
</FN>
See accompanying notes to financial statements
</TABLE>
B-29
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1996
Mutual Growth Utilities Money
Fund Stock Stock Bond Market
Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C> <C>
Assets:
Investments at market value* $85,570,890 $17,595,283 $7,032,966 $13,381,062 $317,524,839
Repurchase agreements* 51,661,000 6,968,000 914,000 225,000 32,550,000
Cash 520 689 583 581 248,915
Receivable for securities sold - - - 4,084,554 -
Interest receivable 193,699 1,968 171 125,001 3,167,087
Dividends receivable - 32,852 18,560 - -
Prepaid/Other assets 644 140 16 89 844
Unamortized organization costs 4,924 2,545 31,150 2,545 2,545
=========== =========== =========== =========== ============
Total Assets 137,431,677 24,601,477 7,997,446 17,818,832 353,494,230
----------- ----------- ----------- ----------- ------------
Liabilites:
Payable for futures contract settlement 1,785,305 153,300 - 8,625 -
Payable to corresponding Fund - - - - 505,357
Payable to investment adviser 91,065 21,868 6,264 6,077 46,355
Accrued fund accounting fees 4,248 2,648 644 1,910 6,313
Other accrued liabilities 11,491 9,979 26,184 10,626 5,980
=========== =========== =========== =========== ============
Total Liabilities 1,892,109 187,795 33,092 27,238 564,005
----------- ----------- ----------- ----------- ------------
Net Assets:
Capital 134,989,964 21,250,165 7,184,627 17,906,157 352,930,225
Net unrealized gain (loss) on investments 549,604 3,163,517 779,727 (114,563) -
=========== =========== =========== =========== ============
Net Assets $135,539,568 $24,413,682 $7,964,354 $17,791,594 $352,930,225
----------- ----------- ----------- ----------- ------------
*Securities at cost 136,682,286 21,399,766 7,167,239 13,720,625 350,074,839
See accompanying notes to financial statements
</TABLE>
B-30
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the year ended December 31, 1996
Mutual Growth Utilities Money
Fund Stock Stock Bond Market
Portfolio Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME - NET:
Interest $3,331,013 $599,916 $20,631 $983,788 $20,131,315
Dividends 348,105 321,268 230,516 - -
========== ========= ======== ======== ===========
Total Investment Income 3,679,118 921,184 251,147 983,788 20,131,315
---------- --------- -------- -------- -----------
Expenses:
Investment advisory fees 1,083,553 258,239 65,190 70,236 1,060,982
Legal fees 1,543 2,040 1,535 1,543 1,522
Audit fees 10,880 8,471 10,211 8,184 13,848
Custodian fees 15,407 6,451 3,066 4,980 21,008
Accounting fees 50,435 30,867 9,541 22,555 74,002
Trustees fees and expenses 4,870 7,192 5,558 4,956 4,938
Insurance 2,382 536 51 340 3,913
Amortization of organization cost 5,453 4,992 8,996 4,992 4,992
Other expenses 4,649 1,313 4,000 865 3,720
========== ========= ======== ======== ===========
Total Expenses 1,179,172 320,101 108,148 118,651 1,188,925
Investment advisory fees waived - - - (10,890) (512,876)
Directed brokerage payments received - - (3,377) - -
Other directed payments received (10,397) - - - -
========== ========= ======== ======== ===========
Total Expenses - net 1,168,775 320,101 104,771 107,761 676,049
---------- --------- -------- -------- -----------
INVESTMENT INCOME - NET 2,510,343 601,083 146,376 876,027 19,455,266
---------- --------- -------- -------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on futures contracts (425,664) (1,614,924) - 41,147 -
Net realized gain (loss) on investments 11,000,788 301,314 348,392 (7,021) -
Net change in unrealized appreciation
(depreciation) of investments (5,130,740) 3,055,094 357,308 (776,915) -
========== ========= ======== ======== ===========
NET GAIN (LOSS) ON INVESTMENTS 5,444,384 1,741,484 705,700 (742,789) -
========== ========= ======== ======== ===========
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $7,954,727 $2,342,567 $852,076 $133,238 $19,455,266
========== ========= ======== ======== ===========
See accompanying notes to financial statements
</TABLE>
B-31
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31,
Mutual Growth
Fund Stock
Portfolio Portfolio
1996 1995 1996 1995
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income - net $2,510,343 $1,278,396 $601,083 $900,867
Net realized gain (loss) on investments and futures contracts 10,575,124 15,554,692 (1,313,610) 4,316,033
Net change in unrealized appreciation
(depreciation) of investments (5,130,740) 5,680,803 3,055,094 111,506
----------- ---------- ----------- ---------
Net increase in net assets resulting from operations 7,954,727 22,513,891 2,342,567 5,328,406
----------- ---------- ----------- ---------
TRANSACTIONS OF INVESTORS' BENEFICIAL INTERESTS:
Contributions 32,575,692 34,671,819 4,020,512 1,680,821
Withdrawals (27,099,980) (18,261,284) (6,486,427) (4,640,744)
----------- ---------- ----------- ---------
Net increase (decrease) in net assets resulting from
transactions of investors' beneficial interests 5,475,712 16,410,535 (2,465,915) (2,959,923)
----------- ---------- ----------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS 13,430,439 38,924,426 (123,348) 2,368,483
=========== ========== =========== =========
NET ASSETS - Beginning of period 122,109,129 83,184,703 24,537,030 22,168,547
=========== ========== =========== =========
NET ASSETS - End of period $135,539,568 $122,109,129 $24,413,682 $24,537,030
=========== ========== =========== =========
B-32
<PAGE>
<CAPTION>
Utilities
Stock Bond
Portfolio Portfolio
1996 1995* 1996 1995
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income - net $146,376 $29,889 $876,027 $841,854
Net realized gain (loss) on investments and futures contracts 348,392 (1,067) 34,126 988,487
Net change in unrealized appreciation
(depreciation) of investments 357,308 422,419 (776,915) 667,977
----------- ---------- ----------- ---------
Net increase in net assets resulting from operations 852,076 451,241 133,238 2,498,318
----------- ---------- ----------- ---------
TRANSACTIONS OF INVESTORS' BENEFICIAL INTERESTS:
Contributions 5,138,546 3,908,655 4,220,008 2,890,694
Withdrawals (2,317,138) (69,026) (2,627,674) (2,330,962)
----------- ---------- ----------- ---------
Net increase (decrease) in net assets resulting from
transactions of investors' beneficial interests 2,821,408 3,839,629 1,592,334 559,732
----------- ---------- ----------- ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS 3,673,484 4,290,870 1,725,572 3,058,050
=========== ========== =========== =========
NET ASSETS - Beginning of period 4,290,870 - 16,066,022 13,007,972
=========== ========== =========== =========
NET ASSETS - End of period $7,964,354 $4,290,870 $17,791,594 $16,066,022
=========== ========== =========== =========
B-33
<PAGE>
<CAPTION>
Money
Market
Portfolio
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income - net $19,455,266 $11,720,462
Net realized gain (loss) on investments and futures contracts - -
Net change in unrealized appreciation
(depreciation) of investments - -
------------- ------------
Net increase in net assets resulting from operations 19,455,266 11,720,462
------------- ------------
TRANSACTIONS OF INVESTORS' BENEFICIAL INTERESTS:
Contributions 1,414,075,891 753,617,719
Withdrawals (1,335,249,306) (735,213,083)
------------- ------------
Net increase (decrease) in net assets resulting from
transactions of investors' beneficial interests 78,826,585 18,404,636
------------- ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 98,281,851 30,125,098
============= ============
NET ASSETS - Beginning of period 254,648,374 224,523,276
============= ============
NET ASSETS - End of period $352,930,225 $254,648,374
============= ============
<FN>
*For the period June 21, 1995 through December 31, 1996
</FN>
See accompanying notes to financial statements
</TABLE>
B-34
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Ratios/Supplemental Data
MUTUAL FUND PORTFOLIO
Year Ended December 31,
1996 1995 1994 1993
<S> <C> <C> <C> <C>
Net Assets, End of Period ($000) 135,540 122,109 83,185 81,605
Ratio of Expenses to Average Net Assets* 0.87% 0.95% 1.01% 1.03%
Ratio of Net Investment Income to Average Net Assets 1.86% 1.26% 2.76% 0.09%
Portfolio Turnover Rate 297.41% 186.13% 168.17% 279.56%
<FN>
*Ratio of expenses both with and without effect of directed payments
</FN>
</TABLE>
<TABLE>
<CAPTION>
GROWTH STOCK PORTFOLIO
For The Period May 1, 1992
Year Ended December 31, to December 31, 1992
1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Net Assets, End of Period ($000) 24,414 24,537 22,169 26,172 25,556
Ratio of Expenses to Average Net Assets 1.24% 1.25% 1.23% 1.23% 1.22% 1
Ratio of Net Investment Income to Average Net Assets 2.33% 3.78% 2.35% 0.99% 2.04% 1
Portfolio Turnover Rate 81.66% 337.57% 102.76% 99.54% 129.44%
Average brokerage commission per share 2 $0.091 $0.0806 N/A N/A N/A
<FN>
1 Annualized
2 Represents the total dollar amount of commissions paid on portfolio
transactions divided by the total number of shares purchased and sold by the
Portfolio for which commissions were charged.
</FN>
</TABLE>
<TABLE>
<CAPTION>
UTILITY STOCK PORTFOLIO
For The Period
For The Year Ended June 21, 1995 *
December 31, 1996 to December 31, 1995
<S> <C> <C>
Net Assets, End of Period ($000) 7,964 4,291
Ratio of Expenses to Average Net Assets 1.61% 2.32% 1
Ratio of Net Investment Income to Average Net Assets 2.24% 2.09% 1
Ratio of Expenses to Average Net Assets before directed brokerage payments 1.66% 2.40% 1
Ratio of Net Investment Income to Average Net Assets before
directed brokerage payments 2.19% 2.01% 1
Portfolio Turnover Rate 50.79% 5.06%
Average brokerage commission per share 2 $0.060 $0.0600
<FN>
1 Annualized
2 Represents the total dollar amount of commissions paid on portfolio
transactions divided by the total number of shares purchased and sold by the
Portfolio for which commissions were charged.
* Date of commencement of operations
</FN>
See accompanying notes to financial statements
</TABLE>
B-35
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Ratios/Supplemental Data
BOND PORTFOLIO
For The Period May 1, 1992
Year Ended December 31, to December 31, 1992
1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Net Assets, End of Period ($000) 17,792 16,066 13,008 13,178 11,126
Ratio of Expenses to Average Net Assets 0.61% 0.57% 0.56% 0.60% 0.58% 1
Ratio of Net Investment Income to Average Net
Assets 4.99% 5.82% 4.15% 4.62% 5.40% 1
Ratio of Expenses to Average Net Assets, before
waiver of fees 0.68% 0.71% 0.70% 0.71% 0.80% 1
Ratio of Net Investment Income to Average Net
Assets, before waiver of fees 4.92% 5.68% 4.01% 4.51% 5.18% 1
Portfolio Turnover Rate 778.59% 232.34% 707.57% 235.74% 132.53%
<FN>
1 Annualized
</FN>
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
For The Period
May 1, 1992
Year Ended December 31, to Dec. 31, 1992
1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Net Assets, End of Period ($000) 352,930 256,126 224,523 200,148 244,272
Ratio of Expenses to Average Net Assets 0.19% 0.21% 0.19% 0.19% 0.18% 1
Ratio of Net Investment Income to Average
Net Assets 5.34% 5.87% 4.28% 3.09% 3.60% 1
Ratio of Expenses to Average Net Assets,
before waiver of fees 0.33% 0.37% 0.39% 0.40% 0.40% 1
Ratio of Net Investment Income to Average
Net Assets, before waiver of fees 5.20% 5.70% 4.08% 2.88% 3.38% 1
Portfolio Turnover Rate N/A N/A N/A N/A N/A
<FN>
1 Annualized
</FN>
See accompanying notes to financial statements
</TABLE>
B-36
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES
Each separate Portfolio (the "Portfolios") is registered under the Investment
Company Act of 1940, as amended, as a no-load, open-end management investment
company which was organized as a trust under the laws of the State of New
York. Each Declaration of Trust permits the Trustees, who are the same for all
the Portfolios, to issue beneficial interests in each Portfolio. The following
is a summary of significant accounting policies followed by the Portfolios.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Investments - Money market securities held in the Money Market Portfolio are
valued at amortized cost, which approximates market value in accordance with
Rule 2a-7 of the Investment Company Act of 1940. Money market securities held
in the four remaining Portfolios maturing more than sixty days after the
valuation date are valued at the last sales price as of the close of business
on the day of valuation, or, lacking any sales, at the most recent bid price
or yield equivalent as obtained from dealers that make markets in such
securities. When such securities are valued within sixty days or less to
maturity, the difference between the valuation existing on the sixty-first day
before maturity and maturity value is amortized on a straight-line basis to
maturity. Securities maturing within sixty days from their date of acquisition
are valued at amortized cost.
Securities which are traded on stock exchanges are valued at the last sales
price as of the close of business of the New York Stock Exchange on the day of
valuation, or, lacking any sales, at the closing bid prices. Securities traded
on the over-the-counter market are valued at the most recent bid price or
yield equivalent as obtained from one or more dealers that make markets in
such securities. Mutual funds are valued at the daily redemption value
determined by the underlying fund. Valuations in The Bond Portfolio are
determined as of 3:00 p.m. Eastern time.
Repurchase Agreements - It is the Portfolios' policy to take possession of the
collateral for repurchase agreements before payment is made to the seller.
Market value of the collateral must be at least 100% of the amount of the
repurchase agreement.
B-37
<PAGE>
Options & Futures - Each Portfolio except the Money Market Portfolio may
engage in transactions in financial futures contracts and options as a hedge
against the change in market value of the securities held in the portfolio, or
which it intends to purchase. The expectation is that any gain or loss on such
transactions will be substantially offset by any gain or loss on the
securities in the underlying portfolio or on those which are being considered
for purchase.
To the extent that the Portfolio enters into futures contracts on an index or
group of securities the Portfolio exposes itself to an indeterminate liability
and will be required to pay or receive a sum of money measured by the change
in the market value of the index. Upon entering into a futures contract the
Portfolio is required to deposit either cash or securities in an amount
("initial margin") equal to a certain percentage of the contract value.
Subsequent payments ("variation margin") equal to changes in the daily
settlement price or last sale on the exchanges where they trade are paid or
received each day and are recorded as a gain or loss on futures contracts.
Call and put option contracts involve the payment of a premium for the right
to purchase or sell an individual security or index aggregate at a specified
price until the expiration of the contract. Such transactions expose the
Portfolio to the loss of the premium paid if the Portfolio does not sell or
exercise the contract prior to the expiration date. In the case of a call
option, sufficient cash or money market instruments will be segregated to
complete the purchase. Options are valued on the basis of the daily settlement
price or last sale on the exchanges where they trade and the changes in value
are recorded as an unrealized gain or loss until sold, exercised or expired.
In the case of a written option, premiums received by each portfolio upon
writing the option are recorded in the liability section of the Statement of
Assets and Liabilities and are subsequently adjusted to current market value.
When the written option is closed, exercised or expired, the portfolio
realizes a gain or loss and the liability is eliminated. During the period
ended December 31, 1996 the Portfolios wrote the following option contracts:
<TABLE>
<CAPTION>
GROWTH STOCK PORTFOLIO BOND PORTFOLIO
Number of Contracts Number of Premiums Number of Contracts Number of Premiums
<S> <C> <C> <C> <C>
Outstanding at Beginning of Period 3,300 $4,881,362 20 $10,850
Options Written - - - -
Options Terminated (3,300) (4,881,362) (20) (10,850)
====== ========== ===== ========
Outstanding at End of Period 0 $0 0 $0
</TABLE>
B-38
<PAGE>
Income Taxes - It is the Portfolios' policy to comply with the requirements of
the Internal Revenue Code applicable to it. Therefore, no Federal income tax
provision is required.
Organizational Costs - The costs related to the organization of each of the
five Portfolios have been deferred and are being amortized by each Portfolio
on a straight-line basis over a five-year period.
Other - The Portfolios follow industry practice and record security
transactions on the trade date. Gains and losses on security transactions are
determined on the specific identification basis. Dividend income is recognized
on the ex-dividend date, and interest income (including amortization of premium
and discount) is recognized as earned.
2. INVESTMENT ADVISORY, AND OTHER AGREEMENTS WITH AFFILIATES
R. Meeder & Associates (RMA), a wholly-owned subsidiary of Muirfield
Investors, Inc. (MII), provides the Portfolios with investment management,
research, statistical and advisory services, and pays certain other expenses
of the Portfolios. Miller/Howard Investments, Inc. (Subadviser) serves as the
Utilities Stock Portfolio's Subadviser under an Investment Subadvisory
Agreement between RMA and the Subadviser. For such services the Portfolios pay
monthly a fee based upon the average daily value of each Portfolios' net
assets at the following annual rates: Mutual Fund, Growth Stock, and Utilities
Stock Portfolio, 1% of average net assets up to $50 million, 0.75% of average
net assets exceeding $50 million up to $100 million and 0.60% of average net
assets exceeding $100 million; Bond Portfolio, 0.40% of average net assets up
to $100 million and 0.20% of average net assets exceeding $100 million; Money
Market Portfolio, 0.40% of average net assets up to $100 million and 0.25% of
average net assets exceeding $100 million. During the year ended December 31,
1996, RMA voluntarily waived a portion of its investment advisory fees in the
Money Market and Bond Portfolios.
Mutual Funds Service Co., (MFS), a wholly-owned subsidiary of MII, serves as
accounting services agent for all of the Portfolios. The minimum annual fee
for all such services for the Mutual Fund, Growth Stock, Bond, and Utilities
Stock Portfolios is $7,500. Subject to the applicable minimum fee, each
Portfolio's annual fee, payable monthly, is computed at the rate of 0.15% of
the first $10 million, 0.10% of the next $20 million, 0.02% of the next $50
million, and 0.01% in excess of $80 million of the respective Portfolio's
average net assets. In the Money Market Portfolio the minimum annual fee for
accounting services is $30,000. Subject to the applicable minimum fee, the
Money Market Portfolio's annual fee, payable monthly, is computed at the rate
of 0.15% of the first $10 million, 0.10% of the next $20 million, 0.02% of the
next $50 million and 0.01% in excess of $80 million of the Portfolio's average
net assets.
Certain officers and/or trustees of the Funds and each Portfolio are officers
and/or directors of MII, RMA and MFS.
B-39
<PAGE>
3. PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, excluding short-term investments and U.S.
Government and agency obligations for the year ended December 31, 1996 were as
follows:
<TABLE>
<CAPTION>
Purchases Sales
<S> <C> <C>
Mutual Fund Portfolio $127,926,031 $179,435,771
Growth Stock Portfolio $ 2,990,564 $ 792,118
Utilities Stock Portfolio $ 5,484,900 $ 3,084,727
</TABLE>
As of December 31, 1996, the aggregate cost of investments and net unrealized
appreciation (depreciation) for Federal income tax purposes was comprised of
the following:
<TABLE>
<CAPTION>
Net Unrealized
Unrealized Unrealized Appreciation
Investment Appreciation Depreciation (Depreciation)
Cost of Investments of Investments of Investments
<S> <C> <C> <C> <C>
Mutual Fund Portfolio $136,682,286 $1,034,293 $(484,688) $549,605
Growth Stock Portfolio $21,399,766 $3,267,845 $(104,329) $3,163,516
Bond Portfolio $13,720,625 $54 $(114,617) $(114,563)
Utilities Stock Portfolio $7,167,239 $902,962 $(123,235) $779,727
</TABLE>
B-40
<PAGE>
Independent Auditors' Report
To the Shareholders and Board of Trustees of the Mutual Fund Portfolio, Growth
Stock Portfolio, Utilities Stock Portfolio, Bond Portfolio, and Money Market
Portfolio:
We have audited the accompanying statements of assets and liabilities of the
Mutual Fund Portfolio, Growth Stock Portfolio, Utilities Stock Portfolio, Bond
Portfolio and Money Market Portfolio, including the portfolios of investments,
as of December 31, 1996, and the related statements of operations, statements
of changes in net assets and the financial highlights for each of the periods
indicated herein. These financial statements and the financial highlights are
the responsibility of the Portfolios' 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 verification of securities
owned as of December 31, 1996, by correspondence with the custodian and other
appropriate audit procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Mutual Fund Portfolio, Growth Stock Portfolio, Utilities Stock Portfolio, Bond
Portfolio and Money Market Portfolio at December 31, 1996, the results of
their operations, the changes in their net assets and the financial highlights
for each of the periods indicated herein, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
January 31, 1997
B-41
<PAGE>
PART C
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS
The following report and financial statement are included in Part B:
Portfolio of Investments - December 31, 1996; Statements of Assets and
Liabilities - December 31, 1996; Statements of Operations - for the
year ended December 31, 1996; Statements of Changes in Net Assets for
the periods ended December 31, 1996 and 1995; Financial Highlights for
the periods indicated therein; Notes to Financial Statements;
Independent Auditors' Report dated January 31, 1997.
(b) Exhibits
*1. Declaration of Trust of the Registrant.
*2. By-Laws of the Registrant.
*5. Form of Investment Advisory Agreement between the Registrant and
R. Meeder & Associates, Inc.
*6. Form of Exclusive Placement Agent Agreement between the
Registrant and Signature Broker-Dealer Services, Inc.
**8. Form of Custody Agreement between the Registrant and Star Bank,
N.A., Cincinnati.
**9. (a) Form of Administration Agreement between the
Registrant and Mutual Funds Service Co. (MFSCo)
(b) Form of Accounting Services Agreement between
the Registrant and MFSCo.
11. Consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants, filed herewith.
**13. Investment representation letters of initial investors.
19. Powers of Attorney of Trustees of Registrant -- previously filed
and incorporated herein by reference; however, Powers of Attorney
of new Trustees of Registrant are filed herewith.
- -------------------
*Filed April 30, 1992 and incorporated herein by reference.
**Filed June 8, 1992 and incorporated herein by reference.
C-1
<PAGE>
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Beneficial Interests 2 (as of December 31, 1996)
ITEM 27. INDEMNIFICATION.
Reference is hereby made to Article V of the Registrant's Declaration of
Trust, filed as Exhibit 1 to Registrant's initial Registration Statement on
April 30, 1992.
The Trustees and officers of the Registrant are insured under an errors and
omissions liability insurance policy and under the fidelity bond required by
Rule 17g-1 under the Investment Company Act of 1940 (the "1940 Act").
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Not applicable.
ITEM 29. PRINCIPAL UNDERWRITERS.
Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:
NAME ADDRESS
R. Meeder & Associates, Inc. 6000 Memorial Drive
(investment adviser) Dublin, OH 43017
Mutual Funds Service Co. 6000 Memorial Drive
(transfer and accounting services Dublin, OH 43017
agent)
Star Bank, N.A., Cincinnati Star Bank Center
(custodian) 425 Walnut Street
Cincinnati, OH 45202
C-2
<PAGE>
ITEM 31. MANAGEMENT SERVICES.
Not applicable.
ITEM 32. UNDERTAKINGS.
Not applicable.
C-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment to its Registration Statement on Form
N-1A to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Dublin and State of Ohio on the 29th day of April, 1997.
BOND PORTFOLIO
By /s/ Donald F. Meeder
-----------------------
Donald F. Meeder
Secretary/Treasurer
EXHIBIT 11
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Trustees of
Bond Portfolio:
We consent to the use of our report included herein dated January 31, 1997 on
the financial statements of the Mutual Fund Portfolio, Growth Stock Portfolio,
Utilities Stock Portfolio, Bond Portfolio and Money Market Portfolio as of
December 31, 1996 and for the periods indicated therein and to the reference to
our firm under the heading "Independent Accountants" in Part B of the
Registration Statement.
KPMG Peat Marwick LLP
Columbus, Ohio
April 28, 1997
EXHIBIT 19
POWERS OF ATTORNEY
THE PORTFOLIOS
The undersigned hereby constitutes and appoints Donald F. Meeder, Philip A.
Voelker and James B. Craver, and each of them, with full powers of substitution
as his true and lawful attorneys and agents to execute in his name and on his
behalf in any and all capacities the Registration Statements on Form N-1A, and
any and all amendments thereto, filed by the Money Market, Mutual Fund, Growth
Stock, Bond and Utilities Stock Portfolios (the "Portfolios") The Flex-Partners
or The Flex-funds (each a "Trust") with the Securities and Exchange Commission
under the Investment Company Act of 1940 and the Securities Act of 1933 and any
and all instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Portfolios or the Trusts to comply with
such Acts, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction and the undersigned hereby ratifies and confirms as his own act and
deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents have,
and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 22nd day
of April, 1997.
/s/ John M. Emery
---------------------------------
John M. Emery
<PAGE>
THE PORTFOLIOS
The undersigned hereby constitutes and appoints Donald F. Meeder, Philip A.
Voelker and James B. Craver, and each of them, with full powers of substitution
as his true and lawful attorneys and agents to execute in his name and on his
behalf in any and all capacities the Registration Statements on Form N-1A, and
any and all amendments thereto, filed by the Money Market, Mutual Fund, Growth
Stock, Bond and Utilities Stock Portfolios (the "Portfolios") The Flex-Partners
or The Flex-funds (each a "Trust") with the Securities and Exchange Commission
under the Investment Company Act of 1940 and the Securities Act of 1933 and any
and all instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Portfolios or the Trusts to comply with
such Acts, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction and the undersigned hereby ratifies and confirms as his own act and
deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents have,
and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 22nd day
of April, 1997.
/s/ Richard A. Farr
---------------------------------
Richard A. Farr
<PAGE>
THE PORTFOLIOS
The undersigned hereby constitutes and appoints Donald F. Meeder, Wesley F.
Hoag and James B. Craver, and each of them, with full powers of substitution as
his true and lawful attorneys and agents to execute in his name and on his
behalf in any and all capacities the Registration Statements on Form N-1A, and
any and all amendments thereto, filed by the Money Market, Mutual Fund, Growth
Stock, Bond and Utilities Stock Portfolios (the "Portfolios") The Flex-Partners
or The Flex-funds (each a "Trust") with the Securities and Exchange Commission
under the Investment Company Act of 1940 and the Securities Act of 1933 and any
and all instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Portfolios or the Trusts to comply with
such Acts, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction and the undersigned hereby ratifies and confirms as his own act and
deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents have,
and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 22nd day
of April, 1997.
/s/ William L. Gurner
---------------------------------
William L. Gurner
<PAGE>
THE PORTFOLIOS
The undersigned hereby constitutes and appoints Donald F. Meeder, Wesley F.
Hoag and James B. Craver, and each of them, with full powers of substitution as
his true and lawful attorneys and agents to execute in his name and on his
behalf in any and all capacities the Registration Statements on Form N-1A, and
any and all amendments thereto, filed by the Money Market, Mutual Fund, Growth
Stock, Bond and Utilities Stock Portfolios (the "Portfolios") The Flex-Partners
or The Flex-funds (each a "Trust") with the Securities and Exchange Commission
under the Investment Company Act of 1940 and the Securities Act of 1933 and any
and all instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Portfolios or the Trusts to comply with
such Acts, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction and the undersigned hereby ratifies and confirms as his own act and
deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents have,
and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 22nd day
of April, 1997.
/s/ Lowell G. Miller
---------------------------------
Lowell G. Miller
<PAGE>
THE PORTFOLIOS
The undersigned hereby constitutes and appoints Donald F. Meeder, Wesley F.
Hoag and James B. Craver, and each of them, with full powers of substitution as
his true and lawful attorneys and agents to execute in his name and on his
behalf in any and all capacities the Registration Statements on Form N-1A, and
any and all amendments thereto, filed by the Money Market, Mutual Fund, Growth
Stock, Bond and Utilities Stock Portfolios (the "Portfolios") The Flex-Partners
or The Flex-funds (each a "Trust") with the Securities and Exchange Commission
under the Investment Company Act of 1940 and the Securities Act of 1933 and any
and all instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Portfolios or the Trusts to comply with
such Acts, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction and the undersigned hereby ratifies and confirms as his own act and
deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents have,
and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 22nd day
of April, 1997.
/s/ Robert S. Meeder, Jr.
---------------------------------
Robert S. Meeder, Jr.
<PAGE>
THE PORTFOLIOS
The undersigned hereby constitutes and appoints Donald F. Meeder, Wesley F.
Hoag and James B. Craver, and each of them, with full powers of substitution as
his true and lawful attorneys and agents to execute in his name and on his
behalf in any and all capacities the Registration Statements on Form N-1A, and
any and all amendments thereto, filed by the Money Market, Mutual Fund, Growth
Stock, Bond and Utilities Stock Portfolios (the "Portfolios") The Flex-Partners
or The Flex-funds (each a "Trust") with the Securities and Exchange Commission
under the Investment Company Act of 1940 and the Securities Act of 1933 and any
and all instruments which such attorneys and agents, or any of them, deem
necessary or advisable to enable the Portfolios or the Trusts to comply with
such Acts, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction and the undersigned hereby ratifies and confirms as his own act and
deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents have,
and may exercise, all of the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 22nd day
of April, 1997.
/s/ Roger D. Blackwell
---------------------------------
Roger D. Blackwell
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000887154
<NAME> BOND PORTFOL
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 13720625
<INVESTMENTS-AT-VALUE> 13606062
<RECEIVABLES> 4209555
<ASSETS-OTHER> 670
<OTHER-ITEMS-ASSETS> 2545
<TOTAL-ASSETS> 17818832
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 27238
<TOTAL-LIABILITIES> 27238
<SENIOR-EQUITY> 17791594
<PAID-IN-CAPITAL-COMMON> 17906157
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
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