GROWTH STOCK PORTFOLIO, POS AMI, 1997-04-29

GROWTH STOCK PORTFOLIO
POS AMI, 1997-04-29

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As filed with the Securities and Exchange Commission on April 29, 1997.

File No. 811-6647
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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT NO. 8

FORM N-1A

REGISTRATION STATEMENT

UNDER THE INVESTMENT COMPANY ACT OF 1940

GROWTH STOCK 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 Growth Stock 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.

<PAGE>

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.

Growth Stock 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 and investment subadviser are R. Meeder
& Associates, Inc. (the "Manager" or "Adviser")and Sector Capital Management,
L.L.C. (the "Subadviser"), respectively. The Portfolio seeks capital growth by
investing primarily in a diversified portfolio of domestic common stocks with
greater than average growth characteristics selected primarily from the Standard
& Poor's 500 Composite Stock Price Index (the "S&P 500"). Current income will
not be a primary objective. Under normal conditions, at least 80% of the
Portfolio's total assets will be invested in domestic common stocks and at least
65% of the Portfolio's total assets will be invested in growth stocks.

Common stocks are selected for the Portfolio from all domestic publicly
traded common stocks; however, at least 70% of the assets of the Portfolio
invested in common stocks will be invested in common stocks which are included
in the S&P 500.

The Portfolio consists of investment portfolios representing each of the
industry sectors (identified by the Subadviser) comprising the S&P 500. The
assets of the Portfolio will be allocated to each of these industry sectors in
approximately the same proportion as these industry sectors are represented in
the S&P 500 on a market capitalization-weighted basis. The Subadviser
continuously reviews the representation of the industry sectors in the S&P 500
and continuously categorizes domestic publicly traded common stocks into a
specific industry sector.

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The total market value of the common stocks in each industry sector of the
S&P 500 is compared by the Subadviser to the total market value of all common
stocks in the S&P 500 to determine each industry sector's weighting in the S&P
500. If the weighting of any industry sector in the Portfolio varies from the
weighting on a market-capitalization basis of that industry sector in the S&P
500 at the end of any month, the amount of assets in the Portfolio allocated to
that industry sector will be reallocated by the Subadviser. The Subadviser may
make a reallocation more frequently than monthly if it chooses to do so in its
sole discretion. Reallocations may result in additional transaction costs to the
extent that sales of securities as part of such reallocations result in higher
portfolio turnover.

Except as otherwise provided below, the assets of the Portfolio
representing each of these industry sectors are managed on a discretionary basis
by one or more separate investment advisers (the "Sector Advisers") selected by
the Subadviser, subject to the review and approval of the Board of Trustees of
the Portfolio.

Assets of the Portfolio representing each of the industry sectors are
managed by one or more Sector Advisers, except (i) the assets of the Portfolio
representing the health sector are managed and "indexed" by the Subadviser until
it selects one or more Sector Advisers, subject to the review and approval of
the Portfolio Trustees, to manage the assets of the Portfolio representing the
health sector and (ii) in the event a Sub-subadvisory Agreement is terminated
leaving no Sector Adviser to manage the assets of the Portfolio representing an
industry sector, the Subadviser will, upon termination and until a new Sector
Adviser were selected, manage and "index" the assets of the Portfolio
representing the applicable industry sector by selling any stocks representing
the industry sector that are not included in the S&P 500 and investing the
assets comprising the industry sector in S&P 500 stocks identified by the
Subadviser as belonging to that industry sector in the same proportion as those
stocks are represented in the S&P 500 on a market capitalization-weighted basis.

Each Sector Adviser is limited to the list of companies identified by the
Subadviser which represents the Sector Adviser's specific industry sector. Each
Sector Adviser then selects those common stocks which, in its opinion, best
represent the industry sector the Sector Adviser has been assigned. In selecting
securities for the Portfolio, the Sector Advisers evaluate factors believed to
be favorable to long-term growth of capital including specific financial
characteristics of the issuer such as historical earnings growth, sales growth,
profitability and return on equity. The Sector Advisers also analyze the
issuer's position within its industry sector as well as the quality and
experience of the issuer's management.

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Up to 20% of the Portfolio's assets may be invested in temporary
investments such as money market instruments, obligations issued or guaranteed
by the U.S. Government, its agencies and instrumentalities, and repurchase
agreements. See "Additional Investment Policies - Money Market Instruments and
Bonds." The Portfolio may purchase stock index futures contracts and related
options. See "Additional Investment Policies - Hedging Strategies and Option
Strategies". Up to 5% of the total assets of the Portfolio may be invested in
American Depositary Receipts.

As a fundamental policy, the Portfolio may not own more than 10% of the
outstanding voting shares of any issuer and with respect to 75% of the total
assets of the Portfolio, the Portfolio will not purchase a security of any
issuer (other than cash items and U.S. Government Securities, as defined in the
Investment Company Act of 1940) if such purchase would cause the Portfolio's
holdings of that issuer to amount to more than 5% of the Portfolio's total
assets.

ADDITIONAL INVESTMENT POLICIES

MONEY MARKET INSTRUMENTS AND BONDS

When investing in money market instruments or bonds, the Portfolio will
limit its purchases to the following securities:

o U.S. Government Securities and Securities of its Agencies and
Instrumentalities.

o Bank Obligations and Instruments Secured Thereby.

o High Quality Commercial Paper -- The Portfolio may invest in
commercial paper rated no lower than "A-2" by Standard & Poor's
Corporation or "Prime-2" by Moody's Investors Services, Inc., or, if
not rated, issued by a company having an outstanding debt issue rated
at least A by Standard & Poor's or Moody's.

o Private Placement Commercial Paper -- unregistered securities which
are traded in public markets to qualified institutional investors,
such as the Portfolio.

o High Grade Corporate Obligations -- obligations rated at least A by
Standard & Poor's or Moody's.

o Repurchase Agreements Pertaining to the Above -- The Portfolio may
invest in any of the above securities subject to repurchase agreements
with any Federal Reserve reporting dealer or member bank of the
Federal Reserve System. Repurchase agreements usually are for short
periods, such as one week or less, but could be longer. The Portfolio
will not invest more than 10% of its assets, at time of purchase, in
repurchase agreements which mature in excess of seven days or in other
illiquid or not readily marketable securities.

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HEDGING STRATEGIES

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 gain equity market exposure for unallocated and uninvested cash
balances of the Portfolio; (2) To protect the value of specific securities owned
or intended to be purchased while the Investment Adviser, Subadviser or a Sector
Adviser is implementing a change in the Portfolio's investment position; (3) To
protect portfolio values during periods of extraordinary risk without incurring
transaction costs associated with buying or selling actual securities; and (4)
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,
many groups of common stocks (stock market indices) may be made the subject of
futures contracts.

Derivatives are financial instruments whose performance is derived, at
least in part, from the performance of an underlying asset, security or index.
Accordingly, these financial futures contracts or related options used by the
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.

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 in the Portfolio, securities which it
intends to purchase or to gain market exposure for unallocated and uninvested
cash balances. The Portfolio will only enter in such transactions when they are
economically appropriate to meeting portfolio investment objectives and 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 a mutual fund, such as the
Fund. 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

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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.

The Portfolio may not purchase or sell financial 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. There can be no guaranty that the
Portfolio will be able to realize this objective and, as noted below under "Risk
Factors," there are some risks in utilizing a hedging strategy.

OPTION STRATEGIES

The Portfolio may write (sell) covered call options. The purpose of such
transactions is to: (1) hedge against changes in the market value of specific
securities held by the Portfolio; and/or (2) to generate incremental income by
capturing the proceeds of options sold.

The Portfolio may write (sell) call options, but only if such options are
covered and remain covered as long as the Portfolio is obligated as a writer of
the option (seller). A call option is "covered" if the Portfolio owns the
underlying security covered by the call. If a "covered" call option expires
un-exercised, the writer realizes a gain in the amount of the premium received.
If the covered call option is exercised, the writer realizes either a gain or a
loss from the sale of the underlying security with the proceeds to the writer
being increased by the amount of the premium. Prior to its expiration, a call
option may be closed out by means of a purchase of an identical option. Any gain
or loss from such transaction will depend on whether the amount paid is more or
less than the premium received for the option plus related transaction costs.

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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.

R. Meeder & Associates, Inc., has been an adviser to individuals and
retirement plans since 1974 and has served as investment adviser to registered
investment companies since 1982. The Manager 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
Manager invests the Portfolio's liquidity reserves and may invest the
Portfolio's financial futures contracts and related options.

The Manager 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 ownership of voting common stock. MII conducts
business only through its six subsidiaries which are the Manager; Mutual Funds
Service Co., the Portfolio's transfer agent; 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 Manager's officers and directors are as follows: Robert S. Meeder, Sr.,
Chairman and Sole Director; Robert S. Meeder, Jr., President; 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.

Philip A. Voelker is primarily responsible for managing the liquidity
reserve of the Portfolio and managing the futures contracts and related options
of the Portfolio on behalf of the Manager. Mr. Voelker is a Vice President and
Trustee of the Portfolio, Vice President and Trustee of The Flex-funds and The
Flex-Partners and Senior Vice President and Chief Operating Officer of the
Manager. Mr. Voelker has been associated with the Manager since 1975.

The Manager earns an annual fee, payable in monthly installments, at the
rate of 1% of the first $50 million, 0.75% of the next $50 million and 0.60% in
excess of $100 million of the Portfolio's average net assets.

All compensation to the Manager will be shared by the Subadviser and the
Manager out of the Manager's fee from the Portfolio in accordance with a formula
such that the Manager will receive 70% and the Subadviser 30% of the fee payable
with respect to the net assets of the Portfolio upon effectiveness of the
subadvisory arrangement; then the Subadviser will receive 70% and the Manager
30% of the fee attributable to any additional net assets of the Portfolio up to
an amount of net assets equal to the net assets at effectiveness of the
subadvisory arrangement, then the Manager and the Subadviser will share equally
the fee attributable to any additional net assets of the Portfolio up to $50
million of the net assets. With respect to net assets of more than $50 million
and less than $100 million, the applicable fee of 0.75% will be shared such that
the Manager will receive 0.35% and the Subadviser 0.40%. For net assets of $100
million and more, the applicable 0.60% fee will be shared such that the Manager
will receive 0.25% and Subadviser 0.35%.

Accounting, stock transfer, dividend disbursing, and shareholder services
are provided to the Portfolio by Mutual Funds Service Co., 6000 Memorial Drive,
Dublin, Ohio 40317, a wholly-owned subsidiary of MII. The minimum annual fee,
payable monthly, for accounting services in the Portfolio is $7,500. Subject to
the applicable minimum fee, the fee 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.

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For the year ended December 31, 1996, total payments to Mutual Funds
Service Co. amounted to $30,867 for the Portfolio.

SUBADVISER

Sector Capital Management, L.L.C. (the "Subadviser"), 5350 Poplar Avenue,
Suite 490, Memphis, Tennessee 38119, serves as the Growth Stock Portfolio's
subadviser under an Investment Subadvisory Agreement among the Portfolio, the
Manager and the Subadviser. The Subadviser furnishes investment advisory
services in connection with the management of the Growth Stock Portfolio.

The Subadviser is a Georgia limited liability company that has been a
registered investment adviser to individuals, pension and profit sharing plans,
trusts, charitable organizations, corporations and other institutions since
January, 1995. As of December 31, 1996, the Subadviser held discretionary
investment authority over approximately $96 million of assets. The Subadviser is
controlled by William L. Gurner and John K. Donaldson. Mr. Gurner is primarily
responsible for the day-to-day management of the Portfolio through interaction
with each of the Sector Advisers. Mr. Gurner is also primarily responsible for
managing the futures contracts and related options of the Portfolio on behalf of
the Subadviser. Mr. Gurner has been associated with the Subadviser since its
inception in January, 1995. Mr. Gurner, President, Administrator, Manager and a
Member of the Subadviser, is a trustee of The Growth Stock Portfolio, The
Flex-funds and The Flex-Partners, mutual funds whose corresponding portfolios
are also advised by the Manager.

The Subadviser and the Portfolio have entered into a Sub-subadvisory
Agreement with each Sector Adviser selected for the Portfolio. It is the
Subadviser's responsibility to select, subject to the review and approval of the
Board of Trustees, the Sector Advisers who have distinguished themselves by able
performance in respective areas of expertise in sector management and to review
their continued performance. In addition, it is the Subadviser's responsibility
to categorize publicly traded domestic common stocks into a specific industry
sector. The Subadviser may also invest the Portfolio's financial futures
contracts and related options.

Subject to the supervision and direction of the Portfolio's Board of
Trustees, the Subadviser provides to the Portfolio investment management
evaluation services principally by performing initial due diligence on
prospective Sector Advisers for the Portfolio and thereafter monitoring Sector
Adviser performance through quantitative and qualitative analysis as well as
periodic in-person, telephonic and written consultations with Sector Advisers.
In evaluating prospective Sector Advisers, the Subadviser considers among other
factors, each Sector Advisers level of expertise; relative performance and

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consistency of performance, level of adherence to investment discipline or
philosophy; personnel, facilities and financial strength; and quality of service
and client communications. The Subadviser has responsibility for communicating
performance expectations and evaluations to Sector Advisers and ultimately
recommending to the Board of Trustees of the Portfolio whether Sector Advisers'
contracts should be renewed, modified, or terminated. The Subadviser provides
reports to the Portfolio's Board of Trustees regarding the results of its
evaluation and monitoring functions.

The Subadviser pays each Sector Adviser a fee for its investment advisory
services that is computed daily and paid monthly based on the value of the
average net assets of the Portfolio assigned by the Subadviser to the Sector
Adviser at an annual rate equal to 0.25%.

Investors should be aware that the Subadviser may be subject to a conflict
of interest when making decisions regarding the retention and compensation of
particular Sector Advisers. However, the Subadviser's decisions regarding the
selection of Sector Advisers and specific amount of the compensation to be paid
to Sector Advisers, are subject to review and approval by a majority of the
Board of Trustees of the Portfolio.

Although the Subadviser and the Sector Advisers' activities are subject to
general oversight by the Board of Trustees and the officers of the Portfolio,
neither the Board nor the officers evaluate the investment merits of any Sector
Adviser's individual security selections. The Board of Trustees will review
regularly the Portfolio's performance compared to the applicable indices and
also will review the Portfolio's compliance with its investment objectives and
policies.

While the investment professionals of the Subadviser have experience in
asset management and the selection of investment advisers, prior to the
Subadviser becoming the subadviser to the Portfolio, on December 31, 1996, it
did not have previous experience in providing investment advisory services to an
investment company.

The Portfolio intends to file an exemptive order application (the
"Application") with the Securities and Exchange Commission (the "SEC") seeking
an exemption from Section 15(a)(1) of the Investment Company Act of 1940 to the
extent necessary to permit the Portfolio and the Subadviser to enter into
Investment Subadvisory Agreements with each Sector Adviser without such
agreements being approved by the shareholders of the Portfolio except for
Investment Subadvisory Agreements with an affiliated person of the Portfolio,
the Manager or the Subadviser other than by reason of such affiliated person
serving as an existing Sector Adviser to the Portfolio. Applicable orders

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granted by the SEC to other investment companies seeking similar exemptions have
required as a condition to granting the order that the investment company obtain
shareholder approval for such a policy. The Portfolio expects that the SEC will
impose the same condition on the Portfolio and accordingly on December 20, 1996,
at a Special Meeting of the shareholders of the Portfolio, the shareholders
approved a proposal to allow the Portfolio and the Subadviser to enter into
Investment Subadvisory Agreements with Sector Advisers without such agreements
being approved by the shareholders of the Portfolio. In addition, the
Portfolio's Application will likely include the condition that within 90 days of
the hiring of any new Sector Advisers and executing a new Investment Subadvisory
Agreement, the Subadviser will furnish shareholders with an information
statement about the new Sector Adviser and Investment Subadvisory Agreement.
There is no guarantee that the SEC will grant the Portfolio's application for
exemptive relief. Any changes to the Investment Advisory Contract between the
Portfolio and the Manager or the Investment Subadvisory Agreement between the
Portfolio, Manager and Subadviser still require shareholder approval. In
accordance with the terms of the application for exemption, a majority of the
shareholders of the Fund have approved the operation of the Trust in accordance
with the exemption.

SECTOR ADVISERS: The Sector Advisers have agreed to an investment advisory
fee based on the average net assets of the Portfolio assigned to them by the
Subadviser at an annual rate equal to .25%, which is generally lower than the
fees they charge to institutional accounts for which they serve as investment
adviser, and for which they perform all administrative responsibilities.

Subject to the supervision and direction of the Subadviser and, ultimately,
the Board of Trustees of the Portfolio, each Sector Adviser's responsibilities
are limited to managing its portion of the securities held by the Portfolio in
accordance with the Portfolio's stated investment objective and policies, making
investment decisions for the Portfolio and placing orders to purchase and sell
securities on behalf of the Portfolio.

The following sets forth certain information about each of the Sector
Advisers:

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respectively, Miller/Howard's President, Secretary and a director and its Vice
President, Treasurer and a director, each own more than 10% of the outstanding
voting securities of Miller/Howard. Mr. Miller is the portfolio manager
primarily responsible for the day-to-day management of those assets of the
Portfolio allocated to Miller/Howard. Mr. Miller has been associated with
Miller/Howard since 1984. Mr. Miller is a a Trustee of the Growth Stock
Portfolio, a Trustee and a Vice President of The Flex-funds and a trustee and a
Vice President of The Flex-Partners, mutual funds whose corresponding portfolios
are also advised by the Manager. Miller/Howard's principal executive offices are
located at 141 Upper Byrdcliffe Road, Post Office Box 549, Woodstock, New York,
12498.

HALLMARK CAPITAL MANAGEMENT, INC. serves as Sector Adviser to the capital
goods sector of the Portfolio. Hallmark is a registered investment adviser which
has been providing investment services to individuals; banks; pension, profit
sharing, and other retirement plans; trusts; endowments; foundations; and other
charitable organizations since 1986. As of December 31, 1996, Hallmark held
discretionary investment authority over approximately $120 million of assets.
Peter S. Hagerman owns more than 10% of the outstanding voting securities of
Hallmark. Mr. Hagerman, Chairman of the Board, President, and Chief Executive
Officer, Thomas S. Moore, Senior Vice President and Chief Investment Officer,
and Kathryn A. Skwieralski, Senior Vice President, Treasurer, Chief Financial
and Administrative Officer, are the directors of Hallmark. Mr. Hagerman is the
portfolio manager primarily responsible for the day-to-day management of those
assets of the Portfolio allocated to Hallmark. Mr. Hagerman has been associated
with Hallmark since 1986. Hallmark's principal executive offices are located at
One Greenbrook Corporate Center, 100 Passaic Avenue, Fairfield, New Jersey,
07004.

BARROW, HANLEY, MEWHINNEY & STRAUSS, INC. serves as Sector Adviser to the
consumer durable and non-durable sectors of the Portfolio. Barrow is a
registered investment adviser which has been providing investment services to
banks; investment companies; pension and profit sharing plans; charitable
organizations and corporations since 1979. As of December 31, 1996, Barrow held
discretionary investment authority over approximately $20.5 billion of assets.
Barrow is a wholly-owned subsidiary of United Asset Management. Bryant M.
Hanley, Jr., President and Chief Executive Officer, is the sole director of
Barrow. Michael C. Mewhinney is the portfolio manager primarily responsible for
the day-to-day management of those assets of the Portfolio allocated to Barrow.
Mr. Mewhinney has been associated with Barrow since 1979. Barrow's principal
executive offices are located at 3232 McKinney Avenue, 15th Floor, Dallas,
Texas, 75204-2429.

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THE MITCHELL GROUP, INC. serves as Sector Adviser to the energy sector of
the Portfolio. The Mitchell Group is a registered investment adviser which has
been providing investment services to individuals; banks; investment companies;
pension and profit sharing plans; charitable organizations, corporations and
other institutions since 1989. As of December 31, 1996, The Mitchell Group held
discretionary investment authority over approximately $245 million of assets.
Rodney Mitchell, President, Chief Executive Officer, Chief Investment Officer
and sole director, owns more than 10% of the outstanding voting securities of
The Mitchell Group. Mr. Mitchell is the portfolio manager primarily responsible
for the day-to-day management of those assets of the Portfolio allocated to The
Mitchell Group. Mr. Mitchell has been associated with The Mitchell Group since
1989. The Mitchell Group's principal executive offices are located at 1100
Louisiana, #4810, Houston, Texas, 77002.

ASHLAND MANAGEMENT INCORPORATED serves as Sector Adviser to the materials
and services sector of the Portfolio. Ashland is a registered investment adviser
which has been providing investment services to individuals, pension and profit
sharing plans, charitable organizations, corporations and other institutions
since 1975. As of December 31, 1996, Ashland managed accounts having a value of
approximately $1.45 billion of assets. Charles C. Hickox, Chairman of the Board,
Chief Executive Officer and a director, and Perry v.S. Jones, President, Chief
Operating Officer and a director, each owns more than 10% of the outstanding
voting securities of Ashland. Terence J. McLaughlin, Managing Director of
Ashland and Deborah C. Ohl, a Portfolio Management Associate, are the portfolio
managers primarily responsible for the day-to-day management of those assets of
the Portfolio allocated to Ashland. Mr. McLaughlin has been associated with
Ashland since 1984. Ms. Ohl has been employed by Ashland since August, 1992 and
has served as a Portfolio Management Associate for Ashland since 1993. From May,
1991 until July, 1992, Ms. Ohl was a research and sales assistant with Kidder,
Peabody & Co., Incorporated. Ashland's principal executive offices are located
at 26 Broadway, New York, New York, 10004.

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Dreman are James R. Neal, President and Chief Executive Officer of Dreman, John
E. Neal, President of Kemper Funds Group, a unit of Zurich Kemper, Stephen B.
Timbers, President, Chief Executive Officer and Chief Investment Officer of
Zurich Kemper, and David N. Dreman, Chairman of the Board of Dreman. Jonathan
Kay is the portfolio manager primarily responsible for the day-to-day management
of those assets of the Portfolio allocated to Dreman. Mr. Kay has been
associated with Dreman since 1993. From 1990 to 1993, Mr. Kay was an associate
with J.S. Eliezer, a management consulting firm serving primarily the media
industry. Dreman's principal executive offices are located at 280 Park Avenue,
40th Floor, New York, NY 10017.

RCM CAPITAL MANAGEMENT, L.L.C. serves as Sector Adviser to the technology
sector of the Portfolio. RCM is a registered investment adviser that provides
investment services to institutional and individual clients and registered
investment companies, with approximately $25.6 billion of assets under
management as of December 31, 1996. RCM was established in April 1996, as the
successor to the business operations of RCM Capital Management, a California
Limited Partnership, which, with its predecessors, has been in operation since
1970. RCM is a wholly owned subsidiary of Dresdner Bank AG ("Dresdner"), an
international banking organization with principal executive offices in
Frankfurt, Germany. The Board of Managers of RCM is comprised of William L.
Price, Chairman of the Board, Chief Investment Officer and Principal of RCM,
Michael J. Apatoff, President, Chief Operating Officer and Principal of RCM,
Hans-Dieter Bauernfeind, General Manager of Dresdner, Gerhard Eberstadt, Senior
Chairman of Dresdner, George N. Fugelsang, Senior General Manager of Dresdner,
John D. Leland, Jr., Principal of RCM, Jeffrey S. Rudsten, Principal of RCM,
William S. Stack, Principal of RCM and Kenneth B. Weeman, Jr., Prinicpal and
Head of Equity Trading of RCM. Walter C. Price and Huachen Chen, each Principals
of RCM, are the portfolio managers primarily responsible for the day-to-day
management of those assets of the Portfolio allocated to RCM. Messrs. Price and
Chen have managed equity portfolios on behalf of RCM since 1985. RCM's principal
executive offices are located at Four Embarcadero Center, San Francisco, CA
94111.

A-13
<PAGE>

RCM believes that it may perform the services contemplated by the investment
management agreement without violating these banking law regulations. However,
future changes in legal requirements relating to the permissible activities of
banks and their affiliates at will as future interpretations of current
requirements, could prevent RCM from continuing to perform investment management
services for the Portfolio.

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;
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

A-14
<PAGE>

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
N.Y.S.E. 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.

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.

A-15
<PAGE>

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 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.

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.

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 return 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

A-16
<PAGE>

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.

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 N.Y.S.E. 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.

A-17
<PAGE>

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-13
Control Persons and Principal Holders of Securities . B-17
Investment Advisory and Other Services . . . . . . . B-17
Brokerage Allocation and Other Practices . . . . . . B-26
Capital Stock and Other Securities . . . . . . . . . B-29
Purchase, Redemption and Pricing of Securities . . . B-31
Tax Status . . . . . . . . . . . . . . . . . . . . . B-32
Underwriters . . . . . . . . . . . . . . . . . . . . B-32
Calculation of Performance Data . . . . . . . . . . . B-32
Financial Statements . . . . . . . . . . . . . . . . B-33

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 Growth Stock Portfolio (the "Portfolio"). This Part B should
only be read in conjunction with Part A.

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.

The portfolio turnover rate for the Portfolio was 82% for the year ended
December 31, 1996 (338% in 1995).

B-1
<PAGE>

The Growth Stock Portfolio began the year fully invested in the stock
market. For approximately two months (early March through early May) 50% of the
Portfolio's assets were invested defensively in money market securities. Also,
in the period from mid-July through October, various portions of the Portfolio
were invested defensively in cash equivalents and/or Treasury Bonds. The periods
of defensive positions in March-May and July-October were in response to
technical weakness and negative trends in the equity markets.

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 300% in the
current year.

The Portfolio intends to comply with the short-term trading restrictions of
Subchapter M of the Internal Revenue Code of 1986, as amended, although these
restrictions could inhibit a rapid change in the Portfolio's investments. The
Portfolio will strive for a positive investment return each calendar year.

MONEY MARKET INSTRUMENTS AND BONDS

When investing in money market instruments or bonds, 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.

o Bank Obligations and Instruments Secured Thereby -- obligations
(including certificates of deposit, time deposits and bankers'
acceptances) of domestic banks having total assets of $1,000,000,000
or more, instruments secured by such obligations and obligations of
foreign branches of such banks, if the domestic parent bank is
unconditionally liable to make payment on the instrument if the
foreign branch fails to make payment for any reason. The Portfolio may
also invest in obligations (including certificates of deposit and
bankers' acceptances) of domestic branches of foreign banks having
assets of $1,000,000,000 or more, if the domestic branch is subject to
the same regulation as United States banks. The Portfolio will not
invest at time of purchase more than 25% of its assets in obligations
of banks, nor will the Portfolio invest more than 10% of its assets in
time deposits.

B-2
<PAGE>

o High Quality Commercial Paper -- the Portfolio may invest in
commercial paper rated no lower than "A-2" by Standard & Poor's
Corporation ("Standard & Poor's") or "Prime-2" by Moody's Investors
Service, Inc. ("Moody's"), or, if not rated, issued by a company
having an outstanding debt issue rated at least A by Standard & Poor's
or Moody's.

o Private Placement Commercial Paper -- private placement commercial
paper ("Rule 144A securities") consists of unregistered securities
which are traded in public markets to qualified institutional
investors, such as the Portfolio. The Portfolio's risk is that the
universe of potential buyers for the securities, should the Portfolio
desire to liquidate a position, is limited to qualified dealers and
institutions, and therefore such securities could have the effect of
being illiquid. A position in such Rule 144A securities would
ordinarily be subject to a 10% limitation. The Board of Trustees of
the Portfolio has identified the market for, and the categories of
qualified buyers of, Rule 144A securities and has determined that it
is sufficient to consider such securities to be liquid and not subject
to the 10% illiquid asset limitation. The Trustees have determined
that the Portfolio may invest up to 35% of its assets, at cost on the
date of purchase, in private placement commercial paper.

o High Grade Corporate Obligations -- obligations rated at least A by
Standard & Poor's or by Moody's. See rating information below.

o Repurchase Agreements Pertaining to the Above -- the Portfolio may
invest without limit in any of the above securities subject to
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 repurchase 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

B-3
<PAGE>

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
not invest more than 10% of its assets, at time of purchase, in
repurchase agreements which mature in excess of seven days.

ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they are
valued. Under the supervision of the Board of Trustees, the Manager, Subadviser
and/or Sector Advisers determine the liquidity of the Portfolio's investments
and, through reports from the Manager, Subadviser and/or Sector Advisers, the
Board monitors investments in illiquid instruments. In determining the liquidity
of the Portfolio's investments, the Manager, Subadviser and Sector Advisers may
consider various factors, including (1) the frequency of trades and quotations,
(2) the number of dealers and prospective purchasers in the marketplace, (3)
dealer undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for trades
(including the ability to assign or offset the Portfolio's rights and
obligations relating to the investment). Investments currently considered by the
Portfolio to be illiquid include repurchase agreements not entitling the holder
to payment of principal and interest within seven days, over-the-counter
options, and non-government stripped fixed-rate mortgage-backed securities.
Also, the Manager, Subadviser and/or Sector Advisers may determine some
restricted securities to be illiquid. However, with respect to over-the-counter
options the Portfolio writes, all or a portion of the value of the underlying
instrument may be illiquid depending on the assets held to cover the option and
the nature and terms of any agreement the Portfolio may have to close out the
option before expiration. In the absence of market quotations, illiquid
investments are priced at fair value as determined in good faith by the Board of
Trustees. If through a change in values, net assets, or other circumstances, the
Portfolio were in a position where more than 10% of its net assets were invested
in illiquid securities, it would seek to take appropriate steps to protect
liquidity.

B-4
<PAGE>

RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the Securities
Act of 1933, or in a registered public offering. Where registration is required,
the Portfolio may be obligated to pay all or part of the registration expense
and a considerable period may elapse between the time it decides to seek
registration and the time the Portfolio may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, the Portfolio might obtain a less favorable
price than prevailed when it decided to seek registration of the security.

REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio purchases a
security and simultaneously commits to resell that security to the seller at an
agreed upon price on an agreed upon date within a number of days from the date
of purchase. The resale price reflects the purchase price plus an agreed upon
incremental amount which is unrelated to the coupon rate or maturity of the
purchased security. A repurchase agreement involves the obligation of the seller
to pay the agreed upon price, which obligation is in effect secured by the value
(at least equal to the amount of the agreed upon resale price and marked to
market daily) of the underlying security. The Portfolio may engage in repurchase
agreements with respect to any security in which it is authorized to invest.

While it does not presently appear possible to eliminate all risks from
these transactions (particularly the possibility of a decline in the market
value of the underlying securities, as well as delays and costs to the Portfolio
in connection with bankruptcy proceedings), it is the Portfolio's current policy
to limit repurchase agreement transactions to parties whose creditworthiness has
been reviewed and found satisfactory by the Manager.

LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The Portfolio will not:
(a) write call options if, as a result, more than 25% of the Portfolio's total
assets would be hedged with options under normal conditions; or (b) purchase
futures contracts if, as a result, the Portfolio's total obligations upon
settlement or exercise of purchased futures contracts would exceed 25% of its
total assets. These limitations do not apply to options attached to or acquired
or traded together with their underlying securities, and do not apply to
securities that incorporate features similar to options. The above limitations
on the Portfolio's investments in futures contracts and options, and the
Portfolio's policies regarding futures contracts and options discussed elsewhere
in this Statement of Additional Information, may be changed as regulatory
agencies permit.

B-5
<PAGE>

FUTURES CONTRACTS. When the Portfolio purchases a futures contract, it
agrees to purchase a specified underlying instrument at a specified future date.
When the Portfolio sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and sale
will take place is fixed when the Portfolio enters into the contract.

Some currently available futures contracts are based on indices of
securities-prices, such as the Standard & Poor's 500 Composite Stock Price Index
(S&P 500). Futures can be held until their delivery dates, or can be closed out
before then if a liquid secondary market is available.

The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase the Portfolio's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When the Portfolio sells a futures
contract, by contrast, the value of its futures position will tend to move in a
direction contrary to the market. Selling futures contracts, therefore, will
tend to offset both positive and negative market price changes, much as if the
underlying instrument had been sold.

FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the contract
is held until the delivery date. However, both the purchaser and seller are
required to deposit "initial margin" with a futures broker, known as a futures
commission merchant (FCM), when the contract is entered into. Initial margin
deposits are typically equal to a percentage of the contract's value.

If the value of either party's position declines, that party will be
required to make additional "variation margin" payments to settle the change in
value on a daily basis. The party that has a gain may be entitled to receive all
or a portion of this amount. Initial and variation margin payments do not
constitute purchasing securities on margin for purposes of the Portfolio's
investment limitations. In the event of the bankruptcy of an FCM that holds
margin on behalf of the Portfolio, the Portfolio may be entitled to return of
margin owed to it only in proportion to the amount received by the FCM's other
customers, potentially resulting in losses to the Portfolio.

B-6
<PAGE>

WRITING CALL OPTIONS. Writing a call option obligates the Portfolio to sell
or deliver the option's underlying instrument, in return for the strike price,
upon exercise of the option. The characteristics of writing call options are
similar to those of writing put options, except that writing calls generally is
a profitable strategy if prices remain the same or fall. Through receipt of the
option premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is greater,
a call writer gives up some ability to participate in security price increases.

CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange traded options and futures contracts, it is likely that the
standardized contracts available will not match the Portfolio's current or
anticipated investments exactly. The Portfolio may invest in options and futures
contracts based on securities with different issuers, maturities, or other
characteristics from the securities in which it typically invests, which
involves a risk that the options or futures position will not track the
performance of the Portfolio's other investments.

Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the Portfolio's
investments well. Options and futures prices are affected by such factors as
current and anticipated short-term interest rates, changes in volatility of the
underlying instrument, and the time remaining until expiration of the contract,
which may not affect security prices the same way. Imperfect correlation may
also result from differing levels of demand in the options and futures markets
and the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price fluctuation
limits or trading halts.

The Portfolio may purchase or sell options and futures contracts with a
greater or lesser value than the securities it wishes to hedge or intends to
purchase in order to attempt to compensate for differences in volatility between
the contract and the securities, although this may not be successful in all
cases. If price changes in the Portfolio's options or futures positions are
poorly correlated with its other investments, the positions may fail to produce
anticipated gains or result in losses that are not offset by gains in other
investments.

LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract at
any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying instrument's

B-7
<PAGE>

current price. In addition, exchanges may establish daily price fluctuation
limits for options and futures contracts, and may halt trading if a contract's
price moves upward or downward more than the limit in a given day. On volatile
trading days when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible for the Portfolio to enter into new positions or
close out existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could prevent prompt
liquidation of unfavorable positions, and potentially could require the
Portfolio to continue to hold a position until delivery or expiration regardless
of changes in its value. As a result, the Portfolio's access to other assets
held to cover its options or futures positions could also be impaired.

ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The Portfolio will comply
with guidelines established by the SEC with respect to coverage of options and
futures strategies by mutual funds, and if the guidelines so require, will set
aside appropriate liquid assets in a segregated custodial account in the amount
prescribed. Securities held in a segregated account cannot be sold while the
futures or option strategy is outstanding, unless they are replaced with other
suitable assets. As a result, there is a possibility that segregation of a large
percentage of the Portfolio's assets could impede portfolio management or the
Fund's ability to meet redemption requests or other current obligations.

SHORT SALES. The Portfolio may enter into short sales "against the box"
with respect to equity securities it holds. For example, if a Sector Adviser
anticipates a decline in the price of a stock the Portfolio holds, it may sell
the stock short "against the box." If the stock price subsequently declines, the
proceeds of the short sale could be expected to offset all or a portion of the
stock's decline. The Portfolio currently intends to hedge no more than 15% of
its total assets with short sales "against the box" on equity securities under
normal circumstances.

When the Portfolio enters into a short sale "against the box", it will be
required to own or have the right to obtain at no added cost securities
identical to those sold short "against the box" and will be required to continue
to hold them while the short sale "against the box" is outstanding. The
Portfolio will incur transaction costs, including interest expense, in
connection with opening, maintaining, and closing short sales.

B-8
<PAGE>

RATINGS

1. Moody's Corporate Bond Ratings:

Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa -- Bonds which are rated Aa are judged to be high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins or
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.

Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

2. Standard & Poor's Corporate Bond Ratings:

AAA -- Bonds rated AAA are highest grade obligations. They possess the
ultimate degree of protection as to principal and interest. Marketwise they move
with interest rates, and hence provide the maximum safety on all counts.

AA -- Bonds rated AA also qualify as high grade obligations, and in the
majority of instances differ from AAA issues only in small degree. Here, too,
prices move with the long-term money market.

B-9
<PAGE>

A -- Bonds rated A are regarded as upper medium grade. They have
considerable investment strength but are not entirely free from adverse effects
of changes in economic and trade conditions. Interest and principal are regarded
as safe. They predominantly reflect money rates in their market behavior but, to
some extent, also economic conditions.

BBB -- Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.

3. A-1 and P-1 Commercial Paper Ratings:

Commercial paper rated A-1 by Standard & Poor's Corporation has the
following characteristics: Liquidity ratios are adequate to meet cash
requirements. Long term senior debt is rated "A" or better. The issuer has
access to at least two additional channels of borrowing. Basic earnings and cash
flow have an upward trend. Typically, the issuer's industry is well established
and the issuer has a strong position within the industry. The reliability and
quality of management are unquestioned. Relative strength or weakness of the
above factors determines whether the issuer's commercial paper is A-1, A-2, or
A-3.

The rating P-1 is the highest commercial paper rating assigned by Moody's
Investors Service, Inc. ("Moody's"). Among the factors considered by Moody's in
assigning ratings are the following: (1) evaluation of the management of the
issuer; (2) economic evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in certain areas; (3)
evaluation of the issuer's products in relation to competition and customer
acceptance; (4) liquidity; (5) amount and quality of long-term debt; (6) trend
of earnings over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer; and (8) recognition
by the management of obligations which may be present or may arise as a result
of public interest questions and preparations to meet such obligations.

B-10
<PAGE>

4. Description of Permitted Money Market Instruments:

Commercial Paper -- refers to promissory notes issued by corporations in
order to finance their short term credit needs.

U.S. Government Obligations -- are bills, certificates of indebtedness,
notes and bonds issued by the U.S. Treasury and agencies, authorities and
instrumentalities of the U.S. Government established under the authority of an
act of Congress. Some obligations of U.S. Government agencies, authorities and
instrumentalities are supported by the full faith and credit of the U.S.
Treasury such as, for example, the Government National Mortgage Association;
others by the right of the issuer to borrow from the Treasury, authority or
instrumentality such as, for example, Federal Home Loan Mortgage and Federal
Home Loan Bank.

Repurchase Agreements -- a repurchase transaction occurs when an investor
buys a security and simultaneously agrees to resell it at a later date to the
person from whom it was bought, at a higher price. The price differential
represents interest for the period the security is held. Repurchase transactions
will normally be entered into with banks and securities brokers. The Portfolio
could suffer a loss if the bank or securities broker with which the Portfolio
had a repurchase agreement were to default.

Certificates of Deposit -- are certificates issued against funds deposited
in a bank, are for a definite period of time, earn a specified or variable rate
of return and are normally negotiable.

Banker's Acceptances -- are short-term credit instruments used to finance
the import, export, transfer or storage of goods. They are termed "accepted"
when a bank guarantees their payment at maturity.

Corporation Obligations -- include bonds and notes issued by corporations
in order to finance longer term credit needs.

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.

B-11
<PAGE>

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
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 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.

B-12
<PAGE>

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; member of
Worthington, OH 43235 the Portfolio's Audit Committee.

ROGER D. BLACKWELL, 56 Trustee Professor of Marketing and Consumer
Blackwell Associates, Inc. Behavior, The Ohio State University;
3380 Tremont Road President of Blackwell Associates,
Columbus, OH 43221 Inc., a strategic consulting firm.

B-13
<PAGE>

<S> <C> <C>
JOHN M. EMERY, 76 Trustee Retired; formerly Vice President and
2390 McCoy Road Treasurer of Columbus & Southern Ohio
Columbus, OH 43220 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 companies
Columbus, OH 43220 involved in engineering, consulting
and sales of heating and air
conditioning equipment.

WILLIAM L. GURNER*, 50 Trustee President, Sector Capital Management,
Sector Capital Management, Inc. an investment adviser (since January
5350 Poplar Avenue, Suite 490 1995); Manager of Trust Investments
Memphis, TN 38119 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-14
<PAGE>

<S> <C> <C>
LOWELL G. MILLER*, 48 Trustee President, Miller/Howard Investments,
Miller/Howard Investments, Inc. Inc., an investment adviser whose
141 Upper Byrdcliffe Road clients include the Portfolio and the
P. O. Box 549 Utilities Stock Portfolio.
Woodstock, NY 12498

WALTER L. OGLE, 58 Trustee Executive Vice President of Aon
400 Interstate North Parkway, Suite Consulting, an employee benefits
1630 consulting group.
Atlanta, GA 30339

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 Counsel
42 Miller Hill Road to Flex-Partners, Flex-funds and
Box 811 their Portfolios; Senior Vice
Dover, MA 02030 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.

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>

B-15
<PAGE>

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 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-16
<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. Trustee fees for the Growth Stock 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 Highlands Growth 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 and
manager for, and has an Investment Advisory Contract with, the Portfolio.

Pursuant to the Investment Advisory Contract with the Portfolio, the
Manager, subject to the supervision of the Portfolio's Board of Trustees and in
conformity with the stated objective and policies of the Portfolio, has general
oversight responsibility for the investment operations of the Portfolio. In
connection therewith, the Manager is obligated to keep certain books and records
of the Portfolio. The management services of the Manager are not exclusive under
the terms of the Investment Advisory Contract and the Manager is free to, and
does, render management services for others.

B-17
<PAGE>

The Manager invests the Portfolio's liquidity reserves and may invest the
Portfolio's assets in financial futures contracts and related options.

The Investment Advisory Contract for the Portfolio was separately approved
by a vote of a majority of the Trustees, including a majority of those Trustees
who are not "interested persons" (as defined in the Investment Company Act of
1940) of the Portfolio. The Investment Advisory Contract is to remain in force
so long as renewal thereof is specifically approved at least annually by a
majority of the Trustees or by vote of a majority of the interests in the
Portfolio, and in either case by vote of a majority of the Trustees who are not
"interested persons" (as defined in the Investment Company Act of 1940) at a
meeting called for the purpose of voting on such renewal.

The Investment Advisory Contract provides that the Manager will not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Portfolio in connection with the matters to which the Investment Advisory
Contract relates except for a loss resulting from willful misfeasance, bad
faith, gross negligence or reckless disregard of duty. The Investment Advisory
Contract will terminate automatically if assigned and may be terminated without
penalty at any time upon 60 days prior written notice by Majority Vote of the
Portfolio, by the Trustees of the Portfolio, or by the Manager.

The expenses of the Portfolio include the compensation of the Trustees who
are not affiliated with the Manager, Subadviser or Sector Advisers; registration
fees; membership dues allocable to the Portfolio; fees and expenses of
independent accountants, and any transfer agent or accountant of the Portfolio;
insurance premiums and other miscellaneous expenses.

Expenses of the Portfolio also include all fees under its Accounting and
Administrative Service Agreement; 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 offices and
commissions; expenses of meetings of investors and Trustees; the advisory fees
payable to the Manager, Subadviser and Sector Advisers under the investment
advisory contracts and other miscellaneous expenses.

B-18
<PAGE>

The Manager earns an annual fee, payable in monthly installments, at the
rate of 1% of the first $50 million, 0.75% of the next $50 million, and 0.60% in
excess of $100 million, of the Portfolio's average net assets. The Manager will
receive 70% and the Subadviser 30% of the fee payable with respect to the net
assets of the Portfolio upon effectiveness of the subadvisory arrangement; then
the Manager will receive 30% and the Subadviser 70% of the fee attributable to
any additional net assets of the Portfolio up to an amount of net assets equal
to the net assets upon effectiveness of the subadvisory arrangement, then the
Manager and the Subadviser will share equally the fee attributable to any
additional net assets of the Portfolio up to $50 million of the net assets. With
respect to net assets of more than $50 million and less than $100 million, the
applicable fees of 0.75% will be shared such that the Manager would receive
0.35% and the Subadviser 0.40%. For net assets of $100 million and more, the
applicable 0.60% fee will be shared such that the Manager will receive 0.25% and
the Subadviser 0.35%. For the year ending December 31, 1996, the Growth Stock
Portfolio paid fees to the Manager totaling $258,239 ($238,640 in 1995; $240,045
in 1994).

R. Meeder & Associates, Inc. was incorporated in Ohio on February 1, 1974
and maintains its principal offices at 6000 Memorial Drive, Dublin, Ohio 43017.
The Manager is a wholly-owned subsidiary of Muirfield Investors, Inc. ("MII"),
which is controlled by Robert S. Meeder, Sr. through the ownership of voting
common stock. The Manager's officers and directors are as set forth as follows:
Robert S. Meeder, Sr. Chairman and Sole Director; 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;
Robert S. Meeder, Jr., President; Wesley F. Hoag, Vice President and General
Counsel; Steven T. McCabe, Vice President; and Roy E. Rogers, Vice President.
Mr. Robert S. Meeder, Sr. is President and a Trustee of the Portfolio. Each of
Donald F. Meeder, Wesley F. Hoag and Steven T. McCabe is an officer of the
Portfolio. Mr. Robert S. Meeder Jr. and Philip A. Voelker are Trustees and
officers of the Portfolio.

INVESTMENT SUBADVISER

Sector Capital Management L.L.C. serves as the Portfolio's subadviser. The
Subadviser is a Georgia limited liability company. William L. Gurner and John K.
Donaldson control the Subadviser. Messrs. Gurner and Donaldson are Managers and
Members of the Subadviser. The Subadviser's officers are as set forth as
follows: William L. Gurner, President and Administrator; George S. Kirk,
Director, Sales and Marketing; and Kenneth L. Riffle, Director, Client
Relations. Mr. Gurner is a Trustee of the Growth Stock Portfolio, The
Flex-funds, and The Flex-Partners, mutual funds whose corresponding portfolios

B-19
<PAGE>

are also advised by the Manager. The Investment Subadvisory Agreement provides
that the Subadviser shall furnish investment advisory services in connection
with the management of the Portfolio. The Portfolio and the Manager have entered
into an Investment Subadvisory Agreement with the Subadviser which, in turn, has
entered into a investment sub-subadvisory agreement with each of the Sector
Advisers selected for the Portfolio. Under the Investment Subadvisory Agreement,
the Subadviser is required to (i) supervise the general management and
investment of the assets and securities portfolio of the Portfolio; (ii) provide
overall investment programs and strategies for the Portfolio and (iii) select
Sector Advisers for the Portfolio, except as otherwise provided, allocate the
Portfolio's assets among such Sector Advisers. The Subadviser is obligated to
keep certain books and records of the Portfolio. The Manager continues to have
responsibility for all investment advisory services pursuant to the Investment
Advisory Agreement and supervises the Subadviser's performance of such services.
Under the Investment Subadvisory Agreement, the Manager pays the Subadviser an
investment advisory fee in an amount described above under "Investment Adviser
and Manager."

The Subadviser may invest the Portfolio's assets in financial futures
contracts and related options.

The Investment Subadvisory Agreement provides that the Subadviser will not
be liable for any error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission in the execution of portfolio
transactions for the Portfolio, except a loss resulting from misfeasance, bad
faith, gross negligence or reckless disregard of duty. The Investment
Subadvisory Agreement provides that it will terminate automatically if assigned,
and that it may be terminated without penalty to the Fund or the Portfolio by
the Manager, the Trustees of the Portfolio or by the vote of a majority of the
outstanding voting securities of the Portfolio upon not less than 30 days
written notice. The Investment Subadvisory Agreement will continue in effect for
a period of more than two years from the date of execution only so long as such
continuance is specifically approved at least annually in conformity with the
1940 Act. The Investment Subadvisory Agreement was approved by the Board of
Trustees of the Portfolio, including all of the Trustees who are not parties to
the contract or "interested persons" of any such party, and by the shareholders
of the Portfolio.

INVESTMENT SUB-SUBADVISERS

Except as otherwise described above under "Adviser" and "Investment
Subadviser", the assets of the Portfolio are managed by asset managers (each a
"Sector Manager" and collectively, the "Sector Managers") selected by the
Subadviser, subject to the review and approval of the Trustees of the Portfolio.

B-20
<PAGE>

The Subadviser recommends, to the Trustees of the Portfolio, Sector Advisers for
each industry sector based upon its continuing quantitative and qualitative
evaluation of the Sector Advisers' skills in managing assets pursuant to
specific investment styles and strategies. The Portfolio has applied for an
exemptive order from the SEC permitting the Subadviser, subject to certain
conditions, to enter into sub-subadvisory agreements with Sector Advisers
approved by the Trustees of the Portfolio but without the requirement of
shareholder approval. At a meeting held on December 20, 1996, the shareholders
of the Portfolio approved the operation of the Portfolio in this manner.
Pursuant to the terms of the exemptive application, the Subadviser is to be
able, subject to the approval of the Trustees of the Portfolio, but without
shareholder approval, to employ new Sector Advisers for the Portfolio. Although
shareholder approval will not be required for the termination of sub-subadvisory
agreements, shareholders of the Portfolio will continue to have the right to
terminate such agreements for the Portfolio at any time by a vote of a majority
of outstanding voting securities of the Portfolio.

Except as otherwise provided under "General Description of Registrant" in
Part A attached hereto, the assets of the Portfolio are allocated by the
Subadviser among the Sector Advisers selected for the Portfolio. Each Sector
Adviser has discretion, subject to oversight by the Trustees and the Subadviser,
to purchase and sell portfolio assets, consistent with the Portfolio's
investment objectives, policies and restrictions. For its services, the
Subadviser receives a management fee from the Manager. A part of the fee paid to
the Subadviser is used by the Subadviser to pay the advisory fees of the Sector
Advisers. Each Sector Adviser is paid a fee for its investment advisory services
that is computed daily and paid monthly based on the value of the average net
assets of the Portfolio assigned by the Subadvisor to the Sector Adviser at an
annual rate equal to .25%.

The Investment Sub-subadvisory Agreements provide that the Sector Advisers
will not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the execution of
portfolio transactions for the Portfolio, except a loss resulting from
misfeasance, bad faith, gross negligence or reckless disregard of duty. The
Investment Sub-subadvisory Agreements provide that they will terminate
automatically if assigned, and that they may be terminated without penalty to
the Fund or the Portfolio by the Subadviser, the Trustees of the Portfolio or by
the vote of a majority of the outstanding voting securities of the Portfolio
upon not less than 15 days written notice. The Investment Sub-subadvisory
Agreements will continue in effect for a period of more than two years from the
date of execution only so long as such continuance is specifically approved at
least annually in conformity with the 1940 Act. The Investment Sub-subadvisory
Agreements were approved by the Board of Trustees of the Portfolio, including
all of the Trustees who are not parties to the contract or "interested persons"
of any such party, and by the shareholders of the Portfolio.

B-21
<PAGE>

A Sector Adviser may also serve as a discretionary or non-discretionary
investment adviser to management or advisory accounts unrelated in any manner to
the Portfolio or its affiliates. The investment subadvisory agreements among the
Sector Advisers, the Portfolio and the Subadviser require fair and equitable
treatment to the Portfolio in the selection of the Portfolio investments and the
allocation of investment opportunities, but does not obligate the Sector
Advisers to give the Portfolio exclusive or preferential treatment.

Although the Sector Advisers make investment decisions for the Portfolio
independent of those for their other clients, it is likely that similar
investment decisions will be made from time to time. When the Portfolio and
another client of a Sector Adviser are simultaneously engaged in the purchase or
sale of the same security, the transactions are, to the extent feasible and
practicable, averaged as to price and allocated as to amount between the
Portfolio and the other client(s). In specific cases, this system could have
detrimental effect on the price or volume of the security to be purchased or
sold, as far as the Portfolio is concerned. However, the Trustees of the
Portfolio believe, over time, that coordination and the ability to participate
in volume transactions should be to the benefit of the Portfolio.

Listed below are the Sector Advisers selected by the Subadviser to invest
certain of the Portfolio's assets:

MILLER/HOWARD INVESTMENTS, INC. serves as Sector Adviser to the utilities
and transportation sectors of the Portfolio. Miller/Howard is a registered
investment adviser which has been providing investment services to
broker-dealers, investment advisers, employee benefit plans, endowment
portfolios, foundations and other institutions and individuals since 1984. As of
December 31, 1996, Miller/Howard held discretionary investment authority over
approximately $183 million of assets. Lowell Miller and Helen Hamada who are,
respectively, Miller/Howard's President, Secretary and a director and its Vice
President, Treasurer and a director, each own more than 10% of the outstanding
voting securities of Miller/Howard. Mr. Miller is the portfolio manager
primarily responsible for the day-to-day management of those assets of the
Portfolio allocated to Miller/Howard. Mr. Miller has been associated with
Miller/Howard since 1984. Mr. Miller is a Trustee of the Growth Stock Portfolio,
a Trustee and a Vice President of The Flex-funds and a Trustee and a Vice
President of The Flex-Partners, mutual funds whose corresponding portfolios are
also advised by the Manager. Miller/Howard's principal executive offices are
located at 141 Upper Byrdcliffe Road, Post Office Box 549, Woodstock, New York,
12498.

B-22
<PAGE>

B-23
<PAGE>

and sole director, owns more than 10% of the outstanding voting securities of
The Mitchell Group. Mr. Mitchell is the portfolio manager primarily responsible
for the day-to-day management of those assets of the Portfolio allocated to The
Mitchell Group. Mr. Mitchell has been associated with The Mitchell Group since
1989. The Mitchell Group's principal executive offices are located at 1100
Louisiana, #4810, Houston, Texas, 77002.

ASHLAND MANAGEMENT INCORPORATED serves as Sector Adviser to the materials
and services sector of the Portfolio. Ashland is a registered investment adviser
which has been providing investment services to individuals, pension and profit
sharing plans, charitable organizations, corporations and other institutions
since 1975. As of December 31, 1996, Ashland managed accounts having a value of
approximately $1.45 billion. Charles C. Hickox, Chairman of the Board, Chief
Executive Officer and a director, and Perry v.S. Jones, President, Chief
Operating Officer and a director, each owns more than 10% of the outstanding
voting securities of Ashland. Terence J. McLaughlin, Managing Director of
Ashland and Deborah C. Ohl, a Portfolio Management Associate, are the portfolio
managers primarily responsible for the day-to-day management of those assets of
the Portfolio allocated to Ashland. Mr. McLaughlin has been associated with
Ashland since 1984. Ms. Ohl has been employed by Ashland since August, 1992 and
has served as a Portfolio Management Associate for Ashland since 1993. From May,
1991 until July, 1992, Ms. Ohl was a research and sales assistant with Kidder,
Peabody & Co., Incorporated. Ashland's principal executive offices are located
at 26 Broadway, New York, New York, 10004.

DREMAN VALUE ADVISORS, INC. serves as Sector Adviser to the finance sector
of the Portfolio. Dreman is a registered investment adviser which has been
providing investment services to individuals, banks, investment companies,
pension and profit sharing plans, charitable organizations, corporations and
other institutions since 1977. As of Decmeber 31, 1996, Dreman held
discretionary investment authority over approximately $3.8 billion of assets.
Dreman is a wholly-owned subsidiary of Zurich Kemper Investments, Inc. ("Zurich
Kemper"), which is a wholly-owned subsidiary of ZKI Holding Corporation, which
is approximately 97% owned by Zurich Holding Company of America, Inc., which is
a wholly-owned subsidiary of Zurich Insurance Company. The directors of Dreman
are James R. Neal, President and Chief Executive Officer of Dreman, John E.
Neal, President of Kemper Funds Group, a unit of Zurich Kemper, Stephen B.
Timbers, President, Chief Executive Officer and Chief Investment Officer of
Zurich Kemper, and David N. Dreman, Chairman of the Board of Dreman. Jonathan
Kay is the portfolio manager primarily responsible for the day-to-day management
of those assets of the Portfolio allocated to Dreman. Mr. Kay has been
associated with Dreman since 1993. From 1990 to 1993, Mr. Kay was an associate
with J.S. Eliezer, a management consulting firm serving primarily the media
industry. Dreman's principal executive offices are located at 280 Park Avenue,
40th Floor, New York, NY 10017.

B-24
<PAGE>

RCM CAPITAL MANAGEMENT, L.L.C. serves as Sector Adviser to the technology
sector of the Portfolio. RCM is a registered investment adviser that provides
investment services to institutional and individual clients and registered
investment companies, with approximately $25.6 billion of assets under
management as of December 31, 1996. RCM was established in April 1996, as the
successor to the business and operations of RCM Capital Management, a California
Limited Partnership, which, with its predecessors, has been in operation since
1970. RCM is a wholly owned subsidiary of Dresdner Bank AG, an international
banking organization with principal executive offices in Frankfurt, Germany. The
Board of Managers of RCM is comprised of William L. Price, Chairman of the
Board, Chief Investment Officer and Principal of RCM, Michael J. Apatoff,
President, Chief Operating Officer and Principal of RCM, Hans-Dieter
Bauernfeind, General Manager of Dresdner, Gerhard Eberstadt, Senior Chairman of
Dresdner, George N. Fugelsang, Senior General Manager of Dresdner, John D.
Leland, Jr., Principal of RCM, Jeffrey S. Rudsten, Principal of RCM, William S.
Stack, Principal of RCM and Kenneth B. Weeman, Jr., Principal and Head of Equity
Trading of RCM. Walter C. Price and Huachen Chen, each Principals of RCM, are
the portfolio managers primarily responsible for the day-to-day management of
those assets of the Portfolio allocated to RCM. Messrs. Price and Chen have
managed equity portfolios on behalf of RCM since 1985. RCM's principal executive
offices are located at Four Embarcadero Center, San Francisco, CA 94111.

Banking laws and regulations, including the Glass-Steagall Act as presently
interpreted by the Board of Governors of the Federal Reserve System, prohibit
certain banking entities, such as Dresdner, from sponsoring, organizing,
controlling or distributing the shares of a registered investment company
continuously engaged in the issuance of its shares, and prohibit banks generally
from underwriting securities. However, banks and their affiliates generally can
act as an adviser (or sub-subadviser) to an investment company and can purchase
shares of an investment company as agent for and upon the order of customers.
RCM believes that it may perform the services contemplated by the investment
management agreement without violating these banking law regulations. However,
future changes in legal requirements relating to the permissible activities of
banks and their affiliates, as well as future interpretations of current
requirements, could prevent RCM from continuing to perform investment management
services for the Portfolio.

B-25
<PAGE>

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.

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
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.

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.

ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.

All orders for the purchase or sale of portfolio securities are placed on
behalf of the Portfolio by the Manager, Subadviser or Sector Advisers pursuant
to authority contained in the investment advisory agreement, investment
Subadvisory agreement and investment sub-subadvisory agreements. The Manager,
Subadviser and Sector Advisers are also responsible for the placement of
transaction orders for accounts for which they or their affiliates act as
investment adviser. In selecting broker-dealers, subject to applicable
limitations of the federal securities laws, the Manager, Subadviser and Sector
Advisers consider various relevant factors, including, but not limited to, the

B-26
<PAGE>

size and type of the transaction; the nature and character of the markets for
the security to be purchased and sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; the
reasonableness of any commissions, and arrangements for payment of Portfolio
expenses.

The Portfolio may execute portfolio transactions with broker-dealers who
provide research and execution services to the Portfolio or other accounts over
which the Manager, Subadviser or Sector Advisers or their affiliates exercise
investment discretion. Such services may include advice concerning the value of
securities; the advisability of investing in, purchasing or selling securities;
the availability of securities or the purchasers or sellers of securities;
furnishing analyses and reports concerning issuers industries, securities,
economic factors and trends, portfolio strategy, and performance of accounts;
and effecting securities transactions and performing functions incidental
thereto (such as clearance and settlement). The selection of such broker-dealers
generally is made by the Manager, Subadviser and Sector Advisers (to the extent
possible consistent with execution considerations) in accordance with a ranking
of broker-dealers determined periodically by the Manager, Subadviser and Sector
Advisers' investment staffs based upon the quality of research and execution
services provided.

The receipt of research from broker-dealers that execute transactions on
behalf of the Portfolio may be useful to the Manager, Subadviser and Sector
Advisers in rendering investment management services to the Portfolio or their
other clients, and conversely, such research provided by broker-dealers who have
executed transaction orders on behalf of other Manager, Subadviser and Sector
Advisers' clients may be useful to the Manager, Subadviser and Sector Advisers
in carrying out their obligations to the Portfolio. The receipt of such research
is not expected to reduce the Manager, Subadviser and Sector Advisers' normal
independent research activities; however, it enables the Manager, Subadviser and
Sector Advisers to avoid the additional expenses that could be incurred if the
Manager, Subadviser and Sector Advisers tried to develop comparable information
through their own efforts.

Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
Portfolio to pay such higher commissions, the Manager, Subadviser and/or Sector
Advisers must determine in good faith that such commissions are reasonable in
relation to the value of the brokerage and research services provided by such
executing broker-dealers viewed in terms of a particular transaction or the

B-27
<PAGE>

Manager, Subadviser and/or Sector Advisers' overall responsibilities to the
Portfolio and their other clients. In reaching this determination, the Manager,
Subadviser and/or Sector Advisers will not attempt to place a specific dollar
value on the brokerage and research services provided or to determine what
portion of the compensation should be related to those services.

The Manager, Subadviser and Sector Advisers are authorized to use research
services provided by and to place portfolio transactions with brokerage firms
that have provided assistance in the distribution of shares of the Fund or
shares of other Flex-funds funds or Flex-Partners funds to the extent permitted
by law.

The Manager, Subadviser and Sector Advisers may allocate brokerage
transactions to broker-dealers who have entered into arrangements with the
Manager, Subadviser and Sector Advisers under which the broker-dealer allocates
a portion of the commissions paid by the Portfolio toward payment of the
Portfolio or the Fund's expenses, such as transfer agent fees of Mutual Funds
Service Co. or custodian fees. The transaction quality must, however, be
comparable to those of other qualified broker-dealers.

The Trustees of the Portfolio periodically review the Manager, Subadviser
and Sector Advisers' performance of their responsibilities in connection with
the placement of portfolio transactions on behalf of the Portfolio and review
the commissions paid by the Portfolio over representative periods of time to
determine if they are reasonable in relation to the benefits to the Portfolio.

From time to time, the Trustees of the Portfolio will review whether the
recapture for the benefit of the Portfolio of some portion of the brokerage
commissions or similar fees paid by the Portfolio on portfolio transactions is
legally permissible and advisable.

The Portfolio seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture arrangements
are in effect. The Trustees of the Portfolio intend to continue to review
whether recapture opportunities are available and are legally permissible and,
if so, to determine in the exercise of their business judgment, whether it would
be advisable for the Portfolio to seek such recapture.

Although the Trustees and officers of the Portfolio are substantially the
same as those of other portfolios managed by the Manager, investment decisions
for the Portfolio are made independently from those of other portfolios managed
by the Manager or accounts managed by affiliates of the Manager. It sometimes
happens that the same security is held in the portfolio of more than one of
these funds or accounts. Simultaneous transactions are inevitable when several
portfolios are managed by the same investment adviser, particularly when the
same security is suitable for the investment objective of more than one
portfolio.

B-28
<PAGE>

When two or more portfolios are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in accordance
with a formula considered by the officers of the portfolios involved to be
equitable to each portfolio. In some cases this system could have a detrimental
effect on the price or value of the security as far as the Portfolio is
concerned. In other cases, however, the ability of the Portfolio to participate
in volume transactions will produce better executions and prices for the
Portfolio. It is the current opinion of the Trustees of the Portfolio that the
desirability of retaining the Manager as investment adviser to the Portfolio
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions. During the period from January 1, 1996 to December
31, 1996, the Growth Stock Portfolio paid total commissions of $22,474 ($44,655
in 1995; $135,422 in 1994) on the purchase and sale of common stocks. Brokerage
commissions paid on the purchases and sales by the Portfolio of futures and
option contracts for the year ending December 31, 1996 were $17,339.

ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.

B-29
<PAGE>

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-30
<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-31
<PAGE>

The Portfolio determines its net asset value as of 4:00 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. (As of the date of this Registration Statement, the New
York Stock Exchange is open for trading every weekday except for the following
holidays (or days on which such holiday is observed): New Year's Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor 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 each closing of the N.Y.S.E. on the basis of
the last sale on such exchange 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.

B-32
<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 Growth Stock 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-33
<PAGE>

GROWTH STOCK PORTFOLIO
Portfolio of Investments as of December 31, 1996

SHARES OR
INDUSTRIES/CLASSIFICATIONS FACE AMOUNT VALUE

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-34
<PAGE>

GROWTH STOCK PORTFOLIO, continued

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-35
<PAGE>

Growth Stock Portfolio, continued

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-36
<PAGE>

GROWTH STOCK PORTFOLIO, continued

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-37
<PAGE>

BOND PORTFOLIO
Portfolio of Investments as of December 31, 1996

FACE AMOUNT VALUE

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-38
<PAGE>

MUTUAL FUND PORTFOLIO
Portfolio of Investments as of December 31, 1996

SHARES OR
FACE AMOUNT VALUE

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-39
<PAGE>

MUTUAL FUND PORTFOLIO, continued

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-40
<PAGE>

UTILITIES STOCK PORTFOLIO
Portfolio of Investments as of December 31, 1996

SHARES OR
INDUSTRIES/CLASSIFICATIONS FACE AMOUNT VALUE

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-41
<PAGE>

Utilities Stock Portfolio, continued

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-42
<PAGE>

UTILITIES STOCK PORTFOLIO, continued

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-43
<PAGE>

MONEY MARKET PORTFOLIO

Portfolio of Investments as of December 31, 1996

AMORTIZED
FACE AMOUNT COST

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-44
<PAGE>

MONEY MARKET PORTFOLIO, continued

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-45
<PAGE>

MONEY MARKET PORTFOLIO, continued

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-46
<PAGE>

STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1996

Mutual Growth Utilities Money
Fund Stock Stock Bond Market
Portfolio Portfolio Portfolio Portfolio Portfolio

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-47
<PAGE>

STATEMENTS OF OPERATIONS
For the year ended December 31, 1996

Mutual Growth Utilities Money
Fund Stock Stock Bond Market
Portfolio Portfolio Portfolio Portfolio Portfolio

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-48
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31,

Mutual Growth
Fund Stock
Portfolio Portfolio

1996 1995 1996 1995

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-49
<PAGE>

Utilities
Stock Bond
Portfolio Portfolio

1996 1995* 1996 1995

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-50
<PAGE>

Money
Market
Portfolio

1996 1995

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-51
<PAGE>

FINANCIAL HIGHLIGHTS
Ratios/Supplemental Data

MUTUAL FUND PORTFOLIO

Year Ended December 31,

1996 1995 1994 1993

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

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

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

See accompanying notes to financial statements

</TABLE>

B-52
<PAGE>

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

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

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-53
<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-54
<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:

GROWTH STOCK PORTFOLIO BOND PORTFOLIO

Number of Contracts Number of Premiums Number of Contracts Number of Premiums

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-55
<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-56
<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:

Purchases Sales

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:

Net Unrealized
Unrealized Unrealized Appreciation
Investment Appreciation Depreciation (Depreciation)
Cost of Investments of Investments of Investments

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-57
<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-58
<PAGE>

PART C

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(a) FINANCIAL STATEMENTS

The following report and financial statement are incorporated by
reference 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. (a) Form of Investment Advisory Agreement between the Registrant
and R. Meeder & Associates, Inc.

(b) Form of Investment Subadvisory Agreement among the
Registrant, R. Meeder & Associates, Inc. and Sector Capital
Management, L.L.C. is filed herewith.

(c) Form of Investment Sub-subadvisory Agreement among the
Registrant, Sector Capital Management, L.L.C. and each of
the Sub-subadvisors is filed herewith.

*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.

- -------------------

*Filed April 30, 1992.
**Filed June 8, 1992 and incorporated herein by reference.

C-1
<PAGE>

**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, is filed herewith.

**13. Investment representation letters of initial investors.

19. Powers of Attorneys of Trustees of Registrant -- previously filed
and incorporated herein by reference; however, Powers of Attorney
of new Trustees of Registrant are filed herewith.

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:

C-2
<PAGE>

NAME ADDRESS

R. Meeder & Associates, Inc. 6000 Memorial Drive
(investment adviser) Dublin, OH 43017

Mutual Funds Service Co. 6000 Memorial Drive
(transfer and accounting Dublin, OH 43017
services agent)

Star Bank, N.A., Cincinnati Star Bank Center
(custodian) 425 Walnut Street
Cincinnati, OH 45202

ITEM 31. MANAGEMENT SERVICES.

Not applicable.

ITEM 32. UNDERTAKINGS.

Not applicable.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this 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.

GROWTH STOCK PORTFOLIO

By /s/ Donald F. Meeder
------------------------
Donald F. Meeder
Secretary/Treasurer

EXHIBIT 11

INDEPENDENT ACCOUNTANTS' CONSENT

The Board of Trustees of
Growth Stock 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

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

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

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

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 22nd day
of April, 1997.

/s/ Roger D. Blackwell
---------------------------------
Roger D. Blackwell

<ARTICLE> 6
<CIK> 0000887155
<NAME> GROWTH STOCK

<S> <C>
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</TABLE>