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As filed with the Securities and Exchange Commission on April 22, 1996.
File No. 811-6646
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 5
TO
FORM N-1A
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
MUTUAL FUND 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
266 Summer Street
Boston, MA 02210
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EXPLANATORY NOTE
This Amendment to the Registration Statement of Mutual Fund Portfolio
has been filed by the Registrant pursuant to Section 8(b) of the Investment
Company Act of 1940, as amended (the "1940 Act"). However, beneficial
interests in the Registrant are not being registered under the Securities Act
of 1933, as amended (the "1933 Act"), since such interests will be offered
solely in private placement transactions which do not involve any "public
offering" within the meaning of Section 4(2) of the 1933 Act. Investments in
the Registrant may only be made by investment companies, insurance company
separate accounts, common or commingled trust funds or similar organizations or
entities which are "accredited investors" as defined in Regulation D under the
1933 Act. This Registration Statement does not constitute an offer to sell, or
the solicitation of an offer to buy, any beneficial interests in the
Registrant.
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PART A
Responses to Items 1 through 3 have been omitted pursuant to paragraph
4 of Instruction F of the General Instructions to Form N-1A.
ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.
Mutual Fund Portfolio (the "Portfolio") is a non-diversified, open-end
management investment company which was organized as a trust under the laws of
the State of New York on November 1, 1991.
Beneficial interests in the Portfolio are offered solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act"). Investments in the Portfolio may only be made by investment companies,
insurance company separate accounts, common or commingled trust funds or
similar organizations or entities which are "accredited investors" as defined
in Regulation D under the 1933 Act. This Registration Statement does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" within the meaning of the 1933 Act.
The Portfolio's investment adviser is R. Meeder & Associates, Inc.
(the "Adviser"). The investment objective of the Portfolio is growth of
capital. The Portfolio will seek to attain its investment objective through
investment in the shares of open-end investment companies----commonly called
mutual funds. The underlying mutual funds will consist of diversified mutual
funds which invest primarily in common stock or securities convertible into or
exchangeable for common stock (such as convertible preferred stock, convertible
debentures or warrants) and which seek long-term growth or appreciation, with
current income typically of secondary importance. Underlying funds may include
funds which concentrate investments in a particular industry sector, or which
leverage their investments. The Portfolio will only purchase mutual funds
which are available to it for purchase and sale without a sales charge.
The Portfolio may at times desire to gain exposure to the stock market
through the purchase of "index" funds (funds which purchase stocks represented
in popular stock market averages) with a portion of its assets. "Index" funds
may be purchased with a portion of the Portfolio's assets at times when the
Adviser's selection process identifies the characteristics of a particular
index to be more favorable than those of other mutual funds available for
purchase.
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If, in the Adviser's opinion, the Portfolio should have exposure to certain
stock indexes and the Portfolio can efficiently and effectively implement such
a strategy by directly purchasing the common stocks of a desired index for the
Portfolio itself, it may do so.
HEDGING STRATEGIES
Derivatives are financial instruments whose performance is derived, at
least in part, from the performance of an underlying asset, security or index.
Financial futures contracts or related options used by 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 may engage in hedging transactions in carrying out its
investment policies. A hedging program may be implemented for the following
reasons: (1) To protect the value of specific securities owned or intended to
be purchased while the Adviser is implementing a change in the Portfolio's
investment position; (2) To protect portfolio values during periods of
extraordinary risk without incurring transaction costs associated with buying
or selling actual securities; and (3) To utilize the "designated hedge"
provisions of Subchapter M of the Internal Revenue Code as a permitted means of
avoiding taxes that would otherwise have to be paid on gains from the sale of
portfolio securities.
A hedging program involves entering into an "option" or "futures"
transaction in lieu of the actual purchase or sale of securities. At present,
many groups of common stocks (stock market indices) may be made the subject of
futures contracts, while government securities such as Treasury bonds and notes
are among debt securities currently covered by futures contracts.
The Portfolio will not engage in transactions in financial futures
contracts or related options for speculation but only as a hedge against
changes in the market value of securities held or intended for purchase, and
where the transactions are economically appropriate to the reduction of risks
inherent in the ongoing management of the Portfolio.
For certain regulatory purposes, the Commodity Futures Trading
Commission ("CFTC") limits the types of futures positions that can be taken in
conjunction with the management of a securities portfolio for management
investment companies, such as the Mutual Fund Portfolio. All futures
transactions for the Portfolio will consequently be
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subject to the restrictions on the use of futures contracts established in CFTC
rules, such as observation of the CFTC's definition of "hedging". In addition,
whenever the Portfolio establishes a long futures position, it will set aside
cash or cash equivalents equal to the underlying commodity value of the long
futures contracts held by the Portfolio. Although all futures contracts
involve leverage by virtue of the margin system applicable to trading on
futures exchanges, the Portfolio will not, on a net basis, have leverage
exposure on any long futures contracts that it establishes because of the cash
set aside requirement. All futures transactions can produce a gain or a loss
when they are closed, regardless of the purpose for which they have been
established. Unlike short futures contracts positions established to protect
against the risk of a decline in value of existing securities holdings, the
long futures positions established by the Portfolio to protect against
reinvestment risk are intended to protect the Portfolio against the risks of
reinvesting portfolio assets that arise during periods when the assets are not
fully invested in securities.
The Portfolio may not purchase or sell futures or purchase related
options if immediately thereafter the sum of the amount of margin deposits on
the Portfolio's existing futures positions and premiums paid for related
options would exceed 5% of the market value of the Portfolio's total assets.
The Portfolio expects that any gain or loss on hedging transactions
will be substantially offset by any gain or loss on the securities underlying
the contracts or being considered for purchase.
ITEM 5. MANAGEMENT OF THE PORTFOLIO.
The Portfolio's Board of Trustees provides broad supervision over the
affairs of the Portfolio. The address of the Adviser is P.O. Box 7177, 6000
Memorial Drive, Dublin, Ohio 43017. A majority of the Portfolio's Trustees are
not affiliated with the Adviser. Star Bank, N.A., Cincinnati ("Star Bank") is
the Portfolio's custodian and Mutual Funds Service Co. ("MFSCo") is the
Portfolio's transfer agent and dividend paying agent. The address of the
custodian is Star Bank Center, 425 Walnut Street, Cincinnati, Ohio 45202 and
the address of MFSCo is 6000 Memorial Drive, Dublin, Ohio 43017.
The Portfolio has not retained the services of a principal underwriter
or distributor, as interests in the Portfolio are offered solely in private
placement transactions. Signature Broker-Dealer Services, Inc. ("SBDS") has
been retained to serve without compensation as exclusive placement agent for
the Portfolio in connection with such transactions.
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The Adviser has been an adviser to individuals and retirement plans
since 1974 and has served as investment adviser to registered investment
companies since 1982. The Adviser serves the Portfolio pursuant to an
Investment Advisory Agreement under the terms of which it has agreed to provide
an investment program within the limitations of the Portfolio's investment
policies and restrictions, and to furnish all executive, administrative, and
clerical services required for the transaction of Portfolio business, other
than accounting services and services which are provided by the Portfolio's
custodian, transfer agent, independent accountants and legal counsel.
The Adviser was incorporated in Ohio in 1974 and maintains its
principal offices at 6000 Memorial Drive, Dublin, Ohio 43017. The Adviser is a
wholly-owned subsidiary of Muirfield Investors, Inc. ("MII"). MII is
controlled by Robert S. Meeder, Sr. through the ownership of voting common
stock. MII conducts business only through its subsidiaries which are the
Adviser, MFSCo, Opportunities Management Co., a venture capital investor,
Meeder Advisory Services, Inc., a registered investment adviser and OMCO, Inc.,
which is a registered commodity trading adviser and commodity pool operator.
The Adviser's officers and directors and their principal offices are
as follows: Robert S. Meeder, Sr., Chairman and Sole Director; Robert S.
Meeder, Jr., President and Treasurer; G. Robert Kincheloe, Senior Vice
President; Philip A. Voelker, Senior Vice President; Donald F. Meeder, Vice
President and Secretary; Sherrie L. Acock, Vice President; Robert D. Baker,
Vice President; Wesley F. Hoag, General Counsel and Chief Operating Officer;
and Steven T. McCabe, Vice President.
Robert S. Meeder, Jr. is the portfolio manager primarily responsible
for the day-to-day management of the Mutual Fund Portfolio. Mr. Meeder, is a
Trustee and Vice President of The Flex-funds, Vice President of the Mutual Fund
Portfolio and President of R. Meeder & Associates ("the Manager"). Mr. Meeder
has been associated with the Manager since 1983 and has been managing the
Portfolio since 1988.
The Adviser 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.
Accounting, transfer agency and dividend disbursing services are
provided to the Portfolio by MFSCo, a wholly-owned subsidiary of MII. The
minimum annual fee for all such services for the Portfolio is $7,500. Subject
to the minimum fee, the Portfolio's annual fee, payable monthly, is computed at
the rate of 0.15% of the first
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$10 million, 0.10% of the next $20 million, 0.02% of the next $50 million and
0.01% in excess of $80 million of the Portfolio's average net assets. For the
year ended December 31, 1995, total payments from the Portfolio to MFSCo.
amounted to $47,427.
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 or SBDS; 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
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
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limited to circumstances in which both inadequate insurance existed and the
Portfolio itself was unable to meet its obligations.
The net income of the Portfolio is determined each day on which the
New York Stock Exchange is open for trading (and on such other days as are
deemed necessary in order to comply with Rule 22c-1 under the 1940 Act) ("Fund
Business Day"). This determination is made once during each such day. All the
net income of the Portfolio, as defined below, so determined is allocated pro
rata among the investors in the Portfolio at the time of such determination.
For this purpose the net income of the Portfolio (from the time of the
immediately preceding determination thereof) shall consist of (i) all income
accrued, less the amortization of any premium, on the assets of the Portfolio,
less (ii) all actual and accrued expenses of the Portfolio determined in
accordance with generally accepted accounting principles. Interest income
includes discount earned (including both original issue and market discount) on
discount paper accrued ratably to the date of maturity and any net realized
gains or losses on the assets of the Portfolio.
Investments in the Portfolio have no preemptive or conversion rights
and are fully paid and nonassessable, except as set forth below. The Portfolio
is not required to hold annual meetings of investors but the Portfolio will
hold special meetings of investors when in the judgment of the Trustees it is
necessary or desirable to submit matters for an investor vote. Investors have
the right to communicate with other investors to the extent provided in Section
16(c) of the 1940 Act in connection with requesting a meeting of investors for
the purpose of removing one or more Trustees, which removal requires a
two-thirds vote of the Portfolio's beneficial interests. Investors also have
under certain circumstances the right to remove one or more Trustees without a
meeting. Upon liquidation or dissolution of the Portfolio, investors would be
entitled to share pro rata in the net assets of the Portfolio available for
distribution to investors.
Under the anticipated method of operation of the Portfolio, the
Portfolio will not be subject to any income tax. However, each investor in the
Portfolio will be taxable on its share (as determined in accordance with the
governing instruments of the Portfolio) of the Portfolio's taxable income,
gain, loss, deductions and credits in determining its income tax liability.
The determination of such share will be made in accordance with the Internal
Revenue Code of 1986, as amended, and regulations promulgated thereunder.
The Portfolio's assets, income and distributions are managed in such a
way that an investor in the Portfolio will be able to satisfy
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the requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended, assuming that the investor invested all of its investable assets in
the Portfolio.
Investor inquiries may be directed to SBDS at 6 St. James Avenue,
Suite 900, Boston, Massachusetts 02116.
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. Securities owned by the Portfolio and listed or traded on any
national securities exchange are valued at each closing of the New York Stock
Exchange 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 has been no sale. Money market
instruments (certificates of deposit, commercial paper, etc.) having maturities
of 60 days or less are valued at amortized cost if not materially different
from market value. Portfolio securities for which market quotations are not
readily available are to be valued by the Adviser in good faith at its own
expense under the direction of the Trustees.
There is no minimum initial or subsequent investment in the Portfolio.
However, since the Portfolio intends to be as fully invested at all times as is
reasonably practicable in order to enhance the 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.
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The exclusive placement agent for the Portfolio is SBDS, whose
principal business address is 6 St. James Avenue, Boston, Massachusetts 02116.
SBDS receives no additional compensation for serving as such agent.
Each investor in the Portfolio may add to or reduce its investment in
the Portfolio on each Fund Business Day. As of 4:00 p.m., New York time, on
each such day, the value of each investor's beneficial interest in the
Portfolio will be determined by multiplying the net asset value of the
Portfolio by the percentage, effective for that day, which represents that
investor's share of the aggregate beneficial interests in the Portfolio. Any
additions or reductions, which are to be effected as of 4:00 p.m., New York
time, on such day, will then be effected. The investor's percentage of the
aggregate beneficial interests in the Portfolio will then be recomputed as the
percentage equal to the fraction (i) the numerator of which is the value of
such investor's investment in the Portfolio as of 4:00 p.m., New York time, on
such day plus or minus, as the case may be, the amount of net additions to or
reductions in the investor's investment in the Portfolio effected as of 4:00
p.m., New York time, on such day, and (ii) the denominator of which is the
aggregate net asset value of the Portfolio as of 4:00 p.m., New York time, on
such day, plus or minus, as the case may be, the amount of net additions to or
reductions in the aggregate investments in the Portfolio by all investors in
the Portfolio. The percentage so determined will then be applied to determine
the value of the investor's interest in the Portfolio as of 4:00 p.m., New York
time, on the following Fund Business Day.
ITEM 8. REDEMPTION OR REPURCHASE.
An investor in the Portfolio may reduce any portion or all of its
investment at any time at the net asset value next determined after a request
in "good order" is furnished by the investor to the Portfolio. The proceeds of
a reduction will be paid by the Portfolio in federal funds normally on the next
business day after the reduction is effected, but in any event within seven
days. Investments in the Portfolio may not be transferred.
The right of any investor to receive payment with respect to any
reduction may be suspended or the payment of the proceeds therefrom postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on such Exchange is restricted, or, to the
extent otherwise permitted by the 1940 Act, if an emergency exists.
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ITEM 9. PENDING LEGAL PROCEEDINGS.
Not applicable.
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PART B
ITEM 10. COVER PAGE.
Not applicable.
ITEM 11. TABLE OF CONTENTS.
<TABLE>
<CAPTION>
Page
<S> <C>
General Information and History . . . . . . . . . . . . B-1
Investment Objective and Policies . . . . . . . . . . . B-1
Management of the Portfolio . . . . . . . . . . . . . . B-5
Control Persons and Principal Holders of Securities . . B-8
Investment Advisory and Other Services . . . . . . . . B-8
Brokerage Allocation and Other Practices . . . . . . . B-9
Capital Stock and Other Securities . . . . . . . . . . B-10
Purchase, Redemption and Pricing of Securities . . . . B-12
Tax Status . . . . . . . . . . . . . . . . . . . . . . B-13
Underwriters . . . . . . . . . . . . . . . . . . . . . B-14
Calculation of Performance Data . . . . . . . . . . . . B-14
Financial Statements . . . . . . . . . . . . . . . . . B-14
</TABLE>
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 Mutual Fund Portfolio (the "Portfolio"). This Part B
should only be read in conjunction with Part A.
The investment policies set forth below represent the Portfolio's
policies as of the date of this Registration Statement. The investment
policies are not fundamental and may be changed by the Trustees of the
Portfolio without investor approval. No such change would be made, however,
without 30 days' written notice to investors.
R. Meeder & Associates, Inc., the investment adviser of the Portfolio
(the "Adviser"), places a high degree of importance on
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protecting portfolio values from severe market declines. Consequently, the
Portfolio's assets may at times be invested for defensive purposes in bonds and
money market instruments.
Because the Adviser intends to employ flexible defensive investment
strategies when market trends are not considered favorable, the Adviser may
occasionally change the entire Portfolio.
The defensive investment strategy can produce high turnover rates when
calculated in accordance with SEC rules. The portfolio turnover rate for the
Portfolio was 186% for the year ended December 31, 1995 (168% in 1994).
The Mutual Fund Portfolio began 1995 being 100% invested in money
market instruments and became fully exposed to the stock market in late
January. By mid-March the Portfolio, in response to internal weaknesses which
were not confirming the price movement in the Dow, adopted a partially
defensive position by scaling back exposure to the stock market to
approximately 50%. In early May as negative divergences no longer existed
between the major stock market indexes the Portfolio was returned to a fully
invested position where it remained until the fourth quarter. In October,
certain technical and fundamental questions about the market's continued
advance began to indicate that the most prudent posture was to again adopt a
partially defensive position. The Portfolio remained partially defensive until
the first week in December when a fully invested position was implemented and
maintained through the end of 1995 year.
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 200% 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.
The Adviser will select mutual funds for inclusion in the Portfolio on
the basis of the industry classifications represented in their portfolios,
their specific portfolio holdings, their performance records, their expense
ratios, and the compatibility of their investment policies and objectives with
those of the Portfolio.
The Adviser utilizes an asset allocation system for deciding when to
invest in mutual funds or alternatively in temporary investments
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such as are described below. The use of this system entails recurring changes
from a fully invested position to a fully defensive position and vice-versa.
(See "Hedging Strategies" in Part A.)
In purchasing shares of other mutual funds the Portfolio will agree to
vote the shares in the same proportion as the vote of all other holders of such
shares.
The Portfolio has adopted certain investment restrictions which cannot
be changed except with the vote of a majority of the Portfolio's outstanding
voting securities. These restrictions are applicable to the Portfolio and are
described elsewhere in this Part B. Investment restrictions for the Portfolio
permit it to invest more than 5% of its assets in the securities of any one
issuer; to purchase the shares of other investment companies (mutual funds);
and to invest more than 25% of its assets in any one industry.
The Portfolio may only purchase up to 3% of the total outstanding
securities of any underlying mutual fund. The holdings of any "affiliated
persons" of the Portfolio, as defined in the Investment Company Act of 1940
(the "1940 Act"), must be included in the computation of the 3% limitation.
Accordingly, when "affiliated persons" hold shares of an underlying mutual
fund, the Portfolio will be limited in its ability to fully invest in that
mutual fund. The Adviser may then, in some instances, select alternative
investments.
The 1940 Act also provides that an underlying mutual fund whose shares
are purchased by the Portfolio may be allowed to delay redemption of its shares
in an amount which exceeds 1% of its total outstanding securities during any
period of less than 30 days. Shares held by the Portfolio in excess of 1% of a
mutual fund's outstanding securities therefore may not be considered readily
disposable securities.
Under certain circumstances, an underlying mutual fund may determine
to make payment of a redemption by the Portfolio wholly or partly by a
distribution in kind of securities from its portfolio, in lieu of cash, in
conformity with rules of the Securities and Exchange Commission. In such
cases, the Portfolio may hold securities distributed by an underlying mutual
fund until the Adviser determines that it is appropriate to dispose of such
securities.
Portfolio investment decisions by an underlying mutual fund will be
made independent of investment decisions by other underlying mutual funds.
Therefore, an underlying mutual fund may be purchasing shares of a company
whose shares are simultaneously being sold by some other underlying mutual
fund. The result of this would be an indirect
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transaction expense (principally commissions) for the Portfolio, without its
having changed its investment position.
The Portfolio may invest in common stocks based upon criteria
described in its investment objective. Because the Portfolio will only invest
directly in common stocks to replicate the performance of popular stock market
indices the selection of stocks would be limited to those stocks found in a
particular index.
For temporary defensive purposes, the Portfolio may invest in (or
enter into repurchase agreements with banks and broker- dealers with respect
to) corporate bonds, U.S. Government securities, commercial paper, certificates
of deposit or other money market instruments. The Portfolio may engage in
hedging transactions to the extent and for the purposes set forth in Part A.
INVESTMENT RESTRICTIONS
The investment restrictions below have been adopted by the Portfolio
as fundamental policies. Under the 1940 Act, a "fundamental" policy may not be
changed without the vote of a majority of the outstanding voting securities of
the Portfolio, which is defined in the 1940 Act with respect to the Portfolio
as the lesser of (a) 67 percent or more of the Portfolio's beneficial interests
represented at a meeting of investors if the holders of more than 50 percent of
the outstanding beneficial interests are present or represented by proxy, or
(b) more than 50 percent of the outstanding beneficial interests ("Majority
Vote"). The percentage limitations contained in the restrictions listed below
apply at the time of the purchase of the securities.
The Portfolio may not: (a) Issue senior securities; (b) Borrow money
except as a temporary measure, and then only in an amount not to exceed 5% of
the value of its net assets (whichever is less) taken at the time the loan is
made, or pledge its assets taken at value to any extent greater than 15% of its
gross assets taken at cost; (c) Act as underwriter of securities of other
issuers; (d) Invest in real estate except for office purposes; (e) Purchase or
sell commodities or commodity contracts, except that it may purchase or sell
financial futures contracts involving U.S. Treasury securities, corporate
securities, or financial indexes; (f) Lend its funds or other assets to any
other person; however, the purchase of a portion of publicly distributed bonds,
debentures or other debt instruments, the purchase of certificates of deposit,
U.S. Treasury debt securities, and the making of repurchase agreements are
permitted, provided repurchase agreements with fixed maturities in excess of
seven days do not exceed 10% of its total assets; (g) Purchase more than 10% of
any class of securities, including voting securities of any issuer, except that
the
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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 or
other investment companies; (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 net
assets at time of purchase (taken at value) in the securities of companies in
any one industry (U.S. Government Securities and securities of other investment
companies are exempt from this restriction); (l) 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; (m) 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; (n) Purchase participations or other direct interests in
oil, gas or other mineral exploration or development programs; (o) Invest in
warrants; and (p) 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.
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.
B-5
<PAGE> 17
TRUSTEES AND OFFICERS
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION HELD PRINCIPAL OCCUPATION
---------------- ------------- --------------------
<S> <C> <C>
ROBERT S. MEEDER, SR.* Trustee/President Chairman of R. Meeder &
Associates, Inc., an
Investment Adviser.
MILTON S. BARTHOLOMEW, Trustee Retired, formerly a
ESQ. practicing attorney in
1424 Clubview Blvd. Columbus, Ohio.
S. Worthington, OH 43235 Comprises the
Portfolio's Audit
Committee.
RUSSEL G. MEANS Trustee Chairman of Employee
4789 Rings Road Benefit Management
Dublin, OH 43017 Corporation,
consultants and
administrators of
self-funded health and
retirement plans.
WALTER L. OGLE Trustee Executive Vice
One Corporate Drive President, Godwins
Clearwater, FL 34622 Booke & Dickenson,
employee benefit,
compensation and human
resource consultants.
PHILIP A. VOELKER* Trustee and Vice Senior Vice President
President and Chief Operating
Officer of R. Meeder &
Associates, Inc.
</TABLE>
<PAGE> 18
<TABLE>
<S> <C> <C>
WESLEY F. HOAG Vice President General Counsel of R.
Meeder & Associates,
Inc. (since July 1993);
Attorney, Porter,
Wright, Morris &
Arthur, a law firm
(October 1984 to June
1993)
DONALD F. MEEDER Secretary/Treasurer Vice President of
R. Meeder & Associates,
Inc.,and President of
Mutual Funds Service
Co.
ROBERT S. MEEDER, JR. Vice President President, R. Meeder &
Associates, Inc.
STEVEN T. McCABE Assistant Treasurer Vice President, R.
Meeder & Associates,
Inc., and Vice
President, Mutual Funds
Service Co.
JAMES B. CRAVER Assistant Secretary Managing Director,
266 Summer Street Eagle Institutional
Boston, MA 02210 Financial Services,
Inc. (since September
1995); Senior Vice
President of Signature
Financial Group, Inc.
(January 1991 to August
1995).
</TABLE>
Robert S. Meeder, Sr. is Donald F. Meeder's uncle and Robert S.
Meeder, Jr's. father.
Each Trustee and each officer of the Portfolio hold the same positions
with other Portfolios, each a corresponding Portfolio of The Flex-funds or
Flex-Partners, each a Massachusetts business trust consisting of several
separate series.
Each Trustee who is not an "interested person" receives an annual fee
of $3,000, plus $750 for each meeting of the Board of Trustees attended
regardless of the number of Boards of Trustees on which each Trustee serves.
Mr. Bartholomew comprises the Audit Committee for
B-7
<PAGE> 19
each corresponding Portfolio of The Flex-funds and the Flex-Partners Trusts.
Mr. Bartholomew is paid $400 for each meeting of the Audit Committees attended
regardless of the number of Audit Committees on which he serves. Trustee fees
for the Mutual Fund Portfolio totaled $3,925 for the year ended December 31,
1995 ($3,750 in 1994). Audit Committee fees for the Portfolio totaled $147 for
the year ended December 31, 1995 ($160 in 1994). 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 Muirfield Fund and The Flex-Partners The TAA Fund
(the "Funds") have an investment in the Portfolio equaling approximately 91%
and 97%, respectively of the Portfolio's interests. No Trustee or officer of
the Portfolio or any other person, except the Funds, own in the aggregate more
than a 1% interest in the Portfolio as of the date of this Registration
Statement.
ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.
ADVISER
R. Meeder & Associates, Inc. (the "Adviser") is the investment adviser
for the Portfolio. The Adviser serves the Portfolio pursuant to an Investment
Advisory Agreement which has been approved by a vote of a majority of the
Trustees, including a majority of those Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Portfolio and which will remain in
force so long as renewal thereof is specifically approved at least annually by
a majority of the Trustees or by a majority vote of the investors in the
Portfolio (with the vote of each being in proportion to the amount of its
investment) ("Majority Portfolio Vote"), and in either case by vote of a
majority of the Trustees who are not "interested persons" (as defined in the
1940 Act) at a meeting called for the purpose of voting on such renewal.
The Investment Advisory Agreement will terminate automatically if
assigned and may be terminated without penalty at any time upon 60 days' prior
written notice by Majority Portfolio Vote, by the Trustees of the Portfolio, or
by the Adviser.
The Adviser earns an annual fee, payable in monthly installments at
the rate of 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. For the
year ended December 31, 1995, the Portfolio paid
B-8
<PAGE> 20
fees to the Adviser totaling $874,473 ($743,058 in 1994; $658,238 in 1993).
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.
The Portfolio seeks to obtain the best available prices on, and firm
execution of, all purchases and sales of portfolio securities. In order to do
so, it may buy securities from or sell securities to broker-dealers acting as
principals.
Satisfied that it is obtaining the best available price and favorable
execution, the Portfolio may, from time to time, place orders for the purchase
or sale of portfolio securities with broker-
B-9
<PAGE> 21
dealers who provide research, statistical or other financial information or
services ("research") to it or to the Adviser, or to any other client for which
the Adviser acts as investment adviser. The reasonableness of brokerage
commissions paid by the Portfolio in relation to transaction and research
services received is evaluated by the staff of the Adviser on an ongoing basis.
The general level of brokerage charges and other aspects of the Portfolio's
portfolio transactions are reviewed periodically by its Board of Trustees.
The Adviser is the principal source of information and advice to the
Portfolio and is responsible for making and initiating the execution of
investment decisions for the Portfolio. However, it is recognized by the
Trustees that it is important for the Adviser, in performing its
responsibilities to the Portfolio, to continue to receive and evaluate the
broad spectrum of economic and financial information which many securities
brokers have customarily furnished in connection with brokerage transactions
and that, in compensating brokers for their services, it is in the interest of
the Portfolio to take into account the value of the information received for
use in advising the Portfolio. The extent, if any, to which the obtaining of
such information may reduce the expenses of the Adviser in providing management
services to the Portfolio is not determinable. In addition, it is understood
by the Trustees that other clients of the Adviser might also benefit from the
information obtained for the Portfolio, in the same manner that the Portfolio
might also benefit from information obtained by the Adviser in performing
services to others.
It is the opinion of the Trustees of the Portfolio and of the Adviser
that the receipt of research from brokers will not materially reduce the
Adviser's own research activities or the overall cost of fulfilling its
contractual obligations to the Portfolio.
During the year ended December 31, 1995, the Mutual Fund Portfolio
paid total commissions of $30,008 on the purchase and sale of futures
contracts.
ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.
Under the Declaration of Trust, the Trustees are authorized to issue
beneficial interests in the Portfolio. Investors are entitled to participate
pro rata in distributions of taxable income, loss, gain and credit of the
Portfolio. Upon liquidation or dissolution of the Portfolio, investors are
entitled to share pro rata in the Portfolio's net assets available for
distribution to its investors. Investments in the Portfolio have no
preference, preemptive, conversion or similar rights and are fully paid and
nonassessable, except as set forth below. Investments in the Portfolio may not
be transferred.
B-10
<PAGE> 22
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
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
B-11
<PAGE> 23
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.
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.
B-12
<PAGE> 24
The assets of the Portfolio consist primarily of shares of underlying
mutual funds, which are valued at their respective net asset values under the
1940 Act. The underlying funds value securities in their portfolios for which
market quotations are readily available at their current market value
(generally the last reported sale price) and all other securities and assets at
fair value pursuant to methods established in good faith by the board of
directors of the underlying fund. Money market funds with portfolio securities
that mature in one year or less may use the amortized cost or penny-rounding
methods to value their securities. Securities having 60 days or less remaining
to maturity generally are valued at their amortized cost which approximates
market value.
Other assets of the Portfolio are valued at their current market value
if market quotations are readily available and, if market quotations are not
available, they are valued at fair value pursuant to methods established in
good faith by the Board of Trustees. Securities having 60 days or less
remaining to maturity are valued at their amortized cost.
ITEM 20. TAX STATUS.
The Portfolio is organized as a trust under New York law. Under the
method of operation of the Portfolio, the Portfolio is not subject to any
income tax. However, each investor in the Portfolio is taxable on its share
(as determined in accordance with the governing instruments of the Portfolio)
of the Portfolio's ordinary income and capital gain in determining its income
tax liability. The determination of such share is made in accordance with the
Internal Revenue Code of 1986, as amended, and regulations promulgated
thereunder.
The Portfolio's taxable year-end is December 31. Although, as
described above, the Portfolio is not subject to federal income tax, it files
appropriate federal income tax returns.
The Portfolio's assets, income and distributions are managed in such a
way that an investor in the Portfolio will be able to satisfy the requirements
of Subchapter M of the Internal Revenue Code of 1986, as amended, assuming that
the investor invested all of its investable assets in the Portfolio.
B-13
<PAGE> 25
ITEM 21. UNDERWRITERS.
The exclusive placement agent for the Portfolio is SBDS, which
receives no additional compensation for serving in this capacity. 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 Mutual Fund 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
Statements.
B-14
<PAGE> 26
GROWTH STOCK PORTFOLIO
Portfolio of Investments as of December 31, 1995
================================================================================
<TABLE>
<CAPTION>
SHARES OR VALUE
INDUSTRIES/CLASSIFICATIONS FACE AMOUNT (Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 36.7%
AEROSPACE/DEFENSE - (1.6%)
Boeing Company 6,300 $493,763
- --------------------------------------------------------------------------------------------
ALUMINUM - (1.1%)
Aluminum Company of America 6,300 333,113
- --------------------------------------------------------------------------------------------
AUTO AND TRUCK - (1.1%)
General Motors Corporation 6,300 333,113
- --------------------------------------------------------------------------------------------
BANKING - (1.7%)
J.P. Morgan & Company 6,300 505,575
- --------------------------------------------------------------------------------------------
BEVERAGE - (1.5%)
Coca Cola Company 6,300 467,775
- --------------------------------------------------------------------------------------------
CHEMICAL (BASIC) - (2.2%)
Dupont E.I. Nemours 6,300 440,212
Union Carbide Corporation 6,300 236,250
- --------------------------------------------------------------------------------------------
676,462
- --------------------------------------------------------------------------------------------
CHEMICAL (DIVERSIFIED) - (1.4%)
Minnesota Mining & Manufacturing 6,300 417,375
- --------------------------------------------------------------------------------------------
COMPUTER AND PERIPHERALS - (1.9%)
International Business Machines 6,300 578,025
- --------------------------------------------------------------------------------------------
DRUG - (1.4%)
Merck & Co., Incorporated 6,300 414,225
- --------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT - (1.8%)
General Electric Company 6,300 453,600
Westinghouse Electric Corporation 6,300 103,950
- --------------------------------------------------------------------------------------------
557,550
- --------------------------------------------------------------------------------------------
FINANCIAL SERVICES - (.9%)
American Express Company 6,300 260,663
- --------------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS - (1.7%)
Proctor & Gamble Company 6,300 522,900
- --------------------------------------------------------------------------------------------
MACHINERY (CONSTRUCTION & MINING) - (1.2%)
Caterpillar Incorporated 6,300 370,125
- --------------------------------------------------------------------------------------------
MULTIFORM - (3.0%)
Allied-Signal Incorporated 6,300 299,250
United Technologies Corporation 6,300 597,712
- --------------------------------------------------------------------------------------------
896,962
- --------------------------------------------------------------------------------------------
PAPER AND FOREST PRODUCTS - (.8%)
International Paper Company 6,300 238,612
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 27
<TABLE>
<S> <C> <C>
PETROLEUM (INTEGRATED) - (4.4%)
Chevron Corporation 6,300 330,750
Exxon Corporation 6,300 504,788
Texaco 6,300 494,550
- --------------------------------------------------------------------------------------------
1,330,088
- --------------------------------------------------------------------------------------------
PRECISION INSTRUMENT - (1.4%)
Eastman Kodak Company 6,300 422,100
- --------------------------------------------------------------------------------------------
RECREATION - (1.2%)
Walt Disney Company 6,300 371,700
- --------------------------------------------------------------------------------------------
RESTAURANT - (.9%)
McDonalds Corporation 6,300 284,287
- --------------------------------------------------------------------------------------------
RETAIL STORE - (1.1%)
Sears Roebuck & Company 6,300 245,700
Woolworth Corporation 6,300 81,900
- --------------------------------------------------------------------------------------------
327,600
- --------------------------------------------------------------------------------------------
STEEL (INTEGRATED) - (.3%)
Bethlehem Steel Corporation (1) 6,300 88,200
- --------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - (1.3%)
American Telephone & Telegraph Corporation 6,300 407,925
- --------------------------------------------------------------------------------------------
TIRE AND RUBBER - (.9%)
Goodyear Tire & Rubber Company 6,300 285,862
- --------------------------------------------------------------------------------------------
TOBACCO - (1.9%)
Philip Morris Companies Incorporated 6,300 570,150
- --------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $11,071,620) 11,154,150
- --------------------------------------------------------------------------------------------
U.S. TREASURY BILLS - 2.5%
*U.S. Treasury Bill, 5.19%, due 1/04/96 $600,000 599,741
*U.S. Treasury Bill, 5.26%, due 1/04/96 100,000 99,956
*U.S. Treasury Bill, 5.29%, due 1/04/96 50,000 49,978
U.S. Treasury Bill, 6.66%, due 1/11/96 6,700 6,687
- --------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY BILLS
(Cost $756,362) 756,362
- --------------------------------------------------------------------------------------------
*Pledged $703,000 face amount as collateral
on futures and options contracts
REPURCHASE AGREEMENTS - 30.8%
(Collateralized by U.S. government obligations -
market value $9,527,687)
Everen Securities, dated 12/29/95, 5.90%,
due 1/02/96 3,344,000 3,344,000
Smith Barney, dated 12/28/95, 5.90%,
due 1/02/96 6,000,000 6,000,000
- --------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $9,344,000) 9,344,000
- --------------------------------------------------------------------------------------------
<CAPTION
CONTRACTS
<S> <C> <C>
OPTIONS PURCHASED - 30.0%
CALL OPTIONS
S&P 500 futures contract expiring March, 1996 at 570 1,650 8,332,500
- --------------------------------------------------------------------------------------------
</TABLE>
Continued on next page
<PAGE> 28
GROWTH STOCK PORTFOLIO
Portfolio of Investments, continued
<TABLE>
<CAPTION>
CONTRACTS VALUE
(Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
PUT OPTIONS
S&P 500 futures contract expiring March, 1996 at 590 1,650 792,000
- --------------------------------------------------------------------------------------------
TOTAL OPTIONS PURCHASED
(Cost $8,122,488) 9,124,500
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS HELD LONG - 100%
(Cost $29,294,470) $30,379,012
============================================================================================
FUTURES CONTRACTS
Long, S&P 500 futures contracts
face amount $13,527,000 expiring in March, 1996. 43 $17,650
- --------------------------------------------------------------------------------------------
NET RECEIVABLE FOR FUTURES CONTRACTS SETTLEMENTS $17,650
- --------------------------------------------------------------------------------------------
</TABLE>
WRITTEN OPTIONS OUTSTANDING AS OF DECEMBER 31, 1995.
<TABLE>
<CAPTION>
CONTRACTS VALUE
(Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
CALL OPTIONS
S&F 500 futures contract expiring March, 1996 at 590 1,650 $(5,436,750)
- --------------------------------------------------------------------------------------------
PUT OPTIONS
S&P 500 futures contract expiring March, 1996 at 570 1,650 (420,750)
- --------------------------------------------------------------------------------------------
TOTAL OPTIONS WRITTEN
(Proceeds $4,881,362) $(5,857,500)
- --------------------------------------------------------------------------------------------
</TABLE>
(1)No dividend paid in 1995.
See accompanying notes to financial statements
<PAGE> 29
MUTUAL FUND PORTFOLIO
Portfolio of Investments as of December 31, 1995
===============================================================================
<TABLE>
<CAPTION>
SHARES OR VALUE
FACE AMOUNT (Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
MUTUAL FUNDS - 81.6%
Acorn International Fund 60 $1,000
Charles Schwab Money Market Fund 8,376,894 8,376,894
Constellation Fund 83 1,879
Fidelity Core Money Market Fund 5,549,983 5,549,983
Fidelity Equity Portfolio Growth Fund 333,197 12,628,156
Fidelity Growth & Income Fund 267,791 7,243,753
Founders Growth Fund 897,745 13,259,700
Neuberger & Berman Focus Fund 387,385 10,819,650
Neuberger & Berman Guardian Fund 457,705 10,540,947
Neuberger & Berman Manhattan Fund 173,284 2,103,666
PBNG Growth Fund 50,605 1,210,472
Pin Oak Aggressive Stock Fund (1) 23,041 384,793
T.Rowe Price New Era Fund 122 2,771
T.Rowe Price New Horizons Fund 724,089 14,843,822
Twentieth Century Ultra Fund 52,948 1,382,468
Twentieth Century Vista Fund 114,172 1,666,912
Weingarten Equity Fund 477,272 8,462,030
White Oak Growth Stock Fund 14,307 256,096
- --------------------------------------------------------------------------------------------
TOTAL MUTUAL FUNDS
(Cost $93,054,647) 98,734,992
- --------------------------------------------------------------------------------------------
U.S.TREASURY BILLS - 1.2%
*U.S..Treasury Bill, 5.29%, due 1/04/96 $150,000 149,912
*U.S. Treasury Bill, 5.22%, due 1/04/96 250,000 249,891
*U.S. Treasury Bill, 5.26%, due 1/04/96 1,000,000 999,486
U.S. Treasury Bill, 6.66%, due 1/11/96 25,200 25,149
- --------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY BILLS
(Cost $1,424,438) 1,424,438
- --------------------------------------------------------------------------------------------
*Pledged $1,400,000 face amount as collateral on futures contracts
REPURCHASE AGREEMENTS - 17.2%
(Collateralized by U.S. government obligations -
market value $21,328,465)
Everen Securities, dated 12/29/95, 5.90%, due 1/02/96 2,550,000 2,550,000
Smith Barney, dated 12/28/95, 5.90%, due 1/02/96 18,250,000 18,250,000
- --------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $20,800,000) 20,800,000
============================================================================================
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100%
(Cost $115,279,085) $120,959,430
============================================================================================
FUTURES CONTRACTS
<CAPTION>
CONTRACTS
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Long, S&P 500 futures contracts
face amount $32,468,625 expiring in March, 1996. 105 36,750
Long, Midcap futures contracts
face amount $1,962,450 expiring in March, 1996. 18 9,000
- --------------------------------------------------------------------------------------------
NET RECEIVABLE FOR FUTURES CONTRACTS SETTLEMENTS 45,750
- --------------------------------------------------------------------------------------------
</TABLE>
(1) No dividend paid on security in 1995.
See accompanying notes to financial statements
<PAGE> 30
UTILITIES STOCK PORTFOLIO
Portfolio of Investments as of December 31, 1995
===============================================================================
<TABLE>
<CAPTION>
SHARES OR VALUE
INDUSTRIES/CLASSIFICATIONS FACE AMOUNT (Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 91.6%
ELECTRIC/GAS UTILITY - (6.9%)
MDU Resources Group Incorporated 2,100 $41,738
Montana Power Company 1,300 29,412
Nipsco Industries Incorporated 1,700 65,025
Utilicorp United Incorporated 5,500 161,563
- --------------------------------------------------------------------------------------------
297,738
- --------------------------------------------------------------------------------------------
ELECTRIC UTILITY - (15.0%)
AES Corporation(1) 2,600 62,075
Cinergy Corporation 3,900 119,437
Ipalco Enterprises Incorporated 2,000 76,250
KU Energy Corporation 1,300 39,000
LG&E Energy Corporation 2,300 97,175
Pacificorp 8,000 170,000
Teco Energy Incorporated 3,000 76,875
- --------------------------------------------------------------------------------------------
640,812
- --------------------------------------------------------------------------------------------
DIVERSIFIED UTILITY - (3.8%)
Citizens Utilities Company Class B 12,686 160,158
- --------------------------------------------------------------------------------------------
NATURAL GAS (DISTRIBUTOR) - (19.8%)
Bay State Gas Company 1,700 47,175
Brooklyn UN Gas Company 3,900 114,075
Consolidated Natural Gas Company 2,900 131,587
MCN Corporation 6,200 144,150
Nicor Incorporated 1,800 49,500
Panhandle Eastern Corporation 5,500 153,313
Transcanada Pipelines Ltd. 3,200 44,000
UGI Corporation 2,000 41,500
Wicor Incorporated 3,800 122,550
- --------------------------------------------------------------------------------------------
847,850
- --------------------------------------------------------------------------------------------
OIL/GAS (DOMESTIC) - (7.3%)
Enron Corporation 3,000 114,375
Sante Fe Pacific Pipeline Partners 1,600 58,600
Williams Companies Incorporated 3,200 140,400
- --------------------------------------------------------------------------------------------
313,375
- --------------------------------------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT - (1.7%)
DSC Communications(1) 2,000 73,750
- --------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - (33.4%)
Alltel Corporation 5,100 150,450
American Telephone & Telegraph Corporation 1,500 97,125
Ameritech Corporation 2,500 147,500
Bell Atlantic Corporation 1,400 93,625
Century Telephone Enterprise 5,500 174,625
Cincinnati Bell Incorporated 2,000 69,500
Frontier Corporation 6,500 195,000
GTE Corporation 3,200 140,800
Nynex Corporation 300 16,200
Sprint Corporation 2,400 95,700
U.S. West Incorporated 6,000 214,500
United Media Group 2,000 38,000
- --------------------------------------------------------------------------------------------
1,433,025
- --------------------------------------------------------------------------------------------
</TABLE>
Continued on next page
<PAGE> 31
UTILITIES STOCK PORTFOLIO
Portfolio of Investments, continued
<TABLE>
<CAPTION>
SHARES OR VALUE
INDUSTRIES/CLASSIFICATIONS FACE AMOUNT (Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
WATER UTILITY - (3.7%)
American Water Works Incorporated 4,100 159,387
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $3,503,676) 3,926,095
- --------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 8.4%
(Collateralized by U.S. government obligations -
market value $360,995)
Everen Securities, dated 12/29/95, 5.90%, due 1/02/96 $360,000 360,000
- --------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $360,000) 360,000
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100%
(Cost $3,863,676) $4,286,095
============================================================================================
</TABLE>
(1)No dividend paid in 1995.
See accompanying notes to financial statements.
<PAGE> 32
BOND PORTFOLIO
Portfolio of Investments as of December 31, 1995
===============================================================================
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT (Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
U.S.TREASURY OBLIGATIONS - 85.7%
U.S. Treasury Note, 6.50%, due 8/15/2005 $7,700,000 8,214,938
U.S. Treasury Note, 6.50%, due 5/15/2005 5,000,000 5,327,344
*U.S. Treasury Bill, 5.17%, due 6/06/96 50,000 48,893
U.S. Treasury Bill, 6.66%, due 1/11/96 3,900 3,892
- --------------------------------------------------------------------------------------------
TOTAL U.S.TREASURY OBLIGATIONS
(Cost $12,924,502) 13,595,067
- --------------------------------------------------------------------------------------------
*Pledged $50,000 face amount as collateral on futures and options contracts
REPURCHASE AGREEMENTS - 14.3%
(Collateralized by U.S. Government obligations -
market value $2,271,669)
Everen Securities, dated 12/29/95, 5.90%, due 1/02/96 2,262,000 2,262,000
- --------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $2,262,000) 2,262,000
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS HELD LONG - 100%
(Cost $15,186,502) $15,857,067
- --------------------------------------------------------------------------------------------
FUTURES CONTRACTS
CONTRACTS
Long, 10 Year Bond futures contracts
face amount $2,291,875 expiring in March, 1996. 20 $5,625
- --------------------------------------------------------------------------------------------
NET RECEIVABLE FOR FUTURES CONTRACTS SETTLEMENTS $5,625
- --------------------------------------------------------------------------------------------
WRITTEN OPTIONS OUTSTANDING AS OF DECEMBER 31, 1995:
<CAPTION>
CONTRACTS VALUE
(Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
CALL OPTIONS
U.S. Treasury Note Contract Expiring
February, 1996 at 114 20 $19,063
- --------------------------------------------------------------------------------------------
TOTAL OPTIONS WRITTEN
(Proceeds $10,850) $19,063
- --------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements
<PAGE> 33
SHORT-TERM GLOBAL PORTFOLIO
Portfolio of Investments as of December 31, 1995
===============================================================================
<TABLE>
<CAPTION>
FACE AMOUNT VALUE
(Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
U.S.TREASURY - 42.4%
U.S. Treasury Note, 5.875%, due 8/15/98 $1,300,000 $1,321,531
*U.S. Treasury Bill, 5.34%, due 2/15/96 50,000 49,651
U.S. Treasury Bill, 6.66%, due 1/11/96 1,200 1,198
- --------------------------------------------------------------------------------------------
TOTAL U.S.TREASURY BILLS
(Cost $1,355,357) 1,372,380
- --------------------------------------------------------------------------------------------
*Pledged $10,000 face amount as collateral on futures contracts
U.S. GOVERNMENT OBLIGATIONS - 15.5%
Federal National Mortgage Association Discount Note,
5.60%, due 1/04/96 500,000 499,767
- --------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $499,767) 499,767
- --------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 42.1%
(Collateralized by U.S. government obligations -
market value $1,386,192)
Everen Securities, dated 12/29/95, 5.90%, due 1/02/96 612,000 612,000
Smith Barney, dated 12/28/95, 5.90%, due 1/02/96 750,000 750,000
- --------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $1,362,000) 1,362,000
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100%
(Cost $3,217,124) $3,234,147
============================================================================================
FUTURES CONTRACTS - 0.0%
<CAPTION>
CONTRACTS
<S> <C> <C>
Long, Canadian Dollar futures contracts
face amount $366,550 expiring in March, 1996. 5 $(1,150)
- --------------------------------------------------------------------------------------------
NET PAYABLE FOR FUTURES CONTRACTS SETTLEMENTS $(1,150)
- --------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements
<PAGE> 34
MONEY MARKET PORTFOLIO
Portfolio of Investments as of December 31, 1995
===============================================================================
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT (Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER - 39.1%
American Honda Finance, 5.73%, due 2/23/96 $10,000,000 $9,915,642
American Honda Finance, 5.62%, due 4/02/96 3,000,000 2,956,913
BOT Financial, 6.20%, due 1/05/96 11,000,000 10,992,422
Dupont Corporation, 6.25%, due 1/03/96 275,000 274,905
Duff & Phelps, 5.47%, due 5/09/96 6,000,000 5,882,395
GTE Corporation, 5.83%, due 2/16/96 10,000,000 9,925,506
Idaho Power, 6.25%, due 1/11/96 140,000 139,757
Jefferson Smurfit, 5.70%, due 3/01/96 1,200,000 1,188,600
Jefferson Smurfit, 5.70%, due 3/19/96 4,000,000 3,950,600
Laclede Gas, 6.25%, due 1/22/96 432,000 430,425
Marsh MacClellan, 5.58%, due 3/14/96 3,120,000 3,084,697
Mitsubishi Motor Credit Corporation, 6.25%, due 1/18/96 518,000 516,471
National Utilities, 5.58%, due 3/12/96 2,000,000 1,977,990
Nynex Corporation, 5.74%, due 2/06/96 3,000,000 2,982,780
Nynex Corporation, 5.77%, due 1/12/96 10,000,000 9,982,369
Pacific Bell, 6.25%, due 1/22/96 390,000 388,578
Public Services Electric & Gas, 5.93%, due 1/11/96 8,142,000 8,128,588
Public Services Electric 6 Gas, 5.90%, due 1/17/96 3,061,000 3,052,973
Tambrands, 5.50%, due 6/04/96 3,500,000 3,417,118
Torchmark, 5.75%, due 2/14/96 10,600,000 10,525,506
Whirlpool Corporation, 5.77%, due 1/31/96 10,700,000 10,648,551
- --------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $100,362,786) 100,362,786
- --------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 47.9%
American Telephone & Telegraph Capital Corporation, 4.52%,
due 8/30/96 250,000 247,743
American Telephone & Telegraph Capital Corporation, 7.40%,
due 11/01/96 500,000 505,230
Associates Corporation, 7.50%, due 10/15/96 150,000 151,722
Associates Corporation, 4.75%, due 8/01/96 250,000 248,321
BP America, Incorporated, 10.00%, due 3/08/96 5,000,000 5,034,208
BP, Incorporated, 10.15%, due 3/15/96 190,000 191,649
Bank One, Dayton, 5.95%, due 10/02/96 5,000,000 5,000,000
* Bank One Capital Demand Note, 5.83%,
next redemption date 7/11/96, due 4/01/2113 3,510,000 3,510,000
Barnett Bank, 10.00%, due 1/08/96 3,500,000 3,502,308
Bat Industries, 8.60%, due 8/30/96 550,000 558,052
* Bear Stearns Floating Rate Note, 5.76%, due 3/01/96 10,000,000 10,000,000
* Best Sands Corporation Floating Rate Note,
5.95%, next redemption date 1/04/96, due 7/01/2002 850,000 850,000
* Care Life Project Floating Rate Note, 5.95%,
next redemption date 1/04/96, due 8/01/2111 1,375,000 1,375,000
Conrail, 5.20%, due 2/12/96 1,000,000 999,051
Continental Bankcorp, 9.875%, due 6/15/96 1,250,000 1,272,500
Dean Witter, 8.92%, due 3/15/96 1,000,000 1,005,634
Dow Capital Corporation, 8.25%, due 2/15/96 65,000 65,146
Dupont Corporation, 8.45%, due 10/15/96 860,000 897,347
Eastman Kodak, 10.00%, due 6/15/96 125,000 126,948
Eli Lilly Corporation, 6.58%, due 12/20/96 250,000 252,275
*Espanola/Nambe Variable Rate Demand Note, 5.95%,
next redemption date 1/04/96, due 6/01/2006 2,500,000 2,500,000
*Exxon Shipping Floating Rate Note, 5.78%,
next redemption date 1/04/96, due 10/01/2111 7,000,000 7,000,000
Ford Motor Credit Corporation, 8.00%, due 10/01/96 1,800,000 1,825,930
Ford Motor Credit Corporation, 9.07%, due 7/05/96 893,000 906,417
</TABLE>
<PAGE> 35
MONEY MARKET PORTFOLIO
Portfolio of Investments, continued
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT (Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Ford Motor Credit Corporation, 4.85%, due 8/23/96 400,000 397,132
Ford Motor Credit Corporation, 8.25%, due 7/15/96 171,000 172,927
Ford Motor Credit Corporation, 9.10%, due 7/05/96 1,000,000 1,015,476
Ford Motor Credit Corporation, 8.25%, due 5/15/96 1,200,000 1,209,494
General Electric Capital Corporation,
4.615%, next redemption date 5/30/96 1,000,000 994,514
General Motors Acceptance Corporation, 9.00%, due 2/06/96 400,000 401,185
General Motors Acceptance Corporation, 8.00%, due 10/01/96 275,000 279,485
*General Motors Acceptance Corporation Floating Rate Note,
5.805%, next redemption date 4/13/96, due 4/13/98 10,000,000 10,000,000
*Hancor Incorporated Floating Rate Note, 5.95%,
next redemption date 1/04/95, due 12/01/2004 900,000 900,000
Hertz Corporation, 9.125%, due 8/01/96 2,850,000 2,902,407
Honeywell Corporation, 7.875%, due 5/14/96 1,445,000 1,453,511
Household Financial Corporation, 9.375%, due 2/15/96 2,000,000 2,007,835
IBM Corporation, 5.00%, due 2/26/96 250,000 249,698
IBM Credit Corporation, 5.06%, due 11/15/96 1,350,000 1,340,236
IBM Credit Corporation, 4.85%, due 11/05/96 3,000,000 2,973,731
International Bank, 8.75%, due 9/06/96 100,000 101,972
John Deere Corporation, 8.50%, due 4/10/96 200,000 201,383
Lockheed Corporation, 4.875%, due 2/15/96 85,000 84,848
Merrill Lynch & Company, Floating Rate Note, 5.925%,
due 11/18/96 10,000,000 10,000,000
Morgan Stanley Incorporated, 8.875%, due 4/01/96 400,000 402,793
Morgan Stanley Incorporated, 7.32%, due 1/15/97 500,000 507,941
Pacific Gas & Electric, 5.03%, due 3/22/96 800,000 798,800
Pepsico Incorporated, 7.875%, due 8/15/96 2,350,000 2,375,767
Philip Morris Companies, 8.875%, due 7/01/96 1,150,000 1,165,600
*Presrite Corporation Floating Rate Note, 5.95%,
next redemption date 1/04/96, due 1/01/2004 2,880,000 2,880,000
Regions Bank, Louisiana, 6.71%, due 4/11/96 5,000,000 5,011,262
Sears Roebuck & Company, 9.00%, due 9/15/96 1,000,000 1,020,902
Sears Roebuck & Company, 8.55%, due 8/01/96 2,000,000 2,028,466
Smith Barney Holding Company, 5.375%, due 6/01/96 5,380,000 5,365,423
Southwestern Bell, 7.90%, due 8/23/96 1,500,000 1,518,192
Southwestern Bell, 8.30%, due 6/01/96 100,000 101,028
Suntrust Banks, 8.375%, due 3/01/96 1,130,000 1,134,467
U.S. West Capital Funding Corporation, 8.00%, due 10/15/96 290,000 294,634
Unilever, 8.00%, due 5/28/96 450,000 453,838
Union Electric, 5.50% due 5/01/96 100,000 99,868
Virginia Electric & Power, 6.35%, due 5/30/96 3,000,000 3,005,191
Virginia Electric & Power, 8.35%, due 6/15/96 1,000,000 1,010,524
WMX Technologies, 4.875%, due 6/15/96 215,000 213,945
Waste Management Corporation, 7.875%, due 8/15/96 1,000,000 1,011,214
Waste Management Corporation, 4.875%, due 6/15/96 100,000 99,547
Weyerhaeuser Corporation, 8.41%, due 5/17/96 100,000 100,863
White Castle Corporation, Floating Rate Note, 5.95%,
next redemption date 1/04/96 7,000,000 7,000,000
World Book Finance Corporation, 8.125%, due 9/01/96 500,000 506,839
- --------------------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS
(Cost $122,818,621) 122,818,621
- --------------------------------------------------------------------------------------------
U.S. TREASURY BILLS - 0.1%
U.S. Treasury Bill, 6.66%, due 1/11/96 66,000 67,874
- --------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY BILLS
(Cost $67,874) 67,874
- --------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 36
<TABLE>
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 4.6%
Federal Farm Credit Note, 5.91%, due 6/24/96 500,000 500,614
*Student Loan Marketing Association Floating Rate Note,
5.70%, due 11/10/98, next redemption date 1/02/96 5,000,000 5,000,000
*Student Loan Marketing Association Floating Rate Note,
5.75%, due 8/03/99, next redemption date 1/02/96 4,350,000 4,355,249
*Student Loan Marketing Association Floating Rate Note,
5.68%, due 11/24/97, next redemption date 1/02/96 2,000,000 1,999,610
- --------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $11,855,473) 11,855,473
- --------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 8.3%
(Collateralized by U.S. government obligations -
market value $21,644,319)
Everen Securities, dated 12/29/95, 5.90%,
due 1/02/96 20,556,000 20,556,000
Star Bank N.A., dated 12/29/95, 5.30%,
due 1/02/96 950,000 950,000
- --------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $21,506,000) 21,506,000
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100%
(Cost $256,610,754) $256,610,754
============================================================================================
</TABLE>
*Floating Rate as of 12/31/95.
See accompanying notes to financial statements
<PAGE> 37
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<CAPTION>
MUTUAL GROWTH UTILITIES SHORT-TERM MONEY
FUND STOCK STOCK BOND GLOBAL MARKET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS :
Investments at market value* $100,159,430 $21,035,012 $3,926,095 $13,595,067 $1,872,147 $235,104,754
Repurchase Agreements* 20,800,000 9,344,000 360,000 2,262,000 1,362,000 21,506,000
Cash -- -- 121 124 85 206
Receivable for futures contracts settlement 45,750 17,650 -- 5,625 -- --
Interest receivable 61,492 5,577 177 232,124 29,641 2,245,756
Dividends receivable 1,139,291 21,609 11,374 -- -- --
Prepaid/Other assets 454 109 -- 68 19 1,251
Unamortized organization costs 10,377 7,538 40,146 7,537 7,181 7,538
- -----------------------------------------------------------------------------------------------------------------------------------
Total Assets 122,216,794 30,431,495 4,337,913 16,102,545 3,271,073 258,865,505
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for securities purchased -- -- -- -- -- 2,680,949
Payable to corresponding Fund -- -- -- -- -- 1,477,153
Payable for futures contracts settlement -- -- -- -- 1,150 --
Written options at market value* -- 5,857,500 -- 19,063 -- --
Payable to investment adviser 85,828 21,414 3,325 4,275 -- 33,706
Accrued fund accounting fees 4,159 2,496 628 1,699 636 4,818
Other accrued liabilities 17,678 13,055 43,090 11,486 7,042 20,505
- -----------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 107,665 5,894,465 47,043 36,523 8,828 4,217,131
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Capital 116,428,784 24,428,626 3,868,451 15,403,670 3,245,222 254,648,374
- -----------------------------------------------------------------------------------------------------------------------------------
Net unrealized gain on investments 5,680,345 108,404 422,419 662,352 17,023 --
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets $122,109,129 $24,537,030 $4,290,870 $16,066,022 $3,262,245 $254,648,374
- -----------------------------------------------------------------------------------------------------------------------------------
*Securities at cost 115,279,085 24,413,108 3,863,676 15,175,652 3,217,124 256,610,754
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements
<PAGE> 38
STATEMENTS OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
MUTUAL GROWTH UTILITIES SHORT-TERM MONEY
FUND STOCK STOCK BOND GLOBAL MARKET
PORTFOLIO PORTFOLIO PORTFOLIO* PORTFOLIO PORTFOLIO PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME - NET:
Interest $ 1,911,196 $1,070,422 $ 8,057 $ 924,478 $236,424 $12,128,882
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends 329,219 127,830 54,996 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Income 2,240,415 1,198,252 63,053 924,478 236,424 12,128,882
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
- ------------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 874,473 238,640 14,297 57,855 15,829 648,665
Legal fees 1,853 1,679 1,100 1,679 1,609 1,555
Audit fees 13,482 10,234 3,028 9,125 5,544 15,695
Custodian fees 11,483 7,236 1,755 3,624 3,649 17,104
Accounting fees 47,427 28,335 4,065 18,951 7,457 58,111
Trustees fees and expenses 5,223 5,223 3,776 5,223 5,130 5,385
Insurance 2,241 661 -- 369 161 5,920
Amortization of organization cost 5,438 4,978 4,744 4,979 4,745 4,978
Other expenses 399 399 1,611 399 432 432
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses 962,019 297,385 34,376 102,204 44,556 757,845
Investment advisory fees waived -- -- -- (19,580) (15,829) (349,425)
Directed brokerage payments received -- -- (1,212) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Expenses - net 962,019 297,385 33,164 82,624 28,727 408,420
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME - NET 1,278,396 900,867 29,889 841,854 207,697 11,720,462
- ------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on futures contracts 2,494,274 3,480,775 -- (47,455) (13,514) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 13,060,418 835,258 (1,067) 1,035,942 43,853 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation
of investments 5,680,803 111,506 422,419 667,977 17,441 --
- ------------------------------------------------------------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 21,235,495 4,427,539 421,352 1,656,464 47,780 --
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $22,513,891 $5,328,406 $451,241 $2,498,318 $255,477 $11,720,462
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the period June 21, 1995 (commencement of operations) to December 31, 1995.
See accompanying notes to financial statements
<PAGE> 39
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1994 and December 31, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Mutual Fund Growth Stock Utilities Stock
Portfolio Portfolio Portfolio*
Year ended December 31, Year ended December 31, Year ended December 31,
1995 1994 1995 1994 1995
INCREASE (DECREASE)
IN NET ASSETS:
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Investment income - net $ 1,278,396 $ 2,272,777 $ 900,867 $ 565,496 $ 29,889
Net realized gain (loss)
on investments
and futures contracts 15,554,692 302,941 4,316,003 705,537 (1,067)
Net change in unrealized
appreciation (depreciation)
of investments 5,680,803 (252,062) 111,506 (1,392,790) 422,419
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from operations 22,513,891 2,323,656 5,328,406 (121,757) 451,241
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS
OF INVESTORS'
BENEFICIAL INTERESTS:
Contributions 34,671,819 26,769,231 1,680,821 1,440,673 3,908,655
Withdrawals (18,261,284) (27,513,563) (4,640,744) (5,322,563) (69,026)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting from
transactions of investors'
beneficial interests 16,410,535 (744,332) (2,959,923) (3,881,890) 3,839,629
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE
(DECREASE)
IN NET ASSETS 38,924,426 1,579,324 2,368,483 (4,003,647) 4,290,870
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS -
Beginning of period 83,184,703 81,605,379 22,168,547 26,172,194 --
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS -
End of period $ 122,109,129 $ 83,184,703 $ 24,537,030 $ 22,168,547 $ 4,290,870
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Bond Short-Term Global Money Market
Portfolio Portfolio Portfolio
Year ended December 31, Year ended December 31, Year ended December 31,
1995 1994 1995 1994 1995 1994
INCREASE (DECREASE)
IN NET ASSETS:
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Investment income- net $ 841,854 $ 526,976 $ 207,697 $ 279,212 $ 11,720,462 $ 8,115,651
Net realized gain (loss)
on investments
and futures contracts 988,487 (614,421) 30,339 (147,601) -- --
Net change in unrealized
appreciation (depreciation)
of investments 667,977 (5,626) 17,441 (5,068) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from operations 2,498,318 (93,071) 255,477 126,543 11,720,462 8,115,651
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS
OF INVESTORS'
BENEFICIAL INTERESTS:
Contributions 2,890,694 2,140,676 1,159,854 1,025,710 753,617,719 733,486,217
Withdrawals (2,330,962) (2,217,176) (2,087,949) (11,962,648) (735,213,083) (717,226,708)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting from
transactions of investors'
beneficial interests 559,732 (76,500) (928,095) (10,936,938) 18,404,636 16,259,509
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE
(DECREASE)
IN NET ASSETS 3,058,050 (169,571) (672,618) (10,810,395) 30,125,098 24,375,160
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS -
Beginning of period 13,007,972 13,177,543 3,934,863 14,745,258 224,523,276 200,148,116
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS -
End of period $ 16,066,022 $ 13,007,972 $ 3,262,245 $ 3,934,863 $ 254,648,374 $ 224,523,276
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the period June 21, 1995 (commencement of operations) to December 31, 1995.
See accompanying notes to financial statements
<PAGE> 40
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Mutual Fund Portfolio
Year Ended Dec 31,
Ratios/Supplemental Data 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets, End of Period ($000) 122,109 83,185 81,605
Ratio of Expenses to Average Net Assets* 0.95% 1.01% 1.03%
Ratio of Net Investment Income to Average Net Assets 1.26% 2.76% 0.09%
Portfolio Turnover Rate 186.13% 168.17% 279.56%
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Growth Stock Portfolio
For The Period
Year Ended Dec 31, May 1, 1992
Ratios/Supplemental Data 1995 1994 1993 to Dec 31, 1992
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets, End of Period ($000) 24,537 22,169 26,172 25,556
Ratio of Expenses to Average Net Assets* 1.25% 1.23% 1.23% 1.22% (1)
Ratio of Net Investment Income to Average Net Assets 3.78% 2.35% 0.99% 2.04% (1)
Portfolio Turnover Rate 337.57% 102.76% 99.54% 129.44%
Average brokerage commission per share $0.0806 N/A N/A N/A
</TABLE>
(1)Annualized
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Utilities Stock Portfolio
For The Period
June 21, 1995*
Ratios/Supplemental Data to Dec 31, 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net Assets, End of Period ($000) 4,291
Ratio of Expenses to Average Net Assets* 2.32%(1)
Ratio of Net Investment Income to Average Net Assets 2.09%(1)
Ratio of Expenses to Average Net Assets
before directed brokerage payments 2.40%(1)
Ratio of Net Investment Income to Average Net Assets
before directed brokerage payments 2.01%(1)
Portfolio Turnover Rate 5.06%
Average brokerage commission per share $0.0600
</TABLE>
(1)Annualized
*Date of commencement of operations
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Bond Portfolio
For The Period
Year Ended December 31, May 1, 1992
Ratios/Supplemental Data 1995 1994 1993 to Dec 31, 1992
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets, End of Period ($000) 16,066 13,008 13,178 11,126
Ratio of Expenses to Average Net Assets* 0.57% 0.56% 0.60% 0.58%(1)
Ratio of Net Investment Income to Average Net Assets 5.82% 4.15% 4.62% 5.40%(1)
Ratio of Expenses to Average Net Assets, before waiver of fees 0.71% 0.70% 0.71% 0.80%(1)
Ratio of Net Investment Income to Average
Net Assets, before waiver of fees 5.68% 4.01% 4.51% 5.18%(1)
Portfolio Turnover Rate 232.34% 707.57% 235.74% 132.53%
</TABLE>
(1) Annualized
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Short-Term Global Portfolio
For The Period
Year Ended December 31, May 27, 1992
Ratios/Supplemental Data 1995 1994 1993 to Dec 31, 1992
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets, End of Period ($000) 3,262 3,935 14,745 34,809
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets* 0.73% 0.62% 0 64% 0 66%(1)
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets 5.24% 3.62% 4.58% 3.88%(1)
Ratio of Expenses to Average Net Assets, before waiver of fees 1.13% 0.86% 0.64% 0.72%(1)
Ratio of Net Investment Income to Average Net Assets, before waiver of fees 4.84% 3.38% 4.58% 3.82%(1)
Portfolio Turnover Rate 369.36% 0.00% 780.99% 380.28%(1)
</TABLE>
(1) Annualized
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Money Market Portfolio
For the Period
Year Ended Dec 31, May 1, 1992
Ratios/Supplemental Data 1995 1994 1993 to Dec 31, 1992
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets, End of Period ($000) 254,648 224,523 200,148 244,272
Ratio of Expenses to Average Net Assets* 0.21% 0.19% 0.19% 0.18%(1)
Ratio of Net Investment Income to Average Net Assets 5.87% 4.28% 3.09% 3.60%(1)
Ratio of Expenses to Average Net Assets, before waiver of fees 0.38% 0.39% 0.40% 0.40%(1)
Ratio of Net Investment Income to Average Net Assets, before waiver of fees 5.70% 4.08% 2.88% 3.38%(1)
Portfolio Turnover Rate N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)Annualized
*Please refer to pages 27-29 for total expense ratios relating to each
corresponding Fund.
See accompanying notes to financial statements
<PAGE> 41
MUTUAL FUND PORTFOLIO
GROWTH STOCK PORTFOLIO
UTILITIES STOCK PORTFOLIO
BOND PORTFOLIO
SHORT-TERM GLOBAL PORTFOLIO
MONEY MARKET PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
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 five 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 and Short-Term Global Portfolios 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. During the period ended December 31, 1995 the Portfolios
wrote the following option contracts:
<TABLE>
<CAPTION>
Growth Stock Portfolio Bond Portfolio Mutual Fund Portfolio Short-Term Global Portfolio
No. of No. of No. of No. of
Contracts Premiums Contracts Premiums Contracts Premiums Contracts Premiums
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Outstanding at Beginning of Period 0 $ 0 0 $ 0 0 $ 0 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Options Written 3,342 4,927,214 185 67,650 173 186,057 24 7,470
- ------------------------------------------------------------------------------------------------------------------------------------
Options Terminated (42) (45,852) (165) (56,800) (173) (186,057) (24) (7,470)
- ------------------------------------------------------------------------------------------------------------------------------------
Outstanding at End of Period 3,300 $ 4,881,362 20 $ 10,850 0 $ 0 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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.
In the case of the Short-Term Global Portfolio, futures and options contracts
entered into will typically be futures and options on futures of a foreign
currency. The Portfolio is presently engaging only in the buying and selling of
futures contracts on foreign currencies. The expectation is that the Portfolio
will be able to participate in interest rate differentials between the U.S.
dollar and foreign currencies by investing in futures on the foreign currencies
in lieu of investing in short-term foreign debt instruments. At the same time,
the Portfolio will take advantage of the favorable transaction cost associated
with the purchase of a futures contract in lieu of a cash instrument. To the
extent that the Portfolio enters into futures contracts on foreign currencies,
the Portfolio exposes itself to a liability, which at a maximum cannot exceed
the value given for the contracts, and will be required to pay or receive a sum
of money measured by the change in the market value of that currency's index.
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
<PAGE> 42
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.
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 six
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 and Short-Term Global Income Portfolios, 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, 1995, RMA voluntarily waived a portion of its investment advisory
fees in the Money Market and Bond Portfolios, and all of its investment advisory
fees in the Short-Term Global Income Portfolio.
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, Short-Term Global,
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.
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, 1995 were as
follows:
<TABLE>
<CAPTION>
Purchases Sales
- --------------------------------------------------------------------------------
<S> <C> <C>
Mutual Fund Portfolio $153,526,438 $77,373,285
- --------------------------------------------------------------------------------
Growth Stock Portfolio $ 20,462,275 $10,183,074
- --------------------------------------------------------------------------------
Utilities Stock Portfolio $ 3,636,056 $ 131,312
- --------------------------------------------------------------------------------
</TABLE>
As of December 31, 1995, the aggregate cost of investments and net unrealized
appreciation (depreciation) for Federal income tax purposes was comprised of the
following:
<TABLE>
<CAPTION>
Net Unrealized
Unrealized Unrealized Appreciation
Investment Appreciation Depreciation (Depreciation)
Cost of Investments of Investments of Investments
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mutual Fund Portfolio $115,644,899 $6,814,624 $(1,500,093) $5,314,531
- -------------------------------------------------------------------------------------------------------------------------------
Growth Stock Portfolio $ 24,438,982 $4,474,745 $(4,392,215) $ 82,530
- -------------------------------------------------------------------------------------------------------------------------------
Utilities Stock Portfolio $ 3,863,676 $ 428,434 $ (6,015) $ 422,419
- -------------------------------------------------------------------------------------------------------------------------------
Bond Portfolio $ 15,173,624 $ 664,380 $ 0 $ 664,380
- -------------------------------------------------------------------------------------------------------------------------------
Short-Term Global
Portfolio $ 3,217,124 $ 17,023 $ 0 $ 17,023
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 43
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees of the Mutual Fund Portfolio, Growth
Stock Portfolio, Utilities Stock Portfolio, Bond Portfolio, Short-Term Global
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, Short-Term Global Portfolio, and Money Market Portfolio, including
the schedules of portfolio investments, as of December 31, 1995, 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, 1995, 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, Short-Term Global Portfolio, and Money Market Portfolio at December
31, 1995, 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
KPMG Peat Marwick LLP
Columbus, Ohio
February 2, 1996
<PAGE> 44
PART C
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS
The following report and financial statement are included in
Part B: Portfolio of Investments - December 31, 1995;
Statements of Assets and Liabilities - December 31, 1995;
Statements of Operations - for the year ended December 31,
1995; Statements of Changes in Net Assets for the years ended
December 31, 1995 and 1994; Financial Highlights for the years
ended December 31, 1995, 1994 and 1993; Notes to Financial
Statements; Independent Auditors' Report dated February 2,
1996.
(b) EXHIBITS
*1. Declaration of Trust of the Registrant.
*2. By-Laws of the Registrant.
*5. Form of Investment Advisory Agreement between the Registrant
and R. Meeder & Associates, Inc.
*6. Form of Exclusive Placement Agent Agreement between the
Registrant and Signature Broker-Dealer Services, Inc.
**8. Form of Custody Agreement between the Registrant and Star Bank,
N.A., Cincinnati.
**9.(a) Form of Administration Agreement between the Registrant and
Mutual Funds Service Co. (MFSCo)
(b) Form of Accounting Services Agreement between the Registrant
and MFSCo.
11. Consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants, filed herewith.
**13. Investment representation letters of initial investors.
- -------------------
*Filed April 30, 1992.
**Filed June 8, 1992 and incorporated herein by reference.
C-1
<PAGE> 45
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
<TABLE>
<S> <C>
(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Beneficial Interests 3 (as of December 31, 1995)
</TABLE>
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:
<TABLE>
<CAPTION>
NAME ADDRESS
<S> <C>
Signature Broker-Dealer 6 St. James Avenue,
Services, Inc. Suite 900
(exclusive placement agent) Boston, MA 02116
Mutual Funds Service Co. 6000 Memorial Drive
(transfer and accounting Dublin, OH 43017
services agent)
R. Meeder & Associates, Inc. 6000 Memorial Drive
(investment adviser) Dublin, OH 43017
</TABLE>
C-2
<PAGE> 46
<TABLE>
<CAPTION>
NAME ADDRESS
<S> <C>
Star Bank, N.A., Cincinnati Star Bank Center
(custodian) 425 Walnut Street
Cincinnati, OH 45202
</TABLE>
ITEM 31. MANAGEMENT SERVICES.
Not applicable.
ITEM 32. UNDERTAKINGS.
Not applicable.
C-3
<PAGE> 47
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940,
the Registrant has duly caused this Amendment to its Registration Statement on
Form N-1A to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dublin and State of Ohio on the 19th day of April,
1996.
MUTUAL FUND PORTFOLIO
By Donald F. Meeder
---------------------------------
Donald F. Meeder
Secretary/Treasurer
<PAGE> 1
[KPMG LETTERHEAD]
INDEPENDENT ACCOUNTANTS' CONSENT
The Board of Trustees of
Mutual Fund Portfolio:
We consent to the use of our report included herein dated February 2, 1996 on
the financial statements of the Mutual Fund Portfolio, Growth Stock Portfolio,
Utilities Stock Portfolio, Bond Portfolio, Short-Term Global Portfolio, and
Money Market Portfolio as of December 31, 1995 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
KPMG Peat Marwick LLP
Columbus, Ohio
April 18, 1996
