<PAGE>
[LOGO] CHAIRMAN'S LETTER
Dear Shareholder:
We are pleased to provide you with this semiannual report for the BNY Hamilton
Funds. Please take a few moments to review the discussions it contains
concerning the investment environment and your Funds' strategy and performance
during the first six months of 1998.
The first half of this year was another very rewarding period for investors as
the bull market of the 1990's continued to roll along. We are pleased to report
that the BNY Hamilton Funds were all positioned well to benefit from these
positive market trends. At the same time, however, we also want to raise the
caution that times this good can not be expected to last forever. In their
planning for the future, investors need to be prepared to face all kinds of
market conditions - negative as well as positive. In our view it is important to
not lose sight of the following guiding principles for successful investing:
- - MAINTAIN A LONG-TERM PERSPECTIVE. Over the short term, investments will
fluctuate in value. But, over time, they can achieve their full potential. That
is why you should stay focused on long-term results, not short-term performance
swings.
- - REMAIN DIVERSIFIED. Performance among different types of securities tends to
move in cycles. So, to reduce risk and capture attractive long-term return
potential, it is prudent to remain broadly diversified.
- - STAY TRUE TO YOUR ASSET ALLOCATION STRATEGY. Asset allocation is the most
important decision for long term investors. Your investment strategy is a
function of your goals and tolerance for market volatility. As such, this
strategy should be designed to maximize return potential and limit risk in all
market climates.
Investing with the BNY Hamilton Funds makes it easy to put these principles into
practice. The BNY Hamilton Funds include an array of ten well diversified funds
representing all three major asset classes - money markets, fixed income and
equities. Instead of trying to time the market's ups and downs, you can rely on
professional investment management focused on meeting the long-term objectives
of each Fund.
We appreciate the confidence you have placed in our Funds. On behalf of everyone
at BNY Hamilton Funds, thank you for investing with us. We look forward to
continuing to help you achieve your investment goals.
Sincerely,
/s/ Edward L. Gardner
Edward L. Gardner
Chairman of the Board
<PAGE>
[LOGO] INVESTMENT ADVISOR'S LETTER
Dear Shareholder:
In the first half of this year a nearly ideal combination of healthy growth and
low inflation in the U.S. economy continued to provide strong support for the
financial markets. Stocks surged and fixed income securities posted solid
returns as the bull market of the past few years extended its run. However,
while investors had plenty to cheer, the crisis in Asia was beginning to seem
less remote as the first half drew to a close.
As in 1997, large-capitalization multi-national stocks stole the spotlight
within the U.S. equity market as investors favored the safety and predictability
that these companies offer in uncertain times. Despite generally stronger
earnings gains, small-capitalization stocks have trailed behind larger stocks
again so far this year. In sharp contrast to last year's experience,
international equities provided returns that were very competitive with U.S.
stocks in the first half. Strength in European markets as countries and
companies geared up for European Monetary Union (EMU) in 1999 was the primary
driver of this improved performance. The MSCI EAFE (Morgan Stanley Capital
International Europe, Australasia and Far East) index of developed country
markets returned 16.08% for the first six months of this year. In comparison,
the S&P 500 index of large-capitalization U.S. stocks returned 17.74% and the
Russell 2000 index of small-capitalization U.S. stocks returned 4.93%.
Benefiting in part from a "flight to quality" in the wake of the crisis in Asia,
intermediate and long-term interest rates in the U.S. declined modestly during
the first half of the year despite a stable federal funds rate, tight labor
market conditions and surprisingly strong consumer spending. U.S. government
securities generally outperformed corporate issues as concerns about the impact
of Asian-related weakness led to some widening in credit spreads. The
performance of tax-exempt securities lagged taxable issues due to very heavy new
issuance in the municipal bond market. For the first half, the Lehman
Intermediate Government/Corporate index returned 3.46%, the Lehman Five-Year
General Obligation Municipal Bond index returned 2.20% and 91-day U.S. Treasury
Bills returned 2.71%.
In addition to the positive economic fundamentals of healthy growth, low
inflation, falling unemployment and rising corporate profits, favorable
supply/demand dynamics within the financial markets were also an important
factor in the first half's rewarding results. Very strong inflows of cash into
mutual funds evidenced continued solid demand for stocks and bonds from
individual investors saving for the future. Record levels of mergers and
acquisitions and continuing heavy share repurchase activity by corporations
served to reduce the supply of equities outstanding. An emerging surplus in the
federal budget suggested that the supply of outstanding Treasury securities
might begin to contract as well, which would be a very bullish development for
the bond market.
After precipitating a 10% correction in the stock market during the fourth
quarter of last year, the crisis in Asia seemed to recede from the headlines
during much of the first half of this year. In fact, during the early part of
the year the weakness in Asia was generally considered to be a positive for the
U.S. markets. With domestic economic activity displaying surprising vigor and
labor market conditions in particular becoming very tight, the slow-down in
export activity served to reduce the risk of overheating. Similarly, rising
volumes of cheaper imports also served to keep inflation in check and reduce the
risk of rising interest rates. As the half drew to a close, however, investors'
attention began to shift toward the negative implications which weakness in Asia
might hold for corporate profitability.
<PAGE>
[LOGO]
Uncertainties concerning developments in Asia are likely to continue to weigh on
investor psychology and contribute to market volatility over the near term. Over
the longer term, we expect investor focus to return to the underlying
fundamentals, which remain sound, in our judgment. The prospects we foresee for
further economic expansion accompanied by low inflation should continue to
represent a very positive backdrop for the financial markets as they have in
recent years.
Sincerely,
/s/ Kevin J. Bannon
Kevin J. Bannon
Executive Vice President and
Chief Investment Officer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
QUESTIONS & ANSWERS................................................... PAGE 1
BNY HAMILTON EQUITY INCOME FUND
Schedule of Investments............................................. 19
Statement of Assets and Liabilities................................. 23
Statement of Operations............................................. 23
Statements of Changes in Net Assets................................. 24
Financial Highlights................................................ 25
BNY HAMILTON LARGE CAP GROWTH FUND
Schedule of Investments............................................. 27
Statement of Assets and Liabilities................................. 30
Statement of Operations............................................. 30
Statements of Changes in Net Assets................................. 31
Financial Highlights................................................ 32
BNY HAMILTON SMALL CAP GROWTH FUND
Schedule of Investments............................................. 33
Statement of Assets and Liabilities................................. 36
Statement of Operations............................................. 36
Statements of Changes in Net Assets................................. 37
Financial Highlights................................................ 38
BNY HAMILTON INTERNATIONAL EQUITY FUND
Schedule of Investments............................................. 39
Industry Diversification............................................ 45
Statement of Assets and Liabilities................................. 47
Statement of Operations............................................. 47
Statements of Changes in Net Assets................................. 48
Financial Highlights................................................ 49
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
Schedule of Investments............................................. 50
Statement of Assets and Liabilities................................. 54
Statement of Operations............................................. 54
Statements of Changes in Net Assets................................. 55
Financial Highlights................................................ 56
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
Schedule of Investments............................................. PAGE 58
Statement of Assets and Liabilities................................. 62
Statement of Operations............................................. 62
Statements of Changes in Net Assets................................. 63
Financial Highlights................................................ 64
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
Schedule of Investments............................................. 65
Statement of Assets and Liabilities................................. 70
Statement of Operations............................................. 70
Statements of Changes in Net Assets................................. 71
Financial Highlights................................................ 72
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
Schedule of Investments............................................. 74
Diversification by State............................................ 83
Statement of Assets and Liabilities................................. 84
Statement of Operations............................................. 84
Statements of Changes in Net Assets................................. 85
Financial Highlights................................................ 86
BNY HAMILTON MONEY FUND
Schedule of Investments............................................. 87
Statement of Assets and Liabilities................................. 96
Statement of Operations............................................. 96
Statements of Changes in Net Assets................................. 97
Financial Highlights................................................ 98
BNY HAMILTON TREASURY MONEY FUND
Schedule of Investments............................................. 101
Statement of Assets and Liabilities................................. 103
Statement of Operations............................................. 103
Statements of Changes in Net Assets................................. 104
Financial Highlights................................................ 105
NOTES TO FINANCIAL STATEMENTS......................................... 106
SUPPLEMENTAL PROXY INFORMATION........................................ 115
DIRECTORS AND OFFICERS................................................ 116
</TABLE>
<PAGE>
[LOGO] BNY HAMILTON EQUITY INCOME FUND
AN INTERVIEW WITH ROBERT G. KNOTT, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 1998?
A. The Fund posted a total return of 10.74% for Institutional Shares and 10.53%
for Investor Shares.(1) The Fund's return compared favorably to the Lipper
Equity Income Fund Index(2), which was up 9.59%, but trailed the S&P 500
Index(3), which returned 17.74%. The Fund's results relative to the S&P 500
were largely a function of the Fund's greater emphasis on yield. An 11%
weighting in REITs (real estate investment trusts) helped the Fund's dividend
yield but hurt its total return as these defensive issues lagged most stocks
in the strong first half market. On June 30th the Institutional Shares and
Investor Shares yielded 1.72% and 1.54%, respectively, compared to 1.41% for
the S&P 500.
Q. HOW DID MARKET FACTORS INFLUENCE FUND PERFORMANCE?
A. Large capitalization growth stocks were the market leaders during a very
strong first half for stocks, and the Fund was well represented in this type
of issue. Higher yielding more defensive issues, which also play an important
role in the Fund's strategy, generally did not keep up in this bullish
environment.
Q. DID EVENTS IN ASIA AFFECT PERFORMANCE?
A. Events in Asia had relatively little impact on the Fund, as the Fund was
underweighted in the technology sector, which was affected most directly by
the economic weakness in that region. In addition, many of the income
oriented stocks which the Fund owns, such as electric utilities, derive
essentially all of their income from domestic sources.
Q. WHAT WERE YOUR PRIMARY STRATEGIES DURING THE PERIOD?
A. The Fund's basic structure has remained largely unchanged since the start of
the year. As the interest rate environment remained favorable, we continued
to emphasize stocks in the financial services area (19% of the portfolio),
one of the market's strongest sectors. In keeping with our focus on interest
rate-sensitive areas of the market, we also continued to invest in electric
utilities, which showed improved performance during the second quarter.
We continued to de-emphasize the technology sector, which has endured
significant volatility and unpredictable earnings growth. We now have what we
consider to be a reasonable exposure to technology stocks. We also reduced
exposure to oil service stocks, which suffered the effects of falling oil
prices worldwide.
Within the REIT sector, we repositioned the Fund's holdings to favor
REITs having more stable and predictable cash flows. Despite their
underperformance relative to the general market, they offered attractive
yields during the period, and we still believe that REITs offer advantages on
a long-term basis.
We also maintained the Fund's 20% exposure to convertible securities,
which offered yield advantages as well as underlying growth.
1
<PAGE>
[LOGO]
Q. DID ANY SPECIFIC STOCK HOLDINGS OFFER NOTABLE PERFORMANCE?
A. Within the financial services sector, the Fund enjoyed strong performance
from banks, insurance companies and brokerage firms. In particular, American
International Group and American Express offered excellent returns. The
communications services sector also did well and Lucent Technologies was
another top performer.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. We do not expect to make any significant changes to the Fund's overall
structure. If the market continues its upward course, we may take profits in
stocks that have appreciated significantly. At that time, we also may
consider taking a more defensive stance by shifting some additional funds
into convertible securities. The Fund remains broadly diversified, which
should stand it in good stead during periods of volatility.
<TABLE>
<CAPTION>
TRAILING TRAILING TRAILING SINCE
CURRENT TRAILING YEAR 12 3 YEARS 5 YEARS INCEPTION
PERIODS ENDED JUNE 30, 1998 MONTH 3 MONTHS TO DATE MONTHS ANNUALIZED ANNUALIZED ANNUALIZED
<S> <C> <C> <C> <C> <C> <C> <C>
BNY HAMILTON EQUITY INCOME
FUND (INSTITUTIONAL SHARES) 2.83% 1.13% 10.74% 21.77% 22.88%(4) 16.32%(4) 16.22%(4)
LIPPER EQUITY INCOME FUND
INDEX 0.81% -0.48% 9.59% 21.25% 22.89% 17.43% 17.41%
S&P 500 INDEX 4.06% 3.31% 17.74% 30.21% 30.23% 23.05% 21.72%
</TABLE>
Note: Returns for BNY Hamilton Funds and Lipper Fund Universe are after fees.
(1) TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THE ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS.
(2) Lipper indexes are based on the performance of the largest funds within a
given investment objective and do not include multiple share classes of
similar funds. Returns for these indexes are net of fees. Source: Lipper
Analytical Services, Inc.
(3) The S&P 500 is considered representative of the broad U.S. market of
large-capitalization stocks.
(4) Total return figures are shown at net asset value for all periods. These
figures do not consider the effect of the sales load in effect from July
11, 1994-July 12, 1996. Had the sales load been factored in to the above
figures, average annual total return for 3 years, 5 years and since
inception would have been lower. The quoted performance for the
Institutional Shares prior to their inception on 4/1/97 is based on the
performance of the Fund's Investor Shares, adjusted to reflect fees and
expenses. The inception date for the Investor Shares of the Fund was
August 10, 1992.
2
<PAGE>
[LOGO] BNY HAMILTON LARGE CAP GROWTH FUND
AN INTERVIEW WITH CHARLES GOODFELLOW, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 1998?
A. The Fund's Institutional Shares posted a total return of 17.59%, while the
Fund's Investor Shares returned 17.53%.(1) The Fund outperformed the 15.57%
return of the Lipper Growth Fund Index(2), and compared well with the S&P 500
Index(3), which was up 17.74%.
Q. HOW DID MARKET FACTORS INFLUENCE FUND PERFORMANCE?
A. Fueled by solid earnings growth and favorable economic factors,
large-capitalization growth stocks continued to outperform most other stocks.
Investors continued to favor these stocks for their earnings reliability and
liquidity. The Fund was well positioned to benefit from this general market
trend.
Q. DID EVENTS IN ASIA AFFECT PERFORMANCE?
A. After the Asian markets began collapsing in the fall of 1997, we carefully
examined the Fund's holdings to gauge the impact of the crisis. While the
potential effects varied widely from industry to industry, the Fund had
reasonably limited exposure to the industries facing the most fallout. Of
course, events are still playing out, and we continue to monitor the
developments.
Q. WHAT WERE YOUR PRIMARY STRATEGIES DURING THE PERIOD?
A. Our goal was to emphasize the areas of the market where we expected the
greatest relative earnings strength. The Fund's largest exposure was in the
financial and consumer staples sectors, which represented a combined 37% of
the Fund. We also emphasized selected technology stocks and the health care
sectors, which represented another 30%. Overall, the Fund's holdings in each
of these sectors experienced significant earnings expansion and, as a result,
performed very well.
Our investments in the energy area did not perform well. We thought oil
prices would hold firm and oil services companies would participate in
increased energy exploration. Prices declined, and oil services stocks
suffered. The Fund's energy investments were up less than 1%, which served as
a drag on performance.
We also took profits on some of the Fund's larger holdings. For example,
in the financial services sector, we reduced the Fund's bank holdings and
replaced them with brokers and asset gatherers due to their more sustained
momentum. In addition, we generated incremental return by using conservative
options strategies to take advantage of market volatility.
Q. DID ANY SPECIFIC STOCK HOLDINGS OFFER NOTABLE PERFORMANCE?
A. The Fund's best-performing stocks were in the technology sector. For example,
SAP, a German software systems company, was up more than 100%, as was Lucent
Technologies. Microsoft and Cisco Systems each appreciated more than 60%.
Another big winner was the pharmaceutical company, Pfizer, one of the Fund's
largest holdings. It was up more than 45% in the first six months of 1998.
3
<PAGE>
[LOGO]
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. The U.S. economy expanded at a stronger pace than we had forecast at the
beginning of the year, but, with the problems in Asia starting to show up in
our economy, we expect growth to slow. Inflation will remain subdued; the
trend in interest rates is still down; corporate profits are still growing;
the very positive flow of funds into stocks will continue. In this
environment we think the stock market will go higher with large
capitalization growth stocks remaining in favor with investors. At the
present time we do not anticipate any significant changes in the Fund's
structure and expect to remain fully invested.
<TABLE>
<CAPTION>
TRAILING TRAILING TRAILING TRAILING
CURRENT TRAILING YEAR 12 3 YEARS 5 YEARS 10 YEARS
PERIODS ENDED JUNE 30, 1998 MONTH 3 MONTHS TO DATE MONTHS ANNUALIZED ANNUALIZED ANNUALIZED
<S> <C> <C> <C> <C> <C> <C> <C>
BNY HAMILTON LARGE CAP GROWTH
FUND (INSTITUTIONAL SHARES) 4.57% 4.57% 17.59% 28.32% 29.14%(4) 21.03%(4) 17.00%(4)
LIPPER GROWTH FUND INDEX 4.32% 2.84% 15.57% 28.27% 24.79% 19.47% 16.30%
S&P 500 INDEX 4.06% 3.31% 17.74% 30.21% 30.23% 23.05% 18.55%
</TABLE>
Note: Returns for BNY Hamilton Funds and Lipper Fund Universe are after fees.
(1) TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THE ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS.
(2) Lipper indexes are based on the performance of the largest funds within a
given investment objective and do not include multiple share classes of
similar funds. Returns for these indexes are net of fees. Source: Lipper
Analytical Services, Inc.
(3) The S&P 500 is considered representative of the broad U.S. market of
large-capitalization stocks.
(4) The quoted performance includes performance of common and collective
trust fund ("Commingled") accounts advised by The Bank of New York dating
back to 6/30/88 and prior to the Fund's commencement of operations on
4/1/97, as adjusted to reflect the expenses associated with mutual funds.
The Commingled accounts were not registered with the Securities and
Exchange Commission and, therefore, were not subject to the investment
restrictions imposed by law on registered mutual funds. If the Commingled
accounts had been registered, the Commingled accounts' performance may
have been adversely affected. The adviser has agreed to assume a portion
of the expenses for this Fund. Had expenses not been assumed, total
return and the average annual return would have been lower. This
voluntary waiver and assumption of expenses may be modified or terminated
at any time, which would reduce the Fund's performance.
4
<PAGE>
[LOGO] BNY HAMILTON SMALL CAP GROWTH FUND*
AN INTERVIEW WITH JOHN LUI, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 1998?
A. The Fund posted a total return of 7.88% for Institutional Shares and 7.71%
for Investor Shares.(1) The Fund outperformed the Lipper Small Cap Fund
Index(2), which returned 6.45%, and the Russell 2000 Index(3), which returned
4.93%. The Fund's overweighted positions in consumer and services stocks were
the primary reasons for this outperformance.
Q. HOW DID MARKET FACTORS INFLUENCE FUND PERFORMANCE?
A. Solid corporate profit growth, low inflation, low interest rates and
significant cash inflows to equity mutual funds all worked to push stock
valuations higher during the first half, but large capitalization stocks were
the primary beneficiaries. Small-capitalization stocks continued to lag their
larger counterparts as investors favored the superior liquidity and earnings
predictability of large companies relative to smaller ones.
Q. DID EVENTS IN ASIA AFFECT PERFORMANCE?
A. The economic crisis in Southeast Asia actually helped the Fund's performance
in some ways. Many of the consumer oriented companies represented in the Fund
import their materials from Asia, so they benefited from lower costs during
the period. On the other hand, oil services stocks were hindered somewhat by
weakening demand in the region.
Q. WHAT WERE YOUR PRIMARY STRATEGIES DURING THE PERIOD?
A. We look for companies that we believe are the best in their
niche--mini-monopolies that offer predictable, sustainable earnings growth.
As such, we continued to favor the consumer sector. Historically, we have
overweighted this sector because that is where we can find many companies
with niche market domination. In addition, these stocks have enjoyed a
cyclical uplift due to the strong economy.
We also emphasized the service sector, as "outsourcing" continues to be
an important investment theme in both consumer and business markets. This
trend has led to improving visibility, growth and earnings predictability for
companies providing certain outsourcing services.
Within these market niches, we look for dominant companies that are
consolidating their industries, giving them control over revenue growth and
pricing. For example, two important Fund holdings--Ha-lo Industries, a
distributor of promotional items, and the Scotts Company, a global provider
of fertilizer products--have been purchasing smaller companies and
strengthening their market dominance.
Another strategy has been to avoid companies that make components for
larger products. These companies tend to have a higher propensity for
earnings disappointments, as the manufacturer of the larger product is in
control of the demand cycle. In the technology sector, where many of these
companies exist, we have chosen to favor software developers and companies
that make entire systems.
Q. DID ANY SPECIFIC STOCK HOLDINGS OFFER NOTABLE PERFORMANCE?
A. In the consumer sector, Jones Apparel Group benefited from fast growth in the
women's apparel market as consumer spending posted strong gains. The company
also benefited from reduced materials costs, and it
5
<PAGE>
[LOGO]
continued to expand its profit margins. On the services side, CBT Group, an
"outsourcing" firm that sells software training course material to
businesses, was another strong performer.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. While small-cap stocks have underperformed large-company stocks, earnings
growth over the past year has been better for small-company stocks. We
believe that this stronger corporate profit growth is likely to be rewarded
in the prices of small-cap stocks in the months ahead, and we expect to see
some rotation out of large stocks and into small. When this occurs, the Fund
should be well positioned to benefit. We will continue to focus on our core
holdings of market dominators and look for cyclical opportunities to
complement these holdings.
<TABLE>
<CAPTION>
TRAILING TRAILING TRAILING SINCE
CURRENT TRAILING YEAR 12 3 YEARS 5 YEARS INCEPTION
PERIODS ENDED JUNE 30, 1998 MONTH 3 MONTHS TO DATE MONTHS ANNUALIZED ANNUALIZED ANNUALIZED
<S> <C> <C> <C> <C> <C> <C> <C>
BNY HAMILTON SMALL CAP GROWTH
FUND (INSTITUTIONAL SHARES) 4.13% 2.55% 7.88% 12.73% 20.37%(4) 15.91%(4) 18.42%(4)
LIPPER SMALL CAP FUND INDEX 1.33% -3.86% 6.45% 15.52% 16.89% 15.52% 18.36%
RUSSELL 2000 INDEX 0.21% -4.66% 4.93% 16.50% 18.85% 16.05% 18.68%
</TABLE>
Note: Returns for BNY Hamilton Funds and Lipper Fund Universe are after fees.
* Small-capitalization funds typically carry additional risks, since smaller
companies historically have a experienced a greater degree of market
volatility
(1) TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THE ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS.
(2) Lipper indexes are based on the performance of the largest funds within a
given investment objective and do not include multiple share classes of
similar funds. Returns for these indexes are net of fees. Source: Lipper
Analytical Services, Inc.
(3) The Russell 2000 is considered representative of the broad U.S. market of
small-capitalization stocks.
(4) The quoted performance includes performance of common and collective
trust fund ("Commingled") accounts advised by The Bank of New York dating
back to 12/31/90 and prior to the Fund's commencement of operations on
4/1/97, as adjusted to reflect the expenses associated with mutual funds.
The Commingled accounts were not registered with the Securities and
Exchange Commission and, therefore, were not subject to the investment
restrictions imposed by law on registered mutual funds. If the Commingled
accounts had been registered, the Commingled accounts' performance may
have been adversely affected. The adviser has agreed to assume a portion
of the expenses for this Fund. Had expenses not been assumed, total
return and the average annual return would have been lower. This
voluntary waiver and assumption of expenses may be modified or terminated
at any time, which would reduce the Fund's performance.
6
<PAGE>
[LOGO] BNY HAMILTON INTERNATIONAL EQUITY FUND*
AN INTERVIEW WITH MARY BLAND, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 1998?
A. The Fund posted a total return of 16.56% for Institutional Shares and 16.42%
for Investor Shares.(1) The Fund outperformed the Lipper International Fund
Index(2), which returned 15.81%, and the MSCI EAFE (Morgan Stanley Capital
International Europe, Australasia and Far East) Index(3), which returned
16.08%.
Q. HOW DID MARKET FACTORS INFLUENCE FUND PERFORMANCE?
A. Asset allocation between Europe and Asia was a crucial factor in performance.
European markets did very well during the first half of this year. With
nearly 70% of the Fund invested in Europe, the Fund's performance benefited
from this strength. While Asian markets continued to suffer from economic and
currency problems, the Fund's underweighting in Japan and very small exposure
to other Asian markets helped the Fund's return relative to the EAFE Index.
Q. DID EVENTS IN ASIA AFFECT PERFORMANCE IN OTHER REGIONS?
A. The economic crisis in Asia was not as major a concern in Europe, where the
continent's own economic recovery took center stage. Europe's sensitivity to
the Asian economies is relatively small, with only about 7% of its exports
going to Asia.
Q. WHAT WERE YOUR PRIMARY STRATEGIES DURING THE PERIOD?
A. In Europe, our strategy was to focus on domestically oriented companies
benefiting from the economic expansion sweeping through the continent.
Capital goods, which was a heavy weighting in the Fund, performed extremely
well. The Fund also enjoyed solid performance from the telecommunications,
pharmaceutical and business services sectors. In addition, the finance
sector, which we heavily weighted in the Fund, benefited from the
restructuring among banking and insurance companies in anticipation of
European Monetary Union (EMU) in 1999.
In Japan, we focused on export-oriented multi-national companies in the
electronics and pharmaceutical industries which we believe are in the best
position to withstand the country's economic problems. We avoided financial
stocks and other companies likely to suffer from weak domestic activity.
Given the fallout from the crisis in Southeast Asia, the Fund maintained
its exposure to emerging markets at under 10%. Nevertheless, the Fund enjoyed
strong performance from its small weightings in Greece, Hungary, Poland and
Brazil.
Q. DID ANY SPECIFIC STOCK HOLDINGS OFFER NOTABLE PERFORMANCE?
A. Many of our companies displayed strong results, with three stocks performing
particularly well. The first was SAP, the German software firm that recently
listed on the NYSE. SAP was up 100% in the first half of 1998. The other
stellar performers were both in the European telecommunications sector, one
of the most dynamic and fastest growing sectors in the world. Nokia, a global
telecommunications equipment manufacturer based in Finland, was up 109% and
Vodafone, the British wireless provider, was up 73%.
7
<PAGE>
[LOGO]
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. We remain very optimistic toward European markets, particularly France and
countries in southern Europe. Economic fundamentals remain sound, and
restructuring within the corporate sector in preparation for EMU should
continue to boost profit margins. The outlook for Japan is improving due to
signs of stabilization in the yen and progress toward addressing the
country's banking problems. Nevertheless, we are maintaining a neutral
weighting, as many uncertainties remain. The outlook for emerging markets
remains very uncertain generally, but we continue to look for attractive
specific opportunities. We are cautiously optimistic, for example, on Brazil,
as stock valuations there are very attractive and potential economic returns
are very encouraging.
<TABLE>
<CAPTION>
TRAILING TRAILING TRAILING SINCE
CURRENT TRAILING YEAR 12 3 YEARS 5 YEARS INCEPTION
PERIODS ENDED JUNE 30, 1998 MONTH 3 MONTHS TO DATE MONTHS ANNUALIZED ANNUALIZED ANNUALIZED**
<S> <C> <C> <C> <C> <C> <C> <C>
BNY HAMILTON INTERNATIONAL
EQUITY FUND (INSTITUTIONAL
SHARES) -0.24% 2.38% 16.56% 9.97% N/A N/A 19.25%
LIPPER INTERNATIONAL FUND
INDEX -0.87% 0.85% 15.81% 9.00% 15.12% 13.53% 16.63%
MSCI EAFE INDEX 0.78% 1.13% 16.08% 6.38% 11.00% 10.34% 16.58%
</TABLE>
Note: Returns for BNY Hamilton Funds and Lipper Fund Universe are after fees.
* International investing involves increased risk and volatility.
** The inception date for BNY Hamilton International Equity Fund
(Institutional Shares) was 4/1/97.
(1) TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THE ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS. The adviser has agreed to assume a portion of the
expenses for this Fund. Had expenses not been assumed, total return and
the average annual return would have been lower. This voluntary waiver
and assumption of expenses may be modified or terminated at any time,
which would reduce the Fund's performance.
(2) Lipper indexes are based on the performance of the largest funds within a
given investment objective and do not include multiple share classes of
similar funds. Returns for these indexes are net of fees. Source: Lipper
Analytical Services, Inc.
(3) The MSCI EAFE Index is considered representative of the equity markets in
Europe, Australia, Asia and the Far East.
8
<PAGE>
[LOGO] BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
AN INTERVIEW WITH WILLIAM BAIRD, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 1998?
A. The Fund's Institutional Shares returned 3.61% for the six months ended June
30, 1998, while the Fund's Investor Shares returned 3.59%.(1) The Fund's
return compared favorably to the Lehman Brothers Intermediate Government Bond
Index(2), which returned 3.38%, and the Lipper Intermediate U.S. Government
Fund Index(3), which returned 3.59%.
Q. HOW DID MARKET FACTORS INFLUENCE FUND PERFORMANCE?
A. Among Treasury, government agency and government mortgage-backed securities,
Treasuries were the best performing sector of this market. Spreads on agency
securities widened as a result of the large supply of new issues the market
had to absorb. Prepayment concerns as well as a heavy supply of new issues
that resulted from refinancings caused mortgage spreads to widen as well. In
this environment, discount mortgage-backed securities performed better than
premium issues (those with coupons of 7.5% or higher).
Overall, the Fund's mortgage exposure helped maintain a high level of
income, as well as provide some price appreciation. Compared to other
government securities, Treasuries experienced the greatest price appreciation
as interest rates declined. The Fund, with a 24% exposure to Treasuries,
benefited from this.
Q. WHAT WERE YOUR PRIMARY STRATEGIES DURING THE PERIOD?
A. We entered the year anticipating that interest rates would decline, causing
bond prices to rise. On this basis, we extended the Fund's duration from 3.6
years at the beginning of the year to 3.9 years by June 30, 1998. (Duration
is a measure of sensitivity to interest rate changes. As rates go down, funds
with longer durations typically experience greater price appreciation.)
In the mortgage sector, we favored discount mortgages to help protect the
Fund from the heavy volume of prepayments among premium mortgages. Among
discount mortgages, the Fund realized the best performance from
longer-average-life CMOs (collateralized mortgage obligations) which provided
strong price appreciation as longer term interest rates declined.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. We don't expect to make any significant changes in the Fund's strategies. We
believe that interest rates will move lower, offering continued good
performance over the near term. If rates drop sufficiently, we may sell some
9
<PAGE>
[LOGO]
longer-term Treasuries to capture their price appreciation and move into
certain higher-yielding mortgage securities to obtain incremental yield.
<TABLE>
<CAPTION>
TRAILING TRAILING TRAILING SINCE
CURRENT TRAILING YEAR 12 3 YEARS 5 YEARS INCEPTION
PERIODS ENDED JUNE 30, 1998 MONTH 3 MONTHS TO DATE MONTHS ANNUALIZED ANNUALIZED ANNUALIZED
<S> <C> <C> <C> <C> <C> <C> <C>
BNY HAMILTON INTERMEDIATE
GOVERNMENT FUND (INSTITUTIONAL
SHARES) 0.67% 2.15% 3.61% 9.09% 6.50%(4) 5.13%(4) 5.48%(4)
LIPPER INTERMEDIATE US
GOVERNMENT FUNDS INDEX 0.82% 2.14% 3.59% 9.43% 6.87% 5.68% 6.12%
LEHMAN INTERMEDIATE GOVERNMENT
INDEX 0.67% 1.85% 3.38% 8.37% 6.74% 5.90% 6.25%
</TABLE>
Note: Returns for BNY Hamilton Funds and Lipper Fund Universe are after fees.
(1) TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THE ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS.
(2) Lehman Brothers indexes represent broad market averages for fixed-income
securities.
(3) Lipper indexes are based on the performance of the largest funds within a
given investment objective and do not include multiple share classes of
similar funds. Returns for these indexes are net of fees. Source: Lipper
Analytical Services, Inc.
(4) Total return figures are shown at net asset value for all periods. These
figures do not consider the effect of the sales load in effect from July
11, 1994-July 12, 1996. Had the sales load been factored in to the above
figures, average annual total return for 3 years, 5 years and since
inception would have been lower. The quoted performance for the
Institutional Shares prior to their inception on 4/1/97 is based on the
performance of the Fund's Investor Shares, adjusted to reflect fees and
expenses. The inception date for the Investor Shares of the Fund was
August 10, 1992. The adviser has agreed to assume a portion of the
expenses for this Fund. Had expenses not been assumed, total return and
the average annual return would have been lower. This voluntary waiver
and assumption of expenses may be modified or terminated at any time,
which would reduce the Fund's performance.
10
<PAGE>
[LOGO] BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
AN INTERVIEW WITH CHRISTOPHER CAPONE, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 1998?
A. The Fund posted a total return of 3.76% for Institutional Shares and 3.70%
for Investor Shares(1) for the six months ended June 30, 1998. The Fund's
return was comparable to our benchmarks: the Lipper Intermediate Investment
Grade Fund Index(2) returned 3.77%, and the Lehman Brothers Intermediate
Government/Corporate Bond Index(3) returned 3.46%.
Q. HOW DID MARKET FACTORS INFLUENCE FUND PERFORMANCE?
A. Interest rates generally declined during the period, but longer-term yields
dropped more than shorter-term yields. Yields on securities in the Fund's
maturity range (up to 15 years) declined fairly modestly, resulting in only
slight price appreciation.
When stocks do well, corporate bonds tend to do well, and vice versa. So,
every time events in Asia pressured the equity market--prompting the fear
that worldwide growth would slow--corporate spreads would widen, and
Treasuries would outperform. Then, when these concerns abated, the corporate
market would improve. The Fund was able to take advantage of this volatility
by varying its exposure to both of these sectors and by maintaining a
high-quality profile in the corporate sector.
Q. WHAT WERE YOUR PRIMARY STRATEGIES DURING THE PERIOD?
A. Our basic strategy was twofold. First, we opportunistically added corporate
bonds to the portfolio as yield spreads widened and prices became attractive.
When there was pressure in the corporate bond market--usually due to Asian
influences or excess supply--we looked for high-quality names that had
performed well for us in the past.
Second, we took advantage of favorable yield curve positioning. We
entered the year expecting interest rates to decline and the yield curve to
flatten. Overall, the curve did flatten to a point where two-year Treasuries
were yielding about the same as 10-year Treasuries. In this environment we
found opportunities to capture yield advantages by periodically repositioning
to certain areas of the curve. At one point, for example, nine-year
Treasuries yielded more than 10-year Treasuries, and the Fund captured this
benefit.
Additionally, we extended the Fund's duration modestly during the first
half, consistent with our positive outlook for interest rates. (Duration is a
measure of sensitivity to interest rate changes. As rates go down, funds with
longer durations typically experience better price appreciation.)
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. Overall, we expect to keep our basic strategies intact. We believe that a
slowdown in economic growth should cause interest rates to trend lower over
the next year and we will look for opportunities to lengthen the Fund's
average maturity somewhat further. At the same time, we plan to maintain a
relatively stable duration so as not to increase the Fund's risk profile. In
terms of sectors, we plan to increase the Fund's weighting in corporate
11
<PAGE>
[LOGO]
issues as we expect a decrease in the volume of corporate issuance and a
gradual narrowing of credit spreads to lead to this sector outperforming
Treasuries.
<TABLE>
<CAPTION>
TRAILING TRAILING TRAILING TRAILING
CURRENT TRAILING YEAR 12 3 YEARS 5 YEARS 10 YEARS
PERIODS ENDED JUNE 30, 1998 MONTH 3 MONTHS TO DATE MONTHS ANNUALIZED ANNUALIZED ANNUALIZED
<S> <C> <C> <C> <C> <C> <C> <C>
BNY HAMILTON INTERMEDIATE
INVESTMENT GRADE FUND
(INSTITUTIONAL SHARES) 0.67% 2.15% 3.76% 9.87% 6.73%(4) 5.61%(4) 7.66%(4)
LIPPER INTERMEDIATE INVESTMENT
GRADE INDEX (5) 0.80% 2.18% 3.77% 9.66% 7.42% 6.33% N/A
LEHMAN INTERMEDIATE
GOVERNMENT/CORPORATE INDEX 0.64% 1.88% 3.46% 8.53% 6.91% 6.11% 8.25%
</TABLE>
Note: Returns for BNY Hamilton Funds and Lipper Fund Universe are after fees.
(1) TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THE ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS.
(2) Lipper indexes are based on the performance of the largest funds within a
given investment objective and do not include multiple share classes of
similar funds. Returns for these indexes are net of fees. Source: Lipper
Analytical Services, Inc.
(3) Lehman Brothers indexes represent broad market averages for fixed-income
securities.
(4) The quoted performance includes performance of common and collective
trust fund ("Commingled") accounts advised by The Bank of New York dating
back to 6/30/88 and prior to the Fund's commencement of operations on
4/1/97, as adjusted to reflect the expenses associated with mutual funds.
The Commingled accounts were not registered with the Securities and
Exchange Commission and, therefore, were not subject to the investment
restrictions imposed by law on registered mutual funds. If the Commingled
accounts had been registered, the Commingled accounts' performance may
have been adversely affected.
(5) Lipper Analytical Services began tracking this index on December 30,
1988.
12
<PAGE>
[LOGO] BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
AN INTERVIEW WITH COLLEEN FREY, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 1998?
A. The Fund's Institutional Share class provided a total return of 1.86% for the
six months ended June 30, 1998, while the total return on the Investor Share
class was 1.74%.(1) This performance was in line with the Lipper New York
Intermediate Municipal Debt Fund average(2) of 2.00%. The slight difference
was due to the Fund's shorter average maturity, which resulted in less
volatility for the Fund. The Lehman Brothers Five-Year General Obligation
Municipal Bond Index(3) returned 2.20%.
Q. HOW DID MARKET FACTORS INFLUENCE FUND PERFORMANCE?
A. A positive interest rate environment contributed to a heavy volume of new
issues, which led to favorable market and Fund performance. In fact, the
largest-ever municipal bond deal--$3.4 billion for the Long Island Power
Authority--came to market in May 1998. Overall, new issue volume for the
period totaled $146.4 billion, up more than 50% from the first half of 1997.
New York State issuers ranked No. 1 in the nation, representing 14% of total
new issues year to date.
This healthy supply of new issues caused yields on Aaa-rated municipal
bonds to trade at historically high ratios relative to U.S. Treasuries. For
example, five-year municipals offered 75% of the return of five-year
Treasuries, 10-year municipals offered 81% of the return of 10-year
Treasuries and 20-year municipals offered 86% of the return of 20-year
Treasuries.
Furthermore, quality upgrades by the rating agencies outpaced downgrades
during the period. This was evident among the Fund's Baa-1-rated bonds, which
declined from 19.1% of the portfolio at the beginning of the year to 13.7% on
June 30, 1998. This decline was primarily due to the upgrading of certain
state appropriation debt holdings.
Q. WHAT WERE YOUR PRIMARY STRATEGIES DURING THE PERIOD?
A. Because we anticipated interest rates to decline during the first half of the
year, we used the Fund's cash reserves and inflows to purchase securities
farther out on the yield curve. As a result, bonds maturing between 10 and 20
years increased to 12% of the portfolio, up from 5.1% at the end of 1997.
We continued to enhance the Fund's diversification by adding the major
new issuer in the market--the Long Island Power Authority.
Yield spreads between quality sectors remained narrow, which meant that
trading down in credit quality did not offer investors any meaningful yield
pick-up. For this reason, we focused on higher-quality securities.
13
<PAGE>
[LOGO]
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. Our outlook for interest rates remains positive. We also expect the municipal
bond market to remain attractive relative to taxable fixed-income
alternatives due to the prospects for continued strong supply in the new
issue market for both refunding and new cash purposes.
<TABLE>
<CAPTION>
TRAILING TRAILING TRAILING SINCE
CURRENT TRAILING YEAR 12 3 YEARS 5 YEARS INCEPTION
PERIODS ENDED JUNE 30, 1998 MONTH 3 MONTHS TO DATE MONTHS ANNUALIZED ANNUALIZED ANNUALIZED
<S> <C> <C> <C> <C> <C> <C> <C>
BNY HAMILTON INTERMEDIATE NEW
YORK TAX-EXEMPT FUND
(INSTITUTIONAL SHARES) 0.13% 0.98% 1.86% 6.02% 5.23%(4) 4.52%(4) 4.84%(4)
LIPPER NEW YORK INTERMEDIATE
MUNICIPAL DEBT FUND AVERAGE 0.33% 1.19% 2.00% 6.69% 6.02% 5.13% 5.61%
LEHMAN 5 YEAR G.O. MUNI BOND
INDEX 0.31% 1.02% 2.20% 6.35% 6.00% 5.33% 5.82%
</TABLE>
Note: Returns for BNY Hamilton Funds and Lipper Fund Universe are after fees.
(1) TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THE ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS.
(2) Lipper indexes are based on the performance of the largest funds within a
given investment objective and do not include multiple share classes of
similar funds. Returns for these indexes are net of fees. Source: Lipper
Analytical Services, Inc.
(3) Lehman Brothers indexes represent broad market averages for fixed-income
securities.
(4) Total return figures are shown at net asset value for all periods. These
figures do not consider the effect of the sales load in effect from July
11, 1994-July 12, 1996. Had the sales load been factored in to the above
figures, average annual total return for 3 years, 5 years and since
inception would have been lower. The quoted performance for the
Institutional Shares prior to their inception on 4/1/97 is based on the
performance of the Fund's Investor Shares, adjusted to reflect fees and
expenses. The inception date for the Investor Shares of the Fund was
August 10, 1992. The adviser has agreed to assume a portion of the
expenses for this Fund. Had expenses not been assumed, total return and
the average annual return would have been lower. This voluntary waiver
and assumption of expenses may be modified or terminated at any time,
which would reduce the Fund's performance.
14
<PAGE>
[LOGO] BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
AN INTERVIEW WITH JEFFREY NOSS, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 1998?
A. As of June 30, 1998, the Fund offered a year-to-date total return of 1.87%
for Institutional Shares and 1.72% for Investor Shares.(1) In comparison, the
Lipper Intermediate Municipal Bond Fund Index(2) returned 2.19%, reflecting a
slightly higher risk profile and a slightly lower quality profile than the
Fund. The Lehman Brothers Five-Year General Obligation Municipal Bond
Index(3) returned 2.20%.
Q. HOW DID MARKET FACTORS INFLUENCE FUND PERFORMANCE?
A. The first half of the year was characterized by a favorable interest rate
environment, which led to a significant number of new issues. In fact,
municipal issuance reached its third-highest level in history. This caused
the ratio of municipal yields to Treasury yields to rise to higher than
average levels, producing attractive opportunities in the municipal bond
market. At the same time, however, the abundant supply also served to hold
municipal bond prices relatively flat. The Fund performed in line with the
intermediate term sector of the market, with little fluctuation in net asset
value (NAV) and most of the return coming from coupon income.
Q. WHAT WERE YOUR PRIMARY STRATEGIES DURING THE PERIOD?
A. At the beginning of the year, we positioned the Fund to anticipate a
generally lower interest rate environment. We lengthened the Fund's duration
modestly, from 6.0 years to approximately 6.5 years. (Duration is a measure
of sensitivity to interest rate changes. As rates go down, funds with longer
durations typically experience better price appreciation.)
We also increased the Fund's very light weighting in bonds rated Baa-1,
which is the lowest tier of investment grade credit quality, to pick up some
incremental yield. At the beginning of the year, these securities comprised
3.5% of the portfolio; on June 30, 1998, they comprised almost 10%. To
finance these purchases, we reduced the Fund's holdings in premium coupon
bonds and prerefunded bonds--securities that would not have performed well in
the period's declining rate environment. The Baa-1-rated bonds offered
performance advantages that helped the Fund's return.
While we increased the Fund's exposure to Baa-1-rated bonds, the Fund's
overall credit quality continues to be very high. As of June 30th, nearly 76%
of the Fund's holdings were rated Aaa or Aa, and the Fund's overall
credit-quality rating was Aa.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. Our outlook for the municipal market remains positive, and the Fund is
positioned to reflect that view. The Fund's duration and maturity structure
provide us with the flexibility to extend maturity slightly if we expect
15
<PAGE>
[LOGO]
rates to trend lower or to shorten maturity if we foresee rising interest
rates. We expect continued heavy new issuance to keep the ratio of municipal
yields to Treasury yields at attractive levels for investors.
<TABLE>
<CAPTION>
TRAILING TRAILING TRAILING TRAILING
CURRENT TRAILING YEAR 12 3 YEARS 5 YEARS 10 YEARS
PERIODS ENDED JUNE 30, 1998 MONTH 3 MONTHS TO DATE MONTHS ANNUALIZED ANNUALIZED ANNUALIZED
<S> <C> <C> <C> <C> <C> <C> <C>
BNY HAMILTON INTERMEDIATE
TAX-EXEMPT FUND (INSTITUTIONAL
SHARES) 0.23% 1.12% 1.87% 6.14% 5.38%(4) 4.47%(4) 6.37%(4)
LIPPER INTERMEDIATE MUNICIPAL
FUND INDEX 0.34% 1.22% 2.19% 6.95% 6.26% 5.28% 6.90%
LEHMAN 5 YEAR G.O. MUNI BOND
INDEX 0.31% 1.02% 2.20% 6.35% 6.00% 5.33% 6.79%
</TABLE>
Note: Returns for BNY Hamilton Funds and Lipper Fund Universe are after fees.
(1) TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THE ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE OF
FUTURE RESULTS.
(2) Lipper indexes are based on the performance of the largest funds within a
given investment objective and do not include multiple share classes of
similar funds. Returns for these indexes are net of fees. Source: Lipper
Analytical Services, Inc.
(3) Lehman Brothers indexes represent broad market averages for fixed-income
securities.
(4) The quoted performance includes performance of common and collective
trust fund ("Commingled") accounts advised by The Bank of New York dating
back to 6/30/88 and prior to the Fund's commencement of operations on
4/1/97, as adjusted to reflect the expenses associated with mutual funds.
The Commingled accounts were not registered with the Securities and
Exchange Commission and, therefore, were not subject to the investment
restrictions imposed by law on registered mutual funds. If the Commingled
accounts had been registered, the Commingled accounts' performance may
have been adversely affected.
16
<PAGE>
[LOGO] BNY HAMILTON MONEY FUND
AN INTERVIEW WITH RICHARD KLINGMAN, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 1998?
A. Hamilton Shares of the Fund posted a total return of 2.70%; Hamilton Premier
Shares, 2.56%; and Hamilton Classic Shares, 2.40%.(1) The seven-day current
and effective yields on June 30, 1998, were 5.41% and 5.56%, respectively,
for Hamilton Shares, 5.16% and 5.29% for Hamilton Premier Shares and 4.85%
and 4.97% for Hamilton Classic Shares.(2)
The Fund's assets increased 11% during the period, from $1.77 billion to
$1.96 billion.
Q. HOW DID MARKET FACTORS INFLUENCE FUND PERFORMANCE?
A. While there was no change in the Federal Funds rate during the first half of
the year, the short-term market actually was quite dynamic, reflecting market
anxiety on the direction of the economy and interest rates. Surprising
strength in economic activity during the early part of the year raised fears
of tighter monetary policy. However, as the fallout from the Asian crisis
worked its way west, the anticipation of slower growth diminished these
concerns.
Six-month Treasury Bill yields ranged between a high of 5.42% and a low
of 5.10% before ending the period at 5.24%. The Fund was well positioned to
take advantage of the downward drift in short term interest rates by
maintaining a weighted average maturity in the 50 day range.
Q. WHAT WERE YOUR PRIMARY STRATEGIES DURING THE PERIOD?
A. The Fund remained highly diversified, with exposure to various fixed- and
variable-rate money market securities. With a focus on yield, we moved more
of the Fund's assets out of U.S. Treasury securities and into higher-yielding
bank and corporate securities. We also maintained a high level of liquidity
in the overnight market, and the Fund benefited from the relatively high
rates at the very short end of the yield curve.
On June 30, 1998, the Fund was invested in top-rated commercial paper
(35%), repurchase agreements (33%), bank obligations (17%), U.S. government
and agency securities (8%) and corporate bonds and notes (7%).
Our goal is to provide high current income and liquidity while preserving
investors' capital. This emphasis on quality has earned the Fund an AAAm
rating from Standard & Poor's Corp. and an Aaa rating from Moody's Investors
Service.
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. Conditions in the money markets continue to look favorable. We anticipate a
continuation of the moderate economic growth and low-inflation, which should
maintain the downward pressure on interest rates. We will be looking for
opportunities to enhance the Fund's yield while maintaining sound investment
quality and diversification.
(1) TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE
RESULTS.
(2) YIELDS WILL FLUCTUATE WITH CHANGES IN MARKET CONDITIONS, AND THERE CAN BE
NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NAV OF
$1.00. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT.
17
<PAGE>
[LOGO] BNY HAMILTON TREASURY MONEY FUND
AN INTERVIEW WITH RICHARD KLINGMAN, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 1998?
A. Hamilton Shares of the Fund posted a total return of 2.65% and Hamilton
Premier Shares returned 2.53%.(1) The seven-day current and effective yields
on June 30, 1998, were 5.36% and 5.50%, respectively, for Hamilton Shares and
5.11% and 5.24% for Hamilton Premier Shares.(2)
The Fund's assets grew considerably during the period, from $295 million
to $725 million--an increase of 146%.
Q. HOW DID MARKET FACTORS INFLUENCE FUND PERFORMANCE?
A. While there was no change in the Federal Funds rate during the first half of
the year, the short-term market actually was quite dynamic, reflecting market
anxiety on the direction of the economy and interest rates. Surprising
strength in economic activity during the early part of the year raised fears
of tighter monetary policy. However, as the fallout from the Asian crisis
worked its way west, the anticipation of slower growth diminished these
concerns.
Six-month Treasury Bill yields ranged between a high of 5.42% and a low
of 5.10% before ending the period at 5.24%. To take advantage of this small
overall decline in rates, we lengthened the Fund's weighted average maturity
from 17 days to 31 days.
Q. WHAT WERE YOUR PRIMARY STRATEGIES DURING THE PERIOD?
A. Our goal is to provide high current income and liquidity while preserving
investors' capital. This emphasis on quality has earned the Fund an AAAm
rating from Standard & Poor's Corp. and an Aaa rating from Moody's Investors
Service.
We maintained a high level of liquidity in the overnight market, and the
Fund benefited from the relatively high rates at the very short end of the
yield curve.
On June 30, 1998, the Fund was invested in repurchase agreements backed
by U.S. Treasury securities (85%), U.S. Treasury Notes (12%) and U.S.
Treasury Bills (3%).
Q. WHAT IS YOUR OUTLOOK FOR THE FUND?
A. Money market conditions continue to look favorable. We anticipate a
continuation of moderate economic growth and low-inflation, which should
maintain the downward pressure on interest rates. We will be looking for
opportunities to enhance the Fund's yield. For example, as the Fund continues
to mature (its inception was April 1, 1997), we plan to lengthen the weighted
average maturity further in order to capture additional yield as appropriate.
(1) TOTAL RETURN FIGURES INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE
RESULTS.
(2) YIELDS WILL FLUCTUATE WITH CHANGES IN MARKET CONDITIONS, AND THERE CAN BE
NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NAV OF
$1.00. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THE FUND WAIVED CERTAIN FEES FOR THE SIX MONTHS ENDED
JUNE 30, 1998. HAD FEES NOT BEEN WAIVED, THE SEVEN-DAY CURRENT YIELD
WOULD HAVE BEEN LOWER.
18
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS--78.1%
ADVERTISING & MARKETING
SERVICES--1.0%
116,500 Omnicon Group, Inc. .................... $ 5,810,437
------------
BANKING--5.3%
150,000 First Union Corp. ...................... 8,737,500
190,000 Mellon Bank Corp. ...................... 13,228,750
120,000 National City Corp. .................... 8,520,000
------------
30,486,250
------------
BEVERAGES--1.4%
200,000 PepsiCo, Inc. .......................... 8,237,500
------------
BUSINESS EQUIPMENT &
SERVICES--1.7%
100,000 Xerox Corp. ............................ 10,162,500
------------
COMPUTER SERVICES--2.1%
260,000 HBO & Co. .............................. 9,165,000
50,000 Hewlett-Packard Co. .................... 2,993,750
------------
12,158,750
------------
CONGLOMERATES--1.9%
122,200 General Electric Co. ................... 11,120,200
------------
COSMETICS & TOILETRIES--1.0%
75,000 Avon Products, Inc. .................... 5,812,500
------------
ELECTRONICS--2.3%
*130,000 American Power Conversion Corp. ........ 3,900,000
110,000 Sony Corp. (ADR)........................ 9,466,875
------------
13,366,875
------------
ENTERTAINMENT--0.4%
*100,000 Imax Corp. ............................. 2,281,250
------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FINANCIAL SERVICES--3.2%
100,000 American Express Co. ................... $ 11,400,000
120,000 Travelers Group, Inc. .................. 7,275,000
------------
18,675,000
------------
FINANCIAL SERVICES--MORTGAGE COMPANIES--1.5%
145,000 Federal National Mortgage Association... 8,808,750
------------
FOOD PRODUCTS--2.6%
260,000 Bestfoods............................... 15,096,250
------------
HOUSEHOLD & PERSONAL CARE
PRODUCTS--2.1%
62,100 Clorox Co. ............................. 5,922,787
70,000 Procter & Gamble Co. ................... 6,374,375
------------
12,297,162
------------
INSURANCE--4.3%
120,000 Allstate Corp. ......................... 10,987,500
43,575 American International Group, Inc. ..... 6,361,950
30,000 General Re Corp. ....................... 7,605,000
------------
24,954,450
------------
INVESTMENT MANAGEMENT--1.7%
230,000 Paine Webber Group, Inc. ............... 9,890,000
------------
MANUFACTURING--CONSUMER PRODUCTS-- 2.2%
250,000 Newell Co. ............................. 12,453,125
------------
MEDICAL PRODUCTS & SUPPLIES--3.3%
169,200 Johnson & Johnson....................... 12,478,500
100,000 Medtronic, Inc. ........................ 6,375,000
------------
18,853,500
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- ------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
NATURAL GAS--0.6%
182,200 Questar Corp. .......................... $ 3,575,675
------------
OIL & GAS--1.2%
100,000 Shulmberger Ltd. ....................... 6,831,250
------------
OIL--INTERNATIONAL--5.4%
162,400 Exxon Corp. ............................ 11,581,150
128,000 Mobil Corp. ............................ 9,808,000
150,000 Total S.A. (ADR)........................ 9,806,250
------------
31,195,400
------------
PHARMACEUTICALS--3.0%
90,000 Bristol-Myers Squibb Co. ............... 10,344,375
65,000 Pfizer, Inc. ........................... 7,064,687
------------
17,409,062
------------
RAILROADS--2.5%
180,000 Canadian National Railway............... 9,562,500
100,000 Kansas City Southern Industries,
Inc. ................................... 4,962,500
------------
14,525,000
------------
REAL ESTATE INVESTMENT
TRUSTS--10.5%
125,000 Apartment Investment & Management
Co. .................................... 4,937,500
23,817 Avalon Bay Communities, Inc. ........... 905,046
100,000 Carramerica Realty Corp. ............... 2,837,500
100,000 Cornerstone Properties, Inc. ........... 1,762,500
320,000 Duke Realty Investments, Inc. .......... 7,560,000
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
110,000 Equity Residential Properties Trust..... $ 5,218,125
130,000 First Industrial Realty Trust, Inc. .... 4,135,625
200,000 General Growth Properties............... 7,475,000
215,000 Liberty Property Trust.................. 5,495,938
150,000 Mack-Cali Realty Corp. ................. 5,156,250
150,000 Post Properties, Inc. .................. 5,775,000
200,000 Security Capital Industrial Trust....... 5,000,000
100,000 Starwood Hotels & Resorts............... 4,831,250
------------
61,089,734
------------
RESORTS & ENTERTAINMENT--1.8%
101,600 Walt Disney Co. (The)................... 10,674,350
------------
RETAIL--SPECIALTY STORES--3.8%
*250,000 Borders Group, Inc. .................... 9,250,000
325,200 CVS Corp. .............................. 12,662,475
------------
21,912,475
------------
TELECOMMUNICATIONS--3.9%
184,600 Lucent Technologies, Inc. .............. 15,356,413
*150,000 Worldcom, Inc. ......................... 7,265,625
------------
22,622,038
------------
UTILITIES--GAS & ELECTRIC--6.6%
120,000 Dominion Resources, Inc. ............... 4,890,000
155,000 DQE, Inc. .............................. 5,580,000
224,000 Northern States Power Co. .............. 6,412,000
227,150 Texas Utilities Co. .................... 9,455,119
345,000 Williams Cos., Inc. .................... 11,643,750
------------
37,980,869
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- ------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
UTILITIES--WATER--0.8%
142,100 American Water Works, Inc. ............. $ 4,405,100
------------
TOTAL COMMON STOCKS
(Cost $293,825,345)..................... 452,685,452
------------
</TABLE>
<TABLE>
<C> <S> <C>
CONVERTIBLE PREFERRED
STOCKS--12.0%
AUTOMOTIVE PARTS &
EQUIPMENT--1.0%
80,000 Federal-Mogul Financial Trust**......... 5,980,000
------------
BANKING--0.7%
30,000 Jefferson-Pilot NB (ACES)(a)............ 3,978,750
------------
COMMERCIAL SERVICES--0.3%
50,000 Cendant Corp. .......................... 1,871,875
------------
FINANCIAL SERVICES--1.1%
120,000 Conseco Finance Trust, Series F......... 6,360,000
------------
FOOD PROCESSING--0.8%
70,000 Ralston Purina Co. (b).................. 4,445,000
------------
INSURANCE--0.4%
40,000 PLC Cap Trust II........................ 2,500,000
------------
MANUFACTURING--CONSUMER PRODUCTS-- 1.2%
120,000 Newell Financial Trust I................ 7,005,000
------------
MEDIA--0.7%
40,000 Evergreen Media Corp.**................. 4,110,000
------------
NUMBER OF MARKET
SHARES VALUE
- ----------- ------------
CONVERTIBLE PREFERRED
STOCKS (CONTINUED)
PARKING FACILITIES--0.3%
60,000 Central Parking Financial Trust......... $ 1,500,000
------------
REAL ESTATE INVESTMENT TRUSTS--0.3%
80,000 Glenborough Realty Trust, Series A...... 1,950,000
------------
RETAIL--GENREAL MERCHANDISE--0.6%
80,000 Dollar General Strypes Trust............ 3,145,000
------------
TELECOMMUNICATIONS--3.4%
115,000 Airtouch Communications, Inc. .......... 9,487,500
80,000 Qualcomm Financial Trust**.............. 3,880,000
30,000 TCI Pacific Communications, Inc., Series
A....................................... 6,328,594
------------
19,696,094
------------
UTILITIES--GAS & ELECTRIC--1.2%
40,000 AES Trust I, Series A................... 3,120,000
70,000 AES Trust II**.......................... 3,990,000
------------
7,110,000
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $54,421,503)...................... 69,651,719
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
CONVERTIBLE BONDS--6.5%
BASIC MATERIALS--0.7%
$ 4,000,000 U.S. Filter Corp., 4.50%, 12/15/01...... 4,085,000
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- ------------
CONVERTIBLE BONDS (CONTINUED)
<C> <S> <C>
COMPUTERS--SOFTWARE & PERIPHERALS-- 0.5%
$ 2,500,000 Veritas Software Corp., 5.25%,
11/01/04................................ $ 2,890,625
------------
ENTERTAINMENT--0.3%
1,500,000 Imax Corp., 5.75%, 04/01/03**........... 1,856,250
------------
HEALTH CARE PRODUCTS &
SERVICES--0.7%
3,500,000 Alza Corp., 5.00%, 05/01/06............. 4,445,000
------------
HUMAN RESOURCES--0.7%
1,980,000 Interim Services, Inc., 4.50%,
06/01/05................................ 2,066,625
1,500,000 Personnel Group, 5.75%, 07/01/04**...... 1,816,875
------------
3,883,500
------------
INDUSTRIAL SERVICES--0.5%
2,250,000 USA Waste Services, Inc., 4.00%,
02/01/02................................ 2,795,625
------------
MEDICAL PRODUCTS & SUPPLIES--0.7%
4,000,000 Centocor Inc., 4.75%, 02/15/05**........ 3,995,000
------------
OIL & GAS--0.9%
4,500,000 Diamond Offshore Drilling, 3.75%,
02/15/07................................ 5,231,250
------------
RETAIL--SPECIALTY STORES--0.4%
1,750,000 Central Garden & Pet Co., 6.00%,
11/15/03................................ 2,242,188
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- ------------
<C> <S> <C>
CONVERTIBLE BONDS (CONTINUED)
TECHNOLOGY INDUSTRIES--1.1%
$ 3,000,000 EMC Corp., 3.25%, 03/15/02**............ $ 6,191,250
------------
TOTAL CONVERTIBLE BONDS
(Cost $30,789,397)...................... 37,615,688
------------
</TABLE>
<TABLE>
<C> <S> <C>
MONEY MARKET FUND--3.2%
18,419,400 ACM Institutional Reserves (Prime
Portfolio), 5.49% (c) (Cost
$18,419,400)............................ 18,419,400
------------
</TABLE>
<TABLE>
<C> <S> <C>
TOTAL INVESTMENTS
(Cost $397,455,645) (d)-- 99.8%......... 578,372,259
Other assets less liabilities-- 0.2%.... 990,645
------------
NET ASSETS--100.0%...................... $579,362,904
------------
------------
</TABLE>
ACES AUTOMATIC COMMON EXCHANGE SECURITIES.
ADR AMERICAN DEPOSITARY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
** SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933.
(a) CONVERTIBLE TO NORWEST CORP. COMMON STOCK.
(b) CONVERTIBLE TO INTERSTATE BAKERIES COMMON STOCK.
(c) REPRESENTS ANNUALIZED YIELD AT JUNE 30, 1998.
(d) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES. AT JUNE 30, 1998, NET UNREALIZED APPRECIATION WAS $180,916,614
BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED OF AGGREGATE
GROSS UNREALIZED APPRECIATION OF $184,868,856 AND AGGREGATE GROSS
UNREALIZED DEPRECIATION OF $3,952,242.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value, (Identified cost
$397,455,645)........................................... $578,372,259
Cash...................................................... 74
Receivables:
Dividends............................................... 1,073,748
Interest................................................ 457,037
Investments sold........................................ 147,000
Capital stock sold...................................... 6,140
Other assets.............................................. 55,645
------------
TOTAL ASSETS.......................................... 580,111,903
------------
LIABILITIES:
Payables:
Services provided by the Bank of New York and
Administrator......................................... 390,983
Capital stock repurchased............................... 293,708
Accrued expenses and other liabilities.................... 64,308
------------
TOTAL LIABILITIES..................................... 748,999
------------
NET ASSETS:................................................. $579,362,904
------------
------------
SOURCES OF NET ASSETS:
Capital stock @ par....................................... $ 33,922
Capital surplus........................................... 380,826,558
Undistributed net investment income....................... 448,059
Accumulated net realized gain on investments.............. 17,137,751
Net unrealized appreciation on investments................ 180,916,614
------------
NET ASSETS.................................................. $579,362,904
------------
------------
INSTITUTIONAL SHARES:
Net assets................................................ $542,104,617
------------
------------
Shares outstanding........................................ 31,736,865
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 17.08
------------
------------
INVESTOR SHARES:
Net assets................................................ $ 37,258,287
------------
------------
Shares outstanding........................................ 2,184,706
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 17.05
------------
------------
Institutional Shares authorized @ $.001 par value........... 200,000,000
Investor Shares authorized @ $.001 par value................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $60,709)... $ 5,922,785
Interest.................................................. 1,278,001
-----------
TOTAL INCOME............................................ 7,200,786
-----------
EXPENSES:
Advisory.................................................. 1,713,657
Administration............................................ 542,237
12b-1 fee--Investor Shares................................ 44,877
Transfer agent............................................ 72,187
Registration and filings.................................. 48,787
Accounting services....................................... 29,746
Custodian................................................. 24,859
Reports to shareholders................................... 21,330
Audit..................................................... 10,889
Insurance................................................. 8,553
Cash management........................................... 7,457
Legal..................................................... 5,127
Directors................................................. 3,845
Other..................................................... 19,458
-----------
TOTAL EXPENSES.......................................... 2,553,009
Earnings credit adjustment (Note 3)..................... (673)
-----------
NET EXPENSES............................................ 2,552,336
-----------
NET INVESTMENT INCOME................................... 4,648,450
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on:
Investments............................................. 16,694,831
Written call options.................................... 51,623
-----------
Net realized gain on investments.......................... 16,746,454
-----------
Increase (decrease) in unrealized
appreciation on:
Investments............................................. 37,901,184
Written call options.................................... (26,623)
-----------
Net unrealized gain on investments during the period...... 37,874,561
-----------
Net realized and unrealized gain on investments........... 54,621,015
-----------
Net increase in net assets resulting from operations...... $59,269,465
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
---------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 4,648,450 $ 9,312,064
Net realized gain on investments.................................... 16,746,454 61,155,457
Increase in unrealized appreciation on investments during the
period............................................................ 37,874,561 48,809,919
---------------- -----------------
Net increase in net assets resulting from operations.............. 59,269,465 119,277,440
---------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares.......... (4,104,100) (7,424,671)
Investor Shares............... (250,546) (1,468,710)
Distributions from capital gains: Institutional Shares.............. -0- (57,654,267)
Investor Shares................... -0- (3,788,827)
---------------- -----------------
(4,354,646) (70,336,475)
---------------- -----------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1)..... 19,994,587 476,447,806
Investor Shares................... 2,350,680 24,850,107
Proceeds from shares issued on reinvestment of dividends
and distributions: Institutional Shares........................... 1,180,458 59,462,345
Investor Shares..................................... 226,386 4,429,446
Cost of capital stock repurchased: Institutional Shares............. (53,134,875) (58,544,334)
Investor Shares (Note 1)......... (2,906,459) (215,212,365)
---------------- -----------------
Net increase (decrease) in net assets resulting from capital stock
transactions.................................................... (32,289,223) 291,433,005
---------------- -----------------
INCREASE IN NET ASSETS.......................................... 22,625,596 340,373,970
NET ASSETS:
Beginning of year................................................... 556,737,308 216,363,338
---------------- -----------------
End of period (includes undistributed net investment income of
$448,059 at June 30, 1998 and $154,255 at December 31, 1997)...... $ 579,362,904 $556,737,308
---------------- -----------------
---------------- -----------------
CHANGES IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1).......................... 1,265,481 33,419,974
Investor Shares........................................ 145,265 1,672,509
Shares issued on reinvestment of dividends
and distributions: Institutional Shares........................... 71,293 3,823,869
Investor Shares....................................................... 13,663 286,117
Shares repurchased: Institutional Shares............................ (3,231,471) (3,612,281)
Investor Shares (Note 1)........................ (177,580) (15,074,119)
---------------- -----------------
Net increase (decrease)........................................... (1,913,349) 20,516,069
Shares outstanding, beginning of period............................. 35,834,920 15,318,851
---------------- -----------------
Shares outstanding, end of period................................... 33,921,571 35,834,920
---------------- -----------------
---------------- -----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
-----------------------------------
SIX MONTHS FOR THE PERIOD
ENDED APRIL 1, 1997*
JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997
-------------- ------------------
<S> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 15.54 $ 14.21
-------------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.14 0.25
Net realized and unrealized gain on
investments........................... 1.53 3.25
-------------- --------
Total from investment operations...... 1.67 3.50
-------------- --------
DIVIDENDS AND DISTRIBUTION
Dividends from net investment income.... (0.13) (0.24)
Distribution from capital gains......... -0- (1.93)
-------------- --------
Total dividends and distribution...... (0.13) (2.17)
-------------- --------
Net asset value at end of period........ $ 17.08 $ 15.54
-------------- --------
-------------- --------
TOTAL RETURN:........................... 10.74%** 24.73%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $542,105 $522,524
Ratio to average net assets of:
Expenses.............................. 0.88%*** 0.87%***
Net investment income................. 1.64%*** 2.07%***
Portfolio turnover rate................. 19% 65%
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTOR SHARES
------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 15.53 $ 14.12 $ 12.99 $ 10.70 $ 11.30 $ 10.43
------- -------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.11 0.35 0.30 0.32 0.31 0.29
Net realized and unrealized gain (loss)
on investments........................ 1.52 3.27 2.22 2.41 (0.60) 0.94
------- -------- --------- --------- --------- ---------
Total from investment operations...... 1.63 3.62 2.52 2.73 (0.29) 1.23
------- -------- --------- --------- --------- ---------
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income.... (0.11) (0.28) (0.29) (0.32) (0.31) (0.28)
Distributions from capital gains........ -0- (1.93) (1.10) (0.12) -0- (0.08)
------- -------- --------- --------- --------- ---------
Total dividends and distributions..... (0.11) (2.21) (1.39) (0.44) (0.31) (0.36)
------- -------- --------- --------- --------- ---------
Net asset value at end of period........ $ 17.05 $ 15.53 $ 14.12 $ 12.99 $ 10.70 $ 11.30
------- -------- --------- --------- --------- ---------
------- -------- --------- --------- --------- ---------
TOTAL RETURN:+.......................... 10.53%* 25.85% 19.58% 25.78% (2.58)% 11.94%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $37,258 $ 34,213 $ 216,363 $ 169,841 $ 135,131 $ 112,849
Ratio to average net assets of:
Expenses, net of waiver from The Bank
of New York......................... 1.15%** 1.01% 0.97% 1.00% 1.04% 1.09%
Expenses, prior to waiver from The
Bank of New York.................... 1.15%** 1.01% 0.97% 1.00% 1.04% 1.12%
Net investment income, net of waiver
from The Bank of New York........... 1.38%** 1.77% 2.17% 2.66% 2.89% 2.82%
Portfolio turnover rate................. 19% 65% 58% 58% 51% 50%
</TABLE>
* NOT ANNUALIZED.
** ANNUALIZED.
+ TOTAL RETURN DOES NOT CONSIDER THE EFFECT OF THE SALES LOAD FOR THOSE
PERIODS IN WHICH THE SALES LOAD WAS IN EFFECT.
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS--94.6%
AIRCRAFT MANUFACTURING--1.4%
139,974 Boeing Co. ............................. $ 6,237,591
------------
BANKING--5.0%
217,000 First Union Corp. ...................... 12,640,250
248,932 Norwest Corp. .......................... 9,303,833
------------
21,944,083
------------
BEVERAGES--4.0%
114,467 Coca-Cola Co. .......................... 9,786,929
187,000 PepsiCo, Inc. .......................... 7,702,063
------------
17,488,992
------------
CHEMICALS--BASIC--2.9%
230,565 Monsanto Co. ........................... 12,882,819
------------
CHEMICALS--PETROLEUM--2.7%
160,146 duPont (E.I.) De Nemours & Co. ......... 11,950,895
------------
COMMUNICATIONS &
ENTERTAINMENT--2.1%
106,579 Time Warner, Inc. ...................... 9,105,843
------------
COMMUNICATIONS EQUIPMENT & SYSTEMS--1.6%
100,000 Nokia Oyj, A Shares (ADR)............... 7,256,250
------------
COMPUTER SERVICES--3.0%
131,444 HBO & Co. .............................. 4,633,401
146,660 Hewlett-Packard Co. .................... 8,781,268
------------
13,414,669
------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
COMPUTERS--SOFTWARE & PERIPHERALS-- 9.0%
*143,187 Cisco Systems, Inc. .................... $ 13,182,153
*143,648 Microsoft Corp. ........................ 15,567,852
49,000 Systeme, Anwendungen, Produkte in der
Datenverarbeitung (ADR)................. 11,073,657
------------
39,823,662
------------
CONGLOMERATES--2.7%
133,146 General Electric Co. ................... 12,116,286
------------
COSMETICS & TOILETRIES--1.4%
110,016 Gillette Co. ........................... 6,236,532
------------
FINANCIAL SERVICES--2.7%
193,471 Travelers Group, Inc. .................. 11,729,179
------------
FINANCIAL SERVICES--MORTGAGE COMPANIES--2.2%
161,725 Federal National Mortgage Association... 9,824,794
------------
FOOD PRODUCTS--3.0%
198,018 Bestfoods............................... 11,497,420
*44,752 Corn Products International, Inc. ...... 1,515,974
------------
13,013,394
------------
HOUSEHOLD & PERSONAL CARE PRODUCTS-- 2.4%
116,938 Procter & Gamble Co. ................... 10,648,667
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- ------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
INSURANCE--5.1%
96,345 American International Group, Inc. ..... $ 14,066,370
111,887 Equitable Cos, Inc. .................... 8,384,532
------------
22,450,902
------------
MANUFACTURING--CONSUMER PRODUCTS-- 3.6%
163,000 Corning, Inc. .......................... 5,664,250
201,400 Newell Co. ............................. 10,032,238
------------
15,696,488
------------
MEDICAL PRODUCTS & SUPPLIES--4.2%
157,455 Johnson & Johnson....................... 11,612,306
111,000 Medtronic, Inc. ........................ 7,076,250
------------
18,688,556
------------
NATURAL GAS--0.7%
167,266 Questar Corp. .......................... 3,282,595
------------
OIL & GAS--4.7%
*80,000 Cooper Cameron Corp. ................... 4,080,000
79,976 Enron Corp. ............................ 4,323,703
104,390 Shulmberger Ltd. ....................... 7,131,142
122,000 Transocean Offshore, Inc. .............. 5,429,000
------------
20,963,845
------------
OIL--INTERNATIONAL--6.1%
176,084 Exxon Corp. ............................ 12,556,990
141,000 Mobil Corp. ............................ 10,804,125
62,992 Royal Dutch Petroleum Co. .............. 3,452,749
------------
26,813,864
------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
PHARMACEUTICALS--7.2%
*35,126 Amgen, Inc. ............................ $ 2,296,362
73,269 Merck & Co. ............................ 9,799,729
134,116 Pfizer, Inc. ........................... 14,576,733
85,000 Smithline Beechman PLC (ADR)............ 5,142,500
------------
31,815,324
------------
REAL ESTATE INVESTMENT TRUSTS--2.6%
174,000 Duke Realty Investments, Inc. .......... 4,110,750
140,000 Liberty Property Trust.................. 3,578,750
154,775 New Plan Realty Trust................... 3,791,988
------------
11,481,488
------------
RESORTS & ENTERTAINMENT--2.1%
90,000 Walt Disney Co. (The)................... 9,455,625
------------
RETAIL--SPECIALTY STORES--2.0%
226,890 CVS Corp. .............................. 8,834,529
------------
SEMICONDUCTORS--1.9%
112,776 Intel Corp. ............................ 8,359,521
------------
TECHNOLOGY INDUSTRIES--1.0%
80,663 Motorola, Inc. ......................... 4,239,849
------------
TELECOMMUNICATIONS--3.3%
86,802 Lucent Technologies, Inc. .............. 7,220,841
*150,000 Worldcom, Inc. ......................... 7,265,625
------------
14,486,466
------------
TRANSPORTATION--1.0%
103,552 Union Pacific Corp. .................... 4,569,232
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- COMMON STOCKS (CONTINUED) ------------
UTILITIES--GAS & ELECTRIC--3.0%
<C> <S> <C>
121,500 DQE, Inc. .............................. $ 4,374,000
118,126 Florida Progress Corp. ................. 4,857,932
93,253 Texas Utilities Co. .................... 3,881,656
------------
13,113,588
------------
TOTAL COMMON STOCKS
(Cost $209,077,166)..................... 417,925,528
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- -----------
<C> <S> <C>
MONEY MARKET FUND--4.2%
$18,658,800 ACM Institutional Reserves (Prime
Portfolio), 5.49% (a) (Cost
$18,658,800)............................ 18,658,800
------------
</TABLE>
<TABLE>
<C> <S> <C>
REPURCHASE AGREEMENT--1.1%
5,000,000 Repurchase agreement with Deutsche Bank,
5.98%, due 7/01/98, repurchase price
$5,000,831 (Collateral-- FHMLC
Discounted Note, 7/14/98; UST Note,
8.875%, 11/15/98; aggregate market value
plus accrued interest $5,100,469) (Cost
$5,000,000)............................. 5,000,000
------------
TOTAL INVESTMENTS BEFORE OUTSTANDING
WRITTEN CALL OPTIONS
(Cost $232,735,966) (b)-- 99.9%......... 441,584,328
------------
</TABLE>
<TABLE>
<CAPTION>
STRIKE MARKET
CONTRACTS PRICE VALUE
- ----------- ------ ------------
<C> <S> <C> <C>
OUTSTANDING WRITTEN CALL OPTIONS--0.0%
*(100) Merck & Co., expiration July
1998............................ 140 $ (10,000)
*(100) Pfizer, Inc., expiration July
1998............................ 120 (3,750)
*(100) Pfizer, Inc., expiration July
1998............................ 125 (1,250)
------------
TOTAL OUTSTANDING WRITTEN CALL OPTIONS
(Premiums received $67,948)............. (15,000)
------------
</TABLE>
TOTAL INVESTMENTS NET OF OUTSTANDING
WRITTEN CALL OPTIONS
(Cost $232,668,018)--99.9%................ 441,569,328
Other assets less liabilities-- 0.1%...... 257,279
------------
NET ASSETS--100.0%........................ $441,826,607
------------
------------
ADR AMERICAN DEPOSITARY RECEIPT.
FHLMC FEDERAL HOME LOAN MORTGAGE CORPORATION.
UST UNITED STATES TREASURY.
* NON-INCOME PRODUCING SECURITY.
(a) REPRESENTS ANNUALIZED YIELD AT JUNE 30, 1998.
(b) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES. AT JUNE 30, 1998, NET UNREALIZED APPRECIATION WAS $208,848,362
BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED OF AGGREGATE
GROSS UNREALIZED APPRECIATION OF $212,221,722 AND AGGREGATE GROSS
UNREALIZED DEPRECIATION OF $3,373,360.
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value,
(Identified cost $232,735,966).......................... $441,584,328
Cash...................................................... 192
Receivables:
Investments sold........................................ 5,000,000
Dividends............................................... 413,761
Capital stock sold...................................... 319,231
Interest................................................ 60,601
Deferred organization costs and other assets.............. 128,103
------------
TOTAL ASSETS.......................................... 447,506,216
------------
LIABILITIES:
Payables:
Investments purchased................................... 5,331,000
Services provided by the Bank of New York and
Administrator......................................... 280,188
Capital stock repurchased............................... 25,039
Outstanding call options written (premiums received
$67,948)................................................ 15,000
Accrued expenses and other liabilities.................... 28,382
------------
TOTAL LIABILITIES..................................... 5,679,609
------------
NET ASSETS:................................................. $441,826,607
------------
------------
SOURCES OF NET ASSETS:
Capital stock @ par....................................... $ 34,508
Capital surplus........................................... 215,821,005
Distributions in excess of net investment income.......... (393,162)
Accumulated net realized gain on investments.............. 17,462,947
Net unrealized appreciation on investments................ 208,901,309
------------
NET ASSETS.................................................. $441,826,607
------------
------------
INSTITUTIONAL SHARES:
Net assets................................................ $427,206,603
------------
------------
Shares outstanding........................................ 33,362,997
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 12.80
------------
------------
INVESTOR SHARES:
Net assets................................................ $ 14,620,004
------------
------------
Shares outstanding........................................ 1,144,672
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 12.77
------------
------------
Institutional Shares authorized @ $.001
par value................................................. 200,000,000
Investor Shares authorized @ $.001 par value................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $16,847)... $ 2,950,711
Interest.................................................. 400,965
------------
TOTAL INCOME............................................ 3,351,676
------------
EXPENSES:
Advisory.................................................. 1,230,715
Administration............................................ 410,239
12b-1 fee--Investor Shares................................ 15,024
Registration and filings.................................. 51,562
Transfer agent............................................ 51,171
Accounting services....................................... 29,753
Custodian................................................. 26,107
Reports to shareholders................................... 10,387
Organization.............................................. 8,856
Audit..................................................... 8,377
Cash management........................................... 4,125
Directors................................................. 3,838
Legal..................................................... 3,609
Insurance................................................. 3,444
Other..................................................... 13,247
------------
TOTAL EXPENSES.......................................... 1,870,454
Fees waived by the Bank of New York (Note 3).............. (172,196)
Earnings credit adjustment (Note 3)....................... (1,229)
------------
NET EXPENSES............................................ 1,697,029
------------
NET INVESTMENT INCOME................................... 1,654,647
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on:
Investments............................................. 18,670,760
Written call options.................................... 358,599
------------
Net realized gain on investments.......................... 19,029,359
------------
Increase in unrealized appreciation on:
Investments............................................. 46,403,177
Written call options.................................... 41,874
------------
Net unrealized gain on investments during the period...... 46,445,051
------------
Net realized and unrealized gain on investments........... 65,474,410
------------
Net increase in net assets resulting from operations...... $ 67,129,057
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
SIX MONTHS ENDED APRIL 1, 1997*
JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997
---------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 1,654,647 $ 2,368,340
Net realized gain on investments.................................... 19,029,359 54,399,001
Increase in unrealized appreciation on investments during the
period............................................................ 46,445,051 28,778,609
---------------- -----------------
Net increase in net assets resulting from operations.............. 67,129,057 85,545,950
---------------- -----------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares.......... (2,017,422) (2,318,068)
Investor Shares............... (62,021) (17,933)
Distributions from capital gains: Institutional Shares.............. -0- (55,015,232)
Investor Shares................... -0- (950,886)
---------------- -----------------
(2,079,443) (58,302,119)
---------------- -----------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1)..... 26,614,980 371,116,638
Investor Shares................... 8,264,886 7,761,628
Proceeds from shares issued on reinvestment of dividends
and distributions: Institutional Shares........................... 309,306 54,402,109
Investor Shares.................................... 57,631 969,794
Cost of capital stock repurchased: Institutional Shares............. (36,241,744) (80,102,249)
Investor Shares.................. (2,018,402) (1,601,415)
---------------- -----------------
Net increase (decrease) in net assets resulting from capital stock
transactions.................................................... (3,013,343) 352,546,505
---------------- -----------------
INCREASE IN NET ASSETS.......................................... 62,036,271 379,790,336
NET ASSETS:
Beginning of period................................................. 379,790,336 -0-
---------------- -----------------
End of period (includes undistributed net investment income of
$31,634 at December 31, 1997)..................................... $ 441,826,607 $379,790,336
---------------- -----------------
---------------- -----------------
CHANGES IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1).......................... 2,230,676 35,761,158
Investor Shares........................................ 714,943 632,712
Shares issued on reinvestment of dividends
and distributions: Institutional Shares........................... 23,995 4,970,948
Investor Shares.................................... 4,721 88,650
Shares repurchased: Institutional Shares............................ (3,025,772) (6,598,008)
Investor Shares................................. (166,839) (129,515)
---------------- -----------------
Net increase (decrease)........................................... (218,276) 34,725,945
Shares outstanding, beginning of period............................. 34,725,945 -0-
---------------- -----------------
Shares outstanding, end of period................................... 34,507,669 34,725,945
---------------- -----------------
---------------- -----------------
* COMMENCEMENT OF INVESTMENT OPERATIONS.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
----------------------------------- -----------------------------------
SIX MONTHS FOR THE PERIOD SIX MONTHS FOR THE PERIOD
ENDED APRIL 1, 1997* ENDED MAY 1, 1997*
JUNE 30, 1998 THROUGH JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997 (UNAUDITED) DECEMBER 31, 1997
-------------- ------------------ -------------- ------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 10.94 $ 10.00 $ 10.92 $ 10.70
-------------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.05 0.08 0.03 0.06
Net realized and unrealized gain on
investments........................... 1.87 2.83 1.88 2.12
-------------- -------- ------- -------
Total from investment operations...... 1.92 2.91 1.91 2.18
-------------- -------- ------- -------
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income................................ (0.06) (0.08) (0.06) (0.07)
Distributions from capital gains........ -0- (1.89) -0- (1.89)
-------------- -------- ------- -------
Total dividends and distributions..... (0.06) (1.97) (0.06) (1.96)
-------------- -------- ------- -------
Net asset value at end of period........ $ 12.80 $ 10.94 $ 12.77 $ 10.92
-------------- -------- ------- -------
-------------- -------- ------- -------
TOTAL RETURN:........................... 17.59%** 29.11%** 17.53%** 20.37%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $427,207 $373,326 $14,620 $ 6,464
Ratio to average net assets of:
Expenses, net of waiver from The Bank
of New York......................... 0.82%*** 0.82%*** 1.07%*** 1.07%***
Expenses, prior to waiver from The
Bank of New York.................... 0.90%*** 0.88%*** 1.17%*** 1.16%***
Net investment income, net of waiver
from The Bank of New York........... 0.81%*** 0.89%*** 0.58%*** 0.54%***
Portfolio turnover rate................. 9% 37% 9% 37%
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ---------- ------------
<C> <S> <C>
COMMON STOCKS--97.3%
ADVERTISING & MARKETING
SERVICES--3.7%
*96,700 CulturalAccessWorldwide, Inc. .......... $ 942,825
*3,975 DoubleClick, Inc. ...................... 197,508
*177,246 Ha-Lo Industries, Inc. ................. 5,516,782
------------
6,657,115
------------
AIRLINES--2.6%
94,000 ASA Holdings, Inc. ..................... 4,664,750
------------
BANKING--2.4%
94,400 Peoples Heritage Financial Group,
Inc. ................................... 2,230,200
79,900 UST Corp. .............................. 2,117,350
------------
4,347,550
------------
BIOSCIENCES--0.5%
*160,075 Aurora Biosciences Corp. ............... 940,441
------------
BUILDING MATERIALS--1.2%
12,050 Lone Star Industries, Inc. ............. 928,603
22,425 Texas Industries, Inc. ................. 1,188,525
------------
2,117,128
------------
COMMERCIAL SERVICES--0.8%
*57,500 FirstService Corp. ..................... 733,125
*60,625 Mac-Gray Corp. ......................... 772,969
------------
1,506,094
------------
COMPUTER SERVICES--6.0%
*56,600 Mastech Corp. .......................... 1,591,875
*150,720 Network Appliance, Inc. ................ 5,868,660
*83,452 Veritas Software Corp. ................. 3,452,826
------------
10,913,361
------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
COMPUTERS--SOFTWARE &
PERIPHERALS--7.3%
*47,850 CBT Group PLC (ADR)..................... $ 2,559,975
*40,750 Crystal Systems Solutions............... 570,500
*73,425 HNC Software, Inc. ..................... 2,996,658
*97,130 Saville Systems PLC (ADR)............... 4,868,641
*89,600 THINK New Ideas, Inc.................... 2,340,800
------------
13,336,574
------------
DATA PROCESSING SYSTEMS--5.7%
78,400 Applied Graphics Technologies, Inc. .... 3,586,800
*4,850 CSG Systems International, Inc. ........ 227,344
*25,775 I2 Technologies, Inc. .................. 905,347
*195,200 MedQuist, Inc. ......................... 5,636,400
------------
10,355,891
------------
EDUCATION--7.9%
*219,606 DeVry, Inc. ............................ 4,817,607
*49,580 Education Management Corp. ............. 1,629,942
*148,570 ITT Educational Services, Inc. ......... 4,791,382
*94,155 Sylvan Learning Systems, Inc. .......... 3,083,576
------------
14,322,507
------------
ELECTRICAL EQUIPMENT--2.3%
*61,675 Gemstar International Group Ltd. ....... 2,308,958
*58,800 Vitesse Semiconductor Corp. ............ 1,815,450
------------
4,124,408
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ---------- ------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
ENTERTAINMENT--1.0%
*58,390 Cinar Films, Inc. ...................... $ 1,138,605
*31,050 Imax Corp. ............................. 708,328
------------
1,846,933
------------
FINANCIAL SERVICES--3.5%
*76,600 Amerin Corp. ........................... 2,235,762
87,740 Bank United Corp., Class A.............. 4,200,552
------------
6,436,314
------------
FOOD PROCESSING--2.5%
*76,755 Suiza Foods Corp. ...................... 4,581,314
------------
FOOD WHOLESALING--2.4%
*123,200 U.S. Foodservice, Inc. ................. 4,319,700
------------
FOOD--RETAIL--1.5%
*60,000 Dominick's Supermarkets, Inc. .......... 2,673,750
------------
FUNERAL SERVICES--CEMETERY--2.4%
*178,742 Equity Corp. International.............. 4,289,808
------------
HOMEBUILDERS--1.0%
*60,725 Toll Brothers, lnc. .................... 1,742,048
------------
INSURANCE--1.1%
64,800 AmerUs Life Holdings, Inc., Class A..... 2,097,900
------------
INVESTMENT MANAGEMENT--3.8%
20,300 Legg Mason, Inc. ....................... 1,168,519
70,887 PIMCO Advisors Holdings LP.............. 2,419,019
142,000 Waddell & Reed Financial, Inc., Class
A....................................... 3,399,125
------------
6,986,663
------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ---------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MANUFACTURING--6.0%
*90,165 Scotts Co. (The), Class A............... $ 3,358,646
*76,435 Waters Corp. ........................... 4,504,888
140,192 Wolverine World Wide.................... 3,040,414
------------
10,903,948
------------
MEDIA--0.5%
*24,100 Sportsline USA, Inc. ................... 881,156
------------
MEDICAL CARE & PRODUCTS--2.6%
*70,000 Computer Motion, Inc. .................. 910,000
*51,500 Patterson Dental Co. ................... 1,886,187
*42,300 Renal Care Group, Inc. ................. 1,863,844
------------
4,660,031
------------
OIL & GAS--7.4%
*135,550 B.J. Services Co. ...................... 3,939,422
*134,425 Global Industries Ltd. ................. 2,268,422
*78,860 National-Oilwell Inc. .................. 2,114,434
*95,835 R & B Falcon Corp. ..................... 2,168,267
*63,800 Stolt Comex Seaway, SA.................. 1,236,125
*31,900 Stolt Comex Seaway, SA (ADR)............ 558,250
*64,750 Tuboscope Vetco International Corp. .... 1,278,812
------------
13,563,732
------------
PARKING FACILITIES--2.5%
97,010 Central Parking Corp. .................. 4,510,965
------------
PHARMACEUTICALS--1.1%
*31,675 MedImmune, Inc. ........................ 1,975,728
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ---------- ------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
REAL ESTATE INVESTMENT TRUSTS--4.1%
45,483 Avalon Bay Communities, Inc. ........... $ 1,728,354
44,800 General Growth Properties............... 1,674,400
62,300 Liberty Property Trust.................. 1,592,544
70,250 Meridian Industrial Trust, Inc. ........ 1,615,750
20,550 Post Properties, Inc. .................. 791,175
------------
7,402,223
------------
RECORDS STORAGE--2.5%
*102,230 Iron Mountain, Inc. .................... 4,574,793
------------
RESORTS & ENTERTAINMENT--1.1%
*78,215 Vail Resorts, Inc. ..................... 2,082,474
------------
RETAIL--SPECIALTY STORES--3.0%
*2,725 Amazon.com, Inc. ....................... 271,819
*176,100 Duane Reade, Inc. ...................... 5,283,000
------------
5,554,819
------------
TELECOMMUNICATIONS--1.2%
*7,525 Broadcom Corp. ......................... 554,028
*57,300 World Access, Inc. ..................... 1,719,000
------------
2,273,028
------------
TEXTILE--5.7%
*174,010 Jones Apparel Group, Inc. .............. 6,362,241
230,300 Shaw Industries, Inc. .................. 4,059,038
------------
10,421,279
------------
TOTAL COMMON STOCKS
(Cost $147,102,992)..................... 177,064,425
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
MONEY MARKET FUND--1.7%
$3,127,000 ACM Institutional Reserves (Prime
Portfolio), 5.49% (a) (Cost
$3,127,000)............................. $ 3,127,000
------------
</TABLE>
TOTAL INVESTMENTS
(Cost $150,229,992) (b)-- 99.0%......... 180,191,425
Other assets less liabilities-- 1.0%.... 1,900,284
------------
NET ASSETS--100.0%...................... $182,091,709
------------
------------
ADR AMERICAN DEPOSITARY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
(a) REPRESENTS ANNUALIZED YIELD AT JUNE 30, 1998.
(b) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES. AT JUNE 30, 1998, NET UNREALIZED APPRECIATION WAS $29,961,433
BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED OF AGGREGATE
GROSS UNREALIZED APPRECIATION OF $33,619,595 AND AGGREGATE GROSS UNREALIZED
DEPRECIATION OF $3,658,162.
SEE NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value,
(Identified cost $150,229,992).......................... $180,191,425
Cash...................................................... 529
Receivables:
Investments sold........................................ 1,835,933
Capital stock sold...................................... 1,666,111
Dividends............................................... 119,019
Interest................................................ 33,963
Deferred organization costs and other assets.............. 48,758
------------
TOTAL ASSETS.......................................... 183,895,738
------------
LIABILITIES:
Payables:
Investments purchased................................... 1,648,504
Services provided by the Bank of New York and
Administrator......................................... 124,773
Capital stock repurchased............................... 17,841
Accrued expenses and other liabilities.................... 12,911
------------
TOTAL LIABILITIES..................................... 1,804,029
------------
NET ASSETS:................................................. $182,091,709
------------
------------
SOURCES OF NET ASSETS:
Capital stock @ par....................................... $ 14,154
Capital surplus........................................... 145,557,659
Undistributed net investment loss......................... (168,321)
Accumulated net realized gain on investments.............. 6,726,784
Net unrealized appreciation on investments................ 29,961,433
------------
NET ASSETS.................................................. $182,091,709
------------
------------
INSTITUTIONAL SHARES:
Net assets................................................ $175,664,686
------------
------------
Shares outstanding........................................ 13,654,422
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 12.87
------------
------------
INVESTOR SHARES:
Net assets................................................ $ 6,427,023
------------
------------
Shares outstanding........................................ 499,863
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 12.86
------------
------------
Institutional Shares authorized @ $.001
par value................................................. 200,000,000
Investor Shares authorized at @ $.001
par value................................................. 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................................. $ 308,601
Interest.................................................. 260,334
-----------
TOTAL INCOME............................................ 568,935
-----------
EXPENSES:
Advisory.................................................. 566,419
Administration............................................ 151,045
12b-1 fee--Investor Shares................................ 5,546
Transfer agent............................................ 35,729
Accounting services....................................... 29,753
Registration and filings.................................. 22,221
Custodian................................................. 15,594
Reports to shareholders................................... 3,928
Directors................................................. 3,838
Organization.............................................. 3,810
Audit..................................................... 2,751
Cash management........................................... 1,540
Insurance................................................. 1,307
Legal..................................................... 1,213
Other..................................................... 10,115
-----------
TOTAL EXPENSES.......................................... 854,809
Fees waived by the Bank of New York (Note 3).............. (113,415)
Earnings credit adjustment (Note 3)....................... (1,693)
-----------
NET EXPENSES............................................ 739,701
-----------
NET INVESTMENT LOSS..................................... (170,766)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments.......................... 4,708,752
Increase in unrealized appreciation on
Investments during the period........................... 7,400,503
-----------
Net realized and unrealized gain on investments........... 12,109,255
-----------
Net increase in net assets resulting from operations...... $11,938,489
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
SIX MONTHS ENDED APRIL 1, 1997*
JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997
---------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment loss................................................. $ (170,766) $ (230,091)
Net realized gain on investments.................................... 4,708,752 11,291,266
Increase in unrealized appreciation on investments during the
period............................................................ 7,400,503 12,899,933
---------------- -----------------
Net increase in net assets resulting from operations.............. 11,938,489 23,961,108
---------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from capital gains: Institutional Shares.............. -0- (8,963,629)
Investor Shares................... -0- (77,069)
---------------- -----------------
-0- (9,040,698)
---------------- -----------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1)..... 40,432,361 128,542,581
Investor Shares................... 17,419,294 1,180,363
Proceeds from shares issued on reinvestment
of distributions: Institutional Shares............................ -0- 8,181,980
Investor Shares..................................... -0- 76,934
Cost of capital stock repurchased: Institutional Shares............. (10,015,596) (17,984,055)
Investor Shares.................. (12,584,873) (16,179)
---------------- -----------------
Net increase in net assets resulting from capital stock
transactions.................................................... 35,251,186 119,981,624
---------------- -----------------
INCREASE IN NET ASSETS.......................................... 47,189,675 134,902,034
NET ASSETS:
Beginning of period................................................. 134,902,034 -0-
---------------- -----------------
End of period (includes undistributed net investment income of
$2,445 at December 31, 1997)...................................... $ 182,091,709 $134,902,034
---------------- -----------------
---------------- -----------------
CHANGES IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1).......................... 3,262,426 11,960,101
Investor Shares........................................ 1,407,282 92,035
Shares issued on reinvestment of dividends
and distributions: Institutional Shares........................... -0- 685,832
Investor Shares.................................... -0- 6,443
Shares repurchased: Institutional Shares............................ (814,769) (1,439,168)
Investor Shares................................. (1,004,665) (1,232)
---------------- -----------------
Net increase...................................................... 2,850,274 11,304,011
Shares outstanding, beginning of period............................. 11,304,011 -0-
---------------- -----------------
Shares outstanding, end of period................................... 14,154,285 11,304,011
---------------- -----------------
---------------- -----------------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
----------------------------------- -----------------------------------
SIX MONTHS FOR THE PERIOD SIX MONTHS FOR THE PERIOD
ENDED APRIL 1, 1997* ENDED MAY 1, 1997*
JUNE 30, 1998 THROUGH JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997 (UNAUDITED) DECEMBER 31, 1997
-------------- ------------------ -------------- ------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 11.93 $ 10.00 $ 11.94 $ 10.03
-------------- -------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss..................... (0.01) (0.02) (0.01) (0.02)
Net realized and unrealized gain on
investments........................... 0.95 2.80 0.93 2.78
-------------- -------- ------- -------
Total from investment operations...... 0.94 2.78 0.92 2.76
-------------- -------- ------- -------
DISTRIBUTIONS
Distributions from capital gains........ -0- (0.85) -0- (0.85)
-------------- -------- ------- -------
Net asset value at end of period........ $ 12.87 $ 11.93 $ 12.86 $ 11.94
-------------- -------- ------- -------
-------------- -------- ------- -------
TOTAL RETURN:........................... 7.88%** 27.80%** 7.71%** 27.52%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $175,665 $133,741 $ 6,427 $ 1,162
Ratio to average net assets of:
Expenses, net of waiver from The Bank
of New York......................... 0.97%*** 0.97%*** 1.22%*** 1.22%***
Expenses, prior to waiver from The
Bank of New York.................... 1.12%*** 1.10%*** 1.41%*** 1.40%***
Net investment loss, net of waiver
from The Bank of New York........... (0.22)%*** (0.26)%*** (0.44)%*** (0.54)%***
Portfolio turnover rate................. 50% 68% 50% 68%
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS--97.5%
AUSTRALIA--2.5%
*23,800 AMP Ltd. ............................... $ 278,561
15,660 Australia and New Zealand Banking Group
Ltd. ................................... 108,033
28,500 Australian Gas Light Co. Ltd. .......... 178,257
47,900 Broken Hill Propietary Co. Ltd. ........ 404,902
75,900 Colonial Ltd. .......................... 229,373
*7,140 Colonial Ltd. 1998 Rights, expiration
July 1998............................... 1,636
38,850 Commonwealth Bank of Australia.......... 453,266
35,600 Foster's Brewing Group Ltd.............. 83,775
83,400 GIO Australia Holdings Ltd.............. 214,026
52,500 Hoyts Cinemas Group..................... 68,275
26,700 National Australian Bank Ltd. .......... 352,186
81,500 Publishing & Broadcasting Ltd. ......... 350,771
23,100 Rio Tinto Ltd. ......................... 274,659
*116,900 Telstra Corp. Ltd. ..................... 299,706
41,150 Westpac Banking Corp. .................. 251,008
16,300 Woodside Petroleum Ltd. ................ 81,359
129,900 Woolworths Ltd. ........................ 422,328
------------
4,052,121
------------
BRAZIL--1.0%
15,037 Companhia Energetica de Minas Gerais
(ADR)................................... 465,433
10,300 Telecomunicacoes Brasileiras SA (ADR)... 1,124,631
------------
1,590,064
------------
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FINLAND--1.1%
25,200 Nokia AB, A Shares...................... $ 1,853,313
------------
FRANCE--11.8%
*4,200 Accor SA................................ 1,175,389
8,555 Alcatel Alsthom Nouvelles............... 1,741,847
6,800 Cap Gemini SA........................... 1,068,475
1,010 Carrefour Supermarche SA................ 638,976
7,000 Compagnie de Saint-Gobain............... 1,297,883
8,600 France Telecom SA....................... 593,153
7,625 L'Air Liquide........................... 1,261,164
2,130 L'OREAL................................. 1,184,782
4,300 Legrand SA.............................. 1,137,942
9,610 Paribas................................. 1,028,394
1,200 Pinault-Printemps-Redoute SA............ 1,004,300
*23,100 Renault SA.............................. 1,313,941
1,370 Rexel SA................................ 584,165
6,400 Rhodia, Inc. ........................... 178,472
6,600 Societe BIC SA.......................... 469,401
3,750 Synthelabo.............................. 632,650
11,000 Total SA, B Shares...................... 1,430,036
10,450 Valeo SA................................ 1,068,161
7,000 Vivendi................................. 1,494,707
------------
19,303,838
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- --------- ------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
GERMANY--10.1%
4,430 Adidas-Salomon AG....................... $ 765,740
5,227 Allianz AG.............................. 1,723,047
27,820 BASF AG................................. 1,317,789
18,000 Bayer AG................................ 928,421
20,000 Bayerische Vereinsbank AG............... 1,700,831
24,045 Daimler Benz AG......................... 2,357,875
12,500 Deutsche Bank AG........................ 1,058,518
23,000 Deutsche Telekom AG..................... 620,554
13,000 Douglas Holding AG...................... 687,812
1,250 Muenchener Rueckver AG.................. 619,806
3,390 SAP AG-Vorzug........................... 2,304,449
11,300 Siemens AG.............................. 687,391
26,250 VEBA AG................................. 1,788,781
------------
16,561,014
------------
GREECE--1.6%
24,818 Hellenic Tellecommunication Organization
SA...................................... 636,182
34,566 Intracom SA............................. 1,170,641
6,120 National Bank Of Greece SA.............. 784,208
------------
2,591,031
------------
HONG KONG--2.0%
134,000 Beijing Datang Power Generation Co.
Ltd. ................................... 37,613
57,000 Cheung Kong Holdings Ltd................ 280,270
*188,000 China Telecom (Hong Kong) Ltd. ......... 326,330
*3,600 China Telecom (Hong Kong) Ltd. (ADR).... 124,425
77,000 CLP Holdings Ltd. ...................... 350,786
16,000 HSBC Holdings PLC....................... 391,296
14,500 Hang Seng Bank Ltd. .................... 81,963
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
59,500 Hong Kong Electric Holdings Ltd. ....... $ 184,291
235,200 Hong Kong Telecommunications Ltd. ...... 441,649
99,000 Hutchison Whampoa Ltd. ................. 522,559
47,000 New World Development Co. Ltd. ......... 90,984
31,000 Shanghai Industrial Holdings Ltd. ...... 73,013
30,000 Sun Hung Kai Properties Ltd. ........... 127,378
234,000 Tianjin Development Holdings Ltd. ...... 199,313
------------
3,231,870
------------
HUNGARY--0.5%
28,000 MOL Magyar Olaj-es Gazipare, A Shares
(GDR)................................... 754,600
------------
IRELAND--1.1%
61,233 Allied Irish Banks PLC.................. 885,339
70,900 CRH PLC................................. 1,006,773
------------
1,892,112
------------
ITALY--4.4%
32,000 Assicurazioni Generali.................. 1,040,533
267,000 Banca Commerciale Italiana.............. 1,596,698
172,000 Credito Italiano........................ 900,374
125,000 ENI SpA................................. 819,246
269,600 Telecom Italia SpA--RNC................. 1,305,115
449,000 Telecom Italia Mobile SpA-- RNC......... 1,515,569
------------
7,177,535
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- --------- ------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
JAPAN--15.8%
35,000 Canon, Inc. ............................ $ 794,394
20,600 Circle K Japan Co. Ltd. ................ 716,922
110,000 Fuji Heavy Industries Ltd. ............. 544,511
*36,000 Fuji Photo Film......................... 1,252,873
33,000 Fujitsi Ltd. ........................... 347,156
19,000 Honda Motor Co. Ltd. ................... 676,298
30,000 Kurita Water Industries Ltd............. 354,505
12,000 Kyocera Corp. .......................... 586,231
20,000 Marui Co. Ltd. ......................... 298,303
*26,000 Matsushita Electric Industrial Co.
Ltd. ................................... 417,768
142,000 Minebea Co. Ltd. ....................... 1,412,991
113,000 NEC Corp. .............................. 1,052,772
35,000 NTN Corp. .............................. 109,954
33 NTT Data Corp. ......................... 1,191,267
6,000 Nidec Corp.............................. 409,843
241,000 Ricoh Corp. Ltd. ....................... 2,537,025
17,000 Rohm Co. ............................... 1,745,506
25,000 Sanwa Bank Ltd. ........................ 223,547
7,000 Secom Co. Ltd. ......................... 404,006
83,000 Sharp Corp. ............................ 672,205
61,000 Shin-Etsu Chemical Co. Ltd.............. 1,054,869
19,700 Sony Corp. ............................. 1,696,257
100,000 Sumitomo Electric Industries............ 1,010,916
63,000 Sumitomo Sitix Corp. ................... 844,328
9,000 TDK Corp. .............................. 664,697
95,000 Takeda Chemical Industries.............. 2,525,849
119,000 Terumo Corp. ........................... 1,886,371
100,000 Toshiba Corp. .......................... 408,546
------------
25,839,910
------------
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MALAYSIA--0.3%
96,000 IOI Corp. Berhad........................ $ 47,913
19,200 Malayan Banking Berhad.................. 19,350
37,000 Petronas Gas Berhad..................... 68,692
3,800 Rothmans of Pall Mall Berhad............ 26,341
18,000 Sime Darby Berhad....................... 12,412
203,000 Tenaga Nasional Berhad.................. 244,726
------------
419,434
------------
MEXICO--1.4%
369,000 Controladora Commercial Mexicana SA..... 307,979
74,000 Desc SA de CV, Series B................. 379,223
82,000 Grupo Carson SA,
Series A1............................... 337,180
29,900 Grupo Radio Centro SA (ADR)............. 332,638
*12,500 Grupo Televisa SA (GDR)................. 470,313
136,000 Organizacion Soriana SA de CV, Series
B....................................... 390,474
------------
2,217,807
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- --------- ------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
NETHERLANDS--7.2%
45,100 ABN AMRO Holding NV..................... $ 1,055,334
16,300 AEGON NV................................ 1,418,297
*17,000 Baan Co. NV............................. 610,904
24,000 Dortsche Petroleum-Industries MIJ NV.... 1,236,457
35,240 ING Groep NV............................ 2,307,525
20,908 Oce NV.................................. 890,096
9,500 Philips Electronics NV.................. 798,594
41,600 Royal Dutch Petroleum Co................ 2,306,794
14,200 Unilever NV............................. 1,126,674
------------
11,750,675
------------
NEW ZEALAND--0.2%
40,000 Carter Holt Harvey Ltd. ................ 34,884
41,400 Telecom Corp. of New Zealand............ 170,637
43,000 Telecom Corp. of New Zealand Ltd. ...... 91,964
------------
297,485
------------
NORWAY--0.4%
21,000 Tomra Systems ASA....................... 629,439
------------
PHILIPPINES--0.0%
40,000 La Tondena Distillers, Inc. ............ 20,144
1,750,000 Pryce Corp. ............................ 53,717
------------
73,861
------------
POLAND--0.3%
35,000 Elektrim Spolka Akcyjna SA.............. 426,582
------------
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
PORTUGAL--1.5%
22,000 Cimentos De Portugal SA................. $ 772,954
37,500 Electricidade De Portugal SA............ 871,725
16,100 Portugal Telecom SA..................... 853,286
------------
2,497,965
------------
SINGAPORE--0.4%
51,000 City Developments Ltd. ................. 142,480
48,000 DBS Land Ltd. .......................... 39,775
72,000 NatSteel Ltd. .......................... 69,891
20,000 Oversea-Chinese Banking Corp. Ltd. ..... 68,067
9,000 Overseas Union Bank..................... 19,710
8,000 Singapore International Airlines
Ltd. ................................... 37,408
2,828 Singapore Press Holdings Ltd. .......... 18,915
177,000 Singapore Technologies Engineering
Ltd. ................................... 124,670
89,000 Singapore Telecommunications Ltd. ...... 126,428
24,000 United Overseas Bank Ltd. .............. 74,578
------------
721,922
------------
SOUTH KOREA--0.1%
9,500 Daewoo Heavy Industries................. 28,922
2,369 Samsung Display Devices Co.............. 64,703
125 Samsung Electronics Co. ................ 3,869
------------
97,494
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- --------- ------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
SPAIN--3.1%
70,800 Banco Santander......................... $ 1,815,207
56,000 Endesa SA............................... 1,227,252
44,950 Telefonica SA........................... 2,081,753
------------
5,124,212
------------
SWEDEN--2.2%
10,567 Astra AB, A Shares...................... 215,980
18,933 Astra AB, B Shares...................... 377,478
23,130 Electrolux AB, Series B................. 397,348
24,700 Sandvik AB, B Shares.................... 678,291
67,300 Telefonaktiebolaget LM Ericsson--B
Shares.................................. 1,966,282
------------
3,635,379
------------
SWITZERLAND--9.6%
2,320 Adecco SA (b)........................... 1,046,203
510 Alusuisse-Lonza Holding AG.............. 646,915
1,170 Clariant AG............................. 770,589
9,000 Credit Suisse Group..................... 2,002,571
125 Kuoni Reisen Holding AG................. 620,550
820 Nestle SA............................... 1,754,826
1,890 Novartis AG............................. 3,145,016
265 Roche Holding AG........................ 2,602,304
4,700 UBS AG.................................. 1,747,627
2,100 Zurich Versicherungs-Gesellschaft....... 1,340,190
------------
15,676,791
------------
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- --------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UNITED KINGDOM--18.9%
62,000 Abbey National PLC...................... $ 1,104,889
100,800 Bank Of Scotland........................ 1,128,597
53,000 Boots Co. PLC........................... 881,712
159,912 British Aerospace PLC................... 1,227,424
66,400 British Airways PLC..................... 715,188
53,000 British Land Co. PLC.................... 545,653
120,502 British Petroleum Co. .................. 1,754,347
146,000 British Telecommunications PLC.......... 1,796,679
55,731 CGU PLC................................. 1,040,597
31,660 CMG PLC................................. 994,493
152,000 Compass Group PLC....................... 1,750,042
80,081 Glaxo Wellcome PLC...................... 2,410,581
33,650 Imperial Chemical Industries PLC........ 542,398
46,000 Kingfisher PLC.......................... 745,303
130,537 Ladbroke Group PLC...................... 720,426
174,609 Lloyds TSB Group PLC.................... 2,438,641
114,100 Prudential Corp. PLC.................... 1,504,071
67,300 Reed International PLC.................. 608,092
149,000 Rentokil Initial PLC.................... 1,071,567
46,600 SEMA Group PLC.......................... 554,021
37,500 Siebe PLC............................... 750,250
143,966 SmithKline Beecham PLC.................. 1,752,431
64,859 Smiths Industries PLC................... 906,922
176,353 Vodafone Group PLC...................... 2,239,356
107,000 WPP Group PLC........................... 704,347
22,400 Zeneca Group PLC........................ 962,456
------------
30,850,483
------------
TOTAL COMMON STOCKS
(Cost $141,205,194)..................... 159,266,937
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
43
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- --------- -----------
<C> <S> <C>
PREFERRED STOCKS--0.5%
GERMANY--0.4%
3,800 Fresenius AG............................ $ 707,368
-----------
JAPAN--0.1%
18 Fuji Television Network, Inc. .......... 74,965
-----------
TOTAL PREFERRED STOCKS
(Cost $948,111)......................... 782,333
-----------
</TABLE>
<TABLE>
<C> <S> <C>
TOTAL INVESTMENTS
(Cost $142,153,305)(a)-- 98.0%.......... 160,049,270
Other assets less liabilities-- 2.0%.... 3,210,355
------------
NET ASSETS--100.0%...................... $163,259,625
------------
------------
</TABLE>
ADR AMERICAN DEPOSITARY RECEIPT.
GDR GLOBAL DEPOSITARY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
(a) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR THE FEDERAL INCOME
TAX PURPOSES. AT JUNE 30, 1998, NET UNREALIZED APPRECIATION WAS $17,895,965
BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED OF AGGREGATE
GROSS UNREALIZED APPRECIATION OF $24,182,160 AND AGGREGATE GROSS UNREALIZED
DEPRECIATION OF $6,286,195.
(b) SECURITY TRADES WITH RIGHTS EXPIRING JULY 1998.
SEE NOTES TO FINANCIAL STATEMENTS.
44
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
INDUSTRY DIVERSIFICATION
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF
TOTAL
US$ VALUE NET ASSETS
------------ ----------
<S> <C> <C>
Advertising and Marketing Services...... $ 704,347 0.4%
Aerospace and Defense................... 1,227,424 0.8
Agriculture............................. 47,913 0.0
Apparel................................. 765,740 0.5
Appliances.............................. 397,348 0.2
Automobiles and Trucks.................. 4,348,114 2.7
Automotive.............................. 1,068,161 0.7
Automotive Parts and Equipment.......... 544,511 0.3
Banking................................. 11,279,616 6.9
Banks--Foreign Institutions............. 2,876,224 1.8
Banks--Money Center..................... 7,513,149 4.6
Beverages--Brewers...................... 83,775 0.1
Beverages--Distillers................... 20,144 0.0
Broadcasting............................ 74,965 0.1
Building Materials...................... 3,077,610 1.9
Business Equipment and Services......... 3,331,419 2.0
Chemicals--Basic........................ 770,589 0.5
Chemicals--Diversified.................. 3,843,477 2.4
Chemicals--Miscellaneous................ 178,472 0.1
Chemicals--Specialty.................... 2,514,037 1.5
Commercial Services..................... 1,046,203 0.6
Communications Equipment and Systems.... 3,708,129 2.3
Communications and Publishing........... 350,771 0.2
Computer Services....................... 2,062,968 1.3
Computers............................... 2,363,792 1.5
Computers--Software & Peripherals....... 4,106,620 2.5
Conglomerates........................... 1,071,567 0.7
Consumer Electronics.................... 1,696,257 1.0
Consumer Non-Durables................... 1,754,826 1.1
Consumer Products....................... 1,126,674 0.7
Cosmetics and Toiletries................ 1,184,782 0.7
Distribution & Wholesale................ 68,692 0.0
Electrical Equipment.................... 5,823,977 3.6
Electrical and Electronic Equipment..... 1,437,641 0.9
Electronic Equipment & Components....... 4,890,182 3.0
Electronics............................. 1,668,033 1.0
Engineering............................. 124,670 0.1
Entertainment........................... 68,275 0.0
Environment Managment................... 629,439 0.4
Finance Companies....................... 231,009 0.1
Financial Services...................... 2,142,794 1.3
Food & Beverages........................ 1,750,042 1.1
Forest and Paper Products............... 34,884 0.0
</TABLE>
45
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
INDUSTRY DIVERSIFICATION (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF
TOTAL
US$ VALUE NET ASSETS
------------ ----------
<S> <C> <C>
Holdings Companies--Diversified......... $ 914,194 0.6%
Insurance............................... 1,938,964 1.2
Insurance--Life......................... 1,504,071 0.9
Insurance--Multi-Line................... 5,522,067 3.4
Leisure and Home Entertainment.......... 720,426 0.4
Lodging................................. 1,175,389 0.7
Machinery & Equipment................... 678,291 0.4
Manufacturing........................... 1,780,172 1.1
Manufacturing--Miscellaneous............ 652,368 0.4
Media................................... 802,951 0.5
Metal--Non-Ferrous...................... 646,915 0.4
Mining.................................. 679,561 0.4
Miscellaneous........................... 536,493 0.3
Office Equipment........................ 890,096 0.5
Oil and Gas............................. 10,349,877 6.3
Pharmaceuticals......................... 17,218,484 10.5
Publishing.............................. 627,007 0.4
Real Estate Development................. 1,280,257 0.8
Retail--Department Stores............... 1,693,077 1.0
Retail--Food Stores..................... 422,328 0.3
Retail--General Merchandise............. 1,663,877 1.0
Retailing............................... 2,314,827 1.4
Steel................................... 69,891 0.0
Telecommunications...................... 13,856,910 8.5
Telecommunications--Non-U.S............. 2,389,830 1.5
Telecommunications--Telephone
Companies............................. 1,124,631 0.7
Tobacco................................. 26,341 0.0
Transportation: Air..................... 752,596 0.5
Travel Services......................... 620,550 0.4
Utilities--Electric..................... 1,338,355 0.8
Utilities--Water........................ 1,494,707 0.9
Water Projects.......................... 354,505 0.2
------------ -----
Total value of investments.............. 160,049,270 98.0
Other assets, less liabilities.......... 3,210,355 2.0
------------ -----
Net Assets.............................. $163,259,625 100.0%
------------ -----
------------ -----
</TABLE>
46
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value (Identified cost
$142,153,305)........................................... $160,049,270
Cash...................................................... 7,350,019
Receivables:
Investment sold......................................... 889,413
Capital stock sold...................................... 761,000
Dividends............................................... 365,726
Deferred organization costs and other assets.............. 37,481
------------
TOTAL ASSETS.......................................... 169,452,909
------------
LIABILITIES:
Payables:
Investments purchased................................... 5,998,845
Services provided by The Bank of New York and
Administrator......................................... 96,784
Accrued expenses and other liabilities.................... 97,655
------------
TOTAL LIABILITIES..................................... 6,193,284
------------
NET ASSETS:................................................. $163,259,625
------------
------------
SOURCES OF NET ASSETS:
Capital stock @ par....................................... $ 13,104
Capital surplus........................................... 150,289,657
Accumulated net realized loss on investments.............. (5,714,440)
Undistributed net investment income....................... 784,491
Net unrealized appreciation on investments................ 17,895,965
Net unrealized depreciation on foreign currency
transactions............................................ (9,152)
------------
NET ASSETS.................................................. $163,259,625
------------
------------
INSTITUTIONAL SHARES:
Net assets................................................ $158,644,709
------------
------------
Shares outstanding........................................ 12,732,418
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 12.46
------------
------------
INVESTOR SHARES:
Net assets................................................ $ 4,614,916
------------
------------
Shares outstanding........................................ 371,833
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 12.41
------------
------------
Institutional Shares authorized @ $.001 par value........... 200,000,000
Investor Shares authorized @ $.001 par value................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of
$226,099)............................................... $ 1,718,773
-----------
EXPENSES:
Advisory.................................................. 527,742
Administration............................................ 124,176
12b-1 fee--Investor Shares................................ 4,894
Custodian................................................. 54,304
Accounting services....................................... 38,680
Transfer agent............................................ 31,863
Registration and filings.................................. 20,016
Directors................................................. 3,781
Audit..................................................... 3,042
Reports to shareholders................................... 2,315
Organization.............................................. 1,991
Cash management........................................... 1,128
Legal..................................................... 994
Insurance................................................. 959
Other..................................................... 18,480
-----------
TOTAL EXPENSES.......................................... 834,365
Fees waived by the Bank of New York....................... (41,042)
Earnings credit adjustment (Note 3)....................... (34)
-----------
NET EXPENSES............................................ 793,289
-----------
NET INVESTMENT INCOME................................... 925,484
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized loss on:
Investments............................................. (997,671)
Foreign currency transactions........................... (262,802)
-----------
Net realized loss on investments.......................... (1,260,473)
-----------
Increase (decrease) in unrealized appreciation on:
Investments............................................. 17,053,064
Foreign currency denominated assets and liabilities..... (6,126)
-----------
Net unrealized gain on investments during the period...... 17,046,938
-----------
Net realized and unrealized gain on investments........... 15,786,465
-----------
Net increase in net assets resulting from operations...... $16,711,949
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
47
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
SIX MONTHS ENDED APRIL 1, 1997*
JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997
-------------------- ---------------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 925,484 $ 138,617
Net realized loss on investments and foreign currency transactions.. (1,260,473) (4,863,284)
Increase in unrealized appreciation on investments and foreign
currency denominated assets and liabilities during the period..... 17,046,938 839,875
-------------------- ---------------------
Net increase (decrease) in net assets resulting from operations... 16,711,949 (3,884,792)
-------------------- ---------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares.............. 51,852,834 108,400,074
Investor Shares......................... 1,619,663 2,786,448
Cost of capital stock repurchased: Institutional Shares............. (4,209,517) (9,914,630)
Investor Shares......................... (81,458) (20,946)
-------------------- ---------------------
Increase in net assets resulting from capital stock
transactions.................................................... 49,181,522 101,250,946
-------------------- ---------------------
INCREASE IN NET ASSETS.......................................... 65,893,471 97,366,154
NET ASSETS:
Beginning of period................................................. 97,366,154 -0-
-------------------- ---------------------
End of period (including undistributed net investment income of
$784,491 at June 30, 1998)........................................ $ 163,259,625 $ 97,366,154
-------------------- ---------------------
-------------------- ---------------------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares................................... 4,215,141 9,802,001
Investor Shares........................................... 138,567 241,976
Shares repurchased: Institutional Shares............................ (350,053) (934,671)
Investor Shares..................................... (6,808) (1,902)
-------------------- ---------------------
Net increase...................................................... 3,996,847 9,107,404
Shares outstanding, beginning of period............................. 9,107,404 -0-
-------------------- ---------------------
Shares outstanding, end of period................................... 13,104,251 9,107,404
-------------------- ---------------------
-------------------- ---------------------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
48
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
----------------------------------- -----------------------------------
SIX MONTHS FOR THE PERIOD SIX MONTHS FOR THE PERIOD
ENDED APRIL 1, 1997* ENDED MAY 1, 1997*
JUNE 30, 1998 THROUGH JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997 (UNAUDITED) DECEMBER 31, 1997
-------------- ------------------ -------------- ------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 10.69 $ 10.00 $ 10.66 $ 10.19
-------------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.08 0.02 0.08 0.02
Net realized and unrealized gain on
investments and foreign currency
transactions.......................... 1.69 0.67 1.67 0.45
-------------- ------- ------- -------
Total from investment operations...... 1.77 0.69 1.75 0.47
-------------- ------- ------- -------
Net asset value at end of period........ $ 12.46 $ 10.69 $ 12.41 $ 10.66
-------------- ------- ------- -------
-------------- ------- ------- -------
TOTAL RETURN:........................... 16.56%** 6.90%** 16.42%** 4.61%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $158,645 $94,806 $ 4,615 $ 2,560
Ratio to average net assets of:
Expenses, net of waiver from The Bank
of New York......................... 1.27%*** 1.26%*** 1.52%*** 1.52%***
Expenses, prior to waiver from The
Bank of New York.................... 1.33%*** 1.49%*** 1.65%*** 1.75%***
Net investment income, net of waiver
from The Bank of New York........... 1.50%*** 0.26%*** 1.21%*** 0.33%***
Portfolio turnover rate................. 28% 36% 28% 36%
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
49
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS--42.1%
COLLATERIZED MORTGAGE SECURITIES CORP.--0.9%
$ 626,000 Series 1990-7C, 9.25%, 10/20/20......... $ 635,244
-----------
FEDERAL HOME LOAN MORTGAGE CORP.--18.8%
192,159 Series 1292-F, 7.75%, 07/15/05.......... 193,777
227,786 Series 1338-G, 6.75%, 01/15/06.......... 228,215
275,000 Series 1176-H, 8.00%, 12/15/06.......... 293,054
500,000 Series 1338-J, 7.00%, 02/15/07.......... 509,698
183,321 Series 1663-D, 7.00%, 08/15/11.......... 183,532
2,260,000 Series 1371-PI, 6.00%, 04/15/21......... 2,219,571
1,662,000 Series 1407-PK, 7.00%, 08/15/21......... 1,702,437
2,100,000 Series 1494-PJ, 6.85%, 01/15/22......... 2,159,662
375,000 Series 1588-TC, 6.50%, 09/15/23......... 376,778
1,215,000 Series 20-H, 5.50%, 10/25/23 (a)........ 1,102,418
1,888,000 Series 1608-O, 6.50%, 11/15/23.......... 1,875,328
1,078,000 Series 1621-M, 6.50%, 11/15/23.......... 1,086,624
228,000 Series 1633-C, 6.50%, 12/15/23.......... 227,958
1,331,000 Series 1669-L, 6.50%, 02/15/24.......... 1,340,237
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
$ 498,000 Series 1672-N, 7.00%, 02/15/24.......... $ 513,621
-----------
14,012,910
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--22.4%
310,336 Series 1993-47A, 6.65%, 03/25/05........ 310,125
328,925 Series 1992-108G, 7.00%, 08/25/05....... 329,279
1,067,478 Series 1988-15A, 9.00%, 06/25/18........ 1,126,325
99,752 Series 1990-31H, 7.00%, 06/25/19........ 100,130
552,074 Series 1991-137G, 8.30%, 06/25/20....... 550,992
100,000 Series 1992-129J, 4.00%, 07/25/20....... 92,019
1,040,000 Series 1992-214PK, 7.00%, 09/25/20...... 1,061,147
2,665,233 Series G92-15Z, 7.00%, 01/25/22......... 2,738,456
285,000 Series G93-34PH, 6.35%, 02/25/22........ 283,346
800,000 Series 1993-96PJ, 7.00%, 08/25/22....... 830,155
665,818 Series 1992-172M, 7.00%, 09/25/22....... 689,610
630,553 Series 1993-141Z, 7.00%, 08/25/23....... 668,918
1,826,000 Series 1993-149M, 7.00%, 08/25/23....... 1,909,315
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
50
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
COLLATERALIZED MORTGAGE OBLIGATIONS (CONTINUED)
<C> <S> <C>
$ 945,000 Series 1993-252N, 6.50%, 08/25/23....... $ 958,093
2,574,000 Series 1993-178PK, 6.50%, 09/25/23...... 2,569,238
1,324,000 Series 1993-203B, 6.50%, 10/25/23....... 1,328,343
762,000 Series 1993-203PL, 6.50%, 10/25/23...... 773,393
402,000 Series X225C-UB, 6.50%, 12/25/23........ 407,524
-----------
16,726,408
-----------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $30,257,054)...................... 31,374,562
-----------
</TABLE>
<TABLE>
<C> <S> <C>
UNITED STATES GOVERNMENT AGENCIES &
OBLIGATIONS--39.7%
FEDERAL HOME LOAN BANK--0.9%
550,000 9.00%, 03/15/06......................... 661,314
-----------
FEDERAL HOME LOAN MORTGAGE
CORP.--1.3%
1,000,000 5.55%, 09/07/00......................... 992,797
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--3.0%
500,000 5.35%, 08/12/98......................... 499,778
750,000 6.41%, 05/22/00......................... 760,264
875,000 6.20%, 07/10/03......................... 869,385
100,000 6.40%, 09/27/05......................... 104,167
-----------
2,233,594
-----------
TENNESSEE VALLEY AUTHORITY--10.6%
1,500,000 6.25%, 08/01/99......................... 1,503,493
1,350,000 6.00%, 11/01/00......................... 1,360,299
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
UNITED STATES GOVERNMENT AGENCIES & OBLIGATIONS
(CONTINUED)
$5,000,000 6.13%, 07/15/03......................... $ 5,015,715
-----------
7,879,507
-----------
UNITED STATES TREASURY--STRIPPED PRINCIPAL--1.2%
1,000,000 0.00%, 02/15/01......................... 866,620
-----------
UNITED STATES TREASURY NOTES--22.7%
4,200,000 6.75%, 04/30/00......................... 4,287,940
4,400,000 5.75%, 08/15/03......................... 4,446,750
3,250,000 5.88%, 11/15/05......................... 3,312,969
3,500,000 6.88%, 05/15/06......................... 3,790,938
1,000,000 6.63%, 05/15/07......................... 1,075,001
-----------
16,913,598
-----------
TOTAL UNITED STATES GOVERNMENT AGENCIES
& OBLIGATIONS
(Cost $29,402,507)...................... 29,547,430
-----------
</TABLE>
<TABLE>
<C> <S> <C>
MORTGAGE-BACKED SECURITIES-- 16.0%
FEDERAL HOME LOAN MORTGAGE CORP.-- 8.4%
98,404 Pool #218711, 8.00%, 10/01/02........... 100,213
253,944 Pool #251836, 8.50%, 05/01/04........... 260,301
364,263 Pool #182217, 8.00%, 12/01/04........... 373,453
76,785 Pool #502185, 8.50%, 07/01/05........... 79,351
123,292 Pool #184275, 8.25%, 09/01/08........... 128,505
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
51
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<C> <S> <C>
$ 21,383 Pool #160062, 9.50%, 10/01/08........... $ 22,591
25,760 Pool #160065, 9.50%, 11/01/08........... 27,216
25,538 Pool #160066, 9.75%, 11/01/08........... 27,248
385,639 Pool #185743, 8.50%, 12/01/08........... 396,777
472,725 Pool #251974, 8.50%, 04/01/09........... 492,740
379,612 Pool #185964, 8.50%, 02/01/10........... 394,637
433,162 Gold Pool #E20201, 7.50%, 10/01/10...... 445,498
1,946,098 Gold Pool #G10439, 6.50%, 01/01/11...... 1,960,694
417,796 Gold Pool #E00417, 7.00%, 02/01/11...... 425,409
284,435 Pool #555045, 8.00%, 05/01/19........... 292,362
786,160 Gold Pool #A01217, 8.50%, 04/01/20...... 832,205
-----------
6,259,200
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--4.2%
89,797 Pool #34510, 7.25%, 08/01/01............ 89,825
111,162 Pool #168430, 7.00%, 07/01/03........... 111,700
804,818 Pool #195152, 7.00%, 01/01/08........... 819,627
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
MORTGAGE-BACKED SECURITIES (CONTINUED)
$ 335,711 Pool #81860, 8.00%, 04/01/09............ $ 348,719
546,032 Pool #278437, 7.50%, 05/01/09........... 561,108
238,354 Pool #6222, 9.00%, 04/01/16............. 255,964
563,095 Pool #124118, 9.00%, 03/01/22........... 601,740
337,343 Pool #320514, 6.50%, 09/01/25........... 336,948
-----------
3,125,631
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--3.4%
42,742 Pool #6400, 8.00%,
06/15/05................................ 44,278
57,600 Pool #7774, 8.00%,
09/15/05................................ 59,670
58,601 Pool #7038, 8.00%,
10/15/05................................ 60,707
60,749 Pool #11310, 8.00%, 11/15/05............ 62,932
9,289 Pool #9839, 8.00%, 07/15/06............. 9,623
36,903 Pool #10459, 8.00%, 08/15/06............ 38,229
104,597 Pool #10419, 8.00%, 09/15/06............ 108,356
59,727 Pool #12590, 8.00%, 09/15/06............ 61,873
104,217 Pool #14295, 8.00%, 01/15/07............ 107,963
104,648 Pool #204365, 9.00%, 03/15/17........... 113,076
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
52
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- -----------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<C> <S> <C>
$ 318,488 Pool #247223, 9.00%, 04/15/18........... $ 343,834
50,357 Pool #177793, 9.50%, 05/15/19........... 54,679
13,231 Pool #256032, 8.50%, 10/15/19........... 14,064
6,835 Pool #284645, 8.50%, 02/15/20........... 7,254
103,375 Pool #290778, 9.50%, 05/15/20........... 112,152
27,195 Pool #319650, 7.00%, 11/15/22........... 27,725
56,983 Pool #350532, 6.50%, 06/15/23........... 57,086
189,568 Pool #359470, 7.00%, 01/15/24........... 193,067
277,483 Pool #376445, 6.50%, 04/15/24........... 277,802
191,054 Pool #386348, 7.50%, 06/15/24........... 196,485
549,068 Pool #407323, 8.25%, 04/15/25........... 573,776
-----------
2,524,631
-----------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $11,796,764)...................... 11,909,462
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- MONEY MARKET FUND--3.0% -----------
<C> <S> <C>
$2,264,300 ACM Institutional Reserves (Government
Portfolio), 5.40% (b) (Cost
$2,264,300)............................. $ 2,264,300
-----------
</TABLE>
<TABLE>
<C> <S> <C>
TOTAL INVESTMENTS
(Cost $73,720,625) (c)--100.8%.......... 75,095,754
Other assets less
liabilities--(0.8)%..................... (569,201)
-----------
NET ASSETS--100.0%...................... $74,526,553
-----------
-----------
</TABLE>
(a) CO-ISSUED WITH GOVERNMENT NATIONAL MORTGAGE ASSOCIATION.
(b) REPRESENTS ANNUALIZED YIELD AT JUNE 30, 1998.
(c) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES. AT JUNE 30, 1998, NET REALIZED APPRECIATION WAS $1,375,129 BASED
ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED OF AGGREGATE GROSS
UNREALIZED APPRECIATION OF $1,535,531 AND AGGREGATE GROSS UNREALIZED
DEPRECIATION OF $160,402.
SEE NOTES TO FINANCIAL STATEMENTS.
53
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment at market value,
(Identified cost $73,720,625)........................... $75,095,754
Cash...................................................... 334
Receivables:
Interest................................................ 744,939
Investments sold........................................ 581,350
Other assets.............................................. 1,825
-----------
TOTAL ASSETS.......................................... 76,424,202
-----------
LIABILITIES:
Payables:
Investments purchased................................... 1,702,838
Dividends............................................... 102,800
Services provided by the Bank of New York and
Administrator......................................... 54,062
Capital stock repurchased............................... 13,000
Accrued expenses and other liabilities.................... 24,949
-----------
TOTAL LIABILITIES..................................... 1,897,649
-----------
NET ASSETS:................................................. $74,526,553
-----------
-----------
SOURCES OF NET ASSETS:
Capital stock @ par....................................... $ 7,489
Capital surplus........................................... 75,939,701
Distributions in excess of net investment income.......... (83,033)
Accumulated net realized loss on investments.............. (2,712,733)
Net unrealized appreciation on investments................ 1,375,129
-----------
$74,526,553
-----------
-----------
INSTITUTIONAL SHARES:
Net assets................................................ $62,076,439
-----------
-----------
Shares outstanding........................................ 6,237,352
-----------
-----------
Net asset value, offering price and repurchase price per
share................................................... $ 9.95
-----------
-----------
INVESTOR SHARES:
Net assets................................................ $12,450,114
-----------
-----------
Shares outstanding........................................ 1,251,578
-----------
-----------
Net asset value, offering price and repurchase price per
share................................................... $ 9.95
-----------
-----------
Institutional Shares authorized @ $.001 par value........... 200,000,000
Investor Shares authorized @ $.001 par value................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................. $2,452,433
----------
EXPENSES:
Advisory.................................................. 184,403
Administration............................................ 73,761
12b-1 fee--Investor Shares................................ 13,600
Accounting services....................................... 29,746
Transfer agent............................................ 21,849
Custodian................................................. 14,691
Registration and filings.................................. 13,968
Directors................................................. 3,844
Reports to shareholders................................... 3,447
Audit..................................................... 1,395
Insurance................................................. 1,355
Cash management........................................... 1,019
Legal..................................................... 693
Other..................................................... 9,299
----------
TOTAL EXPENSES.......................................... 373,070
Fees waived by The Bank of New York (Note 3).............. (26,906)
Earnings credit adjustment (Note 3)....................... (420)
----------
NET EXPENSES............................................ 345,744
----------
NET INVESTMENT INCOME................................... 2,106,689
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments.......................... 165,998
Increase in unrealized appreciation on investments during
the period.............................................. 392,300
----------
Net realized and unrealized gain on investments........... 558,298
----------
Net increase in net assets resulting from operations...... $2,664,987
----------
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
54
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 2,106,689 $ 3,871,834
Net realized gain (loss) on investments............................. 165,998 (473,862)
Increase in unrealized appreciation on investments during the
period............................................................ 392,300 1,756,995
------------------ -------------------
Net increase in net assets resulting from operations.............. 2,664,987 5,154,967
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares.......... (1,807,618) (2,572,247)
Investor Shares............... (299,071) (1,299,587)
------------------ -------------------
(2,106,689) (3,871,834)
------------------ -------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1)..... 10,700,445 68,354,492
Investor Shares........................ 2,803,132 6,365,101
Proceeds from shares issued on reinvestment of dividends:
Institutional Shares................... 1,096,113 1,858,663
Investor Shares........................ 209,398 723,282
Cost of capital stock repurchased: Institutional Shares............. (14,322,070) (8,174,171)
Investor Shares (Note 1).............. (1,104,837) (59,940,998)
------------------ -------------------
Net increase (decrease) in net assets resulting from capital stock
transactions.................................................... (617,819) 9,186,369
------------------ -------------------
INCREASE (DECREASE) IN NET ASSETS............................... (59,521) 10,469,502
NET ASSETS:
Beginning of period................................................. 74,586,074 64,116,572
------------------ -------------------
End of period....................................................... $ 74,526,553 $ 74,586,074
------------------ -------------------
------------------ -------------------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1).......................... 1,077,694 7,141,742
Investor Shares.......................................... 282,387 657,553
Shares issued on reinvestment of dividends: Institutional Shares.... 110,607 191,010
Investor Shares.............. 21,147 75,288
Shares repurchased: Institutional Shares............................ (1,444,028) (839,673)
Investor Shares (Note 1)........................... (111,417) (6,283,195)
------------------ -------------------
Net increase (decrease)........................................... (63,610) 942,725
Shares outstanding, beginning of period............................. 7,552,540 6,609,815
------------------ -------------------
Shares outstanding, end of period................................... 7,488,930 7,552,540
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
55
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
-----------------------------------
SIX MONTHS FOR THE PERIOD
ENDED APRIL 1, 1997*
JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997
-------------- ------------------
<S> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 9.88 $ 9.53
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.28 0.42
Net realized and unrealized gain on
investments........................... 0.07 0.35
------- -------
Total from investment operations...... 0.35 0.77
------- -------
DIVIDENDS
Dividends from net investment income.... (0.28) (0.42)
------- -------
Net asset value at end of period........ $ 9.95 $ 9.88
------- -------
------- -------
TOTAL RETURN:........................... 3.61%** 8.27%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $62,077 $64,128
Ratio to average net assets of:
Expenses, net of waiver from The Bank
of New York......................... 0.90%*** 0.90%***
Expenses, prior to waiver from The
Bank of New York.................... 0.97%*** 0.99%***
Net investment income, net of waiver
from The Bank of New York........... 5.74%*** 5.79%***
Portfolio turnover rate................. 38% 41%
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
56
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTOR SHARES
--------------------------------------------------------------------------
SIX
MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
1998 -------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of period.. $ 9.87 $ 9.70 $ 9.94 $ 9.10 $ 10.12 $ 9.87
--------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.27 0.54 0.54 0.53 0.50 0.51
Net realized and unrealized gain (loss)
on investments........................ 0.08 0.17 (0.24) 0.84 (1.02) 0.27
--------- --------- --------- --------- --------- ---------
Total from investment operations...... 0.35 0.71 0.30 1.37 (0.62) 0.78
--------- --------- --------- --------- --------- ---------
DIVIDENDS AND DISTRIBUTION
Dividends from net investment income.... (0.27) (0.54) (0.54) (0.53) (0.50) (0.51)
Distribution from capital gains......... -- -- -- -- -- (0.02)
--------- --------- --------- --------- --------- ---------
Total dividends and distribution...... (0.27) (0.54) (0.54) (0.53) (0.50) (0.53)
--------- --------- --------- --------- --------- ---------
Net asset value at end of period........ $ 9.95 $ 9.87 $ 9.70 $ 9.94 $ 9.10 $ 10.12
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN:+.......................... 3.59%* 7.54% 3.16% 15.40% (5.17)% 8.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $ 12,450 $ 10,458 $ 64,117 $ 60,659 $ 59,328 $ 72,069
Ratio to average net assets of:
Expenses, net of waiver from The Bank
of New York......................... 1.15%** 1.08% 1.02% 1.06% 1.07% 0.86%
Expenses, prior to waiver from The
Bank of New York.................... 1.26%** 1.11% 1.02% 1.06% 1.10% 1.15%
Net investment income, net of waiver
from The Bank of New York........... 5.50%** 5.57% 5.54% 5.52% 5.30% 5.04%
Portfolio turnover rate................. 38% 41% 57% 48% 49% 67%
</TABLE>
* NOT ANNUALIZED.
** ANNUALIZED.
+ TOTAL RETURN DOES NOT CONSIDER THE EFFECT OF THE SALES LOAD FOR THOSE
PERIODS IN WHICH THE SALES LOAD WAS IN EFFECT.
SEE NOTES TO FINANCIAL STATEMENTS.
57
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- ------------
<C> <S> <C>
CORPORATE BONDS--58.5%
AEROSPACE & DEFENSE--3.8%
$ 5,000,000 Lockheed Martin, 6.55%, 05/15/99........ $ 5,015,155
3,600,000 Lockheed Martin, 7.25%, 05/15/06........ 3,822,415
5,500,000 Raytheon Co., 6.30%, 03/15/05........... 5,554,357
------------
14,391,927
------------
BANKING--2.4%
1,000,000 First Union Corp., 7.00%, 03/15/06...... 1,046,650
6,400,000 Interamerican Development Bank, 8.50%,
03/15/11................................ 7,908,512
------------
8,955,162
------------
CONGLOMERATES--2.5%
9,075,000 Tenneco, Inc., 6.70%, 12/15/05.......... 9,354,247
------------
ENTERTAINMENT--6.5%
2,500,000 PRIMEDIA Inc., Series B, 8.50%,
02/01/06................................ 2,543,750
7,250,000 Time Warner, Inc., PATS, 6.10%, 12/30/01
(a)..................................... 7,234,202
5,500,000 Time Warner, Inc., 7.75%, 06/15/05...... 5,897,903
5,700,000 Viacom, Inc., 7.75%, 06/01/05........... 6,097,883
2,500,000 Viacom, Inc., 8.00%, 07/07/06........... 2,575,000
------------
24,348,738
------------
FINANCIAL SERVICES--28.4%
7,850,000 Aetna Services, Inc., 6.97%, 08/15/36... 8,116,578
3,200,000 Ameritech Capital Funding Corp., 6.30%,
10/15/04................................ 3,246,522
8,945,000 Associates Corp. N.A., 6.88%,
08/01/03................................ 9,254,282
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- ------------
<C> <S> <C>
CORPORATE BONDS (CONTINUED)
$ 1,575,000 Beneficial Corp., 12.88%, 08/01/13...... $ 1,662,705
5,000,000 Block Financial Corp., 6.75%,
11/01/04................................ 5,129,915
7,880,000 Chrysler Financial Corp., 6.03%,
03/12/01................................ 7,888,676
4,750,000 Ford Motor Credit Corp., 7.00%,
09/25/01................................ 4,875,528
3,750,000 General Electric Capital Corp., 7.88%,
12/01/06................................ 4,211,464
2,250,000 General Motors Acceptance Corp., 6.05%,
10/04/99................................ 2,249,255
6,000,000 General Motors Acceptance Corp., 6.70%,
04/18/01................................ 6,096,198
5,000,000 General Motors Acceptance Corp., 8.25%,
02/28/02................................ 5,346,140
665,000 General Motors Acceptance Corp., 8.25%,
02/24/04................................ 730,066
10,000,000 Goldman Sachs Group, L.P., 6.75%,
02/15/06 (a)............................ 10,261,760
6,800,000 Lehman Brothers Holdings, Inc., 7.38%,
05/15/04................................ 7,152,043
8,665,000 Lehman Brothers Holdings, Inc., 7.38%,
05/15/07................................ 9,204,474
4,150,000 Merrill Lynch & Co. Inc., 6.07%,
10/15/01................................ 4,158,943
1,500,000 Merrill Lynch & Co. Inc., 8.30%,
11/01/02................................ 1,629,239
4,775,000 Morgan Stanley Dean Witter & Co., 6.70%,
05/01/01................................ 4,859,016
500,000 Salomon, Inc., 6.00%, 12/15/98.......... 500,509
950,000 Salomon, Inc., 7.00%, 06/15/03.......... 983,393
500,000 Salomon, Inc., 6.88%, 12/15/03.......... 515,809
4,850,000 Salomon Smith Barney, 6.25%, 01/15/05... 4,845,111
3,000,000 Sears Roebuck Acceptance Corp., 6.95%,
05/15/02................................ 3,092,775
------------
106,010,401
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
58
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- ------------
CORPORATE BONDS (CONTINUED)
<C> <S> <C>
FOOD PROCESSING--3.4%
$ 7,500,000 Nabisco, Inc., 6.85%, 06/15/05.......... $ 7,643,550
5,000,000 Nabisco, Inc., 6.13%, 02/01/33.......... 4,955,690
------------
12,599,240
------------
HOTELS & GAMING--1.2%
4,500,000 Hilton Hotels Corp., 7.38%, 06/01/02.... 4,568,427
------------
INDUSTRIAL & COMMERCIAL
SERVICES--0.8%
3,000,000 WMX Technologies, Inc., 7.70%,
10/01/02................................ 3,141,246
------------
OIL & GAS--1.4%
5,000,000 Global Marine, Inc., 7.13%, 09/01/07.... 5,232,850
------------
RESTAURANTS--0.8%
3,000,000 Tricon Global Restaurants, Inc., 7.45%,
05/15/05................................ 3,027,354
------------
RETAIL--DEPARTMENT STORES--2.3%
3,000,000 Penney (J.C.) & Co., Inc., 7.25%,
04/01/02................................ 3,115,335
5,230,000 Sears Roebuck Co., Series 3, 6.92%,
06/17/04................................ 5,400,676
------------
8,516,011
------------
TELECOMMUNICATIONS--4.2%
3,500,000 Comcast Cellular Holdings, 9.50%,
05/01/07................................ 3,648,750
5,000,000 GTE Corp., 7.51%, 04/01/09.............. 5,450,460
5,000,000 Tele-Communications, Inc., 6.58%,
02/15/05 (b)............................ 5,449,410
1,000,000 US West Communications, 6.63%,
09/15/05................................ 1,033,296
------------
15,581,916
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- ------------
<C> <S> <C>
CORPORATE BONDS (CONTINUED)
UTILITIES--ELECTRIC--0.8%
$ 3,000,000 Niagara Mohawk Power Corp., 7.13%,
07/01/01................................ $ 3,011,250
------------
TOTAL CORPORATE BONDS
(Cost $213,981,668)..................... 218,738,769
------------
</TABLE>
<TABLE>
<C> <S> <C>
UNITED STATES GOVERNMENT AGENCIES & OBLIGATIONS--29.3%
FEDERAL HOME LOAN BANK--1.5%
5,500,000 5.50%, 04/14/00......................... 5,483,990
--------------
FEDERAL HOME LOAN MORTGAGE
CORP.--1.1%
1,025,000 5.23%, 02/22/99......................... 1,021,829
2,700,000 7.93%, 01/20/05......................... 3,023,657
--------------
4,045,486
--------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--8.8%
3,000,000 6.20%, 06/26/00......................... 3,032,073
2,440,000 0.00%, 08/15/01......................... 2,045,942
4,385,000 6.20%, 07/10/03......................... 4,356,862
3,000,000 6.85%, 04/05/04......................... 3,162,549
9,700,000 7.38%, 03/28/05......................... 10,599,908
5,000,000 5.94%, 12/12/05......................... 5,073,695
3,725,000 5.88%, 02/02/06......................... 3,766,545
1,000,000 6.06%, 02/03/06......................... 1,006,140
--------------
33,043,714
--------------
TENNESSEE VALLEY AUTHORITY--0.1%
275,000 6.00%, 11/01/00......................... 277,098
--------------
UNITED STATES TREASURY NOTES--17.8%
4,800,000 5.75%, 08/15/03......................... 4,851,000
9,725,000 7.50%, 02/15/05......................... 10,767,403
5,400,000 5.88%, 11/15/05......................... 5,504,625
15,400,000 7.00%, 07/15/06......................... 16,824,500
26,975,000 6.50%, 10/15/06......................... 28,652,521
--------------
66,600,049
--------------
TOTAL UNITED STATES GOVERNMENT AGENCIES
& OBLIGATIONS
(Cost $106,528,478)..................... 109,450,337
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
59
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- COLLATERALIZED MORTGAGE OBLIGATIONS--5.6% ------------
<C> <S> <C>
FEDERAL HOME LOAN MORTGAGE
CORP.--2.4%
$ 1,850,000 Series 1531E, 6.00%, 01/15/06........... $ 1,850,962
1,000,000 Series 1678CA, 6.00%, 02/15/09.......... 975,070
5,167,426 Series 1607ZB, 5.50%, 12/15/10.......... 5,120,080
992,790 Series 1627PJ, 6.00%, 03/15/23.......... 972,825
------------
8,918,937
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--1.9%
539,298 Series 1993-88B, 5.40%, 06/25/00........ 536,553
1,200,207 Series 1993-212C, 6.00%, 11/25/00....... 1,195,946
5,300,000 Series 1993-96PJ, 7.00%, 08/25/22....... 5,499,775
------------
7,232,274
------------
FIXED RATE SECURITIES--1.3%
4,865,259 Kidder Peabody Mortgage Assets Trust,
Series 22, Class D, 9.95%, 02/01/19..... 4,870,876
------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $20,864,411)...................... 21,022,087
------------
</TABLE>
<TABLE>
<C> <S> <C>
MORTGAGE-BACKED
SECURITIES--3.0%
FEDERAL HOME LOAN MORTGAGE
CORP.--0.4%
138,219 Pool #180686,
6.00%, 08/01/03......................... 136,768
203,196 Pool #160074,
10.00%, 04/01/09........................ 218,633
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- ------------
MORTGAGE-BACKED
SECURITIES (CONTINUED)
$ 979,007 Pool #180006,
9.25%, 08/01/11......................... $ 1,037,904
------------
1,393,305
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--0.2%
733,169 Pool #219238, 8.50%, 02/01/09........... 775,648
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--2.4%
127,272 Pool #13416, 8.00%, 09/15/06............ 131,846
63,423 Pool #13688, 8.00%, 11/15/06............ 65,703
114,568 Pool #12766, 8.00%, 12/15/06............ 118,685
93,297 Pool #16080, 7.50%, 04/15/07............ 95,834
1,037,440 Pool #21598, 8.00%, 02/15/08............ 1,074,726
229,077 Pool #27246, 9.00%, 12/15/08............ 245,112
100,182 Pool #31570, 9.50%, 06/15/09............ 108,165
112,706 Pool #34366, 9.50%, 09/15/09............ 121,687
68,725 Pool #33765, 9.50%, 10/15/09............ 74,201
104,851 Pool #34704, 9.50%, 10/15/09............ 114,203
677,168 Pool #171774, 9.00%, 09/15/16........... 724,570
290,204 Pool #199885, 9.50%, 11/15/17........... 313,330
112,462 Pool #251646, 9.50%, 04/15/18........... 121,424
77,018 Pool #290313, 9.50%, 05/15/20........... 83,155
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
60
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- ------------
<C> <S> <C>
MORTGAGE-BACKED
SECURITIES (CONTINUED)
$ 1,184,350 Pool #319650, 7.00%, 11/15/22........... $ 1,207,445
1,664,128 Pool #349306, 8.00%, 02/15/23........... 1,730,493
1,530,361 Pool #362262, 7.50%, 04/15/24........... 1,571,971
450,844 Pool #376445, 6.50%, 04/15/24........... 451,363
691,660 Pool #384069, 7.50%, 04/15/24........... 710,466
------------
9,064,379
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $10,895,272)...................... 11,233,332
------------
</TABLE>
<TABLE>
<C> <S> <C>
MUNICIPAL BONDS--1.3%
REVENUE--1.3%
4,750,000 New York State Dormitory Authority,
6.23%, 10/01/98 (Cost $4,750,000)....... 4,754,270
------------
</TABLE>
<TABLE>
<C> <S> <C>
ASSET-BACKED
SECURITIES--0.9%
ASSET BACKED SECURITIES--
CREDIT CARDS--0.9%
2,600,000 Discover Card Master Trust I, Series
1996-3, Class A, 6.05%, 08/18/08........ 2,617,316
576,745 Ford Credit Grantor Trust, 5.90%,
10/15/00................................ 577,206
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $3,057,414)....................... 3,194,522
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ----------- MONEY MARKET FUND--0.0% ------------
<C> <S> <C>
$ 125,500 ACM Institutional Reserves (Prime
Portfolio), 5.49% (c) (Cost $125,500)... $ 125,500
------------
</TABLE>
<TABLE>
<C> <S> <C>
TOTAL INVESTMENTS
(Cost $360,202,743) (d)-- 98.6%......... 368,518,817
Other assets less
liabilities--1.4 %...................... 5,187,094
------------
NET ASSETS--100.0 %..................... $373,705,911
------------
------------
</TABLE>
PATS PASS-THRU ASSET TRUST SECURITY.
(a) ILLIQUID SECURITY, EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE
SECURITIES ACT OF 1933.
(b) INTEREST RATE SCHEDULED TO INCREASE TO 8.35% ON FEBRUARY 14, 1999.
(c) REPRESENTS ANNUALIZED YIELD AT JUNE 30, 1998.
(d) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES. AT JUNE 30, 1998, NET UNREALIZED APPRECIATION WAS $8,316,074
BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED OF AGGREGATE
GROSS UNREALIZED APPRECIATION OF $9,168,849 AND AGGREGATE GROSS UNREALIZED
DEPRECIATION OF $852,775.
SEE NOTES TO FINANCIAL STATEMENTS.
61
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment at market value,
(Identified cost $360,202,743).......................... $368,518,817
Cash...................................................... 372
Receivables:
Interest................................................ 5,823,950
Investments sold........................................ 2,871,557
Capital stock sold...................................... 180,807
Deferred organization costs and other assets.............. 132,712
------------
TOTAL ASSETS.......................................... 377,528,215
------------
LIABILITIES:
Payables:
Investments purchased................................... 2,990,820
Dividends............................................... 532,744
Services provided by the Bank of New York and
Administrator......................................... 239,827
Capital stock repurchased............................... 5,910
Accrued expenses and other liabilities.................... 53,003
------------
TOTAL LIABILITIES..................................... 3,822,304
------------
NET ASSETS:................................................. $373,705,911
------------
------------
SOURCES OF NET ASSETS:
Capital stock @ par....................................... $ 35,494
Capital surplus........................................... 362,148,204
Accumulated net realized gain on investments.............. 3,206,139
Net unrealized appreciation on investments................ 8,316,074
------------
$373,705,911
------------
------------
INSTITUTIONAL SHARES:
Net assets................................................ $368,953,957
------------
------------
Shares outstanding........................................ 35,042,944
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 10.53
------------
------------
INVESTOR SHARES:
Net assets................................................ $ 4,751,954
------------
------------
Shares outstanding........................................ 451,027
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 10.54
------------
------------
Institutional Shares authorized @ $.001 par value........... 200,000,000
Investor Shares authorized @ $.001 par value................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................. $12,088,368
-----------
EXPENSES:
Advisory.................................................. 898,195
Administration............................................ 359,280
12b-1 fee--Investor Shares................................ 4,738
Registration and filings.................................. 53,831
Transfer agent............................................ 45,885
Accounting services....................................... 29,753
Custodian................................................. 24,296
Organization.............................................. 10,292
Reports to shareholders................................... 9,630
Audit..................................................... 8,191
Cash management........................................... 4,236
Directors................................................. 3,838
Legal..................................................... 3,626
Insurance................................................. 3,229
Other..................................................... 16,518
-----------
TOTAL EXPENSES.......................................... 1,475,538
Earnings credit adjustment (Note 3)....................... (829)
-----------
NET EXPENSES............................................ 1,474,709
-----------
NET INVESTMENT INCOME................................... 10,613,659
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments.......................... 2,853,448
Increase in unrealized appreciation on investments during
the period.............................................. 47,900
-----------
Net realized and unrealized gain on investments........... 2,901,348
-----------
Net increase in net assets resulting from operations...... $13,515,007
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
62
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
SIX MONTHS ENDED APRIL 1, 1997*
JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 10,613,659 $ 16,285,797
Net realized gain on investments.................................... 2,853,448 352,691
Increase in unrealized appreciation on investments during the
period............................................................ 47,900 14,714,273
------------------ -------------------
Net increase in net assets resulting from operations.............. 13,515,007 31,352,761
------------------ -------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares.......... (10,507,295) (16,143,287)
Investor Shares.................. (106,364) (33,324)
Distributions from capital gains: Institutional Shares.............. -0- (108,600)
Investor Shares......................... -0- (586)
------------------ -------------------
(10,613,659) (16,285,797)
------------------ -------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1)..... 32,001,355 414,224,302
Investor Shares........................ 3,205,175 2,271,045
Proceeds from shares issued on reinvestment
of dividends: Institutional Shares................................ 998,355 1,251,063
Investor Shares....................................... 99,964 33,546
Cost of capital stock repurchased: Institutional Shares............. (17,249,605) (80,173,329)
Investor Shares....................... (471,940) (452,332)
------------------ -------------------
Net increase in net assets resulting from capital stock
transactions.................................................... 18,583,304 337,154,295
------------------ -------------------
INCREASE IN NET ASSETS.......................................... 21,484,652 352,221,259
NET ASSETS:
Beginning of period................................................. 352,221,259 -0-
------------------ -------------------
End of period....................................................... $ 373,705,911 $ 352,221,259
------------------ -------------------
------------------ -------------------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1).......................... 3,049,957 41,249,130
Investor Shares.......................................... 305,466 221,371
Shares issued on reinvestment of dividends: Institutional Shares.... 95,157 121,197
Investor Shares.............. 9,526 3,224
Shares repurchased: Institutional Shares............................ (1,642,112) (7,830,385)
Investor Shares.................................... (44,906) (43,654)
------------------ -------------------
Net increase...................................................... 1,773,088 33,720,883
Shares outstanding, beginning of period............................. 33,720,883 -0-
------------------ -------------------
Shares outstanding, end of period................................... 35,493,971 33,720,883
------------------ -------------------
------------------ -------------------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
63
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
----------------------------------- -----------------------------------
SIX MONTHS FOR THE PERIOD SIX MONTHS FOR THE PERIOD
ENDED APRIL 1, 1997* ENDED MAY 1, 1997*
JUNE 30, 1998 THROUGH JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997 (UNAUDITED) DECEMBER 31, 1997
-------------- ------------------ -------------- ------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 10.45 $ 10.00 $10.45 $10.08
-------------- -------- ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.31 0.47 0.29 0.40
Net realized and unrealized gain on
investments........................... 0.08 0.45 0.09 0.37
-------------- -------- ------ ------
Total from investment operations...... 0.39 0.92 0.38 0.77
-------------- -------- ------ ------
DIVIDENDS
Dividends from net investment
income................................ (0.31) (0.47) (0.29) (0.40)
-------------- -------- ------ ------
Net asset value at end of period........ $ 10.53 $ 10.45 $10.54 $10.45
-------------- -------- ------ ------
-------------- -------- ------ ------
TOTAL RETURN:........................... 3.76%** 9.34%** 3.70%** 7.76%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $368,954 $350,330 $4,752 $1,891
Ratio to average net assets of:
Expenses.............................. 0.82%*** 0.80%*** 1.11%*** 1.06%***
Net investment income................. 5.91%*** 6.14%*** 5.61%*** 5.74%***
Portfolio turnover rate................. 38% 81% 38% 81%
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
64
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- --------- ------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS--96.8%
EDUCATION--9.9%
$ 500,000 New York State Dormitory Authority,
(University of Rochester)............... A1/A+ 4.700% 07/01/00 $ 507,250
250,000 New York State Dormitory Authority,
Columbia University..................... Aaa/AAA 5.000 07/01/00 255,395
500,000 New York State Dormitory Authority,
Columbia University..................... Aaa/AAA 5.500 07/01/09 543,920
1,700,000 New York State Dormitory Authority, New
York University, MBIA Insured+.......... Aaa/AAA 5.500 07/01/04 1,810,619
1,000,000 New York State Dormitory Authority,
Strong Memorial Hospital (University of
Rochester).............................. A1/A+ 5.000 07/01/02 1,031,800
------------
4,148,984
------------
GENERAL OBLIGATIONS--10.6%
500,000 Monroe County, New York, MBIA
Insured+................................ Aaa/AAA 4.800 06/01/02 512,900
60,000 Monroe County, New York, Series B,
Unrefunded Balance, Callable 12/01/98 @
102..................................... Aa2/AA 7.000 06/01/03 61,999
500,000 New York State Municipal Bond Bank
Agency (City of Rochester).............. NR/A+ 6.400 03/15/01 528,815
500,000 New York State, General Obligation...... A2/A 4.600 03/15/01 506,960
1,000,000 New York State, General Obligation...... A2/A 5.125 06/15/04 1,042,410
1,000,000 Orange County New York, General
Obligation.............................. Aa2/NR 5.000 09/01/13 1,005,890
300,000 Sands Point New York, General
Obligation.............................. Aa2/NR 3.950 07/15/01 299,826
500,000 Sands Point New York, General
Obligation.............................. Aa2/NR 4.700 07/15/11 498,735
------------
4,457,535
------------
HEALTHCARE--2.4%
470,000 New York State Dormitory Authority,
Nursing Home Our Lady of Consolation.... NR/AA 5.200 08/01/05 490,624
500,000 New York State Medical Care
Facilities--Downstate Medical Center.... NR/AAA 5.700 02/15/04 534,360
------------
1,024,984
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
65
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- --------- ------------
MUNICIPAL BONDS (CONTINUED)
<C> <S> <C> <C> <C> <C>
HOUSING--2.5%
$ 500,000 New York State Mortgage
Revenue--Homeowner Mtg Series 37-A...... Aa2/NR 5.850% 04/01/06 $ 521,835
500,000 New York State Mortgage
Revenue--Homeowner Mtg Series 39........ Aa2/NR 5.300 04/01/04 518,910
------------
1,040,745
------------
INDUSTRIAL DEVELOPMENT BONDS--6.1%
500,000 Hempstead Town--New York Industrial
Development Agency...................... Aaa/AAA 4.875 12/01/06 514,770
1,000,000 Hempstead Town--New York Industrial
Development Agency...................... Aaa/AAA 5.000 12/01/07 1,035,680
1,000,000 Westchester County Industrial
Development Agency Series A............. Aaa/AAA 4.850 07/01/00 1,017,170
------------
2,567,620
------------
PREFUNDED/ESCROW/US GUARANTEED--3.0%
890,000 New York Housing Finance Agency, ETM
State University Construction........... Aaa/AAA 6.500 11/01/06 963,069
277,000 Puerto Rico Aqueduct & Sewer Authority,
ETM..................................... Aaa/AAA 4.500 07/01/02 278,726
------------
1,241,795
------------
SPECIAL TAX--20.6%
1,000,000 MTA Dedicated Tax, MBIA Insured+........ Aaa/AAA 6.000 04/01/05 1,095,570
1,000,000 Municipal Assistance Corp. for New York
City.................................... Aa2/AA 4.800 07/01/03 1,026,370
2,000,000 Municipal Assistance Corp. for New York
City Series E........................... Aa2/AA 6.000 07/01/05 2,196,120
500,000 New York State Local Government
Assistance Corp. ....................... A3/A+ 4.800 04/01/05 512,130
655,000 New York State Local Government
Assistance Corp. ....................... A3/A+ 5.000 04/01/02 674,584
1,000,000 New York State Local Government
Assistance Corp. ....................... A3/A+ 5.300 04/01/00 1,022,750
340,000 New York State Local Government
Assistance Corp. ....................... A3/A+ 6.750 04/01/02 367,520
1,225,000 New York, New York City Transitional
Finance Authority Revenue Series A...... Aa3/AA 5.000 08/15/05 1,270,999
500,000 New York, New York City Transitional
Finance Authority Revenue Series C...... Aa3/AA 4.000 05/01/02 497,870
------------
8,663,913
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
66
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- --------- ------------
MUNICIPAL BONDS (CONTINUED)
<C> <S> <C> <C> <C> <C>
STATE APPROPRIATION--15.0%
$1,000,000 Metropolitan Transportation Authority
Service Contract Revenue................ Baa1/BBB+ 5.750% 07/01/07 $ 1,074,080
520,000 New York State Dormitory Authority,
Albany County........................... Baa1/BBB+ 5.000 04/01/02 531,913
250,000 New York State Dormitory Authority,
Albany County........................... Baa1/BBB+ 5.500 04/01/08 255,012
300,000 New York State Dormitory Authority,
State University........................ A3/A- 5.200 05/15/03 311,880
650,000 New York State Dormitory Authority,
Upstate Community Colleges.............. Baa1/BBB+ 5.600 07/01/07 690,092
505,000 New York State Medical Care
Facilities--Mental Health............... A3/A- 4.700 08/15/01 512,893
480,000 New York State Medical Care
Facilities--Mental Health............... A3/A- 6.100 08/15/02 513,062
500,000 New York State Thruway Authority Service
Contract Highway & Bridge Trust Fund.... Baa1/BBB+ 5.750 04/01/08 531,070
1,000,000 New York State Urban Development
Corp. .................................. Baa1/BBB+ 5.900 01/01/07 1,069,890
750,000 New York State Urban Development
Corp. .................................. Baa1/BBB+ 6.000 01/01/07 814,410
------------
6,304,302
------------
TRANSPORTATION--12.5%
1,250,000 New York State Thruway Authority General
Revenue................................. Aa3/AA- 5.250 01/01/01 1,285,963
750,000 New York State Thruway Authority Service
Contract Revenue........................ Baa1/BBB+ 5.625 04/01/07 797,595
650,000 Port Authority New York & New Jersey.... A1/AA- 5.100 08/01/01 670,540
1,000,000 Port Authority New York & New Jersey.... A1/AA- 5.300 08/01/03 1,049,690
500,000 Port Authority New York & New Jersey.... A1/AA- 6.100 10/15/02 538,870
500,000 Port Authority New York & New Jersey.... A1/AA- 4.750 10/01/08 510,970
400,000 Triborough Bridge & Tunnel Authority
General Purpose......................... Aa3/A+ 4.600 01/01/05 406,064
------------
5,259,692
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
67
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- --------- ------------
MUNICIPAL BONDS (CONTINUED)
<C> <S> <C> <C> <C> <C>
UTILITIES--12.2%
$1,500,000 Long Island Power Authority New York
Electric System Revenue................. Aaa/AAA 5.500% 12/01/10 $ 1,619,205
750,000 New York State Environmental Facility
Corp. PCR State Water................... Aa2/A+ 4.900 06/15/09 765,398
300,000 New York State Environmental Facility
Corp. PCR State Water................... Aaa/AAA 6.000 05/15/02 320,325
400,000 New York State Environmental Facility
Corp. PCR State Water................... Aaa/AAA 6.300 09/15/00 420,096
785,000 New York State Power Authority.......... Aa2/NR 4.900 01/01/06 822,138
1,000,000 New York State Power Authority Revenue &
General Purpose Series A................ Aa3/AA- 4.250 02/15/04 997,980
165,000 New York State Power Authority Revenue &
General Purpose Series CC............... Aa2/NR 4.900 01/01/06 172,806
------------
5,117,948
------------
OTHER--2.0%
205,000 New York City, Trust for Cultural
Resources Museum MOMA-AMBAC Insured+.... Aaa/AAA 4.900 01/01/01 209,352
75,000 New York City, Trust for Cultural
Resources Museum MOMA-AMBAC Insured+.... Aaa/AAA 5.000 01/01/02 77,428
165,000 New York City, Trust for Cultural
Resources Museum MOMA-AMBAC Insured+.... Aaa/AAA 5.000 01/01/02 169,800
350,000 New York City, Trust for Cultural
Resources Museum MOMA-AMBAC Insured+.... Aaa/AAA 6.300 01/01/03 382,042
------------
838,622
------------
TOTAL MUNICIPAL BONDS
(Cost $39,444,417)...................... 40,666,140
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
68
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL /S&P INTEREST MARKET
AMOUNT RATINGS RATE VALUE
- ---------- --------- -------- ---------
TAX-EXEMPT MONEY MARKET FUND--1.7%
<C> <S> <C> <C> <C> <C>
$ 714,236 Dreyfus New York Municipal Cash
Management
(Cost $714,236)......................... NR/NR 3.520%(a) $ 714,236
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C> <C>
TOTAL INVESTMENTS (Cost $40,158,653)
(b)--98.5%.............................. 41,380,376
Other assets less liabilities--1.5%..... 611,205
-----------
NET ASSETS--100.0%...................... $41,991,581
-----------
-----------
</TABLE>
NR NOT RATED BY MOODY'S OR STANDARD & POOR'S (S&P).
+ INSURED OR GUARANTEED BY THE INDICATED MUNICIPAL BOND INSURANCE
CORPORATION.
(a) REPRESENTS ANNUALIZED YIELD AT JUNE 30, 1998.
(b) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES. AT JUNE 30, 1998, NET UNREALIZED APPRECIATION WAS $1,221,723
BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED OF AGGREGATE
GROSS UNREALIZED APPRECIATION OF $1,233,433 AND AGGREGATE GROSS UNREALIZED
DEPRECIATION OF $11,710.
SEE NOTES TO FINANCIAL STATEMENTS.
69
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment at market value,
(Identified cost $40,158,653)........................... $41,380,376
Cash...................................................... 500
Receivables:
Interest................................................ 709,028
Capital stock sold...................................... 93,891
Other assets.............................................. 116
-----------
TOTAL ASSETS.......................................... 42,183,911
-----------
LIABILITIES:
Payables:
Investments purchased................................... 93,891
Dividends............................................... 40,013
Services provided by The Bank of New York and
Administrator......................................... 27,453
Accrued expenses and other liabilities.................... 30,973
-----------
TOTAL LIABILITIES..................................... 192,330
-----------
NET ASSETS:................................................. $41,991,581
-----------
-----------
SOURCES OF NET ASSETS:
Capital stock @ par....................................... $ 3,995
Capital surplus........................................... 40,834,392
Accumulated net realized loss on investments.............. (68,529)
Net unrealized appreciation on investments................ 1,221,723
-----------
$41,991,581
-----------
-----------
INSTITUTIONAL SHARES:
Net assets................................................ $32,292,436
-----------
-----------
Shares outstanding........................................ 3,071,750
-----------
-----------
Net asset value, offering price and repurchase price per
share................................................... $ 10.51
-----------
-----------
INVESTOR SHARES:
Net assets................................................ $ 9,699,145
-----------
-----------
Shares outstanding........................................ 922,656
-----------
-----------
Net asset value, offering price and repurchase price per
share................................................... $ 10.51
-----------
-----------
Institutional Shares authorized @ $.001 par value........... 2,000,000
Investor Shares authorized @ $.001 par value................ 2,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................. $1,006,964
----------
EXPENSES:
Advisory.................................................. 104,286
Administration............................................ 41,715
12b-1 fee--Investor Shares................................ 13,187
Accounting services....................................... 29,745
Transfer agent............................................ 20,632
Registration and filings.................................. 17,216
Custodian................................................. 7,290
Directors................................................. 3,810
Reports to shareholders................................... 2,936
Insurance................................................. 889
Audit..................................................... 790
Cash management........................................... 664
Legal..................................................... 377
Other..................................................... 5,533
----------
TOTAL EXPENSES.......................................... 249,070
Fees waived by The Bank of New York (Note 3).............. (48,173)
----------
NET EXPENSES............................................ 200,897
----------
NET INVESTMENT INCOME................................... 806,067
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--
Net realized gain on investments.......................... 142,713
Decrease in unrealized appreciation on investments during
the period.............................................. (183,015)
----------
Net realized and unrealized loss on investments........... (40,302)
----------
Net increase in net assets resulting from operations...... $ 765,765
----------
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
70
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
---------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................................ $ 806,067 $ 1,522,640
Net realized gain on investments................................................. 142,713 105,649
Increase (decrease) in unrealized appreciation on investments during the
period......................................................................... (183,015) 785,584
---------------- -----------------
Net increase in net assets resulting from operations........................... 765,765 2,413,873
---------------- -----------------
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares....................... (612,210) (870,111)
Investor Shares............................... (193,857) (652,529)
---------------- -----------------
(806,067) (1,522,640)
---------------- -----------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1).................. 5,554,928 37,610,007
Investor Shares..................................... 1,411,879 3,461,199
Proceeds from shares issued on reinvestment
of dividends: Institutional Shares............................................. 74,188 99,174
Investor Shares.................................................... 143,606 323,282
Cost of capital stock repurchased: Institutional Shares.......................... (4,223,489) (30,067,836)
Investor Shares (Note 1)........................... (2,212,599) (7,770,455)
---------------- -----------------
Net increase in net assets resulting from capital stock transactions........... 748,513 3,655,371
---------------- -----------------
INCREASE IN NET ASSETS....................................................... 708,211 4,546,604
NET ASSETS:
Beginning of period.............................................................. 41,283,370 36,736,766
---------------- -----------------
End of period.................................................................... $41,991,581 $ 41,283,370
---------------- -----------------
---------------- -----------------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1)....................................... 529,117 3,676,326
Investor Shares........................................................ 134,161 336,663
Shares issued on reinvestment of dividends: Institutional Shares................. 7,055 9,559
Investor Shares............................ 13,656 31,281
Shares repurchased: Institutional Shares......................................... (402,685) (2,953,489)
Investor Shares (Note 1)........................................ (210,576) (747,622)
---------------- -----------------
Net increase................................................................... 70,728 352,718
Shares outstanding, beginning of period.......................................... 3,923,678 3,570,960
---------------- -----------------
Shares outstanding, end of period................................................ 3,994,406 3,923,678
---------------- -----------------
---------------- -----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
71
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
-----------------------------------
SIX MONTHS FOR THE PERIOD
ENDED APRIL 1, 1997*
JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997
-------------- ------------------
<S> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 10.52 $ 10.16
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.21 0.31
Net realized and unrealized gain (loss)
on investments........................ (0.01) 0.36
------- -------
Total from investment operations...... 0.20 0.67
------- -------
DIVIDENDS
Dividends from net investment income.... (0.21) (0.31)
------- -------
Net asset value at end of period........ $ 10.51 $ 10.52
------- -------
------- -------
TOTAL RETURN:........................... 1.86%** 6.69%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $32,292 $30,915
Ratio to average net assets of:
Expenses, net of waiver from The Bank
of New York......................... 0.90%*** 0.90%***
Expenses, prior to waiver from The
Bank of New York.................... 1.13%*** 1.15%***
Net investment income, net of waiver
from The Bank of New York........... 3.93%*** 3.98%***
Portfolio turnover rate................. 16% 21%
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
72
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTOR SHARES
------------------------------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
1998 --------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 10.52 $ 10.29 $ 10.34 $ 9.59 $ 10.37 $ 9.97
------------ -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.19 0.39 0.40 0.39 0.39 0.38
Net realized and unrealized gain (loss)
on investments........................ (0.01) 0.23 (0.05) 0.75 (0.78) 0.40
------------ -------- -------- -------- -------- --------
Total from investment operations...... 0.18 0.62 0.35 1.14 (0.39) 0.78
------------ -------- -------- -------- -------- --------
DIVIDENDS
Dividends from net investment income.... (0.19) (0.39) (0.40) (0.39) (0.39) (0.38)
------------ -------- -------- -------- -------- --------
Net asset value at end of period........ $ 10.51 $ 10.52 $ 10.29 $ 10.34 $ 9.59 $ 10.37
------------ -------- -------- -------- -------- --------
------------ -------- -------- -------- -------- --------
TOTAL RETURN:+.......................... 1.74%* 6.19% 3.47% 12.08% (3.81)% 7.99%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $ 9,699 $ 10,368 $ 36,737 $ 40,931 $ 43,213 $ 55,871
Ratio to average net assets of:
Expenses, net of waiver from The Bank
of New York......................... 1.15%** 1.02% 0.90% 0.90% 0.85% 0.68%
Expenses, prior to waiver from The
Bank of New York.................... 1.38%** 1.32% 1.18% 1.20% 1.20% 1.30%
Net investment income, net of waiver
from The Bank of New York........... 3.68%** 3.88% 3.91% 3.89% 3.92% 3.74%
Portfolio turnover rate................. 16% 21% 22% 4% 18% 6%
</TABLE>
* NOT ANNUALIZED.
** ANNUALIZED.
+ TOTAL RETURN DOES NOT CONSIDER THE EFFECT OF THE SALES LOAD FOR THOSE
PERIODS IN WHICH THE SALES LOAD WAS IN EFFECT.
SEE NOTES TO FINANCIAL STATEMENTS.
73
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL / S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- ---------- ------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS--99.2%
CERTIFICATE OF PARTICIPATION--0.7%
$2,000,000 New York Certificate of Participation... Baa1/BBB+ 4.500% 02/01/03 $ 2,008,160
------------
EDUCATION--8.2%
1,000,000 District of Columbia Revenue
(Association of American Medical
Colleges), Series A, Callable 8/15/07
@102.................................... Aaa/AAA 5.150 02/15/10 1,019,810
1,000,000 Illinois Educational Facility Authority
Revenue (University of Chicago), Series
A....................................... Aa1/AA 5.000 07/01/08 1,036,650
2,000,000 Illinois Educational Facility Authority
Revenue (University of Chicago), Series
B....................................... Aa1/AA 4.400 07/01/25 2,000,000
7,190,000 New England Student Loan Revenue Series
A....................................... Aaa/NR 5.800 03/01/02 7,568,985
1,115,000 New England Student Loan Revenue Series
D....................................... Aaa/NR 6.000 09/01/99 1,142,295
110,000 New Jersey State Educational Facility
Authority Revenue (Jersey City State
College), Series D, MBIA Insured+....... Aaa/AAA 5.400 07/01/01 114,348
100,000 New Jersey State Educational Facility
Authority Revenue (Princeton
University), Series F................... Aaa/AAA 5.100 07/01/99 101,504
100,000 New Jersey State Educational Facility
Authority Revenue (Richard Stockton
State College), Series B................ Aaa/AAA 5.700 07/01/99 102,070
20,000 New York State Dormitory Authority
Revenue, Unrefunded Balance, University
of Rochester, Callable 7/17/98
@101.50................................. A1/A+ 6.200 07/01/02 20,331
1,600,000 Pennsylvania State Higher Education
Facility Authority College & University
Revenue................................. NR/AA- 5.000 11/01/00 1,638,496
1,000,000 Swarthmore Borough Authority
Pennsylvania College Revenue............ Aaa/AA+ 5.000 09/15/07 1,042,650
1,000,000 Swarthmore Borough Authority
Pennsylvania College Revenue............ Aaa/AA+ 5.000 09/15/08 1,042,160
1,000,000 Swarthmore Borough Authority
Pennsylvania College Revenue............ Aaa/AA+ 5.250 09/15/09 1,066,290
2,185,000 Texas A & M University Revenue, Callable
5/15/07 @100............................ Aa2/AA 5.000 05/15/08 2,262,480
1,000,000 Texas State Public Authority Building
(State Technical College), MBIA
Insured+................................ Aaa/AAA 6.100 08/01/04 1,097,470
1,000,000 University of Texas..................... Aaa/AAA 6.700 07/01/05 1,093,440
------------
22,348,979
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
74
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL / S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- ---------- ------------
MUNICIPAL BONDS (CONTINUED)
<C> <S> <C> <C> <C> <C>
GENERAL OBLIGATIONS--31.4%
$1,000,000 Aldine Texas Independent School
District, Callable 2/15/07 @100......... Aaa/AAA 5.375% 02/15/09 $ 1,054,610
100,000 Bergen County New Jersey................ Aaa/NR 5.550 12/01/00 103,912
4,000,000 California State........................ A1/A+ 5.000 10/01/02 4,143,680
3,000,000 Chicago Illinois........................ Aaa/AAA 5.500 01/01/12 3,216,180
3,000,000 Connecticut State Series A.............. Aa3/AA- 5.000 05/15/04 3,120,480
990,000 Connecticut State Series B, Callable
7/15/00 @102............................ Aa3/AA- 6.600 07/15/01 1,058,825
2,500,000 Delaware State Series A................. Aa1/AA+ 5.125 04/01/05 2,624,075
2,785,000 Du Page County Illinois................. Aaa/AAA 3.750 10/01/01 2,765,505
5,000,000 Georgia State Series C.................. Aaa/AA+ 5.250 07/01/08 5,349,300
500,000 Illinois State.......................... Aa2/AA- 5.500 08/01/01 520,815
990,000 Illinois State (Anti-Pollution), Series
D....................................... Aa2/AA 4.000 01/01/00 991,426
1,255,000 King County Washington, ETM............. Aa1/AA+ 5.000 01/01/04 1,300,130
1,585,000 King County Washington, Series A........ Aa1/AA+ 5.000 01/01/04 1,641,997
2,000,000 Maryland State & Local Facilities
Loan--1st Series, Callable 3/01/07
@101.50................................. Aaa/AAA 5.000 03/01/11 2,056,920
2,185,000 Maryland State & Local Facilities
Loan--2nd Series........................ Aaa/AAA 5.250 06/15/05 2,318,088
2,000,000 Maryland State & Local Facilities
loan--3rd Series, Callable 10/15/06
@100.................................... Aaa/AAA 5.000 10/15/07 2,092,400
1,485,000 Massachusetts State--Construction Loan
Series A................................ Aa3/AA- 7.200 02/01/99 1,515,977
1,485,000 Massachusetts State--Construction Loan
Series A................................ Aa3/AA- 5.100 11/01/02 1,543,360
2,000,000 Massachusetts State--Construction Loan
Series D, FGIC Insured+................. Aaa/AAA 5.125 11/01/03 2,090,420
1,065,000 Mesquite Texas Independent School
District #1............................. Aaa/AAA 8.125 08/15/01 1,189,126
2,000,000 Milwaukee Wisconsin Metropolitan Sewer
District Series A....................... Aa1/AA+ 6.250 10/01/04 2,214,000
2,070,000 Minnesota State, Callable 11/01/06
@100.................................... Aaa/AAA 5.000 11/01/08 2,157,230
1,290,000 Montana State Series D.................. Aa3/AA- 5.000 08/01/08 1,354,603
2,760,000 Nevada State............................ Aa2/AA 5.250 05/15/10 2,872,028
990,000 Nevada State Municipal Bond Bank Project
#4 Series A, Callable 8/01/99 @102...... Aa2/AA 6.700 02/01/01 1,039,342
3,215,000 Nevada State Municipal Bond Bank Project
#52 Series A............................ Aa2/AA 6.375 05/15/06 3,626,713
4,470,000 Nevada State Series A................... Aa2/AA 4.375 08/01/03 4,503,301
2,000,000 New Jersey State Series E............... Aa1/AA+ 5.000 07/15/04 2,083,480
2,970,000 Pennsylvania State--1st Series.......... Aa3/AA- 5.000 05/01/03 3,072,851
1,670,000 Port Tacoma Washington.................. Aaa/AAA- 5.500 12/01/07 1,797,003
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
75
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL / S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- ---------- ------------
MUNICIPAL BONDS (CONTINUED)
<C> <S> <C> <C> <C> <C>
$3,000,000 Rhode Island--Construction Capital Loan,
Callable 8/01/07 @101, MBIA Insured+.... Aaa/AAA 5.000% 08/01/09 $ 3,092,670
5,255,000 Texas State Refunding--Water Financial
Assistance Series C..................... Aa2/AA 5.000 08/01/09 5,427,206
500,000 Tulsa Oklahoma.......................... Aa2/AA 5.150 06/01/03 521,350
1,000,000 Washington State Series A............... Aa1/AA+ 6.700 02/01/05 1,132,050
1,500,000 Washington State Series R............... Aa/AA 5.375 10/01/08 1,609,290
4,330,000 Washington State Series R-92D
(Motor Vehicle Fuel Tax)................ Aa1/AA+ 6.250 09/01/07 4,904,288
3,000,000 Wisconsin State Series B................ Aa2/AA 5.250 05/01/07 3,175,830
------------
85,280,461
------------
HEALTHCARE--3.4%
2,000,000 Indiana Health Facility Financing
Authority Hospital Revenue--(Charity
Obligation Group), Series D............. Aa2/AA+ 5.000 11/01/26 2,041,760
640,000 New York State Medical Care Facilities
(St. Luke's Hospital), Series A,
Callable 2/15/00 @102................... Aa2/AA 7.400 02/15/09 681,670
1,335,000 New York State Medical Care Facilities
Financial Agency--Hospital & Nursing
Home, Series A.......................... Aa2/AA 7.000 02/15/99 1,361,967
930,000 New York State Medical Care Facilities
Financial Agency Series D............... Aa2/AA+ 5.100 02/15/05 960,532
2,000,000 Pennsylvania State Higher Educational
Facilities Authority--(University of
Pennsylvania), Series B................. Aa3/AA 5.000 01/01/04 2,064,980
2,000,000 Tampa Florida Revenue Health
System--Catholic Health East............ Aaa/AAA 5.500 11/15/06 2,151,160
------------
9,262,069
------------
HOUSING--1.5%
1,000,000 Alaska State Housing Finance Corporation
Mortgage Series A-1, Callable 12/01/07
@101.50, MBIA Insured+.................. Aaa/AAA 5.000 12/01/08 1,013,750
500,000 Connecticut State Housing Financial
Authority-- Housing Mortgage Finance
Program Series C-2...................... Aa2/AA 5.300 11/15/03 525,800
2,250,000 Housing New York Corporation Revenue.... A1/AA 6.000 11/01/03 2,402,865
90,000 New York State Mortgage
Agency--Homeowner Mortgage, Series FF,
Callable 7/02/98 @102................... Aa2/NR 7.850 10/01/08 92,039
------------
4,034,454
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
76
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL / S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- ---------- ------------
MUNICIPAL BONDS (CONTINUED)
<C> <S> <C> <C> <C> <C>
INDUSTRIAL DEVELOPMENT REVENUE--1.2%
$3,000,000 Georgetown County South Carolina
Pollution Control Facilities
(International Paper Company Project),
Callable 6/15/02 @102................... A3/A- 6.250% 06/15/05 $ 3,230,700
------------
PRE-REFUNDED ESCROWED--10.1%
85,000 Austin Texas Utility System Revenue
Series B, Unrefunded Balance, Callable
11/15/98 @102........................... A2/A 7.250 11/15/03 97,177
990,000 Connecticut State Clean Water Funding
Revenue, Callable 1/01/01 @102.......... Aaa/AAA 6.750 07/01/04 1,070,180
2,030,000 Delaware River Port Authority
Pennsylvania & New Jersey River Bridges,
ETM, Callable 7/17/98 @100.............. Aaa/AAA 6.500 01/15/11 2,271,063
790,000 Fort Worth Texas General Purpose Series
A, ETM, Callable 9/01/98 @100........... Aaa/AAA 4.250 03/01/01 795,712
1,235,000 Illinois State Toll Highway Authority,
Callable 7/17/98 @100.50................ Aaa/AAA 6.750 01/01/10 1,368,726
5,000,000 Indianapolis Industrial Local Public
Improvement Bank........................ Aaa/AAA 5.500 02/01/08 5,393,700
2,555,000 Jacksonville Florida Electric Authority
Revenue Second Installment, ETM......... Aaa/AA 5.250 07/01/01 2,592,150
650,000 Manatee County Florida Water Revenue,
ETM, Callable 7/17/98 @101.............. Aaa/AAA 4.200 03/01/05 647,010
2,750,000 Monroe County New York, Callable 6/01/04
@102.................................... Aaa/AAA 6.000 06/01/11 3,007,428
875,000 New Jersey State Highway
Authority--Garden State Parkway General
Revenue, ETM, Callable 7/17/98 @100..... NR/AAA 6.500 01/01/11 980,009
1,200,000 New Jersey State Turnpike Authority
Revenue Series C, MBIA Insured+......... Aaa/AAA 6.500 01/01/08 1,380,912
115,000 New Jersey State Turnpike Authority
Revenue Series E, ETM, Callable 7/17/98
@100.................................... Aaa/AAA 5.875 01/01/08 122,035
3,544,000 New Jersey State Turnpike Authority
Revenue, ETM, Callable 7/17/98 @100..... Aaa/NR 5.700 05/01/13 3,806,043
178,000 New York NY City Housing Authority,
(Dyckman Houses NYC--10 HUD)............ Aaa/NR 3.250 11/01/98 177,818
538,312 New York State Dormitory Authority
Revenue, GNMA Collateralized, Elizabeth
A. Horton Memorial Hospital............. NR/NR 7.000 09/25/06 632,439
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
77
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL / S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- ---------- ------------
MUNICIPAL BONDS (CONTINUED)
<C> <S> <C> <C> <C> <C>
$ 225,000 New York State Dormitory Authority
Revenue, University of Rochester,
Callable 10/02/98 @101.50............... A1/A+ 6.200% 07/01/02 $ 229,500
1,000,000 New York State Enviromental Facilities
Corp. Pollution Control Revenue
Loan--C................................. Aaa/AAA 5.000 07/15/04 1,040,120
205,000 Oklahoma State Turnpike Authority
Revenue Series A, ETM, Callable 7/17/98
@100.................................... NR/AAA 4.700 01/01/06 206,318
300,000 Plano Texas Independent School District,
ETM, Callable 9/15/98 @100.............. Aa2/AAA 4.000 03/15/99 300,852
300,000 Plano Texas Independent School District,
ETM, Callable 9/15/98 @100.............. Aa2/AAA 4.000 03/15/00 300,759
940,000 Sacramento California Municipal Utility
District Revenue Seriues A, ETM,
Callable 7/20/98 @100................... Aaa/AAA 5.500 02/01/11 992,471
------------
27,412,422
------------
SPECIAL TAX--6.9%
2,585,000 Chicago Illinois Sales Tax Revenue...... Aaa/AAA 6.000 01/01/07 2,850,686
510,000 Clark County Nevada--Las Vegas
Convention & Visitors Authority......... Aaa/AAA 5.400 07/01/03 537,122
1,000,000 Connecticut State Special Obligation
Revenue Series B........................ A/AA- 6.100 09/01/08 1,131,960
1,000,000 Connecticut State Unemployment
Compensation Advance Fund Revenue Series
A....................................... Aaa/AAA 5.500 11/15/00 1,036,830
350,000 Illinois State Sales Tax Revenue Series
V....................................... Aa2/AAA 5.625 06/15/01 365,414
155,000 Kentucky Infrastructure Authority Series
A, Unrefunded Balance, Callable 8/01/99
@102.................................... NR/A 7.625 08/01/03 163,812
500,000 Metropolitan Pier & Exposition Authority
(McCormick Project), Series A........... A2/A+ 5.600 06/15/01 520,970
990,000 Municipal Assistance Corp. for City of
New York Series 68, Callable 7/01/99
@102.................................... Aa2/NR 7.100 07/01/00 1,042,529
275,000 Municipal Assistance Corp. for City of
New York Series E....................... Aa2/AA 5.500 07/01/01 286,404
2,000,000 Municipal Assistance Corp. for New York
City Series E........................... Aa2/AA 6.000 07/01/05 2,196,120
3,805,000 New York State Local Goverment
Assistance Corp. Series A............... A3/A+ 6.000 04/01/06 4,193,072
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
78
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL / S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- ---------- ------------
MUNICIPAL BONDS (CONTINUED)
<C> <S> <C> <C> <C> <C>
$1,930,000 New York State Local Government
Assistance Corp. Series A............... A3/A+ 6.700% 04/01/00 $ 2,018,877
1,980,000 New York State Local Government
Assistance Corp. Series C............... A3/A+ 6.000 04/01/12 2,221,263
------------
18,565,059
------------
STATE APPROPRIATION--12.8%
100,000 Connecticut State Resource Recovery
Authority Series A...................... NR/AA- 5.750 11/15/00 103,991
1,100,000 Indiana Bond Bank Revenue Series A...... NR/AAA 5.750 02/01/06 1,194,116
1,980,000 Kentucky State Turnpike Authority
Economic Development Road Revenue
(Revitalization Projects)............... Aaa/AAA 5.300 07/01/04 2,086,979
2,000,000 Kentucky State Turnpike Authority
Economic Development Road Revenue
(Revitalization Projects)............... Aaa/AAA 5.500 07/01/08 2,163,020
1,000,000 Massachusetts Bay Transportation
Authority Series A...................... Aa3/AA- 5.400 03/01/08 1,068,250
2,050,000 Metropolitan Transportation Authority
Facility Revenue Series 8............... Baa1/BBB+ 5.500 07/01/06 2,163,939
1,610,000 New York State Dormitory Authority
Revenue Series A, Unrefunded Balance,
Callable 5/15/00 @102................... A3/A- 7.500 05/15/02 1,737,093
2,475,000 New York State Dormitory Authority State
University Educational Facilities Series
B....................................... A3/A- 5.100 05/15/02 2,554,670
1,980,000 New York State Dormitory Authority State
University Educational Facilities Series
B....................................... A3/A- 5.250 05/15/10 2,058,012
2,005,000 New York State Thruway Authority Service
Contract Revenue, Callable 1/01/01
@102.................................... Baa1/BBB+ 7.000 01/01/02 2,162,232
5,000,000 New York State Thruway Service Contract
Revenue, Callable 4/01/07 @102.......... Baa1/BBB+ 5.100 04/01/08 5,120,050
3,550,000 New York State Urban Development Corp.
Revenue, Callable 1/01/08 @102.......... Baa1/BBB+ 5.000 01/01/14 3,493,591
2,500,000 New York State Urban Development Corp.
Revenue, Callable 1/01/08 @102.......... Baa1/BBB+ 5.000 01/01/13 2,472,075
4,705,000 New York State Urban Development Corp.
Revenue, Series A, Callable 1/01/08
@102.................................... Baa1/BBB+ 5.000 01/01/14 4,630,238
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
79
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL / S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- ---------- ------------
MUNICIPAL BONDS (CONTINUED)
<C> <S> <C> <C> <C> <C>
$1,500,000 New York State Urban Development Corp.
Series A................................ Baa1/BBB+ 5.450% 01/01/07 $ 1,571,685
------------
34,579,941
------------
TRANSPORTATION--9.8%
1,150,000 Delaware Transportation Authority System
Revenue................................. A1/AA 6.125 07/01/03 1,234,169
1,500,000 Kansas State Department of
Transportation Highway Revenue Series
A....................................... Aa2/AA 5.375 03/01/07 1,602,135
385,000 Kentucky State Turnpike Authority Toll
Road Revenue Series A, Unrefunded
Balance................................. A/A 8.500 07/01/04 386,451
2,000,000 New Jersey State Highway Authority
Garden State Parkway General Revenue.... A1/AA- 5.150 01/01/07 2,102,540
3,025,000 New Jersey State Transit Corporation
(Capital Grant Antic Notes) Series A.... Aaa/AAA 5.400 09/01/02 3,153,956
2,500,000 New Jersey State Transportation
Authority............................... Aaa/AAA 6.250 12/15/03 2,754,025
565,000 New Jersey State Turnpike Authority
Revenue, ETM............................ NR/AAA 10.375 01/01/03 652,242
1,000,000 New York State Bridge Authority
Revenue................................. Aa3/AA- 5.000 01/01/07 1,040,740
990,000 Pennsylvania State Turnpike Revenue
Series O................................ Aaa/AAA 5.350 12/01/02 1,037,896
3,630,000 Port Authority New York & New Jersey
52nd Series, Callable 11/01/99 @100..... A1/AA- 9.000 11/01/14 3,864,280
2,105,000 Port Seattle Washington Revenue Series
A....................................... Aa3/AAA 6.000 10/01/07 2,348,401
2,130,000 Triborough Bridge & Tunnel Authority
Series Q................................ Aa3/A+ 6.750 01/01/09 2,517,830
1,000,000 Triborough Bridge & Tunnel Authority
Series Q, Callable 1/01/00 @101.50...... Aa3/A+ 6.750 01/01/03 1,054,610
2,750,000 Triborough Bridge & Tunnel Authority
Series V................................ Aa3/A+ 6.500 01/01/01 2,912,195
------------
26,661,470
------------
UTILITIES--13.1%
1,915,000 Austin Texas Utility System Revenue
Series B, Unrefunded Balance, Callable
11/15/98 @102........................... A2/A 7.250 11/15/03 1,978,712
5,000,000 Austin Texas Utility System Revenue
Series A, Callable 11/15/06 @100........ Aaa/AAA 5.000 05/15/07 5,172,600
2,970,000 Charlotte North Carolina Water &
Sewer................................... Aaa/AAA 5.500 05/01/03 3,151,883
940,000 Consumers Public Power District--Nuclear
Facility Revenue, Callable 7/17/98
@100.................................... A1/NR 5.100 01/01/03 940,226
3,150,000 Dade County Florida Water & Sewer System
Revenue................................. Aaa/AAA 6.250 10/01/07 3,588,764
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
80
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL / S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- --------- -------- ---------- ------------
MUNICIPAL BONDS (CONTINUED)
<C> <S> <C> <C> <C> <C>
$ 990,000 Georgia Municiple Electrical Authority
Power Revenue Series Z.................. A3/A 5.000% 01/01/04 $ 1,016,799
1,000,000 Grant County Washington Public Utility
District No. 002........................ Aa3/A+ 5.600 01/01/05 1,063,740
1,000,000 Houston Texas Water Conveyance System
Contract Series B....................... Aaa/AAA 7.000 12/15/04 1,146,580
5,000 Jacksonville Florida Electrical
Authority Revenue
Series Two 1987A-1, Callable 7/17/98
@101.................................... Aa2/AA 7.500 10/01/02 5,065
4,000,000 Long Island New York Power Authority
Electric System Revenue................. Aaa/AAA 5.500 12/01/09 4,324,240
1,000,000 Long Island Power Authority New York
Electric System Revenue................. Aaa/AAA 5.500 12/01/10 1,079,470
2,085,000 New York State Environmental Facilities
Corp. Pollution Control Revenue......... Aa2/A+ 5.750 06/15/08 2,288,767
500,000 New York State Environmental Facilities
Corp. Pollution Control Revenue Series
B....................................... Aa2/A+ 6.000 06/15/01 526,775
2,000,000 New York State Power Authority Revenue &
General Purpose......................... Aa3/AA- 4.375 02/15/05 2,002,760
5,000,000 Omaha Public Power Distribution Nebraska
Electric Revenue........................ Aa2/AA 5.500 02/01/07 5,374,750
990,000 San Antonio Texas Electrical & Gas
Revenue Series A........................ Aa1/AA 7.000 02/01/99 1,009,513
750,000 South Carolina State Public Service
Authority Electrical Revenue &
Electrical System Expansion, Callable
7/20/98 @100............................ Aa2/AAA 4.100 07/01/06 740,430
------------
35,411,074
------------
OTHER--0.1%
200,000 New York State Dormitory Authority
Revenue Metropolitan Museum of Art
Series B, Floating Rate Notes, payable
monthly, interest rate resets weekly,
next interest rate reset date 7/01/98... Aa1/AA+ 3.200++ 07/01/23 200,000
100,000 New York State Local Government
Assistance Corp. Series A, Floating Rate
Notes, payable monthly, interest rate
resets weekly, next interest rate reset
date 7/01/98............................ Aa3/AA 3.200++ 04/01/22 100,000
------------
300,000
------------
TOTAL MUNICIPAL BONDS
(Cost $258,743,722)..................... 269,094,789
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
81
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S
PRINCIPAL / S&P INTEREST MARKET
AMOUNT RATINGS RATE VALUE
- ---------- --------- ---------- ------------
<C> <S> <C> <C> <C>
TAX-EXEMPT MONEY MARKET FUND--1.5%
$3,915,393 Dreyfus Municipal Money Market Fund
(Cost $3,915,393)....................... NR/NR 3.160%(a) $ 3,915,393
------------
</TABLE>
<TABLE>
<C> <S> <C> <C> <C>
TOTAL INVESTMENTS
(Cost $262,659,115)(b)--100.7%.......... 273,010,182
Other assets less liabilities--(0.7)%... (1,805,168)
------------
NET ASSETS--100.0%...................... $271,205,014
------------
------------
</TABLE>
NR NOT RATED BY MOODY'S OR STANDARD & POOR'S (S&P).
+ INSURED OR GUARANTEED BY THE INDICATED MUNICIPAL BOND INSURANCE
CORPORATION.
++ REPRESENTS INTEREST RATE IN EFFECT JUNE 30, 1998 FOR FLOATING RATE NOTES.
(a) REPRESENTS ANNUALIZED YIELD AT JUNE 30, 1998.
(b) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES. AT JUNE 30, 1998, NET UNREALIZED APPRECIATION WAS $10,351,067
BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED OF AGGREGATE
GROSS UNREALIZED APPRECIATION OF $10,487,698 AND AGGREGATE GROSS UNREALIZED
DEPRECIATION OF $136,631.
SEE NOTES TO FINANCIAL STATEMENTS.
82
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
DIVERSIFICATION BY STATE
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF
TOTAL
VALUE NET ASSETS
------------ ----------
<S> <C> <C>
Alaska.................................. $ 1,013,750 0.4%
California.............................. 5,136,151 1.9
Connecticut............................. 8,048,066 3.0
Delaware................................ 3,858,243 1.4
District of Columbia.................... 1,019,810 0.4
Florida................................. 8,984,148 3.3
Georgia................................. 6,366,099 2.3
Illinois................................ 15,636,372 5.8
Indiana................................. 8,629,576 3.2
Kansas.................................. 1,602,135 0.6
Kentucky................................ 4,800,263 1.8
Maryland................................ 6,467,408 2.4
Massachusetts........................... 14,929,288 5.5
Minnesota............................... 2,157,230 0.8
Montana................................. 1,354,603 0.5
Nebraska................................ 6,314,976 2.3
Nevada.................................. 12,578,506 4.6
New Jersey.............................. 17,457,075 6.4
New York................................ 78,363,780 28.9
North Carolina.......................... 3,151,883 1.2
Oklahoma................................ 727,668 0.3
Pennsylvania............................ 13,236,386 4.9
Rhode Island............................ 3,092,670 1.1
South Carolina.......................... 3,971,130 1.5
Texas................................... 22,926,237 8.4
Washington.............................. 15,796,899 5.8
Wisconsin............................... 5,389,830 2.0
------------ -----
Total value of investments.............. 273,010,182 100.7
Other assets less liabilities........... (1,805,168) (0.7)
------------ -----
Net Assets.............................. $271,205,014 100.0%
------------ -----
------------ -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
83
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment at market value, (Identified cost
$262,659,115)........................................... $273,010,182
Receivables:
Interest................................................ 4,286,273
Investments sold........................................ 3,396,782
Capital stock sold...................................... 100
Deferred organization costs and other assets.............. 96,619
------------
TOTAL ASSETS.......................................... 280,789,956
------------
LIABILITIES:
Payables:
Investment purchased.................................... 9,060,792
Dividends............................................... 266,352
Services provided by The Bank of New York and
Administrator......................................... 178,454
Capital stock repurchased............................... 33,000
Accrued expenses and other liabilities.................... 46,344
------------
TOTAL LIABILITIES..................................... 9,584,942
------------
NET ASSETS: $271,205,014
------------
------------
SOURCES OF NET ASSETS:
Capital stock @ par....................................... $ 26,463
Capital surplus........................................... 256,122,220
Accumulated net realized gain on investments.............. 4,705,264
Net unrealized appreciation on investments................ 10,351,067
------------
NET ASSETS.................................................. $271,205,014
------------
------------
INSTITUTIONAL SHARES:
Net assets................................................ $270,892,109
------------
------------
Shares outstanding........................................ 26,432,556
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 10.25
------------
------------
INVESTOR SHARES:
Net assets................................................ $ 312,905
------------
------------
Shares outstanding........................................ 30,510
------------
------------
Net asset value, offering price and repurchase price per
share................................................... $ 10.26
------------
------------
Institutional Shares authorized @ $.001 par value........... 200,000,000
Investor Shares authorized @ $.001 par value................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30 ,1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................. $ 6,698,222
-----------
EXPENSES:
Advisory.................................................. 673,527
Administration............................................ 269,412
12b-1 fee--Investor Shares................................ 344
Registration and filings.................................. 38,856
Accounting services....................................... 29,753
Transfer agent............................................ 27,442
Custodian................................................. 18,665
Organization.............................................. 8,205
Reports to shareholders................................... 7,376
Audit..................................................... 5,971
Directors................................................. 3,838
Cash management........................................... 2,948
Legal..................................................... 2,734
Insurance................................................. 2,558
Other..................................................... 26,309
-----------
TOTAL EXPENSES.......................................... 1,117,938
Earnings credit adjustment (Note 3)....................... (166)
-----------
NET EXPENSES............................................ 1,117,772
-----------
NET INVESTMENT INCOME................................... 5,580,450
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--
Net realized gain on investments.......................... 4,210,777
Decrease in unrealized appreciation on investments during
the period.............................................. (4,882,075)
-----------
Net realized and unrealized loss on investments........... (671,298)
-----------
Net increase in net assets resulting from operations...... $ 4,909,152
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
84
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
SIX MONTHS ENDED APRIL 1, 1997*
JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 5,580,450 $ 8,839,260
Net realized gain on investments.................................... 4,210,777 1,461,550
Increase (decrease) in unrealized appreciation on investments during
the period........................................................ (4,882,075) 6,763,697
------------------ -------------------
Net increase in net assets resulting from operations.............. 4,909,152 17,064,507
------------------ -------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares.......... (5,575,156) (8,837,526)
Investor Shares.................. (5,294) (1,734)
Distributions from capital gains: Institutional Shares.............. -0- (966,370)
Investor Shares......................... -0- (693)
------------------ -------------------
(5,580,450) (9,806,323)
------------------ -------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1)..... 18,345,136 290,281,587
Investor Shares........................ 473,621 240,225
Proceeds from shares issued on reinvestment
of dividends: Institutional Shares................................ 58,454 1,026,353
Investor Shares....................................... 4,079 2,234
Cost of capital stock repurchased: Institutional Shares............. (15,926,123) (29,480,055)
Investor Shares....................... (357,245) (50,138)
------------------ -------------------
Net increase in net assets resulting from capital stock
transactions.................................................... 2,597,922 262,020,206
------------------ -------------------
INCREASE IN NET ASSETS.......................................... 1,926,624 269,278,390
NET ASSETS:
Beginning of period................................................. 269,278,390 -0-
------------------ -------------------
End of period....................................................... $ 271,205,014 $ 269,278,390
------------------ -------------------
------------------ -------------------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1).......................... 1,791,539 28,986,038
Investor Shares.......................................... 46,143 23,533
Shares issued on reinvestment of dividends: Institutional Shares.... 5,699 99,981
Investor Shares.............. 397 218
Shares repurchased: Institutional Shares............................ (1,554,010) (2,896,690)
Investor Shares.................................... (34,862) (4,920)
------------------ -------------------
Net increase...................................................... 254,906 26,208,160
Shares outstanding, beginning of period............................. 26,208,160 -0-
------------------ -------------------
Shares outstanding, end of period................................... 26,463,066 26,208,160
------------------ -------------------
------------------ -------------------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
85
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
----------------------------------- -----------------------------------
SIX MONTHS FOR THE PERIOD SIX MONTHS FOR THE PERIOD
ENDED APRIL 1, 1997* ENDED MAY 1, 1997*
JUNE 30, 1998 THROUGH JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997 (UNAUDITED) DECEMBER 31, 1997
-------------- ------------------ -------------- ------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 10.27 $ 10.00 $10.28 $ 9.99
-------------- -------- ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.21 0.33 0.20 0.27
Net realized and unrealized gain (loss)
on investments........................ (0.02) 0.31 (0.02) 0.33
-------------- -------- ------ ------
Total from investment operations...... 0.19 0.64 0.18 0.60
-------------- -------- ------ ------
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment
income................................ (0.21) (0.33) (0.20) (0.27)
Distributions from capital gains........ -0- (0.04) -0- (0.04)
-------------- -------- ------ ------
Total dividends and distributions..... (0.21) (0.37) (0.20) (0.31)
-------------- -------- ------ ------
Net asset value at end of period........ $ 10.25 $ 10.27 $10.26 $10.28
-------------- -------- ------ ------
-------------- -------- ------ ------
TOTAL RETURN:........................... 1.87%** 6.50%** 1.72%** 6.08%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $270,892 $269,085 $ 313 $ 194
Ratio to average net assets of:
Expenses.............................. 0.83%*** 0.81%*** 1.13%*** 1.15%***
Net investment income................. 4.14%*** 4.36%*** 3.84%*** 3.98%***
Portfolio turnover rate................. 25% 30% 25% 30%
</TABLE>
* COMMENCEMENT OF OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
86
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
<C> <S> <C>
COMMERCIAL PAPER+--35.3%
AGRIBUSINESS--1.0%
$ 20,000,000 Cargill, Inc., 5.46%, 07/07/98.......... $ 19,981,800
--------------
ASSET BACKED SECURITIES--CREDIT CARDS--1.5%
10,000,000 Riverwoods Funding Corp., 5.60%,
07/06/98................................ 9,992,222
10,000,000 Riverwoods Funding Corp., 5.52%,
07/30/98................................ 9,955,533
10,000,000 Riverwoods Funding Corp., 5.51%,
08/05/98................................ 9,946,431
--------------
29,894,186
--------------
ASSET BACKED SECURITIES--TRADE & LEASE RECEIVABLES--1.9%
20,000,000 Ciesco LP, 5.50%, 08/21/98.............. 19,844,167
7,870,000 Sheffield Receivables Corp., 5.51%,
07/07/98................................ 7,862,773
10,000,000 Sheffield Receivables Corp., 5.55%,
07/10/98................................ 9,986,125
--------------
37,693,065
--------------
BROKERAGE SERVICES--0.5%
10,000,000 Merrill Lynch & Co., Inc., 5.49%,
07/15/98................................ 9,978,650
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
<C> <S> <C>
COMMERCIAL PAPER+ (CONTINUED)
CHEMICALS--BASIC--1.8%
$ 15,000,000 duPont (E.I.) de Nemours & Co., 5.49%,
08/25/98................................ $ 14,874,187
20,000,000 duPont (E.I.) de Nemours & Co., 5.50%,
10/23/98................................ 19,651,667
--------------
34,525,854
--------------
CHEMICALS--DIVERSIFIED--2.0%
20,000,000 Air Products & Chemicals, Inc., 5.49%,
09/18/98................................ 19,759,050
20,000,000 Minnesota Mining & Manufacturing, 5.48%,
10/20/98................................ 19,662,067
--------------
39,421,117
--------------
CONGLOMERATES--1.5%
10,000,000 Eastman Kodak Co., 5.50%, 08/14/98...... 9,932,778
10,000,000 Eastman Kodak Co., 5.50%, 08/20/98...... 9,923,611
10,000,000 Eastman Kodak Co., 5.56%, 09/08/98...... 9,893,433
--------------
29,749,822
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
87
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
COMMERCIAL PAPER+ (CONTINUED)
<C> <S> <C>
ELECTRICAL AND ELECTRONIC EQUIPMENT-- 2.3%
$ 20,000,000 General Electric Co., 5.50%, 11/06/98... $ 19,608,889
10,500,000 Lucent Technology, Inc., 6.30%,
07/01/98................................ 10,500,000
15,000,000 Lucent Technology, Inc., 5.50%,
08/12/98................................ 14,903,750
--------------
45,012,639
--------------
FINANCE COMPANIES--NON-CAPTIVE AND INDEPENDENT--1.0%
10,000,000 American Express Credit Corp., 5.50%,
08/19/98................................ 9,925,139
10,000,000 General Electric Capital Corp., 5.43%,
10/14/98................................ 9,841,625
--------------
19,766,764
--------------
FINANCIAL SERVICES--MISCELLANEOUS-- 1.5%
20,000,000 International Lease Finance, 5.47%,
07/17/98................................ 19,951,378
10,000,000 International Lease Finance, 5.47%,
07/24/98................................ 9,965,053
--------------
29,916,431
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
<C> <S> <C>
COMMERCIAL PAPER+ (CONTINUED)
FOOD PROCESSING--0.5%
$ 5,000,000 Archer Daniels Midland Co., 5.49%,
09/11/98................................ $ 4,945,100
5,000,000 Heinz (H.J.) Co., 5.50%, 07/23/98....... 4,983,194
--------------
9,928,294
--------------
INSURANCE--HEALTH, LIFE & MULTI-LINE--1.5%
20,000,000 American Gen Corp., 5.50%, 07/22/98..... 19,935,833
10,000,000 American Gen Corp., 5.52%, 09/02/98..... 9,903,400
--------------
29,839,233
--------------
INSURANCE--NON-HEALTH & LIFE-- 3.0%
14,168,000 General RE Corp., 5.50%, 08/11/98....... 14,079,253
14,400,000 General RE Corp., 5.53%, 09/09/98....... 14,245,440
10,000,000 Prudential Funding Corp., 5.50%,
07/16/98................................ 9,977,083
10,000,000 Prudential Funding Corp., 5.51%,
08/17/98................................ 9,928,064
10,000,000 Prudential Funding Corp., 5.50%,
09/16/98................................ 9,882,361
--------------
58,112,201
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
88
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
COMMERCIAL PAPER+ (CONTINUED)
<C> <S> <C>
LEASING--WHOLE & RETAIL--AUTO & TRUCK--3.3%
$ 10,000,000 Ford Motor Credit Co., 5.47%,
08/20/98................................ $ 9,924,028
20,000,000 Ford Motor Credit Co., 5.52%,
09/03/98................................ 19,803,733
5,000,000 General Motors Acceptance Corp., 5.52%,
07/09/98................................ 4,993,867
15,000,000 General Motors Acceptance Corp., 5.51%,
08/10/98................................ 14,908,167
15,000,000 General Motors Acceptance Corp., 5.53%,
08/13/98................................ 14,900,921
--------------
64,530,716
--------------
MANUFACTURING--MISCELLANEOUS--0.8%
11,010,000 Stanley WKS, 5.49%, 07/16/98............ 10,984,815
5,000,000 Stanley WKS, 5.48%, 07/23/98............ 4,983,256
--------------
15,968,071
--------------
NON-BANK HOLDING COMPANIES--1.0%
10,000,000 USAA Capital Corp., 5.45%, 07/23/98..... 9,966,694
10,000,000 USAA Capital Corp., 5.51%, 08/18/98..... 9,926,533
--------------
19,893,227
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
<C> <S> <C>
COMMERCIAL PAPER+ (CONTINUED)
OIL--INTEGRATED--1.8%
$ 20,000,000 BP America, 6.35%, 07/01/98............. $ 20,000,000
15,000,000 Chevron USA, Inc., 5.49%, 08/18/98...... 14,890,200
--------------
34,890,200
--------------
PHARMACEUTICALS, HEALTH CARE, COSMETIC--2.6%
15,000,000 Becton Dickinson & Co., 5.53%,
08/21/98................................ 14,882,487
26,000,000 Clorox Co., 5.46%, 07/13/98............. 25,952,680
10,000,000 Procter & Gamble Co., 5.48%, 09/10/98... 9,891,922
--------------
50,727,089
--------------
PIPELINE--NON-NATURAL GAS--0.5%
10,000,000 Colonial Pipeline Co., 5.49%,
08/25/98................................ 9,916,125
--------------
RETAIL--SPECIALTY STORES--0.5%
9,360,000 St. Michael Finance Ltd., 5.52%,
07/24/98................................ 9,326,990
--------------
STONE, CLAY AND GLASS
PRODUCTS--0.5%
10,000,000 Guardian Industries Corp., 5.50%,
07/15/98................................ 9,978,611
--------------
TECHNOLOGY INDUSTRIES--0.9%
18,000,000 Motorola, Inc., 5.51%, 09/16/98......... 17,787,865
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
89
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
COMMERCIAL PAPER+ (CONTINUED)
<C> <S> <C>
TELECOMMUNICATIONS--0.3%
$ 5,860,000 Bellsouth Telecommunications, Inc.,
5.50%, 08/12/98......................... $ 5,822,398
--------------
TELECOMMUNICATIONS--NON-U.S.-- 0.8%
14,690,000 France Telecom, 5.48%, 07/16/98......... 14,656,458
--------------
UTILITIES--ELECTRIC--2.3%
11,250,000 Duke Power Co., 5.50%, 08/14/98......... 11,174,375
10,000,000 National Rural Utilities Cooperative
Finance Corp., 5.49%, 08/04/98.......... 9,948,150
15,000,000 National Rural Utilities Cooperative
Finance Corp., 5.49%, 08/06/98.......... 14,917,650
10,000,000 National Rural Utilities Cooperative
Finance Corp., 5.48%, 09/04/98.......... 9,901,056
--------------
45,941,231
--------------
TOTAL COMMERCIAL PAPER+
(Cost $693,259,037)..................... 693,259,037
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ TIME DEPOSITS--8.6% --------------
<C> <S> <C>
BANK HOLDING COMPANIES--3.8%
$ 39,417,000 First Union Corp., 5.75%, 07/01/98...... $ 39,417,000
35,000,000 Wachovia Bank of North Carolina, 6.00%,
07/01/98................................ 35,000,000
--------------
74,417,000
--------------
BANKS--FOREIGN INSTITUTIONS--4.8%
25,000,000 CIBC/Oppenheimer, 6.13%, 07/01/98....... 25,000,000
35,000,000 Dresdner Bank, 6.50%, 07/01/98.......... 35,000,000
35,000,000 West Deutsche Landesbank, 6.25%,
07/01/98................................ 35,000,000
--------------
95,000,000
--------------
TOTAL TIME DEPOSITS
(Cost $169,417,000)..................... 169,417,000
--------------
</TABLE>
<TABLE>
<C> <S> <C>
UNITED STATES GOVERNMENT AGENCIES & OBLIGATIONS--8.1%
FEDERAL FARM CREDIT BANK--0.5%
10,000,000 5.70%, 11/03/98......................... 9,999,465
--------------
FEDERAL HOME LOAN BANK--2.8%
5,000,000 5.72%, 07/07/98......................... 5,000,066
15,000,000 5.80%, 09/18/98......................... 15,001,273
5,000,000 5.83%, 12/17/98......................... 5,001,555
10,000,000 5.40%, 01/15/99......................... 9,994,656
9,000,000 5.47%, 02/24/99......................... 8,989,851
5,000,000 5.63%, 05/05/99......................... 4,998,154
5,000,000 5.63%, 06/15/99......................... 4,998,843
--------------
53,984,398
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
90
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
UNITED STATES GOVERNMENT AGENCIES & OBLIGATIONS
(CONTINUED)
<C> <S> <C>
FEDERAL HOME LOAN MORTGAGE CORP.--0.4%
$ 7,500,000 5.60%, 04/21/99......................... $ 7,496,194
--------------
FEDERAL NATIONAL MORTGAGE ASSOC.-- 1.9%
8,005,000 5.68%, 07/31/98......................... 8,004,839
5,000,000 5.76%, 11/04/98......................... 4,999,155
10,000,000 5.36%, 02/19/99......................... 9,993,234
5,000,000 5.60%, 04/22/99......................... 4,994,919
10,000,000 5.56%, 05/21/99......................... 9,988,674
--------------
37,980,821
--------------
STUDENT LOAN MARKETING ASSOC.-- 1.0%
10,000,000 5.74%, 12/17/98......................... 9,997,551
10,000,000 5.52%, 06/10/99......................... 9,985,957
--------------
19,983,508
--------------
UNITED STATES TREASURY NOTES--1.5%
10,000,000 5.88%, 08/15/98......................... 10,001,184
5,000,000 5.50%, 11/15/98......................... 4,995,292
5,000,000 5.13%, 12/31/98......................... 4,987,735
5,000,000 6.38%, 01/15/99......................... 5,024,588
5,000,000 6.38%, 04/30/99......................... 5,030,960
--------------
30,039,759
--------------
TOTAL UNITED STATES GOVERNMENT AGENCIES
& OBLIGATIONS
(Cost $159,484,145)..................... 159,484,145
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ CERTIFICATES OF DEPOSIT--8.1% --------------
<C> <S> <C>
BANK HOLDING COMPANIES--3.8%
$ 5,000,000 Bank of America, 5.51%, 02/17/99........ $ 4,997,717
10,000,000 Bankers Trust Co., 5.91%, 07/17/98...... 9,999,618
5,000,000 Chase Manhattan Bank, 5.75%, 05/10/99... 4,997,742
10,000,000 Harris Trust Bank of Chicago, 5.54%,
07/15/98................................ 10,000,000
15,000,000 Harris Trust Bank of Chicago, 5.57%,
08/25/98................................ 15,000,000
10,000,000 Old Kent Bank and Trust Co., 5.55%,
07/09/98................................ 10,000,000
10,000,000 Wilmington Trust Co., 5.62%, 12/21/98... 10,000,000
10,000,000 Wilmington Trust Co., 5.73%, 02/16/99... 10,000,000
--------------
74,995,077
--------------
BANKS--FOREIGN INSTITUTIONS--4.3%
4,000,000 Bayerische Landesbank, 5.86%,
07/17/98................................ 3,999,922
10,000,000 Bayerische Vereinsbank AG, 5.70%,
10/06/98................................ 10,002,219
10,000,000 Canadian Imperial Bank, 5.74%,
03/31/99................................ 9,996,419
10,000,000 Credit Suisse, 5.75%, 03/31/99.......... 10,000,000
10,000,000 National Westminster Bank, 5.53%,
08/05/98................................ 10,000,095
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
91
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
CERTIFICATES OF DEPOSIT (CONTINUED)
<C> <S> <C>
$ 10,000,000 National Westminster Bank, 5.83%,
10/14/98................................ $ 9,998,898
10,000,000 Rabobank Nederland NV, 5.77%,
05/05/99................................ 9,996,768
5,000,000 Royal Bank of Canada, 5.88%, 09/17/98... 5,000,136
10,000,000 Societe Generale, 5.90%, 10/20/98....... 9,997,936
5,000,000 Swiss Bank Corp., 5.86%, 07/17/98....... 4,999,845
--------------
83,992,238
--------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $158,987,315)..................... 158,987,315
--------------
</TABLE>
<TABLE>
<C> <S> <C>
CORPORATE BONDS--3.7%
BANKING--2.2%
15,000,000 FCC National Bank, Wilmington Delaware,
5.56%, 08/12/98......................... 15,000,000
15,000,000 First National Bank of Chicago, 5.57%,
08/21/98................................ 15,000,168
6,240,000 Norwest Corp., 6.00%, 10/13/98.......... 6,242,694
6,250,000 Norwest Corp., 6.25%, 04/15/99.......... 6,275,562
--------------
42,518,424
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
<C> <S> <C>
CORPORATE BONDS (CONTINUED)
FINANCE COMPANIES--1.3%
$ 7,715,000 Associates Corp. of North America,
6.38%, 08/15/98......................... $ 7,719,451
15,000,000 Associates Corp. of North America,
6.00%, 03/15/99......................... 15,025,979
2,000,000 Associates Corp. of North America,
7.50%, 05/15/99......................... 2,028,308
--------------
24,773,738
--------------
TELECOMMUNICATIONS--0.2%
4,200,000 British Telecom Finance, Inc., 9.38%,
02/15/99................................ 4,295,190
--------------
TOTAL CORPORATE BONDS
(Cost $71,587,352)...................... 71,587,352
--------------
</TABLE>
<TABLE>
<C> <S> <C>
FLOATING RATE NOTES+--2.6%
BANK HOLDING COMPANY--0.5%
10,000,000 American Express Centurion Bank, 5.62%+,
payable monthly, interest rate resets
monthly, next interest rate reset date
7/10/98, final maturity 11/10/98........ 10,000,000
--------------
BROKERAGE SERVICES--2.1%
5,000,000 Bear Stearns Cos. Inc., 5.63%+, payable
monthly, interest rate resets monthly,
next interest rate reset date 7/09/98,
final maturity 3/09/99.................. 5,000,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
92
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
FLOATING RATE NOTES+ (CONTINUED)
<C> <S> <C>
$ 10,000,000 Bear Stearns Cos. Inc., 5.64%+, payable
monthly, interest rate resets monthly,
next interest rate reset date 7/10/98,
final maturity 11/10/98................. $ 10,000,000
5,000,000 Bear Stearns Cos. Inc., 5.66%+, payable
monthly, interest rate resets monthly,
next interest rate reset date 7/30/98,
final maturity 3/30/99.................. 5,000,000
10,000,000 Merrill Lynch & Co., Inc., 5.62%+,
payable monthly, interest rate resets
monthly, next interest rate reset date
7/13/98, final maturity 7/13/98......... 10,000,000
10,000,000 Merrill Lynch & Co., Inc., 5.61%+,
payable monthly, interest rate resets
monthly, next interest rate reset date
7/13/98, final maturity 4/13/99......... 10,000,000
--------------
40,000,000
--------------
TOTAL FLOATING RATE NOTES+
(Cost $50,000,000)...................... 50,000,000
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ BANK NOTE--0.5% --------------
<C> <S> <C>
$ 10,000,000 LaSalle National Bank, 5.71%, 07/27/98
(Cost $9,998,765)....................... $ 9,998,765
--------------
</TABLE>
<TABLE>
<C> <S> <C>
REPURCHASE AGREEMENTS-- 33.1%
REPURCHASE AGREEMENT WITH BARCLAYS CAPITAL, INC.
120,000,000 5.75%, due 7/01/98, repurchase price
$120,019,167 (Collateral--SLMA Zero
Coupon Notes, 7/16/98-9/17/98; UST Bond,
7.875%, 2/15/21; UST Note, 5.875%,
1/31/99; aggregate market value plus
accrued interest $122,401,052).......... 120,000,000
--------------
REPURCHASE AGREEMENT WITH DEUTSCHE BANK SECURITIES, INC.
135,000,000 5.98%, due 7/01/98, repurchase price
$135,022,425 (Collateral--FHLMC Zero
Coupon Note, 7/14/98; FHLMC Zero Coupon
Bond, 6/15/28; FNMA Bonds, including
Zero Coupon Bonds, 0.00%-13.12%,
8/25/21-3/15/24; UST Notes,
5.625%-6.25%, 8/31/00-2/28/01; aggregate
market value plus accrued interest
$138,307,513)........................... 135,000,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
93
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
REPURCHASE AGREEMENTS (CONTINUED)
<C> <S> <C>
REPURCHASE AGREEMENT WITH GOLDMAN, SACHS & CO.
$125,000,000 5.90% due 7/01/98, repurchase price
$125,020,486 (Collateral--African
Development Bank Bonds, 8.50%-9.35%,
7/01/00-5/02/01; FFCB Bonds,
5.00%-6.45%, 11/08/99-10/07/09; FHLB
Bonds, 5.01%-7.02%, 7/29/98-3/27/08;
FHLMC Bonds, 5.89%-8.625%,
7/13/98-3/26/12; FNMA Notes,
4.875%-8.90%; InterAmerican Development
Bank Notes/Bonds, 8.40%-9.45%,
9/15/98-9/01/09; Financing Corp., 8.60%,
9/26/19; International Bank for
Reconstruction and Development Bond,
5.25%, 9/16/03; Tennessee Valley
Authority Dev. Bonds, 6.00%-7.25%,
3/15/13-7/15/43; aggregate market value
plus accrued interest $127,500,605)..... $ 125,000,000
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
<C> <S> <C>
REPURCHASE AGREEMENTS (CONTINUED)
REPURCHASE AGREEMENT WITH J.P. MORGAN SECURITIES, INC.
$135,000,000 6.00%, due 7/01/98, repurchase price
$135,022,500 (Collateral--FHLB Bond,
5.83%, 6/08/05; FNMA Zero Coupon Note,
7/24/98; InterAmerican Development Bank
Bond, 7.00%, 6/15/25; International Bank
for Reconstruction and Development
Bonds, 8.50%-8.875%, 3/01/26-11/30/29;
International Finance Corp., 5.07%,
4/20/03; Resolution Funding Corp. Zero
Coupon Bond, 10/15/17; aggregate market
value plus accrued interest
$137,700,777)........................... $ 135,000,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
94
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ --------------
REPURCHASE AGREEMENTS (CONTINUED)
<C> <S> <C>
REPURCHASE AGREEMENT WITH
SMITH BARNEY, INC.
$135,000,000 6.05%, due 7/01/98, repurchase price
$135,022,688 (Collateral--FFCB Bonds,
7.31%-9.55%, 4/25/05-5/09/05; FHLB Zero
Coupon Discount Note, 7/01/98; FHLB
Bonds, 5.61%-7.25%, 4/09/99-6/30/23;
FHLMC Bonds, 6.11%-6.13%,
10/07/02-2/18/03; FNMA Notes, including
Zero Coupon Bonds, 0.00%-8.28%,
7/27/98-1/10/25; Tennessee Valley
Authority Development Bond, 8.25%,
9/15/34; aggregate market value plus
accrued interest $137,700,843).......... $ 135,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(Cost $650,000,000)..................... 650,000,000
--------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
VALUE
--------------
<C> <S> <C>
TOTAL INVESTMENTS
(Cost $1,962,733,614)(a)-- 100.0%....... $1,962,733,614
Other assets less liabilities--0.0%..... (576,182)
--------------
NET ASSETS--100.0%...................... $1,962,157,432
--------------
--------------
</TABLE>
FFCB FEDERAL FARM CREDIT BANK.
FHLB FEDERAL HOME LOAN BANK.
FHLMC FEDERAL HOME LOAN MORTGAGE CORPORATION.
FNMA FEDERAL NATIONAL MORTGAGE ASSOCIATION.
SLMA STUDENT LOAN MARKETING ASSOCIATION.
UST UNITED STATES TREASURY.
+ COUPON RATE REPRESENTS YIELD AT TIME OF PURCHASE FOR COMMERCIAL PAPER, AND
INTEREST RATE IN EFFECT AT JUNE 30, 1998 FOR FLOATING RATE NOTES.
(a) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES.
SEE NOTES TO FINANCIAL STATEMENTS.
95
<PAGE>
BNY HAMILTON MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value, including repurchase
agreements of $650,000,000 (Identified cost
$1,962,733,614)......................................... $1,962,733,614
Cash...................................................... 801
Interest receivable....................................... 7,375,172
Other assets.............................................. 131,783
--------------
TOTAL ASSETS.......................................... 1,970,241,370
--------------
LIABILITIES:
Payables:
Dividends............................................... 7,488,499
Services provided by The Bank of New York and
Administrator......................................... 496,312
Accrued expenses and other liabilities.................... 99,127
--------------
TOTAL LIABILITIES..................................... 8,083,938
--------------
NET ASSETS:................................................. $1,962,157,432
--------------
--------------
SOURCES OF NET ASSETS:......................................
Capital stock @ par....................................... $ 1,962,157
Capital surplus........................................... 1,960,195,275
--------------
NET ASSETS.................................................. $1,962,157,432
--------------
--------------
HAMILTON SHARES:
Net assets................................................ $1,100,625,707
--------------
--------------
Shares outstanding........................................ 1,100,625,707
--------------
--------------
Net asset value, offering price and repurchase price per
share................................................... $ 1.00
--------------
--------------
HAMILTON PREMIER SHARES:
Net assets................................................ $ 844,062,066
--------------
--------------
Shares outstanding........................................ 844,062,066
--------------
--------------
Net asset value, offering price and repurchase price per
share................................................... $ 1.00
--------------
--------------
HAMILTON CLASSIC SHARES:
Net assets................................................ $ 17,469,659
--------------
--------------
Shares outstanding........................................ 17,469,659
--------------
--------------
Net asset value, offering price and repurchase price per
share................................................... $ 1.00
--------------
--------------
Hamilton Shares authorized @ $.001 par value................ 3,000,000,000
Hamilton Premier Shares authorized @ $.001 par value........ 3,000,000,000
Hamilton Classic Shares authorized @ $.001 par value........ 3,000,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................. $47,801,886
-----------
EXPENSES:
Advisory.................................................. 848,143
Administration............................................ 848,143
12b-1 fee--Hamilton Classic Shares........................ 22,644
Servicing fee: Hamilton Premier Shares.................... 951,339
Hamilton Classic Shares....................... 22,644
Registration and filings.................................. 114,733
Custodian................................................. 82,536
Reports to shareholders................................... 68,225
Transfer agent............................................ 65,241
Audit..................................................... 38,630
Accounting services....................................... 29,746
Cash management........................................... 25,642
Insurance................................................. 23,329
Legal..................................................... 15,160
Directors................................................. 3,879
Other..................................................... 82,920
-----------
TOTAL EXPENSES.......................................... 3,242,954
Earnings credit adjustment (Note 3)....................... (1,394)
-----------
NET EXPENSES............................................ 3,241,560
-----------
NET INVESTMENT INCOME................................... $44,560,326
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
96
<PAGE>
BNY HAMILTON MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1998 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1997
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 44,560,326 $ 71,340,420
------------------ -------------------
Net increase in net assets resulting from operations................ 44,560,326 71,340,420
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income: Hamilton Shares............... (24,666,789) (42,331,939)
Hamilton Premier Shares........... (19,473,921) (28,179,930)
Hamilton Classic Shares........... (433,278) (801,227)
------------------ -------------------
(44,573,988) (71,313,096)
------------------ -------------------
Distributions from capital gains: Hamilton Shares................... -0- (8,151)
Hamilton Premier Shares.................. -0- (5,383)
Hamilton Classic Shares.................. -0- (128)
------------------ -------------------
-0- (13,662)
------------------ -------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Hamilton Shares................... 1,562,246,327 3,379,741,425
Hamilton Premier Shares................. 4,233,850,981 5,351,767,320
Hamilton Classic Shares................. 33,656,841 27,744,272
Proceeds from shares issued on reinvestment
of dividends: Hamilton Shares..................................... 2,123,426 4,222,183
Hamilton Premier Shares................................ 11,129,740 14,839,743
Hamilton Classic Shares................................ 342,017 700,778
Cost of capital stock repurchased: Hamilton Shares.................. (1,527,314,574) (2,929,817,113)
Hamilton Premier Shares................ (4,089,252,518) (5,142,031,650)
Hamilton Classic Shares................ (33,253,584) (25,199,060)
------------------ -------------------
Increase in net assets resulting from capital stock
transactions.................................................... 193,528,656 681,967,898
------------------ -------------------
INCREASE IN NET ASSETS.......................................... 193,514,994 681,981,560
NET ASSETS:
Beginning of period................................................. 1,768,642,438 1,086,660,878
------------------ -------------------
End of period....................................................... $1,962,157,432 $ 1,768,642,438
------------------ -------------------
------------------ -------------------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Hamilton Shares........................................ 1,562,246,327 3,379,741,425
Hamilton Premier Shares................................... 4,233,850,981 5,351,767,320
Hamilton Classic Shares................................... 33,656,841 27,744,272
Shares issued on reinvestment of dividends: Hamilton Shares......... 2,123,426 4,222,183
Hamilton Premier Shares........ 11,129,740 14,839,743
Hamilton Classic Shares........ 342,017 700,778
Shares repurchased: Hamilton Shares................................. (1,527,314,574) (2,929,817,113)
Hamilton Premier Shares............................. (4,089,252,518) (5,142,031,650)
Hamilton Classic Shares............................. (33,253,584) (25,199,060)
------------------ -------------------
Net increase...................................................... 193,528,656 681,967,898
Shares outstanding, beginning of period............................. 1,768,628,776 1,086,660,878
------------------ -------------------
Shares outstanding, end of period................................... 1,962,157,432 1,768,628,776
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
97
<PAGE>
BNY HAMILTON MONEY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HAMILTON SHARES
---------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1998 ----------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- ------------ ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.027 0.053 0.052 0.057 0.040 0.030
-------------- ------------ ---------- ---------- ---------- ----------
DIVIDENDS
Dividends from net investment income.... (0.027) (0.053) (0.052) (0.057) (0.040) (0.030)
-------------- ------------ ---------- ---------- ---------- ----------
Net asset value at end of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- ------------ ---------- ---------- ---------- ----------
-------------- ------------ ---------- ---------- ---------- ----------
TOTAL RETURN:........................... 2.70%* 5.47% 5.30% 5.84% 4.02% 3.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $1,100,626 $ 1,063,579 $ 609,424 $ 604,053 $ 235,220 $ 307,395
Ratio to average net assets of:
Expenses net of waiver from The Bank
of New York......................... 0.26%** 0.25% 0.27% 0.26% 0.30% 0.27%
Expenses, prior to waiver from The
Bank of New York.................... 0.26%** 0.25% 0.27% 0.26% 0.32% 0.32%
Net investment income, net of waiver
from The Bank of New York........... 5.38%** 5.34% 5.17% 5.67% 3.92% 2.97%
</TABLE>
* NOT ANNUALIZED.
** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
98
<PAGE>
BNY HAMILTON MONEY FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HAMILTON PREMIER SHARES
-----------------------------------------------------------------------------
SIX MONTHS FOR THE PERIOD
ENDED YEAR ENDED DECEMBER 31, AUGUST 15, 1994*
JUNE 30, 1998 --------------------------------------- THROUGH
(UNAUDITED) 1997 1996 1995 DECEMBER 31, 1994
-------------- ----------- ----------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- ----------- ----------- ----------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.025 0.051 0.049 0.054 0.017
-------------- ----------- ----------- ----------- --------
DIVIDENDS
Dividends from net investment income.... (0.025) (0.051) (0.049) (0.054) (0.017)
-------------- ----------- ----------- ----------- --------
Net asset value at end of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- ----------- ----------- ----------- --------
-------------- ----------- ----------- ----------- --------
TOTAL RETURN:........................... 2.56%** 5.19% 5.03% 5.54% 1.69%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $844,062 $ 688,339 $ 463,759 $ 340,163 $107,799
Ratio to average net assets of:
Expenses.............................. 0.52%*** 0.51% 0.53% 0.54% 0.61%***
Net investment income................. 5.12%*** 5.09% 4.91% 5.40% 4.40%***
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
99
<PAGE>
BNY HAMILTON MONEY FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HAMILTON CLASSIC SHARES
-------------------------------------------------------------
SIX MONTHS YEAR ENDED FOR THE PERIOD
ENDED DECEMBER 31, DECEMBER 4, 1995*
JUNE 30, 1998 ----------------------- THROUGH
(UNAUDITED) 1997 1996 DECEMBER 31, 1995
-------------- ---------- ---------- ------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ---------- ---------- ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.024 0.047 0.046 0.004
------- ---------- ---------- ------
DIVIDENDS
Dividends from net investment income.... (0.024) (0.047) (0.046) (0.004)
------- ---------- ---------- ------
Net asset value at end of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ---------- ---------- ------
------- ---------- ---------- ------
TOTAL RETURN:........................... 2.40%** 4.80% 4.73% 0.40%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $17,470 $ 16,725 $ 13,478 $3,098
Ratio to average net assets of:
Expenses.............................. 0.85%*** 0.88% 0.82% 0.76%***
Net investment income................. 4.78%*** 4.71% 4.67% 5.18%***
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
100
<PAGE>
BNY HAMILTON TREASURY MONEY FUND
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ ------------
<C> <S> <C>
UNITED STATES GOVERNMENT OBLIGATIONS--14.9%
UNITED STATES TREASURY BILLS+--2.7%
$ 10,000,000 5.09%, 09/17/98......................... $ 9,889,717
10,000,000 5.00%, 10/08/98......................... 9,862,637
------------
19,752,354
------------
UNITED STATES TREASURY NOTES--12.2%
2,000,000 5.25%, 07/31/98......................... 1,999,417
2,000,000 5.88%, 08/15/98......................... 2,000,469
5,000,000 6.00%, 09/30/98......................... 5,006,292
2,000,000 5.88%, 10/31/98......................... 2,000,916
5,000,000 5.50%, 11/15/98......................... 4,998,557
5,000,000 5.13%, 11/30/98......................... 4,994,094
5,000,000 5.13%, 12/31/98......................... 4,991,413
6,000,000 6.38%, 01/15/99......................... 6,028,317
9,000,000 5.88%, 01/31/99......................... 9,018,519
7,000,000 5.00%, 02/15/99......................... 6,978,234
5,000,000 5.50%, 02/28/99......................... 5,000,973
3,000,000 6.25%, 03/31/99......................... 3,015,677
7,000,000 5.88%, 03/31/99......................... 7,020,420
4,000,000 7.00%, 04/15/99......................... 4,044,749
3,000,000 6.38%, 04/30/99......................... 3,018,576
8,000,000 6.38%, 05/15/99......................... 8,053,307
10,000,000 6.00%, 06/30/99......................... 10,044,726
------------
88,214,656
------------
TOTAL UNITED STATES GOVERNMENT
OBLIGATIONS--
(Cost $107,967,010)..................... 107,967,010
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ ------------
REPURCHASE AGREEMENTS-- 85.3%
<C> <S> <C>
REPURCHASE AGREEMENT WITH BARCLAYS CAPITAL, INC.
$130,000,000 5.80% due 7/01/98, repurchase price
$130,020,944 (Collateral-- UST Bond,
8.875%, 8/15/17; UST Notes,
5.625%-8.875%, 11/15/98-2/28/01;
aggregate market value plus accrued
interest $132,601,151).................. $130,000,000
------------
REPURCHASE AGREEMENT WITH DEUTSCHE BANK SECURITIES,
INC.
95,000,000 5.92%, due 7/01/98, repurchase price
$95,015,622 (Collateral-- UST Bonds,
7.50%-14.00%, 11/15/11-11/15/16; UST
Note, 6.375%, 7/15/99; aggregate market
value plus accrued interest
$96,900,952)............................ 95,000,000
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
101
<PAGE>
BNY HAMILTON TREASURY MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ ------------
REPURCHASE AGREEMENTS (CONTINUED)
<C> <S> <C>
REPURCHASE AGREEMENT WITH GOLDMAN, SACHS & CO.
$133,457,000 5.80% due 7/01/98, repurchase price
$133,478,501 (Collateral-- UST Note,
5.625%, 5/15/08; market value plus
accrued interest $136,126,427).......... $133,457,000
------------
REPURCHASE AGREEMENT WITH J.P. MORGAN SECURITIES, INC.
130,000,000 5.80%, due 7/01/98, repurchase price
$130,020,944 (Collateral-- UST Bond,
6.25%, 8/15/23; UST Notes, 5.75%-6.25%,
1/31/02-10/31/02; aggregate market value
plus accrued interest $132,600,203)..... 130,000,000
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ ------------
<C> <S> <C>
REPURCHASE AGREEMENTS (CONTINUED)
REPURCHASE AGREEMENT WITH MORGAN STANLEY & CO.
$130,000,000 5.75%, due 7/01/98, repurchase price
$130,020,764 (Collateral UST Bill,
11/27/98; UST Bonds, 6.50%-11.625%,
11/15/98-2/15/27; UST Notes,
5.50%-7.875%, 8/31/98-2/15/07; aggregate
market value plus accrued interest
$133,182,785)........................... $130,000,000
------------
TOTAL REPURCHASE AGREEMENTS--
(Cost $618,457,000)..................... 618,457,000
------------
</TABLE>
<TABLE>
<C> <S> <C>
TOTAL INVESTMENTS--
(Cost $726,424,010)(a)-- 100.2%......... 726,424,010
Other assets less liabilities--(0.2)%... (1,479,441)
------------
NET ASSETS--100.0%...................... $724,944,569
------------
------------
</TABLE>
UST UNITED STATES TREASURY.
+ COUPON RATE REPRESENTS DISCOUNTED RATE AT TIME OF PURCHASE FOR UNITED
STATES TREASURY BILLS.
(a) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES.
SEE NOTES TO FINANCIAL STATEMENTS.
102
<PAGE>
BNY HAMILTON TREASURY MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value, including repurchase
agreements of $618,457,000 (Identified cost
$726,424,010)........................................... $ 726,424,010
Cash...................................................... 183
Interest receivable....................................... 1,482,235
Deferred organization costs and other assets.............. 37,165
--------------
TOTAL ASSETS.......................................... 727,943,593
--------------
LIABILITIES:
Payables:
Dividends............................................... 2,641,117
Services provided by The Bank of New York and
Administrator......................................... 176,241
Accrued expenses and other liabilities.................... 181,666
--------------
TOTAL LIABILITIES..................................... 2,999,024
--------------
NET ASSETS:................................................. $ 724,944,569
--------------
--------------
SOURCES OF NET ASSETS:
Capital stock @ par....................................... $ 724,945
Capital surplus........................................... 724,220,307
Accumulated net realized loss on investments.............. (683)
--------------
NET ASSETS.................................................. $ 724,944,569
--------------
--------------
HAMILTON SHARES:
Net assets................................................ $ 251,088,501
--------------
--------------
Shares outstanding........................................ 251,088,585
--------------
--------------
Net asset value, offering price and repurchase price per
share................................................... $ 1.00
--------------
--------------
HAMILTON PREMIER SHARES:
Net assets................................................ $ 473,856,068
--------------
--------------
Shares outstanding........................................ 473,856,667
--------------
--------------
Net asset value, offering price and repurchase price per
share................................................... $ 1.00
--------------
--------------
Hamilton Shares authorized @ $.001 par value................ 2,000,000,000
Hamilton Premier Shares authorized @ $.001 par value........ 2,000,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................. $11,105,311
-----------
EXPENSES:
Advisory.................................................. 200,140
Administration............................................ 200,140
Servicing fee: Hamilton Premier Shares.................... 312,372
Registration and filings.................................. 58,410
Custodian................................................. 32,729
Accounting services....................................... 29,753
Transfer agent............................................ 17,127
Audit..................................................... 5,718
Directors................................................. 3,781
Organization.............................................. 3,206
Reports to shareholders................................... 3,143
Legal..................................................... 2,549
Cash management........................................... 2,218
Insurance................................................. 2,168
Other..................................................... 3,108
-----------
TOTAL EXPENSES.......................................... 876,562
Fees waived by the Bank of New York....................... (48,202)
Earnings credit adjustment (Note 3)....................... (2,079)
-----------
NET EXPENSES............................................ 826,281
-----------
NET INVESTMENT INCOME................................... $10,279,030
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
103
<PAGE>
BNY HAMILTON TREASURY MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
APRIL 1, 1997*
SIX MONTHS ENDED THROUGH
JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997
---------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................... $ 10,279,030 $ 4,641,946
Net realized loss on investments.................................... -0- (683)
---------------- --------------
Net increase in net assets resulting from operations.............. 10,279,030 4,641,263
---------------- --------------
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income: Hamilton Shares............... (3,981,679) (1,347,411)
Hamilton Premier Shares.......... (6,297,351) (3,294,535)
---------------- --------------
(10,279,030) (4,641,946)
---------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Hamilton Shares................... 437,423,844 213,597,568
Hamilton Premier Shares................ 1,414,127,233 880,125,419
Proceeds from shares issued on reinvestment
of dividends: Hamilton Shares..................................... 1,246,199 1,096,720
Hamilton Premier Shares............................... 2,287,727 1,695,732
Cost of capital stock repurchased: Hamilton Shares.................. (298,300,939) (103,974,807)
Hamilton Premier Shares............... (1,126,453,432) (697,926,012)
---------------- --------------
Increase in net assets resulting from capital stock
transactions.................................................... 430,330,632 294,614,620
---------------- --------------
INCREASE IN NET ASSETS.......................................... 430,330,632 294,613,937
NET ASSETS:
Beginning of period................................................. 294,613,937 -0-
---------------- --------------
End of period....................................................... $ 724,944,569 $ 294,613,937
---------------- --------------
---------------- --------------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Hamilton Shares........................................ 437,423,844 213,597,568
Hamilton Premier Shares................................... 1,414,127,233 880,125,419
Shares issued on reinvestment of dividends: Hamilton Shares......... 1,246,199 1,096,720
Hamilton Premier Shares....... 2,287,727 1,695,732
Shares repurchased: Hamilton Shares................................. (298,300,939) (103,974,807)
Hamilton Premier Shares............................ (1,126,453,432) (697,926,012)
---------------- --------------
Net increase...................................................... 430,330,632 294,614,620
Shares outstanding, beginning of period............................. 294,614,620 -0-
---------------- --------------
Shares outstanding, end of period................................... 724,945,252 294,614,620
---------------- --------------
---------------- --------------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
104
<PAGE>
BNY HAMILTON TREASURY MONEY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HAMILTON SHARES HAMILTON PREMIER SHARES
------------------------------------ ------------------------------------
SIX MONTHS FOR THE PERIOD SIX MONTHS FOR THE PERIOD
ENDED APRIL 1, 1997* ENDED APRIL 1, 1997*
JUNE 30, 1998 THROUGH JUNE 30, 1998 THROUGH
(UNAUDITED) DECEMBER 31, 1997 (UNAUDITED) DECEMBER 31, 1997
-------------- ------------------- -------------- -------------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- -------- -------------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.026 0.040 0.025 0.038
-------------- -------- -------------- --------
DIVIDENDS
Dividends from net investment income.... (0.026) (0.040) (0.025) (0.038)
-------------- -------- -------------- --------
Net asset value at end of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------------- -------- -------------- --------
-------------- -------- -------------- --------
TOTAL RETURN:........................... 2.65%** 4.02%** 2.53%** 3.83%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $251,089 $110,719 $473,856 $183,895
Ratio to average net assets of:
Expenses, net of waiver from The Bank
of New York......................... 0.26%*** 0.25%*** 0.51%*** 0.50%***
Expenses, prior to waiver from The
Bank of New York.................... 0.29%*** 0.33%*** 0.53%*** 0.56%***
Net investment income, net of waiver
from The Bank of New York........... 5.30%*** 5.29%*** 5.04%*** 5.06%***
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
105
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION AND BUSINESS
BNY Hamilton Funds, Inc. (the "Company") was organized as a Maryland
Corporation on May 1, 1992 and is registered under the Investment Company Act of
1940 as an open-end management investment company. The Company currently
consists of ten series: BNY Hamilton Equity Income Fund (the "Equity Income
Fund"), BNY Hamilton Large Cap Growth Fund (the "Large Cap Growth Fund"), BNY
Hamilton Small Cap Growth Fund (the "Small Cap Growth Fund"), BNY Hamilton
International Equity Fund (the "International Equity Fund"), BNY Hamilton
Intermediate Government Fund (the "Intermediate Government Fund"), BNY Hamilton
Intermediate Investment Grade Fund (the "Intermediate Investment Grade Fund"),
BNY Hamilton Intermediate New York Tax-Exempt Fund (the "Intermediate New York
Tax-Exempt Fund"), BNY Hamilton Intermediate Tax-Exempt Fund (the "Intermediate
Tax-Exempt Fund"), BNY Hamilton Money Fund (the "Money Fund"), and BNY Hamilton
Treasury Money Fund (the "Treasury Money Fund") (individually, a "Fund" and
collectively, the "Funds"). All the Funds (except the Money Fund and Treasury
Money Fund) consist of two classes of shares: Institutional Shares and Investor
Shares. The Money Fund consists of three classes of shares: Hamilton Shares,
Hamilton Premier Shares, and Hamilton Classic Shares. The Treasury Money Fund
consists of two classes of shares: Hamilton Shares and Hamilton Premier Shares.
On April 1, 1997, the Equity Income Fund, Large Cap Growth Fund, Small Cap
Growth Fund, Intermediate Investment Grade Fund and Intermediate Tax-Exempt Fund
commenced operations of their respective Institutional Class of Shares as the
result of a conversion of common and collective trust funds managed by the The
Bank of New York. The following chart summarizes pertinent data related to each
Fund on the date of the conversion:
<TABLE>
<CAPTION>
EQUITY LARGE CAP
INCOME GROWTH
FUND FUND
------------- -------------
<S> <C> <C>
Shares issued................. 18,189,661 28,808,732
Net assets.................... $ 258,475,076 $ 288,087,324
Net asset value per share..... $ 14.21 $ 10.00
Unrealized appreciation of
converted Funds.............. $ 49,514,077 $ 101,357,786
<CAPTION>
INTERMEDIATE
SMALL CAP INVESTMENT
GROWTH GRADE
FUND FUND
------------- -------------
<S> <C> <C>
Shares issued................. 8,453,791 34,378,123
Net assets.................... $ 84,537,911 $ 343,781,232
Net asset value per share..... $ 10.00 $ 10.00
Unrealized appreciation
(depreciation) of converted
Funds........................ $ 9,660,997 $ (6,426,484)
<CAPTION>
INTERMEDIATE
TAX-EXEMPT
FUND
-------------
<S> <C> <C>
Shares issued................. 25,934,046
Net assets.................... $ 259,340,465
Net asset value per share..... $ 10.00
Unrealized appreciation of
converted Fund............... $ 8,399,206
</TABLE>
On July 1, 1997, an additional conversion of common and collective trust funds
managed by The Bank of New York resulted in an increase in Institutional Shares
of the Large Cap Growth Fund, Intermediate Investment Grade Fund, and
Intermediate
106
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Tax-Exempt Fund. The following chart summarizes the pertinent data related to
the July 1, 1997 conversion:
<TABLE>
<CAPTION>
INTERMEDIATE
LARGE CAP INVESTMENT
GROWTH GRADE
FUND FUND
------------- -------------
<S> <C> <C>
Shares issued................. 4,510,593 2,674,998
Net assets.................... $ 53,224,997 $ 27,204,728
Net asset value per share..... $ 11.80 $ 10.17
Unrealized appreciation
(depreciation) of converted
Funds........................ $ 32,319,863 $ (19,615)
<CAPTION>
INTERMEDIATE
TAX-EXEMPT
FUND
-------------
<S> <C> <C>
Shares issued................. 360,366
Net assets.................... $ 3,643,301
Net asset value per share..... $ 10.11
Unrealized appreciation of
converted Fund............... $ 70,239
</TABLE>
For financial reporting purposes, the increase in net assets resulting from
these two conversions, including the unrealized appreciation (depreciation) is
reflected as proceeds from capital stock sold--Institutional Shares in each
Fund's Statement of Changes in Net Assets.
In addition, on April 1, 1997, the Equity Income Fund, Intermediate Government
Fund, and Intermediate New York Tax-Exempt Fund transferred shares from their
respective Investor Class of Shares to their respective Institutional Class of
Shares as follows:
<TABLE>
<CAPTION>
EQUITY INTERMEDIATE
INCOME GOVERNMENT
FUND FUND
------------- -------------
<S> <C> <C>
Shares converted.............. 14,210,212 5,760,887
Dollar amount of conversion... $ 201,927,107 $ 54,901,254
<CAPTION>
INTERMEDIATE
NEW YORK
TAX-EXEMPT
FUND
-------------
<S> <C> <C>
Shares converted.............. 2,610,884
Dollar amount of conversion... $ 26,526,577
</TABLE>
The shares and dollar amounts for each Fund relating to this transfer are
included as an increase to Shares Sold--Institutional Shares and proceeds from
capital stock sold-- Institutional Shares and an increase to Shares
Repurchased--Investor Shares and cost of capital stock repurchased--Investor
Shares on each Fund's respective Statement of Changes in Net Assets for the year
ended December 31, 1997.
2. SIGNIFICANT ACCOUNTING POLICIES
(A) SECURITY VALUATIONS
Securities listed on a domestic securities exchange, including options on
stock indexes, are valued based on the last sale price as of the close of
regular trading hours on the New York Stock Exchange or, in the absence of
recorded sales, at the average of readily available closing bid and asked prices
on such exchange. Security listed on a foreign exchange are valued at the last
quoted sale price available before the time when net assets are valued. Unlisted
securities traded only on the over-the-counter market are valued at the average
of the quoted bid and the asked prices over-the-counter market.
The market value of a written call option or a purchased put option is the
last reported sale price on the principal exchange on which such option is
traded or, if no sales are reported, the average between the last reported bid
and asked prices.
107
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The determination of the value of certain portfolio debt securities, other
than temporary investments in short-term securities, take into account various
factors affecting market value, including yields and prices of comparable
securities, indications as to value from dealers and general market conditions.
Securities included in the Money Fund and Treasury Money Fund, and short-term
securities with a remaining maturity of 60 days or less in all other Funds are
valued at amortized cost which approximates fair value. This method values a
security at its cost at the time of purchase and thereafter assumes a constant
rate of amortization to maturity of any discount or premium.
Securities for which market quotations are not readily available, including
investments that are subject to limitations as to their sale (such as certain
restricted securities and illiquid securities), are valued at fair value as
determined in good faith by the Board of Directors. In determining fair value,
consideration is given to cost, operating and other financial data.
(B) CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies are translated into
U.S. dollars at the mean of the bid and asked price of respective exchange rate
on the last day of the period. Purchases and sales of investments denominated in
foreign currencies are translated at the exchange rate on the date of the
transaction.
Foreign exchange gain or loss resulting from the sale of an investment,
holding of a foreign currency, expiration of a foreign currency exchange
contract, difference in exchange rates between the trade date and settlement
date of an investment purchased or sold, and the difference between dividends
actually received compared to the amount shown in a Fund's accounting records on
the date of receipt are shown as net realized gains or losses in the respective
Fund's statement of operations.
Foreign exchange gain or loss on assets and liabilities other than investments
currently shown on the respective Fund's statement of assets and liabilities are
shown as unrealized appreciation (depreciation) on foreign currency
transactions.
(C) REPURCHASE AGREEMENTS
A Fund's custodian or designated sub-custodians, as the case may by under
tri-party repurchase agreements, takes possession of the collateral pledged for
investments in repurchase agreements. The underlying collateral is valued daily
on a mark-to-market basis to ensure that the value, including accrued interest,
is at least equal to the repurchase price. In the event of default of the
obligation to repurchase, a Fund has the right to liquidate the collateral and
apply the proceeds in satisfaction of the obligations. Under certain
circumstances, in the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral may be subject to
legal proceedings.
(D) WRITTEN OPTIONS AND PURCHASED OPTIONS
All Funds (except the Money Fund and the Treasury Money Fund) may enter into
an option contracts for the purpose of either hedging its exposure to the market
fluctuations of the portfolio, or an individual security position. The nature
and risks associated with these securities are explained further in
108
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
the Prospectus and Statement of Additional Information.
When a Fund writes a call option, it will receive a premium. Premiums received
are recorded as liabilities and adjusted to current market value daily. When a
put option is purchased, the Fund will pay a premium. Premiums paid for put
options are included as investments and are also adjusted to their current
market value daily.
If a written call expires, the premium received by the Fund will be treated as
a short term capital gain. Likewise, premiums paid for purchased put options
that expire unexercised will be treated as short term capital losses. In
addition, short term capital gains or losses may be realized on exercised
written calls or purchased puts depending on the premiums received or paid and
the strike price of the underlying securities.
As a writer of call options, a Fund does not have control over exercising of
such options. As a result, that Fund bears unlimited market risk of favorable
changes in the value of the call option's underlying securities. The Fund also
bears unlimited market risk in the value of the written call option itself.
If an option which a Fund has purchased expires on its stipulated expiration
date, it realizes a loss in the amount of the cost of the option. If it enters
into a closing transaction, it realizes a gain or loss, depending on whether the
proceeds from the sale are greater or less than the cost of the option. If the
Fund exercises a put option, it realizes a gain or loss from the sale of the
underlying security and the proceeds from such sale will be decreased by the
premium originally paid. If a Fund exercises a call option, the cost of the
security which it purchases upon exercise will be increased by the premium
originally paid.
(E) FEDERAL INCOME TAXES
Each Fund is created as a separate entity for federal income tax purposes. The
Funds' policy is to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and distribute all of the taxable
and tax-exempt income to the shareholders within the allowable time limits.
Therefore, no federal income tax provision is required.
(F) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
The Intermediate Government Fund, the Intermediate Investment Grade Fund, the
Intermediate New York Tax-Exempt Fund, the Intermediate Tax-Exempt Fund, the
Money Fund and the Treasury Money Fund declare dividends daily and pay dividends
monthly. The Equity Income Fund and the Large Cap Growth Fund declare and pay
dividends monthly. The Small Cap Growth Fund and the International Equity Fund
declare and pay dividends annually, provided that there is net investment income
at the end of the fiscal year.
(G) SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are recorded on the trade date. Realized gains and
losses on security transactions are determined using the identified cost method.
Dividend income is recognized on the ex-dividend date and interest income is
accrued daily. Discounts on securities purchased for all Funds, except for the
Intermediate New York Tax-Exempt
109
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Fund and the Intermediate Tax-Exempt Fund, and premiums on securities purchased
for the Intermediate New York Tax-Exempt Fund, the Intermediate Tax-Exempt Fund,
the Money Fund, and the Treasury Money Fund are amortized.
(H) FINANCIAL STATEMENTS PREPARATION
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 at the date of the
financial statements and the reported amounts of revenues and expenses for the
period. Actual results could differ from those estimates.
(I) ORGANIZATION COSTS
Costs incurred in connection with the organization and initial registration of
the Large Cap Growth Fund, Small Cap Growth Fund, International Equity Fund,
Intermediate Investment Grade Fund, Intermediate Tax-Exempt Fund and Treasury
Money Fund are being amortized evenly over the period of benefit not to exceed
60 months from the date upon which those Funds commenced investment operations.
3. ADVISORY, ADMINISTRATION AND OTHER TRANSACTIONS WITH AFFILIATES
The Bank of New York acts as the Funds' investment adviser (the "Adviser").
The Adviser manages the investments of the Funds and is responsible for all
purchases and sales of the Funds' portfolio securities. The Adviser's fee
accrues daily and is payable monthly at the following annual rates:
<TABLE>
<CAPTION>
% OF AVERAGE
DAILY NET
ASSETS
-------------
<S> <C>
Equity Income Fund............ .60%
Large Cap Growth Fund......... .60%
Small Cap Growth Fund......... .75%
International Equity Fund..... .425%
Intermediate Government
Fund........................ .50%
Intermediate Investment Grade
Fund........................ .50%
Intermediate New York Tax-
Exempt Fund................. .50%
Intermediate Tax-Exempt
Fund........................ .50%
Money Fund.................... .10%
Treasury Money Fund........... .10%
</TABLE>
The International Equity Fund is also sub-advised by Indocam, formerly
Indosuez International Investment Services (the "Sub-Adviser"), a subsidiary of
Banque Indosuez. The Sub-Adviser's fee accrues daily and is payable monthly at
the rate of .425% of average daily net assets of the International Equity Fund.
BNY Hamilton Distributors, Inc. (a wholly-owned subsidiary of The BISYS Group,
Inc.) acts as the Funds' administrator (the "Administrator") and will assist
generally in supervising the operations of the Funds.
The Administrator has agreed to provide facilities, equipment and personnel to
carry out administrative services for the Funds, including, among other things,
providing the services of persons who may be appointed as officers and directors
of the Funds, monitoring the custodian, fund accounting, transfer agency,
administration, distribution, advisory and legal services that are provided to
the Funds.
110
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The Administrator's fee is accrued daily and is payable monthly computed
utilizing the following annual rates:
<TABLE>
<CAPTION>
% OF AVERAGE
DAILY NET
ASSETS
-------------
<S> <C>
Equity Income Fund............ .20%
Large Cap Growth Fund......... .20%
Small Cap Growth Fund......... .20%
International Equity Fund..... .20%
Intermediate Government
Fund........................ .20%
Intermediate Investment Grade
Fund........................ .20%
Intermediate New York Tax-
Exempt Fund................. .20%
Intermediate Tax-Exempt
Fund........................ .20%
Money Fund.................... .10%
Treasury Money Fund........... .10%
</TABLE>
In addition to acting as Administrator, BNY Hamilton Distributors, Inc. is the
principal underwriter and distributor of shares of the Funds.
The Bank of New York serves as the Funds' custodian ("Custodian"). Each Fund
maintains a compensating balance arrangement with the Custodian, whereby a Fund
would have its respective custody fees reduced by income earned on cash balances
maintained with the Custodian. The income earned on cash balances by each Fund
for the six months ended June 30, 1998 is shown on its respective Statement of
Operations under the caption "Earnings Credit Adjustment." For the six months
ended June 30, 1998, the Intermediate New York Tax-Exempt Fund did not earn any
such monies.
As of June 30, 1998, the Bank of New York has voluntarily agreed to
assume/waive expenses for certain Funds to the extent that each Fund's expense
ratio exceeded the percentage of average daily net assets as shown below:
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR
SHARES SHARES
------------- -------------
<S> <C> <C>
Large Cap Growth Fund......... .82% 1.07%
Small Cap Growth Fund......... .97% 1.22%
International Equity Fund..... 1.27% 1.52%
Intermediate Government Fund.. .90% 1.15%
Intermediate Investment Grade
Fund........................ .90% 1.15%
Intermediate New York Tax-
Exempt Fund................. .90% 1.15%
Intermediate Tax-Exempt Fund.. .90% 1.15%
</TABLE>
The Treasury Money Fund had various limitations for each class of shares
throughout the period. Effective July 1, 1998, the waivers for both classes in
the Treasury Money Fund were discontinued.
Management reserves the right to implement or discontinue expense limitations
at any time.
The Company has adopted a distribution plan (the "12b-1 Plans") with respect
to each Fund (except for the Treasury Money Fund). Under the 12b-1 Plans, the
Funds will pay the Distributor for distribution expenses
111
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
incurred in connection with sales of shares as outlined in the following chart:
<TABLE>
<CAPTION>
DATE OF
IMPLEMENTATION OF
NAME OF FUND CLASS 12B-1 PLAN
- ------------------------------ ----------------- -----------------
<S> <C> <C>
Equity Income Fund............ Investor April 1, 1997
Large Cap Growth Fund......... Investor May 1, 1997
Small Cap Growth Fund......... Investor May 1, 1997
International Equity Fund..... Investor May 1, 1997
Intermediate Government
Fund........................ Investor April 1, 1997
Intermediate Investment Grade
Fund........................ Investor May 1, 1997
Intermediate New York
Tax-Exempt Fund............. Investor April 1, 1997
Intermediate
Tax-Exempt Fund............. Investor May 1, 1997
Money Fund.................... Hamilton Classic December 4, 1995
</TABLE>
Payments for distribution expenses may not exceed .25% of the average daily
net assets of each class noted in the chart above.
BNY Hamilton Funds, Inc. has adopted a shareholder servicing plan for the
Money Fund and the Treasury Money Fund, pursuant to which, Hamilton Premier
Shares and Hamilton Classic Shares of the Money Fund and Hamilton Premier Shares
of the Treasury Money Fund are sold to certain institutions that enter into
servicing agreements with the Company. The Bank of New York and the
Administrator (the "Shareholder Servicing Agents") have each entered into
Shareholder Service Agreements with respect to these Shares. The Shareholder
Servicing Agents will perform shareholder support services. Pursuant to the
Shareholder Service Agreements, Hamilton Premier Shares and Hamilton Classic
Shares of the Money Fund and Hamilton Premier Shares of the Treasury Money Fund
will pay the Shareholder Servicing Agents an annual shareholder servicing fee,
accrued daily and payable monthly, of .25% of the Shares' respective average
daily net assets. The shareholder servicing plan does not cover, and the fees
thereunder are not payable to, Shareholder Organizations with respect to
Hamilton Shares of the Money Fund and the Treasury Money Fund.
4. PORTFOLIO SECURITIES
For the six months ended June 30, 1998, the cost of securities purchased and
the proceeds from sales of securities, excluding short-term securities, were as
follows:
<TABLE>
<CAPTION>
EQUITY INCOME FUND
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ -- $ --
All Others............. 107,927,890 136,661,925
<CAPTION>
LARGE CAP GROWTH FUND
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities $ -- $ --
All Others............. 33,579,071 40,253,744
<CAPTION>
SMALL CAP GROWTH FUND
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ -- $ --
All Others............. 112,522,662 73,426,390
<CAPTION>
INTERNATIONAL EQUITY FUND
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities $ -- $ --
All Others............. 82,696,001 35,021,726
<CAPTION>
INTERMEDIATE
GOVERNMENT FUND
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ 27,682,681 $ 28,606,453
All Others............. 562,604 635,768
</TABLE>
112
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
INTERMEDIATE INVESTMENT
GRADE FUND
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ 47,272,920 $ 42,319,750
All Others............. 107,941,473 91,513,733
<CAPTION>
INTERMEDIATE NEW YORK
TAX-EXEMPT FUND
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ -- $ --
All Others............. 6,643,823 7,216,407
<CAPTION>
INTERMEDIATE TAX-EXEMPT FUND
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ -- $ --
All Others............. 71,131,056 65,881,366
</TABLE>
5. FEDERAL INCOME TAXES
For federal income tax purposes, the Funds indicated below have capital loss
carryforwards as of December 31, 1997 which are available to offset future
capital gains, if any. Accordingly, no capital gains distribution is expected to
be paid to shareholders until net gains have been realized in excess of such
amounts.
<TABLE>
<CAPTION>
CAPITAL LOSS
CARRYFORWARD EXPIRATION
-------------- -------------
<S> <C> <C>
International Equity
Fund.................... $ 114,800 2005
Intermediate Goverment
Fund.................... 1,358,600 2002
681,600 2003
447,700 2004
390,800 2005
Intermediate New York
Tax-Exempt Fund......... 135,600 2002
75,600 2003
Treasury Money Fund....... 700 2005
</TABLE>
6. WRITTEN OPTION ACTIVITY
Transactions in written options for the six months ended June 30, 1998 were as
follows:
EQUITY INCOME FUND
<TABLE>
<CAPTION>
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
------------- ---------
<S> <C> <C>
Options outstanding at
December 31, 1997......... 500 $ 51,623
Options expired............. (500) (51,623)
------ ---------
Options outstanding at June
30, 1998.................. -0- $ -0-
------ ---------
------ ---------
</TABLE>
LARGE CAP GROWTH FUND
<TABLE>
<CAPTION>
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
------------- ---------
<S> <C> <C>
Options outstanding at
December 31, 1997......... 1,100 $ 197,324
Options written during the
period.................... 5,848 1,640,375
Options terminated in
closing purchase
transactions.............. (1,718) (932,269)
Options exercised........... (1,790) (404,329)
Options expired............. (3,140) (433,153)
------ ---------
Options outstanding at June
30, 1998.................. 300 $ 67,948
------ ---------
------ ---------
</TABLE>
7. RECLASSIFICATION OF CAPITAL ACCOUNTS
At December 31, 1997, reclassifications were made to the capital accounts of
the Equity Income, Large Cap Growth Fund, Small Cap Growth Fund, International
Equity Fund, Intermediate Government Fund, and Intermediate New York Tax-Exempt
Fund, respectively, to reflect permanent book/tax differences and income and
gains available for distributions under income tax regulations. Net investment
income, net realized gains,
113
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
and net assets were not affected by these changes.
8. GEOGRAPHIC CONCENTRATION
The International Equity Fund has a relatively large concentration of
portfolio securities invested in companies domiciled in the United Kingdom. The
International Equity Fund may be more susceptible to political, social and
economic events adversely affecting United Kingdom companies than funds not so
concentrated.
9. CONCENTRATION OF RISK
The Intermediate New York Tax-Exempt Fund invests substantially all of its
assets in a portfolio of tax-exempt debt obligations primarily consisting of
securities issued by the State of New York and its authorities, agencies,
municipalities and political sub-divisions. Also, the Intermediate Tax-Exempt
Fund invests 28.9% of its assets in debt obligations of the State of New York.
The issuers' ability to meet their obligations may be affected by New York's
political, social, economic, and/or regional developments.
114
<PAGE>
SUPPLEMENTAL PROXY INFORMATION
A Meeting of Stockholders of the Company was held on August 5, 1998. The
description of each proposal and results of the shareholder vote are as follows:
<TABLE>
<CAPTION>
SHARES SHARES
VOTED VOTED
FOR WITHHELD
------------------ ------------
<S> <C> <C>
PROPOSAL 1: To elect directors:
Edward L. Gardner.......................... 1,282,580,016 8,501,679
Peter Herrick.............................. 1,282,580,016 8,501,679
Leif H. Olsen.............................. 1,282,580,016 8,501,679
Karen Osar................................. 1,282,580,016 8,501,679
James E. Quinn............................. 1,282,580,016 8,501,679
Stephen Stamas............................. 1,282,580,016 8,501,679
</TABLE>
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED VOTED VOTED
FOR AGAINST ABSTAIN
------------------ -------------- ------------
<S> <C> <C> <C>
PROPOSAL 2: To ratify the selection of KPMG
Peat Marwick LLP as the Company's
independent accountants................... 1,262,360,643 22,068,745 6,652,307
</TABLE>
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED VOTED VOTED BROKER
FOR AGAINST ABSTAIN NON-VOTE
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
PROPOSAL 3: To eliminate an operating policy
of BNY Hamilton Money Fund (shareholders
of BNY Hamilton Money Fund only).......... 789,800,440 55,283,396 15,450,942 17,478,493
</TABLE>
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED VOTED VOTED BROKER
FOR AGAINST ABSTAIN NON-VOTE
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
PROPOSAL 4: To amend the investment objective
of BNY Hamilton Equity Income Fund
(shareholders of BNY Hamilton Equity
Income Fund only)......................... 31,864,340 91,660 94,009 29,819
</TABLE>
115
<PAGE>
DIRECTORS AND OFFICERS
Edward L. Gardner, Director and Chairman of the Board
Peter Herrick, Director
Leif H. Olsen, Director
Stephen Stamas, Director
James E. Quinn, Director
Karen Osar, Director
J. David Huber, Chief Executive Officer
William J. Tomko, President
Richard Baxt, Vice President
Michael A. Grunewald, Vice President
Nimish Bhatt, Treasurer
Ellen Stoutamire, Secretary
Alaina Metz, Assistant Secretary
INVESTMENT ADVISER
The Bank of New York
ADMINISTRATOR AND DISTRIBUTOR
BNY Hamilton Distributors, Inc.
TRANSFER AGENT
BISYS Fund Services, Ohio, Inc.
CUSTODIAN
The Bank of New York
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
LEGAL COUNSEL
Sullivan & Cromwell
116
