<PAGE>
ANNUAL REPORT
DECEMBER 31, 1997
[LOGO]
BNY HAMILTON FUNDS
- - BNY HAMILTON EQUITY
INCOME FUND
- - BNY HAMILTON LARGE
CAP GROWTH FUND
- - BNY HAMILTON SMALL
CAP GROWTH FUND
- - BNY HAMILTON
INTERNATIONAL
EQUITY FUND
- - BNY HAMILTON
INTERMEDIATE
GOVERNMENT FUND
- - BNY HAMILTON
INTERMEDIATE
INVESTMENT
GRADE FUND
- - BNY HAMILTON
INTERMEDIATE
NEW YORK
TAX-EXEMPT FUND
- - BNY HAMILTON
INTERMEDIATE
TAX-EXEMPT FUND
- - BNY HAMILTON
MONEY FUND
- - BNY HAMILTON
TREASURY
MONEY FUND
BNY HAMILTON FUNDS
<PAGE>
[PICTURE]
BNY HAMILTON DISTRIBUTORS, INC., IS THE FUNDS' DISTRIBUTOR AND IS UNAFFILIATED
WITH THE BANK OF NEW YORK, THE INVESTMENT ADVISER.
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus for Hamilton Shares of
BNY Hamilton Money Fund and BNY Hamilton Treasury Money Fund, Hamilton
Premier shares of BNY Hamilton Money Fund and BNY Hamilton Treasury Money
Fund, Hamilton Classic Shares of BNY Hamilton Money Fund, Equity Funds,
Taxable Fixed Income Funds or Tax-Exempt Fixed Income Funds
For additional prospectuses which contain more complete information, including
charges and expenses, call 1-800-426-9363. Please read the prospectus carefully
before investing or sending money.
INVESTMENTS IN THE FUNDS ARE NOT DEPOSITS, ARE NEITHER GUARANTEED BY NOR
OBLIGATIONS OF THE BANK OF NEW YORK AND ARE NOT INSURED BY THE FDIC OR ANY OTHER
GOVERNMENTAL AGENCY. INVESTMENTS IN MUTUAL FUNDS INVOLVE RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
<PAGE>
[LOGO] CHAIRMAN'S LETTER
Dear Shareholder:
We are pleased to provide you this 1997 Annual Report for the BNY Hamilton
Funds.
The past year was a period of significant growth and achievement for the BNY
Hamilton Funds. Total assets increased from $1.40 billion to $3.97 billion as we
expanded the number of Funds in our family from four to ten. Our three new
equity Funds - the BNY Hamilton Large Cap Growth, Small Cap Growth and
International Equity Funds - provide investors with access to a substantially
broader array of stock market opportunities here and abroad. Our new
Intermediate Investment Grade, Intermediate Tax-Exempt and Treasury Money Funds
similarly expand the array of fixed income opportunities open to our investors.
1997 was also a year of extraordinary performance for financial markets in the
U.S. and many other regions of the world. At the same time, however, the
unfolding of the financial crisis in Asia during the latter part of the year
served to remind investors of the benefits of diversification and the need to be
constantly alert to changing investment conditions. In the accompanying letters
and interviews, The Bank of New York investment professionals who manage the BNY
Hamilton Funds discuss their outlook and the strategies they are employing to
assure that the Funds continue to meet their stated investment goals in all
types of market environments.
Whether you own one or several BNY Hamilton Funds, I encourage you to read the
entire report for a better understanding of the risks and potential rewards
associated with investing in the Funds. Please contact your BNY Hamilton Funds
representative with any questions about the Funds and how they may help you meet
your financial goals. If you would like a prospectus on any of the Funds, please
call 1-800-4BNY-FND (1-800-426-9363). Please read the prospectus carefully
before you invest.
Thank you for the confidence you have placed in the BNY Hamilton Funds.
Sincerely,
/s/ Edward L. Gardner
Edward L. Gardner
Chairman of the Board
<PAGE>
[LOGO] INVESTMENT ADVISOR'S LETTER
Dear Shareholder:
We began 1997 convinced that investors had good reason to remain bullish. Even
after two years of outstanding gains, our judgment was that prospects for a
moderately expanding economy, minimal inflation and investor-friendly
developments in Washington, DC, would provide further room for both stocks and
bonds to advance. Our assessment proved correct, although we ultimately
underestimated the strength in both markets. In the end, the performance of U.S.
financial markets in 1997 delighted bulls, dismayed bears and amazed almost
everyone.
A POWERFUL BULL MARKET IN EQUITIES
Stocks posted better than 20 percent gains for a record third consecutive year.
Historically rich valuations and recurring fears that the Federal Reserve would
tighten credit (i.e., increase short-term interest rates) occasionally slowed
the pace of the charge, but not even the financial crisis in Southeast Asia and
Japan could bring it to a halt. Last year's strong gains lifted the compound
annual return for stocks so far in the 1990s from 14.4% to 16.6%.
These broad numbers, however, masked a dichotomy in the market.
Large-capitalization companies with very predictable earnings streams were the
main beneficiaries of continuing price-earnings (P/E) expansion (i.e., of
investors' willingness to pay higher prices today for earnings to be received in
the future). During the first four months and again in the final quarter, large,
high-quality stocks such as those included in the Standard & Poor's 500 were the
market's leaders. Many smaller companies, such as those found in the Russell
2000 Index, were left behind early in the year. They closed the gap considerably
between May and August, only to be outpaced again as investors fled to quality
in November and December after the October Asia-related jolt to the market.
A TELLING QUARTER
Through the first three quarters of 1997, the market thrived on nearly ideal
circumstances for investors as the economy expanded at a moderate pace without
rekindling inflation. The Federal Reserve remained on alert and ready to raise
interest rates on any evidence that inflationary pressures were emerging.
Growing confidence that inflation would remain subdued helped to foster a major
upward revaluation in stocks that pushed the Dow Jones Industrial Average past
8200 in August. Other catalysts included progress in Washington toward balancing
the federal budget, a continued expansion of corporate profits, and strong
demand for securities from individual investors and mutual funds.
In the final quarter, we discovered how much power this bull market really has.
Currency devaluations and infrastructure problems in Southeast Asia and Japan
impacted the markets there in the summer, then spooked equity markets around the
world in late October. U.S. stocks declined sharply for a few days, falling more
than 10% from their highs for the first time since 1990. However, the stock
market here at home quickly began to recover and ended the second half of the
year up more than 10%, as measured by the Standard & Poor's 500 Index.
GOOD NEWS FOR BONDS
The crisis in Asia provided a major boost to the U.S. bond market. After trading
in a relatively narrow range from January through August, the market took a turn
for the better as investors worldwide looked for safe, high-quality investments.
The sudden spike in demand for U.S. Treasury and other top-quality securities
pushed prices up and
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[LOGO]
yields down. For the full year, 90-day U.S. Treasury bills returned 5.5%, and
taxable bonds, as measured by the Lehman Brothers Government/Corporate Bond
Index, delivered a 9.8% return.
ANOTHER GOOD YEAR
In our view, economic fundamentals in the United States will continue to provide
a supportive framework for the financial markets in 1998. The turmoil in Asia is
very likely to put a damper on economic activity, but growth in the U.S. economy
should still be respectable, at approximately 2.5%. The situation in Asia will
actually help to keep inflation low. Finally, corporate profits should continue
to grow, albeit not as rapidly as in the past. The markets should continue to
reward those willing to assume incremental risk. Equities and long-term
fixed-income securities should outperform short-term fixed-income investments,
as they have in recent years.
More importantly, we see a structural change that bodes well for investors over
the long run. Simply put, a favorable shift in the relationship between supply
and demand for financial assets is very likely to keep this bull on its legs for
longer than most investors might expect.
On the demand side, the personal savings rate in the United States should begin
climbing from an all-time low as big-spending baby-boomers turn into big-time
savers. We expect this trend to draw strength from three sources. First, after
seven consecutive years of economic expansion, most pent-up demand has been
satisfied. Second, concerns about providing for retirement security are rising.
Third, investors expect that reduced rates of future inflation will help protect
the future purchasing power of funds put aside today.
Meanwhile, the supply of investments is shrinking. The imminent prospects for a
balanced federal budget indicate a smaller pool of Treasury issues in
circulation. On the stock side, share buyback programs and mergers-and-
acquisitions activity continue to run at record levels.
The interaction of these forces should help assure that the bull market of the
past few years does not run out of energy anytime soon.
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............... 21
Statement of Assets and Liabilities... 26
Statement of Operations............... 26
Statements of Changes in Net Assets... 27
Financial Highlights.................. 28
BNY Hamilton Large Cap Growth Fund
Schedule of Investments............... 29
Statement of Assets and Liabilities... 32
Statement of Operations............... 32
Statement of Changes in Net Assets.... 33
Financial Highlights.................. 34
BNY Hamilton Small Cap Growth Fund
Schedule of Investments............... 35
Statement of Assets and Liabilities... 38
Statement of Operations............... 38
Statement of Changes in Net Assets.... 39
Financial Highlights.................. 40
BNY Hamilton International Equity Fund
Schedule of Investments............... 41
Industry Diversification.............. 46
Statement of Assets and Liabilities... 47
Statement of Operations............... 47
Statement 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 57
Statement of Assets and Liabilities... 61
Statement of Operations............... 61
Statement of Changes in Net Assets.... 62
Financial Highlights.................. 63
BNY Hamilton Intermediate New York
Tax-Exempt Fund
Schedule of Investments............... 64
Statement of Assets and Liabilities... 69
Statement of Operations............... 69
Statements of Changes in Net Assets... 70
Financial Highlights.................. 71
BNY Hamilton Intermediate Tax-Exempt Fund
Schedule of Investments............... 72
Diversification by State.............. 81
Statement of Assets and Liabilities... 82
Statement of Operations............... 82
Statement of Changes in Net Assets.... 83
Financial Highlights.................. 84
BNY Hamilton Money Fund
Schedule of Investments............... 85
Statement of Assets and Liabilities... 94
Statement of Operations............... 94
Statements of Changes in Net Assets... 95
Financial Highlights.................. 96
BNY Hamilton Treasury Money Fund
Schedule of Investments............... 99
Statement of Assets and Liabilities... 101
Statement of Operations............... 101
Statement of Changes in Net Assets.... 102
Financial Highlights.................. 103
Notes to Financial Statements........... 104
Report of Independent Auditors.......... 113
Federal Income Tax Information.......... 114
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 EQUITY INCOME FUND PERFORM TO DATE IN 1997?
A. The Fund's one-year total return was 26.09% for Institutional Shares and
25.85% for Investor Shares.(1) Though less than the 33.23% gain posted by the
Standard & Poor's 500 Index(2) and the 27.51% for the Lipper Equity Income
Fund Index,(3) these are very respectable results for a relatively
conservative fund that seeks both growth and income. Its dividend yield, at
2.2%, was higher than that of the S&P 500 (1.6%).
Q. WHAT WAS YOUR INVESTMENT STRATEGY THIS PAST YEAR?
A. The Fund owned a wide array of high-quality, large-capitalization,
dividend-paying stocks--the very kind of stocks that were front-runners in
the market during the first half of the year and again in the last two
months. During the course of the year, we steadily increased our commitment
to financial services and related stocks (31.0% of net assets as of
year-end). Financial services was one of the better-performing sectors of the
stock market, thanks to lower interest rates. We were particularly pleased
with the performance of our investments in Travelers, Federal National
Mortgage Association and Equitable.
Among the other bigger gainers in the portfolio were several health care
holdings such as Pfizer and a number of consumer staples stocks, such as
Newell Co. Newell, which is a manufacturer of consumer products (housewares,
office products and hardware items) is achieving strong growth in earnings
per share by acquiring other basic manufacturing companies.
We invested approximately 14% of the Fund's assets in real estate
investment trusts (REITs), and another 11.5% in energy stocks, both of which
proved to be tricky areas in 1997. After a strong run-up the year before, the
appreciation in REITs slowed considerably despite the fact that they
continued to deliver above-average yields of 6% to 7%. Low levels of
inflation around the globe and concerns about a possible fall-off in demand
in 1998 combined to put downward pressure on oil prices, pulling down the
prices of several of our energy-related stocks. Despite these difficulties,
we maintained most of our positions in both categories based on our positive
long-term view. In the event of a market reversal, the income yield from
these securities would act as a cushion against falling stock prices.
Another 20% of assets were invested in convertible securities during most
of the year. Attractive opportunities were hard to find for much of the year.
Too many of the convertibles issued in 1997 carried high premiums and low
coupons, reflecting their lower quality. However, toward year-end, more
high-quality names became available, and at more reasonable prices. We added
Newell Company and PLC Cap Trust II to the portfolio.
Q. WHAT IS YOUR OUTLOOK?
A. The very largest stocks and those in certain sectors, such as financial
services, are up significantly over the past year, but there is still room
for the overall market to appreciate. If it climbs too rapidly, however, we
would become defensive. While maintaining our broad industry diversification,
we might look to take our profits in some of the banks and insurance
companies we own.
1
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[LOGO]
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
-------------------------------- --------------------------------
CUMULATIVE AVERAGE ANNUAL CUMULATIVE AVERAGE ANNUAL
PERIOD TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
- ----------------------- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
1 Year................. 26.09% 26.09% 25.85% 25.85%
5 Years(4)............. 106.83% 15.63% 106.43% 15.59%
Since Inception
(8/10/92)(4).......... 118.96% 15.63% 118.54% 15.59%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BNY Hamilton Equity BNY Hamilton Equity
<S> <C> <C> <C> <C>
Income Fund Institutional Income Fund Investor Lipper Equity Income Fund
Shares Shares S&P 500 Index Index
8/10/92 $10,000.00 $10,000.00 $10,000.00 $10,000.00
7/31/93 11,465.20 11,465.20 10,868.00 11,370.00
7/31/94 11,564.70 11,564.70 11,431.00 11,935.00
7/31/95 13,554.70 13,554.70 14,414.00 13,944.00
7/31/96 15,282.10 15,282.10 16,801.00 15,858.00
7/31/97 20,987.90 20,969.10 25,539.00 22,093.00
12/31/97 21,896.00 21,854.00 26,166.00 23,024.00
</TABLE>
THE S&P 500 INDEX IS AN UNMANAGED INDEX OF COMMON STOCKS AND CANNOT BE INVESTED
IN DIRECTLY. THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES. INVESTMENT
RETURN AND PRINCIPAL WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR COMPARATIVE PURPOSES,
THE INDEX'S JULY 31, 1992 VALUE IS USED AS THE AUGUST 10, 1992 VALUE.
(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 costs. Past performance is no guarantee of
future results. 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 Equity Income Fund Investor Shares was 8/10/92.
(2) The S&P 500 is considered representative of the broad U.S market of
large-capitalization stocks.
(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., 1997.
(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, cumulative total return and average annual total return for 5
years and since inception would have been lower.
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 YEAR ENDED DECEMBER 31, 1997?
A. Institutional Shares of the Fund produced a total return of 31.21% for the
twelve months of 1997. Investor Shares gained 31.01%.(1) Both classes
outperformed the Lipper Growth Fund Index(2), which returned 28.08%, but
lagged slightly behind the 33.23% total return for the Standard & Poor's 500
Index(3).
Q. WHAT FACTORS AFFECTED YOUR PERFORMANCE?
A. The Fund definitely benefited from its focus on large-capitalization stocks,
which were the market's leaders for all but a few months of the year. Beyond
that, Fund performance received a boost from three factors.
First, we maintained a sizable commitment to financial stocks, a
top-performing sector, throughout the year. We are very pleased with results
from our investments in Travelers, Norwest Banks and Fannie Mae. Travelers
and Norwest have solid business strategies and have executed them well. We
view them as core holdings for the Fund. Fannie Mae was the beneficiary of
declining interest rates, which prompted a surge in original mortgages and
refinancings.
Second, we owned ultra-large-cap stocks such as General Electric and
Microsoft that dramatically outdistanced the market in the first half.
Another large-cap holding was Pfizer, which performed exceedingly well. This
leading pharmaceuticals company has been successful in developing and
introducing a variety of new drugs and has more new products in the pipeline.
Third, we trimmed our technology holdings in the second half. The events
that upset the markets in the Far East and the rest of world during the final
quarter punished most technology and technology-related stocks. We were
disappointed by Motorola and Corning. The latter had begun to restructure
itself, selling off its traditional businesses and focusing on the
manufacture of fiber-optic cable. However, its dependence on markets in
Southeast Asia negatively impacted the stock's price in the second half of
the year.
Q. WHAT DO YOU LOOK FOR WHEN ADDING STOCKS TO THE PORTFOLIO?
A. We look for companies where we see superior relative earnings strength before
that strength becomes evident to the market as a whole. We project the growth
rates of selected companies using our own fundamental research in order to
find companies that will produce better than expected earnings over a two to
three-year period. We're looking for reliable growth in earnings and the
potential for positive surprises.
Q. WHAT IS YOUR OUTLOOK?
A. The economic fundamentals continue to look solid. Nonetheless, we do not
anticipate another year of 30%+ returns in the market. A slower rate of
economic growth in the United States, the problems in Southeast Asia and the
less robust growth of corporate earnings make it hard to forecast a fourth
year of such outstanding results. Instead, we look for moderate advances
overall and expect the performance of mid- and small-cap stocks to show signs
of improvement relative to large-cap. Therefore, we are moving down the
market-capitalization
3
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[LOGO]
scale slightly with our new purchases. We're still buying large-cap companies
but have added a select number of mid-cap companies to the portfolio.
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
-------------------------------- --------------------------------
CUMULATIVE AVERAGE ANNUAL CUMULATIVE AVERAGE ANNUAL
PERIOD TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
- ----------------------- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
1 Year................. 31.21% 31.21% 31.01% 31.01%
5 Years................ 132.01% 18.32% 106.43% 18.28%
10 Years............... 345.92% 16.11% 345.23% 16.09%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BNY Hamilton Large Cap BNY Hamilton Large Cap
<S> <C> <C> <C> <C>
Growth Fund Institutional Growth Fund Investor
Shares Shares S&P 500 Index Lipper Growth Fund Index
12/31/87 $10,000.00 $10,000.00 $10,000.00 $10,000.00
12/31/88 11,080.94 11,080.94 11,681.00 11,414.00
12/31/89 14,428.71 14,428.71 15,361.00 14,553.00
12/31/90 14,008.28 14,008.28 14,873.00 13,765.00
12/31/91 18,346.62 18,346.62 19,420.00 18,764.00
12/31/92 19,219.64 19,219.64 20,913.00 20,196.00
12/31/93 21,199.79 21,199.79 23,004.00 22,615.00
12/31/94 20,781.38 20,781.38 23,301.00 22,259.00
12/31/95 27,369.28 27,369.28 32,037.00 29,526.00
12/31/96 33,984.40 33,984.40 39,428.00 34,686.00
12/31/97 44,592.00 44,523.00 52,532.00 44,429.00
</TABLE>
THE S&P 500 INDEX IS AN UNMANAGED INDEX OF COMMON STOCKS AND CANNOT BE INVESTED
IN DIRECTLY. THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES. INVESTMENT
RETURN AND PRINCIPAL WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
(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 costs. Past performance is no guarantee of
future results. The quoted performance includes performance of common and
collective trust fund ("Commingled") accounts advised by The Bank of New
York dating back to 12/31/87 and prior to the Fund's commencement of
operations on 4/1/97, 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 of 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., 1997.
(3) The S&P 500 is considered representative of the broad U.S market of
large-capitalization stocks.
4
<PAGE>
[LOGO] BNY HAMILTON SMALL CAP GROWTH FUND*
AN INTERVIEW WITH JOHN LUI, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. PLEASE GIVE AN OVERVIEW OF THE FUND'S RESULTS FOR 1997.
A. For the year, the Fund delivered a total return of 9.39% for Institutional
Shares and 9.47% for Investor Shares.(1) In comparison, the Russell 2000
Index(2) of small-capitalization stocks gained 22.36%, and the Lipper Small-
Cap Fund Index(3) had a total return of 15.05%.
The Fund focuses on small-capitalization growth stocks, which can be very
volatile, as the four quarters of 1997 clearly demonstrated.
Q. WHY WERE SMALL-CAP SECURITIES SO VOLATILE DURING THE PERIOD?
A. Throughout the early months, fears of higher inflation raised the specter of
higher interest rates. For a smaller company, a rise in rates may have a
greater relative impact on the cost of doing business than for a larger firm.
With the Federal Reserve's 0.25% boost to a key short-term interest rate in
late March, investor anxiety about small-caps reached a crisis point,
triggering a sell-off and an indiscriminate contraction of price-earnings
(P/E) ratios.
At the same time, the Fed's actions began to convince investors that it
remained staunchly anti-inflationary. As investor confidence returned, the
small-cap market made a sharp turn for the better from May through August. In
late October, currency problems in Southeast Asia impacted markets worldwide.
Investors fled to the safest investments, such as large-cap U.S. stocks and
U.S. Treasuries, and the small-cap index declined again.
Q. HOW DID YOU MANAGE THE FUND THROUGH THIS PERIOD OF UNCERTAINTY?
A. Our philosophy is to buy good small businesses and hold onto them as they
grow, provided they continue to meet specific criteria. The companies we
choose may be part of the Russell 2000 Index, or they can be any company with
a market capitalization at the time of purchase between $100 million and $1.5
billion. They need a sound business model, dominant market position,
visionary management, a shareholder orientation and conservative accounting
practices. Beyond that, they must exhibit above-average earnings growth
potential and have the ability, in our view, to exceed consensus estimates of
their growth.
Q. PLEASE DESCRIBE A CURRENT HOLDING THAT FITS YOUR INVESTMENT CRITERIA.
A. The Fund has a relatively high percentage of assets invested in the consumer
nondurables/cyclicals and services sectors. In these sectors, relatively
little capital is required to dominate a niche, so companies can become
market leaders quickly.
A good example is Central Parking Corporation ("Central"). This parking
lot owner and operator is a so-called "category killer," with a market
capitalization of $1.1 billion. The company has nearly doubled in size in a
very short period of time by acquiring its competitors and thereby
consolidating the industry. In addition to operating its own lots, Central
earns revenues, including bonuses for efficiency, by managing lots for other
owners.
5
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Q. WHAT DO YOU FORESEE FOR 1998?
A. We are positive on small-cap stocks because valuations are at historic lows
relative to large-cap stocks. Earnings for small caps should only be impacted
minimally by the crisis in Southeast Asia, as their revenues are mainly
domestic in nature. Near term, we look for continued volatility until
investors become more confident that Asia is not a significant problem for
these companies.
We remain committed to our stock selection strategy of buying rapidly
growing companies whose prospects are currently being underestimated. The
companies in the portfolio are projected to increase their earnings at an
average annual return of 29% over the next two to three years. In addition,
during each quarter last year, roughly two-thirds of our holdings had their
earnings estimates revised upward. Another 17% remained unchanged, and only
17% experienced negative revisions. Given the strong earnings profile of our
holdings and their attractive valuations, we feel the portfolio is well
positioned to outperform once investor sentiment turns positive.
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
-------------------------------- --------------------------------
CUMULATIVE AVERAGE ANNUAL CUMULATIVE AVERAGE ANNUAL
PERIOD TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
- ----------------------- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
1 Year................. 9.39% 9.39% 9.47% 9.47%
5 Years................ 104.11% 15.33% 104.27% 15.35%
Since Inception
(12/31/90)............ 229.44% 18.55% 229.70% 18.57%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
BNY Hamilton Small Cap BNY Hamilton Small Cap
<S> <C> <C> <C> <C>
Growth Fund Institutional Growth Fund Investor Russell 2000
Shares Shares Index Lipper Small Cap Fund Index
12/31/90 $10,000.00 $10,000.00 $10,000.00 $10,000.00
12/31/91 15,245.10 15,245.10 14,604.00 14,850.00
12/31/92 16,140.70 16,140.70 17,294.00 16,510.00
12/31/93 19,226.70 19,226.70 20,563.00 19,300.00
12/31/94 19,163.30 19,163.30 20,189.00 19,206.00
12/31/95 23,171.80 23,171.80 25,931.00 25,280.00
12/31/96 30,117.20 30,117.20 30,208.00 28,911.00
12/31/97 32,944.00 32,970.00 36,963.00 33,263.00
</TABLE>
6
<PAGE>
[LOGO]
THE RUSSELL 2000 INDEX IS AN UNMANAGED INDEX OF COMMON STOCKS, AND CANNOT BE
INVESTED IN DIRECTLY. THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
* Small-capitalization funds typically carry additional risks, since smaller
companies historically have 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 costs. Past performance is no guarantee of
future results. 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.
(2) The Russell 2000 Index is considered representative of the broad U.S
market of small-capitalization stocks.
(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., 1997.
7
<PAGE>
[LOGO] BNY HAMILTON INTERNATIONAL EQUITY FUND*
AN INTERVIEW WITH JILL CURRIE, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM IN 1997?
A. Institutional Shares of the International Equity Fund were launched on April
1st and achieved a total return through December 31st of 6.90%. Investor
Shares provided a total return of 6.60%(1). These results compare to eight-
and nine-month gains of 3.03% and 3.61%, respectively, for the Morgan Stanley
Capital International (MSCI) Europe, Australasia and Far East (EAFE)
Index(2). The Lipper Equity International Index(3) returned 4.18% and 4.64%
for the same eight- and nine-month periods, respectively.
Q. WHAT IS YOUR OVERALL INVESTMENT STRATEGY FOR THIS RELATIVELY NEW FUND?
A. We work very closely with Indosuez International Investment Services, the
sub-advisor to the Fund, to achieve broad diversification. While primarily
invested in developed countries, the Fund also will participate in faster-
growing emerging economies when the opportunities are attractive. Wherever we
invest, we emphasize large-capitalization, "blue-chip" stocks, which we feel
are most likely to benefit from global change. With their economies of scale,
they can more efficiently apply new technologies and easily expand into new
markets as trade barriers fall.
Q. WHAT HAPPENED IN THE INTERNATIONAL MARKETS SINCE APRIL?
A. Markets worldwide were generally positive through July. Weakness, especially
in Asia, beset the markets in the second half, however. The devaluation of
the Thai baht in July led to falling currencies throughout Southeast Asia
and, eventually, South Korea. The markets hardest hit were Indonesia, South
Korea, Thailand and Malaysia, all down over 60% in dollar terms.
Japan was affected as well. Bad loans in other Asian countries will only
exacerbate the problems at Japanese banks, while Japanese corporations count
on Southeast Asia as a major source of revenues. The Japanese market fell 30%
over the six-month period.
The "spillover" effect from Asia's turmoil finally impacted markets in
Europe by the fourth quarter, but they remained relatively strong, rising 7%
in the second half. Economies there are recovering as weaker exchange rates
have boosted exports. European monetary union (EMU), set to begin next
January, is causing interest rates and exchange rates on the Continent to
converge. EMU will also reduce trade barriers and increase competition.
Corporations are seeking to improve their competitive positions through
economies of scale and are reducing costs through restructuring. These
activities should continue to spur improvements in profitability and stock
prices.
8
<PAGE>
[LOGO]
Q. HOW DID YOU INVEST THE FUND'S ASSETS DURING THIS PERIOD OF TURMOIL?
A. As a broadly diversified investment portfolio, the Fund couldn't completely
avoid the upheaval in Asia. However, we anticipated the problems there and
began dramatically reducing holdings in Asia and Japan as early as June. We
ensured that the Fund was widely diversified across 25 countries and focused
on increasing our investments in Europe.
The overwhelming majority of assets were invested in large-cap,
"blue-chip" issues. One example is Veba, a German corporation with
electricity, telecommunications, chemicals and transportation operations.
Restructuring of its businesses is helping to enhance shareholder value. This
focus on quality was especially helpful in Japan, where our investments in
Sony, Rohm and Takeda Chemical fared better than the market in general.
We invested in emerging markets only when the reward clearly outweighed
the risk. Less than 6% of assets were invested in these more volatile markets
at year-end. The largest positions were in Mexico (the strongest performing
country in Latin America) and Greece.
Q. WHAT DO YOU FORESEE FOR THE FUND?
A. We remain very positive about Europe, where valuations are still reasonable
and the outlook for interest rates and corporate profits is good. We will
continue to be cautious vis-a-vis Latin America, favoring Mexico and
Argentina. As for Southeast Asia and Japan, we plan to keep our powder dry
for the time being. It remains to be seen whether nations there will initiate
or continue to make the reforms necessary to bring about stability. There is
likely to be more "pain" before we see real "gain" in that part of the world.
At the same time, we should also point out that the recent decline in many
markets may also create opportunities to buy fast-growing companies at very
reasonable prices.
9
<PAGE>
[LOGO]
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
CUMULATIVE TOTAL CUMULATIVE TOTAL
PERIOD RETURN RETURN
- ------------------------------------------------- -------------------- ----------------
<S> <C> <C>
Since Inception (4/1/97)......................... 6.90% 6.60%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Lipper Equity
BNY Hamilton International BNY Hamilton International International
<S> <C> <C> <C> <C>
Equity Fund Institutional Equity Fund Investor
Shares Shares MSCI EAFE Gross Index Fund Index
4/1/97 $10,000 $10,000 $10,000 $10,000
4/30/97 10,190 10,190 10,056 10,044
5/31/97 10,820 10,750 10,712 10,609
6/30/97 11,133 11,310 11,305 11,119
7/31/97 11,820 11,800 11,491 11,472
8/31/97 10,790 10,770 10,635 10,645
9/30/97 11,550 11,530 11,233 11,329
10/31/97 10,670 10,640 10,372 10,469
11/30/97 10,630 10,600 10,269 10,382
12/31/97 10,690 10,660 10,361 10,464
</TABLE>
THE MSCI EAFE GROSS INDEX IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF THE
INTERNATIONAL EQUITY MARKET. THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND
EXPENSES. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
* International investing involves increased risk and 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 costs. Past performance is no guarantee of
future results. The quoted performance for the Investor Shares prior to
their inception on 5/1/97 is based on the performance of the Fund's
Institutional Shares, adjusted to reflect fees and expenses. The
inception date for the International Equity Fund Institutional Shares was
4/1/97. 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) The MSCI EAFE Index is considered representative of the equity markets in
Europe, Australia, Asia and the Far East.
(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., 1997.
10
<PAGE>
[LOGO] BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
AN INTERVIEW WITH WILLIAM BAIRD AND MARK HEMENETZ, VICE PRESIDENTS AND
PORTFOLIO MANAGERS
Q. HOW DID THE INTERMEDIATE GOVERNMENT FUND PERFORM IN 1997?
A. Institutional Shares of the Fund delivered a total return of 7.85% through
December 31, 1997 while Investor Shares had a one-year total return of
7.54%.(1) For the full year, the Fund outperformed its benchmark, the Lehman
Brothers Intermediate Government Bond Index,(2) which advanced 7.72%.
Q. PLEASE DESCRIBE WHAT HAPPENED IN THE GOVERNMENT BOND MARKET DURING THE
PERIOD.
A. The U.S. bond market rallied during the second half of 1997, spurred by the
perception of more moderate economic growth at home and turmoil overseas.
Prices rose and yields fell dramatically. The yield on 30-year Treasury
securities, which peaked at 7.17% in early April, dropped to 5.97% by
year-end.
As the year began, declining unemployment rates, strong housing, auto
sales and rising wages in the U.S.--all signs of rapid economic
expansion--fueled concern about higher inflation. To rein in potential
pressures, the Federal Reserve raised interest rates by 25 basis points
(0.25%) on March 17.
Although the economy never really slowed down during the year, other
forces brought about a change in investor psychology by mid-summer. Increased
productivity levels eased the fear of a step-up in inflation. The bond market
also acknowledged one of the benefits of the robust economy, namely that
higher tax receipts were reducing the federal deficit below expected levels,
thereby lessening the U.S. government's need to borrow. The drop in yields
moved year-to-date returns for all maturities to positive levels. Investors
continued to focus on securities with greater yields, which resulted in
corporate and mortgage-backed security yields (compared to U.S. Treasury
securities) being near their narrowest spread ever.
An international currency crisis in the final quarter that began in
Southeast Asia sparked a flight to the U.S. markets, which are viewed as a
"safe haven" in times of turmoil. The influx of capital helped to drive
yields on fixed-income securities to near-record lows by late December.
Yields on 10-year Treasuries fell from 6.42% early in January to 5.74% at
year-end.
Q. WHAT WAS YOUR PORTFOLIO MANAGEMENT STRATEGY?
A. Two factors were primarily responsible for the Fund's strong performance.
First, we emphasized higher-yielding mortgage-backed securities. As the
yields on mortgage-backed securities moved downward toward those of
Treasuries, mortgage-backed securities appreciated in price relative to
Treasuries and were one of the best-performing fixed-income sectors for the
year.
Second, the portfolio's average maturity and duration were longer than
those of the benchmark. At year-end, the Fund's duration stood at 3.6 years
(up from 3.5 at June 30, 1997); the average maturity, at 5.5 years (compared
to 4.6 at June 30, 1997). The longer maturities helped the Fund to achieve
favorable relative price appreciation as interest rates moved lower.
In addition, we were careful to select government securities with
adequate call protection and mortgage-backed issues with little prepayment
risk.
11
<PAGE>
[LOGO]
Q. WHAT IS YOUR OUTLOOK FOR THE COMING MONTHS?
A. Although the market could exhibit some volatility early in 1998, we believe
the general trend for interest rates will be lower. The continuation of
favorable inflation data combined with moderate economic growth should
support this trend. This should lead to a positive environment for
intermediate term government securities.
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
---------------------------------- ----------------------------------
CUMULATIVE AVERAGE ANNUAL CUMULATIVE AVERAGE ANNUAL
PERIOD TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
- ----------------------------- --------------- ----------------- --------------- -----------------
<S> <C> <C> <C> <C>
1 Year....................... 7.85% 7.85% 7.54% 7.54%
5 Years(3)................... 31.53% 5.63% 31.15% 5.57%
Since Inception
(8/10/92)(3)................ 32.20% 5.31% 31.82% 5.25%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Lehman Brothers
BNY Hamilton Intermediate BNY Hamilton Intermediate Intermediate
<S> <C> <C> <C>
Government Fund Institutional Government Fund Investors
Shares Shares Government Index
8/10/92 $10,000.00 $10,000.00 $10,000.00
7/31/93 10,678.70 10,678.70 10,818.00
7/31/94 10,429.90 10,429.90 10,918.00
7/31/95 11,308.20 11,308.20 11,833.00
7/31/96 11,831.20 11,831.20 12,448.00
7/31/97 12,812.80 12,789.20 13,517.00
12/31/97 13,220.00 13,182.00 13,913.00
<CAPTION>
Lipper Intermediate
<S> <C>
US Government Fund Index
8/10/92 $10,000.00
7/31/93 10,867.00
7/31/94 10,785.00
7/31/95 11,660.00
7/31/96 12,194.00
7/31/97 13,323.00
12/31/97 13,718.00
</TABLE>
THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT INDEX IS AN UNMANAGED INDEX
GENERALLY CONSIDERED REPRESENTATIVE OF THE U.S. GOVERNMENT INTERMEDIATE-TERM
BOND MARKET. THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES. INVESTMENT
RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. FOR COMPARATIVE
PURPOSES, THE INDEX'S JULY 31, 1992 VALUE IS USED AS THE AUGUST 10, 1992 VALUE.
(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 costs. Past performance is no guarantee of
future results. The quoted performance for Institutional Shares prior to
4/1/97 is based on the performance of Investor Shares, adjusted to
reflect fees and expenses. The adviser has agreed to assume a portion of
the expenses of 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) Lehman Brothers indexes represent broad market averages for fixed-income
securities.
(3) 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, cumulative total return and average annual total return for 5
years and since inception would have been lower.
12
<PAGE>
[LOGO] BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
AN INTERVIEW WITH CHRISTOPHER CAPONE, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM IN 1997?
A. The Intermediate Investment Grade Fund posted a total return of 8.18% for
Institutional Shares and 8.00% for Investor Shares.(1) These compare to total
returns of 7.87% for the Lehman Brothers Intermediate Government/ Corporate
Bond Index(2) and 8.46% for the Lipper Intermediate Investment Grade Fund
Index.(3)
Q. HOW WOULD YOU DESCRIBE THE BOND MARKETS DURING THIS PERIOD?
A. The fixed-income markets provided substantial returns for investors in 1997
as yields declined along the entire yield curve. Market participants spent
much of the year in fear of above-trend economic growth and the potential for
higher inflation, which could have prompted the Federal Reserve to raise
interest rates. However, the Fed raised rates only once (by 0.25% in
mid-March) and took a wait-and-see approach through late summer. By that
time, it became evident that, while growth remained strong, strong
productivity gains were keeping inflation in check.
The bond market rallied beginning in September. Then, as we entered the
fourth quarter, investor focus shifted away from domestic economic issues to
the impact of the financial crisis in Southeast Asia, Korea and Japan. Faced
with considerable uncertainty, investors focused on buying high-quality
securities. This led to an unexpected increase in demand for U.S. Treasuries
and other high-quality domestic issues. Yields fell as demand pushed prices
up.
Q. HOW DID YOU POSITION THE PORTFOLIO DURING THIS PERIOD?
A. We entered the period convinced that intermediate-term rates could move lower
over time as bond investors acknowledged that the economy had room to expand
without higher inflation. In anticipation of lower rates, we maintained a
relatively longer duration (a measure of sensitivity to interest rates) of
approximately 4.5 years. Combined with the Fund's emphasis on investment
grade securities (average rating: AA) throughout the period, this helped us
to achieve a total return in excess of 8%.
Q. WHAT IS YOUR CURRENT OUTLOOK?
A. We plan to maintain our relatively longer duration in the belief that rates
will not rise any time soon. The events in Asia are likely to slow economic
growth worldwide. Lower prices for imports from Southeast Asia should
reinforce the argument for continued low inflation here at home. Finally, the
United States' reputation as a "safe haven" should keep inflows to our bond
market strong, thereby keeping prices up and yields down for the foreseeable
future.
13
<PAGE>
[LOGO]
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
-------------------------------- --------------------------------
CUMULATIVE AVERAGE ANNUAL CUMULATIVE AVERAGE ANNUAL
PERIOD TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
- ----------------------- ------------- ----------------- ------------- -----------------
<S> <C> <C> <C> <C>
1 Year................. 8.18% 8.18% 8.00% 8.00%
5 Years................ 36.06% 6.35% 35.83% 6.31%
10 Years............... 109.33% 7.66% 108.98% 7.64%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Lehman Brothers
BNY Hamilton Intermediate BNY Hamilton Intermediate Intermediate
<S> <C> <C> <C>
Investment Grade Investment Investment Grade Institutional
Shares Shares Govt/Corp Index
12/31/87 $10,000.00 $10,000.00 $10,000.00
12/31/88 10,662.34 10,662.34 10,667.00
12/31/89 12,127.60 12,127.60 12,029.00
12/31/90 12,609.28 12,609.28 13,131.00
12/31/91 14,485.97 14,485.97 15,050.00
12/31/92 15,385.15 15,385.15 16,130.00
12/31/93 16,864.88 16,864.88 17,547.00
12/31/94 16,011.23 16,011.23 17,208.00
12/31/95 19,003.72 19,003.72 19,847.00
12/31/96 19,349.20 19,349.20 20,651.00
12/31/97 20,932.45 20,897.04 22,275.00
<CAPTION>
Lipper Intermediate
Investment
<S> <C>
Grade Index
12/31/87 $10,000
12/31/88 10,812
12/31/89 11,865
12/31/90 12,569
12/31/91 14,602
12/31/92 15,652
12/31/93 17,214
12/31/94 16,661
12/31/95 19,514
12/31/96 20,135
12/31/97 21,839
</TABLE>
THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT CORPORATE INDEX IS AN UNMANAGED
INDEX GENERALLY CONSIDERED REPRESENTATIVE OF THE INTERMEDIATE-TERM BOND MARKET.
THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES.
(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 costs. Past performance is no guarantee of
future results. The quoted performance includes performance of common and
collective trust fund ("Commingled") accounts advised by The Bank of New
York dating back to 12/31/87 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.
(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., 1997.
(a)Lipper Analytical Services began tracking this index on December 30, 1988.
For comparative purposes, the starting point for this index is January 31,
1989, which represents its first full month of data. The starting value is
the value of the Intermediate Investment Grade's Institutional Shares at
January 31, 1989, which was $10,812.
14
<PAGE>
[LOGO] BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
AN INTERVIEW WITH COLLEEN FREY, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. WHAT WAS THE FUND'S TOTAL RETURN FOR THE YEAR ENDED DECEMBER 31, 1997?
A. Institutional Shares of the Fund returned a total of 6.39% for the
twelve-month period, while Investor Shares had a total return of 6.19%.(1)
This compares to a 6.48% total return for the Lehman Brothers Five-Year
General Obligation Municipal Bond Index(2) and a 7.42% average total return
for the Lipper New York Intermediate Municipal Debt Fund Average.(3)
Q. WHAT HAPPENED IN THE MUNICIPAL BOND MARKET DURING THIS PERIOD?
A. Volatility in the municipal bond market during 1997 was not as pronounced as
the volatility in the taxable fixed-income market. Over the course of the
year, five- and ten-year municipal yields declined by 18 and 33 basis points
(i.e., 0.18% and 0.33%). This compares to 50- and 67-basis point drops in the
yields on comparable-term Treasury securities. Ratios of municipal bond
yields to U.S. Treasury yields ended 1997 at the highest levels seen all
year. Ratios on five-and ten-year AAA-rated municipals were 71% and 77%,
respectively, of those for Treasuries, up from 69% and 74%, respectively, at
the end of 1996.
The declining interest rate environment that prevailed during the second
half of the year boosted new municipal bond issuance to an estimated $220
billion. This was 19% greater than the 1996 level and the third highest level
in history. Refunding issues (i.e., bonds sold to repay older bonds issued at
higher rates) accounted for 27% of the total in 1997 as compared to 25% in
1996.
The past year also proved to be a good one for credit quality in the
municipal market. The same economic climate that has propelled the stock
market to record performance has played a major role in the improving credit
picture for state and local governments. In addition, state and local
governments benefited from widespread rejection of boom-and-bust fiscal
policies that were common in the 1980s. Both Moody's Investors Services, Inc.
and Standard & Poor's Corporation reported issuing more upgrades than
downgrades during 1997.
Q. HOW DID YOU POSITION THE PORTFOLIO IN RESPONSE TO THE MARKET?
A. Throughout 1997, our fixed-income investment strategy was based on a scenario
of moderate economic growth and low inflation, the kind of situation that
would keep interest rates low and/or trending downward. In response, we
lengthened the average maturity of the Fund to 6.0 years, up from 5.3 years
at the end of 1996.
Yield spreads between bonds of various credit-quality ratings were quite
narrow during the year, providing little incentive to take on the additional
risk of lower-rated securities, so we emphasized higher-quality issuers.
Issuer diversification of the Fund was increased this year. We added
securities from two new issuers: New York City Transitional Finance Authority
and a New York State Dormitory Authority issue on behalf of Albany Airport.
Q. WHAT IS YOUR OUTLOOK FOR 1998?
A. Municipal bond issuance levels should be similar to 1997, and credit quality
should continue to improve. Narrow spreads or differentials between quality
sectors mean we are likely to continue to favor higher-rated issues with
maturities in the five- to ten-year range.
15
<PAGE>
[LOGO]
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
---------------------------------- ----------------------------------
CUMULATIVE AVERAGE ANNUAL CUMULATIVE AVERAGE ANNUAL
PERIOD TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
- ----------------------- --------------- ----------------- --------------- -----------------
<S> <C> <C> <C> <C>
1 Year................. 6.39% 6.39% 6.19% 6.19%
5 Years(4)............. 28.16% 5.08% 27.92% 5.05%
Since Inception
(8/10/92)(4).......... 29.67% 4.93% 29.43% 4.90%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Lehman Five Year General
BNY Hamilton Intermediate N.Y. BNY Hamilton Intermediate N.Y. Obligation
<S> <C> <C> <C>
Tax-Exempt Fund Institutional Tax-Exempt Fund Investor
Shares Shares Municipal Bond Index
8/10/92 10,000.00 10,000.00 10,000.00
7/31/93 10,540.00 10,540.00 10,658.00
7/31/94 10,760.00 10,760.00 10,927.00
7/31/95 11,420.00 11,420.00 11,752.00
7/31/96 11,890.00 11,890.00 12,296.00
7/31/97 12,700.00 12,690.00 13,215.00
12/31/97 12,967.00 12,943.00 13,507.00
<CAPTION>
Lipper New York Intermediate
Municipal
<S> <C>
Debt Fund Average
8/10/92 10,000.00
7/31/93 10,714.90
7/31/94 10,935.00
7/31/95 11,627.80
7/31/96 12,158.20
7/31/97 13,116.70
12/31/97 13,402.20
</TABLE>
THE LEHMAN BROTHERS FIVE YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX IS AN
UNMANAGED INDEX GENERALLY CONSIDERED REPRESENTATIVE OF THE INTERMEDIATE STATE
GENERAL OBLIGATION MUNICIPAL BOND MARKET. THE INDEX DOES NOT TAKE INTO ACCOUNT
FEES AND EXPENSES. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT
AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. SOME INVESTORS MAY BE SUBJECT TO THE ALTERNATIVE MINIMUM TAX
AND/OR STATE AND LOCAL TAXES. FOR COMPARATIVE PURPOSES, THE INDEX'S JULY 31,
1992 VALUE IS USED AS THE AUGUST 10, 1992 VALUE.
(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 costs. Past performance is no guarantee of
future results. The quoted performance for Institutional Shares of the
Fund 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 Investor Shares of the Fund was 8/10/92. 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) Lehman Brothers indexes represent broad market averages for fixed-income
securities.
(3) Lipper averages are composites based on non-weighted average of all funds
and classes within the investment objective. Returns for these indexes
are net of fees. Source: Lipper Analytical Services, Inc., 1997.
(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, cumulative total return and average annual total return for 5
years and since inception would have been lower.
16
<PAGE>
[LOGO] BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
AN INTERVIEW WITH JEFFREY NOSS, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. HOW DID THE FUND PERFORM IN THE TWELVE MONTHS OF 1997?
A. The Fund's total returns for 1997 were 6.09% for Institutional Shares and
5.95% for Investor Shares.(1) In comparison, the Lehman Brothers Five-Year
General Obligation Municipal Bond Index(2) advanced 6.48%,(3) and the Lipper
Intermediate Municipal Bond Fund Index posted an average total return of
7.02%.(4)
Q. HOW DID YOU INVEST THE FUND'S ASSETS?
A. Yield spreads, or the difference in interest rates, between municipal
securities and the taxable alternatives reached historically tight levels
during 1997. In other words, an investor in a municipal bond could pick up a
larger percentage of the yield of a comparable Treasury security than is
normally the case, particularly in the longer end of the curve. The Fund was
managed to take advantage of this situation. For nearly three of the four
fiscal quarters, we extended the average maturity; at year-end, it equaled
8.1 years, while duration stood at 6.0 years. Whenever practicable, we bought
on signs of temporary weakness in the market.
Assets were fully invested throughout the year, a reflection of the
attractive ratios of municipals to their Treasury counterparts and our
generally positive view of interest rates.
Q. WHY IS YOUR STRATEGY REGARDING CREDIT QUALITY?
A. We feel it is essential to keep the portfolio credit quality high. The
present narrow spreads in yields between high- and lower-quality issues
provide little incentive to sacrifice quality. Rather than increase yields by
buying lesser-quality issues, we bought longer-term securities of better
quality. More than 75% of the Fund's holdings are rated double- or triple-A.
Q. WHAT ARE YOUR PLANS FOR THE FUND IN 1998?
A. A favorable environment in the 1997 fourth quarter strengthened our bond
market. Given the strong market and a rather flat yield curve, we will remain
fully invested and pay extra attention to call protection. Strong markets
tend to produce short calls which lead to reduced total return. This
increases the possibility of lower income flow if issuers call such bonds. We
will also watch the yield curve closely and be prepared to adjust the Fund's
assets to higher concentrations of intermediate-term maturities by
selectively selling longer maturities.
17
<PAGE>
[LOGO]
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES INVESTOR SHARES
---------------------------------- ----------------------------------
CUMULATIVE AVERAGE ANNUAL CUMULATIVE AVERAGE ANNUAL
PERIOD TOTAL RETURN TOTAL RETURN TOTAL RETURN TOTAL RETURN
- ----------------------- --------------- ----------------- --------------- -----------------
<S> <C> <C> <C> <C>
1 Year................. 6.09% 6.09% 5.95% 5.95%
5 Years................ 28.15% 5.08% 27.99% 5.06%
10 Years............... 66.96% 5.26% 66.75% 5.24%
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Lipper Intermediate
BNY Hamilton Intermediate BNY Hamilton Intermediate Municipal
<S> <C> <C> <C>
Tax-Exempt Fund Institutional Tax-Exempt Fund Investor
Shares Shares Fund Index
12/31/87 $10,000.00 $10,000.00 $10,000.00
12/31/88 9,531.96 9,531.96 10,732.00
12/31/89 10,464.00 10,464.00 11,649.00
12/31/90 11,093.77 11,093.77 12,430.00
12/31/91 12,172.86 12,172.86 13,778.00
12/31/92 13,028.77 13,028.77 14,838.00
12/31/93 14,130.94 14,130.94 16,313.00
12/31/94 13,619.60 13,619.60 15,738.00
12/31/95 15,178.59 15,178.59 17,764.00
12/31/96 15,738.01 15,738.01 18,422.00
12/31/97 16,696.42 16,674.93 19,726.00
<CAPTION>
Lehman Brothers Five Year
<S> <C>
General Obligation Municipal Bond
Index
12/31/87 $10,000
12/31/88 $10,535
12/31/89 $11,454
12/31/90 $12,285
12/31/91 $13,666
12/31/92 $14,680
12/31/93 $15,937
12/31/94 $15,717
12/31/95 $17,546
12/31/96 $18,359
12/31/97 $19,550
</TABLE>
THE LEHMAN BROTHERS FIVE YEAR GENERAL OBLIGATION MUNICIPAL BOND INDEX IS AN
UNMANAGED INDEX GENERALLY CONSIDERED REPRESENTATIVE OF THE INTERMEDIATE STATE
GENERAL OBLIGATION MUNICIPAL BOND MARKET. THE INDEX DOES NOT TAKE INTO ACCOUNT
FEES AND EXPENSES. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT
AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. SOME INVESTORS MAY BE SUBJECT TO THE ALTERNATIVE MINIMUM TAX
AND/OR STATE AND LOCAL TAXES.
(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 costs. Past performance is no guarantee of
future results. The quoted performance includes performance of common and
collective trust fund ("Commingled") accounts advised by The Bank of New
York dating back to 12/31/87 and prior to the Fund's commencement of
operations on 4/1/97, 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.
(2) The Intermediate Tax-Exempt Fund was previously compared to the Lehman
Brothers Seven Year General Obligation Municipal Bond Index. Going
forward, it will be compared to the Lehman Brothers Five Year General
Obligation Municipal Bond Index. This change is being made to more
accurately reflect the typical weighted average maturity of the Fund's
portfolio. The value of a $10,000 investment in the Lehman Brothers Seven
Year General Obligation Municipal Bond Index at December 31, 1987 would
be worth $20,713 at December 31, 1997.
(3) Lehman Brothers indexes represent broad market averages for fixed-income
securities.
(4) 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., 1997.
18
<PAGE>
[LOGO] BNY HAMILTON MONEY FUND
AN INTERVIEW WITH RICHARD KLINGMAN, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. WHAT WERE THE YIELD AND TOTAL RETURN FOR THE FUND AS OF DECEMBER 31, 1997?
A. For the year ended December 31, 1997, Hamilton Shares of the Fund delivered
an average annualized total return of 5.47%. Hamilton Premier Shares earned
5.19%, and Hamilton Classic Shares returned 4.80%.(1) The seven-day current
and effective yields for the Hamilton Shares at year-end were 5.54% and
5.69%, respectively. For Hamilton Premier Shares, they equaled 5.27% and
5.41%, respectively; and for the Hamilton Classic Shares, 4.93% and 5.05%,
respectively.(2)
Q. WHAT ARE YOUR GOALS IN MANAGING THIS FUND?
A. We seek to provide high current income while preserving investors' capital
and maintaining a very high level of liquidity. Toward this end, we
concentrate our investments in securities issued by the U.S. government and
its agencies (12.59% at 12/31/97), top-rated commercial paper (36.73% at
12/31/97), bank and corporate obligations (10.25% at 12/31/97) and repurchase
agreements (40.43% at 12/31/97).
This emphasis on quality has earned the Fund a AAAm rating from Standard
& Poor's Corporation. As of January 5, 1998, it also holds a Aaa rating from
Moody's Investors Service. This rating signifies that the Fund's safety is
excellent and that it has a superior capacity to maintain its $1.00 net asset
value per share. Of course, there can be no assurance that it will do so.
Q. WHAT HAPPENED TO SHORT-TERM INTEREST RATES DURING THE SECOND HALF OF 1997,
AND HOW DID THIS IMPACT THE FUND?
A. The federal funds rate, a key short-term interest rate set by the Federal
Reserve, began and ended the period at the same level of 5.50%. With such
stable interest rates, we made only minor adjustments to the portfolio,
reducing the Fund's average maturity from 52 days at June 30, 1997 to 45 days
at year-end.
Q. WHAT WERE THE OTHER SIGNIFICANT DEVELOPMENTS DURING THE YEAR?
A. This was a period of significant growth in assets for the Fund. Assets rose
from $1.09 billion on December 31, 1996, to $1.77 billion on December 31,
1997, an increase of 62%. Also, in March of 1997 the closing time of the Fund
moved from 2:30 p.m. EST to 4:30 p.m. EST. The increase in the asset size and
the expansion in hours positioned the fund as a very attractive, competitive
and flexible investment alternative.
Q. WHAT IS YOUR OUTLOOK?
A. As we said at mid-year, we can sum it up with a familiar phrase: "The more
things change, the more they stay the same." Despite the recent debacle in
Southeast Asia that upset global markets (and continues to impact them), we
expect little variation in the current slow-growth, low-inflation
environment. That should keep interest rates quite stable for the near-term
future.
(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.
19
<PAGE>
[LOGO] BNY HAMILTON TREASURY MONEY FUND
AN INTERVIEW WITH RICHARD KLINGMAN, VICE PRESIDENT AND PORTFOLIO MANAGER
Q. WHAT WERE THE YIELD AND TOTAL RETURN FOR THE FUND?
A. From the Fund's inception on April 1, 1997, through year-end, Hamilton Shares
posted an annualized total return of 5.35%. Hamilton Premier Shares gained a
total of 5.09%.(1) The seven-day current and effective yields for the
Hamilton Shares at December 31, 1997 were 5.46% and 5.61%, respectively. For
Hamilton Premier Shares, they equaled 5.21% and 5.35%, respectively.(2)
Q. WHAT ARE YOUR GOALS IN MANAGING THE FUND?
A. We seek to provide high current income while preserving investors' capital
and maintaining a very high level of liquidity. Toward these ends, the Fund
invests solely in securities issued by the U.S. Treasury or collateralized by
U.S. Treasury obligations.
Q. WHAT HAPPENED TO SHORT-TERM INTEREST RATES DURING THE SECOND HALF OF 1997,
AND HOW DID THIS IMPACT THE FUND?
A. The federal funds rate, a key short-term interest rate set by the Federal
Reserve, began the period at 5.50% and ended at this same level. The Treasury
repurchase market is based upon the federal funds rate, which on average was
higher than the rates for three- and six-month Treasury securities during the
second half of last year. We capitalized on the relatively high yields by
investing heavily in these overnight investments. As a result, the Fund
maintained a high level of liquidity and ended the year with an average life
of just 17 days. The composition of the portfolio at December 31, 1997, was
8% U.S. Treasury bills, 4% U.S. Treasury notes and 88% repurchase agreements
backed by U.S. Treasury securities.
Our emphasis on quality has earned the Fund an AAAm rating from Standard
& Poor's Corporation and, as of January 5, 1998, an Aaa rating from Moody's
Investors Service, Inc. These ratings historically signify that the Fund's
safety is excellent and that it has superior capacity to maintain its $1.00
net asset value per share. Of course, there can be no assurance that it will
do so.
Q. HOW HAS THE FUND GROWN THIS YEAR?
A. This was the first year of operations for the Treasury Money Fund. Assets
grew significantly, from $15 million in April to $293 million at year-end.
Q. WHAT IS YOUR OUTLOOK FOR THE MONEY MARKETS?
A. The turmoil in the markets of Southeast Asia and Japan, which impacted
securities worldwide this past fall, should keep inflationary pressures in
the United States in check. For the foreseeable future, it may also help to
moderate the rate of economic activity in the U.S. Thus, we see little change
to the low-inflation, moderate-growth scenario of the past few years and
little reason for the Federal Reserve to increase short-term interest rates
any time soon.
(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 is currently waiving certain fees. Had fees not
been waived, the seven-day current yield would have been lower.
20
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS--76.7%
BANKING--3.5%
150,000 First Union Corp. ...................... $ 7,687,500
190,000 Mellon Bank Corp. ...................... 11,518,750
-------------
19,206,250
-------------
BEVERAGES--1.7%
255,000 PepsiCo, Inc. .......................... 9,291,563
-------------
BIOTECHNOLOGY--0.8%
*250,000 Chiron Corp. ........................... 4,250,000
-------------
BUSINESS EQUIPMENT &
SERVICES--1.7%
125,000 Xerox Corp. ............................ 9,226,563
-------------
CHEMICALS--PETROLEUM--1.3%
120,000 duPont (E.I.) De Nemours & Co. ......... 7,207,500
-------------
COMPUTER SERVICES--2.0%
130,000 HBO & Co. .............................. 6,240,000
80,000 Hewlett-Packard Co. .................... 5,000,000
-------------
11,240,000
-------------
CONGLOMERATES--1.6%
122,200 General Electric Co. ................... 8,966,425
-------------
COSMETICS & TOILETRIES--1.2%
110,000 Avon Products, Inc. .................... 6,751,250
-------------
ELECTRONICS--2.3%
*130,000 American Power Conversion Corp. ........ 3,071,250
110,000 Sony Corp. (ADR) ....................... 9,982,500
-------------
13,053,750
-------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FINANCIAL SERVICES--6.2%
100,000 American Express Co. ................... $ 8,925,000
230,000 Block H & R, Inc. ...................... 10,306,875
175,000 Equitable Cos, Inc. .................... 8,706,250
120,000 Travelers Group, Inc. .................. 6,465,000
-------------
34,403,125
-------------
FINANCIAL SERVICES--MORTGAGE COMPANIES--1.5%
145,000 Federal National Mortgage
Association ............................ 8,274,062
-------------
FOOD PROCESSING--2.3%
120,000 CPC International, Inc. ................ 12,960,000
-------------
HOUSEHOLD & PERSONAL CARE
PRODUCTS--1.0%
70,000 Procter & Gamble Co. ................... 5,586,875
-------------
INSURANCE--2.8%
120,000 Allstate Corp. ......................... 10,905,000
43,575 American International Group, Inc. ..... 4,738,781
-------------
15,643,781
-------------
INVESTMENT MANAGEMENT--0.9%
150,000 Paine Webber Group, Inc. ............... 5,184,375
-------------
MANUFACTURING--CONSUMER
PRODUCTS--3.2%
200,000 Corning, Inc. .......................... 7,425,000
250,000 Newell Co. ............................. 10,625,000
-------------
18,050,000
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDICAL PRODUCTS & SUPPLIES--3.5%
169,200 Johnson & Johnson ...................... $ 11,146,050
100,000 Novartis AG (ADR) ...................... 8,124,500
-------------
19,270,550
-------------
NATURAL GAS--0.7%
91,100 Questar Corp. .......................... 4,065,337
-------------
OIL & GAS--2.4%
*84,000 Cooper Cameron Corp. ................... 5,124,000
100,000 Shulmberger Ltd. ....................... 8,050,000
-------------
13,174,000
-------------
OIL--INTERNATIONAL--4.9%
162,400 Exxon Corp. ............................ 9,936,850
128,000 Mobil Corp. ............................ 9,240,000
150,000 Total S.A. (ADR) ....................... 8,325,000
-------------
27,501,850
-------------
PHARMACEUTICALS--3.3%
90,000 Bristol-Myers Squibb Co. ............... 8,516,250
130,000 Pfizer, Inc. ........................... 9,693,125
-------------
18,209,375
-------------
RAILROADS--2.1%
180,000 Canadian National Railway .............. 8,505,000
100,000 Kansas City Southern Industries,
Inc. ................................... 3,175,000
-------------
11,680,000
-------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
REAL ESTATE INVESTMENT TRUSTS--12.5%
130,000 Avalon Properties, Inc. ................ $ 4,021,875
100,000 Carramerica Realty Corp. ............... 3,168,750
100,000 CCA Prison Realty Trust ................ 4,462,500
120,000 Crescent Real Estate Equities Co. ...... 4,725,000
320,000 Duke Realty Investments, Inc. . 7,760,000
111,300 Equity Office Properties Trust ......... 3,512,906
100,000 First Industrial Realty Trust, Inc. .... 3,612,500
200,000 General Growth Properties .............. 7,225,000
215,000 Liberty Property Trust ................. 6,140,937
125,000 Mack-Cali Realty Corp. ................. 5,125,000
130,000 Patriot American Hospitality, Inc. ..... 3,745,625
200,000 Security Capital Industrial Trust ...... 4,975,000
120,000 Starwood Lodging Trust ................. 6,945,000
90,000 Vornado Realty Trust ................... 4,224,375
-------------
69,644,468
-------------
REAL ESTATE DEVELOPMENT--0.3%
49,700 Rouse Co. .............................. 1,627,675
-------------
RESORTS & ENTERTAINMENT--1.8%
101,600 Walt Disney Co. ........................ 10,064,750
-------------
RETAIL--SPECIALTY STORES--3.3%
*250,000 Borders Group, Inc. .................... 7,828,125
162,600 CVS Corp. .............................. 10,416,563
-------------
18,244,688
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
TECHNOLOGY INDUSTRIES--1.5%
150,000 Motorola, Inc. ......................... $ 8,559,375
-------------
TELECOMMUNICATIONS--0.8%
*150,000 Worldcom, Inc. ......................... 4,537,500
-------------
UTILITIES--GAS & ELECTRIC--5.6%
155,000 DQE, Inc. .............................. 5,444,375
112,000 Northern States Power Co. .............. 6,524,000
227,150 Texas Utilities Co. .................... 9,440,922
345,000 Williams Cos., Inc. .................... 9,789,375
-------------
31,198,672
-------------
TOTAL COMMON STOCKS
(Cost $299,613,634)..................... 427,073,759
-------------
CONVERTIBLE PREFERRED
STOCKS--10.1%
BANKING--0.6%
30,000 Jefferson-Pilot NB (ACES) (a) .......... 3,210,000
-------------
FINANCIAL SERVICES--2.0%
120,000 Conseco Finance Trust, Series F ........ 6,150,000
113,000 SunAmerica, Inc. ....................... 5,261,562
-------------
11,411,562
-------------
FOOD PROCESSING--0.9%
70,000 Ralston Purina Co. (b) ................. 4,873,750
-------------
INSURANCE--0.2%
20,000 PLC Cap Trust II ....................... 1,100,000
-------------
MANUFACTURING--CONSUMER
PRODUCTS--1.1%
120,000 Newell Financial Trust I** ............. 6,270,000
-------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ------------ -------------
<C> <S> <C>
CONVERTIBLE PREFERRED
STOCKS (CONTINUED)
MEDIA--0.6%
40,000 Evergreen Media Corp.** ................ $ 3,095,000
-------------
REAL ESTATE DEVELOPMENT--0.7%
80,000 Rouse Co., Series B .................... 4,040,000
-------------
TELECOMMUNICATIONS--2.8%
115,000 Airtouch Communications,
Inc. ................................... 7,165,938
80,000 Qualcomm Financial Trust** ............. 3,770,000
30,000 TCI Pacific Communications,
Inc., Series A ......................... 4,950,000
-------------
15,885,938
-------------
UTILITIES--GAS & ELECTRIC--1.2%
40,000 AES Trust I, Series A .................. 2,870,000
70,000 AES Trust II** ......................... 3,613,750
-------------
6,483,750
-------------
TOTAL CONVERTIBLE
PREFERRED STOCKS
(Cost $47,834,766)...................... 56,370,000
-------------
<CAPTION>
PRINCIPAL
AMOUNT
- ------------
<C> <S> <C>
CONVERTIBLE BONDS--9.1%
BANKING--0.4%
$ 2,000,000 Goldman Sachs Financial Products, 3.00%,
8/28/02 (c) ............................ 1,960,000
-------------
BASIC MATERIALS--0.7%
4,000,000 U.S. Filter Corp., 4.50%, 12/15/01 ..... 4,110,000
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ -------------
<C> <S> <C>
CONVERTIBLE BONDS (CONTINUED)
COMPUTERS--SOFTWARE &
PERIPHERALS--0.5%
$ 2,500,000 Veritas Software Corp., 5.25%,
11/01/04** ............................. $ 2,718,750
-------------
CONSUMER SERVICES--0.9%
4,000,000 CUC International, Inc., 3.00%,
2/15/02** .............................. 5,015,000
-------------
ENTERTAINMENT--0.3%
1,500,000 Imax Corp., 5.75%, 4/01/03** ........... 1,786,875
-------------
HEALTH CARE PRODUCTS &
SERVICES--0.7%
3,500,000 Alza Corp., 5.00%, 5/01/06.............. 3,705,625
-------------
HUMAN RESOURCES--0.3%
1,500,000 Personnel Group, 5.75%, 7/01/04** ...... 1,708,125
-------------
INDUSTRIAL SERVICES--0.4%
2,250,000 USA Waste Services, Inc., 4.00%,
2/01/02 ................................ 2,463,750
-------------
MEDICAL IMAGING SYSTEMS--0.4%
2,000,000 Thermotrex Corp., 3.25%, 11/01/07 ...... 1,937,500
-------------
OIL & GAS--1.1%
4,500,000 Diamond Offshore Drilling, 3.75%,
2/15/07 ................................ 6,086,250
-------------
OIL--DOMESTICS--0.8%
2,400,000 Pennzoil Co., 6.50%, 1/15/03 ........... 4,506,000
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ -------------
<C> <S> <C>
CONVERTIBLE BONDS (CONTINUED)
RETAIL--SPECIALTY STORES--1.5%
$ 1,750,000 Central Garden & Pet Co., 6.00%,
11/15/03** ............................. $ 1,990,625
6,000,000 Rite Aid Corp., 5.25%, 9/15/02** ....... 6,480,000
-------------
8,470,625
-------------
TECHNOLOGY INDUSTRIES--1.1%
3,000,000 EMC Corp., 3.25%, 3/15/02** ............ 4,076,250
2,000,000 Premier Technologies, 5.75%,
7/01/04** .............................. 2,087,500
-------------
6,163,750
-------------
TOTAL CONVERTIBLE BONDS
(Cost $43,535,679)...................... 50,632,250
-------------
MONEY MARKET FUND--2.5%
13,739,000 ACM Institutional Reserves (Prime
Portfolio), 5.69% (d) (Cost
$13,739,000)............................ 13,739,000
-------------
REPURCHASE AGREEMENT--1.6%
8,865,000 Repurchase agreement with Deutsche Bank,
6.78%, due 1/02/98, repurchase price
$8,868,339 (Collateral-- Federal
National Mortgage Association Bonds
including Zero Coupon Bonds,
0.00%-13.28%, 8/25/21-12/25/27;
aggregate market value plus accrued
interest $9,130,951) (Cost
$8,865,000) ............................ 8,865,000
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRIKE MARKET
CONTRACTS PRICE VALUE
- ------------ ------ -------------
<C> <S> <C> <C>
PURCHASED PUT OPTIONS--0.0%
*500 Avon Products Inc., expiration
January, 1998
(Cost $89,000)................. 55 $ 12,500
-------------
TOTAL INVESTMENTS BEFORE OUTSTANDING
WRITTEN CALL OPTIONS (Cost
$413,677,079) (e)-- 100.0%............. 556,692,509
-------------
OUTSTANDING WRITTEN CALL OPTIONS--0.0%
*500 Avon Products Inc., expiration
January, 1998
(Premium received $51,623)..... 65 (25,000)
-------------
<CAPTION>
MARKET
VALUE
-------------
<C> <S> <C> <C>
TOTAL INVESTMENTS NET OF OUTSTANDING
WRITTEN CALL OPTIONS (Cost
$413,625,456)-- 100.0%................. $ 556,667,509
Other assets less liabilities-- 0.0%...
69,799
-------------
NET ASSETS--100.0%..................... $ 556,737,308
-------------
</TABLE>
ACES AUTOMATIC COMMON EXCHANGE SECURITY.
ADR AMERICAN DEPOSITORY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
** ILLIQUID 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) CONVERTIBLE TO CITICORP COMMON STOCK.
(d) REPRESENTS ANNUALIZED YIELD AT DECEMBER 31, 1997.
(e) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME
TAX PURPOSES. AT DECEMBER 31, 1997, NET UNREALIZED APPRECIATION WAS
$143,015,430 BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS
CONSISTED OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $146,329,020 AND
AGGREGATE GROSS UNREALIZED DEPRECIATION OF $3,313,590.
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value,
(Identified cost $413,677,079)..... $556,692,509
Cash................................. 263
Receivables
Interest........................... 671,071
Dividends.......................... 1,096,071
Capital stock sold................. 31,734
Other assets......................... 12,081
------------
TOTAL ASSETS..................... 558,503,729
------------
LIABILITIES:
Payables:
Capital stock repurchased.......... 53,234
Dividends and distributions........ 1,222,118
Services provided by The Bank of
New York and Administrator....... 392,969
Outstanding call options written
(premium received $51,623)......... 25,000
Accrued expenses and other
liabilities........................ 73,100
------------
TOTAL LIABILITIES................ 1,766,421
------------
NET ASSETS:............................ $556,737,308
------------
SOURCES OF NET ASSETS:
Capital stock @ par.................. $ 35,835
Capital surplus...................... 413,113,868
Undistributed net investment
income............................. 154,255
Accumulated net realized gain on
investments........................ 391,297
Net unrealized appreciation on
investments........................ 143,042,053
------------
NET ASSETS............................. $556,737,308
------------
INSTITUTIONAL SHARES:
Net assets........................... $522,524,183
------------
Shares outstanding................... 33,631,562
------------
Net asset value, offering price and
repurchase price per share......... $ 15.54
------------
INVESTOR SHARES:
Net assets........................... $ 34,213,125
------------
Shares outstanding................... 2,203,358
------------
Net asset value, offering price and
repurchase price per share......... $ 15.53
------------
Institutional Shares authorized at
$.001 par value...................... 200,000,000
Investor Shares authorized at $.001 par
value................................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends............................ $ 10,343,109
Interest............................. 3,103,148
------------
TOTAL INCOME....................... 13,446,257
------------
EXPENSES:
Advisory............................. 2,765,841
Administration....................... 871,405
12b-1 fee--Investor Shares........... 61,919
Accounting services.................. 59,999
Custodian............................ 56,512
Cash management...................... 11,077
Transfer agent....................... 134,529
Audit................................ 25,159
Directors............................ 10,005
Insurance............................ 6,731
Reports to shareholders.............. 58,237
Registration and filings............. 36,528
Legal................................ 13,711
Other................................ 32,323
------------
TOTAL EXPENSES..................... 4,143,976
Earnings credit adjustment (Note
3)............................... (9,783)
------------
NET EXPENSES....................... 4,134,193
------------
NET INVESTMENT INCOME.............. 9,312,064
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on:
Investments........................ 60,984,949
Written call options............... 170,508
------------
Net realized gain on investments..... 61,155,457
------------
Increase in net unrealized
appreciation on:
Investments........................ 48,783,296
Written call options............... 26,623
------------
Net unrealized gain on investments
during the year.................... 48,809,919
------------
Net realized and unrealized gain on
investments........................ 109,965,376
------------
Net increase in net assets resulting
from operations.................... $119,277,440
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------
1997 1996
---------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................................ $ 9,312,064 $ 4,378,456
Net realized gain on investments................................................. 61,155,457 15,733,809
Increase in unrealized appreciation on investments during the year............... 48,809,919 16,373,339
---------------- ---------------
Net increase in net assets resulting from operations........................... 119,277,440 36,485,604
---------------- ---------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares....................... (7,424,671) -0-
Investor Shares............................ (1,468,710) (4,220,255)
Distributions from capital gains: Institutional Shares........................... (57,654,267) -0-
Investor Shares................................ (3,788,827) (15,772,269)
---------------- ---------------
(70,336,475) (19,992,524)
---------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1).................. 476,447,806 -0-
Investor Shares................................ 24,850,107 45,850,655
Proceeds from shares issued on reinvestment of dividends
and distributions: Institutional Shares........................................ 59,462,345 -0-
Investor Shares.................................................................... 4,429,446 15,622,755
Cost of capital stock repurchased: Institutional Shares.......................... (58,544,334) -0-
Investor Shares (Note 1)...................... (215,212,365) (31,443,997)
---------------- ---------------
Net increase in net assets resulting from capital stock transactions........... 291,433,005 30,029,413
---------------- ---------------
INCREASE IN NET ASSETS....................................................... 340,373,970 46,522,493
NET ASSETS:
Beginning of year................................................................ 216,363,338 169,840,845
---------------- ---------------
End of year (includes undistributed net investment income of $154,255 at December
31, 1997 and $223,704 at December 31, 1996).................................... $ 556,737,308 $216,363,338
---------------- ---------------
CHANGES IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1)....................................... 33,419,974 -0-
Investor Shares..................................................... 1,672,509 3,366,850
Shares issued on reinvestment of dividends
and distributions: Institutional Shares........................................ 3,823,869 -0-
Investor Shares.................................................................... 286,117 1,107,533
Shares repurchased: Institutional Shares......................................... (3,612,281) -0-
Investor Shares (Note 1)..................................... (15,074,119) (2,232,920)
---------------- ---------------
Net increase................................................................... 20,516,069 2,241,463
Shares outstanding, beginning of year............................................ 15,318,851 13,077,388
---------------- ---------------
Shares outstanding, end of year.................................................. 35,834,920 15,318,851
---------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
BNY HAMILTON EQUITY INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL
SHARES
-------------
FOR THE INVESTOR SHARES
PERIOD APRIL ----------------------------------------------------
1, 1997*
THROUGH YEAR ENDED DECEMBER 31,
DECEMBER 31, ----------------------------------------------------
1997 1997 1996 1995 1994 1993
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 14.21 $ 14.12 $ 12.99 $ 10.70 $ 11.30 $ 10.43
------------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.25 0.35 0.30 0.32 0.31 0.29
Net realized and unrealized gain (loss)
on investments........................ 3.25 3.27 2.22 2.41 (0.60) 0.94
------------- -------- -------- -------- -------- --------
Total from investment operations...... 3.50 3.62 2.52 2.73 (0.29) 1.23
------------- -------- -------- -------- -------- --------
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income.... (0.24) (0.28) (0.29) (0.32) (0.31) (0.28)
Distributions from capital gains........ (1.93) (1.93) (1.10) (0.12) -0- (0.08)
------------- -------- -------- -------- -------- --------
Total dividends and distributions..... (2.17) (2.21) (1.39) (0.44) (0.31) (0.36)
------------- -------- -------- -------- -------- --------
Net asset value at end of period........ $ 15.54 $ 15.53 $ 14.12 $ 12.99 $ 10.70 $ 11.30
------------- -------- -------- -------- -------- --------
TOTAL RETURN:+.......................... 24.73%** 25.85% 19.58% 25.78% (2.58)% 11.94%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted).............................. $522,524 $ 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......................... 0.87%*** 1.01% 0.97% 1.00% 1.04% 1.09%
Expenses, prior to waiver from The
Bank of New York.................... 0.87%*** 1.01% 0.97% 1.00% 1.04% 1.12%
Net investment income, net of waiver
from The Bank of New York........... 2.07%*** 1.77% 2.17% 2.66% 2.89% 2.82%
Portfolio turnover rate................. 65% 65% 58% 58% 51% 50%
Average commission rate paid per share
traded++.............................. $ 0.0622 $ 0.0622 $ 0.0622 $ 0.0557 -- --
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
+ TOTAL RETURN DOES NOT CONSIDER THE EFFECT OF THE SALES LOAD FOR THOSE
PERIODS WHICH THE SALES LOAD WAS IN EFFECT.
++ FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED
TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR TRADES ON WHICH
COMMISSIONS ARE CHARGED.
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS--95.0%
AIRCRAFT MANUFACTURING--1.6%
119,974 Boeing Co. ................ $ 5,871,228
-------------
BANKING--6.8%
122,000 First Union Corp. ......... 6,252,500
66,800 Chase Manhattan Corp. ..... 7,314,600
318,932 Norwest Corp. ............. 12,318,749
-------------
25,885,849
-------------
BEVERAGES--4.2%
138,467 Coca-Cola Co. ............. 9,225,364
187,000 PepsiCo, Inc. ............. 6,813,813
-------------
16,039,177
-------------
CHEMICALS--BASIC--2.6%
230,565 Monsanto Co. .............. 9,683,730
-------------
CHEMICALS--PETROLEUM--2.5%
160,146 duPont (E.I.) De Nemours &
Co. ....................... 9,618,769
-------------
COMMUNICATIONS &
ENTERTAINMENT--1.7%
106,579 Time Warner, Inc. ......... 6,607,898
-------------
COMPUTER SERVICES--3.1%
55,722 HBO & Co. ................. 2,674,656
146,660 Hewlett-Packard Co. ....... 9,166,250
-------------
11,840,906
-------------
COMPUTERS--SOFTWARE &
PERIPHERALS--6.6%
*143,187 Cisco Systems, Inc. ....... 7,982,675
36,244 First Data Corp. .......... 1,060,137
*71,824 Microsoft Corp. ........... 9,283,252
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
63,000 Systeme, Anwendungen,
Produkte in der
Datenverarbeitung (ADR).... $ 6,866,433
-------------
25,192,497
-------------
CONGLOMERATES--2.6%
133,146 General Electric Co. ...... 9,769,588
-------------
COSMETICS & TOILETRIES--1.5%
55,008 Gillette Co. .............. 5,524,866
-------------
FINANCIAL SERVICES--2.9%
203,071 Travelers Group, Inc. ..... 10,940,450
-------------
FINANCIAL SERVICES--MORTGAGE
COMPANIES--3.0%
201,725 Federal National Mortgage
Association................ 11,510,933
-------------
FOOD PROCESSING--2.8%
99,009 CPC International, Inc. ... 10,692,972
-------------
HOUSEHOLD & PERSONAL
CARE PRODUCTS--4.5%
116,938 Procter & Gamble Co. ...... 9,333,114
181,400 Newell Co. ................ 7,709,500
-------------
17,042,614
-------------
INSURANCE--4.2%
96,345 American International
Group, Inc. ............... 10,477,519
111,887 Equitable Cos, Inc. ....... 5,566,378
-------------
16,043,897
-------------
MANUFACTURING--CONSUMER
PRODUCTS--1.6%
163,000 Corning, Inc. ............. 6,051,375
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MEDIA--0.6%
*61,612 Liberty Media Group........ $ 2,233,435
-------------
MEDICAL PRODUCTS & SUPPLIES--4.5%
177,455 Johnson & Johnson.......... 11,689,848
104,000 Medtronic, Inc. ........... 5,440,500
-------------
17,130,348
-------------
NATURAL GAS--1.0%
83,633 Questar Corp. ............. 3,732,123
-------------
OIL & GAS--5.4%
*50,000 Cooper Cameron Corp. ...... 3,050,000
79,976 Enron Corp. ............... 3,324,002
75,932 ENSCO International,
Inc. ...................... 2,543,722
84,390 Schulmberger Ltd. ......... 6,793,395
102,000 Transocean Offshore,
Inc. ...................... 4,915,125
-------------
20,626,244
-------------
OIL--INTERNATIONAL--6.0%
176,084 Exxon Corp. ............... 10,774,140
116,000 Mobil Corp. ............... 8,373,750
62,992 Royal Dutch Petroleum
Co. ....................... 3,413,379
-------------
22,561,269
-------------
PHARMACEUTICALS--7.2%
55,000 American Home Products
Corp. ..................... 4,207,500
*35,126 Amgen, Inc. ............... 1,901,195
83,269 Merck & Co. ............... 8,847,331
164,716 Pfizer, Inc. .............. 12,281,637
-------------
27,237,663
-------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ------------ -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
REAL ESTATE INVESTMENT TRUSTS--3.2%
174,000 Duke Realty Investments,
Inc. ...................... $ 4,219,500
140,000 Liberty Property Trust..... 3,998,750
154,775 New Plan Realty Trust...... 3,946,762
-------------
12,165,012
-------------
RESORTS & ENTERTAINMENT--2.1%
80,000 Walt Disney Co. (The)...... 7,925,000
-------------
RETAIL--SPECIALTY STORES--1.7%
103,445 CVS Corp. ................. 6,626,945
-------------
SEMICONDUCTORS--2.1%
112,776 Intel Corp. ............... 7,922,514
-------------
TECHNOLOGY INDUSTRIES--2.0%
135,663 Motorola, Inc. ............ 7,741,270
-------------
TELECOMMUNICATIONS--1.9%
33,401 Lucent Technologies,
Inc. ...................... 2,667,905
*150,000 Worldcom, Inc. ............ 4,537,500
-------------
7,205,405
-------------
TRANSPORTATION--1.7%
103,552 Union Pacific Corp. ....... 6,465,528
-------------
UTILITIES--GAS & ELECTRIC--3.4%
121,500 DQE, Inc. ................. 4,267,687
118,126 Florida Progress Corp. .... 4,636,445
93,253 Texas Utilities Co. ....... 3,875,828
-------------
12,779,960
-------------
TOTAL COMMON STOCKS
(Costs $198,225,123)....... 360,669,465
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ -------------
<C> <S> <C>
U.S. TREASURY BILL--0.9%
$ 3,540,000 5.23%, 1/22/98
(Amortized cost
$3,529,324)................ $ 3,530,166
-------------
MONEY MARKET FUND--3.0%
11,247,000 ACM Institutional Reserves
(Prime Portfolio), 5.69%
(a) (Cost $11,247,000)..... 11,247,000
-------------
REPURCHASE AGREEMENT--1.3%
5,077,000 Repurchase agreement with
Deutsche Bank, 6.78%, due
1/02/98, repurchase price
$5,078,912 (Collateral--
Federal National Mortgage
Association Bonds including
Zero Coupon Bonds,
0.00%-6.50%,
11/25/23-12/25/27;
aggregate market value plus
accrued interest
$5,229,310) (Cost
$5,077,000)................ 5,077,000
-------------
TOTAL INVESTMENTS BEFORE
OUTSTANDING WRITTEN CALL
OPTIONS
(Cost $218,078,447) (b)--
100.2%..................... 380,523,631
-------------
</TABLE>
<TABLE>
<CAPTION>
STRIKE
CONTRACTS PRICE
- ------------- -----------
<C> <S> <C> <C>
OUTSTANDING WRITTEN CALL
OPTIONS--(0.1%)
*100 Coca-Cola Co.,
expiration January,
1998.................. 70 (3,750)
*200 Federal National
Mortgage Association,
expiration January,
1998.................. 55 (60,000)
*100 Federal National
Mortgage Association,
expiration January,
1998.................. 60 (5,000)
<CAPTION>
STRIKE MARKET
CONTRACTS PRICE VALUE
- ------------- ----------- -------------
<C> <S> <C> <C>
OUTSTANDING WRITTEN CALL OPTIONS
(CONTINUED)
*200 Johnson & Johnson,
expiration January,
1998.................. 65 $ (37,500)
*100 Pfizer, Inc.,
expiration January,
1998.................. 75 (20,000)
*100 Pfizer, Inc.,
expiration January,
1998.................. 80 (6,250)
*100 Procter & Gamble Co.,
expiration January,
1998.................. 85 (3,750)
*100 Travelers Group, Inc.,
expiration January,
1998.................. 50 (41,250)
*100 Travelers Group, Inc.,
expiration January,
1998.................. 55 (8,750)
-------------
Total Outstanding Written Call
Options (Premiums received
$197,324).......................... (186,250)
-------------
TOTAL INVESTMENTS NET OF
OUTSTANDING WRITTEN CALL OPTIONS
(Cost $217,881,123)--100.1%........ 380,337,381
Other assets less liabilities--
(0.1%)............................. (547,045)
-------------
NET ASSETS--100.0%................. $ 379,790,336
-------------
</TABLE>
ADR AMERICAN DEPOSITORY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
(a) REPRESENTS ANNUALIZED YIELD AT DECEMBER 31, 1997.
(b) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME
TAX PURPOSES. AT DECEMBER 31, 1997, NET UNREALIZED APPRECIATION WAS
$162,445,184 BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED
OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $164,692,818 AND AGGREGATE
GROSS UNREALIZED DEPRECIATION OF $2,247,634.
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value,
(Identified cost $218,078,447)..... $380,523,631
Cash................................. 597
Receivables
Interest........................... 54,529
Dividends.......................... 408,101
Capital stock sold................. 875
Deferred organization costs and other
assets............................. 78,656
------------
TOTAL ASSETS..................... 381,066,389
------------
LIABILITIES:
Payables:
Capital stock repurchased.......... 120
Dividends and distributions........ 790,940
Services provided by The Bank of
New York and Administrator....... 262,710
Outstanding call options written
(premium received $197,324)........ 186,250
Accrued expenses and other
liabilities........................ 36,033
------------
TOTAL LIABILITIES................ 1,276,053
------------
NET ASSETS:............................ $379,790,336
------------
SOURCES OF NET ASSETS:
Capital stock @ par.................. $ 34,726
Capital surplus...................... 218,834,130
Undistributed net investment
income............................. 31,634
Accumulated distributions in excess
of net realized gain on
investments........................ (1,566,412)
Net unrealized appreciation on
investments........................ 162,456,258
------------
NET ASSETS............................. $379,790,336
------------
INSTITUTIONAL SHARES:
Net assets........................... $373,326,179
------------
Shares outstanding................... 34,134,098
------------
Net asset value, offering price and
repurchase price per share......... $ 10.94
------------
INVESTOR SHARES:
Net assets........................... $ 6,464,157
------------
Shares outstanding................... 591,847
------------
Net asset value, offering price and
repurchase price per share......... $ 10.92
------------
Institutional Shares authorized at
$.001 par value...................... 200,000,000
Investor Shares authorized at $.001 par
value................................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE PERIOD APRIL 1, 1997* THROUGH
DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding
taxes of $23,715)................... $ 3,922,539
Interest.............................. 634,149
------------
TOTAL INCOME........................ 4,556,688
------------
EXPENSES:
Advisory.............................. 1,597,800
Administration........................ 532,600
12b-1 fee--Investor Shares............ 4,805
Accounting services................... 45,000
Custodian............................. 54,910
Cash management....................... 14,450
Transfer agent........................ 34,463
Audit................................. 17,857
Directors............................. 5,264
Reports to shareholders............... 18,180
Registration and filings.............. 16,824
Legal................................. 7,570
Other................................. 16,481
------------
TOTAL EXPENSES...................... 2,366,204
Fees waived by The Bank of New York... (177,856)
------------
NET EXPENSES........................ 2,188,348
------------
NET INVESTMENT INCOME............... 2,368,340
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on:
Investments......................... 54,303,768
Written call options................ 95,233
------------
Net realized gain on investments...... 54,399,001
------------
Increase in net unrealized
appreciation on:
Investments......................... 28,767,535
Written call options................ 11,074
------------
Net unrealized gain on investments
during the period................... 28,778,609
------------
Net realized and unrealized gain on
investments......................... 83,177,610
------------
Net increase in net assets resulting
from operations..................... $ 85,545,950
------------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD APRIL 1, 1997* THROUGH DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
OPERATIONS:
Net investment income............................................................... $ 2,368,340
Net realized gain on investments.................................................... 54,399,001
Increase in unrealized appreciation on investments during the period................ 28,778,609
------------
Net increase in net assets resulting from operations.............................. 85,545,950
------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares.......................... (2,318,068)
Investor Shares............................... (17,933)
Distributions from capital gains: Institutional Shares.............................. (55,015,232)
Investor Shares................................... (950,886)
------------
(58,302,119)
------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1)..................... 371,116,638
Investor Shares................................... 7,761,628
Proceeds from shares issued on reinvestment of dividends and distributions:
Institutional Shares.............................................................. 54,402,109
Investor
Shares............................................................................ 969,794
Cost of capital stock repurchased: Institutional Shares............................. (80,102,249)
Investor Shares.................................. (1,601,415)
------------
Net increase in net assets resulting from capital stock transactions.............. 352,546,505
------------
INCREASE IN NET ASSETS.......................................................... 379,790,336
NET ASSETS:
Beginning of period................................................................. -0-
------------
End of period (includes undistributed net investment income of $31,634 at December
31, 1997)......................................................................... $379,790,336
------------
CHANGES IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1).......................................... 35,761,158
Investor Shares........................................................ 632,712
Shares issued on reinvestment of dividends and distributions: Institutional
Shares............................................................................ 4,970,948
Investor Shares....... 88,650
Shares repurchased: Institutional Shares............................................ (6,598,008)
Investor Shares................................................. (129,515)
------------
Net increase...................................................................... 34,725,945
Shares outstanding, beginning of period............................................. -0-
------------
Shares outstanding, end of period................................................... 34,725,945
------------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
BNY HAMILTON LARGE CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR
SHARES SHARES
---------------- --------------
FOR THE PERIOD
FOR THE PERIOD MAY 1, 1997*
APRIL 1, 1997* THROUGH
THROUGH DECEMBER DECEMBER 31,
31, 1997 1997
---------------- --------------
<S> <C> <C>
PER SHARE DATA:
Net asset value at beginning of period................. $ 10.00 $ 10.70
-------- --------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income.................................. 0.08 0.06
Net realized and unrealized gain on investments........ 2.83 2.12
-------- --------------
Total from investment operations..................... 2.91 2.18
-------- --------------
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income................... (0.08) (0.07)
Distributions from capital gains....................... (1.89) (1.89)
-------- --------------
Total dividends and distributions.................... (1.97) (1.96)
-------- --------------
Net asset value at end of period....................... $ 10.94 $ 10.92
-------- --------------
TOTAL RETURN:.......................................... 29.11%** 20.37%**
RATIOS/SUPPLEMENTAL DATA:..............................
Net assets at end of period (000's omitted)............ $373,326 $ 6,464
Ratio to average net assets of:
Expenses, net of waiver from The Bank of New York.... 0.82%*** 1.07%***
Expenses, prior to waiver from The Bank of New
York............................................... 0.88%*** 1.16%***
Net investment income, net of waiver from The Bank of
New York........................................... 0.89%*** 0.54%***
Portfolio turnover rate................................ 37% 37%
Average commission rate paid per share traded.......... $ 0.0630 $0.0630
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- -------------
<C> <S> <C>
COMMON STOCKS--93.3%
ADVERTISING--3.9%
*201,346 Ha-Lo Industries, Inc. ..... $ 5,234,996
-------------
AUTO PARTS & EQUIPMENT--1.7%
*219,156 Miller Industries, Inc. .... 2,355,927
-------------
BIOSCIENCES--0.5%
*54,675 Aurora Biosciences Corp. ... 717,609
-------------
COMPUTER SERVICES--9.4%
*27,275 Comverse Technology,
Inc. ....................... 1,063,725
*126,720 Network Appliance, Inc. .... 4,498,560
*42,955 PRI Automation, Inc. ....... 1,240,326
*115,685 Veritas Software Corp. ..... 5,899,935
-------------
12,702,546
-------------
COMPUTERS--SOFTWARE &
PERIPHERALS--11.5%
*46,330 Apex PC Solutions, Inc. .... 1,025,051
*142,400 ENCAD, Inc. ................ 3,916,000
*58,020 J.D. Edwards & Co. ......... 1,711,590
*23,275 Jetfax, Inc. ............... 125,103
*164,205 Saville Systems Ireland
(ADR)....................... 6,814,508
*49,051 Sterling Commerce, Inc. .... 1,885,398
-------------
15,477,650
-------------
DATA PROCESSING SYSTEMS--2.6%
*66,600 Applied Graphics
Technologies, Inc. ......... 3,546,450
-------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
EDUCATION--8.5%
*158,703 DeVry, Inc. ................ $ 5,058,658
*49,580 Education Management
Corp. ...................... 1,536,980
*106,045 ITT Educational Services,
Inc. ....................... 2,366,129
*64,070 Sylvan Learning Systems,
Inc. ....................... 2,498,730
-------------
11,460,497
-------------
ELECTRICAL & ELECTRONIC
EQUIPMENT--2.8%
*44,090 Etec Systems, Inc. ......... 2,050,185
*41,810 Jabil Circuit, Inc. ........ 1,661,948
-------------
3,712,133
-------------
ENTERTAINMENT--1.1%
*37,395 Cinar Films, Inc. .......... 1,453,731
-------------
FINANCIAL SERVICES--3.8%
105,190 Bank United Corp., Class A.. 5,147,736
-------------
FOOD PROCESSING--1.8%
*41,630 Suiza Foods Corp. .......... 2,479,587
-------------
FUNERAL SERVICES--CEMETERY--3.6%
*207,942 Equity Corp.
International............... 4,808,659
-------------
INSURANCE--2.3%
106,330 Allied Group, Inc. ......... 3,043,696
-------------
INVESTMENT MANAGEMENT--1.1%
48,187 Oppenheimer Capital......... 1,457,657
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- -------------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
MANUFACTURING--7.2%
*128,040 Scotts Co. (The), Class A... $ 3,873,210
*48,810 Waters Corp. ............... 1,836,476
179,592 Wolverine World Wide........ 4,063,269
-------------
9,772,955
-------------
MEDICAL PRODUCTS & SUPPLIES--0.5%
*70,000 Computer Motion, Inc. ...... 735,000
-------------
OIL & GAS--11.7%
*61,225 B.J. Services Co. .......... 4,404,373
*64,535 Falcon Drilling Co. ........ 2,262,758
*114,325 Global Industries Ltd. ..... 1,943,525
*72,960 National-Oilwell Inc. ...... 2,494,320
*29,640 Petroleum Geo-Services
(ADR)....................... 1,919,190
*27,225 Precision Drilling Corp. ... 663,609
*38,850 Tuboscope Vetco
International Corp. ........ 934,828
*44,450 UTI Energy Corp. ........... 1,150,144
-------------
15,772,747
-------------
PARKING FACILITIES--2.8%
*83,910 Central Parking Corp. ...... 3,802,172
-------------
PHARMACEUTICALS--1.5%
*67,585 Agouron Pharmaceuticals,
Inc. ....................... 1,985,309
-------------
PRISON MANAGEMENT--3.7%
*134,575 Corrections Corp. .......... 4,987,686
-------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
- ----------- -------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
REAL ESTATE INVESTMENT TRUSTS--1.4%
9,325 CCA Prison Realty Trust..... $ 416,128
39,160 First Union Real Estate
Investments................. 636,350
25,190 Irvine Apartment
Communities................. 801,357
-------------
1,853,835
-------------
RECORDS STORAGE--3.2%
*119,430 Iron Mountain, Inc. ........ 4,299,480
-------------
RESORTS & ENTERTAINMENT--1.7%
*88,615 Vail Resorts, Inc. ......... 2,298,452
-------------
RETAIL--SPECIALTY STORES--0.9%
*41,285 Cole National Crop., Class
A........................... 1,235,970
-------------
SHIPBUILDING--0.4%
*20,512 Halter Marine Group,
Inc. ....................... 592,284
-------------
TELECOMMUNICATIONS--2.2%
*76,010 Corsair Communications,
Inc. ....................... 1,235,162
*60,710 Level One Communications,
Inc. ....................... 1,715,057
-------------
2,950,219
-------------
TEXTILE--1.5%
*45,905 Jones Apparel Group Inc. ... 1,973,915
-------------
TOTAL COMMON STOCKS
(Costs $103,297,968)........ 125,858,898
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
VALUE
-------------
PRINCIPAL
AMOUNT
- -----------
MONEY MARKET FUND--3.7%
<C> <S> <C>
$5,013,000 ACM Institutional Reserves
(Prime Portfolio), 5.69% (a)
(Cost $5,013,000)........... $ 5,013,000
-------------
REPURCHASE AGREEMENT--3.8%
5,124,000 Repurchase Agreement with
Deutsche Bank, 6.78%, due
1/02/98, repurchase price
$5,125,930 (Collateral--
Federal Home Loan Mortgage
Corporation Bonds,
6.50%-7.00%,
7/15/06-10/15/15; Federal
National Mortgage
Association Bond, 7.50%,
8/25/21; aggregate market
value plus accrued interest
$5,277,721) (Cost
$5,124,000)................. 5,124,000
-------------
<CAPTION>
MARKET
VALUE
-------------
<C> <S> <C>
TOTAL INVESTMENTS
(Cost $113,434,968) (b)--
100.8%...................... $ 135,995,898
Other assets less
liabilities-- (0.8%)........ (1,093,864)
-------------
NET ASSETS--100.0%.......... $ 134,902,034
-------------
</TABLE>
ADR AMERICAN DEPOSITORY RECEIPT.
* NON-INCOME PRODUCING SECURITY.
(a) REPRESENTS ANNUALIZED YIELD AT DECEMBER 31, 1997.
(b) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME
TAX PURPOSES. AT DECEMBER 31, 1997, NET UNREALIZED APPRECIATION WAS
$22,560,930 BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED
OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $29,992,088 AND AGGREGATE
GROSS UNREALIZED DEPRECIATION OF $7,431,158.
SEE NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value,
(Identified cost $113,434,968)..... $135,995,898
Cash................................. 987
Receivables
Interest........................... 20,550
Dividends.......................... 41,375
Capital stock sold................. 1,600
Deferred organization costs and other
assets............................. 33,625
------------
TOTAL ASSETS..................... 136,094,035
------------
LIABILITIES:
Payables:
Capital stock repurchased.......... 292,444
Distributions...................... 781,784
Services provided by The Bank of
New York and Administrator....... 95,328
Accrued expenses and other
liabilities........................ 22,445
------------
TOTAL LIABILITIES................ 1,192,001
------------
NET ASSETS:............................ $134,902,034
------------
SOURCES OF NET ASSETS:
Capital stock @ par.................. $ 11,304
Capital surplus...................... 110,309,323
Undistributed net investment
income............................. 2,445
Accumulated net realized gain on
investments........................ 2,018,032
Net unrealized appreciation on
investments........................ 22,560,930
------------
NET ASSETS............................. $134,902,034
------------
INSTITUTIONAL SHARES:
Net assets........................... $133,740,533
------------
Shares outstanding................... 11,206,765
------------
Net asset value, offering price and
repurchase price per share......... $ 11.93
------------
INVESTOR SHARES:
Net assets........................... $ 1,161,501
------------
Shares outstanding................... 97,246
------------
Net asset value, offering price and
repurchase price per share......... $ 11.94
------------
Institutional Shares authorized at
$.001 par value...................... 200,000,000
Investor Shares authorized at $.001 par
value................................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE PERIOD APRIL 1, 1997* THROUGH
DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends............................. $ 355,557
Interest.............................. 275,006
-----------
TOTAL INCOME........................ 630,563
-----------
EXPENSES:
Advisory.............................. 664,400
Administration........................ 177,174
12b-1 fee--Investor Shares............ 903
Accounting services................... 45,000
Custodian............................. 19,980
Cash management....................... 3,007
Transfer agent........................ 25,506
Audit................................. 6,453
Directors............................. 5,264
Reports to shareholders............... 5,354
Registration and filings.............. 13,006
Legal................................. 2,717
Other................................. 8,826
-----------
TOTAL EXPENSES...................... 977,590
Fees waived by The Bank of New York... (116,936)
-----------
NET EXPENSES........................ 860,654
-----------
NET INVESTMENT LOSS................. (230,091)
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on:
Investments......................... 11,284,179
Written call options................ 7,087
-----------
Net realized gain on investments...... 11,291,266
-----------
Increase in unrealized appreciation
on:
Investments during the period....... 12,899,933
-----------
Net realized and unrealized gain on
investments......................... 24,191,199
-----------
Net increase in net assets resulting
from operations..................... $23,961,108
-----------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD APRIL 1, 1997* THROUGH DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
OPERATIONS:
Net investment loss................................................................. $ (230,091)
Net realized gain on investments.................................................... 11,291,266
Increase in unrealized appreciation on investments during the period................ 12,899,933
-----------
Net increase in net assets resulting from operations.............................. 23,961,108
-----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from capital gains: Institutional Shares.............................. (8,963,629)
Investor Shares................................... (77,069)
-----------
(9,040,698)
-----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1)..................... 128,542,581
Investor Shares................................... 1,180,363
Proceeds from shares issued on reinvestment of distributions: Institutional
Shares............................................................................ 8,181,980
Investor Shares....... 76,934
Cost of capital stock repurchased: Institutional Shares............................. (17,984,055)
Investor Shares.................................. (16,179)
-----------
Net increase in net assets resulting from capital stock transactions.............. 119,981,624
-----------
INCREASE IN NET ASSETS.......................................................... 134,902,034
NET ASSETS:
Beginning of period................................................................. -0-
-----------
End of period (includes undistributed net investment income of $2,445 at December
31, 1997)......................................................................... $134,902,034
-----------
CHANGES IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1).......................................... 11,960,101
Investor Shares........................................................ 92,035
Shares issued on reinvestment of dividends and distributions: Institutional
Shares............................................................................ 685,832
Investor Shares....... 6,443
Shares repurchased: Institutional Shares............................................ (1,439,168)
Investor Shares................................................. (1,232)
-----------
Net increase...................................................................... 11,304,011
Shares outstanding, beginning of period............................................. -0-
-----------
Shares outstanding, end of period................................................... 11,304,011
-----------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
BNY HAMILTON SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR
SHARES SHARES
---------------- --------------
FOR THE PERIOD FOR THE PERIOD
APRIL 1, 1997* MAY 1, 1997*
THROUGH THROUGH
DECEMBER 31, DECEMBER 31,
1997 1997
---------------- --------------
<S> <C> <C>
PER SHARE DATA:
Net asset value at beginning of period............ $ 10.00 $ 10.03
-------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss............................... (0.02) (0.02)
Net realized and unrealized gain on investments... 2.80 2.78
-------- -------
Total from investment operations................ 2.78 2.76
-------- -------
DISTRIBUTIONS
Distributions from capital gains.................. (0.85) (0.85)
-------- -------
Net asset value at end of period.................. $ 11.93 $ 11.94
-------- -------
TOTAL RETURN:..................................... 27.80%** 27.52%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)....... $133,741 $ 1,162
Ratio to average net assets of:
Expenses, net of waiver from The Bank of New
York.......................................... 0.97%*** 1.22%***
Expenses, prior to waiver from The Bank of New
York.......................................... 1.10%*** 1.40%***
Net investment loss, net of waiver from The Bank
of New York................................... (0.26)%*** (0.54)%***
Portfolio turnover rate........................... 68% 68%
Average commission rate paid per share traded..... $ 0.0531 $0.0531
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS--98.4%
ARGENTINA--0.6%
*12,540 Disco SA (ADR)............... $ 563,516
------------
AUSTRALIA--2.2%
15,660 Australia and New Zealand
Banking Group Ltd. .......... 103,464
28,500 Australian Gas Light Co.
Ltd. ........................ 198,695
11,200 Broken Hill Propietary Co.
Ltd. ........................ 103,990
16,300 National Australian Bank
Ltd. ........................ 227,598
59,800 News Corp. Ltd. ............. 330,022
*30,500 Southern Pacific Petroleum
NL........................... 54,650
*206,400 Telstra Corp. Ltd. .......... 359,857
39,350 Westpac Banking Corp. ....... 251,674
16,900 Woodside Petroleum Ltd. ..... 119,144
123,000 Woolworths Ltd. ............. 411,132
------------
2,160,226
------------
BRAZIL--0.6%
11,900 Centrais Electricas
Brasileiras (ADR)............ 295,895
2,400 Telecomunicacoes Brasileiras
SA (ADR)..................... 279,450
------------
575,345
------------
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
FINLAND--0.8%
11,000 Nokia Oyj, A Shares.......... $ 781,749
------------
FRANCE--9.6%
4,250 Alcatel Alsthom.............. 540,446
19,059 Banque Nationale De Paris.... 1,013,483
6,800 Cap Gemini SA................ 557,825
650 Carrefour Supermarche SA..... 339,270
2,500 Cetelem...................... 340,766
4,821 Compagnie de Saint-Gobain.... 685,181
6,000 Compagnie Generale
des Eaux..................... 837,785
5,500 Elf Aquitaine SA............. 639,975
1,400 Essilor International........ 418,892
*17,800 France Telecom SA............ 645,916
4,500 L'Air Liquide................ 704,637
1,220 L'OREAL...................... 477,588
2,400 Legrand SA................... 478,336
4,670 Michelin (CGDE), B Shares.... 235,213
*8,000 SGS-Thomson Microelectronics
NV........................... 495,357
6,100 Societe BIC SA............... 445,444
4,700 Total SA,B Shares............ 511,731
------------
9,367,845
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
GERMANY--9.1%
4,320 Allianz AG................... $ 1,114,812
20,320 BASF AG...................... 725,535
13,700 Bayer AG..................... 508,595
9,820 Daimler-Benz AG.............. 693,610
16,000 Deutsche Bank AG............. 1,119,439
34,000 Deutsche Telekom AG.......... 629,685
555 Linde AG..................... 336,758
710 Mannesmann AG................ 356,571
1,250 Muenchener Rueckver AG....... 475,517
14,600 Siemens AG................... 881,013
2,250 SAP AG-Vorzug................ 731,045
18,500 VEBA AG...................... 1,260,398
------------
8,832,978
------------
GREECE--1.3%
16,375 Hellenic Telecommunication
Organization SA.............. 335,925
9,700 Intracom SA.................. 447,901
5,100 National Bank Of Greece SA... 449,326
------------
1,233,152
------------
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
HONG KONG--2.4%
21,000 Cheung Kong Holdings Ltd. ... $ 137,547
43,500 China Light and Power Co. ... 241,409
*112,000 China Telecom (Hong Kong)
Ltd. ........................ 192,249
342,000 Giordano International
Ltd. ........................ 118,072
10,000 HSBC Holdings PLC............ 246,507
12,900 Hang Seng Bank Ltd. ......... 124,450
17,500 Hong Kong Electric Holdings
Ltd. ........................ 66,515
152,400 Hong Kong Telecommunications
Ltd. ........................ 313,719
34,000 Hutchison Whampoa Ltd. ...... 213,261
44,000 New World Development Co.
Ltd. ........................ 152,189
98,000 South China Morning Post
Holdings Ltd. ............... 68,932
20,000 Sun Hung Kai Properties
Ltd. ........................ 139,386
26,500 Swire Pacific Ltd.,A
Shares....................... 145,355
*234,000 Tianjin Development Holdings
Ltd. ........................ 217,442
------------
2,377,033
------------
HUNGARY--0.2%
9,300 MOL Magyar Olaj-es Gazipari
Rt., A Shares (GDR).......... 226,920
------------
IRELAND--1.9%
60,519 Allied Irish Banks PLC....... 585,021
60,282 CRH PLC...................... 700,279
100,000 Irish Life PLC............... 567,664
------------
1,852,964
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ITALY--4.4%
15,000 Assicurazioni Generali....... $ 368,638
267,000 Banca Commerciale Italiana... 928,763
190,000 ENI SPA...................... 1,077,887
190,000 Stet Societa' Finanziaria
Telefonica SPA--RNC.......... 838,237
378,000 Telecom Italia Mobile SPA--
RNC.......................... 1,075,421
------------
4,288,946
------------
JAPAN--17.7%
5,100 Advantest Corp. ............. 290,261
27,000 Canon, Inc. ................. 631,282
5,700 Circle K Japan Co. Ltd. ..... 273,994
81,000 Fujitsi Ltd. ................ 872,166
15,000 Hoya Corp. .................. 473,000
7,000 Kyocera Corp. ............... 318,718
20,000 Marui Co. Ltd. .............. 312,257
114,000 Minebea Co. Ltd. ............ 1,227,493
33,000 Mitsubishi Estate Co.
Ltd. ........................ 360,403
100,000 NEC Corp. ................... 1,069,057
15 NTT Data Corp. .............. 811,022
100,000 Ricoh Corp. Ltd. ............ 1,245,952
7,000 Rohm Co. .................... 716,038
21,000 Sanwa Bank Ltd. ............. 213,196
41,000 Shin-Etsu Chemical Co.
Ltd. ........................ 785,180
17,500 Sony Corp. .................. 1,561,285
110,000 Sumitomo Electric
Industries................... 1,505,910
50,000 Sumitomo Sitix Corp. ........ 534,529
7,000 TDK Corp. ................... 529,760
80,000 Takeda Chemical Industries... 2,288,860
28,000 Tokyo Electron Ltd. ......... 900,162
10,000 Toyota Motor Corp. .......... 287,646
------------
17,208,171
------------
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
MALAYSIA--0.5%
35,800 Malayan Banking Berhad....... $ 103,932
49,000 Petronas Gas Berhad.......... 111,410
5,600 Rothmans of Pall Mall
Berhad....................... 43,521
35,000 Sime Darby Berhad............ 33,630
59,500 Telekom Malaysia Berhad...... 175,793
------------
468,286
------------
MEXICO--2.5%
*64,360 Cementos de Mexico (ADR)..... 583,578
290,000 Controladora Commercial
Mexicana SA.................. 374,829
*25,500 Corporacion Geo SA, B Shares
+ (ADR)...................... 627,550
82,000 Grupo Carson SA, Series A1... 546,205
23,000 Grupo Radio Centro SA
(ADR)........................ 327,750
------------
2,459,912
------------
NETHERLANDS--6.5%
38,000 ABN AMRO Holding NV.......... 740,420
21,799 Ahold NV..................... 568,840
16,477 Dordtsche Petroleum-Industrie
MIJ NV....................... 884,310
19,871 Internationale Nederlanden
Groep NV..................... 837,096
9,500 Philips Electronics NV....... 569,842
23,500 Royal Dutch Petroleum Co. ... 1,290,211
14,900 Unilever NV-CVA.............. 918,743
3,800 Wolters Kluwer NV-CVA........ 490,927
------------
6,300,389
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
43
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
NEW ZEALAND--0.3%
40,000 Carter Holt Harvey Ltd. ..... $ 61,782
41,400 Telecom Corporation of New
Zealand Ltd. ................ 200,726
------------
262,508
------------
PHILIPPINES--0.1%
40,000 La Tondena Distillers,
Inc. ........................ 18,547
1,750,000 Pryce Properties Corp. ...... 48,247
------------
66,794
------------
POLAND--0.2%
25,000 Elektrim Spolka Akcyjna SA... 241,850
------------
PORTUGAL--2.0%
25,000 Cimentos de Portugal, SA..... 655,989
37,500 Electricidade de Portugal,
SA........................... 710,859
12,200 Portugal Telecom SA.......... 566,718
------------
1,933,566
------------
SINGAPORE--0.6%
10,000 Jurong Shipyard Ltd. ........ 47,479
23,000 Overseas Union Bank.......... 88,045
8,000 Singapore International
Airlines Ltd. ............... 52,227
3,000 Singapore Press Holdings
Ltd. ........................ 37,568
*137,000 Singapore Technologies
Engineering Ltd. ............ 105,701
50,000 Singapore Telecommunications
Ltd. ........................ 93,178
24,000 United Overseas Bank Ltd. ... 133,180
------------
557,378
------------
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
SPAIN--3.6%
24,500 Banco Santander SA........... $ 818,192
16,800 Corporacion Mapfre........... 445,309
27,500 Empresa Nacional de
Electricidad SA.............. 488,058
4,000 Grupo Acciona SA............. 652,428
10,620 Repsol Petroleo SA........... 452,907
22,000 Telefonica de Espana......... 627,889
------------
3,484,783
------------
SWEDEN--2.3%
10,567 Astra AB, A Shares........... 183,123
18,933 Astra AB, B Shares........... 318,558
4,400 Electrolux AB, Series B...... 305,557
3,220 Sandvik AB................... 91,718
14,580 Sandvik AB, B Shares......... 417,130
26,000 Telefonaktiebolaget LM
Ericsson, B Shares........... 978,150
------------
2,294,236
------------
SWITZERLAND--8.7%
2,320 Adecco SA.................... 673,628
600 Alusuisse-Lonza Holding AG... 577,148
6,900 Credit Suisse Group.......... 1,069,143
770 Nestle SA.................... 1,155,620
1,430 Novartis AG, Registered
Shares....................... 2,323,607
175 Roche Holding AG............. 1,740,340
650 Union Bank of Switzerland, B
Shares....................... 941,208
------------
8,480,694
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
44
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
UNITED KINGDOM--20.3%
52,000 Abbey National PLC........... $ 897,534
25,850 British Aerospace PLC........ 740,511
80,379 British Airport Author PLC... 644,747
66,900 British Airways PLC.......... 656,612
104,794 British Petroleum Co......... 1,380,289
31,000 British Telecommunications
PLC.......................... 244,708
67,263 Dixons Group PLC............. 676,222
45,200 General Accident PLC......... 784,627
98,500 General Electric Co. PLC..... 646,668
70,533 Glaxo Wellcome PLC........... 1,668,873
33,650 Imperial Chemical Industries
PLC.......................... 520,457
46,000 Kingfisher PLC............... 641,839
130,537 Ladbroke Group PLC........... 567,035
29,000 Land Securities PLC.......... 467,623
123,000 Lloyds TSB Group PLC......... 1,590,742
86,500 Marks & Spencer PLC.......... 852,541
*57,000 Norwich Union PLC............ 350,298
55,000 Reed International PLC....... 536,196
149,000 Rentokil Initial PLC......... 649,687
37,500 Siebe PLC.................... 703,410
92,000 SmithKline Beecham PLC....... 946,863
40,000 Smiths Industries PLC........ 569,638
38,660 TI Group PLC................. 296,428
54,146 The Berkeley Group PLC....... 554,598
126,261 Vodafone Group PLC........... 921,372
107,000 WPP Group PLC................ 474,477
22,400 Zeneca Group PLC............. 788,740
------------
19,772,735
------------
TOTAL COMMON STOCKS
(Cost $94,849,468)........... 95,791,976
------------
<CAPTION>
NUMBER OF
SHARES US$ VALUE
- ----------- ------------
<C> <S> <C>
PREFERRED STOCKS--0.5%
GERMANY--0.4%
1,050 Volkswagen AG................ $ 450,239
------------
JAPAN--0.1%
18 Fuji Television Network,
Inc.......................... 77,387
------------
TOTAL PREFERRED STOCKS
(Cost $627,233).............. 527,626
------------
TOTAL INVESTMENTS
(Cost $95,476,701)
(a)--98.9%................... 96,319,602
Other assets less
liabilities-- 1.1%........... 1,046,552
------------
NET ASSETS--100.0%........... $ 97,366,154
------------
</TABLE>
ADR AMERICAN DEPOSITORY RECEIPT.
GDR GLOBAL DEPOSITORY RECEIPT.
+ RESTRICTED SECURITY. SEE NOTE 7.
* NON-INCOME PRODUCING SECURITY.
(a) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME
TAX PURPOSES. AT DECEMBER 31, 1997, NET UNREALIZED APPRECIATION WAS
$842,901 BASED ON COST FOR FEDERAL INCOME TAX PURPOSES.THIS CONSISTED OF
AGGREGATE GROSS UNREALIZED APPRECIATION OF $6,660,765 AND AGGREGATE GROSS
UNREALIZED DEPRECIATION OF $5,817,864.
SEE NOTES TO FINANCIAL STATEMENTS.
45
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
INDUSTRY DIVERSIFICATION
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF TOTAL
US$ VALUE NET ASSETS
----------- ----------
<S> <C> <C>
Advertising and Marketing Services.......................... $ 474,477 0.5%
Aerospace................................................... 740,511 0.8
Airlines.................................................... 708,839 0.7
Airport Facilities.......................................... 644,747 0.7
Automobiles and Trucks...................................... 1,431,495 1.5
Banking..................................................... 12,482,414 12.8
Beverages--Distillers....................................... 18,547 0.0
Building Materials.......................................... 3,277,455 3.4
Business Equipment and Services............................. 1,877,234 1.9
Chemicals................................................... 3,244,405 3.3
Communications Equipment and Services....................... 1,518,597 1.5
Computers and Computer Services............................. 4,041,116 4.1
Conglomerates............................................... 649,687 0.7
Construction................................................ 627,550 0.6
Consumer Durables........................................... 1,224,300 1.2
Cosmetics and Toiletries.................................... 477,587 0.5
Electrical & Electronic Equipment........................... 11,066,101 11.4
Engineering................................................. 105,701 0.1
Financial Services.......................................... 340,766 0.3
Food Processing............................................. 1,724,460 1.8
Forest and Paper Products................................... 61,782 0.1
Holdings Companies--Diversified............................. 1,155,893 1.2
Household Products.......................................... 473,000 0.5
Human Resources............................................. 673,627 0.7
Insurance................................................... 4,106,865 4.2
Leisure and Recreation...................................... 567,035 0.6
Machinery & Equipment....................................... 1,202,177 1.2
Manufacturing............................................... 1,846,040 1.9
Media....................................................... 735,159 0.8
Metals...................................................... 577,148 0.6
Mining...................................................... 103,990 0.1
Oil and Gas................................................. 8,208,526 8.4
Pharmaceuticals............................................. 10,258,965 10.5
Publishing.................................................. 1,133,622 1.2
Real Estate Development..................................... 1,859,992 1.9
Retail...................................................... 4,563,671 4.7
Scientific and Medical Instruments.......................... 418,893 0.4
Telecommunications.......................................... 8,730,494 9.0
Tire and Rubber............................................. 235,213 0.2
Tobacco..................................................... 43,521 0.1
Transportation.............................................. 47,479 0.1
Utilities................................................... 2,640,521 2.7
----------- -----
Total Investments........................................... 96,319,602 98.9
Other assets less liabilities............................... 1,046,552 1.1
----------- -----
Net Assets.................................................. $97,366,154 100.0%
----------- -----
</TABLE>
46
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value
(Identified cost $95,476,701)...... $ 96,319,602
Cash................................. 969,681
Receivables:
Dividends.......................... 139,055
Capital stock sold................. 25,000
Deferred organization costs and other
assets............................. 17,935
------------
TOTAL ASSETS..................... 97,471,273
------------
LIABILITIES:
Payables:
Services provided by The Bank of
New York and Administrator....... 46,206
Accrued expenses and other
liabilities........................ 58,913
------------
TOTAL LIABILITIES................ 105,119
------------
NET ASSETS:............................ $ 97,366,154
------------
SOURCES OF NET ASSETS:
Capital stock @ par.................. $ 9,107
Capital surplus...................... 101,112,132
Accumulated net realized loss on
investments........................ (4,453,967)
Undistributed net investment loss.... (140,993)
Net unrealized appreciation on
investments........................ 842,901
Net unrealized depreciation on
foreign currency transactions...... (3,026)
------------
NET ASSETS............................. $ 97,366,154
------------
INSTITUTIONAL SHARES:
Net assets........................... $ 94,806,243
------------
Shares outstanding................... 8,867,330
------------
Net asset value, offering price and
repurchase price per share......... $ 10.69
------------
INVESTOR SHARES:
Net assets........................... $ 2,559,911
------------
Shares outstanding................... 240,074
------------
Net asset value, offering price and
repurchase price per share......... $ 10.66
------------
Institutional Shares authorized at
$.001 par value...................... 200,000,000
Investor Shares authorized at $.001 par
value................................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE PERIOD APRIL 1, 1997* THROUGH
DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding
taxes of $86,485)................... $ 807,677
-----------
EXPENSES:
Advisory.............................. 445,967
Administration........................ 104,935
12b-1 fee--Investor Shares............ 2,732
Accounting services................... 58,805
Custodian............................. 115,969
Cash management....................... 1,654
Transfer agent........................ 23,360
Audit................................. 3,666
Directors............................. 3,881
Reports to shareholders............... 3,396
Registration and filings.............. 8,568
Legal................................. 1,539
Other................................. 11,385
-----------
TOTAL EXPENSES...................... 785,857
Fees waived by The Bank of New York... (116,797)
-----------
NET EXPENSES........................ 669,060
-----------
NET INVESTMENT INCOME............... 138,617
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized loss on:
Investments......................... (4,453,967)
Foreign currency transactions....... (409,317)
-----------
Net realized loss on investments...... (4,863,284)
-----------
Increase (decrease) in unrealized
appreciation on:
Investments......................... 842,901
Foreign currency denominated assets
and liabilities................... (3,026)
-----------
Net unrealized gain on investments
during the period................... 839,875
-----------
Net realized and unrealized loss on
investments......................... (4,023,409)
-----------
Net decrease in net assets resulting
from operations..................... $(3,884,792)
-----------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
47
<PAGE>
BNY HAMILTON INTERNATIONAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD APRIL 1, 1997* THROUGH DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
OPERATIONS:
Net investment income............................................................... $ 138,617
Net realized loss on investments.................................................... (4,863,284)
Net unrealized gain on investments.................................................. 839,875
-----------
Net decrease in net assets resulting from operations.............................. (3,884,792)
-----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares.............................. 108,400,074
Investor Shares......................................... 2,786,448
Cost of capital stock repurchased: Institutional Shares............................. (9,914,630)
Investor Shares......................................... (20,946)
-----------
Net increase in net assets resulting from capital stock transactions.............. 101,250,946
-----------
INCREASE IN NET ASSETS.......................................................... 97,366,154
NET ASSETS:
Beginning of period................................................................. -0-
-----------
End of period....................................................................... $97,366,154
-----------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares................................................... 9,802,001
Investor Shares........................................................... 241,976
Shares repurchased: Institutional Shares............................................ (934,671)
Investor Shares..................................................... (1,902)
-----------
Net increase...................................................................... 9,107,404
Shares outstanding, beginning of period............................................. -0-
-----------
Shares outstanding, end of period................................................... 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
---------------- ---------------
<S> <C> <C>
FOR THE PERIOD FOR THE PERIOD
APRIL 1, 1997* MAY 1, 1997*
THROUGH THROUGH
DECEMBER 31, DECEMBER 31,
1997 1997
---------------- ---------------
PER SHARE DATA:
Net asset value at beginning of period.................................... $ 10.00 $ 10.19
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income..................................................... 0.02 0.02
Net realized and unrealized gain on investments and foreign currency
transactions............................................................ 0.67 0.45
------- -------
Total from investment operations........................................ 0.69 0.47
------- -------
Net asset value at end of period.......................................... $ 10.69 $ 10.66
------- -------
TOTAL RETURN:............................................................. 6.90%** 4.61%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)............................... $ 94,806 $ 2,560
Ratio to average net assets of:
Expenses, net of waiver from The Bank of New York....................... 1.26%*** 1.52%***
Expenses, prior to waiver from The Bank of New York..................... 1.49%*** 1.75%***
Net investment income, net of waiver from The Bank of New York.......... 0.26%*** 0.33%***
Portfolio turnover rate................................................... 36% 36%
Average commission rate paid per share traded............................. $ 0.0301 $ 0.0301
</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
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
UNITED STATES GOVERNMENT AGENCIES &
OBLIGATIONS--43.4%
UNITED STATES GOVERNMENT AGENCY
SECURITIES--20.3%
Federal Home Loan Bank,
$4,000,000 5.37%, 11/03/00.............. $ 3,936,540
550,000 9.00%, 3/15/06............... 652,556
Federal Home Loan Mortgage
Corporation,
1,000,000 5.55%, 9/07/00............... 988,397
250,000 7.60%, 5/12/05............... 250,556
Federal National Mortgage
Association,
500,000 5.35%, 8/12/98............... 498,789
875,000 6.20%, 7/10/03............... 866,078
100,000 6.40%, 9/27/05............... 102,087
Tennessee Valley Authority,
1,500,000 6.25%, 8/01/99............... 1,504,399
1,350,000 6.00%, 11/01/00.............. 1,357,146
5,000,000 6.125%, 7/15/03.............. 4,995,900
------------
15,152,448
------------
UNITED STATES TREASURY NOTES--21.9%
1,150,000 6.75%, 6/30/99............... 1,167,969
1,500,000 6.875%, 8/31/99.............. 1,528,125
3,000,000 6.75%, 4/30/00............... 3,068,439
950,000 6.25%, 2/15/03............... 971,672
4,100,000 5.75%, 8/15/03............... 4,103,846
450,000 7.50%, 2/15/05............... 494,437
1,300,000 6.50%, 5/15/05............... 1,355,657
3,100,000 5.875%, 11/15/05............. 3,116,470
500,000 6.875%, 5/15/06.............. 535,313
------------
16,341,928
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
UNITED STATES GOVERNMENT AGENCIES &
OBLIGATIONS (CONTINUED)
UNITED STATES TREASURY--STRIPPED
PRINCIPAL--1.2%
$1,000,000 0.00%, 2/15/01............... $ 838,670
------------
TOTAL UNITED STATES
GOVERNMENT AGENCIES &
OBLIGATIONS
(Cost $32,265,688)........... 32,333,046
------------
COLLATERALIZED MORTGAGE OBLIGATIONS--36.5%
Collateralized Mortgage
Securities Corporation,
689,000 Series 1990-7C, 9.25%,
10/20/20..................... 709,053
Federal Home Loan Mortgage
Corporation,
230,365 Series 1317-E, 7.00%,
6/15/04...................... 230,273
322,292 Series 1292-F, 7.75%,
7/15/05...................... 326,075
425,686 Series 1338-G, 6.75%,
1/15/06...................... 427,236
200,000 Series 1176-H, 8.00%,
12/15/06..................... 213,312
500,000 Series 1338-J, 7.00%,
2/15/07...................... 509,351
800,000 Series 1216-6C, 7.00%,
3/15/07...................... 819,353
250,000 Series 1679-H, 6.00%,
11/15/08..................... 244,510
196,403 Series 1663-D, 7.00%,
8/15/11...................... 196,026
302,000 Series 1455-L, 7.00%,
7/15/20...................... 302,377
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
50
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
COLLATERALIZED MORTGAGE OBLIGATIONS
(CONTINUED)
<C> <S> <C>
$ 420,000 Series 136-E, 6.00%,
4/15/21...................... $ 407,303
2,260,000 Series 1371-PI, 6.00%,
4/15/21...................... 2,171,813
262,000 Series 1407-PK, 7.00%,
8/15/21...................... 269,803
2,100,000 Series 1494-PJ, 6.85%,
1/15/22...................... 2,150,875
712,000 Series 1602-BB, 6.10%,
4/15/23...................... 689,954
375,000 Series 1588-TC, 6.50%,
9/15/23...................... 373,338
932,000 Series 20-H, 5.50%, 10/25/23
(a).......................... 837,616
1,605,000 Series 1608-O, 6.50%,
11/15/23..................... 1,549,691
560,000 Series 1621-M, 6.50%,
11/15/23..................... 556,528
209,000 Series 1633-C, 6.50%,
12/15/23..................... 205,171
1,036,000 Series 1669-L, 6.50%,
2/15/24...................... 1,026,262
498,000 Series 1672-N, 7.00%,
2/15/24...................... 508,288
Federal National Mortgage
Association,
477,836 Series 1993-47A, 6.65%,
3/25/05...................... 477,935
91,000 Series 1994-23N, 6.00%,
7/25/05...................... 87,339
500,000 Series 1992-108G, 7.00%,
8/25/05...................... 501,648
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS
(CONTINUED)
$ 496,000 Series 1993-47C, 7.00%,
4/25/08...................... $ 509,021
1,269,447 Series 1988-15A, 9.00%,
6/25/18...................... 1,341,923
147,267 Series 1990-31H, 7.00%,
6/25/19...................... 148,054
2,000,000 Series 1991-137G, 8.30%,
6/25/20...................... 2,014,980
669,000 Series 1992-129J, 4.00%,
7/25/20...................... 587,081
1,040,000 Series 1992-214PK, 7.00%,
9/25/20...................... 1,068,427
220,000 Series 1991-21J, 7.00%,
3/25/21...................... 221,482
1,296,679 Series G92-15Z, 7.00%,
1/25/22...................... 1,308,504
275,000 Series G93-34PH, 6.35%,
2/25/22...................... 273,146
660,000 Series 1993-252N, 6.50%,
8/25/23...................... 664,627
2,033,000 Series 1993-178PK, 6.50%,
9/25/23...................... 1,992,706
920,000 Series 1993-203B, 6.50%,
10/25/23..................... 906,816
300,000 Series X225C-UB, 6.50%,
12/25/23..................... 302,259
Goldman Sachs Trust,
100,000 Series A5, 9.50%, 6/25/20.... 101,142
------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $26,442,144)........... 27,231,298
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
51
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
MORTGAGE-BACKED SECURITIES-- 18.3%
<C> <S> <C>
Federal Home Loan Mortgage
Corporation,
$ 107,134 Pool #218711, 8.00%,
10/01/02..................... $ 109,104
312,904 Pool #251836, 8.50%,
5/01/04...................... 321,061
401,868 Pool #182217, 8.00%,
12/01/04..................... 412,947
88,010 Pool #502185, 8.50%,
7/01/05...................... 90,573
24,594 Pool #160062, 9.50%,
10/01/08..................... 26,100
29,640 Pool #160065, 9.50%,
11/01/08..................... 31,455
28,686 Pool #160066, 9.75%,
11/01/08..................... 30,928
439,653 Pool #185743, 8.50%,
12/01/08..................... 452,838
516,170 Pool #251974, 8.50%,
4/01/09...................... 538,582
394,874 Pool #185964, 8.50%,
2/01/10...................... 410,941
2,140,108 Pool #G10439, 6.50%,
1/01/11...................... 2,145,352
328,229 Pool #555045, 8.00%,
5/01/19...................... 338,181
Federal National Mortgage
Association,
116,181 Pool #34510, 7.25%,
8/01/01...................... 116,454
133,923 Pool #168430, 7.00%,
7/01/03...................... 134,732
930,257 Pool #195152, 7.00%,
1/01/08...................... 944,853
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
MORTGAGE-BACKED SECURITIES (CONTINUED)
$ 376,972 Pool #81860, 8.00%,
4/01/09...................... $ 392,782
670,875 Pool #278437, 7.50%,
5/01/09...................... 688,533
267,049 Pool #6222, 9.00%, 4/01/16... 288,942
669,369 Pool #124118, 9.00%,
3/01/22...................... 720,114
Government National Mortgage
Association,
45,554 Pool #6400, 8.00%, 6/15/05... 47,234
61,428 Pool #7774, 8.00%, 9/15/05... 63,693
61,932 Pool #7038, 8.00%,
10/15/05..................... 64,216
64,827 Pool #11310, 8.00%,
11/15/05..................... 67,218
14,706 Pool #9839, 8.00%, 7/15/06... 15,248
38,727 Pool #10459, 8.00%,
8/15/06...................... 40,155
119,666 Pool #10419, 8.00%,
9/15/06...................... 124,079
67,675 Pool #12590, 8.00%,
9/15/06...................... 70,170
117,978 Pool #14295, 8.00%,
1/15/07...................... 122,328
121,421 Pool #204365, 9.00%,
3/15/17...................... 132,667
354,002 Pool #247223, 9.00%,
4/15/18...................... 386,234
58,113 Pool #177793, 9.50%,
5/15/19...................... 63,500
13,351 Pool #256032, 8.50%,
10/15/19..................... 14,276
9,587 Pool #284645, 8.50%,
2/15/20...................... 10,234
138,720 Pool #290778, 9.50%,
5/15/20...................... 151,173
28,277 Pool #319650, 7.00%,
11/15/22..................... 28,607
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
52
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
MORTGAGE-BACKED SECURITIES (CONTINUED)
<C> <S> <C>
$ 61,089 Pool #350532, 6.50%,
6/15/23...................... $ 60,626
210,725 Pool #359470, 7.00%,
1/15/24...................... 212,940
289,412 Pool #376445, 6.50%,
4/15/24...................... 287,044
246,122 Pool #386348, 7.50%,
6/15/24...................... 252,678
703,080 Pool #407323, 8.25%,
4/15/25...................... 733,730
2,150,654 Pool #780200, 8.50%,
7/15/25...................... 2,263,220
249,717 Pool #80134, 5.50%,
11/20/27..................... 249,410
------------
TOTAL MORTGAGE-BACKED
SECURITIES
(Cost $13,528,835)........... 13,655,152
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
<C> <S> <C>
MONEY MARKET FUND--0.9%
$ 664,000 ACM Institutional Reserves
(Government Portfolio), 5.62%
(b) (cost $664,000).......... $ 664,000
------------
TOTAL INVESTMENTS
(Cost $72,900,667)
(c)--99.1%................... 73,883,496
Other assets less
liabilities--0.9%............ 702,578
------------
NET ASSETS--100.0%........... $ 74,586,074
------------
</TABLE>
(a) CO-ISSUED WITH GOVERNMENT NATIONAL MORTGAGE ASSOCIATION.
(b) REPRESENTS ANNUALIZED YIELD AT DECEMBER 31, 1997.
(c) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES. AT DECEMBER 31, 1997, NET UNREALIZED APPRECIATION WAS $982,829
BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED OF AGGREGATE
GROSS UNREALIZED APPRECIATION OF $1,253,740 AND AGGREGATE GROSS UNREALIZED
DEPRECIATION OF $270,911.
SEE NOTES TO FINANCIAL STATEMENTS.
53
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value,
(Identified cost $72,900,667)....... $73,883,496
Cash.................................. 682
Receivables:
Investments sold.................... 96,405
Interest............................ 800,124
Capital stock sold.................. 9,164
Other assets.......................... 7,509
-----------
TOTAL ASSETS...................... 74,797,380
-----------
LIABILITIES:
Payables:
Capital stock repurchased........... 5,000
Dividends........................... 120,600
Services provided by The Bank of New
York and Administrator............ 50,995
Accrued expenses and other
liabilities......................... 34,711
-----------
TOTAL LIABILITIES................. 211,306
-----------
NET ASSETS:............................. $74,586,074
-----------
SOURCES OF NET ASSETS:
Capital stock @ par................... $ 7,553
Capital surplus....................... 76,557,456
Distributions in excess of net
investment income................... (83,033)
Accumulated net realized loss on
investments......................... (2,878,731)
Net unrealized appreciation on
investments......................... 982,829
-----------
NET ASSETS.............................. $74,586,074
-----------
INSTITUTIONAL SHARES:
Net assets............................ $64,127,602
-----------
Shares outstanding.................... 6,493,079
-----------
Net asset value, offering price and
repurchase price per share.......... $ 9.88
-----------
INVESTOR SHARES:
Net assets............................ $10,458,472
-----------
Shares outstanding.................... 1,059,461
-----------
Net asset value, offering price and
repurchase price per share.......... $ 9.87
-----------
Institutional Shares authorized at $.001
par value............................. 200,000,000
Investor Shares authorized at $.001 par
value................................. 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest............................... $4,523,391
----------
EXPENSES:
Advisory............................... 338,557
Administration......................... 135,423
12b-1 fee--Investor Shares............. 18,394
Accounting services.................... 60,000
Custodian.............................. 22,000
Cash management........................ 2,613
Transfer agent......................... 45,493
Audit.................................. 3,309
Insurance.............................. 2,591
Directors.............................. 9,998
Reports to shareholders................ 12,990
Registration and filings............... 22,519
Legal.................................. 2,076
Other.................................. 23,309
----------
TOTAL EXPENSES....................... 699,272
Fees waived by The Bank of New York.... (47,715)
----------
NET EXPENSES......................... 651,557
----------
NET INVESTMENT INCOME................ 3,871,834
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on investments....... (473,862)
Increase in unrealized appreciation on
investments during the year.......... 1,756,995
----------
Net realized and unrealized gain on
investments.......................... 1,283,133
----------
Net increase in net assets resulting
from operations...................... $5,154,967
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
54
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income........................................................... $ 3,871,834 $ 3,568,858
Net realized loss on investments................................................ (473,862) (535,071)
Increase (decrease) in unrealized appreciation on investments during the year... 1,756,995 (978,520)
------------ ------------
Net increase in net assets resulting from operations.......................... 5,154,967 2,055,267
------------ ------------
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares...................... (2,572,247) -0-
Investor Shares........................... (1,299,587) (3,568,858)
------------ ------------
(3,871,834) (3,568,858)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1)................. 68,354,492 -0-
Investor Shares............................... 6,365,101 22,217,396
Proceeds from shares issued on reinvestment of dividends: Institutional
Shares........................................................................ 1,858,663 -0-
Investor Shares....... 723,282 2,429,127
Cost of capital stock repurchased: Institutional Shares......................... (8,174,171) -0-
Investor Shares (Note 1)..................... (59,940,998) (19,675,281)
------------ ------------
Net increase in net assets resulting from capital stock transactions.......... 9,186,369 4,971,242
------------ ------------
INCREASE IN NET ASSETS...................................................... 10,469,502 3,457,651
NET ASSETS:
Beginning of year............................................................... 64,116,572 60,658,921
------------ ------------
End of year..................................................................... $ 74,586,074 $ 64,116,572
------------ ------------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1)...................................... 7,141,742 -0-
Investor Shares.................................................... 657,553 2,285,237
Shares issued on reinvestment of dividends: Institutional Shares................ 191,010 -0-
Investor Shares..................... 75,288 250,971
Shares repurchased: Institutional Shares........................................ (839,673) -0-
Investor Shares (Note 1).................................... (6,283,195) (2,028,495)
------------ ------------
Net increase.................................................................. 942,725 507,713
Shares outstanding, beginning of year........................................... 6,609,815 6,102,102
------------ ------------
Shares outstanding, end of year................................................. 7,552,540 6,609,815
------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
55
<PAGE>
BNY HAMILTON INTERMEDIATE GOVERNMENT FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL
SHARES
--------------- INVESTOR SHARES
FOR THE PERIOD -----------------------------------------------------
APRIL 1, 1997*
THROUGH YEAR ENDED DECEMBER 31,
DECEMBER 31, -----------------------------------------------------
1997 1997 1996 1995 1994 1993
--------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of
period................................ $ 9.53 $ 9.70 $ 9.94 $ 9.10 $ 10.12 $ 9.87
------- --------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................... 0.42 0.54 0.54 0.53 0.50 0.51
Net realized and unrealized gain (loss)
on investments........................ 0.35 0.17 (0.24) 0.84 (1.02) 0.27
------- --------- --------- --------- --------- ---------
Total from investment operations...... 0.77 0.71 0.30 1.37 (0.52) 0.78
------- --------- --------- --------- --------- ---------
DIVIDENDS AND DISTRIBUTION
Dividends from net investment income.... (0.42) (0.54) (0.54) (0.53) (0.50) (0.51)
Distribution from capital gains......... -- -- -- -- -- (0.02)
------- --------- --------- --------- --------- ---------
Total dividends and distribution...... (0.42) (0.54) (0.54) (0.53) (0.50) (0.53)
------- --------- --------- --------- --------- ---------
Net asset value at end of period........ $ 9.88 $ 9.87 $ 9.70 $ 9.94 $ 9.10 $ 10.12
------- --------- --------- --------- --------- ---------
TOTAL RETURN:+.......................... 8.27%** 7.54% 3.16% 15.40% (5.17)% 8.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period
(000's omitted)....................... $ 64,128 $ 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......................... 0.90%*** 1.08% 1.02% 1.06% 1.07% 0.86%
Expenses, prior to waiver from The
Bank of New York.................... 0.99%*** 1.11% 1.02% 1.06% 1.10% 1.15%
Net investment income, net of waiver
from The Bank of New York........... 5.79%*** 5.57% 5.54% 5.52% 5.30% 5.04%
Portfolio turnover rate................. 41% 41% 57% 48% 49% 67%
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
+ TOTAL RETURN DOES NOT CONSIDER THE EFFECT OF THE SALES LOAD FOR THOSE
PERIODS WHICH THE SALES LOAD WAS IN EFFECT.
SEE NOTES TO FINANCIAL STATEMENTS.
56
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- -------------
<C> <S> <C>
CORPORATE BONDS--55.1%
AEROSPACE & DEFENSE--2.6%
$ 8,600,000 Lockheed Martin Corp.,
7.25%, 5/15/06............ $ 9,032,184
-------------
BANKING--3.9%
7,000,000 BankAmerica Corp., 7.125%,
3/01/09................... 7,302,183
1,000,000 First Union Corp., 7.00%,
3/15/06................... 1,033,550
5,000,000 NationsBank Corp., 7.50%,
9/15/06................... 5,333,205
-------------
13,668,938
-------------
CONGLOMERATES--2.6%
9,075,000 Tenneco Inc., 6.70%,
12/15/05.................. 9,236,254
-------------
DEPARTMENT STORES--2.4%
3,000,000 Penney (J.C.) & Co., Inc.,
7.25%, 4/01/02............ 3,114,075
5,230,000 Sears Roebuck Co. Series
3, 6.92%, 6/17/04......... 5,382,156
-------------
8,496,231
-------------
ENTERTAINMENT--5.9%
5,000,000 Paramount Communications,
Inc. 7.50%, 1/15/02....... 5,104,010
2,500,000 PRIMEDIA Inc. Series B,
8.50%, 2/01/06............ 2,553,225
5,000,000 Time Warner Inc. PATS,
4.90%, 7/29/99 (a)........ 4,915,935
5,500,000 Time Warner Inc., 7.75%,
6/15/05................... 5,844,707
2,500,000 Viacom, Inc., 8.00%,
7/07/06................... 2,531,250
-------------
20,949,127
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- -------------
<C> <S> <C>
CORPORATE BONDS (CONTINUED)
FINANCIAL SERVICES--27.0%
$ 3,600,000 Aetna Services Inc.,
7.125%, 8/15/06........... $ 3,713,792
7,850,000 Aetna Services Inc.,
6.97%, 8/15/36............ 8,237,939
3,200,000 Ameritech Capital Funding
Corp., 6.30%, 10/15/04.... 3,212,579
8,945,000 Associates Corp., 6.875%,
8/01/03................... 9,184,064
1,575,000 Beneficial Corp., 12.875%,
8/01/13................... 1,711,592
5,000,000 Block Financial Corp.,
6.75%, 11/01/04........... 5,071,000
2,030,000 Dean Witter Discover &
Co., 6.30%, 1/15/06....... 1,997,400
4,750,000 Ford Motor Credit, 7.00%,
9/25/01................... 4,866,859
3,750,000 General Electric Capital
Corp., 7.875%, 12/01/06... 4,153,965
2,250,000 General Motors Acceptance
Corp., 6.05%, 10/04/99.... 2,247,912
6,000,000 General Motors Acceptance
Corp., 6.70%, 4/18/01..... 6,084,648
5,000,000 General Motors Acceptance
Corp., 8.25%, 2/28/02..... 5,351,410
665,000 General Motors Acceptance
Corp., 8.25%, 2/24/04..... 727,950
10,000,000 Goldman Sachs Group, L.P.,
6.75%, 2/15/06 (a)........ 10,117,090
6,800,000 Lehman Brothers Holdings,
7.125%, 9/15/03........... 6,986,082
6,000,000 Lehman Brothers Holdings,
7.375%, 5/15/04........... 6,232,728
1,500,000 Merrill Lynch & Co., Inc.,
8.30%, 11/01/02........... 1,627,718
2,515,000 Morgan Stanley Group,
Series C, 5.75%,
2/15/01................... 2,486,669
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
57
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- -------------
<C> <S> <C>
CORPORATE BONDS (CONTINUED)
$ 500,000 Salomon Inc., 6.00%,
12/15/98.................. $ 500,095
5,825,000 Salomon Inc., 6.70%,
7/05/00................... 5,889,308
950,000 Salomon Inc., 7.00%,
6/15/03................... 974,728
500,000 Salomon Inc., 6.875%,
12/15/03.................. 509,720
3,000,000 Sears Roebuck Acceptance
Corp., 6.95%, 5/15/02..... 3,080,709
-------------
94,965,957
-------------
FOOD PROCESSING--3.6%
5,000,000 Nabisco Inc., 6.30%,
8/26/99 (a)............... 5,035,775
7,500,000 Nabisco Inc., 6.85%,
6/15/05................... 7,638,495
-------------
12,674,270
-------------
HOTELS & LODGING--1.3%
4,500,000 Hilton Hotels Corp.,
7.375%, 6/01/02........... 4,615,641
-------------
OIL & GAS--1.5%
5,000,000 Global Marine Inc.,
7.125%, 9/01/07 (a)....... 5,176,100
-------------
TELECOMMUNICATIONS--4.3%
3,500,000 Comcast Cellular Holdings,
9.50%, 5/01/07............ 3,666,250
5,000,000 GTE Corp. 7.51%,
4/01/09................... 5,372,520
4,600,000 TCI Communications Inc.,
8.65%, 9/15/04............ 5,060,971
1,000,000 US West Communications,
6.625%, 9/15/05........... 1,018,311
-------------
15,118,052
-------------
TOTAL CORPORATE BONDS
(Cost $188,601,338)....... 193,932,754
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- -------------
<C> <S> <C>
UNITED STATES GOVERNMENT AGENCIES &
OBLIGATIONS--28.6%
UNITED STATES TREASURY NOTES--17.3%
$ 9,600,000 6.875%, 3/31/00........... $ 9,843,005
8,500,000 6.75%, 4/30/00............ 8,696,571
1,500,000 6.625%, 7/31/01........... 1,543,127
5,800,000 5.75%, 8/15/03............ 5,807,256
9,725,000 7.50%, 2/15/05............ 10,688,388
11,575,000 6.50%, 5/15/05............ 12,070,560
1,200,000 6.50%, 8/15/05............ 1,252,501
10,400,000 7.00%, 7/15/06............ 11,232,010
-------------
61,133,418
-------------
UNITED STATES GOVERNMENT AGENCY
SECURITIES--11.3%
Federal Farm Credit Bank,
2,250,000 6.53%, 12/23/09........... 2,250,000
Federal Home Loan Mortgage
Corp.,
1,025,000 5.225%, 2/22/99........... 1,018,720
2,700,000 7.93%, 1/20/05............ 2,998,779
Federal National Mortgage
Association,
3,000,000 6.20%, 6/26/00............ 3,025,593
4,385,000 6.20%, 7/10/03............ 4,345,289
3,000,000 6.85%, 4/05/04............ 3,134,070
9,700,000 7.375%, 3/28/05........... 10,469,744
5,000,000 5.94%, 12/12/05........... 4,967,715
3,725,000 5.875%, 2/02/06........... 3,689,475
1,000,000 6.06%, 2/03/06............ 992,014
Tennessee Valley
Authority,
2,775,000 6.00%, 11/01/00........... 2,791,833
-------------
39,683,232
-------------
TOTAL UNITED STATES
GOVERNMENT AGENCIES &
OBLIGATIONS
(Cost $98,371,938)........ 100,816,650
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
58
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- -------------
<C> <S> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS--6.5%
Federal Home Loan Mortgage
Corp.,
$ 401,140 Series 1544D, 5.85%,
7/15/05................... $ 400,971
1,850,000 Series 1531E, 6.00%,
1/15/06................... 1,851,462
1,000,000 Series 1678CA, 6.00%,
2/15/09................... 952,850
5,027,573 Series 1607ZB, 5.50%,
12/15/10.................. 4,985,760
992,790 Series 1627PJ, 6.00%,
3/15/23................... 963,989
Federal National Mortgage
Association,
771,161 Series 1993-88B, 5.40%,
6/25/00................... 763,642
1,490,000 Series 1993-212, 6.00%,
11/25/00.................. 1,485,383
5,300,000 Series 1993-96PJ, 7.00%,
8/25/22................... 5,490,359
5,802,409 Kidder Peabody Mortgage
Assets Trust, Series 22,
Class D, 9.95%, 2/01/19... 5,831,692
-------------
TOTAL COLLATERALIZED
MORTGAGE OBLIGATIONS
(Cost $22,636,567)........ 22,726,108
-------------
MORTGAGE-BACKED
SECURITIES--3.7%
Federal Home Loan Mortgage
Corp.,
165,370 Pool #180686, 6.00%,
8/01/03................... 163,773
229,757 Pool #160074, 10.00%,
4/01/09................... 249,998
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- -------------
<C> <S> <C>
MORTGAGE-BACKED
SECURITIES (CONTINUED)
$ 1,159,239 Pool #180006, 9.25%,
8/01/11................... $ 1,229,152
Federal National Mortgage
Association,
860,624 Pool #219238, 8.50%,
2/01/09................... 911,186
Government National
Mortgage Association,
149,830 Pool #13416, 8.00%,
9/15/06................... 155,542
97,045 Pool #13688, 8.00%,
11/15/06.................. 100,744
127,352 Pool #12766, 8.00%,
12/15/06.................. 132,207
97,009 Pool #16080, 7.50%,
4/15/07................... 99,464
1,147,389 Pool #21598, 8.00%,
2/15/08................... 1,191,133
262,097 Pool #27246, 9.00%,
12/15/08.................. 280,608
102,877 Pool #31570, 9.50%,
6/15/09................... 111,429
134,216 Pool #34366, 9.50%,
9/15/09................... 145,373
70,751 Pool #33765, 9.50%,
10/15/09.................. 76,632
121,048 Pool #34704, 9.50%,
10/15/09.................. 132,609
734,433 Pool #171774, 9.00%,
9/15/16................... 786,303
292,803 Pool #199885, 9.50%,
11/15/17.................. 317,142
166,343 Pool #251646, 9.50%,
4/15/18................... 180,170
89,838 Pool #290313, 9.50%,
5/15/20................... 97,306
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
59
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- -------------
<C> <S> <C>
MORTGAGE-BACKED
SECURITIES (CONTINUED)
$ 1,231,494 Pool #319650, 7.00%,
11/15/22.................. $ 1,242,269
1,848,630 Pool #349306, 8.00%,
2/15/23................... 1,928,380
1,647,089 Pool #362262, 7.50%,
4/15/24................... 1,688,782
470,225 Pool #376445, 6.50%,
4/15/24................... 466,967
712,409 Pool #384069, 7.50%,
4/15/24................... 730,442
469,467 Pool #80134, 5.50%,
11/20/27.................. 469,477
-------------
TOTAL MORTGAGE-BACKED
SECURITIES
(Cost $12,515,787)........ 12,887,088
-------------
FOREIGN BONDS--1.5%
5,400,000 Abbey National PLC, 6.69%,
10/17/05 (Cost
$5,521,446)............... 5,450,884
-------------
MUNICIPAL BONDS--1.3%
4,750,000 New York State Dormitory
Authority, 6.23%, 10/01/98
(Cost $4,750,000)......... 4,765,290
-------------
ASSET-BACKED
SECURITIES--1.0%
2,600,000 Discover Card Master Trust
I, Series 1996-3, Class A,
6.05%, 8/18/08............ 2,562,768
841,677 Ford Credit Grantor Trust,
5.90%, 10/15/00........... 841,812
-------------
TOTAL ASSET-BACKED
SECURITIES
(Cost $3,318,104)......... 3,404,580
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- -------------
<C> <S> <C>
MONEY MARKET FUND--1.1%
$ 4,026,000 ACM Institutional Reserves
(Prime Portfolio),
5.69%(b)
(cost $4,026,000)......... $ 4,026,000
-------------
TOTAL INVESTMENTS
(Cost $339,741,180)(c)--
98.8%..................... 348,009,354
Other assets less
liabilities-- 1.2%........ 4,211,905
-------------
NET ASSETS--100.0%........ $ 352,221,259
-------------
</TABLE>
PATS PASS-THRU ASSET TRUST SECURITY.
(a) ILLIQUID SECURITY, EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE
SECURITIES ACT OF 1933.
(b) REPRESENTS ANNUALIZED YIELD AT DECEMBER 31, 1997.
(c) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES. AT DECEMBER 31, 1997, NET UNREALIZED APPRECIATION WAS $8,268,174
BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED OF AGGREGATE
GROSS UNREALIZED APPRECIATION OF $9,183,591 AND AGGREGATE GROSS UNREALIZED
DEPRECIATION OF $915,417.
SEE NOTES TO FINANCIAL STATEMENTS.
60
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value,
(Identified cost $339,741,180)..... $348,009,354
Cash................................. 672
Receivables:
Investments sold................... 35,248
Interest........................... 5,797,344
Capital stock sold................. 340,834
Deferred organization costs and other
assets............................. 91,168
------------
TOTAL ASSETS..................... 354,274,620
------------
LIABILITIES:
Payables:
Capital stock repurchased.......... 163,486
Dividends.......................... 1,588,529
Services provided by The Bank of
New York and Administrator....... 231,218
Accrued expenses and other
liabilities........................ 70,128
------------
TOTAL LIABILITIES................ 2,053,361
------------
NET ASSETS:............................ $352,221,259
------------
SOURCES OF NET ASSETS:
Capital stock @ par.................. $ 33,721
Capital surplus...................... 343,566,673
Accumulated net realized gain on
investments........................ 352,691
Net unrealized appreciation on
investments........................ 8,268,174
------------
NET ASSETS............................. $352,221,259
------------
INSTITUTIONAL SHARES:
Net assets........................... $350,330,198
------------
Shares outstanding................... 33,539,942
------------
Net asset value, offering price and
repurchase price per share......... $ 10.45
------------
INVESTOR SHARES:
Net assets........................... $ 1,891,061
------------
Shares outstanding................... 180,941
------------
Net asset value, offering price and
repurchase price per share......... $ 10.45
------------
Institutional Shares authorized at
$.001 par value...................... 200,000,000
Investor Shares authorized at $.001 par
value................................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE PERIOD APRIL 1, 1997* THROUGH
DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.............................. $18,401,962
-----------
EXPENSES:
Advisory.............................. 1,326,324
Administration........................ 530,532
12b-1 fee--Investor Shares............ 1,458
Accounting services................... 45,000
Custodian............................. 48,374
Cash management....................... 11,153
Transfer agent........................ 71,989
Audit................................. 17,677
Directors............................. 5,264
Reports to shareholders............... 17,981
Registration and filings.............. 18,580
Legal................................. 7,466
Other................................. 21,572
-----------
TOTAL EXPENSES...................... 2,123,370
Earnings credit adjustment (Note
3)................................ (7,205)
-----------
NET EXPENSES........................ 2,116,165
-----------
NET INVESTMENT INCOME............... 16,285,797
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments...... 352,691
Increase in unrealized appreciation on
investments during the period....... 14,714,273
-----------
Net realized and unrealized gain on
investments......................... 15,066,964
-----------
Net increase in net assets resulting
from operations..................... $31,352,761
-----------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
61
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD APRIL 1, 1997* THROUGH DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
OPERATIONS:
Net investment income............................................................... $ 16,285,797
Net realized gain on investments.................................................... 352,691
Net unrealized gain on investments during the period................................ 14,714,273
------------
Net increase in net assets resulting from operations.............................. 31,352,761
------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares.......................... (16,143,287)
Investor Shares............................... (33,324)
Distributions from capital gains: Institutional Shares.............................. (108,600)
Investor Shares................................... (586)
------------
(16,285,797)
------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1)..................... 414,224,302
Investor Shares................................... 2,271,045
Proceeds from shares issued on reinvestment of dividends: Institutional Shares...... 1,251,063
Investor Shares........... 33,546
Cost of capital stock repurchased: Institutional Shares............................. (80,173,329)
Investor Shares.................................. (452,332)
------------
Net increase in net assets resulting from capital stock transactions.............. 337,154,295
------------
INCREASE IN NET ASSETS.......................................................... 352,221,259
NET ASSETS:
Beginning of period................................................................. -0-
------------
End of period....................................................................... $352,221,259
------------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1).......................................... 41,249,130
Investor Shares........................................................ 221,371
Shares issued on reinvestment of dividends: Institutional Shares.................... 121,197
Investor Shares......................... 3,224
Shares repurchased: Institutional Shares............................................ (7,830,385)
Investor Shares................................................. (43,654)
------------
Net increase...................................................................... 33,720,883
Shares outstanding, beginning of period............................................. -0-
------------
Shares outstanding, end of period................................................... 33,720,883
------------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
62
<PAGE>
BNY HAMILTON INTERMEDIATE INVESTMENT GRADE FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL INVESTOR
SHARES SHARES
------------- ---------------
FOR THE
PERIOD
APRIL 1, FOR THE PERIOD
1997* MAY 1, 1997*
THROUGH THROUGH
DECEMBER 31, DECEMBER 31,
1997 1997
------------- ---------------
<S> <C> <C>
PER SHARE DATA:
Net asset value at beginning of period..................... $ 10.00 $ 10.08
------------- ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income...................................... 0.47 0.40
Net realized and unrealized gain on investments............ 0.45 0.37
------------- ------
Total from investment operations......................... 0.92 0.77
------------- ------
DIVIDENDS
Dividends from net investment income....................... (0.47) (0.40)
------------- ------
Net asset value at end of period........................... $ 10.45 $ 10.45
------------- ------
TOTAL RETURN:.............................................. 9.34%** 7.76%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)................ $ 350,330 $ 1,891
Ratio to average net assets of:
Expenses................................................. 0.80%*** 1.06%***
Net investment income.................................... 6.14%*** 5.74%***
Portfolio turnover rate.................................... 81% 81%
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
63
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY
AMOUNT RATINGS RATE DATE MARKET VALUE
- ---------- ----------------- ----------- --------- ------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS--97.4%
CERTIFICATE OF PARTICIPATION--1.2%
$ 500,000 New York Certificate of Participation............ Baa1/BBB+ 5.000% 03/01/00 $ 508,900
------------
EDUCATION--11.8%
235,000 Dutchess County, New York IDA Civic Facility
Revenue, Bard College............................ A3/NR 6.000 11/01/99 241,646
250,000 New York State Dormitory Authority, Columbia
University....................................... Aaa/AA+ 5.000 07/01/00 256,130
1,000,000 New York State Dormitory Authority, Cornell
University....................................... Aa2/AA 4.600 07/01/00 1,016,520
1,700,000 New York State Dormitory Authority, New York
University, MBIA Insured+........................ Aaa/AAA 5.500 07/01/04 1,818,592
1,000,000 New York State Dormitory Authority, Strong
Memorial Hospital (University of Rochester)...... A1/A+ 5.000 07/01/02 1,031,250
500,000 New York State Dormitory Authority,
(University of Rochester)........................ A1/A+ 4.700 07/01/00 508,250
------------
4,872,388
------------
GENERAL OBLIGATION--6.5%
500,000 Monroe County, New York, MBIA Insured+........... Aaa/AAA 4.800 06/01/02 514,055
60,000 Monroe County, New York, Series B, Unrefunded
Balance, Callable 6/01/98 @ 102.................. Aa2/AA 7.000 06/01/03 61,975
500,000 New York State, General Obligation............... A2/A 4.600 03/15/01 508,160
1,000,000 New York State, General Obligation............... A2/A 5.125 06/15/04 1,045,540
500,000 New York State Municipal Bond Bank Agency (City
of Rochester).................................... NR/A+ 6.400 03/15/01 533,805
------------
2,663,535
------------
HEALTH CARE--2.6%
500,000 New York State Dormitory Authority, Nursing Home
Our Lady of Consolation.......................... NR/AA 5.200 08/01/05 522,585
500,000 New York State Medical Care Facilities--Downstate
Medical Center................................... NR/AAA 5.700 02/15/04 537,330
------------
1,059,915
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
64
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY
AMOUNT RATINGS RATE DATE MARKET VALUE
- ---------- ----------------- ----------- --------- ------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOUSING--2.5%
$ 500,000 New York State Mortgage Revenue--Homeowner Mtg
Series 39........................................ Aa2/NR 5.300% 04/01/04 $ 519,230
500,000 New York State Mortgage Revenue--Homeowner Mtg
Series 37-A...................................... Aa2/NR 5.850 04/01/06 521,600
------------
1,040,830
------------
INDUSTRIAL DEVELOPMENT BONDS--6.2%
500,000 Hempstead Town--New York Industrial Development
Agency........................................... Aaa/A3 4.875 12/01/06 514,445
1,000,000 Hempstead Town--New York Industrial Development
Agency........................................... Aaa/A3 5.000 12/01/07 1,037,260
1,000,000 Westchester County Industrial Development Agency
Series A......................................... Aaa/AAA 4.850 07/01/00 1,019,560
------------
2,571,265
------------
PREFUNDED/ESCROWED/US GUARANTEED--3.6%
915,000 New York Housing Finance Agency, ETM State
University Construction.......................... Aaa/AAA 6.500 11/01/06 996,554
175,000 Puerto Rico Aqueduct & Sewer Authority, ETM...... Aaa/AAA 4.200 07/01/00 174,652
302,000 Puerto Rico Aqueduct & Sewer Authority, ETM...... Aaa/AAA 4.500 07/01/02 311,540
------------
1,482,746
------------
SPECIAL TAX--22.0%
1,000,000 MTA Dedicated Tax, MBIA Insured+................. Aaa/AAA 6.000% 04/01/05 1,106,490
1,000,000 Muncipal Assistance Corp. for New York City...... Aa2/AA- 4.800 07/01/03 1,028,700
2,500,000 Muncipal Assistance Corp. for New York City...... Aa2/AA- 6.000 07/01/05 2,768,325
1,225,000 New York, New York City Transitional Finance
Authority Revenue................................ Aa3/AA 5.000 08/15/05 1,278,385
1,000,000 New York State Local Government Assistance
Corp. ........................................... A3/A+ 5.300 04/01/00 1,026,990
300,000 New York State Local Government Assistance
Corp. ........................................... A3/A+ 6.700 04/01/00 317,040
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
65
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY
AMOUNT RATINGS RATE DATE MARKET VALUE
- ---------- ----------------- ----------- --------- ------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 655,000 New York State Local Government Assistance
Corp. ........................................... A3/A+ 5.000% 04/01/02 $ 674,388
340,000 New York State Local Government Assistance
Corp. ........................................... A3/A+ 6.750 04/01/02 370,257
500,000 New York State Local Government Assistance
Corp. ........................................... A3/A+ 4.800 04/01/05 511,800
------------
9,082,375
------------
STATE APPROPRIATION--19.1%
1,000,000 Metropolitan Transportation Authority Service
Contract Revenue................................. Baa1/BBB+ 5.750 07/01/07 1,072,590
250,000 New York State Dormitory Authority, Albany
County........................................... Baa1/BBB+ 5.500 04/01/08 262,777
500,000 New York State Dormitory Authority, State
University Educational Facility Series A......... A3/A- 5.500 05/15/07 535,885
300,000 New York State Dormitory Authority, State
University....................................... A3/A- 5.200 05/15/03 313,251
650,000 New York State Dormitory Authority, Upstate
Community Colleges............................... Baa1/BBB+ 5.600 07/01/07 689,806
500,000 New York State Medical Care Facilities-- Mental
Health........................................... Baa1/A- 4.600 08/15/99 504,570
505,000 New York State Medical Care Facilities-- Mental
Health,.......................................... Baa1/A- 4.700 08/15/01 512,024
480,000 New York State Medical Care Facilities-- Mental
Health........................................... Baa1/A- 6.100 08/15/02 513,974
1,000,000 New York State Thruway Authority Service Contract
Highway & Bridge Trust Fund...................... Baa1/BBB+ 5.625 04/01/07 1,061,730
500,000 New York State Thruway Authority Service Contract
Highway & Bridge Trust Fund...................... Baa1/BBB+ 5.750 04/01/08 530,605
1,000,000 New York State Urban Development Corp.-- Cornell
Center........................................... Baa1/BBB+ 5.900 01/01/07 1,058,660
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
66
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY
AMOUNT RATINGS RATE DATE MARKET VALUE
- ---------- ----------------- ----------- --------- ------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 750,000 New York State Urban Development Corp.--
Correctional Capital Facility--Series 7.......... Baa1/BBB+ 6.000% 01/01/07 $ 815,723
------------
7,871,595
------------
TRANSPORTATION--12.7%
1,500,000 New York State Thruway Authority General
Revenue.......................................... Aa3/AA- 5.250 01/01/01 1,547,805
650,000 Port Authority New York & New Jersey............. A1/AA- 5.100 08/01/01 673,185
500,000 Port Authority New York & New Jersey............. A1/AA- 6.100 10/15/02 542,590
1,000,000 Port Authority New York & New Jersey............. A1/AA- 5.300 08/01/03 1,053,230
500,000 Port Authority New York & New Jersey
Construction..................................... A1/AA- 4.750 10/01/08 513,620
500,000 Triborough Bridge & Tunnel Authority General
Purpose.......................................... Aa3/A+ 4.300 01/01/02 503,655
400,000 Triborough Bridge & Tunnel Authority General
Purpose.......................................... Aa3/A+ 4.600 01/01/05 407,428
------------
5,241,513
------------
UTILITY--6.8%
300,000 New York State Environmental Facility Corp. PCR
State Water...................................... Aaa/AAA 6.000 05/15/02 322,524
750,000 New York State Environmental Facility Corp. PCR
State Water...................................... Aa2/A- 4.900 06/15/09 763,815
400,000 New York State Environmental Facility Corp. PCR
Water Revol. .................................... Aaa/AAA 6.300 09/15/00 423,656
1,250,000 New York State Power Authority................... Aa2/AA- 4.900 01/01/06 1,291,113
------------
2,801,108
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
67
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY
AMOUNT RATINGS RATE DATE MARKET VALUE
- ---------- ----------------- ----------- --------- ------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
OTHER--2.4%
$ 350,000 New York City Trust for Cultural Resources Museum
MOMA--AMBAC Insured+............................. Aaa/AAA 6.300% 01/01/03 $ 383,957
135,000 New York City Trust for Cultural Resources Museum
MOMA--AMBAC Insured+............................. Aaa/AAA 4.900 01/01/01 138,595
205,000 New York City Trust for Cultural Resources Museum
MOMA--AMBAC Insured+............................. Aaa/AAA 4.900 01/01/01 210,225
75,000 New York City Trust for Cultural Resources Museum
MOMA--AMBAC Insured+............................. Aaa/AAA 5.000 01/01/02 77,635
165,000 New York City Trust for Cultural Resources Museum
MOMA--AMBAC Insured+............................. Aaa/AAA 5.000 01/01/02 170,490
------------
980,902
------------
TOTAL MUNICIPAL BONDS (Cost $38,772,334)......... 40,177,072
------------
TAX-EXEMPT MONEY MARKET FUND--1.1%
474,180 Dreyfus New York Municipal Cash Management
(Cost $474,180).................................. NR/NR 3.990%(a) 474,180
------------
TOTAL INVESTMENTS (Cost $39,246,514)
(b)--98.5%....................................... 40,651,252
Other assets less liabilities--1.5%.............. 632,118
------------
NET ASSETS--100.0%............................... $ 41,283,370
------------
</TABLE>
NR NOT RATED BY MOODY'S OR STANDARD & POOR'S (S&P).
* RATINGS ARE NOT AUDITED BY KPMG PEAT MARWICK LLP.
+ INSURED OR GUARANTED BY THE INDICATED MUNICIPAL BOND INSURANCE CORPORATION.
(a) REPRESENTS ANNUALIZED YIELD AT DECEMBER 31, 1997.
(b) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES. AT DECEMBER 31, 1997 NET UNREALIZED APPRECIATION WAS $1,404,738
BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED OF AGGREGATE
GROSS UNREALIZED APPRECIATION OF $1,404,738 AND AGGREGATE GROSS UNREALIZED
DEPRECIATION OF $0.
SEE NOTES TO FINANCIAL STATEMENTS.
68
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value
(Identified cost $39,246,514)....... $40,651,252
Receivables:
Interest............................ 732,845
Capital stock sold.................. 243,099
Other assets.......................... 84,099
-----------
TOTAL ASSETS...................... 41,711,295
-----------
LIABILITIES:
Payables:
Investments purchased............... 259,898
Dividends........................... 95,627
Capital stock repurchased........... 20,000
Services provided by The Bank of New
York and Administrator............ 24,796
Accrued expenses and other
liabilities......................... 27,604
-----------
TOTAL LIABILITIES................. 427,925
-----------
NET ASSETS:............................. $41,283,370
-----------
SOURCES OF NET ASSETS:
Capital stock @ par................... $ 3,924
Capital surplus....................... 40,085,950
Accumulated net realized loss on
investments......................... (211,242)
Net unrealized appreciation on
investments......................... 1,404,738
-----------
NET ASSETS.............................. $41,283,370
-----------
INSTITUTIONAL SHARES:
Net assets............................ $30,915,288
-----------
Shares outstanding.................... 2,938,263
-----------
Net asset value, offering price and
repurchase price per share.......... $ 10.52
-----------
INVESTOR SHARES:
Net assets............................ $10,368,082
-----------
Shares outstanding.................... 985,415
-----------
Net asset value, offering price and
repurchase price per share.......... $ 10.52
-----------
Institutional Shares authorized at $.001
par value............................. 200,000,000
Investor Shares authorized at $.001 par
value................................. 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest............................... $1,889,971
----------
EXPENSES:
Advisory............................... 193,227
Administration......................... 77,286
12b-1 fee--Investor Shares............. 19,554
Accounting Services.................... 60,000
Custodian.............................. 12,343
Cash management........................ 1,619
Transfer agent......................... 47,324
Audit.................................. 2,366
Insurance.............................. 1,792
Directors.............................. 9,172
Reports to shareholders................ 7,010
Registration and filings............... 23,272
Legal.................................. 1,466
Other.................................. 17,159
----------
TOTAL EXPENSES....................... 473,590
Fees waived by The Bank of New York.... (106,259)
----------
NET EXPENSES......................... 367,331
----------
NET INVESTMENT INCOME................ 1,522,640
----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS--
Net realized gain on investments....... 105,649
Increase in unrealized appreciation on
investments during the year.......... 785,584
----------
Net realized and unrealized gain on
investments.......................... 891,233
----------
Net increase in net assets resulting
from operations...................... $2,413,873
----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
69
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1997 1996
---------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................................ $ 1,522,640 $ 1,511,209
Net realized gain on investments................................................. 105,649 144,496
Increase in unrealized appreciation (depreciation) on investments during the
year........................................................................... 785,584 (335,080)
---------------- -----------------
Net increase in net assets resulting from operations........................... 2,413,873 1,320,625
---------------- -----------------
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares....................... (870,111) -0-
Investor Shares............................ (652,529) (1,511,209)
---------------- -----------------
(1,522,640) (1,511,209)
---------------- -----------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1).................. 37,610,007 -0-
Investor Shares................................ 3,461,199 6,200,028
Proceeds from shares issued on reinvestment of dividends: Institutional Shares... 99,174 -0-
Investor Shares........ 323,282 493,674
Cost of capital stock repurchased: Institutional Shares.......................... (7,770,455) -0-
Investor Shares (Note 1)...................... (30,067,836) (10,697,287)
---------------- -----------------
Net increase (decrease) in net assets resulting from capital stock
transactions.................................................................. 3,655,371 (4,003,585)
---------------- -----------------
INCREASE (DECREASE) IN NET ASSETS............................................ 4,546,604 (4,194,169)
NET ASSETS:
Beginning of year................................................................ 36,736,766 40,930,935
---------------- -----------------
End of year...................................................................... $ 41,283,370 $ 36,736,766
---------------- -----------------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1)....................................... 3,676,326 -0-
Investor Shares..................................................... 336,663 607,912
Shares issued on reinvestment of dividends: Institutional Shares................. 9,559 -0-
Investor Shares................. 31,281 48,215
Shares repurchased: Institutional Shares......................................... (747,622) -0-
Investor Shares (Note 1)..................................... (2,953,489) (1,044,692)
---------------- -----------------
Net increase (decrease)........................................................ 352,718 (388,565)
Shares outstanding, beginning of year............................................ 3,570,960 3,959,525
---------------- -----------------
Shares outstanding, end of year.................................................. 3,923,678 3,570,960
---------------- -----------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
70
<PAGE>
BNY HAMILTON INTERMEDIATE NEW YORK TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL
SHARES
-------------
FOR THE
PERIOD INVESTOR SHARES
APRIL 1, ------------------------------------------------
1997*
THROUGH YEAR ENDED DECEMBER 31,
DECEMBER 31, ------------------------------------------------
1997 1997 1996 1995 1994 1993
------------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of period....... $ 10.16 $ 10.29 $ 10.34 $ 9.59 $ 10.37 $ 9.97
------------- -------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income........................ 0.31 0.39 0.40 0.39 0.39 0.38
Net realized and unrealized gain (loss) on
investments................................ 0.36 0.23 (0.05) 0.75 (0.78) 0.40
------------- -------- ------- ------- ------- -------
Total from investment operations........... 0.67 0.62 0.35 1.14 (0.39) 0.78
------------- -------- ------- ------- ------- -------
DIVIDENDS
Dividends from net investment income......... (0.31) (0.39) (0.40) (0.39) (0.39) (0.38)
------------- -------- ------- ------- ------- -------
Net asset value at end of period............. $ 10.52 $ 10.52 $ 10.29 $ 10.34 $ 9.59 $ 10.37
------------- -------- ------- ------- ------- -------
TOTAL RETURN:+............................... 6.69%** 6.19% 3.47% 12.08% (3.81)% 7.99%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's
omitted)................................... $30,915 $ 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 and Administrator............... 0.90%*** 1.02% 0.90% 0.90% 0.85% 0.68%
Expenses, prior to waiver from The Bank of
New York and Administrator............... 1.15%*** 1.32% 1.18% 1.20% 1.20% 1.30%
Net investment income, net of waiver from
The Bank of New York and Administrator... 3.98%*** 3.88% 3.91% 3.89% 3.92% 3.74%
Portfolio turnover rate...................... 21% 21% 22% 4% 18% 6%
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** 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.
71
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS--98.4%
EDUCATION--9.6%
$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 $ 1,015,690
2,000,000 Georgetown University, Callable 4/01/98 @102........ A1/A+ 8.125 04/01/08 2,060,460
2,250,000 Indiana Secondary Market Educational Loans.......... Aaa/NR 5.300 09/01/99 2,289,668
5,950,000 New England Student Loan Revenue Series A........... Aaa/NR 5.800 03/01/02 6,275,168
1,115,000 New England Student Loan Revenue Series D........... Aaa/NR 6.000 09/01/99 1,149,007
110,000 New Jersey State Educational Facility Authority
Revenue (Jersey City State College), Series D, MBIA
Insured+............................................ Aaa/AAA 5.400 07/01/01 114,983
100,000 New Jersey State Educational Facility Authority
Revenue (Princeton University), Series F............ Aaa/AAA 5.100 07/01/99 101,834
100,000 New Jersey State Educational Facility Authority
Revenue (Richard Stockton State College), Series
B................................................... Aaa/AAA 5.700 07/01/99 102,642
2,475,000 New York State Dormitory Authority, Strong Memorial
Hospital (University of Rochester), Callable 7/01/06
@100................................................ A1/A+ 5.750 07/01/14 2,614,540
990,000 New York State Dormitory Authority, University of
Rochester........................................... A1/A+ 6.200 07/01/02 1,011,225
1,600,000 Pennsylvania State Higher Educational Facility
Authority College & University Revenue.............. NR/AA- 5.000 11/01/00 1,643,664
2,185,000 Texas A & M University Revenue, Callable 5/15/07
@100................................................ Aa2/AA 5.000 05/15/08 2,269,363
4,000,000 Texas A & M University Revenue, Callable 7/01/03
@100................................................ Aaa/AAA 5.000 07/01/06 4,123,000
1,000,000 University of Texas................................. Aaa/AAA 6.700 07/01/05 1,101,330
-------------
25,872,574
-------------
GENERAL OBLIGATION--28.7%
1,000,000 Aldine Texas Independent School District, Callable
2/15/07 @100........................................ Aaa/AAA 5.375 02/15/09 1,057,840
100,000 Bergen County New Jersey............................ Aaa/NR 5.550 12/01/00 104,476
250,000 Bergen County New Jersey............................ Aaa/NR 5.500 12/01/01 263,740
4,000,000 California State.................................... A1/A+ 5.000 10/01/02 4,158,960
250,000 Cherry Hill Township New Jersey..................... Aa2/NR 5.800 06/01/04 269,723
3,000,000 Connecticut State Series A.......................... Aa3/AA- 5.000 05/15/04 3,125,310
990,000 Connecticut State Series B, Callable 7/15/00 @102... Aa/AA- 6.600 07/15/01 1,069,190
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
72
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$2,500,000 Delaware State Series A............................. Aa1/AA+ 5.125% 04/01/05 $ 2,630,000
2,785,000 Du Page County Illinois............................. Aaa/AAA 3.750 10/01/01 2,755,117
1,450,000 Georgia State....................................... Aaa/AA+ 6.750 09/01/98 1,478,362
5,000,000 Georgia State Series C.............................. Aaa/AA+ 5.250 07/01/08 5,354,300
200,000 Gloucester County New Jersey........................ A1/AA- 5.000 09/01/03 207,880
990,000 Illinois State (Anti-Pollution), Series D........... Aa3/AA 4.000 01/01/00 990,376
500,000 Illinois State...................................... A1/AA- 5.500 08/01/01 523,600
2,840,000 Kings County Washington Series A.................... Aa1/AA+ 5.000 01/01/04 2,954,821
2,000,000 Maryland State & Local Facilities Loan--1st Series,
Callable 3/01/07 @101.50............................ Aaa/AAA 5.000 03/01/11 2,052,740
2,185,000 Maryland State & Local Facilities Loan--2nd
Series.............................................. Aaa/AAA 5.250 06/15/05 2,324,032
2,000,000 Maryland State & Local Facilities Loan--3rd Series,
Callable 10/15/06 @100.............................. Aaa/AAA 5.000 10/15/07 2,093,980
1,485,000 Massachusetts Commonwealth--Construction Loan Series
A................................................... A1/A+ 7.200 02/01/99 1,537,510
1,485,000 Massachusetts Commonwealth--Construction Loan Series
A................................................... A1/A+ 5.100 11/01/02 1,544,801
2,000,000 Massachusetts Commonwealth--Construction Loan Series
D................................................... Aaa/AAA 5.125 11/01/03 2,095,780
1,065,000 Mesquite Texas Independent School District #1....... Aaa/AAA 8.125 08/15/01 1,209,350
2,000,000 Milwaukee Wisconsin Metropolitan Sewer District
Series A............................................ Aa/AA 6.250 10/01/04 2,230,580
2,070,000 Minnesota State, Callable 11/01/06 @100............. Aaa/AAA 5.000 11/01/08 2,146,466
250,000 Monroe County, New York............................. Aaa/AAA 6.000 06/01/11 277,942
990,000 Nevada State Municipal Bond Bank Project #4
Series A, Callable 8/01/99 @102..................... Aa2/AA 6.700 02/01/01 1,048,697
3,215,000 Nevada State Municipal Bond Bank Project #52 Series
A................................................... Aa2/AA 6.375 05/15/06 3,663,460
4,470,000 Nevada State Series A............................... Aa/AA 4.375 08/01/03 4,504,017
250,000 New Jersey State.................................... Aa1/AA+ 5.800 08/01/01 264,790
2,000,000 New Jersey State Series E........................... Aa/AA+ 5.000 07/15/04 2,085,400
2,650,000 Pennsylvania State--1st Series, Callable 4/15/03
@101.50............................................. Aaa/AAA 5.000 04/15/09 2,719,801
2,970,000 Pennsylvania State--1st Series...................... Aa3/AA- 5.000 05/01/03 3,079,860
3,000,000 Rhode Island--Construction Capital Loan, Callable
8/01/07 @101, MBIA Insured+......................... Aaa/AAA 5.000 08/01/09 3,088,770
1,000,000 Texas State Public Authority Building (State
Technical College), MBIA Insured+................... Aaa/AAA 6.100 08/01/04 1,106,310
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
73
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 500,000 Tulsa Oklahoma...................................... Aa2/AA 5.150% 06/01/03 $ 523,200
1,000,000 Washington State Series A........................... Aa1/AA+ 6.700 02/01/05 1,145,040
1,500,000 Washington State Series R-93B....................... Aa/AA 5.375 10/01/08 1,616,760
4,330,000 Washington State Series R-92D
(Motor Vechicle Fuel Tax)........................... Aa1/AA+ 6.250 09/01/07 4,940,270
3,000,000 Wisconsin State Series B............................ Aa2/AA 5.250 05/01/07 3,190,920
-------------
77,434,171
-------------
HEALTH CARE--2.7%
2,000,000 Indiana Health Facility Financing Authority Hospital
Revenue--(Charity Obligation Group), Series D....... Aa2/AA+ 5.000 11/01/26 2,041,940
1,335,000 New York State Medical Care Facilities Financial
Agency--Hospital & Nursing Home, Series A........... Aa2/AA+ 7.000 02/15/99 1,380,217
1,000,000 New York State Medical Care Facilities Financial
Agency Series D..................................... Aa2/AA+ 5.100 02/15/05 1,033,090
640,000 New York State Medical Care Facilities
(St Lukes Hospital), Series A, Callable 2/15/00
@102................................................ Aa2/AA 7.400 02/15/09 687,686
2,000,000 Pennsylvania State Higher Educational Facilities
Authority--(University of Pennsylvania), Series B... Aa3/AA 5.000 01/01/04 2,072,280
-------------
7,215,213
-------------
HOUSING--2.5%
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 1,011,710
500,000 Connecticut State Housing Financial Authority--
Housing Mortgage Finance Program Series C-2......... Aa2/AA 5.300 11/15/03 519,735
2,250,000 Housing New York Corporation Revenue................ A1/AA 6.000 11/01/03 2,411,775
1,615,000 New York State Mortgage Agency--Homeowner Mortgage,
Series EE-3, Callable 6/07/00 @102.................. Aa2/NR 7.700 10/01/10 1,714,371
990,000 New York State Mortgage Agency--Homeowner Mortgage,
Series FF, Callable 4/01/08 @100.................... Aa2/NR 7.850 10/01/08 1,012,423
-------------
6,670,014
-------------
INDUSTRIAL DEVELOPMENT REVENUE--0.8%
2,000,000 Georgetown County South Carolina Pollution Control
Facilities (International Paper Company Project),
Callable 6/15/02 @102............................... A3/A- 6.250 06/15/05 2,161,660
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
74
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 75,000 Gulf Coast Waste Disposable Authority, PCR (Champion
International--Atlantic Richfield), Callable 5/01/98
@100................................................ Baa2/NR 5.800% 05/01/98 $ 75,149
-------------
2,236,809
-------------
PRE-REFUNDED ESCROWED--19.7%
85,000 Austin Texas Utility System Series B, ETM, Callable
11/15/98 @102....................................... A2/A 7.250 11/15/03 97,790
1,865,000 Clearwater Florida Utility Revenue Series 1978,
ETM................................................. Aaa/AAA 6.100 12/01/04 1,949,261
990,000 Connecticut State Clean Water Funding Revenue,
Callable 1/01/01 @102............................... Aaa/AAA 6.750 07/01/04 1,077,942
1,755,000 Delaware River Port Authority Pennsylvania & New
Jersey River Bridges, ETM........................... Aaa/AAA 6.500 01/15/11 1,975,621
790,000 Fort Worth Texas General Purpose Series A, ETM,
Callable 3/01/98 @100............................... Aaa/AAA 4.250 03/01/01 794,779
1,235,000 Illinois State Toll Highway Authority, Callable
2/09/98 @100.50..................................... Aaa/AAA 6.750 01/01/10 1,364,910
2,555,000 Jacksonville Florida Electric Authority Revenue
Second Installment, ETM............................. Aaa/AA 5.250 07/01/01 2,605,078
1,615,000 Kentucky State Turnpike Authority Toll Road Revenue,
ETM................................................. Aaa/AAA 6.125 07/01/08 1,740,130
745,000 Manatee County Florida Water Revenue, ETM, Callable
2/09/98 @101........................................ Aaa/AAA 4.200 03/01/05 738,191
990,000 Minnesota State..................................... NR/AAA 6.625 08/01/06 1,072,823
2,750,000 Monroe County New York, Callable 6/01/04 @102....... Aaa/AAA 6.000 06/01/11 2,999,563
815,000 New Jersey State Highway Authority--Garden State
Parkway General Revenue, ETM, Callable 2/09/98
@100................................................ NR/AAA 6.500 01/01/11 916,353
1,000,000 New Jersey State.................................... Aaa/AAA 7.250 04/15/01 1,047,260
5,649,000 New Jersey State Turnpike Authority Revenue, ETM,
Callable 2/09/98 @100............................... Aaa/NR 5.700 05/01/13 6,081,770
2,180,000 New Jersey State Turnpike Authority Revenue Series
C, ETM, Callable 2/11/98 @100....................... Aaa/AAA 5.200 01/01/08 2,298,745
120,000 New Jersey State Turnpike Authority Revenue Series
E, ETM, Callable 2/11/98 @ 100...................... Aaa/AAA 5.875 01/01/08 129,016
2,075,000 New Jersey State Turnpike Authority Revenue Series
G, ETM, Callable 2/09/98 @100....................... Aaa/AAA 5.750 01/01/09 2,234,775
2,825,000 New York State Care Facilities Finance Agency (St
Luke's Hospital) Series B........................... Aaa/AAA 7.400 02/15/09 3,070,634
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
75
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 558,370 New York State Dormitory Authority, GNMA
Collateralized, Elizabeth A. Horton Memorial
Hospital............................................ NR/NR 7.000% 09/25/06 $ 663,956
990,000 New York State Dormitory Authority Revenue-- Cooper
Union............................................... Aaa/AAA 7.000 07/01/08 1,100,939
180,000 New York State Dormitory Authority Revenue, State
University Educational Facilities Series A.......... NR/AAA 7.500 05/15/02 197,474
1,435,000 New York State Dormitory Authority Revenue State
University Educational Facilities Series A.......... A3/A- 7.000 05/15/03 1,521,229
2,475,000 New York State Dormitory Authority Revenue, State
University Educational Facilities Series A.......... Aaa/A 7.625 05/15/05 2,722,203
178,000 New York NY City Housing Authority, (Dyckman Houses
NYC--10 HUD), Callable 5/01/98 @101................. Aaa/NR 3.250 11/01/98 177,117
1,485,000 New York State Housing Finance Agency State
University Construction Series A, ETM............... Aaa/AAA 8.000 05/01/11 1,900,295
3,075,000 New York State Power Authority Revenue & General
Purpose Series D, ETM, Callable 2/09/98 @100........ Aaa/AAA 5.875 01/01/10 3,362,420
890,000 New York State Power Authority Revenue & General
Purpose Series F, ETM, Callable 2/09/98 @100........ Aaa/AAA 5.500 01/01/10 953,048
1,370,000 New York State Power Authority Revenue & General
Purpose Series H, ETM............................... Aaa/AAA 7.500 01/01/10 1,619,682
3,765,000 Oklahoma State Turnpike Authority Revenue Series A,
ETM, Callable 2/09/98 @100.......................... NR/AAA 4.700 01/01/06 3,880,435
300,000 Plano Texas Independent School District, ETM,
Callable 3/15/98 @100............................... Aa2/AAA 4.000 03/15/99 300,552
300,000 Plano Texas Independent School District, ETM,
Callable 3/15/98 @100............................... Aa2/AAA 4.000 03/15/00 300,024
985,000 Sacramento California Municipal Utility District
Revenue Series A, ETM, Callable 8/06/97 @100........ Aaa/AAA 5.500 02/01/11 1,045,558
990,000 Suffolk County NY Water Authority Series V, ETM,
Callable 6/01/02.................................... NR/AAA 7.000 06/01/06 1,087,663
-------------
53,027,236
-------------
SPECIAL TAX--3.8%
2,585,000 Chicago Illinois Sales Tax Revenue.................. Aaa/AA2 6.000 01/01/07 2,883,542
510,000 Clark County Nevada--Las Vegas Convention & Visitors
Authority........................................... Aaa/AA3 5.400 07/01/03 539,264
1,000,000 Connecticut State Special Obligation Revenue Series
B................................................... A1/AA- 6.100 09/01/08 1,132,480
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
76
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$1,000,000 Connecticut State Unemployment Compensation Advance
Fund Revenue Series A............................... Aaa/AAA 5.500% 11/15/00 $ 1,041,100
350,000 Illinois State Sales Tax Revenue Series V........... Aa3/AAA 5.625 06/15/01 367,741
155,000 Kentucky Infrastructure Authority Series A,
Unrefunded Balance.................................. NR/A 7.625 08/01/03 165,945
500,000 Metropolitan Pier & Exposition Authority (McCormick
Project), Series A.................................. A2/A+ 5.600 06/15/01 523,005
275,000 Municipal Assistance Corp for City of New York
Series E............................................ Aa2/AA- 5.500 07/01/01 288,164
2,000,000 Municipal Assistance Corp for City of New York
Series E............................................ Aa2/AA- 6.000 07/01/05 2,214,660
990,000 Municipal Assistance Corp for City of New York
Series 68, Callable 7/01/99 @ 102................... Aa2/AA 7.100 07/01/00 1,053,478
-------------
10,209,379
-------------
STATE APPROPRIATION--10.3%
100,000 Connecticut State Resource Recovery Authority Series
A................................................... NR/AA- 5.750 11/15/00 104,533
1,100,000 Indiana Bond Bank Revenue Series A.................. NR/AAA 5.750 02/01/06 1,202,245
1,980,000 Kentucky State Turnpike Authority Economic
Development Road Revenue (Revitalization
Projects)........................................... Aaa/AAA 5.300 07/01/04 2,095,850
2,000,000 Kentucky State Turnpike Authority Economic
Development Road Revenue (Revitalization
Projects)........................................... Aaa/A 5.500 07/01/08 2,176,380
1,000,000 Massachusetts Bay Transportation Authority Series
A................................................... A1/A+ 5.400 03/01/08 1,074,150
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 1,751,181
50,000 New York State Dormitory Authority State University
Educational Facilities Series A, Unrefunded Balance,
Callable 5/15/99 @102............................... Baa1/BBB+ 7.000 05/15/03 52,879
2,475,000 New York State Dormitory Authority State University
Educational Facilities Series B..................... A3/A- 5.100 05/15/02 2,564,001
1,980,000 New York State Dormitory Authority State University
Educational Facilities Series B..................... A3/A- 5.250 05/15/10 2,071,714
1,930,000 New York State Local Government Assistance Corp.
Series A............................................ A3/A+ 6.700 04/01/00 2,039,624
3,805,000 New York State Local Government Assistance Corp.
Series A............................................ A3/A+ 6.000 04/01/06 4,204,068
1,980,000 New York State Local Government Assistance Corp.
Series C............................................ A3/A+ 6.000 04/01/12 2,227,401
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
77
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$1,500,000 New York State Urban Development Corp. Series A..... Baa1/BBB+ 5.450% 01/01/07 $ 1,571,700
2,005,000 New York State Thruway Authority Service Contract
Revenue, Callable 1/01/01 @102...................... Baa1/BBB+ 7.000 01/01/02 2,179,896
2,105,000 Port Seattle Washington Revenue Series A............ Aaa/AA3 6.000 10/01/07 2,364,189
-------------
27,679,811
-------------
TRANSPORTATION--9.0%
1,150,000 Delaware Transportation Authority System Revenue.... A1/AA 6.125 07/01/03 1,239,297
1,500,000 Kansas State Department of Transportation Highway
Revenue Series A.................................... Aa/AA 5.375 03/01/07 1,611,600
385,000 Kentucky State Turnpike Authority Toll Road Revenue
Series A, Unrefunded Balance........................ A/A 8.500 07/01/04 390,286
2,050,000 Metropolitan Transportation Authority Facility
Revenue Series 8.................................... Baa1/BBB+ 5.500 07/01/06 2,157,974
1,000,000 New York State Bridge Authority Revenue............. A1/AA- 5.000 01/01/07 1,044,200
2,000,000 New Jersey State Highway Authority Garden State
Parkway General Revenue............................. Aa/AA- 5.150 01/01/07 2,108,960
3,025,000 New Jersey State Transit Corporation (Capital Grant
Anticipation Notes), Series A....................... Aaa/AAA 5.400 09/01/02 3,161,065
640,000 New Jersey State Turnpike Authority Revenue......... NR/AAA 10.375 01/01/03 744,230
990,000 Pennsylvannia State Turnpike Revenue Series O....... Aaa/AAA 5.350 12/01/02 1,042,757
3,630,000 Port Authority New York & New Jersey 52nd Series,
Callable 11/01/99 @100.............................. A1/AA- 9.000 11/01/14 3,938,913
100,000 South Jersey Transit Authority New Jersey
Transportation System Revenue, MBIA Insured+........ Aaa/AAA 5.500 11/01/01 105,276
2,750,000 Triborough Bridge & Tunnel Authority Series V....... Aa3/A+ 6.500 01/01/01 2,942,555
1,000,000 Triborough Bridge & Tunnel Authority Series Q,
Callable 1/01/00 @101.50............................ Aa3/A+ 6.750 01/01/03 1,064,820
2,130,000 Triborough Bridge & Tunnel Authority Series Q....... Aa3/A+ 6.750 01/01/09 2,540,195
-------------
24,092,128
-------------
UTILITY--10.5%
5,000,000 Austin Texas Utility System Revenue Series A........ Aaa/A2 5.000 05/15/07 5,188,350
1,915,000 Austin Texas Utility System Revenue Series A,
Unrefunded Balance, Callable 11/15/98 @102.......... A2/A 7.250 11/15/03 2,007,590
100,000 Bergen County New Jersey Utility Authority Solid
Waste System Revenue Series A....................... Aaa/AAA 5.500 06/15/98 100,804
100,000 Bergen County New Jersey Utility Authority Water
Pollution Control Revenue Series B.................. Aaa/AAA 5.200 12/15/00 103,396
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
78
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$ 200,000 Cape May County New Jersey Utility Authority Solid
Waste Revenue....................................... Aaa/A1 5.000% 08/01/03 $ 207,480
2,970,000 Charlotte North Carolina Water & Sewer.............. Aaa/AAA 5.500 05/01/04 3,166,169
1,095,000 Consumers Public Power District--Nuclear Facility
Revenue............................................. A1/NR 5.100 01/01/03 1,095,252
990,000 Georgia Municipal Electrical Authority Power Revenue
Series Z............................................ A3/A 5.000 01/01/04 1,019,453
1,000,000 Grant County Washington Public Utility District No.
002................................................. Aa3/A+ 5.600 01/01/05 1,068,520
1,000,000 Houston Texas Water Conveyance System Contract
Series B............................................ Aaa/AAA 7.000 12/15/04 1,158,270
1,000,000 Intermountain Power Agency Utah Power Supply Revenue
Series A, Callable 7/01/03 @102..................... A1/A+ 5.200 07/01/06 1,041,560
5,000 Jacksonville Florida Electrical Authority Revenue
Series Two 1987A-1, Callable 2/09/98 @101.50........ Aa1/AA 7.500 10/01/02 5,090
2,085,000 New York State Environmental Facilities Corp.
Pollution Control Revenue........................... Aa2/A- 5.750 06/15/08 2,305,009
500,000 New York State Environmental Facilities Corp.
Pollution Control Revenue Series B.................. Aa2/A- 6.000 06/15/01 531,005
1,000,000 New York State Environmental Facilities Corp.
Pollution Control Revenue Loan-C.................... Aaa/AAA 5.000 07/15/04 1,042,930
1,790,000 New York State Power Authority Series V, Callable
2/09/98 @102........................................ Aa/AA- 7.600 01/01/03 1,826,534
990,000 New York State Power Authority Series V, Callable
2/09/98 @102........................................ Aa/AA- 7.875 01/01/07 1,010,246
1,410,000 New York State Power Authority Revenue & General
Purpose Series Y, Callable 1/01/01 @102............. Aa/AA- 6.500 01/01/11 1,520,022
990,000 San Antonio Texas Electrical & Gas Revenue Series
A................................................... Aa1/AA 7.000 02/01/99 1,022,927
750,000 South Carolina State Public Service Authority
Electrical Revenue & Electrical System Expansion,
Callable 2/09/98 @100............................... Aa/AAA 4.100 07/01/06 735,233
1,135,000 South Carolina State Public Service Authority
Revenue Series A, Callable 7/01/02 @102............. Aa2/A+ 6.200 07/01/06 1,243,086
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
79
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
*MOODY'S
PRINCIPAL /S&P INTEREST MATURITY MARKET
AMOUNT RATINGS RATE DATE VALUE
- ---------- ------------- ----------- --------- -------------
<C> <S> <C> <C> <C> <C>
MUNICIPAL BONDS (CONTINUED)
$1,000,000 South Carolina State Public Service Authority
Revenue Series A, Callable 1/01/03 @102............. Aaa/AAA 5.500% 07/01/07 $ 1,060,710
-------------
28,459,636
-------------
OTHER--0.8%
1,770,000 New York NY City Industrial Development Agency Civic
Facilities Revenue (Rockefeller Foundation Project),
Callable 7/01/03 @102............................... Aaa/AAA 5.250 07/01/13 1,786,373
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 1/07/98............... Aa1/AA+ 4.000++ 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 1/07/98.................................. Aa3/AA 4.000++ 04/01/22 100,000
-------------
2,086,373
-------------
TOTAL MUNICIPAL BONDS
(Cost $249,750,202)................................. 264,983,344
-------------
TAX-EXEMPT MONEY MARKET FUND--0.4%
944,741 Dreyfus Municipal Money Market Fund (Cost
$944,741)........................................... NR/NR 3.630%(a) 944,741
-------------
TOTAL INVESTMENTS
(Cost $250,694,943) (b)--98.8%...................... 265,928,085
Other assets less liabilities--1.2%................. 3,350,305
-------------
NET ASSETS--100.0%.................................. $ 269,278,390
-------------
</TABLE>
ETM ESCROWED TO MATURITY.
NR NOT RATED BY MOODY'S OR STANDARD & POOR'S (S&P).
* RATINGS ARE NOT AUDITED BY KPMG PEAT MARWICK LLP.
+ INSURED OR GUARANTED BY THE INDICATED MUNICIPAL BOND INSURANCE CORPORATION.
++ REPRESENTS INTEREST RATE IN EFFECT AT DECEMBER 31, 1997 FOR FLOATING RATE
NOTES.
(a) REPRESENTS ANNUALIZED YIELD AT DECEMBER 31, 1997.
(b) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME
TAX PURPOSES. AT DECEMBER 31, 1997, NET UNREALIZED APPRECIATION WAS
$15,233,142 BASED ON COST FOR FEDERAL INCOME TAX PURPOSES. THIS CONSISTED
OF AGGREGATE GROSS UNREALIZED APPRECIATION OF $15,436,787 AND AGGREGATE
GROSS UNREALIZED DEPRECIATION OF $203,645.
SEE NOTES TO FINANCIAL STATEMENTS.
80
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
DIVERSIFICATION BY STATE
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% OF
TOTAL
VALUE NET ASSETS
-------------- -------------
<S> <C> <C>
Alaska........................................................................... $ 1,011,710 0.4%
California....................................................................... 5,204,518 1.9
Connecticut...................................................................... 8,070,290 3.0
Delaware......................................................................... 3,869,298 1.4
District of Columbia............................................................. 3,076,150 1.1
Florida.......................................................................... 5,297,619 2.0
Georgia.......................................................................... 7,852,114 3.0
Illinois......................................................................... 9,408,291 3.5
Indiana.......................................................................... 5,533,852 2.1
Kansas........................................................................... 1,611,600 0.6
Kentucky......................................................................... 6,568,591 2.4
Maryland......................................................................... 6,470,752 2.4
Massachusetts.................................................................... 13,676,415 5.1
Minnesota........................................................................ 3,219,289 1.2
Nebraska......................................................................... 1,095,252 0.4
Nevada........................................................................... 9,755,438 3.6
New Jersey....................................................................... 22,754,597 8.5
New York......................................................................... 80,693,779 30.0
North Carolina................................................................... 3,166,169 1.2
Oklahoma......................................................................... 4,403,635 1.6
Pennsylvania..................................................................... 12,533,983 4.7
Rhode Island..................................................................... 3,088,770 1.1
South Carolina................................................................... 5,200,689 1.9
Texas............................................................................ 21,812,624 8.1
Utah............................................................................. 1,041,560 0.4
Washington....................................................................... 14,089,600 5.2
Wisconsin........................................................................ 5,421,500 2.0
-------------- -----
Total Investments................................................................ 265,928,085 98.8
Other assets less liabilities.................................................... 3,350,305 1.2
-------------- -----
Net Assets....................................................................... $ 269,278,390 100.0%
-------------- -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
81
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment at market value
(Identified cost $250,694,943)..... $265,928,085
Cash................................. 10,680
Interest receivable.................. 4,729,173
Deferred organization costs and other
assets............................. 72,521
------------
TOTAL ASSETS..................... 270,740,459
------------
LIABILITIES:
Payables:
Distributions payable.............. 983,403
Capital stock repurchased.......... 233,273
Services provided by The Bank of
New York and Administrator....... 182,140
Accrued expenses and other
liabilities........................ 63,253
------------
TOTAL LIABILITIES................ 1,462,069
------------
NET ASSETS: $269,278,390
------------
SOURCES OF NET ASSETS:
Capital stock @ par.................. $ 26,207
Capital surplus...................... 253,524,554
Accumulated net realized gain on
investments........................ 494,487
Net unrealized appreciation on
investments........................ 15,233,142
------------
NET ASSETS............................. $269,278,390
------------
INSTITUTIONAL SHARES:
Net assets........................... $269,084,756
------------
Shares outstanding................... 26,189,329
------------
Net asset value, offering price and
repurchase price per share......... $ 10.27
------------
INVESTOR SHARES:
Net assets........................... $ 193,634
------------
Shares outstanding................... 18,831
------------
Net asset value, offering price and
repurchase price per share......... $ 10.28
------------
Institutional Shares authorized at
$.001 par value...................... 200,000,000
Investor Shares authorized at $.001 par
value................................ 200,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE PERIOD APRIL 1, 1997* THROUGH
DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.............................. $10,479,407
-----------
EXPENSES:
Advisory.............................. 1,013,662
Administration........................ 405,467
12b-1 fee--Investor Shares............ 109
Accounting Services................... 45,000
Custodian............................. 32,587
Cash management....................... 12,027
Transfer agent........................ 45,366
Audit................................. 14,001
Directors............................. 5,264
Reports to shareholders............... 16,488
Registration and filings.............. 18,896
Legal................................. 5,950
Other................................. 25,330
-----------
TOTAL EXPENSES...................... 1,640,147
-----------
NET INVESTMENT INCOME............... 8,839,260
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS--
Net realized gain on investments...... 1,461,550
Increase in unrealized appreciation on
investments during the period....... 6,763,697
-----------
Net realized and unrealized gain on
investments......................... 8,225,247
-----------
Net increase in net assets resulting
from operations..................... $17,064,507
-----------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
82
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD APRIL 1, 1997* THROUGH DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
OPERATIONS:
Net investment income................................................................. $ 8,839,260
Net realized gain on investments...................................................... 1,461,550
Increase in unrealized appreciation on investments during the period.................. 6,763,697
-----------
Net increase in net assets resulting from operations................................ 17,064,507
-----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income: Institutional Shares.......................... (8,837,526)
Investor Shares............................... (1,734)
Distributions from capital gains: Institutional Shares.............................. (966,370)
Investor Shares................................... (693)
-----------
(9,806,323)
-----------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Institutional Shares (Note 1)..................... 290,281,587
Investor Shares................................... 240,225
Proceeds from shares issued on reinvestment of dividends: Institiutional Shares..... 1,026,353
Investor Shares........... 2,234
Cost of capital stock repurchased: Institutional Shares............................. (29,480,055)
Investor Shares.................................. (50,138)
-----------
Net increase in net assets resulting from capital stock transactions.............. 262,020,206
-----------
INCREASE IN NET ASSETS.......................................................... 269,278,390
NET ASSETS:
Beginning of period................................................................. -0-
-----------
End of period....................................................................... $269,278,390
-----------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Institutional Shares (Note 1).......................................... 28,986,038
Investor Shares........................................................ 23,533
Shares issued on reinvestment of dividends: Institutional Shares.................... 99,981
Investor Shares......................... 218
Shares repurchased: Institutional Shares............................................ (2,896,690)
Investor Shares................................................. (4,920)
-----------
Net increase...................................................................... 26,208,160
Shares outstanding, beginning of period............................................. -0-
-----------
Shares outstanding, end of period................................................... 26,208,160
-----------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
83
<PAGE>
BNY HAMILTON INTERMEDIATE TAX-EXEMPT FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL
SHARES INVESTOR SHARES
------------- ---------------
FOR THE
PERIOD APRIL FOR THE PERIOD
1, 1997* MAY 1, 1997*
THROUGH THROUGH
DECEMBER 31, DECEMBER 31,
1997 1997
------------- ---------------
<S> <C> <C>
PER SHARE DATA:
Net asset value at beginning of period...................... $ 10.00 $ 9.99
------------- ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................... 0.33 0.27
Net realized and unrealized gain on investments............. 0.31 0.33
------------- ------
Total from investment operations.......................... 0.64 0.60
------------- ------
DIVIDENDS AND DISTRIBUTIONS
Dividends from net investment income........................ (0.33) (0.27)
Distributions from capital gains............................ (0.04) (0.04)
------------- ------
Total dividends and distributions......................... (0.37) (0.31)
------------- ------
Net asset value at end of period............................ $ 10.27 $ 10.28
------------- ------
TOTAL RETURN:............................................... 6.50%** 6.08%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)................. $ 269,085 $ 194
Ratio to average net assets of:
Expenses.................................................. 0.81%*** 1.15%***
Net investment income..................................... 4.36%*** 3.98%***
Portfolio turnover rate..................................... 30% 30%
</TABLE>
* COMMENCEMENT OF OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
84
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C>
COMMERCIAL PAPER--36.7%
AGRIBUSINESS--2.0%
$ 20,000,000 Cargill, Inc., 5.67%+,
3/02/98.................. $ 19,811,000
15,000,000 Cargill, Inc., 5.72%+,
2/17/98.................. 14,887,983
--------------
34,698,983
--------------
ASSET BACKED SECURITIES--CREDIT
CARDS--1.4%
15,000,000 Riverwoods Funding Corp.,
5.60%+, 2/04/98.......... 14,920,667
10,000,000 Riverwoods Funding Corp.,
5.69%+, 1/20/98.......... 9,969,969
--------------
24,890,636
--------------
ASSET BACKED SECURITIES--TRADE & LEASE
RECEIVABLES--1.1%
20,000,000 Sheffield Receivables
Corp., 5.77%+, 1/21/98... 19,935,889
--------------
BANKS--FOREIGN INSTITUTIONS--1.1%
10,000,000 Commonwealth Bank of
Australia, 5.58%+,
4/18/98.................. 9,838,514
10,000,000 Societe Generale, 5.90%+,
10/20/98................. 9,994,571
--------------
19,833,085
--------------
BROKERAGE SERVICES--0.8%
5,000,000 Merrill Lynch & Co.,
Inc., 5.70%+, 2/10/98.... 4,968,333
10,000,000 Merrill Lynch & Co.,
Inc., 5.72%+, 7/13/98.... 9,887,189
--------------
14,855,522
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C>
COMMERCIAL PAPER (CONTINUED)
CHEMICALS--1.7%
$ 15,000,000 du Pont (E.I.) de Nemours
& Co., 5.54%+, 3/18/98... $ 14,824,567
15,000,000 du Pont (E.I.) de Nemours
& Co., 5.70%+, 1/28/98... 14,935,875
--------------
29,760,442
--------------
ELECTRICAL & ELECTRONIC EQUIPMENT--3.2%
6,700,000 Emerson Electric Co.,
5.77%+, 2/12/98.......... 6,654,898
5,000,000 General Electric Co.,
5.54%+, 3/27/98.......... 4,934,597
25,500,000 Hewlett Packard Co.,
5.80%+, 1/08/98.......... 25,471,242
10,000,000 Hewlett Packard Co.,
5.90%+, 1/21/98.......... 9,967,222
10,000,000 Siemens Capital Corp.,
5.58%+, 2/06/98.......... 9,944,200
--------------
56,972,159
--------------
EQUIPMENT LEASING--2.0%
15,000,000 FCAR Owner Trust, 5.51%+,
1/14/98.................. 14,970,154
15,000,000 FCAR Owner Trust, 5.67%+,
1/16/98.................. 14,964,563
5,000,000 Republic Industries
Funding Corp., 5.75%+,
1/13/98.................. 4,990,417
--------------
34,925,134
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
85
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C>
COMMERCIAL PAPER (CONTINUED)
FINANCE COMPANIES--CAPTIVE--2.1%
$ 7,768,000 MetLife Funding, Inc.,
5.68%+, 2/26/98.......... $ 7,699,366
20,000,000 MetLife Funding, Inc.,
5.68%+, 1/22/98.......... 19,933,733
10,000,000 Pitney Bowes Credit Co.,
5.44%+, 1/12/98.......... 9,983,225
--------------
37,616,324
--------------
FINANCE COMPANIES--NON-CAPTIVE &
INDEPENDENT--3.7%
15,000,000 Associates Corp. of North
America, 5.56%+,
2/12/98.................. 14,902,700
20,000,000 Associates Corp. of North
America, 5.81%+,
1/28/98.................. 19,912,850
20,000,000 General Electric Capital
Corp., 5.52%+, 2/05/98... 19,892,667
10,000,000 General Electric Credit
Corp., 5.65%+, 1/12/98... 9,982,736
--------------
64,690,953
--------------
FOOD PROCESSING--2.8%
15,000,000 Campbell Soup Co.,
5.59%+, 5/26/98.......... 14,662,271
15,000,000 Kellogg Co., 5.72%+,
2/20/98.................. 14,880,833
20,000,000 Sara Lee Corp., 6.10%+,
1/06/98.................. 19,983,056
--------------
49,526,160
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C>
COMMERCIAL PAPER (CONTINUED)
FOREIGN GOVERNMENT & RELATED ISSUES--0.8%
$ 15,000,000 Oesterreichische
Kontroll, 5.71%+,
2/05/98.................. $ 14,916,729
--------------
FOREIGN RETAIL SPECIALTY--0.9%
15,889,000 St. Michael Finance Ltd.,
5.71%+, 1/23/98.......... 15,833,556
--------------
INSURANCE--HEALTH--0.6%
10,000,000 AIG Funding, Inc.,
5.73%+, 1/15/98.......... 9,977,717
--------------
INSURANCE--NON HEALTH--0.6%
10,000,000 Prudential Funding Corp.,
5.80%+, 1/13/98.......... 9,980,667
--------------
LEASING (WHOLESALE & RETAIL)-- AUTOS,
TRUCKS & RV'S--0.3%
5,000,000 Ford Motor Credit Co.,
5.69%+, 4/02/98.......... 4,928,085
--------------
NON-BANKING HOLDING COMPANIES-- 1.5%
4,700,000 USAA Capital Corp.,
5.54%+, 1/05/98.......... 4,697,107
7,000,000 USAA Capital Corp.,
5.56%+, 2/13/98.......... 6,953,512
10,000,000 USAA Capital Corp.,
5.75%+, 2/12/98.......... 9,932,917
5,700,000 USAA Capital Corp.,
5.76%+, 1/29/98.......... 5,674,464
--------------
27,258,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
86
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C>
COMMERCIAL PAPER (CONTINUED)
PHARMACEUTICAL, HEALTH CARE, COSMETICS &
SOAPS--4.5%
$ 15,000,000 Abbott Laboratories,
6.00%+, 1/06/98.......... $ 14,987,500
10,000,000 Clorox Co., 5.68%+,
1/16/98.................. 9,976,333
10,000,000 Clorox Co., 5.75%+,
1/16/98.................. 9,976,042
15,000,000 Procter & Gamble Co.,
5.50%+, 1/08/98.......... 14,983,958
10,000,000 Procter & Gamble Co.,
5.59%+, 2/06/98.......... 9,944,100
10,000,000 Procter & Gamble Co.,
5.68%+, 1/22/98.......... 9,966,867
10,000,000 Schering Corp., 5.70%+,
3/19/98.................. 9,878,083
--------------
79,712,883
--------------
STONE, CLAY AND GLASS PRODUCTS--0.3%
5,000,000 Guardian Industries
Corp., 5.80%+, 1/23/98... 4,982,278
--------------
TELECOMMUNICATIONS--2.5%
10,000,000 American Telephone &
Telegraph Co., 5.64%+,
4/02/98.................. 9,857,433
25,000,000 BellSouth
Telecommunications, Inc.,
5.70%+, 2/11/98.......... 24,837,708
10,000,000 BellSouth
Telecommunications, Inc.,
5.73%+, 2/25/98.......... 9,912,458
--------------
44,607,599
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C>
COMMERCIAL PAPER (CONTINUED)
TELECOMMUNICATIONS--NON-U.S.--0.8%
$ 14,690,000 France Telecom, 5.55%+,
2/05/98.................. $ 14,610,735
--------------
UTILITIES--ELECTRIC--2.0%
10,000,000 National Rural Utilities
Cooperative Finance
Corp., 5.57%+, 5/15/98... 9,792,672
10,000,000 National Rural Utilities
Cooperative Finance
Corp., 5.60%+, 2/06/98... 9,944,000
15,000,000 National Rural Utilities
Cooperative Finance
Corp., 5.65%+, 2/12/98... 14,901,125
--------------
34,637,797
--------------
TOTAL COMMERCIAL PAPER
(Cost $649,151,333)...... 649,151,333
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
87
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C>
UNITED STATES GOVERNMENT AGENCIES
& OBLIGATIONS--12.6%
UNITED STATES GOVERNMENT AGENCY
SECURITIES--6.8%
Federal Farm Credit
Bank,
$11,395,000 5.51%, 1/02/98...... $ 11,394,954
10,000,000 5.70%, 11/03/98..... 9,998,690
Federal Home Loan
Bank,
5,000,000 5.675%, 2/12/98..... 5,000,077
10,000,000 5.80%, 6/12/98...... 9,998,758
15,000,000 5.75%, 8/18/98...... 15,000,000
15,000,000 5.80%, 9/18/98...... 15,004,190
5,000,000 5.825%, 12/17/98.... 5,003,221
Federal National
Mortgage
Association,
8,000,000 5.50%, 2/18/98...... 7,998,801
8,000,000 5.51%, 2/24/98...... 7,999,302
5,250,000 5.84%, 6/10/98...... 5,251,957
8,005,000 5.68%, 7/31/98...... 8,003,870
5,000,000 5.76%, 11/04/98..... 4,997,940
Student Loan
Marketing
Association,
5,000,000 5.85%, 6/10/98...... 5,001,745
10,000,000 5.74%, 12/17/98..... 9,994,929
------------
120,648,434
------------
PRINCIPAL MARKET
AMOUNT VALUE
- ---------- ------------
UNITED STATES GOVERNMENT AGENCIES &
OBLIGATIONS (CONTINUED)
UNITED STATES TREASURY NOTES--5.8%
$ 16,000,000 5.625%, 1/31/98.......... $ 15,998,645
26,000,000 5.00%, 1/31/98........... 25,985,197
25,000,000 5.125%, 2/28/98.......... 24,975,334
15,000,000 5.875%, 4/30/98.......... 15,002,424
10,000,000 5.875%, 8/15/98.......... 10,005,945
5,000,000 5.50%, 11/15/98.......... 4,989,072
5,000,000 5.125%, 12/31/98......... 4,975,603
--------------
101,932,220
--------------
TOTAL UNITED STATES
GOVERNMENT AGENCIES &
OBLIGATIONS
(Cost $222,580,654)...... 222,580,654
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
88
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C> <C>
CERTIFICATES OF DEPOSIT--4.3%
BANKS--FOREIGN INSTITUTIONS--3.8%
$ 10,000,000 ABN AMRO Bank, 5.93%,
6/19/98.................. $ 10,000,499
11,000,000 Barclays Bank PLC, 5.71%,
1/20/98.................. 11,000,421
4,000,000 Bayerische Landesbank,
5.86%, 7/17/98........... 3,999,037
10,000,000 National Westminster
Bank, 5.83%, 10/14/98.... 9,996,999
5,000,000 Rabobank Nederland NV,
5.70%, 5/12/98........... 4,999,735
5,000,000 Royal Bank of Canada,
5.88%, 9/17/98........... 5,000,452
5,000,000 Swiss Bank Corp., 5.86%,
7/17/98.................. 4,998,086
10,000,000 Westdeutsche Landesbank
Girozen, 5.64%,
1/23/98.................. 10,000,098
7,000,000 Westpac Banking Corp.,
5.83%, 1/15/98........... 7,000,244
--------------
66,995,571
--------------
BANK HOLDING COMPANY--0.5%
10,000,000 Bankers Trust Co., 5.91%,
7/17/98.................. 9,995,298
--------------
TOTAL CERTIFICATES OF
DEPOSIT
(Cost $76,990,869)....... 76,990,869
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C> <C>
TIME DEPOSITS--2.3%
$ 30,000,000 Harris Trust Bank of
Chicago, 6.50%, 1/02/98.. $ 30,000,000
10,000,000 Wachovia Bank of North
Carolina, 5.9375%,
1/02/98.................. 10,000,000
--------------
TOTAL TIME DEPOSITS
(Cost $40,000,000)....... 40,000,000
--------------
FLOATING RATE NOTES--1.7%
BANK HOLDING COMPANY--0.6%
10,000,000 American Express
Centurion Bank, 5.96%+,
payable monthly, interest
rate resets monthly, next
interest rate reset date
1/10/98, final maturity
11/10/98................. 10,000,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
89
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C> <C>
FLOATING RATE NOTES (CONTINUED)
BROKERAGE SERVICES--1.1%
$ 10,000,000 Bear Stearns Cos. Inc.,
5.98%+, payable monthly,
interest rate resets
monthly, next interest
rate reset date 1/06/98,
final maturity
11/06/98................. $ 10,000,000
10,000,000 Merrill Lynch & Co.,
5.94047%+, payable
monthly, interest rate
resets monthly, next
interest rate reset date
1/13/98, final maturity
7/13/98.................. 10,000,000
--------------
20,000,000
--------------
TOTAL FLOATING RATE NOTES
(Cost $30,000,000)....... 30,000,000
--------------
BANK NOTES--1.1%
10,000,000 LaSalle National Bank,
5.71%, 7/27/98........... 9,990,168
10,000,000 Wachovia Bank of North
Carolina, 6.15%,
5/06/98.................. 9,996,522
--------------
TOTAL BANK NOTES
(Cost $19,986,690)....... 19,986,690
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C> <C>
CORPORATE BONDS--0.8%
$ 4,240,000 Norwest Corp., 6.00%,
10/13/98................. $ 4,242,277
10,000,000 Norwest Financial, Inc.,
5.50%, 4/15/98........... 9,993,083
--------------
TOTAL CORPORATE BONDS
(Cost $14,235,360)....... 14,235,360
--------------
REPURCHASE AGREEMENTS--40.4%
REPURCHASE AGREEMENT WITH BZW SECURITIES,
INC.--6.8%
120,000,000 6.60%, due 1/02/98,
repurchase price
$120,044,000
(Collateral--
InterAmerican Development
Bank Bonds, 6.375%-6.80%,
Federal National Mortgage
Association Notes,
5.95%-6.36%,
12/17/99-12/27/04;
Federal Farm Credit Bank
Note, 6.19%, 12/29/00;
African Development Bank
Bond, 7.75%, 12/15/01;
aggregate market value
$122,401,002) (Cost
$120,000,000)............ 120,000,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
90
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
REPURCHASE AGREEMENT WITH DEAN WITTER
REYNOLDS--7.1%
$ 125,000,000 6.80%, due 1/02/98,
repurchase price
$125,047,222
(Collateral--United
States Treasury Notes,
5.875%-6.50%,
5/31/98-4/30/99; United
States Treasury Bond,
6.625%, 2/15/27; Federal
National Mortgage
Association Bonds,
6.00%-9.50%,
6/25/20-7/25/22; Federal
Home Loan Mortgage
Corporation Bonds,
6.35%-8.85%,
5/15/19-8/15/25;
aggregate market value
plus accrued interest
$128,680,326) (Cost
$125,000,000)............ $ 125,000,000
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
REPURCHASE AGREEMENT WITH DEUTSCHE BANK
AG--6.8%
$ 120,000,000 6.78%, due 1/02/98,
repurchase price
$120,045,200
(Collateral--Federal
National Mortgage
Association Bonds,
5.38%-13.28%;
4/25/11-12/25/23; Federal
Home Loan Mortgage
Corporation Bonds,
6.00%-8.00%,
3/15/12-1/15/22;
aggregate market value
plus accrued interest
$123,600,001) (Cost
$120,000,000)............ $ 120,000,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
91
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
REPURCHASE AGREEMENT WITH GOLDMAN, SACHS
& CO.--7.3%
$ 129,503,000 6.55%, due 1/02/98,
repurchase price
$129,550,125
(Collateral-- United
States Treasury Bond,
6.125%, 11/15/27;
Tennessee Valley
Authority Development
Bond, 8.25%, 4/15/42;
International Bank for
Reconstruction and
Development Bond, 5.25%,
9/16/03; Federal National
Mortgage Association
Notes, 5.84%-6.59%,
3/29/99-11/26/07; Federal
Home Loan Mortgage
Corporation Note, 6.665%,
1/06/98; Federal Home
Loan Bank Notes,
including Zero Coupon
Notes, 0.00%-6.00%,
1/23/98-6/29/00; Federal
Farm Credit Bank Note,
6.07%, 11/24/99; Asian
Development Bank Bonds,
6.125%-9.125%,
6/01/00-3/09/04; African
Development Bank Bond,
9.30%, 7/01/00; aggregate
market value plus accrued
interest $132,094,002)
(Cost $129,503,000)...... $ 129,503,000
--------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
REPURCHASE AGREEMENT WITH J.P. MORGAN
SECURITIES, INC.--5.6%
$ 100,000,000 6.50%, due 1/02/98,
repurchase price
$100,036,111
(Collateral--Student Loan
Marketing Association
Zero Coupon Note,
5/21/98; International
Bank for Reconstruction
and Development Bonds/
Notes including Zero
Coupon Notes,
0.00%-9.50%;
1/27/98-3/01/26;
InterAmerican Development
Bank Bonds, 6.80%-7.00%,
6/15/25-10/15/25; Federal
National Mortgage
Association Notes,
6.40%-6.96%,
12/27/04-4/01/07; African
Development Bank Bond,
9.30%, 7/01/00; aggregate
market value plus accrued
interest $102,000,894)
(Cost $100,000,000)...... $ 100,000,000
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
92
<PAGE>
BNY HAMILTON MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- --------------
<C> <S> <C> <C>
REPURCHASE AGREEMENTS (CONTINUED)
REPURCHASE AGREEMENT WITH SMITH BARNEY,
INC.--6.8%
$ 120,000,000 6.75%, due 1/02/98,
repurchase price
$120,045,000
(Collateral-- Government
National Mortgage
Association
Mortgage-backed
securities, 6.125%-8.00%,
6/15/06-12/20/27;
International Bank for
Reconstruction and
Development Bonds
including Zero Coupon
Bonds, 0.00%-8.64%,
2/15/98-2/15/16;
InterAmerican Development
Bond, 6.625%, 3/07/07;
Federal National Mortgage
Association Bonds,
5.15%-10.30%,
2/25/08-8/25/26; Federal
Home Loan Mortgage
Corporation Notes/ Bonds
including Zero Coupon
Bonds, 0.00%-11.875%,
1/21/98-6/15/35;
aggregate market value
plus accrued interest
$123,171,415) (Cost
$120,000,000)............ $ 120,000,000
--------------
TOTAL REPURCHASE
AGREEMENTS--
(Cost $714,503,000)...... 714,503,000
--------------
<CAPTION>
MARKET
VALUE
--------------
<C> <S> <C> <C>
TOTAL INVESTMENTS
(Cost
$1,767,447,906)(a)--
99.9%.................... $1,767,447,906
Other assets less
liabilities--0.1%........ 1,194,532
--------------
NET ASSETS--100.0%....... $1,768,642,438
--------------
</TABLE>
(a) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES.
+ REPRESENTS YIELD AT TIME OF PURCHASE FOR COMMERCIAL PAPER, AND INTEREST RATE
IN EFFECT AT DECEMBER 31, 1997 FOR FLOATING RATE NOTES.
SEE NOTES TO FINANCIAL STATEMENTS.
93
<PAGE>
BNY HAMILTON MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value,
including repurchase agreements
of $714,503,000 (Identified cost
$1,767,447,906).................. $1,767,447,906
Cash............................... 756
Interest receivable................ 6,602,111
Other assets....................... 103,057
--------------
TOTAL ASSETS................... 1,774,153,830
--------------
LIABILITIES:
Payables:
Dividends........................ 4,913,565
Services provided by The Bank of
New York and Administrator..... 450,852
Accrued expenses and other
liabilities...................... 146,975
--------------
TOTAL LIABILITIES.............. 5,511,392
--------------
NET ASSETS:.......................... $1,768,642,438
--------------
SOURCES OF NET ASSETS:...............
Capital stock @ par................ $ 1,768,629
Capital surplus.................... 1,766,860,147
Undistributed net investment
income........................... 13,662
--------------
NET ASSETS........................... $1,768,642,438
--------------
HAMILTON SHARES:
Net assets......................... $1,063,578,744
--------------
Shares outstanding................. 1,063,570,528
--------------
Net asset value, offering price and
repurchase price per share....... $ 1.00
--------------
HAMILTON PREMIER SHARES:
Net assets......................... $ 688,339,180
--------------
Shares outstanding................. 688,333,863
--------------
Net asset value, offering price and
repurchase price per share....... $ 1.00
--------------
HAMILTON CLASSIC SHARES:
Net assets......................... $ 16,724,514
--------------
Shares outstanding................. 16,724,385
--------------
Net asset value, offering price and
repurchase price per share....... $ 1.00
--------------
Hamilton Shares authorized at $.001
par value.......................... 3,000,000,000
Hamilton Premier Shares authorized at
$.001 par value.................... 3,000,000,000
Hamilton Classic Shares authorized at
$.001 par value.................... 3,000,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.............................. $76,259,992
-----------
EXPENSES:
Advisory.............................. 1,364,166
Administration........................ 1,364,166
12b-1 fee--Hamilton Classic Shares.... 42,527
Servicing fee: Hamilton Premier
Shares.............................. 1,386,288
Hamilton Classic
Shares.............................. 42,527
Accounting services................... 60,000
Custodian............................. 124,624
Cash management....................... 49,590
Transfer agent: Hamilton Shares....... 18,873
Hamilton Premier
Shares.............................. 80,363
Hamilton Classic
Shares.............................. 14,364
Audit................................. 68,406
Insurance............................. 32,481
Directors............................. 10,804
Reports to shareholders............... 62,251
Registration and filings.............. 89,260
Legal................................. 29,544
Other................................. 108,489
-----------
TOTAL EXPENSES...................... 4,948,723
Earnings credit adjustment (Note
3)................................ (29,151)
-----------
NET EXPENSES........................ 4,919,572
-----------
NET INVESTMENT INCOME............... $71,340,420
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
94
<PAGE>
BNY HAMILTON MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
95
<PAGE>
BNY HAMILTON MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income....................................................... $ 71,340,420 $ 57,040,613
-------------- --------------
Net increase in net assets resulting from operations........................ 71,340,420 57,040,613
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income: Hamilton Shares....................... (42,331,939) (35,659,908)
Hamilton Premier Shares............... (28,179,930) (20,772,078)
Hamilton Classic Shares............... (801,227) (608,627)
-------------- --------------
(71,313,096) (57,040,613)
-------------- --------------
Distributions from capital gains: Hamilton Shares........................... (8,151) -0-
Hamilton Premier Shares................... (5,383) -0-
Hamilton Classic Shares................... (128) -0-
-------------- --------------
(13,662) -0-
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Hamilton Shares........................... 3,379,741,425 2,408,255,035
Hamilton Premier Shares................... 5,351,767,320 4,388,644,318
Hamilton Classic Shares................... 27,744,272 28,058,002
Proceeds from shares issued on reinvestment of dividends: Hamilton Shares... 4,222,183 4,380,461
Hamilton Premier
Shares.................................................................... 14,839,743 11,294,784
Hamilton Classic
Shares.................................................................... 700,778 599,324
Cost of capital stock repurchased: Hamilton Shares.......................... (2,929,817,113) (2,407,263,969)
Hamilton Premier Shares.................. (5,142,031,650) (4,276,343,748)
Hamilton Classic Shares.................. (25,199,060) (18,277,323)
-------------- --------------
Increase in net assets resulting from capital stock transactions.......... 681,967,898 139,346,884
-------------- --------------
INCREASE IN NET ASSETS.................................................. 681,981,560 139,346,884
NET ASSETS:
Beginning of year........................................................... 1,086,660,878 947,313,994
-------------- --------------
End of year................................................................. $1,768,642,438 $1,086,660,878
-------------- --------------
CHANGE IN CAPITAL STOCK OUTSTANDING:
Shares sold: Hamilton Shares................................................ 3,379,741,425 2,408,255,035
Hamilton Premier Shares........................................ 5,351,767,320 4,388,644,318
Hamilton Classic Shares........................................ 27,744,272 28,058,002
Shares issued on reinvestment of dividends: Hamilton Shares................. 4,222,183 4,380,461
Hamilton Premier Shares......... 14,839,743 11,294,784
Hamilton Classic Shares......... 700,778 599,324
Shares repurchased: Hamilton Shares......................................... (2,929,817,113) (2,407,263,969)
Hamilton Premier Shares................................. (5,142,031,650) (4,276,343,748)
Hamilton Classic Shares................................. (25,199,060) (18,277,323)
-------------- --------------
Net increase.............................................................. 681,967,898 139,346,884
Shares outstanding, beginning of year....................................... 1,086,660,878 947,313,994
-------------- --------------
Shares outstanding, end of year............................................. 1,768,628,776 1,086,660,878
-------------- --------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
96
<PAGE>
BNY HAMILTON MONEY FUND
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS.
97
<PAGE>
BNY HAMILTON MONEY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HAMILTON SHARES
---------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of year........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income....................................... 0.053 0.052 0.057 0.040 0.030
-------- -------- -------- -------- --------
DIVIDENDS
Dividends from net investment income........................ (0.053) (0.052) (0.057) (0.040) (0.030)
-------- -------- -------- -------- --------
Net asset value at end of year.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
TOTAL RETURN:............................................... 5.47% 5.30% 5.84% 4.02% 3.03%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)................. $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......... 0.25% 0.27% 0.26% 0.30% 0.27%
Expenses, prior to waiver from The Bank of New York....... 0.25% 0.27% 0.26% 0.32% 0.32%
Net investment income, net of waiver from The Bank of New
York.................................................... 5.34% 5.17% 5.67% 3.92% 2.97%
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
96
<PAGE>
BNY HAMILTON MONEY FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HAMILTON PREMIER SHARES
---------------------------------------------
FOR THE
PERIOD
AUGUST 15,
1994*
YEAR ENDED DECEMBER 31, THROUGH
------------------------------- DECEMBER 31,
1997 1996 1995 1994
-------- -------- -------- ------------
<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................................................. 0.051 0.049 0.054 0.017
-------- -------- -------- ------------
DIVIDENDS
Dividends from net investment income.................................. (0.051) (0.049) (0.054) (0.017)
-------- -------- -------- ------------
Net asset value at end of period...................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- ------------
TOTAL RETURN:......................................................... 5.19% 5.03% 5.54% 1.69%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)........................... $688,339 $463,759 $340,163 $107,799
Ratio to average net assets of:
Expenses............................................................ 0.51% 0.53% 0.54% 0.61%***
Net investment income............................................... 5.09% 4.91% 5.40% 4.40%***
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
97
<PAGE>
BNY HAMILTON MONEY FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HAMILTON CLASSIC SHARES
-----------------------------------------
FOR THE
PERIOD
DECEMBER 4,
1995*
YEAR ENDED DECEMBER 31, THROUGH
-------------------------- DECEMBER 31,
1997 1996 1995
-------- ------------ ------------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value at beginning of period.......................................... $ 1.00 $ 1.00 $ 1.00
-------- ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income........................................................... 0.047 0.046 0.004
-------- ------------ ------------
DIVIDENDS
Dividends from net investment income............................................ (0.047) (0.046) (0.004)
-------- ------------ ------------
Net asset value at end of period................................................ $ 1.00 $ 1.00 $ 1.00
-------- ------------ ------------
TOTAL RETURN:................................................................... 4.80% 4.73% 0.40%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)..................................... $16,725 $13,478 $ 3,098
Ratio to average net assets of:
Expenses...................................................................... 0.88% 0.82% 0.76%***
Net investment income......................................................... 4.71% 4.67% 5.18%***
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
98
<PAGE>
BNY HAMILTON TREASURY MONEY FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ -------------
<C> <S> <C>
UNITED STATES GOVERNMENT
OBLIGATIONS--12.5%
UNITED STATES TREASURY BILLS--8.4%
$ 5,000,000 5.27%+, 1/22/98............ $ 4,984,629
5,000,000 5.37%+, 2/05/98............ 4,973,896
5,000,000 5.16%+, 2/12/98............ 4,969,871
5,000,000 5.17%+, 3/05/98............ 4,954,762
5,000,000 5.20%+, 5/28/98............ 4,893,834
-------------
24,776,992
-------------
UNITED STATES TREASURY NOTES--4.1%
2,000,000 5.375%, 5/31/98............ 1,998,758
2,000,000 5.25%, 7/31/98............. 1,995,897
2,000,000 5.875%, 8/15/98............ 2,002,354
2,000,000 6.00%, 9/30/98............. 2,005,445
2,000,000 5.875%, 10/31/98........... 2,002,275
2,000,000 5.50%, 11/15/98............ 1,997,022
-------------
12,001,751
-------------
TOTAL UNITED STATES
GOVERNMENT OBLIGATIONS--
(Cost $36,778,743)......... 36,778,743
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ -------------
<C> <S> <C>
REPURCHASE AGREEMENTS-- 87.6%
REPURCHASE AGEEMENT WITH BZW
SECURITIES--17.0%
$ 50,000,000 6.55%, due 1/02/98,
repurchase price
$50,018,194 (Collateral--
United States Treasury
Note, 5.875%, 10/31/98;
aggregate market value plus
accrued interest
$51,000,879) (Cost
$50,000,000)............... $ 50,000,000
-------------
REPURCHASE AGREEMENT WITH DEUTSCHE BANK
AG--18.7%
55,000,000 6.75%, due 1/02/98,
repurchase price
$55,020,625 (Collateral--
United States Treasury
Strips, 11/15/02-11/15/16;
United States Treasury
Notes, 5.875%-8.50%,
2/28/99-11/15/00; United
States Treasury Bills,
1/22/98-12/10/98; aggregate
market value plus accrued
interest $56,100,908) (Cost
$55,000,000)............... 55,000,000
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
99
<PAGE>
BNY HAMILTON TREASURY MONEY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ -------------
<C> <S> <C>
REPURCHASE AGREEMENTS (CONTINUED)
REPURCHASE AGREEMENT WITH GOLDMAN, SACHS &
CO.--15.6%
$ 46,084,000 6.55%, due 1/02/98,
repurchase price
$46,100,769 (Collateral--
United States Treasury
Bond, 6.125%, 11/15/27;
aggregate market value plus
accrued interest
$47,005,838) (Cost
$46,084,000)............... $ 46,084,000
-------------
REPURCHASE AGREEMENT WITH J. P. MORGAN
SECURITIES, INC.--17.6%
52,000,000 6.30%, due 1/02/98,
repurchase price
$52,018,200 (Collateral--
United States Treasury
Note, 5.875%, 11/30/01;
aggregate market value plus
accrued interest
$53,040,318) (Cost
$52,000,000)............... 52,000,000
-------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------ -------------
<C> <S> <C>
REPURCHASE AGREEMENTS (CONTINUED)
REPURCHASE AGREEMENT WITH MORGAN STANLEY &
CO.--18.7%
$ 55,000,000 6.25%, due 1/02/98,
repurchase price
$55,019,097 (Collateral--
United States Treasury
Note, 5.875%, 7/31/99;
aggregate market value plus
accrued interest
$56,381,748) (Cost
$55,000,000)............... $ 55,000,000
-------------
TOTAL REPURCHASE
AGREEMENTS--
(Cost $258,084,000)........ 258,084,000
-------------
TOTAL INVESTMENTS
(Cost $294,862,743)(a)--
100.1%..................... 294,862,743
Other assets less
liabilities--(0.1%)........ (248,806)
-------------
NET ASSETS--100.0%......... $ 294,613,937
-------------
</TABLE>
(a) THE COST STATED ALSO APPROXIMATES THE AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES.
+ REPRESENTS DISCOUNTED RATE AT TIME OF PURCHASE FOR UNITED STATES TREASURY
BILLS.
SEE NOTES TO FINANCIAL STATEMENTS.
100
<PAGE>
BNY HAMILTON TREASURY MONEY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value,
including repurchase agreements of
$258,084,000
(Identified cost $294,862,743)..... $ 294,862,743
Cash................................. 2,310
Interest receivable.................. 209,281
Deferred organization costs and other
assets............................. 56,840
-------------
TOTAL ASSETS..................... 295,131,174
-------------
LIABILITIES:
Payables:
Dividends.......................... 389,749
Services provided by The Bank of
New York and Administrator....... 80,061
Accrued expenses and other
liabilities........................ 47,427
-------------
TOTAL LIABILITIES................ 517,237
-------------
NET ASSETS:............................ $ 294,613,937
-------------
SOURCES OF NET ASSETS:
Capital stock @ par.................. $ 294,614
Capital surplus...................... 294,320,006
Accumulated net realized loss on
investments........................ (683)
-------------
NET ASSETS............................. $ 294,613,937
-------------
HAMILTON SHARES:
Net assets........................... $ 110,719,396
-------------
Shares outstanding................... 110,719,481
-------------
Net asset value, offering price and
repurchase price per share......... $ 1.00
-------------
HAMILTON PREMIER SHARES:
Net assets........................... $ 183,894,541
-------------
Shares outstanding................... 183,895,139
-------------
Net asset value, offering price and
repurchase price per share......... $ 1.00
-------------
Hamilton Shares authorized at $.001 par
value................................ 2,000,000,000
Hamilton Premier Shares authorized at
$.001 par value...................... 2,000,000,000
</TABLE>
STATEMENT OF OPERATIONS
FOR THE PERIOD APRIL 1, 1997* THROUGH DECEMBER 31, 1997
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest............................... $5,031,581
----------
EXPENSES:
Advisory............................... 90,633
Administration......................... 90,633
Servicing fee: Hamilton Premier
Shares............................... 162,916
Accounting services.................... 45,000
Custodian.............................. 15,726
Cash management........................ 3,027
Transfer agent: Hamilton Shares........ 7,011
Hamilton Premier Shares... 8,798
Audit.................................. 6,637
Directors.............................. 3,882
Reports to shareholders................ 5,768
Registration and filings............... 4,704
Legal.................................. 2,799
Other.................................. 4,097
----------
TOTAL EXPENSES....................... 451,631
Fees waived/reimbursed by The Bank of
New York............................. (61,996)
----------
NET EXPENSES......................... 389,635
----------
NET INVESTMENT INCOME................ 4,641,946
Net realized loss on investments....... (683)
----------
Net increase in net assets resulting
from operations...................... $4,641,263
----------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
101
<PAGE>
BNY HAMILTON TREASURY MONEY FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD APRIL 1, 1997* THROUGH DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
OPERATIONS:
Net investment income.............................................................. $ 4,641,946
Net realized loss on investments................................................... (683)
--------------
Net increase in net assets resulting from operations............................. 4,641,263
--------------
DIVIDENDS TO SHAREHOLDERS:
Dividends from net investment income: Hamilton Shares.............................. (1,347,411)
Hamilton Premier Shares...................... (3,294,535)
--------------
(4,641,946)
--------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from capital stock sold: Hamilton Shares.................................. 213,597,568
Hamilton Premier Shares.......................... 880,125,419
Proceeds from shares issued on reinvestment of dividends: Hamilton Shares.......... 1,096,720
Hamilton Premier
Shares........................................................................... 1,695,732
Cost of capital stock repurchased: Hamilton Shares................................. (103,974,807)
Hamilton Premier Shares......................... (697,926,012)
--------------
Increase in net assets resulting from capital stock transactions................. 294,614,620
--------------
INCREASE IN NET ASSETS......................................................... 294,613,937
NET ASSETS:
Beginning of period................................................................ -0-
--------------
End of period...................................................................... $ 294,613,937
--------------
CHANGE IN CAPITAL STOCK OUTSTANDING:.................................................
Shares sold: Hamilton Shares....................................................... 213,597,568
Hamilton Premier Shares............................................... 880,125,419
Shares issued on reinvestment of dividends: Hamilton Shares........................ 1,096,720
Hamilton Premier Shares................ 1,695,732
Shares repurchased: Hamilton Shares................................................ (103,974,807)
Hamilton Premier Shares........................................ (697,926,012)
--------------
Net increase..................................................................... 294,614,620
Shares outstanding, beginning of period............................................ -0-
--------------
Shares outstanding, end of period.................................................. 294,614,620
--------------
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
102
<PAGE>
BNY HAMILTON TREASURY MONEY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HAMILTON
HAMILTON PREMIER
SHARES SHARES
--------------- ---------------
FOR THE PERIOD FOR THE PERIOD
APRIL 1, 1997* APRIL 1, 1997*
THROUGH THROUGH
DECEMBER 31, DECEMBER 31,
1997 1997
--------------- ---------------
<S> <C> <C>
PER SHARE DATA:
Net asset value at beginning of period................ $ 1.00 $ 1.00
--------------- ---------------
INCOME FROM INVESTMENT OPERATIONS
Net investment income................................. 0.040 0.038
--------------- ---------------
DIVIDENDS
Dividends from net investment income.................. (0.040) (0.038)
--------------- ---------------
Net asset value at end of period...................... $ 1.00 $ 1.00
--------------- ---------------
TOTAL RETURN:......................................... 4.02%** 3.83%**
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of period (000's omitted)........... $ 110,719 $ 183,895
Ratio to average net assets of:
Expenses, net of waiver from The Bank of New York... 0.25%*** 0.50%***
Expenses, prior to waiver from The Bank of New
York.............................................. 0.33%*** 0.56%***
Net investment income, net of waiver from The Bank
of New York....................................... 5.29%*** 5.06%***
</TABLE>
* COMMENCEMENT OF INVESTMENT OPERATIONS FOR THE RESPECTIVE CLASS OF SHARES.
** NOT ANNUALIZED.
*** ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
103
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 the
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 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 the Institutional
Shares of the Large Cap Growth Fund, Intermediate Investment Grade Fund, and
Intermediate
104
<PAGE>
NOTES TO FINANCIAL STATEMENTS (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 Funds.......... $ 70,239
</TABLE>
For financial reporting purposes, the increase in net assets resulting from
the conversion, 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. Securities 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
105
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
only on the over the counter market are valued at the average of the quoted bid
and asked prices in the over-the-counter market.
The market value of 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.
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 the 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 be 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
106
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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
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 the
Prospectuses 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 the 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 treated 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.
107
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(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 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 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
108
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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.
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. For the year ended December 31, 1997, the
following Funds had significant reductions in their custody fees, as indicated
below:
<TABLE>
<S> <C>
Equity Income Fund..... $ 9,783
Intermediate Investment
Grade Fund............ 7,205
Money Fund............. 29,151
</TABLE>
The Bank of New York also serves as the fund accounting agent and cash
management administrator.
As of December 31, 1997, 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%
<CAPTION>
HAMILTON HAMILTON PREMIER
SHARES SHARES
------------- -----------------
<S> <C> <C>
Treasury Money Fund... .25% .50%
</TABLE>
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
109
<PAGE>
NOTES TO FINANCIAL STATEMENTS (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 BNY Hamilton Funds, Inc. 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
During the periods indicated for the respective Funds, the cost of securities
purchased and the proceeds from sales of securities, excluding short-term
securities, were as follows:
<TABLE>
<CAPTION>
EQUITY INCOME FUND (A)
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ -- $ --
All Others............. 438,086,200 272,603,393
<CAPTION>
LARGE CAP GROWTH FUND (B)
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ -- $ --
All Others............. 140,777,233 121,050,543
<CAPTION>
SMALL CAP GROWTH FUND (B)
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ -- $ --
All Others............. 142,815,425 75,414,222
<CAPTION>
INTERNATIONAL EQUITY
FUND (B)
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ -- $ --
All Others............. 125,244,496 25,313,828
</TABLE>
110
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
INTERMEDIATE
GOVERNMENT FUND (A)
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ 35,537,210 $ 27,331,619
All Others............. 985,939 170,000
<CAPTION>
INTERMEDIATE INVESTMENT
GRADE FUND (B)
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ 120,529,138 $ 174,618,263
All Others............. 164,451,856 101,736,826
<CAPTION>
INTERMEDIATE NEW YORK
TAX-EXEMPT FUND (A)
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ -- $ --
All Others............. 11,341,357 7,921,883
<CAPTION>
INTERMEDIATE TAX-EXEMPT
FUND (B)
----------------------------
PURCHASES SALES
------------- -------------
<S> <C> <C>
US Gov't Securities.... $ -- $ --
All Others............. 82,513,470 78,211,590
</TABLE>
(A) FOR THE YEAR ENDED DECEMBER 31, 1997.
(B) FOR THE PERIOD APRIL 1, 1997 (COMMENCEMENT OF INVESTMENT OPERATIONS) THROUGH
DECEMBER 31, 1997.
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 Government
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 were as follows:
EQUITY INCOME FUND
FOR THE YEAR ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
------------- ----------
<S> <C> <C>
Options outstanding at
December 31, 1996......... -0- $ -0-
Options written during the
year...................... 2,650 934,644
Options terminated in
closing purchase
transactions.............. (1,050) (462,585)
Options exercised.......... (500) (238,492)
Options expired............ (600) (181,944)
------ ----------
Options outstanding at
December 31, 1997......... 500 $ 51,623
------ ----------
------ ----------
</TABLE>
111
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The cost of cancelling options in closing purchase transactions was $474,021
resulting in a net short-term capital loss of $11,436.
LARGE CAP GROWTH FUND
FOR THE PERIOD APRIL 1, 1997 (COMMENCEMENT OF
INVESTMENT OPERATIONS) THROUGH DECEMBER 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
------------- -----------
<S> <C> <C>
Options outstanding at
beginning of period......... -0- $ -0-
Options written during the
period...................... 2,330 388,564
Options terminated in closing
purchase transactions....... (100) (10,950)
Options exercised............ (480) (85,057)
Options expired.............. (650) (95,233)
----- -----------
Options outstanding at
December 31, 1997........... 1,100 $ 197,324
----- -----------
----- -----------
</TABLE>
The cost of cancelling options in closing purchase transactions was $10,950.
There was no capital gain or loss involved in these transactions.
SMALL CAP GROWTH FUND
FOR THE PERIOD APRIL 1, 1997 (COMMENCEMENT OF
INVESTMENT OPERATIONS) THROUGH DECEMBER 31, 1997:
<TABLE>
<CAPTION>
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
------------- -----------
<S> <C> <C>
Options outstanding at
beginning of period......... -0- $ -0-
Options written during the
period...................... 270 19,439
Options terminated in closing
purchase transactions....... (270) (19,439)
----- -----------
Options outstanding at
December 31, 1997........... -0- $ -0-
----- -----------
----- -----------
</TABLE>
The cost of cancelling options in closing purchase transactions was $12,352
resulting in a net short-term capital gain of $7,087.
7. RESTRICTED SECURITIES
The following chart shows securities held by the Funds at December 31, 1997
that are restricted:
INTERNATIONAL EQUITY FUND
FOR THE YEAR ENDED DECEMBER 31, 1997:
<TABLE>
<CAPTION>
DATE U.S.
SECURITY ACQUIRED $ COST
- ------------------------------- ----------- ---------
<S> <C> <C>
Corporacion Geo SA, B Shares
(ADR)......................... 5/05/97 $ 55,575
6/05/97 98,380
6/12/97 77,000
6/13/97 8,150
6/27/97 81,030
9/05/97 120,900
</TABLE>
The security shown above is restricted and illiquid and has been valued at fair
value in accordance with procedures described in Note 2(A). The value of this
security at December 31, 1997 was $627,550, representing 0.6% of net assets.
8. RECLASSIFICATION OF CAPITAL ACCOUNTS
At December 31, 1997, reclassifications were made to the capital accounts of
the Equity Income Fund, 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, and net assets were not affected by
these changes.
112
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
BNY HAMILTON FUNDS, INC.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of BNY Hamilton Funds, Inc. (BNY Hamilton Equity
Income Fund, BNY Hamilton Large Cap Growth Fund, BNY Hamilton Small Cap Growth
Fund, BNY Hamilton International Equity Fund, BNY Hamilton Intermediate
Government Fund, BNY Hamilton Intermediate Investment Grade Fund, BNY Hamilton
Intermediate New York Tax-Exempt Fund, BNY Hamilton Intermediate Tax-Exempt
Fund, BNY Hamilton Money Fund, and BNY Hamilton Treasury Money Fund) as of
December 31, 1997, and the related statements of operations, changes in net
assets, and financial highlights for the year then ended for the BNY Hamilton
Equity Income Fund, BNY Hamilton Intermediate Government Fund, BNY Hamilton
Intermediate New York Tax-Exempt Fund, and BNY Hamilton Money Fund and for the
period April 1, 1997 (commencement of investment operations) to December 31,
1997, for the BNY Hamilton Large Cap Growth Fund, BNY Hamilton Small Cap Growth
Fund, BNY Hamilton International Equity Fund, BNY Hamilton Intermediate
Investment Grade Fund, BNY Hamilton Intermediate Tax-Exempt Fund and BNY
Hamilton Treasury Money Fund. These financial statements and financial
highlights are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The statements of changes in net
assets for the year ended December 31, 1996 and the financial highlights for
each of the four years in the period then ended, were audited by other auditors
whose report thereon dated February 7, 1997, expressed an unqualified opinion on
those statements of changes in net assets and financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997 by correspondence with the custodian and the performance of
other appropriate audit procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
113
<PAGE>
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
BNY Hamilton Equity Income Fund, BNY Hamilton Large Cap Growth Fund, BNY
Hamilton Small Cap Growth Fund, BNY Hamilton International Equity Fund, BNY
Hamilton Intermediate Government Fund, BNY Hamilton Intermediate Investment
Grade Fund, BNY Hamilton Intermediate New York Tax-Exempt Fund, BNY Hamilton
Intermediate Tax-Exempt Fund, BNY Hamilton Money Fund, and BNY Hamilton Treasury
Money Fund (comprising the BNY Hamilton Funds, Inc.) as of December 31, 1997,
the results of their operations, changes in their net assets and financial
highlights for the respective stated periods, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
February 13, 1998
- --------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION (UNAUDITED)
For federal income tax purposes, 40.14% and 44.87% of the ordinary income
dividends paid to you during the year ended December 31, 1997 for BNY Hamilton
Equity Income Fund and BNY Hamilton Large Cap Growth Fund, respectively, qualify
for the corporate dividend deduction under section 243 of the Internal Revenue
Code.
Capital gain distributions paid to shareholders by the Fund during the year
ended December 31, 1997, whether taken in shares or cash, were:
<TABLE>
<CAPTION>
28% CAPITAL GAIN 20% CAPITAL GAIN
DISTRIBUTIONS DISTRIBUTIONS
---------------------------- ----------------------------
<S> <C> <C>
BNY Hamilton Equity Income Fund 21,299,662 22,289,541
BNY Hamilton Large Cap Growth Fund 8,357,757 40,012,009
BNY Hamilton Small Cap Growth Fund 3,070,381 3,138,008
BNY Hamilton Intermediate Tax-Exempt Fund 444,293 457,433
</TABLE>
In addition, for the calendar year ended December 31, 1997, BNY Hamilton
Intermediate New York Tax-Exempt Fund and BNY Hamilton Intermediate Tax-Exempt
Fund designate 100% of the dividends paid by each Fund from net investment
income as "exempt-interest dividends".
114
<PAGE>
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
J. David Huber, Chief Executive Officer
William J. Tomko, President
Michael J. Brascetra, Vice President
Mary A. Madick, Vice President
Anthony L. Mercure, 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
<PAGE>
[LOGO]
BNY HAMILTON FUNDS
3435 STELZER ROAD, COLUMBUS, OH 43219-3035
02/98 BNY-0081
