<PAGE> 1
A COMMITMENT
TO EXCELLENCE IN INVESTING
THE FLEX-PARTNERS FUNDS 1995 ANNUAL REPORT
THE TAA FUND
THE BTB FUND
<PAGE> 2
FLEX-PARTNERS 1995 ANNUAL REPORT
- --------------------------------------------------------------------------------
[PHOTO OF ROBERT S. MEEDER SR., PRESIDENT]
Dear Shareholder:
Success in most worthwhile endeavors is grounded in a commitment to a set of
basic values and principles. Success in investing is no exception to this rule.
We believe that if we are to succeed on behalf of our shareholders, our
commitment to a basic set of investment guidelines must be complete; our
adherence to them must be constant.
Since the inception of The Flex-Partners Funds, we have worked to provide solid
investment results. In doing so, we have sought to remain committed not only to
the various funds' investment disciplines, but also to your expectations.
Some of the economic and political factors that can have a significant influence
on the health of the securities markets are well-covered in the media at this
time. A partial listing of these factors includes:
a) What will be the sustained trend of interest rates? The historical
evidence is conclusive that a trend reversal of the last two years
(declining rates) will automatically drive bond prices down and,
similarly, have a negative influence on stock prices.
b) For the last twelve to fifteen months, corporate earnings have, on
balance, significantly increased and have exceeded expectations in many
instances. The level of earnings has reduced the ratio of stock prices
from "over-priced" to "reasonably priced." But if negative earning
surprises develop in the coming months, the stock market is vulnerable.
c) The amount of new money flowing into mutual funds in the U.S. has set
all-time records. This flow of over ten billion dollars a month into
equity funds created an imbalance of demand for the supply and demand
equation . . . and consequently pushed stock prices higher. If this flow
of money declines, or if for some reason this new money becomes uneasy
with the risk of the market, a reversal of the supply/demand ratio could
become nasty. History suggests that the momentum of a pendulum does not
last forever, and a change is but a matter of time.
d) And, of course, we are in an election year. What will be concluded and
what the impact of it will be on the attitude of investors is not clear
in our crystal ball. I don't know what impact 1996 politics will have on
the markets, but I tend to believe it will probably create chaos rather
than tranquility.
This list could continue with challenging questions. There are always
uncertainties in the investment world, but it seems we have a few more than
normal at this time. Since the direction of the markets has been basically
positive for several years, a change in investment psychology can be more
detrimental to shareholder values after significant gains have developed.
In its short life, The BTB Fund has produced significant investment results . .
. and we believe it will continue to provide shareholders with a return superior
to its industry competitors. By the nature of its portfolio strategy, The BTB
Fund it is more conservative than many popular growth funds that have received
(or paid for) so much publicity in the last few years. A change of market
environment could make our utility fund (as well as The TAA Fund) a better
vehicle for investment than the XYZ Super Growth Fund... and still offer the
opportunity for growth during a positive environment like the last twelve
months. I suggest you take a hard look at your mutual fund holdings and evaluate
whether an adjustment may be prudent at this time.
Sincerely,
/s/ Robert S. Meeder
Robert S. Meeder, Sr.
President
January 31, 1996
[Picture of House]
2 FLEX-PARTNERS 1995 ANNUAL REPORT
<PAGE> 3
FLEX-PARTNERS 1995 ANNUAL REPORT
[PHOTO OF ROBERT S. MEEDER JR. PORTFOLIO MANAGER]
THE TAA FUND
The Mutual Fund Portfolio
Shareholders in The TAA Fund were exposed to the stock market for much of
the market's advance during the last 7 months of 1995.
From its inception on June 1, 1995 through December 31, 1995, The TAA Fund
provided shareholders with a return of 14.57%. For the same period, the average
Asset Allocation mutual fund monitored by Morningstar, Inc. provided a return of
10.95%.
Technology stocks, which served as a catalyst for the market's 1995 advance,
played a large role in the Portfolio of The TAA Fund during 1995. The TAA Fund
gained exposure to those securities by investing in mutual funds like the
Fidelity Equity Portfolio Growth, Fidelity Over-The-Counter Fund, the Founders
Growth Fund, the Twentieth Century Ultra and Vista funds, and the Weingarten
Fund.
As technology issues cooled during the fourth quarter, The TAA Fund adjusted
its portfolio accordingly, reducing exposure to funds with significant high-tech
exposure. Further, the Fund emphasized exposure to the S&P 500 Index and mutual
funds with exposure to large capitalization stocks.
One notable development during 1995 deals with a particularly strong fund
selection in the shape of the T. Rowe Price New Horizons Fund, whose portfolio
manager was named Morningstar's 1995 "Manager of the Year." A fund whose
performance had been lagging for several years going into 1995, The New Horizons
Fund, was a mainstay of The TAA Fund's portfolio and contributed significantly
to the Fund's performance during 1995.
From its inception on June 1, 1995 until late October, The TAA Fund was
fully exposed to the stock market.
By October, certain technical and fundamental questions about the market's
continued advance began to indicate that the most prudent posture was to again
adopt a partially defensive position. The TAA Fund remained partially defensive
until the first week in December when the Fund returned to a fully invested
position.
In hindsight, we were somewhat overcautious in our adoption of a partially
defensive posture late in 1995. However, we took the actions that we did based
on our evaluation of the level of risk and reward present in the stock market.
Based on the events that we saw unfolding in the stock market, our only course
was to be true to our investment discipline and to the commitment we have made
to the objectives of our shareholders.
PORTFOLIO EXPOSURE(1) as of 12/31/95
THE MUTUAL FUND PORTFOLIO
<TABLE>
<S> <C>
Money Market Instruments 3%
Mutual Fund/Stock Exposure 97%
</TABLE>
RECENT TOTAL RETURNS for the periods ended 12/31/95
7 months (since inception)
<TABLE>
<S> <C>
The TAA Fund 14.57
Average Asset Alloctaion Fund 10.95
</TABLE>
Source: Morningstar, Inc. (1) Portfolio Exposure reflects the effect of futures
contracts on Portfolio investments.
FLEX-PARTNERS 1995 ANNUAL REPORT 3
<PAGE> 4
FLEX-PARTNERS 1995 ANNUAL REPORT
[PHOTO OF LOWELL G. MILLER, PORTFOLIO MANAGER]
THE BTB FUND
The Utilities Stock Portfolio
The BTB Fund experienced an outstanding fourth quarter, thanks to
exceptional performance from nearly all of our largest holdings.
The BTB Fund A and C shares finished the foruth quarter of 1995 with total
returns of 9.45% and 9.42%, respectively. For the same period, Morningstar
Inc.'s average Utility Fund offered a return of 6.83% and the Dow Jones Utility
Average offered a return of 6.82%.
From its inception on July 11, 1995 to December 31, 1995, The BTB Fund A and
C shares provided total returns of 15.11% and 15.07%, respectively.
During the fourth quarter, The BTB Fund also significantly outperformed the
Lehman Brothers Government/Corporate index (a key fixed-income benchmark) which
rose only 4.66%. While our Fund does not share the same investment objectives as
the broader industrial equity markets, it is interesting to note that, during
the fourth quarter, we also outperformed the S&P 500 Index and the Dow Jones
Industrial Average.
The entire utilities market was strong during the fourth quarter for many
reasons. First, interest rates not only remained low but also declined
substantially, particularly at the long end of the bond market. There was little
show of strength in the economy - a circumstance which is typically met with
rate declines. Second, though the telecommunications legislation we thought
would pass in the fourth quarter was caught in the budget bottleneck, investors
continued to focus on the benefits for the Regional Bell stocks, and these
performed extremely well. Third, the spread between utility yields and bond
yields, which had become inverted, made progress back to normalcy---thus
permitting utilities to overcome even a strong bond market in terms of
performance. Fourth, both demand and pricing for natural gas boomed as "normal"
winter returned to the land, helping our substantial gas industry position to
recover previous lost ground and show fine gains.
We believe passage of the Telecommunications Bill, which occurred early in
1996, will be a positive for the utility stock market. A reduction in income
taxes would also make our yields more valuable, and thus support utility stocks.
A reversion to the mean of the utility/bond yield spread is in progress and
should provide some help as well, but, as with the fall in interest rates, there
is less of an anomaly now than there was before, so the impact of a reversion to
historical averages will be dampened. In sum, there are many factors which can
propel utilities higher over the next quarter, but none loom as large as they
did at the beginning of the third quarter. Realistically, not every quarter can
offer double-digit returns, but conditions remain favorable for our strategy.
The BTB Fund The Utilities Stock Portfolio
PORTFOLIO EXPOSURE as of 12/31/95
THE UTILITIES STOCK PORTFOLIO
<TABLE>
<S> <C>
Electric/Gas 6.9%
Telephones 35.1%
Natural Gas 19.8%
Electrics 15.0%
Money Market Instruments 8.4%
Oil/Gas 7.3%
Water, Diversified Utilites 7.5%
</TABLE>
RECENT TOTAL RETURNS for the period ended 12/31/95
<TABLE>
<S> <C>
The BTB Fund A Shares 9.46
The BTB Fund C Shares 9.42
Average Utility Fund 6.83
</TABLE>
Source: Morningstar, Inc.
4 FLEX-PARTNERS 1995 ANNUAL REPORT
<PAGE> 5
FLEX-PARTNERS 1995 ANNUAL REPORT
MUTUAL FUND PORTFOLIO
Portfolio of Investments as of December 31, 1995
================================================================================
<TABLE>
<CAPTION>
SHARES OR VALUE
FACE AMOUNT (Notes 1 and 2)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
MUTUAL FUNDS - 81.6%
Acorn International Fund 60 $ 1,000
Charles Schwab Money Market Fund 8,376,894 8,376,894
Constellation Fund 83 1,879
Fidelity Core Money Market Fund 5,549,983 5,549,983
Fidelity Equity Portfolio Growth Fund 333,197 12,628,156
Fidelity Growth & Income Fund 267,791 7,243,753
Founders Growth Fund 897,745 13,259,700
Neuberger & Berman Focus Fund 387,385 10,819,650
Neuberger & Berman Guardian Fund 457,705 10,540,947
Neuberger & Berman Manhattan Fund 173,284 2,103,666
PBNG Growth Fund 50,605 1,210,472
Pin Oak Aggressive Stock Fund (1) 23,041 384,793
T.Rowe Price New Era Fund 122 2,771
T.Rowe Price New Horizons Fund 724,089 14,843,822
Twentieth Century Ultra Fund 52,948 1,382,468
Twentieth Century Vista Fund 114,172 1,666,912
Weingarten Equity Fund 477,272 8,462,030
White Oak Growth Stock Fund 14,307 256,096
- ----------------------------------------------------------------------------------------------------
TOTAL MUTUAL FUNDS
(Cost $93,054,647) 98,734,992
- ----------------------------------------------------------------------------------------------------
U.S.TREASURY BILLS - 1.2%
*U.S..Treasury Bill, 5.29%, due 1/04/96 $ 150,000 149,912
*U.S. Treasury Bill, 5.22%, due 1/04/96 250,000 249,891
*U.S. Treasury Bill, 5.26%, due 1/04/96 1,000,000 999,486
U.S. Treasury Bill, 6.66%, due 1/11/96 25,200 25,149
- ----------------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY BILLS
(Cost $1,424,438) 1,424,438
- ----------------------------------------------------------------------------------------------------
*Pledged $1,400,000 face amount as collateral on futures contracts
REPURCHASE AGREEMENTS - 17.2%
(Collateralized by U.S. government obligations -
market value $21,328,465)
Everen Securities, dated 12/29/95, 5.90%, due 1/02/96 2,550,000 2,550,000
Smith Barney, dated 12/28/95, 5.90%, due 1/02/96 18,250,000 18,250,000
- ----------------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $20,800,000) 20,800,000
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100%
(Cost $115,279,085) $120,959,430
====================================================================================================
<CAPTION>
FUTURES CONTRACTS
CONTRACTS
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Long, S&P 500 futures contracts
face amount $32,468,625 expiring in March, 1996 105 36,750
Long, Midcap futures contracts
face amount $1,962,450 expiring in March, 1996 18 9,000
- ----------------------------------------------------------------------------------------------------
NET RECEIVABLE FOR FUTURES CONTRACTS SETTLEMENTS 45, 750
- ----------------------------------------------------------------------------------------------------
</TABLE>
(1) No dividend paid on security in 1995.
See accompanying notes to financial statements
FLEX-PARTNERS 1995 ANNUAL REPORT 5
<PAGE> 6
FLEX-PARTNERS 1995 ANNUAL REPORT
UTILITIES STOCK PORTFOLIO
Portfolio of Investments as of December 31, 1995
================================================================================
<TABLE>
<CAPTION>
SHARES OR VALUE
INDUSTRIES/CLASSIFICATIONS FACE AMOUNT (Notes 1 and 2)
- ---------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS - 91.6%
ELECTRIC/GAS UTILITY - (6.9%)
MDU Resources Group Incorporated 2,100 $ 41,738
Montana Power Company 1,300 29,412
Nipsco Industries Incorporated 1,700 65,025
Utilicorp United Incorporated 5,500 161,563
- ---------------------------------------------------------------------------------
297,738
- ---------------------------------------------------------------------------------
ELECTRIC UTILITY - (15.0%)
AES Corporation(1) 2,600 62,075
Cinergy Corporation 3,900 119,437
Ipalco Enterprises Incorporated 2,000 76,250
KU Energy Corporation 1,300 39,000
LG&E Energy Corporation 2,300 97,175
Pacificorp 8,000 170,000
Teco Energy Incorporated 3,000 76,875
- ---------------------------------------------------------------------------------
640,812
- ---------------------------------------------------------------------------------
DIVERSIFIED UTILITY - (3.8%)
Citizens Utilities Company Class B 12,686 160,158
- ---------------------------------------------------------------------------------
NATURAL GAS (DISTRIBUTOR) - (19.8%)
Bay State Gas Company 1,700 47,175
Brooklyn UN Gas Company 3,900 114,075
Consolidated Natural Gas Company 2,900 131,587
MCN Corporation 6,200 144,150
Nicor Incorporated 1,800 49,500
Panhandle Eastern Corporation 5,500 153,313
Transcanada Pipelines Ltd. 3,200 44,000
UGI Corporation 2,000 41,500
Wicor Incorporated 3,800 122,550
- ---------------------------------------------------------------------------------
847,850
- ---------------------------------------------------------------------------------
OIL/GAS (DOMESTIC) - (7.3%)
Enron Corporation 3,000 114,375
Sante Fe Pacific Pipeline Partners 1,600 58,600
Williams Companies Incorporated 3,200 140,400
- ---------------------------------------------------------------------------------
313,375
- ---------------------------------------------------------------------------------
TELECOMMUNICATION EQUIPMENT - (1.7%)
DSC Communications(1) 2,000 73,750
- ---------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - (33.4%)
Alltel Corporation 5,100 150,450
American Telephone & Telegraph Corporation 1,500 97,125
Ameritech Corporation 2,500 147,500
Bell Atlantic Corporation 1,400 93,625
Century Telephone Enterprise 5,500 174,625
Cincinnati Bell Incorporated 2,000 69,500
Frontier Corporation 6,500 195,000
GTE Corporation 3,200 140,800
Nynex Corporation 300 16,200
Sprint Corporation 2,400 95,700
U.S. West Incorporated 6,000 214,500
United Media Group 2,000 38,000
- ---------------------------------------------------------------------------------
1,433,025
=================================================================================
</TABLE>
CONTINUED
6 FLEX-PARTNERS 1995 ANNUAL REPORT
<PAGE> 7
FLEX-PARTNERS 1995 ANNUAL REPORT
UTILITIES STOCK PORTFOLIO
Portfolio of Investments, continued
<TABLE>
<CAPTION>
SHARES OR VALUE
INDUSTRIES/CLASSIFICATIONS FACE AMOUNT (Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
WATER UTILITY - (3.7%)
American Water Works Incorporated 4,100 159,387
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $3,503,676) 3,926,095
- --------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 8.4%
(Collateralized by U.S. government obligations -
market value $360,995)
Everen Securities, dated 12/29/95, 5.90%, due 1/02/96 $360,000 360,000
- --------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $360,000) 360,000
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100%
(Cost $3,863,676) $4,286,095
============================================================================================
</TABLE>
(1)No dividend paid in 1995.
See accompanying notes to financial statements.
FLEX-PARTNERS 1995 ANNUAL REPORT 7
<PAGE> 8
FLEX-PARTNERS 1995 ANNUAL REPORT
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
TAA FUND BTB FUND
<S> <C> <C>
Assets:
- -------------------------------------------------------------------------------------------------
Investment in corresponding portfolio $11,466,987 $1,410,061
- -------------------------------------------------------------------------------------------------
Receivable for capital stock issued 93,122 21,588
- -------------------------------------------------------------------------------------------------
Unamortized organizational costs 25,061 25,836
- -------------------------------------------------------------------------------------------------
Prepaid expenses and other assets 13
- -------------------------------------------------------------------------------------------------
Total Assets 11,585,183 1,457,485
- -------------------------------------------------------------------------------------------------
Liabilities:
- -------------------------------------------------------------------------------------------------
Dividends payable 102
- -------------------------------------------------------------------------------------------------
Accrued transfer agent and administrative fees 844
- -------------------------------------------------------------------------------------------------
Accrued liabilities 60,659 34,719
- -------------------------------------------------------------------------------------------------
Total Liabilities 61,503 34,821
- -------------------------------------------------------------------------------------------------
Net Assets:
- -------------------------------------------------------------------------------------------------
Capital 11,772,480 1,333,938
- -------------------------------------------------------------------------------------------------
Distributions in excess of net realized gain on investments (32,907) --
- -------------------------------------------------------------------------------------------------
Accumulated undistributed net realized
loss on investments -- (388)
- -------------------------------------------------------------------------------------------------
Net unrealized gain (loss) on investments (202,813) 89,114
- -------------------------------------------------------------------------------------------------
Net Assets $11,523,680 $1,422,664
- -------------------------------------------------------------------------------------------------
Net Assets:
- -------------------------------------------------------------------------------------------------
Class A Shares N/A $ 640,762
- -------------------------------------------------------------------------------------------------
Class C Shares 11,523,680 781,902
- -------------------------------------------------------------------------------------------------
Total $11,523,680 $1,422,664
- -------------------------------------------------------------------------------------------------
Outstanding units of beneficial interest (shares) :
- -------------------------------------------------------------------------------------------------
Class A Shares N/A 44,923
- -------------------------------------------------------------------------------------------------
Class C Shares 869,248 54,782
- -------------------------------------------------------------------------------------------------
Total 869,248 99,705
- -------------------------------------------------------------------------------------------------
Net asset value - redemption price per share:
- -------------------------------------------------------------------------------------------------
Class A Shares $ N/A $ 14.26
- -------------------------------------------------------------------------------------------------
Class C Shares* 13.26 14.27
- -------------------------------------------------------------------------------------------------
Sales Charge (Class A) N/A 4.00%
- -------------------------------------------------------------------------------------------------
Offering price (100%/(100%-Sales Charge) of net asset
value adjusted to nearest cent) per share - Class A $ N/A $ 14.85
- -------------------------------------------------------------------------------------------------
</TABLE>
*Redemption price varies based upon holding period
See accompanying notes to financial statements
8 FLEX-PARTNERS 1995 ANNUAL REPORT
<PAGE> 9
FLEX-PARTNERS 1995 ANNUAL REPORT
STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
TAA FUND * BTB FUND **
<S> <C> <C>
Net investment income from corresponding
portfolio:
- -------------------------------------------------------------------------------------------------
Interest $ 49,468 $ 833
- -------------------------------------------------------------------------------------------------
Dividends 25,287 7,673
- -------------------------------------------------------------------------------------------------
Expenses (40,822) (4,384)
- -------------------------------------------------------------------------------------------------
Total Net Investment Income From
Corresponding Portfolio 33,933 4,122
- -------------------------------------------------------------------------------------------------
Fund Expenses:
- -------------------------------------------------------------------------------------------------
Legal fees 1,476 1,305
Audit fees 4,981 540
Printing 5,196 3,356
Transfer agent fees 2,581 4,000
Administrative fee 1,129 67
Trustees fees and expenses 5,396 4,627
Distribution plan - Class A -- 338
Distribution plan - Class C 33,005 639
Shareholder servicing fee - Class A -- 338
Shareholder servicing fee - Class C 11,002 213
Amortization of organizational costs 3,032 1,843
Registration 12,626 18,065
Postage 1,057 250
Other expenses 2,401 2,253
- -------------------------------------------------------------------------------------------------
Total expenses 83,882 37,834
Transfer Agent and Administrative fees reimbursed -- (3,167)
Expenses reimbursed by adviser (36,869) (34,959)
- -------------------------------------------------------------------------------------------------
Total expenses - net 47,013 (292)
- -------------------------------------------------------------------------------------------------
INVESTMENT INCOME (LOSS) - NET (13,080) 4,414
- -------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS - NET:
- -------------------------------------------------------------------------------------------------
Net realized gain (loss) on futures 24,514 --
Net realized gain (loss) on investments 789,813 (388)
Change in unrealized appreciation (depreciation) of investments (202,813) 89,114
- -------------------------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 611,514 88,726
- -------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING PROM OPERATIONS $ 598,434 $ 93,140
- -------------------------------------------------------------------------------------------------
</TABLE>
*For the period June 1, 1995 (commencement of operations) to December 31, 1995
**For the period July 11, 1995 (commencement of operations) to December 31, 1995
See accompanying notes to financial statements
FLEX-PARTNERS 1995 ANNUAL REPORT 9
<PAGE> 10
FLEX-PARTNERS 1995 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET
ASSETS For the Periods Ended December 31, 1995
<TABLE>
<CAPTION>
TAA FUND * BTB FUND * *
Class C Total Class A Class C
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Investment income (loss)- net $ (13,080) $ 4,414 $ 2,947 $ 1,467
Net realized gain (loss) on investments
and futures contracts 814,327 (388) (195) (193)
Net change in unrealized appreciation
(depreciation) of investments (202,813) 89,114 50,091 39,023
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations 598,434 93,140 52,843 40,297
- ---------------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Investment income - net -- (4,414) (2,947) (1,467)
Net realized gain from investment transactions (847,234) -- -- --
- ---------------------------------------------------------------------------------------------------------------------
Net decrease in net assets resulting
from dividends and distributions (847,234) (4,414) (2,947) (1,467)
- ---------------------------------------------------------------------------------------------------------------------
CAPITAL TRANSACTIONS:
Net proceeds from sales 11,115,307 1,335,133 593,527 741,606
Reinvestment of dividends 847,234 3,831 2,365 1,466
Cost of redemptions (190,061) (5,026) (5,026) --
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions 11,772,480 1,333,938 590,866 743,072
- ---------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 11,523,680 1,422,664 640,762 781,902
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS - Beginning of period 0 0 0 0
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS - End of period $ 11,523,680 $ 1,422,664 $ 640,762 $ 781,902
- ---------------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Issued 818,680 99,792 45,114 54,678
Reinvested 63,894 277 173 104
Redeemed (13,326) (364) (364) 0
- ---------------------------------------------------------------------------------------------------------------------
Change in shares 869,248 99,705 44,923 54,782
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the period June 1, 1995 (commencement of operations) to December 31, 1995
**For the period July 11, 1995 (commencement of operations) to December 31, 1995
See accompanying notes to financial statements
10 FLEX-PARTNERS 1995 ANNUAL REPORT
<PAGE> 11
FLEX-PARTNERS 1995 ANNUAL REPORT
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for an average share outstanding during each
period
<TABLE>
<CAPTION>
TAA FUND - CLASS C
For the Period
June 1, 1995 (2)
to December 31, 1995
<S> <C>
Net Asset Value, Beginning of Period $12.50
- --------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------
Net Investment Loss (0.02)
- --------------------------------------------------------------------------------------------------
Net Gains or Losses on Securities (both realized and unrealized) 1.84
- --------------------------------------------------------------------------------------------------
Total From Investment Operations 1.82
- --------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------
Distributions (from capital gains) (1.06)
- --------------------------------------------------------------------------------------------------
Total Distributions (1.06)
- --------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $13.26
- --------------------------------------------------------------------------------------------------
TOTAL RETURN 14.57%
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------
Net Assets, End of Period ($000) 11,524
- --------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets 1.97% (1)
- --------------------------------------------------------------------------------------------------
Ratio of Net Investment Income (Loss) to Average Net Assets (0.29%) (1)
- --------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets, before reimbursement of fees 2.80% (1)
- --------------------------------------------------------------------------------------------------
Ratio of Net Investment Income (Loss) to Average
Net Assets, before reimbursement of fees (1.12%) (1)
- --------------------------------------------------------------------------------------------------
</TABLE>
(1)Annualized
(2)Date of commencement of operations
<TABLE>
<CAPTION>
BTB FUND
For the Period July 11, 1995(2)
to December 31, 1995
<S> <C> <C>
Class A Class C
Net Asset Value, Beginning of Period $12.50 $12.50
- ----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------------------------------
Net Investment loss 0.12 0.10
- ----------------------------------------------------------------------------------------------------------------
Net Gains or Losses on Securities (both realized and unrealized) 1.76 1.77
- ----------------------------------------------------------------------------------------------------------------
Total From Investment Operations 1.88 1.87
- ----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------
Dividends (from net investment income) (0.12) (0.10)
- ----------------------------------------------------------------------------------------------------------------
Total Distributions (0.12) (0.10)
- ----------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $14.26 $14.27
- ----------------------------------------------------------------------------------------------------------------
TOTAL RETURN 15.11% 15.07%
- ----------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------
Net Assets, End of Period ($000) 641 782
- ----------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets 1.75% (1) 2.00% (1)
- ----------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets 2.17% (1) 1.72% (1)
- ----------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets, before
reimbursement of fees 22.70% (1) 13.27% (1)
- ----------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income (Loss) to Average
Net Assets, before reimbursement of fees (18.78%) (1) (9.55%) (1)
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Annualized
(2) Date of commencement of operations
See accompanying notes to financial statements
FLEX-PARTNERS 1995 ANNUAL REPORT 11
<PAGE> 12
FLEX-PARTNERS 1995 ANNUAL REPORT
THE FLEX-PARTNERS TRUST
THE TAA FUND AND THE BTB FUND
NOTES TO FINANCIAL STATEMENTS, DECEMBER 31,1995
1. ORGANIZATION
The Flex-Partners Trust was organized in 1992 and is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The TAA Fund and The BTB Fund (the "Funds") commenced operations on
June 1, 1995 and July 11, 1995, respectively, when each Fund began investing all
of its investable assets in a corresponding open-end management investment
company (each a "Portfolio" and collectively the "Portfolios") having the same
investment objectives as the Fund. On December 31, 1995 The TAA Fund held
approximately 9% of the total assets of the Mutual Fund Portfolio and The BTB
Fund held approximately 33% of the total assets of the Utilities Stock
Portfolio. The BTB Fund has issued two classes of shares: A Class shares and C
Class shares. A Class shares are sold with a front-end sales charge (maximum
4.00%), and C Class shares may be subject to a contingent deferred sales charge.
The financial statements of the Portfolios, including the Portfolios of
Investments, are included elsewhere in this report and should be read in
conjunction with the financial statements of each respective Fund.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Funds.
Valuation of Investments-- Valuation of securities by the Portfolios is
discussed at Note 1 of the Portfolios Notes to Financial Statements which are
included elsewhere in this report (See page 16).
Income Taxes -- It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no Federal
income tax provision is required.
Distributions to Shareholders -- Dividends to shareholders are recorded on the
ex-dividend date.
Organizational Costs -- The cost related to the organization of each Fund has
been deferred and is being amortized on a straight-line basis over a five-year
period.
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS WITH AFFILIATES
R. Meeder & Associates (RMA), a wholly-owned subsidiary of Muirfield Investors,
Inc. (MII), provides each Portfolio with investment management, research,
statistical and advisory services. Miller/Howard Investments, Inc. (Subadviser)
serves as the Utilities Stock Portfolio's Subadviser under an Investment
Subadvisory Agreement between RMA and the Subadviser.
Mutual Funds Service Co., (MFS), a wholly-owned subsidiary of MII, serves as
stock transfer, dividend disbursing and shareholder servicing agent for all of
the Trust's separate Funds. Subject to a $4,000 annual minimum fee each class of
shares of each Fund incurs an annual fee equal to the greater of $15 per
shareholder account or 0.10% of each Fund's average net assets, payable monthly.
MFS also provides the Trust with certain administrative services. Each Fund
incurs an annual fee, payable monthly, of 0.03% of the Fund's average net
assets.
The Funds have adopted distribution expense plans pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (the "Plans"). Pursuant to the Plans, the
Funds may use as much as 25/100 of 1% and 75/100 of 1% of net assets annually to
aid in the distribution of Class A shares and Class C shares, respectively. Each
Fund has adopted a shareholder servicing plan for using as much as 25/100 of 1%
of net assets annually to aid in the distribution of each Class A shares and
Class C shares.
Certain officers and/or trustees of the Fund and the Portfolio are officers
and/or directors of MII, RMA and MFS.
4. CAPITAL SHARE TRANSACTIONS
At December 30, 1995, an indefinite number of shares of $0.10 par value stock
were authorized in each of the Funds and paid in capital amounted to $11,772,480
in The TAA Fund and $1,333,938 in The BTB Fund. Capital stock transactions for
each class of shares appear elsewhere in this report.
5. DISTRIBUTIONS
The BTB Fund declares as dividends and distributes monthly substantially all of
its net investment income. The TAA Fund declares as dividends and distributes
quarterly substantially all of its net investment income. Net realized capital
gains for all Funds, if any, are distributed annually after deduction of prior
years' loss, carryforwards. Dividends from net investment income and any
distributions of realized capital gains are distributed in cash or reinvested in
additional shares of each class of shares of each Fund at net asset value.
At December 31, 1995, The BTB Fund had available for federal income tax purposes
unused capital loss carryforwards. The amount of the carryforward is $388 and
will expire in 2003.
12 FLEX-PARTNERS 1995 ANNUAL REPORT
<PAGE> 13
FLEX-PARTNERS 1995 ANNUAL REPORT
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
The Flex-Partners' Trust
The TAA and BTB Funds
We have audited the accompanying statements of assets and liabilities of The
Flex-Partners' Trust, The TAA and BTB Funds (Funds) as of December 31, 1995, and
the related statements of operations, statements of changes in net assets and
the financial highlights for the periods indicated herein. These financial
statements and the financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
December 31, 1995, by correspondence with the custodian and other appropriate
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
TAA and BTB Funds of The Flex-Partners' Trust at December 31, 1995, the results
of their operations, the changes in their net assets and the financial
highlights for each of the periods indicated herein, in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
- -------------------------
KPMG Peat Marwick LLP
Columbus, Ohio
February 2, 1996
FLEX-PARTNERS 1995 ANNUAL REPORT 13
<PAGE> 14
FLEX-PARTNERS 1995 ANNUAL REPORT
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<CAPTION>
MUTUAL UTILITIES
FUND STOCK
PORTFOLIO PORTFOLIO
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS :
- --------------------------------------------------------------------------------
Investments at market value* $100,159,430 $3,926,095
- --------------------------------------------------------------------------------
Repurchase Agreements* 20,800,000 360,000
- --------------------------------------------------------------------------------
Cash -- 121
- --------------------------------------------------------------------------------
Receivable for futures contracts settlement 45,750 --
- --------------------------------------------------------------------------------
Interest receivable 61,492 177
- --------------------------------------------------------------------------------
Dividends receivable 1,139,291 11,374
- --------------------------------------------------------------------------------
Prepaid/Other assets 454 --
- --------------------------------------------------------------------------------
Unamortized organization costs 10,377 40,146
- --------------------------------------------------------------------------------
Total Assets 122,216,794 4,337,913
- --------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------
Payable to investment adviser 85,828 3,325
- --------------------------------------------------------------------------------
Accrued fund accounting fees 4,159 628
- --------------------------------------------------------------------------------
Other accrued liabilities 17,678 43,090
- --------------------------------------------------------------------------------
Total Liabilities 107,665 47,043
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS:
Capital 116,428,784 3,868,451
- --------------------------------------------------------------------------------
Net unrealized gain on investments 5,680,345 422,419
- --------------------------------------------------------------------------------
Net Assets $122,109,129 $4,290,870
- --------------------------------------------------------------------------------
*Securities at cost 115,279,085 3,863,676
- --------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements
STATEMENTS OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
MUTUAL UTILITIES
FUND STOCK
PORTFOLIO PORTFOLIO*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME - NET:
Interest $ 1,911,196 $ 8,057
- --------------------------------------------------------------------------------
Dividends 329,219 54,996
- --------------------------------------------------------------------------------
Total Income 2,240,415 63,053
- --------------------------------------------------------------------------------
Expenses:
- --------------------------------------------------------------------------------
Investment advisory fees 874,473 14,297
Legal fees 1,853 1,100
Audit fees 13,482 3,028
Custodian fees 11,483 1,755
Accounting fees 47,427 4,065
Trustees fees and expenses 5,223 3,776
Insurance 2,241 --
Amortization of organization cost 5,438 4,744
Other expenses 399 1,611
- --------------------------------------------------------------------------------
Total Expenses 962,019 34,376
Directed brokerage payments received -- (1,212)
- --------------------------------------------------------------------------------
Total Expenses - net 962,019 33,164
- --------------------------------------------------------------------------------
INVESTMENT INCOME - NET 1,278,396 29,889
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
- --------------------------------------------------------------------------------
Net realized gain on futures contracts 2,494,274 --
- --------------------------------------------------------------------------------
Net realized gain (loss) on investments 13,060,418 (1,067)
- --------------------------------------------------------------------------------
Net change in unrealized appreciation
of investments 5,680,803 422,419
- --------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS 21,235,495 421,352
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 22,513,891 $ 451,241
- --------------------------------------------------------------------------------
</TABLE>
*For the period June 21, 1995 (commencement of operations) to December 31, 1995.
See accompanying notes to financial statements
14 FLEX-PARTNERS 1995 ANNUAL REPORT
<PAGE> 15
FLEX-PARTNERS 1995 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1994 and December 31, 1995
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
MUTUAL FUND UTILITIES STOCK
PORTFOLIO PORTFOLIO*
Year ended December 31, Year ended December 31,
1995 1994 1995
<S> <C> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS:
OPERATIONS:
Investment income- net $ 1,278,396 $ 2,272,777 $ 29,889
Net realized gain (loss)
on investments
and futures contracts 15,554,692 302,941 (1,067)
appreciation (depreciation)
of investments 5,680,803 (252,062) 422,419
- ---------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
resulting from operations 22,513,891 2,323,656 451,241
- ---------------------------------------------------------------------------------------
TRANSACTIONS
OF INVESTORS'
BENEFICIAL INTERESTS:
Contributions 34,671,819 26,769,231 3,908,655
Withdrawals (18,261,284) (27,513,563) (69,026)
- ---------------------------------------------------------------------------------------
Net increase (decrease)
in net assets resulting from
transactions of investors'
beneficial interests 16,410,535 (744,332) 3,839,629
- ---------------------------------------------------------------------------------------
TOTAL INCREASE
(DECREASE) IN NET ASSETS 38,924,426 1,579,324 4,290,870
- ---------------------------------------------------------------------------------------
NET ASSETS - Beginning of period 83,184,703 81,605,379 --
- ---------------------------------------------------------------------------------------
NET ASSETS - End of period $122,109,129 $ 83,184,703 $4,290,870
- ---------------------------------------------------------------------------------------
</TABLE>
*For the period June 21, 1995 (commencement of operations) to December 31, 1995.
See accompanying notes to financial statements
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
MUTUAL FUND PORTFOLIO
YEAR ENDED DEC. 31,
RATIOS/SUPPLEMENTAL DATA 1995 1994 1993
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Assets, End of Period ($000) 122,109 83,185 81,605
- -------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets** 0.95% 1.01% 1.03%
- -------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets 1.26% 2.76% 0.09%
- -------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 186.13% 168.17% 279.56%
- -------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
UTILITIES STOCK PORTFOLIO
FOR THE PERIOD
JUNE 21, 1995*
RATIOS/SUPPLEMENTAL DATA TO DEC. 31, 1995
- -------------------------------------------------------------------------------------------------
<S> <C>
Net Assets, End of Period ($000) 4,291
- -------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets** 2.32%(1)
- -------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets 2.09%(1)
- -------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets
before directed brokerage payments 2.40%(1)
- -------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets
before directed brokerage payments 2.01%(1)
- -------------------------------------------------------------------------------------------------
Portfolio Turnover Rate 5.06%
- -------------------------------------------------------------------------------------------------
Average brokerage commission per share $ 0.0600
- -------------------------------------------------------------------------------------------------
</TABLE>
(1)Annualized
*Date of commencement of operations
** Please refer to page 11 for total expense ratios relating to each
corresponding fund.
See accompanying notes to financial statements
FLEX-PARTNERS 1995 ANNUAL REPORT 15
<PAGE> 16
FLEX-PARTNERS 1995 ANNUAL REPORT
MUTUAL FUND PORTFOLIO
UTILITIES STOCK PORTFOLIO
DECEMBER 31, 1995
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Each separate Portfolio (the "Portfolios") is registered under the Investment
Company Act of 1940, as amended, as a no-load, open-end management investment
company which was organized as a trust under the laws of the State of New York.
Each Declaration of Trust permits the Trustees, who are the same for each
Portfolio, to issue beneficial interests in each Portfolio.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Portfolios.
Investments -- Money market securities held in the Portfolios maturing more than
sixty days after the valuation date are valued at the last sales price as of the
close of business on the day of valuation, or, lacking any sales, at the most
recent bid price or yield equivalent as obtained from dealers that make markets
in such securities. When such securities are valued within sixty days or less to
maturity, the difference between the valuation existing on the sixty-first day
before maturity and maturity value is amortized on a straight-line basis to
maturity. Securities maturing within sixty days from their date of acquisition
are valued at amortized cost.
Securities which are traded on stock exchanges are valued at the last sales
price as of the close of business of the New York Stock Exchange on the day of
valuation, or, lacking any sales, at the closing bid prices. Securities traded
on the over-the-counter market are valued at the most recent bid price or yield
equivalent as obtained from one or more dealers that make markets in such
securities. Mutual funds are valued at the daily redemption value determined by
the underlying fund.
Repurchase Agreements -- It is the Portfolio's policy to take possession of the
collateral for repurchase agreements before payment is made to the seller.
Market value of the collateral must be at least 100% of the amount of the
repurchase agreement.
Options & Futures -- Each Portfolio may engage in transactions in financial
futures contracts and options as a hedge against the change in market value of
the securities held in the portfolio, or which it intends to purchase. The
expectation is that any gain or loss on such transactions will be substantially
offset by any gain or loss on the securities in the underlying portfolio or on
those which are being considered for purchase. During the period ended December
31, 1995 the Mutual Fund Portfolio wrote the following option contracts:
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS PREMIUMS
- -------------------------------------------------------------------------------
<S> <C> <C>
Outstanding at Beginning of Period 0 $ 0
- -------------------------------------------------------------------------------
Options Written 173 186,057
- -------------------------------------------------------------------------------
Options Terminated (173) (186,057)
- -------------------------------------------------------------------------------
Outstanding at End of Period 0 $ 0
- -------------------------------------------------------------------------------
</TABLE>
To the extent that the Portfolio enters into futures contracts on an index or
group of securities the Portfolio exposes itself to an indeterminate liability
and will be required to pay or receive a sum of money measured by the change in
the market value of the index. Upon entering into a futures contract the
Portfolio is required to deposit either cash or securities in an amount
("initial margin") equal to a certain percentage of the contract value.
Subsequent payments ("variation margin") equal to changes in the daily
settlement price or last sale on the exchanges were they trade are paid or
received each day and are recorded as a gain or loss on futures contracts.
Call and put option contracts involve the payment of a premium for the right to
purchase or sell an individual security or index aggregate at a specified price
until the expiration of the contract. Such transactions expose the Portfolio to
the loss of the premium paid if the Portfolio does not sell or exercise the
contract prior to the expiration date. In the case of a call option, sufficient
cash or money market instruments will be segregated to complete the purchase.
Options are valued on the basis of the daily settlement price or last sale on
the exchanges where they trade and the changes in value are recorded as an
unrealized gain or loss until sold, exercised or expired. In the case of a
written option, premiums received by each portfolio upon writing the option are
recorded in the liability section of the Statement of Assets and Liabilities and
are subsequently adjusted to
16 FLEX-PARTNERS 1995 ANNUAL REPORT
<PAGE> 17
FLEX-PARTNERS 1995 ANNUAL REPORT
current market value. When the written option is closed, exercised or expired,
the portfolio realizes a gain or loss and the liability is eliminated.
Income Taxes -- It is the Portfolio's policy to comply with the requirements of
the Internal Revenue Code applicable to it. Therefore, no Federal income tax
provisions required.
Organizational Costs -- The costs related to the organization of each Portfolio
have been deferred and are being amortized by the Portfolio on a straight-line
basis over a five-year period.
Other -- The Portfolio follows industry practice and records security
transactions on the trade date. Gains and losses on security transactions are
determined on the specific identification basis. Dividend income is recognized
on the ex-dividend date, and interest income (including amortization of premium
and discount) is recognized as earned.
2. INVESTMENT ADVISORY, AND OTHER AGREEMENTS WITH AFFILIATES
R. Meeder & Associates (RMA), a wholly-owned subsidiary of Muirfield Investors,
Inc. (MII), provides the Portfolios with investment management research,
statistical and advisory services, and pays certain other expenses of the
Portfolios. Miller/Howard Investments, Inc. (Subadviser) serves as the Utilities
Stock Portfolio's Subadviser under an Investment Subadvisory Agreement between
RMA and the Subadviser. For such services the Portfolios pay monthly fees based
upon the average daily value of each Portfolio's net assets at the following
annual rate: 1% of average net assets up to $50 million, 0.75% of average net
assets exceeding $50 million up to $100 million and 0.60% of average net assets
exceeding $100 million.
Mutual Funds Service Co., (MFS), a wholly-owned subsidiary of MII, serves as
accounting services agent for each of the Portfolios. The minimum annual fee for
all such services for each Portfolio is $7,500. Subject to the applicable
minimum fee, each Portfolio's annual fee, payable monthly, is computed at the
rate of 0.15% of the first $10 million, 0.10% of the next $20 million, 0.02% of
the next $50 million, and 0.01% in excess of $80 million of the Portfolio's
average net assets.
Certain officers and/or trustees of the Portfolio are officers and/or directors
of MII, RMA and MFS.
3. PURCHASES AND SALES OF INVESTMENTS
Purchases and sales of investments, excluding short-term investments and U.S.
Government and agency obligations for the year ended December 31, 1995 are as
follows:
<TABLE>
<CAPTION>
PURCHASES SALES
- --------------------------------------------------------------------------------
<S> <C> <C>
Mutual Fund Portfolio $153,526,438 $77,373,285
- --------------------------------------------------------------------------------
Utilities Stock Portfolio $ 3,636,056 $ 131,312
- --------------------------------------------------------------------------------
</TABLE>
As of December 31, 1995, the aggregate cost of investments and net unrealized
appreciation (depreciation) for Federal income tax purposes was comprised of the
following:
<TABLE>
<CAPTION>
GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
INVESTMENT APPRECIATION DEPRECIATION (DEPRECIATION)
COST OF INVESTMENTS OF INVESTMENTS OF INVESTMENTS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mutual Fund Portfolio $115,644,899 $6,814,624 $(1,500,093) $5,314,531
- ---------------------------------------------------------------------------------------------------------------------------
Utilities Stock Portfolio $ 3,863,676 $ 428,434 $ (6,015) $ 422,419
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
FLEX-PARTNERS 1995 ANNUAL REPORT 17
<PAGE> 18
FLEX-PARTNERS 1995 ANNUAL REPORT
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees
The Flex-Partners' Trust
Mutual Fund Portfolio and Utilities Stock Portfolio
We have audited the accompanying statements of assets and liabilities of
the Mutual Fund Portfolio and Utilities Stock Portfolio (Portfolios), including
the schedules of portfolio investments, as of December 31, 1995, and the related
statements of operations, statements of changes in net assets and the financial
highlights for each of the periods indicated herein. These financial statements
and the financial highlights are the responsibility of the Portfolios'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
December 31, 1995, by correspondence with the custodian and other appropriate
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Mutual Fund Portfolio and Utilities Stock Portfolio at December 31, 1995, the
results of their operations, the changes in their net assets and the financial
highlights for each of the periods indicated herein, in conformity with
generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
- -------------------------
KPMG Peat Marwick LLP
Columbus, Ohio
February 2, 1996
18 FLEX-PARTNERS 1995 ANNUAL REPORT
<PAGE> 19
DISTRIBUTOR
Roosevelt & Cross, Incorporated
20 Exchange Place
New York, NY 10005
800-262-8642
MANAGER AND INVESTMENT ADVISER
R. Meeder & Associates
6000 Memorial Drive
Dublin, Ohio 43017
SUBADVISER/UTILITIES STOCK PORTFOLIO
Miller/Howard Investments, Inc.
141 Upper Byrdcliff Road
P.O. Box 549
Woodstock, New York 12498
BOARD OF TRUSTEES
Milton S. Bartholomew
Dr. Roger D. Blackwell
John M. Emery
Richard A. Farr
William L. Gurner
Robert S. Meeder, Sr.
Russel G. Means
Lowell G. Miller
Walter L. Ogle
Neil P. Ramsey
Philip A. Voelker
CUSTODIAN
Star Bank, N.A., Cincinnati
Cincinnati, Ohio 45201
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Mutual Funds Service Co.
6000 Memorial Drive
Dublin, Ohio 43017
AUDITORS
KPMG Peat Marwick LLP
Columbus, Ohio 43215
<PAGE> 20
A COMMITMENT
TO EXCELLENCE IN INVESTING
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
<PAGE> 21
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
THE INSTITUTIONAL FUND
The Money MArket Portfolio
Money market funds continued their resurgence in 1995, and The Flex-funds
Institutional Fund remained one of the nation's leading performers.
For the 12 months ended December 31, 1995, The Institutional Fund provided a
total return of 6.01%. The average first-tier only Institutional Fund provided a
return of 5.79% for the same period, according to IBC.
The 30-day compound yield of The Institutional Fund on December 31, 1995 was
5.77%.
Short-term interest rates, as measured by 91-day T-Bill yields, declined
slightly during 1995, beginning the year at approximately 5.76% and finishing at
approximately 5.59%. Due to this declining interest rate trend, the average
maturity of the Portfolio was approximately 58 days. Over the course of the
year, however, the average maturity was as high as 82 days. This relatively long
average maturity comes in marked contrast to 1994 when, as short-term interest
rates climbed from 3% to 6%, the Portfolio maintained an average maturity of
approximately 44 days.
The Portfolio of The Institutional Fund changed somewhat during the fourth
quarter of 1995 as the percentage of Portfolio assets devoted to Corporate
Obligations again increased and the number of different issues owned also
increased. Nevertheless, the Portfolio maintained its investment in "first tier"
issues (rated A1,P1 by the financial industry) throughout the year.
The Federal Reserve Board cut the Federal Funds Rate, the rate banks charge
one another for overnight loans, during 1995, perhaps based on continued low
inflation and a sluggish economy. Even though short-term interest rates declined
for the year, The Institutional Fund was still able to provide a total return of
6.01% for the year.
In 1996, our challenge and our commitment is to strive not only to offer
interest rates comparable with those offered by the marketplace as a whole, but
to maintain the position of leadership we have established thus far in the
Fund's history.
We are also striving to establish a tradition of consistent long-term
performance for The Institutional Fund similar to that of its sister fund, The
Flex-funds Money Market Fund. The Money Market Fund has finished in the top 10%
of Donoghue's General Purpose Money Market Funds for every 12-month period since
its inception in 1985. The Institutional Fund The Money Market Portfolio
[PHOTO OF PHILIP A. VOELKER, PORTFOLIO MANAGER]
PORTFOLIO EXPOSURE as of 12/31/95
THE MONEY MARKET PORTFOLIO
<TABLE>
<S> <C>
Repurchase Agreements 8.3%
Commercial Paper 39.1%
Corporate Obligations 47.9%
U.S. Gov't Obligations 4.7%
</TABLE>
RECENT TOTAL RETURNS for the periods ended 12/31/95
<TABLE>
<S> <C>
The Institutional Fund 6.01%
Institutional Fund Average 5.79%
</TABLE>
Source: IBC's Money Market Insight
2 The Institutional Fund 1995 Annual Report
<PAGE> 22
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
MONEY MARKET PORTFOLIO
Portfolio of Investments as of December 31, 1995
================================================================================
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT (Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER - 39.1%
American Honda Finance, 5.73%, due 2/23/96 $10,000,000 $ 9,915,642
American Honda Finance, 5.62%, due 4/02/96 3,000,000 2,956,913
BOT Financial, 6.20%, due 1/05/96 11,000,000 10,992,422
Dupont Corporation, 6.25%, due 1/03/96 275,000 274,905
Duff & Phelps, 5.47%, due 5/09/96 6,000,000 5,882,395
GTE Corporation, 5.83%, due 2/16/96 10,000,000 9,925,506
Idaho Power, 6.25%, due 1/11/96 140,000 139,757
Jefferson Smurfit, 5.70%, due 3/01/96 1,200,000 1,188,600
Jefferson Smurfit, 5.70%, due 3/19/96 4,000,000 3,950,600
Laclede Gas, 6.25%, due 1/22/96 432,000 430,425
Marsh MacClellan, 5.58%, due 3/14/96 3,120,000 3,084,697
Mitsubishi Motor Credit Corporation, 6.25%, due 1/18/96 518,000 516,471
National Utilities, 5.58%, due 3/12/96 2,000,000 1,977,990
Nynex Corporation, 5.74%, due 2/06/96 3,000,000 2,982,780
Nynex Corporation, 5.77%, due 1/12/96 10,000,000 9,982,369
Pacific Bell, 6.25%, due 1/22/96 390,000 388,578
Public Services Electric & Gas, 5.93%, due 1/11/96 8,142,000 8,128,588
Public Services Electric 6 Gas, 5.90%, due 1/17/96 3,061,000 3,052,973
Tambrands, 5.50%, due 6/04/96 3,500,000 3,417,118
Torchmark, 5.75%, due 2/14/96 10,600,000 10,525,506
Whirlpool Corporation, 5.77%, due 1/31/96 10,700,000 10,648,551
- --------------------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $100,362,786) 100,362,786
- --------------------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 47.9%
American Telephone & Telegraph Capital Corporation, 4.52%,
due 8/30/96 250,000 247,743
American Telephone & Telegraph Capital Corporation, 7.40%,
due 11/01/96 500,000 505,230
Associates Corporation, 7.50%, due 10/15/96 150,000 151,722
Associates Corporation, 4.75%, due 8/01/96 250,000 248,321
BP America, Incorporated, 10.00%, due 3/08/96 5,000,000 5,034,208
BP, Incorporated, 10.15%, due 3/15/96 190,000 191,649
Bank One, Dayton, 5.95%, due 10/02/96 5,000,000 5,000,000
* Bank One Capital Demand Note, 5.83%,
next redemption date 7/11/96, due 4/01/2113 3,510,000 3,510,000
Barnett Bank, 10.00%, due 1/08/96 3,500,000 3,502,308
Bat Industries, 8.60%, due 8/30/96 550,000 558,052
* Bear Stearns Floating Rate Note, 5.76%, due 3/01/96 10,000,000 10,000,000
* Best Sands Corporation Floating Rate Note,
5.95%, next redemption date 1/04/96, due 7/01/2002 850,000 850,000
* Care Life Project Floating Rate Note, 5.95%,
next redemption date 1/04/96, due 8/01/2111 1,375,000 1,375,000
Conrail, 5.20%, due 2/12/96 1,000,000 999,051
Continental Bankcorp, 9.875%, due 6/15/96 1,250,000 1,272,500
Dean Witter, 8.92%, due 3/15/96 1,000,000 1,005,634
Dow Capital Corporation, 8.25%, due 2/15/96 65,000 65,146
Dupont Corporation, 8.45%, due 10/15/96 860,000 897,347
Eastman Kodak, 10.00%, due 6/15/96 125,000 126,948
Eli Lilly Corporation, 6.58%, due 12/20/96 250,000 252,275
*Espanola/Nambe Variable Rate Demand Note, 5.95%,
next redemption date 1/04/96, due 6/01/2006 2,500,000 2,500,000
*Exxon Shipping Floating Rate Note, 5.78%,
next redemption date 1/04/96, due 10/01/2111 7,000,000 7,000,000
</TABLE>
CONTINUED
The Institutional Fund 1995 Annual Report 3
<PAGE> 23
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
MONEY MARKET PORTFOLIO
Portfolio of Investments, continued
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT (Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
Ford Motor Credit Corporation, 8.00%, due 10/01/96 1,800,000 1,825,930
Ford Motor Credit Corporation, 9.07%, due 7/05/96 893,000 906,417
Ford Motor Credit Corporation, 4.85%, due 8/23/96 400,000 397,132
Ford Motor Credit Corporation, 8.25%, due 7/15/96 171,000 172,927
Ford Motor Credit Corporation, 9.10%, due 7/05/96 1,000,000 1,015,476
Ford Motor Credit Corporation, 8.25%, due 5/15/96 1,200,000 1,209,494
General Electric Capital Corporation,
4.615%, next redemption date 5/30/96 1,000,000 994,514
General Motors Acceptance Corporation, 9.00%, due 2/06/96 400,000 401,185
General Motors Acceptance Corporation, 8.00%, due 10/01/96 275,000 279,485
*General Motors Acceptance Corporation Floating Rate Note,
5.805%, next redemption date 4/13/96, due 4/13/98 10,000,000 10,000,000
*Hancor Incorporated Floating Rate Note, 5.95%,
next redemption date 1/04/95, due 12/01/2004 900,000 900,000
Hertz Corporation, 9.125%, due 8/01/96 2,850,000 2,902,407
Honeywell Corporation, 7.875%, due 5/14/96 1,445,000 1,453,511
Household Financial Corporation, 9.375%, due 2/15/96 2,000,000 2,007,835
IBM Corporation, 5.00%, due 2/26/96 250,000 249,698
IBM Credit Corporation, 5.06%, due 11/15/96 1,350,000 1,340,236
IBM Credit Corporation, 4.85%, due 11/05/96 3,000,000 2,973,731
International Bank, 8.75%, due 9/06/96 100,000 101,972
John Deere Corporation, 8.50%, due 4/10/96 200,000 201,383
Lockheed Corporation, 4.875%, due 2/15/96 85,000 84,848
Merrill Lynch & Company, Floating Rate Note, 5.925%,
due 11/18/96 10,000,000 10,000,000
Morgan Stanley Incorporated, 8.875%, due 4/01/96 400,000 402,793
Morgan Stanley Incorporated, 7.32%, due 1/15/97 500,000 507,941
Pacific Gas & Electric, 5.03%, due 3/22/96 800,000 798,800
Pepsico Incorporated, 7.875%, due 8/15/96 2,350,000 2,375,767
Philip Morris Companies, 8.875%, due 7/01/96 1,150,000 1,165,600
*Presrite Corporation Floating Rate Note, 5.95%,
next redemption date 1/04/96, due 1/01/2004 2,880,000 2,880,000
Regions Bank, Louisiana, 6.71%, due 4/11/96 5,000,000 5,011,262
Sears Roebuck & Company, 9.00%, due 9/15/96 1,000,000 1,020,902
Sears Roebuck & Company, 8.55%, due 8/01/96 2,000,000 2,028,466
Smith Barney Holding Company, 5.375%, due 6/01/96 5,380,000 5,365,423
Southwestern Bell, 7.90%, due 8/23/96 1,500,000 1,518,192
Southwestern Bell, 8.30%, due 6/01/96 100,000 101,028
Suntrust Banks, 8.375%, due 3/01/96 1,130,000 1,134,467
U.S. West Capital Funding Corporation, 8.00%, due 10/15/96 290,000 294,634
Unilever, 8.00%, due 5/28/96 450,000 453,838
Union Electric, 5.50% due 5/01/96 100,000 99,868
Virginia Electric & Power, 6.35%, due 5/30/96 3,000,000 3,005,191
Virginia Electric & Power, 8.35%, due 6/15/96 1,000,000 1,010,524
WMX Technologies, 4.875%, due 6/15/96 215,000 213,945
Waste Management Corporation, 7.875%, due 8/15/96 1,000,000 1,011,214
Waste Management Corporation, 4.875%, due 6/15/96 100,000 99,547
Weyerhaeuser Corporation, 8.41%, due 5/17/96 100,000 100,863
White Castle Corporation, Floating Rate Note, 5.95%,
next redemption date 1/04/96 7,000,000 7,000,000
World Book Finance Corporation, 8.125%, due 9/01/96 500,000 506,839
- --------------------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS
(Cost $122,818,621) 122,818,621
- --------------------------------------------------------------------------------------------
</TABLE>
CONTINUED
4 The Institutional Fund 1995 Annual Report
<PAGE> 24
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT (Notes 1 and 2)
- --------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY BILLS - 0.1%
U.S. Treasury Bill, 6.66%, due 1/11/96 66,000 67,874
- --------------------------------------------------------------------------------------------
TOTAL U.S. TREASURY BILLS
(Cost $67,874) 67,874
- --------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 4.6%
Federal Farm Credit Note, 5.91%, due 6/24/96 500,000 500,614
*Student Loan Marketing Association Floating Rate Note,
5.70%, due 11/10/98, next redemption date 1/02/96 5,000,000 5,000,000
*Student Loan Marketing Association Floating Rate Note,
5.75%, due 8/03/99, next redemption date 1/02/96 4,350,000 4,355,249
*Student Loan Marketing Association Floating Rate Note,
5.68%, due 11/24/97, next redemption date 1/02/96 2,000,000 1,999,610
- --------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $11,855,473) 11,855,473
- --------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 8.3%
(Collateralized by U.S. government obligations -
market value $21,644,319)
Everen Securities, dated 12/29/95, 5.90%,
due 1/02/96 20,556,000 20,556,000
Star Bank N.A., dated 12/29/95, 5.30%,
due 1/02/96 950,000 950,000
- --------------------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $21,506,000) 21,506,000
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100%
(Cost $256,610,754) $256,610,754
============================================================================================
</TABLE>
*Floating Rate as of 12/31/95.
See accompanying notes to financial statements
The Institutional Fund 1995 Annual Report 5
<PAGE> 25
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
THE
INSTITUTIONAL
FUND
<S> <C>
Assets :
- --------------------------------------------------------------
Investment in corresponding portfolio $113,504,219
- --------------------------------------------------------------
Unamortized organizational costs 11,126
- --------------------------------------------------------------
Prepaid expenses and other assets 423
- --------------------------------------------------------------
Total Assets 113,515,768
- --------------------------------------------------------------
Liabilities:
- --------------------------------------------------------------
Dividends payable 297,726
- --------------------------------------------------------------
Accrued transfer agent and administrative fees 6,736
- --------------------------------------------------------------
Other accrued liabilities 6,101
- --------------------------------------------------------------
Total Liabilities 310,563
- --------------------------------------------------------------
Net Assets:
- --------------------------------------------------------------
Capital 113,205,205
- --------------------------------------------------------------
Net Assets $113,205,205
- --------------------------------------------------------------
Capital Stock Outstanding 113,205,205
- --------------------------------------------------------------
Net Asset Value, Offering and
Redemption Price Per Share $ 1.00
- --------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
THE
INSTITUTIONAL
FUND
<S> <C>
Net investment income from corresponding portfolio:
- -------------------------------------------------------------------------------
Interest $ 3,467,318
- -------------------------------------------------------------------------------
Expenses (116,231)
- -------------------------------------------------------------------------------
Total Net Investment Income From
Corresponding Portfolio 3,351,087
- -------------------------------------------------------------------------------
Fund Expenses:
- -------------------------------------------------------------------------------
Legal fees 1,227
Audit fees 6,022
Printing and postage 1,315
Administrative fee 14,567
Transfer agent fees 30,268
Trustees fees and expenses 9,535
Insurance 1,479
Distribution plan 5,022
Amortization of organizational costs 3,194
24f-2 filing fee 20,532
Other expenses 845
- -------------------------------------------------------------------------------
Total expenses 94,006
Expenses waived by adviser (70,391)
- -------------------------------------------------------------------------------
Total expenses - net 23,615
- -------------------------------------------------------------------------------
INVESTMENT INCOME - NET 3,327,472
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 3,327,472
- -------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements
6 The Institutional Fund 1995 Annual Report
<PAGE> 26
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
THE INSTITUTIONAL FUND
INCREASE IN NET ASSETS:
For the year ended For the period
December 31, 1995 June 15, 1994* to
December 31, 1995
<S> <C> <C>
OPERATIONS:
Investment income - net $ 3,327,472 $ 1,159,548
Net increase in net assets resulting from operations 3,327,472 1,159,548
- ------------------------------------------------------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Investment income - net (3,327,472) (1,159,548)
Net decrease in net assets resulting from dividends and distributions (3,327,472) (1,159,548)
- ------------------------------------------------------------------------------------------------------------
CAPITAL TRANSACTIONS:
Net proceeds from sales 389,173,505 282,402,574
Reinvestment of dividends 1,987,756 339,945
Cost of redemptions (337,450,306) (223,248,269)
- ------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 53,710,955 59,494,250
- ------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 53,710,955 59,494,250
- ------------------------------------------------------------------------------------------------------------
NET ASSETS - Beginning of period 59,494,250 0
- ------------------------------------------------------------------------------------------------------------
NET ASSETS - End of period $ 113,205,205 $ 59,494,250
- ------------------------------------------------------------------------------------------------------------
SHARE TRANSACTIONS:
Issued 389,173,505 282,402,574
Reinvested 1,987,756 339,945
Redeemed (337,450,306) 223,248,269
- ------------------------------------------------------------------------------------------------------------
Change in shares 53,710,955 59,494,250
- ------------------------------------------------------------------------------------------------------------
</TABLE>
*Date of commencement of operations
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for an average share outstanding during each
period
<TABLE>
<CAPTION>
THE INSTITUTIONAL FUND
For the period
Year Ended June 15, 1994 (2) to
December 31, 1995 December 31, 1994
<S> <C> <C>
Net Asset Value, Beginning of period $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net Investment income 0.06 0.03
- --------------------------------------------------------------------------------------------------------------------
Total From Investment Operations 0.06 0.03
- --------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------
Dividends (from net investment income) (0.06) (0.03)
- --------------------------------------------------------------------------------------------------------------------
Total Distributions (0.06) (0.03)
- --------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 6.01% 4.80% (1)
- --------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------------------------------------------
Net Assets, End of period ($000) 113,205 50,494
- --------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets 0.25% 0.20% (1)
- --------------------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets 5.87% 4.01% (1)
- --------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets, before waiver of fees * 0.55% 0.46% (1)
Ratio of Net Investment Income to Average
Net Assets, before waiver of fees * 5.57% 4.25% (1)
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)Annualized
(2) Date of commencement of operations
*Includes fees waived in corresponding portfolio
See accompanying notes to financial statements
The Institutional Fund 1995 Annual Report 7
<PAGE> 27
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
- -------------------------------------------------------------------------------
THE INSTITUTIONAL FUND
NOTES TO FINANCIAL STATEMENTS, DECEMBER 31,1995
1. ORGANIZATION
The Flex-Partners Trust was organized in 1992 and is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Institutional Fund (the "Fund") commenced operations on June 15,
1994 when the Fund began investing all of its investable assets in a
corresponding open-end management investment company (the "Portfolio") having
the same investment objectives as the Fund. On December 31, 1995 The
Institutional Fund held approximately 45% of the total assets of The Money
Market Portfolio.
The financial statements of the Portfolio, including the Portfolio of
Investments, are included elsewhere in this report and should be read in
conjunction with the financial statements of the Fund.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Fund.
Valuation of Investments -- Valuation of securities by the Portfolio is
discussed at Note 1 of the Notes to Financial Statements of the Money Market
Portfolio which are included elsewhere in this report.
Income Taxes -- It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no Federal
income tax provision is required.
Organizational Costs -- The cost related to the organization of the Fund has
been deferred and is being amortized on a straight-line basis over a five-ye
period.
3. INVESTMENT ADVISORY, ACCOUNTING AND TRANSFER AGREEMENTS
R. Meeder & Associates (RMA), a wholly-owned subsidiary of Muirfield Investors,
Inc. (MII), provides the Portfolio with investment management research,
statistical and advisory services.
Mutual Funds Service Co., (MFS), a wholly-owned subsidiary of MII, serves as
stock transfer, dividend disbursing and shareholder servicing agent for the
Fund. Subject to a $4,000 annual minimum fee the Fund incurs an annual fee equal
to or the greater of $20 per shareholder account or 0.06% of the Fund's average
net assets, payable monthly.
MFS also provides the Trust with certain administrative services. The Fund
incurs an annual fee, payable monthly, of .03% of the Fund's average net assets.
The Fund has adopted a distribution expense plan pursuant to Rule 12b-l under
the Investment Company Act of 1940 (the "Plans"). Pursuant to the Plans, the
Fund may annually incur certain expenses associated with the distribution of
fund shares in amounts not to exceed 3/100 of 1% of the Fund's average net
assets.
Certain officers and/or trustees of the Fund and the Portfolio are officers
and/or directors of MII, RMA and MFS.
4. CAPITAL SHARE TRANSACTIONS
At December 31, 1995, an indefinite number of shares of $0.10 par value stock
were authorized in the Fund and capital amounted to $113,205,205 in The
Institutional Fund. Transactions in capital stock are included elsewhere in this
report.
8 The Institutional Fund 1995 Annual Report
<PAGE> 28
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
The Flex-Partners' Trust
The Institutional Fund:
We have audited the accompanying statement of assets and liabilities of The
Flex-Partners' Trust, The Institutional Fund (Fund) as of December 31, 1995, and
the related statement of operations, statements of changes in net assets and the
financial highlights for the periods indicated herein. These financial
statements and the financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
December 31, 1995, by correspondence with the custodian and other appropriate
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Flex-Partners' Trust, The Institutional Fund at December 31, 1995, the results
of its operations, the changes in its net assets and the financial highlights
for the periods indicated herein, in conformity with generally accepted
accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Columbus, Ohio
February 2,1996
The Institutional Fund 1995 Annual Report 9
<PAGE> 29
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<CAPTION>
MONEY
MARKET
PORTFOLIO
- --------------------------------------------------
<S> <C>
ASSETS:
Investments at market value* $235,104,754
- --------------------------------------------------
Repurchase Agreements* 21,506,000
- --------------------------------------------------
Cash 206
- --------------------------------------------------
Interest receivable 2,245,756
- --------------------------------------------------
Prepaid/Other assets 1,251
- --------------------------------------------------
Unamortized organization costs 7,538
- --------------------------------------------------
Total Assets 258,865,505
==================================================
LIABILITIES:
Payable for securities purchased 2,680,949
- --------------------------------------------------
Payable to corresponding Fund 1,477,153
- --------------------------------------------------
Payable to investment adviser 33,706
- --------------------------------------------------
Accrued fund accounting fees 4,818
- --------------------------------------------------
Other accrued liabilities 20,505
- --------------------------------------------------
Total Liabilities 4,217,131
==================================================
NET ASSETS:
Capital 254,648,374
- --------------------------------------------------
Net Assets $254,648,374
==================================================
*Securities at cost 256,610,754
==================================================
See accompanying notes to financial statements.
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
MONEY
MARKET
PORTFOLIO
- --------------------------------------------------
<S> <C>
INVESTMENT INCOME - NET:
Interest $12,128,882
- --------------------------------------------------
Total Income 12,128,882
==================================================
Expenses:
==================================================
Investment advisory fees 648,665
Legal fees 1,555
Audit fees 15,695
Custodian fees 17,104
Accounting fees 58,111
Trustees fees and expenses 5,385
Insurance 5,920
Amortization of organization cost 4,978
Other expenses 432
- --------------------------------------------------
Total Expenses 757,845
Investment advisory fees waived (349,425)
Total Expenses - net 408,420
- --------------------------------------------------
INVESTMENT INCOME - NET 11,720,462
- --------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $11,720,462
==================================================
See accompanying notes to financial statements.
</TABLE>
10 The Institutional Fund 1995 Annual Report
<PAGE> 30
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
For the years ended December 31, 1994 and
December 31, 1995
- --------------------------------------------------------
<TABLE>
<CAPTION>
Money Market
Portfolio
Year ended December 31,
1995 1994
<S> <C> <C>
INCREASE (DECREASE)
IN NET ASSETS:
OPERATIONS:
Investment income- net $11,720,462 $8,115,651
Net realized gain (loss)
on investments -- --
Net change in unrealized
appreciation (depreciation)
of investments -- --
- --------------------------------------------------------
Net increase (decrease)
in net assets
resulting from operations 11,720,462 8,115,651
========================================================
TRANSACTIONS
OF INVESTORS'
BENEFICIAL INTERESTS:
Contributions 753,617,719 733,486,217
Withdrawals (735,213,083) (717,226,708)
========================================================
Net increase (decrease)
in net assets resulting from
transactions of investors'
beneficial interests 18,404,636 16,259,509
- --------------------------------------------------------
TOTAL INCREASE
(DECREASE)
IN NET ASSETS 30,125,098 24,375,160
========================================================
NET ASSETS -
Beginning of period 224,523,276 200,148,116
========================================================
NET ASSETS -
End of period $254,648,374 $224,523,276
========================================================
See accompanying notes to financial statements
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
================================================================================
Money Market Portfolio
For the Period
Year Ended Dec. 31, May 1, 1992
Ratios/Supplemental Data 1995 1994 1993 to Dec. 31, 1992
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets, End of Period ($000) 254,648 224,523 200,148 244,272
- -----------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets* 0.21% 0.19% 0.19% 0.18%(1)
- -----------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets 5.87% 4.28% 3.09% 3.60%(1)
- -----------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets, before waiver of fees 0.38% 0.39% 0.40% 0.40%(1)
- -----------------------------------------------------------------------------------------------------------
Ratio of Net Investment Income to Average Net Assets,
before waiver of fees 5.70% 4.08% 2.88% 3.38%(1)
- -----------------------------------------------------------------------------------------------------------
Portfolio Turnover Rate N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1)Annualized
*Please refer to page 6 for total expense ratios relating to the corresponding
Fund.
See accompanying notes to financial statements
The Institutional Fund 1995 Annual Report 11
<PAGE> 31
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO. DECEMBER 31, 1995
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Money Market Portfolio (the "Portfolio") is registered under the Investment
Company Act of 1940, as amended, as a no-load, open-end management investment
company which was organized as a trust under the laws of the State of New York.
The Declaration of Trust permits the Trustees to issue beneficial interests in
the Portfolio.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Portfolio.
INVESTMENTS -- Money market securities held in the Money Market Portfolio are
valued at amortized cost, which approximates market value in accordance with
Rule 2a-7 of the Investment Company Act of 1940. Amortized costs also represents
cost for federal income tax purposes.
REPURCHASE Agreements --It is the Portfolio's policy to take possession of the
collateral for repurchase agreements before payment is made to the seller.
Market value of the collateral must be at least 100% of the amount of the
repurchase agreement.
INCOME Taxes --It is the Portfolio's policy to comply with the requirements of
the Internal Revenue Code applicable to partnerships. Therefore, no Federal
income tax provision is required.
ORGANIZATIONAL COSTS -- The costs related to the organization the Portfolio has
been deferred and is being amortized on a straight-line basis over a five-year
period.
OTHER -- The Portfolio follows industry practice and records security
transactions on the trade date. Gains and losses on security transactions are
determined on the first-in, first-out ("FIFO") basis. Interest income is
recognized as earned.
2. INVESTMENT ADVISORY, ACCOUNTING AND TRANSFER AGREEMENTS R. Meeder &
Associates (RMA), a wholly-owned subsidiary of Muirfield Investors, Inc. (MII),
provides the Portfolio with investment management, research, statistical and
advisory services, and pays certain other expenses of the Portfolio. For such
services the Portfolio pays monthly a fee based upon the average daily value of
the Portfolio's net assets at the following annual rate: 0.40% of average net
assets up to $100 million and 0.25% of average net exceeding $100 million.
During the year ended December 31, 1995, RMA voluntarily waived investment
advisory fees in the Portfolio.
Mutual Funds Service Co. (MFS), a wholly-owned subsidiary of MII, serves as
accounting services agent for the Portfolio. The minimum annual fee for all such
services is $30,000. Subject to the applicable minimum fee, The Portfolio's
annual fee, payable monthly, is computed at the rate of 0.15% of the first $10
million, 0.10% of the next $20 million, 0.02% of the next $50 million and 0.01%
in excess of $80 million of the Portfolio's average net assets.
Certain officers and/or trustees of each Portfolio are officers and/or directors
of MII, RMA and MFS.
12 The Institutional Fund 1995 Annual Report
<PAGE> 32
THE INSTITUTIONAL FUND 1995 ANNUAL REPORT
- -------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Trustees
Money Market Portfolio:
We have audited the accompanying statement of assets and liabilities of
the Money Market Portfolio (Portfolio), including the schedule of portfolio
investments, as of December 31, 1995, and the related statement of operations,
statements of changes in net assets and the financial highlights for each of the
periods indicated herein. These financial statements and the financial
highlights are the responsibility of the Portfolio's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included verification of securities owned as of
December 31, 1995, by correspondence with the custodian and other appropriate
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Money Market Portfolio at December 31, 1995, the results of its operations, the
changes in its net assets and the financial highlights for each of the periods
indicated herein, in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Columbus, Ohio
February 2, 1996
The Institutional Fund 1995 Annual Report 13
<PAGE> 33
MANAGER AND INVESTMENT ADVISER
R. Meeder & Associates
6000 Memorial Drive
P.O. Box 7177
Dublin, Ohio 43017
BOARD OF TRUSTEES
Milton S. Bartholomew
Dr. Roger D. Blackwell
John M. Emery
Richard A. Farr
William L. Gurner
Robert S. Meeder, Sr.
Russel G. Means
Lowell G. Miller
Walter L. Ogle
Neil P. Ramsey
Philip A. Voelker
CUSTODIAN
Star Bank, N.A., Cincinnati
Cincinnati, Ohio 45201
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Mutual Funds Service Co.
6000 Memorial Drive
Dublin, Ohio 43017
AUDITORS
KPMG Peat Marwick LLP
Columbus, Ohio 43215
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[Back Cover - Picture of Pad, Pencil, Calculator and Chart]
