HOMESTATE GROUP, 485BPOS, 1997-08-18

HOMESTATE GROUP
485BPOS, 1997-08-18

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Filed with the Securities and Exchange Commission on August 18, 1997

File No. 33-48940

File No. 811-6722

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Pre-Effective Amendment No. _______ __

Post-Effective Amendment No. 7 x

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 7 x

(Check appropriate box or boxes.)

THE HOMESTATE GROUP

(Exact Name of Registrant as Specified in Charter)

1857 WILLIAM PENN WAY, SUITE 203, LANCASTER, PA 17605

(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (717) 396-7864

Scott L. Rehr

1857 WILLIAM PENN WAY, SUITE 203, LANCASTER, PA

(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: UPON EFFECTIVE DATE OF THIS

REGISTRATION STATEMENT

It is proposed that this filing will become effective (check appropriate box)

__ immediately upon filing pursuant to paragraph (b)

x on September 5, 1997 pursuant to paragraph (b)

__ 60 days after filing pursuant to paragraph (a)(1)

__ on _____ pursuant to paragraph (a)(1)

__ 75 days after filing pursuant to paragraph (a)(2)

__ on _____ pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

__ This post-effective amendment designates a new effective date for a

previously filed post-effective amendment.

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933:

An indefinite number of securities is being registered under the Securities

Act of 1933 pursuant to Rule 24f-2 thereunder.

<PAGE>

CROSS-REFERENCE SHEET

Pursuant to Rule 481(a)

The HomeState Group

Items Required By Form N-1A

PART A - PROSPECTUS

FORM N-1A

ITEM NUMBER LOCATION IN PROSPECTUS

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

1. Cover Page Cover Page*

2. Synopsis Fund Expenses*;

Prospectus Summary*; Risk

Factors*

3. Condensed Financial Information Financial Highlights**;

Performance Calculations*

4. General Description of Registrant Prospectus Summary*; Risk

Factors*; Investment

Objective*; Investment

Policies*; Other Investment

Policies*; Investment

Limitations*

5. Management of the Fund Prospectus Summary*;

Investment Adviser*;

Administrative Services*;

Portfolio Transactions*

5A. Management's Discussion of To be provided in

Fund Performance Registrant's Annual Report

to Shareholders

6. Capital Stock and other Securities Purchase of Shares*;

Dividends, Capital Gains

Distributions and Taxes*;

General Information*

7. Purchase of Securities Being Purchase of Shares*;

Offered Distributor*; Shareholder

Services*; Valuation of

Shares*

8. Redemption or Repurchase Redemption of Shares*;

Shareholder Services*

9. Legal Proceedings Not Applicable

* PREVIOUSLY FILED WITH THE REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 6 TO

REGISTRATION STATEMENT (FILED ON FEBRUARY 7, 1997) AND INCORPORATED HEREIN BY

REFERENCE.

** FINANCIAL HIGHLIGHTS WITH RESPECT TO THE HOMESTATE SELECT OPPORTUNITIES

FUND AND THE HOMESTATE PENNSYLVANIA GROWTH FUND ARE CONTAINED HEREIN.

<PAGE>

-i-

CROSS-REFERENCE SHEET

Pursuant to Rule 481(a)

The HomeState Group

Items Required By Form N-1A

PART B - STATEMENT OF ADDITIONAL INFORMATION

FORM N-1A LOCATION IN STATEMENT

ITEM NUMBER OF ADDITIONAL INFORMATION

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

10. Cover Page Cover Page*

11. Table of Contents Cover Page*; Table of

Contents*

12. General Information and History General Information*

13. Investment Objectives and Policies Investment Objectives and

Policies*; Investment

Limitations*

14. Management of the Registrant Management of the Fund*;

Investment Adviser*

15. Control Persons and Principal Management of the Fund*

Holders of Securities

16. Investment Advisory and Other Investment Adviser*

Services

17. Brokerage Allocation Portfolio Transactions*

18. Capital Stock and Other Securities General Information*

19. Purchase, Redemption and Pricing of Purchase of Shares*;

Securities Being Offered Redemption of

Shares*; Shareholder

Services*

20. Tax Status General Information*

21. Underwriters Management of the Fund*

22. Calculation of Performance Data Performance Calculations*

23. Financial Statements Financial Statements

*PREVIOUSLY FILED WITH THE REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 6 TO

REGISTRATION STATEMENT (FILED ON FEBRUARY 7, 1997) AND INCORPORATED HEREIN BY

REFERENCE.

<PAGE>

THE HOMESTATE GROUP
HOMESTATE PENNSYLVANIA GROWTH FUND
FINANCIAL HIGHLIGHTS

The following table presents per share financial information
for the HomeState Pennsylvania Growth Fund since its commencement
of operations on October 1, 1992. This information has been
audited and reported on by The HomeState Group's independent
accountants. The Report of Independent Accountants and financial
statements included in The HomeState Group's Annual Report to
shareholders for the period ended June 30, 1997 are incorporated
by reference into this Prospectus. The HomeState Group's
Annual Report contains additional performance information that
will be made available without charge upon request directed to
Emerald Advisers, Inc. at (800)-232-0224.
<TABLE>
<CAPTION>

PERIODS ENDED
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
6/30/97 6/30/96 6/30/95 6/30/94 6/30/93+
------- ------- ------- ------- --------
Net asset value at
beginning of period..... $21.25 $15.68 $12.37 $10.98 $10.00
------ ------ ------ ------ ------
Income from Investment
- ----------------------
Operations
- ----------
Net investment income
(loss) ................. (0.07) (0.07) (0.01) (0.03) 0.03
Net realized and
unrealized gain on
investments............. 1.78 6.17 3.54 1.53 0.95
------ ------ ------ ------ ------
Total from investment
operations............ 1.71 6.10 3.53 1.50 0.98
------ ------ ------ ------ ------
Less Distributions
- -------------------
Dividends from net
investment income ...... 0.00 0.00 0.00 (0.03) 0.00
Distributions from net
realized gains ......... (1.41) (0.53) (0.22) (0.08) 0.00
------ ------ ------ ------ ------
Total distributions.... (1.41) (0.53) (0.22) (0.11) 0.00
------ ------ ------ ------ ------
Net asset value at end
of period .............. $21.55 $21.25 $15.68 $12.37 $10.98
====== ====== ====== ====== ======

Total return**........... 9.56% 39.94% 28.96% 13.75% 13.07%

RATIOS / SUPPLEMENTAL DATA
Net assets, end of period
(000s omitted)........... $89,577 $55,828 $20,388 $9,892 $3,026
Ratio of expenses to
average net assets
before reimbursement
by Adviser............... 1.77% 1.85% 2.00% 2.67% 7.85%*
Ratio of expenses to
average net assets after
reimbursement by Adviser. na1 na1 1.91% 2.23% 1.87%*
Ratio of net investment
loss to average net
assets before
reimbursement by Adviser. (0.39)% (0.58)% (0.20)% (0.76)% (5.24)%*
Ratio of net investment
income (loss) to
average net assets
after reimbursement by
Adviser.................. na1 na1 (0.10)% (0.32)% 0.74%*
Average commission
rate paid................. $0.0941 $0.0961 - - -
Portfolio turnover rate... 50% 66% 51% 51% 63%
<FOOTNOTE>
+ From commencement of operations: October 1, 1992.
* Annualized.
** Total return does not reflect 4.75% maximum sales charge.
1 Not applicable: no reimbursements were made by the Adviser.
</FOOTNOTE>
</TABLE>
Supplement dated September 5, 1997 to Prospectus dated February 18, 1997.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>

THE HOMESTATE GROUP
HOMESTATE SELECT OPPORTUNITIES FUND
FINANCIAL HIGHLIGHTS

The following table presents per share financial information
for the HomeState Select Opportunities Fund since its
commencement of operations on February 18, 1997. This information
has been audited and reported on by The HomeState Group's
independent accountants. The Report of Independent Accountants
and financial statements included in The HomeState Group's Annual
Report to shareholders for the period ended June 30, 1997 are
incorporated by reference into this Prospectus. The HomeState
Group's Annual Report contains additional performance information
that will be made available without charge upon request directed
to Emerald Advisers, Inc. at (800)-232-0224.

PERIOD ENDED
6/30/97+

Net asset value at
beginning of period........ $10.00
------
Income from Investment
- ----------------------
Operations
- ----------
Net investment loss....... (0.03)
Net realized and
unrealized gain on
investments................ 1.73
------
Total from investment
operations............... 1.70
------

Net asset value at end
of period ................. $11.70
======

Total return**.............. 17.00%

RATIOS / SUPPLEMENTAL DATA
Net assets, end of period
(000s omitted)............. $5,628
Ratio of expenses to
average net assets
before reimbursement
by Adviser and waivers..... 8.10%*
Ratio of expenses to
average net assets after
reimbursement by Adviser
and waivers................ 2.35%*
Ratio of net investment
loss to average net
assets before
reimbursement by Adviser
and waivers................. (6.85)%*
Ratio of net investment
loss to average net assets
after reimbursement by
Adviser and waivers......... (1.10)%*
Average commission
rate paid................... $0.0983
Portfolio turnover rate...... 59%

+ From commencement of operations: February 18, 1997.
* Annualized.
** Total return does not reflect 4.75% maximum sales charge.
Supplement dated September 5, 1997 to Prospectus dated February 18, 1997.

<PAGE>

Investments for the HomeState Select Opportunities Fund, June 30, 1997

Statement of Assets and Liabilities, June 30, 1997

Statement of Operations, for the fiscal year ended June 30, 1997

Statement of Changes in Net Assets, for the fiscal years ended

June 30, 1996 and June 30, 1997

Financial Highlights for the period October 1, 1992 (Commencement of

Operations) to June 30, 1993 and for each of the four years in the period

ended June 30, 1997 for the HomeState Pennsylvania Growth Fund and from

inception (February 18, 1997) to the period ended June 30, 1997 for the

HomeState Select Opportunities Fund.

Notes to Financial Statements

<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE PENNSYLVANIA GROWTH FUND
SCHEDULE OF INVESTMENTS JUNE 30, 1997
- -------------------------------------------------------------------------------
MARKET
SHARES VALUE+
------ ------
COMMON STOCK - 99.1%
COMMUNICATIONS & BROADCASTING - 1.6%
Comcast Corp. (A Shares)*............... 65,150 $ 1,392,581
-----------

FINANCE & INSURANCE - 22.9%
INSURANCE CARRIERS - 6.6%
Conseco, Inc.++.......................... 27,300 1,010,100
Donegal Group, Inc...................... 64,900 1,581,937
Penn Treaty American Corp.*............. 60,750 1,860,469
Penn-America Group, Inc................. 98,250 1,479,891
-----------
5,932,397
-----------
NATIONAL COMMERCIAL BANKS - 1.7%
First Capitol Bank/York, PA............. 4,800 160,200
Mellon Bank Corp........................ 29,900 1,349,238
-----------
1,509,438
-----------
SAVINGS, CREDIT & OTHER FINANCIAL INSTITUTIONS - 4.2%
Parkvale Financial Corp................. 35,547 981,986
Patriot Bank Corp....................... 40,800 708,900
Prime Bancorp, Inc...................... 27,155 685,664
Sovereign Bancorp, Inc.................. 49,844 760,121
York Financial Corp..................... 31,615 628,348
-----------
3,765,019
-----------
STATE & NATIONAL BANKS - 10.4%
1st United Bancorp++.................... 10,000 175,000
BT Financial Corp....................... 33,641 1,471,794
Commerce Bancorp, Inc.++................ 37,091 1,437,276
First Colonial Group, Inc............... 27,805 670,796
Keystone Financial, Inc................. 17,900 559,375
Kish Bancorp............................ 600 43,800
Omega Financial Corp.................... 36,680 1,274,630
Onbancorp, Inc.......................... 7,500 382,500
PNC Bank Corp........................... 10,000 416,250
Signet Banking Corp.++.................. 23,500 846,000
Sun Bancorp, Inc........................ 12,695 453,828
Susquehanna Bancshares, Inc............. 39,600 1,554,300
-----------
9,285,549
-----------

TOTAL FINANCE & INSURANCE......................... 20,492,403
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE PENNSYLVANIA GROWTH FUND
SCHEDULE OF INVESTMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------
MARKET
SHARES VALUE+
------ ------
MANUFACTURING - 42.3%
CHEMICALS & ALLIED PRODUCTS - 3.2%
Macdermid, Inc.++........................ 32,500 $ 1,490,937
OM Group, Inc.++......................... 41,500 1,374,687
-----------
2,865,624
-----------
COMPUTER & OFFICE EQUIPMENT - 4.8%
Iomega Corp.++*......................... 31,000 616,125
Safeguard Scientifics, Inc.*............ 52,300 1,663,794
SI Handling Systems, Inc................ 108,950 2,015,575
-----------
4,295,494
-----------
ELECTRICAL MEASUREMENT & TEST INSTRUMENTS - 2.2%
Cohu, Inc.++*........................... 11,500 359,375
GenRad, Inc.++*......................... 71,500 1,617,687
-----------
1,977,062
-----------
ELECTRONIC TECHNOLOGY - 0.9%
Integrated Circuit Systems, Inc.*....... 35,900 814,480
-----------

FOOD & BEVERAGE - 1.7%
Hershey Foods Corp...................... 25,000 1,382,813
Puro Water Group, Inc.++*................ 10,000 58,437
Quigley Corp.*.......................... 7,000 60,813
-----------
1,502,063
-----------
IRON & STEEL - 0.8%
Carpenter Technology Corp............... 15,600 713,700
-----------

MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES - 13.5%
Allen Organ Co. (B Shares).............. 9,300 370,838
C & D Technology, Inc................... 35,500 1,331,250
Cable Design Technologies*.............. 52,500 1,545,469
Checkpoint Systems, Inc.++*............. 30,000 481,875
Emcee Broadcast Products, Inc.*......... 96,900 199,856
Harsco Corp............................. 38,600 1,563,300
JPM Co.*................................ 26,600 947,625
Park Electrochemical Corp.++............ 12,000 315,750
Technitrol, Inc......................... 92,400 2,529,450
Teleflex, Inc........................... 37,400 1,168,750
Vishay Intertechnology, Inc.*........... 49,350 1,428,066
Zitel Corp.++*.......................... 10,000 196,250
-----------
12,078,479
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE PENNSYLVANIA GROWTH FUND
SCHEDULE OF INVESTMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------
MARKET
SHARES VALUE+
------ ------

MISCELLANEOUS INDUSTRIAL MACHINERY & EQUIPMENT - 2.8%
CFM Technologies, Inc.*................. 10,000 $ 327,500
JLG Industries, Inc..................... 27,000 367,875
Met-Pro Corp............................ 102,150 1,545,019
Thermo Electron Corp.++*................. 7,000 240,625
-----------
2,481,019
-----------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 0.6%
American United Global, Inc.++*.......... 33,000 189,750
Penn Engineering & Manufacturing Corp.*. 19,600 384,650
-----------
574,400
-----------

OPTICAL & OPHTHALMIC GOODS, PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 1.0%
II-VI, Inc.*............................ 42,000 882,000
-----------

PETROLEUM REFINING - 3.8%
Buckeye Partners, L.P................... 12,000 542,250
Coastal Corp.++......................... 15,700 835,044
Mapco, Inc.++........................... 12,500 393,750
Tesoro Petroleum Corp.++*............... 55,500 822,094
USX - Marathon Group.................... 28,000 808,500
-----------
3,401,638
-----------
PHARMACEUTICAL PREPARATIONS - 2.5%
IBAH, Inc.*............................. 82,000 292,125
Ligand Pharmaceuticals (B Shares)++*..... 23,000 296,125
Magainin Pharmaceuticals, Inc.*......... 100,000 725,000
Nabi, Inc.++*........................... 33,500 221,938
Neose Technologies, Inc.*............... 40,000 510,000
Viropharma, Inc.*....................... 13,500 241,312
-----------
2,286,500
-----------
PRECISION INSTRUMENTS & MEDICAL SUPPLIES - 2.0%
Arrow International, Inc................ 24,000 702,000
Covalent Group, Inc.*................... 12,500 75,781
Environmental Tectonics Corp.*.......... 17,500 155,313
Medical Technology & Innovations*....... 145,000 27,550
Respironics, Inc.*...................... 40,000 845,000
-----------
1,805,644
-----------
TELECOMMUNICATIONS EQUIPMENT - 0.9%
Associated Group, Inc. (A Shares)*...... 5,800 232,000
Tollgrade Communications, Inc.*......... 24,850 568,444
-----------
800,444
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE PENNSYLVANIA GROWTH FUND
SCHEDULE OF INVESTMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------
MARKET
SHARES VALUE+
------ ------

TEXTILES & APPAREL - 1.6%
Jones Apparel Group, Inc.*.............. 30,000 $ 1,432,500
-----------

TOTAL MANUFACTURING............................... 37,911,047
-----------

MINING - 0.0%
Daleco Resources Corp. O*............... 50,000 10,156
-----------

REAL ESTATE INVESTMENT TRUSTS - 4.8%
Brandywine Realty Trust................. 53,000 1,073,250
Crescent Real Estate Equities Co.
(When Issued)++......................... 17,500 555,625
Crown American Realty Trust............. 46,200 427,350
First Industrial Realty Trust, Inc.++... 32,000 936,000
Liberty Property Trust.................. 52,600 1,308,425
-----------
4,300,650
-----------
SERVICES - 16.1%
BUSINESS SERVICES - 2.5%
CRW Financial, Inc.*.................... 50,475 239,756
Diamond Technology Partners, Inc.++*.... 25,130 260,724
National Media Corp.*................... 17,000 110,500
Physician Support Systems, Inc.*........ 63,000 771,750
SOS Staffing Services, Inc.++*.......... 24,500 379,750
UTI Energy Corp.*....................... 11,000 501,875
-----------
2,264,355
-----------
COMPUTER SERVICES - 7.7%
Ansoft Corp.*........................... 74,000 545,750
Computer Associates International, Inc.. 10,000 556,875
Computer Horizons Corp. ++*............. 10,500 359,625
Daou Systems, Inc.++*................... 12,200 195,200
Keane, Inc.++ .......................... 9,500 494,000
Mastech Corp.*.......................... 67,000 1,348,375
Metacreations Corp.++*.................. 20,000 220,000
Microleague Multimedia, Inc.*........... 25,000 120,312
Prophet 21, Inc.*....................... 7,000 37,625
Sanchez Computer Associates, Inc.*...... 12,000 112,500
Scan-Graphics, Inc.*.................... 17,500 59,063
Seec, Inc.*............................. 12,000 231,000
SunGard Data Systems, Inc.* ............ 31,200 1,450,800
Systems & Computer Technology Corp.*.... 44,000 1,177,000
-----------
6,908,125
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE PENNSYLVANIA GROWTH FUND
SCHEDULE OF INVESTMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------
MARKET
SHARES VALUE+
------ ------
ENGINEERING SERVICES - 0.6%
Astrotech International Corp.*.......... 78,766 $ 502,133
-----------

HOME HEALTHCARE SERVICES - 0.4%
Home Health Corp.*...................... 35,700 339,150
-----------

MEDICAL & HEALTH SERVICES - 3.9%
Corecare Systems, Inc.*................. 92,000 80,500
Genesis Health Ventures, Inc.*.......... 31,700 1,069,875
Genome Therapeutics Corp.++*............ 33,000 284,625
Renal Treatment Centers, Inc.*.......... 29,400 790,125
SMT Health Services, Inc.*.............. 109,851 1,270,152
-----------
3,495,277
-----------
PERSONAL SERVICES - 1.0%
Crescent Operating, Inc.++.............. 1,750 21,000
Reliance Group Holdings, Inc.++......... 30,000 356,250
Sonus Pharmaceuticals, Inc.++*.......... 20,000 562,500
-----------
939,750
-----------

TOTAL SERVICES.................................... 14,448,790
-----------

UTILITIES - 1.9%
Consolidated Natural Gas Co............. 17,000 914,813
Philadelphia Suburban Corp.............. 42,500 812,813
-----------
1,727,626
-----------
WHOLESALE & RETAIL TRADE - 9.5%
MISCELLANEOUS RETAIL STORES - 3.4%
Borders Group, Inc.++*.................. 63,000 1,519,875
Rite Aid Corp........................... 31,500 1,571,062
-----------
3,090,937
-----------
RETAIL APPAREL & ACCESSORY STORES - 2.0%
Bon-Ton Stores, Inc.*................... 8,000 64,000
Piercing Pagoda, Inc.*.................. 68,400 1,718,550
-----------
1,782,550
-----------
RETAIL EATING & DRINKING PLACES - 0.6%
Schlotzsky's, Inc.++*................... 38,500 529,375
-----------

WHOLESALE - PETROLEUM & PRODUCTS - 0.2%
Harken Energy Corp.*.................... 30,000 210,000
-----------

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE PENNSYLVANIA GROWTH FUND
SCHEDULE OF INVESTMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------

MARKET
SHARES VALUE+
------ ------
WHOLESALE CHEMICALS & DRUGS - 1.5%
Amerisource Health Corp. (A Shares)*.... 26,500 $ 1,321,687
-----------

WHOLESALE ELECTRONIC EQUIPMENT & COMPUTERS - 1.2%
CHS Electronics, Inc.+.................. 40,000 1,060,000
-----------

WHOLESALE MISCELLANEOUS - 0.6%
Ikon Office Solutions, Inc.............. 21,300 531,169
-----------

TOTAL WHOLESALE & RETAIL TRADE.................... 8,525,718
-----------
Total Common Stock (Cost $68,003,903)............. 88,808,971
-----------

MONEY MARKET MUTUAL FUNDS - 1.2%
CoreFund Elite Treasury Reserve Portfolio 100,000 100,000
CoreFund Treasury Reserve Portfolio..... 930,872 930,872
-----------

Total Money Market Mutual Funds (COST $1,030,872).. 1,030,872
-----------

TOTAL INVESTMENTS (COST $69,034,775) - 100.3%........... 89,839,843
-----------

OTHER ASSETS AND LIABILITIES, NET - (0.3)%.............. (262,870)
-----------

NET ASSETS - 100.0%..................................... $ 89,576,973
===========

+ See Note 2 to Financial Statements.
* Non-income producing security.
++Non-Pennsylvania Company as defined in the Fund's current prospectus (the
aggregare value of such securities amounted to $20,723,530 as of June 30,
1997)
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE SELECT OPPORTUNITIES FUND
SCHEDULE OF INVESTMENTS JUNE 30, 1997
- -------------------------------------------------------------------------------

MARKET
SHARES VALUE+
------ ------
COMMON STOCK - 92.0%
FINANCE & INSURANCE - 5.9%
INSURANCE CARRIERS - 4.7%
Penn Treaty American Corp.*............. 6,000 $ 183,750
Penn-America Group, Inc................. 5,250 79,078
-----------
262,828
-----------
STATE & NATIONAL BANKS - 1.2%
Omega Financial Corp.................... 2,048 71,168
-----------

TOTAL FINANCE & INSURANCE......................... 333,996
-----------

MANUFACTURING - 48.2%
COMPUTER & OFFICE EQUIPMENT - 10.0%
Information Analysis, Inc.*............. 4,000 105,500
Iomega Corp.*........................... 6,000 119,250
Safeguard Scientifics, Inc.*............ 5,000 159,062
SI Handling Systems, Inc................ 9,600 177,600
-----------
561,412
-----------
ELECTRICAL MEASUREMENT & TEST INSTRUMENTS - 4.9%
Cohu, Inc............................... 3,000 93,750
GenRad, Inc.*........................... 8,000 181,000
-----------
274,750
-----------
ELECTRONIC TECHNOLOGY - 0.9%
Integrated Circuit Systems, Inc.*....... 2,200 49,912
-----------

FOOD & BEVERAGE - 1.8%
Quigley Corp.*.......................... 12,000 104,250
-----------

MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES - 14.6%
Cable Design Technologies*.............. 5,000 147,187
Checkpoint Systems, Inc.*............... 8,000 128,500
ORBIT/FR, Inc.*......................... 10,000 97,500
Park Electrochemical Corp. ............. 4,500 118,406
Technitrol, Inc......................... 7,000 191,625
Vishay Intertechnology, Inc.*........... 4,725 136,730
-----------
819,948
-----------
MISCELLANEOUS INDUSTRIAL MACHINERY & EQUIPMENT - 3.7%
CFM Technologies, Inc.*................. 3,000 98,250
Met-Pro Corp............................ 7,300 110,413
-----------
208,663
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE SELECT OPPORTUNITIES FUND
SCHEDULE OF INVESTMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------

MARKET
SHARES VALUE+
------ ------

MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.0%
American United Global, Inc.*........... 10,000 $ 57,500
-----------

OPTICAL & OPHTHALMIC GOODS, PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 1.8%
II-VI, Inc.*............................ 4,700 98,700
-----------

PETROLEUM REFINING - 1.8%
Tesoro Petroleum Corp.*................. 7,000 103,688
-----------

PHARMACEUTICAL PREPARATIONS - 1.1%
Halsey Drug Company, Inc.*.............. 14,000 64,750
-----------

PRECISION INSTRUMENTS & MEDICAL SUPPLIES - 4.9%
Covalent Group, Inc.*................... 5,000 30,312
Environmental Tectonics Corp.*.......... 10,500 93,188
Intest Corp............................. 10,000 90,000
Osteotech, Inc.*........................ 1,500 15,750
Zonagen, Inc.*.......................... 2,000 43,750
-----------
273,000
-----------
TELECOMMUNICATIONS EQUIPMENT - 0.9%
Associated Group, Inc. (A Shares)*...... 1,200 48,000
-----------

TEXTILES & APPAREL - 0.8%
Jones Apparel Group, Inc.*.............. 1,000 47,750
-----------

TOTAL MANUFACTURING............................... 2,712,323
-----------

REAL ESTATE INVESTMENT TRUSTS - 3.7%
Crescent Real Estate Equities Co.
(When Issued).......................... 4,500 142,875
Crown American Realty Trust............. 7,000 64,750
-----------

TOTAL REAL ESTATE INVESTMENT TRUSTS............... 207,625
-----------

SERVICES - 22.7%
BUSINESS SERVICES - 7.8%
Diamond Technology Partners, Inc.*...... 7,000 72,625
Physician Support Systems, Inc.*........ 5,000 61,250
SOS Staffing Services, Inc.*............ 8,000 124,000
UTI Energy Corp.*....................... 4,000 182,500
-----------
440,375
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE SELECT OPPORTUNITIES FUND
SCHEDULE OF INVESTMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------

MARKET
SHARES VALUE+
------ ------

COMPUTER SERVICES - 12.3%
Computer Horizons Corp.*................ 2,250 $ 77,063
Daou Systems, Inc.*..................... 4,100 65,600
Keane, Inc.* ........................... 3,000 156,000
Mastech Corp.*.......................... 6,750 135,844
Sanchez Computer Associates, Inc.*...... 10,200 95,624
Systems & Computer Technology Corp.*.... 6,200 165,850
-----------
695,981
-----------
MEDICAL & HEALTH SERVICES - 2.5%
SMT Health Services, Inc.*.............. 12,000 138,750
-----------

PERSONAL SERVICES - 0.1%
Crescent Operating, Inc................. 250 3,000
-----------

TOTAL SERVICES.................................... 1,278,106
-----------

WHOLESALE & RETAIL TRADE - 11.5%
MISCELLANEOUS RETAIL STORES - 3.1%
Borders Group, Inc.*.................... 5,500 132,688
Compucom Systems, Inc.*................. 6,000 42,750
-----------
175,438
-----------
RETAIL APPAREL & ACCESSORY STORES - 4.8%
Bon-Ton Stores, Inc.*................... 15,000 120,000
Piercing Pagoda, Inc.*.................. 6,000 150,750
-----------
270,750
-----------
WHOLESALE - PETROLEUM & PRODUCTS - 2.2%
Harken Energy Corp.*.................... 17,500 122,500
-----------

WHOLESALE ELECTRONIC EQUIPMENT & COMPUTERS - 1.4%
CHS Electronics, Inc.................... 3,000 79,500
-----------

TOTAL WHOLESALE & RETAIL TRADE.................... 648,188
-----------
Total Common Stock (Cost $4,575,718).............. 5,180,238
-----------

PAR
---
COMMERCIAL PAPER - 3.6%
CoreStates, 4.25%, 07/01/97 - 07/07/97
(COST $200,000)..................... $200,000 200,000
-----------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE SELECT OPPORTUNITIES FUND
SCHEDULE OF INVESTMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------

MARKET
SHARES VALUE+
------ ------

MONEY MARKET MUTUAL FUNDS - 9.7%
CoreFund Elite Treasury Reserve
Portfolio.............................. 220,000 $ 220,000
SEI Daily Income Prime Obligations
Portfolio.............................. 327,527 327,527
-----------

Total Money Market Mutual Funds (Cost $547,527).... 547,527
-----------

TOTAL INVESTMENTS (COST $5,323,245) - 105.3% 5,927,765
-----------

SECURITIES SOLD SHORT - (0.9)%
Napro Biotherapeutics, Inc*............. 3,500 (25,375)
US Bioscience, Inc.*.................... 2,400 (23,100)
-----------
Total Securities sold short (proceeds $50,596).... (48,475)
-----------

RECEIVABLES FROM BROKERS FOR SECURITIES SOLD SHORT - 1.5% 84,157
-----------

OTHER ASSETS AND LIABILITIES, NET - (5.9)%............ (335,672)
-----------

NET ASSETS - 100.0%................................... $ 5,627,775
============
+ See Note 2 to Financial Statements.
* Non-income producing security.
SEE ACCOMPANYINGNOTES TO FINANCIAL STATEMENTS
<PAGE>

- -----------------------------------------------------------------------------
THE HOMESTATE GROUP
STATEMENTS OF ASSETS AND LIABILITIES JUNE 30, 1997
- -----------------------------------------------------------------------------
PENNSYLVANIA SELECT
GROWTH OPPORTUNITIES
FUND FUND
------------ ---------------
ASSETS
Investments in securities at market value
(identified cost $69,034,775 and $5,323,245,
respectively) (Note2)............... $ 89,839,843 $ 5,927,765
Cash....................................... 82,812 -
Deposits with brokers and custodian bank
for securities sold short.................. - 113,982
Receivables from brokers for securities
sold short................................ - 84,157
Receivables for:
Dividends and interest. ................... 83,746 2,050
Investment securities sold................ 518,515 181,812
Capital shares sold....................... 100,681 107,522
From Adviser.............................. - 14,837
Other assets.............................. - 8,962
--------------- -------------
Total assets........................... 90,625,597 6,441,087
--------------- -------------

LIABILITIES
Securities sold short at market value
(proceeds $50,596) (Note 2)................ - 48,475
Payables for:
Investment securities purchased........... 775,969 622,381
Capital shares repurchased................ 64,516 -
Accrued expenses........................... 208,139 40,846
Other payables............................. - 101,610
--------------- -------------
Total liabilities........................ 1,048,624 813,312
--------------- -------------

NET ASSETS................................. $ 89,576,973 $ 5,627,775
=============== =============
NET ASSETS CONSIST OF:
Shares of beneficial interest.............. $ 70,217,613 $ 4,972,912
Accumulated net realized gain (loss) on
investments............................... (1,445,708) 48,222
Net unrealized appreciation on investments
(Note 4).................................. 20,805,068 604,520
Net unrealized appreciation on securities
sold short................................ - 2,121
--------------- -------------
Net assets.............................. $ 89,576,973 $ 5,627,775
=============== =============

NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE ($89,576,973/4,156,088 issued and
outstanding shares, no par value;and
$5,627,775/480,967 issued and outstanding
shares,no par value,respectively).......... $21.55 $11.70
====== ======

Maximum offering price per share
(100/95.25 of $21.55 and 100/95.25 of
$11.70, respectively)..................... $22.62 $12.28
====== ======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

<PAGE>
- -----------------------------------------------------------------------------
THE HOMESTATE GROUP
STATEMENTS OF OPERATIONS FOR THE FISCAL YEAR ENDED JUNE 30,1997
- -----------------------------------------------------------------------------
PENNSYLVANIA SELECT
GROWTH OPPORTUNITIES
FUND FUND*
------------ ---------------
INVESTMENT INCOME
Dividends................................. $ 823,145 $ 6,037
Interest.................................. 152,567 7,950
-------------- -------------
Total investment income................ 975,712 13,987
============== =============

EXPENSES
Advisory fees............................. 528,528 11,200
12b-1 fees................................ 249,651 3,920
Administration fees....................... 91,670 7,177
Transfer agent fees....................... 129,108 10,621
Custodial fees............................ 41,759 10,000
Accounting services fees.................. 49,201 14,356
Professional fees......................... 52,427 11,573
Printing expenses......................... 46,327 8,124
Registration fees......................... 32,786 9,271
Trustees fees and expenses................ 12,000 3,600
Miscellaneous expenses.................... 16,189 876
--------------- -------------
Total expenses before fee waivers and
reimbursements......................... 1,249,646 90,718
Advisory fee waived (Note 5)............... - (11,200)
Other fees waived (Note 5)................. - (5,335)
Reimbursement from Adviser (Note 5)........ - (47,862)
--------------- -------------
Total expenses,net........................ 1,249,646 26,321
--------------- -------------

NET INVESTMENT LOSS........................ (273,934) (12,334)
--------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investment
transactions.............................. (1,094,445) 48,541
Net realized gain on securities sold
short...................................... - 12,015
Change in net unrealized appreciation on
investments................................ 9,793,385 604,520
Change in net unrealized appreciation on
securities sold short...................... - 2,121
-------------- -------------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS................................. 8,698,940 667,197
-------------- -------------

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS.................. $ 8,425,006 $ 654,863
============== =============

* For the period February 18, 1997 (commencement of operations) through
June 30, 1997.
+ Commencement of operations.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
- -----------------------------------------------------------------------------
THE HOMESTATE GROUP
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------
PENNSYLVANIA SELECT
GROWTH OPPORTUNITIES
FUND FUND*
------------ ---------------

FOR THE FISCAL YEAR ENDED JUNE 30, 1997
OPERATIONS
Net investment loss........................ $ (273,934) $ (12,334)
Net realized gain (loss) on investment
transactions............................... (1,094,445) 48,541
Net realized gain on securities sold
short...................................... - 12,015
Change in unrealized net appreciation on
investments................................ 9,793,385 604,520
Change in unrealized net appreciation on
securities sold short...................... - 2,121
------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................. 8,425,006 654,863
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS+:
Net realized gain from investment
transactions............................... (3,944,375) -
------------ -----------
NET INCREASE FROM CAPITAL
SHARE TRANSACTIONS - Note 3................ 29,268,289 4,972,912
------------ -----------
TOTAL INCREASE IN NET ASSETS................ 33,748,920 5,627,775

NET ASSETS:
Beginning of period........................ 55,828,053 -
------------ -----------
End of period.............................. $ 89,576,973 $ 5,627,775

FOR THE FISCAL YEAR ENDED JUNE 30, 1996

OPERATIONS
Net investment loss........................ $ (189,331)
Net realized gain on investment transactions 3,898,165
Change in unrealized appreciation on
investments............................... 7,151,550
-------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................ 10,860,384
-------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain from investment
transactions............................... (747,908)
-------------
NET INCREASE FROM CAPITAL
SHARE TRANSACTIONS - Note 3................ 25,327,678
-------------
TOTAL INCREASE IN NET ASSETS................ 35,440,154
NET ASSETS:
Beginning of year.......................... 20,387,899
-------------
End of year................................ $ 55,828,053
=============

* For the period February 18, 1997(commencement of operations) through
June 30, 1997.

+ Does not include $ 829,465 long-term capital gain ($0.20 per share) for
the Pennsylvania Growth Fund and $55,890 short-term capital gain ($0.11
per share) for the Select Opportunities Fund distributed July 21, 1997
to shareholders of record as of July 15, 1997.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
- -----------------------------------------------------------------------------
THE HOMESTATE GROUP
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD:
PENNSYLVANIA GROWTH FUND
<TABLE>
<CAPTION>
PERIODS ENDED
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
6/30/97 6/30/96 6/30/95 6/30/94 6/30/93+
------- ------- ------- ------- --------
Net asset value at
beginning of period..... $21.25 $15.68 $12.37 $10.98 $10.00
------ ------ ------ ------ ------
Income from Investment
- ----------------------
Operations
- ----------
Net investment income
(loss) ................. (0.07) (0.07) (0.01) (0.03) 0.03
Net realized and
unrealized gain on
investments............. 1.78 6.17 3.54 1.53 0.95
------ ------ ------ ------ ------
Total from investment
operations............ 1.71 6.10 3.53 1.50 0.98
------ ------ ------ ------ ------
Less Distributions
- -------------------
Dividends from net
investment income ...... 0.00 0.00 0.00 (0.03) 0.00
Distributions from net
realized gains ......... (1.41) (0.53) (0.22) (0.08) 0.00
------ ------ ------ ------ ------
Total distributions.... (1.41) (0.53) (0.22) (0.11) 0.00
------ ------ ------ ------ ------
Net asset value at end
of period .............. $21.55 $21.25 $15.68 $12.37 $10.98
====== ====== ====== ====== ======

Total return**........... 9.56% 39.94% 28.96% 13.75% 13.07%

Net asset value at end
of period ................. $11.70
======

Total return**.............. 17.00%

+ From commencement of operations: February 18, 1997.
* Annualized.
** Total return does not reflect 4.75% maximum sales charge.

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE GROUP
NOTES TO THE FINANCIAL STATEMENTS JUNE 30, 1997
- -------------------------------------------------------------------------------

NOTE 1 - DESCRIPTION OF FUNDS

The HomeState Group (the "Trust"), an open-end management
company, was established as a Pennsylvania common law trust on
August 26, 1992, and is registered under the Investment
Company Act of 1940, as amended. The Trust has established
two series: the HomeState Pennsylvania Growth Fund and the
HomeState Select Opportunities Fund (each a "Fund" and
collectively, the "Funds"). The investment objective of each
Fund is set forth below.

The HomeState Pennsylvania Growth Fund commenced operations on
October 1, 1992. Operations up to October 1, 1992 were
limited to issuance of 10,000 shares at $10.00 per share to
the Fund's investment adviser. The investment objective of
the Fund is long-term growth of capital through investments
primarily in the common stock of companies with headquarters
or significant operations in the Commonwealth of Pennsylvania.
To pursue its objective, the Fund will invest at least 65% of
its total assets in such companies. Consequently, the Fund
may be subject to risk from economic changes and political
developments occurring within Pennsylvania.

The HomeState Select Opportunities Fund commenced operations
on February 18, 1997. The investment objective of the Fund is
long-term appreciation of capital through investments in a non-
diversified portfolio of U.S. securities, without regard to
any further issuer location limitations. The Fund will
typically invest in the common stock of no more than fifty
U.S. companies. It will usually emphasize companies having a
market capitalization of less than $1 billion. To pursue its
objective, the Fund will invest at least 65% of its total
assets in such companies.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies,
in conformity with generally accepted accounting principles,
which were consistently followed by each Fund in the
preparation of their financial statements.

SECURITY VALUATION - Investment securities traded on a
national securities exchange are valued at the last reported
sales price at 4:00 p.m. Eastern time, unless there are no
transactions on the valuation date, in which case they are
valued at the mean between the closing asked price and the
closing bid price. Securities traded over-the-counter are
valued at the last reported sales price unless there is no
reported sales price, in which case the mean between the
closing asked price and the closing bid price is used. Debt
securities with maturities of sixty days or less are valued at
amortized cost, which approximates market value. Where market
quotations are not readily available, securities are valued
using methods which the Board of Trustees believe in good
faith accurately reflects their fair value.

<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE GROUP
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------

INCOME RECOGNITION - Interest income is accrued as earned.
Dividend income is recorded on the ex-dividend date.

SECURITIES TRANSACTIONS - Security transactions are accounted
for on the date the securities are purchased or sold.
Realized gains and losses on securities sold are determined
using the identified cost method.

DISTRIBUTIONS TO SHAREHOLDERS - Each Fund records
distributions to shareholders on the ex-dividend date. Net
gains realized from securities transactions, if any, will
normally be distributed to shareholders in July and December.
The amounts of distributions from net investment income and
net realized capital gains are determined in accordance with
federal income tax regulations, which may differ from those
amounts determined under generally accepted accounting
principles. These book/tax differences are either temporary
or permanent in nature. To the extent these differences are
permanent, they are charged or credited to paid-in capital in
the period that the difference arises. Accordingly, net
investment loss for the HomeState Pennsylvania Growth Fund of
$273,934 for the fiscal year ended June 30, 1997 has been
charged to paid in-capital. In addition, net investment loss
for the HomeState Select Opportunities Fund of $12,334 for the
fiscal period ended June 30, 1997 has been reclassified to
accumulated net realized gain on investments. These
reclassifications have no effect on net asset values per share.

FEDERAL INCOME TAXES - Each Fund intends to comply with
provisions of the Internal Revenue Code applicable to
regulated investment companies, including the distribution of
substantially all of its taxable income. Accordingly, no
provision for federal income taxes is considered necessary in
the financial statements.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS -
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amount of 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.

CALL AND PUT OPTIONS - The HomeState Select Opportunities Fund
may write and/or purchase exchange-traded call options and
purchase exchange-traded put options on securities in the
Fund. When the Fund writes a call option, an amount equal to
the premium received is reflected as a liability. The amount
of the liability is subsequently "marked to market" to reflect
the current market value of the option written. If an option
which the Fund has written either expires on its stipulated
expiration date, or if the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or loss if the cost of
the closing transaction exceeds the premium received when the
option is sold), and the liability related to such option is
extinguished. If a call option which the Fund has written is
exercised, the Fund realizes a gain or loss from the sale of
the underlying security, and the proceeds of which are
increased by the premium originally received.
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE GROUP
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------

The premium paid by the Fund for the purchase of a put option
is recorded as an investment and subsequently marked to market
to reflect the current market value of the option purchased.
If an option which the Fund has purchased expires on the
stipulated expiration date, the Fund realizes a loss in the
amount of the cost of the option. If the Fund exercises a put
option, it realizes a gain or loss from the sale of the
underlying security, the proceeds of which are decreased by
the premium originally paid. The Fund limits the aggregate
value of puts and call options to 25% of the Fund's net
assets. There were no open option contracts for the HomeState
Select Opportunities Fund at June 30, 1997.

SHORT SALES - The HomeState Select Opportunities Fund may sell
securities short. Short sales are transactions in which the
Fund sells a security it does not own, in anticipation of a
decline in the market value of that security. To complete
such a transaction, the Fund must borrow the security to
deliver to the buyer upon the short sale; the Fund then is
obligated to replace the security borrowed by purchasing it in
the open market at some later date. The Fund will incur a
loss if the market price of the security increases between the
date of the short sale and the date on which the Fund replaces
the borrowed security. The Fund will realize a gain if the
security declines in value between those dates. All short
sales must be fully collateralized. The Fund maintains the
collateral in a segregated account consisting of cash, U.S.
Government securities or other liquid assets in an amount at
least equal to the market value of its short positions. The
Fund limits the value of short positions to 25% of the Fund's
net assets. At June 30, 1997, the HomeState Select
Opportunities Fund had 0.9% of its net assets in short
positions.

NOTE 3 - CAPITAL STOCK

At June 30, 1997, each Fund had an authorized unlimited number of
shares of beneficial interest with no par value.

The following table summarizes the capital share transactions of
each Fund:

THE HOMESTATE PENNSYLVANIA GROWTH FUND

<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR
JUNE 30, 1997 ENDED JUNE 30, 1996
------------------ --------------------
<S> <C> <C> <C> <C>
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------

Sales..................... 1,703,122 $33,155,509 1,551,022 $29,459,053
Reinvested distributions.. 205,183 3,636,915 41,712 681,175
Redemptions............... (379,387) (7,524,135) (265,566) (4,812,550)
--------- ----------- --------- -----------
Net increase.............. 1,528,918 $29,268,289 1,327,168 $25,327,678
========= =========== ========= ===========
</TABLE>

THE HOMESTATE SELECT OPPORTUNITIES FUND

FOR THE PERIOD FEBRUARY 18, 1997
(COMMENCEMENT OF OPERATIONS)
THROUGH JUNE 30, 1997
----------------------------------
SHARES AMOUNT
------ ------
Sales............... 488,935 $5,056,927
Redemptions......... (7,968) (84,015)
------- ----------
Net increase........ 480,967 $4,972,912
======= ==========

NOTE 4 - INVESTMENT TRANSACTIONS

During the periods ended June 30, 1997, purchases and sales of
investment securities (excluding securities sold short and
short-term investments) were as follows:

HOMESTATE PENNSYLVANIA HOMESTATE SELECT
GROWTH FUND OPPORTUNITIES FUND
---------------------- ------------------
Purchases......... $64,500,992 $5,992,584
Sales............. $33,585,183 $1,472,276

The following balances for the Funds are as of June 30, 1997:

<TABLE>
<CAPTION>
COST FOR NET TAX TAX BASIS GROSS TAX BASIS GROSS
FEDERAL INCOME UNREALIZED UNREALIZED UNREALIZED
TAX PURPOSES APPRECIATION APPRECIATION DEPRECIATION
-------------- -------------- --------------- ------------------
<S> <C> <C> <C> <C>
Pennsylvania
Growth Fund............... $69,155,436 $20,684,407 $23,907,010 $3,222,603
Select Opportunities Fund... 5,326,183 601,582 661,836 60,254
</TABLE>

At June 30, 1997, The HomeState Select Opportunities Fund had
0.9% of its net assets in short positions. For the period
ended June 30, 1997, the cost of investments purchased to
cover short sales and the proceeds from those investments sold
short were $169,794 and $181,809, respectively.
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE GROUP
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------
NOTE 5 - EXPENSES AND TRANSACTIONS WITH AFFILIATED PARTIES

Emerald Advisers, Inc. serves as the investment adviser (the
"Adviser") to the Funds for which it receives investment
advisory fees from each Fund. The fee for the HomeState
Pennsylvania Growth Fund is based on average daily net assets
at the annual rate of 0.75% on assets up to and including $250
million, 0.65% for assets in excess of $250 million up to
and including $500 million, 0.55% for assets in excess of $500
million up to and including $750 million, and 0.45% for
assets in excess of $750 million. The fee for the HomeState
Select Opportunities Fund is based on average daily net assets
at the annual rate of 1.00% on assets up to and including $100
million and 0.90% for assets in excess of $100 million. Under
the terms of the investment advisory agreement which expires
on December 31, 1997, Emerald Advisers, Inc. may also
voluntarily reimburse the Funds for certain expenses. Through
June 30, 1998, the Adviser has voluntarily agreed to waive its
advisory fee and/or reimburse other expenses for the Homestate
Select Opportunities Fund to the extent that the Fund's total
operating expenses exceeds 2.35% of the average daily net
assets of the Fund. At June 30, 1997, Emerald Advisers, Inc.
owned 115 shares of The HomeState Pennsylvania Growth Fund and
100 shares of the HomeState Select Opportunities Fund.

The following table summarizes the advisory fees and expense
waivers/reimburesments for the period ended June 30, 1997:

GROSS ADVISORY FEE REIMBURSEMENT
ADVISORY WAIVED FROM ADVISER
--------- ------------ --------------
Pennsylvania Growth Fund $ 528,528 $ 0 $ 0
Select Opportunities Fund 11,200 11,200 47,862

Rodney Square Distributors, Inc. ("RSD"), a wholly owned
subsidiary of Wilmington Trust Company, is the sole
distributor of the Trust shares pursuant to a Distribution
Agreement with each Fund. Each Fund has adopted a distribution
services plan (the "Plan") under Rule 12b-1 of the Investment
Company Act of 1940. The Plan allows each Fund to reimburse
RSD for a portion of the costs incurred in distributing each
Fund's shares, including amounts paid to brokers or dealers,
at an annual rate not to exceed 0.35% of each Fund's average
daily net assets. During the periods ending June 30, 1997,
the HomeState Pennsylvania Growth Fund and the HomeState
Select Opportunities Fund incurred expenses of $249,651 and
$3,920, respectively, pursuant to the Plan.
<PAGE>
- -------------------------------------------------------------------------------
THE HOMESTATE GROUP
NOTES TO THE FINANCIAL STATEMENTS - CONTINUED JUNE 30, 1997
- -------------------------------------------------------------------------------

Pursuant to separate Administration, Accounting Services and
Transfer Agency Agreements with each Fund, Rodney Square
Management Corporation ("RSMC"), a wholly owned subsidiary of
Wilmington Trust Company, serves as administrator, accounting
and transfer agent. During the periods ended June 30, 1997,
the HomeState Pennsylvania Growth Fund and the HomeState
Select Opportunities Fund incurred administration fees
totaling $91,670 and $7,177, of which $0 and $1,192 were
waived, respectively, accounting service fees totaling $49,201
and $14,356, of which $0 and $2,384 were waived, respectively,
and transfer agent fees totaling $129,108 and $10,621, of
which $0 and $1,759 were waived, respectively.

The Funds' Declaration of Trust provides that each Trustee
affiliated with the Funds' Adviser shall serve without
compensation and each Trustee who is not so affiliated shall
receive fees from the income of each Fund, and expense
reimbursements for each Trustees meeting attended. An
unaffiliated Trustee's annual fee shall not exceed $1,000. A
member of the Funds' Board of Trustees who is not affiliated
with the Adviser is employed as a practicing attorney and is a
partner in the law firm of Duane, Morris & Heckscher, the
Fund's legal counsel. Legal fees aggregating $34,927 and
$4,573 were incurred by the HomeState Pennsylvania Growth Fund
and the HomeState Select Opportunities Fund, respectively, to
Duane, Morris & Heckscher druing the periods ending June 30,
1997.

<PAGE>

EXHIBITS AND PART C OF N1-A REGISTRATION STATEMENT

THE HOMESTATE GROUP

Item 24. Financial Statements and Exhibits

(a.) Financial Statements:

Included in Part A of this Registration Statement:

Financial Highlights for the period October 1, 1992 (Commencement of

Operations) to June 30, 1993 and for each of the four years in the

period ended June 30, 1997 for the HomeState Pennsylvania Growth

Fund and for the period February 18, 1997 (Commencement of

Operations) to June 30, 1997 for the HomeState Select Opportunities

Fund.

Included in Part B of this Registration Statement for the HomeState

Pennsylvania Growth Fund and the HomeState Select Opportunities

Fund:

Investments, for the HomeState Pennsylvania Growth Fund June 30,

1997

Investments, for the HomeState Select Opportunities Fund June 30,

1997

Statement of Assets and Liabilities, June 30, 1997

Statement of Operations, for the fiscal year ended June 30, 1997

Statement of Changes in Net Assets, for the fiscal years ended

June 30, 1996 and June 30, 1997

Financial Highlights for the period October 1, 1992(Commencement of

Operations) to June 30, 1993 and for each of the four years in the

period ended June 30, 1997 for the HomeState Pennsylvania Growth

Fund and from inception (February 18, 1997) to the period ended June

30, 1997 for the HomeState Select Opportunities Fund.

Notes to Financial Statements

(b.) Exhibits:

1. The HomeState Group's (the "Registrant") Declaration of Trust, dated

August 26, 1992, Addendum to the Declaration of Trust dated November

21, 1996 and Joinder of Additional Trustees. (Incorporated by

reference to Exhibit 1 to Post-Effective Amendment No. 5 to this

Registration Statement filed on November 27, 1996.)

2. None

3. None

4. Form of Certificate of Common Stock (Incorporated by reference to

Exhibit 4 to Pre-Effective Amendment No. 3 to this Registration

Statement filed on September 25, 1992.)

5. (a) Investment Advisory Agreement between the Registrant, on behalf

of the HomeState Pennsylvania Growth Fund, and Emerald Advisers,

Inc. dated September 1, 1992. (Incorporated by reference to Exhibit

5(a) to Post-Effective Amendment No. 5 to this Registration

Statement filed on November 27, 1996.)

(b) Form of Investment Advisory Agreement between the Registrant, on

behalf of the HomeState Select Opportunities Fund, and Emerald

Advisers, Inc. to be dated February 1, 1997. (Incorporated by

reference to Exhibit 5(b) to Post-Effective Amendment No. 5 to this

Registration Statement filed on November 27, 1996.)

6. (a) Distribution Agreement between the Registrant and Rodney Square

Distributors, Inc. dated November 20, 1995. (Incorporated by

reference to Exhibit 6(a) to Post Effective Amendment No. 4 to this

Registration Statement filed on October 3, 1996.)

<PAGE>

(b) Form of Selected Dealer Agreement. (Incorporated by reference to

Exhibit 6(b) to Post Effective Amendment No. 4 to this Registration

Statement filed on October 3, 1996.)

7. None

8. (a) Custody Agreement between the Registrant (HomeState Pennsylvania

Growth Fund) and CoreStates Financial Corp. dated August 31, 1992.

(Incorporated by reference to Exhibit 8(a) to Post-Effective

Amendment No. 5 to this Registration Statement filed on November 27,

1996.)

(b) Form of Custody Agreement between the Registrant (HomeState

Select Opportunities Fund) and CoreStates Financial Corp. dated

February 1, 1997. (Incorporated by reference to Exhibit 8(b) to

Post-Effective Amendment No. 5 to this Registration Statement filed

on November 27, 1996.)

9. (a) Transfer Agency Agreement between the Registrant and Rodney

Square Management Corporation dated November 20, 1995. (Incorporated

by reference to Exhibit 9(a) to Post-Effective Amendment No. 5 to

this Registration Statement filed on November 27, 1996.)

(b) Accounting Services Agreement between the Registrant and Rodney

Square Management Corporation dated November 20, 1995. (Incorporated

by reference to Exhibit 9(b) to Post-Effective Amendment No. 5 to

this Registration Statement filed on November 27, 1996.)

Square Management Corporation dated November 20, 1995. (Incorporated

by reference to Exhibit 9(c) to Post-Effective Amendment No. 5 to

this Registration Statement filed on November 27, 1996.)

10. None.

11. Consent of Independent Accountants.

12. None.

13. Subscription Agreement. (Incorporated by reference to Exhibit 13 to

Post-Effective Amendment No. 5 to this Registration Statement filed

on November 27, 1996.)

14. None.

15. (a) Rule 12b-1 Plan for The HomeState Pennsylvania Growth Fund.

(Incorporated by reference to Exhibit 15(a) to Post-Effective

Amendment No. 5 to this Registration Statement filed on November 27,

1996.)

(b) Rule 12b-1 Plan for The HomeState Select Opportunities Fund.

(Incorporated by reference to Exhibit 15(b) to Post-Effective

Amendment No. 5 to this Registration Statement filed on November 27,

1996.)

16. Schedule for Computation of Performance Quotation. (Incorporated by

reference to Exhibit 16 to Post-Effective Amendment No. 5 to this

Registration Statement filed on November 27, 1996.)

17. Financial Data Schedule.

18. None.

Item 25. Persons controlled by or Under Common Control with Registrant

None

Item 26. Number of Holders of Securities

NUMBER OF RECORD HOLDERS

TITLE OF SERIES AS OF JUNE 30, 1997

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

Shares of Beneficial Interest $.01 par value:

The HomeState Pennsylvania Growth Fund 5778

The HomeState Select Opportunities Fund 541

<PAGE>

Item 27. Indemnification

The Declaration of Trust (filed as Exhibit 1) provides for

indemnification of Trustees, as set forth in Section 13 thereof.

The Registrant's Distribution Agreement (filed as Exhibit 6(a)) provides

for indemnification of the principal underwriter against certain losses, as

set forth in Section 10 thereof.

It is expected that the Registrant will obtain a directors' and officers'

liability policy covering specific types of errors and omissions.

Insofar as indemnification for liabilities arising under the Securities

Act of 1933 may be permitted to directors, officers and controlling persons of

the Registrant pursuant to such provisions of the Declaration of Trust,

Distribution Agreement, or statutes or otherwise, the Registrant has been

advised that in the opinion of a Securities and Exchange Commission, such

indemnification is against public policy as expressed in said Act and is,

therefore, unenforceable. In the event that a claim for indemnification

against such liabilities (other than the payment by the Registrant of expenses

incurred or paid by a director, officer or controlling person of the

Registrant in the successful defense of any such action, suit or proceeding)

is asserted by such director, officer or controlling person in connection with

the shares of the Registrant, the Registrant will, unless in the opinion of

its counsel the matter has been settled by controlling precedent, submit to a

court of appropriate jurisdiction the question whether such indemnification by

it is against public policy as expressed in said Act and will be governed by

the final adjudication of such issue.

Item 28. Business and Other Connections of Investment Adviser investment

advisory services for the Registrant and certain other investment advisory

clients. Emerald Advisers, Inc. also serves as General Partner to Emerald

Partners, L.P., a Pennsylvania-chartered investment limited partnership. As

Emerald Advisers, Inc. is a wholly-owned corporation (incorporated on November

14, 1991), each director and officer of the corporation has held various

positions with other companies prior to the founding of Emerald Advisers, Inc.

Information as to the directors and officers of Emerald Advisers, Inc. is

included in its Form ADV filed on November 14, 1991 and most recently

supplemented on May 31, 1996 with the Securities Exchange Commission File No.

801-40263 and is incorporated by reference herein.

Item 29. Principal Underwriters

(a) Investment Companies for which Rodney Square Distributors, Inc.

also acts as principal underwriter:

The Rodney Square Fund

The Rodney Square Multi-Manager Fund

The Rodney Square Strategic Fixed-Income Fund

The Rodney Square Tax-Exempt Fund

Heitman Real Estate Fund, Institutional Class

Kalmar Pooled Investment Trust

Kiewit Mutual Fund

1838 Investment Advisors Funds

The Olstein Funds

<PAGE>

(b)

(1) (2) (3)

NAME AND PRINCIPAL POSITION AND OFFICES WITH POSITION AND OFFICES

BUSINESS ADDRESS RODNEY SQUARE DISTRIBUTORS, INC. WITH REGISTRANT

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

Jeffrey O. Stroble President, Secretary, None

1105 North Market St. Treasurer & Director

Wilmington, DE 19890

Martin L. Klopping Director None

Rodney Square North

1100 North Market St.

Wilmington, DE 19890

Neil Curran Vice President None

1105 North Market St.

Wilmington, DE 19890

Item 30. Location of Accounts and Records

Certain accounts, books and other documents required to be maintained by

Section 31(a) of the Investment Company Act of 1940 and the rules promulgated

thereunder and the records relating to the duties of the Registrant's transfer

agent will be maintained by Rodney Square Management Corporation, Rodney

Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001.

Records relating to the duties of the Registrant's custodian will be

maintained by CoreStates Financial Corp., P.O. Box 7558, Philadelphia, PA

19101-7558.

Item 31. Management Services

None.

Item 32. Undertakings

Registrant hereby undertakes to furnish each person to whom a

prospectus is delivered with a copy of the Registrant's latest

annual report to shareholders, upon request and without charge.

Registrant hereby undertakes to call a meeting of shareholders for

the purpose of voting upon the question of the removal of a Trustee

or Trustees when requested in writing to do so by the holders of at

least 10% of the Registrant's outstanding shares and in connection

with such meeting to comply with the provisions of Section 16(c) of

the Investment Company Act of 1940, as amended, relating to

shareholder communications.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the

Investment Company Act of 1940, the Registrant, The HomeState Select

Opportunities Fund, certifies that this Post-Effective Amendment No. 7 to its

Registration Statement meets all of the requirements for effectiveness

pursuant to Rule 485(b) under the Securities Act of 1933 and the Registrant

further certifies that it has duly caused this Post-Effective Amendment No. 1

to its Registration Statement to be signed on its behalf by the undersigned,

thereto duly authorized, in the City of Lancaster, and State of Pennsylvania

on the 18 day of August, 1997.

THE HOMESTATE SELECT OPPORTUNITIES FUND

Registrant

By: /S/ SCOTT L REHR
---------------------

Scott L. Rehr

President

Pursuant to the requirements of the Securities Act of 1933, this Post-

Effective Amendment No. 7 to the Registration Statement has been signed below

by the following persons in the capacities and on the date indicated.

/S/ Scott L. Rehr* Trustee, August 18,1997
- -----------------

Scott L. Rehr President

/S/ Kenneth G. Mertz, II, CFA* Trustee August 18,1997
- -----------------------------

Kenneth G. Mertz, II, CFA Vice President

Chief Investment Officer

/S/ Bruce E. Bowen* Trustee August 18,1997
- -------------------

Bruce E. Bowen

/S/ H.J. Zoffer* Trustee August 18,1997
- ---------------

H.J. Zoffer

/S/ Scott C. Penwell, Esq.* Trustee August 18,1997
- --------------------------

Scott C. Penwell, Esq.

*Pursuant to authority granted in a Power of Attorney

By:/s/Scott L. Rehr

Scott L. Rehr

Attorney-in-Fact

<PAGE>

POWER OF ATTORNEY

The undersigned and trustees of The HomeState Group (the "Trust") hereby

appoint Scott L. Rehr as attorney-in-fact and agent, in all capacities, to

execute, and to file any of the documents referred to below relating to the

Notification of Registration on Form N-8A registering the Trust as an

investment company under the Investment Company Act of 1940, as amended, (the

"Act") and the Trust's Registration Statement on Form N-1A under the Act and

under the Securities Act of 1933, including any and all amendments thereto,

covering the registration of the Trust as an investment company and the sale

of shares of the Trust, including all exhibits and any and all documents

required to be filed with respect thereto with any regulatory authority,

including applications for exemptive order rulings. Each of the undersigned

grants to the said attorney full authority to do every act necessary to be

done in order to effectuate the same as fully, to all intents and purposes, as

he could do if personally present, thereby ratifying all that said attorney-in-

fact and agent may lawfully do or cause to be done by virtue hereof.

The undersigned Trustees hereby execute this Power of Attorney as of the

date specified.

NAME TITLE DATE

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

/S/ Scott L. Rehr Trustee, President August 18,1997
- -----------------

Scott L. Rehr

/S/ Kenneth G. Mertz, II, CFA Trustee Vice President August 18,1997
- -----------------------------

Kenneth G. Mertz, II, CFA Chief Investment Officer

/S/ Bruce E. Bowen Trustee August 18,1997
- ---------------

Bruce E. Bowen

/S/ Scott C. Penwell, Esq. Trustee August 18,1997
- --------------------------

Scott C. Penwell, Esq.

/S/ Dr. H.J. Zoffer Trustee August 18,1997
- -------------------

Dr. H.J. Zoffer

<PAGE>

EXHIBIT INDEX

Item 24(b) Exhibits

11. Consent of Independent Accountants

17. Financial Data Schedule

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Post-Effective Amendment No.
7 to the Registration Statement on form N-1A (the "Registration
Statement") of The HomeState Group of our report dated August 7,
1997, related to the financial statements of the HomeState
Pennsylvania Growth Fund and the HomeState Select Opportunities
Fund, constituting The HomeState Group. We also consent to the
references to us under the headings "Financial Highlights" and
"General Information" in the Prospectus and under the heading
"Independent Accountants" in the Statement of Additional
Information contained in Post-Effective Amendment No. 6 to the
Registration Statement on form N-1A, which is incorporated by
reference into the Registration Statement.

Price Waterhouse LLP
Philadelphia, Pennsylvania
August 15, 1997

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