<PAGE>
THE ARBOR FUNDS
-GOLDEN OAK GROWTH PORTFOLIO
-GOLDEN OAK VALUE PORTFOLIO
-GOLDEN OAK INTERMEDIATE-TERM INCOME PORTFOLIO
-GOLDEN OAK MICHIGAN TAX FREE BOND PORTFOLIO
-GOLDEN OAK PRIME OBLIGATION MONEY MARKET PORTFOLIO
CLASS I AND A SHARES
SUPPLEMENT DATED FEBRUARY 23, 1998
TO THE PROSPECTUS DATED MAY 31, 1997
The Prospectus, dated May 31, 1997, is hereby amended by the addition of the
following unaudited financial information for Class I and Class A Shares of
(i) the Golden Oak Growth Portfolio, the Golden Oak Intermediate-Term Income
Portfolio, and the Golden Oak Prime Obligation Money Market Portfolio for the
period February 1, 1997 to January 31,1998, and (ii) the Golden Oak Value
Portfolio and the Golden Oak Michigan Tax Free Bond Portfolio for the period
June 23, 1997 to January 31, 1998.
FINANCIAL HIGHLIGHTS
The following table provides unaudited financial highlights for Class I
Shares of (i) the Golden Oak Growth Portfolio, the Golden Oak
Intermediate-Term Income Portfolio, and the Golden Oak Prime Obligation Money
Market Portfolio for the period February 1, 1997 to January 31,1998, and (ii)
the Golden Oak Value Portfolio and the Golden Oak Michigan Tax Free Bond
Portfolio for the period June 23, 1997 to January 31, 1998.
For a Class I share outstanding throughout the period:
<TABLE>
<CAPTION>
Golden Oak Golden Oak
Golden Intermediate Golden Oak Prime
Oak Golden Oak -Term Michigan Tax Obligation
Growth Value Income Free Bond Money Market
Portfolio Portfolio (1) Portfolio Portfolio (1) Portfolio
2/1/97 to 6/23/97 to 2/1/97 to 6/23/97 to 2/1/97 to
1/31/98 1/31/98 1/31/98 1/31/98 1/31/98
--------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period $12.66 $10.00 $9.83 $10.00 $1.00
Net Investment Income -- 0.04 0.56 0.27 0.05
Realized and Unrealized
Gains (Losses) on
Investments 3.12 0.86 0.21 0.26 --
Distributions from Net
Investment Income -- (0.04) (0.56) (0.27) (0.05)
Distributions from Net
Realized Gain (3.12) (1.53) -- (0.02) --
Net Asset Value End of
Period $12.66 $9.33 $10.04 $10.24 $1.00
Total Return 25.85% 9.15% 8.07% 5.35% 5.41%
Net Assets End of Period
(000) $36,240 $30,922 $125,936 $85,556 $127,977
Ratio of Expenses to
Average Net Assets 1.07% 1.10%* 0.65% 0.65%* 0.40%
Ratio of Net Income to
Average Net Assets 0.03% 0.72%* 5.66% 4.41%* 5.29%
Ratio of Expenses to
Average Net Assets
(Excluding Waivers) 1.08% 1.13%* 0.80% 0.82%* 0.59%
Ratio of Net Income to
Average Net Assets
(Excluding Waivers) 0.02% 0.69%* 5.51% 4.24%* 5.10%
Portfolio Turnover Rate 131.54% 90.97% 60.78% 9.77% N/A
Average Commission Rate
(+) $0.0600 $0.0421 N/A N/A N/A
Amounts designated as "--" are either $0 or have been rounded to $0.
* Annualized
(+) Average Commission rate paid per share for security purchases and sales during the period.
(1) Commenced operations June 23, 1997. Total return is for the period indicated and has not been annualized.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
The following table provides unaudited financial highlights for Class A
Shares of (i) the Golden Oak Growth Portfolio, the Golden Oak
Intermediate-Term Income Portfolio, and the Golden Oak Prime Obligation
Money Market Portfolio for the period February 1, 1997 to January 31,1998,
and (ii) the Golden Oak Value Portfolio and the Golden Oak Michigan Tax
Free Bond Portfolio for the period June 23, 1997 to January 31, 1998.
For a Class A share outstanding throughout the period:
<TABLE>
<CAPTION>
Golden Oak Golden Oak
Golden Intermediate- Golden Oak Prime
Oak Golden Oak Term Michigan Tax Obligation
Growth Value Income Free Bond Money Market
Portfolio Portfolio (1) Portfolio Portfolio (1) Portfolio
2/1/97 to 6/23/97 to 2/1/97 to 6/23/97 to 2/1/97 to
1/31/98 1/31/98 1/31/98 1/31/98 1/31/98
---------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value Beginning of Period $12.57 $10.00 $9.83 $10.00 $1.00
Net Investment Income (0.01) 0.02 0.53 0.27 0.05
Realized and Unrealized Gains
(Losses) on Investments 3.07 0.86 0.21 0.26 --
Distributions from Net Investment
Income -- (0.03) (0.53) (0.27) (0.05)
Distributions from Net Realized Gain (3.12) (1.53) -- (0.02) --
Net Asset Value End of Period $12.51 $9.32 $10.04 $10.24 $1.00
Total Return (+) 25.56% 8.97% 7.78% 5.31% 5.15%
Net Assets End of Period (000) $307 $51 $64 $10 $6,381
Ratio of Expenses to Average Net
Assets 1.32% 1.35%* 0.90% 0.90%* 0.65%
Ratio of Net Income to Average Net
Assets (0.21)% 0.31%* 5.40% 4.15%* 4.99%
Ratio of Expenses to Average Net
Assets (Excluding Waivers) 1.32% 1.36%* 1.06% 1.05%* 0.90%
Ratio of Net Income to Average Net
Assets (Excluding Waivers) (0.21)% 0.30%* 5.24% 4.00%* 4.74
Portfolio Turnover Rate 131.54% 90.97% 60.78% 9.77% N/A
Average Commission Rate (++) 0.0600 0.0421 N/A N/A N/A
Amounts designated as -- are either $0 or have been rounded to $0.
* Annualized
(+) Total return does not reflect the sales charge on Class A shares.
(++) Average Commission rate paid per share for security purchases and sales during the period.
(1) Commenced operations June 23, 1997. Total return is for the period indicated and has not been annualized.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
</TABLE>
<PAGE>
THE ARBOR FUND
(THE "TRUST")
SUPPLEMENT DATED FEBRUARY 23, 1998 TO THE
STATEMENT OF ADDITIONAL INFORMATION DATED MAY 31, 1997
The Statement of Additional Information for the Trust is hereby amended and
supplemented by the following unaudited financial statements of (i) the Golden
Oak Growth Portfolio, the Golden Oak Intermediate-Term Income Portfolio, and the
Golden Oak Prime Obligation Money Market Portfolio for the period February 1,
1997 to January 31,1998, and (ii) the Golden Oak Value Portfolio and the Golden
Oak Michigan Tax Free Bond Portfolio for the period June 23, 1997 to
January 31, 1998.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
GROWTH Value
PORTFOLIO Shares (000)
- -----------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 92.9%
AIRCRAFT -- 2.6%
General Dynamics ............... 9,100 $ 785
United Technologies ............ 2,200 180
------
Total Aircraft ......... 965
------
APPAREL/TEXTILES -- 1.3%
Jones Apparel Group* ........... 10,600 461
------
AUTOMOTIVE -- 1.6%
Eaton .......................... 6,600 592
------
BANKS -- 1.6%
State Street ................... 10,700 599
------
BEAUTY PRODUCTS -- 3.9%
Colgate-Palmolive .............. 3,100 227
Procter & Gamble ............... 15,500 1,215
------
Total Beauty Products .. 1,442
------
BEVERAGES -- 2.3%
Pepsico ........................ 23,100 833
------
BROADCASTING, NEWSPAPERS AND ADVERTISING -- 1.9%
Omnicom Group .................. 16,800 681
------
CHEMICALS -- 0.4%
Dow Chemical ................... 1,600 144
------
COMPUTER SOFTWARE -- 4.1%
Computer Associates International 3,200 170
Compuware* ..................... 25,800 1,006
Microsoft* ..................... 2,200 328
------
Total Computer Software 1,504
------
COMPUTERS & SERVICES -- 6.2%
Compaq Computer ................ 28,000 842
Dell Computer* ................. 12,600 1,253
EMC* ........................... 5,400 176
------
Total Computers & Services 2,271
------
COSMETICS -- 1.4%
Gillette ....................... 5,300 523
------
DEPARTMENT STORES -- 1.8%
Dayton-Hudson .................. 9,200 662
------
GROWTH Value
PORTFOLIO (continued) Shares (000)
- -----------------------------------------------------
DRUGS -- 13.1%
Abbott Laboratories ............ 5,500 $ 389
Bristol-Myers Squibb ........... 7,400 738
Eli Lilly ...................... 18,100 1,222
Schering Plough ................ 19,800 1,433
Warner Lambert ................. 6,800 1,023
------
Total Drugs ........... 4,805
------
ELECTRICAL & ELECTRONIC PRODUCTS -- 3.5%
General Electric ............... 16,500 1,279
------
ELECTRICAL UTILITIES -- 1.1%
AES* ........................... 9,800 420
------
ELECTRONIC STORES -- 1.8%
Tandy .......................... 17,200 667
------
ENTERTAINMENT -- 0.5%
Walt Disney .................... 1,600 171
------
ENVIRONMENTAL SERVICES -- 1.2%
Browning-Ferris Industries ..... 12,500 432
------
FINANCIAL SERVICES -- 5.9%
Fannie Mae ..................... 14,400 889
Greenpoint Financial ........... 7,900 547
SLM Holding .................... 16,800 708
------
Total Financial Services 2,144
------
FOOD, BEVERAGE & TOBACCO -- 5.2%
Kellogg ......................... 5,400 249
Philip Morris ................... 17,800 739
Quaker Oats ..................... 16,800 903
------
Total Food, Beverage & Tobacco 1,891
------
HEALTH SERVICES -- 2.7%
HBO & Company ................... 15,456 809
Healthsouth* .................... 7,200 162
------
Total Health Services .. 971
------
HOTELS & LODGING -- 0.6%
Marriott International .......... 3,000 207
------
INSURANCE -- 2.5%
Allstate ........................ 10,500 929
------
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
GROWTH Value
PORTFOLIO (continued) Shares (000)
- -----------------------------------------------------
LUMBER & WOOD PRODUCTS -- 1.6%
Weyerhaeuser .................... 11,800 $ 588
------
MACHINERY -- 2.0%
Applied Materials* .............. 5,600 184
Caterpillar ..................... 11,500 552
------
Total Machinery ......... 736
------
MEDICAL SUPPLIES -- 1.0%
Guidant ......................... 5,500 353
------
MISCELLANEOUS CONSUMER SERVICES -- 0.5%
Robert Half International* ...... 4,800 185
------
OTHER HEALTH SERVICES -- 2.3%
McKesson ........................ 17,300 828
------
PETROLEUM & FUEL PRODUCTS-- 2.4%
Phillips Petroleum .............. 4,500 638
USX-Marathon Group .............. 7,500 252
------
Total Petroleum & Fuel Products 890
------
PRINTING & PUBLISHING -- 3.7%
Gannett ......................... 3,600 218
New York Times, Class A ......... 9,300 605
Tribune ......................... 8,900 541
------
Total Printing & Publishing 1,364
------
RETAIL -- 2.0%
TJX ............................. 21,200 718
------
SEMI-CONDUCTORS/INSTRUMENTS-- 5.0%
Altera* ......................... 4,600 158
Intel ........................... 14,400 1,166
Philips Electronics ADR ......... 4,400 293
Texas Instruments ............... 3,600 197
------
Total Semi-Conductors/Instruments 1,814
------
TELEPHONES & TELECOMMUNICATION-- 5.2%
Airtouch Communications* ........ 24,900 1,092
Ameritech ....................... 5,600 240
Bellsouth ....................... 4,900 297
Tellabs* ........................ 5,100 261
------
Total Telephones & Telecommunication
........................ 1,890
------
Total Common Stocks
(Cost $27,919) ....... 33,959
------
Face
GROWTH Amount Value
PORTFOLIO (concluded) (000) (000)
- -----------------------------------------------------
REPURCHASE AGREEMENTS -- 12.3%
Dresdner Government Securities (A)
5.53%, dated 01/30/98, matures
02/02/98, repurchase price
$4,509,459 (collateralized by
U.S. Treasury Note, par value
$4,450,000, 5.875%, 01/31/99:
market value $4,599,499) .... $ 4,507 $ 4,507
-------
Total Repurchase Agreements
(Cost $4,507) ........ 4,507
-------
Total Investments-- 105.2%
(Cost $32,426) ....... 38,466
-------
OTHER ASSETS AND LIABILITIES, NET-- (5.2%) (1,919)
-------
NET ASSETS:
Portfolio Shares of Class I (unlimited
authorization -- no par value)
based on 2,862,450 outstanding
shares of beneficial
interest ..................... 28,096
Portfolio Shares of Class A
(unlimited authorization --
no par value) based on
24,559 outstanding shares
of beneficial interest ....... 260
Distributions in Excess of Net
Investment Income ............ (9)
Accumulated Net Realized Gain
on Investments ............... 2,160
Net Unrealized Appreciation
on Investments ............... 6,040
-------
Total Net Assets-- 100.0% ........ $36,547
=======
Net Asset Value, Offering and Redemption
Price Per Share -- Class I ... $12.66
=======
Net Asset Value and Redemption
Price Per Share-- Class A .... $12.51
=======
Maximum Offering Price per Share --
Class A ($12.51 / 94.25%) .... $13.27
=======
- -----------------------------------------------------
* Non-income producing security
ADR -- American Depository Receipt
(A) Tri-Party Repurchase Agreement
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
VALUE Value
PORTFOLIO Shares (000)
- -----------------------------------------------------
COMMON STOCKS -- 96.2%
AIR TRANSPORTATION -- 2.9%
UAL* ............................ 10,000 $ 889
------
AIRCRAFT -- 2.6%
United Technologies ............. 10,000 816
------
AUTOMOTIVE -- 7.4%
Chrysler ........................ 12,810 446
Dana ............................ 12,520 628
Eaton ........................... 6,000 538
Ford Motor ...................... 13,285 678
------
Total Automotive ........ 2,290
------
BANKS -- 11.0%
Chase Manhattan ................. 1,875 201
Citicorp ........................ 3,900 464
First Union ..................... 10,600 509
Fleet Financial Group ........... 7,800 559
Mellon Bank ..................... 11,320 683
Norwest ......................... 18,800 686
Peoples Heritage Financial Group 7,100 305
------
Total Banks ............. 3,407
------
BEAUTY PRODUCTS -- 1.1%
Procter & Gamble ................ 4,300 337
------
BUILDING & CONSTRUCTION SUPPLIES -- 1.6%
Southdown ....................... 7,800 492
------
COMPUTER SOFTWARE -- 1.4%
Computer Associates International 8,257 439
------
COMPUTERS & SERVICES -- 4.6%
Electronic Data Systems ........ 14,000 583
International Business Machines . 3,000 296
Unisys* ........................ 32,600 538
------
Total Computers & Services 1,417
------
DRUGS -- 4.8%
Biogen* ........................ 9,000 370
ICN Pharmaceuticals ............ 9,200 473
Pharmacia & Upjohn ............. 16,600 638
------
Total Drugs ............ 1,481
------
VALUE Value
PORTFOLIO (continued) Shares (000)
- -----------------------------------------------------
ELECTRICAL UTILITIES -- 3.6%
Atlantic Energy ................. 35,000 $ 711
Nipsco Industries ............... 7,860 401
------
Total Electrical Utilities 1,112
------
ELECTRICAL & ELECTRONIC PRODUCTS -- 1.2%
General Electric ................ 4,600 357
------
FINANCIAL SERVICES -- 9.2%
Fannie Mae ...................... 11,830 731
Household International ......... 4,800 598
MBNA ............................ 20,782 646
Morgan Stanley, Dean Witter,
Discover ..................... 15,000 876
------
Total Financial Services 2,851
------
FOOD, BEVERAGE & TOBACCO -- 2.0%
Interstate Bakeries ............. 17,400 605
------
HOUSEHOLD PRODUCTS -- 2.9%
Maytag .......................... 23,500 903
------
INDUSTRIAL -- 1.8%
Textron ......................... 4,000 239
Tyco International Limited ...... 7,080 314
------
Total Industrial ........ 553
------
INSURANCE -- 3.6%
Allstate ........................ 5,941 526
Sunamerica ...................... 14,700 591
------
Total Insurance ......... 1,117
------
OFFICE FURNITURE & FIXTURES-- 3.6%
Hon Industries .................. 5,800 354
Knoll* .......................... 25,000 770
------
Total Office Furniture & Fixtures 1,124
------
PAPER & PAPER PRODUCTS -- 1.0%
Fort James ...................... 7,500 322
------
PETROLEUM & FUEL PRODUCTS-- 0.7%
Grey Wolf* ...................... 47,000 214
------
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
VALUE Value
PORTFOLIO (continued) Shares (000)
- -----------------------------------------------------
PETROLEUM REFINING -- 7.5%
Exxon ........................... 10,000 $ 593
Mobil ........................... 4,000 273
Pacific Enterprises ............. 11,230 405
Sun ............................. 27,000 1,046
------
Total Petroleum Refining 2,317
------
PRINTING & PUBLISHING -- 1.7%
Scitex Limited ................. 55,000 540
------
PROFESSIONAL SERVICES -- 1.4%
Dun & Bradstreet ............... 14,000 446
------
RETAIL -- 6.1%
Albertson's .................... 9,000 429
Family Dollar Stores ........... 14,250 454
Office Depot* .................. 30,000 668
Sears Roebuck .................. 7,500 345
------
Total Retail ............ 1,896
------
SEMI-CONDUCTORS/INSTRUMENTS-- 2.1%
LSI Logic* ..................... 13,000 312
Texas Instruments .............. 6,000 328
------
Total Semi-Conductors/
Instruments ......... 640
------
TELEPHONES & TELECOMMUNICATION-- 6.1%
Aliant Communications ........... 12,000 375
BCE ............................. 17,500 547
Bell Atlantic ................... 5,470 506
US West ......................... 9,560 460
------
Total Telephones &
Telecommunication .... 1,888
------
TRANSPORTATION SERVICES -- 2.0%
CNF Transportation .............. 13,595 621
------
WATER UTILITIES -- 2.3%
Aquarion ........................ 21,000 728
------
Total Common Stocks
(Cost $21,219) ....... 29,802
------
VALUE Face Value
PORTFOLIO (concluded) Amount (000) (000)
- -----------------------------------------------------
CASH EQUIVALENTS -- 4.9%
Corefund Elite Cash Reserve
5.410%, ................... $ 1,505 $ 1,505
-------
Total Cash Equivalents
(Cost $1,505) ...... 1,505
-------
Total Investments-- 101.1%
(Cost $22,724) ..... 31,307
-------
OTHER ASSETS AND LIABILITIES, NET-- (1.1%) (334)
-------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization --
no par value) based on
3,315,336 outstanding
shares of beneficial
interest .................. 20,069
Portfolio Shares of Class A
(unlimited authorization --
no par value) based on
5,536 outstanding shares
of beneficial interest ..... 60
Undistributed Net Investment Income 24
Accumulated Net Realized Gain
on Investments ............. 2,237
Net Unrealized Appreciation
on Investments ............. 8,583
-------
Total Net Assets-- 100.0% $30,973
=======
Net Asset Value, Offering and Redemption
Price Per Share -- Class I .. $9.33
=======
Net Asset Value and Redemption
Price Per Share-- Class A ... $9.32
=======
Maximum Offering Price per Share --
Class A ($9.32 / 94.25%) .... $9.89
=======
- -----------------------------------------------------
* Non-income producing securities
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
Face
INTERMEDIATE-TERM INCOME Amount Value
PORTFOLIO (000) (000)
- -----------------------------------------------------
CORPORATE OBLIGATIONS -- 28.7%
BANKING -- 2.4%
Bank of Montreal
10.000%, 09/01/98 ......... $ 1,000 $ 1,024
Huntington National
6.050%, 08/25/99 .......... 2,000 2,008
-------
Total Banking .......... 3,032
-------
FINANCIAL SERVICES -- 8.5%
American Express Credit
8.500%, 06/15/99 .......... 500 518
Associates Corporation of North America
8.550%, 07/15/09 .......... 2,000 2,350
Chrysler Financial
13.250%, 10/15/99 .......... 1,000 1,118
6.950%, 03/25/02 .......... 3,000 3,097
Ford Motor Credit
6.250%, 11/08/00 .......... 1,000 1,011
8.200%, 02/15/02 .......... 1,000 1,079
Household Finance
9.950%, 03/08/01 .......... 500 557
Lehman Brothers Holding
5.750%, 02/15/98 .......... 1,000 1,000
-------
Total Financial Services 10,730
-------
INDUSTRIAL -- 15.9%
Archer Daniels Midland
10.250%, 01/15/06 ......... 1,000 1,260
Eli Lilly
8.375%, 12/01/06 .......... 1,000 1,156
Hertz
7.000%, 05/01/02 .......... 2,800 2,873
Honeywell
6.750%, 03/15/02 .......... 4,000 4,110
International Lease Finance
6.270%, 02/10/99 .......... 1,725 1,734
Kaiser Permanente
9.550%, 07/15/05 .......... 1,390 1,668
Philip Morris
7.000%, 07/15/05 .......... 1,500 1,534
RR Donnelley & Sons
9.125%, 12/01/00 .......... 500 544
6.700%, 07/05/05 .......... 1,000 1,033
Union Pacific, Callable
01/15/01 @ 100
6.125%, 01/15/04 .......... 1,000 993
US Airways
6.760%, 04/15/08 .......... 950 981
WMX Technologies
7.000%, 05/15/05 .......... 2,000 2,060
--------
Total Industrial ....... 19,946
--------
Face
INTERMEDIATE-TERM INCOME Amount Value
PORTFOLIO (continued) (000) (000)
- -----------------------------------------------------
UTILITIES -- 1.9%
Consolidated Edison of NY
6.500%, 02/01/01 .......... $ 1,000 $ 1,020
Pacific Gas and Electric
8.750%, 01/01/01 .......... 1,300 1,404
--------
Total Utilities ........ 2,424
--------
Total Corporate Obligations
(Cost $35,290) ...... 36,132
--------
U.S. GOVERNMENT AGENCY BONDS -- 4.8%
FHLMC
6.310%, 02/23/04 .......... 2,000 2,000
FNMA
6.860%, 04/24/00 .......... 1,500 1,504
5.990%, 10/01/03 .......... 1,500 1,495
SLMA
6.050%, 09/14/00 .......... 1,000 1,013
--------
Total U.S. Government Agency Bonds
(Cost $5,961) ....... 6,012
--------
U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS -- 20.2%
FHLMC, Remic, Ser 1688, Cl M
6.000%, 08/15/13 .......... 5,168 5,125
FHLMC, Remic, Ser 1895, Cl B
7.500%, 12/15/23 .......... 3,000 3,111
FNMA, Pool # 379760
6.500%, 08/01/12 .......... 6,314 6,282
FNMA, Pool # 109138
7.040%, 08/01/15 .......... 1,415 1,541
FNMA, Pool # 109159
6.720%, 11/01/15 .......... 2,486 2,522
FNMA, Remic, Ser 1993-131, Cl B
5.750%, 06/25/06 .......... 788 785
FNMA, Remic, Ser 1993-M1, Cl A
6.910%, 04/25/20 .......... 1,027 1,027
FNMA, Series 1997-80, Cl FK
6.106%, 02/25/24 .......... 5,000 5,003
--------
Total U.S. Agency Mortgage-
Backed Obligations
(Cost $25,267) ...... 25,396
--------
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
Face
INTERMEDIATE-TERM INCOME Amount Value
PORTFOLIO (continued) (000) (000)
- -----------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 41.5%
U.S. Treasury Bond
6.000%, 08/15/99 ......... $ 8,000 $ 8,074
U.S. Treasury Notes
7.875%, 04/15/98 ......... 2,300 2,312
7.000%, 04/15/99 ......... 5,000 5,094
7.750%, 02/15/01 ......... 11,500 12,257
6.250%, 04/30/01 ......... 3,000 3,076
7.500%, 05/15/02 ......... 2,700 2,911
6.375%, 08/15/02 ......... 10,000 10,377
7.875%, 11/15/04 ......... 3,600 4,078
5.875%, 11/15/05 ......... 3,000 3,061
6.625%, 05/15/07 ......... 1,000 1,076
--------
Total U.S. Treasury Obligations
(Cost $50,987) ..... 52,316
--------
ASSET-BACKED SECURITIES -- 2.1%
Bay View Auto Trust, Ser 1997-RA1, Cl A1,
Callable 01/01/98 @ 100
6.290%, 12/15/01 ........ 924 925
WFS Financial Owner Trust 1996-B A3
6.650%, 08/20/00 ........ 1,790 1,797
--------
Total Asset-Backed Securities
(Cost $2,714) ..... 2,722
--------
REPURCHASE AGREEMENTS -- 1.7%
Dresdner Government Securities (A)
5.53%, dated 01/30/98,
matures 02/02/98,
repurchase price
$2,164,266
(collateralized by
U.S. Treasury Note,
par value $2,135,000,
5.875%, 01/31/99:
market value $2,206,726) ... 2,163 2,163
--------
Total Repurchase Agreements
(Cost $2,163) ....... 2,163
--------
Total Investments-- 99.0%
(Cost $122,382) ..... 124,741
--------
OTHER ASSETS AND LIABILITIES, NET-- 1.0% 1,259
--------
INTERMEDIATE-TERM INCOME Value
PORTFOLIO (concluded) (000)
- ----------------------------------------------------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization --
no par value) based on
12,538,261 outstanding
shares of beneficial
interest ................... $124,528
Portfolio Shares of Class A (unlimited
authorization -- no par value) based
on 6,345 outstanding shares
of beneficial interest ..... 75
Distributions in Excess of Net
Investment Income .......... (1)
Accumulated Net Realized Loss
on Investments ............. (961)
Net Unrealized Appreciation
on Investments ............. 2,359
---------
Total Net Assets-- 100.0% ...... $126,000
=========
Net Asset Value, Offering and Redemption
Price Per Share -- Class I . $10.04
=========
Net Asset Value and Redemption
Price Per Share-- Class A .. $10.04
=========
Maximum Offering Price per Share --
Class A ($10.04 / 95.5%) .... $10.51
=========
- ----------------------------------------------------
Cl --Class
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
REMIC -- Real Estate Mortgage Investment Conduit
Ser -- Series
SLMA -- Student Loan Marketing Association
(A) Tri-Party Repurchase Agreement
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (000) (000)
- -----------------------------------------------------
MUNICIPAL BONDS -- 98.4%
MICHIGAN -- 98.4%
Alpena County, GO, AMBAC
5.450%, 06/01/01 ......... $ 250 $ 262
Anchor Bay School District, GO, MBIA
6.000%, 05/01/03 ......... 870 948
Ann Arbor, Water Supply System,
RB, MBIA
7.375%, 02/01/02 ......... 1,000 1,121
Auburn Hills Finance Authority, Tax
Allocation RB, Series A (A)
7.000%, 05/01/00 ......... 300 305
Avondale School District, GO
6.600%, 05/01/05 ......... 200 216
6.700%, 05/01/06 ......... 200 216
Big Rapids Public School District,
GO, FGIC
7.300%, 05/01/05 ......... 250 299
Calhoun County, GO, AMBAC
4.950%, 07/01/03 ......... 1,000 1,044
Central Michigan State University,
RB, FGIC
5.200%, 10/01/09 ......... 860 909
Cheboygan Area School District,
GO, MBIA
6.000%, 05/01/02 ......... 260 280
Chippewa Valley School District, GO,
Pre-refunded @ 101.50, FGIC (B)
6.200%, 05/01/01 ......... 250 270
Clarkston Community Schools, GO, FGIC
5.800%, 05/01/13 ......... 1,000 1,070
Clinton County Building Authority, GO,
Macomb County Project, Series A,
Pre-refunded @ 102, AMBAC (B)
6.400%, 11/01/01 ......... 250 275
De Witt Public Schools, GO,
Pre-refunded @ 101.5 (B)
6.600%, 05/01/01 ......... 300 327
De Witt Public Schools, GO, AMBAC
6.000%, 05/01/03 ......... 935 1,019
Dearborn Municipal Building Authority,
GO, AMBAC
7.000%, 06/01/01 ......... 300 328
7.000%, 06/01/02 ......... 475 531
7.000%, 06/01/03 ......... 505 575
Detroit Distributable State Aid,
GO, AMBAC
5.000%, 05/01/05 ......... 200 209
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (continued) (000) (000)
- ------------------------------------------------------
Detroit GO, AMBAC
5.250%, 05/01/08 ......... $ 1,000 $ 1,065
Detroit GO, Pre-refunded @ 102 (B)
8.000%, 04/01/01 ......... 1,000 1,136
Detroit School District, GO
6.250%, 05/01/12 ......... 850 914
Detroit Sewer Disposal, RB,
Pre-refunded @ 101.5 (B)
7.250%, 07/01/99 ......... 200 212
Detroit Water Supply System,
RB, FGIC
6.250%, 07/01/07 ......... 500 539
Detroit Water Supply System,
Second Lien RB, Series A, MBIA
5.100%, 07/01/07 ......... 500 531
East Lansing, Refunded GO, Series B
4.850%, 10/01/07 ......... 315 318
Ferris State University, RB, AMBAC
5.400%, 10/01/09 ......... 675 724
Flat Rock Community School District,
GO, MBIA
7.750%, 05/01/04 ......... 675 810
Flint, GO, MBIA
6.000%, 11/01/03 ......... 1,040 1,143
Fraser Public School District,
GO, AMBAC
6.550%, 05/01/99 ......... 100 103
Gobles Public Schools, GO, AMBAC
5.300%, 05/01/06 ......... 210 215
5.400%, 05/01/07 ......... 235 241
Grand Rapids Building Authority, RB
5.375%, 04/01/07 ......... 200 212
Grand Rapids Downtown
Development Authority, Tax
Allocation RB, MBIA
6.600%, 06/01/08 ......... 200 228
Grand Rapids Water Supply, RB,
FGIC, Escrowed to Maturity
6.400%, 01/01/05 ......... 1,000 1,079
Grand Valley, Michigan State
University, RB, MBIA
4.300%, 10/01/01 ......... 500 505
Grandville Public School District, GO
4.000%, 05/01/99 ......... 345 346
Haslett Public School District,
GO, MBIA
6.000%, 05/01/02 ......... 310 334
6.000%, 05/01/03 ......... 310 338
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (continued) (000) (000)
- -----------------------------------------------------
Howell Public Schools, GO, FGIC
5.000%, 05/01/08 ......... $ 1,000 $ 1,037
Ingham County, Proctor Drain
System Project, GO
7.100%, 02/01/01 ......... 180 186
Iron Mountain Finance Authority,
GO, AMBAC
5.000%, 05/01/05 ......... 250 261
Johannesburg-Lewiston Area Schools,
GO, AMBAC
6.750%, 05/01/02 ......... 280 310
6.750%, 05/01/03 ......... 320 360
6.000%, 05/01/04 ......... 365 403
Kalamazoo Hospital Finance Authority,
RB, Borgess Medical Center,
Series A, AMBAC
5.000%, 06/01/04 ......... 1,000 1,044
Kalamazoo Water Supply System
Project, RB
6.000%, 09/01/07 ......... 425 458
Kalamazoo, City School District,
GO, FGIC
4.550%, 05/01/01 ......... 1,000 1,017
Kent County, Building Authority, GO
5.000%, 12/01/06 ......... 500 525
5.100%, 12/01/07 ......... 500 527
Kent Hospital Authority, RB, Mary
Free Bed Project, Series A
6.250%, 04/01/03 ......... 250 265
Kentwood, Public School System, GO
5.900%, 05/01/04 ......... 380 413
Kentwood, Public School System, GO,
Pre-refunded @ 102 (B)
5.900%, 05/01/02 ......... 370 402
Lansing Building Authority, GO,
Escrowed to Maturity
7.100%, 06/01/02 ........ 100 112
Lansing Finance Authority, GO
6.100%, 10/01/03 ........ 250 274
Lincoln School District, GO, FGIC,
Escrowed to Maturity
5.750%, 05/01/09 ........ 900 975
Livonia Municipal Building Authority, RB
5.750%, 06/01/04 ........ 250 269
Livonia Public School District, GO
5.450%, 05/01/01 ........ 200 208
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (continued) (000) (000)
- -----------------------------------------------------
Livonia Water Supply & Wastewater
System, RB, AMBAC
5.200%, 11/01/09 ........ $ 1,000 $ 1,031
Macomb County Community College, GO
4.625%, 05/01/99 ........ 835 843
Michigan State University, RB,
Series A
6.125%, 08/15/07 ........ 1,250 1,350
Montague Public School District, GO, FSA
5.125%, 05/01/06 ........ 300 316
5.125%, 05/01/08 ........ 300 313
Northville Public Schools, GO, FGIC
5.000%, 05/01/10 ........ 500 514
Oak Park, GO, ABMAC
5.200%, 05/01/06 ........ 250 265
Oakland County, Acacia Park
Drain District, GO, MBIA
8.000%, 10/01/99 ........ 125 133
8.000%, 10/01/00 ........ 110 121
Oakland County, Birmingham
Drain District, GO
7.500%, 10/01/01 ........ 325 364
Oakland County, Birmingham
Drain District, GO, Series C
7.500%, 10/01/99 ........ 230 244
7.500%, 10/01/00 ........ 325 354
Oakland County, Bloomfield
Drain District, GO, Series C
8.000%, 10/01/98 ........ 200 206
7.500%, 10/01/99 ........ 200 211
7.500%, 10/01/00 ........ 300 326
7.500%, 10/01/01 ........ 275 307
Oakland County, Caddell Drainage
District, GO
6.300%, 11/01/99 ........ 100 103
Oakland County, Economic Development
Authority, RB, Cranbrook
Elderly Community Project
6.375%, 11/01/14 ........ 1,000 1,124
Oakland County, GO
6.500%, 11/01/05 500 524
Okemos Public School District,
GO, Series I
6.300%, 05/01/00 ....... 750 789
Pewamo Westphalia School District,
GO, FGIC
5.000%, 05/01/06 ........ 275 290
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (continued) (000) (000)
- -----------------------------------------------------
Plymouth-Canton Community School
District, GO, Series B
6.250%, 05/01/02 ........ $ 1,400 $ 1,501
Plymouth-Canton Community School
District, GO, Series C
5.900%, 05/01/02 ......... 250 268
6.200%, 05/01/05 ......... 250 273
Plymouth-Canton Community School
District, GO, Series B
6.350%, 05/01/03 ......... 300 322
Pontiac Building Authority, GO, AMBAC
6.400%, 04/01/00 ......... 110 116
Pontiac Building Authority, GO, AMBAC,
Pre-refunded @ 101 (B)
6.875%, 04/01/01 ......... 200 219
Redford Township, GO, AMBAC
6.750%, 04/01/06 ......... 200 223
Riverview Community School District, GO,
Pre-refunded @ 101.50, FGIC (B)
6.400%, 05/01/02 ......... 250 276
Rochester Community School District, RB,
Pre-refunded @ 101 (B)
7.150%, 05/01/98 ......... 200 204
Rochester Hills, GO
5.500%, 11/01/06 ......... 250 264
5.500%, 11/01/07 ......... 250 263
Rochester Michigan Comunity
School District, GO, MBIA
5.500%, 05/01/06 ......... 1,000 1,091
Romeo Community School District, GO,
Pre-refunded @ 101 (B)
6.900%, 05/01/00 ......... 100 107
Royal Oak City School District, GO,
Pre-refunded @ 101.50 (B)
6.500%, 05/01/01 ......... 230 250
Royal Oak Hospital Finance Authority, RB,
Pre-refunded @ 100 (B)
7.750%, 01/01/00 ......... 120 128
Saline Building Authority, GO, AMBAC
7.000%, 07/01/05 ......... 100 111
South Lyon School District, GO
6.100%, 05/01/00 ......... 100 105
6.500%, 05/01/05 ......... 350 381
State Building Authority, GO, Ferris State
University, Series 1,
Pre-refunded @ 101.50 (B)
6.750%, 10/01/00 ......... 250 271
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (continued) (000) (000)
- -----------------------------------------------------
State Building Authority, RB
5.000%, 04/01/01 ......... $ 500 $ 516
State Building Authority, RB, AMBAC
6.750%, 10/01/07 ......... 245 272
State Building Authority, RB,
Series I
6.400%, 10/01/04 ......... 650 710
6.500%, 10/01/05 ......... 500 547
State Building Authority, RB,
Series I, AMBAC
6.000%, 10/01/02 ......... 300 325
5.500%, 10/01/07 ......... 1,000 1,090
State Building Authority, RB,
Series II
5.900%, 10/01/99 ......... 100 103
6.000%, 10/01/00 ......... 100 105
6.500%, 10/01/05 ......... 120 131
State Building Authority, RB,
Series II, AMBAC
6.250%, 10/01/04 ......... 300 327
State Building Authority, RB,
Series II, FSA
6.200%, 10/01/02 ......... 250 272
State Hospital Authority, RB, Detroit
Medical Center, Series A
6.900%, 08/15/99 ......... 160 166
7.100%, 08/15/01 ......... 165 179
State Hospital Authority, RB,
Henry Ford Health Center,
Series A
5.100%, 11/15/07 ......... 600 627
State Hospital Finance Authority, RB,
Detroit Medical Center Project
6.250%, 08/15/13 ......... 675 725
State Hospital Finance Authority,
RB, FSA
5.500%, 06/01/08 ......... 1,400 1,515
State Hospital Finance Authority, RB,
Mclaren Group, Series A
5.000%, 10/15/04 ......... 1,000 1,024
5.200%, 10/15/06 ......... 750 772
State Hospital Finance Authority, RB,
Mclaren Group, Series A,
Escrowed to Maturity
7.200%, 09/15/00 ......... 200 216
State Hospital Finance Authority, RB,
Mercy Health Services,
Series Q, AMBAC
4.450%, 08/15/00 ......... 775 785
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (continued) (000) (000)
- -----------------------------------------------------
State Hospital Finance Authority, RB,
Sisters of Mercy Project, MBIA
4.900%, 08/15/05 .......... $1,000 $1,038
State Hospital Finance Authority, RB,
Sparrow Group, MBIA
5.200%, 11/15/07 .......... 480 510
5.300%, 11/15/08 .......... 450 481
5.400%, 11/15/09 .......... 450 483
State Housing Development Authority,
RB, Greenwood Villa Project, FSA
6.500%, 09/15/07 .......... 160 174
State Municipal Bond Authority, RB
State Revolving Fund
5.150%, 10/01/08 .......... 1,000 1,041
State Municipal Bond Authority, RB
State Revolving Fund, Series A
6.000%, 10/01/02 .......... 1,000 1,085
State Municipal Bond Authority,
RB, Series A
6.500%, 05/01/07 .......... 250 278
State Municipal Bond Authority, RB,
State Revolving Fund
5.500%, 10/01/06 .......... 810 881
State Oakwood Hospital Group, RB,
FGIC, Pre-refunded @ 102 (B)
7.000%, 07/01/00 .......... 500 544
State Power Supply System, RB, MBIA
5.800%, 11/01/05 .......... 400 441
State Public Power Agency, RB,
Belle River Project, Series A
5.400%, 01/01/01 .......... 250 260
5.200%, 01/01/04 .......... 300 315
State Public Power Agency, RB,
Campbell Project, Series A, AMBAC
5.500%, 01/01/06 .......... 500 538
State Public Power Project, RB,
Series A, AMBAC
5.000%, 01/01/03 .......... 500 519
State Sisters Mercy Health System,
RB, FSA
5.700%, 02/15/01 .......... 250 262
State St. John Hospital, RB,
Series A, AMBAC
5.650%, 05/15/03 .......... 300 322
State St. John Medical Center,
RB, AMBAC
5.000%, 05/15/04 .......... 750 782
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (continued) (000) (000)
- -----------------------------------------------------
State Strategic Fund, RB,
Ford Motor Project, Series A
7.100%, 02/01/06 .......... $ 350 $ 414
State Strategic Fund, RB,
NSF Internal
Project, Series A (A)
5.400%, 08/01/10 .......... 1,105 1,145
5.500%, 08/01/11 .......... 1,065 1,105
State Trunk Line, RB, Series A
5.625%, 10/01/03 .......... 500 537
State Trunk Line, RB, Series B-2
5.750%, 10/01/04 .......... 350 378
State Underground Storage Tank
Financial Assurance Authority,
RB, Series I, AMBAC
5.000%, 05/01/01 .......... 1,000 1,030
Traverse City Area Public Schools,
GO, Series I,
Pre-refunded @ 102 (B)
7.000%, 05/01/01 .......... 100 110
Traverse City Area Public Schools,
GO, Series I, MBIA
7.250%, 05/01/05 ........... 950 1,132
Traverse City Area Public Schools,
GO, Series II,
Pre-refunded @ 101.50 (B)
7.000%, 05/01/01 ........... 200 221
Troy City School District, GO,
Pre-refunded @ 101.5 (B)
6.000%, 05/01/01 ........... 250 268
Troy Michigan City School
District, GO
4.750%, 05/01/08 ........... 1,000 1,025
University of Michigan, RB
5.800%, 12/01/05 ........... 400 434
University of Michigan, RB,
Major Capital Projects
5.300%, 04/01/05 ........... 250 266
Utica Community Schools, GO
5.375%, 05/01/02 ........... 200 210
5.750%, 05/01/07 ........... 500 543
Walled Lake School District,
GO, MBIA
5.500%, 05/01/02 ........... 500 528
Walled Lake School District, GO,
Series II,
Pre-refunded @ 102 (B)
7.100%, 05/01/00 ........... 100 109
Warren Building Authority, RB,
Pre-refunded @ 102, FSA (B)
8.750%, 11/01/00 ........... 100 114
Warren Woods Public School System,
Pre-refunded @ 100.50 (B)
7.200%, 06/01/00 ........... 100 108
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (continued) (000) (000)
- -----------------------------------------------------
Washtenaw Community College,
GO, Series A
4.900%, 04/01/06 .......... $ 1,200 $ 1,251
Waterford Township School
District, GO
4.850%, 06/01/10 ........... 1,450 1,474
Wayne Charter County, Airport RB,
Detroit Metro Airport,
Series A, MBIA
6.400%, 12/01/01 ........... 200 217
Wayne County, Building Authority,
GO, Capital Improvements,
Series A, MBIA
5.625%, 06/01/04 ........... 1,000 1,083
Western Townships Utility Authority,
GO, FSA, Escrowed to Maturity
5.900%, 01/01/99 ........... 160 163
Wixon County, GO, AMBAC
4.750%, 05/01/11 ........... 1,000 998
Wyandotte Building Authority, RB
7.000%, 01/01/03 ........... 100 113
Wyandotte Electric Authority,
RB, MBIA
6.250%, 10/01/08 ........... 1,700 1,959
Wyandotte Finance Authority,
Tax Allocation RB, MBIA
6.100%, 06/01/02 ........... 500 541
--------
Total Michigan .......... 84,181
--------
Total Municipal Bonds
(Cost $80,434) ....... 84,181
--------
CASH EQUIVALENTS -- 0.7%
SEI Institutional Tax Free Portfolio
3.400%, ...................... 596 596
--------
Total Cash Equivalents
(Cost $596) ........... 596
--------
Total Investments-- 99.1%
(Cost $81,030) ........ 84,777
--------
OTHER ASSETS AND LIABILITIES, NET-- 0.9% 789
--------
MICHIGAN TAX FREE BOND Value
PORTFOLIO (concluded) (000)
- -----------------------------------------------------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization --
no par value) based on
8,356,859 outstanding
shares of beneficial
interest ...................... $81,808
Portfolio Shares of Class A
(unlimited authorization --
no par value) based on
958 outstanding shares
of beneficial interest ........ 8
Accumulated Net Realized Gain
on Investments ................ 3
Net Unrealized Appreciation
on Investments ................ 3,747
--------
Total Net Assets-- 100.0% ......... $85,566
========
Net Asset Value, Offering and Redemption
Price Per Share-- Class I ..... $10.24
========
Net Asset Value and Redemption
Price Per Share-- Class A ..... $10.24
========
Maximum Offering Price per Share --
Class A ($10.24 / 95.5%) ...... $10.72
========
- ----------------------------------------------------
AMBAC -- American Municipal Bond Assurance Corporation
FGIC -- Financial Guaranty Insurance Corporation
FSA -- Financial Security Assurance
GO -- General Obligation Bond
MBIA -- Municipal Bond Insurance Association
RB -- Revenue Bond
(A) Security is held in connection with a letter of
credit or standby bond purchase agreement issued
by a major commercial bank or other financial
institution.
(B) Pre-refunded Security. The pre-refunded
date is shown as the maturity date on the
Statement of Net Assets.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
Face
PRIME OBLIGATION MONEY Amount Value
MARKET PORTFOLIO (000) (000)
- -----------------------------------------------------
COMMERCIAL PAPER -- 66.6%
BANKING -- 4.5%
Nationsbank
5.670%, 03/20/98 ......... $ 3,000 $ 2,978
Svenska Handelsbankev, NY
5.750%, 03/09/98 ............. 3,000 2,983
-------
Total Banking ......... 5,961
-------
FINANCIAL SERVICES -- 50.6%
BCI Funding
5.750%, 03/05/98 ......... 3,000 2,985
Bear Stearns
5.540%, 02/09/98 ......... 4,500 4,494
Beneficial
5.580%, 02/24/98 ......... 3,000 2,989
Centric Capital
5.950%, 02/23/98 ......... 3,000 2,989
Commoloco
5.600%, 04/15/98 ......... 3,000 2,966
Enterprise Funding
5.560%, 02/27/98 ......... 4,500 4,482
Eureka Securities
5.580%, 03/16/98 ......... 4,500 4,470
Falcon Asset Securitization
5.750%, 02/23/98 ......... 3,050 3,039
Ford Motor Credit
5.450%, 04/20/98 ......... 4,065 4,017
General Electric Capital
5.580%, 04/15/98 ......... 3,000 2,966
General Electric Financial Assurance
5.450%, 04/21/98 ......... 2,500 2,470
General Motors Acceptance
5.590%, 02/04/98 ......... 3,500 3,498
General Re
5.760%, 03/27/98 ......... 3,000 2,974
Island Finance
5.900%, 02/12/98 ......... 3,675 3,668
Kitty Hawk Funding
5.750%, 03/02/98 ......... 3,000 2,986
Merrill Lynch
5.450%, 03/17/98 ......... 2,290 2,275
Mont Blanc Capital
5.580%, 02/25/98 ......... 4,500 4,483
New Center Asset Trust
5.780%, 03/13/98 ......... 3,500 3,478
Face
PRIME OBLIGATION MONEY Amount Value
MARKET PORTFOLIO (continued) (000) (000)
- -----------------------------------------------------
Prudential Funding
5.700%, 03/16/98 ......... $ 3,000 $ 2,980
Ranger Funding
5.600%, 02/06/98 ......... 500 500
Rose Funding
5.670%, 02/12/98 ......... 3,000 2,995
Unifunding
5.580%, 02/02/98 ......... 300 300
-------
Total Financial Services 68,004
-------
INDUSTRIAL -- 11.5%
Aon
5.770%, 03/18/98 ......... 3,500 3,475
Avon Capital
5.560%, 02/05/98 ......... 2,050 2,049
Chevron Transport
5.700%, 02/13/98 ......... 3,000 2,994
Colgate-Palmolive
5.700%, 03/04/98 ......... 3,500 3,483
Glaxo Wellcome PLC
5.730%, 03/16/98 ......... 3,500 3,476
-------
Total Industrial ...... 15,477
-------
Total Commercial Paper
(Cost $89,442) ..... 89,442
-------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 6.7%
FNMA (A)
5.389%, 02/25/98 ......... 9,000 9,000
-------
Total U.S. Government Agency Obligations
(Cost $9,000) ...... 9,000
-------
FLOATING RATE INSTRUMENTS -- 4.5%
Peoples Security Life (A)
5.880%, 02/01/98 ......... 3,000 3,000
Travelers Insurance (A)
5.956%, 04/01/98 ......... 3,000 3,000
-------
Total Floating Rate Instruments
(Cost $6,000) ...... 6,000
-------
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
Face
PRIME OBLIGATION MONEY Amount Value
MARKET PORTFOLIO (continued) (000) (000)
- -----------------------------------------------------
CERTIFICATES OF DEPOSIT -- 13.4%
Bank Nova Scotia
5.830%, 10/02/98 ......... $ 3,000 $ 2,997
Barclays Bank
5.840%, 03/09/98 ......... 2,500 2,499
Chase Manhattan
5.750%, 02/11/98 ......... 3,000 3,000
International Nederlanden Bank
5.840%, 03/09/98 ......... 3,000 3,000
Swiss Bank
5.690%, 01/07/99 ......... 4,000 3,998
Wilmington Trust
5.847%, 05/29/98 ......... 2,500 2,500
--------
Total Certificates of Deposit
(Cost $17,994) ..... 17,994
--------
CORPORATE BONDS -- 3.7%
Bank of America (A)
5.650%, 04/16/98 ......... 5,000 4,999
--------
Total Corporate Bonds
(Cost $4,999) ...... 4,999
--------
BANK NOTES -- 5.2%
BankBoston
5.690%, 07/06/98 ......... 4,500 4,500
Morgan Guaranty
5.955%, 06/22/98 ......... 2,500 2,500
--------
Total Bank Notes
(Cost $7,000) ...... 7,000
--------
Total Investments-- 100.1%
(Cost $134,435) .... 134,435
--------
OTHER ASSETS AND LIABILITIES, NET-- (0.1%) (77)
--------
PRIME OBLIGATION MONEY Value
MARKET PORTFOLIO (concluded) (000)
- -----------------------------------------------------
NET ASSETS:
Portfolio Shares of Class I
(unlimited authorization --
no par value) based on
127,985,719 outstanding
shares of beneficial
interest ................... $127,985
Portfolio Shares of Class A
(unlimited authorization --
no par value) based on
6,381,885 outstanding shares
of beneficial interest ..... 6,382
Accumulated Net Realized Loss
on Investments ............. (9)
--------
Total Net Assets-- 100.0% $134,358
========
Net Asset Value, Offering and Redemption
Price Per Share-- Class I $1.00
========
Net Asset Value, Offering and Redemption
Price Per Share-- Class A $1.00
========
</TABLE>
- ----------------------------------------------------
FNMA -- Federal National Mortgage Association
(A) Variable Rate Security -- The rate reported in the
Statement of Net Assets is the rate in effect on
January 31, 1998.
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
This page left intentionally blank.
14
<PAGE>
STATEMENT OF OPERATIONS (000) GOLDEN OAK FAMILY OF FUNDS
For the Year Ended January 31, 1998 (except where noted) Unaudited
<TABLE>
<CAPTION>
INTERMEDIATE-TERM MICHIGAN PRIME OBLIGATION
GROWTH VALUE INCOME TAX FREE BOND MONEY MARKET
PORTFOLIO PORTFOLIO (2) PORTFOLIO PORTFOLIO (2) PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------
Investment Income:
<S> <C> <C> <C> <C> <C>
Dividend Income ................... $ 282 $ 288 $ -- $ -- $ --
Interest Income ................... 112 27 7,746 2,551 7,837
- ---------------------------------------------------------------------------------------------------------------------
Total Investment Income ......... 394 315 7,746 2,551 7,837
- ---------------------------------------------------------------------------------------------------------------------
Expenses:
Investment Advisory Fees .......... 122 51 614 252 311
Less: Waiver of Investment
Advisory Fees ................... (1) (5) (189) (84) (277)
Investment Sub-Advisory Fees ...... 144 78 -- -- 104
Administration Fees ............... 72 35 246 101 276
Less: Waiver of
Administration Fees ............. -- -- -- -- (7)
Transfer Agent Fees ............... 30 18 44 22 48
Custodian Fees .................... 3 2 14 6 18
Professional Fees ................. 4 3 19 9 28
Registration Fees ................. 1 -- 9 -- 11
Distribution Fees(1) .............. 1 -- -- -- 101
Amortization of Deferred
Organizational Costs ............ -- 3 -- 3 --
Trustee Fees ...................... 2 1 12 2 13
Printing Expenses ................. 6 5 22 14 24
Other Expenses .................... 1 -- 7 3 4
- ---------------------------------------------------------------------------------------------------------------------
Total Expenses, Net of Waivers .. 385 191 798 328 654
- ---------------------------------------------------------------------------------------------------------------------
Net Investment Income ............. 9 124 6,948 2,223 7,183
- ---------------------------------------------------------------------------------------------------------------------
Net Realized Gain (Loss)
on Securities Sold .............. 9,392 6,415 (406) 137 8
Net Change in Unrealized
Appreciation (Depreciation)
on Investments .................. (664) (4,133) 3,080 1,943 --
- ---------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized
Gain on Investments ............. 8,728 2,282 2,674 2,080 8
- ---------------------------------------------------------------------------------------------------------------------
Increase in Net Assets Resulting
From Operations ................. $8,737 $2,406 $9,622 $4,303 $7,191
=====================================================================================================================
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) All distribution fees are incurred in the Class A Shares.
(2) Commenced operations on June 23, 1997. Reflects operations for the period June 23, 1997 to January 31, 1998.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) GOLDEN OAK FAMILY OF FUNDS
For the Periods Ended January 31, Unaudited
<TABLE>
<CAPTION>
INTERMEDIATE-TERM
GROWTH VALUE INCOME
PORTFOLIO PORTFOLIO(1) PORTFOLIO
-------------------------- --------------- -----------------------
2/1/97 TO 2/1/96 TO 6/23/97 TO 2/1/97 TO 2/1/96 TO
1/31/98 1/31/97 1/31/98 1/31/98 1/31/97
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Operations:
<S> <C> <C> <C> <C> <C>
Net Investment Income ...................... $ 9 $ 11 $ 124 $ 6,948 $ 5,917
Net Realized Gain (Loss)
on Securities Sold ....................... 9,392 2,230 6,415 (406) (45)
Net Change in Unrealized Appreciation
(Depreciation) on Investments ............ (664) 3,815 (4,133) 3,080 (3,128)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Investment Operations ............... 8,737 6,056 2,406 9,622 2,744
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions:
Net Investment Income
Class I .................................. -- (15) (100) (6,945) (5,911)
Class A .................................. -- -- -- (4) (6)
Realized Net Gains
Class I .................................. (7,682) (82) (4,168) -- --
Class A .................................. (63) (1) (10) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Distributions .......................... (7,745) (98) (4,278) (6,949) (5,917)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Class I:
Proceeds from Shares Issued ................ 10,958 8,771 10,911 31,561 27,079
Value from Shares Issued in Connection with
Acquisition of Common Trust Fund Assets . -- -- 26,599 -- --
Reinvestment of Cash Distributions ......... 2 -- 8 1 --
Cost of Shares Redeemed .................... (8,688) (6,628) (4,733) (24,986) (11,494)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Class I Share Transactions ............. 2,272 2,143 32,785 6,576 15,585
- ------------------------------------------------------------------------------------------------------------------------------------
Class A:
Proceeds from Shares Issued ................ 43 150 53 2 15
Reinvestment of Cash Distributions ......... 63 1 7 3 5
Cost of Shares Redeemed .................... (22) (21) -- (27) (139)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Class A Share Transactions ............. 84 130 60 (22) (119)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Capital Share Transactions ................ 2,356 2,273 32,845 6,554 15,466
Total Increase (Decrease) in Net Assets ...... 3,348 8,231 30,973 9,227 12,293
Net Assets:
Beginning of Period ........................ 33,199 24,968 -- 116,773 104,480
- ------------------------------------------------------------------------------------------------------------------------------------
End of Period .............................. $36,547 $33,199 $30,973 $126,000 $116,773
====================================================================================================================================
Shares Issued and Redeemed
Class I:
Shares Issued .............................. 857 790 1,109 3,195 2,757
Shares Issued in Connection with
Acquisition of Common Trust Fund Assets .. -- -- 2,660 -- --
Shares Issued in Lieu of Cash Distributions -- -- 1 -- --
Shares Redeemed ............................ (600) (601) (455) (2,527) (1,162)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Class I Share Transactions ............. 257 189 3,315 668 1,595
- ------------------------------------------------------------------------------------------------------------------------------------
Class A:
Shares Issued .............................. 3 1 5 -- 1
Shares Issued in Lieu of Cash Distributions 6 -- 1 -- --
Shares Redeemed ............................ (2) (2) -- (3) (14)
- ------------------------------------------------------------------------------------------------------------------------------------
Total Class A Share Transactions ............. 7 (1) 6 (3) (13)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Capital Shares ........ 264 188 3,321 665 1,582
====================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
MICHIGAN PRIME OBLIGATION
TAX FREE BOND MONEY MARKET
PORTFOLIO(1) PORTFOLIO
---------------- -----------------------
6/23/97 TO 2/1/97 TO 2/1/96 TO
1/31/98 1/31/98 1/31/97
- --------------------------------------------------------------------------------------------------------
Investment Operations:
<S> <C> <C> <C>
Net Investment Income .............................. $ 2,223 $ 7,183 $ 8,467
Net Realized Gain (Loss)
on Securities Sold ............................... 137 8 (11)
Net Change in Unrealized Appreciation
(Depreciation) on Investments .................... 1,943 -- --
- --------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting
from Investment Operations ....................... 4,303 7,191 8,456
- --------------------------------------------------------------------------------------------------------
Distributions:
Net Investment Income
Class I .......................................... (2,222) (5,163) (5,202)
Class A .......................................... (1) (2,020) (3,265)
Realized Net Gains
Class I .......................................... (134) -- --
Class A .......................................... -- -- --
- --------------------------------------------------------------------------------------------------------
Total Distributions .................................. (2,357) (7,183) (8,467)
- --------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Class I:
Proceeds from Shares Issued ........................ 13,619 220,104 202,332
Value from Shares Issued in Connection with
Acquisition of Common Trust Fund Assets ......... 77,580 -- --
Reinvestment of Cash Distributions ................. -- 4 6
Cost of Shares Redeemed ............................ (7,587) (186,643) (215,233)
- --------------------------------------------------------------------------------------------------------
Total Class I Share Transactions ..................... 83,612 33,465 (12,895)
- --------------------------------------------------------------------------------------------------------
Class A:
Proceeds from Shares Issued ........................ 8 214,687 498,815
Reinvestment of Cash Distributions ................. -- 274 227
Cost of Shares Redeemed ............................ -- (280,270) (502,644)
- --------------------------------------------------------------------------------------------------------
Total Class A Share Transactions ..................... 8 (65,309) (3,602)
- --------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From
Capital Share Transactions ........................ 83,620 (31,844) (16,497)
Total Increase (Decrease) in Net Assets .............. 85,566 (31,836) (16,508)
Net Assets:
Beginning of Period ................................ -- 166,194 182,702
- --------------------------------------------------------------------------------------------------------
End of Period ...................................... $85,566 $134,358 $166,194
========================================================================================================
Shares Issued and Redeemed
Class I:
Shares Issued ...................................... 1,349 220,104 202,332
Shares Issued in Connection with
Acquisition of Common Trust Fund Assets .......... 7,758 -- --
Shares Issued in Lieu of Cash Distributions ........ -- 4 6
Shares Redeemed .................................... (750) (186,643) (215,233)
- --------------------------------------------------------------------------------------------------------
Total Class I Share Transactions ..................... 8,357 33,465 (12,895)
- --------------------------------------------------------------------------------------------------------
Class A:
Shares Issued ...................................... 1 214,687 498,815
Shares Issued in Lieu of Cash Distributions ........ -- 274 227
Shares Redeemed .................................... -- (280,270) (502,644)
- --------------------------------------------------------------------------------------------------------
Total Class A Share Transactions ..................... 1 (65,309) (3,602)
- --------------------------------------------------------------------------------------------------------
Increase (Decrease) in Capital Shares ................ 8,358 (31,844) (16,497)
- --------------------------------------------------------------------------------------------------------
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
(1) Commenced operations on June 23, 1997
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 & 17
<PAGE>
FINANCIAL HIGHLIGHTS GOLDEN OAK FAMILY OF FUNDS
For a Share Outstanding Throughout the Period
For the Periods Ended January 31, Unaudited
<TABLE>
<CAPTION>
RATIO OF
NET REALIZED DISTRIBUTIONS NET NET RATIO OF EXPENSES
ASSET AND ------------------ ASSET ASSETS RATIO OF NET TO AVERAGE
VALUE NET UNREALIZED NET NET VALUE END EXPENSES INCOME NET ASSETS
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT REALIZED END TOTAL OF PERIOD TO AVERAGE TO AVERAGE (EXCLUDING
OF PERIOD INCOME ON INVESTMENTS INCOME GAIN OF PERIOD RETURN+ (000) NET ASSETS NET ASSETS WAIVERS)
- ------------------------------------------------------------------------------------------------------------------------------------
GROWTH PORTFOLIO CLASS I
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $12.66 -- 3.12 -- (3.12) $12.66 25.85% $ 36,240 1.07% 0.03% 1.08%
1997 10.26 -- 2.44 (0.01) (0.03) 12.66 23.79 32,973 1.10 0.04 1.11
1996 10.00 0.07 1.74 (0.07) (1.48) 10.26 18.81 24,775 1.10 0.62 1.17
1995 10.82 0.08 (0.64) (0.08) (0.18) 10.00 (5.24) 32,931 1.10 0.74 1.24
1994(1) 10.00 0.08 0.82 (0.08) -- 10.82 9.08 24,955 1.10 0.77 1.21
GROWTH PORTFOLIO CLASS A
1998 $12.57 (0.01) 3.07 -- (3.12) $12.51 25.56%$ 307 1.32% (0.21)% 1.32%
1997 10.20 (0.03) 2.43 -- (0.03) 12.57 23.56 226 1.35 (0.20) 1.36
1996 9.96 0.04 1.72 (0.04) (1.48) 10.20 18.43 193 1.35 0.30 1.42
1995 10.81 0.05 (0.67) (0.05) (0.18) 9.96 (5.76) 125 1.35 0.49 1.49
1994(3) 9.54 0.02 1.27 (0.02) -- 10.81 22.00* 173 1.35* 0.33* 1.45*
VALUE PORTFOLIO CLASS I
1998(4)$10.00 0.04 0.86 (0.04) (1.53)$ 9.33 9.15% $ 30,922 1.10% 0.72% 1.13%
VALUE PORTFOLIO CLASS A
1998(4)$10.00 0.02 0.86 (0.03) (1.53)$ 9.32 8.97% $ 52 1.35% 0.31% 1.36%
INTERMEDIATE-TERM INCOME PORTFOLIO CLASS I
1998 $ 9.83 0.56 0.21 (0.56) -- $10.04 8.07% $125,936 0.65% 5.66% 0.80%
1997 10.15 0.54 (0.32) (0.54) -- 9.83 2.31 116,689 0.65 5.48 0.80
1996 9.52 0.56 0.63 (0.56) -- 10.15 12.83 104,270 0.65 5.68 0.84
1995 10.19 0.50 (0.67) (0.50) -- 9.52 (1.61) 80,064 0.65 5.21 0.86
1994(1) 10.00 0.46 0.23 (0.46) (0.04) 10.19 6.99 64,329 0.65 4.47 0.83
INTERMEDIATE-TERM INCOME PORTFOLIO CLASS A
1998 $ 9.83 0.53 0.21 (0.53) -- $10.04 7.78% $ 64 0.90% 5.40% 1.06%
1997 10.15 0.52 (0.32) (0.52) -- 9.83 2.05 84 0.90 5.20 1.05
1996 9.52 0.54 0.63 (0.54) -- 10.15 12.54 210 0.90 5.49 1.09
1995 10.19 0.48 (0.67) (0.48) -- 9.52 (1.85) 314 0.90 4.96 1.11
1994(3) 10.12 0.31 0.11 (0.31) (0.04) 10.19 6.72* 365 0.90* 4.27* 1.08*
MICHIGAN TAX FREE BOND PORTFOLIO CLASS I
1998(4)$10.00 0.27 0.26 (0.27) (0.02) $10.24 5.35% $ 85,556 0.65% 4.41% 0.82%
MICHIGAN TAX FREE BOND PORTFOLIO CLASS A
1998(4)$10.00 0.27 0.26 (0.27) (0.02) $10.24 5.31% $ 10 0.90% 4.15% 1.05%
PRIME OBLIGATION MONEY MARKET PORTFOLIO CLASS I
1998 $ 1.00 0.05 -- (0.05) -- $ 1.00 5.41% $127,977 0.40% 5.29% 0.59%
1997 1.00 0.05 -- (0.05) -- 1.00 5.21 94,508 0.40 5.08 0.68
1996 1.00 0.06 -- (0.06) -- 1.00 5.74 107,409 0.40 5.60 0.70
1995 1.00 0.04 -- (0.04) -- 1.00 4.21 109,076 0.40 4.20 0.68
1994(1) 1.00 0.03 -- (0.03) -- 1.00 2.87 117,188 0.40 2.83 0.67
PRIME OBLIGATION MONEY MARKET PORTFOLIO CLASS A
1998 $ 1.00 0.05 -- (0.05) -- $ 1.00 5.15% $ 6,381 0.65% 4.99% 0.90%
1997 1.00 0.05 -- (0.05) -- 1.00 4.95 71,686 0.65 4.83 0.93
1996 1.00 0.05 -- (0.05) -- 1.00 5.47 75,293 0.65 5.31 0.95
1995 1.00 0.04 -- (0.04) -- 1.00 3.95 21,018 0.65 3.95 0.93
1994(2) 1.00 -- -- -- -- 1.00 2.90* 104 0.65* 2.68* 0.93*
====================================================================================================================================
RATIO OF
NET INCOME
TO AVERAGE
NET ASSETS PORTFOLIO AVERAGE
(EXCLUDING TURNOVER COMMISSION
WAIVERS) RATE RATE++
- -------------------------------------------
GROWTH PORTFOLIO CLASS I
1998 0.02% 131.54% $0.0600
1997 0.03 130.69 0.0600
1996 0.55 189.48 N/A
1995 0.60 84.00 N/A
1994(1) 0.66 68.91 N/A
GROWTH PORTFOLIO CLASS A
1998 (0.21)% 131.54% $0.0600
1997 (0.21) 130.69 0.0600
1996 0.23 189.48 N/A
1995 0.35 84.00 N/A
1994(3) 0.23* 68.91 N/A
VALUE PORTFOLIO CLASS I
1998(4) 0.69% 90.97% $0.0421
VALUE PORTFOLIO CLASS A
1998(4) 0.30% 90.97% $0.0421
INTERMEDIATE-TERM INCOME PORTFOLIO CLASS I
1998 5.51% 60.78% N/A
1997 5.33 34.67 N/A
1996 5.49 121.47 N/A
1995 5.00 141.51 N/A
1994(1) 4.29 71.73 N/A
INTERMEDIATE-TERM INCOME PORTFOLIO CLASS A
1998 5.24% 60.78% N/A
1997 5.05 34.67 N/A
1996 5.30 121.47 N/A
1995 4.75 141.51 N/A
1994(3) 4.09* 71.73 N/A
MICHIGAN TAX FREE BOND PORTFOLIO CLASS I
1998(4) 4.24% 9.77% N/A
MICHIGAN TAX FREE BOND PORTFOLIO CLASS A
1998(4) 4.00% 9.77% N/A
PRIME OBLIGATION MONEY MARKET PORTFOLIO CLASS I
1998 5.10% N/A N/A
1997 4.80 N/A N/A
1996 5.30 N/A N/A
1995 3.92 N/A N/A
1994(1) 2.56 N/A N/A
PRIME OBLIGATION MONEY MARKET PORTFOLIO CLASS A
1998 4.74% N/A N/A
1997 4.55 N/A N/A
1996 5.01 N/A N/A
1995 3.67 N/A N/A
1994(2) 2.40* N/A N/A
===========================================
Amounts designated as "--" are either $0 or have been rounded to $0.
* Annualized
+ Total return does not reflect the sales charge on Class A shares.
++ Average commission rate paid per share for security purchases and sales
during the period. Presentation of the rate is only required for fiscal
years beginning after September 1, 1995.
(1) Commenced operations February 1, 1993.
(2) Commenced operations January 20, 1994.
(3) Commenced operations June 18, 1993.
(4) Commenced operations June 23, 1997.
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
1. Organization:
THE GOLDEN OAK FAMILY OF FUNDS are separate investment portfolios of The Arbor
Fund (the "Trust"). The Trust was organized as a Massachusetts business trust
under a Declaration of Trust dated July 24, 1992 and had no operations through
February 1, 1993 other than those related to organizational matters and the sale
of initial shares to SEI Fund Resources (the "Administrator") on October 9,
1992. SEI Investments Management Corporation, a wholly-owned subsidiary of SEI
Investments Company, is the owner of all beneficial interest in the
Administrator. The Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act") as an open-end management company. These financial
statements relate to the Trust's Golden Oak Growth Portfolio, Golden Oak Value
Portfolio, ("the Equity Portfolios"), Golden Oak Intermediate-Term Income
Portfolio, Golden Oak Michigan Tax Free Bond Portfolio, ("the Bond Portfolios"),
and Golden Oak Prime Obligation Money Market Portfolio ("the Money Market
Portfolio"), (together, the "Portfolios"). On August 11, 1997 the Board of
Directors for the Arbor Fund approved a name change for the Class A shares of
each Portfolio to the Institutional (Class I) shares, and the Class B shares to
the Class A shares. The Portfolios' prospectus provides a description of each
Portfolio's investment objectives, policies and strategies. The assets of each
Portfolio are segregated, and a shareholder's interest is limited to the
Portfolio in which shares are held.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies followed by
the Portfolios.
SECURITY VALUATION -- Investments in equity securities which are traded on a
national securities exchange (or reported on the NASDAQ national market system)
are stated at the last quoted sales price if readily available for such equity
securities on each business day; other equity securities traded in the
over-the-counter market and listed equity securities for which no sale was
reported on that date are stated at the last quoted bid price. Debt obligations
exceeding sixty days to maturity for which market quotations are readily
available are valued at the most recently quoted bid price. Debt obligations
with sixty days or less remaining until maturity are valued at their amortized
cost. Restricted securities for which quotations are not readily available are
valued at fair value using methods determined in good faith under general
trustee supervision.
Investment securities held by the Money Market Portfolio are stated at amortized
cost which approximates market value. Under the amortized cost method, any
discount or premium is amortized ratably to the maturity of the security and is
included in interest income.
FEDERAL INCOME TAXES -- It is each Portfolio's intention to continue to qualify
as a regulated investment company for Federal income tax purposes by complying
with the appropriate provisions of the Internal Revenue Code of 1986, as
amended. Accordingly, no provision for Federal income taxes is required in the
financial statements.
SECURITY TRANSACTIONS AND RELATED INCOME --Security transactions are accounted
for on the date the security is purchased or sold (trade date). Dividend income
is recognized on the ex-dividend date, and interest income is accrued as earned.
Costs used in determining realized gains and losses on sales of investment
securities are those of the specific securities sold. Purchase discounts and
premiums on securities held by the Bond Portfolios are accreted and amortized to
maturity using the effective interest method.
REPURCHASE AGREEMENTS -- The Portfolios invest in tri-party repurchase
agreements. It is the Trust's policy that securities held as collateral for
tri-party repurchase agreements are maintained in a
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
segregated account by the broker's custodian bank until maturity of the
repurchase agreement. Provisions of the repurchase agreements require that the
market value of the collateral, including accrued interest thereon, is
sufficient in the event of default of the counterparty.
If the counterparty defaults and the value of the collateral declines, or if the
counterparty enters an insolvency proceeding, realization and/or retention of
the collateral by the Portfolios may be delayed or limited.
NET ASSET VALUE PER SHARE -- The net asset value per share of each Portfolio is
calculated each business day. In general, it is computed by dividing the assets
of each Portfolio, less its liabilities, by the number of outstanding shares of
the Portfolio.
CLASSES OF SHARES -- Class specific expenses are borne by that class. Income,
expenses and realized and unrealized gains and losses are allocated to the
respective classes on the basis of their relative daily net assets.
EXPENSES -- Expenses that are directly related to one of the Portfolios are
charged directly to that Portfolio. Other operating expenses of the Trust are
prorated to the Portfolios on the basis of relative net assets. Class A bears a
class specific 12b-1 fee.
OTHER -- Distributions from net investment income are declared and paid
quarterly to Shareholders of the Equity Portfolios. Distributions from net
investment income for the Money Market Portfolio and the Bond Portfolios are
declared daily and paid to Shareholders on a monthly basis. Any net realized
capital gains on sales of securities are distributed to Shareholders at least
annually.
3. Administration and Distribution Agreements:
The Trust and the Administrator have entered into an Administration Agreement
(the "Administration Agreement"). Under terms of the Administration Agreement,
the Administrator is entitled to a fee that is calculated daily and paid monthly
at an annual rate of .20% of the average daily net assets of each of the
Portfolios. There is a minimum annual administration fee of $100,000 for each of
the Golden Oak Michigan Tax Free Bond Portfolio and the Golden Oak Value
Portfolio and any other new Golden Oak portfolios which the Trust may register.
The Administrator serves as the shareholder servicing agent for the Portfolios.
Compensation for this service is paid under the Administration Agreement.
The Trust and SEI Investments Distribution Co. (the "Distributor"), a
wholly-owned subsidiary of SEI Investments Company, have entered into a
Distribution Agreement (the "Distribution Agreement"). The Distributor receives
no fees for its distribution services under the Distribution Agreement. The
Trustees have adopted a Distribution Plan pursuant to Rule 12b-1 of the 1940 Act
(the "Plan") on behalf of the Class A shares. The Plan provides for payment to
the Distributor at an annual rate of .25% of the average daily net assets for
the Class A shares of each Portfolio.
4. Investment Advisory Agreement:
The Trust has entered into an Investment Advisory Agreement with Citizens Bank
(the "Adviser") dated January 28, 1993 under which the Adviser receives an
annual fee equal to .34% of the average daily net assets of the Growth
Portfolio, .29% of the first $50 million, .39% of the next $50 million, and .34%
of any amount above $100 million of the average daily net assets of the Value
Portfolio, .50% of the average daily net assets of the Bond Portfolios and .225%
of the first $500 million, and .28% of any amount above $500 million of the
average daily net assets of the Money Market Portfolio. The Adviser has
voluntarily agreed to waive all or a portion of its fees (and to reimburse each
Portfolio's expenses) in order to limit operating expenses of the Class I and
Class A shares (exclusive of distribution expenses) to not more
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
than 1.10% of the average daily net assets of the Equity Portfolios, .65% of the
average daily net assets of the Bond Portfolios and .40% of the average daily
net assets of the Money Market Portfolio. Fee waivers and expense reimbursements
are voluntary and may be terminated at any time.
Wellington Management Company, LLP serves as the investment sub-adviser for the
Money Market Portfolio pursuant to a sub-advisory agreement dated January 28,
1993 with the Trust and the Adviser and receives an annual fee, computed daily
and paid monthly, equal to .075% of the first $500 million, and .02% of any
amount above $500 million of the average daily net assets of the Portfolio.
Nicholas-Applegate Capital Management serves as the investment sub-adviser for
the Growth Portfolio pursuant to a sub-advisory agreement dated August 31, 1995
with the Trust and the Adviser and receives an annual fee, computed daily and
paid monthly, equal to .40% of the average daily net assets of the Portfolio.
Systematic Financial Management, L.P. serves as the investment sub-adviser for
the Value Portfolio pursuant to a sub-advisory agreement dated June 23, 1997
with the Trust and the Adviser and receives an annual fee, computed daily and
paid monthly, equal to .45% of the first $50 million, .35% of the next $50
million, and .40% of any amount above $100 million of the average daily net
assets of the Portfolio.
5. Organizational Costs and Transactions with Affiliates:
Organizational costs have been capitalized by the Trust and are being amortized
over sixty months beginning with the commencement of operations. In the event
any of the initial shares of the Trust are redeemed by any holder thereof during
the period that the Trust is amortizing its organizational costs, the redemption
proceeds payable to the holder thereof by the Trust will be reduced by the
unamortized organizational costs in the same ratio as the number of initial
shares being redeemed bears to the number of initial shares outstanding at the
time of redemption.
Certain officers and a trustee of the Trust are also officers of the
Administrator and/or Distributor. Such officers and trustee are not compensated
by the Trust for serving in their respective roles.
6. Investment Transactions:
The cost of security purchases and the proceeds from the sale of securities,
other than short-term investments during the period ended January 31, 1998, were
as follows:
<TABLE>
<CAPTION>
INTERMEDIATE- MICHIGAN
TERM TAX-FREE
GROWTH VALUE INCOME BOND
(000) (000) (000) (000)
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases:
U.S. Government $ -- $ -- $39,474 $ --
Other ........ 44,254 26,796 26,412 16,811
Sales:
U.S. Government $ -- $ -- $53,142 $ --
Other ........ 50,220 25,316 13,982 7,823
</TABLE>
At January 31, 1998, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes were not materially
different from amounts for financial reporting purposes. The aggregate gross
unrealized appreciation and depreciation on investment securities at January 31,
1998 for the Equity and Bond Portfolios are as follows:
<TABLE>
<CAPTION>
INTERMEDIATE- MICHIGAN
TERM TAX-FREE
GROWTH VALUE INCOME BOND
(000) (000) (000) (000)
- ---------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggregate Gross
Unrealized
Appreciation $6,596 $9,040 $2,455 $3,749
Aggregate Gross
Unrealized
Depreciation (556) (457) (96) (2)
------ ------ ------ ------
Net Unrealized
Appreciation $6,040 $8,583 $2,359 $3,747
====== ====== ====== ======
</TABLE>
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998 Unaudited
7. Concentration of Credit Risk:
The Money Market Portfolio invests primarily in money market instruments
maturing in 397 days or less whose ratings are within the two highest ratings
categories assigned by a nationally recognized statistical rating organization
or, if not rated, are believed by the Sub-Adviser to be of comparable quality.
The Bond Portfolios invest primarily in marketable debt instruments. The market
value of these investments will change in response to interest rate changes and
other factors. During periods of falling interest rates, the values of debt
securities generally rise. Conversely, during periods of rising interest rates
the values of such securities generally decline. The ability of the issuers of
the securities held by these Portfolios to meet their obligations may be
affected by economic and political developments in a specific industry, state or
region. Changes by recognized rating organizations in the ratings of any debt
security and in the ability of an issuer to make payments of interest and
principal may also affect the value of these investments.
8. Common Trust Fund Conversions:
On June 23, 1997, certain Common Trust Funds of Citizens Bank and its affiliates
were converted into the Golden Oak Family of Funds. The Funds that were involved
in the conversion were as follows:
COMMON TRUST FUND GOLDEN OAK PORTFOLIO
- -----------------------------------------------
Tax Exempt Bond Fund Michigan Tax Free Bond
Portfolio
Value Equity Fund Value Portfolio
The assets which consisted of securities and related receivables, were converted
on a tax-free basis. The number of shares issued for each Fund and the net
assets (including unrealized appreciation) of each fund immediately before the
conversion were as follows:
<TABLE>
<CAPTION>
COMMON NET UNREALIZED GOLDEN OAK
TRUST FUND ASSETS APPRECIATION SHARES ISSUED
- ----------------------------------------------------------
<S> <C> <C> <C>
Tax Exempt
Bond Fund $77,580,483 $ 1,803,730 7,758,048
Value Equity
Fund 26,599,230 12,716,514 2,659,923
</TABLE>
9. Consents of Sole Shareholder:
On June 20, 1997, the sole shareholder of the Golden Oak Michigan Tax Free Bond
Portfolio and Golden Oak Value Portfolio (the "Portfolios") approved the
following appointments: SEI Fund Resources as administrator of the Portfolios,
Citizens Bank as investment adviser to the assets of the Portfolios, SEI
Investments Distribution Co. as distributor of the shares of the Portfolios,
Price Waterhouse LLP as independent public accountants of the Portfolios and,
for the Golden Oak Value Portfolio, Systematic Financial Management, L.P. as
sub-adviser to the assets of that Portfolio.
22
