The Arbor Fund
Annual Report
------------------------------
AS OF JANUARY 31, 1998
[LOGO OMITTED]
Golden Oak
Family of Funds
ADVISED BY
CITIZENS BANK
<PAGE>
TABLE OF CONTENTS
Letter to Shareholders ....................................... 2
Managers' Discussion of Fund Performance ..................... 4
Report of Independent Accountants ............................12
Statements of Net Assets .....................................13
Statement of Operations ......................................27
Statement of Changes in Net Assets ...........................28
Financial Highlights .........................................30
Notes to Financial Statements ................................31
Notice to Shareholders .......................................36
<PAGE>
Dear Shareholder:
The "Golden Age" of securities continued in 1997. Although fears of rising
interest rates and softening corporate profit growth rates depressed stock
prices between mid-March and mid-April, the bull market resumed when those
worries proved groundless.
Stocks briefly headed lower again in October amid growing anxiety that the
crisis in Southeast Asian countries which was melting securities values would
soon infect our markets. Once again, the reality of a strong U.S. economy and
the "safe haven" image of our Treasury securities market helped to calm
investors and restore the consensus opinion that U.S. securities prices offer
good, if not great value.
As the Golden Oak Funds begin their sixth year, enthusiasm over the seemingly
endless economic expansion and benign inflation is somewhat tempered by the
uncertain impact of the Asian crisis on our economy. Among the positive signs:
[BULLET] productivity continues to trend upward
[BULLET] the federal budget should produce a surplus
[BULLET] falling import prices stimulate competition and keep inflation low
[BULLET] disposable income continues to grow steadily
[BULLET] low interest rates reinforce the housing market
A nagging concern that won't go away, however, is the expectation that reduced
foreign demand for our goods and services, stiffer competition from imported
goods, and rising labor costs will combine to hurt stock prices. A likely
pattern for the equities market is a series of "mini-cycles" around a relatively
flat trend as the outlook alternately brightens and dims.
At the same time, it is hard to find reasons to dislike bonds. With yields well
above the inflation rate and good demand from foreign investors whose domestic
rates are mostly lower than ours, U.S. interest rates clearly have room to fall.
Smaller issues of new Treasury securities and the possibility that the Federal
Reserve will ease monetary policy later this year just add more weight to the
bullish case for bonds.
So what should a prudent investor do? Our advice remains the same: structure
your investment portfolio to fit your circumstances and your long-run objectives
and "stay the course." Resist the urge to chase "hot" investments which so often
results in buying high and selling low. The global economy is expanding, free
trade between countries is gradually becoming a reality, and the U.S. is the
major "economic engine" for the world. Over time, this combination of factors
will continue to reward patient investors.
2
<PAGE>
An exciting development in 1997 for the Golden Oak family was the introduction
of two new fund styles. The Michigan Tax Free Bond Portfolio will especially
benefit in-state residents by providing a monthly stream of double-tax-free
interest income. The portfolio is managed by Richard C. Cross, a Vice President
in the Trust Investment Department at Citizens Bank.
The Value Portfolio was also offered in 1997. We are pleased to be associated
with Systematic Financial Management, L.P., who provides investment sub-advisory
services to the portfolio. Gyanendre K. (Joe) Joshi and his team have a proven
record of consistent, superior performance in the large-cap value equity style.
Additionally, you should know that the Golden Oak Growth Portfolio was enhanced
by adding risk control features in mid-1997. The portfolio's performance has
already been favorably impacted by this major improvement.
We are confident that the five distinct investment styles in the Golden Oak
family will meet your financial needs. We appreciate the trust and confidence
which your investment represents, and we pledge to always work for your best
interests.
Sincerely,
/S/Signature
Dana A. Czmer
Senior Vice President & Trust Officer
Citizens Bank
3
<PAGE>
MANAGERS' DISCUSSION OF FUND PERFORMANCE
Fiscal Year Ended January 31, 1998
GOLDEN OAK GROWTH PORTFOLIO
The last fiscal year was a transition period for the Golden Oak Growth
Portfolio. The strategy initially employed an equal weighted securities
purchased methodology regardless of their weighting within the Russell 1000
Growth Index. This approach led to significant structural differences between
the Portfolio and the Index. As might be expected, the structural differences
led to return deviations, both on the up and down sides, between the Portfolio
and the Index.
Early in 1997 discussions were held regarding the merits of establishing risk
controls on the Portfolio with the intent of minimizing these structural
differences. Prior to, and independent of these discussions, the sub-adviser had
conducted back tests of a risk controlled structure covering an eight year
period. A number of options with varying degrees of "away from the market" risks
were discussed with the Adviser. An option was agreed upon which showed
virtually the same value added return with roughly half the standard deviation
of returns versus the Index. The implementation process began in the second
quarter of 1997.
A number of factors contributed to, and detracted from the value added return
the Portfolio had versus the Index during the fiscal year. Prior to the
implementation of the risk controlled investment process the weighted
capitalization of the Portfolio was 22.3% of the Index. As larger capitalization
issues dominated returns early in the period the Portfolio lagged, losing
roughly 450 basis points to the Index for the three months ended April 30th. At
the same time stocks with strong growth characteristics (high beta, high
earnings growth rates, low dividend yields, etc.) lagged the overall market.
From May through September the market rally broadened to include issues with
lower capitalizations, and stocks with strong growth characteristics
outperformed. During this five month stretch, the Portfolio outperformed the
Index by 1160 basis points. With the onset of the "Asian Flu" in October the
market reversed again, stocks with the high growth characteristics lagging.
During the four month period ending in January the Portfolio lagged the Index by
roughly 300 basis points.
Four sectors dominate the Russell 1000 Growth Index, accounting for about 74% of
total assets during the year. The four are Health at 19.2%, Producers/
Manufacturers at 11.1%, Technology at 25.7%, and Consumer Non-Durables at 18%.
The Portfolio had 62% of its assets in the four, the dominant group being
technology at 27.7% of assets. While technology was not a good place to be, (up
13% in the Index) the Portfolio's results were about 10% higher than the
market's. The Portfolio also outperformed the market in both healthcare and
producers/manufacturers. Much of this value added return was offset by
relatively poor results in the consumer non durable group (-9.0% versus the
Index at +19.7%).
As we go forward the structural differences between the Portfolio and the Index
have been reduced with the implementation of the risk controlled process. Where
the weighted capitalization of the fund was 22% that of the Index a year ago it
is currently at 70%. Future value added returns will be more dependent on the
manager's ability to pick stocks than the vagaries of which capitalization
groups the markets will reward.
4
<PAGE>
MANAGERS' DISCUSSION OF FUND PERFORMANCE
Fiscal Year Ended January 31, 1998
- ------------------------ INVESTMENT PERFORMANCE ANALYSIS --------------------
ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR INCEPTION
RETURN(1) RETURN(1) TO DATE(1)
- -----------------------------------------------------------------------------
CLASS I 25.85% 22.78% 13.86%
- -----------------------------------------------------------------------------
CLASS A 25.56% 22.48% 15.75%
- -----------------------------------------------------------------------------
CLASS A, WITH LOAD(2) 18.31% 20.08% 14.28%
- -----------------------------------------------------------------------------
Comparison of change in the value of a $10,000
Investment in the Golden Oak Growth Portfolio, Class I,
versus the Frank Russell 1000 Growth Index
[LINE GRAPH OMITTED--PLOT POINTS AS FOLLOWS]
Golden Oak Growth Frank Russell
Portfolio, Class I 1000 Growth Index
Feb-93 $10,000 $10,000
Jan 94 11,048 10,820
Jan 95 10,469 11,089
Jan 96 12,439 15,393
Jan 97 15,398 19,625
Jan 98 19,378 24,645
Comparison of change in the value of a $10,000
Investment in the Golden Oak Growth Portfolio, Class A,
versus the Frank Russell 1000 Growth Index
[LINE GRAPH OMITTED--PLOT POINTS AS FOLLOWS]
Golden Oak Growth Frank Russell
Portfolio, Class A 1000 Growth Index
Jun 93 $ 9,425 $10,000
Jan 94 10,519 10,783
Jan 95 9,913 11,050
Jan 96 11,740 15,340
Jan 97 14,506 19,557
Jan 98 18,213 24,560
1FOR THE PERIOD ENDED JANUARY 31, 1998. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. INDIVIDUAL CLASS A SHARES WERE OFFERED
BEGINNING JUNE 18, 1993. CLASS I SHARES WERE OFFERED BEGINNING
FEBRUARY 1, 1993.
2PERFORMANCE OF THE CLASS A SHARES REFLECTS THE MAXIMUM FRONT END SALES CHARGE
OF 5.75%.
5
<PAGE>
MANAGERS' DISCUSSION OF FUND PERFORMANCE
Fiscal Year Ended January 31, 1998
GOLDEN OAK VALUE PORTFOLIO
The Golden Oak Value Portfolio has been managed by Systematic Financial
Management, L.P. as sub-adviser since its inception on June 23, 1997. Since that
date, the equity markets have, on balance, maintained an upward bias, albeit
with some dramatic surprises, most notably during October of 1997. The third
quarter was highlighted by outstanding returns in energy, technology,
transportation and financial service sectors. The Value Portfolio gave back some
of these gains during October, as problems originating with the Asian economies
produced negative returns in some sectors, most conspicuously technology and
oil-related stocks. A relatively short period of pessimism toward equities in
the fourth quarter punished the prices of many stocks which had risen
substantially during the year.
The Golden Oak Value Portfolio is currently overweighted in technology,
transportation, finance, and consumer cyclicals; it is underweighted in consumer
staples, health care, and utilities. These weightings are a by-product of our
process of applying fundamental analysis on a stock-by-stock basis, and
selecting companies satisfying our fundamental value and timeliness disciplines.
Valuations on portfolio holdings are, as always, significantly discounted to the
market by ratios of price/forward earnings, price/cash flow, and price/sales.
6
<PAGE>
MANAGERS' DISCUSSION OF FUND PERFORMANCE
Fiscal Year Ended January 31, 1998
<TABLE>
<CAPTION>
- ---------------------------- INVESTMENT PERFORMANCE ANALYSIS ---------------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION
RETURN(1) RETURN(1) RETURN(1) RETURN(1) TO DATE(1)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SYNTHETIC CLASS I* 22.84% 27.27% 16.96% 13.42% 13.82%
- ----------------------------------------------------------------------------------------------
SYNTHETIC CLASS A* 22.50% 26.83% 16.59% 13.07% 13.49%
- ----------------------------------------------------------------------------------------------
SYNTHETIC CLASS A, WITH LOAD*(2) 15.44% 24.35% 15.22% 12.39% 12.97%
- ----------------------------------------------------------------------------------------------
</TABLE>
Comparison of change in the value of a $10,000 Investment in the Golden Oak
Value Portfolio, Synthetic Class I or Synthetic Class A, versus the Frank
Russell 1000 Value Index, the Lipper Growth& Income Average, and the Lipper
Growth & Income Index
[LINE GRAPH OMITTED--PLOT POINTS AS FOLLOWS]
<TABLE>
<CAPTION>
Golden Oak Golden Oak Frank Russell Lipper Growth Lipper Growth
Value Portfolio, Value Portfolio, 1000 Value & Income & Income
Synthetic Class I Synthetic Class A Index Index Index
<S> <C> <C> <C> <C> <C>
Jan-88 $10,000 $ 9,425 $10,000 $10,000 $10,000
Jan-89 11,539 10,847 12,212 11,821 11,971
Jan-90 11,946 11,188 13,416 13,044 13,179
Jan-91 12,200 11,385 13,743 13,874 13,814
Jan-92 14,387 13,395 16,412 17,122 16,762
Jan-93 16,090 14,936 19,191 18,918 18,683
Jan-94 17,909 16,579 22,910 21,635 21,810
Jan-95 17,081 15,773 22,301 21,150 21,328
Jan-96 23,123 21,278 30,867 28,117 28,356
Jan-97 28,668 26,269 38,176 34,581 34,714
Jan-98 35,215 32,180 48,525 42,127 42,274
<FN>
*SYNTHETIC TOTAL RETURN INFORMATION REPRESENTS THE ACTUAL CLASS PERFORMANCE
BLENDED WITH COMMON TRUST FUND HISTORICAL DATA ADJUSTED FOR EXPENSES.
1FOR THE PERIOD ENDED JANUARY 31, 1998. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE.
2PERFORMANCE OF THE CLASS A SHARES REFLECTS THE MAXIMUM FRONT END SALES CHARGE
OF 5.75%.
</FN>
</TABLE>
7
<PAGE>
MANAGERS' DISCUSSION OF FUND PERFORMANCE
Fiscal Year Ended January 31, 1998
GOLDEN OAK INTERMEDIATE-TERM INCOME PORTFOLIO
For the 12-month period ended January 31, 1998 the Class I Shares of the Golden
Oak Intermediate-Term Income Portfolio had a total return of 8.07%, as compared
to the benchmark Lehman Intermediate Government/Corporate Index (the "Index")
measure of 8.86%. The SEC 30-day yield for Class I Shares as of January 31, 1997
was 5.26%. Class A Shares had a total return of 7.78%. The SEC 30-day yield for
Class A Shares as of January 31, 1997 was 4.76%.
Our outlook entering 1997 was for moderate economic growth of 2.25% to 2.75%, a
moderate rise in the Consumer Price Index to about 3.25% and interest rates to
move within a narrow trading range, but trending somewhat higher by year end.
The Portfolio was duration neutral and overweighted in corporate securities
biased to outperform through income production rather than capital appreciation.
The economy was much stronger than anticipated during the first half of 1997 and
interest rates rose on the expectation that inflation would increase. The
Portfolio had a total return of 2.33% for the six months ended June 30, 1997, as
compared with the benchmark index of 2.83%.
The second half of 1997 was dominated by the Asian crisis and its potential
impact on the U.S. economy. The initial impact was a flight to quality that sent
U.S. Treasury rates lower. As the preferred investment, Treasuries outperformed
corporates and high quality outperformed low quality.
Performance for the third quarter was 2.57% versus 2.7% for the index and 2.14%
in the fourth quarter, the same as the Index.
The 1998 GDP impact from the Asian financial crisis is estimated at -0.5% to
- -1.5%. Hence, GDP is forecasted at 2% to 2.5% with a chance of it coming in
weaker. Inflation will continue to decelerate due to the influence of the strong
dollar and the flood of low priced Asian imports. Interest rates, which have
already fallen in anticipation of these developments, will be flat to down as
the market evaluates the progress of the economy and the odds of the Federal
Reserve cutting rates. Rates will also be biased downward because we provide a
"safe haven" for liquidity flows from the Asian countries. The inflationary wage
pressures will continue to be absorbed by increased productivity as well as
declining profit margins if they are not relieved by the slowing economy.
The portfolio will shift to a duration longer than the Lehman Intermediate
Government/Corporate Index as the inflation outlook continues to improve.
Although Treasuries outperformed corporates during the fourth quarter, we will
continue to overweight corporate securities for their yield advantage.
8
<PAGE>
MANAGERS' DISCUSSION OF FUND PERFORMANCE
Fiscal Year Ended January 31, 1998
- --------------------------- INVESTMENT PERFORMANCE ANALYSIS -----------------
ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR INCEPTION
RETURN(1) RETURN(1) TO DATE(1)
- -----------------------------------------------------------------------------
CLASS I 8.07% 7.65% 5.60%
- -----------------------------------------------------------------------------
CLASS A 7.78% 7.37% 5.22%
- -----------------------------------------------------------------------------
CLASS A, WITH LOAD(2) 2.96% 5.73% 4.17%
- -----------------------------------------------------------------------------
Comparison of change in the value of a $10,000 Investment in the Golden Oak
Intermediate-Term Income Portfolio, Class I, versus the Lehman Brothers
Intermediate Government/Corporate Index
[LINE GRAPH OMITTED--PLOT POINTS AS FOLLOWS]
Golden Oak Lehman Brothers
Intermediate-Term Intermediate
Income Portfolio, Class I Government/Corporate Index
Feb-93 $10,000 $10,000
Jan-94 10,569 10,622
Jan-95 10,399 10,475
Jan-96 11,733 11,981
Jan-97 12,004 12,409
Jan-98 12,972 13,509
Comparison of change in the value of a $10,000 Investment in the Golden Oak
Intermediate-Term Income Portfolio, Class A without load, versus the Lehman
Brothers Intermediate Government/Corporate Index
[LINE GRAPH OMITTED--PLOT POINTS AS FOLLOWS]
Golden Oak Lehman Brothers
Intermediate-Term Intermediate
Income Portfolio, Class A Government/Corporate Index
Jun-93 $ 9,425 S10,000
Jan-94 9,731 10,356
Jan-95 9,551 10,213
Jan-96 10,749 11,682
Jan-97 10,969 12,099
Jan-98 11,822 13,171
1FOR THE PERIOD ENDED JANUARY 31, 1998. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE. INDIVIDUAL CLASS A SHARES WERE OFFERED
BEGINNING JUNE 18, 1993. CLASS I SHARES WERE OFFERED BEGINNING
FEBRUARY 1, 1993.
2PERFORMANCE OF THE CLASS A SHARES REFLECTS THE MAXIMUM FRONT END SALES CHARGE
OF 4.50%.
9
<PAGE>
MANAGERS' DISCUSSION OF FUND PERFORMANCE
Fiscal Year Ended January 31, 1998
GOLDEN OAK MICHIGAN TAX FREE BOND PORTFOLIO
For the period from June 23, 1997 (inception) to January 31, 1998, the Class I
shares of the Golden Oak Michigan Tax Free Bond Portfolio had a net total return
of 5.35% as compared to the Merrill Lynch Intermediate Municipal Index's (the
Index) 5.28% total return. The SEC 30 day yield for Class I shares as of January
31, 1998 was 3.73%. Class A shares had a net total return of 5.31% for the same
period and an SEC30 day yield of 3.31% on January 31, 1998.
For the "extended" initial quarter (inception to 9/30/97), the net total return
of the Class I shares was the same as the Index return of 2.23%. The return on
the Class A shares was 2.29%. During this period the rates for Michigan
municipals with maturities of 1 year and less increased by as much as 0.14%
while maturities in the 5 yr. range declined by 0.16%. The Portfolio's return
was improved by trades that lengthened the duration by about 10%.
For the fourth quarter of 1997, the Class I shares' net return was 2.17% versus
a return of 2.13% for the Index. The Class A shares returned 2.29% during this
quarter. The yields of Michigan municipal bonds with maturities through 5 years
declined evenly by 0.13%. The portfolio benefited from a small extension of
duration over the quarter. The decline in municipal rates followed those of the
Treasury market. As investor perceptions of the inflation risks declined due to
the developing Asian crisis, rates came down. Investors' fear of the Federal
Reserve raising rates to "cool" the economy disappeared.
The bullish 1998 outlook for fixed income investments and the Treasury market
applies to the municipal market as well. However, there are some conflicting
cross-currents in the picture. Supply of municipals will be reduced with
improved budgets at the local government level. Increasing the supply will be
the refunding issues that are triggered by declining interest rates. The demand
for municipals is increasing as the muni-to-treasury yield ratio has increased.
This demand will be somewhat offset by the continuing attractiveness of the
equity market and the reduced capital gains rates. We are monitoring these and
other developments with a bias to extending the duration of the Portfolio.
10
<PAGE>
MANAGERS' DISCUSSION OF FUND PERFORMANCE
Fiscal Year Ended January 31, 1998
<TABLE>
<CAPTION>
- ----------------------------------- INVESTMENT PERFORMANCE ANALYSIS --------------------------
ANNUALIZED ANNUALIZED ANNUALIZED ANNUALIZED
ONE YEAR 3 YEAR 5 YEAR 10 YEAR INCEPTION
RETURN(1) RETURN(1) RETURN(1) RETURN(1) TO DATE(1)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SYNTHETIC CLASS I* 7.36% 6.99% 5.50% 6.42% 5.91%
- ----------------------------------------------------------------------------------------------
SYNTHETIC CLASS A* 7.22% 6.73% 5.21% 6.14% 5.62%
- ----------------------------------------------------------------------------------------------
SYNTHETIC CLASS A, WITH LOAD*(2) 2.43% 5.10% 4.25% 5.65% 5.17%
- ----------------------------------------------------------------------------------------------
</TABLE>
Comparison of change in the value of a $10,000 Investment in the Golden Oak
Michigan Tax Free Bond Portfolio, Synthetic Class I or Synthetic Class A,
versus the Lehman 3-10 Year Muni Blended Index, and the Lipper Michigan
Municipal Debt Funds Average
[LINE GRAPH OMITTED--PLOT POINTS AS FOLLOWS]
Golden Oak Golden Oak
Michigan Michigan Lehman Lipper
Tax Free Bond Tax Free Bond 3-10 Year Michigan
Portfolio, Portfolio, Muni Municipal Debt
Synthetic I Synthetic A Blended Index Funds Average
Jan-88 $10,000 $ 9,550 $10,000 $10,000
Jan-89 10,640 10,133 10,462 10,953
Jan-90 11,240 10,676 11,225 11,691
Jan-91 12,113 11,482 12,239 12,623
Jan-92 13,308 12,571 13,463 13,936
Jan-93 14,259 13,444 14,598 15,363
Jan-94 15,623 14,667 16,020 17,266
Jan-95 15,216 14,253 15,713 16,526
Jan-96 16,898 15,779 17,730 18,803
Jan-97 17,357 16,162 18,402 19,279
Jan-98 18,635 17,329 19,887 21,108
*SYNTHETIC TOTAL RETURN INFORMATION REPRESENTS THE ACTUAL CLASS PERFORMANCE
BLENDED WITH COMMON TRUST FUND HISTORICAL DATA ADJUSTED FOR EXPENSES.
1FOR THE PERIOD ENDED JANUARY 31, 1998. PAST PERFORMANCE OF THE PORTFOLIO IS NOT
PREDICTIVE OF FUTURE PERFORMANCE.
2PERFORMANCE OF THE CLASS A SHARES REFLECTS THE MAXIMUM FRONT END SALES CHARGE
OF 4.50%.
11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Trustees
of The Arbor Fund
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Golden Oak Growth (formerly Golden Oak Diversified Growth), Golden Oak Value,
Golden Oak Intermediate-Term Income, Golden Oak Michigan Tax Free Bond and
Golden Oak Prime Obligation Money Market Portfolios (separately managed
portfolios of The Arbor Fund, hereafter referred to as the "Fund") at January
31, 1998, and the results of each of their operations, the changes in each of
their net assets and the financial highlights for each of the periods indicated,
in conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at January 31, 1998 by
correspondence with the custodian and the application of alternative auditing
procedures where securities purchased had not been received, provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Philadelphia, PA
March 13, 1998
12
<PAGE>
STATEMENT OF NET ASSETS GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
GROWTH Value
PORTFOLIO Shares (000)
- --------------------------------------------------------------------------------
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 Boston ............................... 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.
13
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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 .................................. 14,500 638
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 AGREEMENT -- 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 Agreement
(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
Accumulated Net Realized Gain
on Investments .................................. 2,151
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(Divide)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.
14
<PAGE>
STATEMENT OF NET ASSETS GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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.
15
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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 EQUIVALENT -- 4.9%
Corefund Elite Cash Reserve ..................... $ 1,505 $ 1,505
--------
Total Cash Equivalent
(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(Divide)94.25%) .................... $9.89
========
- --------------------------------------------------------------------------------
* Non-income producing security
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
STATEMENT OF NET ASSETS GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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
6.109%, 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.
17
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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
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 AGREEMENT -- 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 Agreement
(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 12,538,301 outstanding shares
of beneficial interest ........................ $124,528
Portfolio Shares of Class A (unlimited
authorization -- no par value) based
on 6,372 outstanding shares
of beneficial interest ........................ 75
Undistributed Net Investment Income 23
Accumulated Net Realized Loss
on Investments ................................ (985)
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(Divide)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.
18
<PAGE>
STATEMENT OF NET ASSETS GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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
5.300%, 05/01/06 ................................. 210 215
5.400%, 05/01/07 ................................. 235 241
Grand Rapids Building Authority, GO
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.
19
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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
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, GO
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
7.500%, 10/01/01 ................................. 325 364
Oakland County, Birmingham
Drain District, 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.
20
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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, RB, 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
State Hospital Finance Authority, RB,
Sisters of Mercy Project, MBIA
4.900%, 08/15/05 ................................. 1,000 1,038
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (continued) (000) (000)
- --------------------------------------------------------------------------------
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
State Strategic Fund, RB,
Ford Motor Project, Series A
7.100%, 02/01/06 ............................... 350 414
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (continued) (000) (000)
- --------------------------------------------------------------------------------
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
Washtenaw Community College,
GO, Series A
4.900%, 04/01/06 ............................... 1,200 1,251
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
Face
MICHIGAN TAX FREE BOND Amount Value
PORTFOLIO (continued) (000) (000)
- --------------------------------------------------------------------------------
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
Wixom, 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 EQUIVALENT -- 0.7%
SEI Institutional Tax Free Portfolio ............... 596 596
-------
Total Cash Equivalent
(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
=======
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(Divide)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.
23
<PAGE>
STATEMENT OF NET ASSETS GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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 Handelsbanken, NY
5.750%, 03/09/98 ............................. 3,000 2,983
-------
Total Banking ............................ 5,961
-------
FINANCIAL SERVICES -- 54.7%
Aon
5.770%, 03/18/98 ............................. 3,500 3,475
Avon Capital
5.560%, 02/05/98 ............................. 2,050 2,049
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
Face
PRIME OBLIGATION MONEY Amount Value
MARKET PORTFOLIO (continued) (000) (000)
- --------------------------------------------------------------------------------
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
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 ................. 73,528
-------
INDUSTRIAL -- 7.4%
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 ......................... 9,953
-------
Total Commercial Paper
(Cost $89,442) ........................ 89,442
-------
U.S. GOVERNMENT AGENCY OBLIGATION -- 6.7%
FNMA (A)
5.389%, 02/25/98 ............................. 9,000 9,000
-------
Total U.S. Government Agency Obligation
(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.
24
<PAGE>
STATEMENT OF NET ASSETS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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 BOND -- 3.7%
Bank of America (A)
5.650%, 04/16/98 .............................. 5,000 4,999
--------
Total Corporate Bond
(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
========
- --------------------------------------------------------------------------------
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 date shown is the next
reset date.
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
This page left intentionally blank
26
<PAGE>
STATEMENT OF OPERATIONS (000) GOLDEN OAK FAMILY OF FUNDS
For the Year Ended January 31, 1998 (except where noted)
<TABLE>
<CAPTION>
INTERMEDIATE-TERM MICHIGAN PRIME OBLIGATION
GROWTH VALUE INCOME TAX FREE BOND MONEY MARKET
PORTFOLIO PORTFOLIO (2) PORTFOLIO PORTFOLIO (2) PORTFOLIO
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
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 61 246 101 276
Less: Waiver of
Administration Fees .......... -- (26) -- -- (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.
27
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000) GOLDEN OAK FAMILY OF FUNDS
For the Periods Ended January 31,
<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
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Operations:
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 (See note 8) .. -- -- 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 (See note 8) ................. -- -- 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
============================================================================================================================
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
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Operations:
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 (See note 8) .. 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 (See note 8) ................. 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.
28 & 29
<PAGE>
FINANCIAL HIGHLIGHTS GOLDEN OAK FAMILY OF FUNDS
For a Share Outstanding Throughout the Period
For the Periods Ended January 31,
<TABLE>
<CAPTION>
NET REALIZED DISTRIBUTIONS NET NET
ASSET AND -------------------- ASSET ASSETS RATIO OF
VALUE NET UNREALIZED NET NET VALUE END EXPENSES
BEGINNING INVESTMENT GAIN (LOSS) INVESTMENT REALIZED END TOTAL OF PERIOD TO AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME GAIN OF PERIOD RETURN+ (000) NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GROWTH PORTFOLIO CLASS I
1998 $12.66 -- 3.12 -- (3.12) $12.66 25.85% $ 36,240 1.07%
1997 10.26 -- 2.44 (0.01) (0.03) 12.66 23.79 32,973 1.10
1996 10.00 0.07 1.74 (0.07) (1.48) 10.26 18.81 24,775 1.10
1995 10.82 0.08 (0.64) (0.08) (0.18) 10.00 (5.24) 32,931 1.10
1994(1) 10.00 0.08 0.82 (0.08) -- 10.82 9.08 24,955 1.10
GROWTH PORTFOLIO CLASS A
1998 $12.57 (0.01) 3.07 -- (3.12) $12.51 25.56% $ 307 1.32%
1997 10.20 (0.03) 2.43 -- (0.03) 12.57 23.56 226 1.35
1996 9.96 0.04 1.72 (0.04) (1.48) 10.20 18.43 193 1.35
1995 10.81 0.05 (0.67) (0.05) (0.18) 9.96 (5.76) 125 1.35
1994(3) 9.54 0.02 1.27 (0.02) -- 10.81 22.00* 173 1.35*
VALUE PORTFOLIO CLASS I
1998(4) $10.00 0.04 0.86 (0.04) (1.53) $ 9.33 9.15% $ 30,922 1.10%*
VALUE PORTFOLIO CLASS A
1998(4) $10.00 0.02 0.86 (0.03) (1.53) $ 9.32 8.97% $ 51 1.35%*
INTERMEDIATE-TERM INCOME PORTFOLIO CLASS I
1998 $ 9.83 0.56 0.21 (0.56) -- $10.04 8.07% $125,936 0.65%
1997 10.15 0.54 (0.32) (0.54) -- 9.83 2.31 116,689 0.65
1996 9.52 0.56 0.63 (0.56) -- 10.15 12.83 104,270 0.65
1995 10.19 0.50 (0.67) (0.50) -- 9.52 (1.61) 80,064 0.65
1994(1) 10.00 0.46 0.23 (0.46) (0.04) 10.19 6.99 64,329 0.65
INTERMEDIATE-TERM INCOME PORTFOLIO CLASS A
1998 $ 9.83 0.53 0.21 (0.53) -- $10.04 7.78% $ 64 0.90%
1997 10.15 0.52 (0.32) (0.52) -- 9.83 2.05 84 0.90
1996 9.52 0.54 0.63 (0.54) -- 10.15 12.54 210 0.90
1995 10.19 0.48 (0.67) (0.48) -- 9.52 (1.85) 314 0.90
1994(3) 10.12 0.31 0.11 (0.31) (0.04) 10.19 6.72* 365 0.90*
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%*
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%*
PRIME OBLIGATION MONEY MARKET PORTFOLIO CLASS I
1998 $ 1.00 0.05 -- (0.05) -- $ 1.00 5.41% $127,977 0.40%
1997 1.00 0.05 -- (0.05) -- 1.00 5.21 94,508 0.40
1996 1.00 0.06 -- (0.06) -- 1.00 5.74 107,409 0.40
1995 1.00 0.04 -- (0.04) -- 1.00 4.21 109,076 0.40
1994(1) 1.00 0.03 -- (0.03) -- 1.00 2.87 117,188 0.40
PRIME OBLIGATION MONEY MARKET PORTFOLIO CLASS A
1998 $ 1.00 0.05 -- (0.05) -- $ 1.00 5.15% $ 6,381 0.65%
1997 1.00 0.05 -- (0.05) -- 1.00 4.95 71,686 0.65
1996 1.00 0.05 -- (0.05) -- 1.00 5.47 75,293 0.65
1995 1.00 0.04 -- (0.04) -- 1.00 3.95 21,018 0.65
1994(2) 1.00 -- -- -- -- 1.00 2.90* 104 0.65*
=========================================================================================================================
RATIO OF RATIO OF
RATIO OF EXPENSES NET INCOME
NET TO AVERAGE TO AVERAGE
INCOME NET ASSETS NET ASSETS PORTFOLIO AVERAGE
TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
NET ASSETS WAIVERS) WAIVERS) RATE RATE++
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GROWTH PORTFOLIO CLASS I
1998 0.03% 1.07% 0.03% 131.54% $0.0600
1997 0.04 1.11 0.03 130.69 0.0600
1996 0.62 1.17 0.55 189.48 N/A
1995 0.74 1.24 0.60 84.00 N/A
1994(1) 0.77 1.21 0.66 68.91 N/A
GROWTH PORTFOLIO CLASS A
1998 (0.21)% 1.32% (0.21)% 131.54% $0.0600
1997 (0.20) 1.36 (0.21) 130.69 0.0600
1996 0.30 1.42 0.23 189.48 N/A
1995 0.49 1.49 0.35 84.00 N/A
1994(3) 0.33* 1.45* 0.23* 68.91 N/A
VALUE PORTFOLIO CLASS I
1998(4) 0.72%* 1.28%* 0.54%* 90.97% $0.0421
VALUE PORTFOLIO CLASS A
1998(4) 0.31%* 1.53%* 0.13%* 90.97% $0.0421
INTERMEDIATE-TERM INCOME PORTFOLIO CLASS I
1998 5.66% 0.80% 5.51% 60.78% N/A
1997 5.48 0.80 5.33 34.67 N/A
1996 5.68 0.84 5.49 121.47 N/A
1995 5.21 0.86 5.00 141.51 N/A
1994(1) 4.47 0.83 4.29 71.73 N/A
INTERMEDIATE-TERM INCOME PORTFOLIO CLASS A
1998 5.40% 1.05% 5.25% 60.78% N/A
1997 5.20 1.05 5.05 34.67 N/A
1996 5.49 1.09 5.30 121.47 N/A
1995 4.96 1.11 4.75 141.51 N/A
1994(3) 4.27* 1.08* 4.09* 71.73 N/A
MICHIGAN TAX FREE BOND PORTFOLIO CLASS I
1998(4) 4.41%* 0.82%* 4.24%* 9.77% N/A
MICHIGAN TAX FREE BOND PORTFOLIO CLASS A
1998(4) 4.15%* 1.07%* 3.98%* 9.77% N/A
PRIME OBLIGATION MONEY MARKET PORTFOLIO CLASS I
1998 5.29% 0.59% 5.10% N/A N/A
1997 5.08 0.68 4.80 N/A N/A
1996 5.60 0.70 5.30 N/A N/A
1995 4.20 0.68 3.92 N/A N/A
1994(1) 2.83 0.67 2.56 N/A N/A
PRIME OBLIGATION MONEY MARKET PORTFOLIO CLASS A
1998 4.99% 0.84% 4.80% N/A N/A
1997 4.83 0.93 4.55 N/A N/A
1996 5.31 0.95 5.01 N/A N/A
1995 3.95 0.93 3.67 N/A N/A
1994(2) 2.68* 0.93* 2.40* N/A N/A
=================================================================================
<FN>
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. Total return is for the period
indicated and has not been annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
NOTES TO FINANCIAL STATEMENTS GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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 (formerly Golden
Oak Diversified Growth), 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 Trustees 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. The financial statements have
been prepared in accordance with generally accepted accounting principles which
require the use of management's estimates. Actual results could differ from
these estimates.
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 has been made 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.
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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 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.
DISTRIBUTIONS -- 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 has voluntarily agreed to waive a portion of its fee relating
to the Value Portfolio in order to limit that Portfolio's administration fee to
.20% of its average daily net assets on an annualized basis.
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 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
32
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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 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. These costs include legal fees of approximately $14,400 for
organizational work performed by a law firm of which two officers of the Trust
and a trustee of the Trust are partners.
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.
The Trust has paid legal fees to a law firm of which two officers of the Trust
and a trustee of the Trust are partners.
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:
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
INTERMEDIATE- MICHIGAN
TERM TAX FREE
GROWTH VALUE INCOME BOND
(000) (000) (000) (000)
- -----------------------------------------------------------------
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
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:
INTERMEDIATE- MICHIGAN
TERM TAX FREE
GROWTH VALUE INCOME BOND
(000) (000) (000) (000)
- -----------------------------------------------------------------
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
====== ====== ====== ======
At January 31, 1998, the Portfolios had available realized capital losses to
offset future net capital gains as follows through fiscal year ending:
2003 2005 2006
(000) (000) (000)
---- ---- ----
Prime Obligation ............ $ -- $12 $ --
Intermediate-Term Income .... 534 45 406
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.
The Golden Oak Michigan Tax Free Bond Portfolio invests in debt instruments of
municipal issuers. The issuers' ability to meet their obligations may be
affected by economic developments in a specific state or region. The Golden Oak
Michigan Tax Free Bond invests primarily in obligations located in Michigan.
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
34
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded) GOLDEN OAK FAMILY OF FUNDS
January 31, 1998
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:
COMMON NET UNREALIZED GOLDEN OAK
TRUST FUND ASSETS APPRECIATION SHARES ISSUED
- -----------------------------------------------------
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
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.
35
<PAGE>
NOTICE TO SHAREHOLDERS
OF
THE GOLDEN OAK FAMILY OF FUNDS
(UNAUDITED)
For the fiscal year ended January 31, 1998, each Portfolio is designating long
term and mid term capital gains, qualifying dividends, and exempt income with
regard to distributions paid during the year as follows: For shareholders that
do not have a January 31, 1998 tax year end, this notice is for informational
use only.
<TABLE>
<CAPTION>
20% RATE 28% RATE
LONG TERM MID TERM ORDINARY TAX EXEMPT
CAPITAL GAINS CAPITAL GAINS INCOME INCOME TOTAL
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS QUALIFYING
PORTFOLIO (TAX BASIS) (TAX BASIS) (TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Growth Portfolio ...................... 21% 45% 34% 0% 100% 75%
Value Portfolio ....................... 97% 1% 2% 0% 100% 87%
Intermediate-Term Income Portfolio .... 0% 0% 100% 0% 100% 0%
Michigan Tax Free Bond Portfolio ...... 6% 0% 1% 93% 100% 0%
Prime Obligation Money Market Portfolio 0% 0% 100% 0% 100% 0%
==============================================================================================================================
<FN>
Please consult your tax advisor for proper treatment of this information.
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction.
(2) None of the Golden Oak Portfolios meet California, Connecticut or New York's
statutory requirements to pass through exempt interest dividends from U.S.
Government obligations.
</FN>
</TABLE>
36
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
THE GOLDEN OAK FAMILY OF FUNDS
GROWTH PORTFOLIO
VALUE PORTFOLIO
INTERMEDIATE-TERM INCOME PORTFOLIO
MICHIGAN TAX FREE BOND PORTFOLIO
PRIME OBLIGATION MONEY MARKET PORTFOLIO
INVESTMENT ADVISER:
CITIZENS BANK
328 SOUTH SAGINAW STREET
FLINT,MI 48502
DISTRIBUTOR:
SEI INVESTMENTS DISTRIBUTION CO.
OAKS, PA 19456
FOR INFORMATION, CALL:
1-800-545-6331
GOK-F-003-02
