[graphic omitted]
SEMI-ANNUAL
REPORT
THE HANCOCK HORIZON FUNDS:
July 31, 2000
(UNAUDITED)
The Arbor Fund
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
--------------------------------------------------------------------------------
[Hancock Horizon Funds logo omitted]
JULY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
TREASURY SECURITIES MONEY MARKET FUND
--------------------------------------------------------------------------------
FACE AMOUNT VALUE
DESCRIPTION (000) (000)
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATION -- 25.6%
U.S. Treasury Bill
5.873%, 08/03/00 $ 60,000 $ 59,980
--------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATION
(COST $59,980) 59,980
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 74.9%
Barclays Capital
6.520%, dated 07/31/00, matures
08/01/00, repurchase price $10,307,192
(collateralized by U.S. Treasury Note,
total market value: $10,512,343) (A) 10,305 10,305
Deutsche Bank
6.500%, dated 07/31/00, matures
08/01/00, repurchase price $10,346,482
(collateralized by U.S. Treasury Note,
total market value: $10,551,600) (A) 10,345 10,345
Greenwich Capital
6.500%, dated 07/31/00, matures
08/01/00, repurchase price $10,425,470
(collateralized by U.S. Treasury Note,
total market value: $10,633,423) (A) 10,424 10,424
JP Morgan
6.500%, dated 07/31/00, matures
08/01/00, repurchase price $113,335,160
(collateralized by U.S. Treasury Bond,
total market value: $115,581,808) (A) 113,315 113,315
Lehman Brothers
6.480%, dated 07/31/00, matures
08/01/00, repurchase price $10,306,774
(collateralized by U.S. Treasury Notes,
total market value: $10,512,479) (A) 10,305 10,305
Merrill Lynch
6.450%, dated 07/31/00, matures
08/01/00, repurchase price $10,324,005
(collateralized by U.S. Treasury
Obligations, total market value:
$10,532,393) (A) 10,322 10,322
Morgan Stanley Dean Witter
6.480%, dated 07/31/00, matures
08/01/00, repurchase price $10,343,856
(collateralized by U.S. Treasury Note,
total market value: $10,555,227) (A) 10,342 10,342
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS (COST $175,358) 175,358
--------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 100.5% (COST $235,338) 235,338
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET -- (0.5)%
Other Assets and Liabilities, Net (1,163)
--------------------------------------------------------------------------------
VALUE
DESCRIPTION (000)
--------------------------------------------------------------------------------
NET ASSETS:
Fund shares of Trust Class Shares (unlimited
authorization -- no par value) based on
193,373,874 outstanding shares of
beneficial interest $193,374
Fund shares of Institutional Sweep Class Shares
(unlimited authorization -- no par value) based
on 40,799,542 outstanding shares of beneficial
interest 40,800
Fund shares of Class A Shares (unlimited
authorization -- no par value) based on 1,100
outstanding shares of beneficial interest 1
--------------------------------------------------------------------------------
TOTAL NET ASSETS -- 100.0% $234,175
--------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS SHARES $1.00
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INSTITUTIONAL SWEEP CLASS SHARES $1.00
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE-- CLASS A SHARES $1.00
--------------------------------------------------------------------------------
(A) Tri-party repurchase agreement.
The accompanying notes are an integral part of the financial statements.
1
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
--------------------------------------------------------------------------------
STRATEGIC INCOME BOND FUND
--------------------------------------------------------------------------------
FACE AMOUNT VALUE
DESCRIPTION (000) (000)
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 31.1%
U.S. Treasury Bills
6.247%, 02/01/01 $1,100 $ 1,066
6.188%, 01/25/01 2,000 1,940
6.126%, 11/02/00 1,000 984
U.S. Treasury Bonds
6.500%, 11/15/26 500 530
6.375%, 04/30/02 1,000 1,000
6.250%, 08/15/23 1,400 1,429
U.S. Treasury Notes
7.500%, 11/15/01 900 912
7.500%, 02/15/05 1,350 1,415
6.625%, 05/15/07 550 563
6.250%, 02/15/03 1,350 1,347
6.000%, 08/15/09 650 646
5.875%, 11/15/04 500 493
5.750%, 11/30/02 200 197
--------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $12,404) 12,522
--------------------------------------------------------------------------------
CORPORATE BONDS -- 15.1%
--------------------------------------------------------------------------------
Banks -- 3.7%
Bank of America
7.000%, 05/15/03 500 495
First Union National Bank
7.875%, 02/15/10 500 492
SunTrust Bank
7.750%, 05/01/10 500 499
--------------------------------------------------------------------------------
TOTAL BANKS 1,486
--------------------------------------------------------------------------------
Chemicals -- 0.5%
E.I. DuPont de Nemours
6.750%, 10/15/04 200 198
--------------------------------------------------------------------------------
TOTAL CHEMICALS 198
--------------------------------------------------------------------------------
Financial Services -- 5.7%
DaimlerChrysler National Holding
7.750%, 05/27/03 600 605
General Motors Acceptance
6.625%, 10/01/02 200 198
IBM Credit
6.640%, 10/29/01 200 199
Morgan Stanley Dean Witter
7.125%, 01/15/03 500 498
--------------------------------------------------------------------------------
FACE AMOUNT VALUE
DESCRIPTION (000) (000)
--------------------------------------------------------------------------------
Norwest Financial
6.375%, 09/15/02 $600 $ 591
Wells Fargo
6.125%, 10/15/00 200 200
--------------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 2,291
--------------------------------------------------------------------------------
Food, Beverage & Tobacco -- 1.3%
Coca-Cola Enterprises
7.875%, 02/01/02 500 506
--------------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 506
--------------------------------------------------------------------------------
Measuring Devices -- 1.2%
Honeywell
6.750%, 03/15/02 500 498
--------------------------------------------------------------------------------
TOTAL MEASURING DEVICES 498
--------------------------------------------------------------------------------
Telephones & Telecommunication -- 2.7%
AT&T
7.000%, 05/15/05 500 491
Worldcom
7.875%, 05/15/03 600 607
--------------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATION 1,098
--------------------------------------------------------------------------------
TOTAL CORPORATE BONDS (COST $6,068) 6,077
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 7.6%
FHLB
7.625%, 05/15/07 500 516
7.625%, 05/14/10 750 776
7.250%, 05/15/02 500 503
7.250%, 05/15/03 500 504
FNMA
7.250%, 01/15/10 750 756
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $3,004) 3,055
--------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 39.5%
FHLMC
7.500%, 06/01/07 999 998
7.000%, 12/01/06 196 192
7.000%, 06/01/07 749 740
7.000%, 12/01/14 191 187
7.000%, 04/01/15 743 754
2
<PAGE>
[Hancock Horizon Funds logo omitted]
JULY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
STRATEGIC INCOME BOND FUND (CONCLUDED)
--------------------------------------------------------------------------------
FACE AMOUNT VALUE
DESCRIPTION (000) (000)
--------------------------------------------------------------------------------
FNMA
7.500%, 06/01/07 $1,950 $ 1,930
7.500%, 04/01/15 996 997
7.500%, 06/01/15 2,439 2,444
7.000%, 12/01/06 187 188
7.000%, 06/01/07 949 981
7.000%, 12/01/09 188 186
GNMA
8.500%, 06/15/30 1,949 1,993
8.000%, 12/20/29 192 195
8.000%, 06/15/30 1,948 1,967
7.500%, 08/15/12 395 405
7.500%, 09/15/13 397 403
7.500%, 10/15/14 207 206
7.500%, 06/15/15 194 196
7.500%, 12/20/29 196 194
7.500%, 06/15/30 749 744
--------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS (COST $15,836) 15,900
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 5.2%
Barclays Capital
6.410%, dated 07/31/00,
matures 08/01/00, repurchase
price $2,096,217
(collateralized by U.S.
Treasury Note, total market
value: $2,138,400) (A) 2,096 2,096
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT (COST $2,096) 2,096
--------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 98.5% (COST $39,408) 39,650
--------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET -- 1.5%
Other Assets and Liabilities, Net 604
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VALUE
DESCRIPTION (000)
--------------------------------------------------------------------------------
NET ASSETS:
Fund shares of Trust Class Shares
(unlimited authorization -- no par
value) based on 2,650,016 outstanding
shares of beneficial interest $39,975
Fund shares of Class A Shares (unlimited
authorization -- no par value) based
on 73 outstanding shares of
beneficial interest 1
Fund shares of Class C Shares (unlimited
authorization -- no par value) based
on 73 outstanding shares of
beneficial interest 1
Undistributed net investment income 21
Accumulated net realized gain on investments 14
Net unrealized appreciation on investments 242
--------------------------------------------------------------------------------
TOTAL NET ASSETS -- 100.0% $40,254
--------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS SHARES $15.19
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE -- CLASS A SHARES $15.19
MAXIMUM OFFERING PRICE PER SHARE --
CLASS A SHARES ($15.19 / 96.00%) $15.82
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- CLASS C SHARES $15.19
--------------------------------------------------------------------------------
(A) Tri-party repurchase agreement.
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
GROWTH AND INCOME FUND
--------------------------------------------------------------------------------
VALUE
DESCRIPTION SHARES (000)
--------------------------------------------------------------------------------
COMMON STOCKS -- 95.8%
Aerospace & Defense -- 2.6%
BF Goodrich 4,300 $ 153
Boeing 5,760 282
Northrop Grumman 3,290 234
--------------------------------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 669
--------------------------------------------------------------------------------
Air Transportation -- 3.3%
AMR 8,300 274
Delta Air Lines 5,840 314
Southwest Airlines 11,100 262
--------------------------------------------------------------------------------
TOTAL AIR TRANSPORTATION 850
--------------------------------------------------------------------------------
Apparel/Textiles -- 2.6%
Jones Apparel Group* 9,616 220
Liz Claiborne 7,540 294
Springs Industries 4,860 157
--------------------------------------------------------------------------------
TOTAL APPAREL/TEXTILES 671
--------------------------------------------------------------------------------
Automotive -- 1.4%
Ford Motor 3,600 168
General Motors 3,200 182
Visteon 471 7
--------------------------------------------------------------------------------
TOTAL AUTOMOTIVE 357
--------------------------------------------------------------------------------
Banks -- 3.0%
Chase Manhattan 4,470 222
Golden West Financial 6,300 290
Washington Mutual 7,830 252
--------------------------------------------------------------------------------
TOTAL BANKS 764
--------------------------------------------------------------------------------
Building & Construction-- 3.0%
Centex 10,700 256
Pulte 10,000 229
Southdown 4,500 280
--------------------------------------------------------------------------------
TOTAL BUILDING & CONSTRUCTION 765
--------------------------------------------------------------------------------
Casinos & Hotels -- 1.1%
Harrah's Entertainment* 11,330 284
--------------------------------------------------------------------------------
TOTAL CASINOS & HOTELS 284
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VALUE
DESCRIPTION SHARES (000)
--------------------------------------------------------------------------------
Chemicals -- 4.2%
Albemarle 13,990 345
Engelhard 14,480 262
Georgia Gulf 14,530 237
Praxair 6,100 241
--------------------------------------------------------------------------------
TOTAL CHEMICALS 1,085
--------------------------------------------------------------------------------
Computer Software -- 0.4%
Microsoft* 1,430 100
--------------------------------------------------------------------------------
TOTAL COMPUTER SOFTWARE 100
--------------------------------------------------------------------------------
Computers & Services -- 3.1%
Apple Computer* 3,480 177
Cisco Systems* 2,120 139
Gateway* 3,000 166
Oracle* 1,900 143
Symantec* 3,250 167
--------------------------------------------------------------------------------
TOTAL COMPUTERS & SERVICES 792
--------------------------------------------------------------------------------
Containers & Packaging -- 0.9%
Bemis 6,660 229
--------------------------------------------------------------------------------
TOTAL CONTAINERS & PACKAGING 229
--------------------------------------------------------------------------------
Diversified Manufacturing-- 1.0%
Carlisle 5,380 243
--------------------------------------------------------------------------------
TOTAL DIVERSIFIED MANUFACTURING 243
--------------------------------------------------------------------------------
Drugs -- 1.3%
Ivax* 4,000 197
Mylan Laboratories 6,000 128
--------------------------------------------------------------------------------
TOTAL DRUGS 325
--------------------------------------------------------------------------------
Electrical Utilities -- 7.2%
Cinergy 10,190 265
Consolidated Edison 7,410 225
DTE Energy 6,430 202
Duke Energy 3,790 234
Energy East 10,240 193
Entergy 8,770 238
Pinnacle West Capital 7,130 282
Southern 8,560 209
--------------------------------------------------------------------------------
TOTAL ELECTRICAL UTILITIES 1,848
--------------------------------------------------------------------------------
4
<PAGE>
[Hancock Horizon Funds logo omitted]
JULY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
GROWTH AND INCOME FUND (CONTINUED)
--------------------------------------------------------------------------------
VALUE
DESCRIPTION SHARES (000)
--------------------------------------------------------------------------------
Electronic Components & Equipment -- 2.3%
Arrow Electronics* 5,660 $ 187
Avnet 3,470 198
Vishay Intertechnology* 6,740 209
--------------------------------------------------------------------------------
TOTAL ELECTRONIC COMPONENTS & EQUIPMENT 594
--------------------------------------------------------------------------------
Financial Services -- 6.7%
Bear Stearns 5,870 316
Citigroup 5,055 357
Countrywide Credit 7,280 256
Lehman Brothers Holdings 2,000 225
Morgan Stanley Dean Witter 3,040 277
Stilwell Financial* 6,400 282
--------------------------------------------------------------------------------
TOTAL FINANCIAL SERVICES 1,713
--------------------------------------------------------------------------------
Food, Beverage & Tobacco -- 2.8%
Adolph Coors 4,230 267
IBP 13,760 199
Suiza Foods* 5,730 266
--------------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 732
--------------------------------------------------------------------------------
Gas/Natural Gas -- 1.0%
Questar 13,370 261
--------------------------------------------------------------------------------
TOTAL GAS/NATURAL GAS 261
--------------------------------------------------------------------------------
Household Furniture & Fixtures -- 0.8%
Furniture Brands
International* 13,050 193
--------------------------------------------------------------------------------
TOTAL HOUSEHOLD FURNITURE & FIXTURES 193
--------------------------------------------------------------------------------
Household Products -- 0.7%
Whirlpool 3,960 171
--------------------------------------------------------------------------------
TOTAL HOUSEHOLD PRODUCTS 171
--------------------------------------------------------------------------------
Insurance -- 6.8%
Aflac 1,470 76
AMBAC Financial Group 4,570 294
Cigna 2,530 253
MGIC Investment 5,500 312
Pacificare Health Systems* 4,000 260
PMI Group 5,100 319
UnitedHealth Group 3,000 245
--------------------------------------------------------------------------------
TOTAL INSURANCE 1,759
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VALUE
DESCRIPTION SHARES (000)
--------------------------------------------------------------------------------
Machinery -- 1.6%
Dover 5,170 $ 237
Ingersoll-Rand 4,600 181
--------------------------------------------------------------------------------
TOTAL MACHINERY 418
--------------------------------------------------------------------------------
Medical Products & Services -- 1.6%
Beckman Coulter 2,450 163
Express Scripts* 3,750 241
--------------------------------------------------------------------------------
TOTAL MEDICAL PRODUCTS & SERVICES 404
--------------------------------------------------------------------------------
Metals & Mining -- 1.1%
Precision Castparts 4,620 295
--------------------------------------------------------------------------------
TOTAL METALS & MINING 295
--------------------------------------------------------------------------------
Miscellaneous Business Services -- 1.6%
Adobe Systems 1,370 157
Manpower 6,340 245
--------------------------------------------------------------------------------
TOTAL MISCELLANEOUS BUSINESS SERVICES 402
--------------------------------------------------------------------------------
Office Furniture & Fixtures -- 1.6%
Herman Miller 5,800 182
Johnson Controls 4,410 229
--------------------------------------------------------------------------------
TOTAL OFFICE FURNITURE & FIXTURES 411
--------------------------------------------------------------------------------
Online Services -- 0.5%
America Online* 2,440 130
--------------------------------------------------------------------------------
TOTAL ONLINE SERVICES 130
--------------------------------------------------------------------------------
Paper & Paper Products -- 0.8%
Westvaco 7,770 213
--------------------------------------------------------------------------------
TOTAL PAPER & PAPER PRODUCTS 213
--------------------------------------------------------------------------------
Petroleum & Fuel Products -- 2.1%
Apache 5,710 284
Noble Affiliates 8,800 264
--------------------------------------------------------------------------------
TOTAL PETROLEUM & FUEL PRODUCTS 548
--------------------------------------------------------------------------------
5
<PAGE>
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
GROWTH AND INCOME FUND (CONCLUDED)
--------------------------------------------------------------------------------
SHARES/FACE VALUE
DESCRIPTION AMOUNT (000) (000)
--------------------------------------------------------------------------------
Petroleum Refining -- 5.7%
Amerada Hess 4,270 $ 258
Chevron 3,320 262
Coastal 3,660 211
Exxon Mobil 3,640 291
Tosco 8,510 226
Ultramar Diamond Shamrock 9,830 225
--------------------------------------------------------------------------------
TOTAL PETROLEUM REFINING 1,473
--------------------------------------------------------------------------------
Printing & Publishing -- 1.8%
Knight Ridder 4,280 223
RR Donnelley & Sons 11,130 248
--------------------------------------------------------------------------------
TOTAL PRINTING & PUBLISHING 471
--------------------------------------------------------------------------------
Professional Services -- 1.0%
Jacobs Engineering Group* 7,000 250
--------------------------------------------------------------------------------
TOTAL PROFESSIONAL SERVICES 250
--------------------------------------------------------------------------------
Railroads -- 0.0%
Kansas City Southern Industries 1,600 11
--------------------------------------------------------------------------------
TOTAL RAILROADS 11
--------------------------------------------------------------------------------
Retail -- 8.1%
American Eagle Outfitters* 17,130 255
Barnes & Noble* 12,020 243
Best Buy* 4,410 321
BJ's Wholesale Club* 7,040 211
Brinker International* 9,000 257
Home Depot 6,040 313
Neiman-Marcus Group* 7,750 256
Tech Data* 5,260 234
--------------------------------------------------------------------------------
TOTAL RETAIL 2,090
--------------------------------------------------------------------------------
Semi-Conductors/Instruments-- 4.1%
Advanced Micro Devices* 1,860 134
Altera* 2,690 264
Analog Devices* 1,890 126
Applied Materials* 2,130 162
Novellus Systems* 3,600 194
Parker Hannifin 4,900 174
--------------------------------------------------------------------------------
TOTAL SEMI-CONDUCTORS/INSTRUMENTS 1,054
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VALUE
DESCRIPTION SHARES (000)
--------------------------------------------------------------------------------
Steel & Steel Works -- 1.6%
Alcan Aluminium Ltd. 6,830 $ 224
USX-US Steel Group 10,050 180
--------------------------------------------------------------------------------
TOTAL STEEL & STEEL WORKS 404
--------------------------------------------------------------------------------
Telephones & Telecommunication -- 2.7%
BellSouth 6,700 267
Comverse Technology* 1,000 88
SBC Communications 5,060 215
Verizon Communications* 2,690 126
--------------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATION 696
--------------------------------------------------------------------------------
Trucking -- 1.8%
CNF Transportation 8,540 217
Navistar International* 6,800 243
--------------------------------------------------------------------------------
TOTAL TRUCKING 460
--------------------------------------------------------------------------------
Wholesale -- 1.9%
Supervalu 11,040 195
Sysco 7,510 296
--------------------------------------------------------------------------------
TOTAL WHOLESALE 491
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $24,730) 24,626
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 5.6%
Barclays Capital
6.380%, dated 07/31/00, matures
08/01/00, repurchase price
$1,435,633 (collateralized by U.S.
Treasury Notes, total market value:
$1,487,388) (A) $ 1,435 1,435
--------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT (COST $1,435) 1,435
--------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 101.4% (COST $26,165) $26,061
--------------------------------------------------------------------------------
(A) Tri-party repurchase agreement.
* Non-income producing security.
Ltd. -- Limited
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (000)
--------------------------------------------------------------------------------
[Hancock Horizon Funds logo omitted]
JULY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
GROWTH AND INCOME FUND
----------------------
ASSETS:
Investment securities at market value (Cost $26,165) $26,061
Cash 345
Receivable for investment securities sold 1,632
Dividends and interest receivable 18
------
TOTAL ASSETS 28,056
------
LIABILITIES:
Payable for investment securities purchased 2,293
Payable for capital shares redeemed 35
Accrued expenses 19
------
TOTAL LIABILITIES 2,347
------
NET ASSETS:
Fund shares of Trust Class Shares
(unlimited authorization -- no par
value) based on 1,691,770 outstanding
shares of beneficial interest 25,793
Fund shares of Class A Shares (unlimited
authorization -- no par value) based on
73 outstanding shares of beneficial
interest 1
Fund shares of Class C Shares (unlimited
authorization -- no par value) based on
73 outstanding shares of beneficial
interest 1
Undistributed net investment income 5
Accumulated net realized gain on investments 13
Net unrealized depreciation on investments (104)
-------
TOTAL NET ASSETS $25,709
-------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE -- TRUST CLASS SHARES $ 15.20
=======
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE --
CLASS A SHARES $ 15.19
=======
MAXIMUM OFFERING PRICE PER SHARE -- CLASS A SHARES
($15.19 / 94.25%) $ 16.12
=======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE-- CLASS C SHARES $ 15.17
=======
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
--------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS (000)
--------------------------------------------------------------------------------
TREASURY STRATEGIC
SECURITIES INCOME GROWTH AND
MONEY MARKET FUND BOND FUND INCOME FUND
----------------- ----------- ------------
05/31/00 (1) 05/31/00(1) 05/31/00(1)
TO 07/31/00 TO 07/31/00 TO 07/31/00
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest income $2,390 $ 404 $ 8
Dividend income -- -- 35
------ ------ -----
TOTAL INVESTMENT INCOME 2,390 404 43
------ ------ -----
EXPENSES:
Investment advisory fees 148 34 30
Less: Investment advisory fees waived (20) (12) (9)
Administrative fees 55 8 6
Custodian fees 6 1 1
Professionalfees 13 3 2
Transfer agent fees 4 4 4
Printing fees 5 1 1
Registration fees 2 1 1
Directors' fees 3 1 --
Shareholder servicing fees --
Institutional Sweep Class 6 -- --
Insurance and other expenses 6 1 1
------ ------ -----
TOTAL EXPENSES 228 42 37
------ ------ -----
NET INVESTMENT INCOME 2,162 362 6
------ ------ -----
Net realized gain from security
transactions -- 14 13
Net change in unrealized appreciation
(depreciation) on investments -- 242 (104)
------ ------ -----
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS -- 256 (91)
------ ------ -----
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $2,162 $ 618 $ (85)
====== ====== =====
(1) Commenced operations on May 31, 2000.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS (000)
--------------------------------------------------------------------------------
[Hancock Horizon Funds logo omitted]
JULY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY SECURITIES STRATEGIC INCOME GROWTH AND
MONEY MARKET FUND BOND FUND INCOME FUND
------------------- ---------------- -----------
05/31/00(1) 05/31/00(1) 05/31/00(1)
TO 07/31/00 TO 07/31/00 TO 07/31/00
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 2,162 $ 362 $ 6
Net realized gain from security transactions -- 14 13
Net change in unrealized appreciation
(depreciation) on investments -- 242 (104)
-------- ------- -------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS 2,162 618 (85)
-------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Trust Class Shares (1,861) (341) (1)
Institutional Sweep Class Shares (301) -- --
Class A Shares -- -- --
Class C Shares -- -- --
-------- ------- -------
TOTAL DISTRIBUTIONS (2,162) (341) (1)
-------- ------- -------
CAPITAL SHARE TRANSACTIONS (2):
Trust Class Shares:
Shares issued 226,273 40,138 25,840
Shares redeemed (32,899) (163) (47)
-------- ------- -------
TOTAL TRUST CLASS SHARES TRANSACTIONS 193,374 39,975 25,793
-------- ------- -------
Institutional Sweep Class Shares:
Shares issued 110,403 -- --
Shares redeemed (69,603) -- --
-------- ------- -------
TOTALINSTITUTIONAL SWEEP CLASS SHARES
TRANSACTIONS 40,800 -- --
-------- ------- -------
Class A Shares:
Shares issued 1 1 1
-------- ------- -------
TOTAL CLASS A SHARES TRANSACTIONS 1 1 1
-------- ------- -----
Class C Shares:
Shares issued -- 1 1
-------- ------- -------
TOTAL CLASS C SHARES TRANSACTIONS -- 1 1
-------- ------- -------
TOTAL INCREASE IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS 234,175 39,977 25,795
-------- ------- -------
TOTAL INCREASE IN NET ASSETS 234,175 40,254 25,709
-------- ------- -------
NET ASSETS:
Beginning of period -- -- --
-------- ------- -------
End of period $234,175 $40,254 $25,709
======== ======= =======
<FN>
(1) Commencement of operations.
(2) For capital share transactions, see footnote 5 in the Notes to Financial
Statements.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
FOR THE PERIOD ENDED JULY 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
NET ASSET NET REALIZED DISTRIBUTIONS DISTRIBUTIONS NET ASSET
VALUE, NET AND UNREALIZED FROM NET FROM VALUE,
BEGINNING INVESTMENT GAINS (LOSSES) INVESTMENT REALIZED END OF TOTAL
OF PERIOD INCOME (LOSS) ON INVESTMENTS INCOME GAINS PERIOD RETURN+
--------------------------------------------------------------------------------------------------------------------------------
TREASURY SECURITIES MONEY MARKET FUND
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TRUST CLASS SHARES
2000 (1) $ 1.00 $ 0.01 $ -- $(0.01) $ -- $ 1.00 0.98%
INSTITUTIONAL SWEEP CLASS SHARES
2000 (1) $ 1.00 $ 0.01 $ -- $(0.01) $ -- $ 1.00 0.94%
CLASS A SHARES
2000 (1) $ 1.00 $ 0.01 $ -- $(0.01) $ -- $ 1.00 0.91%
--------------------------------------------------------------------------------------------------------------------------------
STRATEGIC INCOME BOND FUND
--------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS SHARES
2000 (1) $15.00 $ 0.15 $0.18 $(0.14) $ -- $15.19 2.19%
CLASS A SHARES
2000 (1) $15.00 $ 0.16 $0.16 $(0.13) $ -- $15.19 2.15%
CLASS C SHARES
2000 (1) $15.00 $ 0.14 $0.16 $(0.11) $ -- $15.19 2.03%
--------------------------------------------------------------------------------------------------------------------------------
GROWTH AND INCOME FUND
--------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS SHARES
2000 (1) $15.00 $ -- $0.20 $ -- $ -- $15.20 1.34%
CLASS A SHARES
2000 (1) $15.00 $ -- $0.19 $ -- $ -- $15.19 1.27%
CLASS C SHARES
2000 (1) $15.00 $(0.02) $0.19 $ -- $ -- $15.17 1.13%
<FN>
+ Return is for the period indicated and has not been annualized.
(1) Commenced operations on May 31, 2000. All ratios for the period have been annualized.
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
[Hancock Horizon Funds logo omitted]
JULY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATIO OF
RATIO OF NET INVESTMENT
RATIO OF EXPENSES TO INCOME (LOSS)
RATIO OF NET INVESTMENT AVERAGE TO AVERAGE
NET ASSETS, EXPENSES TO INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
END OF AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
----------------------------------------------------------------------------------------------------------------------------------
TREASURY SECURITIES MONEY MARKET FUND
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TRUST CLASS SHARES
2000 (1) $193,374 0.58% 5.95% 0.66% 5.87% N/A
INSTITUTIONAL SWEEP CLASS SHARES
2000 (1) $ 40,800 0.83% 5.70% 0.91% 5.62% N/A
CLASS A SHARES
2000 (1) $ 1 1.08% 5.43% 1.16% 5.35% N/A
----------------------------------------------------------------------------------------------------------------------------------
STRATEGIC INCOME BOND FUND
----------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS SHARES
2000 (1) $ 40,252 0.75% 6.41% 0.96% 6.20% 16%
CLASS A SHARES
2000 (1) $ 1 1.00% 6.48% 1.15% 6.33% 16%
CLASS C SHARES
2000 (1) $ 1 1.75% 5.73% 2.74% 4.74% 16%
----------------------------------------------------------------------------------------------------------------------------------
GROWTH AND INCOME FUND
----------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS SHARES
2000 (1) $ 25,707 1.00% 0.15% 1.23% (0.08)% 10%
CLASS A SHARES
2000 (1) $ 1 1.25% 0.02% 1.50% (0.23)% 10%
CLASS C SHARES
2000 (1) $ 1 2.00% (0.73)% 2.49% (1.22)% 10%
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. ORGANIZATION:
The Arbor Fund ("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 Investments Mutual Funds Services (the "Administrator")
on October 9, 1992. SEI Investments Management Corporation ("SEI Investments"),
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, as an open-end management company.
The financial statements included herein relate to the Trust's Hancock Horizon
Family of Funds. The Hancock Horizon Family of Funds includes the Treasury
Securities Money Market Fund, the Tax Exempt Money Market Fund, the Strategic
Income Bond Fund, and the Growth and Income Fund (each a "Fund" and collectively
the "Funds"). As of July 31, 2000, the Tax Exempt Money Market Fund had not
commenced operations. The financial statements of the remaining portfolios of
the Trust are presented separately. The assets of each Fund are segregated, and
a shareholder's interest is limited to the Fund in which shares are held. The
Funds' prospectus provides a description of each Fund's investment objectives,
policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies consistently
followed by the Funds.
SECURITY VALUATION - Investments in equity securities that are traded on a
national securities exchange (or reported on NASDAQ national market system) are
stated at the last quoted sales price, if readily available for such 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. When market quotations are not readily
available, securities are valued at fair value as determined in good faith by
procedures established and approved by the Board of Trustees. 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 until maturity may be valued at their amortized cost.
Investment securities held by the Treasury Securities Money Market Fund 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 Fund'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 recognized on the
accrual basis. Costs used in determining realized gains and losses on the sales
of investment securities are those of the specific securities sold. Purchase
discounts and premiums on securities held by the Strategic Income Bond Fund are
accreted and amortized to maturity using the scientific interest method, which
approximates the effective interest method.
12
<PAGE>
[Hancock Horizon Funds logo omitted]
JULY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - The Funds invest in tri-party repurchase agreements.
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
Funds may be delayed or limited.
EXPENSES - Expenses that are directly related to one of the Funds are charged
directly to that Fund. Other operating expenses of the Trust are prorated to the
Funds on the basis of relative net assets. The Institutional Sweep Class Shares,
Class A Shares and Class C Shares each bear a specific 12b-1 or Shareholder
Servicing Fee (see Note 3 for more information).
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.
NET ASSET VALUE PER SHARE - The net asset value per share of each Fund is
calculated each business day. In general, it is computed by dividing the assets
of each Fund, less its liabilities, by the number of outstanding shares of the
Fund.
DISTRIBUTIONS - Distributions from net investment income are declared daily and
paid monthly for the Treasury Securities Money Market Fund, declared and paid
monthly for the Strategic Income Bond Fund, and declared and paid quarterly for
the Growth and Income Fund. Any net realized capital gains on sales of
securities are distributed to shareholders at least annually.
The amounts of distributions from net investment income and net realized
capital gains are determined in accordance with Federal income tax regulations,
which may differ from those amounts determined under generally accepted
accounting principles. These book/tax differences are either temporary or
permanent in nature. To the extent these differences are permanent, they are
charged or credited to paid-in-capital in the period the difference arises.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The preparation of
financial statements in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that affect
the reported amount of net assets and liabilities and disclosure of contingent
assets at the date of the financial statements and the reported results of
operations during the reporting period. Actual results could differ from those
estimates.
3. INVESTMENT ADVISORY, ADMINISTRATION, TRANSFER AGENT, CUSTODIAN, AND
DISTRIBUTION AGREEMENTS:
Hancock Bank (the "Adviser") serves as Investment Adviser to each Fund pursuant
to an investment advisory agreement dated May 31, 2000 (the "Advisory
Agreement") with the Trust. For its services, the Adviser is entitled to a fee,
that is calculated daily and paid monthly, at an annual rate based on the
average daily net assets of each Fund. The Adviser receives 0.40% of the average
daily net assets of the Treasury Securities Money Market Fund, 0.60% of the
average daily net assets of the Strategic Income Bond Fund, and 0.80% of the
average daily net assets of the Growth and Income Fund. The Adviser has
contractually agreed to waive all or a portion of its fee so that the total
annual expenses of each Fund will not exceed those stated in the Fund's
prospectus. The contractual agreement is in place for a period of one year,
ending on May 31, 2001.
13
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
--------------------------------------------------------------------------------
The Trust and the Administrator have entered into an Administration
Agreement. Under the terms of the Administration Agreement, the Administrator is
entitled to a fee calculated daily and paid monthly (expressed as a percentage
of the combined average daily net assets of the Trust) of: 0.15% up to $100
million, 0.125% on the next $250 million, 0.10% on the next $400 million and
0.08% for assets over $750 million, subject to certain minimum fee levels.
Hancock Bank serves as the transfer agent and dividend disbursing agent for
the Funds. For providing these services, Hancock Bank is paid an annual fee
payable from the Funds' assets of $5,000 per class of each Fund.
Hancock Bank serves as custodian to the Funds, and for such services is
paid an annual fee payable from the Funds' assets of 0.03% of each Fund's
average daily net assets.
The Trust and SEI Investments Distribution Co. (the "Distributor"), a
wholly-owned subsidiary of SEI Investments Company, have entered into a
Distribution Agreement. The Class A Shares of the Treasury Securities Money
Market Fund and the Class C Shares of the Strategic Income Bond Fund and Growth
and Income Fund have a distribution plan, pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended. As provided in the Distribution
Agreement and the distribution plan, the Trust will pay a fee, at an annual rate
of 0.25% of the average daily net assets attributable to Class A Shares of the
Treasury Securities Money Market Fund and 0.75% of the average daily net assets
attributable to Class C Shares of the Strategic Income Bond Fund and Growth and
Income Fund. To the extent that the applicable shares are held through Hancock
Bank or any of its affiliates providing custodian, brokerage or
investment-related services, including Hancock Investment Securities, Inc.,
those entities may receive the distribution and servicing fees, payable from the
Funds' assets, applicable to that class of shares.
The Distributor and the Trust have adopted a shareholder servicing plan
pursuant to which a shareholder servicing fee of 0.25% attributable to the
average daily net assets of Class A and Institutional Sweep Class Shares of the
Treasury Securities Money Market Fund and 0.25% of the average daily net assets
of Class A and Class C Shares of the Strategic Income Bond Fund and Growth and
Income Fund. To the extent that the applicable shares are held through Hancock
Bank or any of its affiliates providing custodial, brokerage or investment-
related services, including Hancock Investment Services, Inc., those entities
may receive shareholder servicing fees, payable from the Funds' assets,
applicable to that class of shares
4. TRANSACTIONS WITH AFFILIATES:
Certain officers and a trustee of the Trust are also officers of the
Administrator and/or Distributor. Such officers are paid no fees by the Trust
for serving in their respective roles.
The Funds have entered into agreements with the Distributor to act as an
agent in placing repurchase agreements for the Funds. For its services, the
Distributor received $18,817 for the period ended July 31, 2000.
14
<PAGE>
[Hancock Horizon Funds logo omitted]
JULY 31, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
5. CAPITAL SHARES TRANSACTIONS:
Capital share transactions for the funds were as follows (000):
TREASURY STRATEGIC GROWTH
SECURITIES INCOME AND
MONEY MARKET BOND INCOME
FUND FUND FUND
------------ ----------- -----------
05/31/00(1) 05/31/00(1) 05/31/00(1)
TO TO TO
07/31/00 07/31/00 07/31/00
----------- ----------- -----------
Trust Class Shares:
Shares Issued 226,273 2,661 1,695
Shares Redeemed (32,899) (11) (3)
-------- ------ ------
Total Trust Class
Shares Transactions 193,374 2,650 1,692
-------- ------ ------
Institutional Sweep
Class Shares:
Shares Issued 110,403 -- --
Shares Redeemed (69,603) -- --
-------- ------ ------
Total Institutional Sweep
Class Shares
Transactions 40,800 -- --
-------- ------ ------
Class A Shares:
Shares Issued 1 -- --
-------- ------ ------
Total Class A Shares
Transactions 1 -- --
-------- ------ ------
Class C Shares:
Shares Issued -- -- --
-------- ------ ------
TOTAL CLASS C SHARES
TRANSACTIONS -- -- --
-------- ------ ------
Net Change in Capital
Shares 234,175 2,650 1,692
======== ====== ======
(1) Commencement of operations.
Amounts designated as "--" are either 0 or have been rounded to 0.
6. INVESTMENT TRANSACTIONS
The cost of security purchases and the proceeds from the sale of securities,
other than temporary cash investments, during the period ended July 31, 2000
were as follows:
U.S. GOVERNMENT OTHER INVESTMENT
SECURITIES SECURITIES
--------------- -----------------
PURCHASES SALES PURCHASES SALES
(000) (000) (000) (000)
--------- ----- --------- -----
Strategic Income
Bond Fund $29,150 $5,210 $ 9,416 $ --
Growth and
Income Fund -- -- 27,408 2,347
At July 31, 2000, 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 reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation on investment securities at July
31, 2000 is as follows:
NET
UNREALIZED
APPRECIATED DEPRECIATED APPRECIATION
SECURITIES SECURITIES (DEPRECIATION)
(000) (000) (000)
----------- ----------- --------------
Strategic Income
Bond Fund $ 321 $ (79) $ 242
Growth and
Income Fund 1,203 (1,307) (104)
7. IN-KIND TRANSFERS OF SECURITIES
During the period ended July 31,2000, the Strategic Income Bond Fund and the
Growth and Income Fund issued 272,723 and 325,079 shares respectively, of
beneficial interest in exchange for securities from an account managed by
Hancock Bank valued at $4,171,002 and $5,019,003, respectively.
15
<PAGE>
--------------------------------------------------------------------------------
NOTES
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
NOTES
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
NOTES
--------------------------------------------------------------------------------
<PAGE>
[graphic omitted]
INVESTMENT ADVISER
Hancock Bank
One Hancock Plaza
P.O. Box 4019
Gulfport, Mississippi 39502
DISTRIBUTOR
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
THIS MATERIAL MUST BE PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS.
THE HANCOCK HORIZON FUNDS:
O NOT FDIC INSURED
O NO BANK GUARANTEE
O MAY LOSE VALUE
[Hancock Horizon Funds logo omitted]
FOR MORE INFORMATION CALL 1.800.522.6542 EXT.4400
WWW.HANCOCKBANK.COM
