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Rembrandt Funds(R)
Investment Advisor:
LaSalle Street Capital Management, Ltd.
This Statement of Additional Information is not a prospectus. It is intended to
provide additional information regarding the activities and operations of
Rembrandt Funds(R) (the "Trust") and should be read in conjunction with the
Trust's prospectuses dated April 30, 1996. Prospectuses may be obtained through
the Distributor, Rembrandt(R) Financial Services Company, 680 East Swedesford
Road, Wayne, Pennsylvania 19087.
TABLE OF CONTENTS
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<S> <C>
THE TRUST............................. 3
DESCRIPTION OF PERMITTED INVESTMENTS.. 3
INVESTMENT LIMITATIONS................ 15
NON-FUNDAMENTAL POLICIES.............. 16
THE ADVISOR........................... 17
THE SUB-ADVISOR....................... 19
THE ADMINISTRATOR..................... 20
THE DISTRIBUTOR....................... 21
TRUSTEES AND OFFICERS OF THE TRUST.... 23
COMPUTATION OF YIELD.................. 25
CALCULATION OF TOTAL RETURN........... 28
PURCHASE AND REDEMPTION OF SHARES..... 31
LETTER OF INTENT...................... 32
DETERMINATION OF NET ASSET VALUE...... 32
TAXES................................. 33
PORTFOLIO TRANSACTIONS................ 36
TRADING PRACTICES AND BROKERAGE....... 37
DESCRIPTION OF SHARES................. 42
SHAREHOLDER LIABILITY................. 42
LIMITATION OF TRUSTEES' LIABILITY..... 45
EXPERTS............................... 45
APPENDIX.............................. A-1
FINANCIAL INFORMATION................. F-1
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April 30, 1996
REM-F-007-03
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THE TRUST
Rembrandt Funds(R) is an open-end management investment company established as a
Massachusetts business trust pursuant to a Declaration of Trust dated September
17, 1992. The Declaration of Trust permits the Trust to offer separate series
of units of beneficial interest ("shares") and different classes of shares of
each fund. Shareholders may purchase shares through two separate classes, the
Trust Class and the Investor Class, which provide for variations in distribution
costs, voting rights and dividends. Except for these differences between Trust
Class shares and Investor Class shares, each share of each fund represents an
equal proportionate interest in that fund. See "Description of Shares." This
Statement of Additional Information relates to the Trust Class shares and
Investor Class shares of the following funds: Value Fund, Growth Fund, Latin
America Equity Fund, Small Cap Fund, International Equity Fund, TransEurope
Fund, Asian Tigers Fund (collectively, the "Equity Funds"), Fixed Income Fund
(formerly Taxable Fixed Income Fund), Intermediate Government Fixed Income Fund
(formerly Short/Intermediate Government Fixed Income Fund), Tax-Exempt Fixed
Income Fund, Global Fixed Income Fund, Limited Volatility Fixed Income Fund
(collectively, the "Fixed Income Funds"), Balanced Fund (the "Balanced Fund"),
Money Market Fund (formerly Taxable Money Market Fund), Government Money Market
Fund, Treasury Money Market Fund and Tax-Exempt Money Market Fund (collectively,
the "Money Market Funds" and together with the Equity, Balanced and Fixed Income
Funds, the "Funds").
DESCRIPTION OF PERMITTED INVESTMENTS
Variable Amount Master Demand Notes
Variable amount master demand notes may or may not be backed by bank letters of
credit. These notes permit the investment of fluctuating amounts at varying
market rates of interest pursuant to direct arrangements between the Trust, as
lender, and the borrower. Such notes provide that the interest rate on the
amount outstanding varies on a daily, weekly or monthly basis depending upon a
stated short-term interest rate index. Both the lender and the borrower have
the right to reduce the amount of outstanding indebtedness at any time. There
is no secondary market for the notes. It is not generally contemplated that
such instruments will be traded.
Brady Bonds
"Brady Bonds" are a particular type of Latin American debt security. During
1990, the Mexican external debt markets experienced significant changes with the
completion of the "Brady Plan" restructurings in those markets. The
restructurings provided for the exchange of loans and cash for newly issued
bonds ("Brady Bonds"). Brady Bonds fall into two categories: collaterized
Brady Bonds and bearer Brady Bonds. Both types of Brady Bonds are issued in
various currencies, primarily the U.S. dollar. Brady Bonds are actively traded
in the over-the-counter secondary market for Latin American debt. U.S. dollar-
denominated collaterized bonds, which may be fixed par bonds or floating rate
discount bonds, are collaterized in full as to principal by U.S. Treasury
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zero coupon bonds having the same maturity. At least one year of rolling
interest payments are collaterized by cash or other investments.
Floating Rate Notes
Floating rate notes will normally involve industrial development or revenue
bonds which provide that the rate of interest is set as a specific percentage of
a designated base rate (such as the prime rate) at a major commercial bank, and
that the Fund can demand payment of the obligation at all times or at stipulated
dates on short notice (not to exceed 30 days) at par plus accrued interest. A
Fund may use the longer of the period required before the Fund is entitled to
prepayment under such obligations or the period remaining until the next
interest rate adjustment date for purposes of determining the maturity. Such
obligations are frequently secured by letters of credit or other credit support
arrangements provided by banks. The quality of the underlying credit or of the
bank, as the case may be, must be rated in the third highest rating category or,
in the Advisor's opinion, be of comparable quality. The Advisor will monitor
the earning power, cash flow and liquidity ratios of the issuers of such
instruments and the ability of an issuer of a demand instrument to pay principal
and interest on demand. The Advisor may purchase other types of tax-exempt
instruments as long as they are of a quality equivalent to the bond or
commercial paper ratings stated above.
GNMA Certificates
GNMA Certificates are securities issued by the Government National Mortgage
Association ("GNMA"), a wholly-owned U.S. Government corporation which
guarantees the timely payment of principal and interest. The market value and
interest yield of these instruments can vary due to market interest rate
fluctuations and early prepayments of underlying mortgages. These securities
represent ownership in a pool of federally insured mortgage loans. GNMA
certificates consist of underlying mortgages with a maximum maturity of 30
years. However, due to scheduled and unscheduled principal payments, GNMA
certificates have a shorter average maturity and, therefore, less principal
volatility than a comparable 30-year bond. Since prepayment rates vary widely,
it is not possible to accurately predict the average maturity of a particular
GNMA pool. The scheduled monthly interest and principal payments relating to
mortgages in the pool will be "passed through" to investors. GNMA securities
differ from conventional bonds in that principal is paid back to the certificate
holders over the life of the loan rather than at maturity. As a result, there
will be monthly scheduled payments of principal and interest. In addition,
there may be unscheduled principal payments representing prepayments on the
underlying mortgages. Although GNMA certificates may offer yields higher than
those available from other types of U.S. Government securities, GNMA
certificates may be less effective than other types of securities as a means of
"locking in" attractive long-term rates because of the prepayment feature. For
instance, when interest rates decline, the value of a GNMA certificate likely
will not rise as much as comparable debt securities due to the prepayment
feature. In addition, these prepayments can cause the price of a GNMA
certificate originally purchased at a premium to decline in price to its par
value, which may result in a loss.
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Junk Bonds
Junk Bonds are debt securities which are rated below investment grade or are not
rated. When debt securities are rated, it is expected that such ratings will
generally be below investment grade. Below investment grade securities are debt
securities rated BB or lower by S&P or Ba or lower by Moody's or, if unrated,
deemed by the Advisor or Sub-Advisor to be of comparable quality. Securities
rated below investment grade are the equivalent of high yield, high risk bonds,
commonly known as "junk bonds."
Such securities involve greater risk of default or price declines than
investment grade securities due to changes in the issuer's creditworthiness and
the outlook for economic growth. The market for these securities may be less
active, causing market price volatility and limited liquidity in the secondary
market. This may limit the Fund's ability to sell such securities at their
market value. In addition, the market for these securities may also be
adversely affected by legislative and regulatory developments. Credit quality
in the junk bond market can change suddenly and unexpectedly, and even recently
issued credit ratings may not fully reflect the actual risks imposed by a
particular security.
Mortgage-Backed Securities
Two principal types of mortgage-backed securities are collateralized mortgage
obligations ("CMOs") and real estate mortgage investment conduits ("REMICs"),
which are rated in one of the two highest rating categories by a nationally
recognized statistical rating organization ("NRSRO"). CMOs are securities
collateralized by mortgages, mortgage pass-throughs, mortgage pay-through bonds
(bonds representing an interest in a pool of mortgages where the cash flow
generated from the mortgage collateral pool is dedicated to bond repayment), and
mortgage-backed bonds (general obligations of the issuers payable out of the
issuers' general funds that are secured by a first lien on a pool of single
family detached properties). Many CMOs are issued with a number of classes or
series which have different maturities and are retired in sequence.
Investors purchasing such CMOs in the shortest maturities receive or are
credited with their pro rata portion of the scheduled payments of interest and
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principal on the underlying mortgages plus all unscheduled prepayments of
principal up to a predetermined portion of the total CMO obligation. Until that
portion of such CMO obligation is repaid, investors in the longer maturities
receive interest only. Accordingly, the CMOs in the longer maturity series are
less likely than other mortgage pass-throughs to be prepaid prior to their
stated maturity. Although some of the mortgages underlying CMOs may be
supported by various types of insurance, and some CMOs may be backed by GNMA
certificates or other mortgage pass-throughs issued or guaranteed by U.S.
Government agencies or instrumentalities, the CMOs themselves are not generally
guaranteed. FHLMC has in the past guaranteed only the ultimate collection of
principal of the underlying mortgage loan; however, FHLMC now issues mortgage-
backed securities (FHLMC Gold PCs) which also guarantee timely payment of
monthly principal reductions. Government and private guarantees do not extend
to the securities' value, which is likely to vary inversely with fluctuations in
interest rates.
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Certain of the Funds also may invest in parallel pay CMOs and Planned
Amortization Class CMOs ("PAC Bonds"). Parallel pay CMOs are structured to
provide payments of principal on each payment date to more than one class.
These simultaneous payments are taken into account in calculating the stated
maturity date or final distribution date of each class, which, as with other CMO
structures, must be retired by its stated maturity date or final distribution
date, but may be retired earlier. PAC Bonds are always parallel pay CMOs with
the required principal payment on such securities having the highest priority
after interest has been paid to all classes.
REMICs, which were authorized under the Tax Reform Act of 1986, are private
entities formed for the purpose of holding a fixed pool of mortgages secured by
an interest in real property. REMICs are similar to CMOs in that they issue
multiple classes of securities.
Asset-Backed Securities
Asset-backed securities include company receivables, truck and auto loans,
leases, and credit card receivables. These issues may be traded over-the-
counter and typically have a short-intermediate maturity structure depending on
the paydown characteristics of the underlying financial assets which are passed
through to the security holder.
Principal and interest on non-mortgage asset-backed securities may be guaranteed
up to certain amounts and for a certain time period by a letter of credit issued
by a financial institution (such as a bank or insurance company) unaffiliated
with the issuers of such securities. The purchase of non-mortgage asset-backed
securities raises risk considerations peculiar to the financing of the
instruments underlying such securities. For example, there is a risk that
another party could acquire an interest in the obligations superior to that of
the holder of the asset-backed securities. There is the possibility that
recoveries on repossessed collateral may not, in some cases, be available to
support payments on those securities. Asset-backed securities entail prepayment
risk, which may vary depending on the type of asset, but is generally less than
the prepayment risk associated with mortgage-backed securities. In addition,
unlike most other asset-backed securities, credit card receivables are unsecured
obligations of the card holder.
STRIPS
Separately traded interest and principal securities ("STRIPS") are component
parts of U.S. Treasury Securities traded through the Federal Book-Entry System.
The Advisor will purchase only STRIPS that it determines are liquid or, if
illiquid, that do not violate the Fund's investment policy concerning
investments in illiquid securities. Consistent with Rule 2a-7, the Advisor will
purchase for Money Market Funds only STRIPS that have a remaining maturity of
397 days or less; therefore, the Money Market Funds currently may purchase only
interest component parts of U.S. Treasury Securities. While there is no
limitation on the percentage of a Fund's assets that may be comprised of STRIPS,
the Advisor will monitor the level of such holdings to avoid the risk of
impairing shareholders' redemption rights and of deviations in the value of
shares of the Money Market Funds.
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Repurchase Agreements
Repurchase agreements, into which each of the Funds, except the Treasury Money
Market Fund, is permitted to enter, are agreements by which a person (e.g., a
----
Fund) obtains a security and simultaneously commits to return the security to
the seller (primary securities dealer recognized by the Federal Reserve Bank of
New York or a national member bank as defined in Section 3(d)(1) of the Federal
Deposit Insurance Act, as amended) at an agreed upon price (including principal
and interest) on an agreed upon date within a number of days (usually not more
than seven) from the date of purchase. The resale price reflects the purchase
price plus an agreed upon market rate of interest which is unrelated to the
coupon rate or maturity of the underlying security. A repurchase agreement
involves the obligation of the seller to pay the agreed upon price, which
obligation is in effect secured by the value of the underlying security.
Repurchase agreements are considered to be loans by the Funds for purposes of
their investment limitations. The repurchase agreements entered into by the
Funds will provide that the underlying security at all times shall have a value
at least equal to 100% of the resale price stated in the agreement (the Advisor
monitors compliance with this requirement). Under all repurchase agreements
entered into by the Funds, the Custodian or its agent must take possession of
the underlying collateral. However, if the seller defaults, the Funds could
realize a loss on the sale of the underlying security to the extent that the
proceeds of sale including accrued interest are less than the resale price
provided in the agreement including interest. In addition, even though the
Bankruptcy Code provides protection for most repurchase agreements, if the
seller should be involved in bankruptcy or insolvency proceedings, the Funds may
incur delay and costs in selling the underlying security or may suffer a loss of
principal and interest if the Funds are treated as an unsecured creditors and
required to return the underlying securities to the seller's estate.
Municipal Securities
Municipal notes include, but are not limited to, general obligation notes, tax
anticipation notes (notes sold to finance working capital needs of the issuer in
anticipation of receiving taxes on a future date), revenue anticipation notes
(notes sold to provide needed cash prior to receipt of expected non-tax revenues
from a specific source), bond anticipation notes, certificates of indebtedness,
demand notes and construction loan notes. A Fund's investments in any of the
notes described above will be limited to those obligations (i) rated in the
highest two rating categories by an NRSRO or (ii) if not rated, of equivalent
quality in the Advisor's judgment.
Municipal bonds must be rated in the highest four rating categories by an NRSRO
at the time of investment or, if unrated, must be deemed by the Advisor to have
essentially the same characteristics and quality as bonds rated in the above
rating categories. The Advisor may purchase industrial development and
pollution control bonds if the interest paid is exempt from federal income tax.
These bonds are issued by or on behalf of public authorities to raise money to
finance various privately-operated facilities for business and manufacturing,
housing, sports, and pollution control. These bonds are also used to finance
public facilities such as airports, mass transit systems, ports and parking
facilities. The payment of the principal and interest on such bonds
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is dependent solely on the ability of the facility's user to meet its financial
obligations and the pledge, if any, of real and personal property so financed as
security for such payment.
Commercial Paper
Investments in tax-exempt commercial paper will be limited to investments in
obligations rated in one of the two highest rating categories by an NRSRO at the
time of investment, or determined by the Advisor to be of equivalent quality.
Standby Commitments, or Puts
The Advisor has the authority to purchase securities at a price which would
result in a yield to maturity lower than that generally offered by the seller at
the time of purchase when they can simultaneously acquire the right to sell the
securities back to the seller, the issuer, or a third party (the "writer") at an
agreed-upon price at any time during a stated period or on a certain date. Such
a right is generally denoted as a "standby commitment" or a "put." The purpose
of engaging in transactions involving puts is to maintain flexibility and
liquidity to permit a Fund to meet redemptions and remain as fully invested as
possible in municipal securities. The Funds reserve the right to engage in put
transactions. The right to put the securities depends on the writer's ability
to pay for the securities at the time the put is exercised. The Funds will
limit their put transactions to institutions which the Advisor believes present
minimal credit risks, and the Advisor will use its best efforts to initially
determine and continue to monitor the financial strength of the sellers of the
options by evaluating their financial statements and such other information as
is available in the marketplace. It may, however, be difficult to monitor the
financial strength of the writers because adequate current financial information
may not be available. In the event that any writer is unable to honor a put for
financial reasons, the Fund would be general creditor (i.e., on a parity with
----
all other unsecured creditors) of the writer. Furthermore, particular
provisions of the contract between the Fund and the writer may excuse the writer
from repurchasing the securities; for example, a change in the published rating
of the underlying municipal securities or any similar event that has an adverse
effect on the issuer's credit or a provision in the contract that the put will
not be exercised except in certain special cases, for example, to maintain
portfolio liquidity. The Fund could, however, at any time sell the underlying
portfolio security in the open market or wait until the portfolio security
matures, at which time it should realize the full par value of the security.
The municipal securities purchased subject to a put may be sold to third persons
at any time, even though the put is outstanding, but the put itself, unless it
is an integral part of the security as originally issued, may not be marketable
or otherwise assignable. Therefore, the put would have value only to the Fund.
Sale of the securities to third parties or lapse of time with the put
unexercised may terminate the right to put the securities. Prior to the
expiration of any put option, the Fund could seek to negotiate terms for the
extension of such an option. If such a renewal cannot be negotiated on terms
satisfactory to the Fund, the Fund could sell the portfolio security. The
maturity of the underlying security will generally be different from that of the
put. There will be no limit to the percentage of portfolio securities that the
Fund may purchase subject
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to a put, but the amount paid directly or indirectly for puts which are not
integral parts of the security as originally issued which are held by the Fund
will not exceed 1/2 of 1% of the value of the total assets of such Fund
calculated immediately after any such put is acquired. For the purpose of
determining the "maturity" of securities purchased subject to an option to put,
and for the purpose of determining the dollar-weighted average maturity of the
Fund including such securities, the Trust will consider "maturity" to be the
first date on which it has the right to demand payment from the writer of the
put although the final maturity of the security is later than such date.
Options
Put and call options may be used by a Fund from time to time as the Advisor
deems to be appropriate except as limited by each Fund's investment
restrictions, but will not be used for speculative purposes. Among the
strategies the Advisor may use are: protective puts on stocks owned by a Fund,
buying calls on stocks a Fund is attempting to buy and writing covered calls on
stocks a Fund owns. The aggregate value of option positions may not exceed 10%
of a Fund's net assets at the time such options are entered into by the Fund.
A put option gives the purchaser of the option the right to sell, and the writer
the obligation to buy, the underlying security at any time during the option
period. A call option gives the purchaser of the option the right to buy, and
the writer of the option the obligation to sell, the underlying security at any
time during the option period. The premium paid to the writer is the
consideration for undertaking the obligations under the option contract. The
initial purchase (sale) of an option contract is an "opening transaction". In
order to close out an option position, a Fund may enter into a "closing
transaction" -- the sale (purchase) of an option contract on the same security
with the same exercise price and expiration date as the option contract
originally opened.
A Fund may buy protective put options from time to time on such portion of its
assets as the Advisor determines is appropriate in seeking the Fund's investment
objective. The advantage to the Fund of buying the protective put is that if
the price of the stock falls during the option period, the Fund may exercise the
put and receive the higher exercise price for the stock. However, if the
security rises in value, the Fund will have paid a premium for the put which
will expire unexercised.
A Fund may buy call options from time to time as the Advisor determines is
appropriate in seeking the Fund's investment objective. The Fund may elect to
buy calls on stocks that the Fund is trying to buy. The advantage of the Fund
buying the fiduciary call is that if the price of the stock rises during the
option period, the Fund may exercise the call and buy the stock for the lower
exercise price. If the security falls in value, the Fund will have paid a
premium for the call (which will expire worthless) but will be able to buy the
stock at a lower price.
A Fund may write covered call options from time to time on such portion of its
assets as the Advisor determines is appropriate in seeking the Fund's investment
objective. The advantage to
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the Fund of writing covered call options is that the Fund receives a premium
which is additional income. However, if the security rises in value, the Fund
may not fully participate in the market appreciation.
During the option period, a covered call option writer may be assigned an
exercise notice by the broker-dealer through whom such call option was sold
requiring the writer to deliver the underlying security against payment of the
exercise price. This obligation is terminated upon the expiration of the option
period or at such earlier time in which the writer effects a closing purchase
transaction. A closing purchase transaction is one in which a Fund, when
obligated as a writer of an option, terminates its obligation by purchasing an
option of the same series as the option previously written. A closing purchase
transaction cannot be effected with respect to an option once the option writer
has received an exercise notice for such option.
The market value of an option generally reflects the market price of an
underlying security. Other principal factors affecting market value include
supply and demand, interest rates, the pricing volatility of the underlying
security and the time remaining until the expiration date.
There are risks associated with option transactions, including the following:
(i) the success of a hedging strategy may depend on the ability of the Advisor
to predict movements in the prices of the individual securities, fluctuations in
markets and movements in interest rates; (ii) there may be imperfect correlation
between the movement in prices of securities held by a Fund; (iii) there may not
be a liquid secondary market for options; and (iv) while a Fund will receive a
premium when it writes covered call options, it may not participate fully in a
rise in the market value of the underlying security.
Foreign Securities
Foreign securities may be U.S. dollar denominated or non-U.S. dollar denominated
obligations or securities of foreign issuers, including obligations of foreign
branches of U.S. banks and of foreign banks, including European certificates of
deposit, European time deposits, Canadian time deposits and Yankee certificates
of deposit, and investments in Canadian commercial paper, foreign securities and
Europaper. In addition, a Fund may invest in American Depositary Receipts.
These instruments may subject a Fund to investment risks that differ in some
respects from those related to investments in obligations of U.S. domestic
issuers. Such risks include future adverse political and economic developments,
the possible imposition of withholding taxes on interest or other income,
possible seizure, nationalization, or expropriation of foreign deposits, the
possible establishment of exchange controls or taxation at the source, greater
fluctuations in value due to changes in exchange rates, or the adoption of other
foreign governmental restrictions which might adversely affect the payment of
principal and interest on such obligations. Such investments may also entail
higher custodial fees and sales commissions than domestic investments. Foreign
issuers of securities or obligations are often subject to accounting treatment
and engage in business practices different from those respecting domestic
issuers of similar securities or obligations. Foreign branches of U.S. banks and
foreign banks may be subject to less stringent reserve requirements than those
applicable to domestic branches of U.S. banks.
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Further, it may be more difficult for the Fund's agents to keep currently
informed about corporate actions which may affect the prices of portfolio
securities. Communications between the U.S. and foreign countries may be less
reliable than within the U.S., increasing the risk of delayed settlements of
portfolio securities. Certain markets may require payment for securities before
delivery. The Fund's ability and decisions to purchase and sell portfolio
securities may be affected by laws or regulations relating to the convertibility
of currencies and repatriation of assets. Some countries restrict the extent to
which foreigners may invest in their securities markets.
The Latin America Equity Fund may invest in securities denominated in currencies
of Latin American countries. Accordingly, changes in the value of these
currencies against the U.S. dollar will result in corresponding changes in the
U.S. dollar value of the Fund's assets denominated in those currencies. Some
Latin American countries also may have managed currencies, which are not free
floating against the U.S. dollar. In addition, there is risk that certain Latin
American countries may restrict the free conversion of their currencies into
other currencies. Further, it may be difficult to reduce the Fund's Latin
American currency risk through hedging. Any devaluations in the currencies in
which the Fund's portfolio securities are denominated may have a detrimental
impact on the Fund's net asset value.
Certain risks associated with international investments and investing in
smaller, developing capital markets are heightened for investments in Latin
American countries. For example, some of the currencies of Latin American
countries have experienced steady devaluations relative to the U.S. dollar, and
major adjustments have been made in certain of these currencies periodically.
Any devaluations in the currencies in which the Fund's portfolio securities are
denominated may have a detrimental impact on the Fund. Furthermore, Latin
American currencies may not be internationally traded. Also, many Latin
American countries have experienced substantial, and in some periods extremely
high, rates of inflation for many years. Inflation and rapid fluctuations in
inflation rates have had and may continue to have very negative effects on the
economies and securities markets of certain Latin American countries. In
addition, although there is a trend toward less government involvement in
commerce, governments of many Latin American countries have exercised and
continue to exercise substantial influence over many aspects of the private
sector. In certain cases, the government still owns or controls many companies,
including some of the largest companies in the country. Accordingly, government
actions in the future could have a significant effect on economic conditions in
Latin American countries, which could affect private sector companies and the
Fund, as well as the value of securities in the Fund's portfolio.
Securities of Latin American issuers pose greater liquidity risks and other
risks than securities of companies located in developed countries and traded in
more established markets. Low liquidity in markets may adversely affect the
Fund's ability to buy and sell securities and cause increased volatility. Many
of the countries in Latin America may at various times have less stable
political environments than more developed nations. Changes of control may
adversely affect the pricing of securities from time to time. Some of the Latin
American countries may afford only limited opportunities for investing. In
certain Latin American countries, the Fund may be able to invest
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solely or primarily through ADRs or similar securities and government approved
investment vehicles (including closed-end investment funds). For example, due
to Chile's current investment restrictions (in most cases, capital invested
directly in Chile cannot be repatriated for at least one year), the Fund's
investments in Chile primarily will be through investments in ADRs and
established Chilean investment companies not subject to repatriation
restrictions. The Fund may invest up to 10% of its total assets in the
securities of closed-end investment companies. If the Fund invests in closed-
end investment companies, the Fund's shareholders will bear not only their
proportionate share of the expenses of the Fund, but also will directly bear
duplicative fees (including advisory fees) of the underlying closed-end fund.
When-Issued Securities
The Funds will only make commitments to purchase obligations on a when-issued
basis with the intention of actually acquiring the securities, but may sell them
before the settlement date. The when-issued securities are subject to market
fluctuation, and the purchaser accrues no interest on the security during this
period. The payment obligation and the interest rate that will be received on
the securities are each fixed at the time the purchaser enters into the
commitment. Purchasing obligations on a when-issued basis may be used as a form
of leveraging because the purchaser may accept the market risk prior to payment
for the securities. The Funds will segregate liquid, high grade assets in an
amount at least equal in value to the Funds' commitments to purchase when-issued
securities. If the value of these assets declines, the Funds will place
additional liquid assets aside on a daily basis so that the value of the assets
set aside is equal to the amount of such commitments. Consequently, the Funds
will not use such purchases for leveraging.
Restricted Securities
Restricted securities are securities that may not be sold to the public without
registration under the Securities Act of 1933 (the "1933 Act") absent an
exemption from registration. Certain of the permitted investments of the Funds
may be restricted securities, and the Advisor may invest up to 5% of the total
assets of a Fund in restricted securities provided it determines that at the
time of investment such securities are not illiquid (generally, an illiquid
security cannot be disposed of within seven days in the ordinary course of
business at its full value), based on guidelines and procedures developed and
established by the Board of Trustees of the Trust. The Board of Trustees will
periodically review such procedures and guidelines and will monitor the
Advisor's implementation of such procedures and guidelines. Under these
procedures and guidelines, the Advisor will consider the frequency of trades and
quotes for the security, the number of dealers in, and potential purchasers for,
the securities, dealer undertakings to make a market in the security and the
nature of the security and of the marketplace trades. In purchasing such
restricted securities, the Advisor intends to rely upon the exemption from
registration provided by Rule 144A under the 1933 Act.
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Securities Lending
Securities loaned by a Fund pursuant to an agreement which requires collateral
to secure the loan will not be made if, as a result, the aggregate amount of all
outstanding securities loans for the Fund exceed one-third of the value of a
Fund's total assets taken at fair market value. A Fund will continue to receive
interest on the loaned securities while simultaneously earning interest on the
investment of the cash collateral in U.S. Government securities. However, a
Fund will normally pay lending fees to such broker-dealers and related expenses
from the interest earned on invested collateral. Loans are made only to
borrowers deemed by the Advisor to be of good standing and when, in the judgment
of the Advisor, the consideration which can be earned currently from such
securities loans justifies the attendant risk. Any loan may be terminated by
either party upon reasonable notice to the other party. The Funds may use the
Distributor or a broker-dealer affiliate of the Advisor as a broker in these
transactions.
Investment Company Shares
Investments in shares of open-end funds and closed-end funds, as described in
the prospectus, may result in the layering of expenses. Since such funds pay
management fees and other expenses, shareholders of a Fund would indirectly pay
both Fund expenses and the expenses of underlying funds with respect to Fund
assets invested therein. Under applicable regulations, the Funds are prohibited
from acquiring the securities of other investment companies if, as a result of
such acquisition, the Funds own more than 3% of the total voting stock of the
company; securities issued by any one investment company represent more than 5%
of the Fund's total assets; or securities (other than treasury stock) issued by
all investment companies represent more than 10% of the total assets of the
Funds. See also "Investment Limitations."
The Trust has received an exemptive order from the Securities and Exchange
Commission ("SEC") to permit the Funds to invest in shares of the Money Market
Funds. Pursuant to this order, each Fund is permitted to invest in shares of
the Money Market Funds provided that the Advisor and any of its affiliates waive
management fees and other expenses with respect to Fund assets invested therein.
It is the position of the staff of the SEC that certain nongovernmental issuers
of CMOs and REMICs constitute investment companies pursuant to the Investment
Company Act of 1940, as amended ("1940 Act") and either (a) investments in such
instruments are subject to the limitations set forth above or (b) the issuers of
such instruments have been granted orders from the SEC exempting such
instruments from the definition of investment company.
Standard & Poor's Depositary Receipts ("SPDRs")
SPDRs are interests in a unit investment trust ("UIT") that may be obtained from
the UIT or purchased in the secondary market as SPDRs are listed on the American
Stock Exchange.
- 12 -
<PAGE>
The UIT will issue SPDRs in aggregations of 50,000 known as "Creation Units" in
exchange for a "Portfolio Deposit" consisting of (a) a portfolio of securities
substantially similar to the component securities ("Index Securities") of the
Standard & Poor's 500 Composite Stock Price Index (the "S&P Index"), (b) a cash
payment equal to a pro rata portion of the dividends accrued on the UIT's
portfolio securities since the last dividend payment by the UIT, net of expenses
and liabilities, and (c) a cash payment or credit ("Balancing Amount") designed
to equalize the net asset value of the S&P Index and the net asset value of a
Portfolio Deposit.
SPDRs are not individually redeemable, except upon termination of the UIT. To
redeem, the Funds must accumulate enough SPDRs to reconstitute a Creation Unit.
The liquidity of small holdings of SPDRs, therefore, will depend upon the
existence of a secondary market. Upon redemption of a Creation Unit, the Funds
will receive Index Securities and cash identical to the Portfolio Deposit
required of an investor wishing to purchase a Creation Unit that day.
The price of SPDRs is derived and based upon the securities held by the UIT.
Accordingly, the level of risk involved in the purchase or sale of a SPDR is
similar to the risk involved in the purchase or sale of traditional common
stock, with the exception that the pricing mechanism for SPDRs is based on a
basket of stocks. Disruptions in the markets for the securities underlying
SPDRs purchased or sold by the Funds could result in losses on SPDRs. Trading
in SPDRs involves risks similar to those risks, described above under "Options,"
involved in the writing of options on securities.
Swaps, Caps and Floors
Swap agreements are sophisticated hedging instruments that typically involve a
small investment of cash relative to the magnitude of risk assumed. As a
result, swaps can be highly volatile and have a considerable impact on the
Fund's performance. Swap agreements are subject to risks related to the
counterparty's ability to perform, and may decline in value if the
counterparty's creditworthiness deteriorates. The Fund may also suffer losses
if it is unable to terminate outstanding swap agreements or reduce its exposure
through offsetting transactions. Any obligation the Fund may have under these
types of arrangements will be covered by setting aside liquid, high grade debt
securities in a segregated account. The Fund will enter into swaps only with
counterparties believed to be creditworthy.
In a typical cap or floor agreement, the buyer of an interest rate cap obtains
the right to receive payments to the extent that a specific interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate falls
below an agreed-upon level. An interest rate collar combines elements of buying
a cap and selling a floor. In swap agreements, if the Fund agrees to exchange
payments in dollars for payments in foreign currency, the swap agreement would
tend to decrease the Fund's exposure to U.S. interest rates and increase its
exposure to foreign currency and interest rates. Caps and floors have an effect
similar to buying or writing options. Depending on how they are used, swap
agreements may increase or decrease the overall volatility of the Fund's
investment and their share price and yield.
- 13 -
<PAGE>
INVESTMENT LIMITATIONS
Each Fund has adopted certain investment limitations which, in addition to those
limitations in the Prospectus, are fundamental and may not be changed without
approval by a majority vote of the Fund's outstanding shares. The term
"majority of the Fund's outstanding shares" means the vote of (i) 67% or more of
the Fund's shares present at a meeting, if more than 50% of the outstanding
shares of the Fund are present or represented by proxy, or (ii) more than 50% of
the Fund's outstanding shares, whichever is less.
No Fund may:
1. Acquire more than 10% of the voting securities of any one issuer.
2. Invest in companies for the purpose of exercising control.
3. Act as an underwriter of securities of other issuers except as it may be
deemed an underwriter under federal securities laws in selling a Fund
security.
4. Issue senior securities (as defined in the 1940 Act) except in connection
with permitted borrowings as described below or as permitted by rule,
regulation or order of the SEC.
The Money Market Funds may not:
1. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding one-third of the value of total assets. Any borrowing
will be done from a bank and to the extent that such borrowing exceeds 5%
of the value of the Fund's assets, asset coverage of at least 300% is
required. In the event that such asset coverage shall at any time fall
below 300%, the Fund shall, within three days thereafter or such longer
period as the SEC may prescribe by rules and regulations, reduce the amount
of its borrowings to such an extent that the asset coverage of such
borrowings shall be at least 300%. This borrowing provision is included
solely to facilitate the orderly sale of portfolio securities to
accommodate heavy redemption requests if they should occur and is not for
investment purposes. All borrowings will be repaid before making
additional investments and any interest paid on such borrowings will reduce
income.
2. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings permitted by (1) above in aggregate amounts not to exceed 10% of
total assets taken at current value at the time of the incurrence of such
loan, except as permitted with respect to securities lending.
3. Purchase or sell real estate, real estate limited partnership interests,
commodities or commodities contracts and interests in a pool of securities
that are secured by interests in real estate. However, subject to their
permitted investments, any Fund may invest in companies which invest in
real estate commodities or commodities contracts.
- 14 -
<PAGE>
4. Make short sales of securities, maintain a short position or purchase
securities on margin, except that the Trust may obtain short-term credits
as necessary for the clearance of security transactions.
5. Purchase securities of other investment companies except for money market
funds and then only as permitted by the 1940 Act and the rules and
regulations thereunder. The Money Market Funds will invest in shares of
another money market fund only if (i) such other money market fund is
subject to Rule 2a-7 under the 1940 Act; (ii) such other money market fund
has investment criteria equal to or higher than those of the investing
Money Market Fund; and (iii) the Trust's Board of Trustees monitors the
activities of such other money market fund.
6. Write or purchase puts, calls, options or combinations thereof.
The Equity, Fixed Income and Balanced Funds may not:
1. Borrow money in an amount exceeding 33 1/3% of the value of its total
assets, provided that, for purposes of this limitation, investment
strategies which either obligate a Fund to purchase securities or require a
Fund to segregate assets are not considered to be borrowing. Except where
a Fund has borrowed money for temporary purposes in amounts not exceeding
5% of its total assets, asset coverage of at least 300% is required for all
borrowings.
2. Purchase or sell real estate, physical commodities, or commodities
contracts, except that each Fund may purchase: (i) marketable securities
issued by companies which own or invest in real estate (including real
estate investment trusts), commodities, or commodities contracts, and (ii)
commodities contracts relating to financial instruments, such as financial
futures contracts and options on such contracts.
NON-FUNDAMENTAL POLICIES
No Fund may:
1. Invest in warrants, except that each of the Tax-Exempt Fixed Income Fund,
Value Fund, Growth Fund, Small Cap Fund, International Equity Fund,
TransEurope Fund, Latin America Equity Fund, Asian Tigers Fund and Balanced
Fund may invest in warrants in an amount not exceeding 5% of the Fund's net
assets as valued at the lower of cost or market value. Included in that
amount, but not to exceed 2% of the Fund's net assets, may be warrants not
listed on the New York Stock Exchange or the American Stock Exchange.
2. Invest in illiquid securities in an amount exceeding, in the aggregate, 15%
of the Fund's assets. An illiquid security is a security which cannot be
disposed of promptly (within seven days), and in the usual course of
business without a loss, and includes repurchase
- 15 -
<PAGE>
agreements maturing in excess of seven days, time deposits with a
withdrawal penalty, non-negotiable instruments and instruments for which no
market exists.
3. Purchase or retain securities of an issuer if, to the knowledge of the
Trust, an officer, trustee, partner or director of the Trust or any
investment adviser of the Trust owns beneficially more than 1/2 of 1% of
the shares or securities of such issuer and all such officers, trustees,
partners and directors owning more than 1/2 of 1% of such shares or
securities together own more than 5% of such shares or securities.
4. Invest in interests in oil, gas or other mineral exploration or development
programs and oil, gas or mineral leases.
5. Purchase securities of any company which has (with predecessors) a record
of less than three years continuing operations if, as a result more than 5%
of total assets (taken at fair market value) of the Fund would be invested
in such securities, except obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities or municipal securities which
are rated by at least two nationally recognized bond rating services.
The Equity, Fixed Income and Balanced Funds may not:
1. Purchase securities on margin or effect short sales, except that each Fund
may: (i) obtain short-term credits as necessary for the clearance of
security transactions; (ii) provide initial and variation margin in
connection with futures contracts and options on such contracts; (iii) make
short sales "against the box" or in compliance with the SEC's position
regarding the asset segregation requirements imposed by Section 18 of the
1940 Act.
2. Pledge, mortgage or hypothecate assets, except to secure temporary
borrowings permitted by the Fund's fundamental limitation on permitted
borrowings.
3. Invest its assets in securities of any investment company, except: (i) by
purchase in the open market involving only customary brokers' commissions;
(ii) in connection with mergers, acquisitions of assets or consolidations;
or (iii) as otherwise permitted by the 1940 Act.
The foregoing percentages (except for the limitation on illiquid securities)
will apply at the time of the purchase of a security and shall not be considered
violated unless an excess occurs or exists immediately after and as a result of
a purchase of such security.
THE ADVISOR
The Trust and LaSalle Street Capital Management, Ltd., 10 South LaSalle Street,
Suite 3701, Chicago, Illinois 60603 (the "Advisor"), have entered into an
advisory agreement (the "Advisory Agreement"). The Advisory Agreement provides
that the Advisor shall not be protected against
- 16 -
<PAGE>
any liability to the Trust or its Shareholders by reason of willful misfeasance,
bad faith or gross negligence on its part in the performance of its duties or
from reckless disregard of its obligations or duties thereunder.
The Advisory Agreement provides that if, for any fiscal year, the ratio of
expenses of any Fund (including amounts payable to the Advisor but excluding
interest, taxes, brokerage, litigation, and other extraordinary expenses)
exceeds limitations established by the State of California, the Advisor will
bear the amount of such excess.
The continuance of the Advisory Agreement, after the first two years, must be
specifically approved at least annually (i) by the vote of the Trustees, and
(ii) by the vote of a majority of the Trustees who are not parties to the
Agreement or "interested persons" of any party thereto, cast in person at a
meeting called for the purpose of voting on such approval. The Advisory
Agreement will terminate automatically in the event of its assignment, and is
terminable at any time without penalty by the Trustees of the Trust or, with
respect to the Funds by a majority of the outstanding shares of the Funds, on
not less than 30 days' nor more than 60 days' written notice to the Advisor, or
by the Advisor on 90 days' written notice to the Trust.
For the fiscal years ended December 31, 1993, 1994 and 1995, the Funds paid the
following advisory fees:
<TABLE>
<CAPTION>
=============================================================================================
Net Fees Paid Fees Waived
------------------------------------------------------------
Fund 1993 1994 1995 1993 1994 1995
=============================================================================================
<S> <C> <C> <C> <C> <C> <C>
Treasury Money Market Fund $141,593 $233,796 $229,313 $113,195 $166,562 $184,294
- ---------------------------------------------------------------------------------------------
Government Money Market Fund $290,987 $337,352 $376,824 $ 729 $ 0 $ 0
- ---------------------------------------------------------------------------------------------
Money Market Fund $617,047 $952,538 $998,172 $464,036 $605,293 $647,771
- ---------------------------------------------------------------------------------------------
Tax-Exempt Money Market Fund $140,974 $271,281 $362,794 $116,029 $206,848 $289,877
- ---------------------------------------------------------------------------------------------
Fixed Income Fund $540,207 $549,880 $576,717 $107,641 $ 96,978 $100,132
- ---------------------------------------------------------------------------------------------
Intermediate Government Fixed
Income Fund $445,774 $508,997 $419,323 $ 89,155 $ 92,677 $ 72,093
- ---------------------------------------------------------------------------------------------
Tax-Exempt Fixed Income Fund $295,988 $297,375 $249,245 $ 71,902 $ 75,458 $ 64,521
- ---------------------------------------------------------------------------------------------
Global Fixed Income Fund $101,252 $129,517 $139,512 $ 0 $ 0 $ 0
- ---------------------------------------------------------------------------------------------
Limited Volatility Fixed Income
Fund * * * * * *
- ---------------------------------------------------------------------------------------------
Value Fund $253,140 $448,762 $788,698 $ 0 $ 103 $ 0
- ---------------------------------------------------------------------------------------------
Growth Fund $668,520 $752,337 $685,748 $ 5,889 $ 2,930 $ 0
- ---------------------------------------------------------------------------------------------
Small Cap Fund $204,163 $342,751 $163,166 $ 1,875 $ 0 $ 0
- ---------------------------------------------------------------------------------------------
</TABLE>
- 17 -
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================
Net Fees Paid Fees Waived
------------------------------------------------------------
Fund 1993 1994 1995 1993 1994 1995
=============================================================================================
<S> <C> <C> <C> <C> <C> <C>
International Equity Fund $119,559 $353,164 $643,380 $ 0 $ 0 $ 0
- ---------------------------------------------------------------------------------------------
TransEurope Fund * * * * * *
- ---------------------------------------------------------------------------------------------
Asian Tigers Fund * $151,709 $211,903 * $ 0 $ 0
- ---------------------------------------------------------------------------------------------
Latin America Equity Fund * * * * * *
- ---------------------------------------------------------------------------------------------
Balanced Fund $610,153 $430,126 $454,111 $ 0 $ 0 $ 0
=============================================================================================
</TABLE>
* Not in operation during the period.
THE SUB-ADVISOR
LaSalle Street Capital Management, Ltd., on behalf of the Trust, and ABN AMRO-
NSM International Funds Management B.V., Foppingadreef 22, Amsterdam, 1000 EA
Amsterdam, The Netherlands, have entered into a sub-advisory agreement (the
"Sub-Advisory Agreement"). The Sub-Advisory Agreement provides that the Sub-
Advisor shall not be protected against any liability to the Trust or its
Shareholders by reason of willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard of its or
duties thereunder.
The Sub-Advisory Agreement provides that if, for any fiscal year, the Advisor is
required, under its Advisory Agreement with the Trust, to reduce its fees for
the Fund because of excess expenses, the Sub-Advisor shall reduce its fees by an
amount equal to one-half of the amount by which the Advisor reduced its fees.
In addition, from time to time, the Sub-Advisor may voluntarily agree to waive
or reduce some or all of the compensation to which it is entitled under the Sub-
Advisory Agreement.
The continuance of the Sub-Advisory Agreement, after the first year, must be
specifically approved at least annually (a) by the vote of a majority of those
members of the Trust's Board of Trustees who are not interested persons of the
Trust, the Sub-Advisor, or the Advisor, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by the vote of a majority of the
Trust's Board of Trustees or by the vote of a majority of all votes attributable
to the outstanding shares of the Fund. Notwithstanding the foregoing, this
Agreement may be terminated as to the Fund at any time, without the payment of
any penalty, on sixty (60) days' written notice by the Advisor or by the Sub-
Advisor. The Sub-Advisory Agreement will immediately terminate in the event of
its assignment.
THE ADMINISTRATOR
The Administration Agreement provides that SEI Financial Management Corporation
(the "Administrator") shall not be liable for any error of judgment or mistake
of law or for any loss suffered by
- 18 -
<PAGE>
the Trust in connection with the matters to which the Administration Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Administrator in the performance of its duties or
from reckless disregard by it of its duties and obligations thereunder.
The Administrator, a wholly owned subsidiary of SEI Corporation ("SEI"), was
organized as a Delaware corporation in 1969 and has its principal business
offices at 680 East Swedesford Road, Wayne, Pennsylvania 19087-1658. Alfred P.
West, Jr., Henry H. Greer and Carmen V. Romeo constitute the Board of Directors
of the Administrator. Mr. West is the Chairman of the Board and Chief Executive
Officer of the Administrator and of SEI. Mr. Greer is the President and Chief
Operating Officer of the Administrator and of SEI. SEI and its subsidiaries are
leading providers of funds evaluation services, trust accounting systems, and
brokerage and information services to financial institutions, institutional
investors and money managers. The Administrator also serves as administrator to
the following other mutual funds: The Achievement Funds Trust, The Advisors'
Inner Circle Fund, The Arbor Fund, ARK Funds, Bishop Street Funds, CoreFunds,
Inc., CrestFunds, Inc., CUFUND, First American Funds, Inc., First American
Investment Funds, Inc., FMB Funds, Inc. Insurance Investment Products Trust,
Inventor Funds, Inc., Marquis Funds(R), Monitor Funds, Morgan Grenfell
Investment Trust, The PBHG Funds, Inc., The Pillar Funds, Rembrandt Funds(R),
1784 Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds,
SEI Institutional Managed Trust, SEI International Trust, SEI Liquid Asset
Trust, SEI Tax Exempt Trust, Stepstone Funds, STI Classic Funds and STI Classic
Variable Trust.
For the fiscal years ended December 31, 1993, 1994, and 1995, the Funds paid the
following fees to the Administrator:
<TABLE>
<CAPTION>
===============================================================
Net Fees Paid
Fund 1993 1994 1995
===============================================================
<S> <C> <C> <C>
Treasury Money Market Fund $109,195 $158,779 $176,434
- ---------------------------------------------------------------
Government Money Market Fund $218,787 $253,014 $282,618
- ---------------------------------------------------------------
Money Market Fund $462,663 $605,293 $647,771
- ---------------------------------------------------------------
Tax-Exempt Money Market Fund $110,144 $187,532 $277,850
- ---------------------------------------------------------------
Fixed Income Fund $161,462 $150,882 $159,185
- ---------------------------------------------------------------
Intermediate Government Fixed
Income Fund $133,732 $142,816 $113,044
- ---------------------------------------------------------------
Tax-Exempt Fixed Income Fund $ 91,972 $ 90,263 $ 78,442
- ---------------------------------------------------------------
Global Fixed Income Fund $ 18,985 $ 14,686 $ 26,158
- ---------------------------------------------------------------
Limited Volatility Fixed Income
Fund * * *
- ---------------------------------------------------------------
Value Fund $ 47,464 $ 84,163 $147,881
- ---------------------------------------------------------------
</TABLE>
- 19 -
<PAGE>
<TABLE>
<CAPTION>
===============================================================
Net Fees Paid
Fund 1993 1994 1995
===============================================================
<S> <C> <C> <C>
Growth Fund $125,348 $141,613 $128,578
- ---------------------------------------------------------------
Small Cap Fund $ 38,632 $ 64,266 $ 30,713
- ---------------------------------------------------------------
International Equity Fund $ 17,934 $ 43,927 $ 96,507
- ---------------------------------------------------------------
TransEurope Fund * * *
- ---------------------------------------------------------------
Asian Tigers Fund * $ 6,456 $ 31,786
- ---------------------------------------------------------------
Latin America Equity Fund * * *
- ---------------------------------------------------------------
Balanced Fund $130,683 $ 92,170 $ 97,310
===============================================================
</TABLE>
* Not in operation during the period.
THE DISTRIBUTOR
Rembrandt(R) Financial Services Company, 680 East Swedesford Road, Wayne,
Pennsylvania 19087-1658 (the "Distributor"), a wholly-owned subsidiary of SEI
Financial Services Company ("SFS"), and the Trust are parties to a distribution
agreement (the "Distribution Agreement"). Unless otherwise terminated as
provided therein, the Distribution Agreement is renewable annually.
Notwithstanding the foregoing, the Distribution Agreement shall be reviewed and
ratified at least annually (i) by the Trustees or by the vote of a majority of
the outstanding shares of the Trust, and (ii) by the vote of a majority of the
Trustees of the Trust who are not parties to the Distribution Agreement or
"interested persons" (as defined in the 1940 Act) of any party to the
Distribution Agreement, cast in person at a meeting called for the purpose of
voting on such approval. The Distribution Agreement will terminate in the event
of any assignment, as defined in the 1940 Act, and is terminable with respect to
a particular Fund on not less than 60 days' notice by the Trustees, by vote of a
majority of the outstanding shares of such Fund or by the Distributor.
12b-1 Fees
The Trust has adopted a distribution plan for the Investor Class shares of each
Fund (the "Investor Class Plan") in accordance with the provisions of Rule 12b-1
under the 1940 Act, which regulates circumstances under which an investment
company may directly or indirectly bear expenses relating to the distribution of
its shares. Continuance of the Investor Class Plan must be approved annually by
a majority of the Trustees of the Trust and by a majority of the Trustees who
are not "interested persons" of the Trust or the Distributor, as that term is
defined in the 1940 Act ("Disinterested Trustees"). The Investor Class Plan
requires that quarterly written reports of amounts spent under the Investor
Class Plan and the purposes of such expenditures be furnished to and reviewed by
the Trustees. In accordance with Rule 12b-1 under the 1940 Act, the Investor
Class Plan may be terminated with respect to any Fund by a vote of a majority of
the Disinterested Trustees, or by a
- 20 -
<PAGE>
vote of a majority of the outstanding shares of that Fund. The Investor Class
Plan may be amended by vote of the Trust's Board of Trustees, including a
majority of the Disinterested Trustees, cast in person at a meeting called for
such purpose, except that any change that would effect a material increase in
any distribution fee with respect to a Fund requires the approval of that Fund's
shareholders. All material amendments of the Plan will require approval by a
majority of the Trustees of the Trust and of the Disinterested Trustees.
Pursuant to the Distribution Agreement and the Investor Class Plan, Investor
Class shares are subject to an ongoing distribution fee calculated on each
Fund's aggregate average daily net assets attributable to its Investor Class
shares.
The Distribution Agreement and the Investor Class Plan provide for payments to
the Distributor at an annual rate of .25% of the Investor Class average daily
net assets. The Investor Class Plan is characterized as a compensation plan and
is not directly tied to expenses incurred by the Distributor; the payments the
Distributor receives during any year may therefore be higher or lower than its
actual expenses.
For the fiscal year ended December 31, 1995, the Funds paid the following
amounts pursuant to the Investor Class Plan:
<TABLE>
<CAPTION>
=====================================================================
Distribution Amount Paid
Fund 1995
=====================================================================
<S> <C>
Treasury Money Market Fund $17,018
- ---------------------------------------------------------------------
Government Money Market Fund $ 7,789
- ---------------------------------------------------------------------
Money Market Fund $ 3,171
- ---------------------------------------------------------------------
Tax-Exempt Money Market Fund $ 9,775
- ---------------------------------------------------------------------
Fixed Income Fund $ 1,260
- ---------------------------------------------------------------------
Intermediate Government Fixed Income Fund $ 7,006
- ---------------------------------------------------------------------
Tax-Exempt Fixed Income Fund $ 2,919
- ---------------------------------------------------------------------
Global Fixed Income Fund $ 238
- ---------------------------------------------------------------------
Limited Volatility Fixed Income Fund *
- ---------------------------------------------------------------------
Value Fund $ 3,219
- ---------------------------------------------------------------------
Growth Fund $ 6,260
- ---------------------------------------------------------------------
Small Cap Fund $ 1,066
- ---------------------------------------------------------------------
International Equity Fund $ 4,221
- ---------------------------------------------------------------------
TransEurope Fund *
- ---------------------------------------------------------------------
Asian Tigers Fund $ 2,109
- ---------------------------------------------------------------------
</TABLE>
- 21 -
<PAGE>
<TABLE>
<CAPTION>
=====================================================================
Distribution Amount Paid
Fund 1995
=====================================================================
<S> <C>
Latin America Equity Fund *
- ---------------------------------------------------------------------
Balanced Fund $10,008
=====================================================================
</TABLE>
* Not in operation during the period.
The distribution-related services that may be provided under the Investor Class
Plan include establishing and maintaining customer accounts and records;
aggregating and processing purchase and redemption requests from customers;
placing net purchase and redemption orders with the Distributor; automatically
investing customer account cash balances; providing periodic statements to
customers; arranging for wires; answering customer inquiries concerning their
investments; assisting customers in changing dividend options, account
designations, and addresses; performing sub-accounting functions; processing
dividend payments from the Trust on behalf of customers; and forwarding
shareholder communications from the Trust (such as proxies, shareholder reports,
and dividend distribution, and tax notices) to these customers with respect to
investments in the Trust. Certain state securities laws may require those
financial institutions providing such distribution services to register as
dealers pursuant to state law.
Except to the extent that the Administrator or Advisor benefitted through
increased fees from an increase in the net assets of the Trust which may have
resulted in part from the expenditures, no "interested person" of the Trust nor
any Trustee of the Trust who is not an "interested person" of the Trust had a
direct or indirect financial interest in the operation of the Investor Class
Plan or related agreements.
TRUSTEES AND OFFICERS OF THE TRUST
The management and affairs of the Trust are supervised by the Trustees under the
laws governing business trusts in the Commonwealth of Massachusetts. The
Trustees and executive officers of the Trust and their principal occupations for
the last five years are set forth below.
ARNOLD F. BROOKSTONE (4/8/30) -- Trustee and Chairman -- 150 N. Michigan Avenue,
Chicago, Illinois 60601. Retired. Executive Vice President, Chief Financial
Officer and Planning Officer of Stone Container Corporation, 1991-1995. Senior
Vice President, Chief Financial Officer and Planning Officer of Stone Container
Corporation since 1981. Prior thereto, Mr. Brookstone held various other
executive positions with Stone Container Corporation since 1973.
WILLIAM T. SIMPSON (7/26/27) -- Trustee -- 1318 Navajo Court, Louisville,
Kentucky. Consultant, PNC Bank of Kentucky (formerly Citizens Fidelity Bank and
Trust company) (a state chartered bank) since 1992. Senior Vice President, PNC
Bank of Kentucky 1973-1992.
- 22 -
<PAGE>
ROBERT A. NESHER (8/17/46) -- Trustee* -- 8 South Street, P.O. Box 89,
Kennebunkport, Maine 04046-0089. Retired since 1994. Director, Executive Vice
President of SEI, 1986-1994. Director and Executive Vice President of the
Administrator and Distributor, 1981-1994.
DAVID G. LEE (4/16/52) -- President and Chief Executive Officer -- Senior Vice
President of the Administrator and Distributor since 1993. Vice President of
the Administrator and Distributor 1991-1993. President, GW Sierra Trust Funds
before 1991.
SANDRA K. ORLOW (10/18/53) -- Vice President, Assistant Secretary -- Vice
President and Assistant Secretary of SEI and the Administrator and Distributor
since 1983.
TODD CIPPERMAN (2/14/66) - Vice President and Assistant Secretary - Vice
President and Assistant Secretary of SEI, the Administrator and Distributor
since May, 1995, Associate, Dewey Ballantine (law firm) 1994-1995, Associate,
Winston & Strawn (law firm) 1991-1995.
JOSEPH M. LYDON (9/27/59) - Vice President and Assistant Secretary - Director of
Business Administration, SEI Corporation since April, 1995; Vice President of
Fund Group, Vice President of the Advisor - Dreman Value Management, LP,
President of Dreman Financial Services, Inc. from 1989 to 1995.
KATHRYN L. STANTON (11/19/58) -- Vice President, Assistant Secretary -- Vice
President, Assistant Secretary of SEI, the Administrator and Distributor since
1994. Associate, Morgan, Lewis & Bockius LLP (law firm), 1989-1994.
JEFFREY A. COHEN (4/22/61) -- Controller, Assistant Secretary -- CPA, Director,
International and Domestic Funds Accounting, SEI since 1991. Audit Manager,
Price Waterhouse prior to 1991.
RICHARD W. GRANT (10/25/45) -- Secretary -- 2000 One Logan Square, Philadelphia,
Pennsylvania 19103, Partner of Morgan, Lewis & Bockius LLP (law firm), Counsel
to SEI, the Trust, the Administrator and Distributor.
KEVIN P. ROBINS (4/15/61) -- Vice President, Assistant Secretary -- Senior Vice
President and General Counsel of SEI, the Administrator and Distributor since
1994. Vice President and
- 23 -
<PAGE>
Assistant Secretary of SEI, the Administrator and Distributor since 1992.
Associate, Morgan, Lewis & Bockius LLP (law firm), 1988-1992.
_______________
*Mr. Nesher is a Trustee who may be deemed to be an "interested person" of the
Trust as the term is defined in the 1940 Act.
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust. The Trust pays the fees for unaffiliated Trustees.
Compensation of officers and affiliated Trustees of the Trust is paid by the
Administrator.
For the fiscal year ended December 31, 1995, the Trustees received the following
compensation:
<TABLE>
<CAPTION>
===================================================================================================
Total Compensation
Aggregate Pension or from Registrant and
Compensation Retirement Estimated Fund Complex Paid
From Registrant Benefits Accrued Annual Benefits to Directors for
Name of Person, for Fiscal Year as Part of Fund Upon Fiscal Year Ended
Position Ended 1995 Expenses Retirement 1995
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arnold F. Brookstone, $11,500 N/A N/A $11,500 for
Trustee service
on one board
- ---------------------------------------------------------------------------------------------------
William T. Simpson, $11,500 N/A N/A $11,500 for
Trustee service
on one board
- ---------------------------------------------------------------------------------------------------
Robert A. Nesher,* $ 0 N/A N/A $0 for service on
Trustee one board
===================================================================================================
</TABLE>
_______________
*Mr. Nesher is a Trustee who may be deemed an "interested person" of the Trust
as the term is defined in the 1940 Act.
COMPUTATION OF YIELD
From time to time the Treasury Money Market Fund, Government Money Market Fund,
Money Market Fund and Tax-Exempt Money Market Fund advertise their "current
yield" and "effective compound yield." Both yield figures are based on
historical earnings and are not intended to indicate future performance. The
"yield" of the Funds refers to the income generated by an investment in a Fund
over a seven-day period (which period will be stated in the advertisement).
This income is then "annualized." That is, the amount of income generated by
the investment during that week is assumed to be generated each week over a 52-
week period and is shown as a percentage of the investment. The "effective
yield" is calculated similarly but, when annualized, the income earned by an
investment in a Fund is assumed to be reinvested. The "effective yield" will be
slightly higher than the "yield" because of the compounding effect of this
assumed reinvestment.
- 24 -
<PAGE>
The current yield of the Funds will be calculated daily based upon the seven
days ending on the date of calculation ("base period"). The yield is computed
by determining the net change (exclusive of capital changes) in the value of a
hypothetical pre-existing Shareholder account having a balance of one share at
the beginning of the period, subtracting a hypothetical charge reflecting
deductions from Shareholder accounts, and dividing such net change by the value
of the account at the beginning of the same period to obtain the base period
return and multiplying the result by (365/7). Realized and unrealized gains and
losses are not included in the calculation of the yield. The effective yield of
the Funds is determined by computing the net change, exclusive of capital
changes, in the value of a hypothetical pre-existing account having a balance of
one share at the beginning of the period, subtracting a hypothetical charge
reflecting deductions from Shareholder accounts, and dividing the difference by
the value of the account at the beginning of the base period to obtain the base
period return, and then compounding the base period return by adding 1, raising
the sum to a power equal to 365 divided by 7, and subtracting 1 from the result,
according to the following formula: Effective Yield = (Base Period Return +
1)365/7) - 1. The current and the effective yields reflect the reinvestment of
net income earned daily on portfolio assets.
Tax Equivalent yields are computed by dividing that portion of a Fund's yield
which is tax-exempt by one minus a federal and/or state income tax rate and
adding the product to that portion, if any, of the Fund's yield that is not tax-
exempt.
Yield = 2[((a-b)/(cd) + 1)/6/ - 1] where a = dividends and interest earned
during the period; b = expenses accrued for the period (net of reimbursement);
c = the current daily number of shares outstanding during the period that were
entitled to receive dividends; and d = the maximum offering price per share on
the last day of the period.
The yield of these Funds fluctuates, and the annualization of a week's dividend
is not a representation by the Trust as to what an investment in the Fund will
actually yield in the future. Actual yields will depend on such variables as
asset quality, average asset maturity, the type of instruments the Fund invests
in, changes in interest rates on money market instruments, changes in the
expenses of the Fund and other factors.
For the seven-day period ended December 31, 1995, the end of the Trust's most
recent fiscal year, the Money Market Funds' current, effective and tax-
equivalent yields were as follows:
<TABLE>
<CAPTION>
=================================================================================
7-Day Tax-
7-Day 7-Day Tax- Equivalent
Effective Equivalent Effective
Fund Class 7-Day Yield Yield Yield Yield
=================================================================================
<S> <C> <C> <C> <C> <C>
Treasury Money Trust 4.92% 5.04% N/A N/A
Market Fund ------------------------------------------------------------
Investor 4.67% 4.78% N/A N/A
- ---------------------------------------------------------------------------------
Government Money Trust 5.31% 5.45% N/A N/A
Market Fund ------------------------------------------------------------
Investor 5.06% 5.19% N/A N/A
- ---------------------------------------------------------------------------------
</TABLE>
- 25 -
<PAGE>
<TABLE>
<CAPTION>
=================================================================================
7-Day Tax-
7-Day 7-Day Tax- Equivalent
Effective Equivalent Effective
Fund Class 7-Day Yield Yield Yield Yield
=================================================================================
<S> <C> <C> <C> <C> <C>
Money Market Fund Trust 5.38% 5.53% N/A N/A
------------------------------------------------------------
Investor 5.13% 5.27% N/A N/A
- ---------------------------------------------------------------------------------
Tax-Exempt Money Trust 3.37% 3.43% 5.58% 5.68%
Market Fund ------------------------------------------------------------
Investor 3.12% 3.17% 5.17% 5.25%
=================================================================================
</TABLE>
Yields are one basis upon which investors may compare the Funds with other money
market funds; however, yields of other money market funds and other investment
vehicles may not be comparable because of the factors set forth above and
differences in the methods used in valuing portfolio instruments.
The Value Fund, Growth Fund, Small Cap Fund, International Equity Fund,
TransEurope Fund, Asian Tigers Fund, Fixed Income Fund, Intermediate Government
Fixed Income Fund, Tax-Exempt Fixed Income Fund, Global Fixed Income Fund,
Limited Volatility Fixed Income Fund, Latin America Equity Fund, and Balanced
Fund may also advertise a 30-day yield figure. These figures will be based on
historical earnings and are not intended to indicate future performance. The
yield of these Funds refers to the annualized income generated by an investment
in the Funds over a specified 30-day period. The yield is calculated by
assuming that the income generated by the investment during that 30-day period
is generated over one year and is shown as a percentage of the investment.
For the thirty-day period ended December 31, 1995, the yield for the following
Funds were:
<TABLE>
<CAPTION>
==============================================================
Fund Class 30-Day Yield
==============================================================
<S> <C> <C>
Fixed Income Fund Trust 5.45%
----------------------
Investor 4.96%
- --------------------------------------------------------------
Intermediate Government Fixed Income Trust 5.06%
Fund ----------------------
Investor 4.60%
- --------------------------------------------------------------
Tax-Exempt Fixed Income Fund Trust 4.72%
----------------------
Investor 4.27%
- --------------------------------------------------------------
Global Fixed Income Fund Trust 4.35%
----------------------
Investor 3.86%
- --------------------------------------------------------------
Limited Volatility Fixed Income Fund Trust *
----------------------
Investor *
- --------------------------------------------------------------
</TABLE>
- 26 -
<PAGE>
<TABLE>
<CAPTION>
==============================================================
Fund Class 30-Day Yield
==============================================================
<S> <C> <C>
Value Fund Trust 2.53%
----------------------
Investor 2.18%
- --------------------------------------------------------------
Growth Fund Trust 1.64%
----------------------
Investor 1.36%
- --------------------------------------------------------------
Small Cap Fund Trust 0.13%
----------------------
Investor 0%
- --------------------------------------------------------------
International Equity Fund Trust 0%
----------------------
Investor 0%
- --------------------------------------------------------------
TransEurope Fund Trust *
----------------------
Investor *
- --------------------------------------------------------------
Asian Tigers Fund Trust 0%
----------------------
Investor 0%
- --------------------------------------------------------------
Latin America Equity Fund Trust *
----------------------
Investor *
- --------------------------------------------------------------
Balanced Fund Trust 3.18%
----------------------
Investor 2.80%
==============================================================
</TABLE>
* Not in operation at the end of the period.
The 30-day tax equivalent yields for the Tax-Exempt Fixed Income Fund for the
period ended December 31, 1995, was 7.81%.
CALCULATION OF TOTAL RETURN
From time to time, the Value Fund, Growth Fund, Small Cap Fund, International
Equity Fund, TransEurope Fund, Asian Tigers Fund, Latin America Equity Fund,
Fixed Income Fund, Intermediate Government Fixed Income Fund, Tax-Exempt Fixed
Income Fund, Global Fixed Income Fund, Limited Volatility Fixed Income Fund and
Balanced Fund may advertise total return. The total return of a Fund refers to
the average compounded rate of return to a hypothetical investment for
designated time periods (including but not limited to, the period from which the
Fund commenced operations through the specified date), assuming that the entire
investment is redeemed at the end of each period. In particular, total return
will be calculated according to the following formula: P (1 + T)/n/ = ERV, where
P = a hypothetical initial payment of $1,000; T = average annual total return;
- 27 -
<PAGE>
n = number of years; and ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the designated time period as of the end of
such period.
Based on the foregoing, the average annual total return for the Funds from
commencement of operations through December 31, 1995, and for the one year
period ended December 31, 1995, were as follows:
<TABLE>
<CAPTION>
==========================================================================================
Average Annual Total Return
----------------------------
Fund Class One Year Since Inception
==========================================================================================
<S> <C> <C> <C>
Treasury Money Market Fund Investor-Net Asset Value/1/ 5.02% 3.64%
---------------------------------------------------------
Trust/2/ 5.28% 3.81%
- ------------------------------------------------------------------------------------------
Government Money Market Fund Investor-Net Asset Value/3/ 5.33% 4.03%
---------------------------------------------------------
Trust/2/ 5.59% 4.16%
- ------------------------------------------------------------------------------------------
Money Market Fund Investor-Net Asset Value/4/ 5.38% 4.05%
---------------------------------------------------------
Trust/2/ 5.64% 4.21%
- ------------------------------------------------------------------------------------------
Tax-Exempt Money Market Fund Investor-Net Asset Value/5/ 3.24% 2.44%
---------------------------------------------------------
Trust/2/ 3.49% 2.66%
- ------------------------------------------------------------------------------------------
Fixed Income Fund Investor-Offering Price/6/ 12.10% 4.74%
---------------------------------------------------------
Investor-Net Asset Value/6/ 17.40% 6.45%
---------------------------------------------------------
Trust/2/ 17.75% 7.57%
- ------------------------------------------------------------------------------------------
Intermediate Government Fixed Investor-Offering Price/7/ 8.47% 2.79%
Income Fund ---------------------------------------------------------
Investor-Net Asset Value/7/ 13.59% 4.54%
---------------------------------------------------------
Trust/2/ 13.86% 5.49%
- ------------------------------------------------------------------------------------------
Tax-Exempt Fixed Income Fund Investor-Offering Price/8/ 10.18% 3.11%
---------------------------------------------------------
Investor-Net Asset Value/8/ 15.43% 4.83%
---------------------------------------------------------
Trust/2/ 15.67% 6.11%
- ------------------------------------------------------------------------------------------
Global Fixed Income Fund Investor-Offering Price/9/ 15.23% 6.27%
---------------------------------------------------------
Investor-Net Asset Value/9/ 20.68% 8.13%
---------------------------------------------------------
Trust/10/ 20.99% 11.44%
- ------------------------------------------------------------------------------------------
</TABLE>
- 28 -
<PAGE>
<TABLE>
<CAPTION>
==========================================================================================
Average Annual Total Return
----------------------------
Fund Class One Year Since Inception
==========================================================================================
<S> <C> <C> <C>
Limited Volatility Fixed Income Investor-Offering Price * *
Fund -------------------------------------------------------
Investor-Net Asset Value * *
-------------------------------------------------------
Trust * *
- ---------------------------------------------------------------------------------------------
Balanced Fund Investor-Offering Price/8/ 16.04% 5.80%
-------------------------------------------------------
Investor-Net Asset Value/8/ 21.52% 7.53%
-------------------------------------------------------
Trust/2/ 21.85% 8.51%
- ---------------------------------------------------------------------------------------------
Value Fund Investor-Offering Price/11/ 25.82% 9.26%
-------------------------------------------------------
Investor-Net Asset Value/11/ 31.72% 11.09%
-------------------------------------------------------
Trust/2/ 32.02% 12.13%
- ---------------------------------------------------------------------------------------------
Growth Fund Investor-Offering Price/12/ 25.37% 7.51%
-------------------------------------------------------
Investor-Net Asset Value/12/ 31.29% 9.27%
-------------------------------------------------------
Trust/2/ 31.60% 10.66%
- ---------------------------------------------------------------------------------------------
Small Cap Fund Investor-Offering Price/7/ 25.82% 9.00%
-------------------------------------------------------
Investor-Net Asset Value/7/ 31.73% 10.87%
-------------------------------------------------------
Trust/2/ 32.13% 8.41%
- ---------------------------------------------------------------------------------------------
International Equity Fund Investor-Offering Price/7/ 8.68% 9.89%
-------------------------------------------------------
Investor-Net Asset Value/7/ 13.79% 11.78%
-------------------------------------------------------
Trust/2/ 14.03% 14.21%
- ---------------------------------------------------------------------------------------------
Asian Tigers Fund Investor-Offering Price/13/ 6.14% 0.34%
-------------------------------------------------------
Investor-Net Asset Value/13/ 11.18% 2.71%
-------------------------------------------------------
Trust/14/ 11.61% 2.97%
- ---------------------------------------------------------------------------------------------
Latin America Equity Fund Investor-Offering Price * *
-------------------------------------------------------
Investor-Net Asset Value * *
-------------------------------------------------------
Trust * *
- ---------------------------------------------------------------------------------------------
</TABLE>
- 29 -
<PAGE>
<TABLE>
<CAPTION>
==========================================================================================
Average Annual Total Return
----------------------------
Fund Class One Year Since Inception
==========================================================================================
<S> <C> <C> <C>
TransEurope Fund Investor-Offering Price * *
-------------------------------------------------------
Investor-Net Asset Value * *
-------------------------------------------------------
Trust * *
==========================================================================================
</TABLE>
* Not in operation during the period.
- ---------------
/ 1/ Commenced operations 3/25/93 / 8/ Commenced operations 3/9/93
/ 2/ Commenced operations 1/4/93 / 9/ Commenced operations 4/26/93
/ 3/ Commenced operations 4/22/93 /10/ Commenced operations 2/7/93
/ 4/ Commenced operations 3/31/93 /11/ Commenced operations 3/26/93
/ 5/ Commenced operations 4/13/93 /12/ Commenced operations 3/8/93
/ 6/ Commenced operations 3/12/93 /13/ Commenced operations 1/12/94
/ 7/ Commenced operations 4/12/93 /14/ Commenced operations 1/3/94
PURCHASE AND REDEMPTION OF SHARES
It is currently the Trust's policy to pay for all redemptions in cash. The
Trust retains the right, however, to alter this policy to provide for
redemptions in whole or in part by a distribution in-kind of securities held by
the Funds in lieu of cash. Shareholders may incur brokerage charges on the sale
of any such securities so received in payment of redemptions. However, a
Shareholder will at all times be entitled to aggregate cash redemptions from all
Funds of the Trust during any 90-day period of up to the lesser of $250,000 or
1% of the Trust's net assets.
The Trust reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period on which trading on
the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of
disposal or valuation of the Fund's securities is not reasonably practicable, or
for such other periods as the SEC has by order permitted. The Trust also
reserves the right to suspend sales of shares of the Fund for any period during
which the New York Stock Exchange, the Advisor, the Administrator and/or the
Custodian are not open for business. Currently, the following holidays are
observed by the Trust: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
In calculating the sales charge rates applicable to purchases of shares of the
Global Fixed Income, Fixed Income, Intermediate Government Fixed Income, Tax-
Exempt Fixed Income, Limited Volatility Fixed Income, Balanced, Growth, Small
Cap, International Equity, TransEurope, Latin America Equity and Asian Tigers
Funds, customers of the following broker-dealer which have entered into
- 30 -
<PAGE>
an agreement with the Distributor are entitled to the following
percentage-based discount from the otherwise applicable sales charge:
<TABLE>
<CAPTION>
Name of Group Percentage of Waiver Date Offer Starts
- ------------- -------------------- -----------------
<S> <C> <C>
Jack White & Company 100% October 15, 1995
</TABLE>
LETTER OF INTENT
Reduced sales charges are applicable to the aggregate amount of purchases made
by any such purchaser previously enumerated within a 13-month period pursuant to
a written Letter of Intent (the "Letter") provided by the Transfer Agent, DST
Systems, Inc., and not legally binding on the signer or a Fund which provides
for the holding in escrow by the Transfer Agent of 5% of the total amount
intended to be purchased until such purchase is completed within the 13-month
period. The 13-month period begins on the date of the earliest purchase. If
the intended investment is not completed, the purchaser will be asked to pay an
amount equal to the difference between the sales charge on the shares purchased
at the reduced rate and the sales charge otherwise applicable to the total
shares purchased. If such payment is not made within 20 days following the
expiration of the 13-month period, the Transfer Agent will surrender an
appropriate number of the escrowed shares for redemption in order to realize the
difference. Such purchasers may include the value (at offering price at the
level designated in their Letter) of all their shares of the Fund and of any
other Fund previously purchased and still held as of the date of their Letter
toward the completion of such Letter.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Funds is calculated by adding the value of
securities and other assets, subtracting liabilities and dividing by the total
number of outstanding shares. Securities of the Treasury Money Market,
Government Money Market, Money Market and Tax-Exempt Money Market Funds will be
valued by the amortized cost method, which involves valuing a security at its
cost on the date of purchase and thereafter (absent unusual circumstances)
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuations in general market rates of interest on
the value of the instrument. While this method provides certainty in valuation,
it may result in periods during which a security's value, as determined by this
method, is higher or lower than the price the Fund would receive if it sold the
instrument. During periods of declining interest rates, the daily yield of the
Fund may tend to be higher than a like computation made by a company with
identical investments utilizing a method of valuation based upon market prices
and estimates of market prices for all of its portfolio securities. Thus, if
the use of amortized cost by the Fund resulted in a lower aggregate portfolio
value on a particular day, a prospective investor in the Fund would be able to
obtain a somewhat higher yield than would result from investment in a company
utilizing solely market values, and existing investors in the Fund would
experience a lower yield. The converse would apply in a period of rising
interest rates.
- 31 -
<PAGE>
A Fund's use of amortized cost and the maintenance of the Fund's net asset value
at $1.00 are permitted by Rule 2a-7 under the 1940 Act, provided that certain
conditions are met. Rule 2a-7 also requires the Trustees to establish
procedures which are reasonably designed to stabilize the net asset value per
share at $1.00 for the Funds. Such procedures include the determination of the
extent of deviation, if any, of the Funds' current net asset value per share
calculated using available market quotations from the Funds amortized cost price
per share at such intervals as the Trustees deem appropriate and reasonable in
light of market conditions and periodic reviews of the amount of the deviation
and the methods used to calculate such deviation. In the event that such
deviation exceeds 1/2 of 1%, the Trustees are required to consider promptly what
action, if any, should be initiated, and, if the Trustees believe that the
extent of any deviation may result in material dilution or other unfair results
to Shareholders, the Trustees are required to take such corrective action as
they deem appropriate to eliminate or reduce such dilution or unfair results to
the extent reasonably practicable. Such actions may include the sale of
portfolio instruments prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity; withholding dividends; redeeming shares in
kind; or establishing a net asset value per share by using available market
quotations. In addition, if the Funds incur a significant loss or liability,
the Trustees have the authority to reduce pro rata the number of shares of the
--------
Funds in each Shareholder's account and to offset each Shareholder's pro rata
--------
portion of such loss or liability from the Shareholder's accrued but unpaid
dividends or from future dividends while each other Fund must annually
distribute at least 90% of its investment company taxable income.
The securities of the Equity, Balanced and Fixed Income Funds are valued by the
Administrator pursuant to valuations provided by an independent pricing service.
The pricing service relies primarily on prices of actual market transactions as
well as trader quotations. However, the service may also use a matrix system to
determine valuations of fixed income securities, which system considers such
factors as security prices, yields, maturities, call features, ratings and
developments relating to specific securities in arriving at valuations. The
procedures of the pricing service and its valuations are reviewed by the
officers of the Trust under the general supervision of the Trustees. Although
the methodology and procedures are identical, the net asset value per share of
Trust Class and Investor Class shares within the Funds may differ because of the
distribution expenses charged to Investor Class shares.
TAXES
The following is only a summary of certain income tax considerations generally
affecting a Fund and its Shareholders, and is not intended as a substitute for
careful tax planning. Shareholders are urged to consult their tax advisers with
specific reference to their own tax situations, including their state and local
income tax liabilities.
- 32 -
<PAGE>
Federal Income Tax
All Funds
Each Fund intends to qualify as a "regulated investment company" ("RIC") as
defined under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code").
In order to qualify for treatment as a RIC under the Code, each Fund must
distribute annually to its Shareholders at least the sum of 90% of its net
interest income excludable from gross income plus 90% of its investment company
taxable income (generally, net investment income plus net short-term capital
gain) (the "Distribution Requirement") and also must meet several additional
requirements. Among these requirements are the following: (a) at least 90% of
the Fund's gross income each taxable year must be derived from dividends,
interest, payments with respect to securities loans, and gains from the sale or
other disposition of stock or securities, or certain other income; (b) the Fund
must derive less than 30% of its gross income each taxable year from the sale or
other disposition of stocks, securities, options, futures or forward contracts
(other than options futures or forward contracts on foreign currencies), or
foreign currencies (or options, futures or forward contracts on foreign
currencies) that are not directly related to the company's business of investing
in stock or securities, held for less than three months; and (c) diversify its
holdings so that; (i) at the close of each quarter of the Fund's taxable year,
at least 50% of the value of its total assets must be represented by cash and
cash items, U.S. Government securities, securities of other RICs and other
securities, with such other securities limited, in respect to any one issuer, to
an amount that does not exceed 5% of the value of the Fund's assets and that
does not represent more than 10% of the outstanding voting securities of such
issuer; and (ii) at the close of each quarter of the Fund's taxable year, not
more than 25% of the value of its assets may be invested in securities (other
than U.S. Government securities or the securities of other RICs) of any one
issuer or of two or more issuers which are engaged in the same, similar or
related trades or businesses if the Fund owns at least 20% of the voting power
of such issuers.
Notwithstanding the Distribution Requirement described above, which only
requires a Fund to distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital gain
(the excess of net long-term capital gain over net short-term capital loss), a
Fund will be subject to a nondeductible 4% excise tax to the extent it fails to
distribute by the end of any calendar year 98% of its ordinary income for that
year and 98% of its capital gain net income for the one-year period ending on
October 31 of that year, plus certain other amounts.
Interest on indebtedness incurred by a Shareholder in order to purchase or carry
shares in a tax-exempt fund is generally not deductible for federal income tax
purposes to the extent that the Fund distributes exempt-interest dividends
during the taxable year. If a Shareholder receives exempt-interest dividends
with respect to any share of these Funds and if such share is held by the
Shareholder for six months or less, then any loss on the sale or exchange of
such share will be disallowed to the extent of the amount of exempt-interest
dividends. In addition, the Code may
- 33 -
<PAGE>
require a Shareholder who receives exempt-interest dividends to treat as
taxable income a portion of certain non-taxable social security and railroad
retirement benefit payments. Furthermore, entities or persons who are
"substantial users" (or persons related to "substantial users") of facilities
financed by "private activity bonds" or certain industrial development bonds
should consult their tax advisers before purchasing shares in the Tax-Exempt
Funds. For these purposes, the term "substantial user" is defined generally to
include a "non-exempt person" who regularly uses in trade or business a part of
a facility financed from the proceeds of such bonds. Moreover, some or all of
dividends received from the Tax-Exempt Funds may be a specific preference item,
or a component of an adjustment item, for purposes of the federal individual and
corporate alternative minimum taxes. The receipt of these dividends and
distributions also may affect a corporate shareholder's federal "environmental"
tax liability, a foreign corporate shareholder's federal "branch profits" tax
liability, and a Subchapter S corporate shareholder's federal "excess net
passive income" tax liability.
Shareholders of the Tax-Exempt Funds should consult their tax advisers to
determine whether any portion of the income dividends received from the Funds is
considered tax exempt in their particular status.
Issuers of bonds purchased by the Tax-Exempt Funds (or the beneficiary of such
bonds) may have made certain representations or covenants in connection with the
issuance of such bonds to satisfy certain requirements of the Code that must be
satisfied subsequent to the issuance of such bonds. Shareholders should be
aware that exempt-interest dividends may become subject to federal income
taxation retroactively to the date of issuance of the bonds to which such
dividends are attributable if such representations are determined to have been
inaccurate or if the issuers (or the beneficiary) of the bonds fail to comply
with certain covenants made at that time.
If for any taxable year a Fund does not qualify as a RIC, all of its taxable
income will be subject to tax at regular corporate rates without any deduction
for distributions to Shareholders. In such case, distributions (including
capital gains distributions) will be taxable as ordinary dividends to the extent
of the Fund's current and accumulated earnings and profits. Such distributions
generally will be eligible for the dividends-received deduction in the case of
corporate Shareholders.
Equity and Balanced Funds
A dividends-received deduction is available to corporations that receive
dividends from domestic corporations. Dividends paid by an Equity or Balanced
Fund will be eligible for the dividends-received deduction for corporate
shareholders to the extent they are derived from dividends from domestic
corporations and to the extent that the respective security has been held for at
least three months. Equity and Balanced Fund Shareholders will be advised each
year of the portion of ordinary income dividends eligible for the deduction.
Individual shareholders are not entitled to the dividends received deduction
regardless of which fund paid the dividend.
- 34 -
<PAGE>
Fixed Income and Money Market Funds
Dividends received from other funds, e.g., Money Market or Fixed Income Funds,
----
will not be eligible for the dividends-received deduction.
State Taxes
A Fund is not liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Distributions by the Funds
to Shareholders and the ownership of shares may be subject to state and local
taxes.
Foreign Taxes
Dividends and interest received by a Fund may be subject to income, withholding
or other taxes imposed by foreign countries and U.S. possessions that would
reduce the yield on the Fund's securities. Tax conventions between certain
countries and the United States may reduce or eliminate these taxes. Foreign
countries generally do not impose taxes on capital gains with respect to
investments by foreign investors. If the Fund meets the Distribution
Requirement and if more than 50% of the value of a Fund's total assets at the
close of its taxable year consists of securities of foreign corporations, the
Fund will be eligible to file an election with the Internal Revenue Service that
will enable Shareholders, in effect, to receive the benefit of the foreign tax
credit with respect to any foreign and U.S. possessions income taxes paid by the
Fund. Pursuant to the election, a Fund will treat those taxes as dividends paid
to its Shareholders. Each Shareholder will be required to include a
proportionate share of those taxes in gross income as income received from a
foreign source and must treat the amount so included as if the Shareholder had
paid the foreign tax directly. The Shareholder may then either deduct the taxes
deemed paid by him or her in computing his or her taxable income or,
alternatively, use the foregoing information in calculating the foreign tax
credit against the Shareholder's federal income tax. If the Fund makes the
election, it will report annually to its Shareholders the respective amounts per
share of the Fund's income from sources within, and taxes paid to, foreign
countries and U.S. possessions.
PORTFOLIO TRANSACTIONS
The Trust has no obligation to deal with any dealer or group of dealers in the
execution of transactions in portfolio securities. Subject to policies
established by the Trustees, the Advisor and Sub-Advisor is responsible for
placing the orders to execute transactions for the Fund. In placing orders, it
is the policy of the Trust to seek to obtain the best net results taking into
account such factors as price (including the applicable dealer spread), the
size, type and difficulty of the transaction involved, the firm's general
execution and operational facilities, and the firm's risk in positioning the
securities involved. While the Advisor and Sub-Advisor generally seeks
reasonably competitive
- 35 -
<PAGE>
spreads or commissions, the Trust will not necessarily be paying the lowest
spread or commission available.
The money market securities in which the Funds invest are traded primarily in
the over-the-counter market. Bonds and debentures are usually traded over-the-
counter, but may be traded on an exchange. Where possible, the Advisor and Sub-
Advisor will deal directly with the dealers who make a market in the securities
involved except in those circumstances where better prices and execution are
available elsewhere. Such dealers usually are acting as principal for their own
account. On occasion, securities may be purchased directly from the issuer.
Money market securities are generally traded on a net basis and do not normally
involve either brokerage commissions or transfer taxes. The cost of executing
portfolio securities transactions of the Trust will primarily consist of dealer
spreads and underwriting commissions.
TRADING PRACTICES AND BROKERAGE
The Advisor and Sub-Advisor select brokers or dealers to execute transactions
for the purchase or sale of portfolio securities on the basis of their judgment
of the professional capability of the brokers or dealers to provide the service.
The primary consideration is to have brokers or dealers execute transactions at
best price and execution. Best price and execution refer to many factors,
including the price paid or received for a security, the commission charged, the
promptness and reliability of execution, the confidentiality and placement
accorded the order and other factors affecting the overall benefit obtained by
the account on the transaction. The Trust's determination of what are
reasonably competitive rates is based upon the professional knowledge of its
trading department as to rates paid and charged for similar transactions
throughout the securities industry. In some instances, the Trust pays a minimal
share transaction cost when the transaction presents no difficulty. Some trades
are made on a net basis where the Trust either buys securities directly from the
dealer or sells them to the dealer. In these instances, there is no direct
commission charged but there is a spread (the difference between the buy and
sell price) which is the equivalent of a commission.
The Trust may allocate out of all commission business generated by all of the
Funds and any other accounts under management by the Advisor and Sub-Advisor,
brokerage business to brokers or dealers who provide brokerage and research
services. These research services include advice, either directly or through
publications or writings, as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the availability of
securities or purchasers or sellers of securities; furnishing of analyses and
reports concerning issuers, securities or industries; providing information on
economic factors and trends; assisting in determining portfolio strategy;
providing computer software used in security analyses; and providing portfolio
performance evaluation and technical market analyses. Such services are used by
the Advisor and Sub-Advisor in connection with their investment decision-making
process with respect to one or more funds and accounts managed by them, and may
not be used exclusively with respect to the fund or account generating the
brokerage.
- 36 -
<PAGE>
As provided in the Securities Exchange Act of 1934 (the "1934 Act"), higher
commissions may be paid to broker-dealers who provide brokerage and research
services than to broker-dealers who do not provide such services if such higher
commissions are deemed reasonable in relation to the value of the brokerage and
research services provided. Although transactions are directed to broker-dealers
who provide such brokerage and research services, the Trust believes that the
commissions paid to such broker-dealers are not, in general, higher than
commissions that would be paid to broker-dealers not providing such services and
that such commissions are reasonable in relation to the value of the brokerage
and research services provided. In addition, portfolio transactions which
generate commissions or their equivalent are directed to broker-dealers who
provide daily portfolio pricing services to the Trust. Subject to best price and
execution, commissions used for pricing may or may not be generated by the funds
receiving the pricing service.
The Advisor and Sub-Advisor may place a combined order for two or more accounts
or Funds engaged in the purchase or sale of the same security if, in their
judgment, joint execution is in the best interest of each participant and will
result in best price and execution. Transactions involving commingled orders
are allocated in a manner deemed equitable to each account or Fund. It is
believed that the ability of the accounts to participate in volume transactions
will generally be beneficial to the accounts and Funds. Although it is
recognized that, in some cases, the joint execution of orders could adversely
affect the price or volume of the security that a particular account or Fund may
obtain, it is the opinion of the Advisor and Sub-Advisor and the Trust's Board
of Trustees that the advantages of combined orders outweigh the possible
disadvantages of separate transactions.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., and subject to seeking best price and execution, the
Funds may place orders with broker-dealers which have agreed to defray certain
Trust expenses such as custodian fees, and may, at the request of the
Distributor, give consideration to sales of shares of the Trust as a factor in
the selection of brokers and dealers to execute Trust portfolio transactions.
It is expected that the Trust may execute brokerage or other agency transactions
through the Distributor or an affiliate of the Advisor or Sub-Advisor, which is
a registered broker-dealer, for commissions in conformity with the 1940 Act, the
1934 Act and rules promulgated by the SEC. Under these provisions, the
Distributor or an affiliate of the Advisor or Sub-Advisor is permitted to
receive and retain compensation for effecting portfolio transactions for the
Trust on an exchange. These rules further require that commissions paid to the
Distributor by the Trust for exchange transactions not exceed "usual and
customary" brokerage commissions. The rules define "usual and customary"
commissions to include amounts which are "reasonable and fair compared to the
commission, fee or other remuneration received or to be received by other
brokers in connection with comparable transactions involving similar securities
being purchased or sold on a securities exchange during a comparable period of
time." In addition, the Trust may direct commission business to one or more
designated broker-dealers in connection with such broker-dealers' provision of
services to the Trust or payment of certain Trust expenses (e.g., custody,
----
pricing and professional fees). The Trustees, including those who are not
"interested persons" of the Trust, have adopted procedures for evaluating
- 37 -
<PAGE>
the reasonableness of commissions paid to the Distributor and will review these
procedures periodically.
- 38 -
<PAGE>
For the fiscal year ended December 31, 1995, the Funds paid the following
brokerage fees:
<TABLE>
<CAPTION>
====================================================================================================================================
Total
Commissions Total $ Amount Total $
Total $ Amount of Paid to SFS in of Brokered Amount of
Total $ Brokerage % of Total of Connection with Transactions Brokerage
Amount of Commissions Paid Brokerage Repurchase for Research in Commissions
Brokerage to Affiliates in Commissions Agreement 1995 Paid for
Fund Commissions 1995 Paid to Transactions in Research
Paid in 1995 Affiliates in 1995 in 1995
1995
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Intermediate Government
Fixed Income Fund $ 0 $ 0 0% $ 1,862 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Fixed Income Fund $ 0 $ 0 0% $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Fixed Income Fund $ 0 $ 0 0% $ 1,358 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Global Fixed Income Fund $ 0 $ 0 0% $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Limited Volatility Fixed
Income Fund * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Value Fund $125,283 $ 2,994 2% $ 3,876 $ 73,554,157 $ 92,720
- ------------------------------------------------------------------------------------------------------------------------------------
Growth Fund $117,644 $ 10,080 9% $ 1,543 $113,989,350 $ 99,032
- ------------------------------------------------------------------------------------------------------------------------------------
Small Cap Fund $ 73,502 $ 0 0% $ 629 $ 43,694,849 $ 48,910
- ------------------------------------------------------------------------------------------------------------------------------------
International Equity Fund $169,608 $ 66,033 39% $ 0 $ 39,106,020 $167,785
- ------------------------------------------------------------------------------------------------------------------------------------
Asian Tigers Fund $102,905 $ 24,295 24% $ 0 $ 11,863,960 $102,906
- ------------------------------------------------------------------------------------------------------------------------------------
TransEurope Fund * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Latin America Equity Fund * * * * * *
- ------------------------------------------------------------------------------------------------------------------------------------
Balanced Fund $ 87,467 $ 732 1% $ 2,678 $ 44,370,966 $ 74,696
- ------------------------------------------------------------------------------------------------------------------------------------
Tax-Exempt Money Market Fund $ 0 $ 0 0% $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Money Market Fund $ 0 $ 0 0% $59,095 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Treasury Money Market Fund $ 0 $ 0 0% $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- 39 -
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Total
Commissions Total $ Amount Total $
Total $ Amount of Paid to SFS in of Brokered Amount of
Total $ Brokerage % of Total of Connection with Transactions Brokerage
Amount of Commissions Paid Brokerage Repurchase for Research in Commissions
Brokerage to Affiliates in Commissions Agreement 1995 Paid for
Fund Commissions 1995 Paid to Transactions in Research
Paid in 1995 Affiliates in 1995 in 1995
1995
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Government Money Market Fund $ 0 $ 0 0% $27,358 $ 0 $ 0
====================================================================================================================================
</TABLE>
* Not in operation during the period.
For the fiscal years ended December 31, 1993 and 1994, the Funds paid the
following brokerage fees:
<TABLE>
<CAPTION>
======================================================================================================================
Total $ Amount Total $ Amount
of Brokerage of Brokerage
Total $ Commissions Commissions
Total $ Amount of Amount of Paid to Paid to
Brokerage Brokerage Affiliates in Affiliates in
Commissions Paid Commissions 1993 1994
Fund in 1993 Paid in 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Intermediate Government Fixed Income Fund $ 3,321 $ 4,586 $ 3,321 $ 4,586
- ----------------------------------------------------------------------------------------------------------------------
Tax-Exempt Fixed Income Fund $ 0 $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------
Fixed Income Fund $ 7,085 $ 2,336 $ 7,085 $ 2,336
- ----------------------------------------------------------------------------------------------------------------------
Global Fixed Income Fund $ 0 $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------
Limited Volatility Fixed Income Fund * * * *
- ----------------------------------------------------------------------------------------------------------------------
Value Fund $ 90,152 $ 80,300 $ 2,511 $ 1,720
- ----------------------------------------------------------------------------------------------------------------------
Growth Fund $277,963 $158,115 $ 3,859 $ 5,620
- ----------------------------------------------------------------------------------------------------------------------
Small Cap Fund $ 51,537 $ 36,790 $ 951 $ 1,550
- ----------------------------------------------------------------------------------------------------------------------
International Equity Fund $ 95,564 $113,705 $47,017 $ 62,007
- ----------------------------------------------------------------------------------------------------------------------
Asian Tigers Fund * $160,589 * $ 59,738
- ----------------------------------------------------------------------------------------------------------------------
TransEurope Fund * * * *
- ----------------------------------------------------------------------------------------------------------------------
Latin America Equity Fund * * * *
- ----------------------------------------------------------------------------------------------------------------------
Balanced Fund $110,819 $ 92,736 $ 6,433 $ 3,575
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
- 40 -
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
Total $ Amount Total $ Amount
of Brokerage of Brokerage
Total $ Commissions Commissions
Total $ Amount of Amount of Paid to Paid to
Brokerage Brokerage Affiliates in Affiliates in
Commissions Paid Commissions 1993 1994
Fund in 1993 Paid in 1994
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax-Exempt Money Market Fund $ 0 $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------
Money Market Fund $ 26,725 $ 75,718 $26,725 $ 75,718
- ----------------------------------------------------------------------------------------------------------------------
Treasury Money Market Fund $ 0 $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------
Government Money Market Fund $ 15,839 $ 23,064 $15,839 $ 23,064
======================================================================================================================
</TABLE>
* Not in operation during the period.
The broker-dealers who executed transactions on behalf of the Funds and who are
affiliates of the Fund's Advisor and Sub-Advisor are brokers in the ABN AMRO
International brokerage network. In addition, the Funds executed brokerage
trades through SEI Financial Services Company, an affiliate of the Administrator
and Distributor.
Except for the Intermediate Government Fixed Income, Fixed Income, Tax Exempt
Fixed Income and Global Fixed Income Funds, it is expected that the portfolio
turnover rate will normally not exceed 100% for any Fund. A portfolio turnover
rate would exceed 100% if all of its securities, exclusive of U.S. Government
securities and other securities whose maturities at the time of acquisition are
one year or less are replaced in the period of one year. Turnover rates may
vary from year to year and may be affected by cash requirements for redemptions
and by requirements which enable a Fund to receive favorable tax treatment.
For the fiscal years ended December 31, 1994 and 1995, the portfolio turnover
rate for each of the Funds was:
<TABLE>
<CAPTION>
============================================================
Turnover Rate
Fund 1994 1995
- ------------------------------------------------------------
<S> <C> <C>
Value Fund 38% 37%
- ------------------------------------------------------------
Growth Fund 68% 71%
- ------------------------------------------------------------
Small Cap Fund 43% 142%
- ------------------------------------------------------------
International Equity Fund 6% 11%
- ------------------------------------------------------------
</TABLE>
- 41 -
<PAGE>
<TABLE>
<CAPTION>
============================================================
Turnover Rate
Fund 1994 1995
- ------------------------------------------------------------
<S> <C> <C>
TransEurope Fund * *
- ------------------------------------------------------------
Asian Tigers Fund 13% 28%
- ------------------------------------------------------------
Latin America Equity Fund * *
- ------------------------------------------------------------
Fixed Income Fund 126% 59%
- ------------------------------------------------------------
Intermediate Government Fixed Income Fund 124% 115%
- ------------------------------------------------------------
Tax-Exempt Fixed Income Fund 146% 129%
- ------------------------------------------------------------
Global Fixed Income Fund 138% 105%
- ------------------------------------------------------------
Limited Volatility Fixed Income Fund * *
- ------------------------------------------------------------
Balanced Fund 85% 85%
===========================================================
</TABLE>
* Not in operation during the period.
DESCRIPTION OF SHARES
The Declaration of Trust authorizes the issuance of an unlimited number of
shares of the Funds each of which represents an equal proportionate interest in
that Fund with each other share. Shares are entitled upon liquidation to a pro
---
rata share in the net assets of the Funds. Shareholders have no preemptive
- ----
rights. The Declaration of Trust provides that the Trustees of the Trust may
create additional series of shares. All consideration received by the Trust for
shares of any additional series and all assets in which such consideration is
invested would belong to that series and would be subject to the liabilities
related thereto. Share certificates representing shares will not be issued.
SHAREHOLDER LIABILITY
The Trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust, under certain
circumstances, could be held personally liable as partners for the obligations
of the Trust. Even if, however, the Trust were held to be a partnership, the
possibility of the Shareholders' incurring financial loss for that reason
appears remote because the Trust's Declaration of Trust contains an express
disclaimer of Shareholder liability for obligations of the Trust and requires
that notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by or on behalf of the Trust or the
Trustees, and because the Declaration of Trust provides for indemnification out
of the Trust property for any Shareholder held personally liable for the
obligations of the Trust.
- 42 -
<PAGE>
5% AND 25% SHAREHOLDERS
As of February 15, 1996, the following persons were the only persons who were
record owners (or to the knowledge of the Trust, beneficial owners) of 5% or 25%
or more of the shares of the Funds. Persons who owned of record or beneficially
more than 25% of a Fund's outstanding shares may be deemed to control the Fund
within the meaning of the 1940 Act. The Trust believes that most of the shares
of the Trust Class shares of the Funds were held for the record owner's
fiduciary, agency or custodial customers.
TREASURY MONEY MARKET FUND
LaSalle National Trust, N.A. 93.63%
P.O. Box 1443
Chicago, IL 60690
GOVERNMENT MONEY MARKET FUND
LaSalle National Trust, N.A. 97.02%
P.O. Box 1443
Chicago, IL 60690
MONEY MARKET FUND
LaSalle National Trust, N.A. 99.68%
P.O. Box 1443
Chicago, IL 60690
TAX-EXEMPT MONEY MARKET FUND
LaSalle National Trust, N.A. 98.63%
P.O. Box 1443
Chicago, IL 60690
FIXED INCOME FUND
LaSalle National Trust, N.A. 99.45%
P.O. Box 1443
Chicago, IL 60690
- 43 -
<PAGE>
INTERMEDIATE GOVERNMENT FIXED INCOME FUND
LaSalle National Trust, N.A. 96.86%
P.O. Box 1443
Chicago, IL 60690
TAX-EXEMPT FIXED INCOME FUND
LaSalle National Trust, N.A. 97.81%
P.O. Box 1443
Chicago, IL 60690
GLOBAL FIXED INCOME FUND
LaSalle National Trust, N.A. 99.21%
P.O. Box 1443
Chicago, IL 60690
VALUE FUND
LaSalle National Trust, N.A. 98.84%
P.O. Box 1443
Chicago, IL 60690
GROWTH FUND
LaSalle National Trust, N.A. 96.80%
P.O. Box 1443
Chicago, IL 60690
SMALL CAP FUND
LaSalle National Trust, N.A. 97.80%
P.O. Box 1443
Chicago, IL 60690
INTERNATIONAL EQUITY FUND
LaSalle National Trust, N.A. 98.04%
P.O. Box 1443
Chicago, IL 60690
- 44 -
<PAGE>
ASIAN TIGERS FUND
LaSalle National Trust, N.A. 95.38%
P.O. Box 1443
Chicago, IL 60690
BALANCED FUND
LaSalle National Trust, N.A. 92.78%
P.O. Box 1443
Chicago, IL 60690
LIMITATION OF TRUSTEES' LIABILITY
The Declaration of Trust provides that a Trustee shall be liable only for his
own willful defaults and, if reasonable care has been exercised in the selection
of officers, agents, employees or investment advisers, shall not be liable for
any neglect or wrongdoing of any such person. The Declaration of Trust also
provides that the Trust will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with actual or threatened
litigation in which they may be involved because of their offices with the Trust
unless it is determined in the manner provided in the Declaration of Trust that
they have not acted in good faith in the reasonable belief that their actions
were in the best interests of the Trust. However, nothing in the Declaration of
Trust shall protect or indemnify a Trustee against any liability for his willful
misfeasance, bad faith, gross negligence or reckless disregard of his duties.
EXPERTS
The financial statements of Rembrandt Funds(R) as of December 31, 1995, and for
each of the periods presented therein, appearing in this Statement of Additional
Information have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report therein appearing elsewhere herein, and are included in
reliance upon such reports given upon the authority of such firm as experts in
accounting and auditing.
- 45 -
<PAGE>
APPENDIX
Description of Commercial Paper Ratings
The following descriptions of commercial paper ratings have been published by
Standard & Poor's Corporation ("S&P"), Moody's Investors Service, Inc.
("Moody's"), Fitch Investors Service, Inc. ("Fitch"), Duff & Phelps, Inc.
("Duff") and IBCA Limited and IBCA, Inc. (together, "IBCA").
Commercial paper rated A by S&P is regarded by S&P as having the greatest
capacity for timely payment. Issues rated A are further refined by use of the
numbers 1, 1+ and 2, to indicate the relative degree of safety. Issues rated A-
1+ are those with "extremely strong safety characteristics." Those rated A-1,
the highest rating category, reflect a "satisfactory" degree of safety regarding
timely payment. Those rated A-2, the second highest rating category, reflect a
safety regarding timely payment but not as high as A-1.
Commercial paper issues rated Prime-1 or Prime-2 by Moody's are judged by
Moody's to be of "superior" quality and "strong" quality respectively on the
basis of relative repayment capacity.
The rating F-1+ (Exceptionally Strong) is the highest commercial paper rating
assigned by Fitch. Paper rated Fitch. Paper rated Fitch-1+ is regarded as
having the strongest degree of assurance for timely payment. Paper rated F-1
(Very Strong) reflects an assurance of timely payment only slightly less in
degree than paper rated F-1+ the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by Duff.
Paper rated Duff-1 is regarded as having very high certainty of timely payment
with excellent liquidity factors which are supported by good fundamental
protection factors. Risk factors are minor. Duff has incorporated gradations
of 1+ and 1- to assist investors in recognizing quality differences within this
highest tier. Paper rated Duff-1+ has the highest certainty of timely payment,
with outstanding short-term liquidity and safety just below risk-free U.S.
Treasury short-term obligations. Paper rated Duff-1- has high certainty of
timely payment with strong liquidity factors which are supported by good
fundamental protection factors. Risk factors are very small. Paper rated Duff-
2 is regarded as having good certainty of timely payment, good access to capital
markets (although ongoing funding may enlarge total financing requirements) and
sound liquidity factors and company fundamentals. Risk factors are small.
The designation A1, the highest rating category established by IBCA indicates
that the obligation is supported by a very strong capacity for timely repayment.
Those obligations rated A1+ are supported by the highest capacity for timely
repayment. Obligations rated A2, the second highest rating category, are
supported by a satisfactory capacity for timely repayment, although such
capacity may be susceptible to adverse changes in business, economic or
financial conditions.
- 46 -
<PAGE>
Description of Corporate Bond Ratings
The following descriptions of corporate bond ratings have been published by S&P,
Moody's, Fitch, Duff and IBCA.
Bonds rated AAA have the highest rating S&P assigns to a debt obligation. Such
a rating indicates an extremely strong capacity to pay principal and interest.
Bonds rated AA also qualify as high-quality debt obligations. Capacity to pay
principal and interest is very strong, and differs from AAA issues only in small
degree. Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
Bonds which are rated BBB are considered as medium-grade obligations (i.e., they
are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Bonds which are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged". Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than in Aaa securities.
Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
Debt rated Baa is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high grade, broadly
marketable, suitable for investment by trustees and fiduciary institutions
liable to but slight market fluctuation other than through changes in the money
rate. The prime feature of an AAA bond is a showing of earnings several times
or many times interest requirements, with such stability of applicable earnings
that
A-2
<PAGE>
safety is beyond reasonable question whatever changes occur in conditions. Bonds
rated AA by Fitch are judged by Fitch to be of safety virtually beyond question
and are readily salable, whose merits are not unlike those of the AAA class, but
whose margin of safety is less strikingly broad. The issue may be the obligation
of a small company, strongly secured but influenced as to rating by the lesser
financial power of the enterprise and more local type market. Fitch uses plus
and minus signs to indicate the relative position of a credit within the AA
rating category. Bonds rated AAA by Fitch are considered to be investment grade
and of the highest credit quality. The obligor has an exceptionally strong
ability to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events. Bonds rated AA by Fitch are considered to be
investment grade and of very high credit quality. The obligor's ability to pay
interest and repay principal is very strong, although not quite as strong as
bonds rated AAA. Because bonds rated in the AAA and AA categories are not
significantly vulnerable to foreseeable future developments, short-term debt of
these issuers is generally rated F-1+.
Fitch uses plus and minus signs to indicate the relative position of a credit
within the AA rating category. Bonds rated AAA by Fitch are considered to be
investment grade and of the highest credit quality. The obligor has an
exceptionally strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events. Bonds rated AA by
Fitch are considered to be investment grade of very high credit quality. The
obligor's ability to pay interest and repay principal is very strong, although
not quite as strong as bonds rated AAA. Because bonds rated in the AAA and AA
categories are not significantly vulnerable to foreseeable future developments,
short-term debt of these issuers is generally rated F-1+.
Bonds rated Duff-1 are judged by Duff to be of the highest credit quality with
negligible risk factors; only slightly more than for risk-free U.S. Treasury
debt. Bonds rated AA by Duff are judged to be of high credit quality.
Protection factors are strong. Risk is modest but may vary slightly from time
to time because of economic conditions.
Obligations rated AAA by IBCA have the lowest expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial, such
that adverse changes in business, economic or financial conditions are unlikely
to increase investment risk significantly. Obligations for which there is a
very low expectation of investment risk are rated AA by IBCA. Capacity for
timely repayment of principal and interest is substantial. Adverse changes in
business, economic or financial conditions may increase investment risk albeit
not very significantly.
A-3
<PAGE>
Statement of Net Assets
TREASURY MONEY MARKET FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
U.S. Treasury Obligations 95%
Cash Equivalents 5%
Description Face Amount (000) Value (000)
- --------------------------------------------------------------------------------
U.S. Treasury Obligations -95%
U.S. Treasury Bills
5.300%, 01/04/96 $ 3,000 $ 2,999
5.360%, 01/11/96 4,000 3,994
5.250%, 01/18/96 5,000 4,988
5.360%, 01/25/96 14,066 14,020
5.350%, 02/08/96 15,000 14,924
5.630%, 02/15/96 5,000 4,967
4.910%, 03/07/96 5,000 4,955
4.900%, 03/14/96 2,000 1,980
U.S. Treasury Notes
4.000%, 01/31/96 13,500 13,484
7.875%, 02/15/96 3,000 3,007
4.625%, 02/15/96 3,000 2,997
7.500%, 02/29/96 3,000 3,009
4.625%, 02/29/96 11,000 10,984
9.375%, 04/15/96 9,000 9,100
7.625%, 04/30/96 5,000 5,033
5.500%, 04/30/96 9,000 9,007
4.250%, 05/15/96 3,000 2,986
-------
Total U.S. Treasury Obligations
(Cost $112,434,000) 112,434
Description Shares (000) Value (000)
- --------------------------------------------------------------------------------
Cash Equivalent - 4.7%
SEI Daily Income Trust Treasury $ 5,564 $ 5,564
II Portfolio --------
5.120%, 01/08/96
Total Cash Equivalent
(Cost $5,564,000 5,564
Total Investments - 99.7%
(Cost $117,998,000) 117,998
--------
Other Assets and Liabilities - 0.3%
Other Assets and Liabilities, Net 408
--------
Net Assets:
Portfolio Shares of the Trust Class (unlimited
authorization - no par value) based on
110,466,966 outstanding shares of beneficial
interest 110,467
Portfolio shares of the Investor Class (unlimited
authorization - no par value) based on 7,930,873
outstanding shares of beneficial interest 7,931
Accumulated net realized gain on investments 8
--------
Total Net Assets - 100.0% $118,406
========
Net Asset Value, Offering, and Redemption Price
Per Share - Trust Class $ 1.00
========
Net Asset Value, Offering, and Redemption Price
Per Share - Investor Class $ 1.00
========
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
DECEMBER 31, 1995
[REMBRANDT LOGO]
Statement of Net Assets
GOVERNMENT MONEY MARKET FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
U.S. Government Agency Obligations 60%
Repurchase Agreements 40%
Description Face
Amount(000) Value (000)
- -------------------------------------------------------------------------------
U.S. Government Agency Obligations - 60.5%
FFCB
5.700%, 01/02/96 $ 5,000 $ 5,000
5.630%, 03/01/96 10,000 10,000
FHLB
7.310%, 01/04/96 275 275
7.750%, 04/25/96 1,000 1,006
FHLB Discount Notes
5.560%, 01/22/96 3,000 2,990
5.710%, 01/23/96 4,000 3,986
5.570%, 02/12/96 5,000 4,968
5.570%, 02/21/96 5,000 4,961
5.620%, 02/27/96 7,580 7,514
5.630%, 02/29/96 13,000 12,883
5.390%, 03/19/96 13,410 13,253
FHLMC Discount Notes
5.650%, 02/08/96 8,000 7,953
5.560%, 02/20/96 5,000 4,961
5.620%, 02/29/96 4,000 3,964
Description Face
Amount(000) Value (000)
- -------------------------------------------------------------------------------
FNMA
5.660%, 03/15/96 4,000 4,000
FNMA Discount Notes
5.650%, 02/15/96 7,140 7,090
5.570%, 02/16/96 5,000 4,964
5.620%, 03/04/96 3,220 3,189
5.490%, 03/11/96 5,000 4,947
5.380%, 04/12/96 5,000 4,924
5.230%, 09/05/96 5,000 4,820
5.200%, 10/24/96 5,000 4,785
SLMA (A)
5.400%, 01/30/96 5,000 5,001
-------
Total U.S. Government Agency Obligations
(Cost $127,434,000) 127,434
-------
Repurchase Agreements - 39.8%
Lehman Brothers
5.93%, dated 12/29/95, matures 01/02/96,
repurchase price
$37,438,000 (collateralized by FHLMC Gold
Notes, par value $42,440,000, 6.50%, 07/01/09,
market value: $38,160,000 37,413 37,413
-------
Normura Securities
5.93%, dated 12/29/95, matures 01/02/96,
repurchase price
$46,424,000 (collateralized by various FNMA
obligations, total par
value $129,559,479,0.00% - 11.088%, 06/25/21 -
06/01/24; and FHLMC/GNMA obligation, par
value $1,000,000, 5.00%, 04/25/21, total market
value: $47,322,000) 46,394 46,394
-------
Total Repurchase Agreements
(Cost $83,807,000) 83,807
-------
Total Investments - 100.3%
(Cost $211,241,000) 211,241
-------
Other Assets and Liabilities - (0.3%)
Other Assets and Liabilities, Net (624)
-------
23
<PAGE>
Statement of Net Assets
Description Value (000)
- --------------------------------------------------------------------------------
Net Assets:
Portfolio shares of the Trust Class (unlimited
authorization - no par value) based on
207,584,587 outstanding shares of beneficial interest $207,585
Portfolio shares of the Investor Class
(unlimited authorization - no par value) based
on 3,002,229 oustanding shares of beneficial interest 3,002
Accumulated net realized gain on investments 30
--------
Total Net Assets - 100.0% $210,617
========
Net Asset Value, Offering, and Redemption Price Per
Share - Trust Class $ 1.00
========
Net Asset Value, Offering, and Redemption Price Per
Share - Investor Class $ 1.00
========
(A) Variable rate interest. The rate reflected on the Statement of Net Assets
is the rate in effect on December 31, 1995.
FFCB - Federal Farm Credit Bank
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
SLMA - Student Loan Marketing Association
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
DECEMBER 31, 1995
[REMBRANDT LOGO]
Statement of Net Assets
Money Market Fund
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
<TABLE>
<S> <C>
Certificates of Deposit 41%
Commercial Paper 19%
U.S. Government Agency Obligations 30%
Corporate Bonds 1%
Repurchase Agreements 9%
</TABLE>
<TABLE>
<CAPTION>
Face
Description Amount (000) Value (000)
- ------------------------------------------------------------------------
<S> <C> <C>
Certificates Of Deposit -- 40.7%
Bank of Nova Scotia, New York
5.750%, 03/04/96 $ 8,000 $ 8,000
Barclays Bank, New York
5.770%, 01/16/96 18,000 18,000
Bayerische Vereinsbank, New York
5.730%, 01/30/96 15,000 15,000
Canadian Imperial Bank of
Commerce, New York
5.730%, 02/01/96 18,000 18,000
Commerzbank, New York
5.690%, 03/04/96 15,000 15,001
Credit Suisse, New York
5.770%, 01/22/96 10,000 10,000
Deutsche Bank, New York
5.770%, 01/19/96 8,000 8,000
5.790%, 01/25/96 10,000 10,000
Harris Trust Savings Bank
5.600%, 02/15/96 10,000 10,000
NBD Bank
5.750%, 01/18/96 10,000 10,000
National Westminster Bank, New York
5.830%, 01/12/96 8,000 8,000
5.810%, 01/31/96 5,000 5,000
5.720%, 02/16/96 5,000 5,001
<CAPTION>
Face
Description Amount (000) Value (000)
- -------------------------------------------------------------------------
<S> <C> <C>
Rabobank Nederland NV, New York
5.710%, 02/14/96 $ 8,000 $ 8,000
5.810%, 01/23/96 10,000 10,000
Societe Generale Bank, New York
5.780%, 01/12/96 8,000 8,000
5.750%, 02/15/96 5,000 5,000
5.860%, 03/20/96 5,000 5,001
Wachovia Bank
5.770%, 01/12/96 10,000 10,000
5.810%, 01/25/96 8,000 8,000
----------
Total Certificates Of Deposit
(Cost $194,003,000) 194,003
----------
Commercial Paper -- 19.3%
American Express Credit
5.490%, 03/25/96 18,000 17,769
Associates Corporation of
North America
5.580%, 03/27/96 18,000 17,760
Enterprise Funding
5.700%, 01/05/96 8,000 7,995
5.770%, 01/16/96 8,000 7,981
General Electric Capital
5.680%, 02/13/96 8,000 7,946
5.530%, 04/01/96 5,000 4,930
Golden Managers Acceptance
5.800%, 01/31/96 10,000 9,952
Norwest
5.720%, 01/23/96 10,000 9,965
5.720%, 01/26/96 8,000 7,968
----------
Total Commercial Paper
(Cost $92,266,000) 92,266
----------
U.S. Government Agency Obligations -- 30.1%
FFCB
5.700%, 01/02/96 10,000 10,000
FHLB Discount Notes
5.550%, 01/17/96 10,000 9,975
5.570%, 02/12/96 10,000 9,935
5.650%, 02/15/96 8,845 8,784
5.570%, 02/21/96 10,000 9,921
5.630%, 02/29/96 10,000 9,909
5.540%, 03/13/96 10,975 10,857
5.550%, 03/25/96 12,000 11,849
</TABLE>
25
<PAGE>
Statement of Net Assets
Face
Description Amount (000) Value (000)
- --------------------------------------------------------------------------------
FHLMC Discount Note
5.620%, 02/29/96 $ 7,000 $ 6,936
FNMA Discount Notes
5.660%, 02/14/96 15,000 14,898
5.580%, 03/12/96 11,000 10,883
5.420%, 05/10/96 10,000 9,805
5.500%, 05/30/96 10,000 9,777
SLMA (A)
5.400%, 01/30/96 10,000 10,002
----------
Total U.S. Government Agency Obligations
(Cost $143,531,000) 143,531
----------
Corporate Bonds -- 1.1%
General Electric Capital MTN
5.850%, 08/29/96 5,000 4,998
----------
Total Corporate Bonds
(Cost $4,998,000) 4,998
----------
Repurchase Agreements -- 8.9%
Nomura Securities
5.95%, dated 12/29/95,
matures 01/02/96, repurchase price
$42,686,000 (collateralized by various
FNMA obligations, total par value
$70,195,574, 0.00%-6.50%,
09/25/22-06/01/24, total market
value: $43,511,000) 42,658 42,658
----------
Total Repurchase Agreements
(Cost $42,658,000) 42,658
----------
Total Investments -- 100.1%
(Cost $477,456,000) 477,456
----------
Other Assets and Liabilities -- (0.1%)
Other Assets and Liabilities, Net (410)
----------
Description Value (000)
- -----------------------------------------------------------------------------
Net Assets:
Portfolio shares of the Trust Class (unlimited
authorization -- no par value) based on
475,683,858 outstanding shares of beneficial
interest $475,684
Portfolio shares of the Investor Class (unlimited
authorization -- no par value) based on 1,358,282
outstanding shares of beneficial interest 1,358
Accumulated net realized gain on investments 4
----------
Total Net Assets -- 100.0% $477,046
==========
Net Asset Value, Offering, and Redemption Price
Per Share -- Trust Class $1.00
==========
Net Asset Value, Offering, and Redemption
Price Per Share -- Investor Class $1.00
==========
(A) Variable rate instrument. The rate reflected on the Statement of Net Assets
is the rate in effect on December 31, 1995.
FFCB -- Federal Farm Credit Bank
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
MTN -- Medium Term Notes
SLMA -- Student Loan Marketing Association
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
DECEMBER 31, 1995
[REMBRANDT LOGO]
Statement of Net Assets
Tax-Exempt Money Market Fund
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
Tax-Exempt Money Market Fund
Municipal Bonds 93%
Cash Equivalents 7%
Face
Description Amount (000) Value (000)
- ----------------------------------------------------------------
Municipal Bonds -- 92.6%
Alabama -- 3.2%
Housing Finance Authority,
Rime V. Uage Hoover Project
1988-A TECP
3.600%, 02/22/96 $1,500 $1,500
Montgomery, Industrial
Development Board, GE Project
Ser 1990 TECP
3.800%, 01/08/96 4,000 4,000
----------
5,500
----------
Arizona -- 4.7%
Salt River Project, Agricultural
Improvement & Power
District TECP
3.800%, 01/18/96 (C) 4,000 4,000
3.550%, 01/29/96 4,000 4,000
----------
8,000
----------
Face
Description Amount (000) Value (000)
- ------------------------------------------------------------------
Colorado -- 1.2%
El Paso County, School District #11,
Colorado Springs TAN
3.950%, 06/28/96 $2,000 $2,001
----------
Florida -- 8.7%
Jacksonville, Electric Authority
TECP
3.800%, 01/12/96 3,000 3,000
3.450%, 01/19/96 5,100 5,100
Municipal Power Agency, Pooled
Loan Project TECP
3.450%, 01/31/96 6,815 6,815
----------
14,915
----------
Georgia -- 2.9%
Gwinnett County, School
District GO
4.400%, 02/01/96 5,000 5,003
----------
Idaho -- 0.2%
State TAN
4.500%, 06/27/96 400 401
----------
Illinois -- 5.4%
Cook County, Catholic Charities
Housing Development
Ser A VRDN
5.200%, 01/05/96 (A) (B) 1,000 1,000
Dupage, Water Commission RAN
5.900%, 05/01/96 1,000 1,007
State Development Finance
Authority, Saint Xavier
University Project VRDN
5.200%, 01/05/96 (A) (B) (C) 180 180
State Development Finance
Authority, Catholic Charities
Housing Development VRDN
5.200%, 01/05/96 (A) (B) 500 500
State RAN
4.500%, 04/12/96 500 501
4.500%, 05/10/96 6,000 6,015
----------
9,203
==========
27
<PAGE>
Statement of Net Assets
Face
Description Amount (000) Value (000)
- ------------------------------------------------------------------
Indiana -- 5.0%
Hoosier City of Sullivan, Energy
Rural Electric Corporation
Ser L-4 TECP
3.600%, 02/05/96 $2,100 $2,100
Jasper County, Pollution Control
Revenue, Northern Indiana
Public Service Project
Ser 1988-A TECP
3.900%, 01/09/96 (C) 1,600 1,600
3.650%, 01/09/96 (C) 1,000 1,000
Mount Vernon, Pollution Control &
Solid Waste Disposal Revenue
Ser 1989-A TECP
3.700%, 01/11/96 3,900 3,900
----------
8,600
----------
Kansas -- 0.9%
Burlington, Pollution Control
Revenue, Kansas City Power &
Light Ser 1985-A TECP
3.550%, 02/02/96 (C) 1,500 1,500
----------
Kentucky -- 1.2%
Jefferson County, Pollution Control
Revenue, Louisville Gas &
Electric Project Ser 1993-A TECP
3.850%, 01/08/96 2,000 2,000
----------
Maine -- 0.7%
State GO
6.000%, 04/15/96 1,185 1,193
----------
Maryland -- 1.5%
Montgomery County, BAN
Ser 95 TECP
3.700%, 01/11/96 2,500 2,500
----------
Minnesota -- 7.1%
Becker, Pollution Control Revenue,
Northern States Power Company
Ser 1993-B TECP
3.800%, 01/09/96 4,000 4,000
University of Minnesota,
Ser A TECP
3.850%, 01/22/96 8,075 8,075
----------
12,075
----------
Face
Description Amount (000) Value (000)
- ------------------------------------------------------------------
Mississippi -- 3.5%
Clairborne County, Pollution
Control Revenue, Southern
Mississippi Electric Power
Association TECP
3.550%, 01/17/96 $5,000 $5,000
Hinds County, Urban Renewal,
Physicians Office Building
Group VRDN (A) (C)
5.300%, 01/05/96 965 965
----------
5,965
----------
Montana -- 2.3%
State TAN
4.500%, 06/30/96 4,000 4,016
----------
Nebraska -- 4.4%
Omaha, Public Power District TECP
3.800%, 01/10/96 1,610 1,610
3.700%, 02/12/96 5,850 5,850
----------
7,460
----------
New York -- 5.8%
New York City GO Ser B VRDN
5.000%, 01/02/96 (A) (B) 3,000 3,000
New York City Ser A TAN
4.500%, 02/15/96 3,000 3,003
New York City Ser B RAN
4.750%, 06/28/96 (FGIC) 4,000 4,015
----------
10,018
----------
Ohio -- 3.7%
Toledo-Lucas County, Port
Authority Revenue, CSX
Transportation Project TECP
3.650%, 01/03/96 6,400 6,400
----------
Pennsylvania -- 1.6%
State TAN
4.500%, 06/28/96 2,800 2,810
----------
Rhode Island -- 0.7%
State TAN
4.500%, 06/28/96 (C) 1,250 1,254
----------
28
<PAGE>
DECEMBER 31, 1995
[REMBRANDT LOGO]
Statement of Net Assets
Face
Description Amount (000) Value (000)
- --------------------------------------------------------------------
South Carolina -- 2.9%
York County, Pollution Control
Revenue, North Carolina
Electric Power Ser N-5
3.750%, 03/15/96 (C) $ 4,000 $4,000
York County, Pollution Control
Revenue, Saluda River Project
3.800%, 02/16/96 (A) 1,000 1,000
----------
5,000
----------
Texas -- 10.4%
Board of Regents of The University
of Texas, Revenue Financing
System Ser A TECP
3.850%, 01/18/96 1,600 1,600
3.900%, 01/10/96 1,425 1,425
Dallas County, Refunding
Ser A GO
3.700%, 08/15/96 1,650 1,649
Harris County TAN
4.250%, 02/28/96 1,900 1,902
Houston Texas Independent School
District TRAN
4.500%, 08/29/96 2,120 2,128
State Ser A TRAN
4.750%, 08/30/96 8,000 8,040
Texas Higher Education Authority
SER B VRDN (FGIC)
5.150%, 01/05/96 (A) 1,095 1,095
----------
17,839
----------
Vermont -- 2.3%
State GO TECP
3.600%, 02/21/96 4,000 4,000
----------
Face
Description Amount (000) Value (000)
- --------------------------------------------------------------------
Virginia -- 5.3%
Commonwealth of Virginia TECP
3.400%, 02/01/96 $ 6,000 $6,000
Peninsula Ports Authority, Coal
Terminal RB, Dominion I
Terminal Associates
Project TECP
3.450%, 01/31/96 (C) 3,000 3,000
----------
9,000
----------
Washington -- 1.1%
State GO
6.750%, 07/01/96 1,775 1,800
----------
Wisconsin -- 0.9%
Milwaukee, Revenue School Order
Note Ser B
4.750%, 08/22/96 1,500 1,509
----------
Wyoming -- 5.0%
Gillette-Campbell County, Pollution
Control Revenue, Pacificorp
Project Ser 1988 TECP
3.450%, 01/16/96 8,500 8,500
----------
Total Municipal Bonds
(Cost $158,462,000) 158,462
----------
Cash Equivalents -- 7.0%
Dreyfus Tax Exempt
Cash Management Fund
4.430%, 01/08/96 7,560 7,560
SEI Tax Exempt Trust Institutional
Tax Free Portfolio
4.200%, 01/08/96 4,487 4,487
----------
Total Cash Equivalents
(Cost $12,047,000) 12,047
----------
Total Investments -- 99.6%
(Cost $170,509,000) 170,509
----------
Other Assets and Liabilities -- 0.4%
Other Assets and Liabilities, Net 680
----------
29
<PAGE>
Statement of Net Assets
Description Value (000)
- --------------------------------------------------------------------
Net Assets:
Portfolio shares of the Trust Class (unlimited
authorization -- no par value) based on
167,955,931 outstanding shares of beneficial
interest $167,956
Portfolio shares of the Investor Class (unlimited
authorization -- no par value) based on 3,243,788
outstanding shares of beneficial interest 3,244
Accumulated net realized loss on investments (11)
----------
Total Net Assets -- 100.0% $171,189
==========
Net Asset Value, Offering, and Redemption Price
Per Share -- Trust Class $ 1.00
==========
Net Asset Value, Offering, and Redemption
Price Per Share -- Investor Class $ 1.00
==========
(A) Variable rate instrument. The rate reflected on the Statement of Net Assets
is the rate in effect on December 31, 1995.
(B) Put and demand features exist requiring the issuer to repurchase the
instrument prior to maturity. The maturity date shown is the earlier of the put
date or the maturity date.
(C) Securities are held in connection with a letter of credit or other credit
support.
BAN -- Bond Anticipation Note
GO -- General Obligation
RAN -- Revenue Anticipation Note
RB -- Revenue Bond
Ser -- Series
TAN -- Tax Anticipation Note
TECP -- Tax Exempt Commercial Paper
TRAN -- Tax and Revenue Anticipation Note
VRDN -- Variable Rate Demand Note
The following organization has provided underlying credit support for certain
securities as defined in the Statement of Net Assets.
FGIC -- Federal Guaranty Insurance Corporation
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
DECEMBER 31, 1995
[REMBRANDT LOGO]
Statement of Net Assets
Fixed Income Fund
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
Fixed Income Fund
U.S. Government Agency Obligations 1%
Repurchase Agreements 1%
U.S. Treasury Obligations 44%
U.S. Government Agency Mortgage-Backed Obligations 20%
Asset-Backed Securities 17%
Corporate Obligations 17%
Face Market
Description Amount (000) Value (000)
- ---------------------------------------------------------------------------
U.S. Treasury Obligations -- 44.0%
U.S. Treasury Bond
10.750%, 08/15/05 $14,970 $20,578
7.250%, 05/15/16 8,750 9,986
U.S. Treasury Notes
6.375%, 06/30/97 8,000 8,135
5.875%, 03/31/99 13,010 13,241
7.500%, 11/15/01 3,200 3,527
----------
Total U.S. Treasury Obligations
(Cost $51,898,000) 55,467
----------
U.S. Government Agency Mortgage-Backed
Obligations -- 19.7%
FHLMC
6.000%, 03/15/08 1,805 1,794
6.900%, 04/25/20 1,000 1,026
6.500%, 03/01/24 3,752 3,713
7.000%, 06/01/24 3,107 3,136
7.500%, 06/01/24 3,558 3,651
FNMA
6.500%, 03/01/01 1,565 1,583
8.000%, 04/01/10 1,663 1,723
9.050%, 12/25/18 943 1,005
6.500%, 10/01/23 2,034 2,012
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------------------
GNMA
8.500%, 07/15/01 $ 78 $ 82
8.500%, 11/15/01 60 63
8.500%, 07/15/02 18 18
8.500%, 06/15/03 129 136
9.500%, 11/15/16 643 690
10.000%, 07/15/18 222 244
9.500%, 07/15/18 113 122
10.000%, 12/15/18 34 37
9.000%, 03/15/19 157 166
9.000%, 09/15/19 95 101
9.000%, 02/15/20 253 268
9.500%, 05/15/20 9 10
8.000%, 06/15/23 928 967
8.000%, 08/15/24 1,972 2,055
9.500%, 01/15/25 284 305
----------
Total U.S. Agency Government Mortgage-Backed
Obligations
(Cost $23,530,000) 24,907
----------
Asset-Backed Securities -- 16.6%
American Express Master Trust
7.850%, 08/15/05 1,940 2,153
Banc One Credit Card Master Trust
6.150%, 07/15/02 2,150 2,182
Discover Card Trust
6.800%, 06/16/00 1,655 1,701
First Chicago Master Trust II (A)
6.050%, 01/15/99 2,150 2,151
MBNA America Credit Card Trust (A)
6.190%, 12/15/00 2,465 2,471
NationsBank Credit Card Master Trust
4.750%, 09/15/98 3,185 3,163
SPNB Home Equity Loans
7.850%, 05/15/98 18 18
Standard Credit Card Master Trust
8.500%, 08/07/97 2,210 2,236
The Money Store Home Equity Trust
5.750%, 10/15/22 2,431 2,376
6.650%, 01/15/16 2,520 2,553
----------
Total Asset-Backed Securities
(Cost $20,774,000) 21,004
----------
31
<PAGE>
Statement of Net Assets
Face Market
Description Amount (000) Value (000)
- --------------------------------------------------------------------------
Corporate Obligations -- 17.0%
Auburn Hills Trust
12.000%, 05/01/20 $ 710 $1,115
ANZ Banking Group
6.250%, 02/01/04 2,370 2,364
Citicorp
8.630%, 12/01/02 2,275 2,591
CNA Financial
8.880%, 03/01/98 1,005 1,069
Italy Global Bond
6.000%, 09/27/03 1,200 1,189
Kansallis-Osake-Pankki
10.000%, 05/01/02 890 1,061
Korea Electric Power
7.750%, 04/01/13 1,225 1,305
L.M. Ericsson Telephone
7.750%, 04/16/97 2,105 2,160
Lehman Brothers Holding
5.750%, 02/15/98 2,080 2,072
Lincoln National
7.250%, 05/15/05 1,780 1,889
MBIA
9.380%, 02/15/11 905 1,144
Salomon Brothers
7.430%, 06/24/99 1,685 1,725
7.130%, 08/01/99 670 680
Quebec Province
7.500%, 07/15/23 1,135 1,195
----------
Total Corporate Obligations
(Cost $20,964,000) 21,559
----------
U.S. Government Agency Obligations -- 0.9%
FHLB
7.260%, 09/06/01 1,025 1,103
----------
Total U.S. Government Agency Obligations
(Cost $1,023,000) 1,103
----------
Face Market
Description Amount (000) Value (000)
- -------------------------------------------------------------------------
Repurchase Agreement -- 0.6%
Lehman Brothers
5.90%, dated 12/29/95, matures
01/02/96, repurchase price $687,000
(collateralized by U.S. Treasury Note,
par value $705,000, 5.125%, 11/30/98,
market value: $705,000) $ 686 $ 686
----------
Total Repurchase Agreement
(Cost $686,000) 686
----------
Total Investments -- 98.8%
(Cost $118,875,000) 124,726
----------
Other Assets and Liabilities -- 1.2%
Other Assets and Liabilities, Net 1,483
----------
Net Assets:
Portfolio shares of the Trust Class (unlimited
authorization -- no par value) based on
12,165,991 outstanding shares of beneficial
interest 123,915
Portfolio shares of the Investor Class (unlimited
authorization -- no par value) based on 62,467
outstanding shares of beneficial interest 640
Undistributed net investment income 1
Accumulated net realized loss on investments (4,198)
Net unrealized appreciation on investments 5,851
----------
Total Net Assets -- 100.0% $126,209
==========
Net Asset Value, Offering, and Redemption Price
Per Share -- Trust Class $ 10.32
==========
Net Asset Value, and Redemption
Price Per Share -- Investor Class $10.35
==========
Maximum Offering Price Per Share -- Investor
Class ($10.35 + 95.5%) $ 10.84
----------
(A) Variable rate instrument. The rate reflected on the Statement of Net Assets
is the rate in effect on December 31, 1995.
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.
32
<PAGE>
Statement of Net Assets
Intermediate Government Fixed Income Fund
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
Immediate Government Fixed-IncomeFund
U.S. Government Agency Obligations 53%
Repurchase Agreements 1%
U.S. Treasury Obligations 42%
U.S. Government Agency Mortgage-Backed Obligations 4%
Face Market
Description Amount (000) Value (000)
- --------------------------------------------------------------------------------
U.S. Government Agency Obligations -- 52.9%
FFCB
6.640%, 05/18/98 $ 2,000 $ 2,007
8.650%, 10/01/99 1,650 1,828
FHLB
6.530%, 07/11/97 2,500 2,544
5.190%, 09/30/98 5,000 4,972
6.170%, 03/08/01 1,500 1,539
5.770%, 02/03/04 1,100 1,098
6.290%, 06/09/05 1,000 1,031
FHLMC
6.780%, 08/18/05 1,500 1,598
6.430%, 09/19/05 4,000 4,168
Financial Assistance
9.380%, 07/21/03 4,000 4,875
FNMA
8.800%, 07/25/97 2,065 2,170
5.650%, 10/20/97 5,025 5,055
8.450%, 07/12/99 5,000 5,459
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------------------
IBRD
8.750%, 03/01/97 $ 2,000 $2,077
--------
Total U.S. Government Agency Obligations
(Cost $39,789,000) 40,421
--------
U.S. Treasury Obligations -- 41.2%
U.S. Treasury Notes
6.380%, 06/30/97 9,250 9,405
5.750%, 09/30/97 5,000 5,045
8.880%, 02/15/99 4,500 4,961
6.250%, 05/31/00 5,000 5,169
U.S. Treasury Bond
11.880%, 11/15/03 1,000 1,398
10.750%, 08/15/05 4,000 5,499
--------
Total U.S. Treasury Obligations
(Cost $31,178,000) 31,477
--------
U.S. Government Agency Mortgage-Backed
Obligations -- 4.3%
FHLMC CMO
7.250%, 02/15/19 2,330 2,341
GNMA
9.500%, 11/15/16 108 116
Veterans Affairs
7.750%, 02/15/97 804 810
--------
Total U.S. Government Agency Mortgage-Backed
Obligations
(Cost $3,269,000) 3,267
--------
Repurchase Agreement -- 0.8%
JP Morgan
5.83%, dated 12/29/95, matures
01/02/96, repurchase price $661,000
(collateralized by GNMA ARM, par
value $725,000, 6.00%, 03/20/24,
market value: $676,000) 661 661
--------
Total Repurchase Agreements
(Cost $661,000) 661
--------
Total Investments -- 99.2%
(Cost $74,897,000) 75,826
--------
Other Assets and Liabilities -- 0.8%
Other Assets and Liabilities, Net 586
----------
33
<PAGE>
Statement of Net Assets
Face
Description Value (000)
- -------------------------------------------------------------------------------
Net Assets:
Portfolio shares of the Trust Class (unlimited
authorization -- no par value) based on
7,304,680 outstanding shares of beneficial
interest $75,173
Portfolio shares of the Investor Class (unlimited
authorization -- no par value) based on 293,228
outstanding shares of beneficial interest 2,763
Distributions in excess of net investment income (3)
Accumulated net realized loss on investments (2,450)
Net unrealized appreciation on investments 929
--------
Total Net Assets -- 100.0% $76,412
========
Net Asset Value, Offering, and Redemption Price
Per Share -- Trust Class $10.06
========
Net Asset Value and Redemption Price
Per Share -- Investor Class $10.05
========
Maximum Offering Price Per Share -- Investor
Class ($10.05 / 95.5%) $10.52
========
ARM -- Adjustable Rate Mortgage
CMO -- Collaterallized Mortgage Obligation
FFCB -- Federal Farm Credit Bank
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
IBRD -- International Bank of Reconstruction and Development
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
DECEMBER 31, 1995
[REMBRANDT LOGO]
STATEMENT OF NET ASSETS
TAX-EXEMPT FIXED INCOME FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
Tax-Exempt Fixed Income Fund
Municipal Bonds 93%
Cash Equivalents 7%
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------------
Municipal Bonds - 91.6%
Arkansas - 2.1%
Jefferson County, Pollution Control
Revenue; Arkansas Power &
Light Company GO (AMBAC)
6.300%, 06/01/18 $ 1,000 $ 1,089
-------
Florida - 2.9%
State Department of
Transportation GO 5.800%, 07/01/21 1,450 1,483
-------
Illinois - 13.0%
Development Finance Authority,
Catholic Charities Housing
Development RB
5.500%, 01/01/05 3,000 3,015
Development Finance Authority,
School District #U-46 Project RB
5.800%, 01/01/11(A) 2,000 2,103
State GO (FGIC)
5.750%, 07/01/20 1,500 1,524
-------
6,642
-------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------------
Kentucky - 4.0%
State Turnpike Authority of Economic
Development RB (AMBAC)
5.630%, 07/01/15 $ 2,000 $ 2,045
-------
Louisiana - 3.0%
East Baton Rouge Parish, Sales &
Use Tax RB (FGIC)
5.900%, 02/01/20 1,500 1,560
-------
Michigan - 2.3%
Marysville, Public School District
GO (MBIA)
5.750%, 05/01/19 1,175 1,200
-------
Mississippi - 10.4%
Harrison County, Wastewater
Treatment Facilities RB (FGIC)
5.880%, 02/01/25 2,500 2,581
State Hospital Equipment &
Facilities Authority, Baptist
Medical Center RB (MBIA)
6.500%, 05/01/10 2,500 2,760
-------
5,341
-------
Missouri - 4.5%
State Health & Educational
Facilities Authority, BJC Health
Systems Project Ser A RB
6.750%, 05/15/10 2,000 2,285
-------
Nevada - 4.1%
Clark County, Refunding & Transit
Improvement RB (MBIA)
6.200%, 06/01/19 2,000 2,095
-------
New York - 8.8%
Battery Park City Authority Ser A RB
5.000%, 11/01/08 2,500 2,419
-------
State Highway & Bridge
Improvement Fund RB (MBIA)
5.600%, 04/01/10 2,000 2,070
-------
4,489
-------
Oklahoma - 2.0%
Tulsa, Industrial Authority
Hospital, St. Johns Medical
Center Project RB
6.250%, 02/15/17 1,000 1,041
=======
35
<PAGE>
STATEMENT OF NET ASSETS
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------------
Pennsylvania - 7.0%
Philadelphia Water & Wastewater
RB (MBIA)
5.750%, 06/15/13 $ 2,000 $ 2,052
Pittsburgh Water & Sewer
Authority RB (FGIC)
5.600%, 09/01/22 1,500 1,511
-------
3,563
-------
Tennessee - 2.7%
Shelby County GO
5.600%, 04/01/10 1,350 1,394
-------
Texas - 14.4%
Lower Colorado River Authority
RB (MBIA)
5.250%, 01/01/15 2,000 1,977
San Antonio, Electric & Gas
Company Refunding RB
5.000%, 02/01/12 2,250 2,219
Victoria County Hospital
RB (AMBAC)
6.250%, 01/01/16 1,000 1,059
Wylie Independent School
District GO
7.000%, 08/15/24 1,800 2,104
-------
7,359
-------
Virginia - 8.3%
Virginia Beach GO
5.300%, 07/15/07 1,000 1,032
State Housing Development
Authority SER H RB
6.450%, 01/01/12 3,000 3,202
-------
4,234
-------
Washington - 2.1%
State Public Power Supply System,
Nuclear Project #1 Refinancing RB
7.000%, 07/01/04 1,000 1,089
-------
Total Municipal Bonds
(Cost $44,587,000) 46,909
-------
Face Market
Description Amount (000) Value (000)
- ----------------------------------------------------------------------
Cash Equivalents - 7.1%
SEI Tax Exempt Trust Institutional
Tax Free Portfolio
4.200%, 01/08/96 $ 1,671 $ 1,671
Dreyfus Tax Exempt Cash
Management Fund
4.430%, 01/08/96 1,952 1,952
-------
Total Cash Equivalents
(Cost $3,623,000) 3,623
-------
Total Investments - 98.7%
(Cost $48,210,000) 50,532
-------
Other Assets and Liabilities - 1.3%
Other Assets and Liabilities, Net 678
-------
Net Assets:
Portfolio shares of the Trust Class (unlimited
authorization--no par value) based on
4,909,030 outstanding shares of beneficial
interest 50,305
Portfolio shares of the Investor Class (unlimited
authorization--no par value) based on 111,130
outstanding shares of beneficial interest 1,109
Distributions in excess of net investment income (1)
Accumulated net realized loss on investments (2,525)
Net unrealized appreciation on investments 2,322
-------
Total Net Assets - 100.0% $51,210
=======
Net Asset Value, Offering, and Redemption Price
Per Share--Trust Class $ 10.20
=======
Net Asset Value and Redemption Price Per Share--
Investor Class $ 10.18
=======
Maximum Offering Price Per Share--Investor
Class ($10.18 + 95.5%) $ 10.66
=======
(a) Securities are held in connection with a letter of credit or other credit
support.
GO -- General Obligation
RB -- Revenue Bond
Ser -- Series
The following organizations have provided underlying credit support for certain
securities as defined in the Statement of Net Assets:
AMBAC -- American Municipal Bond Assurance Company
FGIC -- Federal Guaranty Insurance Corporation
MBIA -- Municipal Bond Insurance Association
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
Schedule of Investments
Global Fixed Income Fund
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
Global Fixed Income Fund
<TABLE>
<S> <C>
Germany 19%
Italy 5%
Japan 16%
Spain 11%
Sweden 5%
United Kingdom 13%
Other 9%
Denmark 5%
Canada 5%
France 12%
</TABLE>
<TABLE>
<CAPTION>
Face Market
Description Amount (000) (1) Value (000)
<S> <C> <C>
Foreign Bonds -- 84.9%
Australia -- 3.3%
Australian Government
10.000%, 10/15/07 700 $ 587
--------
Canada -- 4.7%
Government of Canada
8.750%, 12/01/05 1,000 818
--------
Denmark -- 4.6%
Kingdom of Denmark
7.000%, 12/15/04 4,500 808
--------
European Currency Unit -- 4.0%
Credit Foncier
8.375%, 03/17/04 530 700
--------
France -- 10.0%
BTAN French Treasury Bill
4.500%, 05/12/96 4,300 878
Societe Nationale des Chemin
8.875%, 08/11/23 3,800 876
--------
1,754
--------
</TABLE>
<TABLE>
<CAPTION>
Face Market
Description Amount (000) (1) Value (000)
<S> <C> <C>
Germany -- 16.5%
Federal Republic of Germany
8.375%, 05/21/01 2,000 $1,599
6.250%, 01/04/24 2,000 1,300
--------
2,899
--------
Italy -- 4.1%
Republic of Italy
8.500%, 04/01/99 1,200,000 726
--------
Japan -- 13.5%
Austrian Republic Bond
4.500%, 09/28/05 70,000 755
Export-Import Bank
2.875%, 07/28/05 40,000 379
Government of Japan
4.200%, 09/21/15 45,000 475
World Bank
4.500%, 06/20/00 70,000 754
--------
2,363
--------
Spain -- 9.0%
Kingdom of Spain
7.400%, 07/30/99 100,000 780
8.300%, 12/15/98 100,000 807
--------
1,587
--------
Sweden -- 4.4%
Kingdom of Sweden
10.750%, 01/23/97 5,000 773
--------
United Kingdom -- 10.8%
United Kingdom Treasury
6.750%, 11/26/04 750 1,115
7.000%, 11/06/01 500 777
--------
1,892
--------
Total Foreign Bonds
(Cost $13,959,000) 14,907
--------
Total Investments -- 84.9% of Net Assets
(Cost $13,959,000) $14,907
--------
</TABLE>
- --------
(1) In local currency.
The accompanying notes are an integral part of the financial statements.
37
<PAGE>
Schedule of Investments
Balanced Fund
A pie chart depicting the percent of total portfolio investments for the
following Investment classifications:
Balanced Fund
Fixed Income Securities 30%
Cash equivalents 1%
Domestic Common Stocks 51%
Foreign Common Stocks 18%
Market
Description Shares Value (000)
- -----------------------------------------------------------
Domestic Common Stock -- 47.0%
Basic Industry -- 4.6%
Avery Dennison 9,400 $471
E.I. DuPont de Nemours 3,200 224
Phelps Dodge 5,300 330
PPG Industries 9,700 444
USX-U.S. Steel Group 6,400 197
Weyerhaeuser 7,700 333
Witco Chemical 15,500 453
-----
2,452
-----
Capital Goods -- 3.6%
Boeing 2,400 188
Browning-Ferris Industries 4,600 136
General Electric 9,700 698
Keystone International 12,900 258
Minnesota Mining & Manufacturing 2,900 192
National Service Industries 14,800 479
-----
1,951
-----
Market
Description Shares Value (000)
- ------------------------------------------------------------
Consumer Durables -- 2.1%
Ford Motor 17,700 $513
WD-40 8,500 349
Whirlpool 4,700 250
-----
1,112
-----
Consumer Non-Durables -- 8.8%
Bristol-Myers Squibb 5,200 447
Clorox 6,300 451
Coca-Cola 7,100 527
Columbia/HCA Healthcare 4,000 203
Flowers Industries 24,500 297
H.J. Heinz 1,000 33
Johnson & Johnson 3,800 325
Kimberly-Clark 2,300 190
Merck 6,800 447
Pepsico 4,700 263
Philip Morris 5,900 534
Procter & Gamble 4,000 332
UST 13,000 434
VF 5,000 264
-----
4,747
-----
Consumer Services -- 5.0%
Deluxe 16,900 490
Dun & Bradstreet 6,800 440
Fleming Companies 17,700 365
Gannett 3,200 196
H & R Block 5,600 227
J.C. Penney 5,600 267
McDonald's 4,700 212
Wal-Mart Stores 14,300 320
Walt Disney 3,300 195
-----
2,712
-----
Energy -- 5.1%
Burlington Resources 5,100 200
Chevron 9,800 515
Consolidated Natural Gas 10,300 467
Exxon 7,100 569
Halliburton 3,800 192
Mobil 3,900 437
Nicor 13,800 380
-----
2,760
-----
38
<PAGE>
Rembrandt
DECEMBER 31, 1995
[REMBRANDT LOGO]
Schedule of Investments
Market
Description Shares Value (000)
- --------------------------------------------------------------
Financial -- 7.0%
American General 12,800 $ 446
Aon 9,200 459
Bankers Trust New York 6,700 445
Boatmen's Bancshares 6,500 266
First American Bank 5,700 253
Hartford Steam Boiler Inspection &
Insurance 8,900 445
KeyCorp 11,100 402
Mellon Bank 7,100 382
Merry Land & Investment 10,700 253
NationsBank 6,400 445
----------
3,796
----------
Technology -- 4.2%
AMP 5,300 203
Automatic Data Processing 2,700 200
Hewlett Packard 3,000 251
Intel 5,600 318
IBM 3,900 358
Modern Controls 10,200 111
Motorola 3,900 222
Raytheon 4,100 194
Texas Instruments 4,200 217
Xerox 1,400 192
----------
2,266
----------
Transportation -- 0.4%
Norfolk Southern 2,400 191
----------
Utilities -- 6.2%
A T & T 9,600 622
Ameritech 7,600 448
Bell Atlantic 3,800 254
Boston Edison 15,300 451
Central & South West 15,900 443
GTE 10,300 453
US West 5,100 182
Utilicorp United 16,400 482
----------
3,335
----------
Total Domestic Common Stock 25,322
----------
Foreign Common Stock -- 16.4%
Basic Industry -- 1.3%
Akzo N V 2,900 $ 168
Broken Hill ADR 3,000 170
Fletcher Challange Limited ADR 7,300 169
PT Tri Polyta Indonesia ADR* 7,800 107
Rhone-Poulenc S.A. ADR* 4,300 92
----------
706
----------
Capital Goods -- 1.9%
ASEA AB ADR 1,800 174
Empresas ICA S.A. ADR 4,900 50
Hanson PLC ADR 11,900 182
Kubota ADR 400 51
Madeco S.A. ADR 5,700 154
Maderas y Sinteticos S.A. ADR 7,500 146
Norsk Hydro A.S. ADR 4,200 176
Pacific Dunlop ADR* 11,800 114
----------
1,047
----------
Consumer Durables -- 1.0%
Daimler Benz ADR 4,300 219
Nissan Motor ADR* 11,100 169
Sony ADR 2,800 172
----------
560
----------
Consumer Non-Durables -- 3.9%
Bass PLC ADR 7,900 176
Buenos Aires Embotellado* 4,500 93
Cadbury Schweppes PLC ADR 5,300 176
Ciba-Geigy AG ADR* 3,900 172
Fuji Photo Film ADR 2,900 169
Hafslund Nycomed, Cl B ADR 5,000 131
Kirin Brewery ADR 1,500 179
Nestle SA ADR 4,000 221
Novo-Nordisk A/S ADR 5,100 174
Panamerican Beverage, Cl A 4,000 128
Roche Holdings Limited ADR* 2,700 214
Unilever NV 1,900 267
----------
2,100
----------
39
<PAGE>
Schedule of Investments
Market
Description Shares Value (000)
- -----------------------------------------------------------------
Consumer Services -- 1.5%
Coles Myer Limited ADR 4,000 $ 99
Grupo Televisa S.A. ADR 5,300 119
Ito Yokado ADR 900 222
Koninklijke Ahold NV ADR* 4,100 169
News Corporation ADR 8,400 180
--------
789
--------
Energy -- 1.8%
Elf Aquitaine ADR 4,900 180
Repsol 5,500 181
Royal Dutch Petroleum ADR 2,100 296
Schlumberger 2,400 166
YPF Sociedad Anonima ADR 7,800 169
--------
992
--------
Financial -- 1.2%
Aegon N.V. ADR* 3,800 167
Dresdner Bank 5,700 149
National Australia Bank 3,000 136
Tokio Marine & Fire Insurance 2,600 172
--------
624
--------
Technology -- 2.1%
Alcatel Alsthom ADR* 9,900 173
Canon ADR 1,900 174
Hitachi ADR 2,100 211
Kyocera ADR 1,100 164
L.M. Ericsson Telephone ADR 8,800 172
Marsushita Electric Industrial ADR 1,300 214
--------
1,108
--------
Transportation -- 0.4%
Canadian Pacific 10,000 181
--------
Utilities -- 1.3%
Cable & Wireless PLC ADR 8,100 171
Enersis SA ADR 3,000 86
Hong Kong Telecom ADR 8,100 144
Telefonica de Espana ADR 4,300 180
Telefonos de Mexico SA ADR 3,700 118
--------
699
--------
Total Foreign Common Stock 8,806
--------
Total Common Stock
(Cost $29,128,000) 34,128
--------
Face Market
Description Amount (000) Value (000)
- -----------------------------------------------------------------
U.S. Treasury Obligations -- 11.1%
U.S. Treasury Bonds
10.750%, 02/15/03 $ 250 $ 326
10.750%, 08/15/05 500 687
7.250%, 05/15/16 2,250 2,568
U.S. Treasury Notes
6.380%, 06/30/97 1,200 1,220
8.880%, 02/15/99 450 496
5.880%, 03/31/99 250 255
6.250%, 08/31/00 400 414
--------
Total U.S. Treasury Obligations
(Cost $5,777,000) 5,966
--------
Corporate Obligations -- 4.3%
ANZ Banking Group
6.250%, 02/01/04 165 165
Citicorp
8.630%, 12/01/02 260 296
CNA Financial
8.880%, 03/01/98 265 282
Ford Motor Credit
6.380%, 10/06/00 350 355
Italy Global Bond
6.000%, 09/27/03 200 198
Kansallis-Osake
10.000%, 05/01/02 220 263
Korea Electric Power Korella
7.750%, 04/01/13 200 213
Lehman Brothers Holding
5.750%, 02/15/98 300 299
Lincoln National
7.250%, 05/15/05 250 265
--------
Total Corporate Obligations
(Cost $2,301,000) 2,336
--------
U.S. Government Agency Obligations -- 7.6%
FHLB
6.530%, 09/02/97 500 510
7.260%, 09/06/01 295 317
FHLMC
6.780%, 08/18/05 850 905
7.610%, 09/01/04 200 206
40
<PAGE>
Schedule of Investments
<TABLE>
<CAPTION>
Market
Description Shares Value (000)
- ----------------------------------------------------------------------
U.S. Government Agency Obligations (continued)
<S> <C> <C>
FNMA
5.940%, 01/29/98 $ 500 $ 502
6.250%, 06/16/00 500 513
8.350%, 11/10/99 300 329
5.650%, 10/20/97 100 101
Private Export Funding
5.750%, 04/30/98 500 503
Private Export Funding
7.300%, 01/31/02 200 216
----------
Total U.S. Government Agency
Obligations
(Cost $3,955,000) 4,102
----------
Asset-Backed Securities -- 4.1%
American Express Master Trust
7.850%, 08/15/05 300 333
First Chicago Master Trust II
6.050%, 01/15/99 1,000 1,000
NationsBank Credit Card Master Trust
4.750%, 09/15/98 300 298
The Money Store Home Equity Trust
6.650%, 01/15/16 325 329
5.750%, 10/15/22 250 245
----------
Total Asset-Backed Securities
(Cost $2,173,000) 2,205
----------
U.S. Government Agency Mortgage-Backed
Obligations -- 0.4%
FNMA REMIC
9.050%, 12/25/18 47 50
GNMA
8.000%, 08/15/25 150 156
9.500%, 05/15/20 28 30
----------
Total U.S. Government Agency
Mortgage-Backed Obligations
(Cost $232,000) 236
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Description Shares Value (000)
- ----------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement -- 0.3%
Lehman Brothers
5.90%, dated 12/29/95, matures
01/02/96, repurchase price $138,000
(collateralized by FHLMC STRIP,
par value $490,000, 0.00%, 02/01/24,
market value: $141,000) $ 137 $137
----------
Total Repurchase Agreement
(Cost $137,000) 137
----------
Total Investments -- 91.2% of Net Assets
(Cost $43,703,000) $49,110
----------
</TABLE>
- -----------
* Non-income producing security.
ADR -- American Depository Receipt
Cl -- Class
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
PLC -- Public Limited Company
REMIC -- Real Estate Mortgage Investment Credit
STRIP -- Separate Trading of Registered Interest and Principal of Securities.
The accompanying notes are an integral part of the financial statements.
41
<PAGE>
Statement of Net Assets
Value Fund
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
Consumer Durables 4%
Consumer Non-Durables 18%
Consumer Services 10%
Energy 11%
Financial 15%
Technology 9%
Transportation 1%
Utilities 13%
Repurchase Agreements 2%
Basic Industry 9%
Capital Goods 8%
Market
Description Shares Value (000)
- -------------------------------------------------------
Common Stock -- 96.7%
Basic Industry -- 9.4%
Avery Dennison 46,700 $ 2,341
E.I. DuPont de Nemours 16,300 1,139
Phelps Dodge 26,100 1,625
PPG Industries 50,600 2,315
USX-U.S. Steel Group 31,500 968
Weyerhaeuser 38,400 1,661
Witco Chemical 81,600 2,387
-------
12,436
-------
Capital Goods -- 7.4%
Boeing 12,600 987
Browning-Ferris Industries 22,500 664
General Electric 48,200 3,470
Keystone International 70,200 1,404
Minnesota Mining & Manufacturing 15,300 1,014
National Service Industries 71,500 2,315
-------
9,854
-------
Market
Description Shares Value (000)
- -----------------------------------------------------
Consumer Durables -- 4.3%
Ford Motor 93,300 $2,706
WD-40 41,500 1,701
Whirlpool 23,900 1,273
------
5,680
------
Consumer Non-Durables -- 18.2%
Bristol-Myers Squibb 28,300 2,430
Clorox 31,600 2,263
Coca-Cola 36,100 2,680
Columbia/HCA Healthcare 19,600 995
Flowers Industries 127,600 1,547
H.J. Heinz 4,800 159
Johnson & Johnson 19,000 1,627
Kimberly-Clark 12,200 1,009
Merck 36,100 2,374
Pepsico 23,500 1,313
Philip Morris 29,200 2,643
Procter & Gamble 20,300 1,685
UST 64,500 2,153
VF 25,200 1,329
------
24,207
------
Consumer Services -- 10.3%
Deluxe 87,300 2,532
Dun & Bradstreet 35,500 2,298
Fleming 87,900 1,813
Gannett 16,400 1,006
H & R Block 28,000 1,134
J.C. Penney 27,800 1,324
McDonald's 22,400 1,011
Wal-Mart Stores 71,900 1,609
Walt Disney 16,200 956
------
13,683
------
Energy -- 10.5%
Burlington Resources 24,200 950
Chevron 47,500 2,494
Consolidated Natural Gas 50,900 2,310
Exxon 35,900 2,876
Halliburton 19,700 997
Mobil 20,800 2,330
Nicor 71,900 1,977
------
13,934
------
42
<PAGE>
DECEMBER 31, 1995
Statement of Net Assets [REMBRANDT LOGO]
Market
Description Shares Value (000)
- --------------------------------------------------------------------------
Financial -- 14.7%
American General 67,700 $ 2,361
Aon 45,600 2,274
Bankers Trust New York 33,200 2,208
Boatmen's Bancshares 32,300 1,320
First of America Bank 30,800 1,367
Hartford Steam Boiler Inspection &
Insurance 46,500 2,325
KeyCorp 54,900 1,990
Mellon Bank 37,000 1,989
Merry Land & Investment 55,500 1,311
NationsBank 32,800 2,284
--------
19,429
--------
Technology -- 8.4%
AMP 26,200 1,005
Automatic Data Processing 13,300 988
Hewlett Packard 15,000 1,256
IBM 18,700 1,716
Intel 26,500 1,504
Modern Controls 50,300 547
Motorola 19,500 1,111
Raytheon 21,300 1,006
Texas Instruments 20,600 1,066
Xerox 6,500 891
--------
11,090
--------
Transportation -- 0.7%
Norfolk Southern 12,000 953
--------
Utitilites -- 12.8%
A T & T 47,000 3,043
Ameritech 38,600 2,278
Bell Atlantic 19,400 1,297
Boston Edison 80,200 2,366
Central & South West 83,300 2,322
GTE 54,100 2,380
US West 25,000 894
Utilicorp United 83,600 2,456
--------
17,036
--------
Total Common Stock
(Cost $111,959,000) $128,302
--------
Face Market
Description Amount Value (000)
- ----------------------------------------------------------------------------
Repurchase Agreement -- 2.3%
Lehman Brothers
5.90%, dated 12/29/95, matures
01/02/96, repurchase price $3,100,000
(collateralized by U.S. Treasury Note,
par value $3,165,000, 5.125%, 11/30/98,
market value: $3,163,000) $ 3,098 $ 3,098
--------
Total Repurchase Agreement
(Cost $3,098,000) 3,098
--------
Total Investments -- 99.0%
(Cost $115,057,000) 131,400
--------
Other Assets and Liabilities -- 1.0%
Other Assets and Liabilities, Net 1,340
--------
Net Assets:
Portfolio shares of the Trust Class (unlimited
authorization -- no par value) based on
10,701,395 outstanding shares of beneficial
interest 113,900
Portfolio shares of the Investor Class (unlimited
authorization -- no par value) based on 121,902
outstanding shares of beneficial interest 1,297
Distribution in excess of net investment income (1)
Accumulated net realized gain on investments 1,201
Net unrealized appreciation on investments 16,343
--------
Total Net Assets -- 100.0% $132,740
========
Net Asset Value, Offering, and Redemption Price
Per Share -- Trust Class $12.26
========
Net Asset Value and Redemption Price
Per Share -- Investor Class $12.28
========
Maximum Offering Price Per Share -- Investor
Class ($12.28 + 95.5%) $12.86
========
The accompanying notes are an integral part of the financial statements.
43
<PAGE>
Statement of Net Assets
Growth Fund
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
Growth Fund
Repurchase Agreements 1%
Basic Industry 4%
Capital Goods 8%
Consumer Non-Durables 17%
Consumer Services 7%
Energy 11%
Financial 22%
Technology 19%
Transportation 2%
Utilities 9%
Market
Description Shares Value (000)
- ------------------------------------------------------
Common Stock -- 98.8%
Basic Industry -- 3.9%
Dow Chemical 20,900 $1,471
Mead 15,900 831
Rayonier 25,300 844
------
3,146
------
Capital Goods -- 7.9%
Agco 41,250 2,104
Boeing 28,400 2,226
York International 44,000 2,068
------
6,398
------
Consumer Non-Durables -- 17.0%
American Home Products 11,600 1,125
Amgen* 23,400 1,389
Avon Products 35,300 2,661
Bristol-Myers Squibb 18,700 1,606
Colgate-Palmolive 19,500 1,370
H.J. Heinz 54,000 1,789
Philip Morris 13,800 1,249
U.S. Healthcare 56,100 2,608
------
13,797
------
Market
Description Shares Value (000)
- ------------------------------------------------------
Consumer Services -- 7.4%
Borders Group* 98,300 $1,819
Carnival 79,800 1,945
CUC International* 47,100 1,607
Intimate Brands* 40,000 600
------
5,971
------
Energy -- 11.0%
Amoco 26,300 1,890
Atlantic Richfield 16,200 1,794
Enron Oil & Gas 34,900 838
Phillips Petroleum 65,700 2,242
Texaco 27,000 2,120
------
8,884
------
Financial -- 22.0%
Advanta, Cl B 33,300 1,211
American General 47,500 1,657
Household International 22,500 1,330
KeyCorp 43,100 1,562
Lincoln National 25,800 1,387
MBIA 23,100 1,732
MGIC Investment 18,300 993
PMI Group 40,000 1,810
PNC Bank 48,000 1,548
Redwood Trust 50,000 913
St. Paul 48,400 2,692
Thornburg Mortgage Asset 60,200 948
------
17,783
------
Technology -- 18.6%
Altera* 29,800 1,483
Cisco Systems* 18,600 1,388
FTP Software* 41,100 1,192
Hewlett Packard 17,800 1,491
KLA Instruments* 31,400 818
IBM 8,700 798
Information Resources* 101,700 1,258
Intel 32,600 1,850
LSI Logic* 36,200 1,186
Microsoft* 18,800 1,650
Parametric Technology* 18,800 1,250
Xilinx* 23,000 701
------
15,065
------
44
<PAGE>
DECEMBER 31, 1995
Statement of Net Assets [REMBRANDT LOGO]
Shares/Face
Description Amount (000) Value (000)
- ----------------------------------------------------------------
Transportation -- 2.0%
Illinois Central 41,500 $1,593
--------
Utilities -- 9.0%
Ameritech 42,800 2,525
PECO Energy 70,600 2,127
Western Resources 79,800 2,663
--------
7,315
--------
Total Common Stock
(Cost $69,992,000) 79,952
--------
Repurchase Agreement -- 1.1%
Lehman Brothers
5.90%, dated 12/29/95, matures
01/02/96, repurchase price $845,000
(collateralized by FHLMC STRIP,
par value $2,215,000, 0.00%, 11/01/22,
market value: $863,000) $ 844 844
--------
Total Repurchase Agreement
(Cost $844,000) 844
--------
Total Investments -- 99.9%
(Cost $70,836,000) 80,796
--------
Other Assets and Liabilities -- 0.1%
Other Assets and Liabilities, Net 101
--------
Description Value (000)
- -------------------------------------------------------------
Net Assets:
Portfolio shares of the Trust Class (unlimited
authorization -- no par value) based on
6,738,588 outstanding shares of beneficial
interest $67,282
Portfolio shares of the Investor Class (unlimited
authorization -- no par value) based on 230,641
outstanding shares of beneficial interest 2,439
Undistributed net investment income 1
Accumulated net realized gain on investments 1,215
Net unrealized appreciation on investments 9,960
--------
Total Net Assets -- 100.0% $80,897
========
Net Asset Value, Offering, and Redemption Price
Per Share -- Trust Class $ 11.61
========
Net Asset Value and Redemption Price
Per Share -- Investor Class $ 11.62
========
Maximum Offering Price Per Share -- Investor
Class ($11.62 + 95.5%) $ 12.17
========
- --------------------------------------------------------------
* Non-Income Producing Security
FHLMC -- Federal Home Loan Mortgage Corporation
STRIP -- Separate Trading of Registered Interest and Principal of Securities.
The accompanying notes are an integral part of the financial statements.
45
<PAGE>
Statement of Net Assets
International Equity Fund
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
International Equity Fund
Japan 31%
United Kingdom 13%
France 8%
Germany 7%
Netherlands 6%
Switzerland 5%
Hong Kong 4%
Sweden 3%
Singapore 3%
Other 20%
Market
Description Shares Value (000)
- ------------------------------------------------------
Foreign Common Stocks -- 95.8%
Argentina -- 0.5%
YPF ADR 20,000 $ 433
--------
Australia -- 2.0%
Broken Hill Proprietary 80,000 1,129
CRA 32,250 473
--------
1,602
--------
Austria -- 0.6%
Creditanstalt Bankverein "PS" 1,500 215
Vienna International Airport 4,500 299
--------
514
--------
Belgium -- 0.8%
Audiofina 5,500 298
Kredietbank 1,200 329
--------
627
--------
Brazil -- 1.1%
Aracruz Celulose ADR 35,000 271
Telebras ADR * 7,500 356
Usiminas ADR 35,000 280
--------
907
--------
Market
Description Shares Value (000)
- ------------------------------------------------------
Chile -- 1.0%
Endesa ADR 18,000 $ 409
Telecom Chile ADR 4,500 373
--------
782
--------
Denmark -- 1.2%
Sophus Berendsen, Cl B 5,000 563
Unidanmark, Cl A * 8,000 397
--------
960
--------
Finland -- 0.9%
Kymmene * 10,000 265
Nokia, Cl A * 12,000 472
--------
737
--------
France -- 7.7%
Alcatel Alsthom 5,798 501
Carrefour 1,000 607
Cie Generale des Eaux 8,169 817
Elf Aquitaine 16,108 1,189
Havas 4,673 371
L'Oreal 2,800 751
Rhone-Poulenc, Cl A 25,667 551
Saint-Gobain 5,114 567
Sanofi * 9,900 635
--------
5,989
--------
Germany -- 5.3%
Allianz 429 843
Bayer 3,000 797
Bayerische Motoren Werke 850 439
Beiersdorf 750 516
Deutsche Bank 20,000 951
Schering 10,000 665
--------
4,211
--------
Hong Kong -- 4.3%
China Light & Power 60,000 276
Hong Kong Telecommunications 200,000 357
HSBC Holdings 62,373 944
Hutchison Whampoa 110,000 670
Sun Hung Kai Properties 85,600 700
Swire Pacific, Cl A 58,000 450
--------
3,397
--------
46
<PAGE>
DECEMBER 31, 1995
Statement of Net Assets [REMBRANDT LOGO]
Market
Description Shares Value (000)
- ------------------------------------------------------
Indonesia -- 0.3%
Multi Bintang 16,000 $ 225
--------
Italy -- 2.6%
Assicurazioni Generali 25,000 606
Parmalat Finanziaria * 400,000 348
Rinascente 69,815 423
STET * 230,000 652
--------
2,029
--------
Japan -- 30.4%
Ajinomoto 65,000 724
Asahi Glass 40,000 446
Canon 50,000 906
East Japan Railway 140 681
Fanuc 12,500 541
Hitachi 90,000 907
Honda Motor 60,000 1,238
Ito Yokado 17,000 1,048
KAO 60,000 744
Kawasaki Steel 175,000 610
Kinki Nippon Tourist 32,000 226
Kirin Brewery 50,000 591
Kyocera 11,000 817
Matsushita Electric Industrial 50,000 814
Mitsubishi Bank 40,000 942
Mitsubishi Heavy Industries 150,000 1,196
New Oji Paper 70,000 633
Nippon Oil 70,000 440
Nippon Telegraph & Telephone 122 987
Nomura Securities 25,000 545
Secom 13,000 904
Sekisui House 70,000 895
Shiseido 45,000 536
Sony 22,000 1,319
Sumitomo Bank 41,000 870
Takeda Chemical Industries 45,000 741
Tokio Marine & Fire Insurance 90,000 1,177
Tokyo Broadcasting System 28,000 461
Tokyo Electric Power 13,100 350
Toray Industries 125,000 824
Toshiba 110,000 862
--------
23,975
--------
Market
Description Shares Value (000)
- ------------------------------------------------------
Malaysia -- 2.7%
Genting 40,000 $ 334
Malayan Banking 55,000 464
Sime Darby Malaysia 180,000 478
Telekom Malaysia 60,000 468
United Engineers -- F 65,000 415
--------
2,159
--------
Mexico -- 0.9%
Panamerican Beverage ADR 12,500 400
Telefonos de Mexico ADR 10,000 319
--------
719
--------
Netherlands -- 5.4%
Aegon 19,377 859
Ahold 14,420 590
Akzo 4,000 464
Heineken Holding, Cl A 4,125 677
Phillips Electronics 11,000 398
Unilever 5,000 704
Wolters Kluwer 6,566 622
--------
4,314
--------
Norway -- 0.7%
Saga Petroleum, Cl B 45,000 562
--------
Portugal -- 0.3%
Jeronimo Martins & Filho 3,800 211
--------
Singapore -- 2.9%
City Developments 65,000 473
Jardine Matheson 50,663 347
Keppel 55,000 490
Oversea-Chinese Banking -- F 40,500 507
Singapore International
Airlines -- F 50,000 467
--------
2,284
--------
Spain -- 2.0%
Banco Bilbao-Vizcaya 15,000 541
Centros Comerciales Pryca 20,000 420
Telefonica de Espana 47,000 651
--------
1,612
--------
47
<PAGE>
Statement of Net Assets
Market
Description Shares Value (000)
- ----------------------------------------------------------------------------
Sweden -- 2.9%
Asea, Cl B 9,000 $ 877
Astra, Cl A 22,000 879
Ericsson, Cl B 27,500 539
--------
2,295
--------
Switzerland -- 4.8%
Ciba-Geigy, Cl N 1,000 881
Holderbank, Cl I 615 472
Nestle, Cl N 700 775
Roche Holdings, Cl GS 90 713
Schweizerische Bankgesellschaft, Cl I 900 977
--------
3,818
--------
Thailand -- 2.1%
Advanced Info Service -- F 20,000 354
Bangkok Bank -- F 43,000 523
Land and House -- F 25,000 411
Siam Cement -- F 7,000 388
--------
1,676
--------
United Kingdom -- 12.4%
Barclays Bank 76,236 875
BAT Industries 90,833 801
British Airport Authority 60,553 456
BOC Group 41,336 578
Cable & Wireless 81,819 585
Cadbury Schweppes 66,748 552
General Electric 144,425 796
Marks & Spencer 91,080 637
Pearson 80,816 783
Prudential 135,816 875
Shell Transport & Trading 90,000 1,191
SmithKline Beecham, Cl A 80,929 892
Tate & Lyle 106,606 781
--------
9,802
--------
Total Foreign Common Stocks
(Cost $65,269,000) 75,840
--------
Foreign Preferred Stocks -- 2.5%
Australia -- 0.7%
Newscorp 120,000 561
--------
Market
Description Shares Value (000)
- ----------------------------------------------------------------------------
Germany -- 1.8%
Krones 800 $ 324
RWE 2,500 698
Suedzucker 1,000 404
--------
1,426
--------
Total Foreign Preferred Stocks
(Cost $1,960,000) 1,987
--------
Total Investments -- 98.3%
(Cost $67,229,000) 77,827
--------
Other Assets and Liabilities -- 1.7%
Other Assets and Liabilities, Net 1,378
--------
Net Assets:
Portfolio shares of the Trust Class (unlimited
authorization -- no par value) based on 5,325,237
outstanding shares of beneficial interest 66,821
Portfolio shares of the Investor Class (unlimited
authorization -- no par value) based on 116,130
outstanding shares of beneficial interest 1,493
Distributions in excess of net investment income (12)
Accumulated net realized gain on investments 304
Net unrealized appreciation on foreign currency and
translation of other assets and liabilities
denominated in foreign currency 1
Net unrealized appreciation on investments 10,598
--------
Total Net Assets -- 100.0% $79,205
========
Net Asset Value, Offering and Redemption Price
Per Share -- Trust Class $14.56
========
Net Asset Value and Redemption Price
Per Share -- Investor Class $14.52
========
Maximum Offering Price Per Share --
Investor Class ($14.52 / 95.5%) $15.20
========
- ----------------------------------
* Non-Income Producing Security
ADR -- American Depository Receipt
Cl -- Class
F -- Foreign Registry Shares
The accompanying notes are an integral part of the financial statements.
48
<PAGE>
DECEMBER 31, 1995
Statement of Net Assets [REMBRANDT LOGO]
Small Cap Fund
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
Small Cap Fund
Repurchase Agreements 5%
Basic Industry 3%
Capital Goods 10%
Consumer Durables 2%
Consumer Non-Durables 19%
Consumer Services 13%
Energy 6%
Financial 17%
Technology 23%
Transportation 1%
Utilities 1%
Market
Description Shares Value (000)
- -----------------------------------------------------
Common Stock -- 95.1%
Basic Industry -- 3.2%
Fastenal 9,700 $ 410
Shorewood Packaging* 25,400 362
--------
772
--------
Capital Goods -- 10.1%
Agco 7,900 403
Gentex* 16,300 359
Juno Lighting 21,900 350
Kaydon 8,900 270
NN Ball and Roller 19,200 336
OEA* 13,100 391
Wolverine Tube* 9,700 364
--------
2,473
--------
Consumer Durables -- 2.4%
Sunbeam Oster 21,900 334
WD-40 6,300 258
--------
592
--------
Market
Description Shares Value (000)
- -----------------------------------------------------
Consumer Non-Durables -- 19.1%
American Medical Response* 15,900 $517
Fresenius* 14,200 282
Mid Atlantic Medical Services* 17,500 424
Nautica Enterprises* 13,050 571
Respironics* 26,400 554
Rotech Medical* 13,800 380
Smithfield Foods* 16,400 521
Sofamor/Danek Group* 21,500 610
Sybron International* 12,600 299
Watson Pharmaceuticals* 10,400 510
--------
4,668
--------
Consumer Services -- 12.6%
Applebee's International 25,200 573
Catalina Marketing* 8,000 502
Express Scripts, Cl A* 7,600 388
Grand Casinos* 16,950 394
Men's Wearhouse* 13,200 340
National Education* 69,000 561
Stop & Shop* 14,100 326
--------
3,084
--------
Energy -- 5.8%
Devon Energy 17,000 433
KN Energy 10,500 306
Pride Petroleum Services* 34,900 371
Wicor 9,300 300
--------
1,410
--------
Financial -- 17.1%
Associated Bancorp 8,125 333
Bell Bancorp* 9,600 343
California Federal Bank, Cl A* 23,000 362
Felcor Suite Hotels 8,800 244
Gainsco 27,195 310
Manufactured Home Communities 20,700 362
Mark Twain Bancshares 7,900 306
Mutual Risk Management 11,500 526
National Re Holdings 16,100 612
Quick & Reilly Group 13,725 281
River Forest Bancorp 19,200 490
--------
4,169
--------
49
<PAGE>
Statement of Net Assets
Shares/Fees Market
Description Amount (000) Value (000)
- --------------------------------------------------------------
Technology -- 22.5%
Altera* 8,800 $ 438
Aspect Telecommunications* 10,400 348
FTP Software* 17,500 508
Hyperion Software* 17,600 374
KLA Instruments* 15,100 394
Lam Research* 5,300 242
Maxim Integrated Products* 17,400 670
Progress Software* 22,000 825
Sterling Software* 11,000 686
Tencor Instruments* 13,100 319
US Robotics* 4,400 386
Vicor* 15,200 304
--------
5,494
--------
Transportation -- 1.1%
Air Express International 11,100 255
--------
Utilities -- 1.2%
Southern California Water 13,900 281
--------
Total Common Stock
(Cost $19,757,000) 23,198
--------
Repurchase Agreement -- 5.4%
Prudential Securities
5.90%, dated 12/29/95, matures
01/02/96, repurchase price $1,324,000
(collateralized by U.S. Treasury Note,
par value $1,355,000, 5.125%,
11/30/98, market value: $1,354,000) $ 1,324 1,324
--------
Total Repurchase Agreements
(Cost $1,324,000) 1,324
--------
Market
Description Shares Value (000)
- ------------------------------------------------------------------------
Total Investments -- 100.5%
(Cost $21,081,000) $24,522
--------
Other Assets and Liabilities -- (0.5%)
Other Assets and Liabilities, Net (125)
--------
Net Assets:
Portfolio shares of the Trust Class (unlimited
authorization -- no par value) based on
1,914,355 outstanding shares of beneficial
interest 19,690
Portfolio shares of the Investor Class (unlimited
authorization -- no par value) based on 44,346
outstanding shares of beneficial interest 463
Undistributed net investment income 1
Accumulated net realized gain on investments 802
Net unrealized appreciation on investments 3,441
--------
Total Net Assets -- 100.0% $24,397
========
Net Asset Value, Offering, and Redemption Price
Per Share -- Trust Class $12.46
========
Net Asset Value and Redemption Price
Per Share -- Investor Class $12.46
========
Maximum Offering Price Per Share -- Investor
Class ($12.46 / 95.5%) $13.05
========
- -------------------------------
* Non-Income Producing Security
Cl -- Class
The accompanying notes are an integral part of the financial statements.
50
<PAGE>
DECEMBER 31, 1995
Schedule of Investments [REMBRANDT LOGO]
Asian Tigers Fund
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
Asian Tigers Fund
Hong Kong 37%
Indonesia 4%
Malaysia 17%
Phillippines 3%
Singapore 16%
South Korea 4%
Taiwan 3%
Thailand 16%
Market
Description Shares Value (000)
- -------------------------------------------------------------
Foreign Common Stocks -- 93.1%
Hong Kong -- 34.4%
Cheung Kong Holdings 105,000 $ 640
China Light & Power 82,000 378
Citic Pacific 122,000 417
Hang Seng Bank 48,000 430
Henderson Land Development* 40,000 241
Hong Kong & China Gas 153,600 247
Hong Kong Telecommunications 417,600 745
HSBC Holdings 92,000 1,392
Hutchison Whampoa 156,000 950
Hysan Development 121,000 320
Johnson Electric 109,000 195
National Mutual Asia* 350,000 317
New World Development 70,000 305
Shangri-La Asia 236,000 289
Sun Hung Kai Properties 82,000 671
Swire Pacific, Cl A 66,000 512
Television Broadcasts 18,000 64
Wheelock 52,000 89
--------
8,202
--------
Market
Description Shares Value (000)
- -------------------------------------------------------------
Indonesia -- 4.1%
Bank Internasional Indonesia -- F 62,000 $ 206
Hanjaya Mandala Sampoerna* 20,000 208
Indofood -- F 20,000 96
Indonesian Satellite ADR 2,400 88
Semen Gresik -- F* 55,000 154
Telekomunikasi -- F* 180,000 236
--------
988
--------
Malaysia -- 16.1%
DCB Holdings* 80,000 233
Genting 33,500 280
Land and General* 65,000 141
Malayan Banking 60,000 506
Malaysian International Shipping -- F 92,000 241
Public Bank -- F 109,000 209
Resorts World 70,000 375
Sime Darby Malaysia 197,600 525
Sime UEP Properties 145,000 228
Telekom Malaysia 64,000 499
Tenaga 76,000 299
United Engineers -- F 48,000 306
--------
3,842
--------
Philippines -- 2.4%
Filinvest Land* 600,000 192
Manila Electric* 28,000 229
Philippine Long Distance
Telephone ADR 3,000 162
--------
583
--------
Singapore -- 15.3%
City Developments 87,600 638
DBS Land 90,000 304
Development Bank of Singapore -- F 26,000 324
Fraser and Neave -- F 28,000 357
Hong Kong Land 77,000 142
Jardine Matheson 14,000 96
Keppel 42,000 374
Oversea-Chinese Banking -- F 63,000 789
Singapore International Airlines -- F 33,000 308
Singapore Press -- F 18,400 325
--------
3,657
--------
51
<PAGE>
Schedule of Investments
Market
Description Shares Value (000)
- ------------------------------------------------------------------
South Korea -- 3.3%
Korea Fund 35,483 $781
--------
Taiwan -- 2.4%
Taiwan Fund 27,500 564
--------
Thailand -- 15.1%
Advanced Info Service -- F 30,000 527
Bangkok Bank -- F 57,000 693
Dhana Siam Finance & Securities -- F 59,000 337
Industrial Finance of Thailand* 110,000 374
Italian-Thai Development* 30,000 307
Land and House -- F 22,000 362
PTT Exploration* 40,000 419
Siam Cement -- F* 12,000 188
Thai Farmers Bank -- F 39,000 393
--------
3,600
--------
Total Foreign Common Stocks
(Cost $20,236,000) 22,217
--------
Total Investments -- 93.1%, of Net Assets
(Cost $20,236,000) $ 22,217
========
- -------------------------------------
* Non-Income Producing Security
ADR -- American Depository Receipts
Cl -- Class
F -- Foreign Registry Shares
The accompanying notes are an integral part of the financial statements.
52
<PAGE>
DECEMBER 31, 1995
Notes
53
<PAGE>
Statement of Assets and Liabilities (000)
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Global Fixed Balanced Asian
Income Fund Fund Tigers Fund
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets:
Investments at market value (Cost $13,959, $43,703 and $20,236,
respectively) 14,907 $49,110 $22,217
Cash and foreign currency 3,765 -- 1,879
Receivable for investment securities sold -- 1,677 --
Receivable for capital shares sold 17 3,899 20
Other assets 452 339 80
------ ------ ------
Total assets 19,141 55,025 24,196
------ ------ ------
Liabilities:
Distribution payable 1,555 132 270
Payable for capital shares repurchased -- 1,015 --
Other liabilities 28 30 48
------ ------ ------
Total liabilities 1,583 1,177 318
------ ------ ------
Net assets:
Portfolio shares of the Trust Class (unlimited authorization -
no par value) based on 1,647,908, 4,642,722 and 2,214,706
outstanding shares of beneficial interest, respectively 16,640 43,855 21,404
Portfolio shares of the Investor Class (unlimited
authorization - no par value) based on 11,864, 367,470
and 70,215 outstanding shares of beneficial interest, respectively 126 3,705 681
Undistributed net investment income 218 -- --
Accumulated distributions in excess of net investment income -- -- (34)
Accumulated net realized gain (loss) on investments (392) 883 (154)
Accumulated net realized loss from foreign currency transactions (1) -- --
Net unrealized appreciation (depreciation) on foreign currency
and translation of other assets and liabilities denominated in
foreign currencies 19 (2) --
Net unrealized appreciation on investments 948 5,407 1,981
------ ------ ------
Net Assets $17,558 $53,848 $23,878
======= ======= =======
Net Asset Value, Offering and Redemption Price Per Share -- Trust Class $10.58 $10.75 $10.45
====== ======= ======
Net Asset Value and Redemption Price Per Share -- Investor Class $10.56 $10.75 $10.44
====== ======= ======
Maximum Offering Price Per Share -- Investor Class (1) $11.06 $11.26 $10.93
====== ======= ======
</TABLE>
(1) The offering price is calculated by dividing the Net Asset Value by 1 minus
the maximum sales charge of 4.50%.
The accompanying notes are an integral part of the financial statements.
54
<PAGE>
DECEMBER 31, 1995
[REMBRANDT LOGO]
Statement of Operations (000)
For the Year Ended December 31, 1995
Treasury Government Tax-Exempt
Money Market Money Market Money Market Money Market
Fund Fund Fund Fund
- --------------------------------------------------------------------------------
Investment Income:
Interest $6,611 $11,042 $27,757 $7,189
-------- -------- -------- --------
Expenses:
Administration fees 176 283 705 278
Less administration fees
waived -- -- (57) --
Investment advisory fees 413 377 1,646 653
Less investment advisory
fees waived (184) -- (648) (290)
Custodian fees 16 25 63 20
Transfer agent fees 34 38 63 32
Professional fees 20 31 69 26
Registration & filing fees 9 14 21 34
Printing 3 4 4 5
Trustee 2 3 7 3
Insurance 4 6 16 5
Pricing 1 2 6 1
Distribution fees (1) 17 8 3 10
Amortization of deferred
organization costs 3 3 3 3
Miscellaneous 18 1 3 1
-------- -------- -------- --------
Total Expenses 532 795 1,904 781
-------- -------- -------- --------
Net Investment Income 6,079 10,247 25,853 6,408
-------- -------- -------- --------
Net Realized Loss On
Investments:
Net realized loss from
security transaction -- -- -- (1)
Net Increase In Net
Assets From Operations $6,079 $10,247 $25,853 $6,407
======== ======== ======== ========
(1) All distribution fees are incurred at the Investor Class level.
The accompanying notes are an integral part of the financial statements.
55
<PAGE>
Statement of Operations (000)
For the Year Ended December 31, 1995
Intermediate
Government Tax-Exempt Global
Fixed Income Fixed Income Fixed Income Fixed Income
Fund Fund Fund Fund
- --------------------------------------------------------------------------------
Investment Income:
Interest $7,601 $5,092 $2,926 $1,214
------ ------ ------ ------
Expenses:
Administration fees 170 123 78 26
Less administration fees
waived (11) (10) -- --
Investment advisory fees 677 492 314 140
Less investment advisory
fees waived (100) (72) (65) --
Custodian fees 15 10 7 3
Transfer agent fees 33 32 30 27
Contribution by
administrator -- -- -- (10)
Professional fees 19 12 7 2
Registration & filing fees 13 (3) (1) 1
Printing 2 -- -- --
Trustee fee 2 1 1 --
Insurance 3 3 2 --
Pricing 2 -- 1 --
Distribution fees (1) 1 7 3 --
Amortization of deferred
organization costs 3 3 3 3
Miscellaneous 12 11 16 --
----- ----- ----- -----
Total Expenses 841 609 396 192
----- ----- ----- -----
Net Investment Income 6,760 4,483 2,530 1,022
----- ----- ----- -----
Net Realized and
Unrealized Gain On
Investments:
Net realized gain from
security transactions 1,117 345 318 269
Net realized gain from
foreign currency
transactions -- -- -- 751
Net change in unrealized
appreciation on
investments 10,277 5,923 4,825 1,202
Net change in unrealized
appreciation on foreign
currency and translation
of other assets and
liabilities in foreign
currencies -- -- -- 18
----- ----- ----- -----
Net Increase In Net
Assets From Operations $18,154 $10,751 $7,673 $3,262
======= ======= ====== ======
(1) All distribution fees are incurred at the Investor Class level.
The accompanying notes are an integral part of the financial statements.
56
<PAGE>
DECEMBER 31, 1995
Statement of Operations (000) [REMBRANDT LOGO]
<TABLE>
<CAPTION>
For the Year Ended December 31, 1995
International Asian
Balanced Value Growth Equity Small Cap Tigers
Fund Fund Fund Fund Fund Fund
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ 1,341 $ 3,617 $ 1,863 $1,210 $ 182 $ 571
Interest 1,681 446 184 241 81 80
Less foreign taxes withheld -- -- -- (107) -- (37)
-------- ------ ------ ----- ------- ------
Total investment income 3,022 4,063 2,047 1,344 263 614
-------- ------ ------ ----- ------- ------
Expenses:
Administration fees 97 148 128 97 31 32
Investment advisory fees 454 789 686 643 164 212
Less investment advisory fees waived -- -- -- -- (1) --
Custodian fees 7 13 11 84 3 56
Transfer agent fees 26 31 32 27 26 27
Contribution by administrator -- -- -- (2) -- (16)
Professional fees 10 18 12 16 2 3
Registration & filing fees (11) 19 (3) 14 (4) 2
Printing -- 5 1 4 -- 1
Trustee 1 1 1 1 -- --
Insurance 2 2 3 2 1 1
Pricing -- 2 1 4 -- 2
Distribution fees (1) 10 3 6 4 1 2
Amortization of deferred organization costs 3 3 3 3 3 3
Miscellaneous 1 1 -- -- -- --
-------- ------ ------ ----- ------- ------
Total Expenses 600 1,035 881 897 226 325
-------- ------ ------ ----- ------- ------
Net Investment Income 2,422 3,028 1,166 447 37 289
-------- ------ ------ ----- ------- ------
Net Realized and Unrealized Gain (Loss)
On Investments:
Net realized gain (loss) from security
transactions 3,350 3,456 8,079 1,107 2,502 (139)
Net realized loss from foreign currency
transactions (8) -- -- (116) -- (22)
Net change in unrealized appreciation on
investments 7,293 20,121 14,198 7,172 2,930 2,685
Net change in unrealized appreciation (depreciation)
on foreign currency and translation of other
assets and liabilities in foreign currencies (2) -- -- -- -- 1
-------- ------ ------ ----- ------- ------
Net Increase In Net Assets From
Operations $13,055 $26,605 $23,443 $8,610 $5,469 $2,814
======== ======= ======= ====== ======= ======
</TABLE>
(1) All distribution fees are incurred at the Investor Class level.
The accompanying notes are an integral part of the financial statements.
57
<PAGE>
Statement of Changes in Net Assets (000)
<TABLE>
<CAPTION>
Treasury
Money Market
Fund
- ---------------------------------------------------------------
1995 1994
- ---------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income $ 6,079 $ 4,009
Net realized loss from
security transactions -- --
---------- ----------
Net increase in net assets
resulting from operations 6,079 4,009
---------- ----------
Dividends distributed from:
Net investment income:
Trust Class (5,746) (3,936)
Investor Class (333) (73)
---------- ----------
Total dividends distributed (6,079) (4,009)
---------- ----------
Capital share transactions:
Trust Class:
Proceeds from shares issued 484,129 274,543
Shares issued in lieu of
cash distributions 5 3
Cost of shares
repurchased (485,213) (271,487)
---------- ----------
Increase (decrease) in net
assets derived from Trust
Class transactions (1,079) 3,059
---------- ----------
Investor Class:
Proceeds from shares issued 33,385 11,461
Shares issued in lieu of
cash distributions 315 60
Cost of shares
repurchased (29,000) (9,637)
---------- ----------
Increase in net
assets derived from Investor
Class transactions 4,700 1,884
---------- ----------
Increase (decrease) in net
assets derived capital
share transactions 3,621 4,943
---------- ----------
Contribution of capital from
affiliate -- --
---------- ----------
Net increase (decrease) in
net assets 3,621 4,943
---------- ----------
Net Assets:
Beginning of year 114,785 109,842
---------- ----------
End of year $ 118,406 $ 114,785
========== ==========
Capital share transactions:
Trust Class:
Shares issued 484,129 274,543
Shares issued in lieu of
cash distributions 5 3
Shares repurchased (485,213) (271,487)
Total Trust Class
transactions (1,079) 3,059
---------- ----------
Investor Class:
Shares issued 33,385 11,461
Shares issued in lieu of
cash distributions 315 60
Shares repurchased (29,000) (9,637)
---------- ----------
Total Investor Class
transactions 4,700 1,884
---------- ----------
Increase (decrease) in
capital shares 3,621 4,943
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
#
58
<PAGE>
REMBRANDT
DECEMBER 31, 1995
[REMBRANDT LOGO]
GOVERNMENT TAX-EXEMPT
MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND
- --------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994
- --------------------------------------------------------------------------------
$ 10,247 $ 6,426 $ 25,853 $ 17,498 $ 6,408 $ 3,447
-- (702) -- (1,399) (1) --
---------- --------- -------- -------- ---------- --------
10,247 5,724 25,853 16,099 6,407 3,447
---------- --------- -------- -------- ---------- --------
(10,086) (6,340) (25,787) (17,487) (6,283) (3,391)
(161) (86) (66) (11) (125) (56)
---------- --------- -------- -------- ---------- --------
(10,247) (6,426) (25,853) (17,498) (6,408) (3,447)
---------- --------- -------- -------- ---------- --------
404,051 378,541 1,234,299 1,364,586 408,851 377,990
-- -- -- 1 -- --
(353,576) (380,800) (1,219,198)(1,271,110) (401,949) (332,946)
---------- --------- -------- -------- ---------- --------
50,475 (2,259) 15,101 93,477 6,902 45,044
---------- --------- -------- -------- ---------- --------
11,055 12,329 6,603 2,321 16,513 13,112
157 81 62 9 124 48
(10,949) (11,485) (5,912) (1,844) (17,597) (10,350)
---------- --------- -------- -------- ---------- --------
263 925 753 486 (960) 2,810
---------- --------- -------- -------- ---------- --------
50,738 (1,334) 15,854 93,963 5,942 47,854
---------- --------- -------- -------- ---------- --------
-- 700 -- 1,400 -- --
---------- --------- -------- -------- ---------- --------
50,738 (1,336) 15,854 93,964 5,941 47,854
---------- --------- -------- -------- ---------- --------
159,879 161,215 461,192 367,228 165,248 117,394
---------- --------- -------- -------- ---------- --------
$ 210,617 $ 159,879 $ 477,046 $461,192 $ 171,189 $ 165,248
========== ========= ======== ======== ========== =========
404,051 378,541 1,234,299 1,364,586 408,851 377,990
-- -- -- 1 -- --
(353,576) (380,800) (1,219,198)(1,271,110) (401,949) (332,946)
50,475 (2,259) 15,101 93,477 6,902 45,044
---------- --------- -------- -------- ---------- --------
11,055 12,329 6,603 2,321 16,513 13,112
157 81 62 9 124 48
(10,949) (11,485) (5,912) (1,844) (17,597) (10,350)
---------- --------- -------- -------- ---------- --------
263 925 753 486 (960) 2,810
---------- --------- -------- -------- ---------- --------
50,738 (1,334) 15,854 93,963 5,942 47,854
========== ========= ======== ======== ========== =========
59
<PAGE>
Statement of Changes in Net Assets (000)
<TABLE>
<CAPTION>
Fixed Intermediate Tax-Exempt Global
Income Government Fixed Fixed Income Fixed Income
Fund Income Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income $ 6,760 $ 5,880 $ 4,483 $ 4,891 $ 2,530 $ 2,820 $ 1,022 $ 824
Net realized gain (loss)
from security and foreign
currency
transactions 1,117 (5,590) 345 (2,678) 318 (2,840) 1,020 (670)
Net change in unrealized
appreciation (depreciation)
on investments and foreign
currency transactions 10,277 (4,970) 5,923 (5,192) 4,825 (3,429) 1,220 (435)
-------- -------- -------- -------- ------- -------- ------- -------
Net increase (decrease) in
net assets resulting from
operations 18,154 (4,680) 10,751 (2,979) 7,673 (3,449) 3,262 (281)
--------- -------- ------- ------- ------- ------- ------ ------
Dividends distributed from:
Net investment income:
Trust Class (6,740) (5,867) (4,360) (4,870) (2,491) (2,772) (1,582) (868)
Investor Class (29) (24) (151) (11) (54) (38) (10) (5)
Net realized gains:
Trust Class -- -- -- -- -- (196) -- (279)
Investor Class -- -- -- -- -- (3) -- (1)
--------- -------- ------- ------- ------- ------- ------ ------
Total dividends distributed (6,769) (5,891) (4,511) (4,881) (2,545) (3,009) (1,592) (1,153)
--------- -------- ------- ------- ------- ------- ------ ------
Capital share transactions:
Trust Class:
Proceeds from shares issued 41,779 20,696 8,766 16,057 3,761 5,355 4,868 3,752
Shares issued in lieu of cash
distributions -- 2 -- -- -- -- -- --
Cost of shares repurchased (19,953) (48,770) (32,350) (22,029) (12,289) (12,555) (4,120) (3,791)
--------- -------- ------- ------- ------- ------- ------ ------
Increase (decrease) in net
assets derived from Trust
Class transactions 21,826 (28,072) (23,584) (5,972) (8,528) (7,200) 748 (39)
--------- -------- ------- ------- ------- ------- ------ ------
Investor Class:
Proceeds from shares issued 232 451 2,015 1,147 203 912 54 71
Shares issued in lieu of cash
distributions 25 19 140 11 48 33 10 6
Cost of shares
repurchased (103) (71) (534) (63) (288) (230) (32) (1)
--------- -------- ------- ------- ------- ------- ------ ------
Increase (decrease) in net
assets derived from
Investor Class transactions 154 399 1,621 1,095 (37) 715 32 76
Increase (decrease) in net --------- -------- ------- ------- ------- ------- ------ ------
assets derived from
capital share transactions 21,980 (27,673) (21,963) (4,877) (8,565) (6,485) 780 37
--------- -------- ------- ------- ------- ------- ------ ------
Net increase (decrease) in
net assets 33,365 (38,244) (15,723) (12,737) (3,437) (12,943) 2,450 (1,397)
--------- -------- ------- ------- ------- ------- ------ ------
Net assets:
Beginning of period 92,844 131,088 92,135 104,872 54,647 67,590 15,108 16,505
--------- -------- ------- ------- ------- ------- ------ ------
End of period $126,209 $ 92,844 $ 76,412 $ 92,135 $ 51,210 $ 54,647 $ 17,558 $ 15,108
--------- -------- ------- ------- ------- ------- ------ ------
--------- -------- ------- ------- ------- ------- ------ ------
Capital share transactions:
Trust Class:
Shares issued 4,247 2,108 897 1,638 383 538 453 371
-- -- -- -- -- -- -- --
Shares issued in lieu of
cash distributions -- -- -- -- -- -- -- --
Shares repurchased (2,014) (4,983) (3,346) (2,286) (1,262) (1,315) (379) (378)
Total Trust Class
transactions 2,233 (2,875) (2,449) (648) (879) (777) 74 (7)
Investor Class:
Shares
issued 23 45 211 122 21 93 5 6
Shares issued in lieu of cash
distributions 2 2 14 2 5 3 1 1
Shares repurchased (10) (8) (53) (7) (29) (23) (3) --
--------- -------- ------- ------- ------- ------- ------ ------
Total Investor Class
transactions 15 39 172 117 (3) 73 3 7
--------- -------- ------- ------- ------- ------- ------ ------
Increase (decrease) in
capital shares 2,248 (2,836) (2,277) (531) (882) (704) 77 --
--------- -------- ------- ------- ------- ------- ------ ------
</TABLE>
*Commenced operations on January 3, 1994.
The accompanying notes are an integral part of the financial statements.
60
<PAGE>
DECEMBER 31, 1995
LOGO
<TABLE>
<CAPTION>
INTERNATIONAL SMALL ASIAN
BALANCED VALUE GROWTH EQUITY CAP TIGERS
FUND FUND FUND FUND FUND FUND*
- -----------------------------------------------------------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994 1995 1994 1995 1994 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 2,422 $ 1,908 $ 3,028 $ 1,932 $ 1,166 $ 1,484 $ 447 $ 73 $ 37 $ 114 $ 289 $ 67
3,342 181 3,456 1,592 8,079 296 991 251 2,502 (1,238) (161) (62)
7,291 (3,604) 20,121 (3,886) 14,198 (4,297) 7,172 584 2,930 (2,044) 2,686 (705)
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
13,055 (1,515) 26,605 (362) 23,443 (2,517) 8,610 908 5,469 (3,168) 2,814 (700)
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
(2,309) (1,801) (3,032) (1,880) (1,162) (1,444) (292) -- (37) (111) (263) (32)
(122) (69) (31) (20) (25) (16) (2) -- -- -- (6) --
(1,941) (40) (2,748) (1,062) (6,782) (988) (1,076) (23) (303) -- -- (19)
(153) (2) (31) (12) (213) (18) (23) (1) (7) -- -- (1)
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
(4,525) (1,912) (5,842) (2,974) (8,182) (2,466) (1,393) (24) (347) (111) (269) (52)
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
24,298 61,650 63,103 25,664 18,301 28,674 46,191 24,699 9,098 10,505 10,886 23,298
-- 1 -- 1 -- -- -- -- -- -- -- --
(54,617) (44,784) (13,942) (15,147) (37,739) (39,640) (17,048) (7,710) (21,804) (29,074) (8,070) (4,710)
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
(30,319) 16,867 49,161 10,518 (19,438) (10,966) 29,143 16,989 (12,706) (18,569) 2,816 18,588
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
1,133 2,223 642 526 844 926 586 943 174 194 172 743
270 71 62 31 237 32 22 1 6 -- 6 1
(746) (529) (176) (226) (247) (190) (266) (92) (20) (6) (226) (15)
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
657 1,765 528 331 834 768 342 852 160 188 (48) 729
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
(29,662) 18,632 49,689 10,849 (18,604) (10,198) 29,485 17,841 (12,546) (18,381) 2,768 19,317
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
(21,132) 15,205 70,452 7,513 (3,343) (15,181) 36,702 18,725 (7,424) (21,660) 5,313 18,565
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
74,980 59,775 62,288 54,775 84,240 99,421 42,503 23,778 31,821 53,481 18,565 --
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
$ 53,848 $ 74,980 $132,740 $ 62,288 $ 80,897 $ 84,240 $ 79,205 $42,503 $ 24,397 $31,821 $23,878 $ 18,565
======== ======== ======== ======== ======== ======== ======== ======= ======== ======= ======= ========
2,401 6,296 5,673 2,505 1,618 2,785 3,382 1,898 812 1,062 1,131 2,359
-- -- -- -- -- -- -- -- -- -- -- --
(5,320) (4,564) (1,257) (1,496) (3,383) (3,935) (1,235) (583) (2,192) (2,981) (801) (474)
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
(2,919) 1,732 4,416 1,009 (1,765) (1,150) 2,147 1,315 (1,380) (1,919) 330 1,885
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
111 224 57 51 75 91 43 72 15 20 18 76
26 7 5 3 21 3 2 -- 1 -- 1 --
(73) (54) (15) (22) (22) (19) (20) (7) (2) (1) (23) (1)
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
64 177 47 32 74 75 25 65 14 19 (4) 75
- -------- -------- -------- -------- -------- -------- -------- ------- -------- ------- ------- --------
(2,855) 1,909 4,463 1,041 (1,691) (1,075) 2,172 1,380 (1,366) (1,900) 326 1,960
======== ======== ======== ======== ======== ======== ======== ======= ======== ======= ======= ========
</TABLE>
61
<PAGE>
Financial Highlights
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET ASSET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED FROM NET FROM
BEGINNING INVESTMENT GAINS INVESTMENT CAPITAL
OF PERIOD INCOME ON SECURITIES INCOME GAINS
- ------------------------------------------------------------------------------------------------
TREASURY MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TRUST CLASS
1995 $1.00 $0.05 $0.00 $(0.05) $0.00
1994 1.00 0.04 0.00 (0.04) 0.00
1993(1) 1.00 0.03 0.00 (0.03) 0.00
INVESTOR CLASS
1995 $1.00 $0.05 $0.00 $(0.05) $0.00
1994 1.00 0.03 0.00 (0.03) 0.00
1993(2) 1.00 0.02 0.00 (0.02) 0.00
- ------------------------------------------------------------------------------------------------
GOVEMMENT MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------
TRUST CLASS
1995 $1.00 $0.05 $0.00 $(0.05) $0.00
1994 1.00 0.04 0.00 (0.04) 0.00
1993(1) 1.00 0.03 0.00 (0.03) 0.00
INVESTOR CLASS
1995 $1.00 $0.05 $0.00 $(0.05) $0.00
1994 1.00 0.04 0.00 (0.04) 0.00
1993(3) 1.00 0.02 0.00 (0.02) 0.00
- ------------------------------------------------------------------------------------------------
MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------
TRUST CLASS
1995 $1.00 $0.06 $0.00 $(0.06) $0.00
1994 1.00 0.04 0.00 (0.04) 0.00
1993(1) 1.00 0.03 0.00 (0.03) 0.00
INVESTOR CLASS
1995 $1.00 $0.05 $0.00 $(0.05) $0.00
1994 1.00 0.04 0.00 (0.04) 0.00
1993(4) 1.00 0.02 0.00 (0.02) 0.00
- ------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
62
<PAGE>
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Ratio of Net
Investment
Ratio of Net Ratio of Expenses Income (Loss)
Ratio of Investment to Average to Average
Net Asset Net Assets Expenses Income Net Assets Net Assets Portfolio
Value End Total End of to Average to Average (Excluding (Excluding Turnover
of Period Return Period (000) Net Assets Net Assets Waivers) Waivers) Rate
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$1.00 5.28% $110,475 0.44% 5.16% 0.59% 5.01% N/A
1.00 3.58 111,545 0.45 3.50 0.61 3.34 N/A
1.00 2.56 108,495 0.47 2.53 0.62 2.38 N/A
$1.00 5.02% $ 7,931 0.69% 4.89% 0.84% 4.74% N/A
1.00 3.32 3,231 0.70 3.52 0.86 3.36 N/A
1.00 2.29 1,347 0.75 2.28 5.23** (2.20)** N/A
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
$1.00 5.59% $207,615 0.42% 5.45% 0.42% 5.45% N/A
1.00 3.89 157,140 0.42 3.81 0.42 3.81 N/A
1.00 3.00 159,401 0.45 2.92 0.45 2.92 N/A
$1.00 5.33% $ 3,002 0.67% 5.18% 0.67% 5.18% N/A
1.00 3.63 2,739 0.67 3.62 0.67 3.62 N/A
1.00 2.78 1,814 0.72 2.69 2.37** 1.04** N/A
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
$1.00 5.64% $475,688 0.41% 5.50% 0.56% 5.35% N/A
1.00 3.97 460,583 0.41 3.93 0.56 3.78 N/A
1.00 3.01 367,110 0.46 2.92 0.61 2.77 N/A
$1.00 5.38% $ 1,358 0.66% 5.22% 0.81% 5.07% N/A
1.00 3.71 605 0.66 4.13 0.81 3.98 N/A
1.00 2.76 118 0.72 2.69 10.48% (7.09) N/A
</TABLE>
The accompanying notes are an integral part of the financial statements.
63
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
For a Share Outstanding Throughout the Period
Net Asset Realized Dividends Distributions
Value Net and Unrealized from Net from
Beginning Investment Gains (Losses) Investment Capital
of Period Income on Securities Income Gains
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Tax-Exempt Money Market Fund
Trust Class
1995 $ 1.00 $0.03 $ 0.00 $(0.03) $ 0.00
1994 1.00 0.02 0.00 (0.02) 0.00
1993(1) 1.00 0.02 0.00 (0.02) 0.00
Investor Class
1995 $ 1.00 $0.03 $ 0.00 $(0.03) $ 0.00
1994 1.00 0.02 0.00 (0.02) 0.00
1993(5) 1.00 0.01 0.00 (0.01) 0.00
Fixed Income Fund
Trust Class
1995 $ 9.30 $0.59 $ 1.02 $(0.59) $ 0.00
1994 10.23 0.54 (0.93) (0.54) 0.00
1993(1) 10.00 0.47 0.50 (0.47) (0.27)
Investor Class
1995 $ 9.32 $0.55 $ 1.04 $(0.56) $ 0.00
1994 10.24 0.50 (0.90) (0.52) 0.00
1993(6) 10.30 0.35 0.23 (0.37) (0.27)
Intermediate Government
Fixed Income Fund
Trust Class
1995 $ 9.33 $0.54 $ 0.73 $(0.54) $ 0.00
1994 10.08 0.47 (0.75) (0.47) 0.00
1993(1) 10.00 0.41 0.18 (0.41) (0.10)
Investor Class
1995 $ 9.32 $0.49 $ 0.76 $(0.52) $ 0.00
1994 10.07 0.43 (0.73) (0.45) 0.00
1993(7) 10.21 0.28 (0.02) (0.30) (0.10)
</TABLE>
The accompanying notes are an integral part of the financial statements.
64
<PAGE>
DECEMBER 31, 1995
[LOGO]
<TABLE>
<CAPTION>
RATIO OF NET
INVESTMENT
RATIO OF NET RATIO OF EXPENSES INCOME (LOSS)
RATIO OF INVESTMENT TO AVERAGE TO AVERAGE
NET ASSET NET ASSETS EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO
VALUE END TOTAL END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
OF PERIOD RETURN PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$1.00 3.49% $167,945 0.41% 3.44% 0.56% 3.29% N/A
1.00 2.50 161,054 0.43 2.52 0.59 2.36 N/A
1.00 1.98 116,000 0.45 1.97 0.60 1.82 N/A
$1.00 3.24% $ 3,244 0.66% 3.19% 0.81% 3.04% N/A
1.00 2.24 4,204 0.68 2.31 0.84 2.15 N/A
1.00 1.65 1,394 0.74 1.81 4.88** (2.33)** N/A
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
$10.32 17.75% $125,563 0.74% 5.97% 0.84% 5.87% 59%
9.30 (3.82) 92,402 0.72 5.45 0.82 5.35 126%
10.23 9.92 131,002 0.77 4.60 0.87 4.50 163
$10.35 17.40%* $ 646 0.99% 5.72% 1.09% 5.62% 59%
9.32 (3.97)* 442 0.98 5.38 1.08 5.28 126
10.24 7.44* 86 1.06 4.08 42.44** (37.30)** 163
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
$10.06 13.86% $ 73,466 0.73% 5.48% 0.83% 5.38% 115%
9.33 (2.78) 91,002 0.74 4.88 0.84 4.78 124
10.08 6.04 104,826 0.76 4.15 0.86 4.05 81
$10.05 13.59%* $ 2,946 0.98% 5.18% 1.08% 5.08% 115%
9.32 (3.03)* 1,133 1.02 5.05 1.12 4.95 124
10.07 3.42* 46 1.04 3.85 77.08** (72.19)** 81
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
65
<PAGE>
DECEMBER 31, 1995
[LOGO]
Financial Highlights
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET ASSET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED FROM NET FROM
BEGINNING INVESTMENT GAINS (LOSSES) INVESTMENT CAPITAL
OF PERIOD INCOME ON SECURITIES INCOME GAINS
- -------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT FIXED INCOME FUND
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TRUST CLASS
1995 $ 9.26 $0.48 $ 0.94 $(O.48) $ 0.00
1994 10.23 0.44 (0.94) (0.44) (0.03)
1993(1) 10.00 0.42 0.42 (0.42) (0.19)
INVESTOR CLASS
1995 $ 9.24 $0.43 $ 0.97 $(O.46) $ 0.00
1994 10.22 0.40 (0.93) (0.42) (0.03)
1993(8) 10.29 0.32 0.14 (0.34) (0.19)
- -------------------------------------------------------------------------------------------------------------------------
GLOBAL FIXED INCOME FUND
- -------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1995 $ 9.54 $0.62 $ 1.38 $(O.96) $ 0.00
1994 10.43 0.56 (0.72) (0.55) (0.18)
1993(9) 10.00 0.54 0.94 (0.64) (0.41)
INVESTOR CLASS
1995 $ 9.53 $0.52 $ 1.45 $(O.94) $ 0.00
1994 10.42 0.46 (0.64) (0.53) (0.18)
1993(10) 10.88 0.40 0.12 (0.57) (0.41)
- -------------------------------------------------------------------------------------------------------------------------
BALANCED FUND
- -------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1995 $ 9.53 $0.39 $ 1.65 $(O.39) $(0.43)
1994 10.04 0.30 (0.50) (0.30) (0.01)
1993(1) 10.00 0.29 0.39 (0.29) (0.35)
INVESTOR CLASS
1995 $ 9.53 $0.34 $ 1.67 $(O.36) $(0.43)
1994 10.03 0.27 (0.49) (O.27) (0.01)
1993(11) 10.28 0.20 0.12 (0.22) (0.35)
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
66
<PAGE>
DECEMBER 31, 1995
[LOGO]
<TABLE>
<CAPTION>
RATIO OF NET
INVESTMENT
RATIO OF NET RATIO OF EXPENSES INCOME (LOSS)
RATIO OF INVESTMENT TO AVERAGE TO AVERAGE
NET ASSET NET ASSETS EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO
VALUE END TOTAL END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
OF PERIOD RETURN PERIOD (000) NET ASSETS NET ASSETS WAIVERS) (WAIVERS) RATE
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$10.20 15.67% $ 50,079 0.75% 4.84% 0.87% 4.72% 129%
9.26 (4.93) 53,588 0.71 4.54 0.84 4.41 146
10.23 8.64 67,162 0.75 4.17 0.85 4.07 149
$10.18 15.43%* $ 1,131 1.00% 4.59% 1.12% 4.47% 129%
9.24 (5.27)* 1,059 0.97 4.35 1.10 4.22 146
10.22 5.73* 428 1.05 3.88 11.86** (6.93)** 149
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
$10.58 20.99% $17,433 1.10% 5.86% 1.16% 5.80% 105%
9.54 (1.47) 15,021 1.16 5.09 1.22 5.03 138
10.43 16.33 16,488 1.21 5.95 1.21 5.95 146
$10.56 20.68%* $ 125 1.35% 5.57% 1.41% 5.51% 105%
9.53 (1.71)* 87 1.41 5.03 7.54 (1.10) 138
10.42 6.61 * 17 1.56 5.85 319.45** (312.04)** 146
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
$10.75 21.85% $49,899 0.92% 3.74% 0.92% 3.74% 85%
9.53 (2.11) 72,086 0.94 3.11 0.94 3.11 85
10.04 7.09 58,510 0.97 2.88 0.97 2.88 126
$10.75 21.52%* $ 3,949 1.22% 3.36% 1.22% 3.36% 85%
9.53 (2.29)* 2,894 1.24 2.86 1.34 2.76 85
10.03 4.07* 1,265 1.30 2.30 5.06** (1.46)** 126
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
67
<PAGE>
Financial Highlights
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET ASSET NET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE INVESTMENT AND UNREALIZED FROM NET FROM
BEGINNING INCOME GAINS (LOSSES) INVESTMENT CAPITAL
OF PERIOD (LOSS) ON SECURITIES INCOME GAINS
- -------------------------------------------------------------------------------------------------
VALUE FUND
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TRUST CLASS
1995 $ 9.79 $ 0.34 $ 2.74 $(0.35) $(0.26)
1994 10.30 0.35 (0.35) (0.34) (0.17)
1993(1) 10.00 0.28 0.38 (0.28) (0.08)
INVESTOR CLASS
1995 $ 9.80 $ 0.32 $ 2.74 $(0.32) $(0.26)
1994 10.30 0.31 (0.33) (0.31) (0.17)
1993(12) 10.41 0.21 (0.03) (0.21) (0.08)
- -------------------------------------------------------------------------------------------------
GROWTH FUND
- -------------------------------------------------------------------------------------------------
TRUST CLASS
1995 $ 9.73 $ 0.16 $ 2.88 $(O.16) $(1.00)
1994 10.21 0.16 (0.36) (0.16) (0.12)
1993(1) 10.00 0.17 0.33 (0.17) (0.12)
INVESTOR CLASS
1995 $ 9.74 $ 0.12 $ 2.89 $(O.13) $(1.00)
1994 10.23 0.13 (0.37) (0.13) (0.12)
1993(13) 10.44 0.10 (0.08) (0.11) (0.12)
- -------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
- -------------------------------------------------------------------------------------------------
TRUST CLASS
1995 $13.00 $ 0.07 $ 1.75 $(0.06) $(0.20)
1994 12.59 0.02 0.40 0.00 (0.01)
1993(1) 10.00 0.00 2.63 0.00 (0,04)
INVESTOR CLASS
1995 $12.96 $ 0.05 $ 1.73 $(0.02) $(0.20)
1994 12.58 0.02 0.37 0.00 (0.01)
1993(14) 10.93 (0.01) 1.70 0.00 (0.04)
- -------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
68
<PAGE>
DECEMBER 31, 1995
<TABLE>
<CAPTION>
RATIO OF NET
INVESTMENT
RATIO OF NET RATIO OF EXPENSES INCOME (LOSS)
RATIO OF INVESTMENT TO AVERAGE TO AVERAGE
NET ASSET NET ASSETS EXPENSES INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO
VALUE END TOTAL END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
OF PERIOD RETURN PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$12.26 32.02% $131,243 1.05% 3.07% 1.05% 3.07% 37%
9.79 0.00 61,557 1.06 3.45 1.06 3.45 38
10.30 6.73 54,340 1.10 2.85 1.10 2.85 40
$12.28 31.72%* $ 1,497 1.33% 2.79% 1.33% 2.79% 37%
9.80 (0.21)* 731 1.37 3.13 1.37 3.13 38
10.30 1.95* 435 1.48 2.51 8.99** (5.00)** 40
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
$11.61 31.60% $ 78,216 1.02% 1.37% 1.02% 1.37% 71%
9.73 (2.05) 82,710 1.02 1.58 1.03 1.57 68
10.21 5.07 98,581 1.06 1.70 1.07 1.69 82
$11.62 31.29%* $2,681 1.31% 1.10% 1.31% 1.10% 71%
9.74 (2.42)* 1,530 1.33 1.30 1.33 1.30 68
10.23 (0.23)* 840 1.43 1.24 6.55** (3.88)** 82
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
$14.56 14.03% $ 77,519 1.38% 0.70% 1.38% 0.70% 11%
13.00 3.32 41,324 1.43 0.21 1.46 0.18 6
12.59 26.55 23,457 1.64 0.03 1.64 0.03 13
$14.52 13.79%* $1,686 1.68% 0.42% 1.68% 0.42% 11%
12.96 3.08* 1,179 1.73 0.03 2.22 (0.46) 6
12.58 23.52* 321 1.92 (0.38) 20.12** (18.58)** 13
- ------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
69
<PAGE>
Financial Highlights
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET ASSET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED FROM NET FROM
BEGINNING INVESTMENT GAINS (LOSSES) INVESTMENT CAPITAL
OF PERIOD INCOME (LOSS) ON SECURITIES INCOME GAINS
- --------------------------------------------------------------------------------------------
SMALL CAP FUND
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TRUST CLASS
1995 $ 9.57 $ 0.02 $ 3.05 $(0.02) $(0.16)
1994 10.24 0.03 (0.67) (0.03) 0.00
1993(1) 10.00 0.04 0.24 (0.04) 0.00
INVESTOR CLASS
1995 $ 9.58 $(0.01) $ 3.05 $ 0.00 $(0.16)
1994 10.25 0.00 (0.67) 0.00 0.00
1993(15) 9.51 0.00 0.75 (0.01) 0.00
- --------------------------------------------------------------------------------------------
ASIAN TIGERS FUND
- --------------------------------------------------------------------------------------------
TRUST CLASS
1995 $ 9.47 $ 0.12 $ 0.98 $(0.12) $ 0.00
1994(16) 10.00 0.03 (0.53) (0.02) (0.01)
INVESTOR CLASS
1995 $ 9.47 $ 0.11 $ 0.95 $(0.09) $ 0.00
1994(17) 10.00 0.01 (0.53) 0.00 (0.01)
- --------------------------------------------------------------------------------------------
</TABLE>
*Sales load is not included in total return.
**Ratios are high relative to subsequent years as a result of the low initial
asset levels during the Investor Classes' initial year of operations.
1. Commenced operations on January 4, 1993. All ratios and total returns for
the period have been annualized.
2. Commenced operations on March 25, 1993. All ratios and total returns for the
period have been annualized.
3. Commenced operations on April 22, 1993. All ratios and total returns for the
period have been annualized.
4. Commenced operations on March 31, 1993. All ratios and total returns for the
period have been annualized.
5. Commenced operations on April 13, 1993. All ratios and total returns for the
period have been annualized.
6. Commenced operations on March 12, 1993. All ratios and total returns for the
period have been annualized.
7. Commenced operations on April 12, 1993. All ratios and total returns for the
period have been annualized.
8. Commenced operations on March 9, 1993. All ratios and total returns for the
period have been annualized.
9. Commenced operations on February 7, 1993. All ratios and total returns for
the period have been annualized.
70
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, 1995
[REMBRANDT LOGO]
Ratio of Net
Investment
Ratio of Net Ratio of Expenses Income (Loss)
Ratio of Investment to Average to Average
Net Asset Net Assets Expenses Income (Loss) Net Assets Net Assets Portfolio
Value End Total End of to Average to Average (Excluding (Excluding Turnover
of Period Return Period (000) Net Assets Net Assets Waivers) Waivers) Rate
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
$12.46 32.13% $23,844 1.10% 0.18% 1.10% 0.18% 142%
9.57 (6.27) 31,527 1.06 0.27 1.06 0.27 43
10.24 2.82 53,357 1.09 0.40 1.10 0.39 27
$12.46 31.73%* $ 553 1.39% (0.08)% 1.39% (0.08)% 142%
9.58 (6.54)* 294 1.38 0.02 1.38 0.02 43
10.25 10.55* 124 1.57 (0.10) 33.84** (32.37)** 27
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
$10.45 11.61% $23,145 1.52% 1.38% 1.60% 1.30% 28%
9.47 (5.07) 17,860 1.60 0.45 1.71 0.34 13
$10.44 11.18%* $ 733 1.81% 1.05% 1.88% 0.98% 28%
9.47 (5.37)* 705 1.90 0.15 2.75** (0.70)** 13
- --------------------------------------------------------------------------------------------------------------------------------
10. Commenced operations on April 26, 1993. All ratios and total returns for the period have been annualized.
11. Commenced operations on March 9, 1993. All ratios and total returns for the period have been annualized.
12. Commenced operations on March 26, 1993. All ratios and total returns for the period have been annualized.
13. Commenced operations on March 8, 1993. All ratios and total returns for the period have been annualized.
14. Commenced operations on April 12, 1993. All ratios and total returns for the period have been annualized.
15. Commenced operations on April 12, 1993. All ratios and total returns for the period have been annualized.
16. Commenced operations on January 3, 1994. All ratios and total returns for the period have been annualized.
17. Commenced operations on January 12, 1994. All ratios and total returns for the period have been annualized.
The accompanying notes are an integral part of the financial statements.
71
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Organization
Rembrandt Funds/r/ (the "Trust") was organized as a Massachusetts business trust
under a Declaration of Trust dated September 17, 1992. The Trust is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company with 17 funds: Treasury Money Market Fund, Government Money
Market Fund, Money Market Fund (formerly the Taxable Money Market Fund), Tax-
Exempt Money Market Fund (collectively "the Money Market Funds''), Fixed Income
Fund (formerly the Taxable Fixed Income Fund), Intermediate Government Fixed
Income Fund (formerly the Short/Intermediate Government Fixed Income Fund), Tax-
Exempt Fixed Income Fund, Global Fixed Income Fund, Limited Volatility Fixed
Income Fund (collectively "the Fixed Income Funds''), Balanced Fund, Value Fund,
Growth Fund, International Equity Fund, Small Cap Fund, TransEurope Fund, Latin
America Equity Fund and Asian Tigers Fund (collectively "the Equity Funds'').
The Limited Volatility Fixed Income Fund, Latin America Equity Fund and
TransEurope Fund have not yet commenced operations as of December 31, 1995. The
assets of each Fund are segregated, and a shareholder's interest is limited to
the Fund in which shares are held. The Trust is registered to offer two classes
of shares: Trust Class and Investor Class.
2. Significant Accounting Policies
The following is a summary of the significant accounting policies followed by
the Funds.
Security Valuation--Investments in equity securities which 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 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 60
days to maturity for which market quotations are readily available are valued at
the most recently quoted bid price. Debt obligations with 60 days or less until
maturity may be valued at their amortized cost. Foreign securities in the Global
Fixed Income Fund, Asian Tigers Fund, and International Equity Fund are valued
based upon quotations from the primary market in which they are traded.
Investment securities held by the Money Market Funds 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 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 provisions for Federal income taxes are required in the
accompanying 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 an
accrual basis. Costs used in determining realized gains and losses on the sales
of investment securities are those of the specific securities sold, adjusted for
the accretion and amortization of purchase discounts and premiums during the
respective holding periods. Purchase discounts and premiums on securities held
by the Equity and Fixed Income Funds are accreted and amortized to maturity
using the interest method, which approximates the effective interest method.
- --------------------------------------------------------------------------------
72
<PAGE>
DECEMBER 31, 1995
[REMBRANDT LOGO]
Repurchase Agreements--Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure 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 of the collateral by the Funds may be delayed or limited.
Net Asset Value Per Share--The net asset value per share of each Fund is
calculated on 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.
Foreign Currency Transactions--With respect to the Global Fixed Income Fund,
Asian Tigers Fund, and International Equity Fund (the "International Funds"),
the books and records are maintained in U.S. dollars. Foreign currency amounts
are translated into U.S. dollars on the following basis:
(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income, and expenses at
the relevent rates of exchange prevailing on the respective dates of such
transactions.
The International Funds do not isolate that portion of gains and losses on
investments in equity securities which is due to changes in the foreign exchange
rates from that which is due to change in market prices of equity securities.
The International Funds report certain foreign currency-related transactions as
components of realized gains for financial reporting purposes, whereas such
components are treated as ordinary income for Federal income tax purposes.
Forward Foreign Currency Contracts--The Global Fixed Income Fund enters into
forward foreign currency contracts as hedges against fund positions. The
aggregate principal amounts of the contracts are not recorded as the Fund
intends to settle the contracts prior to delivery. All commitments are "marked-
to-market" daily at the applicable foreign exchange rate and any resulting
unrealized gains or losses are recorded currently. The Fund realizes gains or
losses at the time the forward contracts are extinguished. Unrealized gains or
losses on outstanding positions in forward foreign currency contracts held at
the close of the year are recognized as ordinary income or loss for Federal
income tax purposes.
Maturity Dates--Certain variable rate and floating rate securities of the Funds
are subject to "maturity shortening" devices such as put or demand features.
Under Rule 2a-7 of the Investment Company Act of 1940, as amended, these
securities are deemed to have maturities shorter than the ultimate maturity
dates. Accordingly, the maturity dates reflected in the Statements of Net Assets
are the shorter of the effective put/demand date or the ultimate maturity date.
Classes--Class-specific expenses are borne by that class. Income, expenses, and
realized and unrealized gains/losses are allocated to the respective classes on
the basis of relative daily net assets.
Other--Distributions from net investment income for the Equity and Fixed Income
Funds are paid to shareholders on a periodic basis. Distributions from net
investment income for the Money Market Funds are distributed to shareholders
daily. 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
- --------------------------------------------------------------------------------
73
<PAGE>
Notes to Financial Statements
recorded under generally accepted accounting principles. These book/tax
differences are either temporary or permanent in nature. To the extent that
these differences are permanent, they are charged or credited to paid-in capital
in the period that the difference arises.
3. Administration and Distribution Agreements
The Trust and SEI Financial Management Corporation (the "Administrator") have
entered into an administration agreement. Under the terms of the Administration
Agreement (the "Administration Agreement''), the "Administrator" is entitled to
a fee calculated daily and paid monthly at an annual rate of .15% of the average
daily net assets of each Fund.
The Trust and Rembrandt Financial Services Company (the "Distributor"), a
wholly owned subsidiary of SEI Financial Services Company, have entered into a
distribution agreement. The Distributor receives no fees for its distribution
services under this agreement for Trust Class shares of any Fund. The
Distributor is entitled to a fee of .25% of the average daily net assets of the
Investor Class shares of the Fixed Income and Money Market Funds and, through
October 24, 1995, .30% of the average daily net assets of the Investor Class
shares of the Equity Funds as compensation for its services. Since October 24,
1995, the distributor is entitled to a fee of .25% of the average daily net
assets of the Investor Class shares of each Fund.
4. Organizational Costs and Transactions with Affiliates
Organizational costs have been capitalized by the Funds and are being amortized
over 60 months commencing with operations. In the event any of the initial
shares are redeemed by any holder thereof during the period that the Fund is
amortizing its organizational costs, the redemption proceeds payable to the
holder thereof by the Fund 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 the redemption. These
costs include legal fees of approximately $53,000 for organizational work
performed by a law firm of which an officer of the Trust is a partner.
Certain officers 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
roles as officers of the Trust.
During the period ended December 31, 1994, ABN AMRO North America, Inc., an
affiliate of the Advisor, purchased securities from the Money Market Fund and
Government Money Market Fund for $30,000,000 and $15,000,000, respectively,
which represented the amortized cost and carrying value of the securities. The
securities' aggregate market values were $28,600,000 and $14,300,000,
respectively, at the time of purchase. In connection with these transactions the
Funds recorded realized losses on the sales of these securities in their
statements of operations along with an offsetting capital contribution from the
affiliate. These transactions did not change the net asset value of either Fund.
5. Investment Advisory Agreement
The Trust has entered into an investment advisory agreement with LaSalle Street
Capital Management, Ltd. (the "Advisor''), under which the Advisor is entitled
to an annual fee equal to .60% of the average daily net assets of each of the
Fixed Income, Intermediate Government Fixed Income, Limited Volatility Fixed
Income and Tax-Exempt Fixed Income Funds; .80% of the average daily net assets
of the Global Fixed Income, Value, Growth, and Small Cap Funds; 1.00% of the
- --------------------------------------------------------------------------------
74
<PAGE>
DECEMBER 31, 1995
[REMBRANDT LOGO]
average daily net assets of the International Equity, TransEurope, Latin America
Equity and Asian Tigers Funds; 70% of the average daily net assets of the
Balanced Fund; 35% of the average daily net assets of the Treasury Money Market,
Money Market, and Tax-Exempt Money Market Funds, and .20% of the average daily
net assets of the Government Money Market Fund. The Advisor has voluntarily
agreed for an indefinite period of time, to waive a portion of its fee in an
amount equal to .10% of the average daily net assets of each of the Fixed Income
Funds, except the Global Fixed Income Fund. The Advisor has also voluntarily
agreed for an indefinite period of time, to waive a portion of its fee in an
amount equal to .15% of the average daily net assets of each of the money Market
Funds, except the Government Money Market Fund.
ABN AMRO-NSM International Funds Management B.V. has entered into a sub-advisory
agreement with the Advisor and serves as Sub-Advisor to the International Funds.
Sub-Advisory fees are paid by the Advisor.
6. Investment Transactions
The cost of security purchases and the proceeds from the sale of securities
including U.S. Government securities, other than temporary cash investments,
during the period ended December 31, 1995 were as follows:
Purchases Sales
(000) (000)
--------- -----
Fixed Income $98,106 $61,520
Intermediate Government
Fixed Income 81,023 81,055
Tax-Exempt Fixed Income 62,732 68,892
Global Fixed Income 15,087 15,401
Balanced 49,080 80,105
Value 78,071 34,271
Growth 58,095 81,502
International Equity 35,123 6,532
Small Cap 28,227 41,211
Asian Tigers 9,226 5,377
At December 31 , 1995, the total cost of securities and the net realized gains
or losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation on investments at December 31,
1995, for each Fixed Income and Equity Fund is as follows:
Net
Appreciated Depreciated Unrealized
Securities Securities Appreciation
(000) (000) (000)
------------ ----------- -----------
Fixed Income $ 5,898 $ 47 $ 5,851
Intermediate
Government
Fixed Income 1,073 144 929
Tax-Exempt Fixed
Income 2,327 5 2,322
Global Fixed
Income 1,040 92 948
Balanced 5,929 522 5,407
Value 18,468 2,125 16,343
Growth 12,707 2,747 9,960
International Equity 12,209 1,611 10,598
Small Cap 4,205 764 3,441
Asian Tigers 2,925 944 1,981
- --------------------------------------------------------------------------------
75
<PAGE>
Notes to Financial Statements
At December 31, 1995 the following Funds had available realized capital losses
to offset future net capital gains through fiscal year ended:
2002 2003
(000) (000)
----- -----
Government Money Market $ 2 $ --
Tax-Exempt Money Market 10 2
Fixed Income 3,923 --
Intermediate Government Fixed Income 1,919 447
Tax-Exempt Fixed Income 2,215 307
Global Fixed Income 392 --
Asian Tigers -- 142
The market value of the Fixed Income Funds' investments will change in response
to interest rate changes and other factors. During periods of falling interest
rates, the values of fixed income securities generally rise. Conversely, during
periods of rising interest rates, the values of such securities generally
decline. Changes by recognized rating agencies in the ratings of any fixed
income security and in the ability of an issuer to make payments of interest and
principal may also affect the value of these investments.
7. Forward Foreign Currency Contracts
The Global Fixed Income Fund enters into forward foreign currency exchange
contracts as hedges against portfolio positions. Such contracts, which protect
the value of the Fund's investment securities against a decline in the value of
the hedged currency, do not eliminate fluctuations in the underlying prices of
the securities. They simply establish an exchange rate at a future date. Also,
although such contracts tend to minimize the risk of loss due to a decline in
the value of a hedged currency, at the same time they tend to limit any
potential gain that might be realized should the value of such foreign currency
increase.
The following forward foreign currency contract was outstanding at December 31,
1995:
Global Fixed Income Fund:
In Net
Contract Exchange Unrealized
Settlement to Deliver For Depreciation
Date (000) (000) (000)
---------- ---------- --------- -------------
Foreign Currency
Sale: 03/14/96 ES 91,800 DM 1,064 $(6)
- ------------
DM German Mark
ES Spanish Peseta
8. Shareholder Voting Results (Unaudited)
On September 11, 1995 there was a special meeting of shareholders of the Global
Fixed Income Fund to approve the elimination of the fundamental investment
limitation concerning diversification to permit increased investments in the
securities of any single issuer. The following were the results of the vote:
For..................................... 1,291,064
Against................................. 277,665
Abstain................................. 0
There were no other proposals voted upon at such meeting.
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<PAGE>
DECEMBER 31, 1995
[REMBRANDT LOGO]
Report of Independent Auditors
Trustees and Shareholders:
Rembrandt Funds(R)
We have audited the accompanying statements of net assets of the Treasury Money
Market Fund, Government Money Market Fund, Money Market Fund, Tax-Exempt Money
Market Fund, Fixed Income Fund, Intermediate Government Fixed Income Fund, Tax-
Exempt Fixed Income Fund, Value Fund, Growth Fund, International Equity Fund,
and Small Cap Fund and the schedules of investments and statements of assets and
liabilities of the Global Fixed Income Fund, Balanced Fund, and Asian Tigers
Fund of Rembrandt Funds(R), which includes the Trust and Investor classes (the
"Trust"), as of December 31, 1995, and the related statements of operations, the
statements of changes in net assets, and the financial highlights for each of
the periods presented herein. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the Trust's custodian and brokers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Treasury Money Market Fund, Government Money Market Fund, Money Market Fund,
Tax-Exempt Money Market Fund, Fixed Income Fund, Intermediate Government Fixed
Income Fund, Tax-Exempt Fixed Income Fund, Global Fixed Income Fund, Balanced
Fund, Value Fund, Growth Fund, International Equity Fund, Small Cap Fund, and
Asian Tigers Fund at December 31, 1995, the results of their operations, the
changes in their net assets and the financial highlights for each of the periods
presented herein, in conformity with generally accepted accounting principles.
Ernst & Young LLP
Philadelphia, Pennsylvania
January 26, 1996
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