REMBRANDT FUNDS(REGISTRATION MARK)
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ANNUAL REPORT
DECEMBER 31, 1996
<PAGE>
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS ........................... 1
OVERVIEW ......................................... 2
MANAGER'S DISCUSSION AND ANALYSIS ................ 5
REPORT OF INDEPENDENT AUDITORS ................... 24
STATEMENTS OF NET ASSETS/SCHEDULES
OF INVESTMENTS ................................ 25
STATEMENTS OF ASSETS AND LIABILITIES ............. 60
STATEMENTS OF OPERATIONS ......................... 61
STATEMENTS OF CHANGES IN NET ASSETS .............. 64
FINANCIAL HIGHLIGHTS ............................. 68
NOTES TO FINANCIAL STATEMENTS .................... 78
SHAREHOLDER VOTING RESULTS ....................... 83
NOTICE TO SHAREHOLDERS ........................... 85
[REMBRANDT LOGO OMITTED]
Rembrandt, Rembrandt Funds and the "R"
are registered trademarks of
LaSalle National Bank, N.A. All rights reserved.
SHARES OF REMBRANDT FUNDS ARE NOT SPONSORED OR GUARANTEED BY, AND DO NOT
CONSTITUTE OBLIGATIONS OF LASALLE NATIONAL BANK, ANY OF ITS AFFILIATES, OR THE
U.S. GOVERNMENT, ITS AGENCIES, OR INSTRUMENTALITIES. SHARES OF REMBRANDT FUNDS
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
AGENCY. SHARES OF REMBRANDT FUNDS INVOLVE INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL. LASALLE STREET CAPITAL MANAGEMENT, LTD., AN AFFILIATE OF
LASALLE BANKS AND EUROPEAN AMERICAN BANK, SERVES AS THE INVESTMENT ADVISOR TO
REMBRANDT FUNDS. REMBRANDT FUNDS ARE DISTRIBUTED BY REMBRANDT FINANCIAL SERVICES
COMPANY WHICH IS NOT AN AFFILIATE OF LASALLE NATIONAL BANK.
<PAGE>
DECEMBER 31, 1996
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LETTER TO SHAREHOLDERS
DEAR SHAREHOLDERS:
The Rembrandt Funds finished up 1996 with a strong fourth quarter, as several
portfolios outperformed their Lipper peer groups. Overall, 1996 was another good
year for Rembrandt and assets continued to grow.
Our U.S. stock funds led the way in 1996 with double digit returns above or near
20% for Growth, Value and Small Cap. The Balanced Fund, with 51% of its assets
in domestic stocks turned in 13.15%, well ahead of the average bond fund's
performance of 4.69% for the year. International stocks and bonds continued to
underperform the U.S. market during the year. Sluggish foreign economies were
partly to blame. Neither Japan nor Europe was able to completely shake
recession, while many emerging markets had continued difficulties with growth.
U.S. bonds did not fare too well in 1996, as rates gradually rose, pushing down
returns. While the economy was stronger than most suspected, and labor markets
were tight, inflation continued at modest levels. This combination of moderate
growth, low inflation and low relative interest rates worked best for stocks,
and kept bonds skittish.
Rembrandt hit a milestone during 1996, as the Family of Funds passed the $2
billion mark for assets under management across all portfolios. As a bank fund
complex, Rembrandt/LaSalle National Corp. is ranked among the top 50 in terms of
asset size according to THE AMERICAN BANKER (November 12, 1996). And thanks to
you, we continue to grow.
With a range of portfolios from which to choose, we hope you'll consider the
Rembrandt Funds for one, or all of your new mutual fund investments in 1997. If
you'd like more information, just give us a call at 1-800-443-4725 or visit our
website at www.rembrandtfunds.com.
(/S/ ANTONY EDGAR)
Antony Edgar
President
LaSalle Street Capital Management, Ltd.
1
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OVERVIEW
MONEY MARKET FUNDS
MONEY MARKET FUND--This fund seeks to provide as high a level of current
income as is consistent with the preservation of capital and liquidity. It
invests exclusively in a variety of high quality money market instruments.
GOVERNMENT MONEY MARKET FUND-- This fund seeks to provide as high a level
of current income as is consistent with the preservation of capital and
liquidity. The main difference between this fund and the Treasury Money
Market Fund is that in addition to investing in Treasuries, it invests in
securities issued or guaranteed by the U.S. Government or its agencies.
TREASURY MONEY MARKET FUND-- The fund seeks to preserve principal value and
maintain a high degree of liquidity while providing current income. It
invests exclusively in short-term U.S. Treasury bills, notes and bonds.
TAX-EXEMPT MONEY MARKET FUND-- This fund seeks to preserve principal value,
maintain a high degree of liquidity, and provide current income exempt from
Federal income tax. It invests primarily in municipal securities with the
objective of providing maximum after-tax yield consistent with liquidity.
2
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DECEMBER 31, 1996
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FIXED INCOME FUNDS
FIXED INCOME FUND-- This fund emphasizes corporate and government bonds and
other fixed income instruments.
INTERMEDIATE GOVERNMENT FIXED INCOME FUND-- This fund consists entirely of
short- and intermediate-term government securities. The fund is managed to
take advantage of anticipated changes in the direction of interest rates.
TAX-EXEMPT FIXED INCOME FUND-- This fund invests primarily in state and
local fixed income issues that are exempt from Federal income tax.*
INTERNATIONAL FIXED INCOME FUND-- This fund invests primarily in fixed
income securities of various countries worldwide. It strives to take
maximum advantage of financial economic developments and currency
fluctuations from around the world.**
BALANCED FUND-- This fund consists of a mix of fixed income securities and
common stocks. Its objective is to provide diversification within a single
portfolio. By altering the mix of equity and fixed income securities, this
fund seeks to take advantage of changing market conditions to maximize
returns.
* Income may be subject to federal Alternative Minimum Tax and state and
local taxes. Please consult your tax adviser.
** Foreign investing involves certain risks, such as currency fluctuations,
foreign taxation, differing standards of accounting and financial
disclosure, relatively low liquidity, and potential adverse political
situations.
3
<PAGE>
OVERVIEW (CONTINUED)
EQUITY FUNDS
GROWTH FUND-- The objective of this fund is to provide a high level of
total return through capital appreciation. It consists of diversified
common stocks and securities convertible into common stocks.
SMALL CAP FUND-- This fund also seeks a high level of total return through
capital appreciation. While the Growth Fund invests in companies of any
size, this fund invests at least 65% of its assets in the common stocks of
growth-oriented corporations with market capitalization of less than $1
billion.
VALUE FUND-- This fund seeks a high level of total return through capital
appreciation and current income. Unlike the Growth Fund or the Small Cap
Fund, it invests in the common stocks of under-valued companies with large
capitalization and with consistent dividend history.
INTERNATIONAL EQUITY FUND-- This fund consists of common stocks and other
securities from companies in at least three countries other than the U.S.*
ASIAN TIGERS FUND-- The fund invests primarily in common stocks traded on
recognized stock exchanges of Asian countries and in the common stocks of
Asian companies, excluding Japan. Investments are allocated to various
Asian countries based on the attractiveness of the stocks.*
LATIN AMERICA EQUITY FUND-- This fund seeks long-term capital appreciation
through investments primarily in equity securities of companies whose
principal trading is in Latin America, and companies whose primary services
performed are in Latin America.*
* Foreign investing involves certain risks, such as currency fluctuations,
foreign taxation, differing standards of accounting and financial
disclosure, relatively low liquidity, and potential adverse political
situations.
4
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DECEMBER 31, 1996
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MANAGER'S DISCUSSION AND ANALYSIS
Note: References in this section to "the Fund" refer to either the Fund itself
or the Fund's investment advisors.
TREASURY MONEY MARKET FUND
The Fund's Trust Class outperformed the IBC U.S. Treasury Average
benchmark, 4.80% to 4.69% respectively, while the Investor Class produced a
respectable 4.54% for 1996.
The Fund believed the Fed would remain steady in 1996 and that is exactly
what happened through the year. The Federal Open Market Committee did not hike
interest rates, although the markets were pushed up and down as economic news
seemed to favor one side over another at various times.
While unemployment stayed down, so did inflation, and labor costs remained
under control. Competition in the retail sector, combined with "value-conscious"
consumers helped to retard any growth in prices. All of this led to a relatively
stable, if unspectacular year for interest rates. The Fund took advantage of
this stability and kept the average maturity in the 35 to 50-day range, moving
it up and down this range as market conditions changed.
The Fund laddered its investments to various maturities which helped to
enhance the portfolio's yield through diversification. While the Fund did seek
opportunities out of the curve, its average maturity is limited to a maximum of
60 days to meet Standard & Poor's strict guidelines for a AAA credit rating.
MONEY MARKET FUND
The Fund's Trust Class outperformed the IBC All-Taxable Average benchmark
5.13% to 4.95% respectively in 1996. The Investor Class produced a respectable
4.87%.
The Fund believed the Fed would remain steady in 1996 and that is exactly
what happened through the year. The Federal Open Market Committee did not hike
interest rates, although the markets were pushed up and down as economic news
seemed to favor one side over another at various times. Thus, the Fund continued
to look for opportunities in longer maturities throughout 1996, which helped
boost returns.
While unemployment stayed down, so did inflation, and labor costs remained
under control. Competition in the retail sector, combined with "value-conscious"
consumers helped to retard any growth in prices. All of this led to a relatively
stable, if unspectacular year for interest rates.
The Fund took advantage of this stability and kept the average maturity in
the 40 to 55-day range, moving it up and down this range as market conditions
changed. The Fund's size grew steadily during 1996 to more than $600 million.
5
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)
GOVERNMENT MONEY
MARKET FUND
The Fund's Trust Class outperformed its benchmark, the IBC Total Government
Average, 5.08% to 4.76% in 1996. The Investor Class outperformed both the
benchmark, as well, 4.82% to 4.76% respectively.
The Fund believed the Fed would remain steady in 1996 and that is exactly
what happened through the year. The Federal Open Market Committee did not hike
interest rates, although the markets were pushed up and down as economic news
seemed to favor one side over another at various times. Thus, the Fund, like the
Rembrandt Money Market Fund, continued to look for opportunities in longer
maturities throughout 1996, which helped boost returns.
While unemployment stayed down, so did inflation, and labor costs remained
under control. Competition in the retail sector, combined with "value-conscious"
consumers helped to retard any growth in prices. All of this led to a relatively
stable, if unspectacular year for interest rates.
The Fund took advantage of this stability and kept the average maturity in
the 40 to 55-day range, moving it up and down this range as market conditions
changed. The Fund grew steadily during 1996 to more than $260 million.
TAX-EXEMPT MONEY
MARKET FUND
The Fund's Trust Class outperformed its benchmark, the IBC All Tax-Free,
3.14% to 2.99%, respectively, for the year. The Investor Class turned in a
competitive 2.88% return in 1996.
The Fund believed the Fed would remain steady in 1996 and that is exactly
what happened through the year. The Federal Open Market Committee did not hike
interest rates, although the markets were pushed up and down as economic news
seemed to favor one side over another at various times. Thus, the Fund continued
to look for opportunities in longer maturities throughout 1996, which helped
boost returns.
While unemployment stayed down, so did inflation, and labor costs remained
under control. Competition in the retail sector, combined with "value-conscious"
consumers helped to retard any growth in prices. All of this led to a relatively
stable, if unspectacular year for interest rates.
The Fund took advantage of this stability and remained fully invested
within laddered maturity ranges for liquidity purposes. Year end pricing
pressures created some opportunities in the variable rate demand note sector,
which the Fund also took advantage of to boost yields.
6
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DECEMBER 31, 1996
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FIXED INCOME FUND
Both of the Fund's share Classes beat their Lipper peer group in 1996,
3.42% (Tr) and 3.24% (Inv), to 3.12% respectively.
Throughout 1996, fixed income performance hinged on a portfolio's strategy
regarding duration, the measure of how long it takes, on average, for a
portfolio's holdings to repay their principal and interest. From the year's low
of 5.95% on January 2, the 30-year Treasury bond rose in yield to 7.19% in July
as economic growth and inflationary pressures began to build. During the first
half of the year, the Fund's duration equaled that of the Lehman Aggregate
Index, it's benchmark, while earning extra return from an overweighting in
corporate and asset-backed securities.
Fortunately for the market, these inflationary pressures were short-lived.
Long rates declined to 6.35% in November and ended the year at 6.64%. For most
of 1996's second half, the Fund's duration was longer than that of the Lehman
Aggregate Index. In conjunction with the added yield from non-Treasury
securities, the Fund's second half return was above that of the Index.
Going forward, we expect interest rates to trade in a range-based fashion.
Although we expect stronger growth in the first half than the second, we feel a
significant increase in interest rates would present a buying opportunity. Our
indicators present a picture of well behaved inflation for the foreseeable
future. We continue to emphasize intermediate (5-10 year)
TRUST CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Fixed
Income Fund Trust Class from January 31, 1993 through December 31, 1996 as
compared with the growth of a $10,000 investment in the Lehman Brothers
Aggregate Bond Index and the Lipper Intermediate Investment-Grade Debt Funds
Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Lehman Brothers Invested in Lipper Intermediate
Fixed Income Fund Aggregate Bond Index Investment-Grade Debt Funds Average
01/31/93 $10,000 $10,000 $10,000
12/31/93 $10,760 $10,768 $10,769
12/31/94 $10,349 $11,157 $10,369
12/31/95 $12,186 $13,219 $12,099
12/31/96 $12,603 $13,696 $12,477
</TABLE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
INVESTOR CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Fixed
Income Fund Investor Class from March 31, 1993 through December 31, 1996 as
compared with the growth of a $10,000 investment in the Lehman Brothers
Aggregate Bond Index and the Lipper Intermediate Investment-Grade Debt Funds
Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Lehman Brothers Invested in Lipper Intermediate
Fixed Income Fund Aggregate Bond Index Investment-Grade Debt Funds Average
03/31/93 $ 9,550 $10,000 $10,000
12/31/93 $10,057 $10,539 $10,525
12/31/94 $ 9,658 $10,919 $10,134
12/31/95 $11,339 $12,937 $11,825
12/31/96 $11,706 $13,404 $12,194
</TABLE>
Annualized Annualized
Class of Shares One-Year Return Three Year Return Inception to Date
Trust 3.42% 5.41% 6.51%
Investor 3.24% 5.19% 5.60%
Investor w/load -1.43% 3.59% 4.32%
FOR THE PERIOD ENDED DECEMBER 31, 1996. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
7
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)
securities given the low levels of incremental yield received by purchasing
longer issues.
Our sector view reflects the strong recent performance by credit oriented
securities in conjunction with our concern that economic growth may slow
significantly in the second half of 1997. Although the Fund is market weighted
in corporate bonds, the Fund's focus is on less economically sensitive sectors
such as consumer non-cyclical and yankee issues (U.S. dollar denominated bonds
issued by foreign governments and corporations). The Fund is over-weighted in
mortgage and home loan backed securities due to their US Government backing or
AAA rating.
INTERMEDIATE GOVERNMENT
FIXED INCOME FUND
The Fund's focus on mortgage-backed securities paid off in 1996, as
mortgages outperformed treasuries of the same duration and maturity range. The
Fund was competitive for the year and finished up with a strong 4th quarter.
As rates rose generally during the fourth quarter, mortgages finished up
strong, propelling the Fund well into the top third of all intermediate
government funds according to Lipper. The Fund started the year on a down note,
however.
Its average maturity was longer than the benchmark index, which hurt the
Fund as rates jumped early in the year. Plus, the Fund had a higher weighting at
the time in Treasuries and Agencies which underperformed other government bond
sectors. The Fund then made the move to increase exposure to mortgage
securities, generally in the 7- to 10-year average maturity range. Mortgages
actually outperformed the general government bond market by nearly 200 basis
points for 1996, or 2%, thus benefiting shareholders.
As the yield curve flattened during the year, intermediate and longer-term
bonds benefited, especially fixed income securities that spread off of
Treasuries, like mortgages. In addition, the Fund concentrated on buying
seasoned mortgages -- they tend to be less volatile, as they have a more defined
maturity.
8
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DECEMBER 31, 1996
[GRAPHIC OMITTED]
TRUST CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt
Intermediate Government Fixed Income Fund Trust Class from January 31, 1993
through December 31, 1996 as compared with the growth of a $10,000 investment in
the Lehman Government Bond Index and the Lipper Short/Intermediate US Government
Funds Average and Merrill Lynch 1-5 Year Government Bond Index
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000 Invested Growth of $10,000
Invested in Rembrandt Invested in Lehman in Lipper Short/Intermediate Invested in Merrill Lynch
Intermediate Government Government Bond Index US Government Funds Average 1-5 year Government Bond Index
Fixed Income Fund
01/31/93 $10,000 $10,000 $10,000 $10,000
12/31/93 $10,476 $10,835 $10,527 $10,533
12/31/94 $10,185 $10,470 $10,287 $10,467
12/31/95 $11,596 $12,389 $11,570 $11,803
12/31/96 $12,003 $12,732 $11,978 $12,339
</TABLE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
INVESTOR CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt
Intermediate Government Fixed Income Fund Investor Class from April 30, 1993
through December 31, 1996 as compared with the growth of a $10,000 investment in
the Lehman Government Bond Index and the Lipper Short/Intermediate US Government
Funds Average and Merrill Lynch 1-5 Year Government Bond Index
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Lehman Invested in Lipper Short/ Invested in Merrill Lynch
Intermediate Government Government Bond Index Intermediate US Government 1-5 year Government Bond Index
Fixed Income Fund Funds Average
04/30/93 $ 9,550 $10,000 $10,000 $10,000
12/31/93 $ 9,770 $10,507 $10,293 $10,292
12/31/94 $ 9,474 $10,152 $10,059 $10,227
12/31/95 $10,762 $12,013 $11,314 $11,533
12/31/96 $11,117 $12,346 $11,712 $12,056
</TABLE>
Annualized Annualized
Class of Shares One-Year Return Three Year Return Inception to Date
Trust 3.51% 4.64% 4.99%
Investor 3.30% 4.40% 4.21%
Investor w/load -1.32% 2.82% 2.93%
FOR THE PERIOD ENDED DECEMBER 31, 1996. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
This makes them more predictable in terms of pre-payment risk and in turn, this
reduces volatility in the portfolio. Looking ahead, the Fund will continue to
favor mortgages and the 7- to 10-year maturity range as we believe there is much
value there.
9
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)
TAX-EXEMPT FIXED INCOME FUND
The Fund returned 2.96% (Tr) and 2.70% (Inv) for the year.
During the first nine months of 1996, the Fund concentrated on strategies
to counter the "flat tax" proposals that hung over the muni market. Since the
government was looking for ways to reduce its debt burden, increasing tax
revenues was one way to do that. It had been suggested that "all" income be
taxable, including income from municipal bonds. People began buying munis in the
hope that they would be "grandfathered" and would keep the tax-exempt status.
The Fund had concentrated on the long end of the muni market where a rush to buy
ensued.
Adding to this rush was the fact that a limited number of issues were
hitting the market making existing issues even more scarce.
In the fourth quarter, the flat tax had become less of an issue. The Fund
shifted its strategy toward higher quality, more well structured names that were
more viable in the market.
Much of the portfolio was held in revenue bonds from less "trade-able"
sectors like hospitals and housing. The Fund moved 15-20% of assets into coupon
bonds or general obligation (G.O.) debt. The difference is that G.O. bonds are
backed by the taxing power of the municipality. These bonds tend to be of
TRUST CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt
Tax-Exempt Fixed Income Fund Trust Class from January 31, 1993 through December
31, 1996 as compared with the growth of a $10,000 investment in the Lehman
Brothers Muni Bond Index, Merrill Lynch 3-7 Year Muni Bond Index, Merrill Lynch
7-12 year Muni Bond Index, Lipper General Muni Debt Average and a Blend of the
above Merrill Lynch indices.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Lehman Invested in Merrill Lynch
Tax-Exempt Brothers 3-7 Year Muni Bond Index
Fixed Income Fund Muni Bond Index
01/30/93 $10,000 $10,000 $10,000
12/31/93 $10,762 $11,099 $10,715
12/31/94 $10,232 $10,525 $10,531
12/31/95 $11,835 $12,363 $11,652
12/31/96 $12,185 $12,912 $12,174
[CHART CONTINUED]
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Invested in Invested in Blend of above
Merrill Lynch 7-12 Lipper General Merrill Lynch indices
Year Muni Bond Index Muni Debt Average
01/31/93 $10,000 $10,000 $10,000
12/31/93 $10,924 $11,110 $10,820
12/31/94 $10,532 $10,377 $10,533
12/31/95 $12,106 $12,125 $11,880
12/31/96 $12,751 $12,526 $12,463
</TABLE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
INVESTOR CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt
Tax-Exempt Fixed Income Fund Investor Class from March 31, 1993 through December
31, 1996 as compared with the growth of a $10,000 investment in the Lehman
Brothers Muni Bond Index, Merrill Lynch 3-7 Year Muni Bond Index, Merrill Lynch
7-12 year Muni Bond Index, Lipper General Muni Debt Average and a Blend of the
above Merrill Lynch indices.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Lehman Invested in Merrill Lynch
Tax-Exempt Brothers 3-7 Year Muni Bond Index
Fixed Income Fund Muni Bond Index
03/31/93 $ 9,550 $10,000 $10,000
12/31/93 $10,094 $10,826 $10,513
12/31/94 $ 9,562 $10,266 $10,332
12/31/95 $11,038 $12,059 $11,432
12/31/96 $11,336 $12,594 $11,944
[CHART CONTINUED]
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Invested in Invested in Blend of above
Merrill Lynch 7-12 Lipper General Merrill Lynch indices
Year Muni Bond Index Muni Debt Average
03/31/93 $10,000 $10,000 $10,000
12/31/93 $10,718 $10,816 $10,615
12/31/94 $10,333 $10,102 $10,333
12/31/95 $11,877 $11,803 $11,655
12/31/96 $12,510 $12,194 $12,227
</TABLE>
Annualized Annualized
Class of Shares One-Year Return Three Year Return Inception to Date
Trust 2.96% 4.23% 5.31%
Investor 2.70% 3.94% 4.27%
Investor w/load -1.93% 2.36% 3.00%
FOR THE PERIOD ENDED DECEMBER 31, 1996. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
10
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
higher quality and are less volatile than revenue bonds.
The revenue bond portion of the portfolio, approximately 80% of the
holdings, was also shifted into higher quality names. The Fund bought into bonds
from such sources as the Washington St. Power Supply, Chicago Water Works and
Indiana School System. While revenue bonds by name, these bonds offered an
indirect backing from taxing authorities, making them more stable. Indirectly,
this helped lower the volatility of the Fund.
The Fund also backed away from the use of zero-coupon munis. These products
were used to boostperformance and worked successfully through the first three
quarters of 1996. When rates fall, these products tend to outperform Treasuries.
But when rates started to rise, later in the year, it was not to the Fund's
advantage.
Looking ahead, the Fund will concentrate on adding more income, primarily
through the use of more general obligation bonds and higher quality in the long
end of the market--10-30 years. The Fund does not favor any particular region
over another and continues to look for value across the country.
INTERNATIONAL
FIXED INCOME FUND
For the year 1996, the Fund had a return of 2.82% (Tr) as compared
to the benchmark return of 3.2% on the JP Morgan Global Government Bond
Index, excluding the US.
The higher return of the index was due to the Fund's lower modified
duration and its underweighting of the so called high yielders in Europe. Lower
duration generally translates to lower volatility.
With already low bond yields and signs of economic growth picking up, the
expected returns, worldwide, appeared low. Hence, the Fund's modified duration
was kept lower than the benchmark. As economic growth in Europe and Japan
continued to disappoint, and Australian and Canadian economic growth weakened,
bond yields in those regions went lower still.
Although the generally expected Fed rate hike in the third quarter did not
happen, US Treasuries ended the year weaker.
During the period, the Fund increased the bond exposure in Japan towards
index level, but continued to keep the JPY currency exposure substantially below
index level. The underweight in the JPY currency exposure has worked well.
Most of the countries in the European Union projected favorable 1997 budget
deficits, increasing the chances of countries like Italy, Spain and Sweden to
join the EMU in 1999. As a result, bond yield spreads of those coun-
11
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)
tries versus German Bonds tightened tremendously and their currencies
appreciated versus the mark. Since those bond markets and their currencies
already had rallied substantially in 1995, the Fund kept them underweight versus
the index, which did not work well.
Fiscal belt tightening around the globe decreases the need to finance debt,
improves the quality of each country's debt and reduces government spending.
Corporate restructuring, (computer) innovations and government deregulations
have a beneficial effect on production costs. In many countries, unemployment is
high, reducing wage pressures. Commodities are somewhat downbeat and pose no
inflationary threat. Altogether it appears that global production outpaces
global demand. Henceforth, in many countries price pressures and inflation are
modest. In this environment, Central Banks in continental Europe, Australia,
Canada and Japan can continue to stimulate economies with low interest rates. In
the US, the Fed can keep rates unchanged.
Offsetting this rosy picture are the already low bond yields around the
world. How long can they stay this low? A thought of comfort is that the low
nominal yields have to be compared with inflation, which is also low. The real
yield on bonds (nominal yield minus inflation) is still reasonable. This
provides a cushion for unforeseen political or financial shocks.
TRUST CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt
International Fixed Income Fund Trust Class from February 28, 1993 through
December 31, 1996 as compared with the growth of a $10,000 investment in the JP
Morgan Global Government Non-US Bond Index and Lipper International Income Funds
Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in JP Morgan Invested in Lipper International
International Global Government Income Funds Average
Fixed Income Fund Non-US Bond Index
02/28/93 $10,000 $10,000 $10,000
12/31/93 $11,348 $10,162 $11,381
12/31/94 $11,182 $11,712 $11,139
12/31/95 $13,529 $14,186 $13,283
12/31/96 $13,910 $14,644 $14,445
</TABLE>
INVESTOR CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt
International Income Fund Investor Class from April 30, 1993 through December
31, 1996 as compared with the growth of a $10,000 investment in the JP Morgan
Global Government Non-US Bond Index and Lipper International Income Funds
Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in JP Morgan Invested in Lipper International
International Global Government Income Funds Average
Fixed Income Fund Non-US Bond Index
04/30/93 $ 9,550 $10,000 $10,000
12/31/93 $10,122 $10,545 $10,945
12/31/94 $ 9,949 $11,064 $10,712
12/31/95 $12,006 $13,401 $12,773
12/31/96 $12,320 $13,834 $13,891
</TABLE>
Annualized Annualized
Class of Shares One-Year Return Three Year Return Inception to Date
Trust 2.82% 7.02% 9.16%
Investor 2.62% 6.77% 6.60%
Investor w/load -2.02% 5.15% 5.27%
FOR THE PERIOD ENDED DECEMBER 31, 1996. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
12
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
With this in mind, the Fund's overall modified duration is expected to be
kept around benchmark level. Because so much of the good news of EMU has already
been discounted in the "high yielders", the Fund will continue to keep the
interest rate exposure in those high yielders somewhat lower compared with the
"hard core" of Europe.
On the currency side, the pound sterling and dollar were clear favorites
last year. At the same time, various Central Banks in continental Europe and
Japan not only eased tremendously, but also talked down their own currencies
against the dollar. This trend is expected to continue in 1997. Therefore, the
Fund will continue to underweight the yen currency exposure.
BALANCED FUND
The Fund outperformed its Lipper peer group in the 4th quarter, and
remained competitive throughout 1996.
The Fund was helped along by its 51% stake in large, domestic stocks, but
in the fourth quarter, the international stocks came to life and helped boost
the Fund past its peers. The international portion, consisting entirely of ADRs,
makes up 16% of the securities held and has remained roughly at this level
throughout the year. The Fund uses international stocks to enhance its domestic
holdings of multinational companies and as a diversification tool for investors.
By investing worldwide, the Fund can reduce the volatility inherent in an all
U.S. portfolio.
The Fund expects the U.S. to continue to lead the EAFE index (Europe,
Australia and the Far East) for 1997, and will keep the international portion at
the current level. While the international holdings tend to favor the large EC
markets, it's stake in Latin America could help lift returns. These markets are
recovering from weak economies in 1996 and the effects of the rising dollar (now
U.S. goods are less competitive, giving a boost to these emerging economies).
Large-cap stocks led the U.S. market in 1996, continuing the trend from
1995. While large-cap returns were not as high last year, they still provided
for a solid performance by the Balanced Fund. Financials were the best
performing sector with banking taking the
13
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)
lead. The Fund expects to overweight this area in 1997, as bank consolidation
may drive returns in this market sector for some time to come. The Fund tends to
be sector neutral, like its sibling the Rembrandt Value Fund, to control
volatility, but will shift weightings if management believes there is reason for
outperformance or can pick up an out of favor stock at a good price.
The bond portion makes up 30% of the holdings of the Fund and also
contributes much to lowering volatility for the portfolio. Most of 1996 was flat
for bonds, but they ended the 4th quarter with solid returns as rates rallied
and the Fed remained on hold. The rest of the portfolio, about 3.5%, was held in
cash to meet liquidity requirements and can be used as a defensive measure in
periods of excessive market volatility.
TRUST CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Balanced
Fund Trust Class from January 31, 1993 through December 31, 1996 as compared
with the growth of a $10,000 investment in the Standard & Poor's 500 Composite
Index, Lehman Brother's Aggregate Bond Index and Lipper Flexible Portfolio Funds
Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Standard & Invested in Lehman Brother's Invested in Lipper Flexible
Balanced Fund Poor's 500 composite Aggregate Bond Index Portfolio Funds Average
Fixed Income Fund Index
01/31/93 $10,000 $10,000 $10,000 $10,000
12/31/93 $10,612 $10,913 $10,768 $10,906
12/31/94 $10,388 $11,056 $10,455 $10,663
12/31/95 $12,658 $15,206 $12,387 $13,318
12/31/96 $14,322 $18,695 $12,834 $15,128
</TABLE>
INVESTOR CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Balanced
Fund Investor Class from March 31, 1993 through December 31, 1996 as compared
with the growth of a $10,000 investment in the Standard & Poor's 500 Composite
Index, Lehman Brother's Aggregate Bond Index and Lipper Flexible Portfolio Funds
Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Standard & Invested in Lehman Brother's Invested in Lipper Flexible
Balanced Fund Poor's 500 composite Aggregate Bond Index Portfolio Funds Average
Index
03/31/93 $ 9,550 $10,000 $10,000 $10,000
12/31/93 $ 9,896 $10,544 $10,539 $10,649
12/31/94 $ 9,670 $10,682 $10,232 $10,411
12/31/95 $11,751 $14,692 $12,123 $13,004
12/31/96 $13,262 $18,063 $12,561 $14,771
</TABLE>
Annualized Annualized
Class of Shares One-Year Return Three Year Return Inception to Date
Trust 13.15% 10.51% 9.65%
Investor 12.86% 10.25% 8.90%
Investor w/load 7.75% 8.58% 7.61%
FOR THE PERIOD ENDED DECEMBER 31, 1996. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
14
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
VALUE FUND
The Rembrandt Value Fund finished 1996 with a strong fourth quarter. Like
many mutual funds, it lagged its benchmark index, the S&P 500 for the year, but
was extremely competitive within its Lipper and Morningstar peer group
categories. Note: the Fund is listed as a "growth" fund by Lipper and a "growth
and income" fund by Morningstar. Since the Fund only invests in stocks that pay
dividends, we believe that Morningstar has the more accurate categorization.
Rising interest rates took their toll early in 1996, especially on the
Fund's utility stake. Add to that the effect of deregulation and the "negative"
sentiment many investors feel about these changes. To steer a more stable course
in this sector, the Fund has diversified its utility holdings, taking less
concentrated positions. Overall, the Fund remains overweighted in this sector.
Financials were among the Fund's strongest performers in 1996, with banks
providing the biggest boost. A large stake in Boatmen's paid off during the
third quarter as NationsBank announced its acquisition of the St. Louis bank.
Given this consolidation trend in the banking industry, management believes that
it will continue in 1997 and beyond. The U.S. is unlike the rest of the world
with hundreds of banks without national charters and lacking economies of scale.
The Fund will look to overweight this sector in 1997.
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Value
Fund Trust Class from January 31, 1993 through December 31, 1996 as compared
with the growth of a $10,000 investment in the Standard & Poor's 500 Composite
Index and the Lipper Growth & Income Funds Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Standard & Invested in Lipper
Value Fund Poor's 500 Composite Growth & Income Funds Average
Index
01/31/93 $10,000 $10,000 $10,000
12/31/93 $10,583 $10,915 $11,063
12/31/94 $10,583 $11,058 $10,994
12/31/95 $13,972 $15,209 $14,399
12/31/96 $16,827 $18,698 $17,392
</TABLE>
INVESTOR CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Value
Fund Investor Class from March 31, 1993 through December 31, 1996 as compared
with the growth of a $10,000 investment in the Standard & Poor's 500 Composite
Index and the Lipper Growth & Income Funds Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Standard & Invested in Lipper
Value Fund Poor's 500 Composite Growth & Income
Index Funds Average
03/31/93 $ 9,550 $10,000 $10,000
12/31/93 $ 9,676 $10,546 $10,693
12/31/94 $ 9,656 $10,684 $10,626
12/31/95 $12,719 $14,695 $13,918
12/31/96 $15,274 $18,066 $16,810
</TABLE>
Annualized Annualized
Class of Shares One-Year Return Three Year Return Inception to Date
Trust 20.43% 16.72% 14.16%
Investor 20.09% 16.44% 13.41%
Investor w/load 14.67% 14.65% 12.03%
FOR THE PERIOD ENDED DECEMBER 31, 1996. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
15
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)
The Fund (Tr) generally does not invest in technology stocks, due to their
lack of dividend payouts. However, with the larger tech stocks that pay
dividends, the Fund remained true to its value orientation through a contrarian
approach. Intel, IBM, Texas Instruments and Motorola are the best examples of
this. The Fund bought shares when these stocks were getting hammered in the
market, then slowly sold shares as they recovered value. The Fund used the same
technique with tobacco stocks, one of the more volatile sectors in the
portfolio.
Looking ahead, the Fund expects much of the same in 1997, with rates and
economic performance staying within current ranges. When the bull market does
finally take a turn, this portfolio is well-positioned to weather a rough market
with its focus on stable large-cap stocks, low volatility and a price-sensitive
value orientation.
GROWTH FUND
The Fund (Tr)outperformed its Lipper peer group by more than 200 basis
points, or 2% for the year ended 12/31/96. Like many stock funds, it lagged the
S&P Index, 21.69% versus 22.72%, respectively.
On a longer term basis, however, the Fund (Tr) has led its peer group
for the past 1, 2 and 3 year periods ended 12/31/96. The Fund has a
large-cap growth orientation, which contrasts nicely with its sibling,
the large-cap Rembrandt Value Fund.
In 1996, the Fund's sector weightings and stock selection helped it surpass
the competition. Overweighting in technology (including Intel, Microsoft and
Cisco Systems) and finance (including KeyCorp and Citicorp) were the main
drivers, as they returned over 42% and 35% respectively, and were the hottest
performing sectors of the S&P.
Stock selection in consumer cyclicals (notably Borders Group), basic
materials, transportation and the consumer staples (notably Avon) sectors,
provided a large part of the Fund's performance. A sophisticated scanning method
is used for stock selection to help identify companies with strong earnings
momentum. Then, traditional fundamental analysis is used to filter out the true
success stories that management is after.
In the fourth quarter, the Fund outperformed the peer group once again, but
was
16
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
TRUST CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Growth
Fund Trust Class from January 31, 1993 through December 31, 1996 as compared
with the growth of a $10,000 investment in the Standard & Poor's 500 Composite
Index and the Lipper Growth Funds Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Standard & Invested in Lipper
Growth Fund Poor's 500 Composite Growth Funds Average
Index
01/31/93 $10,000 $10,000 $10,000
12/31/93 $10,418 $10,913 $10,968
12/31/94 $10,204 $11,056 $10,753
12/31/95 $13,428 $15,206 $14,073
12/31/96 $16,341 $18,695 $16,781
</TABLE>
INVESTOR CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Growth
Fund Investor Class from March 31, 1993 through December 31, 1996 as compared
with the growth of a $10,000 investment in the Standard & Poor's 500 Composite
Index and the Lipper Growth Funds Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Standard & Invested in Lipper
Growth Fund Poor's 500 Composite Growth Funds Average
Index
03/31/93 $ 9,550 $10,000 $10,000
12/31/93 $ 9,626 $10,544 $10,824
12/31/94 $ 9,393 $10,682 $10,612
12/31/95 $12,332 $14,692 $13,889
12/31/96 $14,972 $18,063 $16,561
</TABLE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Rembrandt Growth Fund
S&P 500 Composite Index
Lipper Growth Funds Average
Annualized Annualized
Class of Shares One-Year Return Three Year Return Inception to Date
Trust 21.69% 16.19% 13.33%
Investor 21.41% 15.86% 12.33%
Investor w/load 15.92% 14.11% 10.99%
FOR THE PERIOD ENDED DECEMBER 31, 1996. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
held back by an overweighing in healthcare, which underperformed. Amgen, dropped
16% in the quarter due to uncertainty with its new obesity drug. Healthcare
Compare's entry into the insurance market raised some investors' concern,
causing a short-term drop in the stock's price.
Another bright spot came from the utilities sector, where the Fund was
overweighted in natural gas. Prices had been high for weeks and inventories were
low, increasing investors' expectations for record earnings. This translated
into higher stock prices. Basic materials, capital goods and the consumer
staples sectors also performed well during the fourth quarter.
While economic conditions proved favorable in 1996, and the Fund does not
anticipate any significant change in 1997, management continues to pay attention
to valuations. Growth-style managers will typically pay higher prices in
anticipation of future earnings. However, the Growth Fund seeks out stocks that
are also reasonable in price. This can help to avoid "buying on speculation,"
and is one of the main reasons the Fund has been successful at lowering
volatility without adversely affecting returns.
17
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)
INTERNATIONAL EQUITY FUND
In the first quarter of 1996, the uncertainty over Fed policy caused
turbulence in bond markets. The sharp rise in interest rates, could only partly
temper the enthusiasm in stock markets. The appreciation of the US dollar versus
the yen and most European currencies had eroded a substantial part of the
profits.
In the second quarter the ebullient growth of the US economy, manifested
among other things by the job creation figures, resulted in fears that the US
economy would overheat and that as a consequence monetary policy would be
tightened. The economies of Japan and Germany were still showing lower than
expected growth, as well. At that point in time the rise in many world stock
markets came to a temporary halt.
In the months thereafter, most markets drifted about amid higher than
expected economic growth in the USA and the United Kingdom and disappointing
growth in for example Japan, Germany, and France.
Due to the relative attractiveness of investing in shares in comparison to
bonds and money market products, a flow of money drove stock markets to record
highs. Valuation is momentarily high, but still only at the upper end of fair
value. However, the prices of individual shares became more sensitive to company
specific news. Most European governments had to reduce expenses in order to
fulfill the criteria for admission to the European Monetary Union (EMU).
TRUST CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt
International Equity Fund Trust Class from January 31, 1993 through December 31,
1996 as compared with the growth of a $10,000 investment in the Morgan Stanley
MSCI EAFE Index and the Lipper International Funds Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Morgan Invested in Lipper
International Stanley MSCI EAFE Index International
Equity Fund Funds Average
01/31/93 $10,000 $10,000 $10,000
12/31/93 $12,715 $13,257 $13,523
12/31/94 $13,137 $14,288 $13,457
12/31/95 $14,980 $15,891 $14,723
12/31/96 $16,491 $16,854 $16,458
</TABLE>
INVESTOR CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt
International Equity Fund Investor Class from April 30, 1993 through December
31, 1996 as compared with the growth of a $10,000 investment in the Morgan
Stanley MSCI EAFE Index and the Lipper International Funds Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Morgan Invested in Lipper
International Stanley MSCI EAFE International
Equity Fund Index Funds Average
04/30/93 $ 9,550 $10,000 $10,000
12/31/93 $10,739 $10,810 $11,914
12/31/94 $11,070 $11,651 $11,856
12/31/95 $12,597 $12,958 $12,972
12/31/96 $13,838 $13,744 $14,500
</TABLE>
Annualized Annualized
Class of Shares One-Year Return Three Year Return Inception to Date
Trust 10.09% 9.05% 13.16%
Investor 9.85% 8.82% 11.26%
Investor w/load 4.93% 7.17% 9.88%
FOR THE PERIOD ENDED DECEMBER 31, 1996. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
18
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
The approach of the EMU caused some convergence in European interest and
exchange rates. The traditionally weaker currencies appreciated slightly versus
the stronger ones, and interest rate differentials decreased.
Looking ahead, a low level of interest rates in Europe, due to moderate
economic growth and low inflation, and the likelihood of better corporate
earnings makes investing in equities fairly attractive in comparison to cash and
bonds. In Japan, latest figures showed that a quick recovery seems unlikely.
Although the economy is in better shape than a year ago, things are going
slowly. As the impact of the stimulus packages has faded, we expect Japan's
economic growth rate for 1997 to be considerably lower than in 1996. However,
economic growth and valuation levels in the Far East and emerging markets offer
an opportunity for expanding holdings.
SMALL CAP FUND
The Rembrandt Small Cap Fund finished 1996 on a strong note. The fourth
quarter return exceeded relevant small-cap indices. The Russell 2000 Index,
which is the most widely watched small-cap benchmark, advanced 5.20% in the
quarter versus 6.41% (Tr) and 6.34% (Inv) for the Fund.
For the year, both share classes were up nearly 20%, very competitive with
the Lipper peer group average, and well ahead of the 16.51% for the Russell 2000
Index.
In the final months of the year, the Fund took advantage of attractive
valuation levels to add to quality growth stocks that had lagged in the recovery
rally following the emotional summer correction. This strategy paid off as
investors were beginning to realize the true earnings potential of emerging
growth companies that are dominant players in their market niches and generally
offer unique products and services.
The Fund will continue to focus on companies characterized by high long-
term earnings growth forecasts, positive earnings momentum and exemplary
financial strength. Adequate diversification among industry sectors is the
Fund's strategy to contain the level of volatility. Current sector preferences
include technology, financial services and health care. Within the energy
sector, the Fund is focusing on the oil drilling and services companies.
19
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)
Looking into 1997, we are optimistic that emerging growth companies will
perform well. Small-cap companies have become attractive for several reasons.
First, valuation levels have become lower than those of blue-chip companies.
Second, earnings of the small caps are expected to grow faster than those of the
big caps in both 1997 and 1998. And third, the macro-economic environment is
favorable as small-cap growth companies generally thrive during periods of
moderate economic expansion, low inflation and low interest rates.
TRUST CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Small
Cap Fund Trust Class from January 31, 1993 through December 31, 1996 as compared
with the growth of a $10,000 investment in the Frank Russell 2000 Index and
Lipper Small Company Growth Funds Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Frank Russell Invested in Lipper Small
Small Cap Fund 2000 Index Company Growth Funds Average
01/31/93 $10,000 $10,000 $10,000
12/31/93 $10,300 $11,500 $11,436
12/31/94 $ 9,654 $11,290 $11,361
12/31/95 $12,756 $14,501 $15,016
12/31/96 $15,233 $16,895 $18,050
</TABLE>
COMPARISON OF CHANGE IN THE VALUE OF $10,000 INVESTMENT
INVESTOR CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Small
Cap Fund Investor Class from April 30, 1993 through December 31, 1996 as
compared with the growth of a $10,000 investment in the Frank Russell 2000 Index
and Lipper Small Company Growth Funds Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Frank Russell Invested in Lipper Small
Small Cap Fund 2000 Index Company Growth Funds Average
04/30/93 $ 9,550 $10,000 $10,000
12/31/93 $10,581 $11,725 $11,796
12/31/94 $ 9,889 $11,511 $11,719
12/31/95 $13,027 $14,785 $15,489
12/31/96 $15,525 $17,226 $18,618
</TABLE>
COMPARISON OF CHANGE IN THE VALUE OF $10,000 INVESTMENT
Rembrant Small Cap Fund
Frank Russell 2000 Index
Lipper Small Company Growth Funds Average
Annualized Annualized
Class of Shares One-Year Return Three Year Return Inception to Date
Trust 19.42% 13.93% 11.07%
Investor 19.18% 13.63% 13.04%
Investor w/load 13.79% 11.91% 11.65%
FOR THE PERIOD ENDED DECEMBER 31, 1996. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
20
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
ASIAN TIGERS FUND
The Fund outperformed its Lipper peer group in 1996 and continues to be
highly rated in its category.
1996 saw considerable divergence in performance across Asian markets.
Amongst the larger markets, Hong Kong performed exceedingly well, recording an
increase of 33.5% for the year. Equity prices benefited from a combination of
positives ranging from a benign interest rate environment, early signs of an
economic recovery and a rebound in sentiment regarding Hong Kong's post transfer
prospects. This was also reflected in rising property prices, especially in the
second half of the year. Malaysia also saw a substantial rise as a result of a
soft landing for the economy and strong earnings announcements. For the year,
the market rose by over 24% with the small and medium sized companies
outperforming the larger blue-chips. The slowdown in the US electronics sector
was particularly felt in Singapore whose manufacturing and export sectors are
heavily dependent on electronics. This was manifested in substantially lower
economic growth and a comparatively weak stock market. Thailand was the worst
performing market in 1996 with a decline of over 35%. This was due to a
deteriorating current account deficit, instability in the ruling coalition and
concerns about the financial health of banks and property companies. A number of
other regional markets also performed well in 1996 with Taiwan up by over 34% as
a result of an influx of foreign money, Indonesia up by 24% and The Philippines
up by 22%. Korea, on the other hand, suffered from a dramatic drop in the prices
of key exports such as DRAMs and petrochemicals and the market declined by 26%
during the year. India managed to close virtually unchanged after a volatile
year.
Asian markets are expected to continue to see divergent performances during
1997. Strong earnings growth coupled with increased confidence in the transition
to Chinese rule should provide support to the Hong Kong market. Malaysia is also
expected to perform well on the back of strong earnings growth and an improving
economic outlook. However, on a bottom-up basis, a number of companies are
already trading at fair value. A recovery in Singapore equity prices is
dependent on a sustained rebound in the electronics industry. The recent
recovery in the market has been in response to signs of a bottoming out in US
electronics inventories and an improvement in the US book-to-bill ratio. The
problems in Thailand are expected to continue through the first half of the
year. There are some very real concerns about the quality of loans to property
developers and with the state of the economy on the whole. With respect to the
other smaller markets in Asia, prospects for Indonesia appear to be promising as
interest rates head lower. The Philippines is also expected to perform well in
the short-term although a widening current account deficit is of possible longer
21
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)
term concern. India should do well, particularly in the second half of the year,
as improving liquidity and rising earnings momentum combine to create a positive
environment for markets. In addition, current valuations are extremely
compelling and foreign investors are likely to increase their allocations to
this market during 1997. Korea, like Singapore, is dependent on a recovery in
the export sector. A significant improvement in the trade balance is a
prerequisite for a recovery in the stock market and this is not expected until
the second half of the year when the level of imports slows.
In summary, the prospects for Asian equity markets in 1997 are generally
promising. The investment style utilized in the Asian Tigers Fund is a
combination of a top-down approach to determine the appropriate country
allocation within Asia and rigorous fundamental analysis in order to identify
and evaluate sources of corporate earnings growth. As such, the Fund is
well-positioned to benefit from continued growth in companies operating in Asia.
TRUST CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Asian
Tigers Fund Trust Class from January 31, 1994 through December 31, 1996 as
compared with the growth of a $10,000 investment in the Morgan Stanley MSCI
Pacific (ex-Japan) Index and Lipper Pacific Ex Japan Funds Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Morgan Stanley Invested in Lipper Pacific
Asian Tigers MSCI Pacific (ex-Japan) Index Ex Japan Funds Average
01/31/94 $10,000 $10,000 $10,000
12/31/94 $ 9,450 $ 8,819 $ 8,580
12/31/95 $10,547 $ 9,962 $ 8,738
12/31/96 $12,081 $11,127 $ 9,709
</TABLE>
INVESTOR CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Asian
Tigers Fund Investor Class from January 31, 1994 through December 31, 1996 as
compared with the growth of a $10,000 investment in the Morgan Stanley MSCI
Pacific (ex-Japan) Index and Lipper Pacific Ex Japan Funds Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Morgan Stanley Invested in Lipper Pacific
Asian Tigers MSCI Pacific (ex-Japan) Index Ex Japan Funds Average
01/31/94 $ 9,550 $10,000 $10,000
12/31/94 $ 9,009 $ 8,819 $ 8,580
12/31/95 $10,017 $ 9,962 $ 8,738
12/31/96 $11,440 $11,127 $ 9,709
</TABLE>
Class of Shares One-Year Return Annualized Inception to Date
Trust 14.55% 6.70%
Investor 14.21% 6.45%
Investor w/load 9.09% 4.82%
FOR THE PERIOD ENDED DECEMBER 31, 1996. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
22
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
LATIN AMERICA EQUITY FUND
In 1996 Latin American equity markets had their best year since 1993. The
MSCI Latin America Free Index, the Fund's benchmark, rose 18.9% in USD. Most of
the performance was realized in the first half of the year (15.5%). In the
second half the markets only rose 3%. The Rembrandt Latin America Equity Fund
was introduced July 1, and its performance over the last two quarters of 1996
was 2.4%.
In 1997, Latin American economies could achieve GDP growth of around 4%,
compared to 3% in 1996 and no growth in 1995. Corporate earnings are expected to
reflect this momentum towards economic recovery. Valuation levels in terms of
price/earnings are approximately 10, which is low in a historical context.
Furthermore, inflation is following a downward trend to an average of 10%.
Despite these general trends, different dynamics are in place in individual
countries. Brazil, by far the largest country in the Fund's portfolio, is mainly
driven by economic reforms. The liberalization of the oil sector and
privatization of the telecommunications and electricity sector will drive the
market in 1997.
The Fund continues to be overweighted in Brazil and Peru, underweighted in
Mexico and has a more or less neutral position in Argentina and Chile. The Fund
has no investments in Colombia and Venezuela, but will consider these countries
in 1997.
TRUST CLASS
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Rembrandt Latin
America Equity Fund Trust Class from June 30, 1996, through December 31, 1996 as
compared with the growth of a $10,000 investment in the Morgan Stanley Emerging
Markets Latin America Free Index and the Lipper Latin American Funds Average.
The plot points used to draw the line graph were as follows:
<TABLE>
<S> <C> <C> <C>
Period Ended Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in Rembrandt Invested in Morgan Stanley Invested in Lipper
Latin American Equity Fund Emerging Markets Latin Latin American Funds Average
American Free Index
06/30/96 $10,000 $10,000 $10,000
12/31/96 $10,240 $10,396 $10,349
</TABLE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Rembrandt Latin America Equity Fund
Mortgan Stanley MSCI Emerging Markets Latin America Free Index
Lipper Latin America Funds Average
Annualized
Class of Shares Inception to Date Cumulative Inception to Date
Trust 4.76% 2.40%
FOR THE PERIOD ENDED DECEMBER 31, 1996. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
23
<PAGE>
REPORT OF INDEPENDENT AUDITORS
TRUSTEES AND SHAREHOLDERS
REMBRANDT FUNDS(REGISTRATION MARK)
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, Balanced Fund, Asian Tigers Fund, and Small Cap Fund and the schedules of
investments and statements of assets and liabilities of the International Fixed
Income Fund, and Latin America Equity Fund of Rembrandt Funds(REGISTRATION
MARK), which includes the Trust and Investor classes (the "Trust"), as of
December 31, 1996, 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
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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, 1996 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, International Fixed Income Fund,
Balanced Fund, Value Fund, Growth Fund, International Equity Fund, Small Cap
Fund, Asian Tigers Fund, and Latin America Equity Fund at December 31, 1996, 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 24, 1997
24
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
TREASURY MONEY MARKET FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
CASH EQUIVALENTS 5%
U.S. TREASURY OBLIGATIONS 95%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
=============================================================
U.S. TREASURY OBLIGATIONS -- 94.2%
U.S. TREASURY BILLS
4.930%, 01/02/97 $10,000 $ 9,999
4.560%, 01/09/97 3,000 2,994
4.580%, 01/09/97 17,000 16,986
4.970%, 01/09/97 5,000 4,994
4.940%, 01/16/97 5,000 4,990
4.970%, 01/16/97 10,000 9,994
4.540%, 01/16/97 3,000 2,980
5.010%, 01/23/97 3,000 2,991
4.660%, 01/23/97 12,000 11,966
5.010%, 01/23/97 3,000 2,991
4.900%, 02/06/97 5,000 4,975
U.S. TREASURY NOTES
8.000%, 01/15/97 15,000 15,016
7.500%, 01/31/97 20,000 20,036
6.750%, 02/28/97 5,000 5,012
6.875%, 02/28/97 20,000 20,053
6.625%, 03/31/97 15,000 15,049
8.500%, 05/15/97 1,500 1,517
6.375%, 06/30/97 5,000 5,026
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $157,569) 157,569
--------
MARKET
DESCRIPTION SHARES (000) VALUE (000)
=============================================================
CASH EQUIVALENT -- 4.9%
SEI Daily Income Trust
Treasury II Portfolio 8,275 $ 8,275
--------
TOTAL CASH EQUIVALENT
(Cost $8,275) 8,275
--------
TOTAL INVESTMENTS -- 99.1%
(Cost $165,844) 165,844
--------
OTHER ASSETS AND LIABILITIES -- 0.9%
Other Assets and Liabilities, Net 1,521
--------
NET ASSETS:
Portfolio Shares of the Trust Class (unlimited
authorization -- no par value)
based on 156,447,427 outstanding
shares of beneficial interest 156,447
Portfolio Shares of the Investor Class
(unlimited authorization -- no par value)
based on 10,910,639 outstanding shares of
beneficial interest 10,911
Accumulated net realized gain on investments 7
--------
TOTAL NET ASSETS-- 100.0% $167,365
========
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
========
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
25
<PAGE>
STATEMENT OF NET ASSETS
GOVERNMENT MONEY MARKET FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
Government Money Market Fund
REPURCHASE AGREEMENTS 28%
U.S. GOVERNMENT AGENCY OBLIGATIONS 72%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
============================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 71.9%
FFCB Discount Note
5.400%, 08/14/97 $ 5,000 $ 4,831
FFCB Note
5.500%, 05/01/97 5,000 4,999
FHLB Discount Notes
5.300%, 01/09/97 15,000 14,982
5.300%, 01/30/97 4,000 3,983
5.250%, 04/17/97 10,000 9,845
FHLB Notes
4.860%, 02/07/97 2,800 2,797
6.940%, 03/14/97 4,500 4,513
5.615%, 04/17/97 8,590 8,590
5.865%, 06/10/97 5,000 5,001
5.875%, 06/27/97 6,000 6,006
5.890%, 09/25/97 2,400 2,404
FHLMC Discount Notes
5.290%, 01/23/97 10,000 9,968
5.270%, 01/30/97 16,568 16,498
5.280%, 01/31/97 15,000 14,934
FHLMC Note
6.200%, 04/28/97 5,120 5,133
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
=============================================================
FNMA Note
4.970%, 03/10/97 $ 2,000 $ 1,998
FNMA MTN
5.640%, 09/03/97 2,745 2,746
5.400%, 12/05/97 5,000 4,994
FNMA Discount Notes
5.280%, 01/14/97 10,000 9,981
5.500%, 01/15/97 15,000 14,968
5.250%, 02/10/97 7,380 7,337
5.270%, 02/14/97 10,000 9,936
5.250%, 02/27/97 6,670 6,615
5.300%, 04/07/97 10,000 9,859
SLMA (A)
5.570%, 10/30/97 5,000 5,000
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $187,918) 187,918
--------
REPURCHASE AGREEMENTS -- 28.4%
Lehman Brothers
6.98%, dated 12/31/96,
matures 01/02/97, repurchase price
$31,237,000 (collateralized by
various U.S. Treasury Notes,
total par value $30,203,000,
6.50%-7.00%, 07/15/06-10/15/06,
market value: $31,837,000) 31,225 31,225
Nomura Securities
6.98%, dated 12/31/96,
matures 01/02/97, repurchase price
$42,982,000 (collateralized by various
FHLMC obligations, total par value
$40,163,000, 5.00%-11.50%,
01/01/98-12/01/26, and various
FNMA obligations, total par value
$34,615,000, 5.50%-11.00%,
12/01/98-12/01/26, market
value: $43,824,000) 42,965 42,965
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $74,190) 74,190
--------
TOTAL INVESTMENTS -- 100.3%
(Cost $262,108) 262,108
--------
OTHER ASSETS AND LIABILITIES -- (0.3%)
Other Assets and Liabilities, Net (623)
--------
26
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
DESCRIPTION VALUE (000)
=============================================================
NET ASSETS:
Portfolio Shares of Trust Class (unlimited
authorization -- no par value) based
on 256,364,220 outstanding shares of
beneficial interest $256,364
Portfolio Shares of Investor Class (unlimited
authorization -- no par value)
based on 5,093,246 outstanding shares
of beneficial interest 5,093
Accumulated net realized gain on investments 28
--------
TOTAL NET ASSETS-- 100.0% $261,485
========
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
========
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
(A) VARIABLE RATE INSTRUMENT. THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON DECEMBER 31, 1996. THE MATURITY DATE SHOWN IS THE
NEXT RESET DATE.
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
27
<PAGE>
STATEMENT OF NET ASSETS
MONEY MARKET FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
CERTIFICATES OF DEPOSIT 28%
BANK NOTES 4%
REPURCHASE AGREEMENTS 30%
COMMERCIAL PAPER 19%
U.S.GOVERNMENT AGENCY OBLIGATIONS 18%
CORPORATE BONDS 1%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
============================================================
BANK NOTES -- 3.8%
Bank of America
5.590%, 03/25/97 $ 10,000 $ 10,000
Harris Trust & Savings Bank
5.500%, 03/26/97 5,000 4,999
6.040%, 06/17/97 8,000 7,998
--------
TOTAL BANK NOTES
(Cost $22,997) 22,997
--------
CERTIFICATES OF DEPOSIT -- 28.1%
Canadian Imperial Bank of
Commerce (New York)
5.360%, 01/27/97 10,000 10,000
5.410%, 02/10/97 15,000 15,000
Commerz Bank (New York)
5.460%, 01/09/97 10,000 10,000
Deutsche Bank (New York)
5.600%, 04/02/97 15,000 15,004
5.570%, 12/10/97 10,000 9,995
Fifth Third Bank of Ohio
5.530%, 02/24/97 15,000 15,000
First Alabama Bank
5.400%, 01/07/97 15,000 15,000
5.560%, 03/04/97 10,000 10,000
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
=============================================================
Morgan Guaranty Bank Trust
5.380%, 02/04/97 $ 20,000 $ 20,000
National Westminster Bank
PLC (New York)
5.560%, 01/17/97 10,000 10,000
Rabobank Nederland Bank (New York)
5.560%, 04/04/97 20,000 20,004
5.500%, 12/05/97 5,000 4,994
Societe Generale Bank (New York)
5.550%, 02/06/97 13,500 13,500
--------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $168,497) 168,497
--------
COMMERCIAL PAPER -- 19.1%
Associates of North America
5.380%, 01/23/97 10,000 9,967
General Electric Capital
5.420%, 01/15/97 10,000 9,979
5.280%, 04/24/97 10,000 9,834
Golden Managers Acceptance
5.350%, 01/08/97 10,000 9,990
5.650%, 01/29/97 15,000 14,934
Household Finance
5.420%, 01/14/97 20,000 19,961
NationsBank
5.340%, 02/03/97 15,000 14,927
Norwest
5.300%, 02/05/97 10,000 9,949
Prudential Funding
5.380%, 01/13/97 15,000 14,973
--------
TOTAL COMMERCIAL PAPER
(Cost $114,514) 114,514
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 18.4%
FHLB Discount Note
5.300%, 01/30/97 10,000 9,957
FHLB Notes
6.940%, 03/14/97 10,000 10,028
5.615%, 04/17/97 11,000 11,000
5.890%, 09/25/97 5,000 5,009
FHLMC Discount Notes
5.420%, 02/25/97 10,000 9,917
5.420%, 02/26/97 20,000 19,831
FHLMC Note
5.470%, 04/01/97 5,000 4,999
28
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
============================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS -- (continued)
FNMA MTN
4.970%, 03/10/97 $ 10,000 $ 9,991
5.400%, 12/05/97 10,000 9,989
FNMA Discount Note
5.300%, 04/07/97 10,000 9,859
SLMA (A)
5.570%, 10/30/97 10,000 10,001
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $110,581) 110,581
--------
CORPORATE BOND -- 0.9%
Associates of North America
7.750%, 11/01/97 5,355 5,445
--------
TOTAL CORPORATE BOND
(Cost $5,445) 5,445
--------
REPURCHASE AGREEMENTS -- 29.6%
Lehman Brothers
7.02%, dated 12/31/96,
matures 01/02/97, repurchase
price $61,843,000 (collateralized
by U.S. Treasury Bond, par value
$58,180,000, 7.125%, 02/15/23,
total market value:
$63,025,000) 61,820 61,820
Nomura Securities
7.02%, dated 12/31/96,
matures 01/02/97, repurchase
price $115,950,000
(collateralized by various
FHLMC obligations, par value
$108,302,000, 5.50%-10.00%,
02/01/97-12/01/26,
and various FNMA obligations,
par value $81,631,000,
5.50%-10.50%, 12/01/01-12/01/26,
market value: $118,223,000) 115,905 115,905
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $177,725) 177,725
--------
TOTAL INVESTMENTS -- 99.9%
(Cost $599,759) 599,759
--------
OTHER ASSETS AND LIABILITIES -- 0.1%
Other Assets and Liabilities, Net 422
--------
DESCRIPTION VALUE (000)
============================================================
NET ASSETS:
Portfolio Shares of Trust Class
(unlimited authorization -- no
par value) based on 598,711,140
outstanding shares of beneficial
interest $598,711
Portfolio Shares of Investor Class
(unlimited authorization --
no par value) based on
1,465,949 outstanding shares
of beneficial interest 1,466
Accumulated net realized gain on
investments 4
--------
TOTAL NET ASSETS-- 100.0% $600,181
========
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
========
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
(A) VARIABLE RATE INSTRUMENT. THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON DECEMBER 31, 1996. THE MATURITY DATE SHOWN IS THE
NEXT RESET DATE.
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.
29
<PAGE>
STATEMENT OF NET ASSETS
TAX-EXEMPT MONEY MARKET FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
MUNICIPAL BONDS 93%
CASH EQUIVALENTS 7%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
============================================================
MUNICIPAL BONDS -- 92.6%
ALABAMA -- 4.0%
Columbia, Pollution Control
Revenue, Alabama Power
Project, Ser C, VRDN (A) (B)
4.650%, 05/01/22 $4,600 $ 4,600
Montgomery, Alabama Industrial
Development Board Revenue
Refunding Bond, General Electric
Project, Ser 1990, TECP
3.550%, 01/06/97 3,000 3,000
--------
7,600
--------
ARIZONA -- 5.8%
Coconino County, Arizona Pollution
Control Revenue, Nevada Power,
Ser E, VRDN (A) (C)
4.150%, 10/01/22 3,000 3,000
Salt River Agricultural Improvement
Project, TECP
3.500%, 01/08/97 2,000 2,000
3.550%, 01/21/97 6,000 6,000
--------
11,000
--------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
===========================================================
COLORADO -- 2.9%
State TRAN
4.500%, 06/27/97 $5,500 $ 5,517
--------
FLORIDA -- 6.6%
Florida Municipal Power Agency,
Initial Pooled Loan Project,
Ser A, TECP
3.500%, 01/28/97 6,445 6,445
Jacksonville Electric Authority,
Ser D-3, TECP
3.600%, 01/09/97 2,250 2,250
Sunshine State Governmental
Financing Commission,
Ser 1986, TECP
3.450%, 02/06/97 3,850 3,850
--------
12,545
--------
GEORGIA -- 6.0%
Burke County Development
Authority, Pollution Control
Revenue, Georgia Power Company
Plant Vogtle Project,
VRDN (A) (B)
4.650%, 07/01/24 4,600 4,600
Monroe County Development
Authority, Pollution Control
Revenue, Georgia Power Company
Plant Scherer Project,
VRDN (A) (B)
4.650%, 07/01/25 2,300 2,300
Monroe County Development
Authority, Pollution Control
Revenue, Gulf Power Plant
Project, Ser 2, VRDN (A)(B)
4.650%, 09/01/24 4,500 4,500
--------
11,400
--------
IDAHO -- 4.0%
State TAN
4.500%, 06/30/97 7,500 7,525
--------
ILLINOIS -- 0.9%
Cook County, Catholic Charities
Housing Development,
Ser A, VRDN (A) (B)
4.200%, 01/01/28 1,000 1,000
30
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
============================================================
ILLINOIS -- (continued)
Development Finance Authority,
Catholic Charities Housing
Development, VRDN (A) (B)
4.200%, 01/01/28 $ 500 $ 500
Development Finance Authority,
Saint Xavier University Project,
VRDN (A) (B)
4.200%, 10/01/12 180 180
--------
1,680
--------
INDIANA -- 3.6%
Sullivan, National Rural Utilities
Hoosier Energy Rural Electric
Project, TECP
3.600%, 01/07/97 2,200 2,200
3.600%, 01/22/97 2,100 2,100
Indianapolis, Local Public
Improvement Bond, Ser D, GO
4.250%, 01/09/97 2,600 2,600
--------
6,900
--------
KANSAS -- 1.3%
Burlington, Pollution Control Revenue,
Kansas City Power & Light
Project, TECP
3.550%, 03/05/97 2,500 2,500
--------
KENTUCKY -- 3.7%
Jefferson County, Pollution Control
Revenue, Louisville Gas &
Electric Project, TECP
3.650%, 01/10/97 3,000 3,000
Jefferson County, Pollution Control
Revenue, Louisville Gas & Electric
Project, Ser 1996-A, TECP
3.650%, 01/03/97 4,000 4,000
--------
7,000
--------
LOUISIANA -- 4.1%
Jefferson Parish, Hospital Service
District No. 2, VRDN,
(FGIC) (A) (B)
4.100%, 12/01/15 7,800 7,800
--------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
============================================================
MARYLAND -- 2.2%
Health & Higher Education,
Pooled Loan Program Ser B,
VRDN (A) (B)
4.250%, 04/01/35 $4,100 $ 4,100
--------
MINNESOTA -- 8.4%
Becker, Pollution Control Revenue,
Northern States Power Project,
Ser 1993, TECP
3.400%, 02/19/97 8,000 8,000
University of Minnesota,
Board of Regents, TECP
3.500%, 01/29/97 8,075 8,075
--------
16,075
--------
MISSISSIPPI -- 4.9%
Hinds County, Urban Renewal,
Physicians Office Building
Group, VRDN (A) (B) (C)
4.300%, 01/01/07 910 910
Jackson County, Chevron USA
Project, Ser 93, VRDN, (A)(B)
4.900%, 06/01/23 8,500 8,500
--------
9,410
--------
MISSOURI -- 3.4%
Health & Educational Facilities
Authority, Washington
University Project, Ser A,
VRDN (A) (B) (C)
4.950%, 09/01/30 6,500 6,500
--------
NEBRASKA -- 3.9%
Omaha Public Power District, TECP
3.450%, 01/15/97 7,460 7,460
--------
NEVADA -- 1.6%
Clark County, Industrial
Development Revenue, Ser C,
VRDN (A) (B)
4.150%, 10/01/30 3,000 3,000
--------
NEW YORK -- 4.1%
New York City, GO, Ser B4,
VRDN (A) (B)
4.500%, 08/15/23 1,700 1,700
31
<PAGE>
STATEMENT OF NET ASSETS
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
============================================================
NEW YORK -- (continued)
New York City TAN
4.500%, 02/12/97 $3,000 $ 3,003
New York City, GO, VRDN,
Ser B (A)(C)
4.500%, 08/15/21 1,000 1,000
New York, New York Public
Improvements Project, GO,
Ser 93 A-4, VRDN (A)(C)
4.950%, 08/01/21 1,100 1,100
New York City, GO, Ser B,
VRDN (FGIC) (A)
4.500%, 10/01/21 1,000 1,000
--------
7,803
--------
OHIO -- 1.6%
Toledo-Lucas, Port Authority,
CSX Transportation Project, TECP
3.450%, 02/04/97 3,100 3,100
--------
PENNSYLVANIA -- 1.6%
State TAN
4.500%, 06/30/97 3,000 3,011
--------
RHODE ISLAND -- 3.2%
State TAN
4.500%, 06/30/97 6,000 6,017
--------
SOUTH CAROLINA -- 1.0%
York County, Saluda River Project,
Ser E-2, Optional put on
02/15/97 @ par
3.650%, 02/15/97 2,000 2,000
--------
TEXAS -- 7.7%
Austin, Travis & Williamson,
Combined Utility System Project,
TECP
3.550%, 01/06/97 4,500 4,500
Harris County, TAN
4.500%, 02/28/97 2,000 2,002
Higher Education Authority,
VRDN (FGIC) (A) (B)
4.100%, 12/01/25 1,095 1,095
FACE AMOUNT
DESCRIPTION (000) VALUE (000)
============================================================
Higher Education Authority,
Ser B, VRDN (FGIC) (A) (B)
4.100%, 12/01/25 $1,000 $ 1,000
Houston TRAN
4.500%, 06/30/97 3,000 3,008
Texas State TRAN
4.750%, 08/29/97 3,000 3,016
--------
14,621
--------
VIRGINIA -- 3.1%
Peninsula Port Authority, Dominion
Terminal Association Project,
Ser 1987-B, TECP
3.400%, 01/23/97 6,000 6,000
--------
WYOMING -- 3.0%
Campbell County, Pollution Control
Revenue, Pacificorp Project,
Ser 1988, TECP
3.500%, 02/05/97 4,000 4,000
Sweetwater County, RB, VRDN (A)
4.700%, 01/01/14 1,700 1,700
--------
5,700
--------
TOTAL MUNICIPAL BONDS
(Cost $176,264) 176,264
--------
CASH EQUIVALENTS -- 7.1%
Dreyfus Tax Exempt Cash
Management Fund 8,605 8,605
SEI Tax Exempt Trust Institutional
Tax Free Portfolio 4,899 4,899
--------
TOTAL CASH EQUIVALENTS
(Cost $13,504) 13,504
--------
TOTAL INVESTMENTS -- 99.7%
(Cost $189,768) 189,768
--------
OTHER ASSETS AND LIABILITIES -- 0.3%
Other Assets and Liabilities, Net 668
--------
32
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
DESCRIPTION VALUE (000)
============================================================
NET ASSETS:
Portfolio Shares of Trust Class
(unlimited authorization -- no
par value) based on 187,633,332
outstanding shares of beneficial
interest $ 187,633
Portfolio Shares of Investor Class
(unlimited authorization -- no
par value) based on 2,807,188
outstanding shares of beneficial
interest 2,807
Accumulated net realized loss on investments (4)
--------
TOTAL NET ASSETS -- 100.0% $190,436
========
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
========
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
(A) VARIABLE RATE INSTRUMENT. THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON DECEMBER 31, 1996. THE MATURITY DATE SHOWN IS THE
NEXT RESET DATE.
(B) PUT AND DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE NEXT RESET
DATE.
(C) SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT OR OTHER CREDIT
SUPPORT.
GO -- GENERAL OBLIGATION
RB -- REVENUE BOND
SER -- SERIES
TAN -- TAX ANTICIPATION NOTE
TECP -- TAX EXEMPT COMMERCIAL PAPER
TRAN -- TAX & 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 -- FINANCIAL GUARANTY INSURANCE COMPANY
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
33
<PAGE>
STATEMENT OF NET ASSETS
FIXED INCOME FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
U.S. GOVERNMENT AGENCY OBLIGATIONS 7%
FOREIGN CORPORATE OBLIGATIONS 7%
CORPORATE OBLIGATIONS 13%
ASSET-BACKED SECURITIES 9%
REPURCHASE AGREEMENTS 2%
U.S. TREASURY OBLIGATIONS 30%
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS 32%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
============================================================
U.S. TREASURY OBLIGATIONS -- 29.9%
U.S. Treasury Bond
7.250%, 05/15/16 $ 6,750 $ 7,129
U.S. Treasury Notes
6.250%, 06/30/98 14,950 15,049
6.250%, 05/31/00 10,225 10,268
7.500%, 11/15/01 3,925 4,132
7.250%, 05/15/04 620 652
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $36,769) 37,230
--------
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS -- 31.7%
FHLMC Gold
6.500%, 07/01/03 2,110 2,093
FHLMC REMIC
6.000%, 03/15/08 1,805 1,770
3.500%, 11/15/21 3,175 2,554
FHLMC
6.500%, 03/01/24 3,577 3,420
7.000%, 06/01/24 2,879 2,824
6.000%, 04/01/26 3,974 3,695
FNMA REMIC
7.000%, 08/25/22 3,654 3,659
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
============================================================
FNMA
6.500%, 03/01/01 $ 1,397 $ 1,385
8.000%, 03/01/02 2,869 2,939
8.000%, 04/01/10 1,231 1,266
6.000%, 04/01/11 3,840 3,693
6.500%, 10/01/23 1,896 1,818
GNMA
9.000%, 01/15/17 2,422 2,551
8.000%, 06/15/23 826 843
8.000%, 08/15/24 1,752 1,789
7.250%, 07/15/30 3,186 3,154
--------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS
(Cost $38,901) 39,453
--------
ASSET-BACKED SECURITIES -- 8.7%
CIT Recreational Vehicle Owner Trust,
Ser 1996-A, Cl A
5.400%, 12/15/11 2,054 2,022
Contimortgage Home Equity
Loan Trust, Ser 1996-2, Cl A6
7.250%, 06/15/11 1,860 1,881
General Electric Capital Mortgage
Services, Ser 1996-H3, Cl A-4
7.485%, 09/25/26 2,520 2,563
Residential Funding Mortgage
Securities I, Ser 1994-S1, CL A-7
6.574%, 01/25/24 2,515 2,478
The Money Store Home Equity Trust,
Ser 1993-C, Cl A-3
5.750%, 10/15/22 1,941 1,887
--------
TOTAL ASSET-BACKED SECURITIES
(Cost $10,823) 10,831
--------
CORPORATE OBLIGATIONS -- 13.3%
Aetna Services
7.125%, 08/15/06 2,385 2,397
BHP Finance USA
6.420%, 03/01/26 2,560 2,534
Citicorp
7.125%, 05/15/06 2,230 2,241
Lincoln National
7.250%, 05/15/05 1,780 1,793
News America Holdings
10.125%, 10/15/12 2,185 2,480
34
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
===========================================================
CORPORATE OBLIGATIONS -- (continued)
Philip Morris
7.625%, 05/15/02 $ 2,450 $ 2,527
TCI Communications
8.000%, 08/01/05 2,600 2,542
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $16,458) 16,514
--------
FOREIGN CORPORATE OBLIGATIONS -- 7.2%
Poland Non-United States Registered
3.000%, 10/27/24 (A) 4,460 2,520
Quebec Province
7.500%, 07/15/23 2,625 2,609
Republic of Indonesia
7.750%, 08/01/06 3,755 3,802
--------
TOTAL FOREIGN CORPORATE OBLIGATIONS
(Cost $8,570) 8,931
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 6.5%
FHLB
7.260%, 09/06/01 1,025 1,060
FHLMC
5.990%, 03/06/01 4,800 4,690
FHLMC MTN
5.800%, 02/22/06 2,500 2,354
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $7,970) 8,104
--------
REPURCHASE AGREEMENT -- 2.4%
Nomura Securities
7.20%, dated 12/31/96,
matures 01/02/97, repurchase
price $2,913,000
(collateralized by various
FHLMC obligations, par value
$1,263,000, 6.50%,
01/01/04-04/01/26, and
various FNMA obligations, par
value $2,015,000, 6.50%-8.50%,
06/01/24-05/01/25, market
value: $2,970,000) 2,912 2,912
--------
TOTAL REPURCHASE AGREEMENT
(Cost $2,912) 2,912
--------
TOTAL INVESTMENTS -- 99.7%
(Cost $122,403) 123,975
--------
MARKET
DESCRIPTION VALUE (000)
==========================================================
OTHER ASSETS AND LIABILITIES -- 0.3%
Other Assets and Liabilities, Net $ 414
--------
NET ASSETS:
Portfolio Shares of Trust Class
(unlimited authorization -- no
par value) based on 12,322,430
outstanding shares of beneficial
interest 125,600
Portfolio Shares of Investor Class (unlimited
authorization -- no par value) based on
45,488 outstanding shares of beneficial
interest 471
Accumulated net realized loss on investments (3,254)
Net unrealized appreciation on investments 1,572
--------
TOTAL NET ASSETS-- 100.0% $124,389
========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE -- TRUST CLASS $10.06
========
NET ASSET VALUE AND REDEMPTION
PRICE PER SHARE-- INVESTOR CLASS $10.09
========
MAXIMUM OFFERING PRICE PER SHARE --
INVESTOR CLASS ($10.09 (DIVIDE) 95.5%) $10.57
========
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
(A) STEP BOND--THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE IN
EFFECT ON DECEMBER 31, 1996. THE INITIAL COUPON ON A STEP BOND CHANGES ON A
SPECIFIC DATE, TO A PREDETERMINED HIGHER RATE.
ARM -- ADJUSTABLE RATE MORTGAGE
CL -- CLASS
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SER -- SERIES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
35
<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:
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED OBLIGATIONS 36%
REPURCHASE AGREEMENTS 8%
U.S. GOVERNMENT AGENCY OBLIGATIONS 20%
U.S. TREASURY OBLIGATION 36%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
============================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 21.2%
FFCB
8.650%, 10/01/99 $1,650 $ 1,755
FHLB
6.525%, 07/11/97 2,500 2,513
FHLMC
5.990%, 03/06/01 2,650 2,589
FNMA
8.450%, 07/12/99 5,000 5,272
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $12,017) 12,129
--------
U.S. TREASURY OBLIGATIONS -- 38.0%
U.S. Treasury Notes
6.250%, 06/30/98 5,125 5,159
5.500%, 11/15/98 9,900 9,833
7.500%, 02/15/05 2,500 2,672
6.500%, 10/15/06 4,000 4,020
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $21,600) 21,684
--------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
============================================================
U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS -- 38.4%
FHLMC
6.000%, 04/01/26 $3,159 $ 2,938
FHLMC Gold
6.500%, 03/01/26 3,503 3,349
7.000%, 04/01/26 2,735 2,683
FHLMC REMIC
6.500%, 03/15/02 4,414 4,400
FNMA
6.500%, 06/01/03 2,106 2,087
8.000%, 07/01/11 1,942 1,997
FNMA REMIC
7.000%, 08/25/22 3,125 3,129
GNMA
7.250%, 07/15/30 1,276 1,264
Veterans Affairs
7.750%, 02/15/97 75 76
--------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE-BACKED
OBLIGATIONS
(Cost $21,602) 21,923
--------
REPURCHASE AGREEMENT -- 9.1%
JP Morgan
6.80%, dated 12/31/96, matures
01/02/97, repurchase price
$5,222,000, (collateralized
by FNMA obligation, total
par value $5,519,000, 7.00%,
05/01/26, market value:
$5,324,000) 5,220 5,220
--------
TOTAL REPURCHASE AGREEMENT
(Cost $5,220) 5,220
--------
TOTAL INVESTMENTS -- 106.7%
(Cost $60,439) 60,956
--------
OTHER ASSETS AND LIABILITIES -- (6.7%)
Other Assets and Liabilities, Net (3,810)
--------
36
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
DESCRIPTION VALUE (000)
===============================================================
NET ASSETS:
Portfolio Shares of Trust Class
(unlimited authorization --
no par value) based on 5,773,453
outstanding shares of beneficial
interest $60,031
Portfolio Shares of Investor Class (unlimited
authorization -- no par value) based on
25,495 outstanding shares of beneficial interest 119
Distributions in excess of net investment income (1)
Accumulated net realized loss on investments (3,520)
Net unrealized appreciation on investments 517
-------
TOTAL NET ASSETS-- 100.0% $57,146
=======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE -- TRUST CLASS $9.85
=======
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- INVESTOR CLASS $9.85
=======
MAXIMUM OFFERING PRICE PER SHARE --
INVESTOR CLASS ($9.85 (DIVIDE) 95.5%) $10.31
=======
- --------------------------------------------------------------------------------
(1)THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF
TOTAL NET ASSETS.
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
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
37
<PAGE>
STATEMENT OF NET ASSETS
TAX-EXEMPT FIXED INCOME FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
MUNICPAL BONDS 98%
CASH EQUIVALENTS 2%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
=================================================================
MUNICIPAL BONDS -- 97.0%
ARKANSAS -- 5.8%
Jefferson County, Pollution Control
Revenue, Arkansas Power & Light
Company Project, GO (AMBAC)
6.300%, 06/01/18 $1,000 $ 1,075
State Development Financial
Authority, Wastewater System
Revenue, RB
5.850%, 12/01/19 1,250 1,275
-------
2,350
-------
CALIFORNIA -- 7.6%
Los Angeles County Public Leasing, RB
5.125%, 09/01/08 2,000 1,992
South County, Regional Wastewater
Authority, Wastewater Facilities
Project, Ser A, GO (FGIC)
5.900%, 08/01/06 1,025 1,090
-------
3,082
-------
COLORADO -- 5.0%
Denver, City & County Airport
Revenue, Ser A, RB (MBIA)
5.700%, 11/15/25 2,000 2,000
-------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
=================================================================
ILLINOIS -- 12.4%
Chicago Metropolitan Water
Reclamation District, GO
5.500%, 12/01/12 $1,000 $ 1,001
Development Finance Authority,
Catholic Charities Housing
Development, RB
5.500%, 01/01/05 3,000 2,959
Housing Development Authority,
Multi-Family Housing,
Ser 1991 A, GO
7.900%, 07/01/99 1,000 1,060
-------
5,020
-------
INDIANA -- 11.5%
Indiana State Eagle-Union Community
School Building First Mortgage, RB
5.900%, 01/15/18 1,500 1,513
Indiana State Hammond Multi-School
Building, RB (MBIA)
5.800%, 01/15/15 1,000 1,010
Petersburg, Pollution Control
Revenue, Indianapolis Power &
Light Project, RB
5.500%, 10/01/23 2,250 2,143
-------
4,666
-------
LOUISIANA -- 1.8%
New Orleans, Ernest N. Morial Exhibit
Hall Project, Ser C, GO (MBIA)
5.600%, 07/15/25 750 734
-------
MISSISSIPPI -- 6.8%
Hospital Equipment & Facilities
Authority, Baptist Medical Center
Project, RB (MBIA)
6.500%, 05/01/10 2,500 2,728
-------
MISSOURI -- 5.6%
Health & Educational Facilities
Authority, BJC Health Systems
Project, Ser A, RB
6.750%, 05/15/10 2,000 2,247
-------
NEVADA -- 5.2%
Clark County, Refunding & Transit
Improvement, RB (MBIA)
6.200%, 06/01/19 2,000 2,090
-------
38
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
FACE AMOUNT MARKET
DESCRIPTION /SHARES (000) VALUE (000)
====================================================================
NEW YORK -- 5.0%
State Highway & Bridge
Improvement Fund, RB (MBIA)
5.600%, 04/01/10 $2,000 $ 2,032
-------
OKLAHOMA -- 5.2%
Tulsa County, Public Facilities
Refinancing Bond, GO
6.600%, 11/01/08 1,000 1,078
Tulsa Industrial Authority, St. Johns
Medical Center Project, RB
6.250%, 02/15/17 1,000 1,034
-------
2,112
-------
TEXAS -- 14.9%
Arlington Unlimited GO
5.750%, 08/15/14 1,000 1,009
East Texas Criminal Justice Facilities,
Financing Corporation Mortgage
Revenue, City of Henderson
Project, RB (AMBAC)
5.750%, 11/01/09 1,820 1,861
Victoria County Hospital,
RB (AMBAC)
6.250%, 01/01/16 1,000 1,050
Wylie Independent School
District, GO
7.000%, 08/15/24 1,800 2,102
-------
6,022
-------
VIRGINIA -- 7.8%
State Housing Development
Authority, Ser H, RB
6.450%, 01/01/12 3,000 3,139
-------
WASHINGTON -- 2.4%
Washington State Public Power
Supply System Nuclear Project #1,
Ser C, RB (AMBAC)
5.500%, 07/01/10 1,000 989
-------
TOTAL MUNICIPAL BONDS
(Cost $38,119) 39,211
-------
CASH EQUIVALENTS -- 1.9%
Dreyfus Tax Exempt Cash
Management Fund 1 1
MARKET
DESCRIPTION SHARES (000) VALUE (000)
====================================================================
SEI Tax Exempt Trust Institutional
Tax Free Portfolio 766 $ 766
-------
TOTAL CASH EQUIVALENTS
(Cost $767) 767
-------
TOTAL INVESTMENTS -- 98.9%
(Cost $38,886) 39,978
-------
OTHER ASSETS AND LIABILITIES -- 1.1%
Other Assets and Liabilities, Net 458
-------
NET ASSETS:
Portfolio Shares of Trust Class (unlimited
authorization -- no par value) based on
3,978,697 outstanding shares of beneficial interest 41,059
Portfolio Shares of Investor Class (unlimited
authorization -- no par value) based on
68,258 outstanding shares of beneficial interest 689
Distributions in excess of net investment income (2)
Accumulated net realized loss on investments (2,402)
Net unrealized appreciation on investments 1,092
-------
TOTAL NET ASSETS-- 100.0% $40,436
=======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE -- TRUST CLASS $9.99
=======
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- INVESTOR CLASS $9.97
=======
MAXIMUM OFFERING PRICE PER SHARE --
INVESTOR CLASS ($9.97 (DIVIDE) 95.5%) $10.44
=======
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
BAN -- BOND ANTICIPATION NOTE
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 CORPORATION
BIG -- BOND INVESTORS GUARANTY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
MBIA -- MUNICIPAL BOND INVESTORS ASSURANCE
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
39
<PAGE>
SCHEDULE OF INVESTMENTS
INTERNATIONAL FIXED INCOME FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
EUROPEAN CURRENCY UNIT 5%
SPAIN 6%
NETHERLANDS 6%
ITALY 6%
DENMARK 6%
CANADA 6%
OTHER 5%
JAPAN 23%
UNITED KINGDOM 17%
GERMANY 20%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE MARKET
DESCRIPTION AMOUNT (000) (2) VALUE (000)
=====================================================================
FOREIGN BONDS -- 78.4%
AUSTRALIA -- 1.9%
Australian Government
10.000%, 10/15/07 350 $ 329
-------
CANADA -- 4.8%
Government of Canada
8.750%, 12/01/05 1,000 849
-------
DENMARK -- 4.5%
Kingdom of Denmark
7.000%, 12/15/04 4,500 796
-------
EUROPEAN CURRENCY UNIT -- 4.0%
French Government Bond
6.000%, 04/25/04 550 701
-------
FRANCE -- 2.7%
Societe Nationale des Chemin
8.875%, 08/11/23 2,000 474
-------
GERMANY -- 15.4%
Federal Republic of Germany
8.375%, 05/21/01 2,000 1,489
6.250%, 01/04/24 2,000 1,233
-------
2,722
-------
FACE MARKET
DESCRIPTION AMOUNT (000) (2) VALUE (000)
=====================================================================
ITALY -- 4.7%
Republic of Italy
8.500%, 04/01/99 1,200,000 $ 825
-------
JAPAN -- 18.2%
Asian Development Bank
3.125%, 06/29/05 85,000 762
Austrian Republic Bond
4.500%, 09/28/05 70,000 694
Export-Import Bank
2.875%, 07/28/05 40,000 352
Japan Government Bond
3.800%, 09/20/16 80,000 741
World Bank
4.500%, 06/20/00 70,000 672
-------
3,221
-------
NETHERLANDS -- 4.5%
Netherlands Kingdom
8.250%, 06/15/02 1,200 804
-------
SPAIN -- 4.5%
Kingdom of Spain
8.300%, 12/15/98 100,000 807
-------
UNITED KINGDOM -- 13.2%
United Kingdom Treasury
10.000%, 09/08/03 1,200 2,330
-------
TOTAL FOREIGN BONDS
(Cost $13,315) 13,858
-------
TOTAL INVESTMENTS -- 78.4% OF NET ASSETS
(Cost $13,315) $13,858
=======
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS IN BONDS AS A PERCENTAGE OF THE
TOTAL VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A SCHEDULE OF
INVESTMENTS. THE SCHEDULE OF INVESTMENTS PRESENTS THE VALUE OF INVESTMENTS
AS A PERCENTAGE OF TOTAL NET ASSETS.
(2) IN LOCAL CURRENCY.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
40
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
BALANCED FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
FIXED INCOME SECURITIES 30%
FOREIGN COMMON STOCKS 16%
CASH EQUIVALENTS 3%
DOMESTIC COMMON STOCKS 51%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
=================================================================
DOMESTIC COMMON STOCK -- 50.8%
BASIC MATERIALS -- 3.7%
Dow Chemical 3,300 $ 259
E.I. duPont de Nemours 3,200 302
Engelhard 6,000 115
Freeport-Mcmoran Copper & Gold, Cl B 5,700 170
International Flavors & Fragrances 4,200 189
International Paper 1,600 65
Phelps Dodge 1,900 128
Potlatch 2,700 116
PPG Industries 1,800 101
RPM 8,700 148
USX-U.S. Steel Group 5,000 157
Weyerhaeuser 3,300 156
Witco Chemical 4,300 131
Worthington Industries 6,600 120
-------
2,157
-------
CAPITAL GOODS -- 5.4%
AMP 3,900 150
Avery Dennison 4,400 156
Boeing 2,600 277
MARKET
DESCRIPTION SHARES VALUE (000)
=================================================================
Browning-Ferris Industries 5,900 $ 155
Caterpillar 2,200 166
Crown Cork & Seal 3,500 190
Emerson Electric 2,000 193
General Electric 9,700 959
Johnson Controls 500 41
Keystone International 8,500 171
Minnesota Mining & Manufacturing 2,700 224
Modern Controls 8,800 92
National Service Industries 3,800 142
Pall 1,800 46
Sensormatic Electronics 6,200 104
Timken 1,600 73
-------
3,139
-------
COMMUNICATION SERVICES -- 3.4%
AT&T 9,000 391
Alltel 4,500 141
Ameritech 4,300 261
Bell Atlantic 3,700 240
Bellsouth 5,400 218
GTE 7,600 346
SBC Telecommunications 3,300 171
US West 6,100 197
-------
1,965
-------
CONSUMER CYCLICALS -- 6.3%
Acnielson Corp* 2,166 33
Chrysler 8,400 277
Cognizant 6,500 214
Dun & Bradstreet 6,500 154
Duracell International 3,200 224
Eastman Kodak 2,700 217
Echlin 4,700 149
Family Dollar Stores 4,200 86
Ford Motor 11,100 354
Gannett 700 52
H & R Block 5,700 165
J.C. Penney 4,200 205
Jostens 4,400 93
Masco 3,500 126
McGraw-Hill 1,900 88
Modine Manufacturing 3,900 104
Ogden 8,300 156
Reader's Digest Assn., Cl A 4,600 185
Sotheby's Holdings, Cl A 8,330 155
41
<PAGE>
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
================================================================
VF 800 $ 54
WD-40 2,600 133
Wal-Mart Stores 12,400 284
Whirlpool 1,600 75
Xerox 1,700 89
-------
3,672
-------
CONSUMER STAPLES -- 6.9%
American Brands 4,000 198
Automatic Data Processing 1,600 69
Coca-Cola 14,600 768
Deluxe 4,100 134
Flowers Industries 7,380 159
H.J. Heinz 5,900 211
Kelly Services, Cl A 4,000 108
McDonald's 3,800 172
PepsiCo 11,100 325
Philip Morris 5,700 642
Procter & Gamble 4,400 473
Sara Lee 4,100 153
Tambrands 3,400 139
UST 5,700 185
Walt Disney 3,700 258
-------
3,994
-------
ENERGY -- 4.2%
Amoco 3,700 298
Atlantic Richfield 2,000 265
Chevron 4,500 292
Exxon 6,700 657
Halliburton 1,300 78
Mobil 2,800 342
Occidental Petroleum 7,600 178
Phillips Petroleum 4,200 186
Texaco 1,800 177
-------
2,473
-------
FINANCIAL -- 7.8%
American Express 2,900 164
American General 1,900 78
American International Group 2,500 271
Aon 1,500 93
Banc One 5,800 249
Bank of New York 2,200 74
Bankers Trust New York 1,800 155
Beneficial 2,700 171
MARKET
DESCRIPTION SHARES VALUE (000)
================================================================
Boatmen's Bancshares 2,100 $ 135
Chase Manhattan Bank 3,300 294
Citicorp 2,700 278
CoreStates 4,000 207
First American Bank 1,800 108
Fleet Financial Group 3,600 180
FNMA 8,000 298
Hartford Steam Boiler Inspection
& Insurance 7,700 357
J.P. Morgan 1,000 98
KeyCorp 3,600 182
Lincoln National 2,500 131
Marsh & Mclennan 1,800 187
MBNA 4,900 203
Mellon Bank 3,200 227
NationsBank 1,800 176
Norwest 4,900 213
-------
4,529
-------
HEALTH CARE -- 5.7%
Abbott Labs 5,500 279
American Home Products 4,900 287
Baxter International 4,000 164
Bristol-Myers Squibb 3,100 337
Columbia/HCA Healthcare 3,600 147
Eli Lilly 3,700 270
Johnson & Johnson 8,800 438
Medtronic 1,200 82
Merck 7,800 618
Pfizer 3,800 315
Pharmacia & Upjohn 5,800 230
Schering Plough 2,000 129
-------
3,296
-------
REAL ESTATE INVESTMENT TRUST -- 0.4%
Merry Land & Investment 9,600 206
-------
TECHNOLOGY -- 3.4%
Hewlett Packard 5,800 291
IBM 2,900 438
Intel 4,400 576
Lucent Technologies 3,013 139
Motorola 3,800 233
Raytheon 2,600 125
Texas Instruments 3,300 210
-------
2,012
-------
42
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
================================================================
TRANSPORTATION -- 0.3%
Illinois Central 2,900 $ 93
Norfolk Southern 1,300 114
-------
207
-------
UTILITIES -- 3.3%
American Electric Power 4,600 189
Baltimore Gas & Electric 6,100 163
Boston Edison 5,900 159
Central & South West 11,300 290
Consolidated Natural Gas 2,300 127
Enron 3,500 151
Nicor 2,600 93
Southern 10,200 231
Utilicorp United 13,500 364
Wisconsin Energy 6,100 164
-------
1,931
-------
TOTAL DOMESTIC COMMON STOCK
(Cost $24,500) 29,581
-------
FOREIGN COMMON STOCK -- 16.1%
BASIC MATERIALS -- 2.2%
Akzo N V 3,000 202
Broken Hill ADR 6,000 169
Canadian Pacific Ltd 8,900 236
Fletcher Challenge Building ADR 1,975 60
Fletcher Challenge Paper-ADR 3,950 81
Millenium Chemicals 849 15
Norsk Hydro A.S. ADR 3,700 198
Pacific Dunlop ADR 11,800 118
PT Tri Polyta Indonesia ADR 7,800 49
Rhone-Poulenc S.A. ADR 4,300 146
-------
1,274
-------
CAPITAL GOODS -- 1.4%
ABB AB-Sponsored ADR 1,800 201
Canon ADR 1,900 209
Empresas ICA S.A. ADR 4,900 72
Hanson PLC ADR 11,900 80
Kubota ADR 400 38
Madeco S.A. ADR 5,700 138
Maderas y Sinteticos S.A. ADR 7,500 105
-------
843
-------
MARKET
DESCRIPTION SHARES VALUE (000)
================================================================
COMMUNICATION SERVICES -- 1.1%
Cable & Wireless PLC ADR 7,500 $ 185
Hong Kong Telecom ADR 8,100 132
Telefonica de Espana ADR 3,200 222
Telefonos de Mexico SA ADR 3,700 122
-------
661
-------
CONSUMER STAPLES -- 2.1%
Bass PLC ADR 7,700 214
Buenos Aires Embotellado 4,500 17
Cadbury Schweppes PLC ADR 5,600 191
Imperial Tobacco Group* 2,975 38
Kirin Brewery ADR 1,300 128
Nestle SA ADR 4,000 213
Panamerican Beverage, Cl A 3,400 159
Unilever NV 1,600 280
-------
1,240
-------
CONSUMER CYCLICALS -- 2.8%
Coles Myer Limited ADR 4,000 132
Daimler Benz ADR 4,200 288
Fuji Photo Film ADR 6,000 198
Grupo Televisa S.A. ADR 5,300 136
Ito Yokado ADR 1,000 173
Koninklijke Ahold NV ADR 3,700 228
News Corporation ADR 7,900 165
Nissan Motor ADR 10,700 127
Sony ADR 2,800 184
-------
1,631
-------
ENERGY -- 2.1%
Elf Aquitaine ADR 4,600 208
Fletcher Challenge Energy-ADR 1,975 57
Repsol 5,000 191
Royal Dutch Petroleum ADR 2,200 376
Schlumberger 2,000 200
YPF Sociedad Anonima ADR 7,800 197
-------
1,229
-------
FINANCIAL -- 1.2%
Aegon N.V. ADR 3,400 215
Dresdner Bank 5,700 169
National Australia Bank 3,000 177
Tokio Marine & Fire Insurance 2,600 121
-------
682
-------
43
<PAGE>
STATEMENT OF NET ASSETS
SHARES/FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
=================================================================
HEALTH CARE -- 1.4%
Novartis AG ADR* 4,157 $ 237
Novo-Nordisk A/S ADR 5,600 262
Nycomed ASA ADR, Cl B 5,000 75
Roche Holdings Limited ADR 2,700 209
-------
783
-------
TECHNOLOGY -- 1.6%
Alcatel Alsthom ADR 10,200 163
Hitachi ADR 2,000 185
Kyocera ADR 1,100 134
L.M. Ericsson Telephone ADR 8,000 241
Matsushita Electric Industrial ADR 1,300 212
-------
935
-------
UTILITIES -- 0.2%
Enersis SA ADR 2,700 75
Hafslund ASA, Cl B* 5,000 34
-------
109
-------
TOTAL FOREIGN COMMON STOCK
(Cost $7,588) 9,387
-------
U.S. TREASURY OBLIGATIONS -- 10.2%
U.S. Treasury Bond
7.250%, 05/15/16 $1,080 1,141
U.S. Treasury Notes
6.250%, 06/30/98 1,660 1,671
6.250%, 05/31/00 1,400 1,406
7.500%, 11/15/01 1,300 1,369
6.500%, 08/15/05 350 352
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5,873) 5,939
-------
CORPORATE OBLIGATIONS -- 3.3%
Aetna Services
7.125%, 08/15/06 325 327
BHP Finance USA
6.420%, 03/01/26 345 342
Citicorp
7.125%, 05/15/06 310 312
Lincoln National
7.250%, 05/15/05 250 252
News America Holdings
10.125%, 10/15/12 300 340
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================
Philip Morris
7.625%, 05/15/02 $ 340 $ 351
-------
TOTAL CORPORATE OBLIGATIONS
(Cost $1,924) 1,924
-------
FOREIGN CORPORATE OBLIGATIONS -- 2.1%
Poland Non-United States
Registered (A)
3.000%, 10/27/24 620 350
Quebec Province
7.500%, 07/15/23 365 363
Republic of Indonesia
7.750%, 08/01/06 520 526
-------
TOTAL FOREIGN CORPORATE OBLIGATIONS
(Cost $1,206) 1,239
-------
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 2.5%
FHLB
7.260%, 09/06/01 295 305
FHLMC
5.990%, 03/06/01 720 703
7.610%, 09/01/04 200 201
Private Export Funding
7.300%, 01/31/02 20 208
-------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,389) 1,417
-------
ASSET-BACKED SECURITIES -- 2.4%
CIT Revenue Trust, Ser 1996-A, Cl A
5.400%, 12/15/11 276 273
Contimortgage Home Equity Loan Trust,
Ser 1996-2, Cl A6
7.250%, 06/15/11 260 263
General Electric Capital Mortgage
Services, Ser 1996-H3, Cl A-4
7.485%, 09/25/26 325 331
Residential Funding Mortgage
Securities I, Ser 1994-1, Cl A7
6.574%, 01/25/24 350 345
The Money Store Home Equity Trust,
Ser 1993-C, Cl A-3
5.750%, 10/15/22 199 194
-------
TOTAL ASSET-BACKED SECURITIES
(Cost $1,404) 1,406
-------
44
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
==============================================================
U.S. AGENCY MORTGAGE-BACKED
OBLIGATIONS -- 8.9%
FHLMC Gold
6.500%, 07/01/03 $ 343 $ 341
6.500%, 03/01/26 492 470
7.000%, 04/01/26 369 362
FHLMC Pool
6.000%, 04/01/26 592 551
FHLMC REMIC
3.500%, 11/15/21 465 374
FHLMC
5.800%, 02/22/06 305 287
FNMA REMIC, Ser 1996-32
7.000%, 08/25/22 525 526
FNMA
8.000%, 03/01/02 408 418
6.500%, 06/01/03 451 447
6.000%, 04/01/11 530 510
8.000%, 07/01/11 436 449
GNMA
9.000%, 01/15/17 306 323
8.000%, 08/15/25 133 136
-------
TOTAL U.S. AGENCY MORTGAGE-BACKED OBLIGATIONS
(Cost $5,139) 5,194
-------
REPURCHASE AGREEMENT -- 3.3%
Nomura Securities
7.20%, dated 12/31/96, matures
01/02/97, repurchase price
$1,938,000 (collateralized
by various FNMA obligations,
total par value $2,168,000,
6.50%-7.50%, 12/01/06-01/01/26,
total market value: $1,977,000) 1,938 1,938
-------
TOTAL REPURCHASE AGREEMENT
(Cost $1,938) 1,938
-------
TOTAL INVESTMENTS -- 99.6%
(Cost $50,961) 58,025
-------
OTHER ASSETS AND LIABILITIES -- 0.4%
Other Assets and Liabilities, Net 231
-------
MARKET
DESCRIPTION VALUE (000)
=============================================================
NET ASSETS:
Portfolio Shares of Trust Class
(unlimited authorization --
no par value) based
on 4,969,178 outstanding shares
of beneficial interest $47,440
Portfolio Shares of Investor Class
(unlimited authorization --
no par value) based on
337,966 outstanding shares
of beneficial interest 3,368
Distributions in excess of net
investment income (3)
Accumulated net realized gain
on investments 387
Net unrealized appreciation
on investments 7,064
-------
TOTAL NET ASSETS-- 100.0% $58,256
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE
PER SHARE -- TRUST CLASS $10.98
=======
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- INVESTOR CLASS $10.98
=======
MAXIMUM OFFERING PRICE PER SHARE --
INVESTOR CLASS ($10.98 (DIVIDE) 95.5%) $11.50
=======
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
(A) STEP BOND -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE
IN EFFECT ON DECEMBER 31, 1996. THE INITIAL COUPON ON A STEP BOND CHANGES
ON A SPECIFIC DATE, TO A PREDETERMINED HIGHER RATE.
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 CONDUIT
SER -- SERIES
45
<PAGE>
STATEMENT OF NET ASSETS
VALUE FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
REAL ESTATE INVESTMENT TRUST 1%
BASIC MATERIALS 7%
TECHNOLOGY 7%
CONSUMER CYCLICALS 12%
COMMUNICATION SERVICES 7%
HEALTH CARE 11%
UTILITIES 6%
CAPITAL GOODS 10%
TRANSPORTATION 1%
FINANCIAL 15%
REPURCHASE AGREEMENTS 2%
CONSUMER STAPLES 13%
ENERGY 8%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
COMMON STOCK -- 97.7%
BASIC MATERIALS -- 6.8%
Dow Chemical 16,800 $ 1,317
E.I. duPont de Nemours 16,300 1,538
Engelhard 32,400 620
Freeport-McMoran Copper &
Gold, Cl B 30,600 914
International Flavors &
Fragrances 22,500 1,012
International Paper 8,500 343
Phelps Dodge 10,600 715
Potlatch 14,800 636
PPG Industries 9,800 550
RPM 45,500 773
USX-U.S. Steel Group 27,600 866
Weyerhaeuser 17,900 848
Witco Chemical 23,600 720
Worthington Industries 34,900 633
-------
11,485
-------
CAPITAL GOODS -- 10.2%
AMP 21,300 817
Avery Dennison 23,800 842
Boeing 14,400 1,532
Browning-Ferris Industries 30,600 803
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
Caterpillar 12,000 $ 903
Crown Cork & Seal 18,500 1,006
Emerson Electric 11,000 1,064
General Electric 53,900 5,329
Johnson Controls 2,600 215
Keystone International 44,600 898
Minnesota Mining &
Manufacturing 14,400 1,193
Modern Controls 50,300 528
National Service Industries 20,400 762
Pall 10,100 258
Sensormatic Electronics 32,700 548
Timken 9,200 422
-------
17,120
-------
COMMUNICATION SERVICES -- 6.6%
AT&T 50,300 2,188
Alltel 25,000 784
Ameritech 23,800 1,443
Bell Atlantic 20,500 1,327
Bellsouth 30,000 1,211
GTE 42,200 1,920
SBC Communications 18,400 952
US West 32,700 1,055
-------
10,880
-------
CONSUMER CYCLICALS -- 12.0%
Acnielson Corp* 10,533 159
Chrysler 47,200 1,558
Cognizant 31,600 1,043
Dun & Bradstreet 31,600 750
Duracell International 16,700 1,167
Eastman Kodak 15,200 1,220
Echlin 25,200 797
Family Dollar Stores 23,500 479
Ford Motor 61,600 1,963
Gannett 3,900 292
H & R Block 32,300 937
J.C. Penney 20,800 1,014
Jostens 25,100 530
Masco 18,100 652
McGraw-Hill 10,600 489
Modine Manufacturing 20,600 551
Ogden 44,700 838
Reader's Digest, Cl A 24,800 998
Sotheby's Holdings, Cl A 46,890 873
VF 4,600 311
46
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
CONSUMER CYCLICALS -- (continued)
Wal-Mart Stores 69,400 $ 1,588
WD-40 14,700 750
Whirlpool 8,400 392
Xerox 9,200 484
-------
19,835
-------
CONSUMER STAPLES -- 13.3%
American Brands 22,500 1,117
Automatic Data Processing 8,700 373
Coca-Cola 81,700 4,299
Deluxe 22,000 721
Flowers Industries 39,310 845
H.J. Heinz 32,800 1,173
Kelly Services, Cl A 20,900 564
McDonald's 21,000 950
PepsiCo 62,000 1,814
Philip Morris 32,300 3,638
Procter & Gamble 24,400 2,623
Sara Lee 23,100 860
Tambrands 18,500 756
UST 31,700 1,026
Walt Disney 20,600 1,434
-------
22,193
-------
ENERGY -- 8.3%
Amoco 20,800 1,674
Atlantic Richfield 10,800 1,431
Chevron 25,400 1,651
Exxon 37,800 3,704
Halliburton 7,200 434
Mobil 16,000 1,956
Occidental Petroleum 39,900 933
Phillips Petroleum 22,500 996
Texaco 9,800 962
-------
13,741
-------
FINANCIAL -- 15.0%
American Express 15,500 876
American General 10,700 437
American International Group 14,100 1,526
Aon 7,900 491
Banc One 32,600 1,402
Bank of New York 12,000 405
Bankers Trust New York 9,900 854
Beneficial 14,700 932
Boatmen's Bancshares 11,500 742
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
Chase Manhattan Bank 18,200 $ 1,624
Citicorp 15,200 1,566
CoreStates 22,500 1,167
First of America Bank 9,600 577
Fleet Financial Group 20,300 1,012
FNMA 44,800 1,669
Hartford Steam Boiler
Inspection & Insurance 42,600 1,976
J.P. Morgan 5,700 556
KeyCorp 19,700 995
Lincoln National 13,700 719
Marsh & McLennan 9,900 1,030
MBNA 27,800 1,154
Mellon Bank 16,700 1,186
NationsBank 9,800 958
Norwest 27,300 1,188
-------
25,042
-------
HEALTH CARE -- 10.9%
Abbott Labs 31,000 1,573
American Home Products 26,500 1,554
Baxter International 22,300 914
Bristol-Myers Squibb 16,100 1,751
Columbia/HCA Healthcare 20,300 827
Eli Lilly 20,900 1,526
Johnson & Johnson 47,800 2,378
Medtronic 6,700 456
Merck 42,300 3,352
Pfizer 21,600 1,790
Pharmacia & Upjohn 32,500 1,288
Schering Plough 11,200 725
-------
18,134
-------
REAL ESTATE INVESTMENT TRUST -- 0.7%
Merry Land & Investment 54,300 1,167
-------
TECHNOLOGY -- 6.8%
Hewlett Packard 32,600 1,638
IBM 16,500 2,492
Intel 25,100 3,287
Lucent Technologies 16,301 754
Motorola 21,200 1,301
Raytheon 13,400 645
Texas Instruments 18,600 1,186
-------
11,303
-------
47
<PAGE>
STATEMENT OF NET ASSETS
SHARES/FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
==================================================================
TRANSPORTATION -- 0.7%
Illinois Central 16,300 $ 522
Norfolk Southern 6,700 586
-------
1,108
-------
UTILITIES -- 6.4%
American Electric Power 25,500 1,049
Baltimore Gas & Electric 34,200 915
Boston Edison 33,200 892
Central & South West 57,500 1,473
Consolidated Natural Gas 12,700 702
Enron 19,000 819
Nicor 14,100 504
Southern 57,200 1,294
Utilicorp United 76,100 2,055
Wisconsin Energy 34,000 914
-------
10,617
-------
TOTAL COMMON STOCK
(Cost $136,664) 162,625
-------
REPURCHASE AGREEMENT -- 1.9%
Nomura Securities
7.20%, dated 12/31/96, matures 01/02/97,
repurchase price $3,074,000 (collateralized
by various FHLMC obligations, par value
$2,253,000, 6.50%-9.00%, 04/01/24-
12/01/26 and various FNMA obligations,
par value $934,000, 6.50%,
01/01/04-12/01/25, market
value: $3,135,000) $3,073 3,073
-------
TOTAL REPURCHASE AGREEMENT
(Cost $3,073) 3,073
-------
TOTAL INVESTMENTS -- 99.6%
(Cost $139,737) 165,698
-------
OTHER ASSETS AND LIABILITIES -- 0.4%
Other Assets and Liabilities, Net 684
-------
MARKET
DESCRIPTION VALUE (000)
=================================================================
NET ASSETS:
Portfolio Shares of Trust Class (unlimited
authorization -- no par value)
based on 12,442,801 outstanding shares of
beneficial interest $137,139
Portfolio Shares of Investor Class (unlimited
authorization -- no par value) based on 126,115
outstanding shares of beneficial interest 1,344
Distributions in excess of net investment income (6)
Accumulated net realized gain on investments 1,944
Net unrealized appreciation on investments 25,961
--------
TOTAL NET ASSETS-- 100.0% $166,382
========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE -- TRUST CLASS $13.24
========
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- INVESTOR CLASS $13.26
========
MAXIMUM OFFERING PRICE PER SHARE --
INVESTOR CLASS ($13.26 (DIVIDE) 95.5%) $13.88
========
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
*NON-INCOME PRODUCING SECURITY
CL -- CLASS
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
48
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
GROWTH FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
UTILITIES 4%
TRANSPORTATION 2%
TECHNOLOGY 13%
HEALTH CARE 9%
FINANCIAL 17%
REPURCHASE AGREEMENT 2%
BASIC MATERIALS 3%
CAPITAL GOODS 12%
COMMUNICATION SERVICES 6%
CONSUMER CYCLICAL 12%
CONSUMER STAPLES 10%
ENERGY 10%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
========================================================
COMMON STOCK -- 97.6%
BASIC MATERIALS -- 2.8%
Bowater 22,000 $ 828
Monsanto 50,500 1,963
--------
2,791
--------
CAPITAL GOODS -- 12.5%
Agco 50,000 1,431
Boeing 20,500 2,181
Fluor 26,900 1,688
General Electric 25,800 2,551
Pitney Bowes 36,000 1,962
York International 44,000 2,458
--------
12,271
--------
COMMUNICATION SERVICES -- 6.5%
Ameritech 29,000 1,758
Bellsouth 62,500 2,523
GTE 45,500 2,070
--------
6,351
--------
CONSUMER CYCLICALS -- 11.5%
Carnival 53,200 1,756
CUC International* 92,100 2,187
Eastman Kodak 11,600 931
MARKET
DESCRIPTION SHARES VALUE (000)
========================================================
Federated Department Stores* 28,000 $ 955
Magna International, Cl A 31,100 1,734
Mattel 65,775 1,825
May Department Stores 20,100 940
OfficeMax* 92,400 982
--------
11,310
--------
CONSUMER STAPLES -- 10.1%
Avon Products 35,100 2,005
Colgate-Palmolive 19,500 1,799
H.J. Heinz 54,000 1,930
Kimberly-Clark 22,200 2,115
Philip Morris 10,100 1,138
Walt Disney 14,300 996
--------
9,983
--------
ENERGY -- 9.7%
Amoco 36,100 2,906
Baker Hughes 38,700 1,335
Phillips Petroleum 59,100 2,615
Texaco 27,000 2,649
--------
9,505
--------
FINANCIAL -- 17.0%
American General 47,500 1,942
American International Group 14,000 1,516
Citicorp 17,600 1,813
First Union 21,400 1,584
KeyCorp 43,100 2,177
Mellon Bank 27,900 1,981
PMI Group 26,200 1,451
PNC Bank 48,000 1,806
St. Paul 18,700 1,096
Thornburg Mortgage Asset 60,200 1,287
--------
16,653
--------
HEALTH CARE -- 9.4%
Abbott Labs 28,200 1,431
American Home Products 23,200 1,360
Amgen* 23,400 1,272
Bristol-Myers Squibb 11,100 1,207
Healthcare Compare* 34,500 1,462
Johnson & Johnson 19,400 965
Pfizer 19,000 1,575
--------
9,272
--------
49
<PAGE>
STATEMENT OF NET ASSETS
SHARES/FACE
DESCRIPTION AMOUNT (000) VALUE (000)
==================================================================
TECHNOLOGY -- 12.9%
Cadence Design Systems* 45,100 $ 1,793
Cisco Systems* 40,600 2,583
Intel 16,300 2,134
Microsoft* 27,800 2,297
Oracle Systems* 21,500 898
Sun Microsystems* 27,800 714
Tellabs* 34,800 1,309
Texas Instruments 15,400 982
--------
12,710
--------
TRANSPORTATION -- 1.6%
Illinois Central 48,750 1,560
--------
UTILITIES -- 3.6%
El Paso Natural Gas 52,500 2,651
Enron Oil & Gas 34,900 881
--------
3,532
--------
TOTAL COMMON STOCK
(Cost $74,990) 95,938
--------
REPURCHASE AGREEMENT -- 2.5%
Nomura Securities
7.20%, dated 12/31/96, matures
01/02/97, repurchase price
$2,421,000 (collateralized by
various FNMA obligations,
total par value $2,045,000,
6.50%-7.50%, 12/01/06-12/01/26
and FHLMC obligation, total par
value $521,000, 7.00%, 04/01/24,
market value: $2,469,000) $2,420 2,420
--------
TOTAL REPURCHASE AGREEMENT
(Cost $2,420) 2,420
--------
TOTAL INVESTMENTS -- 100.1%
(Cost $77,410) 98,358
--------
OTHER ASSETS AND LIABILITIES -- (0.1%)
Other Assets and Liabilities, Net (112)
--------
DESCRIPTION VALUE (000)
=================================================================
NET ASSETS:
Portfolio Shares of Trust Class (unlimited
authorization -- no par value) based on
7,289,210 outstanding shares of beneficial
interest $74,237
Portfolio Shares of Investor Class (unlimited
authorization -- no par value) based on 231,565
outstanding shares of beneficial interest 2,451
Distributions in excess of net investment income (7)
Accumulated net realized gain on investments 617
Net unrealized appreciation on investments 20,948
-------
TOTAL NET ASSETS-- 100.0% $98,246
=======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE -- TRUST CLASS $13.06
=======
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- INVESTOR CLASS $13.09
=======
MAXIMUM OFFERING PRICE PER SHARE --
INVESTOR CLASS ($13.09 (DIVIDE) 95.5%) $13.71
=======
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
*NON-INCOME PRODUCING SECURITY
CL -- CLASS
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
50
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
INTERNATIONAL EQUITY FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
OTHER 21%
SWEDEN 3%
NETHERLANDS 6%
AUSTRALIA 3%
UNITED KINGDOM 15%
FRANCE 8%
GERMANY 8%
HONG KONG 4%
JAPAN 27%
SWITZERLAND 5%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
FOREIGN COMMON STOCKS -- 94.9%
ARGENTINA -- 0.8%
Telefonica de Argentina ADR 15,000 $ 388
YPF ADR 17,500 442
--------
830
--------
AUSTRALIA -- 2.5%
ANZ Banking Group 100,000 630
Broken Hill Proprietary 90,000 1,281
CRA 32,250 506
--------
2,417
--------
AUSTRIA -- 0.5%
Creditanstalt Bankverein PS 1,500 194
Vienna International Airport 6,800 347
--------
541
--------
BELGIUM -- 0.3%
Audiofina 5,500 260
--------
BRAZIL -- 1.7%
Cervejaria Brahma ADR 30,000 328
Energetica de Minas Gerais
ADR 14,000 477
Pao de Acucar ADR 21,000 389
Telebras ADR 6,500 497
--------
1,691
--------
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
CHILE -- 1.2%
Andina Embotelladora ADR 12,000 $ 366
Enersis ADR 13,000 361
Telefonos de Chile ADR 4,000 405
--------
1,132
--------
DENMARK -- 1.4%
Sophus Berendsen, Cl B 6,600 849
Unidanmark, Cl A 10,000 518
--------
1,367
--------
FINLAND -- 1.0%
Nokia, Cl A 12,000 696
UPM-Kymmene* 14,000 294
--------
990
--------
FRANCE -- 7.3%
Alcatel Alsthom 6,928 557
Carrefour 1,500 977
Cie Generale des Eaux 8,357 1,036
Elf Aquitaine 17,008 1,549
L'Oreal 3,300 1,244
Saint-Gobain 5,259 744
Sanofi 11,078 1,102
--------
7,209
--------
GERMANY -- 5.6%
Allianz 700 1,260
Bayer 25,000 1,014
Beiersdorf 15,000 744
BMW 850 586
Deutsche Bank 22,000 1,026
Schering 10,000 844
--------
5,474
--------
HONG KONG -- 4.0%
Hong Kong Telecommunications 200,000 322
HSBC Holdings 64,629 1,383
Hutchison Whampoa 110,000 864
Sun Hung Kai Properties 65,600 804
Swire Pacific, Cl A 58,000 553
--------
3,926
--------
INDONESIA -- 0.3%
Multi Bintang 16,000 300
--------
51
<PAGE>
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
ITALY -- 2.6%
Assicurazioni Generali 27,500 $ 521
Parmalat Finanziaria 400,000 611
Rinascente 69,815 405
STET 230,000 1,045
--------
2,582
--------
JAPAN -- 26.3%
Ajinomoto 75,000 765
Asahi Glass 50,000 471
Bank of Tokyo-Mitsubishi 65,000 1,207
Canon 50,000 1,106
Dai Nippon Printing 60,000 1,052
DDI 80 529
East Japan Railway 140 630
Familymart 16,500 660
Fanuc 15,000 481
Hitachi 90,000 840
Honda Motor 60,000 1,716
Ito Yokado 20,000 871
KAO 60,000 700
Kirin Brewery 50,000 492
Komatsu 90,000 739
Kyocera 13,000 811
Matsushita Electric Industrial 60,000 980
Mitsubishi Heavy Industries 150,000 1,192
Nippon Telegraph & Telephone 122 925
Nomura Securities 25,000 376
Obayashi 60,000 405
Oji Paper 70,000 443
Secom 17,000 1,029
Sekisui House 70,000 713
Shiseido 45,000 521
Sony 25,000 1,639
Sumitomo Bank 41,000 591
Takeda Chemical Industries 45,000 945
Tokio Marine & Fire Insurance 90,000 847
Tokyo Broadcasting System 35,000 535
Toray Industries 140,000 865
Toshiba 110,000 692
--------
25,768
--------
MALAYSIA -- 2.9%
Genting 60,000 413
Malayan Banking 55,000 610
Sime Darby Malaysia 180,000 709
MARKET
DESCRIPTION SHARES VALUE (000)
========================================================
Telekom Malaysia 60,000 $ 535
United Engineers-- F 65,000 587
--------
2,854
--------
MEXICO -- 1.3%
Empresas ICA ADR* 28,000 410
Panamerican Beverages, ADR 11,500 539
Telefonos de Mexico ADR 10,000 330
--------
1,279
--------
NETHERLANDS -- 5.3%
Aegon 22,611 1,441
Ahold 17,431 1,089
Akzo Nobel 4,000 546
Heineken Holding, Cl A 4,125 645
Phillips Electronics 16,000 648
Wolters Kluwer 6,642 882
--------
5,251
--------
NORWAY -- 0.5%
Saga Petroleum, Cl B 30,000 471
--------
PORTUGAL -- 0.4%
Jeronimo Martins & Filho 5,066 261
Jeronimo Martins & Filho
Rights* 2,532 114
--------
375
--------
SINGAPORE -- 2.8%
City Developments 65,000 586
Fraser and Neave 35,000 360
Jardine Matheson 51,910 343
Keppel 55,000 429
Oversea-Chinese Banking-- F 40,500 504
Singapore International
Airlines-- F 60,000 545
--------
2,767
--------
SPAIN -- 2.5%
Banco Bilbao-Vizcaya 15,000 810
Centros Comerciales Pryca 25,000 530
Telefonica de Espana 47,000 1,092
--------
2,432
--------
SWEDEN -- 3.2%
Asea, Cl B 9,000 1,019
Astra, Cl A 22,000 1,088
Ericsson, Cl B 32,500 1,006
--------
3,113
--------
52
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
SWITZERLAND -- 4.7%
Holderbank, Cl I 750 $ 535
Nestle, Cl N 800 859
Novartis AG, Cl N* 853 977
Roche Holdings, Cl GS 150 1,167
Schweizerische Bankgesellschaft,
Cl I 1,200 1,051
--------
4,589
--------
THAILAND -- 1.3%
Advanced Info Service-- F 28,000 262
Bangkok Bank-- F 43,000 416
Land and House-- F 33,000 241
Siam Cement-- F 11,000 345
--------
1,264
--------
UNITED KINGDOM -- 14.5%
BAA 61,996 516
Barclays Bank 89,245 1,528
BAT Industries 112,640 934
BOC Group 42,570 637
Cable & Wireless 98,929 822
Cadbury Schweppes 82,499 696
General Electric 145,774 953
Marks & Spencer 110,379 928
Pearson 82,801 1,062
Prudential 172,033 1,447
Shell Transport & Trading 100,000 1,731
SmithKline Beecham 94,326 1,307
Tate & Lyle 110,526 897
Unilever 30,000 728
--------
14,186
--------
TOTAL FOREIGN COMMON STOCKS
(Cost $75,125) 93,068
--------
FOREIGN PREFERRED STOCKS -- 2.5%
AUSTRALIA -- 0.7%
Newscorp 150,000 667
--------
GERMANY -- 1.8%
Krones 800 291
RWE 30,000 1,004
Suedzucker 1,000 465
--------
1,760
--------
MARKET
DESCRIPTION VALUE (000)
========================================================
TOTAL FOREIGN PREFERRED STOCKS
(Cost $2,246) $ 2,427
-------
TOTAL INVESTMENTS -- 97.4%
(Cost $77,371) 95,495
-------
OTHER ASSETS AND LIABILITIES -- 2.6%
Other Assets and Liabilities, Net 2,555
-------
NET ASSETS:
Portfolio shares of the Trust
Class (unlimited authorization --
no par value) based on 6,093,169 outstanding
shares of beneficial interest 78,605
Portfolio shares of the Investor Class
(unlimited authorization -- no par value)
based on 101,821 outstanding shares of
beneficial interest 1,277
Undistributed net investment income 75
Accumulated net realized loss on investments (34)
Accumulated net realized loss on foreign currency
transactions (1)
Net unrealized appreciation on foreign currency and
translation of other assets and liabilities
denominated in foreign currency 4
Net unrealized appreciation on investments 18,124
-------
TOTAL NET ASSETS-- 100.0% $98,050
=======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE -- TRUST CLASS $15.83
=======
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- INVESTOR CLASS $15.79
=======
MAXIMUM OFFERING PRICE PER SHARE --
INVESTOR CLASS ($15.79 (DIVIDE) 95.5%) $16.53
=======
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
* 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.
53
<PAGE>
STATEMENT OF NET ASSETS
SMALL CAP FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
REPURCHASE AGREEMENTS 1%
UTILITIES 3%
TRANSPORTATION 1%
TECHNOLOGY 17%
HEALTH CARE 12%
FINANCIAL 18%
BASIC MATERIALS 3%
CAPITAL GOODS 11%
CONSUMER CYCLICALS 21%
CONSUMER STAPLES 7%
ENERGY 6%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
COMMON STOCK -- 99.2%
BASIC MATERIALS -- 3.4%
Champion Enterprises* 22,400 $ 437
Mosinee Paper 11,300 401
Shorewood Packaging* 20,700 404
-------
1,242
-------
CAPITAL GOODS -- 10.6%
Breed Technologies 20,800 541
Gentex* 53,200 1,071
Cognex* 20,300 376
JLG Industries 20,800 333
Kaydon 12,100 570
Perceptron* 22,200 760
Wolverine Tube* 7,500 264
-------
3,915
-------
CONSUMER CYCLICALS -- 21.3%
American Medical Response* 11,000 358
Catalina Marketing* 9,700 535
Fair, Isaac & Company 16,300 638
Gemstar International* 15,900 278
Grand Casinos* 98,400 1,328
HBO 9,700 576
MARKET
DESCRIPTION SHARES VALUE (000)
========================================================
Mail Boxes Etc* 20,400 $ 459
National Education* 99,400 1,516
Nautica Enterprises* 6,300 159
Pre Paid Legal* 74,200 1,354
QuickResponse Services* 12,200 348
Quiksilver* 15,400 329
-------
7,878
-------
CONSUMER STAPLES -- 6.8%
Applebee's International 14,700 404
Arbor Drugs 21,900 381
CDI* 8,400 238
NBTY* 34,700 659
Patterson Dental* 14,300 404
Smithfield Foods* 10,900 414
-------
2,500
-------
ENERGY -- 5.9%
Benton Oil & Gas* 14,200 321
Camco International 5,000 231
Noble Drilling* 14,000 278
Pride Petroleum Services* 38,700 900
Transocean Offshore 7,500 470
-------
2,200
-------
FINANCIAL -- 18.4%
Aames Financial 22,200 796
American Bankers Insurance
Group 10,600 542
Cityscape Financial* 23,100 606
CMAC Investment 10,400 382
Corus Bankshares 23,700 764
Enhance Financial Services
Group 16,900 617
First Alliance* 6,100 185
Fremont General 17,000 527
Investment Technology Group* 16,600 320
Mutual Risk Management 20,000 740
Quick & Reilly Group 12,400 370
Renters' Choice* 12,200 177
Western National 40,700 783
-------
6,809
-------
HEALTH CARE -- 11.8%
Express Scripts, Cl A* 31,100 1,116
Hologic* 51,600 1,277
Physician Computer Networks* 40,400 343
54
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
SHARES/FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
=================================================================
HEALTH CARE -- (continued)
Respironics* 19,000 $ 330
Sofamor/Danek Group* 18,800 573
Visix* 32,700 723
-------
4,362
-------
TECHNOLOGY -- 17.4%
Atmel* 22,000 729
Cadence Design Systems* 28,300 1,125
Keane* 13,800 438
LeCroy* 18,200 683
Maxim Integrated Products* 16,800 727
Network General* 20,100 608
Parametric Technology* 10,100 519
Silicon Valley Group* 34,700 698
Transaction Network Services* 46,000 529
US Robotics* 5,000 360
-------
6,416
-------
TRANSPORTATION -- 1.0%
Air Express International 11,100 358
-------
UTILITIES -- 2.6%
TNP Enterprises 15,100 413
United Illuminating 7,200 226
Wicor 9,200 330
-------
969
-------
TOTAL COMMON STOCK
(Cost $32,539) 36,649
-------
REPURCHASE AGREEMENT -- 1.3%
Nomura Securities
7.20%, dated 12/31/96, matures
01/02/97, repurchase price $498,000
(collateralized by FNMA obligation,
total par value $494,000, 7.50%,
12/01/06, market value: $498,000) $498 498
-------
TOTAL REPURCHASE AGREEMENT
(Cost $498) 498
-------
TOTAL INVESTMENTS -- 100.5%
(Cost $33,037) 37,147
-------
OTHER ASSETS AND LIABILITIES -- (0.5%)
Other Assets and Liabilities, Net (193)
-------
MARKET
DESCRIPTION VALUE (000)
=================================================================
NET ASSETS:
Portfolio Shares of Trust Class (unlimited
authorization -- no par value) based on
2,790,942 outstanding shares of beneficial
interest $31,280
Portfolio Shares of Investor Class (unlimited
authorization -- no par value) based on
44,553 outstanding shares of beneficial interest 460
Distributions in excess of net investment income (81)
Accumulated net realized gain on investments 1,185
Net unrealized appreciation on investments 4,110
-------
TOTAL NET ASSETS-- 100.0% $36,954
=======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE -- TRUST CLASS $13.03
=======
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- INVESTOR CLASS $13.00
=======
MAXIMUM OFFERING PRICE PER SHARE --
INVESTOR CLASS ($13.00 (DIVIDE) 95.5%) $13.61
=======
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
* NON-INCOME PRODUCING SECURITY
CL -- CLASS
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
55
<PAGE>
STATEMENT OF NET ASSETS
ASIAN TIGERS FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
THAILAND 8%
TAIWAN 2%
SOUTH KOREA 3%
SINGAPORE 13%
PHILIPPINES 4%
MALAYSIA 19%
CHINA 1%
HONG KONG 40%
INDIA 3%
INDONESIA 7%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
FOREIGN COMMON STOCKS -- 98.7%
CHINA -- 0.6%
Eastern Communications, Cl B* 250,000 $ 223
-------
HONG KONG -- 39.2%
Cheung Kong Holdings 155,000 1,378
China Light & Power 44,000 196
China Overseas Land &
Investment 600,000 304
Citic Pacific 204,000 1,184
Hang Seng Bank 60,000 729
Henderson Land Development 30,000 302
Hong Kong Telecommunications 417,600 672
Hong Kong & China Gas 144,320 279
HSBC Holdings 92,000 1,969
Hutchison Whampoa 148,000 1,162
Hysan Development 141,000 561
Johnson Electric 114,000 315
National Mutual Asia 150,000 143
New World Development 70,000 473
Sun Hung Kai Properties 94,000 1,152
Swire Pacific, Cl A 66,000 629
Taiwan Index Fund 59,200 739
MARKET
DESCRIPTION SHARES VALUE (000)
==========================================================
Television Broadcasts 90,000 $ 360
Tingyi (Cayman Island)* 1,274,000 334
Varitronix International 218,000 395
Wharf Holdings 45,000 225
-------
13,501
-------
INDIA -- 2.8%
Indian Hotels GDR 6,000 152
Mahindra & Mahindra GDR 20,500 241
State Bank of India GDR* 7,500 130
Tata Electric Power GDR 500 155
Tata Engineering and
Locomotive GDR 28,000 297
-------
975
-------
INDONESIA -- 6.8%
Bank Internasional
Indonesia-- F 379,160 373
Bimantara Citra-- F 120,000 160
Citra Marga Nusaphala 300,000 235
Indonesian Satellite ADR 2,400 66
PT Indah Kiat Pulp & Paper 183,060 134
PT Ramayana Lestari-- F 200,000 432
Sampoerna-- F 40,000 213
Semen Gresik-- F 90,000 290
Telekomunikasi-- F 260,000 449
------
2,352
------
MALAYSIA -- 19.2%
Amway* 40,000 227
Berjaya Sports 150,000 749
Commerce Asset Holdings* 50,000 376
DCB Holdings 80,000 274
Diversified Resource* 85,000 315
IOI 250,000 384
Malayan Banking 60,000 665
Malayan National
Reinsurance* 120,000 380
Public Bank-- F 145,333 308
Resorts World 70,000 319
Sime Darby Malaysia 97,600 385
Sime UEP Properties 205,000 528
Star Publications 80,000 315
Telekom Malaysia 64,000 570
UMW Holdings Berhad 80,000 374
United Engineers 49,000 442
-------
6,611
-------
56
<PAGE>
[GRAPHIC OMITTED]
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
PHILIPPINES -- 4.2%
C & P Homes 55,000 $ 28
Filinvest Land* 1,000,000 312
Manila Electric, Cl B 42,400 347
Metro Bank & Trust 6,000 149
Philipino Telephone* 150,000 127
Philippine Long Distance
Telephone 1,800 99
Philippine Long Distance
Telephone ADR 3,000 152
San Miguel, Cl B 49,500 219
-------
1,433
-------
SINGAPORE -- 12.6%
City Developments 32,600 294
DBS Land 90,000 331
Development Bank of
Singapore-- F 26,000 351
Fraser and Neave 33,600 346
Hong Kong Land 77,000 214
Jardine Matheson 14,000 92
Keppel 42,000 327
Marco Polo Development 200,000 417
Oversea-Chinese Banking-- F 39,300 489
Singapore International
Airlines-- F 33,000 300
Singapore Press-- F 18,400 363
Straits Steamship Land 200,000 641
United Industrial 200,000 169
-------
4,334
-------
SOUTH KOREA -- 3.3%
Koomkin Bank GDR 20,000 373
Korea Fund 35,677 535
Korea Mobile Telecom ADR 12,500 159
Samsung Electronics GDS 413 8
Samsung Electronics New,
1/2 Non-Voting GDS 1,370 57
-------
1,132
-------
MARKET
DESCRIPTION SHARES VALUE (000)
========================================================
TAIWAN -- 1.8%
Taiwan Fund 27,500 $ 608
-------
THAILAND -- 8.2%
Bangkok Bank-- F 57,000 551
Bec World Public-- L* 20,000 192
Cogeneration Public* 50,000 186
Grammy Entertainment-- F 25,000 285
Industrial Finance of
Thailand-- F 50,000 136
Industrial Finance of
Thailand-- L 60,000 160
Land and House-- F 12,000 88
PTT Exploration-- F 48,000 693
Quality House-- F 45,000 54
Thai Farmers Bank-- F 39,000 243
Thai Farmers Bank Warrants* 4,875 4
Total Access Communications 35,000 242
-------
2,834
-------
TOTAL FOREIGN COMMON STOCKS
(Cost $28,570) 34,003
-------
TOTAL INVESTMENTS -- 98.7%
(Cost $28,570) 34,003
-------
OTHER ASSETS AND LIABILITIES -- 1.3%
Other Assets and Liabilities, Net 439
-------
57
<PAGE>
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION VALUE (000)
===============================================================
NET ASSETS:
Portfolio shares of the Trust Class (unlimited
authorization -- no par value) based on
2,822,362 outstanding shares of beneficial
interest $28,424
Portfolio shares of the Investor Class (unlimited
authorization -- no par value) based on 70,640
outstanding shares of beneficial interest 644
Distributions in excess of net investment income (98)
Accumulated net realized gain on investments 43
Accumulated net realized loss from foreign
currency transactions (4)
Net unrealized appreciation on investments 5,433
-------
TOTAL NET ASSETS-- 100.0% $34,442
=======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE -- TRUST CLASS $11.91
=======
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- INVESTOR CLASS $11.89
=======
MAXIMUM OFFERING PRICE PER SHARE --
INVESTOR CLASS ($11.89 (DIVIDE) 95.5%) $12.45
=======
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A STATEMENT OF NET ASSETS. THE
SCHEDULE OF INVESTMENTS PRESENTS THE VALUE OF INVESTMENTS AS A
PERCENTAGE OF TOTAL NET ASSETS.
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
F -- FOREIGN REGISTRY SHARES
GDR -- GLOBAL DEPOSITORY RECEIPT
GDS -- GLOBAL DEPOSITORY SHARES
L -- LOCAL SHARES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
58
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
SCHEDULE OF INVESTMENTS
LATIN AMERICA EQUITY FUND
A pie chart depicting the percent of total portfolio investments for the
following investment classifications:
ARGENTINA 10%
OTHER 8%
PERU 7%
MEXICO 19%
CHILE 13%
BRAZIL 43%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
=========================================================
FOREIGN COMMON STOCKS -- 67.3%
ARGENTINA -- 9.1%
Disco* 10,000 $ 280
Perez Companc 50,000 352
Siderar, Cl A* 71,500 206
Telefonica de Argentina ADR 8,000 207
-------
1,045
-------
BRAZIL -- 16.4%
Bompreco Supermercado GDR* 11,500 207
Centrais Electricas Bras 1,500,000 537
Light Participacoes* 1,200,000 291
Telebras ADR 11,000 845
-------
1,880
-------
CHILE -- 11.7%
Andina Embotelladora ADR 6,000 183
CIA Telecomunicacion Chile ADR* 2,500 253
Enersis ADR 10,000 276
Quimica y Minera Chile 3,500 189
Santa Isabel ADR 10,000 226
Vina Concha y Toro Chile ADR 9,500 223
-------
1,350
-------
MEXICO -- 17.0%
Empresas ICA, ADR* 25,000 366
Gruma, Cl B* 40,000 244
Grupo Imsa, ADR* 11,250 214
Grupo Industrial Durango, ADR* 20,000 210
MARKET
DESCRIPTION SHARES VALUE (000)
========================================================
Grupo Televisa* 6,000 $ 154
Kimberly Clark, Cl A 10,000 194
Sanluis 30,000 191
Tamsa ADR* 25,000 378
-------
1,951
-------
OTHER -- 6.7%
BHI 10,000 197
Bladex 4,000 203
Panamerican Beverages, ADR 8,000 375
-------
775
-------
PERU -- 6.4%
Cementos Lima 15,000 220
Credicorp 12,500 231
Telefonica de Peru ADR 15,000 283
-------
734
-------
TOTAL FOREIGN COMMON STOCKS
(Cost $7,318) 7,735
-------
FOREIGN PREFERRED STOCKS -- 22.6%
BRAZIL -- 22.6%
Banco Bradesco 30,000,000 217
CIA Bras Distr Pao Acucar 10,000,000 178
CIA Cervejaria Brahma 500,000 273
CIA Energetica Minas 12,000,000 409
CIA Vale Do Rio Doce 10,000 193
Dixie Toga 200,000 152
Ericsson
Telecomunoicacoes* 15,000,000 231
Ipiranga CIA Petroleo 12,500,000 182
Itau Banco* 450,000 195
Petrol Brasileiros 1,500,000 239
Telecomunicacoes de
Sao Paulo* 1,500,000 325
-------
2,594
-------
TOTAL FOREIGN PREFERRED STOCKS
(Cost $2,594) 2,594
-------
TOTAL INVESTMENTS -- 89.9% OF NET ASSETS
(Cost $9,912) $10,329
=======
- --------------------------------------------------------------------------------
(1) THE CHART PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE OF THE TOTAL
VALUE OF THE INVESTMENT PORTFOLIO AND IS NOT A SCHEDULE OF INVESTMENTS. THE
SCHEDULE OF INVESTMENTS PRESENTS THE VALUE OF INVESTMENTS AS A PERCENTAGE
OF TOTAL NET ASSETS.
*NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL-- CLASS
GDR-- GLOBAL DEPOSITORY RECEIPT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
59
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES (000)
December 31, 1996
<TABLE>
<CAPTION>
INTERNATIONAL FIXED LATIN AMERICA
INCOME FUND EQUITY FUND
===================================================================================================================
<S> <C> <C>
ASSETS:
Investments at market value (Cost $13,315 and $9,912, respectively) $13,858 $10,329
Cash and foreign currency 4,355 1,407
Receivable for portfolio shares sold 11 9
Other assets 407 13
------- -------
Total assets 18,631 11,758
------- -------
LIABILITIES:
Distribution payable 867 --
Payable for investment securities purchased -- 232
Payable for portfolio shares repurchased 14 3
Other liabilities 77 33
------- -------
Total liabilities 958 268
------- -------
NET ASSETS:
Portfolio shares of the Trust Class (unlimited authorization - no par value)
based on 1,714,340 and 1,121,552 outstanding
shares of beneficial interest, respectively 17,301 11,181
Portfolio shares of the Investor Class (unlimited authorization -
no par value) based on 11,006 and 0 outstanding
shares of beneficial interest, respectively 116 --
Distributions in excess of net investment income (49) --
Accumulated net realized loss on investments (221) (108)
Accumulated net realized gain from foreign currency transactions 17 --
Net unrealized depreciation on foreign currency and translation of other
assets and liabilities denominated in foreign currencies (34) --
Net unrealized appreciation on investments 543 417
------- -------
NET ASSETS $17,673 $11,490
======= =======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- TRUST CLASS $10.24 $10.24
======= =======
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- INVESTOR CLASS $10.23 --
======= =======
MAXIMUM OFFERING PRICE PER SHARE -- INVESTOR CLASS (1) $10.71 --
======= =======
<FN>
(1) THE OFFERING PRICE IS CALCULATED BY DIVIDING THE NET ASSET VALUE BY 1 MINUS
THE MAXIMUM SALES CHARGE OF 4.50%.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
60
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENTS OF OPERATIONS (000)
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
TREASURY GOVERNMENT TAX-EXEMPT
MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND FUND
=================================================================================================================
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $7,746 $12,094 $30,989 $5,927
------ ------- ------- ------
EXPENSES:
Administration fees 226 336 854 254
Investment advisory fees 528 448 1,993 594
Less: investment advisory fees waived (236) -- (854) (275)
Custodian fees 17 25 62 16
Transfer agent fees 33 47 119 37
Professional fees 23 35 81 19
Registration & filing fees 20 46 78 --
Printing 18 25 63 15
Trustee 3 4 10 3
Insurance 2 3 8 3
Distribution fees(1) 24 11 4 8
Amortization of deferred organization costs 3 3 3 3
Miscellaneous 23 3 8 4
------ ------- ------- ------
Total Expenses 684 986 2,429 681
------ ------- ------- ------
Net Investment Income 7,062 11,108 28,560 5,246
------ ------- ------- ------
NET REALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from security transaction (1) (2) -- 7
------ ------- ------- ------
Net Gain (Loss) on Investments (1) (2) -- 7
------ ------- ------- ------
Net Increase In Net Assets From Operations $7,061 $11,106 $28,560 $5,253
====== ======= ======= ======
<FN>
(1) ALL DISTRIBUTION FEES ARE INCURRED AT THE INVESTOR CLASS LEVEL.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
61
<PAGE>
STATEMENTS OF OPERATIONS (000)
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE
GOVERNMENT TAX-EXEMPT INTERNATIONAL
FIXED INCOME FIXED INCOME FIXED INCOME FIXED INCOME
FUND FUND FUND FUND
==============================================================================================================================
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 8,319 $ 4,092 $ 2,599 $1,014
------- ------- ------- ------
EXPENSES:
Administration fees 188 100 69 26
Investment advisory fees 751 402 275 141
Less: investment advisory fees waived (125) (67) (57) --
Custodian fees 13 7 5 5
Transfer agent fees 27 15 10 4
Professional fees 17 9 5 2
Registration & filing fees 9 1 2 2
Printing 13 7 5 2
Trustee fee 2 1 1 --
Insurance 2 2 1 --
Pricing 4 3 3 8
Distribution fees(1) 2 2 2 --
Amortization of deferred organization costs 3 3 3 4
Miscellaneous 12 11 11 1
------- ------- ------- ------
Total Expenses 918 496 335 195
------- ------- ------- ------
Net Investment Income 7,401 3,596 2,264 819
------- ------- ------- ------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from security transactions 944 (1,069) 123 171
Net realized gain from foreign currency transactions -- -- -- 18
Net change in unrealized depreciation on investments (4,280) (412) (1,230) (405)
Net change in unrealized depreciation on foreign currency and
translation of other assets and liabilities in foreign currencies -- -- -- (53)
------- ------- ------- ------
Net Loss on Investments (3,336) (1,481) (1,107) (269)
------- ------- ------- ------
Net Increase In Net Assets From Operations $ 4,065 $ 2,115 $ 1,157 $ 550
======= ======= ======= ======
<FN>
(1) ALL DISTRIBUTION FEES ARE INCURRED AT THE INVESTOR CLASS LEVEL.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
62
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENTS OF OPERATIONS (000)
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
LATIN
INTERNATIONAL ASIAN AMERICA
BALANCED VALUE GROWTH EQUITY SMALL CAP TIGERS EQUITY
FUND FUND FUND FUND FUND FUND FUND(2)
===========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $1,025 $ 4,377 $ 1,948 $1,709 $ 160 $ 570 $ 50
Interest 1,256 321 211 47 67 28 22
Less: foreign taxes withheld -- -- -- (162) -- (45) (4)
------ ------- ------- ------ ------ ------ -----
Total investment income 2,281 4,698 2,159 1,594 227 553 68
------ ------- ------- ------ ------ ------ -----
EXPENSES:
Administration fees 84 219 136 133 44 47 7
Investment advisory fees 392 1,170 723 886 235 313 44
Custodian fees 6 16 9 111 3 83 24
Transfer agent fees 12 31 19 20 6 9 1
Professional fees 7 22 12 13 4 5 1
Registration & filing fees 6 14 7 9 4 4 7
Printing 8 16 10 10 3 3 1
Trustee 1 2 2 2 1 1 --
Insurance -- 2 2 1 1 1 --
Pricing 3 4 3 14 3 11 6
Distribution fees(1) 10 4 7 4 1 2 --
Amortization of deferred organization costs 3 3 3 4 3 5 1
Miscellaneous 2 2 1 1 1 -- --
------ ------- ------- ------ ------ ------ -----
Total Expenses 534 1,505 934 1,208 309 484 92
------ ------- ------- ------ ------ ------ -----
Net Investment Income (Loss) 1,747 3,193 1,225 386 (82) 69 (24)
------ ------- ------- ------ ------ ------ -----
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) from security transactions 3,482 14,781 5,669 593 5,081 249 (108)
Net realized gain (loss) from foreign currency
transactions 1 -- -- (62) -- (21) (3)
Net change in unrealized appreciation on
investments 1,657 9,618 10,988 7,526 668 3,452 417
Net change in unrealized appreciation
on foreign currency and translation of other
assets and liabilities in foreign currencies 1 -- -- 3 -- -- --
------ ------- ------- ------ ------ ------ -----
Net Gain on Investments 5,141 24,399 16,657 8,060 5,749 3,680 306
------ ------- ------- ------ ------ ------ -----
Net Increase In Net Assets From Operations $6,888 $27,592 $17,882 $8,446 $5,667 $3,749 $ 282
====== ======= ======= ====== ====== ====== =====
<FN>
(1) ALL DISTRIBUTION FEES ARE INCURRED AT THE INVESTOR CLASS LEVEL.
(2) COMMENCED OPERATIONS ON 7/1/96.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
63
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENTS OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
TREASURY GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
=============================================================================================================================
1996 1995 1996 1995
=============================================================================================================================
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 7,062 $ 6,079 $ 11,108 $ 10,247
Net realized gain (loss) from security transactions (1) -- (2) --
--------- --------- --------- ---------
Net increase in net assets resulting from operations 7,061 6,079 11,106 10,247
--------- --------- --------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Trust Class (6,642) (5,746) (10,893) (10,086)
Investor Class (420) (333) (215) (161)
--------- --------- --------- ---------
Total dividends distributed (7,062) (6,079) (11,108) (10,247)
--------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Proceeds from shares issued 631,686 484,129 607,944 404,051
Shares issued in lieu of cash distributions 5 5 -- --
Cost of shares repurchased (585,711) (485,213) (559,165) (353,576)
--------- --------- --------- ---------
Increase (decrease) in net assets derived from
Trust Class transactions 45,980 (1,079) 48,779 50,475
--------- --------- --------- ---------
INVESTOR CLASS:
Proceeds from shares issued 34,202 33,385 32,591 11,055
Shares issued in lieu of cash distributions 417 315 208 157
Cost of shares repurchased (31,639) (29,000) (30,708) (10,949)
--------- --------- --------- ---------
Increase (decrease) in net assets derived from
Investor Class transactions 2,980 4,700 2,091 263
--------- --------- --------- ---------
Increase in net assets derived from capital
share transactions 48,960 3,621 50,870 50,738
--------- --------- --------- ---------
Net increase in net assets 48,959 3,621 50,868 50,738
NET ASSETS:
Beginning of year 118,406 114,785 210,617 159,879
--------- --------- --------- ---------
End of year $ 167,365 $ 118,406 $ 261,485 $ 210,617
========= ========= ========= =========
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Shares issued 631,686 484,129 607,944 404,051
Shares issued in lieu of cash distributions 5 5 -- --
Shares repurchased (585,711) (485,213) (559,165) (353,576)
--------- --------- --------- ---------
Total Trust Class transactions 45,980 (1,079) 48,779 50,475
--------- --------- --------- ---------
INVESTOR CLASS:
Shares issued 34,202 33,385 32,591 11,055
Shares issued in lieu of cash distributions 417 315 208 157
Shares repurchased (31,639) (29,000) (30,708) (10,949)
--------- --------- --------- ---------
Total Investor Class transactions 2,980 4,700 2,091 263
--------- --------- --------- ---------
Increase in capital shares 48,960 3,621 50,870 50,738
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
TAX-EXEMPT
MONEY MARKET MONEY MARKET
FUND FUND
=======================================================================================================================
1996 1995 1996 1995
=======================================================================================================================
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 28,560 $ 25,853 $ 5,246 $ 6,408
Net realized gain (loss) from security transactions -- -- 7 (1)
----------- ----------- --------- ---------
Net increase in net assets resulting from operations 28,560 25,853 5,253 6,407
----------- ----------- --------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Trust Class (28,488) (25,787) (5,159) (6,283)
Investor Class (72) (66) (87) (125)
----------- ----------- --------- ---------
Total dividends distributed (28,560) (25,853) (5,246) (6,408)
----------- ----------- --------- ---------
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Proceeds from shares issued 1,564,751 1,234,299 492,151 408,851
Shares issued in lieu of cash distributions -- -- -- --
Cost of shares repurchased (1,441,724) (1,219,198) (472,474) (401,949)
----------- ----------- --------- ---------
Increase (decrease) in net assets derived from
Trust Class transactions 123,027 15,101 19,677 6,902
----------- ----------- --------- ---------
INVESTOR CLASS:
Proceeds from shares issued 5,375 6,603 13,188 16,513
Shares issued in lieu of cash distributions 70 62 90 124
Cost of shares repurchased (5,337) (5,912) (13,715) (17,597)
----------- ----------- --------- ---------
Increase (decrease) in net assets derived from
Investor Class transactions 108 753 (437) (960)
----------- ----------- --------- ---------
Increase in net assets derived from capital
share transactions 123,135 15,854 19,240 5,942
----------- ----------- --------- ---------
Net increase in net assets 123,135 15,854 19,247 5,941
NET ASSETS:
Beginning of year 477,046 461,192 171,189 165,248
----------- ----------- --------- ---------
End of year $ 600,181 $ 477,046 $ 190,436 $ 171,189
=========== =========== ========= =========
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Shares issued 1,564,751 1,234,299 492,151 408,851
Shares issued in lieu of cash distributions -- -- -- --
Shares repurchased (1,441,724) (1,219,198) (472,474) (401,949)
----------- ----------- --------- ---------
Total Trust Class transactions 123,027 15,101 19,677 6,902
----------- ----------- --------- ---------
INVESTOR CLASS:
Shares issued 5,375 6,603 13,188 16,513
Shares issued in lieu of cash distributions 70 62 90 124
Shares repurchased (5,337) (5,912) (13,715) (17,597)
----------- ----------- --------- ---------
Total Investor Class transactions 108 753 (437) (960)
----------- ----------- --------- ---------
Increase in capital shares 123,135 15,854 19,240 5,942
=========== =========== ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
64 & 65
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
STATEMENTS OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
FIXED INTERMEDIATE TAX-EXEMPT
INCOME GOVERNMENT FIXED FIXED INCOME
FUND INCOME FUND FUND
=====================================================================================================================
1996 1995 1996 1995 1996 1995
=====================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 7,401 $ 6,760 $ 3,596 $ 4,483 $ 2,264 $ 2,530
Net realized gain (loss) from security and foreign
currency transactions 944 1,117 (1,069) 345 123 318
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions (4,280) 10,277 (412) 5,923 (1,230) 4,825
-------- -------- ------- -------- -------- --------
Net increase in net assets resulting from operations 4,065 18,154 2,115 10,751 1,157 7,673
-------- -------- ------- -------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Trust Class (7,368) (6,740) (3,552) (4,360) (2,225) (2,491)
Investor Class (34) (29) (41) (151) (40) (54)
Net realized gains:
Trust Class -- -- -- -- -- --
Investor Class -- -- -- -- -- --
-------- -------- ------- -------- -------- --------
Total dividends distributed (7,402) (6,769) (3,593) (4,511) (2,265) (2,545)
-------- -------- ------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Proceeds from shares issued 26,722 41,779 14,074 8,766 2,028 3,761
Shares issued in lieu of cash distributions -- -- -- -- -- --
Cost of shares repurchased (25,038) (19,953) (29,218) (32,350) (11,274) (12,289)
-------- -------- ------- -------- -------- --------
Increase (decrease) in net assets derived
from Trust Class transactions 1,684 21,826 (15,144) (23,584) (9,246) (8,528)
-------- -------- ------- -------- -------- --------
INVESTOR CLASS:
Proceeds from shares issued 102 232 10 2,015 37 203
Shares issued in lieu of cash distributions 34 25 41 140 40 48
Cost of shares repurchased (303) (103) (2,695) (534) (497) (288)
-------- -------- ------- -------- -------- --------
Increase (decrease) in net assets derived
from Investor Class transactions (167) 154 (2,644) 1,621 (420) (37)
-------- -------- ------- -------- -------- --------
Increase (decrease) in net assets derived
from capital share transactions 1,517 21,980 (17,788) (21,963) (9,666) (8,565)
-------- -------- ------- -------- -------- --------
CONTRIBUTIONS OF CAPITAL FROM AFFILIATE: -- -- -- -- -- --
-------- -------- ------- -------- -------- --------
Net increase (decrease) in net assets (1,820) 33,365 (19,266) (15,723) (10,774) (3,437)
NET ASSETS:
Beginning of period 126,209 92,844 76,412 92,135 51,210 54,647
-------- -------- ------- -------- -------- --------
End of period $124,389 $126,209 $57,146 $ 76,412 $ 40,436 $ 51,210
======== ======== ======= ======== ======== ========
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Shares issued 2,660 4,247 1,424 897 204 383
Shares issued in lieu of cash distributions -- -- -- -- -- --
Shares repurchased (2,503) (2,014) (2,955) (3,346) (1,135) (1,262)
-------- -------- ------- -------- -------- --------
Total Trust Class transactions 157 2,233 (1,531) (2,449) (931) (879)
-------- -------- ------- -------- -------- --------
INVESTOR CLASS:
Shares issued 10 23 1 211 4 21
Shares issued in lieu of cash distributions 3 2 4 14 4 5
Shares repurchased (30) (10) (273) (53) (50) (29)
-------- -------- ------- -------- -------- --------
Total Investor Class transactions (17) 15 (268) 172 (42) (3)
-------- -------- ------- -------- -------- --------
Increase (decrease) in capital shares 140 2,248 (1,799) (2,277) (973) (882)
======== ======== ======= ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL
FIXED INCOME BALANCED VALUE
FUND FUND FUND
====================================================================================================================
1996 1995 1996 1995 1996 1995
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 819 $ 1,022 $ 1,747 $ 2,422 $ 3,193 $ 3,028
Net realized gain (loss) from security and foreign
currency transactions 189 1,020 3,483 3,342 14,781 3,456
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions (458) 1,220 1,658 7,291 9,618 20,121
------- ------- -------- -------- -------- --------
Net increase in net assets resulting from operations 550 3,262 6,888 13,055 27,592 26,605
------- ------- -------- -------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Trust Class (1,079) (1,582) (1,638) (2,309) (3,167) (3,032)
Investor Class (7) (10) (111) (122) (31) (31)
Net realized gains:
Trust Class -- -- (3,719) (1,941) (13,897) (2,748)
Investor Class -- -- (259) (153) (141) (31)
------- ------- -------- -------- -------- --------
Total dividends distributed (1,086) (1,592) (5,727) (4,525) (17,236) (5,842)
------- ------- -------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Proceeds from shares issued 7,829 4,868 16,720 24,298 53,326 63,103
Shares issued in lieu of cash distributions -- -- -- -- -- --
Cost of shares repurchased (7,168) (4,120) (13,137) (54,617) (30,087) (13,942)
------- ------- -------- -------- -------- --------
Increase (decrease) in net assets derived
from Trust Class transactions 661 748 3,583 (30,319) 23,239 49,161
------- ------- -------- -------- -------- --------
INVESTOR CLASS:
Proceeds from shares issued 24 54 199 1,133 184 642
Shares issued in lieu of cash distributions 7 10 366 270 169 62
Cost of shares repurchased (41) (32) (901) (746) (306) (176)
------- ------- -------- -------- -------- --------
Increase (decrease) in net assets derived
from Investor Class transactions (10) 32 (336) 657 47 528
------- ------- -------- -------- -------- --------
Increase (decrease) in net assets derived
from capital share transactions 651 780 3,247 (29,662) 23,286 49,689
------- ------- -------- -------- -------- --------
CONTRIBUTIONS OF CAPITAL FROM AFFILIATE: -- -- -- -- -- --
------- ------- -------- -------- -------- --------
Net increase (decrease) in net assets 115 2,450 4,408 (21,132) 33,642 70,452
NET ASSETS:
Beginning of period 17,558 15,108 53,848 74,980 132,740 62,288
------- ------- -------- -------- -------- --------
End of period $17,673 $17,558 $ 58,256 $ 53,848 $166,382 $132,740
======= ======= ======== ======== ======== ========
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Shares issued 745 453 1,522 2,401 4,037 5,673
Shares issued in lieu of cash distributions -- -- -- -- -- --
Shares repurchased (679) (379) (1,195) (5,320) (2,296) (1,257)
------- ------- -------- -------- -------- --------
Total Trust Class transactions 66 74 327 (2,919) 1,741 4,416
------- ------- -------- -------- -------- --------
INVESTOR CLASS:
Shares issued 2 5 18 111 15 57
Shares issued in lieu of cash distributions 1 1 33 26 12 5
Shares repurchased (4) (3) (81) (73) (23) (15)
------- ------- -------- -------- -------- --------
Total Investor Class transactions (1) 3 (30) 64 4 47
------- ------- -------- -------- -------- --------
Increase (decrease) in capital shares 65 77 297 (2,855) 1,745 4,463
======= ======= ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL SMALL
GROWTH EQUITY CAP
FUND FUND FUND
====================================================================================================================
1996 1995 1996 1995 1996 1995
====================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 1,225 $ 1,166 $ 386 $ 447 $ (82) $ 37
Net realized gain (loss) from security and foreign
currency transactions 5,669 8,079 531 991 5,081 2,502
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 10,988 14,198 7,529 7,172 668 2,930
-------- -------- -------- -------- ------- --------
Net increase in net assets resulting from operations 17,882 23,443 8,446 8,610 5,667 5,469
-------- -------- -------- -------- ------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Trust Class (1,202) (1,162) (238) (292) -- (37)
Investor Class (31) (25) -- (2) -- --
Net realized gains:
Trust Class (6,079) (6,782) (915) (1,076) (4,625) (303)
Investor Class (189) (213) (16) (23) (73) (7)
-------- -------- -------- -------- ------- --------
Total dividends distributed (7,501) (8,182) (1,169) (1,393) (4,698) (347)
-------- -------- -------- -------- ------- --------
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Proceeds from shares issued 31,892 18,301 35,035 46,191 20,885 9,098
Shares issued in lieu of cash distributions -- -- -- -- -- --
Cost of shares repurchased (24,937) (37,739) (23,444) (17,048) (9,294) (21,804)
-------- -------- -------- -------- ------- --------
Increase (decrease) in net assets derived
from Trust Class transactions 6,955 (19,438) 11,591 29,143 11,591 (12,706)
-------- -------- -------- -------- ------- --------
INVESTOR CLASS:
Proceeds from shares issued 269 844 65 586 73 174
Shares issued in lieu of cash distributions 218 237 15 22 65 6
Cost of shares repurchased (474) (247) (300) (266) (141) (20)
-------- -------- -------- -------- ------- --------
Increase (decrease) in net assets derived
from Investor Class transactions 13 834 (220) 342 (3) 160
-------- -------- -------- -------- ------- --------
Increase (decrease) in net assets derived
from capital share transactions 6,968 (18,604) 11,371 29,485 11,588 (12,546)
-------- -------- -------- -------- ------- --------
CONTRIBUTIONS OF CAPITAL FROM AFFILIATE: -- -- 197 -- -- --
-------- -------- -------- -------- ------- --------
Net increase (decrease) in net assets 17,349 (3,343) 18,845 36,702 12,557 (7,424)
NET ASSETS:
Beginning of period 80,897 84,240 79,205 42,503 24,397 31,821
-------- -------- -------- -------- ------- --------
End of period $ 98,246 $ 80,897 $ 98,050 $ 79,205 $36,954 $ 24,397
======== ======== ======== ======== ======= ========
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Shares issued 2,575 1,618 2,309 3,382 1,582 812
Shares issued in lieu of cash distributions -- -- -- -- -- --
Shares repurchased (2,023) (3,383) (1,541) (1,235) (705) (2,192)
-------- -------- -------- -------- ------- --------
Total Trust Class transactions 552 (1,765) 768 2,147 877 (1,380)
-------- -------- -------- -------- ------- --------
INVESTOR CLASS:
Shares issued 21 75 4 43 5 15
Shares issued in lieu of cash distributions 17 21 1 2 5 1
Shares repurchased (37) (22) (19) (20) (10) (2)
-------- -------- -------- -------- ------- --------
Total Investor Class transactions 1 74 (14) 25 -- 14
-------- -------- -------- -------- ------- --------
Increase (decrease) in capital shares 553 (1,691) 754 2,172 877 (1,366)
======== ======== ======== ======== ======= ========
</TABLE>
<TABLE>
<CAPTION>
LATIN
ASIAN AMERICA
TIGERS EQUITY
FUND FUND*
====================================================================================
1996 1995 1996
====================================================================================
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 69 $ 289 $ (24)
Net realized gain (loss) from security and foreign
currency transactions 228 (161) (111)
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 3,452 2,686 417
-------- ------- -------
Net increase in net assets resulting from operations 3,749 2,814 282
-------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Trust Class (117) (263) --
Investor Class (1) (6) --
Net realized gains:
Trust Class (49) -- --
Investor Class (1) -- --
-------- ------- -------
Total dividends distributed (168) (269) --
-------- ------- -------
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Proceeds from shares issued 13,074 10,886 11,807
Shares issued in lieu of cash distributions -- -- --
Cost of shares repurchased (6,097) (8,070) (599)
-------- ------- -------
Increase (decrease) in net assets derived
from Trust Class transactions 6,977 2,816 11,208
-------- ------- -------
INVESTOR CLASS:
Proceeds from shares issued 1,535 172 --
Shares issued in lieu of cash distributions 2 6 --
Cost of shares repurchased (1,575) (226) --
-------- ------- -------
Increase (decrease) in net assets derived
from Investor Class transactions (38) (48) --
-------- ------- -------
Increase (decrease) in net assets derived
from capital share transactions 6,939 2,768 11,208
-------- ------- -------
CONTRIBUTIONS OF CAPITAL FROM AFFILIATE: 44 -- --
-------- ------- -------
Net increase (decrease) in net assets 10,564 5,313 11,490
NET ASSETS:
Beginning of period 23,878 18,565 --
-------- ------- -------
End of period $ 34,442 $23,878 $11,490
======== ======= =======
CAPITAL SHARE TRANSACTIONS:
TRUST CLASS:
Shares issued 1,147 1,131 1,182
Shares issued in lieu of cash distributions -- -- --
Shares repurchased (539) (801) (60)
-------- ------- -------
Total Trust Class transactions 608 330 1,122
-------- ------- -------
INVESTOR CLASS:
Shares issued 138 18 --
Shares issued in lieu of cash distributions -- 1 --
Shares repurchased (138) (23) --
-------- ------- -------
Total Investor Class transactions -- (4) --
-------- ------- -------
Increase (decrease) in capital shares 608 326 1,122
======== ======= =======
<FN>
*COMMENCED OPERATIONS ON JULY 1, 1996.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
66 & 67
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET ASSET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED FROM NET FROM NET ASSET
BEGINNING INVESTMENT GAINS (LOSSES) INVESTMENT CAPITAL VALUE END TOTAL
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
TREASURY MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TRUST CLASS
1996 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 4.80%
1995 1.00 0.05 0.00 (0.05) 0.00 1.00 5.28
1994 1.00 0.04 0.00 (0.04) 0.00 1.00 3.58
1993(1) 1.00 0.03 0.00 (0.03) 0.00 1.00 2.56
INVESTOR CLASS
1996 $1.00 $0.04 $0.00 $(0.04) $0.00 $1.00 4.54%
1995 1.00 0.05 0.00 (0.05) 0.00 1.00 5.02
1994 1.00 0.03 0.00 (0.03) 0.00 1.00 3.32
1993(2) 1.00 0.02 0.00 (0.02) 0.00 1.00 2.29
- ------------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 5.08%
1995 1.00 0.05 0.00 (0.05) 0.00 1.00 5.59
1994 1.00 0.04 0.00 (0.04) 0.00 1.00 3.89
1993(1) 1.00 0.03 0.00 (0.03) 0.00 1.00 3.00
INVESTOR CLASS
1996 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 4.82%
1995 1.00 0.05 0.00 (0.05) 0.00 1.00 5.33
1994 1.00 0.04 0.00 (0.04) 0.00 1.00 3.63
1993(3) 1.00 0.02 0.00 (0.02) 0.00 1.00 2.78
- ------------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 5.13%
1995 1.00 0.06 0.00 (0.06) 0.00 1.00 5.64
1994 1.00 0.04 0.00 (0.04) 0.00 1.00 3.97
1993(1) 1.00 0.03 0.00 (0.03) 0.00 1.00 3.01
INVESTOR CLASS
1996 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 4.87%
1995 1.00 0.05 0.00 (0.05) 0.00 1.00 5.38
1994 1.00 0.04 0.00 (0.04) 0.00 1.00 3.71
1993(4) 1.00 0.02 0.00 (0.02) 0.00 1.00 2.76
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
RATIO OF NET
INVESTMENT
RATIO OF NET RATIO OF EXPENSES INCOME(LOSS)
RATIO OF INVESTMENT TO AVERAGE TO AVERAGE
NET ASSETS EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO
END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ---------------------------------------------------------------------------------------------------------------------------------
TREASURY MONEY MARKET FUND
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TRUST CLASS
1996 $156,455 0.44% 4.70% 0.59% 4.55% N/A
1995 110,475 0.44 5.16 0.59 5.01 N/A
1994 111,545 0.45 3.50 0.61 3.34 N/A
1993(1) 108,495 0.47 2.53 0.62 2.38 N/A
INVESTOR CLASS
1996 $ 10,910 0.69% 4.45% 0.84% 4.30% N/A
1995 7,931 0.69 4.89 0.84 4.74 N/A
1994 3,231 0.70 3.52 0.86 3.36 N/A
1993(2) 1,347 0.75 2.28 5.23** (2.20)** N/A
- ---------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND
- ---------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $256,392 0.44% 4.96% 0.44% 4.96% N/A
1995 207,615 0.42 5.45 0.42 5.45 N/A
1994 157,140 0.42 3.81 0.42 3.81 N/A
1993(1) 159,401 0.45 2.92 0.45 2.92 N/A
INVESTOR CLASS
1996 $ 5,093 0.69% 4.71% 0.69% 4.71% N/A
1995 3,002 0.67 5.18 0.67 5.18 N/A
1994 2,739 0.67 3.62 0.67 3.62 N/A
1993(3) 1,814 0.72 2.69 2.37** 1.04** N/A
- ---------------------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUND
- ---------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $598,715 0.43% 5.02% 0.58% 4.87% N/A
1995 475,688 0.41 5.50 0.56 5.35 N/A
1994 460,583 0.41 3.93 0.56 3.78 N/A
1993(1) 367,110 0.46 2.92 0.61 2.77 N/A
INVESTOR CLASS
1996 $ 1,466 0.68% 4.77% 0.83% 4.62% N/A
1995 1,358 0.66 5.22 0.81 5.07 N/A
1994 605 0.66 4.13 0.81 3.98 N/A
1993(4) 118 0.72 2.69 10.48** (7.09)** N/A
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
68 & 69
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET ASSET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED FROM NET FROM NET ASSET
BEGINNING INVESTMENT GAINS (LOSSES) INVESTMENT CAPITAL VALUE END TOTAL
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TRUST CLASS
1996 $ 1.00 $0.03 $0.00 $(0.03) $0.00 $1.00 3.14%
1995 1.00 0.03 0.00 (0.03) 0.00 1.00 3.49
1994 1.00 0.02 0.00 (0.02) 0.00 1.00 2.50
1993(1) 1.00 0.02 0.00 (0.02) 0.00 1.00 1.98
INVESTOR CLASS
1996 $ 1.00 $0.03 $0.00 $(0.03) $0.00 $1.00 2.88%
1995 1.00 0.03 0.00 (0.03) 0.00 1.00 3.24
1994 1.00 0.02 0.00 (0.02) 0.00 1.00 2.24
1993(5) 1.00 0.01 0.00 (0.01) 0.00 1.00 1.65
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $10.32 $0.59 $(0.26) $(0.59) $ 0.00 $10.06 3.42%
1995 9.30 0.59 1.02 (0.59) 0.00 10.32 17.75
1994 10.23 0.54 (0.93) (0.54) 0.00 9.30 (3.82)
1993(1) 10.00 0.47 0.50 (0.47) (0.27) 10.23 9.92
INVESTOR CLASS
1996 $10.35 $0.57 $(0.26) $(0.57) $ 0.00 $10.09 3.24%*
1995 9.32 0.55 1.04 (0.56) 0.00 10.35 17.40*
1994 10.24 0.50 (0.90) (0.52) 0.00 9.32 (3.97)*
1993(6) 10.30 0.35 0.23 (0.37) (0.27) 10.24 7.44*
- ------------------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE GOVERNMENT FIXED INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $10.06 $0.54 $(0.21) $(0.54) $0.00 $ 9.85 3.51%
1995 9.33 0.54 0.73 (0.54) 0.00 10.06 13.86
1994 10.08 0.47 (0.75) (0.47) 0.00 9.33 (2.78)
1993(1) 10.00 0.41 0.18 (0.41) (0.10) 10.08 6.04
INVESTOR CLASS
1996 $10.05 $0.49 $(0.18) $(0.51) $0.00 $ 9.85 3.30%*
1995 9.32 0.49 0.76 (0.52) 0.00 10.05 13.59*
1994 10.07 0.43 (0.73) (0.45) 0.00 9.32 (3.03)*
1993(7) 10.21 0.28 (0.02) (0.30) (0.10) 10.07 3.42*
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
RATIO OF NET
INVESTMENT
RATIO OF NET RATIO OF EXPENSES INCOME (LOSS)
RATIO OF INVESTMENT TO AVERAGE TO AVERAGE
NET ASSETS EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO
END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER
PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- ----------------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT MONEY MARKET FUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
TRUST CLASS
1996 $187,629 0.40% 3.10% 0.56% 2.94% N/A
1995 167,945 0.41 3.44 0.56 3.29 N/A
1994 161,054 0.43 2.52 0.59 2.36 N/A
1993(1) 116,000 0.45 1.97 0.60 1.82 N/A
INVESTOR CLASS
1996 $ 2,807 0.65% 2.85% 0.81% 2.69% N/A
1995 3,244 0.66 3.19 0.81 3.04 N/A
1994 4,204 0.68 2.31 0.84 2.15 N/A
1993(5) 1,394 0.74 1.81 4.88** (2.33)** N/A
- ----------------------------------------------------------------------------------------------------------------------------------
FIXED INCOME FUND
- ----------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $123,930 0.73% 5.92% 0.83% 5.82% 194%
1995 125,563 0.74 5.97 0.84 5.87 59
1994 92,402 0.72 5.45 0.82 5.35 126
1993(1) 131,002 0.77 4.60 0.87 4.50 163
INVESTOR CLASS
1996 $ 459 0.98% 5.65% 1.08% 5.55% 194%
1995 646 0.99 5.72 1.09 5.62 59
1994 442 0.98 5.38 1.08 5.28 126
1993(6) 86 1.06 4.08 42.44** (37.30)** 163
- ----------------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE GOVERNMENT FIXED INCOME FUND
- ----------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $ 56,895 0.74% 5.38% 0.84% 5.28% 179%
1995 73,466 0.73 5.48 0.83 5.38 115
1994 91,002 0.74 4.88 0.84 4.78 124
1993(1) 104,826 0.76 4.15 0.86 4.05 81
INVESTOR CLASS
1996 $ 251 0.99% 4.87% 1.09% 4.77% 179%
1995 2,946 0.98 5.18 1.08 5.08 115
1994 1,133 1.02 5.05 1.12 4.95 124
1993(7) 46 1.04 3.85 77.08** (72.19)** 81
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
70 & 71
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET ASSET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED FROM NET FROM NET ASSET
BEGINNING INVESTMENT GAINS (LOSSES) INVESTMENT CAPITAL VALUE END TOTAL
OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN
- --------------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT FIXED INCOME FUND
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TRUST CLASS
1996 $10.20 $0.50 $(0.21) $(0.50) $ 0.00 $ 9.99 2.96%
1995 9.26 0.48 0.94 (0.48) 0.00 10.20 15.67
1994 10.23 0.44 (0.94) (0.44) (0.03) 9.26 (4.93)
1993(1) 10.00 0.42 0.42 (0.42) (0.19) 10.23 8.64
INVESTOR CLASS
1996 $10.18 $0.43 $(0.17) $(0.47) $ 0.00 $ 9.97 2.70%*
1995 9.24 0.43 0.97 (0.46) 0.00 10.18 15.43*
1994 10.22 0.40 (0.93) (0.42) (0.03) 9.24 (5.27)*
1993(8) 10.29 0.32 0.14 (0.34) (0.19) 10.22 5.73*
- --------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL FIXED INCOME FUND
- --------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $10.58 $0.48 $(0.18) $(0.64) $ 0.00 $10.24 2.82%
1995 9.54 0.62 1.38 (0.96) 0.00 10.58 20.99
1994 10.43 0.56 (0.72) (0.55) (0.18) 9.54 (1.47)
1993(9) 10.00 0.54 0.94 (0.64) (0.41) 10.43 16.33
INVESTOR CLASS
1996 $10.56 $0.54 $(0.27) $(0.60) $ 0.00 $10.23 2.62%*
1995 9.53 0.52 1.45 (0.94) 0.00 10.56 20.68*
1994 10.42 0.46 (0.64) (0.53) (0.18) 9.53 (1.71)*
1993(10) 10.88 0.40 0.12 (0.57) (0.41) 10.42 6.61*
- --------------------------------------------------------------------------------------------------------------------------------
BALANCED FUND
- --------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $10.75 $0.35 $ 1.02 $(0.35) $(0.79) $10.98 13.15%
1995 9.53 0.39 1.65 (0.39) (0.43) 10.75 21.85
1994 10.04 0.30 (0.50) (0.30) (0.01) 9.53 (2.11)
1993(1) 10.00 0.29 0.39 (0.29) (0.35) 10.04 7.09
INVESTOR CLASS
1996 $10.75 $0.30 $ 1.04 $(0.32) $(0.79) $10.98 12.86%*
1995 9.53 0.34 1.67 (0.36) (0.43) 10.75 21.52*
1994 10.03 0.27 (0.49) (0.27) (0.01) 9.53 (2.29)*
1993(11) 10.28 0.20 0.12 (0.22) (0.35) 10.03 4.07*
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES INCOME (LOSS)
RATIO OF INVESTMENT TO AVERAGE TO AVERAGE
NET ASSETS EXPENSES INCOME NET ASSETS NET ASSETS PORTFOLIO AVERAGE
END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE (TRIPLE DAGGER)
- ------------------------------------------------------------------------------------------------------------------------------------
TAX-EXEMPT FIXED INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
TRUST CLASS
1996 $39,756 0.73% 4.95% 0.85% 4.83% 98% N/A
1995 50,079 0.75 4.84 0.87 4.72 129 N/A
1994 53,588 0.71 4.54 0.84 4.41 146 N/A
1993(1) 67,162 0.75 4.17 0.85 4.07 149 N/A
INVESTOR CLASS
1996 $ 680 0.98% 4.70% 1.10% 4.58% 98% N/A
1995 1,131 1.00 4.59 1.12 4.47 129 N/A
1994 1,059 0.97 4.35 1.10 4.22 146 N/A
1993(8) 428 1.05 3.88 11.86** (6.93)** 149 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL FIXED INCOME FUND
- ------------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $17,561 1.11% 4.66% 1.11% 4.66% 85% N/A
1995 17,433 1.10 5.86 1.16 5.80 105 N/A
1994 15,021 1.16 5.09 1.22 5.03 138 N/A
1993(9) 16,488 1.21 5.95 1.21 5.95 146 N/A
INVESTOR CLASS
1996 $ 112 1.36% 4.43% 1.36% 4.43% 85% N/A
1995 125 1.35 5.57 1.41 5.51 105 N/A
1994 87 1.41 5.03 7.54 (1.10) 138 N/A
1993(10) 17 1.56 5.85 319.45** (312.04)** 146 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCED FUND
- ------------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $54,546 0.94% 3.14% 0.94% 3.14% 104% $0.0496
1995 49,899 0.92 3.74 0.92 3.74 85 N/A
1994 72,086 0.94 3.11 0.94 3.11 85 N/A
1993(1) 58,510 0.97 2.88 0.97 2.88 126 N/A
INVESTOR CLASS
1996 $ 3,710 1.19% 2.89% 1.19% 2.89% 104% $0.0496
1995 3,949 1.22 3.36 1.22 3.36 85 N/A
1994 2,894 1.24 2.86 1.34 2.76 85 N/A
1993(11) 1,265 1.30 2.30 5.06** (1.46)** 126 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
72 & 73
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET ASSET NET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE INVESTMENT AND UNREALIZED FROM NET FROM CONTRIBUTION NET ASSET
BEGINNING INCOME GAINS (LOSSES) INVESTMENT CAPITAL OF VALUE END TOTAL
OF PERIOD (LOSS) ON SECURITIES INCOME GAINS CAPITAL OF PERIOD RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
VALUE FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TRUST CLASS
1996 $12.26 $0.29 $ 2.18 $(0.29) $(1.20) $0.00 $13.24 20.43%
1995 9.79 0.34 2.74 (0.35) (0.26) 0.00 12.26 32.02
1994 10.30 0.35 (0.35) (0.34) (0.17) 0.00 9.79 0.00
1993(1) 10.00 0.28 0.38 (0.28) (0.08) 0.00 10.30 6.73
INVESTOR CLASS
1996 $12.28 $0.25 $ 2.18 $(0.25) $(1.20) $0.00 $13.26 20.09%*
1995 9.80 0.32 2.74 (0.32) (0.26) 0.00 12.28 31.72*
1994 10.30 0.31 (0.33) (0.31) (0.17) 0.00 9.80 (0.21)*
1993(12) 10.41 0.21 (0.03) (0.21) (0.08) 0.00 10.30 1.95*
- ------------------------------------------------------------------------------------------------------------------------------------
GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $11.61 $0.17 $ 2.31 $(0.17) $(0.86) $0.00 $13.06 21.69%
1995 9.73 0.16 2.88 (0.16) (1.00) 0.00 11.61 31.60
1994 10.21 0.16 (0.36) (0.16) (0.12) 0.00 9.73 (2.05)
1993(1) 10.00 0.17 0.33 (0.17) (0.12) 0.00 10.21 5.07
INVESTOR CLASS
1996 $11.62 $0.14 $ 2.33 $(0.14) $(0.86) $0.00 $13.09 21.41%*
1995 9.74 0.12 2.89 (0.13) (1.00) 0.00 11.62 31.29*
1994 10.23 0.13 (0.37) (0.13) (0.12) 0.00 9.74 (2.42)*
1993(13) 10.44 0.10 (0.08) (0.11) (0.12) 0.00 10.23 (0.23)*
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $14.56 $0.06 $1.37 $(0.04) $(0.15) $0.03 $15.83 10.09%(DAGGER)
1995 13.00 0.07 1.75 (0.06) (0.20) 0.00 14.56 14.03
1994 12.59 0.02 0.40 0.00 (0.01) 0.00 13.00 3.32
1993(1) 10.00 0.00 2.63 0.00 (0.04) 0.00 12.59 26.55
INVESTOR CLASS
1996 $14.52 $0.04 $1.35 $ 0.00 $(0.15) $0.03 $15.79 9.85%*(DAGGER)
1995 12.96 0.05 1.73 (0.02) (0.20) 0.00 14.52 13.79*
1994 12.58 0.02 0.37 0.00 (0.01) 0.00 12.96 3.08*
1993(14) 10.93 (0.01) 1.70 0.00 (0.04) 0.00 12.58 23.52*
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES INCOME (LOSS)
RATIO OF INVESTMENT TO AVERAGE TO AVERAGE
NET ASSETS EXPENSES INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO AVERAGE
END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE (TRIPLE DAGGER)
- --------------------------------------------------------------------------------------------------------------------------
VALUE FUND
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TRUST CLASS
1996 $164,710 1.03% 2.19% 1.03% 2.19% 58% $0.0493
1995 131,243 1.05 3.07 1.05 3.07 37 N/A
1994 61,557 1.06 3.45 1.06 3.45 38 N/A
1993(1) 54,340 1.10 2.85 1.10 2.85 40 N/A
INVESTOR CLASS
1996 $ 1,672 1.28% 1.94% 1.28% 1.94% 58% $0.0493
1995 1,497 1.33 2.79 1.33 2.79 37 N/A
1994 731 1.37 3.13 1.37 3.13 38 N/A
1993(12) 435 1.48 2.51 8.99** (5.00)** 40 N/A
- --------------------------------------------------------------------------------------------------------------------------
GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $ 95,215 1.02% 1.36% 1.02% 1.36% 58% $0.0600
1995 78,216 1.02 1.37 1.02 1.37 71 N/A
1994 82,710 1.02 1.58 1.03 1.57 68 N/A
1993(1) 98,581 1.06 1.70 1.07 1.69 82 N/A
INVESTOR CLASS
1996 $ 3,031 1.27% 1.11% 1.27% 1.11% 58% $0.0600
1995 2,681 1.31 1.10 1.31 1.10 71 N/A
1994 1,530 1.33 1.30 1.33 1.30 68 N/A
1993(13) 840 1.43 1.24 6.55** (3.88)** 82 N/A
- --------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $96,442 1.36% 0.44% 1.36% 0.44% 9% $0.0561
1995 77,519 1.38 0.70 1.38 0.70 11 N/A
1994 41,324 1.43 0.21 1.46 0.18 6 N/A
1993(1) 23,457 1.64 0.03 1.64 0.03 13 N/A
INVESTOR CLASS
1996 $ 1,608 1.61% 0.20% 1.61% 0.20% 9% $0.0561
1995 1,686 1.68 0.42 1.68 0.42 11 N/A
1994 1,179 1.73 0.03 2.22 (0.46) 6 N/A
1993(14) 321 1.92 (0.38) 20.12** (18.58)** 13 N/A
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
74 & 75
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
NET ASSET NET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE INVESTMENT AND UNREALIZED FROM NET FROM CONTRIBUTION NET ASSET
BEGINNING INCOME GAINS (LOSSES) INVESTMENT CAPITAL OF VALUE END TOTAL
OF PERIOD (LOSS) ON SECURITIES INCOME GAINS CAPITAL OF PERIOD RETURN
- ------------------------------------------------------------------------------------------------------------------------------------
SMALL CAP FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TRUST CLASS
1996 $12.46 $(0.03) $2.38 $ 0.00 $(1.78) $0.00 $13.03 19.42%
1995 9.57 0.02 3.05 (0.02) (0.16) 0.00 12.46 32.13
1994 10.24 0.03 (0.67) (0.03) 0.00 0.00 9.57 (6.27)
1993(1) 10.00 0.04 0.24 (0.04) 0.00 0.00 10.24 2.82
INVESTOR CLASS
1996 $12.46 $(0.07) $ 2.39 $ 0.00 $(1.78) $0.00 $13.00 19.18%*
1995 9.58 (0.01) 3.05 0.00 (0.16) 0.00 12.46 31.73*
1994 10.25 0.00 (0.67) 0.00 0.00 0.00 9.58 (6.54)*
1993(15) 9.51 0.00 0.75 (0.01) 0.00 0.00 10.25 10.55*
- ------------------------------------------------------------------------------------------------------------------------------------
ASIAN TIGERS FUND
- ------------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $10.45 $0.02 $1.48 $(0.04) $(0.02) $0.02 $11.91 14.55%(DOUBLE
DAGGER)
1995 9.47 0.12 0.98 (0.12) 0.00 0.00 10.45 11.61
1994(16) 10.00 0.03 (0.53) (0.02) (0.01) 0.00 9.47 (5.07)
INVESTOR CLASS
1996 $10.44 $(0.02) $1.48 $(0.01) $(0.02) $0.02 $11.89 14.21%*(DOUBLE
DAGGER)
1995 9.47 0.11 0.95 (0.09) 0.00 0.00 10.44 11.18*
1994(17) 10.00 0.01 (0.53) 0.00 (0.01) 0.00 9.47 (5.37)*
- ------------------------------------------------------------------------------------------------------------------------------------
LATIN AMERICA EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996(18) $10.00 $(0.02) $0.26 $ 0.00 $ 0.00 $0.00 $10.24 2.40%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES INCOME (LOSS)
RATIO OF INVESTMENT TO AVERAGE TO AVERAGE
NET ASSETS EXPENSES INCOME (LOSS) NET ASSETS NET ASSETS PORTFOLIO AVERAGE
END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE (TRIPLE DAGGER)
- -----------------------------------------------------------------------------------------------------------------------
SMALL CAP FUND
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TRUST CLASS
1996 $36,375 1.05% (0.27)% 1.05% (0.27)% 158% $0.0599
1995 23,844 1.10 0.18 1.10 0.18 142 N/A
1994 31,527 1.06 0.27 1.06 0.27 43 N/A
1993(1) 53,357 1.09 0.40 1.10 0.39 27 N/A
INVESTOR CLASS
1996 $ 579 1.30% (0.52)% 1.30% (0.52)% 158% $0.0599
1995 553 1.39 (0.08) 1.39 (0.08) 142 N/A
1994 294 1.38 0.02 1.38 0.02 43 N/A
1993(15) 124 1.57 (0.10) 33.84** (32.37)** 27 N/A
- -----------------------------------------------------------------------------------------------------------------------
ASIAN TIGERS FUND
- -----------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $33,602 1.54% 0.23% 1.54% 0.23% 24% $0.0106
1995 23,145 1.52 1.38 1.60 1.30 28 N/A
1994(16) 17,860 1.60 0.45 1.71 0.34 13 N/A
INVESTOR CLASS
1996 $ 840 1.79% (0.15)% 1.79% (0.15)% 24% $0.0106
1995 733 1.81 1.05 1.88 0.98 28 N/A
1994(17) 705 1.90 0.15 2.75** (0.70)** 13 N/A
- -----------------------------------------------------------------------------------------------------------------------
LATIN AMERICA EQUITY FUND
- -----------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996(18) $11,490 2.09% (0.55)% 2.09% (0.55)% 10% $0.0004
- -----------------------------------------------------------------------------------------------------------------------
<FN>
* 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.
(DAGGER) The total return for the period ended December 31, 1996 includes the effect of a capital contribution from an
affiliate of the Advisor. Without the capital contribution, the total return for the Trust Class and Investor
Class would have been 9.87% and 9.64%, respectively.
(DOUBLE DAGGER)The total return for the period ended December 31, 1996 includes the effect of a capital contribution
from an affiliate of the Advisor. Without the capital contribution, the total return for the Trust Class
and Investor Class would have been 14.36% and 14.02%, respectively.
(TRIPLE DAGGER)Average commission rate paid per share for security purchases and sales during the period. Presentation
of the rate is required for fiscal years beginning after 09/01/95.
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.
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.
18. Commenced operations on July 1, 1996. All ratios except total return for the period have been annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
76 & 77
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Rembrandt Funds(REGISTRATION MARK) (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, Tax-Exempt
Money Market Fund (collectively "the Money Market Funds"), Fixed Income Fund,
Intermediate Government Fixed Income Fund, Tax-Exempt Fixed Income Fund,
International Fixed Income Fund (formerly "Global Fixed Income Fund"), Balanced
Fund, Limited Volatility Fixed Income Fund (collectively "the Fixed Income
Funds"), Value Fund, Growth Fund, International Equity Fund, Small Cap Fund,
TransEurope Fund, Asian Tigers Fund and Latin America Equity Fund (collectively
"the Equity Funds"). The Limited Volatility Fixed Income Fund and TransEurope
Fund had not yet commenced operations as of December 31, 1996. The Fund's
prospectus provides a description of each Fund's investment objectives, policies
and strategies. 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 that are traded on a
national securities exchange (or reported on NASDAQ national market system) are
stated at the last quoted sales price, if readily available for such 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
International Fixed Income Fund, Asian Tigers Fund, International Equity Fund
and Latin America 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.
78
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
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 by 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 or
class of shares is calculated each business day. In general, it is computed by
dividing the assets of each Fund or class of shares less its liabilities, by the
number of outstanding shares of the Fund or class.
FOREIGN CURRENCY TRANSACTIONS--With respect to the International Fixed
Income Fund, Asian Tigers Fund, International Equity Fund and Latin America
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 the portion of gains and losses on
investments in equity securities that 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 International 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.
EXPENSES--Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses of the Fund are prorated
to the Funds on the basis of relative 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.
79
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The amounts of distributions from net investment income and net realized
capital gains are determined in accordance with Federal income tax regulations,
that may differ from those amounts 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 Fund Resources (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 paid 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 year ended December 31, 1996, ABN AMRO-NSM International Funds
Management B.V. ("ABN AMRO"), an affiliate of the Advisor, contributed $197,300
and $44,000 to the International Equity Fund and the Asian Tigers Fund,
respectively. The payments represented reimbursements for certain transactions
effected with affiliated brokers. The payments, which have been accounted for as
contributions to capital, increased net asset value per share by $.03 for the
International Equity Fund and by $.02 for the Asian Tigers Funds.
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 International Fixed Income, Value, Growth, and Small Cap Funds;
1.00% of the 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
80
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
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 International 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 year ended December 31, 1996 were as follows:
PURCHASES SALES
(000) (000)
--------- --------
Fixed Income $233,562 $233,064
Intermediate Government
Fixed Income 115,628 133,274
Tax-Exempt Fixed Income 41,593 48,245
International Fixed Income 11,078 12,045
Balanced 56,711 54,688
Value 90,642 80,716
Growth 50,180 50,833
International Equity 17,140 7,752
Small Cap 52,833 45,131
Asian Tigers 15,123 7,036
Latin America Equity 10,505 718
At December 31, 1996, 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, 1996, for each Fixed Income and Equity Fund is as follows:
NET
APPRECIATED DEPRECIATED UNREALIZED
SECURITIES SECURITIES APPRECIATION
(000) (000) (000)
----------- ----------- ------------
Fixed Income $ 1,882 $ (310) $ 1,572
Intermediate
Government
Fixed Income 578 (61) 517
Tax-Exempt Fixed
Income 1,203 (111) 1,092
International Fixed
Income 794 (251) 543
Balanced 8,015 (951) 7,064
Value 27,864 (1,903) 25,961
Growth 22,176 (1,228) 20,948
International Equity 22,043 (3,919) 18,124
Small Cap 5,674 (1,564) 4,110
Asian Tigers 7,196 (1,763) 5,433
Latin America Equity 753 (336) 417
At December 31, 1996 the following Funds had available realized capital
losses to offset future net capital gains through fiscal year ended:
2002 2003 2004
(000) (000) (000)
----- ----- ------
Treasury Money Market $ -- $ -- $ 1
Government Money Market 2 2 --
Tax-Exempt Money Market 3 2 --
Fixed Income 3,375 -- --
Intermediate Government
Fixed Income 1,919 447 962
Tax-Exempt Fixed Income 2,093 307 --
International Fixed Income 221 -- --
Latin America Equity -- -- 55
7. FORWARD FOREIGN CURRENCY CONTRACTS
The International 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,
81
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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, 1996:
International Fixed Income Fund:
IN NET
CONTRACT EXCHANGE UNREALIZED
SETTLEMENT TO DELIVER FOR DEPRECIATION
DATE (000) (000) (000)
---------- ---------- -------- ------------
Foreign Currency
Sale: 01/28/97 UK 500 IE 495 $(18)
=====
- ----------
IE IRISH POUND
UK BRITISH POUNDS STERLING
82
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
SHAREHOLDER VOTING RESULTS (UNAUDITED)
There was a special meeting of shareholders held on April 29, 1996 at which
shareholders of the Fixed Income Funds, Equity Funds and Balanced Fund (each a
"Fund", and together the "Funds") voted on a series of proposals. Each proposal
and the results of the shareholder meeting are set forth below. There were no
broker non-votes submitted at the meeting.
1. Proposal to amend each Fund's fundamental investment limitation concerning
investment in real estate and commodities to clarify each Fund's ability to
invest in commodities contracts relating to financial instruments and in
marketable securities issued by companies that invest in real estate or
commodities contracts.
INTERNATIONAL ASIAN
VALUE GROWTH SMALL CAP EQUITY TIGERS
For 11,150,189 7,131,981 1,952,765 5,953,169 2,536,447
Against 4,650 21,818 1,549 2,261 5,098
Abstain 2,596 1,902 143 3,979 408
INTERMEDIATE TAX-EXEMPT INTERNATIONAL
FIXED GOVERNMENT FIXED FIXED
INCOME FIXED INCOME INCOME INCOME BALANCED
For 12,666,049 7,171,096 4,778,715 1,648,115 4,925,631
Against 10,682 696 996 3,001 7,220
Abstain -- -- 379 -- 14,771
2. Proposal to reclassify each Fund's fundamental limitation concerning short
sales and margin sales and amend the limitation to clarify each Fund's ability
to make short sales and margin sales and to use margin accounts in connection
with options and futures contracts.
INTERNATIONAL ASIAN
VALUE GROWTH SMALL CAP EQUITY TIGERS
For 11,151,519 7,149,426 1,953,493 5,954,714 2,537,357
Against 3,270 4,339 964 1,013 4,276
Abstain 2,596 1,938 -- 3,682 318
INTERMEDIATE TAX-EXEMPT INTERNATIONAL
FIXED GOVERNMENT FIXED FIXED
INCOME FIXED INCOME INCOME INCOME BALANCED
For 12,676,726 7,171,096 4,779,712 1,648,801 4,926,338
Against 5 696 -- 2,317 5,893
Abstain -- -- 379 -- 15,391
3. Proposal to eliminate each Fund's fundamental limitation concerning puts,
calls, options or combinations thereof.
INTERNATIONAL ASIAN
VALUE GROWTH SMALL CAP EQUITY TIGERS
For 11,148,338 7,148,312 1,952,459 5,953,282 2,538,117
Against 6,451 4,913 1,785 2,279 2,975
Abstain 2,596 2,475 232 3,848 859
INTERMEDIATE TAX-EXEMPT INTERNATIONAL
FIXED GOVERNMENT FIXED FIXED
INCOME FIXED INCOME INCOME INCOME BALANCED
For 12,676,726 7,171,096 4,779,712 1,650,436 4,920,133
Against 5 696 -- 683 12,717
Abstain -- -- 379 -- 14,771
4. Proposal to amend each Fund's fundamental investment limitation concerning
borrowing to enhance each Fund's ability to borrow money.
INTERNATIONAL ASIAN
VALUE GROWTH SMALL CAP EQUITY TIGERS
For 11,140,246 7,148,155 1,953,112 5,952,984 2,537,858
Against 14,542 4,960 1,344 2,844 3,996
Abstain 2,596 2,588 -- 3,780 98
INTERMEDIATE TAX-EXEMPT INTERNATIONAL
FIXED GOVERNMENT FIXED FIXED
INCOME FIXED INCOME INCOME INCOME BALANCED
For 12,676,726 7,171,096 4,776,170 1,650,436 4,917,418
Against 5 696 1,541 683 14,814
Abstain -- -- 379 -- 15,391
5. Proposal to reclassify each Fund's fundamental investment limitation
concerning pledging, mortgaging or hypothecating assets and amending the
limitation to clarify each Fund's ability to make good faith margin deposits in
connection with options and futures contracts.
INTERNATIONAL ASIAN
VALUE GROWTH SMALL CAP EQUITY TIGERS
For 11,151,519 7,150,495 1,953,232 5,954,459 2,538,520
Against 3,270 2,943 1,082 1,267 2,765
Abstain 2,596 2,263 143 3,682 566
INTERMEDIATE TAX-EXEMPT INTERNATIONAL
FIXED GOVERNMENT FIXED FIXED
INCOME FIXED INCOME INCOME INCOME BALANCED
For 12,676,726 7,171,096 4,772,539 1,651,119 4,923,846
Against 5 696 -- -- 8,669
Abstain -- -- 7,652 -- 15,106
83
<PAGE>
SHAREHOLDER VOTING RESULTS (UNAUDITED)
6. Proposal to reclassify each Fund's fundamental investment limitation
concerning investment in securities of investment companies as a non-fundamental
policy and to amend certain language to clarify the non-fundamental policy.
INTERNATIONAL ASIAN
VALUE GROWTH SMALL CAP EQUITY TIGERS
For 11,148,768 7,147,129 1,952,908 5,953,916 2,539,019
Against 8,021 6,308 1,549 1,811 2,614
Abstain 2,596 2,283 -- 3,682 318
INTERMEDIATE TAX-EXEMPT INTERNATIONAL
FIXED GOVERNMENT FIXED FIXED
INCOME FIXED INCOME INCOME INCOME BALANCED
For 12,676,726 7,171,096 4,772,539 1,650,436 4,920,525
Against 5 696 7,173 683 11,990
Abstain -- -- 379 -- 15,106
84
<PAGE>
DECEMBER 31, 1996
[GRAPHIC OMITTED]
NOTICE TO SHAREHOLDERS (UNAUDITED)
For shareholders that do not have a December 31, 1996 taxable year end, this
notice is for informational purposes only. For shareholders with a December 31,
1996 taxable year end, please consult your tax advisor as to the pertinence of
this notice.
For the fiscal year ended December 31, 1996 the funds of the Rembrandt Funds
(REGISTRATION MARK) are designating long term capital gains and qualifying
dividend income with regard to distributions paid during the year as follows:
(A) (B)
LONG TERM ORDINARY
CAPITAL GAINS INCOME TOTAL
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS
FUND (TAX BASIS) (TAX BASIS) (TAX BASIS)
- ------ ------------- ------------- -------------
Treasury Money Market (2) 0% 100% 100%
Government Money Market 0% 100% 100%
Money Market 0% 100% 100%
Tax-Exempt Money Market 0% 100% 100%
Fixed Income 0% 100% 100%
Intermediate Government
Fixed Income 0% 100% 100%
Tax-Exempt Fixed Income 0% 100% 100%
International Fixed Income 0% 100% 100%
Balanced 63% 37% 100%
Value 66% 34% 100%
Growth 58% 42% 100%
International Equity 56% 44% 100%
Small Cap 62% 38% 100%
Asian Tigers 23% 77% 100%
Latin America Equity 0% 0% 0%
(C) (D)
QUALIFYING TAX EXEMPT
FUND DIVIDENDS(1) INTEREST
- ------ ------------ ----------
Treasury Money Market 0% 0%
Government Money Market 0% 0%
Money Market 0% 0%
Tax-Exempt Money Market 0% 99%
Fixed Income 0% 0%
Intermediate Government
Fixed Income 0% 0%
Tax-Exempt Fixed Income 0% 99%
International Fixed Income 0% 0%
Balanced 31% 0%
Value 54% 0%
Growth 31% 0%
International Equity 0% 0%
Small Cap 3% 0%
Asian Tigers 0% 0%
Latin America Equity 0% 0%
(1) QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE
DIVIDENDS RECEIVED DEDUCTION.
(2) THE REMBRANDT FUNDS TREASURY MONEY MARKET FUND SATISFIES CA, CT AND NY'S
STATUTORY REQUIREMENTS TO PASS-THROUGH INCOME FROM FEDERAL OBLIGATIONS.
ACCORDINGLY, THE PRO-RATA PORTION OF INCOME FROM FEDERAL OBLIGATIONS MAY BE
EXEMPT FOR THOSE RESPECTIVE STATE'S INCOME TAX PURPOSES. INCOME FROM FEDERAL
OBLIGATIONS IS 100% OF THE TOTAL "ORDINARY INCOME DISTRIBUTIONS" IN COLUMN B
ABOVE. NO OTHER FUND WITHIN THE REMBRANDT FUNDS QUALIFIES IN CA, CT OR NY TO
PASS-THROUGH EXEMPT DIVIDENDS FROM FEDERAL OBLIGATIONS.
* ITEMS (A) AND (B) ARE BASED ON THE PERCENTAGE OF EACH FUND'S TOTAL
DISTRIBUTION.
** ITEM (C) IS BASED ON THE PERCENTAGE OF ORDINARY INCOME OF EACH FUND.
*** ITEM (D) IS BASED ON THE PERCENTAGE OF GROSS INCOME OF EACH FUND.
85
<PAGE>
READER'S NOTES
<PAGE>
READER'S NOTES
<PAGE>
READER'S NOTES
<PAGE>
IT'S EASY TO INVEST
IN THE REMBRANDT FUNDS
For more complete information, including information on charges and expenses,
call 1-800-443-4725 or contact us on the Internet at
http://www.rembrandtfunds.com.
You'll receive a free investor kit, including our prospectus.
Please read it carefully before you invest or send money.
SERVICE FEATURES
(BULLET) Toll-free access to your account information.
(BULLET) Free telephone exchanges as often as you require.
(BULLET) Free dividend reinvestment to help build your account.
(BULLET) Free automatic investment plans of $50 or more per month.
(BULLET) Free systematic withdrawal plans.
(BULLET) Free check-writing for amounts of $500 or more (on money
market accounts only).
(BULLET) You have the option of investing your personal savings,
IRA, rollover, Keogh, or SEP dollars in the Rembrandt Funds.
(BULLET) Quarterly statements.
(BULLET) ACH and wire transfers available.
(BULLET) Tax-free rollovers into an IRA.
(BULLET) IRA custodial fee waived for investments over $15,000.
(BULLET) Minimum initial investment for the Investor Class is $2,000
($1,000 for IRAs), with subsequent investments of $100 or more.
<PAGE>
REMBRANDT FUNDS(REGISTRATION MARK)
- ----------------------------------
ANNUAL REPORT
- ----------------------------------
DECEMBER 31, 1996
MONEY MARKET FUNDS
TREASURY MONEY MARKET FUND
GOVERNMENT MONEY MARKET FUND
MONEY MARKET FUND
TAX-EXEMPT MONEY MARKET FUND
FIXED INCOME FUNDS
FIXED INCOME FUND
INTERMEDIATE GOVERNMENT FIXED INCOME FUND
TAX-EXEMPT FIXED INCOME FUND
INTERNATIONAL FIXED INCOME FUND
BALANCED FUND
BALANCED FUND
EQUITY FUNDS
VALUE FUND
GROWTH FUND
INTERNATIONAL EQUITY FUND
SMALL CAP FUND
ASIAN TIGERS FUND
LATIN AMERICA EQUITY FUND
FOR MORE INFORMATION, CALL 1-800-443-4725.
http://www.rembrandtfunds.com
INVESTMENT ADVISER
LASALLE STREET CAPITAL MANAGEMENT, LTD.
10 South LaSalle Street
Suite 3701
Chicago, IL 60603
ADMINISTRATOR
SEI FUND RESOURCES
Oaks, PA 19456
DISTRIBUTOR
REMBRANDT FINANCIAL SERVICES COMPANY
Oaks, PA 19456
LEGAL COUNSEL
MORGAN, LEWIS & BOCKIUS LLP
2000 One Logan Square
Philadelphia, PA 19103
AUDITORS
ERNST & YOUNG LLP
Two Commerce Square
2001 Market Street
Suite 4000
Philadelphia, PA 19103
[GRAPHIC OMITTED]
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUNDS NAMED ABOVE.
THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS
IN A FUND UNLESS PRECEDED OR ACCOMPANIED BY A CURRENTLY EFFECTIVE PROSPECTUS.
REM-F-011-04
