REMBRANDT FUNDS [Registration Mark]
-----------------------------------
ANNUAL REPORT
-----------------------------------
DECEMBER 31, 1997
[LOGO OMITTED] ABN-AMRO
<PAGE>
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TABLE OF CONTENTS
LETTER TO SHAREHOLDERS ........................... 1
OVERVIEW ......................................... 3
MANAGER'S DISCUSSION AND ANALYSIS ................ 6
REPORT OF INDEPENDENT AUDITORS ................... 24
STATEMENT OF NET ASSETS/
SCHEDULE OF INVESTMENTS ..................... 25
STATEMENT OF ASSETS AND LIABILITIES .............. 66
STATEMENT OF OPERATIONS .......................... 67
STATEMENT OF CHANGES IN NET ASSETS ............... 70
FINANCIAL HIGHLIGHTS ............................. 76
NOTES TO FINANCIAL STATEMENTS .................... 86
NOTICE TO SHAREHOLDERS ........................... 90
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NOT FDIC INSURED [BULLET] NO BANK GUARANTEE [BULLET] MAY LOSE VALUE
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ABN AMRO IS A SERVICE MARK OF ABN AMRO BANK N.V., A PARENT OF
ABN AMRO ASSET MANAGEMENT (USA) INC., THE INVESTMENT ADVISOR TO
THE REMBRANDT FUNDS. REMBRANDT FUNDS ARE DISTRIBUTED BY
REMBRANDT FINANCIAL SERVICES COMPANY WHICH IS NOT A BANK
AFFILIATE. REMBRANDT, REMBRANDT FUNDS AND THE BRUSHSTROKE "R"
ARE REGISTERED TRADEMARKS. ALL RIGHTS RESERVED.
<PAGE>
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LETTER TO SHAREHOLDERS
Dear Shareholders:
1997 was an outstanding year for the Rembrandt Funds (and included a few
milestones along the way). Shareholders experienced strong performance (despite
some heavy volatility), the Advisor got a new name and new offices down the
street, Rembrandt turned five years old, and opened its 16th portfolio, the
no-load Rembrandt Real Estate Fund.
Rembrandt offers easy access to our no-load Common Share Class, which was
previously available only to institutions. Several of these Rembrandt Funds
(Common Share Class) significantly outperformed their Lipper peer group averages
in 1997, including:
<TABLE>
<CAPTION>
Fund Lipper Category 1-yr. Fund Return 1-yr. Peer Group Return Ranking
<S> <C> <C> <C> <C>
Balanced Flexible Portfolio 22.10% 18.69% 44 of 196
Value Growth & Income 30.49% 27.14% 151 of 611
Tax-Exempt Fixed Income Gen Muni 9.36% 9.11% 78 of 235
Fixed Income Int Inv Grd Debt 9.22% 8.57% 45 of 195
Latin America Equity Latin America 35.50% 25.27% 7 of 34
Intermediate Government
Fixed Income Int U.S. Govt Debt 7.93% 6.72% 6 of 92
</TABLE>
(Take a look at the following pages for complete information on performance.)
Our Rembrandt Money Market Funds also had excellent performance last year. And
now that the Common Share Class is available to all investors, it represents a
particularly good value--combining strong performance with lower fees.
1997 was the third consecutive year in which the Dow Jones Industrial Average
advanced more than 20%, the first time that has ever occurred. Domestic
fundamentals continued to shine throughout the year, with unusually low
inflation, strong employment growth and healthy industrial output. American
households remained optimistic about the economy and housing was robust. As an
added benefit, the holiday shopping season was the best we've seen in four
years. Both stocks and bonds benefited in this environment.
Another major factor for the U.S. economy was the turmoil in Asia. What became
known as the "Asian Flu" began infecting developing nations in the Far East
(such as Malaysia & Thailand) and spread to the region's giants (such as Japan).
Concerns about Asia's future led to a flight from its stock markets and runs on
its currencies. In a "flight to quality," the U.S. markets benefited from a
flood of investment dollars (directed to U.S. Treasuries) which helped produce
low interest rates and spurred the economy onward. This, in turn, assisted the
bond market in posting fairly strong returns late in the year. Stocks were
initially rocked by the crisis, falling by a record 550 points on October 27.
While they have recovered somewhat, fears still persist. With Asian economies
flagging, U.S. exports, and therefore corporate profits, could be hurt down the
line.
Despite the turmoil in Asian markets, the Rembrandt Asian Tigers Fund continued
to rank among the best performers in this volatile region over the long-term.
The Fund was 4th of 25 funds in Lipper's Pacific (ex-Japan) category for the
3-year period ended 12/31/97. It ended 1997 near the middle of the pack
finishing 37 of 73 funds.
Latin America also felt the effects of the "Asian Flu," buffeted by strong
volatility all year. The Rembrandt Latin America Equity Fund navigated the
markets well, and ended up as one of the highest performing emerging market
funds in 1997.
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<PAGE>
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LETTER TO SHAREHOLDERS (CONTINUED)
In another development, LaSalle Street Capital Management, Ltd., Rembrandt's
Advisor, changed its name to ABN AMRO Asset Management (USA) Inc., or AAAM. We
also merged the asset management division of ABN AMRO Chicago Corporation into
AAAM. The new name reflects the role we play within the much larger ABN AMRO
global network. The network of ABN AMRO'S Asset management offices covers the
world with investment management offices in 17 countries, and manages more than
$70 billion in assets.
Rembrandt has gone live with a revamped version of its Internet web site. It is
still located at www.rembrandtfunds.com, but with a whole new look! We have
added an enhanced pricing page that provides the latest yields, Funds Facts
pages (including portfolio commentary) on each Rembrandt Fund (updated
quarterly) and newly revised prospectus and application pages. I urge you to
make use of this developing medium.
Our newest portfolio, the Rembrandt Real Estate Fund, began operation on
December 31. The Fund is managed by Nancy Droppelman, who has 15 years of
experience in the real estate industry. She also manages several hundred million
dollars in offshore assets for clients worldwide.
The Rembrandt Real Estate Fund offers investors exposure to the broad U.S. real
estate industry, which was reborn in the early 1990s. The opportunity to invest
in a variety of realty markets and geographic regions becomes an even greater
value through the convenience of a mutual fund and the many strengths of
Rembrandt. The Common Share Class is 100% pure no-load and available for a
minimum of just $2,000. You get all of the same customer service features as the
rest of the Rembrandt Funds. The new Fund is also included in our web site's
daily pricing page.
The Fund's largest holdings are in real estate investment trusts, or REITs.
REITs do not pay federal or state taxes, giving it a unique feature: nearly all
of a REIT's income must be distributed to shareholders. These income dividends
can help provide a cushion in a down market. In addition, REITs provide
diversification for investors due to a lesser correlation with the broader
markets. It's important to keep in mind that most of the risks for REITs are the
same as direct ownership of real estate, including sensitivity to: interest rate
movements, the impact of inflation, economic weakness, earnings disappointments,
the lack of investment capital, and overbuilding -- any of which could impact
the profitability and performance of REITs. If you seek diversification for your
portfolio, it may be a good time to consider the Rembrandt Real Estate Fund.
On January 3, 1998, Rembrandt officially celebrated its fifth year in operation.
We are pleased to have been able to serve your investment needs for the past
five years, and greatly value your business. We continue to expand and enhance
your Rembrandt Family of Funds' products and services. I hope that you will take
advantage of all of them. Thank you.
Sincerely,
/S/Signature
Richard A. Frodsham
ABN AMRO Asset Management
2 ==============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
OVERVIEW
MONEY MARKET FUNDS
TREASURY MONEY MARKET FUND-- This fund seeks to preserve principal value
and maintain a high degree of liquidity while providing current income. It
invests in short-term U.S. Treasury bills, notes and bonds.
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.
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.
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.
* Income may be subject to federal Alternative Minimum Tax and state and
local taxes. Please consult your tax adviser.
============================================================================== 3
<PAGE>
OVERVIEW (CONTINUED) ===========================================================
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.
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 and equity
securities. 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.
4 ==============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
EQUITY FUNDS
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.
GROWTH FUND-- This fund seeks to provide a high level of total return
through capital appreciation. It consists of diversified common stocks and
securities convertible into common stocks.
INTERNATIONAL EQUITY FUND-- This fund consists of equity securities and
other securities from companies in at least three countries other than the
U.S.*
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.
REAL ESTATE FUND-- This fund seeks a high level of total return through a
combination of growth and income, primarily through investments in equity
securities of companies principally engaged in the real estate industry.
ASIAN TIGERS FUND-- This fund invests primarily in equity securities traded
on recognized stock exchanges of Asian countries and in the equity
securities 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.
============================================================================== 5
<PAGE>
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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
Investments were laddered to various maturities enhancing the Fund's yield
while keeping within maturity guidelines (60 days) to maintain its AAA rating by
Standard & Poors and Moodys.
Treasury Bill rates fluctuated throughout the year from many market
factors. The Treasury has been reducing the supply of Treasury Bills by paying
down the weekly amounts that are auctioned. Also, the Asian equity crisis caused
the market to both rally (yields go down) from a flight-to-quality and back up
(yields go up) from considerable Asian Central Bank selling.
The average maturity fluctuated along with these market conditions
including asset growth of 19% for 1997.
Looking forward, the Advisor believes yields will stay the same or go lower
due to the Asian crisis slowing world growth. The Federal Reserve will have to
at least maintain short rates or as the market has already anticipated, lower
interest rates.
GOVERNMENT MONEY
MARKET FUND
The Fund experienced little change in asset growth over the year, however,
the Fund did see large cash flow fluctuations throughout 1997 which is typical.
The Fund's average maturity was kept shorter in the beginning of the year due to
anticipated tightening by the Federal Reserve, which happened in March. Later on
into 1997 the Fund's average maturity was lengthened in anticipation of steady
short-term rates. Year-end proved to be the expected buying opportunity and the
Fund's average maturity was at the 65-68 day range.
Looking forward, short-term U.S. interest rates should be the same or lower
due to an economic slowdown following the Asian crisis. We will continue to look
for value out the curve; however, we anticipate the average maturity shorter due
to the flat curve until we are convinced that rates will be lower.
6 ==============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
MONEY MARKET FUND
The Fund's average maturity was kept shorter in the beginning of the year
due to anticipated tightening by the Federal Reserve, which happened in March.
Later on into 1997 the Fund's average maturity was lengthened in anticipation of
steady short-term rates. Year-end proved to be the expected buying opportunity
and the Fund's average maturity was at the 65-68 day range. The Fund experienced
asset growth for 1997 of 23%.
Looking forward, short-term U.S. interest rates should be the same or lower
due to an economic slowdown following the Asian crisis. We will continue to look
for value out the curve; however, we anticipate the average maturity shorter due
to the flat curve until we are convinced that rates will be lower.
TAX-EXEMPT MONEY
MARKET FUND
The Fund experienced asset growth of 33% during 1997. The Fund's average
maturity fluctuated in accordance with purchases and redemptions of the Fund. At
year-end we brought down our commercial paper exposure to increase our daily
variable-rate-demand note exposure. Those rates tend to increase dramatically as
does the taxable funds market.
Looking forward, the portfolio structure will stay relatively neutral to
the flat curve. We will continue to look for opportunities out the curve and
pare down some of the variable rate demand note positions.
============================================================================== 7
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED) ==================================
FIXED INCOME FUND
The Fund's performance benefited from the Advisor's duration decisions and
yield curve positioning throughout the year. The Advisor kept the Fund's
duration neutral to the market while interest rates rose during the first
quarter. However, near the end of the quarter, the Advisor became focused on
positive inflation fundamentals and extended the average duration of the Fund.
Performance was enhanced as interest rates fell and bond prices rose. As the
third quarter ended, the Advisor took profits by reducing the Fund's overall
duration. We overweighted longer duration securities and balanced that exposure
with shorter duration securities. Performance was again boosted as the yield
curve flattened significantly over the remainder of the year, resulting in long
duration securities outperforming other sectors and helping the Fund's
performance.
However, performance was adversely affected by the Fund's underweighting in
mortgage securities and the crisis in Asia. The Advisor became concerned that
lower levels of interest rates would accelerate home mortgage refinancing, which
tends to depress prices of mortgage securities. As a result, the Advisor reduced
exposure to mortgage securities during the second quarter and held that position
throughout the year. Uncharacteristically, mortgage securities continued to
perform well during this period. Finally, the financial and economic troubles of
Asia had a negative
[Line Graph Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
COMMON SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Fixed Lehman Brothers Lipper Intermediate Investment-
Income Fund Aggregate Bond Index Grade Debt Funds Average
<S> <C> <C> <C>
1/31/93 10,000 10,000 10,000
12/93 10,760 10,768 10,782
12/94 10,349 10,455 10,378
12/95 12,186 12,387 12,144
12/96 12,603 12,834 12,532
12/97 13,765 14,077 13,606
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
INVESTOR SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Fixed Lehman Brothers Lipper Intermediate Investment-
Income Fund Aggregate Bond Index Grade Debt Funds Average
<S> <C> <C> <C>
3/31/93 10,000 10,000 10,000
12/93 10,531 10,539 10,532
12/94 10,113 10,232 10,138
12/95 11,873 12,123 11,863
12/96 12,258 12,561 12,242
12/97 13,351 13,777 13,291
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS OF SHARES ONE-YEAR RETURN ANNUALIZED 3 YEAR RETURN ANNUALIZED INCEPTION TO DATE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common 9.22% 9.97% 7.05%
- ----------------------------------------------------------------------------------------------------
Investor 8.92% 9.70% 6.28%
- ----------------------------------------------------------------------------------------------------
<FN>
FOR THE PERIOD ENDED DECEMBER 31, 1997. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
INDEXES ARE USED FOR COMPARATIVE PURPOSES ONLY. ALL INDEXES ARE NOT MANAGED,
ARE NOT AVAILABLE FOR INVESTMENT AND, UNLIKE ALL MUTUAL FUNDS, THEY DO NOT
ASSESS FEES.
</FN>
</TABLE>
8 ==============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
impact on performance, specifically on corporate and asset-backed bonds. The
Advisor sold all Yankee holdings that would be directly affected by the Asian
crisis during the third quarter and in October. However, the Fund's remaining
corporate and asset-backed holdings still suffered.
Going forward into 1998, the Advisor has positioned the Fund's assets more
evenly across the yield curve and maintained a neutral exposure to duration
(basically, it is even with the Fund's benchmark). Mortgage securities are
beginning to underperform relative to other fixed income asset classes which
should enhance relative performance going forward.
INTERMEDIATE GOVERNMENT
FIXED INCOME FUND
The Fund's performance benefited by the Advisor's duration decisions and
the mortgage sector exposure throughout the year. The Advisor kept the Fund's
duration neutral to the market while interest rates rose during the first
quarter. However, near the end of the quarter, the Advisor became focused on
positive inflation fundamentals and extended the average duration of the Fund.
Performance was enhanced as interest rates fell and bond prices rose. As the
third quarter ended, the Advisor took profits by reducing duration.
The Fund's exposure to mortgage-backed securities benefited performance in
two ways in 1997. One, intermediate mortgage bonds produced 75 to 125 more basis
points of yield than comparable Treasury issues. Two, as the year unfolded,
investors were willing to pay more for the added yield. Thus, mortgage
securities' price performance was better than that of treasuries. This resulted
in the mortgage sector being the best performing area of the U.S. investment
grade market in 1997.
As 1998 begins, the Advisor has positioned the Fund cautiously. The Fund
maintains a neutral duration exposure to the market. Also, the mortgage
securities position has been reduced. The Advisor is concerned about
overvaluation of the sector, especially of premium priced mortgages (those
priced over par) that may be prepaid at par as the current refinancing wave
begins. The current mortgages held are concentrated in seasoned, discount priced
issues that tend to have less prepayment volatility and a more defined maturity.
============================================================================== 9
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED) ==================================
[Line Graph Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
COMMON SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Intermediate Govt. Lehman Brothers Lipper Short/Intermediate
Fixed Income Fund Govt. Bond Index U.S. Govt. Funds Average
<S> <C> <C> <C>
1/31/93 10,000 10,000 10,000
12/93 10,476 10,835 10,530
12/94 10,185 10,470 10,266
12/95 11,596 12,389 11,562
12/96 12,003 12,732 11,973
12/97 12,955 13,952 12,777
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
INVESTOR SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Intermediate Govt. Lehman Brothers Lipper Short/Intermediate
Fixed Income Fund Govt. Bond Index U.S. Govt. Funds Average
<S> <C> <C> <C>
4/30/93 10,000 10,000 10,000
12/93 10,231 10,507 10,295
12/94 9,921 10,152 10,038
12/95 11,269 12,013 11,305
12/96 11,641 12,346 11,706
12/97 12,532 13,529 12,493
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS OF SHARES ONE-YEAR RETURN ANNUALIZED 3 YEAR RETURN ANNUALIZED INCEPTION TO DATE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common 7.93% 8.35% 5.57%
- ----------------------------------------------------------------------------------------------------
Investor 7.66% 8.10% 4.93%
- ----------------------------------------------------------------------------------------------------
<FN>
FOR THE PERIOD ENDED DECEMBER 31, 1997. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
INDEXES ARE USED FOR COMPARATIVE PURPOSES ONLY. ALL INDEXES ARE NOT MANAGED,
ARE NOT AVAILABLE FOR INVESTMENT AND, UNLIKE ALL MUTUAL FUNDS, THEY DO NOT
ASSESS FEES.
</FN>
</TABLE>
TAX-EXEMPT FIXED INCOME FUND
For the year 1997, the Fund outperformed its benchmark, the Lehman Brothers
Municipal Bond Index, 9.36% vs. 9.19%.
During the majority of 1997, the Federal Reserve Board's bias to increase
rates hung over both the Treasury and Municipal markets. This caused rates
during the first quarter to remain prematurely high. The Fund took advantage of
this situation and sold lower quality and non-rated bonds and purchased higher
quality more liquid securities. At the same time the Fund shifted more assets
into stable General Obligation and reliable Revenue Bonds.
Slower economic growth in the second quarter contributed much to the Fund's
solid performance. The Fund was well-positioned for a fall in rates with its
purchase of longer maturity and higher quality bonds. The Fund concentrated on
securities with coupons in the 5.00% to 5.25% range that have premium call
protection from five to ten years.
The third quarter saw the Fund reduce its duration from 120% of the
benchmark to 100% or neutral. This reflected our concern that the economy would
start to expand during the fourth quarter. In August, market participants sought
to ignore weak economic information and imply that inflation actually existed.
The Fund took this opportunity to purchase bonds with higher yields and
specialty state securities such as Florida, Ohio, and Michigan due to their
premium trading status in the market place.
10 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
World markets drew the attention of domestic participants during the fourth
quarter. The Asian crisis caused investors to deposit funds in U.S. Treasuries,
thus causing yields on bonds to compress throughout November and December. The
Fund continued its neutral position and held fast in its inclination to hold
high quality bonds.
Looking ahead, the Fund will concentrate on securities with maturities less
than 20 years, due to the fact that the curve is flat outside of twenty years.
The Fund will continue to purchase higher quality bonds that provide performance
enhancement as well as price return.
Beginning in January 1998, the Tax-Exempt Fixed Income Fund will be managed
against the Lehman Brothers Municipal Index 22+ years. The Fund was previously
managed against the full Lehman Brothers Municipal Bond Index. The change will
be instituted to reduce price volatility in the Fund while preserving the
potential for high tax-exempt income.
[Line Graph Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
COMMON SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Tax-Exempt Lehman Brothers Lipper General Municipal
Fixed Income Fund Municipal Bond Index Debt Funds Average
<S> <C> <C> <C>
1/31/93 10,000 10,000 10,000
12/93 10,762 11,099 11,104
12/94 10,232 10,525 10,372
12/95 11,835 12,363 12,118
12/96 12,185 12,912 12,520
12/97 13,326 14,100 13,661
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
INVESTOR SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Tax-Exempt Lehman Brothers Lipper General Municipal
Fixed Income Fund Municipal Bond Index Debt Funds Average
<S> <C> <C> <C>
3/31/93 10,000 10,000 10,000
12/93 10,570 10,826 10,813
12/94 10,013 10,266 10,100
12/95 11,558 12,059 11,800
12/96 11,870 12,594 12,192
12/97 12,951 13,753 13,302
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS OF SHARES ONE-YEAR RETURN ANNUALIZED 3 YEAR RETURN ANNUALIZED INCEPTION TO DATE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common 9.36% 9.21% 6.11%
- ----------------------------------------------------------------------------------------------------
Investor 9.11% 8.96% 5.25%
- ----------------------------------------------------------------------------------------------------
<FN>
FOR THE PERIOD ENDED DECEMBER 31, 1997. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
INDEXES ARE USED FOR COMPARATIVE PURPOSES ONLY. ALL INDEXES ARE NOT MANAGED,
ARE NOT AVAILABLE FOR INVESTMENT AND, UNLIKE ALL MUTUAL FUNDS, THEY DO NOT ASSESS FEES.
</FN>
</TABLE>
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<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED) ==================================
INTERNATIONAL
FIXED INCOME FUND
In 1997, performance of the Fund was hurt by the rising dollar. The Fund's
duration was kept lower than its benchmark index, the J.P. Morgan Global
Government Non-U.S. Bond Index, throughout most of the year. Low yields in
Europe and signs of economic growth picking up globally, were the primary
reasons for focusing on the shorter end of the market.
Unfortunately, restrained by fiscal austerity measures and rather high
unemployment, continental European economies continued to have low economic
growth and inflation. Bond yields reached low levels. The Anglo Saxon economies
generally enjoyed higher economic growth and had higher bond yields. Inflation
remained moderate partly as a result of a more competitive environment. The Fund
benefited by being somewhat overweighted in those countries. Japanese economic
growth appears sustainable, in spite of the reversal of fiscal stimulus.
Therefore, the Fund remains underweighted in Japan.
The Fund benefited by being short yen, short Europe and long U.S. dollars.
The Asian crisis did not hurt the Fund in credit terms as high quality, mostly
sovereign credits, fared well relative to the rest of the market.
The Fund was hurt mostly by its long non-U.S. dollar positions -- the
Canadian dollar that fell 4%, the Australian dollar that fell 10%, and the New
Zealand dollar. Duration policy (underweighted over half of the last year)
worked out negatively and later on neutrally.
The Advisor believes that the Asian crisis is not yet resolved and may even
deepen, thereby causing rates to fall to lower levels than would be appropriate
with current macro-monetary conditions in major western economies. Sentiment
factors (deflation threat) have led to overvaluation in many markets. Therefore,
on balance, the Advisor has a neutral duration policy. More than normal demand
for dollar-assets should allow us to hold the course of our overweights in these
markets.
12 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
[Line Graph Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
COMMON SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt International J.P. Morgan Global Non- Lipper International
Fixed Income Fund U.S. Govt. Bond Index Income Funds Average
<S> <C> <C> <C>
2/28/93 10,000 10,000 10,000
12/93 11,348 11,162 11,401
12/94 11,182 11,712 11,094
12/95 13,529 14,186 13,247
12/96 13,910 14,933 14,487
12/97 13,095 14,370 14,425
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
INVESTOR SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt International J.P. Morgan Global Non- Lipper International
Fixed Income Fund U.S. Govt. Bond Index Income Funds Average
<S> <C> <C> <C>
4/30/93 10,000 10,000 10,000
12/93 10,599 10,545 10,963
12/94 10,417 11,064 10,668
12/95 12,572 13,401 12,739
12/96 12,901 14,108 13,931
12/97 12,106 13,576 13,872
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS OF SHARES ONE-YEAR RETURN ANNUALIZED 3 YEAR RETURN ANNUALIZED INCEPTION TO DATE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common -5.86% 5.41% 5.91%
- ----------------------------------------------------------------------------------------------------
Investor -6.16% 5.13% 3.74%
- ----------------------------------------------------------------------------------------------------
<FN>
FOR THE PERIOD ENDED DECEMBER 31, 1997. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
INDEXES ARE USED FOR COMPARATIVE PURPOSES ONLY. ALL INDEXES ARE NOT MANAGED,
ARE NOT AVAILABLE FOR INVESTMENT AND, UNLIKE ALL MUTUAL FUNDS, THEY DO NOT
ASSESS FEES.
</FN>
</TABLE>
BALANCED FUND
1997 was a record breaking year for U.S. stocks. For the first time ever,
the S&P 500 posted its third consecutive year of greater than 20% returns,
something that has never happened before. While not nearly as spectacular, the
U.S. bond market also had a good year. Even European stocks had a good year. The
one glaring exception to the good news was Asian markets where the wheels
appeared to come off in the fourth quarter.
The Fund did very well in 1997, easily beating its peer group for the year.
Our U.S. domestic stocks were the primary contributor to the Fund's performance
for the year. Our domestic equity holdings, which mimic the Value Fund, handily
beat its peer group. Our foreign stock holdings trailed our domestic stocks, but
contributed to our overall performance and significantly outperformed their peer
group. Our fixed income holdings also made a solid contribution, outperforming
its peer group.
The U.S. economy looks like it should continue to grow nicely without
sparking an upsurge in inflation. In this environment, U.S. fixed income
securities should continue to perform well. With that support, U.S. stocks
should generally do well, but we do not expect to continue the spectacular
performance of the past three years. In addition, we expect the disparity in
U.S. stock performance that we saw develop in the second half of 1997 to
continue into 1998. European
============================================================================= 13
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)===================================
economies and markets have been improving and are likely to continue to do so
this year. The major uncertainty is the situation in Asia where it is difficult
to gage the severity of the problems and what impact they may have on the rest
of the world's economies.
Partly in response to our expectation that U.S. stocks will demonstrate
more differentiated performance, we restructured the Fund's equity holdings in
the fourth quarter. We are returning to a four style structure the Fund followed
in its first few years. The Fund's domestic stock holdings now consists of 3
separate portfolios; large capitalization value, large capitalization stable
growth and small capitalization value. The large cap value portfolio will
continue to replicate the Rembrandt Value Fund. We believe this structure will
give us better control over the risks we take while gaining better exposure to
some of the opportunities we see in the market.
[Line Graph Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
COMMON SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Balanced 60/40 S&P 500 Composite Lipper Flexible
Fund Index Blended with Portfolio Funds
40% Lehman Brothers
Aggregate Bond Index
<S> <C> <C> <C>
1/31/93 10,000 10,000 10,000
12/93 10,612 10,916 10,859
12/94 10,388 10,682 10,818
12/95 12,658 13,384 14,054
12/96 14,322 15,199 16,191
12/97 17,487 18,040 20,059
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
INVESTOR SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Balanced 60/40 S&P 500 Composite Lipper Flexible
Fund Index Blended with Portfolio Funds
40% Lehman Brothers
Aggregate Bond Index
<S> <C> <C> <C>
3/31/93 10,000 10,000 10,000
12/93 10,363 10,651 10,545
12/94 10,125 10,423 10,506
12/95 12,304 13,059 13,648
12/96 13,887 14,830 15,724
12/97 16,914 17,602 19,480
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS OF SHARES ONE-YEAR RETURN ANNUALIZED 3 YEAR RETURN ANNUALIZED INCEPTION TO DATE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common 22.10% 18.96% 12.04%
- ----------------------------------------------------------------------------------------------------
Investor 21.80% 18.66% 11.46%
- ----------------------------------------------------------------------------------------------------
<FN>
FOR THE PERIOD ENDED DECEMBER 31, 1997. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
INDEXES ARE USED FOR COMPARATIVE PURPOSES ONLY. ALL INDEXES ARE NOT MANAGED,
ARE NOT AVAILABLE FOR INVESTMENT AND, UNLIKE ALL MUTUAL FUNDS, THEY DO NOT
ASSESS FEES.
</FN>
</TABLE>
14 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
VALUE FUND
1997 was a record breaking year for U.S. stocks. For the first time ever,
the S&P 500 posted its third consecutive year of greater than 20% returns,
something that has never happened before. The Value Fund had a good year, easily
beating its peer group. It was, however, a much more dramatic year than we've
seen for a while, with the market making new record highs only to plunge,
recover, plunge again and finally recover to end near its high. Leadership
shifted between large and small stocks as well.
The best performing sectors of the S&P 500 were the financial, health care
and telephone utilities; the worst sectors were basic materials, electric
utilities and energy. The Value Fund was well represented in the best performing
sectors. In addition, an under-weighting in the technology sector contributed to
our superior performance, since technology under-performed for the year.
In 1995, we structured the Value Fund as a value tilted core portfolio.
This allowed us to capture the large capitalization bias of the S&P 500 as the
market began an unprecedented three year surge. We believe that this general
market surge is unlikely to continue. Future advances are likely to be more
muted than the past three years. It should be an environment where stock picking
will become more important. In anticipation of this new trend, we restructured
the Fund in the fourth quarter to return it to a more concentrated pure value
style.
[Line Graph Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
COMMON SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Value S&P 500 Lipper Growth & Income
Fund Composite Index Funds Average
<S> <C> <C> <C>
1/31/93 10,000 10,000 10,000
12/93 10,583 10,913 11,064
12/94 10,583 11,056 10,982
12/95 13,972 15,206 14,424
12/96 16,827 18,695 17,464
12/97 21,931 24,931 22,204
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
INVESTOR SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Value S&P 500 Lipper Growth & Income
Fund Composite Index Funds Average
<S> <C> <C> <C>
3/31/93 10,000 10,000 10,000
12/93 10,131 10,544 10,691
12/94 10,111 10,682 10,612
12/95 13,318 14,692 13,937
12/96 15,994 18,063 16,875
12/97 20,824 24,088 21,455
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS OF SHARES ONE-YEAR RETURN ANNUALIZED 3 YEAR RETURN ANNUALIZED INCEPTION TO DATE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common 30.49% 27.54% 17.26%
- ----------------------------------------------------------------------------------------------------
Investor 30.20% 27.23% 16.74%
- ----------------------------------------------------------------------------------------------------
<FN>
FOR THE PERIOD ENDED DECEMBER 31, 1997. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
INDEXES ARE USED FOR COMPARATIVE PURPOSES ONLY. ALL INDEXES ARE NOT MANAGED,
ARE NOT AVAILABLE FOR INVESTMENT AND, UNLIKE ALL MUTUAL FUNDS, THEY DO NOT
ASSESS FEES.
</FN>
</TABLE>
============================================================================= 15
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)===================================
GROWTH FUND
The U.S. equity market returned in excess of 20% for its third consecutive
year, fueled by a favorable environment of solid economic growth and low
inflation. The Fund's performance benefited from favorable selection in the
healthcare sector, with stocks such as Bristol-Myers Squibb and Pfizer
appreciating over 70% as investors sought steady growth companies with promising
product pipelines. Low unemployment leading to high consumer confidence helped
the Fund's consumer cyclical holdings. Carnival Corporation and Royal Caribbean
Cruises exhibited strong returns as consumers' increased focus on travel and
entertainment continued. The Fund also benefited from excellent stock selection
and an underweighting in basic materials, one of the worst performing sectors of
the S&P 500.
The Fund's greatest challenges occurred largely in the capital goods and
energy areas. Earnings disappointments early in the year by York International
and Fluor Corporation resulted in substantial stock price declines. Because of
uncertainty concerning future earnings visibility, these holdings were
eliminated. The fourth quarter proved difficult as lower crude prices
contributed to a sell-off in the energy sector, with the Fund's oil service
stocks hindering performance. In addition, after leading the market for the
first nine months of the year, technology stocks suffered significant declines
as turmoil in the Far East ignited investors' concerns about near-term earnings
growth.
Despite the recent volatility in the Asian markets, the Advisor remains
optimistic about domestic equities due to low interest rates and the strong
economy. The flight to quality should also benefit the U.S. market, as should
the strong inflows of retirement savings of the aging U.S. population.
16 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
[Line Graph Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
COMMON SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Growth S&P 500 Lipper Growth & Income
Fund Composite Index Funds Average
<S> <C> <C> <C>
1/31/93 10,000 10,000 10,000
12/93 10,418 10,913 10,963
12/94 10,204 11,056 10,768
12/95 13,428 15,206 14,108
12/96 16,341 18,695 16,873
12/97 20,260 24,931 21,142
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
INVESTOR SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Growth S&P 500 Lipper Growth & Income
Fund Composite Index Funds Average
<S> <C> <C> <C>
3/31/93 10,000 10,000 10,000
12/93 10,079 10,544 10,812
12/94 9,835 10,682 10,619
12/95 12,913 14,692 13,913
12/96 15,677 18,063 16,640
12/97 19,385 24,088 20,850
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS OF SHARES ONE-YEAR RETURN ANNUALIZED 3 YEAR RETURN ANNUALIZED INCEPTION TO DATE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common 23.98% 25.69% 15.39%
- ----------------------------------------------------------------------------------------------------
Investor 23.65% 25.38% 14.59%
- ----------------------------------------------------------------------------------------------------
<FN>
FOR THE PERIOD ENDED DECEMBER 31, 1997. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
INDEXES ARE USED FOR COMPARATIVE PURPOSES ONLY. ALL INDEXES ARE NOT MANAGED,
ARE NOT AVAILABLE FOR INVESTMENT AND, UNLIKE ALL MUTUAL FUNDS, THEY DO NOT
ASSESS FEES.
</FN>
</TABLE>
INTERNATIONAL EQUITY FUND
1997 was a turbulent year for international stock markets. The European
markets turned out good performance, but the Far East markets declined sharply.
Positive developments in Europe were caused by lower bond rates, better
corporate earnings, low inflation and improving economic growth. Corporate
restructuring and privatisations also had a positive influence on European
markets. Nevertheless, the growth of continental European economics is still
hindered by high unemployment, and restrictive government policies, which were
developed to comply with the admission to the European Monetary Union (EMU). The
Mediterranean European countries like Spain, Italy and Portugal made good
progress in this respect. The conversion of their inflation rates and interest
rates to the European average gave stock markets in these countries a boost.
In Japan, the stock markets started the year with a decline caused by
worries about the influence a tax hike would have on the Japanese economy. After
a recovery in the second quarter of 1997, the market declined further under the
influence of bad loan problems in the financial sector, which were themselves
reinforced by the declining stock markets.
In the latter part of the year, the severe currency problems in the Asian
countries caused a further drag on the Japanese stock market. After a negative
first quarter, Hong Kong recovered in the second quarter, but then took a dive
in the second part of the
============================================================================= 17
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED)===================================
year. The Asian currency crisis, and the attack on the Hong Kong dollar peg,
caused high money market rates. In the Asian countries like Thailand, Malaysia,
Indonesia and to a lesser extent Singapore, the overinvestment and reliance on
too much short-term foreign debt, together with a system of overvalued
currencies tied to the U.S. dollar, took a severe toll on the stock markets of
these countries. A badly managed financial system worsened problems. The
volatility and turbulence in the Asian markets led the Fund to move towards an
underweight position in Japan and an overweight position in Europe, to sell
Latin American holdings, and to concentrate on fewer and more stable holdings.
Also, the appreciation of the U.S. dollar versus the Japanese yen and most
European and Asian currencies hurt the results of the Fund in 1997. The Fund
does not hedge into the dollar.
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 bodes well for equity investing. However, because of the possible
deflationary effect of the Asian crisis and its impact on corporate earnings,
the picture is getting less optimistic. For Asia, it is still too early to state
that the worst for the stock markets is over. Restructuring of the financial
system and corporate debt as well as deregulation are necessary before Asia can
regain its role as a growth area of the world economy. All in all, in sum we are
only moderately positive for the Asian stock markets in the coming year.
[Line Graph Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
COMMON SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt International Morgan Stanley Lipper International
Equity Fund MSCI EAFE Index Funds Average
<S> <C> <C> <C>
1/31/93 10,000 10,000 10,000
12/93 12,715 13,257 13,506
12/94 13,137 14,288 13,422
12/95 14,980 15,891 14,701
12/96 16,491 16,854 16,444
12/97 17,243 17,154 17,339
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
INVESTOR SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt International Morgan Stanley Lipper International
Equity Fund MSCI EAFE Index Funds Average
<S> <C> <C> <C>
4/30/93 10,000 10,000 10,000
12/93 11,246 10,810 11,903
12/94 11,592 11,651 11,829
12/95 13,190 12,958 12,957
12/96 14,490 13,744 14,493
12/97 15,110 13,988 15,282
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS OF SHARES ONE-YEAR RETURN ANNUALIZED 3 YEAR RETURN ANNUALIZED INCEPTION TO DATE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common 4.56% 9.49% 11.38%
- ----------------------------------------------------------------------------------------------------
Investor 4.28% 9.24% 9.74%
- ----------------------------------------------------------------------------------------------------
<FN>
FOR THE PERIOD ENDED DECEMBER 31, 1997. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
INDEXES ARE USED FOR COMPARATIVE PURPOSES ONLY. ALL INDEXES ARE NOT MANAGED,
ARE NOT AVAILABLE FOR INVESTMENT AND, UNLIKE ALL MUTUAL FUNDS, THEY DO NOT
ASSESS FEES.
</FN>
</TABLE>
18 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
SMALL CAP FUND
Following six months of strong outperformance, small cap stocks trailed the
large cap indexes in the last quarter of the year. The perceived safe-haven
status of the large caps in uncertain times and their higher liquidity, led to
investors shunning small cap stocks. Also, the Rembrandt Small Cap Fund, with
its focus on high-growth companies, went through some difficult months since the
disruptions in Asia sparked widespread selling, particularly in the technology
sector. Nevertheless, the Fund succeeded in outperforming the Russell 2000
Index, its style benchmark of small cap growth companies, in the quarter as well
as the year.
In their rush to sell positions, it appeared investors did not discriminate
between high-quality growth stocks and the mediocre ones. Many emerging-growth
stocks, therefore, are now trading at valuation levels that unjustly discount
their superior growth potential. After the recent sell-off, attractive issues
with strong niche positions and proprietary technology can be found in the
technology and health care sectors. While technology is just one of our favored
sectors, we believe it is technological innovation that is driving virtually all
sectors and industries of the U.S. economy.
Amidst the volatility of the markets over the last few months, a bright
spot for small caps in general may prove to be earnings. Earnings estimates for
small cap issues are comparing increasingly favorably to their large cap
counterparts. In addition, the valuations of small cap growth stocks have fallen
to historically low levels relative to the valuations of small cap value stocks.
And since earnings growth is a harbinger of future stock-price performance,
small cap growth stocks in particular may be poised for a rebound when the smoke
clears and fears subside.
Since the Fund has a SMALL CAP GROWTH STYLE and focuses on companies
showing high earnings growth rather than value characteristics, it is prudent to
assume a style benchmark that reflects the performance of the investment
universe that is applicable to the Fund. As a result the Fund is adopting the
Russell 2000 Growth Index as its new benchmark versus the previous benchmark of
the Russell 2000 Index. Although the Fund aims at outperforming the Russell 2000
Index over time as well, in the short term the Fund's performance will correlate
more closely with the Russell 2000 Growth Index.
============================================================================= 19
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED) ==================================
[Line Graph Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
COMMON SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Small Cap Frank Russell Frank Russell Lipper Small Cap
Fund 2000 Index 2000 Growth Index Funds Average
<S> <C> <C> <C> <C>
1/31/93 10,000 10,000 10,000 10,000
12/93 10,300 11,500 11,482 11,198
12/94 9,654 11,290 11,424 10,926
12/95 12,756 14,501 15,083 14,317
12/96 15,233 16,895 18,102 15,929
12/97 17,654 20,673 21,859 17,992
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
INVESTOR SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Small Cap Frank Russell Frank Russell Lipper Small Cap
Fund 2000 Index 2000 Growth Index Funds Average
<S> <C> <C> <C> <C>
4/30/93 10,000 10,000 10,000 10,000
12/93 11,079 11,725 11,830 11,922
12/94 10,355 11,511 11,769 11,632
12/95 13,640 14,785 15,539 15,241
12/96 16,257 17,226 18,650 16,957
12/97 18,768 21,078 22,520 19,153
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS OF SHARES ONE-YEAR RETURN ANNUALIZED 3 YEAR RETURN ANNUALIZED INCEPTION TO DATE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common 15.89% 22.29% 12.02%
- ----------------------------------------------------------------------------------------------------
Investor 15.45% 21.93% 13.55%
- ----------------------------------------------------------------------------------------------------
<FN>
FOR THE PERIOD ENDED DECEMBER 31, 1997. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
INDEXES ARE USED FOR COMPARATIVE PURPOSES ONLY. ALL INDEXES ARE NOT MANAGED,
ARE NOT AVAILABLE FOR INVESTMENT AND, UNLIKE ALL MUTUAL FUNDS, THEY DO NOT
ASSESS FEES.
</FN>
</TABLE>
ASIAN TIGERS FUND
1997 will be remembered as the year of the Asian meltdown, as equity and
currency values crumbled. The collapse can be attributable initially to the
realization that fixed exchange rates were not viable in the face of sluggish
economic growth and over-investment mainly in unproductive assets often financed
by mis-priced capital sourced from overseas. Investors reacted to the decline in
currency values by aggressively selling shares. Equity markets in Jakarta,
Bangkok and Seoul registered declines in excess of 70% in U.S. dollar terms
while Manila and Kuala Lumpur fared little better dropping by over 60%. In
comparison, Singapore dropped by 43%, Hong Kong by approximately 20% and Taiwan
closed the year virtually unchanged. On the positive side, Bombay recorded a
gain of just under 8% largely as a result of the closed nature of its markets
and its low reliance on foreign capital.
The Fund was not immune to developments in the market and a cautious stance
was adopted throughout most of the year. Weightings were lowered significantly
in Malaysia from 15% in July to under 5% at the end of the year. Similarly, the
Fund's exposure to Indonesia was lowered from 6.5% to approximately 1.5% while
the weighting in Thailand had been reduced during early 1997 from 8% to 3% in
July and just over 1% at year-end. On the positive side, weightings were
increased in India and in Hong Kong.
20 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
These changes in asset allocation were undertaken in response to perceived
changes in the prospects for the markets in an effort to maintain the Fund's
performance.
Immediate prospects for Asian markets appear uncertain. The continuing lack
of confidence particularly in Indonesia and Korea are spreading havoc even in
markets such as Singapore, which are often regarded as safe havens. A return of
stability is heavily dependent on the political will to implement far-reaching
reforms with the supervision of the International Monetary Fund. Korea and
Thailand seem to have taken the first steps in this direction although Indonesia
currently seems to be wavering. Hong Kong is expected to maintain its currency
peg in the near term although at substantial cost to the real economy and asset
prices. The Philippines will be troubled by problems in its property and banking
sectors while the economy in Singapore may face negative growth as the full
impact of the problems in Malaysia and Indonesia take its toll. India is
expected to fare relatively better although a general election in March is
likely to weigh heavily on investor sentiment. In summary, the immediate
prospects for Asia appear gloomy. On a longer term basis, Asia still retains a
number of positive fundamental attributes which will form the foundations for a
recovery in future years.
[Line Graph Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
COMMON SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Asian Morgan Stanley MSCI Lipper Pacific ex-Japan
Tiger Fund Pacific ex-Japan Index Funds Average
<S> <C> <C> <C>
1/31/94 10,000 10,000 10,000
12/94 9,450 8,819 8,805
12/95 10,547 9,962 8,977
12/96 12,081 12,009 9,781
12/97 7,734 8,286 6,307
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
INVESTOR SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Asian Morgan Stanley MSCI Lipper Pacific ex-Japan
Tiger Fund Pacific ex-Japan Index Funds Average
<S> <C> <C> <C>
1/31/94 10,000 10,000 10,000
12/94 9,434 8,819 8,805
12/95 10,488 9,962 8,977
12/96 11,979 12,009 9,781
12/97 7,637 8,286 6,307
DOLLARS (000)
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
CLASS OF SHARES ONE-YEAR RETURN ANNUALIZED 3 YEAR RETURN ANNUALIZED INCEPTION TO DATE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common -35.98% -6.46% -6.11%
- ----------------------------------------------------------------------------------------------------
Investor -36.25% -6.80% -6.45%
- ----------------------------------------------------------------------------------------------------
<FN>
FOR THE PERIOD ENDED DECEMBER 31, 1997. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
INDEXES ARE USED FOR COMPARATIVE PURPOSES ONLY. ALL INDEXES ARE NOT MANAGED,
ARE NOT AVAILABLE FOR INVESTMENT AND, UNLIKE ALL MUTUAL FUNDS, THEY DO NOT
ASSESS FEES.
</FN>
</TABLE>
============================================================================= 21
<PAGE>
MANAGER'S DISCUSSION AND ANALYSIS (CONTINUED) ==================================
LATIN AMERICA EQUITY FUND
The recovery in November and December was not enough to offset the losses
in October when the market took a hit due to the spill-over effect from Asia.
The Fund's overweighting in Brazil did not pay off in the last quarter since
Brazil was the country that suffered the most due to uncertainties about the
currency. However, stock picking more than offset the country allocation, and
the Fund went up by 35.5%, outperforming the peer group by 10% in 1997. For 1998
we expect different dynamics to play a role in the individual markets.
Brazil will have to face tough fiscal and monetary measures as an answer to
pressures arising from the Asian crisis. These factors will restrict growth in
1998 but, on the other hand, the crisis brought a sense of urgency and important
structural reforms have been approved by Congress. This will certainly lead to
improved fundamentals which, together with low valuations, cost-cutting and
privatisations, lead us to remain positive. Mexico presented the best
macroeconomic picture, with gross domestic product (GDP) growth above 7%,
falling inflation and a recovery in consumption. Valuations, however, are above
the average for the region and we remain underweighted in the country. Argentina
also showed impressive GDP growth (above 7%) and the market should continue
benefiting from a reduction in unemployment and a growing pension fund industry.
Likewise, Chile also recorded strong GDP growth, though the exposure of its
exports to Asia and its dependence on commodities, as well as higher interest
rates, are likely to affect the Chilean market in 1998. In Peru, the reforms
implemented during the past few years have raised its growth potential. This
growth has however been restricted to a few sectors, while its market has been
prone to fluctuations. Political uncertainties still exist. We remain close to
neutral in Peru.
In summary, we remain positive about the region. Fundamentals are still in
place, and, although economic growth will not reach 1997 levels, it will still
be around 3.5%. Valuations are quite attractive: the region currently trades at
a profit to earnings ratio of around 14, and earnings per share should grow by
18% in 1998. The major risk for this picture would be a contraction in global
liquidity as consequence of a worsening situation in Asia.
22 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
[Line Graph Omitted]
Plot Points are as follows:
<TABLE>
<CAPTION>
COMMON SHARE CLASS
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
Date Rembrandt Latin America Morgan Stanley MSCI Emerging Lipper Latin America
Equity Fund Markets Latin America Free Index Funds Average
<S> <C> <C> <C>
6/30/96 10,000 10,000 10,000
12/96 10,240 10,396 10,406
12/97 13,875 13,594 13,036
DOLLARS (000)
</TABLE>
- ---------------------------------------------------------------------
CLASS OF SHARES ONE-YEAR RETURN ANNUALIZED INCEPTION TO DATE
- ---------------------------------------------------------------------
Common 35.50% 24.23%
- ---------------------------------------------------------------------
FOR THE PERIOD ENDED DECEMBER 31, 1997. PAST PERFORMANCE OF THE FUND DOES NOT
PREDICT FUTURE RESULTS.
INDEXES ARE USED FOR COMPARATIVE PURPOSES ONLY. ALL INDEXES ARE NOT MANAGED,
ARE NOT AVAILABLE FOR INVESTMENT AND, UNLIKE ALL MUTUAL FUNDS, THEY DO NOT
ASSESS FEES.
============================================================================= 23
<PAGE>
================================================================================
REPORT OF INDEPENDENT AUDITORS
TRUSTEES AND SHAREHOLDERS
REMBRANDT FUNDS(R)
We have audited the accompanying statements of net assets of the Treasury Money
Market Fund, Government Money Market Fund, Money Market Fund, Tax-Exempt Money
Market Fund, Fixed Income Fund, Intermediate Government Fixed Income Fund,
Tax-Exempt Fixed Income Fund, International Fixed Income Fund, Balanced Fund,
Value Fund, Growth Fund, International Equity Fund, Small Cap Fund, and Latin
America Equity Fund and the schedules of investments and statements of assets
and liabilities of the Real Estate Fund and Asian Tigers Fund of Rembrandt
Funds(R), (the "Trust"), as of December 31, 1997, 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, 1997 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, Latin America Equity Fund, Real Estate Fund and Asian Tigers Fund at
December 31, 1997, 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.
/S/Signature
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
January 30, 1998
24 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
STATEMENT OF NET ASSETS
TREASURY MONEY MARKET FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
CASH EQUIVALENT -- 5%
U.S. TREASURY OBLIGATIONS -- 95%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
U.S. TREASURY OBLIGATIONS -- 94.4%
U.S. Treasury Bills (A)
4.956%, 01/08/98 $ 5,000 $ 4,995
4.985%, 01/08/98 3,000 2,997
5.075%, 01/08/98 9,000 8,991
5.095%, 01/08/98 10,000 9,990
5.081%, 01/15/98 10,000 9,980
5.154%, 01/15/98 15,000 14,970
5.243%, 01/22/98 10,000 9,970
5.251%, 01/22/98 5,000 4,985
5.254%, 01/22/98 10,000 9,970
5.154%, 01/29/98 10,000 9,960
5.235%, 02/05/98 7,000 6,965
5.127%, 02/12/98 7,000 6,959
5.289%, 02/12/98 7,000 6,957
5.137%, 02/19/98 7,000 6,952
5.121%, 03/05/98 3,000 2,973
5.281%, 03/05/98 7,000 6,936
5.307%, 03/26/98 7,000 6,914
U.S. Treasury Notes
5.625%, 01/31/98 10,000 9,997
6.125%, 03/31/98 15,000 15,025
7.875%, 04/15/98 11,000 11,073
5.125%, 04/30/98 6,000 5,993
SHARES /FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
U.S. Treasury Notes (continued)
5.875%, 04/30/98 $5,000 $ 5,007
6.125%, 05/15/98 6,000 6,013
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $184,572) 184,572
--------
CASH EQUIVALENT -- 4.9%
SEI Daily Income Trust
Treasury II Portfolio 9,518 9,518
--------
TOTAL CASH EQUIVALENT
(Cost $9,518) 9,518
--------
TOTAL INVESTMENTS -- 99.3%
(Cost $194,090) 194,090
--------
OTHER ASSETS AND LIABILITIES, NET -- 0.7% 1,393
--------
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization -- no par value)
based on 188,756,859 outstanding shares
of beneficial interest 188,757
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 6,722,764 outstanding shares
of beneficial interest 6,723
Accumulated net realized gain on investments 3
--------
TOTAL NET ASSETS -- 100.0% $195,483
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $1.00
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE 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) THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS THE EFFECTIVE YIELD AS
OF DECEMBER 31, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
============================================================================= 25
<PAGE>
================================================================================
STATEMENT OF NET ASSETS
GOVERNMENT MONEY MARKET FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
REPURCHASE AGREEMENTS -- 37%
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 63%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 64.3%
Federal Farm Credit Bank
5.750%, 09/11/98 $12,000 $ 11,998
Federal Farm Credit Bank Discount Notes
5.670%, 08/18/98 6,000 5,792
5.690%, 11/23/98 4,000 3,805
Federal Home Loan Bank
5.575%, 02/20/98 5,000 5,000
5.710%, 06/23/98 5,000 4,999
Federal Home Loan Bank Discount Notes
5.639%, 01/16/98 3,000 2,993
5.660%, 02/20/98 4,000 3,970
5.670%, 08/17/98 6,000 5,793
Federal Home Loan Mortgage
Corporation Discount Notes
5.680%,01/14/98 9,100 9,081
5.590%, 01/23/98 8,000 7,973
5.590%, 01/30/98 7,900 7,865
5.710%, 02/25/98 10,000 9,914
5.700%, 03/06/98 7,000 6,930
5.710%, 03/10/98 7,000 6,925
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
Federal National Mortgage
Association
5.740%, 06/09/98 $ 5,500 $ 5,501
Federal National Mortgage
Association Discount Notes
5.710%, 02/11/98 10,000 9,936
5.700%, 03/05/98 7,000 6,931
5.530%, 04/09/98 8,000 7,883
5.670%, 04/15/98 8,000 7,872
5.650%, 04/24/98 10,000 9,827
5.660%, 05/18/98 3,000 2,937
Federal National Mortgage
Association MTN
5.790%, 03/25/98 3,000 3,000
6.000%, 04/17/98 8,000 8,008
5.840%, 06/10/98 5,000 4,999
Student Loan Marketing
Association (A)
5.779%, 01/06/98 10,000 10,000
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $169,932) 169,932
--------
REPURCHASE AGREEMENTS -- 37.3%
J.P. Morgan
6.760%, dated 12/31/97, matures
01/02/98, repurchase price
$58,532,004 (collateralized by
U.S. Government Agency
Instruments, total market
value: $59,365,101) 58,201 58,201
Prudential Securities
6.760%, dated 12/31/97, matures
01/02/98, repurchase price
$40,489,958 (collateralized by
U.S. Government Agency and
Treasury Instruments, total market
value: $41,188,826) 40,381 40,381
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $98,582) 98,582
--------
26 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
STATEMENT OF NET ASSETS
DESCRIPTION VALUE (000)
================================================================================
TOTAL INVESTMENTS -- 101.6%
(Cost $268,514) $268,514
--------
OTHER ASSETS AND LIABILITIES, NET -- (1.6%) (4,323)
--------
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization -- no par value)
based on 255,231,569 outstanding shares
of beneficial interest 255,231
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 8,932,275 outstanding shares
of beneficial interest 8,932
Undistributed net investment income 32
Accumulated net realized loss on investments (4)
--------
TOTAL NET ASSETS -- 100.0% $264,191
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $1.00
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE 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 REPORTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON DECEMBER 31, 1997. THE MATURITY DATE SHOWN IS THE
NEXT SCHEDULED RESET DATE.
MTN -- MEDIUM TERM NOTE
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
============================================================================= 27
<PAGE>
STATEMENT OF NET ASSETS
MONEY MARKET FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
CERTIFICATES OF DEPOSIT -- 40%
BANK NOTE -- 1%
REPURCHASE AGREEEMENTS -- 28%
COMMERCIAL PAPER -- 25%
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 4%
CORPORATE BONDS -- 2%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
BANK NOTE -- 1.4%
Morgan Guaranty Trust (New York)
5.965%, 06/22/98 $10,000 $ 10,004
--------
TOTAL BANK NOTE
(Cost $10,004) 10,004
--------
CERTIFICATES OF DEPOSIT -- 39.8%
BANKS -- 39.8%
Bank of Nova Scotia (New York)
5.925%, 08/14/98 28,000 28,009
Barclays Bank (New York)
5.790%, 03/03/98 15,000 15,000
5.870%, 08/27/98 15,000 14,995
Bayersche Vereinsbank
(New York)
5.870%, 01/08/98 25,000 25,000
Canadian Imperial Bank of
Commerce (New York)
5.870%, 01/06/98 15,000 15,000
5.720%, 03/04/98 15,000 15,000
Chase Manhatten Bank
5.650%, 01/14/98 15,000 15,000
Commerzbank (New York)
5.875%, 08/17/98 18,000 17,998
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
Credit Suisse First Boston
(New York)
5.870%, 03/16/98 $ 7,000 $ 7,000
5.660%, 03/18/98 20,000 19,998
Deutsche Bank (New York)
5.870%, 08/10/98 10,000 9,995
National Westminster (New York)
5.870%, 08/10/98 10,000 9,994
Rabobank Nederland
(New York)
5.690%, 03/31/98 13,000 12,997
5.700%, 05/12/98 13,000 12,996
Regions Bank (Alabama)
5.650%, 02/03/98 15,000 15,000
6.000%, 06/25/98 5,000 5,001
Societe Generale (New York)
5.810%, 03/05/98 15,000 15,000
5.840%, 09/16/98 10,000 10,002
Swiss Bank (New York)
5.750%, 02/12/98 10,000 10,000
5.980%, 03/19/98 10,000 10,001
5.870%, 08/19/98 10,000 9,998
--------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $293,984) 293,984
--------
COMMERCIAL PAPER -- 24.9%
BANKS -- 2.0%
Nationsbank
5.860%, 01/30/98 15,000 14,930
--------
BEAUTY PRODUCTS -- 2.0%
Colgate Palmolive
5.830%, 01/07/98 15,000 14,985
--------
FINANCIAL SERVICES -- 17.1%
American Express Credit
5.790%, 02/04/98 15,000 14,919
Centric Capital
5.850%, 02/09/98 5,000 4,969
Enterprise Funding
5.880%, 01/05/98 7,237 7,232
General Electric Capital
5.810%, 04/15/98 15,000 14,753
28 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
STATEMENT OF NET ASSETS
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
FINANCIAL SERVICES -- (continued)
Golden Managers Acceptance
5.920%, 01/16/98 $ 20,000 $ 19,951
Merrill Lynch & Company
5.770%, 01/28/98 15,000 14,936
5.830%, 02/13/98 15,000 14,897
Norwest
5.760%, 02/11/98 20,000 19,870
Receivables Capital
5.860%, 02/06/98 15,000 14,913
--------
126,440
--------
WHOLESALE -- 3.8%
Sysco
5.790%, 02/10/98 18,000 17,885
5.780%, 03/10/98 10,000 9,892
--------
27,777
--------
TOTAL COMMERCIAL PAPER
(Cost $184,132) 184,132
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 4.2%
Federal Farm Credit Bank
5.750%, 09/11/98 10,000 9,994
Federal National Mortgage
Association
5.250%, 03/25/98 5,500 5,494
Federal National Mortgage
Association MTN
5.500%, 02/18/98 15,500 15,494
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $30,982) 30,982
--------
CORPORATE BONDS -- 2.0%
Associates of North America
7.300%, 03/15/98 10,000 10,031
PepsiCo
6.125%, 01/15/98 5,050 5,051
--------
TOTAL CORPORATE BONDS
(Cost $15,082) 15,082
--------
REPURCHASE AGREEMENTS -- 27.4%
J.P. Morgan
6.750%, dated 12/31/97, matures
01/02/98, repurchase price
$154,714,276 (collateralized by
U.S. Government Agency
Instruments, total market
value: $157,220,275) 154,022 154,022
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
Prudential
6.750%, dated 12/31/97, matures
01/02/98, repurchase price
$48,480,088 (collateralized by
U.S. Government Agency and
Treasury Instruments, total
market value: $49,268,134) $48,417 $ 48,417
--------
TOTAL REPURCHASE AGREEMENTS
(Cost $202,439) 202,439
--------
TOTAL INVESTMENTS -- 99.7%
(Cost $736,623) 736,623
--------
OTHER ASSETS AND LIABILITIES, NET -- 0.3% 2,395
--------
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization -- no par value)
based on 737,731,970 outstanding shares
of beneficial interest 737,731
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 1,282,279 outstanding shares
of beneficial interest 1,283
Accumulated net realized gain on investments 4
--------
TOTAL NET ASSETS -- 100.0% $739,018
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $1.00
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE 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.
MTN -- MEDIUM TERM NOTE
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
============================================================================= 29
<PAGE>
================================================================================
STATEMENT OF NET ASSETS
TAX-EXEMPT MONEY MARKET FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
CASH EQUIVALENTS -- 4%
MUNICIPAL BONDS -- 96%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
MUNICIPAL BONDS -- 96.1%
ALABAMA -- 2.2%
Columbia County, Pollution
Control RB, Alabama
Power Project, Series C
4.500%, 01/02/98 (A) (B) $ 5,600 $ 5,600
-------
ALASKA -- 4.9%
Valdez, Industrial Development
Authority RB, Exxon
Pipeline Company Project
4.950%, 01/02/98 (A) (B) 12,500 12,500
-------
ARIZONA -- 2.4%
Coconino County, Pollution Control
RB, Nevada Power, Series E, LOC
3.700%, 01/07/98 (A) (B) 4,000 4,000
Salt River, Agricultural Improvement
& Power District TECP
3.750%, 03/09/98 2,000 2,000
-------
6,000
-------
CALIFORNIA -- 4.0%
Contra Costa County TRAN
4.500%, 07/01/98 10,000 10,033
-------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
FLORIDA -- 6.3%
Florida State Municipal Power Agency
TECP, Initial Pooled War Project,
Series A, LOC
3.650%, 02/05/98 $ 6,000 $ 6,000
Sunshine State Governmental
Financing Commission TECP,
Series 1986, LOC
3.750%, 02/03/98 10,000 10,000
-------
16,000
-------
GEORGIA -- 8.5%
Burke County, Pollution Control RB,
Georgia Power Company
Plant Vogtle Project
4.500%, 01/02/98 (A) (B) 9,700 9,700
Monroe County, Pollution Control
RB, Georgia Power Company
Plant Scherer Project
4.500%, 01/02/98 (A) (B) 2,300 2,300
Monroe County, Pollution
Control RB, Gulf Power
Plant Project, Series 2
4.500%, 01/02/98 (A) (B) 9,550 9,550
-------
21,550
-------
ILLINOIS -- 0.1%
Illinois State Development Finance
Authority RB, Saint Xavier
University Project
4.000%, 01/07/98 (A) (B) 180 180
-------
INDIANA -- 3.0%
Sullivan, National Rural Utilities
TECP, Indiana Hoosier Energy
Rural Electric Project,
Series L-4, LOC
3.650%, 02/04/98 5,100 5,100
Sullivan, National Rural Utilities
TECP, Indiana Hoosier Energy
Rural Electric Project,
Series L-5, LOC
3.750%, 03/04/98 2,600 2,600
-------
7,700
-------
30 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
STATEMENT OF NET ASSETS
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
KANSAS -- 3.2%
Burlington, Pollution Control
TECP, Series 1995, LOC
3.850%, 01/05/98 $ 8,000 $ 8,000
-------
KENTUCKY -- 1.4%
Jefferson County, Louisville Gas &
Electric Utilities Project TECP,
Series 1996-A
3.750%, 01/13/98 3,600 3,600
-------
LOUISIANA -- 5.5%
Jefferson Parish, Hospital Service
RB, District # 2, FGIC
3.800%, 01/07/98 (A) (B) 12,000 12,000
Louisiana State District Sales Tax
Recovery RB, Series 88,
MBIA
4.250%, 07/01/98 2,000 2,003
-------
14,003
-------
MARYLAND -- 1.6%
Maryland State Health & Higher
Education RB, Pooled Loan
Program, Series B (A) (B)
3.750%, 01/07/98 4,100 4,100
-------
MICHIGAN -- 3.2%
Michigan State GO
5.400%, 09/30/98 8,000 8,042
-------
MINNESOTA -- 2.8%
Becker, Pollution Control TECP,
Northern States Power Project,
Series 1993-B
3.800%, 01/07/98 3,000 3,000
Hennepin County RB, Series C (A)
3.850%, 01/07/98 4,000 4,000
-------
7,000
-------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
MISSISSIPPI -- 3.9%
Jackson County, Chevron
USA Project
4.950%, 01/02/98 (A) (B) $ 9,960 $ 9,960
-------
MISSOURI -- 3.4%
Missouri State Health & Educational
Facilities Authority RB, Washington
University Project, Series A, LOC
5.000%, 01/02/98 (A) (B) 8,500 8,500
-------
MONTANA -- 3.9%
Montana State TRAN
4.250%, 06/30/98 10,000 10,022
-------
NEBRASKA -- 2.7%
Omaha, Public Power District
TECP, LOC
3.800%, 01/08/98 6,800 6,800
-------
NEVADA -- 1.2%
Clark County, Industrial
Development RB, Series C
3.850%, 01/07/98 (A) (B) 3,000 3,000
-------
NEW MEXICO -- 3.2%
New Mexico State TRAN
4.500%, 06/30/98 8,000 8,025
-------
NEW YORK -- 3.9%
New York City GO,
Series 1993 A-4, LOC
4.950%, 01/02/98 (A) 1,100 1,100
New York City GO,
Series B, FGIC
4.150%, 01/02/98 (A) 5,000 5,000
New York City GO,
Series B-4
4.000%, 01/02/98 (A) (B) 3,800 3,800
-------
9,900
-------
============================================================================= 31
<PAGE>
================================================================================
STATEMENT OF NET ASSETS
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
OHIO -- 2.0%
Toledo-Lucas, Port Authority
Transportation Project
TECP, LOC
3.750%, 02/04/98 $ 5,000 $ 5,000
-------
OKLAHOMA -- 2.4%
Muskogee, Industrial Pollution
Control RB, Oklahoma Gas
& Electric, Series A
3.900%, 01/07/98 (A) 6,000 6,000
-------
SOUTH CAROLINA -- 2.5%
Piedmont, Municipal Power
Agency RB, MBIA
3.600%, 01/07/98 (A) 6,400 6,400
-------
TEXAS -- 11.4%
Board of Regents of the University
of Texas, System Revenue
Finance TECP, Series A
3.700%, 02/11/98 5,000 5,000
Harris County, Health Facilities
Special Facilities RB, MBIA
4.500%, 01/02/98 (A) 10,100 10,100
Texas State Higher Education
Authority RB, Series B, FGIC
3.800%, 01/07/98 (A) (B) 1,745 1,745
Texas State TRAN
4.750%, 08/31/98 12,000 12,070
-------
28,915
-------
VIRGINIA -- 3.9%
Virginia State, Penninsula Ports
Authority TECP, LOC
3.750%, 01/14/98 10,000 10,000
-------
SHARES /FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
WISCONSIN -- 0.6%
Wisconsin State Tranportation
TECP, Series 1997-A
3.700%, 01/02/98 $1,500 $ 1,500
--------
WYOMING -- 2.0%
Gillette, Campbell County,
Pacificorp Project TECP,
Series 1988, LOC
3.750%, 01/12/98 5,000 5,000
--------
TOTAL MUNICIPAL BONDS
(Cost $243,330) 243,330
--------
CASH EQUIVALENTS -- 3.6%
Dreyfus Tax-Exempt Cash
Management Fund 54 54
Provident Municipal Bond Fund 5,000 5,000
SEI Tax-Exempt Trust Institutional
Tax Free Portfolio 4,151 4,151
--------
TOTAL CASH EQUIVALENTS
(Cost $9,205) 9,205
--------
TOTAL INVESTMENTS -- 99.7%
(Cost $252,535) 252,535
--------
OTHER ASSETS AND LIABILITIES, NET -- 0.3% 703
--------
32 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
STATEMENT OF NET ASSETS
DESCRIPTION VALUE (000)
================================================================================
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization -- no par value)
based on 250,267,612 outstanding shares
of beneficial interest $250,267
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 2,977,577 outstanding shares
of beneficial interest 2,978
Accumulated net realized loss on investments (7)
--------
TOTAL NET ASSETS -- 100.0% $253,238
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $1.00
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE 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 REPORTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON DECEMBER 31, 1997. THE MATURITY DATE SHOWN IS THE
NEXT SCHEDULED RESET DATE.
(B) DEMAND OR PUT FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE THE LESSER OF
THE NEXT SCHEDULED RESET DATE OR DEMAND/PUT DATE.
GO -- GENERAL OBLIGATION
LOC -- SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT ISSUED BY A
MAJOR COMMERCIAL BANK OR FINANCIAL INSTITUTION.
RB -- REVENUE BOND
TECP -- TAX-EXEMPT COMMERCIAL PAPER
TRAN -- TAX & REVENUE ANTICIPATION NOTE
THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT SUPPORT FOR CERTAIN
SECURITIES AS DEFINED IN THE STATEMENT OF NET ASSETS:
FGIC -- FINANCIAL GUARANTY INSURANCE CORPORATION
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
============================================================================ 33
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
FIXED INCOME FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 13%
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 15%
U.S. TREASURY OBLIGATIONS -- 27%
REPURCHASE AGREEMENT -- 3%
COMMERCIAL PAPER -- 3%
CORPORATE OBLIGATIONS -- 24%
FOREIGN CORPORATE OBLIGATIONS -- 5%
ASSET BACKED SECURITIES -- 10%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
U.S. TREASURY OBLIGATIONS -- 27.7%
U.S. Treasury Bonds
7.250%, 05/15/16 $ 1,900 $ 2,163
7.500%, 11/15/16 1,300 1,518
6.000%, 02/15/26 7,725 7,709
U.S. Treasury Notes
6.375%, 07/15/99 13,000 13,144
6.875%, 07/31/99 3,500 3,563
6.250%, 05/31/00 2,100 2,126
6.375%, 09/30/01 7,700 7,857
7.250%, 05/15/04 1,090 1,176
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $38,283) 39,256
-------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 13.1%
Federal Farm Credit Bank MTN
6.710%, 04/25/01 4,800 4,911
Federal Home Loan Bank
7.260%, 09/06/01 1,025 1,069
Federal National Mortgage Association MTN
5.950%, 11/05/99 6,000 6,008
5.970%, 09/25/00 6,500 6,514
-------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $18,335) 18,502
-------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 16.0%
Federal Home Loan Mortgage
Corporation Gold, Series 2020,
Tranche B
6.250%, 01/30/27 (B) $2,600 $ 2,597
Federal Home Loan Mortgage
Corporation Gold, Series 2020,
Tranche C
6.250%, 01/30/27 (B) 2,600 2,562
Federal Home Loan Mortgage
Corporation Gold, Pool # D50469
6.500%, 03/01/24 3,407 3,383
Federal National Mortgage
Association, Pool # 190249
6.500%, 10/01/23 1,739 1,726
Federal National Mortgage
Association REMIC,
Series 1992-159, Cl PG
6.500%, 06/25/18 1,500 1,505
Federal National Mortgage
Association REMIC,
Series 1992-197, Cl A
6.500%, 07/25/18 3,600 3,590
Federal National Mortgage
Association REMIC,
Series 1993-2, Cl PG
7.000%, 02/25/20 2,300 2,330
Federal National Mortgage
Association REMIC,
Series 1996-32, Cl PE
7.000%, 08/25/22 3,654 3,754
Government National Mortgage
Association, Pool # 346690
7.000%, 08/15/23 1,154 1,170
-------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS
(Cost $22,101) 22,617
-------
ASSET-BACKED SECURITIES -- 10.5%
CIT Recreational Vehicle Owner Trust,
Series 1996-A, Cl A
5.400%, 12/15/11 1,472 1,461
Contimortgage Home Equity Loan Trust,
Series 1996-2, Cl A-6
7.250%, 06/15/11 1,860 1,920
34 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
IMC Home Equity Loan Trust,
Series 1997-2, Cl A-7
7.230%, 05/20/27 $2,750 $ 2,847
Metris Master Trust,
Series 1997-1, Cl A
6.870%, 11/20/05 2,400 2,467
Residential Funding Mortgage
Securities I, Series 1994-S1, Cl A-7
6.574%, 01/25/24 2,600 2,589
Southern California Gas & Electric,
Series 1997-1, Cl A-6
6.380%, 09/25/08 2,000 2,018
The Money Store Home Equity Trust,
Series 1993-C, Cl A-3
5.750%, 10/15/22 1,559 1,532
--------
TOTAL ASSET-BACKED SECURITIES
(Cost $14,593) 14,834
--------
CORPORATE OBLIGATIONS -- 24.9%
FINANCIAL -- 9.9%
Associates of North America
6.450%, 10/15/01 2,000 2,015
Bankers Trust New York,
Series A, MTN
6.700%, 10/01/07 2,000 2,000
Countrywide Home Loan
7.260%, 05/10/04 2,000 2,087
Hartford Life
7.100%, 06/15/07 1,500 1,543
Lehman Brothers Holdings,
Series E, MTN
6.625%, 12/27/02 2,500 2,509
PNC Funding
6.875%, 07/15/07 1,500 1,534
Salomon Brothers
7.200%, 02/01/04 2,300 2,389
--------
14,077
--------
INDUSTRIAL -- 12.9%
Apache
6.500%, 12/15/07 2,840 2,826
Bausch & Lomb
6.750%, 12/15/04 2,765 2,782
Federated Department Stores
6.790%, 07/15/27 2,840 2,900
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
Ford Motor
7.250%, 10/01/08 $1,900 $ 2,016
RJR Nabisco
8.750%, 04/15/04 3,055 3,273
Sears Finance
7.000%, 06/15/07 2,000 2,082
Time Warner
7.750%, 06/15/05 2,200 2,332
--------
18,211
--------
UTILITIES -- 2.1%
Texas Utilities Electric
7.170%, 08/01/07 2,840 2,943
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $34,587) 35,231
--------
FOREIGN CORPORATE OBLIGATIONS -- 5.7%
Endesa-Chile, Empresa
Nacional Electric
8.125%, 02/01/97 2,545 2,637
Poland
7.750%, 07/01/17 2,600 2,671
3.000%, 10/17/24 (A) 4,460 2,726
--------
TOTAL FOREIGN CORPORATE OBLIGATIONS
(Cost $7,711) 8,034
--------
COMMERCIAL PAPER -- 2.8%
General Electric
5.900%, 01/16/98 4,000 3,990
--------
TOTAL COMMERCIAL PAPER
(Cost $3,990) 3,990
--------
REPURCHASE AGREEMENT -- 3.1%
J.P. Morgan
6.750%, dated 12/31/97, matures
01/02/98, repurchase price
$4,479,039 (collateralized by
U.S. Government Agency
Instrument, total market
value: $4,540,606) 4,452 4,452
--------
TOTAL REPURCHASE AGREEMENT
(Cost $4,452) 4,452
--------
TOTAL INVESTMENTS -- 103.8%
(Cost $144,052) 146,916
--------
OTHER ASSETS AND LIABILITIES, NET -- (3.8%) (5,340)
--------
============================================================================ 35
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
DESCRIPTION VALUE (000)
===============================================================================
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization --- no par value)
based on 13,635,385 outstanding shares
of beneficial interest $138,756
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 41,191 outstanding shares
of beneficial interest 427
Undistributed net investment income 11
Accumulated net realized loss on investments (482)
Net unrealized appreciation on investments 2,864
--------
TOTAL NET ASSETS -- 100.0% $141,576
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $10.35
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE CLASS $10.38
========
- -------------------------------------------------------------------------------
(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 REPORTED ON THE STATEMENT OF NET ASSETS IS THE RATE IN
EFFECT ON DECEMBER 31, 1997. THE INITIAL COUPON ON A STEP BOND CHANGES ON
A SPECIFIC DATE TO A PREDETERMINED HIGHER RATE.
(B) WHEN ISSUED SECURITY
CL -- CLASS
MTN -- MEDIUM TERM NOTE
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
36 ============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
STATEMENT OF NET ASSETS
INTERMEDIATE GOVERNMENT FIXED INCOME FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 19%
U.S. MORTGAGE-BACKED OBLIGATIONS -- 13%
REPURCHASE AGREEMENT -- 6%
U.S. TREASURY OBLIGATIONS -- 62%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
U.S. TREASURY OBLIGATIONS -- 64.5%
U.S. Treasury Bond
10.750%, 02/15/03 $3,000 $ 3,655
U.S. Treasury Notes
6.375%, 05/15/99 6,000 6,056
6.875%, 07/31/99 6,000 6,107
6.750%, 04/30/00 2,000 2,045
6.250%, 08/31/00 2,000 2,026
6.125%, 09/30/00 2,000 2,020
7.875%, 08/15/01 4,500 4,810
6.500%, 05/15/05 3,000 3,126
7.000%, 07/15/06 3,500 3,777
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $33,348) 33,622
-------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 19.7%
Federal Farm Credit Bank MTN
6.710%, 04/25/01 2,650 2,711
Federal National Mortgage
Association MTN
5.820%, 08/25/99 3,000 2,998
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
Federal National Mortgage (continued)
5.950%, 11/05/99 $2,500 $ 2,503
6.560%, 04/10/00 2,000 2,030
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $10,156) 10,242
--------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 13.8%
Federal Home Loan Mortgage
Corporation Gold, Series 2020,
Tranche B
6.250%, 01/30/27 (A) 1,500 1,498
Federal Home Loan Mortgage
Corporation Gold, Series 2020,
Tranche C
6.250%, 01/30/27 (A) 1,500 1,478
Federal National Mortgage Association
REMIC, Series 1996-32, Cl PE
7.000%, 08/25/22 3,125 3,210
Government National Mortgage
Association, Pool # 346690
7.000%, 08/15/23 968 982
--------
TOTAL U.S. GOVERNMENT
MORTGAGE-BACKED OBLIGATIONS
(Cost $6,998) 7,168
--------
REPURCHASE AGREEMENT -- 6.4%
J.P. Morgan
6.750%, dated 12/31/97, matures
01/02/98, repurchase price
$3,324,879 (collateralized by
U.S. Government Agency
Instruments, total market
value: $3,381,109) 3,315 3,315
--------
TOTAL REPURCHASE AGREEMENT
(Cost $3,315) 3,315
--------
TOTAL INVESTMENTS -- 104.4%
(Cost $53,817) 54,347
--------
OTHER ASSETS AND LIABILITIES, NET -- (4.4%) (2,309)
--------
============================================================================ 37
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
DESCRIPTION VALUE (000)
===============================================================================
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization -- no par value)
based on 5,171,429 outstanding shares
of beneficial interest $54,105
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 10,304 outstanding shares
of beneficial interest (31)
Accumulated net realized loss on investments (2,566)
Net unrealized appreciation on investments 530
--------
TOTAL NET ASSETS -- 100.0% $ 52,038
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $10.04
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE CLASS $10.04
========
- -------------------------------------------------------------------------------
(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) WHEN ISSUED SECURITY
CL -- CLASS
MTN -- MEDIUM TERM NOTE
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
38 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
TAX-EXEMPT FIXED INCOME FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
MUNICIPAL BONDS -- 100%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
MUNICIPAL BONDS -- 98.7%
ARKANSAS -- 5.3%
Arkansas State Development Financial
Authority, Wastewater System RB
5.850%, 12/01/19 $1,000 $1,055
Jefferson County, Pollution Control
RB, Arkansas Power & Light
Company Project, AMBAC
6.300%, 06/01/18 1,000 1,106
------
2,161
------
CALIFORNIA -- 2.5%
San Francisco, City & County GO,
Series 1, FGIC
5.000%, 06/15/10 1,000 1,030
------
COLORADO -- 2.5%
Denver, City & County Airport RB,
Series A, MBIA
5.700%, 11/15/25 1,000 1,039
------
CONNECTICUT -- 2.5%
Connecticut State GO, Series B
5.375%, 10/01/14 1,000 1,030
------
FACE
DESCRIPTION AMOUNT (000) VALUE (000)
================================================================================
FLORIDA -- 9.8%
Florida State Board of Education
5.500%, 06/01/19 $1,000 $1,031
Florida State Turnpike Authority
RB, FGIC
5.000%, 07/01/19 2,000 1,977
Jacksonville, Electric Authority RB,
St. Johns River Issue
5.375%, 10/01/16 1,000 1,025
------
4,033
------
ILLINOIS -- 10.8%
Chicago, Metropolitan Water
Reclamation District GO
5.500%, 12/01/12 1,000 1,074
Chicago, Park District GO, MBIA
5.600%, 01/01/21 1,000 1,030
Cook County, Capital Improvement
GO, FGIC
5.750%, 11/15/12 1,000 1,071
Sangamon County COP
6.700%, 12/01/03 1,115 1,254
------
4,429
------
MASSACHUSETTS -- 2.5%
Massachusetts State GO, FGIC
5.125%, 11/01/15 1,000 1,005
------
MICHIGAN -- 3.7%
Hastings GO, FGIC
5.625%, 05/01/18 1,475 1,538
------
MISSISSIPPI -- 6.8%
Mississippi State Hospital Equipment
& Facilities Authority RB, Baptist
Medical Center Project, MBIA
6.500%, 05/01/10 2,500 2,797
------
MISSOURI -- 8.3%
Missouri State Health & Educational
Facilities Authority RB, BJC Health
Systems Project, Series A
6.750%, 05/15/10 2,000 2,347
Missouri State University RB
5.500%, 11/01/12 1,000 1,059
------
3,406
------
============================================================================ 39
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
===============================================================================
NEVADA -- 7.8%
Clark County, Refunding & Transit
Improvement RB, MBIA
6.200%, 06/01/19 $ 2,000 $ 2,145
Nevada State Municipal Bond Bank
GO, Series A
5.500%, 11/01/17 1,000 1,035
--------
3,180
--------
NEW YORK -- 5.2%
New York State Highway & Bridge
Improvement Fund RB, MBIA
5.600%, 04/01/10 2,000 2,130
--------
OHIO -- 2.5%
Mentor GO
5.250%, 12/01/17 1,000 1,010
--------
OKLAHOMA -- 2.6%
Tulsa, Industrial Authority RB,
St. Johns Medical Center Project
6.250%, 02/15/17 1,000 1,077
--------
TENNESSEE -- 2.6%
Shelby County, School District
GO, Series A
5.850%, 06/01/17 1,000 1,063
--------
TEXAS -- 7.7%
Arlington GO
5.750%, 08/15/14 1,000 1,050
San Antonio, Electric & Gas
Utilities RB, MBIA
5.375%, 02/01/18 1,000 1,019
Victoria County, Hospital RB,
AMBAC
6.250%, 01/01/16 1,000 1,085
--------
3,154
--------
UTAH -- 2.5%
Salt Lake County GO
5.250%, 12/15/15 1,000 1,018
--------
SHARES /FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
===============================================================================
VIRGINIA -- 10.5%
Virginia State GO
5.250%, 07/01/11 $ 1,000 $ 1,035
Virginia State Housing Development
Authority RB, Series H
6.450%, 01/01/12 3,000 3,263
-------
4,298
-------
WASHINGTON -- 2.6%
Washington State Public Power Supply
System RB, Nuclear Project #1,
Series C, AMBAC
5.500%, 07/01/10 1,000 1,051
-------
TOTAL MUNICIPAL BONDS
(Cost $38,111) 40,449
-------
CASH EQUIVALENTS -- 0.4%
SEI Tax-Exempt Trust Institutional
Tax Free Portfolio 174 174
-------
TOTAL CASH EQUIVALENTS
(Cost $174) 174
-------
TOTAL INVESTMENTS -- 99.1%
(Cost $38,285) 40,623
-------
OTHER ASSETS AND LIABILITIES, NET -- 0.9% 355
-------
40 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
DESCRIPTION VALUE (000)
===============================================================================
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization -- no par value)
based on 3,883,602 outstanding shares
of beneficial interest $ 40,155
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 51,711 outstanding shares
of beneficial interest 524
Distributions in excess of net investment income (1)
Accumulated net realized loss on investments (2,038)
Net unrealized appreciation on investments 2,338
--------
TOTAL NET ASSETS -- 100.0% $40,978
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $10.41
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE CLASS $10.39
========
- -------------------------------------------------------------------------------
(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.
COP -- CERTIFICATE OF PARTICIPATION
GO -- GENERAL OBLIGATION
RB -- REVENUE BOND
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
FGIC -- FINANCIAL GUARANTY INSURANCE CORPORATION
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
============================================================================ 41
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
INTERNATIONAL FIXED INCOME FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
BELGIUM -- 5%
AUSTRIA -- 4%
AUSTRALIA -- 4%
UNITED STATES -- 4%
UNITED KINGDOM -- 10%
SWEDEN -- 5%
SPAIN -- 6%
NEW ZEALAND -- 3%
CANADA -- 12%
DENMARK -- 8%
FINLAND -- 4%
GERMANY -- 4%
ITALY -- 10%
JAPAN -- 15%
NETHERLANDS -- 6%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
===============================================================================
FOREIGN BONDS -- 95.2%
AUSTRIA -- 4.1%
Austrian Republic
4.500%, 09/28/05 70,000 $ 641
---------
AUSTRALIA -- 3.6%
R&I Bank Western Australia
7.250%, 09/29/03 400 273
Treasury Corporation Victoria
8.250%, 10/15/03 400 292
---------
565
---------
BELGIUM -- 4.7%
Kingdom of Belgium
9.000%, 03/28/03 22,500 727
---------
CANADA -- 11.4%
Canadian Government
9.500%, 10/01/98 1,000 722
8.750%, 12/01/05 1,000 840
8.000%, 06/01/27 250 224
---------
1,786
---------
FACE MARKET
DESCRIPTION AMOUNT (000)(2) VALUE (000)
===============================================================================
DENMARK -- 7.7%
Kingdom of Denmark
7.000%, 12/15/04 4,500 $ 717
7.000%, 11/10/24 3,000 487
---------
1,204
---------
FINLAND -- 4.2%
Finnish Government
8.250%, 06/25/02 1,050 659
---------
GERMANY -- 4.0%
Federal Republic of Germany
8.357%, 05/21/01 1,000 621
---------
ITALY -- 9.7%
Republic of Italy
8.500%, 08/01/04 2,300,000 1,520
---------
JAPAN -- 14.4%
Asian Development Bank
3.125%, 06/29/05 85,000 709
Export-Import Bank of Japan
2.875%, 07/28/05 40,000 332
Japanese Government
4.800%, 12/20/02 70,000 626
World Bank
4.500%, 06/20/00 70,000 585
---------
2,252
---------
NETHERLANDS -- 6.1%
Kingdom of Netherlands
8.250%, 06/15/02 1,300 733
7.500%, 01/15/23 2,000 213
---------
946
---------
NEW ZEALAND -- 2.3%
New Zealand Government
7.000%, 07/15/09 630 365
---------
SPAIN -- 4.3%
Kingdom of Spain
8.300%, 12/15/98 100,000 679
---------
42 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
FACE MARKET
DESCRIPTION AMOUNT (000)(2) VALUE (000)
===============================================================================
SWEDEN -- 5.2%
Government of Sweden
6.000%, 02/09/05 6,400 $ 813
-------
UNITED KINGDOM -- 9.7%
United Kingdom
10.000%, 09/08/03 800 1,524
-------
UNITED STATES -- 3.8%
Tenn. Valley Authority
6.375%, 09/18/06 1,000 592
-------
TOTAL FOREIGN BONDS
(Cost $15,538) 14,894
-------
TREASURY BILL -- 1.8%
New Zealand (A)
8.4625%, 09/16/98 500 274
-------
TOTAL TREASURY BILL
(Cost $305) 274
-------
TOTAL INVESTMENTS -- 97.0%
(Cost $15,843) 15,168
-------
OTHER ASSETS AND LIABILITIES, NET -- 3.0% 474
-------
DESCRIPTION VALUE (000)
===============================================================================
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization -- no par value)
based on 1,615,870 outstanding shares
of beneficial interest $ 16,454
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 7,058 outstanding shares
of beneficial interest 77
Undistributed net investment income 682
Accumulated net realized loss on investments (168)
Accumulated net realized loss on
foreign currency transactions (721)
Net unrealized depreciation on foreign
currency and translation of other assets
and liabilities denominated
in foreign currencies. (7)
Net unrealized depreciation on investments (675)
--------
TOTAL NET ASSETS -- 100.0% $ 15,642
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $9.64
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE CLASS $9.60
========
- -------------------------------------------------------------------------------
(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 STATEMENT OF NET
ASSETS. THE STATEMENT OF NET ASSETS PRESENTS THE VALUE OF INVESTMENTS AS
PERCENTAGE OF THE TOTAL NET ASSETS.
(2) IN LOCAL CURRENCY.
(A) THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS THE EFFECTIVE YIELD AS
OF DECEMBER 31, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
============================================================================ 43
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
BALANCED FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 4%
CORPORATE OBLIGATIONS -- 6%
U.S. TREASURY OBLIGATIONS -- 7%
FOREIGN COMMON STOCKS -- 14%
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 3%
ASSET-BACKED SECURITIES -- 3%
FOREIGN CORPORATE OBLIGATIONS -- 2%
REPURCHASE AGREEMENT -- 8%
DOMESTIC COMMON STOCKS -- 53%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
DOMESTIC COMMON STOCK -- 54.6%
BASIC MATERIALS -- 3.2%
Carbide/Graphite Group* 3,600 $ 122
Dow Chemical 4,700 477
E.I. duPont de Nemours 5,300 318
International Paper 10,200 440
Phelps Dodge 6,500 405
RMI Titanium* 6,700 134
USX-U.S. Steel Group 14,000 438
------
2,334
------
CAPITAL GOODS -- 4.7%
Aerquip-Vickers 2,500 123
Avery Dennison 2,800 125
Barnes Group 5,300 121
Caterpillar 9,000 437
Cohu 4,100 126
Cummins Engine 6,700 396
Esterline Technologies* 3,700 133
FiberMark* 5,700 123
Gencorp 5,100 128
General Electric 8,700 638
Johnson Controls 9,200 439
Modern Controls 11,400 125
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
Robbins & Myers 3,200 $ 127
Timken 11,700 402
------
3,443
------
COMMUNICATION SERVICES -- 1.9%
Bell Atlantic 3,700 337
GTE 11,000 575
US West 10,200 460
------
1,372
------
CONSUMER CYCLICALS -- 7.0%
Advo Systems* 6,200 121
American Greetings, Cl A 11,400 446
Callaway Golf 6,800 194
Cendant* 7,200 248
Dayton-Hudson 6,400 432
Ford Motor 12,100 589
Genesco* 10,000 128
Guilford Mills 4,400 120
Home Depot 4,800 283
Lone Star Industries 2,400 128
McGraw-Hill 6,100 451
Microage* 9,200 139
Mohawk Industries* 5,800 127
National Processing* 12,600 124
Pillowtex 4,400 153
Service International 6,100 225
Sports Authority* 8,400 124
US Home* 3,500 137
Vanity Fair 9,200 423
Wal-Mart Stores 9,100 359
Webb (Del E.) 4,500 117
------
5,068
------
CONSUMER STAPLES -- 5.1%
Bowne & Company 3,100 124
Coca-Cola 7,600 506
Deluxe 11,400 393
Dimon 4,800 126
Gillette 3,100 311
Merrill 5,700 133
Newell 5,300 225
Philip Morris 8,900 403
Procter & Gamble 5,000 399
44 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
Sara Lee 4,800 $ 270
Supervalu 10,500 440
Walt Disney 3,400 337
------
3,667
------
ENERGY -- 3.6%
Exxon 7,700 471
Mobil 7,700 556
Newfield Exploration* 5,300 124
Occidental Petroleum 14,500 425
Phillips Petroleum 9,000 438
Royal Dutch Petroleum 8,800 477
Veritas DGC* 2,800 111
------
2,602
------
FINANCIAL -- 12.3%
American Express 3,500 312
American International Group 3,200 348
Astoria Financial 7,200 401
Banc One 4,600 250
Bank of New York 4,300 249
Bankers Trust New York 2,100 236
Bear Stearns 6,900 328
Chase Manhattan Bank 4,700 515
Cigna 2,500 433
Citicorp 4,400 556
Commercial Bank of New York 3,440 79
First American Financial 1,900 140
First Defiance Financial 7,800 125
Fleet Financial Group 6,200 465
Fremont General 8,000 438
GreenPoint Financial 6,000 435
Hartford Financial Services Group 4,900 458
IMC Mortgage* 10,300 122
Imperial Credit 7,900 116
Long Island Bancorp 2,500 124
MAF Bancorp 3,600 127
NationsBank 8,700 529
Norwest 6,800 263
Orion Capital 2,700 125
Paine Webber Group 12,100 418
Peoples Bancshares 5,200 118
Poncebank 5,800 109
Reliance Bancorp 3,500 128
SunAmerica 5,300 227
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
Travelers Group 7,650 $ 412
USBancorp - PA 1,900 139
UST 4,400 122
WSFS Financial* 6,000 120
------
8,967
------
HEALTH CARE -- 6.7%
Abbott Labs 4,400 288
American Home Products 3,800 291
ATL Ultrasound* 2,600 120
Bristol-Myers Squibb 3,900 369
Eli Lilly 5,200 362
Healthsouth* 8,300 230
Integrated Health Services 10,100 315
Johnson & Johnson 5,600 369
Mallinckrodt 8,600 327
Medtronic 4,800 251
Merck 4,200 446
OEC Medical Systems* 6,000 120
Pfizer 5,000 373
Schering Plough 5,500 342
Steris* 4,400 212
Sun Healthcare Group* 6,000 116
Sunrise Medical * 7,700 119
Universal Health Services, Cl B* 4,400 222
------
4,872
------
TECHNOLOGY -- 7.2%
Automatic Data Processing 2,500 153
Cisco Systems* 5,400 301
Comdisco 12,600 421
First Data 16,000 468
Harris 9,600 440
Hewlett Packard 7,000 438
IBM 6,900 721
Intel 9,200 646
Microsoft* 3,600 465
National Data 3,500 126
Paychex 5,200 263
Pioneer Standard Electronics 4,570 70
Texas Instruments 11,200 504
Xerox 3,300 244
------
5,260
------
============================================================================ 45
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
TRANSPORTATION -- 0.8%
GATX 6,000 $ 435
US Freightways 3,800 124
-------
559
-------
UTILITIES -- 2.1%
Baltimore Gas & Electric 13,700 467
Columbia Gas Systems 5,400 424
Public Service Company
of New Mexico 5,800 137
Utilicorp United 12,100 470
-------
1,498
-------
TOTAL DOMESTIC COMMON STOCK
(Cost $32,481) 39,642
-------
FOREIGN COMMON STOCK -- 14.6%
BASIC MATERIALS -- 1.1%
Akzo 3,000 261
Broken Hill Proprietary 6,000 111
Fletcher Challenge Forest ADR 316 3
Fletcher Challenge Paper ADR 3,950 50
Hanson 1,487 34
Madeco ADR 5,700 87
Maderas y Sinteticos ADR 7,500 71
PT Tri Polyta Indonesia ADR 7,800 5
Rhone-Poulenc ADR 4,300 191
-------
813
-------
CAPITAL GOODS -- 0.8%
ABB ADR 1,800 212
Empresas ICA ADR 4,900 81
Hitachi 2,000 138
Kubota ADR 400 22
Kyocera ADR 1,100 100
-------
553
-------
COMMUNICATION SERVICES -- 1.0%
Cable & Wireless 7,500 204
Telefonica de Espana ADR 3,200 291
Telefonos de Mexico ADR 3,700 207
-------
702
-------
CONSUMER CYCLICALS -- 1.8%
Daimler Benz ADR 4,200 303
Fletcher Challenge Building ADR 1,975 41
Matsushita Electric Industrial 1,300 198
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
Newscorp 7,900 $ 176
Nissan Motor 10,700 88
Nycomed Amersham ADR, Cl B* 3,252 119
Pacific Dunlop ADR 11,800 100
Sony 2,800 254
-------
1,279
-------
CONSUMER SERVICES -- 3.3%
Bass ADR 7,700 239
Buenos Aires Embotellado 4,500 7
Cadbury Schweppes ADR 5,600 232
Coles Myer ADR 4,000 156
Grupo Televisa ADR 5,300 205
Imperial Tobacco Group 2,975 36
Ito Yokado 1,000 204
Kirin Brewery ADR 1,300 95
Koninklijke Ahold ADR 11,100 290
Nestle 4,000 299
Panamerican Beverage, Cl A 6,800 222
Unilever 6,400 400
-------
2,385
-------
ENERGY -- 1.8%
Elf Aquitaine ADR 4,600 270
Fletcher Challenge Energy ADR 1,975 70
Norsk Hydro ADR 3,700 189
Repsol 5,000 213
Schlumberger 4,000 322
YPF Sociedad Anonima ADR 7,800 267
-------
1,331
-------
FINANCIAL -- 1.3%
Aegon ADR* 3,400 305
Dresdner Bank 5,700 263
National Australia Bank 3,000 212
Tokio Marine & Fire Insurance 2,600 150
-------
930
-------
HEALTH CARE -- 1.4%
Novartis 4,159 337
Novo-Nordisk ADR 5,600 405
Roche Holdings 2,700 267
-------
1,009
-------
46 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
SHARES/FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
===============================================================================
TECHNOLOGY -- 1.4%
Alcatel Alsthom ADR* 10,200 $ 258
Canon 1,900 222
Ericsson Telephone ADR* 8,000 299
Fuji Photo Film 6,000 229
-------
1,008
-------
TRANSPORTATION -- 0.3%
Canadian Pacific 8,900 243
-------
UTILITIES -- 0.4%
Energy Group 1,487 66
Enersis ADR 2,700 78
Hong Kong Telecommunications 8,100 167
-------
311
-------
TOTAL FOREIGN COMMON STOCK
(Cost $7,282) 10,564
-------
U.S. TREASURY OBLIGATIONS -- 7.3%
U.S. Treasury Bonds
7.500%, 11/15/16 $ 150 175
6.000%, 02/15/26 1,280 1,277
U.S. Treasury Notes
5.875%, 07/31/99 850 852
6.875%, 07/31/99 1,000 1,018
6.250%, 05/31/00 1,400 1,417
6.375%, 09/30/01 440 449
7.250%, 05/15/04 125 135
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $5,231) 5,323
-------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 2.8%
Federal Farm Credit Bank MTN
6.710%, 04/25/01 720 737
Federal Home Loan Bank
7.260%, 09/06/01 295 308
Federal National Mortgage
Association MTN
5.950%, 11/05/99 615 616
5.970%, 09/25/00 400 401
-------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $2,032) 2,062
-------
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
===============================================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 4.5%
Federal Home Loan Mortgage
Corporation Gold, Series 2020,
Tranche B
6.250%, 01/30/27 (B) $ 400 $ 400
Federal Home Loan Mortgage
Corporation Gold, Series 2020,
Tranche C
6.250%, 01/30/27 (B) 400 394
Federal National Mortgage Association
REMIC, Series 1992-159, Cl PG
6.500%, 06/25/18 200 201
Federal National Mortgage Association
REMIC, Series 1992-197, Cl A
6.500%, 07/25/18 500 499
Federal National Mortgage Association
REMIC, Series 1993-2, Cl PG
7.000%, 02/25/20 300 304
Federal National Mortgage Association
REMIC, Series 1996-32, Cl PE
7.000%, 08/25/22 525 539
Government National Mortgage
Association, Pool # 346690
7.000%, 08/15/23 465 471
Government National Mortgage
Association, Pool # 352022
7.000%, 11/15/23 443 449
------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $3,204) 3,257
------
CORPORATE OBLIGATIONS -- 6.7%
INDUSTRIAL -- 3.4%
Apache
6.500%, 12/15/07 350 348
Bausch & Lomb
6.750%, 12/15/04 340 342
Federated Department Stores
6.790%, 07/15/27 395 403
Ford Motor
7.250%, 10/01/08 270 287
RJR Nabisco
8.750%, 04/15/04 420 450
Sears Finance
7.000%, 06/15/07 300 312
============================================================================ 47
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
===============================================================================
CORPORATE OBLIGATIONS -- (continued)
Time Warner
7.750%, 06/15/05 $ 300 $ 318
-------
2,460
-------
FINANCIAL -- 2.8%
Associates of North America
6.450%, 10/15/01 300 302
Bankers Trust New York,
Series A, MTN
6.700%, 10/01/07 350 350
Countrywide Home Loan
7.260%, 05/10/04 250 261
Hartford Life
7.100%, 06/15/07 250 257
Lehman Brothers Holdings,
Series E, MTN
6.625%, 12/27/02 330 331
PNC Funding
6.875%, 07/15/07 250 256
Salomon Brothers
7.200%, 02/01/04 250 260
-------
2,017
-------
UTILITIES -- 0.5%
Texas Utilities Electric
7.170%, 08/01/07 390 404
-------
TOTAL CORPORATE OBLIGATIONS
(Cost $4,791) 4,881
-------
ASSET-BACKED SECURITIES -- 3.0%
CIT Recreational Vehicle Owner Trust,
Series 1996-A, Cl A
5.400%, 12/15/11 198 197
Contimortgage Home Equity Loan
Trust, Series 1996-2, Cl A-6
7.250%, 06/15/11 260 268
IMC Home Equity Loan Trust,
Series 1997-2, Cl A-7
7.230%, 05/20/27 300 311
Metris Master Trust,
Series 1997-1, Cl A
6.870%, 11/20/05 400 411
FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
===============================================================================
Residential Funding Mortgage
Securities I, Series 1994-S1, Cl A-7
6.574%, 01/25/24 $ 400 $ 398
Southern California Gas & Electric,
Series 1997-1, Cl A-6
6.380%, 09/25/08 260 262
The Money Store Home Equity Trust,
Series 1993-C, Cl A-3
5.750%, 10/15/22 321 315
--------
TOTAL ASSET-BACKED SECURITIES
(Cost $2,131) 2,162
--------
FOREIGN CORPORATE OBLIGATIONS -- 1.6%
Endesa-Chile, Empresa Nacional Electric
8.125%, 02/01/97 365 378
Poland
7.750%, 07/01/17 410 421
3.000%, 10/17/24 (A) 620 379
--------
TOTAL FOREIGN CORPORATE OBLIGATIONS
(Cost $1,133) 1,178
--------
REPURCHASE AGREEMENT -- 8.2%
J.P. Morgan
6.750%, dated 12/31/97, matures
01/02/98, repurchase price
$6,004,243 (collateralized by
U.S. Government Agency
Instruments, total market
value: $6,097,956) 5,978 5,978
--------
TOTAL REPURCHASE AGREEMENT
(Cost $5,978) 5,978
--------
TOTAL INVESTMENTS -- 103.3%
(Cost $64,263) 75,047
--------
OTHER ASSETS AND LIABILITIES, NET -- (3.3%) (2,367)
--------
48 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
DESCRIPTION VALUE (000)
===============================================================================
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization -- no par value)
based on 5,383,692 outstanding shares
of beneficial interest $ 52,328
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 326,653 outstanding shares
of beneficial interest 3,242
Undistributed net investment income 2
Accumulated net realized gain on investments 6,324
Net unrealized appreciation on investments 10,784
--------
TOTAL NET ASSETS -- 100.0% $ 72,680
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $12.73
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE CLASS $12.73
========
- -------------------------------------------------------------------------------
(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
(A) STEP BOND -- THE RATE REPORTED ON THE STATEMENT OF NET ASSETS IS THE RATE
IN EFFECT ON DECEMBER 31, 1997. THE INITIAL COUPON ON A STEP BOND CHANGES
ON A SPECIFIC DATE TO A PREDETERMINED HIGHER RATE.
(B) WHEN ISSUED SECURITY.
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
MTN -- MEDIUM TERM NOTE
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
============================================================================ 49
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
VALUE FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
CAPITAL GOODS -- 10%
BASIC MATERIALS -- 8%
REPURCHASE AGREEMENT -- 2%
UTILITIES -- 6%
TRANSPORTATION -- 2%
TECHNOLOGY -- 13%
HEALTH CARE -- 7%
COMMUNICATIONS SERVICES -- 4%
CONSUMER CYCLICALS -- 11%
CONSUMER STAPLES -- 8%
ENERGY -- 7%
FINANCIAL -- 22%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
COMMON STOCK -- 100.0%
BASIC MATERIALS -- 8.1%
Dow Chemical 44,400 $ 4,507
E.I. duPont de Nemours 27,100 1,628
International Paper 96,200 4,149
Phelps Dodge 60,300 3,754
USX-U.S. Steel Group 130,800 4,087
-------
18,125
-------
CAPITAL GOODS -- 10.1%
Caterpillar 90,700 4,405
Cummins Engine 63,100 3,727
General Electric 78,500 5,760
Johnson Controls 86,700 4,140
Modern Controls 67,050 738
Timken 109,500 3,764
-------
22,534
-------
COMMUNICATION SERVICES -- 4.4%
GTE 103,900 5,429
US West 95,800 4,323
-------
9,752
-------
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
CONSUMER CYCLICALS -- 10.9%
American Greetings, Cl A 107,000 $ 4,186
Dayton-Hudson 59,800 4,036
Ford Motor 114,700 5,584
McGraw-Hill 57,700 4,270
Vanity Fair 86,900 3,992
Wal-Mart Stores 54,000 2,130
-------
24,198
-------
CONSUMER STAPLES -- 7.6%
Coca-Cola 59,300 3,951
Deluxe 106,600 3,678
Philip Morris 57,600 2,610
Procter & Gamble 31,900 2,546
Supervalu 97,100 4,066
-------
16,851
-------
ENERGY -- 7.6%
Exxon 59,100 3,616
Mobil 72,500 5,234
Occidental Petroleum 135,900 3,984
Phillips Petroleum 85,200 4,143
-------
16,977
-------
FINANCIAL -- 22.9%
American International Group 16,800 1,827
Astoria Financial 66,100 3,685
Bankers Trust New York 20,200 2,271
Bear Stearns 63,600 3,021
Chase Manhattan Bank 44,000 4,818
Cigna 25,400 4,396
Citicorp 41,600 5,260
Fleet Financial Group 58,000 4,346
Fremont General 73,400 4,019
GreenPoint Financial 57,000 4,136
Hartford Financial Services Group 45,900 4,294
NationsBank 81,900 4,980
Paine Webber Group 112,100 3,874
-------
50,927
-------
HEALTH CARE -- 7.3%
Integrated Health Services 93,100 2,904
Johnson & Johnson 32,200 2,121
Mallinckrodt 78,500 2,983
50 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
SHARES/FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
===============================================================================
HEALTH CARE -- (continued)
Merck 37,100 $ 3,942
Pfizer 31,000 2,311
Universal Health Services, Cl B* 41,300 2,080
--------
16,341
--------
TECHNOLOGY -- 13.5%
Comdisco 119,000 3,979
First Data 146,600 4,288
Harris 89,000 4,083
Hewlett Packard 40,900 2,556
IBM 63,700 6,661
Intel 52,800 3,709
Texas Instruments 104,000 4,680
--------
29,956
--------
TRANSPORTATION -- 1.8%
GATX 55,600 4,034
--------
UTILITIES -- 5.8%
Baltimore Gas & Electric 129,000 4,394
Columbia Gas Systems 50,700 3,983
Utilicorp United 114,000 4,425
--------
12,802
--------
TOTAL COMMON STOCK
(Cost $190,654) 222,497
--------
REPURCHASE AGREEMENT -- 1.6%
J.P. Morgan
6.750%, dated 12/31/97, matures
01/02/98, repurchase price
$3,768,308 (collateralized by
U.S. Government Agency
Instruments, total market
value: $3,817,909) 3,743 3,743
--------
TOTAL REPURCHASE AGREEMENT
(Cost $3,743) 3,743
--------
TOTAL INVESTMENTS -- 101.6%
(Cost $194,397) 226,240
--------
OTHER ASSETS AND LIABILITIES, NET -- (1.6%) (3,657)
--------
DESCRIPTION VALUE (000)
===============================================================================
NET ASSETS:
Portfolio Shares of the common Share Class
(unlimited authorization -- no par value)
based on 13,359,390 outstanding shares
of beneficial interest $150,193
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 118,795 outstanding shares
of beneficial interest 1,246
Undistributed net investment income 15
Accumulated net realized gain on investments 39,286
Net unrealized appreciation on investments 31,843
--------
TOTAL NET ASSETS -- 100.0% $222,583
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $16.51
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE CLASS $16.54
========
- -------------------------------------------------------------------------------
(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
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
============================================================================ 51
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
GROWTH FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
REAL ESTATE INVESTMENT TRUST -- 2%
TRANSPORTATION -- 2%
FINANCIAL -- 13%
HEALTH CARE -- 13%
TECHNOLOGY -- 20%
REPURCHASE AGREEMENTS -- 4%
UTILITIES -- 2%
CAPITAL GOODS -- 12%
COMMUNICATION SERVICES -- 4%
CONSUMER CYCLICALS -- 13%
CONSUMER STAPLES -- 13%
ENERGY -- 2%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
COMMON STOCK -- 96.2%
CAPITAL GOODS -- 11.9%
American Power Conversion* 41,300 $ 976
American Standard Companies* 67,500 2,586
Boeing 66,600 3,259
Caterpillar 45,400 2,205
General Electric 51,600 3,786
Motivepower Industries* 5,381 125
Pitney Bowes 36,000 3,238
-------
16,175
-------
COMMUNICATION SERVICES -- 3.9%
Ameritech 29,000 2,334
Bellsouth 34,700 1,954
Worldcom* 31,500 953
-------
5,241
-------
CONSUMER CYCLICALS -- 12.5%
Carnival 53,200 2,946
Cendant* 97,700 3,358
Federated Department Stores* 56,000 2,412
Harley-Davidson 35,400 969
Mattel 66,475 2,476
May Department Stores 25,800 1,359
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
OfficeMax* 92,400 $ 1,317
Royal Caribbean Cruises 41,000 2,186
-------
17,023
-------
CONSUMER STAPLES -- 13.2%
American Stores 116,000 2,385
Avon Products 46,200 2,836
Campbell Soup 37,400 2,174
Coca-Cola 21,300 1,419
Colgate-Palmolive 39,000 2,867
Monsanto 71,200 2,990
Philip Morris 41,300 1,871
Safeway* 22,800 1,442
-------
17,984
-------
ENERGY -- 2.5%
Baker Hughes 49,500 2,159
Tidewater 22,100 1,218
-------
3,377
-------
FINANCIAL -- 13.4%
Banc One 34,300 1,863
Bank of New York 24,400 1,411
Charles Schwab 70,950 2,975
Citicorp 17,600 2,225
First Union 53,600 2,747
KeyCorp 30,000 2,124
Norwest 62,000 2,395
SunAmerica 33,100 1,415
Travelers Group 20,100 1,083
-------
18,238
-------
HEALTH CARE -- 12.6%
Abbott Labs 40,000 2,623
American Home Products 31,500 2,410
Bristol-Myers Squibb 31,600 2,990
Healthcare Compare* 26,100 1,334
Johnson & Johnson 28,000 1,845
Pfizer 33,600 2,505
Phycor* 77,700 2,098
Schering Plough 22,200 1,379
-------
17,184
-------
52 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
SHARES /FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
===============================================================================
REAL ESTATE INVESTMENT TRUST -- 1.6%
Spieker Properties 49,600 $ 2,127
--------
TECHNOLOGY -- 20.4%
Adaptec* 27,200 1,010
Cadence Design Systems* 74,200 1,818
Cisco Systems* 41,550 2,316
Compaq Computer 21,000 1,185
Compuware* 50,000 1,600
E*trade Group* 32,300 743
First Data 52,700 1,541
Harris 58,400 2,679
Intel 32,300 2,269
Microsoft* 14,300 1,848
Networks Associates* 39,600 2,094
Oracle Systems* 29,200 652
Parametric Technology* 45,500 2,156
Sun Microsystems* 55,600 2,217
Tellabs* 34,800 1,840
Xilinx* 53,500 1,876
--------
27,844
--------
TRANSPORTATION -- 2.2%
Illinois Central 48,750 1,661
Southwest Airlines 55,300 1,362
--------
3,023
--------
UTILITIES -- 2.0%
Sonat 60,100 2,750
--------
TOTAL COMMON STOCK
(Cost $104,507) 130,966
--------
REPURCHASE AGREEMENT -- 3.8%
J.P. Morgan
6.750%, dated 12/31/97, matures
01/02/98, repurchase price
$5,208,450 (collateralized by
U.S. Government Agency
Instrument, total market
value, $5,278,483 $5,175 5,175
--------
TOTAL REPURCHASE AGREEMENT
(Cost $5,175) 5,175
--------
DESCRIPTION VALUE (000)
===============================================================================
TOTAL INVESTMENTS -- 100.0%
(Cost $109,682) $136,141
--------
OTHER ASSETS AND LIABILITIES, NET -- 0.0% (7)
--------
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization -- no par value)
based on 9,104,910 outstanding shares
of beneficial interest 100,861
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 238,756 outstanding shares
of beneficial interest 2,542
Undistributed net investment income 133
Accumulated net realized gain on investments 6,139
Net unrealized appreciation on investments 26,459
--------
TOTAL NET ASSETS -- 100.0% $136,134
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $14.57
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE CLASS $14.60
========
- -------------------------------------------------------------------------------
(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
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
============================================================================ 53
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
INTERNATIONAL EQUITY FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
SINGAPORE -- 2%
PORTUGAL -- 1%
SWEDEN -- 3%
SPAIN -- 4%
THAILAND -- 1%
SWITZERLAND -- 6%
NORWAY -- 1%
NETHERLANDS -- 8%
MALAYSIA -- 1%
UNITED KINGDOM -- 19%
AUSTRALIA -- 4%
FINLAND -- 1%
FRANCE -- 8%
GERMANY -- 10%
HONG KONG -- 4%
ITALY -- 3%
JAPAN -- 24%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
FOREIGN COMMON STOCKS -- 95.7%
AUSTRALIA -- 3.3%
ANZ Banking Group 105,479 $ 697
Brambles Industries 50,000 992
Broken Hill Proprietary 82,421 765
Rio Tinto* 32,250 376
-------
2,830
-------
FINLAND -- 1.3%
Nokia, Cl A 12,000 853
UPM-Kymmene 14,000 280
-------
1,133
-------
FRANCE -- 7.8%
Cie Generale des Eaux 8,506 1,187
Elf Aquitaine 17,008 1,979
L'Oreal 3,300 1,292
Sanofi 11,078 1,234
Total Compaigne, Series B* 10,000 1,089
-------
6,781
-------
GERMANY -- 10.4%
Allianz 7,000 1,806
Bayer 25,000 928
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
Beiersdorf 15,000 $ 638
Degussa 16,000 792
Deutsche Bank 18,000 1,259
Fresenius 2,000 337
Mannesmann 2,200 1,104
Veba 20,000 1,362
Volkswagen 1,400 782
-------
9,008
-------
HONG KONG -- 3.9%
Hong Kong Telecommunications 209,946 432
HSBC Holdings 61,339 1,512
Hutchison Whampoa 110,000 690
Sun Hung Kai Properties 65,600 457
Swire Pacific, Cl A 58,000 318
-------
3,409
-------
ITALY -- 2.8%
Assicurazioni Generali 22,500 553
Rinascente 49,815 372
Telecom Italia 230,000 1,470
-------
2,395
-------
JAPAN -- 23.6%
Bank of Tokyo-Mitsubishi 65,000 896
Canon 50,000 1,165
Dai Nippon Printing 60,000 1,126
Familymart 18,150 651
Hitachi 90,000 641
Honda Motor 60,000 2,202
Ito Yokado 20,000 1,019
KAO 60,000 864
Komatsu 90,000 452
Kyocera 13,000 590
Matsushita Electric Industrial 60,000 878
Mitsubishi Heavy Industries 150,000 625
NEC 75,000 799
Nippon Telegraph & Telephone 122 1,047
Nomura Securities 25,000 333
Sankyo 30,000 678
Secom 17,000 1,086
Sony 25,000 2,222
Sumitomo Bank 41,000 468
Takeda Chemical Industries 30,000 855
54 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
JAPAN -- (continued)
Toshiba 110,000 $ 458
Toyota 35,000 1,003
Yasuda Trust & Banking 350,000 349
-------
20,407
-------
MALAYSIA -- 0.9%
Genting 60,000 151
Malayan Banking 55,000 160
Sime Darby Malaysia 180,000 173
Telekom Malaysia 90,000 266
United Engineers-F 65,000 54
-------
804
-------
NETHERLANDS -- 7.7%
Aegon 23,056 2,053
Ahold 53,870 1,406
Akzo Nobel 4,000 690
ASM Lithography Holding* 10,000 656
Phillips Electronics 16,000 960
Wolters Kluwer 6,709 867
-------
6,632
-------
NORWAY -- 0.5%
Saga Petroleum, Cl B 30,000 455
-------
PORTUGAL -- 0.7%
Jeronimo Martin zero coupon* 6,633 36
Jeronimo Martins & Filho 18,997 603
Jeronimo Martins & Filho rights* 7,599 --
-------
639
-------
SINGAPORE -- 1.8%
City Developments 65,000 301
Fraser & Neave 35,000 152
Jardine Matheson 53,232 271
Keppel 68,750 198
Overseas Chinese Banking-F 48,820 284
Singapore Airlines-F 60,000 392
-------
1,598
-------
SPAIN -- 3.7%
Banco Bilbao Vizcaya 45,000 1,457
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
Centros Comerciales Pryca 25,000 $ 373
Telefonica de Espana 47,000 1,342
-------
3,172
-------
SWEDEN -- 2.6%
ABB, Cl B 90,000 1,060
Ericsson, LM Cl B 32,500 1,222
-------
2,282
-------
SWITZERLAND -- 5.5%
Nestle, Cl N 800 1,199
Novartis, Registered 853 1,384
Roche Holdings, Cl GS 150 1,489
Zurich Insurance* 1,500 715
-------
4,787
-------
THAILAND -- 0.4%
Advanced Info Service-F 28,000 134
Bangkok Bank-F 43,000 108
Land & House-F 68,171 14
Siam Cement-F 11,000 87
-------
343
-------
UNITED KINGDOM -- 18.8%
BAA 63,443 519
BOC Group 43,882 721
British Petroleum 70,000 920
Cable & Wireless 101,209 889
General Electric 145,774 944
Lloyds TSB Group 100,000 1,292
Marks & Spencer 110,379 1,086
Pearson 82,801 1,075
Prudential 175,643 2,117
Shell Transport & Trading 300,000 2,167
Smithkline Beecham 191,060 1,954
Unilever 160,000 1,369
Zeneca Group 35,000 1,228
-------
16,281
-------
TOTAL FOREIGN COMMON STOCKS
(Cost $66,275) 82,956
-------
============================================================================ 55
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
FOREIGN PREFERRED STOCKS -- 1.3%
AUSTRALIA -- 0.9%
Newscorp 151,169 $ 748
-------
GERMANY -- 0.4%
Fresenius 2,000 364
-------
TOTAL FOREIGN PREFERRED STOCKS
(Cost $1,086) 1,112
-------
TOTAL INVESTMENTS -- 97.0%
(Cost $67,361) 84,068
-------
OTHER ASSETS AND LIABILITIES, NET -- 3.0% 2,617
-------
DESCRIPTION VALUE (000)
===============================================================================
NET ASSETS:
Portfolio shares of the Common Share Class
(unlimited authorization -- no par value)
based on 5,555,503 outstanding shares
of beneficial interest $ 68,161
Portfolio shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 81,172 outstanding shares
of beneficial interest 924
Accumulated net investment loss (147)
Accumulated net realized gain on investments 1,185
Accumulated net realized loss on
foreign currency transactions (131)
Net unrealized depreciation on foreign
currency and translation of other
assets and liabilities denominated
in foreign currencies. (14)
Net unrealized appreciation on investments 16,707
--------
TOTAL NET ASSETS -- 100.0% $ 86,685
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $15.38
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE CLASS $15.34
========
- -------------------------------------------------------------------------------
(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
F -- FOREIGN REGISTRY SHARES
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
56 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
SMALL CAP FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
CONSUMER CYCLICAL -- 1%
CAPITAL SPENDING -- 3%
TRANSPORTATION -- 1%
TECHNOLOGY -- 30%
HEALTH CARE -- 20%
REPURCHASE AGREEMENT -- 2%
REAL ESTATE INVESTMENT TRUST -- 1%
BUSINESS SERVICES -- 12%
CONSUMER SERVICES -- 14%
CONSUMER STAPLES -- 4%
ENERGY -- 6%
FINANCIAL SERVICES -- 6%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
COMMON STOCK -- 98.7%
BASIC INDUSTRY -- 0.3%
NS Group* 6,600 $ 113
------
BUSINESS SERVICES -- 12.1%
Accustaff* 16,200 373
Acxiom* 18,300 352
American Business Information,
Cl A* 22,300 234
American Business Information,
Cl B* 22,300 229
Black Box* 4,500 159
CCC Information Services Group* 23,100 456
Corestaff* 11,300 300
CSG Systems International* 11,300 452
Fair, Isaac & Company 12,900 430
Harbinger* 14,300 402
Nova, Georgia* 12,500 313
Pegasus Systems* 2,300 34
Printrak International* 33,900 369
Profit Recovery Group International* 13,000 231
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
QuickResponse Services* 15,600 $ 577
Sterling Commerce* 6,400 246
------
5,157
------
CAPITAL SPENDING -- 2.6%
Credence Systems* 9,600 284
Integrated Process Equipment* 33,800 532
Perceptron* 9,700 210
Veeco Instruments* 3,800 84
------
1,110
------
CONSUMER CYCLICAL -- 1.2%
Gentex* 19,200 516
------
CONSUMER SERVICES -- 14.0%
Arbor Drugs 15,600 289
Cannondale* 16,700 363
Catalina Marketing* 3,400 157
Compdent* 4,600 93
Eagle Hardware & Garden* 22,500 436
Finish Line* 41,000 538
Gadzooks* 25,600 538
General Nutrition* 13,000 442
Inacom* 18,700 525
Nautica Enterprises* 38,400 893
The North Face* 20,400 449
Paul Harris Stores* 19,900 200
Pre-Paid Legal Services* 29,700 1,015
------
5,938
------
CONSUMER STAPLES -- 4.5%
Helen of Troy* 44,400 716
NBTY* 35,300 1,178
------
1,894
------
ENERGY -- 6.4%
Noble Drilling* 12,600 386
Patterson Energy* 4,400 170
Pride International * 17,200 434
Reading & Bates* 22,100 926
Veritas Dgc* 20,300 802
------
2,718
------
============================================================================ 57
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
FINANCIAL SERVICES -- 6.0%
Billing Information Concepts* 2,600 $ 125
CMAC Investment 11,800 712
E*trade Group* 23,400 538
Fremont General 6,000 329
Inspire Insurance Solutions* 900 19
PMT Services* 59,400 824
--------
2,547
--------
HEALTH CARE -- 20.5%
Adac Laboratories 55,400 1,094
Chronimed* 23,300 283
Dura Pharmaceuticals* 18,500 849
Envoy* 29,300 853
Express Scripts, Cl A* 12,200 732
FPA Medical Management* 41,400 771
HBO 19,800 950
HCIA* 41,700 495
Jones Medical Industries 26,700 1,021
MedImmune* 12,800 549
Pharmacyclics* 13,400 343
Respironics* 12,800 286
Simione Central Holdings* 16,600 149
Sonus Pharmaceuticals* 11,000 364
--------
8,739
--------
REAL ESTATE INVESTMENT TRUST -- 0.7%
Starwood Lodging Trust 5,000 289
--------
TECHNOLOGY -- 29.7%
American Software, Cl A* 108,700 999
Ascend Communications* 6,700 164
Cadence Design Systems* 32,400 794
Compuware* 17,700 566
International Network Services* 15,200 352
JDA Software Group* 13,000 455
Keane* 5,900 240
Larscom, Cl A* 97,600 927
LeCroy* 4,800 145
Manugistics Group* 18,300 817
Maxim Integrated Products* 15,200 524
SHARES /FACE MARKET
DESCRIPTION AMOUNT (000) VALUE (000)
===============================================================================
Microchip Technology* 11,700 $ 351
National Data 10,000 361
Networks Associates* 15,900 841
Pairgain Technologies* 21,300 413
Parametric Technology* 20,900 990
Peoplesoft* 14,000 546
PMC Sierra* 43,100 1,336
Remedy* 15,000 315
Systems & Computers Technology* 5,900 293
Vantive* 17,100 432
Wonderware* 30,000 424
Xilinx* 9,700 340
--------
12,625
--------
TRANSPORTATION -- 0.7%
CNF Transportation 8,400 322
--------
TOTAL COMMON STOCK
(Cost $37,227) 41,968
--------
REPURCHASE AGREEMENT -- 1.8%
J.P. Morgan
6.750%, dated 12/31/97, matures
01/02/98, repurchase price
$769,438 (collateralized by
U.S. Government Agency
Instrument, total market
value: $777,534) $ 762 762
--------
TOTAL REPURCHASE AGREEMENT
(Cost $762) 762
--------
TOTAL INVESTMENTS -- 100.5%
(Cost $37,989) 42,730
--------
OTHER ASSETS AND LIABILITIES, NET -- (0.5%) (233)
--------
58 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
DESCRIPTION VALUE (000)
===============================================================================
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization -- no par value)
based on 3,135,950 outstanding shares
of beneficial interest $ 36,528
Portfolio Shares of the Investor Share Class
(unlimited authorization -- no par value)
based on 41,559 outstanding shares
of beneficial interest 415
Accumulated net realized gain on investments 813
Net unrealized appreciation on investments 4,741
--------
TOTAL NET ASSETS -- 100.0% $ 42,497
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $13.38
========
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- INVESTOR SHARE CLASS $13.29
========
- -------------------------------------------------------------------------------
(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
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
============================================================================ 59
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
REAL ESTATE FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
HOTELS -- 9%
HEALTHCARE FACILITIES -- 1%
DIVERSIFIED -- 8%
RETAIL -- 18%
OFFICE/INDUSTRIAL -- 41%
RESIDENTIAL -- 23%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
COMMON STOCK -- 92.0%
REAL ESTATE INVESTMENT TRUSTS -- 92.0%
DIVERSIFIED -- 7.6%
Colonial Properties Trust 2,500 $ 75
Pacific Gulf Properties 1,200 28
Vornado Realty Trust 2,600 122
------
225
------
HEALTHCARE FACILITIES -- 1.0%
Nationwide Health Properties 1,200 31
------
HOTELS -- 8.1%
Patriot American Hospitality 4,200 121
Starwood Lodging Trust 2,100 122
------
243
------
OFFICE/INDUSTRIAL -- 37.8%
Arden Realty 3,400 105
Boston Properties 1,700 56
Catellus Development 2,200 44
Centerpoint Properties 2,600 91
Duke Realty Investments 5,000 121
Equity Office Properties Trust 3,700 117
Highwoods Properties 2,700 100
Liberty Property Trust 3,000 86
Reckson Associates 3,000 76
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
Security Capital Industrial Trust 3,000 $ 75
Shurgard Storage Centers* 1,600 46
Spieker Properties 2,300 99
Weeks 3,500 112
------
1,128
------
RESIDENTIAL -- 21.2%
Avalon Properties 3,800 118
Bay Apartment Communities 3,100 121
BRE Properties 1,600 45
Equity Residential Properties Trust 2,400 121
Irvine Apartment Communities 2,100 67
Manufactured Home Communities 2,400 65
Post Properties 1,500 61
Security Capital Pacific Trust 1,500 36
------
634
------
RETAIL -- 16.3%
CBL & Associates Properties 1,800 44
Chelsea GCA Realty 1,200 46
Developers Diversified Realty 2,000 76
Federal Realty Investment Trust 1,500 39
Kimco Realty 2,100 74
Rouse Company 2,200 72
Simon DeBartolo Group 3,000 98
Tanger Outlet Center 1,200 37
------
486
------
TOTAL COMMON STOCK
(Cost $2,762) 2,747
------
TOTAL INVESTMENTS -- 92.0% OF NET ASSETS
(Cost $2,762) 2,747
======
- -------------------------------------------------------------------------------
(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.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
60 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
SCHEDULE OF INVESTMENTS
ASIAN TIGERS FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
CHINA -- 1%
THAILAND -- 1%
INDIA -- 12%
SOUTH KOREA -- 2%
SINGAPORE -- 13%
PHILIPINES -- 3%
MALAYSIA -- 6%
HONG KONG -- 53%
TAIWAN -- 7%
INDONESIA -- 2%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
FOREIGN COMMON STOCKS -- 88.2%
CHINA -- 0.8%
Eastern Communications, Cl B 125,000 $ 151
Shanghai Tyre & Rubber 487,940 122
-------
273
-------
HONG KONG -- 47.3%
Anhui Expressway 500,000 84
Bank of East Asia 84,000 197
Cheung Kong Holdings 170,000 1,113
China Light & Power* 164,000 910
China Resources Beijing Land 900,000 430
China Resources Development 190,000 424
Citic Pacific 232,000 922
Cosco Pacific 180,000 146
Guangdong Investment 396,000 263
Hang Seng Bank 90,000 868
Henderson China Holdings 250,000 200
Hong Kong & China Gas 223,184 432
Hong Kong Electric 105,000 399
Hong Kong Telecommunications 727,600 1,498
HSBC Holdings 144,000 3,550
Hutchison Whampoa 228,000 1,430
MARKET
DESCRIPTION SHARE VALUE (000)
===============================================================================
Hysan Development 122,000 $ 243
Johnson Electric 196,800 566
Nanjing Posts &
Telecommunications, Cl B* 753,800 244
New World Development 110,000 380
Shanghai Industrial Holdings 80,000 297
Sun Hung Kai Properties 156,000 1,087
Swire Pacific, Cl A 77,000 422
Varitronix International 258,000 443
-------
16,548
-------
INDIA -- 10.6%
East India Hotels GDR 15,000 200
Hindalco Industries GDS 10,000 200
Industrial Credit & Investment
of India 15,000 195
ITC GDR 20,000 400
Mahindra & Mahindra GDR 38,500 409
Mahanagar Telephone Nigam ADR* 21,000 326
Reliance Industries GDS 73,000 616
State Bank of India GDR 47,500 865
Tata Electric Power GDR 500 80
Videsh Sanchar GDR 30,000 421
-------
3,712
-------
INDONESIA -- 1.5%
Gulf Indonesia Resources* 12,500 275
Indah Kiat Warrants* 29,288 1
Indah Kiat Pulp & Paper 347,805 63
Indosat ADR 2,400 46
London Sumatra 232,000 134
-------
519
-------
MALAYSIA -- 4.9%
Berjaya Sports 80,000 205
Golden Hope Plant 200,000 232
Malakoff Berhad 100,000 208
Puncak Niaga* 200,000 149
Rothmans of Pall Mall 75,000 584
Sime UEP Properties 205,000 110
Tenaga 100,000 214
-------
1,702
-------
============================================================================ 61
<PAGE>
===============================================================================
SCHEDULE OF INVESTMENTS
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
PHILIPPINES -- 2.4%
Bank of Philippine Islands 43,000 $ 96
Belle* 500,000 20
Belle Warrants* 100,000 --
C & P Homes 55,000 3
Filinvest Land* 1,000,000 40
Manila Electric, Cl B 71,920 241
Metro Bank & Trust 7,432 51
Philippine Long Distance
Telephone 3,600 79
Philippine Long Distance
Telephone ADR 6,000 135
San Miguel, Cl B 54,450 67
SM Prime Holdings 700,000 105
---------
837
---------
SINGAPORE -- 11.5%
City Developments 102,600 476
Creative Technology* 20,000 406
DBS Land 140,000 215
Development Bank of Singapore-F 46,000 394
Fraser & Neave 33,600 146
Keppel 52,500 151
Keppel Land 155,000 214
Marco Polo Development 350,000 528
Overseas Chinese Banking-F 67,160 391
Overseas Union Bank-F 48,000 184
Singapore Airlines-F 33,000 216
Singapore Press-F 33,400 419
United Overseas Bank-F 50,000 278
---------
4,018
---------
SOUTH KOREA -- 2.0%
Housing & Commercial Bank 8,500 45
Kookmin Bank GDR 22,026 105
Korea Electric Power ADR 10,100 102
Korea Fund* 47,451 314
Samsung Electronics GDS* 5,193 73
SK Telecom ADR 13,261 86
---------
725
---------
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
TAIWAN -- 6.0%
Taiwan Fund 27,500 $ 454
Taiwan Index Fund 140,200 1,647
---------
2,101
---------
THAILAND -- 1.2%
PTT Exploration-F 38,000 439
---------
TOTAL FOREIGN COMMON STOCKS
(Cost $38,250) 30,874
---------
TOTAL INVESTMENTS -- 88.2% OF NET ASSETS
(Cost $38,250) 30,874
=========
- -------------------------------------------------------------------------------
(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
F -- FOREIGN REGISTRY SHARES
GDR -- GLOBAL DEPOSITORY RECEIPT
GDS -- GLOBAL DEPOSITORY SHARE
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
62 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
STATEMENT OF NET ASSETS
LATIN AMERICA EQUITY FUND
[PIE CHART OMITTED]
PLOT POINTS ARE AS FOLLOWS:
PANAMA -- 1%
MEXICO -- 27%
PERU -- 3%
CHILE -- 7%
ARGENTINA -- 12%
BRAZIL -- 50%
% OF TOTAL PORTFOLIO INVESTMENTS (1)
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
FOREIGN COMMON STOCKS -- 75.0%
ARGENTINA -- 12.0%
Cresud* 117,000 $ 234
Disco ADR* 10,000 449
Irsa Inversiones 166,667 620
Perez Companc 83,643 597
Quilmes Industrial Quins ADR 25,000 342
Telefonica de Argentina ADR 33,500 1,248
YPF ADR 15,000 513
----------
4,003
----------
BRAZIL -- 26.6%
CIA Paranaense Energia ADR 25,000 342
Banco Itau 2,000,000 1,075
Bompreco Supermercado GDR 36,500 674
Centrais Electricas Bras 40,000,000 1,989
CIA Paulista de Forca 1,800,000 237
Light Participacoes 1,800,000 540
Light Services de Electricidade 1,051,206 438
Telebras ADR 30,500 3,551
----------
8,846
----------
CHILE -- 6.7%
Andina Embotelladora ADR, Cl A 9,000 187
Andina Embotelladora ADR, Cl B 9,000 175
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
CIA Telecomunicacion Chile ADR 22,625 $ 676
Enersis ADR 10,000 290
Laboratorio Chile ADR 18,000 401
Santa Isabel ADR 15,000 263
Vina Concha y Toro Chile ADR 9,500 240
----------
2,232
----------
PERU -- 2.9%
Credicorp 15,000 270
Telefonica de Peru ADR 30,000 699
----------
969
----------
MEXICO -- 26.0%
APASCO 100,000 686
Coca-Cola Femsa 12,000 696
Consorcio Ara* 141,000 685
Empresas ICA ADR 10,000 164
Fomento Econo Mexicana, Cl B 140,000 1,119
Grupo Carso 120,000 803
Grupo Continental 120,000 430
Grupo Elektra 500,000 868
Grupo Financiero Banamex,
Series B* 100,000 299
Grupo Industrial Bimbo,
Series A 40,000 379
Grupo Televisa* 22,000 851
Organizacion Soriana, Cl B 200,000 880
Panamerican Beverages ADR 24,000 783
----------
8,643
----------
PANAMA -- 0.8%
Bladex 6,000 248
----------
TOTAL FOREIGN COMMON STOCKS
(Cost $21,800) 24,941
----------
FOREIGN PREFERRED STOCKS -- 21.5%
BRAZIL -- 21.5%
Banco Bradesco 80,000,000 789
CIA Pao de Acucar 17,760,780 325
CIA Cervejaria Brahma 500,000 336
CIA Energetica Minas 16,900,000 735
CIA Vale do Rio Doce 25,000 503
CIA Vale do Rio Doce
Preferred Debenture 25,000 --
============================================================================ 63
<PAGE>
===============================================================================
STATEMENT OF NET ASSETS
MARKET
DESCRIPTION SHARES VALUE (000)
===============================================================================
BRAZIL -- (continued)
Copel B 500,000 $ 7
Ericsson Telecomunoicacoes 15,000,000 481
Petrol Brasileiros 6,800,000 1,590
Riograndense Tel 560,000 690
Sadia Concordia 520,000 340
Telecomunicacoes de Sao Paulo 4,236,968 1,128
Votorantim Celulose Papel* 12,000,000 231
-------
7,155
-------
TOTAL FOREIGN PREFERRED STOCKS
(Cost $7,017) 7,155
-------
TOTAL INVESTMENTS -- 96.5%
(Cost $28,817) 32,096
-------
OTHER ASSETS AND LIABILITIES, NET -- 3.5% 1,175
-------
DESCRIPTION VALUE (000)
===============================================================================
NET ASSETS:
Portfolio Shares of the Common Share Class
(unlimited authorization -- no par value)
based on 2,533,241 outstanding shares
of beneficial interest $29,812
Undistributed net investment income 61
Accumulated net realized gain on investments 168
Accumulated net realized loss on
foreign currency transactions (48)
Net unrealized depreciation on
foreign currency and translation of
other assets and liabilities denominated
in foreign currencies (1)
Net unrealized appreciation on investments 3,279
-------
TOTAL NET ASSETS -- 100.0% $33,271
=======
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- COMMON SHARE CLASS $13.13
=======
- -------------------------------------------------------------------------------
(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
ADR -- AMERICAN DEPOSITORY RECEIPT
GDR -- GLOBAL DEPOSITORY RECEIPT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
64 ============================================================================
<PAGE>
============================================================= DECEMBER 31, 1997
This page is left intentionally blank.
============================================================================ 65
<PAGE>
===============================================================================
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES (000)
December 31, 1997
REAL ESTATE ASIAN TIGERS
FUND FUND
==============================================================================================================
<S> <C> <C>
ASSETS:
Investments at market value (Cost $2,762 and $38,250, respectively) $2,747 $30,874
Cash and foreign currency -- 4,139
Receivable for portfolio shares sold 3,000 13
Other assets -- 148
------ -------
Total assets 5,747 35,174
------ -------
LIABILITIES:
Distribution payable -- 68
Payable for investment securities purchased 2,762 --
Payable for portfolio shares redeemed -- 1
Other liabilities -- 107
------ -------
Total liabilities 2,762 176
------ -------
NET ASSETS:
Portfolio Shares of the Common Share Class (unlimited authorization --
no par value) based on 300,010 and 4,560,417 outstanding
shares of beneficial interest, respectively 3,000 47,599
Portfolio Shares of the Investor Share Class (unlimited authorization --
no par value) based on 0 and 44,106 outstanding
shares of beneficial interest, respectively -- 292
Undistributed net investment income -- 42
Accumulated net realized loss on investments -- (5,400)
Accumulated net realized loss from foreign currency transactions -- (158)
Net unrealized depreciation on foreign currency and translation of other
assets and liabilities denominated in foreign currencies -- (1)
Net unrealized depreciation on investments (15) (7,376)
------ -------
NET ASSETS $2,985 $34,998
====== =======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICEPER SHARE -- COMMON SHARE CLASS $9.95 $7.60
====== =======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INVESTOR SHARE CLASS -- $7.57
=======
</TABLE>
The accompanying notes are an integral part of the financial statements.
66 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS (000)
For the Year Ended December 31, 1997
TREASURY GOVERNMENT TAX-EXEMPT
MONEY MARKET MONEY MARKET MONEY MARKET MONEY MARKET
FUND FUND FUND FUND
================================================================================================================
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $10,038 $13,736 $38,900 $9,367
------- ------- ------- ------
EXPENSES:
Administration fees 290 373 1,040 385
Less: administration fees waived (154) (196) (605) (204)
Investment advisory fees 677 497 2,427 897
Less: investment advisory fees waived (302) -- (1,040) (413)
Custody fees 11 13 44 18
Transfer agency fees 39 49 143 55
Professional fees 23 30 106 40
Registration & filing fees 21 7 51 38
Printing 11 11 44 18
Trustee fees 2 3 9 4
Insurance 1 2 5 2
Pricing 1 2 5 2
Distribution fees (1) 20 14 5 7
Amortization of deferred organization costs 2 2 2 2
Miscellaneous 25 1 2 3
Shareholder servicing fees (2) 5 4 1 2
Less: shareholder servicing fees waived (5) (3) -- (2)
------- ------- ------- ------
Total expenses 667 809 2,239 854
------- ------- ------- ------
Net investment income 9,371 12,927 36,661 8,513
------- ------- ------- ------
NET REALIZED LOSS ON INVESTMENTS:
Net realized loss from securities transactions (4) -- -- (3)
------- ------- ------- ------
Net increase in net assets from operations $ 9,367 $12,927 $36,661 $8,510
======= ======= ======= ======
<FN>
(1) ALL DISTRIBUTION FEES ARE INCURRED AT THE INVESTOR SHARE CLASS LEVEL.
(2) ALL SHAREHOLDER SERVICING FEES ARE INCURRED AT THE INVESTOR SHARE CLASS LEVEL.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
============================================================================= 67
<PAGE>
================================================================================
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS (000)
For the Period Ended December 31, 1997
INTERMEDIATE
GOVERNMENT TAX-EXEMPT INTERNATIONAL
FIXED INCOME FIXED INCOME FIXED INCOME FIXED INCOME
FUND FUND FUND FUND
=================================================================================================================
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ -- $ -- $ -- $ --
Interest 8,936 3,432 2,214 914
Less: foreign taxes withheld -- -- -- (8)
------- ------ ------ -------
Total investment income 8,936 3,432 2,214 906
------- ------ ------ -------
EXPENSES:
Administration fees 201 80 60 137
Investment advisory fees 804 322 239 26
Less: investment advisory fees waived (134) (54) (44) --
Custody fees 8 3 2 12
Transfer agency fees 28 12 10 5
Professional fees 18 6 5 2
Registration & filing fees 18 7 10 9
Printing 8 2 2 1
Trustee fees 2 1 1 --
Insurance 1 1 -- --
Pricing (1) (1) 1 14
Distribution fees (1) 1 -- 1 --
Amortization of deferred organization costs 2 2 2 2
Miscellaneous 1 1 1 --
Shareholder servicing fees (2) -- -- -- --
Less: shareholder servicing fees waived -- -- -- --
------- ------ ------ -------
Total expenses 957 382 290 208
------- ------ ------ -------
Net investment income (loss) 7,979 3,050 1,924 698
------- ------ ------ -------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from securities transactions 2,841 975 364 53
Net realized loss from foreign currency transactions -- -- -- (738)
Net change in unrealized appreciation (depreciation)
on investments 1,292 13 1,246 (1,218)
Net change in unrealized appreciation (depreciation) on
foreign currency and translation of other assets and
liabilities in foreign currencies -- -- -- 27
------- ------ ------ -------
Net gain (loss) on investments 4,133 988 1,610 (1,876)
------- ------ ------ -------
Net increase (decrease) in net assets from operations $12,112 $4,038 $3,534 $(1,178)
======= ====== ====== =======
<FN>
(1) ALL DISTRIBUTION FEES ARE INCURRED AT THE INVESTOR SHARE CLASS LEVEL.
(2) ALL SHAREHOLDER SERVICING FEES ARE INCURRED AT THE INVESTOR SHARE CLASS LEVEL.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
68 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
<TABLE>
<CAPTION>
LATIN
INTERNATIONAL REAL ASIAN AMERICA
BALANCED VALUE GROWTH EQUITY SMALL CAP ESTATE TIGERS EQUITY
FUND FUND FUND FUND FUND FUND FUND FUND
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1,021 $ 4,846 $ 1,866 $1,669 $ 68 $ -- $ 780 $ 493
1,388 379 340 28 63 -- 105 55
(2) -- (1) (160) -- -- (65) (14)
------- ------- ------- ------ ------ ------ -------- ------
2,407 5,225 2,205 1,537 131 -- 820 534
------- ------- ------- ------ ------ ------ -------- ------
100 304 182 146 60 -- 59 39
466 1,621 972 972 320 -- 393 260
-- -- -- -- -- -- -- --
4 13 8 131 2 -- 125 45
16 43 27 22 10 -- 10 6
9 29 17 13 6 -- 6 4
12 24 24 9 13 -- 15 17
4 13 8 5 3 -- 3 2
1 3 2 1 1 -- 1 1
1 1 1 1 -- -- -- --
3 (1) (1) 12 1 -- 13 13
10 4 8 4 1 -- 2 --
2 2 2 2 2 -- 2 2
-- 1 -- -- -- -- -- --
2 1 2 -- -- -- -- --
(2) (1) (2) -- -- -- -- --
------- ------- ------- ------ ------ ------ -------- ------
628 2,057 1,250 1,318 419 -- 629 389
------- ------- ------- ------ ------ ------ -------- ------
1,779 3,168 955 219 (288) -- 191 145
------- ------- ------- ------ ------ ------ -------- ------
7,701 43,782 18,291 7,122 4,939 -- (5,371) 1,963
-- -- -- (130) -- -- (154) (49)
3,720 5,882 5,511 (1,417) 631 (15) (12,809) 2,862
-- -- -- (18) -- -- (1) (1)
------- ------- ------- ------ ------ ------ -------- ------
11,421 49,664 23,802 5,557 5,570 (15) (18,335) 4,775
------- ------- ------- ------ ------ ------ -------- ------
$13,200 $52,832 $24,757 $5,776 $5,282 $ (15) $(18,144) $4,920
======= ======= ======= ====== ====== ====== ======== ======
</TABLE>
============================================================================= 69
<PAGE>
================================================================================
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS (000)
For the Years Ended December 31,
TREASURY GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
===========================================================================================================================
1997 1996 1997 1996
===========================================================================================================================
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 9,371 $ 7,062 $ 12,927 $ 11,108
Net realized gain (loss) from security transactions (4) (1) -- (2)
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions -- -- -- --
--------- --------- --------- ---------
Net increase in net assets resulting from operations 9,367 7,061 12,927 11,106
--------- --------- --------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Common Share Class (9,005) (6,642) (12,639) (10,893)
Investor Share Class (366) (420) (288) (215)
Net realized gains:
Common Share Class -- -- -- --
--------- --------- --------- ---------
Total dividends distributed (9,371) (7,062) (12,927) (11,108)
--------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Proceeds from shares issued 779,855 631,686 670,698 607,944
Shares issued in lieu of cash distributions 94 5 903 --
Cost of shares repurchased (747,639) (585,711) (672,734) (559,165)
--------- --------- --------- ---------
Increase (decrease) in net assets derived from
Common Share Class transactions 32,310 45,980 (1,133) 48,779
--------- --------- --------- ---------
INVESTOR SHARE CLASS:
Proceeds from shares issued 31,377 34,202 39,993 32,591
Shares issued in lieu of cash distributions 401 417 310 208
Cost of shares repurchased (35,966) (31,639) (36,464) (30,708)
--------- --------- --------- ---------
Increase (decrease) in net assets derived from
Investor Share Class transactions (4,188) 2,980 3,839 2,091
--------- --------- --------- ---------
Increase in net assets derived from capital share transactions 28,122 48,960 2,706 50,870
--------- --------- --------- ---------
Net increase (decrease) in net assets 28,118 48,959 2,706 50,868
NET ASSETS:
Beginning of year 167,365 118,406 261,485 210,617
--------- --------- --------- ---------
End of year $ 195,483 $ 167,365 $ 264,191 $ 261,485
========= ========= ========= =========
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Shares issued 779,855 631,686 670,698 607,944
Shares issued in lieu of cash distributions 94 5 903 --
Shares repurchased (747,639) (585,711) (672,734) (559,165)
--------- --------- --------- ---------
Total Common Share Class transactions 32,310 45,980 (1,133) 48,779
--------- --------- --------- ---------
INVESTOR SHARE CLASS:
Shares issued 31,377 34,202 39,993 32,591
Shares issued in lieu of cash distributions 401 417 310 208
Shares repurchased (35,966) (31,639) (36,464) (30,708)
--------- --------- --------- ---------
Total Investor Share Class transactions (4,188) 2,980 3,839 2,091
--------- --------- --------- ---------
Increase in capital shares 28,122 48,960 2,706 50,870
========= ========= ========= =========
TAX-EXEMPT
MONEY MARKET MONEY MARKET
FUND FUND
===============================================================================================================================
1997 1996 1997 1996
===============================================================================================================================
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 36,661 $ 28,560 $ 8,513 $ 5,246
Net realized gain (loss) from security transactions -- -- (3) 7
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions -- -- -- --
----------- ----------- --------- ---------
Net increase in net assets resulting from operations 36,661 28,560 8,510 5,253
----------- ----------- --------- ---------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Common Share Class (36,562) (28,488) (8,421) (5,159)
Investor Share Class (99) (72) (92) (87)
Net realized gains:
Common Share Class -- -- -- --
----------- ----------- --------- ---------
Total dividends distributed (36,661) (28,560) (8,513) (5,246)
----------- ----------- --------- ---------
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Proceeds from shares issued 1,646,777 1,564,751 704,742 492,151
Shares issued in lieu of cash distributions 93 -- -- --
Cost of shares repurchased (1,507,850) (1,441,724) (642,108) (472,474)
----------- ----------- --------- ---------
Increase (decrease) in net assets derived from
Common Share Class transactions 139,020 123,027 62,634 19,677
----------- ----------- --------- ---------
INVESTOR SHARE CLASS:
Proceeds from shares issued 12,453 5,375 25,920 13,188
Shares issued in lieu of cash distributions 101 70 90 90
Cost of shares repurchased (12,737) (5,337) (25,839) (13,715)
----------- ----------- --------- ---------
Increase (decrease) in net assets derived from
Investor Share Class transactions (183) 108 171 (437)
----------- ----------- --------- ---------
Increase in net assets derived from capital share transactions 138,837 123,135 62,805 19,240
----------- ----------- --------- ---------
Net increase (decrease) in net assets 138,837 123,135 62,802 19,247
NET ASSETS:
Beginning of year 600,181 477,046 190,436 171,189
----------- ----------- --------- ---------
End of year $ 739,018 $ 600,181 $ 253,238 $ 190,436
=========== =========== ========= =========
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Shares issued 1,646,777 1,564,751 704,742 492,151
Shares issued in lieu of cash distributions 93 -- -- --
Shares repurchased (1,507,850) (1,441,724) (642,108) (472,474)
----------- ----------- --------- ---------
Total Common Share Class transactions 139,020 123,027 62,634 19,677
----------- ----------- --------- ---------
INVESTOR SHARE CLASS:
Shares issued 12,453 5,375 25,920 13,188
Shares issued in lieu of cash distributions 101 70 90 90
Shares repurchased (12,737) (5,337) (25,839) (13,715)
----------- ----------- --------- ---------
Total Investor Share Class transactions (183) 108 171 (437)
----------- ----------- --------- ---------
Increase in capital shares 138,837 123,135 62,805 19,240
=========== =========== ========= =========
FIXED
INCOME
FUND
================================================================================================
1997 1996
================================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 7,979 $ 7,401
Net realized gain (loss) from security transactions 2,841 944
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 1,292 (4,280)
-------- --------
Net increase in net assets resulting from operations 12,112 4,065
-------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Common Share Class (7,944) (7,368)
Investor Share Class (24) (34)
Net realized gains:
Common Share Class (69) --
-------- --------
Total dividends distributed (8,037) (7,402)
-------- --------
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Proceeds from shares issued 37,017 26,722
Shares issued in lieu of cash distributions 749 --
Cost of shares repurchased (24,610) (25,038)
-------- --------
Increase (decrease) in net assets derived from
Common Share Class transactions 13,156 1,684
-------- --------
INVESTOR SHARE CLASS:
Proceeds from shares issued -- 102
Shares issued in lieu of cash distributions 24 34
Cost of shares repurchased (68) (303)
-------- --------
Increase (decrease) in net assets derived from
Investor Share Class transactions (44) (167)
-------- --------
Increase in net assets derived from capital share transactions 13,112 1,517
-------- --------
Net increase (decrease)in net assets 17,187 (1,820)
NET ASSETS:
Beginning of year 124,389 126,209
-------- --------
End of year $141,576 $124,389
======== ========
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Shares issued 3,648 2,660
Shares issued in lieu of cash distributions 73 --
Shares repurchased (2,408) (2,503)
-------- --------
Total Common Share Class transactions 1,313 157
-------- --------
INVESTOR SHARE CLASS:
Shares issued -- 10
Shares issued in lieu of cash distributions 2 3
Shares repurchased (6) (30)
-------- --------
Total Investor Share Class transactions (4) (17)
-------- --------
Increase in capital shares 1,309 140
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
==================================== 70 & 71 ===================================
<PAGE>
============================================================== DECEMBER 31, 1997
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS (000)
For the Years Ended December 31,
INTERMEDIATE TAX-EXEMPT
GOVERNMENT FIXED FIXED INCOME
INCOME FUND FUND
================================================================================================================
1997 1996 1997 1996
================================================================================================================
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 3,050 $ 3,596 $ 1,924 $ 2,264
Net realized gain (loss) from security and
foreign currency transactions 975 (1,069) 364 123
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 13 (412) 1,246 (1,230)
-------- -------- ------- --------
Net increase (decrease) in net assets resulting
from operations 4,038 2,115 3,534 1,157
-------- -------- ------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Common Share Class (3,042) (3,552) (1,897) (2,225)
Investor Share Class (7) (41) (26) (40)
Net realized gains:
Common Share Class (21) -- -- --
Investor Share Class -- -- -- --
-------- -------- ------- --------
Total dividends distributed (3,070) (3,593) (1,923) (2,265)
-------- -------- ------- --------
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Proceeds from shares issued 11,087 14,074 6,666 2,028
Shares issued in lieu of cash distributions 66 -- 1 --
Cost of shares repurchased (17,079) (29,218) (7,571) (11,274)
-------- -------- ------- --------
Increase (decrease) in net assets derived from
Common Share Class transactions (5,926) (15,144) (904) (9,246)
-------- -------- ------- --------
INVESTOR SHARE CLASS:
Proceeds from shares issued 7 10 -- 37
Shares issued in lieu of cash distributions 7 41 25 40
Cost of shares repurchased (164) (2,695) (190) (497)
-------- -------- ------- --------
Increase (decrease) in net assets derived from
Investor Share Class transactions (150) (2,644) (165) (420)
-------- -------- ------- --------
Increase (decrease) in net assets derived from
capital share transactions (6,076) (17,788) (1,069) (9,666)
-------- -------- ------- --------
Net increase (decrease) in net assets (5,108) (19,266) 542 (10,774)
NET ASSETS:
Beginning of year 57,146 76,412 40,436 51,210
-------- -------- ------- --------
End of year $ 52,038 $ 57,146 $40,978 $ 40,436
======== ======== ======= ========
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Shares issued 1,115 1,424 658 204
Shares issued in lieu of cash distributions 7 -- -- --
Shares repurchased (1,723) (2,955) (753) (1,135)
-------- -------- ------- --------
Total Common Share Class transactions (601) (1,531) (95) (931)
-------- -------- ------- --------
INVESTOR SHARE CLASS:
Shares issued 1 1 -- 4
Shares issued in lieu of cash distributions 1 4 2 4
Shares repurchased (17) (273) (18) (50)
-------- -------- ------- --------
Total Investor Share Class transactions (15) (268) (16) (42)
-------- -------- ------- --------
Increase (decrease) in capital shares (616) (1,799) (111) (973)
======== ======== ======= ========
INTERNATIONAL
FIXED INCOME BALANCED
FUND FUND
=================================================================================================================
1997 1996 1997 1996
=================================================================================================================
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 698 $ 819 $ 1,779 $ 1,747
Net realized gain (loss) from security and
foreign currency transactions (685) 189 7,701 3,483
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions (1,191) (458) 3,720 1,658
------- ------- -------- --------
Net increase (decrease) in net assets resulting
from operations (1,178) 550 13,200 6,888
------- ------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Common Share Class -- (1,079) (1,679) (1,638)
Investor Share Class -- (7) (95) (111)
Net realized gains:
Common Share Class -- -- (1,663) (3,719)
Investor Share Class -- -- (101) (259)
------- ------- -------- --------
Total dividends distributed -- (1,086) (3,538) (5,727)
------- ------- -------- --------
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Proceeds from shares issued 5,852 7,829 15,990 16,720
Shares issued in lieu of cash distributions -- -- 2,033 --
Cost of shares repurchased (6,666) (7,168) (13,135) (13,137)
------- ------- -------- --------
Increase (decrease) in net assets derived from
Common Share Class transactions (814) 661 4,888 3,583
------- ------- -------- --------
INVESTOR SHARE CLASS:
Proceeds from shares issued 1 24 202 199
Shares issued in lieu of cash distributions -- 7 194 366
Cost of shares repurchased (40) (41) (522) (901)
------- ------- -------- --------
Increase (decrease) in net assets derived from
Investor Share Class transactions (39) (10) (126) (336)
------- ------- -------- --------
Increase (decrease) in net assets derived from
capital share transactions (853) 651 4,762 3,247
------- ------- -------- --------
Net increase (decrease) in net assets (2,031) 115 14,424 4,408
NET ASSETS:
Beginning of year 17,673 17,558 58,256 53,848
------- ------- -------- --------
End of year $15,642 $17,673 $ 72,680 $ 58,256
======= ======= ======== ========
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Shares issued 598 745 1,341 1,522
Shares issued in lieu of cash distributions -- -- 162 --
Shares repurchased (696) (679) (1,089) (1,195)
------- ------- -------- --------
Total Common Share Class transactions (98) 66 414 327
------- ------- -------- --------
INVESTOR SHARE CLASS:
Shares issued -- 2 17 18
Shares issued in lieu of cash distributions -- 1 16 33
Shares repurchased (4) (4) (44) (81)
------- ------- -------- --------
Total Investor Share Class transactions (4) (1) (11) (30)
------- ------- -------- --------
Increase (decrease) in capital shares (102) 65 403 297
======= ======= ======== ========
VALUE
FUND
=====================================================================================
1997 1996
=====================================================================================
<S> <C> <C>
OPERATIONS:
Net investment income $ 3,168 $ 3,193
Net realized gain (loss) from security and
foreign currency transactions 43,782 14,781
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 5,882 9,618
-------- --------
Net increase (decrease) in net assets resulting
from operations 52,832 27,592
-------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Common Share Class (3,124) (3,167)
Investor Share Class (23) (31)
Net realized gains:
Common Share Class (6,385) (13,897)
Investor Share Class (55) (141)
-------- --------
Total dividends distributed (9,587) (17,236)
-------- --------
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Proceeds from shares issued 46,181 53,326
Shares issued in lieu of cash distributions 1,761 --
Cost of shares repurchased (34,888) (30,087)
-------- --------
Increase (decrease) in net assets derived from
Common Share Class transactions 13,054 23,239
-------- --------
INVESTOR SHARE CLASS:
Proceeds from shares issued 185 184
Shares issued in lieu of cash distributions 76 169
Cost of shares repurchased (359) (306)
-------- --------
Increase (decrease) in net assets derived from
Investor Share Class transactions (98) 47
-------- --------
Increase (decrease) in net assets derived from
capital share transactions 12,956 23,286
-------- --------
Net increase (decrease) in net assets 56,201 33,642
NET ASSETS:
Beginning of year 166,382 132,740
-------- --------
End of year $222,583 $166,382
======== ========
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Shares issued 3,041 4,037
Shares issued in lieu of cash distributions 110 --
Shares repurchased (2,235) (2,296)
-------- --------
Total Common Share Class transactions 916 1,741
-------- --------
INVESTOR SHARE CLASS:
Shares issued 12 15
Shares issued in lieu of cash distributions 5 12
Shares repurchased (24) (23)
-------- --------
Total Investor Share Class transactions (7) 4
-------- --------
Increase (decrease) in capital shares 909 1,745
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
==================================== 72 & 73 ===================================
<PAGE>
============================================================== DECEMBER 31, 1997
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS (000)
For the Years Ended December 31,
INTERNATIONAL
GROWTH EQUITY
FUND FUND
=================================================================================================================
1997 1996 1997 1996
=================================================================================================================
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 955 $ 1,225 $ 219 $ 386
Net realized gain (loss) from security and
foreign currency transactions 18,291 5,669 6,992 531
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 5,511 10,988 (1,435) 7,529
-------- -------- -------- --------
Net increase (decrease) in net assets resulting
from operations 24,757 17,882 5,776 8,446
-------- -------- -------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Common Share Class (927) (1,202) (438) (238)
Investor Share Class (19) (31) (3) --
Net realized gains:
Common Share Class (12,320) (6,079) (5,820) (915)
Investor Share Class (318) (189) (83) (16)
-------- -------- -------- --------
Total dividends distributed (13,584) (7,501) (6,344) (1,169)
-------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Proceeds from shares issued 37,264 31,892 25,978 35,035
Shares issued in lieu of cash distributions 8,048 -- 2,329 --
Cost of shares repurchased (18,688) (24,937) (38,751) (23,444)
-------- -------- -------- --------
Increase (decrease) in net assets derived from
Common Share Class transactions 26,624 6,955 (10,444) 11,591
-------- -------- -------- --------
INVESTOR SHARE CLASS:
Proceeds from shares issued 139 269 266 65
Shares issued in lieu of cash distributions 335 218 83 15
Cost of shares repurchased (383) (474) (702) (300)
-------- -------- -------- --------
Increase (decrease) in net assets derived from
Investor Share Class transactions 91 13 (353) (220)
-------- -------- -------- --------
Increase (decrease) in net assets derived from
capital share transactions 26,715 6,968 (10,797) 11,371
-------- -------- -------- --------
CONTRIBUTIONS OF CAPITAL FROM AFFILIATE: -- -- -- 197
-------- -------- -------- --------
Net increase (decrease) in net assets 37,888 17,349 (11,365) 18,845
NET ASSETS:
Beginning of period 98,246 80,897 98,050 79,205
-------- -------- -------- --------
End of period $136,134 $ 98,246 $ 86,685 $ 98,050
======== ======== ======== ========
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Shares issued 2,520 2,575 1,544 2,309
Shares issued in lieu of cash distributions 561 -- 151 --
Shares repurchased (1,265) (2,023) (2,232) (1,541)
-------- -------- -------- --------
Total Common Share Class transactions 1,816 552 (537) 768
-------- -------- -------- --------
INVESTOR SHARE CLASS:
Shares issued 9 21 15 4
Shares issued in lieu of cash distributions 23 17 5 1
Shares repurchased (25) (37) (41) (19)
-------- -------- -------- --------
Total Investor Share Class transactions 7 1 (21) (14)
-------- -------- -------- --------
Increase (decrease) in capital shares 1,823 553 (558) 754
======== ======== ======== ========
SMALL REAL
CAP ESTATE
FUND FUND(1)
==========================================================================================================
1997 1996 1997
==========================================================================================================
<S> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ (288) $ (82) $ --
Net realized gain (loss) from security and
foreign currency transactions 4,939 5,081 --
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions 631 668 (15)
-------- ------- -------
Net increase (decrease) in net assets resulting
from operations 5,282 5,667 (15)
-------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Common Share Class -- -- --
Investor Share Class -- -- --
Net realized gains:
Common Share Class (4,879) (4,625) --
Investor Share Class (63) (73) --
-------- ------- -------
Total dividends distributed (4,942) (4,698) --
-------- ------- -------
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Proceeds from shares issued 20,984 20,885 3,000
Shares issued in lieu of cash distributions 273 -- --
Cost of shares repurchased (16,009) (9,294) --
-------- ------- -------
Increase (decrease) in net assets derived from
Common Share Class transactions 5,248 11,591 3,000
-------- ------- -------
INVESTOR SHARE CLASS:
Proceeds from shares issued 31 73 --
Shares issued in lieu of cash distributions 54 65 --
Cost of shares repurchased (130) (141) --
-------- ------- -------
Increase (decrease) in net assets derived from
Investor Share Class transactions (45) (3) --
-------- ------- -------
Increase (decrease) in net assets derived from
capital share transactions 5,203 11,588 3,000
-------- ------- -------
CONTRIBUTIONS OF CAPITAL FROM AFFILIATE: -- -- --
-------- ------- -------
Net increase (decrease) in net assets 5,543 12,557 2,985
NET ASSETS:
Beginning of period 36,954 24,397 --
-------- ------- -------
End of period $ 42,497 $36,954 $ 2,985
======== ======= =======
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Shares issued 1,495 1,582 300
Shares issued in lieu of cash distributions 21 -- --
Shares repurchased (1,171) (705) --
-------- ------- -------
Total Common Share Class transactions 345 877 300
-------- ------- -------
INVESTOR SHARE CLASS:
Shares issued 2 5 --
Shares issued in lieu of cash distributions 4 5 --
Shares repurchased (9) (10) --
-------- ------- -------
Total Investor Share Class transactions (3) -- --
-------- ------- -------
Increase (decrease) in capital shares 342 877 300
======== ======= =======
LATIN
ASIAN AMERICA
TIGERS EQUITY
FUND FUND(2)
=================================================================================================================
1997 1996 1997 1996
=================================================================================================================
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 191 $ 69 $ 145 $ (24)
Net realized gain (loss) from security and
foreign currency transactions (5,525) 228 1,914 (111)
Net change in unrealized appreciation (depreciation)
on investments and foreign currency transactions (12,810) 3,452 2,861 417
-------- ------- ------- -------
Net increase (decrease) in net assets resulting
from operations (18,144) 3,749 4,920 282
-------- ------- ------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income:
Common Share Class (68) (117) (84) --
Investor Share Class -- (1) -- --
Net realized gains:
Common Share Class (54) (49) (1,686) --
Investor Share Class (1) (1) -- --
-------- ------- ------- -------
Total dividends distributed (123) (168) (1,770) --
-------- ------- ------- -------
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Proceeds from shares issued 31,613 13,074 24,480 11,807
Shares issued in lieu of cash distributions 25 -- 9 --
Cost of shares repurchased (12,463) (6,097) (5,858) (599)
-------- ------- ------- -------
Increase (decrease) in net assets derived from
Common Share Class transactions 19,175 6,977 18,631 11,208
-------- ------- ------- -------
INVESTOR SHARE CLASS:
Proceeds from shares issued 15,971 1,535 -- --
Shares issued in lieu of cash distributions 1 2 -- --
Cost of shares repurchased (16,324) (1,575) -- --
-------- ------- ------- -------
Increase (decrease) in net assets derived from
Investor Share Class transactions (352) (38) -- --
-------- ------- ------- -------
Increase (decrease) in net assets derived from
capital share transactions 18,823 6,939 18,631 11,208
-------- ------- ------- -------
CONTRIBUTIONS OF CAPITAL FROM AFFILIATE: -- 44 -- --
-------- ------- ------- -------
Net increase (decrease) in net assets 556 10,564 21,781 11,490
NET ASSETS:
Beginning of period 34,442 23,878 11,490 --
-------- ------- ------- -------
End of period $ 34,998 $34,442 $33,271 $11,490
======== ======= ======= =======
CAPITAL SHARE TRANSACTIONS:
COMMON SHARE CLASS:
Shares issued 3,045 1,147 1,841 1,182
Shares issued in lieu of cash distributions 3 -- 1 --
Shares repurchased (1,310) (539) (430) (60)
-------- ------- ------- -------
Total Common Share Class transactions 1,738 608 1,412 1,122
-------- ------- ------- -------
INVESTOR SHARE CLASS:
Shares issued 1,419 138 -- --
Shares issued in lieu of cash distributions -- -- -- --
Shares repurchased (1,446) (138) -- --
-------- ------- ------- -------
Total Investor Share Class transactions (27) -- -- --
-------- ------- ------- -------
Increase (decrease) in capital shares 1,711 608 1,412 1,122
======== ======= ======= =======
<FN>
(1) COMMENCED OPERATIONS ON DECEMBER 31, 1997.
(2) COMMENCED OPERATIONS ON JULY 1, 1996.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
==================================== 74 & 75 ===================================
<PAGE>
============================================================== DECEMBER 31, 1997
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
NET ASSET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE NET AND UNREALIZED FROM NET FROM NET ASSET
BEGINNING INVESTMENT GAINS 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>
COMMON SHARE CLASS
1997 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 4.97%
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 SHARE CLASS
1997 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 4.70%
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
====================================================================================================================================
COMMON SHARE CLASS
1997 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 5.33%
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 SHARE CLASS
1997 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 5.05%
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
====================================================================================================================================
COMMON SHARE CLASS
1997 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 5.41%
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 SHARE CLASS
1997 $1.00 $0.05 $0.00 $(0.05) $0.00 $1.00 5.12%
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
====================================================================================================================================
INVESTMENT
RATIO OF NET RATIO OF EXPENSES INCOME (LOSS)
RATIO OF INVESTMENT TO AVERAGE TO AVERAGE
NET ASSETS EXPENSES INCOME NET ASSETS NET ASSETS
END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
==================================================================================================================
TREASURY MONEY MARKET FUND
==================================================================================================================
<S> <C> <C> <C> <C> <C>
COMMON SHARE CLASS
1997 $188,761 0.33% 4.86% 0.57% 4.62%
1996 156,455 0.44 4.70 0.59 4.55
1995 110,475 0.44 5.16 0.59 5.01
1994 111,545 0.45 3.50 0.61 3.34
1993(1) 108,495 0.47 2.53 0.62 2.38
INVESTOR SHARE CLASS
1997 $ 6,722 0.58% 4.60% 0.88% 4.30%
1996 10,910 0.69 4.45 0.84 4.30
1995 7,931 0.69 4.89 0.84 4.74
1994 3,231 0.70 3.52 0.86 3.36
1993(2) 1,347 0.75 2.28 5.23** (2.20)**
==================================================================================================================
GOVERNMENT MONEY MARKET FUND
==================================================================================================================
COMMON SHARE CLASS
1997 $255,259 0.32% 5.21% 0.40% 5.13%
1996 256,392 0.44 4.96 0.44 4.96
1995 207,615 0.42 5.45 0.42 5.45
1994 157,140 0.42 3.81 0.42 3.81
1993(1) 159,401 0.45 2.92 0.45 2.92
INVESTOR SHARE CLASS
1997 $ 8,932 0.59% 4.95% 0.72% 4.82%
1996 5,093 0.69 4.71 0.69 4.71
1995 3,002 0.67 5.18 0.67 5.18
1994 2,739 0.67 3.62 0.67 3.62
1993(3) 1,814 0.72 2.69 2.37** 1.04**
==================================================================================================================
MONEY MARKET FUND
==================================================================================================================
COMMON SHARE CLASS
1997 $737,736 0.32% 5.29% 0.56% 5.05%
1996 598,715 0.43 5.02 0.58 4.87
1995 475,688 0.41 5.50 0.56 5.35
1994 460,583 0.41 3.93 0.56 3.78
1993(1) 367,110 0.46 2.92 0.61 2.77
INVESTOR SHARE CLASS
1997 $ 1,282 0.59% 5.00% 0.85% 4.74%
1996 1,466 0.68 4.77 0.83 4.62
1995 1,358 0.66 5.22 0.81 5.07
1994 605 0.66 4.13 0.81 3.98
1993(4) 118 0.72 2.69 10.48** (7.09)**
==================================================================================================================
<FN>
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.
** Ratios are high relative to subsequent years as a result of the low initial asset
levels during the Investor Share Class' initial year of operations.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
==================================== 76 & 77 ===================================
<PAGE>
============================================================== DECEMBER 31, 1997
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
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>
COMMON SHARE CLASS
1997 $ 1.00 $0.03 $ 0.00 $(0.03) $ 0.00 $ 1.00 3.36%
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 SHARE CLASS
1997 $ 1.00 $0.03 $ 0.00 $(0.03) $ 0.00 $ 1.00 3.10%
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
=================================================================================================================================
COMMON SHARE CLASS
1997 $10.06 $0.60 $ 0.30 $(0.60) $(0.01) $10.35 9.22%
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 SHARE CLASS
1997 $10.09 $0.59 $ 0.29 $(0.58) $(0.01) $10.38 8.92%
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
=================================================================================================================================
COMMON SHARE CLASS
1997 $ 9.85 $0.56 $ 0.19 $(0.56) $ 0.00 $10.04 7.93%
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 SHARE CLASS
1997 $ 9.85 $0.57 $ 0.16 $(0.54) $ 0.00 $10.04 7.66%
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*
=================================================================================================================================
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> <C>
COMMON SHARE CLASS
1997 $250,260 0.33% 3.32% 0.57% 3.08% N/A
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 SHARE CLASS
1997 $ 2,978 0.58% 3.07% 0.89% 2.76% N/A
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
===============================================================================================================================
COMMON SHARE CLASS
1997 $141,148 0.71% 5.95% 0.81% 5.85% 233%
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 SHARE CLASS
1997 $ 428 0.96% 5.71% 1.12% 5.55% 233%
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
===============================================================================================================================
COMMON SHARE CLASS
1997 $ 51,934 0.71% 5.69% 0.81% 5.59% 283%
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 SHARE CLASS
1997 $ 104 0.96% 5.44% 1.10% 5.30% 283%
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
===============================================================================================================================
<FN>
1. Commenced operations on January 4, 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.
* 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 Share Class' initial year of operations.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
=================================== 78 & 79 ====================================
<PAGE>
============================================================== DECEMBER 31, 1997
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
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 (LOSS) ON SECURITIES INCOME GAINS OF PERIOD RETURN
====================================================================================================================================
TAX-EXEMPT FIXED INCOME FUND
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON SHARE CLASS
1997 $ 9.99 $0.49 $ 0.42 $(0.49) $ 0.00 $10.41 9.36%
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 SHARE CLASS
1997 $ 9.97 $0.47 $ 0.41 $(0.46) $ 0.00 $10.39 9.11%
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
====================================================================================================================================
COMMON SHARE CLASS
1997 $10.24 $0.43 $(1.03) $ 0.00 $ 0.00 $ 9.64 (5.86)%
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 SHARE CLASS
1997 $10.23 $0.49 $(1.12) $ 0.00 $ 0.00 $ 9.60 (6.16)%
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
====================================================================================================================================
COMMON SHARE CLASS
1997 $10.98 $0.32 $ 2.06 $(0.32) $(0.31) $12.73 22.10%
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 SHARE CLASS
1997 $10.98 $0.30 $ 2.06 $(0.30) $(0.31) $12.73 21.80%
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*
====================================================================================================================================
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 AVERAGE
END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION
PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE RATE+
==================================================================================================================================
TAX-EXEMPT FIXED INCOME FUND
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON SHARE CLASS
1997 $40,441 0.73% 4.84% 0.84% 4.73% 54% N/A
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 SHARE CLASS
1997 $ 537 0.98% 4.59% 1.14% 4.43% 54% N/A
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
==================================================================================================================================
COMMON SHARE CLASS
1997 $15,574 1.22% 4.08% 1.22% 4.08% 52% N/A
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 SHARE CLASS
1997 $ 68 1.47% 3.83% 1.51% 3.78% 52% N/A
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
==================================================================================================================================
COMMON SHARE CLASS
1997 $68,523 0.93% 2.68% 0.93% 2.68% 111% $0.0450
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 SHARE CLASS
1997 $ 4,157 1.18% 2.43% 1.24% 2.37% 111% $0.0450
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
==================================================================================================================================
<FN>
1. Commenced operations on January 4, 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.
* 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 Share Class' initial year of operations.
+ 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.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
==================================== 80 & 81 ===================================
<PAGE>
============================================================== DECEMBER 31, 1997
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
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>
COMMON SHARE CLASS
1997 $13.24 $ 0.24 $ 3.75 $(0.24) $(0.48) $0.00 $16.51 30.49%
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 SHARE CLASS
1997 $13.26 $ 0.20 $ 3.76 $(0.20) $(0.48) $0.00 $16.54 30.20%
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
===============================================================================================================================
COMMON SHARE CLASS
1997 $13.06 $ 0.12 $ 2.97 $(0.12) $(1.46) $0.00 $14.57 23.98%
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 SHARE CLASS
1997 $13.09 $ 0.08 $ 2.97 $(0.08) $(1.46) $0.00 $14.60 23.65%
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
===============================================================================================================================
COMMON SHARE CLASS
1997 $15.83 $0.04 $ 0.68 $(0.08) $(1.09) $0.00 $15.38 4.56%
1996 14.56 0.06 1.37 (0.04) (0.15) 0.03 15.83 10.09(A)
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 SHARE CLASS
1997 $15.79 $0.01 $ 0.66 $(0.03) $(1.09) $0.00 $15.34 4.28%
1996 14.52 0.04 1.35 0.00 (0.15) 0.03 15.79 9.85*(A)
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*
===============================================================================================================================
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF EXPENSES INCOME (LOSS)
RATIO OF NET 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+
========================================================================================================================
VALUE FUND
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON SHARE CLASS
1997 $220,618 1.01% 1.57% 1.01% 1.57% 79% $0.0408
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 SHARE CLASS
1997 $ 1,965 1.26% 1.32% 1.32% 1.26% 79% $0.0408
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
========================================================================================================================
COMMON SHARE CLASS
1997 $132,649 1.02% 0.79% 1.02% 0.79% 62% $0.0600
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 SHARE CLASS
1997 $ 3,485 1.27% 0.54% 1.33% 0.48% 62% $0.0600
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
========================================================================================================================
COMMON SHARE CLASS
1997 $ 85,440 1.35% 0.23% 1.35% 0.23% 17% $0.0438
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 SHARE CLASS
1997 $ 1,245 1.60% (0.05)% 1.65% (0.10)% 17% $0.0438
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
========================================================================================================================
<FN>
1. Commenced operations on January 4, 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.
* 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 Share Class' initial year of operations.
+ 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.
(A) 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.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
==================================== 82 & 83 ===================================
<PAGE>
============================================================== DECEMBER 31, 1997
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period
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>
COMMON SHARE CLASS
1997 $13.03 $(0.09) $ 2.07 $ 0.00 $(1.63) $0.00 $13.38 15.89%
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 SHARE CLASS
1997 $13.00 $(0.13) $ 2.05 $ 0.00 $(1.63) $0.00 $13.29 15.45%
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*
================================================================================================================================
REAL ESTATE FUND
================================================================================================================================
COMMON SHARE CLASS
1997(16) $10.00 $ 0.00 $(0.05) $ 0.00 $ 0.00 $0.00 $ 9.95 0.00%
================================================================================================================================
ASIAN TIGERS FUND
================================================================================================================================
COMMON SHARE CLASS
1997 $11.91 $ 0.04 $(4.32) $(0.02) $(0.01) $0.00 $ 7.60 (35.98)%
1996 10.45 0.02 1.48 (0.04) (0.02) 0.02 11.91 14.55(B)
1995 9.47 0.12 0.98 (0.12) 0.00 0.00 10.45 11.61
1994(17) 10.00 0.03 (0.53) (0.02) (0.01) 0.00 9.47 (5.07)
INVESTOR SHARE CLASS
1997 $11.89 $ 0.05 $(4.36) $ 0.00 $(0.01) $0.00 $ 7.57 (36.25)%
1996 10.44 (0.02) 1.48 (0.01) (0.02) 0.02 11.89 14.21*(B)
1995 9.47 0.11 0.95 (0.09) 0.00 0.00 10.44 11.18*
1994(18) 10.00 0.01 (0.53) 0.00 (0.01) 0.00 9.47 (5.37)*
================================================================================================================================
LATIN AMERICA EQUITY FUND
================================================================================================================================
COMMON SHARE CLASS
1997 $10.24 $0.05 $ 3.54 $(0.03) $(0.67) $0.00 $13.13 35.50%
1996(19) 10.00 (0.02) 0.26 0.00 0.00 0.00 10.24 2.40
================================================================================================================================
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+
=============================================================================================================================
SMALL CAP FUND
=============================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON SHARE CLASS
1997 $41,945 1.04% (0.72)% 1.04% (0.72)% 170% $0.0597
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 SHARE CLASS
1997 $ 552 1.29% (0.97)% 1.35% (1.03)% 170% $0.0597
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
=============================================================================================================================
REAL ESTATE FUND
=============================================================================================================================
COMMON SHARE CLASS
1997(16) $ 2,985 1.31% (1.31)% 1.61% (1.61)% 0% $0.0500
=============================================================================================================================
ASIAN TIGERS FUND
=============================================================================================================================
COMMON SHARE CLASS
1997 $34,664 1.60% 0.50% 1.60% 0.50% 42% $0.0076
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(17) 17,860 1.60 0.45 1.71 0.34 13 N/A
INVESTOR SHARE CLASS
1997 $ 334 1.85% 0.30% 1.89% 0.26% 42% $0.0076
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(18) 705 1.90 0.15 2.75** (0.70)** 13 N/A
=============================================================================================================================
LATIN AMERICA EQUITY FUND
=============================================================================================================================
COMMON SHARE CLASS
1997 $33,271 1.50% 0.56% 1.50% 0.56% 45% $0.0006
1996(19) 11,490 2.09 (0.55) 2.09 (0.55) 10 0.0004
=============================================================================================================================
<FN>
1. Commenced operations on January 4, 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 December 31, 1997. All ratios except total return for the
period have been annualized.
17. Commenced operations on January 3, 1994. All ratios and total returns for the
period have been annualized.
18. Commenced operations on January 12, 1994. All ratios and total returns for the
period have been annualized.
19. Commenced operations on July 1, 1996. All ratios and total returns for the
period have been annualized.
* 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 Share Class' initial year of operations.
+ 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.
(B) 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.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
==================================== 84 & 85 ===================================
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Rembrandt Funds(R) (the "Trust") was organized as a Massachusetts business trust
under a Declaration of Trust dated September 17, 1992. The Trust is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company with 18 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, Real Estate 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, 1997. 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:
Common Share Class, previously the Trust Class, and Investor Share 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
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.
86 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
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 relevant rates of exchange prevailing on the respective dates of
such transactions.
For foreign equity securities, 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 do isolate the effect of fluctuations in foreign
currency rates when determining the gain or loss upon sale or maturity of
foreign currency denominated debt obligations for Federal income tax purposes.
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 settled. 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. There were no open forward currency contracts at December
31, 1997.
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.
============================================================================= 87
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
OTHER--Distributions from net investment income for the Equity and Fixed
Income Funds are paid to shareholders on a periodic basis. Distributions from
net investment income for the Money Market Funds are distributed to shareholders
daily. Any net realized capital gains on sales of securities are distributed to
shareholders at least annually.
The amounts of distributions from net investment income and net realized
capital gains are determined in accordance with Federal income tax regulations,
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.
On the Statement of Net Assets the following adjustments were made (000):
ACCUMULATED UNDISTRIBUTED
NET REALIZED NET INVESTMENT
GAIN (LOSS) INCOME PAID-IN-CAPITAL
-------------- -------------- ---------------
Government
Money Market $ (32) $ 32 $ --
International
Fixed Income -- 33 (33)
Growth (131) 131 --
Small Cap (369) 369 --
Asian Tigers (17) 17 --
3. ADMINISTRATION AND DISTRIBUTION AGREEMENTS
The Trust and SEI Investments-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. Effective December 1998, the Administrator ceased
its voluntary fee waiver for the Trust's money market funds. After February 27,
1998, First Data Investor Services Group will serve as the Administrator to the
Trust.
The Trust and Rembrandt Financial Services Company (the "Distributor"), a
wholly owned subsidiary of SEI Investments Distribution Co., have entered into a
distribution agreement. The Distributor receives no fees for its distribution
services under this agreement for the Common Share Class of any Fund. The
Distributor is paid a fee of .25% of the average daily net assets of the
Investor Share Class of each Fund.
In addition, the Trust has a shareholder servicing plan with respect to
Investor Shares. The Distributor is paid a fee of .25% of the average daily net
assets of the Investor Class Shares of each Fund for its efforts in maintaining
client accounts, arranging bank wires, responding to client inquiries concerning
services provided on investment and assisting clients in purchase, redemption
and exchange transactions and changing their dividend options, account
designations and addresses.
Effective October 10, 1997, the Trust ceased its sales load on the Investor
Share Class.
88 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
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 two officers of the Trust are partners.
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.
5. INVESTMENT ADVISORY AGREEMENT
The Trust has entered into an investment advisory agreement with ABN AMRO Asset
Management, (USA) Inc., formerly 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 Real Estate, International Equity, TransEurope, Latin America
Equity and Asian Tigers Funds; .70% of the average daily net assets of the
Balanced Fund; .35% of the average daily net assets of the Treasury Money
Market, Money Market,and Tax-Exempt Money Market Funds, and .20% of the average
daily net assets of the Government Money Market Fund. The Advisor has
voluntarily agreed for an indefinite period of time, to waive a portion of its
fee in an amount equal to .10% of the average daily net assets of each of the
Fixed Income Funds, except the 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, 1997 were as follows:
PURCHASES SALES
(000) (000)
---------- ----------
Fixed Income $307,669 $294,461
Intermediate Government
Fixed Income 144,541 150,196
Tax-Exempt Fixed Income 20,998 21,358
International Fixed Income 9,118 7,351
Balanced 71,586 69,999
Value 164,618 154,410
Growth 82,467 71,043
International Equity 16,454 33,626
Small Cap 65,959 66,211
Real Estate 2,762 --
Asian Tigers 15,168 30,398
Latin America Equity 27,851 10,677
============================================================================= 89
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
At December 31, 1997, 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, 1997, for each Fixed Income and Equity Fund is as follows:
NET
UNREALIZED
APPRECIATED DEPRECIATED APPRECIATION
SECURITIES SECURITIES (DEPRECIATION)
(000) (000) (000)
----------- ----------- --------------
Fixed Income $ 2,904 $ (40) $ 2,864
Intermediate
Government
Fixed Income 535 (5) 530
Tax-Exempt Fixed
Income 2,340 (2) 2,338
International Fixed
Income 253 (928) (675)
Balanced 12,002 (1,218) 10,784
Value 34,471 (2,628) 31,843
Growth 31,383 (4,924) 26,459
International Equity 24,638 (7,931) 16,707
Small Cap 7,392 (2,651) 4,741
Real Estate 5 (20) (15)
Asian Tigers 1,989 (9,365) (7,376)
Latin America Equity 4,220 (941) 3,279
At December 31, 1997 the following Funds had available realized capital
losses to offset future net capital gains through fiscal year ended:
2002 2003 2004 2005
(000) (000) (000) (000)
------ ------ ------ ------
Treasury Money Market $ -- $ -- $ 1 $ 4
Government Money Market 2 -- 2 --
Tax-Exempt Money Market 3 1 -- 3
Fixed Income 691 -- -- --
Intermediate Government
Fixed Income 1,051 447 962 --
Tax-Exempt Fixed Income 1,728 307 -- --
International Fixed Income 168 -- -- --
Asian Tigers -- -- -- 3,176
90 =============================================================================
<PAGE>
============================================================== DECEMBER 31, 1997
NOTICE TO SHAREHOLDERS (UNAUDITED)
For shareholders that do not have a December 31, 1997 taxable year end, this
notice is for informational purposes only. For shareholders with a December 31,
1997 taxable year end, please consult your tax advisor as to the pertinence of
this notice.
For the fiscal year ended December 31, 1997 the funds of the Rembrandt Funds
(REGISTERED MARK) are designating net capital gains and qualifying dividend
income with regard to distributions paid during the year as follows:
<TABLE>
<CAPTION>
(A) (B)
NET ORDINARY
CAPITAL GAINS INCOME TOTAL
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS
FUND (TAX BASIS) (TAX BASIS) (TAX BASIS)
- ---- ------------- ------------- -------------
<S> <C> <C> <C>
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 33% 67% 100%
Value 50% 50% 100%
Growth 74% 26% 100%
International Equity 90% 10% 100%
Small Cap 39% 61% 100%
Real Estate 0% 0% 0%
Asian Tigers 42% 58% 100%
Latin America Equity 23% 77% 100%
(C) (D)
QUALIFYING TAX EXEMPT
FUND DIVIDENDS(1) INTEREST
- ---- ------------ ----------
<S> <C> <C>
Treasury Money Market 0% 0%
Government Money Market 0% 0%
Money Market 0% 0%
Tax-Exempt Money Market 0% 98%
Fixed Income 0% 0%
Intermediate Government Fixed Income 0% 0%
Tax-Exempt Fixed Income 0% 100%
International Fixed Income 0% 0%
Balanced 11% 0%
Value 95% 0%
Growth 50% 0%
International Equity 0% 0%
Small Cap 2% 0%
Real Estate 0% 0%
Asian Tigers 0% 0%
Latin America Equity 0% 0%
<FN>
(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.
</FN>
</TABLE>
============================================================================= 91
<PAGE>
================================================================================
NOTES
92 =============================================================================
<PAGE>
IT'S EASY TO INVEST IN THE 100% NO-LOAD
COMMON SHARE CLASS OF THE REMBRANDT FUNDS
For more information, on Common or Investor Shares
call 1-800-443-4725.
Or contact us on the Internet at http://www.rembrandtfunds.com.
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 $100 or more (on non-IRA
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] Minimum initial investment for the Common Class is $2,000
($1,000 for IRAs) with subsequent investments of $100 or more.
================================================================================
<PAGE>
REMBRANDT FUNDS [Registration Mark]
- -----------------------------------
ANNUAL REPORT
- -----------------------------------
DECEMBER 31, 1997
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
BALANCED FUND
BALANCED FUND
EQUITY FUNDS
VALUE FUND
GROWTH FUND
SMALL CAP FUND
REAL ESTATE FUND
INTERNATIONAL FUNDS
INTERNATIONAL FIXED INCOME FUND
INTERNATIONAL EQUITY FUND
ASIAN TIGERS FUND
LATIN AMERICA EQUITY FUND
FOR MORE INFORMATION, CALL 1-800-443-4725.
HTTP://WWW.REMBRANDTFUNDS.COM
INVESTMENT ADVISOR
ABN AMRO ASSET MANAGEMENT (USA) INC.
208 South LaSalle Street
Fourth Floor
Chicago, IL 60604-1003
ADMINISTRATOR
SEI FINANCIAL MANAGEMENT CORPORATION
Oaks, PA 19456
DISTRIBUTOR
REMBRANDT FINANCIAL SERVICES COMPANY
Oaks, PA 19456
LEGAL COUNSEL
MORGAN, LEWIS & BOCKIUS
2000 One Logan Square
Philadelphia, PA 19103
AUDITORS
ERNST & YOUNG LLP
Two Commerce Square
2001 Market Street
Suite 4000
Philadelphia, PA 19103
[LOGO OMITTED] ABN-AMRO
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-011-05
