<PAGE> 1
[JOHNSON MUTUAL FUNDS LOGO]
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ANNUAL REPORT DATED DECEMBER 31, 1996
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[ ] JOHNSON GROWTH FUND
[ ] JOHNSON OPPORTUNITY FUND
[ ] JOHNSON FIXED INCOME FUND
[ ] JOHNSON MUNICIPAL INCOME FUND
------------------------------------
INVESTMENT ADVISER:
JOHNSON INVESTMENT COUNSEL, INC.
5556 CHEVIOT ROAD
CINCINNATI, OHIO 45247
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<TABLE>
<CAPTION>
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TABLE OF CONTENTS DECEMBER 31, 1996
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<S> <C>
Our Message to You .......................................................... 1
PERFORMANCE REVIEW AND MANAGEMENT DISCUSSION
Growth Fund .......................................................... 2
Opportunity Fund ..................................................... 3
Fixed Income Fund .................................................... 4
Municipal Income Fund ................................................ 5
PORTFOLIO OF INVESTMENTS
Growth Fund .......................................................... 6 - 8
Opportunity Fund 9 - 11
Fixed Income Fund ....................................................12 - 14
Municipal Income Fund ................................................15 - 17
Statement of Assets and Liabilities .........................................18
Statement of Operations .....................................................19
Statement of Changes in Net Assets
Stock Funds ..........................................................20
Bond Funds ...........................................................21
FINANCIAL HIGHLIGHTS
Stock Funds ..........................................................22
Bond Funds ...........................................................23
Notes to the Financial Statements ...........................................24 - 26
Independent Auditor's Report ................................................27
Trustees, Officers, Transfer Agent, Fund Accountant, Custodian, Auditors ....28
Investment Adviser ..........................................................29
</TABLE>
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OUR MESSAGE TO YOU
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February 25, 1997
Dear Shareholder:
The U.S. stock market experienced another year of positive returns in 1996, well
above most analysts' estimates. Low inflation, and steady, modest economic
expansion helped significantly in the continued earnings' expansion of
companies. The GROWTH FUND, which focuses on a diversified portfolio of quality
growth stocks, increased 16.9% for the year, while the OPPORTUNITY FUND, which
invests in small to medium-sized company stocks, returned 23.1%.
Positive economic performance and higher market inflationary expectations pushed
interest rates up in 1996 and resulted in only modest total returns for
high-quality fixed income investors, after large returns in 1995. The FIXED
INCOME FUND and the MUNICIPAL INCOME FUND, returned 3.1% and 3.4% for the year,
respectively.
The four following pages of the December 31, 1996 Annual Report explain in
greater detail the relative performance of your Funds as compared to the
appropriate Index. The remainder of the report list the stocks and bonds held in
each of the Funds, as well as other financial data and notes.
As Johnson Investment Counsel, Inc., the Funds' Adviser, moves into our
thirty-third year of providing financial advice to our clients, we are pleased
that you have chosen the Johnson Funds to be part of your investment portfolio.
We appreciate the opportunity to continue to be of service to you, your
business, and your family.
Please call if you have any questions or comments about the enclosed report.
Sincerely,
/s/ Tim Johnson
Timothy E. Johnson, President
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1
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GROWTH FUND, PERFORMANCE REVIEW DECEMBER 31, 1996
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$10,000 INITIAL INVESTMENT SINCE INCEPTION
[Graph]
Date Growth Fund S&P
---- ----------- ---
12/29/95 $13,358.55 $15,347.44
1/16/96 $13,167.31 $15,171.09
1/31/96 $13,733.95 $15,869.26
2/15/96 $13,967.68 $16,274.12
2/29/96 $13,882.69 $16,016.27
3/15/96 $13,939.35 $16,060.98
3/29/96 $14,059.76 $16,170.46
4/15/96 $13,946.21 $16,108.14
4/30/96 $14,152.03 $16,408.85
5/16/96 $14,293.97 $16,705.15
5/31/96 $14,357.85 $16,832.08
6/14/96 $14,322.36 $16,768.14
6/28/96 $14,393.34 $16,896.24
7/15/96 $13,518.64 $15,882.00
7/31/96 $13,781.76 $16,150.00
8/15/96 $14,116.00 $16,735.00
8/30/96 $14,030.66 $16,490.00
9/16/96 $14,756.02 $17,326.00
9/30/96 $15,008.47 $17,419.00
10/15/96 $15,250.77 $17,819.00
10/31/96 $15,101.11 $17,900.00
11/15/96 $15,920.66 $18,744.00
11/29/96 $16,284.12 $19,252.00
12/16/96 $15,307.78 $18,354.00
12/31/96 $15,609.73 $18,871.00
<TABLE>
<CAPTION>
For Periods Ending December 31, 1996:
Average Annual
Total Returns (a)
-------------------------------
1 Year 2 Year 4 Year
---------- ---------- ----------
<S> <C> <C> <C>
Johnson Growth Fund 16.85% 24.01% 11.78%
Standard & Poors 500 Index 22.96% 30.07% 17.21%
<FN>
(a) Inception of the Growth Fund was January 4, 1993. The data represented
herein represents past performance and is not a guarantee of future performance.
The value of your shares may fluctuate and be worth more or less than their
original cost at the time of redemption. The average annual total return numbers
above include changes in the Fund's or Index's share price plus reinvestment of
any dividends and capital gains. The Fund's performance is after all fees. The
Index does not have fees. A shareholder cannot invest directly in the Standard &
Poors 500 Index.
</TABLE>
TOP TEN HOLDINGS:
-----------------
Mobil Corporation 4.4%
Procter & Gamble Co. 4.4%
General Electric Co. 4.3%
Johnson & Johnson 4.3%
Hewlett-Packard Co. 4.2%
Sysco Corporation 4.2%
McDonald's Corp. 4.0%
General RE Corporation 4.0%
Electronic Data Systems 3.0%
Columbia/HCA Corp. 2.8%
HOW DID THE GROWTH FUND PERFORM RELATIVE TO THE MARKET?
The return on the Growth Fund for calendar year 1996 was 16.9% as compared to
the Standard & Poors 500 Index return of 23.0%. As often occurs, there was a
wide disparity between the returns for individual industries. At one extreme,
the technology industry had a positive price change of 40% in 1996. At the other
extreme, the utility industry had a price change of negative 2%. The Growth Fund
has a philosophy of being well diversified by industry and, as a result,
maintained a 14% exposure to technology stocks throughout the year, a modest
exposure compared to many of the best performing funds in 1996.
In past reports we have alluded to various trends in the stock market that have
helped or hurt the relative performance of the Growth Fund. High quality stocks,
which the Growth Fund invests in, returned on average 5% less than low quality
stocks in 1996. The trend began to change this past summer when the equity
market declined about 10%. During the decline, higher quality stocks performed
better than low quality as investors attempted to lower risk in their
portfolios. Today, the high quality sector of the equity market sells at very
reasonable premiums to the low quality sector. As a result, we would anticipate
that the Growth Fund is well positioned for a potentially less exuberant market
in 1997.
GROWTH FUND OBJECTIVE: LONG-TERM CAPITAL GROWTH
PRIMARY ASSET CATEGORY: STOCKS OF LARGER-SIZED QUALITY GROWTH COMPANIES
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2
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OPPORTUNITY FUND, PERFORMANCE REVIEW DECEMBER 31, 1996
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$10,000 INITIAL INVESTMENT SINCE INCEPTION
[Graph]
Opportunity S&P
Date Fund Midcap Index
---- ----------- ------------
5/16/94 $10,000 $10,000
5/31/94 $10,307 $10.368
6/30/94 $ 9,980 $10,012
7/31/94 $10,180 $10,350
8/31/94 $10,647 $10,892
9/30/94 $10,393 $10,688
10/31/94 $10,620 $10,805
11/30/94 $10,313 $10,319
12/31/94 $10,499 $10,415
1/31/95 $10,466 $10,522
2/28/95 $10,760 $11,026
3/31/95 $11,094 $11,268
4/30/95 $11,335 $11,459
5/31/95 $11,622 $11,678
6/30/95 $12,291 $12,253
7/31/95 $12,646 $12,891
8/31/95 $12,632 $13,129
9/29/95 $12,860 $13,447
10/31/95 $12,499 $13,100
11/30/95 $12,947 $13,691
12/31/95 $13,152 $13,633
1/31/96 $13,443 $13,831
2/29/96 $13,789 $14,301
3/29/96 $14,046 $14,472
4/30/96 $14,466 $14,915
5/31/96 $14,683 $15,116
6/28/96 $14,364 $14,889
7/31/96 $13,403 $13,889
8/30/96 $14,168 $14,691
9/30/96 $14,852 $15,332
10/31/96 $14,906 $15,376
11/29/96 $15,942 $16,242
12/31/96 $16,190 $16,260
<TABLE>
<CAPTION>
For Periods Ending December 31, 1996:
Average Annual
Total Returns (a)
-------------------------------
1 Year 2 Year 2.6 Year
---------- ---------- ----------
<S> <C> <C> <C>
Johnson Opportunity Fund 23.10% 24.18% 20.16%
Standard & Poors MidCap Index 19.23% 24.95% 20.36%
<FN>
(a) Inception of the Opportunity Fund was May 16, 1994. The data represented
herein represents past performance and is not a guarantee of future performance.
The value of your shares may fluctuate and be worth more or less than their
original cost at the time of redemption. The average annual total return numbers
above include changes in the Fund's or Index's share price plus reinvestment of
any dividends and capital gains. The Fund's performance is after all fees. The
Index does not have fees. A shareholder cannot invest directly in the Standard &
Poors MidCap Index.
</TABLE>
TOP TEN HOLDINGS:
-----------------
G & K Services Inc. 3.1%
Reliastar Financial Corp. 3.0%
Herman Miller Inc. 2.9%
Medusa Corp. 2.7%
Smith International Inc. 2.7%
Transatlantic Holdings 2.6%
USA Waste Services 2.5%
Southtrust Corp. 2.4%
Dollar General Corp. 2.3%
Tidewater Inc. 2.3%
HOW DID THE OPPORTUNITY FUND PERFORM RELATIVE TO THE MARKET?
The Opportunity Fund had a return of 23.1% in 1996 compared to a return of 19.2%
on the Standard & Poors MidCap Index. The performance of smaller stocks was
quite different in 1996 from that of larger stocks. Returns were lower on an
aggregate basis in the midcap sector. Industry returns were also quite
different. The energy and health care industries had average performance in the
large capitalization sector of the market, while in the midcap sector, energy
was the best performing industry with a return of 49%, and health care was the
worst with a return of negative 5%. As with the Growth Fund, the Opportunity
Fund will not be skewed heavily toward certain industries. The above average
performance of the Opportunity Fund came from good stock selection in 1996. The
stocks in the Fund performed better than their respective industries in seven
out of ten industries.
Midcap stocks had lower returns than the large cap universe in 1996, as well as
for the past three years. Many market observers have suggested that, as a
result, the midcap sector provides better valued stocks than the large cap
sector. Our intention is to capitalize on that disparity in the Opportunity
Fund.
OPPORTUNITY FUND OBJECTIVE: LONG-TERM CAPITAL APPRECIATION
PRIMARY ASSET CATEGORY: STOCKS OF MEDIUM/SMALL-SIZED GROWTH COMPANIES
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3
<PAGE> 6
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FIXED INCOME FUND, PERFORMANCE REVIEW DECEMBER 31, 1996
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$10,000 INITIAL INVESTMENT SINCE INCEPTION
[Graph]
Lehman
Intermediate
Fixed Government
Income Corporate
Date Fund Fund
---- ------ ------------
1/4/93 $10,000 $10,000
12/29/95 $12,231 $12,253
1/16/96 $12,254 $12,283
1/31/96 $12,332 $12,358
2/15/96 $12,347 $12,381
2/29/96 $12,146 $12,213
3/15/96 $11,969 $12,075
3/29/96 $12,046 $12,150
4/15/96 $12,015 $12,129
4/30/96 $11,960 $12,107
5/16/96 $11,983 $12,129
5/31/96 $11,921 $12,098
6/14/96 $11,905 $12,099
6/28/96 $12,061 $12,227
7/15/96 $11,990 $12,186
7/31/96 $12,077 $12,263
8/15/96 $12,220 $12,373
8/30/96 $12,061 $12,273
9/13/96 $12,220 $12,395
9/30/96 $12,276 $12,444
10/15/96 $12,396 $12,546
10/31/96 $12,541 $12,664
11/15/96 $12,670 $12,755
11/29/96 $12,758 $12,831
12/16/96 $12,621 $12,742
12/31/96 $12,612 $12,749
<TABLE>
<CAPTION>
For Periods Ending December 31, 1996:
Average Annual
Total Returns (a)
-------------------------------
1 Year 2 Year 4 Year
---------- ---------- ----------
<S> <C> <C> <C>
Johnson Fixed Income Fund 3.11% 10.16% 5.97%
Lehman Intermediate Government Corporate Index 4.05% 9.55% 6.26%
<FN>
(a) Inception of the Fixed Income Fund was January 4, 1993. The data represented
herein represents past performance and is not a guarantee of future performance.
The value of your shares may fluctuate and be worth more or less than their
original cost at the time of redemption. The average annual total return numbers
above include changes in the Fund's or Index's share price plus reinvestment of
any dividends and capital gains. The Fund's performance is after all fees. The
Index does not have fees. A shareholder cannot invest directly in the Lehman
Intermediate Government Corporate Index.
</TABLE>
QUALITY ALLOCATION
- ------------------
AAA
AA
A
BAA
HOW DID THE FIXED INCOME FUND PERFORM RELATIVE TO THE MARKET?
Positive U.S. economic performance and somewhat higher market inflationary
expectations pushed interest rates up in 1996 and resulted in only modest total
returns for high-quality fixed income investors. For the year, the Fixed Income
Fund provided a return of 3.1%, compared to 4.1% for the Lehman Intermediate
Government Corporate Bond Index. The positive returns for both the Fund and the
Index were attained entirely in the second half of the year, as both experienced
a decline during the first six months. Similar to most high-quality taxable bond
funds, the Fixed Income Fund returned less than the Index due to its slightly
longer weighted average maturity and management fees associated with the Fund.
The longer maturity worked to boost the Fund's relative return in the latter
months of the year, as the rise in market interest rates slowed. Another
positive contribution to the Fund was its larger concentration of high-quality
corporate securities. Corporate bonds continued to provide higher returns than
government securities due to their higher initial yield and their narrowing
yield differential throughout the year.
As always, the Fixed Income Fund continues to focus on only high-quality
securities. Each security within the Fund is rated investment-grade quality by
the national credit rating services, with over 95% of the assets rated A or
better. These highly rated securities are considered to have adequate to strong
protection of principal and interest payments, and will help to provide a stable
portfolio valuation should economic circumstances change in the future.
FIXED INCOME FUND OBJECTIVE: INCOME AND CAPITAL PRESERVATION
PRIMARY ASSET CATEGORY: INVESTMENT GRADE GOVERNMENT/CORPORATE BONDS
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4
<PAGE> 7
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MUNICIPAL INCOME FUND, PERFORMANCE REVIEW DECEMBER 31, 1996
- --------------------------------------------------------------------------------
$10,000 INITIAL INVESTMENT SINCE INCEPTION
[Graph]
Lehman
Municipal Five-year
Income G.O. Municipal
Date Fund Index
---- ----------- --------------
5/16/94 $10,000 $10,000
5/31/94 $10,067 $10,092
6/30/94 $10,046 $10,069
7/31/94 $10,180 $10,179
8/31/94 $10,227 $10,227
9/30/94 $10,133 $10,150
10/31/94 $10,045 $10,093
11/30/94 $ 9,950 $10,029
12/31/94 $10,081 $10,117
1/31/95 $10,266 $10,214
2/28/95 $10,423 $10,363
3/31/95 $10,506 $10,528
4/30/95 $10,519 $10,556
5/31/95 $10,720 $10,787
6/30/95 $10,713 $10,797
7/31/95 $10,811 $10,947
8/31/95 $10,930 $11,058
9/29/95 $10,971 $11,092
10/31/95 $11,049 $11,145
11/30/95 $11,148 $11,234
12/29/95 $11,178 $11,295
1/31/96 $11,278 $11,430
2/29/96 $11,235 $11,392
3/29/96 $11,153 $11,332
4/30/96 $11,124 $11,315
5/31/96 $11,110 $11,301
6/28/96 $11,185 $11,381
7/31/96 $11,258 $11,456
8/30/96 $11,258 $11,480
9/30/96 $11,342 $11,567
10/31/96 $11,430 $11,674
11/29/96 $11,584 $11,836
12/31/96 $11,561 $11,819
<TABLE>
<CAPTION>
For Periods Ending December 31, 1996:
Average Annual
Total Returns (a)
-------------------------------
1 Year 2 Year 2.6 Year
---------- ---------- ----------
<S> <C> <C> <C>
Johnson Municipal Income Fund 3.43% 7.09% 5.68%
Lehman Five-Year General Obligation Municipal Index 4.64% 8.08% 6.58%
<FN>
(a) Inception of the Municipal Income Fund was May 16, 1994. The data
represented herein represents past performance and is not a guarantee of future
performance. The value of your shares may fluctuate and be worth more or less
than their original cost at the time of redemption. The average annual total
return numbers above include changes in the Fund's or Index's share price plus
reinvestment of any dividends and capital gains. The Fund's performance is after
all fees. The Index does not have fees. A shareholder cannot invest directly in
the Lehman Five-Year General Obligation Municipal Index.
</TABLE>
QUALITY ALLOCATION
- ------------------
AAA
AA
A
NR
HOW DID THE MUNICIPAL INCOME FUND PERFORM RELATIVE TO THE MARKET?
The Municipal Income Fund returned 3.4% for 1996, as compared to 4.6% for the
Lehman Five-Year General Obligation Municipal Bond Index. Rising interest rates
created moderate downward pressure on the market prices of municipal securities.
The Fund had a slightly lower return than the Index due to the longer weighted
average maturity of the bonds in the Fund, and expenses on the Fund and not on
the Index.
As it became apparent to investors that tax reform would not become a reality in
the near-term, municipal bonds experienced better performance than their taxable
bond counterparts during 1996. Municipals earned over a half percentage point
greater return than taxable bonds before tax, with a greater difference
depending on the investor's tax bracket.
Each of the securities in the Municipal Income Fund that is rated by a national
credit rating service is highly rated, with no security below A. Additionally,
more than 80% of the holdings are rated AA or better. While 5% of the securities
have chosen to not be rated by a rating service, they have the credit
characteristics comparable to the other highly rated holdings. This high-quality
nature of the Fund will help protect investors should economic circumstances
change in the future.
MUNICIPAL INCOME FUND OBJECTIVE: TAX-FREE INCOME AND CAPITAL PRESERVATION
PRIMARY ASSET CATEGORY: INTERMEDIATE-TERM OHIO MUNICIPAL BONDS
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5
<PAGE> 8
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GROWTH FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
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<TABLE>
<CAPTION>
COMMON STOCKS
NUMBER OF SHARES DOLLAR VALUE
---------------- ------------
<S> <C> <C>
AUTO PARTS
Echlin Incorporated 11,500 363,687
------------
TOTAL AUTO PARTS - 1.6% . . . . . . . . . . . . $ 363,687
CHEMICALS
Air Products & Chemicals, Incorporated 7,300 504,612
------------
TOTAL CHEMICALS - 2.4% . . . . . . . . . . . . .$ 504,612
COMMUNICATIONS EQUIPMENT
Motorola, Incorporated 5,100 313,012
Lucent Technologies, Incorporated 2,009 92,916
------------
TOTAL COMMUNICATIONS EQUIPMENT - 1.8% . . . . . $ 405,928
COMPUTER SOFTWARE
Computer Associates International,
Incorporated 9,600 477,600
EMC Corporation* 15,000 496,875
Electronic Data Systems Corporation 15,500 670,375
------------
TOTAL COMPUTER SOFTWARE - 7.4% . . . . . . . . .$ 1,644,850
COMPUTER SYSTEMS
Hewlett-Packard Company 18,400 924,600
------------
TOTAL COMPUTER SYSTEMS - 4.2% . . . . . . . . . $ 924,600
ELECTRIC UTILITIES
TECO Energy, Incorporated 19,000 458,375
------------
TOTAL ELECTRIC UTILITIES - 2.1% . . . . . . . . $ 458,375
ELECTRICAL EQUIPMENT
General Electric Company 9,700 959,087
------------
TOTAL ELECTRICAL EQUIPMENT - 4.3% . . . . . . . $ 959,087
FINANCIAL - INSURANCE
General RE Corporation 5,600 883,400
------------
TOTAL FINANCIAL - INSURANCE - 4.0% . . . . . . .$ 883,400
FINANCIAL - REGIONAL BANKS
Corestates Financial Corporation 12,000 622,500
Fifth Third Bancorp 7,000 439,687
Regions Financial Corporation 9,500 491,031
------------
TOTAL FINANCIAL - REGIONAL BANKS - 7.0% . . . . $ 1,553,218
FINANCIAL - MONEY CENTER BANKS
Citicorp 5,000 515,000
------------
TOTAL FINANCIAL - MONEY CENTER BANKS - 2.3% . . $ 515,000
FOODS AND FOOD RETAILERS
Sara Lee Corporation 14,800 551,300
Sysco Corporation 28,500 929,813
------------
TOTAL FOODS AND FOOD RETAILERS - 6.7% . . . . . $ 1,481,113
<FN>
* Non-dividend paying security.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
6
<PAGE> 9
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GROWTH FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS
NUMBER OF SHARES DOLLAR VALUE
---------------- ------------
<S> <C> <C>
HEALTH CARE - PRODUCTS
Johnson and Johnson 19,000 945,250
------------
TOTAL HEALTH CARE - PRODUCTS - 4.3% . . . . . . $ 945,250
HEALTH CARE - DRUGS
Pfizer, Incorporated 5,300 439,238
Schering-Plough Corporation 7,020 454,545
Smithkline Beecham PLC ADR 7,700 523,600
------------
TOTAL HEALTH CARE - DRUGS - 6.4% . . . . . . . .$ 1,417,383
HEALTH CARE - SERVICES
Columbia/HCA Healthcare Corporation 15,300 623,475
------------
TOTAL HEALTH CARE - SERVICES - 2.8% . . . . . . $ 623,475
HOUSEHOLD PRODUCTS
Duracell International, Incorporated 6,900 482,138
Procter & Gamble Company 9,000 967,500
------------
TOTAL HOUSEHOLD PRODUCTS - 6.5% . . . . . . . . $ 1,449,638
INDUSTRIAL SERVICES
Cintas Corporation 3,400 199,750
------------
TOTAL INDUSTRIAL SERVICES - 1.0% . . . . . . . .$ 199,750
MANUFACTURING
Dover Corporation 11,000 552,750
------------
TOTAL MANUFACTURING - 2.5% . . . . . . . . . . .$ 552,750
METALS - STEEL
Worthington Industries 15,000 271,876
------------
TOTAL METALS - STEEL - 1.2% . . . . . . . . . . $ 271,876
NATURAL GAS
Enron Corporation 10,200 439,875
------------
TOTAL NATURAL GAS - 2.0% . . . . . . . . . . . .$ 439,875
PAPER PRODUCTS
Sonoco Products Company 14,525 375,835
------------
TOTAL PAPER PRODUCTS - 1.7% . . . . . . . . . . $ 375,835
PETROLEUM
Mobil Corporation 8,000 978,000
Royal Dutch Petroleum Company
(Netherlands) 2,400 409,800
------------
TOTAL PETROLEUM - 6.3% . . . . . . . . . . . . .$ 1,387,800
RESTAURANTS
McDonald's Corporation 20,500 927,625
------------
TOTAL RESTAURANTS - 4.2% . . . . . . . . . . . .$ 927,625
<FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
7
<PAGE> 10
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GROWTH FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS
NUMBER OF SHARES DOLLAR VALUE
---------------- ------------
<S> <C> <C>
RETAILING
May Department Stores Company 9,500 444,125
Office Depot, Incorporated* 15,000 266,250
Sherwin Williams Company, (The) 10,500 588,000
Walgreen Company 11,000 440,000
------------
TOTAL RETAILING - 7.8% . . . . . . . . . . . . .$ 1,738,375
SAVINGS AND LOANS
Washington Mutual, Incorporated 11,000 476,438
------------
TOTAL SAVINGS AND LOANS - 2.1% . . . . . . . . .$ 476,438
TELECOMMUNICATION SERVICES
GTE Corporation 10,866 494,403
------------
TOTAL TELECOMMUNICATION SERVICES - 2.2% . . . . $ 494,403
TRANSPORTATION
Burlington Northern, Incorporated 5,200 449,150
------------
TOTAL TRANSPORTATION - 2.0% . . . . . . . . . . $ 449,150
TOTAL COMMON STOCKS - 96.8% . . . . . . . . . . . .$ 21,443,493
(Common Stock Identified Cost $16,691,605)
CASH EQUIVALENTS
Dreyfus U.S. Treasury Prime Money Market 712,551
------------
TOTAL CASH EQUIVALENTS - 3.2% . . . . . . . . . $ 712,551
(Cash Equivalents Identified Cost $712,551)
TOTAL PORTFOLIO VALUE - 100.0% . . . . . . . . . . $ 22,156,044
(Total Portfolio Identified Cost $17,404,156)
Other Assets Less Liabilities . . . . . . . . . .$ (733,331)
TOTAL NET ASSETS $ 21,422,713
<FN>
* Non-dividend paying security.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
8
<PAGE> 11
- --------------------------------------------------------------------------------
OPPORTUNITY FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS
NUMBER OF SHARES DOLLAR VALUE
---------------- ------------
<S> <C> <C>
AUTO PARTS
Echlin, Incorporated 11,200 354,200
--------------
TOTAL AUTO PARTS - 1.5% . . . . . . . . . . . . . . . $ 354,200
BEVERAGES
Coca-Cola Bottling Co. Consolidated 7,500 365,625
Whitman Corporation 10,000 228,750
--------------
TOTAL BEVERAGES - 2.5% . . . . . . . . . . . . . . . . $ 594,375
BUILDING MATERIALS
Medusa Corporation 18,000 618,750
--------------
TOTAL BUILDING MATERIALS - 2.7% . . . . . . . . . . . $ 618,750
CHEMICALS
Cabot Corporation 14,000 351,750
M.A. Hanna Company 14,325 313,359
RPM, Incorporated 17,000 289,000
--------------
TOTAL CHEMICALS - 4.1% . . . . . . . . . . . . . . . . $ 954,109
COMMUNICATIONS EQUIPMENT
Amphenol Corporation, Class A* 15,000 333,750
Cabletron Systems, Incorporated* 10,600 352,450
--------------
TOTAL COMMUNICATIONS EQUIPMENT - 2.9% . . . . . . . . $ 686,200
COMPUTER SOFTWARE
Business Objects, S.A., ADR* 15,000 202,500
Keane, Incorporated* 15,300 485,775
Sterling Software, Incorporated* 6,000 189,750
Sterling Commerce Inc.* 9,555 336,814
Sungard Data Systems, Incorporated* 8,000 316,000
--------------
TOTAL COMPUTER SOFTWARE - 6.6% . . . . . . . . . . . . $ 1,530,839
COMPUTER SYSTEMS
EMC Corporation* 13,500 447,187
Ingram Micro, Inc.* 4,350 100,050
Lexmark International Group, Inc.* 13,000 359,125
Sequent Computer Systems, Incorporated 23,500 417,125
--------------
TOTAL COMPUTER SYSTEMS - 5.7% . . . . . . . . . . . . $ 1,323,487
ELECTRIC UTILITIES
Illinova Corporation 15,000 412,500
TECO Energy, Incorporated 17,400 419,775
Wisconsin Energy Corporation 13,800 370,875
--------------
TOTAL ELECTRIC UTILITIES - 5.2% . . . . . . . . . . . $ 1,203,150
ELECTRONICS - SEMICONDUCTORS
Adaptec, Inc.* 12,000 480,000
Xilinx, Incorporated* 6,000 220,875
--------------
TOTAL ELECTRONICS - SEMICONDUCTORS - 3.0% . . . . . . $ 700,875
ENERGY SERVICES
Smith International, Incorporated* 14,000 628,250
Tidewater Inc. 12,000 543,000
--------------
TOTAL ENERGY SERVICES - 5.0% . . . . . . . . . . . . . $ 1,171,250
<FN>
* Non-dividend paying security.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
9
<PAGE> 12
- --------------------------------------------------------------------------------
OPPORTUNITY FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS
NUMBER OF SHARES DOLLAR VALUE
---------------- ------------
<S> <C> <C>
ENTERTAINMENT AND LEISURE
K2, Inc. 10,000 275,000
--------------
TOTAL ENTERTAINMENT AND LEISURE - 1.2% . . . . . . . . $ 275,000
FINANCIAL - BROKERAGE
A. G. Edwards, Incorporated 7,300 245,462
Quick & Reilly Group, Inc. 7,000 209,125
--------------
TOTAL FINANCIAL - BROKERAGE - 1.9% . . . . . . . . . . $ 454,587
FINANCIAL - INSURANCE
AON Corporation 6,000 372,750
Equitable of Iowa Companies 6,500 298,188
Reliastar Financial Corporation 12,000 693,000
Transatlantic Holdings, Inc. 7,500 603,750
--------------
TOTAL FINANCIAL - INSURANCE - 8.4% . . . . . . . . . . $ 1,967,688
FINANCIAL - REGIONAL BANKS
Bank of New York Co., Incorporated 7,800 263,250
First Union Corp 7,240 535,760
Southtrust Corporation 16,000 558,000
--------------
TOTAL FINANCIAL - REGIONAL BANKS - 5.8% . . . . . . . $ 1,357,010
FOODS AND FOOD RETAILERS
Tootsie Roll Industries 10,000 396,250
--------------
TOTAL FOODS AND FOOD RETAILERS - 1.7% . . . . . . . . $ 396,250
HEALTH CARE - DRUGS
Elan Corporation PLC, ADR* 10,000 332,500
Watson Pharmaceutical, Incorporated* 6,000 269,625
--------------
TOTAL HEALTH CARE - DRUGS - 2.6% . . . . . . . . . . . $ 602,125
HEALTH CARE - PRODUCTS
Guidant Corporation 8,000 456,000
--------------
TOTAL HEALTH CARE - PRODUCTS - 2.0% . . . . . . . . . $ 456,000
HEALTH CARE - SERVICES
Healthcare COMPARE Corporation* 5,500 233,063
Lincare Holdings, Inc.* 8,000 328,000
Vencor, Inc.* 14,000 442,750
--------------
TOTAL HEALTH CARE - SERVICES - 4.3% . . . . . . . . . $ 1,003,813
INDUSTRIAL SERVICES
G & K Services, Inc., Class A 19,200 724,800
--------------
TOTAL INDUSTRIAL SERVICES - 3.1% . . . . . . . . . . . $ 724,800
MACHINE TOOLS
Kennametal, Incorporated 10,500 408,188
--------------
TOTAL MACHINE TOOLS - 1.8% . . . . . . . . . . . . . . $ 408,188
MEDIA AND PUBLISHING
Reynolds & Reynolds Company, Class A 20,000 520,000
--------------
TOTAL MEDIA AND PUBLISHING - 2.2% . . . . . . . . . . $ 520,000
<FN>
* Non-dividend paying security.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
10
<PAGE> 13
- --------------------------------------------------------------------------------
OPPORTUNITY FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS
NUMBER OF SHARES DOLLAR VALUE
---------------- ------------
<S> <C> <C>
METALS
Material Sciences Corporation* 19,000 342,000
Wolverine Tube, Inc.* 10,500 370,125
--------------
TOTAL METALS - 3.1% . . . . . . . . . . . . . . . . . $ 712,125
OFFICE SUPPLIES
Herman Miller, Inc. 12,000 679,500
Staples, Incorporated* 23,250 419,953
--------------
TOTAL OFFICE SUPPLIES - 4.7% . . . . . . . . . . . . . $ 1,099,453
OIL PRODUCTION AND EXPLORATION
Vastar Resources, Incorporated 13,000 494,000
--------------
TOTAL OIL PRODUCTION AND EXPLORATION - 2.1% . . . . . $ 494,000
RESTAURANTS
Wendy's International, Incorporated 18,000 369,000
--------------
TOTAL RESTAURANTS - 1.6% . . . . . . . . . . . . . . . $ 369,000
RETAILING
Arbor Drugs, Inc. 24,000 417,000
Dollar General Corporation 17,000 544,000
--------------
TOTAL RETAILING - 4.1% . . . . . . . . . . . . . . . . $ 961,000
TELECOMMUNICATION SERVICES
Century Telephone Enterprises 16,000 494,000
Paging Network, Incorporated* 8,200 125,050
--------------
TOTAL TELECOMMUNICATION SERVICES - 2.7% . . . . . . . $ 619,050
TRANSPORTATION SERVICES
Fritz Companies* 8,000 102,000
--------------
TOTAL TRANSPORTATION SERVICES - 0.4% . . . . . . . . . $ 102,000
WASTE MANAGEMENT
U.S.A. Waste Services, Inc.* 18,450 588,094
--------------
TOTAL WASTE MANAGEMENT - 2.5% . . . . . . . . . . . . $ 588,094
TOTAL COMMON STOCKS - 95.4% . . . . . . . . . . . . . . . $ 22,247,418
(Common Stock Identified Cost $17,246,111)
CASH EQUIVALENTS
Dreyfus U.S. Treasury Prime Money Market Fund 1,070,319
--------------
TOTAL CASH EQUIVALENTS - 4.6% . . . . . . . . . . . . $ 1,070,319
(Cash Equivalents Identified Cost $1,070,319)
TOTAL PORTFOLIO VALUE - 100.0% . . . . . . . . . . . . . .$ 23,317,737
(Total Portfolio Identified Cost $18,316,430)
Other Assets Less Liabilities . . . . . . . . . . . . . $ (1,225,834)
TOTAL NET ASSETS $ 22,091,903
<FN>
* Non-dividend paying security.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
11
<PAGE> 14
- --------------------------------------------------------------------------------
FIXED INCOME FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME SECURITIES - BONDS
FACE VALUE DOLLAR VALUE
---------- ------------
<S> <C> <C>
BANK BONDS - MAJOR REGIONAL
Banc One Corporation, 7.25% Due 8/1/02 200,000 205,000
Comerica Bank Subordinated Debenture, 10.125% Due 6/1/98 25,000 26,344
Comerica Bank Subordinated Note, 6.875% Due 3/1/08 250,000 243,750
CoreStates Capital, 6.625% Due 3/15/05 200,000 194,750
First Chicago NBD Corp, 7.25% Due 8/15/04 275,000 280,844
PNC Funding Corp. Subordinated Debenture, 6.875% Due 3/1/03 200,000 199,750
Star Bank, 6.625% Due 12/15/06 200,000 193,000
-------------------
TOTAL MAJOR REGIONAL BANKS - 8.3% . . . . . . . . . . . . . . . . . . . . $ 1,343,438
BANK BONDS - MONEY CENTER
Bankers Trust Subordinated Debenture, 7.125% Due 7/31/02 200,000 203,750
Republic New York Corporation, 7.25% Due 7/15/02 200,000 206,500
-------------------
TOTAL MONEY CENTER BANKS - 2.6% . . . . . . . . . . . . . . . . . . . . . $ 410,250
CAPITAL EQUIPMENT
G.E. Corporation Medium Term Note, 6.875% Due 12/29/99 250,000 253,750
Honeywell, Incorporated, 7.125% Due 4/15/08 250,000 251,875
Illinois Tool Works, Inc., 5.875% Due 3/1/00 200,000 195,750
-------------------
TOTAL CAPITAL EQUIPMENT - 4.4% . . . . . . . . . . . . . . . . . . . . . .$ 701,375
CHEMICALS
Hercules, Incorporated, 6.625% Due 6/1/03 250,000 246,875
-------------------
TOTAL CHEMICALS - 1.5% . . . . . . . . . . . . . . . . . . . . . . . . . $ 246,875
ELECTRIC UTILITIES
Carolina Power and Light Company, 6.75% Due 10/1/02 250,000 252,187
Consolidated Edison Corporation, 6.50% Due 2/1/01 200,000 199,250
Louisville Gas & Electric Company, 7.50% Due 7/1/02 25,000 25,469
Midwest Power Corporation, 7.00% Due 2/15/05 200,000 200,000
Pacific Gas & Electric Company, 6.875% Due 12/1/99 40,000 40,300
Public Service Electric & Gas Company, 6.50% Due 5/1/04 200,000 194,750
Union Electric Power Co., First Mortgage, 6.875% Due 8/1/04 200,000 200,511
-------------------
TOTAL ELECTRIC UTILITIES - 6.9% . . . . . . . . . . . . . . . . . . . . . $ 1,112,467
ENTERTAINMENT AND LEISURE
Walt Disney Company, 5.80% Due 10/27/08 250,000 227,813
-------------------
TOTAL ENTERTAINMENT AND LEISURE - 1.4% . . . . . . . . . . . . . . . . . $ 227,813
FINANCIAL - INSURANCE
Allstate Insurance Company, 5.875% Due 6/15/98 250,000 249,063
-------------------
TOTAL FINANCIAL - INSURANCE - 1.6% . . . . . . . . . . . . . . . . . . . $ 249,063
FINANCIAL - SERVICES
American General Finance, 8.125% Due 8/15/09 120,000 129,450
Associates Corporation, N.A., 6.00% Due 3/15/00 200,000 197,500
CIT Group Holdings, 8.375% Due 11/01/01 250,000 267,500
G.E. Capital Corporation Medium Term Note, 6.59% Due 1/15/98 30,000 30,187
General Motors Acceptance Corp. Medium Term, 6.10% Due 9/11/97 200,000 200,572
<FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
12
<PAGE> 15
- --------------------------------------------------------------------------------
FIXED INCOME FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME SECURITIES - BONDS
FACE VALUE DOLLAR VALUE
---------- ------------
<S> <C> <C>
FINANCIAL - SERVICES, CONTINUED
Household Finance Corporation Senior Note, 6.875% Due 3/01/03 200,000 202,000
International Lease Finance Corporation, 6.50% Due 8/15/99 200,000 200,750
-------------------
TOTAL FINANCIAL - SERVICES - 7.6% . . . . . . . . . . . . . . . . . . . . $ 1,227,959
FOOD AND BEVERAGE
General Mills Incorporated, Medium Term Note, 8.85% Due 7/19/99 200,000 211,250
Pepsico, Inc. Medium Term Note, 5.463% Due 7/1/98 200,000 198,250
Sara Lee Corporation, Medium Term Note, 5.70% Due 7/14/00 250,000 244,375
-------------------
TOTAL FOOD AND BEVERAGE - 4.1% . . . . . . . . . . . . . . . . . . . . . .$ 653,875
FOREIGN GOVERNMENT (U.S. DOLLAR DENOMINATED)
Province of Manitoba, Canada, 6.75% Due 3/1/03 200,000 201,500
Province of Ontario, Canada, 8.00% Due 10/17/01 30,000 31,762
Province of Ontario, Canada, 7.375% Due 1/27/03 200,000 207,750
-------------------
TOTAL FOREIGN GOVERNMENT - 2.7% . . . . . . . . . . . . . . . . . . . . .$ 441,012
FOREIGN UTILITIES (U.S. DOLLAR DENOMINATED)
Hydro Quebec Medium Term Note, 6.98% Due 3/01/05 200,000 199,620
-------------------
TOTAL FOREIGN UTILITIES - 1.2% . . . . . . . . . . . . . . . . . . . . . $ 199,620
NEWSPAPER/PUBLISHING
Scripps Howard Corporation, 7.375% Due 12/15/98 225,000 229,500
-------------------
TOTAL NEWSPAPER/PUBLISHING - 1.4% . . . . . . . . . . . . . . . . . . . . $ 229,500
PETROLEUM
Amoco Canada, 7.25% Due 12/1/02 200,000 207,250
Texaco Capital, Incorporated, 6.875% Due 7/15/99 200,000 202,750
-------------------
TOTAL PETROLEUM - 2.6% . . . . . . . . . . . . . . . . . . . . . . . . . .$ 410,000
RAILROADS
CSX Transportation Equipment Trust, 6.07% Due 3/15/01 200,000 195,250
Union Pacific Corporation, 6.25% Due 3/15/99 250,000 249,375
-------------------
TOTAL RAILROADS - 2.8% . . . . . . . . . . . . . . . . . . . . . . . . . $ 444,625
RETAILING
Wal-Mart Stores, Inc., 6.375% Due 3/01/03 200,000 198,250
-------------------
TOTAL RETAILING - 1.2% . . . . . . . . . . . . . . . . . . . . . . . . . $ 198,250
REAL ESTATE INVESTMENT TRUSTS
Merry Land & Investment Company, 7.25% Due 6/15/05 200,000 197,000
-------------------
TOTAL REAL ESTATE INVESTMENT TRUSTS - 1.2% . . . . . . . . . . . . . . . $ 197,000
TELECOMMUNICATIONS
Cincinnati Bell, Inc., 6.24% Due 12/20/03 250,000 244,062
New York Telephone, 5.875% Due 9/1/03 200,000 190,500
Pacific Bell Telephone, 7.00% Due 7/15/04 200,000 202,750
Southwestern Bell Corporation, 6.375% Due 4/1/01 200,000 198,250
-------------------
TOTAL TELECOMMUNICATIONS - 5.2% . . . . . . . . . . . . . . . . . . . . . $ 835,562
<FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
13
<PAGE> 16
- --------------------------------------------------------------------------------
FIXED INCOME FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME SECURITIES - BONDS
FACE VALUE DOLLAR VALUE
---------- ------------
<S> <C> <C>
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS
Federal Home Loan Bank, 6.10% Due 12/13/10 250,000 235,998
Federal Home Loan Bank, 7.03% Due 5/6/11 250,000 255,328
Federal Home Loan Mortgage Corporation, 6.55% Due 1/4/00 200,000 201,672
Federal Home Loan Mortgage Corporation, 8.155% Due 3/9/05 150,000 151,118
Federal Home Loan Mortgage Corporation, 7.35% Due 3/22/05 300,000 312,906
Federal Home Loan Mortgage Corporation, 6.005% Due 12/8/05 200,000 191,280
Federal Home Loan Mortgage Corporation, 5.95% Due 1/19/06 400,000 380,928
Federal Home Loan Mortgage Corporation, CMO Series 1639-PD
Average Maturity 1999, 5.60% due 8/15/06 250,000 245,423
Federal Home Loan Mortgage Corporation, CMO Series 1660
Tranche G, 6.25% Due 7/15/07 250,000 247,700
Federal National Mortgage Association, 6.10% Due 2/10/00 250,000 249,005
Federal National Mortgage Association, 7.50% Due 2/11/02 200,000 209,986
Federal National Mortgage Association, 7.55% Due 4/22/02 200,000 210,758
Federal National Mortgage Association, Medium Term Note
7.80% Due 3/29/05 200,000 203,206
Federal National Mortgage Association, 5.80% Due 2/22/06 450,000 423,796
-------------------
TOTAL UNITED STATES GOVERNMENT AGENCY OBLIGATIONS - 21.8%. . . . . . . . $ 3,519,104
UNITED STATES GOVERNMENT OBLIGATIONS
United States Treasury Note, 6.00% Due 12/31/97 400,000 401,488
United States Treasury Note, 4.75% Due 9/30/98 250,000 245,560
United States Treasury Note, 8.50% Due 11/15/00 400,000 432,024
United States Treasury Note, 7.875% Due 8/15/01 400,000 426,432
United States Treasury Note, 7.50% Due 11/15/01 400,000 421,104
United States Treasury Note, 7.875% Due 11/15/04 325,000 354,659
United States Treasury Note, 5.625% Due 2/15/06 500,000 472,855
United States Treasury Note, 6.875% Due 5/15/06 500,000 515,105
-------------------
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS - 20.3% . . . . . . . . . . . .$ 3,269,227
TOTAL FIXED INCOME - BONDS - 98.8% . . . . . . . . . . . . . . . . . . . . . .$ 15,917,015
(Fixed Income Identified Cost $15,866,354)
CASH EQUIVALENTS
Dreyfus U.S. Treasury Prime Money Market Fund 191,713
-------------------
TOTAL CASH EQUIVALENTS - 1.2%. . . . . . . . . . . . . . . . . . . . . . .$ 191,713
(Cash Equivalents Identified Cost $191,713)
TOTAL PORTFOLIO VALUE - 100.0% . . . . . . . . . . . . . . . . . . . . . . . .$ 16,108,728
(Total Portfolio Identified Cost $16,058,067)
Other Assets Less Liabilities . . . . . . . . . . . . . . . . . . . . . . . $ 30,391
TOTAL NET ASSETS $ 16,139,119
<FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
14
<PAGE> 17
- --------------------------------------------------------------------------------
MUNICIPAL INCOME FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME SECURITIES - MUNICIPAL BONDS
FACE VALUE DOLLAR VALUE
---------- ------------
BUILDING AUTHORITY
<S> <C> <C>
Ohio State Building Authority, Administration Building Fund
Project A, 6.40% Due 10/1/01 50,000 53,750
Ohio State Building Authority, Administrative Building Fund
Projects (MBIA Insured), 5.40% Due 10/1/02 90,000 93,938
Ohio State Building Authority, Correctional Facilities, Series A
Prerefunded 3/1/99 at 102, 7.30% Due 3/1/02 50,000 54,250
Ohio State Building Authority, Ohio Center For The Arts,
5.45% Due 10/01/07 100,000 102,750
Ohio State Building Authority, State Correctional Facilities
Refunding Series 1991 A, 6.50% Due 10/1/01 50,000 53,812
--------
TOTAL BUILDING AUTHORITY - 12.7%..................................................... $358,500
GENERAL OBLIGATION
Belmont County, Ohio General Obligation, (MBIA Insured),
5.10% Due 12/01/05 50,000 50,688
Butler County, Ohio Infrastructure Special Assessment
General Obligation (AMBAC Insured), 4.90% Due 12/1/98 50,000 50,750
Cincinnati, Ohio General Obligation, 5.25% Due 12/1/00 50,000 51,688
Cleveland, Ohio General Obligation, (AMBAC Insured), 50,000 50,938
4.9% Due 9/1/02
Delaware County, Ohio General Obligation, 5.25% Due 12/1/06 50,000 50,500
Fayette County, Ohio General Obligation, 5.10% Due 12/1/03 40,000 40,550
Lakewood, Ohio General Obligation, 6.75% Due 12/1/97 50,000 51,368
Medina County, Ohio General Obligation, 12.625% Due 12/1/99 25,000 30,500
Montgomery County, Ohio General Obligation, 5.30% Due 12/01/00 75,000 77,531
Trumbull County, Ohio General Obligation, 5.25% Due 12/1/05 50,000 51,688
Vandalia, Ohio General Obligation, 4.80% Due 12/01/03 75,000 75,469
--------
TOTAL GENERAL OBLIGATION - 20.6%..................................................... $581,670
HIGHER EDUCATION
Ohio State Public Facilities Commission, Higher Education Capital
Facility, Series 11A (AMBAC Insured), 4.70% Due 6/1/00 75,000 75,937
Ohio State Higher Education Facilities, Denison University,
4.90% Due 11/01/05 75,000 74,812
Ohio State Higher Education Facilities, Series 11-B, 5.90% Due
12/1/05 50,000 52,938
Ohio State Higher Education Facilities, Series A, 6.40% Due
5/01/98 50,000 51,348
University of Cincinnati, Ohio General Receipts, 4.65% Due
6/1/98 50,000 50,312
University of Cincinnati, Ohio General Receipts, 4.75% Due
6/1/06 50,000 49,625
--------
TOTAL HIGHER EDUCATION - 12.6%....................................................... $354,972
<FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements
</TABLE>
15
<PAGE> 18
- --------------------------------------------------------------------------------
MUNICIPAL INCOME FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME SECURITIES - MUNICIPAL BONDS
FACE VALUE DOLLAR VALUE
---------- ------------
<S> <C> <C>
HOSPITAL/HEALTH
Franklin County, Ohio Hospital Refunding, The Children's
Hospital Project, 5.20% Due 11/1/04 50,000 51,063
Hamilton County, Ohio Hospital Facility Revenue, 6.35% Due 1/1/98 50,000 50,978
Hamilton County, Ohio Hospital Facility, Children's Hospital
(FGIC Insured), 5.00% Due 5/15/06 50,000 49,937
Maumee, Ohio Hospital Revenue, St. Lukes Hospital Project
(AMBAC Insured), 4.90% Due 12/1/99 50,000 50,875
Ohio State Public Facilities Commission Mental Health Facilities,
Series 11B (FSA Insured), 4.25% Due 6/1/99 50,000 50,125
--------
TOTAL HOSPITAL/HEALTH - 9.0% . . . . . . . . . . . . . . . . . . . . . . . . . $252,978
SCHOOL DISTRICT
Centerburg, Ohio Local School District, 5.25% Due 10/15/01 40,000 40,950
Centerville, Ohio City School District General Obligation
(FGIC Insured), 5.10% Due 12/1/03 50,000 51,438
Cincinnati, Ohio School District Revenue Anticipation Notes,
5.60% Due 6/15/97 50,000 50,458
Cincinnati, Ohio School District Series A, (AMBAC Insured),
4.65% Due 12/01/99 50,000 50,375
Cleveland, Ohio City School District Refunding Series B
(FGIC Insured), 5.40% Due 6/1/02 50,000 52,062
Cook County, Illinois School District General Obligation
(AMBAC Insured), 5.20% Due 12/1/01 50,000 51,375
Forest Hills, Ohio Local School District, 4.90% Due 12/01/04 100,000 100,125
Gallia County, Ohio Local School District General Obligation
5.00% Due 3/1/03 25,000 25,031
Gallia County, Ohio Local School District General Obligation
5.00% Due 3/1/04 25,000 24,844
Indian Valley School District, Ohio General Obligation
(AMBAC Insured), 5.50% Due 12/1/06 50,000 51,937
Olmsted Falls, Ohio City School District General Obligation
(FGIC Insured), 5.30% Due 12/15/00 50,000 51,750
Southwestern City School District, Ohio, Franklin County and
Pickaway County, 6.25% Due 12/1/05 50,000 53,500
West Geauga, Ohio Local School District, School Improvement
General Obligation (AMBAC Insured), 5.45% Due 11/1/04 50,000 52,437
Woodridge, Ohio Local School District General Obligation,
Summit County (AMBAC Insured), 5.45% Due 12/01/04 50,000 52,438
--------
TOTAL SCHOOL DISTRICT - 25.1% . . . . . . . . . . . . . . . . . . . . . . . $708,720
<FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements
</TABLE>
16
<PAGE> 19
- --------------------------------------------------------------------------------
MUNICIPAL INCOME FUND, PORTFOLIO OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED INCOME SECURITIES - MUNICIPAL BONDS
FACE VALUE DOLLAR VALUE
---------- ------------
UTILITIES
<S> <C> <C>
Weatherford, Texas Utility System Revenue, Series 1994
(MBIA Insured), 5.10% Due 9/1/03 50,000 51,000
----------
TOTAL UTILITIES - 1.8% . . . . . . . . . . . . . $ 51,000
WATER AND SEWER
Akron, Ohio Sewer System Revenue (MBIA Insured)
5.50% Due 12/1/07 50,000 52,000
Celina, Ohio Wastewater System Mortgage Revenue
(FGIC Insured), 5.60% Due 11/01/99 40,000 41,400
Cleveland, Ohio Waterworks Revenue First Mortgage,
Series G (MBIA Insured), 5.25% Due 1/1/04 50,000 51,562
Columbus, Ohio Sewer Revenue, 5.40% Due 6/01/98 50,000 50,938
Miamisburg, Ohio Sewer System Refunding (AMBAC Insured),
4.35% Due 11/15/02 50,000 49,312
Ohio State Water Development Authority (MBIA Insured),
5.00% Due 12/1/98 50,000 50,938
Ohio State Water Development Authority (MBIA Insured),
5.50% Due 6/01/01 50,000 52,125
Southwest Ohio Regional Water District Waterworks Revenue
5.25% Due 12/1/05 50,000 51,125
Warren County, Ohio Water and Sewer Line Extension, Special
Assessment Bonds, Series 1994, 5.50% Due 12/1/03 50,000 52,500
----------
TOTAL WATER AND SEWER - 16.0% . . . . . . . . . . . . . . . . . . $ 451,900
TOTAL FIXED INCOME - MUNICIPAL BONDS - 97.8% $2,759,740
(Municipal Bonds Identified Cost $2,709,793 )
CASH EQUIVALENTS
Federated Ohio Municipal Money Market 62,791
----------
TOTAL CASH EQUIVALENTS - 2.2% . . . . . . . . . . . . . . . . . . . . $ 62,791
(Cash Identified Cost $62,791)
TOTAL PORTFOLIO VALUE - 100.0% . . . . . . . . . . . . . . . . . . . . . $2,822,531
(Total Portfolio Identified Cost $2,772,584)
Other Assets Less Liabilities . . . . . . . . . . . . . . . . . . . . $ (7,872)
TOTAL NET ASSETS $2,814,659
<FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
17
<PAGE> 20
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK FUNDS BOND FUNDS
------------------------------ -----------------------------
FIXED MUNICIPAL
GROWTH OPPORTUNITY INCOME INCOME
FUND FUND FUND FUND
------------- ------------- -------------- ------------
ASSETS:
<S> <C> <C> <C> <C>
Investment Securities $ 22,156,044 $ 23,317,737 $ 16,108,728 $ 2,822,531
at Market Value*
Dividends and Interest Receivable 38,657 18,599 279,962 24,336
Receivable for Securities Sold 0 0 0 0
------------ ------------ ------------ ------------
TOTAL ASSETS. . . . . . . . $ 22,194,701 $ 23,336,336 $ 16,388,690 $ 2,846,867
LIABILITIES:
Investment Securities Purchased 0 0 0 0
Dividends Payable 69,450 54,430 237,832 30,440
Capital Gains Payable 683,507 1,170,723 0 0
Accrued Management Fees 19,031 19,280 11,739 1,768
------------ ------------ ------------ ------------
TOTAL LIABILITIES . . . . . $ 771,988 $ 1,244,433 $ 249,571 $ 32,208
NET ASSETS . . . . . . . . . . $ 21,422,713 $ 22,091,903 $ 16,139,119 $ 2,814,659
NET ASSETS CONSIST OF:
Paid in Capital 16,670,768 17,090,557 16,140,045 2,764,891
Undistributed Net
Investment Income 0 39 37 0
Undistributed Net Realized Gain
(Loss) from Security Transactions 57 0 (51,624) (179)
Net Unrealized Gain (Loss)
on Investments 4,751,888 5,001,307 50,661 49,947
------------ ------------ ------------ ------------
NET ASSETS . . . . . . . . . . $ 21,422,713 $ 22,091,903 $ 16,139,119 $ 2,814,659
SHARES OUTSTANDING . . . . . . 1,012,453 975,440 1,044,581 180,763
OFFERING, REDEMPTION AND
NET ASSET VALUE PER SHARE. . . $ 21.16 $ 22.65 $ 15.45 $ 15.57
*Identified Cost . . . . . . . $ 17,404,156 $ 18,316,430 $ 16,058,067 $ 2,772,584
<FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
18
<PAGE> 21
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK FUNDS BOND FUNDS
---------------------------- ----------------------------
FIXED MUNICIPAL
GROWTH OPPORTUNITY INCOME INCOME
FUND FUND FUND FUND
------------ ----------- ------------ -----------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
12/31/96 12/31/96 12/31/96 12/31/96
------------ ----------- ------------ -----------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Interest $ 27,967 $ 35,027 $ 1,013,429 $ 119,298
Dividends 348,887 212,814 0 0
----------- ----------- ----------- -----------
TOTAL INVESTMENT INCOME . . . $ 376,854 $ 247,841 $ 1,013,429 $ 119,298
EXPENSES:
Gross Management Fee 246,501 251,384 182,376 27,802
Management Fee Waiver
(See accompanying note #3) (56,885) (58,012) (47,576) (9,670)
----------- ----------- ----------- -----------
TOTAL EXPENSES . . . . . . . $ 189,616 $ 193,372 $ 134,800 $ 18,132
NET INVESTMENT INCOME. . . . . . $ 187,238 $ 54,469 $ 878,629 $ 101,166
REALIZED AND UNREALIZED GAINS (LOSSES):
Net Realized Gain (Loss) from
Security Transactions 683,564 1,170,699 (28,072) (179)
Net Unrealized Gain (Loss)
on Investments 2,082,615 2,882,162 (362,410) (14,667)
----------- ----------- ----------- -----------
NET GAIN (LOSS) ON INVESTMENTS. . $ 2,766,179 $ 4,052,861 $ (390,482) $ (14,846)
NET INCREASE IN ASSETS
FROM OPERATIONS. . . . . . . . $ 2,953,417 $ 4,107,330 $ 488,147 $ 86,320
<FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
19
<PAGE> 22
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK FUNDS
------------------------------------------------------------------
GROWTH FUND OPPORTUNITY FUND
------------------------------- -------------------------------
YEAR ENDED YR. ENDED YEAR ENDED YR. ENDED
12/31/96 12/31/95 12/31/96 12/31/95
-------------- -------------- ------------- -------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income $ 187,238 $ 174,821 $ 54,469 $ 63,156
Net Realized Gain (Loss)
from Security Transactions 683,564 295,444 1,170,699 136,269
Net Unrealized Gain (Loss)
on Investments 2,082,615 2,869,051 2,882,162 2,030,849
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
ASSETS FROM OPERATIONS . . . . . . $ 2,953,417 $ 3,339,316 $ 4,107,330 $ 2,230,274
DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income (187,246) (174,821) (54,430) (63,156)
Net Realized Gain from
Security Transactions (683,506) (292,144) (1,170,723) (130,391)
------------ ------------ ------------ ------------
NET DECREASE IN ASSETS
FROM DISTRIBUTIONS . . . . . . . . $ (870,752) $ (466,965) $ (1,225,153) $ (193,547)
CAPITAL SHARE TRANSACTIONS:
Proceeds From Sale of Shares 4,956,433 3,181,606 5,387,376 7,202,770
Net Asset Value of Shares Issued on
Reinvestment of Distributions 378,150 158,353 45,955 4,955
Cost of Shares Redeemed (862,984) (648,025) (1,414,677) (341,113)
------------ ------------ ------------ ------------
NET INCREASE IN ASSETS FROM
CAPITAL SHARE TRANSACTIONS . . . . $ 4,471,599 $ 2,691,934 $ 4,018,654 $ 6,866,612
NET CHANGE IN NET ASSETS. . . . . . . . . $ 6,554,264 $ 5,564,285 $ 6,900,831 $ 8,903,339
Net Assets at Beginning of Period . . . . $ 14,868,449 $ 9,304,164 $ 15,191,072 $ 6,287,733
NET ASSETS AT END OF PERIOD . . . . . . . $ 21,422,713 $ 14,868,449 $ 22,091,903 $ 15,191,072
<FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
20
<PAGE> 23
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND FUNDS
--------------------------------------------------------------------
FIXED INCOME FUND MUNICIPAL INCOME FUND
--------------------------------- --------------------------------
YEAR ENDED YR. ENDED YEAR ENDED YR. ENDED
12/31/96 12/31/95 12/31/96 12/31/95
--------------- --------------- -------------- ---------------
OPERATIONS:
<S> <C> <C> <C> <C>
Net Investment Income $ 878,629 $ 821,802 $ 101,166 $ 83,063
Net Realized Gain (Loss)
from Security Transactions (28,072) (23,420) (179) 747
Net Unrealized Gain (Loss)
on Investments (362,410) 1,598,182 (14,667) 108,108
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN
ASSETS FROM OPERATIONS . . . . . . . $ 488,147 $ 2,396,564 $ 86,320 $ 191,918
DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income (878,592) (821,790) (101,172) (83,054)
Net Realized Gain from
Security Transactions 0 0 0 (747)
------------ ------------ ------------ ------------
NET DECREASE IN ASSETS
FROM DISTRIBUTIONS . . . . . . . . . $ (878,592) $ (821,790) $ (101,172) $ (83,801)
CAPITAL SHARE TRANSACTIONS:
Proceeds From Sale of Shares 3,685,344 3,632,971 590,156 797,695
Net Asset Value of Shares Issued on
Reinvestment of Dividends/Gains 590,859 687,058 69,737 65,076
Cost of Shares Redeemed (3,721,495) (2,376,556) (113,280) (180,347)
------------ ------------ ------------ ------------
NET INCREASE IN ASSETS FROM
CAPITAL SHARE TRANSACTIONS . . . . . $ 554,708 $ 1,943,473 $ 546,613 $ 682,424
NET CHANGE IN NET ASSETS . . . . . . . . . $ 164,263 $ 3,518,247 $ 531,761 $ 790,541
Net Assets at Beginning of Period . . . . $ 15,974,856 $ 12,456,609 $ 2,282,898 $ 1,492,357
NET ASSETS AT END OF PERIOD . . . . . . . $ 16,139,119 $ 15,974,856 $ 2,814,659 $ 2,282,898
<FN>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
21
<PAGE> 24
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD:
<TABLE>
<CAPTION>
STOCK FUNDS
--------------------------------------------------------
GROWTH FUND OPPORTUNITY FUND
------------------------------------------------ --------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED 5/16/94-
12/31/96 12/31/95 12/31/94 12/31/93 12/31/96 12/31/95 12/31/94
-------- -------- -------- -------- -------- -------- --------
Net Asset Value
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning of Period. . . . $ 18.86 14.81 15.71 15.00 $ 19.42 15.70 15.00
OPERATIONS:
Net Investment Income 0.19 0.24 0.24 0.18 0.06 0.08 0.05
Net Gains (losses) on Securities
(Realized & Unrealized) 2.98 4.42 (0.90) 0.71 4.43 3.89 0.70
-------- -------- -------- -------- -------- -------- --------
TOTAL OPERATIONS . . . . $ 3.17 4.66 (0.66) 0.89 $ 4.49 3.97 0.75
DISTRIBUTIONS:
Dividends from Net
Investment Income (0.19) (0.24) (0.24) (0.18) (0.06) (0.08) (0.05)
Distributions from Net
Realized Capital Gains (0.68) (0.37) 0.00 0.00 (1.20) (0.17) 0.00
-------- -------- -------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS. . . $ (0.87) (0.61) (0.24) (0.18) $ (1.26) (0.25) (0.05)
Net Asset Value
End of Period . . . . . . . $ 21.16 18.86 14.81 15.71 $ 22.65 19.42 15.70
TOTAL RETURN . . . . . . . . . 16.85% 31.61% (4.22%) 5.93% 23.10% 25.27% 4.99%
Net Assets, End of Period
(Millions) . . . . . . . . $ 21.42 14.87 9.30 6.58 $ 22.09 15.19 6.29
RATIOS AFTER FEE WAIVERS: (1)
Ratio of Expenses to
Average Net Assets (2) . . 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of Net Income to
Average Net Assets (2) . . 0.99% 1.42% 1.65% 1.38% 0.28% 0.59% 1.01%
Portfolio Turnover Rate. . . . 26.78% 52.91% 30.38% 23.57% 46.43% 62.15% 58.73%
Average Commission Rate
(cents per share). . . . . . . $ 0.0799 $ 0.0876
- --------------------------------------------------------------------------------
<FN>
(1) The Adviser intends fee waivers of 0.30% to be permanent, although the
Adviser retains the right to remove the waivers after 12/31/97. As of
12/31/96, assuming no waiver of management fee expenses, the ratios would
have been: (See note #3.)
Growth Opportunity
------ -----------
Expenses to Average Net Assets 1.30% 1.30%
Net income to Average Net Assets 0.69% 0.00%
(2) Ratios have been annualized in 1994 for the Opportunity Fund.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
22
<PAGE> 25
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD:
<TABLE>
<CAPTION>
BOND FUNDS
-----------------------------------------------------
FIXED INCOME FUND MUNICIPAL INCOME FUND
-------------------------------------------- ------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED 5/16/94-
12/31/96 12/31/95 12/31/94 12/31/93 12/31/96 12/31/95 12/31/94
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period . . . . $15.84 $14.20 $15.80 $15.00 $15.68 $14.73 $15.00
OPERATIONS:
Net Investment Income . . . 0.86 0.83 0.80 0.60 0.63 0.63 0.39
Net Gains (losses) on Securities
(Realized & Unrealized) . . (0.39) 1.64 (1.60) 0.83 (0.11) 0.96 (0.27)
------ ------ ------ ------ ------ ------ ------
TOTAL OPERATIONS . . . . $ 0.47 $ 2.47 $(0.80) $ 1.43 $ 0.52 1.59 0.12
DISTRIBUTIONS:
Dividends from Net
Investment Income . . . . . (0.86) (0.83) (0.80) (0.60) (0.63) (0.63) (0.39)
Distributions from Net
Realized Capital Gains . . 0.00 0.00 0.00 (0.03) 0.00 (0.01) 0.00
------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS . . . $(0.86) $(0.83) $(0.80) $(0.63) $(0.63) $(0.64) $(0.39)
Net Asset Value
End of Period . . . . . . . $15.45 $15.84 $14.20 $15.80 $15.57 $15.68 $14.73
TOTAL RETURN . . . . . . . . . 3.11% 17.70% (5.14%) 9.51% 3.43% 10.88% 0.81%
Net Assets, End of Period
(Millions) . . . . . . . . . $16.14 15.97 12.46 10.08 2.81 2.28 1.49
RATIOS AFTER FEE WAIVERS: (1)
Ratio of Expenses to
Average Net Assets (2). . . 0.85% 0.85% 0.85% 0.85% 0.75% 0.68% 0.01%
Ratio of Net Income to
Average Net Assets (3). . . 5.56% 5.54% 5.53% 5.08% 4.18% 4.28% 5.46%
Portfolio Turnover Rate . . . . 14.04% 4.95% 0.04% 10.14% 6.25% 7.81% 0.00%
- --------------------------------------------------------------------------------
<FN>
(1) The Adviser intends fee waivers of 0.30% on the Fixed Income Fund and 0.40%
on the Municipal Income Fund to be permanent, although the Adviser retains
the right to remove the waivers after 12/31/97. As of 12/31/96, assuming no
waiver of management fee expenses, the ratios would have been: (See
note #3.)
Fixed Municipal
-------- ---------
Expenses to Average net Assets: 1.15% 1.15%
Net income to Average Net Assets: 5.26% 3.78%
(2) The Adviser waived 1.14% of the fee on the Municipal Income Fund in 1994 and
0.47% of the fee in 1995.
(3) Ratios have been annualized in 1994 for the Municipal Income Fund.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
23
<PAGE> 26
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
1) ORGANIZATION:
The Growth Fund, Fixed Income Fund, Opportunity Fund and Municipal Income
Fund are each series of the Johnson Mutual Funds Trust, and are registered
under the Investment Company Act of 1940, as amended, as no-load, open-end
investment companies. The Johnson Mutual Funds Trust was established as an
Ohio business trust under Declaration of Trust dated September 30, 1992. The
Growth and Fixed Income Funds began offering their shares publicly on January
4, 1993. The Opportunity and Municipal Income Funds began offering their
shares publicly on May 16, 1994.
2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
SECURITY VALUATION AND TRANSACTIONS:
The investments in securities are carried at market value. The market
quotation used for common stocks which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price of
the day, determined as of the close of the New York Stock Exchange at 4:00
p.m. Eastern Standard Time. In absence of a sale price, a security is valued
at its last bid price except when, in the Adviser's opinion, the last bid
price does not accurately reflect the current value of the security.
Fixed income securities are valued by using independent pricing services
which use prices provided by market makers or estimates of market values
obtained from yield data relating to instruments or securities with similar
characteristics. When prices are not readily available from a pricing
service, or when illiquid securities are being valued, securities are valued
at fair value as determined in good faith by the Adviser, subject to review
of the Board of Trustees. Short-term investments in fixed income securities
with maturities of less than 60 days are valued by using the amortized cost
method of valuation. Purchases and sales of securities are recorded on a
trade date basis. Discounts and premiums on securities purchased are
amortized over the life of the respective securities.
INVESTMENT INCOME AND REALIZED CAPITAL GAINS AND LOSSES ON INVESTMENT
SECURITIES:
Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrual basis. Dividend and interest income are recorded net
of foreign taxes. Gains and losses on sales of investments are calculated
using the specific identification method.
INCOME TAXES:
It is the Funds' policy to distribute annually, prior to the end of the
calendar year, dividends sufficient to satisfy excise tax requirements of the
Internal Revenue Service. This Internal Revenue Service requirement may cause
an excess of distributions over the book year-end accumulated income. In
addition, it is the Funds' policy to distribute annually, after the end of
the calendar year, any remaining net investment income and net realized
capital gains .
3) INVESTMENT ADVISORY AGREEMENT:
The investment advisory agreement provides that Johnson Investment Counsel,
Inc. (the Adviser) will pay all of the Funds' operating expenses, excluding
brokerage fees and commissions, taxes, interest and extraordinary expenses.
The Growth Fund and Opportunity Fund pay the Adviser a management fee at the
annual rate of 1.00% of the Funds' average daily net assets, which is accrued
daily and paid monthly. The Fixed Income Fund pays the Adviser a management
fee at the annual rate of 0.85% of the Fund's average daily net assets, and
the Municipal Income Fund pays the Adviser a management fee at the annual
rate of 0.75% of the Fund's average daily net assets, both of which are
accrued daily and paid monthly. The Adviser has received management fees for
the period January 1 - December 31, 1996 as follows:
Growth Fund $189,616 Fixed Income Fund $134,800
Opportunity Fund $193,372 Municipal Income Fund $ 18,132
- --------------------------------------------------------------------------------
24
<PAGE> 27
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
- --------------------------------------------------------------------------------
3) INVESTMENT ADVISORY AGREEMENT (CONTINUED):
The Adviser is authorized to charge the Growth Fund and Opportunity Fund a
management fee of 1.30%, and the Fixed Income Fund a management fee of 1.15%,
of the average daily net assets of the Funds, respectively, and has waived
0.30% of these fees, INTENDING THESE FEE WAIVERS TO BE PERMANENT, although
the Adviser has the right to remove these fee waivers anytime after December
31, 1997. The Adviser is authorized to charge a management fee of 1.15% on
the Municipal Income Fund, and has waived 0.40% of these fees, INTENDING
THESE FEE WAIVERS TO BE PERMANENT, although the Adviser has the right to
remove these fee waivers anytime after December 31, 1997.
4) RELATED PARTY TRANSACTIONS:
All officers and one trustee of the Johnson Mutual Funds Trust are employees
of Johnson Investment Counsel, Inc., the Adviser. Each outside trustee has
received compensation during the 12 months ended December 31, 1996, of $3,000
for his responsibilities as trustee and has received no additional
compensation from the Trust.
The Adviser is not a registered broker-dealer of securities and thus does not
receive commissions on trades made on behalf of the Funds. The beneficial
ownership, either directly or indirectly, of more than 25% of the voting
securities of a Fund creates a presumption of control of the Fund, under
Section 2(a)(9) of the Investment Company Act of 1940. As of December 31,
1996, Johnson Investment Counsel, Inc. and entities which the Adviser could
be deemed to control or have discretion over owned in aggregate more than 25%
of the Growth Fund and the Fixed Income Fund. As of December 31, 1996, the
Adviser had discretion on over 25% of the Opportunity Fund, and Timothy E.
Johnson and Janet L. Johnson jointly owned more than 25% of the Municipal
Income Fund.
5) CAPITAL SHARE TRANSACTIONS:
As of December 31, 1996, there were an unlimited number of capital shares of
no par value authorized. Each Fund records purchases of its capital shares at
the daily net asset value next determined after receipt of a shareholder's
check or wire and application in proper form. Redemptions are recorded at the
net asset value next determined following receipt of a shareholder's written
or telephone request in proper form.
SHARE TRANSACTIONS FOR THE PERIOD JANUARY 1 - DECEMBER 31, 1996:
<TABLE>
<CAPTION>
FIXED MUNICIPAL
GROWTH OPPORTUNITY INCOME INCOME
FUND FUND FUND FUND
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Shares Sold to Investors 245,747 258,788 236,722 37,907
Shares Issued on Reinvestment Dividends 19,683 2,366 38,270 4,503
---------- ---------- ---------- ----------
Subtotal 265,430 261,154 274,992 42,410
Shares Redeemed (41,516) (67,812) (238,906) (7,242)
---------- ---------- ---------- ----------
Net Increase 223,914 193,342 36,086 35,168
SHARES OUTSTANDING:
December 31, 1995 (beginning of period) 788,539 782,098 1,008,495 145,595
DECEMBER 31, 1996 (END OF PERIOD) 1,012,453 975,440 1,044,581 180,763
</TABLE>
6) PURCHASES AND SALES OF SECURITIES:
During the 12 months ended December 31, 1996:
GROWTH FUND: Purchases of investment securities other than U.S. Government
obligations and short term investments aggregated $9,143,909 and sales of
investment securities other than U.S. Government obligations and short term
investments aggregated $5,075,966. There were no purchases or sales of U.S.
Government obligations in the Fund.
- --------------------------------------------------------------------------------
25
<PAGE> 28
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 1996
- --------------------------------------------------------------------------------
6) PURCHASES AND SALES OF SECURITIES, CONTINUED:
During the 12 months ended December 31, 1996:
OPPORTUNITY FUND: Purchases of investment securities other than U.S.
Government obligations and short term investments aggregated $12,527,795 and
sales of investment securities other than U.S. Government obligations and
short term investments aggregated $9,050,133. There were no purchases or
sales of U.S. Government obligations in the Fund.
FIXED INCOME FUND: Purchases of investment securities other than U.S.
Government obligations and short term investments aggregated $902,456 and
sales of investment securities other than U.S. Government obligations and
short term investments aggregated $944,183. Purchases of U.S. Government
obligations aggregated $2,237,776 and sales of U.S. Government obligations
aggregated $1,256,778.
MUNICIPAL INCOME FUND: Purchases of investment securities other than U.S.
Government obligations and short term investments aggregated $1,035,388 and
sales of investment securities other than U.S. Government obligations and
short term investments aggregated $150,878. There were no purchases or sales
of U.S. Government obligations in the Fund.
7) SECURITY TRANSACTIONS:
For Federal income tax purposes, the cost of investments owned on December
31, 1996 was the same as identified cost. As of December 31, 1996 the
composition of unrealized appreciation (the excess of value over tax cost)
and depreciation (the excess of tax cost over value) was as follows:
<TABLE>
<CAPTION>
NET
APPRECIATION
FUND APPRECIATION (DEPRECIATION) (DEPRECIATION)
---- ------------ ------------- -------------
<S> <C> <C> <C>
Growth $4,957,577 ($205,689) $4,751,888
Opportunity $5,219,554 ($218,247) $5,001,307
Fixed Income $ 186,442 ($135,781) $ 50,661
Municipal Income $ 52,167 ($ 2,220) $ 49,947
</TABLE>
8) FINANCIAL INSTRUMENTS DISCLOSURE:
There are no reportable financial instruments that have any off balance sheet
risk as of December 31, 1996.
- --------------------------------------------------------------------------------
26
<PAGE> 29
MCCURDY AND ASSOCIATES CPA'S, INC.
27955 CLEMENS ROAD
WESTLAKE, OHIO 44145
INDEPENDENT AUDITOR'S REPORT
----------------------------
To The Shareholders and Board of Trustees
Johnson Mutual Funds Trust
We have audited the statements of assets and liabilities including the
portfolios of investments, of the Johnson Mutual Funds Trust (comprising,
respectively, the Growth Fund, the Fixed Income Fund, the Municipal Income Fund,
and the Opportunity Fund) as of December 31, 1996, and the related statements of
operations, the statements of changes in net assets, and the financial
highlights for each of the periods indicated. These financial statements and
financial highlights are the responsibility of the Funds' 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 audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996, by correspondence with the custodian. 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
each of the respective portfolios constituting the Johnson Mutual Funds Trust as
of December 31, 1996, the results of their operations, the changes in their net
assets, and the financial highlights for the periods indicated in conformity
with generally accepted accounting principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
January 22, 1997
27
<PAGE> 30
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TRUSTEES AND OFFICERS
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Timothy E. Johnson Trustee, President
John W. Craig Trustee
Ronald H. McSwain Trustee
Kenneth S. Shull Trustee
Dale H. Coates Vice President
Richard T. Miller Vice President
Dianna J. Rosenberger CFO, Treasurer
David C. Tedford Secretary
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TRANSFER AGENT AND FUND ACCOUNTANT
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The Provident Bank
Three East Fourth Street
Cincinnati, Ohio 45202
(513) 579-2784 (800) 424-2295
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CUSTODIAN
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The Provident Bank
Three East Fourth Street
Cincinnati, Ohio 45202
(513) 579-2784 (800) 424-2295
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AUDITORS
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McCurdy & Associates CPA's, Inc.
27955 Clemens Road
Westlake, Ohio 44145
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28
<PAGE> 31
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INVESTMENT ADVISER
- --------------------------------------------------------------------------------
JOHNSON INVESTMENT COUNSEL, INC.
5556 CHEVIOT ROAD, CINCINNATI, OHIO 45247
- - Johnson Investment Counsel, Inc. is a Cincinnati-based investment advisory
firm that has been in business since 1965, managing stock, bond and
balanced portfolios for individuals, corporations, trusts, endowments,
foundations, and retirement funds. Johnson Investment Counsel, Inc. is the
Adviser to the Johnson Mutual funds Trust.
- - Johnson Investment Counsel, Inc. currently employs 38 individuals,
including a professional staff of 14, seven of whom have earned the
Chartered Financial Analyst designation (CFA), seven professionals with
graduate degrees, and a Certified Public Accountant.
- - The firm is registered with the Securities and Exchange Commission as an
independent fee-based investment adviser.
- - The Adviser adheres to the long-term quality growth approach to stock and
bond investing, to enhance portfolio returns as well as preserve capital.
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29
<PAGE> 32
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JOHNSON MUTUAL FUNDS TRUST
5556 CHEVIOT ROAD, CINCINNATI, OHIO 45247
(513) 385-4001 (800) 541-0170
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This report is authorized for distribution to prospective investors only when
accompanied or preceded by the Trust's prospectus, which illustrates each
Fund's objectives, policies, management fees, and other information
that may be helpful in making an investment decision.
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