<PAGE> 1
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SEMI-ANNUAL REPORT JUNE 30, 1999 - UNAUDITED
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JOHNSON
------------------
Mutual Funds
- Johnson Growth Fund
- Johnson Opportunity Fund
- Johnson Realty Fund
- Johnson Fixed Income Fund
- Johnson Municipal Income Fund
INVESTMENT ADVISER:
Johnson Investment Counsel, Inc.
3777 West Fork Road
Cincinnati, Ohio 45247
513-661-3100
800-541-0170
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<PAGE> 2
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JOHNSON MUTUAL FUNDS JUNE 30, 1999 - UNAUDITED
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TABLE OF CONTENTS
Our Message to You..............................................1
PERFORMANCE REVIEW AND MANAGEMENT DISCUSSION
Growth Fund.....................................................2
Opportunity Fund................................................3
Realty Fund.....................................................4
Fixed Income Fund...............................................5
Municipal Income Fund...........................................6
PORTFOLIO OF INVESTMENTS
Growth Fund...................................................7-8
Opportunity Fund.............................................9-10
Realty Fund....................................................11
Fixed Income Fund...........................................12-14
Municipal Income Fund.......................................15-16
Statement of Assets and Liabilities............................17
Statement of Operations........................................18
STATEMENT OF CHANGE IN NET ASSETS
Stock Funds....................................................19
Bond Funds.....................................................20
FINANCIAL HIGHLIGHTS
Growth Fund....................................................21
Opportunity Fund...............................................22
Realty Fund....................................................23
Fixed Income Fund..............................................24
Municipal Income Fund..........................................25
Notes to the Financial Statements...........................26-28
About the Advisor..............................................29
Trustees, Officers, Transfer Agent, Fund Accountant
Custodian, Auditors, Legal Counsel......................Back Page
<PAGE> 3
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OUR MESSAGE TO YOU
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August 25, 1999
Dear Shareholder:
After several years of great returns for the Growth and Opportunity Funds,
the first half of 1999 has been relatively flat. Market uncertainty is high
now, and the Johnson Mutual Funds' high quality style of investing is
centering on capital preservation while structuring the portfolios for
future growth.
On the next several pages, we've commented on the performance of each of
the Funds for the first half of the year. High quality growth stocks have
lagged both value and low quality stocks for most of the year. Interest
rates on intermediate term bonds have risen more than on both short and
long term bonds as inflationary concerns increased. REITs have performed
well.
With the approach of the "Y2K" issue, investor jitters may have an impact
on short term market returns, causing the remainder of 1999 to have its ups
and downs as well. Once any Y2K concerns abate, we expect the markets to
return to the core issues of earnings growth and the world's economic
health.
Thank you for your confidence in the management of your important assets.
We hope that you will call us to discuss your investments and review your
financial plan as we move into the new millenium.
Sincerely,
Timothy E. Johnson, President
Johnson Mutual Funds
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1
<PAGE> 4
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GROWTH FUND PERFORMANCE REVIEW - JUNE 30, 1999 - UNAUDITED
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[GRAPH]
<TABLE>
<CAPTION>
Growth Fund
S&P 500 Index
**
GRAPH **
REINVEST GRAPH
Date FUND S&P
- ---------------------------------------------------
<S> <C> <C>
1/4/93 $10,000.00 $10,000.00
1/31/93 $9,953.33 $10,089.39
2/26/93 $9,933.33 $10,226.29
3/31/93 $10,240.00 $10,437.80
- ---------------------------------------------------
4/30/93 $10,079.48 $10,198.51
5/28/93 $10,306.88 $10,456.80
6/30/97 $10,240.00 $10,491.16
- ---------------------------------------------------
7/31/93 $9,951.64 $10,460.08
8/31/93 $10,226.59 $10,845.44
9/30/93 $10,166.23 $10,761.99
- ---------------------------------------------------
10/29/93 $10,495.91 $10,994.37
11/30/93 $10,327.71 $10,876.15
12/31/93 $10,596.78 $11,009.82
- ---------------------------------------------------
1/31/94 $10,792.39 $11,392.55
2/28/94 $10,724.94 $11,074.84
3/31/94 $10,246.02 $10,592.42
- ---------------------------------------------------
4/30/94 $10,158.05 $10,741.71
5/31/94 $10,212.19 $10,902.32
6/30/94 $10,009.16 $10,636.90
- ---------------------------------------------------
7/30/94 $10,165.45 $10,998.18
8/31/94 $10,478.02 $11,438.29
9/30/94 $10,233.40 $11,156.85
- ---------------------------------------------------
10/31/94 $10,383.49 $11,416.61
11/30/94 $10,062.84 $10,992.56
12/30/94 $10,149.85 $11,154.61
- ---------------------------------------------------
1/29/95 $10,376.02 $11,443.76
2/28/95 $10,759.81 $11,889.96
3/31/95 $10,979.12 $12,240.94
- ---------------------------------------------------
4/28/95 $11,240.52 $12,601.44
5/31/95 $11,378.11 $13,104.91
6/30/95 $11,825.25 $13,409.33
- ---------------------------------------------------
7/31/95 $12,163.51 $13,853.97
8/31/95 $12,163.51 $13,888.89
9/29/95 $12,487.96 $14,475.07
- ---------------------------------------------------
10/31/95 $12,640.34 $14,423.36
11/30/95 $13,277.55 $15,056.57
12/29/95 $13,358.55 $15,341.63
- ---------------------------------------------------
1/31/96 $13,733.95 $15,863.24
2/29/96 $13,882.69 $16,010.20
3/29/96 $14,059.76 $16,164.34
- ---------------------------------------------------
4/30/96 $14,152.03 $16,402.63
5/31/96 $14,357.85 $16,825.71
6/28/96 $14,393.34 $16,889.84
- ---------------------------------------------------
7/31/96 $13,781.76 $16,143.61
8/30/96 $14,030.66 $16,484.11
9/30/96 $15,008.47 $17,412.50
- ---------------------------------------------------
10/31/96 $15,101.11 $17,892.75
11/29/96 $16,284.12 $19,245.18
12/31/96 $15,609.73 $18,861.69
- ---------------------------------------------------
1/31/97 $16,494.97 $20,040.10
2/28/97 $16,435.96 $20,197.15
3/31/97 $15,856.86 $19,367.36
- ---------------------------------------------------
4/30/97 $16,691.82 $20,523.57
5/30/97 $17,578.51 $21,773.23
6/30/97 $18,284.16 $22,748.77
- ---------------------------------------------------
7/31/97 $20,024.45 $24,558.80
8/29/97 $18,728.49 $23,183.16
9/30/97 $19,868.81 $24,452.76
- ---------------------------------------------------
10/31/97 $19,394.33 $23,636.90
11/28/97 $20,358.12 $24,731.09
12/31/97 $20,911.03 $25,152.93
- ---------------------------------------------------
1/30/98 $21,380.66 $25,430.84
2/27/98 $22,806.04 $27,265.13
3/31/98 $23,679.50 $28,661.24
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4/30/98 $23,844.40 $28,949.85
5/29/98 $23,085.86 $28,456.09
6/30/98 $24,380.27 $29,611.82
- ---------------------------------------------------
7/31/98 $23,885.41 $29,293.27
8/31/98 $20,371.88 $25,057.64
9/30/98 $21,938.76 $26,662.92
- ---------------------------------------------------
10/31/98 $23,597.16 $28,831.77
11/30/98 $24,867.78 $30,579.19
12/31/98 $26,995.43 $32,341.35
- ---------------------------------------------------
1/29/99 $27,709.96 $33,694.00
2/26/99 $26,350.61 $32,647.00
3/31/99 $27,213.16 $33,953.00
- ---------------------------------------------------
4/30/99 $27,143.42 $35,267.00
5/28/99 $26,446.10 $34,434.00
6/30/99 $27,690.90 $36,366.00
- ---------------------------------------------------
</TABLE>
FOR PERIODS ENDING JUNE 30, 1999:
<TABLE>
<CAPTION>
AVERAGE ANNUAL
6 MONTHS TOTAL RETURNS (b)
ENDED ----------------------------------------
6/30/99 1 YEAR 5 YEARS 6.5 YEARS (a)
------- ------ ------- -------------
<S> <C> <C> <C> <C>
Growth Fund 2.58% 13.58% 22.57% 17.00%
S&P 500 Index 12.38% 22.76% 27.87% 22.03%
</TABLE>
(a) Inception of the Growth Fund was January 4, 1993. The data represented on
this page 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.
(b) 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 include any fees. A
shareholder cannot invest directly in the Standard & Poor's 500 Index.
<TABLE>
<CAPTION>
- ----------------------------------------------
% As of
TOP TEN HOLDINGS: 6/30/99 12/31/98
- ----------------- ------- --------
<S> <C> <C>
Microsoft Corporation 3.9% 3.4%
Cisco Systems, Inc. 3.4% 3.3%
Intel Corporation 3.3% 2.4%*
General Electric Company 3.2% 3.2%
Walgreens 2.9% 2.3%*
American Express 2.8% 2.5%*
Mobil Corporation 2.8% 2.8%
Sun Microsystems 2.8% 2.5%*
Lucent Technologies, Inc. 2.6% 2.4%*
Fannie Mae 2.6% 2.7%
</TABLE>
* Not in the Top 10 as of 12/31/98.
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HOW DID THE GROWTH FUND PERFORM RELATIVE TO THE MARKET?
The rate of return on the Growth Fund for the first half of 1999 was 2.58%. For
the same six-month period, the Standard & Poor's 500 Index returned 12.38%. The
first quarter of 1999 was mostly a continuation of the trends experienced in
1998 when large capitalization growth stocks were generally the best performing
stocks and the Growth Fund had good relative returns. There was a rather abrupt
shift in that trend in the second quarter of 1999 when value stocks were the
best performers. In the second quarter, the S&P Barra Growth Index returned 3.6%
compared to 10.3% for the S&P Barra Value Index. For the full six-month period,
the S&P Barra Value Index had a modest edge over the Growth Index, 13.4%
compared to 10.6%. Since the Growth Fund emphasizes growth stocks, the Fund
tends to lag when value performs well.
The underperformance of the Growth Fund relative to the S&P related to this
value shift in the second quarter and more specifically to the relative industry
weights within the Fund. The Growth Fund had a full index weighting in the
consumer staple sector, which was the worst performing, sector with a -9.1%
return in the six month period. The Fund held a large position in healthcare
stocks, which hurt the relative performance as that sector had a price
performance of -1.2%. The fund held smaller positions in basic industry and
capital goods stocks, two sectors that were among the best in the period with
returns of 20.7% and 17.7% respectively. The one growth sector that did well in
the period was technology with a return of 24.5%. The Growth Fund was helped by
an overweight in the technology sector which was greater than the Index.
The Growth Fund continues to invest in high quality, growth stocks. High quality
stocks barely had a positive return in the first half of 1999. However, the
managers of the Growth Fund continue to focus on the longer term potential of
the portfolio holdings.
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GROWTH FUND OBJECTIVE: LONG-TERM CAPITAL GROWTH
PRIMARY ASSET CATEGORY: STOCKS OF LARGER-SIZED GROWTH COMPANIES
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2
<PAGE> 5
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OPPORTUNITY FUND PERFORMANCE REVIEW - JUNE 30, 1999 - UNAUDITED
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[GRAPH]
<TABLE>
<CAPTION>
Opportunity Fund
GRAPH
S&P MidCap OPP GRAPH
REINVEST MIDCAP
- -----------------------------------------
<S> <C> <C>
5/16/94 10,000.00 10,000.00
5/31/94 10,306.67 10,367.67
6/30/94 9,980.00 10,011.65
- -----------------------------------------
7/31/94 10,180.00 10,350.24
8/31/94 10,646.67 10,891.77
9/30/94 10,393.33 10,688.42
- -----------------------------------------
10/31/94 10,620.00 10,805.03
11/30/94 10,313.33 10,318.80
12/31/94 10,499.06 10,413.99
- -----------------------------------------
1/31/95 10,465.60 10,522.51
2/28/95 10,759.84 11,074.24
3/31/95 11,094.20 11,267.49
- -----------------------------------------
4/30/95 11,334.94 11,494.45
5/31/95 11,622.50 11,771.94
6/30/95 12,291.22 12,251.67
- -----------------------------------------
7/31/95 12,645.65 12,890.21
8/31/95 12,632.27 13,128.13
9/29/95 12,879.70 13,447.06
10/31/95 12,498.53 13,100.91
11/30/95 12,946.58 13,670.50
12/31/95 13,152.19 13,636.63
- -----------------------------------------
1/31/96 13,443.41 13,835.07
2/29/96 13,788.81 14,304.40
3/29/96 14,046.16 14,476.05
4/30/96 14,466.06 14,918.84
5/31/96 14,682.78 15,120.44
6/28/96 14,364.47 14,893.43
- -----------------------------------------
7/31/96 13,402.77 13,888.03
8/30/96 14,168.07 14,690.33
9/30/96 14,852.09 15,330.63
- -----------------------------------------
10/31/96 14,906.27 15,375.41
11/29/96 15,942.46 16,240.63
12/31/96 16,190.33 16,258.84
- -----------------------------------------
1/31/97 16,569.18 16,869.14
2/28/97 16,704.99 16,730.62
3/31/97 16,018.78 16,017.35
- -----------------------------------------
4/30/97 16,104.56 16,432.67
5/30/97 17,412.65 17,869.57
6/30/97 18,013.09 18,371.29
- ----------------------------------------
7/31/97 19,707.18 20,188.65
8/29/97 19,792.95 20,164.70
9/30/97 20,450.57 21,323.68
- -----------------------------------------
10/31/97 19,557.07 20,395.53
11/28/97 19,971.65 20,697.88
12/31/97 20,603.88 21,499.92
- -----------------------------------------
1/30/98 19,871.37 21,090.72
2/27/98 22,022.15 22,833.38
3/31/98 23,300.15 23,865.58
- -----------------------------------------
4/30/98 23,791.09 24,300.51
5/29/98 22,762.46 23,207.79
6/30/98 23,331.32 23,353.36
- -----------------------------------------
7/31/98 22,863.76 22,461.44
8/31/98 19,154.44 18,280.40
9/30/98 20,518.16 19,986.19
- -----------------------------------------
10/31/98 21,780.58 21,771.12
11/30/98 22,333.86 22,954.04
12/31/98 24,503.93 25,465.00
- -----------------------------------------
1/29/99 24,275.44 24,468.00
2/26/99 23,385.10 23,188.00
3/31/99 24,133.61 23,836.00
- -----------------------------------------
4/30/99 24,566.96 25,716.00
5/28/99 24,716.66 25,828.00
6/30/99 25,843.37 27,208.00
- -----------------------------------------
</TABLE>
FOR PERIODS ENDING JUNE 30, 1999:
<TABLE>
<CAPTION>
AVERAGE ANNUAL
6 MONTHS TOTAL RETURNS (b)
ENDED ----------------------------------
6/30/99 1 YEAR 5 YEARS 5.1 YEARS (a)
------- ------ ------- -------------
<S> <C> <C> <C> <C>
Opportunity Fund 5.47% 10.77% 20.96% 20.35%
S&P MidCap Index 6.87% 17.17% 22.28% 21.51%
</TABLE>
(a) Inception of the Opportunity Fund was May 16, 1994. The data represented on
this page 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 dime of redemption.
(b) 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 include any fees. A
shareholder cannot invest directly in the Standard & Poor's MidCap Index.
<TABLE>
<CAPTION>
- ---------------------------------------------
% AS OF
TOP TEN HOLDINGS: 6/30/99 12/31/98
- ----------------- ------- --------
<S> <C> <C>
EMC Corporation 3.3% 2.9%
BMC Software 3.2% 1.8%*
Tandy Corporation 3.2% 1.1%*
Vitesse Semiconductor 3.1% 2.5%*
Ecolab, Inc. 3.1% 2.7%
BJ's Software 2.9% 2.2%*
Gap, Inc. 2.8% 2.5%*
Lexmark Int'l Group 2.8% 2.7%
Staples, Inc. 2.6% 2.9%
Altera Corporation 2.6% 1.9%*
</TABLE>
* Not in Top 10 as of 12/31/98.
- ---------------------------------------------
HOW DID THE OPPORTUNITY FUND PERFORM RELATIVE TO THE MARKET?
The Opportunity Fund had a return of 5.47% in the first half of 1999, which
compares to a return of 6.87% for the Standard & Poor's Midcap Index. The
year-to-date underperformance of the Opportunity Fund relative to the S&P Midcap
Index occurred almost entirely in the month of April. That was a strong month in
the market and one in which midcap value stocks performed better than growth
stocks by about 3.5 percentage points. The Opportunity Fund holds primarily
growth stocks, as opposed to value, and thus was hurt by this shift.
Consumer cyclical stocks and technology stocks are the largest positions in the
Opportunity Fund portfolio, each at about 22%. These were strong groups in the
six-month period and the Opportunity Fund holdings performed better than the
consumer cyclical stocks and technology stocks in the S&P Midcap Index. On the
other hand, health care stocks represented about 12% of the portfolio.
Performance in this sector was particularly poor in the six-month period and
negatively affected the performance of the Opportunity Fund.
The second quarter of 1999 was noteworthy in that it was one of the very few
quarters over the past five years when the S&P Midcap Index experienced a higher
return than the large-cap oriented S&P 500 Index (14.2% versus 6.9%). Most
observers would agree that the valuations today are more attractive on midcap
stocks than on large-cap stocks and offer an opportunity for attractive returns
in the future. The Opportunity Fund should benefit from improved relative
performance in the midcap sector of the market going forward.
- --------------------------------------------------------------------------------
OPPORTUNITY FUND OBJECTIVE: LONG-TERM CAPITAL APPRECIATION
PRIMARY ASSET CATEGORY: STOCKS OF MEDIUM/SMALL-SIZED GROWTH COMPANIES
- --------------------------------------------------------------------------------
3
<PAGE> 6
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REALTY FUND PERFORMANCE REVIEW - JUNE 30, 1999 - UNAUDITED
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[GRAPH]
<TABLE>
<CAPTION>
GRAPH GRAPH
12/31/97 FUND NAREIT
- ----------------------------------------
<S> <C> <C>
1/1/98 10,000.00 $10,000.00
1/30/98 9,826.67 $9,947.00
2/27/98 9,553.34 $9,778.00
3/31/98 9,773.93 $9,953.00
- ----------------------------------------
4/30/99 9,423.42 $9,629.00
5/29/98 9,443.64 $9,562.00
6/30/98 9,445.62 $9,497.00
- ----------------------------------------
7/31/98 8,809.53 $8,880.00
8/31/98 7,988.76 $8,042.00
9/30/98 8,419.55 $8,498.00
- ----------------------------------------
10/31/98 8,197.07 $8,340.00
11/30/98 8,245.74 $8,463.00
12/31/98 8,143.90 $8,250.00
- ----------------------------------------
1/29/99 7,882.79 $8,077.00
2/26/99 7,826.33 $7,888.00
3/31/99 7,721.37 $7,852.00
- ----------------------------------------
4/30/99 8,487.06 $8,597.00
5/28/99 8,665.96 $8,786.00
6/30/99 8,573.65 $8,644.00
- ----------------------------------------
</TABLE>
FOR PERIODS ENDING June 30, 1999:
AVERAGE ANNUAL
6 MONTHS TOTAL RETURNS (b)
Ended ---------------------------
6/30/99 1 YEAR 1.5 YEARS (a)
------- ------ -------------
Realty Fund 5.28% -9.23% -9.81%
NAREIT Index 4.78% -8.98% -9.30%
(a) Inception of the Realty Fund was January 2, 1998. The data represented on
this page 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.
(b) The 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 include any fees. A
shareholder cannot invest directly in the NAREIT Index.
- ------------------------------------------------
% AS OF
TOP TEN HOLDINGS: 6/30/99 12/31/98
- ----------------- ------- --------
Apartment Investment Mgt. 4.8% 3.9%*
Boston Properties, Inc. 4.3% 4.3%
Simon Property Group, Inc. 4.1% 4.4%
Archstone Comm. Trust 3.9% 4.3%
Avalon Bay Comm. Inc. 3.9% 4.3%
Equity Office Property Trust 3.9% 0.0%*
First Industrial Realty 3.9% 4.6%
Essex Property Trust Inc. 3.8% 3.9%
Kimco Realty 3.8% 0.0%*
Starwood Hotels & Resorts 3.7% 0.0%*
* Not in the Top 10 as of 12/31/98.
- ------------------------------------------------
HOW DID THE REALTY FUND PERFORM RELATIVE TO THE MARKET?
The Johnson Realty Fund had a rate of return of 5.28% for the first half of
1999 compared to a return of 4.78% for the National Association of Real Estate
Investment Trusts Index (NAREIT Index). Real estate investment trust (REIT)
stocks have begun to reflect the strong property fundamentals that have existed
for the past eighteen months.
The beginning of the year was highlighted by concerns that certain property
types were being overbuilt, resulting in an imbalance of supply and demand, thus
causing downward pressures on stock prices. Retail companies, the best
performing group in 1998, experienced the greatest decline. Overbuilding
concerns abated somewhat as very little capital was made available to fund new
projects. In April, after three negative return months in January, February, and
March, the valuation of REIT stocks hit near an all-time low. The uncertainty in
the general stock market, resulting from concerns over impending interest rate
hikes, caused equity investors to purchase securities that had been out of
favor, as value became more important than growth. The best performing stocks
were those with low price to earnings ratios and low capitalizations. REITs fall
into this category. Dividend yields on REITs were above 7%, making them
attractive for income investors. Warren Buffet made personal investments in two
REIT stocks and coincided with a wave of REIT purchases by other investors. In
April alone, the NAREIT Index registered a positive return of 9.5%. This was
followed by good performance in May.
The Realty Fund utilizes a conservative, quality approach when selecting
individual securities. The combination of macroeconomic factors and in-depth
bottom up analysis is utilized in constructing the portfolio. The strategy
employed to select securities starts with targeting stocks that have
identifiable prospects for above average growth within their peer groups.
Concentration on companies with internal growth potential is very important, as
the market environment for acquisitions and development has become more
difficult to predict. Companies that control their growth through geographic
concentration, use of a strong balance sheet and solid management teams fit the
criteria for purchase.
- --------------------------------------------------------------------------------
REALTY FUND OBJECTIVE: LONG-TERM CAPITAL GROWTH AND ABOVE AVERAGE INCOME
PRIMARY ASSET CATEGORY: REAL ESTATE RELATED EQUITY SECURITIES
- --------------------------------------------------------------------------------
4
<PAGE> 7
- --------------------------------------------------------------------------------
FIXED INCOME FUND PERFORMANCE REVIEW - JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
Fixed Income Fund
Lehman Intermediate Government Corporate Index 5.00
Graph
REINVEST GRAPH
FUND INDEX
--------------------------
<S> <C> <C>
1/4/93 10,000.00 10,000.00
2/26/93 10,386.67 10,311.60
3/15/93 10,333.33 10,272.02
3/31/93 10,413.45 10,352.62
- ---------------------------------------------
4/30 10,467.30 10,435.94
5/28 10,433.30 10,412.78
6/30/93 10,694.41 10,576.22
- ---------------------------------------------
7/30 10,721.49 10,602.12
8/31 10,985.46 10,770.22
9/30/93 11,059.92 10,814.94
- ---------------------------------------------
10/29/93 11,087.29 10,843.90
11/30/93 10,923.04 10,783.41
12/31/93 10,954.49 10,832.80
- ---------------------------------------------
1/31/94 11,093.16 10,953.12
2/28/94 10,829.70 10,791.13
3/31/94 10,580.10 10,613.06
- ---------------------------------------------
4/29/94 10,425.75 10,540.83
5/31/94 10,418.73 10,547.91
6/30/94 10,404.70 10,549.35
- ---------------------------------------------
7/29/94 10,582.38 10,701.21
8/31/94 10,596.59 10,734.67
9/30/94 10,418.91 10,635.90
- ---------------------------------------------
10/31/94 10,397.30 10,634.45
11/30/94 10,339.66 10,586.19
12/31/94 10,391.95 10,623.67
- ---------------------------------------------
1/31/95 10,574.84 10,803.00
2/28/95 10,852.93 11,027.00
3/31/95 10,926.12 11,090.00
- ---------------------------------------------
4/28/95 11,074.37 11,227.00
5/31/95 11,519.12 11,566.00
6/30/95 11,585.84 11,644.00
- ---------------------------------------------
7/31/95 11,548.29 11,645.00
8/31/95 11,683.45 11,751.00
9/29/95 11,773.55 11,836.00
- ---------------------------------------------
10/31/95 11,910.54 11,968.00
11/30/95 12,093.20 12,126.00
12/29/95 12,231.14 12,253.00
- ---------------------------------------------
1/31/96 12,331.52 12,358.00
2/29/96 12,146.20 12,213.00
3/29/96 12.045.82 12,150.00
- ---------------------------------------------
4/30/96 11,959.78 12,107.00
5/31/96 11,920.67 12,098.00
6/28/96 12,061.47 12,227.00
- ---------------------------------------------
7/31/96 12,077.33 12,263.00
8/30/96 12,061.47 12,273.00
9/30/96 12,275.57 12,444.00
- ---------------------------------------------
10/31/96 12,541.04 12,664.00
11/29/96 12,758.23 12,831.00
12/31/96 12,611.58 12,749.00
- ---------------------------------------------
1/31/97 12,636.07 12,798.00
2/28/97 12,644.24 12,823.00
3/31/97 12,497.30 12,734.00
- ---------------------------------------------
4/30/97 12,662.72 12,884.00
5/30/97 12,770.24 12,991.00
6/30/97 12,902.58 13,109.00
- ---------------------------------------------
7/31/97 13,254.92 13,376.00
8/29/97 13,112.31 13,309.00
9/30/97 13,317.72 13,463.00
- ---------------------------------------------
10/31/97 13,521.96 13,613.00
11/28/97 13,538.97 13,643.00
12/31/97 13,675.89 13,752.00
- ---------------------------------------------
1/30/98 13,874.47 13,932.00
2/27/98 13,848.56 13,921.00
3/31/98 13,892.28 13,966.00
- ---------------------------------------------
4/30/98 13,944.73 14,036.00
5/29/98 14,084.62 14,139.00
6/30/98 14,189.77 14,229.00
- ---------------------------------------------
7/31/98 14,207.50 14,279.00
8/31/98 14,482.25 14,504.00
9/30/98 14,971.37 14,868.00
- ---------------------------------------------
10/31/98 14,764.81 14,853.00
11/30/98 14,818.70 14,852.00
12/31/98 14,913.16 14,912.00
- ---------------------------------------------
1/29/99 14,958.74 14,994.00
2/26/99 14,594.11 14,774.00
3/31/99 14,703.28 14,884.00
- ---------------------------------------------
4/30/99 14,694.06 14,929.00
5/28/99 14,481.90 14,815.00
6/30/99 14,441.68 14,825.00
- ---------------------------------------------
</TABLE>
FOR PERIODS ENDING JUNE 30, 1999:
AVERAGE ANNUAL
6 MONTHS TOTAL RETURNS (b)
ENDED ----------------------------------
6/30/99 1 YEAR 5 YEARS 6.5 YEARS (a)
------- ------ ------- -------------
Fixed Income Fund -3.16% 1.78% 6.78% 5.83%
Lehman Int. G/C Index -0.58% 4.19% 7.04% 6.25%
(a) Inception of the Fixed Income Fund was January 4, 1993. The data represented
on this page 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.
(b) 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 include any fees. A
shareholder cannot invest directly in the Lehman Brothers Intermediate
Government Corporate Bond Index.
[GRAPH]
QUALITY ALLOCATION
Fixed Income
AAA 39.0%
AA 6.0%
A 47.0%
BBB 8.0%
100.0%
HOW DID THE FIXED INCOME FUND PERFORM RELATIVE TO THE MARKET?
The Fixed Income Fund had a rate of return of -3.16% for the first half of 1999
and compared to a return of -0.58% for the Lehman Brothers Intermediate
Government/ Corporate Bond Index. At the end of 1998, investors were worried
about worldwide economic turmoil and expected the Federal Reserve to lower
interest rates to bolster faltering global economies. Now, the global currency
crisis seems a distant memory and global economies are experiencing recovery.
The Fed has, instead, decided to raise short-term interest rates by 0.25% as it
shifted its attention from the global crisis to the robust U.S. economy.
Inflation concerns are again at the forefront of investors' concerns as tight
labor markets are expected to propel wages higher. These shifts in the economic
environment and market sentiment have driven interest rates sharply higher
during the first half of the year. Interest rates have risen by more than 1% for
intermediate maturity Treasury bonds, causing negative total returns for most
sectors of the bond market.
This six month environment proved challenging for the Fixed Income Fund relative
to the Lehman Brothers Intermediate Government/Corporate Bond Index. The
relative performance of the Fund was negatively impacted by several factors.
First, the longer duration of the Fund relative to the Index was not helpful in
the rising interest rate environment. Next, the intermediate maturity focus of
the Fund was unfavorable as yields on intermediate maturity bonds rose more than
yields on either short or long maturity bonds which drove the prices of the
intermediate term bonds down. Finally, low quality sharply outperformed high
quality, so the Fund's high quality emphasis was a third factor hindering
performance for the period. These appear to be temporary factors driven by
short-term phenomenon and they should reverse themselves over a longer-term time
horizon.
The Fixed Income Fund continues its focus on high-quality securities. Each
security within the Fund is rated investment-grade quality by both Moody's and
Standard and Poors, with over 90% of the assets rated "A" or better as indicated
in the Quality Allocation Chart on this page. These highly rated securities are
considered to have adequate to strong protection of principal and interest
payments, and will help provide a stable portfolio valuation as economic
circumstances change in the future.
- --------------------------------------------------------------------------------
FIXED INCOME FUND OBJECTIVE: INCOME AND CAPITAL PRESERVATION
PRIMARY ASSET CATEGORY: INVESTMENT-GRADE GOVERNMENT/CORPORATE BONDS
- --------------------------------------------------------------------------------
5
<PAGE> 8
- --------------------------------------------------------------------------------
MUNICIPAL INCOME FUND PERFORMANCE REVIEW - JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
[GRAPH]
<TABLE>
<CAPTION>
$10,000 x total return for the fund Original number in the graph did not include performance for first 15 days
Municipal Income Fund Municipal Income Fund The number that Jason uses in TOTRET95 is 0.329
Lehman Five-Year G.O. MunicipaLehmanxFive-Year G.O. Municipal Index
GRAPH
GRAPH LEHMAN
FUND 5 YR GO
----------------------------
<S> <C> <C>
5/16/94 10,000.00 $10,000.00
5/31/94 10,066.67 $10,092.07
6/30/94 10,046.30 $10,069.05
- ----------------------------------------------
7/31/94 10,180.25 $10,178.98
8/31/94 10,227.45 $10,227.42
9/30/94 10,133.42 $10,150.47
- ----------------------------------------------
10/31/94 10,045.39 $10,093.44
11/30/94 9,950.38 $10,028.86
12/31/94 10,081.20 $10,117.49
- ----------------------------------------------
1/31/95 10,266.07 $10,214.37
2/28/95 10,423.49 $10,362.77
3,31/95 10,505.62 $10,527.67
- ----------------------------------------------
4/30/95 10,519.45 $10,555.84
5/31/95 10,720.02 $10,787.39
6/30/95 10,713.10 $10,796.66
- ----------------------------------------------
7/31/95 10,810.87 $10,947.47
8/31/95 10,929.60 $11,058.09
9/29/95 10,971.50 $11,091.76
- ----------------------------------------------
10/31/95 11,049.11 $11,145.35
11/30/95 11,147.89 $11,233.64
12/29/95 11,177.82 $11,295.13
- ----------------------------------------------
1/31/96 11,277.62 $11,430.14
2/29/96 11,234.85 $11,391.67
3/29/96 11,152.87 $11,331.55
- ----------------------------------------------
4/30/96 11,124.07 $11,314.71
5/31/96 11,109.67 $11,300.97
6/28/96 11,185.27 $11,380.67
- ----------------------------------------------
7/31/96 11,258.00 $11,456.00
8/30/96 11,258.00 $11,480.00
9/30/96 11,341.63 $11,567.00
- ----------------------------------------------
10/31/96 11,429.78 $11,674.00
11/29/96 11,584.04 $11,836.00
12/31/96 11,560.82 $11,819.00
- ----------------------------------------------
1/31/97 11,575.67 $11,851.00
2/28/97 11,642.50 $11,935.00
3/31/97 11,505.14 $11,800.00
- ----------------------------------------------
4/30/97 11,572.55 $11,860.00
5/30/97 11,692.39 $11,989.00
6/30/97 11,786.02 $12,094.00
- ----------------------------------------------
7/31/97 11,997.84 $12,313.00
8/29/97 11,929.76 $12,248.00
9/30/97 12,047.01 $12,359.00
- ----------------------------------------------
10/31/97 12,108.20 $12,434.00
11/28/97 12,138.80 $12,473.00
12/31/97 12,281.39 $12,586.00
- ----------------------------------------------
1/30/98 12,397.40 $12,696.00
2/27/98 12,381.93 $12,712.00
3/31/98 12,382.00 $12,733.00
- ----------------------------------------------
4/30/98 12,319.55 $12,672.00
5/29/98 12,460.07 $12,822.00
6/30/98 12,499.11 $12,862.00
- ----------------------------------------------
7/31/98 12,530.65 $12,909.00
8/31/98 12,712.03 $13,083.00
9/30/98 12,846.40 $13,216.00
- ----------------------------------------------
10/31/98 12,854.37 $13,244.00
11/30/98 12,886.22 $13,262.00
12/31/98 12,919.37 $13,322.00
- ----------------------------------------------
1/29/99 13,089.04 $13,455.00
2/26/99 13,000.16 $13,439.00
3/31/99 12,984.00 $13,458.00
- ----------------------------------------------
4/30/99 13,008.45 $13,497.00
5/28/99 12,926.95 $13,451.00
6/30/99 12,698.97 $13,302.00
- ----------------------------------------------
</TABLE>
FOR PERIODS ENDING JUNE 30, 1999:
AVERAGE ANNUAL
6 MONTHS TOTAL RETURNS (b)
ENDED -----------------------------------
6/30/99 1 YEAR 5 YEARS 5.1 YEARS (a)
------- ------ ------- -------------
Municipal Income Fund -1.71% 1.60% 4.80% 4.77%
Lehman 5 Yr. G.O. Index -0.15% 3.42% 5.73% 5.72%
(a) Inception of the Municipal Income Fund was May 16, 1994. The data
represented on this page 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.
(b) 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 include any fees. A
shareholder cannot invest directly in the Lehman Five-Year General Obligation
Municipal Index.
[GRAPH]
QUALITY ALLOCATION
Municipal Income
AAA 53.0%
AA 19.0%
A 18.0%
NR 10.0%
100.0%
HOW DID THE MUNICIPAL INCOME FUND PERFORM RELATIVE TO THE MARKET?
The Municipal Income Fund had a rate of return of -1.71 % for the first half of
1999 and compares to a return of -0.15% for the Lehman Five-Year General
Obligation Index. Even though total returns in the municipal market were
slightly negative for the first six months of 1999, municipal bonds were able to
perform better than taxable bonds during the period. The rise in interest rates
caused refunding activity to slow and supply of new issues to decrease from last
year's pace. Also, the balance sheets of many municipalities are in surplus for
the first time in years, so there is less of a need for municipal financing.
Demand has also picked up in 1999 as retail investors have been attracted by the
return of the 5% yield available on many municipal securities. This 5% level has
proven to be an important psychological level for incremental demand in the
municipal market. Therefore, the lack of municipal bond supply, coupled with
renewed demand from the retail investor have combined to produce relative good
performance by municipal bonds as compared to taxable bonds. Relative
performance of the Fund was hampered by its longer duration and its
intermediate-maturity, laddered approach.
As has been the case since its inception, the credit quality of the Municipal
Income Fund remains very high. Over 50% of the securities in the Fund are rated
"AAA", the highest rating category, with 90% of assets rated in the highest
three rating categories (AAA, AA, A). Over 98% of the income generated by the
Fund is from Ohio municipal bonds, so most of the income earned is exempt from
Ohio State Income Tax in addition to being exempt from Federal Income Taxes.
- --------------------------------------------------------------------------------
MUNICIPAL INCOME FUND OBJECTIVE: TAX-FREE INCOME AND CAPITAL PRESERVATION
PRIMARY ASSET CATEGORY: INTERMEDIATE-TERM OHIO MUNICIPAL BOND
- --------------------------------------------------------------------------------
6
<PAGE> 9
- --------------------------------------------------------------------------------
GROWTH FUND PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES DOLLAR VALUE
- ------------- ------ ------------
AEROSPACE
General Dynamics Corporation 16,000 1,096,000
-----------
TOTAL AEROSPACE - 2.0% ............... $ 1,096,000
BEVERAGE
Coca-Cola Enterprises 34,300 1,020,425
-----------
TOTAL BEVERAGE - 1.9% ................ $ 1,020,425
COMPUTER HARDWARE
Compaq Computer Corp. 25,945 614,572
Sun Microsystems Inc.* 22,040 1,518,005
-----------
TOTAL COMPUTER HARDWARE - 3.9% ....... $ 2,132,577
COMPUTER NETWORKING
Cisco Systems, Inc.* 28,800 1,857,600
-----------
TOTAL COMPUTER NETWORKING - 3.4% ..... $ 1,857,600
COMPUTER PERIPHERAL
EMC Corporation* 22,200 1,221,000
Lexmark International Group* 15,000 990,938
-----------
TOTAL COMPUTER PERIPHERAL - 4.1% ..... $ 2,211,938
COMPUTER SOFTWARE
Computer Associates Int., Inc. 21,400 1,177,000
Microsoft Corporation* 23,400 2,110,388
-----------
TOTAL COMPUTER SOFTWARE - 6.1% ....... $ 3,287,388
COMPUTER SOFTWARE - SERVICES
America Online Inc.* 4,500 497,250
-----------
TOTAL COMP. SOFTWARE - SERV. - 0.9% .. $ 497,250
ELECTRICAL EQUIPMENT
General Electric Company 15,230 1,720,990
-----------
TOTAL ELECTRICAL EQUIPMENT - 3.2% .... $ 1,720,990
ELECTRONICS - SEMI-CONDUCTORS
Intel Corporation 29,800 1,773,100
TOTAL ELECTRONICS -
-----------
SEMI-CONDUCTORS - 3.3% .......... $ 1,773,100
COMMON STOCKS SHARES DOLLAR VALUE
- ------------- ------ ------------
ENERGY SERVICES
Halliburton Company 26,000 1,176,500
-----------
TOTAL ENERGY SERVICES - 2.2% ......... $ 1,176,500
FINANCIAL - MISCELLANEOUS
American Express Company 11,700 1,522,462
Fannie Mae 20,500 1,401,688
-----------
TOTAL FINANCIAL -
MISCELLANEOUS - 5.4% ............ $ 2,924,150
FINANCIAL - REGIONAL BANKS
Bank of NY Co., Inc 30,000 1,100,625
Comerica Inc. 17,250 1,025,297
Fifth Third Bancorp 18,000 1,198,125
Firstar Corportion 39,000 1,092,000
Summit.Bancorp 24,500 1,024,406
-----------
TOTAL FINANCIAL-REG. BANKS - 10.0% ... $ 5,440,453
FOOD RETAILERS
Sysco Corporation 31,190 929,852
-----------
TOTAL FOOD RETAILERS - 1.7% .......... $ 929,852
HEALTH CARE - DIVERSE
Bristol-Myer Squibb 18,000 1,267,875
-----------
TOTAL HEALTH CARE-DIVERSE - 2.3% ..... $ 1,267,875
HEALTH CARE PRODUCTS
Johnson and Johnson 10,200 999,600
Medtronic Corporation 17,435 1,357,751
-----------
TOTAL HEALTH CARE PRODUCTS - 4.3% .... $ 2,357,351
HEALTH CARE - DRUGS
Merck and Company 15,600 1,154,400
Pfizer,.Inc 10,100 1,108,475
Schering-Plough Corporation 24,000 1,272,000
Smithkline Beecham PLC ADR 17,200 1,136,275
-----------
TOTAL HEALTH CARE - DRUGS - 8.6% $ 4,671,150
* Non income producing security.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
7
<PAGE> 10
- --------------------------------------------------------------------------------
GROWTH FUND PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES DOLLAR VALUE
- ------------- ------ ------------
HOUSEHOLD PRODUCTS
Gillette Company 20,814 853,374
Procter & Gamble Company 11,900 1,062,075
-----------
TOTAL HOUSEHOLD PRODUCTS - 3.5% ...... $ 1,915,449
INDUSTRIAL SERVICES
Cintas Corporation 20,000 1,343,750
-----------
TOTAL INDUSTRIAL SERVICES - 2.5% ..... $ 1,343,750
MANUFACTURING
Dover Corporation 24,840 869,400
-----------
TOTAL MANUFACTURING - 1.6% ........... $ 869,400
PETROLEUM
Marathon Group Inc. (USX) 35,325 1,150,270
Mobil Corporation 15,340 1,518,660
-----------
TOTAL PETROLEUM - 4.9% ............... $ 2,668,930
PHOTOGRAPHIC IMAGING
Xerox Corporation 19,000 1,122,187
-----------
TOTAL PHOTOGRAPHIC IMAGING - 2.1% .... $ 1,122,187
RETAILING
Dayton Hudson Corp. 16,000 1,040,000
Kroger Company* 48,000 1,341,000
Lowe's Company, Inc. 23,600 1,337,825
Staples Inc.* 43,207 1,336,716
Walgreen Company 54,400 1,598,000
-----------
TOTAL RETAILING - 12.3% .............. $ 6,653,541
COMMON STOCKS SHARES DOLLAR VALUE
- ------------- ------ ------------
TELECOMMUNICATION EQUIPMENT
Lucent Technology, Inc. 21,300 1,436,419
-----------
TOTAL TELECOMM EQUIPMENT - 2.6% ...... $ 1,436,419
TELECOMMUNICATION - LONG DISTANCE
AT & T Corporation 18,000 1,004,625
MCI Worldcom, Inc.* 12,800 1,104,000
-----------
TOTAL TELECOMMUNICATION -
LONG DISTANCE - 3.8% ............ $ 2,108,625
TOTAL COMMON STOCKS - 96.6% ................. $52,482,900
(Common Stock Identified Cost $34,490,843)
CASH EQUIVALENTS
Federated U.S. Treasury Cash Reserves
Money Market Fund 1,819,594
-----------
TOTAL CASH EQUIVALENTS - 3.4% $ 1,819,594
(Cash Equivalents Identified
Cost $1,819,594)
TOTAL PORTFOLIO VALUE - 100.0% .............. $54,302,494
(Total Portfolio Identified Cost $36,310,437)
Other Assets Less Liabilities ........... $ 24,475
TOTAL NET ASSETS $54,326,969
* Non income producing security.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
8
<PAGE> 11
- --------------------------------------------------------------------------------
OPPORTUNITY FUND PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES DOLLAR VALUE
- ------------- ------ ------------
AEROSPACE - DEFENSE
Newport News Shipbuilding 24,000 708,000
-----------
TOTAL AEROSPACE - DEFENSE - 1.3% ..... $ 708,000
AIRLINES
Comair Holdings, Inc. 48,900 1,017,731
-----------
TOTAL AIRLINES - 1.8% ................ $ 1,017,731
BEVERAGES
Coca-Cola Bottling Co. 12,200 683,200
-----------
TOTAL BEVERAGES - 1.2% ............... $ 683,200
BROADCASTING MEDIA
Clear Channel Communication* 11,573 797,814
-----------
TOTAL BROADCASTING MEDIA - 1.4% ...... $ 797,814
CHEMICALS
Ecolab Inc. 39,600 1,727,550
International Specialty
Products Inc.* 42,500 432,969
-----------
TOTAL CHEMICALS - 3.9% ............... $ 2,160,519
COMPUTER SOFTWARE
BMC Software, Inc.* 33,500 1,809,000
Sterling Commerce, Inc.* 27,555 1,005,757
Sungard Data Systems, Inc.* 28,000 966,000
TOTAL COMPUTER
-----------
SOFTWARE - 6.8% ................... $ 3,780,757
COMPUTER SOFTWARE SERVICES
Infoseek Corporation* 8,000 383,500
TOTAL COMPUTER
-----------
COMP. SOFTWARE SERVICES - 0.7% .... $ 383,500
COMPUTER PERIPHERAL
EMC Corporation* 33,000 1,815,000
Lexmark Int'l Group Inc.* 23,600 1,559,075
TOTAL COMPUTER
-----------
PERIPHERAL - 6.1% ................. $ 3,374,075
COMMON STOCKS SHARES DOLLAR VALUE
- ------------- ------ ------------
ELECTRONICS - SEMICONDUCTORS
Altera Corporation* 39,000 1,435,688
Teradyne, Inc.* 8,500 609,875
Vitesse Semiconductor Corp.* 26,000 1,753,375
TOTAL ELECTRONICS -
-----------
SEMICONDUCTORS - 6.8% ............... $ 3,798,938
ENERGY SERVICES
Devon Energy Corporation 24,000 858,000
Smith International, Inc.* 33,000 1,433,437
-----------
TOTAL ENERGY SERVICES - 4.1% ......... $ 2,291,437
FINANCIAL - BROKERAGE
Provident Financial Group 10,000 437,500
T. Rowe Price Associates, Inc. 23,000 882,625
-----------
TOTAL FINANCIAL - BROKERAGE - 2.4% ... $ 1,320,125
FINANCIAL - INSURANCE
AON Corporation 25,500 1,051,875
Reliastar Financial Corporation 26,700 1,168,125
-----------
TOTAL FINANCIAL - INSURANCE - 4.0% ... $ 2,220,000
FINANCIAL - REGIONAL BANKS
First Tennessee National Corp. 37,000 1,417,562
Mutual Risk Management Ltd.* 20,000 667,500
National Commerce Bancorp 30,000 656,250
North Fork Bancorp 41,000 873,813
TOTAL FINANCIAL -
-----------
REGIONAL BANKS - 6.5% ............. $ 3,615,125
FOODS
Performance Food Group* 17,500 475,781
Smucker (JM) Co., Cl. A 16,000 356,000
Tootsie Roll Industries 17,858 689,765
-----------
TOTAL FOODS - 2.7% ................... $ 1,521,546
HEALTH CARE - DRUGS
Centocor, Inc.* 21,500 1,002,438
Elan Corporation PLC, ADR* 16,000 444,000
Forest.Labs Inc. Class A* 25,200 1,165,500
Mylan Laboratories 31,700 840,050
Watson Pharmaceutical* 23,000 806,437
-----------
TOTAL HEALTH CARE - DRUGS - 7.6% ..... $ 4,258,425
* Non income producing security.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
9
<PAGE> 12
- --------------------------------------------------------------------------------
OPPORTUNITY FUND PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
COMMON STOCKS SHARES DOLLAR VALUE
- ------------- ------ ------------
HEALTH CARE - PRODUCTS
Biomet Inc. 14,000 556,500
Sybron International Corp. 42,500 1,171,406
TOTAL HEALTH CARE -
-----------
PRODUCTS - 3.1% ................... $ 1,727,906
HOUSEHOLD FURNITURE
Ethan Allen Interiors, Inc. 26,000 981,500
TOTAL HOUSEHOLD -
-----------
FURNITURE - 1.8% .................. $ 981,500
INDUSTRIAL SERVICES
Cintas Corporation 12,200 819,688
G & K Services, Inc., Class A 25,700 1,346,037
-----------
TOTAL INDUSTRIAL SERVICES - 3.9% ..... $ 2,165,725
LODGING - HOTEL
Royal Caribbean Cruise 10,000 437,500
-----------
TOTAL LODGING - HOTEL - 0.8% ......... $ 437,500
MANUFACTURE - DIVERSE
Johnson Controls, Inc. 10,000 693,125
-----------
TOTAL MANUFACTURE-DIVERSE - 1.2% $ 693,125
NATURAL GAS
National Fuel Gas Company 12,000 582,000
Peoples Energy Corporation 16,000 603,000
-----------
TOTAL NATURAL GAS - 2.1% ............. $ 1,185,000
OFFICE SUPPLIES
Office Depot, Inc.* 36,000 794,250
Staples, Inc.* 47,250 1,461,797
-----------
TOTAL OFFICE SUPPLIES - 4.0% ......... $ 2,256,047
OIL AND GAS
Weatherford International 17,000 622,625
-----------
TOTAL OIL AND GAS - 1.1% ............. $ 622,625
COMMON STOCKS SHARES DOLLAR VALUE
- ------------- ------ ------------
RETAILING
BJ's Wholesale Club Inc.* 53,000 1,593,313
Dollar General Corporation 19,750 572,750
Gap, Inc. 31,500 1,586,812
Rite.Aid.Corporation 25,000 615,625
Tandy Corporation 37,000 1,808,375
-----------
TOTAL RETAILING - 11.1% .............. $ 6,176,875
TELECOMMUNICATION SERVICES
Century.Tele Enterprises, Inc. 33,750 1,341,563
Cincinnati Bell, Inc. 50,000 1,246,875
Qwest Communications Int'l* 34,650 1,145,616
-----------
TOTAL TELECOMM SERVICES - 6.7% ....... $ 3,734,054
WASTE MANAGEMENT
Republic Service, Inc.* 32,000 792,000
-----------
TOTAL WASTE MANAGEMENT - 1.5% ........ $ 792,000
TOTAL COMMON.STOCKS - 94.6% ................. $52,703,549
(Common Stock Identified Cost $36,461,411)
CASH EQUIVALENTS
Federated U.S..Treasury Cash.Reserves
Money Market Fund 3,029,800
-----------
TOTAL CASH EQUIVALENTS - 5.4% ........ $ 3,029,800
(Cash Equivalents Identified
Cost $3,029,800)
TOTAL PORTFOLIO VALUE - 100.0% .............. $55,733,349
(Total Portfolio Identified Cost $39,491,211)
Other Assets Less Liabilities ........... $ (653,560)
TOTAL NET ASSETS ............................ $55,079,789
* Non income producing security.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
10
<PAGE> 13
- --------------------------------------------------------------------------------
REALTY FUND PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
COMMON STOCKS (REITS) SHARES DOLLAR VALUE
- --------------------- ------ ------------
APARTMENTS
Apartment Investment
and Management, Co. 6,805 290,914
Archstone Communities Trust 10,655 233,744
Avalon Bay Communities, Inc. 6,392 236,504
BRE Properties, Inc. 6,130 158,997
Camden Property Trust 5,815 161,366
Equity Residential
Properties Trust 4,975 224,186
Essex Property Trust, Inc. 6,570 232,414
Post Properties, Inc. 5,055 207,255
-----------
TOTAL APARTMENTS - 29.1% .............. $ 1,745,380
LODGING AND HOTELS
Flecor Lodging Trust 6,100 126,575
Interstate Hotels* 988 4,075
Wyndham International* 29,650 133,426
Starwood Hotels and Resorts 7,460 227,996
-----------
TOTAL LODGING AND HOTELS - 8.2% ....... $ 492,072
OFFICE AND INDUSTRIAL
Boston Properties, Inc. 7,175 257,403
Cali Realty Corporation 6,795 210,220
Crescent Real Estate 8,980 213,275
Duke Realty Investments 9,860 222,466
Equity Office Properties 9,145 234,341
First Industrial Realty Trust, I 8,680 238,158
Highwoods Properties, Inc. 8,150 223,616
Kilroy Realty Corporation 6,345 154,263
Liberty Property Trust 6,630 164,921
Prentiss Properties Trust 8,350 196,225
Prologis Trust 10,005 202,601
Spieker Properties, Inc. 5,305 206,232
-----------
TOTAL OFFICE AND INDUSTRIAL - 42.1% ... $ 2,523,721
COMMON STOCKS (REITS) SHARES DOLLAR VALUE
- --------------------- ------ ------------
RETAIL
General Growth Properties 4,635 164,542
JDN Realty Properties 6,360 142,305
Kimco Realty Corporation 5,885 230,251
Macerich Company 4,830 126,788
Regency Realty Corporation 6,940 152,246
Simon Properties Group, Inc. 9,745 247,279
Weingarten Realty Investors 2,955 123,371
-----------
TOTAL RETAIL - 19.7% ................. $ 1,186,782
TOTAL COMMON STOCKS - 99.1% ................. $ 5,947,955
(Common.Stock.Identified Cost.$6,671,003)
CASH EQUIVALENTS
Federated U.S. Treasury Cash Reserves
Money Market Fund 51,894
-----------
TOTAL CASH EQUIVALENTS - 0.9% ........ $ 51,894
(Cash Equivalents Identified
Cost $51,894)
TOTAL PORTFOLIO VALUE - 100.0% .............. $ 5,999,849
(Total Portfolio Identified Cost $6,722,897)
Other Assets Less Liabilities $ 40,298
TOTAL NET ASSETS $ 6,040,147
* Non income producing security.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
11
<PAGE> 14
- --------------------------------------------------------------------------------
FIXED INCOME FUND PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
FIXED INCOME SECURITIES - BONDS FACE DOLLAR VALUE
- ------------------------------- ---- ------------
BANK BONDS - MAJOR REGIONAL
Banc One Corp., 9.875%, 3/1/09 250,000 299,375
Comerica Bank Sub. Note,
6.875%, 3/1/08 250,000 247,188
First Union Corp., 7.5%, 7/15/06 500,000 512,500
Mellon Financial Co., 6.70%, 3/1/08 500,000 494,375
NBD Bancorp, 7.125%, 5/15/07 400,000 402,500
PNC Funding Corp., 6.875%, 7/15/07 500,000 497,500
Provident Bank, 6.375%, 1/15/04 500,000 485,625
Star Bank N.A., 6.625%, 12/15/06 400,000 389,500
Suntrust Bank Inc., 6.50%, 1/15/08 500,000 486,875
-----------
TOTAL MAJOR REGIONAL BANKS - 13.7% ......... $ 3,815,438
BANK BONDS - MONEY CENTER
Bankers Trust NY Corp.,
7.15%, 8/14/12 400,000 399,000
-----------
TOTAL MONEY CENTER BANKS - 1.4% ............ $ 399,000
CAPITAL EQUIPMENT
Dover Corp., 6.25%, 6/1/08 500,000 485,000
G.E. Corp. Medium Term Note,
6.87%, 12/29/99 250,000 252,139
Honeywell, Inc., 7.125%, 4/15/08 400,000 406,500
IBM Corp., 6.45%, 8/1/07 300,000 297,000
-----------
TOTAL CAPITAL EQUIPMENT - 5.2% ............. $ 1,440,639
CHEMICALS
Hercules, Inc., 6.625%, 6/1/03 250,000 245,000
-----------
TOTAL CHEMICALS - 0.9% ..................... $ 245,000
ELECTRIC UTILITIES
Carolina Power & Light Co.,
6.75%, 10/1/02 250,000 252,188
Duke Energy Corp., 5.375%, 1/1/09 500,000 450,000
Louisville Gas & Electric Co.,
7.50%, 7/1/02 25,000 25,187
Midwest Power Corp., 7.00%, 2/15/05 200,000 201,000
FIXED INCOME SECURITIES - BONDS FACE DOLLAR VALUE
- ------------------------------- ---- ------------
ELECTRIC UTILITIES CON'T:
Virginia Electric Company,
8.00%, 3/1/04 500,000 530,625
National Rual Utilities,
5.70%, 1/15/10 500,000 460,625
Pacific Gas & Electric Co.,
6.875%, 12/1/99 40,000 40,150
Union Electric Power Co.,
First Mortgage, 6.875%, 8/1/04 200,000 204,000
-----------
TOTAL ELECTRIC UTILITIES - 7.8% ............ $ 2,163,775
ENTERTAINMENT.AND.LEISURE
Mattel Inc., 6.125%, 7/15/05 500,000 481,875
Walt Disney Co.,
5.80%, 10/27/08 400,000 376,000
-----------
TOTAL ENTERTAINMENT AND LEISURE - 3.1% ...... $ 857,875
FINANCIAL - SERVICES
American General Finance,
8.125%, 8/15/09 120,000 128,700
CIT Group Holdings,
8.375%, 11/1/01 250,000 261,250
Household Finance Corp.
Senior Note, 6.875%, 3/1/03 700,000 704,375
-----------
TOTAL FINANCIAL - SERVICES - 3.9% .......... $ 1,094,325
FOOD AND BEVERAGE
Sara Lee Corporation, Medium Term
Note, 5.70%, 7/14/00 250,000 249,375
-----------
TOTAL FOOD AND BEVERAGE - 0.9% ............. $ 249,375
FOREIGN UTILITIES (U.S. DOLLAR DENOMINATED)
Hydro Quebec Medium Term Note,
6.98%, 3/01/05 200,000 202,750
-----------
TOTAL FOREIGN UTILITIES (US $) - 0.7% ...... $ 202,750
HEALTH CARE
McKesson Corp., 6.40%, 3/1/08 400,000 366,000
-----------
TOTAL HEALTH CARE - 1.3% ................... $ 366,000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
12
<PAGE> 15
- --------------------------------------------------------------------------------
FIXED INCOME FUND PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
FIXED INCOME SECURITIES - BONDS FACE DOLLAR VALUE
- ------------------------------- ---- ------------
NATURAL GAS UTILITIES
Enron Corp., 6.75%, 8/01/09 600,000 581,250
-----------
TOTAL NATURAL GAS UTILITIES - 2.1% ......... $ 581,250
PETROLEUM
Amoco Corp. Canada,
7.25%, 12/1/02 200,000 205,500
Texaco Capital, Inc.,
6.875%, 7/15/99 200,000 200,085
-----------
TOTAL PETROLEUM - 1.5% ..................... $ 405,585
PUBLISHING
The Tribune Company,
6.875%, 11/1/06 500,000 499,375
-----------
TOTAL PETROLEUM - 1.8% ..................... $ 499,375
RAILROADS
CSX Transportation Equipment Trust,
6.07%, 3/15/01 200,000 199,500
-----------
TOTAL RAILROADS - 0.7% ..................... $ 199,500
RETAILING
Gap Inc., 6.90%, 9/15/07 500,000 506,875
Wal-Mart Stores, Inc., 6.375%, 3/1/03 200,000 200,750
-----------
TOTAL RETAILING - 2.5% ..................... $ 707,625
REAL ESTATE INVESTMENT TRUSTS
Merry Land & Investment Co. Inc.,
7.25%, 6/15/05 400,000 396,500
-----------
TOTAL REAL ESTATE INVESTMENT TRUSTS - 1.4% . $ 396,500
SERVICES
Hertz Corp., 6.25%, 3/15/09 400,000 374,500
Service Corp. Int'l, 6.50%, 3/15/08 500,000 464,375
-----------
TOTAL SERVICES - 3.0% ...................... $ 838,875
TELECOMMUNICATIONS
AT & T Corp., 6.00%, 3/15/09 500,000 471,875
AT & T Corp., 6.75%, 4/1/04 500,000 506,250
FIXED INCOME SECURITIES - BONDS FACE DOLLAR VALUE
- ------------------------------- ---- ------------
TELECOMMUNICATIONS CON'T:
Lucent Technologies,
5.50%, 11/15/08 400,000 368,000
Cincinnati Bell, Inc.,
6.24%, 12/30/03 250,000 247,187
GTE Corp., 7.51%, 4/1/09 600,000 622,500
New York Telephone Co.,
5.875%, 9/1/03 200,000 195,000
Southwestern Bell Corp.,
6.375%,.4/1/01 200,000 200,500
-----------
TOTAL TELECOMMUNICATIONS - 9.4% ............. $ 2,611,312
UNITED STATES GOVERNMENT AGENCY OBLIGATIONS (A)
FHLB, 6.10%, 12/13/10 750,000 727,177
FHLB, 7.03%, 5/6/11 250,000 259,962
FHLMC, 6.005%, 12/8/05 200,000 196,493
FHLMC, 5.95%, 1/19/06 400,000 390,474
FNMA, 5.25%, 1/15/09 1,350,000 1,237,678
FNMA, 7.50%, 2/11/02 200,000 207,426
FNMA, 7.55%, 4/22/02 200,000 208,191
FNMA, 5.75%, 4/15/03 1,000,000 990,537
FNMA, 7.80%, 3/29/05 200,000 202,090
FNMA, 5.75%, 6/15/05 1,000,000 982,216
FNMA, 5.75%, 2/15/08 500,000 479,633
GNMA, 7.00%, 12/15/25 291,423 287,871
GNMA, 7.50%, 8/15/26 223,336 225,710
-----------
TOTAL UNITED STATES GOVERNMENT
AGENCY OBLIGATIONS - 23.0% ................ $ 6,395,458
UNITED STATES GOVERNMENT.AGENCY OBLIGATIONS -
MORTGAGE BACKED SECURITIES (A)
FHLMC, CMO Series 1639-PD,
5.60%, 8/15/06 172,320 172,191
FHLMC, CMO Series 1660-G,
6.25%, 7/15/07 250,000 249,599
FHLMC, 15 Year Gold,
7.00%, 3/01/11 223,623 224,671
FNMA Dus Pool Series 73894,
6.525%, 12/1/03 487,751 486,037
TOTAL GOVERNMENT AGENCY OBLIGATIONS -
-----------
MORTGAGE BACKED SECURITIES - 4.1% ......... $ 1,132,498
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
13
<PAGE> 16
- --------------------------------------------------------------------------------
FIXED INCOME FUND PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
FIXED INCOME SECURITIES - BONDS FACE DOLLAR VALUE
- ------------------------------- ---- ------------
UNITED STATES GOVERNMENT OBLIGATIONS
U.S. Treasury, 6.875%, 7/31/99 600,000 601,021
U.S. Treasury, 7.875%, 8/15/01 400,000 417,623
U.S. Treasury, 7.50%, 11/15/01 200,000 208,088
U.S. Treasury, 7.875%, 11/15/04 500,000 545,016
U.S. Treasury, 6.875%, 5/15/06 200,000 210,512
U.S. Treasury, 6.25%, 2/15/07 500,000 509,343
U.S. Treasury, 5.50%, 2/15/08 400,000 388,761
-----------
TOTAL UNITED STATES GOVERNMENT
OBLIGATIONS - 10.3% ...................... $ 2,880,364
TOTAL FIXED INCOME - BONDS - 98.7% .............. $27,482,519
(Fixed Income Identified Cost $27,960,976)
CASH EQUIVALENTS
Federated U.S. Treasury Cash Reserves 360,494
-----------
TOTAL CASH EQUIVALENTS - 1.3% .............. $ 360,494
(Cash Equivalents Identified Cost $360,494)
TOTAL PORTFOLIO VALUE - 100.0% .................. $27,843,013
(Total Portfolio Identified Cost $28,321,470)
Other Assets Less Liabilities ................ $ 479,472
TOTAL NET ASSETS ................................ $28,322,485
(A)
- --------------------------------------------------------------
Abbreviations:
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
GNMA - Government National Mortgage Association
- --------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
14
<PAGE> 17
- --------------------------------------------------------------------------------
MUNICIPAL INCOME FUND PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
MUNICIPAL INCOME SECURITIES - BONDS FACE DOLLAR VALUE
- ----------------------------------- ---- ------------
GENERAL OBLIGATION - CITY
Akron, OH, 5.00%, 12/1/05 100,000 102,123
Cleveland, OH, (AMBAC Insured),
4.9%, 9/1/02 50,000 50,858
Columbus, OH, Tax Increment Financing,
(AMBAC Insured), 4.9%, 12/1/11 150,000 146,399
Columbus, OH, 12.375%, 2/15/07 25,000 37,040
Loveland, OH,
(AMBAC Insured), 4.9%, 12/1/08 100,000 99,945
Vandalia, OH, 4.80%, 12/1/03 75,000 76,122
Warder Library, OH, 6.25%, 12/1/03 135,000 144,499
Westlake, OH, 4.90%, 12/1/04 50,000 51,150
Youngstown,OH, (AMBAC
Insured), 5.10%, 12/01/11 100,000 100,235
-----------
TOTAL GENERAL OBLIGATION - CITY - 19.0% ... $ 808,371
GENERAL OBLIGATION - COUNTY
Belmont County, OH
(MBIA Insured), 4.50%, 12/1/11 155,000 146,875
Belmont County, OH
(MBIA Insured), 5.10%, 12/1/05 50,000 51,336
Delaware County, OH, 5.25%, 12/1/06 50,000 51,669
Hocking County, OH, 4.90%, 12/1/06 50,000 49,204
Knox County, OH, 4.75%, 12/1/09 60,000 58,432
Medina County, OH, 12.625%, 12/1/99 25,000 25,926
Montgomery County, OH,
5.30%, 12/1/00 75,000 76,602
Portage County, Ohio,
(MBIA Insured), 5.15%, 12/1/07 75,000 76,753
Trumbull County, OH,
(AMBAC Insured), 5.25%, 12/1/05 50,000 51,748
Washington Township, OH,
4.65%, 12/1/05 75,000 73,520
-----------
TOTAL GENERAL OBLIGATION - COUNTY - 15.6% . $ 662,065
HIGHER EDUCATION
Ohio State Higher Education Facilities,
Denison University, 4.90%, 11/1/05 75,000 75,673
University of Cincinnati, OH General
Receipts, 4.75%, 6/1/06 50,000 49,935
-----------
TOTAL HIGHER EDUCATION - 3.0% ............. $ 125,608
MUNICIPAL INCOME SECURITIES - BONDS FACE DOLLAR VALUE
- ----------------------------------- ---- ------------
HOSPITAL/HEALTH
Children's Hospital Medical Center,
(MBIA Insured), 5.25%, 5/15/10 100,000 101,274
Episcopal Retirement Homes,
Ohio Hospital Facility Revenue,
5.00%, 1/1/15 100,000 100,789
Franklin County, Ohio Hospital,
The Children's Hospital Project,
5.20%, 11/1/04 50,000 51,170
Hamilton County, Ohio Hospital Facility
Revenue, Children's Hospital,
(FGIC Insured), 5.00%, 5/15/06 50,000 50,659
Hamilton County, Ohio,
Twin Towers Health
Care Facility, 5.25%, 10/1/09 100,000 99,241
Lorain County, Ohio Hospital Facility
Revenue Catholic Healthcare Partners,
(MBIA Insured), 6.00%, 9/1/07 50,000 53,768
Maumee, Ohio Hospital Facility
Revenue, St. Lukes Hospital Project,
(AMBAC Insured), 4.90%, 12/1/99 50,000 50,321
-----------
TOTAL HOSPITAL/HEALTH - 11.9% ........... $ 507,222
REVENUE BONDS - TRANSPORTATION
Butler County Transportation Improvement,
(FSA Insured) 5.50%, 4/1/09 100,000 103,216
TOTAL REVENUE BONDS -
-----------
TRANSPORTATION - 2.4% ................... $ 103,216
REVENUE BONDS - ELECTRIC
Weatherford, Texas Utility System Revenue,
(MBIA Insured), 5.10%, 9/1/03 50,000 51,269
-----------
TOTAL REVENUE BONDS - ELECTRIC - 1.2% ... $ 51,269
REVENUE BONDS - WATER AND SEWER
Akron, OH Sewer System,
(MBIA Insured), 5.50% 12/1/07 50,000 52,297
Butler, OH Waterworks System,
(FSA Insured), 4.40% 12/1/10 100,000 94,205
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
15
<PAGE> 18
- --------------------------------------------------------------------------------
MUNICIPAL INCOME FUND PORTFOLIO OF INVESTMENTS AS OF JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
MUNICIPAL INCOME SECURITIES - BONDS FACE DOLLAR VALUE
- ----------------------------------- ---- ------------
REVENUE BONDS - WATER AND SEWER CON'T:
Cleveland, OH Waterworks First
Mortgage, Series G
(MBIA Insured), 5.25%, 1/1/04 50,000 51,589
Cleveland, OH Waterworks Revenue,
Series I (FSA Insured), 5.25%,1/1/10 100,000 101,650
Columbus, OH Water and Sewer,
5.00%, 11/01/06 100,000 101,957
Lorain, OH Water System,
(AMBAC Insured), 4.75%, 4/1/04 50,000 50,611
Miamisburg, OH Sewer System,
(AMBAC Insured), 4.35%, 11/15/02 50,000 50,060
Montgomery County, OH Solid Waste,
(MBIA Insured), 5.125%, 11/1/08 50,000 50,627
Southwest OH Regional Water District Water-
works, (MBIA Insured), 5.25%, 12/1/05 50,000 51,720
Warren County, Ohio Water and Sewer
Line Extension, Special
Assessment Bonds, 5.50%, 12/1/03 50,000 52,196
TOTAL REVENUE BONDS -
-----------
WATER AND SEWER - 15.4% ................ $ 656,912
SCHOOL DISTRICT
Centerburg, OH, 5.25%, 10/15/01 40,000 40,630
Forest Hills, OH, 4.90%, 12/1/04 100,000 101,578
Gallia County, OH, 5.00%, 3/1/03 25,000 25,131
Gallia County, OH, 5.00%, 3/1/04 25,000 25,080
Indian Valley, OH,
(AMBAC Insured), 5.50%, 12/1/06 50,000 52,443
Northwestern, OH, 4.65%, 12/1/06 105,000 101,729
Loveland OH School G.O.,
4.40%, 12/1/08 100,000 95,848
Southwestern City, OH, 6.25%, 12/1/05 50,000 53,441
Stow, OH, 9.125%, 12/1/99 50,000 51,117
Sycamore Ohio Community School District
(AMBAC Insured), 4.6%, 12/1/11 100,000 94,875
West Geauga, OH, (AMBAC Insured),
5.45%, 11/1/04 50,000 52,207
Westlake, OH, 4.85%, 12/1/03 100,000 101,694
-----------
TOTAL SCHOOL DISTRICT - 18.7% ............... $ 795,773
MUNICIPAL INCOME SECURITIES - BONDS FACE DOLLAR VALUE
- ----------------------------------- ---- ------------
STATE AGENCY - BUILDING AUTHORITY
Ohio State Building Authority,
Administration Building Fund,
6.40%, 10/1/01 50,000 52,375
Ohio State Building Authority,
Juvenile Correction Facilities,
4.375%, 10/1/12 100,000 91,954
Ohio State Building Authority,
Ohio Center For The Arts,
5.45%, 10/1/07 100,000 104,177
TOTAL STATE AGENCY -
-----------
BUILDING AUTHORITY - 5.8% ................. $ 248,506
STATE AGENCY - EDUCATION
Ohio State Elementary
and Secondary Education,
(FSA Insured), 5.0%, 12/1/07 100,000 101,309
Ohio State Higher Education
Facilities, 5.90%, 12/1/05 50,000 52,345
Ohio State Public Facilities Commission,
(MBIA Insured), 4.70%, 06/1/11 100,000 96,334
-----------
TOTAL STATE AGENCY - EDUCATION - 5.9% ..... $ 249,988
TOTAL FIXED INCOME -
MUNICIPAL BONDS - 98.9% ...................... $ 4,208,930
(Municipal Bonds Identified Cost $4,229,250)
CASH EQUIVALENTS
Federated Ohio Municipal Cash Trust 47,560
-----------
TOTAL CASH EQUIVALENTS - 1.1% .............. $ 47,560
(Cash Identified Cost $47,560)
TOTAL PORTFOLIO VALUE - 100.0% $ 4,256,490
(Total Portfolio Identified Cost $4,276,810)
Other Assets Less Liabilities $ 31,480
TOTAL NET ASSETS $ 4,287,970
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
16
<PAGE> 19
- --------------------------------------------------------------------------------
JOHNSON MUTUAL FUNDS JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
STOCK FUNDS BOND FUNDS
----------------------------------------------- -------------------------------
FIXED MUNICIPAL
GROWTH OPPORTUNITY REALTY INCOME INCOME
FUND FUND FUND FUND FUND
--------------------- -------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment Securities
at Market Value* $54,302,494 $55,733,349 $5,999,849 $27,843,013 $4,256,490
Dividends and Interest
Receivable $65,751 $48,765 $45,068 $498,774 $33,811
-------------- -------------- --------------- -------------- ---------------
TOTAL ASSETS ................. $54,368,245 $55,782,114 $6,044,917 $ 28,341,787 $4,290,301
LIABILITIES:
Investment Securities Purchased $0 $660,768 $0 $0 $0
Accrued Management Fees $41,276 $41,557 $4,770 $19,302 $2,331
-------------- -------------- --------------- -------------- ---------------
TOTAL LIABILITIES ............ $41,276 $702,325 $4,770 $19,302 $2,331
NET ASSETS .......................... $54,326,969 $55,079,789 $6,040,147 $28,322,485 $4,287,970
NET ASSETS CONSIST OF:
Paid in Capital $35,926,522 $36,108,220 $7,000,431 $28,736,117 $4,301,660
Undistributed Net
Investment Income/Return of Capital $122 ($1,604) $19,805 $21,044 $3,377
Undistributed Net Realized Gain
(Loss) from Security Transactions $408,268 $2,731,035 ($257,041) $43,782 $3,254
Net Unrealized Gain (Loss)
on Investments $17,992,057 $16,242,138 ($723,048) ($478,458) ($20,321)
-------------- -------------- --------------- -------------- ---------------
NET ASSETS .......................... $54,326,969 $55,079,789 $6,040,147 $28,322,485 $4,287,970
Shares Outstanding .................. 1,710,681 1,679,214 509,868 1,832,395 277,878
OFFERING, REDEMPTION AND
NET ASSET VALUE PER SHARE ........... $31.76 $32.80 $11.85 $15.46 $15.43
*Identified Cost of Securities ...... $36,310,437 $39,491,211 $6,722,897 $28,321,470 $4,276,810
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
17
<PAGE> 20
- --------------------------------------------------------------------------------
JOHNSON MUTUAL FUNDS JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
STOCK FUNDS BOND FUNDS
--------------------------------------------------- ------------------------------
FIXED MUNICIPAL
GROWTH OPPORTUNITY REALTY INCOME INCOME
FUND FUND FUND FUND FUND
--------------- ------------- ------------- ------------- ------------
6/30/99 6/30/99 6/30/99 6/30/99 6/30/99
--------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $54,636 $62,796 $4,177 $788,769 $97,419
Dividends $215,256 $170,583 $179,122 $0 $0
--------------- ------------- ------------- ------------- ------------
TOTAL INVESTMENT INCOME .... $269,892 $233,379 $183,299 $788,769 $97,419
EXPENSES:
Gross Management Fee $252,511 $247,351 $27,185 $128,185 $21,163
Management Fee Waiver
(See accompanying note #3) ($12,626) ($12,368) ($1,359) ($19,228) ($7,407)
--------------- ------------- ------------- ------------- ------------
TOTAL EXPENSES ............. $239,885 $234,983 $25,826 $108,957 $13,756
NET INVESTMENT INCOME $30,007 ($1,604) $157,473 $679,812 $83,663
REALIZED AND UNREALIZED GAINS (LOSSES):
Net Realized Gain (Loss) from
Security Transactions $408,273 $2,731,029 ($157,253) $43,793 $3,253
Net Unrealized Gain (Loss)
on Investments $907,504 $135,955 $298,235 ($1,553,243) ($164,996)
--------------- ------------- ------------- ------------- ------------
NET GAIN (LOSS) ON INVESTMENTS . $1,315,777 $2,866,984 $140,982 ($1,509,450) ($161,743)
NET INCREASE (DECREASE) IN ASSETS
FROM OPERATIONS ............. $1,345,784 $2,865,380 $298,455 ($829,638) ($78,080)
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
18
<PAGE> 21
- --------------------------------------------------------------------------------
JOHNSON MUTUAL FUNDS JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
STOCK FUNDS
--------------------------------------------------------------------------------------------
GROWTH FUND OPPORTUNITY FUND REALTY FUND
------------------------------ ------------------------------ ----------------------------
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
6/30/99 12/31/98 6/30/99 12/31/98 6/30/99 12/31/98
-------------- ------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income $30,007 $72,796 ($1,604) ($24,884) $157,473 * $214,770
Net Realized Gain (Loss)
from Security Transactions $408,273 $2,512,476 $2,731,029 $512,708 ($157,253) ($99,788)
Net Unrealized Gain (Loss)
on Investments $907,504 $7,713,290 $135,955 $6,762,552 $298,235 ($1,021,284)
-------------- ------------- --------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN
ASSETS FROM OPERATIONS ..... $1,345,784 $10,298,562 $2,865,380 $7,250,376 $298,455 ($906,302)
DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income ($30,020) ($72,905) $0 $0 ($137,672) ($214,765)
Net Realized Gain from
Security Transactions $0 ($2,512,484) $0 ($512,704) $0 $0
Net Return of Capital $0 $0 $0 $0 $0 ($51,078)
-------------- ------------- --------------- ------------- ------------- -------------
NET (DECREASE) IN ASSETS
FROM DISTRIBUTIONS ......... ($30,020) ($2,585,389) $0 ($512,704) ($137,672) ($265,843)
CAPITAL SHARE TRANSACTIONS:
Proceeds From Sale of Shares $7,172,572 $10,741,691 $6,045,271 $8,705,583 $969,360 $6,402,027
Net Asset Value of Shares Issued
on Reinvestment of Distributions $22,673 $2,320,223 $0 $499,470 $26,799 $92,315
Cost of Shares Redeemed ($2,571,861) ($4,288,044) ($2,043,518) ($2,786,372) ($174,296) ($264,696)
-------------- ------------- --------------- ------------- ------------- -------------
NET INCREASE IN ASSETS FROM
CAPITAL SHARE TRANSACTIONS $4,623,384 $8,773,870 $4,001,753 $6,418,681 $821,863 $6,229,646
NET CHANGE IN NET ASSETS $5,939,148 $16,487,043 $6,867,133 $13,156,353 $982,646 $5,057,501
NET ASSETS AT BEGINNING OF PERIOD . $48,387,821 $31,900,778 $48,212,656 $35,056,303 $5,057,501 $0
NET ASSETS AT END OF PERIOD ....... $54,326,969 $48,387,821 $55,079,789 $48,212,656 $6,040,147 $5,057,501
</TABLE>
* Net Investment Income on the Realty Fund includes Estimated Return of Capital
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
19
<PAGE> 22
- --------------------------------------------------------------------------------
JOHNSON MUTUAL FUNDS JUNE 30, 1999 - UNAUDITED
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BOND FUNDS
---------------------------------------------------------------
FIXED INCOME FUND MUNICIPAL INCOME FUND
----------------------------- -----------------------------
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
6/30/99 12/31/98 6/30/99 12/31/98
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net Investment Income $679,812 $1,117,134 $83,663 $152,992
Net Realized Gain (Loss)
from Security Transactions $43,793 $56,950 $3,253 $15,965
Net Unrealized Gain (Loss)
on Investments ($1,553,243) $608,285 ($164,996) $22,910
------------- -------------- ------------- --------------
NET INCREASE (DECREASE) IN
ASSETS FROM OPERATIONS ........ ($829,638) $1,782,369 ($78,080) $191,867
DISTRIBUTIONS TO SHAREHOLDERS:
Net Investment Income ($658,780) ($1,117,058) ($80,294) ($152,953)
Net Realized Gain from
Security Transactions $0 ($39,907) $0 ($15,964)
------------- -------------- ------------- --------------
NET (DECREASE) IN ASSETS
FROM DISTRIBUTIONS ............ ($658,780) ($1,156,965) ($80,294) ($168,917)
CAPITAL SHARE TRANSACTIONS:
Proceeds From Sale of Shares $6,951,756 $8,764,787 $1,037,926 $2,219,947
Net Asset Value of Shares Issued on
Reinvestment of Dividends/Gains $386,628 $739,042 $18,927 $52,780
Cost of Shares Redeemed ($1,518,387) ($5,013,211) ($540,383) ($2,272,306)
------------- -------------- ------------- --------------
NET INCREASE IN ASSETS FROM
CAPITAL SHARE TRANSACTIONS .... $5,819,997 $4,490,618 $516,470 $421
NET CHANGE IN NET ASSETS ............... $4,331,579 $5,116,022 $358,096 $23,371
NET ASSETS AT BEGINNING OF PERIOD ...... $23,990,906 $18,874,884 $3,929,874 $3,906,503
NET ASSETS AT END OF PERIOD ............ $28,322,485 $23,990,906 $4,287,970 $3,929,874
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
20
<PAGE> 23
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS GROWTH FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD FOR THE GROWTH FUND:
<TABLE>
<CAPTION>
UNAUDITED
1/1/99 TO YEAR ENDED DECEMBER 31
-----------------------------------------------------------------
6/30/99 1998 1997 1996 1995 1994 1993
---------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period .......... $30.98 $25.38 $21.16 $18.86 $14.82 $15.71 $15.00
OPERATIONS:
Net Investment Income $ 0.02 $ 0.05 $ 0.16 $ 0.19 $ 0.24 $ 0.24 $ 0.18
Net Gains (Losses) on Securities
(Realized & Unrealized) $ 0.78 $ 7.32 $ 7.01 $ 2.98 $ 4.41 ($0.89) $ 0.71
------ ------ ------ ------ ------ ------ ------
TOTAL OPERATIONS ................. $ 0.80 $ 7.37 $ 7.17 $ 3.17 $ 4.65 ($0.65) $ 0.89
DISTRIBUTIONS:
Dividends from Net
Investment Income ($0.02) ($0.05) ($0.16) ($0.19) ($0.24) ($0.24) ($0.18)
Distributions from Net
Realized Capital Gains $ 0.00 ($1.72) ($2.79) ($0.68) ($0.37) $ 0.00 $ 0.00
------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS .............. ($0.02) ($1.77) ($2.95) ($0.87) ($0.61) ($0.24) ($0.18)
Net Asset Value
End of Period ................ $31.76 $30.98 $25.38 $21.16 $18.86 $14.82 $15.71
TOTAL RETURN ..................... 2.58% 29.10% 33.96% 16.85% 31.61% (4.22%) 5.93%
Net Assets, End of Period
(Millions) ................... $54.33 $48.39 $31.90 $21.42 $14.87 $ 9.30 $ 6.58
RATIOS AFTER FEE WAIVERS: (1)
Ratio of Expenses to
Average Net Assets ........ 0.95% 0.95% 0.97% 1.00% 1.00% 1.00% 1.00%
Ratio of Net Income to
Average Net Assets (2) .... 0.12% 0.19% 0.65% 0.99% 1.42% 1.65% 1.38%
Portfolio Turnover Rate .......... 19.07% 39.71% 54.44% 26.78% 52.91% 30.38% 23.57%
</TABLE>
- --------------------------------------------------------------------------------
(1) The Adviser amended the management agreement on 11/18/98 to reduce the
maximum management fee on the Growth Fund from 1.30% to 1.00%. The Adviser
further waived the maximum management fee to sustain a fee of 0.95% The Adviser
intends this fee waiver to be permanent, although the Adviser retains the right
to remove the waiver after April 30, 2002. As of 6/30/99, assuming no waiver of
management fee expenses, the Growth Fund ratios would have been: Expenses to
Average Net Assets: 1.00%; and Net Income to Average Net Assets: 0.07%
(2) Ratios annualized in 1999.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
21
<PAGE> 24
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS OPPORTUNITY FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD FOR THE OPPORTUNITY
FUND:
<TABLE>
<CAPTION>
UNAUDITED
1/1/99 TO YEAR ENDED DECEMBER 31
-----------------------------------------------------
6/30/99 1998 1997 1996 1995 12/31/94
-------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period ........... $31.10 $26.44 $22.65 $19.42 $15.70 $15.00
OPERATIONS:
Net Investment Income $ 0.00 ($0.02) $ 0.03 $ 0.06 $ 0.08 $ 0.05
Net Gains (Losses) on Securities
(Realized & Unrealized) $ 1.70 $ 5.02 $ 6.13 $ 4.43 $ 3.89 $ 0.70
------ ------ ------ ------ ------ ------
TOTAL OPERATIONS .................. $ 1.70 $ 5.00 $ 6.16 $ 4.49 $ 3.97 $ 0.75
DISTRIBUTIONS:
Dividends from Net
Investment Income $ 0.00 $ 0.00 ($0.03) ($0.06) ($0.08) ($0.05)
Distributions from Net
Realized Capital Gains $ 0.00 ($0.34) ($2.34) ($1.20) ($0.17) $ 0.00
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ............... $ 0.00 ($0.34) ($2.37) ($1.26) ($0.25) ($0.05)
Net Asset Value
End of Period ................. $32.80 $31.10 $26.44 $22.65 $19.42 $15.70
TOTAL RETURN ...................... 5.47% 18.93% 27.26% 23.10% 25.27% 4.99%
Net Assets, End of Period
(Millions) .................... $55.08 $48.21 $35.06 $22.09 $15.19 $ 6.29
RATIOS AFTER FEE WAIVERS: (1)
Ratio of Expenses to
Average Net Assets (2) ..... 0.95% 0.95% 0.97% 1.00% 1.00% 1.00%
Ratio of Net Income to
Average Net Assets (2) ..... -0.01% -0.06% 0.11% 0.28% 0.59% 1.01%
Portfolio Turnover Rate ........... 22.90% 41.46% 55.05% 46.43% 62.15% 58.73%
</TABLE>
- --------------------------------------------------------------------------------
(1) The Adviser amended the management agreement on 11/18/98 to reduce the
maximum management fee on the Opportunity Fund from 1.30% to 1.00%. The Adviser
further waived the maximum management fee to sustain a fee of 0.95%. The Adviser
intends this fee waiver to be permanent, although the Adviser retains the right
to remove the waiver after April 30, 2002. As of 6/30/99, assuming no waiver of
management fee expenses, the Opportunity Fund ratios would have been: Expenses
to Average Net Assets: 1.00%: and Net Income to Average Net Assets: -0.06%
(2) Ratios have annualized in 1994 and 1999.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
22
<PAGE> 25
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS REALTY FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD FOR THE REALTY FUND:
<TABLE>
<CAPTION>
UNAUDITED YEAR ENDED
1/1/99 TO DECEMBER 31,
6/30/99 1998
------------ ---------
<S> <C> <C>
Net Asset Value Beginning of Period ........................ $11.54 $15.00
OPERATIONS:
Net Investment Income $ 0.24 $ 0.61
Net Return of Capital $ 0.04 $ 0.12
Net Gains (Losses) on Securities (Realized and Unrealized) $ 0.27 ($3.46)
------ ------
TOTAL OPERATIONS ............................................. $ 0.55 ($2.73)
DISTRIBUTIONS:
Dividends from Net Investment Income ($0.24) ($0.61)
Distributions from Return of Capital $ 0.00 ($0.12)
Distributions from Net realized Capital Gains $ 0.00 $ 0.00
------ ------
TOTAL DISTRIBUTIONS .......................................... ($0.24) ($0.73)
Net Asset Value at End of Period ........................... $11.85 $11.54
TOTAL RETURN ................................................. 5.28% -18.56%
Net Assets End of Period (Millions) ........................ $ 6.04 $ 5.06
RATIOS AFTER FEE WAIVERS: (1)
Ratio of Expenses to
Average Net Assets ........................................ 0.95% 0.48%
Ratio of Net Income to
Average Net Assets (2) .................................... 5.76% 5.17%
Portfolio Turnover Rate ...................................... 7.44% 12.07%
</TABLE>
(1) The Adviser amended the management agreement on 11/18/98 to reduce the
maximum management fee on the Realty Fund from 1.30% to 1.00%. The Adviser
further waived the management fee in entirety for the period 1/1/98 -
6/30/98/. The Adviser waived the maximum management fee to sustain a fee of
0.95% for the period 7/1/98 - 12/31/98. The Adviser intends the final fee waiver
to be permanent, although the Adviser retains the right to remove the waiver
after April 30, 2002. As of 6/30/99, assuming no waiver of management fee
expenses, the Realty Fund ratios would have been: Expenses to Average Net
Assets: 1.00%; and Net Income to Average Net Assets: 5.71%
(2) Ratios Annualized in 1999.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
23
<PAGE> 26
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS FIXED INCOME FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD FOR THE FIXED INCOME
FUND:
<TABLE>
<CAPTION>
UNAUDITED
1/1/99 TO YEAR ENDED DECEMBER 31
----------------------------------------------------------------------
6/30/99 1998 1997 1996 1995 1994 1993
-------- ------- ------- ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period ............ $16.36 $15.84 $15.45 $15.84 $14.20 $15.80 $15.00
OPERATIONS:
Net Investment Income $ 0.39 $ 0.86 $ 0.88 $ 0.86 $ 0.83 $ 0.80 $ 0.60
Net Gains (Losses) on Securities
(Realized & Unrealized) ($0.91) $ 0.55 $ 0.39 ($0.39) $ 1.64 ($1.60) $ 0.83
------ ------ ------ ------ ------ ------ ------
TOTAL OPERATIONS ................ ($0.52) $ 1.41 $ 1.27 $ 0.47 $ 2.47 ($0.80) $ 1.43
DISTRIBUTIONS:
Dividends from Net
Investment Income ($0.38) ($0.86) ($0.88) ($0.86) ($0.83) ($0.80) ($0.60)
Distributions from Net
Realized Capital Gains $ 0.00 ($0.03) $ 0.00 $ 0.00 $ 0.00 $ 0.00 ($0.03)
------ ------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ............. ($0.38) ($0.89) ($0.88) ($0.86) ($0.83) ($0.80) ($0.63)
Net Asset Value
End of Period .................. $15.46 $16.36 $15.84 $15.45 $15.84 $14.20 $15.80
TOTAL RETURN .................... -3.16% 9.05% 8.44% 3.11% 17.70% -5.14% 9.51%
Net Assets, End of Period
(Millions) ..................... $28.32 $23.99 $18.87 $16.14 $15.97 $12.46 $10.08
RATIOS AFTER FEE WAIVERS: (1)
Ratio of Expenses to
Average Net Assets ........... 0.85% 0.85% 0.85% 0.85% 0.85% 0.85% 0.85%
Ratio of Net Income to
Average Net Assets (2) ....... 5.25% 5.40% 5.67% 5.56% 5.54% 5.53% 5.08%
Portfolio Turnover Rate ......... 7.71% 24.89% 29.33% 14.04% 4.95% 0.04% 10.14%
</TABLE>
- --------------------------------------------------------------------------------
(1) The Adviser amended the management agreement on 11/18/98 to reduce the
maximum management fee on the Fixed Income Fund from 1.15% to 1.00%. The Adviser
further waived the maximum management fee to sustain a fee of 0.85% for 1998.
The Adviser intends this fee waiver to be permanent, although the Adviser
retains the right to remove the waiver after April 30, 2002. As of 6/30/99,
assuming no waiver of management fee expenses, the Fixed Income Fund ratios
would have been: Expenses to Average Net Assets: 1.00% and Net Income to Average
Net Assets: 5.20%.
(2) Ratios Annualized in 1999.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
24
<PAGE> 27
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD FOR THE MUNICIPAL
INCOME FUND:
<TABLE>
<CAPTION>
UNAUDITED
1/1/99 TO YEAR 5/16/94-
-----------------------------
6/30/99 1998 1997 1996 1995 12/31/94
------- ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value
Beginning of Period ........... $15.99 $15.88 $15.57 $15.68 $14.73 $15.00
OPERATIONS:
Net Investment Income $ 0.29 $ 0.64 $ 0.64 $ 0.63 $ 0.63 $ 0.39
Net Gains (Losses) on Securities
(Realized & Unrealized) ($0.57) $ 0.18 $ 0.32 ($0.11) $ 0.96 ($0.27)
------ ------ ------ ------ ------ ------
TOTAL OPERATIONS ................. ($0.28) $ 0.82 $ 0.96 $ 0.52 $ 1.59 $ 0.12
DISTRIBUTIONS:
Dividends from Net
Investment Income ($0.28) ($0.64) ($0.64) ($0.63) ($0.63) ($0.39)
Distributions from Net
Realized Capital Gains $ 0.00 ($0.07) ($0.01) $ 0.00 ($0.01) $ 0.00
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS .............. ($0.28) ($0.71) ($0.65) ($0.63) ($0.64) ($0.39)
Net Asset Value
End of Period ................. $15.43 $15.99 $15.88 $15.57 $15.68 $14.73
TOTAL RETURN ..................... -1.71% 5.19% 6.23% 3.43% 10.88% 0.81%
Net Assets, End of Period
(Millions) $ 4.29 $ 3.93 $ 3.90 $ 2.81 $ 2.28 $ 1.49
RATIOS AFTER FEE WAIVERS: (1)
Ratio of Expenses to
Average Net Assets (2) ...... 0.65% 0.65% 0.63% 0.75% 0.68% 0.01%
Ratio of Net Income to
Average Net Assets (2) ...... 3.93% 4.01% 4.19% 4.18% 4.28% 5.46%
Portfolio Turnover Rate .......... 5.83% 20.70% 9.95% 6.25% 7.81% 0.00%
</TABLE>
- --------------------------------------------------------------------------------
(1) The Adviser amended the management agreement on 11/18/98 to reduce the
maximum management fee on the Municipal Income Fund from 1.15% to 1.00%. The
Adviser further waived the maximum management fee to sustain a fee of 0.65%. The
Adviser intends this fee waiver to be permanent, although the Adviser retains
the right to remove the waiver after April 30, 2002. As of 6/30/99, assuming no
waiver of management fee expenses, the Municipal Income Fund ratios would have
been: Expenses to Average Net Assets: 1.00% and Net Income to Average Net
Assets: 3.88%.
(2) Ratios were annualized in 1994 and the ratio of Net Income to Average Net
Assets was annualized in 1999.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
25
<PAGE> 28
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1) ORGANIZATION:
The Growth Fund, Fixed Income Fund, Opportunity Fund, Municipal Income Fund, and
the Realty 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. The Realty Fund began offering its shares publicly on
January 2, 1998.
The investment objective of the Growth Fund is long term capital growth. The
investment objective of the Opportunity Fund is long term capital growth. The
investment objective of the Fixed Income Fund is a high level of income over the
long term consistent with preservation of capital. The investment objective of
the Municipal Income Fund is a high level of federally tax-free income over the
long term consistent with preservation of capital. The investment objective of
the Realty Fund is above average income and long term capital growth. The Realty
Fund invest primarily in real estate related equity securities.
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 to comply
with the special provisions of the Internal Revenue Code available to registered
investment companies. Accordingly, no tax provision is required.
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, Opportunity Fund and Realty Fund paid the Adviser a management fee at the
annual rate of 0.95% of the Funds' average daily net assets, which was accrued
daily and paid monthly. The Fixed Income Fund paid 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 paid the Adviser a management fee at the annual rate of
0.65% of the Fund's average daily net assets, both of which are accrued daily
and paid monthly.
- --------------------------------------------------------------------------------
26
<PAGE> 29
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3) INVESTMENT ADVISORY AGREEMENT (CONTINUED):
The Adviser has received management fees for the period January 1 - June 30,
1999 as follows:
Growth Fund $239,885 Opportunity Fund $234,983
Realty Fund $ 25,826 Fixed Income Fund $108,957
Municipal Income Fund $ 13,756
The Adviser waived the management fees on each of the funds from the maximum of
1.00% to the following:
Fee Ratio Waiver
--------- ------
Growth Fund 0.95% 0.05%
Opportunity Fund 0.95% 0.05%
Realty Fund 0.95% 0.05%
Fixed Income Fund 0.85% 0.15%
Municipal Income Fund 0.65% 0.35%
The Adviser intends the fee waivers to be permanent, although the Adviser has
the right to remove these fee waivers any time after April 30, 2002.
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 of the three outside
Trustees received compensation during the six months ending June 30, 1999 of
$2,000 for his responsibilities as trustee and has received no additional
compensation from the Trust. Total Compensation for the Trustees, as a group was
$6,000 for the period and as a group they 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 June 30, 1999, 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, Opportunity Fund, Realty Fund, Fixed Income Fund, and the Municipal Income
Fund.
Johnson Financial, Inc. is a wholly owned subsidiary of Johnson Investment
Counsel, Inc., the Adviser. Johnson Financial, Inc. provides transfer agency,
fund accounting, and administration services to the Funds. These services are
paid for by the Adviser.
5) PURCHASES AND SALES OF SECURITIES:
During the 6 months ended June 30, 1999, purchases and sales of investment
securities aggregated:
<TABLE>
<CAPTION>
Investment Securities Other
Than Short Term Investments and
U.S. Government Obligations U.S. Government Obligations
FUND PURCHASES SALES PURCHASES SALES
--------- ----- --------- -----
<S> <C> <C> <C> <C>
Growth Fund $13,989,161 $ 9,787,356 $ 0 $ 0
Opportunity Fund $14,527,384 $11,469,335 $ 0 $ 0
Realty Fund $ 1,388,374 $ 407,852 $ 0 $ 0
Fixed Income Fund $ 7,461,473 $ 1,869,313 $ 448,518 $ 101,760
Municipal Income Fund $ 809,589 $ 245,673 $ 0 $ 0
</TABLE>
- --------------------------------------------------------------------------------
27
<PAGE> 30
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
6) CAPITAL SHARE TRANSACTIONS:
As of June 30, 1999, 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 - JUNE 30, 1999:
<TABLE>
<CAPTION>
GROWTH OPPORTUNITY REALTY FIXED MUNICIPAL
FUND FUND FUND INCOME FUND INCOME FUND
---- ---- ---- ----------- -----------
<S> <C> <C> <C> <C> <C>
Shares Sold to Investors 231,403 195,011 84,131 435,301 64,878
Shares Issued on Reinvestment Dividends 719 0 2,400 24,740 1,209
---------- ---------- ---------- ---------- ----------
Subtotal 232,122 195,011 86,531 460,041 66,087
Shares Redeemed (83,337) (65,910) (14,959) (94,527) (34,033)
---------- ---------- ---------- ---------- ----------
Net Increase/Decrease During Period 148,785 129,101 71,572 365,514 32,054
SHARES OUTSTANDING:
December 31, 1998 (Beginning of Period) 1,561,896 1,550,113 438,296 1,466,881 245,824
JUNE 30, 1999 (END OF PERIOD) 1,710,681 1,679,214 509,868 1,832,395 277,878
</TABLE>
7) SECURITY TRANSACTIONS:
For Federal income tax purposes, the cost of investments owned on June 30, 1999
was the same as identified cost. As of June 30, 1999 the composition of
unrealized appreciation (the excess of value over tax cost) and depreciation
(the excess of tax cost over value) was as follows:
NET
APPRECIATION
FUND APPRECIATION (DEPRECIATION) (DEPRECIATION)
---- ------------ -------------- --------------
Growth Fund $ 18,944,046 ($ 951,989) $ 17,992,057
Opportunity Fund $ 17,573,486 ($ 1,331,348) $ 16,242,138
Realty Fund $ 111,334 ($ 834,382) ($ 723,048)
Fixed Income Fund $ 179,715 ($ 658,173) ($ 478,458)
Municipal Income Fund $ 44,630 ($ 64,951) ($ 20,321)
8) ESTIMATES:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
9) FINANCIAL INSTRUMENTS DISCLOSURE:
There are no reportable financial instruments that have any off balance sheet
risk as of June 30, 1999.
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28
<PAGE> 31
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ABOUT THE ADVISOR
- --------------------------------------------------------------------------------
- - JOHNSON INVESTMENT COUNSEL, INC. is a Cincinnati-based investment advisory
firm, located at 3777 West Fork Road, Cincinnati, Ohio, that has been in
business since 1965. Johnson Investment Counsel is the Investment Adviser for
all of the Johnson Mutual Funds.
- - Johnson Investment Counsel, Inc. manages stock, bond and balanced portfolios
for individuals, corporations, trusts, endowments, foundations, and retirement
funds and currently has over $2.4 billion under management.
- - Johnson Investment Counsel, Inc. currently employs fifty-one individuals,
including a professional staff of twenty-two, eleven of whom have earned the
Chartered Financial Analyst designation, fourteen professionals with graduate
degrees, and a Certified Public Accountant.
- - The Adviser 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.
- - For more a brochure on Johnson Investment Counsel, Inc., please contact the
Adviser at 513-661-3100.
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29
<PAGE> 32
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TRUSTEES AND OFFICERS
Timothy E. Johnson Trustee, President
John W. Craig Independent Trustee
Ronald H. McSwain Independent Trustee
Kenneth S. Shull Independent Trustee
Dale H. Coates Vice President
Richard T. Miller Vice President
Dianna J. Rosenberger CFO, Treasurer
David C. Tedford Secretary
TRANSFER AGENT AND FUND ACCOUNTANT
Johnson Financial, Inc.
3777 West Fork Road
Cincinnati, Ohio 45247
(513) 661-3100 (800) 541-0170
CUSTODIAN
The Provident Bank
Three East Fourth Street
Cincinnati, Ohio 45202
AUDITORS
McCurdy & Associates CPA's, Inc.
27955 Clemens Road
Westlake, Ohio 44145
LEGAL COUNSEL
Brown, Cummins & Brown Co., L.P.A.
3500 Carew Tower
Cincinnati, Ohio 45202
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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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