<PAGE>
[LOGO OF MARQUIS FUNDS APPEARS HERE]
[ARTWORK APPEARS HERE]
A N N U A L
R E P O R T
S E P T E M B E R
T H I R T I E T H
1 9 9 5
<PAGE>
TABLE OF CONTENTS
- ---------------------------------------------
<TABLE>
<S> <C>
Letter to Shareholders...................................................... 2
Shareholder Investment Summary.............................................. 3
Management's Discussion & Analysis of Fund Performance...................... 8
Statements of Net Assets.................................................... 16
Statement of Operations..................................................... 29
Statement of Changes in Net Assets.......................................... 30
Financial Highlights........................................................ 32
Notes to Financial Statements............................................... 33
Report of Independent Public Accountants.................................... 38
Notice to Shareholders...................................................... 39
</TABLE>
1
<PAGE>
Dear Shareholder:
In its second year of operation, the Marquis Funds in many ways replicated the
success of its first year. Assets under management grew some 57%, from $700
million to $1.1 billion. Standard & Poor's continued to recognize our quality
focus with a AAAm rating for the Marquis Treasury Securities Money Market Fund,
their highest quality rating for this type of money market fund. The letter that
follows from John Portwood, CFA and Chief Trust Investment Officer of First
National Bank of Commerce, the Marquis Funds Investment Adviser, reviews these
events in detail, as well as the past year's financial markets and economic
factors.
The year ended with significant gains in both the stock and bond markets, gains
that we don't foresee being repeated in the coming year. In this climate, the
elements of the Marquis Investment Philosophy -- high quality standards,
discipline and fundamental values -- become even more valuable to the prudent
investor. By staying the course no matter what the economic climate, we have
every expectation of generating the best results for our shareholders.
Investors who "stuck to their guns" during the lean times of 1994 were rewarded
for their commitment in 1995. Whatever the economic weather in the coming year,
we pledge to stick to our guns -- the weapons of quality, discipline and
value --in the coming year and the foreseeable future. We have every expectation
of reporting back to you again next year with another "success story."
As always, we thank you for your continued confidence in the Marquis Funds
family.
Sincerely,
/s/ Clifton J. Saik
Clifton J. Saik
Executive Vice President
First National Bank of Commerce
2
<PAGE>
SHAREHOLDER INVESTMENT SUMMARY
MUTUAL FUND ANNUAL REPORT
-------------------------
Dear Shareholder:
The close of our second successful year of operation on September 30, 1995
saw your Marquis Funds growing some 57% over last year; our assets under
management have now reached $1.1 Billion. Overall, the year saw some growth in
the economy and extraordinary results for financial markets. As a result,
Marquis Funds shareholders who patiently watched and waited during a trying 1994
found their patience rewarded during 1995.
1995 MARKET PERSPECTIVES
In many ways the past twelve months were a mirror image of the previous
year. In 1994, bond prices fell as interest rates rose and fears of accelerating
inflation mounted. The yield on the long-term U.S. Treasury Bond rose from about
6% on September 30, 1993 to 7.8% on September 30, 1994. This trend was reversed
in November 1994 with the yield on the long-term U.S. Treasury bond falling from
a peak near 8.2% to 6.5% on September 30, 1995 not far from the 1994 low. The
effect on bond prices was quite positive as the "disastrous" price decline of
1994 turned into the "awesome" rally of 1995 (see graph A). The total return of
the Lehman Intermediate Government Bond Index, for example, was +10.6% for the
twelve month period ended in 1995 compared to -1.5% for the same 1994 period. To
provide some perspective on the
[GRAPH APPEARS HERE]
A line graph depicting the change in price of Merrill Lynch Long-Term Government
Index and U.S. Treasury Bond Index from October 1, 1993 through September 30,
1995.
power of this bond rally, one analyst noted that the period between November
1994 and June 1995 witnessed the biggest rise in bond prices in seven and one
half years. In one five day period, the price of the thirty-year U.S. Treasury
Bond rose more than 5 points or $50 per $1000 bond. That was the equivalent of a
200 point rise in the Dow Jones Industrial Average.
3
<PAGE>
[GRAPH APPEARS HERE]
A line graph depicting the total growth of the S&P 500 Composite Stock Index
from September 30, 1994 through September 30, 1995.
Common stocks experienced a similar turnaround. The return during the 1994
period was slightly positive for the Standard & Poor's 500 Stock Index with
dividends added, but many individual stocks and economic sectors did not fare as
well. On balance, 1994 was a difficult period for common stock investors. That
was not the case in the year just ended. Common stock prices rose broadly across
all sectors between September 30, 1994 and September 30, 1995. The Standard &
Poor's 500 Stock Index recorded a total return of +29.7% during this period.
Most of this gain was produced during the six months period between December
1994 and June 1995 when the market enjoyed an uninterrupted advance leading to a
total return of +20.5% (see graph B). Researchers claim that returns of this
magnitude during the first half of a year have occurred only six times since
1925. The September 1995 twelve month total return of +29.7%, while not so rare,
is certainly well above average.
Where do we go from here? These returns from stocks and bonds are quite
high relative to historic norms. A repetition in the coming year is not very
likely. We would urge investors to remain focused on long-term results and
remind themselves that stocks and bonds do not always deliver smooth, steady and
positive returns from one year to the next.
THE MARQUIS FUNDS INVESTMENT PHILOSOPHY
High quality standards are an integral part of our investment approach. We
do not believe that it is necessary to speculate in low quality securities to be
able to produce good returns. To us, the most desirable investment program is
one that utilizes high quality securities within a disciplined management
process. Our quality standards are evident in the security holdings of all of
the Marquis Funds. An example of our focus on quality is the fact that Standard
& Poor's has rated the Marquis Treasury Securities Money Market Fund AAAm, their
highest quality rating for this type of money market fund, due to the Fund's
"conservative investment policies, exceptional management, and strong quality
controls."
Discipline is an important key to long-term investment success. It means
sticking to your investment approach for the long haul, provided that your
approach recog-
4
<PAGE>
nizes real fundamental values that will ultimately be reflected in satisfactory
investment returns. Value to us means determining the relative attractiveness of
individual securities and asset classes using analytical methods that are
unemotional and fundamentally driven. We continually analyze results to confirm
or challenge the value added by our process. Occasionally, enhancements have
been warranted but over time the core decision making process has remained
intact. No significant changes are anticipated. We believe our approach will
remain valuable and effective for the foreseeable future.
With a high-quality, value-conscious and disciplined investment approach,
it naturally follows that control of risk is an integral part of our process as
well. Some investors and fund managers focus on returns while neglecting risk.
We believe that risk and return are equally important considerations. As a
shareholder in the Marquis Funds, you can expect us to maintain our quality
controls and investment disciplines. We will not reach for yield or attempt to
enhance return by using securities or methods that are not compatible with the
stated objectives of each fund. Our primary goal is to provide a way for
investors to participate in the financial markets according to their particular
needs. We do so by offering a diversified family of mutual funds that are truly
representative of the expected risk and return characteristics of each asset
class or investment category.
ECONOMIC AND INVESTMENT REVIEW
Mixed signals have been the norm during most of the economic recovery since
the recession of 1990-1991. The pattern is continuing this year. Manufacturing
seems to be picking up after earlier weakness and housing starts are rising
again. At the same time consume spending is deteriorating. Economic growth
projections adjusted for inflation cluster in the 2.5% to 3.0% range, roughly
equivalent to the average annualized growth rate in Real Gross Domestic Product
(GDP) since the recession trough in March 1991. This rate of advance is slower
than that of the last three expansions at the four year mark, and is below the
average of all previous recoveries since World War II. Fortunately, corporate
profit margins have been good and earnings better than expected due to a
substantial improvement in productivity. Much of this gain, however, comes from
cost cutting not new business expansion. The muddled, tenuous nature of the
economy over the last seventeen recovery quarters confused the forecasters whose
outlook often shifted from boom to bust and back to boom again in reaction to
the latest economic statistics. Now, the notion of an extended period of slow
growth with moderate inflation is becoming the consensus. The risk in this
outlook is on the downside. If consumer spending slows further, the already weak
pricing power at the retail level will disappear completely and a recession will
arrive sooner than expected. Current forecasts place the onset of the next
recession sometime between now and 1998.
5
<PAGE>
Low growth plus low inflation equals low interest rates. Market
participants are now beginning to accept this thesis. The yield on the 30 year
U.S. Treasury Bond declined to 6.5% at the end of September compared to 7.8% a
year earlier. The ten year U.S. Treasury Bond yield was 6.2% versus 7.6% at the
end of September 1994. Even at these levels, the real or inflation adjusted
yield is historically attractive. Commodity prices have changed little this
year, the wholesale and consumer price indices are not accelerating and slow
consumer spending means weak pricing power at retail outlets (see graph C).
Economists are anticipating new lows in interest rates during the next
recession. The major reasons for an extended period of low inflation and low
interest rates include the trend toward a reduction in government spending, the
aging of the population (more savers and fewer spenders) and still relatively
high individual debt loads.
[GRAPH APPEARS HERE]
A line graph depicting the decline of the Consumer Price Index and the Producer
Price Index from September 30, 1990 through August 31, 1995.
As far as the broad stock market is concerned, most of the traditional
signposts warning of overvaluation have been passed. Following earlier periods
of overvaluation, the stock market entered a time of lower performance
punctuated by the occasional sharp decline. Market analysts call this "reversion
to the mean" which describes the process by which the market returns to more
normal valuation levels in keeping with the economy's long-term growth
potential. Valuation statistics are more useful as indicators of risk and long-
term return potential rather than market timing indicators, but since valuation
extremes of one kind or another have existed for several years with no serious
market setback, their relevance in the current environment is being discounted
by investors. It is true that the valuation negatives are offset to a degree by
positive factors such as low interest rates, low inflation and moderate
price/earnings multiples. Expensive markets, however, are vulnerable to
unexpected events. There is little room for disappointment. Consequently, we
recommend that risk averse investors adopt a balanced portfolio structure with
funds allocated among stocks and bonds in accordance with their particular goals
and investment time horizon.
6
<PAGE>
For additional investment information, please review the portfolio manager's
comments concerning each of the Marquis Funds during the past year.
THE MARQUIS GROWTH AND INCOME FUND BECOMES
THE MARQUIS BALANCED FUND
Today, a fund labeled "growth and income" is expected to focus more on
higher-dividend-yielding stocks than on a balanced stock-bond portfolio.
Therefore, effective January 29, 1996, we are changing this fund's name to
Marquis Balanced Fund because its focus is on balance between capital
-------
appreciation on the one hand, and current income through regular payments of
principal and interest on the other. Please note that the philosophy and
operating principles of the fund will not change.
---
Under normal conditions, the fund will invest between 30% and 75% of total
assets in common stocks and between 25% and 70% of its total assets in fixed
income securities.
Sincerely,
/s/ John C. Portwood
John C. Portwood, CFA
Chief Trust Investment Officer
First National Bank of Commerce
7
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS
OF FUND PERFORMANCE
GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
The Government Securities Fund (the "Fund") seeks to provide current income
consistent with relative stability of capital. It will attempt to achieve this
objective by investing primarily in obligations issued or guaranteed as to
principal and interest by the U.S. Government and its agencies or
instrumentalities. The Fund's duration and maturity are adjusted to take
advantage of interest rate changes and provide a level of current income
consistent with relative stability of capital.
For the twelve months ended September 30, 1995, the Fund generated a total
return of 10.84% for Class A shares and 10.10% for Class B shares. This was
quite strong relative to average historical returns of the investment grade
fixed income market. This compares favorably to a 10.6% return for the Lehman
Brothers Intermediate Government Bond Index and 8.2% return for the Lehman
Brothers 1-3 Year Government Bond Index. During the year, the Fund's total
assets increased 27.3%, growing to $124 million. The increase in asset size was
primarily due to shareholder purchases and the return enjoyed by the
shareholders on the assets of the Fund.
Over the past twelve months the bond market has experienced a reversal relative
to the interest rate environment of the twelve month period ended September
1994. This was quite favorable for a fund investing in high quality fixed
income securities. For the first three months of the Fund's fiscal year,
interest rates on high quality short-term securities continued on an upward
path, with U.S. Treasury Bill yields increasing from 5.4% to 6.5%, and the two
year Treasury Note increasing from 6.6% to 7.7%. This upward movement in
interest rates was concentrated in the shorter maturity sector resulting in a
flattening of the U.S. Treasury yield curve.
Beginning in 1995, the U.S. bond market experienced a dramatic decline in
interest rates across the entire yield curve, from three months to thirty
years. The majority of the decline in yields took place over the first six
months of 1995, with the yield on U.S. Treasury Bills declining almost 100
basis points, from 6.5% to 5.5%, while the yield on the 30 year U.S. Treasury
Bond declined from 7.9% to 6.6%, a 130 basis point decline.
The decline in interest rates may primarily be attributed to a change in
investor psychology, from one of expecting considerable economic growth and
inflation to the realization of a slowing economy and a low to moderate
inflationary outlook. As interest rates decline, the sectors of the fixed
income market which provide some of the best risk-adjusted returns are those
with the characteristics of longer duration and positive convexity. Non-
callable U.S. Treasury and Agency securities, those sectors of which the Fund
has the greatest level of concentration, exhibit these desirable
characteristics. The mortgage backed security sector of the fixed income
markets also produced a healthy return of 13.5%, as measured by the Lehman
Brothers Mortgage Index, over the previous twelve months. With interest rates
maintaining their current levels or continuing to decline, we expect
refinancing in the mortgage sector to accelerate. When this occurs the impact
of the callability of mortgages, as reflected in their negative convexity,
should adversely impact the return of the mortgage backed sector of the bond
market.
An average position of 4.3% in short-term securities has been maintained in the
Fund throughout the year to provide liquidity for shareholder transactions and
as a source of funds for the purchase of longer-term securities. Furthermore,
the Fund's weighted average maturity has ranged from 4.9 to 6.2 years, and its
duration has averaged 3.9 years.
8
<PAGE>
__________________________ INVESTMENT GROWTH ANALYSIS __________________________
[MAC GRAPH APPEARS HERE]
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Marquis Government
Securities Fund, Class A from October 31, 1993 through September 30, 1995 as
compared with the growth of $10,000 investment in the Lehman Brothers
Intermediate Government Bond Index.
<TABLE>
<CAPTION>
Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in the Invested in the Invested in the
Government Securities Government Securities Lehman Brothers
Fund, Class A Fund, Class A Intermediate Government
(without load) (with load) Bond Index
<S> <C> <C> <C>
10/31/93 10,000 9,650 10,000
9,998 9,648 9,992
9,810 9,467 9,807
9,749 9,408 9,752
9/94 9,814 9,471 9,826
9,807 9,464 9,817
10,239 9,881 10,226
10,708 10,333 10,704
9/95 10,879 10,499 10,870
</TABLE>
[MAC GRAPH APPEARS HERE]
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Marquis Government
Securities Fund, Class B from October 31, 1993 through September 30, 1995 as
compared with the growth of $10,000 investment in the Lehman Brothers
Intermediate Government Bond Index.
<TABLE>
<CAPTION>
Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in the Invested in the Invested in the
Government Securities Government Securities Lehman Brothers
Fund, Class B Fund, Class B Intermediate Government
(without load) (with load) Bond Index
<S> <C> <C> <C>
10/31/93 10,000 10,000 10,000
9,982 9,982 9,992
9,775 9,775 9,807
9,698 9,698 9,752
9/94 9,755 9,755 9,826
9,731 9,731 9,817
10,139 10,139 10,226
10,582 10,582 10,704
9/95 10,740 10,468 10,870
</TABLE>
<TABLE>
<CAPTION>
Average Annual One Year
Total Return Return
<S> <C> <C>
Government Securities Fund, Class A (without load) 4.42% 10.84%
Government Securities Fund, Class A (with load) 2.58% 6.98%
Government Securities Fund, Class B (without load) 3.63% 10.10%
Government Securities Fund, Class B (with load) 2.27% 7.35%
</TABLE>
Past performance of the Fund is not predictive of future performance, Class A
shares were offered beginning October 1, 1993. Class B shares were offered
beginning October 22, 1993. Performance of the Class A shares reflects the
maximum front end sales charge of 3.50%. Performance of the Class B shares
reflects the maximum contingent deferred sales charge of 2.75% for the two year
holding period. The performance of the Lehman Brothers Intermediate Government
Bond Index does not include annual operating expenses which are experienced by
the Fund.
9
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS
OF FUND PERFORMANCE
LOUISIANA TAX-FREE INCOME FUND
- --------------------------------------------------------------------------------
The Louisiana Tax-Free Income Fund (the "Fund") seeks to provide a level of
tax-exempt current income consistent with relative stability of capital. It
will attempt to achieve this objective by investing primarily in securities
which are exempt from federal and state income tax. The Fund's duration and
maturity are adjusted to take advantage of interest rate changes and to
maximize current income within the constraints of high quality and relative
capital stability.
The Fund's net assets increased from $7.5 million to $12.3 million over the
fiscal year. For the twelve months ended September 30, 1995, the Fund generated
a total return of 9.01% for Class A shares and 8.21% for Class B shares. This
compares to a 7.9% return for the Lipper Intermediate Municipal Debt Funds
Average and a 11.19% return for the Lehman Brothers Municipal Bond Index.
Interest rates decreased across the yield curve over the past twelve months
which resulted in an increase in the market value of fixed income securities.
This decline in yields was not smooth. It occurred with substantial volatility
due to the municipal bond market's changing interpretation of the various flat
tax proposals and the impact they would have on the exemption of municipal bond
income. Throughout the year, we have averaged a 7.3% position in short-term
securities and maintained a weighted average maturity of 9.5 years.
We increased the Fund's position in credit enhanced issues due to our concern
regarding the State's fiscal condition. Effective July 17, 1995, Standard &
Poor's credit rating service downgraded the State of Louisiana's General
Obligation debt to A-. The rating agency has been concerned with the State's
ability to handle its financial shortfall, especially that portion relative to
medical services and the reduction in the disproportionate share income from
the Federal Government.
As the economy slows and inflation remains at an acceptable level, we
anticipate a further decline in yields. The impact of the proposed Federal Tax
legislation could lead to greater volatility in municipal bond yields;
therefore, we will be closely following developments in Washington.
The Fund's holdings, consisting of investment grade municipal bonds and tax-
free cash equivalents, have a weighted average maturity of 9.6 years, an
average duration of 7.2 years, and an average quality rating of AAA.
The accompanying chart compares the Fund with the Lipper Intermediate Municipal
Debt Funds Average and the Lehman Brothers Municipal Bond Index. The Lipper
Intermediate Municipal Debt Funds Average measures the performance of the
largest funds that invest in municipal debt issues with weighted average
maturities similar in style to the Fund. This Average emphasizes those funds
which invest in municipal debt issues with dollar weighted average maturities
of 5 to 10 years.
10
<PAGE>
__________________________ INVESTMENT GROWTH ANALYSIS __________________________
[MAC GRAPH APPEARS HERE]
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Marquis Louisiana
Tax-Free Income Fund, Class A from October 31, 1993 through September 30,1995 as
compared with the growth of $10,000 investment in the Lehman Brothers Municipal
Bond Index and the Lipper Intermediate Municipal Debt Funds Average.
<TABLE>
<CAPTION>
Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in the Invested in the Growth of $10,000 Invested in the
Louisiana Tax-Free Louisiana Tax-Free Invested in the Lipper Intermediate
Income Fund, Class A Income Fund, Class A Lehman Brothers Municipal Debt
(without load) (with load) Municipal Bond Index Funds Average
<S> <C> <C> <C> <C>
10/31/93 10,000 9,650 10,000 10,000
10,111 9,757 10,121 10,102
9,564 9,229 9,565 9,709
9,663 9,325 9,672 9,798
9/94 9,719 9,379 9,737 9,856
9,553 9,219 9,597 9,744
10,138 9,783 10,276 10,225
10,316 9,955 10,523 10,395
9/95 10,569 10,225 10,826 10,630
</TABLE>
[MAC GRAPH APPEARS HERE]
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Marquis Louisiana
Tax-Free Income Fund, Class B from November 30, 1993 through September 30, 1995
as compared with the growth of $10,000 investment in the Lehman Brothers
Municipal Bond Index and the Lipper Intermediate Municipal Debt Funds Average.
<TABLE>
<CAPTION>
Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in the Invested in the Growth of $10,000 Invested in the
Louisiana Tax-Free Louisiana Tax-Free Invested in the Lipper Intermediate
Income Fund, Class B Income Fund, Class B Lehman Brothers Municipal Debt
(without load) (with load) Municipal Bond Index Funds Average
<S> <C> <C> <C> <C>
10/31/93 10,000 10,000 10,000 10,000
10,201 10,201 10,211 10,164
9,642 9,642 9,650 9,769
9,714 9,714 9,758 9,858
9/94 9,753 9,753 9,824 9,917
9,569 9,569 9,682 9,804
10,136 10,136 10,367 10,288
10,295 10,295 10,617 10,459
9/95 10,554 10,282 10,923 10,695
</TABLE>
<TABLE>
<CAPTION>
Average Annual One Year
Total Return Return
<S> <C> <C>
Louisiana Tax-Free Income Fund, Class A(without load) 3.01% 9.01%
Louisiana Tax-Free Income Fund, Class A(with load) 1.20% 5.20%
Louisiana Tax-Free Income Fund, Class B(without load) 3.10% 8.21%
Louisiana Tax-Free Income Fund, Class B(with load) 1.66% 5.46%
</TABLE>
Past performance of the Fund is not predictive of future performance. Class A
shares were offered beginning October 1, 1993. Class B shares were offered
beginning November 22, 1993. Performance of the Class A shares reflects the
maximum front end sales charge of 3.50%. Performance of the Class B shares
reflects the maximum contingent deferred sales charge of 2.75% for the two year
holding period. The performance of the Lehman Brothers Municipal Bond Index and
Lipper Intermediate Municipal Debt Funds Average does not include annual
operating expenses which are experienced by the Fund.
11
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS
OF FUND PERFORMANCE
GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
The Growth and Income Fund (the "Fund") seeks to provide capital appreciation
and current income through the regular payment of dividends and interest. It
pursues this goal by investing in a balanced portfolio of high quality stocks
and bonds. For the twelve months ended September 30, 1995, the Fund generated a
total return of 17.58% for Class A shares and 16.75% for Class B shares. Over
this same period, the Lipper Balanced Funds Average had a total return of
18.1%, the S&P 500 Composite Index had a total return of 29.73% and the Lehman
Brothers Intermediate Government Bond Index had a total return of 10.62%.
The Fund is a balanced portfolio of stocks and bonds with between 30% and 80%
invested in high quality, large capitalization stocks and between 25% and 60%
invested in intermediate-term government and investment grade corporate bonds.
The portfolio manager determines asset allocation between stocks and bonds on
the basis of the relative risk and expected return of the two asset classes.
About halfway through the fiscal year (in March of 1995), the portfolio manager
raised the equity allocation of the Fund from 40% to 50% and lowered the fixed
income component from 55% to 45%; the 5% balance of the Fund remained in cash.
This proved to be a timely move: stocks outperformed bonds and cash over the
succeeding period.
The equity component of the Fund invests in large capitalization companies
(over $500 million) of high financial quality (strong balance sheets). It is
managed according to a value and growth discipline. This discipline measures
and assigns a value to such growth indicators as profitability, earnings
growth, earnings momentum and dividend growth. By its nature, such a discipline
has a contrarian bias: it will tend to direct investments towards those areas
which have not done well recently and away from those areas which have. It will
also show a preference for stocks with a low price to earnings ratio over those
with a high price to earnings ratio. Over the last twelve months, the Fund has
consistently over weighted the Finance, Utilities, Capital Goods and Basic
Materials sectors because of their high levels of perceived value. During this
same period, the Fund carried sector weights equal to the S&P 500 in
Transportation and Technology and less than equal weights in Consumer Staples
and Energy. Consumer Cyclicals began the fiscal year with an over weighting and
ended the period with an under weighting. Relative to the S&P 500, the under
weighting in Consumer Staples hurt the Fund's performance while the over
weighting in Finance had a positive impact.
The fixed income component of the Fund seeks to provide current income
consistent with relative stability of capital. It achieves this objective by
investing primarily in obligations issued or guaranteed as to principal and
interest by the U.S. Government and its agencies. The weighted average maturity
of the Fund ranges between 3 and 10 years. The portfolio manager adjusts the
maturity and duration of the Fund to take advantage of interest rate changes
and to maximize current income within the constraints of high quality and
capital stability.
Over the past twelve months, the bond market has experienced a reversal
relative to the interest rate environment of the twelve month period ending
September 1994. Beginning in 1995, the U.S. bond market witnessed a dramatic
decline in interest rates across the entire yield curve, from three months to
thirty years. The decline in interest rates may be attributed primarily to a
change in investor psychology from one of considerable economic growth and
inflationary expectations to one of slowing economic activity with low to
moderate inflation. The Fund's weighted average maturity has ranged from 4.9 to
6.2 years, and its duration has averaged 3.9 years.
The accompanying chart compares the Fund with the S&P 500 Composite Index, the
Lehman Brothers Intermediate Government Bond Index and the Lipper Balanced
Funds Average. The Lipper Balanced Funds Average measures the performance of
some 30 actual portfolios that invest according to a style similar to that of
the Fund. This Average emphasizes principal conservation and reflects the
performance of balanced portfolios of stocks and bonds.
12
<PAGE>
__________________________ INVESTMENT GROWTH ANALYSIS __________________________
[MAC GRAPH APPEARS HERE]
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Marquis Growth and
Income Fund, Class A from October 31, 1993 through September 30, 1995 as
compared with the growth of $10,000 investment in the S&P 500 Composite Index,
Lehman Brothers Intermediate Government Bond Index and the Lipper Balanced Funds
Average.
<TABLE>
<CAPTION>
Growth of $10,000 Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in the Invested in the Growth of $10,000 Invested in the Invested in the
Growth and Income Growth and Income Invested in the Lehman Brothers Lipper Balanced
Fund, Class A Fund, Class A S & P 500 Composite Intermediate Government Funds Average
(without load) (with load) Index Bond Index
<S> <C> <C> <C> <C> <C>
10/31/93 10,000 9,650 10,000 10,000 10,000
9,987 9,638 10,025 9,992 10,032
9,752 9,410 9,645 9,807 9,710
9,679 9,341 9,685 9,752 9,605
9/94 9,859 9,514 10,158 9,826 9,888
9,804 9,461 10,156 9,817 9,783
10,365 10,002 11,145 10,226 10,385
11,049 10,662 12,208 10,704 11,133
9/95 11,594 11,188 13,179 10,870 11,748
</TABLE>
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Marquis Growth and
Income Fund, Class B from October 31, 1993 through September 30, 1995 as
compared with the growth of $10,000 investment in the S&P 500 Composite Index,
Lehman Brothers Intermediate Government Bond Index and the Lipper Balanced Funds
Average.
[MAC GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Growth of $10,000 Growth of $10,000 Growth of $10,000 Growth of $10,000
Invested in the Invested in the Growth of $10,000 Invested in the Invested in the
Growth and Income Growth and Income Invested in the Lehman Brothers Lipper Balanced
Fund, Class B Fund, Class B S & P 500 Composite Intermediate Government Funds Average
(without load) (with load) Index Bond Index
<S> <C> <C> <C> <C> <C>
10/31/93 10,000 10,000 10,000 10,000 10,000
9,971 9,971 10,025 9,992 10,032
9,726 9,726 9,645 9,807 9,710
9,634 9,634 9,685 9,752 9,605
9/94 9,789 9,789 10,158 9,826 9,888
9,716 9,716 10,156 9,817 9,783
10,251 10,251 11,145 10,226 10,385
10,914 10,914 12,208 10,704 11,133
9/95 11,428 11,153 13,179 10,870 11,748
</TABLE>
<TABLE>
<CAPTION>
Average Annual One Year
Total Return Return
<S> <C> <C>
Growth and Income Fund, Class A (without load) 7.90% 17.58%
Growth and Income Fund, Class A (with load) 6.00% 13.44%
Growth and Income Fund, Class B (without load) 7.13% 16.75%
Growth and Income Fund, Class B (with load) 5.79% 14.00%
</TABLE>
Past performance of the Fund is not predictive of future performance. Class A
shares were offered beginning October 1, 1993. Class B shares were offered
beginning October 22, 1993. Performance of the Class A shares reflects the
maximum front end sales charge of 3.50%. Performance of the Class B shares
reflects the maximum contingent deferred sales charge of 2.75% for the two year
holding period. The performance of the S&P 500 Composite Index, the Lehman
Brothers Intermediate Government Bond Index and the Lipper Balanced Funds
Average does not include annual operating expenses which are experienced by the
Fund.
13
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS
OF FUND PERFORMANCE
VALUE EQUITY FUND
- --------------------------------------------------------------------------------
The Value Equity Fund (the "Fund") seeks to provide long-term capital
appreciation. It pursues this goal by investing in large capitalization, high
quality stocks. For the twelve months ended on September 30, 1995, the Fund
generated a total return of 25.13% for the Class A shares and 24.17% for the
Class B shares. Over this same period, the Lipper Growth & Income Funds Average
had a total return of 23.0% and the S&P 500 Composite Index had a total return
of 29.71%.
The Fund only invests in large capitalization companies (over $500 million) of
high quality (strong balance sheets), and is managed according to a value and
growth discipline. This discipline measures and assigns a value to such growth
indicators as profitability, earnings growth, earnings momentum and dividend
growth. By its nature, such a discipline has a contrarian bias: it will tend to
direct investments towards those areas which have not done well recently and
away from those areas which have. It will also show a preference for stocks
with a low price to earnings ratio over those with a high price to earnings
ratio. Over the last twelve months, the Fund has consistently over weighted the
Finance, Utilities, Capital Goods and Basic Materials sectors because of their
high levels of perceived value. During this same period, the Fund carried
sector weights equal to the S&P 500 in Transportation and Technology and less
than equal weights in Consumer Staples and Energy. Consumer Cyclicals began the
fiscal year with an over weighting and ended the period with an under
weighting. Relative to the S&P 500, the under weighting in Consumer Staples
hurt the Fund's performance while the over weighting in Finance had a positive
impact.
At present, the portfolio manager remains generally positive on the outlook for
the economy. The domestic economy since the end of the last recession in March
of 1991 has grown and continues to grow at the moderate pace of between 2.5% to
3.0%. This is a much slower pace of expansion than the average of all previous
recoveries since World War II. The portfolio manager believed for some time
that this very moderate pace has meant that the expansion can be more durable:
it can avoid the shortages that drive cost inflation and the excessive
inventory building that triggers recessions. The portfolio manager continues to
believe in the durability of this expansion, though he is concerned that his
view is becoming consensus. Inflation and interest rates, far from showing
signs of dramatic increase, may be poised for modest declines if consumer
spending weakens further from its already depressed level and slow growth
becomes no growth. Given the evidence to date, however, of moderate economic
growth and low consumer inflation, the portfolio manager continues to over
weight the industrial and financial sectors and to under weight the consumer
sectors.
The accompanying chart compares the Fund with both the S&P 500 Composite Index
and the Lipper Growth & Income Funds Average. The Lipper Growth & Income Funds
Average measures the performance of some 30 actual portfolios that invest
according to a style similar to that of the Fund. This Average emphasizes both
price appreciation and dividend growth; Lipper Analytics employs this Average
to measure both the Fund and S&P 500 Index funds.
14
<PAGE>
__________________________ INVESTMENT GROWTH ANALYSIS __________________________
[MAC GRAPH APPEARS HERE]
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in the Marquis Value
Equity Fund, Class A from October 31, 1993 through September 30, 1995 as
compared with the growth of $10,000 investment in the S&P 500 Composite Index
and the Lipper Growth and Income Funds Average.
<TABLE>
<CAPTION>
Growth of $10,000 Growth of $10,000
Invested in the Invested in the Growth of $10,000 Growth of $10,000
Value Equity Fund, Value Equity Fund, Invested in the Invested in the
Class A Class A S & P 500 Lipper Growth and
(without load) (with load) Composite Index Income Funds Average
<S> <C> <C> <C> <C>
10/31/93 10,000 9,650 10,000 10,000
9,859 9,514 10,025 10,086
9,562 9,227 9,645 9,776
9,498 9,166 9,685 9,744
9/94 9,847 9,502 10,158 10,163
9,702 9,362 10,156 10,002
10,472 10,106 11,145 10,797
11,404 11,005 12,208 11,672
9/95 12,321 11,890 13,179 12,503
</TABLE>
[MAC GRAPH APPEARS HERE]
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,0000 in the Marquis Value
Equity Fund, Class B from October 31, 1993 through September 30, 1995 as
compared with the growth of $10,000 investment in the S&P 500 Composite Index
and the Lipper Growth and Income Funds Average.
<TABLE>
<CAPTION>
Growth of $10,000 Growth of $10,000
Invested in the Invested in the Growth of $10,000 Growth of $10,000
Value Equity Fund, Value Equity Fund, Invested in the Invested in the
Class B Class B S & P 500 Lipper Growth and
(without load) (with load) Composite Index Income Funds Average
<S> <C> <C> <C> <C>
10/31/93 10,000 10,000 10,000 10,000
9,856 9,856 10,025 10,086
9,534 9,534 9,645 9,776
9,454 9,454 9,685 9,744
9/94 9,789 9,789 10,158 10,163
9,618 9,618 10,156 10,002
10,372 10,372 11,145 10,797
11,273 11,273 12,208 11,672
9/95 12,156 11,889 13,179 12,503
</TABLE>
<TABLE>
<CAPTION>
Average Annual One Year
Total Return Return
<S> <C> <C>
Value Equity Fund, Class A(without load) 10.96% 25.13%
Value Equity Fund, Class A(with load) 9.01% 20.75%
Value Equity Fund, Class B(without load) 10.82% 24.17%
Value Equity Fund, Class B(with load) 9.52% 21.42%
</TABLE>
Past performance of the Fund is not predictive of future performance. Class A
shares were offered beginning October 1, 1993. Class B shares were offered
beginning October 22, 1993. Performance of the Class A shares reflects the
maximum front end sales charge of 3.50%. Performance of the Class B shares
reflects the maximum contingent deferred sales charge of 2.75% for the two year
holding period. The performance of the S&P 500 Composite Index and the Lipper
Growth & Income Funds Average does not include annual operating expenses which
are experienced by the Fund.
15
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
September 30, 1995
- --------------------------------------------------------------------------------
INSTITUTIONAL MONEY MARKET FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Face
Amount (000) Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 20.4%
U.S. Treasury Bills
5.280%, 10/19/95 $1,500 $ 1,496
5.330%, 02/15/96 2,500 2,449
5.370%, 03/21/96 2,500 2,436
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $6,381,189) 6,381
-----------
REPURCHASE AGREEMENTS -- 80.1%
Aubrey G. Lanston 6.400%, dated 09/29/95, matures
10/02/95, repurchase price $1,301,000
(collateralized by U.S. Treasury Bill, par value
$1,360,000, 0.000%, 03/07/96, market value:
$1,327,000) 1,300
Fuji Bank 6.450%, dated 09/29/95, matures 10/02/95,
repurchase price $1,301,000 (collateralized by U.S.
Treasury STRIPS, par value $3,525,000, 0.000%,
05/15/10, market value: $1,333,000) 1,300
HSBC 6.400%, dated 09/29/95, matures 10/02/95,
repurchase price $1,301,000 (collateralized by U.S.
Treasury STRIPS, par value $1,455,000, 0.000%,
02/15/97, market value: $1,345,000) 1,300
J.P. Morgan 6.400%, dated 09/29/95, matures 10/02/95,
repurchase price $1,301,000 (collateralized by U.S.
Treasury STRIPS, par value $1,871,000, 0.000%,
05/15/01, market value: $1,331,000) 1,300
<CAPTION>
- --------------------------------------------------------------------------------
Value (000)
- --------------------------------------------------------------------------------
<S> <C>
Lehman Brothers 6.420%, dated 09/29/95, matures 10/02/95,
repurchase price $1,301,000 (collateralized by U.S. Treasury
STRIPS, par value $1,650,000, 0.000%, 05/15/99, market
value: $1,328,000) $ 1,300
Merrill Lynch 5.850%, dated 09/29/95, matures 10/02/95,
repurchase price $1,308,000 (collateralized by U.S. Treasury
Bond, par value $1,135,000, 8.000%, 11/15/21, market value:
$1,339,000)(1) 1,307
Morgan Stanley 6.150%, dated 09/29/95, matures 10/02/95,
repurchase price $1,301,000 (collateralized by U.S. Treasury
Bill, par value $1,350,000, 0.000% 12/21/95, market value:
$1,333,000)(1) 1,301
Nomura Securities 6.400%, dated 09/29/95, matures 10/02/95,
repurchase price $7,321,000 (collateralized by various U.S.
Treasury Obligations, par value $7,022,000, 6.500%-10.750%,
04/30/99-08/15/05, market value: $7,464,000)(1) 7,317
UBS Securities 6.420%, dated 09/29/95, matures 10/02/95,
repurchase price $7,356,000 (collateralized by U.S. Treasury
Bond, par value $7,175,000, 6.875%, 08/15/25, market value:
$7,502,000)(1) 7,352
Wachovia 6.600%, dated 09/29/95, matures 10/02/95, repurchase
price $1,301,000 (collateralized by U.S. Treasury Note, par
value $1,260,000, 7.375%, 11/15/97, market value:
$1,329,000) 1,300
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $25,076,616) 25,077
-----------
TOTAL INVESTMENTS -- 100.5%
(Cost $31,457,805) 31,458
-----------
OTHER ASSETS AND LIABILITIES -- (0.5%)
Other Assets and Liabilities, Net (144)
-----------
NET ASSETS:
Fund shares (unlimited authorization--no par value) based on
31,314,053 outstanding shares of beneficial interest 31,314
-----------
TOTAL NET ASSETS -- 100.0% $ 31,314
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE $1.00
===========
</TABLE>
- --------------------------------------------------------------------------------
STRIPS -- Separate Trading of Registered Interest and Principal Securities
(1) Tri-party repurchase agreement
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
MARQUIS FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TREASURY SECURITIES MONEY MARKET FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Face
Amount (000) Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 26.9%
U.S. Treasury Bills
5.610%, 11/09/95 $30,000 $ 29,817
5.510%, 11/30/95 30,000 29,725
5.470%, 12/21/95 25,000 24,692
5.290%, 01/04/96 25,000 24,651
5.305%, 01/11/96 25,000 24,624
5.190%, 02/08/96 10,000 9,813
5.285%, 02/08/96 25,000 24,523
5.445%, 03/07/96 25,000 24,403
5.380%, 05/02/96 25,000 24,200
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $216,448,224) 216,448
-----------
REPURCHASE AGREEMENTS -- 73.4%
Aubrey G. Lanston 6.400%, dated 09/29/95, matures
10/02/95, repurchase price $30,016,000
(collateralized by U.S. Treasury Note, par value
$28,010,000, 8.750%, 10/15/97, market value:
$30,616,000) 30,000
Fuji Bank 6.450%, dated 09/29/95, matures 10/02/95,
repurchase price $38,020,000 (collateralized by U.S.
Treasury STRIPS, par value $52,205,000, 0.000%,
08/15/00, market value: $38,795,000) 38,000
HSBC 6.400%, dated 09/29/95, matures 10/02/95,
repurchase price $38,020,000 (collateralized by
various U.S. Treasury STRIPS, par value $46,115,000,
0.000%, 02/15/97-02/15/98, market value:
$38,863,000) 38,000
<CAPTION>
- -------------------------------------------------------------------------------
Value (000)
- -------------------------------------------------------------------------------
<S> <C>
J.P. Morgan 6.400%, dated 09/29/95, matures 10/02/95, repurchase
price $190,102,000 (collateralized by various U.S. Treasury
STRIPS, par value $656,752,000, 0.000%, 02/15/00-05/15/22, market
value: $194,270,000) $ 190,001
Lehman Brothers 6.420%, dated 09/29/95, matures 10/02/95,
repurchase price $37,020,000 (collateralized by U.S. Treasury
STRIPS, par value $48,450,000, 0.000%, 11/15/99, market value:
$37,747,000) 37,000
Merrill Lynch 5.850%, dated 09/29/95, matures 10/02/95, repurchase
price $7,774,000 (collateralized by U.S. Treasury Bond, par value
$6,720,000, 8.000%, 11/15/21, market value: $7,926,000)(1) 7,770
Morgan Stanley 6.150%, dated 09/29/95, matures 10/02/95,
repurchase price $10,010,000 (collateralized by U.S. Treasury
Bill, par value $10,450,000, 02/29/96, market value:
$10,211,000)(1) 10,005
Nomura Securities 6.400%, dated 09/29/95, matures 10/02/95,
repurchase price $17,014,000 (collateralized by various U.S.
Treasury Obligations, par value $12,242,000, 7.125%-13.750%,
09/30/99-08/15/05, market value: $17,346,000)(1) 17,005
Prudential Securities 6.200%, dated 09/29/95, matures 10/02/95,
repurchase price $16,880,000 (collateralized by U.S. Treasury
Notes, par value $17,130,000, 5.125%-6.500%, 03/31/98-04/30/99,
market value: $17,209,000)(1) 16,871
UBS Securities 6.400%, dated 09/29/95, matures 10/02/95,
repurchase price $175,093,000 (collateralized by U.S. Treasury
Notes, par value $140,730,000, 7.500%-12.000%, 01/31/97-08/15/13,
market value: $178,761,000) 175,000
UBS Securities 6.420%, dated 09/29/95, matures 10/02/95,
repurchase price $10,584,000 (collateralized by U.S. Treasury
Bond, par value $10,320,000, 6.875%, 08/15/25, market value:
$10,791,000)(1) 10,578
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
September 30, 1995
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Value (000)
- -------------------------------------------------------------------------------
<S> <C>
Wachovia 6.600%, dated 09/29/95, matures 10/02/95, repurchase
price $20,011,000 (collateralized by U.S. Treasury Note, par
value $19,340,000, 7.375%, 11/15/97, market value: $20,406,000) $ 20,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $590,230,124) 590,230
-----------
TOTAL INVESTMENTS -- 100.3%
(Cost $806,678,348) 806,678
-----------
OTHER ASSETS AND LIABILITIES -- (0.3%)
Other Assets and Liabilities, Net (2,661)
-----------
NET ASSETS:
Fund shares of Institutional Class (unlimited authorization -- no
par value) based on 521,259,605 outstanding shares of beneficial
interest 521,260
Fund shares of Retail Class (unlimited authorization -- no par
value) based on 282,743,848 outstanding shares of beneficial
interest 282,744
Accumulated net realized gain on investments 13
-----------
TOTAL NET ASSETS -- 100.0% $ 804,017
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
INSTITUTIONAL CLASS $1.00
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
RETAIL CLASS $1.00
===========
</TABLE>
- --------------------------------------------------------------------------------
GOVERNMENT SECURITIES FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Face Market
Amount (000) Value (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY OBLIGATIONS -- 46.6%
Treasury LINCS
6.000%, 08/15/09 $ 2,500 $ 2,309
U.S. Treasury Bills
5.300%, 11/09/95 1,500 1,491
5.300%, 05/02/96 1,500 1,452
U.S. Treasury Notes
9.250%, 01/15/96 625 631
8.875%, 02/15/96 500 506
7.375%, 05/15/96 1,500 1,515
6.125%, 07/31/96 1,500 1,504
7.250%, 08/31/96 2,575 2,609
6.250%, 01/31/97 300 302
8.500%, 04/15/97 2,250 2,337
6.500%, 04/30/97 1,450 1,464
6.875%, 04/30/97 6,000 6,096
8.500%, 07/15/97 1,500 1,566
6.500%, 08/15/97 10,500 10,620
8.625%, 08/15/97 750 786
5.125%, 04/30/98 1,800 1,767
9.000%, 05/15/98 1,250 1,343
5.125%, 06/30/98 2,500 2,451
9.250%, 08/15/98 2,200 2,390
6.375%, 01/15/99 1,500 1,519
6.000%, 10/15/99 1,500 1,502
7.875%, 11/15/99 750 800
8.500%, 02/15/00 1,500 1,641
8.750%, 08/15/00 2,250 2,504
6.375%, 08/15/02 4,250 4,314
U.S. Treasury Bond
7.125%, 02/15/23 2,500 2,650
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $58,210,614) 58,069
-----------
MORTGAGE-BACKED POOLED NOTES -- 39.4%
FHLMC
7.000%, 04/01/00 55 55
9.000%, 11/01/05 1,341 1,404
9.000%, 05/01/06 1,940 2,031
7.250%, 05/01/07 82 81
9.000%, 08/01/09 794 826
9.000%, 12/01/09 1,461 1,516
</TABLE>
- --------------------------------------------------------------------------------
STRIPS -- Separate Trading of Registered Interest and Principal Securities
(1) Tri-party repurchase agreement
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
MARQUIS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Face Market
Amount (000) Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
FHLMC CMO
7.500%, 11/15/01 $3,975 $ 4,106
6.700%, 05/15/05 1,750 1,734
7.000%, 09/15/07 3,250 3,281
6.500%, 04/15/08 4,500 4,231
7.750%, 01/15/20 3,125 3,155
9.000%, 04/15/20 1,091 1,122
FNMA
8.500%, 03/01/98 181 186
7.000%, 09/01/07 4,425 4,441
FNMA REMIC
9.150%, 08/25/03 820 834
7.350%, 06/25/07 2,000 2,004
6.250%, 10/25/22 109 107
GNMA
10.500%, 06/15/98 20 21
10.500%, 09/15/98 3 3
9.000%, 07/15/16 584 615
9.000%, 09/15/16 479 504
9.000%, 10/15/16 143 150
9.000%, 11/15/16 345 364
9.500%, 08/15/17 589 629
10.000%, 04/15/19 228 249
10.000%, 05/15/19 68 74
9.500%, 12/15/19 595 636
7.500%, 06/15/23 4,803 4,851
7.000%, 03/15/24 2,833 2,801
7.000%, 04/15/24 2,595 2,566
8.500%, 10/15/24 1,905 1,986
8.000%, 07/15/25 2,496 2,568
-----------
TOTAL MORTGAGE-BACKED POOLED NOTES
(Cost $49,057,549) 49,131
-----------
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 4.1%
FNMA
9.550%, 12/10/97 975 1,044
9.150%, 04/10/98 975 1,045
9.150%, 09/10/99 118 118
TVA
8.375%, 10/01/99 2,650 2,843
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $5,130,263) 5,050
-----------
<CAPTION>
- -------------------------------------------------------------------------------
Face Market
Amount (000) Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE OBLIGATIONS -- 3.6%
Baxter International
7.500%, 05/01/97 $2,200 $ 2,237
Exxon Capital
8.000%, 12/01/95 1,000 1,003
Ford Capital
9.000%, 08/15/98 750 801
Patriot Shipping
8.125%, 12/07/04 389 427
-----------
TOTAL CORPORATE OBLIGATIONS
(Cost $4,451,483) 4,468
-----------
CASH EQUIVALENTS -- 2.5%
SEI Liquid Asset Trust Treasury Portfolio 3,139 3,139
-----------
TOTAL CASH EQUIVALENTS
(Cost $3,138,879) 3,139
-----------
REPURCHASE AGREEMENT -- 2.8%
UBS Securities 6.42%, dated 09/29/95, matures
10/02/95, repurchase price $3,507,975
(collateralized by U.S. Treasury Bond, total par
value $3,135,000, 7.875%, 02/15/21, market
value: 3,580,000)(2) 3,506
-----------
TOTAL REPURCHASE AGREEMENT
(Cost $3,506,125) 3,506
-----------
TOTAL INVESTMENTS -- 99.0%
(Cost $123,494,913) 123,363
-----------
OTHER ASSETS AND LIABILITIES -- 1.0%
Other Assets and Liabilities, Net 1,285
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
September 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Market
Value (000)
- ------------------------------------------------------------------------------
<S> <C>
NET ASSETS:
Fund Shares of Class A (unlimited authorization -- no par value)
based on 12,608,818 outstanding shares of beneficial interest $ 125,529
Fund Shares of Class B (unlimited
authorization -- no par value) based on 24,587 outstanding
shares of beneficial interest 243
Undistributed net investment income 4
Accumulated net realized loss on investments (996)
Net unrealized depreciation on investments (132)
-----------
TOTAL NET ASSETS -- 100.0% $ 124,648
===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- CLASS A $9.87
===========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($9.87/96.50%) $10.23
===========
NET ASSET VALUE AND OFFERING PRICE PER SHARE -- CLASS B(1) $9.92
===========
</TABLE>
- --------------------------------------------------------------------------------
LOUISIANA TAX-FREE INCOME FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Face Market
Amount (000) Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL BONDS -- LOUISIANA -- 95.1%
Alexandria, Utilities RB (FGIC)
4.500%, 05/01/96 $ 25 $ 25
5.250%, 05/01/11 100 94
Alexandria, Utilities RB Ser B (FGIC)
4.650%, 05/01/04 150 147
Ascension Parish, Parish-Wide School District GO
(AMBAC)
4.900%, 03/01/09 150 140
Baton Rouge, Sales & Use Tax RB
6.000%, 08/01/08 200 207
Bossier City, Sales & Use Tax RB, Public Improvement
Ser ST (AMBAC)
5.500%, 11/01/99 100 104
Caddo Parish, Refunding GO
5.000%, 02/01/05 350 346
East Baton Rouge Parish, Sales & Use Tax RB, Sewer
Improvements Ser ST-A (FGIC)
4.800%, 02/01/09 340 313
East Baton Rouge, Mortgage Financing Authority,
Single Family Mortgage Ser B
4.350%, 10/01/00 85 81
5.300%, 10/01/14 95 85
Energy & Power Authority RB, Rodemacher Unit Number
2
6.000%, 01/01/13 500 502
Greater New Orleans Expressway, Louisiana Expressway
RB
4.800%, 11/01/97 25 25
Gretna, Refunding Sales Tax RB (AMBAC)
5.200%, 06/01/06 225 228
Iberville Parish, School District #5 GO
5.750%, 10/01/03 250 262
</TABLE>
FNMA -- Federal National Mortgage Association
FHLMC -- Federal Home Loan Mortgage Corporation
GNMA -- Government National Mortgage Association
TVA -- Tennessee Valley Authority
LINCS -- Synthetic-Linked Coupon Securities
CMO -- Collateralized Mortgage Obligation
REMIC -- Real Estate Mortgage Investment Conduit
(1) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see notes to the financial statements.
(2) Tri-party repurchase agreement
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
MARQUIS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Face Market
Amount (000) Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
Jefferson Parish, Ad Valorem Property Tax Ser A GO
(FGIC)
5.250%, 09/01/05 $ 250 $ 255
Jefferson Parish, Hospital Services District #1
(FGIC)
5.100%, 01/01/05 300 297
Jefferson Parish, School District Sales & Use Tax RB
6.250%, 02/01/08 300 315
Kenner, Sales Tax RB (FGIC)
5.750%, 06/01/06 100 104
Lafayette, Public Improvement Sales Tax RB (FGIC)
4.900%, 03/01/03 505 497
4.625%, 05/01/05 300 282
5.500%, 03/01/07 200 203
Lafayette, Public Power Authority Electric RB
(AMBAC)
5.000%, 11/01/06 250 246
Lafayette, Utility Refunding RB (AMBAC)
4.100%, 11/01/99 175 172
4.700%, 11/01/04 125 122
Mandeville, Water Utility Improvements Ad Valorem
Property Tax RB
5.150%, 02/01/10 100 94
Natchitoches Parish, School District #7 GO (FSA)
4.900%, 03/01/07 190 186
New Orleans, Exhibit Hall Authority Hotel Occupancy
Tax RB (AMBAC)
5.125%, 01/15/96 50 50
New Orleans, Home Mortgage Special Obligation
6.250%, 01/15/11 500 525
Offshore Terminal Authority RB, First Stage Ser B
6.350%, 09/01/97 65 67
5.850%, 09/01/00 100 104
Orleans Parish, Public School Capital Refinancing
5.000%, 12/01/05 250 248
<CAPTION>
- -------------------------------------------------------------------------------
Face Market
Amount (000) Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
Public Facilities Authority RB, Alton Ochsner
Medical Foundation Project Ser A (MBIA)
6.000%, 05/15/01 $ 100 $ 106
Public Facilities Authority RB, Alton Ochsner
Medical Foundation Project Ser B (MBIA)
6.000%, 05/15/17 100 100
Public Facilities Authority RB, Jefferson Parish
Eastbank Project (FGIC)
4.850%, 08/01/06 250 242
Public Facilities Authority RB, Our Lady of Lake
Regional Center
5.900%, 12/01/06 390 400
Public Facilities Authority RB, Special Insurance
Assessment (FSA)
4.400%, 10/01/00 120 118
Public Facilities Authority RB, Local Government
Refunding Program, Ser A (FSA)
5.100%, 03/01/01 250 252
Saint James Parish GO, Unlimited Ad Valorem Property
Tax
4.800%, 03/01/05 85 83
5.200%, 03/01/08 75 73
Saint Tammany Parish, Sales & Use Tax RB
5.750%, 04/01/06 250 261
Saint Tammany Parish, School Board Sales & Use Tax
RB (FGIC)
5.750%, 04/01/03 250 263
Saint Tammany Parish, School District #12 GO (FGIC)
6.500%, 03/01/05 200 214
Shreveport, Public Improvements Ad Valorem Property
Tax RB
4.750%, 12/01/09 200 184
Slidell, Sales & Use Tax RB, Public Improvement Ser
B
5.200%, 10/01/05 100 101
5.400%, 10/01/07 200 200
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
September 30, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Face Market
Amount (000) Value (000)
- --------------------------------------------------------------------------
<S> <C> <C>
State GO, Ser B (MBIA)
5.600%, 08/01/07 $ 250 $ 258
5.600%, 08/01/08 250 257
State Refunding GO, Ad Valorem Property
6.250%, 08/01/99 250 264
State Refunding GO, Ser A (MBIA)
4.750%, 08/01/99 115 116
5.100%, 08/01/01 250 256
5.300%, 08/01/04 250 257
5.375%, 08/01/05 400 411
5.600%, 05/15/07 250 258
5.700%, 05/15/08 250 258
State University Agricultural & Mechanical
College (FGIC)
5.400%, 07/01/05 150 152
5.500%, 07/01/06 250 255
-----------
TOTAL MUNICIPAL BONDS
(Cost $11,634,909) 11,665
-----------
CASH EQUIVALENTS -- 5.6%
SEI Tax Exempt Trust Institutional Tax Free
Portfolio 373 373
SEI Tax Exempt Trust
Tax Free Portfolio 316 316
-----------
TOTAL CASH EQUIVALENTS
(Cost $689,400) 689
-----------
TOTAL INVESTMENTS -- 100.7%
(Cost $12,324,309) 12,354
-----------
OTHER ASSETS AND LIABILITIES -- (0.7%)
Other Assets and Liabilities, Net (82)
-----------
NET ASSETS:
Fund shares of Class A (unlimited
authorization -- no par value) based on
1,196,119 outstanding shares of beneficial
interest 11,694
Fund shares of Class B (unlimited
authorization -- no par value) based on 57,920
outstanding shares of beneficial interest 583
<CAPTION>
- ---------------------------------------------------------------------------
Market
Value (000)
- ---------------------------------------------------------------------------
<S> <C>
Accumulated net realized loss on investments $ (34)
Net unrealized appreciation on investments 29
-------
TOTAL NET ASSETS -- 100.0% $12,272
=======
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- CLASS A $9.79
=======
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($9.79/96.50%) $10.15
=======
NET ASSET VALUE AND OFFERING PRICE PER
SHARE -- CLASS B(1) $9.79
=======
</TABLE>
- -------------------------------------------------------------------------
GO -- General Obligation
RB -- Revenue Bond
Ser -- Series
The following organizations have provided underlying credit support for certain
securities as defined in the Statement of Net Assets:
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
AMBAC -- American Municipal Bond Assurance Company
MBIA -- Municipal Bond Insurance Association
(1) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
MARQUIS FUNDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Market
Shares Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 52.3%
AIR TRANSPORTATION -- 0.5%
KLM Royal Dutch Air* 11,500 $ 403
-------
AIRCRAFT -- 1.1%
Lockheed Martin 7,600 510
McDonnell Douglas 6,000 497
-------
1,007
-------
APPAREL/TEXTILES -- 0.5%
V F 7,900 403
-------
AUTOMOTIVE -- 2.5%
Dana 19,850 573
Eaton 6,900 366
Echlin 11,750 420
Paccar 11,050 517
TRW 4,800 357
-------
2,233
-------
BANKS -- 5.7%
Bank of New York 12,400 576
BankAmerica 8,800 527
Barnett Banks 8,000 453
First Bank System 11,700 563
First Chicago 5,400 371
First Interstate Bancorp 4,900 494
First Union 8,000 408
Mellon Bank 9,150 408
NDB Bancorp 11,100 425
SunTrust Banks 6,300 417
Wachovia 9,100 392
-------
5,034
-------
BUILDING & CONSTRUCTION -- 0.4%
Lennar 15,300 333
-------
CHEMICALS -- 3.4%
Dow Chemical 6,000 447
Imperial Chemical Industries 8,900 452
Lubrizol 9,900 323
Olin 5,400 371
Rhone Poulenc Rorer 9,350 425
Union Carbide 13,020 517
Vulcan Materials 8,500 451
-------
2,986
-------
COMMUNICATIONS EQUIPMENT -- 0.4%
Harris 7,000 384
-------
<CAPTION>
- -------------------------------------------------------------------------------
Market
Shares Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMPUTERS & SERVICES -- 1.8%
Compaq Computer* 11,000 $ 532
Pitney Bowes 10,500 441
Sun Microsystems* 9,600 605
-------
1,578
-------
CONCRETE & MINERAL PRODUCTS -- 0.4%
Armstrong World Industries 6,000 333
-------
CONSUMER PRODUCTS -- 0.7%
Nike 5,850 650
-------
CONTAINERS & PACKAGING -- 0.3%
Ball 10,400 308
-------
DRUGS -- 1.4%
Mallinckrodt Group 9,700 384
Schering Plough 8,200 422
Upjohn 9,200 411
-------
1,217
-------
ELECTRICAL SERVICES -- 6.6%
Cipsco 15,100 519
Consolidated Edison of New York 11,500 349
Duke Power 8,600 373
Florida Progress 10,300 333
New England Electric System 10,400 385
Nipsco Industries 10,400 363
Northeast Utilities 22,100 538
Northern States Power 7,200 327
Oklahoma Gas & Electric 9,400 354
San Diego Gas & Electric 15,600 361
SCE 23,700 421
Southern 21,100 498
Southwestern Public Service 14,600 476
Unicom 16,000 484
-------
5,781
-------
ELECTRICAL TECHNOLOGY -- 0.5%
Texas Instruments 6,000 479
-------
FINANCIAL SERVICES -- 2.3%
American Express 13,200 586
Bear Stearns 19,000 409
Beneficial 10,300 538
Transamerica 6,500 463
-------
1,996
-------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD --
1.4%
IBP 13,200 704
Philip Morris 6,200 518
-------
1,222
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
September 30, 1995
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Market
Shares Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
GAS/NATURAL GAS -- 1.4%
Mapco 5,400 $ 278
Pacific Enterprises 18,600 467
Williams 12,200 476
-------
1,221
-------
GLASS PRODUCTS -- 0.5%
PPG Industries 8,900 414
-------
INSURANCE -- 4.0%
AFLAC 10,500 436
American General 12,900 482
Aon 11,350 464
Cigna 4,900 509
Lincoln National 8,800 415
Ohio Casualty 11,000 393
Providian 9,200 382
Saint Paul 8,300 485
-------
3,566
-------
MACHINERY -- 2.4%
Briggs & Stratton 11,500 463
Caterpillar 5,200 296
Cummins Engine 8,100 312
Deere 3,900 317
Parker-Hannifin 9,150 348
Timken 9,700 413
-------
2,149
-------
MEASURING DEVICES -- 0.4%
Johnson Controls 5,700 361
-------
METALS & MINING -- 0.4%
Cyprus AMAX Minerals 13,000 366
-------
MISCELLANEOUS
TRANSPORTATION -- 0.6%
Harsco 10,300 573
-------
PAPER & PAPER PRODUCTS --
3.2%
Bowater 9,200 429
Federal Paper Board 10,700 411
Mead 6,300 369
Tambrands 7,200 316
Union Camp 8,000 461
Westvaco 9,500 433
Weyerhaeuser 8,500 388
-------
2,807
-------
PETROLEUM REFINING -- 2.1%
Amoco 6,000 385
Ashland 9,400 314
Exxon 6,350 459
Mobil 4,100 408
Murphy Oil 7,800 312
-------
1,878
-------
<CAPTION>
- -------------------------------------------------------------------------------
Shares/Face
Amount Market
(000) Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
PROFESSIONAL SERVICES -- 1.0%
Dun & Bradstreet 7,900 $ 457
Servicemaster LP 15,600 437
-------
894
-------
RAILROADS -- 0.5%
Norfolk Southern 5,850 437
-------
RETAIL -- 1.8%
American Stores 10,900 309
Circuit City Stores 15,000 474
Sears Roebuck 7,200 266
Wendy's International 23,600 499
-------
1,548
-------
RUBBER & PLASTIC -- 1.4%
Bandag 6,450 341
Premark International 9,500 483
Sonoco Products 15,120 420
-------
1,244
-------
STEEL & STEEL WORKS -- 1.3%
Asarco 12,000 378
Phelps Dodge 7,000 438
Worthington Industries 16,800 309
-------
1,125
-------
TELEPHONES & TELECOMMUNICATION -- 0.9%
Ameritech 8,200 427
Pacific Telesis Group 10,700 329
-------
756
-------
TRUCKING -- 0.1%
Pittston Services Group 2,420 66
-------
WHOLESALE -- 0.4%
Avnet 7,250 374
-------
TOTAL COMMON STOCK
(Cost $39,197,447) 46,126
-------
U.S. TREASURY OBLIGATIONS -- 27.5%
U.S. Treasury Notes
7.250%, 11/15/96 $2,250 2,285
8.000%, 01/15/97 250 257
6.750%, 05/31/97 2,000 2,028
6.000%, 08/31/97 5,000 5,015
9.000%, 05/15/98 2,000 2,148
9.250%, 08/15/98 2,000 2,173
6.375%, 01/15/99 1,000 1,012
7.000%, 04/15/99 3,000 3,096
6.375%, 07/15/99 1,000 1,013
8.000%, 08/15/99 2,000 2,137
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
MARQUIS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Face Market
Amount (000) Value (000)
- -----------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Notes (continued)
8.500%, 02/15/00 $ 500 $ 547
5.750%, 08/15/03 1,500 1,460
U.S. Treasury Bond
7.125%, 02/15/23 1,000 1,060
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $24,569,157) 24,231
-------
MORTGAGE-BACKED POOLED
NOTES -- 14.9%
FHLMC
7.000%, 04/01/00 19 19
9.000%, 05/01/06 173 181
9.000%, 08/01/09 525 546
FHLMC CMO
9.000%, 04/15/20 508 522
FHLMC REMIC
7.150%, 01/15/23 2,000 1,963
FNMA
7.000%, 09/01/07 1,770 1,776
FNMA CMO
7.000%, 01/25/03 2,000 1,980
FNMA REMIC
9.150%, 08/25/03 774 787
GNMA
7.500%, 08/15/07 641 655
7.000%, 07/15/08 626 631
13.500%, 05/15/11 23 26
12.500%, 10/15/13 5 6
12.000%, 03/15/14 43 49
13.500%, 09/15/14 14 16
9.000%, 12/15/16 97 103
10.000%, 07/15/18 226 247
10.000%, 03/15/19 184 200
7.000%, 04/15/24 1,491 1,474
7.500%, 06/15/25 1,955 1,975
-------
TOTAL MORTGAGE-BACKED POOLED NOTES
(Cost $13,246,385) 13,156
-------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 0.1%
FNMA
8.150%, 08/12/96 100 102
-------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $103,170) 102
-------
<CAPTION>
- -----------------------------------------------------------------------------
Face Market
Amount (000) Value (000)
- -----------------------------------------------------------------------------
<S> <C> <C>
CASH EQUIVALENTS -- 0.5%
SEI Liquid Asset Trust Treasury Portfolio $ 433 $ 433
--------
TOTAL CASH EQUIVALENTS
(Cost $433,487) 433
--------
REPURCHASE AGREEMENT -- 4.1%
UBS Securities 6.42%, dated 09/29/95, matures
10/02/95, repurchase price $3,628,449
(collateralized by various U.S. Treasury Bonds,
par value $3,054,000, 7.875%-8.875%, 02/15/19-
02/15/21, market value: $3,702,000)(2) 3,627
--------
TOTAL REPURCHASE AGREEMENT
(Cost $3,626,535) 3,627
--------
TOTAL INVESTMENTS -- 99.4%
(Cost $81,176,181) 87,675
--------
OTHER ASSETS AND LIABILITIES -- 0.6%
Other Assets and Liabilities, Net 538
--------
NET ASSETS:
Fund shares of Class A (unlimited
authorization -- no par value) based on 8,012,512
outstanding shares of beneficial interest 79,936
Fund shares of Class B (unlimited
authorization -- no par value) based on 104,032
outstanding shares of beneficial interest 1,040
Accumulated net realized gain on investments 738
Net unrealized appreciation on investments 6,499
--------
TOTAL NET ASSETS -- 100.0% $ 88,213
========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE --
CLASS A $10.87
========
MAXIMUM OFFERING PRICE PER SHARE -- CLASS A
($10.87/96.50%) $11.26
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B(1) $10.93
========
- ---------------------------------------------------------------------------
</TABLE>
* Non-income producing security
GNMA -- Government National Mortgage Association
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
CMO -- Collateralized Mortgage Obligation
REMIC -- Real Estate Mortgage Investment Conduit
LP -- Limited Partnership
(1) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(2) Tri-party repurchase agreement
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
September 30, 1995
- --------------------------------------------------------------------------------
VALUE EQUITY FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Market
Shares Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK -- 93.5%
AIR TRANSPORTATION -- 0.9%
KLM Royal Dutch Air* 15,000 $ 525
-------
AIRCRAFT -- 2.1%
Lockheed Martin 10,700 718
McDonnell Douglas 6,500 538
-------
1,256
-------
APPAREL/TEXTILES -- 0.8%
V F 10,000 510
-------
AUTOMOTIVE -- 4.0%
Dana 14,900 430
Eaton 9,400 498
Echlin 15,850 567
Paccar 7,800 365
TRW 7,750 576
-------
2,436
-------
BANKS -- 10.4%
Bank of New York 14,900 692
BankAmerica 10,000 599
Barnett Banks 9,300 527
First Bank System 14,400 693
First Chicago 9,400 645
First Interstate Bancorp 6,500 655
First Union 10,000 510
Mellon Bank 11,600 518
NBD Bancorp 13,000 497
SunTrust Banks 5,900 390
Wachovia 12,200 526
-------
6,252
-------
BUILDING & CONSTRUCTION -- 0.7%
Lennar 20,500 446
-------
CHEMICALS -- 6.2%
Dow Chemical 7,300 544
Imperial Chemical Industries 10,500 533
Lubrizol 12,800 418
Olin 7,000 481
Rhone Poulenc Rorer 11,000 501
Union Carbide 18,620 739
Vulcan Materials 10,000 530
-------
3,746
-------
COMMUNICATIONS EQUIPMENT -- 0.8%
Harris 8,500 466
-------
<CAPTION>
- -------------------------------------------------------------------------------
Market
Shares Value (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMPUTERS & SERVICES -- 1.6%
Compaq Computer* 11,400 $ 551
Pitney Bowes 10,000 420
-------
971
-------
CONCRETE & MINERAL PRODUCTS -- 0.7%
Armstrong World Industries 8,000 444
-------
CONSUMER PRODUCTS -- 1.2%
Nike 6,250 695
-------
CONTAINERS & PACKAGING -- 0.8%
Ball 15,340 454
-------
DRUGS -- 2.7%
Mallinckrodt Group 11,400 452
Schering Plough 10,400 536
Upjohn 14,100 629
-------
1,617
-------
ELECTRICAL SERVICES -- 11.3%
Cipsco 16,100 553
Consolidated Edison of New York 15,100 459
Duke Power 8,900 386
Florida Progress 13,200 427
New England Electric System 12,300 455
Nipsco Industries 13,500 471
Northeast Utilities 14,800 361
Northern States Power 9,200 417
Oklahoma Gas & Electric 12,600 474
San Diego Gas & Electric 20,100 465
SCE 32,500 577
Southern 22,500 532
Southwestern Public Service 18,400 600
Unicom 20,400 618
-------
6,795
-------
ELECTRICAL TECHNOLOGY -- 1.0%
Texas Instruments 7,200 575
-------
FINANCIAL SERVICES -- 4.0%
American Express 15,300 679
Bear Stearns 24,000 516
Beneficial 11,900 622
Transamerica 8,300 591
-------
2,408
-------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD -- 2.3%
IBP 13,300 710
Philip Morris 7,900 660
-------
1,370
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
MARQUIS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Market
Shares Value (000)
- ------------------------------------------------------------------------------
<S> <C> <C>
GAS/NATURAL GAS -- 2.4%
Mapco 7,500 $ 386
Pacific Enterprises 18,340 461
Williams Companies 15,300 597
-------
1,444
-------
GLASS PRODUCTS -- 0.9%
PPG Industries 12,000 558
-------
INSURANCE -- 7.4%
AFLAC 13,600 564
American General 16,050 600
Aon 14,000 572
Cigna 6,200 645
Lincoln National 11,300 533
Ohio Casualty 12,200 436
Providian 11,800 490
Saint Paul 10,000 584
-------
4,424
-------
MACHINERY -- 4.5%
Briggs & Stratton 11,200 451
Caterpillar 7,100 404
Cummins Engine 10,100 389
Deere 5,400 439
Parker-Hannifin 12,000 456
Timken 13,400 571
-------
2,710
-------
MEASURING DEVICES -- 1.0%
Johnson Controls 9,500 601
-------
METALS & MINING -- 0.7%
Cyprus AMAX Minerals 14,700 413
-------
MISCELLANEOUS BUSINESS
SERVICES -- 1.4%
Sun Microsystems* 13,100 825
-------
MISCELLANEOUS TRANSPORTATION -- 1.0%
Harsco 11,100 617
-------
PAPER & PAPER PRODUCTS -- 5.9%
Bowater 11,200 522
Federal Paper Board 13,500 518
Mead 8,200 481
Tambrands 9,000 395
Union Camp 9,600 553
Westvaco 12,000 548
Weyerhaeuser 11,100 506
-------
3,523
-------
PETROLEUM REFINING -- 3.6%
Amoco 7,400 475
Ashland 11,300 377
<CAPTION>
- ------------------------------------------------------------------------------
Shares/Face
Amount Market
(000) Value (000)
- ------------------------------------------------------------------------------
<S> <C> <C>
PETROLEUM REFINING (continued)
Exxon 7,000 $ 506
Mobil 5,300 527
Murphy Oil 7,800 312
-------
2,197
-------
PROFESSIONAL SERVICES -- 1.7%
Dun & Bradstreet 9,400 544
Servicemaster LP 17,200 482
-------
1,026
-------
RAILROADS -- 0.9%
Norfolk Southern 7,600 568
-------
RETAIL -- 3.3%
American Stores 18,400 522
Circuit City Stores 15,400 487
Sears Roebuck 9,000 332
Wendy's International 31,000 655
-------
1,996
-------
RUBBER & PLASTIC -- 2.4%
Bandag 7,450 394
Premark International 9,900 504
Sonoco Products 19,425 539
-------
1,437
-------
STEEL & STEEL WORKS -- 2.4%
Asarco 15,000 473
Phelps Dodge 8,700 545
Worthington Industries 23,100 424
-------
1,442
-------
TELEPHONES & TELECOMMUNICATION -- 1.7%
Ameritech 10,800 563
Pacific Telesis Group 14,800 455
-------
1,018
-------
WHOLESALE -- 0.8%
Avnet 9,000 465
-------
TOTAL COMMON STOCK
(Cost $47,732,526) 56,230
-------
INVESTMENT COMPANY -- 3.4%
SEI Equity Index Fund 106 2,046
-------
TOTAL INVESTMENT COMPANY
(Cost $1,964,236) 2,046
-------
CASH EQUIVALENTS -- 2.5%
SEI Liquid Asset Trust Treasury Portfolio $ 1,495 1,495
-------
TOTAL CASH EQUIVALENTS
(Cost $1,494,796) 1,495
-------
</TABLE>
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
September 30, 1995
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Market
Value (000)
- -----------------------------------------------------------------------------
<S> <C>
REPURCHASE AGREEMENT -- 0.5%
UBS Securities 6.42%, dated 09/29/95, matures 10/02/95,
repurchase price $340,134 (collateralized by various U.S.
Treasury Bonds, par value $305,000, 7.875%-8.125%, 02/15/21-
05/15/21, market value: $351,000)(2) $ 340
-------
TOTAL REPURCHASE AGREEMENT
(Cost $340,054) 340
-------
TOTAL INVESTMENTS -- 99.9%
(Cost $51,531,612) 60,111
-------
OTHER ASSETS AND LIABILITIES -- 0.1%
Other Assets and Liabilities, Net 31
-------
NET ASSETS:
Fund shares of Class A (unlimited authorization -- no par value)
based on 4,982,425 outstanding shares of beneficial interest 49,803
Fund shares of Class B (unlimited authorization -- no par value)
based on 108,589 outstanding shares of beneficial interest 1,132
Accumulated net realized gain on investments 628
Net unrealized appreciation on investments 8,579
-------
TOTAL NET ASSETS -- 100.0% $60,142
=======
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- CLASS A $11.81
=======
MAXIMUM OFFERING PRICE PER SHARE -- CLASS A ($11.81/96.50%) $12.24
=======
NET ASSET VALUE AND OFFERING PRICE PER SHARE -- CLASS B(1) $11.86
=======
</TABLE>
- -----------------------------------------------------------------------------
* Non-income producing security
LP -- Limited Partnership
(1) Class B has a contingent deferred sales charge. For a description of a
possible redemption charge, see the notes to the financial statements.
(2) Tri-party repurchase agreement
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
STATEMENT OF OPERATIONS (000) MARQUIS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY LOUISIANA
INSTITUTIONAL SECURITIES GOVERNMENT TAX-FREE GROWTH AND VALUE
MONEY MARKET MONEY MARKET SECURITIES INCOME INCOME EQUITY
FUND FUND FUND FUND FUND FUND
============= ============ ========== ========== ========== ==========
8/10/95 10/1/94 10/1/94 10/1/94 10/1/94 10/1/94
TO 9/30/95 TO 9/30/95 TO 9/30/95 TO 9/30/95 TO 9/30/95 TO 9/30/95
============= ============ ========== ========== ========== ==========
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $230 $37,163 $ 6,692 $493 $ 2,332 $ 68
Dividend income -- -- -- -- 1,190 1,571
------------- ------------ ---------- ---------- ---------- ----------
Total investment income 230 37,163 6,692 493 3,522 1,639
EXPENSES:
Administration fees 4 1,293 212 19 155 100
Waiver of administration
fees -- -- -- (2) -- --
Investment advisory fees 6 1,939 582 33 573 368
Waiver of investment
advisory fees (6) (479) (149) (27) (144) (84)
Contribution by Adviser (8) -- -- -- -- --
Custodian -- 95 16 2 12 7
Transfer agent fees 2 67 35 31 35 37
Distribution fees(1) -- 463 1 4 7 5
Distribution fee
waiver(1) -- (135) -- -- -- --
Professional fees 1 71 14 1 9 6
Registration fees 11 128 8 2 2 3
Trustee fees -- 13 3 1 3 1
Printing expense -- 60 10 1 7 6
Amortization of deferred
organization costs -- 18 4 -- 2 1
Insurance and other fees -- 28 6 1 4 3
------------- ------------ ---------- ---------- ---------- ----------
Total expenses 10 3,561 742 66 665 453
------------- ------------ ---------- ---------- ---------- ----------
Net investment income 220 33,602 5,950 427 2,857 1,186
------------- ------------ ---------- ---------- ---------- ----------
Net realized gain (loss)
on securities sold -- 14 (381) (2) 1,310 1,816
Change in unrealized
appreciation on
investment securities -- -- 5,498 410 8,750 8,754
------------- ------------ ---------- ---------- ---------- ----------
Net realized and
unrealized gain on
investments -- 14 5,117 408 10,060 10,570
------------- ------------ ---------- ---------- ---------- ----------
Increase in net assets
resulting from
operations $220 $33,616 $11,067 $835 $12,917 $11,756
============= ============ ========== ========== ========== ==========
</TABLE>
(1) All distribution fees and waivers are incurred at the Retail Class level
for Treasury Securities Money Market Fund and the Class B level for Non-
Dollar funds.
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000)
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL TREASURY SECURITIES GOVERNMENT
MONEY MARKET MONEY MARKET SECURITIES
FUND FUND FUND
============= ======================== =====================
8/10/95 10/1/94 10/1/93 10/1/94 10/1/93
TO 9/30/95 TO 9/30/95 TO 9/30/94 TO 9/30/95 TO 9/30/94
------------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 220 $ 33,602 $ 16,494 $ 5,950 $ 4,538
Net realized gain
(loss) on securities
sold -- 14 -- (381) (615)
Net unrealized
appreciation
(depreciation) of
investment securities -- -- -- 5,498 (5,630)
------------- ----------- ----------- ---------- ----------
Net increase
(decrease) in net
assets resulting
from operations 220 33,616 16,494 11,067 (1,707)
------------- ----------- ----------- ---------- ----------
DISTRIBUTIONS TO
SHAREHOLDERS:
Income distribution
Class A (1) (220) (24,123) (14,494) (5,952) (4,520)
Income distribution
Class B (2) -- (9,479) (2,000) (9) (4)
------------- ----------- ----------- ---------- ----------
Total distribution (220) (33,602) (16,494) (5,961) (4,524)
------------- ----------- ----------- ---------- ----------
SHARE TRANSACTIONS:
Class A (1):
Shares issued 44,431 1,213,421 1,742,355 49,864 136,743
Shares issued in lieu
of cash distribution -- 6 3 3,352 3,255
Shares redeemed (13,117) (1,095,946) (1,338,580) (31,472) (36,212)
------------- ----------- ----------- ---------- ----------
Total Class A share
transactions 31,314 117,481 403,778 21,744 103,786
------------- ----------- ----------- ---------- ----------
Class B (2):
Shares issued -- 543,926 254,104 188 150
Shares issued in lieu
of cash distribution -- 7,587 1,999 8 4
Shares redeemed -- (355,617) (169,255) (107) --
------------- ----------- ----------- ---------- ----------
Total Class B share
transactions -- 195,896 86,848 89 154
------------- ----------- ----------- ---------- ----------
Increase in net assets
from shareholder
transactions 31,314 313,377 490,626 21,833 103,940
------------- ----------- ----------- ---------- ----------
Total increase in
net assets 31,314 313,391 490,626 26,939 97,709
------------- ----------- ----------- ---------- ----------
NET ASSETS:
Beginning of period -- 490,626 -- 97,709 --
End of period $ 31,314 $ 804,017 $ 490,626 $124,648 $ 97,709
============= =========== =========== ========== ==========
SHARES ISSUED AND
REDEEMED:
Class A (1):
Issued 44,431 1,213,421 1,742,355 5,196 13,755
Issued in lieu of
cash distribution -- 6 3 350 337
Redeemed (13,117) (1,095,946) (1,338,580) (3,303) (3,726)
------------- ----------- ----------- ---------- ----------
Total Class A share
transactions 31,314 117,481 403,778 2,243 10,366
------------- ----------- ----------- ---------- ----------
Class B (2):
Issued -- 543,926 254,104 19 15
Issued in lieu of
cash distribution -- 7,587 1,999 1 --
Redeemed -- (355,617) (169,255) (11) --
------------- ----------- ----------- ---------- ----------
Total Class B share
transactions -- 195,896 86,848 9 15
------------- ----------- ----------- ---------- ----------
Net increase in share
transactions 31,314 313,377 490,626 2,252 10,381
============= =========== =========== ========== ==========
</TABLE>
(1) Institutional Class for Treasury Securities Money Market Fund.
(2) Retail Class for Treasury Securities Money Market Fund.
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
MARQUIS FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOUISIANA GROWTH AND VALUE
TAX-FREE INCOME INCOME EQUITY
FUND FUND FUND
======================== =========================== ===========================
10/1/94 10/1/93 10/1/94 10/1/93 10/1/94 10/1/93
TO 9/30/95 TO 9/30/94 TO 9/30/95 TO 9/30/94 TO 9/30/95 TO 9/30/94
- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 427 $ 226 $ 2,857 $ 2,107 $ 1,186 $ 777
(2) (32) 1,310 (572) 1,816 (1,188)
410 (382) 8,750 (2,251) 8,754 (174)
- ---------- ---------- ---------- ---------- ---------- ----------
835 (188) 12,917 (716) 11,756 (585)
- ---------- ---------- ---------- ---------- ---------- ----------
(408) (212) (2,834) (2,088) (1,173) (776)
(20) (13) (28) (14) (12) (2)
- ---------- ---------- ---------- ---------- ---------- ----------
(428) (225) (2,862) (2,102) (1,185) (778)
- ---------- ---------- ---------- ---------- ---------- ----------
6,559 9,735 15,154 76,453 24,265 54,146
92 40 2,718 2,032 638 558
(2,306) (2,427) (12,108) (4,313) (18,386) (11,418)
- ---------- ---------- ---------- ---------- ---------- ----------
4,345 7,348 5,764 74,172 6,517 43,286
- ---------- ---------- ---------- ---------- ---------- ----------
128 628 165 903 778 444
15 9 28 13 12 2
(195) -- (46) (23) (47) (58)
- ---------- ---------- ---------- ---------- ---------- ----------
(52) 637 147 893 743 388
- ---------- ---------- ---------- ---------- ---------- ----------
4,293 7,985 5,911 75,065 7,260 43,674
- ---------- ---------- ---------- ---------- ---------- ----------
4,700 7,572 15,966 72,247 17,831 42,311
- ---------- ---------- ---------- ---------- ---------- ----------
7,572 -- 72,247 -- 42,311 --
$12,272 $ 7,572 $ 88,213 $72,247 $60,142 $ 42,311
========== ========== ========== ========== ========== ==========
683 994 1,532 7,676 2,398 5,462
10 4 268 211 61 58
(240) (255) (1,232) (442) (1,820) (1,176)
- ---------- ---------- ---------- ---------- ---------- ----------
453 743 568 7,445 639 4,344
- ---------- ---------- ---------- ---------- ---------- ----------
14 63 15 91 72 46
2 1 3 1 1 --
(21) -- (4) (2) (5) (6)
- ---------- ---------- ---------- ---------- ---------- ----------
(5) 64 14 90 68 40
- ---------- ---------- ---------- ---------- ---------- ----------
448 807 582 7,535 707 4,384
========== ========== ========== ========== ========== ==========
</TABLE>
31
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
REALIZED RATIO OF RATIO OF
AND EXPENSES NET INCOME
NET ASSET UNREALIZED DISTRIBUTIONS NET ASSET NET ASSETS RATIO OF RATIO OF TO AVERAGE TO AVERAGE
VALUE NET GAINS OR FROM NET VALUE END OF EXPENSES NET INCOME NET ASSETS NET ASSETS
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT END OF TOTAL PERIOD TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING
OF PERIOD INCOME INVESTMENTS INCOME PERIOD RETURN+ (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
--------- ---------- ----------- ------------- --------- ------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL MONEY MARKET FUND
1995(4) $1.00 $0.01 -- $(0.01) $1.00 5.55 %* $31,314 0.25%* 5.56%* 0.60%* 5.21%*
TREASURY SECURITIES MONEY MARKET FUND INSTITUTIONAL CLASS
1995 $1.00 $0.05 -- $(0.05) $1.00 5.33 % $521,270 0.50% 5.23% 0.57% 5.16%
1994 1.00 0.03 -- (0.03) 1.00 3.22 403,778 0.50 3.15 0.60 3.05
TREASURY SECURITIES MONEY MARKET FUND RETAIL CLASS
1995 $1.00 $0.05 -- $(0.05) $1.00 5.16 % $282,747 0.68% 5.12% 0.82% 4.98%
1994(1) 1.00 0.03 -- (0.03) 1.00 3.15 * 86,848 0.59 * 3.27 * 0.83 * 3.03 *
GOVERNMENT SECURITIES FUND CLASS A
1995 $9.41 $0.54 $0.46 $(0.54) $9.87 10.84 % $124,404 0.70% 5.63% 0.84% 5.49%
1994 10.00 0.43 (0.59) (0.43) 9.41 (1.66) 97,562 0.70 4.43 0.90 4.23
GOVERNMENT SECURITIES FUND CLASS B
1995 $9.46 $0.46 $0.47 $(0.47) $9.92 10.10 % $244 1.45% 4.86% 1.59% 4.72%
1994(2) 10.04 0.31 (0.58) (0.31) 9.46 (2.84) * 147 1.45 * 3.88 * 1.69 * 3.64 *
LOUISIANA TAX-FREE INCOME FUND CLASS A
1995 $9.38 $0.42 $0.41 $(0.42) $9.79 9.01 % $11,705 0.65% 4.51% 0.95% 4.21%
1994 10.00 0.36 (0.62) (0.36) 9.38 (2.68) 6,971 0.65 4.10 1.72 3.03
LOUISIANA TAX-FREE INCOME FUND CLASS B
1995 $9.39 $0.35 $0.40 $(0.35) $9.79 8.21 % $567 1.40% 3.77% 1.70% 3.47%
1994(3) 9.87 0.27 (0.48) (0.27) 9.39 (2.58) * 601 1.40 * 3.35 * 2.47 * 2.28 *
GROWTH AND INCOME FUND CLASS A
1995 $9.59 $0.37 $1.28 $(0.37) $10.87 17.58 % $87,076 0.85% 3.70% 1.04% 3.51%
1994 10.00 0.31 (0.41) (0.31) 9.59 (1.02) 71,379 0.85 3.18 1.14 2.89
GROWTH AND INCOME FUND CLASS B
1995 $9.64 $0.30 $1.29 $(0.30) $10.93 16.75 % $1,137 1.60% 2.95% 1.79% 2.76%
1994(2) 10.03 0.18 (0.39) (0.18) 9.64 (2.24) * 868 1.60 * 2.55 * 1.94 * 2.21 *
VALUE EQUITY FUND CLASS A
1995 $9.65 $0.24 $2.16 $(0.24) $11.81 25.13 % $58,854 0.90% 2.40% 1.07% 2.23%
1994 10.00 0.18 (0.35) (0.18) 9.65 (1.64) 41,922 0.90 1.95 1.17 1.68
VALUE EQUITY FUND CLASS B
1995 $9.70 $0.15 $2.17 $(0.16) $11.86 24.17 % $1,288 1.65% 1.62% 1.82% 1.45%
1994(2) 9.95 0.08 (0.25) (0.08) 9.70 (1.82) * 389 1.65 * 1.30 * 1.93 * 1.02 *
<CAPTION>
PORTFOLIO
TURNOVER
RATE
---------
<S> <C>
INSTITUTIONAL MONEY MARKET FUND
1995(4) --
TREASURY SECURITIES MONEY MARKET FUND INSTITUTIONAL CLASS
1995 --
1994 --
TREASURY SECURITIES MONEY MARKET FUND RETAIL CLASS
1995 --
1994(1) --
GOVERNMENT SECURITIES FUND CLASS A
1995 18.33%
1994 37.80
GOVERNMENT SECURITIES FUND CLASS B
1995 18.33%
1994(2) 37.80
LOUISIANA TAX-FREE INCOME FUND CLASS A
1995 2.31%
1994 30.31
LOUISIANA TAX-FREE INCOME FUND CLASS B
1995 2.31%
1994(3) 30.31
GROWTH AND INCOME FUND CLASS A
1995 55.06%
1994 64.09
GROWTH AND INCOME FUND CLASS B
1995 55.06%
1994(2) 64.09
VALUE EQUITY FUND CLASS A
1995 97.88%
1994 161.42
VALUE EQUITY FUND CLASS B
1995 97.88%
1994(2) 161.42
</TABLE>
+ Total return does not reflect sales loads on Class B and Retail Class
shares.
* Annualized.
(1) Commenced operations on October 19, 1993.
(2) Commenced operations on October 22, 1993.
(3) Commenced operations on November 22, 1993.
(4) Commenced operations on August 10, 1995.
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
NOTES TO FINANCIAL STATEMENTS MARQUIS FUNDS
- --------------------------------------------------------------------------------
September 30, 1995
1.ORGANIZATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Marquis Funds (the "Trust") was organized as a Massachusetts business
trust under a Declaration of Trust dated June 29, 1993. The Trust is registered
under the Investment Company Act of 1940, as amended, as an open-end management
company with six funds: Institutional Money Market Fund, Treasury Securities
Money Market Fund (the "Money Market Funds"), Government Securities Fund, Loui-
siana Tax-Free Income Fund, Growth and Income Fund, and Value Equity Fund (the
"Non-Dollar Funds"). The assets of each Fund are segregated, and a sharehold-
er's interest is limited to the Fund in which shares are held. The Trust is
registered to offer the following classes of shares: Institutional, Retail, and
the Cash Sweep in the Treasury Securities Money Market Fund, and Class A and
Class B in the Non-Dollar Funds. The Cash Sweep Class of the Treasury Securi-
ties Money Market Fund has not commenced operations as of September 30, 1995.
2.SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The following is a summary of the significant accounting policies followed by
the Funds.
Securities Valuation -- Investments in equity securities which are traded on a
national securities exchange (or reported on the NASDAQ national market system)
are stated at the last quoted sales price if readily available for such equity
securities on each business day; other equity securities traded in the over-
the-counter market and listed equity securities for which no sale was reported
on that date are stated at the last quoted bid price. Debt obligations exceed-
ing sixty days to maturity for which market quotations are readily available
are valued at the most recently quoted bid price. Debt obligations with sixty
days or less remaining until maturity may be valued at their amortized cost.
Under this valuation method, purchase discounts and premiums are accreted and
amortized ratably to maturity and are included in interest income. Restricted
and illiquid securities for which quotations are not readily available are val-
ued at fair value using methods determined in good faith as approved by the
Board of Trustees.
Federal Income Taxes -- It is each Fund's intention to continue to qualify as a
regulated investment company for Federal income tax purposes and to distribute
all of its taxable income and net capital gains. Accordingly, no provision for
Federal income taxes is required in the accompanying financial statements.
Security Transactions and Related Income -- Security transactions are accounted
for on the date the security is purchased or sold (trade date). Dividend income
is recognized on the ex-dividend date and interest income is recognized on the
accrual basis. Costs used in determining realized gains and losses on the sales
of investment securities are those of the specific securities sold adjusted for
the accretion and amortization of purchase discounts and premiums during the
respective holding period. Purchase discounts and premiums on securities held
by the Non-Dollar Funds are accreted and amortized to maturity using the scien-
tific interest method, which approximates the effective interest method.
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- ---------------------------------------------------------------------------
September 30, 1995
Repurchase Agreements -- Securities pledged as collateral for repurchase agree-
ments are held by the custodian bank until the respective agreements mature.
Provisions of the repurchase agreements ensure that the market value of the
collateral, including accrued interest thereon, is sufficient in the event of
default of the counterparty. The Funds also invest in tri-party repurchase
agreements. Securities held as collateral for tri-party repurchase agreements
are maintained in a segregated account by the broker's custodian bank until ma-
turity of the repurchase agreement. If the counterparty defaults and the value
of the collateral declines or if the counterparty enters an insolvency proceed-
ing, realization of the collateral by the Funds may be delayed or limited.
Net Asset Value Per Share -- The net asset value per share of each Fund is cal-
culated on each business day. In general, it is computed by dividing the assets
of each Fund, less its liabilities, by the number of outstanding shares of the
Fund.
Classes -- Class specific expenses are borne by that class. Income, expenses,
and realized and unrealized gains/losses are allocated to the respective clas-
ses on the basis of relative daily net assets.
Other -- Distributions from net investment income are declared and paid
quarterly for the Growth and Income Fund and the Value Equity Fund.
Distributions from net investment income are declared daily and paid monthly
for the Treasury Securities Money Market Fund and the Institutional Money
Market Fund. Distributions from net investment income are declared and paid
monthly for the Government Securities Fund and Louisiana Tax-Free Income Fund.
Any net realized capital gains are declared and distributed to shareholders at
least annually.
3.INVESTMENT ADVISORY, ADMINISTRATIVE, AND DISTRIBUTION AGREEMENTS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
First National Bank of Commerce in New Orleans (the "Adviser") serves as
investment adviser to each Fund pursuant to an investment advisory agreement
(the "Advisory Agreement") with the Trust. For its services, the Adviser is
entitled to a fee, which is calculated daily and paid monthly, at an annual
rate based on the average daily net assets of each Fund as follows:
Institutional Money Market Fund -- .15%, Treasury Securities Money Market
Fund -- .30%, Government Securities Fund -- .55%, Louisiana Tax-Free Income
Fund -- .35%, Growth and Income Fund -- .74%, and Value Equity Fund -- .74%.
The Adviser has voluntarily agreed to waive a portion of their fee so that
expenses of each Fund will not exceed certain annual expense limitations.
The Trust and SEI Financial Management Corporation (the "Administrator") have
entered into an Administration Agreement. Under terms of the Administration
Agreement, the Administrator is entitled to a fee calculated daily and paid
monthly at an annual rate of .10% of the average daily net assets of the Insti-
tutional Money Market Fund and .20% of the average daily net assets of the
Treasury Securities Money Market Fund, Government Securities Fund, Louisiana
Tax-Free Income Fund, Growth and Income Fund, and Value Equity Fund.
34
<PAGE>
MARQUIS FUNDS
- ---------------------------------------------------------------------------
The Trust and SEI Financial Services Company (the "Distributor") have entered
into a Distribution Agreement. As provided in certain Distribution Plans
adopted under the Distribution Agreement, the Trust will pay a fee, at an an-
nual rate of .25% of the average daily net assets of the Retail class of Trea-
sury Securities Money Market Fund and .75% of the Class B shares of the Non-
Dollar Funds to the Distributor as compensation for its services. The Distribu-
tor has agreed to waive a portion of its fee from the Treasury Securities Money
Market Fund in order to maintain a competitive expense ratio.
The Class A shares of the Non-Dollar Funds are subject to a maximum sales
load of 3.50%.
There is a contingent deferred sales charge on the Class B shares of the Non-
Dollar Funds which varies depending on the number of years from time of payment
for the purchase of shares until the time of redemption of such shares (the
"holding period"). Solely for the purpose of determining the number of years
from the time of any payment for the purchase of shares, all payments during
the month are aggregated and deemed to have been made on the first day of the
month.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES
CHARGE AS A PERCENTAGE
YEARS SINCE OF DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
=========== =========================
<S> <C>
First 3.50%
Second 2.75%
Third 2.00%
Fourth 1.25%
Fifth 0.50%
Sixth None
</TABLE>
4.ORGANIZATIONAL COSTS AND TRANSACTIONS WITH AFFILIATES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Organizational costs have been capitalized by the Funds and are being amor-
tized over sixty months commencing with operations. In the event any of the
initial shares of the Funds are redeemed by any holder thereof during the pe-
riod that the Funds are amortizing their organizational costs, the redemption
proceeds payable to the holder thereof by the Funds will be reduced by the un-
amortized organizational costs in the same ratio as the number of initial
shares being redeemed bears to the number of initial shares outstanding at the
time of redemption. These costs include legal fees of approximately $54,278 for
organizational work performed by a law firm of which an officer and a trustee
of the Trust are partners. Certain officers and trustees of the Trust who are
officers of the Administrator and the Distributor, received no compensation
from the Trust.
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- ---------------------------------------------------------------------------
September 30, 1995
5.INVESTMENT TRANSACTIONS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The cost of security purchases and the proceeds from the sale of securities,
other than short-term investments, for the period ended September 30, 1995 were
as follows:
<TABLE>
<CAPTION>
LOUISIANA GROWTH
GOVERNMENT TAX-FREE AND VALUE
SECURITIES INCOME INCOME EQUITY
FUND FUND FUND FUND
(000) (000) (000) (000)
========== ========= ======= =======
<S> <C> <C> <C> <C>
PURCHASES:
U.S. Government $23,093(a) $ -- $ 6,949 $ --
Other 1,688 4,644 40,130 54,156
SALES:
U.S. Government $ 9,641 $ -- $ 4,939 $ --
Other 8,690 203 33,126 47,478
</TABLE>
(a) Does not include $6,551,000 of securities received in exchange for shares
of the Fund.
On September 30, 1995, the total cost of securities and the net realized
gains or losses on securities sold for Federal income tax purposes was not ma-
terially different from amounts reported for financial reporting purposes. The
aggregate gross unrealized appreciation and depreciation on securities at Sep-
tember 30, 1995, for each Non-Dollar Fund is as follows:
<TABLE>
<CAPTION>
LOUISIANA GROWTH
GOVERNMENT TAX-FREE AND VALUE
SECURITIES INCOME INCOME EQUITY
FUND FUND FUND FUND
(000) (000) (000) (000)
========== ========= ======== =======
<S> <C> <C> <C> <C>
Aggregate Gross Unrealized Gain $ 1,375 $ 140 $ 7,550 $9,071
Aggregate Gross Unrealized Loss (1,507) (111) (1,051) (492)
-------- ------ -------- -------
Net Unrealized Gain (Loss) $ (132) $ 29 $ 6,499 $8,579
======== ====== ======== =======
</TABLE>
6.CONCENTRATION OF CREDIT RISK
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Institutional Money Market Fund and the Treasury Securities Money Market
Fund invest primarily in a portfolio of money market instruments maturing in
one year or less whose ratings are within the highest ratings category assigned
by a nationally recognized statistical rating agency or, if not rated, are be-
lieved to be of comparable quality. The ability of the issuers of the securi-
ties held by the Fund to meet their obligations may be affected by economic de-
velopments in a specific industry, state or region. The Government Securities
and Growth and Income Funds invest in debt instruments.
36
<PAGE>
MARQUIS FUNDS
- ---------------------------------------------------------------------------
The Louisiana Tax-Free Income Fund is more susceptible to factors adversely
affecting issuers of Louisiana municipal securities than a comparable municipal
bond fund that does not concentrate its investments in Louisiana municipal se-
curities.
The following table presents a summary of holdings in the Government Securi-
ties and Louisiana Tax-Free Income Funds as of September 30, 1995.
<TABLE>
<CAPTION>
LOUISIANA
GOVERNMENT TAX-FREE
SECURITIES INCOME
RATING/SECURITY CATEGORY FUND FUND
======================== ========== =========
<S> <C> <C>
U.S. Government Security 88.45% --
AAA 3.46% 82.02%
AA -- --
A 2.46% 2.87%
Not Rated 5.63% 15.11%
</TABLE>
The above percentages are stated as a percentage of total investments. U.S.
Government Securities represent obligations issued or guaranteed by the U.S.
Government and its agencies or instrumentalities. Repurchase agreements are
collateralized by U.S. Government Securities and are included in Not Rated
above.
7.CAPITAL LOSS CARRYFORWARDS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Funds had capital losses carryforwards at September 30, 1995, to the ex-
tent provided in the regulations for Federal Income Tax as follows:
<TABLE>
<CAPTION>
POST
CAPITAL LOSS OCTOBER 31,
CARRYFORWARD 1994
SEPTEMBER 30, 1995, DEFERRED
FUNDS EXPIRES 2003 LOSSES
===== =================== ===========
<S> <C> <C>
Government Securities Fund $679,660 $316,663
Louisiana Tax-Free Income Fund 32,125 2,083
</TABLE>
For tax purposes, the losses in the Funds can be carried forward for a maxi-
mum of eight years to offset any net realized capital gains.
37
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- ----------------------------------------------------------------------
To the Shareholders and Trustees of the Marquis Funds:
We have audited the accompanying statements of net assets of the Institutional
Money Market, Treasury Securities Money Market, Government Securities,
Louisiana Tax-Free Income, Growth and Income and Value Equity Funds of the
Marquis Funds as of September 30, 1995, and the related statements of
operations, changes in net assets and financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Institutional Money Market, Treasury Securities Money Market, Government
Securities, Louisiana Tax-Free Income, Growth and Income and Value Equity Funds
of the Marquis Funds as of September 30, 1995, the results of their operations,
changes in their net assets, and financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.
November 6, 1995
38
<PAGE>
NOTICE TO SHAREHOLDERS (UNAUDITED)
- ----------------------------------------------------------------------
FOR TAXPAYERS FILING ON A CALENDAR YEAR BASIS. THIS NOTICE IS FOR INFORMATIONAL
PURPOSES ONLY.
Dear Marquis Funds' Shareholders:
For the fiscal year ended September 30, 1995, each Fund is designating
qualifying dividends and exempt income with regard to distributions paid during
the year as follows:
<TABLE>
<CAPTION>
ORDINARY
INCOME
DISTRIBUTIONS QUALIFYING TAX-EXEMPT
FUNDS (TAX BASIS)* DIVIDENDS(1)** INTEREST**
===== ============= ============== ==========
<S> <C> <C> <C>
Institutional Money Market Fund 100% 0% 0%
Treasury Securities Money Market Fund 100% 0% 0%
Government Securities Fund 100% 0% 0%
Louisiana Tax-Free Income Fund 100% 0% 100%
Growth and Income Fund 100% 29% 0%
Value Equity Fund 100% 81% 0%
</TABLE>
- -------
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction.
* Ordinary income items are based on a percentage of the Fund's total
distributions.
** Qualifying dividends and Tax-Exempt Interest are based on a percentage of
ordinary income distributions of the Fund.
Please consult your tax advisor for proper treatment of this information.
39
