[MARQUIS LOGO]
ANNUAL REPORT
SEPTEMBER 30, 1996
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TABLE OF CONTENTS
LETTER TO SHAREHOLDERS ....................................................... 1
INVESTMENT ADVISER'S REPORT .................................................. 2
MANAGEMENT'S DISCUSSION & ANALYSIS OF FUND PERFORMANCE ....................... 6
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS .....................................15
STATEMENT OF NET ASSETS ......................................................16
STATEMENT OF OPERATIONS ......................................................42
STATEMENT OF CHANGES IN NET ASSETS ...........................................44
FINANCIAL HIGHLIGHTS .........................................................46
NOTES TO FINANCIAL STATEMENTS ................................................52
NOTICE TO SHAREHOLDERS .......................................................58
FUND PORTFOLIOS TRADING SYMBOL
MONEY MARKET FUNDS RETAIL TRUST
Treasury Securities Money Market Fund ..... MQRXX MQTXX
Tax Exempt Money Market Fund ...... MQEXX
FIXED INCOME FUNDS A SHARES B SHARES
Government Securities Fund ................ MQGAX MFGSB
Louisiana Tax-Free Income Fund .... MQLAX MFLTF
BALANCED FUNDS
Balanced Fund ............................. MQIAX MFGIB
EQUITY FUNDS
Value Equity Fund ................. MQVAX MFVEB
Growth Equity Fund ................ XNEUX XNEVX
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[MARQUIS LOGO]
SEPTEMBER 30, 1996
LETTER TO SHAREHOLDERS
DEAR SHAREHOLDER:
As we celebrate the third full year of operation of the Marquis Funds, we are
gratified by the progress that has been made, and by the tremendous reception
that our funds have received from you, our shareholders.
Since this time last year, our collective assets under management have
grown by 39%, from $1.12 billion on September 30, 1995 to $1.56 billion on
September 30, 1996. At the same time, our fund family has expanded to include
the Growth Equity Fund and the Tax Exempt Money Market Fund, which add important
new dimensions to our stock fund and money market fund categories.
As we continue to grow, we remain committed to the three fundamental
principles that have guided the Marquis Funds from the beginning. In brief,
these principles are:
(BULLET) HIGH QUALITY: Because we believe that investment risk can be moderated
through prudent management, we continually pursue a quality-oriented approach
throughout our fund family. This approach is evident in the rating of our
Treasury Securities Money Market Fund, which again has earned the highest rating
available, AAAm, from Standard & Poor's. And, it is also evident in the hundreds
of day-to-day investment decisions that are detailed in this report.
(BULLET) HIGH STANDARDS: While our funds are only three years old, they are part
of a tradition of excellence that dates back more than 70 years. As such, they
are managed by experienced professionals who employ rigorous investment
analysis, using the latest tools available.
(BULLET) HIGHLY PERSONAL: We never forget that the ultimate purpose of our funds
is to help people live better, more prosperous lives. Therefore, we have
developed a family of funds that have the diversity to help satisfy a wide range
of investment needs. We have also worked to ensure that each Marquis Funds
shareholder receives individual guidance toward their unique financial goals.
As you will see in the following pages, these principles have led to strong
results throughout our fund family in fiscal year 1996. Looking ahead, we
believe that the markets will continue to reward those who maintain a long-term
approach to investing.
We thank you for sharing in that belief, and we look forward to continuing
to serve your investment needs in the years ahead.
Sincerely,
/S/Clifton J. Saik
Clifton J. Saik
Executive Vice President
First National Bank of Commerce
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INVESTMENT ADVISER'S REPORT
Dear Shareholder:
Fiscal 1996 has become known as the year of the "Goldilocks" recovery, that is,
a period in which the economy was not too hot, and not too cold. And while not
everything was "just right," those who invested in stock, bond, and money market
funds can be satisfied that their returns generally outpaced the rate of
inflation, and that any "bears" were of the gentle, fairy tale variety.
In fact, the most serious threat of the year was indeed a fantasy, existing only
in the minds of fixed income investors who feared an interest rate hike by the
Federal Reserve Board. But as we will explain shortly, that hike simply never
appeared.
[PHOTO]
JOHN C. PORTWOOD, CFA
CHIEF TRUST INVESTMENT STRATEGIST
For the Marquis Funds, fiscal 1996 was one of good portfolio performance, a
growing investor base, and substantial increases in assets. In addition, it
marked the introduction of two important new portfolios.
The Growth Equity Fund, introduced in March 1996, seeks to provide long-term
capital appreciation. This fund provides an excellent counterpoint to our
existing Value Equity Fund, since growth-oriented stocks and value-oriented
stocks tend to alternate between periods of market leadership.
The Growth Equity Fund uses a disciplined analytical process to seek
[GRAPHIC OMITTED]
A line graph depicting the interest rate growth of the Consumer Price Index, the
10 Year U.S. Treasury Yield, and the 30 Year U.S. Treasury Yield from October 1,
1995 through September 30, 1996.
DURING FISCAL 1996, INTEREST RATES ROSE (AS INDICATED BY THE YIELDS ON TREASURY
SECURITIES) DESPITE A STABLE RATE OF INFLATION (AS MEASURED BY THE CONSUMER
PRICE INDEX). SOURCE: BLOOMBERG
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[MARQUIS LOGO]
SEPTEMBER 30, 1996
stocks that have strong earnings momentum and a high likelihood of meeting or
exceeding growth estimates in the future. Consequently, these stocks may have
high valuations relative to their current earnings. For example, growth-style
stocks may include those in such dynamic industries as electronic technology,
computers, health care, and consumer non-durables.
By contrast, the Value Equity Fund seeks to invest in securities that are
currently "out of favor," and therefore have low prices relative to their
earnings, book value, or dividends. Value-style stocks tend to be in such
industries as finance, utilities, and energy.
Our other new portfolio is the Tax Exempt Money Market Fund, which was
introduced in June 1996, and seeks to provide current income exempt from federal
income taxes. This fund has already met with strong demand from individual and
institutional investors seeking a stable source of tax-free income in
conjunction with instant liquidity and relative price stability.
Like all Marquis Funds portfolios, these new family members will adhere to a
disciplined investment approach that emphasizes quality, value, and a commitment
to remaining fully invested at all times. We believe that this approach is
responsible for our success thus far, and will continue to prove its value in
the years ahead.
ECONOMIC OVERVIEW
At the end of fiscal 1995, we expressed the belief that inflation would remain
moderate in the year ahead. This proved to be the case, notwithstanding the
constant fear of inflation that caused turmoil in the bond markets.
During the second quarter of the calendar year 1996, the economy surged at an
annual rate of 4.7 percent. Had this continued throughout the following
quarters, the Federal Reserve Board (the "Fed") would have been justified in
taking action. However, just one quarter later, the economy had cooled to a rate
of just over 2 percent, providing no convincing case for a rise in rates. As a
result, the Fed held steady.
This relatively lackluster growth took place against a backdrop of controlled
economic activity overall, with the Consumer Price Index and Producer Price
Index well behaved, unemployment steady at around 5.6 percent, wages under
control, and corporate earnings rising moderately.
In fact, not since the 1950s have economic conditions been so well-balanced. And
going forward, we see more of the same. We can only hope that in the coming year
the bond market will have greater confidence in the facts, and pay less
attention to irrational fears.
On the international front, some economists have expressed concern that a
synchronized recovery in the United States, Europe, and Asia would put pressure
on global interest rates and allow prices to rise. However, Europe's major
economies remain
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INVESTMENT ADVISER'S REPORT (CONTINUED)
sluggish due to already high rates, and the United States and Japan are both
entrenched in moderate-growth patterns. Therefore, we are not likely to see a
significant surge in imports or a strong increase in worldwide price levels.
STOCK MARKET OVERVIEW
With corporate earnings growing and money pouring into the market, stocks
performed well overall, with the S&P 500 Index rising 17.6 percent for the
fiscal year. While this was well below the spectacular gains of the previous
year, it stands as a very solid performance by historical standards.
The market's gains are even more impressive in view of the relatively high
valuations at the start of the fiscal year. In fact, the best-performing sector
was growth stocks, whose lofty price/earnings ratios were pushed even higher,
while value-oriented stocks remained somewhat out of favor.
Two major factors helped fuel this ongoing rally. One was the relatively low
level of interest rates, which made stocks more attractive than bonds. Another
was the continued flow of funds into the markets from aging "baby boomers," who
have been funding retirement plans at an unprecedented pace and making stocks
their investment of choice.
To some degree, this second factor is cause for concern, because many of these
investors are relatively new to the market and have not yet experienced the type
of strong correction that last occurred in 1990. It remains to be seen whether
they will have the perspective to weather a bear market, or will quickly exit at
the first sign of an extended decline.
Another cautionary factor for stocks is the continued pressure on corporate
pricing due to fierce competition in virtually all industries. Despite an
unprecedented five years of economic expansion, corporations find they are
unable to increase prices, and must therefore employ other methods of boosting
bottom-line performance, such as cost-cutting and downsizing. With most excesses
already squeezed from many companies, profit growth will most likely be modest,
at best, in the year ahead.
[GRAPHIC OMITTED]
A line graph depicting the growth of the S&P 500 Composite Stock Index from
September 1993 through September 1996.
IN THE THREE YEARS SINCE THE MARQUIS FUNDS BEGAN, THE STOCK MARKET, AS MEASURED
BY THE S&P 500 INDEX, HAS RISEN DRAMATICALLY. SOURCE: BLOOMBERG
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SEPTEMBER 30, 1996
BOND MARKET OVERVIEW
As discussed earlier, bonds were continually battered by unfounded fears of
inflation and higher interest rates. The mere perception of an overheated
economy was enough to send market rates higher, dampening what might otherwise
have been an excellent year for bonds.
Long-term bonds were hardest hit, due to their greater vulnerability to interest
rate fluctuations. The bellwether 30-year Treasury Bond ended the fiscal year at
a rate of 6.92 percent, having begun the year at 6.51 percent. Intermediate
bonds, which tend to be less volatile in rising-rate environments, were more
stable.
MONEY MARKET OVERVIEW
For the second time in three years, money market investments outperformed bonds
as a group. As a result, money market investors enjoyed positive returns well in
excess of the rate of inflation, with very little risk to principal. Money
market investments continue to look attractive in the year ahead, as short-term
rates show little sign of retreating.
OUTLOOK FOR FISCAL 1997
Currently, our economic indicators point toward lower interest rates in the year
ahead, which bodes well for fixed income investments. Economic growth will most
likely remain at a moderate pace, with a good chance of a slowdown or even a
mild recession along the way.
In this environment, we believe that investors should not be complacent, and
should perhaps adopt a more defensive strategy that allows them to take
advantage of potential advances in stocks, but also provides some protection in
the form of bond or money market investments.
In our own Balanced Fund, for example, the ratio of stocks to bonds is currently
at 50/50, compared to a possible 80/20 split. This indicates a cautious,
although still optimistic, outlook on our part.
We also believe that investors should continue to approach the markets with a
long-term perspective, viewing any declines as opportunities to build their
positions for the future. Those who have done so in the past have been well
rewarded for their patience and discipline. One need only look to the three
years of the Marquis Funds' existence to see evidence of how quickly a negative
environment can give way to historic gains.
Sincerely,
/S/John C. Portwood
John C. Portwood, CFA
Chief Trust Investment Strategist
First National Bank of Commerce
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MANAGEMENT'S DISCUSSION & ANALYSIS OF FUND PERFORMANCE
TREASURY SECURITIES MONEY MARKET FUND
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For the twelve months ended September 30, 1996, the Treasury Securities Money
Market Fund generated a total return of 5.06% for Trust shares, and 4.86% for
Retail shares from which a 12b(1) charge is deducted. This compares to a 4.87%
return for the IBC/Donoghue U.S. Treasury and Repo Index. The Fund's net assets
increased from $804 million to $1,048 million over the fiscal year.
The Fund's competitive return was the result of strategies that took advantage
of interest rate fluctuations during the year. These included the lengthening of
portfolio maturities prior to dips in short-term rates, and the shortening of
maturities when rates appeared ready to move higher once again. Composition of
the portfolio during the year was weighted toward U.S. Treasury Repurchase
Agreements, which provided incrementally higher yields than U.S. Treasury issues
without compromising our high standards for quality and liquidity.
Looking ahead, our forecasts indicate that rates on taxable money market
securties will continue to move within a relatively narrow range, providing
positive returns in excess of the rate of inflation.
TAX EXEMPT MONEY MARKET FUND
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From its inception on June 7, 1996 to September 30, 1996, the Tax Exempt Money
Market Fund generated an annualized total return of 2.83%. This compares to a
3.08% return for the IBC/Donoghue Tax-Free Index. The Fund's net assets
increased to $66 million over the fiscal year.
In the relatively brief period of the Fund's existence, rates on tax-free money
market security moved in a fairly broad range, driven by large inflows of cash
during July and large outflows of cash during September. With a need to invest
our own incoming cash on an as-received basis, the Fund mirrored the market's
movements fairly closely.
Looking ahead, we see a continued strong demand for high-quality tax-free
issues. In the absence of any action on short-term rates by the Federal Reserve
Board, this should keep rates relatively close to their current levels in the
months to come.
[PHOTO]
Picture of Michele M. LeBlanc, Vice President, Marquis Investments with Gerald
S. Dugal, Vice President, First NBC, Trust and Investments
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[MARQUIS LOGO]
SEPTEMBER 30 ,1996
GOVERNMENT SECURITIES FUND
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For the twelve months ended September 30, 1996, the Government Securities Fund
generated a total return of 4.10% for Class A shares without a sales load, 0.44%
for Class A shares from which a sales charge has been deducted, and 3.23% for
Class B shares without a sales load. This compares to a 5.10% return for the
Lehman Intermediate Government Bond Index. The Fund's net assets increased from
$124.2 million to $160.4 million over the fiscal year.
The Fund's holdings, which consist primarily of obligations issued or guaranteed
as to principal and interest by the the U.S. Government and its agencies or
instrumentalities, ended the fiscal year with an average weighted maturity of
5.5 years, and an average duration of 4.2 years.
The Fund's good overall performance during a volatile year is attributable to
portfolio adjustments that sought to take advantage of weaknesses in the
markets.
After an exceptionally robust year in fiscal 1995, the bond market began to
retreat in the second quarter of fiscal 1996. The continued strength of the
economy alarmed many fixed income investors, and each report of good news led to
immediate speculation that the Federal Reserve Board would take action to curb
inflation. While this action never materialized, the effect on the market was
upward pressure on interest rates, which frequently drove bond prices downward.
To mitigate the impact of rising rates, the Fund's duration was kept relatively
short during the early
[GRAPH]
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE GOVERNMENT
SECURITIES FUND VERSUS THE LEHMAN INTERMEDIATE GOVERNMENT BOND INDEX,
AND THE LIPPER INTERMEDIATE U.S. GOVERNMENT AVERAGE
(Class A) A line graph depciting 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 1, 1993 through
September 30, 1996 as compared with the growth of $10,000 investment in the
Lehman Intermediate Government Bond Index, and the Lipper Intermediate U.S.
Government Funds Average.
<TABLE>
Initial Investment Date 10/93 12/93 3/94 6/94 9/94 12/94 3/95 6/95 11/95 12/95 3/96 6/96 9/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Marquis Gov't. Sec.
Inc. Fund, Cl A $10,000 $9,998 $9,810 $9,749 $9,814 $9,807 $10,239 $10,708 $10,879 $11,195 $11,099 $11,132 $11,325
Marquis Gov't. Sec.
Inc. A, with load $9,650 $9,648 $9,467 $9,408 $9,471 $9,464 $9,881 $10,333 $10,499 $10,803 $10,710 $10,742 $10,929
Lehman Intermed. Gov't.
Bond Index $10,000 $9,992 $9,807 $9,752 $9,826 $9,817 $10,226 $10,704 $10,870 $11,234 $11,157 $11,233 $11,426
Lipper Intermed.
Gov't. Average $10,000 $9,960 $9,708 $9,582 $9,615 $9,606 $10,007 $10,505 $10,668 $11,060 $10,873 $10,896 $11,066
</TABLE>
(Class B) A line graph depciting 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 22, 1993 through
September 30, 1996 as compared with the growth of $10,000 investment in the
Lehman Intermediate Government Bond Index, and the Lipper Intermediate U.S.
Government Funds Average.
<TABLE>
Initial Investment Date 10/93 12/93 3/94 6/94 9/94 12/94 3/95 6/95 11/95 12/95 3/96 6/96 9/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Marquis Gov't. Sec.
Inc. Fund, Cl B $10,000 $9,982 $9,775 $9,698 $9,755 $9,731 $10,139 $10,582 $10,740 $11,029 $10,906 $10,918 $11,087
Marquis Gov't. Sec.
Inc. B, with load $10,000 $9,982 $9,775 $9,698 $9,755 $9,731 $10,139 $10,582 $10,740 $11,029 $10,906 $10,918 $10,892
Lehman Intermed. Gov't.
Bond Index $10,000 $9,992 $9,807 $9,752 $9,826 $9,817 $10,226 $10,704 $10,870 $11,234 $11,157 $11,233 $11,426
Lipper Intermed.
Gov't. Average $10,000 $9,960 $9,708 $9,582 $9,615 $9,606 $10,007 $10,505 $10,668 $11,060 $10,873 $10,896 $11,066
</TABLE>
AVERAGE ANNUAL RETURN
CLASS OF SHARES ONE YEAR RETURN INCEPTION TO DATE
- --------------- ------------------------ ------------------------
WITH LOAD WITHOUT LOAD WITH LOAD WITHOUT LOAD
------------------------ ------------------------
CLASS A 0.44% 4.10% 3.09% 4.31%
CLASS B -0.27% 3.23% 2.87% 3.49%
For the period ended September 30, 1996.
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 front end sales charge of 3.50%. Performance of the
Class B shares reflects the maximum contingent deferred sales charge of 2.00%
for the three year holding period. The performance of the Lehman Brothers
Intermediate Government Bond Index and the Lipper Intermediate U.S. Government
Funds Average does not include annual operating expenses which are experienced
by the Fund.
CONTINUED
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7
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MANAGEMENT'S DISCUSSION & ANALYSIS OF FUND PERFORMANCE (CONT.)
months of the fiscal year, and then lengthened to take advantage of increased
yield opportunities. In addition, the proportion of newer-issue mortgage- backed
securities was increased in order to capture yields in the range of 7.5% to 8%.
At the same time, the Fund's exposure to lower-yielding, short-term Treasury
issues was reduced.
This strategy proved successful in boosting the Fund's performance for the year
without compromising credit quality. And as new concerns of economic weakness
brought falling rates during the fourth quarter of the fiscal year, the Fund was
well-positioned to deliver relatively high yields along with a degree of price
appreciation.
Looking ahead, we believe that both inflation and economic growth will remain
under control, despite occasional pressure from rising wages. As a result, we
expect the environment to be favorable for high-quality fixed income
investments.
However, we also believe the market will remain sensitive to even the hint of
rising inflation, and that rates will climb at any threat of action by the Fed.
We will continue to view any such occurrences as buying opportunities, and may
use them to further extend the duration of the portfolio in pursuit of
incremental yields.
LOUISIANA TAX-FREE INCOME FUND
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For the twelve months ended September 30, 1996, the Louisiana Tax-Free Income
Fund generated a total return of 4.48% for Class A shares without a sales load,
0.87% for Class A shares from which a sales charge has been deducted, and 3.60%
for Class B shares without a sales load. This compares to a 4.31% return for the
Lipper Intermediate Municipal Fund Index and a 6.04% return for the Lehman
Municipal Bond Index. The Fund's net assets increased from $12.3 million to
$21.6 million over the fiscal year.
The Fund's holdings, consisting primarily of securities which are exempt from
federal and state income tax to Louisiana residents, ended the fiscal year with
an average weighted maturity of 10.5 years, an average duration of 7.7 years,
and a weighted average quality rating of AAA.
The portfolio's good overall performance is attributable in part to the
opportunistic use of cash
[PHOTO]
Picture of Kevin P. Reed, Senior Vice President, First NBC, Trust and
Investments with Robert V. Brown, Vice President, Marquis Investments
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[MARQUIS LOGO]
SEPTEMBER 30, 1996
inflows at key periods during the year. For example, a sizeable inflow of new
investment during the tax season of the third fiscal quarter was used to take
advantage of higher prevailing market rates. By purchasing longer-term issues
and effectively increasing the portfolio's duration, we were able to lock in
higher yields.
This theme was repeated throughout the year, as new cash was used to extend the
portfolio's maturity and duration during periods of rising interest rates --
always maintaining our bias toward issues of the highest quality.
Looking ahead, we believe that the forecast is very positive for the municipal
securities market. Concerns about so-called "flat tax" legislation have abated
and supplies of high-quality issues remain limited. And even though we can
expect an increase in new issues due to the current lower prevailing rates, we
believe that most municipalities are concerned about overextending themselves
with debt. Therefore, we don't expect the volumes of supply that would push
prices downward.
These trends point to continued strong performance for municipal securities, and
we look forward to another year of tax-free total returns in excess of the
current rate of inflation.
[GRAPH]
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE LOUISIANA
TAX-FREE INCOME FUND, VERSUS THE LEHMAN MUNICIPAL BOND INDEX,
AND THE LIPPER INTERMEDIATE MUNICIPAL FUND INDEX
(Class A) A line graph depciting 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 1, 1993 through
September 30, 1996 as compared with the growth of $10,000 investment in the
Lehman Intermediate Government Bond Index, and the Lipper Intermediate U.S.
Government Funds Average.
<TABLE>
Initial Investment Date 10/93 12/93 3/94 6/94 9/94 12/94 3/95 6/95 11/95 12/95 3/96 6/96 9/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Marquis LA Tax-Free
Income, Cl A $10,000 $10,111 $9,564 $9,663 $9,719 $9,553 $10,138 $10,316 $10,596 $10,930 $10,822 $10,821 $11,069
Marquis LA Tax-Free
A, with load $9,650 $9,757 $9,229 $9,325 $9,379 $9,219 $9,783 $9,955 $10,225 $10,548 $10,443 $10,442 $10,682
Lehman Municipal
Bond Index $10,000 $10,121 $9,565 $9,672 $9,737 $9,597 $10,276 $10,523 $10,826 $11,273 $11,136 $11,222 $11,480
Lipper Intermediate
Muni Fund Index $10,000 $10,102 $9,709 $9,798 $9,856 $9,746 $10,231 $10,461 $10,712 $10,999 $10,939 $10,983 $11,173
</TABLE>
(Class B) A line graph depciting 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 22, 1993 through
September 30, 1996 as compared with the growth of $10,000 investment in the
Lehman Intermediate Government Bond Index, and the Lipper Intermediate U.S.
Government Funds Average.
<TABLE>
Initial Investment Date 11/93 12/93 3/94 6/94 9/94 12/94 3/95 6/95 11/95 12/95 3/96 6/96 9/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Marquis LA Tax-Free
Income, Cl B $10,000 $10,201 $9,642 $9,714 $9,753 $9,569 $10,136 $10,295 $10,554 $10,857 $10,741 $10,709 $10,934
Marquis LA Tax-Free
B, with load $10,000 $10,201 $9,642 $9,714 $9,753 $9,569 $10,136 $10,295 $10,554 $10,857 $10,741 $10,709 $10,736
Lehman Municipal
Bond Index $10,000 $10,211 $9,650 $9,758 $9,824 $9,682 $10,367 $10,617 $10,923 $11,373 $11,235 $11,321 $11,582
Lipper Intermediate
Muni Fund Index $10,000 $10,164 $9,769 $9,858 $9,917 $9,806 $10,294 $10,526 $10,778 $11,067 $11,006 $11,050 $11,241
</TABLE>
AVERAGE ANNUAL RETURN
CLASS OF SHARES ONE YEAR RETURN INCEPTION TO DATE
- --------------- ------------------------ ------------------------
WITH LOAD WITHOUT LOAD WITH LOAD WITHOUT LOAD
------------------------ ------------------------
CLASS A 0.87% 4.48% 2.28% 3.50%
CLASS B 0.10% 3.60% 2.62% 3.27%
For the period ended September 30, 1996.
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 front end sales charge of 3.50%. Performance of the Class B
shares reflects the maximum contingent deferred sales charge of 2.00% for the
three year holding period. The performance of the Lehman Brothers Municipal Bond
Index and the Lipper Intermediate Municipal Debt Funds Average does not include
annual operating expenses which are experienced by the Fund.
CONTINUED
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9
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MANAGEMENT'S DISCUSSION & ANALYSIS OF FUND PERFORMANCE (CONT.)
BALANCED FUND
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For the twelve months ended September 30, 1996, the Balanced Fund generated a
total return of 9.11% for Class A shares without a sales load, 5.34% for Class A
shares from which a sales charge has been deducted, and 8.30% for Class B shares
without a sales load. This compares to a 12.46% return for the Lipper Balanced
Funds Average, a 20.32% return for the S&P 500 Composite Index, and a 5.10%
return for the Lehman Intermediate Government Bond Index. The Fund's net assets
increased from $87.5 million to $116.2 million over the fiscal year.
The Fund's fixed income holdings, consisting primarily of intermediate-term
government and investment grade corporate bonds, ended the fiscal year with an
average weighted maturity of 6.3 years, and an average duration of 4.6 years.
For most of the year, the Fund maintained a relatively defensive position, with
approximately 50% of the portfolio in bonds and 50% in stocks. This ratio
reflected our belief that the economy would generate only modest growth rates,
and that interest rates would hold steady. For the most part, this forecast
proved to be correct, although the equity markets surged beyond levels that one
would expect during a slow-growth economy.
The bond portion of the Fund produced modest gains, as fixed income investments
were continually rocked by fears of inflation and the threat of action by the
Federal Reserve Board. Even though no action was taken, market interest rates
dampened any possibility of strong returns.
[GRAPH]
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE BALANCED
FUND VERSUS THE S&P 500 COMPOSITE INDEX, THE LEHMAN INTERMEDIATE
GOVERNMENT BOND INDEX, THE WILSHIRE MID-CAP VALUE INDEX,
AND THE LIPPER BALANCED FUNDS AVERAGE
(Class A) A line graph depciting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Marquis Balanced Fund, Class A from October 1, 1993 through September 30, 1996
as compared with the growth of $10,000 investment in the S&P 500 Composite
Index, Lehman Intermediate Government Bond Index, the Wilshire Mid-Cap Value
Index, and the Lipper Balanced Funds Average.
<TABLE>
Initial Investment Date 10/93 12/93 3/94 6/94 9/94 12/94 3/95 6/95 11/95 12/95 3/96 6/96 9/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Marquis Balanced Fund
Class A $10,000 $9,987 $9,752 $9,679 $9,859 $9,804 $10,365 $11,049 $11,594 $12,051 $12,274 $12,345 $12,650
Marquis Balanced A,
with load $9,650 $9,638 $9,410 $9,341 $9,515 $9,461 $10,002 $10,663 $11,188 $11,629 $11,844 $11,913 $12,207
S&P 500 Composite
Index $10,000 $10,025 $9,645 $9,685 $10,158 $10,156 $11,145 $12,208 $13,179 $13,972 $14,721 $15,381 $15,856
Lehman Intermediate
Gov't. Bond Index $10,000 $9,992 $9,807 $9,752 $9,826 $9,817 $10,226 $10,704 $10,870 $11,234 $11,157 $11,233 $11,426
Wilshire Mid-Cap
Value Index $10,000 $9,852 $9,605 $9,576 $9,870 $9,583 $10,343 $11,307 $12,469 $13,145 $13,612 $13,638 $13,824
Lipper Balanced
Funds Average $10,000 $10,033 $9,712 $9,601 $9,878 $9,774 $10,379 $11,130 $11,748 $12,243 $12,562 $12,862 $13,212
</TABLE>
(Class B) A line graph depciting the total growth (including reinvestment of
dividends and capital gains) of a hypothetical investment of $10,000 in the
Marquis Balanced Fund, Class B from October 22, 1993 through September 30, 1996
as compared with the growth of $10,000 investment in the S&P 500 Composite
Index, Lehman Intermediate Government Bond Index, the Wilshire Mid-Cap Value
Index, and the Lipper Balanced Funds Average.
<TABLE>
Initial Investment Date 10/93 12/93 3/94 6/94 9/94 12/94 3/95 6/95 11/95 12/95 3/96 6/96 9/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Marquis Balanced Fund
Class A $10,000 $9,971 $9,726 $9,634 $9,789 $9,716 $10,251 $10,914 $11,428 $11,854 $12,052 $12,102 $12,377
Marquis Balanced A,
with load $10,000 $9,971 $9,726 $9,634 $9,789 $9,716 $10,251 $10,914 $11,428 $11,854 $12,052 $12,102 $12,177
S&P 500 Composite
Index $10,000 $10,025 $9,645 $9,685 $10,158 $10,156 $11,145 $12,208 $13,179 $13,972 $14,721 $15,381 $15,856
Lehman Intermediate
Gov't. Bond Index $10,000 $9,992 $9,807 $9,752 $9,826 $9,817 $10,226 $10,704 $10,870 $11,234 $11,157 $11,233 $11,426
Wilshire Mid-Cap
Value Index $10,000 $9,852 $9,605 $9,576 $9,870 $9,583 $10,343 $11,307 $12,469 $13,145 $13,612 $13,638 $13,824
Lipper Balanced
Funds Average $10,000 $10,033 $9,712 $9,601 $9,878 $9,774 $10,379 $11,130 $11,748 $12,243 $12,562 $12,862 $13,212
</TABLE>
AVERAGE ANNUAL RETURN
CLASS OF SHARES ONE YEAR RETURN INCEPTION TO DATE
- --------------- ------------------------ ------------------------
WITH LOAD WITHOUT LOAD WITH LOAD WITHOUT LOAD
------------------------ ------------------------
CLASS A 5.34% 9.11% 7.03% 8.30%
CLASS B 4.80% 8.30% 6.93% 7.53%
For the period ended September 30, 1996.
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 2.00% for the three
year holding period. The performance of the S&P 500 Composite Index, the Lehman
Brothers Intermediate Government Bond Index, the Wilshire Mid-Cap Value Index,
and the Lipper Balanced Funds Average does not include annual operating expenses
which are experienced by the Fund.
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
The stock portion of the Balanced Fund, which pursues a strategy that combines
value and growth issues, with a value emphasis, also produced positive results,
although not as robust as those of the overall market. This is primarily due to
the current market bias toward growth-oriented issues.
In keeping with our relatively defensive outlook, the stock portfolio was
weighted strongly toward utility and finance issues, which offer a combination
of dividend income, low price/earnings ratios, and appreciation potential. Among
the better performers in this area were Bank of America and First Bank System,
both of which have appreciated by more than 40% since date of purchase.
Among the portfolio's growth-oriented issues, the top performer for the year was
Nike, which more than tripled in value since it was purchased.
Looking ahead, we believe the Balanced Fund is well positioned for a period when
the equity markets are near all-time record levels. The value orientation on the
equity side should provide a cushion against any correction in the stock market,
since issues with lower price/earnings ratios tend to have less downside
potential. And if interest rates should fall in the year ahead, the fixed income
side of the fund may provide a combination of income and price appreciation.
Of course, a sharp rise in rates could be detrimental to both stocks and bonds,
but we currently see no evidence that such a rise is imminent. Therefore, we
plan to retain the Fund's overall configuration unless there is a significant
change in economic or market conditions.
VALUE EQUITY FUND
- --------------------------------------------------------------------------------
For the twelve months ended September 30, 1996, the Value Equity Fund generated
a total return of 13.38% for Class A shares without a sales load, 9.40% for
Class A shares from which a sales charge has been deducted, and 12.49% for Class
B shares without a sales load. This compares to a 10.87% return for the Wilshire
Mid-Cap Value Index. The Fund's net assets increased from $59.9 million to $97.3
million over the fiscal year.
During fiscal 1996, the value stock category produced modest gains overall, but
was eclipsed by stronger performances by growth-oriented stocks. This growth
orientation is typical of an extended bull market, and should not discourage
value investors, since history has shown that the value sector tends to
marginally outperform the growth sector over long periods of time.
The Fund began the fiscal year by selling many of its economically sensitive
issues, such as those in the manufacturing, technology, and process industry
sectors, based on signs of weakness in key economic indicators.
These issues were replaced by a number of financial services stocks, which
produced strong gains during the remainder of the year. Among the better
performers in this group were the brokerage firm of Alex Brown & Sons, banking
giant Citicorp, and student loan underwriter SLMA ("Sallie Mae"). In addition,
the Fund added several utility stocks which, although currently out of favor,
continue to demonstrate strong fundamentals.
CONTINUED
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION & ANALYSIS OF FUND PERFORMANCE (CONT.)
[PHOTO]
Picture of Greg L. Hodlewsky, Vice President, First NBC, Trust and
Investments with O. Morgan Hall Jr., Investment Counsultant, Marquis Investments
Looking ahead, we believe that value stocks will continue to provide
satisfactory results in the coming year, based on their ability to deliver
above-average dividend yields and the potential for appreciation. What's more,
we believe that the low price/earnings multiples of value-oriented issues may
provide downside protection during market corrections.
[GRAPH]
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE VALUE
EQUITY FUND VERSUS THE S&P 500 COMPOSITE INDEX, THE WILSHIRE MID-CAP
VALUE INDEX, AND THE LIPPER EQUITY INCOME AVERAGE
(Class A) 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 1, 1993 through September 30,
1996 as compared with the growth of $10,000 investment in the S&P 500 Composite
Index, the Wilshire Mid-Cap Value Index, and the Lipper Equity Income Average.
<TABLE>
Initial Investment Date 10/93 12/93 3/94 6/94 9/94 12/94 3/95 6/95 11/95 12/95 3/96 6/96 9/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Marquis Value Equity
Fund, Class A $10,000 $9,859 $9,562 $9,498 $9,847 $9,702 $10,472 $11,404 $12,321 $12,921 $13,536 $13,703 $13,970
Marquis Value Equity A,
with load $9,650 $9,514 $9,227 $9,166 $9,502 $9,362 $10,106 $11,005 $11,890 $12,469 $13,062 $13,223 $13,481
S&P 500 Composite
Index $10,000 $10,025 $9,645 $9,685 $10,158 $10,156 $11,145 $12,208 $13,179 $13,972 $14,721 $15,381 $15,856
Wilshire Mid-Cap
Value Index $10,000 $9,852 $9,605 $9,576 $9,870 $9,583 $10,343 $11,307 $12,469 $13,145 $13,612 $13,638 $13,824
Lipper Equity Income
Average $10,000 $10,001 $9,632 $9,675 $10,064 $9,809 $10,568 $11,264 $12,091 $12,795 $13,392 $13,775 $14,142
</TABLE>
(Class B) 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 B from October 22, 1993 through September 30,
1996 as compared with the growth of $10,000 investment the S&P 500 Composite
Index, the Wilshire Mid-Cap Value Index, and the Lipper Equity Income Average.
<TABLE>
Initial Investment Date 10/93 12/93 3/94 6/94 9/94 12/94 3/95 6/95 11/95 12/95 3/96 6/96 9/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Marquis Value Equity
Fund, Class A $10,000 $9,856 $9,534 $9,454 $9,789 $9,618 $10,372 $11,273 $12,156 $12,724 $13,307 $13,448 $13,674
Marquis Value Equity A,
with load $10,000 $9,856 $9,534 $9,454 $9,789 $9,618 $10,372 $11,273 $12,156 $12,724 $13,307 $13,448 $13,474
S&P 500 Composite
Index $10,000 $10,025 $9,645 $9,685 $10,158 $10,156 $11,145 $12,208 $13,179 $13,972 $14,721 $15,381 $15,856
Wilshire Mid-Cap
Value Index $10,000 $9,852 $9,605 $9,576 $9,870 $9,583 $10,343 $11,307 $12,469 $13,145 $13,612 $13,638 $13,824
Lipper Equity Income
Average $10,000 $10,001 $9,632 $9,675 $10,064 $9,809 $10,568 $11,264 $12,091 $12,795 $13,392 $13,775 $14,142
</TABLE>
CLASS OF SHARES ONE YEAR RETURN INCEPTION TO DATE
- --------------- ------------------------ ------------------------
WITH LOAD WITHOUT LOAD WITH LOAD WITHOUT LOAD
------------------------ ------------------------
CLASS A 9.40% 13.38% 10.45% 11.76%
CLASS B 8.99% 12.49% 10.83% 11.38%
For the period ended September 30, 1996.
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 2.00% for the three
year holding period. The performance of the S&P 500 Composite Index, the
Wilshire Mid-Cap Value Index, and the Lipper Equity Income Average does not
include annual operating expenses which are experienced by the Fund.
- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
GROWTH EQUITY FUND
- --------------------------------------------------------------------------------
From its inception on March 1, 1996 to September 30, 1996, the Growth Equity
Fund generated a total return of 10.46% for Class A shares without a sales load,
and 6.59% for Class A shares from which a sales charge has been deducted. The
Class B shares, which were offered beginning April 19, 1996, generated a total
return of 4.16% for the period ending September 30, 1996. This compares to a
10.79% return for the S&P/Barra Growth Index during the same period. The Fund's
net assets ended the fiscal year at $18.5 million.
The Fund entered the market during a particularly strong period for
growth-oriented investments, as investors continued to favor such industries as
technology and telecommunications -- often to a degree that defied all rational
definitions of value.
While steering clear of issues with excessively high price/earnings ratios, the
Fund participated actively in the technology sector, which continues to benefit
from strong demand for new products. Ironically, part of this demand is owed to
the lackluster nature of the economy, which has led many corporations to
automate key functions in order to reduce staffing levels.
Among the technology holdings showing particularly strong performance during the
period were personal computer manufacturers Compaq Corporation and Gateway 2000,
and software producer BMC Software.
[GRAPH]
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE GROWTH
EQUITY FUND VERSUS THE S&P/BARRA GROWTH INDEX, AND THE LIPPER
GROWTH FUNDS AVERAGE
(Class A) 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 Equity Fund, Class A from March 1, 1996 through
September 30, 1996 as compared with the growth of $10,000 investment in the
S&P/BARRA Growth Index, and the Lipper Growth Funds Average.
Initial Investment Date 3/96 6/96 9/96
Marquis Growth Equity
Fund, Class A $10,000 $10,496 $10,966
Marquis Growth Equity A,
with load $9,650 $10,191 $10,647
S&P/BARRA Growth Index $10,000 $10,570 $10,942
Lipper Growth Funds
Average $10,000 $10,609 $10,917
(Class B) 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 Equity Fund, Class B from April 19, 1996 through September 30,
1996 as compared with the growth of $10,000 investment in the S&P/BARRA Growth
Index, and the Lipper Growth Funds Average.
Initial Investment Date 4/96 6/96 9/96
Marquis Growth Equity
Fund, Class B $10,000 $10,232 $10,658
Marquis Growth Equity B,
with load $10,000 $10,232 $10,308
S&P/BARRA Growth Index $10,000 $10,498 $10,867
Lipper Growth Funds
Average $10,000 $10,117 $10,691
<TABLE>
<CAPTION>
CUMULATIVE
CLASS OF SHARES ONE MONTH RETURN THREE MONTH RETURN INCEPTION TO DATE
- --------------- ------------------------ ------------------------ ------------------------
WITH LOAD WITHOUT LOAD WITH LOAD WITHOUT LOAD WITH LOAD WITHOUT LOAD
------------------------ ------------------------ ------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A 2.80% 6.50% 0.83% 4.48% 6.59% 10.46%
CLASS B 2.86% 6.36% 0.66% 4.16% 4.98% 8.48%
</TABLE>
For the period ended September 30, 1996.
Past performance of the Fund is not predictive of future performance. Class A
shares were offered beginning March 1, 1996. Class B shares were offered
beginning April 19, 1996. 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 3.50% for the one
year holding period. The performance of the S&P/BARRA Growth Index and the
Lipper Growth Fund Average does not include annual operating exepenses which
are experienced by the Fund.
CONTINUED
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION & ANALYSIS OF FUND PERFORMANCE (CONT.)
Other sectors held by the Fund during the period included healthcare,
manufacturing, and consumer nondurables.
Looking ahead, we believe that the Fund will continue to benefit from the
momentum in growth-oriented issues, as sentiment remains bullish and funds
continue to flow into the market. Other positive signs include the ever-growing
interest in Internet-related issues and other technology stocks, which continue
to set the pace for the market.
Potential negatives ahead include the possibility that the much-anticipated
economic slowdown will finally materialize in the coming year. If so, it could
be exacerbated by an overlooked demographic trend, that is, the emergence of the
so-called "baby bust" generation, which now dominates the young-adult age
bracket. With fewer and often less-affluent people in this key age group, which
traditionally is a prime market for housing and related products, demand for a
number of durable and non-durable consumer products could begin to weaken. This
factor, along with other potential drags on the economy, could continue to put
downward pressure on prices and corporate profits.
For the moment, however, most signs point to the type of environment that favors
growth companies and their investors.
- --------------------------------------------------------------------------------
14
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
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, Tax Exempt Money Market,
Government Securities, Louisiana Tax-Free Income, Balanced, Value Equity and
Growth Equity Funds of the Marquis Funds (the "Trust") as of September 30, 1996,
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 Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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, 1996, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Institutional Money Market, Treasury Securities Money Market, Tax Exempt Money
Market, Government Securities, Louisiana Tax-Free Income, Balanced, Value Equity
and Growth Equity Funds of the Marquis Funds as of September 30, 1996, 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 13, 1996
- --------------------------------------------------------------------------------
15
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
INSTITUTIONAL MONEY MARKET FUND
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
U.S. TREASURY OBLIGATIONS -- 30.8%
================================================================================
U.S. Treasury Bills
4.865%, 10/17/96 $ 750 $ 748
4.790%, 11/14/96 1,000 994
5.030%, 12/12/96 1,000 990
5.240%, 12/12/96 500 495
5.050%, 01/09/97 1,000 986
5.090%, 01/16/97 1,000 985
5.085%, 02/06/97 500 491
5.370%, 04/03/97 500 486
5.215%, 05/29/97 500 483
5.480%, 06/26/97 1,000 959
U.S. Treasury Notes
6.625%, 03/31/97 500 503
6.500%, 04/30/97 500 502
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $8,622) 8,622
--------
================================================================================
REPURCHASE AGREEMENTS -- 69.6%
================================================================================
Deutsche Bank
5.720%, dated 09/30/96, matures
10/01/96, repurchase price
$1,000,000 (collateralized by
U.S. Treasury STRIPS, par value
$1,071,000, 0.000%, 08/15/97,
market value: $1,020,000)(1) 1,000 1,000
Morgan Stanley
5.700%, dated 09/30/96, matures
10/01/96, repurchase price
$1,001,000 (collateralized by
U.S. Treasury Note, par value
$990,000, 8.125%, 02/15/98,
market value: $1,028,000)(1) 1,001 1,001
Lehman Brothers
5.700%, dated 09/30/96, matures
10/01/96, repurchase price
$5,001,000 (collateralized by
U. S. Treasury STRIPS, par value
$27,250,000, 0.000%, 05/15/20,
market value: $5,101,000) 5,000 5,000
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
REPURCHASE AGREEMENTS (CONTINUED)
================================================================================
Aubrey G. Lanston
5.600%, dated 09/30/96, matures
10/01/96, repurchase price
$1,400,000 (collateralized by
U.S. Treasury Note, par value
$1,406,000, 6.125%, 12/31/96,
market value: $1,431,000) $1,400 $ 1,400
HSBC
5.700%, dated 09/30/96, matures
10/01/96, repurchase price
$1,400,000 (collateralized by
U.S. Treasury STRIPS, par value
$1,585,000, 0.000%, 05/15/98,
market value: $1,441,000) 1,400 1,400
J. P. Morgan
5.700%, dated 09/30/96, matures
10/01/96, repurchase price
$5,301,000 (collateralized by
U.S. Treasury STRIPS, par value
$5,684,000, 0.000%, 08/15/97,
market value: $5,419,000) 5,300 5,300
Lehman Brothers
5.750%, dated 09/30/96, matures
10/01/96, repurchase price
$989,000 (collateralized by
U.S. Treasury Note, par value
$4,710,000, 9.125%, 05/15/18,
market value: $1,010,000)(1) 989 989
Merrill Lynch
5.600%, dated 09/30/96, matures
10/01/96, repurchase price
$1,001,000 (collateralized by
U.S. Treasury STRIPS, par value
$3,560,000, 0.000%, 05/15/14,
market value: $1,021,000)(1) 1,001 1,001
UBS Securities
5.720%, dated 09/30/96, matures
10/01/96, repurchase price
$1,000,000 (collateralized by
U.S. Treasury Note, par value
$1,005,000, 6.000%, 05/31/98,
market value: $1,025,000)(1) 1,000 1,000
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
16
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
INSTITUTIONAL MONEY MARKET FUND (CONCLUDED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
REPURCHASE AGREEMENTS (CONTINUED)
================================================================================
Wachovia
5.750%, dated 09/30/96, matures
10/01/96, repurchase price
$1,400,000 (collateralized by
U.S. Treasury Note, par value
$1,385,000, 6.500%, 04/30/97,
market value: $1,430,000) $1,400 $ 1,400
TOTAL REPURCHASE AGREEMENTS
(Cost $19,491) 19,491
--------
TOTAL INVESTMENTS -- 100.4%
(Cost $28,113) 28,113
--------
OTHER ASSETS AND LIABILITIES, NET -- (0.4%) (109)
--------
================================================================================
NET ASSETS:
================================================================================
Fund Shares (unlimited authorization --
no par value) based on 28,003,782
outstanding shares of beneficial
interest 28,004
--------
TOTAL NET ASSETS-- 100.0% $28,004
--------
--------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $1.00
--------
--------
- --------------------------------------------------------------------------------
STRIPS -- SEPARATE TRADING OF REGISTERED INTEREST AND PRINCIPAL SECURITIES
(1) TRI-PARTY REPURCHASE AGREEMENT
TREASURY SECURITIES MONEY MARKET FUND
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
U.S. TREASURY OBLIGATIONS -- 21.9%
================================================================================
U.S. Treasury Bills
5.030%, 10/17/96 $ 25,000 $ 24,944
5.135%, 10/17/96 15,000 14,966
4.840%, 11/14/96 25,000 24,852
4.820%, 12/12/96 25,000 24,759
5.080%, 01/09/97 25,000 24,647
5.090%, 01/16/97 15,000 14,773
5.085%, 02/06/97 25,000 24,548
5.205%, 02/06/97 550 540
4.860%, 03/06/97 25,000 24,473
5.350%, 05/01/97 575 557
U.S. Treasury Notes
6.625%, 03/31/97 25,000 25,126
6.500%, 04/30/97 25,000 25,118
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $229,303) 229,303
----------
================================================================================
REPURCHASE AGREEMENTS -- 78.3%
================================================================================
Deutsche Bank
5.720%, dated 09/30/96, matures
10/01/96, repurchase price
$50,134,000 (collateralized by
various U.S. Treasury obligations,
par value $62,189,000, 0.000%-
11.750%, 03/06/97-02/15/10,
market value: $51,129,000) (1) 50,126 50,126
Morgan Stanley
5.700%, dated 09/30/96, matures
10/01/96, repurchase price
$3,002,000 (collateralized by
U.S. Treasury Note, par value
$3,065,000, 5.750%, 10/31/00,
market value: $3,069,000) (1) 3,001 3,001
Lehman Brothers
5.700%, dated 09/30/96, matures
10/01/96, repurchase price
$200,032,000 (collateralized by
various U.S. Treasury STRIPS,
par value $754,605,000, 0.000%,
12/31/97-11/15/18, market value:
$204,056,000) 200,000 200,000
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
TREASURY SECURITIES MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
REPURCHASE AGREEMENTS (CONTINUED)
================================================================================
Aubrey G. Lanston
5.600%, dated 09/30/96, matures
10/01/96, repurchase price
$50,008,000 (collateralized by
U.S. Treasury Note, par value
$48,980,000, 7.375%, 11/15/97,
market value: $51,131,000) $ 50,000 $ 50,000
HSBC
5.700%, dated 09/30/96, matures
10/01/96, repurchase price $50,008,000
(collateralized by various U.S.
Treasury STRIPS, par value $97,390,000,
0.000%, 05/15/06, market value:
$51,025,000) 50,000 50,000
J. P. Morgan
5.700%, dated 09/30/96, matures
10/01/96, repurchase price $230,036,000
(collateralized by various U.S.
Treasury STRIPS, par value
$680,433,000, 0.000%, 11/15/97-
02/15/25, market value:
$680,543,000) 230,000 230,000
Lehman Brothers
5.750%, dated 09/30/96, matures
10/01/96, repurchase price
$50,008,000 (collateralized by
various U.S. Treasury STRIPS,
par value $128,700,000, 0.000%,
08/15/09-05/15/10, market value:
$51,001,000) (1) 50,000 50,000
Merrill Lynch
5.600%, dated 09/30/96, matures
10/01/96, repurchase price $40,382,000
(collateralized by U.S. Treasury
STRIPS, par value
$143,560,000, 0.000%, 05/15/14,
market value: $41,184,000) (1) 40,376 40,376
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
REPURCHASE AGREEMENTS (CONTINUED)
================================================================================
Prudential Securities
5.690%, dated 09/30/96, matures
10/01/96, repurchase price $48,008,000
(collateralized by various U.S.
Treasury obligations, par value
$42,836,000, 5.125%- 12.000%,
04/30/98-08/15/13, market value:
$48,960,000) (1) $48,000$ 48,000
UBS STRIPS
5.720%, dated 09/30/96, matures
10/01/96, repurchase price
$50,512,000 (collateralized by
U.S. Treasury Note, par value
$50,520,000, 6.000%, 05/31/98,
market value: $51,515,000) (1) 50,504 50,504
Wachovia
5.750%, dated 09/30/96, matures
10/01/96, repurchase price
$50,008,000 (collateralized by
U.S. Treasury Note, par value
$49,515,000, 6.500%, 04/30/97,
market value: $51,132,000) 50,000 50,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $822,007) 822,007
----------
TOTAL INVESTMENTS -- 100.2%
(Cost $1,051,310) 1,051,310
----------
OTHER ASSETS AND LIABILITIES,
NET -- (0.2%) (2,423)
----------
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------------
18
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
TREASURY SECURITIES MONEY MARKET FUND (CONCLUDED)
- --------------------------------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
NET ASSETS:
======================================================================
Fund Shares of Trust Class (unlimited
authorization -- no par value) based
on 637,803,269 outstanding shares of
beneficial interest $ 637,803
Fund Shares of Retail Class (unlimited
authorization -- no par value) based
on 411,061,657 outstanding shares of
beneficial interest 411,062
Accumulated net realized gain on investments 22
----------
TOTAL NET ASSETS -- 100.0% $1,048,887
----------
----------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- TRUST CLASS $1.00
----------
----------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- RETAIL CLASS $1.00
----------
----------
- --------------------------------------------------------------------------------
STRIPS -- SEPARATE TRADING OF REGISTERED INTEREST AND PRINCIPAL SECURITIES
(1) TRI-PARTY REPURCHASE AGREEMENT
TAX EXEMPT MONEY MARKET FUND
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS -- 99.7%
================================================================================
ALABAMA -- 2.8%
Montgomery BMC Special Care
Facilities Finance Authority, Baptist
Medical Center, Ser A VRDN,
RB (A) (B) (C)
3.900%, 08/01/20 $1,845 $ 1,845
--------
ARIZONA -- 3.8%
Tuscon Industrial Development
Authority, Tuscon City Center
Parking, VRDN, RB (A) (B) (C)
3.925%, 06/01/15 2,200 2,200
Yavapai County, Arizona Industrial
Development Authority Kachina
Pointe Project (A)
3.800%, 01/01/09 300 300
--------
2,500
--------
ARKANSAS -- 2.1%
Little Rock Southwest Hospital, Ser 88,
VRDN, RB (A) (B) (C)
3.675%, 10/01/18 800 800
Little Rock Unified School District, TRAN
3.850%, 12/30/96 595 595
--------
1,395
--------
CALIFORNIA -- 9.2%
California Higher Education Authority
Student Loan, RB (A)
3.950%, 06/01/01 750 750
California State, Ser 1996-1997, RAN
4.500%, 06/30/97 2,500 2,510
Los Angeles, California Department
of Airports, Ser B RB
7.200%, 05/01/01 1,300 1,350
Ravenswood California City School
District, TRAN
4.500%, 07/08/97 500 502
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
19
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
TAX EXEMPT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
CALIFORNIA (CONTINUED)
San Bernadino County, Alta Loma
Heritage Project, Ser A, VRDN,
RB (A) (B) (C)
3.625%, 02/01/23 $1,000 $ 1,000
--------
6,112
--------
COLORADO -- 5.9%
Colorado Housing Finance Authority,
Cambray Park Project, VRDN,
RB (A) (B) (C)
3.950%, 05/01/15 400 400
Colorado Multi-Family Housing
Authority, Hamphen and Estes
Project, VRDN (A) (B) (C)
3.700%, 12/01/05 950 950
Denver City & County, Ogden
Residence Project, VRDN,
RB (A) (B) (C)
4.000%, 12/01/09 1,095 1,095
Woodstream, Colorado Colorado
Housing Financial Authority (A)
3.950%, 06/01/05 1,450 1,450
--------
3,895
--------
DISTRICT OF COLUMBIA -- 1.5%
District of Columbia, Ser B-1, VRDN,
RB (A) (B) (C)
4.050%, 06/01/03 400 400
District of Columbia, Ser B-2, VRDN,
RB (A) (B) (C)
4.050%, 06/01/03 225 225
Washington, DC, George Washington
University (A)
4.000%, 03/01/06 350 350
--------
975
--------
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
FLORIDA -- 5.2%
Brevard County Housing Finance
Authority, Park Village & Malobar
Lakes Project, VRDN, RB (A)
3.950%, 12/01/10 $ 600 $ 600
Broward County, Housing Finance
Authority, Lake Park Association (A)
3.900%, 12/01/10 700 700
Florida Housing Finance Agency,
Lakeside South Association,
VRDN, RB (A)
3.925%, 08/01/06 600 600
Jacksonville University Hospital Center
Project,VRDN, RB (A) (B) (C)
4.000%, 02/01/19 600 600
Suwannee County Florida Advent
Christian Project (A)
3.950%, 10/01/19 975 975
--------
3,475
--------
GEORGIA -- 4.1%
DeKalb County, Camden Brook Project,
VRDN, RB (A) (B) (C)
3.850%, 06/15/25 500 500
DeKalb County, Wood Terrace
Apartments Project, VRDN,
RB (A) (B) (C)
3.850%, 12/15/15 2,210 2,210
--------
2,710
--------
IDAHO -- 0.6%
University of Idaho, Student Fee
Telecommunications, RB (FSA)
4.100%, 04/01/97 400 400
--------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
20
<PAGE>
TAX EXEMPT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
ILLINOIS -- 14.1%
Chicago Multi-Family Housing Authority,
Waveland Project B, VRDN, RB (A)
(B) (C)
3.850%, 11/01/10 $ 125 $ 125
Chicago Multi-Family Housing Authority,
Waveland Project F, VRDN, RB (A)
(B) (C)
3.850%, 11/01/10 2,600 2,600
Chicago Park District, Ser A, TAW
5.000%, 10/30/96 2,000 2,002
Chicago, Illinois (A)
4.000%, 12/01/17 1,000 1,000
Illinois Development Financial Authority
3.950%, 09/01/26 (A) 1,000 1,000
Illinois Health Facility Authority,
Lutheran Institution, Ser C,
RB (A) (B) (C)
3.500%, 04/01/15 2,000 2,000
Orland Hills Mortgage Authority,
Ser 1988-A, VRDN, RB (A) (B) (C)
3.850%, 12/01/04 600 600
--------
9,327
--------
INDIANA -- 3.0%
Fort Wayne, Educational Development
Authority, Georgetown PL Venture,
VRDN, RB (A) (B) (C)
3.900%, 12/01/15 2,000 2,000
--------
IOWA -- 0.3%
Iowa Finance Authority Small Business
Revenue, Ser A (A)
3.800%, 11/01/15 200 200
--------
KANSAS -- 0.9%
Topeka Multi-Family Housing Revenue,
Ser 85, VRDN, RB (A) (B)
3.725%, 01/01/09 600 600
--------
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
KENTUCKY -- 0.8%
Covington Industrial Building,
Atkins & Pearce Inc., Ser 1995,
VRDN, RB (A) (B) (C)
3.850%, 04/01/05 $ 500 $ 500
--------
LOUISIANA -- 2.8%
Calcasieu Parish, Sales Tax District,
Ser #4-A, VRDN, RB (A)
3.850%, 09/01/01 350 350
East Baton Rouge, Louisiana
3.850%, 10/01/26 1,000 1,000
New Orleans Industrial Development
Board, Spectrum Control Technology,
RB (A) (B) (C)
3.850%, 03/01/07 500 500
--------
1,850
--------
MARYLAND -- 0.9%
Maryland Health & Higher Education
Facilities Authority, Kennedy
Krieger, VRDN, RB (A) (B) (C)
3.850%, 07/01/23 600 600
--------
MICHIGAN -- 1.7%
Michigan State Job Development
Authority, Gordon Food Service
Project (A)
3.800%, 08/01/15 1,000 1,000
Michigan State Job Development
Authority, Pollution Control Revenue
Mazda Motor Manufacturing,
RB (A) (B) (C)
3.875%, 10/01/08 125 125
--------
1,125
--------
MINNESOTA -- 3.7%
Minneapolis, Minnesota, Commerce At
Centre VLG Project, Ser 1996
4.000%, 09/01/97 715 715
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
21
<PAGE>
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
TAX EXEMPT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
MINNESOTA (CONTINUED)
St. Paul, Minnesota Housing &
Redevelopment Authority District
Heating, Ser A, RB (A)
4.000%, 12/01/12 $1,750 $ 1,750
--------
2,465
--------
MISSOURI -- 1.8%
Missouri State Health & Educational
Facilities Authority, Health Care,
VRDN, RB (MBIA) (A) (B) (C)
3.900%, 06/01/22 1,200 1,200
--------
NEVADA -- 0.2%
Henderson, Public Improvement
Trust, Pueblo Verde I+II Apartment
Project, Ser 1995a/95b #1071,
VRDN, RB (A) (B) (C)
3.900%, 08/01/26 100 100
--------
NORTH CAROLINA -- 1.4%
North Carolina Medical Care
Community, Hospital Revenue
Pooled Finance Project, VRDN,
RB (A) (B) (C)
3.850%, 10/01/16 600 600
Winston Salem, VRDN (A) (B) (C)
3.800%, 08/01/01 300 300
--------
900
--------
OHIO -- 3.7%
Bellevue, Ohio, Bellevue Hospital
Project, RB (A)
3.950%, 03/01/97 225 225
Cleveland Waterworks Revenue,
Ser E, RB (MBIA)
7.750%, 01/01/07 750 772
North Olmsted, BAN
4.600%, 12/19/96 750 751
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
OHIO (CONTINUED)
Village of Canal Winchester, Ohio, BAN
4.500%, 08/13/97 $ 700 $ 702
--------
2,450
--------
OKLAHOMA -- 3.8%
Oklahoma City Industrial Development
Authority, Baptist General Convention
Refunding, Ser 89, RB (A) (B) (C)
3.850%, 03/01/09 600 600
Oklahoma City, University City Project,
Ser 85, VRDN, RB (A) (B) (C)
4.050%, 08/01/15 600 600
Oklahoma State Water Reserve Board
State Loan Program Revenue (A)
3.700%, 09/01/24 500 500
Tulsa City, Oklahoma, Industrial
Authority Health Care, Laureate
Psychiatric Project, VRDN, RB (A)
3.850%, 12/15/08 645 645
Yukon, Oklahoma, Municipal Authority
Sales Tax & Utility System,
RB (AMBAC)
4.200%, 06/01/97 180 180
--------
2,525
--------
PENNSYLVANIA -- 12.7%
Allegheny County Children's Hospital
of Pittsburgh, Ser 85B (MBIA) (A)
3.750%, 12/01/15 600 600
Delaware County, Pennsylvania
Industrial Development Authority,
Scott Paper Company Project,
Ser A, RB
3.800%, 12/01/18 500 500
Delaware Valley, Regional Finance
Authority (A) (C)
3.950%, 08/01/16 2,100 2,100
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------------
22
<PAGE>
- -------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
TAX EXEMPT MONEY MARKET FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
PENNSYLVANIA (CONTINUED)
Montgomery County Higher
Education & Health Facility
Authority, Higher Education &
Loan, Ser 96-A, VRDN, RB (A) (B) (C)
3.900%, 06/01/21 $2,500 $ 2,500
Pennsylvania State Higher Education
Facility, Allegheny College Project,
VRDN, RB (A) (B) (C)
3.950%, 11/01/26 2,200 2,200
Philadelphia School District, TRAN
4.500%, 06/30/97 500 502
--------
8,402
--------
TENNESSEE -- 2.0%
Franklin County, Tennessee, Health &
Education Facilities Board
University of South Sewanee Credit
Enhancement Project, RB (A)
3.750%, 09/01/10 350 350
Jefferson County Industrial
Development (A)
4.000%, 04/01/98 1,000 1,000
--------
1,350
--------
TEXAS -- 1.2%
Corpus Christi,Texas, Texas Industrial
Development Authority Air Inventory
Project (A)
3.766%, 02/01/97 105 105
Keller, Texas Independent School
District, GO
8.250%, 08/01/97 500 517
Maury County,Tennessee Hillview
Health Care Center Ser 86 (A)
3.850%, 06/01/04 155 155
--------
777
--------
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
UTAH -- 1.7%
Salt Lake City, Industrial Development
Authority, Park View Plaza Project,
VRDN, RB (A) (B) (C)
4.060%, 12/01/14 $ 300 $ 300
West Valley, Utah, Industrial Development
Authority, Johnson Matthey Project,
RB (A)
4.100%, 11/01/11 800 800
--------
1,100
--------
VIRGINIA -- 3.9%
Fairfax County,Virginia, Industrial
Development Authority, Fairfax
Hospital, Ser A (A)
3.900%, 10/01/25 1,300 1,300
Virginia State Housing Development
Authority, AHC Services Corps, Ser A,
VRDN, RB (A) (B) (C)
3.900%, 09/01/17 1,300 1,300
--------
2,600
--------
WASHINGTON -- 0.6%
Washington State Housing Finance
Community, Nonprofit Housing
YMCA, Snobonish County Project,
VRDN, RB (A) (B) (C)
4.100%, 08/01/19 415 415
--------
WEST VIRGINIA -- 0.9%
Charleston Community Parking Facility
Revenue, VRDN, RB (A) (B) (C)
4.000%, 12/01/16 600 600
--------
WISCONSIN -- 2.4%
Indian Hill,Wisconsin, Maple Dale
School District, TRAN
4.190%, 08/20/97 600 600
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
23
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
TAX EXEMPT MONEY MARKET FUND (CONCLUDED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
================================================================================
WISCONSIN (CONTINUED)
Kettle, Wisconsin, Moraine School
District, TRAN
4.010%, 08/22/97 $ 500 $ 500
Tomah Area School District, Wisconsin
TRAN
4.190%, 09/17/97 500 500
--------
1,600
--------
TOTAL MUNICIPAL BONDS
(Cost $65,993) 65,993
--------
TOTAL INVESTMENTS -- 99.7%
(Cost $65,993) 65,993
--------
OTHER ASSETS AND LIABILITIES, NET -- 0.3% 221
--------
================================================================================
NET ASSETS:
================================================================================
Fund Shares (unlimited authorization -- no par
value) based on 66,214,023 outstanding
shares of beneficial interest 66,214
--------
TOTAL NET ASSETS -- 100.0% $66,214
--------
--------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $1.00
--------
--------
- --------------------------------------------------------------------------------
(A) VARIABLE RATE INSTRUMENT. THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON SEPTEMBER 30, 1996.
(B) PUT AND DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY DATE SHOWN IS THE LESSER OF THE
PUT DATE OR THE MATURITY DATE.
(C) SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT OR OTHER CREDIT
SUPPORT.
BAN -- BOND ANTICIPATION NOTE
GO -- GENERAL OBLIGATION
RAN -- REVENUE ANTICIPATION NOTE
RB -- REVENUE BOND
SER-- SERIES
TAW -- TAX ANTICIPATION WARRANT
TRAN -- TAX AND REVENUE ANTICIPATION NOTE
VRDN -- VARIABLE RATE DEMAND NOTE
THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT SUPPORT FOR CERTAIN
SECURITIES AS DEFINED IN THE STATEMENT OF NET ASSETS:
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
FSA -- FINANCIAL SECURITY ASSURANCE
MBIA -- MUNICIPAL BOND INSURANCE ASSOCIATION
GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 9.3%
================================================================================
FFCB
7.510%, 02/13/98 $ 250 $ 255
8.650%, 10/01/99 255 270
FHLB
5.370%, 11/03/00 500 477
7.500%, 08/10/04 500 519
FHLMC
6.300%, 03/15/03 135 130
6.280%, 07/15/03 250 239
7.930%, 01/20/05 250 266
FICO STRIPS
0.000%, 10/05/05 180 96
0.000%, 12/27/05 334 174
0.000%, 10/06/06 500 245
0.000%, 11/11/06 1,000 487
0.000%, 12/27/06 500 241
Farmer MAC
7.560%, 05/28/02 500 521
FNMA
9.550%, 12/10/97 1,075 1,119
9.150%, 04/10/98 1,175 1,225
9.550%, 03/10/99 255 273
7.000%, 08/12/02 250 248
5.875%, 02/02/06 5,000 4,635
SBA
Ser 1988-10-C
9.350%, 07/01/98 19 19
TVA
6.250%, 08/01/99 400 397
8.375%, 10/01/99 2,900 3,052
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $15,353) 14,888
----------
================================================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 37.9%
================================================================================
FHLMC CMO
7.500%, 11/15/01 4,350 4,450
6.700%, 05/15/05 1,925 1,905
7.000%, 09/15/07 3,425 3,263
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
24
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
GOVERNMENT SECURITIES FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (CONTINUED)
================================================================================
FHLMC CMO (CONTINUED)
6.500%, 04/15/08 $4,850 $ 4,461
7.750%, 01/15/20 1,784 1,804
9.000%, 04/15/20 788 780
FHLMC
7.000%, 04/01/00 31 31
9.000%, 11/01/05 952 992
9.000%, 05/01/06 1,497 1,561
7.250%, 05/01/07 62 62
9.000%, 08/01/09 809 838
9.000%, 12/01/09 1,238 1,293
6.500%, 11/15/22 5,000 4,671
FNMA REMIC
9.150%, 08/25/03 365 370
7.350%, 06/25/07 2,000 1,919
6.250%, 10/25/22 108 106
FNMA STRIPS
Zero Coupon, Callable 11/22/96
@ 100, 11/22/01 2,500 2,477
FNMA
8.500%, 03/01/98 147 151
7.000%, 09/01/07 3,540 3,498
6.250%, 01/25/09 1,000 939
GNMA
10.500%, 06/15/98 10 10
10.500%, 09/15/98 2 2
6.500%, 07/15/08 1,284 1,248
6.500%, 03/15/09 121 118
6.500%, 05/15/09 3,197 3,108
9.000%, 07/15/16 580 609
9.000%, 09/15/16 338 355
9.000%, 10/15/16 111 117
9.000%, 11/15/16 304 320
9.500%, 08/15/17 567 608
10.000%, 04/15/19 205 224
10.000%, 05/15/19 58 64
9.500%, 12/15/19 381 409
7.500%, 06/15/23 4,289 4,236
7.000%, 03/15/24 2,438 2,348
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (CONTINUED)
================================================================================
GNMA (CONTINUED)
7.000%, 04/15/24 $ 2,994 $ 2,883
8.500%, 10/15/24 1,555 1,601
8.000%, 07/15/25 2,323 2,346
7.000%, 01/15/26 4,939 4,755
----------
TOTAL U.S. GOVERNMENT MORTGAGE-
BACKED OBLIGATIONS
(Cost $62,404) 60,932
----------
================================================================================
U.S. TREASURY OBLIGATIONS -- 41.7%
================================================================================
Treasury LINCS
6.000%, 08/15/09 2,500 2,256
U.S Treasury Notes
8.500%, 04/15/97 2,750 2,793
6.500%, 04/30/97 1,450 1,458
6.875%, 04/30/97 6,350 6,399
8.500%, 07/15/97 1,500 1,531
6.500%, 08/15/97 2,500 2,514
8.625%, 08/15/97 925 947
5.125%, 04/30/98 1,800 1,776
9.000%, 05/15/98 1,425 1,489
5.125%, 06/30/98 2,500 2,462
9.250%, 08/15/98 2,425 2,557
6.375%, 01/15/99 1,500 1,507
7.125%, 09/30/99 3,000 3,067
6.000%, 10/15/99 1,500 1,489
7.875%, 11/15/99 1,300 1,356
8.500%, 02/15/00 2,850 3,033
5.500%, 04/15/00 500 486
8.750%, 08/15/00 2,775 2,994
6.375%, 08/15/02 5,425 5,386
5.750%, 08/15/03 2,000 1,908
5.875%, 02/15/04 1,500 1,434
6.500%, 08/15/05 3,000 2,960
5.625%, 02/15/06 12,500 11,600
9.375%, 02/15/06 1,000 1,185
U.S. Treasury Bond
7.125%, 02/15/23 2,500 2,517
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $68,627) 67,104
----------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
25
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
- --------------------------------------------------------------------------------
GOVERNMENT SECURITIES FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
CORPORATE OBLIGATIONS -- 6.3%
================================================================================
Alcan Aluminum
6.375%, 09/01/97 $ 500 $ 501
Anheuser Busch
8.750%, 12/01/99 600 638
Associates
7.250%, 05/15/98 650 660
Dow Capital Guaranteed: Dow Chemical
7.375%, 07/15/02 500 504
E.I. DuPont de Nemours
6.000%, 12/01/01 570 549
Ford Capital
9.000%, 08/15/98 1,425 1,489
Ford Motor Credit
8.000%, 12/01/96 250 251
General Foods
6.000%, 06/15/01 500 480
International Lease Financial MTN
7.150%, 08/03/98 500 507
ITT
7.000%, 01/15/97 500 502
J.C. Penney
10.000%, 10/15/97 400 415
Lehman Brothers Holdings
6.375%, 06/01/98 500 498
Merrill Lynch
6.375%, 03/30/99 500 498
New England Telephone & Telegraph
6.250%, 12/15/97 700 699
Pepsico
7.625%, 12/18/98 500 513
Philip Morris
9.750%, 05/01/97 300 306
6.000%, 07/15/01 500 477
8.250%, 10/15/03 600 629
----------
TOTAL CORPORATE OBLIGATIONS
(Cost $10,261) 10,116
----------
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
CASH EQUIVALENT -- 2.5%
================================================================================
SEI Liquid Asset Trust Treasury
Portfolio $4,102 $ 4,102
----------
TOTAL CASH EQUIVALENT
(Cost $4,102) 4,102
----------
================================================================================
REPURCHASE AGREEMENT -- 1.4%
================================================================================
UBS Securities
5.720%, dated 09/30/96, matures
10/01/96, repurchase price
$2,189,000 (collateralized by
various FNMA obligations, total par value
$2,300,000, 0.000%, 02/10/97,
market value: $2,236,000) (1) 2,189 2,189
----------
TOTAL REPURCHASE AGREEMENT
(Cost $2,189) 2,189
----------
TOTAL INVESTMENTS -- 99.1%
(Cost $162,936) 159,331
----------
OTHER ASSETS AND LIABILITIES, NET -- 0.9% 1,509
----------
================================================================================
NET ASSETS:
================================================================================
Fund Shares of Class A (unlimited
authorization -- no par value) based on
16,517,402 outstanding shares of
beneficial interest 164,743
Fund Shares of Class B (unlimited
authorization -- no par value) based on
53,651 outstanding shares of
beneficial interest 529
Accumulated net realized loss
on investments (827)
Net unrealized depreciation on
investments (3,605)
----------
TOTAL NET ASSETS -- 100.0% $160,840
----------
----------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
26
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
GOVERNMENT SECURITIES FUND (CONCLUDED)
- --------------------------------------------------------------------------------
DESCRIPTION VALUE
- --------------------------------------------------------------------------------
================================================================================
NET ASSETS (CONTINUED):
================================================================================
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS A $9.71
----------
----------
MAXIMUM OFFERING PRICE PER SHARE --
CLASS A($9.71 / 96.50%) $10.06
----------
----------
NET ASSET VALUE AND OFFERING PRICE
PER SHARE -- CLASS B (2) $9.76
----------
----------
- --------------------------------------------------------------------------------
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
FARMER MAC -- FEDERAL AGRICULTURAL MORTGAGE CORPORATION
FFCB -- FEDERAL FARM CREDIT BANK
FHLB -- FEDERAL HOME LOAN BANK
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FICO -- FINANCING CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
LINCS -- SYNTHETIC-LINKED COUPON SECURITIES
MTN -- MEDIUM TERM NOTE
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SBA -- SMALL BUSINESS ADMINISTRATION
SER -- SERIES
STRIPS -- SEPARATE TRADING OF REGISTERED INTEREST AND PRINCIPAL OF SECURITIES
TVA -- TENNESSEE VALLEY AUTHORITY
(1) TRI-PARTY REPURCHASE AGREEMENT
(2) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
LOUISIANA TAX-FREE INCOME FUND
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS -- 98.1%
================================================================================
LOUISIANA -- 98.1%
Alexandria, Louisiana Utilities
Revenue (FGIC)
5.250%, 05/01/11 $ 100 $ 96
Alexandria, Louisiana Utilities
Revenue Ser B
4.650%, 05/01/04 150 146
Ascension Parish, Louisiana Parish-
Wide School District GO (AMBAC)
4.900%, 03/01/09 150 143
Baton Rouge Louisiana Sales & Use
Tax RB (FSA)
6.000%, 08/01/08 200 207
Bossier City Louisiana Utility RB (FGIC)
4.800%, 10/01/05 500 489
Caddo Parish Louisiana, GO (MBIA)
5.000%, 02/01/05 350 349
East Baton Rouge Parish, Louisiana
Sales & Use Tax RB (FGIC)
4.800%, 02/01/06 650 625
5.900%, 02/01/16 500 511
East Baton Rouge Parish, Louisiana
Sales & Use Tax Revenue Sewer
Improvements Ser A (FGIC)
4.800%, 02/01/09 340 314
East Baton Rouge, Louisiana Mortgage
Financing Authority Ser B
5.300%, 10/01/14 85 80
East Baton Rouge, Louisiana Mortgage
Financing Authority Ser B
4.350%, 10/01/00 80 80
Ernest N. Morial Exhibition Hall Special
Tax RB (MBIA)
4.700%, 07/15/05 115 111
Ernest N. Morial Exhibition Hall Special
Tax Refunding (MBIA)
4.900%, 07/15/07 515 497
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
28
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
LOUISIANA TAX-FREE INCOME FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
LOUISIANA (CONTINUED)
Gretna, Louisiana Refunding - Sales
Tax Revenue (AMBAC)
5.200%, 06/01/06 $ 225 $ 225
Iberville School District District (FSA)
5.750%, 10/01/03 250 263
Jefferson Parish Louisiana Sales & Use
Tax RB (AMBAC)
5.000%, 02/01/08 130 125
5.000%, 02/01/13 700 653
Jefferson Parish Louisiana School
District Sales & Use Tax RB (MBIA)
6.250%, 02/01/08 300 319
Jefferson Parish, Louisiana Ad Valorem
Property Tax, GO Ser A (FGIC)
5.250%, 09/01/05 250 252
Jefferson Parish, Louisiana Hospital
Services (FGIC)
5.100%, 01/01/05 300 299
5.300%, 01/01/07 100 99
Kenner, Louisiana Sales Tax
Revenue (FGIC)
5.750%, 06/01/06 100 103
Lafayette Parish, Louisiana School Board
Sales Tax RB (FSA)
4.875%, 04/01/04 575 570
Lafayette Public Improvement RB
Ser A (FGIC)
4.900%, 03/01/03 505 505
Lafayette, Louisiana Public Improvement
Sales Tax Revenue (FGIC)
4.625%, 05/01/05 300 288
Lafayette, Louisiana Public Power
Authority Electric Revenue
Refunding (AMBAC)
5.000%, 11/01/06 250 246
Lafayette, Louisiana Public Power
Authority Electric Revenue
Refunding (AMBAC)
5.250%, 11/01/09 250 244
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
LOUISIANA (CONTINUED)
Lafayette, Louisiana Utilities
Revenue (AMBAC)
4.100%, 11/01/99 $ 275 $ 272
Lafayette, Louisiana Utility Revenue
Refunding Bonds (AMBAC)
4.700%, 11/01/04 125 122
Louisiana Housing Finance Agency
Mortgage Single Family Series B RB
6.000%, 06/01/15 830 833
Louisiana Public Facilities Authority
Department of Public Safety
Equipment Leasing RB (AMBAC)
5.000%, 08/01/05 400 392
Louisiana Public Facilities Authority
Department of Public Safety
RB (AMBAC)
4.900%, 08/01/04 500 490
Louisiana State Alton Ochsner Medical
Foundation PJ-B (MBIA)
6.000%, 05/15/17 100 101
Louisiana State Energy & Power
Authority RB (FGIC)
6.000%, 01/01/13 500 505
Louisiana State GO (FGIC)
6.000%, 08/01/04 1,000 1,067
Louisiana State GO Ser A (MBIA)
5.500%, 05/15/05 500 515
5.600%, 05/15/07 250 256
5.700%, 05/15/08 250 256
Louisiana State Greater New Orleans
Expressway, Louisiana Expressway
Revenue
4.800%, 11/01/97 25 25
Louisiana State Lafayette Public
Improvement Sales Tax
Revenue (FGIC)
5.500%, 03/01/07 200 202
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
28
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
STATEMENT OF NET ASSETS
LOUISIANA TAX-FREE INCOME FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
LOUISIANA (CONTINUED)
Louisiana State Public Facilities
Authority Alton Ochsner Medical
Foundation Project RB Ser A (MBIA)
6.000%, 05/15/01 $100 $ 105
Louisiana State Public Facilities Authority
Our Lady of Lake Regional Center
RB (MBIA)
5.900%, 12/01/06 390 403
Louisiana State Public Facilities Authority
Revenue (FSA)
4.400%, 10/01/00 120 119
Louisiana State Public Facilities Authority
Revenue Jefferson Parish Eastbank
Project (FGIC)
4.850%, 08/01/06 250 241
Louisiana State Public Facitilies
Authority RB Ser A (FSA)
5.100%, 03/01/01 250 254
Louisiana State Refunding Bonds Ad
Valorem Property Tax GO (MBIA)
6.250%, 08/01/99 250 258
Louisiana State Refunding Bonds
GO (MBIA)
5.375%, 08/01/05 400 407
Louisiana State Refunding GO
Ser A (MBIA)
5.100%, 08/01/01 250 254
5.300%, 08/01/04 250 255
Louisiana State Refunding GO Ser A
6.600%, 08/01/97 200 204
Louisiana State Saint Tammany Parish
Sales & Use Tax Revenue (FGIC)
5.750%, 04/01/06 250 260
Louisiana State University Agricultural &
Mechanical College (FGIC)
5.400%, 07/01/05 150 152
5.500%, 07/01/06 250 254
5.750%, 07/01/14 500 501
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
LOUISIANA (CONTINUED)
Louisiana State Unlimited GO (MBIA)
5.600%, 08/01/07 $250 $ 258
5.600%, 08/01/08 250 256
Mandeville, Louisiana Water Utility
Improvements, Ad Valorem
Property Tax
5.150%, 02/01/10 100 96
Natchitoches Parish, Louisiana School
District #7 GO (FSA)
4.900%, 03/01/07 190 185
New Orleans, Louisiana Home Mortgage
Special Obligation
6.250%, 01/15/11 500 540
New Orleans, Louisiana Unlimited
GO (FGIC)
5.850%, 11/01/09 350 360
Orleans Parish, Louisiana School Board
Public School Capital Refinancing
5.000%, 12/01/05 250 249
Orleans Parish School Board, Louisiana
Public School Capital Refinancing
RB (MBIA)
6.000%, 06/01/09 555 583
Orleans Parish School Board, Louisiana
Unlimited GO (FGIC)
5.300%, 09/01/10 250 245
Saint James Parish, Louisiana General
Obligation Unlimited Ad Valorem
Property Tax
4.800%, 03/01/05 85 83
5.200%, 03/01/08 75 74
Saint Tammany Parish, Louisiana School
Board Sales & Use Tax (FGIC)
5.750%, 04/01/03 250 262
Saint Tammany Parish, Louisiana School
District #12 (FGIC)
6.500%, 03/01/05 200 211
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
29
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
LOUISIANA TAX-FREE INCOME FUND (CONCLUDED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
MUNICIPAL BONDS (CONTINUED)
================================================================================
LOUISIANA (CONTINUED)
Shreveport, Louisiana Public
Improvements Ad Valorem
Property Tax
4.750%, 12/01/09 $200 $ 182
Shreveport, Louisiana Unlimited Tax
GO (AMBAC)
5.150%, 02/01/09 265 258
Slidell, Louisiana Unlimited GO (AMBAC)
4.900%, 03/01/09 200 189
5.000%, 03/01/13 400 373
Slidell, Louisiana Sales & Use Tax
Revenue Public Improvement Ser B
5.400%, 10/01/07 200 201
Slidell, Louisiana, Sales & Use Tax
Revenue Public Improvement Ser B
5.200%, 10/01/05 100 101
--------
21,248
--------
TOTAL MUNICIPAL BONDS
(Cost $21,256) 21,248
--------
================================================================================
CASH EQUIVALENTS -- 0.9%
================================================================================
SEI Institutional Tax Free
Portfolio 115 115
SEI Tax Exempt Trust Tax Free
Portfolio 74 74
--------
TOTAL CASH EQUIVALENTS
(Cost $189) 189
--------
TOTAL INVESTMENTS -- 99.0%
(Cost $21,445) 21,437
--------
OTHER ASSETS AND LIABILITIES, NET -- 1.0% 227
--------
- --------------------------------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
NET ASSETS:
================================================================================
Fund Shares of Class A (unlimited
authorization -- no par value) based on
2,139,093 outstanding shares of
beneficial interest $20,979
Fund Shares of Class B (unlimited
authorization -- no par value) based on
74,268 outstanding shares of
beneficial interest 747
Accumulated net realized loss on investments (54)
Net unrealized depreciation on investments (8)
--------
TOTAL NET ASSETS -- 100.0% $21,664
--------
--------
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
--------
--------
- --------------------------------------------------------------------------------
GO -- GENERAL OBLIGATION
RB -- REVENUE BOND
SER -- SERIES
THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT SUPPORT FOR CERTAIN
SECURITIES AS DEFINED IN THE STATEMENT OF NET ASSETS:
AMBAC -- AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
FGIC -- FINANCIAL GUARANTY INSURANCE COMPANY
FSA -- FINANCIAL SECURITY ASSURANCE
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.
- --------------------------------------------------------------------------------
30
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
BALANCED FUND
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS -- 53.3%
================================================================================
AEROSPACE & DEFENSE -- 0.6%
Sci Systems* 12,200 $ 686
----------
AIR TRANSPORTATION -- 0.6%
AMR* 8,500 677
----------
AIRCRAFT -- 1.1%
Lockheed Martin 7,600 685
McDonnell Douglas 12,000 630
----------
1,315
----------
APPAREL/TEXTILES -- 1.7%
Jones Apparel Group * 14,300 912
Tommy Hilfiger* 10,000 593
VF 7,900 475
----------
1,980
----------
AUTOMOTIVE -- 1.8%
Chrysler 22,000 630
Ford Motor 5,400 169
Lucasvarity PLC* 15,870 625
Teleflex 1,600 79
TRW 6,800 632
----------
2,135
----------
BANKS -- 6.3%
BankAmerica 11,700 961
Barnett Banks 18,400 621
Citicorp 5,900 535
First Bank System 13,300 889
First Union 10,200 681
Fleet Financial Group 2,100 93
J.P. Morgan 9,900 880
KeyCorp 14,400 634
Mellon Bank 10,550 625
National City 10,700 451
PNC Bank 17,800 594
Republic New York 5,500 380
----------
7,344
----------
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
BUILDING & CONSTRUCTION-- 0.5%
Centex 1,750 $ 57
Lennar 25,600 570
----------
627
----------
CHEMICALS -- 1.7%
B.F. Goodrich 14,500 654
Lubrizol 22,800 656
Union Carbide 15,020 685
----------
1,995
----------
COMPUTERS & SERVICES -- 1.5%
Compaq Computer* 14,000 898
IBM 1,000 125
Microsoft* 1,400 185
Seagate Technology* 8,100 453
----------
1,661
----------
CONSUMER PRODUCTS -- 0.5%
Nine West Group* 11,000 597
----------
DRUGS -- 0.6%
Bristol-Myers Squibb 2,000 193
Schering Plough 8,200 504
----------
697
----------
ELECTRICAL SERVICES -- 5.8%
Baltimore Gas & Electric 13,000 340
Consolidated Edison New York 19,100 530
Duke Power 8,600 401
Edison International 23,700 424
Florida Progress 15,400 524
IES Industries 24,200 735
New England Electric System 17,300 538
Nipsco Industries 17,300 618
Northern States Power 10,800 504
Oklahoma Gas & Electric 9,400 376
Portland General 17,700 679
PP&L Resources 26,400 577
Southern 21,100 477
-------
6,723
----------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
31
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
BALANCED FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
ENTERTAINMENT -- 0.4%
King World Productions* 14,000 $ 516
----------
FINANCIAL SERVICES -- 2.9%
Alex Brown 16,400 949
American Express 1,500 69
Bear Stearns 36,435 847
Beneficial 9,800 563
FNMA 2,500 87
SLMA 10,600 791
----------
3,306
----------
FOOD, BEVERAGE & TOBACCO -- 0.7%
General Mills 2,500 151
IBP 26,400 614
----------
765
----------
GAS/NATURAL GAS -- 1.9%
Enova 15,600 345
Nicor 19,500 658
Washington Gas Light 25,000 550
Williams 12,200 622
----------
2,175
----------
INSURANCE -- 2.7%
AFLAC 16,000 568
AMBAC 17,300 964
Providian 18,400 791
Transamerica 1,000 70
Transatlantic Holdings 1,100 75
Travelers 14,700 722
----------
3,190
----------
LEASING & RENTING -- 0.1%
Pitney Bowes 1,500 79
----------
LEISURE -- 0.5%
Callaway Golf 16,000 546
----------
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
MACHINERY -- 3.2%
Caterpillar 10,200 $ 769
Crane 13,000 577
Cummins Engine 14,000 551
Deere 13,800 580
Parker Hannifin 16,850 708
Tyco 14,000 604
----------
3,789
----------
MARINE TRANSPORTATION -- 0.2%
Carnival, Cl A 6,000 186
----------
MEASURING DEVICES -- 0.5%
Beckman Instruments 15,000 583
----------
MEDICAL PRODUCTS & SERVICES -- 0.6%
Varian Associates 14,700 706
----------
METALS & MINING -- 0.4%
Vulcan Materials 8,500 510
----------
MISCELLANEOUS MANUFACTURING -- 0.6%
Wolverine Tube* 16,800 722
----------
MISCELLANEOUS TRANSPORTATION -- 1.2%
Fleetwood Enterprises 23,700 729
Harsco 11,400 718
----------
1,447
----------
OFFICE FURNITURE & FIXTURES -- 0.4%
Harris 7,000 456
----------
PETROLEUM & FUEL PRODUCTS -- 0.5%
Noble Drilling* 36,000 544
----------
PETROLEUM REFINING -- 2.1%
Amoco 12,600 888
Exxon 6,350 529
Mobil 1,000 116
Texaco 10,260 944
----------
2,477
----------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
32
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
BALANCED FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.5%
Xerox 10,800 $ 579
----------
PRINTING & PUBLISHING -- 0.4%
Media General 15,300 482
----------
PROFESSIONAL SERVICES -- 0.7%
Servicemaster Limited
Partnership 31,650 768
----------
RAILROADS -- 0.6%
Norfolk Southern 7,850 717
----------
RETAIL -- 2.8%
American Stores 17,300 692
Consolidated Stores* 3,000 120
Limited 26,000 497
Pacific Enterprises 18,600 563
TJX 20,200 725
Waban* 27,700 634
----------
3,231
----------
RUBBER & PLASTIC -- 2.0%
Dow Chemical 6,000 481
Goodyear Tire & Rubber 11,500 530
Nike, Cl B 7,100 863
Sonoco Products 15,120 416
----------
2,290
----------
STEEL & STEEL WORKS -- 0.7%
LTV* 50,000 581
Nucor 4,100 208
----------
789
----------
TELEPHONES & TELECOMMUNICATION -- 2.6%
Ameritech 8,200 432
AT&T 3,400 178
Century Telephone Enterprises 25,750 885
NYNEX 9,700 422
Pacific Telesis Group 10,700 360
- --------------------------------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCK (CONTINUED)
================================================================================
TELEPHONES & TELECOMMUNICATION (CONTINUED)
SBC Communications 6,300 $ 303
Southern New England Telecom 13,200 487
----------
3,067
----------
TRUCKING -- 0.6%
Werner Enterprises 41,550 665
----------
WHOLESALE -- 0.8%
Johnson & Johnson 4,000 205
Motorola 2,000 103
Philip Morris 6,700 601
Wyle 1,750 56
----------
965
----------
TOTAL COMMON STOCKS
(Cost $52,647) 61,987
----------
================================================================================
U.S. GOVERNMENT AGENCY OBLIGATION -- 4.0%
================================================================================
FNMA
5.875%, 02/02/06 $5,000 4,635
----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATION
(Cost $4,876) 4,635
----------
================================================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS -- 21.0%
================================================================================
FHLMC CMO
9.000%, 04/15/20 328 325
FHLMC REMIC
7.150%, 01/15/23 2,000 1,892
FHLMC
7.000%, 04/01/00 10 11
9.000%, 05/01/06 122 128
9.000%, 08/01/09 439 455
6.500%, 11/15/22 1,486 1,388
FNMA CMO
7.000%, 01/25/03 2,000 1,966
FNMA REMIC
9.150%, 08/25/03 315 319
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
33
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
BALANCED FUND (CONCLUDED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (CONTINUED)
================================================================================
FNMA STRIPS
Zero Coupon, Callable 11/22/96
@ 100, 11/22/01 $1,500 $ 1,486
FNMA
7.000%, 09/01/07 1,416 1,399
GNMA
7.500%, 08/15/07 562 568
6.500%, 07/15/08 641 624
7.000%, 07/15/08 522 518
6.500%, 03/15/09 60 59
6.500%, 05/15/09 1,598 1,554
13.500%, 05/15/11 22 26
12.500%, 10/15/13 3 4
12.000%, 03/15/14 26 30
13.500%, 09/15/14 13 15
9.000%, 12/15/16 95 100
10.000%, 07/15/18 178 195
10.000%, 03/15/19 109 119
7.000%, 04/15/24 1,218 1,173
7.500%, 06/15/25 1,845 1,822
7.000%, 02/15/26 7,063 6,799
7.500%, 05/15/26 739 730
8.000%, 05/15/26 747 755
----------
TOTAL U.S. GOVERNMENT MORTGAGE-
BACKED OBLIGATIONS
(Cost $25,188) 24,460
----------
================================================================================
U.S. TREASURY OBLIGATIONS -- 19.8%
================================================================================
U.S. Treasury Bond
7.125%, 02/15/23 1,000 1,007
U.S. Treasury Notes
6.750%, 05/31/97 500 504
6.000%, 08/31/97 3,500 3,505
9.000%, 05/15/98 2,000 2,090
9.250%, 08/15/98 2,000 2,109
6.375%, 01/15/99 1,000 1,005
7.000%, 04/15/99 3,000 3,054
6.375%, 07/15/99 1,500 1,505
8.000%, 08/15/99 2,000 2,088
8.500%, 02/15/00 500 532
5.750%, 08/15/03 1,500 1,431
6.500%, 08/15/05 1,500 1,480
5.625%, 02/15/06 3,000 2,784
----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $23,616) 23,094
----------
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
CASH EQUIVALENT -- 2.1%
================================================================================
SEI Liquid Asset Trust Treasury
Portfolio $2,428 $ 2,428
----------
TOTAL CASH EQUIVALENT
(Cost $2,428) 2,428
----------
TOTAL INVESTMENTS -- 100.2%
(Cost $108,755) 116,604
----------
OTHER ASSETS AND LIABILITIES,
NET -- (0.2%) (224)
----------
================================================================================
NET ASSETS:
================================================================================
Fund Shares of Class A (unlimited
authorization -- no par value) based on
10,112,098 outstanding shares of
beneficial interest 103,070
Fund Shares of Class B (unlimited
authorization -- no par value) based on
175,479 outstanding shares of
beneficial interest 1,841
Distributions in excess of net investment
income (13)
Accumulated net realized gain on
investments 3,633
Net unrealized appreciation on
investments 7,849
----------
TOTAL NET ASSETS -- 100.0% $116,380
----------
----------
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS A $11.31
----------
----------
MAXIMUM OFFERING PRICE PER SHARE --
CLASS A ($11.31 / 96.50%) $11.72
----------
----------
NET ASSET VALUE AND OFFERING PRICE
PER SHARE -- CLASS B (1) $11.37
----------
----------
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY
CMO -- COLLATERALIZED MORTGAGE OBLIGATION
GNMA -- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
FHLMC -- FEDEREAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
PLC -- PUBLIC LIMITED COMPANY
REMIC -- REAL ESTATE MORTGAGE INVESTMENT CONDUIT
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
STRIPS -- SEPARATE TRADING OF REGISTERED INTEREST AND PRINCIPAL OF SECURITIES
(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.
- --------------------------------------------------------------------------------
34
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
VALUE EQUITY FUND
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS -- 94.4%
================================================================================
AEROSPACE & DEFENSE -- 2.4%
General Motors, Cl H 10,050 $ 580
Sci Systems* 21,800 1,226
Thiokol 12,100 567
--------
2,373
--------
AIR TRANSPORTATION -- 0.7%
AMR* 8,900 709
--------
AIRCRAFT -- 1.0%
Lockheed Martin 10,700 964
--------
APPAREL/TEXTILES -- 2.1%
Russell 27,000 871
Unifi 20,000 550
VF 10,000 601
--------
2,022
--------
AUTOMOTIVE -- 3.4%
Chrysler 26,800 767
Ford Motor 26,000 813
Lucasvarity PLC* 25,530 1,005
TRW 7,750 721
--------
3,306
--------
BANKS -- 13.6%
AmSouth Bancorp 21,000 935
Banc One 13,840 567
Bancorp Hawaii 14,150 552
BankAmerica 10,000 821
Barnett Banks 26,600 898
Citicorp 9,500 861
Comerica 10,730 553
First Bank System 14,400 963
First Chicago NBD 12,650 572
First Union 12,500 834
J.P. Morgan 9,500 844
KeyCorp 17,000 748
Mellon Bank 14,600 865
National City 20,800 876
NationsBank 10,000 869
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
BANKS (CONTINUED)
PNC Bank 23,000 $ 768
Republic New York 10,800 747
--------
13,273
--------
BUILDING & CONSTRUCTION -- 0.5%
Jacobs Engineering Group* 22,800 513
--------
CHEMICALS -- 2.4%
Dexter 18,800 562
Lubrizol 28,000 805
Morton International 25,000 994
--------
2,361
--------
COMPUTERS & SERVICES -- 1.2%
Compaq Computer* 18,400 1,180
--------
DRUGS -- 0.8%
Schering Plough 12,800 787
--------
ELECTRICAL SERVICES -- 11.2%
Baltimore Gas & Electric 25,500 666
Consolidated Edison New York 27,000 749
Duke Power 14,900 695
Edison International 32,500 581
Enova 20,100 445
Florida Progress 26,400 898
GPU 21,000 646
IES Industries 25,000 759
New England Electric System 24,300 756
Nipsco Industries 23,900 854
Northern States Power 11,900 555
Oklahoma Gas & Electric 12,600 504
Portland General 27,200 1,044
PP&L Resources 26,000 569
Southern 22,500 509
Southwestern Public Service 22,000 715
--------
10,945
--------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
35
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
VALUE EQUITY FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
ENTERTAINMENT -- 0.7%
King World Productions* 17,500 $ 645
--------
FINANCIAL SERVICES -- 8.8%
AG Edwards 30,000 874
Alex Brown & Sons 13,600 787
American Express 15,300 708
Bear Stearns 34,650 806
Beneficial 14,900 857
Dean Witter Discover 12,900 710
Equitable of Iowa 14,570 605
FNMA 24,400 851
Salomon Brothers 21,000 958
SLMA 12,200 910
Textron 6,400 544
--------
8,610
--------
GAS/NATURAL GAS -- 5.8%
MCN 35,000 941
National Fuel & Gas 25,000 919
Nicor 31,000 1,046
Panenergy 27,000 938
Peoples Energy 26,500 901
Williams 17,000 867
--------
5,612
--------
HOUSEHOLD PRODUCTS -- 0.6%
Snap-On Tools 17,460 561
--------
INSURANCE -- 6.3%
AMBAC 14,500 808
Conseco 12,150 598
Pacificare Health
Systems, Cl B* 6,700 580
Progressive of Ohio 16,700 956
Providian 15,800 679
Sunamerica 32,000 1,104
Transamerica 8,300 580
Travelers 17,250 847
--------
6,152
--------
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
LEASING & RENTING -- 0.6%
Pitney Bowes 11,100 $ 584
--------
MACHINERY -- 4.4%
Caterpillar 7,100 535
Crane 20,000 888
Cummins Engine 22,000 866
Deere 21,000 882
Ingersoll Rand 12,400 589
Parker Hannifin 12,000 504
--------
4,264
--------
MEASURING DEVICES -- 1.0%
Beckman Instruments 25,000 972
--------
MEDICAL PRODUCTS & SERVICES-- 2.0%
Novacare* 60,270 565
Quorum Health Group* 33,300 824
Tenet Healthcare* 24,450 544
--------
1,933
--------
METALS & MINING -- 1.4%
British Steel PLC, ADR 18,800 573
Vulcan Materials 13,760 826
--------
1,399
--------
MISCELLANEOUS MANUFACTURING -- 0.9%
Wolverine Tube* 20,300 873
--------
MISCELLANEOUS TRANSPORTATION -- 1.5%
Fleetwood Enterprises 24,000 738
Harsco 11,100 699
--------
1,437
--------
OFFICE FURNITURE & FIXTURES -- 0.7%
Harris 10,600 690
--------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
36
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
VALUE EQUITY FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
PAPER & PAPER PRODUCTS-- 1.7%
Adolph Coors, Cl B 25,730 $ 565
International Paper 13,400 570
Mead 9,400 551
--------
1,686
--------
PETROLEUM & FUEL PRODUCTS-- 2.1%
Petroleum Geo Services, ADR* 20,000 545
Phillips Petroleum 23,000 983
Western Atlas* 8,730 543
--------
2,071
--------
PETROLEUM REFINING -- 3.1%
Amoco 10,200 719
Chevron 7,500 470
Exxon 9,300 774
Texaco 11,500 1,058
--------
3,021
--------
PRINTING & PUBLISHING -- 1.6%
Media General 19,200 605
New York Times, Cl A 27,500 928
--------
1,533
--------
RAILROADS -- 0.7%
Norfolk Southern 7,600 694
--------
RETAIL -- 3.6%
American Stores 23,900 956
Brinker International* 35,200 598
Family Dollar Stores 50,000 869
Pacific Enterprises 18,340 555
Ruby Tuesday * 25,580 486
--------
3,464
--------
- --------------------------------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
RUBBER & PLASTIC -- 1.5%
Dow Chemical 7,300 $ 586
Goodyear Tire & Rubber 19,000 876
--------
1,462
--------
SPECIALTY MACHINERY -- 0.6%
Cooper Industries 13,620 589
--------
TELEPHONES & TELECOMMUNICATION-- 4.0%
Ameritech 10,800 568
Century Telephone Enterprises 21,900 753
NYNEX 12,000 522
Pacific Telesis Group 14,800 498
Southern New England Telecom 21,000 774
Sprint 20,000 778
--------
3,893
--------
TRUCKING -- 0.8%
Werner Enterprises 48,750 780
--------
WHOLESALE -- 0.7%
Philip Morris 7,900 709
--------
TOTAL COMMON STOCKS
(Cost $82,435) 92,067
--------
================================================================================
INVESTMENT COMPANY -- 1.2%
================================================================================
SEI Equity Index Fund 53 1,184
--------
TOTAL INVESTMENT COMPANY
(Cost $1,096) 1,184
--------
================================================================================
CASH EQUIVALENT -- 2.3%
================================================================================
SEI Liquid Asset Trust
Treasury Portfolio $2,213 2,213
--------
TOTAL CASH EQUIVALENT
(Cost $2,213) 2,213
--------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
37
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
VALUE EQUITY FUND (CONCLUDED)
- --------------------------------------------------------------------------------
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
REPURCHASE AGREEMENT -- 2.3%
================================================================================
UBS Securities
5.720%, dated 09/30/96, matures
10/01/96, repurchase price
$2,219,000 (collateralized by
various FNMA obligations, par
value $2,245,000, 0.000%,
02/10/97-09/06/00, market
value: $2,265,000) (1) $2,219 $ 2,219
--------
TOTAL REPURCHASE AGREEMENT
(Cost $2,219) 2,219
--------
TOTAL INVESTMENTS -- 100.2%
(Cost $87,963) 97,683
--------
OTHER ASSETS AND LIABILITIES,
NET -- (0.2%) (185)
--------
================================================================================
NET ASSETS:
================================================================================
Fund Shares of Class A (unlimited
authorization -- no par value) based on
7,234,430 outstanding shares of
beneficial interest 77,913
Fund Shares of Class B (unlimited
authorization -- no par value) based on
307,577 outstanding shares of beneficial
interest 3,618
Accumulated net realized gain on
investments 6,247
Net unrealized appreciation on
investments 9,720
--------
TOTAL NET ASSETS -- 100.0% $97,498
--------
--------
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS A $12.93
--------
--------
MAXIMUM OFFERING PRICE PER SHARE --
CLASS A($12.93 / 96.50%) $13.40
--------
--------
NET ASSET VALUE AND OFFERING PRICE
PER SHARE -- CLASS B (2) $12.97
--------
--------
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY
(1) TRI-PARTY REPURCHASE AGREEMENT
(2) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE REDEMPTION CHARGE, SEE THE NOTES TO THE FINANCIAL STATEMENTS.
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
PLC -- PUBLIC LIMITED COMPANY
GROWTH EQUITY FUND
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS -- 96.0%
================================================================================
AIR TRANSPORTATION -- 0.7%
UAL* 2,900 $ 136
--------
APPAREL/TEXTILES -- 2.6%
Jones Apparel Group * 4,000 255
Tommy Hilfiger* 3,900 231
--------
486
--------
AUTOMOTIVE -- 0.7%
Harley-Davidson 3,200 138
--------
BEAUTY PRODUCTS -- 2.4%
Avon Products 9,000 447
--------
BROADCASTING, NEWSPAPERS & ADVERTISING -- 2.0%
HBO 3,000 200
Omnicom Group 3,700 173
--------
373
--------
CHEMICALS -- 3.2%
Monsanto 6,000 219
PPG Industries 3,300 179
Rhone-Poulenc Rorer 2,550 188
--------
586
--------
COMMUNICATIONS EQUIPMENT-- 3.9%
ADC Telecommunications* 2,650 170
Andrew* 3,800 190
GTE 4,000 154
Tellabs* 2,900 205
--------
719
--------
COMPUTERS & SERVICES -- 2.8%
Compaq Computer* 3,200 205
Diebold 1,750 102
Gateway 2000* 4,500 215
--------
522
--------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
38
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
GROWTH EQUITY FUND
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
CONSUMER PRODUCTS -- 1.4%
Nine West Group* 4,700 $ 255
--------
DRUGS -- 9.7%
American Home Products 3,400 217
Amgen* 2,800 177
Bristol-Myers Squibb 2,200 212
Eli Lilly 3,750 242
Glaxo PLC, ADR 6,200 193
Merck 2,500 176
Pfizer 3,200 253
Pharmacia Upjohn, ADR 3,800 157
Schering Plough 2,700 166
--------
1,793
--------
ENVIRONMENTAL SERVICES -- 1.0%
Republic Industries * 6,300 183
--------
FINANCIAL SERVICES -- 3.2%
Charles Schwab 6,300 146
Franklin Resources 4,500 299
SLMA 1,900 142
--------
587
--------
FOOD, BEVERAGE & TOBACCO -- 3.9%
Anheuser Busch 2,600 98
Campbell Soup 2,800 218
Ralston Purina Group 3,200 219
Sara Lee 5,400 193
--------
728
--------
HOTELS & LODGING -- 2.5%
HFS* 2,800 187
Marriott International 5,000 276
--------
463
--------
HOUSEHOLD PRODUCTS -- 4.9%
Clorox 2,700 259
General Electric 3,100 282
Illinois Tool Works 2,100 151
Procter & Gamble 2,200 214
--------
906
--------
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
INSURANCE -- 1.8%
Equifax 6,800 $ 179
Marsh & McLennan 1,600 155
--------
334
--------
LEASING & RENTING -- 1.1%
Pitney Bowes 3,700 195
--------
LEISURE -- 1.4%
Callaway Golf 7,500 256
--------
MACHINERY -- 1.6%
Duriron 7,800 207
Tyco Laboratories 2,150 93
--------
300
--------
MARINE TRANSPORTATION -- 0.8%
Carnival, Cl A 5,000 155
--------
MEASURING DEVICES -- 1.2%
Thermo Electron* 5,700 231
--------
MEDICAL PRODUCTS & SERVICES -- 4.4%
Becton Dickinson 4,800 212
Dentsply International* 4,200 187
Guidant 3,850 213
Medtronic 3,200 205
--------
817
--------
MISCELLANEOUS BUSINESS SERVICES -- 7.4%
BMC Software* 2,800 223
Cisco Systems* 4,400 273
Computer Associates International 3,900 233
Newbridge Networks* 2,500 159
Parametric Technology* 5,100 252
Sun Microsystems* 3,600 224
--------
1,364
--------
MISCELLANEOUS MANUFACTURING -- 2.4%
Belden 9,000 261
Blyth Industries* 3,700 179
--------
440
--------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
39
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF NET ASSETS
GROWTH EQUITY FUND (CONTINUED)
- --------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
PAPER & PAPER PRODUCTS -- 0.9%
Caraustar Industries 5,700 $ 169
--------
PETROLEUM & FUEL PRODUCTS -- 2.2%
Noble Affiliates 5,000 211
Transocean Offshore 3,300 202
--------
413
--------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.4%
Xerox 1,550 83
--------
PRINTING & PUBLISHING -- 2.4%
Meredith 5,050 249
Tribune 2,500 195
--------
444
--------
PROFESSIONAL SERVICES -- 0.9%
Servicemaster Limited Partnership 6,750 164
--------
RETAIL -- 5.2%
Albertson's 5,200 219
Gap 8,800 254
Staples* 8,400 186
TJX 5,000 179
Wal-Mart 5,000 132
--------
970
--------
RUBBER & PLASTIC -- 1.2%
Nike, Cl B 1,750 213
--------
SEMI-CONDUCTORS/INSTRUMENTS-- 2.4%
American Power Conversion* 6,600 97
Amphenal Class* 8,000 183
Intel 1,750 167
--------
447
--------
TELEPHONES & TELECOMMUNICATION -- 7.9%
Airtouch Communications* 6,000 166
Ameritech 2,900 153
- --------------------------------------------------------------------------------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
COMMON STOCKS (CONTINUED)
================================================================================
TELEPHONES & TELECOMMUNICATION (CONTINUED)
AT&T 3,660 $ 191
Bell Atlantic 3,000 180
BellSouth 5,300 196
Cincinnati Bell 3,100 164
LCI International* 9,000 283
Worldcom* 6,300 135
--------
1,468
--------
WHOLESALE -- 5.5%
Cardinal Health 2,700 223
Gillette 4,300 310
Johnson & Johnson 5,000 256
Philip Morris 2,600 233
--------
1,022
--------
TOTAL COMMON STOCKS
(Cost $16,180) 17,807
--------
================================================================================
CASH EQUIVALENTS -- 3.9%
================================================================================
SEI Liquid Asset Trust Government
Portfolio $367 367
SEI Liquid Asset Trust Treasury
Portfolio 367 367
--------
TOTAL CASH EQUIVALENTS
(Cost $734) 734
--------
TOTAL INVESTMENTS -- 99.9%
(Cost $16,914) 18,541
--------
OTHER ASSETS AND LIABILITIES, NET -- 0.1% 11
--------
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
40
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
GROWTH EQUITY FUND (CONCLUDED)
- --------------------------------------------------------------------------------
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
================================================================================
NET ASSETS:
================================================================================
Fund Shares of Class A (unlimited
authorization -- no par value) based on
1,521,164 outstanding shares of
beneficial interest $16,853
Fund Shares of Class B (unlimited
authorization -- no par value) based on
12,626 outstanding shares of beneficial
interest 145
Accumulated net realized loss on investments (73)
Net unrealized appreciation on investments 1,627
--------
TOTAL NET ASSETS-- 100.0% $18,552
--------
--------
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE -- CLASS A $12.10
--------
--------
MAXIMUM OFFERING PRICE PER SHARE --
CLASS A ($12.10 / 96.50%) $12.54
--------
--------
NET ASSET VALUE AND OFFERING PRICE
PER SHARE -- CLASS B (1) $12.07
--------
--------
- --------------------------------------------------------------------------------
* NON-INCOME PRODUCING SECURITY
(1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE REDEMPTION CHARGE, SEE THE NOTES TO THE FINANCIAL STATEMENTS.
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
PLC -- PUBLIC LIMITED COMPANY
SLMA -- STUDENT LOAN MARKETING ASSOCIATION
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
41
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (000)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY LOUISIANA
INSTITUTIONAL SECURITIES TAX EXEMPT GOVERNMENT TAX-FREE
MONEY MARKET MONEY MARKET MONEY MARKET SECURITIES INCOME
FUND FUND FUND FUND FUND
-------------- -------------- ------------ ------------ ----------
10/1/95 10/1/95 6/7/96 10/1/95 10/1/95
TO 9/30/96 TO 9/30/96 TO 9/30/96 TO 9/30/96 TO 9/30/96
-------------- -------------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $1,583 $51,447 $574 $9,611 $898
Dividend income -- -- -- -- --
-------- -------- ------ -------- ------
TOTAL INVESTMENT INCOME 1,583 51,447 574 9,611 898
-------- -------- ------ -------- ------
EXPENSES:
Administration fees 29 1,621 24 262 30
Waiver of administration fees -- (53) (4) (23) (3)
Investment advisory fees 44 2,842 72 846 62
Waiver of investment
advisory fees (26) (251) (31) (122) (15)
Custodian 4 142 2 23 3
Transfer agent fees 14 70 5 36 30
Distribution fees(1) -- 896 40 3 5
Distribution fee waiver(1) -- (188) (40) -- --
Professional fees 4 120 4 16 3
Registration fees (1) 116 29 17 4
Trustee fees 1 18 -- 3 --
Printing expense 2 53 1 9 1
Amortization of deferred organization costs 1 17 1 4 --
Insurance and other fees 1 42 2 7 1
-------- -------- ------ -------- ------
TOTAL EXPENSES 73 5,445 105 1,081 121
-------- -------- ------ -------- ------
NET INVESTMENT INCOME 1,510 46,002 469 8,530 777
-------- -------- ------ -------- ------
NET REALIZED GAIN (LOSS) ON SECURITIES SOLD -- 8 -- 169 (20)
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
ON INVESTMENT SECURITIES -- -- -- (3,474) (37)
-------- -------- ------ -------- ------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS -- 8 -- (3,305) (57)
-------- -------- ------ -------- ------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,510 $46,010 $469 $5,225 $720
-------- -------- ------ -------- ------
-------- -------- ------ -------- ------
VALUE GROWTH
BALANCED EQUITY EQUITY
FUND FUND FUND
---------- ---------- ----------
10/1/95 10/1/95 3/1/96
TO 9/30/96 TO 9/30/96 TO 9/30/96
---------- ---------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income $3,105 $ 213 $ 57
Dividend income 1,605 2,201 112
-------- -------- --------
TOTAL INVESTMENT INCOME 4,710 2,414 169
-------- -------- --------
EXPENSES:
Administration fees 181 132 15
Waiver of administration fees (16) (2) (2)
Investment advisory fees 788 576 72
Waiver of investment
advisory fees (110) (36) (9)
Custodian 16 12 1
Transfer agent fees 41 39 12
Distribution fees(1) 12 20 --
Distribution fee waiver(1) -- -- --
Professional fees 12 10 1
Registration fees 16 18 6
Trustee fees 2 1 --
Printing expense 6 4 1
Amortization of deferred organization costs 3 1 1
Insurance and other fees 5 3 --
-------- -------- --------
TOTAL EXPENSES 956 778 98
-------- -------- --------
NET INVESTMENT INCOME 3,754 1,636 71
-------- -------- --------
NET REALIZED GAIN (LOSS) ON SECURITIES SOLD 4,170 6,632 (73)
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
ON INVESTMENT SECURITIES 1,350 1,141 1,627
-------- -------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS 5,520 7,773 1,554
-------- -------- --------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONs $9,274 $9,409 $1,625
-------- -------- --------
-------- -------- --------
<FN>
(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.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
42 & 43
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
STATEMENT OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
INSTITUTIONAL TREASURY SECURITIES TAX EXEMPT GOVERNMENT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND SECURITIES FUND
---------------------- ---------------------- ----------------- ----------------------
10/1/95 8/10/95 10/1/95 10/1/94 6/7/96 10/1/95 10/1/94
TO 9/30/96 TO 9/30/95 TO 9/30/96 TO 9/30/95 TO 9/30/96 TO 9/30/96 TO 9/30/95
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 1,510 $ 220 $ 46,002 $ 33,602 $ 469 $ 8,530 $ 5,950
Net realized gain (loss) on
securities sold -- -- 8 14 -- 169 (381)
Net unrealized appreciation
(depreciation) of
investment securities -- -- -- -- -- (3,474) 5,498
------- ------- ---------- --------- --------- ------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 1,510 220 46,010 33,616 469 5,225 11,067
------- ------- ---------- --------- --------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Income distribution
Class A (1) (1,510) (220) (29,276) (24,123) (469) (8,516) (5,952)
Income distribution
Class B (2) -- -- (16,726) (9,479) -- (18) (9)
Capital gain distribution
Class A (1) -- -- -- -- -- -- --
Capital gain distribution
Class B (2) -- -- -- -- -- -- --
------- ------- ---------- --------- --------- ------- -------
TOTAL DISTRIBUTIONS (1,510) (220) (46,002) (33,602) (469) (8,534) (5,961)
------- ------- ---------- --------- --------- ------- -------
SHARE TRANSACTIONS:
Class A (1):
Shares issued 102,959 44,431 1,168,501 1,213,421 106,346 94,996 49,864
Shares issued in lieu of
cash distribution -- -- 184 6 222 4,408 3,352
Shares redeemed (106,269) (13,117) (1,052,141) (1,095,946) (40,354) (60,190) (31,472)
------- ------- ---------- --------- --------- ------- -------
TOTAL CLASS A SHARE
TRANSACTIONS (3,310) 31,314 116,544 117,481 66,214 39,214 21,744
------- ------- ---------- --------- --------- ------- -------
Class B (2):
Shares issued -- -- 877,916 543,926 -- 310 188
Shares issued in lieu of
cash distribution -- -- 9,617 7,587 -- 17 8
Shares redeemed -- -- (759,215) (355,617) -- (40) (107)
------- ------- ---------- --------- --------- ------- -------
TOTAL CLASS B SHARE
TRANSACTIONS -- -- 128,318 195,896 -- 287 89
------- ------- ---------- --------- --------- ------- -------
INCREASE (DECREASE) IN NET ASSETS
FROM SHAREHOLDER TRANSACTIONS (3,310) 31,314 244,862 313,377 66,214 39,501 21,833
------- ------- ---------- --------- --------- ------- -------
TOTAL INCREASE (DECREASE) IN
NET ASSETS (3,310) 31,314 244,870 313,391 66,214 36,192 26,939
------- ------- ---------- --------- --------- ------- -------
NET ASSETS:
Beginning of period 31,314 -- 804,017 490,626 -- 124,648 97,709
------- ------- ---------- --------- --------- ------- -------
End of period $28,004 $31,314 $1,048,887 $ 804,017 $ 66,214 $160,840 $124,648
------- ------- ---------- --------- --------- ------- -------
------- ------- ---------- --------- --------- ------- -------
SHARES ISSUED AND REDEEMED:
Class A (1):
Issued 102,959 44,431 1,168,501 1,213,421 106,346 9,606 5,196
Issued in lieu of cash
distribution -- -- 184 6 222 451 350
Redeemed (106,269) (13,117) (1,052,141) (1,095,946) (40,354) (6,148) (3,303)
------- ------- ---------- --------- --------- ------- -------
TOTAL CLASS A SHARE
TRANSACTIONS (3,310) 31,314 116,544 117,481 66,214 3,909 2,243
------- ------- ---------- --------- --------- ------- -------
Class B (2):
Issued -- -- 877,916 543,926 -- 31 19
Issued in lieu of cash
distribution -- -- 9,617 7,587 -- 2 1
Redeemed -- -- (759,215) (355,617) -- (4) (11)
------- ------- ---------- --------- --------- ------- -------
TOTAL CLASS B SHARE
TRANSACTIONS -- -- 128,318 195,896 -- 29 9
------- ------- ---------- --------- --------- ------- -------
NET INCREASE (DECREASE) IN
SHARE TRANSACTIONS (3,310) 31,314 244,862 313,377 66,214 3,938 2,252
------- ------- ---------- --------- --------- ------- -------
------- ------- ---------- --------- --------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
LOUISIANA TAX-FREE VALUE GROWTH EQUITY
INCOME FUND BALANCED FUND EQUITY FUND FUND
---------------------- ---------------------- ----------------------- -------------
10/1/95 10/1/94 10/1/95 10/1/94 10/1/95 10/1/94 3/1/96
TO 9/30/96 TO 9/30/95 TO 9/30/96 TO 9/30/95 TO 9/30/96 TO 9/30/95 TO 9/30/96
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT ACTIVITIES:
Net investment income $ 777 $ 427 $ 3,754 $ 2,857 $ 1,636 $ 1,186 $ 71
Net realized gain (loss) on
securities sold (20) (2) 4,170 1,310 6,632 1,816 (73)
Net unrealized appreciation
(depreciation) of
investment securities (37) 410 1,350 8,750 1,141 8,754 1,627
------ ------- ------- -------- --------- -------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 720 835 9,274 12,917 9,409 11,756 1,625
------ ------- ------- -------- --------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Income distribution
Class A (1) (752) (408) (3,722) (2,834) (1,595) (1,173) (71)
Income distribution
Class B (2) (25) (20) (45) (28) (40) (12) --
Capital gain distribution
Class A (1) -- -- (1,259) -- (987) -- --
Capital gain distribution
Class B (2) -- -- (17) -- (26) -- --
------ ------- ------- -------- --------- -------- --------
TOTAL DISTRIBUTIONS (777) (428) (5,043) (2,862) (2,648) (1,185) (71)
------ ------- ------- -------- --------- -------- --------
SHARE TRANSACTIONS:
Class A (1):
Shares issued 15,116 6,559 55,812 15,154 42,018 24,265 29,369
Shares issued in lieu of
cash distribution 295 92 4,680 2,718 1,256 638 62
Shares redeemed (6,126) (2,306) (37,358) (12,108) (15,165) (18,386) (12,578)
------ ------- ------- -------- --------- -------- --------
TOTAL CLASS A SHARE
TRANSACTIONS 9,285 4,345 23,134 5,764 28,109 6,517 16,853
------ ------- ------- -------- --------- -------- --------
Class B (2):
Shares issued 183 128 926 165 2,725 778 145
Shares issued in lieu of
cash distribution 18 15 58 28 60 12 --
Shares redeemed (37) (195) (182) (46) (299) (47) --
------ ------- ------- -------- --------- -------- --------
TOTAL CLASS B SHARE
TRANSACTIONS 164 (52) 802 147 2,486 743 145
------ ------- ------- -------- --------- -------- --------
INCREASE (DECREASE) IN NET ASSETS
FROM SHAREHOLDER TRANSACTIONS 9,449 4,293 23,936 5,911 30,595 7,260 16,998
------ ------- ------- -------- --------- -------- --------
TOTAL INCREASE (DECREASE) IN
NET ASSETS 9,392 4,700 28,167 15,966 37,356 17,831 18,552
------ ------- ------- -------- --------- -------- --------
NET ASSETS:
Beginning of period 12,272 7,572 88,213 72,247 60,142 42,311 --
------ ------- ------- -------- --------- -------- --------
End of period $21,664 $12,272 $116,380 $ 88,213 $ 97,498 $ 60,142 $ 18,552
------ ------- ------- -------- --------- -------- --------
------ ------- ------- -------- --------- -------- --------
SHARES ISSUED AND REDEEMED:
Class A (1):
Issued 1,540 683 5,030 1,532 3,370 2,398 2,638
Issued in lieu of cash
distribution 30 10 420 268 101 61 5
Redeemed (627) (240) (3,351) (1,232) (1,219) (1,820) (1,122)
------ ------- ------- -------- --------- -------- --------
TOTAL CLASS A SHARE
TRANSACTIONS 943 453 2,099 568 2,252 639 1,521
------ ------- ------- -------- --------- -------- --------
Class B (2):
Issued 18 14 83 15 218 72 13
Issued in lieu of cash
distribution 2 2 5 3 5 1 --
Redeemed (4) (21) (16) (4) (24) (5) --
------ ------- ------- -------- --------- -------- --------
TOTAL CLASS B SHARE
TRANSACTIONS 16 (5) 72 14 199 68 13
------ ------- ------- -------- --------- -------- --------
NET INCREASE (DECREASE) IN
SHARE TRANSACTIONS 959 448 2,171 582 2,451 707 1,534
------ ------- ------- -------- --------- -------- --------
------ ------- ------- -------- --------- -------- --------
<FN>
(1) TRUST CLASS FOR TREASURY SECURITIES MONEY MARKET FUND.
(2) RETAIL CLASS FOR TREASURY SECURITIES MONEY MARKET FUND.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
44 & 45
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
NET ASSET REALIZED DISTRIBUTIONS
VALUE NET AND UNREALIZED FROM NET NET ASSET NET ASSETS
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT VALUE TOTAL END OF
OF PERIOD INCOME ON INVESTMENTS INCOME END OF PERIOD RETURN+ PERIOD (000)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Institutional Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------
1996 $1.00 0.05 -- (0.05) $1.00 5.33% $28,004
1995(4) 1.00 0.01 -- (0.01) 1.00 5.55* 31,314
- ---------------------------------------------------------------------------------------------------------------------
Treasury Securities Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1996 $1.00 0.05 -- (0.05) $1.00 5.06% $637,819
1995 1.00 0.05 -- (0.05) 1.00 5.33 521,270
1994 1.00 0.03 -- (0.03) 1.00 3.22 403,778
RETAIL CLASS
1996 $1.00 0.05 -- (0.05) $1.00 4.86% $411,068
1995 1.00 0.05 -- (0.05) 1.00 5.16 282,747
1994(1) 1.00 0.03 -- (0.03) 1.00 3.15* 86,848
- ---------------------------------------------------------------------------------------------------------------------
Tax Exempt Money Market Fund
- ---------------------------------------------------------------------------------------------------------------------
1996(5) $1.00 0.01 -- (0.01) $1.00 2.83%* $66,214
- ---------------------------------------------------------------------------------------------------------------------
Government Securities Fund
- ---------------------------------------------------------------------------------------------------------------------
CLASS A
1996 $ 9.87 0.55 (0.16) (0.55) $9.71 4.10% $160,317
1995 9.41 0.54 0.46 (0.54) 9.87 10.84 124,404
1994 10.00 0.43 (0.59) (0.43) 9.41 (1.66) 97,562
CLASS B
1996 $ 9.92 0.46 (0.15) (0.47) $9.76 3.23% $ 523
1995 9.46 0.46 0.47 (0.47) 9.92 10.10 244
1994(2) 10.04 0.31 (0.58) (0.31) 9.46 (2.84)* 147
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT
RATIO OF INVESTMENT AVERAGE NET INCOME TO
EXPENSES TO INCOME TO ASSETS AVERAGE PORTFOLIO
AVERAGE AVERAGE (EXCLUDING NET ASSETS TURNOVER
NET ASSETS NET ASSETS WAIVERS) (EXCLUDING WAIVERS) RATE
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Institutional Money Market Fund
- -----------------------------------------------------------------------------------------------
1996 0.25% 5.19% 0.34% 5.10% --
1995(4) 0.25* 5.56* 0.60* 5.21* --
- -----------------------------------------------------------------------------------------------
Treasury Securities Money Market Fund
- -----------------------------------------------------------------------------------------------
TRUST CLASS
1996 0.50% 4.92% 0.53% 4.89% --
1995 0.50 5.23 0.57 5.16 --
1994 0.50 3.15 0.60 3.05 --
RETAIL CLASS
1996 0.70% 4.72% 0.78% 4.64% --
1995 0.68 5.12 0.82 4.98 --
1994(1) 0.59* 3.27* 0.83* 3.03* ---
- -----------------------------------------------------------------------------------------------
Tax Exempt Money Market Fund
- -----------------------------------------------------------------------------------------------
1996(5) 0.65%* 2.92%* 1.12%* 2.45%* --
- -----------------------------------------------------------------------------------------------
Government Securities Fund
- -----------------------------------------------------------------------------------------------
CLASS A
1996 0.70% 5.53% 0.79% 5.44% 22.80%
1995 0.70 5.63 0.84 5.49 18.33
1994 0.70 4.43 0.90 4.23 37.80
CLASS B
1996 1.45% 4.81% 1.54% 4.72% 22.80%
1995 1.45 4.86 1.59 4.72 18.33
1994(2) 1.45* 3.88* 1.69* 3.64* 37.80
- -----------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
46&47
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
NET ASSET REALIZED DISTRIBUTIONS DISTRIBUTIONS
VALUE NET AND UNREALIZED FROM NET FROM NET ASSET NET ASSETS
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT CAPITAL VALUE TOTAL END OF
OF PERIOD INCOME ON INVESTMENTS INCOME GAINS END OF PERIOD RETURN+ PERIOD (000)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Louisiana Tax-Free Income Fund
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A
1996 $ 9.79 0.42 -- (0.42) -- $9.79 4.48% $ 20,937
1995 9.38 0.42 0.41 (0.42) -- 9.79 9.01 11,705
1994 10.00 0.36 (0.62) (0.36) -- 9.38 (2.68) 6,971
CLASS B
1996 $ 9.79 0.35 -- (0.35) -- $9.79 3.60% $ 727
1995 9.39 0.35 0.40 (0.35) -- 9.79 8.21 567
1994 (3) 9.87 0.27 (0.48) (0.27) -- 9.39 (2.58)* 601
- ------------------------------------------------------------------------------------------------------------------------------
Balanced Fund
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A
1996 $10.87 0.38 0.59 (0.38) (0.15) $11.31 9.11% $114,384
1995 9.59 0.37 1.28 (0.37) -- 10.87 17.58 87,076
1994 10.00 0.31 (0.41) (0.31) -- 9.59 (1.02) 71,379
CLASS B
1996 $10.93 0.30 0.59 (0.30) (0.15) $11.37 8.30% $ 1,996
1995 9.64 0.30 1.29 (0.30) -- 10.93 16.75 1,137
1994 (2) 10.03 0.18 (0.39) (0.18) -- 9.64 (2.24)* 868
- ------------------------------------------------------------------------------------------------------------------------------
Value Equity Fund
- ------------------------------------------------------------------------------------------------------------------------------
CLASS A
1996 $11.81 0.25 1.30 (0.25) (0.18) $12.93 13.38% $ 93,508
1995 9.65 0.24 2.16 (0.24) -- 11.81 25.13 58,854
1994 10.00 0.18 (0.35) (0.18) -- 9.65 (1.64) 41,922
CLASS B
1996 $11.86 0.17 1.29 (0.17) (0.18) $12.97 12.49% $ 3,990
1995 9.70 0.15 2.17 (0.16) -- 11.86 24.17 1,288
1994 (2) 9.95 0.08 (0.25) (0.08) -- 9.70 (1.82)* 389
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT
RATIO OF INVESTMENT AVERAGE NET INCOME TO
EXPENSES TO INCOME TO ASSETS AVERAGE PORTFOLIO AVERAGE
AVERAGE AVERAGE (EXCLUDING NET ASSETS TURNOVER COMMISSION
NET ASSETS NET ASSETS WAIVERS) (EXCLUDING WAIVERS) RATE RATE**
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Louisiana Tax-Free Income Fund
- -----------------------------------------------------------------------------------------------------------------
CLASS A
1996 0.65% 4.38% 0.75% 4.28% 8.26% n/a
1995 0.65 4.51 0.95 4.21 2.31 n/a
1994 0.65 4.10 1.72 3.03 30.31 n/a
CLASS B
1996 1.40% 3.62% 1.50% 3.52% 8.26% n/a
1995 1.40 3.77 1.70 3.47 2.31 n/a
1994 (3) 1.40* 3.35* 2.47* 2.28* 30.31 n/a
- -----------------------------------------------------------------------------------------------------------------
Balanced Fund
- -----------------------------------------------------------------------------------------------------------------
CLASS A
1996 0.89% 3.53% 1.01% 3.41% 57.22% $.0794
1995 0.85 3.70 1.04 3.51 55.06 n/a
1994 0.85 3.18 1.14 2.89 64.09 n/a
CLASS B
1996 1.64% 2.80% 1.76% 2.68% 57.22% $.0794
1995 1.60 2.95 1.79 2.76 55.06 n/a
1994 (2) 1.60* 2.55* 1.94* 2.21* 64.09 n/a
- -----------------------------------------------------------------------------------------------------------------
Value Equity Fund
- -----------------------------------------------------------------------------------------------------------------
CLASS A
1996 0.97% 2.12% 1.02% 2.07% 95.93% $.0795
1995 0.90 2.40 1.07 2.23 97.88 n/a
1994 0.90 1.95 1.17 1.68 161.42 n/a
CLASS B
1996 1.73% 1.37% 1.77% 1.33% 95.93% $.0795
1995 1.65 1.62 1.82 1.45 97.88 n/a
1994 (2) 1.65* 1.30* 1.93* 1.02* 161.42 n/a
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
48 & 49
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD ENDED SEPTEMBER 30,
<TABLE>
<CAPTION>
NET ASSET REALIZED DISTRIBUTIONS RATIO OF
VALUE NET AND UNREALIZED FROM NET NET ASSET NET ASSETS EXPENSES TO
BEGINNING INVESTMENT GAINS OR (LOSSES) INVESTMENT VALUE TOTAL END OF AVERAGE
OF PERIOD INCOME ON INVESTMENTS INCOME END OF PERIOD RETURN+ PERIOD (000) NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth Equity Fund
- --------------------------------------------------------------------------------------------------------------------
CLASS A
1996 (6) $11.00 0.05 1.10 (0.05) $12.10 10.46% $18,400 1.00%*
CLASS B
1996 (7) $11.14 0.01 0.93 (0.01) $12.07 8.48% $ 152 1.75%*
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT
INVESTMENT AVERAGE NET INCOME TO
INCOME TO ASSETS AVERAGE PORTFOLIO AVERAGE
AVERAGE (EXCLUDING NET ASSETS TURNOVER COMMISSION
NET ASSETS WAIVERS) (EXCLUDING WAIVERS) RATE RATE**
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Growth Equity Fund
- ---------------------------------------------------------------------------------------
CLASS A
1996 (6) 0.73%* 1.12%* 0.61%* 91.09% $.0797
CLASS B
1996 (7) (0.02)%* 1.87%* (0.14)%* 91.09% $.0797
- ---------------------------------------------------------------------------------------
<FN>
+ TOTAL RETURN DOES NOT REFLECT SALES LOADS ON CLASS B AND RETAIL CLASS SHARES.
* ANNUALIZED.
** AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES DURING THE PERIOD. PRESENTATION OF THE RATE IS
ONLY REQUIRED FOR FISCAL YEARS BEGINNING AFTER SEPTEMBER 1, 1995.
(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.
(5) COMMENCED OPERATIONS ON JUNE 7, 1996.
(6) COMMENCED OPERATIONS ON MARCH 1, 1996.
(7) COMMENCED OPERATIONS ON APRIL 19, 1996.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
50 & 51
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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 eight series funds: Institutional Money Market Fund, Treasury
Securities Money Market Fund, Tax Exempt Money Market Fund (the "Money Market
Funds"), Government Securities Fund, Louisiana Tax-Free Income Fund, Balanced
Fund (formerly the "Growth and Income Fund"), Value Equity Fund, and Growth
Equity Fund (the "Non-Dollar Funds"). Each Fund's prospectus provides a
description of the Fund's investment objectives, policies and strategies. The
assets of each Fund are segregated, and a shareholder's interest is limited to
the Fund in which shares are held. The Trust is registered to offer the
following classes of shares: Trust, Retail, and the Cash Sweep Class 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 Securities Money Market Fund had not
commenced operations as of September 30, 1996.
2. SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
The following is a summary of the significant accounting policies followed by
the Funds.
SECURITIES VALUATION -- Investments in equity securities that 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
exceeding 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 valued 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 by complying with
the appropriate provisions of the Internal Revenue Code of 1986, as amended, and
to distribute all of its taxable income and net capital gains. Accordingly, no
provision for federal income taxes has been made 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
- --------------------------------------------------------------------------------
52
<PAGE>
- --------------------------------------------------------------------------------
[MARQUIS LOGO]
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
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 scientific interest method, which approximates
the effective interest method.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure that the market value of
the collateral, including accrued interest thereon, is sufficient in the event
of default 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
maturity of the repurchase agreement. If the counterparty defaults and the value
of the collateral declines, or if the counterparty enters an insolvency
proceeding, realization of the collateral by the Funds may be delayed or
limited.
NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is
calculated 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.
EXPENSES -- Expenses that are directly related to one of the Funds are charged
directly to that Fund. Other operating expenses are prorated to the Funds on the
basis of relative net assets. Class specific expenses are borne by that class.
Income, expenses, and realized and unrealized gains/losses are allocated to the
respective classes on the basis of relative daily net assets.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS -- The preparation
of financial statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that affect
the reported amount of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates.
OTHER -- Distributions from net investment income are declared and paid
quarterly for the Balanced Fund, Value Equity Fund and Growth Equity Fund.
Distributions from net investment income are declared daily and paid monthly for
the Institutional Money Market Fund, Treasury Securities Money Market Fund, and
Tax Exempt 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.
- --------------------------------------------------------------------------------
53
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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, that 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%, Tax
Exempt Money Market Fund -- .45%, Government Securities Fund -- .55%, Louisiana
Tax-Free Income Fund -- .35%, Balanced Fund -- .74%, Value Equity Fund -- .74%
and Growth 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 Adviser reserves the right to terminate its
waiver at any time in its sole discretion.
Weiss, Peck & Greer, L.L.C. serves as the investment sub-adviser for the Tax
Exempt Money Market Fund pursuant to a sub-advisory agreement with the Adviser.
The sub-advisory fees are paid by the Adviser.
The Trust and SEI Fund Resources (the "Administrator") have entered into an
Administration Agreement. SEI Financial Management Corporation, a wholly-owned
subsidiary of SEI Corporation, is the owner of all beneficial interest in the
Administrator. 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 Institutional Money Market Fund and .15% of
the average daily net assets of the Treasury Securities Money Market Fund, Tax
Exempt Money Market Fund, Government Securities Fund, Louisiana Tax-Free Income
Fund, Balanced Fund, Value Equity Fund, and Growth Equity Fund.
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 annual rate of
.25% of the average daily net assets of the Retail class of Treasury 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 Distributor 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 Distributor reserves the
right to terminate its waiver at any time in its sole discretion.
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
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54
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[MARQUIS LOGO]
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
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.
CONTINGENT DEFERRED SALES
CHARGE AS A PERCENTAGE
YEAR SINCE OF DOLLAR AMOUNT
PURCHASE SUBJECT TO CHARGE
------------ ----------------------------
First 3.50%
Second 2.75%
Third 2.00%
Fourth 1.25%
Fifth 0.50%
Sixth None
4. ORGANIZATIONAL COSTS AND TRANSACTIONS WITH AFFILIATES
- --------------------------------------------------------------------------------
Organizational costs have been capitalized by the Funds and are being amortized
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 period that
the Funds are amortizing their organizational costs, the redemption proceeds
payable to the holder thereof will be reduced by the unamortized organizational
costs in the same ratio as the number of initial shares being redeemed bears to
the number of initial shares outstanding at the time of 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.
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, 1996 were
as follows:
LOUISIANA
GOVERNMENT TAX-FREE VALUE GROWTH
SECURITIES INCOME BALANCED EQUITY EQUITY
FUND FUND FUND FUND FUND
(000) (A) (000) (000) (B) (000) (000) (C)
---------- --------- ---------- ------ ---------
PURCHASES:
U.S.
Government $49,854 $ -- $24,797 $ -- $ --
Other 5,039 11,042 51,366 98,879 16,995
SALES:
U.S.
Government $27,233 $ -- $10,266 $ -- $ --
Other 4,639 1,385 46,712 71,768 13,686
(a) Does not include $22,743,861 of securities received in exchange for shares
of the Fund.
(b) Does not include $6,201,227 of securities received in exchange for shares of
the Fund.
(c) Does not include $12,944,061 of securities received in exchange for shares
of the Fund.
On September 30, 1996, the total cost of securities and the net realized gains
or losses on securities sold for federal income tax purposes was not
- --------------------------------------------------------------------------------
55
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
- --------------------------------------------------------------------------------
materially different from amounts reported for financial reporting purposes. The
aggregate gross unrealized appreciation and depreciation on securities at
September 30, 1996, for each Non-Dollar Fund is as follows:
LOUISIANA
GOVERNMENT TAX-FREE VALUE GROWTH
SECURITIES INCOME BALANCED EQUITY EQUITY
FUND FUND FUND FUND FUND
(000) (000) (000) (000) (000)
---------- ---------- -------- ------ ------
Aggregate Gross
Unrealized
Appreciation $ 621 $ 195 $10,300 $11,012 $ 1,910
Aggregate Gross
Unrealized
Depreciation (4,226) (203) (2,451) (1,292) (283)
-------- -------- -------- ------- ------
Net Unrealized
Appreciation/
(Depreciation) $(3,605) $ (8) $ 7,849 $ 9,720 $ 1,627
-------- -------- -------- ------- ------
-------- -------- -------- ------- ------
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 believed
to be of comparable quality.
The Tax Exempt Money Market Fund invests in debt instruments of municipal
issuers. The issuers' ability to meet their obligations may be affected by
economic developments in a specific state or region.
The Tax Exempt Money Market Fund invests in securities that include revenue
bonds, tax and revenue anticipation notes, and general obligation bonds. At
September 30, 1996, the percentages of portfolio investments by each revenue
source were as follows:
TAX EXEMPT
MONEY MARKET FUND
--------------------
Revenue Bonds 81%
Anticipation Notes 11%
Pre-Refunded Securities 3%
General Obligations 2%
Participation Notes 1%
Cash Equivalents 2%
--------------------
Total 100%
--------------------
--------------------
The Government Securities and Balanced Funds invest in debt instruments.
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
securities.
The following table presents a summary of holdings in the Government Securities
and Louisiana Tax-Free Income Funds as of September 30, 1996.
LOUISIANA
GOVERNMENT TAX-FREE
SECURITIES INCOME
RATING/SECURITY CATEGORY FUND FUND
- ------------------------ ----------- ----------
U.S. Government Security 89.70% --
AAA -- 84.10%
AA 1.60% --
A 4.44% 1.80%
BBB .31% --
Not Rated 3.95% 14.10%
----------- ----------
100% 100%
----------- ----------
----------- ----------
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56
<PAGE>
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[MARQUIS LOGO]
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
These 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 loss carryforwards and post-October deferred losses at
September 30, 1996, to the extent provided in the regulations for federal income
tax as follows:
POST
CAPITAL LOSS OCTOBER 31,
CARRYFORWARDS EXPIRING 1995
---------------------- DEFERRED
FUNDS 2003 2004 LOSSES
- ------ ---------------------- ------------
Government
Securities Fund $679,660 $124,634 $--
Louisiana Tax-Free
Income Fund 32,125 2,083 19,720
Growth Equity Fund -- -- 73,265
For tax purposes, capital losses can be carried forward for a maximum of
eight years to offset any future net realized capital gains. Post-October
deferred losses have been deferred to fiscal year 1997 for tax purposes.
- --------------------------------------------------------------------------------
57
<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, 1996, each Fund is designating
qualifying dividends and exempt income with regard to distributions paid during
the year as follows:
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
LONG TERM ORDINARY
CAPITAL GAINS INCOME TOTAL
DISTRIBUTION DISTRIBUTIONS QUALIFYING DISTRIBUTIONS TAX-EXEMPT
FUNDS (TAX BASIS)* (TAX BASIS)* DIVIDENDS(1) (TAX BASIS)** INTEREST**
- -------- ------------- ------------- ------------ -------------- ----------
<S> <C> <C> <C> <C> <C>
Institutional Money Market Fund 0% 100% 0% 100% 0%
Treasury Securities Money Market Fund 0% 100% 0% 100% 0%
Tax Exempt Money Market Fund 0% 100% 0% 100% 100%
Government Securities Fund 0% 100% 0% 100% 0%
Louisiana Tax-Free Income Fund 0% 100% 0% 100% 100%
Balanced Fund 8% 92% 11% 100% 0%
Value Equity Fund 15% 85% 13% 100% 0%
Growth Equity Fund 0% 100% 7% 100% 0%
<FN>
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction. * Items (A) and (B) are based on a percentage of
the Fund's total distributions. ** Items (D) and (E) are based on a percentage
of ordinary income distributions of the Fund.
</FN>
</TABLE>
Please consult your tax adviser for proper treatment of this information.
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58
<PAGE>
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[MARQUIS LOGO]
NOTES
- --------------------------------------------------------------------------------
59
<PAGE>
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NOTES
- --------------------------------------------------------------------------------
60
<PAGE>
[MARQUIS LOGO]
HIGH QUALITY. HIGH STANDARDS. HIGHLY PERSONAL.
INVESTMENT ADVISER
First National Bank of Commerce in New Orleans
210 Baronne Street
New Orleans, LA 70112
ADMINISTRATOR
SEI Financial Management Corporation
680 East Swedesford Road
Wayne, PA 19087-1658
TRANSFER AGENT
DST Systems, Inc.
210 West 10th Street
Kansas City, MO 64105
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
2000 One Logan Square
Philadelphia, PA 19103
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
1601 Market Street
Philadelphia, PA 19103
THE MARQUIS FUNDS:
(BULLET) Are NOT insured by the FDIC or any other government agency.
(BULLET) Are NOT guaranteed by First Commerce Corporation, First NBC Trust
Group, Marquis Investments, LLC, or any affiliates thereof.
(BULLET) Are NOT obligations of First Commerce Corporation, First NBC Trust
Group, Marquis Investments, LLC, or any affiliates thereof.
(BULLET) Are NOT bank deposits.
(BULLET) Involve investment risks, including possible loss of principal
amount invested.
The First NBC Trust Group is a department of First National Bank of
Commerce ("First NBC"), a wholly owned subsidiary of First Commerce Corporation
("FCC"). First NBC serves as investment adviser and custodian for the Marquis
Funds; remuneration may be earned for such services. The Marquis Funds are
distributed by SEI Financial Services Company, which is not affiliated with FCC,
First NBC, Marquis Investments, LLC, or any affiliates thereof.
This material must be preceded or accompanied by a current prospectus.
(COPYRIGHT) 1996, SEI Financial Services Company MRQ-F-007-03
