[ART OMITTED]
ANNUAL
REPORT
SEPTEMBER 30, 1997
[MARQUIS LOGO]
High Quality. High Standards. Highly Personal.
[ART OMITTED]
<PAGE>
TABLE OF CONTENTS
Letter to Shareholders 1
Investment Adviser's Report 3
Management's Discussion &
Analysis of Fund Performance 7
Report of Independent Public Accountants 20
Statements of Net Assets 21
Statements of Operations 50
Statements of Changes in Net Assets 52
Financial Highlights 56
Notes to Financial Statements 62
Notice to Shareholders 69
FUND PORTFOLIOS TRADING SYMBOLS
MONEY MARKET FUNDS TRUST RETAIL
Institutional Money Market Fund N/A N/A
Treasury Securities Money Market Fund MQTXX MQRXX
Tax Exempt Money Market Fund N/A MQEXX
FIXED INCOME FUNDS A SHARES B SHARES
Government Securities Fund MQGAX MFGSB
Strategic Income Bond Fund MSIAX N/A
Louisiana Tax-Free Income Fund MQLAX MFLTF
BALANCED FUNDS
Balanced Fund MQIAX MFGIB
EQUITY FUNDS
Value Equity Fund MQVAX MFVEB
Growth Equity Fund MNEUX N/A
Small Cap Equity Fund N/A N/A
International Equity Fund N/A N/A
<PAGE>
LETTER TO SHAREHOLDERS
DEAR SHAREHOLDER:
As we commemorate the fourth full year of the Marquis Family of Funds, we can
look back on significant accomplishments for the twelve months ended September
30, 1997.
A NEW MILESTONE: $2 BILLION IN ASSETS
First, we are pleased to report that the total assets in our fund family
recently reached $2 billion for the first time, making the Marquis Funds the
largest complex of its kind in the state of Louisiana. This is a remarkable
achievement for a family that began just four years ago with initial assets of
only $494 million. And it demonstrates that individual and institutional
shareholders value the convenience of investing through an institution they know
and trust. It also shows that they respect the prudent approach of our stable,
experienced investment management team.
THREE NEW FUNDS IN 1997
Second, we have increased the number of funds in our family to eleven in the
past year, with the addition of the Marquis International Equity Fund, the
Marquis Small Cap Equity Fund, and the Marquis Strategic Income Bond Fund. These
funds have brought new diversity and balance to our fund family. They enable
investors to plan for a full range of lifetime financial goals and to adopt the
investment strategy that best suits their needs at any point in the overall
market cycle.
THE NEW TAX LAW
Looking beyond our fund family, one of the most important events for our
investors during the past twelve months was the recent passage of the Federal
Taxpayer Relief Act of 1997. This act contains a number of provisions that are
potentially beneficial for investors, including:
[BULLET] LOWER CAPITAL GAINS TAX RATES: Beginning with the 1997 tax year, a new
set of capital gains tax rules establishes lower rates for those who
sell investments that have appreciated. We believe that these new rates
will allow individuals new opportunities in making investment decisions
and will enhance the overall health and liquidity of the markets.
[BULLET] NEW IRA RULES: The new law also relaxes the rules on IRA contributions
and withdrawals and establishes two new types of IRAs: The Roth IRA and
the Education IRA. With the exception of our tax-free portfolios, all
Marquis Funds are appropriate for use in these accounts. We hope you
will select our fund family for these potential new investments.
SEPTEMBER 30, 1997 1
<PAGE>
LETTER TO SHAREHOLDERS
[BULLET] CHANGES TO ESTATE TAXES: The new law gradually raises the amount that
is exempt from gift and estate taxes, starting with an increase to
$625,000 in 1998 and reaching $1 million in the year 2006. This is a
welcome change for a growing number of individuals, as rising values of
such commonly-held assets as investments and homes continue to push
more and more estates over the previous threshold of $600,000.
Due to the complexity of the Taxpayer Relief Act, we encourage all investors to
consult with their tax advisors, as well as their investment consultants,
regarding how to take advantage of the new provisions.
As we close fiscal 1997, we thank you, our investors, for enabling our fund
family to grow larger, stronger, and more diverse. We look forward to continuing
to serve your investment needs.
Sincerely,
/S/ SIGNATURE
Suzanne T. Mestayer
Executive Vice President
First National Bank of Commerce
2 SEPTEMBER 30, 1997
<PAGE>
INVESTMENT ADVISER'S REPORT
DEAR SHAREHOLDER:
For investors, fiscal 1997 was the best of times, and the best of times.
It was the best of times in the U.S. economy, where low inflation and moderate
growth fit the textbook definition of an ideal world.
And, it was the best of times in the financial markets, where all three asset
classes -- stocks, bonds, and money market instruments -- turned in solid
performances.
Of course, economies and markets are never truly perfect, and never move in
straight lines. Pockets of difficulty and concern were readily found in fiscal
1997. But seen in the context of recent decades, the year offered proof that
favorable factors could prevail.
The real test of this economy will be its staying power. The delicate balancing
act performed by growth and inflation is bound to falter, causing either a
"natural" recession brought on by changes in the business cycle, or a more
abrupt slowdown brought on by the actions of the Federal Reserve Board.
For investors, the distinction is more than academic. An ordinary recession may
still offer opportunities for individual companies to prosper through
exceptional products and services, or through productivity enhancements. But an
increase in rates could render all stocks less attractive in comparison to
bonds.
ECONOMIC OVERVIEW
For the fiscal year, the economy, as measured by the Gross Domestic Product,
grew at a rate of about 3.5%. While this pace is best described as moderate,
fears of higher inflation and higher interest rates were present throughout
fiscal 1997, primarily because unemployment was low and labor markets remained
tight. However, wages did not rise rapidly, and pricing power remained weak
for most industries.
In the final analysis, inflation as measured by the Consumer Price Index held to
a relatively low 2.2% for the twelve-month period, while wholesale prices as
measured by the Producer Price Index were flat. As a result, the only action
taken by the Federal Reserve Board was a modest quarter-percent hike in
short-term rates after its March meeting.
Among the key factors holding costs in check were global competition and excess
capacity, which suggested that supply would continue to meet or exceed demand.
In the United States, for example, manufacturing capacity grew at twice the pace
of the 1980s, and the current year-over-year gain is the highest in twenty
years.
Increasingly through 1997, the consensus view indicated that recession may not
be imminent. But there is growing concern that, as one economist put it,
"strange things are happening." Worldwide, for example, Europe is saddled with
high unemployment,
[PHOTO OF JOHN C. PORTWOOD OMITTED]
JOHN C. PORTWOOD, CFA CHIEF TRUST
INVESTMENT STRATEGIST
SEPTEMBER 30, 1997 3
<PAGE>
INVESTMENT ADVISER'S REPORT
Japan is mired in a no-growth economy, and the Pacific Rim countries have
experienced financial turmoil. Together, these events help to cloud the domestic
outlook and increase the chances that the "strange things" will produce a
negative surprise.
STOCK MARKET OVERVIEW
The stock market continued to defy gravity throughout fiscal 1997, turning in a
historic performance. And where the gains had once been concentrated among a few
of the very largest capitalization issues represented on the Standard & Poor's
500 Index, the market began to broaden during the fiscal year, bringing mid-cap
and small-cap issues back into the game. The big story in stocks continued to be
strong corporate profits. The years of painful restructuring have paid off in
rising productivity levels over a wide range of industries, making American
businesses highly competitive in the world markets. This, along with overall
economic growth, has produced a steady stream of good earnings reports -- even
from such laggard industries as airlines, hotels, and steel.
The year was also marked by an exceptional number of stock buyback programs, as
many companies opted to use excess earnings to purchase their own stocks, rather
than to increase dividends.
Occasionally during the year, stocks were shaken by interest rate fears, and by
the Federal Reserve's modest quarter-percent hike in March. However,
[LINE GRAPH OMITTED]
STEADY RATES, LOW INFLATION
10 Year Treasury 30 Year U.S. Treasury Consumer Price Index
10/93 5.427 5.966 2.8
12/93 5.794 6.347 2.7
3/94 6.637 7.016 2.5
6/94 7.210 7.522 2.5
9/94 7.604 7.818 3.0
12/94 7.829 7.877 2.7
3/95 7.194 7.431 2.9
6/95 6.205 6.619 3.0
9/95 6.180 6.506 2.5
12/95 5.572 5.950 2.5
3/96 6.325 6.670 2.8
6/96 6.716 6.895 2.8
9/96 6.675 6.906 3.0
12/96 6.289 6.538 3.3
3/97 6.907 7.090 2.8
6/97 6.453 6.746 2.3
9/97 6.079 6.365 2.2
REAL (INFLATION ADJUSTED) YIELDS ON BONDS SUGGEST GOOD VALUE
FOR FIXED INCOME INVESTORS. AS OF AUGUST 31, 1997, THE REAL
YIELD OF INTERMEDIATE TO LONG-TERM U.S. TREASURY BONDS WAS
MORE THAN FOUR PERCENT COMPARED TO AN AVERAGE OF TWO
PERCENT DURING THE 1960S, THE LAST TIME INFLATION WAS
AS LOW FOR AN EXTENDED PERIOD AS IT IS TODAY.
"THE REAL TEST OF THIS ECONOMY WILL BE ITS STAYING POWER."
JOHN C. PORTWOOD
4 SEPTEMBER 30, 1997
<PAGE>
the market showed remarkable resiliency and recovered quickly from each setback.
The greatest concern for the markets in fiscal 1997 continued to be the high
valuation levels for stocks. At fiscal year-end, the overall price-earnings
ratio for the S&P 500 stood at 24. Any level over 20 has historically been
followed by a significant correction.
BOND MARKET OVERVIEW
After a tepid performance in fiscal 1996, bonds returned to more normal behavior
in 1997, generally returning their coupon yields along with modest capital
gains.
The bellwether 30-year Treasury Bond began the year with a yield of 6.8%, and
ended with a yield of 6.4%.
Mortgage-backed issues and corporate bonds also performed well, although the
narrowing yield spreads between the two led some investors to choose the
relative safety of government-guaranteed mortgage bonds over their corporate
counterparts.
In the municipal markets, stable rates and the absence of any potential "flat
tax" legislation resulted in a favorable environment for tax-conscious
investors.
MONEY MARKET OVERVIEW
The stable interest rate environment was also a positive for taxable and
tax-free money market instruments, which delivered a solid performance during
fiscal 1997. For much of the year, there was little reward for venturing
S&P 500 VALUATION
[LINE GRAPH OMITTED]
THE EXTRAORDINARY RETURNS FROM COMMON STOCKS FOR THE YEAR ENDED
SEPTEMBER 30, 1997 WERE DRIVEN PRIMARILY BY A CHANGE IN
VALUATION. EARNINGS FOR COMPANIES IN THE S&P 500 COMMON STOCK
INDEX, FOR EXAMPLE, ROSE ABOUT 15%. THE MARKETPLACE PUT A
HIGHER VALUE ON THOSE EARNINGS AT THE END OF THE PERIOD COMPARED
TO 12 MONTHS EARLIER, AS SHOWN BY THE RISE IN THE PRICE-TO-EARNINGS
MULTIPLE FROM APPROXIMATELY 19 IN SEPTEMBER 1996 TO 24
IN SEPTEMBER 1997 -- AN INCREASE OF 25%.
[PHOTO OF CHRISTINE C. MONTZ OMITTED]
CHRISTINE C. MONTZ,
DIRECTOR OF TRUST AND INVESTMENTS
SEPTEMBER 30, 1997 5
<PAGE>
INVESTMENT ADVISER'S REPORT
out on the yield curve, leading many investors to remain in short-term
instruments such as overnight repurchase agreements.
OUTLOOK FOR FISCAL 1998
Viewed against the last one hundred years of market history, the recent
resilience of the stock market is remarkable. However, if history is any guide,
it won't always be this way.
While a positive attitude toward the long-term outlook of the economy and
financial markets is appropriate, we believe that the potential for economic
disappointment is growing.
Unforeseen market shocks may come from any direction, whether a resurgence of
inflation, a domestic recession, or a world crisis. With valuations that are
above historical highs, the markets are ill-prepared for any hint of bad news.
Therefore, we recommend that our investors exercise caution and carefully
re-examine their tolerance for risk. In particular, those with greater-
than-normal equity positions should consider trimming back to more conservative
allocations.
Having said that, we believe that the growth of the domestic and global
economies will continue to offer significant opportunities for investors who
adopt a long-term outlook and who are willing to endure any short-term
volatility.
In addition, we pledge that we will continue to manage our stock, bond, and
money market funds with particular attention to valuations, avoiding those
investments that could leave our portfolios vulnerable to sudden changes in
market psychology. And while we cannot immunize ourselves against market
downturns, we can make every effort to select issues with enduring value.
Overall, it remains a very good time to be an investor. We thank you for
choosing to invest in the future through the Marquis Family of Funds.
Sincerely,
/S/ SIGNATURE
John C. Portwood, CFA
Chief Investment Strategist
First National Bank of Commerce
/S/ SIGNATURE
Christine C. Montz
Director of Trust and Investments
First National Bank of Commerce
"THE GROWTH OF THE DOMESTIC AND GLOBAL ECONOMIES WILL CONTINUE TO OFFER
SIGNIFICANT OPPORTUNITIES FOR INVESTORS WHO ADOPT A LONG-TERM OUTLOOK AND WHO
ARE WILLING TO ENDURE ANY SHORT-TERM VOLATILITY."
CHRISTINE C. MONTZ
6 SEPTEMBER 30, 1997
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF
FUND PERFORMANCE
TREASURY SECURITIES
MONEY MARKET FUND
For the twelve months ended September 30, 1997, the Treasury Securities Money
Market Fund generated a total return of 5.04% for Trust shares and 4.83% for
Retail shares from which a 12b-1 charge has been deducted. From inception on
February 26, 1997, the Cash Sweep Class of the Treasury Securities Money Market
Fund generated a total return on an annualized basis of 4.46%. This compares to
a 4.84% return for the IBC/Donoghue U.S. Treasury and Repo Index. The Fund's net
assets increased from $1.049 billion to $1.364 billion over the fiscal year.
For much of the year, the Fund's largest sector weighting consisted of overnight
repurchase agreements collateralized by U.S. Treasury securities. This strategy
was designed to take advantage of a pattern in the yield curve that offered
little reward for venturing out into longer maturities. In addition, it provides
shareholders with an adequate degree of liquidity.
Looking ahead, we do not foresee a near-term slowdown in economic growth that
would cause the Federal Reserve Board to lower interest rates. On the contrary,
we feel there remains a possibility that money market rates could stay stable or
rise. Should this occur, we believe we are well positioned to take advantage of
higher rates by converting our cash assets into longer-term instruments.
TAX EXEMPT
MONEY MARKET FUND
For the twelve months ended September 30, 1997, the Tax Exempt Money Market Fund
generated a total return of 3.12%. This compares to a 3.08% return for the
IBC/Donoghue Tax-Free Index. The Fund's net assets increased from $66.2 million
to $76.7 million over the fiscal year.
Short-term interest rates were stable during most of the fiscal year, except for
a quarter-percent hike by the Federal Reserve Board ("the Fed") in March 1997.
Other fundamental factors in the short-term municipal securities market remained
favorable as well, including steady demand coupled with a declining supply.
In this environment, the Fund was able to follow up on its strong performance of
1996 with another excellent year.
Looking ahead, we see a continuation of current conditions, as moderate economic
growth and low inflation add up to an ideal environment for stability in the
short-term municipal markets. However, any imbalance in such factors as
employment, consumer and producer prices, or consumer sentiment could spur the
Fed to push short-term rates higher.
[PHOTO OF GERALD S. DUGAL OMITTED]
GERALD S. DUGAL, VICE PRESIDENT,
TRUST AND
INVESTMENTS
SEPTEMBER 30, 1997 7
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF
FUND PERFORMANCE
GOVERNMENT SECURITIES FUND
For the twelve months ended September 30, 1997, the Government Securities Fund
generated a total return of 8.22% for Class A shares without a sales load, 4.46%
for Class A shares from which a sales charge has been deducted, and 3.90% for
Class B shares from which a sales charge has been deducted. This compares to a
7.83% return for the Lehman Intermediate Government Bond Index.
The Fund's holdings, which consist primarily of obligations issued or guaranteed
as to principal and interest by the U.S. Government and its agencies or
instrumentalities, ended the fiscal year with an average weighted maturity of
6.0 years, and a weighted average duration of 3.7 years.
The Fund's strong performance for the fiscal year was attributable to a
favorable economic environment, along with portfolio strategies that enhanced
yields.
The domestic economy continued to benefit from low inflation, despite moderate
economic growth and the lowest unemployment levels in decades. As a result, the
Federal Reserve Board found little cause to increase interest rates. Outside of
a modest hike in short-term rates in March 1997, bonds enjoyed a relatively
stable environment for most of the fiscal year.
Throughout the year, the Fund maintained its strategy of overweighting the
non-callable sector of the government market, with Treasury and agency
securities representing over half of the portfolio. The balance of the portfolio
was composed primarily of mortgage-backed instruments and collateralized
mortgage obligations, which provided incremental yield without compromising
quality. The short-term portion of the portfolio was held to only about 4%
during most of the period.
Looking ahead, we see a continuation of the favorable economic trends that have
prevailed over the past year. Long-term interest rates are declining worldwide,
while the domestic economy continues to experience moderate growth with low
inflation. We believe that good values are plentiful in the government bond
markets and that real rates are attractive relative to historical norms.
In light of these conditions, we plan to continue our strategy of pursuing high
quality and above-average yields. We will view any cyclical upswings in yields
as buying opportunities.
[PHOTO OF CAPITOL OMITTED]
[PHOTO OF KEVIN P. REED OMITTED]
KEVIN P. REED,
SENIOR VICE PRESIDENT, TRUST AND
INVESTMENTS
8 SEPTEMBER 30, 1997
<PAGE>
[PHOTO OF MAN OMITTED]
- -----------------------------------------------
AVERAGE AVERAGE AVERAGE
ANNUAL ANNUAL ANNUAL
CLASS ONE YEAR 3 YEAR 5 YEAR 10 YEAR
OF SHARES RETURN RETURN RETURN RETURN
- -----------------------------------------------
CLASS A WITHOUT
LOAD 8.22% 7.69% 5.50% 7.93%
- -----------------------------------------------
CLASS A WITH
LOAD 4.46 6.42 4.75 7.54
- -----------------------------------------------
CLASS B WITHOUT
LOAD 7.40 6.87 4.89 7.61
- -----------------------------------------------
CLASS B WITH
LOAD 3.90 6.28 4.81 7.61
- -----------------------------------------------
FOR THE PERIOD ENDED SEPTEMBER 30, 1997.
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 1.25% FOR THE FOUR-YEAR
HOLDING PERIOD. THE PERFORMANCE QUOTED INCLUDES PAST PERFORMANCE OF THE COMMON
TRUST FUND MANAGED BY FIRST NATIONAL BANK OF COMMERCE, ADJUSTED FOR FEES AND
EXPENSES, FOR THE PERIODS PRIOR TO THE INCEPTION OF THE GOVERNMENT SECURITIES
FUND. THE COMMON TRUST FUND WAS NOT REGISTERED UNDER THE 1940 ACT AND THEREFORE
WAS NOT SUBJECT TO CERTAIN INVESTMENT RESTRICTIONS WHICH MAY HAVE ADVERSELY
AFFECTED PERFORMANCE. THE PERFORMANCE OF THE LEHMAN INTERMEDIATE GOVERNMENT BOND
INDEX AND THE LIPPER INTERMEDIATE U.S. GOVERNMENT AVERAGE DOES NOT INCLUDE
ANNUAL OPERATING EXPENSES WHICH ARE EXPERIENCED BY THE FUND.
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
[LINE GRAPH OMITTED]
CLASS A
Government Government Lehman Intermediate Lipper Intermediate
Securities Securities Fund, Government Bond U.S. Government
Fund w/load Index Average
9/87 10000 9650 10000 10000
9/88 11095 10707 11062 11140
9/89 11990 11571 12127 12185
9/90 12852 12403 13168 13076
9/91 14660 14146 14956 14925
9/92 16401 15827 16818 16699
9/93 17897 17270 18105 18068
9/94 17602 16986 17833 17400
9/95 19510 18827 19727 19345
9/96 20309 19599 20733 20088
9/97 21439 20689 22356 21729
[LINE GRAPH OMITTED]
CLASS B
Government Government Lehman Intermediate Lipper Intermediate
Securities Securities Fund, Government Bond U.S. Government
Fund w/load Index Average
9/87 10000 10000 10000 10000
9/88 11095 11095 11062 11140
9/89 11990 11990 12127 12185
9/90 12852 12852 13168 13076
9/91 14660 14660 14956 14925
9/92 16401 16401 16818 16699
9/93 17457 17457 18105 18068
9/94 17059 17059 17833 17400
9/95 18782 18782 19727 19345
9/96 19389 19389 20733 20088
9/97 20824 20824 22356 21729
SEPTEMBER 30, 1997 9
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF
FUND PERFORMANCE
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE STRATEGIC
INCOME BOND FUND VERSUS THE SALOMON BROAD BOND INDEX, AND THE LIPPER CORPORATE
DEBT BBB RATED AVERAGE, AND THE LEHMAN AGGREGATE BOND INDEX
[LINE GRAPH OMITTED]
CLASS A
Strategic Strategic Salomon Lipper Lehman
Income Income Broad Corporate Aggregate
Bond Bond Fund Bond Debt BBB Bond
Fund w/load Index Rated Average Index
1/97 10000 9650 10000 10000 10000
2/97 9935 9587 10011 10046 10025
3/97 9765 9423 9910 9900 9914
4/97 9927 9580 10052 10041 10062
5/97 10009 9658 10146 10149 10158
6/97 10146 9791 10267 10294 10279
7/97 10506 10138 10545 10638 10556
8/97 10363 10000 10454 10505 10467
9/97 10550 10180 10608 10682 10622
[LINE GRAPH OMITTED]
CLASS B
Strategic Strategic Salomon Lipper Lehman
Income Income Broad Corporate Aggregate
Bond Bond Fund Bond Debt BBB Bond
Fund w/load Index Rated Average Index
1/97 10000 10000 10000 10000 10000
2/97 9939 9939 10011 10046 10025
3/97 9766 9766 9910 9900 9914
4/97 9913 9913 10052 10041 10062
5/97 10000 10000 10146 10149 10158
6/97 10120 10120 10267 10294 10279
7/97 10473 10473 10545 10638 10556
8/97 10335 10335 10454 10505 10467
9/97 10504 10154 10608 10682 10622
- -------------------------------------------------------
CLASS ANNUALIZED INCEPTION CUMULATIVE INCEPTION
OF SHARES TO DATE TO DATE
- -------------------------------------------------------
CLASS A WITHOUT
LOAD 8.26% 5.50%
- -------------------------------------------------------
CLASS A WITH
LOAD 2.77 1.83
- -------------------------------------------------------
CLASS B WITHOUT
LOAD 7.57 5.04
- -------------------------------------------------------
CLASS B WITH
LOAD 2.33 1.54
- -------------------------------------------------------
FOR THE PERIOD ENDED SEPTEMBER 30, 1997.
PAST PERFORMANCE OF THE FUND IS NOT PREDICTIVE OF FUTURE PERFORMANCE. CLASS A
AND B SHARES WERE OFFERED BEGINNING JANUARY 31, 1997. 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 SALOMON BROAD BOND
INDEX, THE LIPPER CORPORATE DEBT BBB RATED AVERAGE, AND THE LEHMAN AGGREGATE
BOND INDEX DOES NOT INCLUDE ANNUAL OPERATING EXPENSES WHICH ARE EXPERIENCED BY
THE FUND.
STRATEGIC INCOME BOND FUND
From its inception on January 31, 1997, the Strategic Income Bond Fund generated
a total return on an annualized basis of 8.26% for Class A shares without a
sales load, 2.77% for Class A shares from which a sales charge has been
deducted, and 2.33% for Class B shares from which a sales charge has been
deducted. This compares to a 9.74% return for the Lehman Aggregate Bond Index
and 9.70% for the Salomon Broad Bond Index. The Fund's net assets reached $16.0
million by the end of the fiscal year.
During fiscal 1997, the Fund increased its weighting in high-quality corporate
bonds, which at year-end represented nearly two-thirds of the total portfolio.
The balance of the portfolio was composed primarily of Federal agency
mortgage-backed instruments. This approach allowed us to capture the higher
yields currently available in corporate issues.
Looking ahead, we believe that the current interest rate environment offers good
opportunities for fixed income investors, with our forecasts showing stable
interest rates for the near-term future.
However, we remain concerned that an unforeseen event, such as the economy
running at full capacity -- and any inflationary side effects of this
scenario -- or an upward spike in oil prices, could have an adverse impact on
the fixed income markets.
10 SEPTEMBER 30, 1997
<PAGE>
LOUISIANA TAX-FREE
INCOME FUND
For the twelve months ended September 30, 1997, the Louisiana Tax-Free Income
Fund generated a total return of 7.77% for Class A shares without a sales load,
3.95% for Class A shares from which a sales charge has been deducted, and 3.49%
for Class B shares from which a sales charge has been deducted. This compares to
a 7.22% return for the Lipper Intermediate Municipal Fund Index and a 9.03%
return for the Lehman Municipal Bond Index. The Fund's net assets increased from
$21.6 million to $39.6 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 8.5 years, an average duration of 6.4 years, and
a weighted average quality rating of AAA.
Throughout the fiscal year, the Fund benefited from a stable interest rate
environment, as economic growth and inflation remained low. These conditions set
the stage for a period in which the fund was able to deliver its full coupon
yields, as well as some modest capital gains.
For most of the year, the Fund was overweighted in the highest quality sectors
of the Louisiana bond market. This somewhat defensive posture was designed to
shield against any fallout from the recent closing of a major
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE
LOUISIANA TAX-FREE INCOME FUND VERSUS THE LIPPER INTERMEDIATE MUNICIPAL
FUND INDEX, THE LEHMAN MUNICIPAL BOND INDEX,
AND THE LEHMAN 10-YEAR MUNICIPAL BOND INDEX
[LINE GRAPH OMITTED]
CLASS A
Louisiana Louisiana Lipper Lehman Lehman
Tax-Free Tax-Free Income Intermediate Municipal 10-Year
Income Fund Municipal Bond Municipal
Fund w/load Fund Index Index Bond Index
10/93 10000 9650 10000 10000 10000
3/94 9564 9229 9707 9566 9592
9/94 9719 9379 9861 9738 9801
3/95 10138 9784 10251 10276 10314
9/95 10597 10226 10723 10827 10958
3/96 10823 10445 10954 11138 11228
9/96 11071 10684 11192 11482 11488
3/97 11317 10921 11420 11747 11812
9/97 11932 11514 11998 12519 12580
[LINE GRAPH OMITTED]
CLASS B
Louisiana Louisiana Lipper Lehman Lehman
Tax-Free Tax-Free Income Intermediate Municipal 10-Year
Income Fund Municipal Bond Municipal
Fund w/load Fund Index Index Bond Index
10/93 10000 10000 10000 10000 10000
3/94 9642 9642 9769 9650 9671
9/94 9753 9753 9925 9824 9882
3/95 10136 10136 10317 10367 10399
9/95 10554 10554 10792 10923 11049
3/96 10741 10741 11024 11237 11321
9/96 10934 10934 11264 11584 11583
3/97 11147 11147 11493 11851 11910
9/97 11698 11573 12075 12630 12684
- ----------------------------------------------------
AVERAGE ANNUAL AVERAGE ANNUAL
CLASS ONE YEAR 3 YEAR RETURN INCEPTION
OF SHARES RETURN RETURN TO DATE
- ----------------------------------------------------
CLASS A WITHOUT
LOAD 7.77% 7.07% 4.55%
- ----------------------------------------------------
CLASS A WITH
LOAD 3.95 5.81 3.63
- ----------------------------------------------------
CLASS B WITHOUT
LOAD 6.99 6.25 4.23
- ----------------------------------------------------
CLASS B WITH
LOAD 3.49 5.65 3.94
- ----------------------------------------------------
FOR THE PERIOD ENDED SEPTEMBER 30, 1997.
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 1.25% FOR THE FOUR-YEAR
HOLDING PERIOD. THE PERFORMANCE OF THE LIPPER INTERMEDIATE MUNICIPAL FUND INDEX,
THE LEHMAN MUNICIPAL BOND INDEX, AND THE LEHMAN 10-YEAR MUNICIPAL BOND INDEX
DOES NOT INCLUDE ANNUAL OPERATING EXPENSES WHICH ARE EXPERIENCED BY THE FUND.
SEPTEMBER 30, 1997 11
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF
FUND PERFORMANCE
LOUISIANA TAX-FREE INCOME FUND (CONTINUED)
casino in New Orleans. Ultimately, however, increased tax revenues from the
ongoing boom in the energy industry have far outweighed the casino-related
losses.
Looking ahead, we remain positive about the future of Louisiana-based municipal
issues, as the state's economy continues to grow and supply/demand factors
point to relatively stable prices. However, we plan to maintain our bias toward
the highest quality issues. We will stay alert to signs of inflationary
pressures that could impact total returns.
BALANCED FUND
For the twelve months ended September 30, 1997, the Balanced Fund generated a
total return of 26.10% for Class A shares without a sales load, 21.69% for Class
A shares from which a sales charge has been deducted, and 21.69% for Class B
shares from which a sales charge has been deducted. This compares to a 24.03%
return for the Lipper Balanced Funds Average, a 40.43% return for the S&P 500
Composite Index, and a 7.83% return for the Lehman Intermediate Govern-ment Bond
Index. The Fund's net assets increased from $116.4 million to $138.9 million
over the fiscal year.
During the year, the Fund shifted to a somewhat more aggressive position,
increasing its proportion of stocks to about 55% of the portfolio, while bond
holdings represented about 40% and cash about 5%. This ratio reflected our
increasing confidence in the economy, which continued to demonstrate a
surprising combination of moderate growth and low inflation. The Fund's
proportions proved to be justified, as stocks outperformed bonds by a
significant margin.
The bond portion of the Fund produced solid gains through a combination of
coupon yields and capital appreciation. Bonds benefited from a relatively stable
environment in which rates actually declined somewhat over the course of the
fiscal year.
The Fund continued to emphasize intermediate-term government bonds for their
relative safety and stability. In
[PHOTO OF GREG W. HODLEWSKY OMITTED]
GREG W. HODLEWSKY,
VICE PRESIDENT, TRUST AND
INVESTMENTS
12 SEPTEMBER 30, 1997
<PAGE>
addition, we increased the proportion of mortgage-backed securities in order to
take advantage of incremental yield opportunities. Mortgage-backed instruments
were favored over corporate bonds, due to the fact that they offered a superior
risk/return profile in the market at that time.
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
as the value and growth sectors exchanged leadership positions during the course
of the year.
The stock portfolio maintained a relatively defensive posture, with a bias
toward issues in the banking, consumer nondurables, and energy industries, where
price-earnings ratios tend to be below average. Among the better performers in
the portfolio were Parker-Hannifin, Tech Data Corp, SLM Holding Corp, and
Compaq.
Looking ahead, we believe the Balanced Fund remains well positioned for the
current environment, which offers the potential for strong returns from both
bonds and stocks. We anticipate a continuation of the favorable economic
climate, as global competition serves to prevent sharp price increases, while
productivity improvements help to boost corporate profits.
Still, we remain alert to the possibility of inflationary pressures which could
lead the Federal Reserve Board to hike interest rates. Therefore, we do not
currently anticipate any major changes in the Fund's proportions or in its
underlying investment strategies.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE
BALANCED FUND VERSUS THE WILSHIRE MID-CAP VALUE INDEX, THE S&P 500 COMPOSITE
INDEX, THE LEHMAN INTERMEDIATE GOVERNMENT BOND INDEX AND THE LIPPER BALANCED
FUNDS AVERAGE
[LINE GRAPH OMITTED]
CLASS A
Wilshire Lehman Lipper
Balanced Mid-Cap S&P 500 Intermediate Balanced
Balanced Fund Value Composite Government Funds
Fund w/load Index Index Bond Index Average
10/93 10000 9650 10000 10000 10000 10000
3/94 9752 9411 9605 9646 9807 9712
9/94 9859 9514 9870 10159 9827 9882
3/95 10365 10002 10342 11145 10227 10396
9/95 11593 11188 12469 13176 10871 11767
3/96 12272 11843 13611 14718 11158 12579
9/96 12649 12207 13823 15853 11426 13224
3/97 13303 12838 15146 17635 11686 13946
9/97 15950 15393 18888 22264 12321 16396
[LINE GRAPH OMITTED]
CLASS B
Wilshire Lehman Lipper
Balanced Mid-Cap S&P 500 Intermediate Balanced
Balanced Fund Value Composite Government Funds
Fund w/load Index Index Bond Index Average
10/93 10000 10000 10000 10000 10000 10000
3/94 9726 9726 9605 9646 9807 9712
9/94 9788 9788 9870 10159 9827 9882
3/95 10250 10250 10342 11145 10227 10396
9/95 11428 11428 12469 13176 10871 11767
3/96 12052 12052 13611 14718 11158 12579
9/96 12376 12376 13823 15853 11426 13224
3/97 12969 12969 15146 17635 11686 13946
9/97 15494 15369 18888 22264 12321 16396
- ----------------------------------------------
AVERAGE AVERAGE
ANNUAL ANNUAL RETURN
CLASS ONE YEAR 3 YEAR INCEPTION
OF SHARES RETURN RETURN TO DATE
- ----------------------------------------------
CLASS A WITHOUT
LOAD 26.10% 17.40% 12.50%
- ----------------------------------------------
CLASS A WITH
LOAD 21.69 16.00 11.51
- ----------------------------------------------
CLASS B WITHOUT
LOAD 25.19 16.54 11.76
- ----------------------------------------------
CLASS B WITH
LOAD 21.69 16.05 11.53
- ----------------------------------------------
FOR THE PERIOD ENDED SEPTEMBER 30, 1997.
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 1.25% FOR THE FOUR-YEAR
HOLDING PERIOD. THE PERFORMANCE OF THE WILSHIRE MID-CAP VALUE INDEX, THE S&P 500
COMPOSITE INDEX, THE LEHMAN INTERMEDIATE GOVERNMENT BOND INDEX, AND THE LIPPER
BALANCED FUNDS AVERAGE DOES NOT INCLUDE ANNUAL OPERATING EXPENSES WHICH ARE
EXPERIENCED BY THE FUND.
SEPTEMBER 30, 1997 13
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF
FUND PERFORMANCE
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE VALUE EQUITY FUND VERSUS THE WILSHIRE MID-CAP VALUE INDEX,
THE S&P 500 COMPOSITE INDEX, AND THE LIPPER EQUITY INCOME AVERAGE
[LINE GRAPH OMITTED]
CLASS A
Value Wilshire S&P Lipper
Value Equity Mid-Cap 500 Equity
Equity Fund, Value Composite Income
Fund w/load Index Index Average
9/87 10000 9650 10000 10000 10000
9/88 8865 8555 10068 8760 9624
9/89 10844 10464 12730 11646 12026
9/90 9862 9517 9476 10571 10470
9/91 12669 12226 14086 13858 13427
9/92 13068 12611 16888 15395 14930
9/93 15650 15103 21625 17387 17612
9/94 15395 14857 21126 18029 17959
9/95 19264 18590 26688 23383 21588
9/96 21842 21077 29589 28135 25289
9/97 31730 30619 40431 39510 33925
[LINE GRAPH OMITTED]
CLASS B
Value Wilshire S&P Lipper
Value Equity Mid-Cap 500 Equity
Equity Fund, Value Composite Income
Fund w/load Index Index Average
9/87 10000 10000 10000 10000 10000
9/88 8865 8865 10068 8760 9624
9/89 10844 10844 12730 11646 12026
9/90 9862 9862 9476 10571 10470
9/91 12669 12669 14086 13858 13427
9/92 13068 13068 16888 15395 14930
9/93 15650 15650 21625 17387 17612
9/94 15305 15305 21126 18029 17959
9/95 19004 19004 26688 23383 21588
9/96 21377 21377 29589 28135 25289
9/97 30850 30850 40431 39510 33925
- ---------------------------------------------------------
AVERAGE AVERAGE AVERAGE
CLASS ONE YEAR ANNUAL 3 ANNUAL 5 ANNUAL 10
OF SHARES RETURN YEAR RETURN YEAR RETURN YEAR RETURN
- ---------------------------------------------------------
CLASS A WITHOUT
LOAD 45.27% 27.26% 19.41% 12.24%
- ---------------------------------------------------------
CLASS A WITH
LOAD 40.17 25.76 18.59 11.83
- ---------------------------------------------------------
CLASS B WITHOUT
LOAD 44.31 26.32 18.74 11.92
- ---------------------------------------------------------
CLASS B WITH
LOAD 40.81 25.90 18.69 11.92
- ---------------------------------------------------------
FOR THE PERIOD ENDED SEPTEMBER 30, 1997.
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 1.25% FOR THE FOUR-YEAR
HOLDING PERIOD. THE PERFORMANCE QUOTED INCLUDES PAST PERFORMANCE OF THE COMMON
TRUST FUND MANAGED BY FIRST NATIONAL BANK OF COMMERCE ADJUSTED FOR FEES AND
EXPENSES. THE COMMON TRUST FUND WAS NOT REGISTERED UNDER THE 1940 ACT AND
THEREFORE WAS NOT SUBJECT TO CERTAIN INVESTMENT RESTRICTIONS WHICH MAY HAVE
ADVERSELY AFFECTED PERFORMANCE. THE PERFORMANCE OF THE WILSHIRE MID-CAP VALUE
INDEX, THE S&P 500 COMPOSITE INDEX, AND THE LIPPER EQUITY INCOME AVERAGE DOES
NOT INCLUDE ANNUAL OPERATING EXPENSES WHICH ARE EXPERIENCED BY THE FUND.
VALUE EQUITY FUND
For the twelve months ended September 30, 1997, the Value Equity Fund generated
a total return of 45.27% for Class A shares without a sales load, 40.17% for
Class A shares from which a sales charge has been deducted, and 40.81% for Class
B shares from which a sales charge has been deducted. This compares to a 36.64%
return for the Wilshire Mid-Cap Value Index and a 40.43% return for the S&P 500
Composite Index. The Fund's net assets increased from $97.5 million to $144.1
million over the fiscal year.
The Fund's strong performance is attributable to a resurgence in the "value"
sector of the market and to portfolio decisions made throughout the year.
For the first half of fiscal 1997, the markets were dominated by a small group
of large multinational companies represented in the upper echelon of the S&P 500
Composite Index. However, as the increasingly high valuations of these issues
began to raise eyebrows among even the most optimistic investors, market
sentiment shifted somewhat toward stocks with more reasonable multiples,
particularly in the long-dormant small- and mid-cap sectors.
Throughout the year, the Fund maintained its relatively defensive posture,
emphasizing large- and mid-cap issues whose price-earnings ratios were well
below the market average.
14 SEPTEMBER 30, 1997
<PAGE>
One goal of this strategy is to protect the portfolio against the full impact of
any downturns in the market. And when put to the test in March 1997 by a ten
percent drop in the overall market, our strategy did in fact result in a lesser
decline.
The portfolio continued to be heavily weighted in a variety of industries where
multiples tend to remain lower, such as banking, consumer nondurables, selective
technology companies, and energy/minerals. However, we have deliberately avoided
any attempt to focus on broad sectors of the market, preferring to select issues
based on their individual merits.
Among the strongest performers in our portfolio during the past twelve months
were SCI Systems, Transocean Offshore, BankAmerica, and Cummins Engine.
Looking ahead, we plan to continue our emphasis on undervalued stocks that offer
above-average growth prospects and the chance for positive earnings surprises.
We believe that these issues will continue to offer a favorable combination of
capital appreciation potential and below-average risk.
GROWTH EQUITY FUND
For the twelve months ended September 30, 1997, the Growth Equity Fund generated
a total return of 31.25% for Class A shares without a sales load, 26.64% for
Class A shares from which a sales charge has been deducted, and 26.91% for Class
B shares from which a sales charge has been deducted. This compares to a 41.48%
return for the S&P 500/BARRA Growth Index and a 25.95% return for the Wilshire
Mid-Cap Growth Index. While the Fund has characteristics in common with both
indices, it more closely reflects the capitalization levels of the Wilshire
Mid-Cap Growth Index. The Fund's net assets increased from $18.5 million to
$33.4 million over the fiscal year.
Coming off a very strong fiscal 1996, the Fund continued to benefit from a surge
in enthusiasm for growth-oriented companies. Along with the overall stock
market, this sector has benefited from the favorable combination of moderate
economic growth, low inflation, and strong inflows of investor funds. Moreover,
growth companies have enjoyed special attention as the source of products and
services that boost productivity, making today's economic environment possible.
With significant holdings in the technology sector, as well as in healthcare,
manufacturing, and consumer nondurables, the Fund participated fully in this
ongoing rally.
"WITH SIGNIFICANT HOLDINGS IN THE TECHNOLOGY SECTOR, AS WELL AS IN HEALTHCARE,
MANUFACTURING, AND CONSUMER NONDURABLES, THE GROWTH EQUITY FUND PARTICIPATED
FULLY IN THIS ONGOING RALLY."
JOHN C. PORTWOOD
SEPTEMBER 30, 1997 15
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF
FUND PERFORMANCE
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE GROWTH EQUITY
FUND VERSUS THE WILSHIRE MID-CAP GROWTH INDEX, THE S&P 500/BARRA GROWTH INDEX,
AND THE LIPPER GROWTH FUNDS AVERAGE
[LINE GRAPH OMITTED]
CLASS A
Growth Wilshire S&P 500/ Lipper
Growth Equity Mid-Cap BARRA Growth
Equity Fund Growth Growth Funds
Fund w/load Index Index Average
3/96 10000 9650 10000 10000 10000
6/96 10496 10129 10315 10701 10456
9/96 10966 10583 10599 11078 10765
12/96 11368 10970 10736 11883 11340
3/97 11165 10755 10176 12308 11207
6/97 13034 12578 11790 14804 12985
9/97 14393 13889 13351 15674 14363
[LINE GRAPH OMITTED]
CLASS B
Growth Wilshire S&P 500/ Lipper
Growth Equity Mid-Cap BARRA Growth
Equity Fund Growth Growth Funds
Fund w/load Index Index Average
4/96 10000 10000 10000 10000 10000
6/96 10232 10232 9738 10498 10128
9/96 10658 10658 10005 10867 10427
12/96 11037 11037 10135 11657 10984
3/97 10825 10825 9607 12073 10856
6/97 12609 12609 11130 14522 12577
9/97 13898 13898 12604 15376 13912
- ---------------------------------------------
CLASS ONE YEAR AVERAGE ANNUAL RETURN
OF SHARES RETURN INCEPTION TO DATE
- ---------------------------------------------
CLASS A WITHOUT
LOAD 31.25% 26.43%
- ---------------------------------------------
CLASS A WITH
LOAD 26.64 23.61
- ---------------------------------------------
CLASS B WITHOUT
LOAD 30.41 27.04
- ---------------------------------------------
CLASS B WITH
LOAD 26.91 25.34
- ---------------------------------------------
FOR THE PERIOD ENDED SEPTEMBER 30, 1997.
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 2.00% FOR THE THREE-YEAR HOLDING
PERIOD. THE PERFORMANCE OF THE WILSHIRE MID-CAP GROWTH INDEX, THE S&P 500/BARRA
GROWTH INDEX AND THE LIPPER GROWTH FUNDS AVERAGE DOES NOT INCLUDE ANNUAL
OPERATING EXPENSES WHICH ARE EXPERIENCED BY THE FUND.
GROWTH EQUITY FUND (CONTINUED)
Among the best performers in the portfolio for the fiscal year were computer
issues such as Compaq Corporation, Dell Computer, and Gateway 2000, as well as
healthcare leaders such as Eli Lilly, Merck, and Schering-Plough.
Looking ahead, we are concerned that the level of optimism about the economy in
general and growth stocks in particular may be reaching the level of excess.
Therefore, we continue to manage the Growth Equity Fund in a conservative
manner. We have trimmed our technology holdings in recent months and continue to
avoid those issues whose prices reflect overconfidence in the future. And while
we believe there are still many opportunities available to growth-oriented
investors, we are keenly aware of the risks that are inherent in today's
superheated market.
16 SEPTEMBER 30, 1997
<PAGE>
SMALL CAP EQUITY FUND
For the twelve months ended September 30, 1997, the Small Cap Equity Fund
generated a return of 20.60% for Class A shares without a sales load, 16.35% for
Class A shares from which a sales charge has been deducted, and 16.32% for Class
B shares from which a sales charge has been deducted. This compares to a 23.36%
return for the Russell 2000 Growth Index for the same period. The Fund's net
assets reached $4.3 million by the end of the fiscal year.
Small-cap growth stocks generally underperformed for much of the fiscal year, as
large-cap issues continued to dominate the equity markets. However, as the final
quarter approached, the small-cap sector began to gain momentum and appeared to
be poised for a sustainable revival.
The Marquis Small Cap Equity Fund currently invests substantially all of its
assets in the SEI Institutional Managed Trust Small Cap Growth Portfolio.
The portfolio was hampered somewhat by weakness in individual technology and
pharmaceutical issues. However, favorable stock selection in the producer goods
and energy sectors helped to compensate for these weaknesses.
Among the portfolio's best performers for the year were Cliffs Drilling and
Patterson Energy in the oil services sector, Imperial Credit Industries and
Astoria Financial Corp. in the financial services sector, and Medaphys in the
healthcare sector.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE SMALL CAP EQUITY FUND VERSUS THE
RUSSELL 2000 GROWTH INDEX AND THE LIPPER SMALL CAP FUNDS AVERAGE
[LINE GRAPH OMITTED]
CLASS A
Small Small Cap Russell Lipper
Cap Equity 2000 Small Cap
Equity Fund, Growth Funds
Fund w/load Index Average
4/92 10000 9650 10000 10000
9/92 10664 10291 9522 9895
3/93 12496 12059 10937 11734
9/93 14663 14150 12301 13161
3/94 14574 14064 12110 13121
9/94 14663 14150 12408 13441
3/95 15921 15364 12992 14193
9/95 20731 20005 15904 17328
3/96 22273 21493 17067 18764
9/96 26180 25263 17910 20586
3/97 22135 21360 16074 19656
9/97 31573 30468 22092 26828
[LINE GRAPH OMITTED]
CLASS B
Small Small Cap Russell Lipper
Cap Equity 2000 Small Cap
Equity Fund, Growth Funds
Fund w/load Index Average
4/92 10000 10000 10000 10000
9/92 10610 10610 9522 9895
3/93 12389 12389 10937 11734
9/93 14490 14490 12301 13161
3/94 14357 14357 12110 13121
9/94 14377 14377 12408 13441
3/95 15540 15540 12992 14193
9/95 20171 20171 15904 17328
3/96 21604 21604 17067 18764
9/96 25263 25263 17910 20586
3/97 21309 21309 16074 19656
9/97 30272 30272 22092 26828
- ----------------------------------------------------------
AVERAGE
AVERAGE AVERAGE ANNUAL RETURN
CLASS ONE YEAR ANNUAL 3 ANNUAL 5 INCEPTION
OF SHARES RETURN YEAR RETURN YEAR RETURN TO DATE
- ----------------------------------------------------------
CLASS A WITHOUT
LOAD 20.60% 29.13% 24.24% 23.50%
- ----------------------------------------------------------
CLASS A WITH
LOAD 16.35 27.63 23.39 22.71
- ----------------------------------------------------------
CLASS B WITHOUT
LOAD 19.82 28.17 23.33 22.59
- ----------------------------------------------------------
CLASS B WITH
LOAD 16.32 27.76 23.29 22.59
- ----------------------------------------------------------
FOR THE PERIOD ENDED SEPTEMBER 30, 1997.
PAST PERFORMANCE OF THE FUND IS NOT PREDICTIVE OF FUTURE PERFORMANCE. CLASS A
AND B SHARES WERE OFFERED BEGINNING JANUARY 31, 1997. PERFORMANCE OF THE CLASS A
SHARES REFLECTS THE MAXIMUM FRONT END SALES CHARGE OF 3.50%. CLASS B SHARES
REFLECT THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 3.50% FOR THE ONE-YEAR
HOLDING PERIOD. THE PERFORMANCE QUOTED FOR THE MARQUIS SMALLCAP EQUITY FUND
REPRESENTS INFORMATION RELATING TO THE SEI INSTITUTIONAL MANAGED TRUST SMALL CAP
GROWTH PORTFOLIO. THE MARQUIS SMALL CAP EQUITY FUND INVESTS SUBSTANTIALLY ALL OF
ITS ASSETS IN THE SEI INSTITUTIONAL MANAGED TRUST SMALLCAP GROWTH PORTFOLIO. THE
PERFORMANCE INFORMATION CONTAINED HEREIN HAS BEEN ADJUSTED TO REFLECT THE ACTUAL
FEES AND EXPENSES OF THE MARQUIS SMALLCAP EQUITY FUND, WHOSE FEES AND EXPENSES
ARE HIGHER THAN THOSE OF THE SEIINSTITUTIONAL MANAGED TRUST SMALL CAP GROWTH
PORTFOLIO. THE SEI INSTITUTIONAL MANAGED TRUST SMALL CAP GROWTH PORTFOLIO SHARES
WERE OFFERED BEGINNING APRIL 20, 1992. THE PERFORMANCE OF THE RUSSELL 2000
GROWTH INDEX AND THE LIPPER SMALL CAP FUNDS AVERAGE DOES NOT INCLUDE ANNUAL
OPERATING EXPENSES WHICH ARE EXPERIENCED BY THE FUND.
SEPTEMBER 30, 1997 17
<PAGE>
MANAGEMENT'S DISCUSSION & ANALYSIS OF
FUND PERFORMANCE
SMALL CAP EQUITY FUND (CONTINUED)
Looking ahead, we see strong signs of continued strength in small-cap issues,
and are pleased to note that growth stocks have begun to close the gap on the
value stocks, which had been in the lead during much of fiscal 1997.
In light of these positive trends, we plan to maintain sector weightings and
market capitalization levels that are fundamentally the same as those of the
Russell 2000 Growth Index. We believe that this strategy will allow investors to
add a representative sampling of the small-cap growth sector to their overall
portfolios.
INTERNATIONAL EQUITY FUND
For the twelve months ended September 30, 1997, the International Equity Fund
generated a return of 9.71% for Class A shares without a sales load, 5.84% for
Class A shares from which a sales charge has been deducted, and 5.52% for Class
B shares from which a sales charge has been deducted. This compares to a 12.19%
return for the MSCI EAFE Index for the same period. The Fund's net assets
reached $3.8 million by the end of the fiscal year.
The Marquis International Equity Fund invests substantially all of its assets in
the SEI International Trust International Equity Portfolio.
A robust economy in the United Kingdom, along with modest gains in France and
Germany, led to strong performance for the portfolio's European holdings. This
stood in sharp contrast to the Asian markets, which continued to suffer from
ongoing economic malaise in Japan and currency crises in the emerging markets
of Malaysia and Thailand.
The portfolio's performance was also dampened somewhat by its small-cap
holdings, which comprise roughly 20% of the portfolio, at a time when the
small-cap sector has been out of favor in both Europe and Asia.
Looking ahead, we believe that the recent setbacks in Asia and the global
small-cap sector will be temporary in nature, and represent normal cycles in a
global investment strategy. Further, we remain optimistic that the world-
"WE SEE STRONG SIGNS OF CONTINUED STRENGTH IN SMALL-CAP ISSUES."
KEVIN P. REED
18 SEPTEMBER 30, 1997
<PAGE>
wide economic expansion will continue to provide significant opportunities for
investors who seek diversification beyond U.S. borders.
[PHOTO OF WOMAN OMITTED]
- ---------------------------------------------------
AVERAGE AVERAGE AVERAGE
ANNUAL ANNUAL ANNUAL RETURN
CLASS ONE YEAR 3 YEAR 5 YEAR INCEPTION
OF SHARES RETURN RETURN RETURN TO DATE
- ---------------------------------------------------
CLASS A WITHOUT
LOAD 9.71% 7.68% 9.76% 5.06%
- ---------------------------------------------------
CLASS A WITH
LOAD 5.84 6.40 8.99 4.58
- ---------------------------------------------------
CLASS B WITHOUT
LOAD 9.01 6.87 8.93 4.25
- ---------------------------------------------------
CLASS B WITH
LOAD 5.52 6.32 8.86 4.25
- ---------------------------------------------------
FOR THE PERIOD ENDED SEPTEMBER 30, 1997.
PAST PERFORMANCE OF THE FUND IS NOT PREDICTIVE OF FUTURE PERFORMANCE. CLASS A
AND B SHARES WERE OFFERED BEGINNING JANUARY 31, 1997. PERFORMANCE OF THE CLASS A
SHARES REFLECTS THE MAXIMUM FRONT END SALES CHARGE OF 3.50%. CLASS B SHARES
REFLECT THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE OF 3.50% FOR THE ONE-YEAR
HOLDING PERIOD. THE PERFORMANCE QUOTED FOR THE MARQUIS INTERNATIONAL EQUITY FUND
REPRESENTS INFORMATION RELATING TO THE SEI INTERNATIONAL TRUST INTERNATIONAL
EQUITY PORTFOLIO. THE MARQUIS INTERNATIONAL EQUITY FUND INVESTS SUBSTANTIALLY
ALL ITS ASSETS IN THE SEI INTERNATIONAL TRUST INTERNATIONAL EQUITY PORTFOLIO.
THE PERFORMANCE INFORMATION CONTAINED HEREIN HAS BEEN ADJUSTED TO REFLECT THE
ACTUAL FEES AND EXPENSES OF THE MARQUIS INTERNATIONAL EQUITY FUND, WHOSE FEES
AND EXPENSES ARE HIGHER THAN THOSE OF THE SEIINTERNATIONAL TRUST INTERNATIONAL
EQUITY PORTFOLIO. THE SEI INTERNATIONAL TRUST INTERNATIONAL EQUITY PORTFOLIO
SHARES WERE OFFERED BEGINNING DECEMBER 20, 1989. THE PERFORMANCE OF THE MSCI
EAFE INDEX AND LIPPER INTERNATIONAL FUNDS AVERAGE DOES NOT INCLUDE ANNUAL
OPERATING EXPENSES WHICH ARE EXPERIENCED BY THE FUND.
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT
IN THE INTERNATIONAL EQUITY FUND VERSUS THE
MSCI EAFE INDEX AND THE LIPPER INTERNATIONAL FUNDS AVERAGE
[LINE GRAPH OMITTED]
CLASS A
International Lipper
International Equity MSCI International
Equity Fund EAFE Funds
Fund w/load Index Average
12/89 10000 9650 10000 10000
9/90 8336 8045 6927 8455
9/91 9376 9048 8443 9872
9/92 9165 8844 7842 9726
9/93 11028 10642 9908 11931
9/94 11693 11284 10883 13522
9/95 12156 11731 11514 13965
9/96 13309 12843 12507 15320
9/97 14601 14090 14032 18168
[LINE GRAPH OMITTED]
CLASS B
International Lipper
International Equity MSCI International
Equity Fund EAFE Funds
Fund w/load Index Average
12/89 10000 10000 10000 10000
9/90 8286 8286 6927 8455
9/91 9248 9248 8443 9872
9/92 8969 8969 7842 9726
9/93 10715 10715 9908 11931
9/94 11269 11269 10883 13522
9/95 11617 11617 11514 13965
9/96 12619 12619 12507 15320
9/97 13756 13756 14032 18168
SEPTEMBER 30, 1997 19
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of 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, Strategic Income Bond, Louisiana Tax-Free Income,
Balanced, Value Equity, Growth Equity, SmallCap Equity and International Equity
Funds of the Marquis Funds (the "Trust") as of September 30, 1997, 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, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Institutional Money Market, Treasury Securities Money Market, Tax Exempt Money
Market, Government Securities, Strategic Income Bond, Louisiana Tax-Free Income,
Balanced, Value Equity, Growth Equity, SmallCap Equity and International Equity
Funds of the Marquis Funds as of September 30, 1997, 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 7, 1997
20 SEPTEMBER 30, 1997
<PAGE>
STATEMENT OF NET ASSETS
INSTITUTIONAL MONEY MARKET FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
U.S. TREASURY OBLIGATIONS -- 26.9%
U.S. Treasury Bills
5.400%, 10/16/97 $14,000 $13,974
5.840%, 03/05/98 1,800 1,757
-------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $15,731) 15,731
-------
REPURCHASE AGREEMENTS -- 73.6%
AUBREY G. LANSTON
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$2,700,000 (collateralized
by U.S. Treasury Note, par
value $1,915,000, 13.750%,
08/15/04, market value:
$2,759,000) 2,700 2,700
DEUTSCHE BANK
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$867,000 (collateralized by
U.S. Treasury Note, par
value $862,000, 5.875%,
10/31/98, market value:
$885,000) (1) 867 867
HSBC
6.030%, dated 09/30/97, matures
10/01/97, repurchase price
$2,700,000 (collateralized by
U.S. Treasury Note, par value
$1,900,000, 12.000%, 08/15/13,
market value:
$2,768,000) 2,700 2,700
J.P. MORGAN
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$13,502,000 (collateralized by
U.S. Treasury STRIPS, par value
$39,626,000, 0.000%, 02/15/14,
market value:
$13,814,000) 13,500 13,500
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
LEHMAN BROTHERS
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$13,502,000 (collateralized by
U. S. Treasury STRIPS, par
value $40,685,000, 0.000%,
08/15/14, market
value: $13,779,000) $13,500 $13,500
MERRILL LYNCH
5.900%, dated 09/30/97, matures
10/01/97, repurchase price
$1,133,000 (collateralized by
U.S. Treasury Bond, par value
$795,000, 12.750%, 11/15/10,
market value:
$1,160,000) (1) 1,132 1,132
MORGAN STANLEY
5.880%, dated 09/30/97, matures
10/01/97, repurchase price
$1,133,000 (collateralized by
U.S. Treasury Note, par value
$1,150,000, 6.250%, 02/15/07,
market value:
$1,167,000) (1) 1,132 1,132
NOMURA SECURITIES
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$1,183,000 (collateralized by
U.S. Treasury Note, par value
$1,179,000, 5.875%, 11/15/99,
market value:
$1,206,000) (1) 1,183 1,183
PRUDENTIAL SECURITIES
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$2,700,000 (collateralized by
U.S. Treasury Note, par value
$2,700,000, 5.875%, 11/15/99,
market value:
$2,762,000) 2,700 2,700
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 21
<PAGE>
STATEMENT OF NET ASSETS
INSTITUTIONAL MONEY MARKET FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
UBS SECURITIES
6.01%, dated 09/30/97, matures
10/01/97, repurchase price
$958,000 (collateralized by U.S.
Treasury Note, par value
$960,000, 6.000%, 06/30/99,
market value:
$978,000) (1) $ 958 $ 958
WACHOVIA
6.140%, dated 09/30/97, matures
10/01/97, repurchase price
$2,700,000 (collateralized by
U.S. Treasury Note, par value
$2,690,000, 6.125%, 05/15/98,
market value:
$2,762,000) 2,700 2,700
-------
TOTAL REPURCHASE AGREEMENTS
(Cost $43,072) 43,072
-------
TOTAL INVESTMENTS -- 100.5%
(Cost $58,803) 58,803
-------
OTHER ASSETS AND LIABILITIES,
NET -- (0.5%) (287)
-------
NET ASSETS:
FUND SHARES
(unlimited authorization -- no
par value) based on 58,515,538
outstanding shares of
beneficial interest 58,516
-------
TOTAL NET ASSETS -- 100.0% $58,516
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $1.00
=======
- ------------------------------------------
STRIPS--SEPARATE TRADING OF REGISTERED INTEREST
AND PRINCIPAL OF SECURITIES
(1) TRI-PARTY REPURCHASE AGREEMENT
TREASURY SECURITIES MONEY MARKET FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
U.S. TREASURY OBLIGATIONS -- 11.6%
U.S. Treasury Bills
5.400%, 10/16/97 $100,000 $ 99,817
5.840%, 03/05/98 60,000 58,573
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $158,390) 158,390
--------
REPURCHASE AGREEMENTS -- 88.8%
AUBREY G. LANSTON
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$63,011,000 (collateralized by
various U.S. Treasury Obligations,
par value $66,992,000,
0.000%-5.625%, 07/23/98-
11/30/98, market value:
$64,332,000) 63,000 63,000
DEUTSCHE BANK
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$62,727,000 (collateralized by
various U.S. Treasury Notes,
par value $61,657,000,
6.000%-8.875%, 08/15/99-
01/31/02, market value:
$63,972,000) (1) 62,717 62,717
HSBC
6.030%, dated 09/30/97, matures
10/01/97, repurchase price
$63,011,000 (collateralized by
U.S. Treasury Note, par value
$44,350,000, 12.000%, 08/15/13,
market value:
$64,605,000) 63,000 63,000
J.P. MORGAN
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$310,052,000 (collateralized
by various U.S. Treasury
Obligations, par value
$974,789,000, 0.000%-12.000%,
05/15/98-02/15/19,
market value:
$317,875,000) 310,000 310,000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
22 SEPTEMBER 30, 1997
<PAGE>
TREASURY SECURITIES MONEY MARKET FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
J.P. MORGAN
6.000%, dated 09/30/97, matures
10/01/97, repurchase price
$6,001,000 (collateralized by U.S.
Treasury Bill, par value
$6,451,000, 0.000%, 09/17/98,
market value:
$6,121,000) (1) $ 6,000 $ 6,000
LEHMAN BROTHERS
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$315,053,000 (collateralized
by various U.S. Treasury
Obligations, par value
$732,047,000, 0.000%, 11/15/00-
08/15/17, market value:
$321,992,000) 315,000 315,000
LEHMAN BROTHERS
5.9500%, dated 09/30/97, matures
10/01/97, repurchase price
$6,001,000 (collateralized by
U.S. Treasury STRIP,
par value $12,490,000,
0.000%, 02/15/99, market
value: $6,120,000) (1) 6,000 6,000
MERRILL LYNCH
5.900%, dated 09/30/97, matures
10/01/97, repurchase price
$64,821,000 (collateralized by
U.S. Treasury Bond, par value
$45,290,000, 12.75%,
11/15/10, market value:
$66,109,000) (1) 64,811 64,811
MORGAN STANLEY
5.880%, dated 09/30/97, matures
10/01/97, repurchase price
$64,215,000 (collateralized by
U.S. Treasury Bond, par value
$65,093,000, 6.375%, 08/15/27,
market value:
$65,545,000) (1) 64,205 64,205
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
NOMURA SECURITIES
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$65,057,000 (collateralized
by U.S. Treasury Obligations,
par value $93,040,000,
0.000%-8.500%, 06/30/99-
08/15/16, market value:
$66,347,000) (1) $65,045 $ 65,045
PRUDENTIAL SECURITIES
6.050%, dated 09/30/97, matures
10/01/97, repurchase price
$63,011,000 (collateralized by
various U.S. Treasury Notes,
par value $62,105,000, 5.875%-
12.000%, 11/15/99-08/15/13,
market value:
$64,454,000) 63,000 63,000
UBS SECURITIES
6.010%, dated 09/30/97, matures
10/01/97, repurchase price
$65,092,000 (collateralized by
various U.S. Treasury obligations,
par value $65,230,000, 6.000%-
9.125%, 05/15/99-06/30/99,
market value:
$66,386,000) (1) 65,081 65,081
WACHOVIA
6.140%, dated 09/30/97, matures
10/01/97, repurchase price
$63,011,000 (collateralized by
various U.S. Treasury Notes,
par value $62,705,000, 6.125%,
05/15/98, market value:
$64,380,000) 63,000 63,000
----------
TOTAL REPURCHASE AGREEMENTS
(Cost $1,210,859) 1,210,859
----------
TOTAL INVESTMENTS -- 100.4%
(Cost $1,369,249) 1,369,249
----------
OTHER ASSETS AND LIABILITIES,
NET -- (0.4%) (5,161)
----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 23
<PAGE>
STATEMENT OF NET ASSETS
TREASURY SECURITIES MONEY MARKET FUND
DESCRIPTION VALUE (000)
- ------------------------------------------
NET ASSETS:
FUND SHARES OF TRUST CLASS
(unlimited authorization --
no par value) based on
556,939,790 outstanding
shares of beneficial interest $ 556,940
FUND SHARES OF RETAIL CLASS
(unlimited authorization --
no par value) based on
604,910,633 outstanding
shares of beneficial interest 604,911
FUND SHARES OF CASH SWEEP CLASS
(unlimited authorization --
no par value) based
on 202,212,417 outstanding
shares of beneficial interest 202,212
Accumulated net realized gain
on investments 17
Undistributed net investment income 8
----------
TOTAL NET ASSETS -- 100.0% $1,364,088
==========
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
==========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CASH SWEEP CLASS $1.00
==========
- ------------------------------------------
STRIPS--SEPARATE TRADING OF REGISTERED INTEREST AND PRINCIPAL OF SECURITIES
(1) TRI-PARTY REPURCHASE AGREEMENT
TAX EXEMPT MONEY MARKET FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
MUNICIPAL BONDS -- 99.6%
ALABAMA -- 0.7%
Alabama State, Housing
Finance Authority, Multi-
Family Residential
Development, Ser B,
VRDN, RB (A) (B) (C)
4.100%, 10/01/97 $ 500 $ 500
--------
ARIZONA -- 0.2%
Tuscon Industrial
Development Authority,
Tuscon City Center Parking,
VRDN, RB (A) (B) (C)
4.175%, 10/02/97 125 125
--------
CALIFORNIA -- 0.1%
Union City, Multi-Family
Housing - Sierra Green
Apartments, VRDN,
RB (A) (B) (C)
3.700%, 10/15/97 100 100
--------
COLORADO -- 6.5%
Eagle County, Smith Creek
Metropolitan District Project,
Ser 95, VRDN,
RB (A) (B) (C)
3.850%, 10/02/97 1,000 1,000
Housing Financial Authority,
Cambray Park Project,
VRDN, RB (A) (B) (C)
4.200%, 10/02/97 2,150 2,150
Housing Financial Authority,
Woodstream Project,
VRDN (A) (B) (C)
4.200%, 10/02/97 1,860 1,860
--------
5,010
--------
CONNECTICUT -- 0.1%
Housing Finance Authority,
Housing Mortgage Finance,
Ser A, RB
7.000%, 11/15/97 75 75
--------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
24 SEPTEMBER 30, 1997
<PAGE>
TAX EXEMPT MONEY MARKET FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
DISTRICT OF COLUMBIA -- 0.5%
Washington, DC, George
Washington University
(A) (B)
4.250%, 10/01/97 $ 350 $ 350
--------
FLORIDA -- 6.0%
Brevard County Housing
Finance Authority, Park
Village & Malobar Lakes
Project, VRDN, RB (A) (B)
4.200%, 10/01/97 1,425 1,425
Florida Housing Finance
Agency, Lakeside South
Association, VRDN,
RB (A) (B)
4.175%, 10/02/97 430 430
Jacksonville, University
Hospital Center Project,
VRDN, RB (A) (B) (C)
4.250%, 10/02/97 1,000 1,000
Lee Industrial Development
Authority, Christian
Mission Shell Point Village,
VRDN, RB (A) (B) (C)
3.925%, 10/02/97 825 825
Orange County, Industrial
Development Authority,
Orlando Hawaiian Motel,
VRDN, RB (A) (B)
3.800%, 10/01/97 545 545
Pinellas County, Health
Facilities Authority,
Hospital Program, VRDN,
RB (A) (B) (C)
3.800%, 10/01/97 400 400
--------
4,625
--------
GEORGIA -- 4.4%
Dekalb County, Industrial
Development Authority,
VRDN, RB (A) (B) (C)
4.250%, 10/02/97 700 700
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
Effingham County,
Development Authority
Pollution Control, Savannah
Electric and Power,
VRDN, RB (A) (B)
4.100%, 10/01/97 $ 200 $ 200
Marietta Housing Finance
Authority, Multi-Family
Housing, Franklin Walk
Apartments Project,
VRDN, RB (A) (B) (C)
3.925%, 10/02/97 2,500 2,500
--------
3,400
--------
IDAHO -- 1.3%
Nez Perce County, Pollution
Control, VRDN,
RB (A) (B) (C)
4.050%, 10/02/97 1,025 1,025
--------
ILLINOIS -- 10.4%
Elgin, Illinois, Ser A, GO
7.125%, 01/01/98 295 297
Glenview, Illinois, Park
District, GO
4.050%, 12/01/97 1,120 1,120
Illinois Development Financial
Authority, Village of Oak
Park Residence, VRDN,
RB (A) (B) (C)
4.300%, 10/02/97 1,000 1,000
Illinois Development Financial
Authority, Ser 84, VRDN,
RB (A) (B) (C)
4.165%, 10/29/97 1,300 1,300
Illinois Educational Facilities
Authority
3.750%, 10/24/97 1,000 1,000
Illinois Health Facilities
Authority, Advocate
Healthcare Network,
Ser B, VRDN (A) (B)
4.150%, 10/01/97 1,700 1,700
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 25
<PAGE>
STATEMENT OF NET ASSETS
TAX EXEMPT MONEY MARKET FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
Kendall and Kane Counties,
Illinois Community School
Districts Number 115, TAN
4.400%, 01/21/98 $ 750 $ 751
Orland Hills Mortgage
Authority, Ser 88-A,
VRDN, RB (A) (B) (C)
4.200%, 10/01/97 600 600
Riverside Health Facility,
Ser A, RB (MBIA)
4.000%, 11/15/97 245 245
--------
8,013
--------
INDIANA -- 9.3%
Indiana Bond Bank, Advance
Funding Note, RB
4.000%, 01/21/98 819 819
Indiana Health Facilities,
Hartsfield Village, Project B,
VRDN, RB (A) (B)
4.250%, 10/02/97 2,000 2,000
Indiana Residential
Apartments, Ser A,
VRDN, RB (A) (B)
4.250%, 10/02/97 2,000 2,000
North Adams, Community
Schools, TAW, GO
4.250%, 12/26/97 1,050 1,051
Perry Township, Multiple
School Building, BAN
4.000%, 06/25/98 1,000 1,000
Purdue University, Student
Fee, Ser B, RB
6.100%, 07/01/98 250 254
--------
7,124
--------
IOWA -- 1.8%
Des Moines, Drake University
Project, Ser B, Pre-Refunded
12/1/97 @ 102, RB
6.800%, 12/01/01 425 436
6.800%, 12/01/02 450 461
6.800%, 12/01/03 485 497
--------
1,394
--------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
KANSAS -- 2.0%
Shawnee County,
Ser 1, TAN
4.250%, 02/01/98 $ 940 $ 941
Topeka Multi-Family
Housing Revenue, Ser 85,
VRDN, RB (A) (B)
3.900%, 10/02/97 600 600
--------
1,541
--------
KENTUCKY -- 1.6%
Covington Industrial
Building, Atkins & Pearce
Inc., Ser 1995, VRDN,
RB (A) (B) (C)
4.000%, 10/02/97 455 455
Louisville, Industrial
Development Revenue
Referendum - Zeochem
Project, VRDN,
RB (A) (B) (C)
4.150%, 10/01/97 750 750
--------
1,205
--------
LOUISIANA -- 3.6%
State Recovery, District Sales
Tax Revenue, RB (MBIA)
4.250%, 07/01/98 500 501
New Orleans Industrial
Development Board,
Spectrum Control
Technology, RB (A) (B) (C)
4.100%, 10/02/97 2,300 2,300
--------
2,801
--------
MAINE -- 0.4%
Baileyville, Pollution Control,
Georgia Pacific Corporation,
VRDN, RB (A) (B) (C)
4.175%, 10/02/97 300 300
--------
MASSACHUSETTS -- 2.4%
Brockton, Massachusetts,
RB, RAN
4.500%, 06/30/98 800 802
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
26 SEPTEMBER 30, 1997
<PAGE>
TAX EXEMPT MONEY MARKET FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
New England Education
Loan Marketing
Corporation, Student
Loans Ser C, RB (C)
4.750%, 07/01/98 $1,000 $ 1,005
--------
1,807
--------
MICHIGAN -- 1.1%
Grand Rapids, Water Supply
Revenue, Ser 88,
Pre-Refunded 01/01/98
@ 102, RB
7.875%, 01/01/18 105 108
Job Development Authority,
Pollution Control, Mazda
Motor Manufacturing,
RB (A) (B) (C)
4.050%, 10/02/97 125 125
Oakland County, Economic
Development, Corners
Shopping Center, VRDN,
RB (A) (B) (C)
3.650%, 02/01/98 620 620
--------
853
--------
MINNESOTA -- 0.4%
Hutchinson, Economic
Development Authority,
VRDN, RB (A) (B) (C)
3.850%, 02/15/98 325 325
--------
MISSOURI -- 2.6%
Kansas City Industrial
Development, Hospital
Authority, Baptist Health
System, Ser A, VRDN,
RB (A) (B) (C)
3.850%, 10/02/97 1,965 1,965
--------
NEBRASKA -- 1.3%
Hamilton County, Industrial
Development, Iams
Corporation Project,
VRDN, RB (A) (B) (C)
4.150%, 10/02/97 1,020 1,020
--------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
NEVADA -- 0.5%
Henderson, Public
Improvement Trust,
Pueblo Verde I+II
Apartment Project,
Ser 95a/95b #1071,
VRDN, RB (A) (B) (C)
4.150%, 10/02/97 $ 375 $ 375
--------
NEW JERSEY -- 1.3%
Ventnor City, New Jersey,
Ser A, BAN
4.250%, 04/30/98 1,000 1,000
--------
NEW MEXICO -- 0.7%
Villa Hermosa, Affordable
Housing, Multi-Family
Villa Hermosa Apartments
Project, VRDN (A) (B) (C)
4.300%, 10/07/97 500 500
--------
NEW YORK -- 4.5%
Freeport, New York, Unified
Freeport School District,
TAN (C)
4.250%, 06/29/98 500 501
Lindenhurst, New York,
Unified School District,
TAN (C)
4.250%, 06/24/98 500 501
Nassau County, New York,
Ser A, RAN
4.250%, 03/10/98 700 701
North Hempstead, New
York, Ser A, BAN
4.000%, 01/29/98 1,000 1,000
North Hempstead, New
York, Ser C, BAN
4.375%, 05/06/98 750 751
--------
3,454
--------
NORTH CAROLINA -- 2.0%
Beaufort, Industrial Facility,
Pollution Control Revenue,
VRDN, RB (A) (B) (C)
4.150%, 10/02/97 1,525 1,525
--------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 27
<PAGE>
STATEMENT OF NET ASSETS
TAX EXEMPT MONEY MARKET FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
OHIO -- 4.6%
Bellevue, Bellevue Hospital
Project, VRDN, RB (A) (B)
3.850%, 03/01/98 $ 380 $ 380
Cadiz, Ohio, BAN
4.450%, 12/18/97 1,575 1,577
Clermont County, Economic
Development, Eastmark
Center Association Project,
VRDN, RB (A) (B)
4.000%, 12/01/97 270 270
Columbus, Electrical Systems
Revenue, VRDN,
RB (A) (B) (C)
3.500%, 10/03/97 1,300 1,300
--------
3,527
--------
OKLAHOMA -- 7.1%
Muskogee, Industrial Trust
Revenue, VRDN,
RB (A) (B) (C)
4.250%, 10/01/97 1,100 1,100
Oklahoma City, Industrial
Development Authority,
Baptist General Convention
Refunding, Ser 89, VRDN,
RB (A) (B) (C)
3.850%, 12/01/97 1,770 1,770
Oklahoma City, University
City Project, Ser 85,
VRDN, RB (A) (B) (C)
4.300%, 10/04/97 600 600
Tulsa City, Industrial
Authority Health Care,
Laureate Psychiatric Project,
VRDN, RB (A) (B)
3.850%, 02/16/98 2,000 2,000
--------
5,470
--------
OREGON -- 1.6%
Hillsboro, Graduate Institute,
VRDN, (A) (B) (C)
4.200%, 10/02/97 1,200 1,200
--------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
PENNSYLVANIA -- 6.9%
Allegheny County, Hospital
Development Authority,
Ser C, VRDN,
RB (A) (B) (C)
4.050%, 10/01/97 $ 500 $ 500
Bucks County Industrial
Development Authority,
Edgcomb Metals Project,
VRDN, RB (A) (B) (C)
3.800%, 10/02/97 300 300
Clarion County, Industrial
Development Authority,
Meritcare Project,
Ser A, (A) (B)
4.100%, 10/02/97 1,100 1,100
Emmaus General Authority,
VRDN, RB (A) (B) (FSA)
4.050%, 10/01/97 100 100
Higher Education Facilities
Authority, Carnegie
Mellon University Project,
Ser B, VRDN, RB (A) (B)
3.900%, 10/01/97 250 250
Higher Education Facilities
Authority, Thomas
Jefferson University Ser B,
VRDN (A) (B) (C)
3.800%, 10/30/97 1,200 1,200
Philadelphia, School District
Authority, TRAN (C)
4.500%, 06/30/98 750 753
Schuylkill County, Resource
Recovery Authority,
Northeastern Power
Series A, VRDN,
RB (A) (B) (C)
3.800%, 10/01/97 1,100 1,100
--------
5,303
--------
SOUTH CAROLINA -- 2.3%
Charleston Center, Tax
Exempt Mortgage Bond
Trust #5, VRDN (A) (B) (C)
3.750%, 10/02/97 1,000 1,000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
28 SEPTEMBER 30, 1997
<PAGE>
TAX EXEMPT MONEY MARKET FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
Lexington, Water and Sewer
Revenue, Ser 1997, BAN
4.750%, 10/01/97 $ 750 $ 750
--------
1,750
--------
TENNESSEE -- 2.6%
Franklin County, Health &
Education Facilities Board,
University of South Sewanee,
Credit Enhancement
Project, VRDN, RB (A) (B)
3.800%, 10/01/97 360 360
Germantown, Tennessee, GO
3.800%, 01/01/98 505 505
Jefferson County Industrial
Development, Economic
Development, Ball
Corporation Project,
RB (A) (B) (C)
4.250%, 10/02/97 1,000 1,000
Maury County, Tennessee
Hillview Health Care
Center, Ser 86, VRDN, (A) (B)
4.000%, 10/01/97 155 155
--------
2,020
--------
TEXAS -- 2.2%
Bexar County, Detention
Facilities, GO
7.250%, 06/15/98 200 205
Corpus Christi, Industrial
Development Authority
Air Inventory
Project, VRDN, (A) (B)
3.900%, 10/01/97 125 125
San Antonio, River Channel
Improvement Authority,
RB (FSA)
6.550%, 07/01/98 290 296
Texas School District,
Limited Tax Obligation
Texas Association of School
Boards, Ser D, GO
4.000%, 02/15/98 825 825
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
Water Development Board,
Ser A, VRDN,
RB (A) (B) (C)
3.900%, 10/01/97 $ 200 $ 200
--------
1,651
--------
UTAH -- 1.0%
West Valley, Industrial
Development Authority,
Johnson Matthey Project,
VRDN, RB (A) (B)
3.950%, 10/01/97 800 800
--------
WEST VIRGINIA -- 1.5%
Mingo County, Board of
Education, GO (AMBAC)
9.700%, 10/01/97 340 340
Wood County, Industrial
Development, Aga Gas
Project, VRDN,
RB (A) (B) (C)
3.750%, 10/01/97 800 800
--------
1,140
--------
WISCONSIN -- 3.4%
Clinton, Community School
District, TRAN
4.240%, 08/31/98 475 475
Fox Point and Bayside,
Joint School District,
BAN, GO
4.200%, 04/10/98 775 775
Janesville, Water Utility
Improvements, PN,
GO (FSA)
4.800%, 06/01/98 380 382
Oregon, Wisconsin, School
District, TRAN
4.220%, 09/16/98 1,000 1,001
--------
2,633
--------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 29
<PAGE>
STATEMENT OF NET ASSETS
TAX EXEMPT MONEY MARKET FUND
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------
WYOMING -- 0.7%
Cheyenne County, Economic
Development, Holiday
Inn Project, VRDN,
RB (A) (B)
3.800%, 04/01/98 $235 $ 235
University of Wyoming,
VRDN, RB (A) (B) (MBIA)
4.000%, 06/01/98 265 265
--------
500
--------
TOTAL MUNICIPAL BONDS
(Cost $76,406) 76,406
--------
TOTAL INVESTMENTS -- 99.6%
(Cost $76,406) 76,406
--------
OTHER ASSETS AND LIABILITIES,
NET -- 0.4% 338
--------
NET ASSETS:
FUND SHARES
(unlimited authorization --
no par value) based on
76,743,813 outstanding
shares of beneficial interest 76,744
--------
TOTAL NET ASSETS -- 100.0% $76,744
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE $1.00
========
DESCRIPTION
- ------------------------------------------
(A) VARIABLE RATE INSTRUMENT. THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
IS THE RATE IN EFFECT ON SEPTEMBER 30, 1997.
(B) PUT AND DEMAND FEATURES EXIST ALLOWING THE ISSUER TO REPURCHASE THE
INSTRUMENT PRIOR TO MATURITY. THE MATURITY 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
PN--PROMISSORY NOTE
RAN--REVENUE ANTICIPATION NOTE
RB--REVENUE BOND
SER--SERIES
TAN--TAX ANTICIPATION NOTE
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
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
30 SEPTEMBER 30, 1997
<PAGE>
GOVERNMENT SECURITIES FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 10.0%
Farmer MAC
7.560%, 05/28/02 $ 500 $ 528
FFCB
7.510%, 02/13/98 250 252
8.650%, 10/01/99 255 268
FHLB
5.370%, 11/03/00 500 491
7.500%, 08/10/04 500 533
FHLMC
6.300%, 03/15/03 135 133
6.280%, 07/15/03 250 246
7.930%, 01/20/05 250 272
FICO STRIPS
0.000%, 10/05/05 180 108
0.000%, 12/27/05 334 197
0.000%, 10/06/06 500 280
0.000%, 11/11/06 1,000 557
0.000%, 12/27/06 500 276
FNMA
9.550%, 12/10/97 1,075 1,082
9.150%, 04/10/98 1,175 1,196
9.550%, 03/10/99 255 268
5.875%, 02/02/06 5,000 4,838
SBA Ser 1988-10-C
9.350%, 07/01/98 7 7
TVA
6.250%, 08/01/99 400 400
8.375%, 10/01/99 3,000 3,131
--------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS
(Cost $15,118) 15,063
--------
U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS -- 39.1%
FHLMC
7.000%, 04/01/00 14 15
9.000%, 11/01/05 717 751
9.000%, 05/01/06 1,013 1,061
7.250%, 05/01/07 44 45
9.000%, 08/01/09 708 737
9.000%, 12/01/09 1,039 1,105
9.500%, 04/01/16 4 5
6.500%, 11/15/22 5,200 5,079
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
FHLMC CMO
7.500%, 11/15/01 $4,312 $4,417
6.700%, 05/15/05 1,925 1,931
7.000%, 09/15/07 3,425 3,372
6.500%, 04/15/08 4,850 4,743
7.750%, 01/15/20 800 803
FNMA
8.500%, 03/01/98 124 129
7.000%, 09/01/02 183 186
6.500%, 04/01/04 65 63
8.000%, 05/25/05 100 106
6.250%, 02/25/07 150 150
7.000%, 09/01/07 3,069 3,099
6.250%, 01/25/09 1,000 981
6.550%, 12/25/21 150 149
FNMA REMIC
7.350%, 06/25/07 2,000 1,982
6.250%, 10/25/22 64 65
GNMA
10.500%, 06/15/98 2 3
9.000%, 07/15/02 9 10
6.500%, 07/15/08 1,142 1,141
6.500%, 03/15/09 110 110
6.500%, 05/15/09 2,826 2,824
9.000%, 06/15/16 15 16
9.000%, 07/15/16 506 540
9.000%, 09/15/16 291 310
9.000%, 10/15/16 93 100
9.000%, 11/15/16 247 264
9.000%, 02/15/17 25 27
9.500%, 08/15/17 441 479
10.000%, 04/15/19 165 181
10.000%, 05/15/19 33 37
10.000%, 06/15/19 5 6
9.500%, 12/15/19 354 384
7.500%, 06/15/23 3,891 3,958
7.000%, 03/15/24 2,182 2,183
7.000%, 04/15/24 3,007 3,008
8.500%, 10/15/24 1,270 1,329
7.500%, 06/15/25 224 228
8.000%, 06/15/25 205 212
8.000%, 07/15/25 2,122 2,194
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 31
<PAGE>
STATEMENT OF NET ASSETS
GOVERNMENT SECURITIES FUND
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------
7.000%, 01/15/26$ 4,744 $ 4,744
7.500%, 03/15/26 167 171
8.000%, 08/15/26 241 250
7.500%, 03/15/27 2,963 3,014
--------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS
(Cost $58,447) 58,697
--------
U.S. TREASURY OBLIGATIONS -- 43.1%
Treasury LINCS
6.000%, 08/15/09 2,500 2,362
U.S. Treasury Bill
5.447%, 12/11/97 100 99
U.S. Treasury Bonds
6.125%, 05/15/98 200 201
5.625%, 02/15/06 12,500 12,051
9.375%, 02/15/06 1,000 1,209
7.125%, 02/15/23 2,500 2,694
U.S. Treasury Notes
5.125%, 04/30/98 1,800 1,796
9.000%, 05/15/98 1,550 1,582
5.125%, 06/30/98 2,650 2,643
8.250%, 07/15/98 100 102
9.250%, 08/15/98 2,500 2,575
8.875%, 11/15/98 50 52
5.625%, 11/30/98 3,000 2,997
6.375%, 01/15/99 1,500 1,512
8.000%, 08/15/99 100 104
7.125%, 09/30/99 3,000 3,073
6.000%, 10/15/99 1,500 1,507
7.875%, 11/15/99 1,400 1,456
6.375%, 01/15/00 150 152
8.500%, 02/15/00 2,850 3,013
5.500%, 04/15/00 650 645
6.000%, 08/15/00 7,500 7,523
8.750%, 08/15/00 2,775 2,981
6.375%, 08/15/02 5,425 5,506
6.250%, 02/15/03 150 151
5.750%, 08/15/03 2,150 2,116
5.875%, 02/15/04 1,500 1,484
6.500%, 08/15/05 3,000 3,063
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $64,709) 64,649
--------
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
CORPORATE OBLIGATIONS -- 1.9%
Anheuser Busch
8.750%, 12/01/99 $600 $ 632
General Foods
6.000%, 06/15/01 500 492
Lehman Brothers Holdings
6.375%, 06/01/98 500 502
New England Telephone &
Telegraph
6.250%, 12/15/97 700 702
Pepsico
7.625%, 12/18/98 500 509
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $2,843) 2,837
--------
CASH EQUIVALENT -- 1.7%
SEI Liquid Asset Trust
Government Portfolio 2,568 2,568
--------
TOTAL CASH EQUIVALENT
(Cost $2,568) 2,568
--------
REPURCHASE AGREEMENT -- 3.5%
UBS SECURITIES
6.01%, dated 09/30/97, matures
10/01/97, repurchase price
$5,185,000 (collateralized by
various FNMA obligations,
par value $6,464,000,
0.000%-6.500%, 02/01/04-
10/01/25, market value:
$5,288,000) 5,184 5,184
--------
TOTAL REPURCHASE AGREEMENT
(Cost $5,184) 5,184
--------
TOTAL INVESTMENTS -- 99.3%
(Cost $148,869) 148,998
--------
OTHER ASSETS AND LIABILITIES,
NET -- 0.7% 1,086
--------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
32 SEPTEMBER 30, 1997
<PAGE>
GOVERNMENT SECURITIES FUND
DESCRIPTION VALUE (000)
- -------------------------------------------
NET ASSETS:
FUND SHARES OF CLASS A
(unlimited authorization -- no
par value) based on 14,994,367
outstanding shares of
beneficial interest $149,750
FUND SHARES OF CLASS B
(unlimited authorization -- no
par value) based on 106,315
outstanding shares of
beneficial interest 1,051
Accumulated net realized loss
on investments (846)
Net unrealized appreciation
on investments 129
--------
TOTAL NET ASSETS -- 100.0% $150,084
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A $9.94
========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A ($9.94/96.50%) $10.30
========
NET ASSET VALUE AND OFFERING PRICE
PER SHARE -- CLASS B (1) $9.99
========
- ------------------------------------------
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
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) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
STRATEGIC INCOME BOND FUND
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------
CORPORATE OBLIGATIONS -- 62.2%
FINANCIAL SERVICES -- 34.2%
Aetna Services
7.625%, 08/15/26 $250 $ 259
American Express
5.500%, 12/12/97 575 569
Bankers Trust NY
7.250%, 10/15/11 250 254
Ford Motor Credit
6.250%, 12/08/05 250 243
General Electric Capital
5.530%, 02/11/98 500 490
Korea Development
Bank, Ser B
8.140%, 05/04/99 250 257
Lehman Brothers
8.500%, 08/01/15 295 328
Loew's
7.625%, 06/01/23 300 299
Merrill Lynch
5.580%, 05/12/98 600 579
Nationsbank
7.800%, 09/15/16 500 533
Paine Webber
5.650%, 11/13/97 550 546
Sunamerica
8.125%, 04/28/23 419 450
Torchmark
7.875%, 05/15/23 400 410
US West Capital Funding
7.300%, 01/15/07 250 258
--------
5,475
--------
GENERAL UTILITIES -- 17.5%
Canadian Pacific Limited
9.450%, 08/01/21 280 341
Commonwealth Edison
8.375%, 09/15/22 300 315
Florida Power
8.000%, 12/01/22 500 530
GTE
7.900%, 02/01/27 400 420
MCI Communications
8.250%, 01/20/23 400 432
Minnesota Power & Light
7.500%, 08/01/07 200 206
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 33
<PAGE>
STATEMENT OF NET ASSETS
STRATEGIC INCOME BOND FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
Pacificorp, Ser F
7.240%, 08/16/23 $250 $ 249
United Telephone Florida
8.375%, 01/15/25 270 309
--------
2,802
--------
INDUSTRIAL -- 10.5%
Brunswick
7.375%, 09/01/23 400 403
Eastman Chemical
7.600%, 02/01/27 250 259
IBM
7.000%, 10/30/25 250 248
Phillip Morris
7.200%, 02/01/07 250 254
Weyerhaeuser
7.500%, 03/01/13 500 524
--------
1,688
--------
TOTAL CORPORATE OBLIGATIONS
(Cost $9,778) 9,965
--------
U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS -- 30.9%
FHLMC
7.500%, 02/01/27 966 984
8.000%, 02/01/27 476 492
FNMA
8.000%, 09/01/26 471 487
7.500%, 10/01/26 473 481
7.500%, 02/01/27 483 492
GNMA
7.500%, 02/15/27 497 505
7.750%, 02/15/27 492 504
8.000%, 02/15/27 493 509
8.000%, 03/20/27 491 505
--------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS
(Cost $4,907) 4,959
--------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- --------------------------------------------
CASH EQUIVALENT -- 0.3%
SEI Liquid Asset Trust
Government Portfolio $ 50 $ 50
--------
TOTAL CASH EQUIVALENT
(Cost $50) 50
--------
REPURCHASE AGREEMENT -- 6.3%
UBS SECURITIES
6.010%, dated 09/30/97,
matures 10/01/97, repurchase
price $1,006,000 (collateralized
by U.S. Treasury Bond, par
value $675,000, 11.25%,
02/15/15, market value:
$1,028,000) (1) 1,006 1,006
--------
TOTAL REPURCHASE AGREEMENT
(Cost $1,006) 1,006
--------
TOTAL INVESTMENTS -- 99.7%
(Cost $15,741) 15,980
--------
OTHER ASSETS AND LIABILITIES,
NET -- 0.3% 52
--------
NET ASSETS:
FUND SHARES OF CLASS A
(unlimited authorization -- no
par value) based on
1,535,306 outstanding
shares of beneficial interest 15,333
FUND SHARES OF CLASS B
(unlimited authorization -- no
par value) based on 46,309
outstanding shares of
beneficial interest 460
Net unrealized appreciation
on investments 239
--------
TOTAL NET ASSETS -- 100.0% $16,032
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE --
CLASS A $10.14
========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
34 SEPTEMBER 30, 1997
<PAGE>
STRATEGIC INCOME BOND FUND
DESCRIPTION VALUE (000)
- -------------------------------------------
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A
($10.14 / 96.50%) $10.51
========
NET ASSET VALUE AND OFFERING PRICE
PER SHARE -- CLASS B (2) $10.14
========
GNMA--GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
FHLMC--FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA--FEDERAL NATIONAL MORTGAGE ASSOCIATION
SER--SERIES
(1) TRI-PARTY REPURCHASE AGREEMENT
(2) CLASS B HAS A CONTINGENT 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 -- 93.8%
LOUISIANA -- 93.8%
Alexandria, Louisiana
Utilities, RB (FGIC)
5.250%, 05/01/11 $100 $101
Alexandria, Louisiana
Utilities, Ser B, RB
4.650%, 05/01/04 150 151
Ascension Parish, Louisiana
Parish Wide School District,
GO (AMBAC)
4.900%, 03/01/09 150 151
Baton Rouge, Louisiana
Sales & Use Tax, RB (FSA)
6.000%, 08/01/08 200 211
Bossier City, Louisiana
Utility, RB (FGIC)
4.800%, 10/01/05 500 508
Caddo Parish, GO (MBIA)
5.000%, 02/01/05 350 359
East Baton Rouge Parish,
Louisiana Sales & Use
Tax, RB (FGIC)
4.800%, 02/01/06 650 658
5.900%, 02/01/16 500 526
East Baton Rouge Parish,
Louisiana Sales & Use Tax,
Ser A, RB (FGIC)
4.800%, 02/01/09 340 337
East Baton Rouge, Louisiana
Mortgage Financing
Authority, Ser B
4.350%, 10/01/00 75 75
5.300%, 10/01/14 85 83
Ernest N. Morial Exhibition
Hall Special Tax,
RB (MBIA)
4.700%, 07/15/05 115 116
4.900%, 07/15/07 515 524
Gretna, Louisiana
Refunding - Sales Tax
Revenue (AMBAC)
5.200%, 06/01/06 225 230
Iberville School District
District (FSA)
5.750%, 10/01/03 250 268
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 35
<PAGE>
STATEMENT OF NET ASSETS
LOUISIANA TAX-FREE INCOME FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
Jefferson Parish, Louisiana
Ad Valorem Property Tax,
Ser A, GO (FGIC)
5.250%, 09/01/05 $250 $261
Jefferson Parish, Louisiana
Hospital Services (FGIC)
5.100%, 01/01/05 300 309
5.300%, 01/01/07 100 104
Jefferson Parish, Louisiana
Sales & Use Tax,
RB (AMBAC)
5.000%, 02/01/08 130 132
5.000%, 02/01/13 700 690
Jefferson Parish, Louisiana
School District Sales &
Use Tax, RB (MBIA)
6.250%, 02/01/08 300 325
Kenner, Louisiana Sales
Tax, RB (FGIC)
5.750%, 06/01/06 100 107
Lafayette Parish, Louisiana
School Board Sales Tax,
RB (FSA)
4.875%, 04/01/04 575 586
Lafayette, Public Improvement
Sales Tax Revenue (FGIC)
5.500%, 03/01/07 200 210
Lafayette, Public Improvement,
Ser A, RB (FGIC)
4.900%, 03/01/03 505 516
Lafayette, Louisiana Public
Improvement Sales Tax
Revenue (FGIC)
4.625%, 05/01/05 300 300
Lafayette, Louisiana Public
Power Authority,
RB (AMBAC)
5.000%, 11/01/06 250 256
5.250%, 11/01/09 250 255
Lafayette, Louisiana Utilities,
RB (AMBAC)
4.100%, 11/01/99 275 275
4.700%, 11/01/04 125 126
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------
Lafayette, Public Power
Electric Authority,
RB (AMBAC)
5.300%, 11/01/07 $ 510 $ 525
Louisiana Housing Finance
Agency Mortgage Single
Family, Ser B, RB
6.000%, 06/01/15 830 856
Louisiana Public Facilities
Authority, Department of
Public Safety, RB (AMBAC)
4.900%, 08/01/04 500 509
5.000%, 08/01/05 400 409
Louisiana Public Facility
Authority, Ser A-1
(AMBAC)
5.000%, 12/01/15 1,500 1,534
Louisiana State, Alton
Ochsner Medical Foundation
Ser PJ-B (MBIA)
6.000%, 05/15/17 100 103
Louisiana State Energy &
Power Authority, RB (FGIC)
6.000%, 01/01/13 500 513
Louisiana State Miscellaneous
Taxes Refunding Bond, Ser A
5.700%, 08/01/08 500 542
Louisiana State Mississippi
River Bridge Authority, RB
6.625%, 11/01/06 1,130 1,254
Louisiana State Public
Facilities Authority,
Jefferson Parish Eastbank
Project (FGIC)
4.850%, 08/01/06 250 254
Louisiana State Public
Facilities Authority, Special
Insurance Assessment
4.400%, 10/01/00 120 121
Louisiana State Public
Facilities Authority, Alton
Ochsner Medical Foundation
Project, Ser A, RB (MBIA)
6.000%, 05/15/01 100 106
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
36 SEPTEMBER 30, 1997
<PAGE>
LOUISIANA TAX-FREE INCOME FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
Louisiana State Public
Facilities Authority,
Loyola University Project,
RB (MBIA)
4.900%, 10/01/05 $1,000 $1,021
Louisiana State Public
Facilities Authority,
Our Lady of Lake
Regional Center, RB (MBIA)
5.900%, 12/01/06 390 414
Louisiana State Public
Facilities Authority,
Ser A, RB (FSA)
5.100%, 03/01/01 250 257
Louisiana State Refunding
Bonds, Ad Valorem Property
Tax, GO (MBIA)
6.250%, 08/01/99 250 259
Louisiana State Refunding
Bonds, GO (MBIA)
5.375%, 08/01/05 400 421
Louisiana State Refunding,
Ser A, GO (MBIA)
5.100%, 08/01/01 250 257
5.300%, 08/01/04 250 262
Louisiana State University
Agricultural & Mechanical
College (FGIC)
5.400%, 07/01/05 150 158
5.500%, 07/01/06 250 265
5.750%, 07/01/14 500 519
Louisiana State University
Agricultural & Mechanical
College (MBIA)
6.000%, 07/01/07 580 639
Louisiana State Unlimited
Tax, GO (FGIC)
5.125%, 04/15/08 1,000 1,027
Louisiana State Unlimited
Tax, GO (MBIA)
5.600%, 08/01/07 250 268
5.600%, 08/01/08 250 269
Louisiana State Unlimited
Tax, Ser A, GO (AMBAC)
6.000%, 05/01/07 1,000 1,089
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------
Louisiana State Unlimited
Tax, Ser A, GO (FGIC)
5.500%, 04/15/02 $1,750 $1,834
Louisiana State Unlimited
Tax, Ser A, GO (MBIA)
6.000%, 05/15/99 950 981
Louisiana State, GO (FGIC)
6.000%, 08/01/04 1,000 1,088
Louisiana State, Greater
New Orleans
Expressway, RB
4.800%, 11/01/97 25 25
Louisiana State, Ser A,
GO (MBIA)
5.500%, 05/15/05 500 530
5.600%, 05/15/07 750 803
Louisiana State, Ser A,
GO (MBIA)
5.700%, 05/15/08 250 268
Mandeville, Louisiana
Water Utility Improvements,
Ad Valorem Property Tax
5.150%, 02/01/10 100 101
Monroe, Louisiana Special
School District, GO (FGIC)
5.350%, 03/01/09 500 514
Natchitoches Parish,
Louisiana School
District #7, GO (FSA)
4.900%, 03/01/07 190 193
New Orleans, Louisiana
Home Mortgage Special
Obligation
6.250%, 01/15/11 500 551
New Orleans, Louisiana
Sewer Service, RB (FGIC)
6.250%, 06/01/07 1,215 1,362
5.250%, 06/01/11 1,000 1,014
New Orleans, Louisiana
Unlimited, GO (FGIC)
5.850%, 11/01/09 350 373
Orleans Parish School Board,
Louisiana Public School
Capital Refinancing,
RB (MBIA)
6.000%, 06/01/09 555 614
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 37
<PAGE>
STATEMENT OF NET ASSETS
LOUISIANA TAX-FREE INCOME FUND
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------
Orleans Parish School
Board, Louisiana Unlimited,
GO (FGIC)
5.300%, 09/01/10 $250 $255
Orleans Parish, Louisiana
School Board Public School
Capital Refinancing (MBIA)
5.000%, 12/01/05 250 257
Saint Bernard Parish, Louisiana
School Board Refunding,
GO (MBIA) (A)
4.550%, 05/01/06 200 199
4.600%, 05/01/07 200 198
4.700%, 05/01/08 200 198
4.800%, 05/01/09 200 198
4.900%, 05/01/10 200 198
Saint Charles Parish, Louisiana
Public Improvement Sales
Tax, Ser St-96 (MBIA)
5.000%, 12/01/06 500 514
Saint James Parish, Louisiana
General Obligation Unlimited
Ad Valorem Property Tax
4.800%, 03/01/05 85 86
5.200%, 03/01/08 75 76
Saint Tammany Parish Sales
& Use Tax Revenue (FGIC)
5.750%, 04/01/06 250 265
Saint Tammany Parish,
Louisiana School Board
Sales & Use Tax (FGIC)
5.750%, 04/01/03 250 266
Saint Tammany Parish,
Louisiana School
District #12 (FGIC)
6.500%, 03/01/05 200 212
Shreveport, Louisiana
Public Improvements
Ad Valorem Property Tax
4.750%, 12/01/09 200 195
Shreveport, Louisiana
Unlimited Tax,
GO (AMBAC)
5.150%, 02/01/09 265 269
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
Slidell, Louisiana Sales &
Use Tax Revenue Public
Improvement, Ser B, RB
5.400%, 10/01/07 $200 $ 209
Slidell, Louisiana Unlimited,
GO (AMBAC)
4.900%, 03/01/09 200 200
5.000%, 03/01/13 400 394
Slidell, Louisiana, Sales &
Use Tax Revenue Public
Improvement, Ser B
5.200%, 10/01/05 100 104
--------
37,145
--------
TOTAL MUNICIPAL BONDS
(Cost $36,115) 37,145
--------
CASH EQUIVALENTS -- 7.6%
SEI Tax Exempt Trust Institutional
Trust Tax Free
Portfolio 1,516 1,516
SEI Tax Exempt Trust Tax
Free Portfolio 1,514 1,514
--------
TOTAL CASH EQUIVALENTS
(Cost $3,030) 3,030
--------
TOTAL INVESTMENTS -- 101.4%
(Cost $39,145) 40,175
--------
OTHER ASSETS AND LIABILITIES,
NET -- (1.4%) (567)
--------
NET ASSETS:
FUND SHARES OF CLASS A
(unlimited authorization -- no
par value) based on
3,804,658 outstanding shares
of beneficial interest 37,501
FUND SHARES OF CLASS B
(unlimited authorization -- no
par value) based on
112,465 outstanding
shares of beneficial interest 1,131
Accumulated net realized loss
on investments (54)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
38 SEPTEMBER 30, 1997
<PAGE>
LOUISIANA TAX-FREE INCOME FUND
DESCRIPTION VALUE (000)
- -------------------------------------------
Net unrealized appreciation
on investments $ 1,030
-------
TOTAL NET ASSETS -- 100.0% $39,608
=======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE --
CLASS A $10.11
=======
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A
($10.11 / 96.50%) $10.48
=======
NET ASSET VALUE AND OFFERING PRICE
PER SHARE -- CLASS B (1) $10.11
=======
- ------------------------------------------
(A) WHEN ISSUED SECURITIES.
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 SALES CHARGE. FOR A DESCRIPTION OF
A POSSIBLE SALES CHARGE, SEE NOTES TO FINANCIAL STATEMENTS.
BALANCED FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------
COMMON STOCKS -- 54.7%
AEROSPACE & DEFENSE -- 1.9%
Sci Systems* 32,400 $ 1,606
Thiokol 11,780 1,013
--------
2,619
--------
AIR TRANSPORTATION -- 0.7%
British Airways,
PLC, ADR 9,200 1,005
--------
APPAREL/TEXTILES -- 0.9%
Tommy Hilfiger* 10,000 499
VF 7,900 732
--------
1,231
--------
AUTOMOTIVE -- 2.1%
Chrysler 26,500 976
Ford Motor 26,350 1,192
TRW 13,600 746
--------
2,914
--------
BANKS -- 2.8%
Citicorp 6,400 857
First Union 21,400 1,071
J.P. Morgan 9,900 1,125
PNC Bank 17,800 869
--------
3,922
--------
BUILDING & CONSTRUCTION -- 0.8%
Lennar 25,600 1,088
--------
CHEMICALS -- 2.8%
Dow Chemical 7,000 635
E.I. du Pont
de Nemours 18,140 1,117
Lubrizol 22,800 958
Vulcan Materials 13,950 1,214
--------
3,924
--------
COMPUTERS & SERVICES-- 3.7%
Applied Materials* 8,500 810
Compaq Computer* 17,500 1,308
Computer Associates
International 13,800 991
Quantum* 27,360 1,048
Tektronix 14,000 944
--------
5,101
--------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 39
<PAGE>
STATEMENT OF NET ASSETS
BALANCED FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------
CONSUMER PRODUCTS -- 0.7%
International Game
Technology 21,000 $ 478
Nine West Group* 11,000 432
--------
910
--------
DRUGS -- 1.3%
Merck 9,830 982
Schering Plough 16,400 845
--------
1,827
--------
ELECTRICAL SERVICES -- 4.8%
Baltimore Gas
& Electric 18,000 500
Consolidated Edison
New York 29,100 989
Duke Power 13,600 672
GPU 27,500 987
New England Electric
System 19,300 758
Nipsco Industries 18,300 771
OGE Energy 15,400 727
Pacific Enterprises 19,600 664
Southern 27,100 611
--------
6,679
--------
FINANCIAL SERVICES -- 3.2%
Bear Stearns 38,256 1,683
Greenpoint Financial 17,400 1,103
Slm Holding 10,600 1,638
--------
4,424
--------
FOOD, BEVERAGE & TOBACCO -- 1.8%
IBP 28,400 671
Philip Morris 20,100 835
Quaker Oats 20,660 1,041
--------
2,547
--------
HOUSEHOLD PRODUCTS -- 1.3%
Armstrong World
Industries 12,470 836
Maytag 30,000 1,024
--------
1,860
--------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------
INSURANCE -- 3.3%
AMBAC 34,600 $ 1,408
Conseco 21,840 1,066
Equitable 32,340 1,328
Providian Financial* 18,400 730
--------
4,532
--------
LEISURE -- 0.4%
Callaway Golf 16,000 558
--------
LUMBER & WOOD PRODUCTS -- 0.8%
Plum Creek Timber 32,000 1,084
--------
MACHINERY -- 3.5%
Caterpillar 20,400 1,100
Crane 19,500 802
Cummins Engine 14,000 1,093
Deere 13,800 742
Parker Hannifin 25,275 1,137
--------
4,874
--------
MEDICAL PRODUCTS & SERVICES -- 1.3%
HBO 25,010 944
Lincare Holdings* 15,700 792
--------
1,736
--------
MISCELLANEOUS MANUFACTURING -- 1.2%
Harsco 22,800 1,035
Wolverine Tube* 20,800 653
--------
1,688
--------
PETROLEUM & FUEL PRODUCTS -- 4.1%
Ensco International 31,480 1,241
Noble Drilling* 36,000 1,161
Phillips Petroleum 18,200 940
Union Texas Petroleum 50,000 1,175
USX-Marathon Group 33,000 1,227
--------
5,744
--------
PETROLEUM REFINING -- 1.4%
British Petroleum ADR 11,960 1,086
Mobil 12,000 888
--------
1,974
--------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
40 SEPTEMBER 30, 1997
<PAGE>
BALANCED FUND
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------
PROFESSIONAL SERVICES -- 1.3%
Moore 41,590 $ 790
Tech Data* 23,000 1,058
--------
1,848
--------
RAILROADS -- 0.7%
Illinois Central 26,700 981
--------
RETAIL -- 4.6%
American Stores 34,600 843
BJ Wholesale Club* 27,700 808
Dayton Hudson 16,010 960
Homebase * 27,700 249
Limited 26,000 635
Lone Star Steakhouse
& Saloon* 20,000 418
Ross Stores 34,260 1,169
TJX 40,400 1,235
--------
6,317
--------
STEEL & STEEL WORKS -- 0.7%
USX-U.S. Steel Group 28,530 991
--------
TELEPHONES & TELECOMMUNICATION -- 1.9%
Ameritech 12,700 845
Century Telephone
Enterprises 25,750 1,133
SBC Communications 10,800 663
--------
2,641
--------
TRUCKING -- 0.7%
Werner Enterprises 41,550 1,008
--------
TOTAL COMMON STOCKS
(Cost $54,977) 76,027
--------
U.S. GOVERNMENT AGENCY
OBLIGATIONS -- 3.5%
FNMA
5.875%, 02/02/06 $ 5,000 4,838
--------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $4,886) 4,838
--------
DESCRIPTION PAR (000) VALUE (000)
- ---------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS -- 15.5%
FHLMC
7.000%, 04/01/00 $ 5 $ 5
9.000%, 05/01/06 82 87
9.000%, 08/01/09 368 383
6.500%, 11/15/22 1,486 1,451
FHLMC REMIC
7.150%, 01/15/23 2,000 1,978
FNMA
7.000%, 09/01/07 1,188 1,200
FNMA CMO
7.000%, 01/25/03 1,863 1,854
GNMA
7.500%, 08/15/07 480 495
6.500%, 07/15/08 571 571
7.000%, 07/15/08 449 456
6.500%, 03/15/09 55 55
6.500%, 05/15/09 1,413 1,412
13.500%, 05/15/11 16 19
12.500%, 10/15/13 2 3
12.000%, 03/15/14 18 21
13.500%, 09/15/14 12 15
9.000%, 12/15/16 78 83
10.000%, 07/15/18 114 125
10.000%, 03/15/19 82 90
7.000%, 04/15/24 1,135 1,136
7.500%, 06/15/25 1,760 1,791
7.000%, 02/15/26 6,910 6,910
7.500%, 05/15/26 703 716
8.000%, 05/15/26 659 682
--------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $21,536) 21,538
--------
U.S. TREASURY OBLIGATIONS -- 19.7%
U.S. Treasury Bonds
5.625%, 02/15/06 3,000 2,892
6.500%, 08/15/05 1,500 1,531
7.125%, 02/15/23 1,000 1,078
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 41
<PAGE>
STATEMENT OF NET ASSETS
BALANCED FUND
DESCRIPTION PAR (000) VALUE (000)
- -------------------------------------------
U.S. Treasury Notes
9.000%, 05/15/98 $2,000 $ 2,042
9.250%, 08/15/98 2,000 2,060
6.375%, 01/15/99 1,000 1,008
7.000%, 04/15/99 3,000 3,053
6.375%, 07/15/99 1,500 1,515
8.000%, 08/15/99 2,000 2,076
8.500%, 02/15/00 500 529
6.250%, 10/31/01 2,000 2,017
6.250%, 08/31/02 2,000 2,017
6.250%, 02/15/03 4,000 4,039
5.750%, 08/15/03 1,500 1,476
--------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $27,228) 27,333
--------
CASH EQUIVALENTS -- 4.2%
SEI Liquid Asset Trust
Government
Portfolio 2,876 2,876
SEI Liquid Asset Trust
Treasury Portfolio 2,926 2,926
--------
TOTAL CASH EQUIVALENTS
(Cost $5,802) 5,802
--------
REPURCHASE AGREEMENT -- 3.4%
UBS SECURITIES
6.01%, dated 09/30/97, matures
10/01/97, repurchase price
$4,743,000 (collateralized by
U.S. Treasury Note, par
value $4,840,000, 5.75%,
09/30/99, market value:
$4,837,000) 4,742 4,742
--------
TOTAL REPURCHASE AGREEMENT
(Cost $4,742) 4,742
--------
TOTAL INVESTMENTS -- 101.0%
(Cost $119,171) 140,280
--------
OTHER ASSETS AND LIABILITIES,
NET -- (1.0%) (1,400)
--------
DESCRIPTION VALUE (000)
- ------------------------------------------
NET ASSETS:
FUND SHARES OF CLASS A
(unlimited authorization -- no
par value) based on
10,180,487 outstanding
shares of beneficial
interest $103,672
FUND SHARES OF CLASS B
(unlimited authorization -- no
par value) based on
295,648 outstanding
shares of beneficial
interest 3,299
Accumulated net realized gain
on investments 10,800
Net unrealized appreciation
on investments 21,109
--------
TOTAL NET ASSETS -- 100.0% $138,880
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A $13.25
========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A
($13.25 / 96.50%) $13.73
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B (1) $13.32
========
- ------------------------------------------
* NON-INCOME PRODUCING SECURITY
ADR--AMERICAN DEPOSITORY RECEIPT
CMO--COLLATERALIZED MORTGAGE OBLIGATION
GNMA--GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
FHLMC--FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA--FEDERAL NATIONAL MORTGAGE ASSOCIATION
PLC--PUBLIC LIMITED COMPANY
REMIC--REAL ESTATE MORTGAGE INVESTMENT CONDUIT
(1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. FOR A
DESCRIPTION OF A POSSIBLE SALES CHARGE, SEE NOTES TO THE
FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
42 SEPTEMBER 30, 1997
<PAGE>
VALUE EQUITY FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------
COMMON STOCKS -- 99.1%
AEROSPACE & DEFENSE -- 3.4%
Sci Systems* 61,600 $ 3,053
Thiokol 21,400 1,840
--------
4,893
--------
AIR TRANSPORTATION -- 4.6%
Airborne Freight 43,520 2,636
Federal Express* 26,420 2,114
Southwest Airlines 58,640 1,873
--------
6,623
--------
APPAREL/TEXTILES -- 2.1%
Russell 42,000 1,236
VF 20,000 1,853
--------
3,089
--------
AUTOMOTIVE -- 2.3%
Chrysler 39,800 1,465
Ford Motor 41,000 1,855
--------
3,320
--------
BANKS -- 6.8%
Bank of New York 35,360 1,697
BankAmerica 28,600 2,097
Citicorp 14,500 1,942
First Union 25,000 1,252
J.P. Morgan 13,500 1,534
Republic New York 10,800 1,227
--------
9,749
--------
BUILDING & CONSTRUCTION -- 1.4%
Centex 35,060 2,047
--------
CHEMICALS -- 5.0%
Dexter 48,800 1,955
Dow Chemical 17,300 1,569
Lubrizol 41,850 1,758
Vulcan Materials 21,760 1,893
--------
7,175
--------
COMPUTERS & SERVICES -- 6.9%
Applied Materials* 26,900 2,562
Compaq Computer* 46,000 3,440
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------
Computer Associates
International 29,110 $ 2,090
Quantum* 49,720 1,905
--------
9,997
--------
CONCRETE & MINERAL PRODUCTS -- 2.5%
Lafarge 63,000 2,032
Phelps Dodge 19,540 1,517
--------
3,549
--------
DRUGS -- 2.5%
Eli Lilly 12,500 1,505
Perrigo* 132,320 2,084
--------
3,589
--------
ELECTRICAL SERVICES -- 8.9%
Baltimore Gas
& Electric 51,500 1,429
Consolidated Edison
New York 41,000 1,394
Duke Power 58,098 2,872
Enova 70,100 1,770
GPU 40,000 1,435
New England Electric
System 24,300 954
PP&L Resources 57,000 1,247
Southern 74,500 1,681
--------
12,782
--------
ENTERTAINMENT -- 1.4%
King World Productions 46,000 1,990
--------
FINANCIAL SERVICES -- 5.6%
AG Edwards 30,000 1,541
Bear Stearns 48,582 2,138
Painewebber Group 53,300 2,482
Slm Holding 12,530 1,936
--------
8,097
--------
FOOD, BEVERAGE & TOBACCO -- 4.5%
Adolph Coors, Cl B 75,730 2,868
Dean Foods 42,400 1,961
Universal 43,600 1,581
--------
6,410
--------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 43
<PAGE>
STATEMENT OF NET ASSETS
VALUE EQUITY FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------
GAS/NATURAL GAS -- 1.8%
National Fuel & Gas 37,000 $ 1,628
Peoples Energy 26,500 999
--------
2,627
--------
INSURANCE -- 5.4%
AMBAC 41,000 1,668
Conseco 36,300 1,772
Equitable 49,800 2,045
Travelers 33,000 2,252
--------
7,737
--------
MACHINERY -- 7.4%
Aeroquip-Vickers 34,890 1,710
Caterpillar 38,200 2,060
Cummins Engine 22,000 1,717
Deere 31,000 1,666
Ingersoll Rand 36,000 1,550
Parker Hannifin 42,330 1,905
--------
10,608
--------
MEDICAL PRODUCTS & SERVICES -- 1.2%
Tenet Healthcare* 61,650 1,796
--------
MISCELLANEOUS MANUFACTURING -- 2.5%
Arvin Industries 49,130 1,928
Magna International,
Cl A 24,150 1,669
--------
3,597
--------
MISCELLANEOUS TRANSPORTATION -- 0.8%
Fleetwood Enterprises 36,000 1,208
--------
PETROLEUM & FUEL PRODUCTS -- 4.4%
Noble Drilling* 70,300 2,267
Transocean Offshore 45,380 2,175
USX-Marathon Group 50,000 1,859
--------
6,301
--------
PETROLEUM REFINING -- 3.7%
British Petroleum ADR 21,740 1,974
Chevron 22,000 1,830
Mobil 20,800 1,539
--------
5,343
--------
PRINTING & PUBLISHING -- 1.2%
Washington Post, Cl B 3,980 1,784
--------
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------
PROFESSIONAL SERVICES -- 1.6%
Tech Data* 49,680 $ 2,285
--------
RETAIL -- 8.0%
American Stores 47,800 1,165
Consolidated Stores* 51,250 2,146
Mac Frugals
Bargains Close* 59,110 1,803
Premark International 59,660 1,909
Ross Stores 72,000 2,457
TJX 66,040 2,018
--------
11,498
--------
RUBBER & PLASTIC -- 0.9%
Goodyear Tire & Rubber 19,000 1,306
--------
STEEL & STEEL WORKS -- 1.1%
USX-U.S. Steel Group 45,700 1,588
--------
WHOLESALE -- 1.2%
Super-Valu 44,400 1,743
--------
TOTAL COMMON STOCKS
(Cost $109,093) 142,731
--------
CASH EQUIVALENT -- 0.8%
SEI Liquid Asset Trust
Government Portfolio $ 1,216 1,216
--------
TOTAL CASH EQUIVALENT
(Cost $1,216) 1,216
--------
TOTAL INVESTMENTS -- 99.9%
(Cost $110,309) 143,947
--------
OTHER ASSETS AND LIABILITIES,
NET -- 0.1% 115
--------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
44 SEPTEMBER 30, 1997
<PAGE>
VALUE EQUITY FUND
DESCRIPTION VALUE (000)
- ------------------------------------------
NET ASSETS:
FUND SHARES OF CLASS A
(unlimited authorization -- no
par value) based on 7,688,754
outstanding shares of
beneficial interest $ 84,091
FUND SHARES OF CLASS B
(unlimited authorization -- no
par value) based on
568,282 outstanding shares
of beneficial interest 7,505
Accumulated net realized gain
on investments 18,698
Net unrealized appreciation
on investments 33,638
Undistributed net investment income 130
--------
TOTAL NET ASSETS -- 100.0% $144,062
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A $17.44
========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A
($17.44 / 96.50%) $18.07
========
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B (1) $17.50
========
- -------------------------------------------
* NON-INCOME PRODUCING SECURITY
(1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
ADR--AMERICAN DEPOSITORY RECEIPT
CL--CLASS
GROWTH EQUITY FUND
DESCRIPTION SHARES VALUE (000)
- ------------------------------------------
COMMON STOCKS -- 92.3%
AGRICULTURE -- 1.7%
Dekalb Genetics, Cl B 6,790 $ 301
Pioneer Hi-Bred
International 3,010 274
--------
575
--------
AIRCRAFT -- 1.3%
Sundstrand 3,365 194
United Technologies 2,835 230
--------
424
--------
APPAREL/TEXTILES -- 1.3%
Jones Apparel Group* 8,000 432
--------
AUTOMOTIVE -- 0.6%
Federal Mogul 5,415 201
--------
BANKS -- 1.5%
Star Banc 4,360 200
State Street 2,085 127
Synovus Financial 7,905 180
--------
507
--------
BEAUTY PRODUCTS -- 2.1%
Avon Products 6,000 372
Colgate-Palmolive 4,580 319
--------
691
--------
BROADCASTING, NEWSPAPERS &
ADVERTISING -- 0.8%
Omnicom Group 3,700 269
--------
CHEMICALS -- 2.6%
Betzdearborn 3,240 222
E.I. du Pont de Nemours 6,000 369
Monsanto 3,380 132
Praxair 2,760 141
Solutia* 676 14
--------
878
--------
COMMUNICATIONS EQUIPMENT -- 2.3%
ADC Telecommunications* 6,615 215
Northern Telecom 2,340 243
Tellabs* 5,800 299
--------
757
--------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 45
<PAGE>
STATEMENT OF NET ASSETS
GROWTH EQUITY FUND
DESCRIPTION SHARES VALUE (000)
- ------------------------------------------
COMPUTERS & SERVICES -- 5.3%
Compaq Computer* 8,000 $ 598
Creative Technology
Limited* 5,730 146
Dell Computer* 3,040 295
Diebold 4,290 203
Hewlett Packard 2,065 144
IBM 2,035 216
Western Digital* 4,040 162
--------
1,764
--------
CONTAINERS & PACKAGING -- 0.2%
Newell 1,990 80
--------
DRUGS -- 6.9%
Alza, Cl A* 2,830 82
American Home Products 1,860 136
Bristol-Myers Squibb 4,400 364
Eli Lilly 3,750 452
Merck 3,300 330
Pharmacia Upjohn ADR 3,800 139
Schering Plough 8,200 422
Warner Lambert 2,700 364
--------
2,289
--------
ENTERTAINMENT -- 0.3%
Walt Disney 1,435 116
--------
FINANCIAL SERVICES -- 3.9%
American Express 1,325 108
Franklin Resources 6,750 629
Price (T. Rowe)
Associates 4,060 273
Slm Holding 1,900 294
--------
1,304
--------
FOOD, BEVERAGE & TOBACCO -- 6.4%
Campbell Soup 6,400 314
Coca Cola Company 5,500 335
Coca Cola Enterprises 3,540 95
Flowers Industries 5,100 104
H.J. Heinz 5,875 271
Hershey Foods 4,690 265
Panamerican
Beverage, Cl A 3,430 134
PepsiCo 4,140 168
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------
Philip Morris 7,800 $ 324
Ralston Purina Group 1,530 135
--------
2,145
--------
GLASS PRODUCTS -- 0.5%
Corning 3,380 160
--------
HOTELS & LODGING -- 1.5%
Marriott International 5,000 355
Promus Hotel* 3,400 152
--------
507
--------
HOUSEHOLD PRODUCTS -- 3.0%
Clorox 2,000 148
General Electric 6,200 422
Hubbell, Cl B 4,520 209
Illinois Tool Works 4,200 210
--------
989
--------
INDUSTRIAL -- 0.4%
Choicepoint* 680 25
Viad 5,195 99
--------
124
--------
INSURANCE -- 1.5%
American International
Group 2,257 233
MGIC Investment 4,600 264
--------
497
--------
LEASING & RENTING-- 0.9%
Pitney Bowes 3,700 308
--------
LEISURE -- 0.8%
Callaway Golf 7,500 262
--------
LUMBER & WOOD PRODUCTS -- 0.6%
Plum Creek Timber 6,200 210
--------
MACHINERY -- 3.7%
Aeroquip-Vickers 4,415 216
Crane 4,375 180
Dover 2,125 144
Dresser Industries 4,830 208
Flowserve 7,800 233
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
46 SEPTEMBER 30, 1997
<PAGE>
GROWTH EQUITY FUND
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------
SPX 1,560 $ 91
Tyco International
Limited 2,150 176
--------
1,248
--------
MARINE TRANSPORTATION -- 0.7%
Carnival, Cl A 5,000 231
--------
MEASURING DEVICES -- 1.1%
Perkin Elmer 3,090 226
Thermo Instrument
Systems* 3,280 138
--------
364
--------
MEDICAL PRODUCTS & SERVICES -- 3.8%
Becton Dickinson 1,525 73
Dentsply International 4,200 235
HBO 6,000 227
Health Management
Associates, Cl A* 3,030 96
Healthsouth
Rehabilitation* 3,490 93
Johnson & Johnson 5,000 288
Oxford Health Plan* 1,155 87
Sybron International* 3,630 156
--------
1,255
--------
MISCELLANEOUS BUSINESS SERVICES -- 5.2%
Adaptec* 5,305 248
Altera* 4,145 212
BMC Software* 5,600 363
Equifax 6,800 214
Microsoft* 2,140 283
Netscape Communications* 39 1
Newbridge Networks* 1,730 104
Peoplesoft* 5,275 315
--------
1,740
--------
MISCELLANEOUS CONSUMER SERVICES -- 0.8%
Robert Half
International* 6,375 264
--------
MISCELLANEOUS MANUFACTURING -- 2.0%
Belden 9,000 339
Cognex* 6,545 215
Kemet* 4,350 132
--------
686
--------
DESCRIPTION SHARES VALUE (000)
- -------------------------------------------
OFFICE FURNITURE & FIXTURES -- 2.0%
Hon Industries 2,815 $ 163
Miller Herman 9,290 497
--------
660
--------
PETROLEUM & FUEL PRODUCTS -- 8.8%
BJ Services* 2,270 169
Cooper Cameron* 4,465 321
Ensco International 8,750 345
Falcon Drilling* 5,330 188
Halliburton 6,545 340
Marine Drilling* 9,090 284
Nabors Industries* 4,820 188
Newfield Exploration* 11,175 314
Schlumberger 4,000 337
Smith International* 2,040 159
Transocean Offshore 6,040 290
--------
2,935
--------
PHOTOGRAPHIC EQUIPMENT & SUPPLIES -- 0.5%
Xerox 2,015 170
--------
PRINTING & PUBLISHING-- 3.1%
Gannett 1,340 145
McGraw Hill 3,420 232
Meredith 10,100 335
Time Warner 3,560 193
Tribune 2,500 133
--------
1,038
--------
PROFESSIONAL SERVICES -- 0.9%
Servicemaster Limited
Partnership 10,125 289
--------
RETAIL -- 6.8%
Bed Bath and Beyond* 4,440 156
Dayton Hudson 2,460 147
Dollar General 4,343 148
Dollar Tree Stores* 3,715 156
General Nutrition* 10,485 305
Home Depot 2,997 156
Kohls* 2,450 174
Kroger* 7,200 217
Quality Food Centers* 3,650 149
Ross Stores 4,710 161
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 47
<PAGE>
STATEMENT OF NET ASSETS
GROWTH EQUITY FUND
DESCRIPTION SHARES/PAR (000) VALUE (000)
- ------------------------------------------
TJX 10,000 $ 306
Walgreen 8,260 212
--------
2,287
--------
RUBBER & PLASTIC -- 0.5%
Sealed Air* 3,100 170
--------
SEMI-CONDUCTORS/INSTRUMENTS -- 2.1%
American Power
Conversion* 5,125 144
Amphenol* 4,013 173
Intel 2,756 254
Vitesse Semiconductor* 2,992 148
--------
719
--------
TELEPHONES & TELECOMMUNICATION -- 3.6%
Ameritech 1,465 97
Bell Atlantic 3,000 241
BellSouth 5,300 245
Cincinnati Bell 6,200 176
Ericsson Telephone ADR 3,020 145
Lucent Technologies 2,566 209
U.S. West 2,625 101
--------
1,214
--------
WHOLESALE -- 0.3%
Cardinal Health 1,205 86
--------
TOTAL COMMON STOCKS
(Cost $22,765) 30,845
--------
CASH EQUIVALENT -- 3.0%
SEI Liquid Asset Trust
Government Portfolio $ 1,002 1,002
--------
TOTAL CASH EQUIVALENT
(Cost $1,002) 1,002
--------
REPURCHASE AGREEMENT -- 4.3%
UBS SECURITIES
6.010%, dated 9/30/97,
matures 10/1/97, repurchase
price $1,433,000
(collateralized by U.S.
Treasury Note, par
value $1,465,000,
5.750%, 9/30/99,
market value:
$1,464,000) 1,432 1,432
--------
DESCRIPTION VALUE (000)
- ------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $1,432) $ 1,432
--------
TOTAL INVESTMENTS -- 99.6%
(Cost $25,199) 33,279
--------
OTHER ASSETS AND LIABILITIES,
NET -- 0.4% 129
--------
NET ASSETS:
FUND SHARES OF CLASS A
(unlimited authorization -- no
par value) based on
1,999,203 outstanding
shares of
beneficial interest 23,023
FUND SHARES OF CLASS B
(unlimited authorization -- no
par value) based on
114,347 outstanding shares of
beneficial interest 1,561
Accumulated net realized gain
on investments 745
Net unrealized appreciation
on investments 8,080
Distributions in excess of net
investment income (1)
--------
TOTAL NET ASSETS -- 100.0% $33,408
========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A $15.81
========
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A
($15.81 / 96.50%) $16.38
========
NET ASSET VALUE AND OFFERING PRICE
PER SHARE -- CLASS B (1) $15.74
========
- -------------------------------------------
* NON-INCOME PRODUCING SECURITY
(1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
ADR--AMERICAN DEPOSITORY RECEIPT
CL--CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
48 SEPTEMBER 30, 1997
<PAGE>
SMALL CAP EQUITY FUND
DESCRIPTION SHARES VALUE (000)
- ------------------------------------------
INVESTMENT COMPANY -- 98.1%
SEI Institutional Managed
Trust Small Cap
Growth Portfolio 216,893 $4,190
------
TOTAL INVESTMENT COMPANY
(Cost $3,361) 4,190
------
TOTAL INVESTMENTS -- 98.1%
(Cost $3,361) 4,190
------
OTHER ASSETS AND LIABILITIES,
NET -- 1.9% 80
------
NET ASSETS:
FUND SHARES OF CLASS A
(unlimited authorization -- no
par value) based on
296,227 outstanding shares of
beneficial interest 2,904
FUND SHARES OF CLASS B
(unlimited authorization -- no
par value) based on 53,767
outstanding shares of
beneficial interest 550
Accumulated net realized loss
on investments (13)
Net unrealized appreciation
on investments 829
------
TOTAL NET ASSETS -- 100.0% $4,270
======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A $12.21
======
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A
($12.21 / 96.50%) $12.65
======
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B (1) $12.16
======
- -------------------------------------------
(1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
INTERNATIONAL EQUITY FUND
DESCRIPTION SHARES VALUE (000)
- ------------------------------------------
INVESTMENT COMPANY -- 98.2%
SEI International Trust
International Equity
Portfolio 353,175 $3,723
------
TOTAL INVESTMENT COMPANY
(Cost $3,630) 3,723
------
TOTAL INVESTMENTS -- 98.2%
(Cost $3,630) 3,723
------
OTHER ASSETS AND LIABILITIES,
NET -- 1.8% 70
------
NET ASSETS:
FUND SHARES OF CLASS A
(unlimited authorization -- no
par value) based on
312,678 outstanding shares of
beneficial interest 3,349
FUND SHARES OF CLASS B
(unlimited authorization -- no
par value) based on 32,740
outstanding shares of
beneficial interest 349
Accumulated net realized gain
on investments 2
Net unrealized appreciation
on investments 93
------
TOTAL NET ASSETS -- 100.0% $3,793
======
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE -- CLASS A $10.98
======
MAXIMUM OFFERING PRICE PER
SHARE -- CLASS A
($10.98 / 96.50%) $11.38
======
NET ASSET VALUE AND OFFERING
PRICE PER SHARE -- CLASS B (1) $10.94
======
- -------------------------------------------
(1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. FOR A DESCRIPTION OF A
POSSIBLE SALES CHARGE, SEE NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
SEPTEMBER 30, 1997 49
<PAGE>
STATEMENT OF OPERATIONS (000)
<TABLE>
<CAPTION>
TREASURY STRATEGIC LOUISIANA
INSTITUTIONAL SECURITIES TAX EXEMPT GOVERNMENT INCOME TAX-FREE
MONEY MARKET MONEY MARKET MONEY MARKET SECURITIES BOND INCOME
FUND FUND FUND FUND FUND (2) FUND
---------- ---------- ------------ ------------ ---------- ----------
10/1/96 10/1/96 10/1/96 10/1/96 1/31/97 10/1/96
TO 9/30/97 TO 9/30/97 TO 9/30/97 TO 9/30/97 TO 9/30/97 TO 9/30/97
---------- ---------- ------------ ------------ ---------- ----------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C> <C>
Interest income $3,139 $63,906 $2,869 $ 9,676 $644 $1,418
Dividend income -- -- -- -- -- --
------ ------- ------ ------- ---- ------
TOTAL INVESTMENT INCOME 3,139 63,906 2,869 9,676 644 1,418
------ ------- ------ ------- ---- ------
EXPENSES:
Administration fees 58 1,764 115 232 14 43
Less: waiver of administration fees -- (36) (20) (41) (9) (7)
Investment advisory fees 87 3,529 362 852 67 100
Less: waiver of investment
advisory fees (65) (12) (22) (58) (39) (3)
Custodian fees 9 176 12 23 1 4
Transfer agent fees 14 69 12 36 16 31
Distribution fees (1) -- 1,608 192 5 1 6
Less: waiver of distribution fees (1) -- (364) (192) -- -- --
Professional fees 4 121 19 16 6 1
Registration fees 33 112 4 1 21 5
Trustee fees 1 30 2 3 -- --
Printing expense 2 62 5 9 1 1
Amortization of deferred
organization costs -- 35 1 6 -- --
Insurance and other fees 1 31 11 5 3 1
------ ------- ------ ------- ---- ------
TOTAL EXPENSES 144 7,125 501 1,089 82 182
------ ------- ------ ------- ---- -------
LESS:
Reimbursement by Administrator -- -- -- -- -- --
------ ------- ------ ------- ---- ------
NET INVESTMENT INCOME 2,995 56,781 2,368 8,587 562 1,236
------ ------- ------ ------- ---- ------
NET REALIZED GAIN (LOSS) ON SECURITIES SOLD -- 34 -- (19) -- --
CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENT SECURITIES -- -- -- 3,734 239 1,038
------ ------- ------ ------- ---- ------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS -- 34 -- 3,715 239 1,038
------ ------- ------ ------- ---- ------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $2,995 $56,785 $2,368 $12,302 $801 $2,274
====== ======= ====== ======= ==== ======
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(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.
(2) THE STRATEGIC INCOME BOND FUND COMMENCED OPERATIONS ON JANUARY 31, 1997.
(3) THE SMALL CAP EQUITY AND INTERNATIONAL EQUITY FUNDS COMMENCED OPERATIONS ON
JANUARY 31, 1997.
</FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
50 SEPTEMBER 30, 1997
<PAGE>
<TABLE>
<CAPTION>
VALUE GROWTH SMALL CAP INTERNATIONAL
BALANCED EQUITY EQUITY EQUITY EQUITY
FUND FUND FUND FUND (3) FUND (3)
---------- ---------- ---------- ----------- -----------
10/1/96 10/1/96 10/1/96 1/31/97 1/31/97
TO 9/30/97 TO 9/30/97 TO 9/30/97 TO 9/30/97 TO 9/30/97
---------- ---------- ---------- ---------- ----------
INVESTMENT INCOME:
<S> <C> <C> <C> <C> <C>
Interest income $ 3,435 $ 137 $ 116 $ -- $ --
Dividend income 1,459 2,561 260 -- --
------- ------- ------ ---- ----
TOTAL INVESTMENT INCOME 4,894 2,698 376 -- --
------- ------- ------ ---- ----
EXPENSES:
Administration fees 186 173 39 2 2
Less: waiver of administration fees (33) (5) (7) (2) (2)
Investment advisory fees 918 872 191 6 4
Less: waiver of investment
advisory fees (41) -- (5) (3) (2)
Custodian fees 18 18 4 -- --
Transfer agent fees 41 38 25 14 14
Distribution fees (1) 21 46 6 1 1
Less: waiver of distribution fees (1) -- -- -- -- --
Professional fees 9 13 3 -- --
Registration fees 3 15 3 1 1
Trustee fees 2 4 -- -- --
Printing expense 6 15 3 4 4
Amortization of deferred
organization costs 4 9 1 -- --
Insurance and other fees 3 2 -- -- --
------- ------- ------ ----- ----
TOTAL EXPENSES 1,137 1,200 263 23 22
------- ------- ------ ----- ----
LESS:
Reimbursement by Administrator -- -- -- (19) (18)
------- ------- ------ ----- ----
NET INVESTMENT INCOME 3,757 1,498 113 (4) (4)
------- ------- ------ ----- ----
NET REALIZED GAIN (LOSS) ON SECURITIES SO 12,142 18,764 818 (9) 6
CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENT SECURITIE 13,260 23,918 6,453 829 93
------- ------- ------ ----- ----
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 25,402 42,682 7,271 820 98
------- ------- ------ ----- ----
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $29,159 $44,180 $7,384 $ 816 $ 95
======= ======= ====== ===== ====
</TABLE>
SEPTEMBER 30, 1997 51
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
INSTITUTIONAL TREASURY SECURITIES TAX EXEMPT GOVERNMENT
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND (6) SECURITIES FUND
---------------------- ----------------------- --------------------- ----------------------
10/1/96 10/1/95 10/1/96 10/1/95 10/1/96 6/7/96 10/1/96 10/1/95
TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/96
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net investment income $ 2,995 $ 1,510 $ 56,781 $ 46,0002 $ 2,368 $ 469 $ 8,587 $ 8,530
Net realized gain (loss) on
securities sold -- -- 4 8 -- -- (19) 169
Net unrealized appreciation
(depreciation) of investment
securities -- -- -- -- -- -- 3,734 (3,474)
--------- -------- ---------- ----------- --------- -------- -------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 2,995 1,510 56,785 46,010 2,368 469 12,302 5,225
--------- -------- ---------- ----------- --------- -------- -------- --------
DISTRIBUTIONS TO SHAREHOLDERS:
Income distribution Class A(1) (2,995) (1,510) (30,423) (29,276) (2,368) (469) (8,550) (8,516)
Income distribution Class B(2) -- -- (24,421) (16,726) -- -- (37) (18)
Income distribution Class C(3) -- -- (1,937) -- -- -- -- --
Capital gain distribution
Class A(1) -- -- -- -- -- -- -- --
Capital gain distribution
Class B(2) -- -- -- -- -- -- -- --
--------- -------- ---------- ----------- --------- -------- -------- --------
TOTAL DISTRIBUTIONS (2,995) (1,510) (56,781) 46,002 (2,368) (469) (8,587) (8,534)
--------- -------- ---------- ----------- --------- -------- -------- --------
SHARE TRANSACTIONS:
Class A (1):
Shares issued 340,575 102,959 1,432,933 1,168,501 -- -- 38,560 94,996
Shares issued in lieu of
cash distribution -- -- 334 184 -- -- 4,088 4,408
Shares redeemed (310,063) (106,269) (1,514,130) (1,052,141) -- -- (57,641) (60,190)
--------- -------- ---------- ----------- --------- -------- ---------- --------
TOTAL CLASS A SHARE
TRANSACTIONS 30,512 (3,310) (80,863) 116,544 -- -- (14,993) 39,214
--------- -------- ---------- ----------- --------- -------- -------- --------
Class B (2):
Shares issued -- -- 1,126,969 877,916 154,486 106,346 595 310
Shares issued in lieu of
cash distribution -- -- 12,486 9,617 1,280 222 34 17
Shares redeemed -- -- (945,607) (759,215) (145,236) (40,354) (107) (40)
--------- -------- ---------- ----------- --------- -------- -------- --------
TOTAL CLASS B SHARE
TRANSACTIONS -- -- 193,848 128,318 10,530 66,214 522 287
--------- -------- ---------- ----------- --------- -------- -------- --------
Class C (3):
Shares issued -- -- 312,106 -- -- -- -- --
Shares issued in lieu of
cash distribution -- -- -- -- -- -- -- --
Shares redeemed -- -- (109,894) -- -- -- -- --
--------- -------- ---------- ----------- --------- -------- -------- --------
TOTAL CLASS C SHARE
TRANSACTIONS -- -- 202,212 -- -- -- -- --
--------- -------- ---------- ----------- --------- -------- -------- --------
INCREASE (DECREASE) IN NET ASSETS
FROM SHAREHOLDER TRANSACTIONS 30,512 (3,310) 315,197 244,862 10,530 66,214 (14,471) 39,501
--------- -------- ---------- ----------- --------- -------- ---------- --------
TOTAL INCREASE (DECREASE) IN
NET ASSETS 30,512 (3,310) 315,201 244,870 10,530 66,214 (10,756) 36,192
--------- -------- ---------- ----------- --------- -------- -------- --------
STRATEGIC INCOME LOUISIANA TAX-FREE VALUE
BOND FUND (4) INCOME FUND BALANCED FUND EQUITY FUND
---------------- ----------------------- ------------------------- -----------------------
1/31/97 10/1/96 10/1/95 10/1/96 10/1/95 10/1/96 10/1/95
TO 9/30/97 TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/97
---------- ---------- ---------- ----------- ---------- ---------- ----------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment income $ 562 $ 1,236 $ 777 $ 3,757 $ 3,754 $ 1,498 $ 1,636
Net realized gain (loss) on
securities sold -- -- (20) 12,142 4,170 18,764 6,632
Net unrealized appreciation
(depreciation) of investment
securities 239 1,038 (37) 13,260 1,350 23,918 1,141
------- -------- ------- ---------- ---------- ---------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 801 2,274 720 29,159 9,274 44,180 9,409
------- -------- ------- ---------- ---------- ---------- ---------
DISTRIBUTIONS TO SHAREHOLDERS:
Income distribution Class A(1) (554) (1,206) (752) (3,676) (3,722) (1,459) (1,595)
Income distribution Class B(2) (8) (30) (25) (68) (45) (39) (40)
Income distribution Class C(3) -- -- -- -- -- -- --
Capital gain distribution
Class A(1) -- -- -- (4,877) (1,259) (5,916) (987)
Capital gain distribution
Class B(2) -- -- -- (98) (17) (269) (26)
------- -------- ------- ---------- ---------- ---------- ---------
TOTAL DISTRIBUTIONS (562) (1,236) (777) (8,719) (5,043) (7,683) (2,648)
------- -------- -------- ---------- ---------- ---------- ---------
SHARE TRANSACTIONS:
Class A (1):
Shares issued 17,068 21,750 15,116 15,119 55,812 32,366 42,018
Shares issued in lieu of
cash distribution 261 546 295 7,838 4,680 3,882 1,256
Shares redeemed (1,996) (5,774) (6,126) (22,355) (37,358) (30,068) (15,165)
------- -------- -------- ---------- ---------- ---------- ---------
TOTAL CLASS A SHARE
TRANSACTIONS 15,333 16,522 9,285 602 23,134 6,180 28,109
------- -------- ------- ---------- ---------- ---------- ---------
Class B (2):
Shares issued 454 429 183 1,543 926 4,063 2,725
Shares issued in lieu of
cash distribution 6 22 18 146 58 280 60
Shares redeemed -- (67) (37) (231) (182) (456) (299)
------- -------- ------- ---------- ---------- ---------- ---------
TOTAL CLASS B SHARE
TRANSACTIONS 460 384 164 1,458 802 3,887 2,486
------- -------- ------- ---------- ---------- ---------- ---------
Class C (3):
Shares issued -- -- -- -- -- -- --
Shares issued in lieu of
cash distribution -- -- -- -- -- -- --
Shares redeemed -- -- -- -- -- -- --
------- -------- ------- ---------- ---------- ---------- ---------
TOTAL CLASS C SHARE
TRANSACTIONS -- -- -- -- -- -- --
------- -------- ------- ---------- ---------- ---------- ---------
INCREASE (DECREASE) IN NET ASSETS
FROM SHAREHOLDER TRANSACTIONS 15,793 16,906 9,449 2,060 23,936 10,067 30,595
------- -------- ------- ---------- ---------- ---------- ---------
TOTAL INCREASE (DECREASE) IN
NET ASSETS 16,032 17,944 9,392 22,500 28,167 46,564 37,356
------- -------- ------- ---------- ---------- ---------- ---------
GROWTH EQUITY SMALL CAP INTERNATIONAL
FUND (7) EQUITY FUND (5) EQUITY FUND (5)
------------------------ -------------- ---------------
10/1/96 3/1/96 1/31/97 1/31/97
TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/97
------------ ---------- ---------- ----------
INVESTMENT ACTIVITIES:
<S> <C> <C> <C> <C>
Net investment income $ 113 $ 71 $ (4) $ (4)
Net realized gain (loss) on
securities sold 818 (73) (9) 6
Net unrealized appreciation
(depreciation) of investment
securities 6,453 1,627 829 93
---------- ---------- ---------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 7,384 1,625 816 95
---------- ---------- ---------- -------
DISTRIBUTIONS TO SHAREHOLDERS:
Income distribution Class A(1) (114) (71) -- --
Income distribution Class B(2) -- -- -- --
Income distribution Class C(3) -- -- -- --
Capital gain distribution
Class A(1) -- -- -- --
Capital gain distribution
Class B(2) -- -- -- --
---------- ---------- ---------- --------
TOTAL DISTRIBUTIONS (114) (71) -- --
---------- ---------- ---------- --------
SHARE TRANSACTIONS:
Class A (1):
Shares issued 15,927 29,369 3,707 3,447
Shares issued in lieu of
cash distribution 79 62 -- --
Shares redeemed (9,836) (12,578) (803) (96)
---------- ---------- ---------- --------
TOTAL CLASS A SHARE
TRANSACTIONS 6,170 16,853 2,904 3,349
---------- ---------- ---------- --------
Class B (2):
Shares issued 1,472 145 565 356
Shares issued in lieu of
cash distribution -- -- -- --
Shares redeemed (56) -- (15) (7)
---------- ---------- ---------- --------
TOTAL CLASS B SHARE
TRANSACTIONS 1,416 145 550 349
---------- ---------- ---------- --------
Class C (3):
Shares issued -- -- -- --
Shares issued in lieu of
cash distribution -- -- -- --
Shares redeemed -- -- -- --
---------- ---------- ---------- --------
TOTAL CLASS C SHARE
TRANSACTIONS -- -- -- --
---------- ---------- ---------- --------
INCREASE (DECREASE) IN NET ASSETS
FROM SHAREHOLDER TRANSACTIONS 7,586 16,998 3,454 3,698
---------- ---------- ---------- --------
TOTAL INCREASE (DECREASE) IN
NET ASSETS 14,856 18,552 4,270 3,793
---------- ---------- ---------- --------
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) TRUST CLASS FOR TREASURY SECURITIES MONEY MARKET FUND.
(2) RETAIL CLASS FOR TREASURY SECURITIES MONEY MARKET FUND AND TAX EXEMPT MONEY
MARKET FUND.
(3) CASH SWEEP CLASS FOR TREASURY SECURITIES MONEY MARKET FUND.
(4) THE STRATEGIC INCOME BOND FUND COMMENCED OPERATIONS ON JANUARY 31, 1997.
(5) THE SMALL CAP EQUITY AND INTERNATIONAL EQUITY FUNDS COMMENCED OPERATIONS ON
JANUARY 31, 1997.
(6) THE TAX EXEMPT MONEY MARKET FUND COMMENCED OPERATIONS ON JUNE 7, 1996.
(7) THE GROWTH EQUITY FUND COMMENCED OPERATIONS ON MARCH 1, 1996.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
52 & 53 SEPTEMBER 30, 1997
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000)
<TABLE>
<CAPTION>
INSTITUTIONAL TREASURY SECURITIES TAX EXEMPT GOVERNMENT STRATEGIC INCOME
MONEY MARKET FUND MONEY MARKET FUND MONEY MARKET FUND (6) SECURITIES FUND BOND FUND (4)
--------------------- --------------------- --------------------- --------------------- ----------------
10/1/96 10/1/95 10/1/96 10/1/95 10/1/96 6/7/96 10/1/96 10/1/95 1/31/97
TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/96 TO 9/30/97
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of period $28,004 $ 31,314 $1,048,887 $ 804,017 $ 66,214 $ -- $160,840 $124,648 $ --
------- -------- ---------- ---------- -------- ------- -------- -------- -------
End of period $58,516 $ 28,004 $1,364,088 $1,048,887 $ 76,744 $66,214 $150,084 $160,840 $16,032
------- -------- ---------- ---------- -------- ------- -------- -------- -------
SHARES ISSUED AND
REDEEMED:
Class A (1):
Issued 340,575 102,959 1,432,933 1,168,501 -- -- 3,925 9,606 1,710
Issued in lieu of cash
distribution -- -- 334 184 -- -- 416 451 26
Redeemed (310,063) (106,269) (1,514,130) (1,052,141) -- -- (5,864) (6,148) (201)
------- -------- ---------- ---------- -------- ------- -------- -------- -------
TOTAL CLASS A SHARE
TRANSACTIONS 30,512 (3,310) (80,863) 116,544 -- -- (1,523) 3,909 1,535
------- -------- ---------- ---------- -------- ------- -------- -------- -------
Class B (2):
Issued -- -- 1,126,969 877,916 154,486 106,346 61 31 46
Issued in lieu of cash
distribution -- -- 12,486 9,617 1,280 222 3 2 1
Redeemed -- -- (945,607) (759,215) (145,236) (40,354) (11) (4) --
------- -------- ---------- ---------- -------- ------- -------- -------- -------
TOTAL CLASS B SHARE
TRANSACTIONS -- -- 193,848 128,318 10,530 66,214 53 29 47
------- -------- ---------- ---------- -------- ------- -------- -------- -------
Class C (3):
Issued -- -- 312,106 -- -- -- -- -- --
Issued in lieu of cash
distribution -- -- -- -- -- -- -- -- --
Redeemed -- -- (109,894) -- -- -- -- -- --
------- -------- ---------- ---------- -------- ------- -------- -------- -------
TOTAL CLASS C SHARE
TRANSACTIONS -- -- 202,212 -- -- -- -- -- --
------- -------- ---------- ---------- -------- ------- -------- -------- -------
NET INCREASE (DECREASE) IN
SHARE TRANSACTIONS 30,512 (3,310) 315,198 244,862 10,530 66,214 (1,470) 3,938 1,582
------- -------- ---------- ---------- -------- ------- -------- -------- -------
LOUISIANA TAX-FREE VALUE GROWTH EQUITY SMALL CAP
INCOME FUND BALANCED FUND EQUITY FUND FUND (7) EQUITY FUND (5)
--------------------- --------------------- --------------------- --------------------- ---------------
10/1/96 10/1/95 10/1/96 10/1/95 10/1/96 10/1/95 10/1/96 3/1/96 1/31/97
TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/96 TO 9/30/97 TO 9/30/96 TO 9/30/97
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning of period $21,664 $12,272 $116,380 $ 88,213 $ 97,498 $ 60,142 $ 18,552 $ -- $ --
------- ------- -------- -------- --------- -------- -------- -------- --------
End of period $39,608 $21,664 $138,880 $116,380 $ 144,062 $ 97,498 $ 33,408 $ 18,552 $ 4,270
------- ------- -------- -------- --------- -------- -------- -------- --------
SHARES ISSUED AND
REDEEMED:
Class A (1):
Issued 2,204 1,540 1,283 5,030 2,231 3,370 1,198 2,638 380
Issued in lieu of cash
distribution 55 30 676 420 294 101 6 5 --
Redeemed (593) (627) (1,891) (3,351) (2,070) (1,219) (726) (1,122) (83)
------- ---------- -------- -------- --------- -------- -------- -------- --------
TOTAL CLASS A SHARE
TRANSACTIONS 1,666 943 68 2,099 455 2,252 478 1,521 297
------- ---------- -------- -------- --------- -------- -------- -------- --------
Class B (2):
Issued 43 18 127 83 271 218 106 13 55
Issued in lieu of cash
distribution 2 2 13 5 21 5 -- -- --
Redeemed (7) (4) (19) (16) (32) (24) (4) -- (1)
------- ---------- -------- -------- --------- -------- -------- -------- --------
TOTAL CLASS B SHARE
TRANSACTIONS 38 16 121 72 260 199 102 13 54
------- ---------- -------- -------- --------- -------- -------- -------- --------
Class C (3):
Issued -- -- -- -- -- -- -- -- --
Issued in lieu of cash
distribution -- -- -- -- -- -- -- -- --
Redeemed -- -- -- -- -- -- -- -- --
------- ---------- -------- -------- --------- -------- -------- -------- --------
TOTAL CLASS C SHARE
TRANSACTIONS -- -- -- -- -- -- -- -- --
------- ---------- -------- -------- --------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN
SHARE TRANSACTIONS 1,704 959 189 2,171 715 2,451 580 1,534 351
------- ---------- -------- -------- --------- -------- -------- -------- --------
INTERNATIONAL
EQUITY FUND (5)
----------------
1/31/97
TO 9/30/97
----------
NET ASSETS:
<S> <C>
Beginning of period $ --
------
End of period $3,793
------
SHARES ISSUED AND
REDEEMED:
Class A (1):
Issued 322
Issued in lieu of cash
distribution --
Redeemed (9)
------
TOTAL CLASS A SHARE
TRANSACTIONS 313
------
Class B (2):
Issued 33
Issued in lieu of cash
distribution --
Redeemed (1)
------
TOTAL CLASS B SHARE
TRANSACTIONS 32
------
Class C (3):
Issued --
Issued in lieu of cash
distribution --
Redeemed --
------
TOTAL CLASS C SHARE
TRANSACTIONS --
------
NET INCREASE (DECREASE) IN
SHARE TRANSACTIONS 345
------
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
(1) TRUST CLASS FOR TREASURY SECURITIES MONEY MARKET FUND.
(2) RETAIL CLASS FOR TREASURY SECURITIES MONEY MARKET FUND AND TAX-EXEMPT MONEY
MARKET FUND.
(3) CASH SWEEP CLASS FOR TREASURY SECURITIES MONEY MARKET FUND.
(4) THE STRATEGIC INCOME BOND FUND COMMENCED OPERATIONS ON JANUARY 31, 1997.
(5) THE SMALL CAP EQUITY AND INTERNATIONAL EQUITY FUNDS COMMENCED OPERATIONS ON
JANUARY 31, 1997.
(6) THE TAX EXEMPT MONEY MARKET FUND COMMENCED OPERATIONS ON JUNE 7, 1996.
(7) THE GROWTH EQUITY FUND COMMENCED OPERATIONS ON MARCH 1, 1996.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
54 & 55 SEPTEMBER 30, 1997
<PAGE>
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
- ------------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 $ 1.00 $0.05 -- $(0.05) $1.00 5.29% $ 58,516 0.25%
1996 1.00 0.05 -- (0.05) 1.00 5.33 28,004 0.25
1995(4) 1.00 0.01 -- (0.01) 1.00 5.55* 31,314 0.25*
- ------------------------------------------------------------------------------------------------------------------------------------
TREASURY SECURITIES MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------
TRUST CLASS
1997 $ 1.00 $0.05 -- $(0.05) $1.00 5.04% $556,957 0.50%
1996 1.00 0.05 -- (0.05) 1.00 5.06 637,819 0.50
1995 1.00 0.05 -- (0.05) 1.00 5.33 521,270 0.50
1994 1.00 0.03 -- (0.03) 1.00 3.22 403,778 0.50
RETAIL CLASS
1997 $ 1.00 $0.05 -- $(0.05) $1.00 4.83% $604,919 0.70%
1996 1.00 0.05 -- (0.05) 1.00 4.86 411,068 0.70
1995 1.00 0.05 -- (0.05) 1.00 5.16 282,747 0.68
1994(1) 1.00 0.03 -- (0.03) 1.00 3.15* 86,848 0.59*
SWEEP CLASS
1997(10) $ 1.00 $0.03 -- $(0.03) $1.00 4.46%* $202,212 1.00%*
- ------------------------------------------------------------------------------------------------------------------------------------
TAX EXEMPT MONEY MARKET FUND
- ------------------------------------------------------------------------------------------------------------------------------------
RETAIL CLASS
1997 $ 1.00 $0.03 -- $(0.03) $1.00 3.12% $ 76,744 0.65%
1996(5) 1.00 0.01 -- (0.01) 1.00 2.83* 66,214 0.65*
- ------------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT SECURITIES FUND
- ------------------------------------------------------------------------------------------------------------------------------------
CLASS A
1997 $ 9.71 $0.55 $ 0.23 $(0.55) $9.94 8.22% $149,022 0.70%
1996 9.87 0.55 (0.16) (0.55) 9.71 4.10 160,317 0.70
1995 9.41 0.54 0.46 (0.54) 9.87 10.84 124,404 0.70
1994 10.00 0.43 (0.59) (0.43) 9.41 (1.66) 97,562 0.70
CLASS B
1997 $ 9.76 $0.47 $ 0.24 $(0.48) $9.99 7.40% $ 1,062 1.45%
1996 9.92 0.46 (0.15) (0.47) 9.76 3.23 523 1.45
1995 9.46 0.46 0.47 (0.47) 9.92 10.10 244 1.45
1994(2) 10.04 0.31 (0.58) (0.31) 9.46 (2.84)* 147 1.45*
- ------------------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT
INVESTMENT AVERAGE NET INCOME TO
INCOME TO ASSETS AVERAGE PORTFOLIO
AVERAGE (EXCLUDING NET ASSETS TURNOVER
NET ASSETS WAIVERS) (EXCLUDING WAIVERS) RATE
- ------------------------------------------------------------------------------------
INSTITUTIONAL MONEY MARKET FUND
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
1997 5.19% 0.36% 5.08% --
1996 5.19 0.34 5.10 --
1995(4) 5.56* 0.60* 5.21* --
- ------------------------------------------------------------------------------------
TREASURY SECURITIES MONEY MARKET FUND
- ------------------------------------------------------------------------------------
TRUST CLASS
1997 4.92% 0.50% 4.92%
1996 4.92 0.53 4.89 --
1995 5.23 0.57 5.16 --
1994 3.15 0.60 3.05 --
RETAIL CLASS
1997 4.73% 0.75% 4.68%
1996 4.72 0.78 4.64 --
1995 5.12 0.82 4.98 --
1994(1) 3.27* 0.83* 3.03* --
SWEEP CLASS
1997(10) 4.57%* 1.25%* 4.32%* --
- ------------------------------------------------------------------------------------
TAX EXEMPT MONEY MARKET FUND
- ------------------------------------------------------------------------------------
RETAIL CLASS
1997 3.07% 0.95% 2.77% --
1996(5) 2.92* 1.12* 2.45* --
- ------------------------------------------------------------------------------------
GOVERNMENT SECURITIES FUND
- ------------------------------------------------------------------------------------
CLASS A
1997 5.54% 0.76% 5.48% 11.88%
1996 5.53 0.79 5.44 22.80
1995 5.63 0.84 5.49 18.33
1994 4.43 0.90 4.23 37.80
CLASS B
1997 4.81% 1.51% 4.75% 11.88%
1996 4.81 1.54 4.72 22.80
1995 4.86 1.59 4.72 18.33
1994(2) 3.88* 1.69* 3.64* 37.80
- ------------------------------------------------------------------------------------
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
+ TOTAL RETURN DOES NOT REFLECT SALES LOADS ON CLASS A AND CLASS B 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.
(8) COMMENCED OPERATIONS ON JANUARY 31, 1997.
(9) COMMENCED OPERATIONS ON JANUARY 31, 1997.
(10) COMMENCED OPERATIONS ON FEBRUARY 26, 1997.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
56 & 57 SEPTEMBER 30, 1997
<PAGE>
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)
- ---------------------------------------------------------------------------------------------------------------------------------
STRATEGIC INCOME BOND FUND
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 (8) $10.00 $0.39 $ 0.14 $(0.39) -- $10.14 8.26%* $ 15,562
CLASS B
1997(8) $10.00 $0.33 $ 0.16 $(0.35) -- $10.14 7.57%* $ 470
- ---------------------------------------------------------------------------------------------------------------------------------
LOUISIANA TAX-FREE INCOME FUND
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
1997 $9.79 $0.43 $ 0.32 $(0.43) -- $10.11 7.77% $ 38,471
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
1997 $9.79 $0.34 $ 0.33 $(0.35) -- $10.11 6.99% $ 1,137
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
1997 $11.31 $0.36 $ 2.44 $(0.36) $(0.50) $13.25 26.10% $134,941
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
1997 $11.37 $0.26 $ 2.47 $(0.28) $(0.50) $13.32 25.19% $ 3,939
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
- ---------------------------------------------------------------------------------------------------------------------------------
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**
- ------------------------------------------------------------------------------------------------------
STRATEGIC INCOME BOND FUND
- ------------------------------------------------------------------------------------------------------
CLASS A
<S> <C> <C> <C> <C> <C> <C>
1997 (8) 0.90%* 6.22%* 1.43%* 5.69%* 1.34% n/a
CLASS B
1997(8) 1.65%* 5.49%* 2.13%* 5.01%* 1.34% n/a
- ------------------------------------------------------------------------------------------------------
LOUISIANA TAX-FREE INCOME
- ------------------------------------------------------------------------------------------------------
CLASS A
1997 0.61% 4.35% 0.65% 4.31% 0.77% n/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
1997 1.36% 3.61% 1.40% 3.57% 0.77% n/a
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
1997 0.90% 3.05% 0.96% 2.99% 40.97% .0796
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
1997 1.65% 2.28% 1.71% 2.22% 40.97% .0796
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
- ----------------------------------------------------------------------------------------------------
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
+ TOTAL RETURN DOES NOT REFLECT SALES LOADS ON CLASS A AND CLASS B 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.
(8) COMMENCED OPERATIONS ON JANUARY 31, 1997.
(9) COMMENCED OPERATIONS ON JANUARY 31, 1997.
(10) COMMENCED OPERATIONS ON FEBRUARY 26, 1997.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
58 & 59 SEPTEMBER 30, 1997
<PAGE>
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)
- ---------------------------------------------------------------------------------------------------------------------------------
VALUE EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1997 $12.93 $ 0.19 $5.32 $(0.19) $(0.81) $17.44 45.27% $134,117
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
1997 $12.97 $ 0.09 $5.34 $(0.09) $(0.81) $17.50 44.31% $ 9,944
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
- ---------------------------------------------------------------------------------------------------------------------------------
GROWTH EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
1997 $12.10 $ 0.06 $3.71 $(0.06) -- $15.81 31.25% $ 31,608
1996 (6) 11.00 0.05 1.10 (0.05) -- 12.10 10.46 18,400
CLASS B
1997 $12.07 $(0.03) $3.64 -- -- $15.74 30.41% $ 1,800
1996 (7) 11.14 0.01 0.93 $(0.01) -- 12.07 8.48 152
- ---------------------------------------------------------------------------------------------------------------------------------
SMALL CAP EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
1997 (9) $10.00 $(0.01) $2.22 -- -- $12.21 33.61%* $ 3,616
CLASS B
1997 (9) $10.00 $(0.02) $2.18 -- -- $12.16 32.85%* $ 654
- ---------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A
1997 (9) $10.00 $(0.01) $0.99 -- -- $10.98 14.90%* $ 3,435
CLASS B
1997 (9) $10.00 $(0.03) $0.97 -- -- $10.94 14.30%* $ 358
- ---------------------------------------------------------------------------------------------------------------------------------
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**
- ------------------------------------------------------------------------------------------------------
VALUE EQUITY FUND
- ------------------------------------------------------------------------------------------------------
CLASS A
<S> <C> <C> <C> <C> <C> <C>
1997 1.00% 1.33% 1.00% 1.33% 97.91% $.0798
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
1997 1.75% 0.55% 1.75% 0.55% 97.91% $.0798
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
- ------------------------------------------------------------------------------------------------------
GROWTH EQUITY FUND
- ------------------------------------------------------------------------------------------------------
CLASS A
1997 1.00% 0.46% 1.04% 0.42% 65.12% $.0799
1996 (6) 1.00* 0.73* 1.12* 0.61* 91.09 .0797
CLASS B
1997 1.75% (0.30)% 1.79% (0.34)% 65.12% $.0799
1996 (7) 1.75* (0.02)* 1.87* (0.14)* 91.09 .0797
- ------------------------------------------------------------------------------------------------------
SMALL CAP EQUITY FUND
- ------------------------------------------------------------------------------------------------------
CLASS A
1997 (9) 0.20%* (0.20)%* 1.79%* (1.79)%* 29.56% n/a
CLASS B
1997 (9) 0.95%* (0.95)%* 2.61%* (2.61)%* 29.56% n/a
- ------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
- ------------------------------------------------------------------------------------------------------
CLASS A
1997 (9) 0.27%* (0.27)%* 2.21%* (2.21)%* 4.69% n/a
CLASS B
1997 (9) 1.02%* (1.02)%* 2.86%* (2.86)%* 4.69% n/a
- ------------------------------------------------------------------------------------------------------
<FN>
AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0.
+ TOTAL RETURN DOES NOT REFLECT SALES LOADS ON CLASS A AND CLASS B 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.
(8) COMMENCED OPERATIONS ON JANUARY 31, 1997.
(9) COMMENCED OPERATIONS ON JANUARY 31, 1997.
(10) COMMENCED OPERATIONS ON FEBRUARY 26, 1997.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
60 & 61 SEPTEMBER 30, 1997
<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 eleven series funds: Institutional Money Market Fund, Treasury
Securities Money Market Fund, Tax Exempt Money Market Fund (the "Money Market
Funds"), Government Securities Fund, Strategic Income Bond Fund, Louisiana
Tax-Free Income Fund, Balanced Fund (formerly the "Growth and Income Fund"),
Value Equity Fund, Growth Equity Fund, Small Cap Equity Fund, and International
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, Retail and the Cash Sweep in the
Tax-Exempt Money Market and Class A and Class B in the Non-Dollar Funds.
The Small Cap Equity Fund and the International Equity Fund are currently
"feeder" funds in separate Corporate Master-Feeder(TM) structures. That is, the
Small Cap Equity Fund and International Equity Fund each currently invest in
another open-end management investment company with the same investment
objectives and hold as their only investment securities, shares of a single
"master" fund, in this case, the SEI Institutional Managed Trust Small Cap
Growth Portfolio and the SEI International Trust International Equity
Portfolio, respectively. However, in certain instances the Funds are permitted
to invest in securities other than a single open-end management investment
company.
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 amor-
62 SEPTEMBER 30, 1997
<PAGE>
tized 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.
The investments of the Small Cap Equity and International Equity Funds (the
"Feeder" funds) in the SEI Institutional Managed Trust Small Cap Growth
Portfolio and the SEI International Trust International Equity Portfolio (the
"Master Funds"), respectively, are valued at the net asset value per share of
each Master Fund determined as of the close of the New York Stock Exchange.
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 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 counter-party 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.
SEPTEMBER 30, 1997 63
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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.
DISTRIBUTIONS -- Distributions from net investment income are declared and paid
quarterly for the Balanced Fund, Value Equity Fund, Growth Equity Fund and
Small Cap 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, Strategic Income Bond Fund and Louisiana Tax-Free
Income Fund. Any net realized capital gains are declared and distributed to
shareholders at least annually.
Distributions from net investment income and net realized capital gains are
determined in accordance with U.S. Federal income tax regulations, which may
differ from those amounts determined under generally accepted accounting
principles. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, they are charged or
credited to paid in capital in the period that the differences arises.
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.
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%, Strategic
Income Bond Fund -- .74%, Louisiana Tax-Free Income Fund -- .35%, Balanced
Fund -- .74%, Value Equity Fund -- .74%, Growth Equity Fund -- .74%, Small Cap
Equity Fund -- .40%, and International Equity Fund -- .40%. The Adviser has
voluntarily agreed to waive a portion of its fee so that expenses of each Fund
will not exceed certain annual expense limitations. The Adviser reserves the
64 SEPTEMBER 30, 1997
<PAGE>
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 Investments Management Corporation, a wholly-
owned subsidiary of SEI Investments, 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,
Strategic Income Bond Fund, Louisiana Tax-Free Income Fund, Balanced Fund,
Value Equity Fund, Growth Equity Fund, Small Cap Equity Fund, and International
Equity Fund. The Administrator has voluntarily agreed to waive a portion of its
fee so that expenses of each Fund will not exceed certain annual expense
limitations. The Administrator reserves the right to terminate its waiver at
any time in its sole discretion.
The Trust and SEI Investments Distribution Co. (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 the
Treasury Securities Money Market Fund and Tax Exempt Money Market Fund, and
.75% of the Class B shares of the Non-Dollar Funds and the Cash Sweep Class of
the Treasury Securities Money Market Fund 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 and the Tax Exempt 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.
In addition to the fees paid at the feeder level for the Small Cap Equity and
International Equity Funds, each Feeder Fund's shareholders will bear
indirectly their prorata portion of the advisory, administrative, distribution
and other expenses of the respective Master Funds in which they invest.
The Class A shares of the Non-Dollar Funds are subject to a maximum sales load
of 3.50%.
There is a contingent deferred sales charge on the Class B shares of the
Non-Dollar Funds which varies depending on the number of years from time of
payment for the purchase of shares until the time of redemption of such shares
(the "holding period"). Solely for the purpose of determining the number of
years from the time of any payment for the purchase of shares, all payments
during the month are aggregated and deemed to have been made on the first day
of the month.
SEPTEMBER 30, 1997 65
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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, 1997 were
as follows:
STRATEGIC LOUISIANA
GOVERNMENT INCOME TAX-FREE
SECURITIES BOND INCOME BALANCED
FUND FUND FUND FUND
(000) (000) (000) (000)
---------- ---------- ---------- ----------
PURCHASES:
U.S.
Government $17,068 $5,054 $ -- $ 7,924
Other -- 7,597 15,100 41,013
SALES:
U.S.
Government $24,853 $ 142 $ -- $ 7,614
Other 6,570 -- 205 50,821
INTER-
VALUE GROWTH SMALL CAP NATIONAL
EQUITY EQUITY EQUITY EQUITY
FUND FUND FUND FUND
(000) (000) (000) (000)
---------- ---------- ---------- --------
PURCHASES:
U.S.
Government $ -- $ -- $ -- $ --
Other 118,175 21,006 4,021 3,706
SALES:
U.S.
Government $ -- $ -- $ -- $ --
Other 111,360 15,240 651 82
On September 30, 1997, the total cost of securities and the net realized gains
or losses on securities sold for federal income tax purposes were not
materially different from amounts reported for financial reporting purposes.
The aggregate gross unrealized appreciation and depreciation on securities at
September 30, 1997, for each Non-Dollar Fund are as follows:
66 SEPTEMBER 30, 1997
<PAGE>
STRATEGIC LOUISIANA
GOVERNMENT INCOME TAX-FREE
SECURITIES BOND INCOME BALANCED
FUND FUND FUND FUND
(000) (000) (000) (000)
---------- ---------- ---------- ----------
AGGREGATE GROSS
UNREALIZED
APPRECIATION $ 1,308 $239 $1,046 $21,987
Aggregate Gross
Unrealized
Depreciation (1,179) -- (16) (878)
------- ---- ------ -------
Net Unrealized
Appreciation/
(Depreciation) $ 129 $239 $1,030 $21,109
======= ==== ====== =======
INTER-
VALUE GROWTH SMALL CAP NATIONAL
EQUITY EQUITY EQUITY EQUITY
FUND FUND FUND FUND
(000) (000) (000) (000)
---------- ---------- ---------- --------
AGGREGATE GROSS
UNREALIZED
APPRECIATION $34,218 $8,194 $829 $116
Aggregate Gross
Unrealized
Depreciation (580) (114) -- (23)
------- ------ ---- ----
Net Unrealized
Appreciation/
(Depreciation) $33,638 $8,080 $829 $ 93
======= ====== ==== ====
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, 1997, the
percentages of portfolio investments by each revenue source were as follows:
TAX EXEMPT
MONEY MARKET FUND
-----------------
Revenue Bonds 73%
Anticipation Notes 18%
General Obligations 6%
Tax-Exempt
Commercial Paper 3%
-----------------
Total 100%
=================
The Government Securities, Strategic Income Bond 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, Strategic Income Bond and Louisiana Tax-Free Income Funds as of
September 30, 1997.
SEPTEMBER 30, 1997 67
<PAGE>
NOTES TO FINANCIAL STATEMENTS
STRATEGIC LOUISIANA
GOVERNMENT INCOME TAX-FREE
SECURITIES BOND INCOME
RATING FUND FUND FUND
- ------------ -------------- ---------- ----------
AAA 86.3% 31.0% 79.1%
AA 0.5% 6.8% --
A 1.4% 44.5% 3.6%
BBB -- 11.2% --
Not Rated 11.8% 6.5% 17.3%
---------- ---------- ----------
100% 100% 100%
========== ========== ==========
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, 1997, to the extent provided in the regulations for federal
income tax as follows:
POST
CAPITAL LOSS OCTOBER 31,
CARRYFORWARDS EXPIRING 1996
------------------------------ DEFERRED
FUNDS 2003 2004 2005 LOSSES
- ----- ------------------------------ ------------
Government
Securities
Fund $679,660 $124,634 $ -- $19,540
Louisiana
Tax-Free
Income
Fund 32,125 2,083 19,720 --
Small Cap
Equity Fund -- -- -- 9,414
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 1998 for tax purposes.
8. SUBSEQUENT EVENT
On October 20, 1997, First Commerce Corporation and Banc One Corporation
jointly announced that they had signed a definitive agreement for the merger
of First Commerce Corporation with Banc One Corporation. As of September 30,
1997, the Adviser is a wholly-owned subsidiary of First Commerce Corporation.
Subject to certain conditions being met, it is currently anticipated that the
trans-action will close at the end of February 1998. Thereafter, the Adviser
would be an indirect subsidiary of Banc One.
68 SEPTEMBER 30, 1997
<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, 1997, 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%
Strategic Income
Bond Fund 0% 100% 0% 100% 0%
Louisiana Tax-Free
Income Fund 0% 100% 0% 100% 99%
Balanced Fund 45% 55% 27% 100% 0%
Value Equity Fund 64% 36% 88% 100% 0%
Growth Equity Fund 0% 100% 100% 100% 0%
Small Cap
Equity Fund 0% 0% 0% 0% 0%
Inernational
Equity Fund 0% 0% 0% 0% 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.
Please consult your tax adviser for proper treatment of this information.
</FN>
</TABLE>
SEPTEMBER 30, 1997 69
<PAGE>
NOTES
70 SEPTEMBER 30, 1997
<PAGE>
NOTES
SEPTEMBER 30, 1997 71
<PAGE>
NOTES
72 SEPTEMBER 30, 1997
<PAGE>
[MARQUIS LOGO OMITTED]
High Quality. High Standards. Highly Personal.
Investment Adviser
First National Bank of Commerce in New Orleans
201 St. Charles Avenue
New Orleans, LA 70170
Administrator
SEI Fund Resources
Oaks, PA 19456
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:
NOT FDIC INSUREDBULLETNO BANK GUARANTEEBULLETMAY LOSE VALUE
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 Investments Distribution Co., 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.
(C) 1997 MRQ-F-007-04
