<PAGE>
[PHOTO INCLUDING THE PARKSTONE ADVANTAGE FUND LOGO]
ANNUAL REPORT
DECEMBER 31, 1995
NOT FDIC INSURED
<PAGE>
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MESSAGE FROM YOUR INVESTMENT ADVISER
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
Dear Fellow Shareholders:
Where are the markets going in 1996? At this time of year, economists
prognosticate and market strategists strategize as each tries to provide the
definitive view of what lies ahead. As we go to press, economists are concerned
that a slowing economy may lead to little growth or perhaps even a recession
later in 1996. The market strategists are worried about corporate profits
declining combined with stock valuations that are at high levels. With interest
rates so low, still others predict that rates must go up during the year simply
because inflation OUGHT to increase at some point during the business cycle.
RECESSION UNLIKELY
Our outlook is much more sanguine. We believe a recession is possible but rather
unlikely, given the dynamics of an environment in which economic growth should
continue to build this year. While interest rates may stop going down, a large
increase is unlikely due to well-controlled inflation. Our prediction for the
stock market is the same as J. P. Morgan's many years ago when he was asked what
stocks could be expected to do in the coming year. His answer: "fluctuate."
Of course, forecasting is difficult business and rarely does anyone call the
market's movements dead on. Nevertheless, we believe the fundamentals give us
far more reason to be optimistic than pessimistic.
Although economic growth has dropped off sharply since the third quarter of
1995, it is important to recognize that a number of impediments to growth are
temporary. For example, as 1995 drew to a close, there was a sharp contraction
in defense-related government spending. While part of this may be attributed to
unresolved budget issues and the subsequent government shutdowns, a more
important factor was the unusual increase in spending in the third quarter of
the year--which was timed by the Washington bureaucracy to occur before the new
fiscal year began and which inflated growth numbers for the quarter. Despite
predictions of doom and gloom due to weakness in the recent growth numbers, much
of this talk is not consistent with the real underlying condition of the
economy.
GROWTH HAS SLOWED--NOT STOPPED
We believe, as surely as tulips rise from the ground in the spring, that the
economy will strengthen in the coming months. One of several factors supporting
our view is the continuing decline in interest rates, which makes another
refinancing boomlet likely in the housing sector. Also in recent months,
construction permits have exceeded the level of housing starts, which
historically leads to an increase. Consequently, housing and related
expenditures that follow that market, such as consumer durables purchases,
should help foster growth in the months ahead.
In addition, due to the attractiveness of goods priced in U.S. dollars vis-a-vis
other currencies, we also expect to see exports grow by 5.0%-6.0%, less than the
7.5%-8.0% pace of the last several years, but significant nonetheless. Even more
importantly, economic growth in both Japan and Latin America is expected to be
much stronger in the coming year--markets where the U.S. can expect to see
export growth.
In our last letter, we noted that capacity utilization in manufacturing was
declining and a slowdown in business investment growth would follow. Indeed,
after two to three years of low double-digit growth, business investment is
likely to slow to only 3% or so during 1996, making a positive contribution to
the economy but reducing its overall stimulus. Nevertheless, here too, there is
a silver lining: With lower demand, we expect capacity utilization to decline to
about 80% by mid-1996. In the past, such a level of manufacturing activity has
been indicative of an economy with low underlying inflation and, hence, a bias
on the part of the Federal Reserve toward stable to lower interest rates.
FOR THE GOOD OF THE PARTIES
Nevertheless, consumer psychology is very fragile, and one factor that could
dampen enthusiasm and economic activity would be the lack of a budget agreement
by the politicians in Washington. Given the intransigence of the two sides,
reaching an accord will be very difficult. The assumption we must now make is
that a satisfactory compromise will be reached simply because it is good for
both political parties. Without a compromise, the odds of economic recession
increase--which is hardly the environment to be desired in an election year when
voters are openly voicing their dissatisfaction with both parties.
NO CRYSTAL BALL IS PERFECTLY CLEAR
Accurately predicting what the financial markets are likely to do even in the
best of circumstances is extremely difficult. Nevertheless, it seems that while
the growth of the economy is slowing, it is still positive and should continue
to be over the next year. In fact, we wouldn't be surprised to see the economy
strengthen as the year progresses. Nevertheless, corporate profits could very
likely be flat over the coming months, and corporate profitability is one of the
key factors in determining stock prices. The message to the investor is
clear--stock selection will be critical to success in 1996.
Historically, when a substantial market gain of 20% or more has been realized in
the third year of a President's term, the market rose during the following
election year, with gains averaging about 11%. Although past performance is not
necessarily an indication of how the market will perform in the future, we
believe we could see much the same in 1996. But, as Yogi Berra once said, "It
ain't over till its over."
Sincerely,
Richard A. Wolf
Richard A. Wolf, CFA
PRESIDENT AND CHIEF INVESTMENT OFFICER
FIRST OF AMERICA INVESTMENT CORPORATION
1
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PORTFOLIO PERFORMANCE DISCUSSION
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THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
PRIME OBLIGATIONS FUND
Money market investors faced difficult decisions in 1995. The Federal Reserve
cut short-term interest rates in June and December, and at year end market
prices anticipated further cuts.
Given the circumstances, we approached the markets cautiously and lengthened our
maturities throughout the year.
As of December 31, 1995, the average maturity of the Fund's holdings was 56
days. Approximately 9% of the Fund's assets were invested in overnight
securities.
BOND FUND
The year ended December 31, 1995, was a good one for bond investors. In reaction
to the slowing economy and the Federal Reserve's actions to reduce short-term
rates, the markets rallied. Over the year, interest rates fell across the yield
curve. And, after one of the toughest years on record in 1994, all sectors of
the marketplace posted positive results for 1995.
During the year, corporate bonds did particularly well as balance sheets
strengthened and creditworthiness improved dramatically across all industries.
Only mortgage-backed securities suffered as lower interest rates increased the
possibility of a new round of mortgage prepayments. As a result, this sector
underperformed slightly.
The longer the maturity of the bonds in a fund's portfolio, the greater the
impact the decline in interest rates had on its share price. As a result, with
an average maturity of 10.64 years at year's end, the Bond Fund did particularly
well in 1995. The portfolio is largely invested in corporate Securities, which
were among the market's best performers during the year. In addition, the Fund
was underweighted in mortgage-backed securities and consequently, did not suffer
noticeably as pre-payment jitters rattled the markets. As a result, for the year
ended December 31, 1995, the Fund surpassed industry averages and posted a total
return of 16.98%.
2
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PORTFOLIO PERFORMANCE DISCUSSION, CONTINUED
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THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
EQUITY FUND
After leading the market's march upward for more than a year, technology stocks
fell out of favor as 1995 drew to a close. With a minefield of fourth-quarter
earnings releases to be crossed, the market was nervous about the ability of
technology companies to sustain the exponential earnings growth they had shown
over the past year. In December, investors fled to high-quality,
large-capitalization stocks, and technology stocks began to fall. Semi-conductor
stocks took the brunt of the sell-off. The value of our holdings in this
industry and in technology stocks such as LSI Logic, Motorola and Silicon
Graphics, fell as the market treated even minor earnings disappointments very
harshly. Accordingly, the Fund did give back some of its performance in
December, but still returned 29.05% for the year.
On the other hand, several of our holdings performed very well during the same
period. The value of our holdings in PeopleSoft, Idexx Labs, Fore Systems and
HealthSouth Rehab posted gains despite the market's shift away from smaller-cap,
aggressive growth companies. Even more impressively, Hospitality Franchise
System posted a gain of more than 60%.
TECH STOCKS--BENT NOT BROKEN
While a cloud now hovers over technology stocks, it is important to keep in mind
that the fundamentals of many of these companies have not changed. While the
days of explosive growth may be behind them as the capital spending boom ends,
demand for their products is still strong--and very unlikely to dry up and blow
away anytime in the near future. Consequently, we are optimistic about the
long-term prospects for these companies. In the months ahead, we would look to
capitalize on buying opportunities that further price declines may create.
While no year in the market is average, stocks have gained--on
average--approximately 10% a year over the last several decades. Looking ahead,
we see no fundamental reason why we can't have a "normal" 10% year in the stock
market in 1996. As always, stock selection will be absolutely critical to
earning a positive return.
As of December 31, 1995, the Fund's top five holdings were: First Data
Corporation (4.23%), Hospitality Franchise Systems, Inc. (3.64%), Oracle
Corporation (3.26%), The Gillette Company (2.81%) and CUC International, Inc.
(2.67%).
3
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PORTFOLIO PERFORMANCE DISCUSSION, CONTINUED
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THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
SMALL CAPITALIZATION FUND
After a year of watching technology stocks soar upward, investors decided the
industry was going out of business in late December. Technology stocks
tumbled--and soon, companies across the board felt the impact as investors,
seeking security, fled to blue chips. Nevertheless, as the dust settled, it was
clear that the small-cap companies, particularly small-cap technology companies
had taken the hardest fall as prices declined some 30% to 60% in November and
December.
We are pleased to report that the Fund returned 35.66% for the year ended
December 31, 1995. By comparison, the Russell 2000 Index was up 21.46% for the
year ended December 31. This outperformance of the industry benchmark was due in
large part to our financial and healthcare holdings, and contributions by
technology holdings, even with the sell-off late in the year.
TECH STOCKS BACK ON-LINE
Regardless of investors' perceptions, the fundamentals of the technology
industry have not changed in the last 60 days. We believe that many of these
companies are very strong, and demand for their products should grow
dramatically in the coming years. Technology companies are simply out of favor,
not out of business. Healthcare was a very positive contributor virtually all
year, with companies such as Orthodontic Centers of America (+94.3%) and
Omnicare, Inc. (+64.8%) contributing greatly. In the insurance and financial
sectors, Amerin Corporation was up 42.3%, and Aames Financial Corporation rose
31.2% respectively. In less identifiable sectors, nice performances were turned
in by Corrections Corporation of America (+78.2%) and Studio Plus Hotels, Inc.
with a 37.5% increase.
As of December 31, 1995, the Fund's top five holdings were Omnicare, Inc.
(3.75%), Credit Acceptance Corporation (3.55%), Concord EFS, Inc. (3.08%), Micro
Warehouse, Inc. (2.94%) and McAfee Associates, Inc. (2.74%).
4
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PORTFOLIO PERFORMANCE DISCUSSION, CONTINUED
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THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
INTERNATIONAL DISCOVERY FUND
After several years in the doldrums, the Japanese stock market rebounded in the
second half of 1995. European markets also achieved good returns during the
period, while markets in emerging economies generally experienced modest
declines. With investments in all three regions, the Fund had positive returns
during the year ended December 31, 1995, but underperformed its benchmark, the
EAFE Index.
It is important to note, however, that the EAFE Index is heavily weighted in
Japanese securities and has no exposure to Latin American markets and many
smaller Asian markets. Consequently, the Index is not a true reflection of the
markets in which widely diversified international funds like ours invest. We
believe that diversification is the key to solid performance--and to that end,
the Fund remains highly diversified with 79 holdings in 25 different markets
around the world.
OVERSEAS OPPORTUNITIES PICK UP
Given the fact that the U.S. economy is slowing and corporate profitability is
expected to be relatively flat in the coming months, we see real opportunity for
investors in overseas markets. The Japanese economy is expected to continue to
pick up steam and, with this in mind, we have increased our holdings there.
We believe that Continental Europe is also very attractive. While the economies
there are sluggish, stocks are still attractively priced versus their U.S.
counterparts. Interest rates are coming down. Even more importantly, companies
in the region are only now beginning the restructuring process that U.S.
companies began over a decade ago. As a result, we expect to see the
profitability and, in turn, the stock prices of many European corporations
increase in the coming year.
As of December 31, 1995, the Fund's top five holdings were Keyence Corporation
(2.54%), Roche Holding AG (2.38%), BIC (2.26%), Hermes International, S.A.
(2.26%) and Astra A B (2.20%).
5
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================================================================================
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRIME SMALL INTERNATIONAL
OBLIGATIONS BOND EQUITY CAPITALIZATION DISCOVERY
FUND FUND FUND FUND FUND
--------- --------- --------- --------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (identified cost
$2,935,550; $6,436,820; $11,461,178;
$9,073,625; and $8,796,281, respectively) ... $2,935,550 $6,648,442 $15,036,494 $13,301,839 $ 9,999,322
Cash .......................................... 839 806 230 290 1,636,083
Foreign currency (cost $3,135) ................ -- -- -- -- 3,154
Interest and dividends receivable ............. 1,242 95,753 12,240 3,416 9,027
Receivable for securities sold ................ -- -- -- 50,736 3,600
Foreign taxes recoverable ..................... -- -- -- -- 11,421
Receivable for capital shares issued .......... 5,402 14,278 38,456 36,542 3,033
Deferred organization costs ................... 6,000 6,000 6,000 6,000 6,000
---------- ---------- ---------- ---------- ----------
TOTAL ASSETS .................................. 2,949,033 6,765,279 15,093,420 13,398,823 11,671,640
---------- ---------- ---------- ---------- ----------
LIABILITIES:
Payable to brokers for investments purchased -- -- 97,512 112,954 --
Payable for capital shares redeemed ........... 771 4,887 16,075 10,675 7,294
Accrued expenses and other payables:
Investment advisory fees .................. 32 137 407 357 --
Administration fees ....................... 16 37 81 71 --
Accounting and custodian fees ............. 39 40 44 43 15,423
Professional fees ......................... 2,854 1,607 1,849 1,840 1,087
Other ..................................... 407 330 322 322 2,636
---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES ............................. 4,119 7,038 116,290 126,262 26,440
---------- ---------- ---------- ---------- ----------
NET ASSETS:
Capital ....................................... 2,944,914 6,437,721 12,055,778 9,213,029 11,098,814
Undistributed net investment income ........... -- 279,533 -- -- 51,718
Accumulated net realized loss on investments
and foreign currency transactions ......... -- (170,635) (653,964) (168,682) (708,465)
Net unrealized appreciation in value of
investments and translation of assets and
liabilities in foreign currencies ......... -- 211,622 3,575,316 4,228,214 1,203,133
---------- ---------- ---------- ---------- ----------
NET ASSETS .................................... $2,944,914 $6,758,241 $14,977,130 $13,272,561 $11,645,200
========== ========== ========== ========== ==========
Outstanding shares (a) ........................ 2,944,914 643,818 1,204,184 844,999 1,099,414
========== ========== ========== ========== ==========
Net asset value--offering and redemption
price per share ........................... $1.00 $10.50 $12.44 $15.71 $10.59
========== ========== ========== ========== ==========
</TABLE>
- ---------
(a) Number of shares authorized for each fund is unlimited.
See notes to financial statements.
6
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STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRIME SMALL INTERNATIONAL
OBLIGATIONS BOND EQUITY CAPITALIZATION DISCOVERY
FUND FUND FUND FUND FUND
--------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income ............................... $130,512 $364,471 $ 772 $ 808 $ 45,109
Dividend income ............................... 13,272 16,165 91,639 35,111 185,321
--------- --------- ---------- ---------- ---------
143,784 380,636 92,411 35,919 230,430
Less: Foreign tax expense ..................... -- -- -- -- (24,320)
--------- --------- ---------- ---------- ---------
TOTAL INVESTMENT INCOME ....................... 143,784 380,636 92,411 35,919 206,110
--------- --------- ---------- ---------- ---------
EXPENSES:
Investment advisory fees ...................... 9,911 40,840 119,192 99,935 129,924
Administration fees ........................... 4,955 11,038 23,838 19,987 20,788
Custodian and accounting fees.................. 15,333 15,744 16,608 16,348 61,500
Legal and audit fees .......................... 5,726 9,374 19,221 15,919 22,591
Trustees' fees ................................ 1,119 2,392 5,134 4,261 4,579
Printing costs ................................ 692 1,469 3,030 2,501 2,850
Amortization of deferred organization costs ... 2,000 2,000 2,000 2,000 2,000
Other ......................................... 995 4,006 4,034 3,623 2,767
--------- --------- --------- ---------- ---------
TOTAL EXPENSES ................................ 40,731 86,863 193,057 164,574 246,999
--------- --------- ---------- ---------- ---------
Net Investment Income (Loss) .................. 103,053 293,773 (100,646) (128,655) (40,889)
--------- --------- ---------- ---------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments ................................. -- 146,496 (49,250) 383,283 (187,685)
Foreign currency transactions ............... -- -- -- -- 151,049
--------- --------- ---------- ---------- ----------
Net realized gain (loss) .............. -- 146,496 (49,250) 383,283 (36,636)
Net change in unrealized appreciation
(depreciation) on:
Investments ................................. -- 405,198 3,117,505 2,767,881 1,060,671
Translation of assets and liabilities in
foreign currencies .................... -- -- -- -- (9,660)
--------- --------- ---------- ---------- ----------
Net change in unrealized appreciation . -- 405,198 3,117,505 2,767,881 1,051,011
--------- --------- ---------- ---------- ----------
Net gain ...................................... -- 551,694 3,068,255 3,151,164 1,014,375
--------- --------- ---------- ---------- ----------
Change in net assets resulting from operations $103,053 $845,467 $2,967,609 $3,022,509 $ 973,486
========= ========= ========== ========== ==========
</TABLE>
See notes to financial statements.
7
<PAGE>
================================================================================
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRIME SMALL INTERNATIONAL
OBLIGATIONS BOND EQUITY CAPITALIZATION DISCOVERY
FUND FUND FUND FUND FUND
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) .............. $ 103,053 $ 293,773 $ (100,646) $ (128,655) $ (40,889)
Net realized gain (loss) .................. -- 146,496 (49,250) 383,283 (36,636)
Net change in unrealized appreciation...... -- 405,198 3,117,505 2,767,881 1,051,011
---------- ---------- ---------- ---------- ----------
Change in net assets resulting from
operations .................................. 103,053 845,467 2,967,609 3,022,509 973,486
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ..................... (103,053) (239,024) -- -- --
---------- ---------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued ............... 887,490 1,877,770 4,255,436 3,811,173 2,078,118
Dividends reinvested ...................... 103,053 239,024 -- -- --
Shares redeemed ........................... (277,620) (616,153) (1,340,930) (1,037,565) (943,423)
---------- ---------- ---------- ---------- ----------
Change in net assets from capital share
transactions ................................ 712,923 1,500,641 2,914,506 2,773,608 1,134,695
---------- ---------- ---------- ---------- ----------
Total change in net assets .................... 712,923 2,107,084 5,882,115 5,796,117 2,108,181
NET ASSETS:
Beginning of year.......................... 2,231,991 4,651,157 9,095,015 7,476,444 9,537,019
---------- ---------- ---------- ---------- ----------
End of year................................ $2,944,914 $6,758,241 $14,977,130 $13,272,561 $11,645,200
========== ========== ========== ========== ==========
Undistributed net investment
income at end of year ................... $ -- $ 279,533 $ -- $ -- $ 51,718
========== ========== ========== ========== ==========
</TABLE>
See notes to financial statements.
8
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================================================================================
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRIME SMALL INTERNATIONAL
OBLIGATIONS BOND EQUITY CAPITALIZATION DISCOVERY
FUND FUND FUND FUND FUND
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) .............. $ 49,016 $ 227,157 $ (65,824) $ (85,512) $ (97,257)
Net realized loss ......................... -- (312,147) (544,280) (533,847) (482,715)
Net change in unrealized appreciation
(depreciation)........................... -- (154,176) 327,366 1,201,873 (126,016)
---------- ---------- ---------- ---------- ----------
Change in net assets resulting from
operations .................................. 49,016 (239,166) (282,738) 582,514 (705,988)
---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ..................... (49,016) (36,257) -- -- --
---------- ---------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued ............... 857,608 2,875,885 6,540,387 4,452,064 4,561,211
Dividends reinvested ...................... 49,016 36,257 -- -- --
Shares redeemed ........................... (702,884) (1,201,795) (1,055,980) (622,899) (652,727)
---------- ---------- ---------- ---------- ----------
Change in net assets from capital share
transactions ................................ 203,740 1,710,347 5,484,407 3,829,165 3,908,484
---------- ---------- ---------- ---------- ----------
Total change in net assets .................... 203,740 1,434,924 5,201,669 4,411,679 3,202,496
NET ASSETS:
Beginning of year.......................... 2,028,251 3,216,233 3,893,346 3,064,765 6,334,523
---------- ---------- ---------- ---------- ----------
End of year................................ $2,231,991 $4,651,157 $9,095,015 $7,476,444 $9,537,019
========== ========== ========== ========== ==========
Undistributed net investment
income at end of year ................... $ -- $ 224,784 $ -- $ -- $ --
========== ========== ========== ========== ==========
</TABLE>
See notes to financial statements.
9
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SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
PRIME OBLIGATIONS FUND
PRINCIPAL SECURITY
AMOUNT DESCRIPTION VALUE
- -------- ---------------------------------- ----------
COMMERCIAL PAPER (40.0%):
Automobiles (3.4%)
$100,000 Alamo Funding L.P., 5.77%, 2/02/96 $ 99,455
----------
Banking & Credit (16.4%):
100,000 American Express Corporation,
5.67%, 2/02/96.................... 99,464
100,000 Beneficial Corporation, 5.71%,
1/12/96........................... 99,794
84,000 Ford Motor Credit Corporation,
5.64%, 2/26/96.................... 83,237
100,000 Teco Finance Corporation, 5.65%,
2/16/96........................... 99,247
100,000 Transamerica Finance Corporation,
5.76%, 1/10/96.................... 99,824
----------
481,566
----------
Business Services (6.7%):
100,000 Associates Corporation, 5.68%,
2/02/96........................... 99,464
100,000 Mitsubishi International Corporation,
5.63%, 3/08/96.................... 98,921
----------
198,385
----------
Communications (3.4%)
100,000 Pearson, Inc., 5.75%, 1/25/96..... 99,585
----------
Computers (3.4%)
100,000 IBM Credit Corporation,
5.82%, 1/26/96.................... 99,563
----------
Consumer Services (6.7%)
100,000 Merrill Lynch & Company, Inc.,
5.8%, 1/02/96..................... 99,952
100,000 Svenska Holdings, Inc.,
5.65%, 3/29/96.................... 98,587
----------
198,539
----------
TOTAL COMMERCIAL PAPER ...... 1,177,093
----------
PRINCIPAL
AMOUNT
OR SECURITY
SHARES DESCRIPTION VALUE
- -------- ---------------------------------- ----------
GOVERNMENT AGENCIES (4.9%):
$95,000 Federal Farm Credit Bank,
5.65%, 1/04/96.................... $ 94,925
$50,000 Federal National Mortgage
Association, 5.65%, 1/26/96....... 49,788
----------
TOTAL GOVERNMENT AGENCIES ...... 144,713
----------
MONEY MARKET FUNDS (9.3%):
133,359 Lehman Prime Fund................. 133,359
141,725 Provident Treasury Fund........... 141,725
----------
TOTAL MONEY MARKET FUNDS ....... 275,084
----------
U.S. TREASURY BILLS (45.5%):
$540,000 5.46%, 2/15/96.................... 536,151
50,000 5.21%, 2/15/96.................... 49,660
35,000 5.38%, 4/04/96.................... 34,498
45,000 5.3%, 4/04/96..................... 44,364
615,000 5.295%, 4/11/96................... 605,683
70,000 5.04%, 6/20/96.................... 68,304
----------
TOTAL U.S. TREASURY BILLS ...... 1,338,660
----------
TOTAL INVESTMENTS (99.7%)
(COST-$2,935,550)(A) ......... $2,935,550
==========
- ---------
(a) Cost for federal income tax and financial reporting purposes is the same.
The computation of percentages shown is based on the ratio of the market value
of each category of security type to total net assets.
See notes to financial statements.
10
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SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
BOND FUND
PRINCIPAL SECURITY
AMOUNT DESCRIPTION VALUE
- -------- ---------------------------------- ----------
CORPORATE BONDS (31.7%):
Electronics (2.0%)
$125,000 General Electric, 7.62%, 5/08/00.. $ 132,969
----------
Finance (23.4%)
100,000 American Express Company
(Eurodollar), 11.625%, 12/12/00... 112,375
150,000 Associates Corporation,
8.80%, 8/01/98.................... 161,438
130,000 Banque Paribas, 8.35%, 06/15/07... 146,738
125,000 Bell Atlantic Financial MTN,
5.30%, 9/01/98.................... 123,750
125,000 Ford Motor Credit Corporation,
5.625%, 1/15/99................... 124,531
125,000 General Motors Acceptance
Corporation, 5.50%, 10/15/02...... 143,594
Greentree Financial Corporation,
100,000 6.90%, 4/15/19 (b)................ 100,754
125,000 5.90%, 1/15/21 (b)................ 124,833
150,000 Household Finance Corporation,
6.375%, 6/30/00................... 152,250
150,000 J.P. Morgan & Company,
6.25%, 12/15/05................... 150,938
125,000 Norwest Financial, Inc., 6.25%,
2/15/97........................... 126,094
110,000 Travelers Group, Inc., 6.875%,
6/01/25........................... 114,538
----------
1,581,833
----------
Manufacturing (2.3%):
150,000 Reed Elsevier Capital, 6.625%,
5/15/00........................... 154,688
----------
Service Industry (2.1%):
125,000 Xerox Corporation, 9.75%, 3/15/00. 142,500
----------
Sanitary Services (1.9%):
125,000 WMX Technologies, 8.125%, 2/01/98. 130,938
----------
TOTAL CORPORATE BONDS .......... 2,142,928
----------
PRINCIPAL
AMOUNT
OR SECURITY
SHARES DESCRIPTION VALUE
- -------- ---------------------------------- ----------
MONEY MARKET FUNDS (8.1%):
280,387 Lehman Prime Fund................. $ 280,387
264,000 Provident Treasury Fund........... 264,000
----------
TOTAL MONEY MARKET FUNDS ....... 544,387
----------
GOVERNMENT AGENCIES (24.1%):
Canadian Government Agencies (3.0%):
$175,000 Manitoba (Prov.), 9.00%, 12/15/00. 199,938
----------
Federal National Mortgage Association (13.5%):
$100,000 8.90%, 6/12/00.................... 112,863
465,336 6.00%, 6/01/09.................... 461,348
100,000 6.50%, 5/25/20.................... 100,030
245,168 6.50%, 12/01/23................... 242,563
----------
916,804
----------
Government National Mortgage Association (3.5%):
$97,226 6.00%, 7/20/25.................... 98,502
131,703 8.00%, 3/15/25.................... 137,215
----------
235,717
----------
Miscellaneous Government Agencies (4.1%):
$125,000 Private Export Funding, 8.35%,
1/31/01........................... 139,531
125,000 Tennessee Valley Authority, 8.375%,
10/01/99.......................... 136,406
----------
275,937
----------
TOTAL GOVERNMENT AGENCIES ...... 1,628,396
----------
U.S. TREASURY NOTES (34.5%):
$100,000 8.875%, 2/15/99................... 110,205
530,000 6.375%, 8/15/02................... 556,261
1,240,000 5.75%, 8/15/03.................... 1,255,897
350,000 7.5%, 11/15/16.................... 410,368
----------
TOTAL U.S. TREASURY NOTES ...... 2,332,731
----------
TOTAL INVESTMENTS (98.4%)
(COST-$6,436,820)(A)........ $6,648,442
==========
- ---------
(a) Cost for federal income tax and financial reporting purposes is the same.
(b) Real Estate Mortgage Investment Conduit
MTN (Medium Term Note)
The computation of percentages shown is based on the ratio of the market value
of each category of security type to total net assets.
See notes to financial statements.
11
<PAGE>
================================================================================
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
EQUITY FUND
SECURITY
SHARES DESCRIPTION VALUE
- -------- ---------------------------------- ----------
COMMON STOCK (93.5%):
Amusement & Recreational Services (1.1%):
6,350 Carnival Corporation - Cl. A .....$ 154,781
----------
Apparel (0.7%):
2,600 Nine West Group, Inc. (b) ........ 97,500
----------
Banking (4.2%):
5,000 First USA, Inc. .................. 221,875
9,900 Greentree Financial Corporation .. 261,113
4,000 MBNA Corporation ................. 147,500
----------
630,488
----------
Broadcasting (5.6%):
7,750 British Sky Broadcasting (ADR)(b) 291,594
2,450 Clear Channel Communications,
Inc.(b)........................... 108,106
3,600 Infinity Broadcasting Corporation -
Cl. A (b) ........................ 134,100
6,527 Viacom, Inc. - Cl. B (b) ......... 309,217
----------
843,017
----------
Business Services (0.6%):
1,800 Alterra Corporation (b) .......... 89,550
----------
Casinos (1.0%):
4,450 Mirage Resorts, Inc. (b) ......... 153,525
----------
Communications (1.7%):
4,000 Airtouch Communications, Inc. (b) 113,000
6,900 Tele-Communications, Inc. - Cl. A (b) 137,138
----------
250,138
----------
Communication Equipment (0.8%):
3,100 Tellabs, Inc. (b) ................ 114,700
----------
Computer Networking (3.8%):
4,700 Cisco Systems, Inc. (b) .......... 350,738
4,800 3Com Corporation (b) ............. 223,800
----------
574,538
----------
Computer Services (6.6%):
7,250 Ceridian Corporation (b) ......... 299,063
2,900 Computer Sciences Corporation (b) 203,725
11,575 Oracle Corporation (b) ........... 490,491
----------
993,279
----------
Computer Software (9.6%):
2,650 Baan Company, N.V. (b) ........... 119,913
11,750 CUC International, Inc. (b) ...... 400,969
7,100 GT Interactive Software Corporation(b) 99,400
4,500 Informix Corporation (b) ......... 135,000
2,100 Microsoft Corporation (b) ........ 184,275
4,300 Parametric Technology Corporation (b) 285,950
4,900 Peoplesoft, Inc. (b) ............. 210,700
----------
1,436,207
----------
Construction Products (0.4%):
1,400 Applied Materials, Inc. (b) ...... 55,125
----------
Consumer Electronics (0.4%):
2,350 Ultratech Stepper Inc. (b) ....... 60,513
----------
Consumer Goods & Services (3.3%):
5,400 Duracell International, Inc. ..... 279,450
4,450 Paychex, Inc. .................... 221,944
----------
501,394
----------
Drugs (3.4%):
5,800 Merck & Company, Inc. ............ 381,350
2,700 Watson Pharmaceutical, Inc. (b) .. 132,300
----------
513,650
----------
Electric Companies & Systems (1.6%):
4,150 Fore Systems, Inc. (b) ........... 246,925
----------
SECURITY
SHARES DESCRIPTION VALUE
- -------- ---------------------------------- ----------
COMMON STOCK, CONTINUED
Electrical Machinery & Electronic Components (7.7%):
4,900 Idexx Laboratories, Inc. (b) .....$ 230,300
8,700 LSI Logic Corporation (b) ........ 284,925
7,050 Linear Technology Corporation .... 276,713
6,800 Molex, Inc. - Cl. A .............. 208,250
2,500 Motorola, Inc. ................... 142,500
----------
1,142,688
----------
Finance (4.0%):
2,150 Federal National Mortgage
Association ...................... 266,869
3,200 PMI Group, Inc. .................. 144,800
3,850 Sunamerica, Inc. ................. 182,875
----------
594,544
----------
Hotel Management (3.7%):
6,700 Hospitality Franchise Systems,
Inc. (b).......................... 547,725
----------
Industrial & Machinery (0.3%):
1,700 KLA Instruments Corporation (b) .. 44,306
----------
Insurance (1.7%):
2,100 American International Group ..... 194,250
2,500 United Companies Financial
Corporation ...................... 65,938
----------
260,188
----------
Manufacturing (0.9%):
5,050 Silicon Graphics, Inc. (b) ....... 138,875
----------
Medical & Health Care (4.6%):
10,800 HEALTHSOUTH Rehabilitation
Corporation (b) .................. 314,550
8,500 Health Management Associates, Inc.(b) 222,063
4,500 Manor Care, Inc. ................. 157,500
----------
694,113
----------
Office, Computing and Electronic Machinery (0.8%):
3,100 Danka Business Systems (ADR) ..... 114,700
----------
Office Supplies (2.3%):
7,600 Alco Standard Corporation ........ 346,750
----------
Personal Services (6.1%):
9,502 First Data Corporation ........... 635,446
6,100 Service Corporation International 268,400
----------
903,846
----------
Photographic Equipment & Supplies (1.8%):
2,000 Xerox Corporation ................ 274,000
----------
Restaurants & Food Service (1.1%):
4,400 Lone Star Steakhouse & Saloon (b) 168,850
----------
Retail Trade (8.8%):
4,350 Autozone, Inc. (b) ............... 125,606
3,900 Barnes & Noble, Inc. (b) ......... 113,100
6,200 Home Depot, Inc. ................. 296,825
7,100 Office Depot, Inc. (b) ........... 140,225
6,100 Petsmart, Inc. (b) ............... 189,100
5,100 Sunglass Hut International, Inc. (b) 121,125
3,950 Viking Office Products, Inc. (b) . 183,675
6,850 Wal-Mart Stores, Inc. ............ 153,269
----------
1,322,925
----------
Soap, Cleaners & Toilet Goods (2.8%):
8,100 Gillette Company (The) ........... 422,213
----------
Textiles (0.9%):
3,100 Cintas Corporation ............... 137,950
----------
Wholesale Trade (1.2%):
3,300 Cardinal Health, Inc. ............ 180,675
----------
TOTAL COMMON STOCK ............. 14,009,678
----------
MONEY MARKET FUNDS (6.9%):
594,816 Lehman Prime Fund ................ 594,816
432,000 Provident Treasury Fund .......... 432,000
----------
TOTAL MONEY MARKET FUNDS ....... 1,026,816
----------
TOTAL INVESTMENTS (100.4%):
(COST $11,461,178)(A)...........$15,036,494
==========
- ---------
(a) Cost for federal income tax and financial reporting purposes is the same.
(b) Represents non-income producing security.
ADR (American Depository Receipt)
The computation of percentages shown is based on the ratio of the market value
of each category of security type to total net assets.
See notes to financial statements.
12
<PAGE>
================================================================================
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
SMALL CAPITALIZATION FUND
SECURITY
SHARES DESCRIPTION VALUE
- -------- ---------------------------------- ----------
COMMON STOCK (93.7%):
Automobile Leasing & Services (1.5%):
8,350 Oxford Resources Corporation -
Cl. A (b) ........................$ 187,875
----------
Biotechnology (0.4%):
2,500 Serologicals Corporation (b) ..... 41,250
----------
Business Services (1.1%):
5,200 U.S. Delivery Systems, Inc. (b) .. 150,800
----------
Communications (3.5%):
16,300 LCI International, Inc. (b) ...... 334,150
5,000 Transaction Network Services (b) . 125,000
----------
459,150
----------
Computer Networking (1.1%):
2,400 ALANTEC Corporation (b) .......... 139,800
----------
Computer Services (7.7%):
8,700 Acxiom Corporation (b) ........... 238,163
9,550 Alternative Resources Corporation (b) 288,888
3,300 CDW Computer Centers, Inc. (b) ... 133,650
4,350 Cambridge Tech Partners, Inc. (b) 250,125
2,400 Sync Research, Inc. (b) .......... 108,600
----------
1,019,426
----------
Computer Software (21.9%):
5,200 Dendrite International, Inc. (b) . 93,600
5,000 Discreet Logic, Inc. (b) ......... 125,000
3,100 Eagle Point Software Corporation (b) 66,650
4,100 Electronics for Imaging (b) ...... 179,375
4,300 FTP Software, Inc. (b) ........... 124,700
3,000 Fair Issac & Company, Inc. ....... 77,625
500 HCIA, Inc. (b) ................... 23,375
6,000 Inso Corporation (b) ............. 255,000
6,300 Macromedia, Inc. (b) ............. 329,175
8,300 McAfee Associates, Inc. (b) ...... 364,163
9,050 Micro Warehouse, Inc. (b) ........ 391,413
6,700 Minnesota Educational Computing
Corporation (b) .................. 167,500
13,950 Netmanage, Inc. (b) .............. 324,338
4,150 Pinnacle Systems, Inc. (b) ....... 102,713
3,600 Premenos Technology Corporation (b) 94,950
3,650 Project Software & Development,
Inc. (b).......................... 127,294
6,300 Systemsoft Corporation (b) ....... 70,875
----------
2,917,746
----------
Computer Systems (0.6%):
3,700 Visioneer, Inc. (b) .............. 82,325
----------
Correctional Facilities (1.7%):
4,200 Corrections Corporation of America(b) 155,925
2,900 Wackenhut Corrections Corporation (b) 73,225
----------
229,150
----------
Drugs (3.1%):
8,600 Dura Pharmaceuticals, Inc. (b) ... 298,850
3,350 Parexel International Corporation (b) 111,388
----------
410,238
----------
Education Services (0.3%):
1,400 Sylvan Learning Systems, Inc. (b) 41,650
----------
Electric Companies & Systems (0.4%):
2,400 C.P. Clare Corporation (b) ....... 49,200
----------
Electrical Machinery & Electronic Components (2.6%):
4,650 Actel Corporation (b) ............ 49,988
6,650 Micro Linear Corporation (b) ..... 68,163
4,500 Sanmina Corporation (b) .......... 233,438
----------
351,589
----------
SECURITY
SHARES DESCRIPTION VALUE
- -------- ---------------------------------- ----------
COMMON STOCK, CONTINUED
Finance (9.1%):
4,650 Aames Financial Corporation ......$ 29,619
9,700 Concord EFS, Inc. (b) ............ 409,825
22,750 Credit Acceptance Corporation (b) 472,063
3,800 First Merchants Acceptance (b) ... 70,300
6,125 Imperial Credit Industries, Inc. (b) 133,219
----------
1,215,026
----------
Hotel Management (0.5%):
2,700 Studio Plus Hotels, Inc. (b) ..... 69,525
----------
Insurance (1.5%):
4,000 Amerin Corporation (b) ........... 107,000
2,350 Compdent Corporation (b) ......... 97,525
----------
204,525
----------
Machinery (0.7%):
4,000 Electrogas, Inc. (b) ............. 98,000
----------
Medical & Health Care (15.8%):
5,450 American Medical Response, Inc. (b) 177,125
3,500 Community Health Systems, Inc. (b) 124,688
9,850 Medpartners, Inc. (b) ............ 325,050
4,800 Occusystems, Inc. (b) ............ 96,000
11,150 Omnicare, Inc. ................... 498,963
6,200 Orthodontic Centers of America (b) 299,150
7,150 Phycor, Inc. (b) ................. 361,522
2,100 Rexall Sundown, Inc. (b) ......... 46,200
5,650 Total Renal Care Holdings, Inc. (b) 166,675
----------
2,095,373
----------
Medical Instruments & Supplies (1.8%):
7,850 Gulf South Medical Supply (b) .... 237,463
----------
Motion Picture Theaters & Production (2.9%):
8,300 Hollywood Entertainment
Corporation (b) .................. 69,513
10,575 Regal Cinemas, Inc. (b) .......... 314,606
----------
384,119
----------
Office Computing & Electronic Machines (3.6%):
6,250 Checkpoint Systems, Inc. (b) ..... 233,594
3,850 PMT Services, Inc. (b) ........... 116,463
4,200 Flextronics International, LTD (b) 126,000
----------
476,057
----------
Pet Supplies (0.9%):
4,250 Petco Animal Supplies, Inc. (b) .. 124,313
----------
Research & Development (1.3%):
4,100 Quintiles Transnational
Corporation (b)................... 168,100
----------
Restaurants & Food Service (0.9%):
6,850 Landry's Seafood Restaurants (b) . 116,878
----------
Retail Trade (6.6%):
6,700 Books-A-Million, Inc. (b) ........ 86,263
3,700 Creative Computers, Inc. (b) ..... 67,525
4,950 Just For Feet, Inc. (b) .......... 176,963
8,650 Men's Wearhouse, (The), Inc. (b) . 222,738
5,400 Henry Schein, Inc. (b) ........... 159,300
5,350 West Marine, Inc. (b) ............ 167,188
----------
879,977
----------
Wholesale Trade (2.2%):
5,300 Brightpoint, Inc. (b) ............ 74,863
4,950 Peak Technology Group, Inc. (b) .. 154,688
4,200 Thompson PBE, Inc. (b) ........... 58,800
----------
288,351
----------
TOTAL COMMON STOCK ............. 12,437,906
----------
MONEY MARKET FUNDS (6.5%):
517,933 Lehman Prime Fund ................ 517,933
346,000 Provident Treasury Fund .......... 346,000
----------
TOTAL MONEY MARKET FUNDS ....... 863,933
----------
TOTAL INVESTMENTS (100.2%)
(COST $9,073,625)(A) ...........$13,301,839
==========
- ---------
(a) Cost for federal income tax and financial reporting purposes is the same.
(b) Represents non-income producing security.
The computation of percentages shown is based on the ratio of the market value
of each category of security type to total net assets.
See notes to financial statements.
13
<PAGE>
================================================================================
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
INTERNATIONAL DISCOVERY FUND
SECURITY
SHARES DESCRIPTION VALUE
- -------- ---------------------------------- ----------
COMMON STOCK (85.9%)
Argentina (0.5%):
3,000 Buenos Aires Embotelladora (ADR) .$ 61,875
----------
Australia (3.7%):
20,000 Amcor, Ltd. ...................... 141,341
60,000 Foster's Brewing Group, Ltd. ..... 98,641
50,000 Pioneer International, Ltd. ...... 129,067
11,919 Smith (Howard), Ltd. ............. 56,302
----------
425,351
----------
Belgium (0.9%):
400 Colruyt S.A. ..................... 108,053
----------
Brazil (1.2%):
3,000 Telecomunicacoes Brasileiras
S.A. (ADR) ....................... 142,125
----------
Canada (2.7%):
13,000 Bombardier, Inc. "B" ............. 171,567
1,000 Cinram, Ltd. ..................... 18,421
2,500 Moore Corporation, Ltd. .......... 46,970
1,800 Newbridge Networks Corporation (b) 74,475
----------
311,433
----------
Chile (1.6%):
2,200 Compania de Telefonos de Chile (ADR) 182,325
----------
Denmark (2.7%):
4,000 Danisco A.S. ..................... 193,432
900 Novo-Nordisk A.S. ................ 123,421
----------
316,853
----------
Finland (0.5%):
1,000 Stockmann AB ..................... 52,277
----------
France (9.4%):
2,220 BIC .............................. 226,064
1,280 Castorama Dubois Investisse ...... 209,909
1,150 Docks de France S.A............... 174,951
1,200 Hermes International S.A. ........ 225,744
3,000 Seita ............................ 108,884
478 Sidel S.A. ....................... 149,152
----------
1,094,704
----------
Germany (5.4%):
4,000 Douglas Holding AG ............... 141,409
300 Linde AG.......................... 175,435
525 Mannesmann AG .................... 167,518
2,200 Schering AG ...................... 146,067
----------
630,429
----------
Hong Kong (1.5%):
150,000 Giordano International, Ltd. ..... 128,036
25,000 Johnson Electric Holdings, Ltd. .. 44,618
----------
172,654
----------
SECURITY
SHARES DESCRIPTION VALUE
- -------- ---------------------------------- ----------
COMMON STOCK, CONTINUED
Indonesia (1.6%):
6,000 PT Hanjaya Mandala Sampoerna .....$ 62,454
1,500 PT Indosat (ADR) ................. 54,750
12,000 PT Modern Photo Film Company ..... 69,538
----------
186,742
----------
Italy (2.4%):
4,020 Industrie Natuzzi Spa (ADR) ...... 182,408
37,300 Sasib D Risp ..................... 91,226
----------
273,634
----------
Japan (19.8%):
2,000 Autobacs Seven Company, Ltd. ..... 166,352
2,000 Doutor Coffee Company, Ltd. ...... 79,492
6,000 Hankyu Department Store, Inc. .... 88,992
2,100 Hirose Electric .................. 120,925
3,000 Kato Denki ....................... 77,941
2,200 Keyence Corporation .............. 253,795
6,000 Kurita Water Industries .......... 159,955
3,000 Mabuchi Motor Company ............ 186,710
16,000 Matsushita Electric Works ........ 169,066
2,000 Nichii Gakkan Company ............ 93,839
14,000 Nikon Corporation ................ 190,006
3,000 PCA Corporation .................. 125,055
2,000 Rohm Company, Ltd. ............... 113,033
6,000 Santen Pharmeceutical ............ 136,688
3,000 Secom ............................ 208,812
2,000 Trans Cosmos ..................... 131,064
----------
2,301,725
----------
Luxembourg (0.5%):
4,000 Quilmes Industrial S.A. .......... 62,400
----------
Malaysia (1.7%):
31,000 United Engineers, Ltd. ........... 197,794
----------
Mexico (1.8%):
12,000 Cemex S.A. de C.V. "B" ........... 43,062
13,000 Fomento Economico Mexicano S.A. .. 30,032
8,000 Grupo Carso S.A. de C.V. (b) ..... 42,673
8,000 Grupo Televisa S.A. .............. 90,748
----------
206,515
----------
Netherlands (6.8%):
12,900 Elsevier N.V. .................... 172,204
4,500 Grolsch N.V. ..................... 156,634
1,900 Hagemeyer N.V. ................... 99,320
1,750 Oce-Van Der Grinten N.V. ......... 106,543
3,597 Stork N.V. ....................... 89,302
1,826 Wolters Kluwer ................... 172,907
----------
796,910
----------
New Zealand (1.8%):
20,000 Fernz Corporation, Ltd. .......... 52,827
52,262 Fisher & Paykel Industries, Ltd. . 158,885
----------
211,712
----------
See notes to financial statements.
14
<PAGE>
================================================================================
SCHEDULE OF INVESTMENTS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
INTERNATIONAL DISCOVERY FUND (CONTINUED)
SECURITY
SHARES DESCRIPTION VALUE
- -------- ---------------------------------- ----------
COMMON STOCK, CONTINUED
Portugal (0.9%):
6,000 Unicer - Uniao Cervejeira S.A. ...$ 100,408
----------
Singapore (0.6%):
33,000 Singapore Technologies Industrial
Corporation, Ltd. ................ 74,655
----------
Sweden (3.2%):
5,500 Astra AB ......................... 219,921
8,650 Sandvik AB "B" ................... 152,054
----------
371,975
----------
Switzerland (5.2%):
100 Societe Generale de Surveillance
Holding S.A. "B" ................. 199,009
150 Nestle S.A. ...................... 166,333
30 Roche Holding AG ................. 237,899
----------
603,241
----------
Thailand (1.2%):
6,500 Advanced Info Service Plc ........ 115,086
8,000 Siam Makro Public Company, Ltd. .. 29,376
----------
144,462
----------
United Kingdom (8.3%):
19,000 Compass Group Plc ................ 144,252
15,000 Farnell Electronic Plc ........... 167,448
40,000 Halma Plc ........................ 109,303
62,000 Polypipe Plc ..................... 168,457
24,000 Powerscreen International Plc .... 144,391
10,000 Rentokil Group Plc ............... 52,012
20,000 Reuters Holdings Plc ............. 183,207
----------
969,070
----------
TOTAL INVESTMENTS (85.9%)
(COST-$8,796,281) (a) ....... $9,999,322
==========
INVESTMENT CONCENTRATION
At December 31, 1995, International Discovery Fund's investment concentration,
by industry, was as follows:
Aerospace and Engineering ............... 12.5%
Basic Industries ........................ 6.0%
Business Services ....................... 8.4%
Conglomerates ........................... 1.5%
Consumer Durables ....................... 6.8%
Consumer Nondurables .................... 13.1%
Electrical and Electronics .............. 14.0%
Health Care ............................. 7.4%
Retailing ............................... 12.2%
Utilities ............................... 4.0%
Cash and Other Assets, Less Liabilities . 14.1%
-------
Total Net Assets ........................ 100.0%
=======
- ---------
(a) Cost for federal income tax and financial reporting purposes is the same.
(b) Represents non-income producing security.
ADR (American Depository Receipt)
The computation of percentages shown is based on the ratio of the market value
of each category of security type to total net assets.
See notes to financial statements.
15
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
1. ORGANIZATION:
The Parkstone Advantage Fund (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end investment
company.
The Fund is authorized to issue an unlimited number of shares which are
shares of beneficial interest without par value. The Fund presently offers
series of shares of the Prime Obligations Fund, Bond Fund, Equity Fund, Small
Capitalization Fund, and International Discovery Fund. Sales of shares of the
Fund may only be made to separate accounts of various life insurance
companies ("Participating Insurance Companies"). As of December 31, 1995, the
only Participating Insurance Company is Security Benefit Life Insurance
Company.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles.
SECURITIES VALUATION:
Investments of the Prime Obligations Fund are valued at either amortized
cost, which approximates market value, or at original cost, which combined
with accrued interest approximates market value. Under the amortized cost
method, discount or premium is amortized on a constant basis to the
maturity of the security.
Investments in common and preferred stocks, corporate bonds, foreign
government bonds and U.S. Government securities of the Bond Fund, Equity
Fund, Small Capitalization Fund, and International Discovery Fund,
(collectively, "the variable net asset value funds"), are valued at their
closing sales price, or if there have been no sales on a particular day,
the latest bid price. If no bid price is available, then the securities
are valued in good faith using methods approved by or under the
supervision of the Board of Trustees of the Fund. Investments in
investment companies are valued at their respective net asset values. The
differences between the cost and market values of investments held by the
variable net asset value funds are reflected as either unrealized
appreciation or depreciation.
FOREIGN CURRENCY TRANSACTIONS:
The accounting records of the Fund are maintained in U.S. dollars. All
assets and liabilities initially expressed in foreign currencies are
translated into U.S. dollar amounts at prevailing exchange rates.
Purchases and sales of investment securities, dividend income and certain
expenses are translated at the rates of exchange prevailing on the
respective dates of such transactions. The Fund does not isolate that
portion of the results of operations resulting from changes in the foreign
exchange rates on investments from the fluctuations arising from changes
in the market prices of securities held. Such fluctuations are included
with the net realized and unrealized gain or loss on investments. Net
realized foreign exchange gains or losses arise from sales of portfolio
securities, sales of foreign currencies, and the difference between asset
and liability amounts initially stated in foreign currencies and the U.S.
dollar value of the amounts actually received or paid. Net unrealized
foreign exchange gains or losses arise from changes in the value of
portfolio securities and other assets and liabilities at the end of the
reporting period, resulting from changes in the exchange rates.
16
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The International Discovery Fund may enter into forward foreign exchange
contracts in connection with foreign currency risk from the purchase or
sale of securities denominated in foreign currency. The International
Discovery Fund may also enter into such contracts to manage changes in
foreign currency exchange rates on portfolio positions. These contracts
are marked to market daily, by recognizing the difference between the
contract exchange rate and the forward market rate as unrealized gains or
losses. Realized gains or losses are recognized when contracts are settled
and are reported in the statement of operations. These contracts involve
market risk in excess of the amount reflected in the Statement of Assets
and Liabilities. The face or contract amount in U.S. dollars reflects the
total exposure the International Discovery Fund has in that particular
currency contract. Losses may arise due to changes in the value of the
foreign currency or if the counterparty does not perform under the
contract.
SECURITIES TRANSACTIONS AND RELATED INCOME:
Security transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the
accrual basis and includes, where applicable, the pro rata amortization of
premium or discount. Dividend income is recorded on the ex-dividend date.
Gains or losses realized on sales of securities are determined by
comparing the identified cost of the security lot sold with the net sales
proceeds.
REPURCHASE AGREEMENTS:
The Fund may enter into repurchase agreements from member banks of the
Federal Deposit Insurance Corporation ("FDIC") with capital, surplus and
undivided profits in excess of $100,000,000 (as of the date of their most
recently published financial statements) and from registered
broker/dealers which First of America Investment Corporation (Investment
Advisor for the Fund) deems creditworthy under guidelines approved by the
Board of Trustees, subject to the seller's agreement to repurchase the
underlying securities at a mutually agreed-upon date and price. The
repurchase price generally equals the price paid by the Fund plus interest
negotiated on the basis of current short-term rates, which may be more or
less than the rate on the underlying collateral. The seller, under a
repurchase agreement, is required to maintain the value of collateral held
pursuant to the agreement at not less than the repurchase price (including
accrued interest). Securities subject to repurchase agreements are held by
the Fund's custodian or another qualified custodian or in the Federal
Reserve/Treasury book-entry system.
DISTRIBUTIONS TO SHAREHOLDERS:
For the Prime Obligations Fund (money market fund) dividends of net
investment income are declared daily and paid monthly and distributable
net realized capital gains are declared and distributed at least annually.
Dividends from net investment income and distributable realized capital
gains are declared and paid at least annually for the variable net asset
value funds. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. These differences are
primarily due to the recharacterization of foreign currency gains and
losses.
17
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
INCOME TAXES:
The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and distributes its
taxable net investment income and net realized capital gains sufficient to
relieve it from all, or substantially all, federal income, excise and
state income taxes.
Therefore, no provision for federal or state tax is required.
OTHER:
Expenses that are directly related to one of the Funds are charged
directly to that Fund. Other operating expenses of the Fund are prorated
to the Funds on the basis of relative net assets.
Organization costs of $10,000 for each fund are being amortized over five
years.
3. INVESTMENT RISKS
The International Discovery Fund's investments in foreign securities may
involve risks not present in domestic investments. Since foreign securities
are denominated in foreign currency and pay interest or dividends in foreign
currencies, changes in the relationship of these currencies to the U.S.
dollar can significantly affect the value of the investments and operations
of the Fund. Foreign investments may also subject the Fund to foreign
government exchange restrictions, expropriation, taxation or other
political, social or economic developments, all of which could affect the
market and/or credit risk of the investments.
18
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
4. PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
year ended December 31, 1995, are as follows:
PURCHASES SALES
--------- -----
Bond Fund ................................ $10,494,619 $9,355,400
Equity Fund .............................. 7,342,151 4,988,338
Small Capitalization Fund ................ 8,183,694 6,039,911
International Discovery Fund ............. 9,278,581 7,582,853
5. CAPITAL SHARE TRANSACTIONS:
PRIME BOND
OBLIGATIONS FUND FUND
------------------- -------------------
AMOUNT SHARES AMOUNT SHARES
--------- -------- --------- --------
Year ended December 31, 1995:
Shares sold .............. $887,490 887,490 $1,877,770 184,497
Dividends reinvested ..... 103,053 103,053 239,024 23,713
Shares redeemed .......... (277,620) (277,620) (616,153) (61,669)
-------- -------- ---------- --------
Net increase ............. $712,923 712,923 $1,500,641 146,541
======== ======== ========== ========
Year ended December 31, 1994:
Shares sold .............. $857,608 857,608 $2,875,885 295,981
Dividends reinvested ..... 49,016 49,016 36,257 3,827
Shares redeemed .......... (702,884) (702,884) (1,201,795)(125,476)
-------- -------- ---------- --------
Net increase ............. $203,740 203,740 $1,710,347 174,332
======== ======== ========== ========
<TABLE>
<CAPTION>
EQUITY SMALL CAPITALIZATION INTERNATIONAL DISCOVERY
FUND FUND FUND
------------------- -------------------- ---------------------
AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES
--------- -------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1995:
Shares sold .............. $4,255,436 383,085 $3,811,173 277,228 $2,078,118 205,557
Shares redeemed .......... (1,340,930)(122,787) (1,037,565) (77,789) (943,423 (94,693)
---------- -------- ---------- ------- --------- -------
Net increase ............. $2,914,506 260,298 $2,773,608 199,439 $1,134,695 110,864
========== ======== ========== ======= ========= =======
Year ended December 31, 1994:
Shares sold .............. $6,540,387 671,067 $4,452,064 425,930 $4,561,211 440,278
Shares redeemed .......... (1,055,980)(109,876) (622,899) (59,094) (652,727) (63,792)
---------- -------- ---------- ------- ---------- -------
Net increase ............. $5,484,407 561,191 $3,829,165 366,836 $3,908,484 376,486
========== ======== ========== ======= ========== =======
</TABLE>
19
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
6. RELATED PARTY TRANSACTIONS:
Security Management Company ("SMC"), a subsidiary of Security Benefit Life
Insurance Company, with whom certain officers and trustees of the Fund are
affiliated, serves the Fund as Administrator. Such officers and trustees are
paid no fees directly by the Fund. Under the terms of the administration
agreement, SMC's fees are computed daily as a percentage of the average net
assets of the Fund. SMC also serves as Mutual Fund Accountant and Transfer
Agent. Security Distributors, Inc. ("SDI"), with whom certain officers and
trustees of the Fund are also affiliated, serves as the Fund's distributor.
SDI receives no fees for providing distribution services to the Fund.
Investment advisory services are provided to the Fund by First of America
Investment Corp. ("FIC"). Gulfstream Global Investors, LTD serves as the
subadvisor for the International Discovery Fund.
Information regarding these services and fees is as follows for the year
ended December 31, 1995:
<TABLE>
<CAPTION>
PRIME SMALL INTERNATIONAL
OBLIGATIONS BOND EQUITY CAPITALIZATION DISCOVERY
FUND FUND FUND FUND FUND
----------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Annual fee (percentage of average net assets) .40% .74% 1.00% 1.00% 1.25%
ADMINISTRATION FEES:
Annual fee (percentage of
average net assets) ................... .20% .20% .20% .20% .20%
ANNUAL ACCOUNTING SERVICE FEE (a).......... $15,000 $15,000 $15,000 $15,000 $30,000
</TABLE>
- ------------
(a) Fees are the greater of .03% of average net assets or $1,250 per month,
except for International Discovery Fund the fees of which are the greater of
.08% of average net assets or $2,500 per month.
7. FEDERAL INCOME TAXES:
The amounts of unrealized appreciation (depreciation) for income tax purposes
at December 31, 1995, for all securities and foreign currency holdings
(including foreign currency receivables and payables) were as follows:
<TABLE>
<CAPTION>
SMALL INTERNATIONAL
BOND EQUITY CAPITALIZATION DISCOVERY
FUND FUND FUND FUND
--------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Unrealized appreciation .................... $211,750 $3,795,869 $4,489,823 $1,412,854
Unrealized depreciation .................... (128) (220,553) (261,609) (209,721)
--------- ---------- ---------- -----------
Net unrealized appreciation ................ $211,622 $3,575,316 $4,228,214 $1,203,133
========= ========== ========== ===========
</TABLE>
For federal income tax purposes the following Funds have capital loss
carryforwards as of December 31, 1995, which are available to offset future
capital gains, if any:
<TABLE>
<CAPTION>
SMALL INTERNATIONAL
BOND EQUITY CAPITALIZATION DISCOVERY
EXPIRATION DATE FUND FUND FUND FUND
--------------- --------- --------- --------- -----------
<S> <C> <C> <C> <C>
2001 ....................................... $ -- $ 60,434 $ -- $ 31,443
2002 ....................................... 170,635 542,475 168,682 489,337
2003 ....................................... -- 51,055 -- 187,685
--------- --------- --------- -----------
$170,635 $653,964 $168,682 $708,465
========= ========= ========= ===========
</TABLE>
20
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS, CONTINUED
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
8. FEDERAL TAX STATUS OF DIVIDENDS:
The income dividends paid by the Fund are taxable as ordinary income on the
shareholder's tax return. None of the amount taxable as ordinary income for
any of the Funds qualifies for the dividends received deduction available to
corporate shareholders in accordance with the provisions of the Internal
Revenue Code.
21
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
PRIME SMALL INTERNATIONAL
OBLIGATIONS BOND EQUITY CAPITALIZATION DISCOVERY
FUND FUND FUND FUND FUND
--------- --------- --------- --------- ---------
FOR A SHARE OUTSTANDING
THROUGHOUT THE YEAR
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE:
Beginning of Year ........................... $1.00 $9.35 $9.64 $11.58 $9.65
--------- --------- --------- --------- ---------
Investment Activities
Net investment income (loss) ................ 0.041 0.40 (0.08) (0.15) (.03)
Net realized and unrealized gain
on investments ............................ -- 1.17 2.88 4.28 .97
--------- --------- --------- --------- ---------
Total from Investment Activities ........ 0.041 1.57 2.80 4.13 .94
--------- --------- --------- --------- ---------
Distributions
Net investment income ....................... (0.041) (0.42) -- -- --
--------- --------- --------- --------- ---------
Net Asset Value, End of Year .................. $1.00 $10.50 $12.44 $15.71 $10.59
========= ========= ========= ========= =========
Total Return (a) ............................ 4.19% 16.98% 29.05% 35.66% 9.74%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of year ................... $2,944,914 $6,758,241 $14,977,130 $13,272,561 $11,645,200
Ratio of expenses to average
net assets ................................ 1.64% 1.57% 1.62% 1.64% 2.38%
Ratio of net investment income (loss)
to average net assets ..................... 4.15% 5.31% (0.84%) (1.29%) (.39%)
Portfolio turnover .......................... -- 178% 44% 64% 86%
</TABLE>
- ---------
(a) Total return information does not take into account any charges paid at the
time of purchase.
See notes to financial statements.
22
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRIME SMALL INTERNATIONAL
OBLIGATIONS BOND EQUITY CAPITALIZATION DISCOVERY
FUND FUND FUND FUND FUND
--------- --------- --------- --------- ---------
FOR A SHARE OUTSTANDING
THROUGHOUT THE YEAR
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE:
Beginning of Year ........................... $1.00 $9.96 $10.17 $11.00 $10.35
--------- --------- --------- --------- ---------
Investment Activities
Net investment income (loss) ................ 0.023 0.42 (0.07) (0.13) (0.07)
Net realized and unrealized gain (loss)
on investments ............................ -- (0.96) (0.46) .71 (0.63)
--------- --------- --------- --------- ---------
Total from Investment Activities ........ 0.023 (0.54) (0.53) .58 (0.70)
--------- --------- --------- --------- ---------
Distributions
Net investment income ....................... (0.023) (0.07) -- -- --
--------- --------- --------- --------- ---------
Net Asset Value, End of Year .................. $1.00 $9.35 $9.64 $11.58 $9.65
========= ========= ========= ========= =========
Total Return (a) ............................ 2.29% (5.38%) (5.21%) 5.27% (6.76%)
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of year ................... $2,231,991 $4,651,157 $9,095,015 $7,476,444 $9,537,019
Ratio of expenses to average
net assets ................................ 1.90% 1.80% 1.86% 1.98% 2.34%
Ratio of net investment income (loss)
to average net assets ..................... 2.29% 5.27% (0.92%) (1.66%) (1.13%)
Portfolio turnover .......................... -- 159% 51% 39% 87%
</TABLE>
- ---------
(a) Total return information does not take into account any charges paid at the
time of purchase.
See notes to financial statements.
23
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND FOR THE YEAR ENDED DECEMBER 31, 1993(A)
<TABLE>
<CAPTION>
PRIME SMALL INTERNATIONAL
OBLIGATIONS BOND EQUITY CAPITALIZATION DISCOVERY
FUND FUND FUND FUND FUND
--------- --------- --------- --------- ---------
FOR A SHARE OUTSTANDING
THROUGHOUT THE PERIOD
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE:
Beginning of Period ......................... $1.00 $10.00 $10.00 $10.00 $10.00
--------- --------- --------- --------- ---------
Investment Activities
Net investment income (loss) ................ 0.009 0.10 (0.02) (0.03) (0.03)
Net realized and unrealized gain (loss)
on investments ............................ -- (0.14) 0.19 1.03 0.38
--------- --------- --------- --------- ---------
Total from Investment Activities ........ 0.009 (0.04) 0.17 1.00 0.35
--------- --------- --------- --------- ---------
Distributions
Net investment income ....................... (0.009) -- -- -- --
--------- --------- --------- --------- ---------
Net Asset Value, End of Period ................ $1.00 $9.96 $10.17 $11.00 $10.35
========= ========= ========= ========= =========
Total Return (c) ............................ 0.88% (0.40%) 1.70% 10.00% 3.50%
RATIOS/SUPPLEMENTAL DATA:
Net Assets at end of period ................. $2,028,251 $3,216,233 $3,893,346 $3,064,765 $6,334,523
Ratio of expenses to average
net assets (b) ............................ 1.79% 2.03% 2.11% 1.87% 2.51%
Ratio of net investment income (loss)
to average net assets (b) ................. 1.53% 5.23% (1.09%) (1.40%) (1.38%)
Ratio of expenses to average
net assets* (b) ........................... -- -- -- 2.23% --
Ratio of net investment loss to
average net assets* (b) ................... -- -- -- (1.76%) --
Portfolio turnover (b) ...................... -- 101% 45% 23% 13%
</TABLE>
- ---------
* During the period the investment advisory fee was voluntarily reduced. If
such voluntary fee reductions had not occurred, the ratios would have been
as indicated.
(a) Period from commencement of operations (September 23, 1993)
(b) Annualized
(c) Total return information does not take into account any charges paid at the
time of purchase and is not annualized.
See notes to financial statements.
24
<PAGE>
================================================================================
PERFORMANCE RESULTS
- --------------------------------------------------------------------------------
THE PARKSTONE ADVANTAGE FUND DECEMBER 31, 1995
The following charts represent the growth of a $10,000 investment in each of the
Parkstone Advantage Funds. We have included the growth of an appropriate market
index for each of the Funds, for your reference. Past performance is not
predictive of future performance. The Bond and International Discovery Charts
reference a change in each Fund's benchmark index. The Funds' new indices are
the Salomon Brothers Broad and the EAFE respectively. We believe the securities
in these indices more closely reflect the securities these Funds purchase.
- --------------------------------------------------------------------------------
BOND FUND
AVERAGE ANNUAL RETURN
AS OF DECEMBER 31, 1995
- ------------------------
SINCE INCEPTION
(9/24/93)
4.38%
- ------------------------
ONE YEAR
16.98%
- ------------------------
[LINE GRAPH WITH FOLLOWING INFORMATION CHARTED]
RETURN ON A $10,000 INVESTMENT
(9/93 TO 12/95)
<TABLE>
<CAPTION>
BOND FUND $11,024 SALOMON BROS. BROAD $11,521 LEHMAN GOV. CORP. $11,496
----------------- --------------------------- -------------------------
<S> <C> <C> <C>
September 1993 $10,000 $10,000 $10,000
December 1993 $9,960 $10,002 $10,079
March 1994 $9,600 $9,722 $9,538
June 1994 $9,470 $9,628 $9,689
September 1994 $9,485 $9,680 $9,536
December 1994 $9,424 $9,718 $9,766
March 1995 $9,868 $10,210 $10,199
June 1995 $10,462 $10,836 $10,670
September 1995 $10,604 $11,041 $11,077
December 1995 $11,024 $11,521 $11,496
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EQUITY FUND
AVERAGE ANNUAL RETURN
AS OF DECEMBER 31, 1995
- ------------------------
SINCE INCEPTION
(9/24/93)
10.08%
- ------------------------
ONE YEAR
29.05%
- ------------------------
[LINE GRAPH WITH FOLLOWING INFORMATION CHARTED]
RETURN ON A $10,000 INVESTMENT
(9/93 TO 12/95)
EQUITY FUND $12,440 S&P 500 $14,245
------------------- ---------------
September 1993 $10,000 $10,000
December 1993 $10,170 $10,231
March 1994 $9,620 $9,841
June 1994 $8,900 $9,881
September 1994 $9,730 $10,368
December 1994 $9,640 $10,365
March 1995 $10,190 $11,374
June 1995 $11,010 $12,454
September 1995 $12,470 $13,444
December 1995 $12,440 $14,245
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SMALL CAPITALIZATION FUND
AVERAGE ANNUAL RETURN
AS OF DECEMBER 31, 1995
- ------------------------
SINCE INCEPTION
(9/24/93)
21.97%
- ------------------------
ONE YEAR
35.66%
- ------------------------
[LINE GRAPH WITH FOLLOWING INFORMATION CHARTED]
RETURN ON A $10,000 INVESTMENT
(9/93 TO 12/95)
SMALL CAPITALIZATION FUND $15,710 RUSSELL 2000 $12,941
--------------------------------- --------------------
September 1993 $10,000 $10,000
December 1993 $11,000 $10,262
March 1994 $10,250 $9,990
June 1994 $9,320 $9,601
September 1994 $10,880 $10,267
December 1994 $11,580 $10,075
March 1995 $12,170 $10,540
June 1995 $13,410 $11,528
September 1995 $15,830 $12,666
December 1995 $15,710 $12,941
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INTERNATIONAL DISCOVERY FUND
AVERAGE ANNUAL RETURN
AS OF DECEMBER 31, 1995
- ------------------------
SINCE INCEPTION
(9/24/93)
2.55%
- ------------------------
ONE YEAR
9.74%
- ------------------------
[LINE GRAPH WITH FOLLOWING INFORMATION CHARTED]
RETURN ON A $10,000 INVESTMENT
(9/93 TO 12/95)
<TABLE>
<CAPTION>
INTERNATIONAL DISCOVERY FUND $10,590 EAFE $12,166 MSCI $12,911
------------------------------------ ------------ ------------
<S> <C> <C> <C>
September 1993 $10,000 $10,000 $10,000
December 1993 $10,350 $10,093 $10,554
March 1994 $10,370 $10,452 $10,281
June 1994 $10,250 $10,994 $10,480
September 1994 $10,210 $11,011 $10,817
December 1994 $9,650 $10,907 $10,297
March 1995 $9,720 $11,118 $11,339
June 1995 $10,290 $11,208 $12,011
September 1995 $10,500 $11,684 $11,902
December 1995 $10,590 $12,166 $12,911
</TABLE>
- --------------------------------------------------------------------------------
The performance set forth above does not reflect fees and expenses associated
with an investment in variable insurance products offered by Security Benefit
Life Insurance Company. Shares of the Fund are available only through the
purchase of such products.
25
<PAGE>
================================================================================
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
THE CONTRACT OWNERS AND BOARD OF DIRECTORS
THE PARKSTONE ADVANTAGE FUND
We have audited the accompanying statement of assets and liabilities of The
Parkstone Advantage Fund (comprised of the Prime Obligations, Bond, Equity,
Small Capitalization and International Discovery Portfolios) (the Fund),
including the schedule of investments, as of December 31, 1995, and the related
statements of operations for the year then ended, statements of changes in net
assets for each of the two years in the period then ended and the financial
highlights for each of the two years in the period then ended and for the period
from September 23, 1993 (commencement of operations) to December 31, 1993. These
financial statements and financial highlights are the responsibility of the
Fund'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
December 31, 1995, by correspondence with the custodian. As to securities
relating to uncompleted transactions, we performed other auditing procedures. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the portfolios comprising The Parkstone Advantage Fund at December 31, 1995,
and the results of their operations, changes in their net assets and the
financial highlights for the periods indicated above in conformity with
generally accepted accounting principles.
Ernst & Young LLP
Kansas City, Missouri
January 26, 1996
26
<PAGE>
THE PARKSTONE ADVANTAGE FUND
* PRIME OBLIGATIONS FUND
* EQUITY FUND
* SMALL CAPITALIZATION FUND
* BOND FUND
* INTERNATIONAL DISCOVERY FUND
THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE
SHAREHOLDERS OF THE FUNDS. THE REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS
PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS
WHICH CONTAINS DETAILS CONCERNING THE SALES CHARGES AND
OTHER PERTINENT INFORMATION.
NOT FDIC INSURED
[SDI LOGO]
