ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
(A PORTFOLIO OF ALEXANDER HAMILTON FUNDS)
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT AND SUPPLEMENT TO PROSPECTUS DATED FEBRUARY 10, 1994
A. Please delete the "Summary of Fund Expenses" table on page 1 and replace
it with the following table:
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering price).............................. 4.50%
Maximum Sales Load Imposed on Reinvested Dividends (as a percentage of offering price)................... None
Contingent Deferred Sales Charge (as a percentage of original purchase price
or redemption proceeds, as applicable) (1)............................................................. 0.50%
Redemption Fee (as a percentage of amount redeemed, if applicable)....................................... None
Exchange Fee............................................................................................. None
ANNUAL FUND OPERATING EXPENSES*
(As a percentage of projected average net assets)
Management Fee (after waiver) (2)........................................................................ 0.11%
12b-1 Fee................................................................................................ 0.25%
Total Other Expenses (after expense reimbursement) (3)................................................... 0.89%
Total Fund Operating Expenses (4).................................................................. 1.25%
</TABLE>
(1) A contingent deferred sales charge of 0.50% applies only to shares which are
purchased with proceeds from redemptions of shares of an unaffiliated mutual
fund in which a sales load has been paid and which are redeemed within one
year of purchase. For a more complete description, see "Purchases with
Proceeds from Redemptions of Unaffiliated Investment Companies."
(2) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver of a portion of the management fee by the investment
adviser. The adviser can terminate this voluntary waiver at any time at its
sole discretion. The maximum management fee is 0.75%.
(3) Other expenses are estimated to be 2.77% absent the anticipated voluntary
reimbursement of certain other expenses by the adviser. The adviser can
terminate the voluntary reimbursement of expenses at any time at its sole
discretion.
(4) Total Fund operating expenses are estimated to be 3.77% absent the
anticipated voluntary waiver and voluntary reimbursement explained in
footnotes (2) and (3).
* Total Fund operating expenses are estimated based on average expenses
expected to be incurred during the period ending November 30, 1994. During
the course of this period, expenses may be more or less than the average
amount shown.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "TRUST INFORMATION" AND "HOW TO INVEST IN THE FUND."
Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
<S> <C> <C>
You would pay the following expenses on a $1,000 investment assuming (1) 5% annual return and
(2) redemption at the end of each time period................................................... $57 $83
You would pay the following expenses on the same investment, assuming no sales load when
purchasing shares of the Fund with proceeds from the redemption of unaffiliated mutual fund
shares.......................................................................................... $13 $40
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
B. Please insert the following "Financial Highlights" table as page 2
following the "Summary of Fund Expenses" and before the section entitled
"Highlights". In addition, please add the heading "Financial Highlights"
to the Table of Contents on page I following the heading "Summary of Fund
Expenses."
ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED
NOVEMBER 30, 1994*
<S> <C>
- ---------------------------------------------------------------------------------------- ------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- ----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment income 0.05
- ----------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.37 )
- ---------------------------------------------------------------------------------------- ------------------------
Total from investment operations (0.32 )
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.02 )
- ---------------------------------------------------------------------------------------- ------------------------
NET ASSET VALUE, END OF PERIOD $ 9.66
- ---------------------------------------------------------------------------------------- ------------------------
TOTAL RETURN** (3.21%)
- ----------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------
Expenses 1.25%(a)
- ----------------------------------------------------------------------------------------
Net investment income 1.75%(a)
- ----------------------------------------------------------------------------------------
Expense waiver/reimbursement (b) 3.40%(a)
- ----------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $4,890
- ----------------------------------------------------------------------------------------
Portfolio turnover rate 9%
- ----------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from February 14, 1994 (date of initial
public investment) to May 31, 1994 (unaudited).
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(See Notes which are an integral part of the Financial Statements)
C. Please insert the following as the last sentence of the sub-section
"Investment-Grade Bonds" on page 4:
"The price of fixed income securities fluctuates inversely in relation to the
direction of interest rates."
D. Please delete the last sentence of the first paragraph and the second
paragraph and add the following information to the sub-section entitled
"Dealer Concession" on page 8:
"Such payments, which will be predicated upon the amount of Fund shares sold,
may take the form of cash or promotional incentives, such as payment of certain
expenses of qualified employees and their spouses to attend informational
meetings about the Fund or other special events at recreational facilities, or
items of material value. In some instances, these incentives will be made
available only to dealers whose employees have sold or may sell significant
amounts of shares."
E. Please insert the following ]"Other Payments to Financial Institutions"
sub-section following the sub-section entitled "Dealer Concessions" on
page 8. In addition, please add the heading "Other Payments to Financial
Institutions" to the Table of Contents on page I following the heading
"Dealer Concessions."
"OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. The distributor, the Adviser, or
their affiliates may also offer to pay a fee from their own assets to financial
institutions as financial assistance for providing substantial marketing and
sales support. The support may include initiating customer accounts, providing
sales literature, or participating in sales, educational and training seminars
(including those held at recreational facilities). Such assistance will be
predicated upon the amount of shares the financial institution sells or may sell
and/or upon the type and nature of sales or marketing support furnished by the
financial institution. Any payments made by the distributor may be reimbursed by
the Adviser or its affiliates."
F. Please insert the following information as the second paragraph of the
sub-section entitled "Purchases with Proceeds from Redemptions of
Unaffiliated Investment Companies" which begins on page 9:
"A contingent deferred sales charge is charged in limited circumstances.
Shareholders who purchased shares with the proceeds of a redemption of shares of
an unaffiliated mutual fund sold with a sales charge or commission and which
were not distributed by the distributor will be charged a contingent deferred
sales charge by the Fund's distributor of .50 of 1% for redemptions made within
one year of purchase. The contingent deferred sales charge will be calculated
based upon the lesser of the original price of shares or the net asset value of
the shares when redeemed."
G. Please delete the first sentence of the section entitled "Redeeming
Shares" on page 12 and insert the following:
"The Fund purchases shares from you at their net asset value, less any
applicable contingent deferred sales charge, next determined after the transfer
agent receives the redemption request."
H. Please insert the following "Contingent Deferred Sales Charge" section
following the section entitled "Systematic Withdrawal Plan" which begins
on page 13. In addition, please add the heading "Contingent Deferred Sales
Charge" to the Table of Contents immediately following the heading
"Systematic Withdrawal Plan."
"CONTINGENT DEFERRED SALES CHARGE
No contingent deferred sales charge will be imposed on shares acquired through
reinvestment of dividends or distributions of short-term or long-term capital
gains. Redemptions are deemed to have occurred in the following order: (i)
shares acquired through the reinvestment of dividends and long-term capital
gains; (ii) purchases of shares occurring more than one year before the date of
redemption; (iii) purchases of shares within the previous year without the use
of redemption proceeds as described above; and (iv) purchases of shares within
the previous year through the use of redemption proceeds as described above.
No contingent deferred sales charge will be imposed when a redemption results
from a tax-free return under the following circumstances: (i) a total or partial
distribution from a qualified retirement plan, other than an IRA, Keogh Plan, or
a custodial account, following retirement; (ii) a total or partial distribution
from an IRA, Keogh Plan, or a custodial account, after the beneficial owner
attains age 59-1/2; or (iii) from the death or permanent and total disability of
the beneficial owner. The exemption from the contingent deferred sales charge
for qualified plans, an IRA, Keogh Plan or a custodial account does not extend
to account transfers, rollovers, or other redemptions made for purposes of
reinvestment.
A contingent deferred sales charge will not be charged in connection with
exchanges in other Alexander Hamilton Funds or Treasury Cash Series portfolios
or in connection with redemptions by the Fund of accounts with low balances."
I. Please insert the following information as the last sentence of the
second paragraph of the section entitled "Voting Rights" on page 18:
"As of July 3, 1994, Alexander Hamilton Life Insurance Company may for certain
purposes be deemed to control the Fund because it is owner of record of certain
shares of the Fund."
J. Please delete the sentence immediately following the HYPOTHETICAL EXAMPLE
OF TOTAL RETURN on page 20 in the section entitled "Performance
Information" which begins on page 19 and insert the following:
"Performance information reflects the effect of the maximum sales load and other
similar non-recurring charges, such as the contingent deferred sales charge,
which, if excluded, would increase the total return and yield."
K. Please insert the following financial statements after the "Performance
Information" section which begins on page 19. In addition, please add the
heading "Financial Statements" to the Table of Contents immediately before
"Addresses."
ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- -------------
COMMON STOCKS--88.7%
- ---------------------------------------------------------------------------------------------------
BASIC INDUSTRY--7.7%
-------------------------------------------------------------------------------------
1,900 *FMC Corp. $ 91,675
-------------------------------------------------------------------------------------
1,900 Lubrizol Corp. 65,075
-------------------------------------------------------------------------------------
2,500 Phelps Dodge Corp. 138,750
-------------------------------------------------------------------------------------
4,000 Praxair, Inc. 81,500
------------------------------------------------------------------------------------- -------------
Total 377,000
------------------------------------------------------------------------------------- -------------
CONSUMER DURABLES--7.9%
-------------------------------------------------------------------------------------
1,900 Eastman Kodak Co. 89,063
-------------------------------------------------------------------------------------
1,800 Ford Motor Co. 103,950
-------------------------------------------------------------------------------------
1,200 General Motors Corp. 64,500
-------------------------------------------------------------------------------------
5,000 Mattel, Inc. 131,875
------------------------------------------------------------------------------------- -------------
Total 389,388
------------------------------------------------------------------------------------- -------------
CONSUMER NON-DURABLES--5.8%
-------------------------------------------------------------------------------------
1,700 Avon Products, Inc. 100,088
-------------------------------------------------------------------------------------
2,100 Philip Morris Cos., Inc. 103,425
-------------------------------------------------------------------------------------
2,500 Reebok International LTD 78,750
------------------------------------------------------------------------------------- -------------
Total 282,263
------------------------------------------------------------------------------------- -------------
CONSUMER SERVICES--6.2%
-------------------------------------------------------------------------------------
4,400 American Stores Co. 110,000
-------------------------------------------------------------------------------------
2,500 Sears Roebuck & Co. 126,563
-------------------------------------------------------------------------------------
3,300 *Tele Communications, Inc. 68,887
------------------------------------------------------------------------------------- -------------
Total 305,450
------------------------------------------------------------------------------------- -------------
</TABLE>
ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- ---------------------------------------------------------------------------------------------------
ENERGY--10.3%
-------------------------------------------------------------------------------------
3,300 Baker Hughes, Inc. $ 65,587
-------------------------------------------------------------------------------------
1,300 Chevron Corp. 113,100
-------------------------------------------------------------------------------------
1,600 MAPCO, Inc. 100,000
-------------------------------------------------------------------------------------
1,700 Texaco, Inc. 107,950
-------------------------------------------------------------------------------------
3,700 USX Marathon Group 63,363
-------------------------------------------------------------------------------------
1,200 *Western Atlas, Inc. 51,300
------------------------------------------------------------------------------------- -------------
Total 501,300
------------------------------------------------------------------------------------- -------------
FINANCE--15.3%
-------------------------------------------------------------------------------------
1,300 Bankers Trust NY Corp. 91,487
-------------------------------------------------------------------------------------
2,200 Citicorp 86,900
-------------------------------------------------------------------------------------
2,000 Dean Witter Discover & Co. 78,000
-------------------------------------------------------------------------------------
1,500 Federal National Mortgage Association 125,250
-------------------------------------------------------------------------------------
1,300 Mellon Bank Corp. 76,050
-------------------------------------------------------------------------------------
2,900 PNC Bank Corp. 88,813
-------------------------------------------------------------------------------------
500 TIG Holdings, Inc. 10,187
-------------------------------------------------------------------------------------
1,600 Transamerica Corp. 85,400
-------------------------------------------------------------------------------------
3,200 Travelers, Inc. 104,800
------------------------------------------------------------------------------------- -------------
Total 746,887
------------------------------------------------------------------------------------- -------------
HEALTH CARE--7.8%
-------------------------------------------------------------------------------------
2,000 American Home Products Corp. 116,000
-------------------------------------------------------------------------------------
2,000 Becton Dickinson & Co. 76,250
-------------------------------------------------------------------------------------
1,600 Bristol Myers Squibb Co. 87,400
-------------------------------------------------------------------------------------
2,550 US Healthcare, Inc. 102,638
------------------------------------------------------------------------------------- -------------
Total 382,288
------------------------------------------------------------------------------------- -------------
INDUSTRIAL MANUFACTURING--8.3%
-------------------------------------------------------------------------------------
2,400 General Electric Co. 119,100
-------------------------------------------------------------------------------------
</TABLE>
ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- ---------------------------------------------------------------------------------------------------
INDUSTRIAL MANUFACTURING--CONTINUED
-------------------------------------------------------------------------------------
1,200 *Litton Industries, Inc. $ 36,750
-------------------------------------------------------------------------------------
1,400 Loews Corp. 124,600
-------------------------------------------------------------------------------------
2,200 Textron, Inc. 123,200
------------------------------------------------------------------------------------- -------------
Total 403,650
------------------------------------------------------------------------------------- -------------
TECHNOLOGY--11.6%
-------------------------------------------------------------------------------------
3,400 General Motors Corp., Class E 119,425
-------------------------------------------------------------------------------------
1,500 Hewlett Packard Co. 117,750
-------------------------------------------------------------------------------------
2,400 Martin Marietta Corp. 104,400
-------------------------------------------------------------------------------------
2,000 Raytheon Co. 124,500
-------------------------------------------------------------------------------------
2,900 Rockwell International Corp. 103,312
------------------------------------------------------------------------------------- -------------
Total 569,387
------------------------------------------------------------------------------------- -------------
TRANSPORTATION--1.8%
-------------------------------------------------------------------------------------
3,600 Ryder Systems, Inc. 86,850
------------------------------------------------------------------------------------- -------------
UTILITIES--6.0%
-------------------------------------------------------------------------------------
1,100 American Telephone and Telegraph Corp. 59,950
-------------------------------------------------------------------------------------
2,100 Detroit Edison Co. 54,075
-------------------------------------------------------------------------------------
1,300 Duke Power Co. 46,800
-------------------------------------------------------------------------------------
2,000 Enron Corp. 61,000
-------------------------------------------------------------------------------------
3,000 MCI Communications Corp. 72,000
------------------------------------------------------------------------------------- -------------
Total 293,825
------------------------------------------------------------------------------------- -------------
TOTAL COMMON STOCKS (IDENTIFIED COST $4,504,435) 4,338,288
------------------------------------------------------------------------------------- -------------
CONVERTIBLE PREFERRED STOCKS--3.2%
- ---------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--1.3%
-------------------------------------------------------------------------------------
10,000 *RJR Nabisco Holdings, Conv. Pfd., 6.375% 63,750
------------------------------------------------------------------------------------- -------------
FINANCE--0.8%
-------------------------------------------------------------------------------------
2,000 Citicorp, Conv. Pfd., Series P, 8.25% 39,000
------------------------------------------------------------------------------------- -------------
</TABLE>
ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- -------------
CONVERTIBLE PREFERRED STOCKS--CONTINUED
- ---------------------------------------------------------------------------------------------------
INDUSTRIAL/MANUFACTURING--1.1%
-------------------------------------------------------------------------------------
4,000 *Westinghouse Electric Corp., Conv. Pfd., Series C, 9.00% $ 55,448
------------------------------------------------------------------------------------- -------------
TOTAL CONVERTIBLE PREFERRED STOCKS (IDENTIFIED COST $162,880) 158,198
------------------------------------------------------------------------------------- -------------
CONVERTIBLE SECURITIES--2.3%
- ---------------------------------------------------------------------------------------------------
TECHNOLOGY--2.3%
-------------------------------------------------------------------------------------
$ 50,000 Conner Peripherals, Inc., 6.50%, Conv., 3/1/2002 42,250
-------------------------------------------------------------------------------------
50,000 General Instrument Corp., 5.00%, Conv., 6/15/2000 68,500
------------------------------------------------------------------------------------- -------------
TOTAL CONVERTIBLE SECURITIES (IDENTIFIED COST $116,000) 110,750
------------------------------------------------------------------------------------- -------------
**REPURCHASE AGREEMENT--5.1%
- ---------------------------------------------------------------------------------------------------
250,000 J.P. Morgan Securities, Inc., 4.27%, dated 5/31/94, due 6/1/94
(at amortized cost) (Note 2B) 250,000
------------------------------------------------------------------------------------- -------------
TOTAL INVESTMENTS (IDENTIFIED COST $5,033,315) $ 4,857,236+
------------------------------------------------------------------------------------- -------------
</TABLE>
* Non-income producing securities.
** The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
+ The cost of investments for federal tax purposes amounts to $5,033,315. The
net unrealized depreciation of investments on a federal tax basis amounts to
$176,079, which is comprised of $80,316 appreciation and $256,395 depreciation
at May 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($4,890,034) at May 31, 1994.
(See Notes which are an integral part of the Financial Statements)
ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -----------------------------------------------------------------------------------------------------
Investments in securities, at value (Notes 2A and 2B)
(identified and tax cost $5,033,315) $ 4,857,236
- -----------------------------------------------------------------------------------------------------
Cash 2,985
- -----------------------------------------------------------------------------------------------------
Interest receivable 1,993
- -----------------------------------------------------------------------------------------------------
Dividends receivable 15,566
- -----------------------------------------------------------------------------------------------------
Receivable for investments sold 72,117
- -----------------------------------------------------------------------------------------------------
Receivable for Fund shares sold 9,535
- -----------------------------------------------------------------------------------------------------
Receivable from Adviser 39,055
- -----------------------------------------------------------------------------------------------------
Deferred expenses (Note 2F) 11,245
- ----------------------------------------------------------------------------------------------------- -----------
Total assets 5,009,732
- -----------------------------------------------------------------------------------------------------
LIABILITIES:
- -----------------------------------------------------------------------------------------------------
Payable for investments purchased $ 83,071
- ------------------------------------------------------------------------------------------
Accrued expenses 36,627
- ------------------------------------------------------------------------------------------ ---------
Total liabilities 119,698
- ----------------------------------------------------------------------------------------------------- -----------
NET ASSETS for 506,195 shares of beneficial interest outstanding $ 4,890,034
- ----------------------------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------------------
Paid-in capital $ 5,060,731
- -----------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments (176,079)
- -----------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (9,369)
- -----------------------------------------------------------------------------------------------------
Undistributed net investment income 14,751
- ----------------------------------------------------------------------------------------------------- -----------
Total Net Assets $ 4,890,034
- ----------------------------------------------------------------------------------------------------- -----------
NET ASSET VALUE, AND REDEMPTION PROCEEDS PER SHARE:
- -----------------------------------------------------------------------------------------------------
(net assets of $4,890,034 / 506,195 shares of beneficial interest outstanding) $9.66
- ----------------------------------------------------------------------------------------------------- -----------
COMPUTATION OF OFFERING PRICE:
- -----------------------------------------------------------------------------------------------------
(100/95.5 of $9.66)* $10.12
- ----------------------------------------------------------------------------------------------------- -----------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
STATEMENT OF OPERATIONS
PERIOD ENDED MAY 31, 1994*
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------------
Dividend income $ 33,547
- ---------------------------------------------------------------------------------------------------------
Interest income 8,942
- --------------------------------------------------------------------------------------------------------- ---------
Total income (Note 2C) 42,489
- ---------------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------------
Investment advisory fee** $ 10,610
- ----------------------------------------------------------------------------------------------
Trustees' fees 4,356
- ----------------------------------------------------------------------------------------------
Administrative personnel and services fees** 14,521
- ----------------------------------------------------------------------------------------------
Custodian fees** 6,020
- ----------------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses** 4,144
- ----------------------------------------------------------------------------------------------
Legal fees 1,525
- ----------------------------------------------------------------------------------------------
Printing and postage 3,775
- ----------------------------------------------------------------------------------------------
Portfolio accounting fees** 13,497
- ----------------------------------------------------------------------------------------------
Insurance premiums 1,851
- ----------------------------------------------------------------------------------------------
Distribution services fee** 3,537
- ----------------------------------------------------------------------------------------------
Miscellaneous 1,958
- ---------------------------------------------------------------------------------------------- ---------
Total expenses 65,794
- ----------------------------------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------------------------------
Waiver of investment advisory fee** $ 9,054
- -----------------------------------------------------------------------------------
Reimbursement of other operating expenses** 39,055 48,109
- ----------------------------------------------------------------------------------- --------- ---------
Net expenses 17,685
- --------------------------------------------------------------------------------------------------------- ---------
Net investment income 24,804
- --------------------------------------------------------------------------------------------------------- ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions (identified cost basis) (9,369)
- ---------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (176,079)
- --------------------------------------------------------------------------------------------------------- ---------
Net realized and unrealized gain (loss) on investments (185,448)
- --------------------------------------------------------------------------------------------------------- ---------
Change in net assets resulting from operations ($160,644)
- --------------------------------------------------------------------------------------------------------- ---------
</TABLE>
* For the period from February 14, 1994 (date of initial public investment) to
May 31, 1994 (unaudited).
** See Note 4.
(See Notes which are an integral part of the Financial Statements)
ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1994*
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------------------------------
Net investment income $ 24,804
- -----------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions ($9,369 net loss
as computed for federal income tax purposes) (Note 2D) (9,369)
- -----------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) on investments (176,079)
- ----------------------------------------------------------------------------------------------- -----------------
Change in net assets resulting from operations (160,644)
- ----------------------------------------------------------------------------------------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- -----------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (10,053)
- ----------------------------------------------------------------------------------------------- -----------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- -----------------------------------------------------------------------------------------------
Proceeds from sale of shares 5,050,728
- -----------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of dividends declared 10,053
- -----------------------------------------------------------------------------------------------
Cost of shares redeemed (50)
- ----------------------------------------------------------------------------------------------- -----------------
Change in net assets from Fund share transactions 5,060,731
- ----------------------------------------------------------------------------------------------- -----------------
Change in net assets 4,890,034
- -----------------------------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------------------------
Beginning of period --
- ----------------------------------------------------------------------------------------------- -----------------
End of period (including undistributed net investment income of $14,751) $ 4,890,034
- ----------------------------------------------------------------------------------------------- -----------------
</TABLE>
* For the period from February 14, 1994 (date of initial public investment) to
May 31, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Alexander Hamilton Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Trust consists of three diversified portfolios. The financial statements
included herein present only those of the Alexander Hamilton Equity Growth and
Income Fund (the "Fund"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--Listed equity securities, corporate bonds and other
fixed income securities are valued at the last sales price reported on
national securities exchanges. Unlisted securities and bonds are generally
valued at the price provided by an independent pricing service. Short-term
securities with remaining maturities of sixty days or less may be stated at
amortized cost, which approximates value.
B. REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System or to have segregated within the
custodian bank's vault, all securities held as collateral in support of
repurchase agreement investments. Additionally, procedures have been
established by the Fund to monitor on a daily basis, the market value of
each repurchase agreement's underlying collateral to ensure the value at
least equals the principal amount of the repurchase agreement, including
accrued interest.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions such as broker/dealers which are deemed
by the Fund's adviser to be creditworthy pursuant to guidelines established
by the Board of Trustees ("Trustees"). Risks may arise from the potential
inability of counterparties to honor the terms of the repurchase agreement.
Accordingly, the Fund could receive less than the repurchase price on the
sale of collateral securities.
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
Interest income and expenses are accrued daily. Bond premium and discount,
if applicable, are amortized as required by the Internal Revenue Code, as
amended ("Code").
ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
- --------------------------------------------------------------------------------
D. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its taxable income.
Accordingly, no provisions for federal tax are necessary.
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
F. DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering the shares, have been deferred and are being
amortized using the straight-line method over a period of five years from
the Fund's commencement date.
G. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1994*
<S> <C>
Shares sold 505,190
- -----------------------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 1,010
- -----------------------------------------------------------------------------------------------
Shares redeemed (5)
- ----------------------------------------------------------------------------------------------- -----------------
Net change resulting from Fund share transactions 506,195
- ----------------------------------------------------------------------------------------------- -----------------
</TABLE>
* For the period from February 14, 1994 (date of initial public investment) to
May 31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Alexander Hamilton Capital Management, Inc., the Fund's
investment adviser ("Adviser"), receives for its services an annual investment
advisory fee equal to 0.75 of 1% of the Fund's average daily net assets. The
Adviser may voluntarily choose to waive a portion of its fee and reimburse
certain operating expenses of the Fund. The Adviser can modify or terminate this
voluntary waiver and reimbursement at any time at its sole discretion. Under the
terms of a sub-advisory agreement between the Adviser and Federated Research,
Federated Research receives an annual fee of $125,000, plus one half of the
remaining advisory revenues.
ALEXANDER HAMILTON EQUITY GROWTH AND
INCOME FUND
- --------------------------------------------------------------------------------
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Trust
with certain administrative personnel and services. The fee is based on the
level of average aggregate daily net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
DISTRIBUTION PLAN--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended.
Under the terms of the Plan, the Fund will compensate Federated Securities Corp.
("FSC"), the principal distributor, from the net assets of the Fund to finance
activities intended to result in the sale of the Fund's shares. The Plan
provides that the Fund may incur distribution expenses up to 0.25 of 1% of the
average daily net assets of the Fund, annually, to compensate FSC.
TRANSFER AND DIVIDEND DISBURSING AGENT, ACCOUNTING AND CUSTODY FEES--Federated
Services Company ("FServ") serves as transfer agent and dividend disbursing
agent for the Fund. The fee is based on the size, type and number of accounts
and transactions made by shareholders.
FServ also maintains the Trust's accounting records. The fee is based on the
level of the Fund's average net assets for the period plus out-of-pocket
expenses.
State Street Bank and Trust Company is the Trust's custodian. The fee is based
on the level of the Fund's average net assets for the period plus out-of-pocket
expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses incurred by the Fund will be
borne initially by FAS and are estimated at $51,578. The Fund has agreed to
reimburse FAS for the organizational expenses during the five year period
following February 10, 1994 (date the Fund became effective).
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended
May 31, 1994 were as follows:
<TABLE>
<S> <C>
PURCHASES $ 5,182,273
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 389,589
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
George A. Cooke, Chairman George A. Cooke
Christopher Bancroft Chief Executive Officer
Frederick L. Blackmon Edward C. Gonzales
William H. T. Bush President and Treasurer
James T. Ponder Margaret P. Tessaro
Martha R. Seger Vice President and Assistant Treasurer
William E. Shelton Robert J. Davison
Vice President
J. Crilley Kelly
Secretary
David M. Di Rita
Assistant Secretary
Melissa A. Moore
Assistant Secretary
</TABLE>
Mutual funds are not obligations of or insured by any bank, nor are they insured
by the federal government or any of its agencies. Investment in these shares
involves risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus, which contains facts
concerning its objective and policies, management fees, expenses and other
information.
ALEXANDER HAMILTON GOVERNMENT INCOME FUND
(A PORTFOLIO OF ALEXANDER HAMILTON FUNDS)
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT AND SUPPLEMENT TO PROSPECTUS DATED FEBRUARY 10, 1994
A. Please delete the "Summary of Fund Expenses" table on page 1 and replace
it with the following table:
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................................................................... 4.50%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).................................................................... None
Contingent Deferred Sales Charge (as a percentage of original purchase price
or redemption proceeds, as applicable) (1)............................................................. 0.50%
Redemption Fee (as a percentage of amount redeemed, if applicable)....................................... None
Exchange Fee............................................................................................. None
ANNUAL FUND OPERATING EXPENSES*
(As a percentage of projected average net assets)
Management Fee (after waiver) (2)........................................................................ 0.12%
12b-1 Fee................................................................................................ 0.25%
Total Other Expenses (after expense reimbursement) (3)................................................... 0.63%
Total Fund Operating Expenses (4).................................................................. 1.00%
</TABLE>
(1) A contingent deferred sales charge of 0.50% applies only to shares which are
purchased with proceeds from redemptions of shares of an unaffiliated mutual
fund in which a sales load has been paid and which are redeemed within one
year of purchase. For a more complete description, see "Purchases with
Proceeds from Redemptions of Unaffiliated Investment Companies."
(2) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver of a portion of the management fee by the investment
adviser. The adviser can terminate this voluntary waiver at any time at its
sole discretion. The maximum management fee is 0.60%.
(3) Other expenses are estimated to be 2.09% absent the anticipated voluntary
reimbursement of certain other expenses by the adviser. The adviser can
terminate the voluntary reimbursement of expenses at any time at its sole
discretion.
(4) Total Fund operating expenses are estimated to be 2.94% absent the
anticipated voluntary waiver and voluntary reimbursement explained in
footnotes (2) and (3).
* Total Fund operating expenses are estimated based on average expenses
expected to be incurred during the period ending November 30, 1994. During
the course of this period, expenses may be more or less than the average
amount shown.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "TRUST INFORMATION" AND "HOW TO INVEST IN THE FUND."
Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
<S> <C> <C>
You would pay the following expenses on a $1,000 investment assuming
(1) 5% annual return and (2) redemption at the end of each time period.......................... $55 $75
You would pay the following expenses on the same investment, assuming no sales load when
purchasing shares of the Fund with proceeds from the redemption of unaffiliated mutual fund
shares.......................................................................................... $10 $32
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
B. Please insert the following "Financial Highlights" table as page 2
following the "Summary of Fund Expenses" and before the section entitled
"Highlights." In addition, please add the heading "Financial Highlights"
to the Table of Contents on page I following the heading "Summary of Fund
Expenses."
ALEXANDER HAMILTON GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED
NOVEMBER 30, 1994*
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
- ----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment income 0.16
- ----------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments (0.69)
- ---------------------------------------------------------------------------------------- ------------------------
Total from investment operations (0.53)
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.16)
- ---------------------------------------------------------------------------------------- ------------------------
NET ASSET VALUE, END OF PERIOD $ 9.31
- ---------------------------------------------------------------------------------------- ------------------------
TOTAL RETURN** (5.26%)
- ----------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------
Expenses 0.96%(a)
- ----------------------------------------------------------------------------------------
Net investment income 6.24%(a)
- ----------------------------------------------------------------------------------------
Expense waiver/reimbursement (b) 4.24%(a)
- ----------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $4,835
- ----------------------------------------------------------------------------------------
Portfolio turnover rate 77%
- ----------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from February 17, 1994 (date of initial
public investment) to May 31, 1994 (unaudited).
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(See Notes which are an integral part of the Financial Statements)
C. Please delete the sub-section entitled "Dollar Roll Transactions" on page
5. In addition, please delete the sub-heading from the Table of
Contents.
D. Please delete the last sentence of the first paragraph and the entire
second paragraph and add the following information to the sub-section
entitled "Dealer Concession" which begins on page 8:
"Such payments, which will be predicated upon the amount of Fund shares sold,
may take the form of cash or promotional incentives, such as payment of certain
expenses of qualified employees and their spouses to attend informational
meetings about the Fund or other special events at recreational facilities, or
items of material value. In some instances, these incentives will be made
available only to dealers whose employees have sold or may sell significant
amounts of shares."
E. Please insert the following "Other Payments to Financial Institutions"
sub-section following the sub-section entitled "Dealer Concessions" which
begins on page 8. In addition, please add the heading "Other Payments to
Financial Institutions" to the Table of Contents on page I following the
heading "Dealer Concessions."
"Other Payments to Financial Institutions. The distributor, the Adviser, or
their affiliates may also offer to pay a fee from their own assets to financial
institutions as financial assistance for providing substantial marketing and
sales support. The support may include initiating customer accounts, providing
sales literature, or participating in sales, educational and training seminars
(including those held at recreational facilities). Such assistance will be
predicated upon the amount of shares the financial institution sells or may sell
and/or upon the type and nature of sales or marketing support furnished by the
financial institution. Any payments made by the distributor may be reimbursed by
the Adviser or its affiliates.
F. Please insert the following information as the second paragraph of the
sub-section entitled "Purchases with Proceeds from Redemptions of
Unaffiliated Investment Companies" on page 10:
"A contingent deferred sales charge is charged in limited circumstances.
Shareholders who purchased shares with the proceeds of a redemption of shares of
an unaffiliated mutual fund sold with a sales charge or commission and which
were not distributed by the distributor will be charged a contingent deferred
sales charge by the Fund's distributor of .50 of 1% for redemptions made within
one year of purchase. The contingent deferred sales charge will be calculated
based upon the lesser of the original price of shares or the net asset value of
the shares when redeemed."
G. Please delete the first sentence of the section entitled "Redeeming
Shares" on page 12 and insert the following:
"The Fund purchases shares from you at their net asset value, less any
applicable contingent deferred sales charge, next determined after the transfer
agent receives the redemption request."
H. Please insert the following "Contingent Deferred Sales Charge" section
following the section entitled "Systematic Withdrawal Plan" on page 14. In
addition, please add the heading "Contingent Deferred Sales Charge" to the
Table of Contents immediately following the heading "Systematic Withdrawal
Plan."
"CONTINGENT DEFERRED SALES CHARGE
No contingent deferred sales charge will be imposed on shares acquired through
reinvestment of dividends or distributions of short-term or long-term capital
gains. Redemptions are deemed to have occurred in the following order: (i)
shares acquired through the reinvestment of dividends and long-term capital
gains; (ii) purchases of shares occurring more than one year before the date of
redemption; (iii) purchases of shares within the previous year without the use
of redemption proceeds as described above; and (iv) purchases of shares within
the previous year through the use of redemption proceeds as described above.
No contingent deferred sales charge will be imposed when a redemption results
from a tax-free return under the following circumstances: (i) a total or partial
distribution from a qualified retirement plan, other than an IRA, Keogh Plan, or
a custodial account, following retirement; (ii) a total or partial distribution
from an IRA, Keogh Plan, or a custodial account, after the beneficial owner
attains age 59-1/2; or (iii) from the death or permanent and total disability of
the beneficial owner. The exemption from the contingent deferred sales charge
for qualified plans, an IRA, Keogh Plan or a custodial account does not extend
to account transfers, rollovers, or other redemptions made for purposes of
reinvestment.
A contingent deferred sales charge will not be charged in connection with
exchanges in other Alexander Hamilton Funds or Treasury Cash Series portfolios
or in connection with redemptions by the Fund of accounts with low balances."
I. Please delete the second paragraph under the sub-section "Sub-Adviser's
Background" on page 16 and replace it with the following:
"Gary J. Madich has been the Fund's co-portfolio manager since July 26, 1994.
Mr. Madich joined Federated Investors in 1984 and has been a Senior Vice
President of the Fund's sub-adviser since 1993. Mr. Madich served as a Vice
President of the Fund's sub-adviser from 1988 until 1993. Mr. Madich is a
Chartered Financial Analyst and received his M.B.A. in Public Finance from the
University of Pittsburgh."
J. Please insert the following information as the last sentence of the
second paragraph of the section entitled "Voting Rights" which begins on
page 18:
"As of July 3, 1994, Alexander Hamilton Life Insurance Company may for certain
purposes be deemed to control the Fund because it is owner of record of certain
shares of the Fund."
K. Please delete the sentence immediately following the HYPOTHETICAL EXAMPLE
OF TOTAL RETURN on page 20 in the section entitled "Performance
Information" which begins on page 19 and insert the following:
"Performance information reflects the effect of the maximum sales load and other
similar non-recurring charges, such as the contingent deferred sales charge,
which, if excluded, would increase the total return and yield."
L. Please insert the following financial statements after the "Performance
Information" section which begins on page 19. In addition, please add the
heading "Financial Statements" to the Table of Contents immediately
following "Performance Information."
ALEXANDER HAMILTON GOVERNMENT INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- ---------------
LONG-TERM GOVERNMENT OBLIGATIONS--97.7%
- ------------------------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--77.2%
---------------------------------------------------------------------------------
$ 2,203,996 8.00%, 6/15/2023 $ 2,189,515
---------------------------------------------------------------------------------
1,596,295 7.50%, 1/15/2024 1,542,420
--------------------------------------------------------------------------------- ---------------
Total 3,731,935
--------------------------------------------------------------------------------- ---------------
U.S. TREASURY NOTES--20.5%
---------------------------------------------------------------------------------
1,000,000 5.50%, 4/30/96 991,470
--------------------------------------------------------------------------------- ---------------
TOTAL LONG-TERM GOVERNMENT OBLIGATIONS
(IDENTIFIED COST $4,959,381) 4,723,405
--------------------------------------------------------------------------------- ---------------
*REPURCHASE AGREEMENT--1.1%
- ------------------------------------------------------------------------------------------------
55,000 J.P. Morgan Securities, Inc., 4.27%, dated 5/31/94, due 6/1/94
(at amortized cost) (Note 2B) 55,000
--------------------------------------------------------------------------------- ---------------
TOTAL INVESTMENTS (IDENTIFIED COST, $5,014,381) $ 4,778,405+
--------------------------------------------------------------------------------- ---------------
</TABLE>
* The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
+ The cost of investments for federal tax purposes amounts to $5,014,381. The
net unrealized depreciation on investments on a federal tax basis amounts to
$235,976, which is comprised of $0 appreciation and $235,976 depreciation at
May 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($4,834,914) at
May 31, 1994.
(See Notes which are an integral part of the Financial Statements)
ALEXANDER HAMILTON GOVERNMENT INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value (Notes 2A & 2B)
(identified and tax cost $5,014,381) $ 4,778,405
- ---------------------------------------------------------------------------------------------------
Cash 4,595
- ---------------------------------------------------------------------------------------------------
Interest receivable 29,160
- ---------------------------------------------------------------------------------------------------
Deferred expenses (Note 2F) 40,415
- --------------------------------------------------------------------------------------------------- -------------
Total assets 4,852,575
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Dividends payable $ 490
- ----------------------------------------------------------------------------------------
Accrued expenses 17,171
- ---------------------------------------------------------------------------------------- ---------
Total liabilities 17,661
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 519,485 shares of beneficial interest outstanding $ 4,834,914
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------------------------
Paid-in capital $ 5,189,625
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments (235,976)
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (118,735)
- --------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 4,834,914
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, AND REDEMPTION PROCEEDS PER SHARE:
- ---------------------------------------------------------------------------------------------------
(net assets of $4,834,914 / 519,485 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $9.31
- --------------------------------------------------------------------------------------------------- -------------
COMPUTATION OF OFFERING PRICE (100/95.5 OF $9.31)* $9.75
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
* SEE "WHAT SHARES COST" IN THE PROSPECTUS.
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
ALEXANDER HAMILTON GOVERNMENT INCOME FUND
STATEMENT OF OPERATIONS
PERIOD ENDED MAY 31, 1994*
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest income (Note 2C) $ 98,972
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------
Investment advisory fee** $ 7,921
- ----------------------------------------------------------------------------------------
Trustees' fees 4,213
- ----------------------------------------------------------------------------------------
Administrative personnel and services fees** 13,562
- ----------------------------------------------------------------------------------------
Custodian fees** 10,137
- ----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses** 5,479
- ----------------------------------------------------------------------------------------
Legal fees 2,142
- ----------------------------------------------------------------------------------------
Printing and postage 4,494
- ----------------------------------------------------------------------------------------
Portfolio accounting fees** 15,930
- ----------------------------------------------------------------------------------------
Insurance premiums 1,931
- ----------------------------------------------------------------------------------------
Distribution services fee** 3,300
- ----------------------------------------------------------------------------------------
Miscellaneous 2,470
- ---------------------------------------------------------------------------------------- ---------
Total expenses 71,579
- ----------------------------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------------------------
Waiver of investment advisory fee** $ 6,337
- -----------------------------------------------------------------------------
Reimbursement of other operating expenses** 52,041 58,378
- ----------------------------------------------------------------------------- --------- ---------
Net expenses 13,201
- --------------------------------------------------------------------------------------------------- -----------
Net investment income 85,771
- --------------------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions (identified cost basis) (118,735)
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (235,976)
- --------------------------------------------------------------------------------------------------- -----------
Net realized and unrealized gain (loss) on investments (354,711)
- --------------------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations ($ 268,940)
- --------------------------------------------------------------------------------------------------- -----------
</TABLE>
* For the period from November 23, 1993 (start of business) to May 31, 1994
(unaudited).
** See Note 4.
(See Notes which are an integral part of the Financial Statements)
ALEXANDER HAMILTON GOVERNMENT INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1994*
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------------------------------
Net investment income $ 85,771
- -----------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions ($118,735 net loss
as computed for federal income tax purposes) (Note 2D) (118,735)
- -----------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) on investments (235,976)
- ----------------------------------------------------------------------------------------------- -----------------
Change in net assets resulting from operations (268,940)
- ----------------------------------------------------------------------------------------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)--
- -----------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (85,771)
- ----------------------------------------------------------------------------------------------- -----------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- -----------------------------------------------------------------------------------------------
Proceeds from sales of shares 5,106,200
- -----------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of dividends declared 83,475
- -----------------------------------------------------------------------------------------------
Cost of shares redeemed (50)
- ----------------------------------------------------------------------------------------------- -----------------
Change in net assets from Fund share transactions 5,189,625
- ----------------------------------------------------------------------------------------------- -----------------
Change in net assets 4,834,914
- -----------------------------------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------------------------------
Beginning of period --
- ----------------------------------------------------------------------------------------------- -----------------
End of period $ 4,834,914
- ----------------------------------------------------------------------------------------------- -----------------
</TABLE>
* For the period from November 23, 1993 (start of business) to May 31, 1994
(unaudited).
(See Notes which are an integral part of the Financial Statements)
ALEXANDER HAMILTON GOVERNMENT INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Alexander Hamilton Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Trust consists of three diversified portfolios. The financial statements
included herein present only those of the Alexander Hamilton Government Income
Fund (the "Fund"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--U.S. government obligations are generally valued at
the mean between the over-the-counter bid and asked prices as furnished by
an independent pricing service. Short-term securities with remaining
maturities of sixty days or less may be stated at amortized cost, which
approximates value.
B. REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System or to have segregated within the
custodian bank's vault, all securities held as collateral in support of
repurchase agreement investments. Additionally, procedures have been
established by the Fund to monitor on a daily basis, the market value of
each repurchase agreement's underlying collateral to ensure the value at
least equals the principal amount of the repurchase agreement, including
accrued interest.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions such as broker/dealers which are deemed
by the Fund's adviser to be creditworthy pursuant to guidelines established
by the Board of Trustees ("Trustees"). Risks may arise from the potential
inability of counterparties to honor the terms of the repurchase agreement.
Accordingly, the Fund could receive less than the repurchase price on the
sale of collateral securities.
C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount are amortized as required by
the Internal Revenue Code, as amended ("Code"). Distributions to
shareholders are recorded on the ex-dividend date.
D. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its taxable income.
Accordingly, no provisions for federal tax are necessary.
ALEXANDER HAMILTON GOVERNMENT INCOME FUND
- --------------------------------------------------------------------------------
E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
F. DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering the shares, have been deferred and are being
amortized using the straight-line method over a period of five years from
the Fund's commencement date.
G. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1994*
<S> <C>
Shares sold 510,631
- -----------------------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 8,859
- -----------------------------------------------------------------------------------------------
Shares redeemed (5)
- ----------------------------------------------------------------------------------------------- -----------------
Net change resulting from Fund share transactions 519,485
- ----------------------------------------------------------------------------------------------- -----------------
</TABLE>
* For the period from November 23, 1993 (start of business) to May 31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Alexander Hamilton Capital Management, Inc., the Fund's
investment adviser ("Adviser"), receives for its services an annual investment
advisory fee equal to 0.60 of 1% of the Fund's average daily net assets. The
Adviser may voluntarily choose to waive a portion of its fee and reimburse
certain operating expenses of the Fund. The Adviser can modify or terminate this
voluntary waiver and reimbursement at any time at its sole discretion. Under the
terms of a sub-advisory agreement between the Adviser and Federated Research,
Federated Research receives an annual fee of $125,000, plus one half of the
remaining advisory revenues.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Trust
with certain administrative personnel and services. The fee is based on the
level of average aggregate daily net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
DISTRIBUTION PLAN--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended.
Under the terms of the Plan, the Fund will
ALEXANDER HAMILTON GOVERNMENT INCOME FUND
- --------------------------------------------------------------------------------
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to 0.25 of 1% of the average daily net assets of the Fund, annually,
to compensate FSC.
TRANSFER AND DIVIDEND DISBURSING AGENT, ACCOUNTING AND CUSTODY FEES--Federated
Services Company ("FServ") serves as transfer agent and dividend disbursing
agent for the Fund. The fee is based on the size, type and number of accounts
and transactions made by shareholders.
FServ also maintains the Trust's accounting records. The fee is based on the
level of the Fund's average net assets for the period plus out-of-pocket
expenses.
State Street Bank and Trust Company is the Trust's custodian. The fee is based
on the level of the Fund's average net assets for the period plus out-of-pocket
expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses incurred by the Fund will be
borne initially by FAS and are estimated at $54,642. The Fund has agreed to
reimburse FAS for the organizational expenses during the five year period
following February 10, 1994 (date the Fund became effective).
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended May 31, 1994 were as follows:
<TABLE>
<S> <C>
PURCHASES $ 8,408,859
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 3,330,742
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
M. Please delete the "Statement of Assets and Liabilities" and "Report of
Independent Auditors" appearing on pages 25 and 26.
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
George A. Cooke George A. Cooke
Chairman Chief Executive Officer
Christopher Bancroft Edward C. Gonzales
Frederick L. Blackmon President and Treasurer
William H. T. Bush Margaret P. Tessaro
James T. Ponder Vice President and Assistant Treasurer
Martha R. Seger Robert J. Davison
William E. Shelton Vice President
J. Crilley Kelly
Secretary
David M. Di Rita
Assistant Secretary
Melissa A. Moore
Assistant Secretary
</TABLE>
Mutual funds are not obligations of or insured by any bank, nor are they insured
by the federal government or any of its agencies. Investment in these shares
involves risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus, which contains facts
concerning its objective and policies, management fees, expenses and other
information.
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
(A PORTFOLIO OF ALEXANDER HAMILTON FUNDS)
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT AND SUPPLEMENT TO PROSPECTUS DATED FEBRUARY 10, 1994
A. Please delete the "Summary of Fund Expenses" table on page 1 and replace
it with the following table:
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................................................................... 4.50%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price).................................................................... None
Contingent Deferred Sales Charge (as a percentage of original purchase price
or redemption proceeds, as applicable) (1)............................................................. 0.50%
Redemption Fee (as a percentage of amount redeemed, if applicable)....................................... None
Exchange Fee............................................................................................. None
ANNUAL FUND OPERATING EXPENSES*
(As a percentage of projected average net assets)
Management Fee (after waiver) (2)........................................................................ 0.14%
12b-1 Fee................................................................................................ 0.25%
Total Other Expenses (after expense reimbursement) (3)................................................... 0.61%
Total Fund Operating Expenses (4).................................................................. 1.00%
</TABLE>
(1) A contingent deferred sales charge of 0.50% applies only to shares which are
purchased with proceeds from redemptions of shares of an unaffiliated mutual
fund in which a sales load has been paid and which are redeemed within one
year of purchase. For a more complete description, see "Purchases with
Proceeds from Redemptions of Unaffiliated Investment Companies."
(2) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver of a portion of the management fee by the investment
adviser. The adviser may terminate this voluntary waiver at any time at its
sole discretion. The maximum allowable management fee is 0.60%.
(3) Other expenses are estimated to be 2.14% absent the anticipated voluntary
reimbursements of certain other expenses by the adviser. The adviser can
terminate the voluntary reimbursement of expenses at any time at its sole
discretion.
(4) Total Fund operating expenses are estimated to be 2.99% absent the
anticipated voluntary waiver and voluntary reimbursement explained in
footnotes (2) and (3).
* Total Fund operating expenses are estimated based on average expenses
expected to be incurred during the period ending November 30, 1994. During
the course of this period, expenses may be more or less than the average
amount shown.
THE PURPOSE OF THIS TABLE IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT A SHAREHOLDER OF THE FUND WILL BEAR, EITHER
DIRECTLY OR INDIRECTLY. FOR MORE COMPLETE DESCRIPTIONS OF THE VARIOUS COSTS AND
EXPENSES, SEE "TRUST INFORMATION" AND "HOW TO INVEST IN THE FUND."
Wire-transferred redemptions of less than $5,000 may be subject to additional
fees.
<TABLE>
<CAPTION>
EXAMPLE 1 year 3 years
<S> <C> <C>
You would pay the following expenses on a $1,000 investment assuming
(1) 5% annual return and (2) redemption at the end of each time period.......................... $55 $75
You would pay the following expenses on the same investment, assuming no sales load when
purchasing shares of the Fund with proceeds from the redemption of unaffiliated mutual fund
shares.......................................................................................... $10 $32
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
B. Please insert the following "Financial Highlights" table as page 2
following the "Summary of Fund Expenses" and before the section entitled
"Highlights." In addition, please add the heading "Financial Highlights"
to the Table of Contents on page I following the heading "Summary of Fund
Expenses."
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED
NOVEMBER 30, 1994*
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
- ----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------------------------
Net investment income 0.11
- ----------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.71)
- ---------------------------------------------------------------------------------------- ------------------------
Total from investment operations (0.60)
- ----------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (0.11)
- ---------------------------------------------------------------------------------------- ------------------------
NET ASSET VALUE, END OF PERIOD $ 9.29
- ---------------------------------------------------------------------------------------- ------------------------
TOTAL RETURN** (6.00)
- ----------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------------------------
Expenses 100%(a)
- ----------------------------------------------------------------------------------------
Net investment income 4.85%(a)
- ----------------------------------------------------------------------------------------
Expense waiver/reimbursement (b) 7.42%(a)
- ----------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $5,091
- ----------------------------------------------------------------------------------------
Portfolio turnover rate 21%
- ----------------------------------------------------------------------------------------
</TABLE>
* Reflects operations for the period from March 2, 1994 (date of initial
public investment) to May 31, 1994 (unaudited).
** Based on net asset value which does not reflect the sales load or contingent
deferred sales charge, if applicable.
(a) Computed on an annualized basis.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above (Note 4).
(See Notes which are an integral part of the Financial Statements)
C. Please delete the last sentence of the first paragraph and the entire
second paragraph and add the following information to the sub-section
entitled "Dealer Concession" on page 11:
"Such payments, which will be predicated upon the amount of Fund shares sold,
may take the form of cash or promotional incentives, such as payment of certain
expenses of qualified employees and their spouses to attend informational
meetings about the Fund or other special events at recreational facilities, or
items of material value. In some instances, these incentives will be made
available only to dealers whose employees have sold or may sell significant
amounts of shares."
D. Please insert the following ]"Other Payments to Financial Institutions"
sub-section following the sub-section entitled "Dealer Concessions" on
page 11. In addition, please add the heading "Other Payments to Financial
Institutions" to the Table of Contents on page I following the heading
"Dealer Concessions."
"OTHER PAYMENTS TO FINANCIAL INSTITUTIONS. The distributor, the Adviser, or
their affiliates may also offer to pay a fee from their own assets to financial
institutions as financial assistance for providing substantial marketing and
sales support. The support may include initiating customer accounts, providing
sales literature, or participating in sales, educational and training seminars
(including those held at recreational facilities). Such assistance will be
predicated upon the amount of shares the financial institution sells or may sell
and/or upon the type and nature of sales or marketing support furnished by the
financial institution. Any payments made by the distributor may be reimbursed by
the Adviser or its affiliates."
E. Please insert the following information as the second paragraph of the
sub-section entitled "Purchases with Proceeds from Redemptions of
Unaffiliated Investment Companies" on page 12:
"A contingent deferred sales charge is charged in limited circumstances.
Shareholders who purchased shares with the proceeds of a redemption of shares of
an unaffiliated mutual fund sold with a sales charge or commission and which
were not distributed by the distributor will be charged a contingent deferred
sales charge by the Fund's distributor of .50 of 1% for redemptions made within
one year of purchase. The contingent deferred sales charge will be calculated
based upon the lesser of the original price of shares or the net asset value of
the shares when redeemed."
F. Please delete the first sentence of the section entitled "Redeeming
Shares" on page 15 and insert the following:
"The Fund purchases shares from you at their net asset value, less any
applicable contingent deferred sales charge, next determined after the transfer
agent receives the redemption request."
G. Please insert the following "Contingent Deferred Sales Charge" section
following the section entitled "Systematic Withdrawal Plan" on page 16. In
addition, please add the heading "Contingent Deferred Sales Charge" to the
Table of Contents immediately following the heading "Systematic Withdrawal
Plan."
"CONTINGENT DEFERRED SALES CHARGE
No contingent deferred sales charge will be imposed on shares acquired through
reinvestment of dividends or distributions of short-term or long-term capital
gains. Redemptions are deemed to have occurred in the following order: (i)
shares acquired through the reinvestment of dividends and long-term capital
gains; (ii) purchases of shares occurring more than one year before the date of
redemption; (iii) purchases of shares within the previous year without the use
of redemption proceeds as described above; and (iv) purchases of shares within
the previous year through the use of redemption proceeds as described above.
No contingent deferred sales charge will be imposed when a redemption results
from a tax-free return under the following circumstances: (i) a total or partial
distribution from a qualified retirement plan, other than an IRA, Keogh Plan, or
a custodial account, following retirement; (ii) a total or partial distribution
from an IRA, Keogh Plan, or a custodial account, after the beneficial owner
attains age 59-1/2; or (iii) from the death or permanent and total disability of
the beneficial owner. The exemption from the contingent deferred sales charge
for qualified plans, an IRA, Keogh Plan or a custodial account does not extend
to account transfers, rollovers, or other redemptions made for purposes of
reinvestment.
A contingent deferred sales charge will not be charged in connection with
exchanges in other Alexander Hamilton Funds or Treasury Cash Series portfolios
or in connection with redemptions by the Fund of accounts with low balances."
H. Please delete the second sentence of the second paragraph in the
sub-section entitled "Sub-Adviser's Background" which begins on page 18
and insert the following information in its place:
"Mr. Conley joined Federated Investors in 1979 and has been a Vice President of
the Fund's sub-adviser since 1982."
I. Please insert the following information as the last sentence of the
second paragraph of the section entitled "Shareholder Information" on
page 21:
"As of July 3, 1994, Alexander Hamilton Life Insurance Company may for certain
purposes be deemed to control the Fund because it is owner of record of certain
shares of the Fund."
J. Please delete the sentence immediately following the HYPOTHETICAL EXAMPLE
OF TOTAL RETURN on page 25 in the section entitled "Performance
Information" which begins on page 22 and insert the following:
"Performance information reflects the effect of the maximum sales load and other
similar non-recurring charges, such as the contingent deferred sales charge,
which, if excluded, would increases the total return and yield."
K. Please insert the following financial statements after the "Performance
Information" section on page 22. In addition, please add the heading
"Financial Statements" to the Table of Contents immediately before
"Addresses."
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT ISSUE OR S&P* VALUE
<C> <S> <C> <C>
- ----------- ------------------------------------------------------------------------- ---------- -------------
SHORT-TERM MUNICIPAL SECURITIES--7.8%
- --------------------------------------------------------------------------------------
KENTUCKY--3.9%
-------------------------------------------------------------------------
$ 200,000 Kentucky State Pollution Abatement & Water Resource Finance Authority,
Daily VRDNs (Toyota Motors Co.)/(Subject to AMT) A-1+ $ 200,000
------------------------------------------------------------------------- -------------
TEXAS--3.9%
-------------------------------------------------------------------------
200,000 Harris County, TX, IDA Daily VRDNs (Yokohama Tire Corp.)/ (Subject to
AMT)/(Industrial Bank of Japan Ltd. LOC) P-1 200,000
------------------------------------------------------------------------- -------------
TOTAL SHORT-TERM MUNICIPAL SECURITIES (AT AMORTIZED COST) 400,000
------------------------------------------------------------------------- -------------
LONG-TERM MUNICIPAL SECURITIES--99.3%
- --------------------------------------------------------------------------------------
ALABAMA--3.5%
-------------------------------------------------------------------------
200,000 Courtland, AL, IDR 5.90% Solid Waste Disposal Revenue
Refunding Bonds (Champion International), 2/1/2017 Baa 178,442
------------------------------------------------------------------------- -------------
CALIFORNIA--3.8%
-------------------------------------------------------------------------
200,000 Santa Cruz, CA, 6.25% Sewer Secondary Wastewater Treatment Revenue Bonds
(Series C), 11/1/2023 A 195,774
------------------------------------------------------------------------- -------------
DISTRICT OF COLUMBIA--4.0%
-------------------------------------------------------------------------
200,000 District of Columbia Hospital, 7.125% Revenue Refunding Bonds
(Midlantic-Washington Hospital Center), 8/15/2019 Baa1 205,546
------------------------------------------------------------------------- -------------
FLORIDA--7.5%
-------------------------------------------------------------------------
200,000 Jacksonville, FL, IDA 6.25% Health Facilities Revenue Bonds (National
Benevolent Association-Cypress), 12/1/2023 Baa1 187,972
-------------------------------------------------------------------------
</TABLE>
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT ISSUE OR S&P* VALUE
<C> <S> <C> <C>
- ----------- ------------------------------------------------------------------------- ---------- -------------
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
FLORIDA--CONTINUED
-------------------------------------------------------------------------
$ 200,000 Palm Beach County, FL, 6.30% Health Facility Authority Revenue Bonds
(Good Samaritan Health System), 10/1/2022 A- $ 192,382
------------------------------------------------------------------------- -------------
Total 380,354
------------------------------------------------------------------------- -------------
GEORGIA--3.8%
-------------------------------------------------------------------------
200,000 Fulco, GA Hospital Authority, 6.375% Revenue Anticipation Certificates
(Georgia Baptist Health Care), 9/1/2022 A 193,500
------------------------------------------------------------------------- -------------
ILLINOIS--3.9%
-------------------------------------------------------------------------
200,000 Illinois Health Facilities Authority, 7.00% Revenue Bonds
(Trinity Medical Center), 7/1/2012 Baa 199,468
------------------------------------------------------------------------- -------------
INDIANA--3.9%
-------------------------------------------------------------------------
200,000 Indiana State, Health Facilities Financing Authority, 6.625% Revenue
Bonds (Floyd Memorial Hospital Project), 2/15/2022 A 200,146
------------------------------------------------------------------------- -------------
LOUISIANA--8.2%
-------------------------------------------------------------------------
200,000 Lake Charles, LA, 7.75% Harbor & Term District Port Facilities Revenue
Bonds (Trunkline Long Co. Project-Panhandle
Eastern Co.), 8/15/2022 Ba1 214,536
-------------------------------------------------------------------------
200,000 St. Charles Parish, LA, 7.00% Solid Waste Disposal Revenue Bonds
(Louisiana Power & Light)/(Subject to AMT), 12/1/2022 Baa2 202,546
------------------------------------------------------------------------- -------------
Total 417,082
------------------------------------------------------------------------- -------------
MARYLAND--4.0%
-------------------------------------------------------------------------
200,000 Maryland State Community Development Administration, 6.70% Multi Family
Housing Revenue Bonds, 5/15/2027 Aa 202,304
------------------------------------------------------------------------- -------------
MASSACHUSETTS--3.8%
-------------------------------------------------------------------------
200,000 Massachusetts State, 6.50% Health and Education Facilities Authority
Revenue Bonds (Series B)/(Holyoke Hospital), 7/1/2015 Baa1 191,650
------------------------------------------------------------------------- -------------
MINNESOTA--3.9%
-------------------------------------------------------------------------
200,000 Minnesota State, HFA Single Family Revenue Bonds, 6.50% (Subject to AMT),
1/1/2026 Aa 197,082
------------------------------------------------------------------------- -------------
</TABLE>
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT ISSUE OR S&P* VALUE
<C> <S> <C> <C>
- ----------- ------------------------------------------------------------------------- ---------- -------------
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
NORTH CAROLINA--4.0%
-------------------------------------------------------------------------
$ 200,000 Martin County, NC, Industrial Facilities & Pollution Financing Authority,
6.80% Solid Waste Disposal Revenue Bond (Weyerhaeuser Co.)/(Subject to
AMT), 5/1/2024 A2 $ 203,248
------------------------------------------------------------------------- -------------
OKLAHOMA--13.7%
-------------------------------------------------------------------------
500,000 Jackson County, OK, Memorial Hospital Authority, 7.30% Revenue Bonds
(Jackson County Memorial Hospital), 8/1/2015 BBB- 496,680
-------------------------------------------------------------------------
200,000 Tulsa, OK, 7.60% Municipal Airport Trust Revenue Bonds
(American Airlines)/(Subject to AMT), 12/1/2030 Baa2 199,964
------------------------------------------------------------------------- -------------
Total 696,644
------------------------------------------------------------------------- -------------
PENNSYLVANIA--11.7%
-------------------------------------------------------------------------
200,000 Latrobe, PA, IDA, 6.75% College Revenue Bonds (Series 1994)/ (St. Vincent
College Project), 5/1/2024 Baa1 196,166
-------------------------------------------------------------------------
200,000 Pennsylvania State, HFA Single Family Mortgage Revenue Bonds, 6.875%
(Series 1994-39B)/(Subject to AMT), 10/1/2024 Aa 201,342
-------------------------------------------------------------------------
200,000 Warren County, PA, Hospital Authority, 7.00% Revenue Bonds (Series
1994)/(Warren General Hospital Project), 4/1/2019 BBB+ 199,108
------------------------------------------------------------------------- -------------
Total 596,616
------------------------------------------------------------------------- -------------
TENNESSEE--4.0%
-------------------------------------------------------------------------
200,000 Memphis-Shelby County, TN, 6.75% Airport Revenue Bonds (Federal Express
Corp.), 9/1/2012 Baa3 201,110
------------------------------------------------------------------------- -------------
TEXAS--4.0%
-------------------------------------------------------------------------
200,000 Travis County, TX, HFC SFM Revenue Bonds, 7.10% (GNMA & FNMA Mortgage
Backed Securities)/(Subject to AMT)/(GNMA/ FNMA Guaranty), 10/1/2027 AAA 203,474
------------------------------------------------------------------------- -------------
VIRGINIA--11.6%
-------------------------------------------------------------------------
200,000 Isle Wight County, VA, IDA 6.55% Solid Waste Disposal (Union Camp
Corp.)/(Subject to AMT), 4/1/2024 A-1 201,284
-------------------------------------------------------------------------
</TABLE>
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT
RATING:
PRINCIPAL MOODY'S
AMOUNT ISSUE OR S&P* VALUE
<C> <S> <C> <C>
- ----------- ------------------------------------------------------------------------- ---------- -------------
LONG-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
VIRGINIA--CONTINUED
-------------------------------------------------------------------------
$ 200,000 Peninsula Ports Authority of Virginia, 7.00% Health Care Facilities
Revenue Refunding Bonds (Series 1994)/(Mary Immaculate Project), 8/1/2017 BBB+ $ 198,012
-------------------------------------------------------------------------
200,000 West Point, VA, IDA 6.375% Solid Waste Disposal Revenue Bonds (Series
A)/(Chesapeake Corp. Project)/(Subject to AMT), 3/1/2019 Baa3 192,404
------------------------------------------------------------------------- -------------
Total 591,700
------------------------------------------------------------------------- -------------
TOTAL LONG-TERM MUNICIPAL SECURITIES (IDENTIFIED COST
$5,064,452) 5,054,140
------------------------------------------------------------------------- -------------
TOTAL LNVESTMENTS (IDENTIFIED COST $5,464,452) $ 5,454,140+
------------------------------------------------------------------------- -------------
</TABLE>
+ The cost of investments for federal tax purposes amounts to $5,464,452. The
net unrealized depreciation of investments on a federal tax basis amounts to
$10,312, which is comprised of $35,590 appreciation and $45,902 depreciation
at May 31, 1994.
Note: The categories of investments are shown as a percentage of net assets
($5,090,763) at May 31, 1994.
* Please refer to the Statement of Additional Information for an
explanation of the credit ratings.
The following abbreviations are used in this portfolio.
<TABLE>
<S> <C>
AMT--Alternative Minimum Tax IDA--Industrial Development Authority
FNMA--Federal National Mortgage Association IDR--Industrial Development Revenue
GNMA--Government National Mortgage LOC--Letter of Credit
Association SFM--Single Family Mortgage
HFA--Housing Finance Authority VRDNs--Variable Rate Demand Notes
HFC--Housing Finance Corp.
</TABLE>
(See Notes which are an integral part of the Financial Statements)
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value (Note 2A) (identified and tax cost $5,464,452) $ 5,454,140
- ---------------------------------------------------------------------------------------------------
Cash 35,670
- ---------------------------------------------------------------------------------------------------
Interest receivable 81,426
- ---------------------------------------------------------------------------------------------------
Receivable for investments sold 197,232
- ---------------------------------------------------------------------------------------------------
Receivable from Adviser 43,778
- ---------------------------------------------------------------------------------------------------
Deferred expenses (Note 2E) 17,497
- --------------------------------------------------------------------------------------------------- -------------
Total assets 5,829,743
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Payable for investments purchased $ 694,705
- --------------------------------------------------------------------------------------
Dividends payable 133
- --------------------------------------------------------------------------------------
Accrued expenses 44,142
- -------------------------------------------------------------------------------------- -----------
Total liabilities 738,980
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 548,202 shares of beneficial interest outstanding $ 5,090,763
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------------------------
Paid-in capital $ 5,141,115
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) on investments (10,312)
- ---------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments (40,040)
- --------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 5,090,763
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, AND REDEMPTION PROCEEDS PER SHARE:
(net assets of $5,090,763 / 548,202 shares of beneficial interest outstanding) $9.29
- --------------------------------------------------------------------------------------------------- -------------
Computation of Offering Price (100/95.5 of $9.29)* $9.73
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
* See "What Shares Cost" in the prospectus.
(See Notes which are an integral part of the Financial Statements)
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
STATEMENT OF OPERATIONS
PERIOD ENDED MAY 31, 1994*
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest income (Note 2B) $ 36,791
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee** $ 3,775
- -----------------------------------------------------------------------------------------
Trustees' fees 3,806
- -----------------------------------------------------------------------------------------
Administrative personnel and services fees** 11,644
- -----------------------------------------------------------------------------------------
Custodian fees** 5,289
- -----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses** 4,155
- -----------------------------------------------------------------------------------------
Legal fees 1,935
- -----------------------------------------------------------------------------------------
Printing and postage 4,060
- -----------------------------------------------------------------------------------------
Portfolio accounting fees** 13,535
- -----------------------------------------------------------------------------------------
Insurance premiums 1,744
- -----------------------------------------------------------------------------------------
Distribution services fee** 1,573
- -----------------------------------------------------------------------------------------
Miscellaneous 1,450
- ----------------------------------------------------------------------------------------- ---------
Total expenses 52,966
- -----------------------------------------------------------------------------------------
Deduct--
- -----------------------------------------------------------------------------------------
Waiver of investment advisory fee** $ 2,895
- ------------------------------------------------------------------------------
Reimbursement of other operating expenses** 43,778 46,673
- ------------------------------------------------------------------------------ --------- ---------
Net expenses 6,293
- ---------------------------------------------------------------------------------------------------- ----------
Net investment income 30,498
- ---------------------------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ----------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions (identified cost basis) (40,040)
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments (10,312)
- ---------------------------------------------------------------------------------------------------- ----------
Net realized and unrealized gain (loss) on investments (50,352)
- ---------------------------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations ($19,854)
- ---------------------------------------------------------------------------------------------------- ----------
</TABLE>
*For the period from March 2, 1994 (date of initial public investment) to May
31, 1994 (unaudited).
**See Note 4.
(See Notes which are an integral part of the Financial Statements)
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 30, 1994*
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------------------------------
Net investment income $ 30,498
- ----------------------------------------------------------------------------------------------
Net realized gain (loss) on investment transactions ($40,040 net loss as
computed for federal income tax purposes)(Note 2C) (40,040)
- ----------------------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) on investments (10,312)
- ---------------------------------------------------------------------------------------------- ------------------
Change in net assets resulting from operations (19,854)
- ---------------------------------------------------------------------------------------------- ------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2B)--
- ----------------------------------------------------------------------------------------------
Dividends to shareholders from net investment income (30,498)
- ---------------------------------------------------------------------------------------------- ------------------
FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)--
- ----------------------------------------------------------------------------------------------
Proceeds from sale of shares 5,111,050
- ----------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of dividends declared 30,365
- ----------------------------------------------------------------------------------------------
Cost of shares redeemed (300)
- ---------------------------------------------------------------------------------------------- ------------------
Change in net assets from Fund share transactions 5,141,115
- ---------------------------------------------------------------------------------------------- ------------------
Change in net assets 5,090,763
- ----------------------------------------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------------------------------------
Beginning of period --
- ---------------------------------------------------------------------------------------------- ------------------
End of period $ 5,090,763
- ---------------------------------------------------------------------------------------------- ------------------
* For the period from March 2, 1994 (date of initial public investment) to May 31, 1994 (unaudited).
(See Notes which are an integral part of the Financial Statements)
</TABLE>
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1994 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Alexander Hamilton Funds (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Trust consists of three diversified portfolios. The financial statements
included herein present only those of the Alexander Hamilton Municipal Income
Fund (the "Fund"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
A. INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service taking into consideration yield, liquidity, risk, credit, quality,
coupon, maturity, type of issue, and any other factors or market data it
deems relevant in determining valuations for normal institutional size
trading units of debt securities. The independent pricing service does not
rely exclusively on quoted prices. Short-term securities with remaining
maturities of sixty days or less may be stated at amortized cost, which
approximates value. Investments in other regulated investment companies are
valued at net asset value.
B. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount are amortized as required by
the Internal Revenue Code, as amended ("Code"). Distributions to
shareholders are recorded on the ex-dividend date.
C. FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its taxable income.
Accordingly, no provisions for federal tax are necessary.
D. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
E. DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering the shares, have been deferred and are being
amortized using the straight line method over a period of five years from
the Fund's commencement date.
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
F. OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
MAY 31, 1994*
<S> <C>
- ---------------------------------------------------------------------------------------------- ------------------
Shares sold 544,959
- ----------------------------------------------------------------------------------------------
Shares issued to shareholders in payment of dividends declared 3,273
- ----------------------------------------------------------------------------------------------
Shares redeemed (30)
- ---------------------------------------------------------------------------------------------- ------------------
Net change resulting from Fund share transactions 548,202
- ---------------------------------------------------------------------------------------------- ------------------
</TABLE>
* For the period from March 2, 1994 (date of initial public investment) to May
31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Alexander Hamilton Capital Management, Inc., the Fund's
investment adviser ("Adviser"), receives for its services an annual investment
advisory fee equal to 0.60 of 1% of the Fund's average daily net assets. The
Adviser may voluntarily choose to waive a portion of its fee and reimburse
certain operating expenses of the Fund. The Adviser can modify or terminate this
voluntary waiver and reimbursement at any time at its sole discretion. Under the
terms of a sub-advisory agreement between the Adviser and Federated Research,
Federated Research receives an annual fee of $125,000, plus one half of the
remaining advisory revenues.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Trust
with certain administrative personnel and services. The fee is based on the
level of average aggregate net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
DISTRIBUTION PLAN--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended.
Under the terms of the Plan, the Fund will compensate Federated Securities Corp.
("FSC"), the principal distributor, from the net assets of the Fund to finance
activities intended to result in the sale of the Fund's shares. The Plan
provides that the Fund may incur distribution expenses up to 0.25 of 1% of the
average daily net assets of the Fund, annually to compensate FSC.
TRANSFER AND DIVIDEND DISBURSING AGENT, ACCOUNTING AND CUSTODY FEES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. The fee is based on the size, type and number of accounts and
transactions made by shareholders.
FServ also maintains the Trust's accounting records. The fee is based on the
level of the Fund's average net assets for the period plus out-of-pocket
expenses.
ALEXANDER HAMILTON MUNICIPAL INCOME FUND
- --------------------------------------------------------------------------------
State Street Bank and Trust Company is the Trust's custodian. The fee is based
on the level of the Fund's average net assets for the period plus out-of-pocket
expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses incurred by the Fund will be
borne initially by FAS and are estimated at $53,302. The Fund has agreed to
reimburse FAS for the organizational expenses during the five year period
following February 10, 1994 (date the Fund became effective).
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended
May 31, 1994 were as follows:
<TABLE>
<S> <C>
PURCHASES $ 5,638,572
- -------------------------------------------------------------------------------------------------- --------------
SALES $ 533,878
- -------------------------------------------------------------------------------------------------- --------------
</TABLE>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
George A. Cooke George A. Cooke
Chairman Chief Executive Officer
Christopher Bancroft Edward C. Gonzales
Frederick L. Blackmon President and Treasurer
William H. T. Bush Margaret P. Tessaro
James T. Ponder Vice President and Assistant Treasurer
Martha R. Seger Robert J. Davison
William E. Shelton Vice President
J. Crilley Kelly
Secretary
David M. Di Rita
Assistant Secretary
Melissa A. Moore
Assistant Secretary
</TABLE>
Mutual funds are not obligations of or insured by any bank, nor are they insured
by the federal government or any of its agencies. Investment in these shares
involves risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus, which contains facts
concerning its objective and policies, management fees, expenses and other
information.
