<PAGE>
DISCIPLINED
[LOGO OF THE GRIFFIN FUNDS]
INVESTMENT
SEMI-ANNUAL REPORT
MARCH 31, 1996
OBJECTIVES
<PAGE>
================================================================================
Table of Contents
Message to Shareholders................................................... 1
Performance Highlights of the Funds....................................... 2
Schedules of Investments
The Griffin Money Market Fund............................................. 3
The Griffin Tax-Free Money Market Fund.................................... 4
The Griffin Short-Term Bond Fund.......................................... 6
The Griffin U.S. Government Income Fund................................... 8
The Griffin Bond Fund..................................................... 9
The Griffin Municipal Bond Fund........................................... 11
The Griffin California Tax-Free Fund...................................... 13
The Griffin Growth & Income Fund.......................................... 15
The Griffin Growth Fund................................................... 17
Financial Statements
Statements of Assets and Liabilities...................................... 21
Statements of Operations.................................................. 23
Statements of Changes in Net Assets....................................... 25
Financial Highlights...................................................... 27
Notes to Financial Statements............................................. 29
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR ISSUED, ENDORSED OR
GUARANTEED BY, HOME SAVINGS OF AMERICA, FSB ("HOME SAVINGS"), SAVINGS OF
AMERICA OR ANY OF THEIR AFFILIATES. SUCH SHARES ARE NOT INSURED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD OR ANY OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN ANY OF THE FUNDS
INVOLVES CERTAIN RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL
<PAGE>
Dear Fellow Shareholder:
I would like to thank you for choosing The Griffin Funds, Inc. ("The Griffin
Funds") as part of your investment portfolio. Many of you have joined us in the
past six months through the Griffin Portfolio Builder Account, an asset
allocation program offered by Griffin Financial Services. We welcome you to our
fund family as we look forward to a promising year in 1996. Whether you are
receiving this report for the first time, or are a long time shareholder, I
strongly recommend a close review of the pages that follow to get further
acquainted with The Griffin Funds.
The Griffin Funds provide a consistent, careful and committed approach for those
seeking to invest in the financial markets. We employ some of this country's
largest and most respected investment firms to select the individual securities
for your Funds' portfolios. Griffin Financial Investment Advisers provides an
additional level of review and ensures that each manager remains true to the
investment objectives defined in the prospectus for each Fund. We believe that
our two-tiered approach to investment management ensures that a consistent
investment philosophy is applied with respect to each Fund by responsible,
experienced managers and that, through this approach, The Griffin Funds have
posted consistently strong returns.
Market Overview
The stock and bond markets continued the rally that began early in 1995
throughout most of the fourth quarter of 1995 and into early February of this
year. Most economists identified four themes that appeared likely to continue in
1996: inflation is under control, economic growth is slowing, the Federal
Reserve Board is likely to lower interest rates, and corporate earnings would
remain strong. Beginning in mid-February 1996, however, reports began to surface
indicating that the economy may be growing faster than anticipated. This change
in sentiment produced significant responses in the stock and bond markets. The
price of U.S. Treasury bonds dropped as the yield on 30-year maturities rose
0.70% (prices move in the opposite direction of yields). Municipal issues also
suffered, but, relative to taxable issues, performed much better due to
continued erosion of support for flat-tax proposals. The U.S. stock market
managed to post strong gains for the six months ended March 31, 1996 as
investors turned their attention to companies that stand to benefit from a
growing economy. The first three months of 1996 also saw cash flowing into
equity mutual funds at record levels, helping to buoy the stock market.
Managing Your Investments
Looking forward to the remaining months of 1996, it appears more important than
ever to establish a disciplined investment program to suit your financial needs.
The recent disjoining of the stock and bond markets' performance is a timely
reminder of the wisdom of diversification. By investing in any of The Griffin
Funds you have taken the first step towards diversification; your investment has
been spread over many different securities as detailed in the Schedules of
Investments found in this report. There are numerous additional ways to help
minimize the fluctuation in the value of our investments over time. These
include strategies such as asset allocation and dollar cost averaging. I
encourage you to contact your local Griffin Financial Services representative to
learn more about creating an investment program that's right for your financial
goals, and how The Griffin Funds can help you achieve those objectives.
We appreciate your selection of The Griffin Funds for your financial management
needs. We will do our best to preserve your confidence and loyalty.
Sincerely,
William A. Hawkins
Chairman
The Griffin Funds, Inc.
-1-
<PAGE>
Performance Highlights of the Funds (Unaudited)
The table below provides yield and total return information for the periods
ended March 31, 1996 for The Griffin Funds. The seven day yields of the money
market funds refer to the income generated by an investment in a Fund over a
seven day period, expressed as an annual percentage rate. The seven day
effective yields are calculated similarly but assume that the income earned from
a Fund is reinvested in the Fund. The total returns indicate the percentage an
investment in a Fund would have changed in value had shares been purchased at
the beginning of each period, with all dividends and capital gains being
reinvested. The table also indicates the average performance of mutual funds
with investment objectives that are similar to each of the respective non-money
market funds of The Griffin Funds. For each of the non-money market funds, the
group average reflects the performance of a universe of mutual funds categorized
and tracked by Lipper Analytical Services, Inc. The mutual fund averages do not
reflect the imposition of sales charges, but do reflect the reinvestment of all
dividends and capital gains, if any. Of course, past performance is not an
indicator of future results
<TABLE>
<CAPTION>
For the Periods Ended March 31, 1996 Seven Day
Seven Day Effective
Yield Yield
-----------------------------
<S> <C> <C>
Money Market Fund (1) 4.77% 4.88%
Tax-Free Money Market Fund (1) 2.79% 2.83%
</TABLE>
<TABLE>
<CAPTION>
Class A Class B
---------------------------------------- ----------------------------------------
Since Since
Past Six Past Inception Past Six Past Inception
Months Year (10/19/93)(2) Months Year (11/1/94)(2)
---------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government Income Fund 1.71% 9.13% 5.04% 1.46% 8.68% 10.19%
U.S. Government Income Fund (incl. sales charge)(3) -2.91% 4.21% 3.08% -3.54% 3.68% 7.47%
Lipper General U.S. Govt. Average (185 funds) 1.60% 9.28% n/a 1.60% 9.28% n/a
Bond Fund 1.55% 10.09% 3.56% 1.29% 9.41% 10.40%
Bond Fund (incl. sales charge)(3) -2.98% 5.18% 1.62% -3.71% 4.41% 7.68%
Lipper Corporate Debt A Rated Average (118 funds) 1.92% 10.08% n/a 1.92% 10.08% n/a
California Tax-Free Fund 2.70% 7.47% 2.32% 2.53% 6.91% 10.68%
California Tax-Free Fund (incl. sales charge)(3) -1.80% 2.59% 0.42% -2.47% 1.91% 7.96%
Lipper CA Municipal Debt Average (98 funds) 2.93% 7.27% n/a 2.03% 7.27% n/a
Municipal Bond Fund 2.49% 7.12% 2.84% 2.22% 6.52% 10.62%
Municipal Bond Fund (incl. sales charge)(3) -2.09 2.25% 0.91% -2.78% 1.52% 7.89%
Lipper General Municipal Debt Average (210 funds) 2.67% 7.17% n/a 2.67% 7.17% n/a
Growth & Income Fund 10.97% 32.75% 18.37% 10.69% 32.12% 28.96%
Growth & Income Fund (incl. sales charge)(3) 6.01% 26.76% 16.16% 5.69% 27.12% 26.41%
Lipper Growth & Income Average (529 funds) 10.33% 27.73% n/a 10.33% 27.73% n/a
</TABLE>
<TABLE>
<CAPTION>
Class A Class B
---------------------------------------- ----------------------------------------
Since Since
Past Six Past Inception Past Six Past Inception
Months Year (6/12/95) Months Year (6/12/95)
---------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Short-Term Bond Fund 2.53% n/a 4.91% 2.17% n/a 4.74%
Short-Term Bond Fund (incl. sales charge)(4) -1.02% n/a 1.25% -1.83% n/a 0.74%
Lipper S.T. Investment Grade Debt Average (80 funds) 2.78% n/a n/a 2.78% n/a n/a
Growth Fund 7.77% n/a 25.66% 7.57% n/a 25.32%
Growth Fund (incl. sales charge)(5) 2.92% n/a 20.02% 2.57% n/a 20.32%
Lipper Mid Cap Equity Average (144 funds) 7.06% n/a n/a 7.96% n/a n/a
</TABLE>
(1) Investments in the Money Market Funds are neither insured nor guaranteed by
the U.S. Government. There can be no assurance that either of the Money
Market Funds will be able to maintain a stable net asset value of $1.00 per
share.
(2) This figure has been annualized.
(3) The deduction of the maximum initial sales charge of 4.5% with respect to
Class A shares, and the maximum applicable contingent deferred sales charge
with respect to Class B shares (5% with respect to the total return data
presented for the six month and one year periods ended March 31, 1996, and
4% with respect to the total return data presented for the period from
inception of the Class on November 1, 1994 to March 31, 1996) has been
factored into these calculations.
(4) The deduction of the maximum initial sales charge of 3.5% with respect to
Class A shares, and the deduction of the maximum applicable contingent
deferred sales charge of 4% with respect to Class B shares has been factored
into these calculations.
(5) The deduction of the maximum initial sales charge of 4.5% with respect to
Class A shares, and the deduction of the maximum applicable contingent
deferred sales charge of 5% with respect to Class B shares has been factored
into these calculations.
<PAGE>
Schedule of Investments (Unaudited)
Griffin Money Market Fund
March 31, 1996
[PIE CHART APPEARS HERE]
Corporate Notes 15%
U.S. Agency Discount Notes 28%
Commercial Paper 57%
Investment Categories Reflect Percentage of Investments in Securities
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value(a)
- --------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Commercial Paper (56.9%):
Entertainment (4.3%):
Disney Company 5.18%, 7/24/96 (b)........... $7,000,000 $6,885,177
--------------
Financial Services (41.9%):
American Express, 5.40%, 5/01/96............ 7,000,000 7,000,000
American General Finance Corporation
5.09%, 5/31/96 (b)....................... 7,000,000 6,940,617
American Telephone & Telegraph
Capital Corporation, 5.35%, 4/17/96 (b).. 5,000,000 4,988,111
Chevron Oil Finance, 4.90%, 6/11/96 (b)..... 7,000,000 6,932,353
Deustche Bank, 4.92%, 6/05/96 (b)........... 7,000,000 6,937,817
Ford Motor Credit Corporation,
5.34%, 5/03/96........................... 7,000,000 7,000,000
General Electric Corporation,
5.08%, 5/28/96 (b)....................... 6,000,000 5,951,740
Republic Bank of New York
5.03%, 4/02/96 (b)....................... 7,000,000 6,999,022
Toronto Dominion, 5.27%, 4/16/96 (b)........ 7,000,000 6,984,629
Toyota Motor Credit Corporation
5.20%, 5/09/96 (b)....................... 7,000,000 6,961,578
--------------
66,695,866
==============
Industrial Conglomerate (6.3)%:
Emerson Electric, 5.40%, 4/01/96........... 3,100,000 3,100,000
Pepsi Corporation, 5.20%, 6/28/96 (b)...... 7,000,000 6,911,022
--------------
10,011,022
==============
Manufacturing (4.4%):
Dupont, 5.18%, 5/10/96 (b)................. 7,000,000 6,960,718
==============
Total Commercial Paper (cost: $90,552,783).... 90,552,783
==============
Corporate Notes (14.8%):
Financial Services (14.8%)
Bayerische Landesbank, 5.51%, 11/20/96 (b). $7,000,000 $6,885,177
CIT Group Holdings, 8.88%, 6/15/96......... 3,265,000 3,283,995
Comerica Bank, 6.20%, 5/28/96.............. 3,000,000 3,001,358
Commercial Credit, 6.75%, 1/15/97.......... 5,100,000 5,154,962
International Business Machines Credit
Corporation, 5.00%, 2/28/97............. 4,000,000 3,993,358
Norwest Corporation, 7.88%, 1/30/97........ 3,000,000 3,069,699
--------------
23,510,452
==============
Total Corporate Notes (cost: $23,510,452)..... 23,510,452
==============
U.S. Government And Agency Securities (28.2%):
U.S. Treasury Notes (6.3%):
7.88%, 7/15/96............................. 10,000,000 10,060,309
==============
U.S. Agency Securities (21.9%).............
Federal Home Loan Bank Notes (13.1%):......
5.13%, 4/02/96 (b)......................... 7,000,000 6,999,003
5.14%, 7/27/96 (b)......................... 10,000,000 9,847,228
6.23%, 4/24/96 (b)......................... 4,000,000 3,999,468
--------------
20,845,698
==============
Federal National Mortgage Association
Notes (8.8%):
5.13%, 4/09/96 (b)......................... 7,000,000 6,992,020
5.34%, 5/21/96 (b)......................... 5,000,000 4,962,917
6.43%, 4/18/96 (b)......................... 2,000,000 2,000,081
--------------
13,955,018
==============
Total U.S. Government And Agency Securities
(cost $44,861,025)......................... 44,861,025
==============
Repurchase Agreements (0.0%):
State Street Bank & Trust Co, Master
Repurchase Agreement, 4.0%, 4/01/96
102% Collateralized by
U.S. Government Securities................. 14,000 14,000
--------------
Total Repurchase Agreements (cost: $14,000)... 14,000
==============
Total Investments In Securities
(cost: $158,938,260) (c) (99.9%)........... 158,938,260
Other Assets Less Liabilities (0.1%).......... 180,144
Net Assets (100%)............................. $159,118,404
==============
</TABLE>
==============================================
Notes to Schedule of Investments
(a) Securities are valued in accordance with procedures described in note 1 to
the financial statements.
(b) Rate represents annualized yield to maturity at March 31, 1996.
(c) Cost is the same for federal income tax purposes.
See accompanying notes to financial statements.
-3-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin Tax-Free Money Market Fund
March 31, 1996
[PIE CHART APPEARS HERE]
Notes 9%
Pre-refunded 17%
General Obligations 20%
Commercial Paper 23%
Variable Note
Demand Notes 31%
Investment Catorgories Reflect Percentages of Investments in Securities
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value(a)
- --------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Municipal Short-Term Securities (97.8%):
California (11.6%):
Kings River Conservation District
of California, Pine Flat Power
Revenue, 7.90% Prerefunded to 1/01/97........ $300,000 $315,732
Los Angeles County, California
Transportation, Commission Sales Tax
Revenue Bond, 7.60%, Prerefunded to 7/01/96.. 500,000 514,739
Modesto, California High School District,
Stanislaus County, 4.10%, 8/01/96............ 400,000 400,885
Regional Airports Improvement
Corporation Los Angeles Terminal
Facilities, 3.90%, 4/01/96(b)................ 100,000 100,000
---------
1,331,345
---------
Colorado (3.5%):
Colorado Student Obligation Board
Authority Student Loan Revenue,
Series A, 3.30%, 4/03/96 (b)................. 300,000 300,000
Colorado Student Obligation Board
Authority, Series A, 3.40%, 4/03/96(b)....... 100,000 100,000
---------
400,000
---------
Georgia (6.4%):
Atlanta, Georgia Downtown Development
Authority Industrial Authority
Revenue, Underground Atlanta
Project, 7.75%, Prerefunded to 10/01/96...... 325,000 337,702
Burke County, Georgia Development
Authority,-Oglethorpe Power
Corporation Project, 3.40%, 4/04/96.......... 400,000 400,000
---------
737,702
---------
Hawaii (3.1%)
Hawaii State Department of Budget
& Finance Special Purpose Mortgage
Revenue, 7.70%, Prerefunded
to 7/01/96................................... 350,000 360,279
---------
Illinois (3.5%):
Illinois Health Facilities Authority
Revenue, SSM Health
Care Project A, 3.40%, 4/03/96(b)............ 400,000 400,000
---------
Indiana (0.9%):
Indianapolis, Indiana Multi-Family
Revenue Housing, Canal Square
Project 3.30%, 4/03/96 (b)................... $100,000 $100,000
---------
Kansas (6.9%):
Burlington, Kansas Pollution Control
Kansas City Power & Light
Project B, 3.15%, 5/07/96.................... 400,000 400,000
Kansas City, Kansas Industrial
Revenue, Adjustable Rate-PQ
Corporation Project, 3.85%, 4/01/96 (b)...... 100,000 100,000
Kansas State Department Transportation
Highway Revenue, 3.30%, 4/03/96 (b).......... 300,000 300,000
---------
800,000
---------
Kentucky (0.9%):
Daviess County, Kentucky Solid Waste
Disposable Facilities Revenue,
Scott Paper Corporation Project
3.85%, 4/01/96 (b)........................... 100,000 100,000
---------
Louisiana (1.5%):
DeSoto Parish, Louisiana Pollution
Control, Central Louisiana Electric
Corporation, 3.30%, 4/03/96 (b).............. 300,000 300,000
East Baton Rouge Parish, Louisiana
Pollution Control Revenue, Georgia
Pacific Corporation, 3.30%, 4/03/96 (b)...... 100,000 100,000
---------
400,000
---------
Maryland (2.6%)
Montgomery County, Maryland Consumer
Public Improvement, 6.80%, 10/01/96.......... 300,000 305,136
---------
Massachusetts (3.5%):
Massachusetts State Water Resources
Authority, 2.05%, 5/06/96.................... 400,000 400,000
---------
Michigan (6.1%):
Delta County, Michigan Economic
Development Corporation Environmental
Improvement Revenue, Mead Escanaba
Paper-B, 3.05%, 5/07/96....................... 300,000 300,000
Michigan State General Obligation
Notes 4.00%, 9/30/96......................... 400,000 401,722
---------
701,722
---------
Minnesota (6.1%):
Minnesota State General Obligation
Bonds, 6.80%, 8/01/96........................ 400,000 404,031
Rochester, Minnesota Health Care
Facilities-Mayo Foundation/Mayo
Medical Center Revenue, 3.10%, 4/09/96....... 300,000 300,000
---------
704,031
---------
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin Tax-Free Money Market Fund (Continued)
March 31, 1996
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------
<S> <C> <C>
Missouri (1.7%):
Columbia, Missouri Special Revenue,
Series A, 3.40%, 4/03/96 (b) ................ $100,000 $100,000
Missouri State Health & Educational
Facilities Authority Revenue,
3.30%, 4/03/06 .............................. 100,000 100,000
--------------
200,000
--------------
North Carolina (2.6%):
North Carolina Eastern Municipal
Power Agency-Power System
Revenue, 3.35%, 4/09/96 ..................... 300,000 300,000
--------------
Nevada (3.5%):
Clark County, Nevada Airport Improvement Revenue
3.30%, 4/03/96 (h) .......................... 300,000 300,000
3.50%, 4/03/96 (b) .......................... 100,000 100,000
--------------
400,000
--------------
New York (1.7%):
New York State General Obligation,
Series A-7, 3.75%, 4/03/96 (b) .............. 200,000 200,000
--------------
Ohio (0.9%):
Student Loan Funding Corporation
Cincinnati, Ohio Student Loan
Revenue, Series A-1, 3.45%, 4/03/96 (b) ..... 100,000 100,000
--------------
Pennsylvania (6.5%):
Pennsylvania State Higher Education,
3.50%, 4/03/96 (b) .......................... 300,000 300,000
Pennsylvania State Tax Anticipation
Notes, 4.50%, 6/28/96 ....................... 450,000 451,120
--------------
751,120
--------------
Tennessee (3.5%):
Memphis, Tennessee General Obligation
Bonds, 5.00%, 9/01/96 ....................... 400,000 402,610
--------------
Texas (16.2%):
Austin, Texas Utilities Systems
Revenue, 7.75%, Prerefunded to 5/15/96 ...... 400,000 409,610
Dallas County, Texas General Obligation
Bonds, 3.70%, 8/15/96 ....................... 350,000 349,031
Texas State Public Finance
Authority, 3.20%, 7/25/96 ................... 500,000 500,000
Texas State Tax & Revenue Anticipation
Notes, 4.75%, 8/30/96 ....................... 500,000 501,872
Tom Green County, Texas Health
Facilities Developmental Corporation
Health Facilities Revenue,
3.35%, 4/03/96 (b) .......................... 100,000 100,000
--------------
1,861,414
--------------
Wyoming (2.6%):
Platte County, Wyoming Pollution
Control Revenue Bond, Tri State
General & Transportation,
3.85%, 4/01/96 (b) .......................... $100,000 $100,000
Uinta County, Wyoming Pollution
Control Revenue, Chevron U.S.A
Incorporated Project, 3.70%, 4/01/96 (b) .... 200,000 200,000
--------------
300,000
--------------
Total Municipal Short-Term Securities
(cost: $11,255,358) ........................... 11,255,358
--------------
Total Investments In Securities
(cost: $11,255,358) (c) (98.5%) ............. 11,255,358
Other Assets Less Liabilities (1.5%) .......... 168,258
--------------
Net Assets (100%) ............................. $11,423,616
==============
- -------------------------------------------
</TABLE>
Notes to Schedule of Investments
(a) Securities are valued in accordance with procedures described in note 1 to
the financial statements.
(b) These variable rate securities have maturities greater than one year but are
redeemable upon demand. For purposes of calculating the Fund's weighted
average maturity, the length to maturity of these investments is considered
to be the greater to be the greater of the period until the interest rate is
adjusted or until the principal can be recovered by demand.
(c) Cost is the same for federal income tax purposes.
See accompanying notes to financial statements.
-5-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin Short-Term Bond Fund
March 31, 1996
[PIE GRAPH APPEARS HERE]
U.S. Agency Securities 9%
Cash 4%
U.S. Treasury Notes 67%
Corporate Bonds 20%
Investments Categories Reflect Percentages of Investments in Securities
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value(a)
- --------------------------------------------------------------------------------
<S> <C> <C>
(Percentages of each investment category relate to total net assets)
Corporate Bonds (19.6%):
Banking (2.7%):
Bankers Trust-New York
7.25%, 11/01/96 .......................... $30,000 $30,225
9.50%, 6/14/00 .......................... 90,000 98,888
First Chicago, 9.00%, 6/15/99 .............. 30,000 32,350
MBNA Corporation, 6.88%, 10/01/99 .......... 10,000 10,113
Northern Trust, 9.00%, 5/15/98 ............. 100,000 105,375
World Savings & Loan Association, ..........
7.63%, 2/18/97 ........................... 40,000 40,600
----------
317,451
----------
Electric Utilities (1.7%):
Alabama Power Company, 6.38%, 8/01/99 ...... 30,000 29,963
Baltimore Gas & Electric, 8.93%, 7/16/98 ... 100,000 105,250
Southern California Edison, 8.25%, 2/01/00 . 60,000 63,325
----------
198,438
----------
Financial Services (5.1%):
Associates Corporation, N.A.
6.00%, 3/15/00 ............................. 65,000 63,944
6.75%, 7/15/97 ............................. 37,000 37,356
6.75%, 10/15/99 ............................ 16,000 16,180
Bear Stearns Company, 9.13%, 4/15/98 ....... 30,000 31,538
Ford Motor Credit Corporation,
9.38%, 12/15/97 ............................ 50,000 53,030
General Motors Acceptance Corporation,
8.38%, 5/01/97 ............................. 30,000 30,850
Heller Financial, 9.13%, 8/01/99 ........... 100,000 107,500
Lehman Brothers Holdings Corporation,
8.88%, 11/01/98 ............................ 150,000 158,438
Paine Webber Group Incorporated,
9.25%, 12/15/01 ............................ 100,000 109,750
----------
608,586
----------
Industrial Conglomerate (7.6%) ...............
Anheuser Busch Company, 8.75%, 12/01/99 .... $100,000 $108,000
Cox Communications Incorporated-New,
8.55%, 6/01/00 ............................. 40,000 42,900
Cox Communications Incorporated,
6.38%, 6/15/00 ............................. 100,000 99,250
GTE Corporation, 9.38%, 12/01/000 .......... 100,000 110,000
International Paper Company, 9.70%, 3/15/00. 150,000 166,500
Lockheed Corporation, 9.38%, 10/15/99 ...... 71,000 77,301
Mobil Corporation 6.50%, 2/15/97 ........... 15,000 15,056
Pepsico Incorporated, 7.75%, 10/01/98 ...... 100,000 103,875
Sears Roebuck & Company, 7.32%, 3/20/98 .... 100,000 102,164
Texaco Capital Incorporated, 9.00%, 12/15/99 65,000 70,688
----------
896,109
----------
Retailing (1.1%)
Wal-Mart Stores
5.50%, 9/15/97 ............................. 30,000 29,775
6.75%, 5/15/02 ............................. 100,000 100,750
----------
130,525
----------
Transportation (1.4%)
Southwest Airlines, 9.40%, 7/01/01 .......... 150,000 166,125
----------
Total Corporate Bonds
(cost: $2,341,074) .......................... 2,317,234
----------
U.S. Government And Agency Securities (74.9%):
U.S. Treasury Notes (66.0%):
4.75%, 2/15/97 .............................. 100,000 99,379
5.13%, 11/30/98 ............................. 400,000 392,228
5.13%, 2/28/98 .............................. 800,000 790,608
5.50%, 7/31/97 .............................. 450,000 449,276
5.75%, 10/31/97 ............................. 150,000 150,081
5.88%, 8/15/98 .............................. 400,000 400,092
6.00%, 10/15/99 ............................. 400,000 400,108
6.00%, 12/31/97 ............................. 400,000 401,528
6.13%, 5/15/98 .............................. 500,000 502,955
6.25%, 8/31/96 .............................. 200,000 200,642
6.38%, 1/15/99 .............................. 225,000 227,513
6.50%, 5/15/97 .............................. 100,000 100,989
6.88%, 3/31/00 .............................. 350,000 359,744
7.25%, 2/15/98 .............................. 150,000 153,765
7.25%, 11/30/96 ............................. 100,000 101,140
7.38%, 11/15/97 ............................. 650,000 665,958
7.50%, 5/15/02 .............................. 150,000 159,698
7.75%, 1/31/00 .............................. 100,000 105,620
7.75%, 12/31/99 ............................. 300,000 316,632
8.13%, 2/15/98 .............................. 300,000 312,171
8.25%, 7/15/98 .............................. 670,000 703,882
8.88%, 5/15/00 .............................. 750,000 825,998
----------
7,820,007
----------
</TABLE>
See accompanying notes to financial statements.
-6-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin Short-Term Bond Fund (Continued)
March 31, 1996
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value(a)
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Agency Securities (8.9%):
Federal Home Loan Bank (3.5%):
5.89%, 7/24/00............................ $200,000 $197,410
5.94%, 6/13/00............................ 200,000 197,828
6.84%, 4/20/99............................ 13,816 13,824
---------------
409,062
---------------
Federal Home Loan Mortgage Association (2.1%):
6.00%, 4/01/99............................ 199,212 197,157
7.75%, 11/07/01........................... 50,000 53,455
---------------
250,612
---------------
Federal National Mortgage Association (3.3%):
6.63%, 9/03/98............................ 200,000 200,194
9.05%, 4/10/00............................ 175,000 192,301
---------------
392,495
---------------
Total U.S. Government And Agency Securities
(cost: $8,937,495)........................ 8,872,176
===============
Short Term Securities (3.5%):
Repurchase Agreements (3.5%):
State Street Bank & Trust Co., Master
Repurchase Agreement, 4.0%, 4/01/96,
102% Collateralized by U.S. Government
Securities................................ 411,000 411,000
---------------
Total Short-Term Securities
(cost: $411,000).......................... 411,000
---------------
Total Investments In Securities
(cost: $11,689,569) (h) (98.0%)........... 11,600,410
Other Assets Less Liabilities (2.0%)......... 238,993
---------------
Net Assets (100%)............................ $11,839,403
===============
</TABLE>
=============================================
Notes to Schedule of Investments
(a) Securities are valued in accordance with procedures described in note 1 to
the financial statements.
(b) Cost is the same for federal income tax purposes. The aggregate gross
unrealized appreciation and depreciation of investments in securities based
on this cost as follows:
Gross unrealized appreciation......... $9,514
Gross unrealized depreciation......... (98,673)
-------------
Net unrealized depreciation........... ($89,159)
=============
See accompanying notes to financial statements.
-7-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin U.S. Government Income Fund
March 31, 1996
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Discount Notes 12%
GNMA 41%
U.S. Treasury Notes 20%
U.S. Treasury Bonds 15%
U.S. Agency Securities 12%
</TABLE>
Investment Categories Reflect Percentages of Investments In Securities
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Mortgage-Backed Securities (43.2%):
Government National Mortgage
Association (42.0%):
6.50%, 10/15/23-1/15/24..................... $1,869,412 $ 1,771,847
7.00%, 1/15/23-9/15/25...................... 5,423,995 5,286,659
7.50%, 6/15/17-3/15/26...................... 5,612,750 5,606,096
8.00%, 10/15/24-12/15/24.................... 932,635 952,742
9.50%, 8/15/09-8/15/20...................... 3,193,459 3,420,652
11.00%, 2/15/10-10/15/18..................... 328,230 369,361
12.50%, 12/15/10-6/15/15..................... 102,584 118,773
13.00%, 8/15/12.............................. 45,007 52,250
-----------
17,578,380
-----------
Collateralized Mortgage Obligations (1.2%)
Federal Home Loan Mortgage Corporation (0.6%):
Series 80, Class E, 8.60%, 6/15/19.......... 254,059 258,071
-----------
Federal National Mortgage Association (0.6%):
Series 1989-48, Class G, 8.00%, 3/25/18..... 252,646 256,749
-----------
Total Mortgage-Backed Securities
(cost: $18,248,403)............................ 18,093,200
-----------
U.S. Government and Agency Securities (46.9%):
U.S. Agency Securities (4.6%):
Private Export Funding Corporation,
5.50%, 3/15/01............................ 2,000,000 1,935,000
-----------
Federal National Mortgage Association (6.2%):
6.38%, 5/16/97.............................. 1,500,000 1,500,300
8.10%, 8/12/19.............................. 1,000,000 1,116,780
-----------
2,617,080
===========
U.S. Treasury Notes and Bonds (36.1%):
U.S. Treasury Notes (20.3%):
5.00%, 2/15/99............................... $1,000,000 $ 976,460
6.13%, 5/15/98............................... 1,000,000 1,005,910
6.25%, 5/31/00............................... 3,200,000 3,216,192
6.88%, 10/31/96.............................. 175,000 176,490
7.50%, 2/15/05............................... 1,200,000 1,286,592
7.88%, 11/15/04.............................. 1,700,000 1,862,911
-----------
8,524,555
-----------
U.S. Treasury Bonds (15.8%):
7.25%, 8/15/22.............................. 500,000 522,630
7.50%, 11/15/16.............................. 2,000,000 2,140,940
7.88%, 2/15/21............................... 1,500,000 1,675,440
8.00%, 11/15/21.............................. 2,000,000 2,266,500
-----------
6,605,510
-----------
Total U.S. Government And Agency Securities
(cost $19,964,237)............................. 19,682,145
-----------
Short-Term Securities (12.8%):
Federal Home Loan Mortgage
Corporation (12.8%):
5.25%, 4/01/96 (b)............................ 5,350,000 5,350,000
-----------
Total Short-Term Securities (cost $5,350,000)... 5,350,000
-----------
Total Investment In Securities
(cost: $43,562,640)(c)(102.9%)................. 43,125,345
Other Assets Lease Liabilities (-2.9%).......... (1,227,755)
-----------
Net Assets (100%)............................... $41,897,590
===========
</TABLE>
- ---------------------------------------
Notes to Schedule of Investments
(a) Securities are valued in accordance with procedures described in note 1 to
the financial statements.
(b) Rate represents annualized yield to maturity at March 31, 1996.
(c) Cost is the same for federal income tax purposes. The aggregate gross
unrealized appreciation and depreciation of investments in securities based
on this cost were as follows:
<TABLE>
<S> <C>
Gross unrealized appreciation................... $159,285
Gross unrealized depreciation................... (596,580)
---------
Net unrealized depreciation..................... ($437,295)
=========
</TABLE>
See accompanying notes to financial statements.
-8-
<PAGE>
Schedule of Investments (Unaudited)
Griffin Bond Fund
March 31, 1996
[PIE CHART APPEARS HERE]
Corporate Bonds 69%
U.S. Treasury Notes & Bonds 21%
U.S. Agency Securities 9%
Other 1%
Investment Categories Reflect Percentages of Investments in Securities
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Asset Backed Securities (0.4%);
Corporate (0.4%):
General Motors Acceptance Corporation
Grantor Trust, 6.30%, 6/15/99 ............ $93,082 $93,432
-------------
Total Asset Backed Securities (cost:$93,043)..... 93,432
-------------
Corporate Bonds (66.4%):
Banking (6.5%):
Chemical Banking Corporation
7.13%, 3/01/05 .......................... 400,000 403,592
Malayan Banking Berhad-New York,
7.13%, 9/15/05 (b) ...................... 100,000 99,625
Midland Bank PLC, 6.95%, 3/15/11 (b)........ 400,000 386,500
NationsBank Corporation, 5.38%, 4/15/00 .... 300,000 287,649
Norwest Corporation, 7.70%, 11/15/97 ...... 200,000 205,108
-------------
1,382,474
-------------
Electric Utilities (3.0%):
Florida Power & Light, 5.38%, 4/01/00 ...... 305,000 293,166
Virginia Electric & Power, 8.88%, 6/01/99 .. 125,000 133,219
-------------
426,385
-------------
Financial Services (23.5%):
Abbey National First Capital
Corporation, 8.30%, 10/15/04 (b) ........ 175,000 188,939
Aegon, 8.00%, 8/15/06 (b) ................. 314,000 337,158
American Express Credit,
7.88%, 12/01/96 ......................... 50,000 50,665
BHP Finance U.S.A.
6.69%, 3/01/06 (b) ...................... 204,000 199,665
7.00%, 12/01/97 (b) ..................... 200,000 202,508
Commercial Credit, 5.70%, 3/01/98 ......... 175,000 173,469
Countrywide Funding Corporation,
8.25%, 7/15/02 .......................... 166,000 176,375
Donaldson, Lufkin & Jenrette,
6.88%, 11/01/05 ......................... 294,000 287,753
Fleet Financial Group, 6.00%, 10/26/98 .... $315,000 $313,797
Ford Motor Credit Corp.
Ford-Global Bond, 6.25%, 2/26/98 ....... 350,000 351,092
6.85%, 8/15/00 .......................... 250,000 252,500
Golden West Financial, 7.88%, 1/15/02 ..... 250,000 261,528
Lehman Brothers Incorporated,
6.13%, 2/01/01 .......................... 250,000 242,813
Lincoln National Corporation,
7.25%, 5/15/05 .......................... 450,000 455,063
Merrill Lynch & Company Incorporated
6.00%, 1/15/01 .......................... 150,000 146,063
6.25%, 1/15/06 .......................... 230,000 216,591
Morgan J.P. & Company
7.63%, 11/15/98 ......................... 250,000 258,063
7.63%, 9/15/04 ......................... 250,000 263,125
Paine Webber Group, 7.31%, 8/09/00 ......... 300,000 302,250
Repsoi International Finance Corp.,
7.00%, 8/01/05 (b) ...................... 200,000 201,750
Smith Barney Holdings Incorporated,
6.00%, 3/15/97 .......................... 150,000 150,152
-------------
5,031,319
-------------
Industrial Conglomerate (32.3%):
American Brands, 7.50%, 5/15/99............. 120,000 123,364
American Home Products
7.70%, 2/15/00 .......................... 90,000 93,743
7.90%, 2/15/05 .......................... 180,000 192,920
Black & Decker
7.00%, 2/01/06 .......................... 50,000 48,667
7.50%, 4/01/03 .......................... 185,000 190,088
Browning-Ferris
6.38%, 1/15/08 .......................... 175,000 166,688
7.88%, 3/15/05 .......................... 250,000 267,813
Cardinal Health, 6.00%, 1/15/06 ........... 297,000 277,324
Carter Holt Harvey, 8.38%, 4/15/15(b) ..... 253,000 266,156
Coca Cola Co., 7.88%, 9/15/98(b) .......... 200,000 207,538
Columbia/HCA Healthcare
6.91%, 6/15/05 .......................... 300,000 299,022
7.15%, 3/30/04 .......................... 250,000 252,188
CPC International Incorporated,
6.15%, 1/15/06 .......................... 350,000 334,250
CSR America Incorporated, 6.88%, 7/21/05 .. 300,000 297,375
General Motors Corporation
7.10%, 3/15/06 .......................... 135,000 135,000
9.63%, 12/01/00 ......................... 350,000 391,682
GTE Corporation, 8.85%, 3/01/98 ........... 200,000 208,562
GTE South, 6.00%, 2/15/08 ................. 250,000 231,875
Hanson Overseas BV, 6.75%, 9/15/05(b) ..... 250,000 243,298
International Business Machines
Corporation, 6.38%, 6/15/00 ............. 200,000 199,866
International Paper Company, 9.70%, 3/15/00. 160,000 176,811
News America Holdings, 7.50%, 3/01/00 ..... 350,000 358,313
Olsten Corporation, 7.00%, 3/15/06 ........ 110,000 109,588
Pepsico Incorporated, 7.75%, 10/01/98 ..... 300,000 309,381
</TABLE>
See accompanying notes to financial statements.
-9-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
GRIFFIN BOND FUND (continued)
March 31, 1996
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------------------------------
<S> <C> <C>
Sears, Roebuck & Company
5.71%, 2/06/01 ............................. $65,000 $62,806
9.25%, 4/15/98 ............................. 110,000 116,268
9.35%, 7/06/98 ............................. 100,000 106,625
TCI Communications Incorporated
8.00%, 8/01/05 ............................. 200,000 205,750
TeleCommunications, Inc. 7.38%, 2/15/00....... 300,000 306,510
Wal-Mart Stores, 8.63%, 4/01/01............... 350,000 380,939
Walt Disney Company, 6.38%, 3/30/01........... 155,000 154,225
WMX Technology Incorporated,
8.25%, 11/15/99............................. 200,000 211,488
-----------
6,926,117
-----------
Transportation (2.1%):
Federal Express
9.75%, 5/15/96............................ 50,000 50,197
10.00%. 9/01/08........................... 175,000 188,636
Southwest Airlines, 7.88%, 9/01/07.......... 200,000 208,208
-----------
447,041
-----------
Total Corporate Bonds
(cost: $14,325,124).......................... 14,213,336
-----------
Collateralized Mortgage Obligations (0.9%):
U.S. Agency (0.6%)
Federal Home Loan Mortgage Corporation(c)
Series 1439, Class QA, inverse
COFI floater, 11.04%, 11/15/22......... 22,616 20,581
Series 1435, Class FA, LIBOR floater
6.74%, 12/15/22........................ 114,463 118,505
-----------
139,086
-----------
Corporate (0.3%):
Security Pacific National Bank,
9.30%, 8/25/19......................... 55,739 56,505
-----------
Total Collateralized Mortgage Obligations
(cost: $195,472).............................. 195,591
-----------
U.S. Government and Agency Securities (28.7%)
U.S. Government Securities (20.9%):
U.S. Treasury Bonds (17.2%):
7.13%, 2/15/23............................ 3,565,000 3,675,836
-----------
U.S. Treasury Notes (3.7%):
5.88%, 11/15/05........................... 35,000 33,718
6.50%, 4/30/99............................ 294,000 298,363
7.25%, 8/15/04............................ 240,000 253,202
7.88%, 1/15/98............................ 190,000 196,644
-----------
781,927
-----------
U.S. Agency Securities (7.8%):
Federal National Mortgage Association (7.8%):
6.50%, 3/01/26............................ 234,164 222,456
7.00%, 2/01/26............................ 696,041 678,856
7.50%, 6/01/10............................ 381,521 387,481
8.00%, 10/01/10........................... 363,934 374,735
-----------
1,663,528
-----------
Total U.S. Government And Agency Securities
(cost: $6,386,221)........................... $6,121,291
-----------
Short-Term Securities (0.5%):
Repurchase Agreement (0.5%):
State Street Bank & Trust Co. Master
Repurchase Agreement, 4.0%, 4/01/96
100% Collateralized by U.S. Government
Securities................................. $104,000 104,000
-----------
Total Short-Term Securities
(cost $104,000).............................. 104,000
-----------
Total Investments In Securities
(cost:$21,103,865)(d)(96.9%).................. 20,727,650
Other Assets Loss Liabilities (3.1%)............. 660,061
------------
Net Assets (100%)................................ $21,387,711
============
</TABLE>
- -------------------------------------------------
Notes to Schedule of Investments
(a) Securities are valued in accordance with procedures described in note 1 to
the financial statements.
(b) U.S. dollar denominated securities issued by foreign corporations and/or
governments.
(c) Descriptions of certain collateralized mortgage obligations are as follows:
LIBOR - London InterBank Offered Rate.
COFI (11th District) - Cost of Funds Index of the Federal Reserve's 11th
District.
Inverse floater - represents securities that pay interest at rates that
increase (decrease) with a decline (increase) in a specific index.
Interest rate disclosed was in effect on March 31, 1996.
Floater - represents securities that pay interest rates that increase
(decrease) with an increase (decrease) in a specific index. Interest rate
disclosed was in effect on March 31, 1996.
(d) Cost is the same for federal income tax purposes. The aggregate gross
unrealized appreciation and depreciation of investments in securities based
on this cost were as follows:
<TABLE>
<S> <C>
Gross unrealized appreciation............... $68,289
Gross unrealized depreciation............... (444,504)
-----------
Net unrealized depreciation................. ($376,215)
===========
</TABLE>
See accompanying notes to financial statements.
-10-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin Municipal Bond Fund
March 31, 1996
[PIE CHART APPEARS HERE]
Sales Tax
Revenue 5%
Lease
Revenue 5%
Electric 7%
Transportation 10%
Sewer 12%
Water
Revenue 12%
Other 16%
General
Obligation 33%
Investment Categories Reflect Percentages of Investments In Securities
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Municipal Long-Term Securities (86.6%):
Arizona (3.3%):
Phoeniz, Arizona, Series A 6.25%, 7/01/17... $200,000 $215,750
----------
California (3.7%):
California State Department Water Resources
5.00%, 12/01/22........................... 100,000 87,625
6.00%, 12/01/06........................... 140,000 151,200
----------
238,825
----------
Florida (5.4%):
Dade County Florida Aviation
Revenue, 5.50%, 10/01/07.................. 200,000 202,500
Florida State Board of Education
Capital Outlay Public Education,
5.75%, 6/01/15............................ 150,000 149,063
----------
351,563
----------
Georgia (2.7%):
Georgia State General Obligation,
7.20%, 3/01/08............................. 150,000 177,188
----------
Illinois (8.5%):
Du Page County, Illinois General
Obligation Revenue Bond, Stormwater
Project, 5.60%, 1/01/21...................... 250,000 244,375
Metropolitan Pier & Exposition
Authority Dedicated
State Tax Revenue Bond, 4.90%, 6/15/01 (b)... 400,000 312,500
----------
556,875
----------
Indiana (1.6%):
Wa-Nee Elementary/High School
Building Corporation, 6.50%, 7/15/10......... 100,000 106,250
----------
</TABLE>
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value(a)
- --------------------------------------------------------------------------------
<S> <C> <C>
Massachusetts (8.4%):
Massachusetts Bay Transportation
Authority General Transporation
System, 5.60%, 3/01/08....................... $200,000 $204,500
Massachusetts State General Obligation,
5.75%, 2/01/15............................... 150,000 148,125
Massachusetts State Water Resource Authority
6.00%, 8/01/14............................... 100,000 101,250
5.50%,11/01/15............................... 100,000 94,375
----------
548,250
----------
Michigan (1.1%):
Michigan State Hospital Financing
Authority, 5.88%, 7/01/14.................... 75,000 70,404
----------
New Jersey (3.3%):
New Jersey State General Obligation,
6.00%, 2/15/11............................... 200,000 210,500
----------
Nevada (1.6%):
Nevada State General Obligation,
5.80%, 7/15/08............................... 100,000 103,500
----------
New York (1.7%):
New York State Environmental Facilities
Corporation Pollution Control
Revenue Revolving Fund,
6.80%, 6/15/01............................... 100,000 109,500
----------
Ohio (3.1%):
Ohio State Water Department
Authority Revenue, Fresh Water
Series, 5.70%, 6/01/09....................... 200,000 204,500
----------
Oregon (1.6%):
Oregon State Department of Transportation
Revenue, Regional Light Rail Fund-
Westside Project, 6.25%, 6/01/09............. 100,000 107,000
----------
Pennsylvania (3.9%):
Commonwealth of Pennsylvania General
Obligation, 5.20%, 6/15/04................... 250,000 257,188
----------
Puerto Rico (3.2%):
Puerto Rico Electric Power Authority, Electric
Revenue, 6.13%, 7/01/08...................... 200,000 209,750
----------
South Carolina (3.0%):
Columbia, South Carolina Water Works &
Sewer System Revenue, 5.38%,
2/01/12...................................... 200,000 197,000
----------
See accompanying notes to financial statements.
-11-
</TABLE>
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin Municipal Bond Fund (Continued)
March 31, 1996
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------------------------------
<S> <C> <C>
South Dakota (1.6%):
South Dakota Housing Development
Authority, Homeownership
Mortgage, 6.65%, 5/01/14 .................... $100,000 $103,125
-------------
Texas (10.9%):
Austin, Texas General
Obligation, 5.70%, 9/01/07 .................. 200,000 210,000
Harris County, Texas Tax and Revenue
Certificate of Obligation, 6.00%, 12/15/10.... 200,000 211,500
San Antonio, Texas Electric &
Gas Revenue, 5.00%, 2/01/14 ................. 100,000 91,625
Texas Municipal Power Agency
Revenue, 5.25%, 9/01/08 ..................... 200,000 198,750
-------------
711,875
-------------
Virginia (5.5%):
Virginia State Public Building Authority
Revenue, 5.20%, 8/01/16 ..................... 250,000 231,563
Virginia State Transportation Board Revenue,
North Virginia Transportation District
Program, 6.25%, 5/15/12 ..................... 120,000 125,550
-------------
357,113
-------------
Washington (6.6%):
Seattle, Washington Water System
Revenue, 5.25%, 12/01/23 .................... 250,000 224,688
Washington State General Obligation,
5.75%, 9/01/09 .............................. 200,000 206,000
-------------
430,688
-------------
Wisconsin (6.0%):
Wisconsin State Transportation,
5.50%, 7/01/14 .............................. 200,000 190,500
Wisconsin State General
Obligation, 5.13%, 11/01/07 ................. 200,000 200,000
-------------
390,500
-------------
Total Municipal Long-Term Securities
(cost:$5,600,042) ............................... 5,657,344
-------------
Municipal Short-Term Securities (10.4%):
California (1.5%):
California Authority Pollution Control Authority
Resource Recovery Revenue, 3.90%, 4/01/96(c).. 100,000 100,000
-------------
Kansas (1.5%):
Kansas City, Kansas Industrial
Revenue, Adjustable Rate-PQ
Corporation Project, 3.85%, 4/01/96 (c) ..... $100,000 $ 100,000
-------------
Texas (4.3%):
Grapevine, Texas Industrial Development
Corporation, Multiple Mode-American
Airlines, 3.80%, 4/01/96 (c) ................ 200,000 200,000
Texas State Tax & Revenue Anticipation
Notes, 4.75%, 8/30/96 ....................... 80,000 80,328
-------------
280,328
-------------
Wyoming (3.1%):
Lincoln County, Wyoming Pollution
Control Revenue Bond, Exxon
Project, 3.90%, 4/01/96 (c) ................. 200,000 200,000
-------------
Total Municipal Short-Term Securities
(cost: $680,328).................................. 680,328
-------------
Total Investments In Securities
(cost: $6,280,370)(d)(98.2%) .................... 6,337,672
Other Assets Less Liabilities (1.8%) ............... 115,516
-------------
Net Assets (100%) .................................. $6,453,188
=============
</TABLE>
- ------------------------------------------
Notes to Schedule of Investments
(a) Securities are valued in accordance with procedures described in note 1 to
the financial statements.
(b) Rate on these zero coupon bonds represents annualized yield to maturity at
March 31, 1996.
(c) These variable rate securities have maturities greater than one year but are
redeemable upon demand. For purposes of calculating the Fund's weighted
average maturity, the length to maturity of these investments is considered
to be the greater of the period until the interest rate is adjusted or until
the principal can be recovered by demand.
(d) Cost is the same for federal income tax purposes. The aggregate gross
unrealized appreciation and depreciation of investments in securities based
on this cost as follows:
<TABLE>
<S> <C>
Gross unrealized appreciation ................. $96,634
Gross unrealized depreciation ................. (39,332)
-----------
Net unrealized appreciation ................... $57,302
===========
</TABLE>
See accompanying notes to financial statements.
-12-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin California Tax-Free Fund
March 31, 1996
[PIE CHART APPEARS HERE]
Sewer 7%
Electric 8%
Public Improvements 9%
Airport 10%
Water 10%
Housing 10%
Transportation 15%
General Obligations 25%
Other 7%
Investment Categories Reflect Percentages of Investments in Securities
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value(s)
- --------------------------------------------------------------------------------
<S> <C> <C>
(Percentages of each investment category relate to total net assets)
Municipal Long-Term Securities (95.9%):
Airport Revenues (9.7%):
Los Angeles, California Department of
Airports, 6.5%, 5/15/04 ................. $1,430,000 $1,581,938
Port of Oakland, California Port Revenue
Capital Appreciates, 5.87%,
11/01/08 (b)............................. 1,045,000 525,113
----------
2,107,051
----------
Electric Revenue (7.7%):
Northern California Transmission
Revenue Bond, Series A,
5.25%, 5/01/20 ............................ 1,000,000 917,500
Puerto Rico Electric Power Authority
Power Revenue, Series U,
6.00%, 7/01/14 ............................ 750,000 753,750
----------
1,671,250
----------
General Obligations (24.3%):
State of California
5.50%, 4/01/13 ............................ 2,000,000 1,962,500
6.00%, 8/01/10 ............................ 550,000 567,188
6.60%, 2/01/10 ............................ 1,000,000 1,111,250
East Bay, California Regional
Park District, 5.50%, 9/01/00 ............. 500,000 520,625
Folsom, California School Facilities
Project, 6.00%, 8/01/10 ................... 300,000 311,625
Puerto Rico Commonwealth
5.65%, 7/01/15 ............................ 800,000 807,000
----------
5,280,188
----------
Housing Revenue (10.3%):
California Housing Finance Agency
Revenue Home Mortgage,
6.50%, 2/01/08 ............................ 1,070,000 1,122,163
California Housing Finance Agency
Revenue, Multi-Unit Rental
Housing, 6.88%, 8/01/24 ................... 500,000 514,375
Perris, California Single Family Mortgage
Revenue Bonds, GNMA Mortgage Backed
Securities, 6.28%, 6/01/23 (b) ............ $3,000,000 $ 596,400
----------
2,232,938
----------
Public Improvements (8.4%):
California State Public Works
Board Leasing Revenue, Various
University of California Projects
6.60%, 12/01/22 ........................... 500,000 562,500
Sacramento, California Certificates
of Participation, Public Facilities Project,
6.00%, 7/01/12 ............................ 750,000 753,750
Santa Barbara County, California
Certificates of Participation,
6.40%, 2/01/11 ............................ 500,000 511,875
----------
1,828,125
----------
Sewer Revenue (6.8%):
San Francisco, California City
& County Sewer Revenue Capital
Appreciation, 6.07%, 10/01/10 (b) ......... 500,000 220,000
San Francisco, California City &
County Sewer Revenue,
5.90%, 10/01/08 ........................... 600,000 624,750
San Jose-Santa Clara, California
Waste Authority Sewer Revenue,
5.38%, 11/15/20 ........................... 700,000 653,625
----------
1,498,375
----------
Transportation Revenue (14.6%):
Contra Costa, California Transportation
Authority Sales Tax Revenue,
5.50%, 3/01/01 ........................... 500,000 519,375
Long Beach, California Harbor
Revenue, 5.25%, 5/15/25 .................. 1,000,000 898,750
Riverside County, California Transportation
Community Sales Tax Revenue,
5.75%, 6/01/08 ........................... 500,000 522,500
San Diego County, California Regional
Transportation Commission Sales
Tax Revenue, 4.75%, 4/01/08 .............. 765,000 728,660
San Francisco, California Bay
Area Rapid Transit District Sales
Tax Revenue, 5.35%, 7/01/07 .............. 500,000 503,750
----------
3,173,035
----------
University/Education Revenue (4.1%):
California Educational Facilities
Authority Revenue Bond, Pooled
College & University Project,
5.15%, 12/01/04 .......................... 500,000 498,125
University of California Certificate
of Participation, UCLA Center
Chiller Cogeneration Project,
6.00%, 11/01/21 ............................ 400,000 397,000
----------
895,125
----------
</TABLE>
See accompanying notes to financial statements.
-13-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin California Tax-Free Fund (Continued)
March 31, 1996
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- --------------------------------------------------------------------------
<S> <C> <C>
Water Revenue (10.1%):
California State Department of Water Resources
5.00%, 12/01/22 ........................... $300,000 $262,875
6.00%, 12/01/06 ........................... 500,000 540,000
Los Angeles, California Department
of Water & Power, Waterworks
Revenue, 6.20%, 7/01/12 ................... 600,000 619,500
Metropolitan Water District of Southern
California, 5.75%, 7/01/09 ................ 750,000 780,000
-----------
2,202,375
-----------
Total Municipal Long-Term Securities
(cost: $20,551,802) ......................... 20,888,462
-----------
Municipal Short-Term Securities (2.3%):
Industrial Development Revenue-Pollution
Control (2.3%):
Big Bear Lake, California Southwest
Gas Company Project,
3.30%, 4/03/96 (e) ..................... 100,000 100,000
California Pollution Control Authority
Solid Waste Disposal Revenue,
3.30%, 4/03/96 (c) ..................... 300,000 300,000
California Pollution Control
Financing Authority, Shell Oil Company
Project B, 3.50%, 4/01/96 (c) .......... 100,000 100,000
-----------
500,000
-----------
Total Municipal Short-Term Securities
(cost: $500,000) ............................. 500,000
-----------
Total Investments in Securities
(cost: $21,051,803) (1) (98.2%) .............. 21,388,462
Other Assets Less Liabilities (1.8%) ........... 384,006
-----------
Net Assets (100%) .............................. $21,772,468
===========
</TABLE>
- ------------------------------------------------
Notes to Schedule of Investments
(a) Securities are valued in accordance with procedures described in note 1 to
the financial statements.
(b) Rate on these zero coupon bonds represents annualized yield to maturity
at March 31, 1996.
(c) These variable rate securities have maturities greater than one year but are
redeemable upon demand. For purposes of calculating the Fund's weighted
average maturity, the length to maturity of these investments is considered
to be the greater of the period until the interest rate is adjusted or until
the principal can be recovered by demand.
(d) Cost is the same for federal income tax purposes. The aggregate gross
unrealized appreciation and depreciation of investments in securities based
on this cost were as follows:
<TABLE>
<S> <C>
Gross unrealized appreciation ................. $457,565
Gross unrealized depreciation ................. (120,905)
--------
Net unrealized appreciation ................... $336,660
========
</TABLE>
See accompanying notes to financial statements.
-14-
<PAGE>
Schedule of Investments (Unaudited)
Griffin Growth & Income Fund
March 31, 1996
[PIE CHART APPEARS HERE]
<TABLE>
<S> <C>
Basic Industries 5%
Technology 3%
Consumer Services 17%
Financial Services 15%
Utilities 12%
Health Care 11%
Capital Goods 8%
Energy 8%
Miscellaneous 8%
Consumer Non-Durable 7%
Cash 6%
</TABLE>
Investment Categories Reflect Percentages of Investments in Securities
<TABLE>
<CAPTION>
Number of Market
Name of Issuer Shares Value (a)
- --------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Common Stocks (93.4%):
Basic Industries (5.1%):
Alumax (b) 13,600 $481,100
Betz Laboratories 7,900 367,350
Grace (WR) & Company 9,600 751,200
Mallinckrodt Group Inc. 26,800 1,008,350
Praxair Incorporated 9,400 374,825
Rayonier Incorporated 9,100 329,875
Reynolds Metals 11,200 662,200
United Dominion Industries 8,000 194,000
----------
4,168,900
----------
Capital Goods (7.7%):
General Electric 13,600 1,059,100
ITT Industries 15,400 392,700
Lockheed Martin Corporation 21,200 1,608,550
Phillips Electronics N.V. ADR 36,900 1,342,238
Raytheon Company 2,800 143,500
Rockwell International 20,200 1,189,275
TRW Incorporated 6,300 561,488
----------
6,296,851
----------
Consumer/Durable (2.1%):
Black & Decker 23,000 871,125
Ford Motor Company 24,300 835,313
----------
1,706,488
----------
Consumer/Non Durable (7.2%):
Dial Corporation Arizona 7,500 210,000
Fruit of the Loom Incorporated 26,600 688,275
Hasbro Incorporated 11,000 407,000
Loews Corporation 14,800 1,119,250
Philip Morris Companies Inc. 16,500 1,447,875
Polaroid Corporation 10,400 468,000
RJR Nabisco Holdings 21,700 656,425
Sherwin-Williams Company 9,400 417,125
Unilever N.V. ADR 3,200 434,400
----------
5,848,350
----------
Consumer Services (16.8%):
American Stores Company 25,400 838,200
Brinker International (b) 16,500 276,375
Darden 32,000 432,000
Dayton Hudson 14,200 1,205,225
Dillards Department Stores 9,900 342,788
Eckerd Corporation (b) 12,000 577,500
Harcourt General 19,300 875,738
ITT Corporation (b) 15,500 930,000
Kroger Company 32,800 1,328,400
Limited Inc. 15,664 297,616
Melville Corporation 35,700 1,280,738
Quebecor Printed (b) 15,000 270,000
Pittston Brink's Group 25,800 690,150
Pittston Burlington Group 12,800 251,200
Rite Aid Corporation 29,800 920,075
Safeway Company (b) 18,900 538,650
Sears Roebuck & Company 8,800 429,000
Tandy 12,000 555,000
Toys R Us (b) 35,400 955,800
Woolworth Corporation 43,900 685,938
----------
13,680,393
----------
Energy (8.0%):
Amerada Hess 11,400 627,000
Baker Hughes 19,100 558,675
Dresser Industries Inc. 24,900 759,450
Exxon Corporation 17,000 1,387,625
Gulf Canada Resources 36,000 171,000
Horsham Corporation ADR 36,600 535,275
Mapco Incorporated 8,800 491,700
Mobil Corporation 4,800 556,200
Repsol SA ADR 11,100 414,863
Tosco Corporation 8,000 375,000
Ultramar Corporation 10,500 303,188
YPF Sociedad ADR 13,900 279,738
----------
6,459,714
----------
Financial Services (14.7%):
ACE Limited ADR 5,700 254,363
Allmerica Financial Corporation 17,000 448,375
Allstate Corporation 20,500 863,563
American Express 20,300 1,002,313
American Financial Group 8,000 242,000
American International Group 7,250 678,782
Bank of Boston 16,900 838,663
BankAmerica Corporation 17,200 1,333,000
Baybanks 7,900 849,250
Dean Witter Discover 10,400 595,400
Equitable Companies 16,400 397,700
First Colony Corporation 20,000 477,500
Fleet Financial Group 9,635 390,218
IPC Holdings Limited (b) 9,000 187,875
ITT Hartford Group 5,700 279,300
Morgan, J.P. & Company 6,500 539,500
Prudential Reinsurance Holdings 26,800 633,150
</TABLE>
See accompanying notes to financial statements.
-15-
<PAGE>
===============================================================================
Schedule of Investments (Unaudited)
Griffin Growth & Income Fund (Continued)
March 31, 1996
<TABLE>
<CAPTION>
Number of Market
Name of Issuer Shares Value (a)
- -------------------------------------------------------------------------------
<S> <C> <C>
Republic New York Corporation..................... 7,700 $458,150
SAFECO Corporation................................ 17,600 589,600
St. Paul Companies Incorporated................... 16,600 921,300
-----------
11,980,002
-----------
Health Care (10.8%):
Allergan Inc...................................... 37,200 1,371,750
Baxter International Inc.......................... 33,700 1,524,925
Bristol-Myers Squibb.............................. 18,400 1,575,500
Ciba-Geigy AG ADR................................. 10,000 622,500
Columbia/HCA Healthcare........................... 20,152 1,163,778
Horizons/CMS Healthcare (b)....................... 15,100 211,400
Sandoz AG ADR..................................... 6,500 379,438
Schering-Plough................................... 16,800 976,500
SmithKline Beecham PLC ADR........................ 4,300 221,450
Tenet Healthcare.................................. 36,600 768,600
-----------
8,815,841
-----------
Real Estate Investment Trust (1.9%):
Associated Estates Realty......................... 2,100 43,050
Avalon Properties................................. 14,000 301,000
Camden Property Trust............................. 2,100 48,563
Equity Residential Properties Trust............... 7,000 218,750
Highwoods Properties.............................. 8,700 242,513
Liberty Property Trust............................ 14,200 292,875
Oasis Residential................................. 3,000 70,500
Smith, Charles E. Residential..................... 1,200 28,500
Storage USA....................................... 9,300 319,688
-----------
1,565,439
-----------
Technology (3.3%):
Digital Equipment Corporation (b)................. 14,100 777,263
Harris Corporation................................ 5,800 358,875
International Business Machines................... 7,900 877,888
Xerox Corporation................................. 5,100 640,050
-----------
2,654,076
-----------
Transportation (3.9%):
Canadian National Railway Company ADR............. 19,100 329,475
Canadian Pacific Limited ORD PAR.................. 54,500 1,090,000
CSX Corporation................................... 9,500 433,438
Union Pacific..................................... 19,100 1,310,738
-----------
3,163,651
-----------
Utilities (11.9%):
360 Communications Company (b).................... 36,233 865,063
AT&T Corporation.................................. 24,600 1,506,750
CMS Energy Corporation............................ 28,400 837,800
GTE Corporation................................... 29,600 1,298,700
Illinova Corporation Holding Co................... 25,600 720,000
MCI Communications................................ 40,100 1,213,025
Nynex Corporation................................. 22,200 1,107,225
Pacific Enterprises............................... 12,000 310,500
Pinnacle West Capital............................. 25,700 742,088
Public Service Company of New Mexico.............. 9,600 178,800
Sprint Corporation................................ 23,100 877,800
-----------
9,657,751
-----------
Total Common Stocks
(cost: $67,620,510)............................... $75,997,406
-----------
Short-Term Securities (5.9%):
Repurchase Agreement (5.9%):
State Street Bank & Trust Co., Master
Repurchase Agreement, 4.0%, 4/01/96
102% Collateralized by U.S. Government
Securities.................................... $4,806,000 4,806,000
-----------
Total Short-Term Securities
(cost: $4,806,000)................................ 4,806,000
-----------
Total Investments In Securities:
(cost: $72,426,499)(c)(99.3%)..................... 80,803,406
Other Assets Less Liabilities (0.7%)................ 570,788
-----------
Net Assets (100%)................................... $81,374,194
===========
</TABLE>
- ---------------------------------------------
Notes to Schedule of Investments
(a) Securities are valued in accordance with procedures described in note 1 to
the financial statements.
(b) Currently non-income producing.
(c) Cost is the same for federal income tax purposes. The aggregate gross
unrealized appreciation and depreciation of investments in securities based
on this cost were as follows:
<TABLE>
<S> <C>
Gross unrealized appreciation........... $8,998,666
Gross unrealized depreciation........... (621,759)
----------
Net unrealized appreciation............. $8,376,907
==========
</TABLE>
-16-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin Growth Fund
March 31, 1996
[PIE CHART APPEARS HERE]
Capital Equipment 4%
Consumer Cyclicals 5%
Resources 6%
Media & Communications 6%
Other 7%
Business Services 7%
Financial Services 9%
Retailing 9%
Health Care 15%
Technology 28%
Cash 4%
Investment Categories Reflect Percentages of Investments in Securities
<TABLE>
<CAPTION>
Number of Market
Name of Issuer Shares Value(a)
- --------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Common Stocks (97.3%):
Business Services (7.2%):
American List Corp.......................... 500 $15,750
Catalina Marketing (b)...................... 500 39,063
CUC International (b)....................... 2,100 61,425
Equifax Inc................................. 2,600 52,325
Heritage Media Corp. (b).................... 800 28,700
H & R Block................................. 400 14,450
Kelly Services Cl.A (b)..................... 1,000 32,031
Manpower.................................... 1,500 46,500
Medaphis Corp (b)........................... 1,600 77,600
Mutual Risk Management L.T.D................ 2,100 86,888
Paychex Inc................................. 1,400 81,900
Primark Corporation (b)..................... 800 29,600
Reuters Holdings............................ 1,800 117,225
Robert Half International Inc. (b).......... 900 43,763
Sanifill Inc. (b)........................... 700 26,863
Service Corporation International........... 1,200 58,500
Sylvan Learning Systems (b)................. 1,700 60,775
Western Waste Industries (b)................ 1,400 53,375
---------
926,733
---------
Capital Equipment (4.2%):
Agco Corp................................... 2,300 55,488
Alamo Group Inc............................. 1,200 21,450
Alco Standard Corp.......................... 1,700 88,613
Anixter International Inc. (b).............. 2,200 37,125
Briggs and Stratton......................... 800 34,500
Carcade Corp................................ 1,000 14,250
Commercial Metals Co........................ 900 25,875
Danaher Corp................................ 900 33,300
Danka Business Systems Inc. ADR............. 800 33,800
Greenfield Industries Inc................... 800 27,700
Kennametal Inc.............................. 800 28,900
Littlelfuse Inc. (b)........................ 500 18,875
Parker Hannifin............................. 800 30,000
Teleflex Inc................................ 1,700 76,713
Trimas Corporation.......................... 800 17,600
---------
544,189
---------
Consumer Cyclicals (4.8%):
Bad Bath & Beyond (b)....................... 1,500 $79,125
Clayton Homes Inc........................... 850 17,744
Harley-Davidson Inc......................... 1,200 46,650
Harman International Industries............. 810 30,375
Lafarge Corp................................ 2,900 54,738
Lennar Corp................................. 900 22,388
Lilly Industries............................ 1,700 23,163
National Health Investors................... 1,200 39,000
Oakwood Holmes Corp......................... 1,400 69,475
Property Trust Of America................... 1,900 41,800
Rouse Company............................... 1,700 37,188
Sherwin-Williams Co......................... 1,100 48,813
Storm Ruger & Co Inc........................ 1,000 38,500
USG Corporation (b)......................... 900 22,838
Wabush National Corp........................ 700 13,213
Williams-Sonoma Inc. (b).................... 1,600 36,400
---------
621,410
---------
Consumer/Non-Durable (4.0%):
Callaway Golf Co............................ 1,200 32,100
Goodmark Foods (b).......................... 1,500 23,250
Hormel Food Corp............................ 1,100 28,875
Lancaster Colony............................ 1,165 43,396
Mattel Inc.................................. 1,625 44,078
Mondavi Robert Corp. (b).................... 1,100 28,325
Nautica Enterprises (b)..................... 1,650 78,788
Sealed Air (b).............................. 1,500 51,188
Tootsie Roll Industries..................... 1,030 37,595
Ultratech Stepper (b)....................... 500 8,813
Unifi Inc................................... 1,000 24,625
Unitog Co................................... 1,400 35,000
Westwood One Inc. (b)....................... 2,100 38,588
Wolverine World Wide........................ 1,200 33,600
---------
508,221
---------
Financial Services (9.4%):
Advanta Corp. CL B.......................... 500 23,750
Ambac Inc................................... 1,000 48,125
Bank of New York Co. Inc.................... 900 46,350
Baybanks Inc................................ 300 32,250
City National Inc........................... 2,200 29,975
Crestar Financial Corp...................... 300 17,250
Equitable of Iowa Companies................. 1,100 39,325
Finova Group Inc............................ 1,100 60,088
First American Corp., Tennessee............. 1,500 66,750
First Bank Systems.......................... 900 53,663
First USA Inc............................... 1,100 62,288
Franklin Resources Inc...................... 1,000 57,000
Green Tree Financial Corp................... 1,800 61,875
JSB Financial Inc........................... 1,400 47,075
Mercury Finance Co.......................... 2,600 36,725
MGIC Investment Corporation................. 900 49,050
North America Mortgage Co................... 1,200 24,600
Northern Trust Corporation.................. 900 48,600
Norwest..................................... 1,060 38,955
Progressive Corporation..................... 1,100 49,088
</TABLE>
See accompanying notes to financial statements.
-17-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin Growth Fund (Continued)
March 31, 1996
<TABLE>
<CAPTION>
Number of Market
Name of Issuer Shares Value (a)
- -------------------------------------------------------------------------------
<S> <C> <C>
Quick & Reilly Group............................... 1,150 $33,925
Raymond James Financial Inc. ...................... 800 18,000
Roosevelt Financial Group Inc. .................... 1,800 33,300
Charles Schwab Corporation......................... 2,500 64,063
State Street Boston Corporation.................... 1,100 55,000
United Asset Management............................ 1,000 46,375
Vesta Insurance Group (b).......................... 1,350 44,044
Zurich Reinsurance Centre Holdings................. 900 29,363
----------
1,216,852
----------
Health Care (14.8%):
Drugs & Medicine (5.3%):
Amgen (b).......................................... 2,400 139,500
Amway Asia Pacific LTD. ........................... 1,100 36,713
Biogen Inc. (b).................................... 1,800 107,100
Cardinal Health Inc. .............................. 1,300 83,525
Diagnostic Products Corporation.................... 1,500 60,563
Forest Laboratories Inc. (b)....................... 1,200 58,500
Human Genome Science (b)........................... 1,000 38,500
Isis Pharmaceuticals (b)........................... 2,200 25,575
Life Technologies.................................. 1,800 50,400
MediSense Incorporated (b)......................... 1,200 53,475
Mylan Laboratories Inc. ........................... 1,200 25,200
Roberts Pharmaceutical (b)......................... 600 11,325
----------
690,376
----------
Health Care/Non-Drug (2.5%):
Amsco International (b)............................ 1,900 26,600
Boston Scientific Corporation (b).................. 1,100 50,600
Guidant Corporation................................ 1,200 64,950
Medtronic Inc. .................................... 1,000 59,625
Omnicare Inc. ..................................... 700 37,713
Sola International (b)............................. 1,500 46,688
Summit Technology (b).............................. 1,350 31,894
----------
318,070
----------
HMO/Hospital Management (7.0%):
Apria HealthCare Group (b)......................... 1,100 34,925
Health Management Association CLA (b).............. 2,150 75,250
Healthcare & Retirement Corp. (b).................. 1,500 56,625
Humana Inc. (b).................................... 1,000 25,125
MedPartners/Mullikin Incorporated (b).............. 996 28,386
Mid-Atlantic Medical Services Inc. ................ 1,100 25,438
Ornda Healthcorp (b)............................... 2,400 69,000
Oxford Health Plans Inc. (b)....................... 700 61,425
PacifiCare Health Systems (b)...................... 700 59,675
PhyCor Incorporated (b)............................ 1,000 44,000
Sierra Health Services (b)......................... 1,500 48,938
Sybron International Corp. (b)..................... 2,100 51,450
United HealthCare Corp. ........................... 2,100 129,150
Universal Health Services (b)...................... 900 47,813
U.S. Healthcare Inc. .............................. 1,300 59,638
Vencor Inc. (b).................................... 2,400 82,800
----------
899,638
----------
----------
Total Health Care..................................... 1,908,084
----------
Media & Communications (6.4%):
Belo (A.H.)........................................ 900 $30,600
Carmike Cinemas (b)................................ 2,300 53,325
Cellular Communications of Puerto Rico (b)......... 1,100 29,700
Centennial Cellular Corp. (b)...................... 1,600 24,400
Central Newspaper Inc. ............................ 1,300 46,313
Clear Channel Communications Inc. (b).............. 1,900 107,350
Comcast Corp. ..................................... 1,800 31,838
CommNet Cellular (b)............................... 1,300 36,238
Frontier Corp. .................................... 1,100 34,650
Gaylord Entertainment.............................. 1,000 27,000
LCI International Inc. (b)......................... 3,100 75,950
Paging Network Inc. (b)............................ 2,200 55,000
Reynolds & Reynolds................................ 1,300 53,300
Scholastic Corporation (b)......................... 900 61,875
TCA Cable TV Inc. ................................. 300 8,738
U.S. Cellular Corp. (b)............................ 900 31,050
Vanguard Cellular Systems (b)...................... 2,800 56,000
Vodafone Group ADR................................. 1,600 60,000
----------
822,327
----------
Resources (6.2%):
Airgas Inc. (b).................................... 2,500 99,375
Apache Corp. ...................................... 1,800 48,375
B J Services Co. (b)............................... 1,100 36,850
Camco International................................ 1,400 44,100
Devon Energy Corporation........................... 1,800 42,300
Noble Affiliates................................... 1,600 52,000
Oil-Dri Corporation of America..................... 2,000 26,750
Pioneer Group Inc. ................................ 1,100 31,900
Pride Petroleum Services Inc. (b).................. 3,000 42,375
Schulman (A)....................................... 1,100 23,238
Smith International (b)............................ 2,000 50,500
Sonat Inc. ........................................ 1,200 43,200
Tosco Corp. ....................................... 1,000 46,875
Triton Energy Corp. (b)............................ 500 27,875
United Meridian Corp. (b).......................... 2,500 59,688
Wellman Inc. ...................................... 800 18,800
Willamette Industries.............................. 1,000 60,250
Worthington Industries Inc. ....................... 2,100 41,738
----------
796,189
----------
Retailing (8.9%):
Apple South Inc. .................................. 1,100 26,950
Applebees International Inc. ...................... 900 22,500
Autozone Inc. (b).................................. 1,700 57,588
Circuit City Stores Inc. .......................... 1,000 29,875
Dollar General Corp. .............................. 2,900 84,100
Eckerd Inc. (b).................................... 1,000 48,125
Gap Inc. .......................................... 400 22,150
General Nutrition (b).............................. 1,700 42,500
Harrah's Entertainment Inc. (b).................... 1,200 35,250
HFS Inc. (b)....................................... 3,100 150,710
La Quinta Inns Inc. ............................... 1,100 32,313
Lands' End Inc. (b)................................ 2,600 45,500
Lowe's Companies Inc. ............................. 700 25,025
Marcus Inc. (b).................................... 1,050 27,694
</TABLE>
See accompanying notes to financial statements.
-18-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
Griffin Growth Fund (Continued)
March 31, 1996
<TABLE>
<CAPTION>
Number of Market
Name of Issuer Shares Value (a)
- --------------------------------------------------------------------------------
<S> <C> <C>
Micro Warehouse Inc. (b)......................... 800 $33,200
Mirage Resorts (b)............................... 1,600 70,200
Outback Steakhouse Inc. (b)...................... 1,500 56,531
Pep Boys-Manny, Moe & Jack....................... 900 30,150
Safeway Inc. (b)................................. 1,600 45,600
Sbarro Inc. ..................................... 1,400 35,350
Starbucks Corp. (b).............................. 1,800 41,963
The Men's Wearhouse Inc. (b)..................... 1,600 50,400
Viking Office Products (b)....................... 1,700 94,563
Zale Corp. (b)................................... 2,300 39,531
------------
1,147,768
------------
Technology (28.8%):
Business Machines (2.0%)
Ceridian Corporation (b)......................... 2,000 86,000
Compaq Computer Corp. (b)........................ 800 30,900
Silicon Graphics (b)............................. 1,400 35,000
Sun Microsystems Inc. (b)........................ 2,500 109,375
------------
261,275
------------
Communications Equipment (4.4%):
Aspect Telecommunications Corp. (b).............. 800 36,600
Cidco Inc. (b)................................... 700 22,575
Coherent Communication Systems Corp. (b)......... 1,400 29,072
DSC Communications (b)........................... 700 18,900
Ericsson L.M. Telephone Co. ADR (b).............. 4,400 94,050
General Instrument Corp. (b)..................... 1,200 32,850
Glenayre Technologies Inc. (b)................... 1,125 43,031
Pairgain Technologies............................ 500 32,375
Picure Tel (b)................................... 900 27,900
Stratacom Inc. (b)............................... 1,100 40,288
Tellabs Inc. (b)................................. 1,300 62,888
US Robotics Corp. (b)............................ 1,000 129,250
------------
569,779
------------
Computer Communications (4.5%):
3Com Corp (b).................................... 1,400 55,825
Ascend Communications Inc. (b)................... 1,700 91,588
Bay Networks Inc. (b)............................ 1,900 58,425
Cabletron Systems Inc. (b)....................... 800 53,000
Cascade Communications (b)....................... 900 80,775
Cisco Systems Inc. (b)........................... 2,100 97,388
Fore Systems (b)................................. 600 42,900
S3 Incorporated (b).............................. 2,000 23,875
Shiva Corporation................................ 500 45,375
Network General Corp. (b)........................ 900 36,000
------------
585,151
------------
Computer/Electronic Equipment (3.6%):
Applied Materials Inc. (b)....................... 1,200 41,850
Cognex Corp. (b)................................. 800 20,500
EMC Corp.-Mass (b)............................... 1,900 41,563
Imput/Output Incorporated (b).................... 1,200 37,200
KLA Instruments (b).............................. 1,400 31,675
Lam Research Corp. (b)........................... 800 28,000
Seagate Technology (b)........................... 1,600 87,600
Security Dynamics Technologies (b)............... 700 37,100
Symbol Technologies (b).......................... 900 31,613
Tektronics Inc................................... 1,000 $32,500
Teradyne (b)..................................... 1,200 20,100
Thermo Electron Corporation...................... 900 53,550
------------
463,251
------------
Computer Services (2.5%):
America Online Inc. (b).......................... 1,300 72,800
Control Data Systems Inc. (b).................... 600 11,888
First Data....................................... 1,651 116,396
HBO & Co......................................... 900 84,825
Health Management Systems (b).................... 1,500 42,375
------------
338,284
------------
Computer Software (6.4%):
Adobe Systems Inc. .............................. 1,300 41,925
BMC Software Inc. (b)............................ 1,300 71,175
Cadence Design Systems (b)....................... 1,400 61,775
Broderbund Software Inc. (b)..................... 700 26,425
Davidson & Associates Incorporated (b)........... 600 14,025
Edmark Corporation (b)........................... 800 19,200
Electronic Arts Inc. (b)......................... 700 18,550
FTP Software Inc. (b)............................ 700 8,575
Hummingbird Communications (b)................... 800 30,200
Informix Corp. (b)............................... 1,800 47,475
Intuit (b)....................................... 900 40,500
Macromedia (b)................................... 1,700 72,675
Minnesota Educational Computers (b).............. 700 15,750
Oracle Corp. (b)................................. 2,200 103,675
Parametric Technology (b)........................ 800 31,300
People Soft Inc. (b)............................. 1,300 74,750
Sierra On-Line (b)............................... 900 30,263
Sybase Inc, (b).................................. 1,000 23,250
Symantec Corp. (b)............................... 3,200 41,200
Synopsys Inc. (b)................................ 800 25,600
Wonderware Corporation (b)....................... 1,400 32,900
------------
831,188
------------
Electronics (5.2%):
Altera Corporation (b)........................... 800 44,700
Andrew Corp. (b)................................. 2,000 76,500
Atmel (b)........................................ 1,400 35,700
Integrated Device Technology (b)................. 1,900 21,613
International Rectifier Corp (b)................. 2,000 36,000
Linear Technology Corp. (b)...................... 2,300 96,025
LSI Logic Corp. (b).............................. 1,500 40,125
Maxim Integrated Products (b).................... 4,300 133,300
Microchip Technology (b)......................... 900 24,750
Molex Incorporated Cl.A.......................... 1,525 48,800
SCI Systems (b).................................. 1,300 47,613
Vishay Intertechnology (b)....................... 1,100 29,700
Xilinx Inc. (b).................................. 1,300 41,275
------------
676,101
------------
------------
Total Technology................................... 3,715,029
------------
</TABLE>
See accompanying notes to financial statements.
-19-
<PAGE>
================================================================================
Schedule of Investments (Unaudited)
GRIFFIN GROWTH FUND (Continued)
March 31, 1996
<TABLE>
<CAPTION>
Number of
Shares or
Principal Market
Name of Issuer Amount Value(a)
- --------------------------------------------------------------------------------
<S> <C> <C>
Transportation (2.6%):
Air Express International ............... 1,000 $25,750
Atlantic Southwest Airlines ............. 1,100 28,188
Carnival Corp. .......................... 1,700 46,750
Comair Holdings Inc. .................... 1,100 38,225
Fritz Co. ............................... 900 35,100
Kansas City Southern Industries Inc. .... 1,200 55,800
M S Carriers Inc. (b) ................... 1,100 20,900
Werner Enterprises Inc. ................. 1,700 40,800
Wisconsin Central Transportation (b) .... 600 39,900
-----------
331,413
===========
Total Common Stocks
(cost: $11,421,765) ..................... 12,538,215
-----------
Short-Term Securities (4.3%):
Repurchase Agreement (4.3%):
State Street Bank & Trust Co. Master
Repurchase Agreement, 4.0%, 4/01/96
102% Collateralized by U.S.
Government Securities................ $558,000 558,000
-----------
Total Short-Term Securities
(cost: $558,000) .................... 558,000
-----------
Total Investments In Securities
(cost: $11,979,765) (c) (101.6%)..... 13,096,215
Other Assets Less Liabilities (-1.6%)........ (203,342)
-----------
Net Assets (100%)............................ $12,892,873
===========
</TABLE>
- ---------------------------------------------
Notes to Schedule of Investments
(a) Securities are valued in accordance with procedures described in note 1
to the financial statements.
(b) Current non-income producing.
(c) Cost is the same for federal income tax purposes. The aggregate gross
unrealized appreciation and depreciation of investments in securities
based on this cost were as follows:
<TABLE>
<S> <C>
Gross unrealized appreciation ........... $1,525,907
Gross unrealized depreciation ........... (409,457)
----------
Net unrealized appreciation ............. $1,116,450
==========
</TABLE>
See accompanying notes to financial statements.
-20-
<PAGE>
================================================================================
Statements of Assets and Liabilities
(Unaudited)
March 31, 1996
<TABLE>
<CAPTION>
Money Tax-Free Short-Term
Market Money Bond
Fund Market Fund Fund
============ =========== ===========
<S> <C> <C> <C>
Assets
Investments:
In securities, at market value* (note 1)......................... $158,938,260 $11,255,358 $11,600,410
Cash............................................................... 6 78,304 83,543
Receivables:
Dividends and interest........................................... 997,886 112,730 208,895
Fund shares sold................................................. 579,906 23,018 270,981
Investment securities sold....................................... 0 0 0
Other receivables................................................ 598 443 0
Organization expenses, net of amortization (note 1)................ 43,642 43,642 21,436
------------ ----------- -----------
Total assets............................................ 160,560,298 11,513,495 12,185,265
------------ ----------- -----------
Liabilities
Distributions to shareholders...................................... 640,852 25,747 48,642
Fund shares redeemed............................................... 648,958 7,750 64,248
Payable for securities purchased................................... 0 0 205,765
Payable for organizational expenses................................ 0 46,455 22,274
Payable for distribution fee (note 2).............................. 26,824 0 8
Payable for administration fee (note 2)............................ 26,920 0 0
Other accrued expenses............................................. 98,340 9,927 4,925
------------ ----------- -----------
Total liabilities....................................... 1,441,894 89,879 345,862
------------ ----------- -----------
Net Assets.............................................. $159,118,404 $11,423,616 $11,839,403
============ =========== ===========
Net assets consist of:
Capital stock, Class A or single Class........................... 159,101 11,428 1,178
Capital stock, Class B........................................... N/A N/A 2
Additional paid in capital, Class A or single class.............. 158,941,810 11,416,982 11,907,894
Additional paid in capital, Class B.............................. N/A N/A 19,584
Undistributed net investment income.............................. 7,530 0 8
Undistributed net realized gain (loss) on investments
and futures contracts......................................... 9,963 (4,794) (104)
Net unrealized appreciation (depreciation) on investments
and futures contracts......................................... 0 0 (89,159)
------------ ----------- -----------
Net Assets.............................................. $159,118,404 $11,423,616 $11,839,403
============ =========== ===========
Computations of net asset value and offering price (note 4):
Net assets, Class A or single class.............................. $159,118,404 $11,423,616 $11,819,860
Shares outstanding, Class A or single class...................... 159,100,911 11,428,410 1,178,254
Net asset value, Class A or single class......................... $1.00 $1.00 $10.03
Maximum offering price, Class A or single class.................. $1.00 $1.00 $10.39
Net asset, Class B............................................... N/A N/A $19,543
Shares outstanding, Class B...................................... N/A N/A 1,949
Net asset value and offering price, Class B...................... N/A N/A $10.02
*Investments in securities, at identified cost..................... $159,938,260 $11,255,358 $11,689,569
</TABLE>
See accompanying notes to financial statements.
-21-
<PAGE>
================================================================================
<TABLE>
<CAPTION>
U.S. Municipal California Growth &
Government Bond Bond Tax-Free Income Growth
Income Fund Fund Fund Fund Fund Fund
============= =========== ========== =========== =========== ===========
<S> <C> <C> <C> <C> <C>
$43,125,345 $20,727,650 $6,337,672 $21,388,462 $80,803,406 $13,096,215
12,518 63,634 26,021 82,371 986 12,248
492,128 302,125 81,310 347,156 189,645 5,779
532,806 543,402 44,493 81,026 738,492 164,679
0 0 0 0 1,189,784 3,193
1,305 69 630 280 3,465 176
43,642 43,642 43,642 43,642 43,642 21,436
- ------------- ----------- ---------- ----------- ----------- -----------
44,207,744 21,680,522 6,533,768 21,942,937 82,969,420 13,303,726
- ------------- ----------- ---------- ----------- ----------- -----------
204,580 104,609 26,270 91,844 0 0
59,789 63,890 5,031 16,965 637,390 287,291
2,006,771 63,505 0 0 876,391 115,020
0 46,455 46,455 46,455 0 0
1,365 124 88 717 16,280 242
1,954 0 0 0 13,304 0
35,695 14,228 2,736 14,488 51,861 8,300
- ------------- ----------- ---------- ----------- ----------- -----------
2,310,154 292,811 80,580 170,469 1,595,226 410,853
- ------------- ----------- ---------- ----------- ----------- -----------
$41,897,590 $21,387,711 $6,453,188 $21,772,468 $81,374,194 $12,892,873
============= =========== ========== =========== =========== ===========
4,246 2,383 693 2,514 4,693 980
362 33 26 229 588 49
39,025,632 21,454,324 6,246,503 20,065,123 61,507,123 11,232,548
3,354,065 299,653 234,654 1,822,784 8,426,216 574,462
2,365 1,219 568 4,661 67,739 8,222
(51,245) 6,314 (85,558) (459,503) 2,990,858 (39,838)
(437,295) (376,215) 57,302 336,660 8,376,907 1,116,450
- ------------- ----------- ---------- ----------- ----------- -----------
$41,897,590 $21,387,711 $6,453,188 $21,772,468 $81,374,194 $12,892,873
============= =========== ========== =========== =========== ===========
$38,603,528 $21,094,067 $6,221,729 $19,953,540 $72,322,514 $12,280,148
4,246,199 2,383,456 692,741 2,514,315 4,693,394 980,051
$9.09 $8.85 $8.98 $7.94 $15.41 $12.53
$9.52 $9.27 $9.40 $8.31 $16.14 $13.12
$3,294,064 $293,644 $231,459 $1,818,928 $9,049,891 $612,752
362,061 33,204 25,762 229,174 587,923 48,972
$9.10 $8,84 $8.98 $7.94 $15.39 $1,251
$43,562,640 $21,103,865 $6,280,370 $21,051,802 $72,426,499 $11,979,765
</TABLE>
See accompanying notes to financial statements.
-22-
<PAGE>
Statements of Operations
(Unaudited)
For the six months ended March 31, 1996
<TABLE>
<CAPTION>
Money Tax-Free Short-Term
Market Money Bond
Fund Market Fund Fund
============== ============== ==============
<S> <C> <C> <C>
Investment income:
Interest................................................................ $4,221,358 $175,087 $20,047
Dividends (net of foreign withholding taxes of $1,532 and
$58 for the Growth & Income Fund and Growth Fund respectively)....... 0 0 0
------------- -------------- --------------
Total Income......................................................... 4,221,358 175,087 20,047
------------- -------------- --------------
Expenses:
Advisory fees (note 2).................................................. 373,515 23,984 17,842
Administration and accounting fees (note 2)............................. 149,406 9,593 7,137
Distribution fees (note 2).............................................. 149,406 9,593 8,990
Amortization of organization expenses................................... 8,577 8,577 2,558
Legal and audit fees.................................................... 43,251 14,537 11,370
Registration fees....................................................... 12,886 1,251 1,799
Directors' fees......................................................... 3,510 3,510 3,510
Shareholder reports..................................................... 23,431 1,291 1,378
Insurance expense....................................................... 9,408 516 377
Custodian fees.......................................................... 4,260 1,859 602
Printing and postage.................................................... 40,093 7,391 3,523
------------- -------------- --------------
Total expenses....................................................... 817,743 82,102 59,086
Less:
Waived fees (note 2).................................................... (403,740) (43,170) (33,923)
Reimbursement from administrator (note 2)............................... 0 (11,599) (14,111)
Expense reductions (note 5)............................................. (2,309) (854) (9)
------------- -------------- --------------
Net expenses......................................................... 411,694 26,479 11,043
------------- -------------- --------------
Net investment income................................................ 3,809,664 148,608 193,004
------------- -------------- --------------
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) on sale of investments......................... 9,963 0 32
Net realized gain (loss) on sale of futures contracts................... 0 0 0
Net change in unrealized appreciation (depreciation) of investments..... 0 0 (100,410)
------------- -------------- --------------
Net realized and unrealized gain (loss) on investments............... 9,963 0 (100,378)
------------- -------------- --------------
Net increase in net assets resulting from operations................. $3,819,627 $148,608 $92,626
============= ============== ==============
</TABLE>
<PAGE>
================================================================================
<TABLE>
<CAPTION>
U.S. Municipal California Growth &
Government Bond Bond Tax-Free Income Growth
Income Fund Fund Fund Fund Fund Fund
=============== ============ ============== ============= ============= ==============
<S> <C> <C> <C> <C> <C>
$1,214,223 $551,284 $157,291 $568,603 $ 94,595 $ 13,510
0 0 0 0 639,103 23,638
- --------------- ------------ -------------- ------------- ------------- --------------
1,214,223 551,284 157,291 568,603 733,698 37,148
- --------------- ------------ -------------- ------------- ------------- --------------
92,387 41,612 14,891 53,132 180,919 24,226
36,955 16,645 5,957 21,253 60,306 8,075
55,828 21,623 7,858 31,411 94,362 11,384
8,577 8,577 8,577 8,577 8,577 2,558
19,756 15,306 13,744 16,947 23,381 11,949
4,795 3,103 2,444 2,183 8,297 1,991
3,510 3,510 3,510 3,510 3,510 3,510
5,875 2,528 975 3,647 7,985 1,833
2,300 866 399 1,449 3,223 516
6,641 2,227 996 1,362 10,446 7,996
20,677 10,108 5,811 11,397 21,454 4,052
- --------------- ------------ -------------- ------------- ------------- --------------
257,301 126,114 65,162 154,868 422,460 78,090
(173,670) (79,339) (28,431) (102,565) (199,117) (42,825)
(2,277) (12,543) (25,036) (10,518) 0 (17,923)
(669) (93) (996) (1,362) (23) (10)
- --------------- ------------ -------------- ------------- ------------- --------------
80,685 34,130 10,699 40,423 223,320 17,332
- --------------- ------------ -------------- ------------- ------------- --------------
1,133,538 517,145 146,592 528,181 510,378 19,816
- --------------- ------------ -------------- ------------- ------------- --------------
(53,082) 71,940 20,993 60,930 3,386,003 (39,335)
0 0 (435) 446 0 0
(658,261) (517,117) (40,347) (52,017) 2,513,506 759,883
- --------------- ------------ -------------- ------------- ------------- --------------
(711,343) (445,177) (19,789) 9,359 5,899,509 720,548
- --------------- ------------ -------------- ------------- ------------- --------------
$ 422,195 $ 71,968 $126,803 $537,540 $6,409,887 $740,364
=============== ============ ============== ============= ============= ==============
</TABLE>
See accompanying notes to financial statements.
-24-
<PAGE>
================================================================================
Statements of Changes in Net Assets
(Unaudited)
For the periods ended March 31, 1996 and September 30, 1995
<TABLE>
<CAPTION>
Tax-Free Short-Term
Money Market Fund Money Market Fund Bond Fund
============================ ========================= =======================
Six Months Period Six Months Period Six Months Period
Ended 3/31/96 Ended Ended 3/31/96 Ended Ended 3/31/96 Ended
(Unaudited) 9/30/95 (Unaudited) 9/30/95 (Unaudited) 9/30/95*
-------------- ----------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income................... $ 3,809,664 $ 3,563,966 $ 148,608 $ 317,060 $ 193,004 $ 41,698
Net realized gain (loss) on sale
of investments....................... 9,963 7,862 0 (4,765) 32 (136)
Net change in unrealized appreciation
(depreciation) of investments 0 0 0 0 (100,410) 11,251
------------- ----------- ----------- ---------- ----------- ----------
Net increase (decrease) in net
assets resulting from operations 3,819,627 3,571,828 148,608 312,295 92,626 52,813
------------- ----------- ----------- ---------- ----------- ----------
Distributions to shareholders:
From net investment income
Class A................................. (3,809,664) (3,563,929) (148,608) (317,060) (192,549) (41,587)
Class B................................. N/A N/A N/A N/A (447) (111)
From realized gain on investments
Class A................................. 0 0 0 0 0 0
Class B................................. N/A N/A N/A N/A 0 0
------------- ----------- ----------- ---------- ----------- ----------
Total distributions........... (3,809,664) (3,563,929) (148,608) (317,060) (192,996) (41,698)
------------- ----------- ----------- ---------- ----------- ----------
Net increase in net assets resulting
from capital share transactions (note 4)... 79,144,438 29,968,679 2,802,282 (2,006,540) 8,344,215 3,584,443
Increase in net assets.................. 79,154,401 29,976,578 2,802,282 (2,011,305) 8,243,845 3,595,558
------------- ----------- ----------- ---------- ----------- ----------
Net assets:
Beginning net assets....................... 79,964,003 49,987,425 8,621,334 10,632,639 3,595,558 0
------------- ----------- ----------- ---------- ----------- ----------
Ending net assets.......................... $159,118,404 $79,964,003 $11,432,616 $8,621,334 $11,839,403 $3,595,558
============ =========== =========== ========== =========== ==========
<CAPTION>
U.S. Government
Income Fund
==========================
Six Months Period
Ended 3/31/96 Ended
(Unaudited) 9/30/95
----------- -----------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income................... $ 1,133,538 $ 1,638,235
Net realized gain (loss) on sale
of investments....................... (53,082) 90,910
Net change in unrealized appreciation
(depreciation) of investments 658,261 1,217,932
----------- -----------
Net increase (decrease) in net
assets resulting from operations 422,195 2,947,077
----------- -----------
Distributions to shareholders:
From net investment income
Class A................................. (1,065,602) (1,617,207)
Class B................................. (71,857) (17,465)
From realized gain on investments
Class A................................. (83,304) (7,074)
Class B................................. (6,387) (18)
----------- -----------
Total distributions (1,227,150) (1,641,764)
Net increase in net assets resulting
from capital share transactions (Note 4)... 11,830,974 10,407,829
----------- -----------
Increase in net assets.................. 11,026,019 11,713,142
----------- -----------
Net assets:
Beginning net assets....................... 30,871,571 19,158,429
----------- -----------
Ending net assets.......................... $41,897,590 $30,871,571
=========== ===========
</TABLE>
* Since commencement of operations on June 12, 1995
See accompanying notes to financial statements.
-25-
<PAGE>
================================================================================
<TABLE>
<CAPTION>
Municipal California
Bond Fund Bond Fund Tax-Free Fund
================================ ================================== ===================================
Six Months Period Six Months Period Six Months Period
Ended 3/31/96 Ended Ended 3/31/96 Ended Ended 3/31/96 Ended
(Unaudited) 9/30/95 (Unaudited) 9/30/95 (Unaudited) 9/30/95
-------------- ------------- -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
$517,145 $580,314 $146,592 $212,516 $528,181 $881,805
71,940 (36,089) 20,558 (1,240) 61,376 (52,357)
(517,117) 567,176 (40,347) 181,323 (52,017) 746,243
--------------- ------------- -------------- --------------- -------------- --------------
71,968 1,111,401 126,803 392,599 537,540 1,575,691
--------------- ------------- -------------- --------------- -------------- --------------
(517,376) (579,743) (144,252) (212,765) (499,436) (871,571)
(6,194) (2,096) (2,340) (282) (28,745) (11,133)
0 0 0 0 0 0
0 0 0 0 0 0
--------------- ------------- -------------- --------------- -------------- --------------
(517,570) (581,839) (146,592) (213,047) (528,181) (882,704)
9,661,653 4,103,204 904,848 2,778,752 1,505,627 5,749,069
--------------- ------------- -------------- --------------- -------------- --------------
9,216,051 4,632,766 885,059 2,958,304 1,514,986 6,442,056
--------------- ------------- -------------- --------------- -------------- --------------
12,171,660 7,538,894 5,568,129 2,609,825 20,257,482 13,815,426
--------------- ------------- -------------- --------------- -------------- --------------
$21,387,711 $12,171,660 $6,453,188 $5,568,129 $21,772,468 $20,257,482
=============== ============= ============== =============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Growth & Growth
Income Fund Fund
=============================== =================================
Six Months Period Six Months Period
Ended 3/31/96 Ended Ended 3/31/96 Ended
(Unaudited) 9/30/95 (Unaudited) 9/30/95
--------------- ------------- --------------- -------------
<S> <C> <C> <C>
$510,378 $539,489 $19,816 $9,708
3,386,003 905,872 (39,335) (503)
2,513,506 5,835,264 $759,883 356,567
--------------- ------------- --------------- -------------
6,409,887 7,280,625 740,364 365,772
--------------- ------------- --------------- -------------
(420,433) (525,863) (20,751) 0
(29,734) (18,368) (551) 0
(1,178,916) (79,572) 0 0
(97,876) (1,498) 0 0
--------------- ------------- --------------- -------------
(1,726,959) (625,301) (21,302) 0
35,320,928 20,541,065 7,838,081 3,969,958
--------------- ------------- --------------- -------------
40,003,856 27,196,389 8,557,143 4,335,730
--------------- ------------- --------------- -------------
41,370,338 14,173,949 4,335,730 0
--------------- ------------- --------------- -------------
$81,374,194 $41,370,338 $12,892,873 $4,335,730
=============== ============= =============== =============
</TABLE>
See accompanying notes to financial statements.
-26-
<PAGE>
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Supplemental information for a share outstanding for the Money Market Fund
six month period ended March 31, 1996 (unaudited) or
throughout each fiscal year or period ended September 30, 1996 1995 1994(a)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value - beginning of period $1.00 $1.00 $1.00
- -----------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.03 0.05 0.03
Net realized and unrealized gain (loss) on investments 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------
Total from investment operations 0.03 0.05 0.03
- -----------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income (0.03) (0.05) (0.03)
Distributions from net realized gain (loss) 0.00 0.00 0.00
Total distributions (0.03) (0.05) (0.03)
- -----------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value 0.00 0.00 0.00
- -----------------------------------------------------------------------------------------------
Net asset value - end of period $1.00 $1.00 $1.00
===============================================================================================
Total return (not annualized) (d) 2.57% 5.52% 3.36%
===============================================================================================
Ratios/supplemental data:
Net assets, end of period (000) $159,118 $79,964 $49,988
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets (i) 0.55% 0.42% 0.15%
Ratio of net investment income to average net assets (ii) 5.07% 5.40% 4.25%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (g) 1.09% 1.29% 1.64%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (g) 4.54% 4.53% 2.76%
Portfolio Turnover N/A N/A N/A
Average Commission Rate Paid N/A N/A N/A
- ------------------------------------------------------------------------------------------------
<CAPTION>
Tax-Free
Supplemental information for a share outstanding for the Money Market Fund
six month period ended March 31, 1996 (unaudited) or
throughout each fiscal year or period ended September 30, 1996 1995 1994(a)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value - beginning of period $1.00 $1.00 $1.00
- ------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.03 0.03 0.02
Net realized and unrealized gain (loss) on investments 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------
Total from investment operations 0.03 0.03 0.02
- ------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment Income (0.03) (0.03) (0.02)
Distributions from net realized gain (loss) 0.00 0.00 0.00
Total distributions (0.03) (0.03) (0.02)
- ------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value 0.00 0.00 0.00
- ------------------------------------------------------------------------------------------------
Net asset value - end of period $1.00 $1.00 $1.00
================================================================================================
Total return (not annualized)(d) 1.56% 3.44% 2.22%
================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) $11,424 $8,621 $10,633
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets (i) 0.57% 0.44% 0.17%
Ratio of net investment income to average net assets (ii) 3.08% 3.39% 2.56%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (g) 1.68% 1.90% 2.28%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (g) 1.96% 1.92% 0.45%
Portfolio Turnover N/A N/A N/A
Average Commission Rate Paid N/A N/A N/A
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
U.S. Government Income Fund
Supplemental information for a share outstanding for the Class A Class B
six month period ended March 31, 1996 (unaudited) or ---------------------------------------------------------
throughout each fiscal year or period ended September 30, 1996 1995 1994(a) 1996 1995(c)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $9.24 $8.77 $9.50 $9.25 $8.67
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.29 0.63 0.56 0.27 0.52
Net realized and unrealized gain (loss) on investments (0.13) 0.47 (0.73) (0.13) 0.58
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.16 1.10 (0.17) 0.14 1.10
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income (0.29) (0.63) (0.56) (0.27) (0.52)
Distributions from net realized gain (loss) (0.02) 0.00 0.00 (0.02) 0.00
Total distributions (0.31) (0.63) (0.56) (0.29) (0.52)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value (0.15) 0.47 (0.73) (0.15) 0.58
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $9.09 $9.24 $9.10 $9.10 $9.25
================================================================================================================================
Total return (not annualized) (d) 1.71% 13.00% (1.83)% 1.46% 13.08%
================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) $38,604 $29,308 $19,158 $3,294 $1,564
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets (i) 0.40% 0.21% 0.09% 0.90% 0.79%
Ratio of net investment income to average net assets (ii) 6.15% 6.93% 6.24% 5.53% 5.71%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (g) 1.09% 1.63% 1.83% 1.81% 3.19%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (g) 5.47% 5.51% 4.49% 4.62% 3.31%
Portfolio Turnover 17.03% 46.96% 28.20% 17.03% 46.96%
Average Commission Rate Paid N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Bond Fund
Supplemental information for a share outstanding for the Class A Class B
six month period ended March 31, 1996 (unaudited) or ---------------------------------------------------------
throughout each fiscal year or period ended September 30, 1996 1995(e) 1994(a) 1996 1995(c)(e)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period $8.99 $8.47 $9.50 $8.98 $8.36
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income 0.28 0.58 0.52 0.26 0.49
Net realized and unrealized gain (loss) on investments (0.14) 0.52 (1.03) (0.14) 0.62
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.14 1.10 (0.51) 0.12 1.11
- --------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment Income (0.28) (0.58) (0.52) (0.26) (0.49)
Distributions from net realized gain (loss) 0.00 0.00 0.00 0.00 0.00
Total distributions (0.28) (0.58) (0.52) (0.26) (0.49)
- --------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value (0.14) 0.52 (1.03) (0.14) 0.62
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value - end of period $8.85 $8.99 $8.47 $8.84 $8.98
================================================================================================================================
Total return (not annualized)(d) 1.55% 13.53% (5.49%) 1.29% 13.58%
================================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) $21,094 $12,022 $7,539 $294 $150
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets (i) 0.40% 0.21% 0.09% 0.89% 0.78%
Ratio of net investment income to average net assets (ii) 6.18% 6.69% 6.29% 5.58% 5.56%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (g) 1.25% 2.20% 2.55% 1.96% 4.00%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (g) 5.34% 4.70% 3.83% 4.51% 2.34%
Portfolio Turnover 69.45% 327.31% 26.14% 69.45% 327.31%
Average Commission Rate Paid N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The fund commenced operations on October 19, 1993.
(b) The fund commenced operations on June 12, 1995.
(c) Class B shares were not offered until November 1, 1994.
(d) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charge.
(e) The fund was managed by Piper Capital Management, Inc. until December 1,
1994 when The Boston Company Asset Management, Inc. assumed management
responsibilities.
(f) The fund was managed by Piper Capital Management, Inc. until December 1,
1994 when Payden & Rygel Investment Counsel assumed management
responsibilities.
(g) Ratio reflects fees reduced in connection with specific agreements only for
periods ended after September 31, 1995.
See accompanying notes to financial statements.
-27-
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
Short-Term
Growth & Income Fund Bond Fund Growth Fund
Class A Class B Class A Class B Class A Class B
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995(e) 1994(a) 1996 1995(c)(e) 1996 1995(b) 1996 1995(b) 1996 1995(b) 1996 1996(b)
- ------------------------------------------------------------------------------------------------------------------------------------
$14.30 $11.14 $11.00 $14.29 $11.30 $10.05 $10.00 $10.05 $10.00 $11.66 $10.00 $11.65 $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
0.11 0.27 0.23 0.08 0.29 0.27 0.18 0.25 0.20 0.01 0.03 0.00 0.03
1.45 3.22 0.13 1.44 3.05 (0.02) 0.05 (0.03) 0.05 0.85 1.63 0.84 1.62
- ------------------------------------------------------------------------------------------------------------------------------------
1.56 3.49 0.36 1.52 3.34 (0.25) 0.23 0.23 0.25 0.86 1.66 0.84 1.65
- ------------------------------------------------------------------------------------------------------------------------------------
(0.10) (0.27) (0.22) (0.07) (0.27) (0.27) (0.27) (0.52) (0.20) (0.03) 0.00 (0.02) 0.00
(0.33) (0.06) 0.00 (0.33) (0.06) 0.00 (0.00) 0.00 (0.00) 0.00 0.00 0.00 0.00
(0.43) (0.33) (0.22) (0.40) (0.35) (0.27) (0.29) (0.52) (0.20) (0.03) 0.00 (0.02) 0.00
- ------------------------------------------------------------------------------------------------------------------------------------
1.13 3.16 0.14 1.12 2.99 (0.02) (0.15) 0.58 (0.15) 0.83 1.66 0.82 1.65
- ------------------------------------------------------------------------------------------------------------------------------------
$15.41 $14.30 $11.14 $15.39 $14.29 $10.03 $10.05 $10.02 $10.05 $12.53 $11.66 $12.51 $11.65
====================================================================================================================================
10.97% 31.93% 3.29% 10.69% 29.53% 2.53% 2.32% 2.17% 2.51% 7.77% 16.60% 7.57% 16.50%
====================================================================================================================================
$72,323 $38,483 $14,174 $9,050 $2,887 $11,820 $3,582 $20 $13 $12,280 $4,187 $613 $149
0.70% 0.43% 0.25% 1.08% 1.01% 0.30% 0.00% 0.79% 0.00% 0.41% 0.00% 0.90% 0.00%
1.71% 2.30% 2.81% 1.37% 1.64% 5.35% 5.91% 4.85% 5.54% 0.51% 1.20% 0.01% 1.07%
1.09% 1.80% 2.17% 1.70% 2.92% 1.39% 2.76% 2.16% 3.33% 1.49% 3.46% 2.21% 3.85%
1.33% 0.93% 0.89% 0.75% -0.27% 4.27% 3.15% 3.48% 2.21% -0.58% -2.26% -1.30% -2.78%
35.16% 92.01 13.90% 35.16% 92.01% 0.84% 1.05% 0.84% 1.05% 5.46% 0.06% 5.46% 0.06%
$0.0469 N/A N/A $0.0469 N/A N/A N/A N/A N/A $0.0300 N/A $0.0300 N/A
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Municipal Bond Fund California Tax-Free Fund
Class A Class B Class A Class B
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996 1995(f) 1994(a) 1996 1995(c)(f) 1996 1995 1994(a) 1996 1995(c)
- -------------------------------------------------------------------------------------------------------
$8.98 $8.60 $9.50 $8.98 $8.31 $7.92 $7.59 $8.50 $7.92 $7.35
- -------------------------------------------------------------------------------------------------------
0.23 0.47 0.42 0.20 0.38 0.20 0.41 0.36 0.18 0.34
1.45 0.38 (0.90) 0.00 0.67 0.02 0.33 (0.91) 0.02 0.57
- -------------------------------------------------------------------------------------------------------
0.23 0.85 (0.48) 1.20 1.05 0.22 0.74 (0.55) 0.20 0.91
- -------------------------------------------------------------------------------------------------------
(0.23) (0.47) (0.42) (0.20) (0.38) (0.20) (0.41) (0.36) (0.18) (0.34)
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
(0.23) (0.47) (0.42) (0.20) (0.38) (0.20) (0.41) (0.36) (0.18) (0.34)
- -------------------------------------------------------------------------------------------------------
0.00 0.38 (0.90) 0.00 0.67 0.02 0.33 (0.91) 0.02 0.57
- -------------------------------------------------------------------------------------------------------
$8.98 $8.98 $8.60 $8.89 $8.98 $7.94 $7.92 $7.59 $7.94 $7.92
=======================================================================================================
2.49% 10.18% (5.15%) 2.22% 12.86% 2.79% 10.13% (6.56%) 2.53% 12.00%
=======================================================================================================
$6,222 $5,512 $2,610 $231 $56 $19,954 $19,292 $13,815 $1,819 $966
0.38% 0.40% 0.25% 0.86% 0.90% 0.36% 0.32% 0.25% 0.85% 0.84%
4.92% 5.26% 5.03% 4.21% 4.26% 4.99% 5.36% 4.70% 4.42% 4.47%
1.92% 3.30% 3.99% 2.54% 5.56% 1.16% 1.65% 2.01% 1.86% 2.97%
3.38% 2.36% 1.29% 2.53% -0.40% 4.19% 4.03% 2.94% 3.41% 2.35%
10.34% 81.90% 81.42% 10.34% 81.90% 12.36% 86.69% 73.88% 12.36% 86.69%
N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
-28-
<PAGE>
================================================================================
Notes to Financial Statements (Unaudited)
(1) Significant Accounting Policies
Organization
------------
The Griffin Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment
company. As described in note 4, the Money Market and Tax-Free Money Market
Funds are authorized to offer one class of shares, and each of the other
series is authorized to issue shares of Class A and Class B. The Company
commenced operations on October 19, 1993 and consists of a non-diversified
fund, the California Tax-Free Fund, and eight separate diversified funds
(collectively, the "Funds"):
. The Money Market Fund
. The Tax-Free Money Market Fund
. The Short-Term Bond Fund
. The U.S. Government Income Fund
. The Municipal Bond Fund
. The Bond Fund
. The Growth & Income Fund
. The Growth Fund
The Money Market Fund and Tax-Free Money Market Fund commenced offering
shares on October 19, 1993. The U.S. Government Income Fund, Municipal Bond
Fund, California Tax-Free Fund, Bond Fund and Growth & Income Fund
commenced offering Class A shares on October 19, 1993, and offered Class B
shares beginning on November 1, 1994. The Short-Term Bond Fund and Growth
Fund commenced offering Class A shares and Class B shares on June 12, 1995.
The two classes of shares differ principally in their respective sales
charges, shareholder servicing fees and distribution fees. Shareholders of
each class may also bear certain expenses that pertain to each class. All
shareholders bear the common expenses of the Funds, and earn income from
the portfolio, pro rata based on the average daily net assets of each
class, without distinction between share classes. Dividends are declared
separately for each class. Gains are allocated to each class pro rata based
upon net assets of each class on the date of distribution. No class has
preferential dividend rights; differences in per share dividend rates are
generally due to differences in separate class expenses, including distri-
bution and shareholder servicing fees and from relative weightings of pro
rata income and gain allocations.
The California Tax-Free Fund concentrates its investments in a single state
and therefore may have more exposure to credit risk related to the State of
California than a fund with a broader geographical diversification.
The following significant accounting policies are consistently followed by
the Company in the preparation of its financial statements, and such
policies are in conformity with generally accepted accounting principles
for investment companies.
Securities Valuation
--------------------
For the Funds other than the Money Market Fund and Tax-Free Money Market
Fund, investments in securities for which the primary market is a national
securities exchange or the NASDAQ National Market System are stated at the
last reported sale price on the day of valuation or, if no sale has
occurred, at the latest quoted bid price. U.S. Government securities and
other securities for which current over-the-counter market quotations are
readily available (excluding debt securities maturing in 60 days or less)
are valued at latest quoted bid prices. If quoted prices are unavailable or
inaccurate, market values are determined based on quotes obtained from
brokers, dealers and/or based on averages of prices obtained from
independent pricing services. Debt securities maturing in 60 days or less
are valued at amortized cost, which approximates market value. Securities
and other assets for which current market quotations are not readily
available are valued at fair value as determined in good faith by or under
the direction of the Board of Directors.
The Money Market Fund and Tax-Free Money Market Fund use the amortized cost
method to value their portfolio securities and attempt to maintain constant
net asset values of $1.00 per share. The amortized cost method involves
valuing a security at its cost and amortizing any discount or premium over
the period until maturity, which approximates market value.
Security Transactions
---------------------
The Company records security transactions on the trade date. Dividend
income is recognized on the ex-dividend date,
-29-
<PAGE>
================================================================================
and interest income is recognized on a daily accrual basis. Realized gains
or losses are reported on the basis of identified cost of securities
delivered. Bond discounts and premiums are amortized as required by the
Internal Revenue Code.
Futures Contracts
-----------------
Each of the Funds except the Money Market Fund and Tax-Free Money Market
Fund may purchase futures contracts to gain exposure to market changes as
this may be more efficient or cost effective than actually buying the
securities. A futures contract is an agreement between two parties to buy
and sell a security at a set price on a future date and is exchange traded.
Upon entering into such a contract, a Fund is required to pledge to the
broker an amount of cash, U.S. Government securities or other high-quality
debt securities equal to the minimum "initial margin" requirements of the
exchange. Pursuant to the contract, the Fund agrees to receive from or pay
to the broker an amount of cash equal to the daily fluctuation in the value
of the contract. Such receipts or payments are known as "variation margin"
and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the fund records a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and
the value at the time it was closed. Pursuant to regulations and/or
published positions of the Securities and Exchange Commission, the Fund is
required to segregate cash or high-quality, liquid debt instruments in
connection with futures transactions in an amount generally equal to the
entire value of the underlying contracts. Risks of entering into futures
contracts include the possibility that there may be an illiquid market and
that a change in the value of the contract may not correlate with changes
in the value of the underlying securities. Futures contracts, if any, are
detailed in the Schedule of Investments for each of the Funds.
Repurchase Agreements
---------------------
Transactions involving purchases of securities under agreements to resell
("repurchase agreements") are treated as collateralized financing
transactions and are recorded at their contracted resale amounts.
Repurchase agreements, if any, are detailed in the Schedule of Investments
for each of the Funds. The prospectuses require that repurchase agreements
be fully collateralized based on values that are marked to market daily.
The collateral is held by an agent bank under a tri-party agreement. It is
the adviser's responsibility to value collateral daily and to obtain
additional collateral as necessary to maintain market value equal to or
greater than the resale price. The repurchase agreements held in the Funds
at March 31, 1996 are collateralized by U.S. Treasury or federal agency
obligations, and were entered into on March 29, 1996.
Distributions to Shareholders
-----------------------------
Dividends to shareholders from net investment income are declared daily and
distributed monthly for the Money Market Fund, Tax-Free Money Market Fund,
Short-Term Bond Fund, U.S. Government Income Fund, Muncipal Bond Fund,
California Tax-Free Fund and Bond Fund. Dividends to shareholders from the
net investment income of the Growth & Income Fund are declared and
distributed quarterly, and with respect to the Growth Fund, are declared
and distributed annually. Dividends to shareholders are recorded on the ex-
dividend date. Each Fund makes distributions from net realized securities
gains, if any, once a year.
Federal Income Taxes
--------------------
The Company's policy for each Fund is to comply with the requirements of
the Internal Revenue Code that are applicable to regulated investment
companies and to distribute substantially all of their taxable income and
any net realized capital gain to their shareholders. Accordingly, no
provision for income taxes has been made as sufficient distributions were
made to eliminate taxable income. The following net capital loss
carryforward amounts are available to the Funds as of September 30, 1995:
<TABLE>
<CAPTION>
Net Year of
Capital Loss Expiration
- -------------------------------------------------------------------------------
<S> <C> <C>
Bond Fund..................... $36,910 2003
Municipal Bond Fund........... 81,464 2003
California Tax-Free Fund...... 505,778 2003
</TABLE>
Due to the timing of dividend distributions and the differences in
accounting for income and realized gains (losses) for financial statement
and Federal income tax purposes, the fiscal year in which amounts are
distributed may differ
-30-
<PAGE>
from the year in which the income and realized gains (losses) were recorded
by the Fund. The differences between the income or gains distributed on a
book versus tax basis, if any, are shown as excess distributions of net
investment income and net realized gain on sales of investments in the
accompanying Statements of Changes in Net Assets. The Board of Directors
will not declare capital gain distributions until the net capital loss
carryforwards have been utilized.
Organization Expenses
---------------------
Griffin Financial Administrators, the Funds' administrator, has incurred
expenses in connection with the organization and initial registration of
the Funds. These expenses were charged to the individual Funds and are
being amortized by the Funds on a straight-line basis over 60 months from
the date the Funds commenced operations. For each of the Tax-Free Money
Market Fund, Municipal Bond Fund, California Tax-Free Fund and Bond Fund,
$46,455 is due to the administrator. For the Short-Term Bond Fund, $22,274
is due to the administrator.
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those
estimates.
(2) Agreements and Other Transactions with Affiliates
The Company has entered into an advisory contract on behalf of the Funds
with Griffin Financial Investment Advisors ("GFIA"). Pursuant to the
contract, GFIA furnishes to the Funds investment guidance and policy
direction in connection with daily portfolio management of the Funds. Under
the contract, the Growth & Income Fund and the Growth Fund pay GFIA a
monthly advisory fee calculated by multiplying each fund's average daily
net assets by 0.60% on an annualized basis. Each of the other Funds pays a
monthly advisory fee to GFIA based on an annualized rate of 0.50% of the
Funds' average daily net assets. GFIA has entered into sub-advisory
agreements with Payden & Rygel Investment Counsel ("Payden & Rygel") with
respect to the Money Market Fund, Tax-Free Money Market Fund, U.S.
Government Income Fund, Municipal Bond Fund and the California Tax-Free
Fund, with The Boston Company Asset Management, Inc. ("TBCAM") with respect
to the Bond Fund and the Growth & Income Fund, and with T. Rowe Price &
Associates, Inc. ("T. Rowe Price") with respect to the Short-Term Bond Fund
and the Growth Fund. Pursuant to such sub-advisory agreements, Payden &
Rygel, TBCAM and T. Rowe Price are primarily responsible for the daily
management of the respective Fund's portfolios. GFIA pays Payden & Rygel,
TBCAM and T. Rowe Price sub-advisory fees for the Funds out of the advisory
fees discussed above. For the six months ended March 31, 1996, GFIA has
voluntarily waived all of its fees to limit fund expenses. For the six
months ended March 31,1996 advisory fees were incurred by the Funds as
follows:
<TABLE>
<CAPTION>
Advisory Waived
Funds fees fees
--------------------------------------------------------
<S> <C> <C>
Money Market $373,515 $373,515
Tax-Free Money Market 23,984 23,984
Short-Term Bond 17,842 17,842
U.S. Government Income 92,387 92,387
Municipal Bond 14,891 14,891
California Tax-Free 53,132 53,132
Bond 41,612 41,612
Growth & Income 180,919 180,919
Growth 24,226 24,226
</TABLE>
The Company has entered into contracts on behalf of the Funds with Griffin
Financial Administrators ("GFA") whereby GFA is responsible for providing
administration, custody, transfer agency and portfolio accounting services
for the Funds. GFA is compensated for its services by each of the Funds on
a monthly basis based on an annualized rate of 0.20% of the Fund's average
daily net assets. GFA has waived a portion of its fees to limit fund
expenses. For the six months ended March 31, 1996 administration fees were
incurred by the Funds as follows:
-31-
<PAGE>
================================================================================
<TABLE>
<CAPTION>
Administration
and
Funds Accounting fees Waived fees
- ------------------------------------------------------------------
<S> <C> <C>
Money Market............ $149,406 $0
Tax-Free Money Market... 9,593 9,593
Short-Term Bond......... 7,137 7,137
U.S. Government Income.. 36,955 31,878
Municipal Bond.......... 5,957 5,957
California Tax-Free..... 21,253 21,253
Bond.................... 16,645 16,645
Growth & Income......... 60,306 0
Growth.................. 8,075 8,075
</TABLE>
In addition, GFA has agreed to reimburse the funds for certain operating
expenses.
The Company has adopted integrated Distribution and Services Plans pursuant to
Rule 12b-1 under the 1940 Act for the single class of shares of the Money Market
Funds and for the Class A shares of each of the other Funds. Under these Plans,
the Funds may reimburse Griffin Financial Services ("GFS"), the Funds'
distributor, for actual expenses incurred in preparing and printing prospectuses
and other promotional materials for, and for providing such prospectuses and
promotional materials to, prospective shareholders. Payments under the Plans
also may be used to compensate or reimburse the distributor, selling agents and
or servicing agents for distribution, sales support or shareholder support
services. Aggregate payments under the plans may not exceed, on an annualized
basis, 0.20% of the average daily net assets of each Money Market Fund, and
0.25% of the average daily net assets of the other Funds. GFS has waived a por-
tion of its fees to limit fund expenses. For the period ended March 31, 1996,
shares of the Money Market Funds, and Class A shares of the non-money market
Funds incurred distribution and service fees as follows:
<TABLE>
<CAPTION>
Distribution and
Funds Service fees Waived fees
- ------------------------------------------------------------------
<S> <C> <C>
Money Market............ $149,406 $30,225
Tax-Free Money Market... 9,593 9,593
Class A Shares
- --------------
Short-Term Bond......... 8,898 8,898
U.S. Government Income.. 42,981 42,981
Municipal Bond.......... 7,309 7,309
California Tax-Free..... 24,950 24,950
Bond.................... 20,531 20,531
Growth & Income......... 69,057 10,924
Growth.................. 9,664 9,664
</TABLE>
The Company also has adopted separate Distribution and Services Plans pursuant
to Rule 12b-1 under the 1940 Act for the Class B shares of each of the Non-Money
Market Funds. Under the Distribution Plans, the Funds may reimburse GFS for
actual expenses incurred in preparing and printing prospectuses and other
promotional materials for, and for providing such prospectuses and promotional
materials to, prospective shareholders. Payments under the Distribution Plans
also may be used to compensate the distributor, selling agents and or servicing
agents for distribution, sales support or shareholder support services. Payments
under the Services Plans are made to servicing agents that provide shareholder
liaison services to Class B shareholders. Aggregate payments under the
Distribution Plans may not exceed 0.75% of the average daily net assets of each
Fund on an annual basis. Aggregate payments under the Services Plans may not
exceed, on an annualized basis, 0.25% of the average daily net assets of each
Fund. GFS has waived a portion of its fees to limit fund expenses. For the
period ended March 31, 1996, Class B shares of the Funds incurred distribution
and servicing fees as follows:
<TABLE>
<CAPTION>
Distribution and Waived
Funds Service fees fees
- ------------------------------------------------------------------
<S> <C> <C>
Short-Term Bond......... $92 $46
U.S. Government Income.. 12,847 6,424
Municipal Bond.......... 549 274
California Tax-Free..... 6,461 3,230
Bond.................... 1,101 551
Growth & Income......... 25,305 7,274
Growth.................. 1,720 860
</TABLE>
Reimbused expenses and waived fees continue at the discretion of the investment
advisor, administrator and distributor. All officers and one director of the
Funds are employees of GFS, but received no compensation from the Company. For
the six months ended March 31, 1996, GFS was paid $165,365 in front-end sales
charges on sales of Class A shares, and $7,953 in contingent deferred sales
charges on Class B share redemptions.
-32-
<PAGE>
================================================================================
(3) Purchases and Sales of Securities Exclusive of Short-Term Investments
<TABLE>
<CAPTION>
U.S. California Growth &
Short-Term Government Municipal Tax-Free Bond Income Growth
Bond Fund Income Fund Bond Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Aggregate purchases and sales of:
Common and Preferred Stock:
Purchases at cost............. $0 $0 $0 $0 $0 $51,383,455 $8,143,114
Sales proceeds................ 0 0 0 0 0 19,825,585 430,122
U.S. Treasury Obligations:
Purchase at cost.............. 5,460,601 11,102,008 0 0 11,663,425 0 0
Sales proceeds................ 0 5,623,164 0 0 7,967,205 0 0
U.S. Agency Securities:
Purchased at cost............. 802,293 5,998,021 0 0 921,052 0 0
Sales proceeds................ 56,184 236,209 0 0 1,682,339 0 0
Municipal Bonds:
Purchases at cost............. 0 0 1,128,864 3,856,133 0 0 0
Sales proceeds................ 0 0 575,788 2,857,577 0 0 0
Other Long-Term Securities
Purchases at cost............. 1,781,142 0 0 0 8,095,443 0 0
Sales proceeds................ 0 0 0 0 1,724,850 0 0
</TABLE>
- ------------------------------------------------------------------------------
All Funds not reflected in this schedule traded exclusively in short-term
securities.
(4) Capital Shares Transactions
As of March 31, 1996, the Company was authorized to issue 10 billion shares
of $0.001 par value capital stock. As of March 31, 1996, each Fund, except
the Money Market Fund and the Tax-Free Money Market Fund, was authorized to
issue 250 million shares of $.001 par value capital stock as Class A Shares
and 250 million shares of $0.001 par value capital stock as Class B shares.
The Money Market Fund and Tax-Free Money Market Fund were each authorized
to issue 1 billion shares of $0.001 par value capital stock of a single
class. Each non-money market fund except the Short-Term Bond Fund and the
Growth Fund issued Class A shares beginning October 19, 1993, and Class B
shares beginning November 1, 1994. The Short-Term Bond Fund and the Growth
Fund issued both Class A shares and Class B shares beginning June 12, 1995.
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Tax-Free
Money Market Fund Money Market Fund
--------------------------- ---------------------------
Shares Amount Shares Amount
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
September 30, 1994:................................. 49,987,794 $49,987,794 10,632,668 $10,632,668
Shares sold and exchanged in..................... 128,270,814 128,270,814 9,117,127 9,117,127
Shares issued in reinvestment of dividends....... 3,221,262 3,221,262 253,397 253,397
Shares redeemed and exchanged out................ (101,523,397) (101,523,397) (11,377,064) (11,377,064)
----------- ----------- ---------- -----------
September 30, 1995:................................. 79,956,473 79,956,473 8,626,128 8,626,128
=========== =========== ========== ===========
Shares sold and exchanged in..................... 135,832,594 135,832,594 7,451,236 7,541,236
Shares issued in reinvestment of dividends....... 3,421,546 3,421,546 133,254 133,254
Shares redeemed and exchanged out................ (60,109,702) (60,109,702) (4,782,208) (4,782,208)
----------- ----------- ---------- -----------
March 31, 1996:..................................... 159,100,911 159,100,911 11,428,410 11,428,410
=========== =========== ========== ===========
</TABLE>
-33-
<PAGE>
================================================================================
<TABLE>
<CAPTION>
Class A Class B
----------------------- -----------------------
Shares Amount Shares Amount
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Short-Term Bond Fund
June 12, 1995:..................................... 0 $0 0 $0
Shares sold and exchanged in..................... 357,932 3,587,401 1,308 13,110
Shares issued in reinvestment of dividends....... 642 6,451 5 51
Shares redeemed and exchanged out................ (2,247) (22,570) 0 0
---------- ----------- ---------- ----------
September 30, 1995:................................ 356,327 3,571,282 1,313 13,161
Shares sold and exchanged in..................... 861,005 8,732,437 594 6,000
Shares issued in reinvestment of dividends....... 11,495 116,759 42 425
Shares redeemed and exchanged out................ (50,573) (511,406) 0 0
---------- ----------- ---------- ----------
March 31, 1996:.................................... 1,178,254 $11,909,072 1,949 $19,586
========== =========== ========== ==========
<CAPTION>
Class A Class B
----------------------- -----------------------
Shares Amount Shares Amount
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Government Income Fund
September 30, 1994:................................ 2,185,473 $20,145,502 0 $0
Shares sold and exchanged in..................... 1,497,104 13,426,162 169,026 1,548,141
Shares issued in reinvestment of dividends....... 94,521 846,597 610 5,594
Shares redeemed and exchanged out................ (605,179) (5,413,734) (534) (4,931)
---------- ----------- ---------- ----------
September 30, 1995:................................ 3,171,919 29,004,527 169,102 1,548,804
Shares sold and exchanged in..................... 1,234,703 11,519,604 203,609 1,904,968
Shares issued in reinvestment of dividends....... 77,069 722,912 3,338 31,356
Shares redeemed and exchanged out................ (237,492) (2,217,165) (13,988) (130,701)
---------- ----------- ---------- ----------
March 31, 1996:.................................... 4,246,199 $39,029,878 362,061 $3,354,427
========== =========== ========== ==========
<CAPTION>
Class A Class B
----------------------- -----------------------
Shares Amount Shares Amount
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Bond Fund
September 30, 1994:................................ 890,320 $7,991,536 0 $0
Shares sold and exchanged in..................... 574,418 5,036,334 16,592 147,685
Shares issued in reinvestment of dividends....... 37,552 325,866 124 1,097
Shares redeemed and exchanged out................ (164,839) (1,407,778) 0 0
---------- ----------- ---------- ----------
September 30, 1995:................................ 1,337,451 11,945,958 16,716 148,782
Shares sold and exchanged in..................... 1,144,986 10,411,043 17,901 163,323
Shares issued in reinvestment of dividends....... 36,427 332,865 405 3,698
Shares redeemed and exchanged out................ (135,408) (1,233,159) (1,818) (16,117)
---------- ----------- ---------- ----------
March 31, 1996:.................................... 2,383,456 $21,456,707 33,204 $299,686
========== =========== ========== ==========
<CAPTION>
Class A Class B
----------------------- -----------------------
Shares Amount Shares Amount
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Municipal Bond Fund
September 30, 1994:................................ 303,501 $2,798,276 0 $0
Share sold and exchanged in...................... 337,591 2,960,842 6,239 54,649
Shares issued in reinvestment of dividends....... 11,986 104,877 6 48
Shares redeemed and exchanged out................ (38,935) (341,664) 0 0
---------- ----------- ---------- ----------
September 30, 1995:................................ 614,143 5,522,331 6,245 54,697
Shares sold and exchanged in..................... 96,268 885,871 19,344 178,393
Shares issued in reinvestment of dividends....... 9,531 87,521 173 1,590
Shares redeemed and exchanged out................ (27,201) (248,527) 0 0
---------- ----------- ---------- ----------
March 31, 1996:.................................... 692,741 $6,247,196 25,762 $234,680
========== =========== ========== ==========
</TABLE>
<PAGE>
================================================================================
<TABLE>
<CAPTION>
Class A Class B
-------------------------------- -----------------------------
Shares Amount Shares Amount
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
California Tax-Free Fund
September 30, 1994:................................ 1,821,076 $14,635,954 0 $0
Shares sold and exchanged in.................... 909,928 7,028,365 121,227 949,445
Shares issued in reinvestment of dividends...... 59,055 452,430 689 5,361
Shares redeemed and exchanged out............... (353,826) (2,686,532) 0 0
---------- ----------- ----------- -----------
September 30, 1995:................................ 2,436,233 19,430,217 121,916 954,806
Shares sold and exchanged in.................... 289,202 2,347,988 113,243 916,349
Shares issued in reinvestment of dividends...... 32,061 260,011 1,915 15,556
Shares redeemed and exchanged out............... (243,181) (1,970,579) (7,900) (63,698)
---------- ----------- ----------- -----------
March 31, 1996:.................................... 2,514,315 $20,067,637 229,174 $1,823,013
========== =========== =========== ===========
<CAPTION>
Class A Class B
-------------------------------- -----------------------------
Shares Amount Shares Amount
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Growth & Income Fund
September 30, 1994:................................ 1,272,125 $14,076,697 0 $0
Shares sold and exchanged in.................... 1,585,316 19,955,586 201,975 2,652,912
Shares issued in reinvestment of dividends...... 44,798 560,011 1,467 19,234
Shares redeemed and exchanged out............... (210,492) (2,627,185) (1,424) (19,493)
---------- ----------- ----------- -----------
September 30, 1995:................................ 2,691,747 31,965,109 202,018 2,652,653
Shares sold and exchanged in.................... 2,137,105 31,597,784 382,837 5,729,943
Shares issued in reinvestment of dividends...... 104,789 1,534,391 8,296 121,401
Shares redeemed and exchanged out............... (240,247) (3,585,398) (5,228) (77,193)
---------- ----------- ----------- -----------
March 31, 1996:.................................... 4,693,394 $61,511,886 587,923 $8,426,804
========== =========== =========== ===========
<CAPTION>
Class A Class B
-------------------------------- -----------------------------
Shares Amount Shares Amount
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Growth Fund
June 12,1995:...................................... 0 $0 0 $0
Shares sold and exchanged in.................... 363,549 3,880,406 12,806 141,837
Shares issued in reinvestment of dividends...... 0 0 0 0
Shares redeemed and exchanged out............... (4,486) (52,285) 0 0
---------- ----------- ----------- -----------
September 30, 1995:................................ 359,063 3,828,121 12,806 141,937
Shares sold and exchanged in.................... 673,660 8,048,500 36,671 439,080
Shares issued in reinvestment of dividends...... 1,334 15,679 47 551
Shares redeemed and exchanged out............... (54,006) (658,772) (552) (6,957)
---------- ----------- ----------- -----------
March 31, 1996:.................................... 980,051 $11,233,528 48,972 $574,511
========== =========== =========== ===========
</TABLE>
(5) Custodial Earnings Credits
In accordance with the Custody Agreement between the Company, GFA and
Investors Fiduciary Trust Company (the "Custodian"), the Custodian provides
credits ("Earning Credits") which are used to offset custodial expenses.
These Earnings Credits are calculated each month by multiplying the average
daily cash balance in each of the Funds by three quarters of a money market
rate set by State Street Bank & Trust Co., the Funds' sub-custodian. The
amount of such Earnings Credits for the Funds is reflected in the "Expense
Reductions" in the Statements of Operations. Ratios of expenses to average
daily net assets shown in the Financial Highlights are calculated without
the Earnings Credits beginning with periods ended September 30, 1995.
-35-
<PAGE>
===============================================================================
The Griffin Funds, Inc.
Board of Directors
Herschel Cardin
Vincent F. Coviello
William A. Hawkins (Chairman)
Carrol R. McGinnis
Morton O. Schapiro
Officers
William A. Hawkins, President
Richie D. Rowsey, Senior Vice President
Julia D. Whitcup, Senior Vice President & Treasurer
Tim S. Glassett, Secretary
Anne P. Banducci, Assistant Secretary
Herbert L. Botts, Assistant Secretary
Steven P. Muson, Assistant Treasurer
Henry M. Pena, Assistant Secretary
Cheryl A. Rivera, Assisant Secretary
Transfer Agent and Custodian
Investors Fiduciary Trust Company (IFTC)
127 West 10th Street
Kansas City, MO 64105-1716
Investment Advisor
Griffin Financial Investment Advisers
5000 Rivergrade Road
Irwindale, CA 91706
Sub-Advisors
Payden & Rygel Investment Counsel
333 South Grand Avenue
Los Angeles, CA 90071
The Boston Company Asset Management, Inc
One Boston Place
Boston, MA 02108
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
Legal Counsel
Morrison & Foerster LLP
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
This report and the financial statements contained herein are submitted for the
general information of the shareholders of The Griffin Funds, Inc. If this
report is used for promotional purposes, distribution of the report must be
accompanied or preceded by a current prospectus. The prospectus constains more
detailed information about The Griffin Funds, Inc. Read the prospectus
carefully before you invest or send money.
