<PAGE>
SEMI-ANNUAL REPORT
[LOGO OF THE GRIFFIN FUNDS]
MARCH 31, 1998
<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 ........................................... 12
The Griffin California Tax-Free Fund ...................................... 15
The Griffin Growth & Income Fund .......................................... 17
The Griffin Growth Fund ................................................... 19
Financial Statements
Statements of Assets and Liabilities ...................................... 23
Statements of Operations .................................................. 25
Statements of Changes in Net Assets ....................................... 27
Financial Highlights ...................................................... 29
Notes to Financial Statements ............................................. 34
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:
We are pleased to present the Semi-Annual Report for The Griffin Funds, Inc. for
the six months ended March 31, 1998. In the charts and financial statements that
follow this letter, you will find a more detailed summary of the performance of
each of The Griffin Funds, as well as a description of the securities held in
each of the portfolios. We hope you find this information useful as you evaluate
your investments.
The Griffin Funds were created to provide a consistent, careful, and committed
approach for those seeking to invest in the financial markets over the long
haul. We employ some of this country's largest and most respected investment
firms as sub-advisers to make the daily buy and sell decisions on behalf the
Funds. Each of these sub-advisory firms has substantial experience investing for
their respective clients. An additional level of management and supervision is
provided by Griffin Financial Investment Advisers to make certain that each Fund
is on course with the investment objectives stated in its respective prospectus.
We believe this two-tiered approach provides consistent and responsible
investment management, supported by broad experience and multiple perspectives.
Market Overview
The long bull market for stocks hit a bump in the road during the six month
period ended March 31, 1998, but persevered to close at record levels. Several
of the Asian "tiger" nations began experiencing slower rates of economic growth,
exposing their currencies to, in some cases, significant drops relative to the
U.S. dollar. Many of the region's governments, most notably that of Hong Kong,
where forced to take emergency actions, including dramatically raising interest
rates to defend their currencies against short-sellers, further disrupting
economic growth. The reaction was felt globally, with stocks in the U.S., Europe
and Asia falling during the latter part of 1997.
Despite concerns that problems in Asia would spell trouble for U.S. companies,
stocks of large companies continued to march to higher levels in the first
quarter of 1998. Many large, multinational corporations took advantage of the
crisis in Asia to purchase assets at deep discounts, while U.S. domestic demand
more than compensated for lower exports. The common stock of smaller, faster
growing companies also posted gains, but continued to lag behind their larger
peers. The value style of investing provided relative strength as the market
declined in the fourth quarter of 1997, while growth investors excelled in the
first quarter of 1998.
Interest rates declined overall by approximately 0.40% for the six month period,
as low unemployment, the prospect of a U.S. budget surplus, benign inflation and
a general flight to quality drove the yield of 30-year Treasury bonds below 6%.
Long-term interest rates declined more than short-term rates, and the yield
curve flattened during the reporting period. Many homeowners rushed to refinance
their mortgages as rates fell, which had an adverse effect on some
mortgage-backed securities. Thanks to low interest rates and continued gains in
credit quality, corporate bonds were strong performers for the six month period.
Looking to the Future at Griffin
As most of you know, on March 18, 1998, Washington Mutual, Inc. and H. F.
Ahmanson & Company, the parent company to Griffin Financial Investment Advisers,
announced their intention to combine forces in a merger valued at approximately
$10 billion. If approved, the transaction, which is expected to close in the
fourth quarter of 1998, would create one of the largest financial services
companies in the country. While it is premature to discuss the specifics of the
proposed merger, we feel that the combination will result in a broader array of
products and services being available to the clients of each company, including
shareholders in The Griffin Funds. We will provide you with additional
information over the coming months as the specifics of the proposal become more
definitive.
I want to emphasize, though, that the basic tenets of The Griffin Funds have not
changed. We will continue to provide the high quality, professional investment
management that has resulted in superior returns for our shareholders.
Similarly, we are unwavering in our commitment to provide the highest level of
customer service. In fact, we recently enhanced our automated telephone service
line to provide information more efficiently to our shareholders 24 hours a day,
7 days a week.
As always, we appreciate your selection of The Griffin Funds for your investment
needs. We will do our best to preserve your continued confidence and loyalty.
Sincerely,
William A. Hawkins
Chairman
The Griffin Funds, Inc.
May 15, 1998
- 1 -
<PAGE>
Performance Highlights of the Funds
The table below provides yield and total return information for the periods
ended March 31, 1998 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 performance information is presented as an average annual
return. Certain fees payable by the Funds have been waived (and/or expenses
reimbursed) during periods up to and including the six months ended March 31,
1998, which have reduced operating expenses for shareholders. Without these
reductions, the yields and returns would have been lower. 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 tracked by Lipper Analytical Services,
Inc. The Lipper 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.
For the Periods Ended March 31, 1998
<TABLE>
<CAPTION>
Seven Day
Seven Day Effective
Yield Yield
----- -----
<S> <C> <C>
Money Market Fund(1) 4.96% 5.08%
Tax-Free Money Market Fund(1) 3.03% 3.08%
Total Return
------------
Class A Class B
-------------------------- ------------------------
Since Since
Past Six Past Inception Past Six Past Inception
Months Year (10/19/93) Months Year (11/1/94)
------ ---- ---------- ------ ---- ---------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government Income Fund ....................... 4.57% 11.28% 6.26% 4.07% 10.56% 8.37%
U.S. Government Income Fund (incl. sales charge)(2) -0.13% 6.27% 5.17% -0.93% 5.56% 7.65%
Lipper General U.S. Govt. Average (183 funds) ..... 4.34% 11.46% n/a 4.34% 11.46% n/a
Bond Fund ......................................... 4.31% 11.34% 5.33% 3.91% 10.50% 8.36%
Bond Fund (incl. sales charge)(2) ................. -0.39% 6.33% 4.25% -1.09% 5.50% 7.63%
Lipper Corporate Debt A Rated Average (140 funds) . 4.13% 11.63% n/a 4.13% 11.63% n/a
California Tax-Free Fund .......................... 3.29% 10.38% 4.59% 3.02% 9.80% 8.45%
California Tax-Free Fund (incl. sales charge)(2) .. -1.36% 5.42% 3.52% -1.98% 4.80% 7.72%
Lipper CA Municipal Debt Average (104 funds) ...... 3.63% 10.85% n/a 3.63% 10.85% n/a
Municipal Bond Fund ............................... 3.43% 10.28% 4.74% 3.08% 9.61% 8.20%
Municipal Bond Fund (incl. sales charge)(2) ....... -1.22% 5.32% 3.66% -1.92% 4.61% 7.47%
Lipper General Municipal Debt Average (237 funds) . 3.74% 10.61% n/a 3.74% 10.61% n/a
Growth & Income Fund ............................. 9.45% 36.86% 22.23% 9.11% 36.12% 27.49%
Growth & Income Fund (incl. sales charge)(2) ..... 4.52% 30.71% 20.97% 4.11% 31.12% 27.00%
Lipper Growth & Income Average (646 funds) ........ 12.55% 40.15% n/a 12.55% 40.15% n/a
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 ............................... 3.04% 7.75% 6.11% 2.71% 7.00% 5.63%
Short-Term Bond Fund (incl. sales charge)(3) ....... -0.56% 3.98% 4.77% -1.29% 3.00% 4.98%
Lipper S.I. Investment Grade Debt Average (93 funds) 3.11% 8.23% n/a 3.11% 8.23% n/a
Growth Fund ........................................ 10.04% 44.36% 24.45% 9.64% 43.45% 23.85%
Growth Fund (incl. sales charge)(4) ................ 5.08% 37.86% 22.43% 4.64% 38.45% 23.12%
Lipper Mid Cap Equity Average (274 funds) .......... 8.23% 43.06% n/a 8.23% 43.06% 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 Money Market
Funds will be able to maintain a stable net asset value of $1.00 per share.
(2) The deduction of the maximum initial sales charge with respect to Class A
shares (4.5%) and the deduction of 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, 1998, and 3% with respect to the total return data
presented for the period from inception of the Class on November 1, 1994 to
March 31, 1998) has been factored into these calculations.
(3) The deduction of the maximum initial sales charge with respect to Class A
shares (3.5%) and the deduction of the maximum applicable contingent
deferred sales charge with respect to Class B shares (4% with respect to
the total return data presented for the six month and one year periods
ended March 31, 1998, and 2% with respect to the total return data
presented for the period from inception of the Class on June 12, 1995 to
March 31, 1998) has been factored into these calculations.
(4) The deduction of the maximum initial sales charge with respect to Class A
shares (4.5%) and the deduction of 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, 1998, and 3% with respect to the total return data
presented for the period from inception of the Class on June 12, 1995 to
March 31, 1998) has been factored into these calculations.
- 2 -
<PAGE>
Schedule of Investments
Griffin Money Market Fund
March 31, 1998
[PIE CHART APPEARS HERE]
Certificates of Deposit 10%
Commercial Paper 78%
Corporate Notes 6%
U.S. Government Agency Notes 6%
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>
Certificate of Deposit (9.9%):
Financial Services (9.9%):
Dresdner U.S. Bank, 5.51%, 01/15/99 ........ $ 7,000,000 $ 6,997,872
Morgan Guaranty, 5.71%, 01/08/99 ........... 5,000,000 4,998,532
Swiss Bank Corporation, 5.69%, 01/07/99 .... 11,000,000 10,997,565
-----------
22,993,969
-----------
Total Certificate of Deposit (cost: $22,993,969) ........... 22,993,969
-----------
Commercial Paper (78.1%):
Financial Services (68.7%):
American Express Credit, 5.45%, 04/13/98 (b) 11,000,000 11,000,000
American General Finance Corporation,
5.55%, 05/12/98 (b) ................ 11,000,000 11,000,000
Bank of America, 5.51%, 04/23/98 (b) ....... 11,000,000 10,962,961
Bell Atlantic Financial Services Inc.,
5.51%, 04/07/98 (b) ................ 10,000,000 9,990,817
Caterpillar Finance Corporation,
5.44%, 07/23/98 (b) ................ 11,000,000 10,812,169
Chevron Oil Finance, 5.46%, 04/03/98 (b) ... 11,000,000 11,000,000
Corestates Capital Corporation,
5.45%, 04/23/98 (b) ................ 11,000,000 10,963,364
Deustche Bank, 5.48%, 04/06/98 (b) ......... 10,000,000 9,992,319
First of America Bank, 5.52%, 05/01/98 (b) . 11,100,000 11,100,000
Ford Motor Credit Corporation,
5.55%, 05/12/98 (b) ................ 11,000,000 11,000,000
General Motors Acceptance Corporation,
5.52%, 04/20/98 (b) ................ 11,000,000 11,000,000
International Business Machines Credit
Corporation, 5.42%, 04/21/98 (b) ... 10,800,000 10,767,480
Toyota Motor Credit Corporation,
5.50%, 04/20/98 (b) ................ 11,000,000 10,968,069
UBS Financial, 5.44%, 04/03/98 (b) ......... 11,000,000 10,996,676
Xerox Credit Corporation, 5.46%,
05/04/98 (b) ....................... 8,000,000 7,959,960
-----------
159,513,814
-----------
Industrial Conglomerate (4.7%):
3M Corporation, 5.40%, 04/20/98 (b) ........ 11,000,000 10,968,650
-----------
Manufacturing (4.7%):
Dupont E.I. Nemour, 5.47%, 05/26/98 (b) .... $ 11,000,000 $ 10,908,074
-----------
Total Commercial Paper (cost: $181,390,538) ................ 181,390,538
-----------
Medium-Term Note (6.5%):
Financial Services (2.2%):
Norwest Corporation, 6.00%, 10/13/98 ....... 5,000,000 5,003,758
-----------
Industrial Machinery (4.3%):
Honeywell Incorporated, 7.15%, 04/15/98 .... 10,000,000 10,005,000
-----------
Total Medium-Term Note (cost: $15,008,757) ................. 15,008,757
-----------
U.S. Government Agency Securities (5.6%):
Federal Home Loan Mortgage Corporation (5.6%):
5.70%, 04/01/98 ............................ 12,900,000 12,900,000
-----------
Total U.S. Government Agency Securities
(cost: $12,900,000) ................................ 12,900,000
-----------
Repurchase Agreements (0.0%):
State Street Bank & Trust Co., Master
Repurchase Agreement, 4.25%, dated
3/31/98 due 4/1/98, Collateralized
by U.S. Government Securities
(delivery value $15,757) ................... 15,755 15,755
-----------
Total Repurchase Agreements (cost: $15,755) ................ 15,755
-----------
Total Investments in Securities
(cost: $232,309,020)(c)(99.7%) ..................... 232,309,020
Other Assets Less Liabilities (0.3%) ....................... 784,629
-----------
Net Assets (100.0%) ........................................ $233,093,649
===========
</TABLE>
- ----------
Notes to Schedule of Investments
(a) Securites are valued in accordance with procedures described in note 1 to
the financial statements.
(b) Rate represents annualized yield to maturity at March 31, 1998.
(c) Cost is the same for federal income tax purposes.
See accompanying notes to financial statements.
- 3 -
<PAGE>
Schedule of Investments
Griffin Tax-Free Money Market Fund
March 31, 1998
[PIE CHART APPEARS HERE]
Variable Rate Demand Notes 55%
Commercial Paper 4%
Revenue Bonds 11%
General Obligations 19%
Notes 11%
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 Short-Term Securities (100.0%)
Alaska (1.7%)
Anchorage, Alaska Electric Utility Revenue,
Series D, 3.65%, 04/01/98 (b) .............. $ 440,000 $ 440,000
---------
California (9.2%)
California State Revenue Anticipation Notes,
4.50%, 06/30/98 ............................ 1,000,000 1,002,254
Los Angeles County, California Tax & Revenue
Anticipation Notes, Series A,
4.50%, 06/30/98 ............................ 600,000 600,926
Santa Clara Tax & Revenue Anticipation Notes,
4.75%, 10/01/98 ............................ 800,000 803,444
---------
2,406,624
---------
Florida (4.1%)
Citrus Park Community Development District,
Capital Improvements, 3.65%, 04/01/98 (b) .. 600,000 600,000
State of Florida Board of Regents University System
Improvement Revenue, 7.00%, 07/01/98 ....... 470,000 473,262
---------
1,073,262
---------
Georgia (6.5%)
Municipal Electric Authority of Georgia,
3.65%, 04/01/98 (b) ........................ 700,000 700,000
Municipal Gas Authority of Georgia,
Gas Revenue, 3.50%, 07/08/98 ............... 1,000,000 1,000,000
---------
1,700,000
---------
Illinois (8.9%)
Illinois Development Financing Authority
Revenue, 3.70%, 04/01/98 (b) ............... 800,000 800,000
Illinois Health System, Sherman Health
Facilities Revenue, 3.90%, 08/01/98 ........ 720,000 720,000
Will County, Illinois Exempt Facilities
Revenue, 3.55%, 04/01/98 (b) ............... 800,000 800,000
---------
2,320,000
---------
Kansas (1.9%)
Kansas State Department of Transportation
Highway Revenue, Series B,
3.65%, 04/01/98 (b) ........................ $ 500,000 $ 500,000
---------
Louisiana (8.8%)
Calcasieu Parish, Louisiana Industrial
Development Board Pollution Control Revenue,
3.70%, 04/01/98 (b) ........................ 500,000 500,000
Louisiana Public Facilities Authority Revenue,
Multi-Family Housing, Emberwood Project,
3.70%, 04/01/98 (b) ........................ 1,000,000 1,000,000
Louisiana State Offshore Terminal Authority
Deep Water Port Revenue, 3.70%, 04/01/98 (b) 300,000 300,000
South Louisiana Port Commission Marine
Terminal Facilities Revenue,
3.70%, 04/01/98 (b) ........................ 500,000 500,000
---------
2,300,000
---------
Maryland (6.6%)
Maryland State General Obligation,
5.90%, 03/15/99 ............................ 1,000,000 1,021,424
Montgomery County, Maryland Solid Waste
Disposal, 4.80%, 06/01/98 .................. 700,000 700,948
---------
1,722,372
---------
Michigan (6.8%)
Charter County of Wayne, Michigan,
Airport Revenue, 3.70%, 04/01/98 (b) ....... 1,000,000 1,000,000
Michigan State General Obligation,
4.50%, 09/30/98 ............................ 790,000 793,020
---------
1,793,020
---------
Missouri (3.4%)
City of Columbia Missouri Special Obligation
Insurance Reserve, Series A,
3.70%, 04/01/98 (b) ........................ 200,000 200,000
Missouri Higher Education Loan Authority
Student Loan Revenue, Series B,
3.80%, 04/01/98 (b) ........................ 400,000 400,000
Health & Education Facilities Authority of the
State of Missouri, 3.50%, 04/01/98 (b) ..... 300,000 300,000
---------
900,000
---------
Nebraska (2.9%)
Nebraska Higher Education Loan Program,
3.80%, 04/01/98 (b) ........................ 400,000 400,000
3.80%, 04/01/98 (b) ........................ 350,000 350,000
---------
750,000
---------
Nevada (3.1%)
Clark County, Nevada Airport System
Subordinated Lien Revenue, Series A-1,
3.65%, 04/01/98 (b) ........................ 800,000 800,000
---------
New Mexico (1.8%)
New Mexico State Tax & Revenue Anticipation
Notes, 4.50%, 06/30/98 ..................... 480,000 480,726
---------
</TABLE>
See accompanying notes to financial statements.
- 4 -
<PAGE>
Schedule of Investments
Griffin Tax-Free Money Market Fund (Continued)
March 31, 1998
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- ----------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
North Carolina (1.5%)
North Carolina Educational Facilities Finance
Agency Bowman Gray School,
3.60%, 04/02/98 (b) ........................ $ 400,000 $ 400,000
---------
Ohio (0.8%)
Student Loan Funding Corporation Cincinnati,
Ohio Student Loan Revenue, Series A,
3.80%, 04/01/98 (b) ........................ 200,000 200,000
---------
Oregon (3.4%)
Oregon State General Obligation,
4.50%, 08/01/98 ............................ 880,000 882,533
---------
Pennsylvania (5.0%)
Allegheny County, Pennsylvania Hospital
Development Authority Hospital Revenue,
Series B, 3.65%, 04/01/98 (b) .............. 500,000 500,000
Delaware Valley, Pennsylvania Regional
Finance Authority, Local Government
Revenue, 3.65%, 04/01/98 (b) ............... 300,000 300,000
3.65%, 04/01/98 (b) ........................ 500,000 500,000
---------
1,300,000
---------
Tennessee (1.3%)
Health & Educational Facilities Board of the
Metropolitan Government of Nashville &
Davidson County, 4.50%, 07/01/98 ........... 350,000 350,464
---------
Texas (7.6%)
Guadalupe Blanco River Authority Texas
Pollution Control Revenue, Central Power &
Light Project, 3.80%, 04/01/98 (b) ......... 800,000 800,000
Panhandle-Plains, Texas Higher Education
Authority Student Loan Revenue, Series A,
3.75%, 04/01/98 (b) ........................ 600,000 600,000
Texas State Tax & Revenue Anticipation Notes,
Series A, 4.75%, 08/31/98 .................. 600,000 602,188
---------
2,002,188
---------
Virginia (4.0%)
Newport News, Virginia General Obligation,
6.88%, 12/01/98 ............................ 1,000,000 1,046,128
---------
Washington (1.9%)
Seattle, Washington General Obligation,
4.50%, 03/01/99 ............................ 500,000 504,000
---------
West Virginia (2.7%)
Marion County, West Virginia Solid Waste
Disposal Facilities Revenue,
3.75%, 04/01/98 (b) ........................ 700,000 700,000
---------
Wisconsin (2.7%)
Wisconsin State General Obligation, 4.75%,
4.75%, 05/01/98 ............................ $ 500,000 $ 500,309
6.90%, 05/01/98 ............................ 200,000 200,463
---------
700,772
---------
Wyoming (3.4%)
City of Kemmerer, Wyoming Pollution Control
Revenue, 3.75%, 04/01/98 (b) ............... 900,000 900,000
---------
Total Municipal Short-Term Securities
(cost: $26,172,089) ........................................ 26,172,089
----------
Other Short-Term Securities (0.0%)
Seven Seas Tax Free Money Market Fund,
3.11%, 04/01/98 .................................... 5,099 5,099
----------
Total Other Short-Term Securities (cost: $5,099) ................... 5,099
----------
Total Investments in Securities
(cost: $26,177,188)(c)(99.0%) .............................. 26,177,188
Other Assets Less Liabilities (1.0%) ............................... 255,838
----------
Net Assets (100.0%) ................................................ $26,433,026
===========
</TABLE>
- ----------
Notes to Schedule of Investments
(a) Securites 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 of the period until the interest rate is adjused or until
the principal can be recovered be demand.
(c) Cost is the same for federal income tax purposes.
See accompanying notes to financial statements.
- 5 -
<PAGE>
Schedule of Investments
Griffin Short-Term Bond Fund
March 31, 1998
[PIE CHART APPEARS HERE]
U.S. Government Agency Securities 10%
U.S. Treasury Notes & Bonds 51%
Corporate Bonds 38%
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>
Corporate Bonds (38.2%)
Banking (3.4%)
Bankers Trust - New York, 9.50%, 06/14/00 .. $ 470,000 $ 501,138
First Chicago, 9.00%, 06/15/99 ............. 30,000 30,975
MBNA Corporation
6.10%, 12/15/00 .................... 450,000 447,750
6.88%, 10/01/99 .................... 210,000 212,100
Northern Trust
6.50%, 05/01/03 .................... 1,000,000 1,013,750
9.00%, 05/15/98 .................... 100,000 100,340
-----------
2,306,053
-----------
Financial Services (10.4%)
Associates Corporation, N.A ................
6.00%, 03/15/00 .................... 250,000 250,000
6.75%, 10/15/99 .................... 16,000 16,143
Bear Stearns Company, 9.13%, 04/15/98 ...... 30,000 30,032
CIT Group Holdings, 6.38%, 11/15/02 ........ 1,000,000 1,000,000
Donaldson Lufkin & Jennrette,
6.38%, 05/26/00 .................... 1,000,000 1,003,750
Fairfax Financial Holdings, 7.75%, 12/15/03 1,000,000 1,040,000
Finova Capital Corporation, 6.28%, 11/01/99 1,000,000 1,000,370
General Motors Acceptance Corporation
5.63%, 02/15/01 .................... 200,000 198,000
7.75%, 01/15/99 .................... 500,000 506,215
Golden West Financial, 10.25%, 12/01/00 .... 255,000 280,819
Heller Financial, 9.13%, 08/01/99 .......... 100,000 103,747
Lehman Brothers Holdings Corporation,
8.88%, 11/01/98 .................... 150,000 152,373
Paine Webber Group, 9.25%, 12/15/01 ........ 600,000 654,000
Penske Truck Leasing, 6.65%, 11/01/00 ...... 750,000 762,188
-----------
6,997,635
-----------
Food Products (1.5%)
Tyson Foods Incorporated, 6.00%, 01/15/03 .. 1,000,000 985,000
-----------
985,000
-----------
Industrial Conglomerate (15.4%)
Anheuser Busch Company, 8.75%, 12/01/99 .... 100,000 104,500
Boise Cascade Company, 9.90%, 03/15/00 ..... 603,000 638,426
Continental Cablevision, 8.50%, 09/15/01 ... $ 600,000 $ 640,500
Cox Communications Incorporated - New,
8.55%, 06/01/00 .................... 40,000 41,950
Cox Communications Incorporated,
6.38%, 06/15/00 .................... 100,000 100,500
Eaton Off Shore, 9.00%, 02/15/01 ........... 750,000 808,125
Enron Corporation, 9.13%, 04/01/03 ......... 710,000 797,863
General Motors Acceptance Corporation,
6.88%, 07/15/01 .................... 300,000 305,625
Hertz Corporation, 7.38%, 06/15/01 ......... 1,000,000 1,028,750
Ingersoll-Rand, 6.26%, 02/15/01 ............ 1,000,000 1,005,000
International Paper Company,
9.70%, 03/15/00 .................... 150,000 160,125
Lockheed Corporation, 9.38%, 10/15/99 ...... 71,000 74,373
Loews Corporation, 8.50%, 04/15/98 ......... 400,000 400,296
News America Holdings, 7.50%, 03/01/00 ..... 1,000,000 1,025,000
Pepsico Incorporated, 7.75%, 10/01/98 ...... 100,000 100,765
Philip Morris, 7.50%, 04/01/04 ............. 2,000,000 2,087,500
Sony Corporation, 6.13%, 03/04/03 .......... 1,000,000 995,000
Texaco Capital Incorporated, 9.00%, 12/15/99 65,000 68,169
-----------
10,382,466
-----------
Retailing (0.8%)
Penney J.C. & Company, 6.95%, 04/01/00 ..... 450,000 457,875
Wal-Mart Stores, 6.75%, 05/15/02 ........... 100,000 102,250
-----------
560,125
-----------
Transportation (0.2%)
Southwest Airlines, 9.40%, 07/01/01 ........ 150,000 163,500
-----------
163,500
-----------
Utilities (6.5%)
Alabama Power Company, 6.38%, 08/01/99 ..... 30,000 30,150
Baltimore Gas & Electric, 8.93%, 07/16/98 .. 100,000 100,875
Consolidated Natural Gas, 8.75%, 06/01/99 .. 465,000 478,950
National Rural Utilities, 6.75%, 09/01/01 .. 300,000 306,375
Orange & Rockland Utility, 9.38%, 03/15/00 . 275,000 291,500
Philadelphia Electric, 8.00%, 04/01/02 ..... 1,000,000 1,061,250
Potomac Capital Investment, 6.80%, 09/12/01 1,000,000 1,006,250
Public Service Electric & Gas,
8.75%, 07/01/99 .................... 1,000,000 1,031,250
Southern California Edison, 8.25%, 02/01/00 60,000 62,325
-----------
4,368,925
-----------
Total Corporate Bonds (cost: $25,648,693) .................. 25,763,704
-----------
U.S. Government And Agency Securities (61.2%)
U.S. Treasury Notes (51.0%)
5.13%, 11/30/98 ............................ 600,000 598,614
5.50%, 04/15/00 ............................ 1,600,000 1,596,592
5.50%, 12/31/00 ............................ 2,800,000 2,789,136
5.50%, 01/31/03 ............................ 1,500,000 1,489,020
5.88%, 11/15/99 ............................ 1,200,000 1,204,752
6.00%, 08/15/99 ............................ 1,750,000 1,758,960
6.13%, 07/31/00 ............................ 3,500,000 3,536,995
6.25%, 04/30/01 ............................ 1,500,000 1,524,180
</TABLE>
See accompanying notes to financial statements.
- 6 -
<PAGE>
Schedule of Investments
Griffin Short-Term Bond Fund (Continued)
March 31, 1998
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- ------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
6.38%, 01/15/99 ............................ $ 675,000 $ 679,313
6.63%, 06/30/01 ............................ 350,000 359,538
6.88%, 03/31/00 ............................ 550,000 562,986
7.00%, 04/15/99 ............................ 2,200,000 2,231,900
7.13%, 02/29/00 ............................ 650,000 667,557
7.50%, 05/15/02 ............................ 5,550,000 5,912,526
7.50%, 10/31/99 ............................ 650,000 668,213
7.75%, 01/31/00 ............................ 1,950,000 2,021,175
7.75%, 12/31/99 ............................ 1,500,000 1,552,575
8.50%, 02/15/00 ............................ 700,000 735,266
8.88%, 05/15/00 ............................ 1,150,000 1,224,003
9.13%, 05/15/99 ............................ 3,200,000 3,320,992
-----------
34,434,291
-----------
U.S. Agency Securities (10.2%)
Federal Home Loan Bank (0.6%)
5.89%, 07/24/00 ............................ 200,000 200,276
5.94%, 06/13/00 ............................ 200,000 200,468
-----------
400,744
-----------
Federal Home Loan Mortgage Corporation (3.1%)
5.50%, 05/01/01 ........................... 207,610 204,300
5.50%, 06/01/01 ........................... 189,456 186,438
6.00%, 06/01/01 ........................... 88,312 88,118
6.00%, 06/01/01 .......................... 397,972 397,100
6.00%, 04/01/99 ........................... 126,866 126,588
6.50%, 05/01/01 ........................... 376,367 378,719
6.50%, 12/01/99 ........................... 343,889 348,294
7.00%, 09/01/01 ........................... 306,290 310,691
7.75%, 11/07/01 ........................... 50,000 53,056
-----------
2,093,304
-----------
Federal National Mortgage Association (4.9%)
6.00%, 03/01/05 ........................... 999,066 992,502
7.50%, 02/11/02 ........................... 1,500,000 1,584,795
8.25%, 12/18/00 ........................... 225,000 238,626
9.05%, 04/10/00 ........................... 475,000 503,894
-----------
3,319,817
-----------
Student Loan Mortgage Association (1.6%)
6.05%, 09/14/00 ........................... 1,100,000 1,105,148
-----------
Total U.S. Government And Agency Securities
(cost: $41,065,015) ................................ $41,353,304
-----------
Short-Term Securities (0.6%)
State Street Bank & Trust Co.,
Master Repurchase Agreement, 4.25%,
Dated 3/31/98 due 4/1/98, Collateralized
by U.S. Government Securities
(delivery value $392,493) ................... $ 392,447 392,447
-----------
Total Short-Term Securities (cost: $392,447) ............... 392,447
-----------
Total Investments in Securities
(cost: $67,106,155)(b)(90.6%) ...................... 67,509,456
Other Assets Less Liabilities (9.4%) ....................... 7,024,799
-----------
Net Assets (100.0%) ........................................ $74,534,255
===========
</TABLE>
- ----------
Notes to Schedule of Investments
(a) Securites 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 were as follows:
Gross unrealized appreciation $498,470
Gross unrealized depreciation (95,169)
-------
Net unrealized appreciation $403,301
========
See accompanying notes to financial statements.
- 7 -
<PAGE>
Schedule of Investments
Griffin U.S. Government Income Fund
March 31, 1998
[PIE CHART APPEARS HERE]
U.S. Government Agency Securities 6%
U.S. Treasury Notes & Bonds 37%
Mortgage-Backed Securities 57%
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 (56.9%):
Government National Mortgage Association (16.9%):
7.00%, 02/15/28 (b) ...................... $ 7,000,000 $ 7,056,840
7.50%, 03/15/24 .......................... 2,906,122 2,991,475
7.50%, 03/15/26 .......................... 854,884 876,786
7.50%, 06/15/27 .......................... 3,599,724 3,691,949
8.00%, 10/15/24 .......................... 356,503 369,201
8.00%, 12/15/24 .......................... 244,015 252,706
8.00%, 05/15/26 .......................... 1,487,307 1,540,285
8.00%, 06/15/26 .......................... 743,000 769,466
8.00%, 02/15/27 .......................... 1,786,406 1,850,038
12.50%, 12/15/10 ......................... 24,257 28,259
12.50%, 06/15/14 ......................... 29,030 33,819
12.50%, 06/15/15 ......................... 16,863 19,645
13.00%, 08/15/12 ......................... 35,089 41,054
------------
19,521,525
------------
Federal Home Loan Mortgage Corporation (4.9%):
6.59%, 02/15/21 .......................... 3,550,000 3,639,859
7.00%, 01/15/24 .......................... 2,000,000 2,059,800
------------
5,699,659
------------
Federal National Mortgage Association (30.9%):
6.20%, 06/25/19 .......................... 1,483,043 1,489,420
6.25%, 06/25/19 .......................... 4,200,000 4,196,346
6.35%, 04/25/27 (b) ...................... 4,378,838 4,425,363
6.50%, 04/01/13 (b) ...................... 3,000,000 3,002,790
6.50%, 03/01/28 .......................... 2,000,000 1,974,360
6.75%, 07/18/19 .......................... 6,000,000 6,068,880
7.00%, 03/01/27 .......................... 4,819,260 4,879,501
7.50%, 02/01/28 (b) ...................... 5,000,000 5,125,000
8.10%, 08/12/19 .......................... 1,000,000 1,216,480
9.00%, 05/25/20 .......................... 3,000,000 3,243,030
------------
35,621,170
------------
Federal Home Loan Mortgage Corporation (3.1%):
6.35%, 03/15/25 .......................... 3,572,045 3,588,230
------------
Collateralized Mortgage Obligations (1.1%):
L. F. Rothschild Mortgage Trust, Series 3,
Class Z, 9.95%, 09/01/17 ......... $ 1,157,996 $ 1,285,457
------------
Total Mortgage-Backed Securities (cost: $64,791,696) ..... 65,716,042
------------
U.S. Government Securities (36.9%):
U.S. Treasury Bonds (20.1%):
6.25%, 08/15/23 .......................... 5,000,000 5,151,550
8.13%, 08/15/19 .......................... 4,000,000 5,002,000
12.00%, 08/15/13 ......................... 8,850,000 12,995,783
------------
23,149,333
------------
U.S. Treasury Notes (16.8%):
5.75%, 11/15/00 .......................... 2,400,000 2,405,568
6.13%, 12/31/01 .......................... 4,000,000 4,056,200
6.13%, 08/15/07 .......................... 5,000,000 5,138,150
6.25%, 08/31/02 .......................... 5,000,000 5,104,500
7.00%, 07/15/06 .......................... 2,500,000 2,700,150
------------
19,404,568
------------
Total U.S. Government Securities
(cost: $41,689,081) .............................. 42,553,901
------------
Short-Term Securities (6.1%):
Federal Home Loan Mortgage Corporation (6.1%):
5.70%, 04/01/98 (c) ...................... 6,990,000 6,990,000
------------
Total Short-Term Securities (cost: $6,990,000) ........... 6,990,000
------------
Total Investments in Securities
(cost: $113,470,776)(d)(112.6%) .................. 115,259,942
Other Assets Less Liabilities (-12.6%) ................... (12,932,384)
------------
Net Assets (100.0%) ...................................... $ 102,327,558
============
</TABLE>
- ----------
Notes to Schedule of Investments
(a) Securites are valued in accordance with procedures described in note 1 to
the financial statements.
(b) Settlement is on a delayed delivery or when issued basis with final
maturity to be announced (TBA) in the future. The total cost basis of such
securities is $16,979,727.
(c) Rate represents annualized yield to maturity at March 31, 1998.
(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:
Gross unrealized appreciation $1,907,561
Gross unrealized depreciation (118,395)
--------
Net unrealized appreciation $1,789,166
==========
See accompanying notes to financial statements.
- 8 -
<PAGE>
Schedule of Investments
Griffin Bond Fund
March 31, 1998
[PIE CHART APPEARS HERE]
U.S. Government Agency Securities 9%
U.S. Treasury Notes & Bonds 13%
Corporate Bonds 73%
Other 5%
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 (2.8%):
Banking (1.4%):
Capital Equipment Receivables Trust, 6.28%,
06/15/00 ..................................... $ 519,000 $ 521,989
CIT Revenue Trust, 6.20%, 10/16/06 ................... 504,000 505,722
-----------
1,027,712
-----------
Autos (1.4%):
World Omni Automobile Lease Securitization
Trust, Series 1997-A
6.20%, 11/25/03 .............................. 474,000 475,778
6.85%, 06/25/03 .............................. 505,000 511,565
-----------
987,343
-----------
Total Asset Backed Securities (cost: $2,007,256) ..................... 2,015,054
-----------
Corporate Bonds (72.9%):
Autos (7.8%):
Ford Motor Credit Corp. ..............................
6.85%, 08/15/00 .............................. 250,000 254,375
7.40%, 11/01/46 .............................. 825,000 875,531
8.20%, 02/15/02 .............................. 500,000 533,750
General Motors Acceptance Corporation
6.13%, 01/22/08 .............................. 690,000 673,613
6.63%, 09/19/02 .............................. 455,000 460,688
6.88%, 07/15/01 .............................. 15,000 219,031
7.13%, 05/01/01 .............................. 2,110,000 2,165,388
9.63%, 05/15/00 .............................. 100,000 106,875
9.63%, 12/01/00 .............................. 350,000 379,750
-----------
5,669,000
-----------
Banking (12.0%):
Abbey National First Capital Corporation,
8.20%, 10/15/04 (b) .......................... 175,000 192,281
BankAmerica Corporation
6.63%, 08/01/07 .............................. 1,000,000 1,006,250
6.63%, 10/15/07 .............................. 95,000 95,475
7.50%, 10/15/02 .............................. 150,000 156,750
Branch Banking & Trust Corporation, 7.25%,
06/15/07 ..................................... 690,000 725,363
Capital One Bank, 6.83%, 08/16/99 .................... $ 300,000 $ 301,500
Chase Manhattan Bank, 7.13%, 03/01/05 ................ 400,000 414,500
Citicorp, 8.00%, 02/01/03 ............................ 1,000,000 1,066,250
First National Bank of Boston, 7.38%,
09/15/06 ..................................... 270,000 285,188
First Security Corporation, 6.88%, 11/15/06 .......... 155,000 158,488
First Union Corporation, 9.45%, 08/15/01 ............. 246,000 270,600
Fleet Financial Group, 7.13%, 04/15/06 ............... 335,000 347,981
Golden West Financial, 7.88%, 01/15/02 ............... 250,000 262,813
MBNA Corporation, 6.92%, 05/30/00 .................... 495,000 501,806
Morgan J.P. & Company
7.63%, 09/15/04 .............................. 250,000 266,563
7.63%, 11/15/98 .............................. 250,000 252,335
NationsBank Corporation
5.38%, 04/15/00 .............................. 300,000 296,250
6.38%, 02/15/08 .............................. 680,000 674,900
6.80%, 03/15/28 .............................. 230,000 226,550
7.25%, 10/15/25 .............................. 275,000 288,750
PNC Institute Capital Cl B, 8.32%, 05/15/27 .......... 500,000 542,500
Shawmut Bank, 8.63%, 02/15/05 ........................ 400,000 447,000
-----------
8,780,091
-----------
Communications (2.3%):
360 Communications Company, 7.60%,
04/01/09 ..................................... 100,000 107,750
Cable & Wireless Communications, 6.38%,
03/06/03 ..................................... 180,000 179,100
GTE South, 6.00%, 02/15/08 ........................... 250,000 242,500
WorldCom Incorporated
7.55%, 04/01/04 .............................. 675,000 708,750
7.75%, 04/01/07 .............................. 390,000 421,200
-----------
1,659,300
-----------
Electric Utilities (0.4%):
Avon Energy Partners Holdings, 6.73%,
12/11/02 ............................................. 300,000 301,500
-----------
Financial Services (21.5%):
Aegon, 8.00%, 08/15/06 (b) ........................... 314,000 346,185
American Telephone & Telegraph Capital
Corporation, 5.65%, 01/15/99 ................. 390,000 388,545
Associates Corporation, N.A ..........................
6.63%, 05/15/01 .............................. 80,000 81,200
6.75%, 07/15/01 .............................. 104,000 105,950
Bear Stearns Company
6.50%, 06/15/00 .............................. 225,000 227,250
7.63%, 09/15/99 .............................. 250,000 255,338
CIT Group Holdings, 8.75%, 04/15/98 .................. 110,000 110,101
Donaldson Lufkin & Jenrette, 6.88%, 11/01/05 ......... 294,000 300,983
Finova Capital Corporation
5.98%, 02/27/01 .............................. 1,146,000 1,137,405
6.22%, 03/01/00 .............................. 745,000 745,000
Household Finance Company, 6.58%, 05/17/99 ........... 435,000 436,910
Jefferson-Pilot Capital Trust Cl A, 8.14%,
01/15/46 ..................................... 500,000 523,750
Jefferson-Pilot Capital Trust Cl B, 8.29%,
03/01/46 ..................................... 100,000 106,500
</TABLE>
See accompanying notes to financial statements.
- 9 -
<PAGE>
Schedule of Investments
Griffin Bond Fund (Continued)
March 31, 1998
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Lehman Brothers Incorporated
6.13%, 02/01/01 .............................. $ 550,000 $ 547,250
6.65%, 11/08/00 .............................. 502,000 506,393
8.50%, 05/01/07 .............................. 950,000 1,075,875
Lincoln National Corporation, 7.25%, 05/15/05 ........ 165,000 173,044
Merrill Lynch & Company Incorporated
6.00%, 02/12/03 .............................. 1,000,000 987,500
6.25%, 01/15/06 .............................. 230,000 228,563
7.38%, 08/17/02 .............................. 200,000 208,750
Morgan Stanley Group, 8.88%, 10/15/01 ................ 300,000 325,125
Paine Webber Group
6.79%, 07/01/03 .............................. 375,000 379,219
7.39%, 10/16/17 .............................. 415,000 425,375
7.63%, 10/15/08 .............................. 40,000 42,500
7.81%, 02/13/17 .............................. 165,000 175,519
8.06%, 01/17/17 .............................. 255,000 279,863
8.25%, 05/01/02 .............................. 200,000 212,750
Safeco Capital Trust, 8.07%, 07/15/37 ................ 500,000 525,000
Salomon Incorporated
6.50%, 03/01/00 .............................. 182,000 183,365
7.00%, 05/15/99 .............................. 280,000 282,562
7.59%, 01/28/00 .............................. 300,000 307,875
Salomon Smith Barney Holdings, 7.13%,
10/01/06 ..................................... 345,000 359,231
Sears Roebuck Acceptance, 6.00%, 03/20/03 ............ 1,075,000 1,062,906
Travelers Property Casualty Corp. ....................
6.75%, 04/15/01 .............................. 500,000 509,375
6.75%, 11/15/06 .............................. 230,000 234,600
US Leasing International, 8.75%, 12/01/01 ............ 505,000 547,294
USF&G Corporation, 8.38%, 06/15/01 ................... 575,000 606,625
Zurich Capital Trust I, 8.38%, 06/01/37 .............. 665,000 724,850
-----------
15,676,523
-----------
Industrial Conglomerate (27.4%):
Black & Decker
7.00%, 02/01/06 .............................. 50,000 51,500
7.50%, 04/01/03 .............................. 185,000 193,325
Brunswick Corporation, 7.13%, 08/01/27 ............... 700,000 713,125
Burlington Industries, 7.25%, 08/01/27 ............... 500,000 511,250
Coastal Corporation, 8.13%, 09/15/02 ................. 165,000 176,138
Coca Cola Company, 7.88%, 09/15/98 ................... 200,000 201,602
Columbia/HCA Healthcare
6.91%, 06/15/05 .............................. 300,000 279,750
7.15%, 03/30/04 .............................. 250,000 237,500
Comdisco Incorporated, 6.36%, 01/25/99 ............... 210,000 210,525
ConAgra Incorporated, 6.70%, 08/01/27 ................ 343,000 350,718
CPC International Incorporated, 6.15%,
01/15/06 ..................................... 350,000 346,938
CSR America Incorporated, 6.88%, 07/21/05 ............ 300,000 308,625
Embotelladora Andina SA,
7.00%, 10/01/07 (b) .......................... 560,000 548,100
Federated Department Stores, 8.13%, 10/15/02 ......... 355,000 379,850
Fort James Corporation, 6.88%, 09/15/07 .............. 615,000 624,225
Fortune Brands Incorporated, 7.50%, 05/15/99 ......... 120,000 121,800
Hearst-Argyle Television Incorporated, 7.50%,
11/15/27 ..................................... 725,000 735,875
Hilton Hotels Corporation, 7.38%, 06/01/02 ........... 369,000 374,074
Honeywell Incorporated, 6.60%, 04/15/01 .............. 400,000 406,000
Hyder PLC, 6.75%, 12/15/04 (b) ....................... $1,000,000 $1,003,750
Ingersoll-Rand, 6.26%, 02/15/01 ...................... 675,000 678,375
International Business Machines Corporation,
6.38%, 06/15/00 .............................. 200,000 202,000
International Paper Company, 9.70%, 03/15/00 ......... 160,000 170,800
Interpool Incorporated, 7.20%, 08/01/07 .............. 600,000 601,500
Lockheed Martin Corporation
7.25%, 05/15/06 .............................. 145,000 152,794
7.75%, 05/01/26 .............................. 520,000 581,100
Nabisco Incorporated, 6.00%, 02/15/11 ................ 540,000 535,275
News America Holdings, 7.50%, 03/01/00 ............... 325,000 333,125
Noble Drilling Corporation, 9.13%, 07/01/06 .......... 625,000 691,406
Norcen Energy Resources, 7.38%, 05/15/06 ............. 120,000 126,000
Occidental Petroleum, 7.09%, 09/08/99 ................ 65,000 65,813
Pepsico Incorporated, 7.75%, 10/01/98 ................ 300,000 302,295
Potash Corporation Saskatchewan, 7.13%,
06/15/07 (b) ................................. 330,000 339,488
Raytheon Co
5.95%, 03/15/01 .............................. 730,000 727,263
6.45%, 08/15/02 .............................. 1,070,000 1,078,025
Royal Caribbean Cruises
7.13%, 09/18/02 .............................. 426,000 437,183
7.25%, 08/15/06 .............................. 111,000 115,440
7.50%, 10/15/27 .............................. 245,000 249,594
Sears Roebuck & Company
9.25%, 04/15/98 .............................. 165,000 165,162
9.35%, 07/06/98 .............................. 100,000 100,785
9.38%, 04/08/98 .............................. 300,000 300,129
Sony Corporation, 6.13%, 03/04/03 .................... 100,000 99,500
Staples Incorporated, 7.13%, 08/15/07 ................ 775,000 795,344
USG Corporation, 9.25%, 09/15/01 ..................... 1,012,000 1,099,258
U.S.A. Waste Services, 7.13%, 10/01/07 ............... 495,000 514,181
Wal-Mart Stores, 8.63%, 04/01/01 ..................... 350,000 374,500
WMX Technology Incorporated
7.70%, 10/01/02 .............................. 1,145,000 1,197,956
8.25%, 11/15/99 .............................. 200,000 205,250
-----------
20,014,207
-----------
Transportation (1.0%):
Southwest Airlines, 7.88%, 09/01/07 .................. 200,000 219,750
Union Pacific Corporation
7.38%, 05/15/01 .............................. 250,000 258,125
9.63%, 12/15/02 .............................. 200,000 225,000
-----------
702,875
-----------
Utilities (0.5%):
Florida Power & Light, 5.38%, 04/01/00 ............... 305,000 301,950
Virginia Electric & Power, 8.88%, 06/01/99 ........... 125,000 129,063
-----------
431,013
-----------
Total Corporate Bonds (cost: $52,436,695) ............................ 53,234,509
-----------
U.S. Government And Agency Securities (21.5%):
U.S. Government Securities (13.2%):
U.S. Treasury Bonds (6.3%):
7.25%, 08/15/22 .............................. 4,294,000 4,955,362
-----------
</TABLE>
See accompanying notes to financial statements.
- 10 -
<PAGE>
Schedule of Investments
Griffin Bond Fund (Continued)
March 31, 1998
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
U.S. Treasury Notes (6.9%):
5.88%, 11/15/99 .............................. $ 816,000 $ 819,231
6.38%, 08/15/02 .............................. 506,000 519,080
6.50%, 10/15/06 .............................. 264,000 276,859
6.75%, 05/31/99 .............................. 3,738,000 3,786,295
-----------
5,401,466
-----------
U.S. Agency Securities (8.9%):
Government National Mortgage Association (5.3%):
7.00%, 11/15/23 .............................. 314,411 317,455
7.50%, 12/15/23 .............................. 560,849 577,321
8.00%, 07/15/17 .............................. 322,049 334,728
8.00%, 06/15/27 .............................. 237,404 245,860
8.00%, 08/15/27 .............................. 1,879,118 1,946,052
9.00%, 12/15/21 .............................. 249,258 315,960
9.00%, 12/15/21 .............................. 109,649 118,592
-----------
3,855,968
-----------
Federal Home Loan Mortgage Corporation (0.1%):
7.00%, 04/01/13 (c) .......................... 102,000 103,785
-----------
Federal National Mortgage Association (3.5%):
6.00%, 04/01/04 .............................. 354,637 352,307
6.50%, 04/01/13 (c) .......................... 1,057,000 1,057,983
6.86%, 06/17/11 .............................. 150,000 154,125
7.00%, 07/01/22 .............................. 76,780 77,523
7.00%, 07/01/23 .............................. 216,239 218,332
7.00%, 08/01/26 .............................. 93,954 94,863
7.00%, 09/01/26 .............................. 162,722 164,297
7.00%, 11/01/26 .............................. 23,792 24,022
7.50%, 09/01/11 .............................. 80,669 82,938
7.54%, 06/01/16 .............................. 320,740 340,585
-----------
2,566,975
-----------
Total U.S. Government And Agency Securities
(cost: $16,882,707) .......................................... $16,883,556
-----------
Short-Term Securities (1.2%):
Repurchase Agreement
State Street Bank & Trust Co., Master
Repurchase Agreement, 4.25%, dated
3/31/98 due 4/1/98, Collateralized by
U.S. Government Securities
(delivery value $879,949) .................... $ 879,846 $ 879,846
-----------
Total Short-Term Securities (cost: $879,846) ......................... 879,846
-----------
Total Investments in Securities
(cost: $72,206,503)(d)(93.1%) ................................ 73,012,965
Other Assets Less Liabilities (6.9%) ................................. 5,428,841
-----------
Net Assets (100.0%) .................................................. $78,441,806
===========
</TABLE>
- ----------
Notes to Schedule of Investments
(a) Securites 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) Settlement is on a delayed delivery or when issued basis with final
maturity to be announced (TBA) in the future. The total cost basis of such
securities is $1,155,096.
(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:
Gross unrealized appreciation $984,809
Gross unrealized depreciation (178,347)
--------
Net unrealized appreciation $806,462
========
See accompanying notes to financial statements.
- 11 -
<PAGE>
Schedule of Investments
Griffin Municipal Bond Fund
March 31, 1998
[PIE CHART APPEARS HERE]
General Obligations 33%
Transportation 5%
Water 9%
Electric 4%
Sewer 5%
Education 11%
Sales Tax 5%
Pre-refunded 5%
Industrial Development 10%
Healthcare 3%
Housing 2%
Other 8%
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 (91.8%):
Alaska (3.6%):
Alaska Student Loan Revenue,
5.25%, 07/01/07 .............................. $ 500,000 $ 520,000
----------
Arizona (3.6%):
Arizona State University Revenue System,
7.00%, Pre-refunded to 07/01/02 .............. 250,000 279,688
Phoenix, Arizona, Series A, General
Obligation, 6.25%, 07/01/17 .................. 200,000 233,250
----------
512,938
----------
California (0.7%):
California State Department of Water
Resources, 5.00%, 12/01/22 ................... 100,000 96,625
----------
Colorado (1.0%):
Arapahoe County, Colorado Capital Improvement
Trust Fund Highway Revenue,
6.90%, Pre-refunded to 08/31/03 .............. 125,000 148,125
----------
Dist Of Columbia (4.8%):
District of Columbia Water & Sewer Authority
Public Utility Revenue Bond,
5.50%, 10/01/17 .............................. 500,000 525,625
District of Columbia, American Association
for the Advancement of Science, Revenue,
6.00%, 01/01/09 .............................. 150,000 166,313
----------
691,938
----------
Florida (4.3%):
Dade County, Florida Aviation Revenue,
5.50%, 10/01/07 .............................. 200,000 213,750
Dade County, Florida General Obligation,
7.70%, 10/01/08 .............................. 200,000 251,750
Florida State Board of Education Capital
Outlay Public Education, 5.75%, 06/01/15 ..... 150,000 158,438
----------
623,938
----------
Georgia (1.3%):
Georgia State General Obligation,
7.20%, 03/01/08 .............................. $ 150,000 $ 182,438
----------
Hawaii (1.2%):
State of Hawaii, General Obligation,
6.00%, 09/01/09 .............................. 150,000 167,625
----------
Idaho (1.4%):
Idaho Housing & Finance Association, Single
Family Mortgage, 5.20%, 07/01/27 ............. 200,000 203,500
----------
Illinois (7.5%):
Du Page County, Illinois General Obligation
Revenue Bond, Stormwater Project,
5.60%, 01/01/21 .............................. 250,000 270,313
Illinois Educational Facilities Authority
Revenue, Northwestern University,
5.10%, 11/01/32 .............................. 450,000 463,500
Metropolitan Pier & Exposition Authority
Dedicated State Tax Revenue,
4.30%, 06/15/01 (b) .......................... 400,000 349,000
----------
1,082,813
----------
Indiana (0.8%):
Wa-Nee Elementary/High School Building
Corporation, Revenue, 6.50%,
pre-refunded to 01/15/04 ..................... 100,000 112,500
----------
Massachusetts (5.8%):
Massachusetts Bay Transportation Authority
General Transportation System,
5.60%, 03/01/08 .............................. 200,000 216,250
Massachusetts State General Obligation,
5.00%, 06/01/10 .............................. 500,000 510,625
Massachusetts State Water Resources Authority
6.00%, 08/01/14 .............................. 100,000 110,750
----------
837,625
----------
Michigan (4.4%):
Michigan Municipal Bond Authority Revenue,
6.00%, 10/01/07 .............................. 200,000 224,250
Michigan State Hospital Financing Authority,
Metropolitan Hospital, 5.88%, 07/01/14 ....... 75,000 78,281
Michigan State Underground Storage Tank
Financial Assurance Authority Revenue,
6.00%, 05/01/05 .............................. 300,000 329,625
----------
632,156
----------
Minnesota (3.0%):
Minnesota Public Facilities Authority Water
Pollution Control Revenue, 6.00%, 03/01/07 ... 200,000 224,000
University of Minnesota, Series A, Revenue
Bond, 4.75%, 07/01/03 ........................ 200,000 205,500
----------
429,500
----------
</TABLE>
See accompanying notes to financial statements.
- 12 -
<PAGE>
Schedule of Investments
Griffin Municipal Bond Fund (Continued)
March 31, 1998
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Nevada (0.7%):
Nevada State General Obligation,
5.80%, 07/15/08 .............................. $ 100,000 $ 107,500
----------
New Jersey (2.7%):
New Jersey State General Obligation,
6.00%, 02/15/11 .............................. 350,000 393,313
----------
New York (6.3%):
New York State Environmental Facilities
Corporation Pollution Control Revenue,
5.50%, 06/15/09 .............................. 200,000 214,000
New York State Environmental Facilities,
State Clean Water & Drinking, Revolving
Funds, Series C, 5.00%, 06/15/19 ............. 500,000 485,625
New York, New York General Obligation,
6.00%, 02/01/04 .............................. 200,000 214,750
----------
914,375
----------
Ohio (9.6%):
Cleveland, Ohio General Obligation,
5.38%, 09/01/09 .............................. 350,000 371,438
Franklin County, Ohio Hospital Revenue, Holy
Cross Health Systems Corporation,
5.50%, 06/01/01 .............................. 300,000 312,000
Ohio State Water Department Authority Revenue
Fresh Water Series, Revenue,
5.70%, 06/01/09 .............................. 200,000 214,750
University of Cincinnati, General Receipts,
Series AA, 5.00%, 06/01/18 ................... 500,000 489,375
----------
1,378,563
----------
Oregon (0.8%):
Oregon State Department of Transportation
Revenue, Regional Light Rail Fund - Westside
Project, 6.25%, 06/01/09 ..................... 100,000 110,750
----------
Pennsylvania (3.8%):
Commonwealth of Pennsylvania General
Obligation, 5.20%, 06/15/04 .................. 250,000 262,813
Pennsylvania State Industrial Development
Authority Revenue, 7.00%, 07/01/06 ........... 250,000 291,875
----------
554,688
----------
Puerto Rico (5.0%):
Puerto Rico Electric Power Authority,
Electric Revenue, 6.13%, 07/01/08 ............ 200,000 224,000
Puerto Rico Industrial Tourist Educational
Medical & Environmental Central Facilities,
Inter American University, Series A,
5.00%, 10/01/15 ...................... 500,000 494,375
----------
718,375
----------
South Carolina (1.5%):
Columbia, South Carolina Water Works & Sewer
Systems Revenue, 5.38%, 02/01/12 ............. 200,000 211,000
----------
South Dakota (0.8%):
South Dakota Housing Development Authority,
Homeownership Mortgage, 6.65%, 05/01/14 $100,000 $ 108,375
----------
Tennessee (1.5%):
Kingsport, Tennessee General Obligation,
5.60%, 09/01/03 .............................. 200,000 212,250
----------
Texas (5.2%):
Austin, Texas General Obligation,
5.70%, 09/01/07 .............................. 200,000 218,250
Harris County, Texas Tax and Revenue
Certificate of Obligation, 6.00%, 12/15/10 ... 200,000 226,500
San Antonio, Texas Electric & Gas Revenue,
5.00%, 02/01/14 .............................. 100,000 98,625
Texas Municipal Power Agency Revenue,
5.25%, 09/01/08 .............................. 200,000 211,250
----------
754,625
----------
Virginia (0.9%):
Virginia State Transportation Board Revenue,
North Virginia Transportation District
Program, 6.25%, 05/15/12 ..................... 120,000 133,350
----------
Washington (3.3%):
Seattle, Washington Water System Revenue,
5.25%, 12/01/23 .............................. 250,000 250,938
Washington State General Obligation,
5.75%, 09/01/09 .............................. 200,000 220,250
----------
471,188
----------
West Virginia (3.4%):
West Virginia State, General Obligation,
5.00%, 11/01/21 .............................. 500,000 486,875
----------
Wisconsin (2.9%):
Wisconsin State General Obligation,
5.13%, 11/01/07 .............................. 200,000 209,750
Wisconsin State Transportation Revenue,
5.50%, 07/01/14 .............................. 200,000 204,750
----------
414,500
----------
Total Municipal Long-Term Securities (cost: $12,733,692) ............. 13,220,444
----------
Municipal Short-Term Securities (8.3%):
Florida (1.4%):
Citrus Park Community Development District
Florida, Capital Improvements,
3.65%, 04/01/98 (c) .......................... 200,000 200,000
----------
Kansas (0.7%):
Kansas City, Kansas Industrial Revenue,
3.90%, 04/01/98 (c) .......................... 100,000 100,000
----------
</TABLE>
See accompanying notes to financial statements.
- 13 -
<PAGE>
Schedule of Investments
Griffin Municipal Bond Fund (Continued)
March 31, 1998
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Louisiana (1.4%):
Louisiana State Offshore Terminal Authority
Deep Water Port Revenue, 3.75%,
04/01/98 (c) ......................... $ 200,000 $ 200,000
----------
Michigan (2.8%):
Michigan State Hospital Financing Authority,
Kent Hospital, 3.65%, 04/01/98 (c) ........... 400,000 400,000
----------
New Mexico (0.7%):
Albuquerque, New Mexico lodgers tax,
3.70%, 04/01/98 (c) .......................... 100,000 100,000
----------
Texas (0.7%):
Guadalupe Blanco River Authority Texas
Pollution Control Revenue, Central Power &
Light Project, 3.80%, 04/01/98 (c) ........... 100,000 100,000
----------
Wyoming (0.7%):
Kemerer County, Wyoming Pollution Control
Revenue, 3.75%, 04/01/98 (c) ................. 100,000 100,000
----------
Total Municipal Short-Term Securities (cost: $1,200,000) ............. 1,200,000
----------
Other Short-Term Securities (0.0%):
Seven Seas Tax Free Money Market Fund,
3.11%, 04/01/98 ...................................... 1,509 $ 1,509
----------
Total Other Short-Term Securities (cost: $1,509) ..................... 1,509
----------
Total Investments in Securities
(cost: $13,935,201)(d)(99.7%) ................................ 14,421,953
Other Assets Less Liabilities (0.3%) ................................. 49,620
----------
Net Assets (100.0%) .................................................. $14,471,573
==========
</TABLE>
- ----------
Notes to Schedule of Investments
(a) Securites are valued in accordance with procedures described in note 1 to
the financial statements.
(b) Rate on this zero coupon bonds represents annualized yield to maturity at
March 31, 1998.
(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:
Gross unrealized appreciation $499,384
Gross unrealized depreciation (12,632)
-------
Net unrealized appreciation $486,752
========
See accompanying notes to financial statements.
- 14 -
<PAGE>
Schedule of Investments
Griffin California Tax-Free Fund
March 31, 1998
[PIE CHART APPEARS HERE]
General Obligations 22%
Water 17%
Education 5%
Sales Tax 11%
Airport 7%
Transportation 6%
Housing 6%
Industrial Development 6%
Electric 5%
Tax Allocation 5%
Healthcare 5%
Other 5%
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 (92.4%):
Airport Revenue (7.1%):
Los Angeles, California Department of
Airports, 5.50%, 05/15/08 .................... $1,000,000 $1,066,250
San Francisco, California City & County
Airports, Second Series Issue 12-B,
5.50%, 05/01/09 .............................. 705,000 750,825
San Francisco, California City & County
Airport Commission, International Airport
Revenue Bonds, Series 15A,
5.00%, 05/01/21 .............................. 1,000,000 958,750
----------
2,775,825
----------
Electric Revenue (5.2%):
Puerto Rico Electric Power Authority
Revenue, Series U, 6.00%, 07/01/14 ........... 750,000 812,813
Turlock, California Irrigation District
Revenue Bond, Series A, 5.00%, 01/01/17 ...... 1,250,000 1,226,563
----------
2,039,375
----------
General Obligations (21.6%):
Folsom, California School Facilities Project
- Series B, 6.00%, 08/01/10 .................. 300,000 329,625
Los Angeles, California Unified School
District, 6.00%, 07/01/11 .................... 1,000,000 1,123,750
Los Angeles, California Unified School
District, 6.00%, 07/01/13 .................... 1,445,000 1,616,594
Puerto Rico Commonwealth, 5.65%, 07/01/15 ............ 800,000 868,000
State of California,
5.50%, 04/01/13 .............................. 2,000,000 2,137,500
6.60%, 02/01/10 .............................. 1,000,000 1,178,750
6.75%, 02/01/08 .............................. 1,000,000 1,182,500
----------
8,436,719
----------
Health Care Services (2.4%):
Monterey County, California Certificate of
Participation, Natividad Medical Center
Improvements, Series E, 4.75%, 08/01/17 ...... 1,000,000 950,000
----------
Hospital Revenue (2.1%):
California Health Facilities Financing
Authority Revenue, Downey Community
Hospital, 5.20%, 05/15/03 .................... $ 500,000 $ 514,375
California Health Facilities Financing
Authority Revenue, Kaiser Permanente,
Series C, 5.60%, 05/01/33 .................... 300,000 303,750
----------
818,125
----------
Housing Revenue (5.6%):
California Housing Finance Agency Revenue,
Home Mortgage, Series B, 5.20%, 08/01/26 ..... 500,000 510,625
Home Mortgage, Series F-1, 6.50%, 02/01/08 ... 1,060,000 1,166,000
Multi-Unit Rental Housing, 6.88%, 08/01/24 ... 500,000 531,875
----------
2,208,500
----------
Public Improvements (3.4%):
Sacramento, California Certificate of
Participation, Public Facilities Project,
6.00%, 07/01/12 .............................. 750,000 793,125
Santa Barbara County, California Certificate
of Participation, 6.40%, pre-refunded
to 02/01/01 .................................. 500,000 539,375
----------
1,332,500
----------
Sales Tax Revenue (10.8%):
Contra Costa, California Transportation
Authority Sales Tax Revenue,
6.00%, 03/01/07 .............................. 500,000 557,500
San Diego County, California Regional
Transportation Commission Sales Tax
Revenue, Series A, 4.75%, 04/01/08 ........... 765,000 782,213
San Francisco, California Bay Area Rapid
Transit District Sales Tax Revenue,
5.00%, 07/01/28 .............................. 1,000,000 968,750
5.35%, 07/01/07 .............................. 500,000 530,000
San Jose, California Redevelopment Agency
Tax Allocation,
5.38%, 08/01/11 .............................. 250,000 263,125
6.00%, 08/01/10 .............................. 1,000,000 1,127,500
----------
4,229,088
----------
Sewer Revenue (1.7%)
San Francisco, California City & County Sewer
Revenue, 5.90%, 10/01/08 ..................... 600,000 648,000
----------
Special Tax Assessment Revenue (1.5%):
South Orange County, California Public
Financing Authority Special Tax Revenue,
7.00%, 09/01/08 .............................. 500,000 601,250
----------
</TABLE>
See accompanying notes to financial statements.
- 15 -
<PAGE>
Schedule of Investments
Griffin California Tax-Free Fund (Continued)
March 31, 1998
<TABLE>
<CAPTION>
Principal Market
Name of Issuer Amount Value (a)
- -------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Tax Revenue Anticipatory Notes (2.6%):
Sacramento County, California Office of
Education Tax & Revenue Anticipation
Notes, 4.25%, 03/17/99 ....................... $1,000,000 $1,005,740
----------
Transportation Revenue (6.3%):
Long Beach, California Harbor Revenue,
5.25%, 05/15/25 .............................. 1,000,000 991,250
Los Angeles, California Harbor Department
Revenue, 5.38%, 11/01/23 ..................... 250,000 250,313
Riverside County, California Transportation
Community Sales Tax Revenue, Series A,
5.75%, 06/01/08 .............................. 500,000 551,875
San Joaquin Hills, California Transportation
Corridor Agency Toll Road Revenue,
4.90%, 01/15/07 .............................. 1,000,000 667,500
----------
2,460,938
----------
University/Education Revenue (4.9%):
California Educational Facilities Authority
Revenue Bond, Pooled College & University
Project, Series A, 5.15%, 12/01/04 ........... 500,000 524,375
California Educational Facilities Authority
Revenue, University of San Diego,
5.00%, 10/01/22 .............................. 1,000,000 971,250
University of California Certificate of
Participation, UCLA Center Chiller/
Cogeneration Project, 6.00%, 11/01/21 ........ 400,000 430,000
----------
1,925,625
----------
Water Revenue (17.2%):
California State Department of Water
Resources,
5.00%, 12/01/22 .............................. 300,000 289,875
6.00%, 12/01/06 .............................. 500,000 558,125
6.00%, 12/01/09 .............................. 500,000 563,125
Los Angeles, California Department of Water &
Power, Water Works Revenue,
6.20%, 07/01/12 .............................. 600,000 663,000
Metropolitan Water District of Southern
California,
5.00%, 07/01/10 .............................. 200,000 205,500
5.75%, 07/01/09 .............................. 750,000 825,000
6.00%, 07/01/07 .............................. 100,000 111,875
San Diego County, California Water Authority,
Water Revenue Certificate of Participation,
Series A, 4.75%, 05/01/18 .................... 1,000,000 947,500
West & Central Basin Financing Authority
Revenue,
5.00%, 08/01/09 .............................. 1,035,000 1,069,931
5.13%, 08/01/22 .............................. 1,500,000 1,483,125
----------
6,717,056
----------
Total Municipal Long-Term Securities
(cost: $34,697,653) .......................................... 36,148,740
----------
Municipal Short-Term Securities (7.7%):
Tax Revenue Anticipatory Notes (0.5%):
Los Angeles County, California Tax & Revenue
Anticipation Notes, Series A,
4.50%, 04/01/98 (c) .......................... $ 200,000 $ 200,308
----------
Industrial Development Revenue -
Pollution Control (5.6%):
California Pollution Control Financing, Shell
Oil Company Project, 2.65%, 04/01/98 (c) ..... 500,000 500,000
California Pollution Control Financing,
Pacific Gas & Electric,
3.50%, 04/01/98 (c) .......................... 500,000 500,000
2.90%, 04/01/98 (c) .......................... 1,200,000 1,200,000
----------
2,200,000
----------
Leasing Revenue (0.8%):
California Statewide Communities Development
Authority, Certificate of Participation,
2.80%, 04/01/98 (c) .......................... 300,000 300,000
----------
Industrial Development Revenue -
Manu/Misc Projects (0.3%):
Ontario, California, Winsford Partners
Revenue, 3.50%, 04/01/98 (c) ................. 100,000 100,000
----------
Housing Revenue (0.5%):
San Jose, California Revenue, Multi Family
Project, 3.35%, 04/02/98 (c) ................. 200,000 200,000
----------
Total Municipal Short-Term Securities
(cost: $3,000,308) ........................................... 3,000,308
----------
Total Investments in Securities
(cost: $37,697,960)(c)(100.4%) ............................... 39,149,048
Other Assets Less Liabilities (-0.4%) ................................ (168,385)
----------
Net Assets (100.0%) .................................................. $38,980,663
==========
</TABLE>
- ----------
Notes to Schedule of Investments
(a) Securites are valued in accordance with procedures described in note 1 to
the financial statements.
(b) Rate on this zero coupon bond represents annualized yield to maturity at
March 31, 1998.
(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:
Gross unrealized appreciation $1,536,647
Gross unrealized depreciation (85,559)
----------
Net unrealized appreciation $1,451,088
==========
See accompanying notes to financial statements.
- 16 -
<PAGE>
Schedule of Investments
Griffin Growth & Income Fund
March 31, 1998
[PIE CHART APPEARS HERE]
Consumer Services 14%
Capital Goods 9%
Consumer Non-Durables 8%
Financial Services 16%
Health Care 7%
Energy 9%
Utilities 8%
Technology 10%
Basic Industries 7%
Consumer Non-Durables 4%
Other 8%
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 (94.3%):
Basic Industries (7.2%):
Akzo Nobel N.V. ADR .................................. 16,500 $1,680,938
Bethlehem Steel Corp. (b) ........................... 142,200 1,928,588
British Steel PLC .................................... 65,200 1,581,100
Broken Hill Proprietary Company Limited ADR .......... 75,000 1,551,563
Crown Cork & Seal .................................... 77,700 4,156,950
IMC Global Inc. ...................................... 75,400 2,869,913
Inco Limited ......................................... 64,100 1,197,869
Louisiana Pacific Corp. .............................. 93,800 2,180,850
Phelps Dodge ......................................... 26,100 1,685,081
Reynolds Metals Co ................................... 45,600 2,801,550
Union Carbide ........................................ 63,000 3,157,875
-----------
24,792,275
-----------
Capital Goods (8.6%):
Alcatel Alsthom ADR .................................. 87,600 3,328,800
Case Corporation ..................................... 51,000 3,474,375
Litton Industries Inc. (b) .......................... 43,200 2,492,100
Lockheed Martin Corp. ................................ 30,400 3,420,000
LucasVarity PLC ...................................... 42,100 1,739,256
Northrop Grumman Corporation ......................... 26,900 2,890,069
Raytheon Company, Series A ........................... 30,200 1,717,625
United Technologies .................................. 41,200 3,803,275
WMX Technologies ..................................... 222,400 6,852,700
-----------
29,718,200
-----------
Consumer/ Durable (4.1%):
General Motors Corporation ........................... 22,000 1,483,625
Lear Corporation (b) ................................ 69,100 3,895,513
Philips Electronics N.V. ADR ......................... 52,500 3,855,469
Whirlpool Corporation ................................ 69,700 4,778,806
-----------
14,013,413
-----------
Consumer/ Non-Durable (7.6%):
Archer Daniels Midland ............................... 156,780 $3,439,361
Harcourt General ..................................... 90,400 5,005,900
Hasbro Inc. .......................................... 48,900 1,726,781
Loews Corp. .......................................... 50,900 5,306,325
Philip Morris Companies Inc. ......................... 107,000 4,460,563
RJR Nabisco Holdings Corp. ........................... 199,800 6,256,238
-----------
26,195,168
-----------
Consumer Services (14.2%):
ACNielsen Corporation (b) ........................... 117,566 3,108,151
American Stores Company .............................. 176,000 4,576,000
Browning-Ferris ...................................... 34,600 1,128,825
Circuit City Stores Inc. ............................. 110,900 4,740,975
Deluxe Corp. ......................................... 69,500 2,289,156
Dun & Bradstreet Corp. ............................... 72,200 2,468,338
Federated Department Stores (b) ..................... 75,400 3,906,663
McDonald's Corp. ..................................... 73,000 4,380,000
Reuters Holdings PLC ADR ............................. 23,053 1,488,359
The Limited .......................................... 113,000 3,241,688
Toys R Us Holdings (b) .............................. 120,900 3,634,556
Tricon Global Restaurants (b) ....................... 166,000 4,990,375
Viacom Inc - Class B (b) ............................ 101,500 5,455,625
Woolworth (b) ....................................... 148,500 3,712,500
-----------
49,121,210
-----------
Energy (9.2%):
British Petroleum ADR ................................ 18,000 1,549,125
Burlington Resources ................................. 75,800 3,633,663
ELF Aquitaine ADR .................................... 56,900 3,684,275
Exxon Corp. .......................................... 23,800 1,609,475
Mobil Corp. .......................................... 86,800 6,651,050
Oryx Energy (b) ..................................... 65,000 1,690,000
Phillips Petroleum ................................... 96,800 4,833,950
Tosco Corp. .......................................... 108,500 3,824,625
Unocal Corp. ......................................... 106,300 4,112,481
-----------
31,588,644
-----------
Financial Services (16.1%):
Allmerica Financial Corp. ............................ 42,000 2,682,750
BankAmerica Corp. .................................... 45,100 3,726,388
Chase Manhattan ...................................... 26,800 3,614,650
CIGNA Corp. .......................................... 24,200 4,961,000
Corestates Financial Corporation ..................... 18,500 1,660,375
Equitable Companies .................................. 66,600 3,758,738
First Union Corporation .............................. 95,200 5,402,600
General RE Corporation ............................... 14,100 3,110,813
ITT Hartford Group ................................... 16,100 1,746,850
NationsBank Corp. .................................... 87,012 6,346,438
Prudential Reinsurance Holdings ...................... 86,500 3,557,313
Republic New York Corp. .............................. 16,900 2,254,038
SAFECO Corp. ......................................... 70,800 3,869,663
Student Loan Marketing Association ................... 74,150 3,234,794
Washington Mutual Inc. ............................... 78,330 5,617,730
-----------
55,544,136
-----------
</TABLE>
See accompanying notes to financial statements.
- 17 -
<PAGE>
Schedule of Investments
Griffin Growth & Income Fund (Continued)
March 31, 1998
<TABLE>
<CAPTION>
Number of Market
Name of Issuer Shares Value (a)
- -------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Health Care (6.6%):
Aetna Inc. ........................................... 36,200 $3,020,438
Amgen (b) ........................................... 58,900 3,585,538
Columbia/HCA Healthcare .............................. 230,300 7,427,175
Foundation Health Systems (b) ....................... 124,550 3,432,909
Humana (b) .......................................... 60,000 1,488,750
Pharmacia & Upjohn Inc. .............................. 34,000 1,487,500
Tenet Healthcare Inc. (b) ........................... 66,300 2,407,519
-----------
22,849,828
-----------
Technology (9.7%):
Adaptec Incorporated (b) ............................ 90,000 1,766,250
Applied Materials Inc. (b) .......................... 98,100 3,464,156
Compaq Computer Corp. ................................ 136,000 3,519,000
DSC Communications (b) .............................. 86,000 1,564,125
First Data ........................................... 116,000 3,770,000
Intel Corporation .................................... 47,100 3,676,744
International Business Machines Corporation .......... 55,100 5,723,513
Lam Research Corp. (b) .............................. 137,700 3,872,813
National Semiconductor (b) .......................... 164,300 3,440,031
Teradyne (b) ........................................ 64,200 2,572,013
-----------
33,368,644
-----------
Transportation (3.3%):
Burlington Northern Santa Fe ......................... 15,800 1,643,200
Canadian Pacific Limited ORD PAR ..................... 102,700 3,029,650
Union Pacific ........................................ 122,200 6,866,113
-----------
11,538,963
-----------
Utilities (7.7%):
A T & T Corporation .................................. 49,800 3,268,125
Bell Atlantic ........................................ 31,372 3,215,630
CMS Energy Corp. ..................................... 64,600 3,032,163
Duke Power ........................................... 35,900 2,138,294
Edison International ................................. 80,300 2,358,813
GTE Corporation ...................................... 69,300 4,149,338
Illinova Corp. ....................................... 86,100 2,599,144
Pinnacle West Capital Corp. .......................... 60,400 2,684,025
Southern Company ..................................... 109,800 3,040,088
-----------
26,485,618
-----------
Total Common Stocks (cost: $283,783,314) ............................. 325,216,097
-----------
Preferred Stocks (0.7%):
Consumer Services (0.7%):
News Corporation, Ltd. ADR ........................... 107,500 2,472,500
-----------
Total Preferred Stocks (cost: $1,796,772) ............................ 2,472,500
-----------
Short-Term Securities (5.1%):
Repurchase Agreement (5.1%):
State Street Bank & Trust Co. Master
Repurchase Agreement, 4.25%, dated
3/31/98 due 4/1/98, Collateralized by
U.S. Government Securities
(delivery value $17,500,710) ................. $17,498,644 $17,498,644
-----------
Total Short-Term Securities (cost: $17,498,644) ...................... 17,498,644
-----------
Total Investments in Securities
(cost: $303,078,730)(c)(101.7%) .............................. 345,187,242
Other Assets Less Liabilities (-1.7%) ................................ (5,682,877)
-----------
Net Assets (100.0%) .................................................. $339,504,364
===========
</TABLE>
- ----------
Notes to Schedule of Investments
(a) Securites 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:
Gross unrealized appreciation $44,369,163
Gross unrealized depreciation (2,260,651)
----------
Net unrealized appreciation $42,108,512
===========
See accompanying notes to financial statements.
- 18 -
<PAGE>
Schedule of Investments
Griffin Growth Fund
March 31, 1998
[PIE CHART APPEARS HERE]
Business Services 12%
Capital Equipment 4%
Consumer Non-Durables 6%
Financial Services 12%
Health Care 13%
Media & Communications 6%
Resources 6%
Retailing 8%
Technology 26%
Other 7%
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 (12.4%):
AccuStaff Inc. (b) .................................. 8,500 $ 293,250
Air Express International ............................ 10,600 281,563
Apollo Group Incorporated (b) ....................... 6,200 298,375
Atlantic Southeast Airlines .......................... 7,300 268,731
Carnival Corp. ....................................... 6,300 439,425
Catalina Marketing Corp. (b) ........................ 3,600 189,450
Cendant Corporation (b) ............................. 21,191 839,693
Cognizant Corporation ................................ 6,300 361,463
Comair Holdings Inc. ................................. 13,025 345,163
Equifax Inc. ......................................... 8,400 306,600
Equity Corporation International (b) ................ 7,200 172,350
Interim Services Incorporated (b) ................... 8,700 293,625
Interpublic Group of Companies Inc ................... 6,000 372,750
Kansas City Southern Industries Inc. ................. 8,300 365,200
LaSalle Partners Incorporated (b) ................... 9,300 302,250
Manpower Inc. ........................................ 5,400 218,025
Mutual Risk Management LTD ........................... 14,700 497,963
Omnicom Group Incorporated ........................... 6,600 310,613
Paychex Inc. ......................................... 5,900 340,356
Primark Corporation (b) ............................. 7,400 316,350
Quintiles Transnational Corporation (b) ............. 6,600 318,038
Reuters Holdings PLC ADR ............................. 2,686 173,415
Robert Half International Inc (b) ................... 9,350 448,800
Romac International (b) ............................. 13,400 368,500
Security Capital Group, Series B (b) ................ 11,200 344,400
Service Corporation International .................... 7,200 305,550
Superior Services (b) ............................... 9,000 280,688
Sylvan Learning Systems (b) ......................... 4,350 204,994
The Registry Incorporated (b) ....................... 10,320 283,155
The Vincam Group (b) ................................ 9,250 268,250
U.S.A. Waste Services (b) ........................... 11,300 503,556
Wallace Computer Services ............................ 5,700 197,363
Werner Enterprises Inc. .............................. 8,350 212,925
----------
10,722,826
----------
Capital Equipment (3.6%):
Agco Corp. ........................................... 6,900 $ 204,844
Cable Design Technologies (b) ....................... 7,950 239,494
Danaher Corp. ........................................ 5,400 410,063
Donaldson Company, Inc. .............................. 10,200 262,650
IDEX Corporation ..................................... 7,550 274,631
Kennametal Inc. ...................................... 4,900 257,863
Littlelfuse Inc. (b) ................................ 7,000 182,000
MSC Industrial Direct Company ........................ 5,400 292,613
Parker-Hannifin ...................................... 5,950 304,938
Roper Industries ..................................... 7,800 231,563
SPX Corporation ...................................... 4,000 305,250
U.S. Filter Corporation .............................. 4,700 165,088
----------
3,130,994
----------
Consumer Cyclicals (4.3%):
Bed Bath & Beyond (b) ............................... 9,700 448,019
Gulfstream Aerospace Corporation (b) ................ 5,600 242,900
Harley-Davidson Inc. ................................. 7,800 257,400
Lennar Corp. ......................................... 6,400 220,400
Lilly Industries Inc. ................................ 10,300 203,425
LNR Property Corporation ............................. 6,900 184,575
National Health Investors ............................ 4,600 183,425
Oakwood Homes Corp. .................................. 9,700 355,263
Rouse Company ........................................ 6,700 211,050
Security Capital Pacific Trust ....................... 9,500 228,594
Sherwin-Williams Co. ................................. 8,100 287,550
Valspar .............................................. 11,300 443,525
Williams-Sonoma Inc. (b) ............................ 7,000 405,125
----------
3,671,250
----------
Consumer/ Durable (0.2%):
American Standard Companies (b) ..................... 4,300 197,263
----------
Consumer/ Non-Durable (6.2%):
Alberto-Culver Company ............................... 6,200 188,713
Callaway Golf Co ..................................... 3,900 113,100
CVS Corporation ...................................... 4,200 317,100
Goodmark Foods ....................................... 6,600 144,375
Gymboree Corporation (b) ............................ 6,800 175,950
Harcourt General ..................................... 6,000 332,250
International Multifoods Corporation ................. 8,500 254,469
Jones Apparel Group Inc. ............................. 4,600 253,288
Lancaster Colony Inc. ................................ 8,447 358,470
Mattel Inc. .......................................... 7,525 298,178
Nautica Enterprises Inc. (b) ........................ 8,300 255,225
Pioneer Hi-Bred International ........................ 2,600 253,663
Quiksilver Incorporated (b) ......................... 6,000 214,500
Robert Mondavi Corp (b) ............................. 4,700 193,875
Sealed Air Corporation (b) .......................... 4,800 314,400
Sunbeam Oster ........................................ 6,700 295,219
Tootsie Roll Industries Inc. ......................... 5,253 376,574
Unifi Inc. ........................................... 6,500 242,125
Warnaco Group Inc. ................................... 6,100 239,425
Westwood One Inc. (b) ............................... 8,500 263,500
Wolverine World Wide ................................. 9,000 254,250
----------
5,338,647
----------
</TABLE>
See accompanying notes to financial statements.
- 19 -
<PAGE>
Schedule of Investments
Griffin Growth Fund (Continued)
March 31, 1998
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>
Financial Services (11.6%):
ACE Limited .......................................... 12,100 $ 456,019
Ambac Financial Group Inc. ........................... 7,200 420,750
Bank of New York Co. Inc. ............................ 7,100 445,969
City National Corp. .................................. 10,100 383,800
Finova Group Inc. .................................... 6,800 400,350
First American Corp., Tennessee ...................... 10,600 519,400
Franklin Resources Inc. .............................. 12,800 678,400
Investment Technology Group (b) ..................... 10,500 343,875
JSB Financial Inc. ................................... 6,400 358,000
Mercantile Bancorporation Inc. ....................... 4,868 266,827
Mercury General Corporation .......................... 6,800 425,425
MGIC Investment Corporation .......................... 6,400 420,400
Northern Trust Corporation ........................... 6,400 478,400
Progressive Corporation .............................. 4,000 538,750
Protective Life Corporation .......................... 5,300 386,900
Raymond James Financial lnc .......................... 9,950 433,447
Schwab (Charles) Corp. ............................... 12,200 463,600
Silicon Valley Bancshares (b) ....................... 7,000 427,438
State Street Boston Corporation ...................... 6,300 428,794
SunAmerica Incorporated .............................. 7,400 354,275
TCF Financial ........................................ 7,500 254,531
UICI (b) ............................................ 6,400 221,200
United Asset Management Corp. ........................ 8,100 220,725
U.S. Bancorp ......................................... 2,700 336,825
Vesta Insurance Group ................................ 5,750 308,344
----------
9,972,443
----------
Health Care (13.0%):
Drugs & Medicine (4.4%):
Agouron Pharmaceuticals Incorporated (b) ............ 5,100 193,163
Amgen (b) ........................................... 4,600 280,025
Biochem Pharma Inc. (b) ............................. 7,000 169,313
Biogen Inc. (b) ..................................... 6,400 308,400
Cardinal Health Inc. ................................. 5,550 489,441
Elan PLC ADR (b) .................................... 5,600 361,900
Gilead Sciences Inc. (b) ............................ 5,800 208,800
Guilford Pharmaceuticals Inc. (b) ................... 5,700 125,400
Human Genome Sciences Inc. (b) ...................... 6,000 238,875
Incyte Pharmaceuticals Incorporated (b) ............. 5,800 271,150
Isis Pharmaceuticals (b) ............................ 5,800 88,450
Life Technologies Inc. ............................... 7,700 296,450
Millennium Pharmaceuticals Inc (b) .................. 14,000 260,750
Protein Design Labs Incorporated (b) ................ 5,700 223,725
Watson Pharmaceuticals Incorporated (b) ............. 8,000 288,000
----------
3,803,841
----------
Health Care/Non-Drug (3.3%):
Arterial Vascular Engineering Inc. (b) .............. 9,600 351,600
Boston Scientific Corporation (b) ................... 4,000 270,000
Guidant Corporation .................................. 8,300 609,013
Henry Schein Incorporated ............................ 6,200 257,300
Medtronic Inc. ....................................... 5,500 285,313
Omnicare Inc. ........................................ 8,000 317,000
Physio-Control International Corp. (b) .............. 9,900 173,250
Sola International Inc. (b) ......................... 5,700 236,194
Teleflex Inc. ........................................ 8,400 352,800
----------
2,852,469
----------
Hmo/Hospital Management (5.3%):
Concentra Managed Care Incorporated (b) ............. 9,500 $ 292,125
Genesis Health Ventures (b) ......................... 6,100 171,563
Health Management Association CL A (b) .............. 14,862 425,425
Healthcare & Retirement Corp. (b) ................... 7,950 341,353
HealthSouth Corp. (b) ............................... 13,300 373,231
Lincare Holdings Incorporated (b) ................... 4,700 331,938
Orthodontic Centers of America Inc (b) .............. 10,500 227,719
PacifiCare Health Systems (b) ....................... 2,100 158,025
PhyCor Inc. (b) ..................................... 8,600 194,038
Quorum Health Group Incorporated (b) ................ 10,650 358,106
Tenet Healthcare Corp. (b) .......................... 8,415 305,570
Total Renal Care Holdings Incorporated (b) .......... 17,279 575,607
United HealthCare Corp. .............................. 5,600 362,600
Universal Health Services (b) ....................... 7,300 421,575
----------
4,538,883
----------
Total Health Care ............................................ 11,195,193
----------
Media & Communications (6.3%):
360 Communications Company (b) ...................... 9,000 281,250
Belo (A.H.) Corp. .................................... 5,600 308,000
Carmike Cinemas Inc. (b) ............................ 6,000 192,750
Centennial Cellular Corp. (b) ....................... 5,100 134,034
Central Newspaper Inc. ............................... 3,600 255,825
Chancellor Media Corporation (b) .................... 8,200 376,175
Clear Channel Communications Inc. (b) ............... 8,300 813,400
Cox Communications (b) .............................. 8,800 369,600
Emmis Broadcasting Corp. (b) ........................ 5,400 284,850
Jacor Communications Inc. (b) ....................... 7,600 448,400
Meredith Corporation ................................. 6,500 273,813
Outdoor Systems ...................................... 16,900 592,556
U.S. Cellular Corp. (b) ............................. 3,900 132,356
Valassis Communications (b) ......................... 7,700 315,700
Vodafone Group PLC ADR ............................... 6,100 633,638
----------
5,412,347
----------
Resources (5.9%):
AES Corp. (b) ....................................... 10,400 545,350
Airgas Inc. (b) ..................................... 12,600 217,350
Apache Corp. ......................................... 5,800 213,150
B J Services Co. (b) ................................ 6,800 247,775
Barrett Resources Corporation Inc. (b) .............. 4,900 171,194
Camco International Inc. ............................. 4,400 266,200
Devon Energy Corporation ............................. 6,600 256,575
Ecolab ............................................... 11,400 330,600
Noble Affiliates ..................................... 5,700 237,263
Noble Drilling Corporation ........................... 9,000 275,063
Nuevo Energy Co. (b) ................................ 3,600 128,925
Ocean Energy Incorporated (b) ....................... 6,500 153,156
Pride International Inc. (b) ........................ 11,000 262,625
Sigma-Aldrich Corporation ............................ 10,000 372,500
Smith International (b) ............................. 5,700 313,856
Sybron International Corp. (b) ...................... 14,200 370,975
Tosco Corp. .......................................... 10,600 373,650
Waters Corporation (b) .............................. 7,000 349,563
----------
5,085,769
----------
</TABLE>
See accompanying notes to financial statements.
- 20 -
<PAGE>
Schedule of Investments
Griffin Growth Fund (Continued)
March 31, 1998
<TABLE>
<CAPTION>
Number of Market
Name of Issuer Shares Value (a)
- -------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Retailing (7.9%):
Autozone Inc. (b) ................................... 8,600 $ 291,325
Borders Group Incorporated (b) ...................... 10,600 361,063
CDW Computer Centers Inc. ............................ 3,000 179,625
Circuit City Stores Inc. ............................. 6,700 286,425
CompUSA Inc. (b) .................................... 8,900 231,400
Consolidated Stores (b) ............................. 7,600 326,325
Dollar General Corp. ................................. 20,391 788,877
Fred Meyer Incorporated (b) ......................... 7,030 324,698
Host Marriott (b) ................................... 10,800 204,525
Land's End Inc. (b) ................................. 10,000 368,750
Mirage Resorts (b) .................................. 8,200 199,363
OfficeMax Incorporated (b) .......................... 14,300 255,613
Outback Steakhouse Inc. (b) ......................... 6,800 266,050
Richfood Holdings .................................... 8,600 275,200
Safeway Inc. (b) .................................... 12,400 458,025
Sbarro Inc. .......................................... 6,900 203,550
Starbucks Corp. (b) ................................. 5,200 235,625
The Men's Wearhouse Inc. (b) ........................ 9,100 336,700
Tiffany & Company .................................... 7,100 345,681
TJX Companies ........................................ 8,300 375,575
Viking Office Products (b) .......................... 8,200 190,650
Zale Corp. (b) ...................................... 9,500 274,313
----------
6,779,356
----------
Technology (25.9%):
Communications Equipment (2.3%):
Aspect Telecommunications Corp. (b) ................. 8,500 227,906
Coherent Communications Systems Corp. (b) ........... 8,300 382,838
Comverse Technology Incorporated (b) ................ 6,300 307,913
DSP Communications Incorporated (b) ................. 8,200 139,913
Ericsson L.M. Telephone Co. ADR ...................... 5,600 266,350
Powertel Incorporated (b) ........................... 11,200 241,850
WorldCom Incorporated (b) ........................... 8,700 374,644
----------
1,941,413
----------
Computer Communications (1.0%):
Cisco Systems Inc. (b) .............................. 6,400 437,600
Intermedia Communications (b) ....................... 4,900 390,163
----------
827,763
----------
Computer/Electronic Equipment (3.0%):
Coherent Inc. (b) ................................... 8,200 198,338
Dionex Corporation (b) .............................. 4,220 235,265
KLA Tencor Corp.,. (b) .............................. 3,300 126,225
Sanmina Corporation (b) ............................. 4,000 279,750
Security Dynamics Technologies Inc. (b) ............. 7,400 304,325
Symbol Technologies .................................. 9,300 457,444
Tellabs (b) ......................................... 8,900 579,413
Teradyne Inc. (b) ................................... 4,600 184,288
Thermo Electron Corporation .......................... 5,650 228,119
----------
2,611,165
----------
Computer Services (4.1%):
ABR Information Services Incorporated (b) ........... 7,800 $ 219,375
Affiliated Computer Services (b) .................... 9,200 305,325
America Online Delaware Inc. (b) .................... 6,600 450,863
Cambridge Technology Partners ........................ 7,900 391,544
DST Systems Incorporated (b) ........................ 5,800 304,863
HBO & Co. ............................................ 10,800 652,050
Saville Systems Ireland PLC .......................... 11,200 574,000
Shared Medical Systems Corp .......................... 5,000 391,875
SunGard Data Systems Incorporated (b) ............... 7,500 276,094
----------
3,565,988
----------
Computer Software (8.2%):
Adobe Systems Inc. ................................... 5,800 262,088
Baan Company (b) .................................... 6,000 287,250
BMC Software Inc. (b) ............................... 7,900 662,119
Cadence Design Systems (b) .......................... 15,600 540,150
CBT Group PLC ADR (b) ............................... 6,600 341,550
Citrix Systems (b) .................................. 7,200 390,150
Compuware Corp. (b) ................................. 13,500 666,563
Electronic Arts (b) ................................. 8,000 375,500
IDX Systems Corporation (b) ......................... 5,900 256,650
Intuit (b) .......................................... 5,600 270,900
Network Associates Incorporated (b) ................. 8,858 586,843
Oracle Corp. (b) .................................... 9,750 307,734
Parametric Technology Corp. (b) ..................... 10,200 339,788
People Soft Inc. (b) ................................ 11,400 600,638
Sterling Commerce Inc. (b) .......................... 9,000 417,375
Symantec Corp. (b) .................................. 10,300 277,456
Synopsys Inc. (b) ................................... 4,800 157,200
Visio Corporation (b) ............................... 8,000 344,000
----------
7,083,952
----------
Electronics (5.2%):
Altera Corporation (b) .............................. 9,100 343,525
Analog Devices (b) .................................. 10,800 359,100
ASM Lithography Holding N.V. (b) .................... 2,800 258,825
Gateway 2000 Incorporated (b) ....................... 7,000 328,563
Hubbell Incorporated, Series B ....................... 6,200 312,325
Linear Technology Corp. .............................. 7,700 531,300
Maxim Integrated Products Inc. (b) .................. 16,400 597,575
Microchip Technology Inc. (b) ....................... 5,400 113,400
Molex Inc CL A ....................................... 9,726 260,778
Raychem Corp. ........................................ 6,800 282,625
SCI Systems Inc. (b) ................................ 7,900 281,438
SDL Incorporated (b) ................................ 7,100 168,625
Tyco International ................................... 7,200 393,300
Xilinx Inc. (b) ..................................... 6,000 224,625
----------
4,456,003
----------
</TABLE>
See accompanying notes to financial statements.
- 21 -
<PAGE>
Schedule of Investments
Griffin Growth Fund (Continued)
March 31, 1998
<TABLE>
<CAPTION>
Number of Market
Name of Issuer Shares Value (a)
- -------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
<S> <C> <C>
Other Technology (2.1%):
BE Aerospace (b) .................................... 7,500 $ 210,938
Cognex Corp. (b) .................................... 6,000 128,250
Diebold Incorporated ................................. 6,000 264,000
EMC Corp-Mass (b) ................................... 12,000 453,750
Ikon Office Solutions Inc. ........................... 7,600 262,675
Sun Microsystems Inc. (b) ........................... 12,200 508,969
----------
1,828,581
----------
Total Technology ............................................. 22,314,865
----------
Total Common Stocks (cost: $58,754,053) .............................. 83,820,940
----------
<CAPTION>
Short-Term Securities (2.8%):
Repurchase Agreement (2.8%):
State Street Bank & Trust Co. Master
Repurchase Agreement, 4.25%, dated
3/31/98 due 4/1/98, Collateralized by
U.S. Government Securities
(delivery value $2,413,853) .................. $2,413,569 $2,413,569
----------
Total Short-Term Securities (cost: $2,413,569) ....................... 2,413,569
----------
Total Investments in Securities
(cost: $61,167,622)(c)(100.9%) ............................... 86,234,509
Other Assets Less Liabilities (-0.9%) ................................ (765,764)
----------
Net Assets (100.0%) .................................................. $85,468,745
==========
</TABLE>
- ----------
Notes to Schedule of Investments
(a) Securites 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:
Gross unrealized appreciation $25,434,155
Gross unrealized depreciation (367,268)
----------
Net unrealized appreciation $25,066,887
==========
See accompanying notes to financial statements.
- 22 -
<PAGE>
Statements of Assets and Liabilities
March 31, 1998
<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) ....................................... $232,309,020 $26,177,188 $67,509,456
Cash ............................................................................... 40 1,035 735,098
Receivables:
Dividends and Interest ......................................................... 1,008,852 241,725 1,279,618
Fund shares sold ............................................................... 4,814,409 588,151 5,571,583
Investment securities sold ..................................................... 0 0 0
Other receivables .............................................................. 0 0 841
Organization expenses, net of amortization (note 1) ................................ 9,427 9,427 11,230
------------ ------------ ------------
Total assets .......................................... 238,141,748 27,017,526 75,107,826
------------ ------------ ------------
Liabilities
Distributions to shareholders ...................................................... 966,517 58,050 302,578
Fund shares redeemed ............................................................... 3,872,402 502,197 196,517
Payable for securities purchased ................................................... 0 0 0
Payable for advisory fees .......................................................... 39,425 0 0
Payable for distribution fees ...................................................... 38,398 2,646 12,013
Payable for administration fees .................................................... 38,398 4,124 11,074
Other accrued expenses ............................................................. 92,959 17,483 51,389
Total liabilities .......................................... 5,048,099 584,500 573,571
------------ ------------ ------------
Net Assets .......................................... $233,093,649 $26,433,026 $74,534,255
============ ============ ============
Net assets consist of:
Capital stock, Class A or single class ......................................... 233,083 26,438 7,353
Capital stock, Class B ......................................................... N/A N/A 15
Additional paid in capital, Class A or single class ............................ 232,850,389 26,411,280 74,003,649
Additional paid in capital, Class B ............................................ N/A N/A 151,892
Undistributed net investment income ............................................ 10,372 0 0
Accumulated net realized gain (loss) on investments and
futures contracts ............................................................ (195) (4,692) 31,955
Net unrealized appreciation on investments
and futures contracts ........................................................ 0 0 403,301
------------ ------------ ------------
Net Assets .......................................... $233,093,649 $26,433,026 $74,534,255
============ ============ ============
Computation of net asset value and offering price (note 4):
Net assets, Class A or single class ............................................ $233,093,649 $26,433,026 $74,379,556
Shares outstanding, Class A or single class .................................... 233,083,472 26,437,718 7,352,777
Net asset value, Class A or single class ....................................... $1.00 $1.00 $10.12
Maximum offering price, Class A or single class ................................ $1.00 $1.00 $10.49
Net assets, Class B ............................................................ N/A N/A $154,699
Shares outstanding, Class B .................................................... N/A N/A 15,305
Net asset value and offering price, Class B N/A ................................ N/A N/A $10.11
* Investments in securities, at identified cost $232,309,020 $26,177,188 $67,106,155
</TABLE>
See accompanying notes to financial statements.
- 23 -
<PAGE>
Statements of Assets and Liabilities
March 31, 1998
<TABLE>
<CAPTION>
U.S. Municipal
Government Bond Bond
Income Fund Fund Fund
----------- ---- ----
<S> <C> <C> <C>
Assets
Investments:
In securities, at market value* (note 1) ........................................ $115,259,942 $73,012,965 $14,421,953
Cash ................................................................................ 717,461 1,424,000 0
Receivables:
Dividends and Interest .......................................................... 732,846 1,170,202 159,897
Fund shares sold ................................................................ 3,825,350 4,209,652 553,094
Investment securities sold ...................................................... 0 2,832,090 0
Other receivables ............................................................... 0 335 4,538
Organization expenses, net of amortization (note 1) ................................. 9,427 9,427 9,427
------------ ------------ ------------
Total assets ........................................... 120,545,026 82,658,671 15,148,909
------------ ------------ ------------
Liabilities
Distributions to shareholders ....................................................... 479,202 344,875 45,896
Fund shares redeemed ................................................................ 440,872 335,970 96,743
Payable for securities purchased .................................................... 17,179,257 3,450,998 526,320
Payable for advisory fees ........................................................... 8,773 0 0
Payable for distribution fees ....................................................... 22,521 15,322 299
Payable for administration fees ..................................................... 15,951 11,956 132
Other accrued expenses .............................................................. 70,892 57,744 7,946
Total liabilities ........................................... 18,217,468 4,216,865 677,336
------------ ------------ ------------
Net Assets ........................................... $102,327,558 $78,441,806 $14,471,573
============ ============ ============
Net assets consist of:
Capital stock, Class A or single class .......................................... 10,513 8,577 1,486
Capital stock, Class B .......................................................... 457 76 52
Additional paid in capital, Class A or single class ............................. 96,321,521 76,516,054 13,614,934
Additional paid in capital, Class B ............................................. 4,226,461 680,435 473,170
Undistributed net investment income ............................................. 4,740 330 343
Accumulated net realized gain (loss) on investments and
futures contracts ............................................................. (25,300) 429,872 (105,164)
Net unrealized appreciation on investments
and futures contracts ......................................................... 1,789,166 806,462 486,752
------------ ------------ ------------
Net Assets ........................................... $102,327,558 $78,441,806 $14,471,573
============ ============ ============
Computation of net asset value and offering price (note 4):
Net assets, Class A or single class ............................................. $98,059,321 $77,753,751 $13,981,951
Shares outstanding, Class A or single class ..................................... 10,512,999 8,577,109 1,486,243
Net asset value, Class A or single class ........................................ $9.33 $9.07 $9.41
Maximum offering price, Class A or single class ................................. $9.77 $9.50 $9.85
Net assets, Class B ............................................................. $4,268,237 $688,055 $489,622
Shares outstanding, Class B ..................................................... 457,236 75,957 52,034
Net asset value and offering price, Class B ..................................... $9.33 $9.06 $9.41
* Investments in securities, at identified cost $113,470,776 $72,206,503 $13,935,201
<CAPTION>
California Growth &
Tax-Free Income Growth
Fund Fund Fund
<S> <C> <C> <C>
Assets
Investments:
In securities, at market value* (note 1) ........................................ $ 39,149,048 $345,187,242 $ 86,234,509
Cash ................................................................................ 74,196 104,544 0
Receivables:
Dividends and Interest .......................................................... 494,964 472,723 31,716
Fund shares sold ................................................................ 753,429 3,434,836 945,195
Investment securities sold ...................................................... 0 978,840 1,766,916
Other receivables ............................................................... 2,764 23,672 2,644
Organization expenses, net of amortization (note 1) ................................. 9,427 9,427 11,230
------------ ------------ ------------
Total assets ........................................... 40,483,828 350,211,284 88,992,210
------------ ------------ ------------
Liabilities
Distributions to shareholders ....................................................... 129,379 8,242 (4)
Fund shares redeemed ................................................................ 109,715 7,246,792 3,415,157
Payable for securities purchased .................................................... 1,233,961 3,120,291 0
Payable for advisory fees ........................................................... 0 69,655 19,199
Payable for distribution fees ....................................................... 11,296 97,981 20,532
Payable for administration fees ..................................................... 6,070 54,080 13,715
Other accrued expenses .............................................................. 12,744 109,879 54,866
Total liabilities ........................................... 1,503,165 10,706,920 3,523,465
------------ ------------ ------------
Net Assets ........................................... $ 38,980,663 $339,504,364 $ 85,468,745
============ ============ ============
Net assets consist of:
Capital stock, Class A or single class .......................................... 3,919 14,319 4,323
Capital stock, Class B .......................................................... 748 2,576 320
Additional paid in capital, Class A or single class ............................. 31,611,583 234,246,985 59,538,969
Additional paid in capital, Class B ............................................. 6,024,444 43,940,807 4,442,444
Undistributed net investment income ............................................. 2,816 3,359 (161,022)
Accumulated net realized gain (loss) on investments and
futures contracts ............................................................. (113,935) 19,187,806 (3,423,176)
Net unrealized appreciation on investments
and futures contracts ......................................................... 1,451,088 42,108,512 25,066,887
------------ ------------ ------------
Net Assets ........................................... $ 38,980,663 $339,504,364 $ 85,468,745
============ ============ ============
Computation of net asset value and offering price (note 4):
Net assets, Class A or single class ............................................. $ 32,732,066 $287,866,097 $ 79,640,041
Shares outstanding, Class A or single class ..................................... 3,918,571 14,318,559 4,322,659
Net asset value, Class A or single class ........................................ $8.35 $20.10 $18.42
Maximum offering price, Class A or single class ................................. $8.74 $21.05 $19.29
Net assets, Class B ............................................................. $6,248,597 $51,638,267 $5,828,704
Shares outstanding, Class B ..................................................... 747,834 2,576,111 320,480
Net asset value and offering price, Class B ..................................... $8.36 $20.05 $18.19
* Investments in securities, at identified cost ..................................... $ 37,697,959 $303,078,729 $ 61,167,621
</TABLE>
See accompanying notes to financial statements.
- 24 -
<PAGE>
Statements of Operations
For the six month period ended March 31, 1998
<TABLE>
<CAPTION>
Money Tax-Free Short-Term
Market Money Bond
Fund Market Fund Fund
------------- -------------- ------------
<S> <C> <C> <C>
Investment income:
Interest .................................................... $ 6,498,903 $ 358,860 $ 1,812,260
Dividends (net of foreign withholding taxes of $11,942 and
$462 for the Growth & Income Fund
and Growth Fund, respectively) ............................ 0 0 0
----------- ----------- -----------
Total income ......................................... 6,498,903 358,860 1,812,260
----------- ----------- -----------
Expenses:
Advisory fees (note 2) ...................................... 576,694 49,465 148,747
Administration and accounting fees (note 2) ................. 230,678 19,786 59,498
Distribution fees (note 2) .................................. 230,678 19,786 74,973
Amortization of organization expenses ....................... 8,530 8,530 2,544
Legal and audit fees ........................................ 26,418 7,384 10,925
Registration fees ........................................... 15,861 2,385 7,010
Directors' fees ............................................. 3,984 3,984 3,984
Shareholder reports ......................................... 16,173 967 10,151
Insurance expense ........................................... 5,235 393 1,034
Custodian fees .............................................. 6,269 7,390 7,362
Printing and postage ........................................ 56,620 7,837 28,065
----------- ----------- -----------
Total expenses ....................................... 1,177,140 127,907 354,293
----------- ----------- -----------
Less:
Waived fees (note 2) ........................................ (339,880) (57,628) (160,051)
Expense reductions (note 5) ................................. (5) (622) (219)
----------- ----------- -----------
Net expenses ......................................... 837,255 69,657 194,023
----------- ----------- -----------
Net investment income (loss) ......................... 5,661,648 289,203 1,618,237
----------- ----------- -----------
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) on sale of investments ............. (195) 0 6,351
Net realized gain on sale of futures contracts .............. 0 0 0
Net change in unrealized appreciation of investments ........ 0 0 114,434
----------- ----------- -----------
Net realized and unrealized gain (loss) on investments (195) 0 120,785
----------- ----------- -----------
Net increase in net assets resulting from operations . $ 5,661,453 $ 289,203 $ 1,739,022
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
- 25 -
<PAGE>
Statements of Operations
For the six month period ended March 31, 1998
<TABLE>
<CAPTION>
U.S. Municipal
Government Bond Bond
Income Fund Fund Fund
------------- ------------ -------------
<S> <C> <C> <C>
Investment income:
Interest .................................................... $ 3,010,841 $ 2,135,601 $ 276,291
Dividends (net of foreign withholding taxes of $11,942 and
$462 for the Growth & Income Fund
and Growth Fund, respectively) ............................ 0 0 0
----------- ----------- -----------
Total income ......................................... 3,010,841 2,135,601 276,291
----------- ----------- -----------
Expenses:
Advisory fees (note 2) ...................................... 225,010 164,389 28,390
Administration and accounting fees (note 2) ................. 90,004 65,756 11,356
Distribution fees (note 2) .................................. 127,947 84,128 15,861
Amortization of organization expenses ....................... 8,530 8,530 8,530
Legal and audit fees ........................................ 13,595 11,517 7,089
Registration fees ........................................... 8,351 7,654 2,509
Directors' fees ............................................. 3,984 3,984 3,984
Shareholder reports ......................................... 10,903 10,068 803
Insurance expense ........................................... 1,791 1,233 219
Custodian fees .............................................. 7,996 13,186 5,010
Printing and postage ........................................ 34,378 28,819 3,860
----------- ----------- -----------
Total expenses ....................................... 532,489 399,246 87,611
----------- ----------- -----------
Less:
Waived fees (note 2) ........................................ (185,524) (167,202) (48,774)
Expense reductions (note 5) ................................. (1,116) (316) (39)
----------- ----------- -----------
Net expenses ......................................... 345,849 231,728 38,798
----------- ----------- -----------
Net investment income (loss) ......................... 2,664,992 1,903,873 237,493
----------- ----------- -----------
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) on sale of investments ............. 283,444 621,384 5,018
Net realized gain on sale of futures contracts .............. 0 0 16,778
Net change in unrealized appreciation of investments ........ 948,987 138,423 104,565
----------- ----------- -----------
Net realized and unrealized gain (loss) on investments 1,232,431 759,807 126,361
----------- ----------- -----------
Net increase in net assets resulting from operations . $ 3,897,423 $ 2,663,680 $ 363,854
=========== =========== ===========
<CAPTION>
California Growth &
Tax-Free Income Growth
Fund Fund Fund
------------- ------------- --------------
<S> <C> <C> <C>
Investment income:
Interest .................................................... $ 835,849 $ 294,926 $ 28,454
Dividends (net of foreign withholding taxes of $11,942 and
$462 for the Growth & Income Fund
and Growth Fund, respectively) ............................ 0 2,458,167 174,491
------------ ------------ ------------
Total income ......................................... 835,849 2,753,093 202,945
------------ ------------ ------------
Expenses:
Advisory fees (note 2) ...................................... 84,393 859,467 212,126
Administration and accounting fees (note 2) ................. 33,757 286,489 70,709
Distribution fees (note 2) .................................. 61,816 515,808 105,532
Amortization of organization expenses ....................... 8,530 8,530 2,544
Legal and audit fees ........................................ 8,721 31,765 13,749
Registration fees ........................................... 1,692 23,712 7,164
Directors' fees ............................................. 3,984 3,984 3,984
Shareholder reports ......................................... 1,290 20,095 12,968
Insurance expense ........................................... 718 5,920 1,376
Custodian fees .............................................. 4,438 12,213 7,754
Printing and postage ........................................ 6,926 56,222 37,944
------------ ------------ ------------
Total expenses ....................................... 216,265 1,824,205 475,850
------------ ------------ ------------
Less:
Waived fees (note 2) ........................................ (85,873) (490,712) (111,768)
Expense reductions (note 5) ................................. (1,188) (680) (115)
------------ ------------ ------------
Net expenses ......................................... 129,204 1,332,813 363,967
----------- ----------- -----------
Net investment income (loss) ......................... 706,645 1,420,280 (161,022)
------------ ------------ ------------
Realized and unrealized gain (loss) on investments:
Net realized gain (loss) on sale of investments ............. 66,027 22,560,469 (2,087,422)
Net realized gain on sale of futures contracts .............. 45,803 0 0
Net change in unrealized appreciation of investments ........ 242,772 5,312,211 10,132,769
------------ ------------ ------------
Net realized and unrealized gain (loss) on investments 354,602 27,872,680 8,045,347
------------ ------------ ------------
Net increase in net assets resulting from operations . $ 1,061,247 $ 29,292,960 $ 7,884,325
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
- 26 -
<PAGE>
Statements of Changes in Net Assets
For the periods ended March 31, 1998 and September 30, 1997
<TABLE>
<CAPTION>
Tax-Free
Money Market Fund Money Market Fund
================================== ============================
Six Months Year Six Months Year
Ended Ended Ended Ended
3/31/98 9/30/97 3/31/98 9/30/97
-------------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income (loss) ........... $ 5,661,648 $ 10,224,848 $ 289,203 $ 406,673
Net realized gain (loss)
on sale of investments ............... (195) (45) 0 0
Net change in unrealized appreciation
of investments ....................... 0 0 0 0
Net increase in net
assets resulting from operations 5,661,453 10,224,803 289,203 406,673
------------- ------------- ------------- -------------
Distributions to shareholders:
From net investment income
Class A ................................ (5,668,443) (10,224,848) (289,203) (406,673)
Class B ................................ N/A N/A N/A N/A
From realized gain on investments
Class A ................................ 0 0 0 0
Class B ................................ N/A N/A N/A N/A
------------- ------------- ------------- -------------
Total distributions .............. (5,668,443) (10,224,848) (289,203) (406,673)
------------- ------------- ------------- -------------
Net increase in net assets resulting
from capital share transactions (note 4) ..... 3,326,539 45,126,014 10,271,969 4,509,493
------------- ------------- ------------- -------------
Increase in net assets ........... 3,319,549 45,125,969 10,271,969 4,509,493
------------- ------------- ------------- -------------
Net assets:
Beginning net assets ....................... 229,774,100 184,648,131 16,161,057 11,651,564
------------- ------------- ------------- -------------
Ending net assets* ......................... $ 233,093,649 $ 229,774,100 $ 26,433,026 $ 16,161,057
============= ============= ============= =============
*Includes undistributed (over
distributed) net investment income ......... $ 10,372 $ 17,212 $ 0 ($ 29)
<CAPTION>
Short-Term U.S. Government
Bond Fund Income Fund
=============================== ============================
Six Months Year Six Months Year
Ended Ended Ended Ended
3/31/98 9/30/97 3/31/98 9/30/97
-------------- --------------- -------------- -----------
<S> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income (loss) ........... $ 1,618,237 $ 1,800,936 $ 2,664,992 $ 3,808,711
Net realized gain (loss)
on sale of investments ............... 6,351 7,108 283,444 353,405
Net change in unrealized appreciation
of investments ....................... 114,434 370,620 948,987 1,035,109
Net increase in net
assets resulting from operations 1,739,022 2,178,664 3,897,423 5,197,225
------------- ------------- ------------- -------------
Distributions to shareholders:
From net investment income
Class A ................................ (1,614,813) (1,790,243) (2,559,926) (3,597,983)
Class B ................................ (3,804) (10,694) (106,611) (210,727)
From realized gain on investments
Class A ................................ 0 0 0 0
Class B ................................ 0 0 0 0
------------- ------------- ------------- -------------
Total distributions .............. (1,618,618) (1,800,937) (2,666,537) (3,808,710)
------------- ------------- ------------- -------------
Net increase in net assets resulting
from capital share transactions (note 4) ..... 24,085,693 30,254,083 20,546,255 32,005,347
------------- ------------- ------------- -------------
Increase in net assets ........... 24,206,097 30,631,810 21,777,141 33,393,862
------------- ------------- ------------- -------------
Net assets:
Beginning net assets ....................... 50,328,158 19,696,347 80,550,417 47,156,555
------------- ------------- ------------- -------------
Ending net assets* ......................... $ 74,534,255 $ 50,328,158 $ 102,327,558 $ 80,550,417
============= ============= ============= =============
*Includes undistributed (over
distributed) net investment income ......... $ 0 $ 0 $ 4,740 $ 7,584
</TABLE>
See accompanying notes to financial statements.
- 27 -
<PAGE>
Statements of Changes in Net Assets
For the periods ended March 31, 1998 and September 30, 1997
<TABLE>
<CAPTION>
Bond Fund Municipal Bond Fund
============================== =============================
Six Months Year Six Months Year
Ended Ended Ended Ended
3/31/98 9/30/97 3/31/98 9/30/97
------------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income (loss) ........... $ 1,903,873 $ 2,450,188 $ 237,493 $ 355,037
Net realized gain (loss)
on sale of investments ............... 621,384 270,780 21,796 7,016
Net change in unrealized appreciation
of investments ....................... 138,423 908,922 104,565 296,920
Net increase in net
assets resulting from operations 2,663,680 3,629,890 363,854 658,973
------------ ------------ ------------ ------------
Distributions to shareholders:
From net investment income
Class A ................................ (1,892,362) (2,426,201) (229,895) (338,814)
Class B ................................ (12,826) (23,987) (7,823) (16,223)
From realized gain on investments
Class A ................................ 0 0 0 0
Class B ................................ 0 0 0 0
------------ ------------ ------------ ------------
Total distributions .............. (1,905,188) (2,450,188) (237,718) (355,037)
------------ ------------ ------------ ------------
Net increase in net assets resulting
from capital share transactions (note 4) ..... 20,327,449 28,002,390 4,302,278 2,774,237
------------ ------------ ------------ ------------
Increase in net assets ........... 21,085,941 29,182,093 4,428,414 3,078,173
------------ ------------ ------------ ------------
Net assets:
Beginning net assets ....................... 57,355,865 28,173,772 10,043,159 6,964,986
------------ ------------ ------------ ------------
Ending net assets* ......................... $ 78,441,806 $ 57,355,865 $ 14,471,573 $ 10,043,159
============ ============ ============ ============
*Includes undistributed (over
distributed) net investment income ......... $ 330 $ 1,645 $ 343 $ 568
<CAPTION>
California
Tax-Free Fund Growth & Income Fund
============================= =================================
Six Months Year Six Months Year
Ended Ended Ended Ended
3/31/98 9/30/97 3/31/98 9/30/97
-------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C>
Increase in net assets:
Operations:
Net investment income (loss) ........... $ 706,645 $ 1,222,451 $ 1,420,280 $ 1,954,542
Net realized gain (loss)
on sale of investments ............... 111,830 208,734 22,560,469 31,497,187
Net change in unrealized appreciation
of investments ....................... 242,772 893,497 5,312,211 27,136,675
Net increase in net
assets resulting from operations 1,061,247 2,324,682 29,292,960 60,588,404
------------- ------------- ------------- -------------
Distributions to shareholders:
From net investment income
Class A ................................ (616,088) (1,057,532) (1,341,902) (1,816,999)
Class B ................................ (92,403) (164,919) (80,243) (162,598)
From realized gain on investments
Class A ................................ 0 0 (28,149,543) (8,171,142)
Class B ................................ 0 0 (4,813,177) (1,266,700)
------------- ------------- ------------- -------------
Total distributions .............. (708,491) (1,222,451) (34,384,865) (11,417,439)
------------- ------------- ------------- -------------
Net increase in net assets resulting
from capital share transactions (note 4) ..... 7,806,811 5,683,503 82,003,170 94,278,663
------------- ------------- ------------- -------------
Increase in net assets ........... 8,159,567 6,785,734 76,911,265 143,449,628
------------- ------------- ------------- -------------
Net assets:
Beginning net assets ....................... 30,821,096 24,035,362 262,593,099 119,143,471
------------- ------------- ------------- -------------
Ending net assets* ......................... $ 38,980,663 $ 30,821,096 $ 339,504,364 $ 262,593,099
============= ============= ============= =============
*Includes undistributed (over
distributed) net investment income ......... $ 2,816 $ 4,661 $ 3,359 $ 5,222
<CAPTION>
Growth Fund
==============================
Six Months Year
Ended Ended
3/31/98 9/30/97
-------------- -------------
<S> <C> <C>
Increase in net assets:
Operations:
Net investment income (loss) ........... ($ 161,022) ($ 161,042)
Net realized gain (loss)
on sale of investments ............... (2,087,422) (1,043,448)
Net change in unrealized appreciation
of investments ....................... 10,132,769 11,832,565
Net increase in net
assets resulting from operations 7,884,325 10,628,075
------------ ------------
Distributions to shareholders:
From net investment income
Class A ................................ 0 0
Class B ................................ 0 0
From realized gain on investments
Class A ................................ 0 0
Class B ................................ 0 0
------------ ------------
Total distributions .............. 0 0
------------ ------------
Net increase in net assets resulting
from capital share transactions (note 4) ..... 15,272,896 28,485,914
------------ ------------
Increase in net assets ........... 23,157,221 39,113,989
------------ ------------
Net assets:
Beginning net assets ....................... 62,311,524 23,197,535
------------ ------------
Ending net assets* ......................... $ 85,468,745 $ 62,311,524
============ ============
*Includes undistributed (over
distributed) net investment income ......... ($ 161,022) $ 0
</TABLE>
See accompanying notes to financial statements.
- 28 -
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Supplemental information for a share outstanding for the Money Market Fund
six month period ended March 31, 1998 or throughout each ----------------------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995 1994(a)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period ................... $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.02 0.05 0.05 0.05 0.03
Net realized and unrealized gain (loss) on investments .. 0.00 0.00 0.00 0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.02 0.05 0.05 0.05 0.03
- --------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.02) (0.05) (0.05) (0.05) (0.03)
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00 0.00
Total distributions .................................. (0.02) (0.05) (0.05) (0.05) (0.03)
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.00 0.00 0.00 0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $1.00 $1.00 $1.00 $1.00 $1.00
====================================================================================================================
Total return (not annualized)(b) ........................ 2.48% 5.12% 5.05% 5.52% 3.36%
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $233,094 $229,774 $184,648 $79,964 $49,988
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 0.73% 0.58% 0.58% 0.42% 0.15%
Ratio of net investment income to average net assets (ii) 5.64% 4.92% 4.92% 5.40% 4.25%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (c) ........... 1.02% 1.02% 1.09% 1.29% 1.64%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (c) .... 2.66% 4.52% 4.41% 4.53% 2.76%
Portfolio Turnover ...................................... N/A N/A N/A N/A N/A
Average Commission Rate Paid ............................ N/A N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
Supplemental information for a share outstanding for the Tax-Free Money Market Fund
six month period ended March 31, 1998 or throughout each ------------------------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995 1994(a)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period ................... $1.00 $1.00 $1.00 $1.00 $1.00
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.01 0.03 0.03 0.03 0.02
Net realized and unrealized gain (loss) on investments .. 0.00 0.00 0.00 0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.01 0.03 0.03 0.03 0.02
- --------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.01) (0.03) (0.03) (0.03) (0.02)
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00 0.00
Total distributions .................................. (0.01) (0.03) (0.03) (0.03) (0.02)
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.00 0.00 0.00 0.00 0.00
- --------------------------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $1.00 $1.00 $1.00 $1.00 $1.00
====================================================================================================================
Total return (not annualized)(b) ........................ 1.47% 3.02% 3.00% 3.44% 2.22%
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $26,433 $16,166 $11,652 $8,621 $10,633
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 0.71% 0.68% 0.62% 0.44% 0.17%
Ratio of net investment income to average net assets (ii) 3.62% 2.98% 2.93% 3.39% 2.56%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (c) ........... 1.29% 1.42% 1.53% 1.90% 2.28%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (c) .... 3.04% 2.24% 2.02% 1.92% 0.45%
Portfolio Turnover ...................................... N/A N/A N/A N/A N/A
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) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charge.
(c) Ratio reflects fees reduced in connection with specific agreements only for
periods ended after September 30, 1995.
See accompanying notes to financial statements.
- 29 -
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Short-Term Bond Fund
Supplemental information for a share outstanding for the Class A
six month period ended March 31, 1998 or throughout each --------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(a)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period ................... $10.09 $9.98 $10.05 $10.00
- -----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.27 0.56 0.54 0.18
Net realized and unrealized gain (loss) on investments .. 0.03 0.11 -0.07 0.05
- -----------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.30 0.67 0.47 0.23
- -----------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.27) (0.56) (0.54) (0.18)
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00
Total distributions .................................. (0.27) (0.56) (0.54) (0.18)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.03 0.11 (0.07) 0.05
- -----------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $10.12 $10.09 $9.98 $10.05
====================================================================================================
Total return (not annualized)(d) ........................ 3.04% 6.86% 4.82% 2.32%
====================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $74,380 $50,153 $19,554 $3,582
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 0.65% 0.56% 0.39% 0.00%
Ratio of net investment income to average net assets (ii) 5.43% 5.55% 5.42% 5.91%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (e) ........... 1.19% 1.33% 1.58% 2.76%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (e) .... 4.89% 4.78% 4.23% 3.15%
Portfolio Turnover ...................................... 5.47% 23.67% 29.37% 1.05%
Average Commission Rate Paid ............................ N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------
<CAPTION>
Short-Term Bond Fund
Supplemental information for a share outstanding for the Class B
six month period ended March 31, 1998 or throughout each --------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(a)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period ................... $10.08 $9.98 $10.05 $10.00
- -----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.24 0.50 0.49 0.20
Net realized and unrealized gain (loss) on investments .. 0.03 0.10 -0.07 0.05
- -----------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.27 0.60 0.42 0.25
- -----------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.24) (0.50) (0.49) (0.20)
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00
Total distributions .................................. (0.24) (0.50) (0.49) (0.20)
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.03 0.10 (0.07) 0.05
- -----------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $10.11 $10.08 $9.98 $10.05
=====================================================================================================
Total return (not annualized)(d) ........................ 2.71% 6.20% 4.29% 2.51
=====================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $155 $175 $143 $13
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 1.31% 1.06% 0.90% 0.00%
Ratio of net investment income to average net assets (ii) ) 4.76% 5.01% 4.81% 5.54%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (e) ........... 1.94% 2.06% 2.29% 3.33%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (e) .... 4.14% 4.01% 3.42% 2.21%
Portfolio Turnover ...................................... 5.47% 23.67% 29.37% 1.05%
Average Commission Rate Paid ............................ N/A N/A N/A N/A
- -----------------------------------------------------------------------------------------------------
<CAPTION>
U.S. Government Income Fund
Supplemental information for a share outstanding for the Class A
six month period ended March 31, 1998 or throughout each --------------------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995 1994(b)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period ................... $9.19 $9.01 $9.24 $8.77 $9.50
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.28 0.57 0.57 0.63 0.56
Net realized and unrealized gain (loss) on investments .. 0.14 0.18 (0.21) 0.47 (0.73)
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.42 0.75 0.36 1.10 (0.17)
- ----------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.28) (0.57) (0.57) (0.63) (0.56)
Distributions from net realized gain (loss) ............. 0.00 0.00 -0.02 0.00 0.00
Total distributions .................................. (0.28) (0.57) (0.57) (0.63) (0.56)
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.14 0.18 (0.23) 0.47 (0.73)
- ----------------------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $9.33 $9.19 $9.01 $9.24 $8.77
================================================================================================================
Total return (not annualized)(d) ........................ 4.57% 8.62% 4.02% 13.00% -1.83%
================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $98,059 $76,605 $43,717 $29,308 $19,158
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 0.74% 0.54% 0.46% 0.21% 0.09%
Ratio of net investment income to average net assets (ii) 5.95% 6.38% 6.23% 6.93% 6.24%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (e) ........... 1.15% 1.22% 1.29% 1.63% 1.83%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (e) .... 5.54% 5.71% 5.41% 5.51% 4.49%
Portfolio Turnover ...................................... 61.37% 303.81% 101.00% 46.96% 28.20%
Average Commission Rate Paid ............................ N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
U.S. Government Income Fund
Supplemental information for a share outstanding for the Class B
six month period ended March 31, 1998 or throughout each --------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(c)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period ................... $9.20 $9.02 $9.25 $8.67
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.24 0.53 0.53 0.52
Net realized and unrealized gain (loss) on investments .. 0.13 0.18 (0.21) 0.58
- ---------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.37 0.71 0.32 1.10
- ---------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.24) (0.53) (0.53) (0.52)
Distributions from net realized gain (loss) ............. 0.00 0.00 (0.02) 0.00
Total distributions .................................. (0.24) (0.53) (0.55) (0.52)
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.13 0.18 (0.23) 0.58
- ---------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $9.33 $9.20 $9.02 $9.25
===================================================================================================
Total return (not annualized)(d) ........................ 4.07% 8.06% 3.51% 13.08%
===================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $4,268 $3,946 $3,439 $1,564
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 1.48% 1.16% 0.96% 0.79%
Ratio of net investment income to average net assets (ii) 5.18% 5.77% 5.67% 5.71%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (e) ........... 2.89% 2.18% 2.02% 3.19%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (e) .... 3.77% 4.74% 4.61% 3.31%
Portfolio Turnover ...................................... 61.37% 303.81% 101.00% 46.96%
Average Commission Rate Paid ............................ N/A N/A N/A N/A
- ---------------------------------------------------------------------------------------------------
</TABLE>
(a) The fund commenced operations on June 12, 1995.
(b) The fund commenced operations on October 19, 1993.
(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) Ratio reflects fees reduced in connection with specific agreements only for
periods ended after September 30, 1995.
See accompanying notes to financial statements.
- 30 -
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Bond Fund
Supplemental information for a share outstanding for the Class A
six month period ended March 31, 1998 or throughout each --------------------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(d) 1994(a)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period ................... $8.95 $8.71 $8.99 $8.47 $9.50
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.26 0.54 0.56 0.58 0.52
Net realized and unrealized gain (loss) on investments .. 0.12 0.24 (0.28) 0.52 (1.03)
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.38 0.78 0.28 1.10 (0.51)
- ----------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.26) (0.54) (0.56) (0.58) (0.52)
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00 0.00
Total distributions .................................. (0.26) (0.54) (0.56) (0.58) (0.52)
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.12 0.24 (0.28) 0.52 (1.03)
- ----------------------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $9.07 $8.95 $8.71 $8.99 $8.47
================================================================================================================
Total return (not annualized)(c) ........................ 4.31% 9.19% 3.12% 13.53% (5.49)%
================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $74,144 $56,923 $27,761 $12,022 $7,539
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 0.70% 0.66% 0.47% 0.21% 0.09%
Ratio of net investment income to average net assets (ii) 6.04% 2.14% 6.25% 6.69% 6.29%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (f) ........... 1.21% 1.33% 1.42% 2.20% 2.55%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (f) .... 2.63% 1.47% 5.29% 4.70% 3.83%
Portfolio Turnover ...................................... 59.51% 117.41% 170.64% 327.31% 26.14%
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 B
six month period ended March 31, 1998 or throughout each ------------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(b)(d)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period ................... $8.94 $8.70 $8.98 $8.36
- -------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.23 0.49 0.51 0.49
Net realized and unrealized gain (loss) on investments .. 0.12 0.24 (0.28) 0.62
- -------------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.35 0.73 0.23 1.11
- -------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.23) (0.49) (0.51) (0.49)
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00
Total distributions .................................. (0.23) (0.49) (0.51) (0.49)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.12 0.24 (0.28) 0.62
- -------------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $9.06 $8.94 $8.70 $8.98
=======================================================================================================
Total return (not annualized)(c) ........................ 3.91% 8.63% 2.62% 13.58%
=======================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $688 $433 $412 $150
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 1.44% 1.13% 0.96% 0.78%
Ratio of net investment income to average net assets (ii) 4.96% 2.24% 5.66% 5.56%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (f) ........... 1.95% 2.08% 2.15% 4.00%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (f) .... 1.73% 1.33% 4.48% 2.34%
Portfolio Turnover ...................................... 59.51% 117.41% 170.64% 327.31%
Average Commission Rate Paid ............................ N/A N/A N/A N/A
- -------------------------------------------------------------------------------------------------------
<CAPTION>
Municipal Bond Fund
Supplemental information for a share outstanding for the Class A
six month period ended March 31, 1998 or throughout each --------------------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(e) 1994(a)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period ................... $9.29 $8.95 $8.98 $8.60 $9.50
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.20 0.42 0.44 0.47 0.42
Net realized and unrealized gain (loss) on investments .. 0.12 0.34 (0.03) 0.38 (0.90)
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.32 0.76 0.41 0.85 (0.48)
- ----------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.20) (0.42) (0.44) (0.47) (0.42)
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00 0.00
Total distributions .................................. (0.20) (0.42) (0.44) (0.47) (0.42)
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.12 0.34 (0.03) 0.38 (0.90)
- ----------------------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $9.41 $9.29 $8.95 $8.98 $8.60
================================================================================================================
Total return (not annualized)(c) ........................ 3.43% 8.64% 4.64% 10.18% (5.15)%
================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $13,982 $9,612 $6,540 $5,512 $2,610
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 0.66% 0.55% 0.41% 0.40% 0.25%
Ratio of net investment income to average net assets (ii) 4.20% 4.56% 4.88% 5.26% 5.03%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (f) ........... 1.51% 1.71% 1.95% 3.30% 3.99%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (f) .... 1.67% 3.40% 3.35% 2.36% 1.29%
Portfolio Turnover ...................................... 9.61% 12.95% 9.82% 81.90% 81.42%
Average Commission Rate Paid ............................ N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Municipal Bond Fund
Supplemental information for a share outstanding for the Class B
six month period ended March 31, 1998 or throughout each ------------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(b)(e)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period ................... $9.29 $8.96 $8.98 $8.31
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.17 0.37 0.40 0.38
Net realized and unrealized gain (loss) on investments .. 0.12 0.33 (0.02) 0.67
- --------------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.29 0.70 0.38 1.05
- --------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.17) (0.37) (0.40) (0.38)
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00
Total distributions .................................. (0.17) (0.37) (0.40) (0.38)
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.12 0.33 (0.02) 0.67
- --------------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $9.41 $9.29 $8.96 $8.98
=======================================================================================================
Total return (not annualized)(c) ........................ 3.08% 7.96% 4.22% 12.86%
=======================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $490 $431 $425 $56
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 1.07% 2.14% 0.91% 0.90%
Ratio of net investment income to average net assets (ii) 4.05% 8.12% 4.27% 4.26%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (f) ........... 2.47% 4.95% 2.53% 5.56%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (f) .... 2.61% 2.61% 2.64% (0.40)%
Portfolio Turnover ...................................... 9.61% 12.95% 9.82% 81.90%
Average Commission Rate Paid ............................ N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------
</TABLE>
(a) The fund commenced operations on October 19, 1993.
(b) Class B shares were not offered until November 1, 1994.
(c) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charge.
(d) The fund was managed by Piper Capital Management, Inc. until December 1,
1994 when The Boston Company Asset Management, Inc. assumed management
responsibilities.
(e) The fund was managed by Piper Capital Management, Inc. until December 1,
1994 when Payden & Rygel Investment Counsel assumed management
responsibilities.
(f) Ratio reflects fees reduced in connection with specific agreements only for
periods ended after September 30, 1995
See accompanying notes to financial statements.
- 31 -
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
California Tax-Free Fund
Supplemental information for a share outstanding for the Class A
six month period ended March 31, 1998 or throughout each --------------------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995 1994(a)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period ................... $8.26 $7.93 $7.92 $7.59 $8.50
- ----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.18 0.38 0.40 0.41 0.36
Net realized and unrealized gain (loss) on investments .. 0.09 0.33 0.01 0.33 (0.91)
- ----------------------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.27 0.71 0.41 0.74 (0.55)
- ----------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.18) (0.38) (0.40) (0.41) (0.36)
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00 0.00
Total distributions .................................. (0.18) (0.38) (0.40) (0.41) (0.36)
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.09 0.33 0.01 0.33 (0.91)
- ----------------------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $8.35 $8.26 $7.93 $7.92 $7.59
================================================================================================================
Total return (not annualized)(c) ........................ 3.29% 9.19% 5.23% 10.13% (6.56)%
================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $32,732 $26,096 $20,876 $19,292 $13,815
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 0.66% 0.55% 0.38% 0.32% 0.25%
Ratio of net investment income to average net assets (ii) 4.55% 4.72% 4.98% 5.36% 4.70%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (e) ........... 1.16% 1.22% 1.29% 1.65% 2.01%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (e) .... 1.89% 4.05% 4.06% 4.03% 2.94%
Portfolio Turnover ...................................... 11.32% 34.88% 31.78% 86.69% 73.88%
Average Commission Rate Paid ............................ N/A N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
California Tax-Free Fund
Supplemental information for a share outstanding for the Class B
six month period ended March 31, 1998 or throughout each ------------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(b)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period ................... $8.26 $7.93 $7.92 $7.35
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.15 0.34 0.36 0.34
Net realized and unrealized gain (loss) on investments .. 0.10 0.33 0.01 0.57
- --------------------------------------------------------------------------------------------------------
Total from investment operations ..................... 0.25 0.67 0.37 0.91
- --------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.15) (0.34) (0.36) (0.34)
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00
Total distributions .................................. (0.15) (0.34) (0.36) (0.34)
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 0.10 0.33 0.01 0.57
- --------------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $8.36 $8.26 $7.93 $7.92
========================================================================================================
Total return (not annualized)(c) ........................ 3.02% 8.63% 4.70% 12.60%
========================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $6,249 $4,725 $3,159 $966
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 1.40% 1.08% 0.89% 0.84%
Ratio of net investment income to average net assets (ii) 3.53% 4.18% 4.39% 4.47%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (e) ........... 2.90% 2.01% 1.98% 2.97%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (e) .... 1.01% 3.25% 3.30% 2.35%
Portfolio Turnover ...................................... 11.32% 34.88% 31.78% 86.69%
Average Commission Rate Paid ............................ N/A N/A N/A N/A
- --------------------------------------------------------------------------------------------------------
<CAPTION>
Growth & Income Fund
Supplemental information for a share outstanding for the Class A
six month period ended March 31, 1998 or throughout each ------------------------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(d) 1994(a)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value - beginning of period ................... $20.92 $16.29 $14.30 $11.14 $11.00
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.10 0.25 0.21 0.27 0.23
Net realized and unrealized gain (loss) on investments .. 1.55 5.73 2.32 3.22 0.13
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations ..................... 1.65 5.98 2.53 3.49 0.36
- --------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.10) (0.21) (0.21) (0.27) (0.22)
Distributions from net realized gain (loss) ............. (2.37) (1.14) (0.33) (0.06) 0.00
Total distributions .................................. (2.47) (1.35) (0.54) (0.33) (0.22)
- --------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... (0.82) 4.63 1.99 3.16 0.14
- --------------------------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $20.10 $20.92 $16.29 $14.30 $11.14
====================================================================================================================
Total return (not annualized)(c) ........................ 9.45% 38.78% 18.08% 31.93% 3.29%
====================================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $292,449 $224,524 $102,485 $38,483 $14,174
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 0.83% 0.73% 0.72% 0.43% 0.25%
Ratio of net investment income to average net assets (ii) 1.35% 1.39% 1.49% 2.30% 2.81%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (e) ........... 1.17% 1.22% 1.34% 1.80% 2.17%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (e) .... 1.01% 0.90% 0.88% 0.93% 0.89%
Portfolio Turnover ...................................... 46.30% 93.14% 66.32% 92.01% 13.90%
Average Commission Rate Paid ............................ $0.0556 $0.0577 $0.0498 N/A N/A
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
Growth & Income Fund
Supplemental information for a share outstanding for the Class B
six month period ended March 31, 1998 or throughout each ------------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(b)(d)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period ................... $20.87 $16.26 $14.29 $11.30
- --------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... 0.02 0.11 0.17 0.23
Net realized and unrealized gain (loss) on investments .. 1.56 5.76 2.28 3.05
- --------------------------------------------------------------------------------------------------------
Total from investment operations ..................... 1.58 5.87 2.45 3.28
- --------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ (0.03) (0.12) (0.15) (0.23)
Distributions from net realized gain (loss) ............. (2.37) (1.14) (0.33) (0.06)
Total distributions .................................. (2.40) (1.26) (0.48) (0.29)
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... (0.82) 4.61 1.97 2.99
- --------------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $20.05 $20.87 $16.26 $14.29
========================================================================================================
Total return (not annualized)(c) ........................ 9.11% 38.08% 17.48% 29.53%
========================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $51,605 $38,069 $16,658 $2,887
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 1.58% 1.26% 1.22% 1.01%
Ratio of net investment income to average net assets (ii) 0.35% 0.60% 0.97% 1.64%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (e) ........... 1.92% 1.97% 2.07% 2.92%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (e) .... (1.47)% (0.21)% 0.12% (0.27)%
Portfolio Turnover ...................................... 46.30% 93.14% 66.32% 92.01%
Average Commission Rate Paid ............................ $0.0556 $0.0577 $0.0498 N/A
- --------------------------------------------------------------------------------------------------------
</TABLE>
(a) The fund commenced operations on October 19, 1993.
(b) Class B shares were not offered until November 1, 1994.
(c) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charge.
(d) The fund was managed by Piper Capital Management, Inc. until December 1,
1994 when The Boston Company Asset Management, Inc. assumed management
responsibilities.
(e) Ratio reflects fees reduced in connection with specific agreements only for
periods ended after September 30, 1995.
See accompanying notes to financial statements.
- 32 -
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Growth Fund
Supplemental information for a share outstanding for the Class A
six month period ended March 31, 1998 or throughout each --------------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(a)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period ................... $16.74 $13.76 $11.66 $10.00
- -----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... (0.06) (0.08) 0.01 0.03
Net realized and unrealized gain (loss) on investments .. 1.74 3.06 2.12 1.63
- -----------------------------------------------------------------------------------------------------
Total from investment operations ..................... 1.68 2.98 2.13 1.66
- -----------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ 0.00 0.00 (0.03) 0.00
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00
Total distributions .................................. 0.00 0.00 (0.03) 0.00
- -----------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 1.68 2.98 2.10 1.66
- -----------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $18.42 $16.74 $13.76 $11.66
====================================================================================================
Total return (not annualized)(b) ........................ 10.04% 21.66% 18.35% 16.60%
====================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $79,640 $58,180 $21,027 $4,187
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 0.98% 1.80% 0.49% 0.00%
Ratio of net investment income to average net assets (ii) (0.16)% (0.25)% 0.21% 1.20%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (c) ........... 1.30% 2.80% 1.68% 3.46%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (c) .... (0.47)% (1.25)% (0.98)% (2.26)%
Portfolio Turnover ...................................... 9.82% 22.37% 16.40% 0.06%
Average Commission Rate Paid ............................ $0.0249 $0.0271 $0.0281 N/A
- -----------------------------------------------------------------------------------------------------
<CAPTION>
Growth Fund
Supplemental information for a share outstanding for the Class B
six month period ended March 31, 1998 or throughout each -----------------------------------
fiscal year or period ended September 30. 1998 1997 1996 1995(a)
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value - beginning of period ................... $16.59 $13.70 $11.65 $10.00
- -------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income ................................... (0.16) (0.10) (0.02) 0.03
Net realized and unrealized gain (loss) on investments .. 1.76 2.99 2.09 1.62
- -------------------------------------------------------------------------------------------------
Total from investment operations ..................... 1.60 2.89 2.07 1.65
- -------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net investment income ................ 0.00 0.00 (0.02) 0.00
Distributions from net realized gain (loss) ............. 0.00 0.00 0.00 0.00
Total distributions .................................. 0.00 0.00 (0.02) 0.00
- ------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value ........... 1.60 2.89 2.05 1.65
- -------------------------------------------------------------------------------------------------
Net asset value - end of period ...................... $18.19 $16.59 $13.70 $11.65
=================================================================================================
Total return (not annualized)(b) ........................ 9.64% 21.09% 17.80% 16.50%
=================================================================================================
Ratios/supplemental data:
Net assets, end of period (000) ......................... $5,829 $4,132 $2,170 $149
Ratios to average net assets (annualized):
Ratio of net expenses to average net assets(i) .......... 1.73% 2.81% 1.01% 0.00%
Ratio of net investment income to average net assets (ii) (1.15)% (1.71)% (0.36)% 1.07%
(i) Ratio of net expenses to average net assets
prior to waivers and reimbursements (c) ........... 2.05% 4.29% 2.43% 3.85%
(ii) Ratio of net investment income to average net
assets prior to waivers and reimbursements (c) .... (1.47)% (3.20)% (1.78)% (2.78)%
Portfolio Turnover ...................................... 9.82% 22.37% 16.40% 0.06%
Average Commission Rate Paid ............................ $0.0249 $0.0271 $0.0281 N/A
- -------------------------------------------------------------------------------------------------
</TABLE>
(a) The fund commenced operations on June 12, 1995.
(b) Total return represents aggregate total return for the period indicated and
does not reflect any applicable sales charge.
(c) Ratio reflects fees reduced in connection with specific agreements only for
periods ended after September 30, 1995.
See accompanying notes to financial statements.
- 33 -
<PAGE>
Notes to Financial Statements
(1) Significant Accounting Policies
Organization
- ------------
The Griffin Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940 (the "1940 Act"), 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 two classes: Class A and Class B. The
Company commenced operations on October 19, 1993 and consists of one
non-diversified fund, the California Tax-Free Fund, and eight separate
diversified funds (each, a "Fund" and 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 commenced offering 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 in a
Fund bear the common expenses of the Fund, 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 determined 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 distribution 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 ("GAAP") for investment
companies.
Security 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 closing 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 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, 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.
- 34 -
<PAGE>
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 open at year end, 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 custodian'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. A risk involved with
repurchase agreements is that the counterparty to the agreement may default on
their obligation. If the counterparty defaults, a Fund might incur a loss or
delay in the realization of proceeds if the value of the collateral securing the
repurchase agreement declines and it might incur disposition costs in
liquidating the collateral. The repurchase agreements held in the Funds at
September 30, 1997 are collateralized by U.S. Treasury or federal agency
obligations, and were entered into on the same date.
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, Municipal 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, dividends are declared and
distributed to shareholders annually. Dividends to shareholders are recorded on
the ex-dividend date. Each Fund makes distributions from net realized gains on
investments, 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 of 1986, as amended, that are applicable to regulated
investment companies and to distribute substantially all of their taxable income
and any net realized capital gains to their shareholders. Accordingly, no
provisions for income taxes have been made as sufficient distributions were made
or are intended to be made to eliminate taxable income. Distributions from net
investment income or net realized capital gains determined in accordance with
federal income tax regulations may differ from GAAP. To the extent these
differences are permanent in nature, such amounts are reclassified within the
capital accounts based on their federal tax-basis treatment; temporary
differences do not require such reclassification.
It is the policy of the Funds that the Board of Directors will not declare
capital gain distributions until any net capital loss carryforwards have been
utilized. The following net capital loss carryforward amounts were available to
the Funds as of September 30, 1997:
- 35 -
<PAGE>
Net Capital Loss Date(s) of
Carryforward Expiration
- -------------------------------------------------------------
Tax-Free Money Market Fund $4,664 2004
Short-Term Bond Fund ..... 37,925 2004
U.S. Government Income Fund 302,440 2005
Bond Fund ................. 184,779 2003-2005
Municipal Bond Fund ....... 125,678 2003-2004
California Tax-Free Fund .. 225,765 2004
Growth Fund ............... 297,325 2004-2005
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
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.
Organization Expenses
- ----------------------
Griffin Financial Administrators ("GFA"), 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.
Use of Estimates
- ------------------
The preparation of financial statements in conformity with GAAP 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 each Fund's 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, 1998, GFIA has voluntarily waived a portion of
its fees to limit fund expenses. For the six months ended March 31, 1998
advisory fees were incurred by the Funds as follows:
Funds Advisory Waived
fees fees
- ---------------------------------------------
Money Market ......... $576,694 $339,880
Tax-Free Money Market 49,465 49,465
Short-Term Bond ...... 148,747 148,747
U.S. Government Income 225,010 185,524
Bond ................. 164,389 164,389
Municipal Bond ...... 28,390 28,390
California Tax-Free . 84,393 84,393
Growth & Income ...... 859,467 490,712
Growth ............... 212,126 111,768
The Company has entered into contracts on behalf of the Funds with 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, 1998 administration fees
were incurred by the Funds as follows:
- 36 -
<PAGE>
Administration
& Accounting Waived
Funds fees fees
- -----------------------------------------------
Money Market .......... $230,678 $0
Tax-Free Money Market . 19,786 0
Short-Term Bond ....... 59,498 0
U.S. Government Income 90 0
Bond .................. 65,756 2,813
Municipal Bond ........ 11,356 6,008
California Tax-Free .. 33,757 1,480
Growth & Income ....... 286,489 0
Growth ................ 70,709 0
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
Fund and the Tax-Free Money Market Fund (collectively, 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, propective 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 the Money Market Fund and the Tax-Free Money
Market Fund, and 0.25% of the average daily net assets of the Class A shares of
the non-Money Market Funds. GFS has waived a portion of its fees to limit fund
expenses. For the six months ended March 31, 1998, shares of the Money Market
Fund and the Tax-Free Money Market Fund, and Class A shares of the non-Money
Market Funds incurred distribution and services fees as follows:
Distribution and
Servicing Waived
Funds Fees Fees
- -----------------------------------------------
Money Market .......... $230,678 $0
Tax-Free Money Market . 19,786 8,163
Class A Shares:
- ---------------
Short-Term Bond ...... 74,173 11,03
U.S. Government Income 107,358 0
Bond .................. 81,550 0
Municipal Bond ........ 13,640 13,640
California Tax-Free ... 35,656 0
Growth & Income ....... 305,545 0
Growth ................ 82,670 0
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 providing them 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 six months ended March 31, 1998, Class B
shares of the Funds incurred distribution and servicing fees as follows:
Distribution and
Servicing Waived
Funds Fees Fees
- --------------------------------------------
Short-Term Bond ...... $800 $268
U.S. Government Income 20,589 0
Bond ................. 2,578 0
Municipal Bond ...... 2,221 736
California Tax-Free .. 26,160 0
Growth & Income ...... 210,263 0
Growth ............... 22,862 0
Reimbursed 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, 1998, GFS was paid $196,936 in front-end sales
charges on sales of Class A shares, and $66,960 in contingent deferred sales
charges on Class B share redemptions.
- 37 -
<PAGE>
(3)Purchases and Sales of Securities Exclusive of Short-Term Investments
<TABLE>
<CAPTION>
U.S. California Growth &
Short-Term Government Bond Municipal Tax-Free Income Growth
Bond Fund Income Fund Fund Bond 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 $176,552,027 $21,270,201
Sales proceeds .......... 0 0 0 0 0 128,126,670 6,874,407
U.S. Treasury Obligations:
Purchases at cost ....... 11,086,680 42,413,781 30,322,247 0 0 0 0
Sales proceeds .......... 2,482,502 31,584,129 26,604,728 0 0 0 0
U.S. Agency Securities:
Purchases at cost ....... 995,710 131,933,230 8,829,942 0 0 0 0
Sales proceeds .......... 425,195 117,549,186 7,935,184 0 0 0 0
Municipal Bonds:
Purchases at cost ....... 0 0 0 4,504,016 9,658,408 0 0
Sales proceeds .......... 0 0 0 1,036,495 3,611,861 0 0
Other Long-Term Securities:
Purchases at cost ....... 12,354,763 0 20,236,273 0 0 0 0
Sales proceeds .......... 267,935 0 8,513,001 0 0 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
All Funds not reflected in this schedule traded exclusively in short-term
securities.
(4) Capital Shares Transactions
As of March 31, 1998, the Company was authorized to issue 10 billion shares of
$0.001 par value capital stock. As of March 31, 1998, each Fund, except the
Money Market Fund and the Tax-Free Money Market Fund, was authorized to issue
250 million shares of $0.001 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 the Tax-Free Money Market Fund were each authorized to issue 1
billion shares of $0.001 par value capital stock of a single class of shares.
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, 1996: ......................... 184,630,919 $184,630,919 11,656,257 11,656,257
Shares sold and exchanged in ............. 377,824,042 377,824,042 21,135,288 21,135,288
Shares issued in reinvestment of dividends 9,784,791 9,784,791 376,989 $376,989
Shares redeemed and exchanged out ........ (342,482,819) (342,482,819) (17,002,784) (17,002,784)
------------- ------------- ------------- -------------
September 30, 1997: ......................... 229,756,933 229,756,933 16,165,750 16,165,750
Shares sold and exchanged in ............. 222,902,799 222,902,799 32,085,451 32,085,451
Shares issued in reinvestment of dividends 5,587,309 $5,587,309 268,692 268,692
Shares redeemed and exchanged out ........ (225,163,569) (225,163,569) (22,082,175) (22,082,175)
------------- ------------- ------------- -------------
March 31, 1998: ............................. 233,083,472 $233,083,472 26,437,718 $26,437,718
============= ============= ============= =============
</TABLE>
- 38 -
<PAGE>
<TABLE>
<CAPTION>
Class A Class B
------------------------------ -----------------------------
Shares Amount Shares Amount
-------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Short-Term Bond Fund
September 30, 1996: ......................... 1,958,317 $19,680,864 14,309 $142,269
Shares sold and exchanged in ............. 3,948,575 39,591,843 16,298 162,998
Shares issued in reinvestment of dividends 155,367 1,557,388 1,029 10,304
Shares redeemed and exchanged out ........ (1,090,055) (10,925,947) (14,241) (142,503)
------------ ------------ ------------ ------------
September 30, 1997: ......................... 4,972,204 49,904,148 17,395 173,068
Shares sold and exchanged in ............. 3,324,867 33,677,664 628 6,352
Shares issued in reinvestment of dividends 144,339 1,461,975 373 3,777
Shares redeemed and exchanged out ........ (1,088,633) (11,032,785) (3,091) (31,290)
------------ ------------ ------------ ------------
March 31, 1998: ............................. 7,352,777 $74,011,002 15,305 $151,907
============ ============ ============ ============
<CAPTION>
Class A Class B
------------------------------ -----------------------------
Shares Amount Shares Amount
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
U.S. Government Income Fund
September 30, 1996: ......................... 4,852,691 $44,478,506 381,467 $3,528,844
Shares sold and exchanged in ............. 4,772,208 43,274,806 95,320 868,466
Shares issued in reinvestment of dividends 309,586 2,809,716 12,152 110,352
Shares redeemed and exchanged out ........ (1,599,648) (14,514,126) (59,958) (543,867)
------------ ------------ ------------ ------------
September 30, 1997: ......................... 8,334,837 76,048,902 428,981 3,963,795
Shares sold and exchanged in ............. 3,286,148 30,618,244 79,780 743,902
Shares issued in reinvestment of dividends 233,689 2,173,952 6,145 57,209
Shares redeemed and exchanged out ........ (1,341,675) (12,509,064) (57,670) (537,988)
------------ ------------ ------------ ------------
March 31, 1998: ............................. 10,512,999 $96,332,034 457,236 $4,226,918
============ ============ ============ ============
<CAPTION>
Class A Class B
----------------------------- -----------------------------
Shares Amount Shares Amount
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Bond Fund
September 30, 1996: ......................... 3,188,670 $28,452,780 47,393 $422,523
Shares sold and exchanged in ............. 4,150,730 36,626,337 12,640 111,012
Shares issued in reinvestment of dividends 230,369 2,030,893 1,901 16,746
Shares redeemed and exchanged out ........ (1,209,786) (10,663,918) (13,567) (118,679)
------------ ------------ ------------ ------------
September 30, 1997: ......................... 6,359,983 56,446,092 48,367 431,602
Shares sold and exchanged in ............. 3,288,401 29,788,647 33,474 302,132
Shares issued in reinvestment of dividends 186,368 1,686,277 999 9,030
Shares redeemed and exchanged out ........ (1,257,643) (11,396,385) (6,883) (62,252)
------------ ------------ ------------ ------------
March 31, 1998: ............................. 8,577,109 $76,524,631 75,957 $680,512
============ ============ ============ ============
<CAPTION>
Class A Class B
----------------------------- -----------------------------
Shares Amount Shares Amount
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Municipal Bond Fund
September 30, 1996: ......................... 730,424 $6,584,230 47,497 $428,897
Shares sold and exchanged in ............. 454,447 4,139,861 11,948 108,637
Shares issued in reinvestment of dividends 26,502 240,493 1,146 10,397
Shares redeemed and exchanged out ........ (176,304) (1,597,048) (14,228) (128,103)
------------ ------------ ------------ ------------
September 30, 1997: ......................... 1,035,069 9,367,536 46,363 419,828
Shares sold and exchanged in ............. 703,549 6,618,885 5,413 51,000
Shares issued in reinvestment of dividends 18,677 175,439 545 5,113
Shares redeemed and exchanged out ........ (271,052) (2,545,440) (287) (2,719)
------------ ------------ ------------ ------------
March 31, 1998: ............................. 1,486,243 $13,616,420 52,034 $473,222
============ ============ ============ ============
</TABLE>
- 39 -
<PAGE>
<TABLE>
<CAPTION>
Class A Class B
------------------------------ -----------------------------
Shares Amount Shares Amount
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
California Tax-Free Fund
September 30, 1996: ......................... 2,632,204 $20,998,696 398,223 $3,151,684
Shares sold and exchanged in ............. 953,669 7,730,742 228,961 1,842,384
Shares issued in reinvestment of dividends 72,141 581,289 11,814 95,171
Shares redeemed and exchanged out ........ (499,082) (4,026,992) (67,159) (539,091)
------------ ------------ ------------ ------------
September 30, 1997: ......................... 3,158,932 25,283,735 571,839 4,550,148
Shares sold and exchanged in ............. 1,041,616 8,695,887 201,442 1,686,677
Shares issued in reinvestment of dividends 46,938 391,237 6,137 51,162
Shares redeemed and exchanged out ........ (328,915) (2,755,357) (31,584) (262,795)
------------ ------------ ------------ ------------
March 31, 1998: ............................. 3,918,571 $31,615,502 747,834 $6,025,192
============ ============ ============ ============
<CAPTION>
Class A Class B
------------------------------- -------------------------------
Shares Amount Shares Amount
-------------- -------------- ------------- ---------------
<S> <C> <C> <C> <C>
Growth & Income Fund
September 30, 1996: ......................... 6,292,564 $86,654,667 1,024,339 $15,268,187
Shares sold and exchanged in ............. 6,046,362 110,044,808 824,740 15,027,177
Shares issued in reinvestment of dividends 583,472 9,864,463 84,273 1,410,147
Shares redeemed and exchanged out ........ (2,189,429) (40,106,099) (109,363) (1,961,833)
------------- ------------- ------------- -------------
September 30, 1997: ......................... 10,732,969 166,457,839 1,823,989 29,743,678
Shares sold and exchanged in ............. 3,653,051 71,549,090 571,234 11,134,463
Shares issued in reinvestment of dividends 1,640,395 29,231,253 272,701 4,836,307
Shares redeemed and exchanged out ........ (1,707,856) (32,976,878) (91,813) (1,771,065)
------------- ------------- ------------- -------------
March 31, 1998: ............................. 14,318,559 $234,261,304 2,576,111 $43,943,383
============= ============= ============= =============
<CAPTION>
Class A Class B
------------------------------ -----------------------------
Shares Amount Shares Amount
-------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
Growth Fund
September 30, 1996: ......................... 1,528,277 $18,370,806 158,347 $2,005,371
Shares sold and exchanged in ............. 2,767,036 39,554,274 110,567 1,547,328
Shares issued in reinvestment of dividends 31 433 5 75
Shares redeemed and exchanged out ........ (820,139) (12,331,287) (19,860) (284,909)
------------ ------------ ------------ ------------
September 30, 1997: ......................... 3,475,205 45,594,226 249,059 3,267,865
Shares sold and exchanged in ............. 1,450,898 24,429,989 79,596 1,335,701
Shares issued in reinvestment of dividends 8 152 11 179
Shares redeemed and exchanged out ........ (603,452) (10,358,130) (8,186) (134,995)
------------ ------------ ------------ ------------
March 31, 1998: ............................. 4,322,659 $59,666,237 320,480 $4,468,801
============ ============ ============ ============
</TABLE>
(5) Custodial Earnings Credits
In accordance with the Custody Agreement between the Company and Investors
Fiduciary Trust Company (the "Custodian"), the Custodian provides credits
("Earnings Credits") which are used to offset custodial expenses. These Earnings
Credits are calculated each month by multiplying the average daily cash balance
in each Fund 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
each of 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.
- 40 -
<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
Herbert L. Botts, Assistant Secretary
Steven P. Muson, Assistant Treasurer
Diana J. Veloz, Assistant Secretary
Transfer Agent and Custodian
Investors Fiduciary Trust Company (IFTC)
127 West 10th Street
Kansas City, MO 64105-1716
Investment Adviser
Griffin Financial Investment Advisers
5000 Rivergrade Road
Irwindale, CA 91706
Sub-Advisers
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 contains more
detailed information about The Griffin Funds, Inc. Read the prospectus
carefully before you invest or send money.
