Asfiled with the Securities and Exchange Commission on August 21, 1998
Securities Act File No. 33-68666 Investment Company Act File No. 811-8004
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 11 X
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 13 X
Alleghany Funds
(Exact Name of Registrant as Specified in Charter)
171 North Clark Street
Chicago, Illinois 60610
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (312) 223-2139
Name and Address of Agent for Service: Copies to:
Kenneth C. Anderson, President Paul H. Dykstra, Esq.
Alleghany Funds Gardner, Carton & Douglas
171 North Clark Street 321 North Clark Street
Chicago, Illinois 60610 Chicago, Illinois 60610
Approximate Date of Proposed Public Offering:
As soon as practicable after the effective date of the Registration Statement.
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b), or on
__________ pursuant to paragraph (b) 60 days after filing
pursuant to paragraph (a)(1), or on pursuant to paragraph (a)(1)
X 75 days after filing pursuant to paragraph (a)(2) on __________
pursuant to paragraph (a)(2) of Rule 485
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ALLEGHANY FUNDS
FORM N-1A
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
ALLEGHANY CHICAGO TRUST SMALLCAP VALUE FUND
ALLEGHANY VEREDUS AGGRESSIVE GROWTH FUND
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Part A.
Item No. Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Prospectus Summary;
Expense Information
3. Condensed Financial Information Not Applicable
4. General Description of Registrant Investment Objectives and Policies;
Investment Strategies and Risk
Considerations
5. Management of the Fund Management of the Funds
5A. Management's Discussion Not Applicable
of Fund Performance
6. Capital Stock and Other Securities Net Asset Value;
Dividends and Taxes;
General Information
7. Purchase of Securities Being Offered Purchase of Shares; Exchange of Shares; Account
Options; Distribution Plans
8. Redemption or Repurchase Redemption of Shares
9. Legal Proceedings Not Applicable
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</TABLE>
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N-1A Statement of Additional
Item No. Information Caption
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Covered in Part A
13. Investment Objectives and Policies Investment Policies and Risk
Considerations; Investment
Restrictions; Portfolio Transactions
and Brokerage Commissions
14. Management of the Fund Trustees and Officers
15. Principal Holders of Securities Principal Holders of Securities
16. Investment Advisory and Other Services Investment Advisory and Other
Services
17. Brokerage Allocation Portfolio Transactions
and Brokerage Commissions
18. Capital Stock and Other Securities Other Information
19. Purchase, Redemption, and
Pricing of Securities Being Offered Covered in Part A
20. Tax Status Taxes
21. Underwriters Covered in Part A
22. Calculations of Performance Data Performance Information
23. Financial Statements Audited Financials dated 10/31/97
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Part C -- OTHER INFORMATION:
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C to this Registration Statement.
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ALLEGHANY FUNDS
The purpose of this Post-Effective Amendment filing is to (i) add two new series
to the Alleghany Funds, namely, Alleghany Chicago Trust SmallCap Value Fund and
Alleghany Veredus Aggressive Growth Fund and (ii) to combine the Statement of
Additional Information filed with the Securities and Exchange Commission in
Post-Effective Amendment No. 10 on February 27, 1998 to include the two new
series.
PART A
The Prospectus for Montag & Caldwell Growth Fund, Chicago Trust Growth & Income
Fund, Chicago Trust Talon Fund, Chicago Trust Balanced Fund, Montag & Caldwell
Balanced Fund, Chicago Trust Bond Fund, Chicago Trust Municipal Bond Fund and
Chicago Trust Money Market Fund is incorporated by reference to Post-Effective
Amendment No. 10, as filed with the Securities and Exchange Commission on
February 27, 1998.
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PROSPECTUS
(with application)
______________, 1998
Alleghany/Chicago Trust SmallCap Value Fund
Alleghany/Veredus Aggressive Growth Fund
ALLEGHANY FUNDS
The Chicago Trust Company, Investment Advisor
Veredus Asset Management LLC, Investment Advisor
(800) 992-8151
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ALLEGHANY FUNDS
171 North Clark Street
Chicago, IL 60601
(800) 992-8151
Website: http://www.alleghanyfunds.chicago-trust.com
PROSPECTUS
_________________, 1998
Alleghany Funds (the "Company") is a no-load, open-end management
investment company which consists of ten separate diversified investment series
designed to offer investors a variety of investment opportunities. This
Prospectus pertains only to Alleghany/Chicago Trust SmallCap Value Fund and
Alleghany/Veredus Aggressive Growth Fund (each a "Fund" and collectively, the
"Funds"). Each Fund has distinct investment objectives and policies.
Alleghany/Chicago Trust SmallCap Value Fund is advised by The Chicago
Trust Company ("Chicago Trust") and Alleghany/Veredus Aggressive Growth Fund is
advised by Veredus Asset Management LLC ("Veredus").
Alleghany/Chicago Trust SmallCap Value Fund seeks long-term total
return through investment primarily in common stocks of small companies, based
on revenues and/or market capitalization, domiciled in the United States which
Chicago Trust believes offer exceptional relative value at attractive prices.
Alleghany/Veredus Aggressive Growth Fund seeks capital appreciation
through investment primarily in equity securities of companies whose earnings
are growing at an accelerating rate.
Shares of each Fund are purchased and redeemed without any purchase or
redemption charge imposed by the Company, although institutions may charge their
customers for services provided in connection with their investments.
Shares of the Funds are not deposits, obligations of, or endorsed by
any bank, and are not insured or guaranteed by any bank, the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. An
investment in a Fund involves investment risks, including the possible loss of
principal.
This Prospectus sets forth concisely the information a prospective
investor should know before investing in either of the above Funds. Investors
should read and retain this Prospectus for future reference. Additional
information about the Funds is contained in the Statement of Additional
Information dated ____________, 1998, as supplemented from time to time, which
has been filed with the Securities and Exchange Commission ("SEC") and is
available along with other related materials in the SEC's Internet Website
(http://www.sec.gov). The Statement of Additional Information is incorporated by
reference into this Prospectus and is available upon request and without charge
from the Company, at the addresses and telephone numbers below.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Alleghany Funds Investment Advisors:
171 North Clark Street The Chicago Trust Company
Chicago, IL 60601-3294 171 North Clark Street
(800) 992-8151 Chicago, IL 60601-3294
Veredus Asset Management LLC
6900 Bowling Blvd., Suite 250
Louisville, KY 40207
(800) 992-8151
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TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY......................................................... 4
EXPENSE INFORMATION........................................................ 5
INVESTMENT OBJECTIVES AND POLICIES......................................... 7
Alleghany/Chicago Trust SmallCap Value Fund....................... 7
Alleghany/Veredus Aggressive Growth Fund.......................... 7
INVESTMENT STRATEGIES AND RISK CONSIDERATIONS.............................. 8
MANAGEMENT OF THE FUNDS.................................................... 13
PORTFOLIO MANAGEMENT METHODS............................................... 14
ADMINISTRATION OF THE FUNDS................................................ 17
PURCHASE OF SHARES......................................................... 18
EXCHANGE OF SHARES......................................................... 19
REDEMPTION OF SHARES....................................................... 20
ACCOUNT OPTIONS............................................................ 21
DISTRIBUTION PLAN.......................................................... 22
NET ASSET VALUE............................................................ 22
DIVIDENDS AND TAXES........................................................ 23
PERFORMANCE OF THE FUNDS................................................... 24
GENERAL INFORMATION........................................................ 24
APPENDIX
DEBT RATINGS............................................................... 26
THIS PROSPECTUS IS NOT AN OFFERING OF THE SECURITIES HEREIN DESCRIBED IN ANY
JURISDICTION OR TO ANY PERSON TO WHOM IT IS UNLAWFUL FOR THE FUNDS TO MAKE SUCH
AN OFFER OR SOLICITATION. NO SALES REPRESENTATIVE, DEALER, OR OTHER PERSON IS
AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS.
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PROSPECTUS SUMMARY
The Funds
The Company is an open-end, management investment company commonly
known as a mutual fund. The Company was established as a Delaware business trust
on September 10, 1993. The Company currently offers ten separate series of
shares. This Prospectus offers only shares of Alleghany/Chicago Trust SmallCap
Value Fund and Alleghany/Veredus Aggressive Growth Fund.
Investment Definitions
Equity Securities--The term "equity securities" as used herein
typically refers to common stock or preferred stock, which represent a
stockholder's equity or ownership of shares in a company.
Debt Securities--Examples of "debt securities" are bills, notes and
bonds, each representing a promise by the issuer to re-pay a debt which is
generally secured by the assets of such issuer. Also in this investment category
are debentures, which are bonds or promissory notes that are backed by the
general credit of the issuer, but not secured by specific assets of such issuer.
Convertible Features--Equity or debt securities purchased by the Funds
may have "convertible" features, whereby they can be exchanged for another class
of securities, according to the terms of their respective issuers.
Short-term Instruments--"Short-term (or money market) instruments" are
generally private or Government obligations with maturities of one year or less
and may include (but are not limited to) certificates of deposit, bankers'
acceptances, corporate commercial paper, and Government obligations.
Derivative Investments--The term "derivatives" has been used to
identify a range and variety of financial categories. In general, a derivative
is commonly defined as a financial instrument whose performance is derived, at
least in part, from the performance of an underlying asset, such as a specific
security or an index of securities. Derivatives, which may be used from time to
time by the Funds and the investment risks associated with such instruments, are
discussed in detail under "INVESTMENT STRATEGIES AND RISK CONSIDERATIONS."
Investment Objectives of the Funds
Alleghany/Chicago Trust SmallCap Value Fund seeks to provide long-term
total return. In seeking to achieve its investment objective, the Fund invests
primarily in common stocks of small companies, based on revenues and/or market
capitalization, domiciled in the United States which Chicago Trust believes
offer exceptional relative value at attractive prices.
Alleghany/Veredus Aggressive Growth Fund seeks capital appreciation. In
seeking to achieve its investment objective, the Fund invests primarily in
equity securities of companies whose earnings are growing at an accelerating
rate.
How to Purchase Shares
The minimum initial investment for regular accounts (other than
Individual Retirement Accounts ("IRAs") and Uniform Gift to Minor Accounts
("UGMAs")) is $2,500 for each Fund, and the minimum subsequent investment is
$50, except for accounts opened through a fund network. In such case, the
minimums of the fund network will apply. The minimum initial investment for IRAs
and UGMAs is $500, and the minimum subsequent investment for IRAs and UGMAs is
$50. The minimum initial and subsequent investment for those enrolled in the
Automatic Investment Plan is $50. The Funds do not impose any sales load,
redemption or exchange fees. Each Fund has a Distribution Plan pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended (the "1940 Act"). See
"DISTRIBUTION PLAN." The public offering price for shares of each of the Funds
is the net asset value per share next determined after receipt of a purchase
order in proper form. See "PURCHASE OF SHARES," "ACCOUNT OPTIONS" and "GENERAL
INFORMATION."
How to Redeem Shares
Shares of each Fund may be redeemed at the net asset value per share of the
Fund next determined after receipt of a redemption request in proper form.
Signature guarantees may be required. See "REDEMPTION OF SHARES."
Dividends
Each Fund intends to distribute substantially all of its net investment
income and net realized capital gains, if any, to shareowners. Distributions of
net capital gains, if any, will be made annually. All distributions are
reinvested at net asset value, in additional full and fractional shares of the
respective Fund unless and until the shareowner notifies the Transfer Agent in
writing requesting payments in cash.
Each Fund declares and pays dividends, if any, quarterly. See
"DIVIDENDS AND TAXES."
Management of the Funds
Chicago Trust, 171 North Clark Street, Chicago, Illinois 60601, an
Illinois corporation, provides investment advisory services to the
Alleghany/Chicago Trust SmallCap Value Fund. As of June 30, 1998, Chicago Trust
managed approximately $8.5 billion in assets primarily for pension and profit
sharing accounts, individuals, families, and insurance companies.
Veredus, 6900 Bowling Blvd., Suite 250, Louisville, Kentucky 40207,
provides investment advisory services to Alleghany/Veredus Aggressive Growth
Fund. As of June 30, 1998, Veredus managed approximately $65.7 million in assets
primarily for institutional clients.
First Data Distributors, Inc., 4400 Computer Drive, Westborough,
Massachusetts 01581, serves as the Funds' Distributor. Bankers Trust Company, 16
Wall Street, New York, New York 10005, serves as the Custodian of the Funds'
assets. Chicago Trust serves as the Funds' Administrator. First Data Investor
Services Group, Inc., 53 State Street, Boston, Massachusetts 02109, serves as
the Funds' Sub-Administrator. First Data Investor Services Group, Inc., 4400
Computer Drive, Westborough, Massachusetts 01581, serves as the Funds' Transfer
Agent.
EXPENSE INFORMATION
Shareowner Transaction Expenses for the Fund:
Maximum Sales Load Imposed on Purchases................................. None
Maximum Sales Load Imposed on Reinvested Dividends...................... None
Maximum Deferred Sales Load............................................. None
Redemption Fees......................................................... None
Exchange Fees........................................................... None
If you want to redeem shares by wire transfer, the Funds' Transfer Agent
charges a fee, currently $20.00, for each wire redemption. Institutions may
independently charge fees for shareowner transactions or for advisory services;
please see their materials for details.
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Estimated Annual Fund Operating Expenses as a Percentage of Average Net Assets:
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Net Expense Ratio
Investment Other After Advisors'
Advisory Fees Expenses Voluntary Fee Waivers
After Voluntary 12b-1 After Voluntary and Reimbursement (1)
FUND (1) Fee Waivers Fees Reimbursements (2)
--------- ----------- ---- ------------------
Alleghany/Chicago Trust 0.60% 0.25% 0.55% 1.40%
SmallCap Value Fund
Alleghany/Veredus 0.60% 0.25% 0.55% 1.40%
Aggressive Growth Fund
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(1) The above table reflects the investment advisors' voluntary undertakings to
waive investment advisory fees and/or reimburse each Fund expenses exceeding the
limits shown. Absent such fee waivers and reimbursement of expenses, the
estimated investment advisory fees, other expenses, and total operating
expenses, respectively, would be as follows: 1.00%, 0.25%, and 0.55% for the
Alleghany/Chicago Trust SmallCap Value Fund and 1.00%, 0.25%, and 0.55% for
Alleghany/Veredus Aggressive Growth Fund.
(2) Other expenses for each Fund are based on estimated amounts for the current
fiscal year.
Long-term shareowners may pay more than the economic equivalent of the
maximum front-end sales charges permitted by the National Association of
Securities Dealers, Inc.
EXAMPLE:
Based on the level of estimated expenses listed above after waivers and
reimbursements, the total expenses relating to an investment of $1,000 would be
as follows, assuming a 5% annual return and redemption at the end of each time
period.
Name of Fund 1 Year 3 Years
- ------------ ------ -------
Alleghany/Chicago Trust SmallCap Value Fund $14 $41
Alleghany/Veredus Aggressive Growth Fund $14 $41
The foregoing tables are designed to assist the investor in
understanding the various costs and expenses that a shareowner will bear
directly or indirectly. While the example assumes a 5% annual return, each
Funds' actual performance will vary and may result in actual returns greater or
less than 5%. The example should not be considered a representation of past or
future expenses and actual expenses may be greater or less than those shown.
Performance Measures
From time to time, the Funds may advertise performance measures as set
forth under "PERFORMANCE OF THE FUNDS." Performance measures are based on
historical earnings and are not intended to indicate future performance.
Portfolio Turnover
The portfolio turnover rate for each of the Funds is calculated by
dividing the lesser of purchases or sales of portfolio investments for the
reporting period by the monthly average value of the portfolio investments owned
during the reporting period. The calculation excludes all securities, including
options, whose maturities or expiration dates at the time of acquisition are one
year or less. Portfolio turnover may vary greatly from year to year as well as
within a particular year, and may be affected by cash requirements for
redemption of units and by requirements which enable the Funds to receive
favorable tax treatment. The Alleghany/Chicago Trust SmallCap Value Fund is
expected to have portfolio turnover below 150%. In any event, portfolio turnover
is not expected to exceed 200% in the Alleghany/Chicago Trust SmallCap Value
Fund and 300% in the Alleghany/Veredus Aggressive Growth Fund. A high rate of
portfolio turnover (i.e., over 100%) may result in the realization of
substantial capital gains and involves correspondingly greater transaction
costs.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Fund is fundamental and may not be
changed without a vote of the holders of the majority of the voting securities
of the Fund. Unless otherwise stated in this Prospectus or the Statement of
Additional Information, each Fund's investment policies are not fundamental and
may be changed without shareowner approval. While a non-fundamental policy or
restriction may be changed by the Trustees of the Company without shareowner
approval, the Funds intend to notify shareowners before making any change in any
such policy or restriction. Fundamental policies may not be changed without
shareowner approval.
The Funds strive to attain their investment objectives, but there can,
of course, be no assurance that they will do so. Please refer to the policies
and risk disclosures more fully described under "INVESTMENT STRATEGIES AND RISK
CONSIDERATIONS." Additional investment policies and restrictions are described
in the Statement of Additional Information.
ALLEGHANY/CHICAGO TRUST SMALLCAP VALUE FUND
Alleghany/Chicago Trust SmallCap Value Fund seeks long-term total
return through investment primarily in common stocks of small companies, based
on revenues and/or market capitalization, domiciled in the United States which
Chicago Trust believes offer exceptional relative value and attractive prices.
The Fund's total return will likely be primarily composed of capital
appreciation. The Fund will be invested primarily in equities listed on stock
exchanges or traded in over-the-counter markets in the U.S.
Except for defensive or liquidity purposes, the Fund will invest
substantially all (at least 65%) of its assets in small companies or real estate
investment trusts ("REIT's") domiciled in the U.S. which have market
capitalization (based on aggregate market value of outstanding shares) between
$50 million and $1 billion at the time of investment. Chicago Trust will seek
companies with strong cash flow, good credit, low price to earnings ratio and
good or improving balance sheets. The remainder of its assets (no more than 35%)
may be invested in securities of companies with market capitalizations below $50
million, above $1 billion at the time of investment; and/or in cash and
equivalent securities. The Fund does not currently intend to invest in
securities which, at the time of purchase, are not readily marketable or in
futures or options contracts. The Fund will not engage in short-selling
activities, leverage or portfolio hedging techniques. At any time Chicago Trust
deems it advisable for temporary defensive or liquidity purposes, the Fund may
hold all or a portion of its assets in cash or cash equivalents and invest in,
or hold unlimited amounts of, debt obligations of the United States Government
or its political subdivisions, and money market instruments including repurchase
agreements with maturities of seven days or less and certificates of deposit.
Special Considerations
An investor should be aware that investment in small capitalization
issuers carries more risk than issuers with market capitalization greater than
$1 billion. Generally, small companies rely on limited product lines, financial
resources, and business activities that may make them more susceptible to
setbacks or downturns. In addition, the stock of such companies may be more
thinly traded. As a result, in order to sell this type of security the Fund may
need to dispose of such securities over a long period and accordingly, the
performance of small capitalization issuers may be more volatile.
Please refer to the policies and risk disclosures, as well as the other
specified practices below with respect to the Fund in "INVESTMENT STRATEGIES AND
RISK CONSIDERATIONS."
ALLEGHANY/VEREDUS AGGRESSIVE GROWTH FUND
Alleghany/Veredus Aggressive Growth Fund seeks to provide capital
appreciation through investment primarily in equity securities of companies
whose earnings are growing at an accelerating rate. Typically, the companies
that the Fund invests in will exhibit expanding unit volume growth, new product
development and expanding profit margins. Such companies often experience
increased earnings expectations from the investment community. Veredus will
focus primarily on small capitalization (market capitalization of $1 billion or
less) and mid-size capitalization ($1 to $4 billion market capitalization)
companies.
Veredus generally plans to stay fully invested (subject to liquidity
requirements) in equity securities. The Fund may also invest in U.S. Government
securities of any duration, and may engage in certain option transactions and
investment techniques described below. For temporary defensive purposes under
abnormal market or economic conditions, the Fund may hold all or a portion of
its assets in money market instruments, securities of no-load money market funds
or U.S. Government repurchase agreements. The Fund may also invest in such
instruments at any time to maintain liquidity or pending selection of
investments in accordance with its policies. If the Fund acquires securities of
another investment company, the shareholders of the Fund will be subject to
additional management fees.
By investing primarily in small and mid-size capitalization companies,
the Fund will be subject to the risks associated with such companies. Smaller
capitalization companies may experience higher growth rates and higher failure
rates than do larger capitalization companies. Companies in which the Fund is
likely to invest may have limited product lines, markets or financial resources
and may lack management depth. The trading volume of securities of smaller
capitalization companies is normally less than that of larger capitalization
companies, and, therefore, may disproportionately affect their market price,
tending to make them rise more in response to buying demand and fall more in
response to selling pressure than is the case with larger capitalization
companies.
The Fund may invest in equity securities which consist of common stock,
warrants, rights, preferred stock and common stock equivalents (such as
convertible preferred stock and convertible debentures). Common stocks, the most
familiar type, represent an equity (ownership) interest in a corporation.
Warrants are options to purchase equity securities at a specified price for a
specific time period. Rights are similar to warrants, but normally have a short
duration and are distributed by the issuer to its shareholders. Although equity
securities have a history of long-term growth in value, their prices fluctuate
based on changes in a company's financial condition and on overall market and
economic conditions. The Fund will not invest more than 5% of its net assets in
preferred stock or common stock equivalents.
The Fund may invest up to 20% of its net assets in foreign equity
securities by purchasing American Depositary Receipts ("ADRs") and European
Depositary Receipts ("EDRs"). ADRs and EDRs are dollar-denominated receipts that
are generally issued in registered form by domestic banks, and represent the
deposit with the bank of a security of a foreign issuer. To the extent that the
Fund does invest in foreign securities, such investments may be subject to
special risks, such as changes in restrictions on foreign currency transactions
and rates of exchange, and changes in the administrations or economic and
monetary policies of foreign governments.
Please refer to the policies and risk disclosures, as well as the other
specified practices below with respect to the Fund in "INVESTMENT STRATEGIES AND
RISK CONSIDERATIONS."
INVESTMENT STRATEGIES AND RISK CONSIDERATIONS
In General
Shareowners should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in the
Funds, nor can there be any assurance that the Funds' investment objectives will
be attained. Unless otherwise indicated, all percentage limitations governing
the investments of the Funds apply only at the time of transaction. Accordingly,
if a percentage restriction is adhered to at the time of investment, a later
increase or decrease in the percentage represented by such investment which
results from a relative change in values or from a change in a Fund's total
assets will not be considered a violation.
Government Obligations
Each Fund may invest in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities to the extent described above.
Obligations of certain agencies and instrumentalities of the U.S. Government,
such as Ginnie Mae (formerly known as the Government National Mortgage
Association) ("GNMA"), are supported by the full faith and credit of the U.S.
Treasury; others, such as those of Federal Home Loan Banks, are supported by the
right of the issuer to borrow from the Treasury; others, such as those of the
Federal National Mortgage Association ("FNMA"), are supported by the
discretionary authority of the U.S. Government to purchase the agency's
obligations; still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the instrumentality. No
assurance can be given that the U.S. Government would provide financial support
to U.S. Government-sponsored instrumentalities if it is not obligated to do so
by law. Some Government obligations may be issued as variable or floating-rate
instruments.
Securities issued or guaranteed by the U.S. Government, its agencies
and instrumentalities have historically involved little risk of loss of
principal. However, due to fluctuations in interest rates, the market value of
such securities may vary during the period of time the shareowner owns shares of
the Funds.
Money Market Securities
Each Fund may invest in money market securities, including bank
obligations and commercial paper. Bank obligations may include bankers'
acceptances, negotiable certificates of deposit, and non-negotiable time
deposits earning a specified return, issued for a definite period of time by a
U.S. bank that is a member of the Federal Reserve System or is insured by the
Federal Deposit Insurance Corporation, or by a savings and loan association or
savings bank that is insured by the Federal Deposit Insurance Corporation. Bank
obligations also include U.S. dollar-denominated obligations of foreign branches
of U.S. banks or of U.S. branches of foreign banks, all of the same type as
domestic bank obligations. Investments in bank obligations are limited to the
obligations of financial institutions having more than $1 billion in total
assets at the time of purchase.
Domestic and foreign banks are subject to extensive but different
government regulations which may limit the amount and types of their loans and
the interest rates that may be charged. In addition, the profitability of the
banking industry is largely dependent upon the availability and cost of funds to
finance lending operations and the quality of underlying bank assets.
Investments in obligations of foreign branches of U.S. banks and of
U.S. branches of foreign banks may subject a Fund to additional investment
risks, including future political and economic developments, the possible
imposition of withholding taxes on interest income, possible seizure or
nationalization of foreign deposits, the possible establishment of exchange
controls, or the adoption of other foreign governmental restrictions which might
adversely affect the payment of principal and interest on such obligations. In
addition, foreign branches of U.S. banks and U.S. branches of foreign banks may
be subject to less stringent reserve requirements and to different accounting,
auditing, reporting, and record keeping standards than those applicable to
domestic branches of U.S. banks. Investments in the obligations of U.S. branches
of foreign banks or foreign branches of U.S. banks will be made only when the
investment advisor believes that the credit risk with respect to the investment
is minimal.
Commercial paper may include variable and floating-rate instruments,
which are unsecured instruments that permit the interest on indebtedness
thereunder to vary. Variable-rate instruments provide for periodic adjustments
in the interest rate. Floating-rate instruments provide for automatic adjustment
of the interest rate whenever some other specified interest rate changes. Some
variable and floating-rate obligations are direct lending arrangements between
the purchaser and the issuer and there may be no active secondary market.
However, in the case of variable and floating-rate obligations with the demand
feature, a Fund may demand payment of principal and accrued interest at a time
specified in the instrument or may resell the instrument to a third party. In
the event an issuer of a variable or floating-rate obligation defaulted on its
payment obligation, a Fund might be unable to dispose of the note because of the
absence of a secondary market and could, for this or other reasons, suffer a
loss to the extent of the default. Substantial holdings of variable and
floating-rate instruments could reduce portfolio liquidity.
Borrowing
Each Fund may not borrow money or issue senior securities, except as
described in this paragraph. Each Fund may borrow from banks or enter into
reverse repurchase agreements for temporary purposes in amounts up to 10% of the
value of its total assets. The Funds may not mortgage, pledge, or hypothecate
assets, except that each Fund may mortgage, pledge, or hypothecate assets in
connection with any such borrowing and in amounts not in excess of the lesser of
the dollar amounts borrowed or 10% of the value of the total assets of the Fund.
A Fund will not purchase securities while its borrowings (including reverse
repurchase agreements) exceed 5% of its total assets. A Fund may borrow money as
a temporary measure for extraordinary purposes or to facilitate redemptions.
Neither Fund will borrow money in excess of 25% of the value of its total
assets. The Funds have no intention of increasing their net income through
borrowing. Any borrowing will be done from a bank with the required asset
coverage of at least 300%. In the event that such asset coverage shall at any
time fall below 300%, a Fund shall, within three days thereafter (not including
Sundays or holidays) or such longer period as the Securities and Exchange
Commission ("SEC") may prescribe by rules and regulations, reduce the amount of
its borrowings to such an extent that the asset coverage of such borrowings
shall be at least 300%.
Illiquid Securities
Each Fund may invest up to 15% of their respective net assets in
securities which are illiquid. Illiquid securities will generally include, but
are not limited to: repurchase agreements and time deposits with
notice/termination dates in excess of seven days; unlisted over-the-counter
options; interest rate, currency and mortgage swap agreements; interest rate
caps, floors and collars; and certain securities which are subject to trading
restrictions because they are not registered under the Securities Act of 1933
(the "1933 Act").
Repurchase Agreements
Each Fund may enter into repurchase agreements pursuant to which a Fund
purchases portfolio assets from a bank or broker-dealer concurrently with an
agreement by the seller to repurchase the same assets from the Fund at a later
date at a fixed price. Repurchase agreements are considered, under the 1940 Act,
to be collateralized loans by a Fund to the seller secured by the securities
transferred to the Fund. Repurchase agreements will be fully collateralized by
securities in which the Fund may invest directly. Such collateral will be
marked-to-market daily. If the seller of the underlying security under the
repurchase agreement should default on its obligation to repurchase the
underlying security, a Fund may experience delay or difficulty in exercising its
right to realize upon the security and, in addition, may incur a loss if the
value of the security should decline, as well as disposition costs in
liquidating the security. A Fund must treat each repurchase agreement as a
security for tax diversification purposes and not as cash, a cash equivalent or
receivable.
Reverse Repurchase Agreements
Each Fund may enter into reverse repurchase agreements with banks and
broker-dealers. Reverse repurchase agreements involve sales by a Fund of
portfolio assets concurrently with an agreement by that Fund to repurchase the
same assets at a later date at a fixed price. During the reverse repurchase
agreement period, a Fund continues to receive principal and interest payments on
these securities. During the time a reverse repurchase agreement is outstanding,
a Fund will maintain a segregated custodial account consisting of cash or liquid
securities having a value at least equal to the resale price. Reverse repurchase
agreements are considered to be borrowings by a Fund, and as such are subject to
the investment limitations discussed above under the sub-section titled
"Borrowing."
Rule 144A Securities
Each Fund may purchase securities which are not registered under the
1933 Act but which can be sold to "qualified institutional buyers" in accordance
with Rule 144A under the 1933 Act. Any such security will not be considered
illiquid so long as it is determined by the investment advisor under guidelines
approved by the Company's Board of Trustees, that an adequate trading market
exists for that security. This investment practice could have the effect of
increasing the level of illiquidity in a Fund during any period that qualified
institutional buyers become uninterested in purchasing these restricted
securities.
Securities of Other Investment Companies
Each Fund may invest in securities issued by other investment companies
which invest in securities in which the particular Fund is permitted to invest
and which determine their net asset value per share based on the amortized cost
or penny-rounding method. In addition, each Fund may invest in securities of
other investment companies within the limits prescribed by the 1940 Act, which
include limits to its investments in securities issued by other investment
companies so that, as determined immediately after a purchase of such securities
is made: (i) not more than 5% of the value of the Fund's total assets will be
invested in the securities of any one investment company; (ii) not more than 10%
of its total assets will be invested in the aggregate in securities of
investment companies as a group; and (iii) not more than 3% of the outstanding
voting stock of any one investment company will be owned by the Fund or Funds as
a whole. Each Fund is subject to additional limitations in these purchases as
described under "INVESTMENT RESTRICTIONS" in the Statement of Additional
Information. As a shareowner of another investment company, a Fund would bear,
along with other shareowners, its pro rata portion of such investment company's
expenses, including advisory fees. These expenses would be in addition to the
advisory and other expenses that a Fund bears directly in connection with its
own operations.
Short-Term Trading
Each Fund may engage in short-term trading. Securities may be sold in
anticipation of a market decline or purchased in anticipation of a market rise
and later sold. In addition, a security may be sold and another purchased at
approximately the same time to take advantage of what a Fund believes to be a
temporary disparity in the normal yield relationship between the two securities.
Such trading may be expected to increase a Fund's portfolio turnover rate and
the expenses incurred in connection with such trading.
Foreign Securities
Alleghany/Veredus Aggressive Growth Fund may invest in foreign equity
securities by purchasing ADRs and EDRs. U.S. dollar-denominated ADRs, which are
traded in the United States on exchanges or over-the-counter, are issued by
domestic banks. ADRs represent the right to receive securities of foreign
issuers deposited in a domestic bank or a correspondent bank. ADRs do not
eliminate the risk inherent in investing in the securities of foreign issuers.
However, by investing in ADRs rather than directly in stock of foreign issuers,
a Fund can avoid currency risks during the settlement period for either
purchases or sales. In general, there is a large, liquid market in the United
States for many ADRs. The information available for ADRs is subject to the
accounting, auditing and financial reporting standards of the domestic market or
exchange on which they are traded, which standards are more uniform and more
exacting than those to which many foreign issuers may be subject. EDRs are
receipts evidencing an arrangement with a European bank similar to that for ADRs
and are designed for use in the European securities markets.
Certain ADRs and EDRs, typically those denominated as unsponsored,
require the holders thereof to bear most of the costs of such facilities while
issuers of sponsored facilities normally pay more of the costs thereof. The
depositary of an unsponsored facility frequently is under no obligation to
distribute shareowner communications received from the issuer of the deposited
securities or to pass through the voting rights to facility holders in respect
to the deposited securities, whereas the depositary of a sponsored facility
typically distributes shareowner communications and passes through the voting
rights.
Derivative Investments
The term "derivatives" has been used to identify a range and variety of
financial instruments. In general, a derivative is commonly defined as a
financial instrument whose performance and value are derived, at least in part,
from another source, such as the performance of an underlying asset, or a
specific security, or an index of securities. As is the case with other types of
investments, a Fund's derivative instruments may entail various types and
degrees of risk, depending upon the characteristics of a derivative instrument
and the Fund's overall portfolio.
A Fund permitted the use of derivatives may engage in such practices
for hedging purposes, or to maintain liquidity, or in anticipation of changes in
the composition of its portfolio holdings. No Fund will engage in derivative
investments purely for speculative purposes. A Fund will invest in one or more
derivatives only to the extent that the instrument under consideration is judged
by the investment advisor to be consistent with the Fund's overall investment
objective and policies. In making such judgment, the potential benefits and
risks will be considered in relation to the Fund's other portfolio investments.
Where not specified, investment limitations with respect to a Fund's
derivative instruments will be consistent with such Fund's existing percentage
limitations with respect to its overall investment policies and restrictions.
While not a fundamental policy, the total of all instruments deemed derivative
in nature by the investment advisor will generally not exceed 20% of total
assets for a Fund; however, as this policy is not fundamental, it may be changed
from time to time when deemed appropriate by the Board of Trustees. Listed
below, including risks and policies with respect thereto, are the types of
securities in which certain Funds are permitted to invest which are considered
by the Investment Advisor to be derivative in nature.
1. Options:
Alleghany/Veredus Aggressive Growth Fund, may engage in options,
including those described below.
A call option enables the purchaser, in return for the premium paid, to
purchase securities from the writer of the option at an agreed price up to an
agreed date. The advantage is that the purchaser may hedge against an increase
in the price of securities it ultimately wishes to buy or may take advantage of
a rise in a particular index. A Fund will only purchase call options to the
extent premiums paid on all outstanding call options do not exceed [20%] of such
Funds' total assets. A Fund will only sell or write call options on a covered
basis (e.g. on securities it holds in its portfolio).
A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period, and the writer of the option has the
obligation to purchase the security from the purchaser of the option. The
advantage is that the purchaser can be protected should the market value of the
security decline or should a particular index decline. A Fund will only purchase
put options to the extent that the premiums on all outstanding put options do
not exceed [20%] of a Funds' total assets. A Fund will only purchase put options
on a covered basis and write put options on a secured basis. Cash or other
collateral will be held in a segregated account for such options. A Fund will
receive premium income from writing put options, although it may be required,
when the put is exercised, to purchase securities at higher prices than the
current market price. At the time of purchase, a Fund will receive premium
income from writing call options, which may offset the cost of purchasing put
options and may also contribute to a Fund's total return. A Fund may lose
potential market appreciation if the judgment of its investment advisor is
incorrect with respect to interest rates, security prices or the movement of
indices.
An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive cash from the seller equal to
the difference between the closing price of the index and the exercise price of
the option.
Closing transactions essentially let a Fund offset put options or call
options prior to exercise or expiration. If a Fund cannot effect a closing
transaction, it may have to hold a security it would otherwise sell or deliver a
security it might want to hold.
A Fund may use options traded on U.S. exchanges, and to the extent
permitted by law, options traded over-the-counter. It is the position of the SEC
that over-the-counter options are illiquid. Accordingly, a Fund will invest in
such options only to the extent consistent with its 15% limit on investments in
illiquid securities. Please see "General Risk Factors" below and refer to the
Statement of Additional Information for a more detailed discussion of the
applicable risk considerations.
2. Forward Commitments, When-Issued Securities, and Delayed-Delivery
Transactions:
Alleghany/Veredus Aggressive Growth Fund, may purchase or sell
securities on a when-issued or delayed-delivery basis and make contracts to
purchase or sell securities for a fixed price at a future date beyond customary
settlement time. Securities purchased or sold on a when-issued,
delayed-delivery, or forward commitment basis involve a risk of loss if the
value of the security to be purchased declines prior to the settlement date.
Although a Fund would generally purchase securities on a when-issued,
delayed-delivery, or forward commitment basis with the intention of acquiring
the securities, a Fund may dispose of such securities prior to settlement if its
investment advisor deems it appropriate to do so. Please see "General Risk
Factors" below and refer to the Statement of Additional Information for a more
detailed discussion of the applicable risk considerations.
<PAGE>
General Risk Factors
Options and Forward Contracts:
The primary risks associated with the use of options are: (i) imperfect
correlation between the change in market value of the securities held by a Fund
and the price of options; (ii) losses, which are potentially unlimited, due to
unanticipated market movements; and (iii) the investment advisor's inability to
predict correctly the direction of security prices, interest rates and other
economic factors. For a further discussion, see "INVESTMENT POLICIES AND RISK
CONSIDERATIONS" in the Statement of Additional Information.
MANAGEMENT OF THE FUNDS
The Board of Trustees
Under Delaware law, the business and affairs of the Company are managed
under the direction of the Board of Trustees. The Statement of Additional
Information contains the name of each Trustee and background information
regarding the Trustees.
The Chicago Trust Company
Chicago Trust provides investment advisory services to
Alleghany/Chicago Trust SmallCap Value Fund. Pursuant to an Investment Advisory
Agreement with the Company, Chicago Trust provides an investment program for the
Fund in accordance with its investment policies, limitations and restrictions,
and furnishes executive, administrative and clerical services required for the
transaction of the Fund's business.
Chicago Trust managed approximately $8.5 billion in assets at June 30,
1998 consisting primarily of pension and profit sharing accounts, and accounts
of high net worth individuals, families and insurance companies. Chicago Trust,
an Illinois corporation, is an indirect and wholly-owned subsidiary of Alleghany
Corporation. Alleghany Corporation, located at Park Avenue Plaza, New York City,
New York 10055, is engaged through its subsidiaries in the business of title
insurance, reinsurance, other financial services and industrial minerals.
For providing investment advisory services, the Fund has agreed to pay
Chicago Trust a monthly fee at an annual rate, exclusive of voluntary fee
waivers, based on its average daily net assets of 1.00%.
Chicago Trust has voluntarily undertaken to reduce its advisory fee and
to reimburse the Fund for operating expenses in excess of 1.40%. Such fee
reimbursement may be terminated or reduced at the discretion of Chicago Trust.
Operating expenses for fee waiver/expense reimbursement purposes do not include
interest, taxes, brokerage charges, litigation or extraordinary items.
Veredus Asset Management LLC
The Investment Advisor for Alleghany/Veredus Aggressive Growth Fund, a
registered investment advisor located at 6900 Bowling Blvd., Suite 250,
Louisville, KY 40207. Veredus was founded in ____ and is an indirect,
wholly-owned subsidiary of Alleghany Corporation.
Veredus provides investment advisory services to Alleghany/Veredus
Aggressive Growth Fund. Pursuant to an Investment Advisory Agreement with the
Company, Veredus provides an investment program for the Fund in accordance with
its investment policies, limitations and restrictions, and furnishes executive,
administrative and clerical services required for the transaction of the Fund's
business.
Veredus managed approximately $66 million in assets at June 30, 1998.
For providing investment advisory services, the Fund has agreed to pay
Veredus a monthly fee at an annual rate, exclusive of voluntary fee waivers,
based on its average daily net assets of 1.00%.
Veredus has voluntarily undertaken to reduce its advisory fee and to
reimburse the Fund for operating expenses in excess of 1.40%. Such fee
reimbursement may be terminated or reduced at the discretion of Veredus.
Operating expenses for fee waiver/expense reimbursement purposes do not include
interest, taxes, brokerage charges, litigation or extraordinary items.
PORTFOLIO MANAGEMENT METHODS
Investment Management Teams
Investment decisions for Alleghany/Chicago Trust SmallCap Value Fund
are made by an investment management team at Chicago Trust. The team is headed
by Patricia A. Falkowski, the portfolio manager of the Fund. Ms. Falkowski has
served as President and Chief Investment Officer of Fiduciary Management
Associates, Inc. since 1993.
Investment decisions for Alleghany/Veredus Aggressive Growth Fund are made
by B. Anthony Weber, the portfolio manager of the Fund. B. Anthony Weber has
served as President of Veredus since June 1998. Prior to June 1998, he was the
President of SMC Capital, Inc., another registered investment adviser. Mr. Weber
is responsible for the day-to-day management of the Fund's portfolio. He has
managed equity accounts at SMC Capital, Inc. from the time of its founding in
1993 to the present.
The Chicago Trust Company
The performance objective of Alleghany/Chicago Trust SmallCap Value Fund is
to produce returns above the Russell 2000 Index over the long-term. Stock
selection is the critical component of the equity philosophy. The Fund's overall
approach to investing in small capitalization value stocks is based upon
research performed by its investment advisor which shows that extremely
undervalued companies offer potential for high returns over time and excellent
diversification versus other domestic equity investment styles. This strategy
may under-emphasize widely followed, institutional favorites and result in
holdings of stocks with little "Wall Street" or outside research coverage.
Advantages of investing in distressed and/or neglected issues based on internal,
fundamental research include:
low valuations that offer some downside protection;
lack of institutional ownership that results in return streams
not highly correlated with market indices;
potential for upside surprises that is increased as stocks exceed
minimal expectations and are "discovered" by other investors; and
low transaction costs based solely on best execution rather than
research commitments.
The companies in which the Fund intends to invest will generally have the
following characteristics:
a market capitalization of less than $1 billion;
a low relative ratio of price to book value per share;
a positive or improving cash flow and other measures of financial
strength; and
a low stock price relative to historical levels.
By following these criteria, the Fund intends to select securities
which can have enhanced appreciation prospects and may provide investment
returns superior to the market as a whole. However, the market value of these
companies' securities tends to be volatile and in the past offered greater
potential for gain as well as loss than securities of larger capitalization
companies.
A key component of the equity process is the sell discipline. Chicago
Trust looks for sale candidates when one or more of the following criteria
exist: (i) deteriorating company fundamentals; (ii) the stock no longer meets
our purchase criteria; (iii) the stock grows by 25% in stock market value in a
short time; and (iv) the price target has been achieved.
The Fund will commence operations on or about November ___, 1998 and
therefore has no operating history. The investment objectives, policies and
strategies of the Alleghany/Chicago Trust SmallCap Value Fund are substantially
similar in all material aspects to the UAM FMA Small Company Portfolio, which
has been managed by Ms. Patricia A. Falkowski. Ms. Falkowski became a managing
director at Chicago Trust on August 24, 1998. She manages the investment program
of the Alleghany/Chicago Trust SmallCap Value Fund and is primarily responsible
for the day-to-day management of the Fund's portfolio. Ms. Falkowski had been
chief investment officer of Fiduciary Management Associates, Inc. since 1992 and
president since 1993. In that capacity Ms. Falkowski was the portfolio manager
for the UAM FMA Small Company Portfolio with full discretionary authority
over the selection of investments for that fund from July 1992 through August
1998. The UAM FMA Small Company Portfolio Institutional Class Shares had net
assets of $182.7 million as of June 30, 1998. Average annual returns for the
one-year, three-year, five-year, and since July 1, 1992 periods ended
June 30, 1998 compared with the performance of the Russell 2000 Index were:
UAM FMA Small Company Portfolio (1), Russell 2000 Index
(2) (3)
-------------------------------------- -----------------------------------
One Year 23.14% 16.50%
Three Years 25.62 18.86
Five Years 19.19 16.05
Since July 1, 1992 (4) 21.97 17.65
(1) Average annual total return reflects changes in share prices and
reinvestment of dividends and distributions and is net of fund
expenses.
(2) The expense ratio of UAM FMA Small Company Portfolio was capped at 1.03%
from July 1, 1992 through June 30, 1998. The expense ratio of the
Alleghany/Chicago Trust SmallCap Value Fund will be capped at 1.40%
beginning at its inception. The returns shown have been restated to reflect
an expense ratio of 1.40% (consistent with the expected expense cap of the
Alleghany/Chicago Trust SmallCap Value Fund).
(3) The Russell 2000 Index is a widely recognized, unmanaged index of common
stocks of the 2,000 smallest companies in the Russell 3000 Index. The
Russell 3000 Index is comprised of the 3,000 largest U.S. companies based
on total market capitalization. Each Index is adjusted to reflect
reinvestment of dividends.
(4) The inception date of the UAM FMA Small Company Portfolio was July 31,
1991. Ms. Falkowski began managing the Fund in July of 1992.
Historical performance is not indicative of future performance. The UAM FMA
Small Company Portfolio is a separate fund and its historical performance
is not indicative of the potential performance of the Alleghany/Chicago
Trust SmallCap Value Fund. Share prices and investment returns will
fluctuate reflecting market conditions, as well as changes in
company-specific fundamentals of portfolio securities.
Veredus Asset Management LLC
B. Anthony Weber, President of Veredus, is primarily responsible for
the day-to-day management of the Fund. Prior to forming Veredus in 1998, Mr.
Weber was President and Senior Portfolio Manager of SMC Capital, Inc. (from its
inception in 1993). Prior to that date, he was the portfolio manager primarily
responsible for management of certain accounts, including three common trust
funds, of Shelby County Trust Bank (from July 1, 1989). The performance
information presented below is the performance of a composite of those equity
accounts for which Mr. Weber was primarily responsible for the day-to-day
management (since July 1, 1989) which have investment objectives, policies and
strategies substantially similar to those of the Fund. As of December 31, 1997,
the assets in those accounts totaled approximately $36 million. The composite
does not include performance of The Shelby Fund, a mutual fund for which Mr.
Weber was co-manager.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Managed Accounts S&P 500 Index Russell 2000 Index
---------------- ------------- ------------------
1998* 18.66% 17.71% 4.93%
1997 4.82 33.36 22.36
1996 14.44 22.96 16.50
1995 39.67 37.59 28.44
1994 2.46 1.32 -1.82
1993 14.70 10.08 18.91
1992 32.98 7.64 18.41
1991 42.80 30.48 46.05
1990 -1.04 -3.12 -19.51
1989** 11.67 12.99 1.47
Average Annual Returns***
One Year 24.63% 30.16% 16.50%
Five Years 16.38 23.08 16.05
Since July 1, 1989 19.32 18.35 13.67
<FN>
* 1998 percentages represent the rates of return for the six month period ended June 30, 1998.
** 1989 percentages represent the rates of return for the six month period ended December 31, 1989.
*** Average Annual Returns for the periods ended June 30, 1998, using the
Performance Presentation Standards of the Association for Investment
Management and Research ("AIMR") calculation of performance (see below),
which differs from the standardized SEC calculation.
</FN>
</TABLE>
From July 1, 1989 through December 31, 1991, the performance information
is based on a quarterly, linked time-weighted rate of return calculation method.
Beginning January 1, 1992, the accounts within the composite allowed
participants to contribute on a monthly basis. Therefore, beginning January 1,
1992, the performance information is based on a monthly, liked, time-weighted
rate of return calculation method. The composite rate of return is
market-weighted, reflecting the relative size of each eligible account, at the
beginning of the relevant period. Performance figures reflected are net of
management fees and net of all expenses, including transaction costs and
commissions. Results include the reinvestment of dividends and capital gains.
The presentation of the performance composite complies with the AIMR. The AIMR
calculation of performance differs from the standardized SEC calculation.
The S&P 500 Index is a widely recognized, unmanaged index of market
activity based upon the aggregate performance of a selected portfolio of
publicly traded common stocks, including monthly adjustments to reflect the
reinvestment of dividends and other distributions. The Russell 2000 Index is a
widely recognized index of market activity based on the aggregate performance of
small to mid-sized publicly traded common stocks. Each Index reflects the total
return of securities comprising the Index, including changes in market prices as
well as accrued investment income, which is presumed to be reinvested.
Performance figures for each Index do not reflect deduction of transaction costs
or expenses, including management fees.
The investment objectives, policies and strategies of the Alleghany/Veredus
Aggressive Growth Fund are substantially similar to those of the managed
accounts. The performance of the accounts managed by Veredus does not represent
the historical performance of the Fund and should not be considered indicative
of future performance of the Fund. Results may differ because of, among other
things, differences in brokerage commissions, account expenses, including
management fees (the use of the Fund's expense structure would have lowered the
performance results), the size of positions taken in relation to account size
and diversification of securities, timing of purchases and sales, and
availability of cash for new investments. In addition, the managed accounts are
not subject to certain investment limitations, diversification requirements, and
other restrictions imposed by the Investment Company Act and the Internal
Revenue Code which, if applicable, may have adversely affected the performance
results of the managed accounts composite. The results for difference periods
may vary.
ADMINISTRATION OF THE FUNDS
The Administrator and Sub-Administrator
Chicago Trust (the "Administrator") acts as the Company's Administrator
pursuant to an Administration Agreement with the Company. For services provided
as Administrator, Chicago Trust receives a fee at the annual rate of: 0.060% of
the first $2 billion of average daily net aggregate assets of the Company;
0.045% of the average daily net assets between $2 billion and $3.5 billion and
0.040% of the average daily net assets in excess of $3.5 billion. Chicago Trust
also receives a custody liaison fee equal to an annual fee per Fund of $10,000
for average daily net assets up to $100 million, $15,000 for average daily net
assets between $100 million and $500 million, and $20,000 for average daily net
assets in excess of $500 million.
Pursuant to a Sub-Administration Agreement, First Data Investor
Services Group, Inc. (the "Sub-Administrator"), 53 State Street, Boston,
Massachusetts 02109, acts as Sub-Administrator and receives a fee from the
Administrator equal to that received by the Administrator as set out above. The
Sub-Administrator also receives a custody liaison fee from Chicago Trust equal
to that received by the Administrator as set out above.
The services provided to the Funds under these Agreements include:
coordinating and monitoring of any third parties furnishing services to the
Funds; providing the necessary office space, equipment and personnel to perform
administrative and clerical functions for the Funds; preparing, filing and
distributing proxy materials, periodic reports to shareowners, registration
statements and other documents; and responding to shareowner inquiries.
The Sub-Administrator also performs certain accounting and pricing
services for the Funds, including the daily calculation of the Funds' respective
net asset values.
The Transfer Agent
First Data Investor Services Group, Inc. (the "Transfer Agent"), 4400
Computer Drive, Westborough, Massachusetts 01581, performs the following duties
in its capacity as Transfer Agent to each Fund: maintains the records of each
shareowner's account; answers shareowner inquiries concerning accounts;
processes purchases and redemptions of Fund shares; acts as dividend and
distribution disbursing agent; and performs other shareowner service functions.
Shareowner inquiries should be addressed to the Transfer Agent at (800)
992-8151.
The Distributor
First Data Distributors, Inc. (the "Distributor"), 4400 Computer Drive,
Westborough, Massachusetts 01581, is the principal underwriter and distributor
of the Funds pursuant to a distribution agreement with the Company.
The Custodian
Bankers Trust Company (the "Custodian"), 16 Wall Street, New York, New
York 10005, is Custodian for the cash and securities of each Fund.
Expenses
Expenses attributable to the Company, but not to a particular Fund,
will be allocated to each Fund thereof on the basis of relative net assets.
Similarly, expenses attributable to a particular Fund, but not to a particular
class thereof, will be allocated to each class thereof on the basis of relative
net assets. General Company expenses may include but are not limited to:
insurance premiums; Trustee fees; expenses of maintaining the Company's legal
existence; and fees of industry organizations. General Fund expenses may include
but are not limited to: audit fees; brokerage commissions; registration of Fund
shares with the SEC and notification fees to the various state securities
commissions; fees of the Funds' Custodian, Administrator, Sub-Administrator and
Transfer Agent or other "service providers"; costs of obtaining quotations of
portfolio securities; and pricing of Fund shares.
Class-specific expenses relating to distribution fee payments
associated with a Rule 12b-1 plan for a particular class of shares and any other
costs relating to implementing or amending such plan (including obtaining
shareowner approval of such plan or any amendment thereto) will be borne solely
by shareowners of such class or classes. Other expense allocations which may
differ among classes, or which are determined by the Trustees to be
class-specific, may include but are not limited to: printing and postage
expenses related to preparing and distributing required documents such as
shareowner reports, prospectuses, and proxy statements to current shareowners of
a specific class; SEC registration fees and state "blue sky" fees incurred by a
specific class; litigation or other legal expenses relating to a specific class;
expenses incurred as a result of issues relating to a specific class; and
different transfer agency fees attributable to a specific class.
Notwithstanding the foregoing, the investment advisor or other service
providers may waive or reimburse the expenses of a specific class or classes to
the extent permitted under Rule 18f-3 under the 1940 Act.
PURCHASE OF SHARES
In General
Shares of each Fund may be purchased directly from the Fund at the net
asset value next determined after receipt of the order in proper form. Shares of
the Funds may be purchased through broker-dealers, banks and trust departments
which may charge the investor a transaction fee or other fee for their services
at time of purchase. Such fees would not otherwise be charged if the shares were
purchased directly from the Funds.
The minimum initial investment for regular accounts (other than IRAs
and UGMAs) is $2,500 for each Fund, and the minimum subsequent investment is
$50, except for accounts opened through a fund network. In such case, the
minimums of the fund network will apply. The minimum initial investment for IRAs
and UGMAs is $500, and the minimum subsequent investment for IRAs and UGMAs is
$50. The minimum initial and subsequent investment for those enrolled in the
Automatic Investment Plan is $50. There is no sales load or charge in connection
with the purchase of shares. The Company reserves the right to reject any
purchase order and to suspend the offering of shares of any Fund. Each Fund also
reserves the right to vary the initial and additional investment minimums, or to
waive the minimum investment requirements for any investor.
Purchase orders for shares of a Fund which are received by the Transfer
Agent or an authorized broker or its designee in proper form, including money
order, check or bank draft by the regular closing time of the New York Stock
Exchange ("NYSE") (currently 4:00 p.m. Eastern time) will be purchased at such
Fund's net asset value determined that day. If you invest by check, or
non-federal funds wire, allow one business day after receipt for conversion into
federal funds. Checks must be made payable to "Alleghany Funds." If you wire
money in the form of federal funds, your money will be invested at the share
price next determined after receipt of the wire. Orders for shares received in
proper form after 4:00 p.m. will be priced at the net asset value determined on
the next day that the NYSE is open for trading.
Each Fund may accept telephone orders from broker-dealers or service
organizations which have been previously approved by a Fund. It is the
responsibility of such broker-dealers or service organizations or their
authorized designees to promptly forward purchase orders and payments for same
to the Company.
Purchases may be made in one of the following ways:
Initial Purchases by Mail
Shares of each Fund may be purchased initially by completing the
application accompanying this Prospectus and mailing it to the Transfer Agent,
together with a check payable to "Alleghany Funds", c/o First Data Investor
Services Group, Inc., P.O. Box 5164, Westborough, Massachusetts 01581. The Funds
will not accept third party checks for the purchase of shares. Third party
checks are those that are made out to someone other than a Fund and are endorsed
over to the Fund.
<PAGE>
Initial Purchases by Wire
An investor desiring to purchase shares of a Fund by wire should call
the Transfer Agent first at (800) 992-8151 and request an account number and
furnish the Fund with your tax identification number. Following such
notification to the Transfer Agent, federal funds and registration instructions
should be wired through the Federal Reserve System to:
BOSTON SAFE DEPOSIT & TRUST
ABA # 011001234
FOR: Alleghany Funds
A/C 140414
FBO "FUND NUMBER"
"SHAREOWNER ACCOUNT NUMBER"
A completed application with original signature(s) of registrant(s)
must be filed with the Transfer Agent immediately subsequent to the initial
wire. Investors should be aware that some banks may impose a wire service fee.
Subsequent Investments
Once an account has been opened, subsequent purchases in the minimum
amounts may be made by mail, bank wire, exchange or by telephone. When making
additional investments by mail, simply return the investment slip from a
previous confirmation or statement with your investment in the envelope
provided. Your check must be made payable to "Alleghany Funds" and mailed to the
Alleghany Funds, P.O. Box 5163, Westborough, Massachusetts 01581. The Funds will
not accept third party checks for the subsequent purchase of shares.
All investments must be made in U.S. dollars, and, to avoid fees and
delays, checks must be drawn only on banks located in the U.S. In order to help
ensure the receipt of good funds, the Company reserves the right to delay
sending your redemption proceeds up to 15 days if you purchased shares by check.
A charge ($20 minimum) will be imposed if any check used for the purchase of
shares is returned. The Funds and the Transfer Agent reserve the right to reject
any purchase order in whole or in part.
EXCHANGE OF SHARES
In General
Shares of any of the Funds within the Company may be exchanged for shares
of the same class of any of the other Funds within the Company. The Company
currently consists of the following Funds: Alleghany/Chicago Trust SmallCap
Value Fund, Alleghany/Veredus Aggressive Growth Fund, Montag & Caldwell Growth
Fund, Chicago Trust Growth & Income Fund, Chicago Trust Talon Fund, Chicago
Trust Balanced Fund, Montag & Caldwell Balanced Fund, Chicago Trust Bond Fund,
Chicago Trust Municipal Bond Fund, and Chicago Trust Money Market Fund.
The exchange privilege is a convenient way to respond to changes in
your investment goals or in market conditions. This privilege is not designed
for frequent trading in response to short-term market fluctuations. You may make
exchanges by mail or by telephone if you have previously elected the telephone
authorization privilege on the application form. The telephone exchange
privilege may be difficult to implement during times of drastic economic or
market changes. The purchase of shares of a Fund through an exchange transaction
is accepted at the net asset value next determined. You should keep in mind that
for tax purposes, an exchange is treated as a redemption and a new purchase,
each at net asset value of the appropriate Fund. The Funds and the Transfer
Agent reserve the right to limit, amend, impose charges upon, terminate or
otherwise modify the exchange privilege on prior written notice to shareowners.
Exchanges may be made only for shares of a Fund then offering its
shares for sale in your state of residence and are subject to the minimum
initial investment requirement. Requests for telephone exchanges must be
received by the Transfer Agent by the close of regular trading on the NYSE
(currently 4:00 p.m. Eastern time) on any day that the NYSE is open for regular
trading.
REDEMPTION OF SHARES
In General
Shares of each Fund may be redeemed without charge on any business day
that the NYSE is open for business. Redemptions will be effective at the net
asset value per share next determined after the receipt by the Transfer Agent of
a redemption request meeting the requirements described below. Each Fund
normally sends redemption proceeds on the next business day, but in any event
redemption proceeds are sent within seven calendar days of receipt of a
redemption request in proper form. However, your redemption proceeds may be
delayed up to 15 days if you purchased the shares to be redeemed by check until
such check has cleared. Payment may also be made by wire directly to any bank
previously designated by the shareowner in a shareowner account application. A
shareowner will be charged $20 for redemptions by wire. Also, please note that
the shareowner's bank may impose a fee for this wire service.
If your account is an Individual Retirement Account (IRA), your
redemption request must be submitted in writing. Please call a customer service
representative at (800-992-8151) to request an IRA Distribution Request form or
for further information.
Except as noted below, redemption requests received in proper form by
the Transfer Agent or an authorized broker or its designee prior to the close of
regular trading hours on the NYSE on any business day that the Fund calculates
its per share net asset value are effective that day.
Redemption requests received after the close of the NYSE are effective
as of the time the net asset value per share is next determined. No redemption
will be processed until the Transfer Agent has received a completed application
with respect to the account.
The Funds will satisfy redemption requests in cash to the fullest
extent feasible, so long as such payments would not, in the opinion of the Board
of Trustees, result in the necessity of a Fund selling assets under
disadvantageous conditions or to the detriment of the remaining shareowners of
the Fund. Pursuant to the Company's Trust Instrument, payment for shares
redeemed may be made either in cash or in-kind, or partly in cash and partly
in-kind. However, the Company has elected pursuant to Rule 18f-1 under the 1940
Act to redeem its shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of the Fund, during any ninety-day period for any one
shareowner. Payments in excess of this limit by any of the Funds will also be
made wholly in cash unless the Board of Trustees believes that economic
conditions exist which would make such a practice detrimental to the best
interests of any such Fund. Any portfolio securities paid or distributed in-kind
would be valued as described under "NET ASSET VALUE." In the event that an
in-kind distribution is made, a shareowner may incur additional expenses, such
as the payment of brokerage commissions, on the sale or other disposition of the
securities received from a Fund. In-kind payments need not constitute a
cross-section of the Fund's portfolio.
Minimum Balances
Due to the relatively high cost of maintaining smaller accounts, the
Funds reserve the right to involuntarily redeem shares in any account for its
then current net asset value (which will be promptly paid to the shareowner) if
at any time the total investment does not have a value of at least $50. The
shareowner will be notified that the value of his or her account is less than
the required minimum and will be allowed at least sixty days to bring the value
of the account up to the minimum before the redemption is processed.
Shares may be redeemed in one of the following ways:
Redemptions by Mail
Shareowners may submit a written request for redemption to: Alleghany
Funds, P.O. Box 5164, Westborough, Massachusetts 01581. The request must be in
good order which means that it must: (i) identify the shareowner's account name
and account number; (ii) state the fund name, (iii) state the number of shares
to be redeemed; and (iv) be signed by each registered owner exactly as the
shares are registered.
To prevent fraudulent redemptions, a signature guarantee for the
signature of each person in whose name the account is registered is required on
all written redemption requests over $50,000. A guarantee may be obtained from
any commercial bank, trust company, savings and loan association, federal
savings bank, a member firm of a national securities exchange or other eligible
financial institution. Credit unions must be authorized to issue signature
guarantees; notary public endorsements will not be accepted. The Transfer Agent
may require additional supporting documents for redemptions made by
corporations, executors, administrators, trustees, guardians, and retirement
plans.
A redemption request will not be deemed to be properly received until the
Transfer Agent receives all required documents in proper form. Questions with
respect to the proper form for redemption requests should be directed to the
Transfer Agent at (800) 992-8151.
Redemptions by Telephone
Shareowners who have so indicated on the application, or have
subsequently arranged in writing to do so, may redeem shares by instructing the
Transfer Agent by telephone at (800) 992-8151.
In order to arrange for redemption by wire or telephone after an
account has been opened, or to change the bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent at the
address listed under "Redemptions by Mail" above. Such requests must be signed
by the shareowner, with signatures guaranteed (see "Redemptions by Mail" for
details regarding signature guarantees). Further documentation may be requested
from corporations, executors, administrators, trustees, or guardians.
The Funds reserve the right to refuse a wire or telephone redemption if
it is believed advisable to do so. Procedures for redeeming Fund shares by wire
or telephone may be modified or terminated at any time by any of the Funds.
Neither the Funds nor any of their service contractors will be liable for any
loss or expense in acting upon telephone instructions that are reasonably
believed to be genuine. In attempting to confirm that telephone instructions are
genuine, the Funds will use such procedures as are considered reasonable,
including requesting a shareowner to correctly state his or her Fund account
number, the name in which his or her account is registered, his or her social
security number, banking institution, bank account number, and the name in which
his or her bank account is registered.
Shares of the Funds may be redeemed through certain broker-dealers, banks
and bank trust departments who may charge the investor a transaction fee or
other fee for their services at the time of redemption. Such fees would not
otherwise be charged if the shares were redeemed from the Company.
ACCOUNT OPTIONS
In General
The following special services are available to shareowners. There are
no charges for the programs noted below and an investor may change or stop these
plans at any time by written notice to the Funds.
Automatic Investment Plan
This service allows you to make regular investments once your account
is established. You simply authorize the automatic withdrawal of funds from your
bank account into the Fund of your choice. The minimum initial and subsequent
investment pursuant to this plan is $50 per month. Your initial account must be
established prior to participating in this plan. Please complete the appropriate
section on the new account application enclosed with this Prospectus.
Systematic Withdrawal Program
The Funds offers a Systematic Withdrawal Program as another option
which may be utilized by an investor who wishes to withdraw funds from his or
her account on a regular basis. To participate in this option, an investor must
either own or purchase shares having a value of $50,000 or more. Automatic
payments by check will be mailed to the investor on either a monthly, quarterly,
semi-annual, or annual basis in amounts of $50 or more. All withdrawals are
processed on the 25th of the month or, if such day is not a business day, on the
next business day and paid promptly thereafter.
Individual Retirement Accounts
An Individual Retirement Account (IRA) is a custodial account created
for the exclusive benefit of you and your beneficiaries. There are many types of
IRAs available including Individual, Spousal, Rollover, SEP-IRA, SIMPLE-IRA,
Roth-Contributory and Roth-Conversion. Because income generated from an IRA is
tax-deferred.
The annual maintenance fee for an IRA is $15.00 per year. This fee will
be paid through an automatic liquidation of shares from your account each
December. You may choose to pay this fee prior to December by sending in a
check. Shareowners with a cumulative balance of $50,000 or more will have IRA
fees waived.
DISTRIBUTION PLAN
The Board of Trustees of the Company has adopted a Plan of Distribution
(the "Plan") pursuant to Rule 12b-1 under the 1940 Act which permits the Class N
shares of each Fund to pay certain expenses associated with the distribution of
its shares. Under the Plan, each Fund may reimburse the Distributor for actual
expenses not exceeding, on an annual basis, 0.25% of a Fund's average daily net
assets.
The Plan authorizes a Fund to compensate the Distributor for the
following: (1) services rendered by the Distributor pursuant to the Distribution
Agreement between the Company and the Distributor; (2) payments the Distributor
makes to financial institutions and industry professionals, such as insurance
companies, investment counselors, accountants, estate planning firms and
broker-dealers, including Chicago Trust and its affiliates and subsidiaries,
Talon Securities, Inc. and the affiliates and subsidiaries of the Distributor
(collectively, "Participating Organizations"), in consideration for distribution
services provided or expenses assumed in connection with distribution
assistance, market research, and promotional services, including, but not
limited to, printing and distributing prospectuses to persons other than current
shareowners of a Fund, printing and distributing advertising and sales
literature and reports to shareowners and prospective shareowners used in
connection with the sale of a Fund's shares, and personnel and communication
equipment used in servicing shareowner accounts and prospective shareowner
inquiries; and (3) payments the Distributor makes to Participating Organizations
pursuant to an agreement to provide administrative support services to the
holders of a Fund's shares. Participating Organizations that are compensated for
distribution services may be required to register as dealers in certain
jurisdictions.
Payments for market research and promotional services may be based in
whole or in part on a percentage of the regular salary expense for those
employees of Participating Organizations engaged in marketing research and
promotional services specifically relating to the distribution of Fund shares
based on the amount of time devoted by such employees to such activities, and
any out-of-pocket expenses associated with the distribution of Fund shares.
All such payments made by a Fund pursuant to the Plan shall be made for
the purpose of selling shares issued by the Fund. Distribution expenses which
are attributable to a particular Fund will be charged against that Fund's
assets. Distribution expenses which are attributable to more than one Fund will
be allocated among the Funds in proportion to their relative net assets.
NET ASSET VALUE
The net asset value per share of each Fund is computed as of the close
of regular trading on the NYSE on each day the NYSE is open for trading. The
NYSE is closed on New Year's Day, Martin Luther King Jr.'s Birthday, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
The net asset value per share is computed by adding the value of all
securities and other assets in the portfolio, deducting any liabilities
(expenses and fees are accrued daily) and dividing by the number of shares
outstanding. The portfolio securities of each Fund listed or traded on a stock
exchange are valued at the latest sale price. If no sale price is reported, the
mean of the latest bid and asked prices is used. Securities traded
over-the-counter are priced at the mean of the latest bid and asked prices. When
market quotations are not readily available, securities and other assets are
valued at fair value as determined in good faith by the Board of Trustees.
Bonds are valued through valuations obtained from a commercial pricing
service or at the mean of the most recent bid and asked prices provided by
investment dealers in accordance with procedures established by the Board of
Trustees. Options, futures and options on futures are valued at the settlement
price as determined by the appropriate clearing corporation.
DIVIDENDS AND TAXES
Dividends
Dividends, if any, from net investment income will be declared and paid
quarterly by each Fund. Aggregate net profits realized from the sale of
portfolio securities, if any, are distributed at least once each year unless
they are used to offset losses carried forward from prior years, in which case
no such gain will be distributed.
Income dividends and capital gain distributions are reinvested
automatically in additional shares at net asset value, unless you elect to
receive them in cash. Distribution options may be changed at any time by
requesting a change in writing. Any check in payment of dividends or other
distributions which cannot be delivered by the Post Office or which remains
uncashed for a period of more than one year may be reinvested in the
shareowner's account at the then current net asset value and the dividend option
may be changed from cash to reinvest. Dividends are reinvested on the
ex-dividend date (the "ex-date") at the net asset value determined at the close
of business on that date. Please note that shares purchased shortly before the
record date for a dividend or distribution may have the effect of returning
capital although such dividends and distributions are subject to taxes.
Taxes
Each Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code ("the Code"). Such qualification
relieves a Fund of liability for Federal income taxes to the extent the Fund's
earnings are distributed in accordance with the Code. Each Fund is treated as a
separate corporate entity for Federal tax purposes. Distributions of any net
investment income and of any net realized short-term capital gains are taxable
to shareowners as ordinary income. Distributions of net capital gain (the excess
of net long-term capital gain over net short-term capital loss) are taxable to
shareowners as long-term capital gain regardless of how long a shareowner may
have held shares of a Fund. The tax treatment of distributions of ordinary
income or capital gains will be the same whether the shareowner reinvests the
distributions or elects to receive them in cash. A distribution will be treated
as paid on December 31 of the current calendar year if it is declared in
October, November or December with a record date in such a month and paid during
January of the following calendar year. Such distributions will be taxable to
shareowners in the calendar year in which the distributions are declared, rather
than the calendar year in which the distributions are received.
Shareowners will be advised annually of the source and tax status of
all distributions for Federal income tax purposes. Dividends and distributions
may be subject to state and local income taxes. Further information regarding
the tax consequences of investing in the Funds is included in the Statement of
Additional Information. The above discussion is intended for general information
only. Investors should consult their own tax advisors for more specific
information on the tax consequences of particular types of distributions.
Redemptions of Fund shares, and the exchange of shares between Funds of
the Company, are taxable events and, accordingly, shareowners may realize
capital gains or losses on these transactions.
Shareowners may be subject to back-up withholding on reportable
dividend and redemption payments ("back-up withholding") if a certified taxpayer
identification number is not on file with the Fund, or if, to the Fund's
knowledge, an incorrect number has been furnished. An individual's taxpayer
identification number is his/her social security number.
<PAGE>
PERFORMANCE OF THE FUNDS
In General
Performance, whether it be "total return" or "average annual total
return" of a Fund, may be advertised to present or prospective shareowners. The
figures are based on historical performance and should not be considered
representative of future results. The value of an investment in a Fund will
fluctuate and an investor's shares, when redeemed, may be worth more or less
than their original cost. Performance information for a Fund may be compared to
various unmanaged indices such as the Dow Jones Industrial Average and the S&P
500, and to the performance of other mutual funds tracked by mutual fund rating
services. Further information about the performance of the Funds is included in
the Statement of Additional Information, which may be obtained without charge by
contacting the Fund at (800) 992-8151.
Total Return
Total Return is defined as the change in value of an investment in a
Fund over a particular period, assuming that all distributions have been
reinvested. Thus, total return reflects not only income earned, but also
variations in share prices at the beginning and end of the period. Average
annual total return is determined by computing the annual compound return over a
stated period of time that would have produced a Fund's cumulative total return
over the same period if the Fund's performance had remained constant throughout.
GENERAL INFORMATION
Organization
Each Fund is a separate, diversified, series of the Company, a Delaware
business trust organized pursuant to a Trust Instrument dated September 10,
1993. The Company is registered under the 1940 Act as an open-end management
investment company, commonly known as a mutual fund. The Trustees of the Company
may establish additional series or classes of shares without the approval of
shareowners. The assets of each series belong only to that series, and the
liabilities of each series are borne solely by that series and no other.
Description of Shares
Each Fund is authorized to issue an unlimited number of shares of
beneficial interest without par value. Currently, there is only one class of
shares issued by each Fund which is Class N shares for retail investors. Shares
of each Fund represent equal proportionate interests in the assets of that Fund
only and have identical voting, dividend, redemption, liquidation, and other
rights. All shares issued are fully paid and non-assessable, and shareowners
have no preemptive or other right to subscribe to any additional shares and no
conversion rights. For more information about other Company funds and their
respective class or classes, please call (800) 992-8151.
Voting Rights
Each issued and outstanding full and fractional share of a Fund is
entitled to one full and fractional vote in the Fund. Shares of a Fund
participate equally in regard to dividends, distributions, and liquidations with
respect to that Fund subject to preferences (such as Rule 12b-1 distribution
fees), rights or privileges of any share class. Shareowners have equal
non-cumulative voting rights. Class N shares have exclusive voting rights with
respect to the distribution plan. On any matter submitted to a vote of
shareowners, shares of each Fund will vote separately except when a vote of
shareowners in the aggregate is required by law, or when the Trustees have
determined that the matter affects the interests of more than one Fund, in which
case the shareowners of all such Funds shall be entitled to vote thereon.
Shareowner Meetings
The Trustees of the Company do not intend to hold annual meetings of
shareowners of the Funds. The Trustees have undertaken to the SEC, however, that
they will promptly call a meeting for the purpose of voting upon the question of
removal of any Trustee when requested to do so by not less than 10% of the
outstanding shareowners of the Funds. In addition, subject to certain
conditions, shareowners of the Funds may apply to the Company to communicate
with other shareowners to request a shareowners' meeting to vote upon the
removal of a Trustee or Trustees.
Certain Provisions of Trust Instrument
Under Delaware law, the shareowners of the Funds will not be personally
liable for the obligations of any Fund; a shareowner is entitled to the same
limitation of personal liability extended to shareowners of corporations. To
guard against the risk that the Delaware law might not be applied in other
states, the Trust Instrument requires that every written obligation of the
Company or a Fund contain a statement that such obligation may only be enforced
against the assets of the Company or Fund and provides for indemnification out
of Company or Fund property of any shareowner nevertheless held personally
liable for Company or Fund obligations.
Portfolio Transactions and Brokerage Commissions
The Company will attempt to obtain the best overall price and most
favorable execution of transactions in portfolio securities. However, subject to
policies established by the Board of Trustees of the Company, a Fund may pay a
broker-dealer a commission for effecting a portfolio transaction for a Fund in
excess of the amount of commission another broker-dealer would have charged if
Chicago Trust determines in good faith that the commission paid was reasonable
in relation to the brokerage or research services provided by such
broker-dealer, viewed in terms of that particular transaction or such firm's
overall responsibilities with respect to the clients, including the Fund, as to
which it exercises investment discretion. In selecting and monitoring
broker-dealers and negotiating commissions, consideration will be given to a
broker-dealer's reliability, the quality of its execution services on a
continuing basis and its financial condition.
Subject to the foregoing considerations, preference may be given in
executing portfolio transactions for a Fund to brokers which have sold shares of
that Fund. Any such transactions, however, will comply with Rule 17e-1 under the
1940 Act.
Shareowner Reports and Inquiries
Shareowners will receive Semi-Annual Reports showing portfolio
investments and other information as of April 30 and Annual Reports audited by
independent accountants as of October 31. Shareowners with inquiries should call
the Company at (800) 992-8151 or write to Alleghany Funds, P.O. Box 5164,
Westborough, Massachusetts 01581.
<PAGE>
APPENDIX
Debt Ratings
Moody's Investors Service, Inc. describes classifications of corporate bonds as
follows:
"Aaa" -- These bonds are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
"Aa" -- These bonds are judged to be of high quality by all standards. Together
with the "Aaa" group they comprise what are generally known as high-grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in "Aaa" securities or fluctuation of protective elements may be
of greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in "Aaa" securities.
"A" -- These bonds possess many favorable investment attributes and are to be
considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.
"Baa" -- These bonds are considered as medium-grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
"Ba" -- These bonds are judged to have speculative elements; their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.
"B" -- These bonds generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
"Caa" -- These bonds are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
"Ca" -- These bonds represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.
"C" -- These bonds are the lowest-rated class of bonds and issues so rated can
be regarded as having extremely poor prospects of ever attaining any real
investment standing.
Moody's may modify a rating of "Aa", "A" or "Baa" by adding numerical modifiers
1, 2, 3 to show relative standing within these categories.
Standard & Poor's Corporation describes classifications of corporate and
municipal debt as follows:
"AAA" -- This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay interest and repay
principal.
"AA" -- These bonds also qualify as high-quality debt obligations. Their
capacity to pay interest and repay principal is very strong, and differs from
the "AAA" issues only in small degree.
"A" -- These bonds have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
"BBB" -- These bonds are regarded as having an adequate capacity to pay interest
and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in the higher rated categories.
"BB", "B", "CCC", "CC", or "C" -- These bonds are regarded as having
predominantly speculative characteristics with respect to the issuer's capacity
to pay interest and repay principal. "BB" indicates the lowest degree of
speculation and "C" the highest degree of speculation. While such bonds will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major exposures to adverse conditions. Debt rated "BB"
has less near-term vulnerability to default than other speculative issues.
However, it faces major ongoing uncertainties or exposure to adverse business,
financial or economic conditions which could lead to inadequate capacity to meet
timely interest and principal payments. The "BB" rating category is also used
for debt subordinated to senior debt that is assigned an actual or implied
"BBB-" rating. Debt rated "B" has a greater vulnerability to default but
currently has the capacity to meet interest payments and principal repayments.
Debt rated "CCC" has a currently identifiable vulnerability to default, and is
dependent upon favorable business, financial and economic conditions to meet
timely payments of interest and repayment of principal. The rating "CC" is
typically applied to debt subordinated to senior debt which is assigned an
actual or implied "CCC" rating. The rating "C" is typically applied to debt
subordinated to senior debt which is assigned an actual or implied "CCC-" debt
rating.
"CI" -- This rating is reserved for income bonds on which no interest is being
paid.
"D" -- Debt is in default, and payment of interest and/or repayment of principal
is in arrears.
PLUS (+) OR MINUS (-) -- The ratings from "AA" through "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
<PAGE>
INVESTMENT ADVISOR
The Chicago Trust Company
171 North Clark Street
Chicago, IL 60601-3294
Veredus Asset Management LLC
6900 Bowling Blvd., Suite 250
Louisville, KY 40207
ADMINISTRATOR
The Chicago Trust Company
171 North Clark Street
Chicago, IL 60601-3294
CUSTODIAN
Bankers Trust Company
16 Wall Street
New York, NY 10005
For Additional Information about Alleghany Funds, call:
(800) 992-8151
<PAGE>
ALLEGHANY FUNDS
Montag & Caldwell Growth Fund-
Chicago Trust Growth & Income Fund
Chicago Trust Talon Fund
Chicago Trust Balanced Fund
Montag & Caldwell Balanced Fund
Chicago Trust Bond Fund
Chicago Trust Municipal Bond Fund
Chicago Trust Money Market Fund
Alleghany/Chicago Trust SmallCap Value Fund
Alleghany/Veredus Aggressive Growth Fund
STATEMENT OF ADDITIONAL INFORMATION
________________, 1998
This Statement of Additional Information provides supplementary information
pertaining to shares representing interests in ten investment portfolios of
Alleghany Funds (formerly known as the "CT&T Funds") (the "Company"): Montag &
Caldwell Growth Fund; Chicago Trust Growth & Income Fund; Chicago Trust Talon
Fund; Chicago Trust Balanced Fund (formerly known as "Chicago Trust Asset
Allocation Fund"); Montag & Caldwell Balanced Fund; Chicago Trust Bond Fund;
Chicago Trust Municipal Bond Fund; Chicago Trust Money Market Fund;
Alleghany/Chicago Trust SmallCap Value Fund; and Alleghany/Veredus Aggressive
Growth Fund. Each Fund offers Class N shares for retail investors and Montag &
Caldwell Growth Fund also offers Class I shares for institutional investors.
This Statement of Additional Information is not a Prospectus, and
should be read only in conjunction with the Prospectus for the Montag & Caldwell
Growth Fund; Chicago Trust Growth & Income Fund; Chicago Trust Talon Fund;
Chicago Trust Balanced Fund; Montag & Caldwell Balanced Fund; Chicago Trust Bond
Fund; Chicago Trust Municipal Bond Fund and Chicago Trust Money Market Fund
dated February 27, 1998 or the Prospectus for Alleghany/Chicago Trust SmallCap
Value Fund and Alleghany/Veredus Aggressive Growth Fund dated _____________,
1998 (the "Prospectus"). No investment in shares should be made without first
reading the Prospectus. A copy of the Prospectus may be obtained without charge
from the Company at the address and telephone number below.
Alleghany Funds: Investment Advisor to Certain Funds:
171 North Clark Street THE CHICAGO TRUST COMPANY
Chicago, IL 60601 171 North Clark Street
(800) 992-8151 Chicago, IL 60601
Investment Advisor to Certain Funds:
MONTAG & CALDWELL, INC.
1100 Atlanta Financial Center
3343 Peachtree Road, NE
Atlanta, GA 30326-1450
Investment Advisor to Certain Funds:
VEREDUS ASSET MANAGEMENT LLC
6900 Bowling Blvd., Suite 250
Louisville, KY 40207
No person has been authorized to give any information or to make any
representations not contained in this Statement of Additional Information or in
the Prospectus in connection with the offering made by the Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Company or its distributor. The Prospectus does
not constitute an offering by the Company or by the distributor in any
jurisdiction in which such offering may not lawfully be made.
<PAGE>
TABLE OF CONTENTS
Page
THE FUNDS 3
INVESTMENT POLICIES AND RISK CONSIDERATIONS 3
INVESTMENT RESTRICTIONS 15
TRUSTEES AND OFFICERS 16
PRINCIPAL HOLDERS OF SECURITIES 18
INVESTMENT ADVISORY AND OTHER SERVICES 21
Investment Advisory Agreements 21
Sub-Investment Advisory Agreement 23
The Administrator and Sub-Administrator 24
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS 25
TAXES 26
PERFORMANCE INFORMATION 28
OTHER INFORMATION 31
APPENDIX 32
The Annual Report Including Audited Financial Statements dated October 31, 1997
Montag & Caldwell Growth Fund
Chicago Trust Growth & Income Fund
Chicago Trust Talon Fund
Chicago Trust Balanced Fund
Montag & Caldwell Balanced Fund
Chicago Trust Bond Fund
Chicago Trust Municipal Bond Fund
Chicago Trust Money Market Fund
The Semi-Annual Report Including Unaudited Financial Statements
dated April 30, 1998
Montag & Caldwell Growth Fund
Chicago Trust Growth & Income Fund
Chicago Trust Talon Fund
Chicago Trust Balanced Fund
Montag & Caldwell Balanced Fund
Chicago Trust Bond Fund
Chicago Trust Municipal Bond Fund
Chicago Trust Money Market Fund
<PAGE>
THE FUNDS
Alleghany Funds, 171 North Clark Street, Chicago, Illinois 60601, is a
no-load, open-end management investment company which currently offers ten
series of shares of beneficial interest representing separate portfolios of
investments: Montag & Caldwell Growth Fund, Chicago Trust Growth & Income Fund,
Chicago Trust Talon Fund, Chicago Trust Balanced Fund, Montag & Caldwell
Balanced Fund, Chicago Trust Bond Fund, Chicago Trust Municipal Bond Fund,
Chicago Trust Money Market Fund, Alleghany/Chicago Trust SmallCap Value Fund,
and Alleghany/Veredus Aggressive Growth Fund (collectively referred to as
"Funds" or individually as a "Fund").
INVESTMENT POLICIES AND RISK CONSIDERATIONS
The following supplements the information contained in the Prospectus
concerning the investment policies of the Funds. Except as otherwise stated
below or in the Prospectus, all Funds may invest in the portfolio investments
included in this section. A description of applicable credit ratings is set
forth in the Appendix to the Prospectus.
The investment practices described below, except for the discussion of
portfolio loan transactions, are not fundamental and may be changed by the Board
of Trustees without the approval of the shareowners.
As discussed in the Prospectus, certain of the following investment
instruments are generally considered "derivative" in nature and are so noted.
While not a fundamental policy, each Fund that is permitted the use of such
instruments will generally limit its aggregate holdings of such instruments to
20% or less of its total assets.
RESTRICTED SECURITIES
Each Fund will limit investments in securities of issuers which the
Fund is restricted from selling to the public without registration under the
1933 Act to no more than 5% of the Fund's total assets, excluding restricted
securities eligible for resale pursuant to Rule 144A that have been determined
to be liquid by a Fund's Investment Advisor, pursuant to guidelines adopted by
the Company's Board of Trustees.
CONVERTIBLE SECURITIES
Common stock occupies the most junior position in a company's capital
structure. Convertible securities entitle the holder to exchange the securities
for a specified number of shares of common stock, usually of the same company,
at specified prices within a certain period of time and to receive interest or
dividends until the holder elects to convert. The provisions of any convertible
security determine its ranking in a company's capital structure. In the case of
subordinated convertible debentures, the holder's claims on assets and earnings
are subordinated to the claims of other creditors, and are senior to the claims
of preferred and common shareowners. In the case of preferred stock and
convertible preferred stock, the holder's claims on assets and earnings are
subordinated to the claims of all creditors but are senior to the claims of
common shareowners.
MONEY MARKET INSTRUMENTS AND RELATED RISKS
Money market instruments in which the Funds may invest include, but are
not limited to the following: short-term corporate obligations; Certificates of
Deposit ("CDs"); Eurodollar Certificates of Deposit ("Euro CDs"); Yankee
Certificates of Deposit ("Yankee CDs"); foreign bankers' acceptances; foreign
commercial paper; letter of credit-backed commercial paper; time deposits; loan
participations ("LPs"); variable- and floating-rate instruments; and master
demand notes.
Euro CDs, Yankee CDs and foreign bankers' acceptances involve risks
that are different from investments in securities of U.S. banks. The major risk,
which is sometimes referred to as "sovereign risk," pertains to possible future
unfavorable political and economic developments, possible withholding taxes,
seizures of foreign deposits, currency controls, interest limitations, or other
governmental restrictions which might affect payment of principal or interest.
Investment in foreign commercial paper also involves risks that are different
from investments in securities of commercial paper issued by U.S. companies.
Non-U.S. securities markets generally are not as developed or efficient as those
in the United States. Such securities may be less liquid and more volatile than
securities of comparable U.S. corporations. Non-U.S. issuers are not generally
subject to uniform accounting and financial reporting standards, practices and
requirements comparable to those applicable to U.S. issuers. In addition, there
may be less public information available about foreign banks, their branches and
other issuers.
Time deposits usually trade at a premium over Treasuries of the same
maturity. Investors regard such deposits as carrying some credit risk, which
Treasuries do not; also, investors regard time deposits as being sufficiently
less liquid than Treasuries; hence, investors demand some extra yield for buying
time deposits rather than Treasuries. The investor in a loan participation has a
dual credit risk to both the borrower and also the selling bank. The second risk
arises because it is the selling bank that collects interest and principal and
sends it to the investor.
Variable- and Floating-Rate Instruments and Related Risks
With respect to the variable- and floating-rate instruments that may be
acquired by Chicago Trust Balanced Fund, Montag & Caldwell Balanced Fund,
Chicago Trust Bond Fund and Chicago Trust Municipal Bond Fund, the Investment
Advisor will consider the earning power, cash flows and other liquidity ratios
of the issuers and guarantors of such instruments and, if the instruments are
subject to demand features, will monitor their financial status with respect to
the ability of the issuer to meet its obligation to make payment on demand.
Where necessary to ensure that a variable- or floating-rate instrument meets a
Fund's quality requirements, the issuer's obligation to pay the principal of the
instrument will be backed by an unconditional bank letter or line of credit,
guarantee, or commitment to lend.
Because variable and floating-rate instruments are direct lending
arrangements between the lender and the borrower, it is not contemplated that
such instruments will generally be traded, and there is generally no established
secondary market for these obligations, although they are redeemable at face
value. Accordingly, where these obligations are not secured by letters of credit
or other credit support arrangements, the Fund's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand.
The same credit research must be done for master demand notes as in
accepted names for potential commercial paper issuers to reduce the chances of a
borrower getting into serious financial difficulties.
Loans of Portfolio Securities and Related Risks
All Funds except Alleghany/Chicago Trust SmallCap Value Fund and
Alleghany/Veredus Aggressive Growth Fund may lend portfolio securities to
broker-dealers and financial institutions provided: (1) the loan is secured
continuously by collateral marked-to-market daily and maintained in an amount at
least equal to the current market value of the securities loaned; (2) a Fund may
call the loan at any time and receive the securities loaned; (3) a Fund will
receive any interest or dividends paid on the loaned securities; and (4) the
aggregate market value of securities loaned by a Fund will not at any time
exceed 25% of the total assets of such Fund.
Collateral will consist of U.S. Government securities, cash
equivalents, or irrevocable letters of credit. Loans of securities involve a
risk that the borrower may fail to return the securities or may fail to maintain
the proper amount of collateral. Therefore, a Fund will only enter into
portfolio loans after a review by the Investment Advisor, under the supervision
of the Board of Trustees, including a review of the creditworthiness of the
borrower. Such reviews will be monitored on an ongoing basis.
Loan Participations ("LPs")
All Funds may engage in LPs. LPs are loans sold by the lending bank to
an investor. The loan participant borrower may be a company with highly-rated
commercial paper that finds it can obtain cheaper funding through an LP than
with commercial paper and can also increase the company's name recognition in
the capital markets. LPs often generate greater yield than commercial paper.
The borrower of the underlying loan will be deemed to be the issuer
except to the extent the Fund derives its rights from the intermediary bank
which sold the LPs. Because LPs are undivided interests in a loan made by the
issuing bank, the Fund may not have the right to proceed against the LP borrower
without the consent of other holders of the LPs. In addition, LPs will be
treated as illiquid if, in the judgment of the Investment Advisor, they cannot
be sold within seven days.
Foreign Bankers' Acceptances
All Funds may purchase foreign bankers' acceptances, although Chicago
Trust Money Market Fund's purchases are limited by the quality standards of Rule
2a-7 under the Investment Company Act of 1940 (the "1940 Act"). Foreign bankers'
acceptances are short-term (270 days or less), non-interest-bearing notes sold
at a discount and redeemed by the accepting foreign bank at maturity for full
face value and denominated in U.S. dollars. Foreign bankers' acceptances are the
obligations of the foreign bank involved, to pay a draft drawn on it by a
customer. These instruments reflect the obligation both of the bank and the
drawer to pay the face amount of the instrument upon maturity.
Foreign Commercial Paper
All Funds may purchase foreign commercial paper, although Chicago Trust
Money Market Fund's purchases are limited by the quality standards of Rule 2a-7
under the 1940 Act. Foreign commercial paper consists of short-term unsecured
promissory notes denominated in U.S. dollars, either issued directly by a
foreign firm in the U.S., or issued by a "domestic shell" subsidiary of a
foreign firm established to raise dollars for the firm's operations abroad or
for its U.S. subsidiary. Like commercial paper issued by U.S. companies, foreign
commercial paper is rated by the rating agencies (Moody's, S&P) as to the
issuer's creditworthiness. Foreign commercial paper can potentially provide the
investor with a greater yield than domestic commercial paper.
Eurodollar Certificates of Deposit ("Euro CDs")
A Euro CD is a receipt from a bank for funds deposited at that bank for
a specific period of time at some specific rate of return and denominated in
U.S. dollars. It is the liability of a U.S. bank branch or foreign bank located
outside the U.S. Almost all Euro CDs are issued in London.
Yankee Certificates of Deposit ("Yankee CDs")
Yankee CDs are certificates of deposit that are issued domestically by
foreign banks. It is a means by which foreign banks may gain access to U.S.
markets through their branches which are located in the United States, typically
in New York. These CDs are treated as domestic securities.
Repurchase Agreements
The repurchase price under the repurchase agreements described in the
Prospectus generally equals the price paid by a Fund plus interest negotiated on
the basis of current short-term rates (which may be more or less than the rate
on the securities underlying the repurchase agreement). Repurchase agreements
may be considered loans by a Fund under the 1940 Act.
The financial institutions with which a Fund may enter into repurchase
agreements are banks and non-bank dealers of U.S. Government securities that are
listed on the Federal Reserve Bank of New York's list of reporting dealers and
banks, if such banks and non-bank dealers are deemed creditworthy by the
Investment Advisor or Sub-Investment Advisor. The Investment Advisor or
Sub-Investment Advisor will continue to monitor the creditworthiness of the
seller under a repurchase agreement, and will require the seller to maintain
during the term of the agreement the value of the securities subject to the
agreement at not less than the repurchase price.
Each Fund will only enter into a repurchase agreement where the market
value of the underlying security, including interest accrued, will be at all
times equal to or exceed the value of the repurchase agreement. The securities
held subject to a repurchase agreement by Chicago Trust Money Market Fund may
have stated maturities exceeding 13 months, provided the repurchase agreement
itself matures in less than 13 months.
Reverse Repurchase Agreements
Reverse repurchase agreements involve the sale of securities held by a
Fund pursuant to a Fund's agreement to repurchase the securities at an agreed
upon price, date and rate of interest. Such agreements are considered to be
borrowings under the 1940 Act, and may be entered into only for temporary or
emergency purposes. While reverse repurchase transactions are outstanding, a
Fund will maintain in a segregated account cash, or liquid, securities in an
amount at least equal to the market value of the securities, plus accrued
interest, subject to the agreement. (Liquid securities as used in the prospectus
and this Statement of Additional Information include equity securities and debt
securities that are unencumbered and market-to-market daily.) Reverse repurchase
agreements involve the risk that the market value of the securities sold by the
Fund may decline below the price at which the Fund is obligated to repurchase
such securities.
<PAGE>
Securities of Other Investment Companies
Each Fund intends to limit its investments in securities issued by
other investment companies so that, as determined immediately after a purchase
of such securities is made: (i) not more than 5% of the value of the Fund's
total assets will be invested in the securities of any one investment company;
(ii) not more than 10% of its total assets will be invested in the aggregate in
securities of investment companies as a group; and (iii) not more than 3% of the
outstanding voting stock of any one investment company will be owned by the Fund
as a whole. Each Fund will also limit investments in securities of other
investment companies as described in the Prospectus under "INVESTMENT STRATEGIES
AND RISK CONSIDERATIONS" and in this Statement of Additional Information under
"INVESTMENT RESTRICTIONS."
Lower-Grade Debt Securities and Related Risks
The following discussion applies to Chicago Trust Growth & Income Fund,
Chicago Trust Talon Fund, Chicago Trust Balanced Fund, Chicago Trust Bond Fund,
and Chicago Trust Municipal Bond Fund.
Fixed income securities rated lower than "Baa3" by Moody's or "BBB-" by
S&P are considered to be of poor standing and predominantly speculative. Such
securities are subject to a substantial degree of credit risk. Such medium- and
low-grade bonds held by a Fund may be issued as a consequence of corporate
restructurings, such as leveraged buy-outs, mergers, acquisitions, debt
recapitalizations; or similar events. Also, high-yield bonds are often issued by
smaller, less creditworthy companies or by highly leveraged firms, which are
generally less able than more financially stable firms to make scheduled
payments of interest and principal. The risks posed by bonds issued under such
circumstances are substantial.
In the past, the high yields from low-grade bonds have more than
compensated for the higher default rates on such securities. However, there can
be no assurance that diversification will protect the Fund from widespread bond
defaults brought about by a sustained economic downturn, or that yields will
continue to offset default rates on high-yield bonds in the future. Issuers of
these securities are often highly leveraged, so that their ability to service
their debt obligations during an economic downturn or during sustained periods
of rising interest rates may be impaired. In addition, such issuers may not have
more traditional methods of financing available to them, and may be unable to
repay debt at maturity by refinancing. Further, the recent economic recession
has resulted in default levels with respect to such securities in excess of
historic averages.
The value of lower-rated debt securities will be influenced not only by
changing interest rates, but also by the bond market's perception of credit
quality and the outlook for economic growth. When economic conditions appear to
be deteriorating, low- and medium-rated bonds may decline in market value due to
investors' heightened concern over credit quality, regardless of prevailing
interest rates. Adverse publicity and investor perceptions, whether or not based
on fundamental analysis, may decrease the value and liquidity of lower-rated
securities held by a Fund, especially in a thinly traded market. Illiquid or
restricted securities held by a Fund may involve valuation difficulties.
Especially at such times, trading in the secondary market for
high-yield bonds may become thin and market liquidity may be significantly
reduced. Even under normal conditions, the market for high-yield bonds may be
less liquid than the market for investment-grade corporate bonds. There are
fewer securities dealers in the high-yield market, and purchasers of high-yield
bonds are concentrated among a smaller group of securities dealers and
institutional investors. In periods of reduced market liquidity, high-yield bond
prices may become more volatile.
Youth and Growth of Lower-Rated Securities Market -- The recent growth
of the lower-rated securities market has paralleled a long economic expansion,
and it has not weathered a recession in the market's present size and form. An
economic downturn or increase in interest rates is likely to have an adverse
effect on the lower-rated securities market generally (resulting in more
defaults) and on the value of lower-rated securities contained in the portfolios
of the Funds which hold these securities.
Sensitivity to Interest Rate and Economic Changes -- The economy and
interest rates can affect lower-rated securities differently from other
securities. For example, the prices of lower-rated securities are more sensitive
to adverse economic changes or individual corporate developments than are the
prices of higher-rated investments. Also, during an economic downturn or
substantial period of rising interest rates, highly leveraged issuers may
experience financial stress which would adversely affect their ability to
service their principal and interest payment obligations, to meet projected
business goals, and to obtain additional financing. If the issuer of a
lower-rated security defaulted, a Fund may incur additional expenses to seek
recovery. In addition, periods of economic uncertainty and changes can be
expected to result in increased volatility of market prices of lower-rated
securities and a Fund's net asset values.
Liquidity and Valuation -- To the extent that an established secondary
market does not exist and a particular obligation is thinly traded, the
obligation's fair value may be difficult to determine because of the absence of
reliable, objective data. As a result, a Fund's valuation of the obligation and
the price it could obtain upon its disposition could differ. Adverse publicity
and investor perceptions, whether or not based on fundamental analysis, may
decrease the values and liquidity of lower-rated securities held by the Funds,
especially in a thinly traded market.
Credit Ratings -- The credit ratings of Moody's and S&P are evaluations
of the safety of principal and interest payments, not market value risk, of
lower-rated securities. Also, credit rating agencies may fail to timely change
the credit ratings to reflect subsequent events. Therefore, in addition to using
recognized rating agencies and other sources, the Investment Advisor or
Sub-Investment Advisor also performs its own analysis of issuers in selecting
investments for the Funds. The Investment Advisor's or Sub-Investment Advisor's
analysis of issuers may include, among other things, historic and current
financial condition, current and anticipated cash flow and borrowing strength of
management, responsiveness to business conditions, credit standing, and current
and anticipated results of operations.
Yields and Ratings -- The yields on certain obligations are dependent
on a variety of factors, including general market conditions, conditions in the
particular market for the obligation, the financial condition of the issuer, the
size of the offering, the maturity of the obligation and the ratings of the
issue. The ratings of Moody's and S&P represent their respective opinions as to
the quality of the obligations they undertake to rate. Ratings, however, are
general and are not absolute standards of quality. Consequently, obligations
with the same rating, maturity and interest rate may have different market
prices.
While any investment carries some risk, certain risks associated with
lower-rated securities are different from those for investment-grade securities.
The risk of loss through default is greater because lower-rated securities are
usually unsecured and are often subordinate to an issuer's other obligations.
Additionally, the issuers of these securities frequently have high debt levels
and are thus more sensitive to difficult economic conditions, individual
corporate developments, and rising interest rates. Consequently, the market
price of these securities may be quite volatile and may result in wider
fluctuations of a Fund's net asset value per share. A description of various
bond ratings appears in the Appendix to the Prospectus.
Options and Related Risks
All Funds except Chicago Trust Money Market Fund and Alleghany/Chicago
Trust SmallCap Value Fund may buy put and call options and write covered call
and secured put options. These options are generally considered to be derivative
securities. Such options may relate to particular securities, stock indices, or
financial instruments and may or may not be listed on a national securities
exchange and issued by the Options Clearing Corporation. Options trading is a
highly specialized activity which entails greater than ordinary investment risk.
Options on particular securities may be more volatile than the underlying
securities, and therefore, on a percentage basis, an investment in options may
be subject to greater fluctuation than an investment in the underlying
securities themselves.
These Funds will write call options only if they are "covered." In the
case of a call option on a security, the option is "covered" if a Fund owns the
security underlying the call or has an absolute and immediate right to acquire
that security without additional cash consideration (or, if additional cash
consideration is required, cash or liquid securities, in such amount are held in
a segregated account by its custodian) upon conversion or exchange of other
securities held by it. For a call option on an index, the option is covered if a
Fund maintains with its custodian a diversified stock portfolio, or liquid
assets equal to the contract value.
A call option is also covered if a Fund holds a call on the same
security or index as the call written where the exercise price of the call held
is (i) equal to or less than the exercise price of the call written; or (ii)
greater than the exercise price of the call written provided the difference is
maintained by the Fund in cash or liquid securities in a segregated account with
its custodian. The Funds will write put options only if they are "secured" by
liquid assets maintained in a segregated account by the Funds' Custodian in an
amount not less than the exercise price of the option at all times during the
option period.
A Fund's obligation to sell a security subject to a covered call option
written by it, or to purchase a security subject to a secured put option written
by it, may be terminated prior to the expiration date of the option by the
Fund's execution of a closing purchase transaction, which is effected by
purchasing on an exchange an option of the same series as the previously written
option. Such a purchase does not result in the ownership of an option. A closing
purchase transaction will ordinarily be effected to realize a profit on an
outstanding option, to prevent an underlying security from being called, to
permit the sale of the underlying security, or to permit the writing of a new
option containing different terms on such underlying security. The cost of such
a liquidation purchase plus transaction costs may be greater than the premium
received upon the original option, in which event the Fund will have incurred a
loss in the transaction.
There is no assurance that a liquid secondary market will exist for any
particular option. An option writer, unable to effect a closing purchase
transaction, will not be able to sell the underlying security (in the case of a
covered call option) or liquidate the segregated account (in the case of a
secured put option) until the option expires or the optioned security is
delivered upon exercise with the result that the writer in such circumstances
will be subject to the risk of market decline or appreciation in the security
during such period.
Purchasing Call Options -- Each of these Funds may purchase call
options to the extent that premiums paid by such Fund do not aggregate more than
20% of that Fund's total assets. When a Fund purchases a call option, in return
for a premium paid by the Fund to the writer of the option, the Fund obtains the
right to buy the security underlying the option at a specified exercise price at
any time during the term of the option. The writer of the call option, who
receives the premium upon writing the option, has the obligation, upon exercise
of the option, to deliver the underlying security against payment of the
exercise price. The advantage of purchasing call options is that a Fund may
alter portfolio characteristics and modify portfolio maturities without
incurring the cost associated with transactions, except the cost of the option.
A Fund may, following the purchase of a call option, liquidate its
position by effecting a closing sale transaction by selling an option of the
same series as the option previously purchased. The Fund will realize a profit
from a closing sale transaction if the price received on the transaction is more
than the premium paid to purchase the original call option; the Fund will
realize a loss from a closing sale transaction if the price received on the
transaction is less than the premium paid to purchase the original call option.
Although a Fund will generally purchase only those call options for
which there appears to be an active secondary market, there is no assurance that
a liquid secondary market on an Exchange will exist for any particular option,
or at any particular time, and for some options no secondary market on an
Exchange may exist. In such event, it may not be possible to effect closing
transactions in particular options, with the result that a Fund would have to
exercise its options in order to realize any profit and would incur brokerage
commissions upon the exercise of such options and upon the subsequent
disposition of the underlying securities acquired through the exercise of such
options. Further, unless the price of the underlying security changes
sufficiently, a call option purchased by a Fund may expire without any value to
the Fund, in which event the Fund would realize a capital loss which will be
short-term unless the option was held for more than one year.
Covered Call Writing -- Each of these Funds may write covered call
options from time to time on such portions of their portfolios, without limit,
as the Investment Advisor or Sub-Investment Advisor determines is appropriate in
pursuing a Fund's investment objective. The advantage to a Fund of writing
covered calls is that the Fund receives a premium which is additional income.
However, if the security rises in value, the Fund may not fully participate in
the market appreciation.
During the option period, a covered call option writer may be assigned
an exercise notice by the broker-dealer through whom such call option was sold,
requiring the writer to deliver the underlying security against payment of the
exercise price. This obligation is terminated upon the expiration of the option
or upon entering a closing purchase transaction. A closing purchase transaction,
in which a Fund, as writer of an option, terminates its obligation by purchasing
an option of the same series as the option previously written, cannot be
effected with respect to an option once the option writer has received an
exercise notice for such option.
Closing purchase transactions will ordinarily be effected to realize a
profit on an outstanding call option, to prevent an underlying security from
being called, to permit the sale of the underlying security or to enable a Fund
to write another call option on the underlying security with either a different
exercise price or expiration date or both. A Fund may realize a net gain or loss
from a closing purchase transaction depending upon whether the net amount of the
original premium received on the call option is more or less than the cost of
effecting the closing purchase transaction. Any loss incurred in a closing
purchase transaction may be partially or entirely offset by the premium received
from a sale of a different call option on the same underlying security. Such a
loss may also be wholly or partially offset by unrealized appreciation in the
market value of the underlying security. Conversely, a gain resulting from a
closing purchase transaction could be offset in whole or in part by a decline in
the market value of the underlying security.
If a call option expires unexercised, the Fund will realize a
short-term capital gain in the amount of the premium on the option less the
commission paid. Such a gain, however, may be offset by depreciation in the
market value of the underlying security during the option period. If a call
option is exercised, a Fund will realize a gain or loss from the sale of the
underlying security equal to the difference between the cost of the underlying
security and the proceeds of the sale of the security plus the amount of the
premium on the option less the commission paid.
A Fund will write call options only on a covered basis, which means
that a Fund will own the underlying security subject to a call option at all
times during the option period. Unless a closing purchase transaction is
effected, a Fund would be required to continue to hold a security which it might
otherwise wish to sell or deliver a security it would want to hold. The exercise
price of a call option may be below, equal to, or above the current market value
of the underlying security at the time the option is written.
Purchasing Put Options -- Each of these Funds may invest up to 20% of
its total assets in the purchase of put options. A Fund will, at all times
during which it holds a put option, own the security covered by such option.
With regard to the writing of put options, each Fund will limit the aggregate
value of the obligations underlying such put options to 50% of its total assets.
The purchase of the put on substantially identical securities held will
constitute a short sale for tax purposes, the effect of which is to create
short-term capital gain on the sale of the security and to suspend running of
its holding period (and treat it as commencing on the date of the closing of the
short sale) or that of a security acquired to cover the same if at the time the
put was acquired, the security had not been held for more than one year.
A put option purchased by a Fund gives it the right to sell one of its
securities for an agreed price up to an agreed date. A Fund would purchase put
options in order to protect against a decline in the market value of the
underlying security below the exercise price less the premium paid for the
option ("protective puts"). The ability to purchase put options allows a Fund to
protect unrealized gains in an appreciated security in their portfolios without
actually selling the security. If the security does not drop in value, a Fund
will lose the value of the premium paid. A Fund may sell a put option which it
has previously purchased prior to the sale of the securities underlying such
option. Such sale will result in a net gain or loss depending on whether the
amount received on the sale is more or less than the premium and other
transaction costs paid on the put option which is sold.
Each of these Funds may sell a put option purchased on individual
portfolio securities. Additionally, a Fund may enter into closing sale
transactions. A closing sale transaction is one in which a Fund, when it is the
holder of an outstanding option, liquidates its position by selling an option of
the same series as the option previously purchased.
Writing Put Options -- Each of these Funds may also write put options
on a secured basis which means that a Fund will maintain in a segregated account
with its Custodian, cash or U.S. Government securities in an amount not less
than the exercise price of the option at all times during the option period. The
amount of cash or U.S. Government securities held in the segregated account will
be adjusted on a daily basis to reflect changes in the market value of the
securities covered by the put option written by the Fund. Secured put options
will generally be written in circumstances where the Investment Advisor or
Sub-Investment Advisor wishes to purchase the underlying security for a Fund's
portfolio at a price lower than the current market price of the security. In
such event, that Fund would write a secured put option at an exercise price
which, reduced by the premium received on the option, reflects the lower price
it is willing to pay.
Following the writing of a put option, a Fund may wish to terminate the
obligation to buy the security underlying the option by effecting a closing
purchase transaction. This is accomplished by buying an option of the same
series as the option previously written. The Fund may not, however, effect such
a closing transaction after it has been notified of the exercise of the option.
Futures Contracts and Related Risks
All Funds except Chicago Trust Money Market Fund, Alleghany/Chicago
Trust SmallCap Value Fund and Alleghany/Veredus Aggressive Growth Fund may enter
into contracts for the purchase or sale for future delivery of securities,
including index contracts. Futures contracts are generally considered to be
derivative securities. While futures contracts provide for the delivery of
securities, deliveries usually do not occur. Contracts are generally terminated
by entering into offsetting transactions.
The Funds may enter into such futures contracts to protect against the
adverse effects of fluctuations in security prices, or interest rates without
actually buying or selling the securities. For example, if interest rates are
expected to increase, a Fund might enter into futures contracts for the sale of
debt securities. Such a sale would have much the same effect as selling an
equivalent value of the debt securities owned by the Fund. If interest rates did
increase, the value of the debt securities in the portfolio would decline, but
the value of the futures contracts to the Fund would increase at approximately
the same rate, thereby keeping the net asset value of the Fund from declining as
much as it otherwise would have. Similarly, when it is expected that interest
rates may decline, futures contracts may be purchased to hedge in anticipation
of subsequent purchases of securities at higher prices. Since the fluctuations
in the value of futures contracts should be similar to those of debt securities,
the Fund could take advantage of the anticipated rise in value of debt
securities without actually buying them until the market had stabilized. At that
time, the futures contracts could be liquidated and the Fund could then buy debt
securities on the cash market.
A stock index futures contract obligates the seller to deliver (and the
purchaser to take) an amount of cash equal to a specific dollar amount times the
difference between the value of a specific stock index at the close of the last
trading day of the contract and the price at which the agreement was made. Open
futures contracts are valued on a daily basis and a Fund may be obligated to
provide or receive cash reflecting any decline or increase in the contract's
value. No physical delivery of the underlying stocks in the index is made in the
future.
With respect to options on futures contracts, when a Fund is
temporarily not fully invested, it may purchase a call option on a futures
contract to hedge against a market advance. The purchase of a call option on a
futures contract is similar in some respects to the purchase of a call option on
an individual security. Depending on the pricing of the option compared to
either the price of the futures contract upon which it is based, or the price of
the underlying debt securities, it may or may not be less risky than ownership
of the futures contract or underlying debt securities. As with the purchase of
futures contracts, when a Fund is not fully invested, it may purchase a call
option on a futures contract to hedge against a market advance.
The writing of a call option on a futures contract constitutes a
partial hedge against the declining price of the security or foreign currency
which is deliverable upon exercise of the futures contract. If the futures price
at the expiration of the option is below the exercise price, the Fund will
retain the full amount of the option premium which provides a partial hedge
against any decline that may have occurred in the value of the Fund's portfolio
holdings. The writing of a put option on a futures contract constitutes a
partial hedge against the increasing price of the security or foreign currency
which is deliverable upon exercise of the futures contract. If the futures price
at the expiration of the option is higher than the exercise price, the Fund will
retain the full amount of the option premium which provides a partial hedge
against any increase in the price of securities which the Fund intends to
purchase.
Call and put options on stock index futures are similar to options on
securities except that, rather than the right to purchase or sell stock at a
specified price, options on a stock index future give the holder the right to
receive cash. Upon exercise of the option, the delivery of the futures position
by the writer of the option to the holder of the option will be accompanied by
delivery of the accumulated balance in the writer's futures margin account which
represents the amount by which the market price of the futures contract, at
exercise, exceeds, in the case of a call, or is less than, in the case of a put,
the exercise price of the futures contract. If an option is exercised on the
last trading day prior to the expiration date of the option, the settlement will
be made entirely in cash equal to the difference between the exercise price of
the option and the closing price of the futures contract on the expiration date.
If a put or call option which a Fund has written is exercised, the Fund
may incur a loss which will be reduced by the amount of the premium it received.
Depending on the degree of correlation between changes in the value of its
portfolio securities and changes in the value of its options positions, the
Fund's losses from existing options on futures may, to some extent, be reduced
or increased by changes in the value of portfolio securities. The purchase of a
put option on a futures contract is similar in some respects to the purchase of
protective puts on portfolio securities and for Federal tax purposes, will be
considered a "short sale." For example, a Fund will purchase a put option on a
futures contract to hedge the Fund's portfolio against the risk of rising
interest rates.
To the extent that market prices move in an unexpected direction, a
Fund may not achieve the anticipated benefits of futures contracts or options on
futures contracts or may realize a loss. For example, if the Fund is hedged
against the possibility of an increase in interest rates which would adversely
affect the price of securities held in its portfolio and interest rates decrease
instead, the Fund would lose part or all of the benefit of the increased value
which it has because it would have offsetting losses in its futures position. In
addition, in such situations, if the Fund had insufficient cash, it may be
required to sell securities from its portfolio to meet daily variation margin
requirements. Such sales of securities may, but will not necessarily, be at
increased prices which reflect the rising market. A Fund may be required to sell
securities at a time when it may be disadvantageous to do so.
Further, with respect to options on futures contracts, a Fund may seek
to close out an option position by writing or buying an offsetting position
covering the same securities or contracts and have the same exercise price and
expiration date. The ability to establish and close out positions on options
will be subject to the maintenance of a liquid secondary market, which cannot be
assured.
Forward Commitments, When-Issued Securities, and Delayed Delivery Transactions
and Related Risks
All Funds except Chicago Trust Money Market Fund and Alleghany/Chicago
Trust SmallCap Value Fund may dispose of or negotiate a when-issued or forward
commitment after entering into these transactions. Such transactions are
generally considered to be derivative transactions. These Funds will normally
realize a capital gain or loss in connection with these transactions. For
purposes of determining a Fund's average dollar-weighted maturity, the maturity
of when-issued or forward commitment securities will be calculated from the
commitment date.
When a Fund purchases securities on a when-issued, delayed delivery or
forward commitment basis, the Fund's Custodian will maintain in a segregated
account: cash, or liquid securities having a value (determined daily) at least
equal to the amount of the Fund's purchase commitments. In the case of a forward
commitment to sell portfolio securities, the Custodian will hold the portfolio
securities themselves in a segregated account while the commitment is
outstanding. These procedures are designed to ensure that the Fund will maintain
sufficient assets at all times to cover its obligations under when-issued
purchases, forward commitments and delayed delivery transactions.
Asset-Backed Securities and Related Risks
All Funds except Montag & Caldwell Growth Fund, Chicago Trust Talon
Fund, Chicago Trust Money Market Fund, Alleghany/Chicago Trust SmallCap Value
Fund and Alleghany/Veredus Aggressive Growth Fund may invest in asset-backed
securities. Asset-backed securities are securities backed by installment
contracts, credit card and other receivables, or other financial type assets.
Asset-backed securities represent interests in "pools" of assets in which
payments of both interest and principal on the securities are made monthly, thus
in effect "passing through" monthly payments made by the individual borrowers on
the assets underlying securities, net of any fees paid to the issuer or
guarantor of the securities. The average life of asset-backed securities varies
with the maturities of the underlying instruments. An asset-backed security's
stated maturity may be shortened, and the security's total return may be
difficult to predict precisely.
Mortgage-Backed Securities and Mortgage Pass-Through Securities and
Related Risks
All Funds except Montag & Caldwell Growth Fund, Chicago Trust Talon
Fund, Chicago Trust Money Market Fund, Alleghany/Chicago Trust SmallCap Value
Fund and Alleghany/Veredus Aggressive Growth Fund may also invest in
mortgage-backed securities. The timely payment of principal and interest on
mortgage-backed securities issued or guaranteed by Ginnie Mae (formerly known as
the Government National Mortgage Association) ("GNMA") is backed by GNMA and the
full faith and credit of the U.S. Government. Also, securities issued by GNMA
and other mortgage-backed securities may be purchased at a premium over the
maturity value of the underlying mortgages. This premium is not guaranteed and
would be lost if prepayment occurs. Mortgage-backed securities issued by U.S.
Government agencies or instrumentalities other than GNMA are not "full faith and
credit" obligations. Certain obligations, such as those issued by the Federal
Home Loan Bank are supported by the issuer's right to borrow from the U.S.
Treasury; while others, such as those issued by the Federal National Mortgage
Association ("FNMA"), are supported only by the credit of the issuer.
Unscheduled or early payments on the underlying mortgages may shorten the
securities' effective maturities and reduce returns. These Funds may agree to
purchase or sell these securities with payment and delivery taking place at a
future date.
Mortgage-backed securities have greater market volatility then other
types of securities. In addition, because prepayments often occur at times when
interest rates are low or are declining, the Funds may be unable to reinvest
such funds in securities which offer comparable yields. The yields provided by
these mortgage securities have historically exceeded the yields on other types
of U.S. Government securities with comparable maturities in large measure due to
the risks associated with prepayment features. (See "General Risks of Mortgage
Securities" herein.)
For Federal tax purposes other than diversification under Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code"), mortgage-backed
securities are not considered to be separate securities but rather "grantor
trusts" conveying to the holder an individual interest in each of the mortgages
constituting the pool.
The mortgage securities which are issued or guaranteed by GNMA, Federal
Home Loan Mortgage Corporation ("FHLMC"), or FNMA ("certificates") are called
pass-through certificates because a pro-rata share of both regular interest and
principal payments (less GNMA's, FHLMC's, or FNMA's fees and any applicable loan
servicing fees), as well as unscheduled early prepayments on the underlying
mortgage pool, are passed through monthly to the holder of the certificate
(i.e., the portfolio).
Each of these Funds may also invest in pass-through certificates issued
by non-governmental issuers. Pools of conventional residential mortgage loans
created by such issuers generally offer a higher rate of interest than
government and government-related pools because there are no direct or indirect
government guarantees of payment. Timely payment of interest and principal of
these pools is, however, generally supported by various forms of insurance or
guarantees, including individual loan, title, pool and hazard insurance. The
insurance and guarantees are issued by government entities, private insurance
and the mortgage poolers. Such insurance and guarantees and the creditworthiness
of the issuers thereof will be considered in determining whether a
mortgage-related security meets the Fund's quality standards. The Fund may buy
mortgage-related securities without insurance or guarantees if through an
examination of the loan experience and practices of the poolers, the investment
manager determines that the securities meet the Fund's quality standards.
Collateralized Mortgage Obligations ("CMOs"), Real Estate Mortgage Investment
Conduits ("REMICs"), Multi-Class Pass-Throughs, and Related Risks
All Funds except Montag & Caldwell Growth Fund, Chicago Trust Talon
Fund, Chicago Trust Money Market Fund, Alleghany/Chicago Trust SmallCap Value
Fund and Alleghany/Veredus Aggressive Growth Fund may also invest in certain
debt obligations which are collateralized by mortgage loans or mortgage
pass-through securities. These obligations are generally considered to be
derivative securities. CMOs and REMICs are debt instruments issued by
special-purpose entities which are secured by pools or mortgage loans or other
mortgage-backed securities. Multi-class pass-through securities are equity
interests in a trust composed of mortgage loans or other mortgage-backed
securities. Payments of principal and interest on underlying collateral provides
the funds to pay debt service on the CMO or REMIC or make scheduled
distributions on the multi-class pass-through securities. CMOs, REMICs, and
multi-class pass-through securities (collectively, CMOs unless the context
indicates otherwise) may be issued by agencies or instrumentalities of the U.S.
Government or by private organizations.
In a CMO, a series of bonds or certificates is issued in multiple
classes. Each class of CMOs, often referred to as a "tranche," is issued at a
specified coupon rate or adjustable rate tranche (to be discussed in the next
paragraph) and has a stated maturity or final distribution date. Principal
prepayments on collateral underlying a CMO may cause it to be retired
substantially earlier than the stated maturities or final distribution dates.
Interest is paid or accrues on all classes of a CMO on a monthly, quarterly, or
semi-annual basis. The principal and interest on the underlying mortgages may be
allocated among several classes of a series of a CMO in many ways. In a common
structure, payments of principal, including any principal prepayments, on the
underlying mortgages are applied to the classes of a series of a CMO in the
order of their respective stated maturities or final distribution dates, so that
no payment of principal will be made on any class of a CMO until all other
classes having an earlier stated maturity or final distribution date have been
paid in full.
One or more tranches of a CMO may have coupon rates which reset
periodically at a specified increment over an index such as the London Interbank
Offered Rate ("LIBOR"). These adjustable-rate tranches, known as "floating-rate
CMOs," will be considered as adjustable-rate mortgage securities ("ARMs") by the
Funds. Floating-rate CMOs may be backed by fixed-rate or adjustable-rate
mortgages; to date, fixed-rate mortgages have been more commonly utilized for
this purpose. Floating-rate CMOs are typically issued with lifetime "caps" on
the coupon rate thereon. These "caps," similar to the "caps" on adjustable-rate
mortgages, represent a ceiling beyond which the coupon rate on a floating-rate
CMO may not be increased regardless of increases in the interest rate index to
which the floating-rate CMO is geared.
REMICs are private entities formed for the purpose of holding a fixed
pool of mortgages secured by an interest in real property. REMICs are similar to
CMOs in that they issue multiple classes of securities. As with CMOs, the
mortgages which collateralize the REMICs in which the Funds may invest include
mortgages backed by GNMA certificates or other mortgage pass-throughs issued or
guaranteed by the U.S. Government, its agencies or instrumentalities or issued
by private entities, which are not guaranteed by any government agency.
Yields on privately issued CMOs as described above have been
historically higher than the yields on CMOs issued or guaranteed by U.S.
Government agencies. However, the risk of loss due to default on such
instruments is higher since they are not guaranteed by the U.S. Government.
These Funds will not invest in subordinated privately issued CMOs.
Resets -- The interest rates paid on the ARMs and CMOs in which these
Funds may invest generally are readjusted at intervals of one year or less to an
increment over some predetermined interest rate index. There are three main
categories of indices: those based on U.S. Treasury securities; those derived
from a calculated measure such as a cost of funds index; or a moving average of
mortgage rates. Commonly utilized indices include: the one-year, three-year and
five-year constant maturity Treasury rates; the three-month Treasury bill rate;
the six-month Treasury bill rate; rates on longer-term Treasury securities; the
11th District Federal Home Loan Bank Cost of Funds; the National Median Cost of
Funds; the one-month, three-month, six-month or one-year LIBOR; the prime rate
of a specific bank; or commercial paper rates. Some indices, such as the
one-year constant maturity Treasury rate, closely mirror changes in market
interest rate levels. Others, such as the 11th District Federal Home Loan Bank
Cost of Funds index, tend to lag behind changes in market rate levels and tend
to be somewhat less volatile.
Caps and Floors -- The underlying mortgages which collateralize the
ARMs and CMOs in which these Funds may invest will frequently have caps and
floors which limit the maximum amount by which the loan rate to the residential
borrower may change up or down (1) per reset or adjustment interval and (2) over
the life of the loan. Some residential mortgage loans restrict periodic
adjustments by limiting changes in the borrower's monthly principal and interest
payments rather than limiting interest rate changes. These payment caps may
result in negative amortization.
Stripped Mortgage Securities and Related Risks
All Funds except Montag & Caldwell Growth Fund, Chicago Trust Talon
Fund, Chicago Trust Money Market Fund, Alleghany/Chicago Trust SmallCap Value
Fund and Alleghany/Veredus Aggressive Growth Fund may also invest in stripped
mortgage securities. The stripped mortgage securities in which the Funds may
invest will only be issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Stripped mortgage securities have greater market volatility
than other types of mortgage securities in which the Funds invest.
Stripped mortgage securities are usually structured with two classes
that receive different proportions of the interest and principal distributions
on a pool of mortgage assets. A common type of stripped mortgage security will
have one class receiving some of the interest and most of the principal from the
mortgage assets, while the other class will receive most of the interest and the
remainder of the principal. In the most extreme case, one class will receive all
of the interest (the interest-only or "IO" class), while the other class will
receive all of the principal (the principal-only or "PO" class). The yield to
maturity on an IO class is extremely sensitive not only to changes in prevailing
interest rates but also to the rate of principal payments (including
prepayments) on the related underlying mortgage assets, and a rapid rate of
principal payments may have a material adverse effect on the yield to maturity
of any such IOs held by a Fund. If the underlying mortgage assets experience
greater than anticipated prepayments of principal, the Fund may fail to fully
recoup its initial investment in these securities even if the securities are
rated in the highest rating categories--"Aaa" or "AAA" by Moody's or S&P,
respectively.
Although stripped mortgage securities are purchased and sold by
institutional investors through several investment banking firms acting as
brokers or dealers, these securities were only recently developed. As a result,
established trading markets have not yet been fully developed; accordingly,
certain of these securities may generally be illiquid. The Fund will treat
stripped mortgage securities as illiquid securities except for those securities
which are issued by U.S. Government agencies and instrumentalities and backed by
fixed rate mortgages whose liquidity is monitored by the Investment Advisor,
subject to the supervision of the Board of Trustees. The staff of the Securities
and Exchange Commission (the "SEC") has indicated that it views such securities
as illiquid. Until further clarification of this matter is provided by the
staff, a Fund's investment in stripped mortgage securities will be treated as
illiquid and will, together with any other illiquid investments, not exceed 15%
of such Fund's net assets.
Other Mortgage-Backed Securities
All Funds except Montag & Caldwell Growth Fund, Chicago Trust Talon
Fund, Chicago Trust Money Market Fund, Alleghany/Chicago Trust SmallCap Value
Fund and Alleghany/Veredus Aggressive Growth Fund may invest in other
mortgage-backed securities. The Investment Advisor expects that governmental,
government-related or private entities may create mortgage loan pools and other
mortgage-related securities offering mortgage pass-through and
mortgage-collateralized investments in addition to those described above. The
mortgages underlying these securities may include alternative mortgage
instruments, that is, mortgage instruments whose principal or interest payments
may vary or whose terms to maturity may differ from customary long-term
fixed-rate mortgages. As new types of mortgage-related securities are developed
and offered to investors, the Investment Advisor will, consistent with a Fund's
investment objective, policies and quality standards, consider making
investments in such new types of mortgage-related securities.
General Risks of Mortgage Securities
The mortgage securities in which a Fund invests differ from
conventional bonds in that principal is paid back over the life of the mortgage
security rather than at maturity. As a result, the holder of the mortgage
securities (i.e., the Fund) receives monthly scheduled payments of principal and
interest, and may receive unscheduled principal payments representing
prepayments on the underlying mortgages. When the holder reinvests the payments
and any unscheduled prepayments of principal it receives, it may receive a rate
of interest which is lower than the rate on the existing mortgage securities.
For this reason, mortgage securities may be less effective than other types of
securities as a means of "locking in" long-term interest rates.
A decline in interest rates may lead to a faster rate of repayment of
the underlying mortgages and expose a Fund to a lower rate of return upon
reinvestment. To the extent that such mortgage-backed securities are held by a
Fund, the prepayment right of mortgagors may decrease or limit the increase in
net asset value of the Fund because the value of the mortgage-backed securities
held by the Fund may decline more than or may not appreciate as much as the
price of non-callable debt securities. To the extent market interest rates
increase beyond the applicable cap or maximum rate on a mortgage security, the
market value of the mortgage security would likely decline to the same extent as
a conventional fixed-rate security. The volatility of the security would likely
increase, however, because the expected decline in prepayments would lead to
longer effective maturity of the underlying mortgages.
In addition, to the extent mortgage securities are purchased at a
premium, mortgage foreclosures and unscheduled principal prepayments may result
in some loss of the holder's principal investment to the extent of the premium
paid. On the other hand, if mortgage securities are purchased at a discount,
both a scheduled payment of principal and an unscheduled prepayment of principal
will increase current and total returns and will accelerate the recognition of
income which when distributed to shareowners will be taxable as ordinary income.
With respect to pass-through mortgage pools issued by non-governmental
issuers, there can be no assurance that the private insurers associated with
such securities can meet their obligations under the policies. Although the
market for such non-governmental issued or guaranteed mortgage securities is
becoming increasingly liquid, securities issued by certain private organizations
may not be readily marketable. The purchase of such securities is subject to
each Fund's limit with respect to investment in illiquid securities.
Interest Rate Swaps and Related Risks
Only Chicago Trust Balanced Fund, Chicago Trust Bond Fund, and Chicago
Trust Municipal Bond Fund may enter into interest rate swaps for hedging
purposes and not for speculation. Interest rate swaps are generally considered
to be derivative transactions. A Fund will typically use interest rate swaps to
preserve a return on a particular investment or portion of its portfolio or to
shorten the effective duration of its portfolio investments. Interest rate swaps
involve the exchange by a Fund with another party of their respective
commitments to pay or receive interest, such as an exchange of fixed-rate
payments for floating-rate payments.
A Fund will only enter into interest rate swaps on a net basis, i.e.,
the two payment streams are netted out, with the Fund receiving or paying, as
the case may be, only the net amount of the two payments. Inasmuch as these
transactions are entered into for good faith hedging purposes, the Funds and the
Investment Advisor believe that such obligations do not constitute senior
securities as defined in the 1940 Act and, accordingly, will not treat them as
being subject to the Funds' borrowing restrictions. The net amount of the
excess, if any, of a Fund's obligations over its entitlements with respect to
each interest rate swap will be accrued on a daily basis and an amount of cash
or liquid securities, having an aggregate net asset value at least equal to such
accrued excess will be maintained in a segregated account by the Fund's
Custodian.
In a cap or floor, one party agrees, usually in return for a fee, to
make payments under particular circumstances. For example, the purchaser of an
interest rate cap has the right to receive payments to the extent a specified
interest rate exceeds an agreed level; the purchaser of an interest rate floor
has the right to receive payments to the extent a specified interest rate falls
below an agreed level. A collar entitles the purchaser to receive payments to
the extent a specified interest rate falls outside an agreed range.
Swap agreements may involve leverage and may be highly volatile;
depending on how they are used, they may have a considerable impact on a Fund's
performance. Swap agreements involve risks depending upon the other party's
creditworthiness and ability to perform, as judged by the Investment Advisor as
well as the Fund's ability to terminate its swap agreements or reduce its
exposure through offsetting transactions.
Municipal Securities
Chicago Trust Municipal Bond Fund is expected to maintain a
dollar-weighted average maturity of between three and ten years under normal
market conditions. An assessment of a portfolio's dollar-weighted average
maturity requires the consideration a number of factors, including each bond's
yield, coupon interest payments, final maturity, call and put features, and
prepayment exposure. The Fund's computation of its dollar-weighted average
maturity is based upon estimated rather than known factors and there can be no
assurance that the anticipated average weighted maturity will be attained. In
that regard, a change in interest rates generally will affect a portfolio's
dollar-weighted average maturity.
Other Investments
The Board of Trustees may, in the future, authorize a Fund to invest in
securities other than those listed here and in the Prospectus, provided that
such investment would be consistent with that Fund's investment objective and
that it would not violate any fundamental investment policies or restrictions
applicable to that Fund.
INVESTMENT RESTRICTIONS
The investment restrictions set forth below are fundamental policies
and may not be changed as to a Fund without the approval of a majority of the
outstanding voting shares (as defined in the 1940 Act) of the Fund. Unless
otherwise indicated, all percentage limitations governing the investments of
each Fund apply only at the time of transaction. Accordingly, if a percentage
restriction is adhered to at the time of investment, a later increase or
decrease in the percentage which results from a relative change in values or
from a change in a Fund's total assets will not be considered a violation.
Except as set forth under "INVESTMENT OBJECTIVES AND POLICIES" and
INVESTMENT STRATEGIES AND RISK CONSIDERATIONS" in the Prospectus, each Fund may
not:
(1) As to 75% of the total assets of each Fund, purchase the securities of
any one issuer (other than securities issued by the U.S. Government or
its agencies or instrumentalities) if immediately after such purchase,
more than 5% of the value of the Fund's total assets would be invested
in securities of such issuer;
(2) Purchase or sell real estate (but this restriction shall not prevent
the Funds from investing directly or indirectly in portfolio
instruments secured by real estate or interests therein or acquiring
securities of real estate investment trusts or other issuers that deal
in real estate), interests in oil, gas and/or mineral exploration or
development programs or leases;
(3) Purchase or sell commodities or commodity contracts, except that a Fund
may enter into futures contracts and options thereon in accordance with
such Fund's investment objectives and policies;
(4) Make investments in securities for the purpose of exercising control;
(5) Purchase the securities of any one issuer if, immediately after such
purchase, a Fund would own more than 10% of the outstanding voting
securities of such issuer;
(6) Sell securities short or purchase securities on margin, except such
short-term credits as are necessary for the clearance of transactions.
For this purpose, the deposit or payment by a Fund for initial or
maintenance margin in connection with futures contracts is not
considered to be the purchase or sale of a security on margin;
(7) Make loans, except that this restriction shall not prohibit (a) the
purchase and holding of debt instruments in accordance with a Fund's
investment objectives and policies, (b) the lending of portfolio
securities, or (c) entry into repurchase agreements with banks or
broker-dealers;
(8) Borrow money or issue senior securities, except that each Fund may
borrow from banks and enter into reverse repurchase agreements for
temporary purposes in amounts up to one-third of the value of its total
assets at the time of such borrowing; or mortgage, pledge, or
hypothecate any assets, except in connection with any such borrowing
and in amounts not in excess of the lesser of the dollar amounts
borrowed or 10% of the value of the total assets of the Fund at the
time of its borrowing. All borrowings will be done from a bank and
asset coverage of at least 300% is required. A Fund will not purchase
securities when borrowings exceed 5% of that Fund's total assets;
(9) Purchase the securities of issuers conducting their principal business
activities in the same industry (other than obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities)
if immediately after such purchase the value of a Fund's investments in
such industry would exceed 25% of the value of the total assets of the
Fund;
(10) Act as an underwriter of securities, except that, in connection with
the disposition of a security, a Fund may be deemed to be an
"underwriter" as that term is defined in the 1933 Act;
(11) Invest in puts, calls, straddles or combinations thereof except to the
extent disclosed in the Prospectus;
(12) Invest more than 5% of its total assets in securities of companies less
than three years old. Such three year periods shall include the
operation of any predecessor company or companies.
TRUSTEES AND OFFICERS
Information pertaining to the Trustees and Executive Officers of the
Company is set forth below.
POSITION
NAME AGE WITH COMPANY
Stuart D. Bilton* 52 Chairman, Board of Trustees
171 North Clark Street (Chief Executive Officer)
Chicago, IL 60601
PRINCIPAL OCCUPATIONS
FOR PAST FIVE YEARS
Mr. Bilton is Executive Vice President of Chicago Trust Company and President
and Chief Executive Officer of The Chicago Trust Company, where he is
responsible for the Financial Services Group. Mr. Bilton has held a variety of
positions within Chicago Title and Trust Company including: Chief Economist;
Senior Vice President--Corporate Marketing and Strategic Planning; Vice
President--Lincoln National Life; and Manager of Eastern Region Reinsurance
Operations. Mr. Bilton was educated at the London School of Economics and at the
University of Wisconsin. He is a Chartered Financial Analyst, a Director of
Montag & Caldwell, Inc., and a Director of Baldwin & Lyons, Inc., an
Indianapolis-based insurance company, and of the Boys and Girls Clubs of
Chicago.
Dorothea C. Gilliam* 45 Trustee
171 North Clark Street
Chicago, IL 60601
PRINCIPAL OCCUPATIONS
FOR PAST FIVE YEARS
Ms. Gilliam is Vice President of Investments of the Alleghany Corporation, the
parent company of Chicago Title and Trust Company. Previously, she was an
Assistant Vice President of Chicago Title and Trust Company.
<PAGE>
POSITION
NAME AGE WITH COMPANY
Leonard F. Amari 55 Trustee
734 North Wells Street
Chicago, IL 60610
PRINCIPAL OCCUPATIONS
FOR PAST FIVE YEARS
Mr. Amari is a Partner at the law offices of Amari & Locallo, a practice
confined exclusively to the real estate tax assessment process.
Gregory T. Mutz 52 Trustee
125 South Wacker Drive
Suite 3100
Chicago, IL 60606
PRINCIPAL OCCUPATIONS
FOR PAST FIVE YEARS
Mr. Mutz is the Chairman of the Board for both the Amli Realty and Amli
Residential Properties Inc. As Chairman, he is responsible for the operation of
the two real estate companies whose principal businesses are multi-family
apartments, land, and business, office and industrial parks.
Nathan Shapiro 61 Trustee
1700 Ridge
Highland Park, IL 60035
PRINCIPAL OCCUPATIONS
FOR PAST FIVE YEARS
Mr. Shapiro is the President of SF Investments, Inc., a broker/dealer and
Investments, Inc., a broker/dealer and investment banking firm. Previously, he
was President of SLD Corporation, a consulting firm, and Senior Vice President
of Pekin, Singer and Shapiro, an investment advisory firm. He is a Director of
Baldwin & Lyons, Inc.
Kenneth C. Anderson 33 President
171 North Clark Street (Chief Operating Officer)
Chicago, IL 60601
PRINCIPAL OCCUPATIONS
FOR PAST FIVE YEARS
Mr. Anderson is a Senior Vice President of The Chicago Trust Company and has
been an officer since 1993 He is responsible for the mutual fund operations and
marketing. Mr. Anderson is a Certified Public Accountant.
David F. Seng 56 Senior Vice President
1100 Atlanta Financial
Center
3343 Peachtree Road, NE
Atlanta, GA 30326-8151
PRINCIPAL OCCUPATIONS
FOR PAST FIVE YEARS
Mr. Seng is an Executive Vice President and Chief Operating Officer of Montag &
Caldwell, Inc., and a Chartered Financial Analyst.
Gerald F. Dillenburg 31 Vice President, Secretary, and
171 North Clark Street Treasurer (Chief Financial
Chicago, IL 60601 Officer and Compliance Officer)
PRINCIPAL OCCUPATIONS
FOR PAST FIVE YEARS
Mr. Dillenburg is a Vice President of The Chicago Trust Company and has been the
operations manager and compliance officer of the mutual funds since 1996.
Previously, he was an audit manager with KPMG Peat Marwick LLP, specializing in
investment services, including mutual and trust funds, broker/dealers and
investment advisors. Mr. Dillenburg is a Certified Public Accountant.
Thomas J. Adams III, Esq. 56 Vice President
171 North Clark Street
Chicago, IL 60601
PRINCIPAL OCCUPATIONS
FOR PAST FIVE YEARS
Mr. Adams joined Chicago Title and Trust Company in September 1967 as Attorney
Trainee and was appointed Assistant Counsel in July 1972. In January 1973, he
was appointed Assistant General Counsel of both Chicago Title and Trust Company
and Chicago Title Insurance Company. In December 1979, Mr. Adams was elected
Vice President, Associate General Counsel of Chicago Title and Trust Company and
Chicago Title Insurance Company. In 1985, he was elected General Corporate
Counsel and Secretary of Chicago Title Insurance Company as well as General
Corporate Counsel of Chicago Title and Trust Company. Mr. Adams was also elected
Vice President of Security Union Title Insurance Company in April 1988. Mr.
Adams received his B.A. from Dartmouth College in 1964, his Juris Doctor from
Northwestern Law School in 1967, and an M.B.A. from the University of Chicago
Graduate School of Business in 1974.
* These Trustees are considered "interested persons" of the Funds as defined
under the 1940 Act.
The Trustees of the Company who are not "interested persons" of the
Funds receive fees and expenses for each meeting of the Board of Trustees they
attend. Prior to January 1, 1997, such Trustees received $1,500 for each Board
Meeting attended, and an annual retainer of $1,500. Effective January 1, 1998,
such Trustees will receive $2,000 for each Board Meeting attended, and an annual
retainer of $2,000. No officer or employee of Chicago Title and Trust Company or
The Chicago Trust Company ("Chicago Trust") or their affiliates receives any
compensation from the Funds for acting as a Trustee of the Company. The Officers
of the Company receive no compensation directly from the Funds for performing
the duties of their offices.
Set forth below are the total fees which were paid to each of the
Trustees who are not "interested persons" during the fiscal period ended October
31, 1997.
Aggregate Fees Paid
Trustee by the Company
Leonard F. Amari $5,375
Gregory T. Mutz $6,875
Nathan Shapiro $6,875
As of [__________, 1998], the Trustees and Officers of the Company as a
group owned less than 1% of the outstanding shares of any class of each Fund.
PRINCIPAL HOLDERS OF SECURITIES
Listed below are the names and addresses of those shareowners who, as
of [ ], 1998, owned of record or beneficially of 5% or more of the shares of the
Funds. The shares held in the nominee names of Marshall & Ilsley Trust Co. are
owned of record by Chicago Trust. Chicago Title and Trust Company ("Chicago
Title and Trust"), an Illinois chartered trust company, a wholly-owned
subsidiary of Alleghany Corporation ("Alleghany"), is the owner of Alleghany
Asset Management, which is the holding company of Chicago Trust and Montag &
Caldwell, Inc. ("Montag and Caldwell"), the Investment Advisors for the Funds.
Shareowners who have the power to vote a large percentage of shares of a
particular Fund can control the Fund and determine the outcome of a
shareholders' meeting.
[TO BE UPDATED]
MONTAG & CALDWELL GROWTH FUND
Class N
Percentage
Shareowners Owned
Charles Schwab & Co., Inc. 24.75%
Special Custody Account for Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
Miter & Co.c/o 20.27%
Marshall & Ilsley Trust Co.
Attn: Outsourcing
P.O. Box 2977
Milwaukee, WI 53202
MONTAG & CALDWELL GROWTH FUND
Class I
Percentage
Shareowners Owned
The Bank of Mississippi 21.58%
c/o Trust
P.O. Box 1605
Jackson, MS 39215
Miter & Co. 13.13%
c/o Marshall & Ilsley Trust Co.
Attn: Outsourcing
P.O. Box 2977
Milwaukee, WI 53202
Mac & Co. 6.22%
Mutual Funds Operations
P.O. Box 3198
Pittsburgh, PA 15230
Wilmington Trust 5.71%
FBO Central Newspapers, Inc.
Savings Plus Plan
1100 N. Market St.
Wilmington, DE 19890
<PAGE>
CHICAGO TRUST GROWTH & INCOME FUND
Percentage
Shareowners Owned
Miter & Co. 88.94%
c/o Marshall & Ilsley Trust Co.
Attn: Outsourcing
P.O. Box 2977
Milwaukee, WI 53202
CHICAGO TRUST TALON FUND
Percentage
Shareowners Owned
Miter & Co. 5.39%
c/o Marshall & Ilsley Trust Co.
Attn: Outsourcing
P.O. Box 2977
Milwaukee, WI 53202
CHICAGO TRUST BALANCED FUND
Percentage
Shareowners Owned
Miter & Co. 97.84%
c/o Marshall & Ilsley Trust Co.
Attn: Outsourcing
P.O. Box 2977
Milwaukee, WI 53202
MONTAG & CALDWELL BALANCED FUND
Percentage
Shareowners Owned
Miter & Co. 30.97%
c/o Marshall & Ilsley Trust Co.
Attn: Outsourcing
P.O. Box 2977
Milwaukee, WI 53202
American Express Trust Company 13.38%
FBO American Express Trust Retirement Services
P.O. Box 534
Minneapolis, MN 55422
Huntington Trust Co. 7.68%
FBO Diocese of Covington
Attn: Mutual Funds
P.O. Box 1558
Columbus, OH 43260
Wachovia Bank N.A. Cust. 6.78%
North Carolina Textile Foundation
301 N. Main St.
P.O. Box 3073
Winston-Salem, NC 27150
CHICAGO TRUST BOND FUND
Percentage
Shareowners Owned
Miter & Co. 69.67%
c/o Marshall & Ilsley Trust Co.
Attn: Outsourcing
P.O. Box 2977
Milwaukee, WI 53202
Mitra & Co. 11.12%
FBO Chicago Trust for SCI
P.O. Box 2977
Milwaukee, WI 53202
Davis & Company 10.94%
c/o Marshall & Ilsley Trust Co.
Attn: Outsourcing
P.O. Box 2977
Milwaukee, WI 53202
CHICAGO TRUST MUNICIPAL BOND FUND
Percentage
Shareowners Owned
Davis & Company 90.40%
c/o Marshall & Ilsley Trust Co.
Attn: Outsourcing
P.O. Box 2977
Milwaukee, WI 53202
CHICAGO TRUST MONEY MARKET FUND
Percentage
Shareowners Owned
Davis & Company 95.72%
c/o Marshall & Ilsley Trust Co.
Attn: Outsourcing
P.O. Box 2977
Milwaukee, WI 53202
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Advisory Agreements
The advisory services provided by the Investment Advisor of each Fund,
and the fees received by it for such services, are described in the Prospectus.
The Investment Advisor of each Fund may from time to time voluntarily waive a
portion of its advisory fees with respect to such Fund and/or reimburse a
portion of the Fund's expenses.
The investment advisory fees earned and waived by Chicago Trust and
Montag & Caldwell, as well as expenses reimbursed, with respect to the
applicable Funds for which each acts as Investment Advisor, are set forth below:
<PAGE>
Fiscal year ended October 31, 1997:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Gross Advisory Net Advisory Waived Fees
Fees Earned Fees After and Reimbursed
by Advisors Fee Waivers Expenses
Montag & Caldwell Growth Fund $ 3,800,124 $3,758,696 $ 41,428
Chicago Trust Growth & Income Fund $ 1,734,260 $1,604,403 $ 129,857
Chicago Trust Talon Fund $ 182,742 $ 97,146 $ 85,596
Chicago Trust Balanced Fund $ 1,228,508 $1,126,305 $ 102,203
Montag & Caldwell Balanced Fund $ 400,868 $ 355,895 $ 44,973
Chicago Trust Bond Fund $ 550,514 $ 328,975 $ 221,539
Chicago Trust Municipal Bond Fund $ 69,127 $ 0 $ 85,359
Chicago Trust Money Market Fund $ 1,004,607 $ 862,275 $ 142,332
</TABLE>
Fiscal year ended October 31, 1996:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Gross Advisory Net Advisory Waived Fees
Fees Earned Fees After and Reimbursed
by Advisors Fee Waivers Expenses
Montag & Caldwell Growth Fund $ 834,718 $ 800,071 $ 34,647
Chicago Trust Growth & Income Fund $ 1,324,207 $ 1,038,213 $ 285,994
Chicago Trust Talon Fund $ 112,153 $ 16,856 $ 95,297
Chicago Trust Balanced Fund $ 1,075,631 $ 815,487 $ 260,144
Montag & Caldwell Balanced Fund $ 195,796 $ 110,391 $ 85,405
Chicago Trust Bond Fund $ 416,462 $ 190,705 $ 225,757
Chicago Trust Municipal Bond Fund $ 67,672 $ 0 $ 70,437
Chicago Trust Money Market Fund $ 821,513 $ 647,188 $ 174,325
</TABLE>
Fiscal year ended October 31, 1995:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Gross Advisory Net Advisory Waived Fees
Fees Earned Fees After and Reimbursed
by Advisors Fee Waivers Expenses
Montag & Caldwell Growth Fund $ 154,451 $ 45,631 $ 108,820
Chicago Trust Growth & Income Fund $ 222,466 $ 94,834 $ 127,632
Chicago Trust Talon Fund $ 64,359 $ 0 $ 139,529
Chicago Trust Balanced Fund $ 121,079 $ 90,985 $ 30,094
Montag & Caldwell Balanced Fund $ 78,125 $ 0 $ 129,051
Chicago Trust Bond Fund $ 123,919 $ 0 $ 165,348
Chicago Trust Municipal Bond Fund $ 66,027 $ 0 $ 138,875
Chicago Trust Money Market Fund $ 638,608 $ 346,606 $ 292,002
</TABLE>
Under the Investment Advisory Agreements, the Investment Advisor of
each Fund is not liable for any error of judgment or mistake of law or for any
loss suffered by the Company or a Fund in connection with the performance of the
Agreement, except a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard of its duties and obligations thereunder.
Each Investment Advisory Agreement is terminable with respect to a Fund
by vote of the Board of Trustees or by the holders of a majority of the
outstanding voting securities of the Fund, at any time without penalty, on 60
days' written notice to the Investment Advisor. An Investment Advisor may also
terminate its advisory relationship with respect to a Fund on 60 days' written
notice to the Company. Each Investment Advisory Agreement terminates
automatically in the event of its assignment.
Under each Investment Advisory Agreement, the Fund pays the following
expenses: (1) the fees and expenses of the Company's disinterested directors;
(2) the salaries and expenses of any of the Company's officers or employees who
are not affiliated with the Investment Advisor; (3) interest expenses; (4) taxes
and governmental fees; (5) brokerage commissions and other expenses incurred in
acquiring or disposing of portfolio securities; (6) the expenses of registering
and qualifying shares for sale with the SEC and with various state securities
commissions; (7) accounting and legal costs; (8) insurance premiums; (9) fees
and expenses of the Company's Custodian, Administrator, Sub-Administrator and
Transfer Agent and any related services; (10) expenses of obtaining quotations
of the Funds' portfolio securities and of pricing the Funds' shares; (11)
expenses of maintaining the Company's legal existence and of shareowners'
meetings; (12) expenses of preparation and distribution to existing shareowners
of reports, proxies and prospectuses; and (13) fees and expenses of membership
in industry organizations.
Chicago Title and Trust, 171 North Clark Street, Chicago, Illinois
60601, an Illinois chartered trust company and a wholly-owned subsidiary of
Alleghany, provided investment advisory services to certain Funds of the Company
since their respective inception dates through October 30, 1995. As described
more fully below, Chicago Trust, an Illinois corporation, assumed those
responsibilities on October 30, 1995. Such Funds include: Chicago Trust Growth &
Income Fund; Chicago Trust Balanced Fund; Chicago Trust Bond Fund; Chicago Trust
Municipal Bond Fund; Chicago Trust Money Market Fund; Alleghany/Chicago Trust
SmallCap Value Fund; Chicago Trust Talon Fund, with Talon Asset Management, Inc.
("Talon") serving as Sub-Investment Advisor ("Sub-Advisor") for that Fund.
Chicago Title and Trust formed Alleghany Asset Management, Inc.
("AAM"), a wholly-owned subsidiary, to act as a holding company for certain of
its financial services entities. On October 30, 1995, Chicago Title and Trust
transferred substantially all of its fiduciary business and investment
operations to Chicago Trust, a wholly-owned subsidiary of AAM. As part of such
transfer, Chicago Trust assumed all of Chicago Title and Trust's obligations and
liabilities under its existing Investment Advisory Agreements. Chicago Title and
Trust entered into a Guaranty Agreement with the Company on behalf of each Fund
for which it serves as Investment Advisor, pursuant to which it guarantees all
the obligations and liabilities of Chicago Trust under such Agreements. The
investment management operations with respect to the Company remain unchanged,
and those persons or groups responsible for the investment management of the
applicable Funds of the Company continue to have such responsibility for Chicago
Trust.
Chicago Trust managed approximately $7.0 billion in assets at June 30,
1998, consisting primarily of pension and profit sharing accounts, high net
worth individuals, families and insurance companies. Chicago Trust, an Illinois
corporation, is an indirect and wholly-owned subsidiary of AAM. AAM, located at
Park Avenue Plaza, New York City, New York 10055, is engaged through its
subsidiaries in the business of title insurance, reinsurance, other financial
services and industrial minerals.
As part of the corporate reorganization of Chicago Title and Trust
described above, Montag & Caldwell became an indirect wholly-owned subsidiary of
Chicago Title and Trust. Prior to October 30, 1995, Montag & Caldwell was a
wholly-owned subsidiary of AAM.
[Veredus Relationship with Chicago Trust]
Sub-Investment Advisory Agreement
Pursuant to a Sub-Investment Advisory Agreement between Chicago Trust
and Talon, Talon provides an investment program for Chicago Trust Talon Fund,
including investment research and the determination from time to time of the
securities that will be purchased and sold by the Fund, subject to the
supervision of Chicago Trust and the Board of Trustees of the Company. Prior to
December 23, 1996, as compensation for its services, Talon received from Chicago
Trust an annual fee of 0.40% of the first $8 million, 0.50% of the next $12
million, 0.70% of the next $230 million of the average daily net assets of this
Fund, and 0.75% of such average daily net assets in excess of $250 million.
Effective December 23, 1996, for months in which the Fund's average daily net
assets exceed $18 million, the Investment Advisor will pay the Sub-Advisor a fee
equal to 68.75% of the management fee that the Investment Advisor receives from
the Fund, net of any expense reimbursement. For the months in which the Fund's
average daily net assets are $18 million or less, the Sub-Advisor will receive
no fee. During the fiscal years ended October 31, 1995, 1996 and 1997, Talon was
paid $37,762, $15,109 and $60,407, respectively, for sub-investment advisory
services rendered.
Under the Sub-Investment Advisory Agreement, Talon is not liable for
any error of judgment or mistake of law or for any loss suffered by Chicago
Trust or the Funds in connection with the performance of the Sub-Investment
Advisory Agreement, except a loss resulting from willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or from
reckless disregard of its duties and obligations thereunder.
The Administrator and Sub-Administrator
As Administrator, Chicago Trust, 171 North Clark Street, Chicago,
Illinois 60601, provides certain administrative services to the Company pursuant
to an Administration Agreement. First Data Investor Services Group, Inc.
("Investor Services Group"), 53 State Street, Boston, Massachusetts 02109,
provides certain administrative services for the Funds and Chicago Trust
pursuant to a Sub-Administration Agreement.
Under the Administration Agreement, the Administrator is responsible
for: (1) coordinating with the Custodian and Transfer Agent and monitoring the
services they provide to the Funds; (2) coordinating with and monitoring any
other third parties furnishing services to the Funds; (3) providing the Funds
with necessary office space, telephones and other communications facilities and
personnel competent to perform administrative and clerical functions; (4)
supervising the maintenance by third parties of such books and records of the
Funds as may be required by applicable Federal or state law; (5) preparing or
supervising the preparation by third parties of all Federal, state and local tax
returns and reports of the Funds required by applicable law; (6) preparing and,
after approval by the Funds, filing and arranging for the distribution of proxy
materials and periodic reports to shareowners of the Funds as required by
applicable law; (7) preparing and, after approval by the Company, arranging for
the filing of such registration statements and other documents with the SEC and
other Federal and state regulatory authorities as may be required by applicable
law; (8) reviewing and submitting to the Officers of the Company for their
approval invoices or other requests for payment of the Funds' expenses and
instructing the Custodian to issue checks in payment thereof; and (9) taking
such other action with respect to the Company or the Funds as may be necessary
in the opinion of the Administrator to perform its duties under the Agreement.
As compensation for services performed under the Administration
Agreement, the Administrator receives a fee payable monthly at an annual rate
(as described in the Prospectus) multiplied by the average daily net assets of
the Company.
The administrative fees earned with respect to each Fund are set forth
below:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Administrative Administrative Administrative
Fees Fees Fees
FYE FYE FYE
Oct. 31, 1995 Oct. 31, 1996 October 31, 1997
------------- ------------- ----------------
FPS First Data
Montag & Caldwell Growth Fund $ 28,574 $ 58,127 $ 76,898 $ 165,326
Chicago Trust Growth & Income Fund $ 35,261 $ 104,720 $ 52,175 $ 69,751
Chicago Trust Talon Fund $ 27,445 $ 9,096 $ 5,005 $ 6,670
Chicago Trust Balanced Fund $ 8,685 $ 83,563 $ 38,136 $ 47,246
Montag & Caldwell Balanced Fund $ 27,554 $ 15,232 $ 9,676 $ 17,554
Chicago Trust Bond Fund $ 30,042 $ 41,966 $ 21,291 $ 28,043
Chicago Trust Municipal Bond Fund $ 27,050 $ 6,481 $ 2,679 $ 3,007
Chicago Trust Money Market Fund $ 36,291 $ 113,018 $ 56,421 $ 65,373
</TABLE>
Prior to June 1, 1997, FPS Broker Services, Inc. ("FPSB"), 3200 Horizon
Drive, King of Prussia, Pennsylvania 19406, acted as an Underwriter of the
Funds' shares for the purpose of facilitating the registration of shares of the
Funds under state securities laws and assisted in sales of shares pursuant to
the Underwriting Agreement approved by the Company's Trustees. Pursuant to its
Underwriter Compensation Agreement with the Company, FPSB was paid an annual
underwriter fee of $2,500 for each Class N Shares Fund and $2,000 for each Class
I Shares Fund ($22,000 per annum total for eight Class N Shares Funds and one
Class I Shares Fund), and certain other registration and transaction fees. For
the fiscal years ended October 31, 1995 and 1996, an aggregate of $18,125 and
$20,833 was paid on behalf of the then-existing Funds.
Effective June 1, 1997, First Data Distributors, Inc. replaced FPS Broker
Services, Inc. as principal underwriter and distributor of the Funds' shares.
<PAGE>
Distribution Plan
The Board of Trustees of the Company has adopted a Plan of Distribution
(the "Plan") pursuant to Rule 12b-1 under the 1940 Act which permits the Class N
shares of each Fund (except Chicago Trust Money Market Fund) to pay certain
expenses associated with the distribution of its shares. Under the Plan, each
Fund may pay actual expenses not exceeding, on an annual basis, 0.25% of a
Fund's average daily net assets. To the Company's knowledge, no interested
person of the Company, nor any of its Trustees who are not "interested persons,"
has a direct or indirect financial interest in the operation of the Plan. The
Company anticipates that each Fund will benefit from additional shareholders and
assets as a result of implementation of the Plan. The terms of such Plan are
more fully described in the Prospectus under "DISTRIBUTION PLAN." Amounts spent
on behalf of each Fund pursuant to such Plan during the fiscal year ended
October 31, 1997 are set forth below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Compensation Compensation
Distribution to Broker to Sales
Printing Services Dealers Personnel
Montag & Caldwell Growth Fund $ 19,215 $ 27,812 $ 498,145 $ 11,738
Chicago Trust Growth & Income Fund $ 30,404 $ 26,242 $ 125,246 $ 11,097
Chicago Trust Talon Fund $ 3,684 $ 10,855 $ 7,166 $ 1,750
Chicago Trust Balanced Fund $ 14,980 $ 21,233 $ 94,632 $ 1,732
Montag & Caldwell Balanced Fund $ 3,319 $ 12,615 $ 60,338 $ 4,873
Chicago Trust Bond Fund $ 8,401 $ 16,784 $ 61,136 $ 5,920
Chicago Trust Municipal Bond Fund $ 1,017 $ 10,097 $ 4,500 $ 109
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Marketing Services Providers Total
Montag & Caldwell Growth Fund $ 148,846 $ 22,097 $ 727,853
Chicago Trust Growth & Income Fund $ 293,428 $ 48,204 $ 534,621
Chicago Trust Talon Fund $ 10,904 $ 229 $ 34,588
Chicago Trust Balanced Fund $ 277,955 $ 36,782 $ 447,314
Montag & Caldwell Balanced Fund $ 14,892 $ 4,736 $ 100,772
Chicago Trust Bond Fund $ 63,038 $ 14,725 $ 170,004
Chicago Trust Municipal Bond Fund $ 2,129 $ 0 $ 17,852
</TABLE>
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
The Investment Advisor or Sub-Advisor is responsible for decisions to
buy and sell securities for the Funds and for the placement of its portfolio
business and the negotiation of commissions, if any, paid on such transactions.
The Investment Advisor, in placing trades for a Fund, will follow the Company's
policy of seeking best execution of orders. Securities traded in the
over-the-counter market are generally traded on a net basis. These securities
are generally traded on a net basis with dealers acting as principal for their
own accounts without a stated commission. In over-the-counter transactions,
orders are placed directly with a principal market-maker unless a better price
and execution can be obtained by using a broker. Brokerage commissions are paid
on transactions in listed securities, futures contracts, and options.
The Investment Advisor or Sub-Advisor effects portfolio transactions
for other investment companies and advisory accounts. Research services
furnished by broker-dealers through whom the Funds effect securities
transactions may be used by the Investment Advisor or Sub-Advisor, as the case
may be, in servicing all of their respective accounts; not all such services may
be used in connection with the Funds. The Investment Advisor and Sub-Advisor
will attempt to equitably allocate portfolio transactions among the Funds and
others whenever concurrent decisions are made to purchase or sell securities by
the Funds and other accounts. In making such allocations between the Funds and
others, the main factors to be considered are the respective investment
objectives, the relative size of portfolio holdings of the same or comparable
securities, the availability of cash for investment, the size of investment
commitments generally held, and the opinions of the persons responsible for
recommending investments to the Funds and the others. In some cases, this
procedure could have an adverse effect on the Funds. In the opinion of the
Investment Advisor and Sub-Advisor, however, the results of such procedures
will, on the whole, be in the best interest of each of the clients.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Brokerage Brokerage Brokerage
Commissions Commissions Commissions
FYE FYE FYE
Oct. 31, 1995 Oct. 31, 1996 Oct. 31, 1997
------------- ------------- -------------
Montag & Caldwell Growth Fund $50,125 $204,066 $537,610
Chicago Trust Growth & Income Fund $13,723 $122,722 $130,947
Chicago Trust Talon Fund $49,652 $40,019 $55,212*
Chicago Trust Balanced Fund N/A $66,370 $58,087
Montag & Caldwell Balanced Fund $15,328 $17,700 $34,393
Chicago Trust Bond Fund N/A N/A N/A
Chicago Trust Municipal Bond Fund N/A N/A N/A
Chicago Trust Money Market Fund N/A N/A N/A
</TABLE>
* Of this amount, $1,300 paid to Talon Securities, Inc. ("TSI"), an
affiliate of Talon, the Fund's Sub-Advisor. The amount paid to TSI
represents: (a) 0.20% of the aggregate brokerage commissions received
by TSI from all clients during the most recent fiscal year; and (b)
2.35% of the total commissions paid by Chicago Trust Talon Fund to all
brokers through whom trades were placed during the Fund's most recent
fiscal year.
Portfolio Turnover
The portfolio turnover rate for each of the Funds is calculated by
dividing the lesser of purchases or sales of portfolio investments for the
reporting period by the monthly average value of the portfolio investments owned
during the reporting period. The calculation excludes all securities, including
options, whose maturities or expiration dates at the time of acquisition are one
year or less. Portfolio turnover may vary greatly from year to year as well as
within a particular year, and may be affected by cash requirements for
redemption of units and by requirements which enable the Funds to receive
favorable tax treatment. In any event, portfolio turnover is generally not
expected to exceed 100% in the Funds, except for Chicago Trust Talon Fund and
Alleghany/Chicago Trust SmallCap Value Fund in which it is not expected to
exceed 150% and Alleghany/Veredus Aggressive Growth Fund in which it is not
expected to exceed 200%. A high rate of portfolio turnover (i.e., over 100%) may
result in the realization of substantial capital gains and involves
correspondingly greater transaction costs. To the extent that net capital gains
are realized, distributions derived from such gains are treated as ordinary
income for Federal income tax purposes.
The portfolio turnover rates for the Funds for their most recent fiscal
periods may be found under "FINANCIAL HIGHLIGHTS" in the Prospectus. Chicago
Trust Talon Fund experienced a portfolio turnover rate of 112.72% for the fiscal
year ended October 31, 1997 (vs. 126.83% for the fiscal year ended October 31,
1996 and 229.43% for the fiscal year ended October 31, 1995). The Fund is
periodically repositioned in the market as it seeks capital preservation, value
and competitive performance. Portfolio trades are executed in accordance with
the Fund's investment objective, in the best judgment of management.
TAXES
Each Fund intends to continue to qualify each year as a regulated
investment company under the Code.
In order to so qualify, a Fund must, among other things, (i) derive at
least 90% of its gross income from dividends, interest, payments with respect to
certain securities loans, gains from the sale of securities or foreign
currencies, or other income (including but not limited to gains from options,
futures or forward contracts) derived with respect to its business of investing
in such stock, securities or currencies; (ii) derive less than 30% of its gross
income from gains from the sale or other disposition of securities or certain
futures and options thereon held for less than three months ("short-short
gains"); (iii) distribute at least 90% of its dividend, interest and certain
other taxable income each year; and (iv) at the end of each fiscal quarter
maintain at least 50% of the value of its total assets in cash, U.S. Government
securities, securities of other regulated investment companies, and other
securities of issuers which represent, with respect to each issuer, no more than
5% of the value of a Fund's total assets and 10% of the outstanding voting
securities of such issuer, and with no more than 25% of its assets invested in
the securities (other than those of the government or other regulated investment
companies) of any one issuer or of two or more issuers which the Fund controls
and which are engaged in the same, similar or related trades and businesses.
To the extent such Fund qualifies for treatment as a regulated
investment company, it will not be subject to Federal income tax on income paid
to shareowners in the form of dividends or capital gains distributions.
An excise tax at the rate of 4% will be imposed on the excess, if any,
of a Fund's "required distributions" over actual distributions in any calendar
year. Generally, the "required distribution" is 98% of a Fund's ordinary income
for the calendar year plus 98% of its capital gain net income recognized during
the one-year period ending on October 31 plus undistributed amounts from prior
years. The Funds intend to make distributions sufficient to avoid imposition of
the excise tax. For a distribution to qualify as such with respect to a calendar
year under the foregoing rules, it must be declared by a Fund during October,
November or December to shareowners of record during such month and paid by
January 31 of the following year. Such distributions will be taxable in the year
they are declared, rather than the year in which they are received.
When a Fund writes a call, or purchases a put option, an amount equal
to the premium received or paid by it is included in the Fund's accounts as an
asset and as an equivalent liability.
In writing a call, the amount of the liability is subsequently
"marked-to-market" to reflect the current market value of the option written.
The current market value of a written option is the last sale price on the
principal exchange on which such option is traded or, in the absence of a sale,
the mean between the last bid and asked prices. If an option which a Fund has
written expires on its stipulated expiration date, the Fund recognizes a
short-term capital gain. If a Fund enters into a closing purchase transaction
with respect to an option which the Fund has written, the Fund realizes a
short-term gain (or loss if the cost of the closing transaction exceeds the
premium received when the option was sold) without regard to any unrealized gain
or loss on the underlying security, and the liability related to such option is
extinguished. If a call option which a Fund has written is exercised, the Fund
realizes a capital gain or loss from the sale of the underlying security and the
proceeds from such sale are increased by the premium originally received.
The premium paid by a Fund for the purchase of a put option is recorded
in the Fund's assets and liabilities as an investment and subsequently adjusted
daily to the current market value of the option. For example, if the current
market value of the option exceeds the premium paid, the excess would be
unrealized appreciation and, conversely, if the premium exceeds the current
market value, such excess would be unrealized depreciation. The current market
value of a purchased option is the last sale price on the principal exchange on
which such option is traded or, in the absence of a sale, the mean between the
last bid and asked prices. If an option which a Fund has purchased expires on
the stipulated expiration date, the Fund realizes a short-term or long-term
capital loss for Federal income tax purposes in the amount of the cost of the
option. If a Fund exercises a put option, it realizes a capital gain or loss
(long-term or short-term, depending on the holding period of the underlying
security) from the sale which will be decreased by the premium originally paid.
The amount of any realized gain or loss on closing out options on
certain stock indices will result in a realized gain or loss for tax purposes.
Such options held by a Fund at the end of each fiscal year on a broad-based
stock index will be required to be "marked-to-market" for Federal income tax
purposes. Sixty percent of any net gain or loss recognized on such deemed sales
or on any actual sales will be treated as long-term capital gain or loss, and
the remainder will be treated as short-term capital gain or loss ("60/40 gain or
loss"). Certain options, futures contracts and options on futures contracts
utilized by the Funds are "Section 1256 contracts." Any gains or losses on
Section 1256 contracts held by a Fund at the end of each taxable year (and on
October 31 of each year for purposes of the 4% excise tax) are
"marked-to-market" with the result that unrealized gains or losses are treated
as though they were realized and the resulting gain or loss is treated as a
60/40 gain or loss.
Shareowners will be subject to Federal income taxes on distributions
made by the Funds whether received in cash or additional shares of the Funds.
Distributions of net investment income and net short-term capital gains, if any,
will be taxable to shareowners as ordinary income. Distributions of net capital
gains (the excess of net capital gains over net short-term capital losses), if
any, will be taxable to shareowners as 28% rate gains or 20% rate gains, without
regard to how long a shareowner has held shares of a Fund. A loss on the sale of
shares held for six months or less will be treated as a long-term capital loss
to the extent of any long-term capital gain dividend paid to the shareowner with
respect to such shares. Dividends paid by a Fund may qualify in part for the 70%
dividends-received deduction for corporations, provided however, that those
shares have been held for at least 45 days.
An investment in Chicago Trust Municipal Bond Fund is not intended to
constitute a balanced investment program. Shares of this Fund would not be
suitable for tax-exempt institutions and may not be suitable for retirement
plans qualified under Section 401 of the Code, H.R. 10 plans, and IRAs since
such plans and accounts are generally tax-exempt and, therefore, not only would
the shareowner receive less income and not gain any benefit from the Fund's
dividend being tax-exempt, but such dividends would be ultimately taxable to the
beneficiaries when distributed.
In order for Chicago Trust Municipal Bond Fund to pay exempt-interest
dividends for any taxable year, at the close of each taxable quarter, at least
50% of the aggregate value of the Fund's portfolio must consist of
exempt-interest obligations. Within 60 days after the close of its taxable year,
the Fund will notify its shareowners of the portion of the dividends paid by the
Fund which constitutes exempt-interest dividends with respect to such taxable
year.
The Funds will notify shareowners each year of the amount of dividends
and distributions, including the amount of any distribution of 28% rate gains
and 20% rate gains, and the portion of its dividends which qualify for the 70%
deduction.
Dividends and distributions also may be subject to state and local
taxes. Shareowners are urged to consult their tax advisors regarding specific
questions as to Federal, state and local taxes.
The foregoing discussion relates solely to U.S. Federal income tax law.
Non-U.S. investors should consult their tax advisors concerning the tax
consequences of ownership of shares of the Funds, including the possibility that
distributions may be subject to a 30% United States withholding tax (or a
reduced rate of withholding provided by treaty).
PERFORMANCE INFORMATION
In General
From time to time, the Company may include general comparative
information, such as statistical data regarding inflation, securities indices or
the features or performance of alternative investments, in advertisements, sales
literature and reports to shareowners. The Company may also include
calculations, such as hypothetical compounding examples or tax-free compounding
examples, which describe hypothetical investment results in such communications.
Such performance examples will be based on an express set of assumptions and are
not indicative of the performance of any Fund. In addition, the Company may
include charts comparing various tax-free yields versus taxable yield
equivalents at different income levels.
From time to time, the yield and total return of a Fund may be quoted
in advertisements, shareowner reports or other communications to shareowners.
Total Return Calculations
The Funds that compute their average annual total returns do so by
determining the average annual compounded rates of return during specified
periods that equate the initial amount invested to the ending redeemable value
of such investment. This is done by dividing the ending redeemable value of a
hypothetical $1,000 initial payment by $1,000 and raising the quotient to a
power equal to one divided by the number of years (or fractional portion
thereof) covered by the computation and subtracting one from the result. This
calculation can be expressed as follows:
Average Annual Total Return = [(ERV) 1/n
P ] -1
Where: ERV = ending redeemable value at the end of the period covered by the
computation of a hypothetical $1,000 payment made at the
beginning of the period
P = hypothetical initial payment of $1,000
n = period covered by the computation, expressed in terms of years
The Funds that compute their aggregate total returns over a specified
period do so by determining the aggregate compounded rate of return during such
specified period that likewise equates over a specified period the initial
amount invested to the ending redeemable value of such investment. The formula
for calculating aggregate total return is as follows:
<PAGE>
Aggregate Annual Total Return = (ERV)
P-1
Where: ERV = ending redeemable value at the end of the period covered by the
computation of a hypothetical $1,000 payment made at the
beginning of the period
P = hypothetical initial payment of $1,000
The calculations of average annual total return and aggregate total
return assume the reinvestment of all dividends and capital gain distributions
on the reinvestment dates during the period. The ending redeemable value
(variable "ERV" in each formula) is determined by assuming complete redemption
of the hypothetical investment and the deduction of all nonrecurring charges at
the end of the period covered by the computations. Such calculations are not
necessarily indicative of future results and do not take into account Federal,
state and local taxes that shareowners must pay on a current basis.
Since performance will fluctuate, performance data for the Funds should
not be used to compare an investment in the Funds' shares with bank deposits,
savings accounts and similar investment alternatives which often provide an
agreed or guaranteed fixed yield for a stated period of time. Shareowners should
remember that performance is generally a function of the kind and quality of the
instruments held in a portfolio, portfolio maturity, operating expenses and
market conditions.
The average annual total returns for the Funds which quote such
performance were as follows for the periods shown:
<TABLE>
<CAPTION>
<S> <C> <C>
One Year From Inception
Series Ended of Fund through
10/31/97 10/31/97
Montag & Caldwell Growth Fund Class N 33.82 31.92
Montag & Caldwell Growth Fund Class I 34.26 33.56
Chicago Trust Growth & Income Fund 25.16 20.78
Chicago Trust Talon Fund 33.47 26.08
Chicago Trust Balanced Fund 20.10 18.20
Montag & Caldwell Balanced Fund 24.26 22.83
Chicago Trust Bond Fund 8.84 6.56
Chicago Trust Municipal Bond Fund 5.13 4.07
</TABLE>
Yield of Chicago Trust Money Market Fund
As summarized in the Prospectus, the yield of this Fund for a seven-day
period (the "base period") will be computed by determining the net change in
value (calculated as set forth below) of a hypothetical account having a balance
of one share at the beginning of the period, dividing the net change in account
value by the value of the account at the beginning of the base period to obtain
the base period return, and multiplying the base period return by 365/7 with the
resulting yield figure carried to the nearest hundredth of one percent. Net
changes in value of a hypothetical account will include the value of additional
shares purchased with dividends from the original share and dividends declared
on both the original share and any such additional shares, but will not include
realized gains or losses or unrealized appreciation or depreciation on portfolio
investments. Yield may also be calculated on a compound basis (the "effective
yield") which assumes that net income is reinvested in shares of the Fund at the
same rate as net income is earned for the base period.
The yield and effective yield of Chicago Trust Money Market Fund will
vary in response to fluctuations in interest rates and in the expenses of the
Fund. For comparative purposes, the current and effective yields should be
compared to current and effective yields offered by competing financial
institutions for the same base period and calculated by the methods described
above. For the seven-day period ended October 31, 1997, Chicago Trust Money
Market Fund had a yield of 5.22% and an effective yield of 5.32%.
Yields of Chicago Trust Bond Fund and Chicago Trust Municipal Bond Fund
The yield of each of these Funds is calculated by dividing the net
investment income per share (as described below) earned by the Fund during a
30-day (or one month) period by the maximum offering price per share on the last
day of the period and annualizing the result on a semi-annual basis by adding
one to the quotient, raising the sum to the power of six, subtracting one from
the result and then doubling the difference. A Fund's net investment income per
share earned during the period is based on the average daily number of shares
outstanding during the period entitled to receive dividends and includes
dividends and interest earned during the period minus expenses accrued for the
period, net of reimbursements.
This calculation can be expressed as follows:
YIELD = 2 [(a - b + 1) - 1]6
cd
Where: a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends
d = maximum offering price per share on the last day of the
period
For the purpose of determining net investment income earned during the
period (variable "a" in the formula), dividend income on equity securities held
by a Fund is recognized by accruing 1/360 of the stated dividend rate of the
security each day that the security is in the Fund. Except as noted below,
interest earned on any debt obligations held by a Fund is calculated by
computing the yield to maturity of each obligation held by that Fund based on
the market value of the obligation (including actual accrued interest) at the
close of business on the last business day of the month, the purchase price
(plus actual accrued interest) and dividing the result by 360 and multiplying
the quotient by the market value of the obligation (including actual accrued
interest) in order to determine the interest income on the obligation for each
day of the subsequent month that the obligation is held by that Fund. For
purposes of this calculation, it is assumed that each month contains 30 days.
The date on which the obligation reasonably may be expected to be called or, if
none, the maturity date. With respect to debt obligations purchased at a
discount or premium, the formula generally calls for amortization of the
discount premium. The amortization schedule will be adjusted monthly to reflect
changes in the market values of such debt obligations.
Expenses accrued for the period (variable "b" in the formula) include
all recurring fees charged by a Fund to all shareowner accounts in proportion to
the length of the base period and the Fund's mean (or median) account size.
Undeclared earned income will be subtracted from the offering price per capital
share (variable "d" in the formula).
Interest earned on tax-exempt obligations that are issued without
original issue discount and have a current market discount is calculated by
using the coupon rate of interest instead of the yield to maturity. In the case
of tax-exempt obligations that are issued with original issue discount but which
have discounts based on current market value that exceed the then-remaining
portion of the original discount (market discount), the yield to maturity is the
imputed rate based on the original issue discount calculation. On the other
hand, in the case of tax-exempt obligations that are issued with original issue
discount but which have discounts based on current market value that are less
than the then-remaining portion of the original discount (market premium), the
yield to maturity is based on the market value.
With respect to mortgage- or other receivables-backed obligations which
are expected to be subject to monthly payments of principal and interest
("pay-downs"): (i) gain or loss attributable to actual monthly pay-downs are
accounted for as an increase or decrease to interest income during the period;
and (ii) each Fund may elect either (a) to amortize the discount and premium on
the remaining security, based on the cost of the security, to the weighted
average maturity date, if such information is available, or to the remaining
term of the security, if any, if the weighted average date is not available or
(b) not to amortize discount or premium on the remaining security.
For the 30-day period ended October 31, 1997, Chicago Trust Bond Fund
had a yield of 5.74%.
For the 30-day period ended October 31, 1997, Chicago Trust Municipal
Bond Fund had a yield of 3.40%.
Tax-Equivalent Yield
The "tax-equivalent yield" of Chicago Trust Municipal Bond Fund is
computed by: (a) dividing the portion of the yield (calculated as above) that is
exempt from Federal income tax by one minus a stated Federal income tax rate;
and (b) adding to that figure to that portion, if any, of the yield that is not
exempt from Federal income tax.
The tax-equivalent yield of this Fund reflects the taxable yield that
an investor at the stated marginal Federal income tax rate would have to receive
to equal the primarily tax-exempt yield from Chicago Trust Municipal Bond Fund.
Before investing in this Fund, you may want to determine which investment --
tax-free or taxable -- will result in a higher after-tax yield. To do this,
divide the yield on the tax-free investment by the decimal determined by
subtracting from one the highest Federal tax rate you pay. For example, if the
tax-free yield is 5% and your maximum tax bracket is 36%, the computation is:
5% Tax-Free Yield - (1/.36 Tax Rate) = 5%/.64% = 7.81% Tax Equivalent Yield
In this example, your after-tax return would be higher from the 5%
tax-free investment if available taxable yields are below 7.81%. Conversely, the
taxable investment would provide a higher yield when taxable yields exceed
7.81%.
For the 30-day period ended October 31, 1997, Chicago Trust Municipal
Bond Fund had a tax-equivalent yield of 5.31%, based on the tax-free yield of
3.40%, shown above, and assuming a shareowner is at the 36% Federal income tax
rate.
OTHER INFORMATION
Statements contained in the Prospectus or in this Statement of
Additional Information as to the contents of any contract or other document
referred to are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement of which the Prospectus and this Statement of Additional
Information forms a part. Each such statement is qualified in all respects by
such reference.
Custodian
Bankers Trust Company ("Bankers Trust"), 16 Wall Street, New York, New
York 10005 serves as Custodian of the Company's assets pursuant to a Custodian
Agreement. Under such Agreement, Bankers Trust: (i) maintains a separate account
or accounts in the name of each Fund; (ii) holds and transfers portfolio
securities on account of each Fund; (iii) accepts receipts and makes
disbursements of money on behalf of each Fund; (iv) collects and receives all
income and other payments and distributions on account of each Fund's
securities; and (v) makes periodic reports to the Board of Trustees concerning
each Fund's operations.
Reports to Shareowners
Shareowners will receive unaudited semi-annual reports describing the
Funds' investment operations and annual financial statements audited by the
Funds' independent certified public accountants. Inquiries regarding the Funds
may be directed to the Investment Advisor or the Administrator at (800)
992-8151.
KPMG Peat Marwick LLP, 303 E. Wacker Drive, Chicago, Illinois is the
Company's independent public accountant and auditor.
<PAGE>
APPENDIX
FINANCIAL STATEMENTS
for
Montag & Caldwell Growth Fund
Chicago Trust Growth & Income Fund
Chicago Trust Talon Fund
Chicago Trust Balanced Fund
Montag & Caldwell Balanced Fund
Chicago Trust Bond Fund
Chicago Trust Municipal Bond Fund
Chicago Trust Money Market Fund
Fiscal Year Ended
October 31, 1997
ANNUAL REPORT TO SHAREOWNERS
CT&T
FUNDS
Annual
Report
October 31, 1997
[ART WORK APPEARS HERE]
A Report on the Operations and Performance of Your Investment in
Montag & Caldwell Growth Fund
Chicago Trust Growth & Income Fund
Chicago Trust Talon Fund
Chicago Trust Balanced Fund
Montag & Caldwell Balanced Fund
Chicago Trust Bond Fund
Chicago Trust Municipal Bond Fund
Chicago Trust Money Market Fund
The Chicago Trust Company, Investment Advisor
Montag & Caldwell, Inc., Investment Advisor
(800) 992-8151
<PAGE>
CT&T Funds -- Shareowner Benefits
- --------------------------------------------------------------------------------
The CT&T Funds offer a variety of special features and options for shareowners.
If you are not already taking advantage of these features and wish to do so,
call us! A customer service representative at (800) 992-8151 will help you gain
access to our free share owner options.
[ART WORK]
Low Minimum Investments
The minimum initial investment is $2,500 and any subsequent investment is $50.
[ART WORK]
Automatic Investment
You may elect to make regular investments into your account automatically by
approving electronic funds transfers into your CT&T Funds. The minimum initial
investment for the automatic investment plan is $50.
[ART WORK]
Savings for Retirement
Our easy and convenient IRA offers you a selection of mutual funds especially
suitable for your retirement accounts while your assets benefit from tax-
deferred growth.
[ART WORK]
Automatic Dividend Reinvestment
You can compound your investment earnings by reinvesting them automatically.
Monthly or quarterly dividends and annual capital gain distributions are
reinvested free of charge.
[ART WORK]
Exchange Privileges
Should your personal investment needs change, you have the flexibility to move
your investments among the CT&T Funds. Transfers between the Funds are free of
charge, and simple to make.
[ART WORK]
Check Writing
Free check writing services may be authorized and are available in the Chicago
Trust Money Market Fund. The per check minimum is $500.
Our automated shareowners account information line is available for your
convenience 24-hours a day, 7 days a week by calling (800) 992-8151.
<PAGE>
Dear Shareowner:
The fiscal year ended October 31, 1997 has been financially rewarding for all
investors in our funds. Holders of our equity portfolios have realized returns
ranging from 25.2% in the Chicago Trust Growth & Income Fund (Growth & Income)
to 34.3% in the Montag & Caldwell Growth Fund (Growth) "I" Class of shares. Our
Chicago Trust Talon Fund (Talon) has earned a very impressive 33.5% total return
despite holding significant cash reserves throughout the period. Fixed income
returns have ranged from 5.1% in our tax-free Municipal Bond Fund to 8.8% in the
taxable Bond Fund. Holders of our Money Market Fund have realized a 5.17% return
over the past twelve months.
Obviously, there is more information printed about mutual funds than anyone can
reasonably read or would want to read. However, on the assumption that most of
our shareowners do not read all of the financial advisory publications now
available, we thought you might like to know a sample of who has written about
our Funds during the last twelve months.
<TABLE>
<CAPTION>
Publication Date Funds
- ----------- ---- -----
<S> <C> <C>
Crain's Chicago Business December 23, 1996 Growth & Income
"Chicago Trust Fund
Manager Takes Long Views in Stock Picks"
Kiplinger's Magazine March 1997 Growth
"Best Funds: Investing for College"
Money Magazine March 1997 Growth
"Invest Like a Millionaire with these Funds"
Ft. Lauderdale Sun-Sentinel May 11, 1997 Growth & Income
"A Few Strong Growth Stocks Power Chicago Trust"
Financial Planning Magazine May 1997 Growth & Income, Talon
"Undiscovered Funds Still Abound"
Louis Rukeyser's Mutual Funds September 1997 Growth & Income
"A Wealth of Experience"
Louis Rukeyser's Mutual Funds October 1997 Growth
"A Global Opportunist"
Money Magazine November 1997 Talon
"What to Do Now to Protect Your Profits"
</TABLE>
It is customary in letters of this sort to fill space with prognostications
about the economic and financial outlook. We do not believe that is a very
useful exercise in a world where the batting average of most forecasters is less
than 50%. Instead, we wish to assure you that despite recent market returns our
enthusiasm will remain in check. We will continue to pursue our bottom-up
disciplined investment approaches, choosing securities based on fundamentals of
the business and our time-tested valuation techniques.
To all of our long-term investors, we hope we have met your expectations. To our
newer investors, we thank you for choosing the Chicago Trust/Montag & Caldwell
Funds. We will do all that we can to help you reach your financial goals. In
March 1998, to enhance and simplify your investment process, we will introduce
our website. Thank you for investing with Chicago Trust/Montag & Caldwell Funds.
Sincerely,
/s/ Stuart D. Bilton
Stuart D. Bilton
Chairman
1
<PAGE>
CT&T Funds -- Summary Information
Performance for the Fiscal Year Ended October 31, 1997
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Montag & Caldwell Growth Fund
Class N (Retail) Class I (Institutional) Chicago Trust Growth & Income Fund
<S> <C> <C> <C>
Total Returns:
1 Year 33.82% 34.26% 25.16%
Three Year
Average Annual N/A N/A 26.93%
Average Annual
Since Inception 31.92% 33.56% 20.78%
Value of $10,000 $22,925 $ 14,724 $20,801
from Inception
Date 11/2/94 6/28/96 12/13/93
</TABLE>
<TABLE>
<CAPTION>
Top Ten Holdings as of October 31, 1997
<S> <C> <C> <C>
Company and Cisco Systems, Inc. 4.5% Federal Home Loan Mortgage Corp. 3.9%
% of Total Net Microsoft Corp. 4.0% Illinois Tool Works, Inc. 3.9%
Assets Gillette Co. 4.0% Royal Dutch Petroleum Co., NY, ADR 3.9%
Pfizer, Inc. 3.8% American International Group, Inc. 3.8%
Coca-Cola Co. 3.8% Norwest Corp. 3.8%
Procter & Gamble Co. 3.7% Cardinal Health, Inc. 3.7%
Johnson & Johnson 3.6% Pfizer, Inc. 3.6%
Intel Corp. 3.2% Microsoft Corp. 3.5%
Oracle Corp. 3.2% Newell Co. 3.3%
Home Depot, Inc. 3.2% Sysco Corp. 3.2%
</TABLE>
<TABLE>
<CAPTION>
Chicago Trust Talon Fund Chicago Trust Balanced Fund
<S> <C> <C>
Total Returns:
1 Year 33.47% 20.10%
Three Year
Average Annual 26.16% N/A
Average Annual
Since Inception 26.08% 18.20%
Value of $10,000 $20,582 $14,229
from Inception
Date 9/19/94 9/21/95
</TABLE>
<TABLE>
<CAPTION>
Top Ten Holdings as of October 31, 1997
<S> <C> <C> <C>
Company and Mylan Laboratories, Inc. 5.4% Pfizer, Inc. 2.3%
% of Total Net U. S. Treasury Note, 5.875%, 07/31/99 5.3% Norwest Corp. 2.0%
Assets Vitalink Pharmacy Services, Inc. 5.1% American International Group, Inc. 1.9%
Robotic Vision Systems, Inc. 5.1% Schlumberger Ltd. 1.9%
Circus Circus Enterprises, Inc. 4.9% Federal Home Loan Mortgage Corp. 1.8%
North American Vaccine, Inc. 4.9% Cisco Systems, Inc. 1.7%
Pep Boys -- Manny, Moe & Jack 4.9% Microsoft Corp. 1.7%
R.R. Donnelley & Sons Co. 4.7% Illinois Tool Works, Inc. 1.7%
Danielson Holdings Corp. 4.4% MBNA Corp. 1.7%
Equity Office Properties Trust, REIT 4.3% Newell Co. 1.5%
</TABLE>
2
<PAGE>
CT&T Funds -- Summary Information
Performance for the Fiscal Year Ended October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Montag & Caldwell Balanced Fund Chicago Trust Bond Fund
<S> <C> <C> <C> <C>
Total Returns:
1 Year 24.26% 8.84%
Three Year
Average Annual N/A 9.77%
Average Annual
Since Inception 22.83% 6.56%
Value of $10,000 $18,509 $12,797
from Inception
Date 11/2/94 12/13/93
Top Ten Holdings as of October 31, 1997
<S> <C> <C> <C> <C>
Company and U.S. Treasury Note, 7.250%, 05/15/16 4.1% U.S. Treasury Bond, 7.125%, 02/15/23 2.3%
% of Total Net U.S. Treasury Note, 6.500%, 10/15/06 3.1% U.S. Treasury Note, 7.250%, 05/15/04 2.2%
Assets Cisco Systems, Inc. 2.5% U.S. Treasury Note, 7.875%, 08/15/01 2.2%
U.S. Treasury Note, 6.500%, 08/15/05 2.5% U.S. Treasury Note, 7.125%, 02/29/00 2.1%
Federal National Mortgage Association, U.S. Treasury Note, 6.375%, 08/15/02 2.1%
7.250%, 01/17/21, CMO, REMIC 2.5% U.S. Treasury Note, 5.750%, 10/31/00 2.1%
U.S. Treasury Note, 5.875%, 02/15/04 2.4% U.S. Treasury Note, 5.500%, 02/28/99 2.1%
Gillette Co. 2.3% U.S. Treasury Note, 5.750%, 08/15/03 2.1%
Procter & Gamble Co. 2.2% U.S. Treasury Note, 5.125%, 11/30/98 2.1%
Microsoft Corp. 2.2% Chemical Master Credit Card Trust, Class A
Johnson & Johnson 2.2% 5.550%, 09/15/03 2.1%
</TABLE>
<TABLE>
<CAPTION>
Chicago Trust Municipal Bond Fund
<S> <C> <C> <C>
Total Returns:
1 Year 5.13%
Three Year
Average Annual 5.97%
Average Annual
Since Inception 4.07%
Value of $10,000 $11,673
from Inception
Date 12/13/93
Top Ten Holdings as of October 31, 1997
<S> <C> <C> <C> <C>
Company and King County, Washington, Series A, Commonwealth of Puerto Rico, Series A, G.O.
% of Total Net G.O., 5.800%, 01/01/04 4.1% 6.500%, 07/01/03 3.6%
Assets Jordan School District, Utah, Clark County, Nevada, School District, G.O.
Series A, G.O., 5.250%, 06/15/00 4.0% 6.400%, 06/15/06 3.1%
Cook County, Illinois, Series B, G.O. Arlington Independent School District, Texas,
4.700%, 11/15/01 3.9% Refunding, G.O., 5.400%, 02/15/99 3.1%
Salt River Project Electric System Mohave County, AZ, IDA, 6.000%, 07/01/00 3.0%
Revenue, AZ, Refunding, Series A, Tulsa, Oklahoma Metropolitan Utility Authority
5.500%, 01/01/05 3.9% Revenue, 5.500%, 07/01/00 2.9%
Texas State Water Development Board,
G.O. Escrowed to Maturity, 5.000%,
08/01/99 3.7%
</TABLE>
3
<PAGE>
CT&T Funds
Montag & Caldwell Growth Fund
Management Discussion & Analysis October 31, 1997
- --------------------------------------------------------------------------------
The Montag & Caldwell Growth Fund (the "Fund") did particularly well in this
past fiscal year ended October 31, 1997. The Fund had a total return of 33.8% as
compared to a gain of 32.0% for the S&P 500 Index. During this same period, the
Lipper Growth Fund Index returned 28.4%. The Fund's multinational consumer,
healthcare and technology holdings contributed to the Fund's good results.
The outlook for the stock market continues to be positive. Sustained growth in
the economy and corporate profits; continued prospects for low rates of
inflation and steady to eventually lower levels of bond yields; and favorable
supply/demand factors for equities coupled with guarded views among investors on
the stock market outlook suggest a positive backdrop for share prices. It is our
view that the recent stock market correction associated with the currency
turmoil in Southeast Asia is an "overdue correction" rather than the beginning
of a substantial decline in share prices. From January 1, 1995, through
September 30, 1997, the S&P 500 Index has provided a total return of 119.3%, so
a pullback in share prices was not all that surprising. Our favorable view on
the stock market is predicated on the belief that U. S. economic growth will
moderate to a non-inflationary rate and that the Federal Reserve is in a
flexible position to implement policies that will extend the economic expansion.
The currency and financial market turmoil in Southeast Asia should contribute to
that moderating process.
We continue to be quite positive on the outlook for shares of high quality
growth companies. Because we expect more moderate growth in the U. S. economy
and corporate profits in the future, superior and consistent earnings growth
rates of these companies will become increasingly attractive. We do not expect
the turmoil in Southeast Asia to have a significant impact on the U. S.
multinational companies in the Fund. While economic growth will slow in
Southeast Asia, the region is not expected to experience an economic downturn as
severe as that of Mexico and other Latin American countries during their period
of financial stress. Most importantly, the multinational companies in the
Portfolio sell consumer non-durable products that we don't think will be
affected proportionately by a slowdown. Even in a U.S. recession, demand does
not slow significantly for products such as soft drinks, blades and detergent.
Also, other areas of the world are showing good growth, which offsets the
weakness in Southeast Asia. Such geographic diversity is one of the reasons the
Fund's multinational holdings have consistently produced solid earnings over the
years.
[PIE CHART APPEARS HERE]
Portfolio Allocation By Market Sector
Cash & Other Net Liabilities 3%
Technology 28%
Consumer Non-Durables 15%
Pharmaceuticals 9%
Health Care Services 7%
Retail 6%
Finance 7%
Food & Beverage 6%
Other Common Stocks 19%
Comparative Performance Measurement: Growth of $10,000 Invested in Montag &
Caldwell Growth Fund,
S&P 500 Index and the Lipper Growth Fund Index
since Fund's Inception
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Montag &
Caldwell
Lipper Growth Fund
S&P 500 Growth Class N
Values/Years Index Fund Index Shares
- ------------ ------- ---------- -----------
<S> <C> <C> <C>
November 1994 10,000 10,000 10,000
January 1995 10,032 9,739 10,005
April 1995 11,046 10,699 10,999
July 1995 12,142 12,075 12,630
October 1995 12,641 12,398 13,187
January 1996 13,907 13,183 14,178
April 1996 14,380 13,789 15,065
July 1996 14,152 13,145 14,874
October 1996 15,685 14,498 17,131
January 1997 17,568 15,915 19,367
April 1997 17,992 15,733 19,245
July 1997 21,527 18,897 23,571
October 1997 20,720 18,617 22,925
</TABLE>
<TABLE>
<CAPTION>
Montag &
Caldwell
Lipper Growth Fund
S&P 500 Growth Class I
Values/Years Index Fund Index Shares
- ------------ ------- ---------- -----------
<S> <C> <C> <C>
June 1996 10,000 10,000 10,000
October 1996 10,593 10,433 10,967
January 1997 11,865 11,453 12,087
April 1997 12,152 11,322 12,341
July 1997 14,539 13,598 15,125
October 1997 13,994 13,397 14,724
</TABLE>
These charts compare a $10,000 investment made in Class N Shares and Class I
Shares of the Fund on their respective inception dates to a $10,000 investment
made in the indices on that date. All dividends and capital gains are
reinvested. Further information relating to the Fund's performance, including
expense reimbursements, is contained in the Condensed Financial Information
section of the Prospectus and elsewhere in this report. Past performance is not
indicative of future performance. Indices are unmanaged and investors cannot
invest in them.
4
<PAGE>
CT&T Funds
Chicago Trust Growth & Income Fund
Management Discussion & Analysis October 31, 1997
================================================================================
The Chicago Trust Growth & Income Fund (the"Fund")had a strong gain of 25.2% for
the fiscal year ended October 31, 1997. While the one year return was less than
that of the S&P 500 Index or the Lipper Growth & Income Fund Index, on a three
year basis, the Fund's 26.9% annualized rate of return was in line with that of
the S&P 500 Index, at 27.5%. The Fund's return was well above that of the Lipper
Growth & Income Fund Index, at 23.2%. The Fund ranked 43rd out of 382 Growth &
Income Funds listed by Lipper Analytical Services, Inc. based on total return
fund performance for the three-year period ended October 31, 1997. These Lipper
rankings include all classes of multiple class funds, and certain expenses of
the Fund were subsidized during the ranking period.
While the stock market's gain in fiscal 1997 was the strongest of the past three
years, there was little doubt that the advance became more labored during the
closing months of the year. Two of the last three months were down with the
final quarter having the poorest return for any such period during the last
three fiscal years. October was particularly volatile as it incorporated the
often anticipated 10% market correction, several single day price change
records, and a single session volume record.
As a long-term investor, we recognize that volatility may occur in the Portfolio
during periods when the stock market is dominated by themes which are contrary
to the Fund's investment strategy. Our long term stock selection process will
continue to focus on fundamentally strong companies which are able to
demonstrate traits of consistent top and bottom line growth. Volatile markets
may result in short-term underperformance, but can also represent attractive
entry points for long-term investors.
[PIE CHART APPEARS HERE]
Portfolio Allocation By Market Sector
Consumer Durables 6%
Capital Goods 6%
Energy 7%
Consumer Non-Durables 11%
Health Care Services 10%
Technology 14%
Other Common Stocks 19%
Cash & Other Net Assets 6%
Finance 21%
Comparative Performance Measurement: Growth of
$10,000 invested in Chicago Trust Growth & Income Fund,
S&P 500 Index and the Lipper Growth & Income Fund
Index since Fund's Inception
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
LIPPER GROWTH CHICAGO TRUST
S&P & INCOME FUND GROWTH &
Values/Years 500 INDEX INDEX INCOME FUND
- ------------ ---------- ------------- -------------
<S> <C> <C> <C>
12/93 $10,000 $10,000 $10,000
4/94 $ 9,745 $ 9,807 $ 9,797
7/94 $ 9,979 $ 9,993 $ 9,945
10/94 $10,360 $10,241 $20,173
1/95 $10,394 $10,115 $10,365
4/95 $11,444 $11,036 $11,231
7/95 $12,580 $12,011 $12,327
10/95 $13,096 $12,318 $13,088
1/96 $14,408 $13,448 $14,350
4/96 $14,898 $14,021 $14,983
7/96 $14,663 $13,587 $14,933
10/96 $16,250 $14,953 $16,619
1/97 $18,201 $16,463 $18,002
4/97 $18,641 $16,616 $18,258
7/97 $22,303 $19,584 $21,812
10/97 $21,466 $19,144 $20,801
</TABLE>
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the indices on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Condensed
Financial Information section of the Prospectus and elsewhere in this report.
Past performance is not indicative of future performance. Indices are unmanaged
and investors cannot invest in them.
5
<PAGE>
CT&T Funds
Chicago Trust Talon Fund
Management Discussion & Analysis October 31, 1997
================================================================================
For the fiscal year ending October 31, 1997, the Chicago Trust Talon Fund (the
"Fund") had a total return of 33.5% versus 32.7% for the S&P 400 Mid Cap Index.
From its inception on September 19, 1994 through October 31, 1997, the Fund's
cumulative return was 105.8% versus 88.4% for the S&P 400 Mid Cap Index.
The recent disarray in Asian markets points out that diversification in itself
may not protect one from loss of principal and that globalization can work as
unfavorably for corporate profits on the way down as it does favorably on the
way up. Globalization and diversification will be subjects of future quarterly
reports. We hope that previous quarterly reports have been helpful in conveying
our investment philosophy and thought process. If you are a new shareowner and
would like to receive a few of our past quarterly reports, please call Janice
Gonnella at 312-422-5403.
We believe we are entering a period that will be characterized by greater
volatility and that stock picking will become even more important than in the
recent past. As we enter our new fiscal year, patience and discipline will
remain a cornerstone of our investment process.
Talon Asset Management, Inc. is a sub-agent of the Chicago Trust Company. As
such, we are responsible for managing your Fund. We at Talon would like to
express our appreciation to Chicago Trust for that opportunity and for their
patience and support over the last three years. The Talon "personality", which
has taken shape over that period of time, could not have happened without the
confidence that both Chicago Trust and you, our shareowners, have placed in us.
[PIE CHART APPEARS HERE]
Portfolio Allocation By Market Sector
<TABLE>
<CAPTION>
<S> <C>
Cash & Other Net Liabilities 3%
Finance 12%
Pharmaceuticals 15%
Restaurants 6%
Technology 11%
Other Common Stocks 26%
Preferred Stocks 1%
U.S. Government & Agency Obligations 26%
</TABLE>
Comparative Performance Measurement: Growth of $10,000
invested in Chicago Trust Talon Fund and
the S&P 400 Mid Cap Index since Fund's Inception
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
S&P 400 CHICAGO TRUST
VALUES/YEARS MID CAP INDEX TALON FUND
------------ ------------- ----------
<S> <C> <C>
9/94 $10,000 $10,000
10/94 $ 9,921 $10,250
1/95 $ 9,660 $10,151
4/95 $10,551 $10,766
7/95 $11,829 $12,173
10/95 $12,025 $12,189
1/96 $12,701 $12,762
4/96 $13,695 $14,580
7/96 $12,747 $13,530
10/96 $14,111 $15,420
1/97 $15,482 $18,020
4/97 $15,082 $16,935
7/97 $18,531 $20,074
10/97 $18,721 $20,582
</TABLE>
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the indices on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Condensed
Financial Information section of the Prospectus and elsewhere in this report.
Past performance is not indicative of future performance. Indices are unmanaged
and investors cannot invest in them.
6
<PAGE>
CT&T Funds
Chicago Trust Balanced Fund
Management Discussion & Analysis October 31, 1997
================================================================================
For the fiscal year ended October 31, 1997 the Chicago Trust Balanced Fund (the
"Fund") reported a total return of 20.1%. Again this year, common stocks
produced the greatest component of total return. The equities in the Portfolio
returned 32% and bonds produced approximately 11.5%, for this fiscal year. Both
bond and equity returns were competitive when measured against the S&P 500 Index
return of 32.5% and the Lehman Brothers Aggregate Bond Index return of 10.1%.
Over the course of the year, the asset allocation for stocks remained in the 52%
to 56% range and bonds in the 34% to 39% range, while cash reserves were
maintained in the 6% to 11% range.
When reviewing stock market history, October is many times the cruelest month of
the year--consider 1929 and 1987. Again, on October 27, 1997, the stock market
experienced a significant drop of 554 points. Such volatility demonstrates the
advantages of a balanced fund. Over the past few years, a debate has been
brewing in academic circles regarding the value and contribution of asset
allocation. A 1986 research study by Brinson, Hood and Beebower contends that,
on average, 93.6% of a portfolio return is explained by the mix of stocks, bonds
and cash. Other studies contend that asset mix explains approximately 20% to 25%
of return. We continue to believe that asset allocation is incredibly important
in your total long-term return and a well diversified balanced fund can enhance
your expected return.
The outlook for equity investment remains positive but investors should exercise
caution in making new investment commitments with special attention paid to
valuation levels on individual stocks and bonds. This is no time to "pay up" for
stocks and bonds. The Fund will continue to stress individual company
fundamentals and reasonable prices in its selection process.
Equity investment in health care, finance, energy and consumer staples has
enhanced the performance of the stock portfolio. The bond portfolio continues to
stress quality and intermediate term maturities. By diversifying investments
among various asset classes, the total risk of significant loss declines as
compared to investing in a single asset class.
[PIE CHART APPEARS HERE]
Portfolio Allocation By Market Sector
Cash & Other Net Assets 7%
Common Stocks 53%
Corporate Notes & Bonds 18%
U.S. Government & Agency Obligations 18%
Other 2%
Asset Backed Securities 2%
Comparative Performance Measurement: Growth of
$10,000 invested in Chicago Trust Balanced Fund, Lehman
Brothers Aggregate Bond Index/S&P 500 Index and the
Lipper Balanced Fund Index since Fund's Inception
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman Brothers
Aggregate
Bond Index/ Lipper
S&P 500 Balanced Chicago Trust
Values/Years Index Fund Index Balanced Fund
- -------------- --------------- ---------- -------------
<S> <C> <C> <C>
September 1995 10,000 10,000 10,000
October 1995 10,039 9,975 10,108
January 1996 10,752 10,635 10,796
April 1996 10,817 10,751 10,893
July 1996 10,783 10,616 10,926
October 1996 11,625 11,420 11,847
January 1997 12,493 12,187 12,612
April 1997 12,708 12,213 12,720
July 1997 14,481 13,874 14,438
October 1997 14,237 13,715 14,229
</TABLE>
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the indices on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Condensed
Financial Information section of the Prospectus and elsewhere in this report.
Past performance is not indicative of future performance. Indices are unmanaged
and investors cannot invest in them.
7
<PAGE>
CT&T Funds
Montag & Caldwell Balanced Fund
Management Discussion & Analysis October 31, 1997
================================================================================
The Montag & Caldwell Balanced Fund (the "Fund") achieved a strong gain of 24.3%
for the fiscal year ended October 31, 1997. During the same period, the combined
index of the S&P 500 Index and the Lehman Brothers Aggregate Bond Index
increased 21.4%. The Lipper Balanced Fund Index gained 20.1% during the same
interval. The Fund's multinational consumer, healthcare and technology equity
holdings contributed to the Fund's good results.
The outlook for the stock market continues to be positive. Sustained growth in
the economy and corporate profits; continued prospects for low rates of
inflation and steady to eventually lower levels of bond yields; and favorable
supply/demand factors for equities coupled with guarded views among investors on
the stock market outlook suggest a positive backdrop for share prices. It is our
view that the recent stock market correction associated with the currency
turmoil in Southeast Asia is an "overdue correction" rather than the beginning
of a substantial decline in share prices. From January 1, 1995, through
September 30, 1997, the S&P 500 Index has provided a total return of 119.3%, so
a pullback in share prices was not all that surprising. Our favorable view on
the stock market is predicated on the belief that U. S. economic growth will
moderate to a non-inflationary rate and that the Federal Reserve is in a
flexible position to implement policies that will extend the economic expansion.
The currency and financial market turmoil in Southeast Asia should contribute to
that moderating process.
We continue to be quite positive on the outlook for shares of high quality
growth companies. Because we expect moderate growth in the U. S. economy and
corporate profits in the future, the superior and consistent earnings growth
rates of these companies will become increasingly attractive. We do not expect
the turmoil in Southeast Asia to have a significant impact on the U. S.
multinational companies in the Portfolio. While economic growth will slow in
Southeast Asia, the region is not expected to experience an economic downturn as
severe as that of Mexico and other Latin American countries during their period
of financial stress. Most importantly, the multinational companies in the
Portfolio sell consumer non-durable products that we don't think will be
affected proportionately by a slowdown. Even in a U.S. recession, demand does
not slow significantly for products such as soft drinks, blades and detergent.
Also, other areas of the world are showing good growth, which offsets the
weakness in Southeast Asia. Such geographic diversity is one of the reasons the
Fund's multinational holdings have consistently produced solid earnings gains
over the years.
With economic growth likely to slow and inflation well-controlled, we think
there is the potential for positive bond market returns in the period ahead. In
addition to gradually lengthening bond maturities, we will seek to add yield,
where appropriate, through the purchase of quality corporate bonds as well as
agency issues.
[PIE CHART APPEARS HERE]
Portfolio Allocation By Market Sector
Cash & Other Net Assets 4%
Common Stocks 58%
U.S. Government & Agency Obligations 26%
Corporate Notes & Bonds 9%
Asset Backed Securities 3%
Comparative Performance Measurement:
Growth of $10,000 invested in Montag & Caldwell Balanced
Fund, Lehman Brothers Aggregate Bond Index/S&P 500
Index and the Lipper Balanced Fund Index
since Fund's Inception
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Lehman Brothers Aggregate Lipper Balanced Montag & Caldwell
Values/Yrs. Bond Index/ S&P Index Fund Index Balanced Fund
<S> <C> <C> <C>
11/94 10,000 10,000 10,000
1/95 10,128 9,983 10,079
4/95 10,891 10,652 10,817
7/95 11,706 11,424 11,944
10/95 12,539 11,759 12,375
1/96 13,040 12,537 13,172
4/96 13,141 12,674 13,446
7/96 13,090 12,515 13,410
10/96 14,881 13,462 14,895
1/97 15,230 14,343 16,162
4/97 15,498 14,397 16,071
7/97 17,717 16,355 18,635
10/97 17,894 16,168 18,509
</TABLE>
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the indices on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Condensed
Financial Information section of the Prospectus and elsewhere in this report.
Past performance is not indicative of future performance. Indices are unmanaged
and investors cannot invest in them.
8
<PAGE>
CT&T Funds
Chicago Trust Bond Fund
Management Discussion & Analysis October 31, 1997
- --------------------------------------------------------------------------------
Bond market performance over the twelve months ended October 31, 1997, has been
influenced by a range of circumstances. At the beginning of the fiscal year,
investors were anticipating the need for the Federal Reserve to raise interest
rates to help moderate economic growth. A federal funds overnight lending rate
increase of .25% occurred at the end of March 1997. As the year elapsed,
sentiment quickly changed. Many traditional signs of economic strength such as
low unemployment, industrial production and a declining government deficit
raised concerns. Most people felt that the Federal Reserve would be forced to
raise rates in order to avoid higher inflation. Productivity, growth and global
competition has kept inflation lower than predicted by many economic "experts."
At the time of this writing, a new theme of "deflation" has become increasingly
popular due to the renewed risks of investing in emerging market countries.
For the fiscal year ended October 31, 1997, the Chicago Trust Bond Fund (the
"Fund") had a total return of 8.84%. The Fund compares its performance to both
the Lehman Brothers Aggregate Bond Index, with a total return of 8.89% for the
same period, and the Lipper Intermediate Investment Grade Debt Fund Index, which
had a total return of 8.04% during the same period.
The Fund continues to emphasize corporates and mortgages which represent 66% of
total assets. We believe that superior returns are achieved from the results of
independent, fundamental security analysis combined with the rigorous
application of a precise, disciplined portfolio construction process. Rather
than attempting to time the market, we firmly believe in adding value through
sector analysis, credit quality research and security structure analysis. We
believe our focus on long term, intrinsic value captures yield without
increasing portfolio risk.
Throughout the year, corporate bonds contributed favorably to the Fund's
comparatively strong investment results. The Fund focuses on selecting corporate
obligations that will enhance the Fund's overall return while maintaining a
strict adherence to required risk parameters. Both asset-backed and mortgage
bonds also can provide investors with strong relative returns. Prepayment risk
is analyzed under numerous interest rate scenarios to evaluate sensitivity to
changes in rates. Government bonds are used to capture risk neutral anomalies
based on the slope of the yield curve.
Changes in the Portfolio's duration are made based on our 12- to 18-month
outlook for bond returns. We are not market timers. Duration changes are
constrained to a range of plus or minus 10% of the duration of the Lehman
Brothers Aggregate Bond Index. We will also adjust the distribution of our
Portfolio's maturity and duration based on the current slope of the yield curve
to capture incremental return and to control systematic risk. Over the last
year, the Fund's effective duration has ranged from a high of 4.7 years to a low
of 4.5 years. Currently, the effective portfolio duration is 4.6 years.
[PIE CHART PORTFOLIO ALLOCATION BY MARKET SECTOR GOES HERE]
Portfolio Allocation By Market Sector
Cash & Other Net Assests 4%
U.S. Government & Agency Obligations 47%
Corporate Notes & Bonds 40%
Other 4%
Asset Backed Securities 5%
Comparative Performance Measurement:
Growth of $10,000 invested in Chicago Trust Bond Fund,
Lehman Brothers Aggregate Bond Index and the Lipper
Intermediate Investment Grade Debt Fund Index since
Fund's Inception
[CHART COMPARATIVE PERFORMANCE MEASUREMENT GOES HERE]
<TABLE>
<CAPTION>
Lehman Brothers Aggregate Lipper Intermediate Investment Chicago Trust
Values/Yrs. Bond Index Grade Debt Fund Index Bond Fund
<S> <C> <C> <C>
12/93 10,000 10,000 10,000
4/94 9,507 9,524 9,682
7/94 9,674 9,640 9,768
10/94 9,535 9,537 9,677
1/95 9,769 9,720 9,894
4/95 10,203 10,121 10,307
7/95 10,651 10,520 10,735
10/95 11,026 10,885 11,117
1/96 11,424 11,267 11,507
4/96 11,085 10,930 11,169
7/96 11,241 11,070 11,331
10/96 11,671 11,465 11,758
1/97 11,797 11,589 11,926
4/97 11,870 11,641 11,972
7/97 12,451 12,191 12,555
10/97 12,709 12,388 12,797
</TABLE>
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the indices on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Condensed
Financial Information section of the Prospectus and elsewhere in this report.
Past performance is not indicative of future performance. Indices are unmanaged
and investors cannot invest in them.
9
<PAGE>
CT&T Funds
Chicago Trust Municipal Bond Fund
Management Discussion & Analysis October 31, 1997
- --------------------------------------------------------------------------------
Over the past year the bond markets can be characterized as having an overall
downward interest rate bias with a notable flattening of the yield curve--in
other words, rates are down and the additional yield gained from extending from
one-year to 30-year maturities has fallen. For example, in October 1996, moving
from one-year to 30 year maturities in AA-rated General Obligation bonds added
almost 2.00% in yield. This October, however, investors added only about 1.50%
in additional yield for the same extension. Also, it is typical to earn 0.10%
additional yield per year in intermediate maturities for each year of extension;
however, for most of 1997, seven- to twelve-year municipal bonds added only
0.05% to 0.07% for annual extensions.
The other significant market anomaly evident this October is the under-
performance of municipals versus taxable bonds. Expressed as a percent of U.S.
Treasury prices, municipal bonds now range from 70% to 87% for one- to 30-year
maturities. These percentages are higher than normal since U.S. Treasury yields
moved up rapidly as a result of the flight to quality from volatile equity and
international markets. Conversely, high seasonal supply in municipals held tax-
exempt bond prices down.
For the fiscal year ended October 31, 1997, total return for the Chicago Trust
Municipal Bond Fund (the "Fund") was 5.13%. The Fund earned an average annual
return of 5.97% for the three year period ended October 31, 1997. While 30-year
municipal bond yields under 6% tend to limit retail buying, this relative
"cheapness" of municipals versus taxables has increased interest in the tax-
exempt market from corporate buyers, especially insurance companies. Year to
year, municipal rates are down, with October 31, 1997, yields on five-year AA-
rated General Obligation bonds at 4.25%, 10 year maturities at 4.65%, and 30
years at 5.20%. Contributions to bond funds for most of the period were slow,
but with continuing volatility in the domestic stock market and weakness
internationally, the coming year should see greater allocations to fixed income
securities.
Activity in the Fund for the fiscal year concentrated on increasing current
income with purchases of 5% to 6% coupon bonds, as well as taking advantage of
attractive levels on issuers from "specialty" states, such as California,
Michigan, and New York. Because of local tax advantages for in-state buyers,
issuers in these states usually sell at lower yields than non-specialty issuers
such as those in Illinois, Washington, or Wisconsin, for example. Due to recent
sizable new issuance from several specialty states, we were able to take
advantage of attractive yield levels for the Fund. At October 31, 1997, the
Fund's average credit quality has been maintained at AA, average maturity at 5.6
years and duration at 4.5 years.
Comparative Performance Measurement:
Growth of $10,000 invested in Chicago Trust Municipal
Bond Fund and the Lehman Brothers Five-Year
Government Obligations Index since Fund's Inception
[COMPARATIVE PERFORMANCE MEASUREMENT CHART APPEARS HERE]
<TABLE>
<CAPTION>
LEHMAN BROTHERS
5-YEAR GOVERNMENT CHICAGO TRUST
VALUES/YEARS OBLIGATIONS INDEX MUNICIPAL BOND FUND
------------ ----------------- -------------------
<S> <C> <C>
12/93 $10,000 $10,000
1/94 $10,094 $10,106
4/94 $ 9,782 $ 9,803
7/94 $ 9,921 $ 9,922
10/94 $ 9,838 $ 9,808
1/95 $ 9,956 $ 9,958
4/95 $10,288 $10,218
7/95 $10,669 $10,518
10/95 $10,855 $10,719
1/96 $11,138 $10,969
4/96 $11,025 $10,811
7/96 $11,156 $10,935
10/96 $11,368 $11,103
1/97 $11,540 $11,230
4/97 $11,548 $11,201
7/97 $11,990 $11,600
10/97 $12,107 $11,673
</TABLE>
[PIE CHART APPEARS HERE]
Portfolio Allocation By Quality Rating
A 8%
Aa 33%
Aaa 56%
Not Rated 3%
This chart compares a $10,000 investment made in the Fund on its inception date
to a $10,000 investment made in the indices on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Condensed
Financial Information section of the Prospectus and elsewhere in this report.
Past performance is not indicative of future performance. Indices are unmanaged
and investors cannot invest in them.
10
<PAGE>
CT&T Funds
Chicago Trust Money Market Fund
Management Discussion & Analysis October 31, 1997
- --------------------------------------------------------------------------------
Once again the most recent Federal Reserve Open Market Committee meeting came
and went without a change in interest rates. Policymakers left the Federal Funds
overnight lending rate unchanged at 5.50%. This is the same rate it has been
since late March.
While domestic economic activity continues to show strength, the picture from
overseas, Southeast Asia in particular, remains cloudy. What, if any, effect
this may have on policymaking decisions in the near future remains to be seen.
The short-term yield curve remains very flat. This means that the yield earned
for investing for seven days is approximately the same as the yield for
investing for 270 days. The Chicago Trust Money Market Fund (the "Fund") is
positioned to take advantage of this type of yield curve profile. It has a
weighted average maturity of 33 days, which is almost half the average maturity
of a "typical" prime domestic money market fund.
The performance of the Fund has exceeded its benchmark, the Donaghue's First
Tier Money Market Fund Index, by 0.23% for the quarter ended October 31, 1997.
For the previous 12 months, the outperformance has been 0.20%. The low expenses
of the Fund coupled with the effective structure of the Fund have been the
primary reasons it has continued to outperform other money market funds in the
peer group.
[PIE CHART PORTFOLIO ALLOCATION BY MARKET SECTOR APPEARS HERE]
Portfolio Allocation By Market Sector
Time Deposits 4%
Certificates of Deposit 5%
Commercial Paper 77% [INSERT PIE CHART HERE]
Cash & Other Net Assets 10%
GIC within Funding Agreement 4%
11
<PAGE>
CT&T Funds
Montag & Caldwell Growth Fund
Schedule of Investments October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ ------
<S> <C>
COMMON STOCKS - 97.44%
Business Services - 2.26%
440,100 Manpower, Inc...........................................$ 16,888,838
------------
Consumer Durables - 1.82%
490,000 Harley Davidson, Inc.................................... 13,597,500
------------
Consumer Non-Durables - 14.87%
802,500 CUC International, Inc.*................................ 23,673,750
335,000 Gillette Co............................................. 29,835,938
280,000 Interpublic Group of Companies, Inc..................... 13,300,000
427,600 Mattel, Inc............................................. 16,622,950
410,000 Procter & Gamble Co..................................... 27,880,000
------------
111,312,638
------------
Electrical - 2.80%
324,700 General Electric Co..................................... 20,963,444
------------
Entertainment and Leisure - 2.58%
235,000 Walt Disney Co.......................................... 19,328,750
------------
Finance - 6.74%
265,000 American Express Co..................................... 20,670,000
217,400 American International Group, Inc....................... 22,188,387
260,000 First Data Corp......................................... 7,556,250
------------
50,414,637
------------
Food and Beverage - 6.22%
500,000 Coca-Cola Co............................................ 28,250,000
200,000 Pioneer Hi-Bred International, Inc...................... 18,325,000
------------
46,575,000
------------
Health Care Services - 7.47%
475,000 Johnson & Johnson....................................... 27,253,125
405,000 Pfizer, Inc............................................. 28,653,750
------------
55,906,875
------------
Lodging - 2.61%
280,000 Marriott International, Inc............................. 19,530,000
------------
Medical Supplies - 2.67%
460,000 Medtronic, Inc.......................................... 20,010,000
------------
Pharmaceuticals - 8.74%
270,000 Bristol-Myers Squibb Co.................................$ 23,692,500
330,000 Eli Lilly & Co.......................................... 22,068,750
220,000 Merck & Co., Inc........................................ 19,635,000
------------
65,396,250
------------
Restaurants - 2.90%
280,000 Cracker Barrell
Old Country Store, Inc.................................. 8,260,000
300,000 McDonald's Corp......................................... 13,443,750
------------
21,703,750
------------
Retail - 5.68%
350,000 Gap, Inc................................................ 18,615,625
430,000 Home Depot, Inc......................................... 23,918,750
------------
42,534,375
------------
Technology - 27.95%
330,000 Adaptec, Inc.*........................................ 15,984,375
410,000 Cisco Systems, Inc.*.................................. 33,632,812
350,600 Compaq Computer Corp.*................................ 22,350,750
400,000 Electronic Arts, Inc.*................................ 13,550,000
313,700 Intel Corp............................................ 24,154,900
230,000 Microsoft Corp.*...................................... 29,900,000
670,000 Oracle Corp.*......................................... 23,973,438
307,400 Seagate Technology, Inc.*............................. 8,338,225
380,000 Solectron Corp.*...................................... 14,915,000
540,000 3Com Corp.*........................................... 22,376,250
------------
209,175,750
------------
Telecommunications - 2.13%
360,000 Ericsson (LM)
Telefonaktiebolaget, ADR
Class B, Series 10...................................... 15,930,000
------------
Total Common Stocks..................................... 729,267,807
------------
(Cost $582,126,971)
</TABLE>
See accompanying Notes to Financial Statements.
12
<PAGE>
CT&T Funds
Montag & Caldwell Growth Fund
Schedule of Investments - continued October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ ------
<S> <C>
INVESTMENT COMPANIES - 3.31%
15,205,543 Bankers Trust Institutional
Cash Management Fund.................. $ 15,205,543
9,534,733 Bankers Trust Institutional
Treasury Money Fund................... 9,534,733
--------------
Total Investment Companies............ 24,740,276
--------------
(Cost $24,740,276)
Total Investments - 100.75%......................... 754,008,083
--------------
(Cost $606,867,247)**
Liabilities Net of Cash and Other Assets - (0.75%).. (5,589,917)
--------------
Net Assets - 100.00%................................ $ 748,418,166
==============
</TABLE>
- -----------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $606,962,652.
<TABLE>
<S> <C>
Gross unrealized appreciation $ 155,538,447
Gross unrealized (depreciation) (8,493,016)
--------------
Net unrealized appreciation $ 147,045,431
==============
</TABLE>
ADR American Depositary Receipt
See accompanying Notes to Financial Statements.
13
<PAGE>
CT&T Funds
Chicago Trust Growth & Income Fund
Schedule of Investments October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ----------- ------------
<S> <C> <C>
COMMON STOCKS - 94.65%
Business Services - 1.17%
84,000 Paychex, Inc. ..................................... $ 3,202,500
------------
Capital Goods - 5.64%
155,000 AlliedSignal, Inc. ................................ 5,580,000
273,000 Federal Signal Corp. .............................. 6,603,187
41,500 Pitney Bowes, Inc. ................................ 3,291,469
------------
15,474,656
------------
Chemicals - 1.93%
121,400 Praxair, Inc. ..................................... 5,288,487
------------
Consumer Durables - 6.47%
218,000 Illinois Tool Works, Inc. ......................... 10,722,875
157,000 Johnson Controls, Inc. ............................ 7,045,375
------------
17,768,250
------------
Consumer Non-Durables - 11.39%
80,600 Cintas Corp. ...................................... 5,823,350
71,500 Lancaster Colony Corp. ............................ 3,539,250
179,000 Mattel, Inc. ...................................... 6,958,625
234,100 Newell Co. ........................................ 8,983,587
88,000 Procter & Gamble Co. .............................. 5,984,000
------------
31,288,812
------------
Electrical - 2.70%
114,800 General Electric Co. .............................. 7,411,775
------------
Energy - 6.84%
132,800 Exxon Corp. ....................................... 8,158,900
202,000 Royal Dutch Petroleum Co., NY, ADR ................ 10,630,250
------------
18,789,150
------------
Finance - 21.47%
100,000 AFLAC, Inc. ....................................... 5,087,500
102,975 American International Group, Inc. ................ 10,509,886
57,000 Associates First Capital Corp., Class A ........... 3,626,625
284,600 Federal Home Loan Mortgage Corp. .................. 10,779,225
108,000 First Data Corp. .................................. 3,138,750
25,950 General Re Corp. .................................. 5,117,016
145,000 Green Tree Financial Corp. ........................ 6,108,125
158,287 MBNA Corp. ........................................ 4,164,927
325,200 Norwest Corp. ..................................... 10,426,725
------------
58,958,779
------------
Food and Beverage - 4.41%
138,500 Richfood Holdings, Inc., Class A .................. 3,341,313
219,000 Sysco Corp. ....................................... 8,760,000
------------
12,101,313
------------
Health Care Services - 10.23%
137,000 Cardinal Health, Inc. ............................. 10,172,250
333,375 Health Management Associates, Inc., Class A* ...... 8,126,016
138,600 Pfizer, Inc. ...................................... 9,805,950
------------
28,104,216
------------
Pharmaceuticals - 1.85%
57,000 Merck & Co, Inc. .................................. 5,087,250
------------
Retail - 4.26%
51,000 Kohl's Corp.* ..................................... 3,423,375
294,000 Walgreen Co. ...................................... 8,268,750
------------
11,692,125
------------
Technology - 13.70%
76,400 Cisco Systems, Inc.* .............................. 6,267,187
58,600 Computer Sciences Corp.* .......................... 4,156,938
88,000 HBO & Co. ......................................... 3,828,000
73,400 Microsoft Corp.* .................................. 9,542,000
156,000 Oracle Corp.* ..................................... 5,581,875
124,000 Sun Microsystems, Inc.* ........................... 4,247,000
96,250 3Com Corp.* ....................................... 3,988,359
------------
37,611,359
------------
Telecommunications - 2.59%
132,000 Tellabs, Inc.* .................................... 7,128,000
------------
Total Common Stocks ............................... 259,906,672
(Cost $182,870,419) ------------
Par Value
- -----------
REPURCHASE AGREEMENT - 3.65%
$10,017,000 First Chicago,
5.7000%, dated 10/31/97 to be repurchased on
11/03/97 at $10,021,758 (Collateralized by U.S.
Treasury Note 6.000%, due 06/30/99; Total Par
$9,965,000) ....................................... 10,017,000
------------
Total Repurchase Agreement ........................ 10,017,000
(Cost $10,017,000) ------------
</TABLE>
See accompanying Notes to Financial Statements.
14
<PAGE>
CT&T Funds
Chicago Trust Growth & Income Fund
Schedule of Investments -- Continued October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Total Investments - 98.30% ...................................... $269,923,672
(Cost $192,887,419) ** ------------
Net Other Assets and Liabilities - 1.70% ........................ 4,684,235
------------
Net Assets - 100.00% ............................................ $274,607,907
============
</TABLE>
- ----------------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $192,887,419.
<TABLE>
<S> <C>
Gross unrealized appreciation $81,936,543
Gross unrealized (depreciation) (4,900,290)
-----------
Net unrealized appreciation $77,036,253
===========
</TABLE>
ADR American Depositary Receipt
See accompanying Notes to Financial Statements.
15
<PAGE>
CT&T Funds
Chicago Trust Talon Fund
Schedule of Investments October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ ------
<S> <C> <C>
COMMON STOCKS - 69.93%
Aerospace / Defense - 4.14%
14,500 General Dynamics Corp. ....................... $ 1,177,219
-----------
Cable Television - 0.16%
11,417 Tescorp, Inc.*(A)............................. 44,241
-----------
Consumer Cyclical - 4.93%
63,000 Circus Circus Enterprises, Inc.*.............. 1,401,750
-----------
Electrical - 2.46%
30,000 Berg Electronics Corp.*....................... 701,250
-----------
Finance - 12.22%
160,000 Danielson Holdings Corp. ..................... 1,260,000
52,000 Risk Capital Holdings, Inc. .................. 1,183,000
43,125 St. Paul Bancorp, Inc. ....................... 1,035,000
-----------
3,478,000
-----------
Pharmaceuticals - 15.36%
70,000 Mylan Laboratories, Inc. ..................... 1,535,625
55,000 North American Vaccine, Inc.*................. 1,381,875
67,544 Vitalink Pharmacy Services, Inc.*............. 1,456,418
-----------
4,373,918
-----------
Printing and Publishing - 4.70%
41,000 R.R. Donnelley & Sons Co. .................... 1,337,625
-----------
Real Estate - 4.30%
40,000 Equity Office Properties Trust, REIT.......... 1,222,500
-----------
Restaurants - 6.04%
28,000 Starbucks Corp.*.............................. 924,000
122,500 Unique Casual Restaurants..................... 796,250
-----------
1,720,250
-----------
Retail - 4.87%
55,000 Pep Boys-Manny Moe & Jack..................... 1,385,312
-----------
Technology - 10.75%
50,000 American Management Systems, Inc.*............ 1,081,250
22,000 Cerner Corp.*................................. 533,500
105,000 Robotic Vision Systems, Inc.*................. 1,443,750
-----------
3,058,500
-----------
Total Common Stocks........................... 19,900,565
-----------
(Cost $15,980,250)
PREFERRED STOCK - 1.27%
Cable Television
3,000 Tescorp, Inc. 8.0000% Conv. Pfd. (A).......... 363,000
-----------
Total Preferred Stock......................... 363,000
-----------
(Cost $300,000)
Par Value
- ---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 26.26%
Federal Home Loan Bank - 3.52%
$1,000,000 5.8750%, 02/26/98............................. 1,002,210
---------
U.S. Treasury Bills (B) - 13.94%
1,000,000 4.9984%, 11/13/97............................. 998,382
1,000,000 4.8465%, 11/13/97............................. 998,382
1,000,000 5.0290%, 12/11/97............................. 994,488
1,000,000 5.1407%, 04/16/98............................. 976,900
-----------
3,968,152
-----------
U.S. Treasury Notes - 8.80%
1,000,000 5.2500%, 07/31/98............................. 998,380
1,500,000 5.8750%, 07/31/99............................. 1,505,355
-----------
2,503,735
-----------
Total U.S. Government
and Agency Obligations........................ 7,474,097
-----------
(Cost $7,466,281)
Shares
------
INVESTMENT COMPANY - 2.71%
769,994 Bankers Trust Institutional
Cash Management Fund.......................... 769,994
-----------
Total Investment Company...................... 769,994
-----------
(Cost $769,994)
PURCHASED PUT OPTIONS - 0.90%
Number of Exercise Expiration
Issuer Contracts Price Date
------ --------- -------- ----------
S & P 500 30 $9.60 11/22/97 142,500
S & P 500 20 $9.60 12/20/97 115,000
--------- -----------
50
Total Purchased Put Options............................... 257,500
-----------
(Cost $120,125)
Total Investments - 101.07%............................... 28,765,156
-----------
(Cost $24,636,650) **
Liabilities Net of Cash and Other Assets - (1.07%)........ (305,573)
-----------
Net Assets - 100.00%...................................... $28,459,583
===========
- ---------------------------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $24,792,119.
Gross unrealized appreciation $4,336,501
Gross unrealized (depreciation) (363,464)
----------
Net unrealized appreciation $3,973,037
==========
</TABLE>
(A) Securities exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold, in transactions exempt
from registration, to qualified institutional buyers. At October 31,
1997, these securities amounted to $407,241 or 1.43% of net assets.
(B) Annualized yield at time of purchase
REIT Real Estate Investment Trust
See accompanying Notes to Financial Statements.
16
<PAGE>
CT&T Funds
Chicago Trust Balanced Fund
Schedule of Investments October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ ------
<S> <C> <C>
COMMON STOCKS - 53.40%
Aerospace - 1.02%
40,000 Boeing Co. ................................... $ 1,915,000
------------
Business Services - 1.01%
50,000 Paychex, Inc. ................................ 1,906,250
------------
Capital Goods - 3.11%
50,000 AlliedSignal Corp. ........................... 1,800,000
85,000 Federal Signal Corp. ......................... 2,055,937
25,000 Pitney Bowes, Inc. ........................... 1,982,812
------------
5,838,749
------------
Chemicals - 1.04%
45,000 Praxair, Inc. ................................ 1,960,312
------------
Consumer Durables - 2.89%
65,000 Illinois Tool Works, Inc. .................... 3,197,187
50,000 Johnson Controls, Inc. ....................... 2,243,750
------------
5,440,937
------------
Consumer Non-Durables - 6.35%
25,000 Cintas Corp. ................................. 1,806,250
50,000 Lancaster Colony Corp. ....................... 2,475,000
60,000 Mattel, Inc. ................................. 2,332,500
75,000 Newell Co. ................................... 2,878,125
36,000 Procter & Gamble Co. ......................... 2,448,000
------------
11,939,875
------------
Electrical - 1.37%
40,000 General Electric Co. ......................... 2,582,500
------------
Energy - 6.25%
30,000 Amoco Corp. .................................. 2,750,625
45,000 Exxon Corp. .................................. 2,764,687
52,000 Royal Dutch Petroleum Co., NY, ADR ........... 2,736,500
40,000 Schlumberger Ltd. ............................ 3,500,000
------------
11,751,812
------------
Finance - 10.12%
35,000 American International Group, Inc. ........... 3,572,188
30,000 Associates First Capital Corp., Class A....... 1,908,750
90,000 Federal Home Loan Mortgage Corp. ............. 3,408,750
50,000 First Data Corp. ............................. 1,453,125
40,000 Green Tree Financial Corp. ................... 1,685,000
120,000 MBNA Corp. ................................... 3,157,500
120,000 Norwest Corp. ................................ 3,847,500
------------
19,032,813
------------
Food and Beverage - 1.85%
45,000 Richfood Holdings, Inc., Class A.............. 1,085,625
60,000 Sysco Corp. .................................. 2,400,000
------------
3,485,625
------------
Health Care Services - 5.62%
25,000 Abbott Laboratories........................... 1,532,813
35,000 Cardinal Health, Inc. ........................ 2,598,750
90,000 Health Management
Associates, Inc., Class A*.................... 2,193,750
60,000 Pfizer, Inc. ................................. 4,245,000
------------
10,570,313
------------
Medical Supplies - 1.39%
60,000 Medtronic, Inc. .............................. 2,610,000
------------
Pharmaceuticals - 1.42%
30,000 Merck & Co, Inc. ............................. 2,677,500
------------
Retail - 1.50%
100,000 Walgreen Co. ................................. 2,812,500
------------
Technology - 7.60%
40,000 Cisco Systems, Inc.*.......................... 3,281,250
35,000 Computer Sciences Corp.*...................... 2,482,812
56,500 Electronic Data Systems Co. .................. 2,185,844
25,000 Microsoft Corp.*.............................. 3,250,000
52,500 Oracle Corp.*................................. 1,878,516
35,000 Sun Microsystems, Inc.*...................... 1,198,750
------------
14,277,172
------------
Telecommunications - 0.86%
30,000 Tellabs, Inc.*................................ 1,620,000
------------
Total Common Stocks........................... 100,421,358
------------
(Cost $68,550,142)
Par Value
- ---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 18.09%
U.S. Treasury Notes - 7.86%
$2,000,000 9.0000%, 05/15/98............................. 2,037,280
1,500,000 5.5000%, 02/28/99............................. 1,497,795
1,500,000 8.0000%, 08/15/99............................. 1,559,055
2,000,000 7.1250%, 02/29/00............................. 2,061,360
2,000,000 5.2500%, 01/31/01............................. 1,973,480
2,000,000 7.8750%, 08/15/01............................. 2,141,680
1,500,000 5.7500%, 08/15/03............................. 1,494,015
2,000,000 5.8750%, 02/15/04............................. 2,005,480
------------
14,770,145
------------
</TABLE>
See accompanying Notes to Financial Statements.
17
<PAGE>
CT&T Funds
Chicago Trust Balanced Fund
Schedule of Investments - continued October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- ------
<S> <C>
U. S. Treasury Bonds - 1.69%
$150,0000 7.1250%, 02/15/23.................................... $ 1,667,520
150,0000 6.2500%, 08/15/23.................................... 1,503,645
-----------
3,171,165
-----------
Federal Home Loan Mortgage Corporation - 3.75%
600,000 5.5000%, 08/15/04.................................... 598,086
1,000,000 5.8500%, 02/21/06.................................... 986,980
800,000 6.0000%, 03/15/07.................................... 800,456
1,000,000 6.5000%, 09/15/07.................................... 1,014,760
570,206 7.5000%, 04/01/08.................................... 585,704
1,016,287 6.5000%, 06/01/09.................................... 1,016,602
469,525 5.1500%, 11/15/12.................................... 468,037
602,995 7.0000%, 07/01/13.................................... 606,196
692,800 7.0000%, 11/15/13, IO................................ 14,438
1,000,000 6.0000%, 12/15/23.................................... 954,150
-----------
7,045,409
-----------
Federal National Mortgage Association - 1.05%
458,555 6.0000%, 06/25/02, CMO............................... 456,987
800,365 6.9000%, 12/25/03, CMO............................... 816,101
993,359 7.0000%, 07/25/17, CMO, IO........................... 84,000
582,401 9.0000%, 05/01/25.................................... 619,710
-----------
1,976,798
-----------
Government National Mortgage Association - 3.74%
509,484 7.0000%, 06/15/08.................................... 518,558
634,229 8.0000%, 03/15/17.................................... 658,405
876,773 8.0000%, 06/15/17.................................... 910,196
1,653,925 7.0000%, 09/15/23.................................... 1,663,733
1,081,615 7.0000%, 10/15/23.................................... 1,088,029
784,192 7.0000%, 10/15/23.................................... 788,843
1,422,928 6.5000%, 03/15/26.................................... 1,407,802
-----------
7,035,566
-----------
Total U. S. Government
and Agency Obligations............................... 33,999,083
(Cost $33,455,048) -----------
CORPORATE NOTES AND BONDS - 17.72%
Cable Television - 0.44%
700,000 Continental Cablevision, Debenture
9.5000%, 08/01/13.................................... 824,250
-----------
Consumer Non-Durables - 0.68%
500,000 Anheuser Busch Co.
7.0000%, 12/01/25.................................... 495,625
750,000 Brown Group, Inc., Senior Notes
9.5000%, 10/15/06.................................... 776,250
-----------
1,271,875
-----------
Finance - 10.22%
1,000,000 Advanta Corp., MTN
7.0000%, 05/01/01.................................... 1,001,250
650,000 Associates Corp. NA
6.3750%, 08/15/98.................................... 653,361
750,000 Bankers Trust-NY, Subordinated Notes
8.1250%, 04/01/02.................................... 802,500
250,000 Chelsea GCA Realty Partnership, REIT
7.2500%, 10/21/07.................................... 252,500
1,500,000 Chrysler Financial Corp.
6.6250%, 08/15/00.................................... 1,522,500
1,000,000 Continental Corp. Notes
7.2500%, 03/01/03.................................... 1,032,500
750,000 DR Investment Corp.
7.4500%, 05/15/07 (A)................................ 793,125
945,000 Federal Realty Investment Trust
Covertible Subordinated Bonds, REIT
5.2500%, 10/28/03.................................... 907,200
1,000,000 First Chicago Bank
7.7500%, 12/01/26 (A)................................ 1,013,750
1,250,000 Goldman Sachs Group LP
6.2500%, 02/01/03 (A)................................ 1,240,625
1,000,000 International Bank for Reconstruction &
Development Notes
9.7700%, 05/27/98.................................... 1,023,750
1,000,000 John Deere Capital Corp., Debenture
8.6250%, 08/01/19.................................... 1,088,750
500,000 Leucadia National Corp.
Senior Subordinated Notes
7.8750%, 10/15/06.................................... 519,375
975,000 Leucadia National Corp.
Senior Subordinated Notes
8.2500%, 06/15/05.................................... 1,034,719
1,000,000 Merrill Lynch & Co., Inc.
7.0000%, 04/27/08.................................... 1,041,250
1,500,000 Metropolitan Life Insurance Co.
6.3000%, 11/01/03 (A)................................ 1,488,750
600,000 Olympic Financial Ltd.
11.5000%, 03/15/07................................... 622,500
1,000,000 Pacific Mutual Life Insurance Co.
7.9000%, 12/30/23 (A)................................ 1,070,000
1,000,000 Prudential Insurance Co. of America
8.3000%, 07/01/25 (A)................................ 1,095,000
1,000,000 Wells Fargo Capital
7.7300%, 12/01/26 (A)................................ 1,005,000
-----------
19,208,405
-----------
Food and Beverage - 0.54%
1,000,000 Nabisco, Inc.
6.7000%, 06/15/02.................................... 1,017,500
-----------
</TABLE>
See accompanying Notes to Financial Statements.
18
<PAGE>
CT&T Funds
Chicago Trust Balanced Fund
Schedule of Investments - continued October 31, 1997
================================================================================
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- ------
<S> <C>
Healthcare Services - 0.47%
$ 1,100,000 Hospital Corp. of America
Debenture
7.6485%, 06/01/00 (B).............................. $ 884,125
-----------
Printing and Publishing - 1.00%
750,000 News America Holdings
7.7500%, 02/01/24................................... 753,750
520,693 Time Warner, Inc., Series M
10.2500%, 07/01/16*(A).............................. 600,099
500,000 Valassis Inserts, Inc.
Senior Subordinated Notes
9.3750%, 03/15/99.................................. 516,875
-----------
1,870,724
-----------
Retail - 0.51%
1,000,000 K-mart Corp., Debenture
7.9500%, 02/01/23.................................. 960,000
-----------
Transportation - 0.25%
433,477 Delta Air Lines, Inc.
Equipment Trust, Series 1992A
8.5400%, 01/02/07.................................. 465,898
-----------
Utilities - 3.61%
1,000,000 CalEnergy Co, Inc.
7.6300%, 10/15/07.................................. 1,012,500
1,000,000 Commonwealth Edison Bond, First Mortgage
7.7500%, 07/15/23.................................. 1,023,750
1,000,000 Gulf States Utilities, First Mortgage, Series A
8.2500%, 04/01/04.................................. 1,076,250
1,000,000 Long Island Lighting Co., Debenture
9.0000%, 11/01/22.................................. 1,128,750
1,000,000 Niagara Mohawk Power, First Mortgage
8.0000%, 06/01/04.................................. 1,057,500
500,000 Philadelphia Electric Co., First Mortgage
5.6250%, 11/01/01.................................. 490,625
922,000 WorldCom, Inc. GA, Senior Note
8.8750%, 01/15/06................................ 995,760
-----------
6,785,135
-----------
Total Corporate Notes and Bonds.................... 33,287,912
(Cost $32,193,167) -----------
YANKEE BONDS - 1.42%
$ 1,750,000 Chilgener S.A. Yankee (Chile)
6.5000%, 01/15/06.................................. $ 1,732,500
416,667 Province of Mendoza
Collateral Oil Royalty Note
10.0000%, 07/25/02 (A)............................. 442,405
500,000 Skandinaviska Enskilda,
Subordinated Notes
6.6250%, 03/29/49 (A).............................. 503,443
-----------
Total Yankee Bonds................................. 2,678,348
(Cost $2,622,867) -----------
GOVERNMENT TRUST CERTIFICATES - 0.55%
142,858 Greece Trust, Class G-2
8.0000%, 05/15/98.................................. 143,572
837,831 Israel Collateral Trust, Class 1-C
9.2500%, 11/15/01.................................. 881,817
-----------
Total Government
Trust Certificates................................. 1,025,389
(Cost $1,061,200) -----------
ASSET-BACKED SECURITIES - 1.94%
1,000,000 BA Mortgage Securities, CMO
7.3500%, 07/25/26.................................. 998,750
1,000,000 Chemical Master Credit Card Trust I, Class A
5.5500%, 09/15/03.................................. 989,210
1,000,000 Citibank Credit Card Master Trust I, Class A
6.8390%, 02/10/04.................................. 1,023,190
600,000 Midland Realty Acceptance Corp. CMO
7.4750%, 08/25/28.................................. 632,625
-----------
Total Asset-Backed Securities...................... 3,643,775
(Cost $3,575,262) -----------
REPURCHASE AGREEMENT - 6.35%
11,933,000 First Chicago,
5.7000%, dated 10/31/97 to be repurchased
on 11/03/97 at $11,938,668
(Collateralized by U.S. Treasury Note
6.0000%, due 07/31/02;
Total Par $11,895,000)............................. 11,933,000
-----------
Total Repurchase Agreement......................... 11,933,000
(Cost $11,933,000) -----------
</TABLE>
See accompanying Notes to Financial Statements.
19
<PAGE>
<TABLE>
<CAPTION>
CT&T FUNDS
Chicago Trust Balanced Fund
Schedule of Investments - continued October 31, 1997
=================================================================================================
<S> <C>
Total Investments - 99.47%...................................................... $ 186,988,865
-----------------
(Cost $153,390,686) **
Net Other Assets and Liabilities - 0.53%........................................ 1,004,472
-----------------
Net Assets - 100.00% $187,993,337
- ----------------------------------------------------------------------- =================
</TABLE>
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $153,390,686.
Gross unrealized appreciation $ 34,994,384
Gross unrealized (depreciation) (1,396,205)
---------------
Net unrealized appreciation $ 33,598,179
===============
IO Interest Only
ADR American Depositary Receipt
(A) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold, in transactions exempt from
registration, to qualified institutional buyers. At October 31, 1997, these
securities amounted to $9,252,197 or 4.92% of net assets.
(B) Annualized yield at time of purchase
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
REIT Real Eastate Investment Trust
Portfolio Composition (Moody's Ratings)
- ---------------------
Common Stock 53%
Repurchase Agreement 6%
U.S. Government Obligations 10%
U.S. Government Agency Obligations 8%
Government Trust Certificates 1%
Aaa 2%
AA 2%
A 6%
Baa 6%
Ba 5%
NR 1%
----
100%
====
See accompanying Notes to Financial Statements.
20
<PAGE>
CT&T Funds
Montag & Caldwell Balanced Fund
Schedule of Investments October 31, 1997
================================================================================
<TABLE>
<CAPTION>
Market
Shares Value
- ------ ------
<S> <C> <C>
COMMON STOCKS - 58.33%
Business Services - 1.13%
24,300 Manpower, Inc. ............................... $ 932,512
-----------
Consumer Durables - 1.19%
35,400 Harley Davidson, Inc. ........................ 982,350
-----------
Consumer-Nondurables - 8.84%
51,100 CUC International, Inc.*...................... 1,507,450
21,000 Gillette Co. ................................. 1,870,312
22,000 Interpublic Group of Companies., Inc. ........ 1,045,000
27,000 Mattel, Inc. ................................. 1,049,625
27,000 Procter & Gamble Co. ......................... 1,836,000
-----------
7,308,387
-----------
Electrical - 1.66%
21,300 General Electric Co. ......................... 1,375,181
-----------
Entertainment and Leisure - 1.69%
17,000 Walt Disney Co. .............................. 1,398,250
-----------
Finance - 4.14%
19,000 American Express Co. ......................... 1,482,000
14,300 American International Group, Inc. ........... 1,459,494
16,500 First Data Corp. ............................. 479,530
-----------
3,421,024
-----------
Food and Beverage - 3.65%
30,000 Coca-Cola Co. ................................ 1,695,000
14,400 Pioneer Hi-Bred International, Inc. .......... 1,319,400
-----------
3,014,400
-----------
Health Care Services - 6.12%
22,690 Eli Lilly & Co. .............................. 1,517,394
31,000 Johnson & Johnson............................. 1,778,625
25,000 Pfizer, Inc. ................................. 1,768,750
-----------
5,064,769
-----------
Lodging - 1.69%
20,000 Marriott International, Inc. ................. 1,395,000
-----------
Medical Supplies - 1.86%
35,400 Medtronic, Inc. .............................. 1,539,900
-----------
Pharmaceuticals - 3.63%
19,000 Bristol-Myers Squibb Co. ..................... 1,667,250
15,000 Merck & Co., Inc. ............................ 1,338,750
-----------
3,006,000
-----------
Restaurants - 1.82%
22,100 Cracker Barrell Old Country Store, Inc. ...... 651,950
19,000 McDonald's Corp. ............................. 851,437
-----------
1,503,387
-----------
Retail - 3.70%
26,500 Gap, Inc. .................................... 1,409,468
29,800 Home Depot, Inc. ............................. 1,657,625
-----------
3,067,093
-----------
Telecommunications - 1.18%
22,100 Ericsson (LM) Telefonaktiebolaget, ADR
Class B, Series 10............................ 977,925
-----------
Technology - 16.03%
22,100 Adaptec, Inc.*................................ 1,070,469
25,400 Cisco Systems, Inc.*.......................... 2,083,594
22,350 Compaq Computer Corp.*........................ 1,424,812
28,000 Electronic Arts, Inc.*........................ 948,500
19,800 Intel Corp. .................................. 1,524,600
14,000 Microsoft Corp.*.............................. 1,820,000
43,000 Oracle Corp.*................................. 1,538,594
14,800 Seagate Technology, Inc.*..................... 401,450
24,400 Solectron Corp.*.............................. 957,700
36,000 3Com Corp.*................................... 1,491,750
-----------
13,261,469
-----------
Total Common Stocks........................... 48,247,647
-----------
(Cost $37,414,304)
Par Value
- ---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 25.66%
U.S. Treasury Notes - 17.89%
$1,500,000 5.750%, 08/15/03.............................. 1,494,015
2,000,000 5.875%, 02/15/04.............................. 2,005,480
1,500,000 7.250%, 05/15/04.............................. 1,612,620
1,500,000 7.875%, 11/15/04.............................. 1,671,195
2,000,000 6.500%, 08/15/05.............................. 2,073,780
2,500,000 6.500%, 10/15/06.............................. 2,597,725
3,000,000 7.250%, 05/15/16.............................. 3,347,640
-----------
14,802,455
-----------
</TABLE>
See accompanying Notes to Financial Statements.
21
<PAGE>
- --------------------------------------------------------------------------------
CT&T FUNDS
Montag & Caldwell Balanced Fund
Schedule of Investments - continued October 31, 1997
================================================================================
<TABLE>
<CAPTION>
Market
Par Value Value
- ---------- ------
<S> <C> <C> <C>
Federal Home Loan Bank - 0.61%
$ 500,000 6.940%, 02/12/04................................ $ 506,500
------------
Federal Home Loan
Mortgage Corporation- 4.04%
100,000 7.730%, 08/10/04, Debenture, Series A........... 103,593
750,000 6.400%, 12/13/06, Debenture..................... 768,638
750,000 6.700%, 01/05/07, Series B...................... 782,775
600,000 7.500%, 03/15/07, CMO, Class J.................. 606,312
175,000 6.000%, 04/15/08, CMO, Class K.................. 174,689
500,000 6.500%, 07/15/20, CMO, Class F.................. 503,810
400,000 6.500%, 11/15/20, CMO. Class H.................. 404,924
------------
3,344,741
------------
Federal National
Mortgage Association - 3.10%
500,000 7.070%, 03/08/11, MTN........................... 505,960
2,000,000 7.250%, 01/17/21, CMO, REMIC.................... 2,054,940
------------
2,560,900
------------
Government National
Mortgage Association - 0.02%
8,447 8.500%, 06/15/01................................ 8,809
2,975 9.000%, 09/15/08................................ 3,174
------------
11,983
------------
Total U.S. Government
and Agency Obligations.......................... 21,226,579
------------
(Cost $20,702,195)
CORPORATE NOTES AND BONDS - 9.33%
Finance - 7.73%
1,500,000 American Express Co., Senior Notes
6.750%, 06/23/04................................ 1,537,500
55,000 American General Finance, Senior Notes
7.200%, 07/08/99................................ 56,100
1,000,000 Citicorp, Subordinated Notes
7.125%, 05/15/06................................ 1,036,250
500,000 First National Bank Commerce, Senior Notes, MTN
6.500%, 01/14/00................................ 505,625
1,000,000 First Union National, Subordinated Notes, MTN
7.125%, 10/15/06................................ 1,036,250
750,000 General Motors Acceptance Corp.
7.125%, 05/01/03................................ 777,188
500,000 Household Finance Corp.
7.250%, 05/15/06................................ 525,000
100,000 National Re Corp., Senior Notes
8.850%, 01/15/05................................ 112,500
500,000 Salomon, Inc.
7.300%, 05/15/02................................ 519,375
285,000 Salomon, Inc., Senior Notes
7.125%, 08/01/99................................ 290,344
------------
6,396,132
------------
Retail - 1.60%
500,000 Penney (J.C.) & Co., Debenture
9.750%, 06/15/21................................ 558,750
750,000 Sears Roebuck Acceptance Corp.
6.700%, 11/15/06................................ 765,938
------------
1,324,688
------------
Total Corporate Notes and Bonds................. 7,720,820
------------
(Cost $7,564,432)
ASSET-BACKED SECURITIES - 2.93%
445,000 AT&T Universal Card Master Trust
Series 1995-2, Class A
5.950%, 10/17/02................................ 445,352
1,150,000 Chase Auto Owner Trust
Series 1997-B, Class A3
6.350%, 02/15/01................................ 1,161,661
300,000 Chemical Master Credit Card Trust
6.230%, 06/15/03................................ 302,508
500,000 Citibank Credit Card Master Trust
Series 1997-2, Class A
6.550%, 02/16/04................................ 509,460
------------
Total Asset-Backed Securities................... 2,418,981
------------
(Cost $2,389,033)
Shares
- ------
INVESTMENT COMPANY - 3.59%
2,970,204 Bankers Trust Institutional
Cash Management Fund............................ 2,970,204
------------
Total Investment Company........................ 2,970,204
------------
(Cost $2,970,204)
Total Investments - 99.84%...................................... 82,584,231
------------
(Cost $71,040,168)**
Net Other Assets and Liabilities - 0.16%........................ 134,822
------------
Net Assets - 100.00%............................................ $ 82,719,053
============
</TABLE>
- ---------------------------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $71,072,517
<TABLE>
<S> <C> <C>
Gross unrealized appreciation $11,988,370
Gross unrealized (depreciation) (476,656)
-----------
Net unrealized appreciation $11,511,714
===========
</TABLE>
ADR American Depositary Receipt
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
REMIC Real Estate Mortgage Investment Conduit
<TABLE>
Portfolio Composition (Moody's Ratings)
- ---------------------
<S> <C>
Common Stocks 58%
U.S. Government Obligations 19%
U.S. Government Agency Obligations 8%
Aaa 1%
A 10%
Investment Company 4%
----
100%
====
</TABLE>
See accompanying Notes to Financial Statements.
22
<PAGE>
CT&T Funds
Chicago Trust Bond Fund
Schedule of Investments October 31, 1997
================================================================================
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- ------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 46.84%
U.S. Treasury Notes - 19.69%
<S> <C> <C> <C>
$ 1,250,000 7.375%, 11/15/97................................... $ 1,250,588
2,000,000 5.625%, 01/31/98................................... 2,000,600
2,500,000 5.125%, 11/30/98................................... 2,488,400
2,500,000 5.500%, 02/28/99................................... 2,496,325
2,500,000 7.125%, 02/29/00................................... 2,576,700
2,500,000 5.750%, 10/31/00................................... 2,499,950
2,500,000 7.875%, 08/15/01................................... 2,677,100
2,500,000 6.375%, 08/15/02................................... 2,562,125
2,500,000 5.750%, 08/15/03................................... 2,490,025
2,500,000 7.250%, 05/15/04................................... 2,687,700
------------
23,729,513
------------
U.S. Treasury Bonds - 5.33%
2,000,000 7.500%, 05/15/02................................... 2,137,020
2,500,000 7.125%, 02/15/23................................... 2,779,200
1,500,000 6.250%, 08/15/23................................... 1,503,645
------------
6,419,865
------------
Federal Home Loan
Mortgage Corporation - 12.03%
2,500,000 5.850%, 02/21/06, Debenture........................ 2,467,450
1,123,421 7.000%, 10/15/06, CMO.............................. 1,133,441
1,500,000 6.000%, 03/15/07, CMO.............................. 1,500,855
1,000,000 6.500%, 09/15/07, CMO.............................. 1,014,760
500,000 5.750%, 01/15/08, CMO.............................. 494,135
570,206 7.500%, 04/01/08, Debenture........................ 585,704
1,500,000 6.000%, 03/15/09, CMO.............................. 1,439,415
1,355,049 6.500%, 06/01/09, CMO.............................. 1,355,469
1,693,227 6.500%, 01/01/11................................... 1,693,752
1,480,425 6.500%, 11/01/11................................... 1,480,884
1,400,000 6.000%, 12/15/23, CMO.............................. 1,335,810
------------
14,501,675
------------
Federal National
Mortgage Association - 4.48%
382,130 6.000%, 06/25/02, CMO.............................. 380,823
1,067,154 6.900%, 12/25/03, CMO.............................. 1,088,134
390,121 7.000%, 07/01/08................................... 395,360
1,449,716 7.000%, 05/01/12................................... 1,469,185
931,842 9.000%, 05/01/25................................... 991,535
1,093,948 6.500%, 02/01/26................................... 1,075,482
------------
5,400,519
------------
Government National
Mortgage Association - 5.31%
876,773 8.000%, 06/15/17................................... 910,196
1,372,337 7.000%, 10/15/23................................... 1,380,475
1,442,154 7.000%, 10/15/23................................... 1,450,706
1,422,928 6.500%, 03/15/26................................... 1,407,802
1,248,893 7.000%, 08/20/27................................... 1,250,837
------------
6,400,016
------------
Total U.S. Government
and Agency Obligations............................. 56,451,588
------------
(Cost $55,587,648)
CORPORATE NOTES AND BONDS - 40.49%
Cable Television - 1.47%
1,500,000 Continental Cablevision, Debenture
9.500%, 08/01/13................................... 1,766,250
------------
Consumer Non-Durables - 1.68%
1,000,000 Anheuser Busch Co.
7.000%, 12/01/25................................... 991,250
1,000,000 Brown Group, Inc. Senior Note
9.500%, 10/15/06................................... 1,035,000
------------
2,026,250
------------
See accompanying Notes to Financial Statements
</TABLE>
23
<PAGE>
CT&T Funds
Chicago Trust Bond Fund
Schedule of Investments - continued October 31, 1997
================================================================================
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- ------
<S> <C>
Finance - 22.34%
$ 1,250,000 Advanta Corp., MTN
7.000%, 05/01/01................................... $ 1,251,563
1,250,000 Associates Corp. NA
6.375%, 08/15/98................................... 1,256,463
2,000,000 Bankers Trust-NY, Subordinated Notes
7.500%, 01/15/02................................... 2,090,000
650,000 Chelsea GCA Realty Partnership, REIT
7.250%, 10/21/07................................... 656,500
1,750,000 Chrysler Financial Corp.
6.625%, 08/15/00................................... 1,776,250
1,500,000 Continental Corp. Notes
7.250%, 03/01/03................................... 1,548,750
1,000,000 Federal Realty Investment Trust
Convertible Subordinated Bonds, REIT
5.250%, 10/28/03................................... 960,000
2,000,000 First Chicago Bank
7.750%, 12/01/26 (A)............................... 2,027,500
1,000,000 Goldman Sachs Group LP
6.200%, 12/15/00 (A)............................... 997,500
500,000 Goldman Sachs Group LP
6.250%, 02/01/03 (A)............................... 496,250
1,275,000 John Deere Capital Corp., Debenture
8.625%, 08/01/19................................... 1,388,156
750,000 Leucadia National Corp.
Senior Subordinated Notes
7.875%, 10/15/06................................... 779,063
1,000,000 Leucadia National Corp.
Senior Subordinated Notes
8.250%, 06/15/05................................... 1,061,250
2,000,000 Merrill Lynch & Co., Inc.
7.000%, 04/27/08................................... 2,082,500
2,000,000 Metropolitan Life Insurance Co.
6.300%, 11/01/03 (A)............................... 1,985,000
1,000,000 Olympic Financial Ltd.
11.500%, 03/15/07.................................. 1,037,500
1,250,000 Pacific Mutual Life Insurance Co.
7.900%, 12/30/23 (A)............................... 1,337,500
2,000,000 Prudential Insurance Co. of America
8.300%, 07/01/25 (A)............................... 2,190,000
2,000,000 Wells Fargo Capital
7.730%, 12/01/26 (A)............................... 2,010,000
-----------
26,931,745
-----------
Food and Beverage - 0.42%
$ 500,000 Nabisco, Inc.
6.700%, 06/15/02................................... $ 508,750
-----------
Manufacturing - 0.87%
1,000,000 Figgie International, Inc., Senior Notes
9.875%, 10/01/99................................... 1,045,000
-----------
Printing and Publishing - 2.46%
1,250,000 News America Holdings
7.750%, 01/20/24................................... 1,256,250
809,967 Time Warner, Inc., Series M
10.250%, 07/01/16.................................. 933,487
750,000 Valassis Inserts, Inc.
Senior Subordinated Notes
9.375%, 03/15/99................................... 775,313
-----------
2,965,050
-----------
Retail - 1.19%
1,500,000 K-mart Corp., Debenture
7.950%, 02/01/23................................... 1,440,000
-----------
Transportation - 0.58%
209,478 Delta Air Lines, Inc.
9.375%, 09/11/07................................... 234,353
433,477 Delta Air Lines, Inc.
Equipment Trust, Series 1992A
8.540%, 01/02/07................................... 465,898
-----------
700,251
-----------
</TABLE>
See accompanying Notes to Financial Statements.
24
<PAGE>
CT&T Funds
Chicago Trust Bond Fund
Schedule of Investments - continued October 31, 1997
================================================================================
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- ------
Utilities - 9.48%
<C> <S> <C>
$ 1,675,000 CalEnergy Co., Inc.
7.630%, 10/15/07.................................. $ 1,695,938
1,000,000 Commonwealth Edison Co., First Mortgage
7.750%, 07/15/23.................................. 1,023,750
2,000,000 Gulf States Utilities, First Mortgage, Series A
8.250%, 04/01/04.................................. 2,152,500
1,250,000 Long Island Lighting Co., Debenture
9.000%, 11/01/22.................................. 1,410,938
1,500,000 Niagra Mohawk Power, First Mortgage
8.000%, 06/01/04.................................. 1,586,250
2,000,000 Philadelphia Electric Co., First Mortgage
5.625%, 11/01/01.................................. 1,962,500
1,475,000 WorldCom, Inc. GA, Senior Note
8.875%, 01/15/06.................................. 1,593,000
------------
11,424,876
------------
Total Corporate Notes and Bonds................... 48,808,172
------------
(Cost $47,005,037)
YANKEE BONDS - 3.13%
2,000,000 Chilgener S.A. Yankee (Chile)
6.500%, 01/15/06................................... 1,980,000
593,750 Province of Mendoza
Collateral Oil Royalty Note
10.000%, 07/25/02 (A).............................. 630,428
1,150,000 Skandinaviska Enskilda, Subordinated Notes
6.625%, 03/29/49 (A)............................... 1,157,918
------------
Total Yankee Bonds................................. 3,768,346
------------
(Cost $3,673,871)
GOVERNMENT TRUST CERTIFICATE - 0.53%
607,427 Israel Collateral Trust, Class 1-C
9.250%, 11/15/01................................... 639,317
------------
Total Government Trust Certificate................. 639,317
------------
(Cost $664,635)
ASSET-BACKED SECURITIES - 4.90%
1,750,000 BA Mortgage Securities, CMO
7.350%, 07/25/26................................... 1,747,813
2,500,000 Chemical Master Credit Card Trust I, Class A
5.550%, 09/15/03................................... 2,473,025
750,000 Citibank Credit Card Master Trust I, Class A
6.839%, 02/10/04................................... 767,393
875,000 Midland Realty Acceptance Corp., CMO
7.475%, 08/25/28................................... 922,578
------------
Total Asset-Backed Securities...................... 5,910,809
------------
(Cost $5,814,813)
REPURCHASE AGREEMENT - 2.72%
$3,281,000 First Chicago,
5.700%, dated 10/31/97 to be repurchased
on 11/03/97 at $3,282,558
(Collateralized by U.S. Treasury Note
6.000%, due 07/31/02;
Total Par $3,270,000).............................. $ 3,281,000
------------
Total Repurchase Agreement......................... 3,281,000
------------
(Cost $3,281,000)
Total Investments -98.61%......................................... 118,859,232
------------
(Cost $116,027,004)*
Net Other Assets and Liabilities - 1.39%.......................... 1,672,945
------------
Net Assets - 100.00%.............................................. $120,532,177
============
</TABLE>
- ---------------------------------------------
* Aggregage cost for Federal income tax purposes is $116,027,004.
Gross unrealized appreciation $ 2,932,363
Gross unrealized (depreciation) (100,135)
------------
Net unrealized appreciation $ 2,832,228
============
(A) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold, in transactions exempt from
registration, to qualified institutional buyers. At October 31, 1997,
these securities amounted to $12,832,096 or 10.65% of net assets.
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
REIT Real Estate Investment Trust
Portfolio Composition (Mood's Ratings)
- ---------------------
Repurchase Agreement 3%
U.S. Government Obligations 25%
U.S. Government Agency Obligations 22%
Government Trust Certificates 1%
Aaa 3%
AA 3%
A 14%
Baa 13%
Ba 13%
B 1%
NR 2%
----
100%
====
See accompanying Notes to Financial Statements.
25
<PAGE>
CT&T Funds
Chicago Trust Municipal Bond Fund
Schedule of Investments October 31, 1997
================================================================================
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- -----
<S> <C>
MUNICIPAL SECURITIES - 97.45%
Arizona - 8.53%
$ 350,000 Mohave County, IDA
6.000%, 07/01/00...................................... $ 366,569
450,000 Salt River Project Electric System Revenue
Refunding, Series A
5.500%, 01/01/05...................................... 477,842
200,000 Tucson, Arizona Water Revenue
5.400%, 07/01/05...................................... 211,152
----------
1,055,563
----------
California - 2.07%
250,000 California State
5.250%, 10/01/10...................................... 256,250
----------
Florida - 2.21%
265,000 Dade County, Florida State School District, G.O.
5.000%, 07/15/02
Insured: MBIA......................................... 273,949
----------
Georgia - 4.14%
250,000 State of Georgia, Series A, G.O.
6.100%, 03/01/05...................................... 276,045
200,000 State of Georgia, Series D, G.O.
6.700%, 08/01/09...................................... 235,980
----------
512,025
----------
Illinois - 8.21%
250,000 Chicago, Illinois Metropolitan Water
Reclamation, G.O.
6.600%, 01/01/02...................................... 271,903
475,000 Cook County, Illinois Series B, G.O.
4.700%, 11/15/01
Insured: MBIA......................................... 484,614
250,000 State of Illinois, G.O.
5.150%, 09/01/02
Insured: FGIC......................................... 259,390
----------
1,015,907
----------
Maryland - 2.03%
250,000 University of Maryland Revenue, Series B
Auxiliary Facilities and Tuition Revenue
5.400%, 04/01/98...................................... 251,718
----------
Michigan - 5.92%
250,000 Lanse Creuse Public Schools
5.000%, 05/01/03...................................... 258,368
200,000 Rochester Community School District
4.550%, 05/01/04...................................... 201,006
260,000 Utica Community Schools
5.375%, 05/01/04...................................... 273,296
----------
732,670
----------
Minnesota - 2.01%
245,000 St. Paul Housing Finance Board Revenue
5.050%, 11/01/07...................................... 249,236
----------
Nevada - 3.12%
350,000 Clark County, Nevada School District, G.O.
6.400%, 06/15/06...................................... 386,547
Insured: FGIC ----------
New Jersey - 7.24%
295,000 Camden County
Municipal Utilities Authority Revenue
6.000%, 07/15/04...................................... 321,237
350,000 State of New Jersey Transportation
Trust Fund Revenue, Series A,
Escrowed to Maturity
5.200%, 12/15/00
Insured: AMBAC........................................ 362,289
200,000 State of New Jersey, Series D, G.O.
5.500%, 02/15/04...................................... 212,296
----------
895,822
----------
New York - 6.27%
250,000 Municipal Assistance Corporation
4.500%, 07/01/01...................................... 252,850
250,000 New York City Transitional Finance
Authority Revenue
5.500%, 08/15/08...................................... 266,103
250,000 New York State Dormitory Authority
Revenue, Series C
5.100%, 05/15/03...................................... 257,463
----------
776,416
----------
Ohio - 1.67%
200,000 Ohio State Public Facilities Commission
(Higher Education), Series II-A
5.200%, 05/01/01
Insured: AMBAC........................................ 206,974
----------
Oklahoma - 2.93%
350,000 Tulsa, Oklahoma Metropolitan Utilities
Authority Revenue
5.500%, 07/01/00...................................... 362,506
----------
Oregon - 2.22%
250,000 Portland, Oregon Series A, G.O.
7.000%, 06/01/01...................................... 274,445
----------
</TABLE>
See accompanying Notes to Financial Statements.
26
<PAGE>
<TABLE>
<CAPTION>
CT&T Funds
Chicago Trust Municipal Bond Fund
Schedule of Investments-continued October 31, 1997
================================================================================
Market
Par Value Value
- --------- ------
<S> <C> <C>
Pennsylvania - 3.74%
$ 250,000 Commonwealth of Pennsylvania,
Green County, G.O.
5.100%, 06/15/03
Insured: MBIA..................................... $ 259,503
200,000 Commonwealth of Pennsylvania, G.O.
5.250%, 05/15/99
Insured: FGIC..................................... 204,052
------------
$ 463,555
------------
Puerto Rico - 3.59%
400,000 Commonwealth of Puerto Rico,
Series A, G.O.
6.500%, 07/01/03
Insured: MBIA..................................... 444,660
------------
Rhode Island - 2.38%
275,000 State of Rhode Island, Series A, G.O.
6.000%, 06/15/02
Insured: FGIC..................................... 294,751
------------
Texas - 10.30%
375,000 Arlington Independent School District,
Refunding, G.O.
5.400%, 02/15/99.................................. 382,050
210,000 Tarrant County Health Faciltities
Development Corp.
Health System Revenue, Series A
5.500%, 02/15/05.................................. 222,243
200,000 Texas State Public Finance Authority
Series A, G.O.
5.600%, 10/01/02.................................. 212,314
450,000 Texas State Water Development Board, G.O.
Escrowed to Maturity
5.000% 08/01/99................................... 458,537
------------
1,275,144
------------
Utah - 8.35%
300,000 Intermountain Power Agency
Power Supply Revenue
6.250%, 07/01/07.................................. 336,762
475,000 Jordan School District, Series A, G.O.
5.250%, 06/15/00.................................. 488,903
200,000 Utah State Building Ownership Authority
Lease Revenue, Series A
5.125%, 05/15/03.................................. 207,552
------------
1,033,217
------------
Virginia - 4.23%
250,000 Henrico County,Virginia
Industrial Redevelopment
Authority Revenue
5.300%, 12/01/11.................................. 258,808
250,000 Virigina State Public School
Authority Revenue
5.500%, 08/01/03.................................. 264,600
------------
523,408
------------
Washington - 4.12%
475,000 King County, Washington, Series A, G.O.
5.800%, 01/01/04.................................. 509,741
------------
Wisconsin - 2.17%
250,000 State of Wisconsin, Series A, G.O.
5.750%, 05/01/04.................................. 268,463
------------
Total Municipal Securities........................ $ 12,062,967
(Cost $11,743,478)................................ ------------
Shares
------
INVESTMENT COMPANIES - 0.51%
4,954 Goldman Sachs Tax Exempt Fund..................... 4,954
58,695 Provident Munifund................................ 58,695
------------
Total Investment Companies................. 63,649
(Cost $63,649) ------------
Total Investments - 97.96%......................................... 12,126,616
(Cost $11,807,127)* ------------
Net Other Assets and Liabilities - 2.04%........................... 252,592
------------
Net Assets - 100.00%............................................... $ 12,379,208
------------
- -------------------------------
* Aggregage cost for Federal income tax purposes is $11,807,127.
Gross unrealized appreciation $ 319,637
Gross unrealized (depreciation) (148)
-----------
Net unrealized appreciation $ 319,489
===========
AMBAC American Municipal Bond Assurance Corp.
FGIC Federal Guaranty Insurance Corp.
G.O. General Obligation
IDA Industrial Development Authority
MBIA Municipal Bond Insurance Association
Portfolio Composition (Moody's Ratings)
- ---------------------
Investment Companies 1%
Aaa 56%
Aa 33%
A 8%
NR 2%
----
100%
====
</TABLE>
See accompanying Notes to Financial Statements.
27
<PAGE>
<TABLE>
<CAPTION>
CT&T Funds
Chicago Trust Money Market Fund
Schedule of Investments October 31, 1997
================================================================================
Amortized
Par Value Cost
- --------- ---------
<S> <C> <C>
COMMERCIAL PAPER - 77.33%
$ 4,500,000 Beneficial Corp.
5.5520%, 11/03/97.................................. $ 4,500,000
4,500,000 Associates Corp. of North America
5.5530%, 11/04/97.................................. 4,500,000
4,500,000 Household Finance Corp.
5.5580%, 11/05/97.................................. 4,500,000
4,545,000 Chrysler Financial Corp.
5.5540%, 11/06/97(A)............................... 4,541,528
4,300,000 AVCO Financial Services, Inc.
5.5700%, 11/10/97.................................. 4,300,000
600,000 General Electric Capital Corp.
5.5710%, 11/12/97.................................. 600,000
3,900,000 Heller Financial, Inc.
5.6070%, 11/12/97.................................. 3,900,000
3,500,000 AVCO Financial Services, Inc.
5.5760%, 11/13/97.................................. 3,500,000
1,000,000 Prudential Funding Corp.
5.5100%, 11/13/97.................................. 1,000,000
4,500,000 Sears Roebuck Acceptance Corp.
5.5700%, 11/14/97.................................. 4,500,000
4,500,000 American Express Credit Corp.
5.5800%, 11/17/97.................................. 4,500,000
420,000 Prudential Funding Corp.
5.5000%, 11/18/97.................................. 420,000
3,090,000 Chrysler Financial Corp.
5.5200%, 11/18/97.................................. 3,081,945
1,034,124 Bank of America
5.5300%, 11/18/97.................................. 1,031,423
4,500,000 General Motors Acceptance Corp.
5.5860%, 11/19/97.................................. 4,500,000
3,500,000 Norwest Financial, Inc.
5.6040%, 11/20/97.................................. 3,500,000
1,000,000 American Express Credit Corp.
5.5830%, 11/20/97.................................. 1,000,000
3,500,000 General Motors Acceptance Corp.
5.5829%, 11/21/97.................................. 3,500,000
4,560,000 Chrysler Financial Corp.
5.5850%, 11/21/97(A)............................... 4,546,042
4,500,000 Commercial Credit Co.
5.5570%, 11/24/97.................................. 4,500,000
4,500,000 Heller Financial, Inc.
5.6370%, 11/25/97.................................. 4,500,000
4,500,000 AVCO Financial Services, Inc.
5.5910%, 11/26/97.................................. 4,500,000
2,500,000 First National Bank of Chicago
5.5000%, 12/01/97(A)............................... 2,488,542
2,000,000 American Express Credit Corp.
5.5568%, 12/01/97.................................. 2,000,000
4,500,000 IBM Credit Corp.,
5.5420%, 12/02/97.................................. 4,500,000
4,500,000 Beneficial Corp.
5.5585%, 12/03/97.................................. 4,500,000
4,500,000 Household Finance Corp.
5.5288%, 12/04/97.................................. 4,500,000
4,500,000 Prudential Funding Corp.
5.5381%, 12/05/97.................................. 4,500,000
4,500,000 Commercial Credit Co.
5.5296%, 12/08/97.................................. 4,500,000
4,550,000 Southern California Edison
5.5650%, 12/09/97(A)............................... 4,523,585
4,500,000 CIT Group Holdings
5.5279%, 12/10/97.................................. 4,500,000
4,500,000 CIT Group Holdings
5.5271%, 12/11/97.................................. 4,500,000
3,000,000 American General Finance
5.5271%, 12/12/97.................................. 3,000,000
1,500,000 General Electric Capital Corp.
5.5440%, 12/12/97.................................. 1,500,000
2,122,117 Bank of America
5.5100%, 12/15/97(A)............................... 2,107,825
3,300,000 Associates Corp. of North America
5.5760%, 12/15/97.................................. 3,300,000
1,419,364 Bank of America
5.5100%, 12/16/97(A)............................... 1,409,588
3,000,000 Sears Roebuck Acceptance Corp.
5.5697%, 12/16/97.................................. 3,000,000
4,500,000 Prudential Funding Corp.
5.5576%, 12/17/97.................................. 4,500,000
1,200,000 Prudential Funding Corp.
5.5680%, 12/18/97.................................. 1,200,000
400,000 General Electric Capital Corp.
5.5500%, 12/19/97.................................. 400,000
4,100,000 General Motors Acceptance Corp.
5.5722%, 12/19/97.................................. 4,100,000
4,500,000 American General Finance
5.5407%, 12/22/97.................................. 4,500,000
2,000,000 CIT Group Holdings
5.5706%, 12/23/97.................................. 2,000,000
2,500,000 Beneficial Corp.
5.5808%, 12/23/97.................................. 2,500,000
4,500,000 Sears Roebuck Acceptance Corp.
5.5732%, 12/24/97.................................. 4,500,000
4,100,000 American Express Credit Corp.
5.5713%, 12/31/97.................................. 4,100,000
400,000 General Electric Capital Corp.
5.5603%, 12/31/97.................................. 400,000
1,000,000 Commercial Credit Co.
5.6376%, 01/05/98.................................. 1,000,000
3,700,000 Associates Corp. of America
5.6478%, 01/05/98.................................. 3,700,000
4,100,000 General Electric Capital Corp.
5.5807%, 01/09/98.................................. 4,100,000
</TABLE>
See accompanying Notes to Financial Statements.
28
<PAGE>
<TABLE>
<CAPTION>
CT&T Funds
Chicago Trust Money Market Fund
Schedule of Investments-continued October 31, 1997
================================================================================
Amortized
Par Value Cost
- --------- ----
<S> <C> <C>
$ 400,000 CIT Group Holdings
5.6113%, 01/09/98....................... $ 400,000
4,500,000 John Deere Capital Corp.
5.6184%, 01/15/98....................... 4,500,000
4,500,000 General Electric Capital Corp.
5.6741%, 01/15/98....................... 4,500,000
4,500,000 Norwest Financial, Inc.
5.6647%, 01/22/98....................... 4,500,000
3,300,000 Heller Financial, Inc.
5.7067%, 01/22/98....................... 3,300,000
-------------
Total Commercial Paper.................. 184,450,478
(Cost $184,450,478) -------------
CERTIFICATES OF DEPOSIT - 5.16%
4,500,000 Old Kent Bank
5.5000%, 11/07/97....................... 4,500,000
3,300,000 Old Kent Bank
5.5600%, 12/18/97....................... 3,300,000
4,500,000 Old Kent Bank
5.5700%, 12/26/97....................... 4,500,000
-------------
Total Certificates of Deposit........... 12,300,000
(Cost $12,300,000) -------------
GIC WITHIN FUNDING AGREEMENT - 4.19%
10,000,000 Allstate Life Funding Agreement GIC
5.7575%, 12/01/97....................... 10,000,000
-------------
Total GIC Within
Funding Agreement....................... 10,000,000
(Cost $10,000,000) -------------
TIME DEPOSITS - 3.77%
$ 4,500,000 Canadian Imperial Bank of Commerce
5.5400%, 12/30/97....................... $ 4,500,000
4,500,000 Canadian Imperial Bank of Commerce
5.5600%, 12/29/97....................... 4,500,000
-------------
Total Time Deposits..................... 9,000,000
(Cost $9,000,000) -------------
REPURCHASE AGREEMENT - 9.52%
22,718,000 First Chicago,
5.6600%, dated 10/31/97 to be repurchased
on 11/03/97 at $22,728,715
(Collateralized by U.S. Treasury Note
8.500%, due 11/15/00;
Total Par $20,785,000).................. 22,718,000
------------
Total Repurchase Agreement.............. 22,718,000
(Cost $22,718,000) ------------
Total Investments - 99.97%...................................... 238,468,478**
------------
Net Other Assets and Liabilities -0.03%......................... 82,996
------------
Net Assets - 100.00%............................................ $238,551,474
</TABLE> ============
- ---------------------------
(A) Annualized yield at time of purchase
** At October 31, 1997 cost is idenitical for book and Federal income tax
purposes.
See accompanying Notes to Financial Statements.
29
<PAGE>
CT&T Funds
Statement of Assets and Liabilities OCTOBER 31, 1997
================================================================================
<TABLE>
<CAPTION>
Chicago Trust
Montag & Caldwell Growth & Income Chicago Trust Chicago Trust
Growth Fund Fund Talon Fund Balanced Fund
----------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Investments at cost.......... $606,867,247 $182,870,419 $24,636,650 $141,457,686
Repurchase agreements........ -- 10,017,000 -- 11,933,000
Net unrealized appreciation.. 147,140,836 77,036,253 4,128,506 33,598,179
------------ ------------ ----------- ------------
Total investments at value... 754,008,083 269,923,672 28,765,156 186,988,865
Cash.......................... 234 1,399 231 --
Receivables:
Dividends and interest....... 502,350 37,066 88,732 1,193,984
Fund shares sold............. 3,895,259 471,113 5,073 263,527
Investments sold............. -- 4,672,930 -- --
Due from Advisor, net........ -- -- -- --
Deferred organization costs... 6,670 5,574 6,277 4,036
Other assets.................. 10,220 31,068 6,158 1,244
------------ ------------ ----------- ------------
Total assets................ 758,422,816 275,142,822 28,871,627 188,451,656
------------ ------------ ----------- ------------
LIABILITIES:
Payables:
Bank overdraft............... -- -- -- 24,283
Dividend distribution........ -- -- -- --
Investments purchased........ 8,311,553 -- 359,975 --
Fund shares redeemed......... 791,859 78,981 -- 90,857
Due to Advisor, net.......... 517,213 167,934 12,747 113,036
Distribution fees............ 130,197 221,436 17,630 180,966
Accrued expenses.............. 253,828 66,564 21,692 49,177
------------ ------------ ----------- ------------
Total liabilities........... 10,004,650 534,915 412,044 458,319
------------ ------------ ----------- ------------
NET ASSETS..................... $748,418,166 $274,607,907 $28,459,583 $187,993,337
============ ============ =========== ============
NET ASSETS consist of:
Capital paid-in............... $593,853,104 $178,423,017 $19,796,414 $142,370,306
Accumulated undistributed
(distribution in excess of)
net investment income (loss). -- -- 37,253 624,636
Accumulated net realized gain
(loss) on investments........ 7,424,226 19,148,637 4,497,410 11,400,216
Net unrealized appreciation
on investments............... 147,140,836 77,036,253 4,128,506 33,598,179
------------ ------------ ----------- ------------
TOTAL NET ASSETS............... $748,418,166 $274,607,907 $28,459,583 $187,993,337
============ ============ =========== ============
Shares of beneficial interest
outstanding................... 32,959,072 13,917,656 1,617,134 16,999,608
NET ASSET VALUE
Offering and redemption price
per share (Net Assets/Shares
outstanding)................. (A) $ 19.73 $ 17.60 $ 11.06
============ ============ =========== ============
</TABLE>
- ------------------------
(A) Montag & Caldwell Growth Fund Class N (Retail):
Net Asset Value, offering price and redemption price per share (Based on net
assets of $479,557,025 and 21,142,111 shares issued and outstanding) $22.68
Montag & Caldwell Growth Fund Class I (Institutional):
Net Asset Value, offering price and redemption price per share (Based on net
assets of $268,861,141 and 11,816,961 shares issued and outstanding) $22.75
See accompanying Notes to Financial Statements.
30
<PAGE>
<TABLE>
<CAPTION>
Chicago Trust Chicago Trust
Montag & Caldwell Chicago Trust Municipal Bond Money Market
Balanced Fund Bond Fund Fund Fund
- ----------------- --------------- -------------- -------------
<S> <C> <C> <C>
$ 71,040,168 $ 112,746,004 $ 11,807,127 $ 215,750,478
-- 3,281,000 -- 22,718,000
11,544,063 2,832,228 319,489 --
- ----------------- --------------- -------------- -------------
82,584,231 118,859,232 12,126,616 238,468,478
-- 7,486 417 --
589,290 1,755,024 202,811 1,054,958
206,223 117,111 100,098 168,650
355 -- -- --
-- -- 105 --
6,670 5,574 5,574 5,574
1,356 1,152 26,647 12,392
- ----------------- --------------- -------------- -------------
83,388,125 120,745,579 12,462,268 239,710,052
- ----------------- --------------- -------------- -------------
397 -- -- 652
1,345 -- -- 1,029,742
577,478 -- -- --
3,677 3,552 -- 13,230
52,295 38,587 -- 77,330
2,808 142,791 43,249 --
31,072 28,472 39,811 37,624
- ----------------- --------------- -------------- -------------
669,072 213,402 83,060 1,158,578
- ----------------- --------------- -------------- -------------
$ 82,719,053 $ 120,532,177 $ 12,379,208 $ 238,551,474
================= =============== =============== =============
$ 68,927,242 $ 117,272,641 $ 12,123,373 $ 238,551,474
185,563 452,597 27,456 --
2,062,185 (25,289) (91,110) --
11,544,063 2,832,228 319,489 --
- ----------------- --------------- --------------- -------------
$ 82,719,053 $ 120,532,177 $ 12,379,208 $ 238,551,474
================= =============== =============== =============
5,167,798 11,894,302 1,215,334 238,551,474
$ 16.01 $ 10.13 $ 10.19 $ 1.00
================= =============== ============== =============
</TABLE>
31
<PAGE>
CT&T Funds
Statement of Operations
For the Year Ended October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHICAGO TRUST
MONTAG & CALDWELL GROWTH & INCOME CHICAGO TRUST CHICAGO TRUST
GROWTH FUND FUND TALON FUND BALANCED FUND
----------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................................ $ 3,062,695 $ 2,616,520 $ 93,313 $ 1,115,889
Interest................................................. 1,035,399 1,054,079 366,033 5,603,622
------------ ----------- ---------- -----------
Total Investment Income................................ 4,098,094 3,670,599 459,346 6,719,511
------------ ----------- ---------- -----------
EXPENSES:
Investment advisory fees................................. 3,800,124 1,734,260 182,742 1,228,508
Distribution expenses.................................... 836,514 619,130 57,092 438,574
Transfer agent fees...................................... 167,566 98,959 53,658 33,312
Administration fees...................................... 242,224 121,926 11,675 85,382
Accounting fees.......................................... 66,037 49,168 18,045 47,067
Registration expenses.................................... 209,681 14,322 10,503 12,499
Custodian fees........................................... 47,481 32,124 13,857 30,396
Professional fees........................................ 48,246 26,954 11,515 22,630
Amortization of organization costs....................... 3,332 4,997 3,332 1,401
Report to shareholder expense............................ 33,756 12,666 1,194 8,709
Trustees fees............................................ 2,703 2,703 2,703 2,703
Other expenses........................................... 8,943 64,777 15,911 66,970
------------ ----------- ---------- -----------
Total expenses......................................... 5,466,607 2,781,986 382,227 1,978,151
------------ ----------- ---------- -----------
Expenses reimbursed.................................... (41,428) (129,857) (85,596) (102,203)
------------ ----------- ---------- -----------
Net expenses........................................... 5,425,179 2,652,129 296,631 1,875,948
------------ ----------- ---------- -----------
NET INVESTMENT INCOME (LOSS).............................. (1,327,085) 1,018,470 162,715 4,843,563
------------ ----------- ---------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (including
a net realized (loss) on option transactions of
($169,276) in the Talon Fund)............................ 8,570,687 19,177,699 4,497,850 11,378,927
Net change in unrealized appreciation
on investments (including a net
unrealized appreciation on option transactions of
$137,375 in the Talon Fund).............................. 114,427,550 33,416,450 1,618,377 15,462,457
------------ ----------- ---------- -----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS...................................... 122,998,237 52,594,149 6,116,227 26,841,384
------------ ----------- ---------- -----------
NET INCREASE IN NET
ASSETS FROM OPERATIONS................................... $121,671,152 $53,612,619 $6,278,942 $31,684,947
============ =========== ========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
32
<PAGE>
Chicago Trust Chicago Trust
Montag & Caldwell Chicago Trust Municipal Bond Money Market
Balanced Fund Bond Fund Fund Fund
----------------- ------------- -------------- -------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$ 219,468 $ -- $ -- $ --
1,399,409 7,043,490 534,204 13,958,204
----------------- ------------- -------------- -------------
1,618,877 7,043,490 534,204 13,958,204
----------------- ------------- -------------- -------------
400,868 550,514 69,127 1,004,607
131,861 247,590 28,790 --
47,730 42,264 23,435 54,844
27,230 49,334 5,686 121,794
29,879 42,584 17,743 52,303
22,362 18,235 6,333 10,426
17,386 23,135 7,512 39,465
14,288 17,723 11,566 27,534
3,332 4,997 4,997 4,997
3,041 5,111 559 12,374
2,703 2,703 2,703 2,703
10,466 17,298 10,533 68,479
----------------- ------------- -------------- -------------
711,146 1,021,488 188,984 1,399,526
----------------- ------------- -------------- -------------
(44,973) (221,539) (85,359) (142,332)
----------------- ------------- -------------- -------------
666,173 799,949 103,625 1,257,194
----------------- ------------- -------------- -------------
952,704 6,243,541 430,579 12,701,010
----------------- ------------- -------------- -------------
2,102,297 (36,729) 6,147 --
7,581,239 2,754,254 140,720 --
----------------- ------------- -------------- -------------
9,683,536 2,717,525 146,867 --
----------------- ------------- -------------- -------------
$ 10,636,240 $ 8,961,066 $ 577,446 $ 12,701,010
================= ============= ============== =============
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
CT&T FUNDS
Statement of Changes in Net Assets
====================================================================================================================================
Montag & Caldwell Growth Fund Chicago Trust Growth & Income Fund
----------------------------- ----------------------------------
Year Ended Year Ended
October 31, 1997 October 31, 1996* October 31, 1997 October 31, 1996
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
NET ASSETS at beginning of period................. $ 218,649,895 $ 40,355,049 $205,133,317 $172,295,705
------------- ------------ ------------ ------------
Increase in net asset
from operations:
Net investment income (loss).................... (1,327,085) (28,035) 1,018,470 1,451,728
Net realized gain on investments sold
and purchased options transactions............. 8,570,687 2,171,050 19,177,699 4,305,113
Net change in unrealized appreciation
on investments and assets
and liabilities in purchased options........... 114,427,550 26,825,183 33,416,450 39,311,048
------------- ------------ ------------ ------------
Net increase in net assets
from operations................................ 121,671,152 28,968,198 53,612,619 45,067,889
------------- ------------ ------------ ------------
Distributions to shareowners from:
Net investment income:
Retail Class................................. -- (28,975) (1,152,026) (1,444,903)
Institutional Class.......................... (26,630) (45,883) -- --
Net realized gain on investments:
Retail Class................................. (1,466,613) (24,401) (4,334,020) (976,557)
Institutional Class.......................... (412,803) -- -- --
------------- ------------ ------------ ------------
Total distributions.......................... (1,906,046) (99,259) (5,486,046) (2,421,460)
------------- ------------ ------------ ------------
Capital share transactions:
Net proceeds from sales of shares:
Retail Class................................. 339,687,434 118,083,887 50,803,893 43,023,005
Institutional Class.......................... 228,296,239 51,795,147 -- --
Issued to shareowners in reinvestment
of distributions:
Retail Class................................. 1,404,998 53,046 5,404,887 2,391,580
Institutional Class.......................... 396,515 45,883 -- --
Cost of shares repurchased:
Retail Class................................. (115,055,486) (16,878,640) (34,860,763) (55,223,402)
Institutional Class.......................... (44,726,535) (3,673,416) -- --
------------- ------------ ------------ ------------
Net increase (decrease) from capital
share transactions........................ 410,003,165 149,425,907 21,348,017 (9,808,817)
------------- ------------ ------------ ------------
Total increase in net assets............... 529,768,271 178,294,846 69,474,590 32,837,612
------------- ------------ ------------ ------------
NET ASSETS at end of period (including line A).... $ 748,418,166 $218,649,895 $274,607,907 $205,133,317
============= ============ ============ ============
(A) Undistributed (distribution in excess of)
net investment income (loss).................. $ -- $ (73,703) $ -- $ 133,556
------------- ------------ ------------ ------------
OTHER INFORMATION:
Share transactions:
Retail Class:
Sold......................................... 16,692,907 7,779,869 2,806,114 2,994,709
Issued to shareowners in reinvestment
of distributions............................ 79,785 3,770 326,567 170,324
Repurchased.................................. (5,364,133) (1,115,729) (1,902,988) (3,829,976)
Institutional Class:
Sold......................................... 10,833,116 3,302,194 -- --
Issued to shareowners in reinvestment
of distributions............................ 22,316 2,812 -- --
Repurchased.................................. (2,106,489) (236,988) -- --
------------- ------------ ------------ ------------
Net increase (decrease) in shares
outstanding.............................. 20,157,502 9,735,928 1,229,693 (664,943)
============= ============ ============ ============
</TABLE>
- --------------------------------------------------------------------------------
* Montag & Caldwell Growth Fund Institutional Class commenced investment
operations on June 28, 1996.
See accompanying Notes to Financial Statements.
34
<PAGE>
<TABLE>
<CAPTION>
CHICAGO TRUST TALON FUND CHICAGO TRUST BALANCED FUND
---------------------------------- ----------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1997 OCTOBER 31, 1996 OCTOBER 31, 1997 OCTOBER 31, 1996
---------------- ---------------- ---------------- ----------------
$ 17,417,675 $ 10,537,854 $ 156,703,443 $ 152,820,466
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C>
162,715 42,177 4,843,563 4,547,650
4,497,850 1,453,661 11,378,927 2,227,691
1,618,377 1,649,993 15,462,457 17,768,218
---------------- ---------------- ---------------- ----------------
6,278,942 3,145,831 31,684,947 24,543,559
---------------- ---------------- ---------------- ----------------
(134,407) (35,795) (4,764,936) (4,421,473)
-- -- -- --
(1,458,660) (634,240) (2,253,139) (7,294)
-- -- -- --
---------------- ---------------- ---------------- ----------------
(1,593,067) (670,035) (7,018,075) (4,428,767)
---------------- ---------------- ---------------- ----------------
6,345,104 4,424,049 28,395,564 26,178,729
-- -- -- --
1,577,255 662,762 7,017,789 4,428,767
-- -- -- --
(1,566,326) (682,786) (28,790,331) (46,839,311)
-- -- -- --
---------------- ---------------- ---------------- ----------------
6,356,033 4,404,025 6,623,022 (16,231,815)
---------------- ---------------- ---------------- ----------------
11,041,908 6,879,821 31,289,894 3,882,977
---------------- ---------------- ---------------- ----------------
$ 28,459,583 $ 17,417,675 $ 187,993,337 $ 156,703,443
================ ================ ================ ================
$ 37,253 $ 8,945 $ 624,636 $ 567,503
---------------- ---------------- ---------------- ----------------
397,032 336,046 2,757,711 2,932,312
107,919 55,106 699,716 495,015
(97,875) (54,225) (2,774,505) (5,245,177)
-- -- -- --
-- -- -- --
-- -- -- --
---------------- ---------------- ---------------- ----------------
407,076 336,927 682,922 (1,817,850)
================ ================ ================ ================
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
CT&T Funds
Statement of Changes in Net Assets (continued) OCTOBER 31, 1997
====================================================================================================================================
Montag & Caldwell Balanced Fund Chicago Trust Bond Fund
----------------------------------- -----------------------------------
Year Ended Year Ended
October 31, 1997 October 31, 1996 October 31, 1997 October 31, 1996
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
NET ASSETS at beginning of period.................... $ 31,472,671 $ 21,908,174 $ 79,210,728 $ 70,490,335
---------------- ---------------- ---------------- ---------------
Increase in net assets
from operations:
Net investment income.............................. 952,704 562,623 6,243,541 4,684,008
Net realized gain (loss) on investments sold....... 2,102,297 2,720,967 (36,729) (21,824)
Net change in unrealized appreciation
(depreciation) of investments..................... 7,581,239 1,750,771 2,754,254 (427,461)
---------------- ---------------- ---------------- ---------------
Net increase in net assets
from operations................................... 10,636,240 5,034,361 8,961,066 4,234,723
---------------- ---------------- ---------------- ---------------
Distributions to shareowners from:
Net investment income.............................. (837,377) (544,785) (6,043,358) (4,576,113)
Net realized gain on investments................... (2,702,590) -- (16,748) (26,301)
---------------- ---------------- ---------------- ---------------
Total distributions............................. (3,539,967) (544,785) (6,060,106) (4,602,414)
---------------- ---------------- ---------------- ---------------
Capital share transactions:
Net proceeds from sales of shares.................. 58,631,470 17,019,049 46,817,358 18,394,655
Issued to shareowners in
reinvestment of distributions..................... 3,490,623 544,624 4,797,389 4,131,546
Cost of shares repurchased......................... (17,971,984) (12,488,752) (13,194,258) (13,438,117)
---------------- ---------------- ---------------- ---------------
Net increase (decrease) from
capital share transactions..................... 44,150,109 5,074,921 38,420,489 9,088,084
---------------- ---------------- ---------------- ---------------
Total increase (decrease) in net assets......... 51,246,382 9,564,497 41,321,449 8,720,393
---------------- ---------------- ---------------- ---------------
NET ASSETS at end of period (including line A)....... $ 82,719,053 $ 31,472,671 $ 120,532,177 $ 79,210,728
================ ================ ================ ===============
(A) Undistributed (distribution in excess of)
net investment income........................... $ 185,563 $ 70,787 $ 452,597 $ 258,643
---------------- ---------------- ---------------- ---------------
OTHER INFORMATION:
Share transactions:
Sold............................................... 3,939,135 1,269,601 4,734,805 1,866,993
Issued to shareowners in reinvestment
of distributions.................................. 255,726 41,681 485,679 422,144
Repurchased........................................ (1,229,194) (916,526) (1,334,065) (1,373,273)
---------------- ---------------- ---------------- ---------------
Net increase (decrease) in shares outstanding... 2,965,667 394,756 3,886,419 915,864
================ ================ ================ ===============
</TABLE>
See accompanying Notes to Financial Statements.
36
<PAGE>
CHICAGO TRUST MUNICIPAL BOND FUND CHICAGO TRUST MONEY MARKET FUND
- ------------------------------------ -----------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, 1997 OCTOBER 31, 1996 OCTOBER 31, 1997 OCTOBER 31, 1996
- ---------------- ---------------- ---------------- ----------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
$ 11,186,162 $ 11,679,498 $ 226,535,616 $ 206,075,314
- ------------- ------------- -------------- -------------
430,579 421,107 12,701,010 10,298,196
6,147 30,220 -- --
140,720 (54,373) -- --
- ------------- ------------- -------------- -------------
577,446 396,954 12,701,010 10,298,196
- ------------- ------------- -------------- -------------
(426,993) (419,021) (12,701,010) (10,298,196)
-- -- -- --
- ------------- ------------- -------------- -------------
(426,993) (419,021) (12,701,010) (10,298,196)
- ------------- ------------- -------------- -------------
1,375,126 394,557 569,551,234 494,444,216
21,748 22,047 434,377 331,446
(354,281) (887,873) (557,969,753) (474,315,360)
- ------------- ------------- -------------- -------------
1,042,593 (471,269) 12,015,858 20,460,302
------------- ------------- -------------- -------------
1,193,046 (493,336) 12,015,858 20,460,302
- ------------- ------------- -------------- -------------
$ 12,379,208 $ 11,186,162 $ 238,551,474 $ 226,535,616
============= ============= ============== =============
$ 27,456 $ 23,870 $ -- $ --
- ------------- ------------- -------------- -------------
135,835 39,198 569,551,234 494,444,216
2,159 2,203 434,377 331,446
(35,025) (87,989) (557,969,753) (474,315,360)
- ------------- ------------- -------------- -------------
102,969 (46,588) 12,015,858 20,460,302
============= ============= ============== =============
</TABLE>
37
<PAGE>
<TABLE>
<CAPTION>
CT&T FUNDS
Financial Highlights October 31, 1997
=====================================================================================================================
Montag & Caldwell Growth Fund
-----------------------------------------------------------
Retail Class Institutional Class
----------------------------------- ----------------------
Year Year Period Year Period
Ended Ended Ended Ended Ended
10/31/97 10/31/96 10/31/95/(a)/ 10/31/97 10/31/96/(b)/
-------- -------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................. $ 17.08 $ 13.16 $ 10.00 $ 17.08 $ 15.59
Income from Investment Operations:
Net investment income (loss)....................... (0.05) -- 0.02 -- 0.02
Net realized and unrealized gain
on investments.................................... 5.79 3.93 3.16 5.81 1.49
-------- -------- ------- -------- --------
Total from investment operations.................. 5.74 3.93 3.18 5.81 1.51
-------- -------- ------- -------- --------
Less Distributions:
Distributions from and in excess
of net investment income.......................... -- (0.01) (0.02) -- (0.02)
Distributions from net realized
gain on investments............................... (0.14) -- -- (0.14) --
-------- -------- ------- -------- --------
Total distributions............................. (0.14) (0.01) (0.02) (0.14) (0.02)
-------- -------- ------- -------- --------
Net increase in net asset value...................... 5.60 3.92 3.16 5.67 1.49
-------- -------- ------- -------- --------
Net Asset Value, End of Period....................... $ 22.68 $ 17.08 $ 13.16 $ 22.75 $ 17.08
======== ======== ======= ======== ========
Total Return/1/...................................... 33.82% 29.91% 31.87% 34.26% 9.67%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's)................. $479,557 $166,243 $40,355 $268,861 $ 52,407
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Advisor/2/...................................... 1.24% 1.32% 1.87% 0.93% 0.98%
After reimbursement of expenses
by Advisor/2/...................................... 1.23% 1.28% 1.30% 0.93% 0.98%
Ratios of net investment income to average net assets:
Before reimbursement of expenses
by Advisor/2/...................................... (0.38)% (0.10)% (0.36)% (0.07)% 0.17%
After reimbursement of expenses
by Advisor/2/...................................... (0.37)% (0.06)% 0.20% (0.06)% 0.17%
Portfolio Turnover................................... 18.65% 26.36% 34.46% 18.65% 26.36%
Average Commission Rate Paid......................... $ 0.0592 $ 0.0639 N/R $ 0.0592 $ 0.0639
</TABLE>
- -----------------------------------------------------------------------------
/1/ Not Annualized.
/2/ Annualized.
(a) Montag & Caldwell Growth Fund Retail Class commenced investment operations
on November 2, 1994.
(b) Montag & Caldwell Growth Fund Institutional Class commenced investment
operations on June 28, 1996.
N/R: Not required.
See accompanying Notes to Financial Statements.
38
<PAGE>
CT&T Funds
Financial Highlights October 31, 1997
================================================================================
<TABLE>
<CAPTION>
Chicago Trust Growth & Income Fund
-------------------------------------------------------------------
Year Year Year Period
Ended Ended Ended Ended
10/31/97 10/31/96 10/31/95 10/31/94/(a)/
-------- -------- -------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......................... $ 16.17 $ 12.90 $ 10.11 $ 10.00
-------- -------- -------- -----------
Income from Investment Operations:
Net investment income....................................... 0.08 0.11 0.09 0.07
Net realized and unrealized gain on investments............. 3.91 3.34 2.79 0.10
-------- -------- -------- -----------
Total from investment operations......................... 3.99 3.45 2.88 0.17
-------- -------- -------- -----------
Less Distributions:
Distributions from and in excess of net investment income... (0.09) (0.11) (0.09) (0.06)
Distributions from net realized gain on investments......... (0.34) (0.07) -- --
-------- -------- -------- -----------
Total distributions...................................... (0.43) (0.18) (0.09) (0.06)
-------- -------- -------- -----------
Net increase in net asset value............................... 3.56 3.27 2.79 0.11
-------- -------- -------- -----------
Net Asset Value, End of Period................................ $ 19.73 $ 16.17 $ 12.90 $ 10.11
======== ======== ======== ===========
Total Return/1/............................................... 25.16% 26.98% 28.66% 1.73%
Ratios/supplemental Data:
Net Assets, End of Period (in 000's).......................... $274,608 $205,133 $172,296 $ 12,282
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor/2/............... 1.12% 1.15% 1.50% 2.21%
After reimbursement of expenses by Advisor/2/................ 1.07%/3/ 1.00% 1.09%/4/ 1.20%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor/2/............... 0.36% 0.62% 0.33% (0.15)%
After reimbursement of expenses by Advisor/2/................ 0.41% 0.77% 0.74% 0.86%
Portfolio Turnover............................................ 30.58% 25.48% 9.00% 37.01%
Average Commission Rate Paid.................................. $ 0.0530 $ 0.0571 N/R N/R
</TABLE>
- ----------------------------------------------------------------------
/1/ Not Annualized.
/2/ Annualized.
/3/ The Advisor's expense reimbursement level, which affects the net expense
ratio, changed from 1.00% to 1.10% on February 28, 1997.
/4/ The Advisor's expense reimbursement level, which affects the net expense
ratio, changed from 1.20% to 1.00% on September 21, 1995.
(a) Chicago Trust Growth & Income Fund commenced investment operations on
December 13, 1993.
N/R: Not required.
See accompanying Notes to Financial Statements.
39
<PAGE>
CT&T Funds
Financial Highlights October 31, 1997
================================================================================
<TABLE>
<CAPTION>
Chicago Trust Talon Fund
-------------------------------------------------------------------
Year Year Year Period
Ended Ended Ended Ended
10/31/97 10/31/96 10/31/95 10/31/94/(a)/
-------- -------- -------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......................... $ 14.39 $ 12.07 $ 10.25 $ 10.00
-------- -------- -------- -----------
Income from Investment Operations:
Net investment income....................................... 0.11 0.04 0.09 0.02
Net realized and unrealized gain on investments
and options................................................. 4.38 3.01 1.84 0.23
-------- -------- -------- -----------
Total from investment operations......................... 4.49 3.05 1.93 0.25
-------- -------- -------- -----------
Less Distributions:
Distributions from and in excess of net investment income... (0.09) (0.03) (0.11) --
Distributions from net realized gain on investments......... (1.19) (0.70) -- --
-------- -------- -------- -----------
Total distributions...................................... (1.28) (0.73) (0.11) --
-------- -------- -------- -----------
Net increase in net asset value............................... 3.21 2.32 1.82 0.25
-------- -------- -------- -----------
Net Asset Value, End of Period................................ $ 17.60 $ 14.39 $ 12.07 $ 10.25
======== ======== ======== ===========
Total Return/1/............................................... 33.47% 26.51% 18.92% 2.50%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's).......................... $ 28,460 $ 17,418 $ 10,538 $ 4,355
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor/2/............... 1.67% 1.98% 3.04% 7.82%
After reimbursement of expenses by Advisor/2/................ 1.30% 1.30% 1.30% 1.30%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor/2/............... 0.34% (0.38)% (0.97)% (4.13)%
After reimbursement of expenses by Advisor/2/................ 0.71% 0.30% 0.77% 2.39%
Portfolio Turnover............................................ 112.72% 126.83% 229.43% 33.66%
Average Commission Rate Paid.................................. $ 0.0591 $ 0.0612 N/R N/R
</TABLE>
- ----------------------------------------------------------------------
/1/ Not Annualized.
/2/ Annualized.
(a) Chicago Trust Talon Fund commenced investment operations on
September 19, 1994.
N/R: Not required.
See accompanying Notes to Financial Statements.
40
<PAGE>
CT&T FUNDS
Financial Highlights October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Chicago Trust Balanced Fund
---------------------------------------
Year Year Period
Ended Ended Ended
10/31/97 10/31/96 10/31/95/(a)/
-------- -------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period......... $ 9.60 $ 8.43 $ 8.34
-------- -------- --------
Income from Investment Operations:
Net investment income.................... 0.28 0.27 0.03
Net realized and unrealized gain on
investments............................. 1.60 1.16 0.06
-------- -------- --------
Total from investment operations....... 1.88 1.43 0.09
-------- -------- --------
Less Distributions:
Distributions from and in excess of net
investment income....................... (0.28) (0.26) --
Distributions from net realized gain on
investments............................. (0.14) -- --
-------- -------- --------
Total distributions.................... (0.42) (0.26) --
-------- -------- --------
Net increase in net asset value.............. 1.46 1.17 0.09
-------- -------- --------
Net Asset Value, End of Period............... $ 11.06 $ 9.60 $ 8.43
======== ======== ========
Total return/1/.............................. 20.10% 17.21% 1.08%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's)......... $187,993 $156,703 $152,820
Ratios of expenses to average net assets:
Before reimbursement of expenses by
Advisor/2/................................ 1.13% 1.17% 1.19%
After reimbursement of expenses by
Advisor/2/................................ 1.07%/3/ 1.00% 1.00%
Ratios of net investment income to average
net assets:
Before reimbursement of expenses by
Advisor/2/................................ 2.70% 2.79% 2.56%
After reimbursement of expenses by
Advisor/2/................................ 2.76% 2.96% 2.73%
Portfolio Turnover........................... 34.69% 34.29% 0.72%
Average Commission Rate Paid................. $ 0.0576 $ 0.0596 N/R
</TABLE>
- ------------------------------------
/1/ Not Annualized.
/2/ Annualized.
/3/ The Advisor's expense reimbursement level, which affects the net
expense ratio, changed from 1.00% to 1.10% on February 28, 1997.
(a) Chicago Trust Balanced Fund (formerly the Chicago Trust Asset Allocation
Fund) commenced investment operations on September 21, 1995.
N/R: Not Required.
See accompanying Notes to Financial Statements.
41
<PAGE>
CT&T Funds
Financial Highlights October 31, 1997
================================================================================
<TABLE>
<CAPTION>
Montag & Caldwell Balanced Fund
----------------------------------------
Year Year Period
Ended Ended Ended
10/31/97 10/31/96 10/31/95/(a)/
-------- -------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................... $ 14.29 $ 12.12 $ 10.00
------- ------- -------
Income from Investment Operations:
Net investment income....................................... 0.25 0.27 0.26
Net realized and unrealized gain on investments............. 2.93 2.17 2.09
------- ------- -------
Total from investment operations...................... 3.18 2.44 2.35
------- ------- -------
Less Distributions:
Distributions from and in excess of net investment income... (0.25) (0.27) (0.23)
Distributions from net realized gain on investments......... (1.21) -- --
------- ------- -------
Total distributions................................... (1.46) (0.27) (0.23)
------- ------- -------
Net increase in net asset value................................ 1.72 2.17 2.12
------- ------- -------
Net Asset Value, End of Period................................. $ 16.01 $ 14.29 $ 12.12
======= ======= =======
Total Return/1/................................................ 24.26% 20.37% 23.75%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's)........................... $82,719 $31,473 $21,908
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor/2/............... 1.33% 1.58% 2.50%
After reimbursement of expenses by Advisor/2/................ 1.25% 1.25% 1.25%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor/2/............... 1.70% 1.83% 1.38%
After reimbursement of expenses by Advisor/2/................ 1.78% 2.16% 2.63%
Portfolio Turnover............................................. 28.13% 43.58% 27.33%
Average Commission Rate Paid................................... $0.0591 $0.0644 N/R
- ----------------------------------------------------------
</TABLE>
/1/ Not Annualized.
/2/ Annualized.
(a) Montag & Caldwell Balanced Fund commenced investment operations on
November 2, 1994.
N/R: Not required.
See accompanying Notes to Financial Statements.
42
<PAGE>
CT&T Funds
Financial Highlights October 31, 1997
================================================================================
<TABLE>
<CAPTION>
Chicago Trust Bond Fund
--------------------------------------------------
Year Year Year Period
Ended Ended Ended Ended
10/31/97 10/31/96 10/31/95 10/31/94/(a)/
-------- -------- -------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period....................... $ 9.89 $ 9.94 $ 9.21 $ 10.00
-------- ------- ------- -------
Income from Investment Operations:
Net investment income.................................. 0.61 0.60 0.60 0.50
Net realized and unrealized gain (loss) on investments. 0.23 (0.05) 0.73 (0.82)
-------- ------- ------- -------
Total from investment operations.................. 0.84 0.55 1.33 (0.32)
-------- ------- ------- -------
Less distributions from and in excess
of net investment income................................ (0.60) (0.60) (0.60) (0.47)
-------- ------- ------- -------
Net increase (decrease) in net asset value................. 0.24 (0.05) 0.73 (0.79)
-------- ------- ------- -------
Net Asset Value, End of Period............................. $ 10.13 $ 9.89 $ 9.94 $ 9.21
======== ======= ======= =======
Total Return/1/............................................ 8.84% 5.76% 14.89% (3.23)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's)....................... $120,532 $79,211 $70,490 $12,546
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor/2/........... 1.02% 1.10% 1.54% 2.02%
After reimbursement of expenses by Advisor/2/............ 0.80% 0.80% 0.80% 0.80%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor/2/........... 6.02% 5.89% 5.78% 4.83%
After reimbursement of expenses by Advisor/2/............ 6.24% 6.19% 6.52% 6.05%
Portfolio Turnover......................................... 17.76% 41.75% 68.24% 20.73%
- ------------------------------------------------------------------
</TABLE>
/1/ Not Annualized.
/2/ Annualized.
(a) Chicago Trust Bond Fund commenced investment operations on December 13,
1993.
See accompanying Notes to Financial Statements.
43
<PAGE>
CT&T FUNDS
Financial Highlights October 31, 1997
===============================================================================
<TABLE>
<CAPTION>
Chicago Trust Municipal Bond Fund
-----------------------------------------------------
Year Year Year Period
Ended Ended Ended Ended
10/31/97 10/31/96 10/31/95 10/31/94/(a)/
--------- -------- -------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............................. $ 10.06 $ 10.08 $ 9.56 $ 10.00
--------- -------- -------- -------------
Income from Investment Operations:
Net investment income.......................................... 0.38 0.38 0.35 0.27
Net realized and unrealized gain (loss) on investments......... 0.12 (0.02) 0.52 (0.46)
--------- -------- -------- -------------
Total from investment operations............................ 0.50 0.36 0.87 (0.19)
--------- -------- -------- -------------
Less distributions from and in excess
of net investment income..................................... (0.37) (0.38) (0.35) (0.25)
--------- -------- -------- -------------
Net increase (decrease) in net asset value....................... 0.13 (0.02) 0.52 (0.44)
--------- -------- -------- -------------
Net Asset Value, End of Period................................... $ 10.19 $ 10.06 $ 10.08 $ 9.56
========= ======== ======== =============
Total Return/1/.................................................. 5.13% 3.59% 9.29% (1.92)%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's)............................. $ 12,379 $ 11,186 $ 11,679 $ 10,462
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor/2/.................. 1.64% 1.53% 2.16% 2.09%
After reimbursement of expenses by Advisor/2/................... 0.90% 0.90% 0.90% 0.90%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor/2/.................. 3.00% 3.11% 2.37% 1.90%
After reimbursement of expenses by Advisor/2/................... 3.74% 3.74% 3.63% 3.09%
Portfolio Turnover............................................... 16.19% 27.47% 42.81% 14.85%
</TABLE>
- -----------------------------------------------------------------
/1/ Not Annualized.
/2/ Annualized.
(a) Chicago Trust Municipal Bond Fund commenced investment operations
on December 13, 1993.
See accompanying Notes to Financial Statements.
44
<PAGE>
CT&T FUNDS
Financial Highlights October 31, 1997
===============================================================================
<TABLE>
<CAPTION>
Chicago Trust Money Market Fund
--------------------------------------------------
Year Year Year Period
Ended Ended Ended Ended
10/31/97 10/31/96 10/31/95 10/31/94/(a)/
-------- -------- -------- -------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------------
Income from Investment Operations:
Net investment income..................................... 0.05 0.05 0.05 0.03
-------- -------- -------- -------------
Less Distributions from net investment income.............. (0.05) (0.05) (0.05) (0.03)
-------- -------- -------- -------------
Net Asset Value, End of Period.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== =============
Total Return/1/............................................. 5.15% 5.14% 5.56% 3.20%
Ratios/Supplemental Data:
Net Assets, End of Period (in 000's)........................ $238,551 $226,536 $206,075 $ 122,929
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor/2/............. 0.56% 0.59% 0.63% 0.64%
After reimbursement of expenses by Advisor/2/.............. 0.50% 0.50% 0.43%/3/ 0.40%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor/2/............. 5.00% 4.93% 5.24% 3.49%
After reimbursement of expenses by Advisor/2/.............. 5.06% 5.02% 5.44% 3.73%
</TABLE>
- ---------------------------------------------------------------------
/1/ Not Annualized.
/2/ Annualized.
/3/ The Advisor's expenses reimbursement level, which affects the net expenses
ratio, changed from 0.40% to 0.50% on July 12, 1995.
(a) Chicago Trust Money Market Fund commenced investment operations on
December 14, 1993.
See accompanying Notes to Financial Statements.
45
<PAGE>
CT&T Funds
Notes to Financial Statements October 31, 1997
================================================================================
Note (A) Significant Accounting Policies: CT&T Funds (the "Company") operates as
a series company currently issuing eight series of shares of beneficial
interest: Montag & Caldwell Growth Fund (the "Growth Fund"), Chicago Trust
Growth & Income Fund (the "Growth & Income Fund"), Chicago Trust Talon Fund (the
"Talon Fund"), Chicago Trust Balanced Fund (formerly Chicago Trust Asset
Allocation Fund) (the "CT Balanced Fund"), Montag & Caldwell Balanced Fund (the
"M&C Balanced Fund"), Chicago Trust Bond Fund (the "Bond Fund"), Chicago Trust
Municipal Bond Fund (the "Municipal Bond Fund"), and Chicago Trust Money Market
Fund (the "Money Market Fund") (each a "Fund" and collectively, the "Funds").
The Company constitutes an open-end management investment company which is
registered under the Investment Company Act of 1940 as amended (the "Act"). The
Company was organized as a Delaware business trust on September 10, 1993.
The Growth Fund seeks long-term capital appreciation consistent with investments
primarily in a combination of equity, convertible, fixed income, and short-term
securities. Capital appreciation is emphasized, and generation of income is
secondary. Montag & Caldwell, Inc. is the Investment Advisor for the Fund, which
commenced investment operations on November 2, 1994. Effective June 28, 1996,
the Fund offered two classes of shares: Class I (Institutional) shares and Class
N (Retail) shares.
The Growth & Income Fund seeks long-term total return through a combination of
capital appreciation and current income. In seeking to achieve its investment
objective, the Fund invests primarily in common stocks, preferred stocks,
securities convertible into common stocks, and fixed income securities. The
Chicago Trust Company ("Chicago Trust") is the Investment Advisor for the Fund,
which commenced investment operations on December 13, 1993.
The Talon Fund seeks long-term total return through capital appreciation. The
Fund invests primarily in stocks of companies with capitalization levels
believed by Talon Asset Management, Inc. ("Talon") to have prospects for capital
appreciation. The Fund, which commenced investment operations on September 19,
1994, may also invest in preferred stock and debt securities, including those
which may be convertible into common stock. Chicago Trust is the Investment
Advisor for the Fund with Talon as Sub-Investment Advisor.
The CT Balanced Fund seeks growth of capital with current income through asset
allocation. The Fund seeks to achieve this objective by holding a varying
combination of generally two or more of the following investment categories:
common stocks (both dividend and non-dividend paying); preferred stocks;
convertible preferred stocks; fixed income securities, including bonds and bonds
convertible into common stocks; and short-term interest-bearing obligations.
Chicago Trust is the Investment Advisor for the Fund, which commenced investment
operations on September 21, 1995 .
The M&C Balanced Fund seeks long-term total return through investment primarily
in a combination of equity, fixed income, and short-term securities. The
allocation between asset classes may vary over time in accordance with the
expected rates of return of each asset class; however, primary emphasis is
placed upon selection of particular investments as opposed to allocation of
assets. Montag & Caldwell, Inc. is the Investment Advisor for the Fund, which
commenced investment operations on November 2, 1994.
The Bond Fund seeks high current income consistent with what Chicago Trust
believes to be prudent risk of capital. The Fund primarily invests in a broad
range of bonds and other fixed income securities (bonds and debentures) with an
average weighted portfolio maturity between three and ten years. Chicago Trust
is the Investment Advisor for the Fund, which commenced investment operations on
December 13, 1993.
The Municipal Bond Fund seeks a high level of current interest income exempt
from Federal income taxes consistent with the conservation of capital. The Fund
seeks to achieve its objective by investing substantially all of its assets in a
diversified portfolio of primarily intermediate-term municipal debt obligations.
Chicago Trust is the Investment Advisor for the Fund, which commenced investment
operations on December 13, 1993.
The Money Market Fund seeks to provide as high a level of current interest
income as is consistent with maintaining liquidity and stability of principal.
The Fund seeks to achieve its objective by investing in short-term, high
quality, U.S. dollar-denominated money market instruments. Chicago Trust is the
Investment Advisor for the Fund, which commenced investment operations on
December 14, 1993.
46
<PAGE>
CT&T Funds
Notes to Financial Statements - continued October 31, 1997
================================================================================
The following is a summary of the significant accounting policies consistently
followed by each Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
(1) Security Valuation: For the Growth Fund, the Growth & Income Fund, the
Talon Fund, the CT Balanced Fund and the M&C Balanced Fund, equity securities
and index options traded on a national exchange and over-the-counter securities
listed in the NASDAQ National Market System are valued at the last reported
sales price at the close of the respective exchange. Securities for which there
have been no sales on the valuation date are valued at the mean of the last
reported bid and asked prices on their principal exchange. Over-the-counter
securities not listed on the NASDAQ National Market System are valued at the
mean of the current bid and asked prices. For the CT Balanced Fund, the M&C
Balanced Fund, the Bond Fund, and the Municipal Bond Fund, fixed income
securities, except short-term, are valued on the basis of prices provided by a
pricing service when such prices are believed by the Advisor to reflect the
fair market value of such securities. When fair market value quotations are not
readily available, securities and other assets are valued at fair value as
determined in good faith by the Board of Trustees. For all Funds, short-term
investments, that is, those with a remaining maturity of 60 days or less, are
valued at amortized cost, which approximates market value. For the Money Market
Fund, all securities are valued at amortized cost, which approximates market
value. Under the amortized cost method, discounts and premiums are accreted and
amortized ratably to maturity and are included in interest income.
(2) Repurchase Agreements: Each Fund may enter into repurchase agreements with
financial institutions deemed to be credit worthy by the Fund's Advisor,
subject to the seller's agreement to repurchase and the Fund's agreement to
resell such securities at a mutually agreed upon price. Securities purchased
subject to repurchase agreements are deposited with the Fund's custodian and,
pursuant to the terms of the repurchase agreement, must have an aggregate
market value greater than or equal to the repurchase price plus accrued
interest at all times. If the value of the underlying securities falls below
the value of the repurchase price plus accrued interest, the Fund will require
the seller to deposit additional collateral by the next business day. If the
request for additional collateral is not met, or the seller defaults on its
repurchase obligation, the Fund has the right to sell the underlying securities
at market value and may claim any resulting loss against the seller.
(3) Derivative Financial Instruments: A derivative financial instrument in very
general terms refers to a security whose value is "derived" from the value of
an underlying asset, reference rate or index. A Fund has a variety of reasons
to use derivative instruments, such as to attempt to protect the Fund against
possible changes in the market value of its portfolio and to manage the
portfolio's effective yield, maturity and duration. All of a Fund's portfolio
holdings, including derivative instruments, are marked to market each day with
the change in value reflected in the unrealized appreciation/depreciation on
investments. Upon disposition, a realized gain or loss is recognized
accordingly, except for exercised option contracts where the recognition of
gain or loss is postponed until the disposal of the security underlying the
option contract.
An option contract gives the buyer the right, but not the obligation to buy
(call) or sell (put) an underlying item at a fixed exercise price during a
specified period. These contracts are used by a Fund to manage the portfolio's
effective maturity and duration.
Transactions in purchased options for the Talon Fund for the year ended October
31, 1997 were as follows:
<TABLE>
<CAPTION>
Contracts Premium
--------- ---------
<S> <C> <C>
Outstanding at October 31, 1996.................................... 0 $ 0
Options purchased (Net)............................................ 215 (305,450)
Options exercised or terminated in closing transactions (Net)...... (65) 61,450
Options expired (Net).............................................. (100) 123,875
---- ---------
Outstanding at October 31, 1997.................................... 50 $(120,125)
==== =========
</TABLE>
(4) Mortgage Backed Securities: The CT Balanced Fund, the M&C Balanced Fund and
the Bond Fund may invest in Mortgage Backed Securities (MBS), representing
interests in pools of mortgage loans. These securities provide shareholders
with payments consisting of both principal and interest as the mortgages in the
underlying mortgage pools are paid. Most of the securities are guaranteed by
federally sponsored agencies - Government National Mortgage Association (GNMA),
Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage
Corporation (FHLMC). However, some securities may be issued by private,
47
<PAGE>
CT&T Funds
Notes to Financial Statements-continued October 31, 1997
================================================================================
non-government corporations. MBS issued by private agencies are not government
securities and are not directly guaranteed by any government agency. They are
secured by the underlying collateral of the private issuer. Yields on privately
issued MBS tend to be higher than those of government backed issues. However,
risk of loss due to default and sensitivity to interest rate fluctuations are
also higher.
The CT Balanced Fund, the M&C Balanced Fund and the Bond Fund may also invest in
Collateralized Mortgage Obligations (CMOs) and Real Estate Mortgage Investment
Conduits (REMICs). A CMO is a bond which is collateralized by a pool of MBS, and
a REMIC is similar in form to a CMO. These MBS pools are divided into classes or
tranches with each class having its own characteristics. The different classes
are retired in sequence as the underlying mortgages are repaid. A Planned
Amortization Class (PAC) is a specific class of mortgages which over its life
will generally have the most stable cash flows and the lowest prepayment risk.
Prepayment may shorten the stated maturity of the CMO and can result in a loss
of premium, if any has been paid.
The CT Balanced Fund and the Bond Fund may utilize Interest Only (IO) securities
to increase the diversification of the portfolio and manage risk. An Interest
Only security is a class of MBS representing ownership in the cash flows of the
interest payments made from a specified pool of MBS. The cash flow on this
instrument decreases as the mortgage principal balance is repaid by the
borrower.
(5) Investment Income And Securities Transactions: Dividend income is recorded
on the ex-dividend date. Interest income is accrued daily. Securities
transactions are accounted for on the date securities are purchased or sold. The
cost of securities sold is determined using the first-in-first-out method.
(6) Federal Income Taxes: The Funds have elected to be treated a "regulated
investment companies" under Sub-chapter M of the Internal Revenue Code and to
distribute substantially all of their respective net taxable income.
Accordingly, no provisions for federal income taxes have been made in the
accompanying financial statements. The Funds intend to utilize provisions of the
federal income tax laws which allow them to carry a realized capital loss
forward for eight years following the year of the loss and offset such losses
against any future realized capital gains. At October 31, 1997, the losses
amounted to $91,110 for the Municipal Bond Fund and $25,289 for the Bond Fund,
which will expire October 31, 2003 and October 31, 2005, respectively.
Net realized gains or losses may differ for financial and tax reporting purposes
for the Talon Fund, the M&C Balanced Fund and the Growth Fund primarily as a
result of losses from wash sales which are not recognized for tax purposes until
the corresponding shares are sold and as a result of gains or losses recognized
for tax purposes on the mark-to-market of open options transactions at October
31, 1997.
(7) Dividends and Distributions: Dividends and distributions to shareowners are
recorded on the ex-dividend date.
(8) Organization Costs: The Funds have reimbursed the Advisors for certain costs
incurred in connection with the Funds' and the Company's organization. The costs
are being amortized on a straight-line basis over five years commencing on
December 13, 1993 for the Growth & Income Fund, Bond Fund and the Municipal Bond
Fund; December 14, 1993 for the Money Market Fund; September 19, 1994 for the
Talon Fund; November 2, 1994 for the Growth Fund and the M&C Balanced Fund; and
September 21, 1995 for the CT Balanced Fund.
(9) Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Note (B) Dividends from Net Investment Income and Distributions of Capital
Gains: With respect to the Growth Fund, the Growth & Income Fund, the Talon
Fund, the CT Balanced Fund and the M&C Balanced Fund, dividends from net
investment income are distributed quarterly and net realized gains from
investment transactions, if any, are distributed to shareowners annually. The
Bond Fund and the Municipal Bond Fund distribute their respective net investment
income to shareowners monthly and capital gains, if any, are distributed
annually. The Money Market Fund declares dividends daily from its net investment
income. The Money Market
48
<PAGE>
CT&T Funds
Notes to Financial Statements-continued October 31, 1997
================================================================================
Fund's dividends are payable monthly and are automatically reinvested in
additional Fund shares, at the month-end net asset value, for those shareowners
that have elected the reinvestment option. Differences in dividends per share
between classes of the Growth Fund are due to different class expenses. For the
year ended October 31, 1997, 100.00% of the income distributions made by the
Municipal Bond Fund were exempt from federal income taxes. Additionally during
the period, the Growth Fund, the Growth & Income Fund, the Talon Fund, the CT
Balanced Fund, the M&C Balanced Fund and the Bond Fund paid 28% rate gain
distributions of $1,879,416, $1,444,866, $973,259, $205, $2,336,074 and $16,748,
respectively. In January 1998, the Funds will provide tax information to
shareowners for the 1997 calendar year.
Net investment income and realized gains and losses for federal income tax
purposes may differ from that reported on the financial statements because of
permanent book and tax basis differences. Permanent book and tax differences of
$21,494, $11,440 and $551 were reclassified at October 31, 1997 from accumulated
net realized gain on investments to undistributed net investment income in the
CT Balanced Fund, the Bond Fund and the M&C Balanced Fund, respectively, due to
losses on paydown adjustments from mortgage backed securities. In addition,
permanent book and tax basis differences in the Bond Fund relating to the sale
of interest only securities totaling $5,211 were reclassified from accumulated
net realized gain to undistributed net investment income.
The Growth Fund had a net operating loss for tax purposes, net of short-term
capital gains, of $187,503 for the year ended October 31, 1997. In addition, the
Growth Fund made required distributions of class specific allocations of net
investment income of $26,630 to the institutional class shareowners. These
amounts, along with the distribution in excess as of October 31, 1996 of
$73,703, were reclassified from undistributed net investment income to capital
paid-in as permanent differences at October 31, 1997.
Distributions from net realized gains for book purposes may include short-term
capital gains, which are included as ordinary income for tax purposes.
All of the income dividends paid by each fund were ordinary income for federal
income tax purposes. The percentage of income dividends that were qualifying
dividends for the corporate dividends received deduction were 21%, 70%, 8% and
17%, for the CT Balanced Fund, the Growth & Income Fund, the Talon Fund and the
M&C Balanced Fund, respectively.
Note (C) Shares of Beneficial Interest: Each Fund is authorized to issue an
unlimited number of shares of beneficial interest with no par value. At October
31, 1997, Chicago Trust owned 2,500, 2,500 and 1,002,500 shares of the Growth &
Income Fund, the Bond Fund and the Municipal Bond Fund, respectively.
Note (D) Investment Transactions: Aggregate purchases and proceeds from sales of
investment securities (other than short-term investments) for the year ended
October 31, 1997 were:
<TABLE>
<CAPTION>
Aggregate Proceeds from
Purchases Sales
--------- -------------
<S> <C> <C>
Growth Fund $483,482,033 $84,626,624
Growth & Income Fund 84,712,809 69,309,780
Talon Fund 24,428,453 20,975,822
Ct Balanced Fund 61,644,515 55,976,823
M&C Balanced Fund 61,424,202 14,486,433
Bond Fund 60,725,202 16,480,883
Municipal Bond Fund 2,979,200 1,817,090
</TABLE>
49
<PAGE>
CT&T Funds
Notes to Financial Statements-continued October 31, 1997
================================================================================
Note (E) Advisory, Administration and Distribution Services Agreements: Under
various Advisory Agreements with the Funds, each Advisor provides investment
advisory services to the Funds. The Funds will pay advisory fees at the
following annual percentage rates of the average daily net assets of each Fund:
0.80% for the Growth Fund, 0.70% for the Growth & Income Fund, 0.80% for the
Talon Fund, 0.70% for the CT Balanced Fund, 0.75% for the M&C Balanced Fund,
0.55% for the Bond Fund, 0.60% for the Municipal Bond Fund and 0.40% for the
Money Market Fund. These fees are accrued daily and paid monthly. The Advisors
have voluntarily undertaken to reimburse the Growth Fund (Institutional Class
and Retail Class), the Growth & Income Fund, the Talon Fund, the CT Balanced
Fund, the M&C Balanced Fund, the Bond Fund, the Municipal Bond Fund, and the
Money Market Fund for operating expenses which cause total expenses to exceed
0.98%, 1.30%, 1.10%, 1.30%, 1.10%, 1.25%, 0.80%, 0.90% and 0.50%, respectively.
Such expense reimbursements may be terminated at the discretion of the Advisors.
For the year ended October 31, 1997, the Advisors reimbursed expenses of $0 and
$41,428 for the Growth Fund (Institutional Class and Retail Class), $129,857 for
the Growth & Income Fund, $85,596 for the Talon Fund, $102,203 for the CT
Balanced Fund, $44,973 for the M&C Balanced Fund, $221,539 for the Bond Fund,
$85,359 for the Municipal Bond Fund and $142,332 for the Money Market Fund.
Effective June 1, 1997, First Data Investor Services Group, Inc. ("Investor
Services Group") replaced FPS Services, Inc. as sub-administrator of the Funds.
Chicago Trust is the Funds' Administrator. For services provided as the Funds'
Administrator, Chicago Trust receives the following fees, which are paid in
total to Investor Services Group.
<TABLE>
<CAPTION>
Administration Fees Custody Liaison Fees
------------------- --------------------
Fee (% of Funds' aggregate Average Daily Net Assets Annual Fee Average Daily Net Assets
- --------------------------- ------------------------ ---------- ------------------------
daily net assets) (Per Fund) (per Fund)
----------------- ---------- ----------
<S> <C> <C> <C>
0.060 up to $2 billion $10,000 up to $100 million
0.045 $2 billion to $3.5 billion $15,000 $100 million to $500 million
0.040 over $3.5 billion $20,000 over $500 million
</TABLE>
Effective June 1, 1997, First Data Distributors, Inc. replaced FPS Broker
Services, Inc. as principal underwriter and distributor of the Funds' shares.
Pursuant to Rule 12b-1 adopted by the Securities and Exchange Commission under
the Act, the Growth Fund Retail Class, the Growth & Income Fund, the Talon Fund,
the CT Balanced Fund, the M&C Balanced Fund, the Bond Fund, and the Municipal
Bond Fund have adopted a Plan of Distribution (the "Plan"). The Plan permits the
participating Funds to pay certain expenses associated with the distribution of
their shares. Under the Plan, each Fund may pay actual expenses not exceeding,
on an annual basis, 0.25% of each participating Fund's average daily net assets.
The Growth Fund Institutional Class and the Money Market Fund do not have a
distribution plan.
For the year ended October 31, 1997, the class specific expenses of the Growth
Fund were:
<TABLE>
<CAPTION>
Class N (Retail) Class I (Institutional)
<S> <C> <C>
Transfer agent fees..................... $ 158,588 $ 8,978
Registration expenses................... 151,157 58,524
Legal fees.............................. 21,778 8,983
Report to shareowner expense............ 19,597 14,159
</TABLE>
Certain officers and trustees of the Funds are also officers and directors of
Chicago Trust. The Funds do not compensate its officers or affiliated trustees.
Effective January 1, 1997, the Company pays each unaffiliated trustee $1,500 per
Board of Trustees meeting attended and an annual retainer of $1,500.
50
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareowners of CT&T Funds:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of CT&T Funds (comprising, respectively, Montag &
Caldwell Growth Fund, Chicago Trust Growth & Income Fund, Chicago Trust Talon
Fund, Chicago Trust Balanced Fund, Montag & Caldwell Balanced Fund, Chicago
Trust Bond Fund, Chicago Trust Municipal Bond Fund, and Chicago Trust Money
Market Fund) as of October 31, 1997, and the related statements of operations
for the year then ended, the statements of changes in net assets for each of the
periods presented in the two-year period then ended, and the financial
highlights for each of the periods presented. These financial statements and
financial highlights are the responsibility of CT&T Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds constituting the CT&T Funds as of October 31, 1997, the
results of their operations for the year then ended, the changes in their net
assets for each of the periods presented in the two-year period then ended, and
the financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
Chicago, Illinois
December 16, 1997
<PAGE>
This page left blank intentionally
<PAGE>
CT&T Funds
Trustees & Officers
- --------------------------------------------------------------------------------
TRUSTEES OFFICERS
Leonard F. Amari, Trustee* Kenneth C. Anderson
President
Stuart D. Bilton, Chairman David F. Seng
Senior Vice President
Dorothea C. Gilliam, Trustee Gerald F. Dillenburg
Vice President, Secretary and Treasurer
Gregory T. Mutz, Trustee* Thomas J. Adams, III
Vice President
Nathan Shapiro, Trustee* CUSTODIAN
Bankers Trust
One Bankers Trust Place
New York, New York 10001
ADVISORS
The Chicago Trust Company LEGAL COUNSEL
171 North Clark Street Sonnenschein Nath & Rosenthal
Chicago, Illinois 60601-3294 8000 Sears Tower
Chicago, Illinois 60606
Montag & Caldwell, Inc.
1100 Atlanta Financial Center AUDITOR
3343 Peachtree Road, NE KPMG Peat Marwick LLP
Atlanta, GA 30326-1450 303 East Wacker Drive
Chicago, Illinois 60601
SHAREOWNER SERVICES
First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, MA 01581
DISTRIBUTOR
First Data Distributors, Inc.
4400 Computer Drive
Westborough, MA 01581
*Unaffiliated Trustees
<PAGE>
Distributed by First Data Distributors, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
This report is submitted for general information of the shareowners of the
Funds. It is not authorized for distribution to prospective investors in the
Funds unless preceded or accompanied by an effective Prospectus which includes
details regarding the Fund's objectives, policies, expenses and other
information.
Semi-Annual Period Ended
April 30, 1998
SEMI-ANNUAL REPORT TO SHAREOWNERS
APRIL 30, 1998
SEMI-
ANNUAL
REPORT
MONTAG & CALDWELL GROWTH FUND
CHICAGO TRUST GROWTH & INCOME FUND
CHICAGO TRUST TALON FUND
CHICAGO TRUST BALANCED FUND
MONTAG & CALDWELL BALANCED FUND
CHICAGO TRUST BOND FUND
CHICAGO TRUST MUNICIPAL BOND FUND
CHICAGO TRUST MONEY MARKET FUND
[LOGO] ALLEGHANY FUNDS
<PAGE>
MANAGING YOUR MONEY
THROUGH PRINCIPLES THAT ENDURE
CORPORATE PROFITS? MERGERS AND ACQUISITIONS? POLITICS? ATTRACTIVE
VALUATIONS? THERE ARE NUMEROUS GOOD REASONS FOR CHOOSING VARIOUS INVESTMENT
OPPORTUNITIES - AND AT ALLEGHANY FUNDS, OUR PORTFOLIO MANAGERS FOLLOW BOTH THE
FUNDS' STATED OBJECTIVES AND THEIR INDIVIDUAL CULTIVATED PREFERENCES. YET AS A
GROUP, WE BELIEVE OUR MANAGERS ARE OF LIKE MINDS WHEN IT COMES TO FOLLOWING
TIME-HONORED INVESTMENT PRINCIPLES. SIMPLY PUT, THEY MAKE THEIR SELECTIONS BASED
ON SUBSTANCE, NOT FADS.
TO ILLUSTRATE THIS, WE RECENTLY POLLED OUR PORTFOLIO MANAGERS TO FIND OUT
WHAT THEY WILL LOOK FOR (IN ADDITION TO THE CUSTOMARY QUALITATIVE AND
QUANTITATIVE ANALYSIS) FOR THEIR PORTFOLIO SELECTIONS DURING THE SECOND HALF OF
1998. AS WE EXPECTED, THEY WERE IN CLOSE AGREEMENT THAT THE FOLLOWING FIVE
TRAITS ARE MOST IMPORTANT:
1. PRICE (NOT TO MENTION PRICE, PRICE, PRICE AND PRICE) REMAINS A KEY FACTOR.
2. EXPECTED RETURNS ARE CRUCIAL SHOULD INTEREST RATES CHANGE.
3. GOOD DIVERSIFICATION IS MORE IMPORTANT THAN EVER IN AN INCREASINGLY
VOLATILE MARKET.
4. THE ABILITY TO ACHIEVE CONSISTENT EARNINGS GROWTH SHOULD BE EMPHASIZED.
5. IT'S WISE TO INCLUDE SECURITIES THAT REDUCE THE VOLATILITY OF THE PORTFOLIO
ITSELF.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
1 Letter from the Chairman
2 Summary Information
Schedule of Investments:
4 Montag & Caldwell Growth Fund
5 Chicago Trust Growth & Income Fund
6 Chicago Trust Talon Fund
7 Chicago Trust Balanced Fund
11 Montag & Caldwell Balanced Fund
14 Chicago Trust Bond Fund
17 Chicago Trust Municipal Bond Fund
20 Chicago Trust Money Market Fund
22 Statement of Assets and Liabilities
24 Statement of Operations
26 Statement of Changes in Net Assets
30 Financial Highlights
39 Notes to Financial Statements
[LOGO] ALLEGHANY FUNDS
<PAGE>
GUIDE TO SHAREHOLDER BENEFITS
We're delighted to offer all Alleghany Funds shareowners a full assortment of
special features and convenient options. To receive more information about any
of these benefits, simply call an Investor Services Representative Monday -
Friday, 9 am - 7 pm E.S.T.
THE EASY WAY TO GROW YOUR ACCOUNT:
START AN AUTOMATIC INVESTMENT PLAN(1)
Systematic investing is an easy, effortless way to help reach any
investment goal. Simply choose a fixed amount, and we'll automatically deduct
it from your checking or savings account on a regular schedule - every month,
for example - and invest it in your Alleghany Funds account. The service is
free, and the minimum initial investment is $50.
COMPOUND YOUR EARNINGS WITH
AUTOMATIC DIVIDEND REINVESTMENT
By automatically reinvesting your dividends into your Alleghany Funds
account, your profits can mount. Monthly and quarterly dividends, and annual
capital gain distributions, are reinvested at no charge.
FREE, FLEXIBLE EXCHANGE PRIVILEGES
As your personal needs change, so can your Alleghany Funds investment.
Transfers between our funds are free of charge, and it only takes a telephone
call.
LOW MINIMUM INITIAL INVESTMENTS
The minimum initial investment for all Alleghany Funds is just $2,500 ($500
for IRAs). And subsequent investments can be as low as $50.
FREE CHECK WRITING SERVICES AVAILABLE
If you are an investor of the Chicago Trust Money Market Fund, you can take
advantage of free check writing privileges. The minimum amount for each check is
$500.
CONVENIENT INVESTOR WEBSITE:
www.alleghanyfunds.chicago-trust.com
Now you can access account balances, obtain fund information and make
transactions online - 24 hours a day, in complete security. And we're among the
just 10% of mutual fund companies who provide these capabilities.
FUND PERFORMANCE INFORMATION
IS AVAILABLE 24 HOURS A DAY
1-800-992-8151
(1) Periodic investment plans involve continuous investments in securities
regardless of price. You should consider your financial ability to continue to
purchase shares during periods of high and low prices.
<PAGE>
Dear Shareowner,
Our portfolio managers' perspectives on securities markets are not always
uniform. However, there is one constant -- they stick to their investment
disciplines. While it is difficult to sustain consistent long-term investment
performance, it may only occur if we continue to do those things that have
brought us success over the life of our funds.
We view these semi-annual reports as an opportunity to provide you with our
report card. I am therefore pleased to inform you that your funds are growing.
On May Day (May 1, 1998), one day after the end of our semi-annual reporting
period, our assets under management topped $2.5 billion! Not bad for a group
that had less than $700 million under management on December 31, 1995. We are
not foolish enough to ignore the fact that a lot of this growth has come from a
raging bull market in equities, but a significant amount has come from new
shareowners entrusting us with their assets. We welcome new shareowners to our
fund family, and we will do all that we can to help all of you reach your
financial goals.
Our investment performance continues to be strong, with most of our funds
showing very good results for the three years ended April 30, 1998. As managers,
we like to take stock of our record on a rolling three-year basis. We believe
that one year is too short a period to reach any valid conclusion about
investment capability, but after three years, some reasonable judgments can be
made.
<TABLE>
<CAPTION>
M&C CT GROWTH M&C CT MONEY
GROWTH & INCOME CT TALON BALANCED CT BOND MARKET
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Return For 3 Years
Ended 4/30/98* 151.76% 127.38% 98.03% 93.94% 28.18% 16.60%
Rank Among Similar 19 out of 536 33 out of 430 69 out of 160 6 out of 248 45 out of 159 45 out of 251
Funds (Lipper) For Growth Funds Growth & Mid Cap Balanced Interm. Inv. Money Market
3 Years Ended 4/30/98* Income Funds Funds Funds Grade Bond Funds
Funds
Total Return For 1 Year
Ended 4/30/98 43.88% 39.86% 25.89% 30.54% 10.35% 5.29%
Rank Among Similar 224 out of 860 164 out of 647 269 out of 275 47 out of 360 67 out of 210 55 out of 305
Funds (Lipper) For Growth Funds Growth & Mid Cap Balanced Interm. Inv. Money Market
1 Year Ended 4/30/98* Income Funds Funds Funds Grade Bond Funds
Funds
Average Annual Total
Return Since (Inception) 33.88% 23.90% 23.32% 23.65% 6.57% 4.96%
as of 4/30/98 (11/2/94) (12/13/93) (9/19/94) (11/2/94) (12/13/93) (12/14/93)
</TABLE>
We are proud of this record and hope you too are pleased with your investments.
Thank you for your confidence in the Alleghany Funds. Please visit our website
at www.alleghanyfunds.chicago-trust.com
Sincerely,
Stuart D. Bilton
Chairman and Chief Executive Officer
- --------------------------
The performance data quoted represents past performance and is no guarantee of
future performance.
* Lipper Analytical Services, Inc. (Lipper) is the source of the rankings, which
are based on total return fund performance for the one year ended April 30,
1998, and three years ended April 30, 1998, for funds of similar investment
objectives. The Lipper rankings listed include all classes of multiple-class
funds. Certain expenses for all of the ranked Alleghany Funds were subsidized
(by the Chicago Trust Company and Montag & Caldwell, Inc.) during the ranking
period for the one year ended April 30, 1998, and three years ended April 30,
1998.
The Alleghany Funds are no-load mutual funds distributed by First Data
Distributors, Inc., Westborough, MA 01581. This is not an offer to sell or a
solicitation of an offer to buy shares of any of the Funds described. Investment
return and principal value of an investment will fluctuate so that an Investor's
shares, when redeemed, may be worth more or less than their original cost. This
information must be accompanied or preceded by a prospectus.
1
<PAGE>
ALLEGHANY FUNDS -- SUMMARY INFORMATION
PERFORMANCE FOR THE SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONTAG & CALDWELL GROWTH FUND
CLASS N (RETAIL) CLASS I (INSTITUTIONAL) CHICAGO TRUST GROWTH & INCOME FUND
<S> <C> <C>
--------------------------------------------- --------------------------------------------
Total Returns:
6 Months 20.79% 20.99% 22.76%
1 Year 43.88% 44.36% 39.86%
Three Year
Average Annual N/A N/A 31.50%
Average Annual
Since Inception 33.88% 37.03% 23.90%
Value of $10,000 $27,690 $17,814 $25,536
from Inception
Date 11/2/94 6/28/96 12/13/93
--------------------------------------------- --------------------------------------------
TOP TEN HOLDINGS as of April 30, 1998
--------------------------------------------- --------------------------------------------
Company and Eli Lilly & Co. 4.70% Illinois Tool Works, Inc. 4.02%
% of Total Net Coca-Cola Co. 4.65% EMC Corp. 3.64%
Assets Gillette Co. 4.53% General Electric Co. 3.62%
Procter & Gamble Co. 4.52% Sysco Corp. 3.55%
Bristol-Myers Squibb Co. 4.51% Pfizer, Inc. 3.52%
Johnson & Johnson 4.45% Tellabs, Inc. 3.38%
Schlumberger, Ltd. 4.20% Health Management Associates, Inc. 3.28%
McDonald's Corp. 4.09% AlliedSignal, Inc. 3.26%
Walt Disney Co. 4.06% Paychex, Inc. 3.16%
Boston Scientific Corp. 3.72% American International Group, Inc. 3.12%
--------------------------------------------- --------------------------------------------
CHICAGO TRUST TALON FUND CHICAGO TRUST BALANCED FUND
--------------------------------------------- --------------------------------------------
Total Returns:
6 Months 3.58% 14.99%
1 Year 25.89% 28.63%
Three Year
Average Annual 25.58% N/A
Average Annual
Since Inception 23.32% 20.78%
Value of $10,000 $21,320 $16,362
from Inception
Date 9/19/94 9/21/95
--------------------------------------------- ---------------------------------------------
TOP TEN HOLDINGS as of April 30, 1998
--------------------------------------------- ---------------------------------------------
Company and Cerner Corp. 6.04% Paychex, Inc. 2.27%
% of Total Net Columbia HCA Healthcare Corp. 5.92% General Electric Co. 2.18%
Assets Mylan Laboratories, Inc. 5.31% American International Group, Inc. 2.14%
U.S. Treasury Bill, 4.680%, 05/14/98 4.89% Tellabs, Inc. 2.14%
Vitalink Pharmacy Services, Inc. 4.74% Illinois Tool Works, Inc. 2.13%
R.R. Donnelley & Sons Co. 4.60% Pfizer, Inc. 2.12%
Capital Trust, Class A 4.59% Microsoft Corp. 2.10%
Starbucks Corp. 4.40% Health Management Associates, Inc.,
Danielson Holdings Corp. 4.05% Class A 2.05%
St. Paul Bancorp, Inc. 3.93% Cisco Systems, Inc. 2.04%
Norwest Corp. 2.03%
--------------------------------------------- ---------------------------------------------
</TABLE>
2
<PAGE>
ALLEGHANY FUNDS -- SUMMARY INFORMATION
PERFORMANCE FOR THE SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONTAG & CALDWELL BALANCED FUND CHICAGO TRUST BOND FUND
------------------------------------------- ---------------------------------------------
<S> <C> <C>
Total Returns:
6 Months 13.34% 3.23%
1 Year 30.54% 10.35%
Three Year
Average Annual 24.71% 8.63%
Average Annual
Since Inception 23.65% 6.57%
Value of $10,000 $20,979 $13,211
from Inception
Date 11/2/94 12/13/93
--------------------------------------------- -----------------------------------------------
TOP TEN HOLDINGS as of April 30, 1998
--------------------------------------------- -----------------------------------------------
Company and Eli Lilly & Co. 2.99% U.S. Treasury Note, 6.370%, 08/15/02 3.26%
% of Total Net Gillette Co. 2.85% Merrill Lynch & Co., Inc., 7.000%,
Assets Coca-Cola Co. 2.82% 04/27/08 2.59%
Bristol-Myers Squibb Co. 2.77% U.S. Treasury Note, 7.250%, 05/15/04 2.28%
Walt Disney Co. 2.76% U.S. Treasury Note, 6.250%, 10/31/01 2.16%
Procter & Gamble Co. 2.74% Metropolitan Life
Johnson & Johnson 2.71% Insurance Co. 6.300%, 11/01/03 2.11%
McDonald's Corp. 2.66% Countrywide Home
U.S. Treasury Note, 6.500%, 10/15/06 2.63% Loans, CMO 6.750%, 04/25/28 2.06%
U.S. Treasury Note, 6.250%, 02/15/07 2.59% U.S. Treasury Bond, 7.125%, 02/15/23 2.01%
Chilgener S.A. Yankee
(Chile), 6.500%, 01/15/06 2.00%
U.S. Treasury Note, 7.875%, 08/15/01 1.88%
HSBC America Capital II, 8.380%,
05/15/27 1.85%
--------------------------------------------- ------------------------------------------------
CHICAGO TRUST MUNICIPAL BOND FUND
Total Returns:
---------------------------------------------------------------------------------------------------
6 Months 1.70%
1 Year 5.98%
Three Year
Average Annual 5.12%
Average Annual
Since Inception 4.00%
Value of $10,000 $11,871
from Inception
Date 12/13/93
---------------------------------------------------------------------------------------------------
TOP TEN HOLDINGS as of April 30, 1998
---------------------------------------------------------------------------------------------------
Company and King County, Washington, Series A, Arlington Independent School District,
% of Total Net G.O., 5.800%, 01/01/04 3.94% Texas, Refunding, G.O., 5.400%,02/15/99 2.95%
Assets Salt River Project Electric System Revenue, Mohave County, AZ, IDA, 6.000%, 07/01/00 2.83%
AZ, Refunding, Series A, 5.500%, 01/01/05 3.69% State of New Jersey Transportation Trust
Texas State Water Development Board, G.O. Fund Revenue, 5.200%, 12/15/00 2.80%
Escrowed to Maturity, 5.000%, 08/01/99 3.55% Tulsa, Oklahoma Metropolitan Utility
Commonwealth of Puerto Rico, Series A, G.O. Authority Revenue, 5.500%, 07/01/00 2.80%
6.500%, 07/01/03 3.42% Tooele County, Utah, Hazardous Waste
Clark County, Nevada School District, G.O. Treatment Revenue, 5.700%, 11/01/26 2.71%
6.400%, 06/15/06 3.00%
---------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
ALLEGHANY FUNDS
MONTAG & CALDWELL GROWTH FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ -----
<C> <S> <C>
COMMON STOCKS - 96.96%
BUSINESS SERVICES - 1.78%
550,000 Manpower, Inc. . . . . . . . . . . . . . . . . . $ 24,234,375
----------------
CONSUMER NON-DURABLES - 14.85%
535,000 Gillette Co. . . . . . . . . . . . . . . . . . . 61,759,062
530,000 Interpublic Group Of Companies, Inc. . . . . . . 33,853,750
1,175,000 Mattel, Inc. . . . . . . . . . . . . . . . . . . 45,017,187
750,000 Procter & Gamble Co. . . . . . . . . . . . . . . 61,640,625
----------------
202,270,624
----------------
ELECTRICAL - 2.97%
475,000 General Electric Co. . . . . . . . . . . . . . . 40,434,375
----------------
ENERGY - 6.13%
650,000 Baker Hughes, Inc. . . . . . . . . . . . . . . . 26,325,000
690,000 Schlumberger, Ltd. . . . . . . . . . . . . . . . 57,183,750
----------------
83,508,750
----------------
ENTERTAINMENT AND LEISURE - 4.06%
445,000 Walt Disney Co. . . . . . . . . . . . . . . . . 55,319,063
----------------
FINANCE - 6.41%
430,000 American Express Co. . . . . . . . . . . . . . . 43,860,000
330,000 American International Group, Inc. . . . . . . . 43,415,625
----------------
87,275,625
----------------
FOOD AND BEVERAGE - 4.77%
835,000 Coca-Cola Co.. . . . . . . . . . . . . . . . . . 63,355,625
43,000 Pioneer Hi-Bred International, Inc. . . . . . . 1,623,250
----------------
64,978,875
----------------
HEALTH CARE SERVICES - 7.80%
850,000 Johnson & Johnson. . . . . . . . . . . . . . . . 60,668,750
401,000 Pfizer, Inc. . . . . . . . . . . . . . . . . . . 45,638,813
----------------
106,307,563
----------------
LODGING - 2.32%
540,000 Marriott International, Inc. . . . . . . . . . . 17,820,000
432,400 Marriott International, Inc., Class A. . . . . . 13,836,800
----------------
31,656,800
----------------
MEDICAL SUPPLIES - 3.38%
875,000 Medtronic, Inc. . . . . . . . . . . . . . . . . 46,046,875
----------------
PHARMACEUTICALS - 12.21%
580,000 Bristol-Myers Squibb Co. . . . . . . . . . . . . 61,407,500
920,000 Eli Lilly & Co. . . . . . . . . . . . . . . . . 63,997,500
340,000 Merck & Co., Inc. . . . . . . . . . . . . . . . 40,970,000
----------------
166,375,000
----------------
<CAPTION>
Market
Shares Value
- ------ -----
<C> <S> <C>
RESTAURANTS - 5.62%
400,000 Cracker Barrell Old Country Store, Inc. . . . . $ 14,700,000
1,000,000 McDonald's Corp. . . . . . . . . . . . . . . . . 61,875,000
----------------
76,575,000
----------------
RETAIL - 6.44%
825,000 Gap, Inc. . . . . . . . . . . . . . . . . . . . 42,435,938
650,000 Home Depot, Inc. . . . . . . . . . . . . . . . . 45,256,250
----------------
87,692,188
----------------
TECHNOLOGY - 15.29%
700,000 Boston Scientific Corp.* . . . . . . . . . . . . 50,618,750
590,000 Cisco Systems, Inc.* . . . . . . . . . . . . . . 43,217,500
550,000 Electronic Arts, Inc.* . . . . . . . . . . . . . 25,437,500
70,000 Hewlett-Packard Co. . . . . . . . . . . . . . . 5,271,875
159,100 Intel Corp.. . . . . . . . . . . . . . . . . . . 12,857,269
442,600 Microsoft Corp.* . . . . . . . . . . . . . . . . 39,889,325
700,000 Solectron Corp.* . . . . . . . . . . . . . . . . 31,018,750
----------------
208,310,969
----------------
TELECOMMUNICATIONS - 2.93%
775,500 Ericsson (LM) Telefonaktiebolaget, ADR
Class B, Series 10 . . . . . . . . . . . . . . . 39,889,781
----------------
TOTAL COMMON STOCKS. . . . . . . . . . . . . . . 1,320,875,863
(Cost $996,809,509) ----------------
INVESTMENT COMPANIES - 4.24%
49,121,510 Bankers Trust Institutional
Cash Management Fund . . . . . . . . . . . . . . 49,121,510
8,603,387 Bankers Trust Institutional
Treasury Money Fund. . . . . . . . . . . . . . . 8,603,387
----------------
TOTAL INVESTMENT COMPANIES . . . . . . . . . . . 57,724,897
(Cost $57,724,897) ----------------
TOTAL INVESTMENTS - 101.20%. . . . . . . . . . . . . . . . . . 1,378,600,760
(Cost $1,054,534,406)** ----------------
LIABILITIES NET OF CASH AND OTHER ASSETS - (1.20%) . . . . . . (16,332,286)
----------------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . . . . . . . $ 1,362,268,474
----------------
----------------
</TABLE>
- --------------------
<TABLE>
<CAPTION>
<S><C>
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $1,054,534,406.
Gross unrealized appreciation $ 327,662,730
Gross unrealized (depreciation) (3,596,376)
--------------
Net unrealized appreciation $ 324,066,354
--------------
--------------
ADR American Depositary Receipt
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST GROWTH & INCOME FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ -----
<C> <S> <C>
COMMON STOCKS - 97.58%
BUSINESS SERVICES - 3.16%
206,000 Paychex, Inc. . . . . . . . . . . . . . . . . . $ 11,188,375
----------------
CAPITAL GOODS - 6.16%
264,000 AlliedSignal, Inc. . . . . . . . . . . . . . . . 11,566,500
214,000 Pitney Bowes, Inc. . . . . . . . . . . . . . . . 10,272,000
----------------
21,838,500
----------------
CHEMICALS - 2.39%
168,000 Praxair, Inc. . . . . . . . . . . . . . . . . . 8,452,500
----------------
CONSUMER DURABLES - 6.82%
202,000 Illinois Tool Works, Inc. . . . . . . . . . . . 14,241,000
167,000 Johnson Controls, Inc. . . . . . . . . . . . . . 9,915,625
----------------
24,156,625
----------------
CONSUMER NON-DURABLES - 11.67%
200,200 Cintas Corp. . . . . . . . . . . . . . . . . . . 9,534,525
124,250 Lancaster Colony Corp. . . . . . . . . . . . . . 4,799,156
265,000 Mattel, Inc. . . . . . . . . . . . . . . . . . . 10,152,813
170,100 Newell Co. . . . . . . . . . . . . . . . . . . . 8,217,956
105,000 Procter & Gamble Co. . . . . . . . . . . . . . . 8,629,687
----------------
41,334,137
----------------
ELECTRICAL - 3.62%
150,800 General Electric Co. . . . . . . . . . . . . . . 12,836,850
----------------
ENERGY - 1.59%
96,000 Smith International, Inc.* . . . . . . . . . . . 5,640,000
----------------
FINANCE - 18.30%
100,000 AFLAC, Inc. . . . . . . . . . . . . . . . . . . 6,500,000
83,975 American International Group, Inc. . . . . . . . 11,047,961
133,000 Associates First Capital Corp., Class A . . . . 9,941,750
216,600 Federal Home Loan Mortgage Corp. . . . . . . . . 10,031,287
108,000 First Data Corp. . . . . . . . . . . . . . . . . 3,658,500
205,287 MBNA Corp. . . . . . . . . . . . . . . . . . . . 6,954,097
221,200 Norwest Corp. . . . . . . . . . . . . . . . . . 8,778,875
226,000 Schwab (Charles) Corp. . . . . . . . . . . . . . 7,910,000
----------------
64,822,470
----------------
FOOD AND BEVERAGE - 4.81%
163,500 Richfood Holdings, Inc., Class A . . . . . . . . 4,486,031
528,000 Sysco Corp. . . . . . . . . . . . . . . . . . . 12,573,000
----------------
17,059,031
----------------
HEALTH CARE SERVICES - 12.45%
114,000 Cardinal Health, Inc. . . . . . . . . . . . . . 10,972,500
369,375 Health Management
Associates, Inc., Class A* . . . . . . . . . . . 11,635,313
<CAPTION>
Market
Shares Value
- ------ -----
<C> <S> <C>
HEALTH CARE SERVICES (CONTINUED)
264,000 Omnicare, Inc. . . . . . . . . . . . . . . . . . $ 9,042,000
109,600 Pfizer, Inc. . . . . . . . . . . . . . . . . . . 12,473,850
----------------
44,123,663
----------------
PHARMACEUTICALS - 2.74%
80,700 Merck & Co., Inc. . . . . . . . . . . . . . . . 9,724,350
----------------
RETAIL - 3.77%
102,000 Kohl's Corp.* . . . . . . . . . . . . . . . . . 4,213,875
265,000 Walgreen Co. . . . . . . . . . . . . . . . . . . 9,142,500
----------------
13,356,375
----------------
TECHNOLOGY - 16.72%
139,600 Cisco Systems, Inc.* . . . . . . . . . . . . . . 10,225,700
135,000 Computer Associates International, Inc. . . . . 7,905,938
127,200 Computer Sciences Corp.* . . . . . . . . . . . . 6,709,800
279,300 EMC Corp.* . . . . . . . . . . . . . . . . . . . 12,882,713
177,000 HBO & Co.. . . . . . . . . . . . . . . . . . . . 10,586,812
64,800 Microsoft Corp.* . . . . . . . . . . . . . . . . 5,840,100
124,000 Sun Microsystems, Inc.* . . . . . . . . . . . . 5,107,250
----------------
59,258,313
----------------
TELECOMMUNICATIONS - 3.38%
169,000 Tellabs, Inc.* . . . . . . . . . . . . . . . . . 11,977,875
----------------
TOTAL COMMON STOCKS. . . . . . . . . . . . . . . 345,769,064
(Cost $229,357,104) ----------------
Par Value
- ---------
REPURCHASE AGREEMENT - 2.49%
$ 8,823,000 First Chicago,
5.400%, dated 04/30/98 to be repurchased
on 05/01/98 at $8,824,323
(Collateralized by U.S. Treasury Note
6.250%, due 05/31/00;
Total Par $8,675,000). . . . . . . . . . . . . . 8,823,000
----------------
TOTAL REPURCHASE AGREEMENT . . . . . . . . . . . 8,823,000
(Cost $8,823,000) ----------------
TOTAL INVESTMENTS - 100.07%. . . . . . . . . . . . . . . . . . 354,592,064
----------------
(Cost $238,180,104)**
LIABILITIES NET OF CASH AND OTHER ASSETS - (0.07%) . . . . . . (259,419)
----------------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . . . . . . . $ 354,332,645
----------------
----------------
</TABLE>
- --------------------
<TABLE>
<CAPTION>
<S><C>
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $238,180,104.
Gross unrealized appreciation $ 119,070,438
Gross unrealized (depreciation) (2,658,478)
--------------
Net unrealized appreciation $ 116,411,960
--------------
--------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST TALON FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ -----
<C> <S> <C>
COMMON STOCKS - 78.77%
CONSUMER CYCLICAL - 3.54%
60,000 Circus Circus Enterprises, Inc.* . . . . . . . . $ 1,083,750
----------------
CONSUMER STAPLE - 2.44%
20,000 Philip Morris Cos., Inc. . . . . . . . . . . . . 746,250
----------------
ELECTRICAL - 2.33%
30,000 Berg Electronics Corp.*. . . . . . . . . . . . . 714,375
----------------
FINANCE - 18.36%
125,000 Capital Trust, Class A*. . . . . . . . . . . . . 1,406,250
160,000 Danielson Holdings Corp.*. . . . . . . . . . . . 1,240,000
48,125 St. Paul Bancorp, Inc. . . . . . . . . . . . . . 1,203,125
30,000 TIG Holdings, Inc. . . . . . . . . . . . . . . . 721,875
25,000 Travelers Property Casualty, Class A . . . . . . 1,050,000
----------------
5,621,250
----------------
HEALTHCARE SERVICES - 5.91%
55,000 Columbia HCA Healthcare Corp.. . . . . . . . . . 1,811,563
----------------
LODGING - 3.13%
30,000 Hilton Hotels Corp. . . . . . . . . . . . . . . 958,125
----------------
PHARMACEUTICALS - 13.51%
60,000 Mylan Laboratories, Inc. . . . . . . . . . . . . 1,627,500
65,000 North American Vaccine, Inc.* . . . . . . . . . 1,056,250
67,544 Vitalink Pharmacy Services, Inc.*. . . . . . . . 1,452,196
----------------
4,135,946
----------------
PRINTING AND PUBLISHING - 4.60%
32,000 R.R. Donnelley & Sons Co. . . . . . . . . . . . 1,410,000
----------------
REAL ESTATE - 2.88%
31,000 Equity Office Properties Trust, REIT . . . . . . 881,562
----------------
RESTAURANTS - 6.70%
28,000 Starbucks Corp.* . . . . . . . . . . . . . . . . 1,347,500
122,500 Unique Casual Restaurants* . . . . . . . . . . . 704,375
----------------
2,051,875
----------------
TECHNOLOGY - 12.54%
62,000 Cerner Corp.* . . . . . . . . . . . . . . . . . 1,848,375
40,000 Compaq Computer Corp.. . . . . . . . . . . . . . 1,122,500
115,000 Robotic Vision Systems, Inc.*. . . . . . . . . . 869,687
----------------
3,840,562
----------------
<CAPTION>
Market
Shares Value
- ------ -----
<C> <S> <C>
TELECOMMUNICATIONS - 2.83%
125,000 Data Broadcasting Corp.* . . . . . . . . . . . . $ 867,188
----------------
TOTAL COMMON STOCKS. . . . . . . . . . . . . . . 24,122,446
(Cost $19,840,801) ----------------
Par Value
- ---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 22.70%
FEDERAL HOME LOAN BANK - 3.22%
$ 1,000,000 5.317%, 08/03/98 . . . . . . . . . . . . . . . . 985,970
----------------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 3.24%
1,000,000 5.217%, 06/11/98 . . . . . . . . . . . . . . . . 993,850
----------------
U.S. TREASURY BILLS (A) - 12.97%
1,500,000 4.680%, 05/14/98 . . . . . . . . . . . . . . . . 1,497,270
1,000,000 4.827%, 05/28/98 . . . . . . . . . . . . . . . . 996,246
1,000,000 4.783%, 07/23/98 . . . . . . . . . . . . . . . . 988,840
500,000 5.012%, 10/15/98 . . . . . . . . . . . . . . . . 488,305
----------------
3,970,661
----------------
U.S. TREASURY NOTE - 3.27%
1,000,000 5.250%, 07/31/98 . . . . . . . . . . . . . . . . 1,000,450
----------------
TOTAL U.S. GOVERNMENT
AND AGENCY OBLIGATIONS . . . . . . . . . . . . . 6,950,931
(Cost $6,949,249) ----------------
Shares
- ------
INVESTMENT COMPANY - 3.17%
970,973 Bankers Trust Institutional
Cash Management Fund . . . . . . . . . . . . . . 970,973
----------------
TOTAL INVESTMENT COMPANY . . . . . . . . . . . . 970,973
(Cost $970,973) ----------------
TOTAL INVESTMENTS - 104.64%. . . . . . . . . . . . . . . . . . 32,044,350
(Cost $27,761,023)** ----------------
LIABILITIES NET OF CASH AND OTHER ASSETS - (4.64%) . . . . . . (1,421,301)
----------------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . . . . . . . $ 30,623,049
----------------
----------------
</TABLE>
- --------------------
<TABLE>
<CAPTION>
<S><C>
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $27,761,025.
Gross unrealized appreciation $ 5,319,977
Gross unrealized (depreciation) (1,036,650)
------------
Net unrealized appreciation $ 4,283,327
------------
------------
(A) Annualized yield at time of purchase
REIT Real Estate Investment Trust
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST BALANCED FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ -----
<C> <S> <C>
COMMON STOCKS - 59.56%
BUSINESS SERVICES - 2.27%
90,000 Paychex, Inc. . . . . . . . . . . . . . . . . . $ 4,888,125
----------------
CAPITAL GOODS - 3.51%
90,000 AlliedSignal Corp. . . . . . . . . . . . . . . . 3,943,125
75,000 Pitney Bowes, Inc. . . . . . . . . . . . . . . . 3,600,000
----------------
7,543,125
----------------
CHEMICALS - 1.05%
45,000 Praxair, Inc. . . . . . . . . . . . . . . . . . 2,264,062
----------------
CONSUMER DURABLES - 3.51%
65,000 Illinois Tool Works, Inc. . . . . . . . . . . . 4,582,500
50,000 Johnson Controls, Inc. . . . . . . . . . . . . . 2,968,750
----------------
7,551,250
----------------
CONSUMER NON-DURABLES - 7.36%
85,000 Cintas Corp. . . . . . . . . . . . . . . . . . . 4,048,125
75,000 Lancaster Colony Corp. . . . . . . . . . . . . . 2,896,875
60,000 Mattel, Inc. . . . . . . . . . . . . . . . . . . 2,298,750
75,000 Newell Co. . . . . . . . . . . . . . . . . . . . 3,623,437
36,000 Procter & Gamble Co. . . . . . . . . . . . . . . 2,958,750
----------------
15,825,937
----------------
ELECTRICAL - 2.18%
55,000 General Electric Co. . . . . . . . . . . . . . . 4,681,875
----------------
ENERGY - 1.09%
40,000 Smith International, Inc.* . . . . . . . . . . . 2,350,000
----------------
FINANCE - 12.18%
40,000 AFLAC, Inc. . . . . . . . . . . . . . . . . . . 2,600,000
35,000 American International Group, Inc. . . . . . . . 4,604,687
30,000 Associates First Capital Corp., Class A . . . . 2,242,500
90,000 Federal Home Loan Mortgage Corp. . . . . . . . . 4,168,125
50,000 First Data Corp. . . . . . . . . . . . . . . . . 1,693,750
110,000 MBNA Corp. . . . . . . . . . . . . . . . . . . . 3,726,250
110,000 Norwest Corp. . . . . . . . . . . . . . . . . . 4,365,625
80,000 Schwab (Charles) Corp. . . . . . . . . . . . . . 2,800,000
----------------
26,200,937
----------------
FOOD AND BEVERAGE - 2.35%
45,000 Richfood Holdings, Inc., Class A . . . . . . . . 1,234,687
160,000 Sysco Corp. . . . . . . . . . . . . . . . . . . 3,810,000
----------------
5,044,687
----------------
HEALTH CARE SERVICES - 7.33%
35,000 Cardinal Health, Inc. . . . . . . . . . . . . . 3,368,750
140,000 Health Management
Associates, Inc., Class A* . . . . . . . . . . . 4,410,000
Market
Shares Value
- ------ -----
<C> <S> <C>
HEALTH CARE SERVICES (CONTINUED)
100,000 Omnicare, Inc. . . . . . . . . . . . . . . . . . $ 3,425,000
40,000 Pfizer, Inc. . . . . . . . . . . . . . . . . . . 4,552,500
----------------
15,756,250
----------------
PHARMACEUTICALS - 1.68%
30,000 Merck & Co., Inc. . . . . . . . . . . . . . . . 3,615,000
----------------
RETAIL - 2.57%
50,000 Kohl's Corp.* . . . . . . . . . . . . . . . . . 2,065,625
100,000 Walgreen Co. . . . . . . . . . . . . . . . . . . 3,450,000
----------------
5,515,625
----------------
TECHNOLOGY - 10.34%
60,000 Cisco Systems, Inc.* . . . . . . . . . . . . . . 4,395,000
35,000 Computer Associates International, Inc. . . . . 2,049,687
50,000 Computer Sciences Corp.* . . . . . . . . . . . . 2,637,500
85,000 EMC Corp.* . . . . . . . . . . . . . . . . . . . 3,920,625
55,000 HBO & Co.. . . . . . . . . . . . . . . . . . . . 3,289,687
50,000 Microsoft Corp.* . . . . . . . . . . . . . . . . 4,506,250
35,000 Sun Microsystems, Inc.* . . . . . . . . . . . . 1,441,562
----------------
22,240,311
----------------
TELECOMMUNICATIONS - 2.14%
65,000 Tellabs, Inc.* . . . . . . . . . . . . . . . . . 4,606,875
----------------
TOTAL COMMON STOCKS. . . . . . . . . . . . . . . 128,084,059
(Cost $80,206,668) ----------------
Par Value
- ---------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 18.10%
U.S. TREASURY NOTES - 7.37%
$ 1,500,000 9.000%, 05/15/98 . . . . . . . . . . . . . . . . 1,502,580
2,000,000 5.500%, 02/28/99 . . . . . . . . . . . . . . . . 2,000,300
2,000,000 7.125%, 02/29/00 . . . . . . . . . . . . . . . . 2,053,100
2,000,000 7.875%, 08/15/01 . . . . . . . . . . . . . . . . 2,132,200
2,000,000 6.375%, 08/15/02 . . . . . . . . . . . . . . . . 2,052,800
2,000,000 5.750%, 08/15/03 . . . . . . . . . . . . . . . . 2,007,920
2,000,000 5.875%, 02/15/04 . . . . . . . . . . . . . . . . 2,018,780
2,000,000 6.500%, 08/15/05 . . . . . . . . . . . . . . . . 2,088,060
----------------
15,855,740
----------------
U.S. TREASURY BONDS - 1.51%
1,500,000 7.125%, 02/15/23 . . . . . . . . . . . . . . . . 1,707,600
1,500,000 6.250%, 08/15/23 . . . . . . . . . . . . . . . . 1,542,345
----------------
3,249,945
----------------
FEDERAL HOME LOAN
MORTGAGE CORPORATION - 2.49%
350,717 5.500%, 08/15/04 . . . . . . . . . . . . . . . . 350,082
1,000,000 5.850%, 02/21/06 . . . . . . . . . . . . . . . . 988,810
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST BALANCED FUND
SCHEDULE OF INVESTMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
FEDERAL HOME LOAN
MORTGAGE CORPORATION (CONTINUED)
$ 1,000,000 6.500%, 09/15/07 . . . . . . . . . . . . . . . . $ 1,016,750
495,164 7.500%, 04/01/08 . . . . . . . . . . . . . . . . 510,019
954,908 6.500%, 06/01/09 . . . . . . . . . . . . . . . . 960,275
544,580 7.000%, 07/01/13 . . . . . . . . . . . . . . . . 551,556
198,726 7.000%, 11/15/13, IO . . . . . . . . . . . . . . 976
1,000,000 6.000%, 12/15/23 . . . . . . . . . . . . . . . . 970,490
----------------
5,348,958
----------------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 2.99%
2,000,000 5.625%, 03/15/01 . . . . . . . . . . . . . . . . 1,992,760
746,989 6.900%, 12/25/03, CMO. . . . . . . . . . . . . . 756,379
1,403,207 7.000%, 01/01/13 . . . . . . . . . . . . . . . . 1,429,518
990,089 7.000%, 03/01/13 . . . . . . . . . . . . . . . . 1,008,653
773,371 7.000%, 07/25/17, CMO, IO. . . . . . . . . . . . 56,181
443,830 9.000%, 05/01/25 . . . . . . . . . . . . . . . . 469,625
718,184 6.500%, 02/01/28 . . . . . . . . . . . . . . . . 711,226
----------------
6,424,342
----------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 3.74%
429,655 7.000%, 06/15/08 . . . . . . . . . . . . . . . . 439,859
573,582 8.000%, 03/15/17 . . . . . . . . . . . . . . . . 595,625
806,042 8.000%, 06/15/17 . . . . . . . . . . . . . . . . 837,018
1,568,161 7.000%, 09/15/23 . . . . . . . . . . . . . . . . 1,587,763
734,497 7.000%, 10/15/23 . . . . . . . . . . . . . . . . 743,679
1,004,766 7.000%, 10/15/23 . . . . . . . . . . . . . . . . 1,017,325
1,387,579 6.500%, 03/15/26 . . . . . . . . . . . . . . . . 1,375,868
474,370 7.500%, 06/15/27 . . . . . . . . . . . . . . . . 487,709
961,802 6.500%, 08/15/27 . . . . . . . . . . . . . . . . 954,887
----------------
8,039,733
----------------
TOTAL U.S. GOVERNMENT
AND AGENCY OBLIGATIONS . . . . . . . . . . . . . 38,918,718
(Cost $38,280,783) ----------------
CORPORATE NOTES AND BONDS - 15.87%
CABLE TELEVISION - 0.38%
700,000 Continental Cablevision, Debenture
9.500%, 08/01/13 . . . . . . . . . . . . . . . . 815,500
----------------
ENERGY - 1.30%
1,700,000 Ashland, Inc.
6.625%, 02/15/08 (A) . . . . . . . . . . . . . . 1,696,000
375,000 Petroliam Nasional Berhad
7.125%, 10/18/06 (A) . . . . . . . . . . . . . . 351,094
750,000 Williams Co., Inc.
5.950%, 02/15/00 (A) . . . . . . . . . . . . . . 739,688
----------------
2,786,782
----------------
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
FINANCE - 8.79%
$ 1,000,000 Advanta Corp., MTN
7.000%, 05/01/01 . . . . . . . . . . . . . . . . $ 923,750
650,000 Associates Corp. NA
6.375%, 08/15/98 . . . . . . . . . . . . . . . . 650,767
750,000 Chelsea GCA Realty Partnership, REIT
7.250%, 10/21/07 . . . . . . . . . . . . . . . . 765,000
1,000,000 Continental Corp. Notes
7.250%, 03/01/03 . . . . . . . . . . . . . . . . 1,027,500
750,000 DR Investment Corp.
7.450%, 05/15/07 (A) . . . . . . . . . . . . . . 796,875
1,250,000 Goldman Sachs Group LP
6.250%, 02/01/03 (A) . . . . . . . . . . . . . . 1,246,875
1,000,000 HSBC America Capital II
8.380%, 05/15/27 (A) . . . . . . . . . . . . . . 1,048,750
1,500,000 Heller Financial, Inc.
5.625%, 03/15/00 . . . . . . . . . . . . . . . . 1,486,875
1,000,000 International Bank for Reconstruction &
Development Notes
9.770%, 05/27/98 . . . . . . . . . . . . . . . . 1,002,500
1,000,000 John Deere Capital Corp., Debenture
8.625%, 08/01/19 . . . . . . . . . . . . . . . . 1,092,500
1,000,000 Leucadia National Corp.
Senior Subordinated Notes
8.250%, 06/15/05 . . . . . . . . . . . . . . . . 1,063,750
500,000 Leucadia National Corp.
Senior Subordinated Notes
7.875%, 10/15/06 . . . . . . . . . . . . . . . . 521,875
1,500,000 Merrill Lynch & Co., Inc.
7.000%, 04/27/08 . . . . . . . . . . . . . . . . 1,571,250
1,500,000 Metropolitan Life Insurance Co.
6.300%, 11/01/03 (A) . . . . . . . . . . . . . . 1,494,375
600,000 Olympic Financial Ltd.
11.500%, 03/15/07. . . . . . . . . . . . . . . . 597,000
1,000,000 Pacific Mutual Life Insurance Co.
7.900%, 12/30/23 (A) . . . . . . . . . . . . . . 1,090,000
1,000,000 Prudential Insurance Co. of America
8.300%, 07/01/25 (A) . . . . . . . . . . . . . . 1,117,500
375,000 SB Treasury Co., LLC
9.400%, 12/29/49 (A) . . . . . . . . . . . . . . 386,719
1,000,000 Wells Fargo Capital
7.730%, 12/01/26 (A) . . . . . . . . . . . . . . 1,026,250
----------------
18,910,111
----------------
FOOD AND BEVERAGE - 0.47%
1,000,000 Nabisco, Inc.
6.700%, 06/15/02 . . . . . . . . . . . . . . . . 1,013,750
----------------
HEALTHCARE SERVICES - 0.42%
1,100,000 Hospital Corp. of America
Debenture
8.123%, 06/01/00 (B) . . . . . . . . . . . . . . 911,625
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST BALANCED FUND
SCHEDULE OF INVESTMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
PRINTING AND PUBLISHING - 0.90%
$ 1,000,000 News America Holdings
7.750%, 02/01/24 . . . . . . . . . . . . . . . . $ 1,055,000
782,000 Time Warner, Inc., Series M
10.250%, 07/01/16. . . . . . . . . . . . . . . . 876,818
----------------
1,931,818
----------------
RETAIL - 0.47%
1,000,000 K-mart Corp., Debenture
7.950%, 02/01/23 . . . . . . . . . . . . . . . . 1,005,000
----------------
TRANSPORTATION - 0.21%
413,123 Delta Air Lines, Inc.
Equipment Trust, Series 1992A
8.540%, 01/02/07 . . . . . . . . . . . . . . . . 445,380
----------------
UTILITIES - 2.93%
1,000,000 CalEnergy Co., Inc.
7.630%, 10/15/07 . . . . . . . . . . . . . . . . 1,002,500
1,000,000 Commonwealth Edison Co., First Mortgage
7.750%, 07/15/23 . . . . . . . . . . . . . . . . 1,027,500
1,000,000 Gulf States Utilities, First Mortgage, Series A
8.250%, 04/01/04 . . . . . . . . . . . . . . . . 1,077,500
1,000,000 Long Island Lighting Co., Debenture
9.000%, 11/01/22 . . . . . . . . . . . . . . . . 1,137,500
1,000,000 Niagra Mohawk Power, First Mortgage
8.000%, 06/01/04 . . . . . . . . . . . . . . . . 1,067,500
1,000,000 Philadelphia Electric Co., First Mortgage
5.625%, 11/01/01 . . . . . . . . . . . . . . . . 986,250
----------------
6,298,750
----------------
TOTAL CORPORATE NOTES AND BONDS. . . . . . . . . 34,118,716
(Cost $33,224,995) ----------------
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
YANKEE BONDS - 1.80%
$ 1,750,000 Chilgener S.A. Yankee (Chile)
6.500%, 01/15/06 . . . . . . . . . . . . . . . . $ 1,655,938
943,503 Province of Mendoza
Collateral Oil Royalty Note
10.000%, 07/25/02 (A). . . . . . . . . . . . . . 974,534
1,250,000 Skandinaviska Enskilda, Subordinated Notes
6.625%, 03/29/49 (A) . . . . . . . . . . . . . . 1,250,000
----------------
TOTAL YANKEE BONDS . . . . . . . . . . . . . . . 3,880,472
(Cost $3,918,272) ----------------
GOVERNMENT TRUST CERTIFICATES - 0.38%
51,490 Greece Trust, Class G-2
8.000%, 05/15/98 . . . . . . . . . . . . . . . . 51,490
745,803 Israel Collateral Trust, Class 1-C
9.250%, 11/15/01 . . . . . . . . . . . . . . . . 770,042
----------------
TOTAL GOVERNMENT TRUST CERTIFICATES. . . . . . . 821,532
(Cost $867,920) ----------------
ASSET-BACKED SECURITIES - 2.56%
1,000,000 BA Mortgage Securities, CMO
7.350%, 07/25/26 . . . . . . . . . . . . . . . . 1,004,688
1,400,000 Chemical Master Credit Card Trust I, Class A
5.550%, 09/15/03 . . . . . . . . . . . . . . . . 1,388,002
1,000,000 Citibank Credit Card Master Trust I, Class A
6.839%, 02/10/04 . . . . . . . . . . . . . . . . 1,017,840
1,500,000 Countrywide Home Loans, CMO
6.750%, 04/25/28 . . . . . . . . . . . . . . . . 1,458,750
600,000 Midland Realty Acceptance Corp., CMO
7.475%, 08/25/28 . . . . . . . . . . . . . . . . 630,188
----------------
TOTAL ASSET-BACKED SECURITIES. . . . . . . . . . 5,499,468
(Cost $5,459,599) ----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST BALANCED FUND
SCHEDULE OF INVESTMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
REPURCHASE AGREEMENTS - 1.26%
$ 2,446,000 First Chicago,
5.400%, dated 04/30/98 to be repurchased
on 05/01/98 at $2,446,367
(Collateralized by U.S. Treasury Note
6.250%, due 05/31/00;
Total Par $2,405,000). . . . . . . . . . . . . . $ 2,446,000
257,000 First Chicago,
5.400%, dated 04/30/98 to be repurchased
on 05/01/98 at $257,039
(Collateralized by U.S. Treasury Note
6.875%, due 08/31/99;
Total Par $260,000). . . . . . . . . . . . . . . 257,000
----------------
TOTAL REPURCHASE AGREEMENTS. . . . . . . . . . . 2,703,000
(Cost $2,703,000) ----------------
TOTAL INVESTMENTS - 99.53% . . . . . . . . . . . . . . . . . . 214,025,965
(Cost $164,661,237)** ----------------
NET OTHER ASSETS AND LIABILITIES - 0.47% . . . . . . . . . . . 1,006,936
----------------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . . . . . . . $ 215,032,901
----------------
----------------
</TABLE>
- --------------------
<TABLE>
<CAPTION>
<S><C>
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $164,661,237.
Gross unrealized appreciation $ 50,441,633
Gross unrealized (depreciation) (1,076,905)
--------------
Net unrealized appreciation $ 49,364,728
--------------
--------------
</TABLE>
(A) Securities exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold, in transactions exempt
from registration, to qualified institutional buyers. At April 30,
1998, these securities amounted to $13,218,660 or 6.15% of net assets.
(B) Annualized yield at time of purchase
CMO Collateralized Mortgage Obligation
IO Interest Only
MTN Medium Term Note
REIT Real Estate Investment Trust
PORTFOLIO COMPOSITION (Moody's Ratings)
Common Stock 60%
Repurchase Agreement 1%
U.S. Government Obligations 10%
U.S. Government Agency Obligations 9%
Rated Corporate Notes and Bonds:
Aaa 3%
AA 1%
A 5%
Baa 6%
Ba 4%
B 1%
-----
100%
-----
-----
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
ALLEGHANY FUNDS
MONTAG & CALDWELL BALANCED FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ -----
<C> <S> <C>
COMMON STOCKS - 61.18%
BUSINESS SERVICES - 1.41%
44,800 Manpower, Inc. . . . . . . . . . . . . . . . . . $ 1,974,000
----------------
CONSUMER NON-DURABLES - 9.13%
34,500 Gillette Co. . . . . . . . . . . . . . . . . . . 3,982,594
29,400 Interpublic Group Of Companies, Inc. . . . . . . 1,877,925
80,000 Mattel, Inc. . . . . . . . . . . . . . . . . . . 3,065,000
46,500 Procter & Gamble Co. . . . . . . . . . . . . . . 3,821,719
----------------
12,747,238
----------------
ELECTRICAL - 1.98%
32,500 General Electric Co. . . . . . . . . . . . . . . 2,766,563
----------------
ENERGY - 3.77%
42,000 Baker Hughes, Inc. . . . . . . . . . . . . . . . 1,701,000
43,000 Schlumberger, Ltd. . . . . . . . . . . . . . . . 3,563,625
----------------
5,264,625
----------------
ENTERTAINMENT AND LEISURE - 2.76%
31,000 Walt Disney Co . . . . . . . . . . . . . . . . . 3,853,688
----------------
FINANCE - 4.05%
27,000 American Express Co. . . . . . . . . . . . . . . 2,754,000
22,000 American International Group, Inc. . . . . . . . 2,894,375
----------------
5,648,375
----------------
FOOD AND BEVERAGE - 2.82%
52,000 Coca-Cola Co.. . . . . . . . . . . . . . . . . . 3,945,500
----------------
HEALTH CARE SERVICES - 7.82%
60,000 Eli Lilly & Co. . . . . . . . . . . . . . . . . 4,173,750
53,000 Johnson & Johnson. . . . . . . . . . . . . . . . 3,782,875
26,100 Pfizer, Inc. . . . . . . . . . . . . . . . . . . 2,970,506
----------------
10,927,131
----------------
Market
Shares Value
- ------ -----
<C> <S> <C>
LODGING - 1.51%
32,400 Marriott International, Inc. . . . . . . . . . . $ 1,069,200
32,400 Marriott International, Inc., Class A. . . . . . 1,036,800
----------------
2,106,000
----------------
MEDICAL SUPPLIES - 2.19%
58,000 Medtronic, Inc. . . . . . . . . . . . . . . . . 3,052,250
----------------
PHARMACEUTICALS - 4.66%
36,500 Bristol-Myers Squibb Co. . . . . . . . . . . . . 3,864,437
22,000 Merck & Co., Inc. . . . . . . . . . . . . . . . 2,651,000
----------------
6,515,437
----------------
RESTAURANTS - 3.85%
38,700 Cracker Barrell Old Country Store, Inc. . . . . 1,422,225
64,000 McDonald's Corp. . . . . . . . . . . . . . . . . 3,960,000
----------------
5,382,225
----------------
RETAIL - 3.98%
54,000 Gap, Inc. . . . . . . . . . . . . . . . . . . . 2,777,625
40,000 Home Depot, Inc. . . . . . . . . . . . . . . . . 2,785,000
----------------
5,562,625
----------------
TECHNOLOGY - 9.38%
43,500 Boston Scientific Corp.* . . . . . . . . . . . . 3,145,593
36,200 Cisco Systems, Inc.* . . . . . . . . . . . . . . 2,651,650
39,000 Electronic Arts, Inc.* . . . . . . . . . . . . . 1,803,750
11,500 Intel Corp . . . . . . . . . . . . . . . . . . . 929,344
28,100 Microsoft Corp.* . . . . . . . . . . . . . . . . 2,532,513
46,000 Solectron Corp.* . . . . . . . . . . . . . . . . 2,038,375
----------------
13,101,225
----------------
TELECOMMUNICATIONS - 1.87%
50,700 Ericsson (LM) Telefonaktiebolaget, ADR
Class B, Series 10 . . . . . . . . . . . . . . . 2,607,881
----------------
TOTAL COMMON STOCKS. . . . . . . . . . . . . . . 85,454,763
(Cost $63,527,739) ----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
ALLEGHANY FUNDS
MONTAG & CALDWELL BALANCED FUND
SCHEDULE OF INVESTMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 25.66%
U.S. TREASURY NOTES - 15.12%
$ 3,000,000 6.250%, 08/31/00 . . . . . . . . . . . . . . . . $ 3,041,760
3,000,000 6.250%, 04/30/01 . . . . . . . . . . . . . . . . 3,051,450
3,500,000 6.625%, 04/30/02 . . . . . . . . . . . . . . . . 3,618,020
3,000,000 5.750%, 08/15/03 . . . . . . . . . . . . . . . . 3,011,880
1,000,000 7.875%, 11/15/04 . . . . . . . . . . . . . . . . 1,115,560
3,500,000 6.500%, 10/15/06 . . . . . . . . . . . . . . . . 3,668,875
3,500,000 6.250%, 02/15/07 . . . . . . . . . . . . . . . . 3,619,000
----------------
21,126,545
----------------
U.S. TREASURY BONDS - 5.29%
2,500,000 7.250%, 05/15/16 . . . . . . . . . . . . . . . . 2,841,425
2,000,000 8.000%, 11/15/21 . . . . . . . . . . . . . . . . 2,486,020
2,000,000 6.250%, 08/15/23 . . . . . . . . . . . . . . . . 2,056,460
----------------
7,383,905
----------------
FEDERAL LOAN HOME BANK - 0.36%
500,000 6.940%, 02/12/04 . . . . . . . . . . . . . . . . 503,200
----------------
FEDERAL HOME LOAN
MORTGAGE CORPORATION - 3.07%
750,000 6.400%, 12/13/06, Debenture. . . . . . . . . . . 767,858
1,750,000 6.700%, 01/05/07, Series B . . . . . . . . . . . 1,832,932
600,000 7.500%, 03/15/07, CMO, Class J . . . . . . . . . 610,368
175,000 6.000%, 04/15/08, CMO, Class K . . . . . . . . . 174,386
500,000 6.500%, 07/15/20, CMO, Class F . . . . . . . . . 500,190
400,000 6.500%, 11/15/20, CMO, Class H . . . . . . . . . 400,580
----------------
4,286,314
----------------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 1.82%
500,000 7.070%, 03/08/11, MTN. . . . . . . . . . . . . . 500,050
2,000,000 7.250%, 01/17/21, CMO, REMIC . . . . . . . . . . 2,038,060
----------------
2,538,110
----------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 0.00% (A)
3,659 8.500%, 06/15/01 . . . . . . . . . . . . . . . . 3,827
2,379 9.000%, 09/15/08 . . . . . . . . . . . . . . . . 2,548
----------------
6,375
----------------
TOTAL U.S. GOVERNMENT
AND AGENCY OBLIGATIONS . . . . . . . . . . . . . 35,844,449
(Cost $35,767,617) ----------------
<CAPTION>
Market
Par Value Value
- --------- -----
<S> <C> <C>
CORPORATE NOTES AND BONDS - 10.35%
CONSUMER NON-DURABLE - 1.45%
$ 2,000,000 NIKE, Inc.
6.375%, 12/01/03 . . . . . . . . . . . . . . . . $ 2,025,000
----------------
FINANCE - 7.04%
1,500,000 American Express Co., Senior Notes
6.750%, 06/23/04 . . . . . . . . . . . . . . . . 1,543,125
55,000 American General Finance Senior Notes
7.200%, 07/08/99 . . . . . . . . . . . . . . . . 55,756
2,500,000 Citicorp Subordinated Notes
7.125%, 05/15/06 . . . . . . . . . . . . . . . . 2,609,375
500,000 First National Bank Commerce
Senior Notes, MTN
6.500%, 01/14/00 . . . . . . . . . . . . . . . . 503,750
750,000 General Motors Acceptance Corp.
7.125%, 05/01/03 . . . . . . . . . . . . . . . . 775,313
1,000,000 Household Finance Corp.
7.250%, 05/15/06 . . . . . . . . . . . . . . . . 1,052,500
500,000 Household Finance Corp.
7.300%, 07/30/12 . . . . . . . . . . . . . . . . 516,875
285,000 Salomon Inc., Senior Notes
7.125%, 08/01/99 . . . . . . . . . . . . . . . . 289,343
500,000 Salomon, Inc.
7.300%, 05/15/02 . . . . . . . . . . . . . . . . 517,500
2,000,000 Salomon Smith Barney
6.250%, 01/15/05 . . . . . . . . . . . . . . . . 1,967,500
----------------
9,831,037
----------------
RETAIL - 1.86%
500,000 Penney (J.C.) & Co., Debenture
9.750%, 06/15/21 . . . . . . . . . . . . . . . . 556,875
2,000,000 Sears Roebuck Acceptance Corp.
6.700%, 11/15/06 . . . . . . . . . . . . . . . . 2,040,000
----------------
2,596,875
----------------
TOTAL CORPORATE NOTES AND BONDS. . . . . . . . . 14,452,912
(Cost $14,355,292) ----------------
ASSET-BACKED SECURITIES - 0.83%
1,150,000 Chase Auto Owner Trust
Series 1997-B, Class A3
6.350%, 02/15/01 . . . . . . . . . . . . . . . . 1,156,963
----------------
TOTAL ASSET-BACKED SECURITIES. . . . . . . . . . 1,156,963
(Cost $1,150,469) ----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
ALLEGHANY FUNDS
MONTAG & CALDWELL BALANCED FUND
SCHEDULE OF INVESTMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ -----
<C> <S> <C>
INVESTMENT COMPANIES - 1.51%
1,897,563 Bankers Trust Institutional
Cash Management Fund . . . . . . . . . . . . . . $ 1,897,563
212,220 Bankers Trust Institutional
Treasury Money Fund. . . . . . . . . . . . . . . 212,220
----------------
TOTAL INVESTMENT COMPANIES . . . . . . . . . . . 2,109,783
(Cost $2,109,783) ----------------
TOTAL INVESTMENTS - 99.53% . . . . . . . . . . . . . . . . . . 139,018,870
(Cost $116,910,900)** ----------------
NET OTHER ASSETS AND LIABILITIES - 0.47% . . . . . . . . . . . 651,636
----------------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . . . . . . . $ 139,670,506
----------------
----------------
</TABLE>
- --------------------
<TABLE>
<CAPTION>
<S> <C>
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $116,910,900.
Gross unrealized appreciation $ 22,531,686
Gross unrealized (depreciation) (423,716)
-------------
Net unrealized appreciation $ 22,107,970
-------------
-------------
(A) Amount represents less than 0.1%
ADR American Depositary Receipt
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
REMIC Real Estate Mortgage Investment Conduit
<CAPTION>
<S> <C>
PORTFOLIO COMPOSITION (Moody's Ratings)
Common Stock 61%
U.S. Government Obligations 21%
U.S. Government Agency Obligations 5%
Investment Company 2%
Rated Corporate Notes and Bonds:
Aaa 1%
A 10%
-----
100%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST BOND FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 43.89%
U.S. TREASURY NOTES - 17.31%
$ 1,250,000 5.120%, 11/30/98 . . . . . . . . . . . . . . . . $ 1,248,050
2,500,000 5.500%, 02/28/99 . . . . . . . . . . . . . . . . 2,500,375
2,500,000 7.120%, 02/29/00 . . . . . . . . . . . . . . . . 2,566,375
2,500,000 7.875%, 08/15/01 . . . . . . . . . . . . . . . . 2,665,250
3,000,000 6.250%, 10/31/01 . . . . . . . . . . . . . . . . 3,056,430
2,000,000 7.500%, 05/15/02 . . . . . . . . . . . . . . . . 2,130,380
4,500,000 6.370%, 08/15/02 . . . . . . . . . . . . . . . . 4,618,800
2,500,000 5.750%, 08/15/03 . . . . . . . . . . . . . . . . 2,509,900
3,000,000 7.250%, 05/15/04 . . . . . . . . . . . . . . . . 3,234,630
----------------
24,530,190
----------------
U.S. TREASURY BONDS - 3.82%
2,500,000 7.125%, 02/15/23 . . . . . . . . . . . . . . . . 2,846,000
2,500,000 6.250%, 08/15/23 . . . . . . . . . . . . . . . . 2,570,575
----------------
5,416,575
----------------
FEDERAL HOME LOAN
MORTGAGE CORPORATION - 8.15%
2,500,000 5.850%, 02/21/06, Debenture . . . . . . . . . . 2,472,025
1,000,000 6.500%, 09/15/07, CMO . . . . . . . . . . . . . 1,016,750
500,000 5.750%, 01/15/08, CMO. . . . . . . . . . . . . . 493,985
495,164 7.500%, 04/01/08, Debenture. . . . . . . . . . . 510,019
1,500,000 6.000%, 03/15/09, CMO . . . . . . . . . . . . . 1,453,005
1,273,211 6.500%, 06/01/09, CMO . . . . . . . . . . . . . 1,280,366
1,561,912 6.500%, 01/01/11 . . . . . . . . . . . . . . . . 1,570,690
1,381,774 6.500%, 11/01/11 . . . . . . . . . . . . . . . . 1,389,539
1,400,000 6.000%, 12/15/23, CMO . . . . . . . . . . . . . 1,358,686
----------------
11,545,065
----------------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 7.71%
2,500,000 5.625%, 03/15/01 . . . . . . . . . . . . . . . . 2,490,950
995,986 6.900%, 12/25/03, CMO . . . . . . . . . . . . . 1,008,505
375,604 7.000%, 07/01/08 . . . . . . . . . . . . . . . . 382,646
1,337,042 7.000%, 05/01/12 . . . . . . . . . . . . . . . . 1,362,111
2,338,679 7.000%, 01/01/13 . . . . . . . . . . . . . . . . 2,382,529
1,485,134 7.000%, 03/01/13 . . . . . . . . . . . . . . . . 1,512,980
710,128 9.000%, 05/01/25 . . . . . . . . . . . . . . . . 751,401
1,047,739 6.500%, 02/01/26 . . . . . . . . . . . . . . . . 1,037,586
----------------
10,928,708
----------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 6.90%
806,042 8.000%, 06/15/17 . . . . . . . . . . . . . . . . 837,018
1,285,371 7.000%, 10/15/23 . . . . . . . . . . . . . . . . 1,301,438
1,339,687 7.000%, 10/15/23 . . . . . . . . . . . . . . . . 1,356,433
1,387,579 6.500%, 03/15/26 . . . . . . . . . . . . . . . . 1,375,868
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION (CONTINUED)
$ 2,371,399 7.000%, 06/15/27 . . . . . . . . . . . . . . . . $ 2,409,935
1,224,660 7.000%, 08/20/27 . . . . . . . . . . . . . . . . 1,234,604
1,281,914 6.500%, 09/20/27 . . . . . . . . . . . . . . . . 1,265,480
----------------
9,780,776
----------------
TOTAL U.S. GOVERNMENT
AND AGENCY OBLIGATIONS . . . . . . . . . . . . . 62,201,314
(Cost $61,145,573) ----------------
CORPORATE NOTES AND BONDS - 38.01%
CABLE TELEVISION - 1.23%
1,500,000 Continental Cablevision, Debenture
9.500%, 08/01/13 . . . . . . . . . . . . . . . . 1,747,500
----------------
ENERGY - 2.74%
2,000,000 Ashland, Inc.
6.625%, 02/15/08 (A) . . . . . . . . . . . . . . 1,995,294
700,000 Petroliam Nasional Berhad
7.125%, 10/18/06 (A) . . . . . . . . . . . . . . 655,375
1,250,000 Williams Co., Inc.
5.950%, 02/15/00 (A) . . . . . . . . . . . . . . 1,232,813
----------------
3,883,482
----------------
FINANCE - 20.20%
1,250,000 Advanta Corp., MTN
7.000%, 05/01/01 . . . . . . . . . . . . . . . . 1,154,688
1,250,000 Associates Corp. NA
6.375%, 08/15/98 . . . . . . . . . . . . . . . . 1,251,475
1,250,000 Chelsea GCA Realty Partnership, REIT
7.250%, 10/21/07 . . . . . . . . . . . . . . . . 1,275,000
1,500,000 Continental Corp. Notes
7.250%, 03/01/03 . . . . . . . . . . . . . . . . 1,541,250
1,000,000 Goldman Sachs Group LP
6.200%, 12/15/00 (A) . . . . . . . . . . . . . . 1,000,000
500,000 Goldman Sachs Group LP
6.250%, 02/01/03 (A) . . . . . . . . . . . . . . 498,750
2,500,000 HSBC America Capital II
8.380%, 05/15/27 (A) . . . . . . . . . . . . . . 2,621,875
1,750,000 Heller Financial, Inc.
5.625%, 03/15/00 . . . . . . . . . . . . . . . . 1,734,688
1,275,000 John Deere Capital Corp., Debenture
8.625%, 08/01/19 . . . . . . . . . . . . . . . . 1,392,938
1,000,000 Leucadia National Corp.
Senior Subordinated Notes
8.250%, 06/15/05 . . . . . . . . . . . . . . . . 1,063,750
750,000 Leucadia National Corp.
Senior Subordinated Notes
7.875%, 10/15/06 . . . . . . . . . . . . . . . . 782,813
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST BOND FUND
SCHEDULE OF INVESTMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
FINANCE (CONTINUED)
$ 3,500,000 Merrill Lynch & Co., Inc.
7.000%, 04/27/08 . . . . . . . . . . . . . . . . $ 3,666,250
3,000,000 Metropolitan Life Insurance Co.
6.300%, 11/01/03 (A) . . . . . . . . . . . . . . 2,988,750
1,000,000 Olympic Financial Ltd.
11.500%, 03/15/07. . . . . . . . . . . . . . . . 995,000
1,520,000 Pacific Mutual Life Insurance Co.
7.900%, 12/30/23 (A) . . . . . . . . . . . . . . 1,656,800
2,000,000 Prudential Insurance Co. of America
8.300%, 07/01/25 (A) . . . . . . . . . . . . . . 2,235,000
700,000 SB Treasury Co., LLC
9.400%, 12/29/49 (A) . . . . . . . . . . . . . . 721,875
2,000,000 Wells Fargo Capital
7.730%, 12/01/26 (A) . . . . . . . . . . . . . . 2,052,500
----------------
28,633,402
----------------
FOOD AND BEVERAGE - 2.16%
500,000 Nabisco, Inc.
6.700%, 06/15/02 . . . . . . . . . . . . . . . . 506,875
2,500,000 Nabisco, Inc.
6.850%, 06/15/05 . . . . . . . . . . . . . . . . 2,546,875
----------------
3,053,750
----------------
HEALTHCARE SERVICES - 0.91%
1,300,000 Columbia Healthcare
6.1250%12-15-2000. . . . . . . . . . . . . . . . 1,285,375
----------------
PRINTING AND PUBLISHING - 2.17%
1,500,000 News America Holdings
7.750%, 01/20/24 . . . . . . . . . . . . . . . . 1,582,500
1,329,000 Time Warner, Inc., Series M
10.250%, 07/01/16. . . . . . . . . . . . . . . . 1,490,141
----------------
3,072,641
----------------
RETAIL - 1.06%
1,500,000 K-mart Corp., Debenture
7.950%, 02/01/23 . . . . . . . . . . . . . . . . 1,507,500
----------------
TRANSPORTATION - 0.48%
413,123 Delta Air Lines, Inc.
Equipment Trust, Series 1992A
8.540%, 01/02/07 . . . . . . . . . . . . . . . . 445,380
203,489 Delta Air Lines, Inc.
9.375%, 09/11/07 . . . . . . . . . . . . . . . . 226,891
----------------
672,271
----------------
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
UTILITIES - 7.06%
$ 1,825,000 Calenergy Co., Inc.
7.630%, 10/15/07 . . . . . . . . . . . . . . . . $ 1,829,563
1,000,000 Commonwealth Edison Co., First Mortgage
7.750%, 07/15/23 . . . . . . . . . . . . . . . . 1,027,500
2,000,000 Gulf States Utilities, First Mortgage, Series A
8.250%, 04/01/04 . . . . . . . . . . . . . . . . 2,155,000
1,250,000 Long Island Lighting Co., Debenture
9.000%, 11/01/22 . . . . . . . . . . . . . . . . 1,421,875
1,500,000 Niagra Mohawk Power, First Mortgage
8.000%, 06/01/04 . . . . . . . . . . . . . . . . 1,601,250
2,000,000 Philadelphia Electric Co., First Mortgage
5.625%, 11/01/01 . . . . . . . . . . . . . . . . 1,972,500
----------------
10,007,688
----------------
TOTAL CORPORATE NOTES AND BONDS. . . . . . . . . 53,863,609
(Cost $52,332,878) ----------------
YANKEE BONDS - 5.01%
3,000,000 Chilgener S.A. Yankee (Chile)
6.500%, 01/15/06 . . . . . . . . . . . . . . . . 2,838,750
1,699,505 Province of Mendoza
Collateral Oil Royalty Note
10.000%, 07/25/02 (A). . . . . . . . . . . . . . 1,755,402
2,500,000 Skandinaviska Enskilda, Subordinated Notes
6.625%, 03/29/49 (A) . . . . . . . . . . . . . . 2,500,000
----------------
TOTAL YANKEE BONDS . . . . . . . . . . . . . . . 7,094,152
(Cost $7,144,224) ----------------
GOVERNMENT TRUST CERTIFICATE - 0.39%
540,707 Israel Collateral Trust, Class 1-C
9.250%, 11/15/01 . . . . . . . . . . . . . . . . 558,280
----------------
TOTAL GOVERNMENT TRUST CERTIFICATE . . . . . . . 558,280
(Cost $591,660) ----------------
ASSET-BACKED SECURITIES - 6.23%
1,750,000 BA Mortgage Securities, CMO
7.350%, 07/25/26 . . . . . . . . . . . . . . . . 1,758,202
2,500,000 Chemical Master Credit Card Trust I, Class A
5.550%, 09/15/03 . . . . . . . . . . . . . . . . 2,478,575
750,000 Citibank Credit Card Master Trust I, Class A
6.839%, 02/10/04 . . . . . . . . . . . . . . . . 763,380
3,000,000 Countrywide Home Loans, CMO
6.750%, 04/25/28 . . . . . . . . . . . . . . . . 2,917,500
875,000 Midland Realty Acceptance Corp., CMO
7.475%, 08/25/28 . . . . . . . . . . . . . . . . 919,023
----------------
TOTAL ASSET-BACKED SECURITIES. . . . . . . . . . 8,836,680
(Cost $8,789,582) ----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST BOND FUND
SCHEDULE OF INVESTMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
REPURCHASE AGREEMENT - 5.48%
$ 7,771,000 First Chicago,
5.400%, dated 04/30/98 to be repurchased
on 05/01/98 at $7,772,166
(Collateralized by U.S. Treasury Note
6.250%, due 05/31/00;
Total Par $7,645,000). . . . . . . . . . . . . . $ 7,771,000
----------------
TOTAL REPURCHASE AGREEMENT . . . . . . . . . . . 7,771,000
(Cost $7,771,000) ----------------
TOTAL INVESTMENTS - 99.01% . . . . . . . . . . . . . . . . . . 140,325,035
(Cost $137,774,917)* ----------------
NET OTHER ASSETS AND LIABILITIES - 0.99% . . . . . . . . . . . 1,401,830
----------------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . . . . . . . $ 141,726,865
----------------
----------------
</TABLE>
- --------------------
* Aggregate cost for Federal income tax purposes is $137,774,917.
<TABLE>
<S> <C>
Gross unrealized appreciation $ 2,956,200
Gross unrealized (depreciation) (406,082)
------------
Net unrealized appreciation $ 2,550,118
------------
------------
</TABLE>
(A) Securities exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold, in
transactions exempt from registration, to qualified institutional
buyers. At April 30, 1998, these securities amounted to
$21,914,434 or 15.46% of net assets.
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
REIT Real Estate Investment Trust
<TABLE>
<S> <C>
PORTFOLIO COMPOSITION (Moody's Ratings)
Repurchase Agreement 6%
U.S. Government Obligations 21%
U.S. Government Agency Obligations 23%
Rated Corporate Notes and Bonds:
Aaa 6%
AA 3%
A 12%
Baa 16%
Ba 9%
B 3%
NR 1%
-----
100%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
MUNICIPAL SECURITIES - 96.75%
ARIZONA - 8.16%
$ 350,000 Mohave County, IDA
6.000%, 07/01/00 . . . . . . . . . . . . . . . . $ 363,608
450,000 Salt River Project Electric System Revenue
Refunding, Series A
5.500%, 01/01/05 . . . . . . . . . . . . . . . . 475,384
200,000 Tucson, Arizona Water Revenue
5.400%, 07/01/05 . . . . . . . . . . . . . . . . 210,788
----------------
1,049,780
----------------
CALIFORNIA - 2.01%
250,000 California State
5.250%, 10/01/10 . . . . . . . . . . . . . . . . 258,437
----------------
FLORIDA - 2.89%
265,000 Dade County, Florida State School District, G.O.
5.000%, 07/15/02
Insured: MBIA. . . . . . . . . . . . . . . . . . 272,044
100,000 St. Lucie County, Florida Pollution
Control Revenue
4.200%, 01/01/26 . . . . . . . . . . . . . . . . 100,000
----------------
372,044
----------------
GEORGIA - 3.97%
250,000 State of Georgia, Series A, G.O.
6.100%, 03/01/05 . . . . . . . . . . . . . . . . 274,375
200,000 State of Georgia, Series D, G.O.
6.700%, 08/01/09 . . . . . . . . . . . . . . . . 236,110
----------------
510,485
----------------
ILLINOIS - 4.10%
250,000 Chicago, Illinois Metropolitan Water
Reclamation, G.O.
6.600%, 01/01/02 . . . . . . . . . . . . . . . . 269,220
250,000 State of Illinois, G.O.
5.150%, 09/01/02
Insured: FGIC. . . . . . . . . . . . . . . . . . 257,682
----------------
526,902
----------------
MICHIGAN - 6.51%
250,000 Lanse Creuse Public Schools
5.000%, 05/01/03 . . . . . . . . . . . . . . . . 257,122
300,000 Clarkston Community Schools
5.000%, 05/01/06 . . . . . . . . . . . . . . . . 307,554
260,000 Utica Community Schools
5.375%, 05/01/04 . . . . . . . . . . . . . . . . 272,407
----------------
837,083
----------------
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
MINNESOTA - 3.49%
$ 200,000 Shakopee Independent School District, G.O.
4.500%, 02/01/06 . . . . . . . . . . . . . . . . $ 199,212
245,000 St. Paul Housing Finance Board Revenue
5.050%, 11/01/07 . . . . . . . . . . . . . . . . 250,456
----------------
449,668
----------------
NEVADA - 3.00%
350,000 Clark County, Nevada School District, G.O.
6.400%, 06/15/06
Insured: FGIC. . . . . . . . . . . . . . . . . . 386,319
----------------
NEW JERSEY - 6.92%
295,000 Camden County
Municipal Utilities Authority Revenue
6.000%, 07/15/04 . . . . . . . . . . . . . . . . 319,210
350,000 State of New Jersey Transportation
Trust Fund Revenue, Series A
Escrowed to Maturity
5.200%, 12/15/00
Insured: AMBAC . . . . . . . . . . . . . . . . . 360,070
200,000 State of New Jersey, Series D, G.O.
5.500%, 02/15/04 . . . . . . . . . . . . . . . . 211,650
----------------
890,930
----------------
NEW YORK - 6.00%
250,000 Municipal Assistance Corporation
4.500%, 07/01/01 . . . . . . . . . . . . . . . . 251,895
250,000 New York City Transitional Finance
Authority Revenue
5.500%, 08/15/08 . . . . . . . . . . . . . . . . 264,063
250,000 New York State Dormitory Authority
Revenue, Series C
5.100%, 05/15/03 . . . . . . . . . . . . . . . . 256,297
----------------
772,255
----------------
OHIO - 1.60%
200,000 Ohio State Public Facilities Commission
(Higher Education), Series II-A
5.200%, 05/01/01
Insured: AMBAC . . . . . . . . . . . . . . . . . 205,474
----------------
OKLAHOMA - 2.80%
350,000 Tulsa, Oklahoma Metropolitan Utilities
Authority Revenue
5.500%, 07/01/00 . . . . . . . . . . . . . . . . 359,979
----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
OREGON - 2.10%
$ 250,000 Portland, Oregon Series A, G.O.
7.000%, 06/01/01 . . . . . . . . . . . . . . . . $ 270,375
----------------
PENNSYLVANIA - 1.58%
200,000 Commonwealth of Pennsylvania, G.O.
5.250%, 05/15/99
Insured: FGIC. . . . . . . . . . . . . . . . . . 203,002
----------------
PUERTO RICO - 3.42%
400,000 Commonwealth of Puerto Rico,
Series A, G.O.
6.500%, 07/01/03
Insured: MBIA. . . . . . . . . . . . . . . . . . 440,372
----------------
RHODE ISLAND - 2.27%
275,000 State of Rhode Island, Series A, G.O.
6.000%, 06/15/02
Insured: FGIC. . . . . . . . . . . . . . . . . . 291,789
----------------
TEXAS - 13.04%
375,000 Arlington Independent School District
Refunding, G.O.
5.400%, 02/15/99 . . . . . . . . . . . . . . . . 379,759
200,000 Humble Independent School District
Refunding, G.O.
5.500%, 02/15/10 . . . . . . . . . . . . . . . . 212,386
200,000 Round Rock Independent School District
Refunding, G.O.
4.700%, 08/01/09 . . . . . . . . . . . . . . . . 198,366
210,000 Tarrant County Health Facilities
Development Corp.
Health System Revenue, Series A
5.500%, 02/15/05 . . . . . . . . . . . . . . . . 220,901
200,000 Texas State Public Finance Authority
Series A, G.O.
5.600%, 10/01/02 . . . . . . . . . . . . . . . . 210,232
450,000 Texas State Water Development Board, G.O.
Escrowed to Maturity
5.000%, 08/01/99 . . . . . . . . . . . . . . . . 456,502
----------------
1,678,146
----------------
<CAPTION>
Market
Par Value Value
- --------- -----
<C> <S> <C>
UTAH - 8.51%
$ 300,000 Intermountain Power Agency
Power Supply Revenue
6.250%, 07/01/07 . . . . . . . . . . . . . . . . $ 334,530
200,000 Jordan School District, Series A, G.O.
5.250%, 06/15/00 . . . . . . . . . . . . . . . . 204,614
350,000 Tooele County, Utah Hazardous Waste
Treatment Revenue
5.700%, 11/01/26 . . . . . . . . . . . . . . . . 348,922
200,000 Utah State Building Ownership Authority
Lease Revenue, Series A
5.125%, 05/15/03 . . . . . . . . . . . . . . . . 206,488
----------------
1,094,554
----------------
VIRGINIA - 6.03%
250,000 Henrico County, Virginia
Industrial Redevelopment
Authority Revenue
5.300%, 12/01/11 . . . . . . . . . . . . . . . . 260,375
250,000 Virginia State Housing Development Authority
Commonwealth Mortgage, Series H
4.750%, 07/01/07 . . . . . . . . . . . . . . . . 250,908
250,000 Virginia State Public School
Authority Revenue
5.500%, 08/01/03 . . . . . . . . . . . . . . . . 265,128
----------------
776,411
----------------
WASHINGTON - 3.94%
475,000 King County, Washington, Series A, G.O.
5.800%, 01/01/04 . . . . . . . . . . . . . . . . 507,476
----------------
WISCONSIN - 4.41%
300,000 Wisconsin Housing & Economic Development
Authority Home Ownership Revenue
Series A
5.375%, 09/01/17 . . . . . . . . . . . . . . . . 299,439
250,000 State of Wisconsin, Series A, G.O.
5.750%, 05/01/04 . . . . . . . . . . . . . . . . 267,363
----------------
566,802
----------------
TOTAL MUNICIPAL SECURITIES . . . . . . . . . . . 12,448,283
(Cost $12,183,820) ----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST MUNICIPAL BOND FUND
SCHEDULE OF INVESTMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Value
- ------ -----
<C> <S> <C>
INVESTMENT COMPANIES - 3.73%
267,919 Goldman Sachs Tax Exempt Fund . . . . . . . . . $ 267,919
212,531 Provident Munifund . . . . . . . . . . . . . . . 212,531
----------------
TOTAL INVESTMENT COMPANIES . . . . . . . . . . . 480,450
(Cost $480,450) ----------------
TOTAL INVESTMENTS - 100.48%. . . . . . . . . . . . . . . . . . 12,928,733
(Cost $12,664,270)* ----------------
LIABILITIES NET OF CASH AND OTHER ASSETS - (0.48%) . . . . . . (61,736)
----------------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . . . . . . . $ 12,866,997
----------------
----------------
</TABLE>
- --------------------
* Aggregate cost for Federal income tax purposes is $12,664,270.
<TABLE>
<S> <C>
Gross unrealized appreciation $ 286,175
Gross unrealized (depreciation) (21,712)
----------
Net unrealized appreciation $ 264,463
----------
----------
</TABLE>
AMBAC American Municipal Board Assurance Corp.
FGIC Federal Guaranty Insurance Corp.
G.O. General Obligation
IDA Industrial Development Authority
MBIA Municipal Bond Insurance Association
<TABLE>
<S> <C>
PORTFOLIO COMPOSITION (Moody's Ratings)
Investment Companies 4%
Rated Corporate Notes and Bonds:
Aaa 51%
Aa 31%
A 8%
Baa 3%
NR 3%
-----
100%
-----
-----
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST MONEY MARKET FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amortized
Par Value Cost
- --------- ----
<C> <S> <C>
COMMERCIAL PAPER - 84.46%
$ 2,600,000 Heller Financial, Inc.
5.754%, 05/01/98 . . . . . . . . . . . . . . . . $ 2,600,000
3,900,000 Sears Roebuck Acceptance Corp.
5.587%, 05/01/98 . . . . . . . . . . . . . . . . 3,900,000
4,000,000 Northern Trust Co.
5.291%, 05/04/98 (A) . . . . . . . . . . . . . . 3,998,167
10,000,000 BankAmerica Corp.
6.150%, 05/05/98 . . . . . . . . . . . . . . . . 10,000,342
1,900,000 Transamerica Financial Group
5.556%, 05/05/98 (A) . . . . . . . . . . . . . . 1,898,835
3,022,000 Transamerica Finance Group
5.527%, 05/06/98 (A) . . . . . . . . . . . . . . 3,019,687
10,000,000 Norwest Financial, Inc.
5.556%, 05/07/98 . . . . . . . . . . . . . . . . 10,000,000
6,000,000 General Electric Capital Corp.
5.568%, 05/08/98 . . . . . . . . . . . . . . . . 6,000,000
12,660,000 Toyota Motor Credit Corp.
0.000%, 05/08/98 (A) . . . . . . . . . . . . . . 12,646,412
2,500,000 Sears Roebuck Acceptance Corp.
5.581%, 05/11/98 . . . . . . . . . . . . . . . . 2,500,000
6,500,000 IBM Credit Corp.
5.518%, 05/11/98 . . . . . . . . . . . . . . . . 6,500,000
12,000,000 Pitney Bowes Credit Corp.
5.513%, 05/13/98 (A) . . . . . . . . . . . . . . 11,978,040
1,175,000 General Electric Capital Corp.
5.583%, 05/15/98 . . . . . . . . . . . . . . . . 1,175,000
2,500,000 Household Finance Corp.
5.570%, 05/15/98 . . . . . . . . . . . . . . . . 2,500,000
2,200,000 Sears Roebuck Acceptance Corp.
5.573%, 05/15/98 . . . . . . . . . . . . . . . . 2,200,000
1,200,000 General Electric Capital Corp.
5.577%, 05/18/98 . . . . . . . . . . . . . . . . 1,200,000
5,000,000 Bell Atlantic
5.528%, 05/19/98 (A) . . . . . . . . . . . . . . 4,986,225
3,000,000 General Motors Acceptance Corp.
5.537%, 05/19/98 . . . . . . . . . . . . . . . . 3,000,000
1,057,000 Transamerica Financial Group
5.543%, 05/19/98 (A) . . . . . . . . . . . . . . 1,054,083
5,000,000 Commercial Credit Co.
5.529%, 05/20/98 . . . . . . . . . . . . . . . . 5,000,000
6,000,000 IBM Credit Corp.
5.536%, 05/21/98 . . . . . . . . . . . . . . . . 6,000,000
3,000,000 Beneficial Corp. Int Bearing
5.509%, 05/21/98 . . . . . . . . . . . . . . . . 3,000,000
2,300,000 Associates Corp. of North America
5.547%, 05/22/98 . . . . . . . . . . . . . . . . 2,300,000
6,000,000 Associates Corp. N. A.
5.570%, 05/22/98 . . . . . . . . . . . . . . . . 6,000,000
<CAPTION>
Amortized
Par Value Cost
- --------- ----
<C> <S> <C>
COMMERCIAL PAPER (CONTINUED)
$ 3,400,000 Sears Roebuck Acceptance Corp.
5.563%, 05/26/98 . . . . . . . . . . . . . . . . $ 3,400,000
4,500,000 Household Finance Corp.
5.540%, 05/26/98 . . . . . . . . . . . . . . . . 4,500,000
6,700,000 Prudential Funding Corp.
5.541%, 05/27/98 . . . . . . . . . . . . . . . . 6,700,000
5,000,000 Transamerica Financial
5.548%, 05/28/98 (A) . . . . . . . . . . . . . . 4,979,338
4,000,000 American Express Credit Corp.
5.536%, 06/02/98 . . . . . . . . . . . . . . . . 4,000,000
5,000,000 Household Finance Corp.
5.534%, 06/03/98 . . . . . . . . . . . . . . . . 5,000,000
1,500,000 Trans America Financial
5.537%, 06/05/98 (A) . . . . . . . . . . . . . . 1,491,979
5,500,000 Chrysler Financial Corp.
5.558%, 06/12/98 (A) . . . . . . . . . . . . . . 5,464,644
1,500,000 Chrysler Financial Corp.
6.500%, 06/15/98 . . . . . . . . . . . . . . . . 1,501,183
2,300,000 American Express Credit Corp.
5.536%, 06/17/98 . . . . . . . . . . . . . . . . 2,300,000
2,500,000 General Motors Acceptance Corp.
5.529%, 06/19/98 . . . . . . . . . . . . . . . . 2,500,000
7,000,000 Commercial Credit Co.
5.540%, 06/22/98 . . . . . . . . . . . . . . . . 7,000,000
10,000,000 Coca Cola Co.
5.597%, 06/22/98 (A) . . . . . . . . . . . . . . 9,919,833
6,000,000 Corestates Bank
5.520%, 07/10/98 . . . . . . . . . . . . . . . . 6,000,000
6,000,000 Ford Motor Credit Co.
5.551%, 07/14/98 . . . . . . . . . . . . . . . . 6,000,000
2,000,000 Ford Motor Credit Co.
5.562%, 07/16/98 . . . . . . . . . . . . . . . . 2,000,000
4,000,000 Ford Motor Credit Co.
5.556%, 07/16/98 . . . . . . . . . . . . . . . . 4,000,000
7,000,000 American General Finance
5.565%, 07/22/98 . . . . . . . . . . . . . . . . 7,000,000
6,000,000 Corestates Bank
5.600%, 09/25/98 . . . . . . . . . . . . . . . . 6,000,000
----------------
TOTAL COMMERCIAL PAPER . . . . . . . . . . . . . 203,213,768
(Cost $203,213,768) ----------------
GIC WITHIN FUNDING AGREEMENT - 4.16%
10,000,000 Allstate Life Funding Agreement GIC
5.758%,12/01/98. . . . . . . . . . . . . . . . . 10,000,000
----------------
TOTAL GIC WITHIN FUNDING AGREEMENT . . . . . . . 10,000,000
(Cost $10,000,000) ----------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
ALLEGHANY FUNDS
CHICAGO TRUST MONEY MARKET FUND
SCHEDULE OF INVESTMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Amortized
Par Value Cost
- --------- ----
<C> <S> <C>
TIME DEPOSITS - 5.07%
$ 5,400,000 Canadian Imperial of Commerce
5.560%,05/01/98. . . . . . . . . . . . . . . . . $ 5,400,000
4,300,000 Canadian Imperial of Commerce
5.560%,05/29/98. . . . . . . . . . . . . . . . . 4,300,000
2,500,000 Canadian Imperial of Commerce
5.530%,07/20/98. . . . . . . . . . . . . . . . . 2,500,000
----------------
TOTAL TIME DEPOSITS. . . . . . . . . . . . . . . 12,200,000
(Cost $12,200,000) ----------------
REPURCHASE AGREEMENTS - 5.99%
14,401,000 J P Morgan
5.350%,dated 04/30/98 to be repurchased
on 05/01/98 at $14,403,140
(Collateralized by U.S. Treasury Note
6.3750%, due 04/30/99)
Total Par $14,598,000. . . . . . . . . . . . . . 14,401,000
----------------
TOTAL REPURCHASE AGREEMENT . . . . . . . . . . . 14,401,000
(Cost $14,401,000) ----------------
TOTAL INVESTMENTS - 99.68% . . . . . . . . . . . . . . . . . . 239,814,768
(Cost $239,814,768)* ----------------
NET OTHER ASSETS AND LIABILITIES - 0.32% . . . . . . . . . . . 777,165
----------------
NET ASSETS - 100.00% . . . . . . . . . . . . . . . . . . . . . $ 240,591,933
----------------
----------------
</TABLE>
- --------------------
(A) Annualized yield at time of purchase
* At April 30, 1998, cost is identical for book and Federal income tax
purposes.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
ALLEGHANY FUNDS
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHICAGO TRUST
MONTAG & CALDWELL GROWTH & INCOME CHICAGO TRUST CHICAGO TRUST
GROWTH FUND FUND TALON FUND BALANCED FUND
----------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Investments at cost. . . . . . . . . . . . . . . $ 1,054,534,406 $ 229,357,104 $ 27,761,023 $ 161,958,237
Repurchase agreements. . . . . . . . . . . . . . -- 8,823,000 -- 2,703,000
Net unrealized appreciation . . . . . . . . . . 324,066,354 116,411,960 4,283,327 49,364,728
--------------- -------------- ------------- -------------
Total investments at value . . . . . . . . . . . 1,378,600,760 354,592,064 32,044,350 214,025,965
Cash . . . . . . . . . . . . . . . . . . . . . . 10 -- 22 --
Receivables:
Dividends and interest . . . . . . . . . . . . . 1,108,576 59,676 29,848 1,185,993
Fund shares sold . . . . . . . . . . . . . . . . 3,717,826 221,059 100 275,000
Investments sold . . . . . . . . . . . . . . . . -- -- 483,647 --
Due from Advisor, net. . . . . . . . . . . . . . -- -- -- --
Deferred organization costs . . . . . . . . . . . 5,017 3,096 4,624 3,340
Prepaid Expenses . . . . . . . . . . . . . . . . . 16,990 6,074 1,233 3,091
--------------- -------------- ------------- -------------
Total assets. . . . . . . . . . . . . . . . 1,383,449,179 354,881,969 32,563,824 215,493,389
--------------- -------------- ------------- -------------
LIABILITIES:
Payables:
Bank overdraft . . . . . . . . . . . . . . . . . -- 1,560 -- 51,746
Dividend distribution. . . . . . . . . . . . . . -- -- -- --
Investments purchased. . . . . . . . . . . . . . 14,779,677 -- 1,887,663 --
Fund shares redeemed . . . . . . . . . . . . . . 5,178,790 144,634 10,002 24,942
Due to Advisor, net. . . . . . . . . . . . . . . 787,803 203,167 18,033 124,329
Distribution fee . . . . . . . . . . . . . . . . 148,408 142,864 11,654 192,837
Trustee fees . . . . . . . . . . . . . . . . . . 625 625 625 625
Accrued expenses . . . . . . . . . . . . . . . . . 285,402 56,474 12,798 66,009
--------------- -------------- ------------- -------------
Total liabilities . . . . . . . . . . . . . 21,180,705 549,324 1,940,775 460,488
--------------- -------------- ------------- -------------
NET ASSETS. . . . . . . . . . . . . . . . . . . . . . $ 1,362,268,474 $ 354,332,645 $ 30,623,049 $ 215,032,901
--------------- -------------- ------------- -------------
--------------- -------------- ------------- -------------
NET ASSETS CONSIST OF:
Capital paid-in . . . . . . . . . . . . . . . . . $ 1,011,878,933 $ 214,493,959 $ 25,578,542 $ 155,218,651
Accumulated undistributed (distribution
in excess of) net investment income (loss) . . . (853,902) (297,454) 33,390 540,989
Accumulated net realized gain (loss)
on investments . . . . . . . . . . . . . . . . . 27,177,089 23,724,180 727,790 9,908,533
Net unrealized appreciation
on investments . . . . . . . . . . . . . . . . . 324,066,354 116,411,960 4,283,327 49,364,728
--------------- -------------- ------------- -------------
TOTAL NET ASSETS . . . . . . . . . . . . . . . . . . $ 1,362,268,474 $ 354,332,645 $ 30,623,049 $ 215,032,901
--------------- -------------- ------------- -------------
--------------- -------------- ------------- -------------
SHARES OF BENEFICIAL INTEREST OUTSTANDING . . . . . . 50,103,882 15,701,939 2,005,173 18,215,489
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding). . . . . . . . . . $ (A) $ 22.57 $ 15.27 $ 11.80
--------------- -------------- ------------- -------------
--------------- -------------- ------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
<TABLE>
<CAPTION>
CHICAGO TRUST CHICAGO TRUST
MONTAG & CALDWELL CHICAGO TRUST MUNICIPAL BOND MONEY MARKET
BALANCED FUND BOND FUND FUND FUND
----------------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Investments at cost. . . . . . . . . . . . . . . $ 116,910,900 $ 130,003,917 $ 12,664,270 $ 225,413,768
Repurchase agreements. . . . . . . . . . . . . . -- 7,771,000 -- 14,401,000
Net unrealized appreciation . . . . . . . . . . 22,107,970 2,550,118 264,463 --
--------------- -------------- ------------- -------------
Total investments at value . . . . . . . . . . . 139,018,870 140,325,035 12,928,733 239,814,768
Cash . . . . . . . . . . . . . . . . . . . . . . 22 -- 74,821 699,669
Receivables:
Dividends and interest . . . . . . . . . . . . . 896,525 1,894,518 211,049 1,230,708
Fund shares sold . . . . . . . . . . . . . . . . 197,494 207,651 -- --
Investments sold . . . . . . . . . . . . . . . . -- 24,639 -- --
Due from Advisor, net. . . . . . . . . . . . . . -- -- 7,407 --
Deferred organization costs . . . . . . . . . . . 5,017 3,096 3,096 3,096
Prepaid Expenses . . . . . . . . . . . . . . . . . 1,942 2,322 258 4,524
--------------- -------------- ------------- -------------
Total assets. . . . . . . . . . . . . . . . 140,119,870 142,457,261 13,225,364 241,752,765
--------------- -------------- ------------- -------------
LIABILITIES:
Payables:
Bank overdraft . . . . . . . . . . . . . . . . . -- 136,871 -- --
Dividend distribution. . . . . . . . . . . . . . -- -- -- 1,061,688
Investments purchased. . . . . . . . . . . . . . 244,654 265,953 300,426 --
Fund shares redeemed . . . . . . . . . . . . . . 45,942 85,619 -- --
Due to Advisor, net. . . . . . . . . . . . . . . 85,847 42,830 -- 75,187
Distribution fee . . . . . . . . . . . . . . . . 4,582 174,777 50,569 --
Trustee fees . . . . . . . . . . . . . . . . . . 625 625 625 625
Accrued expenses . . . . . . . . . . . . . . . . . 67,714 23,721 6,747 23,332
--------------- -------------- ------------- -------------
Total liabilities . . . . . . . . . . . . . 449,364 730,396 358,367 1,160,832
--------------- -------------- ------------- -------------
NET ASSETS. . . . . . . . . . . . . . . . . . . . . . $ 139,670,506 $ 141,726,865 $ 12,866,997 $ 240,591,933
--------------- -------------- ------------- -------------
--------------- -------------- ------------- -------------
NET ASSETS CONSIST OF:
Capital paid-in . . . . . . . . . . . . . . . . . $ 114,473,183 $ 138,405,787 $ 12,660,144 $ 240,591,933
Accumulated undistributed (distribution
in excess of) net investment income (loss) . . . 303,205 339,161 22,620 --
Accumulated net realized gain (loss)
on investments . . . . . . . . . . . . . . . . . 2,786,148 431,799 (80,230) --
Net unrealized appreciation
on investments . . . . . . . . . . . . . . . . . 22,107,970 2,550,118 264,463 --
--------------- -------------- ------------- -------------
TOTAL NET ASSETS . . . . . . . . . . . . . . . . . . $ 139,670,506 $ 141,726,865 $ 12,866,997 $ 240,591,933
--------------- -------------- ------------- -------------
--------------- -------------- ------------- -------------
SHARES OF BENEFICIAL INTEREST OUTSTANDING . . . . . . 7,949,551 13,980,932 1,267,571 240,591,933
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding). . . . . . . . . . $ 17.57 $ 10.14 $ 10.15 $ 1.00
--------------- -------------- ------------- -------------
--------------- -------------- ------------- -------------
</TABLE>
(A) Montag & Caldwell Growth Fund Class N (Retail):
Net Asset Value, offering price and redemption price per share (Based on
net assets of $843,597,433 and 31,081,246 shares issued and outstanding)
$27.14
Montag & Caldwell Growth Fund Class I (Institutional):
Net Asset Value, offering price and redemption price per share (Based on
net assets of $518,671,041 and 19,022,636 shares issued and outstanding)
$27.27
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
ALLEGHANY FUNDS
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHICAGO TRUST
MONTAG & CALDWELL GROWTH & INCOME CHICAGO TRUST CHICAGO TRUST
GROWTH FUND FUND TALON FUND BALANCED FUND
----------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends. . . . . . . . . . . . . . . . . . . . . $ 3,513,382 $ 1,173,389 $ 83,632 $ 506,334
Interest . . . . . . . . . . . . . . . . . . . . . 1,192,970 401,461 214,679 2,955,841
------------- ------------- ------------- -------------
Total investment income. . . . . . . . . . . . . . 4,706,352 1,574,850 298,311 3,462,175
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees . . . . . . . . . . . . . 3,942,606 1,072,479 121,090 696,670
Distribution expenses. . . . . . . . . . . . . . . 800,433 383,028 37,841 248,811
Transfer agent fees. . . . . . . . . . . . . . . . 145,474 39,616 17,655 10,779
Administration fees. . . . . . . . . . . . . . . . 301,029 90,125 8,914 58,592
Accounting fees. . . . . . . . . . . . . . . . . . 715 1,046 987 5,763
Registration expenses. . . . . . . . . . . . . . . 165,297 23,550 11,328 13,937
Custodian fees . . . . . . . . . . . . . . . . . . 12,677 9,987 6,666 11,567
Professional fees. . . . . . . . . . . . . . . . . 29,776 14,547 8,174 12,416
Amortization of organization costs . . . . . . . . 1,653 2,478 1,653 695
Report to shareholder expense. . . . . . . . . . . 27,090 7,758 716 4,961
Trustees fees. . . . . . . . . . . . . . . . . . . 1,797 1,797 1,797 1,797
Other expenses . . . . . . . . . . . . . . . . . . 131,707 36,826 2,785 28,252
------------- ------------- ------------- -------------
Total expenses . . . . . . . . . . . . . . . . . 5,560,254 1,683,237 219,606 1,094,240
------------- ------------- ------------- -------------
Expenses reimbursed. . . . . . . . . . . . . . . -- -- (22,595) --
------------- ------------- ------------- -------------
Net expenses . . . . . . . . . . . . . . . . . . 5,560,254 1,683,237 197,011 1,094,240
------------- ------------- ------------- -------------
NET INVESTMENT INCOME (LOSS). . . . . . . . . . . . . (853,902) (108,387) 101,300 2,367,935
------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS :
Net realized gain on investments (including
a net realized loss on option transactions of
($96,126) in the Talon Fund) . . . . . . . . . . . 27,275,289 23,724,702 883,465 9,909,956
Net change in unrealized appreciation
(depreciation) on investments . . . . . . . . . 176,925,518 39,375,707 154,821 15,766,549
------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . 204,200,807 63,100,409 1,038,286 25,676,505
------------- ------------- ------------- -------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS . . . . . . . . . . . . . . $ 203,346,905 $ 62,992,022 $ 1,139,586 $ 28,044,440
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
<TABLE>
<CAPTION>
CHICAGO TRUST CHICAGO TRUST
MONTAG & CALDWELL CHICAGO TRUST MUNICIPAL BOND MONEY MARKET
BALANCED FUND BOND FUND FUND FUND
----------------- ------------- -------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends. . . . . . . . . . . . . . . . . . . . . $ 229,397 $ -- $ -- $ --
Interest . . . . . . . . . . . . . . . . . . . . . 1,412,613 4,527,566 297,615 7,116,190
------------- ------------- ------------- -------------
Total investment income. . . . . . . . . . . . . . 1,642,010 4,527,566 297,615 7,116,190
------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fees . . . . . . . . . . . . . 415,654 366,318 37,735 501,524
Distribution Expenses. . . . . . . . . . . . . . . 138,551 166,508 12,746 --
Transfer agent fees. . . . . . . . . . . . . . . . 14,816 11,907 10,052 16,193
Administration fees. . . . . . . . . . . . . . . . 32,549 39,223 3,705 73,872
Accounting fees. . . . . . . . . . . . . . . . . . 3,145 4,854 1,578 3,671
Registration expenses. . . . . . . . . . . . . . . 24,617 18,295 7,647 13,317
Custodian fees . . . . . . . . . . . . . . . . . . 9,850 10,925 5,386 10,714
Professional fees. . . . . . . . . . . . . . . . . 10,281 10,840 8,218 14,128
Amortization of organization costs . . . . . . . . 1,653 2,478 2,478 2,478
Report to shareholder expense. . . . . . . . . . . 2,880 3,304 308 6,625
Trustees fees. . . . . . . . . . . . . . . . . . . 1,797 1,797 1,797 1,797
Other expenses . . . . . . . . . . . . . . . . . . 33,922 12,540 517 16,335
------------- ------------- ------------- -------------
Total Expenses . . . . . . . . . . . . . . . . . 689,715 648,989 92,167 660,654
------------- ------------- ------------- -------------
Expenses reimbursed. . . . . . . . . . . . . . . -- (116,618) (52,819) (24,451)
------------- ------------- ------------- -------------
Net expenses . . . . . . . . . . . . . . . . . . 689,715 532,371 39,348 636,203
------------- ------------- ------------- -------------
NET INVESTMENT INCOME (LOSS). . . . . . . . . . . . . 952,295 3,995,195 258,267 6,479,987
------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS :
Net realized gain on investments (including
a net realized loss on option transactions of
($96,126) in the Talon Fund) . . . . . . . . . . . 2,819,314 457,088 10,880 --
Net change in unrealized appreciation
(depreciation) on investments. . . . . . . . . . 10,563,907 (282,110) (55,026) --
------------- ------------- ------------- -------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENT. . . . . . . . . . . . . 13,383,221 174,978 (44,146) --
------------- ------------- ------------- -------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS . . . . . . . . . . . . . . $14,335,516 $4,170,173 $214,121 $6,479,987
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
25
<PAGE>
ALLEGHANY FUNDS
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONTAG & CALDWELL GROWTH FUND CHICAGO TRUST GROWTH & INCOME FUND
-------------------------------- ----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD . . . . . . . . . . $ 748,418,166 $ 218,649,895 $ 274,607,907 $ 205,133,317
-------------- -------------- -------------- --------------
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) . . . . . . . . . . . (853,902) (1,327,085) (108,387) 1,018,470
Net realized gain on investments sold
and purchased options transactions . . . . . . . 27,275,289 8,570,687 23,724,702 19,177,699
Net change in unrealized appreciation
on investments and assets
and liabilities in purchased options . . . . . . 176,925,518 114,427,550 39,375,707 33,416,450
-------------- -------------- -------------- --------------
Net increase in net assets
from operations. . . . . . . . . . . . . . . . . 203,346,905 121,671,152 62,992,022 53,612,619
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREOWNERS FROM:
Net investment income:
Retail Class . . . . . . . . . . . . . . . . . . -- -- (189,067) (1,152,026)
Institutional Class. . . . . . . . . . . . . . . -- (26,630) -- --
Net realized gain on investments:
Retail Class . . . . . . . . . . . . . . . . . . (4,750,066) (1,466,613) (19,149,159) (4,334,020)
Institutional Class. . . . . . . . . . . . . . . (2,772,360) (412,803) -- --
-------------- -------------- -------------- --------------
Total distributions. . . . . . . . . . . . . . . (7,522,426) (1,906,046) (19,338,226) (5,486,046)
-------------- -------------- -------------- --------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Retail Class . . . . . . . . . . . . . . . . . . 325,972,580 339,687,434 39,621,122 50,803,893
Institutional Class. . . . . . . . . . . . . . . 219,014,110 228,296,239 -- --
Issued to shareowners in reinvestment of distributions:
Retail Class . . . . . . . . . . . . . . . . . . 4,458,131 1,404,998 19,000,002 5,404,887
Institutional Class. . . . . . . . . . . . . . . 2,260,596 396,515 -- --
Cost of shares repurchased:
Retail Class . . . . . . . . . . . . . . . . . . (88,096,944) (115,055,486) (22,550,182) (34,860,763)
Institutional Class. . . . . . . . . . . . . . . (45,582,644) (44,726,535) -- --
-------------- -------------- -------------- --------------
Net increase from capital
share transactions. . . . . . . . . . . . . 418,025,829 410,003,165 36,070,942 21,348,017
-------------- -------------- -------------- --------------
Total increase in net assets. . . . . . . . . 613,850,308 529,768,271 79,724,738 69,474,590
-------------- -------------- -------------- --------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A). . . . $1,362,268,474 $ 748,418,166 $ 354,332,645 $ 274,607,907
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
(A) Undistributed (distribution in excess of)
net investment income (loss). . . . . . . . . . . $ (853,902) $ -- $ (297,454) $ --
-------------- -------------- -------------- --------------
OTHER INFORMATION:
SHARE TRANSACTIONS:
Retail Class:
Sold. . . . . . . . . . . . . . . . . . . . . . . 13,291,394 16,692,907 1,874,516 2,806,114
Issued to shareholders in reinvestment
of distributions. . . . . . . . . . . . . . . . 197,788 79,785 1,006,991 326,567
Repurchased . . . . . . . . . . . . . . . . . . . (3,550,047) (5,364,133) (1,097,224) (1,902,988)
Institutional Class:
Sold. . . . . . . . . . . . . . . . . . . . . . . 8,962,760 10,833,116 -- --
Issued to shareholders in reinvestment
of distributions. . . . . . . . . . . . . . . . 99,938 22,316 -- --
Repurchased . . . . . . . . . . . . . . . . . . . . (1,857,023) (2,106,489) -- --
-------------- -------------- -------------- --------------
Net increase in shares outstanding. . . . . . . . 17,144,810 20,157,502 1,784,283 1,229,693
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
<TABLE>
<CAPTION>
CHICAGO TRUST TALON FUND CHICAGO TRUST BALANCED FUND
-------------------------------- ----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD. . . . . . . . . . . $ 28,459,583 $ 17,417,675 $ 187,993,337 $ 156,703,443
-------------- -------------- -------------- --------------
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss). . . . . . . . . . . . 101,300 162,715 2,367,935 4,843,563
Net realized gain on investments sold
and purchased options transactions. . . . . . . . 883,465 4,497,850 9,909,956 11,378,927
Net change in unrealized appreciation
on investments and assets
and liabilities in purchased options. . . . . . . 154,821 1,618,377 15,766,549 15,462,457
-------------- -------------- -------------- --------------
Net increase in net assets
from operations . . . . . . . . . . . . . . . . . 1,139,586 6,278,942 28,044,440 31,684,947
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREOWNERS FROM:
Net investment income:
Retail Class. . . . . . . . . . . . . . . . . . . (105,163) (134,407) (2,451,582) (4,764,936)
Institutional Class . . . . . . . . . . . . . . . -- -- -- --
Net realized gain on investments:
Retail Class. . . . . . . . . . . . . . . . . . . (4,653,085) (1,458,660) (11,401,639) (2,253,139)
Institutional Class . . . . . . . . . . . . . . . -- -- -- --
-------------- -------------- -------------- --------------
Total distributions . . . . . . . . . . . . . . . (4,758,248) (1,593,067) (13,853,221) (7,018,075)
-------------- -------------- -------------- --------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Retail Class. . . . . . . . . . . . . . . . . . . 6,136,793 6,345,104 17,356,662 28,395,564
Institutional Class . . . . . . . . . . . . . . . -- -- -- --
Issued to shareowners in reinvestment of distributions:
Retail Class. . . . . . . . . . . . . . . . . . . 4,701,233 1,577,255 13,847,940 7,017,789
Institutional Class . . . . . . . . . . . . . . . -- -- -- --
Cost of shares repurchased:
Retail Class. . . . . . . . . . . . . . . . . . . (5,055,898) (1,566,326) (18,356,257) (28,790,331)
Institutional Class . . . . . . . . . . . . . . . -- -- -- --
-------------- -------------- -------------- --------------
Net increase from capital
share transactions . . . . . . . . . . . . . 5,782,128 6,356,033 12,848,345 6,623,022
-------------- -------------- -------------- --------------
Total increase in net assets . . . . . . . . . 2,163,466 11,041,908 27,039,564 31,289,894
-------------- -------------- -------------- --------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) . . . . $ 30,623,049 $ 28,459,583 $ 215,032,901 $ 187,993,337
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
(A) Undistributed (distribution in excess of)
net investment income (loss) . . . . . . . . . . . $ 33,390 $ 37,253 $ 540,989 $ 624,636
-------------- -------------- -------------- --------------
OTHER INFORMATION:
SHARE TRANSACTIONS:
Retail Class:
Sold. . . . . . . . . . . . . . . . . . . . . . . 396,506 397,032 1,559,397 2,757,711
Issued to shareholders in reinvestment
of distributions. . . . . . . . . . . . . . . . 314,892 107,919 1,304,119 699,716
Repurchased . . . . . . . . . . . . . . . . . . . (323,359) (97,875) (1,647,635) (2,774,505)
Institutional Class:
Sold. . . . . . . . . . . . . . . . . . . . . . . -- -- -- --
Issued to shareholders in reinvestment
of distributions. . . . . . . . . . . . . . . . -- -- -- --
Repurchased . . . . . . . . . . . . . . . . . . . -- -- -- --
-------------- -------------- -------------- --------------
Net increase in shares outstanding. . . . . . . 388,039 407,076 1,215,881 682,922
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
ALLEGHANY FUNDS
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONTAG & CALDWELL BALANCED FUND CHICAGO TRUST BOND FUND
--------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD. . . . . . . . . . . $ 82,719,053 $ 31,472,671 $ 120,532,177 $ 79,210,728
-------------- -------------- -------------- --------------
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income . . . . . . . . . . . . . . . 952,295 952,704 3,995,195 6,243,541
Net realized gain (loss) on investments sold . . . 2,819,314 2,102,297 457,088 (36,729)
Net change in unrealized appreciation
(depreciation) of investments . . . . . . . . . . 10,563,907 7,581,239 (282,110) 2,754,254
-------------- -------------- -------------- --------------
Net increase in net assets
from operations . . . . . . . . . . . . . . . . . 14,335,516 10,636,240 4,170,173 8,961,066
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREOWNERS FROM:
Net investment income . . . . . . . . . . . . . . . (834,653) (837,377) (4,108,631) (6,043,358)
Net realized gain on investments. . . . . . . . . . (2,095,351) (2,702,590) -- (16,748)
-------------- -------------- -------------- --------------
Total distributions . . . . . . . . . . . . . . . (2,930,004) (3,539,967) (4,108,631) (6,060,106)
-------------- -------------- -------------- --------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares . . . . . . . . . 55,627,337 58,631,470 29,613,557 46,817,358
Issued to shareowners in
reinvestment of distributions . . . . . . . . . . 2,828,759 3,490,623 3,185,970 4,797,389
Cost of shares repurchased. . . . . . . . . . . . . (12,910,155) (17,971,984) (11,666,381) (13,194,258)
-------------- -------------- -------------- --------------
Net increase from
capital share transactions. . . . . . . . . . . 45,545,941 44,150,109 21,133,146 38,420,489
-------------- -------------- -------------- --------------
Total increase in net assets. . . . . . . . . . . 56,951,453 51,246,382 21,194,688 41,321,449
-------------- -------------- -------------- --------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) . . . . $ 139,670,506 $ 82,719,053 $ 141,726,865 $ 120,532,177
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
(A) Undistributed net investment income. . . . . . . . $ 303,205 $ 185,563 $ 339,161 $ 452,597
-------------- -------------- -------------- --------------
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold. . . . . . . . . . . . . . . . . . . . . . . . 3,371,266 3,939,135 2,944,089 4,734,805
Issued to shareholders in reinvestment
of distributions. . . . . . . . . . . . . . . . . 178,894 255,726 290,206 485,679
Repurchased . . . . . . . . . . . . . . . . . . . . (768,407) (1,229,194) (1,147,665) (1,334,065)
-------------- -------------- -------------- --------------
Net increase in shares outstanding. . . . . . . . 2,781,753 2,965,667 2,086,630 3,886,419
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
<TABLE>
<CAPTION>
CHICAGO TRUST MUNICIPAL BOND FUND CHICAGO TRUST MONEY MARKET FUND
--------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
---------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD. . . . . . . . . . . $ 12,379,208 $ 11,186,162 $ 238,551,474 $ 226,535,616
-------------- -------------- -------------- --------------
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income . . . . . . . . . . . . . . . 258,267 430,579 6,479,987 12,701,010
Net realized gain (loss) on investments sold . . . 10,880 6,147 -- --
Net change in unrealized appreciation
(depreciation) of investments . . . . . . . . . . (55,026) 140,720 -- --
-------------- -------------- -------------- --------------
Net increase in net assets
from operations . . . . . . . . . . . . . . . . . 214,121 577,446 6,479,987 12,701,010
-------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREOWNERS FROM:
Net investment income . . . . . . . . . . . . . . . (263,103) (426,993) (6,479,987) (12,701,010)
Net realized gain on investments. . . . . . . . . . -- -- -- --
-------------- -------------- -------------- --------------
Total distributions . . . . . . . . . . . . . . . (263,103) (426,993) (6,479,987) (12,701,010)
-------------- -------------- -------------- --------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares . . . . . . . . . 866,702 1,375,126 284,113,157 569,551,234
Issued to shareowners in
reinvestment of distributions . . . . . . . . . . 17,396 21,748 165,513 434,377
Cost of shares repurchased. . . . . . . . . . . . . (347,327) (354,281) (282,238,211) (557,969,753)
-------------- -------------- -------------- --------------
Net increase from
capital share transactions. . . . . . . . . . . 536,771 1,042,593 2,040,459 12,015,858
-------------- -------------- -------------- --------------
Total increase in net assets. . . . . . . . . . . 487,789 1,193,046 2,040,459 12,015,858
-------------- -------------- -------------- --------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) . . . . $ 12,866,997 $ 12,379,208 $ 240,591,933 $ 238,551,474
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
(A) Undistributed net investment income. . . . . . . . $ 22,620 $ 27,456 $ -- $ --
-------------- -------------- -------------- --------------
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold. . . . . . . . . . . . . . . . . . . . . . . . 84,563 135,835 284,113,157 569,551,234
Issued to shareholders in reinvestment
of distributions. . . . . . . . . . . . . . . . . 1,702 2,159 165,513 434,377
Repurchased . . . . . . . . . . . . . . . . . . . . (34,028) (35,025) (282,238,211) (557,969,753)
-------------- -------------- -------------- --------------
Net increase in shares outstanding. . . . . . . . 52,237 102,969 2,040,459 12,015,858
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
29
<PAGE>
ALLEGHANY FUNDS
FINANCIAL HIGHLIGHTS APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONTAG & CALDWELL GROWTH FUND
-----------------------------------------------------------------
RETAIL CLASS
-----------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR PERIOD
04/30/98 ENDED ENDED ENDED
(UNAUDITED) 10/31/97 10/31/96 10/31/95(a)
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . $ 22.68 $ 17.08 $ 13.16 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss). . . . . . . . . . . . (0.03) (0.05) -- 0.02
Net realized and unrealized gain
on investments . . . . . . . . . . . . . . . . . 4.70 5.79 3.93 3.16
---------- ---------- ---------- ----------
Total from investment operations. . . . . . . . . 4.67 5.74 3.93 3.18
---------- ---------- ---------- ----------
LESS DISTRIBUTIONS:
Distributions from and in excess
of net investment income. . . . . . . . . . . . . -- -- (0.01) (0.02)
Distributions from net realized
gain on investments . . . . . . . . . . . . . . . (0.21) (0.14) -- --
---------- ---------- ---------- ----------
Total distributions . . . . . . . . . . . . . . . (0.21) (0.14) (0.01) (0.02)
---------- ---------- ---------- ----------
Net increase in net asset value. . . . . . . . . . . . . 4.46 5.60 3.92 3.16
---------- ---------- ---------- ----------
Net Asset Value, End of Period . . . . . . . . . . . . . $ 27.14 $ 22.68 $ 17.08 $ 13.16
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
TOTAL RETURN(1). . . . . . . . . . . . . . . . . . . . . 20.79% 33.82% 29.91% 31.87%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) . . . . . . . . . . $ 843,597 $ 479,557 $ 166,243 $ 40,355
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Advisor(2) . . . . . . . . . . . . . . . . . . . 1.20% 1.24% 1.32% 1.87%
After reimbursement of expenses
by Advisor(2) . . . . . . . . . . . . . . . . . . . 1.20% 1.23% 1.28% 1.30%
Ratios of net investment income to average net assets:
Before reimbursement of expenses
by Advisor(2) . . . . . . . . . . . . . . . . . . . (0.28)% (0.38)% (0.10)% (0.36)%
After reimbursement of expenses
by Advisor(2) . . . . . . . . . . . . . . . . . . . (0.28)% (0.37)% (0.06)% 0.20%
Portfolio Turnover(1). . . . . . . . . . . . . . . . . . 25.65% 18.65% 26.36% 34.46%
Average Commission Rate Paid . . . . . . . . . . . . . . $ 0.0558 $ 0.0592 $ 0.0639 N/R
</TABLE>
- --------------------------------------------------------
(1) Not annualized.
(2) Annualized.
(a) Montag & Caldwell Growth Fund Retail Class commenced investment
operations on November 2, 1994.
N/R: Not required.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
ALLEGHANY FUNDS
FINANCIAL HIGHLIGHTS APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONTAG & CALDWELL GROWTH FUND
-----------------------------------------------
INSTITUTIONAL CLASS
-----------------------------------------------
SIX MONTHS
ENDED YEAR PERIOD
04/30/98 ENDED ENDED
(UNAUDITED) 10/31/97 10/31/96(a)
----------- ---------- -----------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . $ 22.75 $ 17.08 $ 15.59
INCOME FROM INVESTMENT OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . -- -- 0.02
Net realized and unrealized gain
on investments. . . . . . . . . . . . . . . . . . . 4.73 5.81 1.49
---------- ---------- ----------
Total from investment operations. . . . . . . . . . 4.73 5.81 1.51
---------- ---------- ----------
LESS DISTRIBUTIONS:
Distributions from and in excess
of net investment income. . . . . . . . . . . . . . -- -- (0.02)
Distributions from net realized
gain on investments . . . . . . . . . . . . . . . . (0.21) (0.14) --
---------- ---------- ----------
Total distributions . . . . . . . . . . . . . . . . (0.21) (0.14) (0.02)
---------- ---------- ----------
Net increase in net asset value. . . . . . . . . . . . . 4.52 5.67 1.49
---------- ---------- ----------
Net Asset Value, End of Period . . . . . . . . . . . . . $ 27.27 $ 22.75 $ 17.08
---------- ---------- ----------
---------- ---------- ----------
TOTAL RETURN(1). . . . . . . . . . . . . . . . . . . . . 20.99% 34.26% 9.67%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) . . . . . . . . . . $ 518,671 $ 268,861 $ 52,407
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Advisor(2) . . . . . . . . . . . . . . . . . . . . 0.90% 0.93% 0.98%
After reimbursement of expenses
by Advisor(2) . . . . . . . . . . . . . . . . . . . . 0.90% 0.93% 0.98%
Ratios of net investment income to average net assets:
Before reimbursement of expenses
by Advisor(2) . . . . . . . . . . . . . . . . . . . . 0.02% (0.07)% 0.17%
After reimbursement of expenses
by Advisor(2) . . . . . . . . . . . . . . . . . . . . 0.02% (0.06)% 0.17%
Portfolio Turnover(1). . . . . . . . . . . . . . . . . . 25.65% 18.65% 26.36%
Average Commission Rate Paid . . . . . . . . . . . . . . $ 0.0558 $ 0.0592 $ 0.0639
</TABLE>
- --------------
(1) Not annualized.
(2) Annualized.
(a) Montag & Caldwell Growth Fund Institutional Class commenced investment
operations on June 28, 1996.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
ALLEGHANY FUNDS
FINANCIAL HIGHLIGHTS APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHICAGO TRUST GROWTH & INCOME FUND
-----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR PERIOD
04/30/98 ENDED ENDED ENDED ENDED
(UNAUDITED) 10/31/97 10/31/96 10/31/95 10/31/94(a)
----------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . $ 19.73 $ 16.17 $ 12.90 $ 10.11 $ 10.00
--------- -------- -------- -------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss). . . . . . . . . . . (0.01) 0.08 0.11 0.09 0.07
Net realized and unrealized gain on investments . 4.23 3.91 3.34 2.79 0.10
--------- -------- -------- -------- ---------
Total from investment operations . . . . . . . 4.22 3.99 3.45 2.88 0.17
--------- -------- -------- -------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess of net
investment income . . . . . . . . . . . . . . . (0.01) (0.09) (0.11) (0.09) (0.06)
Distributions from net realized gain on investments (1.37) (0.34) (0.07) -- --
--------- -------- -------- -------- ---------
Total distributions. . . . . . . . . . . . . . (1.38) (0.43) (0.18) (0.09) (0.06)
--------- -------- -------- -------- ---------
Net increase in net asset value . . . . . . . . . . . 2.84 3.56 3.27 2.79 0.11
--------- -------- -------- -------- ---------
Net Asset Value, End of Period . . . . . . . . . . . . $ 22.57 $ 19.73 $ 16.17 $ 12.90 $ 10.11
--------- -------- -------- -------- ---------
--------- -------- -------- -------- ---------
TOTAL RETURN(1). . . . . . . . . . . . . . . . . . . . 22.76% 25.16% 26.98% 28.66% 1.73%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) . . . . . . . . . $ 354,333 $274,608 $205,133 $172,296 $ 12,282
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor(2). . . 1.10% 1.12% 1.15% 1.50% 2.21%
After reimbursement of expenses by Advisor(2) . . . 1.10% 1.07%(3) 1.00% 1.09%(4) 1.20%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor(2). . . (0.07)% 0.36% 0.62% 0.33% (0.15)%
After reimbursement of expenses by Advisor(2) . . . (0.07)% 0.41% 0.77% 0.74% 0.86%
Portfolio Turnover(1). . . . . . . . . . . . . . . . . 24.09% 30.58% 25.48% 9.00% 37.01%
Average Commission Rate Paid . . . . . . . . . . . . . $ 0.0525 $ 0.0530 $ 0.0571 N/R N/R
</TABLE>
- -----------------------------------------------------
(1) Not annualized.
(2) Annualized.
(3) The Advisor's expense reimbursement level, which affects the net
expense ratio, changed from 1.00% to 1.10% on February 28, 1997.
(4) The Advisor's expense reimbursement level, which affects the net
expense ratio, changed from 1.20% to 1.00% on September 21, 1995.
(a) Chicago Trust Growth & Income Fund commenced investment operations on
December 13, 1993.
N/R: Not required.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
ALLEGHANY FUNDS
FINANCIAL HIGHLIGHTS APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHICAGO TRUST TALON FUND
-----------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR PERIOD
04/30/98 ENDED ENDED ENDED ENDED
(UNAUDITED) 10/31/97 10/31/96 10/31/95 10/31/94(a)
----------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . $ 17.60 $ 14.39 $ 12.07 $ 10.25 $ 10.00
--------- -------- -------- -------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income . . . . . . . . . . . . . . 0.05 0.11 0.04 0.09 0.02
Net realized and unrealized gain on investments
and options . . . . . . . . . . . . . . . . . . . 0.51 4.38 3.01 1.84 0.23
--------- -------- -------- -------- ---------
Total from investment operations . . . . . . 0.56 4.49 3.05 1.93 0.25
--------- -------- -------- -------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess of net
investment income . . . . . . . . . . . . . . . (0.06) (0.09) (0.03) (0.11) --
Distributions from net realized gain on investments (2.83) (1.19) (0.70) -- --
--------- -------- -------- -------- ---------
Total distributions . . . . . . . . . . . . (2.89) (1.28) (0.73) (0.11) --
--------- -------- -------- -------- ---------
Net increase (decrease) in net asset value . . . . . . (2.33) 3.21 2.32 1.82 0.25
--------- -------- -------- -------- ---------
Net Asset Value, End of Period . . . . . . . . . . . . $ 15.27 $ 17.60 $ 14.39 $ 12.07 $ 10.25
--------- -------- -------- -------- ---------
--------- -------- -------- -------- ---------
TOTAL RETURN(1). . . . . . . . . . . . . . . . . . . . 3.58% 33.47% 26.51% 18.92% 2.50%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) . . . . . . . . . $ 30,623 $ 28,460 $ 17,418 $ 10,538 $ 4,355
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor(2). . . 1.45% 1.67% 1.98% 3.04% 7.82%
After reimbursement of expenses by Advisor(2) . . . 1.30% 1.30% 1.30% 1.30% 1.30%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor(2). . . 0.52% 0.34% (0.38)% (0.97)% (4.13)%
After reimbursement of expenses by Advisor(2) . . . 0.67% 0.71% 0.30% 0.77% 2.39%
Portfolio Turnover(1) . . . . . . . . . . . . . . . . 28.36% 112.72% 126.83% 229.43% 33.66%
Average Commission Rate Paid . . . . . . . . . . . . . $ 0.0599 $ 0.0591 $ 0.0612 N/R N/R
</TABLE>
- -----------------------------------------------------
(1) Not annualized.
(2) Annualized.
(a) Chicago Trust Talon Fund commenced investment operations on
September 19, 1994.
N/R: Not required.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
ALLEGHANY FUNDS
FINANCIAL HIGHLIGHTS APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHICAGO TRUST BALANCED FUND
--------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR PERIOD
04/30/98 ENDED ENDED ENDED
(UNAUDITED) 10/31/97 10/31/96 10/31/95(a)
--------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . $ 11.06 $ 9.60 $ 8.43 $ 8.34
--------- -------- -------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income . . . . . . . . . . . . . . . 0.13 0.28 0.27 0.03
Net realized and unrealized gain on
investments . . . . . . . . . . . . . . . . . . . 1.43 1.60 1.16 0.06
--------- -------- -------- ---------
Total from investment operations . . . . . . . 1.56 1.88 1.43 0.09
--------- -------- -------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess of net
investment income . . . . . . . . . . . . . . . (0.14) (0.28) (0.26) --
Distributions from net realized gain on
investments . . . . . . . . . . . . . . . . . . (0.68) (0.14) -- --
--------- -------- -------- ---------
Total distributions . . . . . . . . . . . . . (0.82) (0.42) (0.26) --
--------- -------- -------- ---------
Net increase in net asset value . . . . . . . . . . . 0.74 1.46 1.17 0.09
--------- -------- -------- ---------
Net Asset Value, End of Period . . . . . . . . . . . . $ 11.80 $ 11.06 $ 9.60 $ 8.43
--------- -------- -------- ---------
--------- -------- -------- ---------
TOTAL RETURN(1). . . . . . . . . . . . . . . . . . . . 14.99% 20.10% 17.21% 1.08%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) . . . . . . . . . $ 215,033 $187,993 $156,703 $ 152,820
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor(2). . . 1.10% 1.13% 1.17% 1.19%
After reimbursement of expenses by Advisor(2) . . . 1.10% 1.07%(3) 1.00% 1.00%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor(2). . . 2.38% 2.70% 2.79% 2.56%
After reimbursement of expenses by Advisor(2) . . . 2.38% 2.76% 2.96% 2.73%
Portfolio Turnover(1) . . . . . . . . . . . . . . . . 24.84% 34.69% 34.29% 0.72%
Average Commission Rate Paid . . . . . . . . . . . . . $ 0.0510 $ 0.0576 $0.0596 N/R
</TABLE>
- -----------------------------------------------------
(1) Not annualized.
(2) Annualized.
(3) The Advisor's expense reimbursement level, which affects the net
expense ratio, changed from 1.00% to 1.10% on February 28, 1997.
(a) Chicago Trust Balanced Fund (formerly the Chicago Trust Asset
Allocation Fund) commenced investment operations on September 21,
1995.
N/R: Not required.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
ALLEGHANY FUNDS
FINANCIAL HIGHLIGHTS APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONTAG & CALDWELL BALANCED FUND
--------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR PERIOD
04/30/98 ENDED ENDED ENDED
(UNAUDITED) 10/31/97 10/31/96 10/31/95(a)
--------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . $ 16.01 $ 14.29 $ 12.12 $ 10.00
--------- -------- -------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income . . . . . . . . . . . . . . 0.13 0.25 0.27 0.26
Net realized and unrealized gain on
investments . . . . . . . . . . . . . . . . . . 1.94 2.93 2.17 2.09
--------- -------- -------- ---------
Total from investment operations . . . . . . 2.07 3.18 2.44 2.35
--------- -------- -------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess of net
investment income . . . . . . . . . . . . . . . (0.13) (0.25) (0.27) (0.23)
Distributions from net realized gain on
investments . . . . . . . . . . . . . . . . . . (0.38) (1.21) -- --
--------- -------- -------- ---------
Total distributions . . . . . . . . . . . . (0.51) (1.46) (0.27) (0.23)
--------- -------- -------- ---------
Net increase in net asset value . . . . . . . . . . . 1.56 1.72 2.17 2.12
--------- -------- -------- ---------
Net Asset Value, End of Period . . . . . . . . . . . . $ 17.57 $ 16.01 $ 14.29 $ 12.12
--------- -------- -------- ---------
--------- -------- -------- ---------
TOTAL RETURN(1). . . . . . . . . . . . . . . . . . . . 13.34% 24.26% 20.37% 23.75%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) . . . . . . . . . $ 139,671 $ 82,719 $ 31,473 $ 21,908
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor(2). . . 1.25% 1.33% 1.58% 2.50%
After reimbursement of expenses by Advisor(2) . . . 1.25% 1.25% 1.25% 1.25%
Ratios of net investment income
to average net assets:
Before reimbursement of expenses by Advisor(2). . . 1.72% 1.70% 1.83% 1.38%
After reimbursement of expenses by Advisor(2) . . . 1.72% 1.78% 2.16% 2.63%
Portfolio Turnover(1). . . . . . . . . . . . . . . . . 35.23% 28.13% 43.58% 27.33%
Average Commission Rate Paid . . . . . . . . . . . . . $ 0.0564 $ 0.0591 $ 0.0644 N/R
</TABLE>
- -----------------------------------------------------
(1) Not annualized.
(2) Annualized.
(a) Montag & Caldwell Balanced Fund commenced investment operations on
November 2, 1994.
N/R: Not required.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
ALLEGHANY FUNDS
FINANCIAL HIGHLIGHTS APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHICAGO TRUST BOND FUND
------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR PERIOD
04/30/98 ENDED ENDED ENDED ENDED
(UNAUDITED) 10/31/97 10/31/96 10/31/95 10/31/94(a)
----------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . . . $ 10.13 $ 9.89 $ 9.94 $ 9.21 $ 10.00
-------- -------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . 0.31 0.61 0.60 0.60 0.50
Net realized and unrealized gain (loss) on
investments . . . . . . . . . . . . . . . . . . . . . . 0.01 0.23 (0.05) 0.73 (0.82)
-------- -------- ------- ------- -------
Total from investment operations . . . . . . . . . . . 0.32 0.84 0.55 1.33 (0.32)
-------- -------- ------- ------- -------
LESS DISTRIBUTIONS FROM AND IN EXCESS
OF NET INVESTMENT INCOME . . . . . . . . . . . . . . . . (0.31) (0.60) (0.60) (0.60) (0.47)
-------- -------- ------- ------- -------
Total distributions . . . . . . . . . . . . . . . . . (0.31) (0.60) (0.60) (0.60) (0.47)
-------- -------- ------- ------- -------
Net increase (decrease) in net asset value . . . . . . . . . 0.01 0.24 (0.05) 0.73 (0.79)
-------- -------- ------- ------- -------
Net Asset Value, End of Period . . . . . . . . . . . . . . . $ 10.14 $ 10.13 $ 9.89 $ 9.94 $ 9.21
-------- -------- ------- ------- -------
TOTAL RETURN(1). . . . . . . . . . . . . . . . . . . . . . . 3.23% 8.84% 5.76% 14.89% (3.23)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) . . . . . . . . . . . . $141,727 $120,532 $79,211 $70,490 $12,546
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor(2) . . . . . . 0.97% 1.02% 1.10% 1.54% 2.02%
After reimbursement of expenses by Advisor(2). . . . . . . 0.80% 0.80% 0.80% 0.80% 0.80%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor(2) . . . . . . 5.82% 6.02% 5.89% 5.78% 4.83%
After reimbursement of expenses by Advisor(2). . . . . . . 5.99% 6.24% 6.19% 6.52% 6.05%
Portfolio Turnover(1) . . . . . . . . . . . . . . . . . . . 21.71% 17.76% 41.75% 68.24% 20.73%
</TABLE>
- ---------------
(1) Not annualized.
(2) Annualized.
(a) Chicago Trust Bond Fund commenced investment operations on December 13,
1993.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
ALLEGHANY FUNDS
FINANCIAL HIGHLIGHTS APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHICAGO TRUST MUNICIPAL BOND FUND
------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR PERIOD
04/30/98 ENDED ENDED ENDED ENDED
(UNAUDITED) 10/31/97 10/31/96 10/31/95 10/31/94(a)
----------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . . . $ 10.19 $ 10.06 $ 10.08 $ 9.56 $ 10.00
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . 0.23 0.38 0.38 0.35 0.27
Net realized and unrealized gain (loss) on
investments . . . . . . . . . . . . . . . . . . . . . . (0.06) 0.12 (0.02) 0.52 (0.46)
------- ------- ------- ------- -------
Total from investment operations . . . . . . . . . . . 0.17 0.50 0.36 0.87 (0.19)
------- ------- ------- ------- -------
LESS DISTRIBUTIONS FROM AND IN EXCESS
OF NET INVESTMENT INCOME . . . . . . . . . . . . . . . . (0.21) (0.37) (0.38) (0.35) (0.25)
Distributions from net realized gain on investments. . . -- -- -- -- --
------- ------- ------- ------- -------
Total distributions . . . . . . . . . . . . . . . . . (0.21) (0.37) (0.38) (0.35) (0.25)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value . . . . . . . . . (0.04) 0.13 (0.02) 0.52 (0.44)
------- ------- ------- ------- -------
Net Asset Value, End of Period . . . . . . . . . . . . . . . $ 10.15 $ 10.19 $ 10.06 $ 10.08 $ 9.56
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL RETURN(1). . . . . . . . . . . . . . . . . . . . . . . 1.70% 5.13% 3.59% 9.29% (1.92)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) . . . . . . . . . . . . $12,867 $12,379 $11,186 $11,679 $10,462
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor(2) . . . . . . 1.47% 1.64% 1.53% 2.16% 2.09%
After reimbursement of expenses by Advisor(2). . . . . . . 0.63%(3) 0.90% 0.90% 0.90% 0.90%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor(2) . . . . . . 3.27% 3.00% 3.11% 2.37% 1.90%
After reimbursement of expenses by Advisor(2). . . . . . . 4.11% 3.74% 3.74% 3.63% 3.09%
Portfolio Turnover(1) . . . . . . . . . . . . . . . . . . . 12.00% 16.19% 27.47% 42.81% 14.85%
</TABLE>
- ---------------
(1) Not annualized.
(2) Annualized.
(3) The Advisor's expense reimbursement level, which affects the net expense
ratio, changed from 0.90% to 0.10% on February 27, 1998.
(a) Chicago Trust Municipal Bond Fund commenced investment operations on
December 13, 1993.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
ALLEGHANY FUNDS
FINANCIAL HIGHLIGHTS APRIL 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CHICAGO TRUST MONEY MARKET FUND
------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR PERIOD
04/30/98 ENDED ENDED ENDED ENDED
(UNAUDITED) 10/31/97 10/31/96 10/31/95 10/31/94(a)
----------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income . . . . . . . . . . . . . . . . . 0.03 0.05 0.05 0.05 0.03
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS FROM NET INVESTMENT INCOME . . . . . . (0.03) (0.05) (0.05) (0.05) (0.03)
-------- -------- -------- -------- --------
Net Asset Value, End of Period . . . . . . . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN(1). . . . . . . . . . . . . . . . . . . . . . . 2.59% 5.15% 5.14% 5.56% 3.20%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) . . . . . . . . . . . . $240,671 $238,551 $226,536 $206,075 $122,929
Ratios of expenses to average net assets:
Before reimbursement of expenses by Advisor(2) . . . . . . 0.53% 0.56% 0.59% 0.63% 0.64%
After reimbursement of expenses by Advisor(2). . . . . . . 0.51%(4) 0.50% 0.50% 0.43%(3) 0.40%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Advisor(2) . . . . . . 5.15% 5.00% 4.93% 5.24% 3.49%
After reimbursement of expenses by Advisor(2). . . . . . . 5.17% 5.06% 5.02% 5.44% 3.73%
</TABLE>
- ---------------
(1) Not annualized.
(2) Annualized.
(3) The Advisor's expense reimbursement level, which affects the net expense
ratio, changed from 0.40% to 0.50% on July 12, 1995.
(4) As of February 27, 1998, the Advisor is no longer waiving fees or
reimbursing expenses.
(a) Chicago Trust Money Market Fund commenced investment operations on
December 14, 1993.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
ALLEGHANY FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
NOTE (A) SIGNIFICANT ACCOUNTING POLICIES: The AlleghanyFunds (formerly
CT&T Funds) (the "Company") operate as a series company currently issuing eight
series of shares of beneficial interest: Montag & Caldwell Growth Fund (the
"Growth Fund"), Chicago Trust Growth & Income Fund (the "Growth & Income Fund"),
Chicago Trust Talon Fund (the "Talon Fund"), Chicago Trust Balanced Fund
(formerly Chicago Trust Asset Allocation Fund) (the "CT Balanced Fund"), Montag
& Caldwell Balanced Fund (the "M&C Balanced Fund"), Chicago Trust Bond Fund (the
"Bond Fund"), Chicago Trust Municipal Bond Fund (the "Municipal Bond Fund"), and
Chicago Trust Money Market Fund (the "Money Market Fund") (each a "Fund" and
collectively, the "Funds"). The Company constitutes an open-end management
investment company which is registered under the Investment Company Act of 1940
as amended (the "Act"). The Company was organized as a Delaware business trust
on September 10, 1993.
The Growth Fund seeks long-term capital appreciation consistent with investments
primarily in a combination of equity, convertible, fixed income, and short-term
securities. Capital appreciation is emphasized, and generation of income is
secondary. Montag & Caldwell, Inc. is the Investment Advisor for the Fund, which
commenced investment operations on November 2, 1994. Effective June 28, 1996,
the Fund offered two classes of shares: Class I (Institutional) shares and Class
N (Retail) shares.
The Growth & Income Fund seeks long-term total return through a combination of
capital appreciation and current income. In seeking to achieve its investment
objective, the Fund invests primarily in common stocks, preferred stocks,
securities convertible into common stocks, and fixed income securities. The
Chicago Trust Company ("Chicago Trust") is the Investment Advisor for the Fund,
which commenced investment operations on December 13, 1993.
The Talon Fund seeks long-term total return through capital appreciation. The
Fund invests primarily in stocks of companies with capitalization levels
believed by Talon Asset Management, Inc. ("Talon") to have prospects for capital
appreciation. The Fund, which commenced investment operations on September 19,
1994, may also invest in preferred stock and debt securities, including those
which may be convertible into common stock. Chicago Trust is the Investment
Advisor for the Fund with Talon as Sub-Investment Advisor.
The CT Balanced Fund seeks growth of capital with current income through asset
allocation. The Fund seeks to achieve this objective by holding a varying
combination of generally two or more of the following investment categories:
common stocks (both dividend and non-dividend paying); preferred stocks;
convertible preferred stocks; fixed income securities, including bonds and bonds
convertible into common stocks; and short-term interest-bearing obligations.
Chicago Trust is the Investment Advisor for the Fund, which commenced investment
operations on September 21, 1995.
The M&C Balanced Fund seeks long-term total return through investment primarily
in a combination of equity, fixed income, and short-term securities. The
allocation between asset classes may vary over time in accordance with the
expected rates of return of each asset class; however, primary emphasis is
placed upon selection of particular investments as opposed to allocation of
assets. Montag & Caldwell, Inc. is the Investment Advisor for the Fund, which
commenced investment operations on November 2, 1994.
The Bond Fund seeks high current income consistent with what Chicago Trust
believes to be prudent risk of capital. The Fund primarily invests in a broad
range of bonds and other fixed income securities (bonds and debentures) with an
average weighted portfolio maturity between three and ten years. Chicago Trust
is the Investment Advisor for the Fund, which commenced investment operations on
December 13, 1993.
The Municipal Bond Fund seeks a high level of current interest income exempt
from Federal income taxes consistent with the conservation of capital. The Fund
seeks to achieve its objective by investing substantially all of its assets in a
diversified portfolio of municipal debt obligations. Chicago Trust is the
Investment Advisor for the Fund, which commenced investment operations on
December 13, 1993.
The Money Market Fund seeks to provide as high a level of current interest
income as is consistent with maintaining liquidity and stability of principal.
The Fund seeks to achieve its objective by investing in short-term, high
quality, U.S. dollar-denominated money market instruments. Chicago Trust is the
Investment Advisor for the Fund, which commenced investment operations on
December 14, 1993.
39
<PAGE>
ALLEGHANY FUNDS
NOTES TO FINANCIAL STATEMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
The following is a summary of the significant accounting policies consistently
followed by each Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
(1) SECURITY VALUATION: For the Growth Fund, the Growth & Income Fund, the
Talon Fund, the CT Balanced Fund and the M&C Balanced Fund, equity
securities and index options traded on a national exchange and
over-the-counter securities listed in the NASDAQ National Market System are
valued at the last reported sales price at the close of the respective
exchange. Securities for which there have been no sales on the valuation
date are valued at the mean of the last reported bid and asked prices on
their principal exchange. Over-the-counter securities not listed on the
NASDAQ National Market System are valued at the mean of the current bid and
asked prices. For the CT Balanced Fund, the M&C Balanced Fund, the Bond
Fund, and the Municipal Bond Fund, fixed income securities, except
short-term, are valued on the basis of prices provided by a pricing service
when such prices are believed by the Advisor to reflect the fair market
value of such securities. When fair market value quotations are not readily
available, securities and other assets are valued at fair value as
determined in good faith by the Board of Trustees. For all Funds,
short-term investments, that is, those with a remaining maturity of 60 days
or less, are valued at amortized cost, which approximates market value. For
the Money Market Fund, all securities are valued at amortized cost, which
approximates market value. Under the amortized cost method, discounts and
premiums are accreted and amortized ratably to maturity and are included in
interest income.
(2) REPURCHASE AGREEMENTS: Each Fund may enter into repurchase agreements
with financial institutions deemed to be credit worthy by the Fund's
Advisor, subject to the seller's agreement to repurchase and the Fund's
agreement to resell such securities at a mutually agreed upon price.
Securities purchased subject to repurchase agreements are deposited with
the Fund's custodian and, pursuant to the terms of the repurchase
agreement, must have an aggregate market value greater than or equal to the
repurchase price plus accrued interest at all times. If the value of the
underlying securities falls below the value of the repurchase price plus
accrued interest, the Fund will require the seller to deposit additional
collateral by the next business day. If the request for additional
collateral is not met, or the seller defaults on its repurchase obligation,
the Fund has the right to sell the underlying securities at market value
and may claim any resulting loss against the seller.
(3) DERIVATIVE FINANCIAL INSTRUMENTS: A derivative financial instrument
in very general terms refers to a security whose value is "derived" from
the value of an underlying asset, reference rate or index. A Fund has a
variety of reasons to use derivative instruments, such as to attempt to
protect the Fund against possible changes in the market value of its
portfolio and to manage the portfolio's effective yield, maturity and
duration. All of a Fund's portfolio holdings, including derivative
instruments, are marked to market each day with the change in value
reflected in the unrealized appreciation/depreciation on investments.
Upon disposition, a realized gain or loss is recognized accordingly,
except for exercised option contracts where the recognition of gain or
loss is postponed until the disposal of the security underlying the
option contract.
An option contract gives the buyer the right, but not the obligation to buy
(call) or sell (put) an underlying item at a fixed exercise price during a
specified period. These contracts are used by a Fund to manage the
portfolio's effective maturity and duration.
Transactions in purchased options for the Chicago Trust Talon Fund for the
six months ended April 30, 1998 were as follows:
<TABLE>
<CAPTION>
CONTRACTS PREMIUM
--------- ---------
<S> <C> <C>
Outstanding at October 31, 1997 . . . . . . . . . . . . . . . . . . . 50 $(120,125)
Options purchased (Net) . . . . . . . . . . . . . . . . . . . . . . . -- --
Options exercised or terminated in closing transactions (Net) . . . . (50) 120,125
Options expired (Net) . . . . . . . . . . . . . . . . . . . . . . . . -- --
--------- ---------
Outstanding at April 30, 1998 . . . . . . . . . . . . . . . . . . . . -- $ --
--------- ---------
</TABLE>
(4) MORTGAGE BACKED SECURITIES: The CT Balanced Fund, the M&C Balanced Fund
and the Bond Fund may invest in Mortgage Backed Securities (MBS),
representing interests in pools of mortgage loans. These securities provide
shareholders with payments consisting of both principal and interest as the
mortgages in the underlying mortgage pools are paid. Most of the securities
are guaranteed by federally sponsored agencies - Government National
Mortgage Association (GNMA), Federal National Mortgage
40
<PAGE>
ALLEGHANY FUNDS
NOTES TO FINANCIAL STATEMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC).
However, some securities may be issued by private, non-government
corporations. MBS issued by private agencies are not government
securities and are not directly guaranteed by any government agency.
They are secured by the underlying collateral of the private issuer.
Yields on privately issued MBS tend to be higher than those of
government backed issues. However, risk of loss due to default and
sensitivity to interest rate fluctuations are also higher.
The CT Balanced Fund, the M&C Balanced Fund and the Bond Fund may also
invest in Collateralized Mortgage Obligations (CMOs) and Real Estate
Mortgage Investment Conduits (REMICS). A CMO is a bond which is
collateralized by a pool of MBS, and a REMIC is similar in form to a CMO.
These MBS pools are divided into classes or tranches with each class having
its own characteristics. The different classes are retired in sequence as
the underlying mortgages are repaid. A Planned Amortization Class (PAC) is
a specific class of mortgages which over its life will generally have the
most stable cash flows and the lowest prepayment risk. Prepayment may
shorten the stated maturity of the CMO and can result in a loss of premium,
if any has been paid.
The CT Balanced Fund and the Bond Fund may utilize Interest Only (IO)
securities to increase the diversification of the portfolio and manage
risk. An Interest Only security is a class of MBS representing ownership in
the cash flows of the interest payments made from a specified pool of MBS.
The cash flow on this instrument decreases as the mortgage principal
balance is repaid by the borrower.
(5) INVESTMENT INCOME AND SECURITIES TRANSACTIONS: Dividend income is
recorded on the ex-dividend date. Interest income is accrued daily.
Securities transactions are accounted for on the date securities are
purchased or sold. The cost of securities sold is determined using the
first-in-first-out method.
(6) FEDERAL INCOME TAXES: The Funds have elected to be treated as
"regulated investment companies" under Sub-chapter M of the Internal
Revenue Code and to distribute substantially all of their respective net
taxable income. Accordingly, no provisions for federal income taxes have
been made in the accompanying financial statements. The Funds intend to
utilize provisions of the federal income tax laws which allow them to carry
a realized capital loss forward for eight years following the year of the
loss and offset such losses against any future realized capital gains. At
October 31, 1997, the losses amounted to $91,110 for the Municipal Bond
Fund and $25,289 for the Bond Fund, which will expire October 31, 2003 and
October 31, 2005, respectively.
Net realized gains or losses may differ for financial and tax reporting
purposes for the Talon Fund, the M&C Balanced Fund and the Growth Fund
primarily as a result of losses from wash sales which are not recognized
for tax purposes until the corresponding shares are sold and as a result of
gains or losses recognized for tax purposes on the mark-to-market of open
options transactions at October 31, 1997.
(7) DIVIDENDS AND DISTRIBUTIONS: Dividends and distributions to shareowners
are recorded on the ex-dividend date.
(8) ORGANIZATION COSTS: The Funds have reimbursed the Advisors for certain
costs incurred in connection with the Funds' and the Company's
organization. The costs are being amortized on a straight-line basis over
five years commencing on December 13, 1993 for the Growth & Income Fund,
Bond Fund and the Municipal Bond Fund; December 14, 1993 for the Money
Market Fund; September 19, 1994 for the Talon Fund; November 2, 1994 for
the Growth Fund and the M&C Balanced Fund; and September 21, 1995 for the
CT Balanced Fund.
(9) USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
NOTE (B) DIVIDENDS FROM NET INVESTMENT INCOME AND DISTRIBUTIONS OF CAPITAL
GAINS: With respect to the Growth Fund, the Growth & Income Fund, the Talon
Fund, the CT Balanced Fund and the M&C Balanced Fund, dividends from net
investment income are distributed quarterly and net realized gains from
investment transactions, if any, are distributed to shareowners annually. The
Bond Fund and the Municipal Bond Fund distribute their respective net investment
income to shareowners monthly and capital gains, if any,
41
<PAGE>
ALLEGHANY FUNDS
NOTES TO FINANCIAL STATEMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
are distributed annually. The Money Market Fund declares dividends daily from
its net investment income. The Money Market Fund's dividends are payable monthly
and are automatically reinvested in additional Fund shares, at the month-end net
asset value, for those shareowners that have elected the reinvestment option.
Differences in dividends per share between classes of the Growth Fund are due to
different class expenses. In January 1998, the Funds provided tax information to
shareowners for the 1997 calendar year.
Net investment income and realized gains and losses for federal income tax
purposes may differ from that reported on the financial statements because of
permanent book and tax basis differences. Distributions from net realized gains
for book purposes may include short-term capital gains, which are included as
ordinary income for tax purposes.
NOTE (C) SHARES OF BENEFICIAL INTEREST: Each Fund is authorized to issue an
unlimited number of shares of beneficial interest with no par value. At April
30, 1998, Chicago Trust and its affiliates owned 2,500 shares of the Growth &
Income Fund, 2,500 shares of the Bond Fund and 1,002,500 shares of the Municipal
Bond Fund.
NOTE (D) INVESTMENT TRANSACTIONS: Aggregate purchases and proceeds from sales of
investment securities (other than short-term investments) for the six months
ended April 30, 1998 were:
<TABLE>
<CAPTION>
AGGREGATE PROCEEDS FROM
PURCHASES SALES
------------- -------------
<S> <C> <C>
GROWTH FUND $ 602,671,234 $ 215,263,985
GROWTH & INCOME FUND 94,607,485 71,845,502
TALON FUND 9,872,486 7,289,690
CT BALANCED FUND 56,959,148 46,397,895
M&C BALANCED FUND 81,526,996 37,620,054
BOND FUND 43,946,426 27,467,498
MUNICIPAL BOND FUND 1,932,888 1,472,537
</TABLE>
NOTE (E) ADVISORY, ADMINISTRATION AND DISTRIBUTION SERVICES AGREEMENTS: Under
various Advisory Agreements with the Funds, each Advisor provides investment
advisory services to the Funds. The Funds will pay advisory fees at the
following annual percentage rates of the average daily net assets of each Fund:
0.80% on the first $800,000,000 of average daily net assets and 0.60% of average
daily net assets over $800,000,000 (effective February 27, 1998) for the Growth
Fund, 0.70% for the Growth & Income Fund, 0.80% for the Talon Fund, 0.70% for
the CT Balanced Fund, 0.75% for the M&C Balanced Fund, 0.55% for the Bond Fund,
0.60% for the Municipal Bond Fund and 0.40% for the Money Market Fund. These
fees are accrued daily and paid monthly. The Advisors have voluntarily
undertaken to reimburse the Growth Fund (Institutional Class and Retail Class),
the Growth & Income Fund, the Talon Fund, the CT Balanced Fund, the M&C Balanced
Fund, the Bond Fund, and the Municipal Bond Fund for operating expenses which
cause total expenses to exceed 0.98%, 1.30%, 1.10%, 1.30%, 1.10%, 1.25%, 0.80%,
and 0.10%, respectively. Effective February 27, 1998, the expense reimbursement
level for the Municipal Bond Fund changed from 0.90% to 0.10% and the Advisor
for the Money Market Fund will no longer waive fees or reimburse expenses.
Expense reimbursements may be terminated at the discretion of the Advisors. For
the six months ended April 30, 1998, the Advisors reimbursed expenses of $22,595
for the Talon Fund, $116,618 for the Bond Fund, $52,819 for the Municipal Bond
Fund and $24,451 for the Money Market Fund.
42
<PAGE>
ALLEGHANY FUNDS
NOTES TO FINANCIAL STATEMENTS - CONTINUED (UNAUDITED) APRIL 30, 1998
- --------------------------------------------------------------------------------
Effective June 1, 1997, First Data Investor Services Group, Inc. ("Investor
Services Group") replaced FPS Services, Inc. as sub-administrator of the Funds.
Chicago Trust is the Funds' Administrator. For services provided as the Funds'
Administrator, Chicago Trust receives the following fees, which are paid in
total to Investor Services Group.
<TABLE>
<CAPTION>
Administration Fees Custody Liaison Fees
------------------- --------------------
Fee (% of Funds' Aggregate Average Daily Net Assets Annual Fee Average Daily Net Assets
-------------------------- ------------------------ ---------- ------------------------
daily net assets) (per Fund) (per Fund)
----------------- ---------- ----------
<S> <C> <C> <C> <C>
0.060 up to $2 billion $10,000 up to $100 million
0.045 $2 billion to $3.5 billion $15,000 $100 million to $500 million
0.040 over $3.5 billion $20,000 over $500 million
</TABLE>
Effective June 1, 1997, First Data Distributors, Inc. Replaced FPS Broker
Services, Inc. as principal underwriter and distributor of the Funds' shares.
Pursuant to Rule 12b-1 adopted by the Securities and Exchange Commission
under the Act, the Growth Fund Retail Class, the Growth & Income Fund, the
Talon Fund, the CT Balanced Fund, the M&C Balanced Fund, the Bond Fund, and
the Municipal Bond Fund have adopted a Plan of Distribution (the "Plan"). The
Plan permits the participating Funds to pay certain expenses associated with
the distribution of their shares. Under the Plan, each Fund may pay actual
expenses not exceeding, on an annual basis, 0.25% (currently, Chicago Trust
Municipal Bond Fund's Rule 12b-1 fee is reduced to 0.10%) of each
participating Fund's average daily net assets. The Growth Fund Institutional
Class and the Money Market Fund do not have distribution plans.
For the six months ended April 30, 1998, the class specific expenses of the
Growth Fund were:
<TABLE>
<CAPTION>
CLASS N (RETAIL) CLASS I (INSTITUTIONAL)
<S> <C> <C>
Transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . $ 136,242 $ 9,232
Registration expenses . . . . . . . . . . . . . . . . . . . . . . . . 101,725 63,572
Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,023 7,391
Reports to shareowner expenses. . . . . . . . . . . . . . . . . . . . 17,182 9,908
</TABLE>
Certain officers and Trustees of the Funds are also officers and directors of
Chicago Trust. The Funds do not compensate its officers or affiliated Trustees.
Effective January 1, 1998, the Company pays each unaffiliated Trustee $2,000 per
Board of Trustees meeting attended and an annual retainer of $2,000.
43
<PAGE>
This page left blank intentionally.
<PAGE>
TRUSTEES
Leonard F. Amari*
Stuard D. Bilton, Chairman
Dorothea C. Gilliam
Gregory T. Mutz*
Nathan Shapiro*
*Unafilliated Trustee
ADVISORS
The Chicago Trust Company
171 North Clark Street
Chicago, IL 60601-3294
Montag & Caldwell, Inc.
3343 Peachtree Road, NE, Suite 1100
Atlanta, GA 30326-1022
SHAREOWNER
SERVICES
First Data Investor Services Group, Inc.
4400 Computer Drive
Westborough, MA 01581
DISTRIBUTOR
First Data Distributors, Inc.
4400 Computer Drive
Westborough, MA 01581
OFFICERS
Kenneth C. Anderson, President
David F. Seng, Senior Vice President
Gerald F. Dillenburg, Vice President,
Secretary and Treasurer
CUSTODIAN
Bankers Trust
One Bankers Trust Place
New York, NY 10001
LEGAL COUNSEL
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, IL 60606
AUDITOR
KPMG Peat Marwick LLP
303 East Wacker Drive
Chicago, IL 60601
[LOGO] ALLEGHANY FUNDS
Distributed by First Data Distributors, Inc., 4400 Computer Drive, Westborough,
Massachusetts 01581, 7/1/98
This report is submitted for general information of the shareowners of the
Funds. It is not authorized for distribution to prospective investors in the
Funds unless preceded or accompanied by an effective Prospectus which includes
details regarding the Fund's objectives, policies, expenses and other
information.
<PAGE>
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements
Included in Part A:
Not Applicable
Included in Part B:
Annual Report to Shareowners dated October 31, 1997.
Semi-Annual Report to Shareowners dated April 30, 1998.
(b) Exhibits (the number of each exhibit relates to the exhibit designation in
Form N-1A):
(1) Trust Instrument dated September 10, 1993--Incorporated herein by reference
to Registration Statement No. 33-68666 filed via EDGAR on April 16, 1996.
(2) Copies of existing By-Laws--Incorporated herein by reference to Exhibit No.
(2) to Registration Statement No. 33-68666 filed via EDGAR on
February 22, 1996.
(3) Copies of any voting trust agreement--Not Applicable.
(4) Copies of all instruments defining the rights of holders of the
securities--Not Applicable.
(5) Copies of all investment advisory contracts:
(a) Investment Advisory Agreements for CT&T Growth & Income Fund, CT&T
Intermediate Fixed Income Fund, CT&T Intermediate Municipal Bond Fund,
and CT&T Money Market Fund with Chicago Title and Trust Company, each
dated November 30, 1993--Incorporated herein by reference to Exhibit
No. (5)(a) to Registration Statement No. 33-68666 filed via EDGAR on
February 22, 1996.
Investment Advisory Agreements for CT&T Talon Fund with Chicago Title
and Trust Company, and Montag & Caldwell Growth Fund and Montag &
Caldwell Balanced Fund with Montag & Caldwell, Inc., each dated August
27, 1994--Incorporated herein by reference to Exhibit No. (5)(a) to
Registration Statement No. 33-68666 filed via EDGAR on February 22,
1996.
Investment Advisory Agreement for CT&T Balanced Fund (formerly known as
"CT&T Asset Allocation Fund") with Chicago Title and Trust Company,
dated March 15, 1995--Incorporated herein by reference to Exhibit No.
(5)(a) to Registration Statement No. 33-68666 filed via EDGAR on
February 22, 1996.
Amendments to Investment Advisory Agreements for each Series, each
dated December 21, 1995, reflecting name changes of Series and
Advisor--Incorporated herein by reference to Exhibit No. (5)(a) to
Registration Statement No. 33-68666 filed via EDGAR on February 22,
1996.
Amendments to Investment Advisory Agreements for Montag & Caldwell
Growth Fund and Montag & Caldwell Balanced Fund, each dated December
21, 1995--Incorporated herein by reference to Exhibit No. (5)(a) to
Registration Statement No. 33-68666 filed via EDGAR on April 16, 1996.
Investment Advisory Agreement for Alleghany/Chicago Trust SmallCap
Value Fund with Chicago Title and Trust Company*
Investment Advisory Agreement for Alleghany/Veredus Aggressive Growth
Fund with Veredus Asset Management LLC*
(b) Amended and Restated Sub-Investment Advisory Agreement for CT&T Talon
Fund with Talon Asset Management, Inc., dated December 21,
1995--Incorporated herein by reference to Exhibit No. 5(b) to
Registration Statement No. 33-68666 filed via EDGAR on February 27,
1997.
(c) Amended and Restated Guaranty Agreement dated December 23, 1996,
between Chicago Title and Trust Company and CT&T Funds--Incorporated
herein by reference to Exhibit No. 5(c) to Registration Statement No.
33-68666 filed via EDGAR on February 27, 1998.
(d) Investment Advisory Assignment dated October 30, 1995, between and
among Chicago Title and Trust Company, The Chicago Trust Company, and
CT&T Funds--Incorporated herein by reference to Exhibit No. (5)(d) to
Registration Statement No. 33-68666 filed via EDGAR on February 22,
1996.
(e) Master Services Agreement dated October 30, 1995, between Chicago Title
and Trust Company and certain of its subsidiaries--Incorporated herein
by reference to Exhibit No. (5)(e) to Registration Statement No.
33-68666 filed via EDGAR on February 22, 1996.
(6) Copies of each underwriting or distribution contract:
(a) Underwriting Agreement for all Funds with FPS Broker Services, Inc.,
dated November 30, 1993--Incorporated herein by reference to Exhibit
No. (6)(a) to Registration Statement No. 33-68666 filed via EDGAR on
February 22, 1996.
Amendment dated December 21, 1995 to Underwriting Agreement,
reflecting name changes to certain Series--Incorporated herein by
reference to Exhibit No. (6)(a) to Registration Statement No. 33-68666
filed via EDGAR on February 22, 1996.
Amendment dated June 13, 1996 to Underwriting Agreement, reflecting
creation of multiple class--Incorporated herein by reference to
Registration Statement No. 33-68666 filed via EDGAR on April 16, 1996.
(b) Underwriter Compensation Agreement for all Funds with FPS Broker
Services, Inc., dated November 30, 1993--Incorporated herein by
reference to Exhibit No. (6)(b) to Registration Statement No. 33-68666
filed via EDGAR on February 22, 1996.
Amendment dated December 21, 1995 to Underwriter Compensation
Agreement, reflecting name changes to certain Series--Incorporated
herein by reference to Exhibit No. (6)(a) to Registration Statement No.
33-68666 filed via EDGAR on February 22, 1996.
(c) Distribution Agreement dated June 1, 1997 between CT&T Funds and First
Data Distributors, Inc.--Incorporated herein by reference to Exhibit
No. 6(c) to Registration Statement No. 33-68666 filed via EDGAR on
February 27, 1998.
Amendment to Distribution Agreement between Alleghany Funds and First
Data Distributors, Inc.*
(7) Copies of all bonus, profit sharing, pension or other similar contracts--Not
Applicable.
(8) Copies of all custodian agreements:
(a) Custodian Agreement between Bankers Trust Company and CT&T Funds, dated
June 1, 1997--Incorporated herein by reference to Exhibit No. 8(a) to
Registration Statement No. 33-68666 filed via EDGAR on February 27,
1998.
Amendment to Custodian Agreement between Alleghany Funds and Bankers
Trust Company*
(b) Custody Administration and Agency Agreement for all CT&T Funds with FPS
Services, Inc., with respect to UMB Bank, N.A., dated December 8,
1994--Incorporated herein by reference to Exhibit (8)(b) to
Registration Statement No. 33-68666 filed via EDGAR on February 22,
1996.
Amendment dated December 21, 1995 to Custody Administration and Agency
Agreement, reflecting name changes to certain Series--Incorporated
herein by reference to Exhibit No. (8)(b) to Registration Statement
No. 33-68666 filed via EDGAR on February 22, 1996.
Amendment dated June 13, 1996 to Custody Administration and Agency
Agreement, reflecting creation of multiple class--Incorporated herein
by reference to Registration Statement No. 33-68666 filed via EDGAR on
April 16, 1996.
(9) Copies of all other material contracts not made in the ordinary course of
business which are to be performed:
(a)Transfer Agency and Services Agreement between CT&T Funds and First
Data Investor Services Group, Inc., dated June 1, 1997--Incorporated
herein by reference to Exhibit No. 9(a) to Registration Statement No.
33-68666 filed via EDGAR on February 27, 1998.
Amendment to Transfer Agency and Services Agreement between Alleghany
Funds and First Data Investor Services Group, Inc.*
(b) Administration Agreement between the Company and Chicago Title and
Trust Company, dated June 15, 1995--Incorporated herein by reference to
Exhibit No. (9)(b) to Registration Statement No. 33-68666 filed via
EDGAR on February 22, 1996.
Amendment dated December 21, 1995 to Administration Agreement,
reflecting name changes of certain Series and the
Administrator--Incorporated herein by reference to Exhibit No. (9)(b)
to Registration Statement No. 33-68666 filed via EDGAR on February 22,
1996.
Amendment dated June 13, 1996 to Administration Agreement, reflecting
creation of multiple class--Incorporated herein by reference to
Registration Statement No. 33-68666 filed via EDGAR on April 16, 1996.
Amendment to Administration Agreement between Alleghany Funds and
Chicago Title and Trust Company*
(c)Sub-Administration Agreement between First Data Investor Services
Group, Inc. and The Chicago Trust Company, dated June 1,
1997--Incorporated herein by reference to Exhibit No. 9(c) to
Registration Statement No. 33-68666 filed via EDGAR on February 27,
1998.
Amendment to Sub-Administration Agreement with Alleghany Funds and
First Data Investor Services Group, Inc.*
(d)Accounting Services Agreement between CT&T Funds and FPS Services,
Inc., dated November 30, 1993--Incorporated herein by reference to
Exhibit No. (9)(c) to Registration Statement No. 33-68666 filed via
EDGAR on February 22, 1996.
Amendment dated December 21, 1995 to Accounting Services Agreement,
reflecting name changes to certain Series--Incorporated herein by
reference to Exhibit No. (9)(c) to Registration Statement No. 33-68666
filed via EDGAR on February 22, 1996.
Amendment dated June 13, 1996 to Accounting Services Agreement,
reflecting creation of multiple class--Incorporated herein by Reference
to Registration Statement No. 33-68666 filed via EDGAR on April 16,
1996.
(10) Consent of Counsel--Not Applicable.
(11) Copies of any other opinions, appraisals or rulings.
(a) Consent of Independent Auditors*
(12) All financial statements omitted from Item 23--Not Applicable.
(13) Copies of any agreements or understandings made in consideration for
providing the initial capital between or among the Registrant--Not
Applicable.
(14) Copies of the model plan--Not Applicable.
(15) Copies of any plan or agreement entered into by Registrant pursuant to Rule
12b-1:
(a) Distribution and Service Plan for all Funds except Chicago Trust Money
Market Fund, with FPS Broker Services, Inc.--Incorporated herein by
reference to Exhibit No. (15)(a) to Registration Statement No. 33-68666
filed via EDGAR on February 22, 1996.
Amendment to Distribution and Service Plan dated December 21, 1995,
reflecting name changes to certain Series--Incorporated herein by
reference to Exhibit No. (15)(a) to Registration Statement No.
33-68666 filed via EDGAR on February 22, 1996.
(b) Servicing Agreement for Distribution Assistance and Shareholder
Administrative Support Services for all Funds except Money Market Fund,
with FPS Broker Services, Inc.--Incorporated herein by reference to
Exhibit No. (15)(b) to Registration Statement No. 33-68666 filed via
EDGAR on February 22, 1996.
Amendment to Servicing Agreement for Distribution Assistance and
Shareholder Administrative Support Services dated December 21, 1995,
reflecting name changes to certain Series--Incorporated herein by
reference to Exhibit No. (15)(b) to Registration Statement No. 33-68666
filed via EDGAR on February 22, 1996.
(c) Amended and Restated Distribution and Services Plan pursuant to
Rule 12b-1*
(16) Schedules for Computations of Performance Quotations--Incorporated herein
by reference to Registration Statement No. 33-68666 filed via EDGAR on
April 16, 1996.
(17) Electronic Filers--Financial Data Schedules*
(18) Amended Multiple Class Plan pursuant to Rule 18f-3*
Item 25. Persons Controlled by or under Common Control with Registrant:
None.
Item 26. Number of Holders of Securities as of August 1, 1998:
----------------------------------------------------- -------------
Montag & Caldwell Growth Fund Class N 10,592
----------------------------------------------------- -------------
----------------------------------------------------- -------------
Montag & Caldwell Growth Fund Class I 223
----------------------------------------------------- -------------
----------------------------------------------------- -------------
Chicago Trust Growth & Income Fund 2,889
----------------------------------------------------- -------------
----------------------------------------------------- -------------
Chicago Trust Talon Fund 1,121
----------------------------------------------------- -------------
----------------------------------------------------- -------------
Chicago Trust Balanced Fund 404
----------------------------------------------------- -------------
----------------------------------------------------- -------------
Montag & Caldwell Balanced Fund 1,116
----------------------------------------------------- -------------
----------------------------------------------------- -------------
Chicago Trust Bond Fund 572
----------------------------------------------------- -------------
----------------------------------------------------- -------------
Chicago Trust Municipal Bond Fund 104
----------------------------------------------------- -------------
----------------------------------------------------- -------------
Chicago Trust Money Market Fund 1,021
----------------------------------------------------- ----------
Item 27. Indemnification:
Section 10.2 of the Registrant's Trust Instrument provides as follows:
10.2 Indemnification. The Trust shall indemnify each of its
Trustees against all liabilities and expenses (including
amounts paid in satisfaction of judgments, in compromise, as
fines and penalties, and as counsel fees) reasonably incurred
by him in connection with the defense or disposition of any
action, suit or other proceeding, whether civil or criminal,
in which he may be involved or with which he may be
threatened, while as a Trustee or thereafter, by reason of his
being or having been such a Trustee except with respect to any
matter as to which he shall have been adjudicated to have
acted in bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties, provided that as to any
matter disposed of by a compromise payment by such person,
pursuant to a consent decree or otherwise, no indemnification
either for said payment or for any other expenses shall be
provided unless the Trust shall have received a written
opinion from independent legal counsel approved by the
Trustees to the effect that if either the matter of willful
misfeasance, gross negligence or reckless disregard of duty,
or the matter of bad faith had been adjudicated, it would in
the opinion of such counsel have been adjudicated in favor of
such person. The rights accruing to any person under these
provisions shall not exclude any other right to which he may
be lawfully entitled, provided that no person may satisfy any
right of indemnity or reimbursement hereunder except out of
the property of the Trust. The Trustees may make advance
payments in connection with the indemnification under this
Section 10.2, provided that the indemnified person shall have
given a written undertaking to reimburse the Trust in the
event it is subsequently determined that he is not entitled to
such indemnification.
The Trust shall indemnify of fires, and shall have the power
to indemnify representatives and employees of the Trust, to
the same extent that Trustees are entitled to indemnification
pursuant to this Section 10.2.
Insofar as indemnification for liability arising under the 1933 Act may be
permitted to trustees, officers and controlling persons of Registrant
pursuant to the foregoing provisions, or otherwise, Registrant has been
advised that in the opinion of the SEC such indemnification is against
public policy as expressed in that Act and is, therefore, enforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by Registrant of expenses incurred or paid by a trustee,
officer or controlling person of Registrant in the successful defense of
any action, suit or proceeding) is asserted by such trustee, officer or
controlling person in connection with the securities being registered,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in that Act and will be governed by the final
adjudication of such issue.
Section 10.3 of the Registrant's Trust Instrument, also provides for the
indemnification of shareholders of the Registrant. Section 10.3 states as
follows:
10.3 Shareholders. In case any Shareholder or former
Shareholder of any Series shall be held to be personally
liable solely by reason of his being or having been a
shareholder of such Series and not because of his acts or
omissions or for some other reason, the Shareholder or former
Shareholder (or his heirs, executors, administrators or other
legal representatives or, in the case of a corporation or
other entity, its corporate or other general successor) shall
be entitled out of the assets belonging to the applicable
Series to be held harmless from and indemnified against all
loss and expense arising from such liability. The Trust, on
behalf of the affected Series, shall, upon request by the
Shareholder, assume the defense of any claim made against the
Shareholder for any act or obligation of the Trust and satisfy
any judgment thereon from the assets of the Series.
In addition, Registrant currently has a trustees' and officers' liability
policy covering certain types of errors and omissions.
Item 28. Business and Other Connections of Advisors and Sub-Advisor:
The Chicago Trust Company conducts a general financial services business in
four areas. The institutional investment management group manages equity
and fixed income institutional assets in excess of $6.0 billion, primarily
in employee benefit plans, foundation accounts and insurance company
accounts. The employee benefits services group offers profit sharing plans,
matching savings plans, money purchase pensions and consulting services,
and has become one of the leading providers of 401 (k) salary deferral
plans to mid-sized companies. The personal trust and investment services
group provides investment management and trust and estate planning
primarily for accounts in the $500,000 to $10 million range. The real
estate trust services group provides the means whereby real estate can be
conveyed to a trustee while reserving to the beneficiaries the full
management and control of the property. This group also facilitates
tax-deferred exchanges of income-producing real property.
Montag & Caldwell's sole business is managing assets primarily for employee
benefit, endowment, charitable, and other institutional clients, as well as
high net worth individuals.
At Talon Asset Management, Mr. Terry Diamond is Chairman and a Director,
Mr. Alan R. Wilson is President and a Director, and Barbara Rumminger,
Secretary, are, respectively, Chairman and a Director, President and a
Director, and Secretary of Talon Securities, Inc., One North Franklin
Street, Chicago, Illinois, a registered broker dealer. Mr. Diamond is also
a director of Amli Realty Company, 125 South Wacker Drive, Chicago
Illinois, a private real estate investment company.
[Veredus Asset Management information will be filed by amendment]
The directors and officers of the Trust's Investment Advisors and Sub-Investment
Advisor are set forth below. To the knowledge of the Registrant, unless so
noted, none of these individuals is or has been at any time during the past two
fiscal years engaged in any other business, profession vocation or employment of
a substantial nature.
THE CHICAGO TRUST COMPANY
<TABLE>
<CAPTION>
<S> <C> <C>
- ---------------------------- -------------------------------- ------------------------------------------------------
NAME TITLE/POSITION OTHER BUSINESS
- ---------------------------- -------------------------------- ------------------------------------------------------
- ---------------------------- -------------------------------- ------------------------------------------------------
Richard P. Toft Director Director and Chairman, Chicago Title and Trust
Company; Director, Chairman and Chief Executive
Officer, Alleghany Asset Management, Inc.; Director
of Chicago Title Insurance Co., Director, The
Chicago Trust Company.
- ---------------------------- -------------------------------- ------------------------------------------------------
- ---------------------------- -------------------------------- ------------------------------------------------------
Allan P. Kirby, Jr. Director President, Liberty Square, Inc.; Director, Alleghany
Corporation; Director, Chicago Title and Trust
Company; Director, Chicago Title Insurance Company;
Director, Kirby Investments, Inc.; Director, The
Chicago Trust Company.
- ---------------------------- -------------------------------- ------------------------------------------------------
- ---------------------------- -------------------------------- ------------------------------------------------------
Anthony Kuklin Director Partner of Paul,
Weiss, Rifkind, Wharton &
Garrison; Director, Chicago
Title and Trust Company; Director,
Chicago Title Insurance Company;
Director, The Chicago Trust
Company.
- ---------------------------- -------------------------------- ------------------------------------------------------
<PAGE>
- ---------------------------- -------------------------------- ------------------------------------------------------
M. Leanne Lachman Director Managing Director, Schroder Real Estate Associates;
Director, Chicago Title and Trust Company; Director,
Chicago Title Insurance Company; Director, The
Chicago Trust Company.
- ---------------------------- -------------------------------- ------------------------------------------------------
<PAGE>
- ---------------------------- -------------------------------- ------------------------------------------------------
NAME TITLE/POSITION OTHER BUSINESS
- ---------------------------- -------------------------------- ------------------------------------------------------
- ---------------------------- -------------------------------- ------------------------------------------------------
Dana G. Leavitt Director President, Leavitt Management Company; Director,
Chicago Title and Trust Company; Director, Chicago
Title Insurance Company; Director, The Chicago Trust
Company.
- ---------------------------- -------------------------------- ------------------------------------------------------
- ---------------------------- -------------------------------- ------------------------------------------------------
Lawrence F. Levy Director Chairman, The Levy Organization; Director, Chicago
Title and Trust Company; Director, Chicago Title
Insurance Company; Director, The Chicago Trust
Company.
- ---------------------------- -------------------------------- ------------------------------------------------------
- ---------------------------- -------------------------------- ------------------------------------------------------
Robert Riley Director President and Chief Executive
Officer of Leggat McCall Properties;
Director, Chicago Title and Trust
Company; Director, Chicago Title
Insurance Company.
- ---------------------------- -------------------------------- ------------------------------------------------------
- ---------------------------- -------------------------------- ------------------------------------------------------
Steven Newman Director Chairman, President and Chief Executive Officer, URC
Holdings Corporation; Director, Chicago Title and
Trust Company; Director, Chicago Title Insurance
Company.
- ---------------------------- -------------------------------- ------------------------------------------------------
- ---------------------------- -------------------------------- ------------------------------------------------------
Margaret P. MacKimm Director Director, Woolworth Corporation; Director, E.I.
DuPont deNemours & Company; Director, Chicago Title
and Trust Company; Director, Chicago Title Insurance
Company.
- ---------------------------- -------------------------------- ------------------------------------------------------
- ---------------------------- -------------------------------- ------------------------------------------------------
Walter D. Scott Director Professor of Management, J.L. Kellogg Graduate
School of Management, Northwestern University;
Director, Chicago Title and Trust Company; Director,
Chicago Title Insurance Company.
- ---------------------------- -------------------------------- ------------------------------------------------------
- ---------------------------- -------------------------------- ------------------------------------------------------
Earl L. Neal Director Principal Attorney, Earl L. Neal and Associates;
Director, Chicago Title and Trust Company; Director,
Chicago Title Insurance Company.
- ---------------------------- -------------------------------- ------------------------------------------------------
- ---------------------------- -------------------------------- ------------------------------------------------------
John J. Rau Director President and Chief Executive Officer, Chicago Title
and Trust Company; Director, President and Chief
Executive Officer of Chicago Title Insurance Company
and Ticor Title Insurance Company; Director,
Chairman and President, Security Union Title
Insurance Company; Director, Ticor Title Guaranty
Company.
</TABLE>
- ---------------------------- -------------------------------- --------------
INSTITUTIONAL INVESTMENT GROUP:
- ---------------------------- -------------------------------- -------------
Charles F. Henderson Executive Vice President
and Chief Investment Officer
- ---------------------------- -------------------------------- ------------
- ---------------------------- -------------------------------- ------------
Carla V. Stracten Senior Vice President
- ---------------------------- -------------------------------- ------------
- ---------------------------- -------------------------------- ------------
Frederick W. Englmann Senior Vice President
- ---------------------------- -------------------------------- -------------
- ---------------------------- -------------------------------- -------------
David J. Cox Vice President
- ---------------------------- -------------------------------- -------------
Thomas J. Marthaler Vice President
- ---------------------------- -------------------------------- -------------
Lois A. Pasquale Vice President
- ---------------------------- -------------------------------- -------------
Bernard F. Myszkowski Vice President
- ---------------------------- -------------------------------- -------------
Jerold L. Stodden Vice President
- ---------------------------- -------------------------------- -------------
Nance Scinto Vice President
<PAGE>
- ---------------------------- -------------------------------- -------------
MUTUAL FUNDS:
- ---------------------------- -------------------------------- ---------------
- ---------------------------- -------------------------------- ----------------
Kenneth C. Anderson Senior Vice President
- ---------------------------- -------------------------------- ----------------
Stephen Ferrone Senior Vice President
- --------------------------- -------------------------------- ---------------
Gerald F. Dillenburg Vice President
OPERATIONS AND FINANCIAL PLANNING:
- ------------------------------------------------------------- ---------------
- ---------------------------- -------------------------------- ---------------
Skip Neuman Senior Vice President and
Chief Financial Officer
PERSONAL TRUST & INVESTMENT SERVICES:
- ------------------------------------------------------------- --------------
- ---------------------------- -------------------------------- ----------
Addix Harbage Executive Vice President
- ---------------------------- -------------------------------- -----------
- ---------------------------- -------------------------------- --------------
Hubert A. Adams Senior Vice President
- ---------------------------- -------------------------------- -------------
- ---------------------------- -------------------------------- -------------
Alan B. Shidler Senior Vice President
- ---------------------------- -------------------------------- --------------
- ---------------------------- -------------------------------- ----------------
Stephen Ferrone Senior Vice President
- ---------------------------- -------------------------------- ----------------
George Vanden Vennett Senior Vice President------------- -------------
- ---------------------------- -------------------------------- ----------------
Joan M. Giardina Vice President
- ---------------------------- -------------------------------- ----------------
- ---------------------------- -------------------------------- ----------------
Roger A. Meier Vice President
- ---------------------------- -------------------------------- ----------------
- ---------------------------- -------------------------------- ----------------
Joan M. Perkins Vice President
- ---------------------------- -------------------------------- ----------------
- ---------------------------- -------------------------------- ----------------
G. Rammelt Vice President
- ---------------------------- -------------------------------- ----------------
- -
REAL ESTATE SERVICES:
- ------------------------------------------ -----------------------------------
- ------------------------------------------ -----------------------------------
B. Wyckliffe Pattishall, Jr. Executive Vice President
- ------------------------------------------ -----------------------------------
- ------------------------------------------ ----------------------------------
James Benson Vice President
- ------------------------------------------ ---------------------------------
- ------------------------------------------ -------------------------------
Naomi Weitzel Vice President
- ------------------------------------------ ----------------------------------
- ------------------------------------------ ----------------------------------
Mary Cunningham-Watson Vice President
- ------------------------------------------ ---------------------------------
- -----------------------------------------------------------------------------
RETIREMENT TRUST RESOURCES:
- --------------------------------------------------------------------------
- ------------------------------------------- --------------------------------
Terry L. Zirkle Senior Vice President
- ------------------------------------------- --------------------------------
- ------------------------------------------- ----------------------------------
Mark D. Berman Vice President
- ------------------------------------------- -------------------------------
- ------------------------------------------- ---------------------------------
Daniel R. Joyce Vice President
- ------------------------------------------- ---------------------------------
- ------------------------------------------- --------------------------------
Michael Lambert Vice President
- ------------------------------------------- ----------------------------------
- ------------------------------------------- --------------------------------
Karen Fisher Prange Vice President
- ------------------------------------------- --------------------------------
- ------------------------------------------- ----------------------------------
Ronald S. Quesenberry Vice President
- ------------------------------------------- ----------------------------------
- ------------------------------------------- ----------------------------------
Jeanne D. Reder Vice President
- ------------------------------------------- -----------------------------------
- ------------------------------------------- -----------------------------------
Robert F. Stuark Vice President
- ------------------------------------------- ---------------------------------
MONTAG & CALDWELL, INC.
- ------------------------------------------ ---------------------------------
Solon P. Patterson Chairman of the Board, Chief Executive
Officer and Treasurer
- ------------------------------------------ ---------------------------------
- ------------------------------------------ -----------------------------------
Stuart D. Bilton Director
- ------------------------------------------ ------------------------------------
- ------------------------------------------ -----------------------------------
David B. Cumming Director
- ------------------------------------------ ---------------------------
- ------------------------------------------ ----------------------------------
Ronald E. Canakaris President and Chief Investment Officer
- ------------------------------------------ ------------------------------------
- ------------------------------------------ -----------------------------------
David F. Seng Executive Vice President and Chief
Operating Officer
- ------------------------------------------ ------------------------------------
- ------------------------------------------ -----------------------------------
Elizabeth C. Chester Vice President and Secretary
- ------------------------------------------ ------------------------------------
- ------------------------------------------ ----------------------------------
Homer W. Whitman, Jr. Senior Vice President
- ------------------------------------------ ----------------------------------
- ------------------------------------------ ----------------------------------
Janet B. Bunch Vice President
- ------------------------------------------ ---------------------------------
- ------------------------------------------ -------------------------------------
Debra Bunde Comsudes Vice President
- ------------------------------------------ ----------------------------------
- ------------------------------------------ ---------------------------------
Jane R. Davenport Vice President
- ------------------------------------------ --------------------------------
- ------------------------------------------ -----------------------------------
James L. Deming Vice President
- ------------------------------------------ -----------------------------------
- ------------------------------------------ ----------------------------------
Charlotte F. Fox Vice President
- ------------------------------------------ ----------------------------------
- ------------------------------------------ -------------------------------
Brion D. Friedman Vice President
- ------------------------------------------ ----------------------------------
- ------------------------------------------ ----------------------------------
Richard W. Haining Vice President
- ------------------------------------------ ----------------------------------
Charles Jefferson Hagood Vice President
- ------------------------------------------ -----------------------------------
- ------------------------------------------ -----------------------------------
Grover C. Maxwell, III Vice President
- ------------------------------------------ -----------------------------------
- ------------------------------------------ -----------------------------------
William A. Vogel Vice President
- ------------------------------------------ ----------------------------------
- ------------------------------------------ ---------------------------------
Rebecca M. Keister Vice President
- ------------------------------------------ ---------------------------------
TALON ASSET MANAGEMENT, INC.
<TABLE>
<CAPTION>
<S> <C> <C>
- ------------------------------------------ ------------------------------------------ ------------------------------
Terry D. Diamond Chairman Director of Amli Realty
- ------------------------------------------ ------------------------------------------ ------------------------------
- ------------------------------------------ ------------------------------------------ ------------------------------
Alan R. Wilson President
- ------------------------------------------ ------------------------------------------ ------------------------------
- ------------------------------------------ ------------------------------------------ ------------------------------
Barbara L. Rumminger Treasurer
- ------------------------------------------ ------------------------------------------ ------------------------------
- ------------------------------------------ ------------------------------------------ ------------------------------
Bernard H. Kailin Vice President
- ------------------------------------------ ------------------------------------------ ------------------------------
- ------------------------------------------ ------------------------------------------ ------------------------------
Sophia A. Erskine Corporate Secretary
- ------------------------------------------ ------------------------------------------ ------------------------------
</TABLE>
Item 29. Principal Underwriter:
(a) First Data Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of First Data Investor Services Group, Inc.
and an indirect wholly-owned subsidiary of First Data Corporation,
acts as Distributor for ABN AMRO Funds pursuant to a distribution
agreement dated February 26, 1998. The Distributor also acts as
underwriter for Alleghany Funds, BT Insurance Funds Trust, First
Choice Funds Trust, Forward Funds, Inc., The Galaxy Fund, Galaxy VIP
Fund, Galaxy Fund II, IBJ Funds Trust, Light Index Fund, Inc.,
Panorama Trust, Undiscovered Managers Funds, and Wilshire Target
Funds, Inc. The Distributor is registered with the Securities and
Exchange Commission as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc.
(b) The information required by this Item 29(b) with
respect to each director, officer, or partner of
First Data Distributors, Inc. is incorporated by
reference to Schedule A of Form BD filed by First
Data Distributors, Inc. with the Securities and
Exchange Commission pursuant to the Securities Act of
1934 (file no. 8-45467).
(c) Not Applicable.
Item 30. Location of Accounts and Records:
All records described in Section 31(a) of the 1940 Act and the
Rules 17 CFR 270.31a-1 to 31a-31 promulgated thereunder, are
maintained by the Fund's Investment Advisors as listed below,
except for those maintained by the Fund's Custodian, UMB Bank,
N.A., 928 Grand Avenue, Kansas City, Missouri 64106, and the
Fund's Sub-Administrator, Transfer, Redemption, Dividend
Disbursing and Accounting Agent, First Data Investor Services
Group, Inc., 53 State Street, Boston, MA 02109.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
The Chicago Trust Company Montag & Caldwell, Inc. Talon Asset Management, Inc.
171 North Clark Street 3343 Peachtree Road, N.E. One North Franklin
Chicago, IL 60601 Atlanta, GA 30326 Chicago, IL 60606
</TABLE>
Item 31. Management Services:
Not Applicable.
Item 32. Undertakings:
(a) Not Applicable.
(a) Not Applicable due to Rule changes.
(b) The Registrant will furnish each person to whom a
prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders,
upon request and without charge.
(d) Registrant hereby undertakes to call a meeting of its
shareholders for the purpose of voting upon the
question of removal of a trustee or trustees of
Registrant when requested in writing to do so by the
holders of at least 10% of Registrant's outstanding
shares. Registrant undertakes further, in connection
with the meeting, to comply with the provisions of
Section 16(c) of the 1940 Act, as amended, relating
to communications with the shareholders of certain
common-law trusts.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of Chicago, the State of Illinois on the 21st day
of August, 1998.
ALLEGHANY FUNDS
By: KENNETH C. ANDERSON
Kenneth C. Anderson, President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement of Alleghany Funds has been signed below by the following person in
his or her capacity and on the 21st day of August, 1998.
Signature Capacity
STUART D. BILTON Chairman, Board of Trustees
Stuart D. Bilton
DOROTHEA C. GILLIAM Trustee
Dorothea C. Gilliam
NATHAN SHAPIRO Trustee
Nathan Shapiro
GREGORY T. MUTZ Trustee
Gregory T. Mutz
LEONARD F. AMARI Trustee
Leonard F. Amari
KENNETH C. ANDERSON President
Kenneth C. Anderson
(Principal Executive Officer)
GERALD F. DILLENBURG Secretary, Treasurer and Vice President
Gerald F. Dillenburg
(Principal Accounting & Financial Officer)
<PAGE>
