February 29, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: The Aquinas Funds, Inc. Annual Report
Filing Pursuant to Rule 30b2-1 and Section 24(b)
under the Investment Company Act of 1940
SEC File No. 811-8122, 33-70978
Dear Sir/Madam:
On behalf of the Aquinas Funds, Inc. (the "Fund"), transmitted herewith for
filing pursuant to Rule 30b2-1 and Section 24(b) under the Investment Company
Act of 1940, as amended, is the Fund's Annual Report to the Shareholders for the
fiscal year ended December 31, 1995.
Questions regarding this filing should be directed to the undersigned.
Sincerely,
/s/ Richard P. Snyder
Richard P. Snyder
Client Services and Accounting Manager
RPS/jv
Encl.
AQUINAS FUNDS
February 1996
DEAR
SHAREHOLDER:
1995 was a wonderful year for all of the Aquinas mutual fund investors! We are
pleased to report that our investment performance results were the best since
the inception of the Funds. We are especially proud of our Equity Income Fund
which was listed as one of the best performers in its class in 1995.<F1>
1 YEAR AVERAGE ANNUAL
TOTAL RETURNS: 12/31/95 SINCE INCEPTION<F2>
Aquinas Equity Income 35.62% 14.80%
Aquinas Equity Growth 30.29% 10.25%
Aquinas Balanced 23.14% 9.30%
Aquinas Fixed Income 16.26% 6.17%
Our results reflect our philosophy of being fully invested instead of trying to
time the market. We believe that philosophy is appropriate for the long-term
investing needs of most of our equity clients. Even with these great returns, we
believe that our portfolios reflect our conservative philosophy of NO leverage
and NO use of exotic, high-risk financial instruments.
We invest through a disciplined process with quality portfolio sub-advisers.
This provides a multi-manager approach for each Fund and reduces risk through
style and approach. The final results are portfolios that are solid,
diversified, non-concentrated, and well positioned to respond to future market
forces. We believe that quality will continue to prevail in the long run versus
the flash and dash approach of sector funds.
Our socially responsible investing does not equate to making a sacrifice as our
investment performance proves. In the 1990s, smart investing and socially
responsible investing have become one and the same thing. Now more than ever,
consumers want to do business with and buy products from companies that "do the
right thing. "And almost all companies that fail to do the right thing are
eventually rebuffed, first by the consumer, then by the media, and then in the
stock and bond markets.
We have made good progress in bringing issues to the attention of corporate
management. The process is one-step-at-a-time and we appreciate the support of
our investor clients that are marching with us.
Sincerely,
/s/ Bernard P. DiFiore
Bernard P. DiFiore
President and Treasurer
<F1> For the one-year period ended December 31, 1995, the Equity Income Fund was
ranked 10 out of 119 equity income funds by Morningstar, Inc.
<F2> Inception date: January 3, 1994. Returns shown include the reinvestment of
dividends. Performance reflects fee waivers in effect. Absent fee waivers total
returns would be reduced. Past performance is not predictive of future results.
Investment return and principal value will fluctuate, so that your shares, when
redeemed, may be worth more or less than the original cost.
THE FUNDS IN REVIEW
Aquinas Fixed Income Fund
The Fund seeks to provide a high level of current income, with a reasonable
opportunity for capital appreciation. The Fixed Income Fund is designed for
investors with current income needs. This Fund invests primarily in a
diversified portfolio of investment-grade fixed income securities.
The Fund had a total return of 16.26% while maintaining a high-quality bond
portfolio. There are no high risk derivative securities and we focus on
intermediate-term duration to achieve our goals. Even in 1995, some news
headlines featured the adverse results of the use of risky derivatives and we
are proud to be one of the funds to publicly state the limits of derivatives in
our portfolios.
Total Returns
For Period Ended December 31, 1995
----------------------------------
Average
Annual
One Since
Year Inception<F3>
Aquinas Fixed
Income Fund 16.26% 6.17%
Lehman Bros. Gov't./
Corp. Bond Index 19.24% 7.29%
<F3> January 3, 1994 inception
1/3/94 12/94 12/95
Aquinas Fixed Income Fund $10,000 $9,691 $11,266
Lehman Bros. Gov't./Corp. Bond Index $10,000 $9,649 $11,505
This chart assumes an initial gross investment of $10,000 made on 1/3/94
(inception). Returns shown include the reinvestment of all dividends.
Performance reflects fee waivers in effect. Absent fee waivers, total returns
would be reduced. Past performance is not predictive of future performance.
Investment return and principal value will fluctuate, so that your shares, when
redeemed, may be worth more or less than the original cost.
The Lehman Brothers Government/Corporate Bond Index includes all public
obligations of the U.S. Treasury, excluding flower bonds and foreign-targeted
issues; all publicly issued debt of U.S. government agencies and quasi-federal
corporations, and corporate debt guaranteed by the U.S. government; and all
publicly issued, fixed rate, nonconvertible, investment grade, dollar-
denominated, SEC-registered corporate debt (including debt issued or guaranteed
by foreign sovereign governments, municipalities, or governmental agencies, or
international agencies).
As we see the problem, it is not the instruments themselves that cause the
losses, but the lack of sufficient personnel adequately trained in the proper
use of derivatives; and the lack of market experience to understand the
liquidity implications when panic sets into the market. There are sufficient
securities in the market to allow us to seek solid returns and sleep soundly at
the same time knowing the risks involved.
U.S. Treasury and U.S. Government Agency issues plus short-term money market
investments comprise 50.6% of the portfolio and high-quality securities
represent the rest. Our position in putable corporate bonds gives us excellent
duration control with good yields and we are well positioned when interest rates
move. As you are aware, interest rates moved up rapidly in 1994 and finally
stepped down quickly in mid-1995. Because of the intermediate term nature of
the Fund and its duration of 4.5 years, the relatively fast decline in interest
rates caused the Fund to underperform the Lehman Bros. Gov't./Corp. Bond
Index. We believe that the intermediate-term nature of our Fund provides the
investor with downside protection and the opportunity for good upside returns.
We continue to monitor our securities for their socially responsible investing
aspects. Many investors wonder how we track the social responsibility issues on
our diverse portfolios. The answer is computer software which is updated
externally and internally on a monthly basis plus an independent outside
interface with other socially responsible investors. We feel that we are making
progress on many of the issues of importance to our society.
Aquinas Equity Income Fund
The Fund seeks growth of capital and a high level of current income by investing
principally in conservative income-producing equity securities (typically,
dividend-paying common stocks).
Performance results were excellent in 1995 with a total return of 35.6%. We
remained widely diversified in our portfolio with no significant industry
concentrations.
Total Returns
For Period Ended December 31, 1995
----------------------------------
Average
Annual
One Since
Year Inception<F4>
Aquinas Equity
Income Fund 35.62% 14.80%
S&P 500 Stock Index 37.58% 18.15%
<F4> January 3, 1994 inception
1/3/94 12/94 12/95
Aquinas Equity Income Fund $10,000 $ 9,707 $13,165
S&P 500 Stock Index $10,000 $10,132 $13,939
This chart assumes an initial gross investment of $10,000 made on 1/3/94
(inception). Returns shown include the reinvestment of all dividends.
Performance reflects fee waivers in effect. Absent fee waivers, total returns
would be reduced. Past performance is not predictive of future performance.
Investment return and principal value will fluctuate, so that your shares, when
redeemed, may be worth more or less than the original cost.
The S&P 500 Stock Index is an unmanaged index of 500 selected common stocks,
most of which are listed on the New York Stock Exchange. The Index is heavily
weighted toward stocks with large market capitalizations and represents
approximately two-thirds of the total market value of all domestic common
stocks.
The portfolio has the names of widely recognized, well-established, good
performing companies. These corporations have proven earning capacity and the
ability to increase dividends on a consistent basis. Our portfolio turnover rate
of only 40% reflects the confidence of our decisions and the perceived prospects
for our investments in the near future. The impact of the Federal Reserve
movement of interest rates does have some impact on our stocks; but, we have
limited interest-sensitive stocks to situations where other compelling factors
persuade us that the investment is appropriate. We do not attempt to "time the
market" or overreact to interest rate movements. We do remain as fully invested
as we can while maintaining liquidity for shareholder daily operating needs.
Our benchmark, the S&P 500 Stock Index, has no liquidity requirement and
it slightly outperformed the Fund primarily because of the Fund's cash
positions. Most important is our dedication to the concept of total return
in a disciplined investment process. We have made progress in lowering the
expense ratio by 8 basis points and this decline should continue as the assets
under management continue to increase.
Finally, we have reviewed all the banks in our portfolio for Community
Reinvestment Act ratings, donations to organizations in opposition to our
values, and gender and race discrimination on their Boards. We have seen
positive changes in the composition of their Boards of Directors. Drug companies
are under review for potential RU486 (abortion pill) participation and possible
production/distribution of aborti-facient drugs. The defense industry slowdown
has seen major shifts of defense production migrated into non-defense
applications. While major contractors are being forced to merge as the United
States defense industry shrinks and slows down the manufacture of weapons of
mass destruction, we are still concerned with the production of land mines. We
are most appreciative of the shared efforts of other socially responsible
investors in our quest to help corporate management rediscover their consciences
and take steps toward being good citizens.
Aquinas Equity Growth Fund
The Fund seeks capital appreciation by investing in a diversified portfolio of
equity securities (primarily common stocks) that are believed to offer above-
average potential for growth in revenues, profits or cash flow. Dividend and
interest income are not important considerations in selecting investments. This
Fund is designed for investors wishing to capitalize on the growth in companies
with reasonable levels of risk.
Our total return of 30.29% was excellent given the risk factor associated with
growth companies. Our larger capitalization companies such as Microsoft and Bank
of Boston performed well in 1995 with increases of 44% and 78%, respectively. In
1996, we feel our medium and smaller capitalization positions in the portfolio
should prosper well.
Total Returns
For Period Ended December 31, 1995
----------------------------------
Average
Annual
One Since
Year Inception<F5>
Aquinas Equity
Growth Fund 30.29% 10.25%
S&P 500 Stock Index 37.58% 18.15%
Russell 3000 Index 36.81% 17.14%
<F5>January 3, 1994 inception
1/3/94 12/94 12/95
Aquinas Equity Groth Fund $10,000 $ 9,322 $12,145
S&P 500 Stock Index $10,000 $10,132 $13,939
Russell 3000 Index $10,000 $10,018 $13,705
This chart assumes an initial gross investment of $10,000 made on 1/3/94
(inception). Returns shown include the reinvestment of all dividends.
Performance reflects fee waivers in effect. Absent fee waivers, total returns
would be reduced. Past performance is not predictive of future performance.
Investment return and principal value will fluctuate, so that your shares, when
redeemed, may be worth more or less than the original cost.
The S&P 500 Stock Index is an unmanaged index of 500 selected common stocks,
most of which are listed on the New York Stock Exchange. The Index is heavily
weighted toward stocks with large market capitalizations and represents
approximately two-thirds of the total market value of all domestic common
stocks.
The Russell 3000 Index is composed of the 3,000 largest U.S. securities, as
determined by total market capitalization. This portfolio of securities
represents approximately 98% of the investable U.S. equity market.
Diversification is the hallmark of this long-term growth fund. We do not place
sector bets and/or switch sectors in rapid portfolio movement. Early last year
the technology sector was extremely alluring and profitable, but by the end of
the year had lost most of its gains. These are great investments to talk about
but often too risky for our style. Our index comparisions outperformed us for
several reasons. The S&P 500 Stock Index achieved its 7th best return in the
last 70 years. While the S&P 500 Stock Index started moving up in early
1995 at a rapid rate, the large and mid-cap stocks in this portfolio did not
start to move up quite as rapidly. And, the lower range small and mid-cap stocks
in our portfolio tended to lag the rapid run-up of the Russell 3000. We do not
make sector bets and we tend to spread our portfolio with a large number of
stocks to achieve broad diversification. As Fund assets grow, prospects to
reduce the expense ratio below 1.50% appear very good.
We have reviewed the Community Reinvestment Act ratings of the commercial banks
and savings and loans. We are working with entertainment and media companies to
review the violence in the media viewed by children (these actions include
meeting and dialogue with management, FCC protests, etc.). Drug companies are
being reviewed to monitor any potential involvement with RU486 (the abortion
pill) and labeling of aborti-facient drugs.
We appreciate the support of all our investors as we represent them in the
socially responsible actions.
Aquinas Balanced Fund
The Fund seeks long-term growth of capital consistent with reasonable risk to
principal by investing in a diversified portfolio of common stocks of
established companies and investment-grade fixed income securities. The Fund
expects to maintain approximately 65% of its assets in common stocks and 35% in
fixed income securities. At year end 1995, the Fund had an asset allocation of
40% fixed income, 30% income equity and 30% growth equity segments. The duration
of the fixed income components is approximately five years.
The Fund performed very well with a total return of 23.14% and it provided this
while maintaining a well diversified portfolio.
Total Returns
For Period Ended December 31, 1995
----------------------------------
Average
Annual
One Since
Year Inception<F6>
Aquinas
Balanced Fund 23.14% 9.30%
Lehman Bros. Gov't./
Corp. Bond Index 19.24% 7.29%
S&P 500 Stock Index 37.58% 18.15%
Salomon Bros. 3-Month
Treasury Bill Index 5.74% 5.00%
<F6>January 3, 1994 inception
1/3/94 12/94 12/95
Aquinas Balanced Fund $10,000 $ 9,694 $11,937
Lehman Bros. Gov't./Corp. Bond Index $10,000 $10,132 $11,505
S&P 500 Stock Index $10,000 $ 9,649 $13,939
Salomon Bros. 3-Mo. Treasury
Bill Index $10,000 $10,422 $11,020
This chart assumes an initial gross investment of $10,000 made on 1/3/94
(inception). Returns shown include the reinvestment of all dividends.
Performance reflects fee waivers in effect. Absent fee waivers, total returns
would be reduced. Past performance is not predictive of future performance.
Investment return and principal value will fluctuate, so that your shares, when
redeemed, may be worth more or less than the original cost.
The Lehman Brothers Government/Corporate Bond Index includes all public
obligations of the U.S. Treasury, excluding flower bonds and foreign-targeted
issues; all publicly issued debt of U.S. government agencies and quasi-federal
corporations, and corporate debt guaranteed by the U.S. government; and all
publicly issued, fixed rate, nonconvertible, investment grade, dollar-
denominated, SEC-registered corporate debt (including debt issued or guaranteed
by foreign sovereign governments, municipalities, or governmental agencies, or
international agencies).
The S&P 500 Stock Index is an unmanaged index of 500 selected common stocks,
most of which are listed on the New York Stock Exchange. The Index is heavily
weighted toward stocks with large market capitalizations and represents
approximately two-thirds of the total market value of all domestic common
stocks.
The Salomon Brothers 3-Month Treasury Bill Index is composed of monthly
equivalents of yield averages that are not marked to market.
The S&P's 1995 total return performance was the 7th best of the last 70 years.
And in the years following the other nine years that finished in the top ten,
the S&P's performance was up five times and down four. We performed below the
S&P 500 Stock Index because we had bonds in our portfolio and we performed
above Lehman Bros. Gov't./Corp. Bond Index and the Salomon Brothers 3-month
T-Bill Index because we had higher performing stocks in the portfolio. In
summary, we were just where the Fund is designed to be. While we can't predict
how 1996 will finish, the Fund provides broad investment diversity for the
investor seeking a balanced approach to investment management.
In future periods, the performance of the Fund will no longer be compared to
that of the Salomon Bros. 3-Month Treasury Bill Index. The Board of Directors
and the Adviser believe that the comparison is not valid as the majority of the
Fund's assets are invested in equity securities and debt securities with
maturity dates greater than three months.
As a General Motors shareholder, we have co-filed a shareholder proposal to
require the Board of Directors to review the plight of the Maquiladoras - the
Mexican worker in a U.S. manufacturing plant in Mexico. GM has benefited greatly
with the Mexican peso devaluation and the worker has suffered greatly as his
wages are worth less and his standard of living has declined to barely
sustainable levels. We believe that a good corporate citizen reporting the
strong earnings, such as were recently reported by GM, should give consideration
to this situation as good business and not as charity.
Our socially responsible investing is conducted in cooperation with other like-
minded investors and supporters throughout the ecumenical world. We are thankful
for their support and the assistance of unpaid volunteers who
help us throughout the year.
FIXED INCOME FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
Principal
Amount Value
- - ------ -----
FIXED INCOME BONDS 94.03%
ASSET-BACKED SECURITIES 10.29%
$750,000 Advanta Credit Card Master Trust,
6.0025%, 8/1/03 $ 749,883
375,000 EQCC Home Equity Loan Trust,
8.95%, 1/15/15 417,653
500,000 First USA Credit Card Master Trust,
6.3125%, 12/15/00 501,050
500,000 Mellon Bank Credit Card Master Trust,
6.0025%, 4/15/03 500,300
400,000 Premier Auto Trust,
6.45%, 5/2/98 405,272
363,094 Premier Auto Trust,
4.90%, 10/15/98 360,932
400,000 Standard Credit Card Master Trust,
5.90%, 2/7/01 400,120
331,153 Union Federal Savings Bank Trust,
4.875%, 2/15/00 330,009
---------
3,665,219
---------
CORPORATE BONDS 41.36%
400,000 Air Products & Chemicals, Inc.,
4.33%, 9/23/03 397,000
360,000 American Express Credit Corp.,
8.50%, 6/15/99 389,700
525,000 Associates Corp. of North America,
7.75%, 2/15/05 583,407
500,000 BarclaysAmerican Corp.,
7.875%, 8/15/98 525,625
375,000 Chesapeake & Potomac Telephone Co.
of Virginia, 8.375%, 10/1/29 458,906
600,000 Citicorp,
8.00%, 2/1/03 659,250
600,000 Commercial Credit Co.,
7.875%, 2/1/25 684,000
430,000 Commonwealth Edison Co.,
6.40%, 10/15/05 417,100
450,000 Ford Capital BV,
10.125%, 11/15/00 527,625
623,000 Ford Holdings, Inc.,
9.25%, 7/15/97 656,486
629,000 General Electric Capital Corp.,
8.30%, 9/20/09 752,441
600,000 General Motors Acceptance Corp.,
8.875%, 6/1/10 735,750
500,000 Grace (W.R.) & Co.,
8.00%, 8/15/04 543,125
600,000 Heller Financial Corp.,
9.375%, 3/15/98 644,250
350,000 Household Bank,
8.45%, 12/10/02 400,750
425,000 Household Finance Corp.,
6.25%, 10/15/97 429,781
600,000 Hydro-Quebec,
7.40%, 3/28/25 645,000
375,000 Lehman Brothers, Inc.,
5.04%, 12/15/03 372,533
250,000 Lehman Brothers, Inc.,
8.05%, 1/15/19 277,188
200,000 Motorola, Inc.,
8.40%, 8/15/31 258,500
650,000 Nabisco, Inc.,
6.80%, 9/1/01 661,375
400,000 Nabisco, Inc.,
7.05%, 7/15/07 414,000
300,000 NationsBank Corp.,
8.57%, 11/15/24 352,875
590,000 New Jersey Bell Telephone Co.,
7.85%, 11/15/29 702,837
500,000 Pacific Gas & Electric Co.,
7.67%, 12/15/98 526,875
135,000 Rodamco NV,
7.30%, 5/15/05 143,775
400,000 Rollins Truck Leasing,
7.00%, 3/15/01 417,000
650,000 Southern California Edison Co.,
5.60%, 12/15/98 650,000
605,000 Walt Disney Co.,
1.50%, 10/20/99 502,150
----------
14,729,304
----------
U.S. GOVERNMENT AGENCIES 24.96%
750,000 FHLMC, Series 1576, Class PH,
6.00%, 1/15/08 733,659
525,000 FNMA, 5.20%, 7/10/98 521,204
475,000 FNMA, 4.875%, 10/15/98 467,866
400,000 FNMA, 6.29%, 10/4/00 411,676
400,000 FNMA, 6.08%, 9/3/03 394,668
97,534 FNMA, 9.00%, 7/1/06 102,838
1,150,000 FNMA, 15 Year TBA,
9.00%, 11/25/06 <F7> 1,210,735
750,000 FNMA, Series 1994-15, Class B,
4.75%, 2/25/09 744,196
1,350,000 FNMA, Series 1994-59, Class PE,
5.00%, 3/25/22 1,296,517
1,841,940 GNMA, 9.00%, 12/15/22 1,959,939
425,000 Guaranteed Export Certificates,
6.28%, 6/15/04 430,367
600,000 Tennessee Valley Authority,
6.235%, 7/15/45 616,500
---------
8,890,165
---------
U.S. TREASURY OBLIGATIONS 17.42%
475,000 U.S. Treasury Bond,
8.75%, 5/15/17 628,306
940,000 U.S. Treasury Bond,
8.125%, 5/15/21<F8> 1,188,310
800,000 U.S. Treasury Note,
4.625%, 2/29/96 799,440
1,500,000 U.S. Treasury Note,
6.75%, 5/31/97<F8> 1,531,200
1,100,000 U.S. Treasury Note,
8.75%, 10/15/97<F8> 1,166,022
400,000 U.S. Treasury Note,
8.00%, 5/15/01 448,076
1,970,000 U.S. Treasury Strips, 2/15/20 443,348
----------
6,204,702
----------
Total Fixed Income Bonds
(cost $32,172,079) 33,489,390
----------
SHORT-TERM INVESTMENTS 8.24%
2,936,343 United Missouri Bank
Money Market Fiduciary 2,936,343
----------
Total Short-Term Investments
(cost $2,936,343) 2,936,343
----------
Total Investments 102.27%
(cost $35,108,422) 36,425,733
Liabilities, less
Cash and Other Assets (2.27)% (808,882)
----------
NET ASSETS 100.00% $35,616,851
==========
<F7>When-issued
<F8>A portion of this security is pledged as collateral for when-issued purchase
commitments outstanding as of December 31, 1995.
See notes to financial statements.
EQUITY INCOME FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
Number
of Shares Value
- - --------- -----
COMMON STOCKS 94.43%
AEROSPACE 2.92%
11,800 Northrop Grumman Corp. 755,200
5,000 United Technologies Corp. 474,375
---------
1,229,575
---------
AUTOMOTIVE RELATED INDUSTRIES 4.58%
7,100 Chrysler Corp. 393,162
29,200 Ford Motor Co. 846,800
13,000 General Motors Corp. 687,375
---------
1,927,337
---------
BANKING 7.81%
16,100 Bankers Trust New York Corp. 1,070,650
5,700 Chase Manhattan Corp. 345,563
23,750 Mellon Bank Corp. 1,276,562
18,500 PNC Bank Corp. 596,625
---------
3,289,400
---------
BREWERIES 1.00%
6,300 Anheuser-Busch Cos., Inc. 421,313
---------
CHEMICALS 2.71%
10,000 Chemed Corp. 388,750
5,200 Dow Chemical Co. 365,950
7,000 Geon Co. 170,625
3,000 Great Lakes Chemical Corp. 216,000
---------
1,141,325
---------
COMPUTER EQUIPMENT 0.87%
4,000 International Business Machines
Corp. 367,000
---------
CONSUMER SERVICES 0.41%
7,116 Jostens, Inc. 172,563
---------
CREDIT AND FINANCE 1.00%
9,000 Beneficial Corp. 419,625
---------
DRUGS 3.19%
4,600 American Home Products Corp. 446,200
5,000 Bristol-Myers Squibb Co. 429,375
12,035 Pharmacia & Upjohn, Inc. 466,356
---------
1,341,931
---------
ELECTRIC UTILITIES 3.63%
11,300 DTE Energy Co. 389,850
15,400 PP&L Resources, Inc. 385,000
13,100 Pacific Gas & Electric Co. 371,713
21,900 Washington Water Power Co. 383,250
---------
1,529,813
---------
ELECTRONICS 2.35%
8,000 General Electric Co. 576,000
8,000 Texas Instruments, Inc. 414,000
---------
990,000
---------
FINANCIAL SERVICES 0.86%
18,200 Bear Stearns Cos., Inc. 361,725
---------
FOOD 0.87%
11,600 Supervalu, Inc. 365,400
---------
FOREST AND PAPER PRODUCTS 3.03%
12,000 Champion International Corp. 504,000
9,600 Potlatch Corp. 384,000
9,000 Weyerhaeuser Co. 389,250
---------
1,277,250
---------
HEALTH CARE EQUIPMENT
AND SUPPLIES 2.42%
19,000 Bard (C.R.), Inc. 612,750
9,700 Baxter International, Inc. 406,188
---------
1,018,938
---------
HOLDING COMPANIES 0.98%
27,000 Hanson PLC ADR 411,750
---------
HOUSEHOLD APPLIANCES 1.01%
21,000 Maytag Corp. 425,250
---------
HOUSEHOLD PRODUCTS 2.17%
18,800 Dial Corp. 556,950
7,500 Tambrands, Inc. 358,125
---------
915,075
---------
INSURANCE 4.59%
5,200 Aetna Life and Casualty Co. 360,100
12,800 American General Corp. 446,400
9,000 First Colony Corp. 228,375
18,000 PartnerRe Holdings Ltd. 495,000
11,900 Provident Cos., Inc. 403,112
---------
1,932,987
---------
LEISURE 1.04%
18,300 Brunswick Corp. 439,200
---------
MACHINERY AND EQUIPMENT 2.77%
9,300 Briggs and Stratton Corp. 403,387
12,300 Deere & Co. 433,575
10,500 Trinity Industries, Inc. 330,750
---------
1,167,712
---------
MINING 3.01%
13,000 Newmont Mining Corp. 588,250
10,900 Phelps Dodge Corp. 678,525
---------
1,266,775
---------
NATURAL GAS UTILITIES 3.06%
17,000 Equitable Resources, Inc. 531,250
13,200 NICOR, Inc. 363,000
12,400 People's Energy Corp. 393,700
---------
1,287,950
---------
OFFICE EQUIPMENT 0.86%
6,600 Harris Corp. 360,525
---------
OIL AND GAS 10.73%
10,000 Amerada Hess Corp. 530,000
3,400 Atlantic Richfield Co. 376,550
16,000 Camco International, Inc. 448,000
9,000 Chevron Corp. 472,500
5,000 Louisiana Land & Exploration Co. 214,375
15,500 Texaco, Inc. 1,216,750
30,100 Ultramar Corp. 775,075
11,000 Williams Cos., Inc. 482,625
---------
4,515,875
---------
PERSONAL SERVICES 1.99%
19,000 Service Corp. International 836,000
---------
PRINTING AND PUBLISHING 2.97%
15,000 Deluxe Corp. 435,000
6,875 Dun & Bradstreet Corp. 445,156
17,800 Harland (John H.) Co. 371,575
---------
1,251,731
---------
REAL ESTATE 0.89%
10,800 Meditrust Corp. 376,650
---------
RETAIL 4.13%
46,700 K-Mart Corp. 338,575
15,000 May Department Stores Co. 633,750
24,900 Melville Corp. 765,675
---------
1,738,000
---------
SEMICONDUCTORS 1.16%
8,600 Intel Corp. 488,050
---------
STEEL/IRON 0.54%
4,000 Nucor Corp. 228,500
---------
TELECOMMUNICATIONS 6.72%
19,600 Comsat Corp. 365,050
18,200 GTE Corp. 800,800
24,700 Pacific Telesis Group 830,538
9,800 Southern New England
Telecommunications Corp. 389,550
12,350 US West Communications Group 441,513
---------
2,827,451
---------
TEXTILES 0.87%
8,900 Springs Industries, Inc., Class A 368,237
---------
TOBACCO PRODUCTS 4.69%
19,500 American Brands, Inc. 870,187
12,200 Philip Morris Cos., Inc. 1,104,100
---------
1,974,287
---------
TRANSPORTATION 2.60%
16,000 Alexander & Baldwin, Inc. 368,000
7,400 GATX Corp. 359,825
7,800 PHH Corp. 364,650
---------
1,092,475
---------
Total Common Stocks
(cost $33,552,758) 39,757,675
----------
Principal
Amount Value
- - ------ -----
SHORT-TERM INVESTMENTS 6.38%
2,686,170 United Missouri Bank
Money Market Fiduciary 2,686,170
----------
Total Short-Term Investments
(cost $2,686,170) 2,686,170
----------
Total Investments 100.81%
(cost $36,238,928) 42,443,845
Liabilities, less
Cash and Other Assets (0.81)% (341,466)
----------
NET ASSETS 100.00% $42,102,379
==========
See notes to financial statements.
EQUITY GROWTH FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
Number
of Shares Value
- - --------- -----
COMMON STOCKS 95.22%
ADVERTISING 0.83%
2,100 Catalina Marketing Corp. <F9> 131,775
---------
AEROSPACE 0.66%
2,000 Rockwell International Corp. 105,750
---------
AIRLINES AND AIRCRAFT PARTS 1.66%
1,500 AMR Corp. <F9> 111,375
4,300 Loral Corp. 152,113
---------
263,488
---------
APPAREL 0.44%
750 Nautica Enterprises, Inc. <F9> 32,813
1,000 Nine West Group, Inc. <F9> 37,500
---------
70,313
---------
BANKING 3.51%
2,200 Bank of Boston Corp. 101,750
2,500 BankAmerica Corp. 161,875
1,300 Citicorp 87,425
1,000 First Bank System, Inc. 49,625
1,500 MBNA Corp. 55,313
1,500 Suntrust Banks, Inc. 102,750
---------
558,738
---------
BUSINESS SERVICES 5.03%
7,350 CUC International, Inc. <F9> 250,818
4,200 Danka Business Systems ADR 155,400
7,900 Paychex, Inc. 394,013
---------
800,231
---------
CHEMICALS 2.77%
2,500 Allied-Signal, Inc. 118,750
1,900 Eastman Chemical Co. 118,987
1,500 IMC Global, Inc. 61,313
1,700 Praxair, Inc. 57,163
1,700 Sigma-Aldrich Corp. 84,150
---------
440,363
---------
COMMUNICATIONS 0.78%
3,500 WorldCom, Inc. <F9> 123,375
---------
COMPUTER COMPONENTS AND
SOFTWARE 5.46%
1,500 Broderbund Software, Inc. <F9> 91,125
4,000 Equifax, Inc. 85,500
2,500 General Motors Corp., Class E 130,000
3,200 Informix Corp. <F9> 96,000
900 Microsoft Corp. <F9> 78,975
1,600 Parametric Technology Corp. <F9> 106,400
2,500 Shared Medical Systems Corp. 135,937
3,800 Synopsys, Inc. <F9> 144,400
---------
868,337
---------
COMPUTER EQUIPMENT 1.11%
4,300 Adaptech, Inc. <F9> 176,300
---------
COMPUTER RETAILING 0.40%
700 International Business Machines
Corp. 64,225
---------
COMPUTER SERVICES 3.33%
1,800 Bay Networks, Inc. <F9> 74,025
4,220 First Data Corp. 282,212
6,100 Sungard Data Systems, Inc. <F9> 173,850
---------
530,087
---------
CONSTRUCTION 3.05%
1,700 Armstrong World Industries, Inc. 105,400
1,900 Case Corp. 86,925
3,800 Lowe's Cos., Inc. 127,300
5,500 USG Corp. <F9> 165,000
---------
484,625
---------
CONSUMER GOODS 2.25%
8,300 General Nutrition Co. <F9> 190,900
3,000 PepsiCo, Inc. 167,625
---------
358,525
---------
DRUGS 7.36%
4,500 Abbott Laboratories 187,875
3,000 Amgen, Inc. <F9> 178,125
3,000 Eckerd Corp. <F9> 133,875
1,000 Johnson & Johnson 85,625
1,600 Merck & Co., Inc. 105,200
1,400 Pfizer, Inc. 88,200
3,000 Schering-Plough Corp. 164,250
4,900 Teva Pharmaceutical Industries
Ltd. ADR 227,237
---------
1,170,387
---------
ELECTRONICS 4.49%
1,500 Arrow Electronics, Inc. <F9> 64,688
3,300 General Electric Co. 237,600
1,700 Hewlett-Packard Co. 142,375
4,500 LSI Logic Corp. <F9> 147,375
3,875 Molex, Inc. 123,031
---------
715,069
---------
ENTERTAINMENT 4.47%
1,800 Clear Channel Communications, Inc. <F9> 79,425
4,350 Infinity Broadcasting Corp., Class A <F9> 162,038
3,700 Viacom, Inc., Class B <F9> 175,287
5,000 Walt Disney Co. 295,000
---------
711,750
---------
FINANCIAL SERVICES 2.48%
3,500 Capital One Financial Corp. 83,562
1,500 Finova Group, Inc. 72,375
3,200 Green Tree Financial Corp. 84,400
11,600 Mercury Finance Co. 153,700
---------
394,037
---------
FOOD 3.47%
3,000 ConAgra, Inc. 123,750
1,500 CPC International, Inc. 102,937
10,000 Sysco Corp. 325,000
---------
551,687
---------
FOREST AND PAPER PRODUCTS 0.86%
2,100 Alco Standard Corp. 136,875
---------
HEALTH CARE EQUIPMENT
AND SUPPLIES 2.40%
2,100 Medtronic, Inc. 117,337
500 Nellcor Puritan Bennett, Inc. <F9> 29,000
2,800 Omnicare, Inc. 125,300
2,550 St. Jude Medical, Inc. 109,650
---------
381,287
---------
HOLDING COMPANIES 0.47%
1,300 Harsco Corp. 75,563
---------
HOSPITAL MANAGEMENT
AND SERVICES 4.22%
7,432 Columbia/HCA Healthcare Corp. 377,174
2,250 Phycor, Inc. <F9> 113,766
5,576 Vencor, Inc. <F9> 181,220
---------
672,160
---------
HOTELS 1.97%
5,500 Marriott International, Inc. 210,375
4,600 Promus Hotel Corp. <F9> 102,350
---------
312,725
---------
HOUSEHOLD PRODUCTS 1.35%
3,000 Gillette Co. 156,375
700 Procter & Gamble Co. 58,100
---------
214,475
---------
INFORMATION SERVICES 0.52%
2,900 DST Systems, Inc. <F9> 82,650
---------
INSURANCE 4.72%
1,400 AFLAC, Inc. 60,725
2,000 American International Group, Inc. 185,000
4,000 American Re Corp. 163,500
4,100 MGIC Investment Corp. 222,425
2,700 Reliastar Financial Corp. 119,813
---------
751,463
---------
MACHINERY AND EQUIPMENT 1.01%
1,400 Applied Materials, Inc. <F9> 55,125
3,000 Black & Decker Corp. 105,750
---------
160,875
---------
MANUFACTURING 0.78%
3,900 Danaher Corp. 123,825
---------
MEDIA 0.58%
2,900 Evergreen Media Corp. <F9> 92,800
---------
MINING 0.89%
2,000 Potash Corp. of Saskatchewan, Inc. 141,750
---------
OIL AND GAS 10.43%
800 Atlantic Richfield Co. 77,525
6,300 Baker Hughes, Inc. 153,562
5,500 BJ Services Co. <F9> 159,500
1,200 British Petroleum Co. PLC ADR 122,550
7,000 Dresser Industries, Inc. 170,625
5,500 ENSCO International, Inc. <F9> 126,500
2,000 Halliburton Co. 101,250
2,900 Louisiana Land & Exploration Co. 124,337
1,000 Mobil Corp. 112,000
6,000 Noble Affiliates, Inc. 179,250
3,500 Triton Energy Corp. <F9> 200,813
3,000 Williams Cos., Inc. 131,625
---------
1,659,537
---------
RAILROADS 0.48%
2,000 ILLINOIS CENTRAL CORP. 76,750
---------
RESTAURANTS 1.66%
4,000 McDonald's Corp. 180,500
4,000 Starbucks Corp. <F9> 84,000
---------
264,500
---------
RETAIL 5.90%
6,100 Borders Group, Inc. <F9> 112,850
4,000 Petsmart, Inc. <F9> 124,000
4,000 Price/Costco, Inc. <F9> 61,000
1,500 Safeway, Inc. <F9> 77,250
3,700 Tiffany & Co. 186,387
4,100 Viking Office Products, Inc. <F9> 190,650
4,000 Walgreen Co. 119,500
3,000 Wal-Mart Stores, Inc. 67,125
---------
938,762
---------
SAVINGS AND LOANS 0.77%
4,760 Washington Federal, Inc. 121,975
---------
SEMICONDUCTORS 0.81%
3,300 Linear Technology Corp. 129,525
---------
TELECOMMUNICATIONS 0.92%
4,000 ADC Telecommunications, Inc. <F9> 146,000
---------
WASTE DISPOSAL 0.31%
1,500 Sanifill, Inc. <F9> 50,063
---------
WHOLESALE 0.62%
1,800 Cardinal Health, Inc. 98,550
---------
Total Common Stocks
(cost $12,562,250) 15,151,172
----------
Principal
Amount Value
- - ------ -----
CONVERTIBLE CORPORATE
BONDS 0.37%
50,000 Boston Chicken,
Convertible Subordinated Note,
4.50%, 2/1/04 58,313
----------
Total Convertible Corporate Bonds
(cost $51,058) 58,313
----------
SHORT-TERM INVESTMENTS 3.95%
629,407 United Missouri Bank
Money Market Fiduciary 629,407
----------
Total Short-Term Investments
(cost $629,407) 629,407
----------
Total Investments 99.54%
(cost $13,242,715) 15,838,892
Cash and Other Assets,
less Liabilities 0.46% 72,766
----------
NET ASSETS 100.00% $15,911,658
==========
<F9>Non-income producing
See notes to financial statements.
BALANCED FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
Number
of Shares Value
- - --------- -----
COMMON STOCKS 58.74%
ADVERTISING 0.45%
1,900 Catalina Marketing Corp. <F10> 119,225
---------
AEROSPACE 0.93%
2,400 Northrop Grumman Corp. 153,600
1,000 United Technologies Corp. 94,875
---------
248,475
---------
AUTOMOTIVE RELATED INDUSTRIES 1.42%
1,400 Chrysler Corp. 77,525
7,000 Ford Motor Co. 203,000
1,900 General Motors Corp. 100,462
---------
380,987
---------
BANKING 2.44%
3,200 Bankers Trust New York Corp. 212,800
1,200 Chase Manhattan Corp. 72,750
3,900 Mellon Bank Corp. 209,625
1,000 N.S. Bancorp, Inc. 38,750
3,700 PNC Bank Corp. 119,325
---------
653,250
---------
BREWERIES 0.30%
1,200 Anheuser-Busch Cos., Inc. 80,250
---------
BUSINESS SERVICES 2.03%
5,000 CUC International, Inc. <F10> 170,625
4,900 Danka Business Systems ADR 181,300
3,825 Paychex, Inc. 190,772
---------
542,697
---------
CHEMICALS 1.37%
2,000 Chemed Corp. 77,750
1,100 Dow Chemical Co. 77,412
2,000 Geon Co. 48,750
600 Great Lakes Chemical Corp. 43,200
2,400 Sigma-Aldrich Corp. 118,800
---------
365,912
---------
COMPUTER COMPONENTS
AND SOFTWARE 2.25%
1,600 Broderbund Software, Inc. <F10> 97,200
3,500 Informix Corp. <F10> 105,000
1,500 Parametric Technology Corp. <F10> 99,750
2,600 Shared Medical Systems Corp. 141,375
4,200 Synopsys, Inc. <F10> 159,600
---------
602,925
---------
COMPUTER EQUIPMENT 0.74%
2,400 Adaptech, Inc. <F10> 98,400
1,100 International Business Machines
Corp. 100,925
---------
199,325
---------
COMPUTER SERVICES 1.39%
3,000 First Data Corp. 200,625
6,000 Sungard Data Systems, Inc. <F10> 171,000
---------
371,625
---------
CONSTRUCTION 1.24%
1,500 Armstrong World Industries, Inc. 93,000
4,000 Lowe's Cos., Inc. 134,000
3,500 USG Corp. <F10> 105,000
---------
332,000
---------
CONSUMER GOODS 0.60%
7,000 General Nutrition Co. <F10> 161,000
---------
CONSUMER SERVICES 0.10%
1,068 Jostens, Inc. 25,899
---------
CREDIT AND FINANCE 0.26%
1,500 Beneficial Corp. 69,937
---------
DRUGS 1.77%
800 American Home Products Corp. 77,600
900 Bristol-Myers Squibb Co. 77,288
2,030 Pharmacia & Upjohn, Inc. 78,663
5,200 Teva Pharmaceutical Industries
Ltd. ADR 241,150
---------
474,701
---------
ELECTRIC UTILITIES 1.14%
2,100 DTE Energy Co. 72,450
3,100 PP&L Resources, Inc. 77,500
2,900 Pacific Gas & Electric Co. 82,288
4,200 Washington Water Power Co. 73,500
---------
305,738
---------
ELECTRONICS 1.59%
1,500 General Electric Co. 108,000
2,700 LSI Logic Corp. <F10> 88,425
4,250 Molex, Inc. 134,937
1,800 Texas Instruments, Inc. 93,150
---------
424,512
---------
ENTERTAINMENT 2.15%
2,800 Clear Channel Communications, Inc. <F10> 123,550
4,500 Infinity Broadcasting Corp., Class A <F10> 167,625
1,400 Viacom, Inc., Class B <F10> 66,325
3,700 Walt Disney Co. 218,300
---------
575,800
---------
FINANCIAL SERVICES 1.13%
3,700 Bear Stearns Cos., Inc. 73,537
1,500 Finova Group, Inc. 72,375
3,300 Green Tree Financial Corp. 87,038
5,250 Mercury Finance Co. 69,562
---------
302,512
---------
FOOD 1.05%
2,400 Supervalu, Inc. 75,600
6,300 Sysco Corp. 204,750
---------
280,350
---------
FOREST AND PAPER PRODUCTS 1.65%
4,000 Alco Standard Corp. 182,500
2,000 Champion International Corp. 84,000
1,800 Potlatch Corp. 72,000
2,400 Weyerhaeuser Co. 103,800
---------
442,300
---------
HEALTH CARE EQUIPMENT
AND SUPPLIES 2.50%
3,000 Bard (C.R.), Inc. 96,750
1,900 Baxter International, Inc. 79,563
2,200 Medtronic, Inc. 122,925
5,300 Omnicare, Inc. 237,175
3,100 St. Jude Medical, Inc. 133,300
---------
669,713
---------
HOLDING COMPANIES 0.74%
5,000 Hanson PLC ADR 76,250
2,100 Harsco Corp. 122,062
---------
198,312
---------
HOSPITAL MANAGEMENT
AND SERVICES 1.34%
4,704 Columbia/HCA Healthcare Corp. 238,728
3,730 Vencor, Inc. <F10> 121,225
---------
359,953
---------
HOTELS 0.96%
3,400 Marriott International, Inc. 130,050
5,700 Promus Hotel Corp. <F10> 126,825
---------
256,875
---------
HOUSEHOLD APPLIANCES 0.29%
3,800 Maytag Corp. 76,950
---------
HOUSEHOLD PRODUCTS 0.37%
3,300 Dial Corp. 97,763
---------
INFORMATION SYSTEMS 0.29%
2,700 DST Systems, Inc. <F10> 76,950
---------
INSURANCE 2.84%
1,000 Aetna Life and Casualty Co. 69,250
2,200 American General Corp. 76,725
4,500 American Re Corp. 183,937
3,000 First Colony Corp. 76,125
1,200 MGIC Investment Corp. 65,100
2,500 PartnerRe Holdings Ltd. 68,750
2,700 Provident Cos., Inc. 91,463
2,900 Reliastar Financial Corp. 128,688
---------
760,038
---------
LEISURE 0.33%
3,700 Brunswick Corp. 88,800
---------
MACHINERY AND EQUIPMENT 1.23%
1,600 Applied Materials, Inc. <F10> 63,000
1,900 Briggs and Stratton Corp. 82,412
2,400 Deere & Co. 84,600
3,200 Trinity Industries, Inc. 100,800
---------
330,812
---------
MANUFACTURING 0.60%
5,100 Danaher Corp. 161,925
---------
MEDIA 0.37%
3,100 Evergreen Media Corp. <F10> 99,200
---------
MINING 0.97%
2,700 Newmont Mining Corp. 122,175
2,200 Phelps Dodge Corp. 136,950
---------
259,125
---------
NATURAL GAS UTILITIES 1.00%
3,300 Equitable Resources, Inc. 103,125
3,100 NICOR, Inc. 85,250
2,500 People's Energy Corp. 79,375
---------
267,750
---------
OFFICE EQUIPMENT 0.29%
1,400 Harris Corp. 76,475
---------
OIL AND GAS 7.38%
2,000 Amerada Hess Corp. 106,000
700 Atlantic Richfield Co. 77,525
6,600 Baker Hughes, Inc. 160,875
5,700 BJ Services Co. <F10> 165,300
2,000 Camco International, Inc. 56,000
52,000 Chevron Corp. 105,000
7,000 Dresser Industries, Inc. 170,625
5,100 ENSCO International, Inc. <F10> 117,300
1,200 Kerr-McGee Corp. 76,200
4,000 Louisiana Land & Exploration Co. 171,500
5,800 Noble Affiliates, Inc. 173,275
2,500 Texaco, Inc. 196,250
2,700 Triton Energy Corp. <F10> 154,913
6,200 Ultramar Corp. 159,650
2,000 Williams Cos., Inc. 87,750
---------
1,978,163
---------
PERSONAL SERVICES 0.39%
2,400 Service Corp. International 105,600
---------
PRINTING AND PUBLISHING 0.98%
3,000 Deluxe Corp. 87,000
1,500 Dun & Bradstreet Corp. 97,125
3,800 Harland (John H.) Co. 79,325
---------
263,450
---------
REAL ESTATE 0.30%
2,300 Meditrust Corp. 80,212
---------
RESTAURANTS 0.41%
5,200 Starbucks Corp. <F10> 109,200
---------
RETAIL 3.09%
9,500 K-Mart Corp. 68,875
2,800 May Department Stores Co. 118,300
4,700 Melville Corp. 144,525
4,000 Petsmart, Inc. <F10> 124,000
3,500 Tiffany & Co. 176,313
4,200 Viking Office Products, Inc. <F10> 195,300
---------
827,313
---------
SEMICONDUCTORS 0.88%
2,000 Intel Corp. 113,500
3,100 Linear Technology Corp. 121,675
---------
235,175
---------
STEEL/IRON 0.17%
800 Nucor Corp. 45,700
---------
TELECOMMUNICATIONS 2.37%
2,400 ADC Telecommunications, Inc. <F10> 87,600
4,100 Comsat Corp. 76,363
3,100 GTE Corp. 136,400
4,900 Pacific Telesis Group 164,763
2,000 Southern New England
Telecommunications Corp. 79,500
2,500 US West Communications Group 89,375
---------
634,001
---------
TEXTILES 0.26%
1,700 Springs Industries, Inc., Class A 70,337
---------
TOBACCO PRODUCTS 1.06%
2,700 American Brands, Inc. 120,487
1,800 Philip Morris Cos., Inc. 162,900
---------
283,387
---------
TRANSPORTATION 0.84%
3,000 Alexander & Baldwin, Inc. 69,000
1,600 GATX Corp. 77,800
1,700 PHH Corp. 79,475
---------
226,275
---------
WHOLESALE 0.49%
2,400 Cardinal Health, Inc. 131,400
---------
Total Common Stocks
(cost $13,282,932) 15,730,274
----------
Principal
Amount
------
FIXED INCOME BONDS 38.67%
ASSET-BACKED SECURITIES 2.83%
100,000 EQCC Home Equity Loan Trust,
8.95%, 1/15/15 111,374
175,000 Premier Auto Trust,
6.45%, 5/2/98 177,306
159,761 Premier Auto Trust,
4.90%, 10/15/98 158,810
175,000 Standard Credit Card Master Trust,
5.90%, 2/7/01 175,053
135,433 Union Federal Savings Bank Trust,
4.875%, 2/15/00 134,965
---------
757,508
---------
CONVERTIBLE CORPORATE BONDS 0.22%
50,000 Boston Chicken,
Convertible Subordinated Notes,
4.50%, 2/1/04 58,313
---------
Principal
Amount Value
- - ------ -----
CORPORATE BONDS 21.20%
200,000 Air Products and Chemicals, Inc.,
4.33%, 9/23/03 198,500
225,000 Associates Corp. of North America,
7.75%, 2/15/05 250,031
225,000 BarclaysAmerican Corp.,
7.875%, 8/15/98 236,531
225,000 Chesapeake & Potomac Telephone
Co. of Virginia,
8.375%, 10/1/29 275,344
200,000 Citicorp,
8.11%, 11/4/04 219,000
130,000 Commercial Credit Co.,
7.875%, 2/1/25 148,200
80,000 Commonwealth Edison Co.,
6.40%, 10/15/05 77,600
85,000 Ford Capital BV,
10.125%, 11/15/00 99,663
165,000 Ford Holdings, Inc.,
9.25%, 7/15/97 173,869
175,000 General Electric Capital Corp.,
8.30%, 9/20/09 209,343
150,000 General Motors Acceptance Corp.,
8.875%, 6/1/10 183,937
100,000 Grace (W.R.) & Co.,
8.00%, 8/15/04 108,625
250,000 Heller Financial Corp.,
9.375%, 3/15/98 268,437
150,000 Household Bank,
8.45%, 12/10/02 171,750
175,000 Household Finance Corp.,
6.25%, 10/15/97 176,969
250,000 Hydro-Quebec,
7.40%, 3/28/25 268,750
175,000 Lehman Brothers, Inc.,
5.04%, 12/15/03 173,848
150,000 Lehman Brothers, Inc.,
8.05%, 1/15/19 166,313
170,000 Nabisco, Inc.,
7.05%, 7/15/07 175,950
150,000 NationsBank Corp.,
8.57%, 11/15/24 176,437
175,000 New Jersey Bell Telephone Co.,
7.85%, 11/15/29 208,469
250,000 Pacific Gas & Electric Co.,
7.67%, 12/15/98 263,438
125,000 Procter & Gamble Co.,
8.00%, 10/26/29 150,469
75,000 Rodamco NV,
7.30%, 5/15/05 79,875
150,000 Rollins Truck Leasing,
7.00%, 3/15/01 156,375
175,000 Southern California Edison Co.,
5.60%, 12/15/98 175,000
230,000 Southtrust Corp.,
8.625%, 5/15/04 266,513
200,000 U.S. West Capital Funding, Inc.,
8.00%, 10/15/96 203,574
150,000 Virginia Electric & Power Co.,
9.30%, 6/9/99 165,937
300,000 Walt Disney Co.,
1.50%, 10/20/99 249,000
---------
5,677,747
---------
U.S. GOVERNMENT AGENCIES 10.80%
100,000 FHLMC, Series 1563, Class E,
4.75%, 3/15/06 96,395
250,000 FHLMC, Series 1576, Class PH,
6.00%, 1/15/08 244,553
450,000 FNMA, 15 Year TBA,
9.00%, 11/25/06<F11> 473,766
50,000 FNMA, Series 1993-191, Class PH,
6.00%, 5/25/08 48,823
450,000 FNMA, Series 1994-15, Class B,
4.75%, 2/25/09<F12> 446,518
550,000 FNMA, Series 1994-59, Class PE,
5.00%, 3/25/22 528,211
7,052 GNMA, Pool 031096,
9.50%, 6/15/09 7,574
671,766 GNMA, 9.00%, 12/15/22 714,801
175,000 Guaranteed Export Certificates,
6.28%, 6/15/04<F12> 177,210
150,000 Tennessee Valley Authority,
6.235%, 7/15/45 154,125
---------
2,891,976
---------
U.S. TREASURY OBLIGATIONS 3.62%
275,000 U.S. Treasury Bond,
8.125%, 5/15/21 347,644
300,000 U.S. Treasury Note,
4.625%, 2/29/96 299,790
150,000 U.S. Treasury Note,
8.00%, 5/15/01 168,029
680,000 U.S. Treasury Strips, 2/15/20 153,034
---------
968,497
---------
Total Fixed Income Bonds
(cost $9,901,634) 10,354,041
----------
SHORT-TERM INVESTMENTS 5.32%
1,426,361 United Missouri Bank
Money Market Fiduciary 1,426,361
----------
Total Short-Term Investments
(cost $1,426,361) 1,426,361
----------
Total Investments 102.73%
(cost $24,610,927) 27,510,676
Liabilities, less
Cash and Other Assets (2.73)% (731,859)
----------
NET ASSETS 100.00% $26,778,817
==========
<F10>Non-income producing
<F11>When-issued
<F12>A portion of this security is pledged as collateral for when-issued
purchase commitments outstanding as of December 31, 1995.
See notes to financial statements.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
FIXED INCOME EQUITY INCOME EQUITY GROWTH BALANCED
FUND FUND FUND FUND
---- ---- ---- ----
ASSETS:
Investments at value
(cost $35,108,422,
$36,238,928,
$13,242,715 and
$24,610,927,
respectively) $36,425,733 $42,443,845 $15,838,892 $27,510,676
Interest and dividends
receivable 432,658 137,331 15,802 167,407
Receivable for
securities sold -- -- 118,727 64,216
Organizational expenses,
net of
accumulated amortization 8,793 8,793 8,793 8,793
Prepaid expenses 7,259 4,713 5,155 5,902
---------- ---------- ---------- ----------
Total Assets 36,874,443 42,594,682 15,987,369 27,756,994
---------- ---------- ---------- ----------
LIABILITIES:
Payable for securities
purchased 1,210,950 433,028 44,491 806,397
Accrued expenses and
other payables 21,242 23,555 15,512 148,531
Accrued investment
advisory fee 25,400 35,720 15,708 23,249
---------- ---------- ---------- ----------
Total Liabilities 1,257,592 492,303 75,711 978,177
---------- ---------- ---------- ----------
NET ASSETS 35,616,851 42,102,379 15,911,658 26,778,817
========== ========== ========== ==========
NET ASSETS CONSIST OF:
Capital stock 350 356 131 243
Paid-in-capital in
excess of par 34,782,429 35,981,476 13,337,091 23,906,163
Undistributed net
investment income 5,915 319 -- 2,641
Accumulated net
realized loss
on investments (489,154) (84,689) (21,741) (29,979)
Net unrealized
appreciation
on investments 1,317,311 6,204,917 2,596,177 2,899,749
---------- ---------- ---------- ----------
Net Assets $35,616,851 $42,102,379 $15,911,658 $26,778,817
========== ========== ========== ===========
CAPITAL STOCK, $.0001 PAR VALUE
Authorized 125,000,000 125,000,000 125,000,000 125,000,000
Issued and outstanding 3,503,496 3,557,797 1,312,086 2,427,470
NET ASSET VALUE,
REDEMPTION PRICE AND
OFFERING PRICE
PER SHARE $10.17 $11.83 $12.13 $11.03
===== ===== ===== =====
See notes to financial statements.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
FIXED INCOME EQUITY INCOME EQUITY GROWTH BALANCED
FUND FUND FUND FUND
---- ---- ---- ----
INVESTMENT INCOME:
Interest $2,155,412 $ 76,010 $ 48,701 $ 961,168
Dividends -- 1,334,769 124,523 339,293
--------- --------- --------- ---------
2,155,412 1,410,779 173,224 1,300,461
--------- --------- --------- ---------
EXPENSES:
Investment advisory fees 200,763 367,212 123,755 296,312
Administration and
fund accounting fees 67,763 74,366 25,062 59,986
Shareholder servicing fees 26,486 27,656 21,070 24,859
Legal fees 9,792 10,527 3,685 8,707
Pricing fees 8,537 3,030 4,760 13,546
Audit fees 5,200 5,200 5,200 5,200
Reports to shareholders 3,747 4,531 1,425 3,685
Other 2,481 2,621 974 2,269
Amortization of
organization expenses 2,391 2,391 2,391 2,391
Insurance 774 774 774 774
Federal and state
registration fees 82 3,092 1,931 2,089
Custody fees -- 1,600 7,784 13,345
--------- --------- --------- ---------
Total expenses before
waiver 328,016 503,000 198,811 433,163
Less: Waiver of expenses -- -- (13,165) (1,787)
--------- --------- --------- ---------
Net Expenses 328,016 503,000 185,646 431,376
--------- --------- --------- ---------
NET INVESTMENT
INCOME (LOSS) 1,827,396 907,779 (12,422) 869,085
--------- --------- --------- ---------
REALIZED AND UNREALIZED GAIN:
Net realized gain
on investments 387,462 2,568,064 907,467 1,793,984
Change in unrealized
appreciation
on investments 2,799,242 7,585,055 2,318,801 3,484,654
--------- ---------- --------- ---------
Net gain on investments 3,186,704 10,153,119 3,226,268 5,278,638
--------- ---------- --------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $5,014,100 $11,060,898 $3,213,846 $6,147,723
========= ========== ========= =========
See notes to financial statements.
STATEMENTS OF CHANGES IN NET ASSETS
FIXED INCOME EQUITY INCOME
FUND FUND
---- ----
Jan. 3, Jan. 3,
Year 1994<F13> Year 1994<F13>
ended through ended through
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1995 1994 1995 1994
---- ---- ---- ----
OPERATIONS:
Net investment
income (loss) $ 1,827,396 $ 1,376,342 $ 907,779 $ 1,108,446
Net realized gain
(loss) on
investments 387,462 (882,688) 2,568,064 (656,912)
Change in unrealized
appreciation
(depreciation) on
investments 2,799,242 (1,481,931) 7,585,055 (1,380,138)
--------- ---------- --------- ----------
Net increase
(decrease) in net
assets resulting
from operations 5,014,100 (988,277) 11,060,898 (928,604)
--------- --------- ---------- ---------
DISTRIBUTIONS OF:
Net investment income (1,835,221) (1,358,530) (919,555) (1,098,351)
Net realized gains -- -- (1,995,841) --
--------- --------- ---------- ----------
Total distributions (1,835,221) (1,358,530) (2,915,396) (1,098,351)
--------- --------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold 8,894,331 33,583,952 5,469,235 37,512,995
Shares issued to
holders in
reinvestment of
distributions 1,816,185 1,194,305 3,116,750 820,015
Shares redeemed (6,419,602) (4,309,392) (6,845,993) (4,114,170)
---------- ---------- ---------- ----------
Net increase (decrease) 4,290,914 30,468,865 1,739,992 34,218,840
---------- ---------- --------- ----------
TOTAL INCREASE (DECREASE) IN
NET ASSETS 7,469,793 28,122,058 9,885,494 32,191,885
NET ASSETS:
Beginning of period 28,147,058 25,000 32,216,885 25,000
---------- ---------- ---------- ----------
End of period $35,616,851 $28,147,058 $42,102,379 $32,216,885
========== ========== ========== ==========
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
EQUITY GROWTH BALANCED
FUND FUND
---- ----
Jan. 3, Jan. 3,
Year 1994<F13> Year 1994<F13>
ended through ended through
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1995 1994 1995 1994
---- ---- ---- ----
OPERATIONS:
Net investment
income (loss) $ (12,422) $ 11,941 $ 869,085 $ 835,545
Net realized gain
(loss) on investments 907,467 (929,208) 1,793,984 (1,256,936)
Change in unrealized
appreciation
(depreciation) on
investments 2,318,801 277,376 3,484,654 (584,905)
--------- --------- ----------- -----------
Net increase (decrease)
in net assets resulting
from operations 3,213,846 (639,891) 6,147,723 (1,006,296)
--------- --------- ----------- -----------
DISTRIBUTIONS OF:
Net investment income -- (12,793) (878,699) (823,694)
Net realized gains -- -- (568,623) --
--------- ---------- ----------- ----------
Total distributions -- (12,793) (1,447,322) (823,694)
--------- ---------- ----------- ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold 3,722,084 11,436,574 1,867,499 33,447,975
Shares issued to
holders in
reinvestment of
distributions 11,612 -- 1,562,410 606,938
Shares redeemed (1,140,257) (704,517) (11,465,880) (2,135,536)
---------- ---------- ----------- -----------
Net increase (decrease) 2,593,439 10,732,057 (8,035,971) 31,919,377
---------- ---------- ------------ ----------
TOTAL INCREASE (DECREASE) IN
NET ASSETS 5,807,285 10,079,373 (3,335,570) 30,089,387
NET ASSETS:
Beginning of period 10,104,373 25,000 30,114,387 25,000
---------- ---------- ---------- ----------
End of period $15,911,658 $10,104,373 $26,778,817 $30,114,387
========== ========== ========== ==========
<F13> Commencement of operations.
See notes to financial statements.
FINANCIAL HIGHLIGHTS
FIXED INCOME EQUITY INCOME
FUND FUND
---- ----
Jan. 3, Jan. 3,
Year 1994<F14> Year 1994<F14>
ended through ended through
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1995 1994 1995 1994
---- ---- ---- ----
Net asset value,
beginning of period $9.24 $10.00 $9.39 $10.00
Income from investment operations:
Net investment
income (loss) 0.54 0.46 0.28 0.32
Net realized and
unrealized gains
(losses) on investments 0.93 (0.77) 3.03 (0.61)
----- ------ ----- ------
Total from investment
operations 1.47 (0.31) 3.31 (0.29)
----- ------ ----- ------
Less distributions:
Dividends from net
investment
income (0.54) (0.45) (0.28) (0.32)
Distributions from
net realized gains -- -- (0.59) --
------ ------ ------ ------
Total distributions (0.54) (0.45) (0.87) (0.32)
Net asset value, end
of period $10.17 $ 9.24 $11.83 $ 9.39
===== ===== ===== =====
Total return<F15> 16.26% (3.09)% 35.62% (2.93)%
Supplemental data and ratios:
Net assets, end of
period
(in thousands) $35,617 $28,147 $42,102 $32,217
Ratio of net expenses
to average
net assets<F16><F17> 0.98% 1.00% 1.37% 1.45%
Ratio of net investment
income (loss) to
average net assets<F16><F17> 5.46% 4.84% 2.47% 3.33%
Portfolio turnover rate <F15> 126% 139% 40% 106%
FINANCIAL HIGHLIGHTS (CONTINUED)
EQUITY GROWTH BALANCED
FUND FUND
---- ----
Jan. 3, Jan. 3,
Year 1994<F14> Year 1994<F15>
ended through ended through
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1995 1994 1995 1994
---- ---- ---- ----
Net asset value,
beginning of period $9.31 $10.00 $9.43 $10.00
Income from investment operations:
Net investment
income (loss) (0.01) 0.01 0.32 0.26
Net realized and
unrealized gains
(losses) on investments 2.83 (0.69) 1.84 (0.57)
----- ------- ------ -------
Total from investment
operations 2.82 (0.68) 2.16 (0.31)
----- ------- ------ -------
Less distributions:
Dividends from net
investment income -- (0.01) (0.33) (0.26)
Distributions from net
realized gains -- -- (0.23) --
----- ------ ------ ------
Total distributions -- (0.01) (0.56) (0.26)
----- ------ ------ ------
Net asset value, end
of period $12.13 $9.31 $11.03 $9.43
===== ==== ===== ====
Total return <F15> 30.29% (6.78)% 23.14% (3.06)%
Supplemental data and ratios:
Net assets, end of period
(in thousands) $15,912 $10,104 $26,779 $30,114
Ratio of net expenses
to average
net assets<F16><F17> 1.50% 1.50% 1.46% 1.49%
Ratio of net investment
income (loss) to
average net
assets<F16><F17> (0.10)% 0.14% 2.93% 2.75%
Portfolio turnover
rate <F15> 102% 98% 118% 111%
<F14>Commencement of operations.
<F15>Not annualized for the period from January 3, 1994 through December 31,
1994.
<F16>Net of waivers. Absent waivers, the ratio of net expenses to average net
assets would be 0.98% and 1.11% for the Fixed Income Fund; 1.37% and 1.45% for
the Equity Income Fund; 1.61% and 1.76% for the Equity Growth Fund; and 1.46%
and 1.49% for the Balanced Fund, respectively. The ratio of net investment
income (loss) to average net assets would be 5.46% and 4.73% for the Fixed
Income Fund; 2.47% and 3.33% for the Equity Income Fund; (0.21)% and (0.12)% for
the Equity Growth Fund; and 2.93% and 2.75% for the Balanced Fund, respectively.
<F17>Annualized for the period from January 3, 1994 through December 31, 1994.
See notes to financial statements.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. ORGANIZATION
The Aquinas Funds, Inc. was incorporated on October 20, 1993 as a Maryland
Corporation and is registered as a diversified open-end management investment
company under the Investment Company Act of 1940. The Fixed Income, Equity
Income, Equity Growth and Balanced Funds (the "Funds") are separate,
diversified portfolios of The Aquinas Funds, Inc. The Funds are managed by
Aquinas Investment Advisers, Inc. (the "Adviser") and commenced operations on
January 3, 1994.
Costs incurred with the organization, initial registration and public
offering of shares aggregating $12,959 for each of the Fixed Income, Equity
Income, Equity Growth and Balanced Funds have been paid by the Funds. These
costs were deferred and are being amortized over a period of not more than five
years from the Funds' commencement of operations. The proceeds of any
redemption of the initial shares by the original shareholder or any transferee
will be reduced by a pro rata portion of any then unamortized deferred
organizational expenses in the same proportion as the number of initial shares
being redeemed bears to the number of initial shares outstanding at the time of
such redemption.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation - Securities traded over-the-counter or on a national
securities exchange are valued on the basis of market value in their principal
and most representative market. Securities where the principal and most
representative market is a national securities exchange are valued at the latest
reported sale price on such exchange. Exchange-traded securities for which
there were no transactions are valued at the latest reported bid price.
Securities traded on only over-the-counter markets are valued at the latest bid
prices. Debt securities (other than short-term obligations) are valued at
prices furnished by a pricing service, subject to review by the Funds' Adviser
and determination of the appropriate price whenever a furnished price is
significantly different from the previous day's furnished price. Short-term
obligations (maturing within 60 days) are valued on an amortized cost basis,
which approximates value. Securities for which quotations are not readily
available and other assets are valued at fair value as determined in good faith
by the Adviser under the supervision of the Board of Directors.
b) Delayed Delivery Transactions - The Funds may purchase or sell securities
on a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered and
paid for are fixed at the time the transaction is negotiated. Losses may arise
due to changes in the market value of the underlying securities or if the
counterparty does not perform under the contract.
c) Federal Income Taxes - No provision for federal income taxes has been made
since the Funds have complied to date with the provisions of the Internal
Revenue Code available to regulated investment companies and intend to continue
to so comply in future years. As of December 31, 1995, each of the Fixed Income
and Equity Growth Funds had a federal income tax capital loss carryforward of
$488,053 and $17,121, respectively, expiring in 2002.
d) Distributions to Shareholders - All of the Funds except the Fixed Income
Fund pay dividends of net investment income quarterly. The Fixed Income Fund
declares and pays dividends of net investment income monthly. Distributions of
net realized capital gains, if any, will be declared at least annually.
Distributions to shareholders are recorded on the ex-dividend date.
The character of distributions made during the year from net investment income
or net realized gains may differ from the characterization for federal income
tax purposes due to differences in the recognition of income, expense or gain
items for financial statement and tax purposes. Where appropriate,
reclassifications between net asset accounts are made for such differences that
are permanent in nature. Accordingly, at December 31, 1995, reclassifications
were recorded to increase undistributed net investment income by $4,996, $1,024,
$12,299, and $3,966; increase accumulated net realized loss on investments by
$3,972, $0, $0, and $2,942; and decrease paid-in-capital in excess of par by
$1,024, $1,024, $12,299 and $1,024 for the Fixed Income, Equity Income, Equity
Growth and Balanced Funds, respectively.
For the year ended December 31, 1995, 0%, 100%, 0% and 38% of dividends paid
from net investment income, excluding short-term capital gains, qualifies for
the dividends received deduction available to corporate shareholders of the
Fixed Income, Equity Income, Equity Growth and Balanced Funds, respectively.
e) Expenses - Each Fund is charged for those expenses that are directly
attributable to it, such as investment advisory and custody fees. Expenses that
are not directly attributable to a Fund are typically allocated among the Funds
in proportion to their respective net assets.
f) Other - Investment transactions are accounted for on the trade date plus one.
The Funds determine the gain or loss realized from investment transactions by
comparing the original cost of the security lot sold with the net sale proceeds.
Dividend income is recognized on the ex-dividend date and interest income is
recognized on an accrual basis. Premiums and discounts on securities purchased
are amortized using a yield-to-maturity method.
3. INVESTMENT ADVISORY AND OTHER AGREEMENTS
Each of the Funds has entered into an agreement with the Adviser, with whom
certain officers and directors of the Funds are affiliated, to furnish
investment advisory services to the Funds. Under the terms of this agreement,
the Funds will pay the Adviser a fee, computed daily and payable monthly, at the
annual rate of the following percentage on average daily net assets: 0.60% for
the Fixed Income Fund; and 1.00% for the Equity Income, Equity Growth and
Balanced Funds.
The Adviser voluntarily agreed to reimburse its management fee to the extent
that total annual operating expenses (exclusive of interest, taxes, brokerage
commissions and other costs incurred in connection with the purchase or sale of
portfolio securities, and extraordinary items) exceed 1.00% of the average net
assets of the Fixed Income Fund and 1.50% of the average net assets of the
Equity Income, Equity Growth and Balanced Funds, respectively, computed on a
daily basis. Expenses of $13,165 were waived by the Adviser in the Equity
Growth Fund.
Sunstone Financial Group, Inc. (the "Administrator") may periodically
volunteer to reduce all or a portion of its administrative fee with respect to
one or more of the Funds. These waivers may be terminated at any time at the
Administrator's discretion. The Administrator may not seek reimbursement of
such voluntarily reduced fees at a later date. The reduction of such fee will
cause the yield of that Fund to be higher than it would be in the absence of
such reduction. Administrative fees of $1,787 were waived in the Balanced Fund.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds for the year ended December 31, 1995, were
as follows:
Fixed Income Equity Income Equity Growth Balanced
Fund Fund Fund Fund
---- ---- ---- ----
Shares sold 918,743 478,079 330,069 177,937
Shares issued to
holders in
reinvestment of
dividends 186,127 273,398 1,247 147,765
Shares redeemed (649,025) (625,087) (104,622) (1,090,677)
-------- -------- -------- ----------
Net increase (decrease) 455,845 126,390 226,694 (764,975)
======== ======== ======== ==========
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Funds for the year ended December 31, 1995, were as
follows:
Fixed Income Equity Income Equity Growth Balanced
Fund Fund Fund Fund
---- ---- ---- ----
Purchases
U.S. Government $15,799,073 -- -- $ 8,018,872
Other 27,032,804 $13,937,962 $14,504,812 24,903,141
Sales
U.S. Government 18,793,008 -- -- 10,030,285
Other 20,907,203 16,036,731 11,820,841 31,157,876
At December 31, 1995, gross unrealized appreciation and depreciation on
investments, based on cost for federal income tax purposes of $35,109,523,
$36,323,057, $13,247,335, and $24,644,337, were as follows:
Fixed Income Equity Income Equity Growth Balanced
Fund Fund Fund Fund
---- ---- ---- ----
Appreciation $1,320,916 $6,810,098 $2,694,371 $3,056,384
(Depreciation) (4,706) (689,310) (102,814) (190,045)
--------- --------- --------- ---------
Net appreciation on
investments $1,316,210 $6,120,788 $2,591,557 $2,866,339
========= ========= ========= =========
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of
The Aquinas Funds, Inc.:
We have audited the accompanying statements of assets and liabilities of The
Aquinas Funds, Inc. (a Maryland corporation, which includes the Aquinas Fixed
Income Fund, Aquinas Equity Growth Fund, Aquinas Equity Income Fund, and Aquinas
Balanced Fund), including the schedules of investments, as of December 31, 1995,
and the related statements of operations for the year then ended, statements of
changes in net assets for the year then ended and the period from January 3,
1994 (commencement of operations) through December 31, 1994, and the financial
highlights for the year then ended and the period from January 3, 1994
(commencement of operations) through December 31, 1994. These financial
statements and financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodians and brokers. As to
securities purchased but not received, we requested confirmation from brokers
and, when replies were not received, we carried out other alternative auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides 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 The
Aquinas Funds, Inc. as of December 31, 1995, and the results of its operations
for the year then ended, the changes in its net assets for the year then ended
and the period from January 3, 1994 (commencement of operations) through
December 31, 1994, and its financial highlights for the year then ended and the
period from January 3, 1994 (commencement of operations) through December 31,
1994, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
January 22, 1996
AQUINAS FUNDS
ANNUAL REPORT
THE AQUINAS FUNDS, INC.
P.O. Box 419533
Kansas City, MO 64141-6533
Telephone: 1 (800) 423-6369
This report is authorized for distribution only when preceded or accompanied by
a current prospectus.
December 31, 1995
