Table of Contents
LETTER TO SHAREHOLDERS .................................................... 2
COMMENTS FROM
INVESTMENT ADVISOR ........................................................ 3
PORTFOLIO INVESTMENT RETURNS
Small/Mid Cap Equity Portfolio .................................... 4
Core Equity Portfolio ............................................. 5
Balanced Portfolio ................................................ 6
Intermediate Fixed Income Portfolio ............................... 7
SCHEDULEs OF INVESTMENTS
Small/Mid Cap Equity Portfolio .................................... 8
Core Equity Portfolio ............................................. 11
Balanced Portfolio ................................................ 15
Intermediate Fixed Income Portfolio ............................... 20
STATEMENTS OF
ASSETS AND LIABILITIES .................................................... 22
STATEMENTS OF OPERATIONS .................................................. 23
STATEMENTS OF CHANGES
IN NET ASSETS ............................................................. 24
FINANCIAL HIGHLIGHTS ...................................................... 26
NOTES TO FINANCIAL STATEMENTS ............................................. 28
DIRECTORY OF FUNDS'
SERVICE PROVIDERS ......................................................... 30
INDEX DESCRIPTIONS ........................................................ 30
Rainier Investment Management Mutual Funds
601 Union Street, Suite 2801
Seattle, Washington 98101
(800) 248-6314
This report and the financial statements contained herein are provided for the
general information of the shareholders of the Rainier Investment Management
Mutual Funds. This report is not authorized for distribution to prospective
investors in the Funds unless preceded or accompanied by an effective
prospectus. For more information on any Fund, including charges and expenses,
call (800) 248-6314 for a free prospectus. Read it carefully before you invest
or send money.
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholders,
As Chairman of Rainier Investment Management No-Load Mutual Funds and a
fellow shareholder in the Funds, I'd like to express my appreciation for your
valued investment in one or more of the four Portfolios covered in this report.
If you are a new shareholder, welcome! This Semi-Annual Report contains
unaudited financial statements for the six months ending September 30, 1996. The
audited Annual Report is produced as of March 31 of each year.
As you review this Semi-Annual Report, you will find commentary describing
the general environment of the equity and fixed-income capital markets. Also,
you will see summaries for each of the four Portfolios, which provide
performance information for the last six months, followed by investment total
returns. Finally, this Semi-Annual Report contains financial statements
detailing the expenses of the Portfolios and the Portfolio holdings as of
September 30, 1996.
I am pleased to report to the shareholders that the Funds are operating to
our complete satisfaction. The Funds continue to grow steadily. The back office
is running smoothly. The Portfolio returns have been very strong in a difficult,
but surprisingly resilient, market environment. Once again, the Funds have been
the subject of several favorable articles by the national financial media.
Forbes, Financial World and Money Magazine have recently featured our
disciplined and successful equity management process.
Also of interest to shareholders is a new policy governing our relationship
with brokers with whom we do business in the purchase and sale of securities. To
avoid any potential conflict of interest, the employees of Rainier Investment
Management, Inc.(R), the Advisor to the Funds, may not receive consideration of
any nature from any broker. Participation in broker-sponsored activities with no
obvious research content, such as sporting events and fishing trips, is not
permitted. This new policy, in conjunction with our long standing Code of Ethics
prohibiting our employees from purchasing individual securities for their own
accounts, places the Rainier Investment Management Mutual Funds squarely on the
side of our shareholders.
New shareholders should know that most of the employees and all of the
principals of Rainier Investment Management are shareholders in the Funds. As
fellow shareholders, we experience first-hand the investment results of the
Funds. Like you, we have children to educate, retirements to plan and dreams to
finance.
We are interested in your on-going feedback. If you have any ideas that can
help us improve our service, please call us. Thank you again for your investment
in the Rainier Investment Management Family of No-Load Mutual Funds. We look
forward to the continued challenge and opportunity of meeting your investment
needs.
Sincerely,
/s/ J. Glenn Haber
J. Glenn Haber
Chairman
Rainier Investment Management Mutual Funds
<PAGE>
COMMENTS FROM INVESTMENT ADVISOR
About the Advisor: The Investment Advisor to the Funds is Rainier
Investment Management, Inc.(R) (RIM) located in Seattle, Washington. RIM is one
of America's leading investment advisory firms, managing over $3.0 billion of
discretionary assets for primarily institutional clients.
Equity Comments
Led by large capitalization issues, the stock market zig-zagged its way to
higher ground during the last six months. Investors had to endure a "sideways"
market and above-average volatility before stocks rallied in August and
September to register solid gains for the six-month period. The Standard &
Poor's 500 Index gained 7.8%, while secondary indices such as the Russell
Midcap(TM)Index and the Russell 2000(R)Index increased between 5-6%.
In response to stronger economic growth, interest rates began to move
higher in the spring. This upward trend in rates, coupled with a heavy supply of
new stock (initial public offerings), triggered a sharp sell-off of stocks in
July. Investor confidence was restored when it became apparent that the surge in
economic growth seen in the spring was moderating. A firmer bond market
encouraged stock investors, although market leadership was confined to a
relatively narrow group of largely defensive "blue-chip" stocks.
As we look toward the end of 1996 and to next year, we are cautious. We
continue to find attractive opportunities in which to invest, but are also
cognizant of the large increase in stock prices that has taken place during the
last two years. The concentration of market leadership in a somewhat limited
number of issues is a concern, as is the high degree of enthusiasm that
continues to pervade the investment management industry and the general public.
While we continue to be broadly diversified, we are leaning towards defensive
holdings in our Portfolios and avoiding highly priced stocks.
James R. Margard, CFA
David A. Veterane, CFA
Peter M. Musser, CFA
Mark H. Dawson, CFA
FIXED INCOME COMMENTS
The fixed-income markets finished the last six months priced to the view
that the Federal Reserve is unlikely to raise interest rates during the
remainder of the year. After a robust June quarter, the last three months
moderated to the extent that, combined with benign inflation, the result is an
economy able to move ahead without Fed interference. The markets experienced
increased volatility during the summer months as employment data confirmed a
full employment status, normally a precursor to wage and subsequent core
inflation. Yet, the Fed held off raising rates and continues to do so into the
election quarter.
Overall, interest rates rose approximately 40 basis points and the yield
curve steepened. Cash remained steady, due primarily to the demand for liquidity
during a period of rising rates on longer bonds. Investment managers, in
general, preferred shorter maturity portfolio composition than their comparative
indices. An interesting divergence was the demand for lower-quality paper in
order to add incremental return in a period that would call for a
flight-to-quality strategy. The strength of corporate balance sheets and the
continued tightening of corporate spreads to U.S. Treasuries have contributed to
this search for "a little extra" yield. Credit quality among issuers has
improved with a record number of upgrades to downgrades during this time period.
Real returns after inflation remain good.
Looking ahead, we expect to see bonds trade within narrow bands of today's
levels with a slight bias to the lower end of rates. If the Fed tightens after
the election, the market could perceive the move positively within the stated
policy of moderate expansion.
Patricia L. Frost, CEO
Michael E. Raney, CFA
<PAGE>
PORTFOLIO INVESTMENT RETURNS
[Logo]
Small/Mid Cap Equity Portfolio
Objective: The Small/Mid Cap Equity Portfolio seeks to provide investors
with maximum long-term capital appreciation. The Investment Advisor constructs a
diversified portfolio of small and medium capitalization common stocks.
Commentary: The Small/Mid Cap Portfolio enjoyed an excellent six-month
period, with investment returns surpassing not only the Russell Midcap(TM) and
Russell 2000(R) indices but also the S&P 500 Index. Performance during the
summer "correction" was particularly strong. In July, when many benchmarks for
smaller stocks were down 6-10%, the Portfolio declined slightly less than 5%. As
stocks resumed their upward climb in the final two months of the period, the
Portfolio continued to deliver solid relative performance. Financial, consumer
cyclical and energy issues were particularly rewarding during the period. Among
the stand-out stocks in these sectors were ITT Hartford (insurance), Washington
Mutual (savings bank), Herman Miller (office furniture), Pep Boys (auto parts
and service), Oryx Energy (oil and gas exploration) and Pennzoil (diversified
energy). We continue to focus on identifying the most attractive growth
opportunities without "overpaying." Although this strategy lagged behind many
other growth funds early in the year, it is again demonstrating its merits in
the choppy environment that we have seen in recent months.
COMPARISION OF CHANGE IN VALUE OF $10,000
5/10/94 3/31/96 9/30/96
- ------------------------------------------------------------------------------
Small/Mid Cap Equity Portfolio 10,000 16,520 17,815
Standard & Poor's 500 Stock Index 10,000 15,190 16,368
Russel Mid-Cap(T) Index 10,000 14,539 15,417
Consumer Price Index 10,000 10,563 10,706
Total Returns for Periods Ending September 30,
1996 Inception
3 Months 9 Months 1 Year to 9/30/96*
- --------------------------------------------------------------------------------
Small/Mid Cap Equity Portfolio 6.3% 13.9% 22.8% 27.3%
- --------------------------------------------------------------------------------
Standard & Poor's 500 Stock Index 3.1 13.6 20.4 22.9
- --------------------------------------------------------------------------------
Russell Midcap(TM) Index 3.1 12.4 16.1 19.8
- --------------------------------------------------------------------------------
Consumer Price Index 0.7 2.8 3.0 2.9
- --------------------------------------------------------------------------------
*Average annual return since 5/10/94.
See page 30 for index descriptions. Total return assumes reinvestment of
dividends and distributions. Past performance is not predictive of future
results. Investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. The Advisor is
currently limiting fund expenses, which enhances return.
<PAGE>
[Logo]
Core Equity Portfolio
Objective: The Core Equity Portfolio seeks to maximize long-term capital
appreciation. The Fund invests primarily in a diversified portfolio of common
stocks of U.S. companies.
Commentary: The stock market covered a lot of territory during the last six
months. After surging to new highs in the spring, equities swooned in June and
July, with high-priced technology issues bearing the brunt of the downturn. The
correction was short and swift, however, as equities regained momentum in August
and September. As the September quarter came to a close, the market was once
again close to all-time highs. Despite considerable volatility, investor
confidence remained high as interest rates resumed a modest decline and
corporate profits continued to be robust. Large capitalization stocks have led
the market in 1996, and the Core Equity Portfolio has benefited from its
holdings in General Electric, Warner-Lambert, Bristol-Myers Squibb, Procter &
Gamble, Intel, and Microsoft. While we are retaining our generally positive
outlook for the market, the remarkable rise in stock prices during the last two
years, and the generally bullish sentiment of both Wall Street and the general
public are a concern. We, therefore, continue to concentrate on aspects of our
strategy that reduce risk--broad diversification, reasonable valuation, industry
leadership and dividend yield.
COMPARISON OF CHANGE IN VALUE OF $10,000
5/10/94 3/31/96 9/30/96
- ------------------------------------------------------------------------------
Core Equity Portfolio 10,000 16,341 17,815
Standard & Poor's 500 Stock Index 10,000 15,190 16,368
Consumer Price Index 10,000 10,563 10,706
Total Returns for Periods Ending September 30, 1996
Inception
3 Months 9 Months 1 Year to 9/30/96*
- --------------------------------------------------------------------------------
Core Equity Portfolio 4.2% 13.6% 21.6% 26.5%
- --------------------------------------------------------------------------------
Standard & Poor's 500 Stock Index 3.1 13.6 20.4 22.9
- --------------------------------------------------------------------------------
Consumer Price Index 0.7 2.8 3.0 2.9
- --------------------------------------------------------------------------------
*Average annual return since 5/10/94.
See page 30 for index descriptions. Total return assumes reinvestment of
dividends and distributions. Past performance is not predictive of future
results. Investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. The Advisor is
currently limiting fund expenses, which enhances return.
<PAGE>
[Logo]
Balanced Portfolio
Objective: The Balanced Portfolio seeks to provide investors with a balance
of long-term capital appreciation and current income. The Fund invests primarily
in a diversified portfolio of common stocks of U.S. companies, investment grade
intermediate-term debt securities and cash equivalent securities.
Commentary: The Balanced Portfolio recorded a solid return during the last
six months, rising just over 4%. Stocks were again led by large "blue-chip"
issues such as Bristol-Myers Squibb, General Electric, Intel, Travelers,
ConAgra, Abbott Labs, Boeing and Atlantic Richfield. Investor attention during
the six-month period was focused on a potential increase in interest rates.
Signs of moderating growth in the late summer, however, caused the Federal
Reserve to hold rates steady, thereby boosting the fortunes of the bond market.
The improved outlook for interest rates has been a key factor in helping both
stocks and bonds to recover from their summer downturn. Furthermore, to the
benefit of stocks, corporate profits have held up well, and prospects for growth
in the final leg of the 1996 calendar year look reasonably good. We continue to
use a 55-60% equity allocation as our target range in the Portfolio.
COMPARISION OF CHANGE IN VALUE OF $10,000
5/10/94 3/31/96 9/30/96
- ------------------------------------------------------------------------------
Balanced Portfolio 10,000 15,190 14,773
Standard & Poor's 500 Stock Index 10,000 14,094 16,368
Balanced Index 10,000 13,241 13,917
Consumer Price Index 10,000 10,563 10,706
Total Returns for Periods Ending September 30, 1996
Inception
3 Months 9 Months 1 Year to 9/30/96*
- --------------------------------------------------------------------------------
Balanced Portfolio 2.9% 7.6% 14.2% 17.7%
- --------------------------------------------------------------------------------
Balanced Index (50/40/10) 2.4 7.8 12.6 14.8
- --------------------------------------------------------------------------------
Standard & Poor's 500 Stock Index 3.1 13.6 20.4 22.9
- --------------------------------------------------------------------------------
Lehman Brothers Government/
Corporate Intermediate Bond Index 1.8 1.6 5.1 7.6
- --------------------------------------------------------------------------------
Consumer Price Index 0.7 2.8 3.0 2.9
- --------------------------------------------------------------------------------
*Average annual return since 5/10/94.
See page 30 for index descriptions. Total return assumes reinvestment of
dividends and distributions. Past performance is not predictive of future
results. Investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. The Advisor is
currently limiting fund expenses, which enhances return.
<PAGE>
[Logo]
Intermediate Fixed Income Portfolio
Objective: The Intermediate Fixed Income Portfolio seeks to provide
investors with current income. The Fund invests primarily in a diversified
portfolio of investment grade, intermediate-term debt securities providing
current income. The Portfolio does not use risky derivative instruments.
Commentary: For the six-month period ending September, the overall level of
interest rates rose approximately 40 basis points, but activity within the
period was choppy and uncertain. Investors were concerned that the Federal
Reserve might move to raise rates to slow a strong economy, which resulted in
rising daily trading volatility. The Portfolio benefited most during this time
period by maintaining a higher commitment to cash equivalents, shorter maturity
intermediate bonds and higher quality individual credits. The financial sector
continued to perform well as yield spreads tightened relative to U.S. Treasury
issues. The Portfolio participated heavily in this sector within its corporate
bond allocation and continued to hold a strong position in Treasury issues.
Overall, credit quality remains at AA. If the economy continues at a moderate
pace and shows evidence of slowing from the last quarter, cash will be committed
to longer intermediate bonds to capture the current range of interest rates. We
will continue to move within our overall philosophy of high quality and current
income.
COMPARISION OF CHANGE IN VALUE OF $10,000
5/10/94 3/31/96 9/30/96
- ------------------------------------------------------------------------------
Intermediate Fixed Income Portfolio 10,000 16,520 11,635
Lehman Intermediate Bond Index 10,000 11,421 11,902
Consumer Price Index 10,000 10,563 10,706
Total Returns for Periods Ending September 30, 1996
Inception
3 Months 9 Months 1 Year to 9/30/96*
- --------------------------------------------------------------------------------
Intermediate Fixed Income Portfolio 1.4% 1.2% 4.5% 6.5%
- --------------------------------------------------------------------------------
Lehman Brothers Government/
Corporate Intermediate Bond Index 1.8 1.6 5.1 7.6
- --------------------------------------------------------------------------------
91-Day Treasury Bill Index 1.3 3.9 5.3 5.3
- --------------------------------------------------------------------------------
Consumer Price Index 0.7 2.8 3.0 2.9
- --------------------------------------------------------------------------------
*Average annual return since 5/10/94.
See page 30 for index descriptions. Total return assumes reinvestment of
dividends and distributions. Past performance is not predictive of future
results. Investment return will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. The Advisor is
currently limiting fund expenses, which enhances return.
<PAGE>
SCHEDULES OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Small/Mid Cap Equity Portfolio
Par Value Value
--------- -----
VARIABLE RATE DEMAND NOTES
(4.22%)
American Family
5.1956% 12-31-2031 $687,756 $ 687,756
General Mills
5.1900% 12-31-2031 249,102 249,102
Johnson Controls Inc.
5.2160% 12-31-2031 1,864,492 1,864,492
Pitney Bowes
5.1946% 12-31-2031 195,000 195,000
Sara Lee Corp.
5.1744% 12-31-2031 395,000 395,000
Southwestern Bell Corp.
5.1757% 12-31-2031 160,000 160,000
Warner-Lambert Co.
5.1660% 12-31-2031 440,847 440,847
Wisconsin Electric
5.2356% 12-31-2031 454,000 454,000
----------
TOTAL DEMAND NOTES (cost $4,446,198) $4,446,198
----------
Common Stocks (94.59%) Shares Value
------ -----
Autos and Transportation (1.61%)
Air Transportation (1.60%)
Alaska Air Group Inc. 48,000 $1,026,000
Southwest Airlines Co. 29,000 663,375
----------
Total Air Transportation 1,689,375
----------
Consumer Discretionary (15.61%)
Consumer Products (0.44%)
Lancaster Colony Corp. 12,000 459,000
----------
Household Equipment and Products (1.36%)
Black & Decker Corp. 34,400 1,427,600
----------
Leisure Time (0.21%)
The Coleman Co. Inc. 15,000 221,250
----------
Miscellaneous Business & Consumer Discretionary (0.65%)
Herman Miller Inc. 17,000 688,500
Publishing/Miscellaneous (1.31%)
Devon Group Inc. 24,950 586,325
The McGraw-Hill Companies 18,550 790,694
----------
Total Publishing/Miscellaneous 1,377,019
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULES OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Small/Mid Cap Equity Portfolio
Shares Value
------ -----
Publishing/Newspapers (1.67%)
Knight-Ridder Inc. 21,900 $ 810,300
The New York Times Co. 28,000 945,000
----------
Total Publishing/Newspapers 1,755,300
----------
Restaurants (0.87%)
Wendy's International Inc. 42,500 913,750
----------
Retail (7.03%)
General Nutrition Companies Inc. 30,150 529,509
Lands' End Inc. 22,050 474,075
Price/Costco Inc. 42,550 872,275
Sotheby's Holdings Inc. 63,150 1,034,081
Staples Inc. 55,950 1,241,391
The Pep Boys-Manny, Mo & Jack 29,050 1,034,906
The TJX Companies 4,400 157,850
The Talbots Inc. 18,500 555,000
Zale Corp. 68,450 1,497,344
----------
Total Retail 7,396,431
----------
Textiles Apparel Mfrs. (0.76%)
Quiksilver Inc. 32,000 800,000
----------
Toys (1.32%)
Cannondale Corp. 59,850 1,391,513
----------
Total Consumer Discretionary 16,430,362
----------
Consumer Staples (3.45%)
Foods (3.45%)
Dole Food Company Inc. 41,000 1,722,000
Iowa Beef Processing Inc. 32,850 763,763
Smithfield Foods Inc. 36,850 1,146,956
----------
Total Foods 3,632,719
----------
Financial Services (17.61%)
Banks/Outside New York City (7.40%)
Bank of Boston 35,200 2,037,200
Commerce Bancorp 29,300 772,788
First American Corp. 27,100 1,300,800
Magna Group Inc. 36,550 1,023,400
North Fork Bancorp 4,950 155,925
Signet Banking Corp. 32,200 861,350
SouthTrust Corp. 36,000 1,098,000
Union Bank of California 11,000 544,500
----------
Total Banks/Outside New York City 7,793,963
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULES OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Small/Mid Cap Equity Portfolio
Shares Value
------ -----
Finance Companies (0.41%)
Beneficial Corp. 7,475 $ 429,813
----------
Finance/Small Loan (1.13%)
Student Loan Marketing Ass'n 16,000 1,194,000
----------
Insurance/Life (2.47%)
ReliaStar Financial Corp. 20,000 950,000
The Guarantee Life Cos. Inc. 34,300 681,713
Western National Corp. 52,000 968,500
----------
Total Insurance/Life 2,600,213
----------
Insurance/Mortgage (1.01%)
The PMI Group Inc. 20,000 1,062,500
----------
Insurance/Multi-Line (0.49%)
ITT Hartford Group Inc. 8,750 516,250
----------
Miscellaneous/Financial Services (1.14%)
Advanta Corp. 27,950 1,194,863
----------
Savings and Loan (3.55%)
Bank United Corp. 27,600 686,550
Peoples Heritage Financial Group 37,000 864,875
Standard Federal Bank 29,800 1,363,350
Washington Federal Inc. 34,990 826,639
----------
Total Savings and Loan 3,741,414
----------
Total Financial Services 18,533,014
----------
Health Care (10.01%)
Biotechnology Research and Production (1.86%)
North American Biological Inc. 94,000 1,116,250
Pathogenesis 47,650 845,788
----------
Total Biotechnology Research and Production 1,962,038
----------
Drugs and Pharmaceuticals (3.86%)
ALPHARMA Inc. 42,300 660,938
Mallinckrodt Group Inc. 14,300 595,238
R P Scherer Corp. 26,800 1,306,500
Watson Pharmaceuticals Inc. 40,000 1,500,000
----------
Total Drugs and Pharmaceuticals 4,062,675
----------
Electronics/Medical Systems (1.15%)
DENTSPLY International Inc. 27,100 1,205,950
----------
Health and Personal Care (1.20%)
Olsten Corp. 50,900 1,266,138
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULES OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Small/Mid Cap Equity Portfolio
Shares Value
------ -----
Health Care Management Services (0.42%)
Coventry Corp. 37,100 $ 442,881
----------
Medical and Dental Instruments and Supplies (1.52%)
Stryker Corp. 23,900 719,988
Vital Signs Inc. 42,800 877,400
----------
Total Medical and Dental
Instruments and Supplies 1,597,388
----------
Total Health Care 10,537,069
----------
Integrated Oils (3.70%)
Oils/Integrated Domestic (3.70%)
Amerada Hess Corp. 15,900 840,713
Coastal Corp. 15,125 623,906
Kerr-McGee Corp. 26,000 1,582,750
Pennzoil Co. 16,000 846,000
----------
Total Oils/Integrated Domestic 3,893,369
----------
Materials and Processing (6.85%)
Agriculture Fishing and Ranching (0.66%)
Pioneer Hi-Bred International Inc. 11,400 689,700
----------
Building/Cement (1.04%)
Southdown Inc. 44,400 1,093,350
----------
Chemicals (1.17%)
Sigma-Aldrich Corp. 16,000 912,000
The B.F. Goodrich Co. 7,000 315,875
----------
Total Chemicals 1,227,875
----------
Fertilizers (1.20%)
Mississippi Chemical Corp. 54,100 1,264,588
----------
Metal Fabricating (1.24%)
Precision Castparts Corp. 27,000 1,309,500
----------
Paper (0.99%)
Willamette Industries 15,925 1,043,088
----------
Paints & Coatings (0.55%)
RPM Inc. 35,300 582,450
----------
Total Materials and Processing 7,210,550
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULES OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Small/Mid Cap Equity Portfolio
Shares Value
------ -----
Other Energy (4.63%)
Machinery/Oil Well Equipment and Services (2.46%)
Oryx Energy Co. 64,000 $1,136,000
Weatherford International Inc. 20,250 554,344
Western Atlas Inc. 14,500 902,625
----------
Total Machinery/Oil Well
Equipment and Services 2,592,969
----------
Oil/Crude Producers (2.17%)
Devon Energy Corp. 24,050 613,275
Santa Fe Energy Resources 20,000 285,000
Union Texas Petroleum Holdings 64,000 1,384,000
----------
Total Oil/Crude Producers 2,282,275
----------
Total Other Energy 4,875,244
----------
Producer Durables (10.70%)
Aerospace (1.44%)
Sundstrand Corp. 39,000 1,521,000
----------
Diversified Production (3.50%)
Case Corp. 27,000 1,316,250
Crane Co. 20,000 887,500
EG&G Inc. 57,500 1,027,813
Harnischfeger Industries Inc. 11,850 447,338
----------
Total Diversified Production 3,678,900
----------
Homebuilding (0.59%)
Kaufman and Broad Home Corp. 48,000 624,000
----------
Identification Control and Filter Devices (1.24%)
Honeywell Inc. 11,200 707,000
Hubbell Inc. 10,000 370,000
Pall Corp. 8,000 226,000
----------
Total Identification Control
and Filter Devices 1,303,000
----------
Machine Tools (0.46%)
Snap-on Inc. 15,000 481,875
----------
Machinery/Agricultural (0.69%)
AGCO Corp. 28,550 728,025
----------
Machinery/Industrial and Specialty (1.36%)
Applied Power 33,000 1,051,875
Ingersoll-Rand Co. 8,050 382,375
----------
Total Machinery/
Industrial and Specialty 1,434,250
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULES OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Small/Mid Cap Equity Portfolio
Shares Value
------ -----
Production Technology Equipment (1.42%)
KLA Instruments Corp. 40,000 $ 900,000
Novellus Systems Inc. 14,000 596,750
----------
Total Production Technology Equipment 1,496,750
----------
Total Producer Durables 11,267,800
----------
Technology (8.54%)
Computer Services Software and Systems (2.26%)
Cadence Design Systems Inc. 41,000 1,465,750
Mentor Graphics Corp. 103,350 917,231
----------
Total Computer Services Software
and Systems 2,382,981
----------
Computer Technology (1.97%)
Cabletron Systems 30,400 2,078,600
----------
Electronics/Semi-Conductors/Components (3.54%)
Analog Devices Inc. 45,400 1,231,475
Atmel Corp. 68,050 2,101,044
Merix Corp. 20,500 394,625
----------
Total Electronics/
Semi-Conductors/Components 3,727,144
----------
Electronics/Technology (0.76%)
Symbol Technologies Inc. 17,400 800,400
----------
Total Technology 8,989,125
----------
Utilities and REITs (11.88%)
Electrical (2.23%)
New York State Electric & Gas 38,500 847,000
Pinnacle West Capital Corp. 20,000 592,500
TECO Energy Inc. 38,300 909,625
----------
Total Electrical 2,349,125
----------
Gas Distributors (2.76%)
Consolidated Natural Gas Co. 15,700 841,913
Eastern Enterprises 35,900 1,355,225
PanEnergy Corp. 20,500 709,813
----------
Total Gas Distributors 2,906,950
----------
Real Estate Investment Trusts (3.78%)
American Health Properties 25,000 546,875
Cali Realty Corp. 16,000 434,000
Innkeepers USA Trust 45,000 506,250
LTC Properties Inc. 18,000 294,750
Meditrust 27,300 945,263
Nationwide Health Properties Inc. 45,000 990,000
Omega Healthcare Investors Inc. 8,700 261,000
----------
Total Real Estate Investment Trusts 3,978,138
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULES OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Small/Mid Cap Equity Portfolio
Shares Value
------ -----
Telecommunications (3.10%)
Century Telephone Enterprises 41,350 $1,421,406
Frontier Corp. 52,000 1,384,501
Tele Danmark ADS 19,500 460,687
----------
Total Telecommunications 3,266,594
----------
Total Utilities and REITs 12,500,807
----------
TOTAL COMMON STOCKS
(cost $93,545,238) $99,559,433
============
TOTAL INVESTMENTS IN
SECURITIES (98.81%)
(cost $97,991,436) $104,005,631
============
OTHER ASSETS
LESS LIABILITIES (1.19%) $1,254,470
============
Net Assets (100.00%) $105,260,101
============
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
Unaudited
RIM Core Equity Portfolio
Par Value Value
--------- -----
VARIABLE RATE DEMAND NOTES
(5.29%)
American Family
5.1956% 12-31-2031 $827,277 $ 827,277
Eli Lilly
5.0182% 12-31-2031 510,375 510,375
General Mills
5.1900% 12-31-2031 490,000 490,000
Johnson Controls Inc.
5.2160% 21-31-2031 4,142,122 4,142,122
Pitney Bowes
5.1946% 12-31-2031 220,000 220,000
Sara Lee Corp.
5.1744% 12-31-2031 1,092,769 1,092,769
Southwestern Bell Corp.
5.1757% 12-31-2031 610,000 610,000
Warner-Lambert Co.
5.1660% 12-31-2031 1,595,041 1,595,041
Wisconsin Electric
5.2356% 12-31-2031 222,500 222,500
----------
TOTAL DEMAND NOTES
(cost $9,710,084) $9,710,084
----------
Shares Value
------ -----
COMMON STOCKS
(96.89%)
Basic Industry (5.24%)
Building Construction (0.47%)
Southdown Inc. 34,975 $861,259
----------
Chemical/Fertilizer (0.54%)
Mississippi Chemical Corp. 42,750 999,281
----------
Chemical/Major (1.29%)
E.I. duPont de Nemours and Co. 26,750 2,360,688
----------
Chemical/Specialty (1.71%)
Air Products and Chemicals Inc. 15,000 873,750
RPM Inc. 21,000 346,500
Sigma-Aldrich Corp. 20,025 1,141,425
The B.F. Goodrich Co. 17,100 771,637
----------
Total Chemical/Specialty 3,133,312
----------
Paper and Forest Products (1.22%)
Weyerhaeuser Co. 15,950 735,694
Willamette Industries 22,950 1,503,225
----------
Total Paper and Forest Products 2,238,919
----------
Total Basic Industry 9,593,459
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
Unaudited
RIM Core Equity Portfolio
Shares Values
------ ------
Capital Goods (7.80%)
Aerospace/Industrial (2.39%)
Ingersoll-Rand Co. 4,400 $ 209,000
Crane Co. 12,000 532,500
Precision Castparts Corp. 31,950 1,549,575
Sundstrand Corp. 53,450 2,084,550
----------
Total Aerospace/Industrial 4,375,625
----------
Agriculture/Construction Equipment (1.77%)
AGCO Corp. 38,900 991,950
Applied Power 29,700 946,687
Case Corp. 17,975 876,281
Deere & Co. 10,250 430,500
----------
Total Agriculture/
Construction Equipment 3,245,418
----------
Construction Mining Equipment (0.43%)
Harnischfeger Industries Inc. 21,000 792,750
----------
Electric Equipment (3.02%)
General Electric Co. 60,875 5,539,625
----------
Miscellaneous Capital Goods (0.20%)
Hubbell Inc. 9,800 362,600
----------
Total Capital Goods 14,316,018
----------
Consumer Cyclical (9.18%)
Apparel/Manufacturing (0.40%)
Quiksilver Inc. 29,125 728,125
----------
Automotive and Related (1.64%)
General Motors Corp. 15,000 720,000
Goodyear Tire and Rubber 30,525 1,407,966
Snap-on Inc. 27,525 884,241
----------
Total Automotive and Related 3,012,207
----------
Bicycle (0.36%)
Cannondale Corp. 28,550 663,787
----------
Hardware/Tools (0.66%)
Black & Decker Corp. 28,975 1,202,462
----------
Publishing (0.23%)
Devon Group Inc. 18,150 426,525
----------
Retail (5.89%)
Federated Department Stores Inc. 39,000 1,306,500
General Nutrition Companies Inc. 52,350 919,397
Price/Costco Inc. 76,350 1,565,175
Sotheby's Holdings Inc. 56,250 921,094
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
Unaudited
RIM Core Equity Portfolio
Shares Values
------ ------
Retail - Continued
Staples Inc. 67,150 $1,489,891
The Pep Boys-Manny, Mo & Jack 33,800 1,204,125
The TJX Companies 33,000 1,183,875
The Talbots Inc. 9,575 287,250
Wal-Mart Stores Inc. 17,550 462,881
Zale Corp. 67,225 1,470,547
----------
Total Retail 10,810,735
----------
Total Consumer Cyclical 16,843,841
----------
Consumer Services (4.06%)
Healthcare Services (1.16%)
Coventry Corp. 52,000 620,750
Olsten Corp. 60,825 1,513,022
----------
Total Healthcare Services 2,133,772
----------
Publishing/Newspaper (1.76%)
Knight-Ridder Inc. 42,700 1,579,900
The New York Times Co. 48,850 1,648,687
----------
Total Publishing/Newspaper 3,228,587
----------
Publishing/Printing (0.64%)
The McGraw-Hill Companies 27,600 1,176,450
----------
Restaurants (0.49%)
Wendy's International Inc. 42,000 903,000
----------
Total Consumer Services 7,441,809
----------
Consumer Staples (22.19%)
Biotechnology (0.80%)
North American Biologicals Inc. 109,825 1,304,172
Pathogenesis 9,600 170,400
----------
Total Biotechnology 1,474,572
----------
Drugs (8.54%)
Bristol-Myers Squibb Co. 46,225 4,454,934
Mallinckrodt Group Inc. 13,200 549,450
Merck & Co. 13,000 914,875
RP Scherer Corp. 19,500 950,625
Rhone-Poulenc Rorer Inc. 25,150 1,851,669
Schering-Plough Corp. 21,350 1,313,025
SmithKline Beecham PLC 31,550 1,920,606
Warner-Lambert Co. 26,600 1,755,600
Watson Pharmaceuticals Inc. 52,150 1,955,625
----------
Total Drugs 15,666,409
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
Unaudited
RIM Core Equity Portfolio
Shares Values
------ ------
Foods (6.31%)
Albertson's Inc. 22,750 $ 958,344
ConAgra Inc. 42,775 2,106,669
Dole Food Company Inc. 48,775 2,048,550
H.J. Heinz Co. 48,825 1,647,844
Iowa Beef Processing Inc. 20,375 473,719
Pioneer Hi-Bred International Inc. 14,400 871,200
Sara Lee Corp. 65,850 2,354,137
Smithfield Foods Inc. 35,675 1,110,384
----------
Total Foods 11,570,847
----------
Hospital Supplies (2.62%)
Abbott Labs 35,575 1,752,069
DENTSPLY International Inc. 26,200 1,165,900
Stryker Corp. 25,950 781,744
Vital Signs Inc. 53,600 1,098,800
----------
Total Hospital Supplies 4,798,513
----------
Household Products (1.97%)
Kimberly-Clark Corp. 15,500 1,370,344
Procter & Gamble Co. 22,950 2,237,625
----------
Total Household Products 3,607,969
----------
Miscellaneous Consumer Staples (0.16%)
Lancaster Colony Corp. 7,700 294,525
----------
Soft Drinks (0.46%)
PepsiCo Inc. 30,000 847,500
----------
Tobacco (1.34%)
Philip Morris Co. Inc. 27,325 2,452,419
----------
Total Consumer Staples 40,712,754
----------
Credit Cyclical (0.44%)
Kaufman and Broad Home Corp. 62,375 810,875
----------
Energy (10.03%)
Natural Gas Diversified (0.34%)
Coastal Corp. 15,300 631,125
----------
Oil/Gas Production (1.24%)
Devon Energy Corp. 20,000 510,000
Weatherford Enterra Inc. 39,375 1,077,891
Western Atlas Inc. 11,075 689,419
----------
Total Oil/Gas Production 2,277,310
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
Unaudited
RIM Core Equity Portfolio
Shares Values
------ ------
Oil/Integrated Domestic (7.85%)
Amerada Hess Corp. 24,725 $1,307,334
Atlantic Richfield Co. 24,175 3,082,312
Kerr-McGee Corp. 42,675 2,597,841
Occidental Petroleum Corp. 93,050 2,175,044
Oryx Energy Co. 103,250 1,832,687
Pennzoil Co. 19,000 1,004,625
Santa Fe Energy Resources 28,000 399,000
Union Texas Petroleum Holdings 92,825 2,007,341
----------
Total Oil/Integrated Domestic 14,406,184
----------
Oil/Integrated International (0.59%)
Mobil Corp. 9,375 1,085,156
----------
Total Energy 18,399,775
----------
Financial (12.73%)
Banks (4.86%)
Bank of Boston 35,695 2,065,848
First American Corp. 17,800 854,400
Magna Group Inc. 13,050 365,400
PNC Bank Corp. 76,050 2,538,169
Peoples Heritage Financial Group 26,300 614,762
Signet Banking Corp. 45,000 1,203,750
SouthTrust Corp. 12,700 387,350
Union Bank of California 17,800 881,100
----------
Total Banks 8,910,779
----------
Finance Company (0.52%)
Beneficial Corp. 16,475 947,312
----------
Financial Services (1.59%)
Advanta Corp. 33,305 1,425,712
American Express Co. 32,400 1,498,500
----------
Total Financial Services 2,924,212
----------
Insurance (2.71%)
CIGNA Corp. 16,525 1,980,934
ITT Hartford Group Inc. 15,100 890,900
ReliaStar Financial Corp. 23,625 1,122,187
The Guarantee Life Cos. Inc. 10,000 198,750
Travelers Group Inc. 14,000 687,750
Western National Corp. 5,000 93,125
----------
Total Insurance 4,973,646
----------
Miscellaneous Financial (0.56%)
Student Loan Marketing Ass'n 13,725 1,024,228
----------
Mortgage Insurance (0.73%)
The PMI Group Inc. 25,075 1,332,109
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
Unaudited
RIM Core Equity Portfolio
Shares Values
------ ------
Savings & Loan (1.76%)
Bank United Corp. 36,800 $ 915,400
Standard Federal Bank 35,345 1,617,034
Washington Federal Inc. 29,820 704,497
----------
Total Savings & Loan 3,236,931
----------
Total Financial 23,349,217
----------
Technology (13.36%)
Aerospace (1.05%)
The Boeing Company 20,300 1,918,350
----------
Computer Software (2.15%)
Cadence Design Systems Inc. 11,000 393,250
Mentor Graphics Corp. 116,375 1,032,828
Microsoft Corp. 19,025 2,508,922
----------
Total Computer Software 3,935,000
----------
Computer Systems (1.48%)
International Business Machines 10,010 1,246,245
Xerox Corp. 27,225 1,459,941
----------
Total Computer Systems 2,706,186
----------
Electronic Equipment (0.33%)
AMP Inc. 15,500 602,563
----------
Electronic Systems (1.83%)
EG&G Inc. 60,250 1,076,969
Honeywell Inc. 18,650 1,177,281
Symbol Technologies Inc. 24,125 1,109,750
----------
Total Electronic Systems 3,364,000
----------
Networking Equipment (2.72%)
Cabletron Systems 45,900 3,138,412
Cisco Systems Inc. 29,913 1,856,476
----------
Total Networking Equipment 4,994,888
----------
Semi-Conductors & Related (3.80%)
Analog Devices Inc. 39,725 1,077,541
Atmel Corp. 55,475 1,712,791
Intel Corp. 24,800 2,366,850
KLA Instruments Corp. 55,850 1,256,625
Novellus Systems Inc. 13,275 565,847
----------
Total Semi-Conductors & Related 6,979,654
----------
Total Technology 24,500,641
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
Unaudited
RIM Core Equity Portfolio
Shares Values
------ ------
Transportation (1.02%)
Airlines (1.02%)
Alaska Air Group Inc. $36,775 $ 786,066
Southwest Airlines Co. 47,125 1,077,984
----------
Total Airlines 1,864,050
----------
Utilities and REITs (10.84%)
Communications (6.00%)
AT&T Corp. 48,250 2,521,062
Ameritech Corp. 50,350 2,649,669
Century Telephone Enterprise 40,925 1,406,797
Frontier Corp. 34,650 922,556
GTE Corp. 90,875 3,498,687
----------
Total Communications 10,998,771
----------
Electric (1.74%)
New York State Electric & Gas 57,075 1,255,650
Pinnacle West Capital Corp. 21,125 625,828
TECO Energy Inc. 55,450 1,316,937
----------
Total Electric 3,198,415
----------
Natural Gas (1.40%)
Consolidated Natural Gas Co. 22,350 1,198,519
Eastern Enterprises 20,375 769,156
PanEnergy Corp. 17,400 602,475
----------
Total Natural Gas 2,570,150
----------
Real Estate Investment Trusts (1.70%)
American Health Properties 12,325 269,609
Cali Realty Corp. 21,000 569,625
Innkeepers USA Trust 47,000 528,750
LTC Properties Inc. 10,300 168,662
Meditrust 30,350 1,050,869
Nationwide Health Properties Inc. 12,500 275,000
Omega Health Investors Inc. 8,700 261,004
----------
Total Real Estate Investment Trusts 3,123,519
----------
Total Utilities and REITs 19,890,855
----------
TOTAL COMMON STOCKS
(cost $165,890,999) $177,723,294
------------
TOTAL INVESTMENTS
IN SECURITIES (102.18%)
(cost $175,601,083) $187,433,378
------------
LIABILITIES LESS
OTHER ASSETS (-2.18%) ($3,995,294)
------------
Net Assets (100.00%) $183,438,084
============
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Balanced Portfolio
Par Value Value
--------- -----
VARIABLE RATE DEMAND NOTES
(5.34%)
American Family
5.1956% 12-31-2031 $ 20,000 $ 783,867
General Mills
5.1900% 12-21-2031 800,000 140,000
Johnson Controls Inc.
5.2160% 12-31-2031 204,177 204,177
Pitney Bowes
5.1946% 12-31-2031 319,000 78,366
Southwestern Bell Corp.
5.1757% 12-31-2031 555,000 201,354
Wisconsin Electric
5.2356% 12-31-2031 225,000 540,688
-----------
TOTAL DEMAND NOTES
(cost $1,948,452) $1,948,452
-----------
LONG-TERM DEBT SECURITIES (36.22%)
U.S. Treasury Obligations (17.61%)
U.S. Treasury Notes
6.8750% 02-28-1997 $200,000 $201,312
5.2500% 07-31-1998 100,000 98,625
7.5000% 10-31-1999 400,000 413,125
7.8750% 11-15-1999 200,000 208,750
7.1250% 02-29-2000 400,000 409,250
6.7500% 04-30-2000 1,000,000 1,011,562
5.7500% 10-31-2000 700,000 683,156
7.7500% 02-15-2001 970,000 1,017,590
7.5000% 11-15-2001 200,000 208,750
6.3750% 08-15-2002 475,000 471,734
6.2500% 02-15-2003 425,000 418,359
5.7500% 08-15-2003 700,000 667,406
7.2500% 08-15-2004 600,000 621,187
-----------
Total U.S. Treasury Obligations 6,430,806
-----------
Government--Regional (0.42%)
Ontario Global Bond
7.3750% 01-27-2003 150,000 153,739
-----------
Regional Government--
Agency (0.14%)
Hydro Quebec
7.3750% 02-01-2003 50,000 50,822
-----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Balanced Portfolio
Par Value Value
--------- -----
Corporate Bonds (18.05%)
Industrials (0.22%) McKesson Corp.
8.6250% 02-01-1998 $ 50,000 $ 51,510
PepsiCo Inc.
7.0000% 11-15-1996 30,000 30,045
-----------
Total Industrials 81,555
-----------
Finance Companies (17.83%)
Allstate Corp.
5.8750% 06-15-1998 150,000 149,097
American General Finance
6.8750% 01-15-2000 50,000 50,250
Associates Corp. of North America
Medium Term Note
8.0000% 10-27-1999 50,000 51,957
6.3750% 06-01-2000 75,000 74,265
6.8400% 07-03-2001 700,000 700,616
Associates Corp. of North America
6.0000% 06-15-2000 25,000 24,404
7.5000% 04-15-2002 100,000 102,717
Beneficial Corp. Medium Term Note
8.0500% 04-02-1999 100,000 103,529
Commercial Credit Co.
6.8750% 05-01-2002 200,000 199,423
6.5000% 06-01-2005 500,000 476,493
Dean Witter Discovry and Co.
6.2500% 03-15-2000 30,000 29,568
6.7500% 08-15-2000 200,000 199,745
Discover Credit
7.9700% 05-07-1997 100,000 101,270
Ford Motor Co.
7.5000% 11-15-1999 25,000 25,560
Ford Motor Credit Co.
6.3750% 04-15-2000 190,000 187,909
Ford Motor Credit Medium Term Note
5.9000% 06-09-1998 75,000 74,448
General Electric Capital
6.6600% 05-01-2018/00 75,000 74,971
GMAC Medium Term Note
6.7500% 07-10-1997 125,000 125,801
7.5000% 11-04-1997 50,000 50,729
Household Finance Co. Medium Term Note
7.0000% 05-15-2000 200,000 201,370
International Lease Finance
8.1250% 01-15-1998 150,000 153,544
6.2500% 10-15-2000 500,000 489,957
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Balanced Portfolio
Par Value Value
--------- -----
Merrill Lynch
6.3750% 03-30-1999 $ 50,000 $ 49,842
7.3750% 08-17-2002 30,000 30,490
7.0500% 04-15-2003 55,000 54,050
Merrill Lynch Medium Term Note
7.0500% 06-04-2001 350,000 351,225
Morgan Stanley Group Inc.
5.6500% 06-15-1997 35,000 34,940
9.2500% 03-01-1998 125,000 129,941
5.7500% 02-15-2001 500,000 478,918
6.1250% 10-01-2003 215,000 202,931
Sears Roebuck Acceptance Corp.
Medium Term Note
7.1100% 06-19-2001 650,000 656,465
SmithKline Beecham PLC Corp. Medium Term Note
6.6250% 10-01-2005 50,000 48,087
Texaco Capital Medium Term Note
7.2500% 08-01-2002 150,000 151,494
Travelers Inc.
7.6250% 01-15-1997 25,000 25,123
6.7500% 04-15-2001 500,000 497,986
USLIFE Corp.
6.7500% 01-15-1998 150,000 150,925
-----------
Total Finance Companies 6,510,039
-----------
Total Corporate Bonds 6,591,593
-----------
TOTAL LONG-TERM
DEBT SECURITIES
(cost $13,286,379) $13,226,961
-----------
COMMON STOCKS
(57.33%) Shares
---------
Basic Industry (3.52%)
Building Construction (0.19%)
Southdown Inc. 2,775 $68,334
-----------
Chemical/Fertilizer (0.33%)
Mississippi Chemical Corp. 5,100 119,213
-----------
Chemical/Major (1.03%)
E.I. duPont de Nemours and Co. 4,250 375,063
-----------
Chemical/Specialty (0.83%)
Air Products and Chemicals Inc. 2,000 116,500
RPM Inc. 4,000 66,000
The B.F. Goodrich Co. 1,400 63,175
Sigma-Aldrich Corp. 1,000 57,000
-----------
Total Chemical/Specialty 302,675
-----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Balanced Portfolio
Shares Values
------ ------
Paper and Forest Products (1.15%)
Weyerhaeuser Co. $ 2,150 $ 99,169
-----------
Willamette Industries 4,900 320,950
-----------
Total Paper and Forest Products 420,119
-----------
Total Basic Industry 1,285,404
-----------
Capital Goods (4.19%)
Aerospace/Industrial (1.36%)
Ingersoll-Rand Co. 1,000 47,500
Precision Castparts Corp. 3,950 191,575
Sundstrand Corp. 6,600 257,400
-----------
Total Aerospace/Industrial 496,475
-----------
Agriculture/Construction Equipment (0.72%)
AGCO Corp. 1,700 43,350
Case Corp. 2,900 141,375
Deere & Co. 1,850 77,700
-----------
Total Agriculture/
Construction Equipment 262,425
-----------
Construction Mining Equipment (0.29%)
Harnischfeger Industries Inc. 2,800 105,700
Electric Equipment (1.82%)
General Electric Co. 7,300 664,300
-----------
Total Capital Goods 1,528,900
-----------
Consumer Cyclical (5.17%)
Apparel/Manufacturing (0.11%)
Quiksilver Inc. 1,575 39,375
-----------
Automotive and Related (1.13%)
General Motors Corp. 2,025 97,200
Goodyear Tire & Rubber 5,000 230,625
Snap-on Inc. 2,625 84,328
-----------
Total Automotive and Related 412,153
-----------
Hardware/Tools (0.66%)
Black & Decker Corp. 5,775 239,663
-----------
Publishing (0.12%)
Devon Group Inc. 1,800 42,300
-----------
Retail (3.16%)
Federated Department Stores Inc. 2,500 83,750
General Nutrition Companies Inc. 5,950 104,497
Price/Costco Inc. 9,050 185,525
Sotheby's Holdings Inc. 3,750 61,406
Staples Inc. 6,800 150,875
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Balanced Portfolio
Shares Values
------ ------
Retail - continued
The Pep Boys-Manny, Mo & Jack $ 3,800 $ 135,375
Wal-Mart Stores Inc. 7,350 193,856
Zale Corp. 10,875 237,891
----------
Total Retail 1,153,175
----------
Total Consumer Cyclical 1,886,666
----------
Consumer Services (2.33%)
Healthcare Services (0.82%)
Coventry Corp. 8,000 95,500
Olsten Corp. 8,150 202,731
----------
Total Healthcare Services 298,231
----------
Publishing/Newspaper (0.95%)
Knight-Ridder Inc. 3,500 129,500
The New York Times Co. 6,500 219,375
----------
Total Publishing/Newspaper 348,875
----------
Publishing/Printing (0.38%)
The McGraw-Hill Companies 3,300 140,663
----------
Restaurants (0.18%)
Wendy's International Inc. 3,000 64,500
----------
Total Consumer Services 852,269
----------
Consumer Staples (13.18%)
Biotechnology (0.35%)
North American Biologicals Inc. 10,875 129,141
----------
Drugs (5.05%)
Bristol-Myers Squibb Co. 5,900 568,613
Mallinckrodt Group Inc. 2,650 110,306
RP Scherer Corp. 2,250 109,688
Rhone Poulenc Rorer Inc. 3,050 224,556
Schering-Plough Corp. 2,950 181,425
SmithKline Beecham PLC 2,750 167,406
Warner-Lambert Co. 3,450 227,700
Watson Pharmaceuticals Inc. 6,800 255,000
----------
Total Drugs 1,844,694
----------
Foods (4.13%)
Albertson's Inc. 4,400 185,350
ConAgra Inc. 6,375 313,969
Dole Food Company Inc. 5,550 233,100
H.J. Heinz Co. 7,025 237,094
Iowa Beef Processing Inc. 2,675 62,194
Pioneer Hi-Bred International Inc. 1,650 99,825
Sara Lee Corp. 8,200 293,150
Smithfield Foods Inc. 2,625 81,703
----------
Total Foods 1,506,385
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Balanced Portfolio
Shares Values
------ ------
Hospital Supplies (1.32%)
Abbott Labs $ 4,825 $ 237,631
DENTSPLY International Inc. 2,400 106,800
Vital Signs Inc. 6,750 138,375
----------
Total Hospital Supplies 482,806
----------
Household Products (1.18%)
Kimberly-Clark Corp. 2,250 198,281
Procter & Gamble Co. 2,400 234,000
----------
Total Household Products 432,281
----------
Soft Drinks (0.26%)
PepsiCo Inc. 3,400 96,050
----------
Tobacco (0.88%)
Philip Morris Co. Inc. 3,600 323,100
----------
Total Consumer Staples 4,814,457
----------
Credit Cyclical (0.27%)
Kaufman and Broad Home Corp. 7,625 99,125
----------
Energy (5.93%)
Natural Gas Diversified (0.35%)
Coastal Corp. 3,125 128,906
----------
Oil/Gas Production (0.54%)2
Devon Energy Corp. 2,775 70,763
Weatherford Enterra Inc. 4,675 127,978
----------
Total Oil/Gas Production 198,741
----------
Oil/Integrated Domestic (4.73%)
Amerada Hess Corp. 2,825 149,372
Atlantic Richfield Co. 2,950 376,125
Kerr-McGee Corp. 5,025 305,897
Occidental Petroleum Corp. 13,500 315,563
Oryx Energy Co. 12,200 216,550
Pennzoil Co. 3,000 158,625
Union Texas Petroleum Holdings 9,450 204,356
----------
Total Oil/Integrated Domestic 1,726,488
----------
Oil/Integrated International (0.30%)
Mobil Corp. 950 109,963
----------
Total Energy 2,164,098
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Balanced Portfolio
Shares Values
------ ------
Financial (7.90%)
Banks (3.76%)
Bank of Boston $ 4,785 $ 276,932
Commerce Bancorp 3,400 89,675
First American Corp. 3,750 180,000
Magna Group Inc. 3,150 88,200
PNC Bank Corp. 8,950 298,706
Peoples Heritage Financial Group 6,000 140,250
Signet Banking Corp. 4,000 107,000
SouthTrust Corp. 3,600 109,800
Union Bank of California 1,650 81,675
----------
Total Banks 1,372,238
----------
Finance Company (0.19%)
Beneficial Corp. 1,225 70,438
----------
Financial Services (1.14%)
Advanta Corp. 4,050 173,138
American Express Co. 5,250 242,813
----------
Total Financial Services 415,951
----------
Insurance (1.45%)
CIGNA Corp. 1,500 179,813
ITT Hartford Group Inc. 1,500 88,500
ReliaStar Financial Corp. 4,125 195,938
Travelers Group Inc. 1,350 66,319
----------
Total Insurance 530,570
----------
Miscellaneous Financial (0.37%)
Student Loan Marketing Ass'n 1,800 134,325
----------
Savings & Loan (0.99%)
Standard Federal Bank 4,875 223,031
Washington Federal Inc. 5,860 138,443
----------
Total Savings & Loan 361,474
----------
Total Financial 2,884,996
----------
Technology (6.95%)
Aerospace (0.85%)
The Boeing Company 3,275 309,488
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Balanced Portfolio
Shares Values
------ ------
Computer Software (1.25%)
Mentor Graphics Corp. $ 14,675 $ 130,241
Microsoft Corp. 2,475 326,391
----------
Total Computer Software 456,632
----------
Computer Systems (0.91%)
International Business Machines 1,450 180,525
Xerox Corp. 2,825 151,491
----------
Total Computer Systems 332,016
----------
Electronic Equipment (0.21%)
AMP Inc. 2,000 77,500
Electronic Systems (0.69%)
EG&G Inc. 5,250 93,844
Honeywell Inc. 1,000 63,125
Symbol Technologies Inc. 2,100 96,600
----------
Total Electronic Systems 253,569
----------
Networking Equipment (1.40%)
Cabletron Systems Inc. 5,150 352,131
Cisco Systems Inc. 2,550 158,259
----------
Total Networking Equipment 510,390
----------
Semi-Conductors & Related (1.64%)
Atmel Corp. 7,050 217,669
Intel Corp. 2,550 243,366
KLA Instruments Corp. 6,050 136,125
----------
Total Semi-Conductors & Related 597,160
----------
Total Technology 2,536,755
----------
Transportation (0.64%)
Airlines (0.64%)
Alaska Air Group Inc. 4,175 89,241
Southwest Airlines Co. 6,375 145,828
----------
Total Airlines 235,069
----------
Utilities and REITs (7.25%)
Communications (3.97%)
AT&T Corp. 5,400 282,150
Ameritech Corp. 6,700 352,588
Century Telephone Enterprise 7,475 256,953
Frontier Corp. 4,175 111,159
GTE Corp. 11,625 447,563
----------
Total Communications 1,450,413
----------
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Balanced Portfolio
Shares Values
------ ------
Electric (1.55%)
New York State Electric & Gas $ 9,075 $ 199,650
Pinnacle West Capital Corp. 3,375 99,984
TECO Energy Inc. 11,250 267,188
-----------
Total Electric 566,822
-----------
Natural Gas (0.78%)
Consolidated Natural Gas Co. 1,475 79,097
Eastern Enterprises 4,325 163,269
PanEnergy Corp. 1,250 43,275
-----------
Total Natural Gas 285,641
-----------
Real Estate Investment Trusts (0.95%)
American Health Properties 2,025 44,297
Innkeepers USA Trust 7,500 84,375
LTC Properties Inc. 2,550 41,756
Meditrust 3,000 103,875
Omega Healthcare Investors Inc. 2,400 72,000
-----------
Total Real Estate Investment Trusts 346,303
-----------
Total Utilities and REITs 2,649,179
-----------
TOTAL COMMON STOCKS
(cost $19,756,585) $20,936,918
-----------
TOTAL INVESTMENTS
IN SECURITIES (98.89%)
(cost $34,991,416) $36,112,331
-----------
OTHER ASSETS LESS
LIABILITIES (1.11%) $405,362
-----------
Net Assets (100.00%) $36,517,693
===========
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Intermediate Fixed Income Portfolio
Par Value Value
--------- -----
VARIABLE RATE DEMAND NOTES (33.07%)
American Family
5.1956% 12-31-2031 $ 752,314 $ 752,314
General Mills
5.1900% 12-31-2031 588,868 588,868
Johnson Controls Inc.
5.2160% 12-31-2031 696,397 696,397
Pitney Bowes
5.1946% 12-31-2031 748,297 748,297
Sara Lee Corp.
5.1744% 12-31-2031 436,720 436,720
Southwestern Bell Corp.
5.1757% 12-31-2031 752,314 752,314
Warner-Lambert Co.
5.1660% 12-31-2031 752,314 752,314
Wisconsin Electric
5.2356% 12-31-2031 404,209 404,209
----------
TOTAL DEMAND NOTES
(cost $5,131,433) $5,131,433
----------
CERTIFICATES OF DEPOSIT &
OTHER SHORT-TERM INSTRUMENTS (6.44%) Par Value Value
Bank of NY Wilmington
9.1500% 01-06-1998 $ 10,000 $10,000
U.S. Treasury Bill
5.0600% 12-12-1996 989,420 989,420
----------
TOTAL CERTIFICATES
OF DEPOSIT & other
SHORT-TERM INSTRUMENTS
(cost $999,420) $999,420
----------
LONG-TERM DEBT SECURITIES (59.59%)
U.S. Treasury Obligations (30.90%)
Certificate of Accrual Treasury Securities
7.1300% 11-15-1999 $ 100,000 $82,092
U.S. Treasury Notes
8.5000% 05-15-1997 300,000 305,344
6.7500% 05-31-1997 225,000 226,688
9.0000% 05-15-1998 325,000 339,726
6.3750% 01-15-1999 250,000 251,172
7.0000% 04-15-1999 125,000 127,305
7.8750% 11-15-1999 270,000 281,813
7.1250% 02-29-2000 300,000 306,938
6.7500% 04-30-2000 200,000 202,312
7.7500% 02-15-2001 380,000 398,643
7.5000% 11-15-2001 600,000 626,250
6.3750% 08-15-2002 500,000 496,563
6.2500% 02-15-2003 350,000 344,531
5.7500% 08-15-2003 300,000 286,031
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Intermediate Fixed Income Portfolio
Par Value Value
--------- -----
U.S. Treasury Obligations - Continued
7.2500% 05-15-2004 $300,000 $ 310,500
7.2500% 08-15-2004 200,000 207,062
----------
Total U.S. Treasury Obligations 4,792,969
----------
U.S. Agency Obligations (0.99%)
Federal Farm Credit Bank (FFCB)
Medium Term Note
7.5500% 03-25-1999 150,000 154,215
----------
Government--Regional (0.92%)
Ontario Global Bond
7.3750% 01-27-2003 140,000 143,490
----------
Regional Government--
Agency (0.82%)
Hydro Quebec
7.3750% 02-01-2003 125,000 127,056
----------
Corporate Bonds (25.96%)
Asset-Backed Security (2.81%)
JC Penney Master Credit Card Trust
9.6250% 06-30-2000 400,000 435,236
----------
Industrials (1.19%)
PepsiCo Inc.
7.0000% 11-15-1996 185,000 185,276
----------
Finance Companies (21.96%)
Allstate Corp.
5.8750% 06-15-1998 250,000 248,494
American General Finance
6.8750% 01-15-2000 25,000 25,125
Associates Corp. of North America
Medium Term Note
6.3750% 06-01-2000 25,000 24,755
6.8400% 07-03-2001 300,000 300,264
Associates Corp. of North America
7.5000% 05-15-1999 50,000 51,155
CNA Financial Note
8.8750% 03-01-1998 225,000 232,711
Commercial Credit Co.
6.5000% 06-01-2005 300,000 285,896
Dean Witter Discovry and Co.
6.2500% 03-15-2000 40,000 39,424
Discover Credit Medium Term Note
8.3500% 05-06-1999 100,000 104,079
Ford Motor Co.
7.5000% 11-15-1999 25,000 25,560
Ford Motor Credit Co.
6.3750% 04-15-2000 75,000 74,175
See accompanying "Notes To Financial Statements"
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1996
(Unaudited)
RIM Intermediate Fixed Income Portfolio
Par Value Value
--------- -----
Ford Motor Credit Medium Term Note
5.9000% 06-09-1998 $ 50,000 $ 49,632
General Electric Capital
6.6600% 05-01-2018/00 130,000 129,950
GMAC Medium Term Note
7.5000% 11-04-1997 135,000 136,967
6.5000% 12-06-2004 500,000 475,713
International Lease Finance
6.2500% 10-15-2000 200,000 195,983
Merrill Lynch
7.2500% 05-15-1997 50,000 50,409
6.3750% 03-30-1999 25,000 24,921
7.0500% 06-04-2001 100,000 100,350
7.0500% 04-15-2003 100,000 98,273
Morgan Stanley Group Inc.
6.1250% 10-01-2003 100,000 94,387
6.3750% 12-05-2003 25,000 23,792
Nordstrom Credit Medium Term Note
7.8900% 02-14-2000 400,000 413,795
USLIFE Corp.
6.7500% 01-15-1998 200,000 201,234
-----------
Total Finance Companies 3,407,044
-----------
Total Corporate Bonds 4,027,556
-----------
TOTAL LONG-TERM
DEBT SECURITIES
(cost $9,189,899) $ 9,245,286
-----------
TOTAL INVESTMENTS
IN SECURITIES (99.10%)
(cost $15,320,752) $15,376,139
-----------
other assets less
Liabilities (0.90%) $ 140,132
-----------
Net Assets (100.00%) $15,516,271
===========
See accompanying "Notes To Financial Statements"
<PAGE>
Statements of Assets and Liabilities
Rainier Investment Management Mutual Funds
September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Small/Mid Intermediate
Cap Equity Core Equity Balanced Fixed Income
Portfolio Portfolio Portfolio Portfolio
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Investments in securities at market value
(cost of $97,991,436, $175,601,083,
$34,991,416 and $15,320,752, respectively) $104,005,631 $187,433,378 $36,112,331 $15,376,139
Receivables
Investment securities sold 2,135,725 2,006,030 426,479 -
Dividends and interest 94,202 347,939 300,732 213,898
Net deferred organization costs 12,202 12,202 12,202 12,202
Prepaid expenses 37,720 38,121 9,463 5,878
-----------------------------------------------------------
Total assets 106,285,480 189,837,670 36,861,207 15,608,117
-----------------------------------------------------------
Liabilities
Payables for investment securities purchased 905,053 6,226,617 45,650 -
Distributions to shareholders - - 259,247 68,483
Due to Investment Advisor (Note 3) 97,256 160,153 24,327 1,237
Other accrued expenses 23,070 12,816 14,290 22,126
-----------------------------------------------------------
Total liabilities 1,025,379 6,399,586 343,514 91,846
-----------------------------------------------------------
Net assets $105,260,101 $183,438,084 $36,517,693 $15,516,271
===========================================================
Composition of
net assets
Paid-in capital $95,136,190 $166,301,914 $34,410,321 $15,469,112
Accumulated undistributed
(overdistributed) net investment income 73,240 364,432 104 (3,634)
Accumulated undistributed
net realized gain (loss) on investments 4,036,475 4,939,443 986,354 (4,593)
Net unrealized appreciation
on investments 6,014,196 11,832,295 1,120,914 55,386
-----------------------------------------------------------
Net assets $105,260,101 $183,438,084 $36,517,693 $15,516,271
===========================================================
Number of shares issued and outstanding
(unlimited shares authorized) no par value 5,720,578 10,176,505 2,516,965 1,268,210
===========================================================
Net asset value per share $18.40 $18.03 $14.51 $12.23
===========================================================
</TABLE>
See accompanying "Notes To Financial Statements"
<PAGE>
Statements of Operations
Rainier Investment Management Mutual Funds
For the six months ended September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Small/Mid Intermediate
Cap Equity Core Equity Balanced Fixed Income
Portfolio Portfolio Portfolio Portfolio
-----------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income
Dividend income $ 783,158 $ 1,496,772 $ 240,808 $ -
Interest income 88,343 115,313 483,136 377,031
-----------------------------------------------------------
Total Income 871,501 1,612,085 723,944 377,031
-----------------------------------------------------------
Expenses
Investment advisory fees (Note 3) 388,272 549,867 133,034 29,735
Custodian fees 8,626 11,654 3,949 3,004
Administration fees (Note 3) 45,632 61,773 20,039 20,039
Fund accounting fees 14,437 16,328 13,492 11,311
Transfer agent fees 5,507 5,516 5,507 5,006
Legal fees 2,613 3,740 773 394
Distribution fees (Note 3) 114,198 183,289 47,512 14,867
Insurance 2,601 3,535 1,078 348
Audit fees 8,467 8,467 8,467 8,467
Miscellaneous fees 1,496 2,491 1,003 752
Reports to shareholders 995 1,734 501 255
Registration fees 19,346 24,771 10,962 7,018
Trustees fees 2,007 2,006 2,006 2,006
Amortization of deferred organization costs 2,130 2,130 2,130 2,130
-----------------------------------------------------------
Total expenses 616,327 877,301 250,453 105,332
Less: expenses recouped (reimbursed)
(Note 3) 59,724 69,200 (24,295) (48,835)
-----------------------------------------------------------
Net expenses 676,051 946,501 226,158 56,497
-----------------------------------------------------------
Net investment income 195,450 665,584 497,786 320,534
===========================================================
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on investments 4,032,774 4,942,524 986,703 (4,366)
Net change in unrealized appreciation
(depreciation) of investments 2,436,038 5,926,393 (101,541) (66,058)
-----------------------------------------------------------
Net gain (loss) on investments 6,468,812 10,868,917 885,162 (70,424)
-----------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $6,664,262 $11,534,501 $1,382,948 $250,110
===========================================================
</TABLE>
See accompanying "Notes To Financial Statements"
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Rainier Investment Management Mutual Funds
(unaudited)
<TABLE>
<CAPTION>
Small/Mid Cap Equity Portfolio Core Equity Portfolio
------------------------------ -----------------------------
For the six For the fiscal For the six For the fiscal
months ended year ended months ended year ended
09/30/96 03/31/96 09/30/96 03/31/96
-------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C> <C> <C>
Operations
Net investment income $ 195,450 $ 219,991 $ 665,584 $ 564,271
Net realized gain (loss) on investments sold 4,032,774 6,469,365 4,942,524 9,962,750
Net change in unrealized appreciation
(depreciation) on investments 2,436,038 3,113,718 5,926,393 4,750,865
-------------------------------------------------------------
Increase in net assets resulting
from operations 6,664,262 9,803,074 11,534,501 15,277,886
-------------------------------------------------------------
Distributions to shareholders
From net investment income (190,768) (174,847) (509,931) (414,862)
From net realized gain on investments sold (4,021,195) (3,070,420) (5,495,920) (5,319,129)
-------------------------------------------------------------
Total distributions (4,211,963) (3,245,267) (6,005,851) (5,733,991)
-------------------------------------------------------------
Capital share transactions
Proceeds from shares sold 50,973,835 68,177,149 88,483,526 83,183,140
Net asset value of shares issued on
reinvestment of distributions 4,124,373 2,037,533 5,513,062 5,016,780
Cost of shares redeemed (31,785,036) (7,397,555) (23,752,498) (10,508,694)
-------------------------------------------------------------
Net increase from capital share transactions 23,313,172 62,817,127 70,244,090 77,691,226
-------------------------------------------------------------
Net increase in net assets 25,765,471 69,374,934 75,772,740 87,235,121
NET ASSETS
Beginning of period 79,494,630 10,119,696 107,665,344 20,430,223
-------------------------------------------------------------
End of period $105,260,101 $79,494,630 $183,438,084 $107,665,344
=============================================================
CHANGE IN SHARES
Shares sold 2,852,385 4,019,207 5,068,488 4,981,758
Shares issued on reinvestment of distributions 238,265 123,637 318,674 306,462
Redeemed (1,814,492) (427,002) (1,353,890) (621,227)
-------------------------------------------------------------
Net increase 1,276,158 3,715,842 4,033,272 4,666,993
=============================================================
</TABLE>
<TABLE>
<CAPTION>
Intermediate
Balanced Portfolio Fixed Income Portfolio
----------------------------- ------------------------------
For the six For the fiscal For the six For the fiscal
months ended year ended months ended year ended
09/30/96 03/31/96 09/30/96 03/31/96
--------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C> <C> <C>
Operations
Net investment income $ 497,786 $ 598,335 $ 320,534 $ 444,329
Net realized gain (loss) on investments sold 986,703 3,064,177 (4,366) 16,825
Net change in unrealized appreciation
(depreciation) on investments (101,541) 829,555 (66,058) 120,026
--------------------------------------------------------------
Increase in net assets resulting
from operations 1,382,948 4,492,067 250,110 581,180
--------------------------------------------------------------
Distributions to shareholders
From net investment income (498,113) (587,477) (324,165) (444,289)
From net realized gain on investments sold (1,508,931) (1,931,855) (5,863) (8,254)
--------------------------------------------------------------
Total distributions (2,007,044) (2,519,332) (330,028) (452,543)
--------------------------------------------------------------
Capital share transactions
Proceeds from shares sold 22,782,749 16,060,694 6,220,952 4,228,208
Net asset value of shares issued on
reinvestment of distributions 1,908,813 2,334,948 307,353 404,112
Cost of shares redeemed (19,629,391) (2,012,747) (672,441) (1,390,314)
--------------------------------------------------------------
Net increase from capital share transactions 5,062,171 16,382,895 5,855,864 3,242,006
--------------------------------------------------------------
Net increase in net assets 4,438,075 18,355,630 5,775,946 3,370,643
NET ASSETS
Beginning of period 32,079,619 13,723,989 9,740,325 6,369,682
--------------------------------------------------------------
End of period $36,517,694 $32,079,619 $15,516,271 $9,740,325
==============================================================
CHANGE IN SHARES
Shares sold 1,545,312 1,124,356 508,289 337,423
Shares issued on reinvestment of distributions 134,144 166,862 25,138 32,613
Redeemed (1,370,782) (142,240) (55,015) (111,110)
--------------------------------------------------------------
Net increase 308,674 1,148,978 478,412 258,926
==============================================================
</TABLE>
See accompanying "Notes To Financial Statements"
<PAGE>
Financial Highlights
The following information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Semi-Annual Report. The
calculations are based on average number of shares outstanding for each period.
Rainier Investment Management Mutual Funds
For a share outstanding throughout the period
<TABLE>
<CAPTION>
Small/Mid Cap Equity Portfolio Core Equity Portfolio
------------------------------ ----------------------------
For the six For the fiscal For the six For the fiscal
months ended year ended months ended year ended
*09/30/96* 03/31/96 *09/30/96* 03/31/96
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $17.89 $13.89 $17.53 $13.84
Income from investment operations
Net investment income 0.04 0.05 0.07 0.11
Net realized and unrealized
gain (loss) on investments 1.31 5.17 1.17 5.13
-----------------------------------------------------
Total from investment operations 1.35 5.22 1.24 5.24
-----------------------------------------------------
Distributions
From net investment income (0.04) (0.06) (0.06) (0.11)
From net realized gains (0.80) (1.16) (0.68) (1.44)
-----------------------------------------------------
Total distributions (0.84) (1.22) (0.74) (1.55)
-----------------------------------------------------
Net asset value, end of period $18.40 $17.89 $18.03 $17.53
-----------------------------------------------------
Total return 7.84%** 38.38% 7.26%** 38.64%
=====================================================
Net assets at end of period (in 000's) $105,260 $79,495 $183,438 $107,665
=====================================================
Ratio of expenses to average net assets***
Before expense reimbursement/recoupment 1.35% 1.46% 1.20% 1.30%
After expense reimbursement/recoupment 1.48% 1.48% 1.29% 1.29%
=====================================================
Ratio of net investment income to average
net assets (net of expense
reimbursement/recoupment)*** 0.43% 0.66% 0.91% 1.07%
=====================================================
Portfolio turnover rate 64.51% 151.37% 60.04% 138.02%
=====================================================
Average commission rate paid $0.0588 $0.0562 $0.0592 $0.0575
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Balanced Portfolio Intermediate Fixed Income Portfolio
--------------------------- -----------------------------------
For the six For the fiscal For the six For the fiscal
months ended year ended months ended year ended
*09/30/96* 03/31/96 *09/30/96* 03/31/96
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.53 $12.96 $12.33 $12.00
Income from investment operations
Net investment income 0.18 0.38 0.32 0.70
Net realized and unrealized
gain (loss) on investments 0.51 2.82 (0.10) 0.34
-------------------------------------------------------
Total from investment operations 0.69 3.20 0.22 1.04
-------------------------------------------------------
Distributions
From net investment income (0.19) (0.37) (0.31) (0.70)
From net realized gains (0.52) (1.26) (0.01) (0.01)
-------------------------------------------------------
Total distributions (0.71) (1.63) (0.32) (0.71)
-------------------------------------------------------
Net asset value, end of period $14.51 $14.53 $12.23 $12.33
=======================================================
Total return 4.82%** 25.58% 1.87%** 8.85%
=======================================================
Net assets at end of period (in 000's) $36,518 $32,080 $15,516 $9,740
=======================================================
Ratio of expenses to average net assets***
Before expense reimbursement/recoupment 1.32% 1.50% 1.77% 2.17%
After expense reimbursement/recoupment 1.19% 1.19% 0.95% 0.95%
=======================================================
Ratio of net investment income to average
net assets (net of expense
reimbursement/recoupment)*** 2.62% 2.76% 5.38% 5.69%
=======================================================
Portfolio turnover rate 68.56% 114.85% 2.49% 15.49%
=======================================================
Average commission rate paid $0.0564 $0.0587 - -
=======================================================
</TABLE>
__________________________________
* Unaudited.
** Not Annualized.
*** Annualized.
See accompanying "Notes To Financial Statements"
<PAGE>
Notes to Financial Statements
Rainier Investment Management Mutual Funds
September 30, 1996
(unaudited)
- --------------------------------------------------------------------------------
Note 1. Organization
Rainier Investment Management Mutual Funds (the "Trust") was organized as a
business trust in Delaware on December 15, 1993 and is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified,
open-end management investment company. The Trust consists of four separate
series of portfolios: Small/Mid Cap Equity Portfolio, Core Equity Portfolio,
Balanced Portfolio, and Intermediate Fixed Income Portfolio (each a "Fund" and
collectively the "Funds").
Note 2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Funds.
A) Securities Valuation: The Funds invest in a range of securities, generally
including equities and U.S. Government securities. Equity securities are
valued at the last sale price (for exchange-listed securites) or last bid
price (if lacking any sales and for over-the-counter securities). Debt
securities generally are valued at the mean between the last bid and asked
prices. Debt securities with 60 days or less remaining to maturity are
valued on an amortized cost basis. Securities for which market quotations
are not readily available are valued at fair value as determined in good
faith by or under the direction of the Board of Trustees. There were no
such trades for the period ended September 30, 1996.
B) Securities Transactions, Dividends and Distributions: Security transactions
are recorded on trade date. Dividend income is recognized on the
ex-dividend date, and interest income is recorded on an accrual basis.
Realized gains or losses are reported on the basis of identified cost of
securities delivered. Bond discounts are accreted and premiums are
amortized. Distributions to shareholders are recorded on the ex-dividend
date.
C) Federal Income Taxes: The Funds intend to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and
to distribute substantially all of their net investment income and any net
realized capital gain to the shareholders of the Funds. Therefore, no
provision is made for Federal income or excise taxes.
D) Deferred Organization Costs: Organization costs of $22,375 have been
capitalized for each Fund as of April 8, 1994 and are being amortized over
a period of 60 months beginning on the date the Funds' registration became
effective. Rainier Investment Management, Inc.(R) (the "Investment
Advisor") has agreed that, in the event any of the initial shares are
redeemed during the 60-month period for amortizing the Funds' organization
costs, the proceeds will be reduced for the unamortized balances of such
costs in the same proportion as the number of shares redeemed bears to the
number of initial shares outstanding at the time of redemption.
E) 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 contingency assets and liabilities at the
date of the Financial Statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from
those estimates. Note 3. Investment Management Fee And Other Transactions
<PAGE>
Notes to Financial Statements - Continued
Rainier Investment Management Mutual Funds
September 30, 1996
(unaudited)
- --------------------------------------------------------------------------------
A) Investment Management Agreement: The Trust, on behalf of the Funds, has
entered into an investment management agreement with the Investment
Advisor. Under the terms of the agreement, the Trust will pay a fee equal
to the following annual percentages of average daily net assets:
Small/Mid Cap Equity Portfolio 0.85%
Core Equity Portfolio 0.75%
Balanced Portfolio 0.70%
Intermediate Fixed Income Portfolio 0.50%
Although not required to do so, the Investment Advisor has agreed to
reimburse each Fund to the extent necessary so that its ratio of operating
expenses to average daily net assets will not exceed the following levels.
Overall operating expense for each Fund will not fall below the applicable
percentage limitation until the Investment Advisor has been fully
reimbursed for fees foregone and expenses paid by the Investment Advisor
under this agreement:
Small/Mid Cap Equity Portfolio 1.48%
Core Equity Portfolio 1.29%
Balanced Portfolio 1.19%
Intermediate Fixed Income Portfolio 0.95%
These percentages are based on the average daily net assets of the Funds,
exclusive of interest, taxes, brokerage commissions, extraordinary expenses
and sales charges. This agreement may be terminated by either party upon 60
days' written notice.
B) Distribution Plan: The Trust, on behalf of the Funds, has approved a
Distribution Plan (the "Plan") in accordance with Rule 12b-1 under the 1940
Act. The Plan provides that the Funds will pay a fee to the Investment
Advisor at an annual rate of up to 0.25% of each Fund's average daily net
assets. The fee is paid to the Investment Advisor as reimbursement for, or
in anticipation of, expenses incurred for distribution-related activities.
C) Administrative Service Agreement: The Trust, on behalf of the Funds, has
entered into an administrative services agreement with an unrelated third
party. Under the terms of the agreement, each Fund will pay a monthly fee
based on the greater of $40,000 annual minimum or the annual rate of:
0.10% of first $100 million of average daily net assets
0.05% of next $100 million of average daily net assets
0.03% of average net assets over $200 million.
<PAGE>
Notes to Financial Statements - Continued
Rainier Investment Management Mutual Funds
September 30, 1996
(unaudited)
- --------------------------------------------------------------------------------
Note 4. Purchases and Sales of Securities
The aggregate security purchases and sales, other than short-term obligations
and U.S. Government securities, for the period ended September 30, 1996 were as
follows:
Fund Purchases Sales
---- --------- -----
Small/Mid Cap Equity Portfolio $ 71,552,990 $56,925,346
Core Equity Portfolio 147,431,142 85,235,463
Balanced Portfolio 25,471,243 21,970,069
Intermediate Fixed Income Portfolio 1,910,194 270,000
Balanced Portfolio and Intermediate Fixed Income Portfolio purchased $1,427,453
and $1,287,834 respectively, and sold $225,000 and $0, respectively, of U.S.
Government securities. There were no purchases or sales of U.S. Government
securities by the Small/Mid Cap Equity Portfolio and Core Equity Portfolio.
The aggregate unrealized appreciation and depreciation of portfolio securities
at September 30, 1996, based on costs for federal income tax purposes which are
same as book costs, were as follows:
Gross Gross
Unrealized Unrealized
Fund Appreciation Depreciation
---- ------------ ------------
Small/Mid Cap
Equity Portfolio $6,267,953 $253,757
Core Equity Portfolio 12,710,525 878,230
Balanced Portfolio 1,312,421 191,507
Intermediate Fixed
Income Portfolio 55,386 -
Note 5. Related Party Transactions
Certain officers and Trustees of the Funds are also officers and/or directors of
the Investment Advisor. Outside Trustees are compensated by the Trust at the
total rate of $4,000 per year plus $1,000 for each meeting of the Board of
Trustees attended and any travel expenses incurred in such meetings.
<PAGE>
DIRECTORY OF FUNDS' SERVICE PROVIDERS
Investment Advisor
Rainier Investment Management, Inc.,(R) 601 Union Street, Suite 2801, Seattle,
WA 98101
Distributor
First Fund Distributors, Inc., 4455 E. Camelback Road, Suite 261-E, Phoenix, AZ
85018
Administrator
Investment Company Administration Corporation, 2025 E. Financial Way, Suite 101,
Glendora, CA 91741
Custodian, Transfer Agent and Fund Accountant
Firstar Trust Company, 615 E. Michigan Street, Milwaukee, WI 53202
Independent Auditors
KPMG Peat Marwick LLP, 3100 Two Union Square, 601 Union Street, Seattle, WA
98101
Legal Counsel
Heller Ehrman White & McAuliffe, 333 Bush Street, San Francisco, CA 94104
Index Descriptions
------------------
The Standard & Poor's 500 Stock Index is an unmanaged index composed of 500
industrial, utility, transportation, and financial companies of the U.S.
markets. The Index represents about 75% of New York Stock Exchange ("NYSE")
market capitalization and 30% of NYSE issues. It is a capitalization-weighted
index calculated on a total return basis with dividends reinvested.
The Russell Midcap(TM) Index is an unmanaged index composed of the equities of
companies ranging in value from approximately $1.0 to $6.5 billion, as of June
30, 1996.
The Lehman Brothers Government/Corporate Intermediate Bond Index ("Lehman
Intermediate Bond Index") is an unmanaged index composed of all bonds covered by
the Lehman Brothers Government/Corporate Index with maturities between one and
9.99 years. The Consumer Price Index ("CPI") is a measure of change in consumer
prices as determined by a monthly survey of the U.S. Bureau of Labor Statistics.
The Salomon Brothers 3-Month Treasury Bill Index ("91-Day U.S. Treasury Bill
Index") is an unmanaged index of equal dollar amounts of three-month Treasury
bills purchased at the beginning of each of three consecutive months.
The "Balanced Index" consists of 50% Standard & Poor's 500 Stock Index, 40%
Lehman Brothers Government/Corporate Intermediate Bond Index, 10% 91-Day U.S.
Treasury Bill Index.
