<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 21, 1998
File Nos. 333-60705
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 1 [x]
SELECT ADVISORS TRUST A
(Exact Name of Registrant as Specified in Charter)
Registrant's Area Code and Telephone Number: (513) 361-7900
311 PIKE STREET, CINCINNATI, OHIO
45202
(Address of Principal Executive Offices)
ANDREW S. JOSEF
INVESTORS BANK & TRUST COMPANY
200 CLARENDON STREET, BOSTON, MASSACHUSETTS 02116
(Name and Address of Agent for Service)
copies to:
Mark H. Longenecker, Esq.
Karen M. McLaughlin, Esq.
Frost & Jacobs LLP Edward G. Harness, Jr.
2500 East 5th Street Touchstone Securities, Inc.
P.O. Box 5715 311 Pike Street
Cincinnati, Ohio 45201-5715 Cincinnati, Ohio 45202
Approximate Date of Proposed Public Offering: As soon as practicable after
effectiveness of this Registration Statement.
Title of Securities Being Registered: Class C Shares of Beneficial Interest
No filing fee is required because an indefinite number of shares have previously
been registered pursuant to Section 24(f) of the Investment Company Act of 1940,
as amended.
================================================================================
The Registrant hereby amends this Registration Statement under the
Securities Act of 1933 on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement will thereafter become
effective or on such date as the Commission, acting pursuant to Section 8(a),
may determine.
<PAGE> 2
SELECT ADVISORS TRUST A
FORM N-14
CROSS REFERENCE SHEET
Part A
<TABLE>
<CAPTION>
ITEM NO. HEADINGS IN PROXY STATEMENT/PROSPECTUS OR SAI
<S> <C>
1. Beginning of Registration Statement and Outside
Front Cover of Prospectus................................... Front Cover
2. Beginning and Outside Back Cover of Prospectus.............. Table of Contents; Available
Information
3. Synopsis Information and Risk Factors....................... Summary; Risk Factors
4. Information About the Transaction........................... Front Cover; Summary;
The Proposed Reorganization
5. Information About the Registrant............................ Prospectus of Select Advisors
Trust A, dated May 1, 1998
6. Information About the
Company Being Acquired...................................... Prospectus of Select Advisors
Trust C, dated May 1, 1998
7. Voting Information.......................................... Introduction and Voting
Information
8. Interest of Certain Persons and Experts..................... Interests of Certain Persons in
the Reorganization; Miscellaneous
9. Additional Information Required for Reoffering
by Persons Deemed to be Underwriters........................ Not applicable
Part B
10. Cover Page ................................................. Cover Page
11. Table of Contents .......................................... Cover Page
12. Additional Information About the Registrant ................ Statement of Additional
Information of Select Advisors
Trust A, dated May 1, 1998
13. Additional Information About
the Company Being Acquired.................................. Statement of Additional
Information of Select Advisors
Trust C, dated May 1, 1998
14. Financial Statements........................................ Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this Registration Statement.
2
<PAGE> 3
TOUCHSTONE FAMILY OF FUNDS
SELECT ADVISORS TRUST C
October 1, 1998
Dear Shareholder:
I am writing to ask for your support of an important proposal affecting
your Fund.
Your Fund is a part of Select Advisors Trust C ("Trust C"). After careful
consideration, the Board of Trustees of Trust C has unanimously voted in favor
of combining Trust C with Select Advisors Trust A ("Trust A"). By combining
Trust C with Trust A, your Fund should experience lower operating expenses from
a simplified organizational structure (your fund is currently part of a more
complicated Hub and Spoke(R) structure).
You are being asked to approve the combination of your Fund (a "Trust C
Fund") with the corresponding fund (each a "Trust A Fund") of Trust A. Please
note that by voting "FOR" this proposal, you will not be affecting the value of
your investment. At the time the combination occurs you will still own the same
number of shares at the same price per share. You will be exposed to no
additional investment risk because the investment objective of your Fund and the
policies governing the investment of your assets will not change. All costs of
the reorganization will be paid by Touchstone Advisors, Inc. (your fund advisor)
at absolutely no cost to you. There will be no tax consequences to you as a
result of the combination of Trust A and Trust C.
The proposal will be voted on at an upcoming Special Meeting of
Shareholders on Thursday, October 29, 1998. You may vote on this proposal by
mail (using the enclosed Proxy Card), fax or in person. PLEASE TAKE A FEW
MINUTES TO REVIEW THE ENCLOSED MATERIALS AND RETURN THE PROXY CARD TODAY. If you
have any questions or need any help in voting your shares, please call us
toll-free at 1-800-669-2796.
The Board of Trustees of Trust C believes this reorganization is in each
Fund's and your best interests. I encourage you to vote "FOR" the proposed
reorganization as I believe this will enable us to better serve your needs.
Thank you for investing with Touchstone and for your continued support.
Sincerely,
Edward G. Harness, Jr.
President
<PAGE> 4
IMPORTANT INFORMATION YOU SHOULD CONSIDER
The following is a brief summary of some issues that may be important to
you. As is true with any summary, you may have additional concerns or questions
that may not be adequately addressed by this summary. As a result, this summary
is qualified in its entirety by the more detailed information contained
elsewhere in this document, or incorporated into this document. We strongly
encourage you to read this entire Proxy Statement/Prospectus for a more detailed
description of the proposed reorganization of Trust C. Please read all materials
before voting.
PROPOSAL IMPACT
HOW DOES THE PROPOSAL AFFECT ME?
If the proposed reorganization is approved, the potential benefits include:
- Lower Fund operating expenses: Your Fund should experience lower
operating expenses (such as auditing fees and printing costs) due to the
simplified organizational structure.
- Simplified reporting: Reporting on your Fund should be less complicated
as there will be fewer entities, resulting in disclosures that are easier
to understand.
In addition, the proposed reorganization will generally not affect your
financial situation:
- No cost to you: Touchstone Advisors (your Fund advisor) will pay all
costs relating to the reorganization.
- No tax consequences to you: The exchange of shares will be tax free.
- No change in the number of shares you own: You will receive Class C
shares of Trust A equal to the number of Trust C Fund shares you owned.
- No change in the value per share that you own or your account value.
WILL THE DISTRIBUTION, PURCHASE AND REDEMPTION PROCEDURES AND EXCHANGE RIGHTS
CHANGE AS A RESULT OF THE REORGANIZATION?
No. Class C shares of each Trust A Fund will have the same distribution,
purchase, redemption and exchange policies and procedures as your Trust C Fund
shares.
ARE THE TRUST A FUNDS RISKIER THAN THE TRUST C FUNDS?
No. Each set of corresponding Funds has the same investment policies,
procedures and strategies.
WILL I REALIZE INCOME OR CAPITAL GAINS FOR FEDERAL TAX PURPOSES AS A RESULT OF
THE REORGANIZATION?
No. The exchange of shares in the reorganization will be tax free. We will
obtain a tax opinion confirming that the reorganization will not be a taxable
event for you for federal income tax purposes. Your tax basis and holding period
for your shares will be unchanged.
THE PROPOSED REORGANIZATION
WHY IS THIS REORGANIZATION BEING PROPOSED?
The current mutual fund complex is a Hub and Spoke(R) structure made up of
three entities: the Hub Portfolio, Trust A and Trust C. Currently, each Trust A
Fund and each Trust C Fund invests its assets in a Hub Portfolio, where they are
managed collectively. The proposed reorganization will result in only one
surviving entity, Trust A, which will invest the collective assets directly. The
Board of Trustees of Trust C has unanimously voted to approve this
reorganization.
<PAGE> 5
HOW WILL THE REORGANIZATION BE ACCOMPLISHED?
First, each Trust A Fund and each Trust C Fund will withdraw all of their
respective assets from the corresponding Hub Portfolio. Next, each Trust C Fund
will exchange its assets for Class C shares in the corresponding Trust A Fund.
Each Trust C Fund will then distribute these Class C shares of Trust A to you --
the Trust C shareholders. Please note that the value of your account will not
change as a result of this reorganization.
WHEN WILL THE REORGANIZATION TAKE PLACE?
Subject to receiving shareholder approval, the reorganization is expected
to take place after the close of business on December 31, 1998.
VOTING
WHAT IS THE PURPOSE OF THE UPCOMING MEETING?
The Board of Trustees has recommended combining each Trust C Fund with the
corresponding Trust A Fund. This combination requires shareholder approval. The
shareholder meeting will be held on Thursday, October 29, 1998 at 10:00 a.m.,
Eastern time, at the offices of the Funds, 311 Pike Street, Cincinnati, OH
45202. Shareholders of record as of the close of business on September 24, 1998
are eligible to vote.
HOW DO I VOTE MY SHARES?
You may vote by mail, fax or in person at the Special Meeting.
- By mail: Complete, sign and mail the enclosed Proxy Card to us in the
postage-paid envelope that has been provided.
- By fax: Complete and sign the enclosed Proxy Card and fax both sides to
.
- In person: Attend and vote your shares at the Meeting.
Your shares will be voted exactly as you tell us. If you simply sign the
card and return it, we will follow the recommendation of the Board of Trustees
and vote "FOR" the reorganization.
IF I SEND MY PROXY IN NOW AS REQUESTED, CAN I CHANGE MY VOTE LATER?
Yes. A proxy can be revoked at any time by writing to us, by sending us
another later dated proxy or by attending the meeting and voting in person. Even
if you plan to attend the meeting, we ask that you return the enclosed proxy
card. Doing so will help ensure that the meeting is not delayed.
FOR MORE INFORMATION
WHERE CAN I GET MORE INFORMATION ABOUT THE FUNDS?
A copy of the Trust A Funds' Prospectus accompanies this Proxy Statement.
If you would like a copy of the Trust C Funds' Prospectus or either the Trust A
Funds' or Trust C Funds' Statement of Additional Information, or most recent
Annual Report or Semi-Annual Report to Shareholders, you can contact the
Touchstone Family of Funds at 1-800-669-2796.
ALL OTHER QUESTIONS
For any other questions you may have, please contact the Touchstone Family
of Funds at 1-800-669-2796.
<PAGE> 6
SELECT ADVISORS TRUST C
Touchstone Emerging Growth Fund C
Touchstone International Equity Fund C
Touchstone Income Opportunity Fund C
Touchstone Value Plus Fund C
Touchstone Growth & Income Fund C
Touchstone Balanced Fund C
Touchstone Bond Fund C
311 Pike Street
Cincinnati, Ohio 45202
(800) 669-2796
NOTICE OF SPECIAL MEETING
Notice is hereby given that a Special Meeting (the "Special Meeting") of
shareholders of each of Touchstone Emerging Growth Fund C, Touchstone
International Equity Fund C, Touchstone Income Opportunity Fund C, Touchstone
Value Plus Fund C, Touchstone Growth & Income Fund C, Touchstone Balanced Fund C
and Touchstone Bond Fund C (each a "Trust C Fund", and collectively the "Trust C
Funds"), each a series of Select Advisors Trust C ("Trust C"), a Massachusetts
business trust, will be held on October 29, 1998, at 10:00 a.m., Eastern Time,
at the offices of Trust C, 311 Pike Street, Cincinnati, Ohio 45202. At the
Special Meeting, shareholders of each Trust C Fund will each be asked to
consider and vote upon the following proposal:
1. To approve an Agreement and Plan of Reorganization and Liquidation
and the transactions contemplated thereby, including (a) the transfer of
substantially all of the assets and liabilities of each Trust C Fund to the
corresponding series of Select Advisors Trust A (a "Trust A Fund"), in
exchange for Class C shares of such Trust A Fund, and (b) the distribution
of such Trust A Fund's Class C shares to the shareholders of such Trust C
Fund.
Shareholders of record at the close of business on September 24, 1998, are
entitled to notice of, and to vote at, the Special Meeting. Your attention is
called to the accompanying Proxy Statement. Regardless of whether you plan to
attend the Meeting, PLEASE COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY
CARD(S) so that your shares of the Trust C Funds may be voted in accordance with
your instructions. If you are present at the Special Meeting, you may change
your vote, if desired, at that time.
By Order of the Board of Trustees.
Andrew S. Josef
Secretary
Cincinnati, Ohio
October 1, 1998
<PAGE> 7
<TABLE>
<S> <C>
SELECT ADVISORS TRUST C SELECT ADVISORS TRUST A
(Class C Shares of Beneficial Interest)
Touchstone Emerging Growth Fund C Touchstone Emerging Growth Fund A
Touchstone International Equity Fund C Touchstone International Equity Fund A
Touchstone Income Opportunity Fund C Touchstone Income Opportunity Fund A
Touchstone Value Plus Fund C Touchstone Value Plus Fund A
Touchstone Growth & Income Fund C Touchstone Growth & Income Fund A
Touchstone Balanced Fund C Touchstone Balanced Fund A
Touchstone Bond Fund C Touchstone Bond Fund A
PROXY STATEMENT PROSPECTUS
</TABLE>
311 Pike Street
Cincinnati, Ohio 45202
(800) 669-2796
------------------------
This Proxy Statement/Prospectus, which you should read carefully and keep
for future reference, contains information that a prospective investor should
know before voting. It is being furnished to the shareholders of each of
Touchstone Emerging Growth Fund C, Touchstone International Equity Fund C,
Touchstone Income Opportunity Fund C, Touchstone Value Plus Fund C, Touchstone
Growth & Income Fund C, Touchstone Balanced Fund C and Touchstone Bond Fund C
(each a "Trust C Fund, and collectively the "Trust C Funds"), each a series of
Select Advisors Trust C ("Trust C"), a Massachusetts business trust, in
connection with a proposed transaction (the "Reorganization") whereby the Hub
and Spoke(R) structure in which the Trust C Funds presently operate as spokes
would be collapsed into a single mutual fund with separate classes of shares,
one class of which would have a distribution system and fee structure (including
a Rule 12b-1 fee) (the "Class C shares") identical to that of the Trust C Funds,
and a second class which would have a distribution system and fee structure
(including a Rule 12b-1 fee) identical to that of each of the Touchstone
Emerging Growth Fund A, Touchstone International Equity Fund A, Touchstone
Income Opportunity Fund A, Touchstone Value Plus Fund A, Touchstone Growth &
Income Fund A, Touchstone Balanced Fund A and Touchstone Bond Fund A (each a
"Trust A Fund, and collectively the "Trust A Funds"), each a series of Select
Advisors Trust A ("Trust A"), a Massachusetts business trust. Each Trust A Fund
presently operates as a second spoke of the Hub and Spoke(R) structure. Each
Trust C Fund and Trust A Fund currently invests all of its respective investable
assets in a corresponding portfolio (each a "Hub Portfolio") of Select Advisors
Portfolios (the "Hub Portfolios Trust").
If the Reorganization is approved, each Trust A Fund will acquire all of
the assets (subject to the liabilities) of the corresponding Trust C Fund in
exchange for such Trust A Fund's Class C shares. Class C shares of a Trust A
Fund so received by each Trust C Fund would be distributed pro rata to
shareholders of the Trust C Fund, and the Trust C Fund would be dissolved. As a
result of the Reorganization, each shareholder of a Trust C Fund would receive,
in exchange for the shares of the Trust C Fund owned by such shareholder, an
equal number of the corresponding Trust A Fund's Class C shares. Following the
proposed Reorganization, the assets of each Trust C Fund acquired by the
corresponding Trust A Fund would continue to be managed under the Trust C Fund's
current investment objective and pursuant to its current investment programs and
policies, except that, rather than attempting to achieve this investment
objective by investing all of the investable assets in a Hub Portfolio, Trust A,
on behalf of each Trust A Fund, would attempt to achieve this objective by
retaining an investment advisor and sub-advisors to directly manage those
assets, together with such Trust A Fund's other assets. Touchstone Advisors,
Inc. (the "Advisor"), the current investment advisor to each Hub Portfolio, is
expected to continue to serve as the investment advisor to each Trust A Fund
pursuant to the terms of an investment advisory agreement substantively
identical (including advisory fees provided thereunder) to the current
Investment Advisory Agreement by and between the Advisor and the Hub Portfolios
Trust (on behalf of each Hub Portfolio), dated September 9, 1994, as amended. It
is also anticipated that each investment sub-advisor (each a "Portfolio
Advisor") that currently provides investment advisory services to a Hub
Portfolio would continue to serve as the Portfolio Advisor to each corresponding
Trust A Fund pursuant to the terms of an investment sub-advisory agreement
substantively identical (including fees provided thereunder to be paid by the
Advisor) to the current respective Investment Sub-Advisory Agreements by and
between the Advisor and each Portfolio Advisor.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE SHARES OF THE TRUST A FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE NATIONAL CREDIT UNION SHARE
INSURANCE FUND, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. MUTUAL FUNDS
INVOLVE INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
Upon request and at no cost to a requesting shareholder, Trust C will mail,
by first class mail, copies of its Annual Report to Shareholders dated December
31, 1997 and its Semi-Annual Report to Shareholders dated June 30, 1998.
Requests should be directed to Trust C at the address or telephone number
provided above.
Additional information about Trust A and Trust C has been filed with the
Securities and Exchange Commission (the "Commission") and is available upon oral
or written request and without charge. See "Available Information" below.
This Proxy Statement/Prospectus is first being mailed to shareholders on or
about October 1, 1998.
The date of this Proxy Statement/Prospectus is October 1, 1998
<PAGE> 8
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION....................................... 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. 1
INTRODUCTION AND VOTING INFORMATION......................... 1
Solicitation.............................................. 1
Purpose of Meeting........................................ 2
Quorum and Voting......................................... 2
Adjournment............................................... 2
INTERESTS OF CERTAIN PERSONS IN THE REORGANIZATION.......... 3
RECOMMENDATION OF BOARD OF TRUSTEES......................... 4
PRO FORMA EXPENSE INFORMATION............................... 5
SUMMARY..................................................... 8
Introduction.............................................. 8
Proposed Reorganization................................... 8
Comparison of Shares of Trust C Funds to Class C shares of
Trust A Funds.......................................... 9
Tax Consequences.......................................... 10
RISK FACTORS................................................ 10
THE PROPOSED REORGANIZATION................................. 10
Plan of Reorganization and Liquidation.................... 10
Reasons for the Proposed Reorganization................... 11
Description of Class C Shares of each Trust A Fund........ 12
Tax Considerations........................................ 13
Capitalization............................................ 14
MISCELLANEOUS............................................... 14
Principal Shareholders.................................... 14
Interests of Experts and Counsel.......................... 14
Costs of Solicitation..................................... 14
Shareholder Meetings...................................... 15
APPENDIX A -- Agreement and Plan of Reorganization and
Liquidation............................................... 16
</TABLE>
i
<PAGE> 9
AVAILABLE INFORMATION
Trust A has filed with the Commission a Registration Statement on Form N-14
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Class C shares of each Trust A Fund
offered hereby. As permitted by the rules and regulations of the Commission,
this Proxy Statement/Prospectus and the accompanying Statement of Additional
Information omit certain information, exhibits and undertakings contained in the
Registration Statement. Such additional information can be inspected at the
principal offices of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 and copies of the Registration Statement can be obtained from the
Commission at prescribed rates by writing to the Commission at such address. For
further information, reference is made to the Registration Statement and to the
exhibits thereto.
Trust A and Trust C are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the
Investment Company Act of 1940, as amended (the "1940 Act"), and as such file
reports and other information with the Commission. Reports, proxy statements and
other information filed with the Commission can be inspected and copied at the
Public Reference Facilities of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as the following regional offices: Seven World
Trade Center, 13th Floor, New York, New York 10048; and CitiCorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material may be obtained at prescribed rates from the Public Reference Branch,
Office of Consumer Affairs and Information of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549.
No person has been authorized to give any information or to make any
representations other than those contained in this Proxy Statement/Prospectus in
connection with the offer contained herein and, if given or made, such other
information or representations must not be relied upon as having been authorized
by Trust C or Trust A. This Proxy Statement/Prospectus does not constitute an
offer to sell securities in any state or other jurisdiction to any person to
whom it would be unlawful to make such offer in such state or jurisdiction.
Neither the delivery of this Proxy Statement/Prospectus nor any sale hereunder
shall under any circumstances create any implication that there have been no
changes in the affairs of Trust C or Trust A subsequent to the date of this
Proxy Statement/Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
A Statement of Additional Information, dated October 1, 1998, relating to
the proposed Reorganization described in this Proxy Statement/Prospectus (the
"Reorganization SAI") has been filed with the Commission and is incorporated by
reference herein. A copy of the Reorganization SAI may be obtained without
charge by writing to or calling Trust A at the above address or telephone
number. The Trust C Funds' current Prospectus dated May 1, 1998, as supplemented
to date (the "Trust C Prospectus") has been filed with the Commission as part of
Post-Effective Amendment No. 6 to Trust C's Registration Statement on Form N-1A
(1933 Act Reg. No. 33-76146; 1940 Act File No. 811-8404), and is incorporated by
reference herein. The Trust A Funds' current Prospectus dated May 1, 1998, as
supplemented to date (the "Trust A Prospectus") has been filed with the
Commission as part of Post-Effective Amendment No. 6 to Trust A's Registration
Statement on Form N-1A (1933 Act Reg. No. 33-75764; 1940 Act File No. 811-8380),
and is incorporated by reference herein. A copy of the Trust A Prospectus
accompanies this Proxy Statement/Prospectus.
All information contained in this Proxy Statement/Prospectus relating to
Trust C and/or the Trust C Funds has been supplied by Trust C, and all
information relating to Trust A and/or the Trust A Funds has been supplied by
Trust A.
INTRODUCTION AND VOTING INFORMATION
SOLICITATION
This Proxy Statement/Prospectus is being furnished to the shareholders of
each Trust C Fund in connection with the solicitation of proxies by Trust C's
Board of Trustees to be used at a Special Meeting of
1
<PAGE> 10
Shareholders (the "Special Meeting") to be held on Thursday, October 29, 1998 at
10:00 a.m., Eastern time, at the offices of Trust C, 311 Pike Street,
Cincinnati, Ohio 45202.
PURPOSE OF MEETING
The purpose of the Special Meeting is to consider and vote upon an
Agreement and Plan of Reorganization and Liquidation (the "Plan") pursuant to
which each Trust C Fund would be reorganized into a specially-designated class
of shares of beneficial interest of the corresponding Trust A Fund. A copy of
the proposed Plan is attached as Appendix A to this Proxy Statement/Prospectus.
QUORUM AND VOTING
The presence at the Special Meeting, in person or by proxy, of shareholders
representing a majority of all shares of each Trust C Fund entitled to vote on a
matter constitutes a quorum for the transaction of business by that Fund.
Broker non-votes are proxies from brokers or other nominee owners
indicating that such persons have not received instructions from the beneficial
owners or other persons entitled to vote the shares as to a matter with respect
to which the brokers or other nominee owners do not have discretionary power to
vote. In tabulating votes on any matter, abstentions and broker non-votes will
be counted as represented for purposes of determining the presence or absence of
a quorum, and as such will have the effect of a no vote for purposes of Proposal
1.
Shares represented by properly executed proxies received by Trust C will be
voted at the Special Meeting and any adjournment thereof in accordance with the
terms of such proxies. However, if no instructions are specified on a signed
proxy received from a shareholder, the shares will be voted "FOR" Proposal 1. A
shareholder may revoke his or her proxy at any time prior to the voting thereof
by filing a written notice of revocation with the Secretary of Trust C or by
delivering a duly executed proxy bearing a later date.
Shareholders of record at the close of business on September 24, 1998 (the
"Record Date") will be entitled to one vote on each matter presented for each
share so held. The number of shares of beneficial interest of each Trust C Fund
outstanding on that date is set forth below.
<TABLE>
<CAPTION>
FUND NUMBER OF SHARES OUTSTANDING
---- ----------------------------
<S> <C>
Touchstone Emerging Growth Fund C...........................
Touchstone International Equity Fund C......................
Touchstone Income Opportunity Fund C........................
Touchstone Value Plus Fund C................................
Touchstone Growth & Income Fund C...........................
Touchstone Balanced Fund C..................................
Touchstone Bond Fund C......................................
</TABLE>
To be approved, the Plan and the Reorganization contemplated thereby will
require the affirmative vote of "a majority of the outstanding voting
securities" of each Trust C Fund, as that term is defined in the 1940 Act. A
majority of the outstanding voting securities means the lesser of (1) 67% or
more of a Trust C Fund's shares present at a meeting, if shareholders who are
the owners of more than 50% of such Fund's shares then outstanding are present
in person or by proxy; or (2) more than 50% of a Trust C Fund's outstanding
shares.
ADJOURNMENT
In the event that sufficient votes in favor of Proposal 1 are not received
by the time scheduled for the Special Meeting, the persons named as proxies may
propose one or more adjournments of the Special Meeting to permit further
solicitation of proxies with respect to such proposal. The Special Meeting also
may be adjourned in the event certain issues under the 1940 Act relating to the
transactions contemplated by the Plan have not been resolved to the mutual
satisfaction of Trust A and Trust C by the scheduled time of the Special
Meeting. See "The Proposed Reorganization -- Agreement and Plan of
Reorganization and Liquidation."
2
<PAGE> 11
Any such adjournment will require the affirmative vote of a majority of the
votes cast on the question in person or by proxy at the session of the Special
Meeting to be adjourned. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of such
proposal. They will vote against any such adjournment those proxies required to
be voted against such proposal.
INTERESTS OF CERTAIN PERSONS IN THE REORGANIZATION
Trust C presently is part of a two tiered, master/feeder mutual fund
complex known as a Hub and Spoke(R) structure. In this structure, each Trust C
Fund (each of which sometimes is referred to as a spoke) invests all of its
investable assets in the corresponding Hub Portfolio. In theory, other
investment vehicles, such as other investment companies, retirement plans, trust
accounts, and other entities, could become additional spokes of a Hub Portfolio
and invest assets in such Hub Portfolio. At the Hub Portfolio level, assets so
invested would be aggregated with assets invested by other spokes and would be
commonly managed. Like each Trust C Fund, each Trust A Fund is a mutual fund
which invests all of its investable assets in the corresponding Hub Portfolio.
Each Trust A Fund's capital structure presently consists of a single class
of shares of beneficial interest. However, the Board of Trustees of Trust A has
adopted an operating plan and taken other actions necessary to retitle (without
altering the rights and privileges) each Trust A Fund's presently authorized
class of shares of beneficial interest as Class A shares of beneficial interest
(the "Class A shares"), and to designate other classes of shares, Class C shares
of beneficial interest (the "Class C shares") and Class Y shares of beneficial
interest (the "Class Y shares"), within each Trust A Fund. The Reorganization
involves the collapsing of the Hub and Spoke(R) structure into the multi-class
structure of Trust A (which would then be renamed to eliminate the "A"
designation), and eliminating each Hub Portfolio, each Trust C Fund and the
respective investment companies of which they are series. Following the
Reorganization, all of the assets of each Trust C Fund and the corresponding
Trust A Fund presently invested in the corresponding Hub Portfolio would be held
by the Trust A Fund, all of the presently outstanding shares of the Trust C Fund
would be converted into an equal number of the Trust A Fund's Class C shares,
and all of the currently outstanding shares of the Trust A Fund would be
designated as such Trust A Fund's Class A shares (but would not otherwise be
affected).
Under the present Hub and Spoke(R) structure, the Advisor, the Portfolio
Advisors, Investors Bank & Trust Company ("Investors Bank") and State Street
Bank and Trust Company ("State Street") each provide various services to the Hub
Portfolios, the Trust C Funds and the Trust A Funds, and receive fees for doing
so (see the section of the accompanying Trust C Prospectus captioned "Management
of the Trust and the Funds" for a detailed description of such services and
their related compensation). It is anticipated that, following the
Reorganization, the Advisor, each Portfolio Advisor, Investors Bank and State
Street will continue to provide comparable services to the Trust A Funds with
respect to both the Class C shares and the Class A shares of each Trust A Fund
for the same or lower fees as presently paid in the aggregate by the Hub
Portfolios, the Trust A Funds and the Trust C Funds, as the case may be, all
pursuant to new or amended agreements to be executed between Trust A (on behalf
of each Trust A Fund) and the Advisor, each Portfolio Advisor, Investors Bank
and State Street, as the case may be, with terms substantively identical to the
current service agreements relating to such services.
It is anticipated that the Reorganization will result in an overall
reduction in the expenses that will be allocated to Class C shares and Class A
shares of each Trust A Fund. It should be noted, however, that Touchstone
Advisors has voluntarily agreed (the "Sponsor Agreement") to "cap" the operating
expenses of each Trust C Fund and each Trust A Fund and the corresponding
Portfolios by waiving or reimbursing certain of those expenses, and has agreed
that upon consummation of the Reorganization it will continue, for a time, to
"cap" the operating expenses of Class C shares and Class A shares of each Trust
A Fund, all as set forth below under "Pro Forma Expense Information." This means
that while such waivers or reimbursements continue, a reduction of each Trust A
Fund's expenses will benefit Touchstone Advisors to the extent that it reduces
the amount that must be waived or reimbursed. Nevertheless, if (i) the
Reorganization reduces the expenses of a Trust A Fund such that its total
operating expenses fall below the level at which Touchstone Advisors has agreed
to cap such expenses, or (ii) Touchstone Advisors decides to stop waiving or
reimbursing
3
<PAGE> 12
a Fund's operating expenses, any reduction in the expenses allocated to Class C
shares and Class A shares of each Trust A Fund that may result from the
Reorganization will directly benefit shareholders.
The Sponsor Agreement may be terminated, by Touchstone Advisors at the end
of any calendar quarter, or by Trust A or Trust C on not less than 30 days'
prior written notice. Touchstone Advisors has advised Trust A and Trust C that
it will continue the Sponsor Agreement through at least December 31, 1999.
It is also possible that the Reorganization potentially could, by making
investment in each Trust A Fund's Class A and Class C shares more attractive as
compared to investment in shares of the Trust C Funds and the Trust A Funds,
indirectly cause an increase in the total assets invested in the complex.
Because certain of the service fees payable to the Advisor, the Portfolio
Advisors, Investors Bank and State Street are based on average daily net
assets, the increased asset size could result in greater fees payable to such
parties over the long term. Each such party may be deemed to have an indirect
financial interest in the Reorganization by virtue of the potential increase in
assets and related potential increase in fees payable to them.
The following table shows the percentage of outstanding shares of each
Trust A Fund and each Trust C Fund owned of record by Western-Southern Life
Assurance Company ("the Company") or The Western and Southern Life Insurance
Company ("Western Southern Life"), each an affiliate of the Advisor, on
September 24, 1998. Each is organized under the laws of the State of Ohio and
their principal offices are located at 400 Broadway, Cincinnati, Ohio 45202.
<TABLE>
<CAPTION>
TRUST C FUND COMPANY WESTERN SOUTHERN LIFE
- ------------ ------- ---------------------
<S> <C> <C>
Emerging Growth Fund C.................................. 55.69% 0.00%
International Equity Fund C............................. 69.71% 0.00%
Income Opportunity Fund C............................... 34.12% 0.00%
Value Plus Fund C....................................... 0.00% 99.76%
Growth & Income Fund C.................................. 7.88% 0.00%
Balanced Fund C......................................... 52.70% 0.00%
Bond Fund C............................................. 13.79% 0.00%
</TABLE>
Since the Company or Western Southern Life owns more than 5% of the
outstanding shares of each Trust C Fund, each arguably would have the ability to
influence the proposed Reorganization based on its ownership of shares of a
Trust C Fund.
In order to address the policy concerns underlying Section 17(a) of the
1940 Act and Rule 17a-8 promulgated thereunder with respect to the influence of
persons affiliated with an investment company due to share ownership, each of
the Company and Western Southern Life has agreed to vote the shares of any Trust
C Fund that it owns in the same proportion as the vote of all other shareholders
of the relevant Trust C Fund. By so "echo voting," the Company and Western
Southern Life will, in effect, allow the remaining Trust C shareholders to
approve or disapprove the proposed Reorganization. This method of voting ensures
that neither the Company nor Western Southern Life will improperly influence
Trust C, any Trust C Fund or the terms of the proposed Reorganization.
Trust A, Trust C, the Hub Portfolios Trust and certain affiliated persons
(the "Applicants") have submitted an application (the "Application") to the
Commission for an Order (the "Order"), pursuant to Section 6(c) and Section
17(b) of the 1940 Act, exempting the Applicants from the provisions of Section
17(a) of the 1940 Act to permit them to implement the proposed Reorganization.
Section 17(a) generally prohibits any affiliated person, or any affiliated
person of an affiliated person, of a registered company, acting as principal,
from knowingly purchasing any security from, or selling any security to, the
investment company. Due to certain affiliations between and among the Applicants
and the redemptions in kind that will be effected as part of the proposed
Reorganization, which may be deemed to be purchases and sales of securities,
Section 17(a) may be applicable to the proposed Reorganization and may prohibit
the Applicants from implementing the proposed Reorganization unless the
Applicants obtain the Order. Section 6(c) and Section 17(b) permit the
Commission to issue an order of exemption if the applicable statutory standards
are met. In the Application, the Applicants have asserted that they meet the
applicable statutory standards because (1) the terms of the proposed
Reorganization are reasonable and fair and do not involve overreaching on the
part of any person concerned, and (2) the proposed Reorganization will be
consistent with the policies of each of Trust A, Trust C and the Hub Portfolios
Trust, the protection of investors, and the general purposes of the Act.
If the Commission does not issue the Order, the Board of Trustees of Trust
A, Trust C and the Hub Portfolios Trust will take such actions as it deems
appropriate and in the best interest of the shareholders of Trust A and Trust C
and the interest holders of the Hub Portfolios Trust, including consideration of
other options, such as restructuring the proposed Reorganization, eliminating
the Hub and Spoke structure by other means, implementing additional strategies
to take advantage of the Hub and Spoke structure, or maintaining the current Hub
and Spoke structure. The Reorganization as proposed will not be consummated if
the Commission does not issue the requested Order.
For a listing of persons and entities owning beneficially or of record 5%
or more of the shares of each Class C Fund outstanding and entitled to vote at
the Special Meeting, see the section of this Proxy Statement/ Prospectus
captioned "Miscellaneous -- Principal Shareholders."
RECOMMENDATION OF BOARD OF TRUSTEES
THE BOARD OF TRUSTEES OF TRUST C UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF EACH TRUST C FUND VOTE "FOR" APPROVAL OF THE PLAN. In doing so,
the Trustees have acted in what they believe to be the best interests of the
shareholders of each Trust C Fund, and have determined that the interests of the
existing shareholders of each Trust C Fund will not be diluted as a result of
the proposed Reorganization.
4
<PAGE> 13
PRO FORMA EXPENSE INFORMATION
The following tables provide: (1)(a) a summary of expenses relating to
purchases and sales of shares of each Trust C Fund, and the aggregate annual
operating expenses for each Trust C Fund and the corresponding Hub Portfolio, as
a percentage of average net assets of each Trust C Fund, and (b) the pro forma
comparison of expenses estimated with respect to purchases and sales of the
Class C shares of each Trust A Fund, and the annual operating expenses of each
Trust A Fund allocated to the Class C shares, as a percentage of average net
assets allocated to the Class C shares; (2)(a) an example illustrating the
dollar cost of such expenses on a $1,000 investment in each Trust C Fund; and
(b) a pro forma comparison of the example illustrating the dollar cost of the
pro forma estimated expenses of the Class C shares of the corresponding Trust A
Fund. Shares of each Trust C Fund are sold, and Class C shares of each Trust A
Fund will be sold, without an initial sales charge.
<TABLE>
<CAPTION> TRUST C CLASS C TRUST C CLASS C TRUST C CLASS C
SHAREHOLDER VALUE VALUE EMERGING EMERGING INTERNATIONAL INTERNATIONAL
TRANSACTION PLUS PLUS GROWTH GROWTH EQUITY EQUITY
EXPENSES FUND* FUND* FUND FUND FUND FUND
- ----------- ----- ----- -------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge(1)......... None None None None None None
Annual Fund Operating Expenses
(as a percentage of average
daily net assets)
Advisory Fee.................... 0.75% 0.75% 0.80% 0.80% 0.95% 0.95%
Rule 12b-1 Fees................. 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses(2) (before waiver
or reimbursement)............. 1.85% 1.14% 4.91% 3.15% 3.63% 2.63%
---- ---- ------ ---- ---- ----
Total Operating Expenses(2)
(before waiver or
reimbursement)................ 3.60% 2.89% 6.71% 4.95% 5.58% 4.58%
==== ==== ====== ==== ==== ====
</TABLE>
<TABLE>
<CAPTION> TRUST C CLASS C TRUST C CLASS C
SHAREHOLDER GROWTH & GROWTH & TRUST C CLASS C INCOME INCOME TRUST C CLASS C
TRANSACTION INCOME INCOME BALANCED BALANCED OPPORTUNITY OPPORTUNITY BOND BOND
EXPENSES FUND FUND FUND FUND FUND FUND FUND FUND
- ----------- -------- -------- -------- -------- ----------- ----------- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge(1)......... None None None None None None None None
Annual Fund Operating Expenses
(as a percentage of average
daily net assets)
Advisory Fee.................... 0.80% 0.80% 0.80% 0.80% 0.65% 0.65% 0.55% 0.55%
Rule 12b-1 Fees................. 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses(2) (before waiver
or reimbursement)............. 5.89% 1.40% 4.37% 3.62% 3.73% 2.43% 11.00% 1.49%
---- ---- ---- ---- ---- ---- ----- ----
Total Operating Expenses(2)
(before waiver or
reimbursement)................ 7.64% 3.20% 6.17% 5.42% 5.38% 4.08% 12.55% 3.04%
==== ==== ==== ==== ==== ==== ===== ====
</TABLE>
- ---------------
* Expenses for the Touchstone Value Plus Fund of Trust C and the corresponding
Hub Portfolio and for the Class C shares of the Value Plus Fund of Trust A
are expressed as a percentage of such Fund's projected average daily net
assets and are based on estimates of expenses to be incurred during the
fiscal year ending December 31, 1998.
(1) A contingent deferred sales charge of 1.00% will be assessed on shares
redeemed within one year of purchase.
5
<PAGE> 14
]
(2) The "Total Operating Expenses" charged to each Trust C Fund and the
corresponding Hub Portfolio or Class C shares of each Trust A Fund were
capped by the Advisor and did not exceed the percentages listed below.
In order to make the "Other Expenses" and the "Total Operating Expenses" in
the above table comparable between each Trust C Fund and the Class C shares
of each Trust A Fund, the hub's waiver has been included in both amounts.
Expense Caps
Touchstone Advisors has agreed to waive or reimburse certain of the
Operating Expenses of each Trust C Fund and the corresponding Portfolio and
Class C shares of each Trust A Fund (as used herein, "Operating Expenses"
includes amortization of organizational expenses but is exclusive of interest,
taxes, brokerage commissions and other portfolio transaction expenses, capital
expenditures and extraordinary expenses) such that, after such waivers or
reimbursements, the aggregate Operating Expenses of each Trust C Fund and the
corresponding Portfolio or Class C shares of each Trust A Fund will not exceed
on an annual basis the "Total Operating Expenses" listed below (the "Expense
Caps"). The Sponsor Agreement may be terminated by the Sponsor at the end of any
calendar quarter, or by Trust A or Trust C on not less than 30 days' prior
written notice. Touchstone Advisors has advised Trust A and Trust C that it will
waive or reimburse expenses under the Sponsor Agreement through December 31,
1999.
While such waivers or reimbursements continue, a reduction of each Trust A
Fund's expenses will benefit Touchstone Advisors to the extent that it reduces
the amount that must be waived or reimbursed. See "Interests of Certain Persons
in the Reorganization."
For the fiscal year ended December 31, 1997, with the Expense Caps, "Other
Expenses" and "Total Operating Expenses" of each Trust C Fund and its
corresponding Portfolio were the following respective percentages of the Fund's
average daily net assets: Emerging Growth Fund, 0.45%, 2.25%; International
Equity Fund, 0.40%, 2.35%; Growth & Income Fund, 0.25%, 2.05%; Balanced Fund,
0.30%, 2.10%; Income Opportunity Fund, 0.30%, 1.95%; and Bond Fund, 0.10%,
1.65%. For the Value Plus Fund and the corresponding Portfolio for the year
ending December 31, 1998, with the Expense Caps, "Other Expenses" and "Total
Operating Expenses" will be 0.30% and 2.05%, respectively, of the Fund's
projected average daily net assets.
Example. You would pay the following expenses on a $10,000 investment,
assuming (1) 5% annual return; (2) the total operating expense ratio included
in the table above; and (3) redemption at the end of each time period:
<TABLE>
<CAPTION> TRUST C CLASS C TRUST C CLASS C TRUST C CLASS C
SHAREHOLDER VALUE VALUE EMERGING EMERGING INTERNATIONAL INTERNATIONAL
TRANSACTIONS PLUS PLUS GROWTH GROWTH EQUITY EQUITY
EXPENSES FUND FUND FUND FUND FUND FUND
- ------------ ------ ------ -------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1 Year.................. $ 363 $ 292 $ 665 $ 495 $ 556 $ 459
3 Years................. $1,103 $ 895 $1,962 $1,486 $1,659 $1,383
5 Years................. $1,864 $1,523 $3,214 $2,478 $2,750 $2,314
10 Years................ $3,862 $3,214 $6,163 $4,962 $5,421 $4,677
</TABLE>
<TABLE>
<CAPTION> TRUST C CLASS C TRUST C CLASS C
SHAREHOLDER GROWTH & GROWTH & TRUST C CLASS C INCOME INCOME TRUST C CLASS C
TRANSACTIONS INCOME INCOME BALANCED BALANCED OPPORTUNITY OPPORTUNITY BOND BOND
EXPENSES FUND FUND FUND FUND FUND FUND FUND FUND
- ------------ -------- -------- -------- -------- ----------- ----------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Year.................. $ 754 $ 323 $ 613 $ 541 $ 537 $ 410 $1,208 $ 307
3 Years................. $2,203 $ 986 $1,819 $1,616 $1,605 $1,241 $3,356 $ 939
5 Years................. $3,576 $1,674 $2,996 $2,682 $2,665 $2,087 $5,193 $1,596
10 Years................ $6,704 $3,503 $5,821 $5,308 $5,279 $4,273 $8,700 $3,355
</TABLE>
The purpose of this table is to assist a shareholder in understanding the
various costs and expenses that a shareholder in a Trust C Fund or Class C
shares of a Trust A Fund will bear directly or indirectly. This example should
not be considered to be a representation of past or future expenses; actual
expenses may be
6
<PAGE> 15
greater or less than those shown. Moreover, although the table assumes a 5%
annual return, a Fund's actual performance will vary and may result in an actual
return greater or less than 5%. Because each Fund makes payments under a
distribution and services plan in accordance with Rule 12b-1, a shareholder who
holds shares of a Fund for an extended period of time may pay a combination of
sales load and 12b-1 fees in excess of the economic equivalent of the maximum
front-end sales charge permitted by the National Association of Securities
Dealers, Inc.
7
<PAGE> 16
SUMMARY
The following is a summary of certain information contained elsewhere in
this Proxy Statement/ Prospectus, the Trust C Prospectus incorporated by
reference herein and the Trust A Prospectus incorporated herein and being
delivered herewith. This summary is not intended to be complete and is qualified
in all respects by reference to the more detailed information appearing
elsewhere in this Proxy Statement/ Prospectus, the Trust C Funds' Prospectus and
the Trust A Funds' Prospectus.
INTRODUCTION
Each Trust A Fund and each Trust C Fund currently constitute spokes of a
Hub and Spoke(R) mutual fund complex with respect to which the corresponding Hub
Portfolio functions as the Hub. In this structure, each Trust A Fund and each
Trust C Fund invest all of their investable assets in the corresponding Hub
Portfolio, where such assets are managed collectively under the common
investment objective of such Trust A Fund and Trust C Fund. This structure
requires the maintenance of three separate registered investment companies,
which results in duplicate costs and expenses to shareholders.
The Board of Trustees of Trust C originally anticipated that the Hub &
Spoke(R) structure would permit additional spokes to be added to the complex,
and that the asset growth attributable to the addition of such spokes would
spread the fixed costs of the complex over a broader base of assets and would
ultimately result in a reduced expense ratio to shareholders of each Trust C
Fund. However, no new spokes have been added, and the Board of Trustees believes
that the addition of new spokes in the future is unlikely and any anticipated
benefits related to the Hub and Spoke(R) structure are not likely to
materialize.
The Board of Trustees believes that certain duplicate expenses could be
eliminated and efficiencies could be gained if this Hub and Spoke(R) structure
were collapsed into a single mutual fund, multi-class structure within Trust A,
including a class of shares designated as Class C which would have
characteristics substantially similar to shares of the Trust C Funds, and a
class of shares designated as Class A which would be identical (except in name)
to the presently-designated, single class of shares of each Trust A Fund. Trust
A would also include a class of shares designated as Class Y which would be
offered to institutional investors. There may also be additional Classes of
shares.
The proposed Reorganization consists of a series of steps and procedures
which ultimately will result in all of the investable assets of each Hub
Portfolio being transferred to the corresponding Trust A Fund (subject to their
liabilities), all of the presently outstanding shares of the Trust C Funds being
converted into an equal number of the corresponding Trust A Fund's
newly-designated Class C shares, and all of the presently outstanding shares of
each Trust A Fund being redesignated (but otherwise being unaffected) as each
Trust A Fund's Class A shares. The Hub Portfolios Trust and Trust C would then
be dissolved.
PROPOSED REORGANIZATION
The Plan is a contract between Trust A (on behalf of each Trust A Fund) and
Trust C (on behalf of each Trust C Fund) which describes the essential terms of
the proposed Reorganization. Immediately prior to consummation of the Plan, each
of the Trust C Funds and Trust A Funds would withdraw from the Hub Portfolios
their respective assets, subject to their liabilities. The Plan provides that
each Trust A Fund would then acquire all of the assets, subject to the
liabilities, of the corresponding Trust C Fund, in exchange for such Trust A
Fund's Class C shares. The number of a Trust A Fund's Class C shares to be
issued in the exchange would be equal to the number of shares of each Trust C
Fund outstanding at the close of business on the date of consummation of the
Reorganization or, if such date is not a business day, then at the close of
business on the last business day preceding such closing date (the "Effective
Time"). Each Trust A Fund's Class C shares so issued immediately would be
distributed pro rata to shareholders of each Trust C Fund. As a result, each
shareholder of each Trust C Fund would receive in exchange for such
shareholder's shares of such Trust C Fund an equal number of the corresponding
Trust A Fund's Class C shares. Following the acquisition of each Trust C Fund's
assets by the corresponding Trust A Fund and the distribution to its
shareholders of the corresponding Trust A Fund's Class C shares, Trust C would
be dissolved.
8
<PAGE> 17
Following the Reorganization, the Advisor and relevant Portfolio Advisor(s)
would continue to manage the assets transferred to each Trust A Fund under the
same investment objective as that under which the Advisor and relevant Portfolio
Advisor(s) presently manage the assets of each Trust C Fund and each Trust A
Fund invested in the Hub Portfolios. Additionally, pursuant to an operating plan
adopted by the Board of Trustees of Trust A, income earned on such investments
and operating expenses of each Trust A Fund would be allocated between the
Classes of shares in substantially the same manner as income and expenses
presently are allocated between each Trust C Fund and each Trust A Fund.
COMPARISON OF SHARES OF TRUST C FUNDS TO CLASS C SHARES OF TRUST A FUNDS
Investment Objective and Policies. The investment objectives, investment
program and policies and investment limitations under which the assets of each
Trust C Fund presently are managed would not be affected by the proposed
Reorganization, except that, rather than investing all of its investable assets
in the corresponding Hub Portfolio to be commingled and commonly managed with
the assets of other spokes, each Trust A Fund would attempt to achieve its
investment objective by engaging an investment adviser to directly manage its
assets.
Investment Management. The investable assets of each Trust C Fund
presently are invested in the corresponding Hub Portfolio where they are managed
by the Advisor and Portfolio Advisors collectively with the investable assets of
the corresponding Trust A Fund. Following the Reorganization, the Advisor and
Portfolio Advisors would continue to serve as investment advisers with respect
to the assets of each Trust C Fund to be transferred to the corresponding Trust
A Funds pursuant to new investment advisory and investment sub-advisory
agreements to be entered into by Trust A, on behalf of each Trust A Fund. The
new investment advisory and investment sub-advisory agreements would have terms
and conditions, including advisory fees provided thereunder, substantively
identical to the terms and conditions of the current investment advisory and
investment sub-advisory agreements.
Administrative Services. Investors Bank presently serves as Administrator
and Fund Accounting Agent for each Trust C Fund and each Trust A Fund, and also
serves as Administrator, Fund Accounting Agent, Custodian, Transfer Agent and
Dividend Paying Agent for the Hub Portfolios. State Street Bank and Trust
Company presently serves as Transfer Agent and Dividend Paying Agent for each
Trust C Fund and each Trust A Fund. It is anticipated that, following the
Reorganization, Investors Bank would continue to serve as Administrator and Fund
Accounting Agent and that State Street Bank and Trust Company would continue to
act as Transfer Agent and Dividend Paying Agent, with respect to each Class of
each Trust A Fund.
It is anticipated that the fees to be paid by Trust A for the services
described in the preceding paragraph would be the same or lower than the
aggregate amount currently being paid with respect to Trust A, Trust C and the
Hub Portfolios.
Purchases and Redemptions. Following the Reorganization, investors
(including current shareholders of each Trust C Fund who receive Class C shares
of each Trust A Fund in the Reorganization) would be able to purchase and redeem
shares in substantially the same manner and subject to the same conditions as
shares of each Trust C Fund presently are purchased and redeemed. For a summary
of the procedures and conditions applicable to purchases and redemptions of
shares of each Trust A Fund, see the Trust A Funds' Prospectus that accompanies
this Proxy Statement/Prospectus.
Capital Structure. Class C shares of each Trust A Fund will represent a
class of a multi-class series of shares separately designated within the shares
of beneficial interest of a Massachusetts business trust. Shares of each Trust C
Fund represent shares of a separately designated series of a Massachusetts
business trust. This distinction, together with the elimination of the
two-tiered Hub and Spoke(R) structure, results in very minor differences in
voting rights and other rights and privileges between Class C shares of each
Trust A Fund and shares of each Trust C Fund. These differences are described in
more detail in the section of this Proxy Statement/Prospectus captioned "The
Proposed Reorganization -- Description of Class C Shares of each Trust A Fund."
9
<PAGE> 18
TAX CONSEQUENCES
It is a condition to the consummation of the transactions described in the
Plan that each of Trust C and Trust A must have obtained an opinion of Frost &
Jacobs LLP, legal counsel to Trust C and Trust A, to the effect that the
Reorganization will constitute a tax-free reorganization pursuant to Section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended (the "Code").
Accordingly, no gain or loss will be recognized by any Trust C Fund, any Trust A
Fund or their respective shareholders. See "The Proposed Reorganization -- Tax
Considerations."
RISK FACTORS
Investment in Class C shares of each Trust A Fund involves certain risks,
which are the same as risks associated with shareholders current investment in
shares of each Trust C Fund. See the Trust C Funds' Prospectus or the Trust A
Funds' Prospectus for a description of various risks associated with the
investment strategies of each Trust C Fund and each Trust A Fund.
THE PROPOSED REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
The terms and conditions under which the proposed Reorganization would be
consummated are set forth in the Plan. Significant provisions of the Plan are
summarized below; however, this summary is qualified in its entirety by
reference to the Plan, a copy of which is attached as Appendix A to this Proxy
Statement/Prospectus. Unless otherwise defined herein, defined terms used in
this section shall have the meaning assigned in the Plan.
Immediately prior to consummation of the Plan, each Trust C Fund and each
Trust A Fund would withdraw their respective investable assets, subject to their
liabilities, from the corresponding Hub Portfolio. The Plan contemplates that
shares of the presently-designated single class of shares of each Trust A Fund
outstanding immediately prior to the Reorganization automatically would be
redesignated (but otherwise unaffected) as Class A shares of each such Trust A
Fund as of the Effective Time of the Reorganization.
The Plan further contemplates that each Trust C Fund concurrently would
transfer all of its assets, subject to its liabilities, to the corresponding
Trust A Fund in exchange solely for newly-designated Class C shares of such
Trust A Fund. The Class C shares of such Trust A Fund would be deemed to be
distributed immediately on a pro rata basis to the shareholders of the
corresponding Trust C Fund. It is presently anticipated that the Effective Time
of the Reorganization will be the close of business on December 31, 1998 (the
last business day of 1998), provided all conditions of the Plan are fulfilled or
waived. The date of the Effective Time may be extended to a later date by the
Board of Trustees of Trust C and/or the Board of Trustees of Trust A.
The assets of each Trust C Fund to be acquired by each Trust A Fund would
include all property, including without limitation, all cash, cash equivalents,
securities, commodities and futures interests, receivables (including interest
or dividends receivable), any claims or rights of action or rights to register
shares under applicable securities laws, and other property owned by each Trust
C Fund and any deferred or prepaid expenses shown as an asset on the books of
each Trust C Fund at the Effective Time, all of which are consistent with the
investment limitations of the corresponding Trust A Fund. Each Trust A Fund
would assume from each Trust C Fund all liabilities, expenses, costs, charges
and reserves of the corresponding Trust C Fund of whatever kind or nature,
provided that each Trust C Fund utilizes its best efforts to discharge all of
its known debts, liabilities, obligations and duties prior to the Effective
Time. In exchange for all of the assets and liabilities of each Trust C Fund,
the corresponding Trust A Fund would deliver to shareholders of each Trust C
Fund Class C shares. The assets and liabilities of each Trust C Fund so
transferred to and assumed by the corresponding Trust A Fund would be allocated
to the Class C shares of each Trust A Fund issued to shareholders of each Trust
C Fund in exchange for their shares of each Trust C Fund.
10
<PAGE> 19
The value of each Trust C Fund's assets and liabilities to be acquired by
the corresponding Trust A Fund would be determined as of the Effective Time in
accordance with the policies and procedures set forth in the Trust A Fund's
Prospectus. The number of Class C shares of each Trust A Fund to be issued in
exchange for the net assets of each Trust C Fund would be equal to the number of
shares of each Trust C Fund outstanding as of the Effective Time. Accordingly,
shares of each Trust C Fund held immediately prior to the Effective Time would
be converted into an equal number of Class C shares of the corresponding Trust A
Fund.
As soon as practicable after the Closing Date, each Trust C Fund would
liquidate and distribute pro rata to its shareholders of record the Class C
shares of the corresponding Trust A Fund received by such Trust C Fund. Such
liquidation and distribution would be accomplished by opening accounts on the
books of Trust A in the names of shareholders of each Trust C Fund and by
transferring the Class C shares of each Trust A Fund credited to the account of
each Trust C Fund on the books of Trust A. Each account opened would represent
the number of Class C shares of the corresponding Trust A Fund equal to the
number of shares of each Trust C Fund held by such shareholder as of the
Effective Time. Fractional Class C shares of each Trust A Fund would be rounded
to the nearest thousandth of a share.
Any transfer taxes payable upon issuance of the Class C shares of each
Trust A Fund in a name other than the name of the registered holder of the
shares on the books of each Trust C Fund as of that time must be paid by the
person to whom such shares are to be issued as a condition of such transfer. Any
reporting responsibility of Trust C with respect to each Trust C Fund would
continue to be the responsibility of Trust C up to and including the Effective
Time and such later date on which each Trust C Fund is liquidated and Trust C is
dissolved.
Conditions to the closing of the Reorganization include a condition that
each of Trust C and Trust A must receive an opinion from Frost & Jacobs LLP
regarding certain tax aspects of the Reorganization. See "The Proposed
Reorganization -- Tax Considerations." Also, Trust C and Trust A have requested
that the Office of the Chief Counsel of the Commission's Division of Investment
Management respond in writing with interpretive guidance regarding certain
technical and legal issues that the Reorganization potentially raises under the
provisions of the 1940 Act and the Rules promulgated thereunder. If the staff of
the SEC has not responded favorably to that request the closing of the
Reorganization may be postponed until such time as Trust C and Trust A receive a
favorable response or the issues are otherwise resolved to the mutual
satisfaction of Trust A and Trust C.
The Plan may be terminated and the Reorganization abandoned at any time,
before or after approval by the shareholders of each Trust C Fund, prior to the
Closing Date. In addition, the Plan may be amended in any mutually agreeable
manner, except that no amendment may be made subsequent to the Special Meeting
which would detrimentally affect the value of the Class C shares of each Trust A
Fund to be distributed.
The costs of the Reorganization, including legal, accounting and other
professional fees and the cost of soliciting proxies for the Special Meeting
(consisting principally of printing and mailing expenses), together with the
cost of any supplementary solicitation, will be borne by the Advisor and/or its
affiliates. The total estimated costs for the proposed Reorganization are
approximately $182,000.
REASONS FOR THE PROPOSED REORGANIZATION
The Board of Trustees of Trust C, including all of the non-interested
Trustees, has unanimously determined that the interests of the existing
shareholders of each Trust C Fund will not be diluted as a result of the
proposed transaction, and that the proposed transaction is in the best interests
of each Trust C Fund.
The Board of Trustees based its decision to recommend the Reorganization on
an inquiry into a number of factors, including the following:
1. The identity of the objectives, policies and restrictions of each
Trust A Fund with those of the corresponding Trust C Fund;
2. The cost savings that potentially may be achieved by collapsing
the Hub and Spoke(R) structure into a single, multi-class mutual fund
structure through the elimination of duplicate expenses;
11
<PAGE> 20
3. The reduced expense ratio that potentially may result from the
Reorganization;
4. The likelihood that a simplified structure would be more
attractive to prospective investors, and the greater likelihood of asset
growth as a result of such more attractive structure;
5. The tax-free nature of the Reorganization; and
6. Alternative options to the Reorganization.
There are certain duplicate costs associated with maintaining the Hub and
Spoke(R) structure, which requires maintaining three separate investment
companies. Among others, these include SEC and state registration fees
associated with three separate entities, franchise and qualification fees
associated with three separate business entities, three separate audit fees, and
legal costs associated with maintaining three separate business entities. In
addition, the Board of Trustees believes that a simplified multi-class structure
will make investment in each Trust A Fund's Class A and Class C shares more
attractive to investors, and will increase the opportunity of future asset
growth. Any such asset growth potentially will enable the shareholders of Trust
A (including those that were formerly shareholders of each Trust C Fund) to
obtain economies of scale by spreading certain expenses over a larger asset base
and by potentially reaching asset breakpoints in the rate of investment advisory
or other fees. There can be no assurance, however, that such asset growth,
economies of scale or a lower overall expense ratio will be attained.
DESCRIPTION OF SHARES OF CLASS C SHARES OF EACH TRUST A FUND
For a description of shares of each Trust C Fund, refer to the Trust C
Funds' Prospectus.
Trust A consists of an unlimited number of shares of beneficial interest,
par value $0.001 per share. The shares of Trust A presently are divided into
eight series, including the Trust A Funds. Presently, each Trust A Fund consists
of a single class of shares. However, Trust A's Board of Trustees has adopted
resolutions and a related operating plan that, effective at the Effective Time,
will: (a) redesignate (without affecting the rights and privileges) shares of
each Trust A Fund (including each share outstanding as of the Effective Time) as
Class A shares; and (b) designate a new Class of shares of each Trust A Fund as
Class C shares. The Board of Trustees of Trust A may authorize the issuance of
additional series of shares (funds), and/or additional classes within any such
series.
Each share of each series of Trust A (including each share of each Class of
each Trust A Fund) is entitled to one vote on each matter presented to
shareholders of that series. For matters that affect all Classes of a Trust A
Fund's shares similarly (such as election of trustees or ratification of
accountants), holders of the separate Classes of shares will vote together. On
matters that affect the rights and privileges appertaining to the shares of one
Class differently from the rights and privileges appertaining to another Class,
the shareholders of each Class will vote separately and, in order to be approved
with respect to the affected Class, the requisite approval must be obtained from
the holders of shares within that Class. Shares have no preemptive, subscription
or conversion rights and are freely transferable. Shares can be issued as full
shares or fractions of shares. A fraction of a share has the same kind of rights
and privileges within the Class as full shares in that Class. Shares do not have
cumulative voting rights.
Each share of each Trust A Fund (including all Classes) is entitled to
participate pro rata in any dividends or other distributions declared by the
Board of Trust A with respect to that Trust A Fund, and all shares of a Trust A
Fund have equal rights in the event of a liquidation of such Trust A Fund.
Shares of all Classes of each Trust A Fund are redeemable at net asset value, at
the option of the shareholder. Income realized and expenses incurred by a Trust
A Fund will be allocated equally among such Trust A Fund's outstanding shares,
without regard to Class, except where an expense item is unique to a particular
Class. For example, Class C shares will be assessed a higher distribution fee
under Trust A's Rule 12b-1 Distribution Plan, than will Class A shares.
Class C shares of each Trust A Fund will bear a proportionate share of
payments made under a distribution and service plan, and will carry a contingent
deferred sales charge of 1.00% applicable to
12
<PAGE> 21
redemptions of shares made within one year after the date of their purchase, all
in the same manner as is currently the case with regard to shares of each Trust
C Fund.
As a Massachusetts business trust organized on March 11, 1994, Trust A is
not required to hold annual shareholder meetings unless required by law or
deemed appropriate by the Board of Trustees. However, special meetings may be
called for purposes such as electing or removing Trustees, changing fundamental
investment policies or approving an investment advisory contract. On matters
affecting an individual series (including each Trust A Fund), such as approval
of advisory or sub-advisory contracts and changes in fundamental investment
policies of that series, a separate vote of the shares of that series is
required. Shares of a series are not entitled to vote on any matter not
affecting that series. All shares of each series vote together in the election
of Trustees.
TAX CONSIDERATIONS
It is a condition to the consummation of the Reorganization that each of
Trust C and Trust A must receive an opinion from Frost & Jacobs LLP, counsel to
Trust C and Trust A, to the effect that, with respect to the Reorganization as
it affects each Trust C Fund or each Trust A Fund, as the case may be: (i) the
Reorganization will constitute a reorganization within the meaning of Section
368(a)(1)(C) of the Code; (ii) no gain or loss will be recognized by any of the
Trust C Funds or Trust A Funds upon the transfer of assets of each Trust C Fund
in exchange for Class C shares of the corresponding Trust A Fund; (iii) no gain
or loss will be recognized by shareholders of any Trust C Fund upon liquidation
of such Trust C Fund and the distribution of Class C shares of the corresponding
Trust A Fund constructively in exchange for shares of each Trust C Fund; (iv)
each Trust A Fund's basis in the assets of the corresponding Trust C Fund
received pursuant to the Reorganization will be the same as the basis of those
assets in the hands of the Trust C Fund immediately prior to the exchange, and
the holding period of those assets in the hands of the Trust A Fund will include
the holding period of each Trust C Fund; (v) the basis of Class C shares of a
Trust A Fund received by each shareholder of the corresponding Trust C Fund
pursuant to the Reorganization will be the same as the shareholder's basis in
shares of the Trust C Fund held by such shareholder immediately prior to the
exchange; and (vi) the holding period of Class C shares of each Trust A Fund
received by each shareholder of the corresponding Trust C Fund pursuant to the
Reorganization will include the shareholder's holding period of shares of the
Trust C Fund held immediately prior to the exchange, provided that the latter
shares were held as capital assets on the date of the Reorganization.
Nor will the withdrawal by Trust A or Trust C of their respective assets
from the Hub Portfolios result in any adverse tax consequences to any Trust C
Fund or its shareholders.
13
<PAGE> 22
CAPITALIZATION
The following tables shows the capitalization of each Trust C Fund as of
June 30, 1998, and the pro forma capitalization attributable to Class C shares
of each Trust A Fund as of that date, giving effect to the Reorganization.
<TABLE>
<CAPTION>
TRUST C CLASS C TRUST C CLASS C TRUST C CLASS C
VALUE VALUE EMERGING EMERGING INTERNATIONAL INTERNATIONAL
PLUS PLUS GROWTH GROWTH EQUITY EQUITY
FUND FUND FUND FUND FUND FUND
------- ------- -------- -------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net Assets (in thousands)... $ 247 $ 247 $3,283 $3,283 $5,338 $5,338
Net Asset Value Per Share... $9.85 $9.85 $14.79 $14.79 $13.82 $13.82
Shares Outstanding (in
thousands)................ 25 25 222 222 386 386
</TABLE>
<TABLE>
<CAPTION>
TRUST C CLASS C TRUST C CLASS C
GROWTH & GROWTH & TRUST C CLASS C INCOME INCOME TRUST C CLASS C
INCOME INCOME BALANCED BALANCED OPPORTUNITY OPPORTUNITY BOND BOND
FUND FUND FUND FUND FUND FUND FUND FUND
-------- -------- -------- -------- ----------- ----------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Assets (in thousands)... $2,669 $2,669 $3,331 $3,331 $4,435 $4,435 $ 979 $ 979
Net Asset Value Per Share... $15.72 $15.72 $12.91 $12.91 $ 9.23 $ 9.23 $10.17 $10.17
Shares Outstanding (in
thousands)................ 170 170 258 258 480 480 96 96
</TABLE>
MISCELLANEOUS
PRINCIPAL SHAREHOLDERS
As of the Record Date, the following shareholders owned of record or, to
the knowledge of management, beneficially owned more than 5% of the outstanding
shares of each Trust C Fund:
<TABLE>
<CAPTION>
FUND NAME SHAREHOLDER % OWNERSHIP
- --------- ----------- -----------
<S> <C> <C>
Emerging Growth Fund Western Southern Life Assurance 54.73%
Company Attn: W/S Treasury
400 Broadway
Cincinnati, OH 45202-3341
International Equity Fund Western Southern Life Assurance 68.14%
Company Attn: W/S Treasury
400 Broadway
Cincinnati, OH 45202-3341
Income Opportunity Fund Western Southern Life Assurance 34.07%
Company Attn: W/S Treasury
400 Broadway
Cincinnati, OH 45202-3341
Value Plus Fund Western and Southern Life 97.57%
Insurance Company Attn:
Marianne Marshall
400 Broadway
Cincinnati, OH 45202-3312
Growth & Income Fund Western Southern Life Assurance 7.41%
Company Attn: W/S Treasury
400 Broadway
Cincinnati, OH 45202-3341
Balanced Fund Western Southern Life Assurance 51.60%
Company Attn: W/S Treasury
400 Broadway
Cincinnati, OH 45202-3341
Bond Fund Western Southern Life Assurance 11.10%
Company Attn: W/S Treasury
400 Broadway
Cincinnati, OH 45202-3341
John C. Munn, Jr. 17.64%
1928 Windmere Drive
Monroe, N.C. 28110-8426
</TABLE>
After the Reorganization, these shareholders will own a percentage of the
Class C Shares of the corresponding Trust A Fund equal to the percentage of the
Trust C Fund shares owned by such shareholder immediately prior to the
Reorganization.
To the knowledge of management, no other person owns of record or
beneficially 5% or more of the outstanding securities of any Trust C Fund as of
the Record Date. The Trustees and officers of Trust C as a group owned less than
1% of the outstanding securities of each Trust C Fund as of the Record Date.
INTERESTS OF EXPERTS AND COUNSEL
No expert or counsel named herein has a substantial interest in Trust C,
Trust A, any Trust C Fund or any Trust A Fund, nor does any such expert or
counsel have any substantial interest in the Reorganization or any other
transaction described in this Proxy Statement/Prospectus.
COSTS OF SOLICITATION
In addition to this solicitation of proxies by use of the mails, proxies
may be solicited by officers of Trust C and by officers and employees of the
Advisor or its affiliates, personally or by telephone, without special
compensation. They might be calling you during the solicitation process to
answer your questions or concerns about the voting process and to assist
you with your vote.
14
<PAGE> 23
The cost of preparing and mailing proxy materials, of the Special Meeting,
and of soliciting proxies will be borne by the Advisor and/or its affiliates as
described under the section of this Proxy Statement/Prospectus captioned "The
Proposed Reorganization -- Plan of Reorganization and Liquidation."
SHAREHOLDER MEETINGS
Shareholders who wish to present a proposal for action at the next meeting
or suggestions as to nominees for the Board of Trustees should submit the
proposal or suggestions to Trust C.
SHAREHOLDER INQUIRIES
In addition to the Class C shares, each Trust A Fund also will offer shares
of its Class A shares to the public. Class A shares of each Trust A Fund will
have a different distribution system and expense structure than Class C shares,
and accordingly performance of the Class A shares will vary from that of the
Class C shares. Holders of Class C shares of a Trust A Fund who would like to
obtain information regarding Class A shares, or who have any other questions or
inquiries regarding their investment, should direct their questions and
inquiries to Trust A.
15
<PAGE> 24
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
This Agreement and Plan of Reorganization and Liquidation (the "Plan") is
made as of this 17th day of September, 1998, by and between Select Advisors
Trust A ("Trust A") on behalf of the seven of its eight separate portfolios
which are the subject of this Plan and are set forth below (hereinafter,
collectively the "Acquiring Funds" or individually an "Acquiring Fund"), and
Select Advisors Trust C ("Trust C") on behalf of all seven of its separate
portfolios, all of which are the subject of this Plan and are set forth below
(hereinafter, collectively the "Acquired Funds" or individually an "Acquired
Fund").
This Plan governs the proposed issuance of shares of each Acquiring Fund in
exchange for all of the assets and liabilities of the specific Acquired Fund set
forth opposite the name of that Acquiring Fund in the table below.
<TABLE>
<CAPTION>
ACQUIRING FUNDS OF TRUST A ACQUIRED FUNDS OF TRUST C
-------------------------- -------------------------
<S> <C>
Touchstone Emerging Growth Fund A Touchstone Emerging Growth Fund C
Touchstone International Equity Fund A Touchstone International Equity Fund C
Touchstone Income Opportunity Fund A Touchstone Income Opportunity Fund C
Touchstone Value Plus Fund A Touchstone Value Plus Fund C
Touchstone Growth & Income Fund A Touchstone Growth & Income Fund C
Touchstone Balanced Fund A Touchstone Balanced Fund C
Touchstone Bond Fund A Touchstone Bond Fund C
</TABLE>
This Plan is intended to be and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1)(C) of the Internal Revenue
Code of 1986, as amended (the "Code"). A reorganization (each a
"Reorganization") will comprise the transfer of all of the assets of an Acquired
Fund to the corresponding Acquiring Fund in exchange solely for such
corresponding Acquiring Fund's Class C shares and the assumption by the
Acquiring Fund of certain liabilities of the corresponding Acquired Fund, and
the constructive distribution after the Closing Date (as hereinafter defined) of
such Class C shares to the shareholders of the corresponding Acquired Fund in
liquidation of the Acquired Fund, all upon the terms and conditions hereinafter
set forth in this Plan.
WHEREAS, Trust A and Trust C are each (a) a Massachusetts business Trust
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, and (b) registered as an open-end series
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and each Acquired Fund owns securities which generally are assets
of the character in which the corresponding Acquiring Fund is permitted to
invest; and
WHEREAS, effective as of the Closing Date, the shares of beneficial
interest of each Acquiring Fund will be divided into three separate classes,
designated as Class A shares of beneficial interest ("Class A"), Class C shares
of beneficial interest ("Class C") and Class Y shares of beneficial interest
("Class Y"); and
WHEREAS, the Board of Trustees of Trust C has determined that the exchange
of all of the assets of each Acquired Fund for Class C shares of the
corresponding Acquiring Fund and the assumption of the liabilities of such
Acquired Fund by the corresponding Acquiring Fund is in the best interests of
each Acquired Fund's Shareholders (as defined below) and that the interests of
the existing shareholders of each Acquired Fund will not be diluted as a result
of this transaction; and
WHEREAS, the execution, delivery and performance of this Plan will have
been duly authorized prior to the Closing Date by all necessary corporate action
on the part of Trust A and Trust C, respectively, and this Plan constitutes a
valid and binding obligation of each of the parties hereto enforceable in
accordance with its terms, subject to the requisite approval of the shareholders
of each Acquired Fund.
16
<PAGE> 25
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. REDESIGNATION OF PRESENTLY OUTSTANDING SHARES OF EACH ACQUIRING FUND AS
SHARES OF SUCH ACQUIRING FUND'S CLASS A SHARES
1.1 Redesignation. Effective as of the "Effective Time" (as defined in
Article 4 of this Plan), each share of each Acquiring Fund's presently
designated single class of shares then issued and outstanding automatically will
be redesignated (without otherwise affecting the rights and privileges
appertaining thereto) as a share of each Acquiring Fund's Class A shares without
any action on the part of the holder thereof, and will represent a pro rata
interest (taken together with outstanding shares of each Acquiring Fund's Class
C and Class Y shares without regard to Class) in the assets and liabilities of
each Acquiring Fund. Notwithstanding this change in designation, the rights and
privileges of outstanding shares of each Acquiring Fund's presently-designated
single class of shares will remain the same.
1.2 Transfer Agent's Records. Ownership of shares of each Acquiring
Fund's Class A shares will be shown on the books of Trust A's transfer agent.
Shares of each Acquiring Fund's Class A shares will be issued in the manner
described in the then-effective Prospectus and Statement of Additional
Information of Trust A relating to the Class A shares of each Acquiring Fund.
2. TRANSFER OF ASSETS AND LIABILITIES OF EACH ACQUIRED FUND TO THE
CORRESPONDING ACQUIRING FUND IN EXCHANGE FOR SUCH CORRESPONDING ACQUIRING
FUND'S CLASS C SHARES; LIQUIDATION OF THE ACQUIRED FUNDS
2.1 Transfer and Exchange of Assets for Shares. Subject to the requisite
approval of the shareholders of each Acquired Fund and to the other terms and
conditions set forth herein and on the basis of the representations and
warranties contained herein, each of the Touchstone Emerging Growth Fund C,
Touchstone International Equity Fund C, Touchstone Income Opportunity Fund C,
Touchstone Value Plus Fund C, Touchstone Growth & Income Fund C, Touchstone
Balanced Fund C and Touchstone Bond Fund C series of Trust C shall transfer to
each of Touchstone International Equity Fund A, Touchstone Income Opportunity
Fund A, Touchstone Value Plus Fund A, Touchstone Growth & Income Fund A,
Touchstone Balanced Fund A and Touchstone Bond Fund A series of Trust A,
respectively, and each of Touchstone Emerging Growth Fund A, Touchstone
International Equity Fund A, Touchstone Income Opportunity Fund A, Touchstone
Value Plus Fund A, Touchstone Growth & Income Fund A, Touchstone Balanced Fund A
and Touchstone Bond Fund A series of Trust A shall acquire from each of the
Touchstone Emerging Growth Fund C, Touchstone International Equity Fund C,
Touchstone Income Opportunity Fund C, Touchstone Value Plus Fund C, Touchstone
Growth & Income Fund C, Touchstone Balanced Fund C and Touchstone Bond Fund C
series of Trust C, respectively, as of the Closing Date, all of the Assets (as
hereinafter defined) (i) of the Touchstone Emerging Growth Fund C in exchange
for that number of Class C shares of Touchstone Emerging Growth Fund A
determined in accordance with paragraph 3.2 hereof, and the assumption by
Touchstone Emerging Growth Fund A of the Liabilities (as hereinafter defined) of
the Touchstone Emerging Growth Fund C, (ii) of the Touchstone International
Equity Fund C in exchange for that number of Class C shares of Touchstone
International Equity Fund A determined in accordance with paragraph 3.2 hereof,
and the assumption by Touchstone International Equity Fund A of the Liabilities
of the Touchstone International Equity Fund C, (iii) of the Touchstone Income
Opportunity Fund C in exchange for that number of Class C shares of Touchstone
Income Opportunity Fund A determined in accordance with paragraph 3.2 hereof,
and the assumption by Touchstone Income Opportunity Fund A of the Liabilities of
the Touchstone Income Opportunity Fund C, (iv) of the Touchstone Value Plus Fund
C in exchange for that number of Class C shares of Touchstone Value Plus Fund A
determined in accordance with paragraph 3.2 hereof, and the assumption by
Touchstone Value Plus Fund A of the Liabilities of the Touchstone Value Plus
Fund C, (v) of the Touchstone Growth & Income Fund C in exchange for that number
of Class C shares of Touchstone Growth & Income Fund A determined in accordance
with paragraph 3.2 hereof, and the assumption by Touchstone Growth & Income Fund
A of the Liabilities of the Touchstone Growth & Income Fund C, (vi) of the
Touchstone Balanced Fund C in exchange for that number of Class C shares of
Touchstone Balanced Fund A determined in accordance with paragraph 3.2 hereof,
and the assumption by
17
<PAGE> 26
Touchstone Balanced Fund A of the Liabilities of the Touchstone Balanced Fund C,
and (vii) of the Touchstone Bond Fund C in exchange for that number of Class C
shares of Touchstone Bond Fund A determined in accordance with paragraph 3.2
hereof, and the assumption by Touchstone Bond Fund A of the Liabilities of the
Touchstone Bond Fund C. Such transactions shall take place at the closing
provided for in Article 4 of this Plan (the "Closing").
Trust C will (i) pay or cause to be paid to Trust A any interest received
on or after the Closing Date with respect to the Assets of each Acquired Fund
and (ii) transfer to Trust A any distributions, rights, stock dividends or other
property received by Trust C after the Closing Date as distributions on or with
respect to the Assets of each Acquired Fund. Any such interest, distributions,
rights, stock dividends or other property so paid or transferred or received
directly by Trust A shall be allocated by Trust A to the account of the
Acquiring Fund that acquired the Assets to which such property relates.
2.2 Description of Assets to be Acquired. The assets of each Acquired
Fund to be acquired by each Acquiring Fund shall consist of all property,
including without limitation, all cash, cash equivalents, securities,
commodities and futures interests, receivables (including interest or dividends
receivable), any claims or rights of action or rights to register shares under
applicable securities laws, and other property owned by each Acquired Fund and
any deferred or prepaid expenses shown as an asset on the books of each Acquired
Fund at the Effective Time (the "Assets").
2.3 Liabilities to be Assumed. Each Acquiring Fund shall assume from the
corresponding Acquired Fund all liabilities, expenses, costs, charges and
reserves of such Acquired Fund of whatever kind or nature, whether absolute,
accrued, contingent or otherwise, whether or not arising in the ordinary course
of business, whether or not determinable as of the Effective Time and whether or
not specifically referred to in this Plan; provided, however, that it is
understood and agreed by the parties hereto that each Acquired Fund will utilize
its best efforts to discharge all of its known debts, liabilities, obligations
and duties prior to the Effective Time. Any such liabilities and obligations of
an Acquired Fund assumed by an Acquiring Fund shall be allocated to the shares
of such Acquiring Fund's Class C shares issued to each Acquired Fund pursuant to
this Plan.
2.4 Liquidation of Each Acquired Fund. As provided in Section 4.3 of this
Plan, as soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), Trust C will effect the termination and liquidation of each
Acquired Fund in the manner provided in its Declaration of Trust and in
accordance with applicable law. On the Closing Date, each Acquired Fund will
distribute pro rata to its shareholders of record, determined as of the close of
business on the Valuation Date (the "Acquired Fund's Shareholders"), each
Acquiring Fund's Class C shares received by such Acquired Fund pursuant to
Section 2.1 in exchange for each such shareholder's interest in each Acquired
Fund evidenced by such shareholder's shares of beneficial interest in each
Acquired Fund. Such liquidation and distribution will be accomplished by opening
accounts on the books of each Acquiring Fund in the names of each Acquired
Fund's Shareholders and transferring the shares credited to the account of each
Acquired Fund on the books of the corresponding Acquiring Fund. Each account
opened shall represent the respective pro rata number of shares of each
Acquiring Fund's Class C shares due each Acquired Fund Shareholder. Fractional
shares of each Acquiring Fund's Class C shares shall be rounded to the nearest
thousandth of one share. All issued and outstanding shares of each Acquired Fund
shall simultaneously be canceled on the books of the Acquired Fund.
2.5 No Issuance of Certificates. None of the Acquiring Funds will issue
certificates representing its Class C shares issued in connection with the
exchange described in paragraph 2.1 hereof.
2.6 Transfer Agent's Records. Ownership of each Acquiring Fund's Class C
shares will be shown on the books of Trust A's transfer agent. Each Acquiring
Fund's Class C shares will be issued in the manner described in the
then-effective Prospectus and Statement of Additional Information of Trust A
relating to the Class C shares of each Acquiring Fund.
2.7 Transfer Taxes. Any transfer taxes payable upon the issuance of
shares of each Acquiring Fund's Class C shares in a name other than the
registered holder of the shares on the books of each Acquired Fund as of the
time of issuance shall be paid by the person to whom such shares are to be
issued as a condition of such transfer.
18
<PAGE> 27
2.8 Reporting Responsibilities of each Acquired Fund. Any reporting
obligations relating to an Acquired Fund are and shall remain the responsibility
of Trust C up to and including the Closing Date and such later date on which
each Acquired Fund is liquidated and Trust C is dissolved.
2.9 Operating Plan. From and after the Closing Date, the rights and
privileges of the Class A, Class C and Class Y shares shall be determined under
the provisions of Massachusetts law, Trust A's Declaration of Trust, as amended
from time to time, Trust A's Bylaws and the operating plan adopted by Trust A's
Board of Trustees which establishes policies and procedures for allocating
income and expenses between each Acquiring Fund's Class A shares, Class C shares
and Class Y shares, which further defines the relative voting rights of the
Classes and which otherwise delineates the relative rights, privileges and
liabilities of shares of the Classes.
3. VALUATION
3.1 Net Asset Value of each Acquired Fund. The value of the net assets to
be acquired by each Acquiring Fund hereunder shall be the value of the Assets of
the corresponding Acquired Fund, less the Liabilities of such Acquired Fund, and
shall be computed at the time and in the manner set forth in Trust A's
then-current Prospectus and Statement of Additional Information on December 31,
1998 (such time and date being hereinafter called the "Valuation Date").
3.2 Exchange Ratio. The number of shares of each Acquiring Fund's Class C
shares to be issued (including fractional shares, if any) in exchange for the
Assets of each Acquired Fund and the assumption of its Liabilities shall be
equivalent to the number of shares of the Acquired Fund outstanding as of the
close of business on the Valuation Date.
3.3 Documentation. All computations of value shall be made by Investors
Bank & Trust Company, in accordance with its regular practice as pricing agent
for Trust A. In addition, Trust C shall furnish to Trust A within 60 days of the
Closing Date a statement of each Acquired Fund's assets and liabilities as of
the Effective Time, which statement shall be prepared in accordance with
generally accepted accounting principles consistently applied and shall be
certified by the Treasurer of Trust C. In addition, Trust C shall supply to
Trust A, in such form as is reasonably satisfactory to Trust A, a statement of
earnings and profits of each Acquired Fund for federal income tax purposes which
may be carried over to each Acquiring Fund's Class C shares as a result of
Section 381 of the Code. This statement shall be provided within 180 days of the
Closing Date.
4. CLOSING AND CLOSING DATE
4.1 Establishment of Closing Date; Description of Closing. The "Closing
Date" shall be the next full business day following the Valuation Date (December
31, 1998), or such later date as the parties may agree in writing. All acts
taking place at the Closing shall be deemed to take place simultaneously as of
the close of business on the last business day immediately preceding the Closing
(the "Effective Time"), unless otherwise provided. The Closing shall be held on
the Closing Date at 9:00 a.m., Central Time, at the principal offices of Frost &
Jacobs LLP, or such other time and/or place as the parties may agree.
4.2 Deliveries by Transfer Agent. Investors Bank & Trust Company, as
custodian for Trust C and for each portfolio of Select Advisors Portfolios,
shall deliver at the Closing a certificate of an authorized officer stating
that: (a) each Acquired Fund's portfolio securities, cash and any other assets
shall have been delivered in proper form to Trust A on the Closing Date; and (b)
all necessary taxes, including all applicable federal and state stock transfer
stamps, if any, shall have been paid, or provision for payment shall have been
made, in connection with the delivery of portfolio securities.
4.3 Closing of New York Stock Exchange. In the event that on the
Valuation Date: (a) the New York Stock Exchange is closed to trading or trading
thereon is restricted; or (b) trading or the reporting of trading on said
Exchange or elsewhere is disrupted so that accurate appraisal of the value of
the total net assets of each Acquired Fund is impracticable, then the Closing
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
19
<PAGE> 28
4.4 List of each Acquired Fund's Shareholders. Trust C shall deliver at
the Closing a list of names and addresses of the shareholders of each Acquired
Fund and the number and percentage ownership of outstanding shares owned by each
such shareholder, all as of the Effective Time, certified by the Secretary or
Assistant Secretary of Trust C. Trust A shall issue and deliver to said
Secretary or Assistant Secretary of Trust C a confirmation evidencing each
Acquiring Fund's Class C shares to be credited to the corresponding Acquired
Fund on the [Liquidation Date], or provide other evidence satisfactory to Trust
C that such Acquiring Fund's Class C shares have been credited to the account of
the corresponding Acquired Fund on the records of Trust A's transfer agent
maintained with respect to each Acquiring Fund's Class C shares. At the Closing,
each party shall deliver to the other such bills of sale, checks, assignments,
share certificates, receipts or other transfer documents as such other party may
reasonably request.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Trust C, on behalf of each Acquired Fund, represents and warrants to
Trust A, on behalf of each Acquiring Fund, as follows:
(a) Trust C is a voluntary association with transferable shares of the
type commonly referred to as a Massachusetts business trust, duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts;
(b) Trust C is registered as an investment company classified as a
management company of the open-end type and its registration with the
Securities and Exchange Commission (the "Commission") as an investment
company under the 1940 Act, is in full force and effect;
(c) The current prospectus and statement of additional information of
Trust C relating to the Acquired Funds conform in all material respects to
the applicable requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and the 1940 Act and the rules and regulations of the
Commission thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(d) Trust C is not, and the execution, delivery and performance of
this Agreement will not result, in a material violation of its Declaration
of Trust or By-Laws, as each may have been amended to the date hereof, or
of any agreement, indenture, instrument, contract, lease or other
undertaking to which Trust C is a party or by which it is bound;
(e) Trust C has no material contracts or other commitments (other than
this Agreement) which, if terminated prior to the Closing Date, would
result in an additional liability of any of the Acquired Funds;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its
knowledge threatened against Trust C or any Acquired Fund or any of their
respective properties or assets which, if adversely determined, would
materially and adversely affect their financial condition or the conduct of
their business. Trust C knows of no facts which might form the basis for
the institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially or adversely affects its business or its ability to
consummate the transactions herein contemplated;
(g) At the Closing Date, all federal and other tax returns and reports
of the Acquired Funds required by law to have been filed by such date shall
have been filed, and all federal and other taxes shall have been paid so
far as due, or provision shall have been made for the payment thereof and,
to the best of Trust C's knowledge, no such return is currently under audit
and no assessment has been asserted with respect to such returns;
(h) For each fiscal year of its operation, each of the Acquired Funds
has (i) met the requirements of Subchapter M of the Code for qualification
and treatment as a regulated investment company and (ii) been treated as a
separate corporation for federal income tax purposes pursuant to section
851(h) of
20
<PAGE> 29
the Code, and each of the Acquired Funds intends to be so treated as a
separate corporation and meet such qualification requirements for its
current taxable year;
(i) All issued and outstanding shares of each Acquired Fund are, and
at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to the
ownership thereof (recognizing that, under Massachusetts law, each Acquired
Fund's Shareholders could, under certain circumstances, be held personally
liable for obligations of the respective Acquired Fund);
(j) At the Closing Date, Trust C, on behalf of the Acquired Funds,
will have good and marketable title to the Assets to be transferred to the
Acquiring Funds pursuant hereto and full right, power and authority to
sell, assign, transfer and deliver such Assets hereunder and, upon delivery
and payment for such Assets, the Acquiring Funds will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act,
other than as disclosed to the Acquiring Funds;
(k) The execution, delivery and performance of this Agreement have
been duly authorized as of the date hereof by all necessary action on the
part of Trust C's Board of Trustees, and on the date hereof and on the
Closing Date this Agreement will constitute a valid and binding obligation
of Trust C on behalf of each respective Acquired Fund enforceable against
Trust C in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights and to general principles of equity;
(l) On the Closing Date, the performance of this Agreement shall have
been duly authorized by all necessary action by the shareholders of each
Acquired Fund.
5.2 Trust A, on behalf of each Acquiring Fund, represents and warrants to
Trust C, on behalf of each Acquired Fund, as follows:
(a) Trust A is a voluntary association with transferable shares of the
type commonly referred to as a Massachusetts business trust, duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts;
(b) Trust A is registered as an investment company classified as a
management company of the open-end type and its registration with the
Commission as an investment company under the 1940 Act, is in full force
and effect;
(c) The current prospectus and statement of additional information of
Trust A relating to the Acquiring Funds conform in all material respects to
the applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(d) Trust A is not, and the execution, delivery and performance of
this Agreement will not result, in a material violation of its Declaration
of Trust or By-Laws, as each may have been amended to the date hereof, or
of any agreement, indenture, instrument, contract, lease or other
undertaking to which Trust A is a party or by which it is bound;
(e) Trust A has no material contracts or other commitments (other than
this Agreement) which, if terminated prior to the Closing Date, would
result in an additional liability of any of the Acquiring Funds;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its
knowledge threatened against Trust A or any Acquiring Fund or any of their
respective properties or assets which, if adversely determined, would
materially and adversely affect their financial condition or the conduct of
their business. Trust A knows of no facts which might form the basis for
the institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially or adversely affects its business or its ability to
consummate the transactions herein contemplated;
21
<PAGE> 30
(g) At the Closing Date, all federal and other tax returns and reports
of the Acquiring Funds required by law to have been filed by such date
shall have been filed, and all federal and other taxes shall have been paid
so far as due, or provision shall have been made for the payment thereof
and, to the best of Trust A's knowledge, no such return is currently under
audit and no assessment has been asserted with respect to such returns;
(h) For each fiscal year of its operation, each of the Acquiring Funds
has (i) met the requirements of Subchapter M of the Code for qualification
and treatment as a regulated investment company and (ii) been treated as a
separate corporation for federal income tax purposes pursuant to section
851(h) of the Code, and each of the Acquiring Funds intends to be so
treated as a separate corporation and meet such qualification requirements
for its current taxable year;
(i) All issued and outstanding shares of each Acquiring Fund are, and
at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to the
ownership thereof (recognizing that, under Massachusetts law, each Acquired
Fund's Shareholders could, under certain circumstances, be held personally
liable for obligations of the respective Acquiring Fund);
(k) The execution, delivery and performance of this Agreement have
been duly authorized as of the date hereof by all necessary action on the
part of Trust A's Board of Trustees, and on the date hereof and on the
Closing Date this Agreement will constitute a valid and binding obligation
of Trust A on behalf of each respective Acquiring Fund enforceable against
Trust A in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights and to general principles of equity.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
The obligations of Trust A hereunder and the obligations of Trust C
hereunder are subject to the conditions that on or before the Closing Date:
6.1 Representations and Warranties. All representations and warranties of
each of Trust A and Trust C set forth herein shall be true and correct in all
material respects as of the date hereof and, except as may be affected by the
transactions contemplated by this Plan, as of the Effective Time with the same
force and effect as if made on and as of the Effective Time.
6.2 Approval of Plan by Shareholders of Each Acquired Fund. This Plan and
the transactions contemplated hereby shall have been approved by the requisite
vote of the holders of the outstanding shares of each Acquired Fund in
accordance with the provisions of the law of business trusts of the Commonwealth
of Massachusetts, the provisions of the 1940 Act and the provisions of Trust A's
Declaration of Trust and Bylaws;
6.3 No Adverse Actions. On the Closing Date, no action, suit or other
proceeding shall be pending before any court or governmental agency in which it
is sought to restrain or prohibit or obtain damages or other relief in
connection with this Plan or the transactions contemplated hereby;
6.4 Consents and Approvals. (a) All consents of other parties and all
other consents, orders and permits of federal, state and local regulatory
authorities (including those of the Commission and of state Blue Sky or
securities authorities, including "no-action" positions of such federal or state
authorities) deemed necessary by Trust A or Trust C to permit consummation, in
all material respects, of the transactions contemplated hereby, shall have been
obtained, except where failure to obtain any such consent, order or permit would
not involve a risk of a material adverse effect on the assets or properties of
any Acquired Fund or any Acquiring Fund, provided that either party hereto may
for itself waive any of such conditions; and
(b) The Board of Trustees of Trust A and Trust C shall have approved the
terms of the Reorganization and this Plan and shall have determined that (i)
participation by Trust A and Trust C, respectively, in the Reorganization is in
the best interests of such Trust, (ii) the interests of existing shareholders of
each of Trust A and Trust C, respectively, will not be diluted as a result of
the Reorganization,
22
<PAGE> 31
(iii) the terms of the Reorganization, including the consideration to be paid
or received, are reasonable and fair and do not involve overreaching on the part
of any person, and (iv) the Reorganization is consistent with the policies of
Trust A and Trust C, respectively, as recited in its respective registration
statement and reports filed under the 1940 Act.
6.5 Effectiveness of Registration Statement on Form N-14; Exemptive Order.
A Registration Statement on Form N-14 relating to the shares of each Acquiring
Fund's Class C shares issuable hereunder, including the combined Proxy Statement
of each Acquired Fund and the Prospectus of Trust A (relating to the shares of
each Acquiring Fund's Class C shares issuable pursuant to the terms of this
Plan) constituting a part thereof, shall have become effective under the 1933
Act and no stop order suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act. Additionally, in response to an application
for exemption to be submitted by Trust A, Trust C, Select Advisors Portfolios
and certain affiliated persons, the Securities and Exchange Commission shall
have issued an order exempting Trust A, Trust C and the other applicants from
certain provisions of the 1940 Act or the issues raised in the application shall
have otherwise been resolved to the mutual satisfaction of the parties.
6.6 Tax Opinions. Each of Trust A and Trust C shall have obtained an
opinion of Frost & Jacobs LLP, legal counsel to Trust A and Trust C, in form and
substance reasonably satisfactory to their respective Boards, to the effect
that:
(a) The transfer of all of an Acquired Fund's Assets solely in
exchange for the corresponding Acquiring Fund's Class C shares and the
assumption by the Acquiring Fund of the Liabilities of the Acquired Fund,
and the distribution of such Shares to the shareholders of the Acquired
Fund, will constitute a "reorganization" within the meaning of section
368(a)(1)(C) of the Code and the Acquiring Fund and the Acquired Fund are
each a "party to a reorganization" within the meaning of section 368(b) of
the Code;
(b) No gain or loss will be recognized by an Acquired Fund upon the
transfer of the Acquired Fund's Assets to the corresponding Acquiring Fund
in exchange for the Acquiring Fund's Class C shares and the assumption by
the Acquiring Fund of the Liabilities of the Acquired Fund or upon the
distribution (whether actual or constructive) of the Acquiring Fund's Class
C shares to the Acquired Fund's Shareholders in exchange for their shares
of the Acquired Fund;
(c) The tax basis of each Acquired Fund's Assets acquired by an
Acquiring Fund will be the same to the Acquiring Fund as the tax basis of
such Assets to the Acquired Fund immediately prior to the Reorganization,
and the holding period of the Assets of each Acquired Fund in the hands of
the corresponding Acquiring Fund will include the period during which those
assets were held by the Acquired Fund;
(d) No gain or loss will be recognized by an Acquiring Fund upon the
receipt of the Assets of an Acquired Fund solely in exchange for the
Acquiring Fund's Class C shares and the assumption by the Acquiring Fund of
the Liabilities of the Acquired Fund;
(e) No gain or loss will be recognized by shareholders of any Acquired
Fund upon the distribution of the corresponding Acquiring Fund's Class C
shares to such shareholders, provided such shareholders receive solely such
corresponding Acquiring Fund's Class C shares (including fractional shares)
in exchange for their Acquired Fund shares; and
(f) The aggregate tax basis for the Acquiring Fund's Class C shares,
including any fractional shares, received by each shareholder of each
Acquired Fund pursuant to the Reorganization will be the same as the
aggregate tax basis of the Acquired Fund's shares held by such shareholder
immediately prior to the Reorganization, and the holding period of the
Acquiring Fund's Class C shares, including any fractional shares, to be
received by each shareholder of the Acquired Fund will include the period
during which the Acquired Fund's shares exchanged therefor were held by
such shareholder (provided that the Acquired Fund's shares were held as a
capital asset on the date of the Reorganization).
23
<PAGE> 32
7. EXPENSES
The expenses incurred in connection with the entering into and carrying out
the provisions of this Plan will be borne and paid by Touchstone Advisors, Inc.,
and not by each Acquiring Fund or each Acquired Fund.
8. TERMINATION
8.1 Mutual Agreement. This Plan may be terminated by the mutual agreement
of Trust A and Trust C.
8.2 Material Breach. In addition, either Trust A or Trust C may, at its
option, terminate this Plan at or prior to the Closing Date on account of a
material breach by the other of any agreement contained herein to be performed
by such other party at or prior to the Closing Date.
8.3 Failure of Condition Precedent. In addition, either Trust A or Trust
C may, at its option, terminate this Plan at or prior to the Closing Date on
account of a condition herein expressed to be precedent to the obligation of
such party which has not been met and which appears cannot reasonably, or will
not, be met.
8.4 Effects of Termination. In the event of any such termination, there
shall be no liability for damage on the part of Trust A or Trust C or their
respective Trustees or officers.
9. AMENDMENT
This Plan may be amended, modified or supplemented in such manner as may be
mutually agreed upon in writing by the parties hereto; provided, however, that
following the meeting of the shareholders of each Acquired Fund described in
Section 6.2 of this Plan, no such amendment may have the effect of changing the
provisions for determining the number of shares of each Acquiring Fund's Class C
shares to be issued to an Acquired Fund's Shareholders under this Plan to the
detriment of such shareholders without their further approval.
10. MISCELLANEOUS
10.1 Headings. The section headings contained in this Plan will have
reference purposes only and shall not effect in any way the meaning or
interpretation of this Plan.
10.2 Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
24
<PAGE> 33
IN WITNESS WHEREOF, each of the parties hereto has caused this Plan to be
executed on its behalf by its duly authorized officer as of the day and year
first written above.
SELECT ADVISORS TRUST C
(ON BEHALF OF EACH OF ITS SERIES)
By:/s/EDWARD G. HARNESS, JR.
-------------------------------------
Edward G. Harness, Jr., President
SELECT ADVISORS TRUST A
(ON BEHALF OF EACH OF ITS SERIES,
EXCEPT TOUCHSTONE STANDBY INCOME FUND)
By:/s/EDWARD G. HARNESS, JR.
-------------------------------------
Edward G. Harness, Jr., President
TOUCHSTONE ADVISORS, INC.
(SOLELY TO EVIDENCE ITS CONCURRENCE
WITH SECTION 7 HEREOF)
By:/s/EDWARD G. HARNESS, JR.
-------------------------------------
Edward G. Harness, Jr., President
25
<PAGE> 34
STATEMENT OF
ADDITIONAL INFORMATION
OCTOBER 1, 1998
SELECT ADVISORS TRUST C SELECT ADVISORS TRUST A
(Class C Shares of Beneficial Interest)
Touchstone Emerging Growth Fund C Touchstone Emerging Growth Fund A
Touchstone International Equity Fund C Touchstone International Equity Fund A
Touchstone Income Opportunity Fund C Touchstone Income Opportunity Fund A
Touchstone Value Plus Fund C Touchstone Value Plus Fund A
Touchstone Growth & Income Fund C Touchstone Growth & Income Fund A
Touchstone Balanced Fund C Touchstone Balanced Fund A
Touchstone Bond Fund C Touchstone Bond Fund A
PROXY STATEMENT PROSPECTUS
The Proxy Statement/Prospectus, dated October 1, 1998, provides the
basic information investors should know before voting/investing, and may be
obtained upon request and without charge by calling Select Advisors Trust A
("Trust A") at the telephone number listed below. This Reorganization Statement
of Additional Information, which is not a prospectus, is intended to provide
additional information regarding the activities and operations of Trust A and
should be read in conjunction with the Proxy Statement/Prospectus. This
Statement of Additional Information is not an offer of any Fund for which an
investor has not received a Prospectus. Capitalized terms not otherwise defined
in this Statement of Additional Information have the meanings accorded to them
in the Prospectus.
Further information about Select Advisors Trust A ("Trust A") and each
series of Trust A (each a "Trust A Fund") is contained in the Statement of
Additional Information of Trust A, dated May 1, 1998, as supplemented and the
audited financial statements of Trust A contained in its most recent Annual
Report dated December 31, 1997, each of which is incorporated herein by
reference. Further information about Select Advisors Trust C ("Trust C") and
each series of Trust C (each a "Trust C Fund") is contained in the Statement of
Additional Information of Trust C, dated May 1, 1998, as supplemented and the
audited financial statements of Trust C contained in its most recent Annual
Report dated December 31, 1997, each of which is incorporated herein by
reference.
TOUCHSTONE ADVISORS, INC.
INVESTMENT ADVISOR
TOUCHSTONE SECURITIES, INC.
DISTRIBUTOR
311 Pike Street Cincinnati, Ohio (800) 669-2796
<PAGE> 35
FINANCIAL STATEMENTS
The pro forma combining statements of assets and liabilities reflects the
financial position of each Trust A Fund at (i) December 31, 1997 and (ii) June
30, 1998, as though the Reorganization occurred as of those respective dates.
The pro forma combining statement of operations reflects the results of
operations of Trust A and Trust C for the periods ended (i) December 31, 1997
and (ii) June 30, 1998, as though the Reorganization occurred at the beginning
of the respective periods presented. The pro forma Schedule of Investments as of
(i) December 31, 1997 and (ii) June 30, 1998, are presented as though the
Reorganization had been consummated on those respective dates.
2
<PAGE> 36
EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ------- ----------
<C> <S> <C>
COMMON STOCKS (91.7%)
ADVERTISING (0.2%)
1,500 Mastering*...................... $ 13,688
----------
AUTOMOTIVE (2.4%)
1,800 Bandag, Class A................. 86,175
3,800 Exide........................... 98,325
----------
184,500
----------
BANKING (5.3%)
2,000 Bank United, Class A............ 97,875
3,700 Dime Bancorp., Inc. ............ 111,925
5,100 Golden State Bancorp*........... 190,613
----------
400,413
----------
BEVERAGES, FOOD & TOBACCO (3.2%)
3,700 DiMon........................... 97,125
4,200 Ralcorp Holdings*............... 71,138
1,500 Robert Mondavi, Class A*........ 73,125
----------
241,388
----------
BUILDING MATERIALS (2.7%)
4,100 Calmat.......................... 114,288
2,400 Martin Marietta Materials....... 87,750
----------
202,038
----------
CHEMICALS (2.8%)
6,200 Calgon Carbon................... 66,650
2,500 Standard Products............... 64,063
5,100 Vivid Technologies*............. 80,963
----------
211,676
----------
COMMERCIAL SERVICES (9.5%)
3,000 Administaff*.................... 77,625
2,300 Advance Paradigm*............... 73,025
4,800 A.C. Nielson*................... 117,000
4,000 Boron Lepore & Associates*...... 110,000
4,900 Metromail*...................... 87,588
1,300 National Service Industries..... 64,431
2,000 Stewart Enterprises............. 93,250
2,600 Wallace Computer Services....... 101,075
----------
723,994
----------
COMMUNICATIONS (1.6%)
2,400 Cable Design Technologies*...... 93,300
2,000 Geotel Communications*.......... 31,250
----------
124,550
----------
COMPUTERS & INFORMATION (7.4%)
2,600 EMC*............................ 71,338
3,900 Gerber Scientific............... 77,513
9,900 Intergraph*..................... 99,000
3,800 Saville Systems, ADR*........... 157,700
6,700 Scitex*......................... 80,819
2,016 Sterling Commerce*.............. 77,490
----------
563,860
----------
COMPUTER SOFTWARE &
PROCESSING (8.7%)
2,200 Cambridge Technology
Partners*....................... 91,575
1,000 CBT Group*...................... 82,125
2,200 HNC Software*................... 94,600
2,500 Keane*.......................... 101,563
1,600 Policy Management System*....... 111,300
8,000 PSW Technologies*............... 116,000
1,600 Wind River Systems*............. 63,500
----------
660,663
----------
ELECTRONICS (3.8%)
1,200 Commscope*...................... $ 16,125
4,300 Magnetek*....................... 83,850
990 Sanmina*........................ 67,073
4,000 Sipex Corporation*.............. 121,000
----------
288,048
----------
ENTERTAINMENT & LEISURE (1.0%)
2,000 Cinar Films, Class B*........... 77,750
----------
FINANCIAL SERVICES (5.6%)
2,325 First Security.................. 97,359
4,300 Life USA Holdings*.............. 72,563
2,400 Meditrust....................... 87,900
1,200 Seacor Smit*.................... 72,300
6,000 T&W Financial*.................. 99,750
----------
429,872
----------
HEALTH CARE PROVIDERS (1.0%)
8,000 Dianon Systems*................. 75,000
----------
HEAVY INDUSTRY (2.5%)
4,200 Comfort Systems USA*............ 82,950
2,299 Flowserve....................... 64,228
2,700 Global Industrial
Technologies*................... 45,731
----------
192,909
----------
HOME CONSTRUCTION, FURNISHINGS &
APPLIANCE (2.2%)
1,600 Herman Miller................... 87,300
1,900 LA-Z-Boy Chair.................. 81,938
----------
169,238
----------
INDUSTRIAL (3.9%)
3,000 CN Biosciences*................. 75,000
3,000 General Cable................... 108,563
2,800 Wesley Jessen Visioncare*....... 109,200
----------
292,763
----------
INSURANCE (2.0%)
900 HSB Group....................... 49,669
2,700 Western National................ 79,988
1,900 Willis Coroon Group, ADR........ 23,394
----------
153,051
----------
MEDIA--BROADCASTING & PUBLISHING
(4.4%)
1,700 American Radio Systems*......... 90,622
1,100 Central Newspapers, Class A..... 81,331
7,100 Hollinger International......... 99,400
2,100 Lee Enterprises................. 62,081
----------
333,434
----------
MEDICAL (0.7%)
3,300 Atria Communities*.............. 56,513
----------
MEDICAL SUPPLIES (2.2%)
3,100 EG&G............................ 64,519
6,100 Elsag Bailey*................... 100,650
----------
165,169
----------
METALS (1.0%)
1,700 Harsco.......................... 73,313
----------
OIL & GAS (3.7%)
2,800 Equitable Resources............. 99,050
11,000 Grey Wolf*...................... 59,125
2,700 Nabors Industries*.............. 84,881
2,800 Quaker State.................... 39,900
----------
282,956
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 37
EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ------- ----------
<S> <C> <C>
COMMON STOCKS--CONTINUED
PHARMACEUTICALS (1.3%)
5,300 Digene*......................... $ 45,713
7,000 Sequus Pharmaceuticals*......... 52,063
----------
97,776
----------
REAL ESTATE (2.4%)
2,300 Arden Realty Group.............. 70,725
2,500 CCA Prison Realty Trust......... 111,563
----------
182,288
----------
RETAILERS (2.5%)
11,500 Charming Shoppes................ 53,906
2,600 Stanhome........................ 66,788
3,000 Zale*........................... 69,000
----------
189,694
----------
TEXTILES, CLOTHING & FABRICS
(1.8%)
2,200 Albany International............ 50,600
7,100 Stride Rite..................... 85,200
----------
135,800
----------
TRANSPORTATION (5.9%)
2,000 Alexander & Baldwin............. 54,625
6,800 Fritz Companies*................ 94,775
4,400 JB Hunt Transportation
Services........................ 82,500
3,800 Knightsbridge Tankers........... 107,588
4,300 Newport News Shipbuilding....... 109,381
----------
448,869
----------
TOTAL COMMON STOCKS (COST $5,405,843).....
$6,971,213
----------
TOTAL INVESTMENTS AT VALUE (91.7%) (COST
$5,405,843)(a)............................ 6,971,213
CASH AND OTHER ASSETS NET OF LIABILITIES
(8.3%).................................... 811,583
----------
NET ASSETS (100.0%)....................... $7,782,796
==========
</TABLE>
- -----------
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
(a) The aggregate identified cost for federal income tax purposes is $5,406,241,
resulting in gross unrealized appreciation and depreciation of $1,689,435
and $124,463, respectively and net unrealized appreciation of $1,564,972.
ADR - American Depositary Receipt
EMERGING GROWTH TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
EMERGING EMERGING EMERGING (REFERENCES ARE
GROWTH GROWTH GROWTH TO PRO FORMA EMERGING GROWTH
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
---------- ---------- ---------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding
Select Advisors
Portfolios, at value - $4,848,798 $2,751,499 $(7,600,297) (Note C) -
Investments at Value (Note A) $6,971,213 - - - $6,971,213
Cash and foreign currency 570,113 - - - 570,113
Receivables for:
Securities sold 107,082 - - - 107,082
Fund shares sold - 5,086 464 - 5,550
Dividend, interest, and
foreign withholding tax 9,287 - - - 9,287
Gain on forward contracts - - - - -
Deferred organization expenses 12,382 17,164 16,514 (28,896) (Note D) 17,164
Reimbursement receivable from
Advisor/Sponsor 35,635 120,367 100,242 (23,858) (Notes D, F,G,H,I) 232,386
---------- ----------- ---------- ----------- ----------
Total Assets 7,705,712 4,991,415 2,868,719 (7,653,051) 7,912,795
---------- ----------- ---------- ----------- ----------
LIABILITIES:
Payable for fund shares redeemed - - - - -
Distribution payable from income - - - - -
Payable for investments purchased 77,219 - - - 77,219
Due to Custodian - - - - -
Payable to Advisor (Sponsor) - - - - -
Other accrued expenses 28,196 42,742 34,596 (52,754) (Notes D, F,G,H,I) 52,780
---------- ----------- ---------- ----------- ----------
Total Liabilities 105,415 42,742 34,596 (52,754) 129,999
---------- ----------- ---------- ----------- ----------
NET ASSETS: $7,600,297 $4,948,673 $2,834,123 $(7,600,297) $7,782,796
========== =========== ========== =========== ==========
NET ASSETS CONSIST OF:
Paid-in capital $7,600,297 $3,896,709 $2,251,248 $(7,600,297) (Notes C) $6,147,957
Undistributed Net Income, or
(distributions in excess
of net investment income) - - - - -
Accumulated net realized gain
(loss) on investments and
foreign currency, or
(distributions in excess
of net realized gains) - 44,431 25,037 - 69,468
Net unrealized appreciation
(depreciation) on
investments, foreign
currency and other assets - 1,007,533 557,838 - 1,565,371
---------- ----------- ---------- ----------- ----------
NET ASSETS: $7,600,297 $4,948,673 $2,834,123 $(7,600,297) $7,782,796
========== =========== ========== =========== ==========
Class A - $4,948,673 - - $4,948,673
========== =========== ========== =========== ==========
Class C - - $2,834,123 - $2,834,123
========== =========== ========== =========== ==========
SHARES OUTSTANDING:
Class A - 357,329 - - 357,329
========== =========== ========== =========== ==========
Class C - - 200,570 - 200,570
========== =========== ========== =========== ==========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and
redemptions price per share - $ 13.85 - - $ 13.85
========== =========== ========== =========== ==========
Maximum offering price per
share (based on maximum
sales charge of 5.75%) - $ 14.69 - - $ 14.69
========== =========== ========== =========== ==========
CLASS C SHARES
Net asset value and offering
price per share* - - $ 14.13 - $ 14.13
========== =========== ========== =========== ==========
Note A: Cost of investments 5,405,843 5,405,843
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
EMERGING GROWTH TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
EMERGING EMERGING EMERGING (REFERENCES ARE EMERGING
GROWTH GROWTH GROWTH TO PRO FORMA GROWTH
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
---------- ---------- -------- --------------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 18,125 $ 11,528 $ 6,597 (18,125) (Note C) $ 18,125
Dividend income 55,807 35,541 20,266 (55,807) (Note C) 55,807
---------- ---------- -------- ----------- ----------
73,932 47,069 26,863 (73,932) 73,932
---------- ---------- -------- ----------- ----------
EXPENSES:
Allocated expenses from Hub - 59,857 34,126 (93,983) (Note C) -
Investment Advisory fee 48,463 - - - 48,463
Sponsor fee - 7,841 4,498 - 12,339
Transfer agent - 48,471 34,399 - 82,870
Custody, Fund accounting
and administration 100,241 15,324 14,750 (35,500) (Note F) 94,815
Registration - 12,761 12,101 3,300 (Note G) 28,162
Audit 17,354 9,752 11,922 (3,000) (Note H) 36,028
Amortization of organization
expense 7,052 9,771 9,402 (16,454) (Note D) 9,771
Printing - 2,692 2,681 (1,100) (Note I) 4,273
Legal 2,147 1,291 1,033 - 4,471
Miscellaneous 1,988 1,053 826 - 3,867
Trustee 836 539 310 - 1,685
---------- ---------- -------- ----------- ----------
Total expenses 178,081 169,352 126,048 (146,737) 326,744
---------- ---------- -------- ----------- ----------
Less: Waiver of Sponsor fees - (7,841) (4,498) - (12,339)
Reimbursement from
sponsor (84,098) (112,526) (95,744) 52,754 (Notes D, F, G, H, I) (239,614)
---------- ---------- -------- ----------- ----------
93,983 48,985 25,806 (93,983) 74,791
Distribution and service fees:
Class A shares - 9,801 - - 9,801
Class C shares - - 24,784 - 24,784
---------- ---------- -------- ----------- ----------
Net Expenses 93,983 58,786 50,590 (93,983) 109,376
---------- ---------- -------- ----------- ----------
NET INVESTMENT INCOME (LOSS) (20,051) (11,717) (23,727) 20,051 (35,444)
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 913,915 590,394 323,521 (913,915) (Note C) 913,915
Foreign currency transactions - - - - -
---------- ---------- -------- ----------- ----------
913,915 590,394 323,521 (913,915) 913,915
---------- ---------- -------- ----------- ----------
Net change in unrealized
appreciation (depreciation)
on:
Investments 846,170 538,558 307,612 (846,170) (Note C) 846,170
Foreign currency transactions - - - - -
---------- ---------- -------- ----------- ----------
846,170 538,558 307,612 (846,170) 846,170
---------- ---------- -------- ----------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $1,740,034 $1,117,235 $607,406 $(1,740,034) $1,724,641
========== ========== ======== =========== ==========
Note A: Net of foreign
withholding tax of: - - - - -
---------- ---------- -------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ----------
<S> <C> <C>
COMMON STOCKS (94.6%)
ARGENTINA (0.0%)
1 Compania Naviera Perez
Companc.................... $ 7
----------
AUSTRIA (0.6%)
950 Erste Banks.................. 47,344
----------
BRAZIL (1.1%)
1,900 Cia Paranaense Energy, ADR... 26,006
292,000 Saneamento Basico............ 69,334
----------
95,340
----------
CANADA (3.5%)
865 BCE.......................... 28,961
1,886 Canadian Imperial Bank of
Commerce................... 58,725
300 Newbridge Networks*.......... 10,548
200 Northern Telecom............. 17,829
2,350 Petro-Canada................. 43,164
1,320 Royal Bank of Canada......... 69,960
1,500 Suncor Energy................ 51,429
630 Talisman Energy.............. 18,735
----------
299,351
----------
CHILE (1.0%)
1,325 Chilectra ADR................ 33,844
1,620 Compania De
Telecomunicaciones ADR..... 48,398
----------
82,242
----------
DENMARK (0.8%)
181 Den Danske Bank.............. $ 24,127
3,160 Sas Danmark.................. 46,136
----------
70,263
----------
FINLAND (0.8%)
1,804 Pohjola Insurance, Class B... 66,899
----------
FRANCE (12.3%)
322 Accor........................ 59,888
1,023 Alcatel Alsthom.............. 130,075
1,226 AXA.......................... 94,897
1,022 Banque National De Paris..... 54,340
1,047 Cap Gemini................... 85,880
1,424 Credit Commercial De
France..................... 97,632
1,921 France Telecom............... 69,701
1,715 Lagardere Groupe............. 56,725
2,091 Renault*..................... 58,839
2,854 Rhone Poulenc Series A....... 127,888
731 Societe National
Elf-Aquitaine.............. 85,049
724 Suez Lyonnaise Des Eaux-
Dumex...................... 80,144
482 Total S.A., Series B......... 52,474
----------
1,053,532
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 38
INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
GERMANY (3.8%)
1,246 Bayerische Vereinsbank....... $ 81,565
204 Mannesmann................... 103,135
1,491 Rhein-Westfael
Elektricitaet.............. 80,023
667 Schering..................... 64,363
----------
329,086
----------
GREAT BRITAIN (28.2%)
1,000 Airtours..................... 20,375
3,900 Allied Irish Banks........... 37,213
7,203 Amvesco...................... 61,636
24,970 Avis Europe.................. 71,391
8,622 Boots........................ 124,176
4,120 British Aerospace............ 117,456
17,226 British Gas.................. 77,558
6,855 British Petroleum............ 90,730
8,400 Compass Group................ 103,380
8,430 CRH*......................... 97,793
1,725 GKN.......................... 35,345
4,312 Glaxo Wellcome............... 102,841
8,892 Great Universal Stores....... 112,066
6,995 JJB Sports................... 75,514
8,992 Lloyds TSB Group............. 117,028
3,441 Mercury Assets Management
Group...................... 96,133
5,683 National Westminster Bank.... 95,061
8,178 Next......................... 93,387
7,275 Railtrack Group.............. 115,594
14,572 Royal & Sun Alliance
Insurance Group............ 146,777
12,170 Sainsbury (J) Finance PLC.... 101,785
13,492 Shell Transport & Trading.... 94,663
1,760 Siebe........................ 34,562
10,061 Tesco........................ 81,832
9,124 Unilever..................... 78,514
2,200 Virgin Express Holdings,
ADR........................ 45,650
17,596 Vodafone Group............... 126,927
16,627 WPP Group.................... 73,219
----------
2,428,606
----------
IRELAND (1.2%)
6,500 Bank Of Ireland.............. 99,756
----------
ISRAEL (0.7%)
1,500 ECI Telecommunications....... 38,250
190 Geotek Communications........ 291
500 Teva Pharmaceutical
Industries, ADR............ 23,656
----------
62,197
----------
ITALY (6.2%)
4,010 Assicurazione Generali....... 98,733
38,235 Credito Italiano............. 118,338
91,868 Montedison................... 82,411
19,700 Stet RISP*................... 86,611
22,100 Telecom Italia Mobile........ 102,025
6,785 Telecom Italia............... 43,427
----------
531,545
----------
JAPAN (10.0%)
500 Acom......................... 27,570
1,000 Aoyama Trading............... 16,925
2,600 Bank of Tokyo................ 35,841
2,000 Bridgestone.................. 43,347
1,000 Canon........................ 23,282
4,000 Fujitsu...................... 42,887
1,000 Fuji Photo Film.............. $ 38,292
1,000 Honda Motor.................. 36,684
2 Japan Tobacco................ 14,183
2,000 Kao.......................... 28,796
600 Konami Company............... 14,750
3,000 Minebea...................... 32,165
2,000 Mitsubishi Estate............ 21,750
3,000 Mitsubishi Trust & Bank...... 30,098
300 Nintendo..................... 29,638
2,000 Nippon Comsys................ 24,660
8 Nippon Telegraph and
Telephone.................. 34,310
100 Nippon Television Network.... 29,332
1,000 Nomura Securities............ 13,326
460 Promise Company.............. 25,506
1,000 Sankyo....................... 22,592
2,000 Sekisui House................ 12,851
500 Sony......................... 44,419
1,000 TDK.......................... 75,359
2,000 Terumo....................... 29,408
1,600 Tokyo Electric Power......... 29,163
2,000 Toyota Motor................. 57,285
1,000 Yamanouchi Pharmaceutical.... 21,444
----------
855,863
----------
MEXICO (2.9%)
11,800 Cemex, Class B*.............. 62,725
11,315 Fomento Economico Mexicano,
Class B.................... 90,991
20,400 Kimberly-Clark Mexico, Series
A.......................... 96,559
----------
250,275
----------
NETHERLANDS (4.7%)
1,190 Ahrend....................... 37,406
1,010 Benckiser.................... 41,815
2,650 Ing Groep.................... 111,675
1,876 Koninklijke PTT Nederland NV... 78,317
872 Philips Electronics.......... 52,324
2,880 Verenigde Nederlandse........ 81,291
----------
402,828
----------
NORWAY (0.2%)
1,086 Sas Norge, Class B........... 15,151
----------
PORTUGAL (0.5%)
200 Portugal Telecom, ADR........ 9,400
800 Portugal Telecom............. 37,120
----------
46,520
----------
RUSSIA (0.8%)
300 AO Tatneft ADR............... 42,633
2,875 JSC Surgutneftegaz ADR....... 29,386
----------
72,019
----------
SPAIN (1.5%)
1,535 Banco Popular Espanola....... 107,304
853 Sol Melia.................... 34,154
----------
141,458
----------
SWEDEN (3.3%)
635 Electrolux................... 44,084
11,600 Nordbanken Holding*.......... 65,623
1,400 Skandia Forsaekrings......... 66,059
4,634 Forenings Sparbanken......... 105,387
----------
281,153
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 39
INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- ----------
<S> <C> <C>
COMMON STOCKS--CONTINUED
SWITZERLAND (9.5%)
14 Julius Baer Holdings......... $ 25,945
29 Kuoni Reisen Holdings........ 108,575
61 Liechtenstein Global Trust... 37,751
118 Novartis..................... 191,966
131 Rentenenstalt................ 102,750
14 Roche Holding................ 69,433
59 Sairgroup*................... 80,692
302 Schweizerische Bankverein*... 93,759
36 Swiss Reinsurance............ 67,256
27 Union Bank of Switzerland.... 38,995
----------
817,122
----------
RUSSIA (0.5%)
1,300 Lukoil Holdings.............. 40,351
----------
VENEZUELA (0.5%)
1,000 Cia Anonima Nacional
Telefonos De Venezuela
ADR*....................... 41,625
----------
TOTAL COMMON STOCKS (COST $7,344,334).....
8,130,533
----------
PREFERRED STOCKS (2.6%)
BRAZIL (0.0%)
55,000 Cia Paranaense De Energia
PFB........................ 747
----------
GERMANY (2.6%)
1,875 Henkel....................... $ 118,361
314 Sap.......................... 102,775
----------
221,136
----------
TOTAL PREFERRED STOCKS (COST $187,288).... 221,883
----------
TOTAL INVESTMENTS AT VALUE (97.2%) (COST
$7,531,622)(a)............................ 8,352,416
CASH AND OTHER ASSETS NET OF LIABILITIES
(2.8%).................................... 442,186
----------
NET ASSETS (100.0%)....................... $8,794,602
==========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
(a) The aggregate identified cost for federal income tax purposes is $7,577,991,
resulting in gross unrealized appreciation and depreciation of $999,459 and
$225,034, respectively, and net unrealized appreciation of $774,425.
ADR - American Depositary Receipt
PFB - Preferred Shares -- Class B
RISP - Risparmio (Italian "Savings Shares")
INTERNATIONAL EQUITY TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
INTERNATIONAL INTERNATIONAL INTERNATIONAL (REFERENCES ARE INTERNATIONAL
EQUITY EQUITY EQUITY TO PRO FORMA EQUITY
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
------------- ------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding Select
Advisors Portfolios, at value - $4,653,410 $3,940,053 $(8,593,463) (Note C) -
Investments at Value (Note A) $8,352,416 - - - $8,352,416
Cash and foreign currency 243,408 - - - $ 243,408
Receivables for:
Securities sold 29,994 - - - $ 29,994
Fund shares sold - 8,506 463 - $ 8,969
Dividend, interest, and
foreign withholding tax 18,850 - - - $ 18,850
Gain on forward contracts 190 - - - $ 190
Deferred organization expenses 12,382 17,164 16,514 (28,896) (Note D) $ 17,164
Reimbursement receivable from
Advisor/Sponsor 130,289 120,246 119,021 (37,058) (Notes D,F,G,H,I) $ 332,498
---------- ---------- ---------- ----------- ----------
Total Assets 8,787,529 4,799,326 4,076,051 (8,659,417) 9,003,489
---------- ---------- ---------- ----------- ----------
LIABILITIES:
Payable for fund shares redeemed - - - - -
Distribution payable from income - - - - -
Payable for investments purchased 143,002 - - - 143,002
Due to Custodian - - - - -
Payable to Advisor (Sponsor) - - - - -
Other accrued expenses 51,064 38,559 42,216 (65,954) (Notes D, F,G,H,I) 65,885
---------- ---------- ---------- ----------- ----------
Total Liabilities 194,066 38,559 42,216 (65,954) 208,887
---------- ---------- ---------- ----------- ----------
NET ASSETS: $8,593,463 $4,760,767 $4,033,835 $(8,593,463) $8,794,602
========== ========== ========== =========== ==========
NET ASSETS CONSIST OF:
Paid-in capital $8,593,463 $4,283,036 $3,599,360 $(8,593,463) (Notes C) $7,882,396
Undistributed Net Income, or
(distributions in excess
of net investment income) - (14,430) (16,192) - (30,622)
Accumulated net realized gain
(loss) on investments
and foreign currency, or
(distributions in excess of
net realized gains) - 58,978 63,937 - 122,915
Net unrealized appreciation
(depreciation) on
investments, foreign
currency and other assets - 433,183 386,730 - 819,913
---------- ---------- ---------- ----------- ----------
NET ASSETS: $8,593,463 $4,760,767 $4,033,835 $(8,593,463) $8,794,602
========== ========== ========== =========== ==========
Class A - $4,760,767 - - $4,760,767
========== ========== ========== =========== ==========
Class C - - $4,033,835 - $4,033,835
========== ========== ========== =========== ==========
SHARES OUTSTANDING:
Class A - 417,090 - - 417,090
========== ========== ========== =========== ==========
Class C - - 357,858 - 357,858
========== ========== ========== =========== ==========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and redemptions
price per share - $ 11.41 - - $ 11.41
========== ========== ========== =========== ==========
Maximum offering price per share
(based on maximum sales charge
of 5.75%) - $ 12.11 - - $ 12.11
========== ========== ========== =========== ==========
CLASS C SHARES
Net asset value and offering price
per share* - - $ 11.27 - $ 11.27
========== ========== ========== =========== ==========
Note A: Cost of investments 7,531,622 7,531,622
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
INTERNATIONAL EQUITY TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
INTERNATIONAL INTERNATIONAL INTERNATIONAL (REFERENCES ARE INTERNATIONAL
EQUITY EQUITY EQUITY TO PRO FORMA EQUITY
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
------------- ------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 16,635 $ 8,789 $ 7,846 (16,635) (Note C) $ 16,635
Dividend income 122,548 64,641 57,907 (122,548) (Note C) 122,548
---------- --------- --------- ----------- ----------
139,183 73,430 65,753 (139,183) 139,183
---------- --------- --------- ----------- ----------
EXPENSES:
Allocated expenses from Hub - 67,979 60,283 (128,262) (Note C) -
Investment Advisory fee 73,217 - - - 73,217
Sponsor fee - 8,290 7,366 - 15,656
Transfer agent - 41,226 35,041 - 76,267
Custody, Fund accounting
and administration 222,430 16,990 18,164 (48,000) (Note F) 209,584
Registration - 12,678 12,573 4,000 (Note G) 29,251
Audit 18,737 12,872 12,872 (3,000) (Note H) 41,481
Amortization of organization
expense 7,052 9,771 9,402 (16,454) (Note D) 9,771
Printing - 2,609 9,842 (2,500) (Note I) 9,951
Legal 3,220 1,544 1,453 - 6,217
Miscellaneous 2,986 1,623 1,190 - 5,799
Trustee 1,126 601 539 - 2,266
---------- --------- --------- ----------- ----------
Total expenses 328,768 176,183 168,725 (194,216) 479,460
---------- --------- --------- ----------- ----------
Less: Waiver of Sponsor fees - (8,290) (7,366) - (15,656)
Reimbursement
from sponsor (200,506) (111,956) (111,655) 65,954 (Notes D, F, G, H, I) (358,163)
---------- --------- --------- ----------- ----------
128,262 55,937 49,704 (128,262) 105,641
Distribution and service fees:
Class A shares - 10,363 - - 10,363
Class C shares - - 36,818 - 36,818
---------- --------- --------- ----------- ----------
Net Expenses 128,262 66,300 86,522 (128,262) 152,822
---------- --------- --------- ----------- ----------
NET INVESTMENT INCOME (LOSS) 10,921 7,130 (20,769) (10,921) (13,639)
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 1,057,208 548,899 508,310 (1,057,208) (Note C) 1,057,209
Foreign currency transactions (46,938) (24,857) (22,081) 46,938 (Note C) (46,938)
---------- --------- --------- ----------- ----------
1,010,270 524,042 486,229 (1,010,270) 1,010,271
---------- --------- --------- ----------- ----------
Net change in unrealized
appreciation (depreciation)
on:
Investments 76,696 47,000 29,696 (76,696) (Note C) 76,696
Foreign currency transactions 684 371 313 (684) (Note C) 684
---------- --------- --------- ----------- ----------
77,380 47,371 30,009 (77,380) 77,380
---------- --------- --------- ----------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $1,098,571 $ 578,543 $ 495,469 $(1,098,571) $1,074,012
========== ========= ========= =========== ==========
Note A: Net of foreign
withholding tax of: 13,986 7,367 6,619 (13,986) 13,986
---------- --------- --------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (Note 1)
- --------- -----------
<C> <S> <C>
COMMON STOCKS (97.0%)
AEROSPACE & DEFENSE (3.0%)
4,700 Rockwell International........ $ 245,575
10,700 T R W......................... 571,113
-----------
816,688
-----------
AUTOMOTIVE (5.8%)
7,500 Dana.......................... 356,250
5,900 Echlin........................ 213,506
11,600 Ford Motor.................... 564,775
8,600 Meritor Automotive............ 181,138
5,100 Paccar........................ 267,750
-----------
1,583,419
-----------
BANKING (12.7%)
1,100 Centura Banks................. 75,900
4,800 Chase Manhattan............... 525,600
1,700 First American................ 84,575
7,900 First Commerce................ 531,275
1,100 First Tennessee National...... 73,425
7,200 Firstar....................... 305,550
8,600 Key........................... 608,988
9,100 Nationsbank................... 553,394
11,000 North Folk Bancorp............ 369,188
2,800 US Bancorp.................... 313,425
-----------
3,441,320
-----------
BEVERAGES, FOOD & TOBACCO
(7.6%)
3,800 General Mills................. $ 272,175
11,900 Heinz (H. J.)................. 604,669
13,600 Philip Morris Companies....... 616,250
9,600 Unilever, ADR................. 599,400
-----------
2,092,494
-----------
CHEMICALS (6.7%)
2,900 Akzo NV, ADR.................. 251,938
3,900 Betzdearborn.................. 238,144
2,200 Dow Chemical Company.......... 223,300
5,100 Eastman Chemical Company...... 303,769
8,500 Imperial Chemical
Industries, ADR............. 551,969
5,700 Olin.......................... 267,188
-----------
1,836,308
-----------
COMMERCIAL SERVICES (6.3%)
1,500 Browning-Ferris Industries.... 55,500
9,800 Cinergy....................... 375,463
7,000 CMS Energy.................... 308,438
9,400 Duke Energy................... 520,525
8,300 Pacificorp.................... 226,694
7,800 Unicom Corporation............ 239,850
-----------
1,726,470
-----------
COSMETICS & PERSONAL CARE
(0.9%)
4,200 Avon Products................. 257,775
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 40
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- --------- -----------
<S> <C>
COMMON STOCKS--CONTINUED
ELECTRIC UTILITIES (1.3%)
5,600 Entergy....................... $ 167,650
2,100 Southern...................... 54,338
4,700 Wisconsin Energy.............. 135,125
-----------
357,113
-----------
ELECTRONICS (1.4%)
4,700 AMP........................... 197,400
4,000 Thomas & Betts................ 189,000
-----------
386,400
-----------
FINANCIAL SERVICES (8.7%)
5,100 Corestates Financial.......... 408,319
2,500 Federal National Mortgage
Association................. 142,645
5,100 First Union................... 261,375
1,900 Fleet Financial Group......... 142,381
15,300 HomeCorp*..................... 447,525
1,100 J P Morgan.................... 124,163
5,300 Meditrust..................... 194,113
5,600 Nationwide Health
Properties.................... 142,800
5,600 Old Kent Financial............ 221,900
12,000 Security Capital Industrial
Trust......................... 298,500
-----------
2,383,721
-----------
FOREST PRODUCTS & PAPER (6.8%)
4,900 Boise Cascade................. 148,225
4,500 Georgia-Pacific (Timber
Group)*....................... 102,094
4,800 Georgia-Pacific............... 291,600
8,800 Kimberly-Clark................ 433,950
4,800 Louisiana Pacific............. 91,200
13,700 Mead.......................... 383,600
5,100 Westvaco...................... 160,331
5,100 Weyerhauser................... 250,219
-----------
1,861,219
-----------
HOME CONSTRUCTION, FURNISHINGS
& APPLIANCES (1.0%)
4,800 Whirlpool..................... 264,000
-----------
INSURANCE (2.6%)
2,200 Exel Limited.................. 139,425
5,100 Lincoln National.............. 398,438
3,300 Mid Ocean..................... 179,025
-----------
716,888
-----------
MEDICAL SUPPLIES (0.7%)
4,000 Baxter International.......... 201,750
-----------
METALS (2.3%)
9,600 Allegheny Teledyne............ 248,400
6,400 Freeport McMoran Copper &
Gold........................ 98,000
8,700 Oregon Steel Mills............ 185,419
1,700 Phelps Dodge.................. 105,825
-----------
637,644
-----------
OFFICE EQUIPMENT (2.3%)
8,600 Xerox......................... 634,788
-----------
OIL & GAS (7.4%)
6,300 Elf Aquitaine, ADR............ $ 369,338
4,100 MCN Energy Group.............. 165,538
8,000 Texaco........................ 435,000
4,500 Total S.A., ADR............... 249,750
16,000 Williams Companies............ 454,000
10,000 YPF Sociedad Anonima ADR...... 341,875
-----------
2,015,501
-----------
PHARMACEUTICALS (4.0%)
5,400 American Home Products........ 413,100
3,900 Merck......................... 414,375
2,600 Zeneca Group, ADR............. 280,800
-----------
1,108,275
-----------
RETAILERS (4.5%)
5,100 J.C. Penney Company........... 307,594
3,700 May Department Stores......... 194,944
4,300 Mercantile Stores............. 261,763
3,900 Rite Aid...................... 228,881
5,400 Sears Roebuck................. 244,350
-----------
1,237,532
-----------
TELEPHONE SYSTEMS (10.1%)
5,900 Alltel........................ 242,269
4,900 Bell Atlantic................. 445,900
5,500 Bellsouth..................... 309,719
8,300 Frontier...................... 199,719
10,300 GTE........................... 538,175
9,800 SBC Communications............ 717,850
5,100 Sprint........................ 298,988
-----------
2,752,620
-----------
TRANSPORTATION (0.9%)
4,400 CSX........................... 237,600
-----------
TOTAL COMMON STOCKS
(COST $24,433,029)........................ 26,549,525
-----------
<CAPTION>
PRINCIPAL
AMOUNT
- --------
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS (COST
$249,000) (0.9%)
ENTERTAINMENT & LEISURE (0.9%)
$249,000 Loews, 3.125%, 09/15/07....... 246,510
-----------
TOTAL INVESTMENTS AT VALUE (97.9%)
(COST $24,682,029)(a)..................... 26,796,035
CASH AND OTHER ASSETS NET OF LIABILITIES
(2.1%).................................... 684,947
-----------
NET ASSETS (100.0%)....................... $27,480,982
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
(a) The aggregate identified cost for federal income tax purposes is
$24,682,029, resulting in gross unrealized appreciation and depreciation of
$2,943,104 and $829,098, respectively, and net unrealized appreciation of
$2,114,006.
ADR - American Depositary Receipt
GROWTH & INCOME TRUST A, TRUST C & SEPARATE A
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
GROWTH & GROWTH & GROWTH & GROWTH & (REFERENCES ARE
INCOME INCOME INCOME INCOME TO PRO FORMA GROWTH & INCOME
PORTFOLIO TRUST A TRUST C SEPARATE A FOOTNOTES) PRO FORMA
----------- ---------- ---------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding
Select Advisors
Portfolios, at value - $5,882,451 $1,957,080 $19,533,982 $(27,373,513) (Note C) -
Investments at Value (Note A) $26,796,035 - - - - $26,796,035
Cash and foreign currency 342,487 - - - - 342,487
Receivables for:
Securities sold 413,371 - - - - 413,371
Fund shares sold - 21,478 557 - - 22,035
Dividend, interest, and
foreign withholding tax 61,110 - - - - 61,110
Gain on forward contracts - - - - - -
Deferred organization expenses 12,382 17,164 16,514 - (28,896) (Note D) 17,164
Reimbursement receivable from
Advisor/Sponsor - 132,712 94,462 - (153,071) (Notes D, E,F,G,H,I) 74,103
----------- ---------- ---------- ----------- ------------ -----------
Total Assets 27,625,385 6,053,805 2,068,613 19,533,982 (27,555,480) 27,726,305
----------- ---------- ---------- ----------- ------------ -----------
LIABILITIES:
Payable for fund shares
redeemed - 26,461 - - - 26,461
Distribution payable from
income - - - - - -
Payable for investments
purchased 73,789 - - - - 73,789
Due to Custodian - - - - - -
Payable to Advisor (Sponsor) 142,613 - - - (142,613) (Note E) -
Other accrued expenses 35,470 47,118 29,834 72,005 (39,354) (Notes D, F,G,H,I) 145,073
----------- ---------- ---------- ----------- ------------ -----------
Total Liabilities 251,872 73,579 29,834 72,005 (181,967) 245,323
----------- ---------- ---------- ----------- ------------ -----------
NET ASSETS: $27,373,513 $5,980,226 $2,038,779 $19,461,977 $(27,373,513) $27,480,982
=========== ========== ========== =========== ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital $27,373,513 $5,506,335 $1,871,667 $10,000,000 $(27,373,513) (Notes C) $17,378,002
Undistributed Net Income, or
(distributions in excess
of net investment income) - 2,166 706 324,052 - 326,924
Accumulated net realized gain
(loss) on investments
and foreign currency, or
(distributions in excess
of net realized gains) - 83,816 29,043 8,128,987 - 8,241,846
Net unrealized appreciation
(depreciation) on
investments, foreign
currency and other assets - 387,909 137,363 1,008,938 - 1,534,210
----------- ---------- ---------- ----------- ------------ -----------
NET ASSETS: $27,373,513 $5,980,226 $2,038,779 $19,461,977 $(27,373,513) $27,480,982
=========== ========== ========== =========== ============ ===========
Class A - $5,980,226 - - - $ 5,980,226
=========== ========== ========== =========== ============ ===========
Class C - - $2,038,779 - - $ 2,038,779
=========== ========== ========== =========== ============ ===========
Class Y - - - $19,461,977 - $19,461,977
=========== ========== ========== =========== ============ ===========
SHARES OUTSTANDING:
Class A - 397,027 - - - 397,027
=========== ========== ========== =========== ============ ===========
Class C - - 140,703 - - 140,703
=========== ========== ========== =========== ============ ===========
Class Y - - - 1,000,000 - 1,000,000
=========== ========== ========== =========== ============ ===========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and
redemptions price per
share - $ 15.06 - - - $ 15.06
=========== ========== ========== =========== ============ ===========
Maximum offering price per
share (based on
maximum sales charge
of 5.75%) - $ 15.98 - - - $ 15.98
=========== ========== ========== =========== ============ ===========
CLASS C SHARES
Net asset value and offering
price per share* - - $ 14.49 - - $ 14.49
=========== ========== ========== =========== ============ ===========
CLASS Y SHARES
Net asset value and offering
price per share - - - $ 19.46 - $ 19.46
=========== ========== ========== =========== ============ ===========
Note A: Cost of investments 24,682,029 24,682,029
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
GROWTH & INCOME TRUST A, TRUST C & SEPARATE A
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
GROWTH & GROWTH & GROWTH & GROWTH & (REFERENCES ARE GROWTH &
INCOME INCOME INCOME INCOME TO PRO FORMA INCOME
PORTFOLIO TRUST A TRUST C SEPARATE A FOOTNOTES) PRO FORMA
---------- --------- -------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 42,782 $ 8,204 $ 2,915 $ 31,662 (42,781) (Note C) $ 42,782
Dividend income 425,029 82,517 29,850 312,663 (425,030) (Note C) 425,029
---------- --------- -------- ---------- ----------- ----------
467,811 90,721 32,765 344,325 (467,811) 467,811
---------- --------- -------- ---------- ----------- ----------
EXPENSES:
Allocated expenses from Hub - 56,848 20,510 219,372 (296,730) (Note C) -
Investment Advisory fee 181,803 - - - - 181,803
Sponsor fee - 9,209 3,383 - - 12,592
Transfer agent - 53,463 36,111 - - 89,574
Custody, Fund accounting and
administration 111,938 16,552 16,834 - (29,500) (Note F) 115,824
Registration - 14,052 9,903 - 10,800 (Note G) 34,755
Audit 16,279 11,739 11,739 - (3,000) (Note H) 36,757
Amortization of organization
expense 7,052 9,771 9,402 - (16,454) (Note D) 9,771
Printing - 3,767 2,012 - (1,200) (Note I) 4,579
Legal 7,830 1,854 624 - - 10,308
Miscellaneous 8,236 3,130 1,136 - - 12,502
Trustee 2,782 675 558 - - 4,015
---------- --------- -------- ---------- ----------- ----------
Total expenses 335,920 181,060 112,212 219,372 (336,084) 512,480
---------- --------- -------- ---------- ----------- ----------
Less: Waiver of Sponsor fees - (9,209) (3,383) - - (12,592)
Reimbursement
from sponsor (39,190) (123,503) (91,079) - 39,354 (Notes D, F, G, H, I) (214,418)
---------- --------- -------- ---------- ----------- ----------
296,730 48,348 17,750 219,372 (296,730) 285,470
Distribution and service fees:
Class A shares - 11,516 - - - 11,516
Class C shares - - 16,906 - - 16,906
Class Y shares - - - - - -
---------- --------- -------- ---------- ----------- ----------
Net Expenses 296,730 59,864 34,656 219,372 (296,730) 313,892
---------- --------- -------- ---------- ----------- ----------
NET INVESTMENT INCOME (LOSS) 171,081 30,857 (1,891) 124,953 (171,081) 153,919
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 4,825,120 652,500 225,936 3,946,684 (4,825,120) (Note C) 4,825,120
Foreign currency
transactions - - - - - -
---------- --------- -------- ---------- ----------- ----------
4,825,120 652,500 225,936 3,946,684 (4,825,120) 4,825,120
---------- --------- -------- ---------- ----------- ----------
Net change in unrealized
appreciation (depreciation)
on:
Investments (380,944) 212,301 86,797 (680,042) 380,944 (Note C) (380,944)
Foreign currency
transactions - - - - - -
---------- --------- -------- ---------- ----------- ----------
(380,944) 212,301 86,797 (680,042) 380,944 (380,944)
---------- --------- -------- ---------- ----------- ----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS $4,615,257 $ 895,658 $310,842 $3,391,595 $(4,615,257) $4,598,095
========== ========= ======== ========== =========== ==========
Note A: Net of foreign
withholding tax of: - - - - - -
---------- --------- -------- ---------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 41
BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- --------- ----------
<S> <C> <C>
COMMON STOCKS (60.5%)
ADVERTISING (1.6%)
2,100 WPP Group...................... $ 94,763
----------
AEROSPACE & DEFENSE (3.3%)
1,800 Boeing......................... 88,088
1,100 Lockheed Martin................ 108,350
----------
196,438
----------
AIRLINES (2.0%)
900 AMR*........................... 115,650
----------
BANKING (3.4%)
800 Citicorp....................... 101,150
300 Wells Fargo.................... 101,831
----------
202,981
----------
BEVERAGES, FOOD & TOBACCO
(2.7%)
1,800 Diageo......................... 68,175
1,900 McDonald's..................... 90,725
----------
158,900
----------
CHEMICALS (2.5%)
3,600 Monsanto....................... 151,200
----------
COMPUTERS & INFORMATION (1.2%)
2,600 EMC*........................... 71,338
----------
ELECTRONICS (10.0%)
2,400 Adaptec*....................... 89,100
1,100 Avnet.......................... 72,600
6,967 Commscope*..................... 93,619
6,300 Nextlevel Systems*............. 112,613
2,000 Solectron*..................... 83,125
3,600 Ucar International*............ 143,775
----------
594,832
----------
ENTERTAINMENT & LEISURE (3.3%)
2,500 Polaroid....................... 121,719
1,200 Time Warner.................... 74,400
----------
196,119
----------
FINANCIAL SERVICES (11.5%)
3,700 Countrywide Credit............. 158,638
1,300 Federal National Mortgage
Association.................. 74,181
2,200 Renaissancere Holdings......... 97,075
5,300 Sabre Group Holding*........... 153,038
2,700 Security Capital Group, Class
B*............................. 87,750
4,400 Security Capital Industrial
Trust*......................... 109,450
----------
680,132
----------
HEALTH CARE PROVIDERS (1.8%)
3,300 Tenet Healthcare*.............. 109,313
----------
HEAVY INDUSTRY (3.5%)
1,400 Caterpillar.................... 67,988
4,000 Lucasvarity.................... 139,500
----------
207,488
----------
INDUSTRIAL (1.8%)
1,400 Armstrong World Industries..... 104,650
----------
LODGING (1.2%)
4,700 Homestead Village Property*.... $ 70,794
----------
METALS (1.2%)
2,700 Allegheny Teledyne............. 69,863
----------
OIL & GAS (2.4%)
2,300 Anadarko Petroleum............. 139,581
----------
REAL ESTATE (1.6%)
2,800 Oakwood Homes.................. 92,925
----------
TELEPHONE SYSTEMS (2.4%)
2,400 Sprint......................... 140,700
----------
TEXTILES, CLOTHING & FABRICS
(3.1%)
9,600 Shaw Industries................ 111,600
1,700 Unifi.......................... 69,169
----------
180,769
----------
TOTAL COMMON STOCKS (COST $3,201,058).....
3,578,436
----------
<CAPTION>
PRINCIPAL
AMOUNT
- --------
<S> <C> <C>
CORPORATE BONDS (14.7%)
BANKING (5.3%)
$ 50,000 Bankers Trust-NY, 7.125%,
03/15/06..................... 51,440
100,000 BB&T, 7.25%, 06/15/07.......... 105,210
100,000 Chase Manhattan, 7.25%,
06/01/07..................... 104,838
358,385 Nykredit, 6.00%, 10/01/26...... 51,005
----------
312,493
----------
BEVERAGES, FOOD & TOBACCO (1.1%)
60,000 Coca-Cola Femsa, 8.95%,
11/01/06..................... 62,583
----------
ELECTRIC UTILITIES (1.6%)
95,000 Financiera Energy, 9.375%,
06/15/06..................... 95,742
----------
FINANCIAL SERVICES (4.1%)
100,000 Bonos Del Tesoro, 8.75%,
05/09/02..................... 94,562
40,000 G.E. Capital Management
Service, 6.50%, 11/25/23..... 36,903
44,500 G.E. Capital Management
Service, 6.50%, 03/25/24..... 43,065
69,000 Paine Webber Group, 7.00%,
03/01/00..................... 69,927
----------
244,457
----------
METALS (1.7%)
100,000 AK Steel, 9.125%, 12/15/06..... 102,500
----------
OIL & GAS (0.9%)
50,000 Petroleos Mexicanos, 8.85%,
09/15/07..................... 49,500
----------
TOTAL CORPORATE BONDS
(COST $861,497)............................ 867,275
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE> 42
BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT
- --------- ----------
<S> <C> <C>
MORTGAGE BACKED SECURITIES (3.2%)
$ 20,000 Federal Home Loan Mortgage
Corporation, 6.00%,
03/15/08..................... $ 19,927
9,359 Federal National Mortgage
Association, 5.00%,
10/25/03..................... 9,317
45,000 Federal National Mortgage
Association, 6.15%,
10/25/07..................... 44,979
3,066 Merrill Lynch Mortgage
Investment, 9.70%,
07/15/10..................... 3,122
23,825 Merrill Lynch Mortgage
Investment, 7.65%,
01/15/12..................... 24,370
40,000 Merrill Lynch Mortgage
Investment, 7.09%,
12/26/25..................... 40,800
50,000 Prudential Home Mortgage
Securities, 6.25%,
04/25/24..................... 45,950
----------
TOTAL MORTGAGE BACKED SECURITIES
(COST $184,190)............................ 188,465
----------
MUNICIPAL BONDS (4.3%)
40,000 Baltimore Community Development
Financing, 8.20%, 08/15/07... 44,000
7,957 Denver Colorado City & County
Single Family, 7.25%,
12/01/10..................... 8,216
20,000 Michigan State Job Development
Authority, 7.10%, 05/01/98... 20,076
15,000 New York City, New York,
General Obligation, 9.75%,
08/05/12..................... 16,238
40,000 New York State Housing Finance
Agency Service, 7.50%,
09/15/03..................... 41,050
50,000 Ohio Housing Financial Agency,
7.90%, 10/01/14.............. 53,188
30,000 Oklahoma City Airport, 9.40%,
11/01/10..................... 33,713
40,000 Oregon State General
Obligation, 6.90%,
01/01/00..................... 40,267
----------
TOTAL MUNICIPAL BONDS
(COST $244,860)............................ 256,748
----------
U.S. TREASURY OBLIGATIONS (13.0%)
$ 95,000 US Treasury Bond, 6.75%,
08/15/26..................... $ 104,618
65,000 US Treasury Note, 6.125%,
08/31/98..................... 65,223
100,000 US Treasury Note, 5.75%,
10/31/00..................... 100,093
50,000 US Treasury Note, 7.00%,
07/15/06..................... 53,984
100,000 US Treasury Bond, 6.25%,
04/30/01..................... 101,563
320,000 US Treasury Note, 7.25%,
08/15/04..................... 345,875
----------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $748,297)............................ 771,356
----------
SOVEREIGN GOVERNMENT OBLIGATIONS (2.9%)
AUSTRALIA (1.7%)
143,000 Treasury Corp of Victoria,
7.50%, 08/15/08................ 99,865
----------
GREAT BRITAIN (1.2%)
37,000 UK Treasury, 8.00%, 12/07/15... 72,047
----------
TOTAL SOVEREIGN GOVERNMENT OBLIGATIONS
(COST $178,474)............................ 171,912
----------
<CAPTION>
UNITS
- --------
<C> <S> <C>
WARRANTS (0.0%)
FINANCIAL SERVICES (0.0%)
361 Security Capital Group......... 1,895
----------
TOTAL INVESTMENTS AT VALUE (98.6%)
(COST $5,418,376)(a)....................... 5,836,087
CASH AND OTHER ASSETS NET OF LIABILITIES
(1.4%)..................................... 286,637
----------
NET ASSETS (100.0%)........................ $6,122,724
==========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
(a) The aggregate identified cost for federal income tax purposes is $5,418,397,
resulting in gross unrealized appreciation and depreciation of $493,644 and
$75,954, respectively, and net unrealized appreciation of $417,690.
BALANCED TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
(REFERENCES ARE
BALANCED BALANCED BALANCED TO PRO FORMA BALANCED
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
---------- ---------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding Select
Advisors Portfolios, at value - $3,198,163 $2,721,538 $(5,919,701) (Note C) -
Investments at Value (Note A) $5,836,087 - - - $5,836,087
Cash and foreign currency - - - - -
Receivables for:
Securities sold 5,105 - - - 5,105
Fund shares sold - 26,119 188 - 26,307
Dividend, interest, and
foreign withholding tax 38,087 - - - 38,087
Gain on forward contracts 5,637 - - - 5,637
Deferred organization expenses 12,382 17,164 16,514 (28,896) (Note D) 17,164
Reimbursement receivable from
Advisor/Sponsor 43,898 121,086 101,399 (25,158) (Notes D,F,G,H,I) 241,225
---------- ---------- ---------- ----------- ----------
Total Assets 5,941,196 3,362,532 2,839,639 (5,973,755) 6,169,612
---------- ---------- ---------- ----------- ----------
LIABILITIES:
Payable for fund shares redeemed - 40 - - 40
Distribution payable from income - - - - -
Payable for investments purchased - - - - -
Due to Custodian 1,479 - - - 1,479
Payable to Advisor (Sponsor) - - - - -
Other accrued expenses 20,016 46,727 32,680 (54,054) (Notes D, F,G,H,I) 45,369
---------- ---------- ---------- ----------- ----------
Total Liabilities 21,495 46,767 32,680 (54,054) 46,888
---------- ---------- ---------- ----------- ----------
NET ASSETS: $5,919,701 $3,315,765 $2,806,959 $(5,919,701) $6,122,724
========== ========== ========== =========== ==========
NET ASSETS CONSIST OF:
Paid-in capital $5,919,701 $3,061,544 $2,576,151 $(5,919,701) (Notes C) $5,637,695
Undistributed Net Income, or
(distributions in excess
of net investment income) - 2,506 1,883 - 4,389
Accumulated net realized gain
(loss) on investments
and foreign currency, or
(distributions in excess of
net realized gains) - 30,260 28,017 - 58,277
Net unrealized appreciation
(depreciation) on
investments, foreign
currency and other assets - 221,455 200,908 - 422,363
---------- ---------- ---------- ----------- ----------
NET ASSETS: $5,919,701 $3,315,765 $2,806,959 $(5,919,701) $6,122,724
========== ========== ========== =========== ==========
Class A - $3,315,765 - - $3,315,765
========== ========== ========== =========== ==========
Class C - - $2,806,959 - $2,806,959
========== ========== ========== =========== ==========
SHARES OUTSTANDING:
Class A - 267,075 - - 267,075
========== ========== ========== =========== ==========
Class C - - 230,973 - 230,973
========== ========== ========== =========== ==========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and redemptions
price per share - $ 12.42 - - $ 12.42
========== ========== ========== =========== ==========
Maximum offering price per share
(based on maximum sales
charge of 5.75%) - $ 13.18 - - $ 13.18
========== ========== ========== =========== ==========
CLASS C SHARES
Net asset value and offering
price per share* - - $ 12.15 - $ 12.15
========== ========== ========== =========== ==========
Note A: Cost of investments 5,418,376 5,418,376
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
BALANCED TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
(REFERENCES ARE
BALANCED BALANCED BALANCED TO PRO FORMA BALANCED
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
---------- --------- --------- --------------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 140,386 $ 72,420 $ 67,966 (140,386) (Note C) $ 140,386
Dividend income 35,733 18,418 17,315 (35,733) (Note C) 35,733
--------- --------- -------- -------- ---------
176,119 90,838 85,281 (176,119) 176,119
--------- --------- -------- -------- ---------
EXPENSES:
Allocated expenses from Hub - 39,102 36,473 (75,575) (Note C) -
Investment Advisory fee 38,823 - - - 38,823
Sponsor fee - 5,310 4,982 - 10,292
Transfer agent - 44,602 33,600 - 78,202
Custody, Fund accounting
and administration 97,151 15,324 15,035 (35,500) (Note F) 92,010
Registration - 12,761 11,117 3,700 (Note G) 27,578
Audit 11,585 11,234 11,234 (3,000) (Note H) 31,053
Amortization of organization
expense 7,052 9,771 9,402 (16,454) (Note D) 9,771
Printing - 9,521 4,478 (2,800) (Note I) 11,199
Legal 1,680 1,146 1,137 - 3,963
Miscellaneous 1,288 1,135 993 - 3,416
Trustee 717 372 356 - 1,445
--------- --------- -------- -------- ---------
Total expenses 158,296 150,278 128,807 (129,629) 307,752
--------- --------- -------- -------- ---------
Less: Waiver of Sponsor fees - (5,310) (4,982) - (10,292)
Reimbursement from
sponsor (82,721) (115,776) (96,417) 54,054 (Notes D, F, G, H, I) (240,860)
--------- --------- -------- -------- ---------
75,575 29,192 27,408 (75,575) 56,600
Distribution and service fees:
Class A shares - 6,637 - - 6,637
Class C shares - - 24,915 - 24,915
--------- --------- -------- -------- ---------
Net Expenses 75,575 35,829 52,323 (75,575) 88,152
--------- --------- -------- -------- ---------
NET INVESTMENT INCOME 100,544 55,009 32,958 (100,544) 87,967
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 965,160 499,632 465,528 (965,160) (Note C) 965,160
Foreign currency transactions - - - - -
--------- --------- -------- -------- ---------
965,160 499,632 465,528 (965,160) 965,160
--------- --------- -------- -------- ---------
Net change in unrealized
appreciation (depreciation)
on:
Investments (175,493) (91,281) (84,212) 175,493 (Note C) (175,493)
Foreign currency transactions - - - - -
--------- --------- -------- -------- ---------
(175,493) (91,281) (84,212) 175,493 (175,493)
--------- --------- -------- -------- ---------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ 890,211 $ 463,360 $414,274 $(890,211) $ 877,634
========= ========= ======== ========= =========
Note A: Net of foreign
withholding tax of: - - - - -
--------- --------- -------- -------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
INCOME OPPORTUNITY PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT
- ---------- -----------
<C> <S> <C>
CORPORATE BONDS (34.8%)
BEVERAGES, FOOD & TOBACCO
(2.8%)
$ 300,000 Specialty Foods, 11.125%,
10/01/02.................. $ 303,750
-----------
CASINOS (1.8%)
200,000 Trump Atlantic City, 11.25%,
05/01/06.................. 195,000
-----------
CHEMICALS (7.2%)
$ 200,000 Climachem, 10.75%,
12/01/07.................. $ 206,000
300,000 Panoceanic Bulk, 12.00%,
12/15/07.................. 295,500
250,000 Perry-Judd, 10.625%,
12/15/07.................. 260,000
-----------
761,500
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE> 43
INCOME OPPORTUNITY PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- -----------
<S> <C> <C>
CORPORATE BONDS--CONTINUED
COMPUTER SOFTWARE &
PROCESSING (1.9%)
$ 200,000 Details, 10.00%, 11/15/05... $ 204,500
-----------
ELECTRONICS (1.9%)
200,000 High Voltage Engineering,
10.50%, 08/15/04.......... 207,500
-----------
ENTERTAINMENT & LEISURE
(2.2%)
250,000 Pen-Tab Industries, 10.875%,
02/01/07.................. 240,000
-----------
FOREST PRODUCTS & PAPER
(2.4%)
250,000 Riverwood International,
10.625%, 08/01/07......... 253,750
-----------
HEAVY INDUSTRY (2.3%)
250,000 United Auto Group, 11.00%,
07/15/07.................. 246,250
-----------
INDUSTRIAL (3.8%)
200,000 Iowa Select Farms, 10.75%,
12/01/05.................. 205,250
200,000 Werner Holdings, 10.00%,
11/15/07.................. 205,000
-----------
410,250
-----------
OIL & GAS (2.4%)
250,000 Panaco, 10,625%, 10/01/04... 252,500
-----------
TELEPHONE SYSTEMS (6.1%)
200,000 Hyperion Telecom, 12.25%,
09/01/04.................. 221,000
200,000 Iridium LLC/Capital, 14.00%,
07/15/05.................. 217,000
200,000 Primus Telecommunications,
11.75%, 08/01/04.......... 215,000
-----------
653,000
-----------
TOTAL CORPORATE BONDS (COST
$3,653,486).............................. 3,728,000
-----------
EUROBONDS (23.3%)
BRAZIL (3.4%)
400,000 Paging Network De Brazil,
13.50%, 06/06/05.......... 364,000
-----------
ECUADOR (4.3%)
100,000 Conecel Holdings, 14.00%,
10/01/00.................. 100,000
350,000 Conecel, 14.00%, 05/01/02... 353,500
-----------
453,500
-----------
GREAT BRITAIN (1.9%)
200,000 Dialog, 11.00%, 11/15/07.... 207,500
-----------
HONG KONG (4.1%)
500,000 GS Superhighway Holdings,
10.25%, 08/15/07.......... 435,000
-----------
INDIA (2.5%)
500,000 Nippon Denro Ispat, 3.00%,
04/01/01.................. 270,000
-----------
NETHERLANDS (5.9%)
$ 500,000 DGS International Finance,
10.00%, 06/01/07.......... $ 425,000
250,000 Indah Kiat Fin Mauritius,
10.00%, 07/01/07.......... 210,000
-----------
635,000
-----------
THAILAND (1.2%)
1,250,000 NTS Steel Group Public,
4.00%, 12/16/08........... 125,000
-----------
TOTAL EUROBONDS (COST $3,052,308)........ 2,490,000
-----------
SOVEREIGN GOVERNMENT OBLIGATIONS (5.6%)
RUSSIA (1.4%)
250,000 Russia-Principal Loan (b),
6.719%, 12/15/20.......... 154,700
-----------
VENEZUELA (4.2%)
500,500 Republic of Venezuela,
9.25%, 09/15/27........... 449,449
-----------
TOTAL SOVEREIGN GOVERNMENT OBLIGATIONS
(COST $609,363).......................... 604,149
-----------
YANKEE BONDS (20.2%)
BRAZIL (6.5%)
350,000 Tevecap, 12.63%, 11/26/04... 321,125
400,000 TV Filme, 12.88%,
12/15/04.................. 373,952
-----------
695,077
-----------
INDONESIA (3.5%)
500,000 FSW International, 12.50%,
11/01/06.................. 380,000
-----------
MEXICO (10.2%)
850,000 Grupo Televisa (Zero Coupon
until 05/15/01, 13.25%
thereafter), 05/15/08
(c)....................... 636,479
200,000 Innova S. de R.L., 12.88%,
04/01/07.................. 202,000
250,000 Transport Maritma, 10.00%,
11/15/06.................. 250,313
-----------
1,088,792
-----------
TOTAL YANKEE BONDS (COST $2,298,205)..... 2,163,869
-----------
BRADY BONDS (12.2%)
BULGARIA (5.3%)
350,000 Government of Bulgaria, IAB
(d), 6.69%, 07/28/11...... 256,375
400,000 Government of Bulgaria (d),
6.69%, 07/28/24........... 308,000
-----------
564,375
-----------
ECUADOR (5.2%)
750,000 Republic of Ecuador (d),
3.50%, 02/28/25........... 409,650
188,000 Republic of Ecuador (d),
6.69%, 02/28/25........... 141,714
-----------
551,364
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE> 44
INCOME OPPORTUNITY PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- -----------
<S> <C> <C>
BRADY BONDS--CONTINUED
PERU (1.7%)
$ 300,000 Government of Peru, FLIRB,
3.25%, 03/07/17........... $ 178,140
-----------
TOTAL BRADY BONDS(COST $1,130,066)....... 1,293,879
-----------
<CAPTION>
UNITS
- ----------
<C> <S> <C>
WARRANTS (0.0%)
TELEPHONE SYSTEMS (0.0%)
200 Primus Telecommunications... 2,000
-----------
TOTAL INVESTMENTS AT VALUE (96.1%)
(COST $10,743,428)(a).................... 10,281,897
CASH AND OTHER ASSETS NET OF LIABILITIES
(3.9%)................................... 550,803
-----------
NET ASSETS (100.0%)...................... $10,832,700
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
(a) The aggregate identified cost for federal income tax purposes is
$10,743,428, resulting in gross unrealized appreciation and depreciation of
$339,291 and $800,822, respectively, and net unrealized depreciation of
$(461,531).
(b) A percentage of income is received as additional shares of securities.
(c) Zero or step coupon bond.
(d) Interest rate shown reflects current rate on instrument with variable or
floating rates
ADR - American Depositary Receipt
FLIRB - Front-Load Interest Reduction Bonds
IAB - Interest Arrears Bond
INCOME OPPORTUNITY TRUST A, TRUST C
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
INCOME INCOME INCOME (REFERENCES ARE INCOME
OPPORTUNITY OPPORTUNITY OPPORTUNITY TO PRO FORMA OPPORTUNITY
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
----------- ----------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding Select
Advisors Portfolios, at value - $6,892,170 $3,805,244 $(10,697,414) (Note C) -
Investments at Value (Note A) $10,281,897 - - - $10,281,897
Cash and foreign currency 252,952 - - - 252,952
Receivables for:
Securities sold - - - - -
Fund shares sold - 78,066 6,669 - 84,735
Dividend, interest, and
foreign withholding tax 322,131 - - - 322,131
Gain on forward contracts - - - - -
Deferred organization expenses 12,382 17,164 16,514 (28,896) (Note D) 17,164
Reimbursement receivable from
Advisor/Sponsor - 77,719 35,940 (29,000) (Notes D, E,F,G,H,I) 84,659
----------- ---------- ---------- ------------ -----------
Total Assets 10,869,362 7,065,119 3,864,367 (10,755,310) 11,043,538
----------- ---------- ---------- ------------ -----------
LIABILITIES:
Payable for fund shares redeemed - 800 - - 800
Distribution payable from income - - - - -
Payable for investments purchased 141,946 - - - 141,946
Due to Custodian - - - - -
Payable to Advisor (Sponsor) 3,742 - - (3,742) (Note E) -
Other accrued expenses 26,260 55,453 40,533 (54,154) (Notes D, F,G,H,I) 68,092
----------- ---------- ---------- ------------ -----------
Total Liabilities 171,948 56,253 40,533 (57,896) 210,838
----------- ---------- ---------- ------------ -----------
NET ASSETS: $10,697,414 $7,008,866 $3,823,834 $(10,697,414) $10,832,700
=========== ========== ========== ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital $10,697,414 $7,537,857 $4,089,891 $(10,697,414) (Notes C) $11,627,748
Undistributed Net Income, or
(distributions in excess
of net investment income) - 5,651 2,805 - 8,456
Accumulated net realized gain
(loss) on investments
and foreign currency, or
(distributions in excess of
net realized gains) - (235,330) (106,419) - (341,749)
Net unrealized appreciation
(depreciation) on
investments, foreign
currency and other assets - (299,312) (162,443) - (461,755)
----------- ---------- ---------- ------------ -----------
NET ASSETS: $10,697,414 $7,008,866 $3,823,834 $(10,697,414) $10,832,700
=========== ========== ========== ============ ===========
Class A - $7,008,866 - - $ 7,008,866
=========== ========== ========== ============ ===========
Class C - - $3,823,834 - $ 3,823,834
=========== ========== ========== ============ ===========
SHARES OUTSTANDING:
Class A - 709,018 - - 709,018
=========== ========== ========== ============ ===========
Class C - - 395,636 - 395,636
=========== ========== ========== ============ ===========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and redemptions
price per share - $ 9.89 - - $ 9.89
=========== ========== ========== ============ ===========
Maximum offering price per share
(based on maximum sales
charge of 4.75%) - $ 10.38 - - $ 10.38
=========== ========== ========== ============ ===========
CLASS C SHARES
Net asset value and offering
price per share* - - $ 9.67 - $ 9.67
=========== ========== ========== ============ ===========
Note A: Cost of investments 10,743,428 10,743,428
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
INCOME OPPORTUNITY TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
INCOME INCOME INCOME (REFERENCES ARE INCOME
OPPORTUNITY OPPORTUNITY OPPORTUNITY TO PRO FORMA OPPORTUNITY
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
----------- ----------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $1,287,743 $ 865,310 $ 422,433 (1,287,743) (Note C) $1,287,743
Dividend income - - - - (Note C) -
---------- --------- --------- ---------- ----------
1,287,743 865,310 422,433 (1,287,743) 1,287,743
---------- --------- --------- ---------- ----------
EXPENSES:
Allocated expenses from Hub - 89,083 43,716 (132,799) (Note C) -
Investment Advisory fee 66,313 - - - 66,313
Sponsor fee - 13,962 6,756 - 20,718
Transfer agent - 56,099 37,485 - 93,584
Custody, Fund accounting and
administration 95,319 15,399 15,315 (35,500) (Note F) 90,533
Registration - 14,111 11,697 3,400 (Note G) 29,208
Audit 18,587 12,654 12,654 (3,000) (Note H) 40,895
Amortization of organization
expense 7,052 9,771 9,402 (16,454) (Note D) 9,771
Printing - 5,668 7,113 (2,600) (Note I) 10,181
Legal 3,468 2,683 1,381 7,532
Miscellaneous 3,172 4,190 1,862 - 9,224
Trustee 1,459 994 485 - 2,938
---------- --------- --------- ---------- ----------
Total expenses 195,370 224,614 147,866 (186,953) 380,897
---------- --------- --------- ---------- ----------
Less: Waiver of Sponsor fees - (13,962) (6,756) - (20,718)
Reimbursement from
sponsor (62,571) (144,009) (109,436) 54,154 (Notes D, F, G, H, I) (261,862)
---------- --------- --------- ---------- ----------
132,799 66,643 31,674 (132,799) 98,317
Distribution and service fees:
Class A shares - 17,453 - - 17,453
Class C shares - - 33,780 - 33,780
Class Y shares - - - - -
---------- --------- --------- ---------- ----------
Net Expenses 132,799 84,096 65,454 (132,799) 149,550
---------- --------- --------- ---------- ----------
NET INVESTMENT INCOME 1,154,944 781,214 356,979 (1,154,944) 1,138,193
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 410,064 241,119 168,945 (410,064) (Note C) 410,064
Foreign currency transactions - - - - -
---------- --------- --------- ---------- ----------
410,064 241,119 168,945 (410,064) 410,064
---------- --------- --------- ---------- ----------
Net change in unrealized
appreciation (depreciation)
on:
Investments (742,747) (458,957) (283,790) 742,747 (Note C) (742,747)
Foreign currency transactions - - - - -
---------- --------- --------- ---------- ----------
(742,747) (458,957) (283,790) 742,747 (742,747)
---------- --------- --------- ---------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ 822,261 $ 563,376 $ 242,134 $ (822,261) $ 805,510
========== ========= ========= =========== ==========
Note A: Net of foreign
withholding tax of: - - - - -
---------- --------- --------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- -----------
<S> <C> <C>
ASSET BACKED SECURITIES (11.6%)
$ 500,000 World Omni Auto Lease,
6.18%, 11/25/03........... $ 500,115
196,111 Chase Manhattan Grantor
Trust, 5.20%, 02/15/02.... 194,652
750,000 Chemical Credit Card Master
Trust, 5.98%, 09/15/08.... 738,735
332,679 Navistar Financial, 6.35%,
11/15/02.................. 333,757
-----------
TOTAL ASSET BACKED SECURITIES (COST
$1,724,961).............................. 1,767,259
-----------
CORPORATE BONDS (34.7%)
BANKING (8.6%)
400,000 Associates Corporation of
North America, 7.88%,
09/30/01.................. 421,692
500,000 Bank of New York, 8.50%,
12/15/04.................. 557,869
225,000 Credit Suisse-London, 7.90%,
05/01/07.................. 237,398
85,875 Mercantile Safe Deposit+,
12.12%, 01/02/01.......... 90,960
-----------
1,307,919
-----------
BEVERAGES, FOOD & TOBACCO
(3.4%)
500,000 Rykoff Sexton, 8.875%,
11/01/03.................. 516,250
-----------
COMMERCIAL SERVICES (4.9%)
500,000 MCN Financing, 6.30%,
06/01/37.................. 500,000
250,000 Mississippi Power & Light,
8.80%, 04/01/05........... 251,078
-----------
751,078
-----------
COMMUNICATIONS (3.4%)
$ 500,000 Harris Corporation, 6.65%,
08/01/06.................. $ 511,561
-----------
ELECTRIC UTILITIES (1.6%)
250,000 AES, 8.50%, 11/01/07........ 250,000
-----------
FINANCIAL SERVICES (2.3%)
350,000 First Union, 6.55%,
10/15/35.................. 352,706
-----------
FOREST PRODUCTS & PAPER
(3.5%)
250,000 Georgia Pacific, 9.50%,
05/15/22*................. 284,201
250,000 Sweetheart Cup, 9.63%,
09/01/00.................. 246,250
-----------
530,451
INSURANCE (1.7%)
250,000 Travelers Capital, 7.75%,
12/01/36.................. 259,128
-----------
MEDIA--BROADCASTING &
PUBLISHING (5.3%)
250,000 News America Holdings,
10.13%, 10/15/12.......... 295,675
500,000 Viacom, 7.75%, 06/01/05..... 510,091
-----------
805,766
-----------
TOTAL CORPORATE BONDS (COST
$5,089,592).............................. 5,284,859
-----------
CONVERTIBLE CORPORATE BONDS
(COST $427,109) (2.9%)
MEDIA--BROADCASTING &
PUBLISHING (2.9%)
500,000 Scholastic, 5.00%,
08/15/05.................. 438,125
-----------
MORTGAGE BACKED SECURITIES (18.7%)
586,463 Federal Home Loan Mortgage
Association, 6.00%,
08/01/10.................. 577,800
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE> 45
BOND PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT
- ---------- -----------
<C> <S> <C>
MORTGAGE BACKED SECURITIES--CONTINUED
$ 50,200 Federal Home Loan Mortgage
Association, 6.00%,
10/01/10.................. $ 49,459
173,068 Federal Home Loan Mortgage
Association, 6.00%,
05/01/09.................. 171,125
125,000 Government National Mortgage
Association, 7.50%,
12/15/27.................. 128,008
423,529 Government National Mortgage
Association, 9.00%,
08/15/19.................. 461,345
398,937 Government National Mortgage
Association, 6.50%,
01/15/24.................. 395,673
493,189 Government National Mortgage
Association, 7.00%,
06/15/09.................. 502,875
63,268 Government National Mortgage
Association, 10.25%,
07/15/12.................. 63,268
500,000 Advanta Mortgage Loan Trust,
6.03%, 08/25/11........... 497,350
-----------
TOTAL MORTGAGE BACKED SECURITIES (COST
$2,774,651).............................. 2,846,903
-----------
U.S. GOVERNMENT & AGENCY OBLIGATIONS
(11.9%)
$ 750,000 US Treasury Note, 6.125%,
08/15/07.................. $ 770,859
250,000 US Treasury Note, 6.50%,
05/31/02.................. 257,344
750,000 US Treasury Note, 6.375%,
08/15/27.................. 790,781
-----------
TOTAL U.S. GOVERNMENT & AGENCY
OBLIGATIONS (COST $1,802,285)............ 1,818,984
-----------
YANKEE BONDS (6.8%)
CANADA (4.2%)
600,000 Province of Quebec, 7.50%,
07/15/23.................. 646,944
-----------
KOREA (2.6%)
500,000 Pohang Iron & Steel, 7.50%,
08/01/02.................. 397,006
-----------
TOTAL YANKEE BONDS (COST $1,096,134)..... 1,043,950
-----------
AGENCY FOR INTERNATIONAL DEVELOPMENT
BONDS (5.0%)+
CENTRAL AMERICA (3.2%)
$ 140,000 Central America
International Development,
Series F, 10.00%,
12/01/11.................. $ 164,068
140,000 Central America
International Development,
Series G, 10.00%,
12/01/11.................. 164,068
140,000 Central America
International Development,
Series H, 10.00%,
12/01/11.................. 164,068
-----------
492,204
-----------
HONDURAS (1.8%)
100,000 Republic of Honduras
International Development,
Series, 13.00%,
06/01/11.................. 145,729
100,000 Republic of Honduras
International Development,
Series, 13.00%,
06/01/06.................. 130,265
-----------
275,994
-----------
TOTAL AGENCY FOR INTERNATIONAL
DEVELOPMENT BONDS (COST $620,000)........ 768,198
-----------
PREFERRED STOCKS (6.3%)
INDUSTRIAL (2.9%)
9,600 Appalachian Power........... 247,200
7,500 Ohio Power.................. 192,188
-----------
439,388
-----------
OIL & GAS (3.4%)
20,000 Transcanada Pipelines....... 527,500
-----------
TOTAL PREFERRED STOCKS
(COST $953,164).......................... 966,888
-----------
TOTAL INVESTMENTS AT VALUE (97.9%) (COST
$14,487,896)(a).......................... 14,935,166
CASH AND OTHER ASSETS NET OF LIABILITIES
(2.1%)................................... 456,686
-----------
NET ASSETS (100.0%)...................... $15,391,852
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
+ Restricted and Board valued security (Note 5).
(a) The aggregate identified cost for federal income tax purposes is
$14,487,896, resulting in gross unrealized appreciation and depreciation of
$571,804 and $124,534, respectively, and net unrealized
appreciation of $447,270.
BOND TRUST A, TRUST C & SEPARATE A
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
(REFERENCES ARE
BOND BOND BOND BOND TO PRO FORMA BOND
PORTFOLIO TRUST A TRUST C SEPARATE A FOOTNOTES) PRO FORMA
----------- ---------- -------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding
Select Advisors
Portfolios, at value - $1,572,246 $664,636 $13,025,713 $(15,262,595) (Note C) -
Investments at Value (Note A) $14,935,166 - - - - $14,935,166
Cash and foreign currency 124,517 - - - - 124,517
Receivables for:
Securities sold - - - - - -
Fund shares sold - 29,031 214 - - 29,245
Dividend, interest, and
foreign withholding tax 209,255 - - - - 209,255
Gain on forward contracts - - - - - -
Deferred organization expenses 12,382 17,164 16,514 - (28,896) (Note D) 17,164
Reimbursement receivable from
Advisor/Sponsor 13,998 106,691 83,294 - (9,558) (Notes D, F,G,H,I) 194,425
----------- ---------- -------- ----------- ------------ -----------
Total Assets 15,295,318 1,725,132 764,658 13,025,713 (15,301,049) 15,509,772
----------- ---------- -------- ----------- ------------ -----------
LIABILITIES:
Payable for fund shares
redeemed - - - - - -
Distribution payable from
income - - - - - -
Payable for investments
purchased - - - - - -
Due to Custodian - - - - - -
Payable to Advisor (Sponsor) - - - - - -
Other accrued expenses 32,723 40,510 25,392 57,749 (38,454) (Notes D, F,G,H,I) 117,920
----------- ---------- -------- ----------- ------------ -----------
Total Liabilities 32,723 40,510 25,392 57,749 (38,454) 117,920
----------- ---------- -------- ----------- ------------ -----------
NET ASSETS: $15,262,595 $1,684,622 $739,266 $12,967,964 $(15,262,595) $15,391,852
=========== ========== ======== =========== ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital $15,262,595 $1,654,030 $725,896 $10,000,000 $(15,262,595) (Notes C) $12,379,926
Undistributed Net Income, or
(distributions in excess
of net investment income) - 1,097 1,215 2,345,841 - 2,348,153
Accumulated net realized gain
(loss) on investments
and foreign currency, or
(distributions in excess of
net realized gains) - (2,317) (973) 238,871 - 235,581
Net unrealized appreciation
(depreciation) on
investments, foreign
currency and other assets - 31,812 13,128 383,252 - 428,192
----------- ---------- -------- ----------- ------------ -----------
NET ASSETS: $15,262,595 $1,684,622 $739,266 $12,967,964 $(15,262,595) $15,391,852
=========== ========== ======== =========== ============ ===========
Class A - $1,684,622 - - - $ 1,684,622
=========== ========== ======== =========== ============ ===========
Class C - - $739,266 - - $ 739,266
=========== ========== ======== =========== ============ ===========
Class Y - - - $12,967,964 - $12,967,964
=========== ========== ======== =========== ============ ===========
SHARES OUTSTANDING:
Class A - 164,839 - - - 164,839
=========== ========== ======== =========== ============ ===========
Class C - - 73,508 - - 73,508
=========== ========== ======== =========== ============ ===========
Class Y - - - 1,000,000 - 1,000,000
=========== ========== ======== =========== ============ ===========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and
redemptions price per
share - $ 10.22 - - - $ 10.22
=========== ========== ======== =========== ============ ===========
Maximum offering price per
share (based on maximum
sales charge of 4.75%) - $ 10.73 - - - $ 10.73
=========== ========== ======== =========== ============ ===========
CLASS C SHARES
Net asset value and offering
price per share* - - $ 10.06 - - $ 10.06
=========== ========== ======== =========== ============ ===========
CLASS Y SHARES
Net asset value and offering
price per share - - - $ 12.97 - $ 12.97
=========== ========== ======== =========== ============ ===========
Note A: Cost of investments 14,487,896 14,487,896
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
BOND TRUST A, TRUST C & SEPARATE A
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
(REFERENCES ARE
BOND BOND BOND BOND TO PRO FORMA BOND
PORTFOLIO TRUST A TRUST C SEPARATE A FOOTNOTES) PRO FORMA
---------- --------- -------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $1,041,039 $ 127,545 $ 49,676 $863,814 (1,041,035) (Note C) $1,041,039
Dividend income 45,218 5,587 2,098 37,534 (45,219) (Note C) 45,218
---------- --------- -------- -------- ----------- ----------
1,086,257 133,132 51,774 901,348 (1,086,254) 1,086,257
---------- --------- -------- -------- ----------- ----------
EXPENSES:
Allocated expenses from Hub - 15,778 6,105 106,322 (128,205) (Note C) -
Investment Advisory fee 82,976 - - - - 82,976
Sponsor fee - 3,811 1,525 - - 5,336
Transfer agent - 49,324 30,886 - - 80,210
Custody, Fund accounting and
administration 104,717 16,836 16,834 - (29,500) (Note F) 108,887
Registration - 10,717 11,853 - 11,200 (Note G) 33,770
Audit 5,839 12,323 11,783 - (3,000) (Note H) 26,945
Amortization of organization
expense 7,052 9,771 9,402 - (16,454) (Note D) 9,771
Printing - (2,098) (1,285) - (700) (Note I) (4,083)
Legal 5,410 906 566 - - 6,882
Miscellaneous 16,985 1,393 475 - - 18,853
Trustee 2,229 303 116 - - 2,648
---------- --------- -------- -------- ----------- ----------
Total expenses 225,208 119,064 88,260 106,322 (166,659) 372,195
---------- --------- -------- -------- ----------- ----------
Less: Waiver of Sponsor fees - (3,811) (1,525) - - (5,336)
Reimbursement
from sponsor (96,974) (102,880) (81,769) - 38,454 (Notes D, F, G, H, I) (243,169)
---------- --------- -------- -------- ----------- ----------
128,234 12,373 4,966 106,322 (128,205) 123,690
Distribution and service
fees:
Class A shares - 4,764 - - - 4,764
Class C shares - - 7,641 - - 7,641
Class Y shares - - - - - -
---------- --------- -------- -------- ----------- ----------
Net Expenses 128,234 17,137 12,607 106,322 (128,205) 136,095
---------- --------- -------- -------- ----------- ----------
NET INVESTMENT INCOME 958,023 115,995 39,167 795,026 (958,049) 950,162
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 81,483 2,874 1,853 76,756 (81,483) (Note C) 81,483
Foreign currency
transactions - - - - - -
---------- --------- -------- -------- ----------- ----------
81,483 2,874 1,853 76,756 (81,483) 81,483
---------- --------- -------- -------- ----------- ----------
Net change in unrealized
appreciation (depreciation)
on:
Investments 96,828 28,320 8,153 60,355 (96,828) (Note C) 96,828
Foreign currency
transactions - - - - - -
---------- --------- -------- -------- ----------- ----------
96,828 28,320 8,153 60,355 (96,828) 96,828
---------- --------- -------- -------- ----------- ----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS $1,136,334 $ 147,189 $ 49,173 $932,137 $(1,136,360) $1,128,473
========== ========= ======== ======== =========== ==========
Note A: Net of foreign
withholding tax of: - - - - - -
---------- --------- -------- -------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE> 46
EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS--94.8%
AUTOMOTIVE--2.1%
3,200 Bandag, Class A............. $ 110,400
7,900 Exide....................... 132,819
-----------
243,219
-----------
BANKING--3.6%
2,900 Bank United, Class A........ 138,838
3,400 Dime Bancorp................ 101,788
6,300 Golden State Bancorp........ 187,425
-----------
428,051
-----------
BEVERAGES, FOOD &
TOBACCO--1.9%
9,200 DiMon....................... 103,500
6,500 Ralcorp Holdings............ 122,688
-----------
226,188
-----------
BUILDING MATERIALS--3.5%
6,700 Calmat...................... 147,400
13,400 Dal-Tile International...... 131,488
3,000 Martin Marietta Materials... 135,000
-----------
413,888
-----------
CHEMICALS--1.5%
11,300 Calgon Carbon............... 112,294
2,500 Standard Products........... 70,313
-----------
182,607
-----------
COMMERCIAL SERVICES--9.7%
11,100 Acsys....................... 152,625
3,000 Administaff*................ 138,375
5,000 Advance Paradigm............ 183,750
6,400 A.C. Nielson*............... 161,600
5,800 ITT Educational Services.... 187,050
5,000 Stewart Enterprises......... 133,125
3,900 Unova....................... 83,850
4,800 Wallace Computer Services... 114,000
-----------
1,154,375
-----------
COMMUNICATIONS--1.0%
3,000 Geotel Communications*...... 122,250
-----------
COMPUTER SOFTWARE &
PROCESSING--13.4%
3,200 Cambridge Technology
Partners*................... 174,800
11,500 Carreker-Antinori........... 120,750
2,700 CBT Group, ADR.............. 144,450
7,000 Devry....................... 153,563
4,500 HNC Software*............... 183,649
3,500 Keane*...................... 196,000
3,600 Policy Management System*... 141,300
12,000 PSW Technologies*........... 69,000
9,000 Remedy...................... 153,000
3,500 Transaction Systems
Architects, Series A*....... 134,750
3,300 Wind River Systems*......... 118,388
-----------
1,589,650
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMPUTERS & INFORMATION--6.8%
3,300 EMC Corporation............. $ 147,881
5,600 Gerber Scientific........... 127,400
15,700 Intergraph*................. 134,431
3,000 Saville Systems, ADR*....... 150,375
10,800 Scitex...................... 141,075
2,016 Sterling Commerce........... 97,776
-----------
798,938
-----------
ELECTRONICS--6.1%
3,500 Advanced Lighting
Technologies................ 81,375
11,000 Aeroflex.................... 114,125
9,300 Commscope................... 150,544
7,400 Magnetek.................... 116,550
3,400 Maxwell Technologies........ 79,050
8,500 Sipex....................... 182,750
-----------
724,394
-----------
ENTERTAINMENT & LEISURE--2.6%
8,800 Cinar Films, Class B........ 171,600
2,900 SFX Entertainment, Class
A........................... 133,038
-----------
304,638
-----------
FINANCIAL SERVICES--2.0%
8,300 Life USA Holdings........... 107,381
5,000 T&W Financial............... 125,625
-----------
233,006
-----------
FOREST PRODUCTS & PAPER--1.1%
11,900 Unisource Worldwide......... 128,669
-----------
HEAVY INDUSTRY--0.8%
4,000 Flowserve................... 98,500
-----------
HOME CONSTRUCTION,
FURNISHINGS &
APPLIANCES--1.8%
3,300 Herman Miller............... 80,231
2,300 LA-Z-Boy Chair.............. 129,950
-----------
210,181
-----------
INDUSTRIAL--5.3%
5,000 CN Bioscience*.............. 125,000
7,000 Comfort Systems*............ 163,625
4,700 Foster Wheeler.............. 100,756
4,350 General Cable............... 125,606
5,000 Wesley Jessen Visioncare*... 115,625
-----------
630,612
-----------
INSURANCE--3.2%
5,900 ARM Financial Group,
Class A..................... 130,538
4,100 HCC Insurance Holdings...... 90,200
3,000 HSB Group................... 160,500
-----------
381,238
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE> 47
EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
MEDIA--BROADCASTING &
PUBLISHING--6.9%
5,400 American Tower Systems,
Class A..................... $ 134,663
1,700 Central Newspapers, Class
A........................... 118,575
5,200 Gartner Group, Class A...... 182,000
5,300 Gibson Greetings............ 132,500
8,000 Hollinger International..... 136,000
3,600 Lee Enterprises............. 110,250
-----------
813,988
-----------
MEDICAL--0.7%
4,800 Atria Communities*.......... 82,800
-----------
MEDICAL SUPPLIES--3.1%
3,900 EG&G........................ 117,000
5,600 Elsag Bailey*............... 134,750
5,000 OEC Medical Systems......... 112,500
-----------
364,250
-----------
METALS--0.9%
2,200 Harsco...................... 100,788
-----------
OIL & GAS--1.9%
4,000 Equitable Resources......... 122,000
5,000 Nabors Industries*.......... 99,063
-----------
221,063
-----------
PHARMACEUTICALS--0.7%
5,300 Jean Coutu Group, Class A... 81,993
-----------
RESTAURANTS--1.2%
6,100 The Cheesecake Factory...... 138,013
-----------
RETAILERS--4.2%
19,800 Charming Shoppes*........... 94,050
6,700 Coldwater Creek............. 184,250
3,900 Enesco Group................ 119,925
3,000 Zale*....................... 95,438
-----------
493,663
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
TELEPHONE SYSTEMS--0.6%
6,000 Startec Global
Communication............... $ 69,000
-----------
TEXTILES, CLOTHING &
FABRICS--2.5%
4,422 Albany International........ 105,852
12,200 Stride Rite................. 183,763
-----------
289,615
-----------
TRANSPORTATION--5.7%
10,500 Fritz Companies*............ 140,438
7,700 Halter Marine Group......... 115,981
3,000 JB Hunt Transportation
Services.................... 106,875
3,800 Knightsbridge Tankers....... 101,650
4,500 Newport News Shipbuilding... 120,375
4,500 Yellow...................... 83,531
-----------
668,850
-----------
TOTAL COMMON STOCKS (COST $9,944,204)....
11,194,427
-----------
WARRANTS--0.3%
BANKING--0.3%
6,300 Golden State Bancorp........ 33,469
-----------
TOTAL WARRANTS (COST $0)................. 33,469
-----------
TOTAL INVESTMENTS AT VALUE--95.1% (COST
$9,944,204)(a)........................... 11,227,896
-----------
CASH AND OTHER ASSETS NET OF
LIABILITIES--4.9%........................ 897,323
-----------
NET ASSETS--100.0%....................... $12,125,219
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
(a) The aggregate identified cost for federal income tax purposes is $9,944,204,
resulting in gross unrealized appreciation and depreciation of $1,897,607
and $613,915, respectively, and net unrealized appreciation of $1,283,692.
ADR - American Depositary Receipt
EMERGING GROWTH TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
EMERGING EMERGING EMERGING (REFERENCES ARE
GROWTH GROWTH GROWTH TO PRO FORMA EMERGING GROWTH
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
----------- ----------- ---------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding
Select Advisors
Portfolios, at value - $8,670,864 $3,139,249 $(11,810,113) (Note C) -
Investments at Value (Note A) $11,227,896 - - - $11,227,896
Cash and foreign currency 432,852 - - - 432,852
Receivables for:
Securities sold 185,107 - - - 185,107
Fund shares sold - 3,343 586 - 3,929
Dividend, interest, and
foreign withholding
tax 8,397 - - - 8,397
Gain on forward
contracts - - - - -
Deferred organization
expenses 8,885 12,319 11,852 (20,737) (Note D) 12,319
Reimbursement receivable
from Advisor/Sponsor 30,123 174,872 148,090 (6,472) (Notes D,F,G,H,I) 346,613
----------- ---------- ---------- ------------ -----------
Total Assets 11,893,260 8,861,398 3,299,777 (11,837,322) 12,217,113
----------- ---------- ---------- ------------ -----------
LIABILITIES:
Payable for fund shares
redeemed - 2,410 - - 2,410
Distribution payable from
income - - - - -
Payable for investments
purchased 56,033 - - - 56,033
Due to Custodian - - - - -
Payable to Advisor (Sponsor) - - - - -
Other accrued expenses 27,114 16,891 16,655 (27,209) (Notes D, F,G,H,I) 33,451
----------- ---------- ---------- ------------ -----------
Total Liabilities 83,147 19,301 16,655 (27,209) 91,894
----------- ---------- ---------- ------------ -----------
NET ASSETS: $11,810,113 $8,842,097 $3,283,122 $(11,810,113) $12,125,219
=========== ========== ========== ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital $11,810,113 $7,646,983 $2,576,725 $(11,810,113) (Notes C) $10,223,708
Undistributed Net Income, or
(distributions in excess
of net investment income) - (11,441) (17,689) - (29,130)
Accumulated net realized gain
(loss) on investments
and foreign currency, or
(distributions in excess
of net realized gains) - 424,025 222,923 - 646,948
Net unrealized appreciation
(depreciation) on
investments, foreign
currency and other assets - 782,530 501,163 - 1,283,693
----------- ---------- ---------- ------------ -----------
NET ASSETS: $11,810,113 $8,842,097 $3,283,122 $(11,810,113) $12,125,219
=========== ========== ========== ============ ===========
Class A - $8,842,097 - - $ 8,842,097
=========== ========== ========== ============ ===========
Class C - - $3,283,122 - $ 3,283,122
=========== ========== ========== ============ ===========
SHARES OUTSTANDING:
Class A - 607,434 - - 607,434
=========== ========== ========== ============ ===========
Class C - - 221,963 - 221,963
=========== ========== ========== ============ ===========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and
redemptions price per
share - $ 14.56 - - $ 14.56
=========== ========== ========== ============ ===========
Maximum offering price per
share (based on maximum
sales charge of 5.75%) - $ 15.45 - - $ 15.45
=========== ========== ========== ============ ===========
CLASS C SHARES
Net asset value and
offering price per share* - - $ 14.79 - $ 14.79
=========== ========== ========== ============ ===========
Note A: Cost of investments 9,944,204 9,944,204
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
EMERGING GROWTH TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
EMERGING EMERGING EMERGING (REFERENCES ARE EMERGING
GROWTH GROWTH GROWTH TO PRO FORMA GROWTH
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
---------- --------- -------- --------------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 14,560 $ 10,091 $ 4,469 (14,560) (Note C) $ 14,560
Dividend income 37,912 25,796 12,116 (37,912) (Note C) 37,912
--------- --------- -------- --------- ---------
52,472 35,887 16,585 (52,472) 52,472
--------- --------- -------- --------- ---------
EXPENSES:
Allocated expenses from Hub - 44,748 21,177 (65,925) (Note C) -
Investment Advisory fee 36,373 - - - 36,373
Sponsor fee - 6,310 3,047 - 9,357
Transfer agent - 20,060 16,276 - 36,336
Custody, Fund accounting and
administration 44,383 12,397 12,397 (17,750) (Note F) 51,427
Registration - 8,644 6,956 1,600 (Note G) 17,200
Audit 5,901 4,959 4,959 (1,500) (Note H) 14,319
Amortization of organization
expense 3,497 4,845 4,662 (8,159) (Note D) 4,845
Printing - 3,651 3,521 (1,400) (Note I) 5,772
Legal 2,237 1,095 634 - 3,966
Miscellaneous 3,391 793 550 - 4,734
Trustee 1,006 594 255 - 1,855
--------- --------- -------- --------- ---------
Total expenses 96,788 108,096 74,434 (93,134) 186,184
--------- --------- -------- --------- ---------
Less: Waiver of Sponsor fees - (6,310) (3,047) - (9,357)
Reimbursement
from sponsor (30,861) (62,346) (52,346) 27,209 (Notes D, F, G, H, I) (118,344)
--------- --------- -------- --------- ---------
65,927 39,440 19,041 (65,925) 58,483
Distribution and service fees: - -
Class A shares - 7,888 - - 7,888
Class C shares - - 15,233 - 15,233
--------- --------- -------- --------- ---------
Net Expenses 65,927 47,328 34,274 (65,925) 81,604
--------- --------- -------- --------- ---------
NET INVESTMENT INCOME (LOSS) (13,455) (11,441) (17,689) 13,453 (29,132)
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 577,480 379,593 197,887 (577,480) (Note C) 577,480
Foreign currency
transactions - - - - -
--------- --------- -------- --------- ---------
577,480 379,593 197,887 (577,480) 577,480
--------- --------- -------- --------- ---------
Net change in unrealized
appreciation
(depreciation) on:
Investments (281,678) (225,003) (56,675) 281,678 (Note C) (281,678)
Foreign currency
transactions - - - - -
--------- --------- -------- --------- ---------
(281,678) (225,003) (56,675) 281,678 (281,678)
--------- --------- -------- --------- ---------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS $ 282,347 $ 143,149 $123,523 $(282,349) $ 266,670
========= ========= ======== ========= =========
Note A: Net of foreign
withholding tax of: - - - - -
--------- --------- -------- --------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS--89.7%
DENMARK--1.2%
1,497 Tele Danmark A/S, Class B... $ 143,900
-----------
FINLAND--2.7%
3,004 Nokia OYJ, Series A......... 222,090
1,934 Pohjola Insurance, Class
B......................... 96,028
-----------
318,118
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
FRANCE--18.7%
362 Accor....................... $ 101,383
1,524 Alcatel Alsthom............. 310,520
913 Assurances Generales de
France...................... 51,699
1,720 AXA......................... 193,594
1,358 Banque National De Paris.... 111,041
551 Bouygues.................... 100,140
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE> 48
INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
FRANCE--CONTINUED
1,249 Cap Gemini.................. $ 196,400
1,117 Casino Guichard-Perrachon... 89,264
588 Groupe Danone............... 162,244
1,691 Lafarge..................... 174,936
3,206 Lagardere Groupe............ 133,568
3,148 Renault..................... 179,193
1,554 Rhone Poulenc............... 87,712
1,093 Suez Lyonnaise Des Eaux-
Dumex....................... 180,011
807 Total S.A., Series B........ 104,991
-----------
2,176,696
-----------
GERMANY--12.0%
495 Adidas...................... 86,368
173 Allianz Holdings............ 57,731
5 Allianz..................... 1,655
3,671 BASF........................ 174,640
201 BMW......................... 203,509
1,102 Dresdner Bank............... 59,609
4,065 Lufthansa................... 102,499
3,049 Mannesmann.................. 313,781
2,786 RWE......................... 165,073
240 Volkswagen.................. 232,078
-----------
1,396,943
-----------
GREAT BRITAIN--20.8%
7,203 Amvescap.................... 70,370
30,870 Avis Europe................. 139,880
22,526 BG.......................... 130,626
6,360 Boots....................... 105,469
12,070 British Aerospace........... 92,520
3,901 British Petroleum........... 57,069
15,650 Cable &Wireless
Communications.............. 158,642
16,800 Compass Group............... 193,586
3,712 Electrocomponents........... 29,135
5,750 GKN......................... 73,315
10,154 Great Universal Stores...... 133,962
5,947 Lloyds TSB Group............ 83,573
18,560 National Grid Group......... 125,314
5,683 National Westminster Bank... 101,644
5,915 Orange...................... 63,121
10,800 Rentokil Initial............ 77,735
11,192 Shell Transport & Trading... 79,155
7,884 SmithKline Beecham.......... 95,943
10,024 Unilever.................... 106,802
20,390 Vodafone Group.............. 258,960
20,702 WPP Group................... 135,783
2,264 Zeneca Group................ 97,244
-----------
2,409,848
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
IRELAND--3.3%
7,500 Allied Irish Banks.......... $ 108,959
7,111 Bank of Ireland............. 145,835
9,003 CRH......................... 127,572
-----------
382,366
-----------
ISRAEL--0.6%
1,500 ECI Telecommunications...... 56,813
500 Teva Pharmaceutical
Industries, ADR............. 17,594
-----------
74,407
-----------
ITALY--6.5%
36,880 Banca di Roma............... 74,613
32,775 Credito Italiano............ 170,505
55,164 Montedison.................. 68,336
267,190 Seat........................ 179,636
17,030 Telecom Italia Mobile....... 104,005
23,750 Telecom Italia, Non-
Convertible Savings
Shares...................... 115,664
6,785 Telecom Italia.............. 49,617
-----------
762,376
-----------
JAPAN--5.3%
500 Acom........................ 23,843
2,600 Bank of Tokyo............... 27,638
2,000 Bridgestone................. 47,469
1,000 Canon....................... 22,794
4,000 Fujitsu..................... 42,259
1,000 Fuji........................ 34,951
3,000 Minebea..................... 29,979
25 Morgan Stanley Deanwitter
(Sony Corp), CPS............ 42,172
33 Merrill Lynch (Honda Motor),
CPS......................... 33,541
300 Nintendo.................... 28,156
8 Nippon Telegraph &
Telephone................... 33,286
460 Promise..................... 19,006
1,000 Sankyo...................... 22,866
1,000 TDK......................... 74,171
2,000 Terumo...................... 31,839
1,600 Tokyo Electric Power........ 31,492
2,000 Toyota Motor................ 51,956
1,000 Yamanouchi Pharmaceutical... 20,912
-----------
618,330
-----------
MEXICO--1.8%
354 Cemex, Class B.............. 1,564
3,000 Cifra, ADR.................. 43,935
1,463 Fomento Economico Mexico,
ADR......................... 46,085
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE> 49
INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
MEXICO--CONTINUED
11,100 Kimberly-Clark Mexico,
Series A.................... $ 38,359
1,600 Telefonos De Mexico, ADR.... 76,900
-----------
206,843
-----------
NETHERLANDS--5.2%
2,149 Ing Groep................... 140,859
2,697 Koninklijke................. 103,917
2,742 Nutreco Holding............. 96,071
1,858 OCE......................... 79,179
2,697 TNT Post Groep.............. 69,013
3,210 Verenigde Nederlandse....... 116,733
-----------
605,772
-----------
RUSSIA--0.0%
1,375 JSC Surgutneftegaz, ADR..... 5,573
-----------
SPAIN--2.6%
3,200 Bancaria De Espana.......... 71,784
3,475 Banco Central
Hispanoamericano............ 109,224
2,512 Telefonica De Espana........ 116,140
-----------
297,148
-----------
SWEDEN--2.6%
13,623 Nordbanken Holding.......... 99,968
5,000 Skandia Forsakrings......... 71,500
4,186 ForeningsSparbanken......... 126,021
-----------
297,489
-----------
SWITZERLAND--6.4%
20 Kuoni Reisen Holdings....... 99,531
82 Nestle...................... 175,912
101 Novartis.................... 168,478
36 Swiss Reinsurance........... 91,267
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
SWITZERLAND--CONTINUED
18 UBS (Schw. Bank
Gesellschaft)............... $ 32,393
490 Union Bank of Switzerland... 182,645
-----------
750,226
-----------
TOTAL COMMON STOCKS
(COST $8,135,555)....................... 10,446,035
-----------
PREFERRED STOCKS--5.0%
GERMANY--5.0%
2,195 Henkel...................... 217,369
42 Porsche..................... 121,165
354 Sap Vorzug.................. 240,583
-----------
579,117
-----------
TOTAL PREFERRED STOCKS
(COST $345,259)......................... 579,117
-----------
RIGHTS--0.1%
GERMANY--0.1%
13 BMW Rights.................. 12,757
-----------
TOTAL RIGHTS (COST $0).................. 12,757
-----------
TOTAL INVESTMENTS AT VALUE--94.8%
(COST $8,480,814)(a).................... 11,037,909
CASH AND OTHER ASSETS
NET OF LIABILITIES--5.2%................ 962,643
-----------
NET ASSETS--100.0%...................... $12,000,552
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
(a) The aggregate identified cost for federal income tax purposes is $8,480,814,
resulting in gross unrealized appreciation and depreciation of $2,675,977
and $118,882, respectively, and net unrealized appreciation of $2,557,095.
ADR-American Depositary Receipt
CPS-Currency Protected Security
INTERNATIONAL EQUITY TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
INTERNATIONAL INTERNATIONAL INTERNATIONAL (REFERENCES ARE INTERNATIONAL
EQUITY EQUITY EQUITY TO PRO FORMA EQUITY
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
------------- ------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding Select
Advisors Portfolios, at value - $6,464,716 $5,176,386 $(11,641,102) (Note C) -
Investments at Value (Note A) $11,037,909 - - - $11,037,909
Cash and foreign currency 777,513 - - - 777,513
Receivables for:
Securities sold 138,779 - - - 138,779
Fund shares sold - 24,101 647 - 24,748
Dividend, interest, and
foreign withholding tax 40,010 - - - 40,010
Gain on forward contracts 457 - - - 457
Deferred organization expenses 8,885 12,319 11,852 (20,737) (Note D) 12,319
Reimbursement receivable from
Advisor/Sponsor 163,355 172,578 168,207 (12,223) (Notes D, F,G,H,I) 491,917
----------- ---------- ---------- ------------ -----------
Total Assets 12,166,908 6,673,714 5,357,092 (11,674,062) 12,523,652
----------- ---------- ---------- ------------ -----------
LIABILITIES:
Payable for fund shares redeemed - 1,325 - - 1,325
Distribution payable from income - - - - -
Payable for investments purchased 479,162 - - - 479,162
Due to Custodian - - - - -
Payable to Advisor (Sponsor) - - - - -
Other accrued expenses 46,644 9,571 19,358 (32,960) (Notes D, F,G,H,I) 42,613
----------- ---------- ---------- ------------ -----------
Total Liabilities 525,806 10,896 19,358 (32,960) 523,100
----------- ---------- ---------- ------------ -----------
NET ASSETS: $11,641,102 $6,662,818 $5,337,734 $(11,641,102) $12,000,552
=========== ========== ========== ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital $11,641,102 $5,041,384 $3,977,872 $(11,641,102) (Notes C) $ 9,019,256
Undistributed Net Income, or
(distributions in excess
of net investment income) - 6,631 (17,060) - (10,429)
Accumulated net realized gain
(loss) on investments
and foreign currency, or
(distributions in excess of
net realized gains) - 240,715 192,863 - 433,578
Net unrealized appreciation
(depreciation) on
investments, foreign
currency and other assets - 1,374,088 1,184,059 - 2,558,147
----------- ---------- ---------- ------------ -----------
NET ASSETS: $11,641,102 $6,662,818 $5,337,734 $(11,641,102) $12,000,552
=========== ========== ========== ============ ===========
Class A - $6,662,818 - - $ 6,662,818
=========== ========== ========== ============ ===========
Class C - - $5,337,734 - $ 5,337,734
=========== ========== ========== ============ ===========
SHARES OUTSTANDING:
Class A - 474,106 - - 474,106
=========== ========== ========== ============ ===========
Class C - - 386,256 - 386,256
=========== ========== ========== ============ ===========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and
redemptions price per share - $ 14.05 - - $ 14.05
=========== ========== ========== ============ ===========
Maximum offering price per share
(based on maximum sales
charge of 5.75%) - $ 14.91 - - $ 14.91
=========== ========== ========== ============ ===========
CLASS C SHARES
Net asset value and offering price
per share* - - $ 13.82 - $ 13.82
=========== ========== ========== ============ ===========
Note A: Cost of investments 8,480,814 8,480,814
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
INTERNATIONAL EQUITY TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
INTERNATIONAL INTERNATIONAL INTERNATIONAL (REFERENCES ARE INTERNATIONAL
EQUITY EQUITY EQUITY TO PRO FORMA EQUITY
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
------------- ------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 8,176 $ 4,526 $ 3,650 (8,176) (Note C) $ 8,176
Dividend income 112,224 62,051 50,173 (112,224) (Note C) 112,224
---------- ---------- -------- ----------- ----------
120,400 66,577 53,823 (120,400) 120,400
---------- ---------- -------- ----------- ----------
EXPENSES:
Allocated expenses from Hub - 42,932 35,001 (77,933) (Note C) -
Investment Advisory fee 47,765 - - - 47,765
Sponsor fee - 5,689 4,655 - 10,344
Transfer agent - 19,358 15,555 - 34,913
Custody, Fund accounting and
administration 95,240 14,876 14,876 (24,000) (Note F) 100,992
Registration - 7,544 6,739 2,000 (Note G) 16,283
Audit 6,436 5,455 5,455 (1,500) (Note H) 15,846
Amortization of organization
expense 3,497 4,845 4,663 (8,160) (Note D) 4,845
Printing - 2,391 4,033 (1,300) (Note I) 5,124
Legal 1,712 717 726 3,155
Miscellaneous 3,345 519 630 - 4,494
Trustee 769 389 291 - 1,449
---------- ---------- -------- ----------- ----------
Total expenses 158,764 104,715 92,624 (110,893) 245,210
---------- ---------- -------- ----------- ----------
Less: Waiver of Sponsor fees - (5,689) (4,655) - (10,344)
Reimbursement
from sponsor (80,831) (60,623) (56,551) 32,960 (Notes D, F, G, H, I) (165,045)
---------- ---------- -------- ----------- ----------
77,933 38,403 31,418 (77,933) 69,821
Distribution and service fees:
Class A shares - 7,112 - - 7,112
Class C shares - - 23,273 - 23,273
---------- ---------- -------- ----------- ----------
Net Expenses 77,933 45,515 54,691 (77,933) 100,206
---------- ---------- -------- ----------- ----------
NET INVESTMENT INCOME (LOSS) 42,467 21,062 (868) (42,467) 20,194
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 326,599 190,510 136,089 (326,599) (Note C) 326,599
Foreign currency transactions (15,935) (8,773) (7,162) 15,935 (Note C) (15,935)
---------- ---------- -------- ----------- ----------
310,664 181,737 128,927 (310,664) 310,664
---------- ---------- -------- ----------- ----------
Net change in unrealized
appreciation (depreciation)
on:
Investments 1,738,456 941,350 797,106 (1,738,456) (Note C) 1,738,456
Foreign currency transactions (223) (445) 222 223 (Note C) (223)
---------- ---------- -------- ----------- ----------
1,738,233 940,905 797,328 (1,738,233) 1,738,233
---------- ---------- -------- ----------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $2,091,364 $1,143,704 $925,387 $(2,091,364) $2,069,091
========== ========== ======== =========== ==========
Note A: Net of foreign
withholding tax of: 16,704 9,228 7,476 - 16,704
---------- ---------- -------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ------ -----------
<C> <S> <C>
COMMON STOCKS--95.2%
AEROSPACE & DEFENSE--2.5%
4,800 Lockheed Martin $ 508,200
9,900 Rockwell International.......... 475,819
-----------
984,019
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ------ -----------
<C> <S> <C>
AUTOMOTIVE--7.6%
14,300 Dana............................ $ 765,050
21,300 Ford Motor...................... 1,256,691
8,100 Goodyear Tire & Rubber.......... 521,944
8,600 Meritor Automotive.............. 206,400
5,000 Paccar.......................... 261,250
-----------
3,011,335
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE> 50
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ------ -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
BANKING--12.4%
40 Associates First Capital........ $ 3,075
5,210 Banc One........................ 290,761
3,000 Bankers Trust................... 348,188
13,800 Chase Manhattan................. 1,041,900
7,200 Firstar......................... 273,600
7,400 Fleet Financial Group........... 617,900
3,700 J P Morgan...................... 433,363
11,300 Key............................. 402,563
7,800 Nationsbank..................... 596,700
11,550 North Folk Bancorp.............. 282,253
3,475 Old Kent Financial.............. 124,991
11,400 US Bancorp...................... 490,200
-----------
4,905,494
-----------
BEVERAGES, FOOD & TOBACCO--4.9%
15,100 Heinz (H. J.)................... 847,488
12,600 Philip Morris................... 496,125
7,700 Unilever, ADR................... 607,819
-----------
1,951,432
-----------
CHEMICALS--7.2%
2,400 Akzo, ADR....................... 266,100
5,600 Betzdearborn.................... 236,250
4,200 Dow Chemical.................... 406,088
5,500 Eastman Chemical................ 342,375
9,500 Imperial Chemical Industries,
ADR............................. 612,750
17,500 Lyondell Petro Chemical......... 532,656
5,200 Olin............................ 216,775
8,100 Witco........................... 236,925
-----------
2,849,919
-----------
COMMERCIAL SERVICES--6.0%
12,300 Browning-Ferris Industries...... 427,425
14,700 Cinergy......................... 514,500
9,900 Duke Energy..................... 586,575
17,600 Pacificorp...................... 398,200
12,400 Unicom.......................... 434,775
-----------
2,361,475
-----------
COSMETICS & PERSONAL CARE--1.4%
7,000 Avon Products................... 542,500
-----------
ELECTRIC UTILITIES--2.0%
3,400 CMS Energy...................... 149,600
18,100 Southern........................ 501,144
5,200 Wisconsin Energy................ 157,950
-----------
808,694
-----------
ELECTRONICS--0.5%
4,100 Thomas & Betts.................. 201,925
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ------ -----------
<C> <S> <C>
FINANCIAL SERVICES--3.2%
2,500 Federal National Mortgage
Association..................... $ 151,875
14,762 First Union..................... 859,887
10,400 Nationwide Health Properties.... 248,300
-----------
1,260,062
-----------
FOREST PRODUCTS & PAPER--5.1%
6,200 Boise Cascade................... 203,050
4,600 Georgia-Pacific (Timber
Group).......................... 106,088
7,200 Georgia-Pacific................. 424,350
8,500 Mead............................ 269,875
6,300 Temple-Inland................... 339,413
7,200 Westvaco........................ 203,400
10,200 Weyerhauser..................... 471,113
-----------
2,017,289
-----------
HEAVY INDUSTRY--0.5%
3,400 Caterpillar..................... 179,775
-----------
HOUSEHOLD PRODUCTS--1.5%
17,000 Corning......................... 590,750
-----------
INSURANCE--4.7%
6,600 Exel............................ 513,563
7,700 Lincoln National................ 703,588
3,300 Mid Ocean....................... 259,050
8,800 Safeco.......................... 399,850
-----------
1,876,051
-----------
METALS--1.9%
16,000 Allegheny Teledyne.............. 366,000
9,000 Freeport McMoran Copper &
Gold............................ 128,250
8,700 Oregon Steel Mills.............. 162,038
1,700 Phelps Dodge.................... 97,219
-----------
753,507
-----------
OFFICE EQUIPMENT--2.5%
9,800 Xerox........................... 995,925
-----------
OIL & GAS--9.3%
5,100 Atlantic Richfield.............. 398,438
6,800 British Petroleum, ADR.......... 600,100
9,300 Elf Aquitaine, ADR.............. 660,300
11,800 Texaco.......................... 704,313
7,100 Total S.A., ADR................. 464,163
15,100 Williams Companies.............. 509,625
12,400 YPF Sociedad Anonima, ADR....... 372,775
-----------
3,709,714
-----------
PHARMACEUTICALS--5.3%
14,200 American Home Products.......... 734,850
5,900 Bristol-Myers Squibb............ 678,131
4,500 Smithkline Beecham, ADR......... 272,250
9,600 Zeneca Group, ADR............... 421,200
-----------
2,106,431
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE> 51
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ------ -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
REAL ESTATE--0.4%
5,600 Arden Realty Group.............. $ 144,900
-----------
RETAILERS--4.4%
8,700 J.C. Penney..................... 629,119
4,600 May Department Stores........... 301,300
5,600 Rite Aid........................ 210,350
9,600 Sears Roebuck................... 586,200
-----------
1,726,969
-----------
TELEPHONE SYSTEMS--9.5%
10,600 Alltel.......................... 492,900
18,000 Bell Atlantic................... 821,250
8,700 Bellsouth....................... 583,988
15,700 Frontier........................ 494,550
12,400 GTE............................. 689,750
9,600 Sprint.......................... 676,800
-----------
3,759,238
-----------
TRANSPORTATION--2.4%
7,100 CSX............................. 323,050
13,200 General Dynamics................ 613,800
-----------
936,850
-----------
TOTAL COMMON STOCKS
(COST $34,884,023)....................... 37,674,254
-----------
INVESTMENT TRUSTS--1.5%
5,200 S&P 500 Depository Receipt...... 589,225
-----------
TOTAL INVESTMENT TRUSTS
(COST $578,006).......................... 589,225
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ------ -----------
<C> <S> <C>
REAL ESTATE INVESTMENT TRUSTS--2.7%
FINANCIAL SERVICES--1.7%
3,900 Equity Residential Properties
Trust........................... $ 185,006
4,900 Meditrust....................... 136,894
14,500 Security Capital Industrial
Trust........................... 362,500
-----------
684,400
-----------
REAL ESTATE--1.0%
4,000 Boston Properties............... 138,000
8,400 Equity Office Properties........ 238,350
-----------
376,350
-----------
TOTAL REAL ESTATE INVESTMENT TRUSTS (COST
$1,102,242).............................. 1,060,750
-----------
TOTAL INVESTMENTS AT VALUE--99.4%
(COST $36,564,271)(a).................... 39,324,229
CASH AND OTHER ASSETS
NET OF LIABILITIES--0.6%................. 432,858
-----------
NET ASSETS--100.0%....................... $39,757,087
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
(a) The aggregate identified cost for federal income tax purposes is
$36,564,271, resulting in gross unrealized appreciation and depreciation of
$4,342,170 and $1,582,212, respectively, and net unrealized appreciation of
$2,759,958.
ADR - American Depositary Receipt
GROWTH & INCOME TRUST A, TRUST C & SEPARATE A
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
GROWTH & GROWTH & GROWTH & GROWTH & (REFERENCES ARE
INCOME INCOME INCOME INCOME TO PRO FORMA GROWTH & INCOME
PORTFOLIO TRUST A TRUST C SEPARATE A FOOTNOTES) PRO FORMA
----------- ----------- ---------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding
Select Advisors
Portfolios, at value - $15,515,568 $2,529,978 $21,496,754 $(39,542,300) (Note C) -
Investments at Value (Note A) $39,324,229 - - - - $39,324,229
Cash and foreign currency 416,881 - - - - 416,881
Receivables for:
Securities sold 7,354 - - - - 7,354
Fund shares sold - 3,539 888 - - 4,427
Dividend, interest, and
foreign withholding tax 90,478 - - - - 90,478
Gain on forward contracts - - - - - -
Deferred organization expenses 8,885 12,319 11,852 - (20,737) (Note D) 12,319
Reimbursement receivable from
Advisor/Sponsor - 192,561 141,729 - (265,341) (Notes D, E,F,G,H,I) 68,949
----------- ----------- ---------- ----------- ------------ -----------
Total Assets 39,847,827 15,723,987 2,684,447 21,496,754 (39,828,378) 39,924,637
----------- ----------- ---------- ----------- ------------ -----------
LIABILITIES:
Payable for fund shares
redeemed - 1,601 - - - 1,601
Distribution payable from
income - 38,076 4,207 - - 42,283
Payable for investments
purchased 6,312 - - - - 6,312
Due to Custodian - - - - - -
Payable to Advisor (Sponsor) 265,468 - - - (265,468) (Note E) -
Other accrued expenses 33,747 20,694 11,519 72,004 (20,610) (Notes D, F,G,H,I) 117,354
----------- ----------- ---------- ----------- ------------ -----------
Total Liabilities 305,527 60,371 15,726 72,004 (286,078) 167,550
----------- ----------- ---------- ----------- ------------ -----------
NET ASSETS: $39,542,300 $15,663,616 $2,668,721 $21,424,750 $(39,542,300) $39,757,087
=========== =========== ========== =========== ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital $39,542,300 $14,827,740 $2,334,092 $10,000,000 $(39,542,300) (Notes C) $27,161,832
Undistributed Net Income, or
(distributions in excess
of net investment income) - (3,091) (5,389) 483,485 - 475,005
Accumulated net realized gain
(loss) on investments
and foreign currency, or
(distributions in excess
of net realized gains) - 822,096 267,871 9,248,685 - 10,338,652
Net unrealized appreciation
(depreciation) on
investments, foreign
currency and other assets - 16,871 72,147 1,692,580 - 1,781,598
----------- ----------- ---------- ----------- ------------ -----------
NET ASSETS: $39,542,300 $15,663,616 $2,668,721 $21,424,750 $(39,542,300) $39,757,087
=========== =========== ========== =========== ============ ===========
Class A - $15,663,616 - - - $15,663,616
=========== =========== ========== =========== ============ ===========
Class C - - $2,668,721 - - $ 2,668,721
=========== =========== ========== =========== ============ ===========
Class Y - - - $21,424,750 - $21,424,750
=========== =========== ========== =========== ============ ===========
SHARES OUTSTANDING:
Class A - 952,948 - - - 952,948
=========== =========== ========== =========== ============ ===========
Class C - - 169,743 - - 169,743
=========== =========== ========== =========== ============ ===========
Class Y - - - 1,000,000 - 1,000,000
=========== =========== ========== =========== ============ ===========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and
redemptions price per
share - $ 16.44 - - - $ 16.44
=========== =========== ========== =========== ============ ===========
Maximum offering price per
share (based on maximum
sales charge of 5.75%) - $ 17.44 - - - $ 17.44
=========== =========== ========== =========== ============ ===========
CLASS C SHARES
Net asset value and
offering price per share* - - $ 15.72 - - $ 15.72
=========== =========== ========== =========== ============ ===========
CLASS Y SHARES
Net asset value and offering
price per share - - - $ 21.42 - $ 21.42
=========== =========== ========== =========== ============ ===========
Note A: Cost of investments 36,564,271 36,564,271
</TABLE>
The accompanying notes are an integral part of the financial statements.
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
GROWTH & INCOME TRUST A, TRUST C & SEPARATE A
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
GROWTH & GROWTH & GROWTH & GROWTH & (REFERENCES ARE GROWTH &
INCOME INCOME INCOME INCOME TO PRO FORMA INCOME
PORTFOLIO TRUST A TRUST C SEPARATE A FOOTNOTES) PRO FORMA
---------- --------- -------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 18,573 $ 6,027 $ 1,224 $ 11,322 (18,573) (Note C) $ 18,573
Dividend income 429,432 123,485 29,370 276,577 (429,432) (Note C) 429,432
---------- --------- -------- ---------- ----------- ----------
448,005 129,512 30,594 287,899 (448,005) 448,005
---------- --------- -------- ---------- ----------- ----------
EXPENSES:
Allocated expenses from Hub - 56,127 13,620 128,466 (198,213) (Note C) -
Investment Advisory fee 128,983 - - - - 128,983
Sponsor fee - 9,310 2,332 - - 11,642
Transfer agent - 22,053 16,185 - - 38,238
Custody, Fund accounting
and administration 49,706 12,397 12,397 - (14,750) (Note F) 59,750
Registration - 9,124 6,567 - 5,400 (Note G) 21,091
Audit 5,901 4,959 4,959 - (1,500) (Note H) 14,319
Amortization of
organization expense 3,497 4,845 4,663 - (8,160) (Note D) 4,845
Printing - 5,021 3,196 - (1,600) (Note I) 6,617
Legal 5,435 1,506 576 - - 7,517
Miscellaneous 10,319 1,090 500 - - 11,909
Trustee 500 816 232 - - 1,548
---------- --------- -------- ---------- ----------- ----------
Total expenses 204,341 127,248 65,227 128,466 (218,823) 306,459
---------- --------- -------- ---------- ----------- ----------
Less: Waiver of Sponsor fees - (9,310) (2,332) - - (11,642)
Reimbursement
from sponsor (6,128) (69,058) (50,650) - 20,610 (Notes D, F, G, H, I) (105,226)
---------- --------- -------- ---------- ----------- ----------
198,213 48,880 12,245 128,466 (198,213) 189,591
Distribution and service
fees:
Class A shares - 11,638 - - - 11,638
Class C shares - - 11,662 - - 11,662
Class Y shares - - - - - -
---------- --------- -------- ---------- ----------- ----------
Net Expenses 198,213 60,518 23,907 128,466 (198,213) 212,891
---------- --------- -------- ---------- ----------- ----------
NET INVESTMENT INCOME 249,792 68,994 6,687 159,433 (249,792) 235,114
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 1,698,243 738,280 238,829 721,134 (1,698,243) (Note C) 1,698,243
Foreign currency
transactions - - - - - -
---------- --------- -------- ---------- ----------- ----------
1,698,243 738,280 238,829 721,134 (1,698,243) 1,698,243
---------- --------- -------- ---------- ----------- ----------
Net change in unrealized
appreciation
(depreciation) on:
Investments 645,953 (371,038) (65,217) 1,082,208 (645,953) (Note C) 645,953
Foreign currency
transactions - - - - - -
---------- --------- -------- ---------- ----------- ----------
645,953 (371,038) (65,217) 1,082,208 (645,953) 645,953
---------- --------- -------- ---------- ----------- ----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS $2,593,988 $ 436,236 $180,299 $1,962,775 $(2,593,988) $2,579,310
========== ========= ======== ========== =========== ==========
Note A: Net of foreign
withholding tax of: - - - - - -
---------- --------- -------- ---------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- -------- -----------
<C> <S> <C>
COMMON STOCKS--61.7%
ADVERTISING--2.6%
2,900 WPP Group..................... $ 195,025
-----------
AEROSPACE & DEFENSE--4.4%
2,200 Boeing........................ 98,038
1,200 Lockheed Martin............... 127,050
2,000 Rockwell International........ 96,125
-----------
321,213
-----------
AIRLINES--2.0%
1,800 AMR*.......................... 149,850
-----------
BANKING--1.0%
500 Citicorp...................... 74,625
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- -------- -----------
<C> <S> <C>
BEVERAGES, FOOD & TOBACCO--1.0%
1,555 Diageo, ADR................... $ 74,932
-----------
CHEMICALS--2.2%
3,000 Monsanto...................... 167,625
-----------
COMMUNICATIONS--1.8%
4,900 General Instrument............ 133,219
-----------
COMPUTERS & INFORMATION--0.8%
1,400 EMC........................... 62,738
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE> 52
BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- -------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
ELECTRONICS--5.0%
3,500 Adaptec*...................... $ 50,094
1,100 Avnet......................... 60,156
1,500 Motorola...................... 78,844
4,500 Solectron..................... 189,281
-----------
378,375
-----------
ENTERTAINMENT & LEISURE--3.0%
3,400 Polaroid...................... 120,913
1,200 Time Warner................... 102,525
-----------
223,438
-----------
FINANCIAL SERVICES--6.9%
3,900 Countrywide Credit............ 197,925
2,000 Federal Home Loan Mortgage
Corporation................... 94,125
5,300 Green Tree Financial.......... 226,906
-----------
518,956
-----------
HEALTH CARE PROVIDERS--1.2%
3,000 Tenet Healthcare*............. 93,750
-----------
HEAVY INDUSTRY--3.2%
1,400 Caterpillar................... 74,025
4,200 Lucasvarity, ADR.............. 167,213
-----------
241,238
-----------
INDUSTRIAL--0.7%
800 Armstrong World Industries.... 53,900
-----------
INSURANCE--1.4%
2,200 Renaissancere Holdings........ 101,888
-----------
LODGING--1.9%
12,200 Homestead Village Property*... 144,875
-----------
MEDIA--BROADCASTING &
PUBLISHING--1.0%
2,100 Reed International, ADR....... 77,963
-----------
METALS--2.0%
6,500 Allegheny Teledyne............ 148,688
-----------
OIL & GAS--1.6%
1,800 Anadarko Petroleum............ 120,938
-----------
PHARMACEUTICALS--2.7%
4,400 Millipore..................... 119,900
2,400 Teva Pharmaceutical
Industries, ADR............... 84,450
-----------
204,350
-----------
REAL ESTATE--4.3%
3,400 Oakwood Homes................. 102,000
4,700 Security Capital Group, Class
B............................. 125,138
3,600 Security Capital Industrial
Trust REIT.................... 90,000
-----------
317,138
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- -------- -----------
TELEPHONE SYSTEMS--2.3%
2,400 Sprint........................ $ 169,200
-----------
TEXTILES, CLOTHING & FABRICS--2.7%
8,100 Shaw Industries............... 142,763
1,700 Unifi......................... 58,225
-----------
200,988
-----------
TRANSPORTATION--6.0%
5,200 Air Express International..... 139,100
6,500 Sabre Group Holding*.......... 247,000
1,500 Union Pacific................. 66,188
-----------
452,288
-----------
TOTAL COMMON STOCKS
(COST $4,048,758)........................ 4,627,200
-----------
PRINCIPAL
AMOUNT
- --------
<C> <S> <C>
CORPORATE BONDS--12.5%
BANKING--3.6%
$ 50,000 Bankers Trust, 7.125%,
03/15/06...................... 52,328
100,000 BB&T, 7.25% 06/15/07.......... 106,351
100,000 Chase Manhattan, 7.25%,
06/01/07...................... 106,481
339 Nykredit, 6.00%, 10/01/26..... 49
-----------
265,209
-----------
BEVERAGES, FOOD & TOBACCO--0.9%
60,000 Coca-Cola Femsa,
8.95%,11/01/06................ 60,827
-----------
COMPUTER SOFTWARE &
PROCESSING--1.3%
100,000 Computer Associates
International, 6.375%,
04/15/05...................... 100,440
-----------
ELECTRIC UTILITIES--1.2%
95,000 Financiera Energy, 9.375%,
06/15/06...................... 93,475
-----------
FINANCIAL SERVICES--2.2%
100,000 Bonos Del Tesoro, 8.75%,
05/09/02...................... 96,714
69,000 Paine Webber Group, 7.00%,
03/01/00...................... 69,856
-----------
166,570
-----------
METALS--1.4%
100,000 AK Steel, 9.125%, 12/15/06.... 104,500
-----------
OIL & GAS--0.6%
50,000 Petroleos Mexicanos, 8.85%,
09/15/07...................... 48,500
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE> 53
BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----------
<C> <S> <C>
CORPORATE BONDS--CONTINUED
TELEPHONE SYSTEMS--1.3%
$100,000 AT&T Capital, 6.23%,
09/24/99...................... $ 99,987
-----------
TOTAL CORPORATE BONDS
(COST $936,146)........................... 939,508
-----------
MORTGAGE BACKED SECURITIES--3.4%
20,000 Federal Home Loan Mortgage
Corporation, 6.00%,
03/15/08...................... 20,031
45,000 Federal National Mortgage
Association, 6.15%,
10/25/07...................... 45,017
44,500 General Electric Capital
Mortgage Service, 6.50%,
03/25/24...................... 44,785
40,000 General Electric Capital
Mortgage Service, 6.50%,
11/25/23...................... 39,158
40,000 Merrill Lynch Mortgage
Investment, 7.089%,
12/26/25...................... 41,946
17,888 Merrill Lynch Mortgage
Investment, 7.65%, 01/15/12... 18,030
50,000 Prudential Home Mortgage
Securities, 6.25%, 04/25/24... 46,911
-----------
TOTAL MORTGAGE BACKED SECURITIES
(COST $241,580)........................... 255,878
-----------
MUNICIPAL BONDS--3.1%
40,000 Baltimore Community
Development Financing, 8.20%,
08/15/07...................... 44,331
7,031 Denver Colorado City & County
Single Family, 7.25%,
12/01/10...................... 7,325
15,000 New York City, New York,
General Obligation, 9.75%,
08/15/12...................... 15,928
40,000 New York State Housing Finance
Agency Service, 7.50%,
09/15/03...................... 41,684
50,000 Ohio Housing Financial Agency,
7.90%, 10/01/14............... 51,706
30,000 Oklahoma City Airport, 9.40%,
11/01/10...................... 34,874
40,000 Oregon State General
Obligation, 6.90%, 01/01/00... 40,045
-----------
TOTAL MUNICIPAL BONDS
(COST $223,662)........................... 235,893
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS--14.8%
$150,000 U.S. Treasury Bonds, 6.25%,
04/30/01...................... $ 152,766
245,000 U.S. Treasury Bonds, 6.75%,
08/15/26...................... 280,525
150,000 U.S. Treasury Notes, 7.00%,
07/15/06...................... 163,875
100,000 U.S. Treasury Notes, 5.75%,
10/31/00...................... 100,500
320,000 U.S. Treasury Notes, 7.25%,
08/15/04...................... 348,294
65,000 U.S. Treasury Notes, 6.125%,
08/31/98...................... 65,081
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $1,077,460)......................... 1,111,041
-----------
SOVEREIGN GOVERNMENT OBLIGATIONS--3.1%
BRAZIL--0.6%
58,011 Republic of Brazil, 8.00%,
04/15/14...................... 42,565
-----------
SOUTH AFRICA--1.5%
774,000 Republic Of South Africa,
13.00%, 08/31/10.............. 115,992
-----------
UNITED KINGDOM--1.0%
37,000 UK Treasury, 8.00%, 12/07/15.. 77,380
-----------
TOTAL SOVEREIGN GOVERNMENT OBLIGATIONS
(COST $267,474)........................... 235,937
-----------
TOTAL INVESTMENTS AT VALUE--98.6%
(COST $6,795,080)(a)...................... 7,405,457
CASH AND OTHER ASSETS
NET OF LIABILITIES--1.4%.................. 377,852
-----------
NET ASSETS--100.0%........................ $7,783,309
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
(a) The aggregate identified cost for federal income tax purposes is $6,795,080,
resulting in gross unrealized appreciation and depreciation of $924,344 and
$313,967, respectively, and net unrealized appreciation of $610,377.
ADR - American Depositary Receipt
REIT - Real Estate Investment Trust
BALANCED TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
(REFERENCES ARE
BALANCED BALANCED BALANCED TO PRO FORMA BALANCED
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
---------- ---------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding Select
Advisors Portfolios, at value - $4,310,837 $3,198,608 $(7,509,445) (Note C) -
Investments at Value (Note A) $7,405,457 - - - $7,405,457
Cash and foreign currency - - - - -
Receivables for:
Securities sold - - - - -
Fund shares sold - 1,444 455 - 1,899
Dividend, interest, and
foreign withholding tax 55,037 - - - 55,037
Gain on forward contracts 17,476 - - - 17,476
Deferred organization expenses 8,885 12,319 11,852 (20,737) (Note D) 12,319
Reimbursement receivable from
Advisor/Sponsor 58,425 170,377 146,638 (5,873) (Notes D,F,G,H,I) 369,567
---------- ---------- ---------- ----------- ----------
Total Assets 7,545,280 4,494,977 3,357,553 (7,536,055) 7,861,755
---------- ---------- ---------- ----------- ----------
LIABILITIES:
Payable for fund shares redeemed - 1,841 - - 1,841
Distribution payable from income - 16,798 12,899 - 29,697
Payable for investments purchased - - - - -
Due to Custodian 13,988 - - - 13,988
Payable to Advisor (Sponsor) - - - - -
Other accrued expenses 21,847 23,952 13,731 (26,610) (Notes D, F,G,H,I) 32,920
---------- ---------- ---------- ----------- ----------
Total Liabilities 35,835 42,591 26,630 (26,610) 78,446
---------- ---------- ---------- ----------- ----------
NET ASSETS: $7,509,445 $4,452,386 $3,330,923 $(7,509,445) $7,783,309
========== ========== ========== =========== ==========
NET ASSETS CONSIST OF:
Paid-in capital $7,509,445 $3,981,905 $2,927,756 $(7,509,445) (Notes C) $6,909,661
Undistributed Net Income, or
(distributions in excess
of net investment income) - 14,467 120 - 14,587
Accumulated net realized gain
(loss) on investments
and foreign currency, or
(distributions in excess of
net realized gains) - 119,272 113,109 - 232,381
Net unrealized appreciation
(depreciation) on
investments, foreign
currency and other assets - 336,742 289,938 - 626,680
---------- ---------- ---------- ----------- ----------
NET ASSETS: $7,509,445 $4,452,386 $3,330,923 $(7,509,445) $7,783,309
========== ========== ========== =========== ==========
Class A - $4,452,386 - - $4,452,386
========== ========== ========== =========== ==========
Class C - - $3,330,923 - $3,330,923
========== ========== ========== =========== ==========
SHARES OUTSTANDING:
Class A - 336,238 - - 336,238
========== ========== ========== =========== ==========
Class C - - 257,960 - 257,960
========== ========== ========== =========== ==========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and redemptions
price per share - $ 13.24 - - $ 13.24
========== ========== ========== =========== ==========
Maximum offering price per share
(based on maximum sales
charge of 5.75%) - $ 14.05 - - $ 14.05
========== ========== ========== =========== ==========
CLASS C SHARES
Net asset value and offering price
per share* - - $ 12.91 - $ 12.91
========== ========== ========== =========== ==========
Note A: Cost of investments 6,795,080 6,795,080
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
BALANCED TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
(REFERENCES ARE
BALANCED BALANCED BALANCED TO PRO FORMA BALANCED
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
--------- -------- -------- --------------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 95,126 $ 53,520 $ 41,606 (95,126) (Note C) $ 95,126
Dividend income 29,802 16,664 13,138 (29,802) (Note C) 29,802
-------- -------- -------- --------- ---------
124,928 70,184 54,744 (124,928) 124,928
-------- -------- -------- --------- ---------
EXPENSES:
Allocated expenses from Hub - 24,325 18,940 (43,265) (Note C) -
Investment Advisory fee 26,625 - - - 26,625
Sponsor fee - 3,886 3,037 - 6,923
Transfer agent - 18,471 15,217 - 33,688
Custody, Fund accounting and
administration 46,088 12,397 12,397 (17,750) (Note F) 53,132
Registration - 7,613 6,729 1,800 (Note G) 16,142
Audit 3,863 4,959 4,959 (1,500) (Note H) 12,281
Amortization of organization
expense 3,497 4,845 4,663 (8,160) (Note D) 4,845
Printing - 2,002 2,856 (1,000) (Note I) 3,858
Legal 1,356 601 514 - 2,471
Miscellaneous 2,378 434 447 - 3,259
Trustee 610 326 206 - 1,142
-------- -------- -------- --------- ---------
Total expenses 84,417 79,859 69,965 (69,875) 164,366
-------- -------- -------- --------- ---------
Less: Waiver of Sponsor fees - (3,886) (3,037) - (6,923)
Reimbursement from
sponsor (41,152) (54,601) (50,222) 26,610 (Notes D, F, G, H, I) (119,365)
-------- -------- -------- --------- ---------
43,265 21,372 16,706 (43,265) 38,078
Distribution and service fees:
Class A shares - 4,857 - - 4,857
Class C shares - - 15,187 - 15,187
Class Y shares - - - - -
-------- -------- -------- --------- ---------
Net Expenses 43,265 26,229 31,893 (43,265) 58,122
-------- -------- -------- --------- ---------
NET INVESTMENT INCOME 81,663 43,955 22,851 (81,663) 66,806
REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain (loss) on:
Investments 170,356 86,872 83,484 (170,356) (Note C) 170,356
Foreign currency transactions 3,748 2,141 1,607 (3,748) 3,748
-------- -------- -------- --------- ---------
174,104 89,013 85,091 (174,104) 174,104
-------- -------- -------- --------- ---------
Net change in unrealized
appreciation (depreciation) on:
Investments 192,607 108,471 84,136 (192,607) (Note C) 192,607
Foreign currency transactions 11,712 6,816 4,896 (11,712) 11,712
-------- -------- -------- --------- ---------
204,319 115,287 89,032 (204,319) 204,319
-------- -------- -------- --------- ---------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $460,086 $248,255 $196,974 $(460,086) $ 445,229
======== ======== ======== ========= =========
Note A: Net of foreign
withholding tax of: - - - - -
-------- -------- -------- --------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE> 54
INCOME OPPORTUNITY PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----------
<C> <S> <C>
CORPORATE BONDS--48.1%
CHEMICALS--4.4%
$200,000 Climachem, 10.75%, 12/01/07... $ 207,500
300,000 Trans-Resources, 10.75%,
03/15/08...................... 309,000
-----------
516,500
-----------
ENVIRONMENTAL--1.6%
200,000 ATC Group Services, 12.00%,
01/15/08...................... 184,000
-----------
FINANCIAL SERVICES--2.3%
300,000 Salomon Brothers, 0.00%,
09/18/98...................... 276,000
-----------
HOME CONSTRUCTION, FURNISHINGS &
APPLIANCES--2.6%
300,000 Imperial Home Decor Group,
11.00%, 03/15/08.............. 310,500
-----------
INDUSTRIAL--6.3%
250,000 Aqua Chem, 11.25%, 07/01/08... 254,375
250,000 Pen-Tab Industries, 10.875%,
02/01/07...................... 247,500
250,000 Samsonite, 10.75%, 06/15/08... 248,125
-----------
750,000
-----------
MEDIA--BROADCASTING &
PUBLISHING--6.1%
250,000 Cumulus Media, 10.375%,
07/01/08...................... 253,750
250,000 Perry-Judd, 10.625%,
12/15/07...................... 262,500
200,000 Source Media, 12.00%,
11/01/04...................... 204,000
-----------
720,250
-----------
METALS--2.6%
300,000 Doe Run Resources, 11.25%,
03/15/05...................... 303,000
-----------
OIL & GAS--2.1%
250,000 Panaco, 10.625%, 10/01/04..... 251,250
-----------
RESTAURANTS--2.3%
300,000 Planet Hollywood, 12.00%,
04/01/05...................... 271,500
-----------
RETAIL--4.3%
250,000 HMV Media Group, 10.25%,
05/15/08...................... 253,750
250,000 US Office Products, 9.75%,
06/15/08...................... 250,000
-----------
503,750
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----------
<C> <S> <C>
TELEPHONE SYSTEMS-- 8.8%
$300,000 Amer Mobile/AMSC, 12.25%,
04/01/08...................... $ 282,000
250,000 Dobson Wireline, 12.25%,
06/15/08...................... 242,500
200,000 Iridium Capital, 14.00%,
07/15/05...................... 222,500
300,000 Long Distance International,
12.25%, 04/15/08.............. 297,000
-----------
1,044,000
-----------
TRANSPORTATION--4.7%
250,000 American Commercial Lines,
10.25%, 06/30/08.............. 253,125
300,000 Stena Line, 10.625%,
06/01/08...................... 303,750
-----------
556,875
-----------
TOTAL CORPORATE BONDS (COST $5,695,915)... 5,687,625
-----------
CONVERTIBLE CORPORATE BONDS--2.7%
METALS--2.7%
500,000 Nippon Denro Ispat, 3.00%,
04/01/01...................... 250,625
500,000 NTS Steel Group Public++,
4.00%, 12/16/08............... 70,000
-----------
320,625
-----------
TOTAL CONVERTIBLE CORPORATE BONDS (COST
$531,422)................................. 320,625
-----------
EUROBONDS--6.7%
ARGENTINA--2.5%
300,000 Telefonica De Argentina,
9.125%, 05/07/08.............. 282,750
-----------
CHINA--2.2%
300,000 Cathay International, 13.00%,
04/15/08...................... 264,000
-----------
ECUADOR--2.0%
250,000 Conecel Holdings, 14.00%,
10/01/00...................... 240,000
-----------
TOTAL EUROBONDS (COST $856,908)........... 786,750
-----------
SOVEREIGN GOVERNMENT OBLIGATIONS--9.7%
ARGENTINA--2.4%
300,000 Republic Of Argentina, 9.75%,
09/19/27...................... 277,950
-----------
JAMAICA--2.5%
300,000 Government of Jamaica,
10.875%, 06/10/05............. 300,000
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE> 55
INCOME OPPORTUNITY PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----------
<C> <S> <C>
SOVEREIGN GOVERNMENT OBLIGATIONS--CONTINUED
RUSSIA--1.8%
$ 7,894 Russian Ian, 6.625%,
12/15/15...................... $ 4,371
450,000 Russia-Principal Loan, 6.719%,
12/15/20...................... 212,625
-----------
216,996
-----------
VENEZUELA--3.0%
428,570 Republic Of Venezuela FLIRB,
6.625%, 03/31/07.............. 353,570
-----------
TOTAL SOVEREIGN GOVERNMENT OBLIGATIONS
(COST $1,264,303)......................... 1,148,516
-----------
BRADY BONDS--15.4%
ARGENTINA--1.8%
237,499 Republic of Argentina, FRB,
6.625%, 03/31/05.............. 209,949
-----------
BRAZIL--3.3%
522,095 Republic of Brazil, 8.00%,
04/15/14...................... 384,392
-----------
BULGARIA--2.1%
350,000 Government of Bulgaria, IAB,
6.563%, 07/28/11.............. 249,594
-----------
ECUADOR--2.6%
556,335 Ecuador-Bearer-PDI, 3.25%,
02/27/15...................... 310,157
-----------
MEXICO--2.5%
350,000 Mexico Par Ser B Cum, 6.25%,
12/31/19...................... 289,844
-----------
PANAMA--1.6%
250,000 Panama-Int Reduction Bond,
3.75%, 07/17/14............... 185,625
-----------
PERU--1.5%
300,000 Government of Peru, PDI Bond,
4.00%, 03/07/17............... 183,000
-----------
TOTAL BRADY BONDS (COST $1,909,089)....... 1,812,561
-----------
YANKEE BONDS--14.3%
BRAZIL--2.9%
400,000 Paging Network Do Brasil,
13.50%, 06/06/05.............. 342,500
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- --------- -----------
<C> <S> <C>
DOMINICAN REPUBLIC--2.5%
$300,000 Tricom, 11.375%, 09/01/04..... $ 290,625
-----------
ECUADOR--2.9%
350,000 Conecel, 14.00%, 05/01/02..... 336,000
-----------
HONG KONG--3.0%
500,000 GS Superhighway Holdings,
10.25%, 08/15/07.............. 355,625
-----------
INDONESIA--0.9%
500,000 FSW International++, 12.50%,
11/01/06...................... 110,000
-----------
KOREA--2.1%
300,000 Korea Electric Power, 7.00%,
02/01/27...................... 253,858
-----------
TOTAL YANKEE BONDS
(COST $2,294,513)......................... 1,688,608
-----------
WARRANTS--0.0%
TELEPHONE SYSTEMS--0.0%
200 Primus Telecommunications..... 4,000
-----------
TOTAL WARRANTS (COST $0).................. 4,000
-----------
TOTAL INVESTMENTS AT VALUE--96.9% (COST
$12,552,150) (a).......................... 11,448,685
CASH AND OTHER ASSETS NET OF
LIABILITIES--3.1%......................... 461,119
-----------
NET ASSETS--100.0%........................ $11,909,804
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
++ Security currently in default of interest payment. The Portfolio is not
accruing stated interest.
(a) The aggregate identified cost for federal income tax purposes is
$12,552,150, resulting in gross unrealized appreciation and depreciation of
$107,936 and $1,211,401, respectively, and net unrealized depreciation of
$1,103,465.
DCB - Debt Conversion Bond
FLIRB - Front-Load Interest Reduction Bonds
FRB - Floating Rate Bond
IAB - Interest Arrears Bond
PDI - Past Due Interest
INCOME OPPORTUNITY TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
INCOME INCOME INCOME (REFERENCES ARE INCOME
OPPORTUNITY OPPORTUNITY OPPORTUNITY TO PRO FORMA OPPORTUNITY
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
----------- ----------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding Select
Advisors Portfolios, at value $ - $7,424,299 $4,394,632 ($11,818,931) (Note C) $ -
Investments at Value (Note A) 11,448,685 - - - 11,448,685
Cash and foreign currency 76,849 - - - 76,849
Receivables for:
Securities sold 189,297 - - - 189,297
Fund shares sold - 21,772 664 - 22,436
Dividend, interest, and
foreign withholding tax 376,514 - - - 376,514
Gain on forward contracts - - - - -
Deferred organization expenses 8,885 12,319 11,852 (20,737) (Note D) 12,319
Reimbursement receivable from
Advisor/Sponsor - 137,450 87,831 (11,678) (Notes D, E,F,G,H,I) 213,603
----------- ---------- ---------- ------------ -----------
Total Assets 12,100,230 7,595,840 4,494,979 (11,851,346) 12,339,703
----------- ---------- ---------- ------------ -----------
LIABILITIES:
Payable for fund shares redeemed - 15,265 46 - 15,311
Distribution payable from income - 79,002 38,409 - 117,411
Payable for investments purchased 250,000 - - - 250,000
Due to Custodian - - - - -
Payable to Advisor (Sponsor) 4,605 - - (4,605) (Note E) -
Other accrued expenses 26,694 26,556 21,737 (27,810) (Notes D,F,G,H,I) 47,177
----------- ---------- ---------- ------------ -----------
Total Liabilities 281,299 120,823 60,192 (32,415) 429,899
----------- ---------- ---------- ------------ -----------
NET ASSETS: $11,818,931 $7,475,017 $4,434,787 ($11,818,931) $11,909,804
=========== ========== ========== ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital $11,818,931 $8,334,533 $4,906,639 ($11,818,931) (Note C) $13,241,172
Undistributed Net Income, or
(distributions in excess of
net investment income) - 39,972 17,833 - 57,805
Accumulated net realized gain
(loss) on investments and foreign
currency, or (distributions in
excess of net realized gains) - (151,391) (134,315) - (285,706)
Net unrealized appreciation
(depreciation) on investments,
foreign currency and other assets - (748,097) (355,370) - (1,103,467)
=========== ========== ========== ============ ===========
NET ASSETS: $11,818,931 $7,475,017 $4,434,787 ($11,818,931) $11,909,804
=========== ========== ========== ============ ===========
Class A - $7,475,017 - - $ 7,475,017
=========== ========== ========== ============ ===========
Class C - - $4,434,787 - $ 4,434,787
=========== ========== ========== ============ ===========
SHARES OUTSTANDING:
Class A - 789,805 - - 789,805
=========== ========== ========== ============ ===========
Class C - - 480,262 - 480,262
=========== ========== ========== ============ ===========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and redemptions
price per share - $ 9.46 - - $ 9.46
=========== ========== ========== ============ ===========
Maximum offering price per share
(based on maximum sales charge
of 4.75%) - $ 9.93 - - $ 9.93
=========== ========== ========== ============ ===========
CLASS C SHARES
Net asset value and offering
price per share* - - $ 9.23 - $ 9.23
=========== ========== ========== ============ ===========
Note A: Cost of investments 12,552,150 12,552,150
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
INCOME OPPORTUNITY TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
INCOME INCOME INCOME (REFERENCES ARE INCOME
OPPORTUNITY OPPORTUNITY OPPORTUNITY TO PRO FORMA OPPORTUNITY
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
----------- ----------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 678,858 $ 436,017 $ 242,841 (678,858) (Note C) $ 678,858
Dividend income - - - - (Note C) -
--------- --------- --------- --------- ---------
678,858 436,017 242,841 (678,858) 678,858
--------- --------- --------- --------- ---------
EXPENSES:
Allocated expenses from Hub - 41,901 23,324 (65,225) (Note C) -
Investment Advisory fee 36,866 - - - 36,866
Sponsor fee - 7,388 4,137 - 11,525
Transfer agent - 23,416 15,935 - 39,351
Custody, Fund accounting and
administration 44,785 14,876 14,876 (17,750) (Note F) 56,787
Registration - 9,427 7,015 1,700 (Note G) 18,142
Audit 6,436 5,455 5,455 (1,500) (Note H) 15,846
Amortization of organization expense 3,497 4,845 4,663 (8,160) (Note D) 4,845
Printing - 5,276 4,987 (2,100) (Note I) 8,163
Legal 3,258 1,584 898 5,740
Miscellaneous 4,923 1,146 780 - 6,849
Trustee 1,464 858 362 - 2,684
--------- --------- --------- --------- ---------
Total expenses 101,229 116,172 82,432 (93,035) 206,798
--------- --------- --------- --------- ---------
Less: Waiver of Sponsor fees - (7,388) (4,137) - (11,525)
Reimbursement from sponsor (36,004) (73,693) (58,646) 27,810 (Notes D,F,G,H,I) (140,533)
--------- --------- --------- --------- ---------
65,225 35,091 19,649 (65,225) 54,740
Distribution and service fees:
Class A shares - 9,234 - - 9,234
Class C shares - - 20,682 - 20,682
Class Y shares - - - - -
--------- --------- --------- --------- ---------
Net Expenses 65,225 44,325 40,331 (65,225) 84,656
--------- --------- --------- --------- ---------
NET INVESTMENT INCOME 613,633 391,692 202,510 (613,633) 594,202
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments 56,045 83,940 (27,895) (56,045) (Note C) 56,045
Foreign currency transactions - - - - -
--------- --------- --------- --------- ---------
56,045 83,940 (27,895) (56,045) 56,045
--------- --------- --------- --------- ---------
Net change in unrealized appreciation
(depreciation) on:
Investments (641,859) (448,853) (193,006) 641,859 (Note C) (641,859)
Foreign currency transactions 147 68 79 (147) 147
--------- --------- --------- --------- ---------
(641,712) (448,785) (192,927) 641,712 (641,712)
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 27,966 $ 26,847 ($ 18,312) ($ 27,966) $ 8,535
========= ========= ========= ========= =========
Note A: Net of foreign
withholding tax of: - - - - -
--------- --------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE> 56
BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
ASSET BACKED SECURITIES--8.1%
$ 750,000 Chemical Credit Card Master
Trust, 5.98%, 09/15/08...... $ 755,280
247,218 Navistar Financial, 6.35%,
11/15/02.................... 248,281
500,000 World Omni Auto Lease,
6.18%, 11/25/03............. 500,850
-----------
TOTAL ASSET BACKED SECURITIES (COST
$1,445,454).............................. 1,504,411
-----------
CORPORATE BONDS--31.9%
BANKING--4.7%
500,000 Bank of New York, 8.50%,
12/15/04.................... 561,800
225,000 Credit Suisse, 7.90%,
05/01/07.................... 240,566
78,063 Mercantile Safe Deposit +,
12.125%, 01/02/01........... 80,644
-----------
883,010
-----------
COMMUNICATIONS--2.8%
500,000 Harris Corporation, 6.65%,
08/01/06.................... 513,742
-----------
ELECTRIC UTILITIES--8.0%
250,000 AES, 8.50%, 11/01/07........ 252,500
500,000 Consumers Energy, 6.50%,
06/15/18.................... 496,565
750,000 Niagra Mohawk Power, 7.125%,
07/01/01.................... 749,063
-----------
1,498,128
-----------
FINANCIAL SERVICES--6.3%
350,000 First Union, 6.55%,
10/15/35.................... 362,005
750,000 Safeco Capital, 8.072%,
07/15/37.................... 801,938
-----------
1,163,943
-----------
FOREST PRODUCTS & PAPER--2.9%
250,000 Georgia Pacific, 9.50%,
05/15/22.................... 283,472
250,000 Sweetheart Cup, 9.625%,
09/01/00.................... 247,500
-----------
530,972
-----------
HEALTH CARE PROVIDERS--3.3%
650,000 Columbia/HCA Health, 6.73%,
07/15/45.................... 619,643
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
MEDIA--BROADCASTING &
PUBLISHING--1.6%
$ 250,000 News America Holdings,
10.125%, 10/15/12........... $ 293,564
-----------
TELEPHONE SYSTEMS--2.3%
400,000 Worldcom, 8.875%, 01/15/06.. 433,000
-----------
TOTAL CORPORATE BONDS (COST
$5,809,704).............................. 5,936,002
-----------
CONVERTIBLE CORPORATE BONDS--2.3%
HEALTH CARE PROVIDERS--2.3%
500,000 Tenet Healthcare, 6.00%,
12/01/05.................... 426,250
-----------
TOTAL CONVERTIBLE CORPORATE BONDS (COST
$427,713)................................ 426,250
-----------
MORTGAGE BACKED SECURITIES--29.2%
137,925 Chase Manhattan Grantor
Trust, 5.20%, 02/15/02...... 137,328
1,250,000 Federal Home Loan Bank,
5.625%, 03/19/01............ 1,248,810
503,755 Federal Home Loan Mortgage
Association, 6.00%,
08/01/10.................... 499,286
153,033 Federal Home Loan Mortgage
Association, 6.00%,
05/01/09.................... 152,167
46,929 Federal Home Loan Mortgage
Association, 6.00%,
10/01/10.................... 46,512
1,000,000 Federal National Mortgage
Association, 5.75%,
04/15/03.................... 1,002,679
1,000,000 Federal National Mortgage
Association, 5.75%,
02/15/08.................... 998,638
372,352 Government National Mortgage
Association, 9.00%,
08/15/19.................... 401,648
353,416 Government National Mortgage
Association, 6.50%,
01/15/24.................... 353,822
464,561 Government National Mortgage
Association, 7.00%,
06/15/09.................... 475,878
112,117 Government National Mortgage
Association, 7.50%,
12/15/27.................... 115,166
-----------
TOTAL MORTGAGE BACKED SECURITIES (COST
$5,342,829).............................. 5,431,934
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
23
<PAGE> 57
BOND PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ---------- -----------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS--7.1%
$ 250,000 U.S. Treasury Bonds, 6.50%,
05/31/02.................... $ 258,281
1,000,000 U.S. Treasury Notes, 6.125%,
11/15/27.................... 1,071,562
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST
$1,282,621).............................. 1,329,843
-----------
YANKEE BONDS--3.6%
CANADA--3.6%
600,000 Province of Quebec, 7.50%,
07/15/23.................... 667,038
-----------
TOTAL YANKEE BONDS (COST $586,248)....... 667,038
-----------
AGENCY FOR INTERNATIONAL
DEVELOPMENT BONDS--4.1%+
CENTRAL AMERICA--2.6%
135,000 Central America
International Development,
Series F, 10.00%,
12/01/11.................... 158,525
135,000 Central America
International Development,
Series G, 10.00%,
12/01/11.................... 158,525
135,000 Central America
International Development,
Series H, 10.00%,
12/01/11.................... 158,525
-----------
475,575
-----------
HONDURAS--1.5%
100,000 Republic of Honduras
International Development,
Series D, 13.00%,
06/01/11.................... 146,576
100,000 Republic of Honduras
International Development,
Series C, 13.00%,
06/01/06.................... 129,395
-----------
275,971
-----------
TOTAL AGENCY FOR INTERNATIONAL
DEVELOPMENT BONDS (COST $605,000)........ 751,546
-----------
<CAPTION>
SHARES VALUE
- ---------- -----------
<C> <S> <C>
PREFERRED STOCKS--5.3%
INDUSTRIAL--2.5%
9,600 Appalachian Power........... $ 246,000
8,700 Ohio Power.................. 222,394
-----------
468,394
-----------
OIL & GAS--2.8%
20,000 Transcanada Pipelines....... 522,500
-----------
TOTAL PREFERRED STOCKS
(COST $984,274).......................... 990,894
-----------
TOTAL INVESTMENTS AT VALUE--91.6%
(COST $16,483,843)(a).................... 17,037,918
CASH AND OTHER ASSETS
NET OF LIABILITIES--8.4%................. 1,764,446
-----------
NET ASSETS--100.0%....................... $18,802,364
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
+ Restricted and Board valued security (Note 5).
(a) The aggregate identified cost for federal income tax purposes is
$16,483,843, resulting in gross unrealized appreciation and depreciation of
$566,753 and $12,678, respectively, and net unrealized appreciation of
$554,075.
BOND TRUST A, TRUST C & SEPARATE A
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
(REFERENCES ARE
BOND BOND BOND BOND TO PRO FORMA BOND
PORTFOLIO TRUST A TRUST C SEPARATE A FOOTNOTES) PRO FORMA
----------- ---------- -------- ----------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding Select
Advisors Portfolios, at value - $4,137,525 $853,598 $13,614,678 ($18,605,801) (Note C) -
Investments at Value (Note A) $17,037,918 - - - - $17,037,918
Cash and foreign currency 1,325,915 - - - - 1,325,915
Receivables for:
Securities sold 10,635 - - - - 10,635
Fund shares sold - 293 228 - - 521
Dividend, interest, and
foreign withholding tax 247,115 - - - - 247,115
Gain on forward contracts - - - - - -
Deferred organization expenses 8,885 12,319 11,877 - (20,762) (Note D) 12,319
Reimbursement receivable from
Advisor/Sponsor 10,967 155,666 128,794 - 1,478 (Notes D,E,F,G,H,I) 296,905
----------- ---------- -------- ----------- ------------ -----------
Total Assets 18,641,435 4,305,803 994,497 13,614,678 (18,625,085) 18,931,328
----------- ---------- -------- ----------- ------------ -----------
LIABILITIES:
Payable for fund shares redeemed - 800 - - - 800
Distribution payable from income - 16,405 3,853 - - 20,258
Payable for investments purchased - - - - - -
Due to Custodian - - - - - -
Payable to Advisor (Sponsor) - - - - - (Note E) -
Other accrued expenses 35,634 21,836 11,971 57,749 (19,284) (Notes D,F,G,H,I) 107,906
----------- ---------- -------- ----------- ------------ -----------
Total Liabilities 35,634 39,041 15,824 57,749 (19,284) 128,964
----------- ---------- -------- ----------- ------------ -----------
NET ASSETS: $18,605,801 $4,266,762 $978,673 $13,556,929 ($18,605,801) $18,802,364
=========== ========== ======== =========== ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital $18,605,801 $4,182,147 $955,809 $10,000,000 ($18,605,801) (Note C) $15,137,956
Undistributed Net Income, or
(distributions in excess
of net investment income) - 15,160 830 2,754,368 - 2,770,358
Accumulated net realized gain
(loss) on investments and foreign
currency, or (distributions in
excess of net realized gains) - 32,404 5,858 333,854 - 372,116
Net unrealized appreciation
(depreciation) on investments,
foreign currency and other assets - 37,051 16,176 468,707 - 521,934
=========== ========== ======== =========== ============ ===========
NET ASSETS: $18,605,801 $4,266,762 $978,673 $13,556,929 ($18,605,801) $18,802,364
=========== ========== ======== =========== ============ ===========
Class A - $4,266,762 - - - $ 4,266,762
=========== ========== ======== =========== ============ ===========
Class C - - $978,673 - - $ 978,673
=========== ========== ======== =========== ============ ===========
Class Y - - - $13,556,930 - $13,556,930
=========== ========== ======== =========== ============ ===========
SHARES OUTSTANDING:
Class A - 410,045 - - - 410,045
=========== ========== ======== =========== ============ ===========
Class C - - 96,224 - - 96,224
=========== ========== ======== =========== ============ ===========
Class Y - - - 1,000,000 - 1,000,000
=========== ========== ======== =========== ============ ===========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and redemptions
price per share - $ 10.41 - - - $ 10.41
=========== ========== ======== =========== ============ ===========
Maximum offering price per share
(based on maximum sales charge
of 4.75%) - $ 10.93 - - - $ 10.93
=========== ========== ======== =========== ============ ===========
CLASS C SHARES
Net asset value and offering
price per share* - - $ 10.17 - - $ 10.17
=========== ========== ======== =========== ============ ===========
CLASS Y SHARES
Net asset value and offering
price per share - - - $ 13.56 - $ 13.56
=========== ========== ======== =========== ============ ===========
Note A: Cost of investments 16,483,843 16,483,843
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
BOND TRUST A, TRUST C & SEPARATE A
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
(REFERENCES ARE
BOND BOND BOND BOND TO PRO FORMA BOND
PORTFOLIO TRUST A TRUST C SEPARATE A FOOTNOTES) PRO FORMA
--------- --------- --------- ---------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 535,008 $ 79,322 $ 23,298 $ 432,387 (535,007) (Note C) $ 535,008
Dividend income 40,647 6,574 1,764 32,309 (40,647) (Note C) 40,647
--------- --------- --------- --------- --------- ---------
575,655 85,896 25,062 464,696 (575,654) 575,655
--------- --------- --------- --------- --------- ---------
EXPENSES:
Allocated expenses from Hub - 10,381 3,033 56,170 (69,584) (Note C) -
Investment Advisory fee 45,023 - - - - 45,023
Sponsor fee - 2,557 822 - - 3,379
Transfer agent - 16,835 14,499 - - 31,334
Custody, Fund accounting and
administration 47,279 14,876 14,794 - (14,750) (Note F) 62,199
Registration - 6,777 6,282 - 5,600 (Note G) 18,659
Audit 5,901 4,959 4,932 - (1,500) (Note H) 14,292
Amortization of organization expense 3,497 4,845 4,637 - (8,134) (Note D) 4,845
Printing - 1,444 1,080 - (500) (Note I) 2,024
Legal 2,737 433 194 - - 3,364
Miscellaneous 5,905 313 169 - - 6,387
Trustee 1,231 235 79 - - 1,545
--------- --------- --------- --------- --------- ---------
Total expenses 111,573 63,655 50,521 56,170 (88,868) 193,051
--------- --------- --------- --------- --------- ---------
Less: Waiver of Sponsor fees - (2,557) (822) - - (3,379)
Reimbursement from sponsor (41,992) (52,787) (47,026) - 19,284 (Notes D,F,G,H,I) (122,521)
--------- --------- --------- --------- --------- ---------
69,581 8,311 2,673 56,170 (69,584) 67,151
Distribution and service fees:
Class A shares - 3,197 - - - 3,197
Class C shares - - 4,111 - - 4,111
Class Y shares - - - - - -
--------- --------- --------- --------- --------- ---------
Net Expenses 69,581 11,508 6,784 56,170 (69,584) 74,459
--------- --------- --------- --------- --------- ---------
NET INVESTMENT INCOME 506,074 74,388 18,278 408,526 (506,070) 501,196
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments 125,262 36,043 7,299 81,920 (125,262) (Note C) 125,262
Foreign currency transactions - - - - - -
--------- --------- --------- --------- --------- ---------
125,262 36,043 7,299 81,920 (125,262) 125,262
--------- --------- --------- --------- --------- ---------
Net change in unrealized appreciation
(depreciation) on:
Investments 106,805 5,239 3,047 98,519 (106,805) 106,805
Foreign currency transactions - - - - - -
--------- --------- --------- --------- --------- ---------
106,805 5,239 3,047 98,519 (106,805) (Note C) 106,805
--------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 738,141 $ 115,670 $ 28,624 $ 588,965 ($738,137) $ 733,263
========= ========= ========= ========= ========= =========
Note A: Net of foreign
withholding tax of: - - - - - -
--------- --------- --------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE> 58
VALUE PLUS PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ------- -----------
<C> <S> <C>
COMMON STOCKS--99.8%
AEROSPACE & DEFENSE--1.8%
10,100 Boeing......................... $ 450,081
-----------
AUTOMOTIVE--1.7%
9,000 ITT Industries................. 336,375
1,500 Magna International, Class A... 102,938
-----------
439,313
-----------
BANKING--9.1%
10,500 First American................. 505,313
6,300 First Chicago.................. 558,338
6,900 Key............................ 245,813
16,500 North Folk Bancorp............. 403,219
12,000 SLM Holding.................... 588,000
-----------
2,300,683
-----------
BEVERAGES, FOOD & TOBACCO--9.7%
7,500 General Mills.................. 512,813
9,200 McCormick & Company............ 328,612
7,000 McDonald's..................... 483,000
10,000 Pepsico........................ 411,875
2,700 Ralston-Ralston Purina Group... 315,394
16,000 Sysco.......................... 410,000
-----------
2,461,694
-----------
CHEMICALS--1.1%
3,600 Du Pont (E.I.) De Nemours...... 268,650
-----------
COMMUNICATIONS--0.7%
7,200 Scientific-Atlanta............. 182,700
-----------
COMPUTER SOFTWARE &
PROCESSING--5.3%
10,000 Ceridian....................... 587,500
9,000 Computer Associates
International.................. 500,063
7,200 First Data Corporation......... 239,850
-----------
1,327,413
-----------
COMPUTERS & INFORMATION--3.9%
12,400 Compaq Computer................ 351,850
12,200 Sun Microsystems*.............. 529,938
8,000 Western Digital................ 94,500
-----------
976,288
-----------
ELECTRIC UTILITIES--1.1%
6,100 CMS Energy..................... 268,400
-----------
ELECTRONICS--4.1%
7,500 Intel.......................... 555,938
6,600 Thomas & Betts................. 325,050
4,700 Xilinx*........................ 159,800
-----------
1,040,788
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ------- -----------
<C> <S> <C>
ENTERTAINMENT & LEISURE--3.1%
13,400 Mattel......................... $ 566,988
2,000 The Walt Disney Company........ 210,125
-----------
777,113
-----------
FINANCIAL SERVICES--2.5%
10,500 Federal National Mortgage
Association.................... 637,875
-----------
FOREST PRODUCTS & PAPER-- 4.2%
9,400 Kimberly-Clark................. 431,225
11,000 Mead........................... 349,250
7,300 Tenneco........................ 277,856
-----------
1,058,331
-----------
HEALTH CARE PROVIDERS--3.5%
10,900 Health Care & Retirement....... 429,869
16,600 Healthsouth.................... 443,013
-----------
872,882
-----------
HEAVY INDUSTRY--0.9%
3,300 Applied Materials.............. 97,350
2,750 Ingersoll-Rand................. 121,172
-----------
218,522
-----------
HOME CONSTRUCTION, FURNISHINGS
& APPLIANCES--6.2%
6,000 General Electric............... 546,000
6,000 Johnson Controls............... 343,125
13,500 Newell......................... 672,469
-----------
1,561,594
-----------
INSURANCE--8.1%
5,000 Aetna.......................... 380,625
9,000 Equitable Companies............ 674,430
5,000 Ohio Casualty.................. 221,250
11,100 Reliastar Financial............ 532,800
4,000 Travelers Group................ 242,500
-----------
2,051,605
-----------
MEDICAL SUPPLIES--2.2%
7,000 Becton Dickinson & Company..... 543,375
-----------
OIL & GAS--9.9%
8,300 Mobil.......................... 635,988
10,600 Noble Drilling................. 255,063
5,500 Schlumberger................... 375,719
9,400 Texaco......................... 561,063
19,800 Williams Companies............. 668,250
-----------
2,496,083
-----------
PHARMACEUTICALS--7.9%
10,000 Abott Laboratories............. 408,750
8,400 Amgen.......................... 549,150
4,100 Merck.......................... 548,375
14,000 Sigma Aldrich.................. 491,750
-----------
1,998,025
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
25
<PAGE> 59
VALUE PLUS PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE
- ------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
RETAILERS--4.8%
7,100 Consolidated Stores*........... $ 257,375
5,500 Federated Department Stores.... 295,969
10,700 Wal-Mart Stores................ 650,025
-----------
1,203,369
-----------
TELEPHONE SYSTEMS--5.3%
9,600 Alltel......................... 446,400
8,000 Bell Atlantic.................. 365,000
13,000 SBC Communications............. 520,000
-----------
1,331,400
-----------
TRANSPORTATION--2.7%
5,500 Trinity Industries............. 228,250
4,400 US Freightways................. 144,512
13,700 Wisconsin Central Transport*... 299,688
-----------
672,450
-----------
TOTAL COMMON STOCKS
(COST $25,412,137)....................... 25,138,634
-----------
<CAPTION>
VALUE
-----------
<C> <S> <C>
TOTAL INVESTMENTS AT VALUE--99.8%
(COST $25,412,137)(a).................... $25,138,634
CASH AND OTHER ASSETS NET OF
LIABILITIES--0.2%........................ 40,169
-----------
NET ASSETS--100.0%....................... $25,178,803
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
(a) The aggregate identified cost for federal income tax purposes is
$25,412,137, resulting in gross unrealized appreciation and depreciation of
$967,247 and $1,240,750, respectively, and net unrealized depreciation of
$273,503.
VALUE PLUS TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
AT JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
VALUE VALUE VALUE (REFERENCES ARE GROWTH &
PLUS PLUS PLUS TO PRO FORMA INCOME
PORTFOLIO TRUST A TRUST C FOOTNOTES) PRO FORMA
----------- ----------- -------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investment in corresponding Select
Advisors Portfolios, at value - $24,937,702 $242,386 ($25,180,088) (Note C) -
Investments at Value (Note A) $25,138,634 - - - $25,138,634
Cash and foreign currency 232,463 - - - 232,463
Receivables for:
Securities sold - - - - -
Fund shares sold - - - - -
Dividend, interest, and foreign
withholding tax 25,739 - - - 25,739
Gain on forward contracts - - - - -
Deferred organization expenses - - - - -
Reimbursement receivable from
Advisor/Sponsor - 24,182 17,904 (32,024) (Notes E,F,G,H,I) 10,062
----------- ----------- -------- ------------ -----------
Total Assets 25,396,836 24,961,884 260,290 (25,212,112) 25,406,898
----------- ----------- -------- ------------ -----------
LIABILITIES:
Payable for fund shares redeemed - - - - -
Distribution payable from income - - - - -
Payable for investments purchased 188,827 - - - 188,827
Due to Custodian - - - - -
Payable to Advisor (Sponsor) 16,474 - - (16,474) (Note E) -
Other accrued expenses 11,447 30,018 13,353 (15,550) (Notes F,G,H,I) 39,268
----------- ----------- -------- ------------ -----------
Total Liabilities 216,748 30,018 13,353 (32,024) 228,095
----------- ----------- -------- ------------ -----------
NET ASSETS: $25,180,088 $24,931,866 $246,937 ($25,180,088) $25,178,803
=========== =========== ======== ============ ===========
NET ASSETS CONSIST OF:
Paid-in capital $25,180,088 $25,254,219 $250,600 ($25,180,088) (Note C) $25,504,819
Undistributed Net Income, or
(distributions in excess of
net investment income) - 19,908 (109) - 19,799
Accumulated net realized gain
(loss) on investments and foreign
currency, or (distributions in
excess of net realized gains) - (71,602) (710) - (72,312)
Net unrealized appreciation
(depreciation) on investments,
foreign currency and other assets - (270,659) (2,844) - (273,503)
=========== =========== ======== ============ ===========
NET ASSETS: $25,180,088 $24,931,866 $246,937 ($25,180,088) $25,178,803
=========== =========== ======== ============ ===========
Class A - $24,931,866 - - $24,931,866
=========== =========== ======== ============ ===========
Class C - - $246,937 - $ 246,937
=========== =========== ======== ============ ===========
SHARES OUTSTANDING:
Class A - 2,526,311 - - 2,526,311
=========== =========== ======== ============ ===========
Class C - - 25,061 - 25,061
=========== =========== ======== ============ ===========
NET ASSET VALUE:
CLASS A SHARES
Net asset value and redemptions
price per share - $ 9.87 - - $ 9.87
=========== =========== ======== ============ ===========
Maximum offering price per share
(based on maximum sales charge
of 5.75%) - $ 10.47 - - $ 10.47
=========== =========== ======== ============ ===========
CLASS C SHARES
Net asset value and offering
price per share* - - $ 9.85 - $ 9.85
=========== =========== ======== ============ ===========
Note A: Cost of investments 25,412,137 25,412,137
</TABLE>
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
The accompanying notes are an integral part of the financial statements.
VALUE PLUS TRUST A & TRUST C
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
ADJUSTMENTS
VALUE VALUE VALUE VALUE (REFERENCES ARE VALUE
PLUS PLUS PLUS PLUS TO PRO FORMA PLUS
PORTFOLIO TRUST A TRUST C SEPARATE A FOOTNOTES) PRO FORMA
--------- --------- -------- ---------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 19,785 $ 19,589 $ 196 $ 0 (19,785) (Note C) $ 19,785
Dividend income 54,237 53,703 534 - (54,237) (Note C) 54,237
--------- --------- -------- --------- --------- ---------
74,022 73,292 730 - (74,022) 74,022
--------- --------- -------- --------- --------- ---------
EXPENSES:
Allocated expenses from Hub - 36,957 367 - (37,324) (Note C) -
Investment Advisory fee 31,103 - - - - 31,103
Sponsor fee - 8,211 82 - - 8,293
Transfer agent - 6,972 4,979 - - 11,951
Custody, Fund accounting and
administration 14,799 4,150 4,150 - (17,750) (Note F) 5,349
Registration - 13,396 5,581 - 4,000 (Note G) 22,977
Audit 2,963 2,490 2,490 - (1,500) (Note H) 6,443
Amortization of organization expense - - - - - -
Printing - 996 498 - (300) (Note I) 1,194
Legal 548 299 249 - - 1,096
Miscellaneous 1,743 1,245 12 - - 3,000
Trustee 797 797 8 - - 1,602
--------- --------- -------- --------- --------- ---------
Total expenses 51,953 75,513 18,416 - (52,874) 93,008
--------- --------- -------- --------- --------- ---------
Less: Waiver of Sponsor fees - (8,211) (82) - - (8,293)
Reimbursement from sponsor (14,629) (24,182) (17,904) - 15,550 (Notes F,G,H,I) (41,165)
--------- --------- -------- --------- --------- ---------
37,324 43,120 430 - (37,324) 43,550
Distribution and service fees:
Class A shares - 10,264 - - - 10,264
Class C shares - - 409 - - 409
--------- --------- -------- --------- --------- ---------
Net Expenses 37,324 53,384 839 - (37,324) 54,223
--------- --------- -------- --------- --------- ---------
NET INVESTMENT INCOME (LOSS) 36,698 19,908 (109) - (36,698) 19,799
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments (72,312) (71,602) (710) - 72,312 (Note C) (72,312)
Foreign currency transactions - - - - - -
--------- --------- -------- --------- --------- ---------
(72,312) (71,602) (710) - 72,312 (72,312)
--------- --------- -------- --------- --------- ---------
Net change in unrealized appreciation
(depreciation) on:
Investments (273,503) (270,659) (2,844) - 273,503 (Note C) (273,503)
Foreign currency transactions - - - - - -
--------- --------- -------- --------- --------- ---------
(273,503) (270,659) (2,844) - 273,503 (273,503)
--------- --------- -------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
--------- --------- ---------
RESULTING FROM OPERATIONS (309,117) (322,353) (3,663) $ 0 $ 309,117 ($326,016)
--------- --------- -------- ========= ========= =========
Note A: Net of foreign
withholding tax of: - - - - - -
--------- --------- -------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE> 60
SELECT ADVISORS PORTFOLIOS, SELECT ADVISORS TRUST A, SELECT ADVISORS TRUST C,
THE WESTERN AND SOUTHERN LIFE INSURANCE COMPANY SEPARATE ACCOUNT A
Notes to the Pro Forma Combining Financial Statements (unaudited)
NOTE A
Each series of Select Advisors Trust C (each a "Trust C Fund") presently
operates as part of a Hub and Spoke(R) mutual fund structure. In this structure,
each Trust C Fund (each of which is sometimes referred to as a spoke) currently
invests all of its investable assets in the corresponding series (each a "Hub")
of Select Advisors Portfolios, where the assets are commingled and commonly
invested with assets contributed by other spokes. Each Trust C Fund promotes
sales of its shares primarily to retail investors, and is charged a 1.00% Rule
12b-1 Distribution Fee and a deferred sales load on redemptions made within one
year of purchase. Seven of the series of Select Advisors Trust A (each a "Trust
A Fund") also operate as part of the Hub and Spoke(R) structure. Each Trust A
Fund currently invests all of its investable assets in the corresponding Hub.
Each Trust A Fund's shares are generally sold with a front end load and each
Trust A Fund is charged a Rule 12b-1 Distribution Fee of 0.25%. In addition, The
Western and Southern Life Insurance Company Separate Account A ("Separate
Account A") invests as a third spoke in certain Hubs.
The Reorganization, if approved, results in the operations of each current
Hub being transferred to, and continued by, a series of a single mutual fund
with separate classes of shares. The separate classes of shares operate
identically to the shares of the separate Trusts. That is, one class (Class C)
will have a distribution system and fee structure identical to that of each
current Trust C Fund, and a second class (Class A) will have a distribution
system and fee structure identical to that of each current Trust A Fund. In the
Reorganization, each Trust C Fund and each Trust A Fund will withdraw its assets
(net of its liabilities) from the corresponding Hub. Each Trust A Fund will then
acquire all of the assets (net of liabilities) of the corresponding Trust C Fund
in exchange for Class C shares of such Trust A Fund. Class C shares so received
by each Trust C Fund will be distributed pro rata to shareholders of that Trust
C Fund, and the Trust C Funds will, thereafter, be dissolved. In addition,
Similarly, where applicable, Separate Account A will withdraw its assets from
each Hub in which it invests and will reinvest such assets in a third class
(Class Y) of shares of the corresponding Trust A Funds.
After the Reorganization, if approved, each shareholder of each Trust C Fund
will receive, in exchange for the shares of the Trust C Fund owned by such
shareholder, an equal number of shares of the corresponding Trust A Fund's Class
C shares at the same net asset value per share. Each share of each current Trust
A Fund outstanding immediately prior to the consummation of the Reorganization
automatically will be redesignated (without affecting the rights and privileges
appertaining thereto) as a Class A share of such Trust A Fund.
Following the Reorganization, all of the portfolio securities presently held in
each Hub and managed by Touchstone Advisors, Inc. and its sub-advisor(s) will be
held in the
27
<PAGE> 61
corresponding Trust A Fund, will be owned pro rata by holders of each Trust A
Fund's Class A shares, Class C shares, and, if applicable, Class Y shares and
will continue to be managed by Touchstone Advisors, Inc. and the relevant
sub-advisor(s) pursuant to the same investment objective, policies and programs
currently operative at the respective Hubs.
All expenses associated with the Reorganization (which are estimated at $182,000
exclusive of the organizational costs described in Note [D] below) will be paid
by Touchstone Advisors, Inc. or one of its affiliates.
NOTE B
The forgoing unaudited Pro Forma Financial Statements consist of: (i) Pro Forma
Combining Statements of Assets and Liabilities for Select Advisors Portfolios ,
Select Advisors Trust A, Select Advisors Trust C and Separate Account A as of
December 31, 1997, and as of June 30, 1998, assuming the Reorganization had been
consummated on those respective dates; (ii) the Pro Forma Combining Statements
of Operations for Select Advisors Portfolios, Select Advisors Trust A, Select
Advisors Trust C and Separate Account A for the year ended December 31, 1997,
and for the six month period ended June 30, 1998, giving effect to the
Reorganization as if it had been consummated on January 1, 1997 and January 1,
1998, respectively; and (iii) Pro Forma Schedules of Investments for the Select
Advisors Portfolios, Select Advisors Trust A, Select Advisors Trust C and
Separate Account A as of December 31, 1997 and as of June 30, 1998, assuming the
Reorganization had been consummated on those respective dates. Select Advisors
Portfolios is comprised of the following series: Emerging Growth Portfolio,
International Equity Portfolio, Growth & Income Portfolio, Balanced Portfolio,
Income Opportunity Portfolio, Bond Portfolio, Value Plus Portfolio, Growth &
Income Portfolio II and Bond Portfolio II. Growth & Income Portfolio II and Bond
Portfolio II are not participating directly in the Reorganization and are not
included in these statements. Select Advisors Trust A is comprised of the
following series: Touchstone Emerging Growth Fund A, Touchstone International
Equity Fund A, Touchstone Growth & Income Fund A, Touchstone Balanced Fund A,
Touchstone Income Opportunity Fund A, Touchstone Bond Fund A, Touchstone Value
Plus Fund A and Touchstone Standby Income Fund. Touchstone Standby Income Fund
is not participating directly in the Reorganization and is not included in these
statements. Select Advisors Trust C is comprised of the following series:
Touchstone Emerging Growth Fund C, Touchstone International Equity Fund C,
Touchstone Growth & Income Fund C, Touchstone Balanced Fund C, Touchstone Income
Opportunity Fund C, Touchstone Bond Fund C and Touchstone Value Plus Fund C.
Of the Hubs presented in these statements, Separate Account A invests only in
the Growth & Income Portfolio and the Bond Portfolio.
28
<PAGE> 62
NOTE C
Elimination of the intercompany activity representing duplicative amounts of
interest income, dividends, realized and unrealized gains and losses, expenses
allocated from the Hubs to the spokes and capital investments and withdrawals
that are reflected in the financial statements of both the Hubs and the spokes.
NOTE D
The organization costs of Select Advisors Portfolios and Select Advisors Trust C
have been fully expensed as a part of the Reorganization. The Advisor has agreed
to reimburse the outstanding balances for organization costs of Select Advisors
Portfolios and Select Advisors Trust C as part of the Reorganization to a
multiple class structure.
NOTE E
The amounts shown as receivable from and payable to Advisor/Sponsor have been
offset.
NOTE F
Estimated reduction of custody, fund accounting and administration fees
associated with the Reorganization to a multiple class structure.
NOTE G
Estimated change in the amount of registration fees associated with the change
to a multiple class structure.
NOTE H
Estimated reduction of the fees associated with the elimination of audits of the
financial statements of Select Advisors Portfolios and Select Advisors Trust C.
NOTE I
Estimated reduction of printing and mailing costs associated with the
elimination of Select Advisors Portfolios and Select Advisors Trust C.
NOTE J
These Pro Forma financial statements do not reflect adjustments for any
distributions of income or capital gains that might take place as part of the
Reorganization.
29
<PAGE> 63
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Under Article V, Section 5.3 of the Trust's Declaration of Trust, (a) subject to
the exceptions and limitations contained in paragraph (b) below: (i) every
person who is or has been a Trustee or officer of the Trust shall be indemnified
by the Trust, to the fullest extent permitted by law (including the 1940 Act) as
currently in effect or as hereinafter amended, against all liability and against
all expenses reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustee or officer and against amounts
paid or incurred by him in the settlement thereof; (ii) the words "claim",
"action", "suit", or "proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal, administrative or other, including appeals),
actual or threatened; and the words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities. (b) No indemnification shall
be provided hereunder to a Trustee or officer: (i) against any liability to the
Trust or the Shareholders by reason of a final adjudication by the court or
other body before which the proceeding was brought that he engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office; (ii) with respect to any matter as to
which he shall have been finally adjudicated not to have acted in good faith in
the reasonable belief that his action was in the best interest of the Trust; or
(iii) in the event of a settlement involving a payment by a Trustee or officer
or other disposition not involving a final adjudication as provided in paragraph
(b)(i) or (b)(ii) above resulting in a payment by a Trustee or officer, unless
there has been either a determination that such Trustee or officer did not
engage in willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office by the court or other body
approving the settlement or other disposition or by a reasonable determination,
based upon a review of readily available facts (as opposed to a full trial-type
inquiry) that he did not engage in such conduct: (A) by a vote of a majority of
the Disinterested Trustees acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter); or (B) by written
opinion of independent legal counsel. (c) Subject to the provisions of the 1940
Act, the Trust may maintain insurance for the protection of the Trust Property,
its present or former Shareholders, Trustees, officers, employees, independent
contractors and agents in such amount as the Trustees shall deem adequate to
cover possible tort liability (whether or not the Trust would have the power to
indemnify such Persons against such liability), and such other insurance as the
Trustees in their sole judgment shall deem advisable. (d) The rights of
indemnification herein provided shall be severable, shall not affect any other
rights to which any Trustee or officer may now or hereafter be entitled, shall
continue as to a Person who has ceased to be such a Trustee or officer and shall
inure to the benefit of the heirs, executors and administrators of such Person.
Nothing contained herein shall affect any rights to indemnification to which
personnel other than Trustees and officers may be entitled by contract or
otherwise under law. (e) Expenses of preparation and presentation of a defense
to any claim, action, suit, or proceeding of the character described in
paragraph (a) of this Section 5.3 shall be advanced by the Trust prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Section 5.3, provided that either: (i)
such undertaking is secured by a surety bond or some other appropriate security
or the
4
<PAGE> 64
Trust shall be insured against losses arising out of any such advances; or (ii)
a majority of the Disinterested Trustees acting on the matter (provided that a
majority of the Disinterested Trustees then in office act on the matter) or an
independent legal counsel in a written opinion, shall determine, based upon a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the recipient ultimately will be found
entitled to indemnification. As used in this Section 5.3 a "Disinterested
Trustee" is one (i) who is not an "Interested Person" of the Trust (including
anyone who has been exempted from being an "Interested Person" by any rule,
regulation or order of the Commission), and (ii) against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or had been pending. As used in this
Section 5.3, the term "independent legal counsel" means an attorney who is
independent in all respects from the Trust and from the person or persons who
seek indemnification hereunder and in any event means an attorney who has not
been retained by or performed services for the Trust or any person to be so
indemnified within the five years prior to the Initial request for
indemnification pursuant hereto.
Insofar as indemnification for liability arising under the Securities Act of
1933, as amended (the "1933 Act"), may be permitted to Trustees, officers and
controlling persons of the Trust pursuant to the foregoing provisions, or
otherwise, the Trust has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Trust of expenses incurred or
paid by a Trustee, officer or controlling person of the Trust in the successful
defense of any action, suit or proceeding) is asserted by such Trustee, officer
or controlling person in connection with the securities being registered, the
Trust will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.
ITEM 16 EXHIBITS:
(1A) Amended Declaration of Trust of the Trust.(1)
(1B) Amendment to Amended Declaration of Trust of the Trust.(2)
(2) Amended By-Laws of the Trust.(1)
(3) Inapplicable.
(4) Agreement and Plan of Reorganization and Liquidation.(6)
(5) Inapplicable
(6A) Investment Advisory Agreement with respect to Touchstone Standby Income
Fund.(1)
(6B) Portfolio Advisory Agreement with respect to Touchstone Standby Income
Fund.(1)
5
<PAGE> 65
(7) Distribution Agreement.(4)
(8) Inapplicable.
(9) Custody Agreement.(4)
(10) Distribution and Service Plan pursuant to Rule 12b-l under the
Investment Company Act of 1940, as amended.(4)
(11) Opinion and consent of counsel as to legality.(6)
(12) Opinion and consent of counsel as to tax matters.(6)
(13) Inapplicable.
(14) Consent of Auditors.
(15) Inapplicable.
(16) Inapplicable.
(17A) Form of Proxy Card.(5)
(17B) Registrant's Registration Statement Part A and Part B relating to the
Touchstone Emerging Growth Fund A, Touchstone International Equity Fund
A, Touchstone Income Opportunity Fund A, Touchstone Value Plus Fund A,
Touchstone Growth & Income Fund A, Touchstone Balanced Fund A and
Touchstone Bond Fund A.(3)
(17C) Registration Statement of Select Advisors Trust C ("Trust C") Part A
and Part B relating to the Touchstone Emerging Growth Fund C,
Touchstone International Equity Fund C, Touchstone Income Opportunity
Fund C, Touchstone Value Plus Fund C, Touchstone Growth & Income Fund
C, Touchstone Balanced Fund C and Touchstone Bond Fund C.(3)
(17D) Audited Annual Report of Registrant relating to the Touchstone Emerging
Growth Fund A, Touchstone International Equity Fund A, Touchstone
Income Opportunity Fund A, Touchstone Value Plus Fund A, Touchstone
Growth & Income Fund A, Touchstone Balanced Fund A and Touchstone Bond
Fund A as of December 31, 1997, is incorporated herein by reference to
Registrant's Form N-30D as filed electronically on March 6, 1998.
(17E) Unaudited Semi-Annual Report of Registrant relating to the Touchstone
Emerging Growth Fund A, Touchstone International Equity Fund A,
Touchstone Income Opportunity Fund A, Touchstone Value Plus Fund A,
Touchstone Growth & Income Fund A, Touchstone Balanced Fund A and
Touchstone Bond Fund A as of June 30, 1998, is incorporated herein by
reference to Registrant's Form N-30D as filed electronically on
September 2, 1998.
(17F) Audited Annual Report of Trust C relating to the Touchstone Emerging
Growth Fund C, Touchstone International Equity Fund C, Touchstone
Income Opportunity Fund C, Touchstone Value Plus Fund C, Touchstone
Growth & Income Fund C, Touchstone Balanced Fund C and Touchstone Bond
Fund C as of December 31, 1997, is incorporated herein by reference to
Trust C's Form N-30D as filed electronically on March 6, 1998.
(17G) Unaudited Semi-Annual Report of Trust C relating to the Touchstone
Emerging Growth Fund C, Touchstone International Equity Fund C,
Touchstone Income Opportunity Fund C, Touchstone Value Plus Fund C,
Touchstone Growth & Income Fund C, Touchstone Balanced Fund C and
Touchstone Bond Fund
6
<PAGE> 66
C as of June 30, 1998, is incorporated herein by reference to Trust C's
Form N-30D as filed electronically on September 2, 1998.
(27) Financial Data Schedules.(6)
1 Incorporated herein by reference from post-effective amendment No. 2 to the
Registration Statement as filed with the SEC on April 29, 1996.
2 Incorporated herein by reference from post-effective amendment No. 5 to the
Registration Statement as filed with the SEC on February 13, 1998.
3 Incorporated herein by reference from post-effective amendment No. 6 to the
Registration Statement as filed with the SEC on April 28, 1998.
4 Incorporated herein by reference from post-effective amendment No. 7 to the
Registration Statement as filed with the SEC on July 30, 1998.
5 Incorporated herein by reference from the initial Registration Statement on
Form N-14 of the Registrant as filed on August 5, 1998.
6 Filed herein.
ITEM 17. UNDERTAKINGS
(1) The Undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is a
part of this Registration Statement by any person or party who is
deemed to be to be an underwriter within the meaning of Rule 145(c) of
the Securities Act, the reoffering prospectus will contain the
information called for by the applicable registration form for the
reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(2) The Undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
7
<PAGE> 67
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement (the
"Registration Statement") has been signed on behalf of the Registrant by the
undersigned, thereto duly authorized, in the City of Boston and the Commonwealth
of Massachusetts on the 18th day of September, 1998.
SELECT ADVISORS TRUST A
By: /s/ ANDREW S. JOSEF
Andrew S. Josef, Secretary
As required by the Securities Act of 1933, this Registration Statement has
been signed below by the following persons in the capacities indicated on
September 18, 1998.
SIGNATURE TITLE
/s/ EDWARD G. HARNESS, JR. Trustee, President, Chief
Edward G. Harness, Jr. Executive Officer and
Chairman of the Board
/s/ WILLIAM J. WILLIAMS Trustee
William J. Williams
/s/ JOSEPH S. STERN, JR. Trustee
Joseph S. Stern, Jr.
/s/ PHILLIP R. COX Trustee
Phillip R. Cox
/s/ DAVID POLLAK Trustee
David Pollak
/s/ ROBERT E. STAUTBERG Trustee
Robert E. Stautberg
/s/ JAMES J. VANCE Treasurer (Principal Financial
James J. Vance Officer and Principal Accounting
Officer)
8
<PAGE> 68
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(4) Agreement and Plan of Reorganization and Liquidation.
(11) Opinion and consent of counsel as to legality.
(12) Opinion and consent of counsel as to tax matters.
(14) Consent of Auditors.
(27) Financial Data Schedules.
<PAGE> 1
EXHIBIT 4
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
This Agreement and Plan of Reorganization and Liquidation (the "Plan") is
made as of this 17th day of September, 1998, by and between Select Advisors
Trust A ("Trust A") on behalf of the seven of its eight separate portfolios
which are the subject of this Plan and are set forth below (hereinafter,
collectively the "Acquiring Funds" or individually an "Acquiring Fund"), and
Select Advisors Trust C ("Trust C") on behalf of all seven of its separate
portfolios, all of which are the subject of this Plan and are set forth below
(hereinafter, collectively the "Acquired Funds" or individually an "Acquired
Fund").
This Plan governs the proposed issuance of shares of each Acquiring Fund in
exchange for all of the assets and liabilities of the specific Acquired Fund set
forth opposite the name of that Acquiring Fund in the table below.
<TABLE>
<CAPTION>
ACQUIRING FUNDS OF TRUST A ACQUIRED FUNDS OF TRUST C
-------------------------- -------------------------
<S> <C>
Touchstone Emerging Growth Fund A Touchstone Emerging Growth Fund C
Touchstone International Equity Fund A Touchstone International Equity Fund C
Touchstone Income Opportunity Fund A Touchstone Income Opportunity Fund C
Touchstone Value Plus Fund A Touchstone Value Plus Fund C
Touchstone Growth & Income Fund A Touchstone Growth & Income Fund C
Touchstone Balanced Fund A Touchstone Balanced Fund C
Touchstone Bond Fund A Touchstone Bond Fund C
</TABLE>
This Plan is intended to be and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1)(C) of the Internal Revenue
Code of 1986, as amended (the "Code"). A reorganization (each a
"Reorganization") will comprise the transfer of all of the assets of an Acquired
Fund to the corresponding Acquiring Fund in exchange solely for such
corresponding Acquiring Fund's Class C shares and the assumption by the
Acquiring Fund of certain liabilities of the corresponding Acquired Fund, and
the constructive distribution after the Closing Date (as hereinafter defined) of
such Class C shares to the shareholders of the corresponding Acquired Fund in
liquidation of the Acquired Fund, all upon the terms and conditions hereinafter
set forth in this Plan.
WHEREAS, Trust A and Trust C are each (a) a Massachusetts business Trust
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, and (b) registered as an open-end series
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and each Acquired Fund owns securities which generally are assets
of the character in which the corresponding Acquiring Fund is permitted to
invest; and
WHEREAS, effective as of the Closing Date, the shares of beneficial
interest of each Acquiring Fund will be divided into three separate classes,
designated as Class A shares of beneficial interest ("Class A"), Class C shares
of beneficial interest ("Class C") and Class Y shares of beneficial interest
("Class Y"); and
WHEREAS, the Board of Trustees of Trust C has determined that the exchange
of all of the assets of each Acquired Fund for Class C shares of the
corresponding Acquiring Fund and the assumption of the liabilities of such
Acquired Fund by the corresponding Acquiring Fund is in the best interests of
each Acquired Fund's Shareholders (as defined below) and that the interests of
the existing shareholders of each Acquired Fund will not be diluted as a result
of this transaction; and
WHEREAS, the execution, delivery and performance of this Plan will have
been duly authorized prior to the Closing Date by all necessary corporate action
on the part of Trust A and Trust C, respectively, and this Plan constitutes a
valid and binding obligation of each of the parties hereto enforceable in
accordance with its terms, subject to the requisite approval of the shareholders
of each Acquired Fund.
16
<PAGE> 2
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. REDESIGNATION OF PRESENTLY OUTSTANDING SHARES OF EACH ACQUIRING FUND AS
SHARES OF SUCH ACQUIRING FUND'S CLASS A SHARES
1.1 Redesignation. Effective as of the "Effective Time" (as defined in
Article 4 of this Plan), each share of each Acquiring Fund's presently
designated single class of shares then issued and outstanding automatically will
be redesignated (without otherwise affecting the rights and privileges
appertaining thereto) as a share of each Acquiring Fund's Class A shares without
any action on the part of the holder thereof, and will represent a pro rata
interest (taken together with outstanding shares of each Acquiring Fund's Class
C and Class Y shares without regard to Class) in the assets and liabilities of
each Acquiring Fund. Notwithstanding this change in designation, the rights and
privileges of outstanding shares of each Acquiring Fund's presently-designated
single class of shares will remain the same.
1.2 Transfer Agent's Records. Ownership of shares of each Acquiring
Fund's Class A shares will be shown on the books of Trust A's transfer agent.
Shares of each Acquiring Fund's Class A shares will be issued in the manner
described in the then-effective Prospectus and Statement of Additional
Information of Trust A relating to the Class A shares of each Acquiring Fund.
2. TRANSFER OF ASSETS AND LIABILITIES OF EACH ACQUIRED FUND TO THE
CORRESPONDING ACQUIRING FUND IN EXCHANGE FOR SUCH CORRESPONDING ACQUIRING
FUND'S CLASS C SHARES; LIQUIDATION OF THE ACQUIRED FUNDS
2.1 Transfer and Exchange of Assets for Shares. Subject to the requisite
approval of the shareholders of each Acquired Fund and to the other terms and
conditions set forth herein and on the basis of the representations and
warranties contained herein, each of the Touchstone Emerging Growth Fund C,
Touchstone International Equity Fund C, Touchstone Income Opportunity Fund C,
Touchstone Value Plus Fund C, Touchstone Growth & Income Fund C, Touchstone
Balanced Fund C and Touchstone Bond Fund C series of Trust C shall transfer to
each of Touchstone International Equity Fund A, Touchstone Income Opportunity
Fund A, Touchstone Value Plus Fund A, Touchstone Growth & Income Fund A,
Touchstone Balanced Fund A and Touchstone Bond Fund A series of Trust A,
respectively, and each of Touchstone Emerging Growth Fund A, Touchstone
International Equity Fund A, Touchstone Income Opportunity Fund A, Touchstone
Value Plus Fund A, Touchstone Growth & Income Fund A, Touchstone Balanced Fund A
and Touchstone Bond Fund A series of Trust A shall acquire from each of the
Touchstone Emerging Growth Fund C, Touchstone International Equity Fund C,
Touchstone Income Opportunity Fund C, Touchstone Value Plus Fund C, Touchstone
Growth & Income Fund C, Touchstone Balanced Fund C and Touchstone Bond Fund C
series of Trust C, respectively, as of the Closing Date, all of the Assets (as
hereinafter defined) (i) of the Touchstone Emerging Growth Fund C in exchange
for that number of Class C shares of Touchstone Emerging Growth Fund A
determined in accordance with paragraph 3.2 hereof, and the assumption by
Touchstone Emerging Growth Fund A of the Liabilities (as hereinafter defined) of
the Touchstone Emerging Growth Fund C, (ii) of the Touchstone International
Equity Fund C in exchange for that number of Class C shares of Touchstone
International Equity Fund A determined in accordance with paragraph 3.2 hereof,
and the assumption by Touchstone International Equity Fund A of the Liabilities
of the Touchstone International Equity Fund C, (iii) of the Touchstone Income
Opportunity Fund C in exchange for that number of Class C shares of Touchstone
Income Opportunity Fund A determined in accordance with paragraph 3.2 hereof,
and the assumption by Touchstone Income Opportunity Fund A of the Liabilities of
the Touchstone Income Opportunity Fund C, (iv) of the Touchstone Value Plus Fund
C in exchange for that number of Class C shares of Touchstone Value Plus Fund A
determined in accordance with paragraph 3.2 hereof, and the assumption by
Touchstone Value Plus Fund A of the Liabilities of the Touchstone Value Plus
Fund C, (v) of the Touchstone Growth & Income Fund C in exchange for that number
of Class C shares of Touchstone Growth & Income Fund A determined in accordance
with paragraph 3.2 hereof, and the assumption by Touchstone Growth & Income Fund
A of the Liabilities of the Touchstone Growth & Income Fund C, (vi) of the
Touchstone Balanced Fund C in exchange for that number of Class C shares of
Touchstone Balanced Fund A determined in accordance with paragraph 3.2 hereof,
and the assumption by
17
<PAGE> 3
Touchstone Balanced Fund A of the Liabilities of the Touchstone Balanced Fund C,
and (vii) of the Touchstone Bond Fund C in exchange for that number of Class C
shares of Touchstone Bond Fund A determined in accordance with paragraph 3.2
hereof, and the assumption by Touchstone Bond Fund A of the Liabilities of the
Touchstone Bond Fund C. Such transactions shall take place at the closing
provided for in Article 4 of this Plan (the "Closing").
Trust C will (i) pay or cause to be paid to Trust A any interest received
on or after the Closing Date with respect to the Assets of each Acquired Fund
and (ii) transfer to Trust A any distributions, rights, stock dividends or other
property received by Trust C after the Closing Date as distributions on or with
respect to the Assets of each Acquired Fund. Any such interest, distributions,
rights, stock dividends or other property so paid or transferred or received
directly by Trust A shall be allocated by Trust A to the account of the
Acquiring Fund that acquired the Assets to which such property relates.
2.2 Description of Assets to be Acquired. The assets of each Acquired
Fund to be acquired by each Acquiring Fund shall consist of all property,
including without limitation, all cash, cash equivalents, securities,
commodities and futures interests, receivables (including interest or dividends
receivable), any claims or rights of action or rights to register shares under
applicable securities laws, and other property owned by each Acquired Fund and
any deferred or prepaid expenses shown as an asset on the books of each Acquired
Fund at the Effective Time (the "Assets").
2.3 Liabilities to be Assumed. Each Acquiring Fund shall assume from the
corresponding Acquired Fund all liabilities, expenses, costs, charges and
reserves of such Acquired Fund of whatever kind or nature, whether absolute,
accrued, contingent or otherwise, whether or not arising in the ordinary course
of business, whether or not determinable as of the Effective Time and whether or
not specifically referred to in this Plan; provided, however, that it is
understood and agreed by the parties hereto that each Acquired Fund will utilize
its best efforts to discharge all of its known debts, liabilities, obligations
and duties prior to the Effective Time. Any such liabilities and obligations of
an Acquired Fund assumed by an Acquiring Fund shall be allocated to the shares
of such Acquiring Fund's Class C shares issued to each Acquired Fund pursuant to
this Plan.
2.4 Liquidation of Each Acquired Fund. As provided in Section 4.3 of this
Plan, as soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), Trust C will effect the termination and liquidation of each
Acquired Fund in the manner provided in its Declaration of Trust and in
accordance with applicable law. On the Closing Date, each Acquired Fund will
distribute pro rata to its shareholders of record, determined as of the close of
business on the Valuation Date (the "Acquired Fund's Shareholders"), each
Acquiring Fund's Class C shares received by such Acquired Fund pursuant to
Section 2.1 in exchange for each such shareholder's interest in each Acquired
Fund evidenced by such shareholder's shares of beneficial interest in each
Acquired Fund. Such liquidation and distribution will be accomplished by opening
accounts on the books of each Acquiring Fund in the names of each Acquired
Fund's Shareholders and transferring the shares credited to the account of each
Acquired Fund on the books of the corresponding Acquiring Fund. Each account
opened shall represent the respective pro rata number of shares of each
Acquiring Fund's Class C shares due each Acquired Fund Shareholder. Fractional
shares of each Acquiring Fund's Class C shares shall be rounded to the nearest
thousandth of one share. All issued and outstanding shares of each Acquired Fund
shall simultaneously be canceled on the books of the Acquired Fund.
2.5 No Issuance of Certificates. None of the Acquiring Funds will issue
certificates representing its Class C shares issued in connection with the
exchange described in paragraph 2.1 hereof.
2.6 Transfer Agent's Records. Ownership of each Acquiring Fund's Class C
shares will be shown on the books of Trust A's transfer agent. Each Acquiring
Fund's Class C shares will be issued in the manner described in the
then-effective Prospectus and Statement of Additional Information of Trust A
relating to the Class C shares of each Acquiring Fund.
2.7 Transfer Taxes. Any transfer taxes payable upon the issuance of
shares of each Acquiring Fund's Class C shares in a name other than the
registered holder of the shares on the books of each Acquired Fund as of the
time of issuance shall be paid by the person to whom such shares are to be
issued as a condition of such transfer.
18
<PAGE> 4
2.8 Reporting Responsibilities of each Acquired Fund. Any reporting
obligations relating to an Acquired Fund are and shall remain the responsibility
of Trust C up to and including the Closing Date and such later date on which
each Acquired Fund is liquidated and Trust C is dissolved.
2.9 Operating Plan. From and after the Closing Date, the rights and
privileges of the Class A, Class C and Class Y shares shall be determined under
the provisions of Massachusetts law, Trust A's Declaration of Trust, as amended
from time to time, Trust A's Bylaws and the operating plan adopted by Trust A's
Board of Trustees which establishes policies and procedures for allocating
income and expenses between each Acquiring Fund's Class A shares, Class C shares
and Class Y shares, which further defines the relative voting rights of the
Classes and which otherwise delineates the relative rights, privileges and
liabilities of shares of the Classes.
3. VALUATION
3.1 Net Asset Value of each Acquired Fund. The value of the net assets to
be acquired by each Acquiring Fund hereunder shall be the value of the Assets of
the corresponding Acquired Fund, less the Liabilities of such Acquired Fund, and
shall be computed at the time and in the manner set forth in Trust A's
then-current Prospectus and Statement of Additional Information on December 31,
1998 (such time and date being hereinafter called the "Valuation Date").
3.2 Exchange Ratio. The number of shares of each Acquiring Fund's Class C
shares to be issued (including fractional shares, if any) in exchange for the
Assets of each Acquired Fund and the assumption of its Liabilities shall be
equivalent to the number of shares of the Acquired Fund outstanding as of the
close of business on the Valuation Date.
3.3 Documentation. All computations of value shall be made by Investors
Bank & Trust Company, in accordance with its regular practice as pricing agent
for Trust A. In addition, Trust C shall furnish to Trust A within 60 days of the
Closing Date a statement of each Acquired Fund's assets and liabilities as of
the Effective Time, which statement shall be prepared in accordance with
generally accepted accounting principles consistently applied and shall be
certified by the Treasurer of Trust C. In addition, Trust C shall supply to
Trust A, in such form as is reasonably satisfactory to Trust A, a statement of
earnings and profits of each Acquired Fund for federal income tax purposes which
may be carried over to each Acquiring Fund's Class C shares as a result of
Section 381 of the Code. This statement shall be provided within 180 days of the
Closing Date.
4. CLOSING AND CLOSING DATE
4.1 Establishment of Closing Date; Description of Closing. The "Closing
Date" shall be the next full business day following the Valuation Date (December
31, 1998), or such later date as the parties may agree in writing. All acts
taking place at the Closing shall be deemed to take place simultaneously as of
the close of business on the last business day immediately preceding the Closing
(the "Effective Time"), unless otherwise provided. The Closing shall be held on
the Closing Date at 9:00 a.m., Central Time, at the principal offices of Frost &
Jacobs LLP, or such other time and/or place as the parties may agree.
4.2 Deliveries by Transfer Agent. Investors Bank & Trust Company, as
custodian for Trust C and for each portfolio of Select Advisors Portfolios,
shall deliver at the Closing a certificate of an authorized officer stating
that: (a) each Acquired Fund's portfolio securities, cash and any other assets
shall have been delivered in proper form to Trust A on the Closing Date; and (b)
all necessary taxes, including all applicable federal and state stock transfer
stamps, if any, shall have been paid, or provision for payment shall have been
made, in connection with the delivery of portfolio securities.
4.3 Closing of New York Stock Exchange. In the event that on the
Valuation Date: (a) the New York Stock Exchange is closed to trading or trading
thereon is restricted; or (b) trading or the reporting of trading on said
Exchange or elsewhere is disrupted so that accurate appraisal of the value of
the total net assets of each Acquired Fund is impracticable, then the Closing
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
19
<PAGE> 5
4.4 List of each Acquired Fund's Shareholders. Trust C shall deliver at
the Closing a list of names and addresses of the shareholders of each Acquired
Fund and the number and percentage ownership of outstanding shares owned by each
such shareholder, all as of the Effective Time, certified by the Secretary or
Assistant Secretary of Trust C. Trust A shall issue and deliver to said
Secretary or Assistant Secretary of Trust C a confirmation evidencing each
Acquiring Fund's Class C shares to be credited to the corresponding Acquired
Fund on the [Liquidation Date], or provide other evidence satisfactory to Trust
C that such Acquiring Fund's Class C shares have been credited to the account of
the corresponding Acquired Fund on the records of Trust A's transfer agent
maintained with respect to each Acquiring Fund's Class C shares. At the Closing,
each party shall deliver to the other such bills of sale, checks, assignments,
share certificates, receipts or other transfer documents as such other party may
reasonably request.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Trust C, on behalf of each Acquired Fund, represents and warrants to
Trust A, on behalf of each Acquiring Fund, as follows:
(a) Trust C is a voluntary association with transferable shares of the
type commonly referred to as a Massachusetts business trust, duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts;
(b) Trust C is registered as an investment company classified as a
management company of the open-end type and its registration with the
Securities and Exchange Commission (the "Commission") as an investment
company under the 1940 Act, is in full force and effect;
(c) The current prospectus and statement of additional information of
Trust C relating to the Acquired Funds conform in all material respects to
the applicable requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and the 1940 Act and the rules and regulations of the
Commission thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(d) Trust C is not, and the execution, delivery and performance of
this Agreement will not result, in a material violation of its Declaration
of Trust or By-Laws, as each may have been amended to the date hereof, or
of any agreement, indenture, instrument, contract, lease or other
undertaking to which Trust C is a party or by which it is bound;
(e) Trust C has no material contracts or other commitments (other than
this Agreement) which, if terminated prior to the Closing Date, would
result in an additional liability of any of the Acquired Funds;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its
knowledge threatened against Trust C or any Acquired Fund or any of their
respective properties or assets which, if adversely determined, would
materially and adversely affect their financial condition or the conduct of
their business. Trust C knows of no facts which might form the basis for
the institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially or adversely affects its business or its ability to
consummate the transactions herein contemplated;
(g) At the Closing Date, all federal and other tax returns and reports
of the Acquired Funds required by law to have been filed by such date shall
have been filed, and all federal and other taxes shall have been paid so
far as due, or provision shall have been made for the payment thereof and,
to the best of Trust C's knowledge, no such return is currently under audit
and no assessment has been asserted with respect to such returns;
(h) For each fiscal year of its operation, each of the Acquired Funds
has (i) met the requirements of Subchapter M of the Code for qualification
and treatment as a regulated investment company and (ii) been treated as a
separate corporation for federal income tax purposes pursuant to section
851(h) of
20
<PAGE> 6
the Code, and each of the Acquired Funds intends to be so treated as a
separate corporation and meet such qualification requirements for its
current taxable year;
(i) All issued and outstanding shares of each Acquired Fund are, and
at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to the
ownership thereof (recognizing that, under Massachusetts law, each Acquired
Fund's Shareholders could, under certain circumstances, be held personally
liable for obligations of the respective Acquired Fund);
(j) At the Closing Date, Trust C, on behalf of the Acquired Funds,
will have good and marketable title to the Assets to be transferred to the
Acquiring Funds pursuant hereto and full right, power and authority to
sell, assign, transfer and deliver such Assets hereunder and, upon delivery
and payment for such Assets, the Acquiring Funds will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act,
other than as disclosed to the Acquiring Funds;
(k) The execution, delivery and performance of this Agreement have
been duly authorized as of the date hereof by all necessary action on the
part of Trust C's Board of Trustees, and on the date hereof and on the
Closing Date this Agreement will constitute a valid and binding obligation
of Trust C on behalf of each respective Acquired Fund enforceable against
Trust C in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights and to general principles of equity;
(l) On the Closing Date, the performance of this Agreement shall have
been duly authorized by all necessary action by the shareholders of each
Acquired Fund.
5.2 Trust A, on behalf of each Acquiring Fund, represents and warrants to
Trust C, on behalf of each Acquired Fund, as follows:
(a) Trust A is a voluntary association with transferable shares of the
type commonly referred to as a Massachusetts business trust, duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts;
(b) Trust A is registered as an investment company classified as a
management company of the open-end type and its registration with the
Commission as an investment company under the 1940 Act, is in full force
and effect;
(c) The current prospectus and statement of additional information of
Trust A relating to the Acquiring Funds conform in all material respects to
the applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(d) Trust A is not, and the execution, delivery and performance of
this Agreement will not result, in a material violation of its Declaration
of Trust or By-Laws, as each may have been amended to the date hereof, or
of any agreement, indenture, instrument, contract, lease or other
undertaking to which Trust A is a party or by which it is bound;
(e) Trust A has no material contracts or other commitments (other than
this Agreement) which, if terminated prior to the Closing Date, would
result in an additional liability of any of the Acquiring Funds;
(f) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its
knowledge threatened against Trust A or any Acquiring Fund or any of their
respective properties or assets which, if adversely determined, would
materially and adversely affect their financial condition or the conduct of
their business. Trust A knows of no facts which might form the basis for
the institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially or adversely affects its business or its ability to
consummate the transactions herein contemplated;
21
<PAGE> 7
(g) At the Closing Date, all federal and other tax returns and reports
of the Acquiring Funds required by law to have been filed by such date
shall have been filed, and all federal and other taxes shall have been paid
so far as due, or provision shall have been made for the payment thereof
and, to the best of Trust A's knowledge, no such return is currently under
audit and no assessment has been asserted with respect to such returns;
(h) For each fiscal year of its operation, each of the Acquiring Funds
has (i) met the requirements of Subchapter M of the Code for qualification
and treatment as a regulated investment company and (ii) been treated as a
separate corporation for federal income tax purposes pursuant to section
851(h) of the Code, and each of the Acquiring Funds intends to be so
treated as a separate corporation and meet such qualification requirements
for its current taxable year;
(i) All issued and outstanding shares of each Acquiring Fund are, and
at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to the
ownership thereof (recognizing that, under Massachusetts law, each Acquired
Fund's Shareholders could, under certain circumstances, be held personally
liable for obligations of the respective Acquiring Fund);
(k) The execution, delivery and performance of this Agreement have
been duly authorized as of the date hereof by all necessary action on the
part of Trust A's Board of Trustees, and on the date hereof and on the
Closing Date this Agreement will constitute a valid and binding obligation
of Trust A on behalf of each respective Acquiring Fund enforceable against
Trust A in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws relating
to or affecting creditors' rights and to general principles of equity.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES
The obligations of Trust A hereunder and the obligations of Trust C
hereunder are subject to the conditions that on or before the Closing Date:
6.1 Representations and Warranties. All representations and warranties of
each of Trust A and Trust C set forth herein shall be true and correct in all
material respects as of the date hereof and, except as may be affected by the
transactions contemplated by this Plan, as of the Effective Time with the same
force and effect as if made on and as of the Effective Time.
6.2 Approval of Plan by Shareholders of Each Acquired Fund. This Plan and
the transactions contemplated hereby shall have been approved by the requisite
vote of the holders of the outstanding shares of each Acquired Fund in
accordance with the provisions of the law of business trusts of the Commonwealth
of Massachusetts, the provisions of the 1940 Act and the provisions of Trust A's
Declaration of Trust and Bylaws;
6.3 No Adverse Actions. On the Closing Date, no action, suit or other
proceeding shall be pending before any court or governmental agency in which it
is sought to restrain or prohibit or obtain damages or other relief in
connection with this Plan or the transactions contemplated hereby;
6.4 Consents and Approvals. (a) All consents of other parties and all
other consents, orders and permits of federal, state and local regulatory
authorities (including those of the Commission and of state Blue Sky or
securities authorities, including "no-action" positions of such federal or state
authorities) deemed necessary by Trust A or Trust C to permit consummation, in
all material respects, of the transactions contemplated hereby, shall have been
obtained, except where failure to obtain any such consent, order or permit would
not involve a risk of a material adverse effect on the assets or properties of
any Acquired Fund or any Acquiring Fund, provided that either party hereto may
for itself waive any of such conditions; and
(b) The Board of Trustees of Trust A and Trust C shall have approved the
terms of the Reorganization and this Plan and shall have determined that (i)
participation by Trust A and Trust C, respectively, in the Reorganization is in
the best interests of such Trust, (ii) the interests of existing shareholders of
each of Trust A and Trust C, respectively, will not be diluted as a result of
the Reorganization,
22
<PAGE> 8
(iii) the terms of the Reorganization, including the consideration to be paid or
received, are reasonable and fair and do not involve overreaching on the part of
any person, (iv) the Reorganization is consistent with the policies of Trust A
and Trust C, respectively, as recited in its respective registration statement
and reports filed under the 1940 Act, and (v) the Reorganization is consistent
with the general purposes of the 1940 Act.
6.5 Effectiveness of Registration Statement on Form N-14; No-Action
Relief. A Registration Statement on Form N-14 relating to the shares of each
Acquiring Fund's Class C shares issuable hereunder, including the combined Proxy
Statement of each Acquired Fund and the Prospectus of Trust A (relating to the
shares of each Acquiring Fund's Class C shares issuable pursuant to the terms of
this Plan) constituting a part thereof, shall have become effective under the
1933 Act and no stop order suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending, threatened
or contemplated under the 1933 Act. Additionally, in response to an application
for exemption to be submitted by Trust A, Trust C, Select Advisors Portfolios
and certain affiliated persons, the Securities and Exchange Commission shall
have issued an order exempting Trust A, Trust C and the other applicants from
certain provisions of the 1940 Act or the issues raised in the application shall
have otherwise been resolved to the mutual satisfaction of the parties.
6.6 Tax Opinions. Each of Trust A and Trust C shall have obtained an
opinion of Frost & Jacobs LLP, legal counsel to Trust A and Trust C, in form and
substance reasonably satisfactory to their respective Boards, to the effect
that:
(a) The transfer of all of an Acquired Fund's Assets solely in
exchange for the corresponding Acquiring Fund's Class C shares and the
assumption by the Acquiring Fund of the Liabilities of the Acquired Fund,
and the distribution of such Shares to the shareholders of the Acquired
Fund, will constitute a "reorganization" within the meaning of section
368(a)(1)(C) of the Code and the Acquiring Fund and the Acquired Fund are
each a "party to a reorganization" within the meaning of section 368(b) of
the Code;
(b) No gain or loss will be recognized by an Acquired Fund upon the
transfer of the Acquired Fund's Assets to the corresponding Acquiring Fund
in exchange for the Acquiring Fund's Class C shares and the assumption by
the Acquiring Fund of the Liabilities of the Acquired Fund or upon the
distribution (whether actual or constructive) of the Acquiring Fund's Class
C shares to the Acquired Fund's Shareholders in exchange for their shares
of the Acquired Fund;
(c) The tax basis of each Acquired Fund's Assets acquired by an
Acquiring Fund will be the same to the Acquiring Fund as the tax basis of
such Assets to the Acquired Fund immediately prior to the Reorganization,
and the holding period of the Assets of each Acquired Fund in the hands of
the corresponding Acquiring Fund will include the period during which those
assets were held by the Acquired Fund;
(d) No gain or loss will be recognized by an Acquiring Fund upon the
receipt of the Assets of an Acquired Fund solely in exchange for the
Acquiring Fund's Class C shares and the assumption by the Acquiring Fund of
the Liabilities of the Acquired Fund;
(e) No gain or loss will be recognized by shareholders of any Acquired
Fund upon the distribution of the corresponding Acquiring Fund's Class C
shares to such shareholders, provided such shareholders receive solely such
corresponding Acquiring Fund's Class C shares (including fractional shares)
in exchange for their Acquired Fund shares; and
(f) The aggregate tax basis for the Acquiring Fund's Class C shares,
including any fractional shares, received by each shareholder of each
Acquired Fund pursuant to the Reorganization will be the same as the
aggregate tax basis of the Acquired Fund's shares held by such shareholder
immediately prior to the Reorganization, and the holding period of the
Acquiring Fund's Class C shares, including any fractional shares, to be
received by each shareholder of the Acquired Fund will include the period
during which the Acquired Fund's shares exchanged therefor were held by
such shareholder (provided that the Acquired Fund's shares were held as a
capital asset on the date of the Reorganization).
23
<PAGE> 9
7. EXPENSES
The expenses incurred in connection with the entering into and carrying out
the provisions of this Plan will be borne and paid by Touchstone Advisors, Inc.,
and not by each Acquiring Fund or each Acquired Fund.
8. TERMINATION
8.1 Mutual Agreement. This Plan may be terminated by the mutual agreement
of Trust A and Trust C.
8.2 Material Breach. In addition, either Trust A or Trust C may, at its
option, terminate this Plan at or prior to the Closing Date on account of a
material breach by the other of any agreement contained herein to be performed
by such other party at or prior to the Closing Date.
8.3 Failure of Condition Precedent. In addition, either Trust A or Trust
C may, at its option, terminate this Plan at or prior to the Closing Date on
account of a condition herein expressed to be precedent to the obligation of
such party which has not been met and which appears cannot reasonably, or will
not, be met.
8.4 Effects of Termination. In the event of any such termination, there
shall be no liability for damage on the part of Trust A or Trust C or their
respective Trustees or officers.
9. AMENDMENT
This Plan may be amended, modified or supplemented in such manner as may be
mutually agreed upon in writing by the parties hereto; provided, however, that
following the meeting of the shareholders of each Acquired Fund described in
Section 6.2 of this Plan, no such amendment may have the effect of changing the
provisions for determining the number of shares of each Acquiring Fund's Class C
shares to be issued to an Acquired Fund's Shareholders under this Plan to the
detriment of such shareholders without their further approval.
10. MISCELLANEOUS
10.1 Headings. The section headings contained in this Plan will have
reference purposes only and shall not effect in any way the meaning or
interpretation of this Plan.
10.2 Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
24
<PAGE> 10
IN WITNESS WHEREOF, each of the parties hereto has caused this Plan to be
executed on its behalf by its duly authorized officer as of the day and year
first written above.
SELECT ADVISORS TRUST C
SELECT ADVISORS TRUST C
(ON BEHALF OF EACH OF ITS SERIES)
By:/s/EDWARD G. HARNESS, JR.
-------------------------------------
Edward G. Harness, Jr., President
SELECT ADVISORS TRUST A
(ON BEHALF OF EACH OF ITS SERIES,
EXCEPT TOUCHSTONE STANDBY INCOME FUND)
By:/s/EDWARD G. HARNESS, JR.
-------------------------------------
Edward G. Harness, Jr., President
TOUCHSTONE ADVISORS, INC.
(SOLELY TO EVIDENCE ITS CONCURRENCE
WITH SECTION 7 HEREOF)
By:/s/EDWARD G. HARNESS, JR.
-------------------------------------
Edward G. Harness, Jr., President
25
<PAGE> 1
EXHIBIT (11)
Select Advisors Trust A
311 Pike Street
Cincinnati, Ohio 45202
Re: Select Advisors Trust A
Ladies and Gentlemen:
We have acted as special Massachusetts counsel to Select Advisors Trust
A, a Massachusetts business trust (the "Trust"), in connection with
Pre-Effective Amendment No. 1 to the Trust's Registration Statement on Form N-14
to be filed with the Securities and Exchange Commission on or about September
18, 1998 (as amended by such Pre-Effective Amendment No. 1, the "Registration
Statement"), with respect to the shares of beneficial interest, par value
$.00001 per share to be designated Class C Shares (the "Shares") of its series
Touchstone Emerging Growth Fund A, Touchstone International Equity Fund A,
Touchstone Income Opportunity Fund A, Touchstone Value Plus Fund A, Touchstone
Growth and Income Fund A, Touchstone Balanced Fund A, and Touchstone Bond Fund A
(each, an "Acquiring Fund" and collectively, the "Acquiring Funds") to be issued
in exchange for substantially all of the assets of, respectively, Touchstone
Emerging Growth Fund C, Touchstone International Equity Fund C, Touchstone
Income Opportunity Fund C, Touchstone Value Plus Fund C, Touchstone Growth and
Income Fund C, Touchstone Balanced Fund C, and Touchstone Bond Fund C (each, an
"Acquired Fund" and collectively, the "Acquired Funds"), each a series of Select
Advisors Trust C, as described in the Registration Statement. You have requested
that we deliver this opinion to you to be used as an exhibit to the Registration
Statement.
In connection with the furnishing of this opinion, we have examined the
following documents:
(a) a certificate of the Secretary of State of the Commonwealth of
Massachusetts as to the existence of the Trust;
(b) a copy of the Trust's Declaration of Trust dated as of February 7,
1994, Amendment No. 1 to the Declaration dated as of April 11, 1994, Amendment
No. 2 to the Declaration dated as of August 1, 1994, Amendment No. 3 to the
Declaration dated as of September 14, 1994, and Amendment No. 4 to the
Declaration dated as of September 18, 1997(collectively, the "Declaration");
(c) a copy of the Trust's Third Amended and Restated Establishment and
Designation of Series dated as of September 18, 1997 (the "Designation of
Series");
(d) a certificate executed by the Assistant Secretary of the Trust (the
"Secretary's Certificate"), certifying as to, and attaching copies of, the
Trust's Declaration, Designation of Series, By-Laws, and certain resolutions
adopted by the Trustees of the Trust at a meeting held on June 18, 1998 (the
"Board Resolutions");
(e) a printer's proof dated September 14, 1998 of the Registration
Statement; and
(f) a copy of the Agreement and Plan of Reorganization entered into by
the Trust as of September 17, 1998, on behalf of each of the Acquiring Funds,
providing for (a) the acquisition by the Acquiring Funds of all of the assets of
the corresponding Acquired Funds in exchange for the Shares and each Acquiring
Fund's assumption of all of the liabilities of the corresponding Acquired Fund
and (b) the pro rata distribution of the Shares to the holders of the shares of
each of the corresponding Acquired Fund
<PAGE> 2
in liquidation of the Acquired Fund (the "Reorganization"), in the form included
in the printer's proof referred to in paragraph (e) above (the "Agreement and
Plan of Reorganization").
In such examination, we have assumed the genuineness of all signatures,
the conformity to the originals of all of the documents reviewed by us as
copies, including conformed copies, the authenticity and completeness of all
original documents reviewed by us in original or copy form and the legal
competence of each individual executing any document. We have assumed that the
Registration Statement as filed with the Securities and Exchange Commission will
be in substantially the form of the printer's proof referred to in paragraph (f)
above, that the minutes setting forth the Board Resolutions will be approved by
the Trustees of the Trust in substantially the form attached to the Secretary's
Certificate referred to in paragraph (d) above, and that the Agreement and Plan
of Reorganization has been duly completed, executed and delivered by the parties
thereto in substantially the form of the copy referred to in paragraph (f)
above.
We note that the Class C Shares to be issued pursuant to the
Registration Statement have not yet been designated in accordance with the
Trust's Declaration. We further note that the designation of the Shares,
pursuant to the Board Resolutions, is subject to the following conditions: (i)
the approval by shareholders of Select Advisors Trust C of the Reorganization,
(ii) the receipt of all necessary related regulatory approvals and orders, and
(iii) the receipt of all necessary related opinions of counsel, and is further
subject to the sole discretion of the President of Trust A. We have assumed, for
the purposes of this opinion, that each of these conditions will be met and that
the Class C Shares will be duly designated, prior to the issuance of the Shares,
and that the Board Resolutions have not and will not be modified or amended in
any way or rescinded. We have also assumed that the Class C Shares, when duly
designated by the Board of Trustees of the Trust, will be in substantial
conformity with the description of the Class C Shares set forth in the
Registration Statement.
This opinion is based entirely on our review of the documents listed
above and such investigation of law as we have deemed necessary or appropriate.
We have made no other review or investigation of any kind whatsoever, and we
have assumed, without independent inquiry, the accuracy of the information set
forth in such documents.
This opinion is limited solely to the internal substantive laws of the
Commonwealth of Massachusetts as applied by courts located in such Commonwealth,
to the extent the same may apply to or govern the transactions covered by this
opinion, except that we express no opinion as to any Massachusetts securities
law.
We understand that all of the foregoing assumptions and limitations are
acceptable to you.
Based upon and subject to the foregoing, please be advised that it is
our opinion that:
1. The Trust is duly organized and existing under the Trust's
Declaration of Trust and the laws of the Commonwealth of Massachusetts as a
voluntary association with transferable shares of beneficial interest commonly
referred to as a "Massachusetts business trust."
2. The Shares, when designated in accordance with the Board Resolutions
and the Declaration, and when issued and sold in accordance with the Trust's
Declaration and By-Laws and for the consideration described in the Agreement and
Plan of Reorganization, will be legally issued, fully paid and non-assessable,
except that, as set forth in the statement of additional information
incorporated by reference in the Registration Statement, shareholders of the
Acquiring Fund may under certain circumstances be held personally liable for its
obligations.
We hereby consent to the reference to our name in the Registration
Statement under the heading "Legal Opinions" and to the filing of this opinion
as an exhibit to the Registration Statement.
<PAGE> 3
The opinions expressed herein concern only the effect of the law as
currently in effect and the facts and assumptions described herein. The
undersigned undertakes no obligation to supplement or update this opinion after
the date hereof.
Very truly yours,
BINGHAM DANA LLP
<PAGE> 1
EXHIBIT (12)
September 18, 1998
The Western and Southern Life Insurance Company
400 Broadway
Cincinnati, Ohio 45202
Attn:
Dear Mr. :
This opinion is intended to set forth our conclusions on the federal
income tax consequences of the transactions described below.
Facts and Representations
Each separate series ("Series") in the Select Advisors Portfolios
("SAP") will terminate. In connection with the termination, each separate fund
("Fund") in Select Advisors Trust A ("Trust A") and Select Advisors Trust C
("Trust C"), as well as Separate Account A and two Subaccounts ("Subaccounts 7
and 8" or "the Subaccounts") of Separate Account 1 ("SA1") and Separate Account
2 ("SA2") will receive distributions from the Series in which each has invested.
After receiving the distributions, each Fund in Trust C will transfer
all of its assets to the Fund in Trust A that has a corresponding investment
objective in exchange for newly created Class C shares of beneficial interest in
that Fund. The Trust C Fund will then distribute the Class C shares of the Trust
A Fund to its shareholders. Simultaneously with those transactions, Separate
Account A will contribute the securities it receives from the Growth and Income
Series to the Trust A Growth and Income Fund ("Growth and Income A"). Likewise,
Separate Account A will contribute the securities it receives from the Bond
Series to the Trust A Bond Fund ("Bond A"). In each case, Separate Account A
will make the contribution in exchange for Class Y shares of beneficial interest
of Growth and Income A and Bond A, respectively. At the same time, each
Subaccount and Separate Account A will contribute the amounts received from the
Growth and Income II Series to one of two newly created series of the Select
Advisors Variable Insurance Trust ("SAVIT") known as "Newco Growth and Income."
Also, each Subaccount and
<PAGE> 2
The Western and Southern Life Insurance Company
September 18, 1998
Page 2
Separate Account A will contribute the amounts received from the Bond II Series
to the other newly created series of SAVIT known as "Newco Bond."
In arriving at our opinions we have relied on the following
representations:
1. Each Series has at all times held only the following assets:
(I) money,
(II) stock in a corporation,
(III) notes, bonds, debentures, or other evidences of
indebtedness,
(IV) interest rate, currency, or equity notional principal
contracts,
(V) foreign currencies,
(VI) interests in or derivative financial instruments
(including options, forward or futures contracts,
short positions, and similar financial instruments)
in any asset described above or in any commodity
traded on or subject to the rules of a board of trade
or commodity exchange,
(VII) any combination of the foregoing.
1. Each of the Subaccounts and Funds has invested only cash in
the various Series.
2. No Series holds an interest in any partnership or regulated
investment company, real estate mortgage investment conduit
(REMIC), or other pass through entity.
3. In the termination distribution made by each Series, each
distributee will receive its pro-rata portion of securities in
which the Series has invested.
4. The two new series created in SAVIT ("Newco Growth and Income"
and "Newco Bond") will invest all contributed assets
consistently with the diversification requirements for RICs
and for life insurance companies under Sections 851-852 and
Section 817 of the Code, respectively.
5. Not more than 25% of the value of the total assets in any
Series is invested in stock and securities of any one issuer
and not more than 50% of the total asset value is invested in
stock and securities of 5 or fewer issuers.
6. The assets that Growth and Income A will acquire from Growth
and Income C will not include securities in any other Fund in
Trust A or Trust C.
<PAGE> 3
The Western and Southern Life Insurance Company
September 18, 1998
Page 3
7. The plan of reorganization adopted by the shareholders and/or
directors of Growth and Income A and Growth and Income C will
be based upon business reasons that are germane to the conduct
of each Fund's business activities.
8. The shares of Growth and Income C are capital assets in the
hands of its shareholders.
9. Growth and Income A will continue Growth and Income C's
historic business or will use a significant portion of Growth
and Income C's historic business assets in another business.
10. Separate Account A and the Subaccounts will be the only
transferors of property to Newco Growth and Income and Newco
Bond and will be its only shareholders for federal income tax
purposes.
11. The shares of beneficial interest that the Subaccounts and
Separate Account A will receive from Newco Growth and Income
and Newco Bond will be voting shares of beneficial interest
equal in value to the securities transferred by them to each
of those Series.
12. The shares of beneficial interest referenced in 12, above,
will be the only class of stock in each of the new Series
created in the Select Advisors Variable Insurance Trust.
Based upon the foregoing factual background, we opine that:
1. For federal income tax purposes, each Series in SAP is an
"investment partnership" within the meaning of Section
731(c)(3)(A)(iii) and (c)(3)(C), and each investor therein is
considered an "eligible partner" within the meaning of Section
731(c)(3)(A)(iii) and (c)(3)(C)(iii).(1)
2. The distribution from each Series in SAP to the respective
Funds in Trust A and Trust C and to Separate Account A and the
Subaccounts will not result in gain being recognized by any
Series or by any distributee under Section 731. Gain will be
recognized by Separate Account A under the provisions of
Section
- ----------
(1) Unless otherwise stated, all section references are to the Internal Revenue
Code (Code) of 1986, as amended (the "Code").
<PAGE> 4
The Western and Southern Life Insurance Company
September 18, 1998
Page 4
704(c)(1)(B) to the extent that Separate Account A contributed
property to a particular Series that had a basis at the time
of the contribution that was not equal to its fair market
value and such property was not distributed back to Separate
Account A.
3. The basis in the hands of the distributees of the assets
distributed by the Series in SAP will be determined in
accordance with the rules of Section 732.
4. The transfer by a Fund in Trust C of all of its assets to the
Fund in Trust A with a corresponding investment objective in
exchange for voting shares of beneficial interest in that Fund
followed by a distribution of such voting shares to the
shareholders of the Trust C Fund will be treated as a
reorganization under Section 368(a)(1)(C).
5. Neither the Fund in Trust A nor the Fund in Trust C will
recognize gain or loss in the reorganization described in item
4, above.
6. The shareholders of Trust C who receive voting shares of a
Fund in Trust A in exchange for their Trust C shares will not
recognize gain or loss.
7. Separate Account A will recognize gain or loss on the
contribution of securities to Growth and Income A if Separate
Account A is not in control of Growth and Income A (within the
meaning of Section 368(c)) immediately after the contribution.
8. Separate Account A will not recognize gain or loss on the
contribution of securities to Bond A if Separate Account A is
in control of Bond A (within the meaning of Section 368(c))
immediately after the contribution.
9. The basis of the of the assets contributed to Growth and
Income A and to Bond A by Separate Account A will equal the
basis of the securities in the hands of Separate Account A
increased by the amount of gain recognized by Separate Account
A in accordance with the rules of Section 362(b).
10. Separate Account A will have a basis in the Growth and Income
A Class Y voting shares or Bond A Class Y voting shares, as
the case may be, equal to the basis in the securities
transferred to each of the respective Funds in exchange for
such shares increased by the amount of any gain recognized on
the exchange. Section 358.
<PAGE> 5
The Western and Southern Life Insurance Company
September 18, 1998
Page 5
11. Subaccount 7 of SA1 and SA2 will not recognize gain or loss on
the transfer of securities to Newco Growth and Income and
Subaccount 8 of SA 1 and SA2 will not recognize gain or loss
on the transfer of securities to Newco Bond. Section 351.
12. Separate Account A will not recognize gain or loss on the
transfer of securities to Newco Growth and Income or Newco
Bond, as the case may be. Section 351.
13. Subaccount 7 of SA1 and SA2 and Subaccount 8 of SA1 and SA2
will have a basis in the Newco Growth and Income voting shares
of beneficial interest or Newco Bond voting shares of
beneficial interest, as the case may be, equal to the basis in
the securities transferred to Newco Growth and Income or Newco
Bond. Section 358.
14. Neither Newco Growth and Income or Newco Bond will recognize
gain or loss on the exchange of its shares of beneficial
interest for the securities contributed by the Subaccounts or
the securities contributed by Separate Account A. Section
1032(a).
We express no opinion on the tax ramifications of any transaction which
is not undertaken in accordance with the facts as set forth in our opinion
letter.
The opinion set forth above is based upon applicable statutes,
regulations, judicial and administrative decisions and interpretations in effect
on the date hereof. Any change in any of those authorities could result in a
change in our opinion.
Very truly yours,
FROST & JACOBS LLP
<PAGE> 1
EXHIBIT (14)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Pre-Effective Amendment
(File No. 333-60705) of Touchstone Select Advisors Trust A on Form N-14
("Registration Statement") of our report dated February 13, 1998, on our audit
of the financial statements and financial highlights of Touchstone Emerging
Growth Fund A, Touchstone International Equity Fund A, Touchstone Growth &
Income Fund A, Touchstone Balanced Fund A, Touchstone Income Opportunity Fund A
and Touchstone Bond Fund A, which report is included in the Annual Report for
Select Advisors Trust A for the year ended December 31, 1997, which is
incorporated by reference in the Registration Statement; our report dated
February 13, 1998, on our audit of the financial statements and financial
highlights of Touchstone Emerging Growth Fund C, Touchstone International Equity
Fund C, Touchstone Growth & Income Fund C, Touchstone Balanced Fund C,
Touchstone Income Opportunity Fund C and Touchstone Bond Fund C, constituting
the six series of Select Advisors Trust C, which report is included in the
Annual Report for Select Advisors Trust C for the year ended December 31, 1997,
which is incorporated by reference in the Registration Statement; and our report
dated February 13, 1998, on our audit of the financial statements and
supplemental data of the Emerging Growth Portfolio, International Equity
Portfolio, Growth & Income Portfolio, Balanced Portfolio, Income Opportunity
Portfolio, and Bond Portfolio, constituting the six series of the Select
Advisors Portfolios, which report is included in the Annual Report for Select
Advisors Portfolios for the year ended December 31,1997, which is incorporated
by reference in the Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 17, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers financial statements at June 30, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> TOUCHSTONE EMERGING GROWTH FUND A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 7,726,393
<INVESTMENTS-AT-VALUE> 8,670,864
<RECEIVABLES> 178,215
<ASSETS-OTHER> 12,319
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8,861,398
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 19,301
<TOTAL-LIABILITIES> 19,301
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,646,983
<SHARES-COMMON-STOCK> 607,434
<SHARES-COMMON-PRIOR> 357,329
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 11,441
<ACCUMULATED-NET-GAINS> 424,025
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 782,530
<NET-ASSETS> 8,842,097
<DIVIDEND-INCOME> 25,796
<INTEREST-INCOME> 10,091
<OTHER-INCOME> 0
<EXPENSES-NET> 47,328
<NET-INVESTMENT-INCOME> (11,441)
<REALIZED-GAINS-CURRENT> 379,593
<APPREC-INCREASE-CURRENT> (225,003)
<NET-CHANGE-FROM-OPS> 143,149
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 262,138
<NUMBER-OF-SHARES-REDEEMED> 12,033
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,893,424
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 44,431
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 115,984
<AVERAGE-NET-ASSETS> 6,362,732
<PER-SHARE-NAV-BEGIN> 13.85
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> 0.73
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.56
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers financial statements at June 30, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> TOUCHSTONE INTERNATIONAL EQUITY FUND A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 5,041,623
<INVESTMENTS-AT-VALUE> 6,464,716
<RECEIVABLES> 196,679
<ASSETS-OTHER> 12,319
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,673,714
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10,896
<TOTAL-LIABILITIES> 10,896
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,041,384
<SHARES-COMMON-STOCK> 474,106
<SHARES-COMMON-PRIOR> 417,090
<ACCUMULATED-NII-CURRENT> 6,631
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 240,715
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,374,088
<NET-ASSETS> 6,662,818
<DIVIDEND-INCOME> 62,051
<INTEREST-INCOME> 4,526
<OTHER-INCOME> 0
<EXPENSES-NET> 45,515
<NET-INVESTMENT-INCOME> 21,062
<REALIZED-GAINS-CURRENT> 181,737
<APPREC-INCREASE-CURRENT> 940,905
<NET-CHANGE-FROM-OPS> 1,143,704
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 70,270
<NUMBER-OF-SHARES-REDEEMED> 13,254
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,902,051
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 58,978
<OVERDISTRIB-NII-PRIOR> 14,430
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 111,827
<AVERAGE-NET-ASSETS> 5,736,469
<PER-SHARE-NAV-BEGIN> 11.41
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 2.59
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.05
<EXPENSE-RATIO> 1.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers financial statements at June 30, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> TOUCHSTONE GROWTH & INCOME FUND A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 14,418,678
<INVESTMENTS-AT-VALUE> 15,515,568
<RECEIVABLES> 196,100
<ASSETS-OTHER> 12,319
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 15,723,987
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 60,371
<TOTAL-LIABILITIES> 60,371
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14,827,740
<SHARES-COMMON-STOCK> 952,948
<SHARES-COMMON-PRIOR> 397,027
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 3,091
<ACCUMULATED-NET-GAINS> 822,096
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16,871
<NET-ASSETS> 15,663,616
<DIVIDEND-INCOME> 123,485
<INTEREST-INCOME> 6,027
<OTHER-INCOME> 0
<EXPENSES-NET> 60,518
<NET-INVESTMENT-INCOME> 68,994
<REALIZED-GAINS-CURRENT> 738,280
<APPREC-INCREASE-CURRENT> (371,038)
<NET-CHANGE-FROM-OPS> 436,236
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 74,251
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 590,878
<NUMBER-OF-SHARES-REDEEMED> 37,109
<SHARES-REINVESTED> 2,152
<NET-CHANGE-IN-ASSETS> 9,683,390
<ACCUMULATED-NII-PRIOR> 2,166
<ACCUMULATED-GAINS-PRIOR> 83,816
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 138,886
<AVERAGE-NET-ASSETS> 9,387,405
<PER-SHARE-NAV-BEGIN> 15.06
<PER-SHARE-NII> 0.09
<PER-SHARE-GAIN-APPREC> 1.39
<PER-SHARE-DIVIDEND> 0.10
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 16.44
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers financial statements at June 30, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> TOUCHSTONE BALANCED FUND A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 3,960,065
<INVESTMENTS-AT-VALUE> 4,310,837
<RECEIVABLES> 171,821
<ASSETS-OTHER> 12,319
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,494,977
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 42,591
<TOTAL-LIABILITIES> 42,591
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,981,905
<SHARES-COMMON-STOCK> 336,238
<SHARES-COMMON-PRIOR> 267,075
<ACCUMULATED-NII-CURRENT> 14,467
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 119,272
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 336,742
<NET-ASSETS> 4,452,386
<DIVIDEND-INCOME> 16,664
<INTEREST-INCOME> 53,520
<OTHER-INCOME> 0
<EXPENSES-NET> 26,229
<NET-INVESTMENT-INCOME> 43,955
<REALIZED-GAINS-CURRENT> 89,013
<APPREC-INCREASE-CURRENT> 115,287
<NET-CHANGE-FROM-OPS> 248,255
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 31,994
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 88,067
<NUMBER-OF-SHARES-REDEEMED> 20,023
<SHARES-REINVESTED> 1,119
<NET-CHANGE-IN-ASSETS> 1,136,621
<ACCUMULATED-NII-PRIOR> 2,506
<ACCUMULATED-GAINS-PRIOR> 30,260
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 84,716
<AVERAGE-NET-ASSETS> 3,917,943
<PER-SHARE-NAV-BEGIN> 12.42
<PER-SHARE-NII> 0.13
<PER-SHARE-GAIN-APPREC> 0.79
<PER-SHARE-DIVIDEND> 0.10
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.24
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers financial statements at June 30, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 8
<NAME> TOUCHSTONE STANDBY INCOME FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 11,340,941
<INVESTMENTS-AT-VALUE> 11,340,797
<RECEIVABLES> 292,706
<ASSETS-OTHER> 20,749
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 11,654,252
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 69,624
<TOTAL-LIABILITIES> 69,624
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 11,591,282
<SHARES-COMMON-STOCK> 1,161,935
<SHARES-COMMON-PRIOR> 862,865
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 8,416
<ACCUMULATED-NET-GAINS> 1,907
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (145)
<NET-ASSETS> 11,584,628
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 271,193
<OTHER-INCOME> 0
<EXPENSES-NET> 34,660
<NET-INVESTMENT-INCOME> 236,533
<REALIZED-GAINS-CURRENT> 4,239
<APPREC-INCREASE-CURRENT> (14)
<NET-CHANGE-FROM-OPS> 240,758
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 240,805
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 556,160
<NUMBER-OF-SHARES-REDEEMED> 280,147
<SHARES-REINVESTED> 23,057
<NET-CHANGE-IN-ASSETS> 2,981,697
<ACCUMULATED-NII-PRIOR> 4,343
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 3,836
<GROSS-ADVISORY-FEES> 11,553
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 110,181
<AVERAGE-NET-ASSETS> 9,319,170
<PER-SHARE-NAV-BEGIN> 9.97
<PER-SHARE-NII> 0.25
<PER-SHARE-GAIN-APPREC> 0.01
<PER-SHARE-DIVIDEND> 0.26
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.97
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers financial statements at June 30, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> TOUCHSTONE INCOME OPPORTUNITY FUND A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 8,115,265
<INVESTMENTS-AT-VALUE> 7,424,299
<RECEIVABLES> 159,222
<ASSETS-OTHER> 12,319
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,595,840
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 120,823
<TOTAL-LIABILITIES> 120,823
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8,334,533
<SHARES-COMMON-STOCK> 789,805
<SHARES-COMMON-PRIOR> 709,018
<ACCUMULATED-NII-CURRENT> 39,972
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (151,391)
<ACCUM-APPREC-OR-DEPREC> (748,097)
<NET-ASSETS> 7,475,017
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 436,017
<OTHER-INCOME> 0
<EXPENSES-NET> 44,325
<NET-INVESTMENT-INCOME> 391,692
<REALIZED-GAINS-CURRENT> 83,940
<APPREC-INCREASE-CURRENT> (448,785)
<NET-CHANGE-FROM-OPS> 26,847
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 357,373
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 208,257
<NUMBER-OF-SHARES-REDEEMED> 149,435
<SHARES-REINVESTED> 21,965
<NET-CHANGE-IN-ASSETS> 466,151
<ACCUMULATED-NII-PRIOR> 5,651
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 235,330
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 125,406
<AVERAGE-NET-ASSETS> 7,448,788
<PER-SHARE-NAV-BEGIN> 9.89
<PER-SHARE-NII> 0.51
<PER-SHARE-GAIN-APPREC> (0.47)
<PER-SHARE-DIVIDEND> 0.47
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.46
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers financial statements at June 30, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 6
<NAME> TOUCHSTONE BOND FUND A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 4,007,483
<INVESTMENTS-AT-VALUE> 4,137,525
<RECEIVABLES> 155,959
<ASSETS-OTHER> 12,319
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,305,803
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 39,041
<TOTAL-LIABILITIES> 39,041
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,182,147
<SHARES-COMMON-STOCK> 410,045
<SHARES-COMMON-PRIOR> 164,839
<ACCUMULATED-NII-CURRENT> 15,160
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 32,404
<ACCUM-APPREC-OR-DEPREC> 37,051
<NET-ASSETS> 4,266,762
<DIVIDEND-INCOME> 6,574
<INTEREST-INCOME> 79,322
<OTHER-INCOME> 0
<EXPENSES-NET> 11,508
<NET-INVESTMENT-INCOME> 74,388
<REALIZED-GAINS-CURRENT> 36,043
<APPREC-INCREASE-CURRENT> 5,239
<NET-CHANGE-FROM-OPS> 115,670
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 61,646
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 254,323
<NUMBER-OF-SHARES-REDEEMED> 13,383
<SHARES-REINVESTED> 4,266
<NET-CHANGE-IN-ASSETS> 2,582,140
<ACCUMULATED-NII-PRIOR> 1,097
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 2,317
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 66,852
<AVERAGE-NET-ASSETS> 2,578,600
<PER-SHARE-NAV-BEGIN> 10.22
<PER-SHARE-NII> 0.27
<PER-SHARE-GAIN-APPREC> 0.16
<PER-SHARE-DIVIDEND> 0.24
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.41
<EXPENSE-RATIO> 0.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers financial statements at June 30, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 9
<NAME> TOUCHSTONE VALUE PLUS FUND A
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 25,199,056
<INVESTMENTS-AT-VALUE> 24,937,702
<RECEIVABLES> 24,182
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 24,961,884
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 30,018
<TOTAL-LIABILITIES> 30,018
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 25,254,219
<SHARES-COMMON-STOCK> 2,526,311
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 19,908
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (71,602)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (270,659)
<NET-ASSETS> 24,931,866
<DIVIDEND-INCOME> 53,703
<INTEREST-INCOME> 19,589
<OTHER-INCOME> 0
<EXPENSES-NET> 53,384
<NET-INVESTMENT-INCOME> 19,908
<REALIZED-GAINS-CURRENT> (71,602)
<APPREC-INCREASE-CURRENT> (270,659)
<NET-CHANGE-FROM-OPS> (322,353)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,526,311
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 24,931,866
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 85,777
<AVERAGE-NET-ASSETS> 24,565,575
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.00
<PER-SHARE-GAIN-APPREC> (0.13)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.87
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers Trust A financial statements at December 31, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> TOUCHSTONE EMERGING GROWTH FUND A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 3,820,692
<INVESTMENTS-AT-VALUE> 4,848,798
<RECEIVABLES> 125,453
<ASSETS-OTHER> 17,164
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,991,415
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 42,742
<TOTAL-LIABILITIES> 42,742
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,896,709
<SHARES-COMMON-STOCK> 357,329
<SHARES-COMMON-PRIOR> 248,734
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 44,431
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,007,533
<NET-ASSETS> 4,948,673
<DIVIDEND-INCOME> 35,541
<INTEREST-INCOME> 11,528
<OTHER-INCOME> 0
<EXPENSES-NET> 58,786
<NET-INVESTMENT-INCOME> (11,717)
<REALIZED-GAINS-CURRENT> 590,394
<APPREC-INCREASE-CURRENT> 538,558
<NET-CHANGE-FROM-OPS> 1,117,235
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 204
<DISTRIBUTIONS-OF-GAINS> 453,141
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 105,014
<NUMBER-OF-SHARES-REDEEMED> 24,818
<SHARES-REINVESTED> 28,399
<NET-CHANGE-IN-ASSETS> 2,075,416
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 87,905
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 179,153
<AVERAGE-NET-ASSETS> 3,918,911
<PER-SHARE-NAV-BEGIN> 11.55
<PER-SHARE-NII> (0.03)
<PER-SHARE-GAIN-APPREC> 3.71
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 1.38
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 13.85
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers Trust A financial statements at December 31, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> TOUCHSTONE INTERNATIONAL EQUITY FUND A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 4,231,928
<INVESTMENTS-AT-VALUE> 4,653,410
<RECEIVABLES> 128,752
<ASSETS-OTHER> 17,164
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 4,799,326
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 38,559
<TOTAL-LIABILITIES> 38,559
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,283,036
<SHARES-COMMON-STOCK> 417,090
<SHARES-COMMON-PRIOR> 324,402
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (14,430)
<ACCUMULATED-NET-GAINS> 58,978
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 433,183
<NET-ASSETS> 4,760,767
<DIVIDEND-INCOME> 64,641
<INTEREST-INCOME> 8,789
<OTHER-INCOME> 0
<EXPENSES-NET> 66,300
<NET-INVESTMENT-INCOME> 7,130
<REALIZED-GAINS-CURRENT> 524,042
<APPREC-INCREASE-CURRENT> 47,371
<NET-CHANGE-FROM-OPS> 578,543
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,903
<DISTRIBUTIONS-OF-GAINS> 331,108
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 76,304
<NUMBER-OF-SHARES-REDEEMED> 13,074
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1,312,130
<ACCUMULATED-NII-PRIOR> (1,546)
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> (142,837)
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 186,546
<AVERAGE-NET-ASSETS> 4,143,796
<PER-SHARE-NAV-BEGIN> 10.63
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 1.64
<PER-SHARE-DIVIDEND> 0.02
<PER-SHARE-DISTRIBUTIONS> 0.86
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.41
<EXPENSE-RATIO> 1.60
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers Trust A financial statements at December 31, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> TOUCHSTONE GROWTH & INCOME FUND A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 5,774,710
<INVESTMENTS-AT-VALUE> 5,882,451
<RECEIVABLES> 154,190
<ASSETS-OTHER> 17,164
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 6,053,805
<PAYABLE-FOR-SECURITIES> 26,461
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 47,118
<TOTAL-LIABILITIES> 73,579
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,506,335
<SHARES-COMMON-STOCK> 397,027
<SHARES-COMMON-PRIOR> 260,854
<ACCUMULATED-NII-CURRENT> 2,166
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 83,816
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 387,909
<NET-ASSETS> 5,980,226
<DIVIDEND-INCOME> 82,517
<INTEREST-INCOME> 8,204
<OTHER-INCOME> 0
<EXPENSES-NET> 59,864
<NET-INVESTMENT-INCOME> 30,857
<REALIZED-GAINS-CURRENT> 652,500
<APPREC-INCREASE-CURRENT> 212,301
<NET-CHANGE-FROM-OPS> 895,658
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 36,450
<DISTRIBUTIONS-OF-GAINS> 602,875
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 194,618
<NUMBER-OF-SHARES-REDEEMED> 100,955
<SHARES-REINVESTED> 42,510
<NET-CHANGE-IN-ASSETS> 2,320,860
<ACCUMULATED-NII-PRIOR> 777
<ACCUMULATED-GAINS-PRIOR> 27,793
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 192,576
<AVERAGE-NET-ASSETS> 4,604,943
<PER-SHARE-NAV-BEGIN> 14.03
<PER-SHARE-NII> 0.09
<PER-SHARE-GAIN-APPREC> 2.78
<PER-SHARE-DIVIDEND> 0.11
<PER-SHARE-DISTRIBUTIONS> 1.73
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.06
<EXPENSE-RATIO> 1.30
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers Trust A financial statements at December 31, 1997 and is
qualified in its entirety be reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> TOUCHSTONE BALANCED FUND A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 2,966,941
<INVESTMENTS-AT-VALUE> 3,198,163
<RECEIVABLES> 147,205
<ASSETS-OTHER> 17,164
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,362,532
<PAYABLE-FOR-SECURITIES> 40
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 46,727
<TOTAL-LIABILITIES> 46,767
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,061,544
<SHARES-COMMON-STOCK> 267,075
<SHARES-COMMON-PRIOR> 167,149
<ACCUMULATED-NII-CURRENT> 2,506
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 30,260
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 221,455
<NET-ASSETS> 3,315,765
<DIVIDEND-INCOME> 18,418
<INTEREST-INCOME> 72,420
<OTHER-INCOME> 0
<EXPENSES-NET> 35,829
<NET-INVESTMENT-INCOME> 55,009
<REALIZED-GAINS-CURRENT> 499,632
<APPREC-INCREASE-CURRENT> (91,281)
<NET-CHANGE-FROM-OPS> 463,360
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 55,865
<DISTRIBUTIONS-OF-GAINS> 473,049
<DISTRIBUTIONS-OTHER> 8,806
<NUMBER-OF-SHARES-SOLD> 68,410
<NUMBER-OF-SHARES-REDEEMED> 11,763
<SHARES-REINVESTED> 43,278
<NET-CHANGE-IN-ASSETS> 1,230,334
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 8,479
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 156,915
<AVERAGE-NET-ASSETS> 2,653,923
<PER-SHARE-NAV-BEGIN> 12.48
<PER-SHARE-NII> 0.27
<PER-SHARE-GAIN-APPREC> 2.09
<PER-SHARE-DIVIDEND> 0.30
<PER-SHARE-DISTRIBUTIONS> 2.12
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.42
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the
Touchstone Select Advisers Trust A financial statements at December 31, 1997 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 5
<NAME> TOUCHSTONE INCOME OPPORTUNITY FUND A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 7,240,584
<INVESTMENTS-AT-VALUE> 6,892,170
<RECEIVABLES> 155,785
<ASSETS-OTHER> 17,164
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,065,119
<PAYABLE-FOR-SECURITIES> 800
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 55,453
<TOTAL-LIABILITIES> 56,253
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,537,857
<SHARES-COMMON-STOCK> 709,018
<SHARES-COMMON-PRIOR> 419,997
<ACCUMULATED-NII-CURRENT> 5,651
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (235,330)
<ACCUM-APPREC-OR-DEPREC> (299,312)
<NET-ASSETS> 7,008,866
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 865,310
<OTHER-INCOME> 0
<EXPENSES-NET> 84,096
<NET-INVESTMENT-INCOME> 781,214
<REALIZED-GAINS-CURRENT> 241,119
<APPREC-INCREASE-CURRENT> (458,957)
<NET-CHANGE-FROM-OPS> 563,376
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 773,302
<DISTRIBUTIONS-OF-GAINS> 271,405
<DISTRIBUTIONS-OTHER> 242,802
<NUMBER-OF-SHARES-SOLD> 677,881
<NUMBER-OF-SHARES-REDEEMED> 488,860
<SHARES-REINVESTED> 100,000
<NET-CHANGE-IN-ASSETS> 2,429,786
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 21,521
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 242,067
<AVERAGE-NET-ASSETS> 6,974,711
<PER-SHARE-NAV-BEGIN> 10.90
<PER-SHARE-NII> 1.24
<PER-SHARE-GAIN-APPREC> (0.23)
<PER-SHARE-DIVIDEND> 1.22
<PER-SHARE-DISTRIBUTIONS> 0.80
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.89
<EXPENSE-RATIO> 1.20
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers Trust A financial statements at December 31, 1997 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 6
<NAME> TOUCHSTONE BOND FUND A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 1,551,304
<INVESTMENTS-AT-VALUE> 1,572,246
<RECEIVABLES> 135,722
<ASSETS-OTHER> 17,164
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,725,132
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 40,510
<TOTAL-LIABILITIES> 40,510
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,654,030
<SHARES-COMMON-STOCK> 164,839
<SHARES-COMMON-PRIOR> 80,730
<ACCUMULATED-NII-CURRENT> 1,097
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (2,317)
<ACCUM-APPREC-OR-DEPREC> 31,812
<NET-ASSETS> 1,684,622
<DIVIDEND-INCOME> 5,587
<INTEREST-INCOME> 127,545
<OTHER-INCOME> 0
<EXPENSES-NET> 17,137
<NET-INVESTMENT-INCOME> 115,995
<REALIZED-GAINS-CURRENT> 2,874
<APPREC-INCREASE-CURRENT> 28,320
<NET-CHANGE-FROM-OPS> 147,189
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 117,358
<DISTRIBUTIONS-OF-GAINS> 203
<DISTRIBUTIONS-OTHER> 6,489
<NUMBER-OF-SHARES-SOLD> 189,458
<NUMBER-OF-SHARES-REDEEMED> 113,852
<SHARES-REINVESTED> 8,503
<NET-CHANGE-IN-ASSETS> 863,769
<ACCUMULATED-NII-PRIOR> 1,362
<ACCUMULATED-GAINS-PRIOR> (4,299)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 123,828
<AVERAGE-NET-ASSETS> 1,904,113
<PER-SHARE-NAV-BEGIN> 10.17
<PER-SHARE-NII> 0.61
<PER-SHARE-GAIN-APPREC> 0.11
<PER-SHARE-DIVIDEND> 0.66
<PER-SHARE-DISTRIBUTIONS> 0.01
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.22
<EXPENSE-RATIO> 0.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from Touchstone
Select Advisers Trust A financial statements at December 31, 1997 and is
qualfified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 8
<NAME> TOUCHSTONE STANDBY INCOME FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 8,431,304
<INVESTMENTS-AT-VALUE> 8,431,173
<RECEIVABLES> 210,438
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 30,295
<TOTAL-ASSETS> 8,671,906
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 68,975
<TOTAL-LIABILITIES> 68,975
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8,602,555
<SHARES-COMMON-STOCK> 862,865
<SHARES-COMMON-PRIOR> 646,782
<ACCUMULATED-NII-CURRENT> 4,343
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> (3,836)
<ACCUM-APPREC-OR-DEPREC> (131)
<NET-ASSETS> 8,602,931
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 441,825
<OTHER-INCOME> 0
<EXPENSES-NET> 56,260
<NET-INVESTMENT-INCOME> 385,565
<REALIZED-GAINS-CURRENT> (1,729)
<APPREC-INCREASE-CURRENT> (499)
<NET-CHANGE-FROM-OPS> 383,337
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 392,547
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 437,066
<NUMBER-OF-SHARES-REDEEMED> 259,339
<SHARES-REINVESTED> 38,406
<NET-CHANGE-IN-ASSETS> 2,147,276
<ACCUMULATED-NII-PRIOR> 2,838
<ACCUMULATED-GAINS-PRIOR> (603)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 368
<GROSS-ADVISORY-FEES> 18,755
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 263,582
<AVERAGE-NET-ASSETS> 4,247,941
<PER-SHARE-NAV-BEGIN> 9.98
<PER-SHARE-NII> 0.51
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.52
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 9.97
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
