[LOGO]
Virginia State
SNAP
Non-Arbitrage Program
Summer, 1997
Annual Report, Virginia SNAP
[photo]
Capitol Park, Capitol Square, Richmond
The Year In Review
We are proud to present to you the audited financial statements for the SNAP
Fund, a series of Mentor Institutional Trust.
Performance
For the fiscal year ended June 30, 1997, performance of the SNAP Fund continued
to exceed that of its benchmark, the Donoghue First Tier Taxable Institutional
Average.* Total return for the SNAP Fund for the fiscal year was 5.51%, net of
expenses, compared to 5.27% for the Donoghue Average, which is also net of
expenses. The 30-day yield as of July 1, 1997 on the SNAP Fund and Donoghue
Average were 5.52% and 5.31%, respectively.**
As of June 30, the Fund's average maturity was 43 days, in the lower end of our
target range of 40-50 days. With declining prospects of a Fed increase in the
near future, the yield curve has flattened considerably in recent weeks. Even
so, our investment strategy is to maintain our average maturity in the upper end
of our range, under the theory that even though the reward for doing so has
decreased, so has the risk.+ By mid-July, the portfolio maturity had reached 50
days.
Economic Outlook
It can be said that during the year ended June 30 we came very close to "walking
the perfect economic tightrope." The period was characterized by steady growth,
no inflation, and relatively stable Fed policy. The slow but persistent growth
of 1996 seemed to jump dramatically in the first quarter of 1997 when GDP posted
a 5.60% increase. In response, the Fed undertook a "pre-emptive strike" in March
when it raised rates by 0.25%. Further increases were widely expected.
As April progressed into May, however, and then June, economic data became more
benign, indicating that the fast pace may have resulted from the mild winter,
causing higher first-quarter activity, which was really borrowed from the second
quarter. Consequently, the Fed voted no change at its May and July meetings. The
increase in March stands as the only Fed move of the last 18 months, one of the
longest periods of relative stability on record.
We believe that the economy and Fed policy, and therefore interest rates, will
continue on a steady course at least through September and perhaps the remainder
of the year. We would caution, however, that inflationary pressures could begin
to build again by year-end or early 1998.
*Donoghue First Tier Taxable Institutional Average return for the 12-month
period is provided by IBC Financial Data, Inc.
**Past performance is not indicative of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they may
be worth more or less than the original cost. Mutual funds are not obligations
of or guaranteed by any bank and are not federally insured. An investment in the
fund is neither insured nor guaranteed by the US government and there can be no
assurance that the Fund will be able to maintain a stable net asset value of
$1.00 per share.
+While the portfolio managers will endeavor to manage the portfolio in
accordance with the investment process, there are no guarantees that they will
be successful.
<PAGE>
Continued from front page
For your further reference, we re-print for you here the letter from SNAP Fund
president, Paul Costello, that was mailed to SNAP participants in July to
clarify the effects of the new GASB Statement No. 31.
Dear SNAP Participant:
The Governmental Accounting Standards Board recently issued Statement No. 31
(GASB 31), which established the standards for accounting and financial
reporting for all investments held by governmental external investment pools.
GASB 31 addresses the issues of fair valuation of the investments held by
investment pools, the proper recognition and reporting of investment income, and
the minimum disclosures required in the notes to your financial statements.
Since the issuance of GASB 31, we have received many questions from Participants
about the reporting provided through Virginia SNAP, and whether or not
securities valuation information on Participant statements is in compliance with
the new release.
The SNAP Fund
The SNAP Fund is a registered open-end money market mutual fund that is
accounted for in accordance with Rule 2a-7 under the Investment Company Act of
1940. The Rule specifies that a money market fund invest only in high quality
short-term debt securities, and that a dollar-weighted average portfolio
maturity of ninety days or less be maintained. A money market fund must also
maintain a stable net asset value, usually at $1 per share. Finally, a money
market fund's portfolio of investments must be diversified. GASB 31 states that
if the requirements are met for Rule 2a-7, then they will be automatically met
for GASB 31.
GASB 31 clearly states that investments must be reported at their fair value on
the balance sheet or other statement of financial position. For Participants'
investments in the SNAP Fund, fair value is determined by the current share
price in the SNAP Fund as provided on the monthly SNAP Fund Participant account
statements. Underlying portfolio investments within the Fund are stated at
amortized cost, which approximates market value.
Separately-Managed Accounts
GASB 31 requires investments in individual portfolios to be reported at market
value. To facilitate this reporting requirement, the SNAP individual portfolio
reports have been expanded to include market value. The amortized cost of the
portfolio is reported as "book value" on the report.
Participants who borrow through the Virginia Public School Authority's pooled
bond program are required to invest their bond proceeds in SNAP. GASB deems this
participation as involuntary and requires governmental entities to disclose this
involuntary participation in their notes to the financial statements.
Should you have questions, comments or require additional information concerning
compliance with GASB 31 as a SNAP Participant, please do not hesitate to contact
us at (800)570-7627.
Thank you for your continued support of the Virginia State Non-Arbitrage
Program.
Sincerely,
/s/ Paul F. Costello
Paul F. Costello
President, SNAP Fund
Thanks To Our 1996-1997 SNAP Participants
<TABLE>
<S> <C>
Arlington County Commonwealth of Virginia Town of Accomack
Botetourt County Higher Educational Institutions Bonds (9c) Town of Gloucester
Brunswick County Greensville County Town of Kilmarnock
Campbell County Hanover County Virginia Biotechnology Research Park
Chesterfield County Isle of Wight Authority
City of Chesapeake Norfolk Public Health Industrial Development Virginia College Building Authority
City of Danville Northern Virginia Transportation Commission Virginia Commonwealth University
City of Emporia Prince Edward County Virginia Polytechnic Institute and
City of Manassas Randolph Macon County State University
City of Newport News Rappahannock Jail Authority Virginia Port Authority
City of Suffolk Southeastern Public Service Authority Virginia Public Building Authority
City of Virginia Beach Spotsylvania County Virginia Public School Authority
Virginia Rail Express Project
</TABLE>
2
<PAGE>
[PHOTO]
Governor's Palace, Historic Williamsburg, Virginia
Mark Your Calendars Now!
Coming Up: The 5th Annual SNAP Participants Conference. Next spring, we go to
Virginia's colonial capital--Williamsburg--for our day-long meeting at the
Williamsburg Marriott. The conference, which is scheduled for Friday, May 1,
1998, follows our traditional agenda. Speakers and panels of professionals will
be on-hand to address topics relevant to our efforts in the field of public fund
management. As always, the conference is designed to provide a forum for us to
exchange ideas, voice frustrations, get to know each other better, and to learn
more from shared information about our different experiences in keeping the
public trust.
[PHOTO]
Williamsburg, Mariott
Williamsburg, Virginia
The Marriott is nestled in 15 wooded acres with complete amenities including a
health club, tennis and racquetball courts, and an indoor/ outdoor swimming pool
complex. Golf, Busch Gardens, and world-class heritage tourism attractions are
close by. You may want to bring a companion and plan to stay over for the
weekend.
Further details with specific information about the conference are forthcoming.
Meanwhile, please reserve this important date in your busy schedule. We look
forward to seeing you there!
[PHOTO]
Jamestown, Virginia
3
<PAGE>
SNAP Fund
Portfolio of Investments
June 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Percent of Principal Value
Net Assets Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Bankers Acceptances 13.23%
Bank of Montreal, 5.57%, 9/17/97 - 10/31/97 $ 28,500,000 $ 28,019,897
Chase Manhattan Bank, 5.59%, 9/12/97 2,018,993 1,996,107
Corestates Bank
5.38%, 7/7/97 1,500,000 1,498,655
5.35%, 9/2/97 5,000,000 4,953,187
5.44%, 9/9/97 1,500,000 1,484,133
5.71%, 10/21/97 - 10/22/97 10,000,000 9,821,563
5.73%, 11/3/97 8,580,000 8,409,294
5.70%, 11/4/97 3,000,000 2,940,150
5.62%, 3/20/98 4,946,048 4,743,749
First National Bank of Chicago, 5.56%, 7/9/97 20,000,000 19,975,289
Mellon Bank
5.33%, 7/1/97 10,000,000 10,000,000
5.45%, 9/8/97 9,900,000 9,796,586
NationsBank Corporation
5.31%, 7/3/97 - 8/5/97 17,000,000 16,960,912
5.30%, 8/6/97 9,000,000 8,952,300
5.32%, 8/11/97 5,000,000 4,969,706
5.34%, 12/4/97 3,889,670 3,799,663
- ---------------------------------------------------------------------------------------------------------------------------
Total Bankers Acceptances 138,321,191
- ---------------------------------------------------------------------------------------------------------------------------
Bank Notes 28.69%
Banc One, 5.86%, 11/10/97 30,000,000 30,000,000
Bank of America, 6.30%, 4/29/98 20,000,000 19,995,270
Bank of New York, 5.51%, 7/9/97 25,000,000 25,000,000
First Tennessee Bank, 5.70%, 7/16/97 25,000,000 25,000,000
First Union Bank, 5.67%, 7/2/97 40,000,000 40,000,000
Greenwood Trust Company, 5.69%, 8/26/97 20,000,000 20,000,000
Harris Trust, 5.55%, 7/7/97 - 7/17/97 40,000,000 40,000,000
LaSalle National Bank of Chicago, 5.60%, 8/4/97 40,000,000 40,000,000
Mellon Bank, 5.55%, 7/7/97 20,000,000 20,000,000
Wachovia Bank, 5.66%, 9/2/97 40,000,000 40,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Total Bank Notes 299,995,270
- ---------------------------------------------------------------------------------------------------------------------------
Commercial Paper 30.37%
Abbey National North America, 5.28%, 8/21/97 20,000,000 19,850,400
Bear Stearns Companies, Inc., 5.70%, 11/12/97 30,000,000 29,363,500
Downey Savings & Loan, 5.31%, 7/18/97 14,010,000 13,974,870
Ford Motor Credit Corporation, 5.57%, 8/1/97 20,000,000 19,904,072
General Electric Capital
5.42%, 9/2/97 20,000,000 19,810,300
5.38%, 9/25/97 10,000,000 9,871,478
</TABLE>
4
<PAGE>
SNAP Fund
Portfolio of Investments
June 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Percent of Principal Value
Net Assets Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Commercial Paper (continued)
Goldman Sachs Group, 5.33%, 8/14/97 $ 30,000,000 $ 29,804,567
Greenwich Funding Corporation
5.65%, 7/14/97 (a) 20,000,000 19,959,194
International Business Machines, Corporation
5.54%, 7/22/97 20,000,000 19,935,367
Merrill Lynch
5.63%, 7/14/97 5,000,000 4,989,835
5.55%, 7/18/97 35,000,000 34,908,271
Morgan Stanley Dean Witter, 5.57%, 8/4/97 20,000,000 19,894,789
Rincon Securities, Inc.
5.56%, 7/10/97 16,500,000 16,477,065
5.55%, 7/25/97 12,000,000 11,955,600
5.35%, 7/28/97 7,000,000 6,971,912
Smith Barney, 5.55%, 7/15/97 40,000,000 39,913,667
- ---------------------------------------------------------------------------------------------------------------------------
Total Commercial Paper 317,584,887
- ---------------------------------------------------------------------------------------------------------------------------
U.S. Government Securities and Agencies 8.09%
Federal Home Loan Bank
5.26%, 12/10/97 (b) 30,000,000 29,994,866
5.88%, 2/26/98 10,000,000 9,996,611
5.76%, 2/27/98 9,750,000 9,740,247
Federal National Mortgage Association
5.40%, 12/5/97 1,870,000 1,869,057
Student Loan Marketing Association
5.32%, 8/4/97 (b) 13,000,000 12,999,773
5.24%, 11/24/97 (b) 15,000,000 15,000,000
5.28%, 1/13/99 (b) 5,000,000 5,000,000
- ---------------------------------------------------------------------------------------------------------------------------
Total U.S. Government Securities and Agencies 84,600,554
- ---------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements 19.27%
Goldman, Sachs & Company
Dated 6/30/97, 6.12%, Due 7/1/97; collateralized by
$176,798,553 Federal National Mortgage
Association, 6.00% - 7.50%, 1/1/02 - 2/1/27 and
$65,551,847 Federal Home Loan Mortgage Corporation,
5.50%-9.50%, 6/1/10-11/1/26; market value $205,479,970 201,450,950 201,450,950
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
SNAP Fund
Portfolio of Investments
June 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Percent of Principal Value
Net Assets Amount (Note 2)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Total Investments (cost $1,041,952,852) 99.65% $1,041,952,852
- ---------------------------------------------------------------------------------------------------------------------------
Other Assets less Liabilities 0.35% 3,629,949
- ---------------------------------------------------------------------------------------------------------------------------
Net Assets 100.00% $1,045,582,801
- ---------------------------------------------------------------------------------------------------------------------------
Most bankers acceptances and commercial paper are traded at a discount. In such
cases the rate shown represents an effective yield, which is calculated
considering the discount received at the time of purchase by the Fund.
(a) These are securities that may be resold to qualified institutional buyers
under Rule 144A or securities offered pursuant to section 4 (2) of the
Securities Act of 1933, as amended. These securities have been determined to be
liquid under guidelines that have been established by the Board of Trustees.
(b) Floating Rate Securities- The rates shown are the effective rates at June
30, 1997.
See notes to financial statements.
7
<PAGE>
SNAP Fund
Statement of Assets and Liabilities
June 30, 1997
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Assets
Investments, at amortized cost (Note 2)
Investment securities $ 840,501,902
Repurchase agreements 201,450,950
- ---------------------------------------------------------------------------------------------------------------------------
Total investments 1,041,952,852
Interest receivable 3,404,777
Organizational expenses (Note 2) 282,036
- ---------------------------------------------------------------------------------------------------------------------------
Total assets 1,045,639,665
Liabilities
Accrued expenses 56,864
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 56,864
Net Assets $1,045,582,801
- ---------------------------------------------------------------------------------------------------------------------------
Shares outstanding 1,045,582,801
Net asset value per share $ 1.00
- ---------------------------------------------------------------------------------------------------------------------------
Statement of Operations
Year Ended June 30, 1997
- ---------------------------------------------------------------------------------------------------------------------------
Investment Income
Interest income $ 51,868,733
- ---------------------------------------------------------------------------------------------------------------------------
Expenses
Advisory fees (Note 3) 784,372
Custodian fees 166,447
Amortization of organizational expenses (Note 2) 100,722
Legal fees 10,028
Audit fees 8,000
Other 10,245
- ---------------------------------------------------------------------------------------------------------------------------
Total expenses 1,079,814
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income 50,788,919
Net increase in net assets resulting from operations $ 50,788,919
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
7
<PAGE>
SNAP Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Year Ended Period Ended
6/30/97 6/30/96*
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Increase in Net Assets
Operations
Net investment income $ 50,788,919 $ 43,128,806
- ---------------------------------------------------------------------------------------------------------------------------
Increase in net assets from operations 50,788,919 43,128,806
Distributions to Shareholders
from net investment income (50,788,919) (43,128,806)
- ---------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions (at $1.00 per share)
Net proceeds from sale of shares 1,457,944,273 1,356,378,229
Reinvestment of dividends 50,788,304 43,128,806
Cost of shares redeemed (1,417,927,189) (1,073,065,307)
- ---------------------------------------------------------------------------------------------------------------------------
Change in net assets from capital
share transactions 90,805,388 326,441,728
- ---------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 90,805,388 326,441,728
Net Assets
Beginning of period (Note 1) 954,777,413 628,335,685
- ---------------------------------------------------------------------------------------------------------------------------
End of period $1,045,582,801 $954,777,413
</TABLE>
* For the period from July 24, 1995 (commencement of operations as a registrant
under the Investment Company Act of 1940) to June 30, 1996.
See notes to financial statements.
8
<PAGE>
SNAP Fund
Financial Highlights
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Year Ended Period Ended
6/30/97 6/30/96*
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05** 0.05**
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.05 0.05
Distributions from net investment income (0.05)** (0.05)**
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 $ 1.00
- ---------------------------------------------------------------------------------------------------------------------------
Total Return 5.51% 5.29%
- ---------------------------------------------------------------------------------------------------------------------------
Ratios / Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,045,583 $ 954,777
Ratio of expenses to average net assets 0.11% 0.12%(a)
Ratio of net investment income to average
net assets 5.38% 5.53%(a)
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Annualized.
* For the period from July 24, 1995 (commencement of operations as a
registrant under the Investment Company Act of 1940) to June 30, 1996.
** Includes net realized capital gains which were under $0.01 per share.
See notes to financial statements.
9
<PAGE>
SNAP Fund
Notes to Financial Statements
June 30, 1997
- -------------------------------------------------------------------------------
Note 1: Organization
SNAP Fund ("the Fund") is an open-end management investment company registered
with the Securities and Exchange Commission under the Investment Company Act of
1940, as amended. The Fund is a series of shares of beneficial interest of
Mentor Institutional Trust, a Massachusetts business trust. Prior to July 24,
1995, the Fund was known as the Mentor Limited Duration Portfolio and had no
shares outstanding. On July 24, 1995, net assets of the Virginia State
Non-Arbitrage Program (SNAP) in the amount of $628,335,685 were exchanged for
shares of the Fund.
Note 2: Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles which
require management to make estimates and assumptions that affect amounts
reported therein. Although actual results could differ from these estimates, any
such differences are expected to be immaterial to the net assets of the Fund.
A. Valuation of Securities
Investments are stated at amortized cost, which approximates market value as
permitted by Rule 2a-7 of the Investment Company Act of 1940. In the event that
a deviation of 1/2 of 1% or more exists between the Fund's $1.00 per share net
asset value, calculated at amortized cost, and the net asset value calculated by
reference to market-based values, or if there is any other deviation that the
Board of Trustees believes would result in a material dilution to shareholders
or purchasers, the Board of Trustees will promptly consider what action should
be initiated. Net asset value per share is determined each business day for the
Fund and is calculated by dividing net asset value by the number of shares
outstanding at the end of each business day.
B. Repurchase Agreements
It is the policy of the Fund to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book entry system, or to have
segregated within the custodian bank's possession all securities held as
collateral in support of repurchase agreement investments. Additionally,
procedures have been established by the Trust to monitor, on a daily basis, the
market value of each repurchase agreement's underlying securities to ensure the
existence of a proper level of collateral.
The Fund will enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers which are deemed by the Fund's
investment advisor to be credit-worthy, only pursuant to guidelines established
by the Board of Trustees. Risks may arise from the potential inability of
counterparties to honor the terms of the repurchase agreement. Accordingly, the
Fund could receive less than the repurchase price on the sale of collateral
securities.
C. Investment Transactions
Investment transactions are accounted for on trade date and the cost of
investments sold is determined by use of the specific identification method.
D. Interest Income and Expenses
Interest income is recorded on the accrual basis and includes amortization of
premiums and discounts on investments. Expenses arising in connection with the
operation of the Fund are recorded on the accrual basis and paid from the income
of the Fund.
E. Organizational Expenses
Organizational expenses are related to costs incurred in connection with the
registration of the Fund as a management investment company. Such expenses are
being amortized on a straight-line basis over 60 months.
F. Distributions to Shareholders
Dividends, equal to the net investment income plus or minus any net realized
gains or losses, are declared daily and paid monthly.
G. Federal Income Taxes
No provision for federal income taxes has been made as it is the Fund's policy
to comply with the provisions applicable to regulated investment companies under
the Internal Revenue Code and to distribute to its shareholders within the
allowable time limit substantially all taxable income and realized capital
gains.
10
<PAGE>
SNAP Fund
Notes to Financial Statements (continued)
- -------------------------------------------------------------------------------
Note 3: Investment Management Fees
The Fund has entered into an Investment Management and Advisory Agreement with
Mentor Investment Advisors, LLC ("Mentor Advisors") to provide investment
advisory services to the Fund. The Fund pays advisory fees to Mentor Advisors
monthly at the following annual rates expressed as a percentage of the average
daily net assets of the Fund:
Average Daily Net Assets Rate
---------------------------------------
First $500 million 0.09%
Next $250 million 0.08%
Next $250 million 0.07%
Next $250 million 0.06%
Over $1.25 billion 0.05%
Note 4: Governmental Accounting and Financial Reporting for Investments and
Investment Pools Statement No. 3 of the Governmental Accounting Standards Board,
("Statement No. 3") indicates that credit risk is the risk that an Investor may
not be able to obtain possession of its investment instrument or collateral at
maturity. Statement No. 3 requires that a portfolio of a subject entity be
characterized into certain categories. Risk category 1 includes investments that
are insured or registered or for which the securities are held by the Investor
or its agent in the Investor's name. Risk category 2 includes uninsured or
unregistered investments for which the securities are held by the broker's or
dealer's trust department or agent in the Investor's name. Risk category 3
includes uninsured or unregistered investments for which the securities are held
by the broker or dealer, or by its trust department or agent but not in the
Investor's name. All investments held at June 30, 1997 are in risk category 1.
Statement No. 31 of the Governmental Accounting Standards Board requires, among
other things, disclosure of the extent of involuntary participation (those
investors that are required by legal provisions) in the Fund. Participants who
borrow through the Virginia Public School Authority's pooled bond program are
required to invest their bond proceeds in the Fund.
Note 5: Capital Share Information
Net assets consist entirely of paid-in-capital applicable to $1,045,582,801 no
par value shares of beneficial interest outstanding. An unlimited number of
shares have been authorized for issuance.
- ----------------------------------------------------------------------------
Independent Auditors' Report
The Board Of Trustees
Mentor Institutional Trust
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments of SNAP Fund, a portfolio of Mentor Institutional
Trust, as of June 30, 1997, and the related statement of operations for the year
ended June 30, 1997, statements of changes in net assets and financial
highlights for the year then ended and for the period from July 24, 1995
(commencement of operations as a registrant under the Investment Company Act of
1940) to June 30, 1996. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of June 30, 1997 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of SNAP
Fund, a portfolio of Mentor institutional Trust, as of June 30, 1997, and the
results of its operations for the year ended June 30, 1997, changes in its net
assets and financial highlights for the periods specified in the first paragraph
above, in conformity with generally accepted accounting principles.
/s/ KPMG PEAT MARWICK LLP
Boston, Massachusetts
July 25, 1997
11
<PAGE>
SNAP Advisory Board
Alfred C. Anderson
Josephine Blankenship
Max Bohnstedt
Ellen V. Booker
Barbara O. Carraway
Richard A. Cordle
John J. Cusimano
Susan F. Dewey
Terry W. Forehand
Daniel J. Ludeman
Christoper E. Martino
Marie G. Neal
Gyles R. Norwood
Francis X. O'Leary
Fred W. Parker
John H. Tuohy
Ronald H. Williams
H. Roger Zurn, Jr.
Commonwealth of Virginia
Treasury Board
Susan F. Dewey, Chairman
Diana F. Cantor
John H. Clements
Spencer H. Elmore
William E. Landsidle
Danny M. Payne
Dr. Charles D. Whyte
[MENTOR INVESTMENT GROUP LOGO]
Our Commitment
To form a partnership that benefits the state,
program participants, and taxpayers of Virginia.
Riverfront Plaza, 901 East Byrd Street, Richmond, VA 23219
(804) 782-3770 (800) 570-SNAP FAX (804) 782-6604
This publication must be preceded or accompanied by a Mentor Institutional Trust
prospectus which contains complete information regarding fees, sales charges,
and expenses. Please read it carefully before investing or sending money. The
SNAP fund is neither insured nor guaranteed by the U. S. Government, and there
can be no assurance that the Fund will be able to maintain a stable net asset
value of $1.00 per share.
1997 Mentor Distributors, LLC
