INVENTOR FUNDS (LOGO)
[GRAPHIC OMITTED]
1996
ANNUAL
REPORT TO
SHAREHOLDERS
May 31, 1996
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TABLE OF CONTENTS INVENTOR FUNDS
Letter to Shareholders.........................................................1
Advisers' Review...............................................................2
Statements of Net Assets.......................................................6
Statements of Operations......................................................19
Statements of Changes in Net Assets...........................................20
Financial Highlights..........................................................22
Notes to Financial Statements.................................................24
Report of Independent Accountants.............................................27
Notice to Shareholders........................................................28
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MAY 31, 1996
<PAGE>
LETTER TO SHAREHOLDERS INVENTOR FUNDS
July 26, 1996
DEAR INVENTOR FUNDS SHAREHOLDER:
In the recent Inventor Funds Annual Report dated April 30, 1996, we
informed you that Integra Financial Corporation, the parent to the Inventor
Fund's investment adviser, Integra Trust Company, had agreed to merge with
National City Corporation. Subsequently, on May 2, 1996, Inventor Funds
shareholders approved the appointment of National City as investment adviser. As
the new investment adviser to Inventor Funds, National City has proposed
combining four Inventor Funds portfolios (Pennsylvania Tax-Exempt Money Market
Fund, Pennsylvania Municipal Bond Fund, Intermediate Government Securities Fund,
and GNMA Securities Fund) with ARMADA FUNDS portfolios which have similar
investment objectives and policies. This merger of funds will take place in the
fall of 1996.
In order to create one consolidated family of mutual funds, the fiscal year
for the Pennsylvania Tax-Exempt Money Market Fund, Pennsylvania Municipal Bond
Fund, Intermediate Government Securities Fund, and GNMA Securities Fund (the
"Funds") has been changed to coincide with ARMADA FUNDS fiscal reporting period
which ends on May 31. In order to bridge the discrepancy between the two
reporting periods, we are providing shareholders with this one-month financial
report representing the operations of the Funds' from May 1, 1996 through May
31, 1996. Going forward, financial information for these Funds will appear as
part of the ARMADA FUNDS' Annual Reports. By establishing one consistent year
end within the ARMADA FUNDS complex, it is hoped that the funds will be able to
maximize various opportunities for economies of scale.
As the reorganization of the funds approaches this fall, we will keep you
informed of any new developments. If you have any questions about this report,
the Inventor Funds or the ARMADA FUNDS, please call us at 1-800-6INVENT.
Sincerely,
/s/ DAVID G. LEE
David G. Lee
President
Inventor Funds, Inc.
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MAY 31, 1996 1
<PAGE>
ADVISERS' REVIEW INVENTOR FUNDS
INTERMEDIATE GOVERNMENT
SECURITIES FUND
Sub-adviser: Wellington Management
Company
Portfolio Manager: Thomas L. Pappas
INVESTMENT OBJECTIVE
The investment objective of the Fund is to preserve capital and maintain a high
degree of liquidity while providing current income as is consistent with the
standards prescribed for the portfolio.
INVESTMENT REVIEW
For the one month ended May 31, 1996, the Intermediate Government Securities
Fund lost 0.19%, less than the 0.27% industry average loss as calculated by the
Lipper Analytical Services in the Lipper Intermediate U.S. Government Funds
Index. The Fund suffered slightly less than the Merrill Lynch 3-5 Year
Intermediate-Term Treasury Index which gave up 0.21% for the same period.
Strong job numbers and cautionary messages from the Federal Reserve drove
interest rates higher in the month. Mortgage-backed securities outperformed U.S.
Treasury securities as the spread on mortgage-backed securities tightened 2 to 3
basis points; investors were attracted by the mortgages' extra 100 basis points
in yield.
The Fund continued the mix between mortgage-backed securities (57%) and U.S.
Treasury securities (42%) that it has had through the first four months of the
calendar year.
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TOTAL RETURN
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One One Since
Month Year Inception
5/1/96 5/1/96 8/10/94
to 5/31/96 1 to 4/30/96 2 to 5/31/96 2
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Inventor Intermediate
Government Securities (0.19)% 7.09% 6.46%
Fund without load
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Inventor Intermediate
Government Securities (4.20)% 2.78% 4.06%
Fund with load
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COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE INVENTOR
INTERMEDIATE GOVERNMENT SECURITIES FUND, WITH AND WITHOUT LOAD, VERSUS THE
MERRILL LYNCH 3-5 YEAR INTERMEDIATE-TERM TREASURY INDEX.
GRAPH
[GRAPHIC OMITTED]
PLOT POINTS:
8/31/94 4/30/95 4/30/96 5/31/96
INVENTOR INTERMEDIATE
GOVERNMENT SECURITIES FUND $10,000 $10,400 $11,138 $11,260
INVENTOR INTERMEDIATE
GOVERNMENT SECURITIES FUND, WITH LOAD $ 9,600 $ 9,984 $10,692 $10,810
MERRILL LYNCH 3-5 YEAR
INTERMEDIATE-TERM TREASURY INDEX $10,000 $10,446 $11,275 $11,222
PAST PERFORMANCE OF THE FUND IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
2RETURN IS FOR THE PERIOD INDICATED AND HAS BEEN ANNUALIZED.
INTERMEDIATE GOVERNMENT SECURITIES FUND
PORTFOLIO STRUCTURE
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05/31/96
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Merrill Lynch
3-5 Year
Intermediate-Term
Fund Treasury Index
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Weighted Average Maturity............5.1 4.0
Weighted Average Coupon..............8.0 6.9
Weighted Average Quality.............AAA AAA
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2 MAY 31, 1996
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ADVISERS' REVIEW INVENTOR FUNDS
GNMA SECURITIES FUND
Sub-adviser: Wellington Management
Company
Portfolio Manager: Thomas L. Pappas
INVESTMENT OBJECTIVE
The GNMA Securities Fund seeks to provide the highest level of current income
consistent with preservation of capital and a high degree of liquidity. The Fund
invests primarily (at least 65% of its assets) in mortgage pass-through
securities guaranteed by the Government National Mortgage Association.
INVESTMENT REVIEW
For the one month ended May 31, 1996, the GNMA Securities Fund lost 0.35%, less
than the 0.40% industry average loss as calculated by the Lipper Analytical
Services in the Lipper GNMA Funds Index. The Fund's performance was in step with
the Lehman Brothers GNMA Index which gave up 0.34% for the same period.
Strong job numbers and cautionary messages from the Federal Reserve drove
interest rates higher in the month. Mortgage-backed securities outperformed U.S.
Treasury securities as the spread on mortgage-backed securities tightened 2 to 3
basis points; investors were attracted by the mortgages' extra 100 basis points
in yield.
The Fund looked to continue to control interest rate and prepayment risk while
remaining fully invested. This largely involved owning "seasoned" GNMA
pass-throughs instead of newer securities which have more prepayment uncertainty
and risk. Accordingly, more than 90% of the Fund's holdings were in GNMAs.
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TOTAL RETURN
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One One Since
Month Year Inception
5/1/96 5/1/95 8/10/94
to 5/31/96 1 to 4/30/96 2 to 5/31/96 2
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GNMA Securities
without load (0.35)% 7.97% 7.89%
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GNMA Securities
with load (4.32)% 3.68% 5.46%
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COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE INVENTOR GNMA
SECURITIES FUND, WITH AND WITHOUT LOAD, VERSUS THE LEHMAN BROTHERS GNMA INDEX.
GRAPH
[GRAPHIC OMITTED]
PLOT POINTS:
8/31/94 4/30/95 4/30/96 5/31/96
INVENTOR GNMA SECURITIES FUND $10,000 $10,549 $11,389 $11,509
INVENTOR GNMA SECURITIES FUND,
WITH LOAD $ 9,600 $10,127 $10,934 $11,049
LEHMAN BROTHERS GNMA INDEX $10,000 $10,603 $11,434 $11,395
PAST PERFORMANCE OF THE FUND IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
2RETURN IS FOR THE PERIOD INDICATED AND HAS BEEN ANNUALIZED.
GNMA SECURITIES FUND
PORTFOLIO STRUCTURE
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05/31/96
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Lehman Brothers
GNMA
Fund Index
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Weighted Average Maturity......... 7.6 9.5
Weighted Average Coupon........... 7.8 7.8
Weighted Average Quality.......... AAA AAA
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MAY 31, 1996 3
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ADVISERS' REVIEW INVENTOR FUNDS
PENNSYLVANIA MUNICIPAL
BOND FUND
Sub-adviser: Weiss, Peck & Greer L.L.P.
Portfolio Manager: S. Blake Miller
INVESTMENT OBJECTIVE
The Pennsylvania Municipal Bond Fund seeks to provide current income exempt
from both regular federal income and Pennsylvania personal income tax
while preserving capital.
INVESTMENT REVIEW
Yields for intermediate term instruments exhibited heightened volatility as they
moved generally higher during the month of May. Market participants initially
pushed rates downward on low inflation numbers; however, towards the end of the
month, yields were pushed higher on stronger than expected economic statistics,
largely housing related.
For the one month period ended May 31, 1996, the Fund achieved a total return of
(0.03)% versus a total return of (0.04)% for the average Pennsylvania
Intermediate-Term Fund as reported by Lipper Analytical Services and a total
return of (0.05)% for the Lehman Brothers 5 Year Pennsylvania Municipal Index.
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TOTAL RETURN
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One One Since
Month Year Inception
5/1/96 5/1/95 8/10/94
to 5/31/96 1 to 4/30/96 2 to 5/31/96 2
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Pennsylvania Municipal Bond
without load (0.03)% 5.06% 4.66%
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Pennsylvania Municipal Bond
with load (4.01)% 0.84% 2.31%
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COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE INVENTOR
PENNSYLVANIA MUNICIPAL BOND FUND, WITH AND WITHOUT LOAD, VERSUS THE LEHMAN
BROTHERS 5 YEAR PENNSYLVANIA MUNICIPAL INDEX.
GRAPH
[GRAPHIC OMITTED]
PLOT POINTS:
8/31/94 4/30/95 4/30/96 5/31/96
INVENTOR PENNSYLVANIA
MUNICIPAL BOND FUND $10,000 $10,287 $10,807 $10,878
INVENTOR PENNSYLVANIA
MUNICIPAL BOND FUND, WITH LOAD $ 9,600 $ 9,875 $10,375 $10,443
LEHMAN BROTHERS 5 YEAR
PENNSYLVANIA MUNICIPAL IDNEX $10,000 $10,352 $11,045 $11,040
PAST PERFORMANCE OF THE FUND IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
1RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
2RETURN IS FOR THE PERIOD INDICATED AND HAS BEEN ANNUALIZED.
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4 MAY 31, 1996
<PAGE>
ADVISERS' REVIEW INVENTOR FUNDS
PENNSYLVANIA TAX-EXEMPT
MONEY MARKET FUND
Sub-adviser: Weiss, Peck & Greer
Portfolio Manager: Janet A. Fiorenza
INVESTMENT OBJECTIVE
The Pennsylvania Tax-Exempt Money Market Fund seeks to provide current income
exempt from regular federal income tax and Pennsylvania personal income taxes,
consistent with the stability of principal. The Fund invests in high quality
debt obligations issued by or on behalf of the Commonwealth of Pennsylvania and
its political subdivisions and financing authorities.
All securities in which the Fund invests must be rated in one of the two highest
short-term rating categories by one or more nationally recognized statistical
rating organizations or be of comparable quality as determined by the
sub-adviser.
INVESTMENT REVIEW
For the one month period ended May 31, 1996, the average weighted maturity of
the Pennsylvania Tax Exempt Money Market Fund ranged between 50 and 60 days. As
of May 31, 1996, approximately 50% of the Fund's assets were invested in
variable rate demand obligations which have daily and weekly put options and
rate resets; the remainder of the Fund's assets were invested in longer-term
securities maturing within 397 days. The Fund is sound and cushioned with
relation to current events and trends in the financial markets.
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MAY 31, 1996 5
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
INTERMEDIATE FACE MARKET
GOVERNMENT AMOUNT VALUE
SECURITIES FUND (000) (000)
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U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS (54.0%)
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FHLMC
5.200%, 11/15/99 $ 305 $ 305
5.750%, 05/15/06 500 483
5.250%, 09/15/06 705 685
5.750%, 03/15/07 300 290
5.750%, 05/15/07 2,319 2,160
7.500%, 08/01/07 6 6
6.000%, 08/15/07 400 378
6.250%, 11/15/07 355 349
7.500%, 07/01/10 76 77
7.500%, 09/01/10 250 251
6.500%, 11/01/10 963 925
7.500%, 11/01/10 365 366
7.500%, 05/01/11 2,293 2,297
8.500%, 09/01/16 31 32
7.500%, 05/01/17 673 660
8.500%, 06/01/17 214 219
9.000%, 07/15/20 85 87
6.000%, 05/15/21 1,000 942
9.250%, 06/01/23 127 132
7.000%, 05/01/24 1,217 1,161
7.000%, 07/01/25 1,945 1,856
7.000%, 09/01/25 3,878 3,700
7.000%, 10/01/25 1,976 1,885
8.500%, 05/01/26 1,005 1,027
FHLMC REMIC
8.000%, 11/15/99 2,000 2,053
5.200%, 09/15/05 500 486
4.950%, 01/15/09 100 99
4.750%, 07/25/11 500 492
6.000%, 06/15/19 500 473
8.700%, 02/15/20 488 499
8.500%, 10/15/20 2,000 2,053
FNMA
7.606%, 06/01/96 (A) 559 576
7.000%, 01/25/99 1,250 1,251
FACE MARKET
AMOUNT VALUE
(000) (000)
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6.500%, 02/25/07 $ 400 $ 387
7.500%, 12/01/07 274 269
7.500%, 03/01/08 243 239
6.500%, 03/01/14 434 403
6.500%, 05/25/15 945 939
6.000%, 11/25/17 400 385
9.500%, 05/01/18 197 209
6.000%, 11/25/19 500 488
FNMA REMIC
6.750%, 01/25/06 500 487
7.500%, 08/25/07 1,000 1,015
8.125%, 01/25/20 1,086 1,100
8.250%, 10/25/20 110 112
GNMA
6.500%, 11/15/08 175 169
9.500%, 06/15/09 62 66
9.500%, 07/15/09 55 58
9.500%, 08/15/09 10 11
9.500%, 09/15/09 33 35
9.500%, 10/15/09 103 110
9.000%, 07/15/16 96 101
9.000%, 08/15/16 162 169
9.000%, 10/15/16 205 214
9.000%, 11/15/16 555 580
9.000%, 03/15/17 584 610
8.000%, 05/15/17 836 840
9.000%, 11/15/17 178 189
9.500%, 06/15/19 338 361
8.500%, 09/15/21 36 37
8.500%, 11/15/21 1,243 1,274
8.500%, 07/15/22 1,121 1,148
7.500%, 08/15/22 24 23
8.000%, 08/15/22 30 30
8.500%, 08/15/22 166 170
7.500%, 12/15/22 1,261 1,235
7.500%, 02/15/23 145 142
7.500%, 04/15/23 1,344 1,316
7.500%, 05/15/23 473 463
7.500%, 06/15/23 567 556
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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6 MAY 31, 1996
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
INTERMEDIATE FACE MARKET
GOVERNMENT AMOUNT VALUE
SECURITIES FUND (cont'd) (000) (000)
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7.500%, 07/15/23 $ 386 $ 378
7.000%, 10/15/23 849 809
7.000%, 11/15/23 307 292
7.000%, 12/01/23 357 341
8.000%, 02/15/24 1,901 1,910
8.000%, 11/15/25 31 31
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TOTAL U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS
(Cost $48,609) 47,956
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U.S. GOVERNMENT AGENCY
OBLIGATION (3.3%)
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FNMA
5.390%, 08/05/98 3,000 2,937
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TOTAL U.S. GOVERNMENT AGENCY OBLIGATION
(Cost $2,971) 2,937
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U.S. TREASURY OBLIGATIONS (42.2%)
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U.S. Treasury Notes
8.875%, 11/15/97 6,200 6,434
7.000%, 04/15/99 10,000 10,146
7.750%, 11/30/99 3,000 3,109
U.S. Treasury Bonds
10.750%, 02/15/03 12,500 15,134
11.875%, 11/15/03 1,500 1,935
12.000%, 08/15/13 500 698
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TOTAL U.S. TREASURY OBLIGATIONS
(Cost $38,253) 37,456
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REPURCHASE AGREEMENT (1.7%)
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J.P. Morgan
5.320%, dated 05/31/96,
matures 06/03/96, repurchase
price $1,494,662,
(collateralized by U.S. Treasury
Note, par value $1,553,000,
matures 08/31/98, market
value $1,521,455) 1,494 1,494
MARKET
VALUE
(000)
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TOTAL REPURCHASE AGREEMENT
(Cost $1,494) $ 1,494
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TOTAL INVESTMENTS (101.2%)
(Cost $91,327) 89,843
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OTHER ASSETS AND LIABILITIES, NET (-1.2%) (1,014)
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NET ASSETS:
Portfolio shares of Class A ($.00001 par
value - 2 billion authorized) based on
8,908,905 outstanding shares of
beneficial interest $89,585
Accumulated net realized gain on investments 733
Net unrealized depreciation on investments (1,484)
Distributions in excess of net investment income (5)
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TOTAL NET ASSETS: (100.0%) $88,829
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NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A $ 9.97
Maximum sales charge of 4.00% 0.42
------
OFFERING PRICE PER SHARE - CLASS A(DAGGER) $10.39
======
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- ------------
(DAGGER) THE OFFERING PRICE IS CALCULATED BY DIVIDING THE NET ASSET VALUE
BY 1 MINUS THE MAXIMUM SALES CHARGE OF 4.00%.
(A) FLOATING RATE INSTRUMENT WITH DEMAND FEATURES. THE RATE
REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON
MAY 31, 1996. THE DATE SHOWN IS THE LONGER OF THE RESET DATE
OR THE DEMAND DATE.
FHLMC FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
REMIC REAL ESTATE MORTGAGE INVESTMENT CONDUIT
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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MAY 31, 1996 7
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
FACE MARKET
GNMA AMOUNT VALUE
SECURITIES FUND (000) (000)
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U.S. GOVERNMENT MORTGAGE-BACKED
OBLIGATIONS (100.9%)
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FHLMC
7.500%, 04/01/00 $ 194 $ 196
7.500%, 10/01/01 66 66
7.000%, 11/01/10 1,084 1,065
7.000%, 06/01/23 425 406
7.000%, 03/01/24 204 194
7.000%, 07/01/25 324 309
7.000%, 09/01/25 499 476
7.000%, 12/01/25 1,195 1,140
6.500%, 04/01/26 498 462
FNMA
6.500%, 11/01/25 91 85
6.500%, 03/01/26 408 379
6.500%, 05/01/26 495 460
GNMA
7.250%, 11/15/04 217 210
7.000%, 10/15/07 306 301
7.000%, 05/15/08 300 295
7.500%, 07/15/08 45 45
7.000%, 01/15/09 22 22
7.000%, 02/15/09 161 158
7.000%, 03/15/09 268 264
9.000%, 05/15/09 832 865
6.500%, 06/15/09 44 42
9.000%, 06/15/09 105 109
9.500%, 07/15/09 171 181
9.500%, 08/15/09 491 522
9.500%, 09/15/09 29 31
9.500%, 10/15/09 6 6
9.500%, 11/15/09 41 43
10.000%, 11/15/09 362 395
10.000%, 12/15/09 32 35
6.500%, 10/15/10 85 82
6.500%, 11/15/10 888 855
FACE MARKET
AMOUNT VALUE
(000) (000)
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7.000%, 12/15/10 $1,957 $1,929
11.500%, 01/15/13 34 39
11.500%, 02/15/13 57 64
11.500%, 03/15/13 29 32
11.500%, 05/15/13 66 75
7.500%, 06/15/13 310 303
11.500%, 06/15/13 86 97
11.500%, 07/15/13 23 26
11.500%, 06/15/15 48 55
11.250%, 08/15/15 205 229
11.500%, 10/15/15 42 48
9.500%, 12/15/15 12 12
11.500%, 01/15/16 18 21
9.500%, 03/15/16 128 137
9.000%, 06/15/16 72 76
9.500%, 07/15/16 4 5
9.500%, 08/15/16 166 177
9.000%, 08/20/16 2,004 2,080
10.250%, 08/20/16 30 32
9.500%, 09/15/16 175 187
9.500%, 10/15/16 17 18
9.500%, 11/15/16 39 42
8.500%, 01/15/17 164 168
9.500%, 01/15/17 17 18
8.500%, 02/15/17 200 205
8.000%, 03/15/17 16 17
8.500%, 03/15/17 230 235
8.000%, 04/15/17 108 108
8.500%, 04/15/17 1,708 1,750
8.000%, 05/15/17 81 81
8.500%, 05/15/17 86 88
9.500%, 05/15/17 20 22
9.000%, 06/15/17 451 471
8.000%, 07/15/17 97 97
9.500%, 07/15/17 45 49
9.000%, 08/15/17 295 309
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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8 MAY 31, 1996
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
FACE MARKET
GNMA AMOUNT VALUE
SECURITIES FUND (cont'd) (000) (000)
- -------------------------------------------------------
9.500%, 08/15/17 $166 $177
9.500%, 09/15/17 129 138
9.500%, 10/15/17 232 248
8.500%, 11/15/17 567 583
9.500%, 12/15/17 24 26
9.500%, 03/15/18 31 33
10.250%, 03/20/18 134 141
9.500%, 04/15/18 34 36
9.500%, 06/15/18 71 76
9.500%, 07/15/18 15 15
9.500%, 08/15/18 39 41
9.500%, 09/15/18 10 10
10.250%, 09/20/18 149 157
9.500%, 10/15/18 7 7
9.500%, 11/15/18 13 13
9.500%, 12/15/18 69 74
9.500%, 01/15/19 36 38
9.500%, 03/15/19 6 7
9.500%, 05/15/19 31 33
9.500%, 07/15/19 7 8
9.500%, 09/15/19 20 22
9.500%, 10/15/19 37 39
9.500%, 12/15/19 26 27
9.500%, 06/15/20 21 22
9.000%, 07/15/20 229 239
9.500%, 07/15/20 22 23
9.500%, 08/15/20 245 263
9.500%, 10/15/20 49 52
9.500%, 11/15/20 233 249
9.500%, 12/15/20 99 106
8.500%, 04/15/21 411 422
8.500%, 05/15/21 39 40
8.500%, 06/15/21 391 401
9.000%, 06/15/21 451 471
8.500%, 07/15/21 67 69
9.500%, 07/15/21 433 463
FACE MARKET
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------
8.500%, 09/15/21 $ 627 $ 643
8.500%, 10/15/21 92 94
8.500%, 11/15/21 709 726
8.500%, 12/15/21 913 936
8.500%, 02/15/22 327 335
8.500%, 03/15/22 374 383
7.500%, 05/15/22 50 49
8.500%, 05/15/22 308 315
8.500%, 08/15/22 358 367
7.500%, 09/15/22 106 104
8.500%, 09/15/22 510 522
7.000%, 10/15/22 25 24
7.500%, 10/15/22 584 572
7.000%, 11/15/22 436 416
8.500%, 11/15/22 310 318
7.500%, 12/12/22 416 408
7.000%, 01/15/23 335 319
7.500%, 02/15/23 374 366
7.000%, 04/15/23 29 27
7.500%, 04/15/23 508 497
7.000%, 05/15/23 34 33
7.500%, 05/15/23 99 98
7.000%, 06/15/23 98 94
7.500%, 06/15/23 373 365
7.000%, 07/15/23 1,285 1,225
7.500%, 07/15/23 1,431 1,402
8.000%, 07/15/23 19 19
7.000%, 08/15/23 2,332 2,222
7.500%, 08/15/23 201 197
6.500%, 09/15/23 146 135
7.000%, 09/15/23 320 305
6.500%, 10/15/23 1,090 1,007
7.000%, 10/15/23 2,791 2,661
7.500%, 10/15/23 1,733 1,697
7.000%, 11/15/23 527 502
6.500%, 12/15/23 495 458
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
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MAY 31, 1996 9
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
FACE MARKET
GNMA AMOUNT VALUE
SECURITIES FUND (cont'd) (000) (000)
- -------------------------------------------------------
7.000%, 12/15/23 $ 574 $ 547
6.000%, 12/20/23 443 397
7.000%, 01/15/24 665 633
7.500%, 01/15/24 813 796
7.000%, 02/15/24 1,447 1,378
7.500%, 02/15/24 366 359
8.000%, 02/15/24 21 21
7.000%, 03/15/24 41 39
7.500%, 04/15/24 364 356
8.000%, 04/15/24 1,787 1,795
6.500%, 05/15/24 29 27
7.000%, 05/15/24 610 581
7.500%, 06/15/24 547 536
8.000%, 06/15/24 254 255
8.000%, 08/15/24 85 85
8.000%, 09/15/24 1,329 1,335
8.000%, 06/15/25 63 64
8.000%, 07/15/25 472 474
7.000%, 08/15/25 44 42
8.000%, 08/15/25 1,633 1,641
7.000%, 09/15/25 1,204 1,146
8.000%, 09/15/25 47 48
8.000%, 10/15/25 3,221 3,236
8.000%, 11/15/25 557 560
6.500%, 02/15/26 268 247
8.000%, 02/15/26 84 84
8.000%, 03/15/26 795 799
- -------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(Cost $62,225) 61,092
- -------------------------------------------------------
FACE MARKET
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------
REPURCHASE AGREEMENT (1.3%)
- -------------------------------------------------------
J.P. Morgan
5.320%, dated 05/31/96,
matures 06/03/96, repurchase
price $771,342, (collateralized
by U.S. Treasury Note, par value
$802,000, matures 08/31/98,
market value $785,709) $771 $771
- -------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(Cost $771) 771
- -------------------------------------------------------
TOTAL INVESTMENTS (102.2%)
(Cost $62,996) 61,863
- -------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (-2.2%) (1,331)
- -------------------------------------------------------
NET ASSETS:
Portfolio shares of Class A ($.00001 par
value - 2 billion authorized) based on
6,033,136 outstanding shares of
beneficial interest 61,028
Accumulated net realized gain on investments 638
Net unrealized depreciation on investments (1,133)
Distributions in excess of net investment income (1)
- -------------------------------------------------------
TOTAL NET ASSETS: (100.0%) $60,532
- -------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A $10.03
Maximum sales charge of 4.00% 0.42
------
OFFERING PRICE PER SHARE - CLASS A(DAGGER) $10.45
======
- -----------------
(DAGGER) THE OFFERING PRICE IS CALCULATED BY DIVIDING THE NET ASSET VALUE
BY 1 MINUS THE MAXIMUM SALES CHARGE OF 4.00%.
FHLMC FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA FEDERAL NATIONAL MORTGAGE ASSOCIATION
GNMA GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
10 MAY 31, 1996
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
FACE MARKET
PENNSYLVANIA AMOUNT VALUE
MUNICIPAL BOND FUND (000) (000)
- -------------------------------------------------------
MUNICIPAL BONDS (98.2%)
- -------------------------------------------------------
PENNSYLVANIA (98.2%)
Allegheny County, Higher
Education Building Authority,
Duquesne University Project,
AMBAC, RB
6.500%, 03/01/10 $ 380 $ 421
Allegheny County, Hospital
Development Authority, Magee
Woman's Hospital Project,
Series O, RB, Escrowed
to Maturity
10.125%, 10/01/02 140 167
Allegheny County, Industrial
Development Authority, RB
5.250%, 06/01/96 (A) (B) 705 705
Allegheny County, Sanitation
Authority, Sewer Revenue,
FGIC, RB
5.725%, 12/01/08 (C) 2,750 1,358
Bradford Area School District,
FGIC GO
5.250%, 10/01/07 1,000 989
Bucks County, Water & Sewer
Authority , FGIC, RB
6.150%, 12/01/05 455 473
Butler County, Sewer Authority,
RB, Prerefunded at 100
7.250%, 01/01/04 (D) 120 130
Cumberland County, Messiah
College Project, AMBAC, RB
5.000%, 10/01/07 1,000 953
Dauphin County, General Authority
Health Center, RB
5.150%, 01/01/97 1,000 1,001
FACE MARKET
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------
Delaware County, Education
Development Authority,
Villanova University Project,
RB, Prerefunded at 102
7.750%, 08/01/98 (D) $1,000 $ 1,089
Delaware River Port Authority
PA & NJ Bridges, RB, Escrowed
to Maturity
6.000%, 01/15/10 655 665
Delaware River Port Authority,
PA & NJ Bridges, AMBAC, RB
7.375%, 01/01/07 1,500 1,607
Erie County, Prison Authority,
MBIA, RB, Prerefunded
at 100
6.600%, 11/01/01 (D) 1,000 1,085
Greene County, Industrial
Development Authority, Pollution
Control, RB
6.100%, 02/01/07 125 125
Lancaster County, FGIC, GO
6.100%, 07/01/01 100 100
5.900%, 07/01/99 500 501
Lehigh County, Series A, AMBAC,
GO, Prerefunded at 100
6.000%, 10/15/99 (D) 1,250 1,303
Lower Providence Township,
MBIA, GO
5.000%, 05/01/07 215 204
Middletown Township, Bucks
County, SB, Escrowed to Maturity
6.100%, 10/01/00 380 399
Monroeville, Hospital Authority,
East Suburban Health Center
Project, RB, Prerefunded
at 100
7.600%, 07/01/04 (D) 895 1,008
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
MAY 31, 1996 11
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
FACE MARKET
PENNSYLVANIA AMOUNT VALUE
MUNICIPAL BOND FUND (cont'd) (000) (000)
- -------------------------------------------------------
Montgomery County, Hospital
Authority, Suburban General
Hospital Project, RB, Escrowed
to Maturity
7.750%, 05/01/02 $ 155 $ 169
Northampton County, Higher
Education Authority, Lehigh
University Project, RB
5.500%, 09/01/98 1,030 1,051
Pennsylvania Housing Finance
Agency, Rental Housing, RB
5.150%, 07/01/03 400 399
5.000%, 01/01/98 450 453
Pennsylvania Housing Finance
Agency, Single Family Mortgage,
Series P, RB
7.200%, 04/01/00 50 53
Pennsylvania Housing Finance
Agency, Single Family Mortgage,
Series Z, RB
7.000%, 10/01/02 50 53
Pennsylvania Infrastructure
Investment Authority Pennvest,
Subseries B, RB
6.450%, 09/01/04 1,500 1,622
Pennsylvania State Higher
Education Authority, Series N,
MBIA, RB
5.250%, 06/15/08 405 393
Pennsylvania State Higher
Education Authority, Student
Loan, Series A, FGIC, RB
6.800%, 12/01/00 100 107
FACE MARKET
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------
Pennsylvania State Higher
Educational Facilities Authority,
University of Pennsylvania
Project, Series A, RB
6.500%, 09/01/04 $ 250 $ 272
5.550%, 09/01/09 1,300 1,280
Pennsylvania State Higher
Educational Facilities Authority,
University of Pennsylvania
Project, Series B, RB
5.250%, 01/01/07 100 98
Pennsylvania State
Intergovernmental Co-op
Authority Special Tax, City of
Philadelphia Funding Project,
RB, Prerefunded at 100
6.800%, 06/15/02 (D) 1,500 1,646
Pennsylvania State Turnpike
Commission, Series K, RB,
Escrowed to Maturity
7.250%, 12/01/99 1,230 1,335
Pennsylvania State Turnpike
Commission, Series O,
FGIC, RB
5.250%, 12/01/01 1,010 1,025
Pennsylvania State, Series 1, GO
6.200%, 09/15/04 900 952
Pennsylvania State, Series 2, GO
4.750%, 06/15/98 565 569
Philadelphia Gas Works,
Series 13, RB, Prerefunded
at 102
7.700%, 06/15/01 (D) 460 526
Philadelphia Gas Works,
Series 14, FSA, RB
6.250%, 07/01/08 300 319
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
12 MAY 31, 1996
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
FACE MARKET
PENNSYLVANIA AMOUNT VALUE
MUNICIPAL BOND FUND (cont'd) (000) (000)
- -------------------------------------------------------
Philadelphia School District,
Series A, GO, MBIA
5.800%, 07/01/08 $ 465 $ 472
Philadelphia, Graduate Hospital
Project, RB, Escrowed to Maturity
7.000%, 07/01/10 335 363
Philadelphia, Hospital & Higher
Educational Authority Children's
Hospital Project, Series A, RB
5.100%, 02/15/03 500 499
Philadelphia, Hospital & Higher
Educational Facilities Authority,
Children's Hospital Project,
Series A, RB, Prerefunded
at 102
6.500%, 02/15/02 (D) 200 219
Philadelphia, Thomas Jefferson
University Hospital, RB,
Escrowed to Maturity
7.000%, 07/01/08 180 198
Philadelphia, Water & Waste
Authority, MBIA, RB
5.500%, 06/15/07 1,500 1,513
Pittsburgh & Allegheny County,
Pennsylvania Auditorium
Authority, RB
6.400%, 12/01/01 800 805
Pittsburgh, Series A, GO, MBIA
5.500%, 09/01/06 955 961
Schuylkill County, Industrial
Development Authority,
Westwood Energy Project, RB
3.950%, 06/01/96 (A) (B) 800 800
Scranton-Lackawanna, Health &
Welfare Authority, RB,
Escrowed to Maturity
6.625%, 07/01/09 570 603
FACE MARKET
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------
Seneca Valley School District,
Series A, FGIC, GO
5.700%, 07/01/06 $1,000 $1,017
Southeastern Pennsylvania,
Transportation Authority,
Lease Project, RB
5.750%, 12/01/04 775 782
Swarthmore Borough, College
Authority, RB
6.000%, 09/15/06 855 892
Tyrone School District, GO, MBIA
5.700%, 09/15/08 1,250 1,252
Union City, Higher Educational
Facilities Financing Authority
Bucknell University Project,
MBIA, RB
6.200%, 04/01/06 1,000 1,047
- -------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $37,804) 38,028
- -------------------------------------------------------
TOTAL INVESTMENTS (98.2%)
(Cost $37,804) 38,028
- -------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (1.8%) 705
- -------------------------------------------------------
NET ASSETS:
Portfolio shares of Class A ($.00001 par
value - 2 billion authorized) based on
3,843,129 outstanding shares of
beneficial interest 38,427
Accumulated net realized gain on investments 82
Net unrealized appreciation on investments 224
- -------------------------------------------------------
TOTAL NET ASSETS: (100.0%) $38,733
- -------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
MAY 31, 1996 13
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
PENNSYLVANIA
MUNICIPAL BOND FUND (cont'd)
- -------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE - CLASS A $10.08
Maximum sales charge of 4.00% $0.42
------
OFFERING PRICE PER SHARE - CLASS A(DAGGER) $10.50
======
- ---------------
(DAGGER)THE OFFERING PRICE IS CALCULATED BY DIVIDING THE NET ASSET VALUE
BY 1 MINUS THE MAXIMUM SALES CHARGE OF 4.00%.
(A) FLOATING RATE INSTRUMENT WITH DEMAND FEATURES. RATE REFLECTED
ON THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON
MAY 31, 1996. THE DATE SHOWN IS THE LONGER OF THE RESET
DATE OR THE DEMAND DATE.
(B) SECURITY IS BACKED BY A LETTER OF CREDIT.
(C) ZERO COUPON BOND - THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS
REPRESENTS THE SECURITY'S EFFECTIVE YIELD IN EFFECT ON MAY 31, 1996.
(D PREREFUNDED SECURITY - THE MATURITY DATE SHOWN IS THE
PREREFUNDED DATE.
AMBAC AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
FGIC FEDERAL GUARANTY INSURANCE CORPORATION
FSA FINANCIAL SECURITY ASSURANCE
GO GENERAL OBLIGATION
MBIA MUNICIPAL BOND INSURANCE ASSOCIATION
RB REVENUE BOND
SB SPECIAL OBLIGATION BOND
FACE
PENNSYLVANIA TAX-EXEMPT AMOUNT VALUE
MONEY MARKET FUND (000) (000)
- -------------------------------------------------------
MUNICIPAL BONDS (99.1%)
- -------------------------------------------------------
PENNSYLVANIA (99.1%)
Allegheny County, Higher
Education Authority, Duquesne
University Project, AMBAC, RB
3.350%, 03/01/97 $ 640 $ 640
Allegheny County, Higher
Education Building Authority,
University of Pittsburgh Project,
Series 85B
3.400%, 06/06/96 (A) (C) 100 100
Allegheny County, Series C-41,
GO
3.750%, 06/06/96 (A) (C) 400 400
Allegheny County, Series C-44,
FGIC, GO
4.000%, 06/01/96 685 685
Beaver County, Industrial
Development Authority,
Duquesne Light and Power
Project, TECP (C)
3.600%, 07/11/96 1,000 1,000
Beaver County, Industrial
Development Authority,
Duquesne Light and Power
Project, Series C, TECP
3.400%, 09/10/96 (C) 1,500 1,500
Berks County, Industrial
Development Authority,
Rilsaw Industrial Elf
Aquitaine Project
3.825%, 06/06/96 (A) (C) 1,700 1,700
Bucks County, Industrial
Development Authority, CPC
International Project,
Series 85, RB
4.125%, 06/01/96 (A) 2,000 2,000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
14 MAY 31, 1996
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
FACE
PENNSYLVANIA TAX-EXEMPT AMOUNT VALUE
MONEY MARKET FUND (cont'd) (000) (000)
- -------------------------------------------------------
Chester County, Hospital
Authority, Paoli Memorial
Hospital Project, RB,
Prerefunded at 102
7.625%, 10/01/96 (B) $ 950 $ 982
Clarks Summit-South Abington,
Sewer Authority, AMBAC, RB,
Prerefunded at 100
8.125%, 01/01/97 (B) 500 513
Cumberland County, Municipal
Authority, United Methodist
Homes Aging Project, RB
3.950%, 06/01/96 (A) (C) 1,500 1,500
Delaware County, Industrial
Development Authority, British
Petroleum Project, RB
3.650%, 06/01/96 (A) 300 300
Delaware County, Industrial
Development Authority,
Henderson/Radnor Joint
Venture Project, RB
3.750%, 06/06/96 (A) (C) 1,150 1,150
Delaware County, Industrial
Development Authority,
Philadelphia Electric Project,
FGIC, RB
3.600%, 07/11/96 1,100 1,100
Delaware Valley, Regional
Finance Authority
3.650%, 06/06/96 (A) (C) 2,200 2,200
Delaware Valley, Regional
Finance Authority,
Series D, RB
3.650%, 06/06/96 (A) (C) 800 800
FACE
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------
Dover Township, Sewer Authority,
MBIA, RB
3.500%, 11/01/96 $ 285 $ 285
East Penn, School District
Authority, Series A, FGIC, GO
3.500%, 09/01/96 400 400
Easton, Series A, FGIC, GO
4.500%, 12/01/96 300 302
Erie County, Hospital Authority,
Union City Memorial Hospital
Project, RB
3.850%, 06/06/96 (A) (C) 1,200 1,200
Greater Johnstown, School District
Authority, GO, MBIA, Escrowed
to Maturity
6.350%, 02/01/97 100 102
Hempfield Township, Sewer
Authority, Westmoreland County
Project, FGIC, RB
4.300%, 09/01/96 530 531
Lackawanna, River Basin
Authority, AMBAC, RB
3.500%, 09/01/96 910 910
Lancaster, Higher Education
Authority, Franklin and Marshall
Project, RB
3.900%, 06/05/96 (A) 1,550 1,550
Langhorne, Hospital Revenue
Authority, Franciscan Health
Systems Project, Series C
3.600%, 06/03/96 (A) (C) 300 300
Lehigh County, Water and Sewer
Authority, Series B, FGIC, RB
3.500%, 06/05/96 (A) (C) 430 430
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
MAY 31, 1996 15
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
FACE
PENNSYLVANIA TAX-EXEMPT AMOUNT VALUE
MONEY MARKET FUND (cont'd) (000) (000)
- -------------------------------------------------------
Lehigh County, Water Authority,
FGIC, RB
3.500%, 06/06/96 (A) (C) $ 835 $ 835
Millcreek Township, School
District Authority, Series B,
FGIC, GO, Prerefunded at 100
7.100%, 08/15/96 (B) 175 176
Montgomery County, Higher
Education & Health Authority,
Frankford Hospital Project, RB,
Prerefunded at 102
7.875%, 01/01/97 (B) 1,000 1,044
Montgomery County, Hospital
Authority, Abington Memorial
Hospital Project, RB,
Prerefunded at 103
8.000%, 06/01/96 (B) 2,800 2,884
Montgomery County, Industrial
Development Authority
3.600%, 06/05/96 (A) 1,000 1,000
Montgomery County, Industrial
Development Authority, Ikea
Property Project, RB
3.800%, 06/06/96 (A) (C) 1,500 1,500
Montgomery County, Industrial
Development Authority, Merck
Industrial Development Nashville
4.000%, 06/06/96 (A) 1,000 1,000
Montgomery County, Industrial
Development Authority, PECO
Energy Project, TECP (C)
3.400%, 07/24/96 300 300
Montgomery County, Industrial
Development Authority,
Plymouth Woods Project, RB
3.800%, 06/06/96 (A) (C) 500 500
FACE
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------
Montgomery County, Industrial
Development Authority, Valley
Square Project, RB
3.650%, 06/06/96 (A) (C) $1,400 $1,400
Moon Township, Industrial
Development Authority,
Executive Office Association
Project, RB
3.800%, 06/06/96 (A) (C) 1,500 1,500
North Umberland County,
Industrial Development Authority,
Atlas Development Association
3.800%, 06/06/96 (A) (C) 840 840
Pennsylvania Intergovernment
Co-op Authority, Special Tax
Revenue, City of Philadelphia
Funding Project, FGIC, RB
5.200%, 06/15/96 300 300
Pennsylvania State, Higher
Education Facilities Authority,
Thomas Jefferson University
Project, Series B, RB
3.300%, 08/26/96 (C) 3,500 3,500
Pennsylvania State, Infrastructure
Investment Authority, Penvest
Loan Pool Program, RB
3.850%, 06/05/96 (A) (C) 100 100
Pennsylvania State,
Intergovernment Co-op Authority,
Special Tax Revenue, City of
Philadelphia Funding Project,
FGIC, RB
3.750%, 06/15/96 600 600
Philadelphia, Gas Works Authority,
Tenth Series, RB,
Prerefunded at 102
7.200%, 07/01/96 (B) 2,100 2,148
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
16 MAY 31, 1996
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
FACE
PENNSYLVANIA TAX-EXEMPT AMOUNT VALUE
MONEY MARKET FUND (cont'd) (000) (000)
- -------------------------------------------------------
Philadelphia, Gas Works
Authority, Eleventh Project,
Series C, AMBAC, RB
6.700%, 01/01/97 $ 100 $ 102
Philadelphia, Hospital & Higher
Education Authority, MR Project,
RB, Prerefunded at 102
8.625%, 08/01/96 (B) 1,500 1,541
Philadelphia, Industrial
Development Authority,
Multi-Family Housing For
Harbor View Towers Project, RB
3.950%, 06/06/96 (A) (C) 2,650 2,650
Philadelphia, Redevelopment
Authority, Pennsylvania School
For Deaf Project, RB
3.850%, 06/06/96 (A) (C) 2,405 2,405
Philadelphia, Redevelopment
Authority, Rivers Edge Project, RB
4.150%, 06/06/96 (A) (C) 1,000 1,000
Philadelphia, School District
Authority, GO, TRAN
4.500%, 06/28/96 2,000 2,001
Philadelphia, School District
Authority, Series A, MBIA, GO
4.000%, 07/01/96 1,500 1,501
Philadelphia, Series A, GO, TRAN
4.500%, 06/27/96 1,000 1,000
Philadelphia, Water & Sewer
Authority, Series 12, RB,
Prerefunded at 101
7.250%, 07/01/96 (B) 200 203
Pittsburgh, Equipment Leasing
Authority, AMBAC, RB
5.950%, 07/01/96 300 301
FACE
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------
Pittsburgh, Water & Sewer
Authority, Series A, FGIC, RB
3.500%, 09/01/96 $ 550 $ 550
Sayre, Health Care Facilities
Authority, Capital Finance
Project, Series F, AMBAC, RB
3.500%, 06/06/96 (A) 1,100 1,100
Schuylkill County, Industrial
Development Authority,
Gilberton Power Project, RB
3.650%, 06/06/96 (A) (C) 1,900 1,900
Schuylkill County, Industrial
Development Authority,
Westwood Energy Project, RB
3.950%, 06/03/96 (A) (C) 1,440 1,440
Scranton - Lackawana, Health and
Welfare Authority, University
of Scranton Project, RB
3.650%, 11/01/96 (C) 1,800 1,800
Shaler Township, TRAN
3.810%, 12/31/96 1,200 1,201
Temple University, University
Funding, Series 96, RB
4.625%, 05/20/97 2,500 2,522
Warren County, Hospital Authority,
Warren General Hospital
Project, RB
3.800%, 06/06/96 (A) (C) 1,000 1,000
Westmoreland County, Industrial
Development Authority,
Series D, RB
3.850%, 06/06/96 (A) (C) 755 755
Whitehall Township, TRAN
3.930%, 12/31/96 700 701
- -------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $67,880) 67,880
- -------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
MAY 31, 1996 17
<PAGE>
STATEMENT OF NET ASSETS INVENTOR FUNDS
PENNSYLVANIA TAX-EXEMPT VALUE
MONEY MARKET FUND (cont'd) (000)
- -------------------------------------------------------
TOTAL INVESTMENTS (99.1%)
(Cost $67,880) $67,880
- -------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.9%) 592
- -------------------------------------------------------
NET ASSETS:
Portfolio shares of Class A ($.00001 par
value - 2 billion authorized) based on
68,475,317 outstanding shares of
beneficial interest 68,475
Accumulated net realized loss on investments (3)
- -------------------------------------------------------
TOTAL NET ASSETS: (100.0%) $68,472
- -------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE - CLASS A $ 1.00
- -------------------------------------------------------
(A)FLOATING RATE INSTRUMENT WITH DEMAND FEATURES. THE RATE
REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON
MAY 31, 1996. THE DATE SHOWN IS THE LONGER OF THE RESET DATE
OR DEMAND DATE.
(B)PREREFUNDED SECURITY - THE MATURITY DATE SHOWN IS THE
PREREFUNDED DATE.
(C)SECURITY IS BACKED BY A LETTER OF CREDIT.
AMBAC AMERICAN MUNICIPAL BOND ASSURANCE COMPANY
FGIC FEDERAL GUARANTY INSURANCE CORPORATION
GO GENERAL OBLIGATION
MBIA MUNICIPAL BOND INSURANCE ASSOCIATION
RB REVENUE BOND
TECP TAX EXEMPT COMMERCIAL PAPER
TRAN TAX AND REVENUE ANTICIPATION NOTE
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
18 MAY 31, 1996
<PAGE>
STATEMENTS OF OPERATIONS INVENTOR FUNDS
FOR THE PERIOD MAY 1, 1996 TO MAY 31, 1996
<TABLE>
<CAPTION>
PENNSYLVANIA
INTERMEDIATE GNMA PENNSYLVANIA TAX-EXEMPT
GOVERNMENT SECURITIES MUNICIPAL BOND MONEY MARKET
SECURITIES FUND FUND FUND FUND
(000) (000) (000) (000)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME: $ 516 $ 379 $ 170 $226
----- ----- ----- ----
EXPENSES:
Investment advisory fees........................ 54 37 23 27
12b-1 fees...................................... 19 13 8 15
Administrative fees............................. 14 10 6 9
Transfer agent fees & expenses.................. 3 2 2 2
Custody fees.................................... 1 3 1 1
Trustee fees.................................... 1 -- -- --
Miscellaneous fees.............................. 4 3 3 4
----- ----- ----- ----
Total expenses................................ 96 68 43 58
Less: Expenses waived......................... (31) (23) (15) (25)
----- ----- ----- ----
Total net expenses............................ 65 45 28 33
----- ----- ----- ----
NET INVESTMENT INCOME.............................. 451 334 142 193
----- ----- ----- ----
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS
Net realized gain (loss) on investments......... (19) -- 8 (3)
Net change in unrealized depreciation
on investments................................ (624) (529) (159) --
----- ----- ----- ----
Net realized and unrealized loss
on investments............................. (643) (529) (151) (3)
----- ----- ----- ----
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.................................... $(192) $(195) $ (9) $190
===== ===== ===== ====
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
MAY 31, 1996 19
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS INVENTOR FUNDS
INTERMEDIATE GOVERNMENT
SECURITIES FUND
5/1/96 5/1/95
TO 5/31/96 TO 4/30/96
(000) (000)
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment income............................. $ 451 $ 5,340
Net realized gain (loss) on investments........... (19) 1,517
Net change in unrealized appreciation
(depreciation) on investments................... (624) (1,492)
------- -------
Net increase (decrease) resulting
from operations.............................. (192) 5,365
------- -------
DIVIDENDS DISTRIBUTED FROM:
Net investment income............................. (456) (5,340)
Net realized gains................................ -- (403)
------- -------
Total dividends distributed..................... (456) (5,743)
------- -------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued....................... 1,260 47,044
Reinvestment of cash distributions................ 8 64
Cost of shares repurchased........................ (1,692) (10,145)
------- -------
Increase (decrease) in net assets
derived from capital share transactions....... (424) 36,963
------- -------
Net increase (decrease) in net assets................ (1,072) 36,585
------- -------
NET ASSETS:
Beginning of period............................... 89,901 53,316
------- -------
End of period..................................... $88,829 $89,901
======= =======
CAPITAL SHARE TRANSACTIONS:
Capital shares outstanding at beginning of period.... 8,952 5,319
Shares issued..................................... 126 4,610
Shares issued in lieu of cash distributions....... 1 6
Shares repurchased................................ (170) (983)
------- -------
Increase (decrease) derived from capital
share transactions........................... (43) 3,633
------- -------
Capital shares outstanding at end of period.......... 8,909 8,952
======= =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
20 MAY 31, 1996
<TABLE>
<CAPTION>
<PAGE>
PENNSYLVANIA MUNICIPAL PENNSYLVANIA TAX-EXEMPT
GNMA SECURITIES FUND BOND FUND MONEY MARKET FUND
5/1/96 5/1/95 5/1/96 5/1/95 5/01/96 5/1/95
TO 5/31/96 TO 4/30/96 TO 5/31/96 TO 4/30/96 TO 5/31/96 TO 4/30/96
(000) (000) (000) (000) (000) (000)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income............................. $ 334 $ 3,469 $ 142 $ 1,573 $ 193 $ 2,271
Net realized gain (loss) on investments........... -- 1,611 8 74 (3) --
Net change in unrealized appreciation
(depreciation) on investments................... (529) (1,242) (159) 179 -- --
------- ------- ------- ------- ------- --------
Net increase (decrease) resulting
from operations.............................. (195) 3,838 (9) 1,826 190 2,271
------- ------- ------- ------- ------- --------
DIVIDENDS DISTRIBUTED FROM:
Net investment income............................. (335) (3,469) (142) (1,573) (193) (2,271)
Net realized gains................................ -- (1,053) -- -- -- --
------- ------- ------- ------- ------- --------
Total dividends distributed..................... (335) (4,522) (142) (1,573) (193) (2,271)
------- ------- ------- ------- ------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued....................... 524 24,292 316 6,604 6,078 148,939
Reinvestment of cash distributions................ 8 83 -- 2 4 51
Cost of shares repurchased........................ (1,631) (3,742) (241) (2,688) (8,029) (135,236)
------- ------- ------- ------- ------- --------
Increase (decrease) in net assets
derived from capital share transactions....... (1,099) 20,633 75 3,918 (1,947) 13,754
------- ------- ------- ------- ------- --------
Net increase (decrease) in net assets................ (1,629) 19,949 (76) 4,171 (1,950) 13,754
------- ------- ------- ------- ------- --------
NET ASSETS:
Beginning of period............................... 62,161 42,212 38,809 34,638 70,422 56,668
------- ------- ------- ------- ------- --------
End of period..................................... $60,532 $62,161 $38,733 $38,809 $68,472 $ 70,422
======= ======= ======= ======= ======= ========
CAPITAL SHARE TRANSACTIONS:
Capital shares outstanding at beginning of period.... 6,143 4,154 3,836 3,451 70,422 56,668
Shares issued..................................... 52 2,341 31 647 6,078 148,939
Shares issued in lieu of cash distributions....... 1 8 -- -- 4 51
Shares repurchased................................ (163) (360) (24) (262) (8,029) (135,236)
-------- -------- -------- -------- -------- --------
Increase (decrease) derived from capital
share transactions........................... (110) 1,989 7 385 (1,947) 13,754
-------- -------- -------- -------- -------- --------
Capital shares outstanding at end of period.......... 6,033 6,143 3,843 3,836 68,475 70,422
======== ======== ======== ======== ======== ========
</TABLE>
- --------------------------------------------------------------------------------
MAY 31, 1996 21
<PAGE>
FINANCIAL HIGHLIGHTS INVENTOR FUNDS
FOR THE YEAR OR PERIOD ENDED
<TABLE>
<CAPTION>
NET REALIZED DISTRIBUTIONS
NET ASSET AND DISTRIBUTIONS FROM
VALUE NET UNREALIZED FROM NET REALIZED
BEGINNING INVESTMENT GAINS INVESTMENT CAPITAL
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD OF PERIOD INCOME ON SECURITIES INCOME GAINS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------------------------
INTERMEDIATE GOVERNMENT SECURITIES
- ----------------------------------
Class A (3)
May 31, 1996* .............................. $10.04 $0.05 $(0.07) $(0.05) $ --
April 30, 1996 ............................. 10.02 0.64 0.07 (0.64) (0.05)
April 30, 1995(1)........................... 10.00 0.44 0.02 (0.44) --
- ---------------
GNMA SECURITIES
- ---------------
Class A (3)
May 31, 1996* .............................. $10.12 $0.05 $(0.09) $(0.05) $ --
April 30, 1996 ............................. 10.16 0.66 0.14 (0.66) (0.18)
April 30, 1995(1)........................... 10.00 0.48 0.16 (0.48) --
- ---------------------------
PENNSYLVANIA MUNICIPAL BOND
- ---------------------------
Class A (3)
May 31, 1996* .............................. $10.12 $0.04 $(0.04) $(0.04) $ --
April 30, 1996 ............................. 10.04 0.43 0.08 (0.43) --
April 30, 1995(1)........................... 10.00 0.29 0.04 (0.29) --
- -----------------------
PENNSYLVANIA TAX-EXEMPT
MONEY MARKET
- -----------------------
Class A
May 31, 1996* .............................. $ 1.00 $ -- $ -- $ -- $ --
April 30, 1996 ............................. 1.00 0.03 -- (0.03) --
April 30, 1995(2)........................... 1.00 0.02 -- (0.02) --
<FN>
- -----------------------
(DAGGER) RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED.
* ALL RATIOS ARE FOR THE PERIOD OF MAY 1, 1996 THROUGH MAY 31, 1996 AND HAVE BEEN ANNUALIZED.
1 COMMENCED OPERATIONS ON AUGUST 10, 1994. ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
2 COMMENCED OPERATIONS ON AUGUST 8, 1994. ALL RATIOS FOR THE PERIOD HAVE BEEN ANNUALIZED.
3 TOTAL RETURN DOES NOT REFLECT THE SALES CHARGE.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- --------------------------------------------------------------------------------
22 MAY 31, 1996
<PAGE>
FINANCIAL HIGHLIGHTS INVENTOR FUNDS
FOR THE YEAR OR PERIOD ENDED
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES INCOME TO
NET ASSET NET ASSETS RATIO OF INVESTMENT TO AVERAGE AVERAGE
VALUE END EXPENSES INCOME TO NET ASSETS NET ASSETS PORTFOLIO
FOR A SHARE OUTSTANDING END TOTAL OF PERIOD TO AVERAGE AVERAGE (EXCLUDING (EXCLUDING TURNOVER
THROUGHOUT THE PERIOD OF PERIOD RETURN (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) RATE
- --------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------
INTERMEDIATE GOVERNMENT SECURITIES
- ----------------------------------
Class A (3)
May 31, 1996* ............... $ 9.97 (0.19)%(DAGGER) $ 88,829 0.85% 5.88% 1.25% 5.48% 2%
April 30, 1996 .............. 10.04 7.09 89,901 0.85 6.20 1.25 5.80 94
April 30, 1995(1)............ 10.02 4.75(DAGGER) 53,316 0.85 6.17 1.33 5.69 172
- ---------------
GNMA SECURITIES
- ---------------
Class A (3)
May 31, 1996* ............... $10.03 (0.35)%(DAGGER) $ 60,532 0.85% 6.33% 1.28% 5.90% 1%
April 30, 1996 .............. 10.12 7.97 62,161 0.85 6.30 1.29 5.86 149
April 30, 1995(1)............ 10.16 6.61(DAGGER) 42,212 0.85 6.68 1.40 6.13 226
- ---------------------------
PENNSYLVANIA MUNICIPAL BOND
- ---------------------------
Class A (3)
May 31, 1996* ............... $10.08 (0.03)%(DAGGER) $ 38,733 0.85% 4.32% 1.31% 3.86% --
April 30, 1996 .............. 10.12 5.06 38,809 0.85 4.16 1.24 3.77 22%
April 30, 1995(1)............ 10.04 3.38(DAGGER) 34,638 0.85 4.05 1.36 3.54 4
- -----------------------
PENNSYLVANIA TAX-EXEMPT
MONEY MARKET
- -----------------------
Class A
May 31, 1996* ............... $ 1.00 0.28%(DAGGER) $ 68,472 0.55% 3.24% 0.97% 2.82% --
April 30, 1996 .............. 1.00 3.36 70,422 0.55 3.29 0.96 2.88 --
April 30, 1995(2)............ 1.00 2.32(DAGGER) 56,668 0.55 3.21 1.04 2.72 --
</TABLE>
- --------------------------------------------------------------------------------
MAY 31, 1996 23
<PAGE>
NOTES TO FINANCIAL STATEMENTS INVENTOR FUNDS
MAY 31, 1996
1. ORGANIZATION
Inventor Funds, Inc. (the "Corporation") was organized as a Maryland
corporation under Articles of Incorporation dated April 22, 1994. The
Corporation is registered under the Investment Company Act of 1940, as amended,
as a diversified, open-end management investment company with seven funds:
Equity Growth Fund, Intermediate Government Securities Fund, GNMA Securities
Fund, Pennsyslvania Municipal Bond Fund, Prime Obligations Money Market Fund,
Treasury Securities Money Market Fund, and Pennsylvania Tax-Exempt Money Market
Fund (referred to as a "Fund" or collectively as the "Funds"). The Funds'
prospectus provides a description of each Fund's investment objectives, policies
and strategies. The financial statements of the Equity Growth, Prime Obligations
Money Market, and Treasury Securities Money Market Funds are not presented
herein. The assets of each Fund are segregated, and a shareholder's interest is
limited to the Fund in which shares are held.
At a shareholder meeting on May 2, 1996, shareholders approved National City
Bank as investment adviser to the Funds in conjunction with the merger between
Integra Financial Corporation, the parent to the Fund's investment adviser,
Integra Trust Company and National City Corporation. National City Bank is
National City Corporation's banking group and has served as investment adviser
to the ARMADA FUNDS since 1986. Terms of the investment advisory agreement
remained the same as described in Footnote 3.
The Corporation's Board of Directors approved the dissolution of the Prime
Obligations Money Market and Treasury Securities Money Market Funds at the May
13, 1996 board meeting. These Funds were dissolved on May 31, 1996.
Upon shareholder approval, the GNMA Securities, Intermediate Government
Securities, Pennsylvania Municipal Bond and the Pennsylvania Tax-Exempt Money
Market Funds will be merged intact to the ARMADA FUNDS. As a result, the fiscal
year for these Funds has been changed to coincide with the ARMADA FUNDS fiscal
year which ends on May 31. The Equity Growth Fund will be merged into the
existing Armada Equity Fund. The expected date of the Funds' merger is in the
fall of 1996.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds.
SECURITY VALUATION -- Investment securities of the Pennsylvania Tax-Exempt
Money Market Fund (the "Money Market Fund") are stated at amortized cost which
approximates market value. Under this valuation method, purchase discounts and
premiums are accreted and amortized ratably to maturity and are included in
interest income. Investment securities of the Intermediate Government Securities
Fund, GNMA Securities Fund and the Pennsylvania Municipal Bond Fund (the
"Non-Money Market Funds") which are listed on a securities exchange for which
market quotations are available are valued by an independent pricing service at
the last quoted sales price for such securities on each business day. If there
is no such reported sale, these securities and unlisted securities for which
market quotations are readily available are valued at the most recent quoted bid
price.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date of the security purchase or sale. Cost used in
determining net realized capital gains and losses on the sale of securities are
those of the specific securities sold, adjusted for the accretion and
amortization of purchase discounts or premiums during the respective holding
period which is calculated using the effective interest method. Interest income
is recorded on the accrual basis. Gains and losses from pay-downs of
mortgage-backed securities are included in net investment income.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for Repurchase
Agreements are held by the custodian bank until maturity of the Repurchase
Agreements. Provisions of the Agreements and procedures adopted by National City
Bank (the "Adviser") ensure that the market value of the collateral, including
interest thereon, is sufficient in the event of default by the counterparty. If
the counterparty defaults and the value of the collateral declines or if the
counterparty enters an insolvency proceeding, realization of the collateral by
the Fund may be delayed or limited.
TBA PURCHASE COMMITMENTS -- The Intermediate Government Securities Fund and
the GNMA Securities Fund may enter into "TBA" (to be announced) purchase
commitments to purchase securities for a fixed price at a future date beyond
customary settlement time. TBA purchase commitments may be considered securities
in themselves, and involve a risk of loss if the value of the security to be
purchased declines prior to settlement date, which risk is in addition to the
risk of decline in the value of the funds'
- --------------------------------------------------------------------------------
24 MAY 31, 1996
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONTINUED INVENTOR FUNDS
MAY 31, 1996
other assets. Unsettled TBA purchase commitments are valued at the current
market value of the underlying securities, generally according to the procedures
described under "Security Valuation" above.
TBA SALE COMMITMENTS -- The Intermediate Government Securities Fund and the
GNMA Securities Fund may enter into sale commitments to hedge its portfolio
positions or to sell mortgage-backed securities it owns under delayed delivery
agreements. Proceeds of TBA sale commitments are not received until the contract
settlement date. Unsettled TBA sale commitments are valued at the current market
value of the underlying securities, generally according to the procedures
described under "Security Valuation" above. The contract is "marked to market"
daily and the change in value is recorded by the Fund as unrealized gain or
loss. If the TBA sale commitment is closed through the acquisition of an
offsetting purchase commitment the Fund realizes a gain or loss without regard
to any unrealized gain or loss on the underlying security. If securities are
delivered under the commitment, the Fund realizes a gain or loss from the sale
of the securities based upon the unit price at the date the commitment was
entered into.
EXPENSES -- Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses of the Funds are
prorated to the Funds on the basis of relative net assets.
DISTRIBUTIONS TO SHAREHOLDERS -- The Intermediate Government Securities Fund,
GNMA Securities Fund, Pennsylvania Municipal Bond Fund, and Pennsylvania
Tax-Exempt Money Market Fund distributions from net investment income are
declared on a daily basis and are payable monthly. Any net realized capital
gains on sales of securities are distributed to shareholders at least annually.
FEDERAL INCOME TAXES -- It is each Fund's intention to continue to qualify as
a regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required.
ORGANIZATION COSTS -- Organization costs have been capitalized by the Funds
and are being amortized over sixty months commencing with operations. In the
event any of the initial shares of the Funds are redeemed by any holder thereof
during the period that the Funds are amortizing their organizational costs, the
redemption proceeds payable to the holder thereof by the Funds will be reduced
by the unamortized organizational costs in the same ratio as the number of
initial shares being redeemed bears to the number of initial shares outstanding
at the time of redemption. These costs include legal fees of approximately
$53,415 for organizational work performed by a law firm of which an officer and
trustee of the Funds is a partner.
OTHER -- Certain officers of the Funds are also officers of the Administrator
and/or Distributor. Such officers are paid no fees by the Funds for serving as
officers of the Corporation.
3. FEES AND EXPENSES
The Funds and the Adviser have entered into an investment advisory agreement,
dated May 2, 1996, under which the Adviser will receive an annual fee equal to
0.70% of the average daily net assets of the Intermediate Government Securities,
GNMA Securities, and Pennsylvania Municipal Bond Funds; and 0.45% of the average
daily net assets of the Pennsylvania Tax-Exempt Money Market Fund.
Sub-Advisory services are provided to the Adviser for the Intermediate
Government Securities and GNMA Securities Funds by Wellington Management
Company; and for the Pennsylvania Municipal Bond, and Pennsylvania Tax-Exempt
Money Market Funds by Weiss, Peck & Greer L.L.C. (the "Sub-Advisers") pursuant
to sub-advisory agreements dated May 2, 1996. Under the terms of such
agreements, the Sub-Advisers are entitled to receive a fee from the Adviser.
Such a fee is computed daily and paid monthly. The Adviser is responsible for
the supervision of, and payment of fees to, the Sub-Advisers in connection with
their services.
SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary
of SEI Corporation ("SEI"), became the Fund's Distributor pursuant to an
agreement dated August 1, 1994. The Class A shares of the Funds have a Rule
12b-1 Distribution Plan (the "Class A Plan"), under which such shares bear
distribution expenses and related service fees at the annual rate of up to 0.25%
of their average daily net assets.
Pursuant to an administration agreement dated August 1, 1994, SEI Financial
Management Company (the "Administrator"), a wholly-owned subsidiary of SEI, acts
as the Fund's Administrator. Under the terms of the administration agreement,
the Administrator will receive an annual fee which is calculated daily and paid
monthly at a maximum annual rate of 0.18% of the
- --------------------------------------------------------------------------------
MAY 31, 1996 25
<PAGE>
NOTES TO FINANCIAL STATEMENTS CONCLUDED INVENTOR FUNDS
MAY 31, 1996
average daily net assets of the Intermediate Government Securities, GNMA
Securities, and Pennsylvania Municipal Bond Funds, and 0.15% of the average
daily net assets of the Pennsylvania Tax-Exempt Money Market Fund.
During the period ended May 31, 1996, the Adviser and other parties waived a
portion of their contractual fees in order to assist the Funds in maintaining
competitive expense ratios. Expenses were waived as follows (in thousands):
<TABLE>
<CAPTION>
PENNSYLVANIA
TAX-EXEMPT
INTERMEDIATE GNMA PENNSYLVANIA MONEY
GOVERNMENT SECURITIES MUNICIPAL MARKET
SECURITIES FUND FUND BOND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Waiver of investment
advisory fees .................................... $12 $10 $ 7 $10
Waiver of 12b-1 fees ................................ 19 13 8 15
- ----------------------------------------------------------------------------------------------------------------------
Total Waivers ....................................... $31 $23 $15 $25
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
4. INVESTMENT TRANSACTIONS
During the period ended May 31, 1996, purchases of securities and proceeds
from sales of securities, other than temporary investments in short-term
securities, were as follows (000):
<TABLE>
<CAPTION>
INTERMEDIATE GNMA PENNSYLVANIA
GOVERNMENT SECURITIES MUNICIPAL
SECURITIES FUND FUND BOND FUND
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PURCHASES
U.S. Government ................................................ $ 1,845 $2,890 $ --
Other........................................................... -- -- 17
SALES
U.S. Government ................................................ $ 1,279 $ 800 $ --
Other........................................................... -- -- $1,169
</TABLE>
At May 31, 1996, the total cost of securities for federal income tax purposes
was not materially different from amounts reported for financial reporting
purposes. The aggregate gross unrealized appreciation and depreciation for
securities held at May 31, 1996 is as follows (000):
<TABLE>
<CAPTION>
INTERMEDIATE GNMA PENNSYLVANIA
GOVERNMENT SECURITIES MUNICIPAL
SECURITIES FUND FUND BOND FUND
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggregate gross unrealized appreciation ........................ $ 291 $ 244 $ 421
Aggregate gross unrealized depreciation ........................ (1,775) (1,377) (197)
Net unrealized appreciation (depreciation)...................... $(1,484) $(1,133) $ 224
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
26 MAY 31, 1996
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS INVENTOR FUNDS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
OF THE INVENTOR FUNDS, INC.
We have audited the accompanying statements of net assets of the Inventor
Funds, Inc. comprising, respectively, Intermediate Government Securities, GNMA
Securities, Pennsylvania Municipal Bond and Pennsylvania Tax-Exempt Money Market
Funds as of May 31, 1996, and the related statements of operations for the
period May 1, 1996 to May 31, 1996, and the statements of changes in net assets
and the financial highlights for each of the respective years (or periods)
presented. 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. Our procedures included confirmation of securities owned as of May
31, 1996, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of each of the respective portfolios comprising the Inventor Funds,
Inc. as of May 31, 1996, the results of their operations for the period May 1,
1996 to May 31, 1996, the changes in their net assets and their financial
highlights for each of the respective years (or periods) presented, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
- --------------------------------------------------------------------------------
MAY 31, 1996 27
<PAGE>
NOTICE TO SHAREHOLDERS (UNAUDITED) INVENTOR FUNDS
FOR TAX-PAYERS FILING ON A CALENDAR YEAR BASIS, THIS NOTICE IS FOR INFORMATION
PURPOSES ONLY.
Dear Inventor Fund Shareholders:
For the fiscal year ended May 31, 1996, each portfolio is designating long
term capital gains and exempt income with regard to distributions paid during
the year as follows:
<TABLE>
<CAPTION>
(A) (B)
LONG TERM ORDINARY (C) (E)
CAPITAL GAINS INCOME TOTAL (D) TAX
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS QUALIFYING EXEMPT
FUND (TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS(1) INTEREST
---- ------------- ------------- -------------- ------------ --------
<S> <C> <C> <C> <C> <C>
Intermediate Government Securities 0% 100% 100% 0% 0%
GNMA Securities 0% 100% 100% 0% 0%
Pennsylvania Municipal Bond 0% 100% 100% 0% 100%
Pennsylvania Tax-Exempt Money Market 0% 100% 100% 0% 100%
<FN>
*Items (A) and (B) are based on a percentage of the portfolio's total distributions
**Items (D) and (E) are based on a percentage of ordinary income distribution of the portfolio.
(1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction.
</FN>
</TABLE>
Please consult your tax adviser for proper treatment of this information.
- --------------------------------------------------------------------------------
28 MAY 31, 1996
<PAGE>
INVENTOR FUNDS (Logo)
[GRAPHIC OMITTED]
1996
ANNUAL
REPORT TO
SHAREHOLDERS
May 31, 1996
[GRAPHIC OMITTED]
NOT FDIC INSURED (Logo)
[GRAPHIC OMITTED]
MUTUAL FUNDS & OTHER
INVESTMENT PRODUCTS ARE:
(BULLET) NOT INSURED BY THE FDIC
(BULLET) NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
NATIONAL CITY BANK OR ANY OF ITS AFFILIATES
(BULLET) SUBJECT TO INVESTMENT RISK, INCLUDING POSSIBLE
LOSS OF THE PRINCIPAL INVESTED
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the corporation and must be preceded
or accompanied by a current prospectus for the fund described.
SEI Financial Services Company, the distributor, is not affiliated with National
City Bank.
INVENTOR FUNDS
- ------------------------------------
INVESTMENT ADVISER
National City Bank
SUB ADVISERS
Wellington Management Company
Weiss, Peck & Greer L.L.C.
STI Capital Management, N.A.
ADMINISTRATOR
SEI Financial Management Corporation
TRANSFER AGENT
DST Systems, Inc.
DISTRIBUTOR
SEI Financial Services Company
COUNSEL
Morgan, Lewis & Bockius
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, L.L.P.
[GRAPHIC OMITTED]
19294 INT-F-296-03
