<PAGE> 1
[LOGO]
August 19, 1996
Dear Shareholder:
On behalf of everyone at FUNDS IV Trust, we are pleased to send you our
second annual report for the fiscal year ended June 30, 1996. Included are
investment summaries and detailed financial information for each of the
portfolios of FUNDS IV Trust (collectively, the "Funds") and each respective
portfolio of investments at June 30, 1996. An overview of economic factors that
may influence your investments has been included.
ECONOMIC REVIEW AND MARKET OUTLOOK
The Funds' fiscal year ended June 30, 1996 was marked by accelerating
economic growth through the first six months of calendar year 1996 resulting in
heightened concerns by the Federal Reserve Board (the "Fed") and investors that
wholesale and consumer inflation would be rekindled. Interest rates rose
steadily during the first half of calendar year 1996 as these worries plagued
the markets. As a result, long-term Treasury yields have risen from the 6% level
in late 1995 to 7%, producing negative returns for bonds for the first half of
1996. While the Fed has, in 1996, elected not to raise interest rates, Chairman
Alan Greenspan's recent testimony before Congress that rate hikes are possible
if economic growth continues at current levels continues to put pressure on bond
prices.
Stock investors, undaunted by the bond market's nervousness, remained
focused on the favorable outlook for corporate profits and have continued to
exhibit a strong appetite for stocks. This is evidenced by the record inflows of
cash into equity mutual funds through the first half of 1996. The result is that
the stock market has continued to move higher although with increasing daily
volatility.
The market outlook for the second half of 1996 is clouded by a number of
factors, not the least of which is election year uncertainty. Inflation has
remained well-behaved, running slightly below a 3% annual rate. However, if the
economy continues to grow at its current heated pace, it is likely that prices
and wages will begin to rise, forcing the Fed to act. Such an event could
overcome the normal reluctance of the Fed to raise rates during an election
year. Although such action would be a long-term positive for the fixed income
market, its near-term effect would almost certainly have a negative impact on
bond prices.
Barring significant negative corporate earnings surprises in the upcoming
reporting period, we think stocks can continue to move higher through year-end
1996. However, increased market volatility and minor selloffs are likely.
CASH RESERVE MONEY MARKET FUND
For the six months ended June 30, 1996, the Service Class of The FUNDS IV
Cash Reserve Money Market Fund's total return performance ranked among the top
1/3rd of the 157 Institutional Money Funds reported by Lipper Analytical
Services with an annualized total return of 5.14%. For the year ended June 30,
1996, the Fund had a total return of 5.47%.
After the Fed lowered interest rates on January 31, 1996 by 25 basis
points, the economy experienced GDP growth in the first and second quarter of
2.0% and 4.2%, respectively, both of which were at or above the Fed targeted
noninflationary potential. During this period of economic expansion, our
expectations were that the Fed would adhere to a neutral to restrictive monetary
policy. Consequently, the weighted average maturity of the portfolio was
maintained at or near a neutral posture.
<PAGE> 2
The Fund achieved its superior performance during this period of relatively
stable monetary policy by investing in variable rate securities that were
indexed to the London Interbank Offering Rate, reset on a quarterly basis and
had final maturities of 397 days or less. At the time of purchase, the issuers
of these securities were determined to be stable or improving credits. During
this period of improving economic momentum, our investment process established a
strategy of overweighting stable to improving credits to increase yield. The
Fund's seven day yield as of June 30, 1996 was 5.05%.
This strategy proved to be opportunistic given the strength of the credit
outlook for several of the issuers whose cost of funds has since decreased.
Michael W. Fields C.I.O. -- Fixed Income AMR Investment Services, Inc.
SHORT-TERM TREASURY INCOME FUND
The FUNDS IV Short-Term Treasury Income Fund's objective is to provide
investors with as high a level of current income as is consistent with liquidity
and safety of principal.
The Fund is invested exclusively in short-term U.S. Treasury securities,
and U.S. Treasury backed money market reserves. The weighted average maturity of
the Fund will generally range between two and three years, depending upon the
returns generated by the short-term U.S. Treasury market. For the six month
period ending June 30, 1996, the Fund generated a total return to investors of
0.2%, and ended the period with a weighted average maturity of 2.4 years. For
the one year period ending June 30, 1996, the Fund generated a total return of
4.45%, trailing the Lehman 1-5 year U.S. Treasury Index return by approximately
80 basis points, after all fees and expenses.
The portfolio manager for The Short-Term Treasury Income Fund is Ms. Janet
L. Mullen.
The following graph illustrates the total return based on a $10,000
investment in Service Class of the Fund made at the date of inception of the
Fund (August 26, 1994) compared to the performance of the Lehman 1-5 U.S.
Treasury Index over the same period. Performance of Premium Class of the Fund
would be less than the line shown in the graph based on the differences in fees
paid by shareholders investing in Premium Class of the Fund had such shareholder
servicing fee not been waived. Past performance is not predictive of future
performance.
<TABLE>
<CAPTION>
The Short-Term Treasury Income Fund Service Class* Lehman 1-5 U.S. Treasury Index
<S> <C> <C>
Aug. 26 10000 10000
Sep. 30 9980 9969
Dec. 31 9975 9955
Mar. 31 10305 10334
Jun. 30 10695 10745
Sep. 30 10827 10910
Dec. 31 11148 11231
Mar. 31 11099 11219
Jun. 30 11172 11306
</TABLE>
*Assumes reinvestment of all dividends and distributions. Total returns are
aggregate since inception (not annualized) and reflect the effect of certain
fee waivers.
<PAGE> 3
The Lehman 1-5 U.S. Treasury Index is a widely accepted unmanaged index of
bond market performance consisting of all Treasury securities with maturities of
one to five years.
TOTAL RETURNS+
<TABLE>
<CAPTION>
% RETURN
--------
<S> <C>
The Short-Term Treasury Income Fund
Fiscal year ended June 30, 1996.................................................. 4.45%
Inception (August 26, 1994) through June 30, 1996................................ 11.72%
</TABLE>
+Aggregate total return (not annualized); assuming reinvestment of dividends and
distributions; reflects the effect of certain fee waivers.
INTERMEDIATE BOND INCOME FUND
The FUNDS IV Intermediate Bond Income Fund's objective is to provide
investors with a high level of current income as is consistent with managing for
total return by investing in a portfolio of intermediate maturity government and
investment grade corporate securities.
Stronger than expected economic growth and heightened inflationary fears
during the first six months of 1996 resulted in higher interest rates and lower
bond prices. The total return for The FUNDS IV Intermediate Bond Income Fund was
4.29% for the twelve month period ending June 30, 1996 despite the recent weak
bond environment. The average maturity of The Intermediate Bond Income Fund was
3.9 years. Recent strategy has involved increasing portfolio quality as we
shifted from the high quality corporate bonds sector to U.S. Treasuries. This
portfolio adjustment was made due to the compact yield spreads between
corporates and Treasuries. Corporate bonds currently offer little added value
compared to Treasuries in relation to their credit risk.
The portfolio manager for The Intermediate Bond Income Fund is Mr. Brad D.
Eppard.
The following graph illustrates the total return based on a $10,000
investment in Service Class of the Fund made at the date of inception of the
Fund (August 26, 1994) compared to the performance of the Lehman Intermediate
Government/Corporate Bond Index over the same period. Performance of Premium
Class of the Fund would be less than the line shown in the graph based on the
differences in fees paid by shareholders investing in Premium Class of the Fund
had such shareholder servicing fee not been waived. Past performance is not
predictive of future performance.
<PAGE> 4
<TABLE>
<CAPTION>
The Intermediate Bond Income Fund Service Class* Lehman Intermediate Gov't/Corp. Bond Index
<S> <C> <C>
Aug. 26 10000 10000
Sep. 30 9954 9887
Dec. 31 9962 9924
Mar. 31 10240 10418
Jun. 30 10726 10698
Sep. 30 10889 11061
Dec. 31 11265 11450
Mar. 31 11138 11355
Jun. 30 11187 11425
</TABLE>
*Assumes reinvestment of all dividends and distributions. Total returns are
aggregate since inception (not annualized) and reflect the effect of certain
fee waivers.
The Lehman Intermediate Government/Corporate Bond Index is a widely
accepted unmanaged index of bond market performance which includes fixed rate
debt issues rated investment grade or higher with maturities ten years or less;
all returns are market value weighted exclusive of accrued interest.
TOTAL RETURNS+
<TABLE>
<CAPTION>
% RETURN
--------
<S> <C>
The Intermediate Bond Income Fund
Fiscal year ended June 30, 1996.................................................. 4.29%
Inception (August 26, 1994) through June 30, 1996................................ 11.87%
</TABLE>
+Aggregate total return (not annualized); assuming reinvestment of dividends and
distributions; reflects the effect of certain fee waivers.
BOND INCOME FUND
The FUNDS IV Bond Income Fund's objective is to provide investors with as
high a level of current income as is consistent with managing for total return
by investing in fixed income securities.
Stronger than expected economic growth and heightened inflationary fears
during the first six months of 1996 resulted in higher interest rates and lower
bond prices. The total return for The FUNDS IV Bond Income Fund was 4.22% for
the twelve month period ending June 30, 1996 despite the recent weak bond
environment. The average maturity of The Bond Income Fund was 8.5 years on June
30th. A recent strategy has been to increase the Fund's portfolio quality as we
shifted from the high quality corporate bonds sector to U.S. Treasuries. This
portfolio adjustment was made due to the compact yield spreads between
corporates and Treasuries. Corporate bonds currently offer little added value
compared to Treasuries in relation to their credit risk.
The portfolio manager for The Bond Income Fund is Mr. Brad D. Eppard.
<PAGE> 5
The following graph illustrates the total return based on a $10,000
investment in Service Class of the Fund made at the date of inception of the
Fund (August 26, 1994) compared to the performance of the Lehman
Government/Corporate Bond Index over the same period. Performance of Premium
Class of the Fund would be less than the line shown in the graph based on the
differences in fees paid by shareholders investing in Premium Class of the Fund
had such shareholder servicing fee not been waived. Past performance is not
predictive of future performance.
<TABLE>
<CAPTION>
The Bond Income Fund Service Class* Lehman Gov't/Corp. Bond Index
<S> <C> <C>
Aug. 26 10000 10000
Sep. 30 9897 9887
Dec. 31 9921 9924
Mar. 31 10264 10418
Jun. 30 10905 11094
Sep. 30 11074 11306
Dec. 31 11647 11833
Mar. 31 11337 11556
Jun. 30 11365 11610
</TABLE>
*Assumes reinvestment of all dividends and distributions. Total returns are
aggregate since inception (not annualized) and reflect the effect of certain
fee waivers.
The Lehman Government/Corporate Bond Index is a widely accepted unmanaged
index consisting of all publicly issued obligations of the U.S. Treasury, U.S.
Government agencies, instrumentalities, corporate debt guaranteed by the U.S.
Government and fixed rate debt issues with at least one year to maturity; all
returns are market value weighted exclusive of accrued interest.
TOTAL RETURNS+
<TABLE>
<CAPTION>
% RETURN
--------
<S> <C>
The Bond Income Fund
Fiscal year ended June 30, 1996.................................................. 4.22%
Inception (August 26, 1994) through June 30, 1996................................ 13.65%
</TABLE>
+Aggregate total return (not annualized); assuming reinvestment of dividends and
distributions; reflects the effect of certain fee waivers.
STOCK APPRECIATION FUND
The objective of The FUNDS IV Stock Appreciation Fund is to seek long-term
capital appreciation through investment in a diversified portfolio of common
stocks. Permissible investments include U.S. common stocks and foreign stocks
represented by American Depository Receipts (ADR's). Stocks are selected based
on a number of factors that include fundamental business outlook, valuation
relative to other companies in the same industry, and the company's own
historical norms and earnings
<PAGE> 6
momentum. Substantial short-term cash reserves (up to 35%) may be held as a
defensive measure when stock market risk appears high.
At June 30, 1996, the Fund held modest levels of cash and cash equivalents.
The primary focus of the Fund's holdings are larger capitalization companies.
The Fund held approximate market weightings in the capital goods and health care
sectors. The Fund held higher than market weightings in the consumer staples,
energy, technology and utilities sectors, while maintaining less than market
weightings in the consumer cyclical, finance, raw materials, retail and
transportation sectors. The average projected growth rate for the stocks in the
Fund is 11.2% (versus the S&P 500 of 10%). The average price/earnings multiple
is about equivalent to the market's. The current dividend yield of 2.2% equals
the S&P 500. The dollar weighted median market capitalization for the Fund is
$27.6 billion.
The portfolio manager of The Stock Appreciation Fund is Mr. Stuart Hopkins,
who has been employed by the Investment Adviser since the Fund's inception.
The following graph illustrates the total return based on a $10,000
investment in Service Class of the Fund made at the date of inception of the
Fund (August 26, 1994) compared to the performance of the S&P 500 Total Return
Index over the same period. Performance of Premium Class of the Fund would be
less than the line shown in the graph based on the differences in fees paid by
shareholders investing in Premium Class of the Fund had such shareholder
servicing fee not been waived. Past performance is not predictive of future
performance.
<TABLE>
<CAPTION>
The Stock Appreciation Fund Service Class* S&P 500 Total Return Index
<S> <C> <C>
Aug. 26 10000 10000
Sep. 30 9930 9791
Dec. 31 9814 9790
Mar. 31 10368 10743
Jun. 30 11219 11768
Sep. 30 12014 12703
Dec. 31 12578 13464
Mar. 31 13096 14188
Jun. 30 13631 14819
</TABLE>
*Assumes reinvestment of all dividends and distributions. Total returns are
aggregate since inception (not annualized) and reflect the effect of certain
fee waivers.
The S&P 500 Total Return Index is a widely accepted unmanaged index of
stock market performance which reflects the reinvestment of income dividends
and, where applicable, capital gain distributions.
<PAGE> 7
TOTAL RETURNS+
<TABLE>
<CAPTION>
% RETURN
--------
<S> <C>
The Stock Appreciation Fund
Fiscal year ended June 30, 1996.................................................. 21.50%
Inception (August 26, 1994) through June 30, 1996................................ 36.31%
</TABLE>
+Aggregate total return (not annualized); assuming reinvestment of dividends and
distributions; reflects the effect of certain fee waivers.
AGGRESSIVE STOCK APPRECIATION FUND
The objective of The FUNDS IV Aggressive Stock Appreciation Fund is to
aggressively seek long-term capital appreciation through investment in a
diversified portfolio of common stocks. Permissible investments include U.S.
common stocks and foreign stocks represented by American Depository Receipts
(ADR's). While the Fund will always hold a broad array of larger capitalization
stocks (stocks with market capitalization of approximately $4 billion and
greater), there will often be an emphasis on investing in mid-capitalization
issues, and to a much lesser extent, smaller-capitalization stocks
(approximately $1 billion and under). Stocks are selected based on a number of
factors including fundamental business outlook, valuation relative to other
companies in the same industry, and the company's own historical norms and
earnings momentum. In addition, the Fund may hold considerable positions
(relative to the market) in broadly-defined economic sectors whose growth
potential is not reflected in current stock prices. Substantial short-term cash
reserves may be held during defensive periods when stock market risk appears
high.
At June 30, 1996, the Fund had modest levels of cash and cash equivalents
as it had through much of the first half of the calendar year. The Fund held
approximate market weightings in the capital goods, consumer durables, consumer
services, energy, retail and transportation sectors. The Fund held higher than
market weightings in the finance, health and raw materials sectors, while
maintaining less than market weightings in consumer non-durable, miscellaneous,
and utilities sectors. The average projected growth rate for the stocks in the
Fund is 15% (versus the S&P 500 of 10%). The average price/earnings multiple is
21.7 (versus the S&P 500 of 18.7). The current dividend yield of 1.1% is less
than the S&P 500. The dollar weighted median market capitalization for the Fund
is $15.3 billion. The Fund remains well-exposed to selected stocks in the
mid-capitalization area of the market, an area which provides a particularly
compelling reward/risk tradeoff -- compared to the large-cap segment -- given
the valuation of secondary stocks relative to their growth prospects.
The portfolio manager for The Aggressive Stock Appreciation Fund is Mr.
Stuart Hopkins, who has been employed by the Investment Adviser since the Fund's
inception.
The following graph illustrates the total return based on a $10,000
investment in Service Class of the Fund made at the date of inception of the
Fund (August 26, 1994) compared to the performance of the S&P 500 Total Return
Index over the same period. Performance of Premium Class of the Fund would be
less than the line shown in the graph based on the differences in fees paid by
shareholders investing in Premium Class of the Fund had such shareholder
servicing fee not been waived. Past performance is not predictive of future
performance.
<PAGE> 8
<TABLE>
<CAPTION>
The Aggressive Stock Appreciation Fund Service Class* S&P 500 Total Return Index
<S> <C> <C>
Aug. 26 10000 10000
Sep. 30 9900 9791
Dec. 31 9775 9790
Mar. 31 10174 10743
Jun. 30 10981 11768
Sep. 30 11735 12703
Dec. 31 11957 13464
Mar. 31 12748 14188
Jun. 30 13126 14819
</TABLE>
*Assumes reinvestment of all dividends and distributions. Total returns are
aggregate since inception (not annualized) and reflect the effect of certain
fee waivers.
The S&P 500 Total Return Index is a widely accepted unmanaged index of
stock market performance which reflects the reinvestment of income dividends
and, where applicable, capital gain distributions.
TOTAL RETURNS+
<TABLE>
<CAPTION>
% RETURN
--------
<S> <C>
The Aggressive Stock Appreciation Fund
Fiscal year ended June 30, 1996.................................................. 19.54%
Inception (August 26, 1994) through June 30, 1996................................ 31.26%
</TABLE>
+Aggregate total return (not annualized); assuming reinvestment of dividends and
distributions; reflects the effect of certain fee waivers.
VALUE STOCK APPRECIATION FUND
The objective of The FUNDS IV Value Stock Appreciation Fund is to seek
long-term capital appreciation and dividend income through investment in a
diversified portfolio of common stocks (and securities convertible into common
stocks) of domestic companies. The Fund may also invest, to a far lesser extent,
in securities of foreign companies, primarily through securities represented by
American Depository Receipts (ADR's).
The Fund employs a "value style" of equity management. Stocks are selected
for purchase when they sell at a discount to their underlying "intrinsic" value.
We determine a stock's intrinsic value by discounting its expected future
dividends to the present value of such dividends. This process of calculating a
stock's intrinsic value is frequently referred to as a "dividend discount
model". Holdings are often characterized by stocks with relatively low
price/earnings ratios, and/or low price/cash flow ratios. Another characteristic
may be higher-than-average dividend yield. Quite often, the stocks will fall
into categories of being under-owned or "out of favor". Equity investments are
selected from a
<PAGE> 9
pool of high-quality large, medium, and small capitalization stocks. The
determination of high-quality is based on the Investment Adviser's assessment of
a company's financial strength, size and earnings variability. Stocks are
purchased with the long-term time horizon in mind and are generally sold when
their market price rises above intrinsic value and/or their underlying
fundamentals begin to deteriorate.
At June 30, 1996, the Fund was significantly overweighted relative to the
market in the consumer durables and consumer non-durables sectors and was
significantly underweighted in the capital goods and miscellaneous sectors. The
Fund had no representation in the transportation sector at June 30, 1996.
At June 30, 1996, the Fund held modest levels of cash and cash equivalents
as was the case throughout the first half of the calendar year. On average, the
Fund's holdings sell at a 5% discount to their intrinsic value as determined by
the Investment Adviser (the S&P 500 Index, meanwhile is selling at a 9% premium)
and are displaying positive earnings momentum. The average growth rate for the
stocks in the Fund is 9.8% (versus the S&P 500 of 10%). The average
price/earnings multiple is about equivalent to the market's. The current
dividend yield of 2.9% slightly exceeds the S&P 500 of 2.2%. Two of the Fund's
other key characteristics remain superior to the market. The average return on
assets is 9.3% (versus 3.2% for the S&P 500) and average return on equity is
21.7% (versus 17.7% for the S&P 500).
The portfolio manager for The Value Stock Appreciation Fund is Mr. Stuart
Hopkins, who has been the portfolio manager of the Fund since its inception.
The following graph illustrates the total return based on a $10,000
investment in Service Class of the Fund made at the date of inception of the
Fund (February 10, 1995) compared to the performance of the S&P 500 Total Return
Index over the same period. Performance of Premium Class of the Fund would be
less than the line shown in the graph based on the differences in fees paid by
shareholders investing in Premium Class of the Fund had such shareholder
servicing fee not been waived. Past performance is not predictive of future
performance.
<TABLE>
<CAPTION>
The Value Stock Appreciation Fund Service Class* S&P 500 Total Return Index
<S> <C> <C>
Feb. 10 10000 10000
Mar. 31 10373 10437
Jun. 30 11032 11433
Sep. 30 11744 12339
Dec. 31 12427 13077
Mar. 31 12816 13780
Jun. 30 13338 14402
</TABLE>
*Assumes reinvestment of all dividends and distributions. Total returns are
aggregate since inception (not annualized) and reflect the effect of certain
fee waivers.
<PAGE> 10
The S&P 500 Total Return Index is a widely accepted unmanaged index of
stock market performance which reflects the reinvestment of income dividends
and, where applicable, capital gain distributions.
TOTAL RETURNS+
<TABLE>
<CAPTION>
% RETURN
--------
<S> <C>
The Value Stock Appreciation Fund
Fiscal year ended June 30, 1996................................................. 20.91%
Inception (February 10, 1995) through June 30, 1996............................. 33.38%
</TABLE>
+Aggregate total return (not annualized); assuming reinvestment of dividends and
distributions; reflects the effect of certain fee waivers.
Thank you for your continued support of the FUNDS IV Trust. We value your
business and look forward to serving your investment needs in the years ahead.
Sincerely,
/s/ John J. Pileggi
JOHN J. PILEGGI
Chairman of the Board
<PAGE> 11
REPORT OF THE FUNDS' SPECIAL SHAREHOLDERS MEETING
The Funds held their special shareholders meeting on March 11, 1996. At the
meeting, the shareholders voted to approve BANK IV, N. A. to serve as Investment
Adviser to the Funds. The results on the voting were as follows:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
---------- ------- -------
<S> <C> <C> <C>
The Short-Term Treasury Income Fund 911,203 0 0
The Intermediate Bond Income Fund 8,380,182 0 15,481
The Bond Income Fund 2,426,315 0 0
The Stock Appreciation Fund 8,957,477 0 15,371
The Aggressive Stock Appreciation Fund 3,079,971 468 5,234
The Value Stock Appreciation Fund 1,422,354 0 0
</TABLE>
At the meeting, the shareholders also voted to approve Price Waterhouse LLP
to serve as independent accountants to the Funds. The results on the voting were
as follows:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
---------- ------- -------
<S> <C> <C> <C>
The Short-Term Treasury Income Fund 911,203 0 0
The Intermediate Bond Income Fund 8,380,321 0 15,342
The Bond Income Fund 2,426,315 0 0
The Stock Appreciation Fund 8,957,936 0 14,912
The Aggressive Stock Appreciation Fund 3,080,439 0 5,234
The Value Stock Appreciation Fund 1,422,354 0 0
</TABLE>
<PAGE> 12
FUNDS IV TRUST
THE CASH RESERVE MONEY MARKET FUND
Portfolio of Investments
June 30, 1996
<TABLE>
<CAPTION>
CREDIT
RATINGS* PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 2A)
- ----------- ----------- ------------
<S> <C> <C> <C>
CORPORATE NOTES -- 45.2%
BANKING SERVICES -- 5.9%
TBW-1/D-1 Bank of Boston VR MTN 5.504%, 01/24/97(a)........... $14,000,000 $ 14,000,000
TBW-1/D-1 BanPonce Corp. VR MTN 5.682%, 12/18/96(a)........... 3,000,000 3,000,000
------------
17,000,000
------------
BUSINESS CREDIT -- 9.4%
A-1/P-1 Heller Financial, Inc. VR Master Note 5.484%,
10/25/96(a)....................................... 15,000,000 15,000,000
P-1/D-1 Sanwa Business Credit Corp. VR MTN 5.57%,
03/04/97(a)(b).................................... 12,000,000 11,995,034
------------
26,995,034
------------
PERSONAL CREDIT -- 7.3%
P-1/F-1 American Honda Finance Corp. VR MTN 5.557%,
02/07/97(a)(b).................................... 15,000,000 15,000,000
P-1/F-1 General Motors Acceptance Corp. VR MTN 5.70%,
07/19/96(a)....................................... 6,000,000 6,000,816
------------
21,000,816
------------
SECURITIES FIRMS -- 22.6%
A-1/P-1 Bear Stearns Cos., Inc. VR MTN 5.523%,
01/17/97(a)....................................... 13,000,000 13,000,000
A-1/P-1 CS First Boston Corp. VR MTN 5.515%,
03/06/97(a)(b).................................... 16,000,000 16,000,000
TBW-1/A-1 Lehman Brothers Holdings, Inc. VR Demand Master Note
5.616%, 08/22/96(a)............................... 14,000,000 14,000,000
A-1+/P-1 Merrill Lynch & Co. VR MTN 5.515%, 01/14/97(a)...... 16,000,000 15,998,231
A-1+/P-1 Morgan Stanley Group, Inc. VR MTN 5.723%,
07/02/96(a)....................................... 6,000,000 6,000,040
------------
64,998,271
------------
TOTAL CORPORATE NOTES............................... 129,994,121
------------
CERTIFICATES OF DEPOSIT -- 24.0%
DOMESTIC -- 3.5%
TBW-1/P-1 Banco Popular de Puerto Rico VR 5.569%,
04/04/97(a)....................................... 10,000,000 10,000,000
------------
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
1
<PAGE> 13
FUNDS IV TRUST
THE CASH RESERVE MONEY MARKET FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
CREDIT
RATINGS* PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 2A)
----------- ------------
<S> <C> <C> <C>
CERTIFICATES OF DEPOSIT -- (CONTINUED)
YANKEE -- 20.5%
A-1/P-1 Banca CRT Financial Corp. VR 5.578%, 09/24/96(a).... $14,000,000 $ 14,000,000
A-1/P-1 Industrial Bank of Japan, Ltd. 5.51%, 08/21/96...... 10,000,000 10,000,000
TBW-1/P-1 Merita Bank New York VR Demand 5.438%, 10/18/96(a).. 15,000,000 15,000,000
TBW-1/P-1 Postipankki Bank, Ltd. VR Demand 5.473%,
09/20/96(a)....................................... 15,000,000 15,000,000
A-1/P-1 Sanwa Bank, Ltd. 5.51%, 08/21/96.................... 5,000,000 5,000,000
------------
59,000,000
------------
TOTAL CERTIFICATES OF DEPOSIT....................... 69,000,000
------------
COMMERCIAL PAPER(C) -- 20.2%
BANKING SERVICES -- 5.9%
A-1/P-1 BBL North America, Inc. 5.68%, 07/01/96............. 10,000,000 10,000,000
A-1/P-1 BTM Capital Corp. 5.52%, 07/03/96................... 7,000,000 6,997,892
------------
16,997,892
------------
BUSINESS CREDIT -- 4.5%
FINOVA Capital Corp.:
F-1/D-1 5.68%, 07/01/96..................................... 8,000,000 8,000,000
F-1/D-1 5.58%, 07/02/96..................................... 5,000,000 4,999,236
------------
12,999,236
------------
PERSONAL CREDIT -- 4.3%
Aristar, Inc.:
F-1/D-1 5.47%, 07/03/96..................................... 5,000,000 4,998,508
F-1/D-1 5.49%, 07/19/96..................................... 7,285,000 7,265,403
------------
12,263,911
------------
SECURITIES FIRMS -- 5.5%
TBW-1/A1 PaineWebber Group, Inc. 5.76%, 08/23/96............. 16,000,000 15,871,622
------------
TOTAL COMMERCIAL PAPER.............................. 58,132,661
------------
BANKERS' ACCEPTANCES(C) -- 5.9%
A-1/P-1 Bank of Tokyo, Ltd./Mitsubishi Trust Los Angeles
5.51%, 07/31/96................................... 5,000,000 4,977,542
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
2
<PAGE> 14
FUNDS IV TRUST
THE CASH RESERVE MONEY MARKET FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
CREDIT
RATINGS* PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 2A)
----------- ------------
<S> <C> <C> <C>
BANKERS' ACCEPTANCES(C) -- (CONTINUED)
A-1/P-1 Dai-Ichi Kangyo, Ltd. New York 5.53%, 08/05/96...... $ 5,000,000 $ 4,973,799
Sanwa Bank, Ltd. New York:
A-1/P-1 5.33%, 07/16/96..................................... 2,000,000 1,995,708
A-1/P-1 5.25%, 08/22/96..................................... 5,000,000 4,963,528
------------
TOTAL BANKERS' ACCEPTANCES.......................... 16,910,577
------------
TIME DEPOSIT -- 9.8%
A-1+/P-1 Canadian Imperial Bank of Commerce Toronto Euro
5.563%, 07/01/96.................................. 8,058,370 8,058,370
A-1/P-1 Sumitomo Bank, Ltd. Euro 5.563%, 07/01/96........... 10,000,000 10,000,000
A-1/P-1 Svenska Handelsbanken, Inc. Euro 5.563%, 07/01/96... 10,000,000 10,000,000
------------
TOTAL TIME DEPOSIT.................................. 28,058,370
------------
TOTAL INVESTMENTS -- 105.1% (COST $302,095,729)+.... 302,095,729
LIABILITIES IN EXCESS OF OTHER ASSETS -- (5.1%)..... (14,598,945)
------------
NET ASSETS -- 100.0%................................ $287,496,784
============
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
3
<PAGE> 15
FUNDS IV TRUST
THE SHORT-TERM TREASURY INCOME FUND
Portfolio of Investments
June 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT COST (NOTE 2A)
---------- ----------- -----------
<S> <C> <C> <C>
U.S. TREASURY NOTES -- 98.3%
8.000%, 01/15/97...................................... $1,000,000 $ 1,010,695 $ 1,012,890
5.500%, 07/31/97...................................... 2,000,000 1,994,831 1,993,460
7.375%, 11/15/97...................................... 750,000 751,216 763,807
5.125%, 04/30/98...................................... 700,000 692,533 689,108
8.250%, 07/15/98...................................... 200,000 205,775 208,080
5.875%, 08/15/98...................................... 700,000 701,169 696,437
7.125%, 10/15/98...................................... 1,000,000 1,009,681 1,020,820
5.500%, 11/15/98...................................... 1,250,000 1,254,780 1,231,137
6.750%, 05/31/99...................................... 1,500,000 1,475,189 1,518,015
7.750%, 11/30/99...................................... 1,500,000 1,545,509 1,562,955
6.375%, 01/15/00...................................... 1,750,000 1,750,000 1,751,295
7.750%, 01/31/00...................................... 1,000,000 1,004,507 1,043,180
5.625%, 11/30/00...................................... 750,000 748,837 726,787
----------- -----------
TOTAL U.S. TREASURY NOTES............................. 14,144,722 14,217,971
----------- -----------
MONEY MARKET FUND ** -- 1.0%
Federated U.S. Treasury Cash Reserve Fund............. 136,393 136,393 136,393
----------- -----------
TOTAL INVESTMENTS -- 99.3%............................ $14,281,115+ 14,354,364
===========
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.7%......... 105,544
-----------
NET ASSETS -- 100.0%.................................. $14,459,908
===========
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
4
<PAGE> 16
FUNDS IV TRUST
THE INTERMEDIATE BOND INCOME FUND
Portfolio of Investments
June 30, 1996
<TABLE>
<CAPTION>
CREDIT
RATINGS* PRINCIPAL VALUE
(UNAUDITED) AMOUNT COST (NOTE 2A)
- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
U.S. TREASURY NOTES -- 72.4%
5.125%, 03/31/98....................... $ 5,000,000 $ 4,980,457 $ 4,925,400
6.125%, 05/15/98....................... 8,000,000 8,062,645 8,006,959
8.875%, 11/15/98....................... 7,000,000 7,549,807 7,407,890
6.750%, 05/31/99....................... 10,000,000 9,977,485 10,120,099
7.500%, 10/31/99....................... 8,000,000 8,138,687 8,266,639
7.125%, 02/29/00....................... 13,700,000 13,908,237 14,022,361
6.250%, 05/31/00....................... 4,000,000 4,122,912 3,977,840
5.250%, 01/31/01....................... 2,000,000 1,998,255 1,911,280
6.375%, 08/15/02....................... 8,000,000 7,686,992 7,937,439
6.250%, 02/15/03....................... 2,200,000 2,131,158 2,163,612
7.875%, 11/15/04....................... 10,500,000 11,330,866 11,293,484
6.500%, 05/15/05....................... 5,000,000 4,850,370 4,936,650
------------ ------------
TOTAL U.S. TREASURY NOTES.............. 84,737,871 84,969,653
------------ ------------
CORPORATE BONDS AND NOTES -- 25.9%
BANKING SERVICES -- 2.6%
A/A2 NationsBank Corp. 7.50%, 02/15/97...... 3,000,000 2,999,134 3,030,510
------------ ------------
FINANCIAL SERVICES -- 17.1%
AA-/Aa3 Associates Corp. of North America
7.50%, 05/15/99...................... 3,000,000 2,993,893 3,071,250
A/A2 Dean Witter Discover & Co. 6.75%,
08/15/00............................. 2,500,000 2,593,629 2,500,000
Ford Motor Credit Co.:
A+/A1 9.00%, 09/15/01...................... 1,500,000 1,581,446 1,633,125
A+/A1 Global Bond 6.25%, 02/26/98.......... 2,000,000 1,998,356 2,000,000
A-/A3 General Motors Acceptance Corp. MTN
7.875%, 02/28/97..................... 3,000,000 3,028,866 3,039,510
A/A2 Household Finance Corp. 6.375%,
06/30/00............................. 4,000,000 3,937,229 3,940,000
AA/Aa3 National Rural Utilities Cooperative
Finance Corp. 6.50%, 09/15/02........ 4,000,000 3,991,874 3,910,000
------------ ------------
20,125,293 20,093,885
------------ ------------
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
5
<PAGE> 17
FUNDS IV TRUST
THE INTERMEDIATE BOND INCOME FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
CREDIT
RATINGS* PRINCIPAL VALUE
(UNAUDITED) AMOUNT COST (NOTE 2A)
- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
CORPORATE BONDS AND NOTES -- (CONTINUED)
RETAIL -- DEPARTMENT STORES -- 6.2%
A+/A1 J.C. Penney & Co. 6.875%, 06/15/99..... $ 3,500,000 $ 3,452,521 $ 3,526,250
Wal-Mart Stores, Inc.:
AA/Aa2 5.500%, 03/01/98..................... 550,000 537,871 542,437
AA/Aa2 8.625%, 04/01/01..................... 3,000,000 3,099,569 3,217,500
------------ ------------
7,089,961 7,286,187
------------ ------------
TOTAL CORPORATE BONDS AND NOTES........ 30,214,388 30,410,582
------------ ------------
MONEY MARKET FUND** -- 0.4%
Federated Prime Obligations Money
Market Fund.......................... 482,644 482,644 482,644
------------ ------------
TOTAL INVESTMENTS -- 98.7%............. $115,434,903+ 115,862,879
===========
OTHER ASSETS IN EXCESS OF
LIABILITIES --
1.3%................................. 1,512,727
------------
NET ASSETS -- 100.0%................... $117,375,606
===========
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
6
<PAGE> 18
FUNDS IV TRUST
THE BOND INCOME FUND
Portfolio of Investments
June 30, 1996
<TABLE>
<CAPTION>
CREDIT
RATINGS* PRINCIPAL VALUE
(UNAUDITED) AMOUNT COST (NOTE 2A)
- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -- 83.9%
U.S. TREASURY BONDS -- 26.9%
7.250%, 05/15/16..................... $2,750,000 $ 2,818,397 $ 2,819,877
7.500%, 11/15/16..................... 6,100,000 6,252,397 6,414,027
----------- -----------
9,070,794 9,233,904
----------- -----------
U.S. TREASURY NOTES -- 57.0%
5.875%, 07/31/97..................... 2,000,000 2,011,118 2,001,020
5.125%, 03/31/98..................... 1,000,000 996,092 985,080
6.125%, 05/15/98..................... 3,900,000 3,939,513 3,903,393
7.750%, 12/31/99..................... 1,750,000 1,851,598 1,825,250
7.125%, 02/29/00..................... 3,000,000 3,109,891 3,070,590
6.250%, 05/31/00..................... 500,000 515,364 497,230
6.375%, 08/15/02..................... 1,000,000 963,492 992,180
5.750%, 08/15/03..................... 1,500,000 1,486,276 1,429,155
7.875%, 11/15/04..................... 2,000,000 2,203,548 2,151,140
6.500%, 05/15/05..................... 1,750,000 1,859,602 1,727,827
6.500%, 08/15/05..................... 1,000,000 1,039,040 986,410
----------- -----------
19,975,534 19,569,275
----------- -----------
TOTAL U.S. TREASURY OBLIGATIONS........ 29,046,328 28,803,179
----------- -----------
CORPORATE BONDS AND NOTES -- 11.7%
BANKING SERVICES -- 1.5%
A/A2 NationsBank Corp. 7.50%, 02/15/97...... 500,000 499,856 505,085
----------- -----------
FINANCIAL SERVICES -- 5.2%
AA-/Aa3 Associates Corp. of North America
7.50%, 05/15/99...................... 500,000 498,982 511,875
A/A2 Dean Witter Discover & Co. 6.25%,
03/15/00............................. 300,000 295,902 295,125
A+/A1 Ford Motor Credit Co. Global Bond
6.25%, 02/26/98...................... 500,000 499,589 500,000
AA/Aa3 National Rural Utilities Cooperative
Finance Corp. 6.50%, 09/15/02........ 500,000 498,985 488,750
----------- -----------
1,793,458 1,795,750
----------- -----------
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
7
<PAGE> 19
FUNDS IV TRUST
THE BOND INCOME FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
CREDIT
RATINGS* PRINCIPAL VALUE
(UNAUDITED) AMOUNT COST (NOTE 2A)
----------- ----------- -----------
<S> <C> <C> <C> <C>
CORPORATE BONDS AND
NOTES -- (CONTINUED)
OIL/GAS -- 2.0%
AAA/Aa2 Shell Oil Co. 6.70%, 08/15/02.......... $ 700,000 $ 714,641 $ 696,500
----------- -----------
RETAIL -- DEPARTMENT STORES -- 3.0%
A+/A1 J.C. Penney & Co. 6.875%, 06/15/99..... 500,000 493,218 503,750
AA/Aa2 Wal-Mart Stores, Inc. 8.625%,
04/01/01............................. 500,000 516,595 536,250
----------- -----------
1,009,813 1,040,000
----------- -----------
TOTAL CORPORATE BONDS AND NOTES........ 4,017,768 4,037,335
----------- -----------
MONEY MARKET FUND** -- 3.2%
Federated Prime Obligations Money
Market Fund.......................... 1,090,465 1,090,465 1,090,465
----------- -----------
TOTAL INVESTMENTS -- 98.8%............. $34,154,561+ 33,930,979
===========
OTHER ASSETS IN EXCESS OF
LIABILITIES -- 1.2%.................. 411,302
-----------
NET ASSETS -- 100.0%................... $34,342,281
===========
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
8
<PAGE> 20
FUNDS IV TRUST
THE STOCK APPRECIATION FUND
Portfolio of Investments
June 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES COST (NOTE 2A)
- ---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS -- 92.0%
AEROSPACE/DEFENSE -- 5.8%
30,000 Boeing Co. .......................................... $ 1,732,175 $ 2,613,750
46,000 Lockheed Martin Corp. ............................... 3,166,479 3,864,000
62,760 Raytheon Co. ........................................ 2,347,063 3,239,985
------------ ------------
7,245,717 9,717,735
------------ ------------
AUTO & TRUCKS -- 3.6%
155,000 Ford Motor Co. ...................................... 4,716,391 5,018,125
20,000 General Motors Corp. ................................ 985,250 1,047,500
------------ ------------
5,701,641 6,065,625
------------ ------------
BEVERAGES -- 2.2%
76,000 The Coca-Cola Co. ................................... 1,905,478 3,714,500
------------ ------------
BREWERY -- 2.0%
43,736 Anheuser-Busch Cos., Inc. ........................... 2,990,844 3,280,200
------------ ------------
BROADCASTING -- 1.7%
153,600 Telecommunications, Inc. Class A++................... 2,797,013 2,784,000
------------ ------------
BUILDING MATERIALS -- 0.9%
33,970 Owens-Corning Fiberglass Corp........................ 1,426,728 1,460,710
------------ ------------
CHEMICALS -- 0.6%
21,500 Morton International, Inc. .......................... 623,715 800,875
4,440 Sigma-Aldrich Corp. ................................. 251,970 237,540
------------ ------------
875,685 1,038,415
------------ ------------
COMPUTERS -- 2.3%
80,000 Compaq Computer Corp.++.............................. 3,822,886 3,940,000
------------ ------------
COMPUTER SOFTWARE & SERVICES -- 3.0%
33,300 Automatic Data Processing, Inc. ..................... 1,258,141 1,286,213
158,500 Sybase, Inc.++....................................... 4,563,543 3,744,562
------------ ------------
5,821,684 5,030,775
------------ ------------
COSMETICS/PERSONAL CARE -- 0.6%
15,000 Gillette Co. ........................................ 551,062 935,625
------------ ------------
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
9
<PAGE> 21
FUNDS IV TRUST
THE STOCK APPRECIATION FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES COST (NOTE 2A)
- ---------- ------------ ------------
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
ELECTRONICS -- SEMICONDUCTORS -- 2.5%
131,702 Xilinx, Inc.++....................................... $ 4,456,155 $ 4,181,538
------------ ------------
ENVIRONMENTAL CONTROL -- 2.9%
150,588 WMX Technologies, Inc. .............................. 4,332,370 4,931,757
------------ ------------
FINANCIAL SERVICES -- 5.2%
17,080 Chase Manhattan Corp. ............................... 1,153,186 1,206,275
82,000 Federal National Mortgage Association................ 1,979,881 2,747,000
56,041 J.P. Morgan & Co., Inc. ............................. 3,971,063 4,742,470
------------ ------------
7,104,130 8,695,745
------------ ------------
FOOD PROCESSING -- 5.9%
157,822 Archer-Daniels-Midland Co. .......................... 2,986,687 3,018,346
51,079 Philip Morris Cos., Inc. ............................ 3,523,758 5,312,216
50,000 Sara Lee Corp. ...................................... 1,444,063 1,618,750
------------ ------------
7,954,508 9,949,312
------------ ------------
FOREST PRODUCTS & PAPER -- 2.8%
15,000 Champion International Corp. ........................ 825,255 626,250
74,460 International Paper Co. ............................. 2,895,110 2,745,712
17,620 Kimberly-Clark Corp. ................................ 1,247,653 1,361,145
------------ ------------
4,968,018 4,733,107
------------ ------------
HOUSEHOLD PRODUCTS -- 3.4%
10,500 Procter & Gamble Co. ................................ 654,150 951,562
176,840 Rubbermaid, Inc. .................................... 5,126,066 4,818,890
------------ ------------
5,780,216 5,770,452
------------ ------------
INSURANCE -- 4.4%
25,160 General Re Corp. .................................... 3,432,290 3,830,610
13,680 Marsh & McLennan Cos., Inc. ......................... 1,264,408 1,320,120
41,420 St. Paul Cos., Inc. ................................. 2,276,550 2,215,970
------------ ------------
6,973,248 7,366,700
------------ ------------
MACHINERY -- 0.7%
30,000 Deere & Co. ......................................... 874,544 1,200,000
------------ ------------
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
10
<PAGE> 22
FUNDS IV TRUST
THE STOCK APPRECIATION FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES COST (NOTE 2A)
- ---------- ------------ ------------
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
MEDICAL SERVICES -- 1.4%
45,000 Columbia/HCA Healthcare Corp. ....................... $ 1,754,424 $ 2,401,875
------------ ------------
OIL/GAS -- 11.2%
44,000 Amoco Corp. ......................................... 2,645,832 3,184,500
83,816 Ashland, Inc. ....................................... 3,104,385 3,321,209
10,565 Atlantic Richfield Co. .............................. 1,231,351 1,251,952
75,000 Chevron Corp. ....................................... 3,612,000 4,425,000
39,000 Exxon Corp. ......................................... 2,600,012 3,388,125
8,000 Mobil Corp. ......................................... 665,000 897,000
14,525 Royal Dutch Petroleum Co. New York Shares ADR........ 1,843,101 2,233,219
------------ ------------
15,701,681 18,701,005
------------ ------------
PACKAGING & CONTAINER -- 2.3%
28,400 Crown Cork & Seal Co., Inc. ......................... 1,293,450 1,278,000
54,000 Temple-Inland, Inc. ................................. 2,589,487 2,524,500
------------ ------------
3,882,937 3,802,500
------------ ------------
PHARMACEUTICALS -- 8.0%
10,000 Amgen, Inc.++........................................ 504,810 540,000
20,000 Bristol-Myers Squibb Co. ............................ 1,268,054 1,800,000
26,000 Eli Lilly & Co. ..................................... 1,138,830 1,690,000
24,000 Johnson & Johnson.................................... 740,536 1,188,000
102,000 Merck & Co., Inc. ................................... 4,718,909 6,591,750
11,500 Pfizer, Inc. ........................................ 424,344 820,813
13,500 Schering-Plough Corp. ............................... 477,552 847,125
------------ ------------
9,273,035 13,477,688
------------ ------------
RETAIL -- DEPARTMENT STORES -- 1.1%
25,250 May Department Stores Co. ........................... 1,213,515 1,104,688
32,000 Wal-Mart Stores, Inc. ............................... 858,416 812,000
------------ ------------
2,071,931 1,916,688
------------ ------------
RETAIL -- DRUG STORES -- 0.3%
14,000 Walgreen Co. ........................................ 350,350 469,000
------------ ------------
RETAIL -- SPECIALTY LINE -- 1.5%
87,200 Toys "R" Us, Inc.++.................................. 2,560,480 2,485,200
------------ ------------
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
11
<PAGE> 23
FUNDS IV TRUST
THE STOCK APPRECIATION FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL VALUE
AMOUNT COST (NOTE 2A)
- ---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS -- (CONTINUED)
TELECOMMUNICATIONS -- 8.8%
79,439 AT&T Corp. .......................................... $ 4,752,200 $ 4,925,218
97,000 GTE Corp. ........................................... 3,136,725 4,340,750
27,000 Motorola, Inc. ...................................... 1,783,732 1,697,625
76,000 SBC Communications, Inc. ............................ 3,573,975 3,743,000
------------ ------------
13,246,632 14,706,593
------------ ------------
TRANSPORTATION -- 0.4%
10,000 Conrail, Inc. ....................................... 597,300 663,750
------------ ------------
UTILITIES -- ELECTRIC -- 4.6%
61,880 PacifiCorp........................................... 1,241,313 1,376,830
139,955 Unicom Corp. ........................................ 4,056,020 3,901,246
81,334 Wisconsin Energy Corp. .............................. 2,286,778 2,348,519
------------ ------------
7,584,111 7,626,595
------------ ------------
UTILITIES -- GAS -- 1.9%
112,935 NICOR, Inc. ......................................... 3,121,904 3,204,531
------------ ------------
TOTAL COMMON STOCKS.................................. 135,726,712 154,251,621
------------ ------------
U.S. TREASURY BILL (C) -- 0.6%
$1,000,000 3.86%, 07/05/96...................................... 999,578 999,578
------------ ------------
MONEY MARKET FUNDS** -- 9.6%
8,595,212 Federated Government Obligations Money Market Fund... 8,595,212 8,595,212
7,500,000 Federated Prime Obligations Money Market Fund........ 7,500,000 7,500,000
------------ ------------
TOTAL MONEY MARKET FUNDS............................. 16,095,212 16,095,212
------------ ------------
TOTAL INVESTMENTS -- 102.2%.......................... $152,821,502+ 171,346,411
===========
LIABILITIES IN EXCESS OF OTHER ASSETS -- (2.2%)...... (3,673,012)
------------
NET ASSETS -- 100.0%................................. $167,673,399
===========
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
12
<PAGE> 24
FUNDS IV TRUST
THE AGGRESSIVE STOCK APPRECIATION FUND
Portfolio of Investments
June 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES COST (NOTE 2A)
- ---------- ----------- -----------
<C> <S> <C> <C>
COMMON STOCKS -- 97.8%
AEROSPACE/DEFENSE -- 3.0%
7,000 Lockheed Martin Corp. ................................. $ 455,450 $ 588,000
20,340 Rockwell International Corp. .......................... 978,056 1,164,465
----------- -----------
1,433,506 1,752,465
----------- -----------
CHEMICALS -- 8.2%
10,000 Air Products & Chemicals, Inc. ........................ 512,476 577,500
54,800 Cabot Corp. ........................................... 1,339,802 1,342,600
36,000 IMC Global, Inc. ...................................... 903,984 1,354,500
45,290 International Specialty Products, Inc.++............... 540,083 498,190
30,750 Monsanto Co. .......................................... 514,294 999,375
----------- -----------
3,810,639 4,772,165
----------- -----------
COMPUTERS -- 8.6%
75,000 Comdisco, Inc. ........................................ 1,250,791 1,996,875
46,000 Compaq Computer Corp.++................................ 2,215,085 2,265,500
13,560 Sun Microsystems, Inc.++............................... 610,200 798,345
----------- -----------
4,076,076 5,060,720
----------- -----------
COMPUTER SOFTWARE & SERVICES -- 1.3%
11,000 Computer Associates International, Inc. ............... 404,093 783,750
----------- -----------
ELECTRICAL EQUIPMENT -- 0.9%
27,590 Kemet Corp.++.......................................... 615,767 551,800
----------- -----------
ELECTRONICS -- 1.5%
3,400 Hewlett-Packard Co. ................................... 233,586 338,725
24,620 Silicon Valley Group, Inc.++........................... 590,880 461,625
6,000 Teradyne, Inc.++....................................... 90,000 103,500
----------- -----------
914,466 903,850
----------- -----------
ELECTRONICS -- SEMICONDUCTORS -- 1.0%
21,825 Analog Devices, Inc.++................................. 614,919 556,537
----------- -----------
ENTERTAINMENT -- 1.9%
31,500 Grand Casinos, Inc.++.................................. 855,256 811,125
5,141 The Walt Disney Co. ................................... 221,463 323,240
----------- -----------
1,076,719 1,134,365
----------- -----------
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
13
<PAGE> 25
FUNDS IV TRUST
THE AGGRESSIVE STOCK APPRECIATION FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES COST (NOTE 2A)
- ---------- ----------- -----------
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
FINANCIAL SERVICES -- 16.1%
18,000 American Express Co. .................................. $ 583,534 $ 803,250
34,000 Donaldson, Lufkin & Jenrette, Inc. .................... 1,035,843 1,054,000
30,000 Equifax, Inc. ......................................... 431,250 787,500
54,000 Federal National Mortgage Association.................. 1,522,056 1,809,000
51,000 Lehman Brothers Holdings, Inc. ........................ 1,137,620 1,262,250
10,500 Mellon Bank Corp. ..................................... 560,891 598,500
26,000 State Street Boston Corp. ............................. 1,008,270 1,326,000
7,533 Wells Fargo & Co. ..................................... 1,018,377 1,799,445
----------- -----------
7,297,841 9,439,945
----------- -----------
FOOD PROCESSING -- 2.5%
9,340 Campbell Soup Co. ..................................... 596,701 658,470
7,500 Philip Morris Cos., Inc. .............................. 513,219 780,000
----------- -----------
1,109,920 1,438,470
----------- -----------
FOOTWEAR -- 4.2%
24,000 Nike, Inc. Class B..................................... 1,310,621 2,466,000
----------- -----------
FOREST PRODUCTS & PAPER -- 1.1%
16,000 Champion International Corp............................ 923,211 668,000
----------- -----------
HOMEBUILDERS -- 2.4%
69,000 Clayton Homes, Inc. ................................... 1,040,840 1,380,000
----------- -----------
INSURANCE -- 1.0%
13,640 Mercury General Corp. ................................. 595,045 596,750
----------- -----------
LEISURE -- 1.2%
16,780 The Coleman Co., Inc.++................................ 560,840 711,052
----------- -----------
MACHINERY -- 2.0%
24,700 Case Corp. ............................................ 890,705 1,185,600
----------- -----------
MEDICAL SERVICES -- 1.9%
20,180 Columbia/HCA Healthcare Corp. ......................... 877,524 1,077,108
----------- -----------
MEDICAL SUPPLIES -- 1.0%
7,170 Becton, Dickinson & Co. ............................... 598,775 575,392
----------- -----------
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
14
<PAGE> 26
FUNDS IV TRUST
THE AGGRESSIVE STOCK APPRECIATION FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES COST (NOTE 2A)
- ---------- ----------- -----------
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
METALS -- 3.6%
16,500 Aluminum Co. of America................................ $ 933,329 $ 946,688
34,000 Kennametal, Inc. ...................................... 1,185,177 1,156,000
----------- -----------
2,118,506 2,102,688
----------- -----------
MINING -- 1.7%
36,000 Barrick Gold Corp. .................................... 1,060,499 976,500
----------- -----------
OIL/GAS -- 4.3%
25,000 Amoco Corp. ........................................... 1,635,669 1,809,375
14,000 Tosco Corp. ........................................... 457,832 703,500
----------- -----------
2,093,501 2,512,875
----------- -----------
OIL/GAS EQUIPMENT & SERVICES -- 2.6%
46,000 Baker Hughes, Inc. .................................... 948,493 1,512,250
----------- -----------
PHARMACEUTICALS -- 10.2%
7,000 Allergan, Inc. ........................................ 202,475 274,750
25,600 Amgen, Inc.++.......................................... 1,005,894 1,382,400
9,620 Cardinal Health, Inc. ................................. 601,616 693,842
14,000 Johnson & Johnson...................................... 431,243 693,000
35,500 Merck & Co., Inc. ..................................... 1,978,308 2,294,188
10,000 Schering-Plough Corp. ................................. 586,750 627,500
----------- -----------
4,806,286 5,965,680
----------- -----------
RETAIL -- SPECIALTY LINE -- 7.3%
33,500 Corporate Express, Inc.++.............................. 804,000 1,340,000
28,000 OfficeMax, Inc.++...................................... 633,500 668,500
29,950 PETsMART, Inc.++....................................... 774,330 1,430,113
11,035 Tiffany & Co. ......................................... 627,694 805,555
----------- -----------
2,839,524 4,244,168
----------- -----------
TELECOMMUNICATIONS -- 3.2%
11,000 Motorola, Inc. ........................................ 836,033 691,625
23,500 SBC Communications, Inc. .............................. 1,208,476 1,157,375
----------- -----------
2,044,509 1,849,000
----------- -----------
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
15
<PAGE> 27
FUNDS IV TRUST
THE AGGRESSIVE STOCK APPRECIATION FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL VALUE
AMOUNT COST (NOTE 2A)
- ---------- ----------- -----------
<C> <S> <C> <C>
COMMON STOCKS -- (CONTINUED)
TEXTILES -- 1.0%
17,400 Liz Claiborne, Inc. ................................... $ 605,520 $ 602,475
----------- -----------
TOYS -- 1.1%
22,265 Mattel, Inc. .......................................... 404,332 637,336
----------- -----------
UTILITIES -- ELECTRIC -- 3.0%
43,000 Calenergy, Inc.++...................................... 786,991 1,096,500
5,500 CILCORP, Inc. ......................................... 162,937 235,125
16,000 Unicom Corp. .......................................... 536,800 446,000
----------- -----------
1,486,728 1,777,625
----------- -----------
TOTAL COMMON STOCKS.................................... 46,559,405 57,234,566
----------- -----------
MONEY MARKET FUND** -- 1.9%
$1,128,450 Federated Prime Obligations Money Market Fund.......... 1,128,450 1,128,450
----------- -----------
TOTAL INVESTMENTS -- 99.7%............................. $47,687,855+ 58,363,016
==========
OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.3%.......... 145,262
-----------
NET ASSETS -- 100.0%................................... $58,508,278
==========
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
16
<PAGE> 28
FUNDS IV TRUST
THE VALUE STOCK APPRECIATION FUND
Portfolio of Investments
June 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES COST (NOTE 2A)
- --------- ----------- -----------
<C> <S> <C> <C>
COMMON STOCKS -- 97.8%
AEROSPACE/DEFENSE -- 3.1%
16,674 Raytheon Co. ........................................... $ 591,514 $ 860,795
----------- -----------
AUTO & TRUCKS -- 2.2%
18,348 Ford Motor Co. ......................................... 638,694 594,017
----------- -----------
AUTO PARTS -- 3.2%
19,020 Genuine Parts Co. ...................................... 746,413 870,165
----------- -----------
BREWERY -- 2.9%
10,745 Anheuser-Busch Cos., Inc. .............................. 583,441 805,875
----------- -----------
CHEMICAL -- 1.9%
10,460 PPG Industries, Inc. ................................... 384,355 509,925
----------- -----------
COMPUTER SOFTWARE & SERVICES -- 2.6%
18,581 Automatic Data Processing, Inc. ........................ 702,340 717,691
----------- -----------
ELECTRONICS -- SEMICONDUCTORS -- 3.7%
13,695 Intel Corp.............................................. 638,642 1,005,727
----------- -----------
FINANCIAL SERVICES -- 8.7%
9,567 Chase Manhattan Corp. .................................. 692,986 675,669
25,640 Federal National Mortgage Association................... 701,282 858,940
10,160 J.P. Morgan & Co., Inc. ................................ 678,194 859,790
----------- -----------
2,072,462 2,394,399
----------- -----------
FOOD PROCESSING -- 8.1%
12,086 Archer-Daniels-Midland Co. ............................. 230,359 231,145
413 Earthgrains Co. ........................................ 10,123 13,526
14,390 General Mills, Inc. .................................... 822,802 784,255
11,560 Philip Morris Cos., Inc. ............................... 709,495 1,202,240
----------- -----------
1,772,779 2,231,166
----------- -----------
FOOTWEAR -- 0.3%
2,919 Payless ShoeSource, Inc.++.............................. 72,990 92,678
----------- -----------
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
17
<PAGE> 29
FUNDS IV TRUST
THE VALUE STOCK APPRECIATION FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
VALUE
SHARES COST (NOTE 2A)
- --------- ----------- -----------
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
FOREST PRODUCTS & PAPER -- 5.1%
17,920 International Paper Co. ................................ $ 710,055 $ 660,800
2,985 Kimberly-Clark Corp. ................................... 214,353 230,591
10,500 Union Camp Corp. ....................................... 560,009 511,875
----------- -----------
1,484,417 1,403,266
----------- -----------
INSURANCE -- 4.2%
14,140 Chubb Corp. ............................................ 570,244 705,232
1,523 General Re Corp. ....................................... 218,642 231,877
2,391 Marsh & McLennan Cos., Inc. ............................ 218,920 230,732
----------- -----------
1,007,806 1,167,841
----------- -----------
MACHINERY -- 2.4%
15,713 Cooper Industries, Inc. ................................ 696,807 652,089
----------- -----------
MEDICAL SERVICES -- 0.7%
3,844 Columbia/HCA Healthcare Corp. .......................... 203,482 205,173
----------- -----------
OIL/GAS -- 10.3%
20,775 Ashland, Inc. .......................................... 700,770 823,209
4,713 Atlantic Richfield Co. ................................. 543,334 558,490
8,452 Exxon Corp. ............................................ 619,859 734,268
4,635 Royal Dutch Petroleum Co. New York Shares ADR........... 567,859 712,631
----------- -----------
2,431,822 2,828,598
----------- -----------
PERSONAL CARE -- 1.8%
12,300 Tambrands, Inc. ........................................ 511,987 502,762
----------- -----------
PHARMACEUTICALS -- 8.2%
13,775 Abbott Laboratories..................................... 478,681 599,213
8,000 Bristol-Myers Squibb Co. ............................... 490,000 720,000
14,545 Merck & Co., Inc. ...................................... 585,436 939,971
----------- -----------
1,554,117 2,259,184
----------- -----------
PUBLISHING & PRINTING -- 2.6%
11,610 Dun & Bradstreet Corp. ................................. 619,592 725,625
----------- -----------
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
18
<PAGE> 30
FUNDS IV TRUST
THE VALUE STOCK APPRECIATION FUND
Portfolio of Investments (continued)
June 30, 1996
<TABLE>
<CAPTION>
SHARES/
PRINCIPAL VALUE
AMOUNT COST (NOTE 2A)
- --------- ----------- -----------
<C> <S> <C> <C>
COMMON STOCKS -- (CONTINUED)
RETAIL -- DEPARTMENT STORES -- 4.7%
18,246 May Department Stores Co. .............................. $ 711,895 $ 798,262
19,345 Wal-Mart Stores, Inc. .................................. 459,668 490,879
----------- -----------
1,171,563 1,289,141
----------- -----------
RETAIL -- SPECIALTY LINE -- 2.4%
23,093 Toys "R" Us, Inc.++..................................... 693,714 658,151
----------- -----------
TELECOMMUNICATIONS -- 9.3%
11,464 AT&T Corp. ............................................. 704,887 710,768
16,995 GTE Corp. .............................................. 614,440 760,526
10,033 Motorola, Inc. ......................................... 652,747 630,825
8,975 SBC Communications, Inc. ............................... 408,138 442,019
----------- -----------
2,380,212 2,544,138
----------- -----------
TEXTILES -- 2.0%
9,400 VF Corp. ............................................... 479,931 560,475
----------- -----------
TOBACCO -- 2.9%
23,410 UST, Inc. .............................................. 687,434 801,793
----------- -----------
TRANSPORTATION -- 1.5%
17,518 Alexander & Baldwin, Inc. .............................. 385,396 422,622
----------- -----------
UTILITIES -- ELECTRIC -- 3.0%
28,445 Central & South West Corp. ............................. 784,677 824,905
----------- -----------
TOTAL COMMON STOCKS..................................... 23,296,587 26,928,201
----------- -----------
MONEY MARKET FUND** -- 2.6%
$699,644 Federated Prime Obligations Money Market Fund........... 699,644 699,644
----------- -----------
TOTAL INVESTMENTS -- 100.4%............................. $23,996,231+ 27,627,845
==========
LIABILITIES IN EXCESS OF OTHER ASSETS -- (0.4%)......... (98,361)
-----------
NET ASSETS -- 100.0%.................................... $27,529,484
==========
</TABLE>
See Footnotes to Portfolios and accompanying notes to financial statements.
19
<PAGE> 31
FUNDS IV TRUST
Footnotes to Portfolios
June 30, 1996
* Short-Term Credit Ratings given by the following Nationally Recognized
Statistical Rating Organizations which represent instrument of the highest
quality (unaudited):
<TABLE>
<CAPTION>
Duff & Phelps Fitch Investor IBCA Moody's Investors Standard & Poor's Thompson
Credit Rating Services, Inc. Ltd. Service, Inc. Ratings Group BankWatch
- ------------- -------------- ---- ----------------- ----------------- ----------
<S> <C> <C> <C> <C> <C>
D-1 F-1 A1 P-1 A-1 TBW-1
</TABLE>
Long-Term Credit Ratings given by Standard & Poor's Ratings Group and
Moody's Investors Service, Inc. (unaudited):
<TABLE>
<CAPTION>
Standard & Poor's Moody's
- ----------------- -------
<C> <C> <S>
AAA Aaa Instrument judged to be of the best quality and carrying
the smallest amount of investment risk.
AA Aa Instrument judged to be of high quality by all standards.
A A Instrument judged to be adequate by all standards.
</TABLE>
Items which possess the strongest investment attributes of their category
are given that letter rating following by a number. The Standard & Poor's
Ratings Group may modify the ratings by the addition of a plus or minus sign
to show relative standing within the major rating categories. Moody's
applies numerical modifiers to designate relative standings within the
generic rating categories.
U.S. Government issues have assumed ratings of AAA/Aaa.
** Money Market Funds have credit ratings of AAA/Aaa.
+ The cost of securities for Federal income tax purposes is substantially the
same as for book purposes.
++ Non-income producing security.
(a) Maturity date shown is the final maturity date; rate shown represents the
coupon rate to next interest reset date.
(b) Security may only be sold to qualified institutional buyers.
(c) Rate shown is yield to maturity on date of purchase.
INVESTMENT PERCENTAGES SHOWN ARE CALCULATED AS A PERCENTAGE OF NET ASSETS.
ABBREVIATIONS USED IN THE PORTFOLIOS:
<TABLE>
<S> <C>
ADR American Depository Receipt
MTN Medium Term Note
VR Variable Rate
</TABLE>
See accompanying notes to financial statements.
20
<PAGE> 32
FUNDS IV TRUST
Statement of Assets and Liabilities
June 30, 1996
<TABLE>
<CAPTION>
THE THE THE
CASH RESERVE SHORT-TERM INTERMEDIATE THE
MONEY MARKET TREASURY BOND INCOME BOND INCOME
FUND INCOME FUND FUND FUND
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value (cost
$302,095,729, $14,281,115, $115,434,903, and
$34,154,561, respectively)................... $302,095,729 $14,354,364 $115,862,879 $33,930,979
Interest receivable............................ 1,656,754 248,678 1,757,346 509,113
Receivable for Fund shares sold................ -- 851 5,681 73
Unamortized organizational costs............... 14,414 14,502 14,502 14,502
Other assets................................... 10,539 7,357 8,634 7,294
------------ ----------- ------------ -----------
Total Assets................................. 303,777,436 14,625,752 117,649,042 34,461,961
------------ ----------- ------------ -----------
LIABILITIES:
Payable to custodian........................... -- 10,212 115,200 26,814
Payable for investments purchased.............. 15,000,000 -- -- --
Dividend payable............................... 1,117,629 16,411 51,097 19,712
Payable for Fund shares redeemed............... -- 107,333 852 --
Investment advisory fee payable................ 44,062 8,135 38,242 34,366
Administrative services fee payable............ 33,047 1,805 14,341 4,082
Shareholder servicing fee payable.............. 11,016 602 4,780 1,361
Custodian fee payable.......................... 6,609 361 2,868 816
Fund accounting fee payable.................... 2,500 2,898 3,487 3,146
Transfer agent fee payable..................... 786 1,024 1,700 875
Other accrued expenses......................... 65,003 17,063 40,869 28,508
------------ ----------- ------------ -----------
Total Liabilities............................ 16,280,652 165,844 273,436 119,680
------------ ----------- ------------ -----------
NET ASSETS....................................... $287,496,784 $14,459,908 $117,375,606 $34,342,281
============ =========== ============ ===========
COMPOSITION OF NET ASSETS:
Shares of beneficial interest outstanding (par
value of $0.001 per share); unlimited number
of shares authorized......................... $ 287,497 $ 1,435 $ 11,707 $ 3,361
Additional paid-in capital..................... 287,209,287 14,373,489 116,593,454 34,521,459
Accumulated undistributed net realized gain on
investment transactions...................... -- 11,735 342,469 41,043
Net unrealized appreciation (depreciation) on
investments.................................. -- 73,249 427,976 (223,582)
------------ ----------- ------------ -----------
Net assets applicable to shares of beneficial
interest outstanding........................... $287,496,784 $14,459,908 $117,375,606 $34,342,281
============ =========== ============ ===========
SHARES OF BENEFICIAL INTEREST:
SERVICE CLASS:
Shares of beneficial interest outstanding.... 287,490,587 1,434,299 11,705,945 3,360,120
============ =========== ============ ===========
Net asset value, maximum offering price and
redemption price per share outstanding..... $1.00 $10.08 $10.03 $10.22
===== ====== ====== ======
PREMIUM CLASS:
Shares of beneficial interest outstanding.... 6,197 622 626 624
===== ====== ====== ======
Net asset value, maximum offering price and
redemption price per share outstanding..... $1.00 $10.08 $10.03 $10.22
===== ====== ====== ======
</TABLE>
See accompanying notes to financial statements.
21
<PAGE> 33
FUNDS IV TRUST
Statement of Assets and Liabilities (continued)
June 30, 1996
<TABLE>
<CAPTION>
THE
THE AGGRESSIVE THE
STOCK STOCK VALUE STOCK
APPRECIATION APPRECIATION APPRECIATION
FUND FUND FUND
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at value (cost $152,821,502,
$47,687,855 and $23,996,231, respectively).................. $171,346,411 $58,363,016 $27,627,845
Cash.......................................................... 74,276 151,352 --
Receivable for investments sold............................... 2,557,582 -- --
Dividends and interest receivable............................. 391,463 46,309 54,498
Receivable for Fund shares sold............................... 34,523 3,393 332
Unamortized organizational costs.............................. 14,502 14,502 19,034
Other assets.................................................. 8,763 7,718 7,468
------------ ----------- -----------
Total Assets................................................ 174,427,520 58,586,290 27,709,177
------------ ----------- -----------
LIABILITIES:
Payable to custodian.......................................... -- -- 97,041
Payable for investments purchased............................. 6,576,694 -- --
Payable for Fund shares redeemed.............................. 7,313 499 1,879
Investment advisory fee payable............................... 89,451 35,935 51,862
Administrative services fee payable........................... 20,642 7,235 3,433
Shareholder servicing fee payable............................. 6,881 2,412 1,144
Custodian fee payable......................................... 4,129 1,447 687
Fund accounting fee payable................................... 3,479 3,319 3,112
Transfer agent fee payable.................................... 1,775 1,950 1,075
Other accrued expenses........................................ 43,757 25,215 19,460
------------ ----------- -----------
Total Liabilities........................................... 6,754,121 78,012 179,693
------------ ----------- -----------
NET ASSETS...................................................... $167,673,399 $58,508,278 $27,529,484
============ =========== ===========
COMPOSITION OF NET ASSETS:
Shares of beneficial interest outstanding (par value of $0.001
per share); unlimited number of shares authorized........... $ 12,711 $ 4,575 $ 2,155
Additional paid-in capital.................................... 128,462,800 45,969,476 22,098,708
Accumulated undistributed net investment income............... 29,813 1,747 3,740
Accumulated undistributed net realized gain on investment
transactions................................................ 20,643,166 1,857,319 1,793,267
Net unrealized appreciation on investments.................... 18,524,909 10,675,161 3,631,614
------------ ----------- -----------
Net assets applicable to shares of beneficial interest
outstanding................................................... $167,673,399 $58,508,278 $27,529,484
============ =========== ===========
SHARES OF BENEFICIAL INTEREST:
SERVICE CLASS:
Shares of beneficial interest outstanding................... 12,710,000 4,574,127 2,155,363
============ =========== ===========
Net asset value, maximum offering price and redemption price
per share outstanding..................................... $13.19 $12.79 $12.77
====== ====== ======
PREMIUM CLASS:
Shares of beneficial interest outstanding................... 580 576 6
====== ====== ======
Net asset value, maximum offering price and redemption price
per share outstanding..................................... $13.19 $12.79 $12.77
====== ====== ======
</TABLE>
See accompanying notes to financial statements.
22
<PAGE> 34
FUNDS IV TRUST
Statement of Operations
For the Year Ended June 30, 1996
<TABLE>
<CAPTION>
THE THE THE
CASH RESERVE SHORT-TERM INTERMEDIATE THE
MONEY MARKET TREASURY BOND INCOME BOND INCOME
FUND INCOME FUND FUND FUND
------------ ------------- ----------- -----------
<S> <C> <C> <C> <C>
NET INVESTMENT INCOME:
INTEREST INCOME............................. $17,022,342 $1,027,848 $8,328,085 $1,642,668
----------- ---------- ---------- ----------
EXPENSES:
Investment advisory....................... 583,627 49,468 509,227 104,808
Administrative services................... 437,690 24,734 190,960 39,303
Shareholder servicing..................... 145,907 8,245 63,654 13,102
Custodian................................. 87,544 4,947 38,192 7,860
Legal..................................... 34,541 1,881 14,537 2,683
Reports to shareholders................... 32,036 1,800 13,536 2,762
Audit..................................... 31,124 17,811 28,283 21,779
Fund accounting........................... 30,000 32,188 35,467 33,996
Insurance................................. 19,427 951 8,983 1,039
Trustees.................................. 18,930 1,100 8,436 1,651
Amortization of organization expenses..... 4,609 4,622 4,622 4,622
Transfer agent............................ 2,646 4,552 14,549 4,347
Registration.............................. 2,624 1,523 11,698 6,337
Miscellaneous............................. 11,573 1,356 5,702 2,030
----------- ---------- ---------- ----------
Total expenses before waivers........... 1,442,278 155,178 947,846 246,319
Expenses waived by Investment Adviser &
Administrator......................... -- (27,954) -- (9,440)
----------- ---------- ---------- ----------
Net expenses.............................. 1,442,278 127,224 947,846 236,879
----------- ---------- ---------- ----------
NET INVESTMENT INCOME....................... 15,580,064 900,624 7,380,239 1,405,789
----------- ---------- ---------- ----------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized gain on investment
transactions............................ -- 25,004 1,397,445 196,255
Net change in unrealized depreciation on
investments............................. -- (221,686) (3,300,596) (861,549)
----------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS............................... -- (196,682) (1,903,151) (665,294)
----------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................ $15,580,064 $ 703,942 $5,477,088 $ 740,495
=========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
23
<PAGE> 35
FUNDS IV TRUST
Statement of Operations (continued)
For the Year Ended June 30, 1996
<TABLE>
<CAPTION>
THE
THE AGGRESSIVE THE
STOCK STOCK VALUE STOCK
APPRECIATION APPRECIATION APPRECIATION
FUND FUND FUND
------------ ------------ ------------
<S> <C> <C> <C>
NET INVESTMENT INCOME:
INCOME:
Dividends................................................... $ 3,263,819 $ 675,060 $ 665,052
Interest.................................................... 307,627 113,740 131,386
----------- ---------- ----------
Total income................................................ 3,571,446 788,800 796,438
----------- ---------- ----------
EXPENSES:
Investment advisory......................................... 1,002,771 408,019 162,817
Administrative services..................................... 231,408 82,152 37,573
Shareholder servicing....................................... 77,136 27,384 12,524
Custodian................................................... 46,282 16,430 7,515
Fund accounting............................................. 36,049 34,905 32,949
Audit....................................................... 23,870 19,417 19,608
Legal....................................................... 21,827 5,402 2,868
Reports to shareholders..................................... 16,634 5,907 3,219
Transfer agent.............................................. 13,984 10,451 4,784
Registration................................................ 13,337 2,493 1,765
Trustees.................................................... 9,735 3,368 1,580
Insurance................................................... 9,266 3,284 1,250
Amortization of organization expenses....................... 4,622 4,622 4,631
Miscellaneous............................................... 6,651 2,973 1,697
----------- ---------- ----------
Total expenses before waivers............................. 1,513,572 626,807 294,780
Expenses waived by Administrator.......................... -- -- (14,244)
----------- ---------- ----------
Net expenses................................................ 1,513,572 626,807 280,536
----------- ---------- ----------
NET INVESTMENT INCOME......................................... 2,057,874 161,993 515,902
----------- ---------- ----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions................ 23,899,611 3,620,177 1,942,726
Net change in unrealized appreciation on investments........ 3,513,732 5,862,119 2,196,172
----------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS............... 27,413,343 9,482,296 4,138,898
----------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......... $29,471,217 $9,644,289 $4,654,800
=========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
24
<PAGE> 36
FUNDS IV TRUST
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
THE CASH RESERVE THE SHORT-TERM
MONEY MARKET FUND* TREASURY INCOME FUND**
------------------------------ ------------------------------
YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income....................... $ 15,580,064 $ 11,878,855 $ 900,624 $ 630,124
Net realized gain on investment
transactions.............................. -- -- 25,004 1,144
Net change in unrealized appreciation
(depreciation) on investments............. -- -- (221,686) 294,935
------------- ------------- ------------- -------------
Net increase in net assets resulting from
operations................................ 15,580,064 11,878,855 703,942 926,203
------------- ------------- ------------- -------------
Distributions to Shareholders:
Net investment income:
Service Class............................. (15,579,743) (11,878,590) (900,288) (629,853)
Premium Class............................. (321) (265) (336) (271)
------------- ------------- ------------- -------------
(15,580,064) (11,878,855) (900,624) (630,124)
------------- ------------- ------------- -------------
Net realized gain on investment
transactions:
Service Class............................. -- -- (14,408) --
Premium Class............................. -- -- (5) --
------------- ------------- ------------- -------------
-- -- (14,413) --
------------- ------------- ------------- -------------
Total distributions to shareholders......... (15,580,064) (11,878,855) (915,037) (630,124)
------------- ------------- ------------- -------------
Transactions in Shares of Beneficial Interest:
Proceeds from sales of shares:
Service Class............................. 484,875,763 504,606,671 4,907,975 19,068,124
Premium Class............................. -- -- -- --
------------- ------------- ------------- -------------
484,875,763 504,606,671 4,907,975 19,068,124
------------- ------------- ------------- -------------
Net asset value of shares issued in
reinvestment of distributions:
Service Class........................... 11,616 7,113 722,358 535,484
Premium Class........................... 319 263 339 269
------------- ------------- ------------- -------------
11,935 7,376 722,697 535,753
------------- ------------- ------------- -------------
Cost of shares redeemed:
Service Class............................. (472,059,935) (229,956,257) (6,237,610) (4,633,246)
Premium Class............................. -- -- -- --
------------- ------------- ------------- -------------
(472,059,935) (229,956,257) (6,237,610) (4,633,246)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
derived from transactions in shares of
beneficial interest....................... 12,827,763 274,657,790 (606,938) 14,970,631
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS......... 12,827,763 274,657,790 (818,033) 15,266,710
NET ASSETS:
Beginning of Period......................... 274,669,021 11,231 15,277,941 11,231
------------- ------------- ------------- -------------
End of Period............................... $ 287,496,784 $ 274,669,021 $14,459,908 $15,277,941
============== ============== ============ ============
</TABLE>
* Fund commenced operations on August 19, 1994.
** Fund commenced operations on August 26, 1994.
See accompanying notes to financial statements.
25
<PAGE> 37
FUNDS IV TRUST
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
THE INTERMEDIATE
BOND INCOME FUND* THE BOND INCOME FUND*
------------------------------ ------------------------------
YEAR YEAR
ENDED PERIOD ENDED ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income......................... $ 7,380,239 $ 6,011,113 $ 1,405,789 $ 777,560
Net realized gain (loss) on investment
transactions................................ 1,397,445 (1,054,976) 196,255 (155,212)
Net change in unrealized appreciation
(depreciation) on investments............... (3,300,596) 3,728,572 (861,549) 637,967
------------- ------------- ------------- -------------
Net increase in net assets resulting from
operations.................................. 5,477,088 8,684,709 740,495 1,260,315
------------- ------------- ------------- -------------
Distributions to Shareholders:
Net investment income:
Service Class............................... (7,379,881) (6,010,821) (1,405,448) (777,262)
Premium Class............................... (358) (292) (341) (298)
------------- ------------- ------------- -------------
(7,380,239) (6,011,113) (1,405,789) (777,560)
------------- ------------- ------------- -------------
Transactions in Shares of Beneficial Interest:
Proceeds from sales of shares:
Service Class............................... 29,474,641 151,855,281 24,125,962 18,704,493
Premium Class............................... -- -- -- --
------------- ------------- ------------- -------------
29,474,641 151,855,281 24,125,962 18,704,493
------------- ------------- ------------- -------------
Net asset value of shares issued in
reinvestment of distributions:
Service Class............................. 6,779,966 5,850,294 1,204,315 756,287
Premium Class............................. 355 290 338 295
------------- ------------- ------------- -------------
6,780,321 5,850,584 1,204,653 756,582
------------- ------------- ------------- -------------
Cost of shares redeemed:
Service Class............................... (46,299,100) (31,067,797) (3,306,112) (6,971,989)
Premium Class............................... -- -- -- --
------------- ------------- ------------- -------------
(46,299,100) (31,067,797) (3,306,112) (6,971,989)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets derived
from transactions in shares of beneficial
interest.................................... (10,044,138) 126,638,068 22,024,503 12,489,086
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS........... (11,947,289) 129,311,664 21,359,209 12,971,841
NET ASSETS:
Beginning of Period........................... 129,322,895 11,231 12,983,072 11,231
------------- ------------- ------------- -------------
End of Period................................. $ 117,375,606 $ 129,322,895 $34,342,281 $12,983,072
============= ============= ============ ============
</TABLE>
* Fund commenced operations on August 26, 1994.
See accompanying notes to financial statements.
26
<PAGE> 38
FUNDS IV TRUST
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
THE STOCK THE AGGRESSIVE STOCK
APPRECIATION FUND* APPRECIATION FUND*
------------------------------ ------------------------------
YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1996 JUNE 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income........................ $ 2,057,874 $ 1,820,788 $ 161,993 $ 424,601
Net realized gain (loss) on investment
transactions............................... 23,899,611 (2,494,115) 3,620,177 (1,059,218)
Net change in unrealized appreciation on
investments................................ 3,513,732 15,011,177 5,862,119 4,813,042
------------- ------------- ------------- -------------
Net increase in net assets resulting from
operations................................. 29,471,217 14,337,850 9,644,289 4,178,425
------------- ------------- ------------- -------------
Distributions to Shareholders:
Net investment income:
Service Class.............................. (2,028,102) (1,820,567) (160,227) (424,543)
Premium Class.............................. (92) (88) (19) (58)
------------- ------------- ------------- -------------
(2,028,194) (1,820,655) (160,246) (424,601)
------------- ------------- ------------- -------------
Net realized gain on investment transactions:
Service Class.............................. (762,295) -- (703,555) --
Premium Class.............................. (35) -- (85) --
------------- ------------- ------------- -------------
(762,330) -- (703,640) --
------------- ------------- ------------- -------------
Total distributions to shareholders.......... (2,790,524) (1,820,655) (863,886) (424,601)
------------- ------------- ------------- -------------
Transactions in Shares of Beneficial Interest:
Proceeds from sales of shares:
Service Class.............................. 39,950,619 141,795,146 19,337,348 52,202,929
Premium Class.............................. -- -- -- --
------------- ------------- ------------- -------------
39,950,619 141,795,146 19,337,348 52,202,929
------------- ------------- ------------- -------------
Net asset value of shares issued in
reinvestment of distributions:
Service Class............................ 2,654,679 1,792,471 818,362 415,956
Premium Class............................ 126 88 104 57
------------- ------------- ------------- -------------
2,654,805 1,792,559 818,466 416,013
------------- ------------- ------------- -------------
Cost of shares redeemed:
Service Class.............................. (32,858,055) (24,870,794) (14,639,157) (12,172,779)
Premium Class.............................. -- -- -- --
------------- ------------- ------------- -------------
(32,858,055) (24,870,794) (14,639,157) (12,172,779)
------------- ------------- ------------- -------------
Net increase in net assets derived from
transactions in shares of beneficial
interest................................... 9,747,369 118,716,911 5,516,657 40,446,163
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS..................... 36,428,062 131,234,106 14,297,060 44,199,987
NET ASSETS:
Beginning of Period.......................... 131,245,337 11,231 44,211,218 11,231
------------- ------------- ------------- -------------
End of Period................................ $ 167,673,399 $ 131,245,337 $ 58,508,278 $ 44,211,218
============= ============= ============= =============
Undistributed net investment income............ $29,813 $133 $1,747 --
============= ============= ============= =============
</TABLE>
* Fund commenced operations on August 26, 1994.
See accompanying notes to financial statements.
27
<PAGE> 39
FUNDS IV TRUST
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
THE VALUE STOCK
APPRECIATION FUND*
------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995
------------- -------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income.................................................... $ 515,902 $ 181,162
Net realized gain on investment transactions............................. 1,942,726 223,397
Net change in unrealized appreciation on investments..................... 2,196,172 1,435,442
------------- -------------
Net increase in net assets resulting from operations..................... 4,654,800 1,840,001
------------- -------------
Distributions to Shareholders:
Net investment income:
Service Class.......................................................... (512,136) (181,187)
Premium Class.......................................................... (1) --
------------- -------------
(512,137) (181,187)
------------- -------------
Net realized gain on investment transactions:
Service Class.......................................................... (372,855) --
Premium Class.......................................................... (1) --
------------- -------------
(372,856) --
------------- -------------
Total distributions to shareholders...................................... (884,993) (181,187)
------------- -------------
Transactions in Shares of Beneficial Interest:
Proceeds from sales of shares:
Service Class.......................................................... 8,660,298 19,959,592
Premium Class.......................................................... -- --
------------- -------------
8,660,298 19,959,592
------------- -------------
Net asset value of shares issued in reinvestment of distributions:
Service Class.......................................................... 855,327 180,830
Premium Class.......................................................... 2 --
------------- -------------
855,329 180,830
------------- -------------
Cost of shares redeemed:
Service Class.......................................................... (6,445,501) (1,109,805)
Premium Class.......................................................... -- --
------------- -------------
(6,445,501) (1,109,805)
------------- -------------
Net increase in net assets derived from transactions in shares of
beneficial interest.................................................... 3,070,126 19,030,617
------------- -------------
NET INCREASE IN NET ASSETS................................................. 6,839,933 20,689,431
NET ASSETS:
Beginning of Period...................................................... 20,689,551 120
------------- -------------
End of Period............................................................ $27,529,484 $20,689,551
============ ============
Undistributed (distributions in excess of) net investment income........... $3,740 $(25)
============ ============
</TABLE>
* Fund commenced operations on February 10, 1995.
See accompanying notes to financial statements.
28
<PAGE> 40
FUNDS IV TRUST
Notes to Financial Statements
June 30, 1996
1. DESCRIPTION AND ORGANIZATION
FUNDS IV Trust (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company. The Trust was organized as a Delaware business trust on May 2, 1994 and
currently consists of eleven portfolios: The U.S. Treasury Reserve Money Market
Fund, The Cash Reserve Money Market Fund, The Short-Term Treasury Income Fund,
The Intermediate Bond Income Fund, The Bond Income Fund, The Stock Appreciation
Fund, The Aggressive Stock Appreciation Fund, The Value Stock Appreciation Fund,
The U.S. Intermediate Tax Exempt Fund, The Kansas Intermediate Tax Exempt Fund,
and The International Equity Fund (each, a "Fund", collectively, the "Funds").
Each Fund comprises two classes of shares, the Service Class and the Premium
Class. The capitalization of the Trust consists solely of an unlimited number of
shares of beneficial interest with a par value of $0.001 each.
Currently, seven of the Funds are active. The Cash Reserve Money Market
Fund commenced operations on August 19, 1994; The Short-Term Treasury Income
Fund, The Intermediate Bond Income Fund, The Bond Income Fund, The Stock
Appreciation Fund, and The Aggressive Stock Appreciation Fund commenced
operations on August 26, 1994. The Value Stock Appreciation Fund commenced
operations on February 10, 1995. As of June 30, 1996, The U.S. Treasury Reserve
Money Market Fund, The U.S. Intermediate Tax Exempt Fund, The Kansas
Intermediate Tax Exempt Fund, and The International Equity Fund had not
commenced operations.
On January 31, 1996, Fourth Financial Corporation ("Fourth Financial"), the
corporate parent of the Funds' Investment Adviser (except The Cash Reserve Money
Market Fund) BANK IV, N.A. ("BANK IV") merged, pursuant to an Agreement and Plan
of Merger (the "Merger Agreement") with Boatmen's Bancshares, Inc.
("Boatmen's"). The Merger Agreement provides, among other things, for the merger
of Fourth Financial with and into a wholly-owned subsidiary of Boatmen's (the
"Merger").
On January 15, 1996, the Trustees of FUNDS IV Trust approved the assignment
of the Trust's advisory contract with BANK IV to Boatmen's that is deemed to
occur upon the consummation of this Merger.
At a Meeting held on May 10, 1996, the Board of Trustees of FUNDS IV Trust
(the "Trust") approved an Agreement and Plan of Reorganization between The Cash
Reserve Money Market Fund, The Intermediate Bond Income Fund, The Bond Income
Fund, The Stock Appreciation Fund, The Aggressive Stock Appreciation Fund and
The Value Stock Appreciation Fund, (together, the "Merging Funds") and
corresponding portfolios of The Pilot Funds. The Pilot Funds are managed by
Boatmen's Trust Company, an affiliate of the Merging Funds' Investment Adviser.
The Agreement and Plan of Reorganization provides for the transfer of
substantially all assets and stated liabilities of each aforementioned Merging
Funds in exchange for shares of the Pilot Shares class of shares of the
corresponding Pilot Fund, followed by distribution of the Pilot shares of the
Pilot Fund to the Merging Funds' shareholders. Each reorganization has been
structured as a tax free transaction and is subject to the satisfaction of
various conditions, including the approval of shareholders of each of the
Merging Funds, however, each reorganization is a separate transaction and is not
contingent
29
<PAGE> 41
FUNDS IV TRUST
Notes to Financial Statements (continued)
June 30, 1996
upon the approval or consummation of any other transaction. It is anticipated
that, upon satisfaction of the applicable conditions, the reorganizations will
be consummated during the fall of 1996.
At the May 10, 1996 Board of Trustees Meeting, the Board of Trustees of the
Trust also voted to liquidate The Short-Term Treasury Income Fund (the
"Liquidating Fund"), pursuant to a Plan of Liquidation, subject to the
satisfaction of certain conditions, including approval of the shareholders of
the Liquidating Fund. Upon liquidation, the assets of the Liquidating Fund will
be sold, and the proceeds distributed to shareholders. It is anticipated that,
upon satisfaction of the applicable conditions, the liquidation will be
consummated during the fall of 1996 in advance of the reorganization
transactions.
Prior to the commencement of operations, none of the Funds had any
operations other than organization matters and the sale to FUNDS IV Distributor,
Inc. ("FFD"), a wholly-owned subsidiary of Furman Selz LLC, the Trust's
Distributor, of shares of beneficial interest representing the initial capital
of the Funds.
Each class of shares outstanding bears the same dividend, liquidation and
other rights and conditions, except that the Service Class shares and the
Premium Class shares may bear separate shareholder servicing expenses, different
transfer agency and printing and postage expenses. Each class of shares has
exclusive voting rights with respect to matters affecting only that class.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements:
A) SECURITY VALUATION: The Funds (except The Cash Reserve Money Market
Fund) value investments at the last sales price as of the close of
regular trading on the market on which such securities are primarily
traded. Over-the-counter securities, or exchange traded securities for
which there are no transactions, are valued at the current bid price.
Bonds and other fixed income securities may be valued on the basis of
prices provided by a pricing service approved by the Board of Trustees.
In the absence of market quotations, investments are valued at fair
value as determined in good faith by, or at the direction of the Board
of Trustees. Short-term securities which mature in 60 days or less are
valued at amortized cost, if their term to maturity at purchase was 60
days or less, or by amortizing their value on the 61st day prior to
maturity, if their original term to maturity at purchase exceeded 60
days.
Investment securities of The Cash Reserve Money Market Fund are valued
using the amortized cost method which approximates current market value.
Under this method, securities are valued at cost when purchased and,
thereafter, a constant proportionate amortization of any discount or
premium is recorded until maturity of the security.
B) INVESTMENT TRANSACTIONS AND INCOME: Investment transactions are
recorded on the trade date. Identified cost of investments sold is used
to calculate gain and loss on sales for both
30
<PAGE> 42
FUNDS IV TRUST
Notes to Financial Statements (continued)
June 30, 1996
financial statement and Federal income tax purposes. Interest income,
including the amortization of discount or premium, is recorded as
earned. Dividend income is recorded on the ex-dividend date.
C) DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS TO SHAREHOLDERS: Dividends from
net investment income are declared daily and paid monthly, generally on
the first business day of each month, for The Cash Reserve Money Market
Fund, The Short-Term Treasury Income Fund, The Intermediate Bond Income
Fund, and The Bond Income Fund. In the case of The Stock Appreciation
Fund, The Aggressive Stock Appreciation Fund, and The Value Stock
Appreciation Fund, dividends are paid at least annually. Each Fund will
distribute, at least annually, substantially all net capital gains, if
any, earned by the Fund. The amount of dividends and distributions are
determined in accordance with Federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To
the extent these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their Federal tax
basis treatment; temporary differences do not require reclassification.
Dividends and distributions which exceed net investment income and net
realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or
distributions in excess of net realized capital gains.
D) FEDERAL INCOME TAXES: Each Fund is a separate taxable entity for Federal
income tax purposes, qualified and intends to continue to qualify as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended. By so qualifying, each Fund will not
be subject to Federal income taxes to the extent that it distributes all
of its "investment company taxable income" as defined in the Code, and
net capital gains, if any, to its shareholders. Each Fund also intends
to meet the distribution requirements to avoid the payment of an excise
tax. Accordingly, no provision for Federal income taxes is required.
E) ORGANIZATIONAL COSTS: Costs incurred in connection with the
organization and initial registration of each Fund have been deferred
and are being amortized on a straight-line basis for a five-year period
beginning with the commencement of operations of each Fund. In the
event that any of the initial shares of the Funds owned by FFD are
redeemed during the amortization period, the redemption proceeds will
be reduced by a pro rata portion of any unamortized deferred
organization expenses in the same proportion as the number of initial
shares being redeemed bears to the number of initial shares outstanding
at the time of redemption.
F) USE OF ESTIMATES: Estimates and assumptions are required to be made
regarding assets, liabilities and changes in net assets resulting from
operations when financial statements are prepared. Changes in the
economic environment, financial markets and any other parameters used
in determining these estimates could cause actual results to differ
from these amounts.
G) DETERMINATION OF NET ASSET VALUE AND ALLOCATION OF EXPENSES: Expenses
directly attributable to a Fund are charged to that Fund; other
expenses are allocated proportionately among each Fund within the Trust
in relation to the net assets of each Fund, or on another reasonable
31
<PAGE> 43
FUNDS IV TRUST
Notes to Financial Statements (continued)
June 30, 1996
basis. In calculating net asset value per share of each class,
investment income and expenses, other than class-specific expenses, are
allocated daily to each class of shares based upon the proportion of
net assets of each class at the beginning of each day (for daily
dividend Funds, based on the value of outstanding settled shares).
3. INVESTMENT ADVISERS
BANK IV provides investment advisory services to the Funds (except The Cash
Reserve Money Market Fund). BANK IV is a wholly-owned subsidiary of Fourth
Financial and it acts as the investment adviser to a wide variety of trusts,
individuals, institutions and corporations.
AMR Investment Services, Inc. ("AMR") provides investment advisory services
to The Cash Reserve Money Market Fund. AMR is a wholly-owned subsidiary of AMR
Corporation, the parent company of American Airlines, Inc. It was organized in
1986 to provide business management, advisory, administrative, and asset
management consulting services.
Pursuant to the separate Advisory Agreements, BANK IV and AMR act as
Investment Advisers (collectively, the "Advisers") and, subject to the
supervision and direction of the Trust's Board of Trustees, direct the
investments of the Funds in accordance with their investment objectives and
policies, make investment decisions and place orders to purchase and sell
securities for the Funds. As compensation for their investment advisory
services, the Advisers are each entitled to receive from the respective Funds
they advise a monthly fee at an annual percentage rate of the average daily net
assets of the Funds as indicated below:
<TABLE>
<S> <C>
The Cash Reserve Money Market Fund................................... 0.200%
The Short-Term Treasury Income Fund.................................. 0.300%
The Intermediate Bond Income Fund.................................... 0.400%
The Bond Income Fund................................................. 0.400%
The Stock Appreciation Fund.......................................... 0.650%
The Aggressive Stock Appreciation Fund............................... 0.745%
The Value Stock Appreciation Fund.................................... 0.650%
</TABLE>
For the year ended June 30, 1996, BANK IV and AMR were entitled to and
voluntarily waived investment advisory fees as indicated below:
<TABLE>
<CAPTION>
BANK IV AMR
------------------- -------------------
ENTITLED WAIVED ENTITLED WAIVED
---------- ------ -------- --------
<S> <C> <C> <C> <C>
The Cash Reserve Money Market Fund.......... -- -- $583,627 --
The Short-Term Treasury Income Fund......... $ 49,468 $6,940 -- --
The Intermediate Bond Income Fund........... 509,227 -- -- --
The Bond Income Fund........................ 104,808 -- -- --
The Stock Appreciation Fund................. 1,002,771 -- -- --
The Aggressive Stock Appreciation Fund...... 408,019 -- -- --
The Value Stock Appreciation Fund........... 162,817 -- -- --
</TABLE>
32
<PAGE> 44
FUNDS IV TRUST
Notes to Financial Statements (continued)
June 30, 1996
4. ADMINISTRATOR
Furman Selz LLC, formerly Furman Selz Incorporated ("Furman Selz") serves
as the Trust's Administrator. Pursuant to a Administrative Services Contract
between the Trust and Furman Selz, Furman Selz provides management and
administrative services for the operation of the Funds, furnishes office space
and certain facilities required for conducting the business of the Funds and
pays the compensation of the Trust's officers affiliated with Furman Selz.
As compensation for its administrative services, Furman Selz receives a
monthly fee at an annual rate of 0.15% of each Fund's average daily net assets.
For the year ended June 30, 1996, Furman Selz was entitled to and
voluntarily waived administrative services fees as indicated below:
<TABLE>
<CAPTION>
FURMAN SELZ
------------------
ENTITLED WAIVED
-------- -------
<S> <C> <C>
The Cash Reserve Money Market Fund........................ $437,690 --
The Short-Term Treasury Income Fund....................... 24,734 $21,014
The Intermediate Bond Income Fund......................... 190,960 --
The Bond Income Fund...................................... 39,303 9,440
The Stock Appreciation Fund............................... 231,408 --
The Aggressive Stock Appreciation Fund.................... 82,152 --
The Value Stock Appreciation Fund......................... 37,573 14,244
</TABLE>
In addition, Furman Selz also provides fund accounting services for the
Funds pursuant to a Fund Accounting Agreement between the Trust and Furman Selz.
As compensation for its accounting services, Furman Selz receives from each Fund
an annual fee of $30,000 plus out-of-pocket expenses.
5. SERVICE ORGANIZATIONS
The Trust contracts with banks, trust companies, brokers-dealers, or other
financial organizations ("Service Organizations") to provide certain
administrative services for the Funds. Such services, may include, among other
things: (i) maintaining shareholder accounts and records; (ii) processing
purchase and redemption transactions; (iii) providing periodic statements
showing a shareholder's account balance; and (iv) furnishing periodic and annual
statements, annual reports, prospectuses, and other communications from the
Funds to shareholders.
Each Service Organization has agreed to transmit a schedule to its clients
of any additional fees or conditions that may be applicable to the investment of
the Funds' shares.
For the services provided, the Funds may pay fees to Service Organizations
at an annual rate of up to 0.05% of the average daily net asset value of the
Funds' Service Class shares owned by shareholders with whom the Service
Organization has a servicing relationship. The Premium Class shares may bear an
additional shareholder servicing charge of up to 0.50%, annually, of the average
daily net assets. For the year ended June 30, 1996, the Funds incurred
shareholder servicing fees of 0.05% and BANK IV earned all of the shareholder
servicing fees shown in the statement of operations.
33
<PAGE> 45
FUNDS IV TRUST
Notes to Financial Statements (continued)
June 30, 1996
6. OTHER TRANSACTIONS WITH AFFILIATES
The Trust retains FFD to serve as principal underwriter for the shares of
the Funds pursuant to a Distribution Contract. FFD will use its best efforts to
maintain a broad distribution of the Funds' shares among bona fide investors and
may enter into selling group agreements with responsible dealers as well as sell
the Funds' shares to individual investors.
Pursuant to a Services Agreement between the Trust and Furman Selz, Furman
Selz acts as transfer agent for the Funds and assists the Trust with certain
transfer and dividend disbursing agent functions. For these transfer agent
services, Furman Selz receives a fee of $15 per account per year plus
out-of-pocket expenses.
For the year ended June 30, 1996, Furman Selz earned transfer agent fees as
indicated below:
<TABLE>
<S> <C>
The Cash Reserve Money Market Fund................................. $ 404
The Short-Term Treasury Income Fund................................ 2,604
The Intermediate Bond Income Fund.................................. 10,965
The Bond Income Fund............................................... 2,928
The Stock Appreciation Fund........................................ 11,394
The Aggressive Stock Appreciation Fund............................. 8,625
The Value Stock Appreciation Fund.................................. 2,698
</TABLE>
BANK IV served as the Trust's custodian and received a monthly fee at an
annual rate of 0.03% of each Fund's average daily net assets. For the year ended
June 30, 1996, BANK IV earned the custodian fees shown in the statement of
operations.
Effective July 1, 1996, the Trust will retain Boatmen's Trust Company to
serve as custodian for the Funds and receives a monthly fee at an annual rate of
0.03% of each Fund's average daily net assets.
7. PORTFOLIO SECURITY TRANSACTIONS
The cost of securities purchased ("purchases") and proceeds from securities
sold ("sales"), (excluding short-term securities) for the year ended June 30,
1996 were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT
COMMON STOCKS AND BONDS OBLIGATIONS
--------------------------- -------------------------
PURCHASES SALES PURCHASES SALES
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
The Short-Term Treasury Income Fund........ -- -- $11,571,477 $12,178,586
The Intermediate Bond Income Fund.......... $ 40,400,740 $ 66,668,979 93,736,430 75,397,745
The Bond Income Fund....................... 3,520,508 4,975,875 39,587,883 17,083,500
The Stock Appreciation Fund................ 134,631,612 137,328,286 -- --
The Aggressive Stock Appreciation Fund..... 43,004,186 38,882,670 -- --
The Value Stock Appreciation Fund.......... 16,176,871 10,417,280 -- --
</TABLE>
34
<PAGE> 46
FUNDS IV TRUST
Notes to Financial Statements (continued)
June 30, 1996
Unrealized appreciation (depreciation) at June 30, 1996 based on cost of
securities for Federal income tax purposes is as follows:
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
AGGREGATE UNREALIZED UNREALIZED APPRECIATION
COST APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ -------------- --------------
<S> <C> <C> <C> <C>
The Short-Term Treasury Income Fund...... $ 14,281,115 $ 128,469 $ 55,220 $ 73,249
The Intermediate Bond Income Fund........ 115,434,903 1,125,569 697,593 427,976
The Bond Income Fund..................... 34,155,302 240,518 464,841 (224,323)
The Stock Appreciation Fund.............. 152,891,254 20,874,198 2,419,041 18,455,157
The Aggressive Stock Appreciation Fund... 47,709,443 11,672,325 1,018,752 10,653,573
The Value Stock Appreciation Fund........ 23,996,231 3,940,972 309,358 3,631,614
</TABLE>
8. CAPITAL SHARE TRANSACTIONS
The Trust is authorized to issue an unlimited number of shares of
beneficial interest with a par value of $0.001 each. Transactions in shares of
beneficial interest of the Funds for the year ended June 30, 1996 and the period
ended June 30, 1995 were as follows:
<TABLE>
<CAPTION>
THE CASH RESERVE MONEY MARKET FUND*
-----------------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995
---------------------- ----------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
------------ ------- ------------ -------
<S> <C> <C> <C> <C>
Shares sold..................................... 484,875,763 -- 504,606,671 --
Shares issued in reinvestment of
distributions................................. 11,616 319 7,113 263
------------ ------- ------------ -------
484,887,379 319 504,613,784 263
Shares redeemed................................. (472,059,935) -- (229,956,257) --
------------ ------- ------------ -------
Net increase in shares.......................... 12,827,444 319 274,657,527 263
Beginning of period............................. 274,663,143 5,878 5,616 5,615
------------ ------- ------------ -------
End of period................................... 287,490,587 6,197 274,663,143 5,878
=========== ======= =========== =======
</TABLE>
35
<PAGE> 47
FUNDS IV TRUST
Notes to Financial Statements (continued)
June 30, 1996
<TABLE>
<CAPTION>
THE SHORT-TERM TREASURY INCOME FUND**
-----------------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995
---------------------- ----------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
------------ ------- ------------ -------
<S> <C> <C> <C> <C>
Shares sold..................................... 479,234 -- 1,909,207 --
Shares issued in reinvestment of
distributions................................. 70,800 33 53,737 28
------------ ------- ------------ -------
550,034 33 1,962,944 28
Shares redeemed................................. (613,305) -- (465,936) --
------------ ------- ------------ -------
Net increase (decrease) in shares............... (63,271) 33 1,497,008 28
Beginning of period............................. 1,497,570 589 562 561
------------ ------- ------------ -------
End of period................................... 1,434,299 622 1,497,570 589
=========== ======= =========== =======
</TABLE>
<TABLE>
<CAPTION>
THE INTERMEDIATE BOND INCOME FUND**
----------------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995
--------------------- ----------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
----------- ------- ------------ -------
<S> <C> <C> <C> <C>
Shares sold...................................... 2,888,999 -- 15,236,808 --
Shares issued in reinvestment of distributions... 665,331 35 589,850 30
----------- ------- ------------ -------
3,554,330 35 15,826,658 30
Shares redeemed.................................. (4,534,280) -- (3,141,325) --
----------- ------- ------------ -------
Net increase (decrease) in shares................ (979,950) 35 12,685,333 30
Beginning of period.............................. 12,685,895 591 562 561
----------- ------- ------------ -------
End of period.................................... 11,705,945 626 12,685,895 591
========== ======= =========== =======
</TABLE>
<TABLE>
<CAPTION>
THE BOND INCOME FUND**
----------------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995
--------------------- ----------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
----------- ------- ------------ -------
<S> <C> <C> <C> <C>
Shares sold...................................... 2,304,355 -- 1,872,843 --
Shares issued in reinvestment of distributions... 115,828 33 76,453 30
----------- ------- ------------ -------
2,420,183 33 1,949,296 30
Shares redeemed.................................. (313,914) -- (696,007) --
----------- ------- ------------ -------
Net increase in shares........................... 2,106,269 33 1,253,289 30
Beginning of period.............................. 1,253,851 591 562 561
----------- ------- ------------ -------
End of period.................................... 3,360,120 624 1,253,851 591
========== ======= =========== =======
</TABLE>
36
<PAGE> 48
FUNDS IV TRUST
Notes to Financial Statements (continued)
June 30, 1996
<TABLE>
<CAPTION>
THE STOCK APPRECIATION FUND**
----------------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995
--------------------- ----------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
----------- ------- ------------ -------
<S> <C> <C> <C> <C>
Shares sold...................................... 3,290,334 -- 14,137,595 --
Shares issued in reinvestment of distributions... 212,422 10 174,961 9
----------- ------- ------------ -------
3,502,756 10 14,312,556 9
Shares redeemed.................................. (2,668,451) -- (2,437,423) --
----------- ------- ------------ -------
Net increase in shares........................... 834,305 10 11,875,133 9
Beginning of period.............................. 11,875,695 570 562 561
----------- ------- ------------ -------
End of period.................................... 12,710,000 580 11,875,695 570
========== ======= =========== =======
</TABLE>
<TABLE>
<CAPTION>
THE AGGRESSIVE STOCK APPRECIATION FUND**
----------------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995
--------------------- ----------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
----------- ------- ------------ -------
<S> <C> <C> <C> <C>
Shares sold...................................... 1,646,272 -- 5,220,643 --
Shares issued in reinvestment of distributions... 70,791 9 41,285 6
----------- ------- ------------ -------
1,717,063 9 5,261,928 6
Shares redeemed.................................. (1,207,877) -- (1,197,549) --
----------- ------- ------------ -------
Net increase in shares........................... 509,186 9 4,064,379 6
Beginning of period.............................. 4,064,941 567 562 561
----------- ------- ------------ -------
End of period.................................... 4,574,127 576 4,064,941 567
========== ======= =========== =======
</TABLE>
<TABLE>
<CAPTION>
THE VALUE STOCK APPRECIATION FUND***
----------------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995
--------------------- ----------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
----------- ------- ------------ -------
<S> <C> <C> <C> <C>
Shares sold...................................... 728,238 -- 1,978,935 --
Shares issued in reinvestment of distributions... 70,380 -- 16,932 --
----------- ------- ------------ -------
798,618 -- 1,995,867 --
Shares redeemed.................................. (535,744) -- (103,384) --
----------- ------- ------------ -------
Net increase in shares........................... 262,874 -- 1,892,483 --
Beginning of period.............................. 1,892,489 6 6 6
----------- ------- ------------ -------
End of period.................................... 2,155,363 6 1,892,489 6
========== ======= =========== =======
- ---------------
* Fund commenced operations on August 19, 1994.
** Fund commenced operations on August 26, 1994.
*** Fund commenced operations on February 10, 1995.
</TABLE>
37
<PAGE> 49
FUNDS IV TRUST
Notes to Financial Statements (continued)
June 30, 1996
9. FEDERAL INCOME TAX STATUS
During the year ended June 30, 1996, The Intermediate Bond Income Fund, The
Stock Appreciation Fund and The Aggressive Stock Appreciation Fund utilized
available capital loss carryover of $62,000, $410,000 and $214,000,
respectively.
38
<PAGE> 50
FUNDS IV TRUST
Financial Highlights
For a share of beneficial interest outstanding throughout each period
<TABLE>
<CAPTION>
THE CASH RESERVE MONEY MARKET FUND
------------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995*
------------------- -------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------ -------- ------
Income from Investment Operations:
Net investment income............................... 0.05 0.05 0.05 0.05
-------- ------ -------- ------
Less Distributions:
Dividends from net investment income................ (0.05) (0.05) (0.05) (0.05)
-------- ------ -------- ------
Net Asset Value, End of Period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ====== ======== ======
Total Return**........................................ 5.47% 5.47% 4.74% 4.74%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands)............ $287,491 $6 $274,663 $6
Ratios of Expenses to Average Net Assets............ 0.50% 0.50% 0.50%+ 0.50%+
Ratios of Expenses Before Effect of Waivers to
Average Net Assets............................... 0.50% 1.00% 0.54%+ 1.04%+
Ratios of Net Investment Income to Average Net
Assets........................................... 5.34% 5.34% 5.40%+ 5.40%+
- ---------------
* Fund commenced operations on August 19, 1994.
** Total return not annualized.
+ Annualized.
</TABLE>
See accompanying notes to financial statements.
39
<PAGE> 51
FUNDS IV TRUST
Financial Highlights (continued)
For a share of beneficial interest outstanding throughout each period
<TABLE>
<CAPTION>
THE SHORT-TERM TREASURY INCOME FUND
----------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995*
------------------ ------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................... $ 10.20 $10.20 $ 10.00 $10.00
------- ------ ------- ------
Income from Investment Operations:
Net investment income................................. 0.56 0.56 0.47 0.47
Net gain (loss) on investments (both realized and
unrealized)........................................ (0.11) (0.11) 0.20 0.20
------- ------ ------- ------
Total from Investment Operations...................... 0.45 0.45 0.67 0.67
------- ------ ------- ------
Less Distributions:
Dividends from net investment income.................. (0.56) (0.56) (0.47) (0.47)
Distributions from net realized gain on investments... (0.01) (0.01) -- --
------- ------ ------- ------
Total Distributions................................... (0.57) (0.57) (0.47) (0.47)
------- ------ ------- ------
Net Asset Value, End of Period.......................... $ 10.08 $10.08 $ 10.20 $10.20
======= ====== ======= ======
Total Return**.......................................... 4.45% 4.45% 6.95% 6.95%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands).............. $14,454 $6 $15,272 $6
Ratios of Expenses to Average Net Assets.............. 0.77% 0.77% 0.75%+ 0.75%+
Ratios of Expenses Before Effect of Waivers to Average
Net Assets......................................... 0.94% 1.44% 1.04%+ 1.54%+
Ratios of Net Investment Income to Average Net
Assets............................................. 5.47% 5.47% 5.65%+ 5.65%+
Portfolio Turnover Rate............................... 72.32% 72.32% 83.28% 83.28%
- ---------------
* Fund commenced operations on August 26, 1994.
** Total return not annualized.
+ Annualized.
</TABLE>
See accompanying notes to financial statements.
40
<PAGE> 52
FUNDS IV TRUST
Financial Highlights (continued)
For a share of beneficial interest outstanding throughout each period
<TABLE>
<CAPTION>
THE INTERMEDIATE BOND INCOME FUND
------------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995*
------------------- -------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $ 10.19 $10.19 $ 10.00 $10.00
-------- ------ -------- ------
Income from Investment Operations:
Net investment income................................ 0.59 0.59 0.51 0.51
Net gain (loss) on investments (both realized and
unrealized)....................................... (0.16) (0.16) 0.19 0.19
-------- ------ -------- ------
Total from Investment Operations..................... 0.43 0.43 0.70 0.70
-------- ------ -------- ------
Less Distributions:
Dividends from net investment income................. (0.59) (0.59) (0.51) (0.51)
-------- ------ -------- ------
Net Asset Value, End of Period......................... $ 10.03 $10.03 $ 10.19 $10.19
======== ====== ======== ======
Total Return**......................................... 4.29% 4.29% 7.26% 7.26%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands)............. $117,370 $6 $129,317 $6
Ratios of Expenses to Average Net Assets............. 0.75% 0.75% 0.75%+ 0.75%+
Ratios of Expenses Before Effect of Waivers to
Average Net Assets................................ 0.75% 1.25% 0.77%+ 1.27%+
Ratios of Net Investment Income to Average
Net Assets ....................................... 5.80% 5.80% 6.10%+ 6.10%+
Portfolio Turnover Rate.............................. 108.61% 108.61% 107.54% 107.54%
- ---------------
* Fund commenced operations on August 26, 1994.
** Total return not annualized.
+ Annualized.
</TABLE>
See accompanying notes to financial statements.
41
<PAGE> 53
FUNDS IV TRUST
Financial Highlights (continued)
For a share of beneficial interest outstanding throughout each period
<TABLE>
<CAPTION>
THE BOND INCOME FUND
----------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995*
------------------ ------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................... $ 10.35 $10.35 $ 10.00 $10.00
------- ------ ------- ------
Income from Investment Operations:
Net investment income................................. 0.56 0.56 0.52 0.52
Net gain (loss) on investments (both realized and
unrealized)........................................ (0.13) (0.13) 0.35 0.35
------- ------ ------- ------
Total from Investment Operations...................... 0.43 0.43 0.87 0.87
------- ------ ------- ------
Less Distributions:
Dividends from net investment income.................. (0.56) (0.56) (0.52) (0.52)
------- ------ ------- ------
Net Asset Value, End of Period.......................... $ 10.22 $10.22 $ 10.35 $10.35
======= ====== ======= ======
Total Return**.......................................... 4.22% 4.22% 9.05% 9.05%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands).............. $34,336 $6 $12,977 $6
Ratios of Expenses to Average Net Assets.............. 0.90% 0.90% 0.96%+ 0.96%+
Ratios of Expenses Before Effect of Waivers to Average
Net Assets......................................... 0.94% 1.44% 1.11%+ 1.61%+
Ratios of Net Investment Income to Average
Net Assets ........................................ 5.35% 5.35% 6.21%+ 6.21%+
Portfolio Turnover Rate............................... 88.56% 88.56% 149.36% 149.36%
- ---------------
* Fund commenced operations on August 26, 1994.
** Total return not annualized.
+ Annualized.
</TABLE>
See accompanying notes to financial statements.
42
<PAGE> 54
FUNDS IV TRUST
Financial Highlights (continued)
For a share of beneficial interest outstanding throughout each period
<TABLE>
<CAPTION>
THE STOCK APPRECIATION FUND
------------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995*
------------------- -------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................. $ 11.05 $11.05 $ 10.00 $10.00
-------- ------ -------- ------
Income from Investment Operations:
Net investment income............................... 0.16 0.16 0.16 0.16
Net gain on investments (both realized and
unrealized)...................................... 2.20 2.20 1.05 1.05
-------- ------ -------- ------
Total from Investment Operations.................... 2.36 2.36 1.21 1.21
-------- ------ -------- ------
Less Distributions:
Dividends from net investment income................ (0.16) (0.16) (0.16) (0.16)
Distributions from net realized gain on
investments...................................... (0.06) (0.06) -- --
-------- ------ -------- ------
Total Distributions................................. (0.22) (0.22) (0.16) (0.16)
-------- ------ -------- ------
Net Asset Value, End of Period........................ $ 13.19 $13.19 $ 11.05 $11.05
======== ====== ======== ======
Total Return**........................................ 21.50% 21.50% 12.19% 12.19%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands)............ $167,665 $8 $131,239 $6
Ratios of Expenses to Average Net Assets............ 0.98% 0.98% 1.00%+ 1.00%+
Ratios of Expenses Before Effect of Waivers to
Average Net Assets............................... 0.98% 1.48% 1.02%+ 1.52%+
Ratios of Net Investment Income to Average
Net Assets....................................... 1.33% 1.33% 1.89%+ 1.89%+
Portfolio Turnover Rate............................. 91.58% 91.58% 46.37% 46.37%
Average Commission Rate++........................... $0.0512 $0.0512 -- --
- ---------------
* Fund commenced operations on August 26, 1994.
** Total return not annualized.
+ Annualized.
++ For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its
average commission rate per share for security trades on which commissions are charged. This
amount may vary from period to period and fund to fund depending on the mix of trades executed
in various markets where trading practices and commission rate structures may differ.
</TABLE>
See accompanying notes to financial statements.
43
<PAGE> 55
FUNDS IV TRUST
Financial Highlights (continued)
For a share of beneficial interest outstanding throughout each period
<TABLE>
<CAPTION>
THE AGGRESSIVE STOCK APPRECIATION FUND
----------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995*
------------------ ------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................... $ 10.87 $10.87 $ 10.00 $10.00
------ ------ ------ ------
Income from Investment Operations:
Net investment income................................. 0.04 0.04 0.10 0.10
Net gain on investments (both realized and
unrealized)........................................ 2.06 2.06 0.87 0.87
------ ------ ------ ------
Total from Investment Operations...................... 2.10 2.10 0.97 0.97
------ ------ ------ ------
Less Distributions:
Dividends from net investment income.................. (0.03) (0.03) (0.10) (0.10)
Distributions from net realized gain on investments... (0.15) (0.15) -- --
------ ------ ------ ------
Total Distributions................................... (0.18) (0.18) (0.10) (0.10)
------ ------ ------ ------
Net Asset Value, End of Period.......................... $ 12.79 $12.79 $ 10.87 $10.87
====== ====== ====== ======
Total Return**.......................................... 19.54% 19.54% 9.81% 9.81%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands).............. $58,501 $7 $44,205 $6
Ratios of Expenses to Average Net Assets.............. 1.14% 1.14% 1.23%+ 1.23%+
Ratios of Expenses Before Effect of Waivers to Average
Net Assets......................................... 1.14% 1.64% 1.23%+ 1.73%+
Ratios of Net Investment Income to Average
Net Assets......................................... 0.30% 0.30% 1.27%+ 1.27%+
Portfolio Turnover Rate............................... 73.75% 73.75% 72.11% 72.11%
Average Commission Rate++............................. $0.0518 $0.0518 -- --
- ---------------
* Fund commenced operations on August 26, 1994.
** Total return not annualized.
+ Annualized.
++ For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its
average commission rate per share for security trades on which commissions are charged. This
amount may vary from period to period and fund to fund depending on the mix of trades executed
in various markets where trading practices and commission rate structures may differ.
</TABLE>
See accompanying notes to financial statements.
44
<PAGE> 56
FUNDS IV TRUST
Financial Highlights (continued)
For a share of beneficial interest outstanding throughout each period
<TABLE>
<CAPTION>
THE VALUE STOCK APPRECIATION FUND
----------------------------------------
YEAR ENDED PERIOD ENDED
JUNE 30, 1996 JUNE 30, 1995*
------------------ ------------------
SERVICE PREMIUM SERVICE PREMIUM
CLASS CLASS CLASS CLASS
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.................... $ 10.93 $10.93 $ 10.00 $10.00
------- ------ ------- ------
Income from Investment Operations:
Net investment income................................. 0.25 0.25 0.10 0.10
Net gain on investments (both realized and
unrealized)........................................ 2.01 2.01 0.93 0.93
------- ------ ------- ------
Total from Investment Operations...................... 2.26 2.26 1.03 1.03
------- ------ ------- ------
Less Distributions:
Dividends from net investment income.................. (0.24) (0.24) (0.10) (0.10)
Distributions from net realized gain on investments... (0.18) (0.18) -- --
------- ------ ------- ------
Total Distributions................................... (0.42) (0.42) (0.10) (0.10)
------- ------ ------- ------
Net Asset Value, End of Period.......................... $ 12.77 $12.77 $ 10.93 $10.93
======= ====== ======= ======
Total Return**.......................................... 20.91% 20.91% 10.32% 10.32%
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands).............. $27,529 -- $20,690 --
Ratios of Expenses to Average Net Assets.............. 1.12% 1.12% 1.18%+ 1.18%+
Ratios of Expenses Before Effect of Waivers to Average
Net Assets......................................... 1.18% 1.68% 1.33%+ 1.83%+
Ratios of Net Investment Income to Average
Net Assets ........................................ 2.06% 2.06% 2.52%+ 2.52%+
Portfolio Turnover Rate............................... 46.16% 46.16% 16.74% 16.74%
Average Commission Rate++............................. $0.0621 $0.0621 -- --
- ---------------
* Fund commenced operations on February 10, 1995.
** Total return not annualized.
+ Annualized.
++ For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its
average commission rate per share for security trades on which commissions are charged. This
amount may vary from period to period and fund to fund depending on the mix of trades executed
in various markets where trading practices and commission rate structures may differ.
</TABLE>
See accompanying notes to financial statements.
45
<PAGE> 57
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and
Shareholders of FUNDS IV Trust
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations, of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of The Cash Reserve
Money Market Fund, The Short-Term Treasury Income Fund, The Intermediate Bond
Income Fund, The Bond Income Fund, The Stock Appreciation Fund, The Aggressive
Stock Appreciation Fund, and The Value Stock Appreciation Fund (seven of the
portfolios constituting FUNDS IV Trust, hereafter referred to as the "Trust") at
June 30, 1996, and the results of each of their operations, the changes in each
of their net assets and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at June
30, 1996 by correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
August 19, 1996
<PAGE> 58
TAX STATUS OF DIVIDENDS PAID (UNAUDITED)
The following table represents the tax status of distributions and
dividends paid by the Funds during the fiscal year ended June 30, 1996. Certain
portions of this information were previously reported to you on Form 1099 at the
close of calendar year 1995. This information is presented in order to comply
with regulatory requirements and requires no current action on your part.
<TABLE>
<CAPTION>
LONG TERM SHORT TERM
CAPITAL GAINS CAPITAL GAINS INCOME % OF INCOME
DISTRIBUTIONS DISTRIBUTIONS DIVIDENDS DERIVED FROM
PAID PAID PAID GOVERNMENT
PER SHARE PER SHARE PER SHARE SECURITIES
------------- ------------- ------------- ------------
<S> <C> <C> <C> <C>
The Cash Reserve Money Market Fund......... -- -- $ 0.053 --
The Short-Term Treasury Income Fund........ -- $ 0.008 0.558 99.0%
The Intermediate Bond Income Fund.......... -- -- 0.591 49.4
The Bond Income Fund....................... -- -- 0.563 72.3
The Stock Appreciation Fund................ $ 0.049 0.012 0.161 1.3
The Aggressive Stock Appreciation Fund..... 0.090 0.059 0.034 0.8
The Value Stock Appreciation Fund.......... -- 0.176 0.242 7.2
</TABLE>
Additionally, 100% of the income dividends paid by The Stock Appreciation
Fund, The Aggressive Stock Appreciation Fund, and The Value Stock Appreciation
Fund qualify for the dividends received deduction available to corporations.
<PAGE> 59
FUNDS IV TRUST
BOARD OF TRUSTEES
<TABLE>
<S> <C>
JOHN J. PILEGGI+ CHAIRMAN OF THE BOARD
Senior Managing Director, Furman Selz LLC
G.L. BEST* Vice President of Finance and Administration,
Williams Energy Ventures
TERRY L. CARTER* Senior Vice President, QuikTrip Corporation
ARTHUR B. KRAUSE Executive Vice President and Chief Financial Officer,
Sprint Corporation
GEORGE MILEUSNIC* Chief Financial Officer, The Coleman Company, Inc.
PATRICK J. RYAN* Vice Chairman, Oklahoma Gas and Electric Company
</TABLE>
* Member of Audit and Nominating Committees
+ Trustee who is an "interested person" of
the Trust, as that term is defined in the
Investment Company Act of 1940.
- --------------------------------------------------------------------------------
OFFICERS
<TABLE>
<S> <C>
JOHN J. PILEGGI President
DONALD E. BROSTROM Vice President and Treasurer
JOAN V. FIORE Secretary
THERESA DONOVAN Assistant Secretary
SHERYL HIRSCHFELD Assistant Secretary
</TABLE>
<PAGE> 60
FUNDS IV
Address for:
TRUST CLIENTS OF BANK IV
P.O. Box 1122
Wichita, KS 67201-1122
INVESTMENT ADVISERS
BANK IV, N.A.
100 North Broadway
Wichita, Kansas 67202
AMR Investment Services, Inc.
4333 Amon Carter Blvd., MD 5645
Fort Worth, Texas 76155
(Cash Reserve Money Market Fund Only)
ADMINISTRATOR AND TRANSFER AGENT
Furman Selz LLC
230 Park Avenue
New York, New York 10169
DISTRIBUTOR
FUNDS IV Distributor, Inc.
230 Park Avenue
New York, New York 10169
CUSTODIAN
Boatmen's Trust Company
100 North Broadway
St. Louis, Missouri 63102
COUNSEL
Baker & McKenzie
805 Third Avenue
New York, New York 10022
INDEPENDENT ACCOUNTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
This report is for the information of the shareholders of the FUNDS IV Trust
Family of Mutual Funds. Its use in connection with any offering of the Trust's
shares is authorized only in case of a concurrent or prior delivery of the
Trust's current prospectus.
FUNDS IV
FUNDS IV Trust
A Family of Mutual Funds
ANNUAL REPORT
June 30, 1996
Investment Advisers
BANK IV, N.A.
AMR INVESTMENT SERVICES, INC.
(Cash Reserve Money Market Fund Only)
FUNDS IV Distributor, Inc. is not a bank, and shares of FUNDS IV Trust are not
deposits or obligations of, or endorsed or guaranteed by, BANK IV, N.A. or its
affiliates, nor are they federally insured by the Federal Deposit Insurance
Corporation ("FDIC"), the Federal Reserve Board or any other agency. Shares of
the Funds involve investment risk including possible loss of principal. There is
no assurance that The Cash Reserve Money Market Fund will be able to maintain a
stable net asset value of $1.00 per share.
