UAM FUNDS TRUST, N-30D, 1997-06-26

UAM FUNDS TRUST
N-30D, 1997-06-26

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<PAGE>

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UAM FUNDS
BHM&S TOTAL RETURN BOND PORTFOLIO

- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES

Norton H. Reamer Michael E. DeFao
Trustee, President Secretary
and Chairman
Karl O. Hartmann
John T. Bennett, Jr. Assistant Secretary
Trustee
Gary L. French
Philip D. English Treasurer
Trustee
Robert R. Flaherty
William A. Humenuk Assistant Treasurer
Trustee
Gordon M. Shone
Peter M. Whitman, Jr. Assistant Treasurer
Trustee

William H. Park
Vice President
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Barrow, Hanley, Mewhinney & Strauss, Inc.
3232 McKinney Avenue, 15th Floor
Dallas, TX 75204
- -------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.

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[LOGO OF UAM FUNDS APPEARS HERE]

BHM&S TOTAL
RETURN BOND
PORTFOLIO

- -------------------------------------------------------------------------------

ANNUAL REPORT
APRIL 30, 1997
<PAGE>

Dear Shareholders:

Over the last fiscal year ended April 30 interest rates have changed following
different perceptions of economic growth. Initially the long Treasury bond
moved to higher rates on concerns of an economy that was growing too fast so
as to increase inflation. The peak in rates occurred on June 12, 1996 at
7.20%. The fall of 1996 saw signs of a slowing economy with renewed evidence
that inflation was not a problem. Accordingly the long Treasury bond moved to
lower rates with a low of 6.36% on December 3.

The new year witnessed concern about economic strength leading to modest wage
rate increases. Finally, the Federal Reserve moved on March 25 to raise the
Federal Funds rate 25 basis points to 5.5%. Investors are concerned about
future Federal Reserve action on further rate hikes, but the market's
increased rates may already be slowing the economy as recent economic reports
indicate. The fiscal year ended with long Treasury bond rates little changed
at 6.95%. The following table reviews Treasury rates from short term to the
long bond.

TREASURY INTEREST RATES

<TABLE>
<CAPTION>
TREASURY 4/30/96 4/30/97 CHANGE
-------- ------- ------- ------
<S> <C> <C> <C>
3 Month 5.15 5.24 0.09
6 Month 5.30 5.52 0.22
1 Year 5.61 5.89 0.28
3 Year 6.18 6.40 0.22
5 Year 6.41 6.57 0.16
10 Year 6.67 6.71 0.04
30 Year 6.90 6.95 0.05
</TABLE>
Source: Bloomberg

The consensus outlook for the balance of 1997 remains concerned about the rate
of economic growth and a gradual uptick in wage/inflation pressures. The
market traded down in price, anticipating a move by the Federal Reserve in
coming months as Chairman Greenspan has recently expressed concern about
pressures beginning to build in labor markets. Most, however, expect rates to
remain in the fairly narrow range that has prevailed now for months as
inflation remains remarkably subdued for the sixth year in a row.

This market environment--range bound interest rates--benefits our investment
management style. We are a "bottom-up, rate neutral, value manager" focused
not on market timing but on security and sector selection. This process seeks
to produce a yield in the portfolio higher than the market benchmark and a
portfolio of undervalued securities that will outperform the market regardless
of the change in interest rates. Our focus, therefore, is on the so-called
"spread sectors"--corporates, mortgages, and asset-backed securities that
offer higher yields and price appreciation potential. This strategy has proved
rewarding. Corporates outperformed Treasuries consistently with very few
surprises. Likewise, asset-backed securities performed extraordinarily well
despite delinquency concerns and increased supply. Finally, mortgages were a
real standout; reduced prepay fears, declining volatility, and strong demand
were all factors in their strong showing. At April 30, 1997, the 30 day SEC
yield for the Institutional Class shares was 6.69% and the 30 day SEC yield
for the Institutional Service Class shares was 6.44%.

1
<PAGE>

Other current Portfolio characteristics are as follows:

<TABLE>
<CAPTION>
4/30/97 4/30/97
BHM&S LEHMAN
TOTAL RETURN AGGREGATE
BOND BOND
PORTFOLIO INDEX
------------ ---------
<S> <C> <C>
Superior Returns
Yield to Maturity 7.1% 7.0%
Below Average Volatility
Current Yield 7.3% 7.1%
Quality AA+ AAA
Average Maturity 8.2 Yrs. 8.8 Yrs.
Modified Duration 5.2 Yrs. 5.2 Yrs.
Sectors*
U.S. Treasury 30.4% 50.7%
Mortgage-Backed 30.1% 30.2%
Asset-Backed 5.0% 0.9%
Industrial 15.2% 6.4%
Utility 2.1% 3.1%
Finance 13.7% 5.3%
Yankee 0.0% 3.4%
Cash 2.1% N/A
</TABLE>
* Sector percentages are based on net assets.

BHM&S TOTAL RETURN BOND PORTFOLIO INVESTMENT STRATEGIES

. CORPORATES: INCREMENTAL RETURNS CAN BE ACHIEVED THROUGH ANTICIPATING QUALITY
IMPROVEMENT NARROWING YIELD SPREADS TO TREASURIES. Corporates outperformed
Treasuries consistently. The ongoing demand for yield and investment grade
securities, together with improving quality of earnings, balance sheets, and
equity markets, gave corporate bonds good performance. However, with spreads
quite narrow, a more focused credit strategy is required for achieving
better returns.

The strength of our credit research effort was rewarded during the last year
as we owned seven credit-related securities whose ratings were upgraded
during the year while none were downgraded. Corporate names that were
upgraded include Chase, Chrysler, Dresser, NationsBank, Sears, Tenneco, and
Travelers. Our activity in the "Baa/BBB" sector contributed to our value
added results, specifically Tenneco, which on the strengths of their
corporate restructuring and desire to lower the cost of borrowings, cash
tendered for securities we owned at a yield spread over Treasuries of only 10
basis points.

. MORTGAGES: EMPIRICAL DURATION MEASURES CONTINUE TO PROVIDE A MORE ACCURATE
TRACKING OF PRICE MOVEMENT FOR MORTGAGES. This sector produced the best
results of the year! Strong supply/demand technicals coupled with
fundamentals led us to favor mortgage securities. Despite the absence of
historically strong demand by insurance companies (S&P's convexity test for
capital adequacy fueled the shift in asset allocation away from the sector)
total return buyers filled the void. Our decision to overweight the sector,
supported by our use of empirical durations, contributed to our performance
for the year. We ended the year with a market weighting as most of the
"value" has been recognized in the market.

2
<PAGE>

. ASSET-BACKED SECURITIES: DEMAND FOR STABLE, HIGHLY LIQUID TREASURY AND
CORPORATE ALTERNATIVES REMAIN STRONG. Despite rising consumer credit
concerns, asset-backed securities experienced tremendous demand from
investors seeking higher yielding, liquid, AAA-rated securities. Asset-
backed Securities were second in performance only to mortgages for the year.
With virtually the same yield premiums as alternative corporates, demand for
asset-backed bonds was strong throughout the year. Consumer balance sheet
leverage renews our focus on deal structures.

. TREASURY YIELD CURVE: Despite general higher rates over the course of the
year, our strategy of "riding the yield curve" to capture the benefits of
"roll-down," with a portfolio duration marginally shorter than the market,
proved rewarding. With the curve positive +68 basis points for 2-30 year
maturities at year end, the curve was slightly less positive reflecting
Federal Reserve actions. Maturities of 3-4 years, 7-8 years, and 18-20 years
are favored areas of the curve.

INVESTMENT PERFORMANCE

The Portfolio has two separate classes of shares, Institutional Class Shares
("Institutional Shares") and Institutional Service Class Shares ("Service
Shares"). For the twelve months ended April 30, 1997, the performance has
improved for both classes of shares since the October, 1996 Semi-Annual
Report. The total return, encompassing both price change and income, for the
Institutional Shares was 6.75% and the return of the Service Shares was 6.47%,
compared to the Lehman Aggregate Bond Index return of 7.08%. The slight
shortfall in performance for both classes of shares compared to the market
index is explained by fund expenses that are not included in the market
index's return. Beginning with this report, we are now comparing the
Portfolio's performance to the Lehman Aggregate Bond Index rather than the
Salomon Brothers Broad Investment--Grade Bond Index. The Lehman Aggregate Bond
Index is a better benchmark for the type of securities we hold in the
Portfolio.

We are continuing to work diligently on improving the prospects for this
mutual fund. Assets have grown from $5.3 mil. to $17.1 mil. over the last
fiscal year. The Portfolio's NASDAQ ticker symbol is BHMSX. We have held the
Portfolio's expense ratio below Morningstar's average for bond funds. We hope
this review answers your questions regarding the Portfolio's management.

Sincerely,

/s/ John S. Williams, C.F.A.

John S. Williams, C.F.A.
Principal

The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser didn't have temporary fee waivers and didn't assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.

3
<PAGE>

Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
BHM&S TOTAL RETURN BOND PORTFOLIO AND THE
SALOMON BROTHERS BROAD INVESTMENT-GRADE BOND INDEX AND THE
LEHMAN AGGREGATE BOND INDEX

[LINE GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
BHM&S TOTAL RETURN BHM&S TOTAL RETURN SALOMON BROTHERS BROAD LEHMAN AGGREGATE
BOND PORTFOLIO-INSTITUTIONAL BOND PORTFOLIO-INSTITUTIONAL INVESTMENT-GRADE BOND INDEX+ BOND INDEX+
CLASS SHARES SERVICE CLASS SHARES
<S> <C> <C> <C> <C>
11/1/95* 10,000 10,000 10,000 10,000
4/30/96 10,008 9,993 10,017 10,053
4/30/97 10,684 10,640 10,738 10,738
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1997
- --------------------------------------------------------------------------------
1 YEAR SINCE 11/1/95*
- --------------------------------------------------------------------------------
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
CLASS SHARES SERVICE CLASS SHARES CLASS SHARES SERVICE CLASS SHARES
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
6.75% 6.47% 4.51% 4.23%
- --------------------------------------------------------------------------------
</TABLE>

Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.

* Commencement of Operations

** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.

+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees, if
reflected, would reduce the performance quoted. The Portfolio's performance
assumes the reinvestment of all dividends and distributions. The comparative
index has been adjusted to reflect reinvestment of dividends on securities in
the index.

Definition of the Comparative Indices
-------------------------------------
The Salomon Brothers Broad Investment-Grade (BIG) Bond Index is a market-
capitalization weighted index which includes fixed-rate Treasury, government
sponsored, corporate (Baa3/BBB- or better) and mortgage securities. All issues
mature in one year or more and have at least $50 million face amount
outstanding for entry to the BIG Index. Issues exit the Index when their face
amount outstanding drops below $25 million, or they fail the maturity or credit
tests. The exit and entry criteria for mortgage issues is $200 million for each
coupon.

The Lehman Aggregate Bond Index is an unmanaged index made up of the
Government/Corporate Index, the Mortgage-Backed Securities Index and the Asset-
Backed Securities Index.

Please note that one cannot invest in an unmanaged index.

4
<PAGE>

BHM&S TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES (31.0%)
- --------------------------------------------------------------------------------
<S> <C> <C>
BANKS (6.7%)
Chase Manhattan Corp.
8.625%, 05/01/02....................................... $ 400,000 $ 426,716
Chemical NY Corp.
9.75%, 06/15/99........................................ 205,000 217,778
NationsBank Corp. Senior Notes
7.00%, 09/15/01........................................ 500,000 501,320
-----------
1,145,814
- --------------------------------------------------------------------------------
FINANCIAL (7.0%)
Associates Corp. of North America
6.57%, 10/04/99........................................ 200,000 198,920
Chrysler Financial Corp.
6.95%, 03/25/02........................................ 500,000 498,230
Ford Motor Credit Corp.
6.375%, 09/15/99....................................... 200,000 198,714
6.80%, 04/23/01........................................ 300,000 299,016
-----------
1,194,880
- --------------------------------------------------------------------------------
INDUSTRIAL (13.5%)
Atlantic Richfield Co.
8.50%, 04/01/12........................................ 225,000 245,983
Dresser Industries, Inc.
6.25%, 06/01/00........................................ 500,000 492,500
May Department Stores Co.
7.625%, 08/15/13....................................... 350,000 349,366
Millennium America, Inc.
7.00%, 11/15/06........................................ 250,000 239,162
Sears Roebuck Acceptance
7.26%, 04/21/03........................................ 500,000 502,500
Texaco Capital Corp.
6.19%, 07/09/03........................................ 500,000 476,335
-----------
2,305,846
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

5
<PAGE>

BHM&S TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- ---------------------------------------------------------------------------------
CORPORATE BONDS & NOTES--(CONTINUED)
- ---------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION (1.7%)
Federal Express Corp.
9.65%, 06/15/12......................................... $ 250,000 $ 293,440
- ---------------------------------------------------------------------------------
UTILITIES (2.1%)
Southern California Edison Co.
8.25%, 02/01/00......................................... 115,000 118,808
U.S. West Capital Funding, Inc.
6.85%, 01/15/02......................................... 250,000 247,457
-----------
366,265
- ---------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES (COST $5,344,645)........... 5,306,245
- ---------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES (30.4%)
- ---------------------------------------------------------------------------------
U.S. TREASURY BONDS (19.0%)
10.375%, 11/15/12....................................... 700,000 879,704
11.25%, 02/15/15........................................ 455,000 651,078
8.75%, 05/15/17......................................... 1,260,000 1,489,358
8.125%, 08/15/19........................................ 205,000 229,377
-----------
3,249,517
- ---------------------------------------------------------------------------------
U.S. TREASURY NOTE (11.4%)
7.125%, 02/29/00........................................ 1,925,000 1,958,996
- ---------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES (COST $5,245,054)........ 5,208,513
- ---------------------------------------------------------------------------------
AGENCY SECURITIES (30.1%)
- ---------------------------------------------------------------------------------
FEDERAL HOME LOAN MORTGAGE CORP. (17.1%)
Gold Pool #C00436
7.50%, 12/01/25......................................... 2,928,796 2,917,813
- ---------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (9.8%)
Gold Pool #E20271
7.00%, 11/01/11......................................... 434,068 430,131
Pool #349359
7.00%, 06/01/26......................................... 1,293,116 1,252,707
-----------
1,682,838
- ---------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

6
<PAGE>

BHM&S TOTAL RETURN BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- -------------------------------------------------------------------------------
AGENCY SECURITIES--(CONTINUED)
- -------------------------------------------------------------------------------
<S> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (3.2%)
Pool #407633
7.50%, 07/15/25....................................... $ 547,353 $ 543,248
- -------------------------------------------------------------------------------
TOTAL AGENCY SECURITIES (COST $5,135,967)............... 5,143,899
- -------------------------------------------------------------------------------
ASSET-BACKED SECURITIES (5.0%)
- -------------------------------------------------------------------------------
Chase Manhattan Auto Owner Trust
Series 1996-C A3
5.95%, 11/15/03...................................... 150,000 148,875
Chase Manhattan Credit Card Master Trust
Series 1996-4, Class A
6.73%, 02/15/03...................................... 500,000 502,500
NationsBank Auto Owner Trust
Series 1996-A A3
6.375%, 07/15/00..................................... 200,000 200,322
- -------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES (COST $858,742)........... 851,697
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (2.1%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.20%, dated 04/30/97, due
05/01/97, to be repurchased at $358,052,
collateralized by $360,050 of various U.S. Treasury
Notes, 4.75%-6.125%, due from 08/31/98-10/31/98,
valued at $358,288 (COST $358,000).................... 358,000 358,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (98.6%) (COST $16,942,408)(a)......... 16,868,354
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (1.4%)............... 238,606
- -------------------------------------------------------------------------------
NET ASSETS (100%)....................................... $17,106,960
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
(a) The cost for federal income tax purposes was $16,951,433. At April 30,
1997, net unrealized depreciation for all securities based on tax cost was
$83,079. This consisted of aggregate gross unrealized appreciation for all
securities of $26,021 and aggregate gross unrealized depreciation for all
securities of $109,100.

The accompanying notes are an integral part of the financial statements.

7
<PAGE>

BHM&S TOTAL RETURN BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997

<TABLE>
- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at Cost............................................. $16,942,408
===========
Investments, at Value............................................ $16,868,354
Cash............................................................. 767
Interest Receivable.............................................. 246,690
Receivable for Portfolio Shares Sold............................. 57,582
Receivable due from Investment Adviser--Note B................... 21,459
Other Assets..................................................... 60
- -------------------------------------------------------------------------------
Total Assets.................................................... 17,194,912
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Portfolio Shares Redeemed............................ 28,223
Payable for Administrative Fees--Note C.......................... 8,942
Payable for Distribution and Service Fees--Note E................ 3,106
Payable for Account Services Fees--Note F........................ 2,954
Payable for Trustees' Fees--Note G............................... 521
Other Liabilities................................................ 44,206
- -------------------------------------------------------------------------------
Total Liabilities............................................... 87,952
- -------------------------------------------------------------------------------
NET ASSETS........................................................ $17,106,960
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid in Capital.................................................. $17,107,733
Undistributed Net Investment Income.............................. 117,102
Accumulated Net Realized Loss.................................... (43,821)
Unrealized Depreciation.......................................... (74,054)
- -------------------------------------------------------------------------------
NET ASSETS........................................................ $17,106,960
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Net Assets....................................................... $13,062,040
Net Asset Value, Offering and Redemption Price Per Share
1,311,135 shares outstanding (unlimited authorization, no par
value).......................................................... $ 9.96
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL SERVICE CLASS SHARES
Net Assets....................................................... $ 4,044,920
Net Asset Value, Offering and Redemption Price Per Share
406,663 shares outstanding (unlimited authorization, no par
value).......................................................... $ 9.95
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

8
<PAGE>

BHM&S TOTAL RETURN BOND PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended April 30, 1997

<TABLE>
- ---------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME
Interest..................................................... $768,681
- ---------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees.................................................. $40,683
Less: Fees Waived........................................... (40,683) --
-------
Administrative Fees--Note C.................................. 82,921
Audit Fees................................................... 12,954
Printing Fees................................................ 28,301
Filing and Registration Fees................................. 29,185
Distribution and Service Fees--Note E........................ 7,616
Legal Fees................................................... 6,829
Custodian Fees--Note D....................................... 2,285
Account Services Fees--Note F................................ 2,954
Trustees' Fees--Note G....................................... 2,161
Other Expenses............................................... 1,572
Fees Assumed by Adviser--Note B.............................. (102,882)
- ---------------------------------------------------------------------------------
Total Expenses.............................................. 73,896
Expense Offset--Note A....................................... (1,904)
- ---------------------------------------------------------------------------------
Net Expenses................................................ 71,992
- ---------------------------------------------------------------------------------
NET INVESTMENT INCOME......................................... 696,689
- ---------------------------------------------------------------------------------
NET REALIZED LOSS ON INVESTMENTS.............................. (41,214)
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON
INVESTMENTS.................................................. 61,915
- ---------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS....................................... 20,701
- ---------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......... $717,390
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

9
<PAGE>

BHM&S TOTAL RETURN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 1,
APRIL 30, 1995** TO
1997 APRIL 30, 1996
- ---------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................... $ 696,689 $ 99,017
Net Realized Loss................................... (41,214) (2,447)
Net Change in Unrealized Appreciation/Depreciation.. 61,915 (135,969)
- ---------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting
From Operations................................... 717,390 (39,399)
- ---------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class................................ (462,628) (38,548)
Institutional Service Class........................ (152,667) (24,975)
- ---------------------------------------------------------------------------------
Total Distributions................................. (615,295) (63,523)
- ---------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE I):
Institutional Class:
Issued--Regular................................... 10,616,111 2,785,396
--In Lieu of Cash Distributions................... 462,628 38,548
Redeemed.......................................... (532,897) (340,122)
- ---------------------------------------------------------------------------------
Net Increase from Institutional Class Shares....... 10,545,842 2,483,822
- ---------------------------------------------------------------------------------
Institutional Service Class:
Issued--Regular................................... 2,374,305 2,930,372
--In Lieu of Cash Distributions................... 152,667 24,975
Redeemed.......................................... (1,383,926) (20,270)
- ---------------------------------------------------------------------------------
Net Increase from Institutional Service Class
Shares............................................ 1,143,046 2,935,077
- ---------------------------------------------------------------------------------
Net Increase from Capital Share Transactions....... 11,688,888 5,418,899
- ---------------------------------------------------------------------------------
Total Increase...................................... 11,790,983 5,315,977
Net Assets:
Beginning of Period................................. 5,315,977 --
- ---------------------------------------------------------------------------------
End of Period (including undistributed net
investment income of $117,102 and $34,746,
respectively)...................................... $17,106,960 $5,315,977
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
** Commencement of Operations

The accompanying notes are an integral part of the financial statements.

10
<PAGE>

BHM&S TOTAL RETURN BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE
INSTITUTIONAL CLASS CLASS
-------------------------- --------------------------
YEAR NOVEMBER 1, YEAR NOVEMBER 1,
ENDED 1995*** ENDED 1995***
APRIL 30, TO APRIL 30, TO
1997++ APRIL 30, 1996++ 1997++ APRIL 30, 1996++
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 9.85 $10.00 $ 9.84 $10.00
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income... 0.60 0.28 0.57 0.27
Net Realized and
Unrealized Gain (Loss)
on Investments......... 0.05 (0.27) 0.05 (0.27)
- --------------------------------------------------------------------------------
Total from Investment
Operations............ 0.65 0.01 0.62 --
- --------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income... (0.54) (0.16) (0.51) (0.16)
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD.................. $ 9.96 $ 9.85 $ 9.95 $ 9.84
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN+............ 6.75% 0.08%** 6.47% (0.07)%**
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of Period
(Thousands)............. $13,062 $2,445 $4,045 $2,871
Ratio of Expenses to
Average Net Assets...... 0.57% 0.61%* 0.82% 0.83%*
Ratio of Net Investment
Income to Average Net
Assets.................. 6.01% 5.53%* 5.78% 5.44%*
Portfolio Turnover Rate.. 151% 55% 151% 55%
- --------------------------------------------------------------------------------
Voluntarily Waived Fees
and Expenses Assumed by
the Adviser Per Share... $ 0.12 $ 0.23 $ 0.14 $ 0.20
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................. 0.55% 0.55%* 0.80% 0.80%*
- --------------------------------------------------------------------------------
</TABLE>
* Annualized.
** Not Annualized.
*** Commencement of Operations.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period.
++ Per share amounts are based on average outstanding shares.

The accompanying notes are an integral part of the financial statements.

11
<PAGE>

BHM&S TOTAL RETURN BOND PORTFOLIO

NOTES TO FINANCIAL STATEMENTS

UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The BHM&S
Total Return Bond Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust,
is a diversified, open-end management investment company. At April 30, 1997,
the UAM Funds were composed of forty-two active portfolios. The financial
statements of the remaining portfolios are presented separately. The Portfolio
is authorized to offer two separate classes of shares--Institutional Class
shares and Institutional Service Class shares. Both classes of shares have
identical voting rights (except Institutional Service Class shareholders have
exclusive voting rights with respect to matters relating to distribution and
shareholder servicing of such shares), dividend, liquidation and other rights.
The objective of the BHM&S Total Return Bond Portfolio is to provide a maximum
long term total return consistent with reasonable risk to principal by
investing in investment grade fixed income securities of varying maturities.

A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.

1. SECURITY VALUATION: Fixed income securities are stated on the basis of
valuations provided by brokers and/or a pricing service which uses
information with respect to transactions in fixed income securities,
quotations from dealers, market transactions in comparable securities and
various relationships between securities in determining value. Short-term
investments that have remaining maturities of sixty days or less at time of
purchase are valued at amortized cost, if it approximates market value. The
value of other assets and securities for which no quotations are readily
available is determined in good faith at fair value using methods
determined by the Board of Trustees.

2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements.

For the year ended April 30, 1997, the Portfolio expects to defer to May 1,
1997 for federal income tax purposes, post-October capital losses of $480.

At April 30, 1997, the Portfolio had available a capital loss carryover for
federal income tax purposes of $34,317 which will expire on April 30, 2005.

3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy by
the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.

12
<PAGE>

BHM&S TOTAL RETURN BOND PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash balances
into a joint trading account which invests in one or more repurchase
agreements. This joint repurchase agreement is covered by the same
collateral requirements as discussed above.

4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.

The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles. These differences
are primarily due to differing book and tax treatments for paydown gains
(losses), post-October capital losses and the timing of the recognition of
gains or losses on investments.

Permanent book and tax basis differences relating to shareholder
distributions resulted in reclassifications of $1,016 to increase
undistributed net investment income and $962 to increase accumulated net
realized loss, with a decrease to paid in capital of $54.

Current year permanent book-tax differences, if any, are not included in
ending undistributed net investment income (loss) for the purpose of
calculating net investment income (loss) per share in the financial
highlights.

5. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Interest income is recognized on the accrual basis.
Discounts and premiums on securities purchased are amortized using the
effective yield basis over their respective lives. Most expenses of the UAM
Funds can be directly attributed to a particular portfolio. Expenses which
cannot be directly attributed are apportioned among the portfolios of the
UAM Funds based on their relative net assets. Income, expenses (other than
class specific expenses) and realized and unrealized gains or losses are
allocated to each class of shares based upon their relative net assets.
Custodian fees for the Portfolio have been increased to include expense
offsets, if any, for custodian balance credits.

B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Barrow, Hanley, Mewhinney, & Strauss, Inc. (the "Adviser"), a wholly-owned
subsidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio at a fee calculated at an annual rate of
0.35% of average daily net assets. Through December 31, 1997, the Adviser has
voluntarily agreed to waive a portion of its advisory fees and to assume
expenses, if necessary, in order to keep the Portfolio's total annual
operating expenses, after the effect of expense offset arrangements, from
exceeding 0.55% and 0.80% of average daily net assets of the Portfolio's
Institutional Class Shares and Service Class Shares, respectively.

13
<PAGE>

BHM&S TOTAL RETURN BOND PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

assets; plus 0.07% of the next $2 billion of the combined aggregate net
assets; plus 0.05% of the combined aggregate net assets in excess of $3
billion. The fees are allocated among the portfolios of the UAM Funds on the
basis of their relative net assets and are subject to a graduated minimum fee
schedule per portfolio which rises from $2,000 per month, upon inception of a
portfolio, to $70,000 annually after two years. For portfolios with more than
one class of shares, the minimum annual fee increases to $90,000. In addition,
the Administrator receives a Portfolio-specific monthly fee at an annual rate
of 0.04% of average daily net assets of the Portfolio. The Administrator has
entered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, under which CGFSC
agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee. For the year ended April 30, 1997, $82,083 was paid
to CGFSC for its services.

D. CUSTODIAN: Effective July 17, 1996, The Chase Manhattan Bank (the "Bank"),
an affiliate of CGFSC, is custodian for the Portfolio's assets held in
accordance with the custodian agreement. For the period July 17, 1996 to April
30, 1997, the amount charged to the Portfolio by the Bank aggregated $294, all
of which is unpaid at April 30, 1997.

E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Portfolio has adopted Distribution and Service Plans (the "Plans") on behalf
of the Service Class Shares pursuant to Rule 12b-1 under the Investment
Company Act of 1940. Under the Plans, the Portfolio may not incur distribution
and service fees which exceed an annual rate of 0.75% of the Portfolio's net
assets, however, the Board has currently limited aggregate payments under the
Plans to 0.50% per annum of the Portfolio's net assets. The Portfolio's
Service Class Shares are not currently making payments for distribution fees,
however the Portfolio does pay service fees at an annual rate of 0.25% of the
average daily value of Service Class Shares owned by clients of the Service
Agents.

F. ACCOUNT SERVICES: Effective February 28, 1997, the UAM Funds entered into
an Account Services Agreement (the "Services Agreement") with UAM Retirement
Plan Services, Inc. ("Service Provider"), a wholly-owned subsidiary of UAM.
Under the Services Agreement, the Service Provider agrees to perform certain
services for participants in a self-directed, defined contribution plan, and
for whom the Service Provider provides participant recordkeeping. Pursuant to
the Services Agreement, the Service Provider is entitled to receive, after the
end of each month, a fee at the annual rate of 0.15% of the average aggregate
daily net asset value of shares of the UAM Funds in the accounts for which
they provide services.

G. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds and reimbursement of expenses incurred in
attending Trustee meetings.

H. PURCHASES AND SALES: For the year ended April 30, 1997, the Portfolio made
purchases of $16,468,317 and sales of $8,006,875 of investment securities
other than long-term U.S. Government and short-term securities. Purchases and
sales of long-term U.S. Government securities total $11,601,109 and
$8,460,162, respectively.

14
<PAGE>

BHM&S TOTAL RETURN BOND PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

I. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 1/8th of 1% per annum, payable at the end of
each calendar quarter, is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. During the year ended
April 30, 1997, the Portfolio had no borrowings under the agreement.

J. OTHER: At April 30, 1997, 98.1% and 84.0% of total shares outstanding were
held by 4 and 4 record shareholders of the Institutional Class Shares and the
Institutional Service Class Shares, respectively, owning more than 10% of the
aggregate total shares outstanding.

K. CAPITAL SHARE TRANSACTIONS: Transactions in capital shares for the
Portfolios, by class, were as follows:

<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE CLASS
INSTITUTIONAL CLASS SHARES SHARES
----------------------------- -----------------------------
YEAR NOVEMBER 1, YEAR NOVEMBER 1,
ENDED 1995* TO ENDED 1995* TO
APRIL 30, 1997 APRIL 30, 1996 APRIL 30, 1997 APRIL 30, 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Shares Issued........... 1,069,573 277,892 239,518 291,359
In Lieu of Cash
Distributions.......... 46,682 3,857 15,482 2,511
Shares Redeemed......... (53,183) (33,686) (140,200) (2,007)
--------- ------- -------- -------
Net Increase (Decrease)
from Capital Share
Transactions........... 1,063,072 248,063 114,800 291,863
========= ======= ======== =======
</TABLE>
* Commencement of Operations

15
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
UAM Funds Trust and Shareholders of
BHM&S Total Return Bond Portfolio

In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the BHM&S Total
Return Bond Portfolio (the "Portfolio"), a Portfolio of UAM Funds Trust, at
April 30, 1997, and the results of its operations, the changes in its net
assets and the financial highlights for the periods indicated in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio'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 April 30, 1997 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.

Price Waterhouse LLP
Boston, Massachusetts
June 9, 1997

- -------------------------------------------------------------------------------

FEDERAL TAX INFORMATION (UNAUDITED):

For the year ended April 30, 1997, the percentage of income earned from direct
treasury obligations was 31.65%.

16
<PAGE>

- -------------------------------------------------------------------------------

UAM FUNDS
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS

- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES

William H. Park
Vice President
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Chicago Asset Management Company
70 West Madison Street, 56th Floor
Chicago, IL 60602
- -------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.

- -------------------------------------------------------------------------------

[LOGO OF UAM FUNDS APPEARS HERE] UAM Funds

CHICAGO ASSET
MANAGEMENT
COMPANY
PORTFOLIOS

- -------------------------------------------------------------------------------

ANNUAL REPORT
APRIL 30, 1997
<PAGE>

Dear Shareholders:

April 30th is the annual year-end reporting period for the Chicago Asset
Management Value/Contrarian Portfolio for our equity investors and the
Intermediate Bond Portfolio for our fixed income clients. In this letter we
will review the investment environment and returns for both portfolios. We
thank you for your interest in these investment vehicles, and look forward to
your continued confidence.

CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO

In keeping with the spirit of value/contrarian investing, the Portfolio seeks
to invest in issues which have clearly underperformed the market prior to
purchase. The reasons for the underperformance should be identifiable, and the
facts suggest the underperformance is temporary. It is believed that these
issues are undervalued relative to their true potential value when current
situations have improved. It is further believed that the total return
achievable from such securities can potentially be greater than average due to
the fact that one may achieve both the recovery from depressed valuation and
the normal advance from basic operations of the underlying company.

In the year ended April 30, 1997, the market environment was quite unique. The
market as measured by the Standard & Poor's 500 Index advanced strongly during
that time. The advance was greatly influenced by a small number of the 500
issues which were most heavily weighted on a capitalization basis. The advance
has been characterized as a momentum market whereby the strongest performing
group attracts additional interest and continues to outperform most other
securities. Statistics have suggested that the Index outperformed the vast
majority of all mutual funds in this time period, and even over longer time
periods of approximately three years. Not only is this unique to the general
investing community, but it is particularly unique to a value/contrarian
style. The value/contrarian underperforms most sharply during such a momentum
environment when the focus is narrowed to a few securities which traditionally
would have higher than market valuations and much more growth-oriented
characteristics.

In view of this environment, the Portfolio performance meaningfully lagged
that of the popular Standard & Poor's Index. For the year ended April 30,
1997, the Portfolio produced a total return net of expenses of +3.72% in
comparison to the Standard & Poor's 500 Index return of +25.12%. Measured on a
trailing six-month basis, the Portfolio returned 5.82% and the Index 14.72%.
Measured on a trailing three-month basis, the Portfolio produced 0.69% in
comparison to the Index return of 2.42%.

In view of the meaningful underperformance of the Portfolio in comparison to
the Index for the current year, we think it is important to maintain strict
adherence to our identical philosophy of our investment style and strategies
as a value/contrarian portfolio manager. In our view, the long-term values
which come from our investment style are greater now than they were one year
ago. The securities which have lagged the market so meaningfully, which is the
majority of the securities, carry above-average attractiveness in terms of
historical valuations in our opinion. In fact, we are actively maintaining our
normal rebalancing discipline whereby we add to current holdings which have
underperformed and thereby became undersized in the total portfolio. We
believe these holdings carry the potential for above-average returns and
therefore want to maintain full exposure to those issues.

Conversely, funds are made available for such additional purchases by the
partial sales of holdings which have outperformed most strongly and thereby
became oversized in the Portfolio. We believe maintaining this disciplined
focus is one of the best ways to prepare for the potential normal market
rotation when focus is on the

1
<PAGE>

more undervalued value/contrarian type of holdings and away from the more
highly valued growth-oriented issues.

Although every investment style takes its turn being out of favor relative to
the market as a whole, the current environment seems to be representing a
larger than normal proportion of styles which are lagging the performance of
the Index. This seems to be caused by the more narrow focus of this "two-tier"
kind of market whereby most of the performance is coming from such a small
group of securities. We continue to believe that these are the most critical
times to maintain one's identical style and discipline in order to be
positioned for the probability of natural rotation back to one's own
individual style.

CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO

The year ended April 30, 1997, was another period of intermittent and
significant volatility in intermediate maturity interest rates. For the full
year period, short-term interest rates, as represented by U.S. Treasury Bills
and Treasury Notes with maturities out to two years, showed increases of
approximately 20 to 25 basis points. Longer term intermediate maturities, such
as ten year Treasuries, rose a more moderate degree, less than 5 basis points.
This limited overall rise in rates modestly depressed bond prices. This
decline in prices offset some of the income generated by the portfolio
investments and produced lower total rates of return than the prior year.

Looking back over the year, the major investment themes were predominately
favorable for investors. The United States economy continued to expand.
Corporate profitability continued to increase. Corporate balance sheets
strengthened. The debt of companies performed favorably. Sometimes the markets
become concerned that too much growth would lead to a Federal Reserve action
to push up interest rates. These periods were followed by a more moderate
period of growth and a realization that inflation was not reigniting. For the
whole year, inflation has been much better than expected. Also contributing to
a positive tone in the fixed income markets has been the strong dollar and
related substantial demand for U.S. Treasury securities from private foreign
investors and foreign Central Banks.

As we approached the Portfolio's fiscal year-end, the economy was going
through another period of solid upward momentum. On March 25th, the Federal
Open Market Committee raised its target for Fed Funds from the 5 1/4% level,
which had prevailed since January, 1996, to 5 1/2%. The discount rate was left
unchanged at 5%. The FOMC explained its preemptive firming of monetary policy
as a response to "persisting strength in demand, which is progressively
increasing the risk of inflationary imbalances in the economy." The Clinton
Administration concurred with a statement that "We share the goal of
maintaining economic growth with low inflation."

At this time, it is difficult to foresee whether or not future events will
validate the Federal Reserve's change in policy as necessary to forestall
potential future inflation. Although inflation remains a no-show, the market
has taken a very defensive posture due to the Fed's altering its Fed Funds
target.

In this volatile environment, the Portfolio remained focused on investing for
safety and income. The Portfolio maintained its concentration in U.S. Treasury
Notes, Agencies and obligations of large U.S. corporations. Corporate debt is
utilized to enhance the current income and long-term return of the Portfolio.
Emphasis is placed on intermediate maturity securities. This is done so that
the Portfolio can seek to produce a high level of income while reducing the
possibility of exposing investors to significant principal fluctuation.

2
<PAGE>

The Portfolio had the following characteristics relative to the Lehman
Brothers Intermediate Government/Corporate Index as of April 30, 1997:

<TABLE>
<CAPTION>
PORTFOLIO INDEX
---------- ----------
<S> <C> <C>
Average Maturity.................................... 4.36 Years 4.23 Years
Average Duration.................................... 3.18 Years 3.28 Years
Average Coupon...................................... 6.49% 6.80%
Yield to Maturity................................... 6.51% 6.59%
</TABLE>

For the twelve months ended April 30, 1997, the Portfolio produced a total
rate of return, net of expenses, of 5.53% versus the Lehman Brothers
Intermediate Government/Corporate Index return of 6.41%.

CHICAGO ASSET MANAGEMENT COMPANY

The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the advisor didn't have temporary fee waivers and didn't assume expenses on
behalf of the Portfolios, total returns would have been lower. The investment
return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than the original
cost.

3
<PAGE>

<TABLE>
<CAPTION>
------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1997
------------------------------------------------------------
1 YEAR SINCE 12/16/94*++
------------------------------------------------------------
<S> <C>
3.72% 18.19%
------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
CHICAGO ASSET MANAGEMENT
DATE VALUE/CONTRARIAN PORTFOLIO S&P 500 INDEX
---- -------------------------- ---------------
<S> <C> <C>
12/16/94*++ 10,000 10,000
04/30/95 11,181 11,295
04/30/96 14,311 14,705
04/30/97 14,843 18,399
</TABLE>

Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.

* Commencement of Operations

** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.

+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees,
if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions. The
comparative index has been adjusted to reflect reinvestment of dividends on
securities in the index.

++ For comparative purposes, the value of the S&P 500 Index on 12/31/94 is used
as the beginning value on 12/16/94.

DEFINITION OF THE COMPARATIVE INDEX
-----------------------------------

The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.

Please note that one cannot invest in an unmanaged index.

4
<PAGE>

Performance Comparison
================================================================================
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO AND
THE LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE INDEX
- --------------------------------------------------------------------------------
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
-----------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1997
-----------------------------------------------------
1 YEAR SINCE 1/24/95*++
-----------------------------------------------------
<S> <C>
5.53% 7.75%
-----------------------------------------------------
</TABLE>

CHICAGO ASSET MANAGEMENT LEHMAN BROTHERS INTERMEDIATE
DATE INTERMEDIATE BOND PORTFOLIO GOVERNMENT/CORPORATE INDEX+
- ---- --------------------------- ----------------------------
<S> <C> <C>
01/24/95*++ 10,000 10,000
04/30/95 10,431 10,393
04/30/96 11,226 11,347
04/30/97 11,847 12,074
</TABLE>

Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.
+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees,
if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions.
++ For comparative purposes, the value of the Lehman Brothers Intermediate
Government/Corporate Index on 1/31/95 is used as the beginning value on
1/24/95.

DEFINITION OF THE COMPARATIVE INDEX

The Lehman Brothers Intermediate Government/Corporate Index is an unmanaged
index composed of a combination of the Government and Corporate Bond Indices.
All issues are investment grade (BBB) or higher with maturities of one to ten
years and an outstanding par value of at least $100 million for U.S. Government
issues and $25 million for others. The Government Index includes public
obligations of the U.S. Treasury, issues of Government agencies, and corporate
debt backed by the U.S. government. The Corporate Bond Index includes fixed-
rate nonconvertible corporate debt. Also included are Yankee bonds and
nonconvertible debt issued by or guaranteed by foreign or international
governments and agencies. Any security downgraded during the month is held in
the index until month-end and then removed. All returns are market value
weighted inclusive of accrued income.

Please note that one cannot invest in an unmanaged index.

5
<PAGE>

CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
COMMON STOCKS (96.5%)
- --------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE & DEFENSE (3.0%)
Raytheon Co............................................... 9,475 $ 413,347
- --------------------------------------------------------------------------------
AUTOMOTIVE (6.8%)
Ford Motor Co............................................. 13,450 467,388
General Motors Corp....................................... 8,125 470,234
-----------
937,622
- --------------------------------------------------------------------------------
BANKS (6.5%)
Banc One Corp............................................. 9,825 416,334
BankAmerica Corp.......................................... 4,075 476,266
-----------
892,600
- --------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (6.7%)
IBP, Inc.................................................. 19,125 454,219
Sysco Corp................................................ 13,050 463,275
-----------
917,494
- --------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (3.4%)
Deluxe Corp............................................... 15,375 470,859
- --------------------------------------------------------------------------------
CHEMICALS (6.2%)
Dow Chemical Co........................................... 5,550 471,056
Ethyl Corp................................................ 42,300 385,988
-----------
857,044
- --------------------------------------------------------------------------------
CONSUMER DURABLES (2.3%)
Goodyear Tire & Rubber Co................................. 5,975 314,434
- --------------------------------------------------------------------------------
ELECTRONICS (3.1%)
AMP, Inc.................................................. 11,775 422,428
- --------------------------------------------------------------------------------
ENERGY (3.2%)
Mobil Corp................................................ 3,400 442,000
- --------------------------------------------------------------------------------
HEALTH CARE (9.5%)
Aetna Inc................................................. 5,150 469,294
Columbia/HCA Healthcare Corp.............................. 12,075 422,625
United Healthcare Corp.................................... 8,700 423,037
-----------
1,314,956
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

6
<PAGE>

CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
<S> <C> <C>
INSURANCE (3.5%)
Chubb Corp.................................................. 8,475 $ 489,431
- -------------------------------------------------------------------------------
LODGING & RESTAURANTS (3.2%)
Darden Restaurants, Inc..................................... 57,225 443,494
- -------------------------------------------------------------------------------
MANUFACTURING (9.9%)
Eastman Kodak Co............................................ 5,550 463,425
Tenneco, Inc................................................ 11,100 442,612
Whitman Corp................................................ 19,900 460,188
----------
1,366,225
- -------------------------------------------------------------------------------
PAPER & PACKAGING (6.5%)
International Paper Co...................................... 11,075 467,919
Weyerhaeuser Co............................................. 9,475 433,481
----------
901,400
- -------------------------------------------------------------------------------
PHARMACEUTICALS (2.9%)
Pharmacia & Upjohn, Inc..................................... 13,400 396,975
- -------------------------------------------------------------------------------
RETAIL (6.9%)
Nordstrom, Inc.............................................. 12,250 480,813
The Limited, Inc............................................ 26,250 475,781
----------
956,594
- -------------------------------------------------------------------------------
TECHNOLOGY (6.6%)
*Apple Computer, Inc........................................ 24,175 410,975
International Business Machines Corp........................ 3,150 506,363
----------
917,338
- -------------------------------------------------------------------------------
TELECOMMUNICATIONS (6.3%)
AT&T Corp................................................... 12,550 420,425
Bell Atlantic Corp.......................................... 6,675 452,231
----------
872,656
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $12,918,760)....................... 13,326,897
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

7
<PAGE>

CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (3.1%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc., 5.20%, dated 04/30/97, due
05/01/97, to be repurchased at $424,061, collateralized
by $426,428 of various U.S. Treasury Notes, 4.75%-
6.125%, due from 08/31/98-10/31/98, valued at $424,341
(COST $424,000)......................................... $424,000 $ 424,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.6%) (COST $13,342,760)(a)........... 13,750,897
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (0.4%)................. 53,509
- -------------------------------------------------------------------------------
NET ASSETS (100%)......................................... $13,804,406
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
(a) The cost for federal income tax purposes was $13,342,997. At April 30,
1997, net unrealized appreciation for all securities based on tax cost was
$407,900. This consisted of aggregate gross unrealized appreciation for
all securities of $637,018 and aggregated gross unrealized depreciation
for all securities of $229,118.

The accompanying notes are an integral part of the financial statements.

8
<PAGE>

CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1997

<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- -------------------------------------------------------------------------------
CORPORATE BONDS & NOTES (56.1%)
- -------------------------------------------------------------------------------
<S> <C> <C>
BANKS (13.5%)
BankAmerica Corp. 7.625%, 06/15/04....................... $250,000 $ 255,273
Northern Trust Co. 6.50%, 05/01/03....................... 250,000 241,455
Norwest Corp. 7.70%, 11/15/97............................ 250,000 252,010
State Street Boston Corp. 7.35%, 06/15/26................ 250,000 255,612
SunTrust Banks, Inc. 6.00%, 02/15/26..................... 275,000 254,163
Wachovia Corp. 6.625%, 11/15/06.......................... 100,000 96,357
-----------
1,354,870
- -------------------------------------------------------------------------------
FINANCIAL SERVICES (15.3%)
Associates Corp. of North America 7.75%, 02/15/05........ 250,000 261,082
Chrysler Financial Corp. 5.93%, 12/08/98................. 250,000 248,335
CIT Group Holdings, Inc. 6.25%, 10/25/99................. 200,000 198,226
Exxon Capital Corp.
7.875%, 08/15/97........................................ 105,000 105,599
6.625%, 08/15/02........................................ 9,000 8,861
Ford Motor Credit Co.--Global Bond 6.25%, 11/08/00....... 250,000 245,460
General Motors Acceptance Corp. 8.00%, 05/02/97.......... 250,000 249,990
General Motors Acceptance Corp.--Global Bond 6.75%,
02/07/02................................................ 100,000 98,858
IBM Credit Corp. 6.375%, 11/01/97........................ 125,000 125,160
-----------
1,541,571
- -------------------------------------------------------------------------------
INDUSTRIAL (12.7%)
Heinz (H.J.) Co. 5.50%, 09/15/97......................... 278,000 277,497
Hertz Corp. 8.30%, 02/02/98.............................. 250,000 253,722
PepsiCo, Inc. 6.25%, 09/01/99............................ 250,000 247,622
Shell Oil Co. 6.625%, 07/01/99........................... 250,000 250,148
WMX Technologies, Inc. 6.25%, 10/15/00................... 250,000 244,895
-----------
1,273,884
- -------------------------------------------------------------------------------
RETAIL (6.8%)
J.C. Penney & Co.
5.375%, 11/15/98........................................ 53,000 52,166
6.90%, 08/15/26......................................... 200,000 198,764
Motorola, Inc. 6.50%, 09/01/25........................... 300,000 292,302
Wal-Mart Stores, Inc. 6.375%, 03/01/03................... 140,000 135,839
-----------
679,071
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

9
<PAGE>

CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- --------------------------------------------------------------------------------
CORPORATE BONDS & NOTES--(CONTINUED)
- --------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES (7.8%)
Florida Power & Light Co. 5.50%, 07/01/99................. $150,000 $ 146,876
National Rural Utilities 5.95%, 01/15/03.................. 250,000 237,110
Pennsylvania Power & Light Co. 5.50%, 04/01/98............ 150,000 148,998
Virginia Electric Power Co. 6.25%, 08/01/98............... 250,000 249,470
-----------
782,454
- --------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES (COST $5,620,631)............ 5,631,850
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES (33.6%)
- --------------------------------------------------------------------------------
U.S. TREASURY NOTES
6.125%, 05/31/97.......................................... 550,000 550,170
5.625%, 08/31/97.......................................... 500,000 499,845
5.875%, 02/28/99.......................................... 250,000 248,438
7.75%, 01/31/00........................................... 500,000 516,560
5.875%, 06/30/00.......................................... 250,000 245,977
5.25%, 01/31/01........................................... 250,000 239,882
7.50%, 11/15/01........................................... 250,000 259,023
6.125%, 12/31/01.......................................... 300,000 294,798
7.50%, 05/15/02........................................... 50,000 51,985
6.50%, 10/15/06........................................... 475,000 467,205
- --------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT SECURITIES (COST $3,360,980)......... 3,373,883
- --------------------------------------------------------------------------------
AGENCY SECURITIES (6.6%)
- --------------------------------------------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
5.37%, 02/07/01........................................... 250,000 239,218
6.40%, 09/27/05........................................... 200,000 192,718
5.875%, 02/02/06.......................................... 250,000 232,655
- --------------------------------------------------------------------------------
TOTAL AGENCY SECURITIES (COST $692,351).................... 664,591
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

10
<PAGE>

CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (2.1%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.20%, dated 04/30/97, due
05/01/97, to be repurchased at $212,031, collateralized
by $213,214 of various U.S. Treasury Notes,
4.75%-6.125%, due from 08/31/98-10/31/98, valued at
$212,170 (COST $212,000)................................ $212,000 $ 212,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (98.4%)(COST $9,885,962)(a)............. 9,882,324
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (1.6%)................. 161,853
- -------------------------------------------------------------------------------
NET ASSETS (100%)......................................... $10,044,177
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
(a) The cost for federal income tax purposes was $9,887,684. At April 30,
1997, net unrealized depreciation for all securities based on tax cost was
$5,360. This consisted of aggregate gross unrealized appreciation for all
securities of $103,374 and aggregate gross unrealized depreciation for all
securities of $108,734.

The accompanying notes are an integral part of the financial statements.

11
<PAGE>

CHICAGO ASSET MANAGEMENT PORTFOLIOS
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997

<TABLE>
<CAPTION>
CHICAGO ASSET CHICAGO ASSET
MANAGEMENT MANAGEMENT
VALUE/ INTERMEDIATE
CONTRARIAN BOND
PORTFOLIO PORTFOLIO
- -------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at Cost.............................. $13,342,760 $ 9,885,962
=========== ===========
Investments, at Value............................. $13,750,897 $ 9,882,324
Cash.............................................. 569 961
Deferred Organization Costs--Note A............... 11,701 12,254
Receivable due from Investment Adviser--Note B.... 13,427 19,471
Dividends Receivable.............................. 21,598 --
Receivable for Investments Sold................... 18,623 --
Receivable for Portfolio Shares Sold.............. 57,176 1,078
Interest Receivable............................... 61 171,999
Other Assets...................................... 10 90
- -------------------------------------------------------------------------------
Total Assets..................................... 13,874,062 10,088,177
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Investments Purchased................. 22,573 --
Payable for Administrative Fees--Note C........... 7,652 8,274
Payable for Account Services Fees--Note F......... 83 203
Payable for Trustees' Fees--Note G................ 454 462
Other Liabilities................................. 38,894 35,061
- -------------------------------------------------------------------------------
Total Liabilities................................ 69,656 44,000
- -------------------------------------------------------------------------------
NET ASSETS......................................... $13,804,406 $10,044,177
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid in Capital................................... $13,283,788 $ 9,985,585
Undistributed Net Investment Income............... 30,593 60,816
Accumulated Net Realized Gain..................... 81,888 1,414
Unrealized Appreciation (Depreciation)............ 408,137 (3,638)
- -------------------------------------------------------------------------------
NET ASSETS......................................... $13,804,406 $10,044,177
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding (Unlimited
authorization, no par value)..................... 1,056,131 975,130
Net Asset Value, Offering and Redemption Price Per
Share............................................ $ 13.07 $ 10.30
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

12
<PAGE>

CHICAGO ASSET MANAGEMENT PORTFOLIOS
STATEMENT OF OPERATIONS
For the Year Ended April 30, 1997

<TABLE>
<CAPTION>
CHICAGO ASSET CHICAGO ASSET
MANAGEMENT MANAGEMENT
VALUE/ INTERMEDIATE
CONTRARIAN BOND
PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends....................... $ 50,048 $ --
Interest........................ 11,752 577,376
- ----------------------------------------------------------------------------------
Total Income................... 61,800 577,376
- ----------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees..................... $ 13,652 $ 41,438
Less: Fees Waived.............. (13,652) -- (41,438) --
-------- --------
Administrative Fees--Note C..... 75,363 80,225
Custodian Fees--Note D.......... 5,081 21
Audit Fees...................... 12,460 12,443
Printing Fees................... 22,559 23,245
Account Services Fees--Note F... 83 203
Trustees' Fees--Note G.......... 1,986 2,089
Filing and Registration Fees.... 21,978 18,723
Amortization of Organization
Expense--Note A................ 4,449 4,372
Other Expenses.................. 1,416 6,063
Fees Assumed by Adviser--Note B. (124,633) (78,563)
- ----------------------------------------------------------------------------------
Total Expenses................. 20,742 68,821
Expense Offset--Note A.......... (259) (21)
- ----------------------------------------------------------------------------------
Net Expenses................... 20,483 68,800
- ----------------------------------------------------------------------------------
NET INVESTMENT INCOME............ 41,317 508,576
- ----------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS. 126,824 8,536
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION OF
INVESTMENTS..................... 219,469 (57,181)
- ----------------------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENTS... 346,293 (48,645)
- ----------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....... $ 387,610 $459,931
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

13
<PAGE>

CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income.................................. $ 41,317 $ 12,039
Net Realized Gain...................................... 126,824 52,560
Net Change in Unrealized Appreciation/Depreciation..... 219,469 130,882
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations.. 387,610 195,481
- --------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income.................................. (20,547) (14,741)
Net Realized Gain...................................... (80,161) (19,147)
- --------------------------------------------------------------------------------
Total Distributions................................... (100,708) (33,888)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular........................................ 12,634,715 79,245
--In Lieu of Cash Distributions........................ 96,713 31,757
Redeemed............................................... (105,728) (76,406)
- --------------------------------------------------------------------------------
Net Increase from Capital Share Transactions.......... 12,625,700 34,596
- --------------------------------------------------------------------------------
Total Increase......................................... 12,912,602 196,189
Net Assets:
Beginning of Year...................................... 891,804 695,615
- --------------------------------------------------------------------------------
End of Year (including undistributed net investment
income of $30,593 and $5,374, respectively)........... $13,804,406 $891,804
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued......................................... 991,693 6,326
In Lieu of Cash Distributions......................... 7,527 2,606
Redeemed.............................................. (8,321) (6,135)
- --------------------------------------------------------------------------------
990,899 2,797
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

14
<PAGE>

CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income................................. $ 508,576 $ 404,686
Net Realized Gain..................................... 8,536 60,194
Net Change in Unrealized Appreciation/Depreciation.... (57,181) (78,098)
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations. 459,931 386,782
- --------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income................................. (506,282) (388,730)
Net Realized Gain..................................... (22,948) (48,388)
- --------------------------------------------------------------------------------
Total Distributions.................................. (529,230) (437,118)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular....................................... 1,826,542 2,481,207
--In Lieu of Cash Distributions....................... 528,662 435,292
Redeemed.............................................. (222,819) (151,965)
- --------------------------------------------------------------------------------
Net Increase from Capital Share Transactions......... 2,132,385 2,764,534
- --------------------------------------------------------------------------------
Total Increase........................................ 2,063,086 2,714,198
Net Assets:
Beginning of Year..................................... 7,981,091 5,266,893
- --------------------------------------------------------------------------------
End of Year (including undistributed net investment
income of $60,816 and $58,170, respectively)......... $10,044,177 $7,981,091
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued........................................ 176,865 231,545
In Lieu of Cash Distributions........................ 51,334 41,292
Redeemed............................................. (21,434) (14,328)
- --------------------------------------------------------------------------------
206,765 258,509
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

15
<PAGE>

CHICAGO ASSET MANAGEMENT VALUE/CONTRARIAN PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

<TABLE>
<CAPTION>
DECEMBER 16,
YEAR ENDED YEAR ENDED 1994*** TO
APRIL 30, APRIL 30, APRIL 30,
1997 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 13.67 $ 11.14 $10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income...................... 0.18 0.19 0.05
Net Realized and Unrealized Gain on
Investments............................... 0.30 2.86 1.13
- -------------------------------------------------------------------------------
Total from Investment Operations.......... 0.48 3.05 1.18
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income...................... (0.24) (0.23) (0.04)
Net Realized Gain.......................... (0.84) (0.29) --
- -------------------------------------------------------------------------------
Total Distributions....................... (1.08) (0.52) (0.04)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD.............. $ 13.07 $ 13.67 $11.14
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+............................... 3.72% 28.00% 11.81%**
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)...... $13,804 $ 892 $ 696
Ratio of Expenses to Average Net Assets.... 0.95% 1.06% 0.95%*
Ratio of Net Investment Income to Average
Net Assets................................ 1.89% 1.51% 1.54%*
Portfolio Turnover Rate.................... 21% 33% 4%
Average Commission Rate#................... $0.0574 $0.0600 N/A
- -------------------------------------------------------------------------------
Voluntarily Waived Fees and Expenses
Assumed by the Adviser Per Share.......... $ 0.60 $ 1.50 $ 0.58
Ratio of Expenses to Average Net Assets
Including Expense Offsets................. 0.95% 0.95% 0.95%*
- -------------------------------------------------------------------------------
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
# Beginning with fiscal year 1996, the Portfolio is required to disclose the
average commission rate per share it paid for portfolio trades, on which
commissions were charged, during the period.

The accompanying notes are an integral part of the financial statements.

16
<PAGE>

CHICAGO ASSET MANAGEMENT INTERMEDIATE BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

<TABLE>
<CAPTION>
JANUARY 24,
YEAR ENDED YEAR ENDED 1995*** TO
APRIL 30, APRIL 30, APRIL 30,
1997 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $ 10.39 $10.33 $10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income....................... 0.61 0.64 0.17
Net Realized and Unrealized Gain on
Investments................................ (0.05) 0.14++ 0.26
- -------------------------------------------------------------------------------
Total from Investment Operations........... 0.56 0.78 0.43
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income....................... (0.62) (0.64) (0.10)
Net Realized Gain........................... (0.03) (0.08) --
- -------------------------------------------------------------------------------
Total Distributions........................ (0.65) (0.72) (0.10)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $ 10.30 $10.39 $10.33
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+................................ 5.53% 7.62% 4.31%**
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)....... $10,044 $7,981 $5,267
Ratio of Expenses to Average Net Assets..... 0.80% 0.84% 0.80%*
Ratio of Net Investment Income to Average
Net Assets................................. 5.88% 6.17% 6.20%*
Portfolio Turnover Rate..................... 31% 24% 0%
- -------------------------------------------------------------------------------
Voluntarily Waived Fees and Expenses Assumed
by the Adviser Per Share................... $ 0.14 $ 0.12 $ 0.08
Ratio of Expenses to Average Net Assets
Including Expense Offsets.................. 0.80% 0.80% 0.80%*
- -------------------------------------------------------------------------------
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser for the periods indicated.
++ The amount shown for a share outstanding throughout the year does not
accord with the aggregate net losses on investments for that year because
of the timing of sales and repurchases of the Portfolio shares in relation
to fluctuating market value of the investments of the Portfolio.

The accompanying notes are an integral part of the financial statements.

17
<PAGE>

CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS

NOTES TO FINANCIAL STATEMENTS

UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The Chicago
Asset Management Value/Contrarian Portfolio and Chicago Asset Management
Intermediate Bond Portfolio (the "Portfolios"), portfolios of UAM Funds Trust,
are diversified, open-end management investment companies. At April 30, 1997,
the UAM Funds were composed of forty-two active portfolios. The financial
statements of the remaining portfolios are presented separately. The objective
of the Chicago Asset Management Value/Contrarian Portfolio is to provide
capital appreciation by investing primarily in the common stock of large
companies. The objective of the Chicago Asset Management Intermediate Bond
Portfolio is to provide a high level of current income consistent with
moderate interest rate exposure by investing primarily in investment grade
bonds with an average weighted maturity between 3 and 10 years.

A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolios in the preparation of
their financial statements. Generally accepted accounting principles may
require management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results may differ
from those estimates.

1. SECURITY VALUATION: Securities listed on a securities exchange for which
market quotations are readily available are valued at the last quoted sales
price as of the close of the exchange on the day the valuation is made or,
if no sale occurred on such day, at the bid price on such day. Price
information on listed securities is taken from the exchange where the
security is primarily traded. Over-the-counter and unlisted securities are
valued at the current bid price. Fixed income securities are stated on the
basis of valuations provided by brokers and/or a pricing service which uses
information with respect to transactions in fixed income securities,
quotations from dealers, market transactions in comparable securities and
various relationships between securities in determining value. Short-term
investments that have remaining maturities of sixty days or less at time of
purchase are valued at amortized cost, if it approximates market value. The
value of other assets and securities for which no quotations are readily
available is determined in good faith at fair value using methods
determined by the Board of Trustees.

2. FEDERAL INCOME TAXES: It is each Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements.

3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolios' custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolios have the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.

18
<PAGE>

CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
repurchase agreements. This joint repurchase agreement is covered by the
same collateral requirements as discussed above.

4. DISTRIBUTIONS TO SHAREHOLDERS: Each Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.

The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles. These differences
are primarily due to differing book and tax treatments in the timing of the
recognition of gains or losses on investments and in-kind transactions.

Permanent book and tax basis differences relating to shareholder
distributions resulted in reclassifications as follows:

<TABLE>
<CAPTION>
ACCUMULATED
UNDISTRIBUTED NET
CHICAGO ASSET MANAGEMENT COMPANY NET INVESTMENT REALIZED PAID IN
PORTFOLIOS INCOME GAIN (LOSS) CAPITAL
-------------------------------- -------------- ----------- -------
<S> <C> <C> <C>
Value/Contrarian....................... 4,449 -- (4,449)
Intermediate Bond...................... 352 4,020 (4,372)
</TABLE>

5. ORGANIZATION COST: Costs incurred by each Portfolio in connection with
its organization have been deferred and are being amortized on a straight-
line basis over a five year period.

6. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual basis. Discounts and premiums
on securities purchased are amortized using the effective yield basis over
their respective lives. Most expenses of the UAM Funds can be directly
attributed to a particular portfolio. Expenses which cannot be directly
attributed are apportioned among the portfolios of the UAM Funds based on
their relative net assets. Custodian fees for the Portfolios have been
increased to include expense offsets, if any, for custodian balance
credits.

B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Chicago Asset Management Company (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolios at a fee calculated at an annual rate of average
daily net assets, as follows:

<TABLE>
<CAPTION>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS RATE
- ------------------------------------------- ------
<S> <C>
Value/Contrarian......................................................... 0.625%
Intermediate Bond........................................................ 0.48%
</TABLE>

19
<PAGE>

CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Until further notice, the Adviser has voluntarily agreed to waive a portion of
its advisory fees and to assume expenses, if necessary, in order to keep the
Portfolios' total annual operating expenses (excluding interest, taxes and
extraordinary expenses), after the effect of expense offset arrangements, from
exceeding 0.95% and 0.80% of average daily net assets, respectively.

C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, computed
daily and payable monthly, of 0.19% of the first $200 million of the combined
aggregate net assets; plus 0.11% of the next $800 million of the combined
aggregate net assets; plus 0.07% of the next $2 billion of the combined
aggregate net assets; plus 0.05% of the combined aggregate net assets in
excess of $3 billion. The fees are allocated among the portfolios of the UAM
Funds on the basis of their relative net assets and are subject to a graduated
minimum fee schedule per portfolio which rises from $2,000 per month, upon
inception of a portfolio, to $70,000 annually after two years. For portfolios
with more than one class of shares, the minimum annual fee increases to
$90,000. In addition, the Administrator receives a Portfolio-specific monthly
fee at an annual rate of 0.06% of average daily net assets of the Chicago
Asset Management Value/Contrarian Portfolio and 0.04% of average daily net
assets for Chicago Asset Management Intermediate Bond Portfolio. The
Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan
Bank, under which CGFSC agrees to provide certain services, including but not
limited to, administration, fund accounting, dividend disbursing and transfer
agent services. Pursuant to the Mutual Funds Service Agreement, the
Administrator pays CGFSC a monthly fee.

For the year ended April 30, 1997, CGFSC was paid the following amounts by the
Administrator:

<TABLE>
<CAPTION>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
- -------------------------------------------
<S> <C>
Value/Contrarian....................................................... $74,076
Intermediate Bond...................................................... 76,798
</TABLE>

D. CUSTODIAN: Effective July 17, 1996, The Chase Manhattan Bank (the "Bank"),
an affiliate of CGFSC, is custodian for the Portfolios' assets held in
accordance with the custodian agreement. For the period July 17, 1996 to April
30, 1997, the amount charged to the Portfolios by the Bank is as follows:

<TABLE>
<CAPTION>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS
- -------------------------------------------
<S> <C>
Value/Contrarian........................................................ $4,101
Intermediate Bond....................................................... --
</TABLE>

As of April 30, 1997, $3,469 remains unpaid for the Chicago Asset Management
Value/Contrarian Portfolio.

E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolios. The
Distributor does not receive any fee or other compensation with respect to the
Portfolios.

20
<PAGE>

CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

G. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds, and reimbursement of expenses incurred in
attending Trustee meetings.

H. PURCHASES AND SALES: For the year ended April 30, 1997, the Portfolios'
purchases and sales of investment securities other than long-term U.S.
Government and agency securities and short-term securities were:

<TABLE>
<CAPTION>
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS PURCHASES SALES
- ------------------------------------------- ----------- --------
<S> <C> <C>
Value/Contrarian Portfolio................................ $12,538,797 $436,440
Intermediate Bond Portfolio............................... 2,438,160 992,612
</TABLE>

Purchases and sales of long-term U.S. Government securities were $1,710,941
and $1,558,551 respectively, for Chicago Asset Management Intermediate Bond
Portfolio. There were no purchases and sales of long-term U.S. Government
securities for Chicago Asset Management Value/Contrarian Portfolio.

I. LINE OF CREDIT: The Chicago Asset Management Intermediate Bond Portfolio,
along with certain other Portfolios of UAM Funds, collectively entered into an
agreement which enables them to participate in a $100 million unsecured line
of credit with several banks. Borrowings will be made solely to temporarily
finance the repurchase of Capital shares. Interest is charged to each
participating Portfolio based on its borrowings at a rate per annum equal to
the Federal Funds rate plus 0.50%. In addition, a commitment fee of 1/8th of
1% per annum, payable at the end of each calendar quarter, is accrued by each
participating Portfolio based on its average daily unused portion of the line
of credit. During the year ended April 30, 1997, the Chicago Asset Management
Intermediate Bond Portfolio had no borrowings under the agreement.

J. OTHER: At April 30, 1997, the percentage of total shares outstanding held
by record shareholders owning 10% or greater of the aggregate total shares
outstanding for each Portfolio was as follows:

<TABLE>
<CAPTION>
NO. OF %
CHICAGO ASSET MANAGEMENT COMPANY PORTFOLIOS SHAREHOLDERS OWNERSHIP
- ------------------------------------------- ------------ ---------
<S> <C> <C>
Value/Contrarian......................................... 2 78.5
Intermediate Bond........................................ 1 90.2
</TABLE>

21
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
UAM Funds Trust and Shareholders of
Chicago Asset Management Value/Contrarian Portfolio
Chicago Asset Management Intermediate Bond Portfolio

In our opinion, the accompanying statements of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Chicago Asset
Management Value/Contrarian Portfolio and the Chicago Asset Management
Intermediate Bond Portfolio (the "Portfolios"), Portfolios of UAM Funds Trust,
at April 30, 1997, and the results of each of their operations, the changes in
each of their net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Portfolios' 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 April 30, 1997 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.

Price Waterhouse LLP
Boston, Massachusetts
June 9, 1997

- -------------------------------------------------------------------------------

FEDERAL INCOME TAX INFORMATION (UNAUDITED):

For the year ended April 30, 1997, the percentage of dividends paid from
investment company taxable income that qualify for the 70% dividend received
deduction for corporate shareholders is 55.86% for Chicago Asset Management
Value/Contrarian Portfolio.

The percentage of income earned from direct treasury obligations was 28.06%
for Chicago Asset Management Intermediate Bond Portfolio.

Chicago Asset Management Value/Contrarian Portfolio and Chicago Asset
Management Intermediate Bond Portfolio hereby designate approximately $54,000
and $8,000, respectively, as long-term capital gain dividends for the purpose
of the dividend paid deduction on its federal income tax returns.

22
<PAGE>

- -------------------------------------------------------------------------------

UAM FUNDS
IRC ENHANCED INDEXPORTFOLIO

- -------------------------------------------------------------------------------

OFFICERS AND TRUSTEES

William H. Park
Vice President

- -------------------------------------------------------------------------------

INVESTMENT ADVISER
Investment Research Company
16236 San Dieguito Road
Suite 2-20
Rancho Santa Fe, CA 92067

- -------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.

- -------------------------------------------------------------------------------

[LOGO OF UAM FUNDS APPEARS HERE]

IRC
ENHANCED
INDEX
PORTFOLIO

- -------------------------------------------------------------------------------

ANNUAL REPORT
APRIL 30, 1997
<PAGE>

Dear Shareholders:

The IRC Enhanced Index Portfolio (the "Portfolio") managed by Investment
Research Company ("IRC") returned 21.48% for the annual period ended April 30,
1997 relative to a return of 25.12% for the S&P 500 Index. During this record
setting period, some segments of the market were handsomely rewarded while
others experienced much more moderate returns. For example, while the S&P 500
Index soared 25.12% over the past twelve months, the S&P 400 Mid Cap Index
gained only 10.15% in the same period. Likewise the returns to growth segments
dominated those of the value counterparts, the S&P/BARRA Growth Index earning
30.48% compared to 19.82% for the S&P/BARRA Value Index. While the Portfolio
reflects the average capitalization and industry composition of the S&P 500
Index benchmark, IRC's investment strategy favors companies with higher
dividends and lower price/earnings. The Portfolio performs best during periods
when investors pay attention to the relationships between pricing and
underlying company fundamentals. The Portfolio's relative underperformance can
be attributed to the spectacular returns earned by a relative handful of S&P
500 companies with extremely ambitious earning's expectations. IRC continues
to invest in companies with solid fundamentals and relatively low volatility
which we believe represent the best opportunity for long term value added.

OVERVIEW OF ECONOMIC AND MARKET CONDITIONS

The S&P 500 Index, which had a record setting year in 1995, continued to
perform very well during 1996. Inflation was a concern during much of 1996;
however economic data failed to show any proof of rapid price increases. Also,
worry of a slowdown in GDP growth was mitigated by continued good corporate
earnings during 1996. Cash continued to pour into mutual funds at record rates
which helped fuel the markets' appreciation.

After the modest year-end reversal in December, 1996, the stock market resumed
in January, 1997 its climb into record territory. The dominance of growth
stocks during 1996 continued, with the S&P/BARRA Growth Index outperforming in
January, 1997 the S&P/BARRA Value Index by 2.22% (7.83% vs. 4.61%,
respectively.) However, signs of renewed inflation, weaker earnings reports
and the anticipation of Federal Reserve action dominated many investor
concerns during February, March and April. The market's sell-off in March was
seen by many to be based in major part upon the expectation of continued
short-term rate increases by the Fed. Although the market has since recovered
most of its losses, and fears of further Fed action have somewhat abated, this
source of volatility will most likely remain with the market through this
year.

INVESTMENT STRATEGIES AND TECHNIQUES APPLIED BY IRC DURING THE PERIOD

IRC's entire investment process is based on proprietary research and years of
hands on portfolio management by the firm's investment committee. Our approach
to valuation and portfolio management centers around diversified positions in
stable, fundamentally attractive securities. Since IRC makes no forecasts of
market or economic sector returns, market and sector timing are not used.
Portfolios are kept as fully invested as practicable and the economic sector
weights of all portfolios closely reflect the weights of the benchmark index.
While IRC's value added is independent of market direction, our performance
will be strongest when investors link securities' prices to underlying
fundamentals.

VALUATION

IRC adds value through systematically constructed positions in companies that
are fundamentally attractive on a risk-adjusted basis. Companies must pass
sector specific filters for earnings and dividends. All candidate

1
<PAGE>

securities must then pass through a volatility/momentum screen where the
capitalization weighted geometric return to the fundamentally attractive
stocks is maximized. This volatility/momentum screen ensures that we are
identifying companies with a stable or improving price pattern, eliminating
"value traps" which are companies that might appear to be fundamentally
attractive because their prices are falling faster than their earnings or
dividends.

Research performed at IRC in 1996 led to some modifications in our valuation
process. Originally, our valuation screens were applied uniformly across all
segments of the market. Based on observations of varying treatment of earnings
and dividends across various market sectors, filters were adjusted to reflect
market preferences in some sectors. For example, companies in the electronics
sector are no longer excluded as buy candidates if their dividend payout is
below average. However, these firms must have a P/E ratio which is below
average for electronics firms.

PORTFOLIO MANAGEMENT

All acceptable candidates across economic sectors form the new investible
universe used in the portfolio rebalance. This rebalance typically occurs on a
90 day cycle and the oldest one-third of each client's portfolio is re-
examined. This process, which is known as time diversification, helps us to
focus our buy and sell decisions on longer term fundamental attractiveness. By
segregating the holdings we minimize noise transactions caused by short term
price behavior, a prevalent problem which adversely affects quantitative
portfolio managers. Finally, IRC evaluates the aggregate portfolio to ensure
that it offers appropriate market capitalization, tracking error, and other
supplemental factors. Trading is performed on a best execution basis. We make
extensive use of electronic crossing networks and typically maintain a per
share trade cost below 2.5 cents per share.

CURRENT OUTLOOK

IRC does not attempt to overlay its quantitative stock selection models with
any type of predicted economic outlook. However, due to very high stock prices
relative to historical measures of value, IRC's models have positioned the
Portfolio with a distinct value bias. An integral component of IRC's strategy
is to control the risk of significant underperformance in the event of a
market downturn.

Investment Research Company

The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser did not have temporary fee waivers and did not assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.

2
<PAGE>

Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
IRC ENHANCED INDEX PORTFOLIO AND THE STANDARD & POOR'S 500 INDEX (S&P 500)

- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1997
- --------------------------------------------------------------------------------
1 YEAR SINCE 1/23/96*++
- --------------------------------------------------------------------------------
21.48% 19.46%
- --------------------------------------------------------------------------------

[LINE GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
IRC ENHANCED INDEX PORTFOLIO S&P 500 INDEX+
<S> <C> <C>
1/23/96*++ 10,000 10,000
4/30/96 10,320 10,340
4/30/97 12,537 12,937
</TABLE>

Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.

* Commencement of Operations

** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.

+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees,
if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions. The
comparative index has been adjusted to reflect reinvestment of dividends on
securities in the index.

++ For comparative purposes, the value of the S&P 500 Index on 1/31/96 is used
as the beginning value on 1/23/96.

Definition of the Comparative Index
-----------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.

Please note that one cannot invest in an unmanaged index.

3
<PAGE>

IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1997
<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (91.0%)
- -------------------------------------------------------------------------------
BASIC INDUSTRIES (0.8%)
Aluminum Company of America................................. 700 $ 48,912
- -------------------------------------------------------------------------------
CAPITAL GOODS (5.5%)
AlliedSignal, Inc........................................... 1,700 122,825
Boeing Co. ................................................. 1,300 128,212
Honeywell, Inc. ............................................ 700 49,437
McDermott International, Inc. .............................. 100 1,850
Perkin-Elmer Corp. ......................................... 100 7,263
Tyco International Ltd. .................................... 500 30,500
----------
340,087
- -------------------------------------------------------------------------------
COMMUNICATIONS (8.1%)
Ameritech Corp.............................................. 1,900 116,137
AT&T Corp................................................... 2,200 73,700
BellSouth Corp. ............................................ 1,300 57,850
GTE Corp. .................................................. 1,300 59,637
McGraw-Hill Cos., Inc....................................... 100 5,088
SBC Communications, Inc..................................... 800 44,400
Sprint Corp. ............................................... 600 26,325
Time Warner, Inc. .......................................... 1,600 72,000
US West Communications Group................................ 600 21,075
Westinghouse Electric Corp. ................................ 1,200 20,400
----------
496,612
- -------------------------------------------------------------------------------
COMPUTERS & OFFICE EQUIPMENT (8.1%)
Automatic Data Processing, Inc. ............................ 2,900 131,225
Hewlett-Packard Co. ........................................ 200 10,500
International Business Machines Corp........................ 1,300 208,975
Pitney Bowes, Inc........................................... 2,100 134,400
Shared Medical Systems Corp................................. 400 16,850
----------
501,950
- -------------------------------------------------------------------------------
CONSTRUCTION (0.4%)
Kaufman & Broad Home Corp................................... 1,600 22,200
Louisiana-Pacific Corp...................................... 200 3,725
----------
25,925
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

4
<PAGE>

IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
CONSUMER DURABLES (0.5%)
TRW Inc. .................................................... 600 $ 31,275
- --------------------------------------------------------------------------------
CONSUMER FOODS (8.6%)
American Brands, Inc......................................... 900 48,375
Brown-Forman Corp., Class B.................................. 1,000 50,500
Coca Cola Co. ............................................... 1,000 63,625
ConAgra, Inc................................................. 600 34,575
Heinz (H.J.) Co.............................................. 400 16,600
Philip Morris Cos., Inc...................................... 5,100 200,812
Unilever N.V.--New York Shares............................... 600 117,750
----------
532,237
- --------------------------------------------------------------------------------
CONSUMER NON-DURABLES (5.5%)
Bemis Co., Inc............................................... 1,200 45,750
Clorox Co. .................................................. 100 12,737
Colgate-Palmolive Co. ....................................... 200 22,200
Georgia-Pacific Corp. ....................................... 100 7,800
International Paper Co. ..................................... 1,600 67,600
Minnesota Mining & Manufacturing Co. ........................ 1,400 121,800
Temple-Inland, Inc. ......................................... 100 5,550
Union Camp Corp.............................................. 500 24,313
VF Corp...................................................... 400 28,850
----------
336,600
- --------------------------------------------------------------------------------
DEPOSITORY INSTITUTIONS (7.2%)
Ahmanson (H.F.) & Co. ....................................... 200 7,625
BankAmerica Corp............................................. 800 93,500
BankBoston Corp. ............................................ 400 29,100
Citicorp..................................................... 1,400 157,675
Fifth Third Bancorp.......................................... 600 44,775
MBNA Corp. .................................................. 2,450 80,850
SunTrust Banks, Inc.......................................... 600 30,450
----------
443,975
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

5
<PAGE>

IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
ELECTRONICS (6.5%)
Cooper Industries, Inc. ..................................... 600 $ 27,600
General Electric Co. ........................................ 700 77,613
Intel Corp. ................................................. 800 122,400
Lucent Technologies, Inc..................................... 888 52,503
Motorola, Inc................................................ 500 28,625
National Service Industries, Inc. ........................... 600 25,275
Northern Telecom Ltd. ....................................... 300 21,788
Whirlpool Corp............................................... 900 42,075
----------
397,879
- --------------------------------------------------------------------------------
FABRICATED PRODUCTS (3.8%)
Armstrong World Industries, Inc.............................. 200 13,150
Dow Chemical Co. ............................................ 400 33,950
Du Pont (E.I.) de Nemours & Co............................... 1,500 159,187
Eastman Chemical Co. ........................................ 100 5,100
PPG Industries, Inc.......................................... 300 16,313
Rohm & Haas Co. ............................................. 100 8,325
----------
236,025
- --------------------------------------------------------------------------------
HEALTH CARE (9.3%)
*Beverly Enterprises......................................... 400 5,800
*Boston Scientific Corp. .................................... 1,800 86,850
Bristol-Myers Squibb Co...................................... 200 13,100
Johnson & Johnson............................................ 3,100 189,875
Medtronic, Inc............................................... 1,500 103,875
Pfizer, Inc.................................................. 1,000 96,000
US Surgical Corp. ........................................... 1,400 47,950
Warner Lambert Co. .......................................... 300 29,400
----------
572,850
- --------------------------------------------------------------------------------
MINING (0.5%)
Freeport-McMoRan Copper & Gold, Inc., Class B................ 500 14,562
Newmont Mining Corp. ........................................ 400 13,850
----------
28,412
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

6
<PAGE>

IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997
<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
OIL (8.1%)
Ashland Inc. ................................................ 1,000 $ 44,625
Atlantic Richfield Co. ...................................... 1,000 136,125
Exxon Corp. ................................................. 1,200 67,950
Kerr-McGee Corp.............................................. 900 54,337
Occidental Petroleum Corp. .................................. 1,100 24,338
Phillips Petroleum Co........................................ 1,300 51,187
Texaco, Inc. ................................................ 900 94,950
USX-Marathon Group........................................... 900 24,863
----------
498,375
- --------------------------------------------------------------------------------
OTHER FINANCIAL (6.2%)
Allstate Corp................................................ 500 32,750
Dean Witter Discover & Co. .................................. 1,600 61,200
General Re Corp.............................................. 400 66,900
Loews Corp................................................... 700 64,312
Merrill Lynch & Co., Inc..................................... 200 19,050
Morgan Stanley Group, Inc.................................... 200 12,625
Salomon, Inc. ............................................... 1,100 55,000
Travelers Group, Inc......................................... 1,266 70,105
USF&G Corp. ................................................. 100 2,000
----------
383,942
- --------------------------------------------------------------------------------
RETAIL SERVICES (4.1%)
Albertson's, Inc............................................. 700 23,100
American Stores Co. ......................................... 400 18,200
CVS Corp. ................................................... 1,100 54,587
Dayton Hudson Corp. ......................................... 1,300 58,500
Gap, Inc..................................................... 700 22,313
Harcourt General, Inc........................................ 400 18,500
Longs Drug Stores, Inc....................................... 100 2,525
Rite Aid Corp. .............................................. 200 9,200
Walgreen Co. ................................................ 1,000 46,000
----------
252,925
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

7
<PAGE>

IRC ENHANCED INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997
<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
SERVICES (3.8%)
Crane Co. .................................................. 550 $ 20,556
EG&G, Inc. ................................................. 500 9,438
Ryder System, Inc. ......................................... 800 24,900
Safety-Kleen Corp. ......................................... 700 10,413
Service Corp. International................................. 300 10,275
Sysco Corp. ................................................ 2,100 74,550
W.W. Grainger, Inc. ........................................ 1,100 82,913
----------
233,045
- -------------------------------------------------------------------------------
TRANSPORTATION (1.2%)
CSX Corp. .................................................. 1,100 51,287
Union Pacific Corp. ........................................ 400 25,500
----------
76,787
- -------------------------------------------------------------------------------
UTILITIES (2.8%)
Consolidated Edison Co. of New York, Inc. .................. 2,100 58,275
Peco Energy Co. ............................................ 2,000 39,500
People's Energy Corp. ...................................... 100 3,375
PP&L Resources, Inc. ....................................... 400 7,850
Public Service Enterprise Group, Inc. ...................... 500 12,063
Northern States Power Co. .................................. 200 9,100
Ohio Edison Co. ............................................ 500 10,000
Southern Co. ............................................... 1,500 30,563
----------
170,726
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (91.0%) (COST $5,276,951) (a).............. 5,608,539
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (9.0%).................... 552,983
- -------------------------------------------------------------------------------
NET ASSETS (100%)............................................ $6,161,522
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
(a) The cost for federal income tax purposes was $5,276,951. At April 30,
1997, net unrealized appreciation for all securities based on tax cost was
$331,588. This consisted of aggregate gross unrealized appreciation for
all securities of $454,543 and aggregate gross unrealized depreciation for
all securities of $122,955.

The accompanying notes are an integral part of the financial statements.

8
<PAGE>

IRC ENHANCED INDEX PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997

<TABLE>
- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at Cost............................................... $5,276,951
==========
Investments, at Value.............................................. $5,608,539
Cash............................................................... 573,637
Receivable for Portfolio Shares Sold............................... 1,144
Dividends Receivable............................................... 5,622
Receivable from Investment Advisor--Note B......................... 10,210
- -------------------------------------------------------------------------------
Total Assets...................................................... 6,199,152
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Administrative Fees--Note C............................ 6,306
Payable for Account Services Fees--Note F.......................... 1,481
Payable for Trustees' Fees--Note G................................. 459
Other Liabilities.................................................. 29,384
- -------------------------------------------------------------------------------
Total Liabilities................................................. 37,630
- -------------------------------------------------------------------------------
NET ASSETS.......................................................... $6,161,522
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
Paid in Capital.................................................... $5,090,406
Accumulated Net Realized Gain...................................... 739,528
Unrealized Appreciation............................................ 331,588
- -------------------------------------------------------------------------------
NET ASSETS.......................................................... $6,161,522
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding (Unlimited authorization, no par val-
ue)............................................................... 501,777
Net Asset Value, Offering and Redemption Price Per Share........... $ 12.28
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

9
<PAGE>

IRC ENHANCED INDEX PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended April 30, 1997

<TABLE>
- --------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends.................................................. $113,515
- --------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees................................................ $ 33,999
Less: Fees Waived......................................... (27,167) 6,832
--------
Administrative Fees--Note C................................ 52,786
Audit Fees................................................. 10,355
Printing Fees.............................................. 22,027
Filing and Registration Fees............................... 20,359
Custodian Fees--Note D..................................... 4,890
Account Services Fees--Note F.............................. 1,481
Trustees' Fees--Note G..................................... 2,043
Other Expenses............................................. 3,599
- --------------------------------------------------------------------------------
Total Expenses............................................ 124,372
Expense Offset--Note A..................................... (2,929)
- --------------------------------------------------------------------------------
Net Expenses.............................................. 121,443
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS......................................... (7,928)
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS............................ 825,307
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON IN-
VESTMENTS.................................................. 172,032
- --------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS..................................... 997,339
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $989,411
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

10
<PAGE>

IRC ENHANCED INDEX PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
YEAR JANUARY 23,
ENDED 1996* TO
APRIL 30, APRIL 30,
1997 1996
- ----------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income (Loss).......................... $ (7,928) $ 8,478
Net Realized Gain..................................... 825,307 14,166
Net Change in Unrealized Appreciation/Depreciation.... 172,032 159,556
- ----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Opera-
tions............................................... 989,411 182,200
- ----------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income................................. (6,339) (8,122)
Net Realized Gain..................................... (86,034) --
- ----------------------------------------------------------------------------------
Total Distributions.................................. (92,373) (8,122)
- ----------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular....................................... 3,610,570 6,001,748
--In Lieu of Cash Distributions..................... 92,115 8,122
Redeemed.............................................. (2,370,940) (2,251,209)
- ----------------------------------------------------------------------------------
Net Increase from Capital Share Transactions......... 1,331,745 3,758,661
- ----------------------------------------------------------------------------------
Total Increase........................................ 2,228,783 3,932,739
Net Assets:
Beginning of Period................................... 3,932,739 --
- ----------------------------------------------------------------------------------
End of Period (including undistributed net investment
income of $0 and $356, respectively)................. $ 6,161,522 $ 3,932,739
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued........................................ 329,667 597,185
In Lieu of Cash Distributions........................ 8,282 779
Redeemed............................................. (217,949) (216,187)
- ----------------------------------------------------------------------------------
120,000 381,777
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations

The accompanying notes are an integral part of the financial statements.

11
<PAGE>

IRC ENHANCED INDEX PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD

<TABLE>
<CAPTION>
YEAR JANUARY 23,
ENDED 1996* TO
APRIL 30, APRIL 30,
1997 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................. $ 10.30 $ 10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)......................... (0.01) 0.02
Net Realized and Unrealized Gain on Investments...... 2.20 0.30
- -------------------------------------------------------------------------------
Total from Investment Operations.................... 2.19 0.32
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income................................ (0.02) (0.02)
Net Realized Gain.................................... (0.19) --
- -------------------------------------------------------------------------------
Total Distributions................................. (0.21) (0.02)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD........................ $ 12.28 $ 10.30
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+......................................... 21.48% 3.20%***
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)................ $ 6,162 $ 3,933
Ratio of Expenses to Average Net Assets.............. 2.56% 2.52%**
Ratio of Net Investment Income (Loss) to Average Net
Assets.............................................. (0.16)% 0.67%**
Portfolio Turnover Rate.............................. 117% 31%
Average Commission Rate.............................. $0.0227 $0.0205
- -------------------------------------------------------------------------------
Voluntarily Waived Fees and Expenses Assumed by the
Adviser Per Share................................... $ 0.03 $ 0.03
Ratio of Expenses to Average Net Assets Including Ex-
pense Offsets....................................... 2.50% 2.50%**
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
** Annualized
*** Not Annualized
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.

The accompanying notes are an integral part of the financial statements.

12
<PAGE>

IRC ENHANCED INDEX PORTFOLIO

NOTES TO FINANCIAL STATEMENTS

UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The IRC
Enhanced Index Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is
a diversified, open-end management investment company. At April 30, 1997, the
UAM Funds were comprised of forty-two active portfolios. The financial
statements of the remaining portfolios are presented separately. The objective
of the IRC Enhanced Index Portfolio is to provide a total return exceeding
that of the S&P 500 Index.

1. SECURITY VALUATION: Securities listed on a securities exchange for which
market quotations are readily available are valued at the last quoted sales
price as of the close of the exchange on the day the valuation is made or,
if no sale occurred on such day, at the bid price on such day. Price
information on listed securities is taken from the exchange where the
security is primarily traded. Over-the-counter and unlisted securities are
valued at the current bid price. Short-term investments that have remaining
maturities of sixty days or less at time of purchase are valued at
amortized cost, if it approximates market value. The value of other assets
and securities for which no quotations are readily available is determined
in good faith at fair value using methods determined by the Board of
Trustees.

3. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.

Permanent book and tax basis differences relating to shareholder
distributions resulted in reclassifications of $13,911 to increase
undistributed net investment income and $13,911 to decrease accumulated net
realized gain.

4. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Most expenses of the UAM Funds can be directly attributed to a particular
portfolio. Expenses which cannot be directly attributed are apportioned
among the portfolios of the UAM Funds based on their relative net assets.
Custodian fees for the Portfolio have been increased to include expense
offsets, if any, for custodian balance credits.

13
<PAGE>

IRC ENHANCED INDEX PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Investment Research Company (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio at a fee calculated at an annual rate of 0.70% of
average daily net assets. The Adviser has voluntarily agreed to waive a
portion of its advisory fees and to assume expenses, if necessary, in order to
keep the Portfolio's total annual operating expenses, after the effect of
expense offset arrangements, from exceeding 2.50% of average daily net assets.

C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, computed
daily and payable monthly, of 0.19% of the first $200 million of the combined
aggregate net assets; plus 0.11% of the next $800 million of the combined
aggregate net assets; plus 0.07% of the next $2 billion of the combined
aggregate net assets; plus 0.05% of the combined aggregate net assets in
excess of $3 billion. The fees are allocated among the portfolios of the UAM
Funds on the basis of their relative net assets and are subject to a graduated
minimum fee schedule per portfolio which rises from $2,000 per month, upon
inception of a portfolio, to $70,000 annually after two years. For portfolios
with more than one class of shares, the minimum annual fee increases to
$90,000. In addition, the Administrator receives a Portfolio-specific monthly
fee at an annual rate of 0.04% of average daily net assets of the Portfolio.
The Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan
Bank, under which CGFSC agrees to provide certain services, including but not
limited to, administration, fund accounting, dividend disbursing and transfer
agent services. Pursuant to the Mutual Funds Service Agreement, the
Administrator pays CGFSC a monthly fee. For the year ended April 30, 1997,
$50,857 was paid to CGFSC for its services.

E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.

14
<PAGE>

IRC ENHANCED INDEX PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

G. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds, and reimbursement of expenses incurred in
attending Trustee meetings.

H. PURCHASES AND SALES: For the year ended April 30, 1997, the Portfolio made
purchases of $6,133,981 and sales of $5,484,269 of investment securities other
than long-term U.S. Government and short-term securities. There were no
purchases or sales of long-term U.S. Government securities.

J. OTHER: At April 30, 1997, 73.5% of total shares outstanding were held by 3
record shareholders owning more than 10% of the aggregate total shares
outstanding.

15
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
UAM Funds Trust and Shareholders of
IRC Enhanced Index Portfolio

In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the IRC Enhanced
Index Portfolio (the "Portfolio"), a Portfolio of UAM Funds Trust, at April
30, 1997, and the results of its operations, the changes in its net assets and
the financial highlights for the periods, indicated in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio'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 April 30, 1997 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.

Price Waterhouse LLP
Boston, Massachusetts
June 9, 1997

- -------------------------------------------------------------------------------

FEDERAL INCOME TAX INFORMATION (UNAUDITED):

For the year ended April 30, 1997, the percentage of dividends paid from
investment company taxable income that qualify for the 70% dividend received
deduction for Corporation shareholders for the IRC Enhanced Index Portfolio is
90.64%.

16
<PAGE>

- --------------------------------------------------------------------------------
UAM FUNDS
JACOBS INTERNATIONAL
OCTAGON PORTFOLIO
- --------------------------------------------------------------------------------
OFFICERS AND TRUSTEES

William H. Park
Vice President
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Jacobs Asset Management
200 East Broward Boulevard
Suite 1920
Fort Lauderdale, FL 33301
- --------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
- --------------------------------------------------------------------------------
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
- --------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- --------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
- --------------------------------------------------------------------------------

[LOGO OF UAM FUNDS APPEARS HERE]

JACOBS
INTERNATIONAL
OCTAGON
PORTFOLIO

- --------------------------------------------------------------------------------

ANNUAL REPORT
APRIL 30, 1997
<PAGE>

JACOBS ASSET MANAGEMENT
JACOBS INTERNATIONAL OCTAGON PORTFOLIO
APRIL 1997 REVIEW

To the Shareholders of Jacobs International Octagon Portfolio:

The Jacobs International Octagon Portfolio (the "Portfolio") commenced
operations on January 2, 1997 as part of the UAM Funds Trust. The Portfolio
seeks to provide long-term capital appreciation by investing in equity
securities of companies in developed and emerging markets. The Portfolio may
invest across the market capitalization spectrum, although it intends to
emphasize smaller capitalization stocks. As Investment Adviser of the
Portfolio, we are pleased to provide you with the Portfolio's Annual Report
for the period ended April 30, 1997.

For the period January 2, 1997 to April 30, 1997 the Portfolio returned
1.70%, net of fees, versus the MSCI EAFE Index of -1.04%. The period has seen
extreme volatility in global stock markets. The main catalyst has been
accelerating economic growth in the U.S., and an upward trend in interest
rates culminating in the recent hike in the Fed Funds rate to 5.5%. A booming
U.S. economy and upward pressure on interest rates has lead to a much stronger
U.S. Dollar, which, in turn, has undermined the international equity returns
for Dollar based investors. We do not use any currency hedging strategies in
the Portfolio, so the Dollar's strength has had a negative impact on returns.
In general, the Portfolio's best performance was in Latin America, followed by
Europe, with Asia being fairly weak.

Jacobs continues to use our bottom-up value approach for investing this and
all of our portfolios. During the period, our top five country holdings
included Hong Kong, Brazil, United Kingdom, France and Mexico. These five
holdings made up 41.9% of the total portfolio. The Portfolio was split
approximately 50.1% large cap issues and 38.4% small cap issues. We have
defined small cap to be companies with market capitalization less than $1
billion. The Portfolio reflected 56.7% developed markets and 31.8% emerging
markets.

Thank you for your continued confidence in Jacobs Asset Management and the
Jacobs International Octagon Portfolio.

Sincerely,

/s/ Daniel L. Jacobs
Daniel L. Jacobs, CFA
President
Jacobs Asset Management

1
<PAGE>

Performance Comparison
================================================================================
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
JACOBS INTERNATIONAL OCTAGON PORTFOLIO AND THE
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX

----------------------------------------------------
CUMULATIVE TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1997
----------------------------------------------------
SINCE 01/02/97*++
----------------------------------------------------
1.70%
----------------------------------------------------

[LINE GRAPH APPEARS HERE]

<TABLE>
JACOBS INTERNATIONAL MORGAN STANLEY CAPITAL
OCTAGON PORTFOLIO INTERNATIONAL EAFE INDEX+
<S> <C> <C>
1/2/97* 10,000 10,000
4/30/97 10,170 9,896
</TABLE>

Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.

* Commencement of Operations

** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.

++ For comparative purposes, the value of the Morgan Stanley Capital
International EAFE Index on 12/31/96 is used as the beginning value on
01/02/97.

Definition of the Comparative Index

The Morgan Stanley Capital International EAFE Index is an unmanaged index
composed of arithmetic, market value weighted averages of the performance of
over 900 securities listed on the stock exchanges of countries in Europe,
Australia and the Far East.

Please note that one cannot invest in an unmanaged index.

2
<PAGE>

JACOBS INTERNATIONAL OCTAGON PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- ----------------------------------------------------------------------------
COMMON STOCKS (84.6%)
- ----------------------------------------------------------------------------
ARGENTINA (3.6%)
Central Costanera S.A., Class B..................... 64,300 $ 225,084
S.A. Importadora y Exportadora de la Patagonia...... 44,160 552,083
Transportadora de Gas del Sur S.A. ADR.............. 13,800 172,500
YPF S.A. ADR........................................ 11,900 328,738
-----------
1,278,405
- ----------------------------------------------------------------------------
AUSTRALIA (1.8%)
News Corp., Ltd. ADR................................ 43,000 650,375
- ----------------------------------------------------------------------------
BRAZIL (6.2%)
*#Bompreco GDR....................................... 13,900 326,739
*CELESC ADR, Class B................................ 500 70,528
*CELESC GDR......................................... 600 86,880
*COELBA............................................. 1,480,000 117,604
Companhia Brasileira de Distribuicao Grupo Pao de
Acucar ADR......................................... 1,100 22,134
Companhia Siderurgica Nacional ADR.................. 4,800 169,201
Copel ADR........................................... 15,500 238,899
Electrobras ADR..................................... 12,100 272,481
Telebras............................................ 2,810,000 302,563
Telebras ADR........................................ 3,600 413,100
Unibanco............................................ 5,500,000 191,367
-----------
2,211,496
- ----------------------------------------------------------------------------
CHINA (3.1%)
*Beijing Datang Power Generation Co., Ltd. ......... 422,000 219,281
Guangdong Electric Power Development Co., Ltd. ..... 267,600 300,903
Shandong Huaneng Power Co., Ltd. ADR................ 51,900 603,338
-----------
1,123,522
- ----------------------------------------------------------------------------
DENMARK (0.7%)
Unidanmark A/S, Class A (Registered)................ 5,180 256,043
- ----------------------------------------------------------------------------
FINLAND (1.3%)
Enso Oy............................................. 54,600 451,430
- ----------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

3
<PAGE>

JACOBS INTERNATIONAL OCTAGON PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- ----------------------------------------------------------------------------
<S> <C> <C>

COMMON STOCKS--(CONTINUED)
- ----------------------------------------------------------------------------
FRANCE (7.6%)
Assurances Generales de France...................... 15,795 $ 514,295
Cardif S.A.......................................... 4,397 550,360
Ile de France Pharmaceutique........................ 1,105 208,412
Lafarge S.A. ....................................... 3,200 210,034
Scor................................................ 8,605 336,398
Sommer-Allibert Industrie AG........................ 10,960 394,636
Sylea............................................... 6,060 518,490
-----------
2,732,625
- ----------------------------------------------------------------------------
GERMANY (1.6%)
Volkswagen AG....................................... 878 556,479
- ----------------------------------------------------------------------------
GREECE (1.0%)
Sarantis S.A........................................ 26,650 360,789
- ----------------------------------------------------------------------------
HONG KONG (8.5%)
Cheung Kong Holdings, Ltd........................... 59,000 517,945
China Light and Power Co., Ltd. .................... 104,500 470,830
Dah Sing Financial Group............................ 32,300 134,270
HKR International Ltd............................... 87,520 107,903
HSBC Holdings plc................................... 24,000 607,281
International Bank of Asia.......................... 705,100 400,521
*Tingyi Holding Co.................................. 2,074,000 506,050
Union Bank of Hong Kong Ltd......................... 215,000 312,258
-----------
3,057,058
- ----------------------------------------------------------------------------
INDIA (0.7%)
#*Videsh Sanchar Nigam Ltd. GDR..................... 13,600 268,532
- ----------------------------------------------------------------------------
INDONESIA (4.4%)
Bank Nisp (Foreign)................................. 1,206,600 521,585
Bimantara Citra (Foreign)........................... 368,000 499,959
Indosat ADR......................................... 14,800 407,000
PT Bank Tiara Asia (Foreign)........................ 132,500 160,920
-----------
1,589,464
- ----------------------------------------------------------------------------
IRELAND (0.6%)
Irish Life plc...................................... 44,380 218,970
- ----------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

4
<PAGE>

JACOBS INTERNATIONAL OCTAGON PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- -----------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- -----------------------------------------------------------------------------
ISRAEL (1.7%)
ECI Telecommunications Ltd. ADR...................... 27,400 $ 599,375
- -----------------------------------------------------------------------------
ITALY (0.8%)
Fila Holding S.p.A. ADR.............................. 6,500 281,125
- -----------------------------------------------------------------------------
JAPAN (5.7%)
Laox................................................. 18,000 214,100
Marukyo.............................................. 21,000 210,083
Matsumotokiyoshi..................................... 9,500 295,589
Nintendo Corp., Ltd.................................. 600 43,860
Paris Miki, Inc...................................... 3,080 90,981
Sankyo Co., Ltd...................................... 23,000 615,990
Sony Corp............................................ 7,000 509,492
Sony Corp. ADR....................................... 700 51,362
-----------
2,031,457
- -----------------------------------------------------------------------------
MEXICO (6.6%)
ALFA, S.A. de C.V., Class A.......................... 34,400 188,849
*Banacci, Class B.................................... 167,900 359,816
Controladora Comercial Mexicana S.A. de C.V. GDR..... 11,900 181,475
*Empaques Ponderosa S.A., Class B.................... 822,800 514,897
Fomenta Economico Mexicano S.A. de C.V., Class B..... 79,000 373,017
*Grupo Elektra S.A. GDR.............................. 500 9,375
*Grupo Financiero Banorte S.A., Class B.............. 148,000 145,354
*Grupo Industrial Camesa S.A. ....................... 473,200 256,202
Hylsamex ADR......................................... 7,000 182,206
Sistema Argos S.A., Class B.......................... 128,200 155,932
-----------
2,367,123
- -----------------------------------------------------------------------------
NETHERLANDS (3.0%)
Akzo Noble N.V. ADR.................................. 9,100 589,225
Apothekers Cooperatie OPG............................ 6,700 194,995
Furgo N.V............................................ 13,030 296,957
-----------
1,081,177
- -----------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

5
<PAGE>

JACOBS INTERNATIONAL OCTAGON PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- ----------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- ----------------------------------------------------------------------------
NORWAY (4.1%)
Gresvig ASA......................................... 22,940 $ 362,429
Nycomed ASA, Class A................................ 19,230 294,363
*Nycomed ASA, Class B............................... 12,140 174,751
SAS Norske ASA, Class B............................. 35,645 360,420
*Storebrand ASA..................................... 47,000 289,101
-----------
1,481,064
- ----------------------------------------------------------------------------
PERU (1.3%)
Credicorp Ltd. ADR.................................. 12,610 264,802
Telefonica del Peru S.A. ADR........................ 7,000 168,000
Telefonica del Peru S.A., Class B................... 12,000 28,840
-----------
461,642
- ----------------------------------------------------------------------------
PHILIPPINES (1.4%)
*Bankard, Inc....................................... 1,233,000 248,004
Marsman & Company, Inc., Class B.................... 1,171,500 266,755
-----------
514,759
- ----------------------------------------------------------------------------
SINGAPORE (1.4%)
Jardine Matheson Holdings, Ltd...................... 60,000 330,000
Mandarin Oriental International Ltd................. 137,498 159,498
-----------
489,498
- ----------------------------------------------------------------------------
SPAIN (2.3%)
Banco de Valencia S.A............................... 33,410 617,645
Electricas Reunidas de Zaragoza, S.A................ 5,087 174,153
Gas y Electricidad, S.A............................. 500 24,649
-----------
816,447
- ----------------------------------------------------------------------------
SWEDEN (5.3%)
Althin Medical AB, Class B.......................... 15,195 248,971
Electrolux AB....................................... 9,896 567,829
Finnveden Invest AB, Class B........................ 8,300 147,109
*Frontec AB, Class B................................ 31,708 242,586
Investment AB Bure.................................. 35,100 443,086
Marieberg Tidnings, Class A Fria.................... 10,185 237,661
-----------
1,887,242
- ----------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

6
<PAGE>

JACOBS INTERNATIONAL OCTAGON PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
<S> <C> <C>

- ----------------------------------------------------------------------------
COMMON STOCKS--(CONTINUED)
- ----------------------------------------------------------------------------
TAIWAN (0.6%)
*Macronix International Co., Ltd. ADR............... 10,400 $ 201,500
- ----------------------------------------------------------------------------
THAILAND (0.6%)
Dhipaya Insurance plc............................... 100,100 206,945
- ----------------------------------------------------------------------------
UNITED KINGDOM (8.7%)
British Telecommunications plc...................... 44,870 328,595
BTR plc............................................. 79,900 326,223
Glaxo Wellcome plc ADR.............................. 9,330 367,369
National Power plc.................................. 38,085 328,271
National Westminster Bank plc....................... 58,805 695,511
Somerfield plc...................................... 116,940 341,038
United Utilities plc................................ 68,295 748,002
-----------
3,135,009
- ----------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $30,387,326)............... 30,309,551
- ----------------------------------------------------------------------------
PREFERRED STOCKS (3.9%)
- ----------------------------------------------------------------------------
BRAZIL (3.9%)
Companhia Brasileira de Distribuicao Grupo Pao de
Acucar............................................. 800,000 16,174
Confeccoes Guararapes S.A........................... 112,200 517,002
Itausa Investimentos Itau S.A....................... 469,000 396,934
Telepar............................................. 531,130 364,609
Telerj.............................................. 350,000 58,256
Unibanco............................................ 1,510,000 55,791
- ----------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (COST $1,430,482)............. 1,408,766
- ----------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

7
<PAGE>

JACOBS INTERNATIONAL OCTAGON PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
<S> <C> <C>

- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (10.9%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.20%, dated 04/30/97, due
05/01/97, to be repurchased at $3,888,562,
collateralized by $3,910,260 of various U.S. Treasury
Notes, 4.75%-6.125%, due 08/31/98-10/31/98, valued at
$3,891,124 (COST $3,888,000).......................... $3,888,000 $ 3,888,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.4%) (COST $35,705,808) (a)........ 35,606,317
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (0.6%)............... 226,473
- -------------------------------------------------------------------------------
NET ASSETS (100%)....................................... $35,832,790
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
# 144A Security--Certain conditions for public resale may exist.
ADR American Depositary Receipt.
GDR Global Depositary Receipt.
(a) The cost for federal income tax purposes was $35,705,808. At April 30,
1997, net unrealized depreciation for all securities based on tax cost was
$99,491. This consisted of aggregate gross unrealized appreciation for all
securities of $1,412,907 and aggregate gross unrealized depreciation for
all securities of $1,512,398.

The accompanying notes are an integral part of the financial statements.

8
<PAGE>

JACOBS INTERNATIONAL OCTAGON PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

At April 30, 1997 sector diversification of the Portfolio was as follows:

<TABLE>
<CAPTION>
SECTOR DIVERSIFICATION (UNAUDITED) % OF NET ASSETS VALUE
- ---------------------------------------------------------------------------------
<S> <C> <C>
Automotive........................................... 4.1% $ 1,469,606
Banks................................................ 11.8 4,217,995
Basic Resources...................................... 0.5 182,206
Beverages, Food & Tobacco............................ 1.5 528,949
Building Materials................................... 0.6 210,034
Computers............................................ 1.2 444,086
Construction......................................... 0.8 272,481
Consumer Durables.................................... 2.5 887,593
Consumer Non-Durables................................ 1.0 360,790
Environment Controls................................. 0.8 296,957
Financial Services................................... 3.3 1,196,259
Food................................................. 4.0 1,421,304
Industrial........................................... 0.7 256,202
Insurance............................................ 5.9 2,116,068
Iron and Steel....................................... 0.5 169,201
Lodging & Restaurants................................ 0.4 159,498
Manufacturing........................................ 0.1 43,860
Metals............................................... 0.4 147,109
Multi-Industry....................................... 5.1 1,831,231
Oil and Gas.......................................... 0.9 328,737
Paper & Packaging.................................... 2.7 966,328
Pharmaceuticals...................................... 6.9 2,462,588
Print and Publishing................................. 0.7 237,661
Real Estate.......................................... 1.7 625,848
Repurchase Agreement................................. 10.9 3,888,000
Retail............................................... 5.2 1,857,054
Technology........................................... 1.4 499,959
Telecommunications................................... 10.0 3,589,245
Textiles & Apparel................................... 2.2 798,127
Transportation....................................... 1.5 532,920
Utilities............................................ 10.1 3,608,421
- ---------------------------------------------------------------------------------
Total Investments.................................. 99.4% $35,606,317
Other Assets and Liabilities......................... 0.6 226,473
- ---------------------------------------------------------------------------------
Net Assets......................................... 100.0% $35,832,790
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

9
<PAGE>

JACOB'S INTERNATIONAL OCTAGON PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997

<TABLE>
- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments (including repurchase agreement), at Cost............ $35,705,808
===========
Investments, at Value............................................ $31,718,317
Repurchase Agreement, at Value................................... 3,888,000
Cash............................................................. 982
Dividends Receivable............................................. 199,173
Receivable for Portfolio Shares Sold............................. 73,432
Foreign Withholding Tax Reclaim Receivable....................... 16,549
Interest Receivable.............................................. 562
- -------------------------------------------------------------------------------
Total Assets.................................................... 35,897,015
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Investment Advisory Fees--Note B..................... 9,190
Payable for Administrative Fees--Note C.......................... 5,205
Payable for Account Services Fees--Note F........................ 95
Payable for Trustees' Fees--Note G............................... 475
Other Liabilities................................................ 49,260
- -------------------------------------------------------------------------------
Total Liabilities............................................... 64,225
- -------------------------------------------------------------------------------
NET ASSETS........................................................ $35,832,790
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSISTS OF:
Paid in Capital.................................................. $35,760,026
Undistributed Net Investment Income.............................. 193,316
Accumulated Net Realized Loss.................................... (20,508)
Unrealized Depreciation.......................................... (100,044)
- -------------------------------------------------------------------------------
NET ASSETS........................................................ $35,832,790
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding (Unlimited authorization, no par
value).......................................................... 3,524,602
Net Asset Value, Offering and Redemption Price Per Share......... $ 10.17
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

10
<PAGE>

JACOB'S INTERNATIONAL OCTAGON PORTFOLIO
STATEMENT OF OPERATIONS
For the Period January 2, 1997* to April 30, 1997

<TABLE>
- ---------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends.................................................. $ 306,387
Interest................................................... 40,870
Less Foreign Taxes Withheld................................ (24,065)
- ---------------------------------------------------------------------------------
Total Income.............................................. 323,192
- ---------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees................................................ $ 59,581
Less: Fees Waived......................................... (23,838) 35,743
--------
Filing and Registration Fees............................... 14,117
Administrative Fees--Note C................................ 13,551
Custodian Fees--Note D..................................... 13,333
Audit Fees................................................. 12,000
Printing Fees.............................................. 11,321
Account Services Fees--Note F.............................. 95
Trustees' Fees--Note G..................................... 950
Other Expenses............................................. 3,312
- ---------------------------------------------------------------------------------
Total Expenses............................................ 104,422
Expense Offset--Note A..................................... --
- ---------------------------------------------------------------------------------
Net Expenses.............................................. 104,422
- ---------------------------------------------------------------------------------
NET INVESTMENT INCOME....................................... 218,770
- ---------------------------------------------------------------------------------
NET REALIZED LOSS:
Investments............................................... (20,509)
Foreign Currency Transactions............................. (25,453)
- ---------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS............................................... (45,962)
- ---------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments............................................... (99,491)
Foreign Currency Translations............................. (553)
- ---------------------------------------------------------------------------------
TOTAL NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION.... (100,044)
- ---------------------------------------------------------------------------------
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCY................ (146,006)
- ---------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 72,764
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations

The accompanying notes are an integral part of the financial statements.

11
<PAGE>

JACOB'S INTERNATIONAL OCTAGON PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
JANUARY 2,
1997* TO
APRIL 30, 1997
- --------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................................... $ 218,770
Net Realized Loss............................................... (45,962)
Net Change in Unrealized Appreciation/Depreciation.............. (100,044)
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations........... 72,764
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular................................................. 35,936,680
Redeemed........................................................ (176,654)
- --------------------------------------------------------------------------------
Net Increase from Capital Share Transactions................... 35,760,026
- --------------------------------------------------------------------------------
Total Increase.................................................. 35,832,790
Net Assets:
Beginning of Period............................................. --
- --------------------------------------------------------------------------------
End of Period (including undistributed net investment income of
$193,316)...................................................... $35,832,790
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued.................................................. 3,542,188
Shares Redeemed................................................ (17,586)
- --------------------------------------------------------------------------------
3,524,602
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations

The accompanying notes are an integral part of the financial statements.

12
<PAGE>

JACOB'S INTERNATIONAL OCTAGON PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD

<TABLE>
<CAPTION>
JANUARY 2,
1997* TO
APRIL 30, 1997
- -------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................ $ 10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.......................................... 0.06
Net Realized and Unrealized Gain on Investments................ 0.11++
- -------------------------------------------------------------------------------
Total from Investment Operations.............................. 0.17
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD.................................. $ 10.17
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+................................................... 1.70%***
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........................... $35,833
Ratio of Expenses to Average Net Assets......................... 1.75%**
Ratio of Net Investment Income to Average Net Assets............ 3.67%**
Portfolio Turnover Rate......................................... 7%
Average Commission Rate......................................... $0.0037
- -------------------------------------------------------------------------------
Voluntarily Waived Fees and Expenses Assumed by the Adviser Per
Share.......................................................... $ 0.01
Ratio of Expenses to Average Net Assets Including Expense Off-
sets........................................................... 1.75%**
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
** Annualized
*** Not Annualized
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
++ The amount shown for a share outstanding throughout the period does not
accord with the aggregate net loss on investments for that period because
of the timing of sales and repurchases of the Portfolio shares in relation
to fluctuating market value of the investments of the Portfolio.

The accompanying notes are an integral part of the financial statements.

13
<PAGE>

JACOBS INTERNATIONAL OCTAGON PORTFOLIO

NOTES TO FINANCIAL STATEMENTS

UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The Jacobs
International Octagon Portfolio (the "Portfolio"), a portfolio of UAM Funds
Trust, is a diversified, open-end management investment company. At April 30,
1997, the UAM Funds were comprised of forty-two active portfolios. The
financial statements of the remaining portfolios are presented separately. The
objective of the Jacobs International Octagon Portfolio is to provide long-
term capital appreciation by investing in equity securities of companies in
developed and emerging markets.

1. SECURITY VALUATION: Securities listed on a securities exchange for which
market quotations are readily available are valued at the last quoted sales
price as of the close of the exchange on the day the valuation is made or,
if no sale occurred on such day, at the bid price on such day. Price
information on listed securities is taken from the exchange where the
security is primarily traded. Over-the-counter and unlisted securities are
valued at the current bid price. Quotations of foreign securities and other
assets in a foreign currency are converted to U.S. dollar equivalents. The
converted value is based upon the bid price of the foreign currency against
U.S. dollars quoted by any major bank or by a broker. Short-term
investments that have remaining maturities of sixty days or less at time of
purchase are valued at amortized cost, if it approximates market value. The
value of other assets and securities for which no quotations are readily
available is determined in good faith at fair value using methods
determined by the Board of Trustees.

The Portfolio may be subject to taxes imposed by countries in which it
invests. Such taxes are generally based on either income or gains earned or
repatriated. The Portfolio accrues such taxes when the related income or
gains are earned.

For the period January 2, 1997 to April 30, 1997, the Portfolio expects to
defer to May 1, 1997 for Federal income tax purposes, post-October capital
and currency losses of approximately $21,000 and $25,000, respectively.

14
<PAGE>

JACOBS INTERNATIONAL OCTAGON PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

4. FOREIGN CURRENCY TRANSLATION: The books and records of the Portfolio are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars on the date of valuation. The Portfolio does not isolate that
portion of realized or unrealized gains and losses resulting from changes
in the foreign exchange rate from fluctuations arising from changes in the
market prices of the securities. These gains and losses are included in net
realized and unrealized gain and loss on investments on the statement of
operations. Net realized and unrealized gains and losses on foreign
currency transactions represent net foreign exchange gains or losses from
disposition of foreign currencies, currency gains or losses realized
between trade and settlement dates on securities transactions and the
difference between the amount of the investment income and foreign
withholding taxes recorded on the Portfolio's books and the U.S. dollar
equivalent amounts actually received or paid.

5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The Portfolio may enter
into forward foreign currency exchange contracts to protect the value of
securities held and related receivables and payables against changes in
future foreign exchange rates. A forward currency contract is an agreement
between two parties to buy and sell currency at a set price on a future
date. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is marked-to-market daily using the
current forward rate and the change in market value is recorded by the
Portfolio as unrealized gain or loss. The Portfolio recognizes realized
gain or loss when the contract is closed, equal to the difference between
the value of the contract at the time it was opened and the value at the
time it was closed. Risks may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their
contracts and are generally limited to the amount of unrealized gain on the
contracts, if any, at the date of default. Risks may also arise from the
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.

6. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.

Permanent book and tax basis differences relating to shareholder
distributions resulted in reclassifications of $25,454 to decrease
undistributed net investment income and $25,454 to decrease accumulated net
realized loss.

15
<PAGE>

JACOBS INTERNATIONAL OCTAGON PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

7. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon
as the Portfolio is informed of the ex-dividend date. Interest income is
recognized on the accrual basis. Most expenses of the UAM Funds can be
directly attributed to a particular portfolio. Expenses which cannot be
directly attributed are apportioned among the portfolios of the UAM Funds
based on their relative net assets. Custodian fees for the Portfolio have
been increased to include expense offsets, if any, for custodian balance
credits.

B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Jacobs Asset Management (the "Adviser"), provides investment advisory services
to the Portfolio at a fee calculated at an annual rate of 1.00% of average
daily net assets. The Adviser has voluntarily agreed to waive a portion of its
advisory fees and to assume expenses, if necessary, in order to keep the
Portfolio's total annual operating expenses, after the effect of expense
offset arrangements, from exceeding 1.75% of average daily net assets. United
Asset Management Corporation ("UAM") is a limited partner of the Adviser.

C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, computed
daily and payable monthly, of 0.19% of the first $200 million of the combined
aggregate net assets; plus 0.11% of the next $800 million of the combined
aggregate net assets; plus 0.07% of the next $2 billion of the combined
aggregate net assets; plus 0.05% of the combined aggregate net assets in
excess of $3 billion. The fees are allocated among the portfolios of the UAM
Funds on the basis of their relative net assets and are subject to a graduated
minimum fee schedule per portfolio which rises from $2,000 per month, upon
inception of a portfolio, to $70,000 annually after two years. For portfolios
with more than one class of shares, the minimum annual fee increases to
$90,000. In addition, the Administrator receives a Portfolio-specific monthly
fee at an annual rate of 0.04% of average daily net assets of the Portfolio.
The Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan
Bank, under which CGFSC agrees to provide certain services, including but not
limited to, administration, fund accounting, dividend disbursing and transfer
agent services. Pursuant to the Mutual Funds Service Agreement, the
Administrator pays CGFSC a monthly fee. For the period January 2, 1997 to
April 30, 1997, $11,212 was paid to CGFSC for its services.

D. CUSTODIAN: The Chase Manhattan Bank (the "Bank"), an affiliate of CGFSC, is
custodian for the Portfolio's assets held in accordance with the custodian
agreement.

F. ACCOUNT SERVICES: Effective February 28, 1997, the UAM Funds entered into
an Account Services Agreement (the "Services Agreement") with UAM Retirement
Plan Services, Inc. ("Service Provider"), a

16
<PAGE>

JACOBS INTERNATIONAL OCTAGON PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
wholly-owned subsidiary of UAM. Under the Services Agreement, the Service
Provider agrees to perform certain services for participants in a self-
directed, defined contribution plan, and for whom the Service Provider
provides participant recordkeeping. Pursuant to the Services Agreement, the
Service Provider is entitled to receive, after the end of each month, a fee at
the annual rate of 0.15% of the average aggregate daily net asset value of
shares of the UAM Funds in the accounts for which they provide services.

H. PURCHASES AND SALES: For the period January 2, 1997 to April 30, 1997, the
Portfolio made purchases of $32,247,812 and sales of $413,587 of investment
securities other than long-term U.S. Government and short- term securities.
There were no purchases or sales of long-term U.S. Government securities.
Purchases include in-kind transactions of securities with a value of
$12,207,759.

I. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 1/8th of 1% per annum, payable at the end of
each calendar quarter, is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. During the period January
2, 1997 to April 30, 1997, the Portfolio had no borrowings under the
agreement.

J. OTHER: At April 30, 1997, 70.1% of total shares outstanding were held by 3
record shareholders owning more than 10% of the aggregate total shares
outstanding.

At April 30, 1997, the net assets of the Portfolio were substantially
comprised of foreign denominated securities. Changes in currency exchange
rates will affect the value of and investment income from such securities.

Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of U.S. dollar denominated
transactions as a result of, among other factors, the possibly lower level of
governmental supervision and regulation of foreign securities markets and the
possibility of political or economic instability.

17
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
UAM Funds Trust and Shareholders of
Jacobs International Octagon Portfolio

In our opinion, the accompanying statement of assets and liabilities including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Jacobs International Octagon
Portfolio (the "Portfolio"), a Portfolio of UAM Funds Trust, at April 30,
1997, and the results of its operations, the changes in its net assets and the
financial highlights for the period January 2, 1997 (commencement of
operations) through April 30, 1997, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Portfolio's management; our responsibility is to express an opinion on
these financial statements based on our audit. We conducted our audit 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 audit, which included confirmation of securities at April 30, 1997 by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above.

Price Waterhouse LLP
Boston, Massachusetts
June 9, 1997

- -------------------------------------------------------------------------------

FEDERAL INCOME TAX INFORMATION (UNAUDITED):

Foreign taxes during the fiscal year ended April 30, 1997 amounting to
approximately $25,000 are expected to be passed through to the shareholders as
foreign tax credits on Form 1099-DIV for the year ending December 31, 1997
which shareholders of this Portfolio will receive in late January, 1998.

For the fiscal year ended April 30, 1997, gross income derived from sources
within foreign countries amounted to approximately $307,000 for the Portfolio.

18
<PAGE>

- -------------------------------------------------------------------------------

UAM FUNDS
MJI INTERNATIONAL EQUITY PORTFOLIO

- -------------------------------------------------------------------------------
OFFICERS AND TRUSTEES
Norton H. Reamer Michael E. DeFao
Trustee, President Secretary
and Chairman
Karl O. Hartmann
John T. Bennett, Jr. Assistant Secretary
Trustee
Gary L. French
Philip D. English Treasurer
Trustee
Robert R. Flaherty
William A. Humenuk Assistant Treasurer
Trustee
Gordon M. Shone
Peter M. Whitman, Jr. Assistant Treasurer
Trustee

William H. Park
Vice President

- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Murray Johnstone International Ltd.
John Hancock Center, Suite 3640
875 North Michigan Avenue, Chicago, IL 60611
- -------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center Brooklyn, NY 11245
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.

- -------------------------------------------------------------------------------

[LOGO OF UAM FUNDS APPEARS HERE]

MJI
INTERNATIONAL
EQUITY PORTFOLIO

- -------------------------------------------------------------------------------

ANNUAL REPORT
APRIL 30, 1997
<PAGE>

DEAR SHAREHOLDER,

MJI INTERNATIONAL EQUITY PORTFOLIO, YEAR ENDED 30 APRIL 1997

PERFORMANCE

During the year to 30 April 1997 the return for the portfolio was 4.67%. Over
the same period the return for the benchmark MSCI EAFE Index was -0.89%. The
Index was once again held back by weakness of the Japanese stockmarket and
currency. The rise in interest rates in the US led to a temporary pullback in
the international markets in March 1997 but share prices regained their
composure when it became clear that inflation was still not a serious issue
for most economies.

ECONOMIC AND MARKET REVIEW

Throughout the period most economies saw low growth and low inflation. Even in
the US where growth was more robust, it was not sufficient to force higher
interest rates until March 1997 when the Federal Reserve raised rates by
0.25%. In Europe governments continued their efforts to trim spending and
achieve the budgetary goals laid down to qualify for European monetary union
(Emu). This led universally to lower growth and higher unemployment, but to
counter the trend monetary policy was eased, resulting in weaker currencies
but improved exports. The European equity markets responded favourably to this
and also to moves by companies to restructure their operations and provide a
more open policy on corporate strategy. The third factor which was positive
for equity markets was the potential for earnings surprises on the upside,
given the extremely modest level of forecasts. Over the first half of the year
the lower bond yields in the peripheral markets led to a strong performance of
equities. The Spanish market returned 33.8% while Spanish investments in the
Portfolio returned 32.3%. In the latter half, restructuring and improved
profits estimates generated strong performance in the core markets such as
Germany which returned 21.1%. The UK market, reflecting a buoyant economy and
benefiting from a strengthening pound, returned 28.5% while Europe as a whole
returned 21.4% over the year.

Markets in the Far East had mixed fortunes. Japan remained under a cloud with
a moderate pick up in growth in the economy led by the export sector only
beginning to broaden out by the end of the year. Spending by the government
and the consumer took much of the year to get the economy moving. After a
brief rise in April, the equity market continued to struggle under the
structural problems of the financial and real estate sectors and with improved
earnings limited to the electronics sector, declined by 27.1% in dollars by
the end of the period.

Elsewhere in the region, returns were lacklustre. Hong Kong saw something of a
roller coaster ride as confidence in the handover of control to the Chinese in
July 1997 strengthened, only to see investors become cautious over higher
rates in the US. Strong in the middle of the year, the market eased back in
the quarter to April, to end the period up 10.1%. The Australian and New
Zealand markets saw reasonable returns but Singapore ended down 22.0% due to
weakness in the electronics sector and government measures to cool down the
property market. The Pacific region as a whole ended the year with a rise of
just 0.6%.

The emerging economies of Latin America continued their return to growth and
their stock markets reaped the benefits. The Mexican economy grew at more than
5.0% in 1996 and is forecast to repeat this in 1997. Argentina is producing
similar growth but with very low inflation. With the Chilean economy cooling
to a more sustainable pace inflationary pressures eased and interest rates
have fallen. The Chilean markets responded with a rise of 17.3%.

In contrast to the resurgence in Latin America, the Asian emerging markets
continued to struggle under the pressure of slowing economies and tightening
government policy. The Thai economy struggled to make any

1
<PAGE>

headway during the period and the market continued its poor performance. The
Portfolio has a small exposure to the market and although this outperformed
the Index, it was a negative for the performance of the Portfolio.

INVESTMENT STRATEGY

The principal decision of the managers during the period was to increase
investments in core Europe in the belief that markets would respond well to
the low growth, low inflation environment. We added to France, SGS Thomson
Microelectronics, and Germany with increased positions in Volkswagen, Linde
and BMW. We also added to investments in Switzerland with the insurance
company, Winterthur. We cut back investments in the UK, trimming stocks across
the board, following the strong performance of the market and currency in
1996. We reduced Japan following the strength in April 1996 but rebuilt
positions slightly later in the year and in early 1997 on weakness. Over the
year we added to investments in all the major markets of the Far East as
weakness improved the value of stocks in the area and we added to Latin
America.

The increase in European positions reaped the benefits of the strong markets
through the period. Investments in Germany, boosted by the strength of
Volkswagen, returned 49.3%; returns in the Netherlands 26.2% and Italy 23.4%.
The reduction in the UK caught most of the rise before concerns about the May
election began to dampen sentiment. Adding to Japan proved to be premature but
the market now stands out as the major laggard globally and prospects for a
recovery of stocks, on a selective basis in 1997 have improved. The additions
to the markets in the Far East were less successful as investors turned their
backs on the region due to its slowing pace of development and political
uncertainties. Conversely, the Latin American investments came through
strongly in the year, justifying our confidence in the region.

OUTLOOK

Looking forward, and excluding the US and UK, the low growth, low inflation
environment should continue through 1997. This should help markets to avoid a
major pullback. In the coming period we will continue to overweight Europe,
focusing on Germany, Switzerland and France where there is still scope for
restructuring to enhance profits. Following the general election in the UK, we
will assess the implications of the new Labour government and their policies,
particularly with respect to corporate taxation and spending before making
further investments in the market. Until the situation in Japan improves the
Portfolio will remain underweight. Other South East Asian markets offer good
value and growth prospects which were largely neglected in 1996. In
anticipation of a return to favour of a region where we still see good value,
we intend to stay overweight. Finally, with a relatively benign outlook for
interest rates and an increasing ability to move independently of the major
markets, we expect the emerging markets to continue the recovery which
commenced during 1996 and the Portfolio will maintain its exposure to this
area.

Murray Johnstone International Ltd.

2
<PAGE>

Performance Comparison
================================================================================
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
MJI INTERNATIONAL EQUITY PORTFOLIO AND THE
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX

- -----------------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1997
- -----------------------------------------------
1 YEAR SINCE 9/16/94*
- -----------------------------------------------
<S> <C>
4.67% 3.00%
- -----------------------------------------------

</TABLE>

MJI International Morgan Stanley
Equity Portfolio- Capital International
Institutional Class EAFE Index+
- ----------------------------------------------------
<S> <C> <C>
9/16/94* 10,000 10,000
4/30/95 9,500 10,462
4/30/96 10,324 11,655
4/30/97 10,806 11,551

</TABLE>

Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.

* Commencement of Operations

** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.

+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees,
if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions. The
comparative index has been adjusted to reflect reinvestment of dividends on
securities in the index.

Definition of the Comparative Index
-----------------------------------

The graph presents the performance of the Institutional Class shares which have
been in existence since the Portfolio's inception. The performance of the
Institutional Service Class shares will vary based upon the different inception
date and fees assessed to that Class.

Please note that one cannot invest in an unmanaged index.

3
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (96.1%)
- -------------------------------------------------------------------------------
ARGENTINA (1.9%)
Banco Frances del Rio de la Plata S.A. ADR................. 8,050 $ 244,519
*Disco S.A. ADR............................................ 2,065 64,015
Transportadora de Gas del Sur S.A. ADR..................... 4,700 58,750
YPF S.A. ADR............................................... 8,600 237,575
-----------
604,859
- -------------------------------------------------------------------------------
AUSTRALIA (6.2%)
Australia & New Zealand Banking Group, Ltd. ............... 65,000 414,968
Commonwealth Bank of Australia............................. 60,000 651,508
National Australia Bank, Ltd. ............................. 43,000 588,251
News Corp., Ltd............................................ 80,000 368,549
-----------
2,023,276
- -------------------------------------------------------------------------------
BELGIUM (2.1%)
*Fortis AG................................................. 3,840 685,868
- -------------------------------------------------------------------------------
CHILE (4.2%)
Cia. de Telecomunicaciones de Chile S.A. ADR............... 25,000 809,375
Madeco S.A. ADR............................................ 7,500 205,313
Quimica y Minera Chile S.A. ADR............................ 6,200 367,350
-----------
1,382,038
- -------------------------------------------------------------------------------
FINLAND (2.1%)
Oy Nokia AB, Series A...................................... 10,990 685,501
- -------------------------------------------------------------------------------
FRANCE (7.1%)
*Cap Gemini Sogeti S.A..................................... 5,470 331,546
Cie Generale des Eaux...................................... 3,380 471,167
Compagnie Bancaire S.A. ................................... 1,660 219,163
Lyonnaise des Eaux-Dumez................................... 1,034 93,610
Michelin, Class B.......................................... 6,940 388,041
*SGS-Thomson Microelectronics N.V. ........................ 5,400 416,652
Total S.A., Class B........................................ 4,750 394,191
-----------
2,314,370
- -------------------------------------------------------------------------------
GERMANY (8.6%)
Bayerische Motoren Werke AG................................ 940 763,981
Linde AG................................................... 960 700,993
Mannesmann AG.............................................. 1,003 394,391
Volkswagen AG.............................................. 1,515 960,211
-----------
2,819,576
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

4
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
HONG KONG (6.8%)
Amoy Properties, Ltd....................................... 280,000 $ 276,530
Cheung Kong Holdings, Ltd. ................................ 70,000 614,511
Hong Kong Land Holdings, Ltd. ADR.......................... 250,000 520,000
Hutchison Whampoa, Ltd. ................................... 75,000 556,739
Swire Pacific, Ltd., Class A............................... 35,000 269,978
-----------
2,237,758
- --------------------------------------------------------------------------------
IRELAND (1.6%)
Allied Irish Banks plc..................................... 44,143 314,414
Bank of Ireland............................................ 20,770 220,740
-----------
535,154
- --------------------------------------------------------------------------------
ITALY (4.0%)
ENI S.p.A. ................................................ 24,000 121,808
Istituto Mobiliare Italiano S.p.A. ........................ 33,500 285,362
Italcementi S.p.A. ........................................ 2,650 14,843
Parmalat Finanziaria S.p.A. ............................... 148,800 216,395
*Seat S.p.A. .............................................. 17,839 5,460
Stet Societa' Finanziaria Telefonica S.p.A. ............... 72,080 340,782
Telecom Italia Mobile S.p.A................................ 97,990 308,186
-----------
1,292,836
- --------------------------------------------------------------------------------
JAPAN (12.5%)
Canon Sales Co., Inc. ..................................... 11,000 227,885
Dai-Ichi Kangyo Bank, Ltd.................................. 19,000 208,035
EISAI Co., Ltd. ........................................... 11,000 190,626
Fuji Machine Manufacturing Co. ............................ 8,000 225,601
Hitachi, Ltd............................................... 32,000 289,878
Itochu Corp................................................ 37,000 175,163
Matsumoto Kenko Co., Ltd................................... 600 13,895
Matsushita Communication Industrial........................ 9,000 232,533
Murata Manufacturing Co., Ltd. ............................ 9,000 331,784
Nippon Sanso KK Corp....................................... 18,000 63,663
Nippon Steel Co............................................ 82,000 233,824
Nissan Motor Co., Ltd...................................... 33,000 194,179
Nitto Denko Corp........................................... 16,000 231,902
Santen Pharmaceutical...................................... 15,400 276,581
Sanwa Bank, Ltd. .......................................... 20,000 214,258
Shin-Etsu Chemical Co., Ltd. .............................. 13,000 262,150
</TABLE>

The accompanying notes are an integral part of the financial statements.

5
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- --------------------------------------------------------------------------------
JAPAN--(CONTINUED)
Shiseido Co., Ltd. ........................................ 20,000 $ 286,727
Sumitomo Electric Industries............................... 14,000 189,681
Suzuki Motor Co., Ltd...................................... 23,000 244,585
-----------
4,092,950
- --------------------------------------------------------------------------------
MALAYSIA (3.0%)
Hicom Holdings Bhd. ....................................... 150,000 331,673
Malayan Banking Bhd........................................ 33,000 328,685
Renong Bhd. ............................................... 130,000 178,168
S P Setia Bhd. ............................................ 45,000 154,183
-----------
992,709
- --------------------------------------------------------------------------------
MEXICO (2.3%)
Cifra S.A. de C.V. ADR Class B............................. 117,000 178,308
Empresas ICA S.A. de C.V. ADR.............................. 7,000 104,125
Grupo Imsa, S.A. de C.V. ADR............................... 9,000 193,500
*Grupo Industrial Durango ADR.............................. 24,000 261,000
-----------
736,933
- --------------------------------------------------------------------------------
NETHERLANDS (3.9%)
ING Groep N.V.............................................. 11,490 451,178
Vendex International N.V. BDR.............................. 8,840 419,721
VNU........................................................ 20,040 414,542
-----------
1,285,441
- --------------------------------------------------------------------------------
NEW ZEALAND (1.7%)
Carter Holt Harvey, Ltd.................................... 85,000 188,469
Lion Nathan, Ltd. ......................................... 60,000 144,262
Telecom Corp. of New Zealand, Ltd. ........................ 50,000 224,153
-----------
556,884
- --------------------------------------------------------------------------------
NORWAY (1.0%)
Norsk Hydro................................................ 6,910 336,732
- --------------------------------------------------------------------------------
SINGAPORE (4.3%)
City Developments, Ltd..................................... 70,000 566,312
Keppel Corp., Ltd.......................................... 50,000 217,812
Singapore Land, Ltd........................................ 20,000 93,348
Wing Tai Holdings, Ltd..................................... 210,000 543,078
-----------
1,420,550
- --------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

6
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
SPAIN (3.2%)
Empresa Nacional de Electricidad S.A. ..................... 6,820 $ 477,237
Telefonica de Espana S.A................................... 15,970 409,501
Vallehermoso S.A. ......................................... 6,220 153,317
-----------
1,040,055
- -------------------------------------------------------------------------------
SWITZERLAND (7.3%)
ABB AG (Bearer)............................................ 263 318,707
*Ciba Specialty Chemicals AG (Registered).................. 518 44,661
Novartis AG (Registered)................................... 688 907,058
Winterthur Schweizerische (Registered)..................... 421 302,388
Zurich Versicherungs (Registered).......................... 2,470 811,595
-----------
2,384,409
- -------------------------------------------------------------------------------
THAILAND (1.3%)
Bangkok Bank plc........................................... 47,000 435,452
- -------------------------------------------------------------------------------
UNITED KINGDOM (11.0%)
Abbey National plc......................................... 18,400 256,380
BOC Group plc.............................................. 14,100 215,826
British Aerospace plc...................................... 10,400 220,904
British Airport Authority plc.............................. 19,300 159,476
British Petroleum Co. plc.................................. 17,522 200,994
Cadbury Schweppes plc...................................... 22,600 187,476
Carlton Communications plc................................. 24,000 196,756
Commercial Union plc....................................... 16,900 186,193
Glaxo Wellcome plc......................................... 19,100 375,371
Grand Metropolitan plc..................................... 26,100 217,778
Kingfisher plc............................................. 19,000 205,635
Ladbroke Group plc......................................... 54,300 202,346
Lloyds TSB Group plc....................................... 32,720 298,462
Safeway plc................................................ 44,100 244,361
Williams Holdings plc...................................... 40,700 218,927
Wolseley plc............................................... 25,000 200,094
-----------
3,586,979
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $29,383,624)...................... 31,450,330
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

7
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (3.5%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc., 5.20%, dated 04/30/97 due
05/01/97, to be repurchased at $1,137,164,
collateralized by $1,143,510 of various U.S. Treasury
Notes, 4.75%-6.125%, due from 08/31/98-10/31/98,
valued at $1,137,914 (COST $1,137,000)................ $1,137,000 $ 1,137,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.6%) (COST $30,520,624)(a)......... 32,587,330
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (0.4%)............... 150,441
- -------------------------------------------------------------------------------
NET ASSETS (100%)....................................... $32,737,771
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
ADR--American Depository Receipt.
BDR--British Depository Receipt.
(a) The cost for federal income tax purposes was $30,529,713. At April 30,
1997, net unrealized appreciation for all securities based on tax cost was
$2,057,617. This consisted of aggregate gross unrealized appreciation for
all securities of $3,293,913 and aggregate gross unrealized depreciation
for all securities of $1,236,296.

The accompanying notes are an integral part of the financial statements.

8
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

At April 30, 1997 sector diversification of the Portfolio was as follows:

<TABLE>
<CAPTION>
% OF
NET
SECTOR DIVERSIFICATION (UNAUDITED) ASSETS VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
Aerospace & Defense........................................ 0.7% $ 220,904
Agriculture................................................ 5.3 1,742,362
Automotive................................................. 6.6 2,162,955
Banks...................................................... 9.6 3,128,642
Basic Resources............................................ 0.7 233,770
Beverages, Food & Tobacco.................................. 1.7 548,133
Broadcasting & Publishing.................................. 1.9 611,299
Building Materials......................................... 0.7 213,989
Capital Equipment.......................................... 1.2 394,391
Chemicals.................................................. 3.9 1,290,383
Construction............................................... 1.1 351,918
Consumer Durables.......................................... 0.7 217,778
Consumer Non-Durables...................................... 0.9 286,727
Electronics................................................ 3.6 1,170,965
Energy..................................................... 1.5 497,319
Entertainment & Leisure.................................... 0.6 202,346
Financial Services......................................... 5.7 1,853,941
Holding Company............................................ 3.2 1,052,919
Industrial................................................. 4.5 1,479,124
Insurance.................................................. 5.1 1,683,656
Manufacturing.............................................. 2.2 719,825
Metals..................................................... 0.6 205,313
Oil & Gas.................................................. 1.6 515,999
Paper & Packaging.......................................... 1.4 449,469
Pharmaceuticals............................................ 2.0 651,953
Print & Publishing......................................... 1.1 374,008
Real Estate................................................ 6.8 2,224,018
Repurchase Agreement....................................... 3.5 1,137,000
Retail..................................................... 3.4 1,112,040
Services................................................... 2.2 734,595
Telecommunications......................................... 8.9 2,924,737
Transportation............................................. 2.0 647,266
Utilities.................................................. 4.7 1,547,586
----- -----------
Total Investments.......................................... 99.6% $32,587,330
Other Assets and Liabilities............................... 0.4 150,441
----- -----------
Net Assets................................................. 100.0% $32,737,771
===== ===========
</TABLE>

The accompanying notes are an integral part of the financial statements.

9
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997

<TABLE>
- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at Cost............................................. $30,520,624
===========
Investments, at Value............................................ $32,587,330
Cash............................................................. 193
Foreign Currency (Cost $17,168).................................. 17,140
Receivable for Investments Sold.................................. 57,346
Dividends Receivable............................................. 78,749
Receivable for Portfolio Shares Sold............................. 93,243
Foreign Withholding Tax Reclaim Receivable....................... 13,966
Deferred Organization Costs--Note A.............................. 4,628
Interest Receivable.............................................. 164
Other Assets..................................................... 93
- -------------------------------------------------------------------------------
Total Assets.................................................... 32,852,852
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Investment Advisory Fees--Note B..................... 4,883
Payable for Portfolio Shares Redeemed............................ 13,826
Payable for Administrative Fees--Note C.......................... 12,772
Payable for Distribution and Service Fees--Note E................ 1,542
Payable for Account Services Fees--Note F........................ 3,851
Payable for Trustees' Fees--Note G............................... 483
Other Liabilities................................................ 77,724
- -------------------------------------------------------------------------------
Total Liabilities............................................... 115,081
- -------------------------------------------------------------------------------
NET ASSETS........................................................ $32,737,771
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSISTS OF:
Paid in Capital.................................................. $30,707,096
Undistributed Net Investment Income.............................. 19,125
Accumulated Net Realized Loss.................................... (53,598)
Unrealized Appreciation.......................................... 2,065,148
- -------------------------------------------------------------------------------
NET ASSETS........................................................ $32,737,771
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL CLASS SHARES
Net Assets....................................................... $28,818,041
Net Asset Value, Offering and Redemption Price Per Share
2,705,133 shares outstanding (Unlimited authorization, no par
value).......................................................... $ 10.65
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL SERVICE CLASS SHARES
Net Assets....................................................... $ 3,919,730
Net Asset Value, Offering and Redemption Price Per Share 368,199
shares outstanding (Unlimited authorization, no par value)...... $ 10.65
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

10
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
For the Year ended April 30, 1997

<TABLE>
- ----------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends................................................. $ 360,664
Interest.................................................. 85,656
Less Foreign Taxes Withheld............................... (33,977)
- ----------------------------------------------------------------------------------
Total Income............................................. 412,343
- ----------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees............................................... $140,978
Less: Fees Waived........................................ (99,017) 41,961
--------
Administrative Fees--Note C............................... 108,094
Custodian Fees--Note D.................................... 35,944
Printing Fees............................................. 27,618
Filing and Registration Fees.............................. 32,766
Audit Fees................................................ 16,767
Account Services Fees--Note F............................. 3,851
Trustees' Fees--Note G.................................... 2,183
Amortization of Organization Expense--Note A.............. 1,945
Distribution and Service Fees--Institutional Service Class
Shares--Note E........................................... 1,542
Other Expenses............................................ 12,425
- ----------------------------------------------------------------------------------
Total Expenses........................................... 285,096
Expense Offset--Note A.................................... (450)
- ----------------------------------------------------------------------------------
Net Expenses............................................. 284,646
- ----------------------------------------------------------------------------------
NET INVESTMENT INCOME...................................... 127,697
- ----------------------------------------------------------------------------------
NET REALIZED LOSS:
Investments............................................... (54,964)
Foreign Currency Transactions............................. (47,587)
- ----------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS.............................................. (102,551)
- ----------------------------------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments............................................... 1,540,279
Foreign Currency Translations............................. (3,259)
- ----------------------------------------------------------------------------------
TOTAL NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION... 1,537,020
- ----------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY............... 1,434,469
- ----------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $1,562,166
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

11
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
APRIL 30, APRIL 30,
1997 1996
- -----------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income.................................. $ 127,697 $ 63,397
Net Realized Gain (Loss)............................... (102,551) 142,191
Net Change in Unrealized Appreciation/Depreciation..... 1,537,020 453,055
- -----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations. 1,562,166 658,643
- -----------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class................................... (23,511) (4,038)
In Excess of Net Investment Income:
Institutional Class................................... -- (20,271)
Net Realized Gain:
Institutional Class................................... (203,657) (16,206)
- -----------------------------------------------------------------------------------
Total Distributions.................................. (227,168) (40,515)
- -----------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE K):
Institutional Class:
Issued--Regular....................................... 25,675,829 4,553,899
--In Lieu of Cash Distributions..................... 156,098 40,436
Redeemed.............................................. (6,848,127) (2,155,730)
- -----------------------------------------------------------------------------------
Net Increase from Institutional Class Shares......... 18,983,800 2,438,605
- -----------------------------------------------------------------------------------
Institutional Service Class:
Issued--Regular....................................... 3,864,032 --
Redeemed.............................................. (37,097) --
- -----------------------------------------------------------------------------------
Net Increase from Institutional Service Class Shares. 3,826,935 --
- -----------------------------------------------------------------------------------
Net Increase from Capital Share Transactions......... 22,810,735 2,438,605
- -----------------------------------------------------------------------------------
Total Increase....................................... 24,145,733 3,056,733
Net Assets:
Beginning of Year...................................... 8,592,038 5,535,305
- -----------------------------------------------------------------------------------
End of Year (including undistributed and distributions
in excess of net investment income of $19,125 and
$(20,271), respectively).............................. $32,737,771 $ 8,592,038
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

12
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL
INSTITUTIONAL CLASS SERVICE CLASS
--------------------------------- --------------
YEARS ENDED
APRIL 30, SEPTEMBER 16, DECEMBER 31,
---------------- 1994*** TO 1996*** TO
1997 1996 APRIL 30, 1995 APRIL 30, 1997
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD....................... $ 10.27 $ 9.50 $10.00 $ 10.53
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERA-
TIONS
Net Investment Income........ 0.06 0.07 0.04 0.01
Net Realized and Unrealized
Gain (Loss) on Investments.. 0.42 0.75 (0.54)++ 0.11
- -------------------------------------------------------------------------------
Total from Investment Opera-
tions...................... 0.48 0.82 (0.50) 0.12
- -------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income........ (0.01) (0.00)@ -- --
In Excess of Net Investment
Income...................... (0.00) (0.03) -- --
Net Realized Gain............ (0.09) (0.02) -- --
- -------------------------------------------------------------------------------
Total Distributions......... (0.10) (0.05) -- --
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERI-
OD........................... $ 10.65 $ 10.27 $ 9.50 $ 10.65
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+................. 4.67% 8.67% (5.00)%** 1.14%**
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period
(Thousands)................. $28,818 $ 8,592 $5,535 $ 3,920
Ratio of Expenses to Average
Net Assets.................. 1.50% 1.45% 1.00%* 1.76%*
Ratio of Net Investment
Income to Average Net
Assets...................... 0.68% 0.88% 1.49%* 0.59%*
Portfolio Turnover Rate...... 47% 59% 81% 47%
Average Commission Rate#..... $0.0323 $0.0316 N/A $0.0323
- -------------------------------------------------------------------------------
Voluntarily Waived Fees and
Expenses Assumed by the
Adviser..................... $ 0.05 $ 0.13 $ 0.13 $ 0.01
Ratio of Expenses to Average
Net Assets Including Expense
Offsets..................... 1.50% 1.43% 1.00%* 1.75%*
- -------------------------------------------------------------------------------
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
++ The amount shown for a share outstanding throughout the period does not
accord with the aggregate net gains on investments for that period because
of the timing of sales and repurchases of the Portfolio shares in relation
to fluctuating market value of the investments of the Portfolio.
# Beginning with fiscal year 1996, the portfolio is required to disclose the
average commission rate per share it paid for portfolio trades on which
commissions were charged.
@ Amount is less than $0.01 per share.

The accompanying notes are an integral part of the financial statements.

13
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO

NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The MJI
International Equity Portfolio (the "Portfolio"), a portfolio of UAM Funds
Trust, is a diversified, open-end management investment company. At April 30,
1997, the UAM Funds were comprised of forty-two active portfolios. The
financial statements of the remaining portfolios are presented separately. The
Portfolio is authorized to offer two separate classes of shares--Institutional
Class Shares and Institutional Service Class Shares. Both classes of shares
have identical voting rights (except Institutional Service Class shareholders
have exclusive voting rights with respect to matters relating to distribution
and shareholder servicing of such shares), dividend, liquidation and other
rights. The objective of the MJI International Equity Portfolio is to provide
maximum total return, including both capital appreciation and current income,
by investing primarily in the common stocks of companies based outside of the
United States.

1. SECURITY VALUATION: Securities listed on a securities exchange for which
market quotations are readily available are valued at the last quoted sales
price as of the close of the exchange on the day the valuation is made or,
if no sale occurred on such day, at the bid price on such day. Price
information on listed securities is taken from the exchange where the
security is primarily traded. Over-the-counter and unlisted securities are
valued at the current bid price. Quotations of foreign securities and other
assets in a foreign currency are converted to U.S. dollar equivalents. The
converted value is based upon the bid price of the foreign currency against
U.S. dollars quoted by any major bank or by a broker. Short-term
investments that have remaining maturities of sixty days or less at time of
purchase are valued at amortized cost, if it approximates market value. The
value of other assets and securities for which no quotations are readily
available is determined in good faith at fair value using methods
determined by the Board of Trustees.

For the year ended April 30, 1997, the Portfolio expects to defer to May 1,
1997 for Federal income tax purposes, post-October currency losses of
approximately $19,000.

At April 30, 1997, the Portfolio had available a capital loss carryover for
Federal income tax purposes of approximately $45,000 which will expire on
April 30, 2005.

14
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.

4. FOREIGN CURRENCY TRANSLATION: The books and records of the Portfolio are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars on the date of valuation. The Portfolio does not isolate that
portion of realized or unrealized gains and losses resulting from changes
in the foreign exchange rate from fluctuations arising from changes in the
market prices of the securities. These gains and losses are included in net
realized and unrealized gain and loss on investments on the statement of
operations. Net realized and unrealized gains and losses on foreign
currency transactions represent net foreign exchange gains or losses from
forward foreign currency exchange contracts, disposition of foreign
currencies, currency gains or losses realized between trade and settlement
dates on securities transactions and the difference between the amount of
the investment income and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received
or paid.

6. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income annually. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.

The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles. These differences
are primarily due to differing book and tax treatments for foreign currency
transactions, deferred organization costs and the timing of the recognition
of gains or losses on investments.

Permanent book and tax basis differences relating to shareholder
distributions resulted in reclassifications of $64,790 to decrease
undistributed net investment income and $68,101 to decrease accumulated net
realized loss, with a decrease to paid in capital of $3,311.

15
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

7. ORGANIZATION COSTS: Costs incurred by the Portfolio in connection with
its organization have been deferred and are being amortized on a straight-
line basis over a five-year period.

8. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date,
except that certain dividends from foreign securities are recorded as soon
as the Portfolio is informed of the ex-dividend date. Interest income is
recognized on the accrual basis. Most expenses of the UAM Funds can be
directly attributed to a particular portfolio. Expenses which cannot be
directly attributed are apportioned among the portfolios of the UAM Funds
based on their relative net assets. Income, expenses (other than class
specific expenses) and realized and unrealized gains or losses are
allocated to each class of shares based upon their relative net assets.
Custodian fees for the Portfolio have been increased to include expense
offsets, if any, for custodian balance credits.

B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Murray Johnstone International Ltd., (the "Adviser"), a subsidiary of United
Asset Management Corporation ("UAM"), provides investment advisory services to
the Portfolio at a fee calculated at an annual rate of 0.75% of average daily
net assets. The Adviser has voluntarily agreed to waive a portion of its
advisory fees and to assume expenses, if necessary, in order to keep the
Portfolio's total annual operating expenses, after the effect of expense
offset arrangements, from exceeding 1.50% and 1.75% of average daily net
assets of the Portfolio's Institutional Class Shares and Service Class Shares,
respectively.

C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, computed
daily and payable monthly, of 0.19% of the first $200 million of the combined
aggregate net assets; plus 0.11% of the next $800 million of the combined
aggregate net assets; plus 0.07% of the next $2 billion of the combined
aggregate net assets; plus 0.05% of the combined aggregate net assets in
excess of $3 billion. The fees are allocated among the portfolios of the UAM
Funds on the basis of their relative net assets and are subject to a graduated
minimum fee schedule per portfolio which rises from $2,000 per month, upon
inception of a portfolio, to $70,000 annually after two years. For portfolios
with more than one class of shares, the minimum annual fee increases to
$90,000. In addition, the Administrator receives a Portfolio-specific monthly
fee at an annual rate of 0.06% of average daily net assets of the Portfolio.
The Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan
Bank, under which CGFSC agrees to provide certain services, including but not
limited to, administration, fund accounting, dividend disbursing and transfer
agent services. Pursuant to the Mutual Funds Service Agreement, the
Administrator pays CGFSC a monthly fee. For the year ended April 30, 1997,
$96,855 was paid to CGFSC for its services.

16
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

H. PURCHASES AND SALES: For the year ended April 30, 1997, the Portfolio made
purchases of $30,109,744 and sales of $8,154,409 of investment securities
other than long-term U.S. Government and short-term securities. There were no
purchases or sales of long-term U.S. Government securities.

J. OTHER: At April 30, 1997, 55.8% and 99.9% of total shares outstanding were
held by 3 and 2 record shareholders of the Institutional Class Shares and the
Institutional Service Class Shares, respectively, owning more than 10% of the
aggregate total shares outstanding.

At April 30, 1997, the net assets of the Portfolio were substantially
comprised of foreign denominated securities and currency. Changes in currency
exchange rates will affect the value of and investment income from such
securities and currency.

17
<PAGE>

MJI INTERNATIONAL EQUITY PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

K. CAPITAL SHARE TRANSACTIONS: Transactions in capital shares for the
Portfolios, by class, were as follows:

<TABLE>
<CAPTION>
INSTITUTIONAL CLASS INSTITUTIONAL SERVICE
SHARES CLASS SHARES
----------------------------- ---------------------
YEAR YEAR DECEMBER 31,
ENDED ENDED 1996* TO
APRIL 30, 1997 APRIL 30, 1996 APRIL 30, 1997
-------------- -------------- ---------------------
<S> <C> <C> <C>
Shares Issued.............. 2,516,858 465,365 371,710
In Lieu of Cash Distribu-
tions..................... 15,170 4,217 --
Shares Redeemed............ (663,721) (215,563) (3,511)
--------- -------- -------
Net Increase from Capital
Share Transactions........ 1,868,307 254,019 368,199
========= ======== =======
</TABLE>
* Commencement of Operations

18
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
UAM Funds Trust and Shareholders of
MJI International Equity Portfolio

In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the MJI
International Equity Portfolio (the "Portfolio"), a Portfolio of UAM Funds
Trust, at April 30, 1997, and the results of its operations, the changes in
its net assets and the financial highlights for the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Portfolio'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 April 30, 1997 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.

Price Waterhouse LLP
Boston, Massachusetts
June 9, 1997

- -------------------------------------------------------------------------------

FEDERAL INCOME TAX INFORMATION (UNAUDITED):

Foreign taxes during the fiscal year ended April 30, 1997 amounting to
approximately $34,000 are expected to be passed through to the shareholders as
foreign tax credits on Form 1099--DIV for the year ending December 31, 1997
which shareholders of this Portfolio will receive in late January, 1998.

MJI International Equity Portfolio hereby designates approximately $38,000 as
a long-term capital gain dividend for the purpose of the dividend paid
deduction on its federal income tax return. In addition, for the fiscal year
ended April 30, 1997, gross income derived from sources within foreign
countries amounted to approximately $362,000 for the Portfolio.

19
<PAGE>

- -------------------------------------------------------------------------------

UAM FUNDS
NEWBOLD'S EQUITYPORTFOLIO

- -------------------------------------------------------------------------------

OFFICERS AND TRUSTEES

Norton H. Reamer Michael E. DeFao
Trustee, President and Chairman Secretary

John T. Bennett, Jr. Karl O. Hartmann
Trustee Assistant Secretary

Philip D. English Gary L. French
Trustee Treasurer

William A. Humenuk Robert R. Flaherty
Trustee Assistant Treasurer

Peter M. Whitman, Jr. Gordon M. Shone
Trustee Assistant Treasurer

William H. Park
Vice President

- -------------------------------------------------------------------------------

INVESTMENT ADVISER
Newbold's Asset Management, Inc.
950 Haverford Road
Bryn Mawr, PA 19010

- -------------------------------------------------------------------------------

ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110

- -------------------------------------------------------------------------------

CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245

- -------------------------------------------------------------------------------

LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103

- -------------------------------------------------------------------------------

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110

- -------------------------------------------------------------------------------

DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110

- -------------------------------------------------------------------------------

This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.

================================================================================

[LOGO OF UAM FUNDS APPEARS HERE]

NEWBOLD'S
EQUITY
PORTFOLIO

================================================================================

ANNUAL REPORT
APRIL 30, 1997
<PAGE>

Fellow Shareholder:

During Newbold's Equity Portfolio's 1997 fiscal year, which ended on April
30, the stock market extended its long-running rally. The S&P 500 Index posted
a total return of 25.12% in this period, and the average Growth & Income fund
as calculated by Lipper Analytical Services delivered a return of 18.51%. The
Portfolio provided a return of 19.89% during the fiscal year.

MARKET PERSPECTIVE

The fiscal year ended April 30, 1997, marked a continuation in the historic
rise in equity prices that began in August 1982. If we turned back the clock
to July 31, 1982, we would find that the yield on the 30-year Treasury bond
stood at 13.4% (vs. 7.0% as of April 30, 1997), the year-over-year increase in
the Consumer Price Index was 6.6% (vs. 2.5% as of April 30), and the
annualized total return of the S&P 500 Index over the previous fourteen years
was under 6%. Over the subsequent 14+ years from August 1982 through April
1997, a period that included two of the longest economic expansions in the
last half-century, the S&P 500 Index produced an astonishing annualized return
of 18.54%.

It is worth noting that the performance record of the S&P 500 Index since
1994 has been dominated by relatively few of the very largest capitalization
stocks that are members of the Index. To illustrate, while the return of the
capitalization-weighted S&P 500 Index was 25.12% for the twelve months ended
April 30, 1997, the return of the average stock in the S&P 500 Index on an
equal-weighted basis was a mere 10.52%. Under these unusual conditions, it has
proven to be difficult for most active managers like Newbold's, who manage
broadly diversified portfolios, to keep pace with the popular averages.

The powerful forces that contributed to this unprecedented rise in the value
of financial assets have been well documented and may continue to propel
equity returns to above-average levels for some time to come. We believe,
however, that overall market returns are bound to regress eventually toward
the long-term average and that indexing strategies will eventually be less
successful as the market broadens. More traditional value considerations, such
as dividend yields and price relative to earnings, will not be as outdated a
notion as they have appeared in recent times, and our fundamental value
approach should continue to produce solid returns.

PORTFOLIO COMMENTS AND STRATEGY

Newbold's investment approach seeks to earn a solid return for investors
primarily through the careful selection of stocks that we believe are
undervalued by the market. During the fiscal year, favorable stock selection
in the computers and health care segments contributed positively to the
Portfolio's performance relative to the S&P 500 Index. The beverages, food and
tobacco segment produced lagging results during the period.

During the second half of the fiscal year we significantly increased the
Portfolio's weighting in bank and insurance stocks. The financial sector
currently represents a significant share of our holdings. In spite of the
strong performance of the sector in recent years, we feel that this part of
the market may still offer good value with the potential for above-average
earnings gains. Over the same period we also trimmed the Portfolio's exposure
to utilities and telecommunications stocks by a substantial amount. Although
these industries appear by some measures to offer low valuations and
attractive dividend yields, the potentially treacherous waters of industry
deregulation make us cautious.

1
<PAGE>

Your investment team is focused on uncovering promising investment
opportunities among companies that possess compelling valuations, healthy
balance sheets and improving fundamental outlooks. As usual, the
characteristics of the Portfolio are distinguished by an above-average
dividend yield and a below-average price-to earnings ratio. While we have some
concerns regarding the lofty valuation levels of the equity market, we
continue to remain fully invested in the belief that our value-oriented
strategy will enable us to participate in the market's generally upward trend
while offering some protection from declines.

NEWBOLD'S ASSET MANAGEMENT, INC.

2
<PAGE>

Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
NEWBOLD'S EQUITY PORTFOLIO AND THE STANDARD & POOR'S 500 INDEX (S&P 500)

-----------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1997
-----------------------------------------
1 YEAR SINCE 9/13/95*++
-----------------------------------------
19.89% 19.33%
-----------------------------------------

[LINE GRAPH APPEARS HERE

NEWBOLD'S
EQUITY PORTFOLIO S&P 500 INDEX+
<S> <C> <C>
9/13/95*++ 10,000 10,000
4/30/96 11,131 11,813
4/30/97 13,345 14,780
</TABLE>

Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.

* Commencement of Operations

** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.

+ The comparative index is not adjusted to reflect expenses or other fees that
the SEC requires to be reflected in the Portfolio's performance. The fees,
if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions. The
comparative index has been adjusted to reflect reinvestment of dividends on
securities in the index.

++ For comparative purposes, the value of the S&P 500 Index on 8/31/95 is used
as the beginning value on 9/13/95.

Definition of the Comparative Index
-----------------------------------

The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.

Please note that one cannot invest in an unmanaged index.

3
<PAGE>

NEWBOLD'S EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (99.6%)
- -------------------------------------------------------------------------------
AEROSPACE & DEFENSE (1.4%)
United Technologies Corp. .................................. 2,400 $ 181,500
- -------------------------------------------------------------------------------
AUTOMOTIVE (0.9%)
Borg-Warner Automotive, Inc. ............................... 2,700 113,400
- -------------------------------------------------------------------------------
BANKS (15.4%)
Banc One Corp. ............................................. 3,600 152,550
BankBoston Corp. ........................................... 4,200 305,550
Chase Manhattan Corp. ...................................... 4,500 416,812
First Union Corp. .......................................... 4,600 386,400
Fleet Financial Group, Inc. ................................ 6,300 384,300
NationsBank Corp. .......................................... 5,000 301,875
----------
1,947,487
- -------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (2.6%)
RJR Nabisco Holdings Corp. ................................. 11,100 330,225
- -------------------------------------------------------------------------------
CHEMICALS (0.5%)
Rohm & Haas Co. ............................................ 700 58,275
- -------------------------------------------------------------------------------
COMPUTERS (5.0%)
Avnet, Inc. ................................................ 3,900 237,412
International Business Machines Corp. ...................... 2,500 401,875
----------
639,287
- -------------------------------------------------------------------------------
CONSTRUCTION (1.7%)
Masco Corp. ................................................ 5,650 213,287
- -------------------------------------------------------------------------------
ENERGY (13.1%)
Amoco Corp. ................................................ 3,750 313,594
Atlantic Richfield Co. ..................................... 900 122,512
Exxon Corp. ................................................ 5,970 338,051
Mobil Corp. ................................................ 2,500 325,000
Repsol S.A. ADR ............................................ 6,500 272,188
USX-Marathon Group ......................................... 10,200 281,775
----------
1,653,120
- -------------------------------------------------------------------------------
HEALTH CARE (3.3%)
Aetna, Inc. ................................................ 4,600 419,175
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

4
<PAGE>

NEWBOLD'S EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
INDUSTRIAL (5.4%)
AGCO Corp. ................................................ 10,400 $ 269,100
Case Corp. ................................................ 7,500 415,312
-----------
684,412
- -------------------------------------------------------------------------------
INSURANCE (9.3%)
Allstate Corp. ............................................ 3,900 255,450
Equitable of Iowa Cos. .................................... 2,600 127,075
ITT Hartford Group, Inc. .................................. 6,200 461,900
Travelers, Inc. ........................................... 6,000 332,250
-----------
1,176,675
- -------------------------------------------------------------------------------
MANUFACTURING (3.8%)
Harnischfeger Industries, Inc. ............................ 9,100 378,787
Parker-Hannifin Corp. ..................................... 2,000 99,500
-----------
478,287
- -------------------------------------------------------------------------------
METALS (3.0%)
Aluminum Company of America ............................... 2,700 188,663
Reynolds Metals Co. ....................................... 2,800 190,050
-----------
378,713
- -------------------------------------------------------------------------------
OFFICE EQUIPMENT (3.1%)
Xerox Corp. ............................................... 6,300 387,450
- -------------------------------------------------------------------------------
OIL & GAS (2.0%)
*Noble Drilling Corp. ..................................... 7,300 126,838
*Reading & Bates Corp. .................................... 5,600 125,300
-----------
252,138
- -------------------------------------------------------------------------------
REAL ESTATE (2.8%)
Meditrust ................................................. 5,000 182,500
Simon Debartolo Group Inc. ................................ 6,200 177,475
-----------
359,975
- -------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (1.7%)
Equity Residential Properties Trust ....................... 4,800 210,000
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

5
<PAGE>

NEWBOLD'S EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
RETAIL (4.9%)
American Stores Co. ...................................... 4,800 $ 218,400
Dillard Department Stores, Class A ....................... 6,500 200,688
*Nine West Group, Inc. ................................... 5,000 198,125
-----------
617,213
- -------------------------------------------------------------------------------
TELECOMMUNICATIONS (5.7%)
GTE Corp. ................................................ 7,800 357,825
NYNEX Corp. .............................................. 7,000 362,250
-----------
720,075
- -------------------------------------------------------------------------------
TRANSPORTATION (7.8%)
Burlington Northern Santa Fe ............................. 2,700 212,625
Delta Air Lines, Inc. .................................... 1,400 128,975
Hertz Corp., Class A ..................................... 4,000 116,000
Southwest Airlines Co. ................................... 9,600 264,000
*Team Rental Group, Inc. ................................. 11,600 261,000
-----------
982,600
- -------------------------------------------------------------------------------
UTILITIES (6.2%)
Entergy Corp. ............................................ 10,850 253,619
GPU, Inc. ................................................ 4,650 149,963
PanEnergy Corp. .......................................... 2,950 130,538
TransCanada Pipelines Ltd. ............................... 13,800 251,850
-----------
785,970
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $10,875,956)..................... 12,589,264
- -------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (0.3%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT (0.3%)
Chase Securities, Inc. 5.20%, dated 04/30/97, due
05/01/97, to be repurchased at $45,007, collateralized by
$45,258 of various U.S. Treasury Notes, 4.75%-6.125%, due
from 08/31/98-10/31/98, valued at $45,036 (COST $45,000). $45,000 45,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.9%) (COST $10,920,956)(a)............ 12,634,264
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

6
<PAGE>

NEWBOLD'S EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

VALUE+
- --------------------------------------------------------------------------------
<S> <C> <C>
OTHER ASSETS AND LIABILITIES (NET) (0.1%).................... $ 7,563
- --------------------------------------------------------------------------------
NET ASSETS (100%)............................................ $12,641,827
================================================================================
</TABLE>
+ See Note A to Financial Statements.
* Non--Income Producing Security.
ADR--American Depositary Receipt.
(a) The cost for federal income tax purposes was $10,901,697. At April 30,
1997, net unrealized appreciation for all securities based on tax cost
was $1,732,567. This consisted of aggregate gross unrealized appreciation
for securities of $1,894,511 and aggregate gross unrealized depreciation
for all securities of $161,944.

The accompanying notes are an integral part of the financial statements.

7
<PAGE>

NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997

<TABLE>

- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at Cost.............................................. $10,920,956
===========
Investments, at Value............................................. $12,634,264
Cash.............................................................. 18,350
Receivable due from Investment Adviser--Note B.................... 14,959
Dividends and Interest Receivables................................ 14,712
Other Assets...................................................... 149
- -------------------------------------------------------------------------------
Total Assets..................................................... 12,682,434
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Administrative Fees--Note C........................... 7,938
Payable for Trustees' Fees--Note G................................ 478
Other Liabilities................................................. 32,191
- -------------------------------------------------------------------------------
Total Liabilities................................................ 40,607
- -------------------------------------------------------------------------------
NET ASSETS......................................................... $12,641,827
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSISTS OF:
Paid in Capital................................................... $ 9,624,341
Undistributed Net Investment Income............................... 19,698
Accumulated Net Realized Gain..................................... 1,284,480
Unrealized Appreciation........................................... 1,713,308
- -------------------------------------------------------------------------------
NET ASSETS......................................................... $12,641,827
================================================================================
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding (Unlimited Authorization, no par
value)........................................................... 1,098,695
Net Asset Value, Offering and Redemption Price Per Share.......... $ 11.51
================================================================================
</TABLE>

The accompanying notes are an integral part of the financial statements.

8
<PAGE>

NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended April 30, 1997

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends................................................. $ 412,939
Interest.................................................. 29,553
- ---------------------------------------------------------------------------------
Total Income............................................. 442,492
- ---------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees............................................... $ 73,749
Less: Fees Waived........................................ (73,749) --
--------
Administrative Fees--Note C............................... 70,748
Registration Fees......................................... 25,546
Printing Fees............................................. 18,559
Auditing Fees............................................. 10,386
Legal Fees................................................ 10,340
Trustees' Fees--Note G.................................... 2,190
Custodian Fees--Note D.................................... 1,924
Other Expenses............................................ 1,156
Expenses Assumed by Adviser--Note B....................... (7,973)
- ---------------------------------------------------------------------------------
Total Expenses........................................... 132,876
Expense Offset--Note A.................................... (80)
Net Expenses............................................. 132,796
- ---------------------------------------------------------------------------------
NET INVESTMENT INCOME...................................... 309,696
- ---------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS........................... 1,768,701
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON IN-
VESTMENTS................................................. 741,741
- ---------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS.................................... 2,510,442
- ---------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $2,820,138
=================================================================================
</TABLE>

The accompanying notes are an integral part of the financial statements.

9
<PAGE>

NEWBOLD'S EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
YEAR SEPTEMBER 13,
ENDED 1995* TO
APRIL 30, APRIL 30,
1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................... $ 309,696 $ 163,403
Net Realized Gain................................... 1,768,701 128,335
Net Change in Unrealized Appreciation/Depreciation.. 741,741 971,567
- --------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Operations....................................... 2,820,138 1,263,305
- --------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income............................... (319,779) (133,247)
Net Realized Gain................................... (1,673,443) (23,745)
- --------------------------------------------------------------------------------
Total Distributions................................ (1,993,222) (156,992)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular..................................... 1,122,250 18,446,170
--In Lieu of Cash Distributions............... 1,944,748 134,188
Redeemed............................................ (5,341,743) (5,597,015)
- --------------------------------------------------------------------------------
Net Increase (Decrease) from Capital Share Transac-
tions............................................. (2,274,745) 12,983,343
- --------------------------------------------------------------------------------
Total Increase (Decrease)........................... (1,447,829) 14,089,656
Net Assets:
Beginning of Period................................. 14,089,656 --
- --------------------------------------------------------------------------------
End of Period (including undistributed net invest-
ment income of $19,698 and $30,156, respectively).. $12,641,827 $14,089,656
================================================================================
(1) Shares Issued and Redeemed:......................
Shares Issued.................................... 99,728 1,820,335
In Lieu of Cash Distributions.................... 183,735 12,814
Shares Redeemed.................................. (467,635) (550,282)
- --------------------------------------------------------------------------------
(184,172) 1,282,867
================================================================================
</TABLE>
* Commencement of Operations

The accompanying notes are an integral part of the financial statements.

10
<PAGE>

NEWBOLD'S EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD

<TABLE>
<CAPTION>
YEAR SEPTEMBER 13,
ENDED 1995* TO
APRIL 30, APRIL 30,
1997 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................. $ 10.98 $ 10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................................ 0.24 0.14
Net Realized and Unrealized Gain on Investments...... 1.79 0.98
- -------------------------------------------------------------------------------
Total From Investment Operations.................... 2.03 1.12
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income................................ (0.25) (0.12)
Net Realized Gain.................................... (1.25) (0.02)
- -------------------------------------------------------------------------------
Total Distributions................................. (1.50) (0.14)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD........................ $ 11.51 $ 10.98
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+......................................... 19.89% 11.31%***
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)................ $12,642 $14,090
Ratio of Expenses to Average Net Assets.............. 0.90% 0.90%**
Ratio of Net Investment Income to Average Net Assets. 2.10% 2.27%**
Portfolio Turnover Rate.............................. 83% 75%
Average Commission Rate.............................. $0.0599 $0.0566
- -------------------------------------------------------------------------------
Voluntarily Waived Fees and Expenses Assumed by the
Adviser Per Share.................................... $ 0.06 $ 0.06
Ratio of Expenses to Average Net Assets Including Ex-
pense Offsets........................................ 0.90% 0.90%**
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations
** Annualized
*** Not Annualized
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.

The accompanying notes are an integral part of the financial statements.

11
<PAGE>

NEWBOLD'S EQUITY PORTFOLIO

NOTES TO FINANCIAL STATEMENTS

UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The Newbold's
Equity Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a
diversified, open-end management investment company. At April 30, 1997, the
UAM Funds were comprised of forty-two active portfolios. The financial
statements of the remaining portfolios are presented separately. The Portfolio
is authorized to offer two separate classes of shares--Institutional Class
Shares and Institutional Service Class Shares. Both classes of shares have
identical voting rights (except Institutional Service Class shareholders have
exclusive voting rights with respect to matters relating to distribution and
shareholder servicing of such shares), dividend, liquidation and other rights.
At April 30, 1997, Institutional Class Shares are the only active class of
shares for the Newbold's Equity Portfolio. The objective of the Newbold's
Equity Portfolio is to achieve maximum long-term total return, consistent with
reasonable risk to principal, by investing primarily in a diversified
portfolio of undervalued equity securities of statistically attractive
companies.

1. SECURITY VALUATION: Securities listed on a securities exchange for which
market quotations are readily available are valued at the last quoted sales
price as of the close of the exchange on the day the valuation is made or,
if no sale occurred on such day, at the bid price on such day. Price
information on listed securities is taken from the exchange where the
security is primarily traded. Over-the-counter and unlisted securities are
valued at the current bid price. Short-term investments that have remaining
maturities of sixty days or less at time of purchase are valued at amortized
cost, if it approximates market value. The value of other assets and
securities for which no quotations are readily available is determined in
good faith at fair value using methods determined by the Board of Trustees.

2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code
and to distribute all of its taxable income. Accordingly, no provision for
Federal income taxes is required in the financial statements.

12
<PAGE>

NEWBOLD'S EQUITY PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The amount and character of income and capital gain distributions to be paid
are determined in accordance with Federal income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing book and tax treatments in the timing of the
recognition of gains or losses on investments, return of capital dividends,
and in-kind contributions.

Permanent book and tax basis differences relating to shareholder
distributions resulted in reclassifications of $375 to decrease
undistributed net investment income and $365,127 to increase accumulated net
realized gain, with a decrease to paid in capital of $364,752.

5. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual basis. Most expenses of the UAM
Funds can be directly attributed to a particular portfolio. Expenses which
cannot be directly attributed are apportioned among the portfolios of the
UAM Funds based on their relative net assets. Income, expenses (other than
class specific expenses) and realized and unrealized gains or losses are
allocated to each class of shares based upon their relative net assets.
Custodian fees for the Portfolio have been increased to include expense
offsets, if any, for custodian balance credits.

B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Newbold's Asset Management Inc. (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio at a fee calculated at an annual rate of 0.50% of
average daily net assets. The Adviser has voluntarily agreed to waive a
portion of its advisory fees and to assume expenses, if necessary, in order to
keep the Portfolio's total annual operating expenses, after the effect of
expense offset arrangements, from exceeding 0.90% of average daily net assets.

C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, computed
daily and payable monthly, of 0.19% of the first $200 million of the combined
aggregate net assets; plus 0.11% of the next $800 million of the combined
aggregate net assets; plus 0.07% of the next $2 billion of the combined
aggregate net assets; plus 0.05% of the combined aggregate net assets in
excess of $3 billion. The fees are allocated among the portfolios of the UAM
Funds on the basis of their relative net assets and are subject to a graduated
minimum fee schedule per portfolio which rises from $2,000 per month, upon
inception of a portfolio, to $70,000 annually after two years. For portfolios
with more than one class of shares, the minimum annual fee increases to
$90,000. In addition, the Administrator receives a Portfolio-specific monthly
fee at an annual rate of 0.06% of average daily net assets of the Portfolio.
The Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan
Bank, under which CGFSC agrees to provide certain

13
<PAGE>

NEWBOLD'S EQUITY PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
services, including but not limited to, administration, fund accounting,
dividend disbursing and transfer agent services. Pursuant to the Mutual Funds
Service Agreement, the Administrator pays CGFSC a monthly fee. For the year
ended April 30, 1997, $61,963 was paid to CGFSC for its services.

E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.

G. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds, and reimbursement of expenses incurred in
attending Trustee meetings.

H. PURCHASES AND SALES: For the year ended April 30, 1997, the Portfolio made
purchases of $11,713,353 and sales of $14,555,693 of investment securities
other than long-term U.S. Government and short-term securities. There were no
purchases or sales of long-term U.S. Government securities.

I. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 1/8th of 1% per annum, payable at the end of
each calendar quarter is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. During the year ended
April 30, 1997, the Portfolio had no borrowings under the agreement.

J. OTHER: At April 30, 1997, 31.6% of total shares outstanding were held by 2
record shareholders owning more than 10% of the aggregate total shares
outstanding.

14
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
UAM Funds Trust and Shareholders of
Newbold's Equity Portfolio

In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Newbold's
Equity Portfolio (the "Portfolio"), a Portfolio of UAM Funds Trust, at April
30, 1997, and the results of its operations, the changes in its net assets and
the financial highlights for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio'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 April 30, 1997 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.

Price Waterhouse LLP
Boston, Massachusetts
June 9, 1997

- -------------------------------------------------------------------------------

FEDERAL INCOME TAX INFORMATION (UNAUDITED):

At April 30, 1997, the Portfolio hereby designates approximately $1,018,000 as
a long-term capital gain dividend for the purpose of the dividend paid
deduction on its Federal income tax return.

For the year ended April 30, 1997, the percentage of dividends paid from
investment company taxable income that qualify for the 70% dividend received
deduction for corporate shareholders is 38.38%.

15
<PAGE>

- -------------------------------------------------------------------------------

UAM FUNDS
TJ CORE EQUITY
PORTFOLIO

- -------------------------------------------------------------------------------

OFFICERS AND TRUSTEES

William H. Park
Vice President
- -------------------------------------------------------------------------------
INVESTMENT ADVISER
Tom Johnson Investment Management, Inc.
211 North Robinson, Suite 450
Oklahoma City, OK 73102
- -------------------------------------------------------------------------------
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street Boston, MA 02110
- -------------------------------------------------------------------------------
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
- -------------------------------------------------------------------------------
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square Philadelphia, PA 19103
- -------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
- -------------------------------------------------------------------------------
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street Boston, MA 02110
- -------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to
others only if preceded or accompanied by a current prospectus.

- -------------------------------------------------------------------------------

[LOGO OF UAM FUNDS APPEARS HERE]

TJ CORE
EQUITY
PORTFOLIO

- -------------------------------------------------------------------------------

ANNUAL REPORT
APRIL 30, 1997
<PAGE>

Dear Shareholders,

The equity markets continued their strong bull market performance for the
twelve month period ended April 30, 1997. The extraordinary gains in the Dow
Jones Industrial Average and the Standard & Poor's 500 Index were briefly
slowed by nearly ten percent corrections in July of 1996 and again in the
first quarter of 1997. However, each short-lived correction was followed by
strong broad based rallies, and both the Dow Jones Industrial Average and the
S&P 500 posted large gains of 28.61 percent and 25.12 percent, respectively,
for the twelve month period ended April 30, 1997. For the same twelve month
period the TJ Core Equity Portfolio produced gains of 20.14 percent.

Market valuation levels continue to be stretched above and beyond historical
ranges, and the defensive portfolio posture and conservative management style
consistent with the objectives of Tom Johnson Investment Management Inc. have
not participated as fully as more aggressive approaches in these overextending
rallies. As a result, the Portfolio underperformed the broader market indices
for the year ended April 30, 1997.

The fiscal quarter ended April 30, 1997, showed more signs of increasing
volatility in the equity and fixed income markets. The fixed income markets
reacted to the Federal Reserve's 25 basis point increase in the Fed Funds rate
and sent the yield on the 30 year U.S. Treasury bond above 7.0 percent for the
first time since September 1996. The broad based equity averages also reacted
negatively as the Dow Jones Industrial Average and the S&P 500 experienced
corrections of nearly 10 percent from the record highs set in February. The
correction was very short-lived as equity markets rallied to near record highs
and 30 year treasury bond yields declined to below 7.0 percent with a yield of
6.95 percent at the quarter end of April 30, 1997. The increased volatility in
the markets has provided opportunities for the Adviser to find issues at
attractive valuations and solidify the Portfolio's long term position. For the
quarter ended April 30, 1997, the TJ Core Equity Portfolio outperformed the
S&P 500 Index with a return of 3.00 percent versus the index return of 2.42
percent.

The Adviser has taken advantage of the increasing volatility and used this
opportunity to cut back some of the Portfolio's fully valued positions, and
reinvest the proceeds to increase current holdings or purchase new positions
in more attractively valued stocks. During the twelve months ended April 30,
1997, the Portfolio reduced positions in Compaq Computers Inc., Bristol-Meyers
Inc., Merck & Co., Unilever, and General Electric. The proceeds from these
sales were used to purchase new positions in currently out of favor low cost
industry leaders such as Southwest Airlines, Wal-Mart Stores, Block, H&R Inc.,
International Business Machines and Columbia Healthcare. The remaining
proceeds were used to increase the Portfolio's position in attractively valued
existing holdings of AT&T Inc., Ford Motor Co., Cognizant Inc. and Foster
Wheeler Co.

The recent volatility in stock prices is expected to continue as momentum
investors jump from one market segment to another in search of the level of
performance enjoyed in recent years. In our view, returns similar to the
recent year's outstanding gains are not likely, as the economic outlook
becomes more uncertain and earnings advances become more difficult to
maintain. As a result, the Adviser will continue to emphasize the defensive
posture of the TJ Core Equity Portfolio, and will use instances of increasing
volatility as opportunities to accumulate undervalued companies with favorable
long term prospects.

Tom Johnson Investment Management, Inc.

1
<PAGE>

Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 PURCHASE IN THE
TJ CORE EQUITY PORTFOLIO AND THE STANDARD & POOR'S 500 INDEX (S&P 500)

- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED APRIL 30, 1997
- --------------------------------------------------------------------------------
1 YEAR SINCE 9/28/95*++
- --------------------------------------------------------------------------------
20.14% 19.91%
- --------------------------------------------------------------------------------

[LINE GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
TJ CORE EQUITY PORTFOLIO S&P 500 INDEX+
<S> <C> <C>
9/28/95*++ 10,000 10,000
4/30/96 11,113 11,335
4/30/97 13,351 14,182
</TABLE>

Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate. When shares are redeemed, they may
be worth more or less than the original cost.

* Commencement of Operations

** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such reduction of expenses, total return would be
lower.

++ For comparative purposes, the value of the S&P 500 Index on 9/30/95 is used
as the beginning value on 9/28/95.

DEFINITION OF THE COMPARATIVE INDEX
-----------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.

Please note that one cannot invest in an unmanaged index.

2
<PAGE>

TJ CORE EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (96.0%)
- -------------------------------------------------------------------------------
AUTOMOTIVE (4.3%)
Ford Motor Co. ............................................. 3,600 $ 125,100
- -------------------------------------------------------------------------------
BANKS (3.4%)
First Union Corp. .......................................... 600 50,400
NationsBank Corp. .......................................... 800 48,300
----------
98,700
- -------------------------------------------------------------------------------
BASIC RESOURCES (1.7%)
Halliburton Co. ............................................ 700 49,437
- -------------------------------------------------------------------------------
BEVERAGES, FOOD & TOBACCO (4.5%)
Anheuser-Busch Cos., Inc.................................... 400 17,150
Heinz (H.J.) Co. ........................................... 1,500 62,250
Sara Lee Corp............................................... 1,200 50,400
----------
129,800
- -------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (8.7%)
Dun & Bradstreet Corp. ..................................... 3,800 93,575
Gannett Co. ................................................ 1,000 87,250
McGraw-Hill Cos., Inc. ..................................... 1,400 71,225
----------
252,050
- -------------------------------------------------------------------------------
BUILDING MATERIALS (4.0%)
Foster Wheeler Corp. ....................................... 3,000 115,875
- -------------------------------------------------------------------------------
CHEMICALS (3.4%)
Mallinckrodt Group, Inc. ................................... 2,700 98,212
- -------------------------------------------------------------------------------
ELECTRONICS (1.2%)
General Electric Co. ....................................... 300 33,262
- -------------------------------------------------------------------------------
ENERGY (7.2%)
Amoco Corp.................................................. 1,000 83,625
Coastal Corp................................................ 1,500 71,250
Mobil Corp. ................................................ 400 52,000
----------
206,875
- -------------------------------------------------------------------------------
FINANCIAL SERVICES (10.3%)
American Express Co. ....................................... 1,000 65,875
Block, H&R Inc. ............................................ 3,700 119,325
Fannie Mae.................................................. 1,700 69,913
Lehman Brothers Holdings, Inc. ............................. 1,200 40,650
----------
295,763
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

3
<PAGE>

TJ CORE EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
HEALTH CARE (2.8%)
Columbia/HCA Healthcare Corp. .............................. 500 $ 17,500
United Healthcare Corp...................................... 1,300 63,212
----------
80,712
- -------------------------------------------------------------------------------
HOLDING COMPANY (1.2%)
Textron, Inc. .............................................. 300 33,413
- -------------------------------------------------------------------------------
INDUSTRIAL (4.0%)
Cooper Industries, Inc. .................................... 2,500 115,000
- -------------------------------------------------------------------------------
INSURANCE (1.8%)
ITT Hartford Group, Inc. ................................... 700 52,150
- -------------------------------------------------------------------------------
MANUFACTURING (4.8%)
ITT Industries, Inc. ....................................... 3,600 90,900
Tyco International Ltd...................................... 800 48,800
----------
139,700
- -------------------------------------------------------------------------------
METALS (2.1%)
USX-U.S. Steel Group, Inc................................... 2,100 61,425
- -------------------------------------------------------------------------------
OFFICE EQUIPMENT (1.1%)
Pitney Bowes, Inc. ......................................... 500 32,000
- -------------------------------------------------------------------------------
PAPER & PACKAGING (2.0%)
Union Camp Corp. ........................................... 1,200 58,350
- -------------------------------------------------------------------------------
PHARMACEUTICALS (3.8%)
Bristol-Myers Squibb Co. ................................... 1,000 65,500
Merck & Co., Inc............................................ 500 45,250
----------
110,750
- -------------------------------------------------------------------------------
RETAIL (2.9%)
Wal-Mart Stores, Inc. ...................................... 3,000 84,750
- -------------------------------------------------------------------------------
SERVICES (5.6%)
ACNielsen Corp.............................................. 533 7,995
Cognizant Corp. ............................................ 2,000 65,250
WMX Technologies, Inc....................................... 3,000 88,125
----------
161,370
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

4
<PAGE>

TJ CORE EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS--(CONTINUED)
April 30, 1997

<TABLE>
<CAPTION>
SHARES VALUE+
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--(CONTINUED)
- -------------------------------------------------------------------------------
TECHNOLOGY (8.1%)
Avnet, Inc. ............................................. 1,500 $ 91,313
*Compaq Computer Corp. .................................. 500 42,688
International Business Machines Corp..................... 600 96,450
NCR Corp. ............................................... 118 3,422
----------
233,873
- -------------------------------------------------------------------------------
TELECOMMUNICATIONS (1.0%)
Lucent Technologies, Inc................................. 486 28,735
- -------------------------------------------------------------------------------
TRANSPORTATION (2.6%)
Southwest Airlines Co.................................... 2,700 74,250
- -------------------------------------------------------------------------------
UTILITIES (3.5%)
AT&T Corp................................................ 3,000 100,500
- -------------------------------------------------------------------------------
TOTAL COMMON STOCKS (COST $2,369,970)..................... 2,772,052
- -------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
- -------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (4.3%)
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT
Chase Securities, Inc. 5.20%, dated 04/30/97, due
05/01/97, to be repurchased at $124,018, collateralized
by $124,710 of various U.S. Treasury Notes, 4.75%-
6.125%, due 08/31/98-10/31/98, valued at $124,100
(COST $124,000)......................................... $124,000 124,000
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.3%) (COST $2,493,970)(a)........... 2,896,052
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (-0.3%)................ (7,694)
- -------------------------------------------------------------------------------
NET ASSETS (100%)......................................... $2,888,358
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
(a) The cost for federal income tax purposes was $2,494,270. At April 30,
1997, net unrealized appreciation for all securities based on tax cost was
$401,782. This consisted of aggregate gross unrealized appreciation for
all securities of $442,712 and aggregate gross unrealized depreciation for
all securities of $40,930.

The accompanying notes are an integral part of the financial statements.

5
<PAGE>

TJ CORE EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997

<TABLE>
- -------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at Cost............................................... $2,493,970
==========
Investments, at Value.............................................. $2,896,052
Cash............................................................... 550
Receivable for Portfolio Shares Sold............................... 43,072
Receivable due from Investment Adviser--Note B..................... 12,798
Dividends Receivable............................................... 3,451
- -------------------------------------------------------------------------------
Total Assets...................................................... 2,955,923
- -------------------------------------------------------------------------------
LIABILITIES
Payable for Investments Purchased.................................. 27,029
Payable for Administrative Fees--Note C............................ 7,180
Payable for Distribution and Service Fees--Note E.................. 2,095
Payable for Portfolio Shares Redeemed.............................. 1,056
Payable for Account Services Fees--Note F.......................... 638
Payable for Trustees' Fees--Note G................................. 498
Other Liabilities.................................................. 29,069
- -------------------------------------------------------------------------------
Total Liabilities................................................. 67,565
- -------------------------------------------------------------------------------
NET ASSETS.......................................................... $2,888,358
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS CONSISTS OF:
Paid in Capital.................................................... $2,436,581
Undistributed Net Investment Income................................ 2,467
Accumulated Net Realized Gain...................................... 47,228
Unrealized Appreciation............................................ 402,082
- -------------------------------------------------------------------------------
NET ASSETS.......................................................... $2,888,358
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
INSTITUTIONAL SERVICE CLASS SHARES
Shares Issued and Outstanding (Unlimited authorization, no par
value)............................................................ 221,292
Net Asset Value, Offering and Redemption Price Per Share........... $ 13.05
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

6
<PAGE>

TJ CORE EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
For the Year Ended April 30, 1997

<TABLE>
- ---------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends................................................... $ 39,000
Interest.................................................... 5,459
- ---------------------------------------------------------------------------------
Total Income............................................... 44,459
- ---------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees--Note B
Basic Fees................................................. $ 14,372
Less: Fees Waived.......................................... (14,372) --
--------
Registration and Filing Fees................................ 11,642
Administrative Fees--Note C................................. 60,691
Custodian Fees--Note D...................................... 2,590
Printing Fees............................................... 18,857
Audit Fees.................................................. 10,635
Distribution and Service Fees--Note E....................... 4,790
Account Services Fees--Note F............................... 638
Trustees' Fees--Note G...................................... 2,036
Other Expenses.............................................. 1,536
Expenses Assumed by the Adviser--Note B..................... (89,121)
- ---------------------------------------------------------------------------------
Total Expenses............................................. 24,294
Expense Offset--Note A...................................... (321)
- ---------------------------------------------------------------------------------
Net Expenses............................................... 23,973
- ---------------------------------------------------------------------------------
NET INVESTMENT INCOME........................................ 20,486
- ---------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS............................. 60,890
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION OF
INVESTMENTS................................................. 317,028
- ---------------------------------------------------------------------------------
NET GAIN ON INVESTMENTS...................................... 377,918
- ---------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS......... $398,404
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>

The accompanying notes are an integral part of the financial statements.

7
<PAGE>

TJ CORE EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
YEAR SEPTEMBER 28,
ENDED 1995* TO
APRIL 30, APRIL 30,
1997 1996
- ----------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income................................. $ 20,486 $ 5,373
Net Realized Gain..................................... 60,890 3,130
Net Change in Unrealized Appreciation/Depreciation.... 317,028 85,054
- ----------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations. 398,404 93,557
- ----------------------------------------------------------------------------------
DISTRIBUTIONS:
Net Investment Income................................. (18,293) (5,111)
Net Realized Gain..................................... (16,792) --
- ----------------------------------------------------------------------------------
Total Distributions.................................. (35,085) (5,111)
- ----------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular....................................... 1,596,878 1,021,045
--In Lieu of Cash Distributions..................... 35,048 5,111
Redeemed.............................................. (130,217) (91,272)
- ----------------------------------------------------------------------------------
Net Increase from Capital Share Transactions......... 1,501,709 934,884
- ----------------------------------------------------------------------------------
Total Increase........................................ 1,865,028 1,023,330
Net Assets:
Beginning of Period................................... 1,023,330 --
- ----------------------------------------------------------------------------------
End of Period (including undistributed net investment
income of $2,467 and $274, respectively)............. $2,888,358 $1,023,330
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
(1)Shares Issued and Redeemed:
Shares Issued........................................ 136,745 100,921
In Lieu of Cash Distributions........................ 3,000 481
Shares Redeemed...................................... (11,047) (8,808)
- ----------------------------------------------------------------------------------
128,698 92,594
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations

The accompanying notes are an integral part of the financial statements.

8
<PAGE>

TJ CORE EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD

<TABLE>
<CAPTION>
YEAR SEPTEMBER 28,
ENDED 1995* TO
APRIL 30, APRIL 30,
1997 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................. $ 11.05 $ 10.00
- -------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................................ 0.12 0.06
Net Realized and Unrealized Gain on Investments...... 2.08 1.05
- -------------------------------------------------------------------------------
Total From Investment Operations.................... 2.20 1.11
- -------------------------------------------------------------------------------
DISTRIBUTIONS
Net Investment Income................................ (0.11) (0.06)
Net Realized Gain.................................... (0.09) --
- -------------------------------------------------------------------------------
Total Distributions................................. (0.20) (0.06)
- -------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD........................ $ 13.05 $ 11.05
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL RETURN+......................................... 20.14% 11.13%***
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)................ $ 2,888 $ 1,023
Ratio of Expenses to Average Net Assets.............. 1.26% 1.38%**
Ratio of Net Investment Income to Average Net Assets. 1.07% 1.06%**
Portfolio Turnover Rate.............................. 27% 17%
Average Commission Rate.............................. $0.0600 $0.0600
- -------------------------------------------------------------------------------
Voluntarily Waived Fees and Expenses Assumed by the
Adviser Per Share.................................... $ 0.60 $ 0.74
Ratio of Expenses to Average Net Assets Including
Expense Offsets...................................... 1.25% 1.25%**
- -------------------------------------------------------------------------------
</TABLE>
* Commencement of Operations.
** Annualized.
*** Not Annualized.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period.

The accompanying notes are an integral part of the financial statements.

9
<PAGE>

TJ CORE EQUITY PORTFOLIO

NOTES TO FINANCIAL STATEMENTS

UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The TJ Core
Equity Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a
diversified, open-end management investment company. At April 30, 1997, the
UAM Funds were composed of forty-two active portfolios. The financial
statements of the remaining portfolios are presented separately. The objective
of the TJ Core Equity Portfolio is to provide maximum total return consistent
with reasonable risk to principal by investing in the common stock of quality
companies with lower valuations in sectors of the economy exhibiting strong,
or improving relative performance.

1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last quoted
sales price as of the close of the exchange on the day the valuation is
made or, if no sale occurred on such day, at the bid price on such day.
Price information on listed securities is taken from the exchange where the
security is primarily traded. Over-the-counter and unlisted securities are
valued at the current bid price. Short-term investments that have remaining
maturities of sixty days or less at time of purchase are valued at
amortized cost, if it approximates market value. The value of other assets
and securities for which no quotations are readily available is determined
in good faith at fair value using methods determined by the Board of
Trustees.

10
<PAGE>

TJ CORE EQUITY PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles. These differences
are primarily due to differing book and tax treatments in the timing of the
recognition of gains or losses on investments.

Current year permanent book-tax differences, if any, are not included in
ending undistributed net investment (income) loss for the purpose of
calculating net investment income (loss) per share in the financial
highlights.

5. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses
on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend date.
Interest income is recognized on the accrual basis. Most expenses of the
UAM Funds can be directly attributed to a particular portfolio. Expenses
which cannot be directly attributed are apportioned among the portfolios of
the UAM Funds based on their relative net assets. Custodian fees for the
Portfolio have been increased to include expense offsets, if any, for
custodian balance credits.

B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Tom Johnson Investment Management, Inc. (the "Adviser"), a wholly-owned
subsidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio at a fee calculated at an annual rate of
0.75% of average daily net assets. Through January 1, 1999, the Adviser has
voluntarily agreed to waive a portion of its advisory fees and to assume
expenses, if necessary, in order to keep the Portfolio's total annual
operating expenses, after the effect of expense offset arrangements, from
exceeding 1.25% of average daily net assets.

C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, computed
daily and payable monthly, of 0.19% of the first $200 million of the combined
aggregate net assets; plus 0.11% of the next $800 million of the combined
aggregate net assets; plus 0.07% of the next $2 billion of the combined
aggregate net assets; plus 0.05% of the combined aggregate net assets in
excess of $3 billion. The fees are allocated among the portfolios of the UAM
Funds on the basis of their relative net assets and are subject to a graduated
minimum fee schedule per portfolio which rises from $2,000 per month, upon
inception of a portfolio, to $70,000 annually after two years. For portfolios
with more than one class of shares, the minimum annual fee increases to
$90,000. In addition, the Administrator receives a Portfolio-specific monthly
fee at an annual rate of 0.04% of average daily net assets of the Portfolio.
The Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan
Bank, under which CGFSC agrees to provide certain services, including but not
limited to, administration, fund accounting, dividend disbursing and transfer
agent services. Pursuant to the Mutual Funds Service Agreement, the
Administrator pays CGFSC a monthly fee. For the year ended April 30, 1997,
$59,928 was paid to CGFSC for its services.

11
<PAGE>

TJ CORE EQUITY PORTFOLIO

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

1996 to April 30, 1997, the amount charged to the Portfolio by the Bank
aggregated $1,772, all of which is unpaid at April 30, 1997.

E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Portfolio has adopted Distribution and Service Plans (the "Plans") pursuant to
Rule 12b-1 under the Investment Company Act of 1940. Under the Plans, the
Portfolio may not incur distribution and service fees which exceed an annual
rate of 0.75% of the Portfolio's net assets, however, the Board has currently
limited aggregate payments under the Plans to 0.50% per annum of the
Portfolio's net assets. The Portfolio is not currently making payments for
distribution fees, however the Portfolio does pay service fees at an annual
rate of 0.25% of the average daily value of shares owned by clients of the
Service Agents.

G. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds, and reimbursement of expenses incurred in
attending Trustee meetings.

H. PURCHASES AND SALES: For the year ended April 30, 1997, the Portfolio
made purchases of $1,879,435 and sales of $503,223 of investment securities
other than long-term U.S. Government and short-term securities. There were no
purchases or sales of long-term U.S. Government securities.

I. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 1/8th of 1% per annum, payable at the end of
each calendar quarter is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. During the year ended
April 30, 1997, the Portfolio had no borrowings under the agreement.

J. OTHER: At April 30, 1997, 69.6% of total shares outstanding were held by
2 record shareholders owning more than 10% of the aggregate total shares
outstanding.

12
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Trustees of
UAM Funds Trust and Shareholders of
TJ Core Equity Portfolio

In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the TJ Core Equity
Portfolio (the "Portfolio"), a Portfolio of UAM Funds Trust, at April 30,
1997, and the results of its operations, the changes in its net assets and the
financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio'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 April 30, 1997 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.

Price Waterhouse LLP
Boston, Massachusetts
June 9, 1997

- -------------------------------------------------------------------------------

FEDERAL INCOME TAX INFORMATION (UNAUDITED):

For the period ended April 30, 1997, the percentage of dividends paid from
investment company taxable income that qualify for the 70% dividend received
deduction for corporate shareholders is 78.60%.