1998 SEMI-ANNUAL REPORT
Fellow Shareholders:
We are pleased to present our semi-annual report for the 6-month period
ended May 31, 1998. We hope you have had a chance to visit your
new web site at HTTP://WWW.IPSFUNDS.COM. We now update all performance
statistics monthly and portfolio stocks daily. We added a YAHOO! button on
the home page for daily quotes, insider trading, news and analysis on each
Fund company. The Fund has now been in existence for three and a half
years, and is registered or exempt in 34 states. Your Fund again received
more favorable publicity, this time a #3 ranking by LIPPER ANALYTICAL
SERVICES in USA TODAY in the Growth & Income category, for the three-month
period ended March 31, 1998, with a quarterly total return of 17.2% and a 1
year return of 51.9%, among 569 funds. Your Fund's annualized return as of
the USA TODAY ranking was 27.7% since inception. Your fund also received
favorable mention in an article in the 4-28-98 FORBES DIGITAL TOOL, and
Fund manager Robert Loest was recently profiled in the June 15 BOSTON GLOBE.
YOUR MONEY magazine ranked the Fund #9 among G&I funds for the one year
period ended 3/31/98, with a total return of 51.9%. Over the last six months
we have worked to reduce your Fund's volatility due to its large technology
position, relative to the overall market. Its risk-return characteristics
have improved compared with both the VALUE LINE ARITHMETIC & S&P 500
COMPOSITES, despite a technology position exceeding 40%, improving its 6-
month and 1-year relative returns.
[GRAPHIC APPEARS HERE]
FIGURE 1. The data presented herein and below represent past performance
and are not a guarantee of future performance. The value of your shares
may fluctuate and be worth more or less at redemption than their original
cost.
<TABLE>
<CAPTION>
TOTAL ANNUAL RETURN FOR: IPS MILLENNIUM VALUE LINE S&P 500
FUND ARITHMETIC INDEX COMPOSITE
<S> <C> <C> <C>
6 months ended 5/31/98 12.37% 10.59% 15.03%
12 months ended 5/31/98 28.04% 26.73% 29.98%
3 years ended 5/31/98 25.63% 25.02% 28.67%
Inception 1/3/95 - 5/31/98 24.81% 26.13% 30.79%
</TABLE>
The total returns above include changes in the Fund's share price, plus
reinvestment of any dividends (income) and capital gains (profits from
the sale of a stock). The VALUE LINE ARITHMETIC INDEX and the S&P 500
COMPOSITE have been adjusted to reflect total return with dividends
reinvested.
__________________________________________________________________________
<PAGE>
RECENT NEWS OF INTEREST
IPS MILLENNIUM FUND'S NAV is now listed in all major daily newspapers,
including THE NEW YORK TIMES, USA TODAY, THE WALL STREET JOURNAL, and THE
KNOXVILLE NEWS-SENTINEL. For those of you who like frequent updates on your
FUND'S NAV, please be sure to call our after-hours and weekend/holidays
number at 423-544-1842. We also update the NAV daily on our website, with
additional performance and sector allocation information that is updated at
least monthly. If you click on the title of any investment sector, you will
also see a list of all companies owned in that sector. This list is updated
daily, so that you will always know what companies you own. The blue YAHOO!
QUOTES button on the web site main page is configured to provide extensive
information to you for each stock owned in the Fund. The favorable publicity
has caused Fund assets to increase 44% in the past six months, to just under
$17 million as of May 31. We welcome your feedback, and any suggestions you
may have for additions to your Fund's website.
TABLE 1: BREAKDOWN BY MARKET CAP
- -------
May 31, 1998
Sector Number Percent
-----------------------------------------
1. Large Caps (>$10b) 16 27.6%
2. Mid Caps 28 43.1%
3. Small Caps (<$1b) 16 29.3%
---- -------
Total 60 100.0%
Median Market Capitalization: $3.3b
MANAGEMENT'S DISCUSSION & ANALYSIS
----------------------------------
CLASSIFICATION BY MARKET CAPITALIZATION.
TABLE 1 presents the Fund's makeup by market capitalization as of
5/31/98. 72.4% OF THE FUND IS COMPOSED OF MID- AND SMALL-CAP COMPANIES.
(Market capitalization is price per share times number of shares
outstanding, one good measure of a company's size.) Note that median market
cap is a better measure of the type of fund you own than is average market
cap. The reason is that average market cap is strongly biased by single,
large outliers like MICROSOFT (MSFT, OTC), one of our ten largest positions.
Note that the Fund's median market cap has increased slightly since the
last report, and that the distribution among the three size segments
has shifted a bit from mid- to large-caps. On Nov. 30, 1997, there were 35
small-cap companies, and 12 largecaps. Thus, while the percentage of large
cap companies has barely changed, there is more diversificationin that area
relative to mid- and small-cap stocks. This shift has been made as a part of
our ongoing adjustment of the portfolio's volatility (risk) to achieve our
minimum targeted level of return per unitof risk. As the return/risk ratio
falls for a particular segment of the portfolio, we reduce that segment's
representation in the portfolio, and increase our exposure to segments where
we believe the return/risk ratio is better. Our benchmark is the return per
unit of standard deviation for the VALUE LINE ARITHMETIC COMPOSITE, an
equally-weighted index of 1700 companies.
VOLATILITY OF RETURNS
In order to gain a better perspective on how your Fund's return and risk
characteristics have have changed, review FIGURE 2, at right. Note that the
Fund's risk-return characteristics deteriorated during the Fall and Winter
of 1996 due to underlying changes in the stock market. We modified the
Fund's portfolio in response to these changes, while maintaining our high
tech and growth weighting. The result is evident beginning in the second
quarter of 1997, with your Fund outperforming the market for four out of the
last five quarters. We have been successful in mitigating the increasing
volatility of the tech sector relative to returns by changing the makeup of
our tech universe, as well as adding a larger element of conservative, high
dividend companies, which we discuss in greater detail below. Nevertheless,
the Fund is still subject to the high volatility of the tech sector, so you
should continue to expect greater volatility than the overall market.
[GRAPHIC APPEARS HERE]
FIGURE 2. Volatility of returns relative to VALUE LINE ARITHMETIC
COMPOSITE.
COPYRIGHT 1998, IPS ADVISORY, INC. Page 2
<PAGE>
TABLE 2
-------
INDUSTRY SECTOR POSITION (%) POSITION (%)
5/31/98 11/30/97
- ---------------------------------------------------------
Cash 14.8% 11%
Banking & Brokerage 2.6% 3%
Broadcasting 0.0% 1%
Chemical, Specialty 1.0% 2%
Computer & Internet 9.3% 9%
Consumer Durables 0.0% 2%
CONSUMER NON-DURABLES 0.0% 3%
ELECTRONIC COMMERCE 5.0% 2%
ELECTRIC UTILITIES 18.5% 10%
Insurance 1.7% 2%
Medical Services 4.6% 5%
Pharmaceutical 3.8% 4%
Petroleum 1.5% 1%
REAL ESTATE INVESTMENT TRUSTS 3.3% 7%
SEMI-CONDUCTORS 5.5% 10%
Services, Misc. 6.0% 4%
Software 8.0% 10%
Telecommunications 13.2% 13%
Trucking & Transportation 0.8% 2%
- ---------------------------------------------------------
NOTE: Large changes are bolded.
CHANGES IN PORTFOLIO SECTORS
It is increasingly evident that we are undergoing a shift in the
sectors driving the stock market. You can see the sector changes we have
made to your Fund in TABLE 2, with large changes in bold type. There has
been a shift away from the CHIP & CHIP EQUIPMENT COMPANIES, and towards
SOFTWARE, INTERNET SERVICE COMPANIES & INFORMATION PROVIDERS, and
TELECOMMUNICATIONS. We believe the proximate cause of the shift is weakness
in the markets due to the economic weakness of the Pacific Rim countries.
However, WE BELIEVE THERE IS A MORE FUNDAMENTAL SHIFT OCCURRING. Semi-
conductor chip and equipment manufacturers are one of the primary sectors
that has gotten us where we are over the last 20 years or so. However, most
people have enough desktop processing power with the PENTIUM II. People are
increasingly using their computers for communications tasks, not number
crunching.
This means to us that the focus of the high tech part of the stock
market will increasingly turn toward those companies that enhance the
ability of people to use their computers for communications functions.
These are the software, Internet and telecommunications sectors. The chip
sector isn't dead, but it will become increasingly cyclical with the slowing
of growth in desktop computers.
In other sectors, we have continued to build up the ELECTRIC & GAS
UTILITY SECTOR to take advantage of what we view as a long-term decline in
interest rates due to increasing productivity and excess capacity in the
Pacific Rim, as well as continuing deregulation in this sector.
Deregulation always presents major opportunities, and we are buying the
companies that seem best positioned to take advantage of them. We have
allowed the REAL ESTATE INVESTMENT TRUST (REIT) sector to decline from 7% to
3% of the overall portfolio, due to our concern that the sector was
overvalued, and it has in fact continued to decline in value.
<PAGE>
CHANGES IN INVESTMENT POSITIONS: SALES
Due to the fundamental changes discussed above, we have sold our
APPLIED MATERIALS (AMAT, OTC), and lightened up on INTEL (INTC, OTC) and
other chip positions, especially those directly related to number crunching
as opposed to communications. We began reducing our positions before the
steep decline in Applied Materials, so we avoided a large loss, but we
realized a large capital gain to do so. As most of you are aware, we try
hard to keep from distributing gains to you. Giving our money to the IRS
unnecessarily is not one of our goals in life. As a result we will attempt
to whittle down these gains by selling losing positions over the next
several months. And yes, we do goof sometimes and make bad picks. We are
quite sure very few other mutual funds do this, since we haven't seen many
who mention it, but we are trying to be open about how we run the Fund.
After all, it's your money (and ours). We may still have to distribute some
capital gains at the end of the year, but it isn't a large amount, and we
are doing all we can to minimize it.
We sold TELEPORT COMMUNICATIONS (TCGI, OTC) because it was bought out
by AT&T (T, NYSE), which we do not want to own. We sold SIGMA-ALDRICH
(SIAL, OTC) due to concerns about a significant slowing of the company's
sales growth over the last few years. We lost money in selling QUANTUM
CORP. (QNTM, OTC), because the disk drive sector turned out to be in worse
shape than we had thought. Another of our larger holdings, BROOKS FIBER
PROPERTIES (BFPT, OTC) was taken over by WORLDCOM (WCOM, OTC). As a result,
we sold off some of our WorldCom, since we did not want to own as much as
the conversion would have given us. We sold ORACLE (ORCL, OTC) on Dec. 1 at
nearly $32, just a few days before it lost a third of its value, due to our
concerns regarding its market position. Finally, we sold off some of our
YAHOO! (YHOO, OTC) for a whopping gain. Bad mistake. You aren't supposed
to sell stuff that goes up, just stuff that goes down. Will Rogers already
warned us about this, and we didn't listen. We'll do better in the future.
CHANGES IN INVESTMENT POSITIONS: PURCHASES
The Fund raised significantly more cash due to temporary asset
repositioning, caused by the process of modifying the Fund's
risk-return profile. Cash levels above 5% are normally temporary, or due to
management's inability to find affordable companies to buy. Major additions
to your Fund's portfolio include the following companies:
COPYRIGHT 1998, IPS ADVISORY, INC. Page 3<PAGE>
<TABLE>
<CAPTION>
MAJOR NEW STOCK ADDITIONS LAST 6 MONTHS BUY PRICE RANGE PRICE ON 25 JUNE
--------------------------------------- --------------- ----------------
<S> <C> <C> <C>
America On-Line (AOL, NYSE) $79 - $90 $107.75
BMC Software (BMCS, OTC) $42 - $44 $ 53.00
EarthLink Network (ELNK, OTC) $56 - $67 $ 72.25
US Sprint (FON, NYSE) $58 - $71 $ 75.25
MindSpring (MSPG, OTC) $56 - $63 $ 94.88
Qwest Communications (QWST, OTC) $30 - $39 $ 32.63
MAJOR ADDITIONS TO EXISTING POSITIONS
-------------------------------------
Cambridge Technology Partners (CATP, OTC) $36 - $54 $ 54.88
Cisco Systems (CSCO, OTC) $75 - $76 $ 87.06
Enron Corp. (ENE, NYSE) $40 - $50 $ 50.00
FPL Group (FPL, NYSE) $56 - $62 $ 62.06
Intermedia Communications (ICIX, OTC) $25 - $38 $ 42.75
NIPSCO (NI, NYSE) $23 - $27 $ 27.44
Peoplesoft (PSFT, OTC) $33 - $47 $ 46.75
Sterling Commerce (SE, NYSE) $35 - $43 $ 45.63
</TABLE>
Note in the above lists the prevalence of utility (ENE, FPL, NI),
Internet (AOL, ELNK, MSPG, CSCO), telecommunications (FON, QWST, ICIX) and
software companies (BMCS, CATP, PSFT, SE). These four groups cover all major
additions to the fund in the last half year, and tell you clearly where we
are placing our emphasis. We believe there is an enormous opportunity in
deregulation of the power generation industry, and although it may be a more
gradual change than the development of the Internet, it will be huge.
Our strong focus on the Internet, software and telecommunications
reflect the rapid development of individuals' increasing inclination to use
their computers for communications, research and shopping, not number
crunching. These functions will spread rapidly to hand-held devices such as
palm-sized computers, PCS phones, and other small electronic appliances, as
the cost of specialized chips necessary to run them come down, and as
telecommunications costs drop.
THERE IS MORE TO THE STORY, HOWEVER. We are investing in different
aspects of a fundamental technological change similar to the invention of
the printing press in mid-15th century Europe. All major technological
revolutions are accomplished because a fundamental new technology
drastically reduces the cost of some critical resource that has limited
civilization's ability to progress beyond a certain point. THE ELIMINATION
OF THE LIMITS IMPOSED BY THESE CRITICAL RESOURCES INEVITABLY OCCUR VERY
RAPIDLY, WITHIN A GENERATION OR SO. The printing press brought the cost of
books down to less than 1/350th of what they had been in the age of scribes,
and drastically reduced the cost of information to the point where ordinary
people could afford books for the first time in human history.
The invention of the steam engine (and later, electric motors) finally
brought the cost of power down to the point where our civilization was no
longer limited by sail area or the number of horses (or slaves) one could
harness. Semi-conductors lowered the cost of processing information locally
by orders of magnitude. Fundamental technological changes have huge
consequences far beyond the immediate use of the new technology. THE
ABILITY, FOR THE FIRST TIME, OF FAMILIES TO AFFORD A BIBLE WAS DIRECTLY
RESPONSIBLE FOR THE PROTESTANT REFORMATION, AND THE ELIMINATION OF THE
CATHOLIC CHURCH AS THE MOST POWERFUL INSTITUTION IN EUROPE, something no one
could have predicted initially just from the ability to print cheap books.
Fundamental technological revolutions require a constant rethinking, in ways
we become unaccustomed to in the much longer periods of stability between
them, of where our civilization is going.
Periods of major investment opportunity seem always to coincide with
the elimination of the limits imposed on civilization by a critical limiting
resource. IN OUR VIEW, THAT CRITICAL RESOURCE TODAY IS THE COST OF BANDWIDTH
(the size of the pipe through which all digital data - voice, video, e-mail,
etc. - must pass). We expect that the companies that prosper the most will
be those companies that drive down the cost of bandwidth (QWST, FON, LU,
LVLT, WCOM), and those who prosper directly as a result of cheaper bandwidth
(AOL, YHOO, SE, MSFT, ELNK, MSPG, HRBC). The next major development for our
society will be the drop in bandwidth cost by orders of magnitude. We will
do our best to make sure you don't miss it. Thank you again for your
confidence in IPS MILLENNIUM FUND.
ROBERT LOEST, PH.D., CFA GREGORY A. D'AMICO
SENIOR PORTFOLIO MANAGER PRESIDENT
_______________________________________________________________________________
THIS SEMI-ANNUAL REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS UNLESS IT IS PROCEEDED OR ACCOMPANIED BY A PROSPECTUS
FOR IPS MILLENNIUM FUND.
_______________________________________________________________________________
COPYRIGHT 1998, IPS ADVISORY, INC. Page 4<PAGE>
FINANCIAL STATEMENTS
(UNAUDITED)
IPS MILLENNIUM FUND
_______________________________________________________________________________
STATEMENT OF ASSETS AND LIABILITIES
For the 6 months ended May 31, 1998
-----------------------------------
ASSETS:
Investments in securities, at value -
identified cost $11,248,647 $16,784,784
Cash .32
Accrued income
Sales of fund shares 5,700
Security sales 167,820
Dividends 11,587
Interest 6,284
Other assets 6,049
------------
Total assets 16,982,224
LIABILITIES:
Accrued expenses 16,998
------------
Total liabilities 16,998
------------
NET ASSETS ON MAY 31, 1998
Equivalent to $25.07 per share based on
676,701.207 shares of capital stock
outstanding $16,965,226
============
_______________________________________________________________________________
STATEMENT OF OPERATIONS
For the 6 months ended May 31, 1998
-----------------------------------
INVESTMENT INCOME:
Income
Dividend income $ 72,081
Interest 17,032
------------
Total income 89,113
Expenses:
Management fees 92,496
Expense reimbursement ( 1,604)
Organizational cost 1,604
------------
Total expense 92,496
------------
Net investment income ( 3,383)
------------
REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 830,324
Change in unrealized appreciation
of investments for the year 550,583
------------
Net gain (loss) on investments 1,380,907
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,377,524
============
FINANCIAL STATEMENTS
(UNAUDITED)
IPS MILLENNIUM FUND
_______________________________________________________________________________
STATEMENT OF CHANGES IN NET ASSETS
For the 6 months ended May 31, 1998
-----------------------------------
Six months ended Year ended
INCREASE (DECREASE) IN NET 1998 1997
ASSETS FROM OPERATIONS: ---- ----
Investment income-net ( $3,383) ($18,357)
Net realized gain on
investments 830,324 (227,520)
CHANGE IN UNREALIZED
APPECIATION 550,583 1,740,804
--------- ---------
Net increase in net assets 1,377,524 1,494,927
resulting from operations
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Investment income-net 0 0
Realized gains 0 (24,680)
--------- ---------
Net decrease in net assets due 0 (24,680)
to distributions to shareholders
CAPITAL SHARE TRANSACTIONS:
Issued-regular 4,250,985 4,773,237
Issued-in lieu of cash 0 24,531
distributions
Redeemed - regular ( 347,497) ( 197,315)
--------- ---------
INCREASE IN NET ASSETS DUE TO 3,903,487 4,600,453
CAPITAL SHARE TRANSACTIONS
INCREASE IN NET ASSETS 5,281,011 6,070,700
NET ASSETS
Beginning of year 11,684,215 5,613,515
End of period $16,965,226 $11,684,215
=========== ===========
<PAGE>
IPS MILLENNIUM FUND
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED MAY 31, 1998
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The company is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. The company began
selling shares and making investments on January 3, 1995. The Fund provides
investment management and advisory services for its shareholders, which
include individuals, qualified plans and trust accounts located states in
the United States.
SECURITY VALUATION - Investments in securities traded on a national
securities exchange (or reported on the NASDAQ national market) are stated
at the last reported sales price on the day of valuation; other securities
traded in the over-the-counter market and listed securities for which no
sale was reported on that date are stated at the last quoted bid price.
Short-term notes are stated at amortized cost, which is equivalent to value.
FEDERAL INCOME TAXES - The Fund's policy is to comply with the requirements
of the Internal Revenue Code that are applicable to regulated investment
companies and to distribute all its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
As of May 31, 1998, net unrealized appreciation on investments for book and
federal income tax purposes aggregated $3,364,819. The cost of portfolio
securities for book and federal income tax purposes was $11,248,647.
DISTRIBUTIONS TO SHAREHOLDERS - Dividends to shareholders are recorded on
the ex-dividend date.
OTHER - The Fund follows industry practice and records security transactions
on the trade date for performance calculations and the trade date plus one
for fund accounting. Dividend income is recognized on the ex-dividend date,
and interest income is recognized on an accrual basis. Discounts and
premiums on securities purchased are amortized over the life of the
respective securities.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NOTE 2 - DISTRIBUTIONS TO SHAREHOLDERS
As of May 31, 1998 there have been no distributions.
NOTE 3 - ORGANIZATIONAL EXPENSES
The Fund has incurred amortized organizational expenses in the amount of
$16,281. Organizational expenses are being amortized monthly over a period
of 60 months, beginning on January 3, 1995. The balance outstanding on May
31, 1998 was $6,093.23
NOTE 4 - CAPITAL SHARE TRANSACTIONS
As of May 31, 1998, there were an unlimited number of shares of no par value
capital stock authorized and capital paid in aggregated $12,973,169.
Transactions in capital stock for the period 11/30/97 through 05/31/98 were
as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
------ ------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Shares sold 177,611.589 234,740.915 $4,250,984 $4,773,237
Share issued in reinvestment
of Dividends 0 1,312.499 0 24,531
----------- ----------- ---------- ----------
Total 177,611.589 236,053.414 $4,250,984 $4,797,768
Shares redeemed 1,852.448 9,838.368 347,497 197,315
----------- ----------- ---------- ----------
Net increase 175,759.141 226,215.046 $3,903,487 $4,600,453
</TABLE>
NOTE 5 - INVESTMENT TRANSACTIONS
The Fund made purchases and sales of investment securities (excluding
short-term securities) of $8,993,903 and $5,329,976, respectively, during
the period December 1, 1997 through May 31, 1998; there were no investment
transactions involving U.S. Government obligations.
As of May 31, 1998 the unrealized appreciation of securities was $3,364,819;
accumulated undistributed net realized gains on investment transactions
totaled $830,324.
NOTE 6 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund pays advisory fees for investment management and advisory services
under a management agreement with IPS Advisory, Inc.(the Advisor). Under the
agreement, the Advisor will pay all of the Fund's operating expenses,
excluding brokerage fees and commissions, taxes, interest and extraordinary
expenses. The Fund is obligated to pay the Advisor a fee computed and
accrued daily and paid monthly at an annual rate of 1.40% of its average
daily net assets to and including $100,000,000, 1.15% of such assets from
$100,000,000 to and including $250,000,000, and 0.90% of such assets in
excess of $250,000,000.
Certain officers and trustees of the Fund are also officers and directors of
the investment advisor.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SIX MONTHS ENDED MAY 31, 1998
Securities Service Network, Inc .(SSNI), the Fund's underwriter, has
received no income from sales commissions earned on sales of the Fund
shares, since it is a no-load fund. Mr. D'Amico and Mr. Loest are
registered representatives of SSNI.
All securities trades for the Fund have been made through SSNI. Mr. D'Amico
and Mr. Loest, as registered representatives of SSNI, received benefits
from securities trading commissions paid by the Fund to SSNI. The Investment
Advisor has no soft dollar arrangements with any company.
NOTE 7 - PORTFOLIO MANAGER INVESTMENT DISCLOSURE
IPS Advisory, Inc. prohibits its portfolio managers from trading in
individual stocks. All of the invested assets of portfolio manager Robert
Loest, as well as his immediate family, are invested in IPS Millennium Fund.
________________________________________________________________________________
IPS MILLENNIUM FUND
FINANCIAL HIGHLIGHTS, SELECTED PER SHARE DATA AND RATIOS
________________________________________________________________________________
<TABLE>
<CAPTION>
For the period ended For the year ended For the year ended
May 31, 1998 Nov. 30, 1997 Nov. 30, 1996
------------ ------------- -------------
PER SHARE DATA: PER SHARE DATA: PER SHARE DATA:
<S> <C> <C> <C>
NET ASSET VALUE:
Beginning of period $22.310 $18.860 $14.996
INCOME FROM INVESTMENT OPERATIONS
Net Investment income (0.006) (0.046) 0.021
Net realized and unrealized gain
(loss) on investments 2.766 3.576 3.959
TOTAL INCOME (LOSS) FROM INVESTMENT OPERATIONS 2.760 3.530 3.980
LESS DISTRIBUTIONS:
Dividends from net investment income 0.000 0.000 (0.035)
Dividends from net realized gains on investments (0.000) (0.080) (0.081)
Total distributions $(0.000) $(0.080) $(0.116)
NET ASSET VALUE:
End of period $25.070 $22.310 $18.860
======== -------- --------
Total return (annualized) 24.826% 18.746% 26.754%
RATIOS:
Net assets, end of period (thousands) $16,965.226 $11,684.215 $5,613.515
Ratio of expenses to average net assets 1.40% 1.40% 1.40%
Ratio of net income to average net assets .03% 0.23% 0.76%
Portfolio turnover rate 42.77% 33.17% 55.17%
Average commissions per share $0.05100 $0.04050 $0.05705
________________________________________________________________________________________________________________________________
</TABLE>
See notes to financial statements.
<PAGE>
IPS MILLENNIUM FUND
INVESTMENT PORTFOLIO MAY 31, 1998
<TABLE>
<CAPTION>
________________________________________________________________________________________________
________________________________________________________________________________________________
SHARES OR MARKET PERCENT OF SECTOR
EQUITY SECURITIES: PRINCIPAL AMOUNT VALUE NET ASSETS WEIGHTING
________________________________________________________________________________________________
________________________________________________________________________________________________
<S> <C> <C> <C> <C>
BANKING & BROKERAGE 2.60%
- ------------------- -----
Chase Manhattan Bank 1,000 $136,063 0.8%
National Commerce Bancorp 3,932 $174,237 1.0%
Trustco & Bank of NY 4,600 $131,100 0.8%
BROADCASTING 0.40%
- ------------ -----
Heftel Broadcasting 2,000 $ 75,750 0.4%
COMPUTER & INTERNET EQUIPMENT 9.30%
- ----------------------------- -----
Cisco Systems 10,500 $794,063 4.7%
EMC Corp 19,000 $788,500 4.6%
ELECTRONIC COMMERCE 5.0%
- ------------------- ----
Cybercash Inc. 5,000 $ 75,313 0.4%
Harbinger Corp. 14,000 $325,938 1.9%
Open Market 6,000 $ 97,125 0.6%
Sterling Commerce 9,000 $357,188 2.1%
ELECTRIC & GAS UTILITIES 18.5%
- ------------------------- -----
Duke Power 12,000 $692,250 4.1%
Enron Corp. 16,300 $817,038 4.8%
FPL Group 9,000 $552,938 3.3%
Nipsco 24,500 $658,438 3.9%
Scana Corp 7,000 $201,688 1.2%
St. Joseph P&L 2,000 $ 37,625 0.2%
TECO Energy 7,000 $183,313 1.1%
INFORMATION & SERVICES 6.0%
- ---------------------- ----
America Online 3,100 $258,463 1.5%
Apollo Group 1,500 $ 47,906 0.3%
Cambridge Technology 7,000 $351,094 2.1%
Equifax Inc. 4,000 $145,500 0.9%
Yahoo! 2,000 $219,000 1.3%
INSURANCE 1.7%
- --------- ----
Executive Risk 1,000 $ 62,813 0.4%
Frontier Group 9,040 $219,785 1.3%
MEDICAL SERVICES 4.6%
- ---------------- ----
HBO & Company 8,200 $473,294 2.8%
Quintiles Transnational 6,200 $301,475 1.8%
OIL & GAS 1.5%
- --------- ----
Amoco Corp. 6,000 $250,500 1.5%
PHARMACEUTICALS & BIOTECHNOLOGY 3.8%
- ------------------------------- ----
Abbott Laboratories, Inc. 1,195 $ 88,803 0.5%
Affymetrix Inc 3,000 $ 80,625 0.5%
Chirex Inc 8,000 $170,000 1.0%
Heartport 3,000 $ 24,000 0.1%
Incyte Pharmaceuticals 3,000 $110,156 0.6%
Theragenics 6,000 $167,250 1.0%
REAL ESTATE INVESTMENT TRUST 3.3%
BRE Properties 5,000 $131,563 0.8%
Equity Residential Props 5,000 $244,688 1.4%
Mack-Cali Realty 5,000 $180,625 1.1%
<PAGE>
________________________________________________________________________________________________
________________________________________________________________________________________________
SHARES OR MARKET PERCENT OF SECTOR
EQUITY SECURITIES: PRINCIPAL AMOUNT VALUE NET ASSETS WEIGHTING
________________________________________________________________________________________________
________________________________________________________________________________________________
<S> <C> <C> <C> <C>
SEMI-CONDUCTOR TECHNOLOGY 5.5%
- ------------------------- ----
Analog Devices 7,000 $173,688 1.0%
Applied Materials Inc. 7,000 $224,000 1.3%
Intel, Inc. 2,000 $142,875 0.8%
Linear Technology 2,500 $174,844 1.0%
National Semiconductor 3,000 $ 48,750 0.3%
Solectron Corp 4,000 $165,500 1.0%
SOFTWARE 8.0%
- -------- ----
BMC Software 4,000 $184,250 1.1%
Computer Associates, Inc. 8,500 $448,906 2.6%
Microsoft 6,000 $508,875 3.0%
Peoplesoft 5,000 $218,438 1.3%
SPECIALTY CHEMICAL 1.0%
- ------------------ ----
Learonal 5,500 $162,594 1.0%
TELECOMMUNICATIONS
(SERVICE & EUIPMENT) 13.2%
- ------------------- -----
Earthlink Network 2,000 $109,000 0.6%
Intermedia Communications 4,000 $296,500 1.7%
Inter-Tel 3,000 $ 56,344 0.3%
Lucent Technologies 5,166 $366,463 2.2%
McCleod USA 2,000 $ 83,000 0.5%
Mindspring 3,000 $159,094 0.9%
Pairgain Technologies 4,000 $ 62,500 0.4%
QWEST Communications 2,000 $ 66,125 0.4%
Sprint 8,000 $575,000 3.4%
WorldCom, Inc. 10,250 $466,375 2.7%
TRANSPORTATION & TRUCKING 0.8%
- ------------------------- ----
Sysco Corp. 3,000 $ 69,938 0.4%
U.S. Food Services 2,000 $ 66,250 0.4%
OTHER ASSETS 1.1%
- ------------ ----
Receivables Minus Payables $108,442 1.1%
MONEY MARKET FUNDS 13.7%
- ------------------ -----
Federated U.S. Treasury Fund 859,399 $859,399 5.1%
Provident Insured Money Fund 610,078 $610,078 3.6%
Riverfront U.S. Govt
Securities Fund 859,399 $859,399 5.1%
________________________________________________________________________________________________
________________________________________________________________________________________________
TOTAL ASSETS: 2,671,860 $16,965,226 100.0%
</TABLE>
