<PAGE> 1
FAIRPORT FUNDS
Charting A Course You Can Trust(SM)
ANNUAL REPORT TO
SHAREHOLDERS
* Fairport Midwest Growth Fund
* Fairport Growth and Income Fund
* Fairport Government Securities Fund
October 31, 1997
Advised by
ROULSTON & COMPANY, INC.
<PAGE> 2
FAIRPORT FUNDS ANNUAL REPORT TO SHAREHOLDERS
November 27, 1997
Dear Shareholder:
We are pleased to issue our financial report on the Fairport Funds for the year
ended October 31, 1997.
The Fairport Midwest Growth Fund gained 31.00% during the period, while the
Fairport Growth and Income Fund gained 36.61%. These returns were earned in a
period when the market, as measured by the Standard & Poor's 500 Stock Index,
gained 32.10%. The Fairport Government Securities Fund increased 6.76% over the
same period.
The economy remained in cruise control during the year at a pace slow enough to
keep inflation at bay while permitting individual real incomes and corporate
profits to grow nicely. Productivity remained a positive factor, more than
offsetting an increase in the rate of gain for incomes. Continued moderate
government spending and a surge in tax receipts from growing personal and
corporate incomes reduced the federal budget deficit to $22 billion, well below
expectations one year ago for a $100 billion deficit.
As our fiscal year came to a close, turmoil in Asian currency and equity markets
raised concerns in our own market. While many crosscurrents preclude an easy
conclusion, the U.S. economic outlook remains buoyant. The potential problems
associated with a marginal reduction in real growth are more than offset by the
prospect of a much lower inflation rate. Thus, the favorable setting remains in
effect for both our equity and bond markets.
Our commentary fully reflects our long-held philosophy that solid and
unrelenting research must form the cornerstone of our investment process. Our
research efforts for the Fairport Funds continue to give us confidence in the
future of the economy and the portfolios we manage on your behalf.
/s/Scott D. Roulston /s/Joseph A. Harrison
Scott D. Roulston Joseph A. Harrison
President Director of Investments
<PAGE> 3
FAIRPORT FUNDS INVESTMENT ADVISER'S REPORT
FAIRPORT MIDWEST GROWTH FUND
The graph below compares the increase in value of a $10,000 investment in
Fairport Midwest Growth Fund with the performance of the Standard & Poor's 500
Stock and Lipper Growth Fund indices.
FAIRPORT MIDWEST GROWTH FUND: GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
[CHART]
AVERAGE ANNUAL TOTAL RETURN*
<TABLE>
<S> <C>
1 Year ........................31.00%
Since Inception................20.11%
</TABLE>
* For period ending 10/31/97
Fund Inception: 7/1/93
<TABLE>
<CAPTION>
Fairport Midwest Lipper Growth Standard & Poor's
Growth Fund Fund Index 500 Stock Index
<S> <C> <C> <C>
7/1/93 $10,000 $10,000 $10,000
7/93 10,200 9,988 9,970
10/93 11,090 10,653 10,480
1/94 11,730 11,088 10,497
4/94 11,847 10,479 10,100
7/94 11,796 10,457 10,482
10/94 12,298 10,871 10,880
1/95 12,222 10,587 10,914
4/95 13,327 11,631 12,019
7/95 14,950 13,127 13,207
10/95 14,532 13,478 13,750
1/96 14,514 14,271 15,127
4/96 16,584 14,989 15,641
7/96 15,785 14,292 15,385
10/96 16,897 16,255 17,047
1/97 18,638 17,301 19,107
4/97 18,404 17,103 19,563
7/97 22,065 20,542 23,395
10/97 22,135 20,121 22,528
</TABLE>
Past performance is not a guarantee of future results.
Fairport Midwest Growth Fund was established to achieve capital appreciation
through the investment in equity securities of companies that are headquartered
in the eight-state area contiguous to the Great Lakes.
While the Fund's objective is capital appreciation, investments are not limited
to growth stocks. We seek opportunities in a broad spectrum of investments from
traditional growth companies to highly cyclical companies.
Investment decisions are driven by intense and continuous fundamental research.
This research focus attempts to uncover a combination of internal and external
change at a company that presents an unusual appreciation potential.
Internal changes that would be significant include a change in management, a
change in the business focus, an important new product or service, or the
adoption of new operating methods or systems. The type of external changes we
watch for might include a new CEO or other important manager brought in from
outside the company, a significant change in the competitive environment, or the
development of a new technology that could impact the industry.
One of the best examples this year has been Bob Evans Farms. We recognized early
on the positive potential of management's strategic decision to divest a Mexican
restaurant chain it had started and refocus on the core restaurant business. In
addition, we felt the company would benefit from an external development -- our
projection of a decline in hog prices.
Another good example is Stericycle. Our search for important new products and
technology led us to this company. Stericycle is growing rapidly as a result of
its proprietary method of treating medical waste.
Continued steady domestic economic growth, signs of some recovery in Europe and
serious near-term questions about some Asian economies provide a mix of
opportunity and challenge for Midwest companies in the year ahead. Our
research-driven stock selection process will continue to focus on each
management's ability to deal with these diverse trends. Through this disciplined
approach we are still able to identify attractive investments in the Midwest.
1
<PAGE> 4
FAIRPORT FUNDS
FAIRPORT GROWTH AND INCOME FUND
The graph below compares the increase in value of a $10,000 investment in
Fairport Growth and Income Fund with the performance of the Standard & Poor's
500 Stock and Lipper Growth & Income Fund indices.
FAIRPORT GROWTH AND INCOME FUND: GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
[CHART]
AVERAGE ANNUAL TOTAL RETURN*
<TABLE>
<S> <C>
1 Year ........................36.61%
Since Inception................18.08%
</TABLE>
* For period ending 10/31/97
Fund Inception: 7/1/93
<TABLE>
<CAPTION>
Fairport Growth and Lipper Growth Standard & Poor's
Income Fund and Income Fund Index and Stock Index
<S> <C> <C> <C>
7/93 10,030 10,054 9,970
10/93 10,398 10,606 10,480
1/94 10,894 11,051 10,862
4/94 10,682 10,478 10,241
7/94 10,900 10,677 10,482
10/94 10,889 10,941 10,880
1/95 10,940 10,778 10,914
4/95 11,746 11,759 12,019
7/95 12,541 12,799 13,207
10/95 12,780 13,125 13,750
1/96 14,075 14,314 15,127
4/96 14,149 14,980 15,641
7/96 13,749 14,540 15,305
10/96 15,051 17,004 17,054
1/97 16,558 17,590 19,107
4/97 17,167 17,753 19,563
7/97 20,353 20,924 23,395
10/97 20,560 20,414 22,528
</TABLE>
Past performance is not a guarantee of future results.
Fairport Growth and Income Fund was established to achieve capital appreciation
and current income primarily through investment in common stocks or securities
convertible into common stocks.
The investment policy is to invest in a diversified portfolio of dividend-paying
common stocks which have been researched by our own staff and offer reasonable
valuation based on price to earnings, book value and cash flows.
Our investment strategy is to seek out companies that meet the demanding
fundamental analysis of our research staff. Visits with management, suppliers,
customers, distributors and unions are among the sources utilized by our
analysts to form judgments about the outlook for each company. The results of
this analysis are joined with rigorous valuation for each investment in the
portfolio.
Two firms that offer good examples of our investment approach are First Empire
State Corporation and Lowe's Companies. Focused on the adjacent markets of
Buffalo and Rochester, First Empire State has consistently gained market share
from larger, less well-focused competitors. At present, the bank holds the
leading market position in its service area and has enjoyed very positive
revenue growth. A strong ownership position by management, well over 30%, has
ensured that this strong revenue pattern has been brought down to the bottom
line, permitting earnings to grow at a 16% rate over the past five years.
In the past year, Lowe's Companies underperformed the market as investors became
caught up with Lowe's major competitor, Home Depot. Yet earnings continued to
grow at a 25% pace, and this summer the stock was available at its most
attractive valuation in several years. Our research efforts with management and
competitors, combined with store visits and an analysis of markets served, all
confirmed our conclusion that this company's growth prospects were every bit as
strong as its historical record.
Currently, the fund is diversified among 34 investments representing most
sectors of our economy. Our broad-based research effort is focused on companies
that are taking requisite action to improve profitability. Conversations with a
broad cross-section of managements indicate a favorable outlook for continued
moderate economic growth with low inflation. We will continue to seek out those
companies that present a favorable earnings outlook at prices that offer good
value.
2
<PAGE> 5
INVESTMENT ADVISER'S REPORT
FAIRPORT GOVERNMENT SECURITIES FUND
The graph below compares the increase in value of a $10,000 investment in
Fairport Government Securities Fund with the performance of the Lehman Brothers
Intermediate Treasury Bond and the Merrill Lynch Intermediate Treasury Bond
indices.
FAIRPORT GOVERNMENT SECURITIES FUND: GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
[CHART]
AVERAGE ANNUAL TOTAL RETURN*
<TABLE>
<S> <C>
1 Year ........................ 6.76%
Since Inception................ 4.78%
</TABLE>
* For period ending 10/31/97
Fund Inception: 7/1/93
<TABLE>
<CAPTION>
Merrill Lynch
Lehman Brothers Intermediate
Fairport Government Intermediate Treasury Bond
Securities Fund Treasury Bond Index Index
<S> <C> <C> <C>
7/1/93 $10,000 $10,000 $10,000
7/93 10,000 10,019
10/93 10,304 10,236
1/94 10,346 10,328
4/94 9,649 9,972
7/94 9,748 10,118
10/94 9,558 10,067
1/95 9,733 10,215
4/95 10,170 10,588
7/95 10,628 10,963
10/95 10,968 11,249
1/96 11,350 11,599 11,618
4/96 10,989 11,386 11,396
7/96 11,093 11,527 11,537
10/96 11,471 11,882 11,886
1/97 11,545 12,004 12,012
4/97 11,569 12,085 12,098
7/97 12,046 12,510 12,527
10/97 12,246 12,738 12,757
</TABLE>
Past performance is not a guarantee of future results.
*The Fund has selected the Merrill Lynch Intermediate Treasury Bond Index to
replace the Lehman Brothers Intermediate Treasury Bond Index as the Fund's
proper benchmark because the Merrill Lynch Intermediate Treasury Bond Index is
considered a widely used and appropriate index and information about such index
is more readily available to the Fund.
In order to meet its objective of current income with preservation of capital,
Fairport Government Securities Fund seeks to minimize credit risk by investment
in securities issued directly by the U.S. Government. Because changes in
interest rates affect the value of the Fund's holdings, investment in issues
maturing in less than ten years are the primary focus of the portfolio.
Following yet another scare that the economy was growing too fast and
inflationary pressures would soon mount, interest rates rose sharply in the
first half of our fiscal year. Despite somewhat stronger growth than had been
anticipated, inflation not only remained under control, but actually declined
once again. With lower inflation and a surprisingly favorable improvement in the
federal budget, bond prices rallied and interest rates declined sharply. With
the inflation outlook likely to be favorably influenced by the turmoil in Asian
currencies, the bond market outlook remains positive for the new fiscal year.
3
<PAGE> 6
FAIRPORT FUNDS
<TABLE>
<CAPTION>
FAIRPORT MIDWEST GROWTH FUND October 31, 1997
=======================================================================================================
Shares Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 98.05%
CAPITAL GOODS-20.50%
Applied Industrial Technologies, Inc. ...................... 118,125 $ 3,433,008
Applied Power, Inc., Class A ............................... 28,000 1,732,500
GATX Corp. ................................................. 41,000 2,647,062
Harnischfeger Industries, Inc. ............................. 50,000 1,968,750
Kennametal, Inc. ........................................... 50,000 2,425,000
Park-Ohio Industries, Inc.* ................................ 115,509 1,891,460
Perceptron, Inc.* .......................................... 70,000 1,688,750
----------
15,786,530
- -------------------------------------------------------------------------------------------------------
COMMUNICATION EQUIPMENT-2.70%
Allen Telecom, Inc.* ....................................... 110,000 2,083,125
- -------------------------------------------------------------------------------------------------------
CONSUMER DURABLES-6.19%
OfficeMax, Inc.* ........................................... 180,000 2,407,500
Royal Appliance Manufacturing Co.* ......................... 300,000 2,362,500
----------
4,770,000
- -------------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES-25.37%
Bob Evans Farms, Inc. ...................................... 150,000 2,840,625
Consolidated Stores Corp.* ................................. 85,468 3,408,036
Deluxe Corp. ............................................... 70,000 2,292,500
Federated Department Stores, Inc.* ......................... 70,000 3,080,000
Rite Aid Corp. ............................................. 72,000 4,275,000
Worthington Foods, Inc. .................................... 160,000 3,640,000
----------
19,536,161
- -------------------------------------------------------------------------------------------------------
FINANCE-21.46%
First Empire State Corp. ................................... 8,000 3,272,000
Household International, Inc. .............................. 24,000 2,718,000
Norwest Corp. .............................................. 120,000 3,847,500
Star Banc Corp. ............................................ 68,000 3,336,250
U.S. Bancorp ............................................... 33,000 3,355,688
----------
16,529,438
- -------------------------------------------------------------------------------------------------------
HEALTH CARE-6.69%
NCSHealthcare, Inc., Class A* .............................. 92,000 2,150,500
Patterson Dental Co.* ...................................... 75,000 3,000,000
----------
5,150,500
- -------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
Shares Value
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (CONT.)
MATERIALS/SERVICES-11.65%
Armco, Inc.* ............................................... 500,000 $ 2,875,000
Flowserve Corp. ............................................ 55,800 1,660,050
Reynolds & Reynolds Co., Class A ........................... 91,000 1,558,375
A. Schulman, Inc. .......................................... 76,000 1,710,000
Stericycle, Inc.* .......................................... 125,000 1,171,875
----------
8,975,300
- -------------------------------------------------------------------------------------------------------
RETAIL-0.28%
Marks Bros. Jewelers, Inc.* ................................ 13,200 214,500
- -------------------------------------------------------------------------------------------------------
TECHNOLOGY-3.21%
Methode Electronics, Inc., Class A ......................... 125,000 2,468,750
- -------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS-(COST $51,770,001) ..................... 75,514,304
- -------------------------------------------------------------------------------------------------------
Principal
Amount
- -------------------------------------------------------------------------------------------------------
Repurchase Agreement -- 2.10%
UMB Bank, U.S. Treasury Note, $1,639,000 par,
5.875% coupon, due 03/31/99, dated 10/31/97,
to be sold on 11/03/97 at $1,619,718 (Cost $1,619,000) $ 1,619,000 1,619,000
- -------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-100.15% (COST $53,389,001**) 77,133,304
----------
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS-(0.15%) (115,898)
----------
NET ASSETS-100.00% $ 77,017,406
==========
=======================================================================================================
<FN>
* Non-income producing security.
**Also represents cost for Federal income tax purposes.
See accompanying notes to financial statements.
</TABLE>
5
<PAGE> 8
FAIRPORT FUNDS
<TABLE>
<CAPTION>
FAIRPORT GROWTH AND INCOME FUND October 31, 1997
====================================================================================================================
Shares Value
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 96.89%
CAPITAL GOODS-18.95%
Baldor Electric Co. .................................................................. 30,000 $ 877,500
Emerson Electric Co. ................................................................. 14,000 734,125
GATX Corp. ........................................................................... 14,000 903,875
General Electric Co. ................................................................. 10,000 645,625
Harnischfeger Industries, Inc. ....................................................... 17,000 669,375
Kennametal, Inc. ..................................................................... 20,000 970,000
Teleflex, Inc. ....................................................................... 28,000 1,043,000
---------
5,843,500
- --------------------------------------------------------------------------------------------------------------------
CONSUMER DURABLES-11.26%
Harman International Industries, Inc. ................................................ 14,000 756,000
Leggett & Platt, Inc. ................................................................ 20,000 835,000
Lowe's Cos., Inc. .................................................................... 26,000 1,082,250
TRW, Inc. ............................................................................ 14,000 801,500
---------
3,474,750
- --------------------------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES-22.97%
Bob Evans Farms, Inc. ................................................................ 40,000 757,500
Carnival Corp., Class A .............................................................. 20,000 970,000
Claire's Stores, Inc. ................................................................ 44,000 973,500
Deluxe Corp. ......................................................................... 20,000 655,000
Richfood Holdings, Inc. .............................................................. 40,000 965,000
Rite Aid Corp. ....................................................................... 20,000 1,187,500
Sara Lee Corp. ....................................................................... 18,000 920,250
Viad Corp. ........................................................................... 36,000 657,000
---------
7,085,750
- --------------------------------------------------------------------------------------------------------------------
FINANCE-16.80%
American International Group, Inc. ................................................... 9,000 918,562
First Empire State Corp. ............................................................. 3,000 1,227,000
Household International, Inc. ........................................................ 9,000 1,019,250
Norwest Corp. ........................................................................ 28,000 897,750
U.S. Bancorp ......................................................................... 11,000 1,118,562
---------
5,181,124
- --------------------------------------------------------------------------------------------------------------------
HEALTH CARE-1.50%
Baxter International, Inc. ........................................................... 10,000 462,500
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
Shares Value
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (CONT.)
MATERIALS/SERVICES-10.02%
Cabot Corp. .......................................................................... 30,000 $ 736,875
Ferro Corp. .......................................................................... 20,000 748,750
Raychem Corp. ........................................................................ 12,000 1,086,750
A. Schulman, Inc. .................................................................... 23,000 517,500
---------
3,089,875
- --------------------------------------------------------------------------------------------------------------------
TECHNOLOGY-15.39%
Avnet, Inc. .......................................................................... 13,000 818,188
AVX Corp. ............................................................................ 31,000 875,750
Dallas Semiconductor Corp. ........................................................... 26,000 1,270,750
Harris Corp. ......................................................................... 20,000 872,500
Methode Electronics, Inc., Class A ................................................... 46,000 908,500
---------
4,745,688
- --------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS-(COST $19,878,083) ................................................ 29,883,187
- --------------------------------------------------------------------------------------------------------------------
Principal
Amount
- --------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 3.67%
UMB Bank, U.S. Treasury Note, $1,145,000 par, 5.875% coupon, due 03/31/99,
dated 10/31/97, to be sold on 11/03/97 at $1,131,501 (Cost $1,131,000) .......... $ 1,131,000 1,131,000
- --------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-100.56% (COST $21,009,083**) ....................................... 31,014,187
------------
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS-(0.56%) ............................... (173,341)
------------
NET ASSETS-100.00% ................................................................... $ 30,840,846
============
====================================================================================================================
<FN>
**Also represents cost for Federal income tax purposes.
See accompanying notes to financial statements.
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
FAIRPORT FUNDS SCHEDULE OF INVESTMENTS
FAIRPORT GOVERNMENT SECURITIES FUND October 31, 1997
====================================================================================================
Principal
Amount Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. TREASURY NOTES -- 96.89%
U.S. TREASURY NOTES
5.500%, 04/15/00 ........................................... $ 800,000 $ 796,536
5.625%, 02/28/01 ........................................... 900,000 896,553
6.625%, 03/31/02 ........................................... 500,000 515,700
6.250%, 02/15/03 ........................................... 600,000 611,688
5.875%, 02/15/04 ........................................... 1,450,000 1,453,074
- ----------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-96.89% (COST $4,212,789**) ............... 4,273,551
----------
CASH AND OTHER ASSETS NET OF LIABILITIES-3.11% ............. 137,253
----------
NET ASSETS-100.00% ......................................... $4,410,804
==========
====================================================================================================
<FN>
**Also represents cost for Federal income tax purposes.
See accompanying notes to financial statements.
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
FAIRPORT FUNDS STATEMENT OF ASSETS AND LIABILITIES
October 31, 1997
==================================================================================================================
FAIRPORT MIDWEST FAIRPORT GROWTH FAIRPORT GOVERNMENT
GROWTH FUND AND INCOME FUND SECURITIES FUND
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in securities at value (cost $53,389,001,
$21,009,083 and $4,212,789, respectively) ........ $ 77,133,304 $ 31,014,187 $ 4,273,551
Cash ................................................ 138 549 107,647
Receivable for capital stock sold ................... 3,233 75 0
Dividends and interest receivable ................... 8,221 4,635 39,835
Deferred organizational costs (Note A) .............. 7,762 7,762 7,762
Other assets ........................................ 1,417 553 91
------------ ------------ ------------
Total assets ................................. 77,154,075 31,027,761 4,428,886
------------ ------------ ------------
LIABILITIES
Payable for capital stock redeemed .................. 10,654 29,169 846
Payable for securities purchased .................... 0 95,300 0
Accrued expenses .................................... 87,802 48,156 22,658
Due to/(from) Advisor, net .......................... 38,213 14,290 (5,738)
Distributions payable ............................... 0 0 316
------------ ------------ ------------
Total liabilities ............................. 136,669 186,915 18,082
------------ ------------ ------------
NET ASSETS
Applicable to 4,078,689, 1,725,373
and 445,505 shares outstanding, respectively ..... $ 77,017,406 $ 30,840,846 $ 4,410,804
============ ============ ============
NET ASSETS CONSIST OF
Capital paid-in ..................................... $ 48,787,168 $ 17,577,866 $ 4,454,344
Distributions in excess of net investment income .... (91,388) (27,435) 0
Accumulated net realized gain (loss) on investments . 4,577,323 3,285,311 (104,302)
Net unrealized appreciation on investments .......... 23,744,303 10,005,104 60,762
------------ ------------ ------------
$ 77,017,406 $ 30,840,846 $ 4,410,804
============ ============ ============
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE ....................... $ 18.88 $ 17.87 $ 9.90
============ ============ ============
==================================================================================================================
</TABLE>
See accompanying notes to financial statements.>
9
<PAGE> 12
<TABLE>
<CAPTION>
FAIRPORT FUNDS STATEMENTS OF OPERATIONS
Year Ended October 31, 1997
==============================================================================================
FAIRPORT MIDWEST FAIRPORT GROWTH FAIRPORT GOVERNMENT
GROWTH FUND AND INCOME FUND SECURITIES FUND
- ----------------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C> <C>
Dividends .................................. $ 748,563 $ 459,443 $ 0
Interest ................................... 160,281 29,345 277,715
------------ ------------ ------------
Total investment income .............. 908,844 488,788 277,715
------------ ------------ ------------
EXPENSES
Investment advisory fees (Note B) .......... 513,898 204,420 11,697
Distribution expenses (Note B) ............. 169,263 67,196 11,561
Administration fees ........................ 85,926 34,406 6,056
Transfer agent fees ........................ 61,823 41,800 26,945
Legal fees ................................. 40,000 20,652 6,501
Pricing fees ............................... 42,495 27,573 25,315
Registration expenses ...................... 39,500 26,298 18,801
Custodian fees ............................. 22,635 13,152 7,789
Printing fees .............................. 29,129 11,615 2,291
Auditing fees .............................. 22,663 9,099 2,237
Insurance fees ............................. 22,986 9,303 2,042
Trustees fees .............................. 18,467 7,365 1,580
Amortization of organization costs (Note A) 3,106 3,106 3,106
Miscellaneous expenses ..................... 9,863 4,867 701
------------ ------------ ------------
Total expenses ....................... 1,081,754 480,852 126,622
Expenses reimbursed (Note B) ............... (136,636) (72,293) (84,546)
------------ ------------ ------------
Net expenses ......................... 945,118 408,559 42,076
------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) ............... (36,274) 80,229 235,639
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments ........... 4,609,662 3,283,752 4,611
Net change in unrealized
appreciation on investments ............. 13,604,001 4,939,032 60,694
------------ ------------ ------------
Net realized and unrealized
gain on investments ..................... 18,213,663 8,222,784 65,305
------------ ------------ ------------
INCREASE IN NET ASSETS FROM OPERATIONS ..... $ 18,177,389 $ 8,303,013 $ 300,944
============ ============ ============
==============================================================================================
</TABLE>
See accompanying notes to financial statements.
10
<PAGE> 13
<TABLE>
<CAPTION>
FAIRPORT FUNDS STATEMENTS OF CHANGES IN NET ASSETS
====================================================================================================================================
FAIRPORT MIDWEST FAIRPORT GROWTH FAIRPORT GOVERNMENT
GROWTH FUND AND INCOME FUND SECURITIES FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
10/31/97 10/31/96 10/31/97 10/31/96 10/31/97 10/31/96
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income (loss) .............. $ (36,274) $ 82,618 $ 80,229 $ 224,711 $ 235,639 $ 367,629
Net realized gain (loss) on investments ... 4,609,662 4,515,778 3,283,752 1,856,970 4,611 (97,666)
Net change in unrealized appreciation
(depreciation) on investments .......... 13,604,001 3,805,220 4,939,032 1,863,728 60,694 (3,304)
------------ ------------ ------------ ------------ ------------ ------------
Increase in net assets .................... 18,177,389 8,403,616 8,303,013 3,945,409 300,944 266,659
------------ ------------ ------------ ------------ ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ................ (44,687) (91,013) (143,381) (254,673) (235,639) (405,004)
From net realized gains ................... (4,293,833) (774,801) (1,856,932) (178,762) 0 0
------------ ------------ ------------ ------------ ------------ ------------
Total distributions ....................... (4,338,520) (865,814) (2,000,313) (433,435) (235,639) (405,004)
------------ ------------ ------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold ................. 10,636,821 11,742,064 4,238,113 4,811,561 1,409,959 1,737,076
Reinvestment of dividends ................. 4,310,469 857,142 1,970,599 383,496 231,250 309,367
Amount paid for repurchase of shares ...... (8,966,670) (12,346,785) (4,741,419) (8,718,184) (3,048,010) (4,802,614)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) from capital
transactions ........................... 5,980,620 252,421 1,467,293 (3,523,127) (1,406,801) (2,756,171)
------------ ------------ ------------ ------------ ------------ ------------
Total increase (decrease) in net assets ... 19,819,489 7,790,223 7,769,993 (11,153) (1,341,496) (2,894,516)
NET ASSETS
Beginning of year ......................... 57,197,917 49,407,694 23,070,853 23,082,006 5,752,300 8,646,816
------------ ------------ ------------ ------------ ------------ ------------
End of year ............................... $ 77,017,406 $ 57,197,917 $ 30,840,846 $ 23,070,853 $ 4,410,804 $ 5,752,300
============ ============ ============ ============ ============ ============
Accumulated undistributed (distributions
in excess of) net investment income
included in net assets at end of year .. $ (91,388) $ (10,427) $ (27,435) $ 35,717 $ 0 $ 0
------------ ------------ ------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS
Shares sold ............................... 639,390 815,058 263,198 361,212 144,935 177,063
Shares issued on reinvestment
of dividends ........................... 279,447 62,134 138,855 28,972 23,788 31,864
Shares repurchased ........................ (529,296) (835,517) (298,742) (646,096) (313,081) (498,079)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) from capital
transactions ........................... 389,541 41,675 103,311 (255,912) (144,358) (289,152)
============ ============ ============ ============ ============ ============
===================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 14
FAIRPORT FUNDS
The tables below set forth financial data for a share of beneficial interest
outstanding throughout each period presented.
<TABLE>
<CAPTION>
FAIRPORT MIDWEST GROWTH FUND
- ---------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Period
Ended Ended Ended Ended Ended
10/31/97 10/31/96 10/31/95 10/31/94 10/31/93(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ................. $ 15.50 $ 13.55 $ 12.27 $ 11.07 $ 10.00
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ......................... (0.01) 0.02 0.04 0.02 0.01
Net realized and unrealized gain (loss) on investments 4.55 2.16 2.04 1.19 1.07
--------- --------- --------- --------- ---------
Total from investment operations ............... 4.54 2.18 2.08 1.21 1.08
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
From net investment income ........................... (0.01) (0.03) (0.04) (0.01) (0.01)
From realized capital gains .......................... (1.15) (0.20) (0.76) 0.00 0.00
--------- --------- --------- --------- ---------
Total distributions ............................ (1.16) (0.23) (0.80) (0.01) (0.01)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD ....................... $ 18.88 $ 15.50 $ 13.55 $ 12.27 $ 11.07
========= ========= ========= ========= =========
TOTAL RETURN ......................................... 31.00% 16.28% 18.17% 10.89% 10.90%**
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) ...................... $ 77,017 $ 57,198 $ 49,408 $ 29,688 $ 9,870
Ratio of expenses to average net assets
before reimbursement of expenses by Adviser ....... 1.58% 1.69% 1.57% 1.54% 2.89%*
after reimbursement of expenses by Adviser ........ 1.38% 1.38% 1.41% 1.45% 1.50%*
Ratio of net investment income to average net assets
before reimbursement of expenses by Adviser ....... (0.25%) (0.16%) 0.14% 0.08% (1.11%)*
after reimbursement of expenses by Adviser ........ (0.05%) 0.15% 0.29% 0.17% 0.28%*
Portfolio turnover ................................... 41.16% 58.01% 46.51% 77.57% 0.00%
Average commission rate paid ......................... $ 0.0499 $ 0.0600 N/A N/A N/A
=================================================================================================================================
</TABLE>
[FN]
* Annualized
**Not annualized
N/A Not applicable; disclosure not required
(1) The Fairport Midwest Growth Fund, Fairport Growth and Income Fund and
Fairport Government Securities Fund commenced operations on July 1, 1993.
See accompanying notes to financial statements.
12
<PAGE> 15
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
FAIRPORT GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Period
Ended Ended Ended Ended Ended
10/31/97 10/31/96 10/31/95 10/31/94 10/31/93(1)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ................. $ 14.22 $ 12.29 $ 10.68 $ 10.36 $ 10.00
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ......................... 0.05 0.13 0.15 0.14 0.04
Net realized and unrealized gain (loss) on investments 4.83 2.04 1.68 0.35 0.36
--------- --------- --------- --------- ---------
Total from investment operations ............... 4.88 2.17 1.83 0.49 0.40
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
From net investment income ........................... (0.09) (0.14) (0.12) (0.14) (0.04)
From realized capital gains .......................... (1.14) (0.10) (0.10) (0.03) 0.00
--------- --------- --------- --------- ---------
Total distributions ............................ (1.23) (0.24) (0.22) (0.17) (0.04)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD ....................... $ 17.87 $ 14.22 $ 12.29 $ 10.68 $ 10.36
========= ========= ========= ========= =========
TOTAL RETURN ......................................... 36.61% 17.77% 17.36% 4.72% 3.98%**
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) ...................... $ 30,841 $ 23,071 $ 23,082 $ 18,177 $ 8,716
Ratio of expenses to average net assets
before reimbursement of expenses by Adviser ....... 1.76% 1.83% 1.79% 1.72% 2.79%*
after reimbursement of expenses by Adviser ........ 1.50% 1.50% 1.50% 1.50% 1.50%*
Ratio of net investment income to average net assets
before reimbursement of expenses by Adviser ....... 0.03% 0.58% 0.98% 1.20% 0.10%*
after reimbursement of expenses by Adviser ........ 0.29% 0.91% 1.26% 1.42% 1.39%*
Portfolio turnover ................................... 42.45% 34.02% 13.36% 35.16% 4.18%
Average commission rate paid ......................... $ 0.0599 $ 0.0591 N/A N/A N/A
=================================================================================================================================
FAIRPORT GOVERNMENT SECURITIES FUND
- -----------------------------------------------------------------------------------------------------------------------------------
Year Year Year Year Period
Ended Ended Ended Ended Ended
10/31/97 10/31/96 10/31/95 10/31/94 10/31/93(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ................. $ 9.75 $ 9.84 $ 9.03 $ 10.20 $ 10.00
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) ......................... 0.49 0.49 0.49 0.43 0.15
Net realized and unrealized gain (loss) on investments 0.15 (0.05) 0.81 (1.17) 0.16
--------- --------- --------- --------- ---------
Total from investment operations ............... 0.64 0.44 1.30 (0.74) 0.31
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
From net investment income ........................... (0.49) (0.53) (0.49) (0.42) (0.11)
From realized capital gains .......................... 0.00 0.00 0.00 (0.01) 0.00
--------- --------- --------- --------- ---------
Total distributions ............................ (0.49) (0.53) (0.49) (0.43) (0.11)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD ....................... $ 9.90 $ 9.75 $ 9.84 $ 9.03 $ 10.20
========= ========= ========= ========= =========
TOTAL RETURN ......................................... 6.76% 4.58% 14.76% (7.24%) 3.04%**
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000) ...................... $ 4,411 $ 5,752 $ 8,647 $ 7,614 $ 5,829
Ratio of expenses to average net assets
before reimbursement of expenses by Adviser ....... 2.70% 2.05% 2.16% 1.80% 2.78%*
after reimbursement of expenses by Adviser ........ 0.90% 0.90% 0.90% 0.90% 0.90%*
Ratio of net investment income to average net assets
before reimbursement of expenses by Adviser ....... 3.23% 3.78% 3.89% 3.88% 2.29%*
after reimbursement of expenses by Adviser ........ 5.03% 4.93% 5.16% 4.78% 4.17%*
Portfolio turnover ................................... 21.01% 21.23% 1.28% 24.14% 24.53%
Average commission rate paid ......................... N/A N/A N/A N/A N/A
====================================================================================================================================
</TABLE>
13
<PAGE> 16
Fairport Funds
October 31, 1997
NOTE (A) SIGNIFICANT ACCOUNTING POLICIES:
Fairport Funds (the "Trust"), formerly known as Roulston Family of Funds, is an
open-end management investment company and is organized under Ohio law as a
business trust under a Declaration of Trust dated September 16, 1994. On March
1, 1996, the Trust changed its name from The Roulston Family of Funds to
Fairport Funds. The Trust currently consists of three Funds (the "Funds"):
Fairport Midwest Growth Fund (the "Midwest Growth Fund"), Fairport Growth and
Income Fund (the "Growth and Income Fund") and Fairport Government Securities
Fund (the "Government Fund"). The Trust is registered under the Investment
Company Act of 1940, as amended (the "Act"). On April 29, 1995, pursuant to an
Agreement and Plan of Reorganization and Liquidation, the Midwest Growth Fund,
the Growth and Income Fund and the Government Fund of the Trust acquired in a
tax free reorganization, all of the assets of each of the Roulston Midwest
Growth Fund, the Roulston Growth and Income Fund and the Roulston Government
Securities Fund (collectively, the "Acquired Funds") of the Advisors' Inner
Circle Fund, a Massachusetts business trust, respectively, in exchange for the
assumption of such Acquired Fund's liabilities and a number of full and
fractional shares of the corresponding Fund of the Trust having an aggregate net
asset value equal to such Acquired Fund's net assets (the "Reorganization"). The
Reorganization was approved by the shareholders of the Acquired Funds on March
24, 1995. For accounting purposes, the Reorganization was accounted for in a
manner similar to a pooling of interest and the financial highlights have been
presented since the Funds' inception, July 1, 1993.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
The following is a summary of significant account-ing policies consistently
followed by the Trust.
(1) SECURITY VALUATION: The portfolio securities of each Fund will be valued at
market value. Each Fund uses one or more pricing services to provide market
quotations for equity, fixed income and variable income securities. If market
quotations are not available, securities will be valued by a method which the
Board of Trustees believes accurately reflects fair value. Equity securities
which are listed or admitted to trading on a national securities exchange or
other market trading system which reports actual transaction prices on a
contemporaneous basis will be valued at the last sales price on the exchange on
which the security is principally traded. For fixed and variable income
securities, the pricing service may use a matrix system of valuation which
considers factors such as securities prices, yield features, call features,
ratings and developments related to a specific security. The Trustees may
deviate from the valuation provided by the pricing service whenever, in their
judgment, such valuation is not indicative of the fair value of the debt
security. Short-term investments with a maturity of 60 days or less are valued
at amortized cost, which approximates market value.
(2) REPURCHASE AGREEMENTS: All Funds may enter into repurchase agreements with
financial institutions deemed to be creditworthy by Roulston & Company, Inc.
("Roulston"), the Funds' investment adviser, under guidelines approved by the
Trust's Board of Trustees, subject to the seller's agreement to repurchase and
the Funds' agreement to resell such securities at a mutually agreed-upon date
and price.
14
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS
Securities purchased subject to repurchase agreements are deposited
with the Funds' custodian and, pursuant to the terms of the repurchase
agreement, must have an aggregate market value greater than or equal to the
repurchase price plus accrued interest at all times. If the seller were to
default on its repurchase obligation or become insolvent, the Fund would suffer
a loss to the extent that the proceeds from a sale of the underlying portfolio
securities were less than the repurchase price under the agreement, or to the
extent that the disposition of such securities by the Fund was delayed pending
court action.
(3) FEDERAL INCOME TAXES: The Funds intend to be treated as "regulated
investment companies" under Sub-chapter M of the Internal Revenue Code and to
distribute substantially all of their net taxable income. Accordingly, no
provisions for Federal income taxes have been made in the accompanying financial
statements.
(4) INVESTMENT INCOME AND SECURITIES TRANSACTIONS: Dividend income is recorded
on the ex-dividend date. Interest income is accrued daily. Security transactions
are accounted for on the date securities are purchased or sold. Security gains
and losses are determined on the identified cost basis.
(5) DIVIDENDS AND DISTRIBUTIONS: Substantially all of the net investment income
(exclusive of capital gains) of the Midwest Growth Fund and the Growth and
Income Fund is distributed in the form of semi-annual dividends. Net investment
income (exclusive of capital gains) of the Government Fund is declared daily and
distributed in the form of monthly dividends. Substantially all of the capital
gains realized will be distributed annually.
(6) DEFERRED ORGANIZATIONAL COSTS: Organizational costs are being amortized on a
straight-line basis over five years commencing April 29, 1995.
NOTE (B) RELATED PARTY TRANSACTIONS:
The Trust and Roulston have entered into an Investment Advisory Agreement (the
"Agreement") dated as of January 20, 1995. Under terms of the Agreement,
Roulston makes the investment decisions for the assets of the Funds and
continuously reviews, supervises, and administers the investment program of the
Funds. For its services as investment adviser, Roulston receives a fee, at an
annual rate of 0.75% of the average daily net assets of each of the Midwest
Growth Fund and the Growth and Income Fund up to $100 million of such assets,
and 0.50% of each such Fund's assets of $100 million or more. With respect to
the Government Fund, Roulston receives a fee at an annual rate of 0.25% of the
average daily net assets of the Government Fund up to $100 million of such
assets, and 0.125% of such assets of $100 million or more. Such fees will be
calculated daily and paid monthly.
Pursuant to Rule 12b-1 under the Act, the Trust has adopted a Distribution
Agreement and Shareholder Service Plan dated January 20, 1995 (the "Plan"),
under which each Fund is authorized to pay or reimburse Roulston Research Corp.
(the "Distributor"), ultimately a wholly-owned subsidiary of Roulston, a
periodic amount calculated at an annual rate not to exceed 0.25% of the average
daily net asset value of such Fund. Such an amount may be used by the
Distributor to pay broker-dealers, banks and other institutions (a
"Participating Organization") for distribution and/or shareholder service
assistance pursuant to an agreement between the Distributor and the
Participating Organization or for distribution assistance and/or shareholder
service provided by the Distributor. Under the Plan, a Participating
Organization may include the Distributor's affiliates.
15
<PAGE> 18
FAIRPORT FUNDS NOTES TO FINANCIAL STATEMENTS CONT.
October 31, 1997
Roulston has agreed with the Trust to waive its investment advisory fee and to
reimburse certain other expenses of the Funds from the effective date of the
Reorganization (April 29, 1995) and such waivers and reimbursements shall
continue at least through April 30, 1998, to the extent necessary to cause total
operating expenses as a percentage of net assets of the Midwest Growth Fund, the
Growth and Income Fund and the Government Fund not to exceed 1.38%, 1.50% and
0.90%, respectively.
Information regarding these transactions is as follows for the year ended
October 31, 1997:
<TABLE>
<CAPTION>
Midwest Growth and
Growth Income Government
Fund Fund Fund
- --------------------------------------------------------------------------------
INVESTMENT ADVISORY FEES:
<S> <C> <C> <C>
Fees before fee waiver ........ $ 513,898 $ 204,420 $ 11,697
Fees waived ................... (136,636) (72,293) (11,697)
RULE 12B-1 FEES:
Fees .......................... 169,263 67,196 11,561
Other expenses
reimbursed .................. 0 0 (72,849)
--------- --------- ---------
Net fees and expenses.......... $ 546,525 $ 199,323 $ (61,288)
- --------------------------------------------------------------------------------
</TABLE>
Certain officers and trustees of the Trust are also officers, directors and/or
employees of Roulston and the Distributor. The officers and such interested
trustees serve without direct compensation from the Trust.
NOTE (C) INVESTMENT TRANSACTIONS:
Purchases and sales of investment securities (excluding short-term securities)
for the year ended October 31, 1997 were:
<TABLE>
<CAPTION>
PROCEEDS
PURCHASES FROM SALES
(000) (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
Midwest Growth Fund ...... $ 31,034 $ 26,974
Growth and Income Fund.... 11,825 11,236
Government Fund........... 948 2,307
- --------------------------------------------------------------------------------
</TABLE>
NOTE (D) UNREALIZED APPRECIATION AND DEPRECIATION:
At October 31, 1997, the gross unrealized appreciation and depreciation of
securities for book and Federal income tax purposes consisted of the following:
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
APPRECIATION (DEPRECIATION) (DEPRECIATION)
(000) (000) (000)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Midwest Growth Fund .. $24,907 $(1,163) $23,744
Growth and Income Fund 10,041 (36) 10,005
Government Fund ...... 74 (13) 61
- --------------------------------------------------------------------------------
</TABLE>
16
<PAGE> 19
FAIRPORT FUNDS REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Trustees of
Fairport Midwest Growth Fund,
Fairport Growth and Income Fund
and Fairport Government Securities Fund
of Fairport Funds:
We have audited the accompanying statement of assets and liabilities of Fairport
Midwest Growth Fund, Fairport Growth and Income Fund and Fairport Government
Securities Fund (the three funds constituting the Fairport Funds), including the
schedule of investments, as of October 31, 1997, and the related statements of
operations for the year then ended, changes in net assets for each of the two
years in the period then ended and financial highlights for each of the three
years in the period then ended. These financial statements and financial
highlights are the responsibility of Fairport Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for the
period from July 1, 1993 (commencement of operations) to October 31, 1993 and
for the year ended October 31, 1994 were audited by other auditors whose report
dated December 14, 1994 expressed an unqualified opinion on the financial
statements (not presented herein) and related financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1997, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the 1997 financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Fairport Midwest Growth Fund, Fairport Growth and Income Fund and Fairport
Government Securities Fund of the Fairport Funds at October 31, 1997, the
results of their operations for the year then ended and the changes in their net
assets for each of the two years in the period then ended and financial
highlights for each of the three years in the period than ended in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
November 28, 1997
Cleveland, Ohio
<PAGE> 20
[FAIRPORT FUNDS LOGO]
4000 Chester Avenue
Cleveland, Ohio 44103
1-800-332-6459
Directors:
Thomas V. Chema
David B. Gale
David H. Gunning
Scott D. Roulston
Ivan Winfield
Officers:
Scott D. Roulston, President
Kevin M. Crotty, Treasurer
Charles A. Kiraly, Secretary
Adviser:
Roulston & Company, Inc.
4000 Chester Avenue
Cleveland, Ohio 44103
Distributor:
Roulston Research Corp.
4000 Chester Avenue
Cleveland, Ohio 44103
Administrator & Transfer Agent:
FPS Services, Inc.
3200 Horizon Drive
King of Prussia, Pennsylvania 19406
Legal Counsel:
Baker & Hostetler LLP
65 East State Street
Columbus, Ohio 43215
Independent Public Accountants:
Ernst & Young, LLP
1300 Huntington Building
925 Euclid Avenue
Cleveland, Ohio 44115-1405
For information call 1-800-332-6459
Fairport Funds take their name from the historic Fairport Harbor Lighthouse,
located on Lake Erie at the Grand River, just east of the Funds' headquarters in
Cleveland, Ohio. Originally built in 1825, the Fairport Harbor Lighthouse guided
ships safely in and out of the harbor for 100 years. In its early years the
lighthouse was considered the gateway to the Western Reserve and the vast
frontiers of the Northwest Territories and beyond. Later the lighthouse served
as a beacon and supply stop for pioneers and travelers on their way to western
Great Lakes ports and beyond. The original brick structure was rebuilt in 1871
of sandstone blocks, as it remains today.
This report is submitted for the general information of the shareholders of the
Funds. It is not authorized for distribution to prospective investors in a Fund
unless preceded or accompanied by an effective Prospectus which includes details
regarding the Fund's objectives, policies, expenses and other information.
