1838 INVESTMENT ADVISORS FUNDS, N-30D/A, 1998-01-09

1838 INVESTMENT ADVISORS FUNDS
N-30D/A, 1998-01-09

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1838 INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------

December 10, 1997

TO THE SHAREHOLDER:

The net asset value per share of your Fund as of October 31, 1997 was $11.99 per
share. Compared with the net asset value per share of $11.29 as of April 30,
1997, the return on your investment for the most recent half year period was
6.2%. During this period, the benchmark for the Fund, the EAFE index, which
tracks the performance of the equity markets of Europe, Australia and the Far
East, showed a total return of 3.0%. Also, over the last twelve months, the
Fund's return compared favorably with its benchmark at 15.2% versus 4.6%.

In the printed version there appears a line chart with the following
plot points depicted:

8/3/95 10/31/95 4/30/96 10/31/96 4/30/97 10/31/97
------ -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
1838 International Equity Fund 10,000 9,610 10,817 10,490 11,377 12,082
EAFE Index 10,000 9,550 10,820 10,560 10,740 11,046
</TABLE>

* Includes all expenses and/or charges, and thus represents a "net return". The
Fund's returns are higher due to the Investment Advisor's maintenance of
expenses. The 1838 International Equity Fund commenced operations on August
3, 1995.

The overseas equity markets generally performed well from April through
September, with exceptions in the Far East. A correction in August was short and
was followed by a recovery in September. During October, however, currency and
equity market weakness in the Far East affected investor confidence in Europe
and the Americas negatively and the EAFE benchmark lost close to 8% in that one
month.

During the May through October period, your Fund's returns were again boosted
primarily by its stock selection. In our investment process we closely follow
and compare the equity valuations in terms of price earnings that market
participants are applying, to the expected growth in earnings of the companies
involved. Any reduction in earnings growth, or in the visibility of earnings

- --------------
Past performance is not predictive of future results. Investment returns and
principlal values will fluctuate, so that, when redeemed, shares may be worth
less than their original cost.

1838 INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------

growth, reduces the attractiveness of a stock for the portfolio. Our expectation
of a growth correction, as the result of the required political, fiscal,
monetary, regulatory and corporate balance sheet adjustments in the Far East and
Latin America, consequently led us to reduce the Fund's exposure to companies
that are operating in these markets. Currently, we are re-investing most of the
resulting stock sale proceeds in the European markets, where the economic
recovery is well entrenched and growth continues to trend upwards.

The global deregulation of capital, labor and product markets is proceeding
faster than expected and is causing substantial losses in equity markets of
countries that have resisted these changes. In today's corrections, we believe
that growth will resume and investment opportunities for your Fund will be
improved.

Sincerely,

/s/ Hans van den Berg
Vice President and Portfolio Manager

- --------------
12/97. Shares of the 1838 International Equity Fund are distributed by Rodney
Square Distributors, Inc.

Past performance is not predictive of future results. Investment returns and
principal values will fluctuate, so that, when redeemed, shares may be
worth less than their original cost.

1838 INTERNATIONAL EQUITY FUND
SCHEDULE OF NET ASSETS OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
------ --------
<S> <C> <C> <C>
COMMON STOCK -- 96.2%
ARGENTINA -- 0.8%
Banco de Galicia Y Buenos Aires S.A.
DE C.V. Banking........................... 17,000 $ 411,984
--------------

AUSTRALIA -- 1.7%
Broken Hill Propriety Co. Metals - Diversified.............. 36,488 361,979
National Australia Bank, Ltd. Banking........................... 38,888 532,169
--------------
894,148
--------------
BRAZIL -- 0.8%
Centrais Eletricas Brasileiras S.A.
Eletrobras ADR Electric Utilities................ 20,000 421,786
--------------

CANADA -- 1.2%
Canadian Pacific, Ltd. Transportation.................... 20,000 596,250
--------------

FRANCE -- 7.7%
Alcatel Alsthom Telecommunications................ 4,500 540,513
Compagnie Gen Des Eaux Service Company................... 90 10,453
Promodes Retail-Grocery.................... 1,500 486,151
Rhone Poulenc Chemicals......................... 11,693 507,514
Schlumberger, Ltd. Exploration Services.............. 10,000 875,000
SGS-Thomson Microelectronics N.V.* Electronics....................... 8,500 605,625
Societe Generale Banking & Financial Services...... 134 18,269
Total S.A. (B Shares) Oil & Gas Exploration............. 8,000 883,596
--------------
3,927,121
--------------
GERMANY -- 8.8%
Adidas AG Sportswear........................ 7,000 1,016,841
Deutsche Lufthansa AG Airlines.......................... 35,000 613,751
Mannesmann AG Machinery Manufacturer............ 2,000 844,956
SAP ADR Computers & Software.............. 14,200 1,410,761
Volkswagen AG Automobile Manufacturer........... 1,000 592,048
--------------
4,478,357
--------------
HONG KONG -- 5.7%
Cheung Kong Holdings, Ltd. Real Estate....................... 52,000 361,134
China Resources Enterprise, Ltd. Real Estate....................... 100,000 273,919
Citic Pacific, Ltd. Holding Company................... 90,000 430,260
HSBC Holdings Financial Services................ 42,125 952,500
</TABLE>

See notes to financial statements.
3
<PAGE>

Huaneng Power Intl., Inc. ADR* Electric Utilities................ 22,000 $ 484,000
Hutchinson Whampoa, Ltd. Diversified....................... 56,000 387,105
--------------
2,888,918
--------------
INDIA -- 0.7%
Videsh Sanchar Nigam Ltd. Telecommunications................ 25,000 345,000
--------------

INDONESIA -- 0.3%
PT Bank Intl. Indonesia Banking........................... 420 24
Telekomunik Indonesia ADR Telecommunications................ 7,500 145,781
--------------
145,805
--------------
ITALY -- 4.3%
ENI Oil Refining...................... 10,000 563,750
Gucci Group Apparel........................... 15,000 545,625
Telecom Italia Mobile Spa Telecommunications................ 300,000 1,109,760
--------------
2,219,135
--------------
JAPAN -- 21.8%
Advantest Corporation Electronics....................... 6,300 522,180
Autobacs Seven Co., Ltd. Auto Parts Distributor............ 10,000 522,305
Fuji Bank, Ltd. Banking........................... 50,000 433,171
Fujitsu, Ltd. Computer Manufacturer............. 45,000 494,815
Honda Motor Co. Automobile Manufacturer........... 16,000 539,798
Hoya Corp. Glass Manufacturer................ 13,000 452,664
Ibiden Company, Ltd. Electronics....................... 56,000 932,984
Mitsubishi Estate Co., Ltd. Real Estate....................... 45,000 569,787
Mitsui & Co., Ltd. Diversified - Wholesale........... 50,000 380,274
Nippondenso Company, Ltd. Electronics....................... 36,000 779,708
Promise Company, Ltd. Financial Services................ 18,100 1,061,469
Ricoh Company, Ltd. Office Equipment.................. 47,000 606,856
Rohm Company Ltd. Electronics....................... 5,000 495,648
Secom Company, Ltd. Securities Services............... 7,000 453,664
Sony Corp. Electronics....................... 12,000 998,626
Takeda Chemicals Industries Pharmaceuticals................... 44,000 1,202,217
TDK Corp. Electronic Components............. 8,000 665,084
--------------
11,111,250
--------------
KOREA -- 1.0%
Korea Mobile Telecom ADR Communications.................... 18,540 101,970
Pohang Iron & Steel Company, Ltd. ADR Iron & Steel Manufacturer......... 20,000 325,000
Samsung Electronics GDR* Electronics....................... 10,000 101,850
--------------
528,820
--------------
</TABLE>

See notes to financial statements.
4
<PAGE>

MEXICO -- 1.9%
Grupo Financiero Inbursa, S.A. de C.V. Financial Services................ 100,000 347,255
TV Azteca, S.A. de C.V. Television Broadcasting........... 1,000 19,125
Vitro S.A.* Glass Products.................... 50,000 596,875
--------------
963,255
--------------
NETHERLANDS -- 8.0%
Aegon N.V. Insurance......................... 10,307 809,533
Akzo N.V. Chemicals......................... 4,000 702,464
ASM Lithography Holdings N.V.* Electronics....................... 8,000 579,055
ING Groep, N.V. Financial Services................ 17,693 740,236
Koninklijke Ahold N.V. Retail Food Distributor........... 24,909 635,512
Philips Electronics N.V. Electronics....................... 7,700 603,489
--------------
4,070,289
--------------
PHILIPPINES -- 0.6%
Ionics Circuit Inc. Electronics....................... 375,000 219,685
Pilipino Telephone Corp. Telecommunications................ 500,000 108,696
--------------
328,381
--------------
SINGAPORE -- 1.2%
Singapore Press Holdings Publishing........................ 26,000 356,615
United O/S Bank Banking........................... 43,000 236,458
--------------
593,073
--------------
SPAIN -- 3.6%
Banco Santander S.A. Banking........................... 41,700 1,164,327
Telefonica de Espana ADR Telecommunication Equipment....... 8,000 658,000
--------------
1,822,327
--------------
SWEDEN -- 2.3%
Atlas Copco AB (A Shares) Machinery Manufacturer............ 20,000 585,021
Telefonaktiebolaget LM Ericsson ADR Telecommunication Equipment....... 13,500 597,375
--------------
1,182,396
--------------
SWITZERLAND -- 7.5%
Adecco SA Business Services................. 1,500 473,371
Ciba Specialty Chemicals AG* Chemicals......................... 6,000 585,065
Nestle S.A. ADR Food Processing................... 11,300 798,307
Novartis AG (Bearer Shares) Pharmacueticals................... 426 667,051
Novartis AG (Regular Shares) Pharmaceuticals................... 300 466,563
Zurich Versicherungsgesellschaft ADR* Insurance......................... 10,000 827,851
--------------
3,818,208
--------------
</TABLE>

See notes to financial statements.
5
<PAGE>

1838 INTERNATIONAL EQUITY FUND
SCHEDULE OF NET ASSETS--CONTINUED OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
------ --------
<S> <C> <C> <C>
UNITED KINGDOM -- 16.1%
British Aerospace plc Aerospace......................... 43,000 $ 1,135,849
Carlton Communications plc ADR Broadcasting...................... 15,000 631,875
Glaxo Wellcome plc Pharmaceuticals................... 18,000 770,625
Kingfisher plc Retail Department Stores.......... 55,000 787,945
Lloyds TSB Group plc Banking........................... 85,209 1,059,955
Prudential Corp. plc Insurance......................... 85,000 902,655
Reed Intl. plc Publishing........................ 66,000 649,641
Siebe plc Machinery Manufacturer............ 30,000 573,552
Smithkline Beecham plc Pharmaceuticals................... 111,246 1,049,491
Vodafone Group plc ADR Telecommunications................ 12,000 658,500
--------------
8,220,088
--------------
TOTAL COMMON STOCK
(COST $44,127,912).......................................................... 49,091,130
--------------

COMMERCIAL PAPER -- 3.7%
Par
---

American Express Credit Corp., 5.60%, 11/03/97 (COST $1,899,000).......... $1,899,000 1,899,000
--------------

TOTAL INVESTMENTS (COST $46,026,912)+--99.9%............................................ $ 50,990,130

OTHER ASSETS AND LIABILITIES, NET -- 0.1%............................................... 55,468
--------------

NET ASSETS -- 100.0%.................................................................... $ 51,045,598
==============
</TABLE>

* Non-income producing security.
+ Also the cost for Federal income tax purposes. At October 31, 1997, net
unrealized appreciation was $4,963,218. This consisted of aggregate gross
unrealized appreciation in which there was an excess of market value over
tax cost of $8,649,065, and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$3,685,847.
ADR - American Depository Receipt
GDR - Global Depository Receipt

See notes to financial statements.
6
<PAGE>

1838 SMALL CAP EQUITY FUND
- --------------------------------------------------------------------------------

December 10, 1997

TO THE SHAREHOLDER:

The North American equities markets demonstrated continued strength during the
1838 Small Cap Equity Fund's fiscal year, November 1, 1996 through October 31,
1997. During the first half of the year, the Fund outperformed the small cap
Russell 2000 Index by a healthy margin in an environment which was highlighted
by substantial volatility. During the second half of the year, the Fund
performed in line with the Index with a backdrop of generally steady
appreciation. For the entire fiscal year, the Fund's return was 37.81%, while
the Index appreciated 29.34%. The strong relative and absolute returns for the
year illustrate the general characteristics of the value style which the 1838
Small Cap Equity Fund utilizes. The fund's aim is to capture the essence of a
small cap appreciation phase, and then to hold on to those gains better than
other small cap managers during periods of corrections or consolidations. This
is accomplished by adhering to the disciplined investment process explained
below.

In the printed version there appears a line chart with the following
plot points depicted:

6/17/96 10/31/96 10/31/97
------- -------- --------
1838 Small Cap Equity Fund 10,000 9,570 13,197
Russell 2000 Index 10,000 9,682 12,521

* Includes all expenses and/or charges, and thus represents a "net return". The
Fund's returns are higher due to the Investment Advisor's maintenance of
expenses. The 1838 Small Cap Equity Fund commenced operations on June 17,
1996.

The Investment Process

The 1838 Small Cap Equity Fund follows a very disciplined investment process
focused primarily upon a low price in relation to trailing 12 months' earnings
(low P/E) screen. Accordingly, all stocks purchased for the Fund's portfolio
will be small cap ($900 million of market float or less) and low P/E, defined as
the lowest 40% of all stocks contained in the Compustat North American Database.

- --------------
Past performance is not predictive of future results. Investment returns and
principal values will fluctuate, so that, when redeemed, shares may be worth
less than their original cost.

<PAGE>

1838 SMALL CAP EQUITY FUND
- --------------------------------------------------------------------------------

This small cap, low P/E investment style has been adopted because numerous
studies have concluded that over the long-term for North American stocks, the
smaller the company and the lower the P/E, the better the performance in
aggregate. A Prudential Securities study updated through 1996 confirms that over
the last 21 years, the return of the lowest P/E stocks in the small cap universe
exceeded that of the highest valued stocks by 2.7 times.

In reviewing stocks for inclusion in the Fund's portfolio, other fundamental and
quantitative measures are observed and judged important in assisting with the
decision making process. The following analysis of the stocks in the Fund at the
end of the October 1997 fiscal year leads us to conclude that the fundamental
characteristics of the holdings in aggregate are stronger than those for the
comparable small cap benchmark.

Summary Characteristics*

Average Average Average
Market Average EPS Growth Return on Debt/Total
Cap** P/E Ratio 5 Year Equity Capitalization
----- --------- ------ ------ --------------
<S> <C> <C> <C> <C> <C>
1838 Small Cap Fund...................... $379MM 15.2x 22.5% 17.1% 34.1%
Russell 2000 Index....................... $530MM 21.9x 14.1% 15.0% 37.2%
</TABLE>

* This chart represents the characteristics of the Fund's portfolio at October
31, 1997.
** 1838 measures market float only (excluding closely held shares) only in
calculating equity capitalization for the Fund's holdings.

A comparison with similar studies in recent years suggests that these premium
fundamental characteristics tend to be consistently maintained.

During the 1838 Small Cap Equity Fund's 1997 fiscal year, five of the
portfolio's top ten performing stocks were of companies operating in the
financial sectors. The Fund's substantial weighting in that sector served it
well throughout the period as it has over the last several years. In recent
months, that sector has been de-emphasized on the margin based on historically
high valuations. The portfolio at the end of the 1997 year continued to be
well-diversified over a broad array of industry sectors. Fiscal 1997 was a
successful period for the disciplined investment style employed by the 1838
Small Cap Equity Fund.

<PAGE>

1838 SMALL CAP EQUITY FUND
- --------------------------------------------------------------------------------

The Outlook

Early into fiscal 1998, investors seem distracted by the implications of ongoing
volatility in various foreign exchange markets. As the presently unchallenged
economic and political leader of the world community, the U.S. and its private
sector remain well positioned to exploit opportunities as they presently exist.
With inflation in control and growth continuing in the U.S. economy, we maintain
a positive attitude. With some of the most obvious sectors having already
demonstrated positive performance in the equities markets, it seems likely that
stock selection will become of premier importance again. In such an environment,
a highly-disciplined small cap style should accrue to the advantage of
investors.

Sincerely,

/S/ Edwin B. Powell
Vice President & Portfolio Manager

- --------------
12/97. Shares of the 1838 Small Cap Equity Fund are distributed by Rodney Square
Distributors, Inc.

Past performance is not predictive of future results. Investment returns and
principal values will fluctuate, so that, when redeemed, shares may be
worth less than their original cost.

<PAGE>

1838 SMALL CAP EQUITY FUND
SCHEDULE OF NET ASSETS OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 2)
------ --------
<S> <C> <C>
COMMON STOCK -- 95.8%
AGRICULTURE, FORESTRY & FISHERIES -- 1.1%
Sylvan, Inc.*............................................................. 20,680 $ 310,200
--------------
FINANCE & INSURANCE -- 16.8%
INSURANCE CARRIERS -- 13.5%
Allmerica Financial Corp.................................................. 6,000 281,250
Capmac Holdings, Inc...................................................... 9,550 286,500
E.W. Blanch Holdings, Inc................................................. 10,770 360,795
Enhance Financial Services Group, Inc..................................... 6,990 369,159
Everest Re Holdings, Inc.................................................. 5,625 211,641
Executive Risk, Inc....................................................... 3,090 203,554
FPIC Insurance Group, Inc.*............................................... 8,700 258,825
Harleysville Group, Inc................................................... 15,000 382,500
Life USA Holding, Inc..................................................... 18,900 311,850
Penn Treaty American Corp.*............................................... 4,600 147,775
Penncorp Financial Group, Inc............................................. 8,500 276,781
State Auto Financial Corp................................................. 15,050 421,400
The PMI Group, Inc........................................................ 2,900 175,269
W.R. Berkley Corp......................................................... 5,250 215,906
--------------
3,903,205
--------------
SAVINGS, CREDIT & OTHER FINANCIAL INSTITUTIONS -- 0.4%
Long Island Bancorp, Inc.................................................. 3,015 134,168
--------------
STATE & NATIONAL BANKS -- 2.9%
Century Bancorp, Inc. (A Shares).......................................... 7,400 136,900
Dime Community Banccorp, Inc.*............................................ 17,100 361,238
Riggs National Corp....................................................... 9,100 209,300
United Security Bancorporation*........................................... 6,710 124,135
--------------
831,573
--------------
TOTAL FINANCE & INSURANCE............................................................. 4,868,946
--------------
MANUFACTURING -- 47.4%
BUILDER - 1.0%
Toll Brothers, Inc.*...................................................... 12,800 283,200
--------------
CHEMICALS & ALLIED PRODUCTS -- 2.6%
General Chemical Group, Inc............................................... 15,385 451,934
OM Group, Inc............................................................. 7,600 286,900
--------------
738,834
--------------
COMPUTER & OFFICE EQUIPMENT -- 0.4%
Kentek Information Systems, Inc........................................... 14,800 117,475
--------------

See notes to financial statements.
10

<PAGE>

1838 SMALL CAP EQUITY FUND
SCHEDULE OF NET ASSETS -- CONTINUED OCTOBER 31, 1997
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
CONSUMER PRODUCTS -- 3.2%
American Safety Razor Co.*................................................ 10,630 $ 175,395
Block Drug Company, Inc.*................................................. 4,100 190,650
Libbey, Inc............................................................... 10,415 389,261
The First Years, Inc...................................................... 7,030 175,750
--------------
931,056
--------------
FARM MACHINERY -- 0.6%
CTB International Corp.*.................................................. 9,700 166,112
--------------
FOOD & BEVERAGE -- 0.6%
M & F Worldwide Corp...................................................... 17,700 168,150
--------------

FURNITURE, FIXTURES & APPLIANCES -- 3.7%
American Woodmark Corp.................................................... 7,000 148,750
Culp, Inc................................................................. 7,000 133,000
Fedders Corp. (A Shares).................................................. 26,540 155,923
Furniture Brands International, Inc.*..................................... 14,300 239,525
Holophane Corp.*.......................................................... 10,800 245,700
Royal Appliance Manufacturing Co.*........................................ 18,200 143,325
--------------
1,066,223
--------------
GAMES & TOYS -- 0.2%
DSI Toys, Inc.*........................................................... 13,400 60,300
--------------
MISC. CONTAINERS -- 2.0%
Greif Brothers Corp. (A Shares)........................................... 765 26,679
Silgan Holdings, Inc...................................................... 8,800 310,200
US Can Corp.*............................................................. 15,165 244,536
--------------
581,415
--------------
MISC. ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES -- 6.6%
AVX Corp.................................................................. 15,000 423,750
Belden, Inc............................................................... 7,600 260,300
Burr-Brown Corp.*......................................................... 14,412 435,963
General Cable Corp........................................................ 15,300 495,338
HMT Technology Corp.*..................................................... 17,600 297,000
--------------
1,912,351
--------------
MISC. FABRICATED METAL PRODUCTS -- 3.2%
Coastcast Corp.*.......................................................... 12,400 181,350
Doncasters plc ADR*....................................................... 7,300 196,644
Oregon Metallurgical Corp.*............................................... 11,700 274,219
Wolverine Tube, Inc.*..................................................... 8,775 272,025
--------------
924,238
--------------

See notes to financial statements.
11

<PAGE>

1838 SMALL CAP EQUITY FUND
SCHEDULE OF NET ASSETS -- CONTINUED OCTOBER 31, 1997
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
MISC. INSTRUMENTATION -- 0.8%
Fluke Corp................................................................ 10,140 $ 243,994
--------------
MISC. MANUFACTURING INDUSTRIES -- 1.1%
Velcro Industries N.V..................................................... 3,180 303,690
--------------
PAPER & PAPER PRODUCTS -- 4.9%
American Pad & Paper Co.*................................................. 13,825 176,269
Buckeye Technology, Inc.*................................................. 12,490 518,335
Paragon Trade Brands, Inc.*............................................... 7,300 139,156
Schweitzer-Mauduit International, Inc..................................... 5,710 240,533
Shorewood Packaging Corp.................................................. 14,000 346,500
--------------
1,420,793
--------------
PRECISION INSTRUMENTS & MEDICAL SUPPLIES -- 4.2%

Del Global Technologies Corp.*............................................ 22,000 222,750
Haemonetics Corp.*........................................................ 13,200 199,650
Hologic, Inc.*............................................................ 11,600 297,250
Marquette Medical Systems (A Shares)*..................................... 11,400 293,550
OEC Medical Systems, Inc.*................................................ 11,830 215,897
--------------
1,229,097
--------------
PRINTING & PUBLISHING -- 0.6%
Journal Register Co....................................................... 10,200 177,863
--------------
RUBBER & PLASTICS -- 0.4%
Channell Commercial Corp.*................................................ 8,215 101,661
--------------
TELECOMMUNICATIONS EQUIPMENT -- 1.3%
Oak Industries, Inc.*..................................................... 13,490 386,994
--------------
TEXTILES & APPAREL -- 2.7%
Hirsch International Corp. (A Shares)*.................................... 4,862 91,770
Quaker Fabric Corp.*...................................................... 10,300 196,344
Quiksilver, Inc.*......................................................... 5,900 181,425
Tropical Sportswear International*........................................ 16,100 193,200
Worldtex, Inc.*........................................................... 14,600 122,275
--------------
785,014
--------------
TRANSPORTATION -- 5.0%
Alaska Air Group, Inc.*................................................... 12,100 403,838
America West Holdings Corp.*.............................................. 22,400 331,800
Canadian National Railway Co.............................................. 5,700 307,444
Rollins Truck Leasing Corp................................................ 23,700 394,012
--------------
1,437,094
--------------

See notes to financial statements.
12
<PAGE>

1838 SMALL CAP EQUITY FUND
SCHEDULE OF NET ASSETS -- CONTINUED OCTOBER 31, 1997
- --------------------------------------------------------------------------------

Value
Shares (Note 2)
------ --------
TRANSPORTATION EQUIPMENT -- 2.3%
Avondale Industries, Inc.*................................................ 12,500 $ 337,500
Coachmen Industries, Inc.................................................. 16,100 319,988
--------------
657,488
--------------
TOTAL MANUFACTURING................................................................... 13,693,042
--------------
MINING -- 4.3%
COAL -- 0.7%
Zeigler Coal Holding Co................................................... 10,800 193,050
--------------
CRUDE PETROLEUM & NATURAL GAS -- 3.6%
Belco Oil & Gas Corp.*.................................................... 8,700 188,137
Santa Fe International Corp............................................... 7,400 363,988
Seacor Smit, Inc.......................................................... 5,400 351,675
Willbros Group, Inc.*..................................................... 7,900 154,050
--------------
1,057,850
--------------
TOTAL MINING.......................................................................... 1,250,900
--------------
REAL ESTATE INVESTMENT TRUSTS -- 3.4%
Brandywine Realty Trust................................................... 10,000 234,375
Burnham Pacific Properties, Inc........................................... 17,900 261,787
Healthcare Realty Trust, Inc.............................................. 9,400 261,437
Pacific Gulf Properties, Inc.............................................. 9,400 212,675
--------------
TOTAL REAL ESTATE INVESTMENT TRUSTS.................................................... 970,274
--------------
SERVICES -- 10.4%
AMUSEMENT & RECREATION SERVICES -- 1.0%
Harveys Casino Resorts.................................................... 14,735 278,123
--------------

BUSINESS SERVICES -- 1.2%
Layne Christensen Co...................................................... 13,600 270,300
Obie Media Corp.*......................................................... 10,300 79,825
--------------
350,125
--------------
COMPUTER SERVICES -- 2.8%
Galileo International, Inc................................................ 10,100 253,762
The Learning Company, Inc.*............................................... 21,900 413,363
Wall Data, Inc............................................................ 9,000 147,375
--------------
814,500
--------------
MEDICAL & HEALTH SERVICES -- 4.8%
Grancare, Inc.*........................................................... 17,600 198,000
Integrated Health Services, Inc........................................... 15,300 485,775

See notes to financial statements.
13
<PAGE>

1838 SMALL CAP EQUITY FUND
SCHEDULE OF NET ASSETS -- CONTINUED OCTOBER 31, 1997
- --------------------------------------------------------------------------------

Value
Shares (Note 2)
------ --------

Maxicare Health Plans, Inc.*.............................................. 10,520 $ 147,280
Sun Healthcare Group, Inc.*............................................... 11,700 232,537
Trigon Healthcare, Inc.................................................... 12,700 310,356
--------------
1,373,948
--------------
PERSONAL SERVICES -- 0.6%
CPI Corp.................................................................. 7,100 184,600
--------------

TOTAL SERVICES........................................................................ 3,001,296
--------------
WHOLESALE & RETAIL TRADE -- 12.4%
RETAIL STORES -- 4.9%
Brylane, Inc.*............................................................ 6,900 299,719
Duckwall-Alco Stores, Inc.*............................................... 6,900 102,637
Finlay Enterprises, Inc.*................................................. 9,300 195,300
Little Switzerland, Inc.*................................................. 19,595 127,367
Ruddick Corp.............................................................. 24,035 375,547
Zale Corp.*............................................................... 13,275 335,194
--------------
1,435,764
--------------

RETAIL BUILDING MATERIALS -- 1.5%
Building Materials Holding Corp.*......................................... 23,815 297,688
Cameron Ashley Building Products*......................................... 8,200 142,475
--------------
440,163
--------------
RESTAURANTS -- 0.7%
O' Charley's, Inc.*....................................................... 11,000 203,500
--------------

WHOLESALE ELECTRONIC EQUIP. & COMPUTERS -- 2.3%
Marshall Industries.*..................................................... 9,745 341,684
Pioneer-Standard Electronics, Inc......................................... 19,700 322,588
--------------
664,272
--------------
WHOLESALE MISCELLANEOUS -- 3.0%
Day Runner, Inc.*......................................................... 6,700 270,093
Pameco Corp.*............................................................. 8,100 137,700
Pilgrim's Pride Corp...................................................... 10,000 131,250
United Stationers, Inc.*.................................................. 7,800 315,900
--------------
854,943
--------------
TOTAL WHOLESALE & RETAIL TRADE......................................................... 3,598,642
--------------
TOTAL COMMON STOCK (COST $23,997,784).................................................. 27,693,300
--------------

See notes to financial statements.
14

<PAGE>

1838 SMALL CAP EQUITY FUND
SCHEDULE OF NET ASSETS -- CONTINUED OCTOBER 31, 1997
- --------------------------------------------------------------------------------

Value
Par (Note 2)
--- --------

MISCELLANEOUS ASSETS -- 4.4%
Scudder Managed Cash Fund (COST $1,278,051)............................... $1,278,051 $ 1,278,051
--------------
COMMERCIAL PAPER -- 1.2%
American Express Credit Corp., 5.60%, 11/03/97 (COST $350,000)............ 350,000 350,000
--------------
TOTAL INVESTMENTS (COST $25,625,835)+ -- 101.4%................................................. $ 29,321,351

OTHER ASSETS AND LIABILITIES, NET -- (1.4)%..................................................... (398,814)
--------------
NET ASSETS -- 100.0%............................................................................ $ 28,922,537
==============
</TABLE>

* Non-income producing security.

+ The cost for Federal income tax purposes was $25,541,736. At October 31,1997,
net unrealized appreciation was $3,779,615. This consisted of aggregate gross
unrealized appreciation in which there was an excess of market value over
tax cost of $4,434,983, and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$655,368

See notes to financial statements.
15
<PAGE>

1838 FIXED INCOME FUND
- --------------------------------------------------------------------------------

December 11, 1997

TO THE SHAREHOLDER:

Fixed Income Market Review

Interest rates declined over the past two months, mostly as a result of a flight
to quality into the U.S. bond market. As the Southeast Asian markets fell,
investors turned to dollar markets as a safe haven. In addition, inflation news
continued to show positive results, with consumer prices averaging only a 2%
rise over the past year, and prices at the producer level showing no increase.
The overall U.S. economy still shows signs of strength, however, as evidenced
by favorable indicators in the housing and jobs market. Although the Asian
crisis is expected to have some negative impact on U.S. growth in the months
ahead, the net effect will likely be a small decline in the rate of growth from
3+% to 2.5+%. The Federal Reserve could not have asked for more. As long as
economic growth remains at or around the targeted 2.5% level, there will be no
apparent need to raise interest rates, however, they will undoubtedly remain
alert to any signs of wage pressures. With the unemployment rate touching a
24-year low at 4.6%, employers may find stretching employee productivity more
and more challenging at current wage levels.

The 1838 Fixed Income Fund

Since its inception on 9/2/97, the unit value of the Fixed Income Fund has risen
from $10.00 per share to $10.27 per share. This represents a total return of
2.70%, versus the Lehman Aggregate Index return of 2.65%.

Currently, the Fund is positioned for a continuation of the flight to quality.
The Fund has an average duration of 5.13 years, versus 4.58 years for the Index.
The weighting in corporate bonds has been increased as a result of better
valuations stemming from the declining U.S. equity market. Also, the portfolio
holds 36% in mortgage-backed securities due to favorable valuation.

Looking ahead, the duration of the Fund will likely be reduced as long-term
interest rates approach 6%.

<PAGE>

1838 FIXED INCOME FUND
- --------------------------------------------------------------------------------

A summary of the Fund profile is as follows:

1838 Fixed Lehman
Income Fund Aggregate Index
----------- ---------------
Average Maturity.......................... 11.57 years 8.43 years
Average Duration.......................... 5.13 years 4.58 years
Average Quality........................... AA1 AAA
Yield to Maturity......................... 6.73% 6.49%

Sincerely,

/s/ Marcia Zercoe
Vice President & Portfolio Manager

- --------------
12/97. Shares of the 1838 International Equity Fund are distributed by Rodney
Square Distributors, Inc.

Past performance is not predictive of future results. Investment returns and
principal values will fluctuate, so that, when redeemed, shares may be
worth less than their original cost.

<PAGE>

1838 FIXED INCOME FUND
SCHEDULE OF NET ASSETS OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Moody's/S&P Principal Value
Rating* Amount (Note 2)
----------- --------- --------
<S> <C> <C> <C>
CORPORATE BONDS -- 38.5%
ELECTRIC UTILITIES -- 7.5%
Korea Electric Power Co., 7.00%, 10/01/02...................... A1/AA- $ 1,000,000 $ 975,000
Korea Electric Power Co., 7.00%, 02/01/27...................... A1/A+ 600,000 569,250
Utilicorp United Inc., 9.00%, 11/15/21......................... Baa3/BBB 800,000 885,974
------------
2,430,224
------------

FINANCIAL -- 18.9%
Associates Corp. of N.A., 6.50%, 10/15/02...................... Aa3/AA- 1,000,000 1,006,580
Citicorp Capital II, Capital Securities, 8.015%, 02/15/27...... Aaa3/A- 1,125,000 1,186,875
FBS Capital I, Capital Securities, 8.09%, 11/15/26............. A2/BBB+ 300,000 316,125
Ford Motor Credit Global, 7.20%, 06/15/07...................... A1/A 1,000,000 1,041,800
JPM Capital Trust II, Capital Securities, 7.95%, 02/01/27...... Aa2/AA- 625,000 655,469
Keycorp Institutional Capital - A, 7.826%, 12/01/20............ A1/BBB 900,000 920,250
Salomon, Inc., 6.75%, 02/15/03................................. Baa1/BBB 1,000,000 1,010,790
------------
6,137,889
------------

FOREIGN -- 1.4%
Republic of Indonesia, 7.75%, 08/01/06......................... Baa3/BBB- 500,000 461,250
------------

INDUSTRIAL & MISCELLANEOUS -- 7.2%
Harcourt General Inc., 7.30%, 08/01/20......................... Baa1/BBB+ 1,000,000 1,002,500
News America Holdings Inc., Gtd. Debs., 7.90%, 12/01/95........ Baa3/BBB- 925,000 926,156
Societe Generale (NY), 7.40%, 06/01/20......................... A1/A+ 400,000 419,500
------------
2,348,156
------------

MANUFACTURING -- 3.1%
Raytheon Co., 6.75%, 08/15/07.................................. Baa1/BBB 1,000,000 1,017,500
------------

TRANSPORTATION -- 0.4%
Union Pacific Co., Debs., 8.625%, 05/15/20..................... Baa2/BBB 125,000 132,500
------------

TOTAL CORPORATE BONDS (COST $12,383,158) .............................................. 12,527,519
------------

MORTGAGE BACKED SECURITIES -- 35.8%
FHLMC, Ser. T-8, Class A6, 7.00%, 01/15/19..................... NR/NR 1,000,000 1,015,900
FHLMC Pool #C80340, 6.50%, 08/01/25............................ NR/NR 90,650 89,205
FHLMC Pool #C80342, 6.50%, 09/01/20............................ NR/NR 1,033,607 1,017,134
FHLMC Pool #G10557, 6.50%, 07/01/20............................ NR/NR 1,624,088 1,623,581
FNMA Pool #250890, 7.00%, 04/01/04............................. NR/NR 1,741,045 1,762,808
FNMA Pool #313411, 7.00%, 03/01/04............................. NR/NR 472,409 478,314
FNMA Pool #303728, 6.00%, 01/01/20............................. NR/NR 1,409,649 1,384,099

</TABLE>

See notes to financial statements.
18

<PAGE>
1838 FIXED INCOME FUND
SCHEDULE OF NET ASSETS -- CONTINUED OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Moody's/S&P Principal Value
Rating* Amount (Note 2)
----------- --------- --------
<S> <C> <C> <C>
GNMA Pool #780312, 6.00%, 01/15/20............................. NR/NR $ 1,099,230 $ 1,061,787
GNMA Pool #417239, 7.00%, 02/15/20............................. NR/NR 1,661,180 1,670,005
GNMA Pool #2038, 8.50%, 07/20/20............................... NR/NR 66,569 69,294
GNMA Pool #780374, 7.50%, 12/15/20............................. NR/NR 1,452,371 1,490,495
------------

TOTAL MORTGAGE BACKED SECURITIES (COST $11,567,430) ................................... 11,662,622
------------

U.S. TREASURY OBLIGATIONS -- 24.7%
U.S. TREASURY BONDS -- 1.6%
U.S. Treasury Bonds, 7.25%, 08/12/22........................... NR/NR 25,000 28,145
U.S. Treasury Bonds, 6.25%, 08/15/23........................... NR/NR 500,000 500,905
------------
529,050
------------

U.S. TREASURY NOTES -- 23.1%
U.S. Treasury Inflation Index Note, 3.375%, 01/15/07........... NR/NR 900,000 887,337
U.S. Treasury Notes, 6.375%, 5/15/99.......................... NR/NR 1,200,000 1,212,744
U.S. Treasury Notes, 5.625%, 11/30/00.......................... NR/NR 1,400,000 1,394,274
U.S. Treasury Notes, 5.875%, 02/15/00.......................... NR/NR 850,000 852,873
U.S. Treasury Notes, 6.25%, 04/30/01........................... NR/NR 1,500,000 1,522,455
U.S. Treasury Notes, 6.625%, 06/30/01.......................... NR/NR 1,000,000 1,027,070
U.S. Treasury Notes, 5.875%, 06/30/20.......................... NR/NR 600,000 602,646
------------
7,499,399
------------

TOTAL U.S. TREASURY OBLIGATIONS (COST $7,977,389) ..................................... 8,028,449
------------

MISCELLANEOUS ASSETS -- 1.9%
Scudder Managed Cash Fund (COST $611,437)...................... NR/NR 611,437 611,437
------------

TOTAL INVESTMENTS (COST $32,539,414)+ -- 100.9%................................................. 32,830,027

OTHER ASSETS AND LIABILITIES, NET -- (0.9)%..................................................... (292,858)
------------

NET ASSETS -- 100.0%............................................................................ $ 32,537,169
============
</TABLE>

* Although certain securities are not rated (NR) by either Moody's or S&P, they
have been determined to be of comparable quality to investment grade
securities by the Portfolio Adviser. The Moody's/S&P rating for debt
securities is not covered by the report of independent accountants.

+ The cost for federal income tax purposes. At October 31, 1997, net
unrealized appreciation was $290,613. This consisted of aggregate gross
unrealized appreciation for all securities in which there was an excess of
market value over tax cost of $324,905 and aggregate gross unrealized
depreciation for all securities in which there was an excess of tax cost over
market value of $34,292.

See notes to financial statements.
19

<PAGE>

1838 INVESTMENT ADVISORS FUNDS
STATEMENTS OF ASSETS AND LIABILITIES OCTOBER 31, 1997
- --------------------------------------------------------------------------------

International Equity Small Cap Equity Fixed Income
Fund Fund Fund
-------------------- --------------- --------------
<S> <C> <C> <C>
Assets:
Investments, at market (identified cost $46,026,912,
$25,625,835, $32,539,414) (Note 2)..................... $ 50,990,130 $ 29,321,351 $ 32,830,027
Receivables:
Dividends and interest ................................. 100,667 16,867 444,252
Foreign taxes recoverable............................... 31,036 -- --
Fund shares sold........................................ 1,377 2,832 17
Investment securities sold.............................. -- -- 734,851
Reimbursement due from adviser............................. -- -- 27,100
Deferred organizational costs (Note 2)..................... 71,119 -- --
Other assets............................................... 166 -- --
-------------- --------------- --------------

Total assets ........................................... 51,194,495 29,341,050 34,036,247
-------------- --------------- --------------

Liabilities:
Payables:
Due to Adviser ......................................... 46,045 27,106 --
Accrued expenses (Note 4) .............................. 84,602 52,439 34,376
Investment securities purchased......................... 18,250 338,968 1,010,790
Overdraft payable....................................... -- -- 453,912
-------------- --------------- --------------
Total liabilities ...................................... 148,897 418,513 1,499,078
-------------- --------------- --------------

Net Assets ................................................ $ 51,045,598 $ 28,922,537 $ 32,537,169
============== =============== ==============

Net Assets consist of:
Common Stock .............................................. $ 4,258 $ 2,212 $ 3,169
Additional capital paid in................................. 43,221,459 23,243,163 31,969,708
Undistributed net investment income (loss)................. 1,262 -- 181,298
Accumulated realized gain (loss) on:
Investments ............................................ 2,853,031 1,981,646 92,381
Foreign currency transactions........................... -- -- --
Net unrealized appreciation on:
Investments............................................. 4,963,218 3,695,516 290,613
Translation of assets and liabilities in foreign
currencies ........................................... 2,370 -- --
-------------- --------------- --------------

Net Assets, for 4,257,803, 2,211,888, and 3,169,065 shares
outstanding, respectively ............................. $ 51,045,598 $ 28,922,537 $ 32,537,169
============== =============== ==============

Net Asset Value, offering and redemption price per share... $11.99(1) $13.08(2) $10.273(3)
============== =============== ==============

1 $51,045,598 (divided by) 4,257,803 outstanding shares of beneficial interest, no par value
2 $28,922,537 (divided by) 2,211,888 outstanding shares of beneficial interest, no par value
3 $32,537,169 (divided by) 3,169,065 outstanding shares of beneficial interest, no par value
</TABLE>

See notes to financial statements.
20

<PAGE>

1838 INVESTMENT ADVISORS FUNDS
STATEMENTS OF OPERATIONS FOR THE PERIOD ENDED OCTOBER 31, 1997
- --------------------------------------------------------------------------------

International Equity Small Cap Equity Fixed Income
Fund Fund Fund++
-------------------- ---------------- --------------
<S> <C> <C> <C>

Investment Income:
Dividends............................................... $ 776,927 $ 126,079 $ 20,957
Interest................................................ 48,032 60,813 183,658
-------------- --------------- --------------
824,959 186,892 204,615
-------------- --------------- --------------
Less foreign taxes withheld............................. (65,995) -- --
-------------- --------------- --------------
758,964 186,892 204,615
-------------- --------------- --------------
Expenses:
Investment advisory fee (Note 4) .......................... 372,918 142,555 15,545
Administration fee (Note 4)................................ 58,580 42,416 3,974
Accounting fee (Note 4) ................................... 62,304 40,000 6,575
Custodian fees ............................................ 49,457 21,107 1,000
Amortization of organizational expenses (Note 2) .......... 25,853 -- --
Legal ..................................................... 37,269 5,244 15,171
Audit ..................................................... 16,125 15,025 10,000
Registration fees ......................................... 13,180 17,508 3,966
Directors' fees and expenses (Note 4)...................... 14,250 14,250 3,000
Transfer agency fees....................................... 23,180 19,819 3,000
Reports to shareholders ................................... 21,031 24,991 2,800
Other ..................................................... 21,631 7,046 931
-------------- --------------- --------------
Total expenses before fee waivers ......................... 715,778 349,961 65,962
-------------- --------------- --------------
Advisory fee waived (Note 4)......................... (93,801) (112,370) (15,545)
Reimbursement from Investment Advisor (Note 4)....... -- -- (27,100)
-------------- --------------- --------------
Total expenses, net.................................. 621,977 237,591 23,317
-------------- --------------- --------------

Net investment income (loss)............................ 136,987 (50,699) 181,298
-------------- --------------- --------------

Realized gain on investments and foreign currency:
Net realized gain (loss) on:
Investments.......................................... 3,183,377 2,095,990 92,381
Foreign currency transactions........................ (126,955) -- --
Net unrealized appreciation during the period on:
Investments.......................................... 3,571,590 3,538,690 290,613
Translation of assets and liabilities in
foreign currencies................................. 8,250 -- --
-------------- --------------- --------------
Net gain on investments and foreign currency............ 6,636,262 5,634,680 382,994
-------------- --------------- --------------

Net increase in net assets resulting from operations ...... $ 6,773,249 $ 5,583,981 $ 564,292
============== =============== ==============
</TABLE>

++ The Fixed Income Fund commenced operations on September 2, 1997.

See notes to financial statements.
21

<PAGE>

1838 INVESTMENT ADVISORS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS OCTOBER 31, 1997
- --------------------------------------------------------------------------------

International Equity Small Cap Equity Fixed Income
Fund Fund+ Fund++
-------------------- ---------------- --------------
<S> <C> <C> <C>

For the Period Ended October 31, 1997
Increase in Net Assets
Operations:
Net investment income (loss) ........................... $ 136,987 $ (50,699) $ 181,298
Net realized gain (loss) on:
Investments ......................................... 3,183,377 2,095,990 92,381
Foreign currency transactions........................ (126,955) -- --
-------------- --------------- --------------
Net unrealized appreciation during the period on:
Investments ......................................... 3,571,590 3,538,690 290,613
Translation of assets and liabilities in foreign
currencies......................................... 8,250 -- --
-------------- --------------- --------------
Net increase in net assets resulting from operations....... 6,773,249 5,583,981 564,292
-------------- --------------- --------------
Distributions to shareholders from:
Net investment income ($0.04, $0, and $0 per share,
respectively) ....................................... (148,857) -- --
Net realized gain ($0, $0.09 and $0 per share,
respectively) ....................................... -- (67,511) --
-------------- --------------- --------------
Total Distributions........................................ (148,857) (67,511) --
-------------- --------------- --------------
Increase in net assets from Fund share transactions
(Note 5)................................................. 3,212,276 17,978,416 31,972,877
-------------- --------------- --------------

Increase in net assets .................................... 9,836,668 23,494,886 32,537,169
Net Assets:
Beginning of period ................................... 41,208,930 5,427,651 --
-------------- --------------- --------------
End of period........................................... $ 51,045,598 $ 28,922,537 $ 32,537,169
============== =============== ==============

For the Period Ended October 31, 1996
Increase in Net Assets
Operations:
Net investment income (loss) .......................... $ 204,643 $ (8,741) $ --
Net realized loss on:
Investments ......................................... (306,807) (46,833) --
Foreign currency transactions........................ (63,127) -- --
Net unrealized appreciation (depreciation) during the
period on:
Investments ......................................... 2,071,153 156,826 --
Translation of assets and liabilities in foreign
currencies......................................... (5,836) -- --
-------------- --------------- --------------
Net increase in net assets resulting from operations....... 1,900,026 101,252 --
-------------- --------------- --------------
Distribution to shareholders from:
Net investment income ($0.04, $0 and $0 per share,
respectively) ....................................... (78,685) -- --
-------------- --------------- --------------
Increase in net assets from Fund share transactions
(Note 5)................................................. 22,623,847 5,326,399 --
-------------- --------------- --------------

Increase in net assets .................................... 24,445,188 5,427,651 --

Net Assets:
Beginning of period..................................... 16,763,742 -- --
-------------- --------------- --------------

End of period .......................................... $ 41,208,930 $ 5,427,651 $ --
============== =============== ==============
</TABLE>

+ The Small Cap Equity Fund commenced operations on June 17, 1996.
++ The Fixed Income Fund commenced operations on September 2, 1997.

See notes to financial statements.
22
<PAGE>

1838 INVESTMENT ADVISORS FUNDS
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------

The following tables include selected data for a share outstanding throughout
each fiscal year or period and other performance information derived from the
financial statements. They should be read in conjunction with the financial
statements and notes thereto.

INTERNATIONAL EQUITY FUND
<TABLE>
<CAPTION>
For the Fiscal Years or Period Ended October 31,
--------------------------------------------------
1997 1996 1995+
--------------------------------------------------
<S> <C> <C> <C>
Net Asset Value - Beginning of Period ............ $10.44 $9.61 $10.00
-------- -------- -------
Investment Operations:
Net investment income ......................... 0.02 0.07 0.02
Net realized and unrealized gain (loss) on
investment and foreign currency transactions 1.57 0.80 (0.41)
-------- -------- -------
Total from investment operations ........ 1.59 0.87 (0.39)
-------- -------- -------
Distributions:
From net investment income .................... (0.04) (0.04) --
-------- -------- -------
Net Asset Value - End of Period .................. $11.99 $10.44 $9.61
======== ======== =======

Total Return ..................................... 15.23% 9.11% (3.90)%***
Ratios (to average net assets)/Supplemental Data:
Expenses1 .................................. 1.25% 1.25% 1.25%*
Net investment income ...................... 0.28% 0.70% 1.02%*
Portfolio turnover rate .......................... 92.33% 59.11% 42.21%*
Average commission rate paid ..................... $0.0308 $0.0211 --
Net assets at end of period (000's omitted) ...... $51,046 $41,209 $16,764
</TABLE>

SMALL CAP EQUITY FUND
<TABLE>
<CAPTION>
For the Fiscal Year or Period Ended October 31,
-----------------------------------------------
1997 1996+
-----------------------------------------------
<S> <C> <C>
Net Asset Value - Beginning of Period ............ $9.57 $10.00
------- -------
Investment Operations:
Net investment income (loss) .................. (0.02) (0.02)
Net realized and unrealized gain (loss) on
investment and foreign currency transactions 3.62 (0.41)
------- -------
Total from investment operations ........ 3.60 (0.43)
------- -------
Distributions:
From net realized gains ....................... (0.09) --
------- -------
Net Asset Value - End of Period .................. $13.08 $9.57
======= =======

Total Return ..................................... 37.81% (4.30)%***
Ratios (to average net assets)/Supplemental Data:
Expenses2 .................................. 1.25% 1.25%*
Net investment income ...................... (0.27)% (0.52)%*
Portfolio turnover rate .......................... 67.66% 94.38%*
Average commission rate paid ..................... $0.0595 $0.0512
Net assets at end of period (000's omitted) ...... $28,923 $5,428
</TABLE>

See notes to financial statements.
23

<PAGE>

1838 INVESTMENT ADVISORS FUNDS
FINANCIAL HIGHLIGHTS--CONTINUED
- --------------------------------------------------------------------------------

FIXED INCOME FUND

For the Period
ended
October 31, 1997+
-----------------
Net Asset Value - Beginning of Period ...................... $10.00
------
Investment Operations:
Net investment income ................................... 0.06
Net realized and unrealized gain on
investment ........................................... 0.21
------
Total from investment operations .................. 0.27
------
Net Asset Value - End of Period ............................ $10.27
======
Total Return ............................................... 2.70%***
Ratios (to average net assets)/Supplemental Data:
Expenses3 ............................................ 0.75%*
Net investment income ................................ 5.83%*
Portfolio turnover rate .................................... 39.12%**
Net assets at end of period (000's omitted) ................ $32,537

* Annualized.

** Not annualized.

***The total return has not been annualized.

+ The International Equity Fund commenced operations on August 3, 1995. The
Small Cap Equity Fund commenced operations on June 17, 1996. The Fixed
Income Fund commenced operations on September 2, 1997.

1 Without waivers the annualized ratio of expenses to average daily net assets
would have been 1.44%, 1.80% and 2.60% for the fiscal years ended October
31, 1997, 1996 and the period ended October 31, 1995, respectively.

2 Without waivers the annualized ratio of expenses to average daily net assets
would have been 1.84% and 4.63% for the fiscal year ended October 31, 1997
and the period ended October 31, 1996, respectively.

3 Without waivers and reimbursements the annualized ratio of expenses to
average daily net assets would have been 2.12% for the period ended October
31, 1997.

See notes to financial statements.
24

<PAGE>

1838 INVESTMENT ADVISORS FUNDS
NOTES TO THE FINANCIAL STATEMENTS OCTOBER 31, 1997
- --------------------------------------------------------------------------------

Note 1--Description of the Funds

The 1838 Investment Advisors Funds (the "Trust"), a diversified, open-end
management investment company, was established as a series Delaware business
trust on December 9, 1994, and is registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Trust's Agreement and Declaration of
Trust permits the Trustees to issue an unlimited number of shares of beneficial
interest. The Trust has established three series: the 1838 International Equity
Fund, the 1838 Small Cap Equity Fund and the 1838 Fixed Income Fund (each a
"Fund" and collectively, the "Funds"). The Investment objectives of each Fund
are set forth below.

The 1838 International Equity Fund (the "International Equity Fund"), the first
of the series currently offered by the Trust, commenced operations on August 3,
1995. The Fund's investment objective is capital appreciation, with a secondary
objective of income. The Fund seeks to achieve its objective by investing in a
diversified portfolio of equity securities of issuers located in countries other
than the United States.

The 1838 Small Cap Equity Fund (the "Small Cap Equity Fund") commenced
operations on June 17, 1996. The Fund's investment objective is long-term
growth. The Fund seeks to achieve its objective by investing primarily in the
common stock of domestic companies with relatively small market capitalization,
those with a market value of $1 billion or less (small cap), which are believed
to be undervalued and have good prospects for capital appreciation. The Fund
will invest in small capitalization companies using a value approach.

The 1838 Fixed Income Fund (the "Fixed Income Fund") commenced operations on
September 2, 1997. The Fund's investment objective is maximum current income,
with a secondary objective of growth. The Fund seeks to achieve its objective by
investing, under normal circumstances, at least 65% of its assets in a
diversified portfolio of fixed income securities.

Note 2--SignIficant Accounting Policies

Security Valuation. Each Fund's securities, except investments with remaining
maturities of 60 days or less, are valued at the last quoted sales price on the
security's principal exchange on that day. If there are no sales of the relevant
security on such day, the security will be valued at the mean between the
closing bid and asked price on that day, if any. Debt securities having a
maturity of 60 days or less are valued at amortized cost. Securities for which
market quotations are not readily available and all other assets will be valued
at their respective fair market value as determined in good faith by, or under
procedures established by, the Board of Trustees. At October 31, 1997, there
were no securities valued by the Board of Trustees.

Federal Income Taxes. Each Fund is treated as a separate entity and intends to
continue to qualify as a "regulated investment company" under Subchapter M of
the Internal Revenue Code of 1986 and to distribute all of its taxable income to
its shareholders. Therefore, no federal income or excise tax provision is
required.

Dividends and Capital Gain Distributions. Distributions of net investment income
and net realized gains are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for foreign currency
transactions for the International Equity Fund and differing cost basis for
securities sold for the Small Cap Equity Fund, since certain securities were
transferred to the Fund at its inception. These distributions by each Fund will
be made annually in

<PAGE>

1838 INVESTMENT ADVISORS FUNDS
NOTES TO THE FINANCIAL STATEMENTS--CONTINUED OCTOBER 31, 1997
- -------------------------------------------------------------------------------

Note 2--Significant Accounting Policies--continued

December. Additional distributions may be made by each Fund to the extent
necessary.

Deferred Organizational Costs. Costs incurred by the International Equity Fund
in connection with the initial registration and public offering of shares have
been deferred and are being amortized on a straight-line basis over a five-year
period beginning on the date that the Fund commenced operations.

Foreign Currency Translations. The books and records of the International Equity
Fund are maintained in U.S. dollars. Foreign currency amounts are translated
into U.S. dollars on the following basis:

(i) market value of investment securities, assets and liabilities at the
daily rates of exchange, and

(ii) purchases and sales of investment securities, dividend and interest
income and certain expenses at the rates of exchange prevailing on the
respective dates of such transactions.

The International Equity Fund does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments from
the fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.

Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency gains
or losses realized between the trade and settlement dates on securities
transactions, the difference between the amounts of dividends, interest, and
foreign withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses at the end of the fiscal year arise from changes in
the value of assets and liabilities, other than investments in securities,
resulting from changes in exchange rates.

Forward Foreign Currency Exchange Contracts. In connection with portfolio
purchases and sales of securities denominated in a foreign currency, the
International Equity Fund may enter into forward foreign currency exchange
contracts. Additionally, the International Equity Fund may enter into these
contracts to hedge certain foreign currency assets. Foreign currency exchange
contracts are recorded at market value. Certain risks may arise upon entering
into these contracts from the potential inability of counterparties to meet the
terms of their contracts. Realized gains or losses arising from such
transactions are included in net realized gain (loss) from foreign currency
transactions.

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 may affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

Other. Investment security transactions are accounted for on a trade date basis.
Each Fund uses the specific identification method for determining realized gain
or loss on investments for both financial and federal income tax reporting
purposes. Dividend income and distributions to shareholders are recorded on the
ax-dividend date. Interest income is recorded on an accrual basis.

<PAGE>

1838 INVESTMENT ADVISORS FUNDS
NOTES TO THE FINANCIAL STATEMENTS--CONTINUED OCTOBER 31, 1997
- --------------------------------------------------------------------------------

Note 3--Purchases and Sales of Investment Securities

During the period ended October 31, 1997, purchases and sales of investment
securities (excluding short-term investments) aggregated as follows:

International Small Cap Fixed Income
Equity Fund Equity Fund Fund
------------- ----------- ------------
Purchases ............. $46,613,096 $28,770,272 $ 5,925,481
Sales ................. 44,516,503 12,069,906 8,178,793

Note 4--Advisory Fee and Other Transactions with Affiliates

The Trust, on behalf of each Fund, employs 1838 Investment Advisors, L.P. (the
"Investment Adviser"), a Delaware limited partnership and registered investment
adviser under the 1940 Act, to furnish investment advisory services to the Funds
pursuant to an Investment Advisory Agreement with the Trust. The Investment
Adviser supervises the investments of the assets of each Fund in accordance with
each Fund's investment objective, policies and restrictions.

The Trust pays the Investment Adviser a monthly fee at the following annual
rates of each Fund's average daily net assets: 0.75% for the International
Equity Fund, 0.75% for the Small Cap Equity Fund and 0.50% for the Fixed Income
Fund. The Investment Adviser has voluntarily agreed to waive its advisory fee or
reimburse each Fund monthly to the extent that the total operating expenses will
exceed the following annual rates of each Fund's average daily net assets: 1.25%
for the International Equity Fund, 1.25% for the Small Cap Equity Fund and 0.75%
for the Fixed Income Fund. This undertaking may be rescinded at any time in the
future.

The following table summarizes the advisory fees for the period ended October
31, 1997:

Gross Advisory Fee Reimbursement
Advisory Fee Waiver From Advisor
------------ ------------ -------------
International Equity Fund $ 372,918 $ 93,801 --
Small Cap Equity Fund 142,555 112,370 --
Fixed Income Fund 15,545 15,545 $27,100

Rodney Square Management Corporation ("RSMC"), a wholly owned subsidiary of
Wilmington Trust Company ("WTC"), serves as Administrator to the Trust pursuant
to an Administration Agreement with the Trust on behalf of each Fund. As
Administrator, RSMC is responsible for services such as financial reporting,
compliance monitoring and corporate management. For the services provided, RSMC
receives a monthly administration fee from the Trust at the annual rate of 0.15%
of the average daily net assets of the Trust on the first $50 million; 0.10% of
such assets in excess of $50 million to $100 million; plus 0.07% of such assets
in excess of $ 100 million to $200 million; and 0.05% of such assets in excess
of $200 million. Each series pays its pro-rata portion based upon total Trust
assets. Such fees are subject to a minimum fee of $50,000 per year for one
series and $15,000 minimum per year for each additional portfolio added to a
series. For the period ended October 31,1997, RSMC's administration fees
amounted to $58,580, $42,416 and $3,974, for the International Equity Fund, the
Small Cap Equity Fund and the Fixed Income Fund, respectively. At October
31,1997, administration fees payable to RSMC amounted to $11,145, $5,687 and
$3,981, for the International Equity Fund, the Small Cap Equity Fund, and the
Fixed Income Fund, respectively.

<PAGE>

1838 INVESTMENT ADVISORS FUNDS
NOTES TO THE FINANCIAL STATEMENTS--CONTINUED OCTOBER 31, 1997
- --------------------------------------------------------------------------------

Note 4--Advisory Fee and Other Transactions with Affiliates--continued

Rodney Square Distributors, Inc. ("RSD"), a wholly owned subsidiary of WTC, has
been engaged pursuant to a Distribution Agreement with the Trust to assist in
securing purchasers for shares of each Fund. RSD also directly, or through its
affiliates, provides investor support services. RSD receives no compensation for
distribution of shares of the Funds, except for reimbursement of out-of-pocket
expenses. There are no expenses payable to RSD by the Funds for the period ended
October 31, 1997.

RSMC serves as Accounting Agent to the Funds. As Accounting Agent, RSMC
determines each Fund's net asset value per share and provides accounting
services to the Funds pursuant to an Accounting Services Agreement with the
Trust. For the period ended October 31, 1997, Accounting service fees payable to
RSMC amounted to $10,729, $6,685 and $6,575, for the International Equity Fund,
the Small Cap Equity Fund and the Fixed Income Fund, respectively.

RSMC also serves as the Fund's transfer agent pursuant to a Transfer Agency
Agreement with the Trust. For these services, RSMC receives a monthly fee
computed on the basis of the number of shareholder accounts that the Transfer
Agent maintains for each Fund during the month, and is reimbursed for
out-of-pocket expenses. For the period ended October 31, 1997, Transfer Agent
fees payable to RSMC amounted to $3,816, $3,911 and $3,000, for the
International Equity Fund, the Small Cap Equity Fund and the Fixed Income Fund,
respectively.

The Trustees of the Trust who are "interested persons" of the Trust, the
Investment Adviser or its affiliates and all personnel of the Trust or the
Investment Adviser performing services related to research, statistical and
investment activities are paid by the Investment Adviser or its affiliates.
There are no fees or expenses payable to the "noninterested" Trustees.

Note 5--Fund Share Transactions

At October 31, 1997, there were an unlimited number of shares of beneficial
interest with a $0.001 par value, authorized. The following table summarizes the
activity in shares of each Fund:

International Equity Fund

For the Fiscal Year For the Fiscal Year
Ended October 31, 1997 Ended October 31, 1996
---------------------- ----------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold .................... 891,866 $ 10,719,953 2,653,604 $ 27,246,882
Shares issued to shareholders in
reinvestment of distributions .. 12,343 133,064 7,882 78,427
Shares redeemed ................ (592,270) (7,640,741) (460,886) (4,701,462)
-------- ------------ --------- ------------
Net increase ................... 311,939 $ 3,212,276 2,200,600 $ 22,623,847
============ ============
Shares outstanding:
Beginning of period ............ 3,945,864 1,745,264
--------- ---------
End of period .................. 4,257,803 3,945,864
========= =========
</TABLE>

<PAGE>

1838 INVESTMENT ADVISORS FUNDS
NOTES TO THE FINANCIAL STATEMENTS--CONTINUED OCTOBER 31, 1997
- -------------------------------------------------------------------------------

Small Cap Equity Fund

For the Period June 17, 1996
For the Fiscal Year (Commencement of Operations)
Ended October 31, 1997 Through October 31, 1996
---------------------- ----------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold .................... 1,708,267 $ 18,663,076 596,571 $ 5,598,237
Shares issued to shareholders in
reinvestment of distributions .. 6,771 67,511 0 0
Shares redeemed ................ (70,119) (752,171) (29,602) (271,838)
--------- ------------ ------- ------------
Net increase ................... 1,644,919 $ 17,978,416 566,969 $ 5,326,399
============ ============
Shares outstanding:
Beginning of period ............ 566,969 0
--------- -------
End of period .................. 2,211,888 566,969
========= =======
</TABLE>

Fixed Income Fund

For the Period September 2, 1997
(Commencement of Operations)
Through October 31, 1997
--------------------------------
Shares Amount
------ ------
Shares sold .................... 3,209,597 $ 32,384,250

Shares issued to shareholders in
reinvestment of distributions .. 0 0
Shares redeemed ................ (40,532) (411,373)
--------- ------------
Net increase ................... 3,169,065 $ 31,972,877
============
Shares outstanding:

Beginning of period ............ 0
---------
End of period .................. 3,169,065
=========
Note 6--Commitments

As of October 31, 1997, the International Equity Fund had no forward foreign
currency exchange contracts.

<PAGE>

1838 INVESTMENT ADVISORS FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS OCTOBER 31, 1997
- --------------------------------------------------------------------------------

To the Shareholders and Board of Trustees
of the 1838 Investment Advisors Funds

We have audited the accompanying statements of assets and liabilities, including
the schedules of net assets of the 1838 International Equity Fund, the 1838
Small Cap Equity Fund and the 1838 Fixed Income Fund, each a series of the 1838
Investment Advisors Funds, as of October 31, 1997 and the related statements of
operations for the year or period then ended, and the statements of changes in
net assets for each of the two years or periods then ended, and the financial
highlights for each of the periods presented. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with custodians and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
1838 International Equity Fund, the 1838 Small Cap Equity Fund and the 1838
Fixed Income Fund as of October 31, 1997, the results of their operations for
the year or period then ended, the changes in their net assets for each of the
two years or periods then ended, and their financial highlights for the periods
presented in conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
December 12, 1997

<PAGE>

1838 INVESTMENT ADVISORS FUNDS
TAX INFORMATION (UNAUDITED) OCTOBER 31, 1997
- --------------------------------------------------------------------------------

The 1838 International Equity Fund recognizes $191,164 as foreign source
income for the fiscal year ended October 31, 1997.

The 1838 Small Cap Equity Fund paid distributions of $0.089 per share from
net long-term capital gains during the fiscal year ended October 31, 1997.
Pursuant to section 852 of the Internal Revenue Code, the 1838 Small Cap
Equity Fund designated $67,511 as capital gain distributions for the fiscal
year ended October 31, 1997.

31
<PAGE>

INVESTMENT ADVISER
- --------------------------------------------------------------------------------

1838 INVESTMENT ADVISORS, L.P.
FIVE RADNOR CORPORATE CENTER
SUITE 320
100 MATSONFORD ROAD
RADNOR, PA 19087

UNDERWRITER
- --------------------------------------------------------------------------------

RODNEY SQUARE DISTRIBUTORS, INC.
RODNEY SQUARE NORTH
1100 N. MARKET STREET
WILMINGTON, DE 19890

SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------

RODNEY SQUARE MANAGEMENT CORPORATION
RODNEY SQUARE NORTH
1100 N. MARKET STREET
WILMINGTON, DE 19890

CUSTODIANS
- --------------------------------------------------------------------------------

BANKERS TRUST COMPANY
280 PARK AVENUE
NEW YORK, NY 10017

WILMINGTON TRUST COMPANY
RODNEY SQUARE NORTH
1100 N. MARKET STREET
WILMINGTON, DE 19890

LEGAL COUNSEL
- --------------------------------------------------------------------------------

STRADLEY, RONON, STEVENS & YOUNG L.L.P.
2600 ONE COMMERCE SQUARE
PHILADELPHIA, PA 19103

AUDITORS
- --------------------------------------------------------------------------------

COOPERS & LYBRAND L.L.P.
2400 ELEVEN PENN CENTER
PHILADELPHIA, PA 19103

ET06

1838
INVESTMENT ADVISORS FUNDS

INTERNATIONAL EQUITY FUND

SMALL CAP EQUITY FUND

FIXED INCOME FUND

ANNUAL REPORT

OCTOBER 31, 1997