LAKE FOREST FUNDS
ANNUAL REPORT
FEBRUARY 28, 1998
- 1 -
<PAGE>
Lake Forest Core Equity Fund (LFCEX)
Value of a $10,000 Investment vs. S&P 500 (SPX)
CORE SPX
3/95 $10,000.00 $10,000.00
3/96 11,858.80 12,891.69
3/97 14,308.20 15,120.03
3/98 18,725.00 22,002.45
AVERAGE ANNUAL TOTAL RETURN (%)
1 YEAR 2 YEARS SINCE INCEPTION, 3/1/96
30.87 25.55 23.26
The past year was another favorable one for Lake Forest Funds and each of our
mutual fund entities. The funds performed well in receptive market conditions.
Economic activity remained strong throughout the period, despite new
uncertainties about Asian currencies. Inflation pressure has not been visible in
the national economic data, and monetary policy remains neutral. Congress has
been preoccupied, and the chronic federal budget deficit is slowly turning to
surplus. These are vintage times in the financial markets.
Lake Forest Funds has now completed three full years of operation, and each of
our funds is nationall ranked. The Lake Forest Money Market Fund has again
received recognition for its performance during the last year. The Lake Forest
Core Equity Fund's average annual total return during the year ended February
28, 1998 was 30.87 percent, reflecting the strength of the blue chip stocks.
Many large companies continue to focus their resources by spinning off secondary
activities, and we have benefitted from these actions.
Audited financial statements for the full fiscal year ended February 28th are
enclosed for your information. They include schedules of portfolio investments
and financial highlights for each fund that are prepared in accordance with
industry standards. We believe that your funds are very well positioned to
benefit from market trends during the coming year.
Irving V. Boberski
Chief Executive Officer
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<PAGE>
SCHEDULE OF INVESTMENTS
LAKE FOREST CORE EQUITY FUND
February 28, 1998
Shares Market Value
- -------------------------------------------------------------------------------
COMMON STOCKS - 90.92%
Aerospace/Defense - 7.53%
5,500 Boeing Co........................................... $ 298,375
2,500 Lockheed Martin Corp................................ 291,719
63 Raytheon Co. Cl A................................... 3,654
-----------
593,748
-----------
Autos and Trucks - 4.15%
400 Chrysler Corp....................................... 15,575
4,300 Ford Motor Co....................................... 243,219
1,000 General Motors Corp................................. 68,937
-----------
327,731
-----------
Beverages - 1.43%
1,000 Coca Cola Co........................................ 68,688
1,200 Pepsico Inc......................................... 43,875
-----------
112,563
-----------
Chemicals - 8.87%
6,000 DuPont (E.I.) De Ne Mours........................... 367,875
200 Eastman Chemical Co................................. 13,100
4,500 Monsanto Co......................................... 228,937
900 Solutia Inc......................................... 24,581
1,400 Union Carbide Corp Hldg. Co......................... 65,013
-----------
699,506
-----------
Computers-Information Tech - 0.05%
137 + NCR Corp............................................ 4,298
-----------
Computers Main Frame - 0.53%
400 International Business Machines Corp................ 41,775
-----------
Computers-Micro - 2.44%
6,000 Compaq Computer Corp................................ 192,375
-----------
Computer Software/Services - 0.86%
800 + Microsoft Corp...................................... 67,800
-----------
Cosmetics & Toiletries - 4.31%
4,000 Proctor & Gamble Co................................. 339,750
-----------
Diversified Manufacturing - 3.94%
4,000 General Electric Co................................. 311,000
-----------
Electric-Integrated - 0.85%
2,600 Houston Industries Inc.............................. 67,275
-----------
Electronics-Semiconductors - 3.27%
2,000 Intel Corp.......................................... 179,375
1,000 Motorola Inc........................................ 55,750
400 Texas Instruments Inc............................... 23,150
-----------
258,275
-----------
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<PAGE>
Shares Market Value
- -------------------------------------------------------------------------------
Financial-Banks, Commercial - 7.18%
4,000 Bank of New York Co. Inc............................ $ 234,250
3,200 Mellon Bank Corp.................................... 199,400
2,400 PNC Bank Corp....................................... 133,200
-----------
566,850
-----------
Food-Miscellaneous/Diversified - 1.08%
2,000 Kellogg Co.......................................... 85,250
-----------
Food-Processing - 1.09%
1,200 General Mills Inc................................... 86,325
-----------
Medical-Drugs - 6.55%
2,000 American Home Products Corp......................... 187,500
5,000 Lilly (Eli) & Co.................................... 329,062
-----------
516,562
-----------
Medical Products - 0.96%
1,000 Johnson & Johnson................................... 75,500
-----------
Money Center Banks - 6.52%
2,000 Bankers Trust New York Corp......................... 236,500
2,100 Citicorp............................................ 278,250
-----------
514,750
-----------
Networking Products - 4.59%
5,500 + Cisco Systems Inc................................... 362,312
-----------
Oil-Field Services - 4.78%
5,000 Schlumberger Ltd.................................... 376,875
-----------
Oil/Gas-Domestic - 0.63%
1,200 Tenneco Inc......................................... 49,350
-----------
Oil/Gas-International - 4.70%
2,000 Amoco Corp.......................................... 170,000
3,600 Texaco Inc.......................................... 200,925
-----------
370,925
-----------
Pipelines - 0.94%
1,111 El Paso Natural Gas Co.............................. 73,743
-----------
Pharmaceuticals - 2.42%
2,550 Abbott Laboratories................................. 190,772
-----------
Retail-Department Stores - 0.37%
400 + Federated Department Stores Inc..................... 18,750
200 Sears Roebuck & Co.................................. 10,613
-----------
29,363
-----------
Retail-Restaurants - 0.74%
1,000 McDonalds Corp...................................... 54,750
120 + Tricon Global Restaurants Inc....................... 3,405
-----------
58,155
-----------
Shipbuildings - 0.08%
240 Newport News Shipbuilding Inc....................... 6,540
-----------
Telecommunication Equipment - 1.91%
1,388 Lucent Technologies Inc............................. 150,424
-----------
Telephone-Long Distance - 4.63%
6,000 AT&T Corp........................................... 365,250
-----------
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<PAGE>
Shares Market Value
- -------------------------------------------------------------------------------
Tobacco - 3.52%
6,400 Phillip Morris Companies Inc........................ 278,000
-----------
TOTAL COMMON STOCKS
(Cost $5,566,664)................................. 7,173,042
-----------
SHORT-TERM DEBT - 8.83%
697,000 Federal Home Loan Bank Disc Note
5.59%, due 03/02/98
(Cost $696,892)..................................... 696,892
-----------
SHORT-TERM INVESTMENTS - 0.01%
1,060 Star Treasury Fund
(Cost $1,060)....................................... 1,060
-----------
Total Investments at Market
(Cost $6,264,616).......................... 99.76% 7,870,994
Other Assets less Liabilities.............. 0.24% 19,259
------- -----------
Total Net Assets........................... 100.00% $ 7,890,253
======= ===========
(1) Federal Tax Information: At February 28, 1998 the net unrealized
appreciation based on cost for Federal Income tax purposes
of $6,264,616 was as follows:
Aggregate gross unrealized apprecation for all
investments for which there was an excess of value
over cost............................................... $ 1,608,090
Aggregate gross unrealized deprecation for all
investments for which there was an excess of cost
over value.............................................. (1,712)
------------
Net unrealized appreciation............................. $ 1,606,378
============
+ Denotes non-income producing security
The accompanying notes are an integral part of these financial statements.
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<PAGE>
SCHEDULE OF INVESTMENTS
LAKE FOREST MONEY MARKET FUND
February 28, 1998
Shares Market Value
- -------------------------------------------------------------------------------
SHORT-TERM DEBT - 100.42%
5,355,000 Federal Home Loan Bank Disc Note
5.59%, due 03/02/98
(Cost $5,354,168).................................. $ 5,354,168
-----------
Total Investments
(Cost $5,354,168)......................... 100.42% 5,354,168
Liabilities less Other Assets............. (0.42%) (22,541)
-------- -----------
100.00% $ 5,331,627
======== ===========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
<TABLE>
<CAPTION>
LAKE FOREST FUNDS
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1998
CORE MONEY
EQUITY MARKET
----------------------- ---------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, at value
(cost $6,264,616 and $5,354,168,
respectively) (Note 2).............................. $ 7,870,994 $ 5,354,168
Receivable for fund shares sold............................. 16,009 1,988
Receivable from interest and dividends...................... 13,511 0
------------ -----------
Total Assets........................................ 7,900,514 5,356,156
------------ -----------
LIABILITIES:
Payables:
Fund shares redeemed................................ $ 2,977 $ 0
Advisory fees (Note 3).............................. 7,284 483
Dividends payable................................... 0 23,740
Other liabilities................................... 0 306
-------- --------
Total Liabilities................................... 10,261 24,529
------------ -----------
Net Assets.......................................... $ 7,890,253 $ 5,331,627
============ ===========
NET ASSETS CONSIST OF:
Additional paid in capital.......................... $ 6,270,744 $ 5,331,627
Accumulated net investment income................... 13,344 0
Accumulated net realized loss from
investment transactions........................... (213) 0
Net unrealized appreciation on
investments....................................... 1,606,378 0
------------ -----------
Net Assets.......................................... $ 7,890,253 $ 5,331,627
============ ===========
Net asset value and redemption
price per share
($7,890,253/304,718 and $5,331,627/5,331,627 shares
of capital stock outstanding, respectively)
(Note 4 ).............................................. $ 25.89 $ 1.00
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
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<PAGE>
LAKE FOREST FUNDS
STATEMENT OF OPERATIONS
For the year ended February 28, 1998
CORE MONEY
EQUITY MARKET
------------ ------------
INVESTMENT INCOME:
Dividend............................................. $ 90,378 $ 0
Interest............................................. 35,581 262,413
---------- ---------
125,959 262,413
---------- ---------
Expenses:
Advisory fee......................................... $ 59,603 $ 5,957
---------- ---------
Total expenses.................................. 59,603 5,957
---------- ---------
Net investment loss............................. 66,356 256,456
---------- ---------
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
(Note 2)
Net realized gain from investment
transactions.................................... 9 0
Net change in unrealized appreciation of
investments..................................... 1,263,635 0
---------- ---------
Net realized and unrealized gain
on investments.................................. 1,263,644 0
---------- ---------
Net increase in net assets resulting
from operations.................................$ 1,330,000 $ 256,456
=========== =========
The accompanying notes are an integral part of these financial statements
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<PAGE>
<TABLE>
<CAPTION>
LAKE FOREST CORE EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
For the year For the year
ended ended
February 28, 1998 February 28, 1997
<S> <C> <C>
Net investment income........................................ $ 66,356 $ 34,485
Net realized gain from investment transactions............... 9 946
Net change in unrealized appreciation of investments......... 1,263,635 279,662
------------ -----------
Net decrease in net assets resulting from operations......... 1,330,000 315,093
Distributions from net investment income..................... (60,371) (32,811)
Distributions from net gain on investments................... 0 (33,502)
Net capital share transactions (Note 4)...................... 4,029,033 1,327,060
------------ -----------
Net increase in net assets................................... 5,298,662 1,575,840
NET ASSETS:
Beginning of period.......................................... 2,591,591 1,015,751
------------ -----------
End of period (including undistributed investment income of
$13,344 and $7,360, respectively).......................... $ 7,890,253 $ 2,591,591
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
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<PAGE>
<TABLE>
<CAPTION>
LAKE FOREST MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
For the year For the year
ended ended
February 28, 1998 February 28, 1997
<S> <C> <C>
Net investment income........................................ $ 256,456 $ 109,783
Net realized gain from investment transactions............... 0 0
Net change in unrealized appreciation of investments......... 0 0
------------ -----------
Net decrease in net assets resulting from operations......... 256,456 109,783
Distributions from net investment income..................... (256,456) (109,783)
Net capital share transactions (Note 4)...................... 2,315,420 1,229,298
------------ -----------
Net increase in net assets................................... 2,315,420 1,229,298
NET ASSETS:
Beginning of period.......................................... 3,016,207 1,786,909
------------ -----------
End of period................................................ $ 5,331,627 $ 3,016,207
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
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<PAGE>
LAKE FOREST FUNDS
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
NOTE 1. ORGANIZATION
The Lake Forest Funds (the Trust) is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management company.
The Trust was established under the laws of Ohio by an Agreement and Declaration
of Trust dated November 23, 1994 (the Trust Agreement). The Trust Agreement
permits the Trustees to issue an unlimited number of shares of beneficial
interest of separate series without par value. Share of two series have been
authorized, which constitute the interest in Lake Forest Core Equity Fund (the
Equity Fund) and Lake Forest Money Market Fund (the Money Market Fund). The
investment objective of the Equity Fund is to provide long term capital
appreciation together with current income. The investment objective of the Money
Market Fund is to provide the highest level of current income consistent with
liquidity and security of principal.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
by the Trust in the preparation of its financial statements.
Security Valuation-Securities which are traded on any exchange or on
the NASDAQ over-the-counter market are valued at the last quoted sale price.
Lacking a last sale price, a security is valued at its last bid price except
when the last bid price does not accurately reflect the current value of the
security. All other securities for which over-the-counter market quotations are
readily available are valued at their last bid price. When market quotations are
not readily available, when it is determined that the last bid price does not
accurately reflect the current value or when restricted securities are being
valued, such securities are valued as determined in good faith by a pricing
committee, in conformity with guidelines adopted by and subject to review of the
Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotation,
but may be valued on the basis of prices furnished by a pricing service when the
Adviser believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by a pricing
committee, subject to review of the Board of Trustees. Short term investments in
fixed income securities with maturities of less than 60 days when acquired, or
which subsequently are within 60 days of maturity, are valued (except for the
Money Market Fund) by using the amortized cost method of valuation, which the
Board has determined will represent fair value.
Option Transactions-The Equity Fund may write covered put and call
options on individual securities, write covered put and call options on stock
indices traded on a securities exchange and engage in related closing
transactions. A put (call) option on a security is an agreement to buy (sell) a
particular portfolio security if the option is exercised at a specific price, on
or before a set date. An option on a stock index gives the holder the right to
receive, upon exercising the option, a cash settlement amount based on the
difference between the exercise price and the value of the underlying stock
index. To cover the potential obligations involved in these option transactions,
the Equity Fund will own the underlying equity security (for a call option);
will segregate with the custodian high grade liquid debt obligations equal to
the option exercise price (for a put option); or (for an option index) will
either hold a portfolio of stocks substantially replicating the movement of the
index or, the extent the Equity Fund does not hold such a portfolio, will
segregate with the custodian high grade liquid debt obligations equal to the
market value of the stock index option, marked to market daily. Risks associated
with writing options include the possible
- 11 -
<PAGE>
LAKE FOREST FUNDS
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
(Continued)
inability to effect closing transactions at favorable prices and an appreciation
limit on the securities set aside for settlement, as well as (in the case of an
option on a stock index) exposure to an indeterminate liability. There is no
assurance of liquidity in the secondary market for purposes of closing out
option positions. Also, the Equity Fund may purchase put and call options on
individual securities and on stock indices for the purposes of hedging against
the risk of unfavorable price movements adversely affecting the value of the
Equity Fund's securities or securities the Equity Fund intends to buy. The
Equity Fund may also sell put and call options in closing transactions.
Premiums received from put or call options written are recorded as an
asset with an equal liability which is marked-to-market daily with any
difference between the option's current market value and premiums received
recorded as an unrealized gain or loss. If the option is not exercised, premiums
received are realized as a gain at the expiration date. If the position is
closed prior to expiration, a gain or loss is realized based on premiums
received less the cost of closing the transaction. When an option is exercised,
premiums received are added to the proceeds from the sale of the underlying
securities and a gain or loss is realized accordingly.
Put and call options purchased are accounted for in the same manner as
portfolio securities. The cost of securities acquired through the exercise of
call options is increased by premiums paid. The proceeds from securities sold
through the exercise of put options are decreased by the premiums paid.
Federal Income Taxes-Each Fund intends to comply with requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its net investment income as dividends to its
shareholders. The Equity Fund intends to declare and pay dividends on a
quarterly basis, and the Money Market Fund intends to declare daily and pay
monthly. Each Fund intends to distribute its net long-term capital gains and its
net short-term capital gains at least once a year. Therefore no provision for
income taxes is required.
Other-Each Fund follows industry practice and records security
transactions on the trade date. The specific identification method is used for
determining gains or losses for financial statement and income tax purposes.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrual basis. Discounts and premiums on securities purchased are
amortized over the life of the respective securities.
Estimates-The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 3. INVESTMENT ADVISORY AGREEMENT
The Trust has an investment advisory agreement with Boberski & Company
(the Adviser). Under the terms of the management agreement, The Adviser
manages the Fund's investments subject to the supervision of the Board of
Trustees and pays all of the operating expenses of the Funds except brokerage,
taxes, interest and extraordinary expenses. The Funds are responsible for
payment of expenses incurred in connection with the organization and initial
registration of their shares. As compensation for its management services and
agreement to pay the Funds' expenses, the Funds are obligated to pay the Adviser
a fee computed and accrued daily and paid monthly at an annual rate of 1.25% of
the average daily
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<PAGE>
LAKE FOREST FUNDS
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
(Continued)
net assets of the Equity Fund and .50% of the average daily net assets of the
Money Market Fund. The Adviser has agreed to cap the fee for the Money Market
Fund at .125% at least through the fiscal year ended February 28, 1998. In this
regard, it should be noted that most investment companies pay their own
operating expenses directly, while each Funds' expenses except those specified
above are paid by the Advisor.
The Adviser may waive all or part of its fee, at any time, and at its
sole discretion, but such action shall not obligate the Adviser to waive any
fees in the future. For the year ended February 28, 1998, the Adviser has
received a fee of $59,603 from the Core Equity Fund and $5,957 from the Money
Market Fund.
NOTE 4. CAPITAL SHARE TRANSACTIONS
As of February 28, 1998 there was an unlimited number of no par value
shares of capital stock authorized for each Fund.
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Core Equity Core Equity
------------------------ ------------------------
For the year For the year
ended ended
February 28, 1998 February 28, 1997
Shares Amount Shares Amount
--------- ---------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold 199,440 $4,583,911 119,842 $2,188,004
Shares issued in reinvestment of
dividends 2,598 59,409 3,705 65,903
Shares redeemed (26,643) (614,287) (52,799) (926,847)
-------- --------- -------- ---------
Net increase 175,395 $4,029,033 70,748 $1,327,060
------- ---------- -------- ----------
Total paid in capital $6,270,744 $2,241,711
---------- ----------
</TABLE>
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<PAGE>
LAKE FOREST FUNDS
NOTES TO FINANCIAL STATEMENTS
February 28, 1998
(Continued)
<TABLE>
<CAPTION>
Money Market Money Market
------------------------ ------------------------
For the year For the year
ended ended
February 28, 1998 February 28, 1997
Shares Amount Shares Amount
--------- ---------- -------- -----------
<S> <C> <C> <C> <C>
Shares sold 12,239,025 $12,239,026 2,559,936 $2,559,936
Shares issued in reinvestment of
dividends 238,127 238,127 95,988 95,988
Shares redeemed (10,161,733) (10,161,733) (1,426,626) (1,426,626)
------------ ------------ ----------- -----------
Net increase 2,315,419 $2,315,420 1,229,298 $1,229,298
--------- ---------- --------- ----------
Total paid in capital $5,331,627 $3,016,207
---------- ----------
</TABLE>
NOTE 5. MAJOR SHAREHOLDERS
As of February 28, 1998 the Boberski family may be deemed to control
the Money Market Fund, as a result of their respective beneficial ownership of
the shares of the Funds.
NOTE 6. DISTRIBUTIONS TO SHAREHOLDERS
For the year ended February 28, 1998, the Core Equity Fund made
quarterly distributions totaling $.29, aggregating $60,372 from investment
income. For the year ended February 28, 1998, the Money Market Fund made monthly
distributions totaling $.05, aggregating $256,455 from net investment income.
NOTE 7. INVESTMENT TRANSACTIONS
Purchases and sales, excluding short term securities, for the year
ended February 28, 1998 aggregated $3,348,690 and $39 respectively for the
Equity Fund.
NOTE 8. MATTERS SUBMITTED TO VOTE OF SHAREHOLDERS
A special meeting of the shareholders of the Funds was held June 9,
1997. The meeting involved the election of Gary Patyk as a Trustee and approval
of an Amended Management Agreement with Boberski & Company. Each of the other
Trustees, Philip Hackbarth, Robert Alfe, and Irving Boberski, have terms that
continued after the meeting. The following shares were represented at the
meeting, either in person or by proxy: 76,947.908 shares of the Equity Fund, or
52.425% of the issued and outstanding shares of beneficial interest of the
Equity Fund; 3,719,236.29 shares of the Money Market Fund, or 69.912% of the
issued and outstanding shares of beneficial interest of the Money Market Fund.
Gary Patyk was elected as a Trustee with 72,943.472 shares voted for, 2,225.895
shares voted against, and 1,778.541 shares abstaining of the Equity Fund and
3,703,720.680 shares voted for, 13,515.610 shares voted against, and 2,000.000
shares abstaining of the Money Market Fund. The Amended Management Agreement was
approved with 72,704.162 shares voted for, 2,645.667 shares voted against, and
1,598.079 shares abstaining of the Equity Fund and 3,681,899.160 voted for,
33,080.860 shares voted against, and 4,256.270 abstaining of the Money Market
Fund.
- 14 -
<PAGE>
<TABLE>
<CAPTION>
LAKE FOREST CORE EQUITY FUND
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout the period)
For the year For the year For the year
ended ended ended
February 28, 1998 February 28, 1997 February 29, 1996
<S> <C> <C> <C>
Net asset value, beginning of period..................... $20.04 $17.34 $15.00
Income from investment operations
Net investment income.................................... 0.31 0.39 0.56
Net realized and unrealized gain on investments.......... 5.83 3.07 2.13
Total from investment operations......................... 6.14 3.46 2.69
Less distributions
Dividends from net investment income..................... (0.29) (0.37) (0.15)
Distribution from realized gains from security
transactions......................................... 0.00 (0.39) (0.20)
Total distributions...................................... (0.29) (0.76) (0.35)
Net asset value, end of period........................... $25.89 $20.04 $17.34
Total return............................................. 30.87% 20.65% 18.59%
Ratios/supplemental data
Net assets, end of period (in 000's)..................... $7,890 $2,592 $1,016
Ratio of expenses to average
net assets (Note 3).................................... 1.19% 1.00% 0.45%
Ratio of net investment income to
average net assets..................................... 1.32% 2.10% 3.89%
Portfolio turnover rate.................................. 0.00% 0.00% 129.77%
Average commission rate per share........................ $0.1125 $0.1307 N/A
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 15 -
<PAGE>
<TABLE>
<CAPTION>
LAKE FOREST MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
(For a fund share outstanding throughout the period)
For the year For the year For the year
ended ended ended
February 28, 1998 February 28, 1997 February 29, 1996
<S> <C> <C> <C>
Net asset value, beginning of period..................... $1.00 $1.00 $1.00
Income from investment operations
Net investment income.................................... 0.05 0.05 0.06
Net realized and unrealized gain on investments.......... 0.00 0.00 0.00
Total from investment operations......................... 0.05 0.05 0.06
Less distributions
Dividends from net investment income..................... (0.05) (0.05) (0.06)
Distribution from realized gains from security
transactions......................................... 0.00 0.00 0.00
Total distributions...................................... (0.05) (0.05) (0.06)
Net asset value, end of period........................... $1.00 $1.00 $1.00
Total return............................................. 5.51% 5.13% 5.50%
Ratios/supplemental data
Net assets, end of period (in 000's)..................... $5,332 $3,016 $1,787
Ratio of expenses to average
net assets (Note 3).................................... 0.125% 0.125% 0.08%
Ratio of net investment income to
average net assets..................................... 5.38% 5.13% 5.50%
Portfolio turnover rate.................................. 0.00% 0.00% 0.00%
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 16 -
