(JEFFERSON GROWTH & INCOME FUND LOGO)
ANNUAL REPORT
OCTOBER 31, 1996
(JEFFERSON GROWTH & INCOME FUND LOGO)
December 1996
Dear Fellow Shareholders,
On behalf of myself and the Board of Trustees, I'd like to thank the hundreds
of shareholders who joined in our inaugural year to help make the Jefferson
Growth and Income Fund a success. Since our last semi-annual report, fund assets
have increased by more than 94%, growing from $2.6 million to $5.1 million!
Although we don't expect this rate of growth to continue, we are delighted that
the fund has been so well accepted.
I am also pleased to report that since our last letter, the net asset value
of Class A shares has increased from $10.55 to $10.91 and the net asset value of
Class B shares has increased from $10.52 to $10.87 as of October 31, 1996. The
fund also paid two regular quarterly dividends of $.055 and $.076 on Class A
shares and $.039 and $.057 on Class B shares.
In the last report to shareholders, we voiced concern over two key investment
fundamentals. First, we noticed a slowdown in the growth of corporate earnings
and felt this could hurt equity valuations. Second, we pointed out a substantial
rise in long term interest rates, which could also be negative for the value of
stocks.
Since early September, interest rates have been declining from a peak of over
7.1%. With economic data pointing to a slower economy, we are now more positive
on the near term outlook for interest rates. But, corporate profits still appear
to be under pressure in many industry groups. We feel a key factor in superior
investment performance in 1997 will be avoiding negative earnings surprises.
Lower interest rates have given us the opportunity to find additional
investment candidates and expand our equity exposure to 65% from 55% at the time
of our last letter. We continue to believe that a defensive portfolio approach
is appropriate given the recent volatility of the market and the overall high
level of company valuations.
Sincerely,
/s/ Richard Imperiale
Richard Imperiale
Chairman
CLASS A - CLASS B -
DATE CLASS A NO-LOAD CLASS B VALUE LINE S&P 500 NO-LOAD
9/1/95 $9,450 $10,000 $10,000 $10,000 $10,000 $10,000
10/31/95 $9,490 $10,040 $9,530 $11,490 $12,410 $10,030
10/31/96 $10,578 $11,194 $10,682 $11,032 $12,887 $11,082
This chart assumes an initial investment of $10,000, except for the Class A
shares with a front-end sales charge, made on 9/1/95 (inception). Performance
reflects fee waivers in effect. In the absence of fee waivers, total return
would be reduced. Past performance is not predictive of future performance.
Investment return and principal value will fluctuate, so that your shares, when
redeemed, may be worth more or less than their original cost.
FOR PERIODS ENDED OCTOBER 31, 1996
SINCE INCEPTION
AVERAGE ANNUAL RATE OF RETURN % ONE YEAR 9/01/95
- ------------------------------- -------- ---------------
Jefferson Growth & Income Fund - Class A No-Load 11.5% 10.2%
Jefferson Growth & Income Fund - Class A*<F1> 5.4 4.9
Jefferson Growth & Income Fund - Class B No-Load 10.5 9.3
Jefferson Growth & Income Fund - Class B**<F2> 6.5 5.9
S&P 500 Stock Index***<F3> 24.1 24.3
Value Line Geometric Composite Average****<F4> 14.9 10.5
*<F1>Reflects maximum front-end sales charge of 5.50%.
**<F2>Reflects maximum Contingent Deferred Sales Charge (CDSC) of 4.00%
effective on redemptions after one year.
***<F3>The S&P 500 Stock Index is an index of unmanaged groups of 500 selected
common stocks, most of which are listed on the New York Stock Exchange. The
Index is heavily weighted toward stocks with large market capitalizations and
represents approximately two-thirds of the total market value of all domestic
common stocks. An investment cannot be made directly in an index.
****<F4>The Value Line Geometric Composite Average is an equally weighted price
index of approximately 1,700 NYSE, AMEX and over-the-counter stocks tracked by
the "The Value Line Investment Survey."
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1996
ASSETS:
Investments, at value (cost $5,144,929) $5,370,117
Income receivable 25,572
Receivable for securities sold 78,614
Organization costs, net of accumulated amortization 62,654
Other assets 6,376
----------
Total Assets 5,543,333
----------
LIABILITIES:
Payable to Distributor 46,685
Payable for securities purchased 344,550
Call options written, at value (Premiums received $13,208) 15,338
Accrued expenses 37,123
----------
Total Liabilities 443,696
----------
NET ASSETS $5,099,637
----------
----------
NET ASSETS CONSIST OF:
Capital stock $4,834,836
Undistributed net investment income 15,765
Undistributed accumulated net realized gains on investments 25,978
Unrealized net appreciation on investments 223,058
----------
Total Net Assets $5,099,637
----------
----------
CLASS A:
Net assets $4,687,946
Shares outstanding (unlimited number authorized) 429,499
Net asset value and redemption price per share $10.91
----------
----------
Maximum offering price per share $11.54
----------
----------
CLASS B:
Net assets $411,691
Shares outstanding (unlimited number authorized) 37,860
Net asset value and offering price per share $10.87
----------
----------
Redemption price per share, assuming maximum
contingent deferred sales charge $10.33
----------
----------
See notes to the financial statements.
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1996
INVESTMENT INCOME:
Dividend income $50,381
Interest income 75,417
---------
125,798
EXPENSES:
Investment advisory fees 18,010
Administration fees 36,538
Shareholder servicing and accounting costs 62,404
Distribution fees -- Class A 6,828
Distribution fees -- Class B 2,706
Custody fees 7,440
Federal and state registration fees 4,620
Professional fees 20,186
Reports to shareholders 7,416
Amortization of organization costs 2,925
Trustees' fees and expenses 7,003
Other 5,112
---------
Total expenses before waiver and reimbursement 181,188
Less: Waiver of expenses and reimbursement from Distributor (144,639)
---------
Net expenses 36,549
---------
NET INVESTMENT INCOME 89,249
---------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investments 25,978
Change in unrealized appreciation on investments 222,254
---------
Net gain on investments 248,232
---------
NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS $337,481
---------
---------
See notes to the financial statements.
STATEMENT OF CHANGES IN NET ASSETS
SEPTEMBER 1, 1995 1
<F5>
YEAR ENDED THROUGH
OCTOBER 31, 1996 OCTOBER 31, 1995
---------------- ----------------
OPERATIONS:
Net investment income $89,249 $5,050
Net realized gain on investments 25,978 --
Change in unrealized appreciation on investments 222,254 804
---------- ----------
Net increase in net assets resulting
from operations 337,481 5,854
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold 3,594,458 1,406,112
Shares issued to holders in reinvestment
of dividends 78,069 --
---------- ----------
3,672,527 1,406,112
Shares redeemed (243,803) --
---------- ----------
Net Increase 3,428,724 1,406,112
DISTRIBUTIONS TO SERIES A SHAREHOLDERS:
From net investment income (72,952) --
---------- ----------
DISTRIBUTIONS TO SERIES B SHAREHOLDERS:
From net investment income (5,582) --
---------- ----------
TOTAL INCREASE IN NET ASSETS 3,687,671 1,411,966
NET ASSETS:
Beginning of period 1,411,966 --
---------- ----------
End of period (including undistributed net
investment income of $15,765
and $5,050, respectively) $5,099,637 $1,411,966
---------- ----------
---------- ----------
1<F5>Commencement of operations.
See notes to the financial statements.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
SEPTEMBER 1, 1995 1<F6>
YEAR ENDED THROUGH
OCTOBER 31, 1996 OCTOBER 31, 1995
------------------ -------------------
CLASS A CLASS B CLASS A CLASS B
-------- -------- -------- -------
<S>
Per share data: <C> <C> <C> <C>
Net asset value, beginning of period $10.04 $10.03 $10.00 $10.00
Income from investment operations:
Net investment income 0.27 0.21 0.04 0.03
Net realized and unrealized gains on securities 0.87 0.83 -- --
------- ------- ------- -------
Total from investment operations 1.14 1.04 0.04 0.03
Less Distributions:
Dividends from net investment income (0.27) (0.20) -- --
------- ------- ------- -------
Net asset value, end of period $10.91 $10.87 $10.04 $10.03
------- ------- ------- -------
------- ------- ------- -------
Total Return 2<F7> 11.50% 10.49% 0.40%3<F8>0.30%3<F8>
Supplemental data and ratios:
Net assets, in thousands, end of period $4,688 $412 $1,279 $133
Ratio of net expenses to average net assets 1.15% 1.90% 1.15%4<F9>1.90%4<F9>
Ratio of net investment income to average net assets 3.03% 2.28% 3.09%4<F9>2.59%4<F9>
Portfolio turnover rate 5<F10> 131.98% 131.98% -- --
Average commission rate 6<F11> $0.0884 $0.0884 -- --
1<F6>Commencement of operations.
2<F7>The total return calculation does not reflect the 5.5% front end sales charge
for Class A or the 5% CDSC on Class B.
3<F8>Not annualized.
4<F9>Annualized.
5<F10>Calculated on the basis of the Fund as a whole without distinguishing between
the classes of shares issued. During the period ended October 31, 1995, there
were no sales of securities.
6<F11>Average commission rate disclosure not required for the period ended October
31, 1995.
See notes to the financial statements.
</TABLE>
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1996
NUMBER
OF SHARES VALUE
- --------- -----
COMMON STOCKS -- 62.3%*<F12>
APPAREL -- 3.9%*<F12>
3,000 Brown Group, Inc. $61,875
8,000 Dixie Yarns, Inc.+<F13> 40,000
10,000 Hartmarx Corporation+<F13> 46,250
8,000 Tultex Corporation+ 52,000
----------
200,125
----------
APPLIANCES -- 1.0%*<F12>
8,500 Fedders Corporation 49,938
----------
AUTO PARTS -- 1.4%*<F12>
2,700 Exide Corporation 70,200
----------
BANK & BANK HOLDING COMPANIES -- 1.7%*<F12>
1,800 KeyCorp 83,925
----------
BUSINESS SERVICES -- 2.6%*<F12>
4,000 Deluxe Corporation 130,500
----------
CHEMICALS -- 3.0%*<F12>
3,000 Rhone-Poulenc Rorer, Inc., ADR 89,250
4,000 Safety Kleen Corporation 62,500
----------
151,750
----------
CONSUMER DURABLES -- 0.8%*<F12>
1,000 Polaroid Corporation 40,625
----------
DIVERSIFIED -- 0.5%*<F12>
4,000 Hanson PLC, ADR 25,500
----------
ENERGY -- 2.4%*<F12>
3,200 Panenergy Corporation 123,200
----------
ENTERTAINMENT & LEISURE -- 1.5%*<F12>
4,700 Harveys Casinos Resorts 75,788
----------
FINANCIAL SERVICES -- 3.7%*<F12>
4,000 A.G. Edwards & Sons, Inc. 119,500
2,800 Primark Corporation+<F13> 69,650
----------
189,150
----------
FOOD, BEVERAGE & TOBACCO -- 7.4%*<F12>
3,400 American Brands, Inc. $162,350
8,000 Morningstar Group, Inc.+<F13> 135,000
2,300 Quaker Oats Company 81,650
----------
379,000
----------
INSURANCE -- 1.8%*<F12>
1,500 ITTHartford Group, Inc. 94,500
----------
LIQUOR -- 3.0%*<F12>
4,000 Anheuser-Busch Companies, Inc. 154,000
----------
MANUFACTURING -- 3.4%*<F12>
4,000 Farr Company+<F13> 69,500
2,750 Hillenbrand Industries, Inc. 101,750
----------
171,250
----------
OIL & GAS - DOMESTIC -- 4.8%*<F12>
2,500 El Paso Natural Gas Company 121,250
3,000 Phillips Petroleum Company 123,000
----------
244,250
----------
OIL & GAS - INTERNATIONAL -- 1.9%*<F12>
4,000 Occidental Petroleum Corporation 98,000
----------
PAPER & FOREST PRODUCTS -- 0.9%*<F12>
3,000 Pope & Talbot, Inc. 47,250
----------
REAL ESTATE -- 9.4%*<F12>
5,500 Burnham Pacific Properties, Inc. 68,063
2,000 Hospitality Properties Trust 52,000
9,500 Innkeepers USA Trust 111,625
1,625 Manufactured Home Communities, Inc. 31,687
2,500 National Golf Properties, Inc. 72,500
5,500 Newhall Land & Farming Company 85,938
2,500 Public Storage, Inc. 57,500
----------
479,313
----------
RETAIL - GENERAL -- 4.7%*<F12>
5,300 99 Cents Only Stores+<F13> 78,175
5,500 Pier 1 Imports, Inc. 77,000
2,500 Toys "R" Us, Inc.+<F13> 84,687
----------
239,862
----------
TELEPHONE -- 0.6%*<F12>
1,000 Century Telephone Enterprise 32,125
----------
TRAVEL & RECREATION -- 1.9%*<F12>
1,500 The Walt Disney Company 98,812
----------
Total Common Stocks
(Cost $2,949,584) 3,179,063
----------
CONVERTIBLE PREFERRED STOCKS -- 2.3%*<F12>
MANUFACTURING -- 2.3%*<F12>
4,800 Oasis Residential, Inc. Convertible Preferred 115,200
----------
Total Convertible Preferred Stock
(Cost $123,079) 115,200
----------
PRINCIPAL LONG-TERM INVESTMENTS -- 17.0%*<F12>
AMOUNT CORPORATE BONDS -- 14.2%*<F12>
- ---------
BANK & BANK HOLDING COMPANIES -- 0.5%*<F12>
$15,000 CitiCorp Notes, 8.75%, 11/01/96 15,001
10,000 Norwest Corporation, 9.25%, 5/01/97 10,171
----------
25,172
----------
CONSUMER DURABLE -- 0.4%*<F12>
20,000 BankAmerica Corp Subordinated Notes, 8.125%, 2/01/02 21,334
----------
DRUGS -- 0.3%*<F12>
15,000 Pfizer, Inc., 6.50%, 2/01/97 15,037
----------
ELECTRIC -- 3.4%*<F12>
150,000 Detroit Edison, 6.40%, 10/01/98 150,215
25,000 Ohio Power Company, 6.75%, 3/01/98 25,062
----------
175,277
----------
FINANCE COMPANY -- 6.1%*<F12>
75,000 Commonwealth Edison Company of New York, Inc.,
5.75%, 12/01/96 74,983
15,000 Ford Capital B.V., 9.125%, 5/01/98 15,646
General Motors Acceptance Corporation Medium Term Notes:
100,000 7.50%, 11/04/97 101,536
10,000 7.75%, 1/24/97 10,046
10,000 Norwest Financial, Inc., 6.50%, 11/15/97 10,066
100,000 Transamerica Financial Corporation, 7.875%, 2/15/97 100,581
----------
312,858
----------
FOOD, BEVERAGE & TOBACCO -- 1.5%*<F12>
25,000 PepsiCo, Inc., 7.00%, 11/15/96 25,009
50,000 Philip Morris Companies, Inc., 8.625%, 3/1/99 52,500
----------
77,509
----------
OIL & GAS - INTERNATIONAL -- 2.0%*<F12>
100,000 Occidental Petroleum Corporation Flat Rate Note,
6.26%, 11/04/99 100,000
----------
Total Corporate Bonds
(Cost $725,549) 727,187
----------
U.S. GOVERNMENT AGENCY -- 2.8%*<F12>
100,000 FNMA Medium Term Note, 5.23%, 11/25/98 98,749
41,844 FNMA Pass-Thru, 6.00%, 5/01/00 41,481
----------
Total U.S. Government Agency
(Cost $138,281) 140,230
----------
Total Long-Term Investments
(Cost $863,830) 867,417
----------
SHORT-TERM INVESTMENTS -- 23.7%*<F12>
U.S. GOVERNMENT -- 2.9%*<F12>
150,000 U.S. Treasury Bill, 5.17%, 11/07/96 149,877
----------
VARIABLE RATE DEMAND NOTES -- 20.8%*<F12>
FOOD -- 1.2%*<F12>
60,186 General Mills, Inc., 5.01% 60,186
----------
TECHNOLOGY -- 14.8%*<F12>
251,438 American Family, 5.02% 251,438
251,437 Johnson Controls, Inc., 5.04% 251,437
251,437 Pitney Bowes Credit Corporation, 5.02% 251,437
----------
754,312
----------
UTILITIES -- 4.8%*<F12>
244,062 Wisconsin Electric Power Company, 5.06% 244,062
----------
Total Short-Term Investments
(Cost $1,208,437) 1,208,437
----------
Total Investments -- 105.3%*<F12>
(Cost $5,144,929) 5,370,117
----------
CONTRACTS CALL OPTIONS WRITTEN (100 shares per contract) -- (0.3%)*<F12>
- ---------
30 Brown Group, Inc.
Expiration March 1997, Exercise Price $20 (5,438)
18 KeyCorp
Expiration December 1996, Exercise Price $45 (5,400)
30 Phillips Petroleum Company
Expiration November 1996, Exercise Price $40 (4,500)
----------
Total Call Options Written (15,338)
----------
Other Assets, less Liabilities -- (5.0%) (255,142)
----------
Net Assets -- 100.0% $5,099,637
----------
----------
*<F12>Calculated as a percentage of net assets.
+<F13>Non-income producing.
See notes to the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 1996
1). ORGANIZATION
The Jefferson Growth & Income Fund (the "Fund") is a mutual fund created by
The Jefferson Fund Group Trust (the "Trust") which was organized as a business
trust under the laws of Delaware on January 20, 1995. The Fund is one of a
series issued by the Trust, which is an open-end management company registered
under the Investment Company Act of 1940, as amended.
Between the date of organization and the commencement of operations on
September 1, 1995, the Fund had no operations other than incurring
organizational expenses. These costs aggregated $65,659, which were paid by
Rodman & Renshaw, Inc. and are being amortized over the period of benefit, but
not to exceed sixty months from the date the Fund commenced operations.
The Trust is authorized to issue an unlimited number of shares without par
value. The Trust has issued two classes of shares in the Fund: Class A and
Class B. The Class A shares are subject to a service organization fee of 0.25%
pursuant to Rule 12b-1 and a front-end sales charge imposed at the time of
purchase in accordance with the Fund's prospectus. The maximum front-end sales
charge is 5.50% of the offering price or 5.82% of the net asset value. The
Class B shares are subject to a service organization fee of 0.25% and
distribution fees of 0.75% pursuant to Rule 12b-1. Certain of the Class B shares
are subject to a contingent deferred sales charge (CDSC), upon redemption from
the Fund within seven years from the time of the original purchase. Each class
of shares of the Fund has identical rights and privileges.
2). SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. These policies are in
conformity with generally accepted accounting principles.
a). Investment Valuation - Securities which are traded on a national or
recognized stock exchange are valued at the last sale price on the exchange on
which such securities are principally traded. Exchange-traded securities for
which there were no transactions that day are valued at the most recent bid
prices. Securities traded on only over-the-counter markets are valued on the
basis of closing over-the-counter bid prices. Instruments with a remaining
maturity of 60 days or less are valued on an amortized cost basis. Securities
for which market quotations are not readily available, and securities which are
restricted as to resale are valued at fair value as determined by the investment
adviser under the supervision of the Board of Trustees. Portfolio securities
which are primarily traded on foreign securities exchanges are generally valued
at the preceding closing values of such securities on their respective
exchanges, except when an occurrence subsequent to the time a value was so
established is likely to have changed such value.
b). Federal Income Taxes - Provision for federal income taxes or excise taxes
has not been made since the Fund has elected to be taxed as a "regulated
investment company" and intends to distribute substantially all taxable income
to its shareholders and otherwise comply with the provisions of the Internal
Revenue Code applicable to regulated investment companies.
c). Income and Expenses - The Fund is charged for those expenses that are
directly attributable to the portfolio, such as advisory, administration and
certain shareholder service fees. Net investment income other than class
specific expenses, and realized and unrealized gains and losses are allocated
daily to each class of shares based upon the relative net asset value of
outstanding shares at the beginning of the day (after adjusting for the current
capital share activity of the respective class).
d). Distributions to Shareholders - Dividends from net investment income are
declared and paid on a calendar quarter basis. Distributions of net realized
capital gains are declared at least annually.
e). Written Option Accounting - When the Fund sells an option, an amount equal
to the premium received by the Fund is included in the Statement of Assets and
Liabilities as an asset and an equivalent liability. The amount of the liability
is subsequently marked-to-market to reflect the current value of the option
written. When an option expires on its stipulated expiration date or the Fund
enters into a closing purchase transaction, the Fund realizes a gain or loss if
the cost of the closing purchase transaction differs from the premium received
when the option was sold without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is eliminated.
When an option is exercised, the Fund realizes a gain or loss from the sale of
the underlying security, and the proceeds from such sale are increased by the
premium originally received.
f). Futures Contracts - The Fund may utilize futures contracts to a limited
extent for hedging purposes. The primary risks associated with the use of
futures contracts include an imperfect correlation between the change in market
value of the securities held by the Fund and the prices of futures contracts and
the possibility of an illiquid market. Futures contracts are valued based upon
their quoted daily settlement prices. Changes in initial settlement value are
accounted for as unrealized appreciation (depreciation) until the contracts are
terminated at which time realized gains and losses are recognized.
g). Use of 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.
h). Other - Investment and shareholder transactions are accounted for no later
than the first business day after trade date. The Fund determines the gain or
loss realized from investment transactions by comparing the original cost of the
security lot sold with the net sale proceeds. Dividend income is recognized on
the ex-dividend date and interest income is recognized on an accrual basis.
3). CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund were as follows:
CLASS A
YEAR ENDED PERIOD ENDED
OCTOBER 31, 1996 OCTOBER 31, 1995
----------------- ----------------
AMOUNT SHARES AMOUNT SHARES
------------------ -------------------
Shares sold $3,245,931 309,269 $1,273,808 127,362
Shares issued to holders in
reinvestment of dividends 72,487 6,887 -- --
---------- -------- --------- -------
3,318,418 316,156 1,273,808 127,362
Shares redeemed (148,321) (14,019) -- --
---------- -------- --------- -------
Net increase $3,170,097 302,137 $1,273,808 127,362
---------- -------- --------- -------
---------- -------- --------- -------
CLASS B
YEAR ENDED PERIOD ENDED
OCTOBER 31, 1996 OCTOBER 31, 1995
---------------- ----------------
AMOUNT SHARES AMOUNT SHARES
------------------- -----------------
Shares sold $348,527 33,239 $132,304 13,245
Shares issued to holders in
reinvestment of dividends 5,582 532 -- --
---------- -------- --------- -------
354,109 33,771 132,304 13,245
Shares redeemed (95,482) (9,156) -- --
---------- -------- --------- -------
Net increase $258,627 24,615 $132,304 13,245
---------- -------- --------- -------
---------- -------- --------- -------
4). INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Fund for the year ended October 31, 1996, were as follows:
PURCHASES SALES
--------- ------
U.S. Government $140,865 $2,673
Other $5,298,704 $2,272,497
At October 31, 1996, gross unrealized appreciation and depreciation of
investments for federal income tax purposes was as follows:
Appreciation $297,977
Depreciation (74,919)
--------
Net unrealized appreciation
on investments $223,058
--------
--------
At October 31, 1996, the cost of investments for federal income tax purposes
was $5,144,929.
Transactions in options written during the year ended October 31, 1996 were
as follows:
NUMBER
(100 SHARES
PER CONTRACT) PREMIUMS
------------- ---------
Options outstanding at beginning of year -- $--
Options written during the period 154 23,885
Options expired (40) (5,909)
Options exercised (36) (4,768)
---- -------
Options outstanding at end of year 78 $13,208
---- -------
---- -------
5). INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Trust has entered into an investment advisory agreement with Uniplan,
Inc. (the "Adviser"). Pursuant to its Advisory Agreement with the Fund, the
Adviser is entitled to receive a fee, calculated daily and payable monthly, at
the annual rate of 0.60% as applied to the Fund's daily net assets.
The Trust has entered into a distribution and servicing agreement with Rodman
& Renshaw, Inc. (the "Distributor"). The Trust has adopted a Class A Servicing
Fee plan whereby the Fund pays the Distributor servicing fees of up to 0.25%
annually, calculated as a percentage of the Fund's average daily net assets
attributable to Class A shares. Pursuant to the Class B distribution and
servicing agreement, the Fund is authorized to pay the Distributor a
distribution fee in an amount not to exceed on an annual basis 0.75% of the
average daily net assets of the Class B shares of the Fund and a service fee in
an amount not to exceed on an annual basis 0.25% of the average daily net asset
value of the Class B shares of the Fund. The Distributor may bear various
promotional and sales related expenses, including the cost of printing and
mailing prospectuses to persons other than shareholders.
Under the distribution agreement, if the aggregate annual operating expenses
(excluding interest, taxes, brokerage commissions and other costs incurred in
connection with the purchase or sale of portfolio securities, and extraordinary
items) exceed 1.15% and 1.90% of average net assets for Class A and Class B
shares respectively, the Distributor will reimburse the Fund for the amount of
such excess. Accordingly, for the year ended October 31, 1996, the Distributor
reimbursed the Fund $144,639. The Fund paid brokerage commissions of $770 to the
Distributor during the year ended October 31, 1996.
The Distributor received front-end sales charges on Class A shares and
contingent deferred sales charges on Class B shares of $3,181 and $0,
respectively, for the year ended October 31, 1996.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
The Jefferson Fund Group Trust
We have audited the accompanying statement of assets and liabilities of The
Jefferson Fund Group Trust -- Jefferson Growth and Income Fund (the "Fund"),
including the schedule of investments, as of October 31, 1996, and the related
statement of operations for the year then ended, and the statements of changes
in net assets and the financial highlights for the year then ended and for the
period from September 1, 1995 (commencement of operations) through October 31,
1995. 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, 1996 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides 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
Fund as of October 31, 1996, and the results of its operations for the year then
ended, and the changes in its net assets and the financial highlights for the
year then ended and for the period from September 1, 1995 (commencement of
operations) through October 31, 1995, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
November 22, 1996
INVESTMENT ADVISER
Uniplan, Inc.
839 N. Jefferson Street
Milwaukee, WI 53202
(800) 261-9785
ADMINISTRATOR, TRANSFER AGENT, DIVIDEND
PAYING AGENT & CUSTODIAN
Firstar Trust Company
615 E. Michigan Street
Milwaukee, WI 53202
DISTRIBUTOR
Rodman & Renshaw, Inc.
233 South Wacker Drive
Suite 4500
Chicago, IL 60606
LEGAL COUNSEL
Foley & Lardner
330 N. Wabash Avenue
Suite 3300
Chicago, IL 60611
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
411 East Wisconsin Avenue
Milwaukee, WI 53202
