A MESSAGE FROM THE UNIFIED FUNDS
Dear Shareholders,
Thank you for investing in The Unified Funds and welcome to our first
semi-annual report. For those of you who were shareholders in The Vintage Funds
we welcome you after our recent tax-free reorganization of those assets into The
Unified Funds.
The mutual fund industry continues to experience unprecedented growth and we at
The Unified Funds are dedicated to bringing you quality funds and exceptional
service. To achieve our goals we offer four separate portfolios, each with its
own investment objectives and policies.
The Unified Funds are managed by Unified Investment Advisers, Inc. ("UIA"). UIA
has retained Health Financial, Inc., to serve as sub-adviser to The First
Lexington Balanced Fund. Dr. Gregory W. Kasten remains the portfolio manager of
The First Lexington Balanced Fund. UIA manages the investment portfolios for The
Starwood Strategic Fund, The Laidlaw Fund and The Taxable Money Market Fund. Mr.
Andrew E. Beer continues as the portfolio manager of The Starwood Strategic Fund
while Mr. Jack R. Orben continues as the portfolio manager of The Laidlaw Fund
and The Taxable Money Market Fund.
In addition, The Unified Funds are particularly proud to present to you an
innovative program, V.O.I.C.E.sm (Vision for Ongoing Investment in Charity and
Education)sm . The V.O.I.C.E.sm Program provides a means by which the individual
and institutional customers of The Unified Funds can cause contributions to be
made to educational, charitable, religious and other philanthropic
"not-for-profit" organizations at no cost to the shareholder or the Fund.
One of the primary focuses of the V.O.I.C.E.sm Program is to support and
supplement education in America by funding those not-for-profit organizations,
especially endowments, foundations and general scholarship funds, which assist
our universities and colleges. At a time when educational budgets are
consistently being reduced, it is our sincerest hope that V.O.I.C.E.sm will be
just one of the many ways that we can all give "a little bit of ourselves" back
to the communities, its schools, colleges, universities and other not-for-profit
organizations.
In regards to the markets, the Federal Reserve continues to indicate by its
actions and through its publications that when the economy slows to around a 1%
annual rate, the Fed will initiate stimulative action, and when the economy
nears a 4% annual rate, the Fed will implement restraints. This "soft landing"
engineered by the Fed is maintaining the economy's gradual, non-inflationary
growth with modest productivity gains. Our long-term perspective anticipates
that the economy will continue to grow at a healthy, low-inflationary rate in a
1-4% band for several years to come, provided that the existing Fed key
personnel and its present philosophy should remain. We believe this
"steady-as-she-goes" policy at the Fed should continue to provide support for
this market in the very near term, and provide an excellent foundation and
fertile soil for long-term investments in equity markets.
As a result of the Fed's recent actions, the economy has more momentum than
would otherwise have been the case. The current expansion is now over seven
years old, and while growth has been persistent, the expansion has been one of
the slowest on record. We expect slower growth and no acceleration in inflation
as the economy moves into the second and third quarters. Slower growth and
stable inflation will make the Fed cautious in raising rates. While this
approach is likely to please the markets, it will eventually put the Fed behind
in its fight against higher prices.
<PAGE>
We continue to be in a very volatile period. During the past six months, we have
seen the turmoil from last summe's Asian economic crisis cause the U.S. stock
market to decline sharply in October only to rebound quickly. By the end of the
year, The Standard & Poor's 500 Index had recovered to produce a 20% or greater
increase for the third consecutive year for the first time in its history. By
January, the index had reached an all-time high surpassing the record set in
early October. For the six months ending March 31, 1998 the Dow Jones Industrial
Average and the Standard & Poor's 500 Index had gains of 10.76% and 16.31%
respectively. We maintain a positive long-term outlook on the stock market but
the financial markets are not a one-way street. The short-term may be volatile
at times in response to news items and mood swings of investors. The Unified
Funds are designed to provide you with options for achieving a balanced
portfolio of funds to assist you in meeting your long-term financial goals.
In closing, we want to thank you for the opportunity to serve your investment
and philanthropic interests. Your business and personal relationship is
sincerely appreciated here, and we look forward to providing the highest quality
of service to you for many years to come.
Respectfully Submitted,
Timothy L. Ashburn
President
<PAGE>
INVESTMENTS-THE STARWOOD STRATEGIC FUND
- ---------------------------------------
Statement of Net Assets March 31, 1998 (Unaudited)
Number Market
of Shares Value
--------- -----
Common Stocks - 96.50%
Aerospace/Defense - 5.25%
Allied Signal Inc. 800 $ 33,600
United Technologies 200 18,462
Airlines - 1.18%
Southwest Airlines Company 396 11,707
Conglomerates - 3.30 %
Tyco International LTD 600 32,775
Components - 2.44%
Intel Corporation 310 24,199
Computer System - 13.28 %
Cisco Systems, Inc. * 562 38,427
Electronic Data System 1,400 64,225
Hewlett-Packard Company 460 29,152
Consumer/Specialty Retail - 18.89%
CVS Corp. Common 640 48,320
G & K Services, Inc. CL A 600 26,325
Procter & Gamble Company 500 42,188
Sealed Air Corp. * 595 38,973
Sears Roebuck & Company 550 31,591
Data Telecommunication - 1.12%
Raytheon Company 190 11,091
Drugs & Health Care - 11.85%
Johnson & Johnson 172 12,610
McKesson Corp. New 740 42,735
Merck & Company, Inc. 129 16,560
Walgreen Company 1,300 45,744
Electronics - 8.99%
Arrow Electronics * 1,380 37,346
Avnet, Inc. 615 35,401
Kent Electronics * 780 16,429
*Non-income producing.
Number Market
of Shares Value
--------- -----
Entertainment - 3.93 %
Walt Disney Company 365 $ 38,964
Financial Services - 9.13%
American International Group 235 29,595
Travelers Group, Inc. 840 50,400
Wells Fargo & Company 32 10,600
Food & Beverage - 1.24%
McDonald's Corp. 205 12,300
Insurance - 7.17%
American Annuity Group 1,675 37,478
Frontier Insurance Group 1,220 33,702
<PAGE>
Media - 5.19%
Tribune Company New 730 51,465
Investment Co. - 3.54%
T Rowe Price Associates 500 35,188
Total Investments
(Identified cost $696,229) 957,552
-------
Other Assets and Liabilities, Net - 3.50% 34,722
- ----------------------------------------- ------
Net Assets - 100% $ 992,274
=========
<PAGE>
INVESTMENTS-THE LAIDLAW FUND
- ----------------------------
Statement of Net Assets March 31, 1998 (Unaudited)
Number Market
of Shares Value
--------- -----
Common Stocks - 96.59%
- ----------------------
Banks - 14.18%
Banc One Corp. 3,025 $ 191,331
Bank of New York 4,000 251,250
Chemicals - 5.98%
Air Products & Chemicals Inc. 2,250 186,469
Computer Systems - 4.97%
Hewlett-Packard Company 1,000 63,375
Sun Microsystems * 2,200 91,781
Data Telecommunication - 4.10%
Lucent Technology 1,000 127,875
Delivery Services - 4.56%
Federal Express * 2,000 142,250
Drugs & Health Care - 4.53%
Merck & Company, Inc. 1,100 141,213
Electronics - 3.73%
Hubbel Inc. "B" 2,310 116,366
Food & Beverage - 6.75%
Bestfoods 700 81,813
CPC International* 175 6,278
H. J. Heinz Company 2,100 122,588
Household Products - 5.49%
Clorox Company 2,000 171,375
Information Systems - 3.58%
Knight-Ridder 2,000 111,750
Insurance - 7.25%
Allstate Corp. 1,390 127,793
Cigna Corp. 480 98,400
* Non-income producing.
Number Market
of Shares Value
--------- -----
Investment Companies - 4.21%
A. G. Edwards Inc. 3,000 $ 131,250
Office Products - 7.54%
Bemis Company Inc. 1,500 67,688
Herman Miller Inc. 5,000 167,656
Oil & Natural Gas - 11.12%
Amoco Corp. 2,000 172,750
Apache Corp. 2,300 84,525
Pacific Enterprise 2,200 89,787
Pharmaceutical - 3.46%
Pharmacia & Upjohn Company 2,465 107,844
Retail - 2.76%
Sears Roebuck & Company 1,500 86,156
Steel - 2.38%
Timken Company 2,200 74,387
Total Common Stocks
(Cost $1,293,148) 3,013,950
Repurchase Agreements - 2.89%
Star Bank ($90,000 GNMA II GTD 8057, 9/22/22)
Purchase Date 3/31/98, Maturity Date 04/01/98,
Amount Payable at Maturity $90,013
Total Repurchase Agreements
(Cost $90,000) 90,000
------
Total Investments
(Identified cost $1,383,147) 3,103,950
---------
Other Assets and Liabilities, Net - 0.52% 16,345
------
Net Assets - 100% $ 3,120,295
===========
<PAGE>
INVESTMENTS-THE FIRST LEXINGTON BALANCED FUND
- ---------------------------------------------
Statement of Net Assets March 31, 1998 (Unaudited)
<TABLE>
<S> <C> <C>
Number Market
of Shares Value
--------- -----
Mutual Funds - 89.56%
- ---------------------
Vanguard Index Trust 500 Portfolio 6,512 $ 665,642
Vanguard Extended Market Portfolio 31,978 1,085,667
Vanguard GNMA Fund 110,595 1,152,398
Vanguard International Growth 60,389 1,117,188
Vanguard Specialized Real Estate Index Fund 67,881 949,658
Vanguard Total Bond Market Index 115,318 1,163,555
Total Mutual Funds
(Cost $5,795,808) 6,134,108
---------- ---------
Repurchase Agreements - 9.87%
Star Bank ($680,000 GNMA II GTD 8057, 9/22/22)
Purchase Date 3/31/98, Maturity Date 04/01/98,
Amount Payable at Maturity $676,094
Total Repurchase Agreements
(Cost $676,000) 676,000
-------
Total Investments
(Identified cost $6,471,808) 6,810,108
---------
Other Assets and Liabilities, Net - 0.57% 39,342
------
Net Assets - 100% $6,849,450
==========
</TABLE>
<TABLE>
<S> <C> <C>
<PAGE>
INVESTMENTS-THE TAXABLE MONEY MARKET FUND
- -----------------------------------------
Statement of Net Assets March 31, 1998 (Unaudited)
Par Value Value (Note 2)
--------- --------------
Commercial Paper - 29.10%
- -------------------------
AT & T Corporation 5.58%, 04/30/1998 $2,000,000 $1,991,010
Disney Walt Company 5.33%, 06/04/1998 2,000,000 1,980,972
Ford Motor Credit Corporation 5.47%, 04/27/1998 2,000,000 1,992,099
General Electric Capital Corporation 5.41%, 04/03/1998 1,000,000 998,901
General Electric Capital Corporation 5.65%, 04/08/1998 1,000,000 999,700
General Motors Credit Corporation 5.42%, 05/29/1998 2,000,000 1,982,535
IBM Credit Corporation 5.34%, 06/08/1998 2,000,000 1,979,827
Merrill Lynch 5.47%, 07/31/98 2,000,000 1,963,229
Total Commercial Paper
(Cost $13,888,273) 13,888,273
----------
</TABLE>
<TABLE>
<S> <C> <C>
U.S. Government Securities - 61.27%
- -----------------------------------
Federal Home Loan Bank 5.54%, 04/06/1998 1,000,000 999,231
Federal Home Loan Discount Note 5.31%, 04/20/1998 1,000,000 997,198
Federal Home Loan Mortgage 5.32%, 05/06/1998 2,000,000 1,989,656
Federal National Mortgage Association 5.59%, 04/13/1998 1,000,000 998,137
Federal National Mortgage Association 5.41%, 04/27/1998 2,000,000 1,992,242
Federal National Mortgage Association 5.55%, 05/05/1998 1,025,000 1,019,627
Federal National Mortgage Association 5.40%, 05/11/1998 2,000,000 1,988,000
Federal National Mortgage Association 5.52%, 05/18/1998 2,500,000 2,481,983
Federal National Mortgage Association 5.52%, 05/19/1998 2,500,000 2,481,600
Federal National Mortgage Association 5.29%, 05/29/1998 2,000,000 1,982,955
Federal National Mortgage Association 5.42%, 06/03/1998 4,000,000 3,962,060
Federal National Mortgage Association 5.26%, 06/23/1998 2,000,000 1,975,745
Federal National Mortgage Association 5.26%, 06/24/1998 1,500,000 1,481,590
Federal National Mortgage Association 5.27%, 06/29/1998 1,000,000 986,971
Federal National Mortgage Association 5.26%, 07/24/1998 1,000,000 983,343
Federal National Mortgage Association 5.29%, 09/17/1998 3,000,000 2,925,499
Total U.S. Government Securities
(Cost $29,245,837) 29,245,837
----------
</TABLE>
<TABLE>
<S> <C> <C>
Repurchase Agreements - 9.43%
- -----------------------------
Star Bank ($4,495,000 GNMA II GTD 8057 09/22/22)
Purchase Date 03/31/98, Maturity Date 04/01/98,
Amount payable at Maturity $4,500,625
Total Repurchase Agreements
(Cost $4,500,000) 4,500,000
Total Investments
(Amortized cost $47,634,110) 47,634,110
Other Assets and Liabilities, Net - 0.20%
97,826
Net Assets - 100% $ 47,731,936
============
</TABLE>
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- ------------------------------------
As of March 31, 1998 (Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
First Taxable
Starwood Lexington Money
Strategic Laidlaw Balanced Market
Fund Fund Fund Fund
---- ---- ---- ----
ASSETS
Investments, at value (Note 2) ........ $ 957,552 $ 3,103,950 $ 6,810,108 $ 47,634,110
Cash ................................. --- 1,440 2,131 311,131
Dividend receivable ................... 652 4,822 34,174 ---
Interest receivable ................ --- 13 94 625
Receivable for Investments sold........ 24,439 --- --- ---
Receivable from adviser ............. 10,455 10,698 12,356 73,903
Receivable for shares sold............. --- --- --- 215,861
-------- ------- ------ -------
Total assets .......................... 993,098 3,120,923 6,858,863 48,235,630
------- --------- --------- ----------
LIABILITIES
Cash overdraft......................... 617 --- --- ---
Dividends payable ..................... --- --- --- 167,131
Payable for shares redeemed .......... --- --- 8,037 326,446
Accrued expenses (Note 2).............. 207 628 1,376 10,117
- --- --- ----- ------
Total liabilities...................... 824 628 9,413 503,694
--- --- ----- -------
NET ASSETS ................................. $ 992,274 $ 3,120,295 $ 6,849,450 $ 47,731,936
============= =========== =========== ============
Net assets consist of:
Paid-in capital ....................... 740,139 1,354,124 6,511,147 47,731,936
Undistributed net realized gain (loss)
on investments ........................ (9,188) 45,368 3 ---
Net unrealized appreciation in
value of investments ................ 261,323 1,720,803 338,300 ---
Net assets ................................. $ 992,274 $ 3,120,295 $ 6,849,450 $ 47,731,936
============== =========== =========== ============
Shares of capital stock
outstanding (no par value,
unlimited shares authorized)........... 98,319 1,426,148 606,252 47,731,936
Net asset value per share, offering
and redemption price .................. $ 10.09 $ 2.19 $ 11.30 $ 1.00
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
STATEMENTS OF OPERATIONS
- ------------------------
For the period ended March 31, 1998 (Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
First Taxable
Starwood Lexington Money
Strategic Laidlaw Balanced Market
Fund Fund Fund Fund
---- ---- ---- ----
INVESTMENT INCOME
Income:
Interest .............................. $ 1,071 $ 677 $ 15,362 $ 1,348,309
Dividends ............................. 4,171 23,384 213,398 ---
Total net income ................. 5,242 24,061 228,760 1,348,309
EXPENSES:
Investment adviser fees (Note 3) ...... 4,810 12,957 17,473 154,612
Transfer agent fees (Note 3) .......... 256 629 478 4,211
Fund accounting fees .................. 256 629 478 4,211
Printing. ............................ 161 407 1,152 10,763
Administrative service fees ........... 1,136 2,795 2,583 22,742
12b-1 fees (Note 3) ................... 769 2,473 277
12B-1 fees (Note 3).................... 536 1,409 2,967 24,669
Auditing fees ......................... --- --- 628 1,275
Legal fees ............................ 798 2,068 4,843 37,355
Trustee's fees ........................ 231 1,104 2,533 19,534
Custodian fees ........................ 508 2,003 178
Custodian fees......................... 238 585 763 9,546
Registration and filing fees .......... 4,778 4,707 2,506 25,622
Postage ............................... 345 739 1,741 11,910
Servicing fees ........................ 1,158 3,716 415
Servicing.............................. 804 2,114 4,451 37,003
Amortization of organization expenses . 2,266 2,266 2,266 2,273
Insurance ............................. 995 878 799 592
Other expenses ........................ 1,877 1,647 --- 1,092
----- ----- -----
Total net expenses..................... 19,487 34,934 45,661 367,410
------ ------ ------ -------
Less: Expense reimbursement
from adviser (Note 3) ................. 11,488 13,840 16,486 110,301
------ ------ ------ -------
NET INVESTMENT INCOME (LOSS) ............... (2,757) 2,967 199,585 1,091,200
------ ----- ------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on investments 2,530 45,368 3 ---
Change in net unrealized
appreciation of investments ...... 75,016 287,528 194,756 ---
------ ------- ------- ------
Net gain (loss) on investments ........ 77,546 332,896 194,759 ---
------ ------- ------- ------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ............. $ 74,789 $ 335,863 $ 394,344 $ 1,091,200
============ ========== =========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Starwood Strategic Fund Laidlaw Fund
----------------------- ------------
Six Months Year Six Months Year
Ended Ended Ended Ended
Mar 31, Sept 30, Mar 31, Sept 30,
1998 1997 1998 1997
---- ---- ---- ----
(Unauditied) (Unaudited)
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ...................$ (2,757) $ (9,701) $ 2,967 $ 335
Net realized gain (loss) on investments ........ 2,530 16,241 45,368 453,387
Change in net unrealized appreciation of investments 75,016 166,805 287,528 1,433,275
------ ------- ------- ---------
Net Increase (Decrease) in net assets resulting
from operations 74,789 173,345 335,863 1,886,997
Dividends and distributions to shareholders from:
Net realized gains ................................ --- (16,240) (15) (453,372)
Net investment Income ................... --- --- --- (325)
------ -------- ------- ---------
TOTAL INCREASE (DECREASE) ...................... 74,789 157,105 335,848 1,433,300
Capital share transactions:
Proceeds from shares sold ...................... 62,825 656,554 60,820 230,238
Value of shares issued to shareholders in
reinvestment of dividends and distributions --- 16,240 19 379,474
------- ------ ------ -------
62,825 672,794 60,839 609,712
Cost of shares redeemed .......................... (282,326) (176,371) (196,734) (2,435,409)
Net increase in net assets resulting from
capital share transactions ................ (219,501) 496,423 (135,895) (1,825,697)
TOTAL INCREASE (DECREASE) IN NET ASSETS........ (144,712) 653,528 199,953 (392,397)
NET ASSETS:
Beginning of period ............................ 1,136,986 483,458 2,920,342 3,312,739
--------- ------- --------- ---------
End of period including undistributed
(net investment income/net investment loss).... $ 992,274 $ 1,136,986 $ 3,120,295 $ 2,920,342
============= ============= =========== ===========
Shares of capital stock of the Fund sold and redeemed:
Shares sold .................................... 6,753 78,146 32,010 119,583
Shares issued to shareholders in reinvestment
Shares issued to shareholders in reinvestment
dividends and distributions .................... --- 1,746 2 194,104
------ ----- ------- -------
6,753 79,892 32,012 313,687
Shares redeemed (696) (17,534) (16,956)
Shares redeemed................................. (30,654) (20,510) (99,401) (730,418)
------- ------- ------- --------
NET INCREASE (DECREASE) IN NUMBER OF
SHARES OUTSTANDING ............................. (23,901) 59,382 (67,389) ( 416,731)
======= ====== ======= ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<S> <C> <C> <C> <C>
First Lexington Taxable Money
Balanced Fund Market Fund
Six Months Year Six Months Year
Ended Ended Ended Ended
Mar 31, Sept 30, Mar 31, Sept 30,
1998 1997 1998 1997
---- ---- ---- ----
(Unaudited) (Unaudited)
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ...................$ 199,585 $ 8,756 $ 1,091,200 $ 2,075,516
Net realized gain (loss) on investments ........ 3 4,095 --- ---
Change in net unrealized appreciation of investment 194,756 143,544 --- ---
------- ------- -------- --------
Net Increase(Decrease) in net assets resulting
from operations 394,344 156,395 1,091,200 2,075,516
Dividends and distributions to shareholders from
Net realized gains.............................. --- (4,092) --- ---
Net investment income .......................... (200,310) (7,412) (1,091,200) (2,075,516)
-------- ------ ---------- ----------
TOTAL INCREASE (DECREASE)............................ 194,034 144,891 --- ---
Capital share transactions:
Proceeds from shares sold ...................... 3,708,609 3,006,501 82,509,259 146,134,876
Value of shares issued to shareholders in
reinvestment of dividends and distributions 200,225 11,504 922,288 2,224,498
------- ------ ------- ---------
3,908,834 3,018,005 83,431,547 148,359,374
Cost of shares redeemed ............................ (317,929) (107,373) (86,319,321) (148,284,175)
-------- -------- ----------- ------------
Net increase in net assets resulting from
Net increase in net assets resulting from
capital share transactions ................ 3,590,905 2,910,632 (2,887,774) 75,199
--------- --------- ---------- ------
TOTAL INCREASE (DECREASE) IN NET ASSETS ............ 3,784,939 3,055,523 (2,887,774) 75,199
NET ASSETS:
Beginning of period ............................ 3,064,511 8,988 50,619,710 50,544,511
--------- ----- ---------- ----------
End of period (including undistributed net
investment income/net investment loss) ... $ 6,849,450 $ 3,064,511 $ 47,731,936 $ 50,619,710
============= ============== ============ ============
Shares of capital stock of the Fund sold and redeemed:
Shares sold .................................... 338,634 301,698 82,509,259 146,134,876
Shares issued to shareholders in reinvestment
dividends and distributions ............... 18,368 1,045 922,288 2,224,498
357,002 302,743 83,431,547 148,359,374
------- ------- ---------- -----------
Shares redeemed ................................ (29,078) (32,342) (86,319,321) (148,284,175)
------- ------- ----------- ------------
NET INCREASE (DECREASE)IN NUMBER OF
SHARES OUTSTANDING ............................. 327,924 270,401 ( 2,887,774) 75,199
======= ======= = ========= ======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------
The following table includes selected data for a share outstanding throughout
each fiscal year or period and other performance information derived from the
financial statements.
<TABLE>
<S> <C> <C> <C> <C>
Starwood Starwood Starwood Starwood
Strategic Strategic Strategic Strategic
Fund Fund Fund Fund
---- ---- ---- ----
1998(a) 1997 1996 1995(b)
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning .... $ 9.30 $7.69 $10.00 $ 10.00
Income from investment
Operations:
Net investment income .... (0.02) (0.26) (3.23) 0.00
Net realized and unrealized
gain (loss) on investments 0.81 2.00 0.92 0.00
---- ---- ---- ----
Total from investment income .. 0.79 1.74 (2.31) 0.00
Less distributions:
Dividends from realized gains 0.00 (0.13) 0.00 0.00
Dividends from net
investment income ........ 0.00 0.00 0.00 0.00
---- ---- ---- ----
Total from distributions ...... 0.00 (0.13) 0.00 0.00
---- ----- ---- ----
Net asset value at end of period $ 10.09 $ 9.30 $7.69 $10.00
======= ====== ===== ======
TOTAL ANNUALIZED
RETURN (%) (e)............ 17.76 20.94 (3.97)(d) (c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period 992,274 1,136,986 483,458 2,705
Ratio of expenses to
average net assets .. 3.41% 4.26% 15.99% 0.00%
Ratio of expenses (after
reimbursement) to
average net assets .. 1.50% 2.54% 15.25% 0.00%
Ratio of net investment
ncome to average net assets (2.43)% (2.97)% 14.42)% 0.00%
Ratio of net investment
income (after reimbursement)
to average net assets (0.52)% (1.25)% (13.68)% 0.00%
Portfolio turnover........ 9.38% 76.09% 169.83% 0.00%
Average commission rate paid.. $ 0.0600 $ 0.0603 $ 0.0600 $ ---
(a) For the Six Months-Ended March 31, 1998.
(b) For the Period June 2, 1995 (commencement of operations) to September 30, 1995.
(c) Investment in accordance with objective had not commenced at this time.
(d) For the period April 4,1996 (commencement of investment in accordance with objective) to September 30,1996.
(e) Total return would have been lower had certain expenses not been reduced during the periods shown (see Note 3).
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------
The following table includes selected data for a share outstanding throughout
each fiscal year or period and other performance information derived from the
financial statements.
<TABLE>
<S> <C> <C> <C> <C>
First First Municipal Municipal
Lexington Lexington Fixed Fixed
Balanced Balanced Income Income
Fund Fund Fund Fund
---- ---- ---- ----
1998(a) 1997(f) 1996 1995(b)
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning .... $ 11.01 $ 22.60(g) $200.00(g) $200.00(g)
Income from investment
Operations:
Net investment income .... 0.34 (12.54) (177.40) 0.00
Net realized and unrealized
gain (loss) on investments 0.29 .99 0.00 0.00
---- --- ---- ----
Total from investment income .. 0.63 (11.55) (177.40) 0.00
Less distributions:
Dividends from realized gains 0.00 (0.01) 0.00 0.00
Dividends from net
investment income ........ (0.34) (0.03) 0.00 0.00
----- ----- ---- ----
Total from distributions ...... (0.34) (0.04) 0.00 0.00
----- ----- ---- ----
Net asset value at end of period $ 11.30 $11.01 $ 22.60 $200.00
======= ====== ========= =======
TOTAL ANNUALIZED
RETURN (%) (e)............ 12.17 18.54(d) (c) (c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period 6,849,450 3,064,511 8,988 100
Ratio of expenses to
average net assets .. 1.53% 3.06% 181.72% 0.00%
Ratio of expenses (after
reimbursement) to
average net assets .. 1.00% 2.35% 181.01% 0.00%
Ratio of net investment
Income to average
net assets 6.15% 0.30% (181.58)% 0.00%
Ratio of net investment
income (after
reimbursement) to
average net assets.... 6.71% 1.01% (180.86)% 0.00%
Portfolio turnover........ 0.00% 6.60% 0.00% 0.00%
Average commission rate paid.$ 0.0000 $ 0.0000 $ 0.0000 $ ---
(a) For the Six Months-Ended March 31, 1998.
(b) For the Period June 2, 1995 (commencement of operations) to September 30, 1995.
(c) Investment in accordance with objective had not commenced at this time.
(d) For the period March 13, 1997 (commencement of investment in accordance with objective) to September 30,
1997.
(e) Total return would have been lower had certain expenses not been reduced during the periods shown (see Note
3).
(f) The name of the fund was changed during the period (see note 1).
(g) Beginning balance adjusted for reverse stock split (see Note 1)
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------
The following table includes selected data for a share outstanding throughout
each fiscal year or period and other performance information derived from the
financial statements.
Laidlaw
Laidlaw Laidlaw Covenant
Fund Fund Fund
---- ---- ----
1998(a) 1997(b)(e) 1996(e)(c)
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning .... $ 1.96 $ 1.77 $1.78
Income from investment
Operations:
Net investment income .... 0.00 0.00 0.00
Net realized and unrealized
gain (loss) on investments 0.23 0.68 0.08
---- ---- ----
Total from investment income . 0.23 0.68 0.08
Less distributions:
Dividends from net
investment income ... 0.00 0.00 0.00
Net realized gains........ 0.00 (0.49) (0.09)
---- ----- -----
Total from distributions ...... 0.00 (0.49) (0.09)
Net asset value at end of period $ 2.19 $1.96 $1.77
====== ===== =====
TOTAL ANNUALIZED
RETURN (%) (d)............ 24.92 40.40 6.19
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period 3,120,295 2,920,342 3,313,000
Ratio of expenses to
average net assets .. 2.44% 3.25% 4.81%
Ratio of expenses (after
reimbursement) to
average net assets .. 1.50% 1.89% 2.44%
Ratio of net investment
Income to average net
assets (0.76)% (1.35)% (2.09)%
Ratio of net investment
income (after
reimbursement)
to average net assets 0.21% 0.01% (0.28)%
Portfolio turnover ....... 0.00% 58.44% 5.92%
Average commission rate paid $ 0.0600 $0.0618 $0.0100
(a) For the Six Months-Ended March 31, 1998.
(b) The name of the fund was changed during the period (see Note 1).
(c) For the Nine Months Ended September 30, 1996.
(d) Total return would have been lower had certain expenses not been reduced
during the periods shown (see Note 3).
(e) Per share data adjusted for share conversion 8.41 to 1.
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------
The following table includes selected data for a share outstanding throughout
each fiscal year or period and other performance information derived from the
financial statements.
<TABLE>
<S> <C> <C> <C> <C>
Laidlaw Laidlaw Laidlaw Laidlaw
Covenant Covenant Covenant Covenant
Fund Fund Fund Fund
---- ---- ---- ----
1995(c) 1994(c) 1993(c) 1992(a)(c)
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning .... $1.54 $1.54 $1.49 $1.42
Income from investment
Operations:
Net investment income .... 0.00 0.00 0.00 0.01
Net realized and unrealized
gain (loss) on investments 0.45 0.04 0.06 0.12
Total from investment income . 0.45 0.04 0.06 0.13
Less distributions:
Dividends from net
investment income ... 0.00 0.00 0.00 (0.01)
Net realized gains........ (0.21) (0.04) (0.01) (0.05)
----- ----- ----- -----
Total from distributions ...... (0.21) (0.04) (0.01) (0.06)
----- ----- ----- -----
Net asset value at end of period $1.78 $1.54 $1.54 $1.49
===== ===== ===== =====
TOTAL ANNUALIZED
RETURN (%) (b)............ 29.59 2.86 4.06 11.20
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period 4,497,000 4,381,000 4,996,000 4,284,000
Ratio of expenses to
average net assets .. 4.57% 5.20% 5.80% 7.09%
Ratio of expenses (after
reimbursement) to
average net assets .. 2.50% 2.50% 2.50% 2.50%
Ratio of net investment
Income to average net
assets (2.10)% (2.57)% (3.16)% (3.90)%
Ratio of net investment
income (after
reimbursement)
to average net assets 0.02% 0.11% 0.16% 0.69%
Portfolio turnover ....... 61.00% 73.00% 107.00% 128.00%
Average commission rate paid $ --- $ --- $ --- $ ---
(a) For the Period March 3, 1992 (commencement of operations) to December 31, 1992.
(b) Total return would have been lower had certain expenses not been reduced during the periods shown (see Note 3).
(c) Per share data adjusted for share conversion 8.41 to 1.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------
The following table includes selected data for a share outstanding throughout
each fiscal year or period and other performance information derived from the
financial statements.
<TABLE>
<S> <C> <C> <C> <C>
Taxable Taxable Taxable Taxable
Money Money Money Money
Market Market Market Market
Fund Fund Fund Fund
---- ---- ---- ----
1998(a) 1997 1996 1995(b)
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning .... $1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
Operations:
Net investment income .... 0.02 0.03 0.04 0.002
Net realized and unrealized
gain (loss) on investments 0.00 0.00 0.00 0.000
Total from investment income . 0.02 0.03 0.04 0.002
Less Distribution :
Dividends from net
investment income ... (0.02) (0.03) (0.04) (0.002)
----- ----- ----- ------
Total from distributions ...... 0.00 (0.03) (0.04) (0.002)
---- ----- ----- ------
Net asset value at end of period $1.00 $ 1.00 $ 1.00 $ 1.00
----- -------- -------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period 47,731,936 50,619,710 50,544,511 1,230,385
Ratio of expenses to
average net assets .. 1.47% 1.44% 1.25% 12.82%
Ratio of expenses (after
reimbursement) to
average net assets .. 1.05% 1.12% 1.16% 0.47%
Ratio of net investment
Income to average net
assets 3.92% 3.86% 4.12% (11.94%)
Ratio of net investment
income (after reimbursement)
to average net assets 4.36% 4.19% 4.21% 0.65%
Portfolio turnover ....... 0.00% 0.00% 0.00% 0.00%
Average commission rate paid $--- $ ---- $ ---- $ ----
(a) For the Six Months-Ended March 31, 1998.
(b) For the Period June 2, 1995 (commencement of operations) to September 30, 1995.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note 1 - General
The Unified Funds (the "Trust") is an Ohio business trust authorized to offer
separate classes and sub-classes of beneficial interest. The Trust, which was
organized on November 20,1997, is the successor to the operations of the Vintage
Funds. The Trust is a series company composed of four no-load funds (the
"Funds") including The Starwood Strategic Fund, The Laidlaw Fund, The First
Lexington Balanced Fund, and The Taxable Money Market Fund.
The Starwood Strategic Fund seeks growth of capital. The Fund pursues this
objective by investing principally in a diversified portfolio of equity
securities of seasoned, financially strong growth companies.
The Laidlaw Fund seeks growth of capital, current income and growth of income.
The Fund pursues this objective by investing principally in a diversified
portfolio of common stock, preferred stocks and securities convertible into
common stock of socially conscious companies that offer the prospect for growth
of earnings while paying current dividends.
The First Lexington Balanced Fund seeks long term growth of capital and current
income. The Fund pursues this objective by investing principally in a
diversified portfolio of other no-load mutual funds selected from six major
financial assets classes.
The Taxable Money Market Fund seeks high level of current income consistent with
the preservation of capital and maintenance of liquidity. The Fund pursues this
objective by investing principally in a diversified portfolio of short-term
money market instruments.
On December 20, 1996 the Fiduciary Value Fund changed its name to The Laidlaw
Fund and acquired the assets of The Laidlaw Covenant Fund. The acquisition
consisted of the transfer of all the assets and liabilities of The Laidlaw
Covenant Fund in exchange for shares of the Fiduciary Value Fund and the
distribution of such shares to the shareholders of The Laidlaw Covenant Fund in
liquidation of The Laidlaw Covenant Fund.
On February 1, 1997 The Municipal Fixed Income Fund changed its name to The
First Lexington Balanced Fund. In addition to the name change, the Fund changed
its policy and sub-adviser. On March 6, 1997, The First Lexington Balanced Fund
exercised a 1 for 20 reverse stock split.
Note 2 - Significant Accounting Policies
The following is a summary of the significant accounting policies followed by
the Trust in the preparation of its financial statements.
A) Security Valuations
Portfolio securities owned by a Fund and listed or traded on any national
securities exchange are valued on the basis of the last sale on such exchange
each day the exchange is open for business. Securities not listed on an exchange
or national securities market, or securities in which there were no
transactions, are valued at the average of the most recently reported bid and
asked prices. Bid price is used when no asked price is available. Options are
valued at the last sales price on an exchange. Options for which there were no
transactions are valued at the average of the most recently reported bid and
asked prices. Money market instruments (certificates of deposit, commercial
paper, etc.) are valued at amortized cost if not materially different from
market value.
B) Securities Transactions
Securities transactions are recorded on a trade date-plus-one basis. Realized
gains and losses from securities transactions are recorded on the identified
cost basis. For federal income tax purposes, the cost of investments owned on
March 31,1998 were the same as identified cost. As of March 31, 1998 the
composition of unrealized appreciation (the excess of value over tax cost) and
depreciation (the excess of tax cost over value) was as follows:
<PAGE>
Net Appreciation
Fund Appreciation Depreciation (Depreciation)
---- ------------ ------------ --------------
Starwood Strategic $ 278,429 $ (17,107) $ 261,323
First Lexington Balanced 338,300 --- 338,300
Laidlaw Fund 1,720,803 --- 1,720,803
C) Dividends and Distributions to Shareholders
Dividends, if any, from net investment income for The Starwood Strategic Fund,
The Laidlaw Fund, and The First Lexington Balanced Fund are paid quarterly.
Dividends, if any, from net investment income for The Taxable Money Market Fund
are paid on a daily basis. Net realized long term capital gains, if any, are
paid at least annually for each Fund. However, to the extent that net realized
gains of any Fund could be reduced by any capital loss carry-overs from the
Fund, such gains will not be distributed. Dividend distributions are recorded on
the ex-dividend date.
D) Federal Income Taxes
It is the policy of each Fund to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders.
E) Expenses
Direct expenses of each Fund are charged to the applicable Fund. Any general
expenses of the Trust not readily identifiable as belonging to a particular
series are allocated by or under the direction of the Trustees in such manner as
the Trustees determine to be fair and equitable.
Organizational costs and initial registration fees represent costs incurred in
connection with the organization, registration and the initial public offering
of the shares of the Trust and its Funds. Organizational costs and initial
registration fees are deferred and will be amortized on a straight-line basis
over five years. In the event that the original shareholders (or any subsequent
transferee) redeems any of its original capital (seed capital) prior to these
organizational costs and initial registration fees being fully amortized, the
redemption proceeds will be reduced by a pro-rata portion of any then
unamortized organizational costs and initial registration fees. Organizational
costs and initial registration fees incurred were allocated accordingly to each
of the four Funds prior to the commencement of operations.
On February 2, 1998, The Adviser assumed the unamortized balance of organization
and registration fees in each Fund. The Adviser also pays all of the operating
expenses of the Unified Funds except servicing fees, brokerage fees, taxes,
interest, 12b-1 fees and extraordinary expenses.
F) Estimates
Preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
G) Repurchase Agreement
Under the terms of a typical repurchase agreement, a Fund writes a financial
contract with counterparty and takes possession of a government debt obligation
as collateral. The Fund also agrees with the counterparty to allow the
counterparty to repurchase the financial contract at a specific date and price,
thereby determining the yield during the Fund's holding period. This arrangement
will result in a fixed-rate of return not subject to the market's fluctuation
during the holding period indicated in the contract. The value of the collateral
is at least equal to the total amount of the repurchase obligation, including
interest. In the event of default by the counterparty, a Fund has the right to
use the collateral to offset any losses incurred.
<PAGE>
H) Investments
Interest income is recorded on the accrual basis and dividend income is recorded
on the ex-dividend date.
Note 3 - Agreements and Other Transactions with Affiliates
The Trust has entered into an Investment Advisory Agreement with Unified
Investment Advisers, Inc. (the "Adviser"). The Adviser was formerly known as
Vintage Advisers, Inc. In turn, the Adviser has entered into an Investment
Sub-Advisory Agreement with Health Financial, Inc. The Trust has entered into an
Administration Agreement with Unified Fund Services, Inc. ("Unified") and a
Distribution Agreement with Unified Management Corporation (the "Distributor").
As Investment Adviser, the Adviser supervises and assists in the management of
the Trust, pursuant to the terms of the Investment Advisory Agreement.
The Adviser provides investment advisory services for which each Fund pays on a
monthly basis, an annual fee as follows:
<TABLE>
<S> <C> <C> <C>
% of Average Net % of Average Net
Fund Assets of the Fund Fund Assets of the Fund
- ---- ------------------ ---- ------------------
Starwood Strategic 1.25% Laidlaw 1.25%
Taxable Money Market .90% First Lexington Balanced .75%
</TABLE>
The Adviser has engaged Health Financial, Inc. (the "Sub-Adviser") to serve as
sub-adviser to the First Lexington Balanced Fund. The Sub-Adviser receives an
annual investment management fee, paid by the Adviser, for its management
services. The fee is payable monthly, at the following rates: 0.40% of net
assets up to $250 million; 0.35% of the next $250 million; and 0.30% of net
assets in excess of $500 million.
Until February 2, 1998, the Adviser engaged Starwood Corporation to serve as
sub-adviser to The Starwood Strategic Fund, and Fiduciary Counsel, Inc., to
serve as sub-adviser to the Laidlaw Fund and The Taxable Money Market Fund. Each
of these sub-advisers was entitled to an annual fee, paid by the Adviser, for
its management services. The fees were payable monthly, at the following rates
for each Fund respectively:
Name of Fund Fee (Percentage of Assets of the Fund)
- ------------ --------------------------------------
The Starwood Strategic Fund 0.35% of net assets up to $250 million;
0.30% of next $250 million of net assets;
0.25% of net assets in excess of $500 million
Name of Fund Fee (Percentage of Assets of the Fund)
- ------------ --------------------------------------
The Laidlaw Fund 0.35% of net assets up to $250 million;
0.30% of next $250 million of net assets;
0.25% of net assets in excess of $500 million
The Taxable Money Market Fund 0.07% of net assets up to $1 billion;
0.05% of net assets of $1 billion or more
Unified, as administrator, receives an annual fee, payable monthly by each Fund.
The fee is equal to 0.435% of the Fund's average net assets, for all Funds
except The First Lexington Balanced Fund and The Taxable Money Market Fund, for
which the fee is equal to 0.185% of the Funds average net assets. These fees are
paid by the Adviser.
<PAGE>
Under a Distribution Plan adopted with respect to each Fund pursuant to Rule
12b-1 under the Investment Company Act of 1940, the Trust pays the Distributor
an annual fee, payable monthly, of up to 0.10 % of the respective Fund's average
daily net assets
The Trust has adopted a Shareholder Services Plan (with respect to each Fund) in
which financial institutions may enter into a shareholder services agreement
with the Trust to provide administrative support services to the Funds. In
return for these services, a financial institution may receive payments from
each Fund at a rate not exceeding 0.15% of the Funds average net assets owned
beneficially by the institution's clients.
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Acts of 1940.
Certain Trustees and officers of the Trust are "interested persons" (as defined
in the Act) of the Trust. Each "non-interested" Trustee is entitled to
receive a quarterly Board of Trustees meeting fee of $2,400 and $400 per
additional meeting attended, plus expenses for services relating to the Trust.
Note 4- Securities Transactions
For the six months ending March 31, 1998, purchases and sales of investment
securities, excluding short-term investments were as follows:
Purchases Sales
--------- -----
The Starwood Strategic Fund $ 93,165 $ 234,829
The Laidlaw Fund --- 128,313
The First Lexington Balanced Fund 3,197,075 ---
