A MESSAGE FROM THE UNIFIED FUNDS
Dear Shareholders,
Thank you for investing in The Unified Funds!
Since the early 1990s, the mutual fund industry has grown in excess of 26% per
year and total mutual fund assets now exceed $5.5 trillion. Despite the strength
in long-term mutual fund cash flows, the principal reason for this growth has
been market appreciation. Since the end of 1994, over 60% of long-term mutual
fund asset growth has been due to market appreciation. It is, therefore, no
surprise that the fastest growing long-term mutual fund asset class has been,
and is currently, equities. Since the end of 1994, equities have grown at an
average annual rate of 36%, while long-term bonds have grown at only 15% per
year. While the industry overall has grown at such an explosive rate, growth
within individual fund complexes is becoming increasingly difficult due
predominantly to the loss of market share to the index funds, and, to the power
of distributors.
The index fund phenomenon has become something of a self-fulfilling prophecy.
The equity index funds have tended to outperform their brethren and this
outperformance tends to attract more investors, thereby pushing up the stock
prices in the index, and so on. Index funds have increased their share of assets
to 6.6% at the end of 1998 compared to only 2% in 1993. More importantly, index
funds now command a startlingly high 19% of all net new cash flow compared to
only 3% in 1993.
The indexes have also outperformed 80% of actively managed funds for most ofthis
decade. As a result, index mutual funds have been consistently and continually
gaining market share in our industry. Within the index phenomenon, the S&P Index
Funds command the largest market share. Another trend of note is that Internet
brokers seem to be attracting retail customers away from investing in mutual
funds and into individual stocks, especially Internet stocks. The migration of
retail customers to the Internet could be the principal reason why cash flows
into long term mutual funds declined by over 50% in the first quarter of 1999
compared to the same period in the prior year.
Partially due to these trends, we have introduced for you the Unified Select
Series, consisting of six 35 basis point select index funds, a yield-oriented
money market fund, and an Internet Fund, and we are most excited about the
potential of this series.
The Unified Select 30 Index Fund seeks to track the performance of the Dow Jones
Industrial Average, which is made up of stocks of 30 companies. The Unified
Select 500 Index Fund seeks to track the performance of the Standard & Poor's
500 Composite Stock Index, which emphasizes stocks of larger companies. The
Unified Select 2000 Index Fund seeks to track the performance of the Russell
2000 Index, which is made up of stocks of small, generally unseasoned U.S.
companies. The Unified Select International Equity Index Fund seeks to track the
performance of the securities in the Morgan Stanley Capital International
Europe, Australia and Far East Index. The Unified Select REIT Index Fund seeks
to track the performance of the Morgan Stanley REIT Index, which is made up of
stocks issued by real estate investment trusts (known as REITs). The Unified
Select Bond Index Fund seeks to track the performance of the Lehman Brothers
Aggregate Bond Index, a broad market-weighted index which encompasses U.S.
Treasury and agency securities, investment grade corporate bonds, international
(dollar-denominated) investment grade bonds, and mortgage-backed securities.
In addition to our six index funds, we have created the Unified Select Internet
Fund. It seeks long term capital appreciation by investing principally in
equities of Internet companies. With an expense ratio of 0.35%, it is believed
to have the lowest expense ratio of any Internet fund in the industry.
The Unified Funds and The Unified Select Series are particularly proud of our
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 community, its schools, colleges, universities and other not-for-profit
organizations.
We maintain a positive long-term outlook on the stock market, but, keep in mind
that financial markets are not one-way streets. The short-term may be volatile
at times in response to news items and mood swings of investors. The Unified
Funds along with the Unified Select Series Funds are designed to provide you
with options for achieving a balanced portfolio of funds and an asset allocation
opportunity to assist you in meeting your long-term financial goals.
Our Unified fund family is well positioned for the future in the marketplace. We
have extremely attractive and inexpensive index choices, and we will continue to
provide you with innovative indexes that reach into special market sectors. We
also have an Internet Fund that is currently believed to be the least expensive
in the industry. It offers the investor a non-index choice that is invested in a
popular sector. We also have provided you with a balanced, asset allocation
product in the index-featured First Lexington Balanced fund-of-funds, and two
money market fund choices, one for service and one for yield. We are very
excited about the recent performance of our more traditional stock fund, the
Starwood Strategic Fund, which is enjoying an excellent year.
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>
THE STARWOOD STRATEGIC FUND
- ---------------------------
Managed by : Andrew E. Beer
Performance and Investment Summary
Total Returns show how the value of the Fund's shares changed over a set
period---in this case, since the commencement of the investment in accordance
with the Fund's objective on April 4, 1996---and assume that you held the shares
through the entire period and reinvested all distributions into the Fund. These
Total Return figures are compared to the benchmark performance of the S&P
500---a widely recognized, unmanaged index of common stocks. Please note that
indices do not take into account fees and expenses of investing in the
individual securities that they track, and that individuals cannot invest
directly in any index.
-------------------------------------------------------
Average Annual Total Starwood
Return for the Period Strategic S&P 500
Ended September 30, 1999 Fund Index
------------------------ ---- -----
Since Inception (4/4/96)* 14.01% 21.19%
10/1/98-9/30/99 31.79% 26.12%
*Commencement of investment in accoradance with the Fund's
objective
Past performance does not predict future performance.
The value of your shares may fluctuate and be higher
or lower than their original cost at the time of
redemption.
--------------------------------------------------------
Performance
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the growth
of a hypothetical $10,000 investment. A fund's Total Return includes changes in
share price, plus reinvestment of any dividends (income) and capital gains (the
profits the fund earns when it sells securities that have grown in value).
Growth of a $10,000 Investment
[Line graph comparing the value of a $10,000 invest-
ment in the Starwood Strategic Fund on 4/4/96 with a
$10,000 investment in the S&P 500 on the same date]
4/4/96 9/30/96 9/30/97 9/30/98 9/30/99
SSF $10,000 $9,809 $12,304 $12,086 $15,804
S&P $10,000 $10,480 $14,443 $15,507 $19,558
<PAGE>
Investment Review
Q: WHO SHOULD CONSIDER THE STARWOOD STRATEGIC FUND?
A: The Starwood Strategic Fund invests principally in a diversified portfolio of
equity securities of seasoned, financially strong growth companies. Current
income is an incidental consideration. However, many of the Fund's investments
should provide regular dividends, which may grow over time. Occasionally, when
market conditions appear vulnerable to a substantial decline, stocks may be sold
to protect capital against the corrosions of such possible declines in the
equity securities of the Fund and proceeds invested in Money Market Funds and/or
obligations of the U.S. Government. When the uncertainties which appear to worry
investors abate, the Starwood Strategic Fund will again invest in a diversified
portfolio of mostly quality growth stocks. Hence, the Fund is appropriate for
investors who have a long term view and seek primarily appreciation.
Q: WHAT ARE YOUR VIEWS ON THE ECONOMIC FACTORS THAT HAVE AFFECTED THE MARKET
DURING THE PAST SIX MONTHS?
A: While inflation has not yet shown up in the indicators, many economists and
members of the Federal Reserve have been concerned that conditions are such that
it may soon be indicated. Furthermore, the three declines of 1/4% each which
occurred last year were prompted by concern that economic dislocations in other
parts of the world might affect the United States. However, those dislocations
have somewhat abated, though the disinflationary price differentials have not,
which should hamper inflation. Nevertheless, the Federal Reserve has taken
preemptive action to raise interest rates twice this year, and indicated a bias
to do so once more, perhaps before year end. Also, due to OPEC actions to
restrain the supply of oil while the economy remains strong has brought about
increases in the prices of oil and gas, which some people feel are a sign of
inflation. Thus, investors have been nervous and most stocks have declined
through most of 1999. The Starwood Strategic Fund has tried to appreciate by
investing in some of the strongest growth stocks, and pruning and upgrading when
this seemed appropriate.
Q: HOW DID THE FUND PERFORM?
A: The Fund's performance was affected by the volatility of the market during
the past year, and some of the pruning and upgrading of the portfolio stocks.
The total return for the year was 31.79%.
Q: WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE?
A: During the first part of the year, the Fund performed better than most of the
averages. However, the faster growing stocks often are more volatile than the
average stocks. Hence the Fund lagged during the late spring and summer, but was
outperforming the Dow Jones Industrial and the S&P 500 during the early fall.
Both of these averages are weighted by some of the best performing stocks and
are not very indicative of what an average stock or a portfolio of average
stocks would have performed. We invest in the stocks of the companies where the
potential for outstanding gains can be achieved when the stock market rallies
strongly or is not hampered by uncertainties about foreign economic dislocations
or fears of Federal Reserve actions to raise interest rates in order to restrain
inflation. During much or most of the year the Fund did outperform the Dow Jones
Industrials and S&P 500 Indexes, and will strive to do so over the long term.
Q: HOW HAVE YOU POSITIONED THE FUND'S PORTFOLIO TO IMPROVE PERFORMANCE?
A: During the summer and early fall, the Fund pruned a number of stocks from the
portfolios and reinvested the proceeds in other stocks selected to outperform
during the periods when the market may rally. The portfolio is well diversified
and balanced with respect to industry participation. It has an emphasis on
stocks of companies whose businesses should not be very vulnerable to higher
interest rates, should not be adversely affected if inflation should become
rekindled, and are not likely to be affected should higher interest rates rise
again due to currency fluctuations and economic dislocations in foreign
countries.
The views expressed in this report are those of the Adviser through the end of
the period stated on the cover. The Adviser's views and opinions are based on
economic data, market conditions and other information and are subject to change
at any time.
<PAGE>
THE FIRST LEXINGTON BALANCED FUND
- ---------------------------------
Managed by : Dr. Gregory W. Kasten
Performance and Investment Summary
Total Returns show how the value of the Fund's shares changed over a set
period---in this case, since the commencement of the investment in accordance
with the Fund's objective on March 13, 1997---and assume that you held the
shares through the entire period and reinvested all distributions into the Fund.
These Total Return figures are compared to the benchmark performance of the S&P
500---a widely recognized, unmanaged index of common stocks. Please note that
indices do not take into account fees and expenses of investing in the
individual securities that they track, and that individuals cannot invest
directly in any index.
-------------------------------------------------------
Average Annual Total First Lexington
Return for the Period Balanced S&P 500
Ended September 30, 1999 Fund Index
------------------------ ---- -----
Since Inception (3/13/97)* 7.69% 20.95%
10/1/98-9/30/99 10.39% 26.12%
* Commencement of investment in accordance with the
Fund's objective.
Past performance does not predict future performance.
The value of your shares may flucuate and be higher
or lower than their original cost at the time of
redemption.
-------------------------------------------------------
Performance
There are several ways to evaluate a fund's historical performance: total
percentage change in value, the average annual percentage change, or the growth
of a hypothetical $10,000 investment. A fund's Total Return includes changes in
share price, plus reinvestment of any dividends (income) and capital gains (the
profits the fund earns when it sells securities that have grown in value).
Growth of a $10,000 Investment
[Line graph comparing the value of a $10,000 investment
in the First Lexington Balanced Fund on 3/13/97 with a
$10,000 investment in the S&P 500 on the same date]
3/13/97 9/30/97 9/30/98 9/30/99
FLBF $10,000 $11,063 $10,942 $12,079
S&P $10,000 $11,998 $12,881 $16,246
<PAGE>
Q: WHO SHOULD CONSIDER THE FIRST LEXINGTON BALANCED FUND?
A: The First Lexington Balanced Fund is suitable for investors seeking long term
growth of capital and current income. It is intended for investors desiring a
balanced mix of both stocks and bonds to reduce overall risk. The Fund invests
primarily in a diversified portfolio of other no-load mutual funds that invest
in one of the following six financial asset classes. (1) large company US stocks
(2) small company US stocks, (3) international stocks, (4) real estate
investment trusts, (5) cash equivalents, and 6) long-term investment rated
corporate and government bonds. The portfolio manager believes this method of
diversification reduces long term risk, which may further appeal to investors
desiring such risk management discipline.
Q: WHAT ARE YOUR VIEWS ON THE ECONOMIC FACTORS THAT AFFECTED THE MARKET DURING
THE PAST YEAR?
A: The fiscal year (ended September 30, 1999) acted like two distinctly
different periods. During the first half of the year, stock markets rebounded
from the crisis of confidence that had shaken investors during the summer of
1998. Then, during the second half, fears of a global economic slump gave way to
optimism about improving business activity. Indeed, a new concern that economic
growth might be getting out of hand caused interest rates to rise and bond
prices to fall, depressing the total returns on bonds and cooling off the hot
U.S. stock market.
Yields of long-term U.S. Treasury bonds rose by 1 to 1.5 percentage points
during the fiscal year. The yield of the 30-year Treasury bond increased 1.07
percentage points (107 basis points), from 4.98% on September 30, 1998, to 6.05%
a year later. The yield of the 10-year Treasury, a key benchmark for mortgage
loans, rose 146 basis points, from 4.42% to 5.88%. Three-month Treasury bills
rose on balance by 49 basis points, from 4.36% to 4.85%. The Lehman Brothers
Aggregate Bond Index, a benchmark for the entire taxable bond market, posted a
negative -0.4% return, as interest income of 6.1% from bonds was more than
offset by an average price decline of -6.5%. Returns were somewhat higher for
high-yield junk bonds and mortgage-backed securities such as GNMAs.
During the first half of the period, the stock market rose 26.1%, as measured by
the Wilshire 5000 Total Market Index. Investor confidence, already high due to
the booming economy, was bolstered by easier monetary policy. The Federal
Reserve cut short-term interest rates a total of 0.75% during the fall of 1998.
However, stock and bond returns were muted during the second half of the fiscal
year, when the Federal Reserve acted to raise short-term interest rates, and
slow the economy and reduce inflationary pressure. Higher rates tend to hurt
stock prices because many investors use current interest rates to discount the
projected earnings and dividends. In the second half of the fiscal year, the
Wilshire 5000 index gained only 0.7%. Rising corporate profits helped investors
overcome their worries about higher interest rates
Q: WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE?
A: Large company stocks outperformed small stocks during the fiscal year, and
growth stocks outperformed value stocks. The stock market's advance was--once
again--led by a relatively narrow segment of blue-chip growth companies.
The fund's performance was most impacted by REITs. After large gains through the
early fall of 1998, share prices of real estate investment trusts (REITs) fell
during the fiscal year, giving a total return of -5.29% with dividends
reinvested. The past two years have been perhaps the most challenging ever for
REIT investors. Unlike the case with previous bear markets, fundamentals
seemingly have not turned negative. In fact it appears that fundamentals are
more positive today than at any time in nearly two decades. Vacancy rates are
low, property prices have recovered, the growing U.S. economy continues to
support strong demand for space, and there are only few signs of speculative new
construction. Yet, the shares of REITs are as cheap as ever, based on nearly
every popular valuation measure including price/cash flow multiple, dividend
yield and price in relation to asset value. International stocks provided an
attractive return of 22.1% over the fiscal year.
Q: BASED ON THE MARKET'S CURRENT ENVIRONMENT, WHAT IS THE FIRST LEXINGTON
BALANCED FUND'S INVESTMENT STRATEGY FOR THE MONTHS AHEAD?
A: We are moving the fund towards a "neutral" asset allocation with more
exposure to large company stocks, and less to REITs. Our goal is to have an
asset allocation similar to that of most balanced or asset allocation funds. We
believe that we can outperform the average fund by maintaining a neutral
allocation and running the fund with lower total expenses than the average fund.
Total expenses would include the fund's internal expense ratio and the fund's
associated transaction costs from portfolio turnover. In addition, most mutual
funds using a "fund of funds" approach hold mutual funds with higher expense
ratios than the funds we hold. All of these factors should combine to lower the
overall cost when compared to the average fund. We believe the lower cost will
contribute to our performance advantages in the future.
The views expressed in this report are those of the Adviser through the end of
the period stated on the cover. The Adviser's views and opinions are based on
economic data, market conditions and other information and are subject to change
at any time.
<PAGE>
THE TAXABLE MONEY MARKET FUND
- -----------------------------
Managed by: Jack R. Orben
Performance
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects both the change in a fund's share price
over a given period, and reinvestment of its dividends (or income). Yield
measures the income paid by a fund. Since a money market fund tries to maintain
a $1 share price, yield is an important measure of performance.
-------------------------------------
Yield for the Period
Ended September 30, 1999
------------------------
30-day yield 3.91%
7-day effective yield 4.10%
*Past performance is not predictive
of future performance.
-------------------------------------
An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund.
Investment Review
- -----------------
Q: WHY SHOULD INVESTORS CONSIDER INVESTING IN THE UNIFIED TAXABLE MONEY MARKET
FUND?
A: A prudent wealth-building strategy includes placing the "cash" portion of an
investor's portfolio into liquid and very conservative investments. Money market
funds are an excellent and suitable investment option for money which is
awaiting near term utilization into more aggressive, higher yielding
investments, or, that you wish to keep readily available to meet emergencies
and/or unanticipated events.
Q: FOR THE PREVIOUS SIX-MONTH PERIOD, HOW WOULD YOU DESCRIBE THE ECONOMIC
CLIMATE THAT AFFECTED THE TYPES OF INSTRUMENTS IN WHICH MONEY MARKET MUTUAL
FUNDS INVEST?
A: Over the previous six months the specter of inflation has dominated the
economic environment. The Federal Reserve has raised interest rates twice, by a
total of .5% and has indicated that there may be more such rate increases in the
future. This of course has impacted both the stock and bond markets, tending to
drive prices down. Bond yields move inversely to prices, so they have increased
over the last six months, including yields on short-term securities in the money
market fund. If the Federal Reserve continues to raise rates, yields will
continue to increase.
Q: HOW HAVE YOU RESPONDED TO THESE CHANGING CONDITIONS?
A: Starting in June 1999, we began buying securities in smaller increments and
for shorter durations. This has enabled the Fund to reinvest in issues with
higher yields. We plan to continue this strategy until the interest rate
environment shows signs of settling.
<PAGE>
Q: HOW HAVE WE POSITIONED THE FUND FOR THE FUTURE?
A: For some time now we have been taking steps to assure a high-grade, low-risk
portfolio for the Unified Taxable Money Market Fund. Our priorities are safety
first, along with liquidity, and yield second. Our money market fund portfolio
manager remains committed to professional responsiveness to the changing
financial markets, ensuring that the Unified portfolio continues to seek the
highest possible safety and returns consistent with the fundamental objectives
and investment policies of the portfolio. In the meantime, as we anticipate and
monitor the economy, your fund continues to provide high quality, conservative
investments with excellent service. Moving forward, we plan to continue to
increase the concentration of the fund invested in high-grade commercial paper,
which generates, on average, higher yields than government agency discount
notes. By continuing this trend and buying securities of sizes and durations
that are keyed to expectations in interest rate movement, we intend to position
the Fund to deliver the highest yields for the least amount of risk.
<PAGE>
YEAR 2000 ISSUE: (UNAUDITED)
Like other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by the Adviser, Administrator or other service providers to the Fund do not
properly process and calculate date-related information and data from January 1,
2000. This is commonly known as the "Year 2000 Issue". The Adviser and
Administrator have taken steps that they believe are reasonably designed to
address the Year 2000 Issue with respect to computer systems that are used and
to obtained reasonable assurances that comparable steps are being taken by the
Fund's major service providers. At this time, however, there can be no assurance
that these steps will be sufficient to avoid any adverse impact on the Fund. In
addition, the Adviser cannot make any assurances that the Year 2000 issue will
not affect the companies in which the Fund invests or worldwide markets and
economies.
<PAGE>
INVESTMENTS-THE STARWOOD STRATEGIC FUND
- ---------------------------------------
Statement of Net Assets September 30, 1999
Number Market
of Shares Value
--------- -----
COMMON STOCKS - 86.80%
- ----------------------
AEROSPACE & DEFENSE - 3.00%
United Technologies Inc. 750 $ 44,484
APPAREL - 2.14%
Cintas Corp. 550 31,797
BANKS - 2.89%
Citigroup Inc. 975 42,900
BUSINESS SERVICES - 2.14%
eBay Inc.* 225 31,739
COMMUNICATION EQUIPMENT - 8.10%
Lucent Technologies Inc. 800 51,900
Tellabs Inc.* 1,200 68,325
COMPUTER SERVICES - 5.09%
America Online, Inc. * 400 41,600
Safeguard Scientifics, Inc.* 500 34,000
COMPUTER SYSTEMS - 13.90%
Dell Computer Corp.* 1,000 41,813
Gateway Inc. * 1,700 75,544
International Business Machines 400 48,550
Yahoo Inc. * 225 40,387
DRUGS & HEALTH CARE - 12.82%
Eli Lilly & Company 400 25,600
Johnson & Johnson 525 48,234
McKesson HBOC Inc. 350 10,150
Medtronic Inc. 900 31,950
Merck & Company, Inc. 600 38,888
Rite Aid Corp. 650 8,978
Warner-Lambert Company 400 26,550
ENTERTAINMENT - 1.74%
The Walt Disney Company 1,000 25,875
*Non-income producing securities
The accompanying notes are an integral part of these financial statements.
<PAGE>
Number Market
of Shares Value
--------- -----
FINANCIAL SERVICES - 8.26%
Bear Stearns Cos. 1,207 $ 46,394
CMGI Inc.* 400 41,000
E*TRADE Group, Inc.* 1,500 35,250
MEDIA - 2.25%
Time Warner Holdings 550 33,413
RETAIL - 5.43%
Best Buy Company, Inc.* 1,300 80,681
SOFTWARE PRODUCTS - 8.18%
BMC Software * 1,000 71,563
Microsoft Corp.* 550 49,809
TELECOMMUNICATIONS - 10.86%
AT&T Corporation 1,012 44,022
Nokia Corp. * 700 62,869
Sprint Corporation 1000 54,250
TOTAL COMMON STOCKS $ 1,288,515
(cost $ 1,033,804) -----------
REPURCHASE AGREEMENTS - 13.07%
Firstar Bank ($197,867 FHLMC, 09/01/24)
Purchase Date 09/30/99, Maturity Date 10/01/99,
Amount Payable at Maturity $194,018
TOTAL REPURCHASE AGREEMENTS $ 194,000
(cost $ 194,000) ---------
TOTAL INVESTMENTS - 99.87%
- --------------------------
(Identified cost $1,227,804) $1,482,515
OTHER ASSETS AND LIABILITIES, NET - 0.13% 1,977
- ----------------------------------------- ----------
NET ASSETS - 100% $ 1,484,492
===========
<PAGE>
INVESTMENTS-THE FIRST LEXINGTON BALANCED FUND
- ---------------------------------------------
Statement of Net Assets September 30, 1999
<TABLE>
<S> <C> <C>
Number Market
of Shares Value
--------- -----
MUTUAL FUNDS - 92.85%
- ---------------------
Vanguard Index Trust 500 Portfolio 6,978 $ 827,198
Vanguard Extended Market Portfolio 24,255 738,324
Vanguard International Growth 30,253 589,032
Vanguard Specialized Real Estate Index Fund 94,049 962,121
Vanguard Total Bond Market Index 114,639 1,115,434
TOTAL MUTUAL FUNDS
(Cost $4,376,127) 4,232,109
---------
REPURCHASE AGREEMENTS - 6.63%
- -----------------------------
Firstar Bank ($ 303,014 FHLMC, 09/01/24)
Purchase Date 09/30/99, Maturity Date 10/01/99,
Amount Payable at Maturity $302,028
TOTAL REPURCHASE AGREEMENTS
(Cost $302,000) $ 302,000
---------
TOTAL INVESTMENTS - 99.48%
- --------------------------
(Identified cost $4,678,127) $4,534,109
OTHER ASSETS AND LIABILITIES, NET - .52% 23,862
- ---------------------------------------- ----------
NET ASSETS - 100% $4,557,971
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INVESTMENTS-THE TAXABLE MONEY MARKET FUND
- -----------------------------------------
Statement of Net Assets September 30, 1999
<TABLE>
<S> <C> <C>
Par Value Value (Note 2)
--------- --------------
COMMERCIAL PAPER - 47.21%
- -------------------------
Hasbro Inc. 5.17%, 10/12/1999 2,000,000 $ 1,996,840
Consolidated Natural Gas 5.21%, 10/14/1999 2,000,000 1,996,237
American Home Products 5.29%, 10/19/1999 2,000,000 1,994,710
Met-Life Funding Inc. 5.29%, 10/20/1999 2,000,000 1,994,416
General Electric Capital Corporation 5.25%, 10/21/1999 2,000,000 1,994,167
Ford Motor Credit Corporation 5.22%, 11/04/1999 2,000,000 1,990,140
General Motors Acceptance Corporation 4.79%, 11/18/1999 2,000,000 1,987,227
Bell South Telecommunication 5.30%, 01/06/2000 2,000,000 1,965,550
Emerson Electric Corporation 5.28%, 01/31/2000 2,000,000 1,964,213
Johnson & Johnson 5.25%, 02/04/2000 2,000,000 1,963,250
Coca Cola Company 5.25%, 02/08/2000 1,000,000 980,500
Coca Cola Company 5.28%, 02/08/2000 1,000,000 980,934
Lucent Technology 5.04%, 02/10/2000 2,000,000 1,963,040
Disney Walt Company 5.39%, 03/15/2000 1,000,000 975,146
TOTAL COMMERCIAL PAPER
(Cost $24,746,370) $24,746,370
-----------
U.S. GOVERNMENT SECURITIES - 45.07%
- -----------------------------------
Federal Farm Credit Bank 4.85%, 12/01/1999 3,000,000 $ 2,975,346
Federal Home Loan Mortgage 5.48%, 01/24/2000 2,000,000 1,964,989
Federal Home Loan Mortgage 5.48%, 02/03/2000 2,000,000 1,961,944
Federal Home Loan Mortgage 5.20%, 04/27/2000 2,000,000 1,939,622
Federal National Mortgage Association 4.73%, 11/15/1999 2,000,000 1,988,175
Federal National Mortgage Association 4.80%, 11/29/1999 2,000,000 1,984,267
Federal National Mortgage Association 4.66%, 12/13/1999 2,000,000 1,981,101
Federal National Mortgage Association 5.47%, 01/18/2000 2,000,000 1,966,876
Federal National Mortgage Association 5.41%, 01/20/2000 2,000,000 1,966,638
Federal National Mortgage Association 5.40%, 02/09/2000 2,000,000 1,960,700
Federal National Mortgage Association 5.48%, 02/22/2000 2,000,000 1,956,160
Federal National Mortgage Association 5.17%, 03/09/2000 1,000,000 977,022
TOTAL U.S. GOVERNMENT SECURITIES
(Cost $23,622,840) $23,622,840
----------
REPURCHASE AGREEMENTS - 7.54%
- -----------------------------
Firstar Bank ($4,028,725 FHLMC, 09/01/24) Purchase Date
09/30/99, Maturity Date 10/01/99, Amount Payable at Maturity $3,950,362
TOTAL REPURCHASE AGREEMENTS
(Cost $3,950,000) $ 3,950,000
TOTAL INVESTMENTS - 99.82%
(Amortized cost $52,319,210) $52,319,210
OTHER ASSETS AND LIABILITIES, NET - .18% 93,873
- ---------------------------------------- -----------
NET ASSETS - 100% $52,413,083
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
INVESTMENTS-THE UNIFIED SELECT INTERNET FUND
- --------------------------------------------
Statement of Net Assets September 30, 1999
Number Market
of Shares Value
--------- -----
COMMON STOCKS - 93.84%
- ----------------------
COMMUNICATION EQUIPMENT - 7.70%
C-Cor.net Corp. * 1,900 57,713
Qualcomm Inc. * 395 74,729
COMPUTER SERVICES - 35.59%
America Online, Inc. * 710 73,840
CNET Inc. * 930 52,080
EarthLink Network, Inc. * 1,584 68,013
Exodus Communications Inc. *1,200 86,475
Infoseek Corp. * 1,230 37,976
priceline.com Inc. * 920 59,340
Safeguard Scientifics, Inc.* 1,320 89,760
Sportsline USA Inc. * 3,535 104,503
StarMedia Network Inc. * 1,085 39,840
COMPUTER SYSTEMS - 26.19%
Cisco Systems Inc. * 900 61,706
EMC Corp. * 1,000 71,438
At Home Corp. * 1,730 71,687
Inktomi Corp. * 650 78,020
Mindspring Enterprises * 1,785 49,422
PSINet Inc. * 1,081 38,882
Yahoo Inc. * 440 78,980
FINANCIAL SERVICES - 4.83%
CMGI Inc.* 810 83,025
Number Market
of Shares Value
--------- -----
MEDIA - 3.18%
Time Warner Holdings 900 54,675
OIL & NATURAL GAS - 3.26%
Williams Companies Inc. 1,500 56,156
SOFTWARE PRODUCTS - 6.34%
Bottomline Technologies Inc. * 2,585 38,129
Network Associates, Inc. * 3,703 70,820
TELECOMMUNICATIONS - 6.75%
Level 3 Communications * 890 46,475
Rogers Cantel Mobile Comm. * 1,700 69,700
TOTAL COMMON STOCKS $ 1,613,384
(cost $ 1,730,372) -----------
TOTAL INVESTMENTS - 93.84%
- --------------------------
(Identified cost $1,730,372) $1,613,384
OTHER ASSETS AND LIABILITIES, NET - 6.16% 105,857
- ----------------------------------------- -----------
NET ASSETS - 100% $ 1,719,241
===========
*Non-income producing securities.
The accompanying notes are an integral part of these financial statements.
<PAGE>
INVESTMENTS-THE UNIFIED SELECT 30 INDEX FUND
- ---------------------------------------------
Statement of Net Assets September 30, 1999
Number Market
of Shares Value
--------- -----
MUTUAL FUNDS - 85.17%
- ---------------------
Orbitex Focus 30 Fund 2,052 $ 43,272
TOTAL MUTUAL FUNDS
(Cost $45,000) 43,272
------
TOTAL INVESTMENTS - 85.17%
- --------------------------
(Identified cost $45,000) $43,272
Other Assets and Liabilities, Net - 14.83% 7,536
- ------------------------------------------ ---------
Net Assets - 100% $50,808
=======
INVESTMENTS-THE UNIFIED SELECT 500 INDEX FUND
- ----------------------------------------------
Statement of Net Assets September 30, 1999
Number Market
of Shares Value
--------- -----
MUTUAL FUNDS - 85.32%
- ---------------------
Vanguard Index Trust 500 Portfolio 171 $ 20,269
TOTAL MUTUAL FUNDS
(Cost $21,000) 20,269
------
TOTAL INVESTMENTS - 85.32%
- --------------------------
(Identified cost $21,000) $20,269
OTHER ASSETS AND LIABILITIES, NET - 14.68% 3,488
- ------------------------------------------ ---------
NET ASSETS - 100% $23,757
=======
The accompanying notes are an integral part of these financial statements.
<PAGE>
INVESTMENTS-THE UNIFIED SELECT 2000 INDEX FUND
- ----------------------------------------------
Statement of Net Assets September 30, 1999
Number Market
of Shares Value
--------- -----
MUTUAL FUNDS - 79.73%
- ---------------------
Vanguard Small-Cap Stock Fund 341 $ 7,453
TOTAL MUTUAL FUNDS
(Cost $7,500) 7,453
-----
TOTAL INVESTMENTS - 79.73%
- --------------------------
(Identified cost $7,500) $7,453
OTHER ASSETS AND LIABILITIES, NET - 20.27% 1,895
- ------------------------------------------ ---------
NET ASSETS - 100% $9,348
======
INVESTMENTS-THE UNIFIED SELECT INTERNATIONAL EQUITY INDEX FUND
- --------------------------------------------------------------
Statement of Net Assets September 30, 1999
Number Market
of Shares Value
--------- -----
MUTUAL FUNDS - 73.00%
- ---------------------
Vanguard International Growth Fund 253 $ 4,929
TOTAL MUTUAL FUNDS
(Cost $5,000) 4,929
-----
TOTAL INVESTMENTS - 73.00%
- --------------------------
(Identified cost $5,000) $4,929
OTHER ASSETS AND LIABILITIES, NET - 27.00% 1,823
- ------------------------------------------ ---------
NET ASSETS - 100% $6,752
======
The accompanying notes are an integral part of these financial statements.
<PAGE>
INVESTMENTS-THE UNIFIED SELECT REIT INDEX FUND*
- -----------------------------------------------
Statement of Net Assets September 30, 1999
TOTAL INVESTMENTS - 0.00% $ ----
- ------------------------- ------
(Identified cost $ 0.00)
OTHER ASSETS AND LIABILITIES NET - 100.00% 1,000
- ------------------------------------------ -----
Net Assets - 100% $1,000
======
* Investment had not commenced at this time.
INVESTMENTS-THE UNIFIED SELECT BOND INDEX FUND*
- -----------------------------------------------
Statement of Net Assets September 30, 1999
* Investment in accordance with objective had not commenced at this time.
INVESTMENTS-THE UNIFIED SELECT MONEY MARKET FUND*
- -------------------------------------------------
Statement of Net Assets September 30, 1999
* Investment in accordance with objective had not commenced at this time.
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- ------------------------------------
As of September 30, 1999
<TABLE>
<S> <C> <C> <C>
First Taxable
Starwood Lexington Money
Strategic Balanced Market
Fund Fund Fund
---- ---- ----
ASSETS
Investments, at value (Note 2) ........ $ 1,482,515 $ 4,534,109 $ 52,319,210
Cash ................................. 2,020 122 144,505
Dividend receivable ................... 491 25,853 ---
Interest receivable ................ 18 28 362
Receivable for shares sold............. 1,311 1,772 ---
----------- ------------ -------------
Total assets .......................... 1,486,355 4,561,884 52,464,077
LIABILITIES
Accrued expenses (Note 2).............. 1,863 3,913 50,994
----------- ----------- ------------
Total liabilities..................... 1,863 3,913 50,994
----------- ----------- ------------
NET ASSETS ................................. $ 1,484,492 $ 4,557,971 $ 52,413,083
============= ========= ==========
Net assets consist of:
Paid-in capital ....................... 1,198,695 4,363,697 52,415,245
Undistributed net investment income (loss) --- 136 ---
Accumulated undistributed net realized gain
on investments .................. 31,087 338,153 (2,162)
Net unrealized appreciation (depreciation) in
value of investments............. 254,710 (144,015) ---
---------- ------------ ------------
Net assets ................................. $ 1,484,492 $ 4,557,971 $ 52,413,083
============== ========= ==========
Shares of capital stock
outstanding (no par value,
unlimited shares authorized)........... 143,423 411,746 52,413,083
Net asset value per share, offering
and redemption price .................. $ 10.35 $ 11.07 $ 1.00
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
- ------------------------------------
As of September 30, 1999
<TABLE>
<S> <C> <C> <C> <C>
The
The The The Unified
Unified Unified Unified International
Select 30 Select 500 Select 2000 Equity
Index Fund Index Fund Index Fund Index Fund
---------- ---------- ---------- ----------
ASSETS
Investments, at value (Note 2) ........ $ 43,272 $ 20,269 $ 7,453 $ 4,929
Cash .................................. 7,538 3,495 1,897 1,823
Dividend receivable ................... --- --- --- ---
Interest receivable ................... --- --- --- ---
Other receivable....................... --- --- --- ---
Receivable for shares sold............. --- --- --- ---
------------- ------------- -------------- --------------
Total assets .......................... 50,810 23,764 9,350 6,752
LIABILITIES
Payable for Investment purchased....... --- --- --- ---
Payable for shares redeemed............ --- --- --- ---
Accrued expenses (Note 2).............. 2 7 2 ---
------------ ----------- ----------- -------------
Total liabilities...................... 2 7 2 ---
------------ ----------- ----------- ----------
NET ASSETS ................................. $ 50,808 $ 23,757 $ 9,348 $ 6,752
========== ========== =========== ============
Net assets consist of:
Paid-in capital ....................... 52,536 24,410 9,395 6,823
Undistributed net investment income (loss) --- 78 --- ---
Accumulated undistributed net realized gain
on investments ................... --- --- --- ---
Net unrealized appreciation (depreciation) in
value of investments.............. (1,728) (731) (47) (71)
----------- --------------- ------------- -----------
Net assets ................................. $ 50,808 $ 23,757 $ 9,348 $ 6,752
========= ========= ========== ==============
Shares of capital stock
Outstanding (no par value,
unlimited shares authorized)........... 5,290 2,420 926 682
Net asset value per share, offering
and redemption price .................. $ 9.60 $ 9.82 $ 10.10 $ 9.90
</TABLE>
The accompanying notes are an integral part of these financial statements.
STATEMENTS OF ASSETS AND LIABILITIES
- ------------------------------------
As of September 30, 1999
<TABLE>
<S> <C> <C> <C> <C>
The The The The
Unified Unified Unified Unified Select
Select REIT Select Bond Select Internet Money Market
Index Fund Index Fund(a) Fund Fund (a)
---------- ------------- ---- --------
ASSETS
Investments, at value (Note 2) ........ $ --- $ --- $ 1,613,384 $ ---
Cash .................................. 1,000 --- 106,082 ---
Dividend receivable ................... --- --- --- ---
Interest receivable ................... --- --- --- ---
Other receivable....................... --- --- --- ---
Receivable for shares sold............. --- --- 213 ---
------------- ------------- -------------- --------------
Total assets .......................... 1,000 --- 1,719,679 ---
LIABILITIES
Payable for Investment purchased....... --- --- --- ---
Payable for shares redeemed............ --- --- --- ---
Accrued expenses (Note 2).............. --- --- 438 ---
-------------- ------------- -------------- -------------
Total liabilities...................... --- --- 438 ---
-------------- ------------- ------------- ----------
NET ASSETS ................................. $ 1,000 $ --- $ 1,719,241 $ ---
============= ============== ========== ==============
Net assets consist of:
Paid-in capital ....................... 1,000 --- 1,855,560 ---
Undistributed net investment income.... --- --- --- ---
Undistributed net realized gain
on investments ................... --- --- (19,331) ---
Net unrealized appreciation (depreciation) in
value of investments.............. --- --- (116,988) ---
--------------- -------------- ------------- -----------
Net assets ................................. $ 1,000$ --- $ 1,719,241$ ---
============== =============== =========== ================
Shares of capital stock
outstanding (no par value,
unlimited shares authorized)........... 100 --- 186,796 ---
Net asset value per share, offering
and redemption price .................. $ 10.00 $ --- $ 9.20 $ ---
(a) Investment in accordance with objective had not commenced at this time.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF OPERATIONS
- ------------------------
For the year ended September 30, 1999
<TABLE>
<S> <C> <C> <C>
First Taxable
Starwood Lexington Money
Strategic Balanced Market
Fund Fund Fund
---- ---- ----
INVESTMENT INCOME:
Interest .............................. $ 3,614 $ 14,489 $ 2,785,747
Dividends ............................. 8,582 198,520 ---
--------- ----------- ---------
Total net income 12,196 213,009 2,785,747
--------- ----------- ---------
EXPENSES:
Investment adviser fees (Note 3) ...... 16,480 42,534 505,473
12b-1 fees (Note 3).................... 1,286 5,671 56,164
Shareholder servicing fees (Note 2) ... 1,974 8,478 84,245
---------- ----------- ---------
Total net expenses ................ 19,740 56,683 645,882
---------- ---------- ---------
NET INVESTMENT INCOME (LOSS) ............... (7,544) 156,326 2,139,865
---------- ----------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on investments 53,568 162,770 (2,162)
Net realized gains from other
Investment companies ............. --- 143,632 ---
Change in net unrealized
appreciation of investments ...... 266,771 178,563 ---
--------- --------- -----------
Net gain (loss) on investments ........ 320,339 484,965 (2,162)
--------- --------- ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ............. $ 312,795 $ 641,291 $ 2,137,703
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF OPERATIONS
- ------------------------
For the period ended September 30, 1999
<TABLE>
<S> <C> <C> <C> <C>
The The The The
Unified Unified Unified Unified Select
Select 30 Select 500 Select 2000 International
Index Index Index Equity Index
Fund Fund Fund Fund
---- ---- ---- ----
INVESTMENT INCOME:
Interest............................... $ --- $ --- $ --- $ ---
Dividends.............................. --- 112 --- ---
Miscellaneous Income .................. --- --- --- ---
------ ------ ------ ------
Total net income .................. --- 112 --- ---
EXPENSES:
Investment adviser fees (Note 3) ...... 43 34 9 ---
12b-1 fees (Note 3).................... --- --- --- ---
Shareholder servicing fees (Note 2) ... --- --- --- ---
------ ------ ------ ------
Total net expenses ................ 43 34 9 ---
NET INVESTMENT INCOME (LOSS) ............... (43) 78 (9) ---
------ ------ ------- ------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on investments --- --- --- ---
Net realized gains from other
Investment companies.............. --- --- --- ---
Change in net unrealized
appreciation of investments ...... (1,728) (731) (47) (71)
--------- ------- ---- ----
Net gain (loss) on investments ........ (1,728) (731) (47) (71)
--------- ------- ---- ----
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ............. $ (1,771) $ (653) $ (56) $ (71)
========== ========== ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF OPERATIONS
- ------------------------
For the period ended September 30, 1999
<TABLE>
<S> <C> <C> <C> <C>
The
The The The Unified
Unified Unified Unified Select
Select Select Select Money
REIT Index Bond Index Internet Market
Fund(a) Fund(a) Fund Fund(a)
------- ------- ---- -------
INVESTMENT INCOME:
Interest .............................. $ --- $ --- $ --- $ ---
Dividends.............................. --- --- 445 ---
Miscellaneous Income .................. --- --- --- ---
------- ------- -------- --------
Total net income................... --- --- 445 ---
EXPENSES:
Investment adviser fees (Note 3) ...... --- --- 1,881 ---
12b-1 fees (Note 3).................... --- --- --- ---
Shareholder servicing fees (Note 2) ... --- --- --- ---
-------- ------- -------- --------
Total net expenses ................ --- --- 1,881 ---
NET INVESTMENT INCOME (LOSS) ............... --- --- (1,436) ---
-------- ------- --------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on investments --- --- (19,331) ---
Net realized gains from other
Investment companies.............. --- --- --- ---
Change in net unrealized
appreciation of investments ...... --- --- (116,988) ---
-------- ------- ---------- --------
Net gain (loss) on investments ........ --- --- (136,319) ---
-------- ------- ---------- --------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ............. $ --- $ --- $ (137,755) $ ---
========== =========== =========== ==========
</TABLE>
(a) Investment in accordance with objective had not commenced at this time.
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
Starwood Strategic Fund
<S> <C> <C>
Year Year
Ended Ended
Sept 30, Sept 30,
1999 1998
---- ----
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................... $ (7,544) $ (3,226)
Net realized gain (loss) on investments ........ 53,568 195,443
Change in net unrealized appreciation of investments 266,771 (198,366)
--------- ---------
Net Increase (Decrease)in net assets resulting from operations 312,795 (6,149)
Dividends and distributions to shareholders from:
Net realized gains ................................ (195,436) ---
Net investment income................................ --- ---
--------- ---------
TOTAL INCREASE (DECREASE) ........................... 117,359 (6,149)
Capital share transactions:
Proceeds from shares sold ...................... 670,819 173,696
Value of shares issued to shareholders in
reinvestment of dividends and distributions 193,107 ---
---------- ---------
863,926 173,696
Cost of shares redeemed .......................... (499,857) (301,469)
---------- ----------
Net increase in net assets resulting from
capital share transactions ................ 364,069 (127,773)
---------- ----------
TOTAL INCREASE (DECREASE) IN NET ASSETS.............. 481,428 (133,922)
NET ASSETS:
Beginning of period ............................ 1,003,064 1,136,986
---------- -----------
End of period (including undistributed
net investment income/net investment loss) $ 1,484,492 $ 1,003,064
============ ==========
Shares of capital stock of the Fund sold and redeemed:
Shares sold .................................... 66,011 17,636
Shares issued to shareholders in reinvestment
Shares issued to shareholders in reinvestment
dividends and distributions .................... 20,922 ---
---------- ---------
86,933 17,636
Shares redeemed...................................... (50,886) (32,480)
----------- ---------
NET INCREASE (DECREASE) IN NUMBER OF
SHARES OUTSTANDING ............................. 36,047 (14,844)
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<S> <C> <C> <C> <C>
First Lexington Taxable Money
Balanced Fund Market Fund
------------- -----------
Year Year Year Year
Ended Ended Ended Ended
Sept 30, Sept 30, Sept 30, Sept 30,
1999 1998 1999 1998
---- ---- ---- ----
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................... $ 156,326 $ 208,537 $ 2,139,865 $ 2,352,943
Net realized gain (loss) on investments ........ 306,402 148,980 (2,162) ---
Change in net unrealized appreciation of investment 178,563 (466,122) --- -------
--------- ---------- --------- ---------
Net Increase (Decrease) in net assets resulting from operations 641,291 (108,605) 2,137,703 2,352,943
Dividends and distributions to shareholders from
Net realized gains.............................. (31,835) (85,407) --- ---
Net investment income .......................... (156,190) (208,527) (2,139,865) (2,352,943)
----------- ---------- --------- ----------
TOTAL INCREASE (DECREASE)............................ 453,266 (402,539) (2,162) ---
Capital share transactions:
Proceeds from shares sold ...................... 1,034,375 4,552,823 37,800,780 192,713,015
Value of shares issued to shareholders in
reinvestment of dividends and distributions 219,471 292,861 2,095,974 2,176,703
----------- ------------ ----------- ---------
1,253,846 4,845,684 139,896,754 194,889,718
Cost of shares redeemed ............................ (3,490,514) (1,166,283) (153,056,816) (179,934,121)
------------ ------------ ------------- -----------
Net increase in net assets resulting from
Net increase in net assets resulting from
capital share transactions ................ (2,236,668) 3,679,401 (13,160,062) 14,955,597
------------- ------------ ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS ............ (1,783,402) 3,276,862 (13,162,224) 14,955,597
NET ASSETS:
Beginning of period ............................ 6,341,373 3,064,511 65,575,307 50,619,710
----------- ------------ ----------- -----------
End of period (including undistributed net
investment income/net investment loss) ... $ 4,557,971 $ 6,341,373 $ 52,413,083 $ 65,575,307
========== =========== ============ ===========
Shares of capital stock of the Fund sold and redeemed:
Shares sold .................................... 92,279 414,909 137,798,618 192,713,015
Shares issued to shareholders in reinvestment
dividends and distributions ............... 19,619 26,891 2,095,974 2,176,703
----------- ---------- ----------- -------------
111,898 441,800 139,894,592 194,889,718
Shares redeemed ................................ (309,604) (110,676) (153,056,816) (179,934,121)
----------- ----------- ------------- -------------
NET INCREASE (DECREASE) IN NUMBER OF
SHARES OUTSTANDING ............................. (197,706) 331,124 (13,162,224) 14,955,597
============ =========== ============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<S> <C> <C>
The Unified Select 30 The Unified Select 500
Index Fund Index Fund
---------- ----------
Year Year
Ended Ended
Sept 30, Sept 30,
1999 1999
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................... $ (43) $ 78
Net realized gain (loss) on investments ........ --- ---
Change in net unrealized appreciation of investments. --- ---
---------- ------------
Change in net unrealized appreciation of investment (1,728) (731)
----------- ------------
Net Increase (Decrease) in net assets resulting from operations (1,771) (653)
Dividends and distributions to shareholders from
Net realized gains.............................. --- ---
Net investment income .......................... --- ---
----------- ------------
Net realized gain of investments .................... --- ---
----------- ------------
TOTAL INCREASE (DECREASE) ...................... (7,282) (26,650)
----------- ---------
TOTAL INCREASE (DECREASE)............................ --- ---
Capital share transactions:
Proceeds from shares sold ...................... 60,322 26,260
Value of shares issued to shareholders in
reinvestment of dividends and distributions --- ---
------------ --------------
60,322 26,260
Cost of shares redeemed ............................ (7,743) (1,850)
------------- --------------
Net increase in net assets resulting from
Net increase in net assets resulting from
capital share transactions ................ 52,579 24,410
----------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ............ 50,808 23,757
NET ASSETS:
Beginning of period ............................ --- ---
------------ ---------------
End of period (including undistributed net
investment income/net investment loss) ... $ 50,808 $ 23,757
=========== =========
Shares of capital stock of the Fund sold and redeemed:
Shares sold .................................... 6,065 2,608
Shares issued to shareholders in reinvestment
dividends and distributions ............... --- ---
----------- -----------
6,065 2,608
Shares redeemed ................................ (775) (188)
----------- ------------
NET INCREASE (DECREASE) IN NUMBER OF
SHARES OUTSTANDING ............................. 5,290 2,420
============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<S> <C> <C>
The Unified Select 2000 The Unified Select International
Index Fund Equity Index Fund
Year Year
Ended Ended
Sept 30, Sept 30,
1999 1999
---- ----
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................... $ (9) $ ---
Net realized gain (loss) on investments ........ --- ---
Change in net unrealized appreciation of investment (47) (71)
------------ -------------
Net Increase (Decrease) in net assets resulting from operations (56) (71)
Dividends and distributions to shareholders from
Net realized gains.............................. --- ---
Net investment income .......................... --- ---
------------ -------------
Net realized gain of investments .................... --- ---
------------ -------------
TOTAL INCREASE (DECREASE) ...................... (7,282) (26,650)
------------ -------------
TOTAL INCREASE (DECREASE)............................ --- ---
Capital share transactions:
Proceeds from shares sold ...................... 9,670 9,323
Value of shares issued to shareholders in
reinvestment of dividends and distributions --- ---
------------ -------------
9,670 9,323
Cost of shares redeemed ............................ (266) (2,500)
------------ -------------
Net increase in net assets resulting from
Net increase in net assets resulting from
capital share transactions ................ 9,404 6,823
------------ -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ............ 9,348 6,752
NET ASSETS:
Beginning of period ............................ --- ---
------------ -------------
End of period (including undistributed net
investment income/net investment loss) ... $ 9,348 $ 6,752
============ =============
Shares of capital stock of the Fund sold and redeemed:
Shares sold .................................... 952 932
Shares issued to shareholders in reinvestment
dividends and distributions ............... --- ---
------------- --------------
952 932
Shares redeemed ................................ (26) 250
------------- --------------
NET INCREASE (DECREASE) IN NUMBER OF
SHARES OUTSTANDING ............................. 926 682
============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<S> <C> <C>
The Unified Select REIT The Unified Select Bond
Index Fund Index Fund
---------- ----------
Year Year
Ended Ended
Sept 30, Sept 30,
1999 1999
---- ----
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................... $ --- $ ---
Net realized gain (loss) on investments ........ --- ---
Change in net unrealized appreciation of investments. --- ---
----------- -----------
Change in net unrealized appreciation of investment --- ---
----------- -----------
Net Increase (Decrease) in net assets resulting from operations --- ---
Dividends and distributions to shareholders from
Net realized gains.............................. --- ---
Net investment income .......................... --- ---
----------- -----------
TOTAL INCREASE (DECREASE)............................ --- ---
Capital share transactions:
Proceeds from shares sold ...................... 3,000 ---
Value of shares issued to shareholders in
reinvestment of dividends and distributions --- ---
------------ ------------
3,000 ---
Cost of shares redeemed ............................ (2,000) ---
------------ ------------
Net increase in net assets resulting from
Net increase in net assets resulting from
capital share transactions ................ 1,000 ---
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ............ 1,000 ---
NET ASSETS:
Beginning of period ............................ --- ---
------------ ------------
End of period (including undistributed net
investment income/net investment loss) ... $ 1,000 $ ---
============= =============
Shares of capital stock of the Fund sold and redeemed:
Shares sold .................................... 300 ---
Shares issued to shareholders in reinvestment
dividends and distributions ............... --- ---
------------- --------------
300 ---
Shares redeemed ................................ (200) ---
------------- --------------
NET INCREASE (DECREASE) IN NUMBER OF
SHARES OUTSTANDING ............................. 100 ---
=============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
- -----------------------------------
<TABLE>
<S> <C> <C>
The Unified Select The Unified Select
Internet Fund Money Market Fund
------------- -----------------
Year Year
Ended Ended
Sept 30, Sept 30,
1999 1999
---- ----
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ................... $ (1,436) $ ---
Net realized gain (loss) on investments ........ (19,331) ---
Change in net unrealized appreciation of investments. --- ---
----------- ------------
Change in net unrealized appreciation of investment (116,987) ---
----------- ------------
Net Increase (Decrease) in net assets resulting from operations (137,754) ---
Dividends and distributions to shareholders from
Net realized gains.............................. --- ---
Net investment income .......................... --- ---
------------ ------------
TOTAL INCREASE (DECREASE)............................ --- ---
Capital share transactions:
Proceeds from shares sold ...................... 2,041,334 32,000
Value of shares issued to shareholders in
reinvestment of dividends and distributions --- ---
------------- ------------
2,041,334 32,000
Cost of shares redeemed ............................ (184,339) (32,000)
------------- ------------
Net increase in net assets resulting from
capital share transactions ................ 1,856,996 ---
------------- ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ............ 1,719,241 ---
NET ASSETS:
Beginning of period ............................ --- ---
------------- ------------
End of period (including undistributed net
investment income/net investment loss) ... $ 1,719,241 $ ---
========== ==============
Shares of capital stock of the Fund sold and redeemed:
Shares sold .................................... 205,296 32,000
Shares issued to shareholders in reinvestment
dividends and distributions ............... --- ---
------------- -------------
205,296 32,000
Shares redeemed ................................ (18,500) (32,000)
------------- -------------
NET INCREASE (DECREASE) IN NUMBER OF
SHARES OUTSTANDING ............................. 186,796 ---
============ ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<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> <C>
Starwood Starwood Starwood Starwood Starwood
Strategic Strategic Strategic Strategic Strategic
Fund Fund Fund Fund Fund
---- ---- ---- ---- ----
1999 1998 1997 1996 1995(a)
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning .... $9.34 $9.30 $7.69 $10.00 $10.00
Income from investment
Operations:
Net investment income .... (0.06) (0.03) (0.26) (3.23) 0.00
Net realized and unrealized
gain (loss) on investments 2.59 0.07 2.00 0.92 0.00
---- ---- ---- ---- ----
Total from investment income 2.53 0.04 1.74 (2.31) 0.00
Less distributions:
Dividends from realized gains (1.52) 0.00 (0.13) 0.00 0.00
Dividends from net
investment income ........ 0.00 0.00 0.00 0.00 0.00
---- ---- ---- ---- ----
Total from distributions ...... (1.52) 0.00 (0.13) 0.00 0.00
---- ---- ------ ----- ----
Net asset value at end of period $10.35 $ 9.34 $ 9.30 $ 7.69 $10.00
===== ===== ===== ==== =====
TOTAL ANNUALIZED
RETURN (%) .............. 31.79 0.43(d) 20.94(d) (3.97)(c)(d) (b)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period 1,484,492 1,003,064 1,136,986 483,458 2,705
Ratio of expenses to
average net assets .. 1.50% 2.59% 4.26% 15.99% 0.00%
Ratio of expenses (after
reimbursement) to
average net assets .. N/A 1.50% 2.54% 15.25% 0.00%
Ratio of net investment
Income to average net assets (.57)% (1.40)% (2.97)% (14.42)% 0.00%
Ratio of net investment
income (after reimbursement)
to average net assets N/A (0.31)% (1.25)% (13.68)% 0.00%
Portfolio turnover............. 89.62% 119.97% 76.09% 169.83% 0.00%
</TABLE>
(a)For the Period June 2,1995 (commencement of operations) to September 30,
1995.
(b)Investment in accordance with objective had not commenced at this time.
(c)For the period April 4, 1996 (commencement of investment in accordance with
objective) to September 30, 1996.
(d)Total return would have been lower had certain expenses not been reduced
during the periods shown (see Note 3).
<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> <C>
First First First Municipal Municipal
Lexington Lexington Lexington Fixed Fixed
Balanced Balanced Balanced Income Income
Fund Fund Fund Fund Fund
---- ---- ---- ---- ----
1999 1998 1997(e) 1996 1995(a)
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning .... $ 10.41 $ 11.01 $ 22.60(f) $200.00(f) $200.00(f)
Income from investment
Operations:
Net investment income .... 0.31 0.50 (12.54) (177.40) 0.00
Net realized and unrealized
gain (loss) on investments 0.72 (0.61) .99 0.00 0.00
---- ------- ----- ----- -----
Total from investment income 1.03 (0.11) (11.05) (177.40) 0.00
Less distributions:
Dividends from realized gains (0.06) (0.14) (0.01) 0.00 0.00
Dividends from net
investment income ........ (0.31) (0.35) (0.03) 0.00 0.00
------ ------- ----- ------ ------
Total from distributions ...... (0.37) (0.49) (0.04) 0.00 0.00
------ ----- ----- ------ ------
Net asset value at end of period $ 11.07 $ 10.41 $11.01 $ 22.60 $200.00
===== ====== ===== ======== ======
TOTAL ANNUALIZED
RETURN (%) ............... 10.39 (1.09)(d) 18.54(c)(d) (b) (b)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period 4,557,971 6,341,373 3,064,511 8,988 100
Ratio of expenses to
average net assets .. 1.00% 1.26% 3.06% 181.72% 0.00%
Ratio of expenses (after
reimbursement) to
average net assets .. N/A 1.00% 2.35% 181.01% 0.00%
Ratio of net investment
Income to average net assets 2.77% 3.01% 0.30% (181.58)% 0.00%
Ratio of net investment
income (after reimbursement)
to average net assets N/A 3.27% 1.01% (180.86)% 0.00%
Portfolio turnover........ 19.47% 17.79% 6.60% 0.00% 0.00%
</TABLE>
(a)For the Period June 2,1995 (commencement of operations) to September 30,
1995.
(b)Investment in accordance with objective had not commenced at this time.
(c)For the period March 13, 1997 (commencement of investment in accordance with
objective)to September 30, 1997.
(d)Total return would have been lower had certain expenses not been reduced
during the periods shown (see Note 3).
(e)The name of the fund was changed during the period (see note 1).
(f)Beginning balance adjusted for reverse stock split (see Note 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> <C>
Taxable Taxable Taxable Taxable Taxable
Money Money Money Money Money
Market Market Market Market Market
Fund Fund Fund Fund Fund
---- ---- ---- ---- ----
1999 1998 1997 1996 1995(a)
PER SHARE OPERATING...........
PERFORMANCE:
Net asset value, beginning .... $1.00 $1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
Operations:
Net investment income .... 0.04 0.04 0.03 0.04 0.002
Net realized and unrealized
gain (loss) on investments 0.00 0.00 0.00 0.00 0.000
---- ---- ---- ----- -----
Total from investment income . 0.04 0.04 0.03 0.04 0.002
Less Distribution :
Dividends from net
investment income ... (0.04) (0.04) (0.03) (0.04) (0.002)
------ ------ ------ ------ -------
Total from distributions (0.04) (0.04) (0.03) (0.04) (0.002)
------ ------- ------ ------ ------
Net asset value at end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period ..... 52,413,083 65,575,307 50,619,710 50,544,511 1,230,385
Ratio of expenses to
average net assets .. 1.15% 1.30% 1.44% 1.25% 12.82%
Ratio of expenses (after
reimbursement) to
average net assets .. N/A 1.10% 1.12% 1.16% 0.47%
Ratio of net investment
Income to average net assets 3.81% 4.12% 3.86% 4.12% (11.94%)
Ratio of net investment
income (after reimbursement)
to average net assets N/A 4.33% 4.19% 4.21% 0.65%
Portfolio turnover ....... 0.00% 0.00% 0.00% 0.00% 0.00%
</TABLE>
(a) For the Period June 2, 1995 (commencement of operations) to September 30,
1995.
<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>
The The The The Unified
Unified Unified Unified Select International
Select 30 Select 500 Select 2000 Equity
Index Fund Index Fund Index Fund Index Fund
1999(a) 1999(a) 1999(a) 1999(a)
PER SHARE OPERATING....
PERFORMANCE:
Net asset value, beginning $ 10.00 $ 10.00 $ 10.00 $ 10.00
Income from investment
Operations:
Net investment income............. (.01) .04 (.01) ----
Net realized and unrealized
gain (loss) on investments (.39) (.22) .11 (.10)
------ ------ ---- -----
Total from investment income . (.40) (.18) .10 (.10)
Less Distribution :
Dividends from net
investment income ... ------ ------ ------ ------
------ ------ ------ ------
Total from distributions ------ ------ ------ ------
------ ------ ------ ------
Net asset value at end of period $ 9.60 $9.82 $ 10.10 $ 9.90
====== ===== ====== =======
TOTAL RETURN (%) .............. (4.00)(c) (1.80)(b) 1.00(b) (1.00)(d)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period 50,808 23,757 9,348 6,752
Ratio of expenses to
average net assets .. .28% .40% .37% .02%
Ratio of net investment
Income to average net assets (.28)% .94% (.37)% (.02)%
Portfolio turnover ....... 0.00% 0.00% 0.00% 0.00%
</TABLE>
(a)For the period March 1, 1999 (commencement of operations) to September 30,
1999.
(b)For the period May 3, 1999 (commencement of investment in accordance with
objective) to September 30, 1999.
(c)For the period June 15, 1999 (commencement of investment in accordance with
objective) to September 30, 1999.
(d)For the period August 30, 1999 (commencement of investment in accordance
with objective) to September 30, 1999.
<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>
The The The The
Unified Unified Unified Unified Select
Select REIT Select Bond Select Internet Money Market
Index Fund Index Fund Fund Fund
---------- ---------- ---- ----
1999(a) 1999(c) 1999(a) 1999(c)
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning $ 10.00 $ 10.00 $ 10.00 $ 1.00
Income from investment
Operations:
Net investment income............. ---- ---- (.01) ----
.......................
Net realized and unrealized
gain (loss) on investments ---- ---- (.79) ----
------- ------ ------ ------
Total from investment income .......... ----- ----- (.80) -----
Less Distribution :
Dividends from net
investment income ........... ------ ------ ------ ------
------ ------ ------ ------
Total from distributions ------ ------ ------ ------
------ ------ ------ ------
Net asset value at end of period $ 10.00 $ 10.00 $ 9.20 $ 1.00
======= ======== ======= ======
TOTAL RETURN (%) .................... (c) (c) (8.00)(b) (c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period 1,000 ----- 1,719,241 -----
Ratio of expenses to
average net assets ....... --- ----- .35% -----
Ratio of net investment
Income to average net assets ---- ----- .26% -----
Portfolio turnover ............ ----- ----- 6.26% -----
</TABLE>
(a)For the Period March 1, 1999 (commencement of operations) to September 30,
1999.
(b)For the period April 14, 1999 (commencement of investment in accordance with
objective) to September 30, 1999.
(c)Investment in accordance with objective had not commenced at this time.
<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 consists of a family of no-load mutual funds with
eleven separate portfolios, each having its own investment objective and
policies.
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 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 a 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.
THE UNIFIED SELECT 30 INDEX FUND seeks to track the performance of the Dow Jones
Industrial Average, which is made up of the stocks of 30 companies.
THE UNIFIED SELECT 500 INDEX FUND seeks to track the performance of the Standard
& Poor's 500 Composite Stock Price Index, which emphasizes stocks of large U.S.
companies.
THE UNIFIED SELECT 2000 INDEX FUND seeks to track the performance of the Russell
2000 Index, which is made up of stocks of small, generally unseasoned U.S.
companies.
THE UNIFIED SELECT INTERNATIONAL EQUITY INDEX FUND seeks to track the
performance of the securities in the Morgan Stanley Capital International
Europe, Australia and Far East Index.
THE UNIFIED SELECT REIT INDEX FUND seeks to track the performance of the Morgan
Stanley REIT Index, which is made up of stocks issued by real estate investment
trusts (known as REITs).
THE UNIFIED SELECT BOND INDEX FUND seeks to track the performance of the Lehman
Brothers Aggregate Bond Index, a broad market-weighted index which encompasses
U.S. Treasury and agency securities, investment grade corporate bonds,
international (dollar-denominated) investment grade bonds, and mortgage-backed
securities.
THE UNIFIED SELECT INTERNET FUND seeks long term capital appreciation. The Fund
pursues this objective by investing principally in equity securities of Internet
companies.
THE UNIFIED SELECT MONEY MARKET FUND seeks 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 money market
mutual funds that meet three basic criteria: expense ratios less than 0.50%,
upper quartile yield and high investment safety standards.
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.
<PAGE>
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
The Funds follow industry practice and record securities transactions on the
trade date. 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 September 30, 1999 were the same as identified cost. As of
September 30, 1999, the composition of unrealized appreciation (the excess of
value over tax cost) and depreciation (the excess of tax cost over value) was as
follows:
Net Appreciation
Fund Appreciation Depreciation (Depreciation)
------ ------------ ------------ --------------
Starwood Strategic $ 331,221 $ (76,510) $ 254,711
First Lexington Balanced 168,671 (312,689) (144,018)
Unified Select 30 Index 0 (1,728) (1,728)
Unified Select 500 Index 0 (731) (731)
Unified Select 2000 Index 0 (47) (47)
Unified Select International Equity 0 (71) (71)
Unified Select Internet 113,926 (230,914) (116,988)
C) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
The Select 500 Index Fund, Select 2000 Index Fund, the Select Internet Fund, and
the Select International Equity Index Fund declare and pay dividends on an
annual basis. The Select 30 Index Fund and the Select REIT Index Fund declare
and pay dividends on a quarterly basis. The Select Bond Index Fund declares and
pays dividends on a monthly basis. The Select Money Market Fund declares and
pays dividends on a daily basis. Dividends, if any, from net investment income
for The Starwood Strategic 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.
<PAGE>
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)
E) EXPENSES
The Adviser pays all of the operating expenses of the Unified Funds except
shareholder servicing fees, brokerage fees, taxes, interest, 12b-1 fees, and
extraordinary expenses. Each Fund pays a management fee to the Adviser as
described in note 3.
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 a 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.
H) INVESTMENTS
Interest income is recorded on the accrual basis and dividend income is recorded
on the ex-dividend date. Discounts and premiums on securities purchased are
amortized over the life of the respective securities.
NOTE 3 - AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into a Management 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") to serve
as transfer agent and shareholder service agent and provide fund accounting
services. The Fund retains Unified Management Corporation (the "Distributor") as
the principal distributor of the Funds' shares.
As investment adviser, the Adviser supervises and assists in the management of
the Trust, pursuant to the terms of the Management Agreement.
<PAGE>
NOTE 3 - AGREEMENTS AND OTHER TRANSACTIONS WITH AFFLIATES - (CONTINUED)
The Adviser provides investment advisory services and pays certain Fund expenses
(see note 2) 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% First Lexington Balanced .75%
Taxable Money Market .90% Unified Select REIT Index Fund .35%
Unified Select 30 Index Fund .35% Unified Select Bond Index Fund .35%
Unified Select 500 Index Fund .35% Unified Select Internet Fund .35%
Unified Select 2000 Index Fund .35% Unified Select Money Market Fund .35%
Unified Select Intl. Equity Index Fund.35%
</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.
Unified Fund Services, Inc., serves as the Trust's administrator (the
"Administrator"). Pursuant to a Mutual Fund Services Agreement with the Trust,
the Administrator provides certain administrative Personnel and services
(including administration, transfer agency and fund accounting services)
necessary to operate the Funds. Unified is an affiliate of the Adviser. For its
services, the administrator receives from the Adviser an annual fee, payable
monthly, based on each Fund's average daily net assets. The fee is equal to
0.435% of the Fund's average net assets, for the Starwood Strategic Fund. For
the First Lexington Balanced Fund and The Taxable Money Market Fund, the fee is
equal to 0.185% of the Fund's average net assets, and for The Unified Select
Series the fee is equal to 0.12% of the Fund's average daily net assets, these
fees are paid by the Adviser.
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940. Under the Plan, 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 Distributor is a registered broker/dealer and effected substantially all of
the investment portfolio transactions for the funds. For the year-ended
September 30, 1999, brokerage commissions paid to the Distributor by the Funds
are as follows:
Fund Amount Fund Amount
- ---- ------ ---- ------
Starwood Strategic $ 2,115 First Lexington Balanced $ 0
Select Internet $ 783 Taxable Money Market $ 0
Select 30 $ 0 Select 2000 $ 0
Select 500 $ 0 Select International $ 0
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.
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.
<PAGE>
NOTE 4- SECURITIES TRANSACTIONS
For the year ending September 30, 1999, purchases and sales of investment
securities, excluding short-term investments were as follows:
Purchases Sales
--------- -----
Starwood Strategic $ 1,168,747 $ 1,091,195
First Lexington Balanced 1,020,000 3,222,746
Unified Select 30 Index 45,000 0
Unified Select 500 Index 21,000 0
Unified Select 2000 Index 7,500 0
Unified Select International Equity 5,000 0
Unified Select Internet 1,781,199 31,496
NOTE 5 - RECLASSIFICATIONS
In accordance with accounting pronouncements, the Starwood Strategic Fund,
Unified Select 30 Index Fund, Unified Select 2000 Index Fund, and Unified Select
Internet Fund have recorded reclassifications in each of their respective
capital accounts as noted below. These reclassifications have no impact on the
net asset value of each respective Fund and are designed to present
undistributed income on a tax basis which is considered to be more informative
to shareholders.
Undistributed Undistributed
Net Investment Net Realized Paid-In
Fund Income Gain (Loss) Capital
---- ------ ----------- -------
Starwood Strategic Fund 7544 (7544) ---
Unified Select 30 Index 43 --- (43)
Unified Select 2000 Index 9 --- (9)
Unified Select Internet 1436 --- (1436)
<PAGE>
INDEPENDENT AUDITOR'S REPORT
----------------------------
To The Shareholders and Board of Trustees
The Unified Funds:
We have audited the statements of assets and liabilities, including the
portfolios of investments, of The Unified Funds (comprising, respectively, of
the Starwood Strategic Fund, the First Lexington Balanced Fund, the Taxable
Money Market Fund, Unified Select 30 Index Fund, Unified Select 500 Index,
Unified Select 2000 Index, Unified Select International Equity Index Fund,
Unified Select REIT Index Fund, Unified Select Bond Index Fund, Unified Select
Internet Fund and Unified Select Money Market Fund) as of September 30, 1999,
and the related statements of operations, the statements of changes in net
assets, and the financial highlights for each of the periods indicated. These
financial statements and financial highlights are the responsibility of the
Funds' 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
September 30, 1999, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting The Unified Funds as of September 30,
1999, the results of their operations, the changes in their net assets, and the
financial highlights for the periods indicated in conformity with generally
accepted accounting principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
October 19, 1999
