<PAGE>
PRESIDENT'S MESSAGE
- -----------------
Photo of
Charles B. Lipson
- -----------------
November 1995
DEAR SHAREHOLDER:
I am very pleased to present you with the FundManager Trust annual report
for the twelve months ended September 30, 1995. Contained in this report is a
detailed investment review for the twelve-month period from Michael Hirsch,
Chairman, M.D. Hirsch Division of Freedom Capital Management Corporation, and
portfolio manager of the FundManager Trust, and Michelle Graham-Lyons, co-
portfolio manager of the Trust.
The past twelve months have seen the successful transition of the Trust's
advisory contract to Freedom Capital and we thank you for your support in the
proxy process.
We hope you find this investment review and the accompanying financial
summaries informative and as always we would be delighted to hear from you at
1-800-344-9033 to answer any questions you might have or to provide you with
additional information.
Audited financial statements and portfolio holdings of each Fund for the
twelve-month period ended September 30, 1995 also follow. We look forward to
serving your financial needs and appreciate your continued support.
Respectfully submitted,
/s/ Charles B. Lipson
Charles B. Lipson
President
<PAGE>
FUNDMANAGER TRUST FUNDS ANNUAL REPORT
SEPTEMBER 30, 1995
TABLE OF CONTENTS
PAGE
----
President's Message ................................................. 1
Letter to Shareholders and Management Discussion .................... 3
Performance Results ................................................. 5
Fund Selection Process .............................................. 9
Financial Statements:
Aggressive Growth Fund .......................................... 10
Growth Fund ..................................................... 14
Growth & Income Fund ............................................ 18
Bond Fund ....................................................... 22
Managed Total Return Fund ....................................... 26
Notes to Financial Statements ....................................... 31
Report of Ernst & Young LLP, Independent Auditors ................... 36
<PAGE>
LETTER TO SHAREHOLDERS AND
MANAGEMENT DISCUSSION
- ----------------- ------------------
Photo of Photo of
Michael D. Hirsch Michelle P.
Graham-Lyons
- ----------------- ------------------
MICHAEL D. HIRSCH MICHELLE P. GRAHAM-LYONS
Portfolio Manager Co-Portfolio Manager
November 1995
DEAR SHAREHOLDER:
We are pleased to present you with the annual report for the FundManager
Trust series of funds for the fiscal year ended September 30, 1995.
It was a good year for stock and bond markets as they posted solid gains
during the period. Stock prices have advanced sharply since the end of 1994 and
have continued unabated through the Funds' fiscal year end. This advance,
supported in large part by a slow growth economic environment, coupled with an
improved outlook on inflation, has also resulted in a strong bond market. The
markets also benefited from the expansion in corporate profits during the first
half of 1995. The net result has been that all three equity oriented portfolios,
Aggressive Growth, Growth and Growth & Income, compiled robust gains during the
year; up 24.3%, 22.6% and 23.3% repectively. Our bond fund, FundManager Bond
Fund, was up 10.8%. In line with expectations, Managed Total Return, our
balanced fund, participated in this rising market with a 14.3% total return.
A slow growth, low inflationary environment such as the one we have seen,
has historically been a favorable one for financial assets. With wage inflation
at 2.5% and productivity up 2.5%, there has been zero wage inflation -- one of
the key contributors to inflation indices. Today, however, based on the mixed
economic signals we have been seeing, the economy seems somewhere between zero
growth and a soft landing. Major market advances late in an economic cycle have
typically represented a period of speculative excess. This has been attested to
somewhat in an overheated technology market which continues today. The market,
however, eventually realizes that prices are significantly greater than the
underlying value, and adjusts appropriately.
This does not bode well for equities.
To this end, in the FundManager Funds, we have continued to reduce the
inherent risk in the marketplace by increasing diversification. This is
reflected in the following changes which have been made since we last reported
to you for the six months ended March 31, 1995. We will review these changes
series by series.
AGGRESSIVE GROWTH: 1) Guardian Park Avenue, which follows a quantitative
approach, was reclassified as a conservative growth fund and transferred to
FundManager Growth. Even though momentum indicators play a role in security
selection -- a process generally regarded as aggressive -- overall, the
complexion of the portfolio is a conservative one. 2) FPA Paramount was also
transferred to FundManager Growth, on the basis of the portfolio manager's
(William Sams) use of cash as a means of dampening the volatility of positions
which would otherwise be deemed aggressive. 3) Third Avenue Value, which
utilizes an investment style quite similar to that of Mutual Beacon, a holding
within FundManager Growth, was transferred as well. It should be noted that our
overlap studies consistently show quite different positions for these two
"bottom fishers", the similarity in style notwithstanding. 4) SoGen
International, formerly in FundManager Growth, was transferred into this series
for consistency purposes; i.e. all three global funds -- SoGen, Templeton Growth
and New Perspective -- are now held in the same series. 5) Royce Premier,
managed by Chuck Royce -- the longtime portfolio manager of Penn Mutual Fund, an
earlier holding in the Aggressive Growth series -- has been added. This fund
adheres to the original investment guidelines of Penn Mutual, before they were
expanded to accommodate explosive growth in assets.
GROWTH: 1) Putnam Vista was dropped due to its erratic performance (lack of
consistency) and the well-reported turmoil within the Putnam shop. 2) AMCAP was
also dropped for performance reasons. 3) SoGen International was transferred to
FundManager Aggressive, and FPA Paramount, Guardian Park Avenue, and Third
Avenue Value were transferred from FundManager Aggressive as explained above. 4)
Yacktman Fund was added to the Growth series. Its portfolio manager, Donald
Yacktman, for many years ran Selected American Shares (a long time holding of
FundManager Growth); now that Yacktman Fund has achieved "critical mass", we
wanted this fine portfolio manager included once again.
GROWTH & INCOME: 1) Invesco Industrial Income, which has been on our "watch"
list since the departure last year of its long-time portfolio manager, John
Kaweske, was dropped.
BOND FUND: Given the economic scenario, low inflation and flat corporate
earnings, we continue to be very positive on bonds. In fact, we believe that
when the Federal Reserve Board acknowledges a slowing economy, they could lower
the Fed Funds rate even further from the current 5.75% to a possible 5.25%. In
addition, with inflation hovering around 2%-3% and real rates approximately
4%-5%, we continue to be positive on bonds. To this end, we increased the
duration of the portfolio from 5.1 to 5.6 years -- six months longer than the
Lehman Brothers Government Corporate Index. This was achieved by increasing the
weightings in our longer term bond funds, and reducing that of the shorter term
bond funds.
MANAGED TOTAL RETURN: 1) Given our positive outlook on bonds, not only did we
increase the duration of the portfolio to 5.6 years as explained above, but we
also increased our allocation to bond funds. The special category, inflation
hedge funds, were liquidated, since we felt that inflation was no longer a
threat. The current asset allocation is 10.2% in aggressive growth funds, 15.7%
in growth funds, 15.6% in growth and income funds, 54.7% in bond funds and 4.0%
in money market funds and short-term investments. 2) SoGen International was
reclassified as an aggressive growth fund, and Guardian Park Avenue Fund was
reclassified as a growth fund, for reasons explained above.
Audited financial statements and portfolios of each Fund's investments at
September 30, 1995 follow. We look forward to serving you in the coming fiscal
year and appreciate your continued support.
Respectfully submitted,
/s/ Michael D. Hirsch /s/ Michelle P. Graham-Lyons
Portfolio Manager Co-Portfolio Manager
Michael D. Hirsch Michelle P. Graham-Lyons
<PAGE>
FUNDMANAGER TRUST FUNDS PERFORMANCE RESULTS
(AVERAGE ANNUALIZED RATES OF RETURN)
- -------------------------------------------------------------------------------
Growth Managed
Aggresive & Total
Growth Growth Income Bond Return
- -------------------------------------------------------------------------------
Calendar To Date 26.0% 24.4% 25.3% 11.0% 15.2%
- -------------------------------------------------------------------------------
12 Months Ending 9/30/95 24.3% 22.6% 23.3% 10.8% 14.3%
- -------------------------------------------------------------------------------
Latest 3 Years 15.5% 14.1% 13.7% 5.5% 8.3%
- -------------------------------------------------------------------------------
Latest 5 Years 17.1% 15.9% 15.3% 8.6% 10.6%
- -------------------------------------------------------------------------------
Latest 10 Years 12.6% 12.0% 11.6% 7.3% N/A
- -------------------------------------------------------------------------------
Inception To Date
(Annualized)* 12.8% 12.3% 11.9% 7.8% 8.9%
- -------------------------------------------------------------------------------
*Funds began operation in November 1984 except Managed Total Return which
began August 1988.
The performance quoted represents past performance and does not imply
future results. Economic and market conditions change and both will cause
investment return and principal value of an investment to fluctuate.
Therefore, when redeemed, your shares may be worth more or less than your
original investment. Effective May 8, 1995, the Funds no longer impose a
one-time sales charge.
For more information about the FundManager Trust Funds, including
expenses, a prospectus can be obtained by contacting the Funds'
Distributors, or writing to 6 St. James Avenue, Boston, MA 02116. Please
read the prospectus carefully before investing.
COMPARISON OF A $10,000 INVESTMENT IN THE
FUNDMANAGER TRUST AGGRESIVE GROWTH FUND AND
MICROPAL EQUITY U.S. AGGRESSIVE INDEX
Line graph with two axes: the X-axis represents years of operations; the Y-axis
represents dollar value. The graph plots two lines: the first line represents
the growth of a ten thousand dollar investment in the Fund from November, 1984
to September, 1995; the second line represents the growth of a ten thousand
dollar investment in a portfolio of securities reflecting the composition of the
Micropal Equity U.S. Aggressive Index for the same time period. The graph points
are as follows:
Year Fund Micropal
11/84 9,850.00 9,850.00
9/85 11,105.09 11,018.82
9/86 13,536.35 14,065.85
9/87 17,634.88 18,897.03
9/88 15,401.97 16,416.08
9/89 19,458.53 21,285.54
9/90 16,496.39 17,820.15
9/91 22,246.18 24,333.38
9/92 23,651.79 25,970.64
9/93 28,353.13 32,555.36
9/94 29,283.27 31,715.24
9/95 36,950.80 41,156.36
<PAGE>
COMPARISON OF A $10,000 INVESTMENT IN THE
FUNDMANAGER TRUST GROWTH FUND AND
MICROPAL EQUITY U.S. GROWTH INDEX
Line graph with two axes: the X-axis represents years of operations; the Y-axis
represents dollar value. The graph plots two lines: the first line represents
the growth of a ten thousand dollar investment in the Fund from November, 1984
to September, 1995; the second line represents the growth of a ten thousand
dollar investment in a portfolio of securities reflecting the composition of the
Micropal Equity U.S. Growth Index for the same time period. The graph points are
as follows:
Year Fund Micropal
11/84 9,850.00 9,850.00
9/85 11,188.44 11,273.13
9/86 13,548.22 14,427.82
9/87 17,081.29 19,492.38
9/88 15,814.35 17,373.40
9/89 19,502.33 22,563.01
9/90 16,704.06 19,682.50
9/91 21,471.01 26,694.02
9/92 23,493.65 28,748.09
9/93 27,246.37 33,922.89
9/94 28,464.50 33,946.02
9/95 35,417.54 43,195.47
<PAGE>
COMPARISON OF A $10,000 INVESTMENT IN THE
FUNDMANAGER TRUST GROWTH & INCOME FUND AND
MICROPAL EQUITY U.S. GROWTH & INCOME INDEX
Line graph with two axes: the X-axis represents years of operations; the Y-axis
represents dollar value. The graph plots two lines: the first line represents
the growth of a ten thousand dollar investment in the Fund from November, 1984
to September, 1995; the second line represents the growth of a ten thousand
dollar investment in a portfolio of securities reflecting the composition of the
Micropal Equity U.S. Growth & Income Index for the same time period. The graph
points are as follows:
Year Fund Micropal
11/84 9,850.00 9,850.00
9/85 11,192.01 11,253.68
9/86 13,605.48 14,410.45
9/87 16,283.80 18,810.29
9/88 15,724.60 17,209.92
9/89 19,291.20 21,680.85
9/90 16,430.57 19,241.59
9/91 20,739.76 24,855.79
9/92 22,774.91 27,301.55
9/93 26,297.46 31,513.71
9/94 27,169.83 31,649.97
9/95 34,010.41 39,668.56
<PAGE>
COMPARISON OF A $10,000 INVESTMENT IN THE
FUNDMANAGER TRUST BOND FUND AND
LEHMAN GOV'T CORPORATE BOND INDEX
Line graph with two axes: the X-axis represents years of operations; the Y-axis
represents dollar value. The graph plots two lines: the first line represents
the growth of a ten thousand dollar investment in the Fund from November, 1984
to September, 1995; the second line represents the growth of a ten thousand
dollar investment in a portfolio of securities reflecting the composition of the
Lehman Government Corporate Bond Index for the same time period. The graph
points are as follows:
Year Fund Lehman
11/84 9,850.00 9,850.00
9/85 10,936.15 11,106.82
9/86 12,215.12 13,403.15
9/87 12,426.47 13,351.81
9/88 13,524.08 15,057.17
9/89 14,499.36 16,761.37
9/90 14,858.69 17,893.51
9/91 17,038.55 20,731.01
9/92 19,099.83 23,610.59
9/93 21,093.40 26,160.90
9/94 20,337.85 25,077.01
9/95 22,876.16 29,113.17
<PAGE>
COMPARISON OF A $10,000 INVESTMENT IN THE
FUNDMANAGER TRUST MANAGED TOTAL RETURN FUND
AND MICROPAL BALANCED U.S. INDEX
Line graph with two axes: the X-axis represents years of operations; the Y-axis
represents dollar value. The graph plots two lines: the first line represents
the growth of a ten thousand dollar investment in the Fund from August, 1988 to
September, 1995; the second line represents the growth of a ten thousand dollar
investment in a portfolio of securities reflecting the composition of the
Micropal Balanced U.S. Index for the same time period.
The graph points are as follows:
Year Fund Micropal
8/88 9,850.00 9,850.00
9/88 10.078.61 10,122.98
9/89 11,601.24 12,084.01
9/90 11,093.44 11,489.78
9/91 13,320.86 14,217.51
9/92 14,445.62 15,690.56
9/93 16,009.72 17,778.90
9/94 16,032.14 17,492.02
9/95 18,608.12 21,012.41
<PAGE>
THE FUNDMANAGER TRUST FAMILY
OF MUTUAL FUNDS
AGGRESSIVE GROWTH FUND
High capital appreciation
Concentrates on funds which invest in smaller capitalization,
over-the-counter stocks selected for their growth potential. Regard for current
income is incidental. For long-term investment goals such as education, home
ownership, retirement.
GROWTH FUND
Modest capital appreciation
Consists primarily of funds which invest in Fortune 1000 companies noted for
their steady capital appreciation. Income from dividends is also a factor.
Especially suitable for investors with 5 to 10 year time horizons.
GROWTH & INCOME FUND
Income and modest capital appreciation
Attempts to strike a balance between steady capital appreciation and income.
For conservative investors interested in limited exposure to the equities
market.
BOND FUND
Monthly income
Specializes in bond funds which invest in short- or long-term fixed
securities with high yields. For investors interested in supplementing their
retirement income.
MANAGED TOTAL RETURN FUND
Asset allocation
Attempts to provide the best overall return consistent with prudent risk by
investing in underlying mutual funds in all asset classes: aggressive, growth,
growth & income, fixed income and money market.
THE FUNDMANAGER TRUST FUNDS 4 STEP
SELECTION PROCESS
1 Universe of 6000 mutual funds (excluding money market)
2 120+ Individual Funds with consistent performance selected & monitored by
M.D. Hirsch Division of Freedom Capital Management Corporation
3 40-50 Individual Funds are selected for classification into 5 specific fund
groups
4 About 10-15 funds are then selected to create a single FundManager Trust
Fund.*
AGGRESSIVE GROWTH FUND
FPA Capital Fund, SoGen International Fund, Inc., New Perspective Fund,
Brandywine Fund, New York Venture Fund, Harbor Capital Appreciation Fund
GROWTH FUND
Clipper Fund, Dodge & Cox Stock Fund, Mutual Beacon Fund, Gabelli Asset
Fund, FPA Paramount Fund, Guardian Park Avenue Fund, Inc.
GROWTH & INCOME FUND
T. Rowe Price Equity Income Fund, Fidelity Advisor Equity Income Fund,
AIM Charter Fund, Vanguard Equity Income Fund, Inc., Washington Mutual
Investors Fund
BOND FUND
IDS Selective Fund, Putnam Income Fund (Class A), PIMCO Total Return
Fund, Franklin U.S. Government Securities Fund, Vanguard Fixed-Income
Securities Fund, Inc. -- U.S. Treasury Bond Portfolio, Bernstein Intermediate
Duration Portfolio, Bernstein Short Duration Plus Fund
MANAGED TOTAL RETURN
Franklin U.S. Government Securities Fund, Bernstein Intermediate Duration
Portfolio, PIMCO Total Return Fund, New York Venture Fund, SoGen
International Fund, Inc., AIM Charter Fund, Neuberger & Berman Guardian Fund,
T. Rowe Price Equity Income Fund
*Sampling of principal funds held by FundManager Trust Funds as of 9/30/95.
FundManager Trust Funds' holdings may change over time.
<PAGE>
AGGRESSIVE GROWTH FUND
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1995
NUMBER VALUE
OF SHARES COST (NOTE 2)
--------- --------------- ---------------
CAPITAL APPRECIATION FUNDS -- (99.7% OF NET ASSETS)
128,445 Brandywine Fund ................ $ 3,230,230 $ 4,356,840
121,371 FPA Capital Fund, Inc. ......... 2,637,303 3,461,491
140,513 Harbor Capital Appreciation Fund 2,480,839 3,254,274
261,026 New Perspective Fund, Inc. ..... 3,857,400 4,434,832
291,999 New York Venture Fund, Inc. .... 3,589,882 4,496,784
70,288 Pioneer Three Fund ............. 1,327,330 1,509,794
420,631 Royce Premier Fund ............. 3,022,365 3,217,829
172,419 SoGen International Fund, Inc. . 4,233,900 4,415,663
227,816 Templeton Growth Fund .......... 3,908,506 4,417,355
----------- -----------
28,287,755 33,564,862
----------- -----------
SHORT-TERM FUND -- (0.3% OF NET ASSETS)
110,410 TrustFunds Liquid Asset -- Prime
Obligation ...................... 110,410 110,410
----------- -----------
TOTAL INVESTMENTS ............... $28,398,165 33,675,272
=========== -----------
CASH ..................................................... 2
RECEIVABLE FOR FUND SHARES SOLD .......................... 67,603
DIVIDENDS RECEIVABLE ..................................... 1,621
ADVISORY FEE PAYABLE (NOTE 4) ............................ (11,813)
ADMINISTRATIVE SERVICE FEE PAYABLE (NOTE 4) .............. (5,655)
DISTRIBUTION EXPENSE PAYABLE (NOTE 4) .................... (34,936)
OTHER ASSETS LESS LIABILITIES ............................ (24,432)
-----------
NET ASSETS -- Applicable to 1,838,433 shares of beneficial
interest outstanding (unlimited number of
shares authorized) -- (note 5) ............. $33,667,662
===========
Net Asset Value Per Share ................................ $18.31
======
See accompanying notes to financial statements
<PAGE>
AGGRESSIVE GROWTH FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
Investment Income:
Dividend income ....................................... $ 357,196
Expenses:
Advisory fee (note 4) ................ $ 183,747
Transfer agent ....................... 37,528
Distribution expenses (note 4) ....... 94,126
Shareholder servicing fees (note 4) .. 78,639
Administrative services fee (note 4) . 91,873
Fund accounting ...................... 39,810
Audit ................................ 13,337
Reports to shareholders .............. 9,468
Custodian fees and expenses .......... 24,331
Legal ................................ 1,331
Registration fees .................... 22,579
Trustees' fees (note 4) .............. 3,678
Insurance expense .................... 2,677
Miscellaneous ........................ 6,072
-----------
Total expenses .......................................... 609,196
----------
Investment loss -- net .................................. (252,000)
----------
Realized Gain on Investments:
Proceeds from sales .................. 54,888,534
Cost of securities sold+ ............... 50,906,559
----------
Net realized gain on investment transactions ............ 3,981,975
Net realized gains received from underlying funds ....... 1,753,656
----------
5,735,631
Net Unrealized Appreciation of
Investments:
Beginning of year .................. 2,726,414
End of year ........................ 5,277,107
----------
Change in net unrealized appreciation ................... 2,550,693
----------
Net realized gain and change in net unrealized
appreciation .......................................... 8,286,324
----------
Net increase in net assets resulting from operations .... $8,034,324
==========
+ Cost of securities purchased for the year ended September 30, 1995 aggregated
$43,620,046.
See accompanying notes to financial statements
<PAGE>
AGGRESSIVE GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Investment loss -- net ........... $ (252,000) $ (209,669)
Net realized gain on investment
transactions ................... 5,735,631 2,700,677
Change in unrealized appreciation 2,550,693 (1,342,923)
------------ ------------
Net increase in net assets resulting
from operations .................. 8,034,324 1,148,085
------------ ------------
Dividends and Distributions to
shareholders from:
Net investment income ............ (94,361) --
Net realized gain on investments . (1,959,235) (3,689,093)
------------ ------------
(2,053,596) (3,689,093)
------------ ------------
Net equalization credits (note 2) .. -- 58
------------ ------------
Amount transferred to paid-in
capital (note 2) ................. (87,454) --
------------ ------------
Capital Share Transactions:
Proceeds from sales of 574,640 and
1,372,875 shares, respectively . 9,328,987 21,814,160
Net asset value of 135,951 and
229,642 shares, respectively,
issued in reinvestment of
realized gain distributions .... 1,975,367 3,550,276
------------ ------------
11,304,354 25,364,436
Payments for redemptions of
1,297,234 and 1,046,233 shares,
respectively ................... (21,383,861) (16,258,127)
Amount transferred from
undistributed net investment
income ......................... 87,454 --
------------ ------------
Net increase (decrease) in net
assets from capital share
transactions ..................... (9,992,053) 9,106,309
------------ ------------
Total Increase (Decrease) in Net
Assets ........................... (4,098,779) 6,565,359
Net Assets:
Beginning of year ................ 37,766,441 31,201,082
------------ ------------
End of year (including
undistributed net investment
income of $24,146 and $87,454,
respectively) .................. $ 33,667,662 $ 37,766,441
============ ============
See accompanying notes to financial statements
<PAGE>
AGGRESSIVE GROWTH FUND
FINANCIAL HIGHLIGHTS
YEAR ENDED SEPTEMBER 30,
-------------------------------------------------
1995\3/ 1994 1993 1992 1991
---- ---- ---- ---- ----
Net Asset Value, beginning
of period ............... $15.57 $16.70 $14.71 $14.73 $11.84
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income
(loss)\1/ ............ (0.13) (0.08) (0.04) (0.04) 0.06
Net realized and
unrealized gain on
investments 3.70 0.62 2.87 0.99 3.81
------ ------ ------ ------ ------
Total from investment
operations ......... 3.57 0.54 2.83 0.95 3.87
------ ------ ------ ------ ------
Less dividends and
distributions:
Dividends to
shareholders from net
investment income .... -- -- -- -- (0.03)
------ ------ ------ ------ ------
Distributions to
shareholders from net
realized gain+ ....... (0.83) (1.67) (0.84) (0.97) (0.95)
------ ------ ------ ------ ------
Total distributions . (0.83) (1.67) (0.84) (0.97) (0.98)
------ ------ ------ ------ ------
Net Asset Value, end of
period ................. $18.31 $15.57 $16.70 $14.71 $14.73
====== ====== ====== ====== ======
Total return\2/ .......... 24.30% 3.30% 19.90% 6.30% 34.90%
Ratios/supplemental data:
Net assets, end of year
(in 000' s) .......... $33,668 $37,766 $31,201 $29,096 $22,644
Ratio of expenses to
average net assets\1/ 1.65% 1.70% 1.52% 1.61% 1.86%
Ratio of net investment
income (loss) to
average net assets ... (0.68%) (0.57%) (0.24%) (0.17%) 0.36%
Portfolio turnover rate 50% 43% 35% 24% 45%
- --------------------------------------------------------------------------------
+ Paid from realized net
short-term gain ... $0.04 $0.25 -- $0.03 $0.30
\1/ During the year ended September 30, 1991, affiliated parties voluntarily
waived a portion of their fees. If the voluntary waiver had not been in
effect, the ratio of expenses to average net assets for the year ended
September 30, 1991 would have been 1.95%. Expenses borne by the Fund's
Investment Adviser and Sponsor for the year ended September 30, 1991
amounted to $.01 per share.
\2/ Total return data does not reflect the sales load payable on purchases of
shares. Effective May 8, 1995, the Fund no longer imposes a one-time sales
charge.
\3/ On February 21, 1995, Freedom Capital Management became the Investment
Adviser.
See accompanying notes to financial statements
<PAGE>
GROWTH FUND
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1995
NUMBER MARKET VALUE
OF SHARES COST (NOTE 2)
- --------- ----------- -----------
LONG-TERM CAPITAL APPRECIATION FUNDS -- (95.0% OF NET ASSETS)
34,243 Clipper Fund ...................... $ 1,663,715 $ 2,142,615
30,066 Dodge & Cox Stock Fund ............ 1,578,594 2,048,079
134,013 FPA Paramount Fund, Inc. .......... 1,929,509 1,996,799
93,104 Fidelity Fund ..................... 1,762,310 2,077,146
75,871 Gabelli Asset Fund ................ 1,691,026 2,030,296
58,288 Guardian Park Avenue Fund, Inc..... 1,875,274 2,068,642
83,695 MAS Equity Fund ................... 1,692,937 2,044,666
54,549 Mutual Beacon Fund ................ 1,727,536 2,062,512
84,027 Neuberger & Berman Guardian Fund .. 1,524,546 2,028,400
71,573 Oakmark Fund ...................... 1,658,424 2,065,595
93,508 Third Avenue Value Fund .......... 1,937,938 2,042,223
171,740 Yacktman Fund ..................... 1,972,413 2,108,973
----------- -----------
21,014,222 24,715,946
----------- -----------
SHORT-TERM FUND -- (0.5% OF NET ASSETS)
139,720 TrustFunds Liquid Asset --
Prime Obligation .................. 139,720 139,720
----------- -----------
TOTAL INVESTMENTS ................. $21,153,942 24,855,666
=========== -----------
CASH ...................................................... 8
RECEIVABLE FOR FUND SHARES SOLD ........................... 1,237,037
DIVIDENDS RECEIVABLE ...................................... 15,561
ADVISORY FEE PAYABLE (NOTE 4) ............................. (10,483)
ADMINISTRATIVE SERVICE FEE PAYABLE (NOTE 4) ............... (4,388)
DISTRIBUTION EXPENSE PAYABLE (NOTE 4) ..................... (27,958)
OTHER ASSETS LESS LIABILITIES ............................. (43,502)
-----------
NET ASSETS -- Applicable to 1,612,567 shares of beneficial
interest outstanding (unlimited number of
shares authorized) -- (note 5) .............. $26,021,941
===========
Net Asset Value Per Share ................................. $16.14
======
See accompanying notes to financial statements
<PAGE>
GROWTH FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
Investment Income:
Dividend income ...................................... $ 503,564
Expenses:
Advisory fee (note 4) ............... $ 156,209
Transfer agent ...................... 36,358
Distribution expenses (note 4) ...... 92,758
Shareholder servicing fees (note 4) . 48,153
Administrative services fee (note 4) 78,104
Fund accounting ..................... 39,863
Audit ............................... 13,337
Reports to shareholders ............. 10,821
Custodian fees and expenses ......... 20,454
Legal ............................... 1,892
Registration fees ................... 28,217
Trustees' fees (note 4) ............. 4,087
Insurance expense ................... 2,821
Miscellaneous ....................... 4,163
-----------
Total expenses ......................................... 537,237
----------
Investment loss -- net ................................. (33,673)
----------
Realized Gain on Investments:
Proceeds from sales ................. 48,009,927
Cost of securities sold+ ............ 44,419,295
-----------
Net realized gain on investment transactions ........... 3,590,632
Net realized gains received from underlying funds ...... 1,088,716
----------
4,679,348
Net Unrealized Appreciation of
Investments:
Beginning of year ................. 2,134,575
End of year ....................... 3,701,724
-----------
Change in net unrealized appreciation .................. 1,567,149
----------
Net realized gain and change in net unrealized
appreciation ......................................... 6,246,497
----------
Net increase in net assets resulting from operations ... $6,212,824
==========
+ Cost of securities purchased for the year ended
September 30, 1995 aggregated $33,389,491.
See accompanying notes to financial statements
<PAGE>
GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994
------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Investment income (loss) -- net .. $ (33,673) $ (155,249)
Net realized gain on investment
transactions ................... 4,679,348 2,496,584
Change in unrealized appreciation 1,567,149 (882,955)
----------- -----------
Net increase in net assets resulting
from operations .................. 6,212,824 1,458,380
----------- -----------
Dividends and Distributions to
shareholders from:
Net investment income ............ (202,424) --
Net realized gain on investments . (1,998,155) (2,059,539)
----------- -----------
(2,200,579) (2,059,539)
----------- -----------
Net equalization credits (note 2) .. -- 307
----------- -----------
Amount transferred to paid-in
capital (note 2) ................. (14,113) --
----------- -----------
Capital Share Transactions:
Proceeds from sales of 408,816 and
1,402,392 shares, respectively . 6,008,823 19,558,903
Net asset value of 157,112 and
139,777 shares, respectively,
issued in reinvestment of net
realized gain distributions .... 2,076,414 1,943,386
----------- -----------
8,085,237 21,502,289
Payments for redemptions of
1,380,354 and 614,296 shares,
respectively ................... (20,280,254) (8,615,951)
Amount transferred from
undistributed net investment
income ......................... 14,113 --
----------- -----------
Net increase (decrease) in net
assets from capital share
transactions ................... (12,180,904) 12,886,338
----------- -----------
Total Increase (Decrease) in Net
Assets ........................... (8,182,772) 12,285,486
Net Assets:
Beginning of year ................ 34,204,713 21,919,227
----------- -----------
End of year (including
undistributed net investment
income of $63,122 and $23,323,
respectively) .................. $26,021,941 $34,204,713
=========== ===========
See accompanying notes to financial statements
<PAGE>
GROWTH FUND
FINANCIAL HIGHLIGHTS
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------
1995\3/ 1994 1993 1992 1991
---- ---- ---- ---- ----
Net Asset Value, beginning
of year ................. $14.09 $14.62 $14.40 $13.96 $11.68
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income
(loss)\1/ ............ (0.02) (0.05) 0.02 0.07 0.14
Net realized and
unrealized gain on
investments .......... 2.99 0.69 2.10 1.23 3.01
------- ------- ------- ------- -------
Total from investment
operations ......... 2.97 0.64 2.12 1.30 3.15
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends to shareholders
from net investment
income ................ -- -- -- (0.09) (0.37)
Distributions to
shareholders from net
realized gain+ (0.92) (1.17) (1.90) (0.77) (0.50)
------- ------- ------- ------- -------
Total distributions . (0.92) (1.17) (1.90) (0.86) (0.87)
------- ------- ------- ------- -------
Net Asset Value, end of
year .................... $16.14 $14.09 $14.62 $14.40 $13.96
====== ====== ====== ====== ======
Total return\2/ .......... 22.6% 4.50% 16.00% 9.40% 28.50%
Ratios/supplemental data:
Net assets, end of year
(in 000's) ............ $26,022 $34,205 $21,919 $21,420 $26,336
Ratio of expenses to
average net assets\1/ . 1.71% 1.71% 1.70% 1.60% 1.90%
Ratio of net investment
income (loss) to
average net assets .... (0.11%) (0.52%) 0.15% 0.59% 1.21%
Portfolio turnover
rate .................. 68% 44% 40% 44% 54%
- ------------------------------------------------------------------------------
+ Paid from realized net
short-term gain ...... $0.10 $0.22 $0.16 $0.03 $0.06
\1/ During the year ended September 30, 1991, affiliated parties voluntarily
waived a portion of their fees. If the voluntary waiver had not been in
effect, the ratio of expenses to average net assets for the year ended
September 30, 1991 would have been 1.92%. Expenses borne by the Fund's
Investment Adviser and Sponsor amounted to less than $.01 per share for the
year ended September 30, 1991.
\2/ Total return data does not reflect the sales load payable on purchases of
shares. Effective May 8, 1995, the Fund no longer imposes a one-time sales
charge.
\3/ On February 21, 1995, Freedom Capital Management became the Investment
Adviser.
See accompanying notes to financial statements
<PAGE>
GROWTH & INCOME FUND
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1995
NUMBER MARKET VALUE
OF SHARES COST (NOTE 2)
--------- ----------- ------------
COMMON STOCK AND BOND FUNDS -- (99.6% OF NET ASSETS)
433,713 AIM Charter Fund .......... $ 3,729,966 $ 4,692,776
445,304 Affiliated Fund ........... 4,766,790 5,437,163
164,375 Fidelity Advisor Equity
Income Fund ............... 2,039,712 3,203,664
91,240 Hotchkis & Wiley Equity
Income Fund ............... 1,481,017 1,671,520
267,364 T. Rowe Price Equity Income
Fund ...................... 4,496,262 5,111,998
329,039 Vanguard Equity Income Fund,
Inc. ...................... 4,520,795 5,149,455
239,675 Washington Investors Mutual
Fund, Inc. ................ 4,277,042 5,155,400
214,440 Wellington Fund, Inc. ..... 4,366,443 5,080,080
----------- -----------
29,678,027 35,502,056
----------- -----------
SHORT-TERM FUND -- (0.6% OF NET ASSETS)
213,270 TrustFunds Liquid Asset --
Prime Obligation .......... 213,270 213,270
----------- -----------
TOTAL INVESTMENTS ......... $29,891,297 35,715,326
=========== -----------
CASH ...................................................... 5
RECEIVABLE FOR FUND SHARES SOLD ........................... 22,885
DIVIDENDS RECEIVABLE ...................................... 18,043
ADVISORY FEE PAYABLE (NOTE 4) ............................. (15,371)
ADMINISTRATION SERVICE FEE PAYABLE (NOTE 4) ............... (3,344)
DISTRIBUTION EXPENSE PAYABLE (NOTE 4) ..................... (50,069)
OTHER ASSETS LESS LIABILITIES ............................. (44,051)
-----------
NET ASSETS -- Applicable to 1,949,419 shares of beneficial interest
outstanding (unlimited number of shares
authorized) -- (note 5) ..................... $35,643,424
===========
Net Asset Value Per Share ................................. $18.28
======
See accompanying notes to financial statements
<PAGE>
GROWTH & INCOME FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
Investment Income:
Dividend income ....................................... $1,526,211
Expenses:
Advisory fee (note 4) ............... $ 230,166
Transfer agent ...................... 36,280
Distribution expenses (note 4) ...... 144,285
Shareholder servicing fees (note 4) . 65,082
Administrative services fee (note 4) 115,086
Fund accounting ..................... 39,837
Audit ............................... 13,337
Reports to shareholders ............. 9,955
Custodian fees and expenses ......... 30,592
Legal ............................... 4,277
Registration fees ................... 27,315
Trustees' fees (note 4) ............. 4,258
Insurance expense ................... 4,269
Miscellaneous ....................... 9,049
-----------
Total expenses .......................................... 733,788
----------
Investment income -- net ................................ 792,423
----------
Realized Gain on Investments:
Proceeds from sales ................. 46,997,903
Cost of securities sold+ ............ 42,672,296
-----------
Net realized gain on investment transactions ............ 4,325,607
Net realized gains received from underlying funds ....... 1,500,719
----------
5,826,326
Net Unrealized Appreciation of
Investments:
Beginning of year ................... 2,982,498
End of year ......................... 5,824,029
-----------
Change in net unrealized appreciation ................... 2,841,531
----------
Net realized gain and change in net unrealized
appreciation .......................................... 8,667,857
----------
Net increase in net assets resulting from operations .... $9,460,280
==========
+ Cost of securities purchased for the year ended
September 30, 1995 aggregated $22,764,688.
See accompanying notes to financial statements
<PAGE>
GROWTH & INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994
------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Investment income -- net ......... $ 792,423 $ 949,609
Net realized gain on investment
transactions ................... 5,826,326 3,417,145
Change in unrealized appreciation 2,841,531 (2,873,842)
------------ -----------
Net increase in net assets resulting
from operations .................. 9,460,280 1,492,912
------------ -----------
Dividends and Distributions to
shareholders from:
Net investment income ............ (999,120) (905,250)
Net realized gain on investments . (2,699,191) (2,222,141)
------------ -----------
(3,698,311) (3,127,391)
------------ -----------
Net equalization credits (note 2) .. -- 126,703
------------ -----------
Amount transferred to paid-in
capital (note 2) ................. 307,338 --
------------ -----------
Capital Share Transactions:
Proceeds from sales of 336,532 and
1,214,669 shares, respectively . 5,564,507 19,704,816
Net asset value of 232,936 and
187,758 shares, respectively,
issued in reinvestment of net
investment income and net
realized gain distributions .... 3,511,810 2,962,489
------------ -----------
9,076,317 22,667,305
Payments for redemptions of
1,909,597 and 553,749 shares,
respectively ................... (31,789,889) (8,833,970)
Amount transferred from
undistributed net investment
income ....................... (307,338) --
------------ -----------
Net increase (decrease) in net
assets from capital share
transactions ................... (23,020,910) 13,833,335
------------ -----------
Total Increase (Decrease) in Net
Assets ............................. (16,951,603) 12,325,559
Net Assets:
Beginning of year ................ 52,595,027 40,269,468
------------ -----------
End of year (including
undistributed net investment
income of $506,232 and $234,416,
respectively) .................. $ 35,643,424 $52,595,027
============ ===========
See accompanying notes to financial statements
<PAGE>
GROWTH & INCOME FUND
FINANCIAL HIGHLIGHTS
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------
1995\3/ 1994 1993 1992 1991
---- ---- ---- ---- ----
Net Asset Value, beginning
of year ................. $15.99 $16.50 $15.11 $14.39 $12.30
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income\1/ 0.27 0.35 0.28 0.31 0.49
Net realized and
unrealized gain on
investments ........... 3.19 0.18 1.97 1.07 2.59
------ ------ ------ ------ ------
Total from in vestment
operations ......... 3.46 0.53 2.25 1.38 3.08
------- ------- ------- ------- ------
Less dividends and distributions:
Dividends to shareholders
from net investment
income ................ (0.33) (0.30) (0.33) (0.29) (0.68)
Distributions to
shareholders from net
realized gain+ ........ (0.84) (0.74) (0.53) (0.37) (0.31)
------ ------ ------ ------ ------
Total distributions . (1.17) (1.04) (0.86) (0.66) (0.99)
------ ------ ------ ------ ------
Net Asset Value, end of
year .................... $18.28 $15.99 $16.50 $15.11 $14.39
====== ====== ====== ====== ======
Total return\2/ .......... 23.30% 3.30% 15.50% 9.80% 26.20%
Ratios/supplemental data:
Net assets, end of year
(in 000's) ............ $35,643 $52,595 $40,269 $36,603 $35,018
Ratio of expenses to
average net assets\1/ . 1.59% 1.55% 1.49% 1.50% 1.85%
Ratio of net investment
income to average net
assets ................ 1.72% 1.88% 1.77% 2.10% 3.67%
Portfolio turnover rate 12% 35% 24% 26% 48%
- --------------------------------------------------------------------------------
+ Paid from realized net
short-term gain ..... $ -- $0.14 $ 0.09 $ -- $ 0.05
\1/ During the year ended September 30, 1991, affiliated parties voluntarily
waived a portion of their fees. If the voluntary waiver had not been in
effect, the ratio of expenses to average net assets for the year ended
September 30, 1991 would have been 1.87%. Expenses borne by the Fund's
Investment Adviser and Sponsor amounted to less than $.01 per share for the
year ended September 30, 1991.
\2/ Total return data does not reflect the sales load payable on purchases of
shares. Effective May 8, 1995, the Fund no longer imposes a one-time sales
charge.
\3/ On February 21, 1995, Freedom Capital Management became the Investment
Adviser.
See accompanying notes to financial statements
<PAGE>
BOND FUND
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
NUMBER MARKET VALUE
OF SHARES COST (NOTE 2)
--------- ---- -------------
FIXED-INCOME FUNDS -- (99.2% OF NET ASSETS)
<S> <C> <C> <C>
629,288 Bernstein Intermediate Duration Portfolio ...... $ 8,301,757 $ 8,369,527
405,453 Bernstein Short Duration Plus Fund ............. 5,063,318 5,064,113
451,478 Bond Fund of America, Inc. ..................... 6,141,339 6,131,077
1,020,830 Franklin U.S. Government Securities Fund ....... 6,996,753 7,013,104
652,647 IDS Selective Fund, Inc ........................ 5,960,605 6,069,619
381,317 Massachusetts Financial Bond Fund (Class A) .... 5,108,311 5,094,392
676,289 PIMCO Low Duration Fund ........................ 6,711,604 6,742,597
1,084,516 PIMCO Total Return Fund ........................ 11,429,299 11,333,197
814,123 Putnam Income Fund (Class A) ................... 5,704,542 5,698,863
1,028,158 United Bond Fund ............................... 6,222,827 6,312,892
865,117 Vanguard Fixed Income Securities Fund --
U.S. Treasury Bond 8,866,430 8,945,314
----------- -----------
76,506,785 76,774,695
----------- -----------
SHORT-TERM FUND -- (0.0% OF NET ASSETS)
440 TrustFunds Liquid Asset -- Prime Obligation .... 440 440
----------- -----------
TOTAL INVESTMENTS .............................. $76,507,225 76,775,135
=========== -----------
RECEIVABLE FOR FUND SHARES SOLD .............................. 1,431,120
DIVIDENDS RECEIVABLE ......................................... 225,708
ADVISORY FEE PAYABLE (NOTE 4) ................................ (32,699)
ADMINISTRATIVE SERVICE FEE PAYABLE (NOTE 4) .................. (16,256)
DISTRIBUTION EXPENSE PAYABLE (NOTE 4) ........................ (91,460)
PAYABLE TO CUSTODIAN BANK .................................... (831,787)
OTHER ASSETS LESS LIABILITIES ................................ (41,145)
------------
NET ASSETS -- Applicable to 7,583,952 shares of beneficial
interest outstanding (unlimited number of
shares authorized) -- (note 5) ................. $77,418,616
===========
Net Asset Value Per Share .................................... $10.21
======
See accompanying notes to financial statements
</TABLE>
<PAGE>
BOND FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
Investment Income:
Dividend income ....................................... $5,043,620
Expenses:
Advisory fee (note 4) ........................ $ 368,185
Transfer agent ............................... 33,121
Distribution expenses (note 4) ............... 242,911
Shareholder servicing fees (note 4)........... 96,646
Administrative services fee (note 4).......... 172,206
Fund accounting .............................. 39,892
Audit ........................................ 13,232
Reports to shareholders ...................... 11,562
Custodian fees and expenses .................. 37,912
Legal ........................................ 2,979
Registration fees ............................ 34,244
Trustees' fees (note 4) ...................... 4,992
Insurance expense ............................ 6,253
Miscellaneous ................................ 4,386
------------
Total expenses ................................. 1,068,521
-----------
Investment income -- net ....................... 3,975,099
-----------
Realized Loss on Investments:
Proceeds from sales .......................... 98,634,447
Cost of securities sold+ ..................... 100,829,619
------------
Net realized loss on investment transactions ............. (2,195,172)
Net realized gains received from underlying funds ........ 53,368
----------
(2,141,804)
Net Unrealized Appreciation (Depreciation) of Investments:
Beginning of year ............................ (5,421,836)
End of year .................................. 267,910
------------
Change in net unrealized appreciation (depreciation) .... 5,689,746
----------
Net realized gain and change in net unrealized
appreciation (depreciation) ........................... 3,547,942
----------
Net increase in net assets resulting from operations .... $7,523,041
==========
+Cost of securities purchased for the year ended Sepember 30, 1995 aggregated
$94,989,237.
See accompanying notes to financial statements
<PAGE>
BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994
------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Investment income -- net ................ $ 3,975,099 $ 3,412,634
Net realized gain (loss) on
investment transactions ................ (2,141,804) 2,115,050
Change in unrealized appreciation
(depreciation) ......................... 5,689,746 (8,400,397)
----------- -----------
Net increase (decrease) in net
assets resulting from operations ........ 7,523,041 (2,872,713)
----------- -----------
Dividends and Distributions to shareholders from:
Net investment income ................... (3,486,674) (3,738,318)
Net realized gain on investments ........ -- (799,396)
---------- ---------
(3,486,674) (4,537,714)
---------- ----------
Net equalization credits (note 2) ......... -- 161,366
---------- ----------
Amount transferred to paid-in
capital (note 2) ........................ 42,638 --
---------- ----------
Capital Share Transactions:
Proceeds from sales of 4,074,856
and 3,508,420 shares,
respectively .......................... 40,505,765 36,202,988
Net asset value of 335,974 and
417,875 shares, respectively,
issued in reinvestment of net
investment income ..................... 3,277,106 4,233,498
---------- ----------
43,782,871 40,436,486
Payments for redemptions of
4,770,571 and 1,046,743 shares,
respectively .......................... (47,169,417) (10,475,636)
Amount transferred from net
investment income ................... (42,638) --
----------- -----------
Net increase (decrease) in net
assets from capital share
transactions .......................... (3,429,184) 29,960,850
----------- -----------
Total Increase in Net Assets .............. 649,821 22,711,789
Net Assets:
Beginning of year ....................... 76,768,795 54,057,006
---------- ----------
End of year (including
undistributed net investment
income of $869,167 and $338,104,
respectively) ......................... $77,418,616 $76,768,795
=========== ===========
See accompanying notes to financial statements
<PAGE>
BOND FUND
FINANCIAL HIGHLIGHTS
YEAR ENDED SEPTEMBER 30,
----------------------------------------
1995(3) 1994 1993 1992 1991
---- ---- ---- ---- ----
Net Asset Value, beginning of period $ 9.66 $10.67 $10.28 $ 9.75 $ 9.17
------ ------ ------ ------ ------
Income from investment operations:
Net investment income(1) ........ 0.52 0.48 0.60 0.64 0.70
Net realized and unrealized
gain (loss) on investments ..... 0.49 (0.84) 0.43 0.49 0.59
---- ----- ---- ---- ----
Total from investment
operations .................. 1.01 (0.36) 1.03 1.13 1.29
---- ----- ---- ---- ----
Less dividends and distributions:
Dividends to shareholders
from net investment income ..... (0.46) (0.53) (0.54) (0.60) (0.71)
Distributions to shareholders
from net realized gain ......... -- (0.12) (0.10) -- --
------ ------ ------ ------ ------
Total distributions ........... (0.46) (0.65) (0.64) (0.60) (0.71)
------ ------ ------ ------ ------
Net Asset Value, end of year ...... $10.21 $ 9.66 $10.67 $10.28 $ 9.75
====== ====== ====== ====== ======
Total return(2) ................... 10.80% (3.60%) 10.40% 12.10% 14.70%
Ratios/supplemental data:
Net assets, end of year
(in 000's) ..................... $77,419 $76,769 $54,057 $70,066 $57,632
Ratio of expenses to average
net assets(1) .................. 1.45% 1.43% 1.29% 1.28% 1.57%
Ratio of net investment
income to average net assets ... 5.38% 4.67% 5.70% 6.42% 7.00%
Portfolio turnover rate ......... 53% 41% 53% 21% 46%
- ------------------------------------------------------------------------------
(1)During the year ended September 30, 1991, affiliated parties voluntarily
waived a portion of their fees. If the voluntary waiver had not been in
effect, the ratio of expenses to average net assets for the year ended
September 30, 1991 would have been 1.64%. Expenses borne by the Fund's
Investment Adviser and Sponsor amounted to less than $.01 per share for the
year ended September 30, 1991.
(2)Total return data does not reflect the sales load payable on purchases of
shares. Effective May 8, 1995, the Fund no longer imposes a one-time sales
charge.
(3)On February 21, 1995, Freedom Capital Management became the Investment
Adviser.
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
MANAGED TOTAL RETURN FUND
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1995
NUMBER MARKET VALUE
OF SHARES COST (NOTE 2)
- --------- ---------- ------------
<S> <C> <C> <C>
FIXED-INCOME FUNDS -- (54.7% OF NET ASSETS)
78,854 Bernstein Intermediate Duration Portfolio ...................... $ 1,042,589 $ 1,048,761
36,496 Bernstein Short Duration Plus Fund ............................. 454,466 455,841
74,068 Bond Fund of America, Inc. ..................................... 1,018,880 1,005,844
134,810 Franklin U.S. Government Securities Fund ....................... 927,767 926,142
49,065 Massachusetts Financial Bond Fund (Class A) .................... 636,657 655,509
85,207 PIMCO Low Duration Fund ........................................ 848,036 849,510
105,867 PIMCO Total Return Fund ........................................ 1,120,920 1,106,309
192,342 Vanguard Admiral Fund, Inc. -- Long Term U.S. Treasury Portfolio 1,988,733 2,025,363
----------- -----------
TOTAL FIXED-INCOME FUNDS ....................................... 8,038,048 8,073,279
----------- -----------
GROWTH FUNDS -- (15.7% OF NET ASSETS)
8,469 Dodge & Cox Stock Fund ......................................... 459,021 576,901
25,742 Fidelity Fund .................................................. 490,271 574,306
15,746 Guardian Park Avenue Fund, Inc. ................................ 452,878 558,827
24,970 Neuberger & Berman Guardian Fund ............................... 462,830 602,769
----------- -----------
TOTAL GROWTH FUNDS ............................................. 1,865,000 2,312,803
----------- -----------
GROWTH & INCOME FUNDS -- (15.6% OF NET ASSETS)
39,166 AIM Charter Fund ............................................... 346,956 423,771
39,439 Affiliated Fund ................................................ 430,763 481,548
23,707 Fidelity Advisor Equity Income Fund ............................ 308,552 462,056
25,189 T. Rowe Price Equity Income Fund ............................... 396,817 481,614
28,885 Vanguard Equity Income Fund, Inc. .............................. 396,548 452,044
----------- -----------
TOTAL GROWTH & INCOME FUNDS .................................... 1,879,636 2,301,033
----------- -----------
AGGRESSIVE GROWTH FUNDS -- (10.2% OF NET ASSETS)
11,703 Brandywine Fund ................................................ 286,473 396,984
19,857 New Perspective Fund ........................................... 299,605 337,370
27,191 New York Venture Fund, Inc. .................................... 300,836 418,742
13,710 SoGen International Fund, Inc. ................................. 311,363 351,103
----------- -----------
TOTAL AGGRESSIVE GROWTH FUNDS .................................. 1,198,277 1,504,199
----------- -----------
12,980,961 14,191,314
----------- -----------
See accompanying notes to financial statements
<PAGE>
<CAPTION>
MANAGED TOTAL RETURN FUND
STATEMENT OF NET ASSETS (CONTINUED)
NUMBER MARKET VALUE
OF SHARES COST (NOTE 2)
- --------- ---------- ------------
<S> <C> <C> <C>
SHORT-TERM FUND -- (0.9% OF NET ASSETS)
130,920 TrustFunds Liquid Asset -- Prime Obligation .................... $ 130,920 $ 130,920
----------- -----------
SHORT-TERM INVESTMENTS -- (3.1%)
PRINCIPAL
AMOUNT
------
$250,000 Ford Motor Credit Co., 5.77%, October 5, 1995 .................. 250,000 250,000
200,000 Prudential Funding Corp., 5.78%, October 5, 1995 ............... 200,000 200,000
----------- -----------
TOTAL SHORT-TERM INVESTMENTS ................................... 450,000 450,000
----------- -----------
TOTAL INVESTMENTS .............................................. $13,561,881 14,772,234
=========== -----------
CASH ................................................................................. 5
RECEIVABLE FOR FUND SHARES SOLD ....................................................... 1,117
DIVIDENDS RECEIVABLE .................................................................. 24,492
INTEREST RECEIVABLE ................................................................... 145
ADVISORY FEE PAYABLE (NOTE 4) ......................................................... (6,379)
ADMINISTRATIVE SERVICE FEE PAYABLE (NOTE 4) ........................................... (3,222)
DISTRIBUTION EXPENSE PAYABLE (NOTE 4) ................................................. (8,907)
OTHER ASSETS LESS LIABILITIES ......................................................... (30,158)
---------
NET ASSETS -- Applicable to 1,266,151 shares of beneficial interest outstanding
(unlimited number of shares authorized) -- (note 5) ..................... $14,749,327
==========
Net Asset Value Per Share ............................................................. $11.65
======
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
MANAGED TOTAL RETURN FUND
STATEMENT OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1995
<S> <C> <C>
Investment Income:
Dividend income ..................................................................... $ 660,235
Interest income ..................................................................... 16,320
----------
Total investment income ............................................................... 676,555
Expenses:
Advisory fee (note 4) ............................................. $ 77,116
Transfer agent .................................................... 35,827
Distribution expenses (note 4) .................................... 38,071
Shareholder servicing fees (note 4) ............................... 37,061
Administrative services fee (note 4) .............................. 38,540
Fund accounting ................................................... 39,767
Audit ............................................................. 13,337
Reports to shareholders ........................................... 10,175
Custodian fees and expenses ....................................... 15,164
Legal ............................................................. 538
Registration fees ................................................. 10,698
Trustees' fees (note 4) ........................................... 3,219
Insurance expense ................................................. 1,835
Miscellaneous ..................................................... 1,578
-----------
Total expenses ........................................................................ 322,926
----------
Investment income -- net .............................................................. 353,629
----------
Realized Gain on Investments:
Proceeds from sales ............................................... 22,672,660
Cost of securities sold+ .......................................... 22,230,240
-----------
Net realized gain on investment transactions .......................................... 442,420
Net realized gains received from underlying funds ..................................... 249,457
----------
691,877
Net Unrealized Appreciation of Investments:
Beginning of year ............................................... 246,436
End of year ..................................................... 1,210,352
-----------
Change in net unrealized appreciation ................................................. 963,916
----------
Net realized gain and change in net unrealized appreciation ........................... 1,655,793
----------
Net increase in net assets resulting from operations .................................. $2,009,422
==========
+ Cost of securities purchased for the year ended September 30, 1995 aggregated $17,886,834.
</TABLE>
See accompanying notes to financial statements
<PAGE>
MANAGED TOTAL RETURN FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994
------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Investment income -- net ..................... $ 353,629 $ 353,128
Net realized gain on investment transactions . 691,877 1,203,086
Change in unrealized appreciation ............ 963,916 (1,642,182)
----------- -----------
Net increase (decrease) in net assets resulting
from operations .............................. 2,009,422 (85,968)
----------- -----------
Dividends and Distributions to shareholders from:
Net investment income ........................ (437,840) (658,763)
Net realized gain on investments ............. (1,100,015) (1,039,074)
----------- -----------
(1,537,855) (1,697,837)
----------- -----------
Net equalization credits (charges) (note 2) .... -- (61,053)
----------- -----------
Amount transferred to paid-in capital (note 2) . (89,941) --
----------- -----------
Capital Share Transactions:
Proceeds from sales of 151,194 and 542,301
shares, respectively ....................... 1,660,545 6,111,727
Net asset value of 146,354 and 148,126 shares,
respectively, issued in reinvestment of net
investment income and realized gain
distributions .............................. 1,495,028 1,664,934
----------- -----------
3,155,573 7,776,661
Payments for redemptions of 590,034 and
1,253,599 shares, respectively ............. (6,392,506) (13,936,251)
Amount transferred from net investment income 89,941 --
----------- -----------
Net decrease in net assets from capital share
transactions ............................... (3,146,992) (6,159,590)
----------- -----------
Total Decrease in Net Assets ................... (2,765,366) (8,004,448)
Net Assets:
Beginning of year ............................ 17,514,693 25,519,141
----------- -----------
End of year (including undistributed net
investment income of $135,353 and $264,821,
respectively) .............................. $14,749,327 $17,514,693
=========== ===========
See accompanying notes to financial statements
<PAGE>
MANAGED TOTAL RETURN FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
--------------------------------------------------------------------
1995(3) 1994 1993 1992 1991
------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year ..................... $11.24 $12.03 $11.48 $11.07 $ 9.60
------ ------ ------ ------ ------
Income from investment operations:
Net investment income(1) ............................. 0.28 0.18 0.29 0.34 0.44
Net realized and unrealized gain (loss) on investments
.................................................... 1.18 (0.16) 0.90 0.57 1.42
------ ------ ------ ------ ------
Total from investment operations ................... 1.46 0.02 1.19 0.91 1.86
------ ------ ------ ------ ------
Less dividends and distributions:
Dividends to shareholders from net investment income . (0.30) (0.31) (0.26) (0.41) (0.39)
Distributions to shareholders from net realized gain+ (0.75) (0.50) (0.38) (0.09) --
------ ------ ------ ------ ------
Total distributions ................................ (1.05) (0.81) (0.64) (0.50) (0.39)
------ ------ ------ ------ ------
Net Asset Value, end of year ........................... $11.65 $11.24 $12.03 $11.48 $11.07
====== ====== ====== ====== ======
Total return(2) ........................................ 14.30% 0.10% 10.80% 8.40% 20.10%
Ratios/supplemental data:
Net assets, end of year (in 000's) ................... $14,749 $17,515 $25,519 $20,894 $14,678
Ratio of expenses to average net assets(1) ........... 2.09% 1.94% 1.80% 1.90% 2.00%
Ratio of net investment income to average net assets . 2.29% 1.60% 2.54% 3.09% 4.41%
Portfolio turnover rate .............................. 50% 50% 40% 37% 15%
- -----------------------------------------------------------------------------------------------------------------------------------
+ Paid from realized net short-term gain ............. $ -- $0.13 $0.08 $0.02 $ --
(1) During the years ended September 30, 1992 and 1991, affiliated parties voluntarily waived a portion of their fees. If the
voluntary waiver had not been in effect, the ratios of expenses to average net assets for the years ended September 30, 1992
and 1991 would have been 2.01% and 2.26%, respectively. Expenses borne by the Fund's Investment Adviser and Sponsor for the
years ended September 30, 1992 and 1991 amounted to $.01 and $.03 per share, respectively.
(2) Total return data does not reflect the sales load payable on purchases of shares. Effective May 8, 1995, the Fund no longer
imposes a one-time sales charge.
(3) On February 21, 1995, Freedom Capital Management became Investment Adviser.
</TABLE>
See accompanying notes to financial statements
<PAGE>
FUNDMANAGER TRUST FUNDS
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION AND SHARES OF THE FUNDS. FundManager Trust (the "Trust") consists
of a series of five separately managed portfolios (collectively, the "Funds"),
each with distinct investment objectives. The following is the investment
objective of the five portfolios presented herein: Aggressive Growth Fund
(capital appreciation without regard to current income), Growth Fund (long-term
capital appreciation with current income a secondary consideration), Growth &
Income Fund (combination of capital appreciation and current income), Bond Fund,
formerly the Income Fund (high level of current income), and Managed Total
Return Fund (high total return, capital appreciation and current income). The
Trust is registered under the Investment Company Act of 1940, as amended, (the
"Act") as an open-end, diversified management investment company established as
a "Delaware business trust". Prior to May 8, 1995, the Funds were diversified
series of the Republic Funds (the "Predecessor Funds"), also an open-end
management investment company (Note 7).
The Trust retains M.D. Hirsch Division of Freedom Capital Management
Corporation ("Freedom") as Investment Adviser ("Adviser"), Signature Broker-
Dealer Services, Inc. ("Signature") as Administrator and a Distributor ("SBDS"),
and Tucker Anthony Incorporated and Sutro & Co. Incorporated as Distributors.
2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the Trust's
significant accounting policies:
(A) Security Valuation. Capital stock of other open-end investment
companies, are valued at their net asset value as reported by such
companies. In the absence of readily available market quotations,
investments are valued at fair value as determined by the Board of
Trustees. Short-term debt instruments are valued at amortized cost which
approximates market value.
(B) Security Transactions and Related Investment Income. Investment
transactions are accounted for on the trade date. Dividend income is
recorded on the ex-dividend date. Interest income is accrued as earned.
Identified cost of investments sold is used to calculate gains and losses
for both financial statement and federal income tax purposes.
(C) Expense Allocation. The Funds bear all costs of their operations
other than expenses specifically assumed by the Adviser or the
Distributors. Expenses directly attributable to a Fund are charged to that
Fund. Expenses incurred by the Trust with respect to any two or more Funds
are allocated in proportion to the net asset levels of each Fund, except
where allocations of direct expenses to each Fund can otherwise be made
fairly.
(D) Federal Income Taxes. Each Fund is treated as a separate taxable
entity for federal tax purposes. Each Fund has qualified and intends to
continue to qualify as a "regulated investment company" under Subchapter M
of the Internal Revenue Code, as amended, and to distribute substantially
all of its taxable income, including any net realized gains, to its
shareholders. Accordingly, no provision for federal income or excise tax is
required. At September 30, 1995, Bond Fund had approximate net capital loss
carryforwards on the basis of identified cost, for federal income tax
purposes of approximately 768,000. These capital loss carryforwards will be
used to offset any future realized gains to the extent permitted by the
Internal Revenue Code and thus will reduce the amount of distributions to
shareholders which would otherwise be necessary to relieve the Fund of any
liability for federal income tax. These capital losses expire on September
30, 1999.
(E) Income Equalization. Prior to October 1, 1994, the Funds followed
the accounting practice known as income equalization by which a portion of
the proceeds from sales and cost of repurchases of shares, equivalent on a
per share basis to the amount of undistributed net investment income on the
date of the transaction, was credited or charged to undistributed net
investment income. As a result, undistributed net investment income per
share was not affected by sales or redemptions of Fund shares. The Funds
discontinued equalization accounting as of October 1, 1994, and
reclassified net equalization credits (charges) in the amount of $87,454
for the Aggressive Growth Fund, $14,113 for the Growth Fund, ($307,338) for
the Growth & Income Fund, ($42,638) for the Bond Fund and $89,941 for the
Managed Total Return Fund, from undistributed net investment income to
paid-in capital. In management's opinion, discontinuation of equalization
accounting will result in less distortion of undistributed net investment
income as compared to income available to shareholders for distribution for
federal tax purposes. This change in accounting policy, shown on the
Statement of Changes in Net Assets for the year ended September 30, 1995,
has no effect on the net assets, the results of operations, or the net
asset value per share of the Funds and did not have a material effect on
the per share amounts shown in the Financial Highlights.
(F) Distributions to Shareholders. Dividends and Distributions to
shareholders are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences are primarily due to losses
deferred due to wash sales.
(G) Reclassification of Net Asset Accounts. During the year ended
September 30, 1995, the Funds reclassified the effects of certain
differences between the financial statement amounts and distributions
determined in accordance with income tax regulations. These differences
were reclassified [increase/(decrease)] from undistributed net investment
income and accumulated net realized gain/(loss) on investments to paid-in
capital as follows:
ACCUMULATED NET
UNDISTRIBUTED NET REALIZED GAIN/(LOSS)
INVESTMENT INCOME ON INVESTMENTS
----------------- --------------------
Aggressive Growth Fund .............. $370,507 $(370,507)
Growth Fund ......................... 290,009 (290,009)
Growth & Income Fund ................ 171,175 (171,175)
Bond Fund .......................... -- --
Managed Total Return Fund ........... 44,684 (44,684)
3. FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES. The cost and unrealized
appreciation (depreciation) in the value of investment securities (excluding
short-term investments) held at September 30, 1995 for federal income tax
purposes, are as follows:
<TABLE>
<CAPTION>
NET
GROSS GROSS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
AGGREGATE COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
-------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Aggressive Growth Fund .... $28,361,236 $5,203,625 -- $5,203,625
Growth Fund ............... 21,030,656 3,685,291 -- 3,685,291
Growth & Income Fund ...... 29,710,395 5,791,661 -- 5,791,661
Bond Fund ................. 77,010,695 209,312 $(445,312) (236,000)
Managed Total Return Fund . 13,010,647 1,214,873 (34,206) 1,180,667
</TABLE>
4. ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
(A) Advisory Fees. The Trust retains Freedom to act as Investment
Adviser. Freedom is responsible for the investment management of each
Fund's assets, including the responsibility for making investment decisions
and placing orders for the purchase and sale of the Funds' investments
directly with the issuers or with brokers or dealers selected by it in its
discretion, including the Distributors. Freedom also furnishes to the Board
of Trustees, which has overall responsibility for the business affairs of
the Trust, periodic reports on the investment performance of the Funds. For
its services as investment adviser, Freedom receives from each Fund a fee,
payable monthly, at the annual rate of 0.50% of each Fund's average daily
net assets up to $500 million and 0.40% of its average daily net assets in
excess of $500 million.
The amount of the advisory fee for each Fund is shown on each Fund's
statement of operations. During the year ended September 30, 1995,
aggregate advisory fees were $1,015,423. Prior to February 21, 1995,
Republic Asset Management ("Republic") served as investment adviser to the
Funds. For the period October 1, 1994 through February 20, 1995, Republic
received fees equal to $424,540.
(B) Administration. The Trust retains Signature to serve as
Administrator and a Distributor. Signature provides management and
administrative services necessary for the operation of the Trust, furnishes
office space and facilities required for conducting the business of the
Funds and pays the compensation of the Funds' officers affiliated with
Signature.
For these services, Signature receives from each Fund a fee, payable
monthly, at the annual rate of 0.25% of each Fund's average daily net
assets up to $50 million, 0.20% of its average daily net assets over $50
million up to $100 million and 0.15% of its average daily net assets in
excess of $100 million.
The amount of the administrative services fee for each Fund is shown
on each Fund's statement of operations. During the year ended September 30,
1995, the Funds paid aggregate administration fees of $495,809.
(C) Brokerage Commissions. Signature acts as primary broker for the
Trust's portfolio transactions for which it receives commissions or dealer
reallowances. During the year ended September 30, 1995, Signature received
dealer reallowances of $26,250 from Aggressive Growth Fund, $135 from
Growth Fund, $15,500 from Growth & Income Fund, $74,000 from Bond Fund, and
$15,055 from Managed Total Return Fund.
(D) Rule 12b-1 Plan Expenses. The Trust has adopted a noncompensatory
Distribution Plan and Agreement (the "Plan") pursuant to Rule 12b-1 of the
Act. The Plan provides for a monthly payment by the Funds to the
Distributors in amounts representing actual expenses incurred by the
Sponsor for marketing costs and services rendered in distributing Fund
shares at an annual rate not exceeding 0.50% of the average daily net
assets of each Fund.
The amount of distribution expenses for each Fund is shown on each
Fund's Statement of Operations. During the year ended September 30, 1995,
the Funds reimbursed Signature for aggregate distribution expenses of
$612,151.
(E) Shareholder Servicing Expenses. The Trust contracts with various
banks, trust companies, broker-dealers (other than the Distributors) or
other financial organizations (collectively, "Service Organizations") to
provide administrative services such as maintaining shareholder accounts
and records. Each Fund pays fees to Service Organizations in amounts up to
an annual rate of 0.25% of the daily net asset value of a Fund's shares
owned by shareholders with whom the Service Organization has a servicing
relationship.
The amount of shareholder servicing fees for each Fund is shown on
each Fund's Statement of Operations. During the year ended September 30,
1995, the Funds reimbursed Signature for aggregate shareholder servicing
fees of $325,581.
(F) Sales Charges. The Trust has a distribution agreement with
Signature under which Signature received aggregate sales charges of $2,323
for the year ended September 30, 1995. The sales charge was discontinued on
May 8, 1995.
(G) Trustees' Fees. Fees paid and out-of-pocket expenses reimbursed to
the Trustees aggregated $20,234 for the year ended September 30, 1995.
<PAGE>
5. NET ASSETS. Net Assets consist of:
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH GROWTH & BOND MANAGED TOTAL
GROWTH FUND FUND INCOME FUND FUND RETURN FUND
----------- -------- ----------- ---- ------------
<S> <C> <C> <C> <C> <C>
Net paid-in capital ................................. $23,193,103 $17,715,294 $23,331,585 $79,311,765 $12,818,588
Undistributed net investment income (loss) .......... 24,146 63,122 506,232 869,167 135,353
Accumulated realized gain (loss) on investments ..... 5,173,306 4,541,801 5,981,578 (3,030,226) 585,034
Net unrealized appreciation of investments .......... 5,277,107 3,701,724 5,824,029 267,910 1,210,352
--------- --------- --------- --------- ---------
Total capital ................................... $33,667,662 $26,021,941 $35,643,424 $77,418,616 $14,749,327
=========== =========== =========== =========== ===========
</TABLE>
6. DIVIDENDS DECLARED TO SHAREHOLDERS. On September 29, 1995, distributions of
$0.04, $0.075 and $0.05, aggregating $303,358, $146,206 and $63,308, were
declared from net investment income by the Trustees of Bond Fund, Growth and
Income Fund, and Managed Total Return, respectively. The dividends were ex-
dividend on October 2, 1995 and were paid on October 16, 1995, to shareholders
of record on September 29, 1995.
7. REORGANIZATION. On May 8, 1995, the following items were approved by a
majority of the outstanding voting securities of each of FundTrust Aggressive
Growth Fund, FundTrust Growth Fund, FundTrust Growth & Income Fund, FundTrust
Income Fund and FundTrust Managed Total Return Fund (collectively, the
"FundTrust Funds"): (i) the reorganization (the "Reorganization") of each
FundTrust Fund into a corresponding series of FundManager Trust (collectively,
the "FundManager Funds") and the adoption of an Agreement and Plan or
Reorganization; (ii) a Master Investment Advisory Contract and Supplements
between the Republic Funds with respect to the FundTrust Funds and Freedom
Capital Management Corporation to remain in effect until consummation of the
Reorganization; (iii) the authorization of each FundTrust Fund to vote its share
of the corresponding FundManager Fund to approve a proposed Master Investment
Advisory Contract and Supplements between the FundManager Trust and Freedom
Capital Management Corporation; (iv) the authorization of each FundTrust Fund to
vote its share of the corresponding FundManager Fund to elect Trustees of
FundManager Trust; (v) the authorization of each FundTrust Fund to vote its
share of the corresponding FundManager Fund to approve the Master Distribution
Plan and Supplements of FundManager Trust; (vi) the authorization of each
FundTrust Fund to vote its share of the corresponding FundManager Fund to ratify
the selection of Ernst & Young LLP as independent auditors of FundManager Trust
for its then current fiscal year.
8. SUBSEQUENT EVENT. On October 1, 1995, FundManager Trust created a new class
of shares to be distributed exclusively through managed account programs offered
by Tucker Anthony Incorporated and Sutro & Company, affiliates of the Adviser.
This new class of shares is also available to employees of the Adviser and its
affiliates through company retirement plans. This new class of shares is
currently not available for purchase outside of these programs.
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS To the Shareholders and
Trustees of FundManager Trust Funds:
We have audited the accompanying statements of net assets of FundManager
Trust (comprising, respectively, Aggressive Growth Fund, Growth Fund, Growth &
Income Fund, Bond Fund and Managed Total Return Fund, formerly Republic Funds)
(the "Trust"), as of September 30, 1995, and the related statements of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and financial highlights for
each of the four years in the period then ended. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for the
period ended September 30, 1991 were audited by other auditors whose report
dated November 25, 1991, expressed an unqualified opinion on those financial
highlights.
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, 1995, 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 FundManager Trust at September
30, 1995, the results of their operations for the year then ended, the changes
in their net assets for each of the two years in the period then ended and their
financial highlights for each of the four years in the period then ended, in
conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
November 10, 1995
<PAGE>
FUNDMANAGER FUNDS
- ---------------------------------------
The First Family in Multifund Investing
INVESTMENT ADVISER
Freedom Capital Management Corporation
M.D. Hirsch Division
One World Financial Center
New York, NY 10281
DISTRIBUTORS
Tucker Anthony, Incorporated
200 World Financial Center
New York, NY 10281
Sutro & Co., Inc.
201 California Street
San Francisco, CA 94111
Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, MA 02116
This report is for the information of the shareholders of the FundManager
Trust Funds. Its use in connection with any offering of the Funds' shares is
authorized only in case of a concurrent or prior delivery of the Funds'
current prospectus.
FOR SHAREHOLDER INFORMATION: (800) 344-9033
[recycle logo] Printed on recycled paper.
FUNDMANAGER FUNDS
- ---------------------------------------
The First Family in Multifund Investing
ANNUAL REPORT
SEPTEMBER 30, 1995
* AGGRESSIVE GROWTH FUND
* GROWTH FUND
* GROWTH & INCOME FUND
* BOND FUND
* MANAGED TOTAL RETURN FUND
