FUNDMANAGER PORTFOLIOS
THE FIRST FAMILY IN MULTIFUND INVESTING
INVESTMENT ADVISOR
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
Freedom Distributors Corporation
One Beacon Street
Boston, Massachusetts 02108
Edgewood Services, Inc.
Clearing Operations
P.O. Box 897
Pittsburgh, PA 15230-0897.
This report is for the information of the shareholders
of the FundManager Trust portfolios (`FundManager Portfolios'').
Its use in connection with any offering of the Portfolios'
shares is authorized only in case of a concurrent or prior
delivery of the Portfolios' current prospectus.
For Shareholder Information: (800) 344-9033
[LOGO] Printed on recycled paper.
FUNDMANAGER PORTFOLIOS
THE FIRST FAMILY IN MULTIFUND INVESTING
ANNUAL REPORT
SEPTEMBER 30, 1996
AGGRESSIVE GROWTH PORTFOLIO
GROWTH PORTFOLIO
GROWTH & INCOME PORTFOLIO
BOND PORTFOLIO
MANAGED TOTAL RETURN PORTFOLIO
PRESIDENT'S MESSAGE
- ---------------------------------------------------------
November 21, 1996
Dear Fellow Shareholders:
When we started our multifund concept in the early 70's, we
knew we were on to something good. We built our business one
client at a time, carefully designing portfolios of fund
managers, until the word got out that managing portfolios of
mutual funds provided our clients with diversification to
help grow their investments, and help reduce volatility.
Forward to 1996, and the FUNDMANAGER PORTFOLIOS, the new,
more accurate name of our funds of funds. Technically,
FundManager Portfolios are no different than other mutual
funds available, but from an investment viewpoint, each
portfolio holds a wide mix of other brand name mutual funds,
creating a potential risk adjusted return advantage. We
strive to provide a level of comfort in your investing by
choosing competitive funds from over 8,000 mutual funds
available today. We define our mission as picking the very
best mutual fund managers for our shareholders, and
monitoring their progress on a daily basis.
More importantly, your Portfolios are designed to be diverse
within themselves. Unlike some of our competitors, each
FundManager Portfolio owns a different set of mutual funds.
As an example, the Brandywine Fund is held ONLY in our
Aggressive Growth Portfolio. If you choose to diversify your
investments by owning multiple FundManager Portfolios, (which
we encourage) be assured that you will not be buying carbon
copies. Because the underlying funds could own the same
investments, the top holdings of all underlying funds in the
portfolios are monitored to pursue maximum diversification
and minimum duplication.
A word on diversification - it is not without compromise.
Investors must balance a desire to fully participate in the
markets against fears of losses. A prudent way to help lessen
the overall volatility of your investments - and their
reactions to market volatility - can be to invest a portion
of your assets in FundManager Portfolios.
FundManager seeks out those investors subscribing to a
long-term investment strategy, and we choose funds for the
longevity of managers and their long-term performance over
time. Our Portfolios are designed to bring to individuals the
type of multi-manager, multi-style investment management
normally reserved for very large institutional investors. We
are committed to building value added relationships with our
shareholders and welcome your questions and comments at (800)
344-9033.
In the coming months, we look forward to enjoying the ability
to service you with even more diligence as we proceed through
the management buyout of Freedom Securities from John Hancock
as discussed in your shareholder proxy letter.
Sincerely,
[SIGNATURE]
[Photo]
Charles B. Lipson
President
`We define our mission as picking the very best mutual fund
managers for our shareholders, and monitoring their progress
on a daily basis.''
MANAGEMENT DISCUSSION AND ANALYSIS
- --------------------------------------------------------------------------------
Dear Fellow Shareholders:
It is our pleasure to present you with this report covering the fiscal year
ended September 30, 1996.
The third quarter of 1996 began with a severe reversal during the first two
weeks of July. However, the upward trend in prices soon reasserted itself. As a
result, the FundManager Portfolios added to the gains reported in our Semiannual
Report.
This year's Annual Report includes a discussion of your Portfolios' sector
weightings. The financial press often reports on the performance of various
industries. Starting with this report, we will keep you apprised of each
Portfolio's primary sector weightings. Picking the right sector is typically
more important than picking the right stock; often, the worst performing stock
in the best performing sector outperforms the best performing stock in the worst
performing sector.
We open our discussion with an in-depth look at two of our mutual fund holdings:
Davis New York Venture Fund and Third Avenue Value Fund. These funds are held in
our Growth Portfolio and are representative of the diversity of talent afforded
to our shareholders via our fund-of-funds structure.
Shelby Davis, Davis New York Venture Fund's manager since 1969, stresses large
capitalization growth companies with sustained earnings growth of 10%-15%. He
also likes companies which are currently out of favor and selling at reasonable
prices (10-12x earnings). He finds these companies through several talks with
management and his own analysis. Shelby looks for companies seeking to enhance
shareholder value - buying back stock, raising dividends and focusing on core
business. His ideal stock is one he wants to live with forever. He cited Smith
Barney as an example of forward looking and entrepreneurial management.
Shelby sees the decade of the 1990s defined by the huge growth in financial
assets. The wave of baby boomers saving for retirement, coupled with a low
inflationary environment and very little recession makes this decade, for
Shelby, the "greatest financial story ever told." The most prevalent theme in
his Fund is financial stocks. Approximately 45% of the Fund in Insurance,
Financial Services, Banks and Savings & Loans stocks.
Similarly, Third Avenue Value Fund's Martin (Marty) Whitman looks for distressed
companies that are "cheap and financially secure with cash well in excess of
liabilities." These companies must have a good balance sheet, good management,
and be selling at least a 50% discount to private value.
He has invested 15-20% of the Fund in semiconductor manufacturers and equipment
suppliers. Some investments are Electro Scientific, Electroglas and Veeco. Marty
is "confident that they all have impeccable staying power given their very high
quality balance sheets." Marty sees future consolidation in the industry, and
strongly believes that some of the companies he owns could very well be
acquisition candidates.
[Photo]
Michael D. Hirsch
Portfolio Manager
[Photo]
Michelle Graham-Lyons
Co-Portfolio Manager
`THIS YEAR'S ANNUAL REPORT INCLUDES A DISCUSSION OF YOUR PORTFOLIOS' SECTOR
WEIGHTINGS.''
2
Marty also likes investment management companies; he sees money managers as
having good revenues, fee income in cash, low credit risk and minimal overhead
costs. He forecasts long-term growth in the industry because of regulation
capping fees and requiring diversification. There is currently 25% cash in the
Fund which will be used towards the purchase of private placements (senior
issues, performing loans, etc.). Marty is looking to make this up to 15% of the
Fund.
As you read the above profiles, you might ask yourself, if these two managers
are stressing the same financial services area, then why do I need them both in
the Portfolio? Although they may have similar themes, Shelby and Marty are able
to implement their ideas through different avenues, resulting in two Funds with
absolutely no overlap in their top ten holdings. This is a concrete example of
the benefits of diversification without duplication.
Turning to performance, all FundManager Portfolios achieved positive rates of
return during the recently completed fiscal year as will now be discussed in
detail.*
AGGRESSIVE GROWTH PORTFOLIO
In our Semiannual Report, we discussed two major shifts in Portfolio philosophy
- - increasing exposure to small-cap funds and decreasing the allocation to global
funds.** Those trends have been further reinforced by modifications undertaken
during the most recent six months.
Specifically, we added Mutual Discovery (part of Michael Price's Mutual Series)
as a small-cap value holding and liquidated the remaining position in New
Perspective (a global fund). However well honed the stock picking skills of
global and international stock fund managers may be, our opinion is that they
will continue to be hard pressed to provide relative good returns as long as
they must cope with the foreign exchange albatross. While approximately 50% of
Discovery is invested overseas, the net exposure of the Aggressive Growth
Portfolio to non-U.S. investments at year-end stood at 15% of assets, down from
40% twelve months ago.
Since the Semiannual Report, the Portfolio's Financial Advisor Class average
annual returns for the five-year period ending September 30, 1996, increased
from 12.8% to 12.9%, while for the ten-year period it rose from 10.5% to 11.7%
as compared to mid year. The Portfolio's major industry concentrations are
technology, financial services and healthcare.
GROWTH PORTFOLIO
Six months ago, we shared with you how allocation to growth style managers in
the Portfolio had been brought in line with value managers. During the second
half of the year, we have increased our commitment to growth oriented funds. As
of fiscal year-end, growth funds now represent 60% of total assets.
- ----------------------------
* PERFORMANCE QUOTED REPRESENTS PAST PERFORMANCE INVESTMENT RETURN AND PRINCIPAL
VALUE WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
** SMALL CAP STOCKS HAVE HISTORICALLY EXPERIENCED GREATER VOLATILITY THAN
AVERAGE. FOREIGN INVESTING INVOLVES SPECIAL RISKS INCLUDING FOREIGN CURRENCY
RISK, INCREASED VOLATILITY OF FOREIGN SECURITIES, AND DIFFERENCES IN AUDITING
AND OTHER FINANCIAL STANDARDS.
`DIVERSIFICATION WITHOUT DUPLICATION.''
3
In fact, during the last quarter of the fiscal year, the three best performing
funds in this series all adhered to a growth style of stock selection: Davis
N.Y. Venture: +4.9%, Guardian Park Avenue: +4.1%, and Fidelity Fund: +3.4%. We
are carefully monitoring economic and market trends to assess the relative
attractiveness of these two general approaches and will continue to reallocate
weightings accordingly.
The only modification during the most recent six months was the liquidation of
the remaining position in Neuberger Guardian Fund. In our judgment, this Fund is
no longer capable of providing the same level of returns as it has in the past
due to its explosive rate of growth in assets (which stood at $4.9 billion as of
September 30). In addition, Dodge and Cox Stock Fund was shifted into the Growth
& Income Portfolio, after revaluation of the manager's methodology.
The Portfolio's Financial Advisor Class average annual return for the five-year
period ending September 30, 1996, was in line with its level as of mid-year
(13.0% vs. 13.1%). The average annual return for the ten-year period rose
significantly (11.3% vs. 10.6%). Top sector weightings in the Portfolio are
financial services, banking and insurance.
GROWTH & INCOME PORTFOLIO
This Portfolio focuses on two main investment styles: growth and income and
equity-income funds. The former denotes managers whose holdings are growth-
oriented stocks (which may or may not pay dividends) combined perhaps with fixed
income instruments to provide the income portion of its objective. The latter
generally concentrate their investments in dividend-paying stocks.
As we discussed in the Semiannual Report, this Portfolio enjoyed an excellent
1995 due to its concentration in equity-income funds. This period of sharply
lower interest rates benefited dividend-paying stocks. The reverse has been true
in calendar 1996.
The search for suitable growth and income candidates to better balance the mix
of styles in the Portfolio continues. Robertson Stephens Growth & Income Fund
was liquidated in August. We felt that the highly aggressive nature of the
equities in this Fund's holdings did not match the more conservative nature of
our Portfolio.
While appropriate candidates are sought, the proportion of growth and income
funds to the equity-income managers remains in parity. Dodge and Cox Stock Fund
was shifted from the Growth Portfolio to this Portfolio. Vanguard Equity Income
Fund was liquidated because its top ten holdings overlapped significantly with
those of T. Rowe Price Equity Income Fund. Finally, we sold Vanguard Wellington
Fund due to its manager's refusal to communicate with us. In the fast paced
investment world of today, we believe our ongoing dialogue with underlying fund
managers is critical for us to fulfill our fiduciary role to you, the
shareholders.
Although the Portfolio's Financial Adviser Class average annual returns for the
five-year period ended September 30, 1996, declined somewhat (12.9% vs. 13.3%)
as compared to mid-year, its ten-year return rose by a like amount (10.8% vs.
10.4%). Top sector weightings included energy and oil services.
4
BOND PORTFOLIO
In our Semiannual Report we reported a shift to a more neutral stance, moving
directly in line with the benchmark Lehman Brothers Government/Corporate Index*
in light of the spike in interest rates. This move proved favorable since the
Portfolio weathered the rise in rates, returning 3.8% for the fiscal year.
However, with rates stabilizing and dropping, we concluded that fears of a
growth scare have been abated. To this end, we increased duration (measures a
bond's price sensitivity to interest rate flucuation) to 5.2 from 5.0 years by
increasing allocation to Vanguard's long-term treasury fund, PIMCO Total Return
Fund and IDS Selective Fund, and by reducing PIMCO Low Duration and Franklin US
Government Securities Fund.
During the third quarter of the fiscal year, we increased corporate exposure
from 15% to 35% of the Portfolio, while decreasing governments from 55% to 35%.
There have been no significant changes in the makeup of this Portfolio except
for the addition of FPA New Income Fund.
MANAGED TOTAL RETURN PORTFOLIO
The asset allocation of this Portfolio is depicted graphically in the
accompanying pie chart. We have made several changes over the last six months.
In an attempt to pare back the number of funds in this portfolio, New
Perspective Fund, Lord Abbett Affiliated Fund, Fidelity Advisor Equity Income
Fund, Bernstein Intermediate Duration Fund, MFS Bond Fund and Vanguard Admiral
Long-Term Treasury Fund were liquidated. In the growth sector, Neuberger
Guardian was liquidated and Dodge & Cox Stock Fund was shifted to the growth and
income sector as previously discussed. In the growth and income category
Vanguard Equity Income Fund was liquidated as discussed above. In the bond
sector, allocations were revised in line with those of Bond Portfolio. The
Portfolio's Financial Advisor Class total return for the one-year period ended
September 30, 1996 was 7.6%.
A wide variety of market pundits have divergent views on the market. We at
FundManager prefer to take the long view - we believe long term investors are
better served by remaining fully invested. As always, thank you for your time.
We welcome your comments, suggestions and questions.
- ----------------------------
* LEHMAN BROTHERS GOVERNMENT/CORPORATE INDEX IS COMPRISED OF APPROXIMATELY 5,000
ISSUES WHICH INCLUDE NON-CONVERTIBLE BONDS PUBLICLY ISSUED BY THE U.S.
GOVERNMENT OR ITS AGENCIES; CORPORATE BONDS GUARANTEED BY THE U.S. GOVERNMENT
AND QUASI-FEDERAL CORPORATIONS; AND PUBLICLY ISSUED, FIXED RATE, NON-CONVERTIBLE
DOMESTIC BONDS OF COMPANIES IN INDUSTRY, PUBLIC UTILITIES AND FINANCE. THE
AVERAGE MATURITY OF THESE BONDS APPROXIMATES NINE YEARS. TRACKED BY LEHMAN
BROTHERS, INC., THE INDEX CALCULATES TOTAL RETURNS FOR ONE MONTH, THREE MONTH,
TWELVE MONTH AND TEN YEAR PERIODS AND YEAR-TO-DATE.
Respectfully submitted,
[SIGNATURE]
[SIGNATURE]
`WE BELIEVE LONG TERM INVESTORS ARE BETTER SERVED BY REMAINING FULLY
INVESTED.''
5
PERFORMANCE SUMMARY
- --------------------------------------------------------------------------------
AGGRESSIVE GROWTH
PORTFOLIO -- FINANCIAL ADVISER CLASS
- --------------------------------------------
GROWTH OF $10,000 INVESTED IN AGGRESSIVE GROWTH PORTFOLIO.
The graph below illustrates the hypothetical investment of $10,000 in Financial
Adviser Class of the Aggressive Growth Portfolio (AGP) from November 13, 1984
(start of performance) to September 30, 1996, compared to the Russell 2000
(R2000)+ and Lipper Capital Appreciation (LCAI) Indices.++
[`Graphic representation ``A1'' omitted. See Appendix.'']
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
1 Year.......................................... 12.1%
5 Year.......................................... 12.9%
10 Year......................................... 11.7%
Start of Performance (November 13, 1984)........ 12.7%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Portfolio's performance assumes the reinvestment of all dividends and
distributions. The R2000 has been adjusted to reflect reinvestment of
dividends on securities in the index. Effective May 8, 1995, the Portfolio no
longer imposes a one time sales charge.
+The R2000 is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Portfolio's performance. The
index is unmanaged.
++The LCAI Average is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported net
of sales charges, expenses, or other fees that the SEC requires to be
reflected in a fund's performance.
The LCAI has replaced Micropal U.S. Aggressive Index in the above graph because
the Portfolio no longer subscribes to such Micropal as a service provider of
performance information.
AGGRESSIVE GROWTH
PORTFOLIO -- NO-LOAD CLASS
- --------------------------------------------
GROWTH OF $10,000 INVESTED IN AGGRESSIVE GROWTH PORTFOLIO.
The graph below illustrates the hypothetical investment of $10,000 in No-Load
Class of the Aggressive Growth Portfolio (AGP) from October 1, 1995 (start of
performance) to September 30, 1996, compared to the Russell 2000 (R2000)+ and
Lipper Capital Appreciation (LCAI) Indices.++
[`Graphic representation ``A2'' omitted. See Appendix.'']
AVERAGE ANNUAL TOTAL RETURN FOR THE
PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
Start of Performance (October 1, 1995).......... 12.8%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Portfolio's performance assumes the reinvestment of all dividends and
distributions. The R2000 has been adjusted to reflect reinvestment of
dividends on securities in the index.
+The R2000 is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Portfolio's performance. The
index is unmanaged.
++The LCAI Average is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported net
of sales charges, expenses, or other fees that the SEC requires to be
reflected in a fund's performance.
The LCAI has replaced Micropal U.S. Aggressive Index in the above graph because
the Portfolio no longer subscribes to such Micropal as a service provider of
performance information.
6
PERFORMANCE SUMMARY
- --------------------------------------------------------------------------------
GROWTH
PORTFOLIO -- FINANCIAL ADVISER CLASS
- --------------------------------------------
GROWTH OF $10,000 INVESTED IN GROWTH PORTFOLIO.
The graph below illustrates the hypothetical investment of $10,000 in Financial
Adviser Class of the Growth Portfolio (GP) from November 13, 1984 (start of
performance) to September 30, 1996, compared to the Standard & Poors 500
(S&P500)+ and Lipper Growth (LGI) Indices.++
[`Graphic representation ``A3'' omitted. See Appendix.'']
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
1 Year.......................................... 13.5%
5 Year.......................................... 13.0%
10 Year......................................... 11.3%
Start of Performance (November 13, 1984)........ 12.4%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Portfolio's performance assumes the reinvestment of all dividends and
distributions. The S&P500 has been adjusted to reflect reinvestment of
dividends on securities in the index. Effective May 8, 1995, the Portfolio no
longer imposes a one time sales charge.
+The S&P500 is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Portfolio's performance. The
index is unmanaged.
++The LGI Average is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported net
of sales charges, expenses, or other fees that the SEC requires to be
reflected in a fund's performance.
The LGI has replaced Micropal Equity U.S. Growth Index in the above graph
because the Portfolio no longer subscribes to such Micropal as a service
provider of performance information.
GROWTH
PORTFOLIO -- NO-LOAD CLASS
- --------------------------------------------
GROWTH OF $10,000 INVESTED IN GROWTH PORTFOLIO.
The graph below illustrates the hypothetical investment of $10,000 in No-Load
Class of the Growth Portfolio (GP) from October 1, 1995 (start of performance)
to September 30, 1996, compared to the Standard & Poors 500 (S&P500)+ and Lipper
Growth (LGI) Indices.++
[`Graphic representation ``A4'' omitted. See Appendix.'']
AVERAGE ANNUAL TOTAL RETURN FOR THE
PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
Start of Performance (October 1, 1995).......... 14.2%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Portfolio's performance assumes the reinvestment of all dividends and
distributions. The S&P500 has been adjusted to reflect reinvestment of
dividends on securities in the index.
+The S&P500 is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Portfolio's performance. The
index is unmanaged.
++The LGI Average is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported net
of sales charges, expenses, or other fees that the SEC requires to be
reflected in a fund's performance.
The LGI has replaced Micropal Equity U.S. Growth Index in the above graph
because the Portfolio no longer subscribes to such Micropal as a service
provider of performance information.
7
PERFORMANCE SUMMARY
- --------------------------------------------------------------------------------
GROWTH & INCOME
PORTFOLIO -- FINANCIAL ADVISER CLASS
- --------------------------------------------
GROWTH OF $10,000 INVESTED IN GROWTH & INCOME PORTFOLIO.
The graph below illustrates the hypothetical investment of $10,000 in Financial
Adviser Class of the Growth & Income Portfolio (GIP) from November 13, 1984
(start of performance) to September 30, 1996, compared to the Standard & Poors
500 (S&P500)+, Lehman Government Corporate Total
(LG/CI)+, and Lipper Growth & Income (LG&I) Indices.++
[`Graphic representation ``A5'' omitted. See Appendix.'']
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
1 Year.......................................... 13.7%
5 Year.......................................... 12.9%
10 Year......................................... 10.8%
Start of Performance (November 13, 1984)........ 12.0%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Portfolio's performance assumes the reinvestment of all dividends and
distributions. The S&P500 and LG/CI have been adjusted to reflect
reinvestment of dividends on securities in the indices. Effective May 8,
1995, the Portfolio no longer imposes a one time sales charge.
+The S&P500 and LG/CI are not adjusted to reflect sales charges, expenses, or
other fees that the SEC requires to be reflected in the Portfolio's
performance. The index is unmanaged.
++The LG&I Average is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported net
of sales charges, expenses, or other fees that the SEC requires to be
reflected in a fund's performance.
The LG&I has replaced Micropal Equity U.S. Growth & Income Index in the above
graph because the Portfolio no longer subscribes to such Micropal as a service
provider of performance information.
GROWTH & INCOME
PORTFOLIO -- NO-LOAD CLASS
- --------------------------------------------
GROWTH OF $10,000 INVESTED IN GROWTH & INCOME PORTFOLIO.
The graph below illustrates the hypothetical investment of $10,000 in No-Load
Class of the Growth & Income Portfolio (GIP) from October 1, 1995 (start of
performance) to September 30, 1996, compared to the Standard & Poors 500
(S&P500)+, Lehman Government Corporate Total
(LG/CI)+, and Lipper Growth & Income (LG&I) Indices.++
[`Graphic representation ``A6'' omitted. See Appendix.'']
AVERAGE ANNUAL TOTAL RETURN FOR THE
PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
Start of Performance (October 1, 1995).......... 14.1%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Portfolio's performance assumes the reinvestment of all dividends and
distributions. The S&P500 and LG&I have been adjusted to reflect reinvestment
of dividends on securities in the indices.
+The S&P500 and LG&I are not adjusted to reflect sales charges, expenses, or
other fees that the SEC requires to be reflected in the Portfolio's
performance. The indices are unmanaged.
++The LG&I Average is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported net
of sales charges, expenses, or other fees that the SEC requires to be
reflected in a fund's performance.
The LG&I has replaced Micropal Equity U.S. Growth & Income Index in the above
graph because the Portfolio no longer subscribes to such Micropal as a service
provider of performance information.
8
PERFORMANCE SUMMARY
- --------------------------------------------------------------------------------
BOND PORTFOLIO -- FINANCIAL ADVISER CLASS
- --------------------------------------------
GROWTH OF $10,000 INVESTED IN BOND PORTFOLIO.
The graph below illustrates the hypothetical investment of $10,000 in Financial
Adviser Class of the Bond Portfolio (BP) from November 13, 1984 (start of
performance) to September 30, 1996, compared to the Lehman Government/Corporate
Total (LG/CI)+ and Lipper General Bond (LGBI) Indices.++
[`Graphic representation ``A7'' omitted. See Appendix.'']
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
1 Year.......................................... 3.8%
5 Year.......................................... 6.4%
10 Year......................................... 6.5%
Start of Performance (November 13, 1984)........ 7.5%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Portfolio's performance assumes the reinvestment of all dividends and
distributions. The LG/CI has been adjusted to reflect reinvestment of
dividends on securities in the index. Effective May 8, 1995, the Portfolio no
longer imposes a one time sales charge.
+The LG/CI is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Portfolio's performance. The
index is unmanaged.
++The LGBI Average is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported net
of sales charges, expenses, or other fees that the SEC requires to be
reflected in a fund's performance.
For this illustration, the LGBI began performance December 31, 1990. The index
was assigned a beginning value of $15,722, the value of the Portfolio on
December 31, 1990.
BOND PORTFOLIO -- NO-LOAD CLASS
- --------------------------------------------
GROWTH OF $10,000 INVESTED IN BOND PORTFOLIO.
The graph below illustrates the hypothetical investment of $10,000 in No-Load
Class of the Bond Portfolio (BP) from October 1, 1995 (start of performance) to
September 30, 1996, compared to the Lehman Government/Corporate Total
(LG/CI)+ and Lipper General Bond (LGBI) Indices.++
[`Graphic representation ``A8'' omitted. See Appendix.'']
AVERAGE ANNUAL TOTAL RETURN FOR THE
PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
Start of Performance (October 1, 1995).......... 3.9%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Portfolio's performance assumes the reinvestment of all dividends and
distributions. The LG/CI has been adjusted to reflect reinvestment of
dividends on securities in the index.
+The LG/CI is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Portfolio's performance. The
index is unmanaged.
++The LGBI Average is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported net
of sales charges, expenses, or other fees that the SEC requires to be
reflected in a fund's performance.
For this illustration, the LGBI began performance December 31, 1990. The index
was assigned a beginning value of $15,722, the value of the Portfolio on
December 31, 1990.
9
PERFORMANCE SUMMARY
- --------------------------------------------------------------------------------
MANAGED TOTAL RETURN
PORTFOLIO -- FINANCIAL ADVISER CLASS
- --------------------------------------------
GROWTH OF $10,000 INVESTED IN MANAGED TOTAL RETURN PORTFOLIO.
The graph below illustrates the hypothetical investment of $10,000 in Financial
Adviser Class of the Managed Total Return Portfolio from August 4, 1988 (start
of performance) to September 30, 1996, compared to the Lehman
Government/Corporate Total (LG/CI)+ and Lipper General Bond (LGBI) Indices.++
[`Graphic representation ``A9'' omitted. See Appendix.'']
AVERAGE ANNUAL TOTAL RETURNS FOR THE
PERIOD ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
1 Year.......................................... 7.6%
5 Year.......................................... 8.2%
Start of Performance (August 4, 1988)........... 8.8%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Portfolio's performance assumes the reinvestment of all dividends and
distributions. The LG/CI has been adjusted to reflect reinvestment of
dividends on securities in the index. Effective May 8, 1995, the Portfolio no
longer imposes a one time sales charge.
+The LG/CI is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Portfolio's performance. This
index is unmanaged.
++The LGBI Average is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported net
of sales charges, expenses, or other fees that the SEC requires to be
reflected in a fund's performance.
For this illustration, the LGBI began performance December 31, 1990. The index
was assigned a beginning value of $11,768, the value of the Portfolio December
31, 1990.
The LGBI has replaced Micropal Balanced U.S. Index in the above graph because
the Portfolio no longer subscribes to such Micropal as a service provider of
performance information.
10
FUNDMANAGER PORTFOLIOS
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
AGGRESSIVE GROWTH PORTFOLIO
- --------------------------------------------
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 and retirement.
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- --------- -----------
<C> <S> <C>
SMALL CAP FUNDS (59.6%)
172,942 Baron Asset Fund............ $ 6,139,454
200,048 FPA Capital Fund, Inc....... 6,153,475
205,093 John Hancock Special
Equities (Class C).......... 5,523,147
258,698 T. Rowe Price New
Horizons.................... 6,232,052
-----------
TOTAL SMALL CAP FUNDS 24,048,128
-----------
<CAPTION>
LARGE CAP FUNDS (20.3%)
<C> <S> <C>
163,105 Harbor Capital Appreciation
Fund........................ 4,172,231
122,452 Brandywine Fund............. 4,020,104
-----------
TOTAL LARGE CAP FUNDS 8,192,335
-----------
<CAPTION>
GLOBAL FUNDS (18.9%)
<C> <S> <C>
138,654 SoGen International Fund,
Inc......................... 3,742,258
226,532 Mutual Discovery Fund....... 3,903,154
-----------
TOTAL GLOBAL FUNDS 7,645,412
-----------
<CAPTION>
SHORT TERM INVESTMENT (1.1%)
<C> <S> <C>
427,780 TrustFunds Liquid Asset -
Prime Obligation............ 427,780
-----------
TOTAL INVESTMENTS AT MARKET
VALUE (COST $36,558,886) (a) 40,313,655
OTHER ASSETS NET OF
LIABILITIES 62,785
-----------
NET ASSETS (100.0%) $40,376,440
-----------
-----------
</TABLE>
[`Graphic representation ``A10'' omitted. See Appendix.'']
GROWTH PORTFOLIO
- --------------------------------------------
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.
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- --------- -----------
<C> <S> <C>
GROWTH FUNDS (57.7%)
185,118 Davis New York Venture
Fund........................ $ 3,045,189
133,672 Fidelity Fund............... 3,176,048
87,973 Guardian Park Avenue Fund... 3,314,840
121,553 MAS Pooled Trust Equity..... 3,120,266
239,388 The Yacktman Fund Inc....... 3,231,734
-----------
TOTAL GROWTH FUNDS 15,888,077
-----------
<CAPTION>
VALUE FUNDS (40.8%)
<C> <S> <C>
5 FPA Paramount Fund.......... 83
47,573 Clipper Fund................ 3,269,679
79,653 Mutual Beacon Fund.......... 3,129,581
74,543 Oakmark Fund................ 2,395,057
102,108 Third Avenue Value Fund..... 2,444,474
-----------
TOTAL VALUE FUNDS 11,238,874
-----------
<CAPTION>
SHORT TERM INVESTMENT (1.4%)
<C> <S> <C>
388,340 TrustFunds Liquid Asset -
Prime Obligation............ 388,340
-----------
TOTAL INVESTMENTS AT MARKET
VALUE (COST $24,122,382) (b) 27,515,291
OTHER ASSETS NET OF
LIABILITIES 1,541
-----------
NET ASSETS (100.0%) $27,516,832
-----------
-----------
</TABLE>
[`Graphic representation ``A11'' omitted. See Appendix.'']
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
11
FUNDMANAGER PORTFOLIOS
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
GROWTH & INCOME PORTFOLIO
- --------------------------------------------
INCOME AND MODEST CAPITAL APPRECIATION. For conservative investors interested in
supplementing their retirement income.
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- --------- -----------
<C> <S> <C>
GROWTH AND INCOME FUNDS (63.7%)
414,473 AIM Charter Fund............ $ 4,604,798
71,386 Dodge & Cox Stock Fund...... 5,358,268
417,156 Lord Abbett Affiliated
Fund........................ 5,264,504
219,623 Washington Investors Mutual
Fund........................ 5,264,353
-----------
TOTAL GROWTH AND INCOME
FUNDS 20,491,923
-----------
<CAPTION>
EQUITY INCOME FUNDS (35.8%)
<C> <S> <C>
152,304 Fidelity Advisor Equity
Income Fund................. 3,222,750
152,818 Hotchkis & Wiley Equity
Income Fund................. 2,918,827
247,295 T. Rowe Price Equity Income
Fund........................ 5,383,619
-----------
TOTAL EQUITY INCOME FUNDS 11,525,196
-----------
<CAPTION>
SHORT TERM INVESTMENTS (0.7%)
<C> <S> <C>
231,800 TrustFunds Liquid Asset -
Prime Obligation............ 231,800
-----------
TOTAL INVESTMENTS AT MARKET
VALUE (COST $27,170,462) (c) 32,248,919
LIABILITIES NET OF OTHER
ASSETS (56,155)
-----------
NET ASSETS (100.0%) $32,192,764
-----------
-----------
</TABLE>
[`Graphic representation ``A12'' omitted. See Appendix.'']
BOND PORTFOLIO
- --------------------------------------------
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.
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- --------- -----------
<C> <S> <C>
SHORT MATURITY FUNDS (19.7%)
395,725 FPA New Income Fund......... $ 4,341,107
508,299 Franklin U.S. Government
Securities Fund, Inc........ 3,415,769
648,795 PIMCO Low Duration Fund..... 6,461,997
-----------
TOTAL SHORT MATURITY FUNDS 14,218,873
-----------
<CAPTION>
INTERMEDIATE MATURITY FUNDS (49.7%)
<C> <S> <C>
841,104 Bond Fund of America,
Inc......................... 11,430,603
608,079 Bernstein Intermediate
Duration Portfolio.......... 7,953,679
777,568 PIMCO Total Return Fund..... 8,001,181
1,393,245 United Bond Fund............ 8,429,131
-----------
TOTAL INTERMEDIATE MATURITY
FUNDS 35,814,594
-----------
<CAPTION>
LONG MATURITY FUNDS (29.9%)
<C> <S> <C>
1,107,779 IDS Selective Fund, Inc..... 10,036,476
577,120 MFS Bond Fund (Class A)..... 7,462,164
416,281 Vanguard Fixed Income
Securities Fund - U.S.
Treasury Bond Portfolio..... 4,025,437
-----------
TOTAL LONG MATURITY FUNDS 21,524,077
-----------
<CAPTION>
SHORT-TERM INVESTMENTS (0.7%)
<C> <S> <C>
524,550 TrustFunds Liquid Asset -
Prime Obligations........... 524,550
-----------
TOTAL INVESTMENTS AT MARKET
VALUE (COST $72,359,044) (d) 72,082,094
OTHER ASSETS NET OF
LIABILLITIES 72,127
-----------
NET ASSETS (100.0%) $72,154,221
-----------
-----------
</TABLE>
[`Graphic representation ``A13'' omitted. See Appendix.'']
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
12
FUNDMANAGER PORTFOLIOS
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
MANAGED TOTAL RETURN PORTFOLIO
- --------------------------------------------
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, growth and income, bond and money market.
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- --------- -----------
<C> <S> <C>
AGGRESSIVE GROWTH FUNDS (10.9%)
12,969 Brandywine Fund............. $ 425,787
16,101 FPA Capital Fund............ 495,275
15,031 John Hancock Special
Equities (Class C).......... 404,778
-----------
TOTAL AGGRESSIVE GROWTH
FUNDS 1,325,840
-----------
<CAPTION>
GROWTH FUNDS (18.2%)
<C> <S> <C>
8,894 Clipper Fund................ 611,308
12,445 Dodge & Cox Stock Fund...... 934,136
17,453 Guardian Park Avenue Fund,
Inc......................... 657,636
-----------
TOTAL GROWTH FUNDS 2,203,080
-----------
<CAPTION>
GROWTH & INCOME FUNDS (13.3%)
<C> <S> <C>
40,624 Davis New York Venture Fund
(Class A)................... 668,268
43,132 T. Rowe Price Equity Income
Fund........................ 938,993
-----------
TOTAL GROWTH AND INCOME
FUNDS 1,607,261
-----------
<CAPTION>
FIXED INCOME FUNDS (54.9%)
<C> <S> <C>
190,434 Bond Fund of America,
Inc......................... 2,587,997
75,604 PIMCO Low Duration Fund..... 753,012
321,802 PIMCO Total Return Fund..... 3,311,339
-----------
TOTAL FIXED INCOME FUNDS 6,652,348
-----------
<CAPTION>
SHORT-TERM INVESTMENT (4.2%)
<C> <S> <C>
516,230 TrustFunds Liquid Asset -
Prime Obligation............ 516,230
-----------
TOTAL INVESTMENTS AT MARKET
VALUE (COST $11,562,772) (e) 12,304,759
LIABILITIES NET OF OTHER
ASSETS (182,206)
-----------
NET ASSETS (100.0%) $12,122,553
-----------
-----------
</TABLE>
[`Graphic representation ``A14'' omitted. See Appendix.'']
<TABLE>
<S> <C>
(a) AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES IS $36,559,555. THE GROSS UNREALIZED
APPRECIATION IS $3,754,100; THE GROSS
UNREALIZED DEPRECIATION IS $0, RESULTING IN
NET UNREALIZED APPRECIATION OF $3,754,100 FOR
FEDERAL INCOME TAX PURPOSES.
(b) AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES IS $24,146,717. THE GROSS UNREALIZED
APPRECIATION IS $3,368,574; THE GROSS
UNREALIZED DEPRECIATION IS $0, RESULTING IN
NET UNREALIZED APPRECIATION OF $3,368,574 FOR
FEDERAL INCOME TAX PURPOSES.
(c) AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES IS $27,200,028. THE GROSS UNREALIZED
APPRECIATION IS $5,048,891; THE GROSS
UNREALIZED DEPRECIATION IS $0, RESULTING IN
NET UNREALIZED APPRECIATION OF $5,048,891 FOR
FEDERAL INCOME TAX PURPOSES.
(d) AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES IS $72,957,085. THE GROSS UNREALIZED
APPRECIATION IS $74,879; THE GROSS UNREALIZED
DEPRECIATION IS $949,870, RESULTING IN NET
UNREALIZED DEPRECIATION OF $(874,991) FOR
FEDERAL INCOME TAX PURPOSES.
(e) AGGREGATE COST FOR FEDERAL INCOME TAX
PURPOSES IS $11,576,233. THE GROSS UNREALIZED
APPRECIATION IS $746,419; THE GROSS
UNREALIZED DEPRECIATION IS $17,893, RESULTING
IN NET UNREALIZED APPRECIATION OF $728,526
FOR FEDERAL INCOME TAX PURPOSES.
</TABLE>
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
13
FUNDMANAGER PORTFOLIOS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH & MANAGED
GROWTH GROWTH INCOME BOND TOTAL RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value*................ $40,313,655 $27,515,291 $32,248,919 $72,082,094 $12,304,759
Receivable for fund shares sold....... 121,699 79,893 24,033 77,964 2,683
Dividend receivable................... 1,867 18,963 17,854 170,543 32,529
----------- ----------- ----------- ----------- ------------
Total assets........................ 40,437,221 27,614,147 32,290,806 72,330,601 12,339,971
----------- ----------- ----------- ----------- ------------
Liabilities:
Payable for fund shares redeemed...... 13,965 27,371 11,136 44,189 156,303
Advisory fee payable.................. 16,425 11,355 13,392 30,265 5,131
Administrative fee payable............ 4,270 2,952 3,481 7,869 1,334
Distribution expense payable.......... -- 4,576 3,300 18,614 1,395
Custodian fee payable................. 3,400 3,000 3,600 7,400 2,300
Accrued expenses...................... 22,721 48,061 63,133 68,043 50,955
----------- ----------- ----------- ----------- ------------
Total liabilities................... 60,781 97,315 98,042 176,380 217,418
----------- ----------- ----------- ----------- ------------
Net Assets.............................. $40,376,440 $27,516,832 $32,192,764 $72,154,221 $12,122,553
----------- ----------- ----------- ----------- ------------
----------- ----------- ----------- ----------- ------------
Financial Adviser Class:
Shares Outstanding.................... 2,318,177 1,776,631 1,891,259 7,015,708 1,058,564
Net Assets............................ $38,944,018 $26,639,355 $31,571,487 $70,166,430 $12,122,553
Net Asset Value....................... $ 16.80 $ 14.99 $ 16.69 $ 10.00 $ 11.45
----------- ----------- ----------- ----------- ------------
----------- ----------- ----------- ----------- ------------
No-Load Class:
Shares Outstanding.................... 84,732 58,324 37,188 198,015 --
Net Assets............................ $ 1,432,422 $ 877,477 $ 621,277 $ 1,987,791 --
Net Asset Value....................... $ 16.91 $ 15.04 $ 16.71 $ 10.04 --
----------- ----------- ----------- ----------- ------------
----------- ----------- ----------- ----------- ------------
Net Assets consist of:
Paid in capital....................... $31,808,555 $20,610,282 $22,816,955 $75,366,090 $10,467,340
Undistributed net income.............. 100,956 136,071 54,611 608,814 99,297
Accumulated realized gain (loss)...... 4,712,160 3,377,570 4,242,741 (3,543,733) 813,929
Net unrealized appreciation
(depreciation)...................... 3,754,769 3,392,909 5,078,457 (276,950) 741,987
----------- ----------- ----------- ----------- ------------
Net Assets.............................. $40,376,440 $27,516,832 $32,192,764 $72,154,221 $12,122,553
----------- ----------- ----------- ----------- ------------
----------- ----------- ----------- ----------- ------------
*Investments, at cost............... $36,558,886 $24,122,382 $27,170,462 $72,359,044 $11,562,772
----------- ----------- ----------- ----------- ------------
----------- ----------- ----------- ----------- ------------
</TABLE>
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
14
FUNDMANAGER PORTFOLIOS
STATEMENT OF OPERATIONS
FISCAL YEAR ENDED SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH & MANAGED
GROWTH GROWTH INCOME BOND TOTAL RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Income:
Dividend income....................... $ 870,754 $ 490,248 $1,778,580 $4,897,963 $778,427
Interest income....................... -- -- -- -- 13,686
----------- ---------- ---------- ---------- ------------
Total investment income............. 870,754 490,248 1,778,580 4,897,963 792,113
----------- ---------- ---------- ---------- ------------
Expenses:
Advisory fee.......................... 183,337 132,472 167,996 367,138 67,171
Transfer agent........................ 61,178 51,004 57,412 54,333 41,959
Distribution and shareholder service
expenses............................ 178,624 131,100 171,791 363,698 67,171
Administrative fee.................... 91,669 66,236 83,998 171,868 33,586
Fund accounting....................... 40,000 40,000 40,000 40,000 40,000
Audit................................. 13,000 13,000 13,000 13,000 13,000
Printing & Postage.................... 5,698 1,702 3,077 9,473 1,564
Custodian fees and expenses........... 21,189 18,029 21,398 37,413 12,849
Legal................................. 5,219 3,339 2,943 9,278 1,361
Registration fees..................... 21,851 27,793 33,014 41,393 13,432
Trustee fees.......................... 2,759 2,071 2,492 3,214 2,357
Insurance expense..................... 1,997 1,237 1,817 2,763 615
Miscellaneous......................... -- 6,500 10,058 9,824 9,859
----------- ---------- ---------- ---------- ------------
Total expenses.......................... 626,521 494,483 608,996 1,123,395 304,924
Waiver of administrative fee............ (22,675) (14,995) (19,270) (37,200) (7,522)
----------- ---------- ---------- ---------- ------------
Net expenses........................ 603,846 479,488 589,726 1,086,195 297,402
----------- ---------- ---------- ---------- ------------
Net investment income................... 266,908 10,760 1,188,854 3,811,768 494,711
----------- ---------- ---------- ---------- ------------
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on
investments......................... 3,856,586 2,206,397 3,347,212 (684,986) 761,654
Net realized gains received from
underlying funds.................... 1,766,431 1,525,204 674,667 402,689 186,620
Net change in unrealized appreciation
(depreciation)...................... (1,522,338) (308,815) (745,572) (544,860) (468,365)
----------- ---------- ---------- ---------- ------------
Net realized and unrealized gain
(loss)................................. 4,100,679 3,422,786 3,276,307 (827,157) 479,909
----------- ---------- ---------- ---------- ------------
Net increase in net assets resulting
from operations..................... $ 4,367,587 $3,433,546 $4,465,161 $2,984,611 $974,620
----------- ---------- ---------- ---------- ------------
----------- ---------- ---------- ---------- ------------
</TABLE>
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
15
FUNDMANAGER PORTFOLIOS
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH
PORTFOLIO GROWTH PORTFOLIO
------------------------- -------------------------
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996 1995 1996 1995
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations
Net investment income (loss).......... $ 266,908 $ (252,000) $ 10,760 $ (33,673)
Net realized gain (loss) on
investments and underlying funds.... 5,623,017 5,735,631 3,731,601 4,679,348
Change in unrealized appreciation
(depreciation)...................... (1,522,338) 2,550,693 (308,815) 1,567,149
----------- ------------ ----------- ------------
Net increase in net assets resulting
from operations..................... 4,367,587 8,034,324 3,433,546 6,212,824
----------- ------------ ----------- ------------
Financial Adviser Class
Dividends and distributions from:
Net investment income................. (824,279) (94,361) (411,153) (202,424)
Net realized gains.................... (5,432,040) (1,959,235) (4,398,651) (1,998,155)
----------- ------------ ----------- ------------
Total distributions................... (6,256,319) (2,053,596) (4,809,804) (2,200,579)
----------- ------------ ----------- ------------
Capital share transactions:
Proceeds from sales of shares......... 11,562,398 9,328,987 7,261,283 6,008,823
Reinvestment of dividends............. 4,687,699 1,975,367 3,125,091 2,076,414
Payments for shares redeemed.......... (9,013,894) (21,383,861) (8,351,421) (20,280,254)
Amount transferred from undistributed
net investment income............... -- 87,454 -- 14,113
----------- ------------ ----------- ------------
Total from share transactions......... 7,236,203 (9,992,053) 2,034,953 (12,180,904)
----------- ------------ ----------- ------------
Amount transferred to paid-in
capital:.............................. -- (87,454) -- (14,113)
----------- ------------ ----------- ------------
No-Load Class
Dividends and distributions from:
Net investment income................. (2,446) -- (11,296) --
Net realized gains.................... (15,496) -- (12,543) --
----------- ------------ ----------- ------------
Total distributions................... (17,942) -- (23,839) --
----------- ------------ ----------- ------------
Capital share transactions:
Proceeds from sales of shares......... 1,440,407 -- 900,243 --
Reinvestment of dividends............. 17,942 -- 12,806 --
Payments for shares redeemed.......... (79,100) -- (53,014) --
----------- ------------ ----------- ------------
Total from share transactions......... 1,379,249 -- 860,035 --
----------- ------------ ----------- ------------
Total Increase (Decrease) in Net
Assets................................ 6,708,778 (4,098,779) 1,494,891 (8,182,772)
Net Assets:
Beginning of year..................... 33,667,662 37,766,441 26,021,941 34,204,713
----------- ------------ ----------- ------------
End of year........................... $40,376,440 $ 33,667,662 $27,516,832 $ 26,021,941
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
Undistributed Net Investment Income... $ 100,956 $ 24,146 $ 136,071 $ 63,122
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
Shares Outstanding:
Financial Adviser Class
Beginning of year..................... 1,838,433 2,425,076 1,612,567 2,426,993
Shares sold........................... 717,174 574,640 504,686 408,816
Reinvestment of dividends............. 310,280 135,951 227,151 157,112
Shares redeemed....................... (547,710) (1,297,234) (567,773) (1,380,354)
----------- ------------ ----------- ------------
End of year........................... 2,318,177 1,838,433 1,776,631 1,612,567
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
No-Load Class
Shares sold........................... 88,427 -- 61,018 --
Reinvestment of dividends............. 1,186 -- 933 --
Shares redeemed....................... (4,881) -- (3,627) --
----------- ------------ ----------- ------------
End of year........................... 84,732 -- 58,324 --
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
16
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MANAGED TOTAL RETURN
GROWTH & INCOME PORTFOLIO BOND PORTFOLIO PORTFOLIO
-------------------------- -------------------------- ------------------------
1996 1995 1996 1995 1996 1995
------------ ------------ ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations
Net investment income (loss).......... $ 1,188,854 $ 792,423 $ 3,811,768 $ 3,975,099 $ 494,711 $ 353,629
Net realized gain (loss) on
investments and underlying funds.... 4,021,879 5,826,326 (282,297) (2,141,804) 948,274 691,877
Change in unrealized appreciation
(depreciation)...................... (745,572) 2,841,531 (544,860) 5,689,746 (468,365) 963,916
------------ ------------ ------------ ------------ ----------- -----------
Net increase in net assets resulting
from operations..................... 4,465,161 9,460,280 2,984,611 7,523,041 974,620 2,009,422
------------ ------------ ------------ ------------ ----------- -----------
Financial Adviser Class
Dividends and distributions from:
Net investment income................. (1,768,401) (999,120) (4,260,538) (3,486,674) (614,026) (437,840)
Net realized gains.................... (5,595,638) (2,699,191) -- -- (636,120) (1,100,015)
------------ ------------ ------------ ------------ ----------- -----------
Total distributions................... (7,364,039) (3,698,311) (4,260,538) (3,486,674) (1,250,146) (1,537,855)
------------ ------------ ------------ ------------ ----------- -----------
Capital share transactions:
Proceeds from sales of shares......... 4,712,857 5,564,507 6,954,937 40,505,765 1,069,066 1,660,545
Reinvestment of dividends............. 4,533,318 3,511,810 2,428,436 3,277,106 1,225,106 1,495,028
Payments for shares redeemed.......... (10,388,950) (31,789,889) (15,321,843) (47,169,417) (4,645,420) (6,392,506)
Amount transferred from undistributed
net investment income............... -- (307,338) -- (42,638) -- 89,941
------------ ------------ ------------ ------------ ----------- -----------
Total from share transactions......... (1,142,775) (23,020,910) (5,938,470) (3,429,184) (2,351,248) (3,146,992)
------------ ------------ ------------ ------------ ----------- -----------
Amount transferred to paid-in
capital:.............................. -- 307,338 -- 42,638 -- (89,941)
------------ ------------ ------------ ------------ ----------- -----------
No-Load Class
Dividends and distributions from:
Net investment income................. (15,005) -- (42,793) -- -- --
Net realized gains.................... (22,147) -- -- -- -- --
------------ ------------ ------------ ------------ ----------- -----------
Total distributions................... (37,152) -- (42,793) -- -- --
------------ ------------ ------------ ------------ ----------- -----------
Capital share transactions:
Proceeds from sales of shares......... 691,373 -- 2,095,355 -- -- --
Reinvestment of dividends............. 29,943 -- 11,328 -- -- --
Payments for shares redeemed.......... (93,171) -- (113,888) -- -- --
------------ ------------ ------------ ------------ ----------- -----------
Total from share transactions......... 628,145 -- 1,992,795 -- -- --
------------ ------------ ------------ ------------ ----------- -----------
Total Increase (Decrease) in Net
Assets................................ (3,450,660) (16,951,603) (5,264,395) 649,821 (2,626,774) (2,765,366)
Net Assets:
Beginning of year..................... 35,643,424 52,595,027 77,418,616 76,768,795 14,749,327 17,514,693
------------ ------------ ------------ ------------ ----------- -----------
End of year........................... $ 32,192,764 $ 35,643,424 $ 72,154,221 $ 77,418,616 $12,122,553 $14,749,327
------------ ------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ------------ ----------- -----------
Undistributed Net Investment Income... $ 54,611 $ 506,232 $ 608,814 $ 869,167 $ 99,297 $ 135,353
------------ ------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ------------ ----------- -----------
Shares Outstanding:
Financial Adviser Class
Beginning of year..................... 1,949,419 3,289,548 7,583,952 7,943,693 1,266,151 1,558,637
Shares sold........................... 287,591 336,532 689,245 4,074,856 94,665 151,194
Reinvestment of dividends............. 280,600 232,936 239,118 335,974 108,144 146,354
Shares redeemed....................... (626,351) (1,909,597) (1,496,607) (4,770,571) (410,396) (590,034)
------------ ------------ ------------ ------------ ----------- -----------
End of year........................... 1,891,259 1,949,419 7,015,708 7,583,952 1,058,564 1,266,151
------------ ------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ------------ ----------- -----------
No-Load Class
Shares sold........................... 41,141 -- 208,277 -- -- --
Reinvestment of dividends............. 1,855 -- 1,103 -- -- --
Shares redeemed....................... (5,808) -- (11,365) -- -- --
------------ ------------ ------------ ------------ ----------- -----------
End of year........................... 37,188 -- 198,015 -- -- --
------------ ------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ------------ ----------- -----------
</TABLE>
17
AGGRESSIVE GROWTH PORTFOLIO: FINANCIAL ADVISER CLASS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT THE: YEAR ENDED SEPTEMBER 30,
-------------------------------------------
1996 1995(a) 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........... $ 18.31 $ 15.57 $ 16.70 $ 14.71 $ 14.73
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (operating loss)....... 0.12(b) (0.13) (0.08) (0.04) (0.04)
Net realized and unrealized gain on
investments................................ 1.64 3.70 0.62 2.87 0.99
------- ------- ------- ------- -------
Total from investment operations........... 1.76 3.57 0.54 2.83 0.95
------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Distributions from net investment income..... (0.38) -- -- -- --
Distributions from net realized gain on
investments +.............................. (2.89) (0.83) (1.67) (0.84) (0.97)
------- ------- ------- ------- -------
Total distributions........................ (3.27) (0.83) (1.67) (0.84) (0.97)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD................. $ 16.80 $ 18.31 $ 15.57 $ 16.70 $ 14.71
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL RETURN (c)............................... 12.10% 24.30% 3.30% 19.90% 6.30%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)......... $38,944 $33,668 $37,766 $31,201 $29,096
Ratio of expenses to average net assets...... 1.67% 1.65% 1.70% 1.52% 1.61%
Ratio of net investment income to average net
assets..................................... 0.74% (0.68%) (0.57%) (0.24%) (0.17%)
Ratio of waiver to average net assets (d).... 0.06% -- -- -- --
Portfolio turnover........................... 158% 50% 43% 35% 24%
+Paid from realized net short-term gain........ $ 0.27 $ 0.04 $ 0.25 $ -- $ 0.03
</TABLE>
- ---------------------------------------------
(a) On February 21, 1995, Freedom Capital Management Corporation became the
Investment Adviser.
(b) Per share information is based on average shares outstanding.
(c) Based on net asset value, which does not reflect the sales charge payable on
purchases of shares. Effective May 8, 1995, the Portfolio no longer imposes
a one time sales charge.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
18
AGGRESSIVE GROWTH PORTFOLIO: NO-LOAD CLASS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE: SEPTEMBER 30, 1996
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......................................................... $18.31
-------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a)................................................................... 0.04
Net realized and unrealized gain on investments............................................. 1.83
-------
Total from investment operations.......................................................... 1.87
-------
LESS DISTRIBUTIONS
Distributions from net investment income.................................................... (0.38)
Distributions from net realized gain on investments......................................... (2.89)
-------
Total distributions....................................................................... (3.27)
-------
NET ASSET VALUE, END OF PERIOD................................................................ $16.91
-------
-------
TOTAL RETURN (b).............................................................................. 12.77%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................................................ $1,432
Ratio of expenses to average net assets..................................................... 1.15%
Ratio of net investment income to average net assets........................................ 0.24%
Ratio of waiver to average net assets (c)................................................... 0.06%
Portfolio turnover.......................................................................... 158%
+Paid from realized net short term gain....................................................... $ 0.27
</TABLE>
- ---------------------------------------------
(a) Per share information is based on average shares outstanding.
(b) Based on net asset value.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
19
GROWTH PORTFOLIO: FINANCIAL ADVISER CLASS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT THE: YEAR ENDED SEPTEMBER 30,
-------------------------------------------
1996 1995(a) 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........... $ 16.14 $ 14.09 $ 14.62 $ 14.40 $ 13.96
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (operating loss)....... 0.01(b) (0.02) (0.05) 0.02 0.07
Net realized and unrealized gain on
investments................................ 1.85 2.99 0.69 2.10 1.23
------- ------- ------- ------- -------
Total from investment operations........... 1.86 2.97 0.64 2.12 1.30
------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Distributions from net investment income..... (0.24) -- -- -- (0.09)
Distributions from net realized gain on
investments +.............................. (2.77) (0.92) (1.17) (1.90) (0.77)
------- ------- ------- ------- -------
Total distributions........................ (3.01) (0.92) (1.17) (1.90) (0.86)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD................. $ 14.99 $ 16.14 $ 14.09 $ 14.62 $ 14.40
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL RETURN (c)............................... 13.46% 22.6% 4.50% 16.00% 9.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)......... $26,639 $26,022 $34,205 $21,919 $21,420
Ratio of Expenses to average net assets...... 1.81% 1.71% 1.71% 1.70% 1.60%
Ratio of net investment income to average net
assets..................................... 0.05% (0.11%) (0.52%) 0.15% 0.59%
Ratio of waiver to average net assets (d).... 0.06% -- -- -- --
Portfolio turnover........................... 98% 68% 44% 40% 44%
+Paid from realized net short-term gain........ $ 0.48 $ 0.10 $ 0.22 $ 0.16 $ 0.03
</TABLE>
- ---------------------------------------------
(a) On February 21, 1995, Freedom Capital Management Corporation became the
Investment Adviser.
(b) Per share information is based on average shares outstanding.
(c) Based on net asset value, which does not reflect the sales charge payable on
purchases of shares. Effective May 8, 1995, the Portfolio no longer imposes
a one time sales charge.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
20
GROWTH PORTFOLIO: NO-LOAD CLASS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE: SEPTEMBER 30, 1996
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......................................................... $16.14
-------
INCOME FROM INVESTMENT OPERATIONS
Net operating loss (a)...................................................................... (0.06)
Net realized and unrealized gain on investments............................................. 2.02
-------
Total from investment operations.......................................................... 1.96
-------
LESS DISTRIBUTIONS
Distributions from net investment income.................................................... (0.29)
Distributions from net realized gain on investments......................................... (2.77)
-------
Total distributions....................................................................... (3.06)
-------
NET ASSET VALUE, END OF PERIOD................................................................ $15.04
-------
-------
TOTAL RETURN (B).............................................................................. 14.21%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................................................ $ 877
Ratio of expenses to average net assets..................................................... 1.30%
Ratio of net investment income to average net assets........................................ (0.39%)
Ratio of waiver to average net assets (c)................................................... 0.06%
Portfolio turnover.......................................................................... 98%
</TABLE>
- ---------------------------------------------
(a) Per share information is based on average shares outstanding.
(b) Based on net asset value.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
21
GROWTH & INCOME PORTFOLIO: FINANCIAL ADVISER CLASS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT THE: YEAR ENDED SEPTEMBER 30,
-------------------------------------------
1996 1995(a) 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........... $ 18.28 $ 15.99 $ 16.50 $ 15.11 $ 14.39
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income........................ 0.60(b) 0.27 0.35 0.28 0.31
Net realized and unrealized gain on
investments................................ 1.60 3.19 0.18 1.97 1.07
------- ------- ------- ------- -------
Total from investment operations........... 2.20 3.46 0.53 2.25 1.38
------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Distributions from net investment income..... (0.86) (0.33) (0.30) (0.33) (0.29)
Distributions from net realized gain on
investments +.............................. (2.93) (0.84) (0.74) (0.53) (0.37)
------- ------- ------- ------- -------
Total distributions........................ (3.79) (1.17) (1.04) (0.86) (0.66)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD................. $ 16.69 $ 18.28 $ 15.99 $ 16.50 $ 15.11
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL RETURN (b)............................... 13.73% 23.30% 3.30% 15.50% 9.80%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)......... $31,571 $35,643 $52,595 $40,269 $36,603
Ratio of expenses to average net assets...... 1.77% 1.59% 1.55% 1.49% 1.50%
Ratio of net investment income to average net
assets..................................... 3.57% 1.72% 1.88% 1.77% 2.10%
Ratio of waiver to average net assets (d).... 0.06% -- -- -- --
Portfolio turnover........................... 85% 12% 35% 24% 26%
+Paid from realized net short-term gain........ $ 0.06 $ -- $ 0.14 $ 0.09 $ --
</TABLE>
- ---------------------------------------------
(a) On February 21, 1995, Freedom Capital Management Corporation became the
Investment Adviser.
(b) Per share information is based on average shares outstanding.
(c) Based on net asset value, which does not reflect the sales charge payable on
purchases of shares. Effective May 8, 1995, the Portfolio no longer imposes
a one time sales charge.
(d) This voluntary expense decrease is reflected in both the expenses and net
investment income ratios shown above.
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
22
GROWTH & INCOME PORTFOLIO: NO-LOAD CLASS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE: SEPTEMBER 30, 1996
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......................................................... $18.28
-------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a)................................................................... 0.39
Net realized and unrealized gain (loss) on investments...................................... 1.86
-------
Total from investment operations.......................................................... 2.25
-------
LESS DISTRIBUTIONS
Distributions from net investment income.................................................... (0.89)
Distributions from net realized gain on investments +....................................... (2.93)
-------
Total distributions....................................................................... (3.82)
-------
NET ASSET VALUE, END OF PERIOD................................................................ $16.71
-------
-------
TOTAL RETURN (b).............................................................................. 14.06%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................................................ $ 621
Ratio of expenses to average net assets..................................................... 1.28%
Ratio of net investment income to average net assets........................................ 2.42%
Ratio of waiver to average net assets (c)................................................... 0.06%
Portfolio turnover.......................................................................... 85%
+Paid from realized net short term gain....................................................... $ 0.06
</TABLE>
- ---------------------------------------------
(a) Per share information is based on average shares outstanding.
(b) Based on net asset value.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
23
BOND PORTFOLIO: FINANCIAL ADVISER CLASS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT THE: YEAR ENDED SEPTEMBER 30,
-------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995(a) 1994 1993 1992
------- ------- ------- ------- -------
NET ASSET VALUE, BEGINNING OF PERIOD........... $ 10.21 $ 9.66 $ 10.67 $ 10.28 $ 9.75
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income........................ 0.52(b) 0.52 0.48 0.60 0.64
Net realized and unrealized gain (loss) on
investments................................ (0.14) 0.49 (0.84) 0.43 0.49
------- ------- ------- ------- -------
Total from investment operations........... 0.38 1.01 (0.36) 1.03 1.13
------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Distributions from net investment income..... (0.59) (0.46) (0.53) (0.54) (0.60)
Distributions from net realized gain on
investments................................ -- -- (0.12) (0.10) --
------- ------- ------- ------- -------
Total distributions........................ (0.59) (0.46) (0.65) (0.64) (0.60)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD................. $ 10.00 $ 10.21 $ 9.66 $ 10.67 $ 10.28
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL RETURN (c)............................... 3.78% 10.80% (3.60%) 10.40% 12.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)......... $70,166 $77,419 $76,769 $54,057 $70,066
Ratio of expenses to average net assets...... 1.47% 1.45% 1.43% 1.29% 1.28%
Ratio of net investment income to average net
assets..................................... 5.19% 5.38% 4.67% 5.70% 6.42%
Ratio of waiver to average net assets (d).... 0.05% -- -- -- --
Portfolio turnover........................... 93% 53% 41% 53% 21%
</TABLE>
- ---------------------------------------------
(a) On February 21, 1995, Freedom Capital Management Corporation became the
Investment Adviser.
(b) Per share information is based on average shares outstanding.
(c) Based on net asset value which does not reflect the sales charge payable on
purchases of shares. Effective May 8, 1995, the Portfolio no longer imposes
a one time sales charge.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
24
BOND PORTFOLIO: NO-LOAD CLASS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE: SEPTEMBER 30, 1996
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......................................................... $10.21
-------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a)................................................................... 0.55
Net realized and unrealized (loss) on investments........................................... (0.16)
-------
Total from investment operations.......................................................... 0.39
-------
LESS DISTRIBUTIONS
Distributions from net investment income.................................................... (0.56)
Distributions from net realized gain on investments......................................... --
-------
Total distributions....................................................................... (0.56)
-------
NET ASSET VALUE, END OF PERIOD................................................................ $10.04
-------
-------
TOTAL RETURN (b).............................................................................. 3.88%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)........................................................ $1,988
Ratio of expenses to average net assets..................................................... 0.99%
Ratio of net investment income to average net assets........................................ 5.57%
Ratio of waiver to average net assets (c)................................................... 0.05%
Portfolio turnover.......................................................................... 93%
</TABLE>
- ---------------------------------------------
(a) Per share information is based on average shares outstanding.
(b) Based on net asset value.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
25
MANAGED TOTAL RETURN PORTFOLIO: FINANCIAL ADVISER CLASS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SELECTED DATA FOR A SHARE OUTSTANDING
THROUGHOUT THE: YEAR ENDED SEPTEMBER 30,
-------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995(a) 1994 1993 1992
------- ------- ------- ------- -------
NET ASSET VALUE, BEGINNING OF PERIOD........... $ 11.65 $ 11.24 $ 12.03 $ 11.48 $ 11.07
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income........................ 0.42(b) 0.28 0.18 0.29 0.34
Net realized and unrealized gain (loss) on
investments................................ 0.40 1.18 (0.16) 0.90 0.57
------- ------- ------- ------- -------
Total from investment operations........... 0.82 1.46 0.02 1.19 0.91
------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Distributions from net investment income..... (0.50) (0.30) (0.31) (0.26) (0.41)
Distributions from net realized gain on
investments +.............................. (0.52) (0.75) (0.50) (0.38) (0.09)
------- ------- ------- ------- -------
Total distributions........................ (1.02) (1.05) (0.81) (0.64) (0.50)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD................. $ 11.45 $ 11.65 $ 11.24 $ 12.03 $ 11.48
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL RETURN (c)............................... 7.58% 14.30% 0.10% 10.80% 8.40%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's)......... $12,123 $14,749 $17,515 $25,519 $20,894
Ratio of expenses to average net assets...... 2.21% 2.09% 1.94% 1.80% 1.90%
Ratio of net investment income to average net
assets..................................... 3.68% 2.29% 1.60% 2.54% 3.09%
Ratio of waiver to average net assets (d).... 0.06% -- -- -- 0.11%
Portfolio turnover........................... 159% 50% 50% 40% 37%
+Paid from realized net short-term gain........ $ 0.01 $ -- $ 0.13 $ 0.08 $ 0.02
</TABLE>
- ---------------------------------------------
(a) On February 21, 1995, Freedom Capital Management Corporation became
Investment Adviser.
(b) Per share information is based on average shares outstanding.
(c) Based on net asset value, which does not reflect the sales charge payable on
purchases of shares. Effective May 8, 1995, the Fund no longer imposes a one
time sales charge.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS)
26
FUNDMANAGER PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION AND SHARES OF THE PORTFOLIOS. FundManager Trust (the "Trust")
consists of a series of five separately managed portfolios (collectively, the
"Portfolios"), each with distinct investment objectives. The following is the
investment objective of the five portfolios presented herein: Aggressive Growth
Portfolio (capital appreciation without regard to current income), Growth
Portfolio (long-term capital appreciation with current income a secondary
consideration), Growth & Income Portfolio (combination of capital appreciation
and current income), Bond Portfolio, formerly the Income Fund (high level of
current income), and Managed Total Return Portfolio (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."
The Trust, with the exception of the Managed Total Return Portfolio, offers
both a Financial Adviser Class and a No-Load Class (commenced operations on
October 1, 1995) of shares. Managed Total Return Portfolio only offers a
Financial Adviser Class. Both classes of shares have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except that
Financial Adviser Class pays certain distribution expenses and has exclusive
voting rights with respect to its distribution plan. Income and expenses of each
Portfolio are borne pro rata by each class of shares except that the Financial
Adviser Class bears distribution and shareholder service expenses unique to that
class of shares.
The Trust retained 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 (through
November 11, 1996-- see Note 5), 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 Portfolio are charged to that Portfolio.
Expenses incurred by the Trust with respect to any two or more Portfolios are
allocated in proportion to the net asset levels of each Portfolio; except
where allocations of direct expenses to each Portfolio can otherwise be made
fairly.
(D) Federal Income Taxes. Each Portfolio is treated as a separate taxable
entity for federal tax purposes. Each Portfolio 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, 1996, Bond Portfolio had approximate net capital loss
carryforwards on the basis of identified cost, for federal income tax purposes
of approximately $2,530,165. These capital loss carryforwards will be used to
offset any future realized gains to the extent permitted by the Internal
27
FUNDMANAGER PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Revenue Code and thus will reduce the amount of distributions to shareholders
which would otherwise be necessary to relieve the Bond Portfolio of any
liability for federal income tax. These capital losses of $768,000 and
$1,762,165 will expire September 30, 1999, and September 30, 2000,
respectively.
(E) Income Equalization. Prior to October 1, 1994, the Portfolios 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 redemption of Portfolio shares. The Portfolio
discontinued equalization accounting as of October 1, 1994, and reclassified
net equalization credits (charges) in the amount of $87,454 for the Aggressive
Growth Portfolio, $14,113 for the Growth Portfolio, ($307,338) for the Growth
& Income Portfolio, ($42,638) for the Bond Portfolio and $89,941 for the
Managed Total Return Portfolio, 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 Portfolio 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, post October 31 losses, and short-term capital gain distributions
received by the Portfolios from other open-end Investment Companies.
(G) Reclassification of Net Asset Accounts. During the year ended September
30, 1996, the Portfolios 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)] between undistributed net investment income and
accumulated net realized gain/(loss) on investments:
<TABLE>
<CAPTION>
ACCUMULATED
UNDISTRIBUTED NET REALIZED
NET GAIN/(LOSS)
INVESTMENT ON
INCOME INVESTMENTS
------------ -------------
<S> <C> <C>
Aggressive Growth
Portfolio................. $ 636,627 $ (636,627)
Growth Portfolio........... 484,638 (484,638)
Growth & Income
Portfolio................. 142,931 (142,931)
Bond Portfolio............. 231,210 (231,210)
Managed Total Return
Portfolio................. 83,259 (83,259)
</TABLE>
(H) Use of Estimates. The 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 at the date of the financial statements and the reported amounts
of increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates.
3. 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 Portfolio's
assets, including the responsibility for making investment decisions and
placing orders for the purchase and sale of the Portfolios' 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
28
FUNDMANAGER PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
has overall responsibility for the business affairs of the Trust, periodic
reports on the investment performance of the Portfolio. For its services as
investment adviser, Freedom receives from each Portfolio a fee, payable
monthly, at the annual rate of 0.50% of each Portfolio's average daily net
assets up to $500 million and 0.40% of its average daily net assets in excess
of $500 million.
(B) Administration. The Trust retained Signature to serve as Administrator
and a Distributor (through November 11, 1996 -- see Note 5). Signature
provided management and administration services necessary for the operation of
the Trust, furnished office space and facilities required for conducting the
business of the Portfolios and paid the compensation of the Trust's officers
affiliated with Signature.
For these services, Signature received from each Portfolio a fee, payable
monthly, at the annual rate of 0.25% of each Portfolio'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. Effective April 1, 1996, the fee was voluntarily reduced to
0.13% of each Portfolio's average daily net assets.
(C) Brokerage Commissions. Through November 11, 1996, Signature acted as
primary broker for the Trust's portfolio transactions for which it received
commissions or dealer reallowances. During the year ended September 30, 1996,
Signature received dealer reallowances of $11,060 for Aggressive Growth
Portfolio, $9,451 from Growth Portfolio, $16,400 for Growth & Income
Portfolio, $60,000 for Bond Portfolio, and $33,250 for Managed Total Return
Portfolio from distributors of underlying portfolios.
(D) Distribution Fee and Shareholder Servicing Expenses. The Trust has
adopted a noncompensatory Distribution Plan and Agreement (the "Plan")
pursuant to Rule 12b-1 of the Act for the Financial Adviser Class of shares.
The Plan provides for a monthly payment by the Portfolios to the Distributors
in amounts representing actual expenses incurred by the Distributors for
marketing costs and services rendered in distributing the Portfolio's
Financial Adviser Class of shares at an annual rate not to exceed 0.50% of the
average daily net assets of each Portfolio's Financial Adviser Class of
shares. Up to a maximum of 0.25% of such payments may be made as Shareholder
Servicing Expenses pursuant to contracts that the Trust has with various
banks, trust companies, broker-dealers (other than the Distributors) or other
financial organizations (collectively, "Service Organizations") to provide
administrative services to the Trust, such as maintaining shareholder accounts
and records, for shares owned by Financial Adviser Class shareholders with
whom the Service Organization has a relationship.
(E) Sales Charges. The Trust had 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.
(F) Trustees' Fees. Trustees who are not affiliated with Signature or
Freedom receive compensation and out-of-pocket expenses from each Portfolio.
4. INVESTMENT TRANSACTIONS. Purchase and sale transactions of investments for
the year ended September 30, 1996, were as follows.
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- ------------------------------- ---------- ----------
<S> <C> <C>
Aggressive Growth Portfolio.... $62,487,484 $58,138,348
Growth Portfolio............... $27,835,490 $27,073,448
Growth & Income Portfolio...... $28,844,914 $34,912,960
Bond Portfolio................. $68,148,799 $71,611,993
Managed Total Return
Portfolio..................... $21,177,953 $23,428,717
</TABLE>
5. SUBSEQUENT EVENT. Effective November 11, 1996, Signature resigned as
administrator and distributor, Federated Administrative Services became the
administrator, and Edgewood Services, Inc., Freedom Distributors Corporation,
Sutro & Co., and Tucker Anthony became co-distributors of the Trust.
29
FUNDMANAGER TRUST
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of FundManager Trust:
We have audited the accompanying statement of assets and liabilities, including
the schedules of investments of FundManager Trust (comprising, respectively,
Aggressive Growth Portfolio, Growth Portfolio, Growth & Income Portfolio, Bond
Portfolio and Managed Total Return Portfolio) (the "Trust"), as of September 30,
1996, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the five 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.
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 the 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, 1996, 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 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,
1996, 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 five years in the period then ended, in
conformity with generally accepted accounting principles.
[SIGNATURE]
Boston, Massachusetts
November 21, 1996
30
APPENDIX
A1. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The
Financial Adviser Class shares of Aggressive Growth Portfolio (the
`Portfolio'') are represented by a solid line. The Russell 2000 Index (the
`R2000'') is represented by a broken solid line and the Lipper Capital
Appreciation Index (the `LCAI'') is represented by a double broken solid
line.The line graph is a visual representation of a comparison of change in
value of a $10,000 hypothetical investment in the Financial Adviser Class
shares of the Portfolio and the R2000 and the LCAI. The `x'' axis reflects
computation periods from 11/13/84 to 9/30/96. The `y'' axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Portfolio's Financial Adviser Class shares
as compared to the R2000 and the LCAI; the ending values were $41,517,
$41,941 and $51,687, respectively.
A2. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The No-
Load Class shares of Aggressive Growth Portfolio (the `Portfolio'') are
represented by a solid line. The Russell 2000 Index (the `R2000'') is
represented by a broken solid line and the Lipper Capital Appreciation
Index (the `LCAI'') is represented by a double broken solid line.The line
graph is a visual representation of a comparison of change in value of a
$10,000 hypothetical investment in the No-Load Class shares of the
Portfolio and the R2000 and the LCAI. The `x'' axis reflects computation
periods from 10/1/95 to 9/30/96. The `y'' axis reflects the cost of the
investment. The right margin reflects the ending value of the hypothetical
investment in the Portfolio's No-Load Class shares as compared to the R2000
and the LCAI; the ending values were $11,270, $11,313 and $11,554,
respectively.
A3. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The
Financial Adviser Class shares of Growth Portfolio (the `Portfolio'') are
represented by a solid line. The Standard & Poor's 500 Index (the `S&P
500') is represented by a broken solid line and the Lipper Growth Index
(the `LGI'') is represented by a double broken solid line.The line graph
is a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Financial Adviser Class shares of the
Portfolio and the S&P 500 and the LGI. The `x'' axis reflects computation
periods from 11/13/84 to 9/30/96. The `y'' axis reflects the cost of the
investment. The right margin reflects the ending value of the hypothetical
investment in the Portfolio's Financial Adviser Class shares as compared to
the S&P 500 and the LGI; the ending values were $39,933, $60,533 and
$53,823, respectively.
A4. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The No-
Load Class shares of Growth Portfolio (the `Portfolio'') are represented
by a solid line. The Standard & Poor's 500 Index (the `S&P 500'') is
represented by a broken solid line and the Lipper Growth Index (the
`LGI'') is represented by a double broken solid line.The line graph is a
visual representation of a comparison of change in value of a $10,000
hypothetical investment in the No-Load Class shares of the Portfolio and
the S&P 500 and the LGI. The `x'' axis reflects computation periods from
10/1/95 to 9/30/96. The `y'' axis reflects the cost of the investment. The
right margin reflects the ending value of the hypothetical investment in
the Portfolio's No-Load Class shares as compared to the S&P 500 and the
LGI; the ending values were $11,420, $12,034 and $11,375, respectively.
A5. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The
Financial Adviser Class shares of Growth & Income Portfolio (the
`Portfolio'') are represented by a solid line. The Standard & Poor's 500
Index (the `S&P 500'') is represented by a broken solid line. The Lehman
Government Corporate Total Index (the `LG/CI'') is represented by a double
broken solid line and the Lipper Growth & Income Index (the `LG&I'') is
represented by a dotted line.The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
Financial Adviser Class shares of the Portfolio and the S&P 500, LG/CI, and
the LG&I. The `x'' axis reflects computation periods from 11/13/84 to
9/30/96. The `y'' axis reflects the cost of the investment. The right
margin reflects the ending value of the hypothetical investment in the
Portfolio's Financial Adviser Class shares as compared to the S&P 500,
LG/CI, and the LG&I; the ending values were $38,652, $60,533, $31,403 and
$51,259, respectively.
A6. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The No-
Load Class shares of Growth & Income Portfolio (the `Portfolio'') are
represented by a solid line. The Standard & Poor's 500 Index (the `S&P
500') is represented by a broken solid line. The Lehman Government
Corporate Total Index (the `LG/CI'') is represented by a double broken
solid line and the Lipper Growth & Income Index (the `LG&I'') is
represented by a dotted line.The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the
No-Load Class shares of the Portfolio and the S&P 500, LG/CI, and the LG&I.
The `x'' axis reflects computation periods from 10/1/95 to 9/30/96. The
`y'' axis reflects the cost of the investment. The right margin reflects
the ending value of the hypothetical investment in the Portfolio's No-Load
Class shares as compared to the S&P 500, LG/CI, and the LG&I; the ending
values were $11,450, $12,034, $10,451 and $11,709, respectively.
A7. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The
Financial Adviser Class shares of Bond Portfolio (the `Portfolio'') are
represented by a solid line. The Lehman Government/ Corporate Total Index
(the `LG/CI'') is represented by a broken solid line and the Lipper
General Bond Index (the `LGBI'') is represented by a double broken solid
line.The line graph is a visual representation of a comparison of change in
value of a $10,000 hypothetical investment in the Financial Adviser Class
shares of the Portfolio and the LG/CI and the LGBI. The `x'' axis reflects
computation periods from 11/13/84 to 9/30/96. The `y'' axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Portfolio's Financial Adviser Class shares
as compared to the LG/CI and the LGBI; the ending values were $23,584,
$31,403 and $26,723, respectively.
A8. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The No-
Load Class shares of Bond Portfolio (the `Portfolio'') are represented by
a solid line. The Lehman Government/ Corporate Total Index (the `LG/CI'')
is represented by a broken solid line and the Lipper General Bond Index
(the `LGBI'') is represented by a double broken solid line.The line graph
is a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the No-Load Class shares of the Portfolio and
the LG/CI and the LGBI. The `x'' axis reflects computation periods from
10/1/95 to 9/30/96. The `y'' axis reflects the cost of the investment. The
right margin reflects the ending value of the hypothetical investment in
the Portfolio's No-Load Class shares as compared to the LG/CI and the LGBI;
the ending values were $10,390, $10,451 and $10,865, respectively.
A9. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The
Financial Adviser Class shares of Managed Total Return Portfolio (the
`Portfolio'') are represented by a solid line. The Lehman Government/
Corporate Total Index (the `LG/CI'') is represented by a broken solid line
and the Lipper General Bond Index (the `LGBI'') is represented by a double
broken solid line.The line graph is a visual representation of a comparison
of change in value of a $10,000 hypothetical investment in the Financial
Adviser Class shares of the Portfolio and the LG/CI and the LGBI. The `x''
axis reflects computation periods from 8/4/88 to 9/30/96. The `y'' axis
reflects the cost of the investment. The right margin reflects the ending
value of the hypothetical investment in the Portfolio's Financial Adviser
Class shares as compared to the LG/CI and the LGBI; the ending values were
$19,838, $20,396 and $20,006, respectively.
A10. The graphic presentation here displayed consists of a pie chart. The
corresponding components of the pie chart are listed underneath. The pie
chart is divided into four portions and represents the Aggressive Growth
Portfolio's Schedule of Investments. The Cash and Other Assets Net of
Liabilities portion (1.2%) is represented by dark black shading, the Small
Cap portion (59.6%) is represented by a light black shading, the Large Cap
portion (20.3%) is represented by dark gray shading, and the Global portion
(18.9%) is represented by light gray shading.
A11. The graphic presentation here displayed consists of a pie chart. The
corresponding components of the pie chart are listed underneath. The pie
chart is divided into three portions and represents the Growth Portfolio's
Schedule of Investments. The Cash and Other Assets Net of Liabilities
portion (1.5%) is represented by dark black shading, the Growth portion
(57.7%) is represented by a light black shading, and the Value portion
(40.8%) is represented by dark gray shading.
A12. The graphic presentation here displayed consists of a pie chart. The
corresponding components of the pie chart are listed underneath. The pie
chart is divided into three portions and represents the Growth & Income
Portfolio's Schedule of Investments. The Cash and Other Assets Net of
Liabilities portion (0.5%) is represented by dark black shading, the Growth
and Income portion (63.7%) is represented by a light black shading, and the
Equity Income portion (35.8%) is represented by dark gray shading.
A13. The graphic presentation here displayed consists of a pie chart. The
corresponding components of the pie chart are listed underneath. The pie
chart is divided into four portions and represents the Bond Portfolio's
Schedule of Investments. The Cash and Other Assets Net of Liabilities
portion (0.7%) is represented by dark black shading, the Intermediate
Maturity portion (49.7%) is represented by a light black shading, the Long
Maturity portion (29.9%) is represented by dark gray shading, and the Short
Maturity portion (19.7%) is represented by light gray shading.
A14. The graphic presentation here displayed consists of a pie chart. The
corresponding components of the pie chart are listed underneath. The pie
chart is divided into five portions and represents the Managed Total Return
Portfolio's Schedule of Investments. The Cash and Other Assets Net of
Liabilities portion (2.7%) is represented by dark black shading, the Fixed
Income portion (54.9%) is represented by a light black shading, the Growth
and Income portion (13.3%) is represented by light gray shading, the
Aggressive Growth portion (10.9%) is represented by medium gray shading, and
the Growth portion (18.2%) is represented by dark gray shading.