[Graphic]
PRESIDENT'S MESSAGE
May 21, 1997
Dear Fellow Shareholder:
Money Magazine, The New York Times, The Wall Street Journal, The Boston
Globe and other widely read publications have recently featured articles on
the emerging growth of funds-of-funds. With the securities legislation
passed in the last quarter of 1996, fund companies can more easily open and
operate funds-of-funds. The concept we pioneered over a decade ago of
building portfolios of mutual funds for our clients has certainly become a
growing strategy in the today's marketplace.
This recent publicity is the result of the increase in fund complexes
offering fund-of-funds to the public, and the number of dollars flowing into
this investment strategy. According to Morningstar, over 53 fund-of-funds
existed as of March 31, 1997, nearly a 300% increase since 1990. Assets in
funds-of-funds have grown from $1 billion in 1987 to over $16.4 billion as
of February, 1997, according to Financial Research, a Boston based industry
analyst. Investors continue to seek the diversification offered by the
funds-of-funds concept.
Charles Jaffee of The Boston Globe noted on May 4, 1997, that investors
owning multiple funds from the same fund family may potentially suffer from
severe volatility due to lack of diversification. Commonly, fund companies
utilize similar investment strategies throughout their fund families, and
can own the same stocks or bonds in many of their funds. As Michael Hirsch
describes in Mr. Jaffee's column, "If all of your money is with one fund
family, chances are that you don't have the diversification you expect."
Mutual fund investment management style is extremely important in creating a
diversified portfolio. Therefore, if investors own several funds with the
same style, they may have unknowingly concentrated their assets and limited
their diversification.
Unlike many funds-of-funds, FundManager is not limited to picking funds from
our own "fund family," nor are we restricted to funds in a "mutual fund
marketplace." FundManager builds diversified portfolios of mutual funds from
the entire universe of 8,000 mutual funds available today. Every fund you
own through your investment in FundManager has been thoroughly screened,
researched and continuously monitored by our investment team, and appears on
our roster due to merit, not convenience.
We are happy to have a few more competitors in the marketplace. Because we
appreciate your business and exist to serve you, we will continue to help
you achieve your financial goals. Should you have any questions about your
investments, please do not hesitate to contact us toll free at (800)
344-9033.
Sincerely,
[Graphic]
Charles B. Lipson
President
MANAGEMENT DISCUSSION AND ANALYSIS
Dear Fellow Shareholder:
It is our pleasure to present you with this report, covering the first half
of the current fiscal year, ended March 31, 1997. We shall follow the same
format as earlier reports -- beginning with a detailed analysis of two of
the funds in which FundManager maintains a position and then reviewing
FundManager's performance portfolio by portfolio.
Over the past six months, the markets have reminded us that volatility is a
part of investing. We are happy to report that the FundManager Portfolios'
diversification strategy has served the investor by helping to avoid these
bumps in the marketplace by investing in funds such as Sound Shore Fund and
PIMCO Total Return Fund; quality managers who stick to their investment
mettle in turbulent markets.
Since its inception in 1985, co-managers T. Gibbs Kane and Harry Burn have
produced consistently solid returns for the Sound Shore Fund. Although the
Fund has been a holding within the FundManager private accounts since 1989,
the majority of Wall Street continued to overlook this gem of a fund until
only recently as assets have more than quintupled since the beginning of
1996, to over $340 million under management as of March 31, 1997. Due in
large part to its increased asset size, we were fortunate enough to purchase
Sound Shore Fund on behalf of all of our shareholders in the FundManager
Growth Portfolio during the fourth quarter of last year; we have long
considered this mid-capitalization value fund to be among the best in the
mid-cap class.
Burn and Kane's primary focus is on the stocks of well managed and
financially secure mid-sized companies in industries that are temporarily
out of favor by the rest of the market. Following a strict and concentrated
value style, they search for firms selling at the greatest discount from
their historic price-earnings ratios based on Wall Street earnings
forecasts. Then they sift carefully among the companies to choose only those
that they think have a good reason to improve. "Visiting a company lets us
uncover unresolved strategy issues, or the lack of a legitimate plan to meet
or exceed earnings expectations," says Burn. "We've dodged a lot of bullets
by not overlooking the legwork."
PIMCO Total Return Fund has been part of the FundManager Bond Portfolio
since the Bond Portfolio's inception. As the grandfather of all holdings,
PIMCO has proven itself year after year, and has continued to demonstrate
consistent returns. Bill Gross and his investment team at PIMCO have
delivered solid performance, and we believe that he has proven to be one of
the very best fixed income managers in the country. FundManager has proven
to be a patient long-term investor, and has been duly rewarded.
[Graphic]
Michael D. Hirsch
Portfolio Manager
Our recent visit with PIMCO highlights Gross' long-term return optimism for
fixed income markets. For a week each year, all of the top level investment
professionals gather at an off-site area to formulate their outlook and
strategy. They take a long-term perspective, trying to concentrate on the
next five years. Their most recent retreat reinforced their long term
optimism for the fixed income markets. Factors such as increasing global
competition for capital as well as goods and services, demographic trends
which suggest increased saving and lower consumption, and improving federal
budget deficits, help build the long term bull case for bonds. While Gross
continues to be very bullish on bonds in the long run, he has become more
conservative in the face of further potential rate hikes by the Federal
Reserve. He is concerned about an economy which is picking up steam without
much excess capacity. While the portfolio is currently positioned quite
conservatively, he is looking for an opportunity to become more aggressive.
We take great pride in having owned PIMCO Total Return Fund since the
inception of FundManager. It serves as a reminder that our job is to
identify the very best managers we can, invest with those managers and stick
with them to the benefit of our shareholders.
As you can see in the table which follows, all three equity Portfolios --
Aggressive Growth, Growth, Growth with Income -- outperformed their peers by
a considerable margin for the six months ended March 31, 1997.
<TABLE>
<CAPTION>
TOTAL RETURNS BASED ON
OFFERING PRICE
FOR THE SIX MONTHS ENDED
MARCH 31, 1997*
<S> <C>
Aggressive Growth Portfolio -- Financial Adviser Class -1.8%
Peer Group-Aggressive Growth** -3.8
Growth Portfolio -- Financial Adviser Class 9.7
Peer Group -- Growth** 3.4
Growth with Income Portfolio -- Financial Adviser Class 9.2
Peer Group -- Growth/Income** 8.3
Bond Portfolio -- Financial Adviser Class 1.7
Peer Group -- Diversified Bond** 3.0
Managed Total Return Portfolio -- Financial Adviser Class 3.8
Peer Group Flexible** 5.2
</TABLE>
* Performance quoted reflects past performance and is not indicative of
future results. 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. Total returns for the period for the No-Load Class of the
Aggressive Growth Portfolio, Growth Portfolio, Growth with Income Portfolio,
and Bond Portfolio were -1.5%, 10.0%, 9.4%, and 1.9%, respectively.
** Value Line divides the mutual fund universe into 30 different categories
according to each fund's objective.
In terms of portfolio structure, there has been a considerable amount of
restructuring during the first half of the fiscal year. Let us review it
portfolio by portfolio:
AGGRESSIVE GROWTH: During the first half, we liquidated the last of our
global funds -- SoGen International. As we discussed in some detail in the
most recent Annual Report, with the continued relative strength of the U.S.
economy compared to our major trading partners, it is likely that the
strength of the U.S. dollar versus other currencies will continue as well.
This will make it extremely difficult for global funds to perform as well as
their domestic counterparts. However, inasmuch as Franklin Mutual Discovery
has in excess of 50% of its assets invested overseas, foreign exposure in
the Aggressive Growth Portfolio for the period ended March 31, 1997, was
11.6%. More recently, we also liquidated John Hancock Special Equities. This
was due to a shift in management structure.
GROWTH: To take full advantage of the Advisor's growth/value model (which
assesses the relative attractiveness of the growth and value styles of
equity valuation and selection), this Portfolio has adopted a core/non-core
structure. Forty percent of assets are now dedicated to Vanguard Index
Growth and Vanguard Index Value, weighted according to the model, currently
weighted 70%/30% growth vs. value. The remaining sixty percent will be
allocated to fund managers who have demonstrated an ability to provide
consistent value-added performance.
Graphic representation `A1'' omitted. See Appendix.
This entailed quite a number of purchases and sales. Funds purchased were:
Sound Shore, MAS Value, Dodge & Cox Stock (formerly held in the Growth with
Income Portfolio), as well as the two Vanguard index funds. Funds
liquidated: Oakmark, Third Avenue Value, and Fidelity Fund. Funds retained
were: Yacktman, Davis New York Venture, Guardian Park Avenue, Clipper, and
Franklin Mutual Beacon. An ancillary benefit to you the shareholders will be
a reduction in the average expense ratio of underlying funds, since as a
rule index funds have appreciably lower expense ratios than actively managed
funds.
Earlier in the period, we also liquidated the Fund's position in MAS Equity
due to a dramatic shift in management style.
GROWTH WITH INCOME: Three changes in the Portfolio's lineup of managers
occurred over the past six months. First, Fidelity Advisor Equity Income was
liquidated, due to manager turnover. We purchased Fundamental Investors, a
member of the American Funds family. While Washington Mutual, another
Portfolio holding, is also from the American Funds family, each of the two
utilizes an investment process distinct from the other.
Lastly, as described above, Dodge & Cox Stock was shifted to the Growth
Portfolio.
BOND: We have also adopted a core/non-core style in this Portfolio. Fifty
percent of the Portfolio's assets are currently invested in a basket of
index funds, to proportionally reflect our interest rate outlook. This
allows us to better manage the maturity and duration of the Portfolio in
order to pursue higher and more consistent rates of return and lower expense
ratios for the underlying funds.
As of March 31, 1997, our duration (the measure of a bond's price
sensitivity to interest rate fluctuation) was 4.92 years, in line with that
of our benchmark, the Lehman Brothers Government/Corporate Index.* With
strong economic activity and low unemployment, Allen Greenspan, chairman of
the Federal Reserve Board, raised the Federal Funds rate by 25 basis points
from 5.25% to 5.50% on March 24, 1997. While our long-term outlook for bonds
remains positive, we are concerned about further rate increases by the
Federal Reserve Board, and therefore we are neutral in the actively managed
core.
Graphic representation `A2'' omitted. See Appendix.
The remaining fifty percent is allocated to actively managed funds with a
documented track record of value-added performance. The basket of index
funds purchased were: Vanguard Fixed Income Institutional Treasury Fund,
Institutional Corporate Fund, Admiral Institutional Treasury Fund, Admiral
Short-Term and Long-Term Treasury Fund, Fixed Income Short-Term Treasury
Fund, Long-Term Corporate Fund, and Long-Term Treasury Fund. An active fund
purchased was: MAS Fixed Income. Active funds retained were: Bond Fund of
America, MFS Bond, FPA New Income, and PIMCO Total Return. Active funds
liquidated were: PIMCO Low Duration, Bernstein Intermediate Duration,
Franklin U.S. Government, IDS Selective, and United Bond.
MANAGED TOTAL RETURN: The change that have occurred in the past six months
reflect the rationales set forth above: in the aggressive growth sector,
John Hancock Special Equities was liquidated. In the growth and income
sector, Dodge & Cox Stock was liquidated and Fundamental Investors was
purchased. In the bond fund sector, PIMCO Low Duration was liquidated and
Vanguard Long-Term Treasury was purchased. As in the Bond Portfolio, our
duration remains neutral to the Lehman Bond Index. As fundamental investors,
we continue to be bullish on bonds in the long term on a relative risk
reward basis to the equity market, and our asset allocation in the fund as
of March 31, 1997, is described in the pie chart below.
Graphic representation `A3'' omitted. See Appendix.
As always, we appreciate your continued support and welcome your comments
and questions.
Respectfully submitted,
[Graphic]
* Lehman Brothers Government/Corporate (Total) Index 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.
SHAREHOLDER MEETING RESULTS
A special Meeting of Shareholders of FundManager Aggressive Growth
Portfolio, FundManager Growth Portfolio, FundManager Growth with Income
Portfolio (formerly, Growth & Income Portfolio), FundManager Bond Portfolio
and FundManager Managed Total Return Portfolio, portfolios of FundManager
Portfolios (formerly, FundManager Trust) (the "Trust"), was held on December
16, 1996. On October 18, 1996, the record date for shareholders voting at
the meeting, there were 14,283,158 total outstanding shares; 2,393,020 for
FundManager Aggressive Growth Portfolio, 1,815,092 for FundManager Growth
Portfolio, 1,909,597 for FundManager Growth with Income Portfolio, 7,102,465
for FundManager Bond Portfolio and 1,062,982 for FundManager Managed Total
Return Portfolio. The following items were considered and approved by
shareholders. The results of their voting were as follows:
<TABLE>
<CAPTION>
AGENDA WITHHELD
ITEM AFFIRMATIVE AGAINST ABSTAIN AUTHORITY TO VOTE
<C> <S>
1. The approval of a new Master Investment Advisory Contract between the
Trust, on behalf of each Portfolio, and Freedom Capital Management Corporation:
</TABLE>
<TABLE>
<S> <C> <C> <C>
FundManager
Aggressive
Growth Portfolio 1,400,201 4,748 15,128
FundManager Growth
Portfolio 1,149,631 2,539 12,347
FundManager Growth
with
Income Portfolio 1,165,157 503 10,437
FundManager Bond
Portfolio 5,243,847 0 15,152
FundManager Managed
Total Return
Portfolio 563,940 25,524 4,249
</TABLE>
<TABLE>
<C> <S>
2. The election of four Trustees of the Trust:
</TABLE>
<TABLE>
<S> <C> <C>
Dexter A Dodge 9,924,510 21,078
Ernest T. Kendall 9,926,569 19,019
Richard B. 9,924,510 21,078
Osterberg
John R. Haack 9,926,908 18,680
</TABLE>
<TABLE>
<C> <S>
3. The ratification of the selection of the firm of Ernst & Young LLP as
independent auditors of the Trust:
</TABLE>
<TABLE>
<S> <C> <C> <C>
9,906,836 6,215 32,537
</TABLE>
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 March 31, 1997, compared to the
Russell 2000 Index (R2000)+ and Lipper Capital Appreciation Average
(LCAA).++
Graphic representation `A4'' omitted. See Appendix.
<TABLE>
<S> <C>
Six-Month Total Return for the Period Ended
March 31, 1997 (1.8%)
</TABLE>
Average Annual Total Returns for the Period Ended March 31, 1997
<TABLE>
<S> <C>
1 Year 4.8%
5 Year 10.8%
10 Year 9.6%
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 R2000 and LCAA have been adjusted to reflect reinvestment
of dividends on securities in the index and average. 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 LCAA is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported
net of expenses or other fees that the SEC requires to be reflected in a
fund's performance.
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 March 31, 1997, compared to the Russell 2000 Index
(R2000)+ and Lipper Capital Appreciation Average (LCAA).++
Graphic representation `A5'' omitted. See Appendix.
<TABLE>
<S> <C>
Six-Month Total Return for the Period Ended
March 31, 1997 (1.5%)
</TABLE>
Average Annual Total Return for the Period Ended March 31, 1997
<TABLE>
<S> <C>
1 Year 5.3%
Start of Performance (October 1, 1995) 7.2%
</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 R2000 and the LCAA have been adjusted to reflect
reinvestment of dividends on securities in the index and average.
+ 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 LCAA is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported
net of expenses or other fees that the SEC requires to be reflected in a
fund's performance.
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 March 31, 1997, compared to the Standard & Poor's
500 Index (S&P 500)+ and Lipper Growth Average (LGA).++
Graphic representation `A6'' omitted. See Appendix.
<TABLE>
<S> <C>
Six-Month Total Return for the Period Ended
March 31, 1997 9.7%
</TABLE>
Average Annual Total Returns for the Period Ended March 31, 1997
<TABLE>
<S> <C>
1 Year 15.1%
5 Year 13.9%
10 Year 10.7%
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 S&P 500 and LGA have been adjusted to reflect
reinvestment of dividends on securities in the index and average. Effective
May 8, 1995, the Portfolio no longer imposes a one time sales charge.
+ The S&P 500 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 LGA is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported
net of expenses or other fees that the SEC requires to be reflected in a
fund's performance.
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 March 31, 1997, compared to the Standard & Poor's 500 Index
(S&P 500)+ and Lipper Growth Average (LGA).++
Graphic representation `A7'' omitted. See Appendix.
<TABLE>
<S> <C>
Six-Month Total Return for the Period Ended
March 31, 1997 10.0%
</TABLE>
Average Annual Total Return for the Period Ended March 31, 1997
<TABLE>
<S> <C>
1 Year 15.8%
Start of Performance (October 1, 1995) 16.4%
</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&P 500 and LGA have been adjusted to reflect
reinvestment of dividends on securities in the index and average.
+ The S&P 500 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 LGA is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported
net of expenses or other fees that the SEC requires to be reflected in a
fund's performance.
PERFORMANCE SUMMARY
GROWTH WITH INCOME PORTFOLIO -- FINANCIAL ADVISER CLASS
Growth of $10,000 Invested in Growth with Income Portfolio
The graph below illustrates the hypothetical investment of $10,000 in
Financial Adviser Class of the Growth with Income Portfolio (GIP) from
November 13, 1984 (start of performance) to March 31, 1997, compared to the
Standard & Poor's 500 Index (S&P 500),+ Lehman Government Corporate Total
Index (LG/CI),+ and Lipper Growth & Income Average (LG&IA).++
Graphic representation `A8'' omitted. See Appendix.
<TABLE>
<S> <C>
Six-Month Total Return for the Period Ended
March 31, 1997 9.2%
</TABLE>
Average Annual Total Returns for the Period Ended March 31, 1997
<TABLE>
<S> <C>
1 Year 13.2%
5 Year 14.0%
10 Year 10.4%
Start of Performance (November 13, 1984) 12.3%
</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&P 500, LG/CI, and LG&IA have been adjusted to reflect
reinvestment of dividends on securities in the indices and average.
Effective May 8, 1995, the Portfolio no longer imposes a one time sales
charge.
+ The S&P 500 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 indices are unmanaged.
++ The LG&IA is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported
net of expenses or other fees that the SEC requires to be reflected in a
fund's performance.
GROWTH WITH INCOME PORTFOLIO --
NO-LOAD CLASS
Growth of $10,000 Invested in Growth with Income Portfolio
The graph below illustrates the hypothetical investment of $10,000 in the
No-Load Class of the Growth with Income Portfolio (GIP) from October 1, 1995
(start of performance) to March 31, 1997, compared to the Standard & Poor's
500 Index (S&P 500),+ Lehman Government Corporate Total Index (LG/CI),+ and
Lipper Growth & Income Average (LG&IA).++
Graphic representation `A9'' omitted. See Appendix.
<TABLE>
<S> <C>
Six-Month Total Return for the Period Ended
March 31, 1997 9.4%
</TABLE>
Average Annual Total Return for the Period Ended March 31, 1997
<TABLE>
<S> <C>
1 Year 13.8%
Start of Performance (October 1, 1995) 15.9%
</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 S&P 500, LG/CI, and LG&IA have been adjusted to reflect
reinvestment of dividends on securities in the indices and average.
+ The S&P 500 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 indices are unmanaged.
++ The LG&IA is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported
net of expenses or other fees that the SEC requires to be reflected in a
fund's performance.
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 March 31, 1997, compared to the Lehman
Government/Corporate Total Index (LG/CI)+ and Lipper General Bond Average
(LGBA).++
Graphic representation `A10'' omitted. See Appendix.
<TABLE>
<S> <C>
Six-Month Total Return for the Period Ended
March 31, 1997 1.7%
</TABLE>
Average Annual Total Returns for the Period Ended March 31, 1997
<TABLE>
<S> <C>
1 Year 3.8%
5 Year 6.1%
10 Year 6.0%
Start of Performance (November 13, 1984) 7.3%
</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 and LGBA have been adjusted to reflect reinvestment
of dividends on securities in the index and average. 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 LGBA is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported
net of expenses or other fees that the SEC requires to be reflected in a
fund's performance.
For this illustration, the LGBA 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 March 31, 1997, compared to the Lehman Government/Corporate
Total Index (LG/CI)+ and Lipper General Bond Average (LGBA).++
Graphic representation `A11'' omitted. See Appendix.
<TABLE>
<S> <C>
Six-Month Total Return for the Period Ended
March 31, 1997 1.9%
</TABLE>
Average Annual Total Return for the Period Ended March 31, 1997
<TABLE>
<S> <C>
1 Year 4.4%
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 and LGBA have been adjusted to reflect reinvestment
of dividends on securities in the index and average.
+ 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 LGBA is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported
net of expenses or other fees that the SEC requires to be reflected in a
fund's performance.
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 the
Managed Total Return Portfolio from August 4, 1988 (start of performance) to
March 31, 1997, compared to the Lehman Government/Corporate Total Index
(LG/CI)+ and Lipper General Bond Average (LGBA).++
Graphic representation `A12'' omitted. See Appendix.
<TABLE>
<S> <C>
Six-Month Total Return for the Period Ended
March 31, 1997 3.8%
</TABLE>
Average Annual Total Returns for the Period Ended March 31, 1997
<TABLE>
<S> <C>
1 Year 7.1%
5 Year 8.0%
Start of Performance (August 4, 1988) 8.7%
</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 LG/CI and LGBA have been adjusted to reflect reinvestment
of dividends on securities in the index and average. 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 Fund's performance. The
index is unmanaged.
++ The LGBA is a compilation of a specified category of mutual fund total
returns reported to Lipper Analytical Services, Inc. Each fund is reported
net of expenses or other fees that the SEC requires to be reflected in a
fund's performance.
For this illustration, the LGBA began performance December 31, 1990. The
index was assigned a beginning value of $11,768, the value of the Portfolio
on December 31, 1990.
FUNDMANAGER PORTFOLIOS
SCHEDULE OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
AGGRESSIVE GROWTH PORTFOLIO
High capital appreciation. Seeks capital appreciation without regard to
current income.
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
SMALL CAP FUNDS -- (48.6%)
<C> <S> <C>
173,132 Barron Asset Fund $ 6,056,140
190,645 FPA Capital Fund 6,154,036
24 John Hancock Regional
Bank Fund (Class A) 881
321,021 T. Rowe Price New Horizons 6,182,858
TOTAL SMALL CAP FUNDS 18,393,915
LARGE CAP FUNDS -- (32.3%)
236,696 Harbor Capital Appreciation
Fund 6,142,258
184,494 Brandywine Fund 6,086,469
TOTAL LARGE CAP FUNDS 12,228,727
GLOBAL FUNDS -- (19.6%)
408,036 Mutual Discovery Fund 7,418,094
SHORT-TERM INVESTMENT -- (0.3%)
99,510 SEI Daily Income:
Prime Obligation 99,510
TOTAL INVESTMENTS AT MARKET
VALUE (COST $36,453,213)(A) 38,140,246
LIABILITIES NET OF OTHER ASSETS (301,319)
NET ASSETS (100.0%) $ 37,838,927
</TABLE>
Graphic representation `A13'' omitted. See Appendix.
GROWTH PORTFOLIO
Modest capital appreciation. Primarily seeks long-term capital appreciation.
Current income is a secondary consideration.
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
GROWTH FUNDS -- (68.7%)
<C> <S> <C>
239,145 Davis New York Venture Fund $ 4,266,340
110,940 Guardian Park Avenue Fund, Inc. 4,247,901
423,878 Vanguard Index Trust
Growth Fund 7,396,668
319,142 Yacktman Fund 4,388,199
TOTAL GROWTH FUNDS 20,299,108
VALUE FUNDS -- (30.7%)
6 FPA Paramount Fund, Inc. 87
15,924 Clipper Fund 1,111,216
14,151 Dodge & Cox Stock Fund 1,146,062
68,780 MAS Value Portfolio 1,138,995
81,928 Mutual Beacon Fund 1,108,483
50,437 Sound Shore Fund, Inc. 1,118,197
202,493 Vanguard Index Trust Value Fund 3,428,217
TOTAL VALUE FUNDS 9,051,257
SHORT-TERM INVESTMENT -- (0.5%)
146,710 SEI Daily Income: Prime
Obligation 146,710
TOTAL INVESTMENTS AT MARKET
VALUE (COST $28,929,271)(B) 29,497,075
OTHER ASSETS NET OF LIABILITIES 31,863
NET ASSETS (100.0%) $ 29,528,938
</TABLE>
Graphic representation `A14'' omitted. See Appendix.
(See Notes which are an integral part of the Financial Statements)
FUNDMANAGER PORTFOLIOS
SCHEDULE OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
GROWTH WITH INCOME PORTFOLIO
Income and modest capital appreciation. Seeks a combination of capital
appreciation and current income.
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<C> <S> <C>
GROWTH AND INCOME FUNDS -- (58.9%)
559,877 AIM Charter Fund $ 6,119,460
242,543 Fundamental Investors, Inc. 5,990,813
495,198 Lord Abbett Affiliated Fund 6,402,904
TOTAL GROWTH AND
INCOME FUNDS 18,513,177
EQUITY INCOME FUNDS -- (40.0%)
155,036 Hotchkis & Wiley Equity
Income Fund 2,934,836
203,365 T. Rowe Price Equity
Income Fund 4,610,294
200,410 Washington Mutual Investors
Fund 5,042,323
TOTAL EQUITY INCOME FUNDS 12,587,453
SHORT-TERM INVESTMENTS -- (1.3%)
397,370 SEI Daily Income: Prime
Obligation 397,370
TOTAL INVESTMENTS AT MARKET VALUE
(COST $28,382,796)(C) 31,498,000
LIABILITIES NET OF OTHER ASSETS (71,491)
NET ASSETS (100.0%) $ 31,426,509
</TABLE>
Graphic representation `A15'' omitted. See Appendix.
BOND PORTFOLIO
Monthly income. Seeks a high level of current income.
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<C> <S> <C>
SHORT MATURITY FUNDS -- (30.8%)
593,537 FPA New Income Fund $ 6,487,360
556,763 MAS Fixed Income Portfolio 6,541,955
539,414 Vanguard Admiral Funds, Inc. --
Short-Term U.S. Treasury
Portfolio 5,361,771
197,629 Vanguard Fixed Income
Securities Fund -- Short-Term
U.S. Treasury Portfolio 1,988,144
TOTAL SHORT MATURITY FUNDS 20,379,230
INTERMEDIATE MATURITY FUNDS -- (63.6%)
491,205 Bond Fund of America, Inc. 6,641,088
506,667 MFS Bond Fund (Class A) 6,571,476
618,575 PIMCO Total Return Fund 6,352,769
638,699 Vanguard Admiral Funds, Inc. --
Intermediate Term U.S.
Treasury Portfolio 6,348,670
700,059 Vanguard Fixed Income
Securities Fund -- Intermediate
Term Corporate Portfolio 6,657,556
939,340 Vanguard Fixed Income Securities
Fund -- Intermediate Term
U.S. Treasury Portfolio 9,524,905
TOTAL INTERMEDIATE
MATURITY FUNDS 42,096,464
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FUNDMANAGER PORTFOLIOS
SCHEDULE OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
BOND PORTFOLIO -- CONTINUED
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<C> <S> <C>
LONG MATURITY FUNDS -- (5.5%)
177,563 Vanguard Admiral Funds, Inc. --
Long-Term U.S. Treasury
Portfolio $ 1,738,339
208,116 Vanguard Fixed Income Securities
Fund -- Long-Term Corporate
Portfolio 1,756,501
17,964 Vanguard Fixed Income Securities
Fund -- Long-Term U.S. Treasury
Portfolio 170,661
TOTAL LONG MATURITY FUNDS 3,665,501
SHORT-TERM INVESTMENT -- (0.0%)
100 SEI Daily Income: Prime
Obligation 100
TOTAL INVESTMENTS AT MARKET VALUE
(COST $66,972,613)(D) 66,141,295
OTHER ASSETS NET OF LIABILITIES 18,718
NET ASSETS (100.0%) $ 66,160,013
</TABLE>
Graphic representation `A16'' omitted. See Appendix.
MANAGED TOTAL RETURN PORTFOLIO
Asset allocation. Seeks high total return through disciplined asset
allocation.
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
<C> <S> <C>
AGGRESSIVE GROWTH FUNDS -- (10.3%)
11,949 Brandywine Fund $ 394,206
14,146 FPA Capital Fund 456,648
16,313 Mutual-Discovery Fund (Class Z) 296,574
TOTAL AGGRESSIVE GROWTH FUNDS 1,147,428
GROWTH FUNDS -- (15.8%)
8,570 Clipper Fund 597,985
33,119 Davis New York Venture
Fund (Class A) 590,844
14,910 Guardian Park Avenue Fund, Inc. 570,908
TOTAL GROWTH FUNDS 1,759,737
GROWTH & INCOME FUNDS -- (16.2%)
39,720 Fundamental Investors, Inc. 981,090
36,400 T. Rowe Price Equity Income Fund 825,199
TOTAL GROWTH AND INCOME FUNDS 1,806,289
FIXED INCOME FUNDS -- (53.6%)
166,993 Bond Fund of America, Inc. 2,257,745
289,336 PIMCO Total Return Fund 2,971,485
76,974 Vanguard Admiral Funds, Inc. --
Long - Term U.S. Treasury
Portfolio 753,574
TOTAL FIXED INCOME FUNDS 5,982,804
SHORT-TERM INVESTMENT -- (4.3%)
487,280 SEI Daily Income: Prime
Obligation 487,280
TOTAL INVESTMENTS AT MARKET VALUE
(COST $10,783,311) (E) 11,183,538
LIABILITIES NET OF OTHER ASSETS (22,710)
NET ASSETS (100.0%) $ 11,160,828
</TABLE>
Graphic representation `A17'' omitted. See Appendix.
(See Notes which are an integral part of the Financial Statements)
FUNDMANAGER PORTFOLIOS
SCHEDULE OF INVESTMENTS
MARCH 31, 1997 (UNAUDITED)
(a) Aggregate cost for federal income tax purposes is $36,453,213. The gross
unrealized appreciation is $2,478,777; the gross unrealized depreciation is
$791,744, resulting in net unrealized appreciation of $1,687,033 for
federal income tax purposes.
(b) Aggregate cost for federal income tax purposes is $28,929,271. The gross
unrealized appreciation is $1,053,704; the gross unrealized depreciation is
$485,900, resulting in net unrealized appreciation of $567,804 for federal
income tax purposes.
(c) Aggregate cost for federal income tax purposes is $28,382,796. The gross
unrealized appreciation is $3,377,562; the gross unrealized depreciation is
$262,358, resulting in net unrealized appreciation of $3,115,204 for
federal income tax purposes.
(d) Aggregate cost for federal income tax purposes is $66,972,613. The gross
unrealized appreciation is $0; the gross unrealized depreciation is
$831,318, resulting in net unrealized depreciation of $831,318 for federal
income tax purposes.
(e) Aggregate cost for federal income tax purposes is $10,783,311. The gross
unrealized appreciation is $490,776 ; the gross unrealized depreciation is
$90,549, resulting in net unrealized appreciation of $400,227 for federal
income tax purposes.
(See Notes which are an integral part of the Financial Statements)
FUNDMANAGER PORTFOLIOS
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH WITH MANAGED
GROWTH GROWTH INCOME BOND TOTAL RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
Assets:
Investments, at value* $38,140,246 $29,497,075 $31,498,000 $66,141,295 $11,183,538
Cash -- 24,556 30,078 -- --
Receivable for fund shares sold 4,900 -- 1,200 28,400 --
Dividend receivable 572 101,173 23,291 199,759 36,032
Total assets 38,145,718 29,622,804 31,552,569 66,369,454 11,219,570
Liabilities:
Payable for fund shares redeemed 253,282 7,500 8,300 -- --
Distribution expense payable 28,173 32,841 36,066 80,716 17,616
Administrative fee payable 20,636 14,967 16,427 35,432 6,090
Custodian fee payable -- 1,006 1,059 2,225 381
Payable for investments purchased -- 11,073 15,609 -- --
Accrued Expenses 4,700 26,479 48,599 91,068 34,655
Total liabilities 306,791 93,866 126,060 209,441 58,742
Net Assets $37,838,927 $29,528,938 $31,426,509 $66,160,013 $11,160,828
Financial Adviser Class:
Shares Outstanding 2,482,651 1,984,487 1,957,983 6,450,711 1,037,547
Net Assets $36,222,078 $28,405,324 $30,678,185 $63,880,250 $11,160,828
Net Asset Value $14.59 $14.31 $15.67 $9.90 $10.76
No-Load Class:
Shares Outstanding 110,378 78,463 48,304 228,828 --
Net Assets $ 1,616,849 $ 1,123,614 $ 748,324 $ 2,279,763 --
Net Asset Value $14.65 $14.32 $15.49 $9.96 --
Net Assets consist of:
Paid in capital $34,598,787 $23,657,787 $23,652,620 $70,028,315 $10,197,451
Undistributed net investment income
(Distribution in excess of net investment
income) (104,997) (67,527) 270,056 456,651 (23,852)
Accumulated realized gain (loss) 1,658,104 5,370,874 4,388,629 (3,493,635) 587,002
Net unrealized appreciation (depreciation) 1,687,033 567,804 3,115,204 (831,318) 400,227
Net Assets $37,838,927 $29,528,938 $31,426,509 $66,160,013 $11,160,828
*Investments, at cost $36,453,213 $28,929,271 $28,382,796 $66,972,613 $10,783,311
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FUNDMANAGER PORTFOLIOS
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH WITH MANAGED
GROWTH GROWTH INCOME BOND TOTAL RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
Income:
Total dividend investment income 258,327 480,373 805,664 2,240,691 289,860
Expenses:
Advisory fees 102,716 73,620 81,903 177,377 30,512
Distribution and shareholder
service expenses 98,146 70,592 79,657 170,567 30,691
Administration fees 32,418 16,852 25,834 48,757 3,890
Transfer agent 21,258 26,100 21,213 22,148 18,468
Fund Accounting 20,000 20,000 20,000 20,000 20,000
Custodian fees and expenses 12,201 11,241 11,601 18,077 5,921
Registration fees 8,232 8,120 9,788 13,887 6,879
Audit 6,556 6,556 6,556 6,556 6,556
Legal 2,685 3,263 3,739 7,328 2,080
Printing & Postage 2,598 2,385 3,913 6,329 2,491
Trustee fees 1,740 1,740 1,740 1,740 1,740
Insurance expense 1,171 842 1,084 2,349 418
Miscellaneous -- 2,761 5,827 5,000 --
Total expenses 309,721 244,072 272,855 500,115 129,646
Waiver of administrative fees (7,306) (5,132) (5,830) (12,729) (2,186)
Net expenses 302,415 238,940 267,025 487,386 127,460
Net investment income (operating loss) (44,088) 241,433 538,639 1,753,305 162,400
Realized and Unrealized Gain (Loss):
Net realized gain (loss) on investments (84,019) 3,671,785 2,910,529 (109,553) 437,857
Net realized gains received from
underlying funds 1,559,912 1,509,346 1,362,723 159,651 224,485
Net change in unrealized appreciation
(depreciation) (2,067,736) (2,825,105) (1,963,253) (554,368) (341,760)
Net realized and unrealized gain (loss) (591,843) 2,356,026 2,309,999 (504,270) 320,582
Net increase (decrease) in net assets
resulting from operations $ (635,931) $ 2,597,459 $ 2,848,638 $1,249,035 $482,982
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FUNDMANAGER PORTFOLIOS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH GROWTH PORTFOLIO
PORTFOLIO
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
MARCH 31, SEPTEMBER MARCH 31, SEPTEMBER
1997 30, 1997 30,
INCREASE (UNAUDITED) 1996 (UNAUDITED) 1996
(DECREASE) IN
NET ASSETS
FROM:
<S> <C> <C> <C> <C>
Operations
Net investment $ (44,088) $ 266,908 $ 241,433 $ 10,760
income (loss)
Net realized 1,475,893 5,623,017 5,181,131 3,731,601
gain (loss) on
investments and
underlying funds
Change in
unrealized
appreciation
(depreciation) (2,067,736) (1,522,338) (2,825,105) (308,815)
Net increase
(decrease) in
net assets
resulting from
operations (635,931) 4,367,587 2,597,459 3,433,546
Financial Adviser
Class
Dividends and
distributions from:
Net investment
income (147,770) (824,279) (423,688) (411,153)
Net realized
gains (4,353,532) (5,432,040) (3,071,993) (4,398,651)
Total (4,501,302) (6,256,319) (3,495,681) (4,809,804)
distributions
Capital share
transactions:
Proceeds from 3,375,186 11,562,398 3,442,821 7,261,283
sales of shares
Reinvestment of 4,314,223 4,687,699 3,172,605 3,125,091
dividends
Payments for (5,305,263) (9,013,894) (3,862,850) (8,351,421)
shares redeemed
Total from share
transactions 2,384,146 7,236,203 2,752,576 2,034,953
No-Load Class
Dividends and
distributions from:
Net investment (14,095) (2,446) (21,343) (11,296)
income
Net realized (176,417) (15,496) (115,834) (12,543)
gains
Total (190,512) (17,942) (137,177) (23,839)
distributions
Capital share
transactions:
Proceeds from 495,879 1,440,407 342,620 900,243
sales of shares
Reinvestment of 1,639 17,942 999 12,806
dividends
Payments for (91,432) (79,100) (48,690) (53,014)
shares redeemed
Total from 406,086 1,379,249 294,929 860,035
share
transactions
Total Increase (2,537,513) 6,708,778 2,012,106 1,494,891
(Decrease) in
Net Assets
Net Assets:
Beginning of 40,376,440 33,667,662 27,516,832 26,021,941
year
End of year $37,838,927 $40,376,440 $29,528,938 $27,516,832
Undistributed $ -- $ 100,956 $ -- $ 136,071
Net Investment
Income
Shares Outstanding:
Financial Adviser
Class
Beginning of 2,318,177 1,838,433 1,776,631 1,612,567
period
Shares sold 209,628 717,174 234,029 504,686
Reinvestment of 285,899 310,280 226,308 227,151
dividends
Shares redeemed (331,053) (547,710) (252,481) (567,773)
End of period 2,482,651 2,318,177 1,984,487 1,776,631
No-Load Class
Beginning of 84,732 -- 58,324 --
period
Shares sold 31,239 88,427 23,278 61,018
Reinvestment of 106 1,186 72 933
dividends
Shares redeemed (5,699) (4,881) (3,211) (3,627)
End of period 110,378 84,732 78,463 58,324
<CAPTION>
GROWTH WITH INCOME BOND PORTFOLIO MANAGED TOTAL RETURN
PORTFOLIO PORTFOLIO
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
MARCH 31, SEPTEMBER MARCH 31, SEPTEMBER MARCH 31, SEPTEMBER
1997 30, 1997 30, 1997 30,
INCREASE (UNAUDITED) 1996 (UNAUDITED) 1996 (UNAUDITED) 1996
(DECREASE) IN
NET ASSETS
FROM:
<S> <C> <C> <C> <C> <C> <C>
Operations
Net investment $ 538,639 $ 1,188,854 $ 1,753,305 $ 3,811,768 $ 162,400 $ 494,711
income (loss)
Net realized 4,273,252 4,021,879 50,098 (282,297) 662,342 948,274
gain (loss) on
investments and
underlying
funds
Change in (1,963,253) (745,572) (554,368) (544,860) (341,760) (468,365)
unrealized
appreciation
(depreciation)
Net increase 2,848,638 4,465,161 1,249,035 2,984,611 482,982 974,620
(decrease) in
net assets
resulting from
operations
Financial Adviser
Class
Dividends and
distributions from:
Net investment (306,880) (1,768,401) (1,847,110) (4,260,538) (285,549) (614,026)
income
Net realized (4,033,649) (5,595,638) -- -- (889,269) (636,120)
gains
Total (4,340,529) (7,364,039) (1,847,110) (4,260,538) (1,174,818) (1,250,146)
distributions
Capital share
transactions:
Proceeds from 1,742,530 4,712,857 25,043,620 6,954,937 482,755 1,069,066
sales of shares
Reinvestment of 3,886,662 4,533,318 834,154 2,428,436 1,148,428 1,225,106
dividends
Payments for (4,969,819) (10,388,950) (31,528,770) (15,321,843) (1,901,072) (4,645,420)
shares redeemed
Total from 659,373 (1,142,775) (5,650,996) (5,938,470) (269,889) (2,351,248)
share
transactions
No-Load Class
Dividends and
distributions from:
Net investment (16,314) (15,005) (58,358) (42,793) -- --
income
Net realized
gains (93,715) (22,147) -- -- -- --
Total (110,029) (37,152) (58,358) (42,793) -- --
distributions
Capital share
transactions:
Proceeds from 234,612 691,373 439,895 2,095,355 -- --
sales of shares
Reinvestment of
dividends 3,177 29,943 475 11,328 -- --
Payments for
shares
redeemed (61,497) (93,171) (127,149) (113,888) -- --
Total from
share
transactions 176,292 628,145 313,221 1,992,795 -- --
Total Increase (766,255) (3,450,660) (5,994,208) (5,264,395) (961,725) (2,626,774)
(Decrease) in
Net Assets
Net Assets:
Beginning of 32,192,764 35,643,424 72,154,221 77,418,616 12,122,553 14,749,327
year
End of year $31,426,509 $32,192,764 $ 66,160,013 $72,154,221 $11,160,828 $12,122,553
Undistributed $ 270,056 $ 54,611 $ 456,651 $ 608,814 $ -- $ 99,297
Net Investment
Income
Shares Outstanding:
Financial Adviser
Class
Beginning of 1,891,259 1,949,419 7,015,708 7,583,952 1,058,564 1,266,151
period
Shares sold 106,480 287,591 2,459,640 689,245 42,083 94,665
Reinvestment of 253,203 280,600 82,678 239,118 106,303 108,144
dividends
Shares redeemed (292,959) (626,351) (3,107,315) (1,496,607) (169,403) (410,396)
End of period 1,957,983 1,891,259 6,450,711 7,015,708 1,037,547 1,058,564
No-Load Class
Beginning of 37,188 -- 198,015 -- -- --
period
Shares sold 14,657 41,141 43,287 208,277 -- --
Reinvestment of 210 1,855 47 1,103 -- --
dividends
Shares redeemed (3,751) (5,808) (12,521) (11,365) -- --
End of period 48,304 37,188 228,828 198,015 -- --
</TABLE>
(See Notes which are an integral part of the Financial Statements)
AGGRESSIVE GROWTH PORTFOLIO: FINANCIAL ADVISER CLASS
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MARCH 31,
1997 YEAR ENDED SEPTEMBER 30,
(UNAUDITED) 1996 1995(A) 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
NET ASSET $16.80 $18.31 $15.57 $16.70 $14.71 $14.73
VALUE,
BEGINNING OF
PERIOD
INCOME FROM
INVESTMENT
OPERATIONS
Net investment
income (operating
loss) (0.02) 0.12(b) (0.13) (0.08) (0.04) (0.04)
Net realized
and unrealized
gain (loss)
on investments (0.20) 1.64 3.70 0.62 2.87 0.99
Total from
investment
operations (0.22) 1.76 3.57 0.54 2.83 0.95
LESS DISTRIBUTIONS
Distributions
from net
investment
income (0.07) (0.38) -- -- -- --
Distributions
from net
realized gain
on investments+ (1.92) (2.89) (0.83) (1.67) (0.84) (0.97)
Total (1.99) (3.27) (0.83) (1.67) (0.84) (0.97)
distributions
NET ASSET $14.59 $16.80 $18.31 $15.57 $16.70 $14.71
VALUE, END OF
PERIOD
TOTAL RETURN(C) (1.76)% 12.10% 24.30% 3.30% 19.90% 6.30%
RATIOS/SUPPLEMENTAL
DATA
Net assets,
end of period
(in 000's) $36,222 $38,944 $33,668 $37,766 $31,201 $29,096
Ratio of 1.49%* 1.67% 1.65% 1.70% 1.52% 1.61%
expenses to
average net assets
Ratio of net
investment
income to
average
net assets (0.24)%* 0.74% (0.68%) (0.57%) (0.24%) (0.17%)
Ratio of
expense
waivers to
average
net assets(d) 0.04%* 0.06% -- -- -- --
Portfolio 25% 158% 50% 43% 35% 24%
turnover
+Paid from
realized net
short-term gain $0.28 $0.27 $0.04 $0.25 -- $0.03
</TABLE>
* Computed on an annualized basis.
(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 imposed 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)
AGGRESSIVE GROWTH PORTFOLIO: NO-LOAD CLASS
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
MARCH 31, ENDED
1997 SEPTEMBER 30,
(UNAUDITED) 1996
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $16.91 $18.31
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.02 0.04(a)
Net realized and unrealized gain (loss) on
investments (0.21) 1.83
Total from investment operations (0.19) 1.87
LESS DISTRIBUTIONS
Distributions from net investment income (0.15) (0.38)
Distributions from net realized gain on
investments+ (1.92) (2.89)
Total distributions (2.07) (3.27)
NET ASSET VALUE, END OF PERIOD $14.65 $16.91
TOTAL RETURN(B) (1.52)% 12.77%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $1,617 $1,432
Ratio of expenses to average net assets 0.99%* 1.15%
Ratio of net investment income to average net
assets 0.26%* 0.24%
Ratio of expense waivers to average net
assets(c) 0.04%* 0.06%
Portfolio turnover 25% 158%
+Paid from realized net short-term gain $0.28 $0.27
</TABLE>
* Computed on an annualized basis.
(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)
GROWTH PORTFOLIO: FINANCIAL ADVISER CLASS
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MARCH 31,
1997 YEAR ENDED
SEPTEMBER 30,
(UNAUDITED) 1996 1995(A) 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
NET ASSET
VALUE,
BEGINNING OF
PERIOD $14.99 $16.14 $14.09 $14.62 $14.40 $13.96
INCOME FROM INVESTMENT OPERATIONS
Net investment
income (operating loss) 0.14 0.01(b) (0.02) (0.05) 0.02 0.07
Net realized
and unrealized gain
on investments 1.26 1.85 2.99 0.69 2.10 1.23
Total from
investment operations 1.40 1.86 2.97 0.64 2.12 1.30
LESS DISTRIBUTIONS
Distributions
from net investment
income 0.25) (0.24) -- -- -- (0.09)
Distributions
from net realized gain
on investments+ (1.83) (2.77) (0.92) (1.17) (1.90) (0.77)
Total distributions (2.08) (3.01) (0.92) (1.17) (1.90) (0.86)
NET ASSET $14.31 $14.99 $16.14 $14.09 $14.62 $14.40
VALUE, END OF PERIOD
TOTAL RETURN(C) 9.68% 13.46% 22.60% 4.50% 16.00% 9.40%
RATIOS/SUPPLEMENTAL DATA
Net assets,
end of period (in 000's) $28,405 $26,639 $26,022 $34,205 $21,919 $21,420
Ratio of
expenses to
average
net assets 1.65%* 1.81% 1.71% 1.71% 1.70% 1.60%
Ratio of net
investment income
to average net 1.63%* 0.05% (0.11%) (0.52%) 0.15% 0.59%
assets
Ratio of expense
waivers to average net
assets(d) 0.04%* 0.06% -- -- -- --
Portfolio
turnover 75% 93% 68% 44% 40% 44%
+Paid from
realized net short-term
gain $0.12 $0.48 $0.10 $0.22 $0.16 $0.03
</TABLE>
* Computed on an annualized basis.
(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 sale charge payable
on purchases of shares. Effective May 8, 1995, the Portfolio no longer
imposed 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)
GROWTH PORTFOLIO: NO-LOAD CLASS
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
MARCH 31, ENDED
1997 SEPTEMBER 30,
(UNAUDITED) 1996
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $15.04 $16.14
INCOME FROM INVESTMENT OPERATIONS
Net investment income (operating loss) 0.16 (0.06)(a)
Net realized and unrealized gain (loss) on
investments1. 29 2.02
Total from investment operations 1.45 1.96
LESS DISTRIBUTIONS AND DISTRIBUTIONS
Distributions from net investment income (0.34) (0.29)
Distributions from net realized gain on
investments+ (1.83) (2.77)
Total distributions (2.17) (3.06)
NET ASSET VALUE, END OF PERIOD $14.32 $15.04
TOTAL RETURN(B) 9.98% 14.21%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $1,124 $877
Ratio of expenses to average net assets 1.15%* 1.30%
Ratio of net investment income to average net
assets 2.13%* (0.39)%
Ratio of expense waivers to average net
assets(c) 0.04%* 0.06%
Portfolio turnover 75% 98%
+Paid from realized net short-term gain $0.12 --
</TABLE>
* Computed on an annualized basis.
(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)
GROWTH WITH INCOME PORTFOLIO: FINANCIAL ADVISER CLASS
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MARCH 31,
1997 YEAR ENDED
SEPTEMBER 30,
(UNAUDITED) 1996 1995(A) 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $16.69 $18.28 $15.99 $16.50 $15.11 $14.39
INCOME FROM INVESTMENT OPERATIONS
Net investment
income 0.28(b) 0.60(b) 0.27 0.35 0.28 0.31
Net realized
and unrealized
gain
on investments 1.21 1.60 3.19 0.18 1.97 1.07
Total from
investment
operations 1.49 2.20 3.46 0.53 2.25 1.38
LESS DISTRIBUTIONS
Distributions
from net investment
income (0.18) (0.86) (0.33) (0.30) (0.33) (0.29)
Distributions
from net
realized gain
on investments+ (2.33) (2.93) (0.84) (0.74) (0.53) (0.37)
Total
distributions (2.51) (3.79) (1.17) (1.04) (0.86) (0.66)
NET ASSET VALUE,
END OF PERIOD $15.67 $16.69 $18.28 $15.99 $16.50 $15.11
TOTAL RETURN(C) 9.20% 13.73% 23.30% 3.30% 15.50% 9.80%
RATIOS/SUPPLEMENTAL DATA
Net assets, end
of period (in
000's) $30,678 $31,571 $35,643 $52,595 $40,269 $36,603
Ratio of
expenses to
average net
assets 1.65%* 1.77% 1.59% 1.55% 1.49% 1.50%
Ratio of net
investment
income to
average net
assets 3.30%* 3.57% 1.72% 1.88% 1.77% 2.10%
Ratio of
expense waivers
to average
net assets(d) 0.04%* 0.06% -- -- -- --
Portfolio
turnover 36% 85% 12% 35% 24% 26%
+Paid from
realized net
short-term gain -- $0.06 -- $0.14 $0.09 --
</TABLE>
* Computed on an annualized basis.
(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 imposed 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)
GROWTH WITH INCOME PORTFOLIO: NO-LOAD CLASS
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
MARCH 31, ENDED
1997 SEPTEMBER 30,
(UNAUDITED) 1996
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $16.71 $18.28
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.30(a) 0.39(a)
Net realized and unrealized gain on 1.22 1.86
investments
Total from investment operations 1.52 2.25
LESS DISTRIBUTIONS
Distributions from net investment income (0.41) (0.89)
Distributions from net realized gain on (2.33) (2.93)
investments+
Total distributions (2.74) (3.82)
NET ASSET VALUE, END OF PERIOD $15.49 $16.71
TOTAL RETURN(B) 9.40% 14.06%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $748 $621
Ratio of expenses to average net assets 1.15%* 1.28%
Ratio of net investment income to average net 3.59%* 2.42%
assets
Ratio of expense waivers to average net 0.04%* 0.06%
assets(c)
Portfolio turnover 36% 85%
+Paid from realized net short-term gain -- $0.06
</TABLE>
* Computed on an annualized basis.
(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)
BOND PORTFOLIO : FINANCIAL ADVISER CLASS
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MARCH 31,
1997 YEAR ENDED
SEPTEMBER 30,
(UNAUDITED) 1996 1995(A) 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $10.00 $10.21 $ 9.66 $10.67 $10.28 $9.75
INCOME FROM INVESTMENT OPERATIONS
Net investment
income 0.25 0.52(b) 0.52 0.48 0.60 0.64
Net realized
and unrealized
gain (loss)
on investments (0.08) (0.14) 0.49 (0.84) 0.43 0.49
Total from
investment
operations 0.17 0.38 1.01 (0.36) 1.03 1.13
LESS DISTRIBUTIONS
Distributions
from net
investment
income (0.27) (0.59) (0.46) (0.53) (0.54) (0.60)
Distributions
from net
realized gain
on investments -- -- -- (0.12) (0.10) --
Total
distributions (0.27) (0.59) (0.46) (0.65) (0.64) (0.60)
NET ASSET VALUE,
END OF PERIOD $ 9.90 $10.00 $10.21 $ 9.66 $10.67 $10.28
TOTAL RETURN(C) 1.68% 3.78% 10.80% (3.60)% 10.40% 12.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end
of period (in
000's) $63,880 $70,166 $77,419 $76,769 $54,057 $70,066
Ratio of
expenses to
average net
assets 1.40%* 1.47% 1.45% 1.43% 1.29% 1.28%
Ratio of net
investment
income to
average net
assets 4.95%* 5.19% 5.38% 4.67% 5.70% 6.42%
Ratio of
expense waivers
to
average net
assets(d) 0.04%* 0.05% -- -- -- --
Portfolio
turnover 80% 93% 53% 41% 53% 21%
</TABLE>
* Computed on an annualized basis.
(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 sale charge payable
on purchases of shares. Effective May 8, 1995, the Portfolio no longer
imposed 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)
BOND PORTFOLIO: NO-LOAD CLASS
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
MARCH 31, ENDED
1997 SEPTEMBER 30,
(UNAUDITED) 1996
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.04 $10.21
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.27 0.55(a)
Net realized and unrealized (loss) on
investments (0.08) (0.16)
Total from investment operations 0.19 0.39
LESS DISTRIBUTIONS
Distributions from net investment income (0.27) (0.56)
Distributions from net realized gain on
investments -- --
Total distributions (0.27) (0.56)
NET ASSET VALUE, END OF PERIOD $ 9.96 $10.04
TOTAL RETURN(B) 1.92% 3.88%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $2,280 $1,988
Ratio of expenses to average net assets 0.90%* 0.99%
Ratio of net investment income to average net
assets 5.43%* 5.57%
Ratio of expense waivers to average net assets(c) 0.04%* 0.05%
Portfolio turnover 80% 93%
</TABLE>
* Computed on an annualized basis.
(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)
MANAGED TOTAL RETURN PORTFOLIO
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT THE:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MARCH 31,
1997 YEAR ENDED
SEPTEMBER 30,
(UNAUDITED) 1996 1995(A) 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD $11.45 $11.65 $11.24 $12.03 $11.48 $11.07
INCOME FROM
INVESTMENT OPERATIONS
Net investment
income 0.15 0.42(b) 0.28 0.18 0.29 0.34
Net realized
and unrealized
gain (loss)
on investments 0.28 0.40 1.18 (0.16) 0.90 0.57
Total from
investment
operations 0.43 0.82 1.46 0.02 1.19 0.91
LESS DIVIDENDS AND
DISTRIBUTIONS
Distributions
from net
investment
income (0.27) (0.50) (0.30) (0.31) (0.26) (0.41)
Distributions
from net
realized gain
on investments+ (0.85) (0.52) (0.75) (0.50) (0.38) (0.09)
Total
distributions (1.12) (1.02) (1.05) (0.81) (0.64) (0.50)
NET ASSET VALUE,
END OF PERIOD $10.76 $11.45 $11.65 $11.24 $12.03 $11.48
TOTAL RETURN(C) 3.82% 7.58% 14.30% 0.10% 10.80% 8.40%
RATIOS/SUPPLEMENTAL
DATA
Net assets, end
of period (in
000's) $11,161 $12,123 $14,749 $17,515 $25,519 $20,894
Ratio of
expenses to
average net
assets 2.06%* 2.21% 2.09% 1.94% 1.80% 1.90%
Ratio of net
investment
income to
average net
assets 2.68%* 3.68% 2.29% 1.60% 2.54% 3.09%
Ratio of
expense waivers
to
average net
assets(d) 0.04* 0.06% -- -- -- 0.11%
Portfolio
turnover 31% 159% 50% 50% 40% 37%
+Paid from
realized net
short-term gain -- $0.01 -- $0.13 $0.08 $0.02
</TABLE>
* Computed on an annualized basis.
(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 sale charge payable
on purchases of shares. Effective May 8, 1995, the Portfolio no longer
imposed 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)
FUNDMANAGER PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997 (UNAUDITED)
1. DESCRIPTION AND SHARES OF THE PORTFOLIOS. FundManager Portfolios,
formerly, FundManager Trust, (the "Trust") consists of a series of five
separately managed portfolios (collectively, the "Portfolios"), each with
distinct investments objectives. Following is the investment objective for
each 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 with Income Portfolio, formerly, the Growth & Income
Portfolio, (combination of capital appreciation and current income), Bond
Portfolio, (high level of current income), and Managed Total Return
Portfolio (high total return, through 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 has retained M.D. Hirsch Division of Freedom Capital Management
Corporation ("Freedom") as Investment Adviser (the "Adviser").
2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the
Trust's significant accounting policies:
(A) Security Valuation. Shares 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 (the "Trustees").
(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 Portfolios bear all costs of their operations
other than expenses specifically assumed by the Portfolios' 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 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 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) 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 on wash
sales, post October 31 losses, and short-term capital gain distributions
received by the Portfolios from other open-end investment companies.
(F) 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
Trustees, which has overall responsibility for the business affairs of the
Trust, periodic reports on the investment performance of the Portfolios. 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 average daily net
assets in excess of $500 million.
(B) Administration. Effective November 11, 1996, Signature Broker-Dealer
Services, Inc. ("Signature") resigned as the Trust's administrator and was
succeeded by Federated Administrative Services ("FAS"), a wholly-owned
subsidiary of Federated Investors. FAS provides administrative personnel and
services (including certain legal and financial reporting services)
necessary to operate the Portfolios. FAS provides these at an annual rate
which relates to the average aggregate daily net assets of the Portfolios as
specified below:
MAXIMUM
ADMINISTRATIVE AVERAGE AGGREGATE
FEE DAILY NET ASSETS
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$75,000 per Portfolio and $35,000 per each additional class of shares. FAS
may voluntarily choose to waive a portion of its fee or minimums from time
to time at its sole discretion.
(C) Distribution Fee and Shareholder Servicing Expenses. Effective November
11, 1996, Signature resigned as distributor of the Trust and Edgewood
Services, Inc., Freedom Distributors Corporation, Sutro & Co., Inc., and
Tucker Anthony Incorporated (the "Distributors") became co-distributors of
the Trust. 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.
(D) Transfer and Dividend Disbursing Agent Fees and Expenses. Effective
March 24, 1997, Federated Shareholder Services Company ("FSSC"), a
subsidiary of Federated Investors, replaced Investors Bank and Trust Company
("IBT") as transfer agent, dividend disbursing agent and shareholder
servicing agent for the Portfolios.
(E) 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 period ended March 31, 1997, were as follows:
PORTFOLIOS PURCHASES SALES
Aggressive Growth Portfolio $10,569,502 $ 9,776,136
Growth Portfolio $22,104,933 $21,099,441
Growth with Income Portfolio $11,352,288 $13,235,913
Bond Portfolio $54,956,691 $59,719,769
Managed Total Return Portfolio $ 3,537,586 $ 4,288,096
[Graphic]
INVESTMENT ADVISER
Freedom Capital Management Corporation
One Beacon Street
Boston, MA 02108
DISTRIBUTORS
Tucker Anthony, Incorporated
One World Financial Center
New York, NY 10281
Sutro & Co., Inc.
201 California Street
San Francisco, CA 94111
Freedom Distributors Corporation
One Beacon Street
Boston, MA 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
Portfolios. Its use in connection with any offering of the Portfolio's
shares is authorized only in case of a concurrent or prior delivery of the
Portfolio's current prospectus.
FOR SHAREHOLDER INFORMATION: (800) 344-9033
G01933-02 (5/97)
[Graphic]
MARCH 31, 1997
* AGGRESSIVE GROWTH PORTFOLIO
* GROWTH PORTFOLIO
* GROWTH WITH INCOME PORTFOLIO
* BOND PORTFOLIO
* MANAGED TOTAL RETURN PORTFOLIO
A1. The graphic representation here displayed consists of a pie chart
depicting the weighting of the FundManager Growth Portfolio. The pie chart
is divided into two portions as follows: 30.0% Value and 70.0% Growth.
A2. The graphic representation here displayed consists of a pie chart
depicting the weighting of the FundManager Growth Portfolio. The pie chart
is divided into two portions as follows: 30.0% Value and 70.0% Growth.
A3. The graphic representation here displayed consists of a pie chart
depicting the weighting of the FundManager Managed Total Return Portfolio.
The pie chart is divided into five portions as follows: 4.0% Cash, 10.0%
Aggressive Growth, 16.0% Growth, 16.0% Growth with Income and 54.0% Bond.
A4. The graphic representation here displayed consists of a line graph.
The corresponding components of the line graph are listed underneath. The
Financial Adviser Class of FundManager Aggressive Growth Portfolio is
represented by a solid line. The Russell 2000 Index (the `R2000'') is
represented by a dotted line and the Lipper Capital Appreciation Average
(the `LCAA'') is represented by a broken 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 of FundManager Aggressive Growth
Portfolio, the R2000 and the LCAA. The `x'' axis reflects computation
periods from 11/84 to 3/97. The `y'' axis reflects the cost of the
investment in $10,000 increments from $10,000 to $60,000. The right margin
reflects the ending value of the hypothetical investment in the Financial
Adviser Class of FundManager Aggressive Growth Portfolio as compared to the
R2000 and the LCAA. The ending values were $40,786, $41,524, and $50,266,
respectively.
A5. The graphic representation here displayed consists of a line graph.
The corresponding components of the line graph are listed underneath. The
No-Load Class of FundManager Aggressive Growth Portfolio is represented by
a solid line. The Russell 2000 Index (the `R2000'') is represented by a
dotted line and the Lipper Capital Appreciation Average (the `LCAA'') is
represented by a broken 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 of FundManager Aggressive Growth Portfolio, the R2000 and the
LCAA. The `x'' axis reflects computation periods from 10/95 to 3/97. The
`y'' axis reflects the cost of the investment in $500 increments from
$10,000 to $12,000. The right margin reflects the ending value of the
hypothetical investment in the No-Load Class of FundManager Aggressive
Growth Portfolio as compared to the R2000 and the LCAA. The ending values
were $11,099, $11,200, and $11,236, respectively.
A6. The graphic representation here displayed consists of a line graph.
The corresponding components of the line graph are listed underneath. The
Financial Adviser Class of FundManager Growth Portfolio is represented by a
solid line. The Standard & Poor's 500 Index (the `S&P 500'') is
represented by a dotted line and the Lipper Growth Average (the `LGA'') is
represented by a broken 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 of FundManager Growth Portfolio, the S&P 500 and
the LGA. The `x'' axis reflects computation periods from 11/84 to 3/97.
The `y'' axis reflects the cost of the investment in $10,000 increments
from $10,000 to $70,000. The right margin reflects the ending value of the
hypothetical investment in the Financial Adviser Class of FundManager
Growth Portfolio as compared to the S&P 500 and the LGA. The ending values
were $43,798, $67,336, and $56,751, respectively.
A7. The graphic representation here displayed consists of a line graph.
The corresponding components of the line graph are listed underneath. The
No-Load Class of FundManager Growth Portfolio is represented by a solid
line. The Standard & Poor's 500 Index (the `S&P 500'') is represented by
a dotted line and the Lipper Growth Average (the `LGA'') is represented by
a broken 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 of FundManager Growth Portfolio, the S&P 500 and the LGA. The `x''
axis reflects computation periods from 10/95 to 3/97. The `y'' axis
reflects the cost of the investment in $1,000 increments from $9,000 to
$14,000. The right margin reflects the ending value of the hypothetical
investment in the No-Load Class of FundManager Growth Portfolio as compared
to the S&P 500 and the LGA. The ending values were $12,560, $13,387, and
$11,994, respectively.
A8. The graphic representation here displayed consists of a line graph.
The corresponding components of the line graph are listed underneath. The
Financial Adviser Class of FundManager Growth with Income Portfolio is
represented by a solid line. The Standard & Poor's 500 Index (the `S&P
500') is represented by a dotted line, the Lehman Government Corporate
Total Index (the `LG/CI'') is represented by a dashed line and the Lipper
Growth and Income Average (the `LG&IA'') is represented by a broken 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
of FundManager Growth with Income Portfolio, the S&P 500, the LG/CI and the
LG&IA. The `x'' axis reflects computation periods from 11/84 to 3/97.
The `y'' axis reflects the cost of the investment in $10,000 increments
from $10,000 to $70,000. The right margin reflects the ending value of the
hypothetical investment in the Financial Adviser Class of FundManager
Growth with Portfolio as compared to the S&P 500, the LG/CI and the LG&IA.
The ending values were $42,208, $67,336, $32,084 and $56,185, respectively.
A9. The graphic representation here displayed consists of a line graph.
The corresponding components of the line graph are listed underneath. The
No-Load Class of FundManager Growth with Portfolio is represented by a
solid line. The Standard & Poor's 500 Index (the `S&P 500'') is
represented by a dotted line, the Lehman Government Corporate Total Index
(the `LG/CI'') is represented by a dashed line and the Lipper Growth and
Income Average (the `LG&IA'') is represented by a broken 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 of FundManager Growth
with Portfolio, the S&P 500, the LG/CI and the LG&IA. The `x'' axis
reflects computation periods from 10/95 to 3/97. The `y'' axis reflects
the cost of the investment in $1,000 increments from $10,000 to $14,000.
The right margin reflects the ending value of the hypothetical investment
in the No-Load Class of FundManager Growth with Portfolio as compared to
the S&P 500, the LG/CI and the LG&IA. The ending values were $12,526,
$13,387, $10,678 and $12,834, respectively.
A10. The graphic representation here displayed consists of a line graph.
The corresponding components of the line graph are listed underneath. The
Financial Adviser Class of FundManager Bond Portfolio is represented by a
solid line. The Lehman Government/Corporate Total Index (the `LG/CI'') is
represented by a dotted line and the Lipper General Bond Average (the
`LGBA'') is represented by a broken 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 of FundManager Bond Portfolio,
the LG/CI and the LGBA. The `x'' axis reflects computation periods from
11/84 to 3/97. The `y'' axis reflects the cost of the investment in
$10,000 increments from $10,000 to $40,000. The right margin reflects the
ending value of the hypothetical investment in the Financial Adviser Class
of FundManager Bond Portfolio as compared to the LG/CI and the LGBA. The
ending values were $23,980, $32,085, and $27,557, respectively.
A11. The graphic representation here displayed consists of a line graph.
The corresponding components of the line graph are listed underneath. The
No-Load Class of FundManager Bond Portfolio is represented by a solid line.
The Lehman Government/Corporate Total Index (the `LG/CI'') is represented
by a dotted line and the Lipper General Bond Average (the `LGBA'') is
represented by a broken 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 of FundManager Bond Portfolio, the LG/CI and the LGBA. The
`x'' axis reflects computation periods from 10/95 to 3/97. The ``y'' axis
reflects the cost of the investment in $500 increments from $9,500 to
$11,500. The right margin reflects the ending value of the hypothetical
investment in the No-Load Class of FundManager Bond Portfolio as compared
to the LG/CI and the LGBA. The ending values were $10,589, $10,678, and
$11,204, respectively.
A12. The graphic representation here displayed consists of a line graph.
The corresponding components of the line graph are listed underneath. The
Financial Adviser Class of FundManager Managed Total Return Portfolio is
represented by a solid line. The Lehman Government/Corporate Total Index
(the `LG/CI'') is represented by a dotted line and the Lipper General Bond
Average (the `LGBA'') is represented by a broken 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 of FundManager
Managed Total Return Portfolio, the LG/CI and the LGBA. The `x'' axis
reflects computation periods from 8/88 to 3/97. The `y'' axis reflects
the cost of the investment in $12,000 increments from $10,000 to $22,000.
The right margin reflects the ending value of the hypothetical investment
in the Financial Adviser Class of FundManager Managed Total Return
Portfolio as compared to the LG/CI and the LGBA. The ending values were
$20,596, $20,839, and $20,626, respectively.
A13. The graphic representation here displayed consists of a pie chart
depicting the weighting of the FundManager Aggressive Growth Portfolio.
The pie chart is divided into four portions as follows: (0.5%) Cash and
Liabilities Net of Other Assets, 19.6% Global, 32.3% Large Cap and 48.6%
Small Cap.
A14. The graphic representation here displayed consists of a pie chart
depicting the weighting of the FundManager Growth Portfolio. The pie chart
is divided into three portions as follows: 0.6% Cash and Liabilities Net
of Other Assets, 30.7% Value and 68.7% Growth.
A15. The graphic representation here displayed consists of a pie chart
depicting the weighting of the FundManager Growth with Income Portfolio.
The pie chart is divided into three portions as follows: 1.1% Cash and
Liabilities Net of Other Assets, 40.0% Equity Income and 58.9% Growth &
Income.
A16. The graphic representation here displayed consists of a pie chart
depicting the weighting of the FundManager Bond Portfolio. The pie chart
is divided into four portions as follows: 0.1% Cash and Assets Net of
Other Liabilities, 5.5% Long Maturity, 30.8% Long Maturity and 63.6%
Intermediate Maturity.
