TOMORROW FUNDS
RETIREMENT TRUST
SEMI-ANNUAL REPORT
JUNE 30, 1997
(UNAUDITED)
CORE LARGE-CAP STOCK FUND
CORE SMALL CAP STOCK FUND
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
TABLE OF CONTENTS
(Schedules of Investments)
Core Large-Cap Stock Fund ............................................. 2
Core Small-Cap Stock Fund ............................................. 5
Statements of Assets and Liabilities ...................................... 10
Statements of Operations .................................................. 11
Statements of Changes in Net Assets ....................................... 12
Notes to Financial Statements ............................................. 13
Financial Highlights ...................................................... 17
<PAGE>
<TABLE>
<CAPTION>
TOMORROW FUND RETIREMENT TRUST
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE LARGE-CAP STOCK FUND
<C> <S> <C>
COMMON STOCK (88.4%)
BASIC MATERIALS (6.3%)
185 Dow Chemical Co ................................ $16,118
235 Monsanto Co .................................... 10,120
360 Barrick Gold Corp .............................. 7,920
88 Phelps Dodge Corp .............................. 7,497
117 PPG Industries Inc ............................. 6,801
117 Great Lakes Chemical Corp ...................... 6,128
374 Placer Dome Inc ADR ............................ 6,124
105 W.R. Grace & Co ................................ 5,788
105 Crown Cork & Seal Inc .......................... 5,611
66 Reynolds Metals Co ............................. 4,702
144 Inco Ltd ....................................... 4,329
48 Rohm & Haas Co ................................. 4,323
110 James River Corp of Virginia ................... 4,070
194 Engelhard Corp ................................. 4,062
114 USX US Steel Group ............................. 3,997
99 Newmont Mining Corp ............................ 3,861
64 Nucor Corp ..................................... 3,616
94 Sigma Aldrich Corp ............................. 3,296
61 Temple Inland Inc .............................. 3,294
133 Cyprus Amax Minerals Co ........................ 3,258
80 Boise Cascade Corp ............................. 2,825
188 Homestake Mining Co ............................ 2,456
92 Inland Steel Industries Inc .................... 2,404
224 +Bethlehem Steel Corp ........................... 2,338
86 Allegheny Teledyne Inc ......................... 2,322
46 Union Camp Corp ................................ 2,300
51 Bemis Inc ...................................... 2,212
70 Westvaco Corp .................................. 2,201
25 FMC Corp ....................................... 1,986
103 Worthington Industries Inc ..................... 1,886
44 Avery Dennison Corp ............................ 1,765
37 BF Goodrich Co ................................. 1,603
100 Stone Container Corp ........................... 1,431
47 Ball Corp ...................................... 1,413
29 Aeroquip Vickers Inc ........................... 1,370
35 Nalco Chemical Co .............................. 1,352
231 Echo Bay Mines Ltd ............................. 1,328
159 +Armco Inc ...................................... 616
38 Unisource Worldwide Inc ........................ 608
-------
149,331
-------
CONSUMER CYCLICAL (12.0%)
1,150 Chrysler Corp .................................. 37,734
312 Eastman Kodak Co ............................... 23,946
212 Walt Disney Co ................................. 17,013
398 +Viacom Inc. Cl B .............................. 11,940
340 Mattel Inc ..................................... 11,518
237 May Department Stores Co ....................... 11,198
482 The Limited Inc ................................ 9,761
89 Gannet Inc ..................................... 8,789
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE LARGE-CAP STOCK FUND (continued)
225 Gap Inc ........................................ $ 8,747
156 Dayton Hudson Corp ............................. 8,297
170 Masco Corp ..................................... 7,097
110 Fluor Corp ..................................... 6,071
96 Tandy Corp ..................................... 5,376
106 New York Times Co Cl A ......................... 5,247
136 Dillards Department Stores - Cl A .............. 4,709
375 K Mart Stores .................................. 4,594
135 Genuine Parts Co ............................... 4,573
109 Dow Jones & Co Inc ............................. 4,380
113 Black & Decker Corp ............................ 4,202
70 McGraw-Hill Companies Inc ...................... 4,117
79 Rite Aid Corp .................................. 3,940
81 Harcourt General ............................... 3,858
67 Polaroid Corp .................................. 3,718
42 VF Corp ........................................ 3,559
135 Maytag Corp .................................... 3,527
67 CVS Corp ....................................... 3,434
94 Echlin Inc ..................................... 3,384
69 Clairborne (Liz) Inc ........................... 3,217
122 Wendy's International .......................... 3,164
71 Owens Corning .................................. 3,062
139 Cooper Tire & Rubber ........................... 3,058
65 Reebok International Ltd ....................... 3,039
61 Knight- Ridder Inc ............................. 2,993
62 Tribune Co ..................................... 2,980
40 Armstrong World Industries Inc ................. 2,935
77 American Greetings-Cl A ........................ 2,859
80 Circuit City Stores ............................ 2,845
94 Hasbro Inc ..................................... 2,667
86 Sherwin-Williams Co ............................ 2,655
106 +Woolworth Corp ................................. 2,544
37 Mercantile Stores .............................. 2,329
102 Viad Corp ...................................... 1,964
70 TJX Companies Inc .............................. 1,846
50 King World Productions Inc ..................... 1,750
98 Navistar International Corp .................... 1,691
52 +Fruit of The Loom Inc .......................... 1,612
60 Jostens Inc .................................... 1,605
80 Moore Corp Ltd ................................. 1,575
28 +Payless Shoesource Inc ......................... 1,531
34 Snap-On Inc .................................... 1,339
40 Russell Corp ................................... 1,185
20 Springs Industries, Inc ........................ 1,055
32 Meredith Corp .................................. 928
54 Stride Rite Corp ............................... 695
25 Hilton Hotels Corp ............................. 664
29 Luby's Cafeterias Inc .......................... 578
-------
285,094
-------
CONSUMER NON CYCLICAL (10.7%)
680 Coca Cola Co ................................... 47,430
See notes to financial statements Page 2
<PAGE>
TOMORROW FUND RETIREMENT TRUST
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE LARGE-CAP STOCK FUND (continued)
101 Unilever NV ADR ................................ $21,620
205 Kellogg Co ..................................... 17,553
309 Heinz H J Co ................................... 14,253
174 Colgate- Palmolive Co .......................... 11,354
483 Archer Daniels Midland Co ...................... 11,351
254 Anheuser- Busch Companies Inc .................. 10,652
165 Conagra Inc .................................... 10,581
118 Ralston Purina Co .............................. 9,698
102 CPC International Inc .......................... 9,416
258 Kroger Co ...................................... 7,482
109 General Mills Inc .............................. 7,099
158 Quaker Oats Co ................................. 7,090
82 Pioneer Hi Bred International .................. 6,560
234 UST Inc ........................................ 6,493
105 International Flavors &
Fragrances Inc ................................. 5,302
69 Avon Products Inc .............................. 4,869
96 American Stores Co ............................. 4,740
115 Winn Dixie Stores Inc .......................... 4,284
76 Hershey Foods Corp ............................. 4,204
100 Albertsons Inc ................................. 3,650
26 Clorox Co ...................................... 3,432
127 Whitman Corp ................................... 3,215
100 Waste Management Inc ........................... 3,212
87 Sysco Corp ..................................... 3,175
74 Giant Food Inc Cl A ............................ 2,414
60 Supervalu Inc .................................. 2,070
123 Dial Corp ...................................... 1,922
51 Tupperware Corp ................................ 1,861
36 Ecolab Inc ..................................... 1,719
29 Brown-Forman Corp Cl B ......................... 1,416
74 Fleming Companies Inc .......................... 1,332
43 Premark International Inc ...................... 1,150
32 Coors (Adolph) Co Cl B ......................... 852
28 Great Atlantic & Pacific Tea ................... 761
-------
254,212
-------
ENERGY (14.4%)
1,320 Exxon Corp ..................................... 81,180
1,108 Royal Dutch Petroleum Co ADR ................... 60,248
464 Mobil Corp ..................................... 32,422
292 Amoco Corp ..................................... 25,386
317 Chevron Corp ................................... 23,438
134 Schlumberger Ltd ............................... 16,750
137 Texaco Inc ..................................... 14,899
340 Phillips Petroleum Co .......................... 14,875
186 Atlantic Richfield Co. ......................... 13,113
431 Occidental Petroleum Corp ...................... 10,802
117 Halliburton Co. ................................ 9,272
153 Williams Companies Inc ......................... 6,694
107 Coastal Corp ................................... 5,691
127 Burlington Resources Inc ....................... 5,604
78 Amerada Hess Corp .............................. 4,334
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE LARGE-CAP STOCK FUND (continued)
105 Baker Hughes Inc ............................... $ 4,062
98 Sun Co Inc ..................................... 3,038
30 Kerr Mcgee Corp ................................ 1,901
83 +Oryx Energy Co ................................. 1,753
21 Pennzoil Co .................................... 1,612
28 Louisiana Land & Exploration Co ................ 1,600
33 Ashland Inc .................................... 1,530
38 +Rowan Companies ................................ 1,071
71 +Santa-Fe Energy Resources ...................... 1,043
-------
342,318
-------
FINANCIAL (8.5%)
200 American International Group Inc ............... 29,875
400 BankAmerica Corp ............................... 25,825
200 Citicorp ....................................... 24,112
300 Travelers Group Inc ............................ 18,919
300 Fannie Mae ..................................... 13,087
100 Chase Manhattan Corp ........................... 9,706
127 Lincoln National Corp Ltd ...................... 8,176
79 Loews Corp ..................................... 7,910
100 Allstate Corp .................................. 7,300
76 First Bank System Inc .......................... 6,489
99 U.S. Bancorp ................................... 6,348
148 UNUM Corp ...................................... 6,216
86 Marsh & McLennan Cos ........................... 6,138
64 St Paul Companies Inc .......................... 4,880
70 NationsBank Corp ............................... 4,515
44 Transamerica Corp .............................. 4,117
76 National City Corp ............................. 3,990
80 Safeco Corp .................................... 3,735
44 Jefferson- Pilot Corp .......................... 3,074
117 USF&G Corp ..................................... 2,808
25 Republic NY Corp ............................... 2,688
23 American General Corp .......................... 1,098
-------
201,006
-------
HEALTH (11.5%)
404 Lilly Eli & Co ................................. 44,162
486 Bristol-Myers Squibb Co ........................ 39,366
682 Schering-Plough Corp ........................... 32,651
316 American Home Products Corp .................... 24,174
543 Pharmacia & Upjohn Inc ......................... 18,869
140 Warner Lambert Co .............................. 17,395
257 Amgen Inc ...................................... 14,938
204 Corning Inc .................................... 11,347
100 Merck & Co Inc ................................. 10,350
148 +Boston Scientific Corp ......................... 9,093
262 Humana Inc ..................................... 6,059
188 +Tenet Healthcare Corp .......................... 5,558
153 Service Corp International ..................... 5,030
91 Becton Dickinson & Co .......................... 4,607
83 Bausch & Lomb Inc .............................. 3,911
Page 3 See notes to financial statements
<PAGE>
TOMORROW FUND RETIREMENT TRUST
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE LARGE-CAP STOCK FUND (continued)
96 St. Jude Medical Inc ........................... $ 3,744
169 Biomet Inc. .................................... 3,148
118 Pall Corp ...................................... 2,744
84 Allergan Inc ................................... 2,672
92 +ALZA Corp ...................................... 2,662
58 Millipore Corp ................................. 2,552
83 +Fresenius Medical Care ADR ..................... 2,417
63 Mallinckrodt Inc ............................... 2,394
43 United States Surgical Corp .................... 1,602
78 +Transitional Hospitals Corp .................... 1,238
51 +Covance Inc .................................... 985
-------
273,668
-------
INDUSTRIALS (6.8%)
222 Minnesota Mining & Manufacturing Co ............ 22,644
415 First Data Corp ................................ 18,234
248 Emerson Electric Co ............................ 13,656
505 Westinghouse Electric Corp ..................... 11,678
378 Dun & Bradstreet Corp .......................... 9,923
170 Dresser Industries Inc ......................... 6,333
94 Textron Inc .................................... 6,239
89 Tyco International Ltd ......................... 6,191
114 Cooper Industries Inc .......................... 5,671
91 Parker Hannifin Corp ........................... 5,523
83 Interpublic Group of Companies Inc ............. 5,089
98 Cognizant Corp ................................. 3,969
62 Dover Corp ..................................... 3,813
64 TRW Inc ........................................ 3,636
46 Cummins Engine Inc ............................. 3,246
71 Stanley Works .................................. 2,840
205 Laidlaw Inc Cl B ............................... 2,832
34 Raychem Corp ................................... 2,529
57 +Ceridian Corp .................................. 2,408
30 Grainger WW Inc ................................ 2,346
67 Deluxe Corp .................................... 2,286
55 Harnischfeger Industries Inc ................... 2,282
78 McDermott International Inc .................... 2,277
75 EG &G Inc ...................................... 1,687
40 Crane Co ....................................... 1,672
71 Ogden Corp ..................................... 1,544
35 General Signal Corp ............................ 1,527
57 Cincinnati Milacron Inc ........................ 1,478
28 National Services Industries Inc ............... 1,363
27 Briggs & Stratton Corp ......................... 1,350
25 Shared Medical Systems Corp .................... 1,350
23 Thomas & Betts Corp ............................ 1,209
70 Safety Kleen Corp .............................. 1,181
42 Giddings & Lewis Inc ........................... 877
-------
160,883
-------
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE LARGE-CAP STOCK FUND (continued)
TECHNOLOGY (12.8%)
450 +Microsoft Corp ................................ $56,869
300 Intel Corp ..................................... 42,544
314 International Business Machines Corp ........... 28,319
582 GTE Corp ....................................... 25,535
432 Boeing Co ...................................... 22,923
222 McDonnell Douglas Corp ......................... 15,207
200 +Cisco Systems Inc .............................. 13,425
326 US West Inc .................................... 12,286
204 Rockwell ....................................... 12,036
171 Sprint Corp .................................... 8,999
107 Honeywell Inc .................................. 8,119
89 Eaton Corp ..................................... 7,771
143 Raytheon Co .................................... 7,293
163 Alltel Corp .................................... 5,450
593 +Novell Inc ..................................... 4,114
79 International Paper Co ......................... 3,836
105 +Advanced Micro Devices Inc ..................... 3,780
42 Northrop Corp .................................. 3,688
90 Autodesk Inc ................................... 3,448
233 +Apple Computer Inc ............................. 3,320
36 General Dynamics ............................... 2,700
33 Perkin Elmer Corp .............................. 2,626
26 Harris Corp .................................... 2,184
76 Ikon Office Solutions Inc ...................... 1,895
100 +Loral Space & Communications ................... 1,500
190 +Unisys Corp .................................... 1,449
126 +Amdahl Corp .................................... 1,110
40 +Data General Corp .............................. 1,040
-------
303,466
-------
TRANSPORTATION (0.7%)
136 Federal Express Corp ........................... 7,854
123 Caliber Systems Inc ............................ 4,582
60 CNF Transportation Inc ......................... 1,935
43 US Airways Group Inc ........................... 1,505
------
15,876
------
UTILITIES (4.7%)
465 Southern Co .................................... 10,172
239 Enron Corp ..................................... 9,754
351 PG & E Corp .................................... 8,512
137 Duke Energy Corp ............................... 6,567
139 FPL Group Inc .................................. 6,403
226 Edison International ........................... 5,622
142 Dominion Resources Inc ......................... 5,201
117 American Electric Power Co ..................... 4,914
164 Entergy Corp ................................... 4,490
See notes to financial statements Page 4
<PAGE>
TOMORROW FUND RETIREMENT TRUST
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE LARGE-CAP STOCK FUND (continued)
117 Texas Utilities Co ............................. $ 4,029
185 Houston Industries ............................. 3,966
110 CINergy Corp ................................... 3,829
71 Sonat Inc ...................................... 3,639
101 Pacific Enterprises ............................ 3,396
153 Central & South West Corp ...................... 3,251
90 GPU Inc ........................................ 3,229
59 Consolidated National Gas Co ................... 3,175
46 Columbia Gas System Inc ........................ 3,001
76 Union Electric ................................. 2,864
111 Ohio Edison Co ................................. 2,421
120 PP & L Resources Inc ........................... 2,393
95 Public Service Entreprise ...................... 2,375
42 Northern States Power-Minnesota ................ 2,174
210 +Niagara Mohawk Power ........................... 1,798
67 Enserch Corp ................................... 1,491
82 Noram Energy Corp .............................. 1,250
26 Nicor Inc ...................................... 933
26 Oneok Inc ...................................... 837
-------
111,686
-------
TOTAL COMMON STOCKS
(Cost $1,752,713) ............................ 2,097,540
---------
UNIT INVESTMENT TRUSTS (4.6%)
(Cost $101,724)
1,250 Standard & Poor's Depositary Receipts .......... 110,391
---------
TOTAL INVESTMENTS (93.0%)
(Cost $1,854,437) ............................. 2,207,931
OTHER ASSETS IN EXCESS
OF LIABILITIES (7.0%) ....................... 166,155
---------
TOTAL NET ASSETS (100.0%) ...................... $2,374,086
==========
<FN>
+ Non-income producing security.
</FN>
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE SMALL-CAP STOCK FUND
<C> <S> <C>
COMMON STOCK (95.6%)
BASIC MATERIALS (5.3%)
509 +Getchell Gold Corp ............................. $17,879
1,407 +Amax Gold Inc .................................. 8,618
1,365 +Hecla Mining Co ................................ 7,337
157 Florida Rock Industries Inc .................... 6,378
112 Ameron International Inc ....................... 6,342
136 Carpenter Technology Corp ...................... 6,222
150 Cambrex Corp ................................... 5,944
205 Learonal Inc ................................... 5,842
188 Ashland Coal Inc ............................... 5,358
208 Mosinee Paper Corp ............................. 5,096
291 Quaker Chemical Corp ........................... 5,056
149 Liqui-Box Corp ................................. 5,029
319 Tuscarora Inc .................................. 4,984
393 Lawter International Inc ....................... 4,962
114 Cleveland Cliffs Inc ........................... 4,645
145 Dexter Corp .................................... 4,640
244 Wausau Paper Mills Co .......................... 4,605
119 Chemed Corp .................................... 4,455
302 Calgon Carbon Corp ............................. 4,190
318 +Coeur D'Alene Mines Corp ....................... 4,114
326 Sealright Co ................................... 3,912
100 Greif Brothers Corp Cl A ....................... 2,700
100 Stephan Chemical Co ............................ 2,462
-------
130,770
-------
CONSUMER CYCLICAL (11.4%)
955 +AMC Entertainment Inc .......................... 17,548
574 Meredith Corp .................................. 16,646
818 Falcon Products Inc ............................ 10,992
885 +Playboy Enterprises Inc Cl B ................... 10,233
1,430 +American Media Inc ............................. 10,010
1,591 +Shoney's Inc ................................... 9,447
1,197 Uno Restaurant Corp ............................ 8,454
1,371 Ekco Group Inc ................................. 7,969
702 +Nashua Corp .................................... 7,634
308 Osh Kosh B'Gosh Cl A ........................... 6,699
124 Pulitzer Publishing ............................ 6,572
195 K2 Inc ......................................... 6,179
207 McClatchy Newspapers Cl A ...................... 6,081
181 +Carmike Cinemas Inc. Cl A ...................... 5,928
262 Russ Berrie & Co Inc ........................... 5,748
202 Bassett Furniture Industries Inc. .............. 5,719
162 Carlisle Companies Inc ......................... 5,650
271 Guilford Mills Inc ............................. 5,640
179 Fab Industries Inc ............................. 5,605
284 Sturm Ruger & Co Inc ........................... 5,574
172 Starrett LS Co Cl A ............................ 5,482
425 Stride Rite Corp ............................... 5,472
Page 5 See notes to financial statements
<PAGE>
TOMORROW FUND RETIREMENT TRUST
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE SMALL-CAP STOCK FUND (CONTINUED)
227 International Dairy Queen Inc Cl A ............. $ 5,448
208 Longs Drug Stores .............................. 5,447
151 La- Z Boy Inc .................................. 5,436
417 Johnson Worldwilde Assoc Inc Cl A .............. 5,369
157 John Wiley & Sons .............................. 5,318
505 Crown Crafts Inc ............................... 5,303
210 Standard Products Co ........................... 5,303
127 National Presto Industries Inc ................. 5,120
149 +Avatar Holdings Inc ............................ 4,991
232 Apogee Enterprises Inc ......................... 4,988
127 Plenum Publishing Corp ......................... 4,889
164 +Lands End Inc .................................. 4,858
177 Unitog Co ...................................... 4,779
277 Donnelly Corp .................................. 4,640
227 Walbro Corp .................................... 4,597
359 A.T Cross Co Cl A .............................. 4,577
320 +Ladd Furniture Inc ............................. 4,400
493 +Lifetime Hoan Corp ............................. 4,314
216 Luby's Cafeterias Inc .......................... 4,307
175 Waverly Inc .................................... 3,762
156 Granite Construction Inc ....................... 3,081
530 +Topps Co ....................................... 2,219
75 Wynns International Inc ........................ 2,128
-------
280,556
-------
CONSUMER NON CYCLICAL (6.7%)
619 Interstate Bakeries Corp ....................... 36,714
1,218 Flowers Industries Inc ......................... 20,478
331 Delechamps Inc ................................. 10,592
565 Ruddick Corp ................................... 9,322
326 Rykoff-Sexton Inc .............................. 7,600
281 International Multifoods Corp .................. 7,060
241 Coors (Adolph) Inc Cl A ........................ 6,417
224 Church & Dwight Co ............................. 5,992
132 Tootsie Roll Industries ........................ 5,874
297 Genovese Drugs Stores .......................... 5,847
286 Arbor Drugs Inc ................................ 5,756
169 Stanhome Inc ................................... 5,556
253 Caseys General Stores Inc ...................... 5,447
244 Nash Finch Corp ................................ 5,399
278 Goodmark Foods Inc ............................. 5,212
361 Blair Corp ..................................... 5,189
205 Smart and Final Inc ............................ 5,023
473 Cash America International Inc ................. 4,967
277 Strawbridge & Clothier ......................... 4,501
349 WLR Foods Inc .................................. 2,836
-------
165,782
-------
ENERGY (2.7%)
843 Berry Petroleum Cl A ........................... 16,017
296 +Tuboscope Vetco International Corp ............. 5,883
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE SMALL-CAP STOCK FUND (CONTINUED)
100 Helmerich & Payne .............................. $ 5,763
265 Wiser Oil Co ................................... 4,886
293 Quaker St Corp ................................. 4,468
137 Apache Corp .................................... 4,452
143 Vintage Petroleum Inc .......................... 4,397
275 HS Resources Inc ............................... 3,884
152 Holly Corp ..................................... 3,771
200 +Pool Energy Services Co ........................ 3,625
105 +Barrett Resources Corp ......................... 3,143
212 Plains Resources Inc ........................... 3,127
290 Getty Petroleum Corp ........................... 1,450
140 Hondo Oil & Gas Co ............................. 989
------
65,855
------
FINANCE (21.4%)
632 Protective Life Corp ........................... 31,758
653 Provident Financial Group Inc .................. 27,916
570 Deposit Guaranty Corp .......................... 17,955
460 Keystone Financial Inc ......................... 14,375
350 American Federal Bank .......................... 11,288
556 Hilb, Rogal & Hamilton Co ...................... 9,452
354 F & M National Corp ............................ 9,204
270 Suffolk Bancorp ................................ 7,763
290 HCC Insurance Holdings Inc ..................... 7,739
319 State Auto Financial Corp ...................... 7,177
215 American Heritage Life Investors ............... 7,095
202 New York Bancorp Inc ........................... 7,019
168 National City Bancshares Inc ................... 6,972
175 Wesbanco Inc ................................... 6,934
139 Horace Mann Educator ........................... 6,811
177 Community First Bankshares ..................... 6,792
142 Forest City Enterprises Inc Cl A ............... 6,780
139 Banc One Corp .................................. 6,733
177 First Western Bancorp Inc ...................... 6,682
180 Poe & Brown Inc ................................ 6,660
155 United Bankshares Inc .......................... 6,549
163 Acordia Inc .................................... 6,520
166 Crestar Financial Corp ......................... 6,453
137 Fort Wayne National Corp ....................... 6,439
118 US Bancorp Inc-Pa .............................. 6,431
238 Fulton Financial Corp .......................... 6,415
123 United Carolina Bancshares ..................... 6,396
236 First Source Corp .............................. 6,254
212 Irwin Financial Corp ........................... 6,254
155 First Financial Bancorp ........................ 6,239
128 Selective Insurance Group ...................... 6,200
146 One Valley Bancorp Inc ......................... 6,132
155 Susquehanna Bancshares Inc ..................... 6,084
142 Student Loan Corp .............................. 6,026
217 Brenton Banks Inc .............................. 5,967
151 Albank Financial Corp .......................... 5,964
See notes to financial statements Page 6
<PAGE>
TOMORROW FUND RETIREMENT TRUST
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE SMALL-CAP STOCK FUND (CONTINUED)
141 Whitney Holding Corp ........................... $ 5,957
128 Banknorth Group Inc ............................ 5,920
154 Gallagher (Arthur J.) & Co ..................... 5,814
192 First Michigan Bank Corp ....................... 5,808
172 National Penn Bancshares Inc ................... 5,805
95 Mercantile Bancorp Inc ......................... 5,771
196 Hubco Inc ...................................... 5,684
119 American General Corp .......................... 5,682
258 National Commerce Bancorp ...................... 5,676
405 ALFA Corp ...................................... 5,619
154 RLI Corp ....................................... 5,611
272 NYMagic Inc .................................... 5,610
185 First Merchants Corp ........................... 5,596
135 First Commercial Corp .......................... 5,552
140 Firstbank Ilinois Co ........................... 5,478
125 BT Financial Corp .............................. 5,469
125 JSB Financial Inc .............................. 5,406
223 SEI Investment Co .............................. 5,380
157 Citizens Banking Corp .......................... 5,377
136 Associated Banc Corp ........................... 5,372
142 United Fire & Casualty Co ...................... 5,325
248 First Commonwealth Financial Corp .............. 5,270
130 CNB Bancshares Inc ............................. 5,265
324 Crawford & Co .................................. 5,265
166 First Midwest Bancorp Inc ...................... 5,260
180 Bancorp South Inc .............................. 5,220
190 Valley National Bancorp ........................ 5,154
239 Trustco Bank Corp .............................. 5,109
125 Liberty Corp ................................... 5,094
118 UMB Financial Corp ............................. 5,089
181 Zenith National Insurance ...................... 4,887
145 S&T Bancorp Inc ................................ 4,857
164 +UICI ........................................... 4,838
511 Gainsco Inc .................................... 4,791
112 MAF Bancorp .................................... 4,690
257 Mid Am Inc ..................................... 4,690
113 Farmers Capital Bank Corp ...................... 4,689
155 Argonaut Group Inc ............................. 4,572
150 Bank Of Granite Corp ........................... 4,538
137 Corus Bankshares Inc ........................... 3,870
32 +SLH Corp ....................................... 2,464
113 Trust Company of New Jersey. ................... 2,175
-------
529,127
-------
HEALTH (4.9%)
500 +Dura Pharmaceuticals Inc ....................... 19,938
200 +Agouron Pharmaceuticals Inc .................... 16,175
649 +Tecnol Medical Products Inc .................... 14,440
900 Integrated Device Technology Inc ............... 9,450
800 Liposome Inc ................................... 7,150
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE SMALL-CAP STOCK FUND (CONTINUED)
155 +Medical Assurance Inc .......................... $ 6,297
175 West Inc ....................................... 5,009
274 Kinetic Concepts Inc ........................... 4,932
100 Jones Medical Industries Inc ................... 4,750
200 Pall Corp ...................................... 4,650
130 Seafield Capital Corp .......................... 4,647
466 +Medco Research Inc ............................. 4,485
130 Diagnostic Products ............................ 4,103
102 +Synetic Inc .................................... 3,774
305 +Advanced Magnetics Inc ......................... 3,317
134 Lunar Corp ..................................... 2,915
369 +Epitope Inc .................................... 2,906
1,710 +Avatex Corp .................................... 2,031
100 +Faulding Inc ................................... 1,225
-------
122,194
-------
INDUSTRIAL (13.3%)
852 Oil-Dri Corp America ........................... 13,685
2,020 GRC International, Inc ......................... 11,110
500 Tejon Ranch Co ................................. 9,500
519 +Allied Waste Industries Inc .................... 9,018
262 Raymond Corp ................................... 8,556
298 True North Communications ...................... 7,375
374 Penn Engineering & Manufacturing Corp .......... 7,340
132 Tredegar Industries Inc ........................ 7,326
356 McGrath Rent Corp .............................. 7,298
527 Graphic Industries ............................. 6,983
274 Wackenhut Corp Ser A ........................... 6,576
177 Applied Industrial Technologies Inc ............ 6,372
237 Varlen Corp .................................... 6,369
386 +ADVO Inc ....................................... 6,273
190 IDEX Corp ...................................... 6,270
133 Manitowoc Inc .................................. 6,218
145 Stone & Webster, Inc ........................... 6,190
109 NACCO Industries Inc Cl A ...................... 6,152
210 Brady W H Co ................................... 6,090
222 Lawson Products Inc ............................ 5,994
402 Rollins Truck Leasing Corp ..................... 5,980
202 Baldor Electric Co ............................. 5,972
316 Woodhead Industries Inc ........................ 5,965
381 Kaman Corp Cl A ................................ 5,858
188 Graco Inc ...................................... 5,664
200 +Littelfuse, Inc ................................ 5,650
145 +USA Waste Services Inc ......................... 5,601
145 Donaldson Co ................................... 5,510
133 Kimball International Inc. Cl B ................ 5,353
212 Amcast Industrial Corp ......................... 5,300
227 Landauer Inc ................................... 5,264
267 ABM Industries Inc ............................. 5,156
107 Fisher Scientific International ................ 5,082
Page 7 See notes to financial statements
<PAGE>
TOMORROW FUND RETIREMENT TRUST
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE SMALL-CAP STOCK FUND (CONTINUED)
492 +Thermo Fibertek Inc ........................... $ 5,043
155 Commercial Metals .............................. 4,999
185 International Aluminum Corp .................... 4,902
214 American Business Products ..................... 4,868
214 Albany International Corp Cl A ................. 4,815
120 Hughes Supply Inc .............................. 4,800
117 American Filtrona Corp ......................... 4,797
247 X-Rite Inc ..................................... 4,693
679 UNR Industries Inc ............................. 4,668
139 Butler Manufacturing Co ........................ 4,604
243 Brown Group Inc ................................ 4,541
151 Standex International Corp ..................... 4,530
351 Dames & Moore Inc .............................. 4,344
204 +Lydall Inc ..................................... 4,310
274 Cadmus Communications Corp ..................... 4,247
227 +Osmonics Inc ................................... 4,185
211 Alico Inc ...................................... 4,141
172 Harland Co ..................................... 3,924
631 Insituform Technologies Cl A ................... 3,865
217 Angelica Corp .................................. 3,798
565 +Handleman Co ................................... 3,602
151 Lilly Industries Inc Cl A ...................... 3,039
207 Commercial Intertech Corp ...................... 2,885
167 +Cuno Inc ....................................... 2,797
127 +Pre-Paid Legal Services Inc .................... 2,683
-------
328,130
-------
REAL ESTATE INVESTMENT TRUST (6.4%)
427 BRE Properties Inc ............................. 10,728
734 United Dominion Realty Trust Inc ............... 10,414
685 Burham Pacific Properties Inc .................. 9,419
558 Western Investment Real Estate ................. 7,742
346 Universal Health Realty Income ................. 6,552
384 CRIIMI Mae Inc ................................. 6,144
129 Equity Residential Properties Trust ............ 6,128
430 First Union Real Estate ........................ 6,074
505 Berkshire Realty Co ............................ 5,366
242 MGI Properties ................................. 5,339
136 National Health Investors, Inc ................. 5,338
210 American Health Properties ..................... 5,276
193 Federal Realty Investment ...................... 5,211
293 Washington Real Estate ......................... 5,201
439 IRT Property Co ................................ 5,158
302 Kranzco Realty Trust SBI ....................... 5,134
335 Commercial Net Lease Realty .................... 5,130
290 +Getty Realty Corp .............................. 5,111
381 Taubman Centers Inc ............................ 5,048
276 LTC Properties Inc ............................. 5,003
152 Omega Healthcare Investors Inc ................. 4,968
203 Allied Capital Comercial Corp .................. 4,872
213 Penn Real Estate Investment .................... 4,779
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE SMALL-CAP STOCK FUND (CONTINUED)
196 Health Care Reit, Inc .......................... $ 4,765
269 Ramco-Gershenson Properties .................... 4,741
207 Nationwide Health .............................. 4,554
189 Bradley Real Estate Inc ........................ 3,638
51 Wellsford Real Properties Trust SBI ............ 561
-------
158,394
-------
TECHNOLOGY (10.0%)
362 Novellus Systems Inc ........................... 31,313
644 +Vitesse Semiconductor Corp ..................... 21,051
2,025 +Chips And Technologies Inc ..................... 21,009
294 +Lattice Semiconductor Corp ..................... 16,611
700 VlSI Technologies Inc .......................... 16,538
335 Kent Electronics Corp .......................... 12,290
934 +Trident Microsystems Inc ....................... 10,507
300 +Microchip Technology Inc ....................... 8,925
572 Daniel Industries .............................. 8,830
164 +Keane Inc ...................................... 8,528
119 CTS Corp ....................................... 8,204
510 Bell Industries Inc ............................ 7,969
111 Thiokol Corp ................................... 7,770
227 MTS Systems Corp ............................... 6,924
114 Fluke Corp ..................................... 6,755
183 +Esterline Technologies Corp .................... 6,439
100 +Sanmina Corp ................................... 6,350
233 Cubic Corp ..................................... 6,058
163 +Tekelec ........................................ 5,766
171 Analysts International Corp .................... 5,729
101 +Sequa Corp Cl A ................................ 5,694
109 +Dionex Corp .................................... 5,586
241 Boole & Babbage Inc ............................ 5,121
123 +BRC Holdings Inc ............................... 4,674
162 +DH Technology Inc .............................. 2,632
-------
247,273
-------
TRANSPORTATION (1.6%)
646 Yellow Corp .................................... 14,454
192 +Swift Transportation Co Inc .................... 5,664
174 Expeditors International ....................... 4,937
276 International Shipholding Corp ................. 4,709
493 Frozen Foods Express Industries ................ 4,252
199 Hunt J B Transportation Services Inc ........... 2,960
109 Circle International Group Inc ................. 2,875
------
39,851
------
UTILITIES (11.9%)
529 KN Energy Inc .................................. 22,284
294 Puget Sound Energy Inc ......................... 7,791
349 Philadelphia Suburban Corp ..................... 6,675
116 SJW Corp ....................................... 6,090
188 Oneok Inc ...................................... 6,051
See notes to financial statements Page 8
<PAGE>
TOMORROW FUND RETIREMENT TRUST
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
--------- -------- -----
CORE SMALL-CAP STOCK FUND (CONTINUED)
307 United Water Resources Inc ..................... $ 5,948
274 Northwestern Public Service .................... 5,891
173 Energen Corp ................................... 5,828
132 California Water Services Co ................... 5,808
218 Pennsylvania Enterprises Inc ................... 5,573
228 Connecticut Energy Corp ........................ 5,529
193 Black Hills Corp ............................... 5,501
218 Yankee Energy System ........................... 5,341
137 Wicor Inc ...................................... 5,334
157 North Carolina Natural Gas Corp ................ 5,240
320 St Joseph Light & Power ........................ 5,240
152 Central Hudson Gas & Electric Corp ............. 5,234
127 Cilcorp Inc .................................... 5,231
282 Easterns Utilities Assoc ....................... 5,147
214 MDU Resources Group Inc ........................ 5,136
163 New Jersey Resources Corp ...................... 5,114
201 SIG Corp Inc ................................... 5,100
198 Piedmont Natural Gas Inc ....................... 5,086
210 Atmos Energy Corp .............................. 5,040
185 Aquarion Co .................................... 4,995
402 Central Maine Power Co ......................... 4,975
203 Southern California Water Co ................... 4,974
302 Cascade Natural Gas Corp ....................... 4,945
199 Indiana Energy Inc ............................. 4,863
185 Northwest Natural Gas Co ....................... 4,845
156 E Town Corp .................................... 4,817
246 Western Gas Resources Inc ...................... 4,797
204 United Cities Gas Co ........................... 4,794
202 Green Mountain Power ........................... 4,785
249 Public Service Co .............................. 4,778
194 Commonwealth Energy System ..................... 4,644
211 Laclede Gas Co ................................. 4,589
207 UGI Corp ....................................... 4,580
155 IES Industries Inc ............................. 4,572
116 +Tejas Gas Corp ................................. 4,553
222 Madison Gas & Electric ......................... 4,551
137 Otter Tail Power Co ............................ 4,521
203 South Jersey Industries ........................ 4,517
168 Bay State Gas .................................. 4,473
258 Empire District Electric ....................... 4,467
248 Public Service Co of New Mexico ................ 4,433
129 Orange & Rockland Utilities .................... 4,338
197 CTG Resources Inc .............................. 4,334
161 WPS Resources Corp ............................. 4,307
203 Colonial Gas Co ................................ 4,276
183 TNP Entreprise Inc ............................. 4,243
121 Eastern Enterprises ............................ 4,212
132 United Illuminating ............................ 4,076
454 Citizens Utilities Co Cl B ..................... 3,633
299 Central Vermont Public Services Corp ........... 3,308
137 Consumers Water Co ............................. 2,432
-------
293,839
-------
VALUE
-----
CORE SMALL-CAP STOCK FUND (CONTINUED)
TOTAL INVESTMENTS (95.6%)
(Cost $2,005,830) ............................. $2,361,771
OTHER ASSETS IN EXCESS
OF LIABILITIES (4.4%) ......................... 108,560
----------
TOTAL NET ASSETS (100.0%) ...................... $2,470,331
==========
<FN>
+ Non-Income producing security.
</FN>
</TABLE>
Page 9 See notes to financial statements
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES AT JUNE 30, 1997 (UNAUDITED)
CORE CORE
LARGE- SMALL-
CAP CAP
--- ---
<S> <C> <C>
ASSETS
Investments at value (+) ........................... $ 2,207,931 $ 2,361,771
Cash and cash equivalents .......................... 210,134 109,510
Receivable for securities sold ..................... 0 37,962
Receivable from Adviser ............................ 6,492 7,243
Dividends and interest receivable .................. 2,921 3,781
Deferred organizational costs and
prepaid expenses .......................... 36,607 36,638
---------- ----------
2,464,085 2,556,905
---------- ----------
LIABILITIES
Organization costs payable ......................... 51,083 51,083
Other accrued expenses ............................. 38,916 35,491
---------- ----------
89,999 86,574
---------- ----------
NET ASSETS .................................... $ 2,374,086 $ 2,470,331
=========== ===========
NET ASSETS REPRESENTED BY:
Shares of beneficial interest (par $0.001) ......... $ 185 $ 298
Paid-in surplus .................................... 2,009,024 2,030,850
Accumulated undistributed net investment income .... 7,013 15,638
Undistributed realized gains on investments ........ 4,370 67,604
Net unrealized appreciation on investments ......... 353,494 355,941
---------- ----------
NET ASSETS ......................................... $ 2,374,086 $ 2,470,331
=========== ===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE:
ADVISER SHARES:
Shares of beneficial interest issued and outstanding 184,720 297,579
---------- ----------
Net asset value per share .......................... $ 12.85 $ 8.30
=========== ===========
(+) Investments at cost ............................ 1,854,437 2,005,830
UNREALIZED APPRECIATION/(DEPRECIATION): *
Gross appreciation ........................ 386,071 435,788
Gross depreciation ........................ (32,577) (79,847)
---------- ----------
NET UNREALIZED APPRECIATION ........................ 353,494 355,941
=========== ===========
<FN>
* Based on cost of securities for Federal Income tax purposes which does not
differ from book cost.
</FN>
</TABLE>
See notes to financial statements Page 10
<PAGE>
<TABLE>
<CAPTION>
TOMORROW FUNDS RETIREMENT TRUST
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) CORE CORE
CORE CORE
LARGE SMALL
CAP CAP
--- ---
<S> <C> <C>
INVESTMENT INCOME:
Dividends ............................................... $ 19,781 $ 27,347
--------- ---------
Other ................................................... 74 66
--------- ---------
19,855 27,413
--------- ---------
EXPENSES:
Investment advisory fees - Note 5 ....................... 6,734 7,905
Administration fees - Note 5 ............................ 808 949
Fund accounting fees .................................... 18,534 17,534
Professional fees ....................................... 14,805 13,969
Registration fees and expenses .......................... 13,912 12,796
Transfer agent fees and expenses (Institutional Shares) . 10,732 10,832
Custodian fees and expenses ............................. 6,926 6,442
Amortization of organization costs ...................... 5,205 5,205
Trustees' fees and expenses ............................. 4,401 2,983
Shareholders' reports ................................... 1,957 3,015
Other expenses .......................................... 1,092 1,143
--------- ---------
Total Expenses .......................................... 85,106 82,773
Less fees waived by Adviser and Administrator - Note 5 .. (7,542) (8,854)
Less expenses reimbursed by adviser - Note 5 ............ (65,584) (59,814)
Less expenses paid indirectly - Note 7 .................. (756) (929)
--------- ---------
NET EXPENSES ............................................ 11,224 13,176
--------- ---------
NET INVESTMENT INCOME ................................... 8,631 14,237
--------- ---------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments ............... 4,213 65,492
Change in unrealized appreciation on Investments 245,323 155,316
NET GAIN ON INVESTMENTS ................................. 249,536 220,808
--------- ---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .... $ 258,167 $ 235,045
========= =========
</TABLE>
Page 11 See notes to financial statements
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
CORE LARGE CAP CORE SMALL CAP
-------------- --------------
SIX SIX
MONTHS PERIOD MONTHS PERIOD
ENDED ENDED ENDED ENDED
6/30/97+ 12/31/96* 6/30/97+ 12/31/96*
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income .......................... $ 8,631 $ 13,181 $ 14,237 $ 24,432
Net realized gain on investments ............... 4,213 29,755 65,492 25,143
Change in unrealized appreciation on investments 245,323 108,171 155,316 200,625
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ............. 258,167 151,107 235,045 250,200
---------------------------- --------------------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income .......................... 0 (14,799) 0 (23,031)
Net realized capital gains ..................... 0 (29,598) 0 (23,031)
---------------------------- --------------------------
DECREASE IN NET ASSETS DUE TO
DIVIDENDS AND DISTRIBUTIONS ........... 0 (44,397) 0 (46,062)
---------------------------- --------------------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST:
Received on issuance:
Shares sold .................................... 915,399 1,720,086 811,633 1,801,897
Shares issued in reinvestment
of dividends and distributions ........ 0 44,396 0 46,062
Shares redeemed ................................ (370,612) (400,060) (543,738) (84,706)
---------------------------- --------------------------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS ... 544,787 1,364,422 267,895 1,763,253
TOTAL INCREASE IN NET ASSETS ................... 802,954 1,471,132 502,940 1,967,391
NET ASSETS:
Beginning of period ............................ 1,571,132 100,000 1,967,391 0
---------------------------- --------------------------
End of period + ................................ $ 2,374,086 $ 1,571,132 $ 2,470,331 $ 1,967,391
============================ ==========================
+ Includes undistributed/(overdistributed
net investment income $7,013 ($1,618) $15,638 $1,401
============================ ==========================
<FN>
+ Unaudited.
* Commencement of operations February 6, 1996.
</FN>
</TABLE>
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
The Tomorrow Long-Term Retirement Fund ("Long-Term Fund"), Tomorrow
Medium-Term Retirement Fund ("Medium-Term Fund"), Tomorrow Short-Term Retirement
Fund ("Short-Term Fund"), Core Large-Cap Fund (Large-Cap Fund") and Core
Small-Cap Fund ("Small -Cap Fund") are separate funds of the Tomorrow Funds
Retirement Trust (the "Trust"). The Trust is a Delaware business trust
registered under the Investment Company Act of 1940, as amended (the "Act"), as
an open-end investment company. All of the funds are diversified. The
accompanying financial statements and notes relate to the Large-Cap Fund and
Small Cap Fund only (collectively the "Funds").
The Trust offers two classes of shares: Adviser Class Shares and
Institutional Class Shares. Adviser Shares and Institutional Shares are
substantially the same except that Adviser Shares bear the fees payable under a
plan adopted by the Trust's Board of Trustees pursuant to Rule 12b-1 under the
Act (the "Distribution Plan") at an annual rate of up to 0.50% of the average
daily net assets attributable to the Adviser Shares; Institutional Shares bear
the fees that are payable under a Service Plan (the "Service Plan") at an annual
rate of up to 0.25% of the average daily net assets attributable to the
Institutional Shares. In addition to fees paid pursuant to the Distribution Plan
and Service Plan, each class also bears the expense associated with transfer
agent fees.
Investment income, expenses (other than expenses incurred under the
Distribution Plan, the Service Plan and transfer agent fees and expenses), and
realized and unrealized gains and losses on investments of a Fund are allocated
to the separate classes of shares based upon their relative net asset value on
the date income is earned or expenses and realized and unrealized gains and
losses are incurred.
The Funds first commenced offering Institutional shares on February 6, 1996.
There are currently no shares outstanding for the Adviser Class of the Large Cap
Fund and Small Cap Fund.
2. SIGNIFICANT ACCOUNTING POLICIES
PORTFOLIO VALUATION
Common Stock- Securities listed or admitted to trading on a national
securities exchange, including options, are valued at the last sale price on
such exchange as of the close of regular trading on the New York Stock Exchange
("NYSE") on each day that the Funds calculate their net asset values. Unlisted
securities and listed securities for which there are no sales reported on the
valuation date are valued at the mean between the most recent bid and ask
prices.
Bonds- Bonds and other fixed income securities (other than short-term
obligations but including listed issues) in the Funds' portfolios are valued by
a pricing service which utilizes both dealer-supplied valuations and electronic
data processing techniques which take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other market
data, without exclusive reliance upon quoted prices, exchange or
over-the-counter prices, when such valuations are believed to reflect the market
value of such securities.
Money Market Securities- Investments in money market and other short-term (60
days or less) securities are valued at amortized cost, which has been determined
by the Trust's Board of Trustees to represent the fair market value of such
securities.
Foreign Securities- Securities listed or admitted to trading on an
international securities exchange, including options, are valued at the last
sale price, at the close of the primary international exchange on the day that
the Fund's calculate their net asset values. Unlisted foreign securities and
listed foreign securities for which there are no sales reported on the valuation
date are valued at the mean between the most recent bid and asked prices.
Certain risks result from investing in foreign securities in addition to the
usual risk inherent in domestic investments. Such risks include future
political, economical and currency exchange developments including restrictions
and changes in foreign law.
Page 13
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are recorded on a trade date basis. Realized gains and
losses from security transactions are recorded utilizing the identifiecation
method. Interest income is recognized on an accrual basis and dividend income is
recognized on ex-dividend date. Discounts on fixed income securities are
accreted to interest income over the life of the security or until an applicable
call date if sooner, with a corresponding increase in cost basis.
During the six months ended June 30, 1997, none of the Funds in the Trust
entered into the following transactions: futures, options, forward currency
contracts or foreign currency transactions.
FEDERAL INCOME TAXES
Each Fund's policy is to comply with the requirements of the Internal Revenue
Code that are applicable to regulated investment companies and to distribute all
of its taxable income to its shareholders. Accordingly, no federal tax or excise
tax provisions are required. The federal income tax basis of investments
approximates cost.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from Net investment Income- Dividends from net investment income
are declared and paid annually when available for each Fund and are recorded on
ex-dividend date.
Distributions from Capital Gains- Distributions from capital gains are
declared by December 31 of the year in which they are earned and are paid by
January 31 of the following year. However, to the extent that the net realized
gains of a Fund can be offset by capital loss carryovers of that Fund, such
gains will not be distributed.
The amounts of dividends from net investment income and distributions from
net realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions to shareholders which exceed net investment income
and net realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or net
distributions in excess of net realized gains. To the extent they exceed net
investment income and net realized gains for tax purposes, they are reported as
distributions of capital.
USE OF ESTIMATES
Estimates and assumptions are required to be made regarding assets,
liabilities and changes in net assets resulting from operations when financial
statements are prepared. Changes in the economic environment, financial markets
and any other parameters used in determining these estimates could cause actual
results to differ from these amounts.
3. ORGANIZATIONAL EXPENSES
Weiss, Peck & Greer. L.L.C. ("WPG"), the Funds' investment Adviser, paid the
organizational expenses of the Funds in the amount of approximately $102,000
($51,000 each for the Large Cap and Small Cap Funds). The Funds will reimburse
WPG for these expenses which have been deferred and are being amortized by the
Funds on a straight line method over a period of five years from the
commencement of operations.
4. EXPENSES
The Trust accounts separately for the assets, liabilities and operations of each
Fund. Direct expenses of a Fund are charged to that Fund while general Trust
expenses are allocated among the Trust's respective Funds.
Page 14
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
Notes to Financial Statements (Unaudited) - (continued)
5- INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust, with respect to each Fund, has entered into an Investment Advisory
Agreement with WPG which entitles WPG to receive a fee, which is accrued daily
and paid monthly, at an annual rate of 0.75% of each Fund's average daily net
assets. WPG voluntarily agreed not to impose its advisory fee applicable to the
Funds for the six months ended June 30, 1997.
WPG has agreed to voluntarily limit each Fund's total operating expenses,
(excluding taxes, brokerage commissions, interest, dividends paid on securities
sold short and extraordinary legal fees and expenses) to 1.50% of the average
daily net assets. WPG will reduce its advisory fee (but not below $0) when the
total operating expenses exceed these limits.
The Trust has entered into an Administration Agreement with WPG. For its
administrative services, WPG is entitled to receive a fee, which is accrued
daily and paid monthly, at an annual rate of 0.09% of each Fund's average daily
net assets. WPG voluntarily agreed not to impose its administration services fee
applicable to the funds for the six months ended June 30, 1997.
The Trust with respect to the Institutional Class of each Fund has also
adopted a Service Plan ( the "Institutional Service Plan") pursuant to which
each Fund has agreed to pay fiduciaries of retirement plans investing in the
Funds a fee for various services and/or account maintenance services relating to
the Institutional Class Shares. The Institutional Service Plan fee is accrued
daily and paid quarterly at an annual rate of up to 0.25% of the average daily
net asset value attributable to the Institutional Class Shares of each Fund, and
is borne solely by the Institutional Class Shares. For the six months ended June
30, 1997 no such payments were made for the Large Cap Fund and Small Cap Fund.
6. SECURITIES TRANSACTIONS
Sale proceeds, cost of securities sold and purchased, (other than short term
investments and options written), total commissions and commissions received by
WPG on such transactions for the six months ended June 30, 1997 were as follows:
<TABLE>
<CAPTION>
PROCEEDS COST OF COMMISSIONS
OF SECURITIES SECURITIES TOTAL RECEIVED
SOLD PURCHASED COMMISSIONS BY WPG
---- --------- ----------- ------
<S> <C> <C> <C> <C>
Large Cap $188,170 $584,357 $ 519 $ 519
Small Cap 268,573 500,959 875 722
</TABLE>
7. CUSTODIAN FEES
Each Fund has entered into an expense offset arrangement with its custodian
wherein it receives credit toward the reduction of custodian fees whenever there
are uninvested cash balances. The Funds' custodian fee and related offset for
the six months ended June 30, 1997 were $11,048 and $1,941, respectively, for
the Large-Cap Fund and $13,201 and $468, respectively, for the Small-Cap Fund.
The Funds could have invested its cash balances elsewhere if it had not agreed
to a reduction in fees under the expense offset agreement with its custodian.
Page 15
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
8. CAPITAL SHARE TRANSACTIONS
Transaction in shares of the Funds are summarized below:
CORE LARGE CAP
<TABLE>
<CAPTION>
FOR THE PERIOD
SIX MONTHS ENDED FEBRUARY 6, 1997*
JUNE 30, 1997 (UNAUDITED) THROUGH DECEMBER 31, 1996
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
INSTITUTIONAL CLASS SHARES
Sold 76,391 $ 915,399 161,419 $ 1,720,086
Reinvested from dividends
and distributions -- -- 3,905 44,396
Redeemed (31,794) (370,612) (35,201) (400,060)
------- -------- ------- --------
Net increase 44,597 $ 544,787 130,123 $ 1,364,422
====== =========== ======= ===========
CORE SMALL CAP
FOR THE PERIOD
SIX MONTHS ENDED FEBRUARY 6, 1997*
JUNE 30, 1997 (UNAUDITED) THROUGH DECEMBER 31, 1996
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
INSTITUTIONAL CLASS SHARES
Sold 104,358 $ 811,633 268,942 $ 1,801,897
Reinvested from dividends
and distributions -- -- 6,191 46,062
Redeemed (70,240) (543,738) (11,672) (84,706)
------- -------- ------- --------
Net increase 34,118 $ 267,895 263,461 $ 1,763,253
====== =========== ======= ===========
<FN>
* (Initial offering date).
</FN>
</TABLE>
Page 16
<PAGE>
<TABLE>
<CAPTION>
TOMORROW FUNDS RETIREMENT TRUST
FINANCIAL HIGHLIGHTS
$ PER SHARE
NET
NET REALIZED TOTAL DIVIDENDS DISTRI- NET
ASSET AND INCOME FROM BUTIONS ASSET
VALUE AT NET UNREALIZED FROM NET FROM TOTAL VALUE AT
BEGINNING INVESTMENT GAINS INVESTMENT INVESTMENT CAPITAL DISTRI- END OF TOTAL
OF PERIOD INCOME SECURITIES OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN!
--------- ------ ---------- ---------- ------ ----- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LARGE CAP - INSTITUTIONAL SHARES
For the period February 6, 1996*
through December 31, 1996 $ 10.00 0.10 1.24 1.34 (0.11) (0.02) (0.13) $ 11.21 15.35%
For the six months ended
June 30, 1997 (Unaudited) 11.21 0.05 1.59 1.64 0.00 0.00 0.00 12.85 14.63%
SMALL CAP - INSTITUTIONAL SHARES
For the period February 6, 1996*
through December 31, 1996 6.50 0.10 1.05 1.15 (0.09) (0.09) (0.18) 7.47 17.70%
For the six months ended
June 30, 1997 (Unaudited) 7.47 0.05 0.78 0.83 0.00 0.00 0.00 8.30 11.11%
RATIOS
RATIO INFORMATION
ASSUMING NO FEE WAVIER
REIMBURSEMENTS OR
CUSTODY FEE
RATIO OF EARNINGS CREDIT RECEIVED
RATIO OF NET ------------------------
EXPENSES INCOME TO RATIO OF RATIO OF
NET TO AVERAGE AVERAGE PORTFOLIO AVERAGE EXPENSES NET INCOME
ASSETS NET NET TURNOVER COMMISSION TO AVERAGE TO AVERAGE
(000's) ASSETS+ ASSETS+ RATE! PER SHARE NET ASSETS NET ASSETS
------- ------- ------- ----- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
LARGE CAP - INSTITUTIONAL SHARES
For the period February 6, 1996*
through December 31, 1996 $1,571 1.25% 1.67% 48.62%$ 0.0350 18.89% -15.97%
For the six months ended
June 30, 1997 (Unaudited) 2,374 1.25% 0.96% 10.42% 0.0350 9.48% -7.27%
SMALL CAP - INSTITUTIONAL SHARES
For the period February 6, 1996*
through December 31, 1996 1,967 1.25% 2.02% 11.46% 0.0350 12.96% -9.69%
For the six months ended
June 30, 1997 (Unaudited) 2,470 1.25% 1.35% 12.78% 0.0350 7.85% -5.25%
<FN>
+ Annualized.
! Not annualized.
* Commencement of operations.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
TOMORROW FUNDS
RETIREMENT TRUST
---------------------------------------
ONE NEW YORK PLACE, NEW YORK, NY 10004
(800) 223-3332
INDEPENDENT TRUSTEES AND MEMBERS
OF AUDIT COMMITTEE
Raymond R. Herrmann, Jr.
Lawrence J. Israel
Harvey E. Sampson
OFFICERS
ROGER J. WEISS
Chairman of the Board, President and Trustee
JAY C. NADEL
Executive Vice President and Secretary
FRANCIS H. POWERS
Executive Vice President and Treasurer
DANIEL CARDELL
Vice President
JOSEPH J. REARDON
Vice President
DANIEL S. VANDIVORT
Vice President
JOSEPH PARASCONDOLA
Assistant Vice President
INVESTMENT ADVISER
Weiss, Peck & Greer, L.L.C.
One New York Plaza
New York, NY 10004
CUSTODIAN
Boston Safe Deposit and Trust Company
One Exchange Place
Boston, MA 02109
DIVIDEND DISBURSING AND
TRANSFER AGENT
First Data Investor Services Group, Inc.
4400 Computer Drive
Westboro, MA 01581-5120
LEGAL COUNSEL
Hale and Dorr
60 State Street
Boston, MA 02109
This report is submitted for the general information of shareholders and is not
authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus. Nothing herein is to be considered an
offer of sale or solicitation of an offer to buy shares of the Tomor row Funds
Retirement Trust. Such offering is made only by prospectus, which includes
details as to offering and other material information.
