TomorrowFunds
--------------------------------
R E T I R E M E N T T R U S T
A Lifecycle Retirement Program
Semi-Annual Report
JUNE 30, 1999
(Unaudited)
TOMORROW LONG-TERM RETIREMENT FUND
TOMORROW MEDIUM-TERM RETIREMENT FUND
TOMORROW SHORT-TERM RETIREMENT FUND
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
TABLE OF CONTENTS
Ten Largest Holdings ............................................... 1
Schedules of Investments:
Tomorrow Long-Term Retirement Fund ............................ 2
Tomorrow Medium-Term Retirement Fund .......................... 6
Tomorrow Short-Term Retirement Fund ........................... 11
Statements of Assets and Liabilities ............................... 14
Statements of Operations ........................................... 15
Statements of Changes in Net Assets ................................ 16
Notes to Financial Statements ...................................... 17
Financial Highlights ............................................... 22
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
TEN LARGEST HOLDINGS AT JUNE 30, 1999 - (UNAUDITED)
<TABLE>
<CAPTION>
MARKET PERCENT
LONG-TERM TOMORROW FUND VALUE OF FUND
- --------------------------------------------------------------------------------------
<S> <C> <C>
UST-Note 6.125% Due 12/31/01 ................................ $ 667,940 7.0%
BT EAFE Equity Index Fund ................................... 514,737 5.4%
UST-Note 6.125% Due 8/15/07 ................................. 470,013 4.9%
International Business Machines Corp. ....................... 168,025 1.8%
General Electric ............................................ 166,675 1.7%
Microsoft Corp .............................................. 162,338 1.7%
Federal National Mortgage Association Disc. Note Due 7/20/99 159,590 1.7%
UST-Note 5.500% Due 5/15/09 ................................. 156,299 1.6%
UST-Note 5.250% Due 11/15/28 ................................ 155,122 1.6%
Intel Corp .................................................. 107,100 1.1%
----------- -----
$ 2,727,839 28.5%
=========== =====
MEDIUM-TERM TOMORROW FUND
- --------------------------------------------------------------------------------------
UST-Note 6.125% Due 12/31/01 ................................ $ 1,882,376 10.6%
UST-Bond 5.500% Due 5/15/09 ................................. 1,328,543 7.5%
BT EAFE Equity Index Fund ................................... 957,733 5.4%
Federal National Mortgage Association Disc. Note Due 7/20/99 807,922 4.5%
Federal National Mortgage Association Note 5.625% Due 5/14/04 368,243 2.1%
Federal National Mortgage Association Note 5.750% Due 2/15/08 286,827 1.6%
General Electric ............................................ 279,675 1.6%
International Business Machines Corp ........................ 271,425 1.5%
Microsoft Corp. ............................................. 270,563 1.5%
Citigroup ................................................... 202,146 1.1%
----------- -----
$ 6,655,453 37.4%
=========== =====
SHORT-TERM TOMORROW FUND
- --------------------------------------------------------------------------------------
UST-Bond 5.500% Due 5/15/09 ................................. $ 4,674,323 14.3%
Federal National Mortgage Association Disc. Note Due 7/20/99 2,533,485 7.7%
UST-Note 6.125 Due 12/31/01 ................................. 1,426,962 4.4%
UST-Note 6.500% Due 8/15/05 ................................. 1,401,861 4.3%
Salomon Inc. 7.300% Due 5/15/02 ............................ 880,442 2.7%
Dresdner Funding Trust 144A 8.151% Due 6/30/31 .............. 574,726 1.8%
AT&T Corp. .................................................. 541,464 1.7%
Commercial Credit 8.250% Due 11/1/01 ........................ 531,537 1.6%
Norwest Financial 5.375% Due 9/30/03 ........................ 527,824 1.6%
Ford Motor Credit 6.570% Due 3/19/01 ........................ 522,491 1.6%
----------- -----
$13,615,115 41.7%
=========== =====
<FN>
*The composition of the largest securities in each portfolio is
subject to change.
</FN>
</TABLE>
Page 1
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW LONG-TERM RETIREMENT FUND
COMMON STOCKS (73.0%)
BASIC MATERIALS (3.2%)
<C> <S> <C>
850 AK Steel Holding Corp. ......................... $19,124
425 Aptargroup Inc. ................................ 12,750
1,425 Belden Inc. .................................... 34,111
1,350 Boise Cascade Group ............................ 57,881
550 Cambrex Corp. .................................. 14,438
350 +Chesapeake Corp. ............................... 13,103
400 Crane Co. ...................................... 12,575
500 Georgia Pacific ................................ 12,625
950 IMC Global Inc. ................................ 16,744
1,200 Intermet Corp. ................................. 18,150
375 Lilly Industries Inc. - Cl A ................... 6,961
350 MacDermid Inc. ................................. 16,275
370 Nashua Corp. ................................... 3,654
700 Pope & Talbot Inc. ............................. 8,444
180 Quanex Corp. ................................... 5,130
550 +Ryerson Tull Inc. .............................. 12,409
1,500 +Santa Fe Snyder Corp. .......................... 11,438
550 Solutia, Inc. .................................. 11,722
550 Tosco Corp. .................................... 14,266
50 Unisource Worldwide Inc. ....................... 603
----------
302,403
----------
CAPITAL GOODS (0.2%)
135 Manitowoc Inc. ................................. 5,619
150 South Down Inc. ................................ 9,638
----------
15,257
----------
COMMERCIAL SERVICES (2.4%)
425 ABM Industries Inc. ............................ 13,041
200 Acxiom Corp. ................................... 4,988
950 +Billing Information Concepts.................... 10,628
425 Firstmerit Corp. ............................... 11,927
1,900 +Foodmaker Inc. ................................. 53,913
136 Halter Marine Group Inc. ....................... 901
640 Instituform Technologies - Cl A ................ 13,840
209 +Quintiles Transnational Corp. .................. 8,778
400 Ryder Systems Inc. ............................. 10,400
500 +Snyder Communications Inc....................... 16,375
500 Tidewater Inc. ................................. 15,250
1,630 True North Communications ...................... 48,900
750 Viad Corp. ..................................... 23,203
----------
232,144
----------
COMMUNICATION (0.1%)
225 TCA Cable TV Inc. .............................. 12,488
----------
CONSUMER CYCLICALS (3.6%)
1,500 Brunswick Corp. ................................ 41,808
270 Champion Enterprises Inc. ...................... 5,029
200 +Cintas Corp. ................................... 13,438
270 Clarcor Inc. ................................... 5,181
350 +Convergys Corp. ................................ 6,738
1,400 Ford Motor Co. ................................. 79,013
200 Harley Davidson Inc. ........................... 10,875
180 Kellwood Co. ................................... 4,883
600 Metris Companies Inc. .......................... 24,450
180 Nautica Enterprises Inc. ....................... 3,038
475 +Ralcorp Holding Inc. ........................... 7,630
270 Ryland Group Inc. .............................. 8,016
850 Sara Lee Corp. ................................. 19,284
1,050 Shaw Industries Inc. ........................... 17,325
350 +Smithfield Foods Inc. .......................... 11,703
460 Southern Energy Homes .......................... 2,444
300 +Suiza Foods C ................................. 12,563
525 Toro Co. ....................................... 20,672
200 Wabash National Corp. .......................... 3,875
400 Warnaco Group Cl A ............................. 10,700
550 Winnebago Industries ........................... 12,375
500 +Xilinx Inc. .................................... 28,625
----------
349,665
----------
CONSUMER NON CYCLICALS (4.8%)
425 Adolph Coors ................................... 21,037
500 Anheuser - Busch Co. ........................... 35,469
250 Coca Cola Co. .................................. 15,625
300 Corning Inc. ................................... 21,038
180 Dimon Inc. ..................................... 934
550 +Fortune Brands ................................. 22,756
500 General Mills Inc. ............................. 40,188
200 Libbey Inc. .................................... 5,800
640 New England Business Service ................... 19,760
800 Philip Morris Companies Inc. ................... 32,150
1,050 Premark International .......................... 39,375
600 Proctor & Gamble Co. ........................... 53,550
950 Quaker Oats .................................... 63,056
1,100 Reynolds & Reynolds ............................ 25,644
400 Richfood Holdings .............................. 7,050
2,150 Supervalu Inc. ................................. 55,228
2 WLR Foods Inc. ................................. 16
----------
458,676
----------
CONSUMER SERVICES (2.5%)
375 +Allied Waste Inds Inc. ......................... 7,405
700 Arctic Cat Inc. ................................ 6,256
270 Carmike Cinemas Inc. Cl A ...................... 4,303
300 +Citrix Systems ................................. 16,950
1,950 Darden Restaurants Inc. ........................ 42,534
360 Devry Inc. ..................................... 8,055
1,000 Donnelley RR & Sons ............................ 37,063
550 Hilton Hotels Corp. ............................ 7,803
1,300 +Midway Games Inc. .............................. 16,819
180 Rural/ Metro Corp. ............................. 1,733
375 Time Warner Inc. ............................... 27,563
1,400 Wal-Mart Stores Inc. ........................... 67,550
----------
244,034
----------
Page 2 See notes to financial statements
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW LONG-TERM RETIREMENT FUND (CONTINUED)
ENERGY (3.4%)
200 Barrett Resources Corp. ........................ $ 7,674
900 Coastal Corp. .................................. 36,000
1,100 Exxon Corp. .................................... 84,838
250 Murphy Oil Corp. ............................... 12,203
180 New Field Exploration Co. ...................... 5,119
920 Oceaneering International Inc. ................. 14,835
700 Questar Corp. .................................. 13,388
1,550 Royal Dutch Petroleum ADR ...................... 93,388
1,250 Transocean Offshore Inc. ....................... 32,813
1,300 +Union Pacific Resources Group .................. 21,206
----------
321,464
----------
FINANCE (10.2%)
425 A G Edwards Inc. ............................... 13,703
575 AMBAC Inc. ..................................... 32,847
475 American International Group ................... 55,605
200 Amresco Inc. ................................... 1,288
1,987 AmSouth Bancorp ................................ 46,074
90 Astoria Financial Corp. ........................ 3,954
450 BankNorth Group Inc. ........................... 14,850
300 Bear Stearns Cos. Inc. ......................... 14,025
8 BSB Bancorp Inc. ............................... 216
100 Centura Banks Inc. ............................. 5,638
1,050 Chase Manhattan Corp. .......................... 90,956
1,750 Citigroup Inc. ................................. 83,125
400 City National Corp. ............................ 14,975
650 Comerica Inc. .................................. 38,634
475 Commercial Federal Corp. ....................... 3,130
725 Conseco Inc. ................................... 22,067
200 Cullen/Frost Bankers Inc. ...................... 5,513
153 +Delphi Financial Group ......................... 5,489
650 Dime Bancorp Inc. .............................. 13,081
250 +Equifax, Inc. .................................. 8,922
750 Federal National Mortgage Association .......... 51,281
335 Fidelity National Financial Inc. ............... 7,035
200 Finova Group Inc. .............................. 10,525
400 First American Financial ....................... 7,150
600 First Tennessee National Bank .................. 22,988
600 Fleet Financial Group Inc. ..................... 26,625
100 Franchise Finance Corp. of America ............. 2,200
99 rontier Insurance Group Inc. .................. 1,522
350 Hartford Financial Services Group .............. 20,409
270 Hilb, Rogal & Hamilton Co. ..................... 6,041
900 Household International Inc. ................... 42,638
350 +Hudson United Bancorp .......................... 10,719
180 JSB Financial Inc. ............................. 9,158
575 Keycorp ........................................ 18,472
180 Keystone Financial Inc. ........................ 5,321
325 Legg Mason Inc. ................................ 12,513
270 MAF Bancorp .................................... 6,669
525 Morgan Stanley Dean Witter ..................... 53,813
180 Mutual Risk Management ......................... 6,008
700 North Fork Bancorp ............................. 14,919
446 Old Kent Financial ............................. 18,687
2 One Valley Bancorp Inc. ........................ 75
150 The PMI Group Inc. ............................. 9,422
925 PNC Bank ....................................... 53,303
100 Radian Group Inc. .............................. 4,881
500 Raymond James Financial ........................ 11,969
180 St. Paul Bancorp ............................... 4,590
275 T. Rowe Price Associates Inc. .................. 10,553
550 +Travelers Property Casualty Cl A ............... 21,519
180 Trenwick Group Inc. ............................ 4,438
525 +UST Corp. ...................................... 15,881
90 US Trust Corp. ................................. 8,325
----------
973,741
----------
HEALTH CARE (7.3%)
1,100 Abbott Laboratories ............................ 50,046
270 Advanced Tissue Sciences Inc. .................. 878
350 Alpharma Inc. Cl A ............................. 12,447
400 +AmeriSource Health Corp. ....................... 10,200
275 +Amgen Inc. ..................................... 16,741
225 Bard (CR) Inc. ................................. 10,758
300 Baxter International ........................... 18,188
500 Bergen Brunswig Corp. .......................... 8,625
400 +Biogen Inc. .................................... 25,725
1,450 Bristol-Myers Squibb ........................... 102,134
400 DENTSPLY International ......................... 11,200
200 Eli Lilly & Co. ................................ 14,325
200 +Express Scripts Inc. - Cl A .................... 12,038
650 +Guidant Corp. .................................. 33,434
198 Integrated Health Services Inc. ................ 1,584
500 Johnson & Johnson Co. .......................... 49,000
90 Magellan Health Services Inc. .................. 900
510 +Medimmune Inc. ................................. 34,553
180 Mentor Corp. ................................... 3,353
1,200 Merck & Co. Inc. ............................... 88,800
550 Mylan Labs ..................................... 14,575
180 Orthodontic Centers of America ................. 2,543
270 Owens & Minor Inc. ............................. 2,970
250 +PacifiCare Health Systems - Cl B ............... 17,984
180 Respironics Inc. ............................... 2,723
500 +Roberts Pharmaceuticals ........................ 12,125
180 Safeskin Corp. ................................. 2,160
1,275 Schering-Plough Corp. .......................... 67,575
180 Sola International Inc. ........................ 3,499
250 +Visx Inc. ...................................... 19,797
625 +Wellpoint Health Networks ...................... 53,047
----------
703,927
----------
See notes to financial statements
Page 3
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW LONG-TERM RETIREMENT FUND (CONTINUED)
INDUSTRIAL (6.8%)
730 Anixter International Inc. ..................... $13,320
350 Applied Power Inc. ............................. 9,559
250 BF Goodrich Co. ................................ 10,625
950 +CDI Corp. ...................................... 32,359
450 Centurytel Inc. ................................ 17,888
700 Crompton & Knowles ............................. 13,694
350 Cummins Engine Inc. ............................ 19,994
1,300 +Cytec Industries Inc. .......................... 41,438
425 du Pont E I De Nemours & Co. ................... 29,033
225 +Dycom Industries ............................... 12,600
150 Ferro Corp. .................................... 4,125
550 Gencorp Inc. ................................... 13,888
1,475 General Electric ............................... 166,675
550 IMCO Reclycling Inc. ........................... 9,419
525 Ingersoll Rand Co. ............................. 33,928
1,175 Johnson Controls ............................... 81,442
1,250 Milacron Inc. .................................. 23,125
1,160 +Morrison Knudson Co. ........................... 11,963
325 +Novellus Systems Inc. .......................... 22,181
90 SPS Technologies Inc. .......................... 3,375
800 +USX - Marathon Group ........................... 26,050
300 +Waters Corp. ................................... 15,938
925 York International Corp. ....................... 39,602
----------
652,221
----------
INDUSTRIAL SERVICES (0.1%)
250 +Waste Management Inc. .......................... 13,438
----------
REAL ESTATE INVESTMENT TRUST (0.6%)
180 Federal Realty Investors Trust ................. 4,126
100 Felcor Lodging Trust ........................... 2,075
225 General Growth Properties ...................... 7,988
675 Glenborough Realty ............................. 11,813
100 Health Care Property Investors ................. 2,888
200 Highwood Properties ............................ 5,488
100 Liberty Property Trust ......................... 2,488
100 Mack-Cali Realty Corp. ......................... 3,094
400 Smith Charles Residential ...................... 13,575
100 Storage USA .................................... 3,188
----------
56,723
----------
RETAIL (4.0%)
500 Abercrombie and Fitch Co. ...................... 24,000
400 Best Buy Co. ................................... 27,000
500 Casey's General Store .......................... 7,500
550 Dayton Hudson Corp. ............................ 35,750
1,100 Dillards Inc - Cl A ............................ 38,637
650 Dress Barn Inc. ................................ 10,400
750 +Federated Department Store ..................... 39,703
350 +Footstar Inc. .................................. 13,016
563 Gap, Inc. ...................................... 28,336
350 +The Men's Warehouse ............................ 8,925
825 +Office Max Inc. ................................ 9,900
360 Osh Kosh B'Gosh - Cl A ......................... 7,605
150 +Payless Shoesource ............................. 8,025
1,075 Pier 1 Imports Inc. ............................ 12,094
1,700 TJX Companies Inc. ............................. 56,631
950 +Toys R Us ...................................... 19,653
200 Williams Sonoma Inc. ........................... 6,963
650 +Zale Corp. ..................................... 26,000
----------
380,138
----------
TECHNOLOGY (14.2%)
555 AAR Corp. ...................................... 12,592
350 +Adaptive Broadband Corp. ....................... 7,656
750 Adobe Systems Inc. ............................. 61,617
650 +Altera Corp. ................................... 23,928
450 +American Management Systems .................... 14,428
1,200 +Apple Computer Inc. ............................ 55,575
200 Aspect Telecommunications ...................... 1,950
400 +C-Cube Microsystems ............................ 12,675
600 +Ciber Inc. ..................................... 11,475
180 Cognex Corp. ................................... 5,681
475 Computer Associates International Inc. ......... 26,125
675 Computer Task Group ............................ 11,475
1,725 +Compuware Corp. ................................ 54,877
225 +Comverse Technology ............................ 16,988
750 +Cypress Semiconductor .......................... 12,375
800 Dallas Semiconductors .......................... 40,400
375 Dialogic Corp. ................................. 16,453
1,800 +Filenet Corp. .................................. 20,588
550 +Galileo International, Inc. .................... 29,391
920 Geotek Communications Inc. ..................... 24
1,275 Gerber Scientific Inc. ......................... 28,130
250 Harris Corp. ................................... 9,797
300 Honeywell Inc. ................................. 34,763
1,800 Intel Corp. .................................... 107,100
1,300 International Business Machines Corp. .......... 168,025
575 Intervoice Inc. ................................ 8,302
820 Kemet Corp. .................................... 18,809
1,550 +Lexmark International Group - Cl A ............. 102,397
400 +LSI Logic Corp. ................................ 18,450
1,000 Lucent Technologies ............................ 67,438
500 Microchip Technology Inc. ...................... 21,793
1,800 +Microsoft Corp. ................................ 162,338
100 Precision Castparts Corp. ...................... 4,250
180 Read-Rite Corp. ................................ 1,117
180 S3 Inc. ........................................ 1,637
180 Sanmina Corp. .................................. 13,658
325 +SCI Systems Inc. ............................... 15,438
100 +Sterling Software Industry ..................... 2,669
Page 4 See notes to financial statements
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW LONG-TERM RETIREMENT FUND (CONTINUED)
375 +Sunguard Data System ........................... $12,938
200 +Synopsis Inc. .................................. 11,038
325 Technitrol Inc. ................................ 10,481
1,206 United Technologies. ........................... 86,430
90 Vantive Corp. ................................. 1,029
100 +Veritas Software Corp. ......................... 9,494
350 +Xircom. ........................................ 10,522
----------
1,364,316
----------
TELECOMMUNICATIONS (5.5%)
450 Ameritech Corp. ................................ 33,075
1,650 AT&T Corp. ..................................... 92,091
1,400 Bell Atlantic Corp. ............................ 91,525
750 BellSouth Corp. ................................ 35,156
700 +Cisco Systems. ................................. 45,150
200 GTech Holding Corp. ............................ 4,713
550 General Communication - Cl A ................... 3,738
675 +MCI Worldcom Inc. .............................. 58,092
550 +MediaOne Group Inc. ............................ 40,906
850 +Nextel Communications Inc. ..................... 42,659
750 US West Inc. ................................... 44,063
625 +Voicestream Wireless Corp. ..................... 17,773
625 +Western Wireless Co. ........................... 16,875
----------
525,816
----------
TRANSPORTATION (1.3%)
300 Airborne Freight Corp. ......................... 8,306
375 +Alaska Air Group ............................... 15,656
225 Borg Warner Automotive ......................... 12,375
487 Comair Holdings Inc. ........................... 10,136
550 Delta Air Lines ................................ 31,694
600 Mascotech Inc. ................................. 10,162
675 Meritor Automotive ............................. 17,212
200 Polaris Industries ............................. 8,700
750 Yellow Corp. ................................... 13,312
----------
127,553
----------
UTILITIES (2.8%)
1,400 Allegheny Energy Inc. .......................... 44,886
650 Conectiv, Inc. ................................. 15,884
1,275 Easterns Utilities ............................. 37,134
800 Energy East Corp. .............................. 20,800
500 Florida Progress Co. ........................... 20,656
800 FPL Group Inc. ................................. 43,700
500 GPU Inc. ....................................... 21,094
600 MCN Energy Group Inc. .......................... 12,450
500 +MidAmerican Energy Holdings .................... 17,313
700 Northwest Natural Gas Co. ...................... 16,888
200 Pinnacle West Capital .......................... 8,050
300 Utilicorp United Inc. .......................... 7,294
----------
266,149
----------
PRINCIPAL
AMOUNT SECURITY VALUE
- --------- -------- -----
TOMORROW LONG-TERM RETIREMENT FUND (CONTINUED)
TOTAL COMMON STOCKS
(Cost $5,980,847) .......................... $7,000,153
----------
U.S. GOVERNMENT OBLIGATIONS (20.3%)
U.S. TREASURY NOTES (17.1%)(20.3%)
$ 20,000 5.875% Due 7/31/99 ............................. 20,015
90,000 6.500% Due 5/31/01 ............................. 91,575
660,000 6.125% Due 12/31/01 ............................ 667,940
15,000 6.500% Due 8/15/05 ............................. 15,462
160,000 5.500% Due 5/15/09 ............................. 156,299
465,000 6.125% Due 8/15/07 ............................. 470,013
190,000 0.000% Due 5/15/17 ............................. 61,575
175,000 5.250% Due 11/15/28 ............................ 155,122
----------
1,638,001
----------
U.S. GOVERNMENT AGENCY NOTES (3.2%)
100,000 Federal National Mortgage Association
5.625% Due 5/14/04 ......................... 96,906
55,000 Federal National Mortgage Association
5.750% Due 2/15/08 ......................... 52,585
160,000 Federal National Mortgage Association
0.000% Due 7/20/99 ......................... 159,590
----------
309,081
----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $2,003,159) .......................... 1,947,082
----------
ASSET BACKED SECURITY (0.5%)
(Cost $47,375)
45,000 MBNA Master Credit Card 6.450% Due 2/15/08 ..... 44,887
----------
OPEN END INVESTMENT COMPANY (5.4%)
(Cost $405,706)
38,499 BT EAFE Equity Index Fund ...................... 514,737
----------
UNIT INVESTMENT TRUST (0.9%)
(Cost $64,473)
669 Standard & Poor's Depositary Receipt ........... 91,653
----------
TOTAL INVESTMENTS (100.1%)
(Cost $8,501,560) .......................... 9,598,512
LIABILITIES IN EXCESS OF OTHER ASSETS (-0.1%) (8,089)
----------
TOTAL NET ASSETS (100.0%) $9,590,423
==========
<FN>
+ Non-income producing security.
</FN>
</TABLE>
See notes to financial statements
Page 5
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW MEDIUM-TERM RETIREMENT FUND
COMMON STOCK (52.4%)
BASIC MATERIALS (2.4%)
<C> <S> <C>
1,450 AK Steel Holding Corp. ......................... $32,625
200 Aptargroup Inc. ................................ 6,000
1,150 Belden Inc. .................................... 27,528
200 BF Goodrich Co. ................................ 8,500
100 Birmingham Steel Co. ........................... 413
2,225 Boise Cascade Corp. ............................ 95,397
275 Cambrex Corp. .................................. 7,219
300 +Chesapeake Corp. ............................... 11,231
400 Crane Co. ...................................... 12,575
900 Crompton & Knowles ............................. 17,606
1,650 +Cytec Industries Inc. .......................... 52,594
800 du Pont E I De Nemours ......................... 54,650
550 Georgia-Pacific (Timber Group) ................. 13,887
1,750 IMC Global Inc. ................................ 30,844
575 Intermet Corp. ................................. 8,697
200 Lilly Industries ............................... 3,712
150 MacDermid Inc. ................................. 6,975
400 Pope & Talbot Inc. ............................. 4,825
100 Quanex Corp. ................................... 2,850
575 +Ryerson Tull Inc. .............................. 12,973
650 Solutia, Inc. .................................. 13,853
100 Unisource Worldwide Inc. ....................... 1,206
----------
426,160
----------
CAPITAL GOODS (0.4%)
300 AAR Corp. ...................................... 6,806
175 Applied Power Inc. ............................. 4,779
150 Champion Enterprise ............................ 2,794
75 Manitowoc Inc. ................................. 3,122
550 +Morrison Knudsen Co. ........................... 5,672
200 Precision Castparts ............................ 8,500
100 Ryland Group Inc. .............................. 2,969
200 South Down Inc. ................................ 12,850
250 Toro Co. ....................................... 9,843
300 Winnebago Industries ........................... 6,750
----------
64,085
----------
COMMERCIAL SERVICES (0.9%)
200 ABM Inds Inc. .................................. 6,138
450 +Billing Concepts Corp. ......................... 5,034
75 Halter Marine Group ............................ 497
300 Insituform Technology .......................... 6,487
116 +Quintiles Transnational Corp. .................. 4,872
1,000 Ryder Systems .................................. 26,000
575 +Snyder Communications .......................... 18,831
600 Tidewater Inc. ................................. 18,300
1,100 True North Communications ...................... 33,000
1,200 Viad Corp. ..................................... 37,125
----------
156,284
----------
COMMUNICATIONS (0.5%)
450 Centurytel Inc. ................................ 17,887
300 TCA Cable TV Inc. .............................. 16,650
625 Time Warner Inc. ............................... 45,937
----------
80,474
----------
CONSUMER CYCLICALS (2.0%)
325 Arctic Cat Inc. ................................ 2,903
275 Borg Warner Automotive ......................... 15,125
2,400 Brunswick Corp. ................................ 66,900
150 Clarcor Inc. ................................... 2,878
2,850 Ford Motor Company ............................. 160,847
200 Harley Davidson Inc. ........................... 10,875
100 Kellwood Company ............................... 2,713
300 Mascotech Inc. ................................. 5,081
650 Meritor Automotive ............................. 16,575
100 Nautica Enterprises Inc. ....................... 1,688
200 Osh Kosh B'Gosh Cl A ........................... 4,225
100 Polaris Industries ............................. 4,350
1,450 Sara Lee Corp. ................................. 32,897
1,275 +Shaw Industries Inc. ........................... 21,038
250 Southern Energy Home ........................... 1,328
100 Wabash National Corp. .......................... 1,938
500 Warnaco Group Cl A ............................. 13,375
----------
364,736
----------
CONSUMER NON CYCLICALS (3.4%)
500 Adolph Coors ................................... 24,747
850 Anheuser-Busch Co. ............................. 60,297
250 +Cintas Corp. ................................... 16,797
500 Coca Cola Co. .................................. 31,250
100 Dimon Inc. ..................................... 519
900 +Fortune Brands ................................. 37,238
48 General Cigar Holdings ......................... 375
800 General Mills Inc. ............................. 64,300
100 Libbey Inc. .................................... 2,900
300 New England Business Service ................... 9,263
1,600 Philip Morris Cos Inc. ......................... 64,300
1,350 Premark International .......................... 50,625
975 Proctor & Gamble Co. ........................... 87,019
1,500 Quaker Oats .................................... 99,563
225 +Ralcorp Holding Inc. ........................... 3,614
1,150 Reynolds & Reynolds Cl A ....................... 26,809
200 Richfood Holdings .............................. 3,525
175 +Smithfield Foods Inc. .......................... 5,852
300 +Suiza Foods Corp. .............................. 12,563
----------
601,556
----------
CONSUMER SERVICE (1.4%)
450 +Allied Waste Industries Inc. ................... 8,887
100 Carmike Cinemas Inc. ........................... 1,594
675 +CDI Corp. ...................................... 22,992
Page 6 See notes to financial statements
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW MEDIUM-TERM RETIREMENT FUND (CONTINUED)
3,100 Darden Restaurants ............................. $67,619
200 Devry Inc. ..................................... 4,475
1,600 Donnelley RR & Sons ............................ 59,300
2,600 +Foodmaker Inc. ................................. 73,775
700 Hilton Hotels Corp. ............................ 9,931
275 IMCO Recycling, Inc. ........................... 4,709
100 Rural/Metro Corp. .............................. 963
----------
254,245
----------
ENERGY (3.0%)
100 Barrett Resources Corp. ........................ 3,836
1,550 Coastal Corp. .................................. 62,000
1,850 Exxon Corp. .................................... 142,681
250 Murphy Oil Corp. ............................... 12,203
100 New Field Exploration Co. ...................... 2,844
500 Oceaneering International Inc. ................. 8,063
500 Questar Corp. .................................. 9,563
2,550 Royal Dutch Petroleum ADR. ..................... 153,638
650 Tosco Corp. .................................... 16,859
1,850 Transocean Offshore ............................ 48,563
2,150 +Union Pacific Resources Group .................. 35,072
1,350 +USX - Marathon Group ........................... 43,959
----------
539,281
----------
FINANCE (7.9%)
400 A G Edwards Inc. ............................... 12,900
900 AMBAC Inc. ..................................... 51,413
800 American International Group ................... 93,650
100 Amresco Inc. ................................... 644
3,225 AmSouth Bancorporation ......................... 74,780
1,550 BankBoston Corp. ............................... 79,244
200 BankNorth Group Inc. ........................... 6,600
300 Bear Stearns Cos ............................... 14,025
50 Centura Banks Inc. ............................. 2,814
1,750 Chase Manhattan Corp. .......................... 151,594
2,900 Citigroup Inc. ................................. 137,750
600 City National Corp. ............................ 22,463
900 Comerica Inc. .................................. 53,494
75 Commercial Federal Corp. ....................... 1,739
1,100 Conseco Inc. ................................... 33,481
100 Cullen/Frost Bankers Inc. ...................... 2,756
76 +Delphi Financial Group ......................... 2,727
750 Dime Bancorp Inc. .............................. 15,094
250 +Equifax, Inc. .................................. 8,922
1,425 Federal National Mortgage Association .......... 97,434
181 Fidelity National Financial Inc. ............... 3,801
100 Finova Group Inc. .............................. 5,263
200 First American Financial Corp. ................. 3,575
700 First Tennessee National ....................... 26,819
200 FirstMerit Corp. ............................... 5,613
1,000 Fleet Financial Group .......................... 44,375
100 Franchise Finance Corp. of America ............. 2,200
55 Frontier Insurance ............................. 845
575 Hartford Financial Services Group .............. 33,530
150 Hilb, Rogal, and Hamilton Co. .................. 3,356
1,350 Household International Inc. ................... 63,956
175 +Hudson United Bancorp. ......................... 5,359
100 JSB Financial Corp. ............................ 5,088
1,050 Keycorp New .................................... 33,731
100 Keystone Financial Inc. ........................ 2,956
132 Legg Mason Inc. ................................ 5,082
250 MAF BanCorp. ................................... 6,063
300 Metris Cos. .................................... 12,225
975 Morgan Stanley Dean Witter ..................... 99,938
75 Mutual Risk Management ......................... 2,503
900 North Fork Bancorporation ...................... 19,181
368 Old Kent Financial ............................. 15,389
200 The PMI Group Inc. ............................. 12,563
1,200 PNC Bank ....................................... 69,150
50 +Radian Group ................................... 2,441
225 Raymond James Financial ........................ 5,386
100 St Paul BanCorp. ............................... 2,550
850 +Travelers Property Casualty Cl A ............... 33,256
100 Trenwick Group Inc. ............................ 2,466
200 T. Rowe Price Associates Inc. .................. 7,675
250 UST Corp. ...................................... 7,563
50 US Trust Corp. ................................. 4,625
----------
1,412,047
----------
HEALTH CARE (5.5%)
2,500 Abbott Laboratories ............................ 113,750
175 Alpharma Inc. Cl A ............................. 6,223
400 +Amerisource Health ............................. 10,200
450 +Amgen Inc. ..................................... 27,394
275 Bard (CR) Inc. ................................. 13,148
550 Baxter International ........................... 33,344
700 Bergen Brunswig Corp. .......................... 12,075
400 +Biogen Inc. .................................... 25,725
2,250 Bristol-Myers Squibb ........................... 158,484
550 DENTSPLY International ......................... 15,400
700 Eli Lilly & Co. ................................ 50,137
100 +Express Scripts Inc. Cl A ...................... 6,019
550 +Guidant Corp. .................................. 28,290
108 Integrated Health Services Inc. ................ 864
825 Johnson & Johnson .............................. 80,850
50 Magellan Health Services Inc. .................. 500
325 +Medimmune Inc. ................................. 22,019
100 Mentor Corp. ................................... 1,862
2,400 Merck & Co. Inc. ............................... 177,600
650 Mylan Labs ..................................... 17,225
100 Orthodontic Centers of America ................. 1,412
See notes to financial statements Page 7
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW MEDIUM-TERM RETIREMENT FUND (CONTINUED)
150 Owens & Minor Inc. ............................. $1,650
200 +Pacificare Health Service ...................... 14,387
100 Respironics Inc. ............................... 1,512
225 +Roberts Pharmaceuticals ........................ 5,456
100 Safeskin Corp. ................................. 1,200
1,100 Schering-Plough Corp. .......................... 58,300
100 Sola International Inc. ........................ 1,944
100 +Visx Inc. ...................................... 7,919
1,100 +Wellpoint Health Networks ...................... 93,363
----------
988,252
----------
INDUSTRIAL (3.1%)
750 Gencorp Inc. ................................... 18,936
2,475 General Electric ............................... 279,675
875 Ingersoll Rand Co. ............................. 56,547
1,250 Johnson Controls ............................... 86,640
1,900 Milacron Inc. .................................. 35,150
50 SPS Technologies Inc. .......................... 1,875
300 +Waters Corp. ................................... 15,938
1,400 York International Corp. ....................... 59,937
----------
554,698
----------
INDUSTRIAL SERVICE (0.1%)
425 +Waste Management ............................... 22,844
----------
REAL ESTATE INVESTMENT TRUST
(REIT) (0.2%) ..................................
100 Federal Realty Investment Trust ................ 2,294
100 Felcor Lodging Trust Inc. REIT ................. 2,075
100 General Growth Properties ...................... 3,550
150 Glenborough Realty Trust Inc. .................. 2,625
100 Health Care Property Investors ................. 2,887
100 Highwood Properties Inc. ....................... 2,744
100 Indymac Mortgage Holdings ...................... 1,600
100 Liberty Property Trust ......................... 2,487
100 Mack-Cali Realty Corp. ......................... 3,093
200 Smith Charles Residential ...................... 6,787
100 Storage USA .................................... 3,187
----------
33,329
----------
RETAIL (3.5%)
500 Abercrombie & Fitch ............................ 24,000
400 +Best Buy Co. ................................... 27,000
250 Caseys General Store ........................... 3,750
200 Cash America International ..................... 2,575
900 Dayton Hudson Corp. ............................ 58,500
1,675 Dillards International - Cl A .................. 58,834
350 Dress Barn Inc. ................................ 5,600
175 +Footstar Inc. .................................. 6,508
1,463 Gap, Inc. ...................................... 73,673
175 +The Men's Wearhouse ............................ 4,463
925 +Office Max Inc. ................................ 11,100
175 +Payless Shoesource ............................. 9,362
500 Pier 1 Imports Inc. ............................ 5,625
3,250 Supervalu Inc. ................................. 83,484
1,800 TJX Cos Inc. ................................... 59,962
2,350 +Toys R Us ...................................... 48,616
2,300 Wal-Mart Stores Inc. ........................... 110,975
100 Williams Sonoma ................................ 3,481
475 +Zale Corp. ..................................... 19,000
----------
616,508
----------
TECHNOLOGY (11.5%)
100 Acxiom Corp. ................................... 2,492
300 +Adaptive Broadband ............................. 6,563
700 Adobe Systems Inc. ............................. 57,509
500 +Altera Corp. ................................... 18,406
800 +American Management Systems .................... 6,413
400 Anixter International .......................... 7,300
1,925 +Apple Computer Inc. ............................ 89,152
100 Aspect Telecommunications ...................... 975
150 +C-Cube Microsystems ............................ 4,753
275 +Ciber Inc. ..................................... 5,259
1,300 +Cisco Systems .................................. 83,850
200 +Citrix System .................................. 11,300
100 Cognex Corp. ................................... 3,156
775 Computer Associates International Inc. ......... 42,625
325 Computer Task Group ............................ 5,525
3,200 +Compuware Corp. ................................ 101,800
262 +Comverse Technology ............................ 19,781
475 Corning Inc. ................................... 33,309
1,000 +Cypress Semiconductor .......................... 16,500
750 Dallas Semiconductors .......................... 37,875
175 Dialogic Corp. ................................. 7,678
425 +Filenet Corp. .................................. 4,861
1,150 +Galileo International, Inc. .................... 61,453
500 Geotek Communication ........................... 13
650 Gerber Scientific Inc. ......................... 14,341
350 GTECH Holding Corp. ............................ 8,247
300 Harris Corp. ................................... 11,756
550 Honeywell Inc. ................................. 63,731
3,000 Intel Corp. .................................... 178,500
2,100 International Business Machines Corp. .......... 271,425
275 +Intervoice Inc. ................................ 3,970
450 Kemet Corp. .................................... 10,322
675 +LSI Logic Corp. ................................ 31,134
2,200 +Lexmark Holdings Cl A .......................... 145,338
1,675 Lucent Technologies ............................ 112,958
3,000 +Microsoft Corp. ................................ 270,563
200 Microchip Technology Inc. ...................... 9,475
600 +Midway Games Inc. .............................. 7,763
Page 8 See notes to financial statements
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW MEDIUM-TERM RETIREMENT FUND (CONTINUED)
300 Nashua Corp. ................................... $2,962
150 +Novellus Systems Inc. .......................... 10,237
100 Read - Rite Corp. .............................. 620
375 +SCI Systems .................................... 17,812
550 +S3 Incorporated ................................ 5,002
100 Sanmina Corp. .................................. 7,587
425 +Sterling Software Inc. ......................... 11,342
325 +Sungard Data System ............................ 11,212
200 +Synopsys Inc. .................................. 11,037
150 Technitrol Inc. ................................ 4,838
2,067 United Technologies ............................ 148,175
50 Vantive Corp. .................................. 572
150 +Veritas Software ............................... 14,241
550 +Xilinx Inc. .................................... 31,488
175 +Xircom ......................................... 5,261
----------
2,050,457
----------
TELECOMMUNICATIONS (4.2%)
1,050 Ameritech Corp. ................................ 77,175
1,800 AT & T Corp. ................................... 100,463
2,050 Bell Atlantic Corp. ............................ 134,019
1,000 BellSouth Corp. ................................ 46,875
300 General Communication .......................... 2,039
1,575 GTE Corporation ................................ 119,306
1,125 +MCI Worldcom Inc. .............................. 96,820
1,300 +MediaOne Group Inc. ............................ 96,687
1,050 US West Inc. ................................... 61,687
300 Voicestream Wireless ........................... 8,531
300 +Western Wireless Corp. ......................... 8,100
----------
751,702
----------
TRANSPORTATION (0.5%)
200 Airborne Freight Corp. ......................... 5,537
425 +Alaska Air Group ............................... 17,744
262 Comair Holdings Inc. ........................... 5,453
1,050 Delta Air Lines, Inc. .......................... 60,506
400 Yellow Corp. ................................... 7,100
----------
96,340
----------
UTILITIES (1.9%)
3,100 Allegheny Energy Inc. .......................... 99,393
700 Connectiv Inc. ................................. 17,106
300 DTE Energy Co. ................................. 12,000
625 Easterns Utilities ............................. 18,203
700 Energy East Corp. .............................. 18,200
550 Florida Progress Co. ........................... 22,722
1,000 FPL Group Inc. ................................. 54,625
550 GPU Inc. ....................................... 23,203
900 MCN Energy Group Inc. .......................... 18,675
100 +Midamerican Energy ............................. 3,462
350 Northwest Natural Gas Co. ...................... 8,444
450 Pinnacle West Capital .......................... 18,112
700 Santa Fe Snyder Corp. .......................... 5,337
600 Utilicorp United Inc. .......................... 14,588
----------
334,070
----------
TOTAL COMMON STOCKS
(Cost $7,989,323) .......................... 9,347,068
----------
OPEN END INVESTMENT COMPANY (5.4%)
(Cost $730,810)
71,633 BT EAFE Equity Index Fund ...................... 957,733
----------
UNIT INVESTMENT TRUST (0.1%)
(Cost $15,805)
164 Standard & Poors Depositary Receipt ............ 22,468
----------
PRINCIPAL
AMOUNT
- ------
U.S. GOVERNMENT OBLIGATIONS (30.8%)
U.S. TREASURY BOND (0.1%)
$125,000 Zero Coupon Due 5/15/17 ........................ 19,445
----------
U.S. TREASURY NOTES (21.8%)
120,000 4.750% Due 11/15/08 ............................ 110,194
40,000 5.250% Due 8/15/03 ............................. 39,319
125,000 5.250% Due 11/15/28 ............................ 115,233
1,360,000 5.500% Due 5/15/09 ............................. 1,328,543
200,000 5.625% Due 5/15/08 ............................. 195,906
1,860,000 6.125% Due 12/31/01 ............................ 1,882,376
105,000 6.500% Due 5/31/01 ............................. 106,838
100,000 6.500% Due 8/15/05 ............................. 103,078
----------
3,881,487
----------
FEDERAL AGENCY AND GOVERNMENT (8.9%)
210,000 Federal National Mortgage Association
0.000% Due 7/20/99 ......................... 807,922
380,000 Federal National Mortgage Association
5.625% Due 5/14/04 ......................... 368,243
300,000 Federal National Mortgage Association
5.750% Due 2/15/08 ......................... 286,827
135,000 Federal National Mortgage Association
6.500% Due 4/29/09 ......................... 130,549
----------
1,593,541
----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $5,567,882) .......................... 5,494,473
----------
CORPORATE DEBENTURES (13.1%)
BANKS (1.1%)
200,000 Dresdner Funding Trust 144A
8.151% Due 6/30/31 (A) ..................... 191,575
----------
See notes to financial statements Page 9
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
PRINCIPAL
AMOUNT SECURITY VALUE
- --------- -------- -----
TOMORROW MEDIUM-TERM RETIREMENT FUND (CONTINUED)
FINANCE (7.2%)
$150,000 American General Finance 5.750% Due 11/1/03 .... $145,350
200,000 Citicorp 7.250% Due 9/1/08 ..................... 202,146
110,000 Fidelity Investment 144A 7.570% Due 6/15/29 (A) 109,514
200,000 GMAC Medium Term Note 5.375% Due 9/30/02 ....... 193,514
140,000 Merrill Lynch & Co. 5.870% Due 11/15/01 ........ 138,769
150,000 Merrill Lynch & Co. 6.875% Due 11/15/18 ........ 140,486
200,000 Morgan Stanley Dean Witter 5.940% Due 2/28/00 .. 200,106
150,000 Salomon Inc. 7.300% Due 5/15/02 ................ 153,566
----------
1,283,451
----------
INDUSTRIAL (4.8%)
210,000 AT & T Corp. 6.500% Due 3/15/29 ................ 189,513
170,000 Dillards Inc. 6.310% Due 8/1/02 ................ 168,477
160,000 Embotelladora Andina 7.875% Due 10/1/2097 ...... 121,146
100,000 Enersis SA 7.4% 7.400% Due 12/1/16 ............. 85,937
185,000 Laidlaw Inc. 7.650% Due 5/15/06 ................ 180,210
150,000 Murphy Oil Corp. 7.050% Due 5/1/29 ............. 106,838
----------
852,121
----------
TOTAL CORPORATE DEBENTURES
(Cost $2,186,337) .......................... 2,327,147
----------
ASSET BACKED SECURITIES (0.9%)
(Cost $163,180)
155,000 MBNA Master Credit Card 6.450% Due 2/15/08 ..... 154,630
----------
TOTAL INVESTMENTS (102.7%)
(Cost $16,653,337) ......................... 18,303,519
LIABILITIES IN EXCESS OF OTHER ASSETS (-2.7%) .. (477,587)
----------
TOTAL ASSETS (100.0%) .......................... $17,825,932
===========
+ Non-income producing security.
(A) SEC Rule 144A Security. Such security has limited markets and is traded
among qualified institutional buyers.
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW SHORT-TERM RETIREMENT FUND
COMMON STOCKS (33.1%)
BASIC MATERIALS (1.3%)
2,050 +AK Steel Holding Corp. ......................... $46,125
3,450 Boise Cascade Corp. ............................ 147,919
2,350 +Cytec Industries Inc. .......................... 74,906
1,300 du Pont E I de Nemours & Co. ................... 88,806
3,450 IMC Global Inc. ................................ 60,806
----------
418,562
----------
COMMERCIAL SERVICES (0.2%)
2,550 Viad Corp. ..................................... 78,891
----------
CONSUMER CYCLICALS (1.0%)
2,800 Brunswick Corp. ................................ 78,050
3,550 Ford Motor Co. ................................. 200,353
2,300 Sara Lee ....................................... 52,181
----------
330,584
----------
CONSUMER NON CYCLICALS (2.3%)
1,200 Anheuser-Busch Cos. Inc. ....................... 85,125
1,250 Coca Cola Co. .................................. 78,125
1,300 +Fortune Brands ................................. 53,787
1,650 General Mills Inc. ............................. 132,619
2,400 Philip Morris Cos. Inc. ........................ 96,450
1,950 Premark International .......................... 73,125
1,450 Proctor & Gamble Co. ........................... 129,412
1,700 Quaker Oats .................................... 112,838
----------
761,481
----------
CONSUMER SERVICES (0.8%)
4,050 Darden Restaurants Inc. ........................ 88,341
1,900 Donnelley RR & Sons ............................ 70,420
3,100 Foodmaker Inc. ................................. 87,963
----------
246,724
----------
ENERGY (1.8%)
2,650 Exxon Corp. .................................... 204,381
3,650 Royal Dutch Petroleum ADR ...................... 219,913
1,800 Transocean Offshore ............................ 47,250
3,100 +Union Pacific Resources Group. ................. 50,569
2,150 +USX - Marathon Group New ....................... 70,009
----------
592,122
----------
FINANCE (5.0%)
1,150 AMBAC Inc. ..................................... 65,694
450 American General Corp. ......................... 33,919
1,200 American International Group ................... 140,475
2,600 BankBoston Corp. ............................... 132,925
2,900 Chase Manhattan Corp. .......................... 251,213
4,150 Citigroup Inc. ................................. 197,125
Page 10
See notes to financial statements
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW SHORT-TERM RETIREMENT FUND (CONTINUED)
1,000 Comerica Inc. .................................. $59,438
2,000 Federal National Mortgage Association .......... 136,750
1,650 Fleet Financial Group Inc. ..................... 73,219
950 Hartford Financial Services Group .............. 55,397
2,100 Household International Inc. ................... 99,488
1,500 Keycorp ........................................ 48,188
1,500 Morgan St Dean Witter & Co. .................... 153,750
2,500 PNC Bank ....................................... 144,063
1,250 +Travelers Property Casualty Cl A ............... 48,906
----------
1,640,550
----------
HEALTH CARE (3.6%)
3,250 Abbott Laboratories ............................ 147,875
800 Baxter International ........................... 48,500
3,500 Bristol-Myers Squibb Co. ....................... 246,531
1,150 Eli Lilly & Co. ................................ 82,369
1,050 Guidant Corp. .................................. 54,009
1,350 Johnson & Johnson Co. .......................... 132,300
2,350 Merck & Co. Inc. ............................... 173,900
950 +Pacificare Health Source ....................... 68,341
4,500 Schering-Plough Corp. .......................... 238,500
----------
1,192,325
----------
INDUSTRIAL (2.6%)
900 Cummins Engine Inc. ............................ 51,412
3,750 General Electric ............................... 423,750
1,400 Ingersoll Rand Co. ............................. 90,475
1,750 Johnson Controls ............................... 121,297
850 +Litton Industries .............................. 60,987
2,350 Milacron Inc. .................................. 43,475
1,250 York International ............................. 53,516
----------
844,912
----------
RETAIL (2.2%)
500 Dayton Hudson Corp. ............................ 32,500
1,100 Dillards International - Cl A .................. 38,638
1,850 +Federated Department Stores .................... 97,934
2,050 Gap Inc. ....................................... 103,269
1,650 Home Depot Inc. ................................ 106,322
3,650 Supervalu Inc. ................................. 93,759
3,400 +Toys R Us ...................................... 70,337
3,350 Wal-Mart Stores Inc. ........................... 161,637
----------
704,396
----------
TECHNOLOGY (7.4%)
1,600 Adobe Systems 131,450
2,350 +Apple Computer Inc. 108,834
2,150 +Cisco Systems 138,675
1,200 Computer Associates International Inc. 66,000
3,450 +Compuware Corp. 109,753
750 Corning Inc. 52,594
1,650 +Galileo International, Inc. 88,172
600 Honeywell Inc. 69,525
4,700 Intel Corp. 279,650
3,200 International Business Machines Corp. 413,600
1,050 +LSI Logic Corp. 48,431
2,900 +Lexmark Holdings Cl A 191,581
2,650 Lucent Technologies 178,709
4,350 +Microsoft Corp. 392,316
2,250 United Technologies 161,297
----------
2,430,587
----------
TELECOMMUNICATION (3.6%)
5,050 AT&T Corp. ..................................... 281,853
1,650 Ameritech Corp. ................................ 121,275
3,100 Bell Atlantic Corp. ............................ 202,662
1,900 Bellsouth Corp. ................................ 89,062
1,850 MCI Worldcom Inc. .............................. 159,216
1,600 +MediaOne Group Inc. ............................ 119,000
1,500 +Nextel Communications Inc. ..................... 75,281
800 Time Warner Inc. ............................... 58,800
1,050 US West Inc. ................................... 61,687
----------
1,168,836
----------
TRANSPORTATION (0.3%)
1,750 Delta Air Lines Inc. ........................... 100,844
----------
UTILITY (1.0%)
1,950 Coastal Corp. 78,000
2,350 Constellation Energy Group 69,619
3,300 FPL Group Inc. 180,262
----------
327,881
----------
TOTAL COMMON STOCK
(Cost $9,045,506) .......................... 10,838,695
----------
PRINCIPAL
AMOUNT
- ------
U.S. GOVERNMENT OBLIGATIONS AND
AGENCY NOTES (30.7%)
U.S. TREASURY BOND (0.2%)
$210,000 Zero Coupon Due 5/15/17 ........................ 68,057
----------
U.S. TREASURY NOTES (26.4%)
520,000 5.250% Due 8/15/03 ............................. 511,144
4,785,000 5.500% Due 5/15/09 ............................. 4,674,323
Page 11
See notes to financial statements
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
PRINCIPAL
AMOUNT SECURITY VALUE
- --------- -------- -----
TOMORROW SHORT-TERM RETIREMENT FUND (CONTINUED)
$ 465,000 5.625% Due 5/15/08 ............................. $ 455,482
1,410,000 6.125% Due 12/31/01 ............................ 1,426,962
160,000 6.125% Due 8/15/07 ............................. 161,725
1,360,000 6.500% Due 8/15/05 ............................. 1,401,861
----------
8,631,497
----------
U. S. GOVERNMENT AGENCIES (4.1%)
190,000 Federal National Mortgage Association
5.250% Due 1/15/09 ......................... 173,554
290,000 Federal National Mortgage Association
5.625% Due 5/14/04 ......................... 281,027
515,000 Federal National Mortgage Association
5.750% Due 2/15/08 ......................... 492,386
400,000 Federal National Mortgage Association
6.500% Due 4/29/09 ......................... 386,812
----------
1,333,779
----------
TOTAL U.S. GOVERNMENT OBLIGATIONS & AGENCY NOTES
(Cost $10,153,509) ......................... 10,033,333
-----------
CORPORATE DEBENTURES (33.6%)
BANKS (1.8%)
600,000 Dresdner Funding Trust 144A (B)
8.151% Due 6/30/31 ......................... 574,726
-----------
CONSUMER NON CYCLICALS (0.7%)
230,000 McKesson Corp. 6.600% Due 3/1/00 ............... 230,927
-----------
FINANCE (21.7%)
70,000 Associates Corp. NA 7.520% Due 3/1/00 .......... 70,772
400,000 Associates Corp. NA 6.500% Due 10/15/02 ....... 401,624
235,000 Bear Stearns Companies Inc. 6.500% Due 7/5/00 .. 235,529
205,000 Beneficial Corp. 8.170% Due 11/9/99 ............ 206,755
160,000 Beneficial Corp. 6.250% Due 2/18/03 ............ 157,722
510,000 Commercial Credit 8.250% Due 11/1/01 ........... 531,537
400,000 Fidelity Investments 144A 7.570% Due 6/15/29 (B) 398,234
225,000 First Union Corp. 6.600% Due 6/15/00 ........... 226,249
50,000 Ford Motor Credit 6.125% Due 1/9/06 ............ 48,055
520,000 Ford Motor Credit 6.570% Due 3/19/01 ........... 522,491
200,000 G.E. Capital Corp. 8.750% Due 5/21/07 .......... 226,764
450,000 General Motors Acceptance Corp.
5.750% Due 11/10/03 ........................ 435,393
480,000 MBNA Master Credit Card Trust 6.450% Due 2/15/08 478,800
285,000 Merrill Lynch & Co. 5.870% Due 11/15/01 ........ 282,495
275,000 Merrill Lynch & Co. 6.620% Due 6/13/00 ......... 276,727
500,000 Merrill Lynch & Co. 6.875% Due 11/15/18 ........ 468,287
400,000 Morgan Stanley Dean Witter 6.090% Due 3/9/11 ... 398,416
550,000 Norwest Financial Inc. 5.375% Due 9/30/03 ...... 527,824
215,000 Salomon Inc. 6.700% Due 7/5/00 ................. 216,423
860,000 Salomon Inc. 7.300% Due 5/15/02 ................ 880,442
120,000 USL Capital Corp.6.500% Due 12/1/03 ............ 119,124
-----------
7,109,663
-----------
INDUSTRIAl (8.7%)
600,000 AT & T Corp. 6.500% Due 3/15/29 ................ 541,464
500,000 Dillards Inc. 6.310% Due 8/1/02 ................ 495,520
90,000 du Pont E I de Nemours & Co. 8.750% Due 1/12/01 93,463
500,000 Embotelladora Andina SA 7.875% Due 10/1/2097 ... 378,580
450,000 Enersis SA 7.400% Due 12/1/16 .................. 386,716
525,000 Laidlaw Inc. 7.650% 5/15/06 .................... 511,408
450,000 Murphy Oil Corp. 7.050% Due 5/1/29 ............. 424,085
-----------
2,831,236
-----------
REAL ESTATE INVESTMENT TRUST (REIT) (0.7%)
235,000 Carramerica Realty Corp. 6.625% Due 10/1/00 .... 233,325
-----------
TOTAL CORPORATE DEBENTURES
(Cost $11,192,244) ......................... 10,979,877
-----------
Page 12
See notes to financial statements
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT JUNE 30, 1999 - (UNAUDITED)
PRINCIPAL
AMOUNT SECURITY VALUE
- --------- -------- -----
TOMORROW SHORT-TERM RETIREMENT FUND (CONTINUED)
DISCOUNT NOTES (7.7%)
$2,540,000 Federal National Mortgage Association
0.000% Due 7/20/99
(Cost $2,533,485) .......................... $2,533,485
-----------
TOTAL INVESTMENTS (105.1%)
(Cost $32,924,744) ......................... 34,385,390
LIABILITIES IN EXCESS OF OTHER ASSETS (-5.1%) .. (1,669,618)
-----------
TOTAL NET ASSETS (100%) ........................ $32,715,772
===========
<FN>
+ Non-income producing security.
(A)SEC Rule 144A Security. Such security has limited markets and is
traded among qualified institutional buyers.
</FN>
</TABLE>
Page 13
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES AT JUNE 30, 1999 - (UNAUDITED)
<TABLE>
<CAPTION>
LONG- MEDIUM- SHORT-
TERM TERM TERM
RETIREMENT RETIREMENT RETIREMENT
---------- ---------- ----------
ASSETS
<S> <C> <C> <C>
Investments at value # ............................. $ 9,598,512 $ 18,303,519 $ 34,385,390
Cash ............................................... 132,788 225,817 527,638
Receivable for securities sold ..................... 0 406,950 1,251,800
Receivable for Fund shares sold .................... 2,569 2,200 272
Receivable from Adviser ............................ 3,426 0 0
Dividends and interest receivable .................. 22,317 69,594 259,207
Deferred organizational costs and prepaid expenses . 15,337 15,745 15,939
------------ ------------ ------------
9,774,949 19,023,825 36,440,246
------------ ------------ ------------
LIABILITIES
Payable for Management Fees - (Note 5) ............. 0 4,799 19,957
Payable for investment securities purchased ........ 156,548 1,162,545 3,664,299
Accrued distribution fees payable (Adviser Shares) . 4,326 8,604 10,029
Accrued service fees payable (Institutional Shares) 414 823 2,828
Other accrued expenses ............................. 23,238 21,122 27,361
------------ ------------ ------------
184,526 1,197,893 3,724,474
------------ ------------ ------------
NET ASSETS ......................... $ 9,590,423 $ 17,825,932 $ 32,715,772
============ ============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest (par $0.001) ......... $ 997 $ 1,802 $ 3,060
Paid-in surplus .................................... 7,840,866 15,308,749 29,744,385
Accumulated undistributed net investment income .... 49,238 183,901 538,802
Undistributed realized gains on investments ........ 602,370 681,298 968,879
Net unrealized appreciation on investments ......... 1,096,952 1,650,182 1,460,646
------------ ------------ ------------
NET ASSETS ......................... $ 9,590,423 $ 17,825,932 $ 32,715,772
============ ============ ============
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE:
ADVISER SHARES:
Net Assets ......................................... $ 7,716,285 $ 15,195,330 $ 15,860,362
Shares of beneficial interest issued and outstanding 804,773 1,530,498 1,488,128
------------ ------------ ------------
Net asset value per share .......................... $ 9.59 $ 9.93 $ 10.66
============ ============ ============
INSTITUTIONAL SHARES:
Net Assets ......................................... $ 1,874,138 $ 2,630,602 $ 16,855,410
Shares of beneficial interest issued and outstanding 192,210 271,435 1,571,467
------------ ------------ ------------
Net asset value per share .......................... $ 9.75 $ 9.69 $ 10.73
============ ============ ============
# Investments at cost .............................. 8,501,560 16,653,337 32,924,744
UNREALIZED APPRECIATION/(DEPRECIATION): *
Gross appreciation ......................... 1,394,167 2,061,106 1,969,810
Gross depreciation ......................... (297,215) (410,924) (509,164)
------------ ------------ ------------
NET UNREALIZED APPRECIATION ........................ 1,096,952 1,650,182 1,460,646
============ ============ ============
<FN>
* Based on cost of securities for Federal Income tax purposes which does not
differ from book cost.
</FN>
</TABLE>
Page 14 See notes to financial statements
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1999 - (UNAUDITED)
<TABLE>
<CAPTION>
LONG-TERM MEDIUM-TERM SHORT-TERM
RETIREMENT RETIREMENT RETIREMENT
---------- ---------- ----------
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends .............................................. $ 43,924 $ 62,920 $ 80,133
Interest ............................................... 64,397 220,303 675,124
--------- --------- ---------
108,321 283,223 755,257
--------- --------- ---------
EXPENSES:
Investment advisory fees - (Note 5) .................... 34,440 64,029 124,924
Fund accounting fees ................................... 21,120 23,810 24,808
Registration fees and expenses ......................... 8,469 8,007 11,475
Professional fees ...................................... 13,537 13,495 18,712
Transfer agent fees and expenses
(Adviser Class) ................................ 12,182 12,089 12,484
Transfer agent fees and expenses
(Institutional Class) .......................... 12,384 12,249 12,611
Distribution fees (Adviser Shares) - (Note 5) .......... 18,682 36,724 42,101
Custodian fees and expenses ............................ 5,886 4,203 7,678
Amortization of organization costs ..................... 4,708 4,701 4,701
Shareholders' reports .................................. 42 770 1,570
Trustees' fees and expenses ............................ 3,720 3,805 3,841
Administration fees - (Note 5) ......................... 4,133 7,684 14,990
Service fees (Institutional Shares) - (Note 5) ......... 326 601 17,020
Other expenses ......................................... 1,521 1,563 2,413
--------- --------- ---------
TOTAL EXPENSES ......................................... 141,150 193,730 299,328
Less fees waived by Adviser and
Administrator - (Note 5) ....................... (38,574) (46,739) (28,885)
Less expenses reimbursed
by adviser - (Note 5) .......................... (23,829) 0 0
Less expenses paid indirectly - (Note 7) .............. (2,341) (2,929) (3,028)
--------- --------- ---------
NET EXPENSES ........................................... 76,406 144,062 267,415
--------- --------- ---------
NET INVESTMENT INCOME .................................. 31,915 139,161 487,842
--------- --------- ---------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments ............... 574,821 604,427 918,373
Change in unrealized appreciation on investments (96,149) (272,925) (832,438)
--------- --------- ---------
NET GAIN ON INVESTMENTS ................................ 478,672 331,502 85,935
--------- --------- ---------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................ $ 510,587 $ 470,663 $ 573,777
========= ========= =========
</TABLE>
See notes to financial statements
Page 15
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LONG-TERM MEDIUM-TERM SHORT-TERM
RETIREMENT RETIREMENT RETIREMENT
SIX SIX SIX
MONTHS YEAR MONTHS YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
6/30/99* 12/31/98 6/30/99* 12/31/98 6/30/99* 12/31/98
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income ......................$ 31,915 $ 93,857 $ 139,161 $ 303,595 $ 487,842 $ 881,606
Net realized gain
on investments and futures ......... 574,821 75,545 604,427 764,785 918,373 675,315
Change in unrealized
appreciation/(depreciation) on
investments and futures ........... (96,149) 874,375 (272,925) 1,147,490 (832,438) 1,647,460
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .......... 510,587 1,043,777 470,663 2,215,870 573,777 3,204,381
----------- ----------- ----------- ----------- ----------- -----------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Adviser Shares ..................... 0 (54,368) 0 (212,159) 0 (403,730)
Institutional Shares ............... 0 (16,152) 0 (40,769) 0 (438,476)
----------- ----------- ----------- ----------- ----------- -----------
TOTAL DIVIDENDS TO SHAREHOLDERS FROM NET
INVESTMENT INCOME .................. 0 (70,520) 0 (252,928) 0 (842,206)
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
FROM NET REALIZED GAINS:
Adviser Shares ..................... 0 (38,834) 0 (594,045) 0 (341,618)
Institutional Shares ............... 0 (8,974) 0 (95,128) 0 (321,549)
----------- ----------- ----------- ----------- ----------- -----------
TOTAL DISTRIBUTIONS FROM NET
REALIZED GAINS ..................... 0 (47,808) 0 (689,173) 0 (663,167)
----------- ----------- ----------- ----------- ----------- -----------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST:
Received on issuance:
Shares sold ........................ 1,969,070 5,150,936 2,477,903 5,725,284 3,816,345 24,857,758
Shares issued in reinvestment
of dividends and distributions ... 0 118,328 0 942,101 0 1,505,372
Shares redeemed .................... (1,727,046) (2,639,065) (2,015,575) (4,700,383) (4,939,080) (10,406,723)
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE/(DECREASE) FROM
CAPITAL SHARE TRANSACTIONS ......... 242,024 2,630,199 462,328 1,967,002 (1,122,735) 15,956,407
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCREASE/(DECREASE) IN NET ASSETS .... 752,611 3,555,648 932,991 3,240,771 (548,958) 17,655,415
NET ASSETS:................................. 752,611 3,555,648 932,991 3,240,771 (548,958) 17,655,415
Beginning of period ........................ 8,837,812 5,282,164 16,892,941 13,652,170 33,264,730 15,609,315
----------- ----------- ----------- ----------- ----------- -----------
End of period period + .....................$ 9,590,423 $ 8,837,812 $17,825,932 $16,892,941 $32,715,772 $ 33,264,730
=========== =========== =========== =========== ===========
+ Includes undistributed
net investment income ....................$ 49,238 $ 17,323 $ 183,901 $ 44,740 $ 538,802 $ 50,960
=========== =========== =========== =========== =========== ============
<FN>
* Unaudited
</FN>
</TABLE>
Page 16 See notes to financial statements
<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") and Tomorrow Short-Term
Retirement Fund ("Short-Term 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 Long-Term Fund,
Medium-Term Fund and Short-Term 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 Adviser Shares on March 7, 1996 and
Institutional Shares on April 2, 1996.
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, economic and currency exchange developments including restrictions
and changes in foreign law.
Page 17
<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
identification 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, 1999, 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 net realized
gains are declared and paid by December 31 of the year in which they are earned.
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
$141,000 ($47,000 each for the Long-Term, Medium-Term and Short-Term 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 18
<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. For the six months ended June 30, 1999, WPG
voluntarily agreed not to impose its entire advisory fee applicable to the
Long-Term Fund, and waived $46,739, and $28,885 from the Medium-Term Fund and
Short-Term Fund, respectively.
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 1.75% of the
average daily net assets for the Adviser Class Shares and 1.50% of the average
daily net assets for the Institutional class shares. 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 entire administration
services fee applicable to the Funds for the six months ended June 30, 1999.
The Trust with respect to the Adviser Class of each Fund has adopted a
Distribution Plan pursuant to Rule 12b-1 under the Act. Under the Distribution
Plan, each Fund pays distribution and service fees at an aggregate annual rate
of up to 0.50% of the daily average net assets attributable to the Adviser Class
Shares. Up to 0.25% of this fee is for service fees and is intended to be
compensation for personnel services and/or account maintenance services. The
remaining amount is for distribution fees and is intended to compensate WPG for
its services and expenses associated with serving as principal underwriter of
the Adviser Class. These payments are borne solely by the Adviser Class Shares.
For the six months ended June 30, 1999 payments pursuant to the Distribution
Plan from the Long-Term Fund, Medium-Term Fund and Short-Term Fund amounted to
$18,682, 36,724 and $42,101, respectively. Of these amounts, WPG earned $8,687,
$17,195 and $19,948, respectively.
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 monthly 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.
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, 1999 were
as follows:
PROCEEDS COST OF COMMISSION
OF SECURITIES SECURITIES TOTAL RECEIVED
SOLD PURCHASED COMMISSIONS BY WPG
---- --------- ----------- ------
Long-Term $ 5,123,086 $ 5,830,773 $5,779 $4,894
Medium-Term 17,495,570 18,384,849 7,785 6,367
Short-Term 48,432,439 50,585,101 9,827 7,399
Page 19
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS - (UNAUDITED) - CONTINUED
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, 1999 were as follows:
CUSTODIAN FEE OFFSET CREDIT
------------- -------------
Long-Term $5,886 $2,341
Medium-Term 4,203 2,929
Short-Term 7,678 3,028
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
8. CAPITAL SHARE TRANSACTIONS
Transaction in shares of the Funds are summarized below:
<TABLE>
<CAPTION>
LONG-TERM
SIX MONTHS ENDED
JUNE 30, 1999 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998
----------- -----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
ADVISER CLASS SHARES
<S> <C> <C> <C> <C>
Sold ............................. 177,956 $ 1,602,754 499,807 $ 4,212,181
Reinvested from dividends
and distributions ........ -- -- 10,519 93,202
Redeemed ......................... (158,677) (1,448,504) (250,398) (2,085,866)
-------- ----------- -------- -----------
Net increase - Adviser Class ..... 19,279 $ 154,250 259,928 $ 2,219,517
-------- ----------- -------- -----------
Institutional Class Shares
Sold ............................. 39,954 366,347 110,457 $ 938,755
Reinvested from dividends
and distributions ........ -- -- 2,795 25,126
Redeemed ......................... (30,465) (278,542) (65,357) (553,199)
-------- ----------- -------- -----------
Net increase - Institutional Class 9,489 $ 87,805 47,895 $ 410,682
-------- ----------- -------- -----------
Net increase in Fund ............. 28,768 $ 242,055 307,823 $ 2,630,199
-------- ----------- -------- -----------
</TABLE>
Page 20
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS - (UNAUDITED) - CONTINUED
MEDIUM-TERM
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998
----------- -----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Adviser Class Shares
<S> <C> <C> <C> <C>
Sold ......................................... 186,574 $ 1,761,685 487,640 $ 4,563,226
Reinvested from dividends
and distributions .................... -- -- 84,863 806,203
Redeemed ..................................... (166,416) (1,583,307) (415,935) (3,903,770)
-------- ------------ -------- ------------
Net increase - Adviser Class ................. 20,158 $ 178,378 156,568 $ 1,465,659
-------- ------------ -------- ------------
Institutional Class Shares
Sold ......................................... 76,877 $ 716,218 121,042 $ 1,162,058
Reinvested from dividends
and distributions .................... -- -- 14,692 135,897
Redeemed ..................................... (46,861) (432,268) (87,303) (796,612)
-------- ------------ -------- ------------
Net increase - Institutional Class ........... 30,016 $ 283,950 48,431 $ 501,343
-------- ------------ -------- ------------
Net increase in Fund 50,174 $ 462,328 204,999 $ 1,967,002
-------- ------------ -------- ------------
SHORT-TERM
SIX MONTHS ENDED
JUNE 30, 1999 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998
----------- -----------------
SHARES AMOUNT SHARES AMOUNT
Adviser Class Shares ------ ------ ------ ------
Sold ......................................... 162,299 $ 1,704,127 823,411 $ 8,407,160
Reinvested from dividends
and distributions .................... -- -- 71,806 745,348
Redeemed ..................................... (310,361) (3,276,607) (668,780) (6,895,655)
--------- ------------ --------- ------------
Net increase/(decrease)
- Adviser Class ..................... (148,062) ($ 1,572,480) 226,437 $ 2,256,853
--------- ------------ --------- ------------
Institutional Class Shares
Sold ......................................... 239,155 $ 2,112,218 1,607,353 $ 16,450,598
Reinvested from dividends
and distributions .................... -- -- 72,869 760,024
Redeemed ..................................... (196,409) (1,662,576) (337,168) (3,511,068)
--------- ------------ --------- ------------
Net increase - Institutional ................. 42,746 $ 449,642 1,343,054 $ 13,699,554
--------- ------------ --------- ------------
Net increase/(decrease) in Fund .............. (105,316) ($ 1,122,838) 1,569,491 $ 15,956,407
--------- ------------ --------- ------------
Page 21
</TABLE>
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
FINANCIAL HIGHLIGHTS
$ PER SHARE
<TABLE>
<CAPTION>
NET
NET REALIZED TOTAL DIVID- DISTRI-
ASSET AND INCOME ENDS BUTIONS
VALUE NET UNREAL- FROM NET FROM
AT INVEST IZED INVEST-INVEST-CAPITAL
BEGIN- MEMT GAINS MENT MENT GAINS TOTAL
NING INCOME SECUR- OPERA- INCOME DISTRI-
OF ITIES TIONS TIONS
PERIOD
--------------------------------------------------------
LONG-TERM RETIREMENT
ADVISER SHARES
For the period March 7, 1996*
<S> <C> <C> <C> <C> <C> <C> <C>
through December 31, 1996 $ 6.50 0.04 0.55 0.59 (0.06) (0.05) (0.11)
For the year ended December 31, 1997 6.98 0.09 1.62 1.71 (0.08) (0.63) (0.71)
For the year ended December 31, 1998 7.98 0.10 1.14 1.24 (0.07) (0.05) (0.12)
For the six months ended June 30, 1999 9.10 0.03 0.46 0.49 0.00 0.00 0.00
INSTITUTIONAL SHARES
For the period April 2, 1996*
through December 31, 1996 6.51 0.04 0.55 0.59 0.00 (0.05) (0.05)
For the year ended December 31, 1997 7.05 0.06 1.69 1.75 (0.10) (0.63) (0.73)
For the year ended December 31, 1998 8.07 0.13 1.17 1.30 (0.09) (0.05) (0.14)
For the six months ended June 30, 1999 9.23 0.05 0.47 0.52 0.00 0.00 0.00
MEDIUM-TERM RETIREMENT
ADVISER SHARES
For the period March 7, 1996*
through December 31, 1996 7.50 0.04 0.63 0.67 (0.03) (0.07) (0.10)
For the year ended December 31, 1997 8.07 0.13 1.40 1.53 (0.13) (0.62) (0.75)
For the year ended December 31, 1998 8.85 0.18 1.22 1.40 (0.15) (0.42) (0.57)
For the six months ended June 30, 1999 9.68 0.07 0.18 0.25 0.00 0.00 0.00
INSTITUTIONAL SHARES
For the period April 2, 1996*
through December 31, 1996 7.53 0.10 0.55 0.65 (0.25) (0.07) (0.32)
For the year ended December 31, 1997 7.86 0.24 1.29 1.53 (0.15) (0.61) (0.76)
For the year ended December 31, 1998 8.63 0.22 1.18 1.40 (0.18) (0.42) (0.60)
For the six months ended June 30, 1999 9.43 0.09 0.17 0.26 0.00 0.00 0.00
SHORT-TERM RETIREMENT
ADVISER SHARES
For the period March 7, 1996*
through December 31, 1996 8.50 0.06 0.72 0.78 (0.06) (0.06) (0.12)
For the year ended December 31, 1997 9.16 0.22 1.47 1.69 (0.20) (0.87) (1.07)
For the year ended December 31, 1998 9.78 0.30 0.89 1.19 (0.26) (0.22) (0.48)
For the six months ended June 30, 1999 10.49 0.16 0.01 0.17 0.00 0.00 0.00
INSTITUTIONAL SHARES
For the period April 2, 1996*
through December 31, 1996 8.51 0.00 0.70 0.70 0.00 0.00 0.00
For the year ended December 31, 1997 9.21 0.17 1.55 1.72 (0.24) (0.87) (1.11)
For the year ended December 31, 1998 9.82 0.34 0.90 1.24 (0.30) (0.22) (0.52)
For the six months ended June 30, 1999 10.54 0.16 0.03 0.19 0.00 0.00 0.00
</TABLE>
<TABLE>
<CAPTION>
RATIOS
RATIO INFORMATION
ASSUMING NO FEE WAIVERS,
REIMBURSEMENTS OR
CUSTODY FEE
EARNINGS CREDIT RECEIVED
RATIO OF
NET NET
NET RATIO OF INVEST- INVEST-
ASSET EXPENSES MENT RATIO OF MENT
VALUE TO INCOME EXPENSES INCOME
AT NET AVERAGE TO TO TO
END OF TOTAL ASSETS NET AVERAGE PORTFOLIO AVERAGE AVERAGE
PERIOD RETURN (000'S) ASSETS NET TURNOVER NET NET
ASSETS RATE ASSETS ASSETS
------------------------------------------------------------------------------------
LONG-TERM RETIREMENT
ADVISER SHARES
<S> <C> <C> <C> <C> <C> <C> <C> <C>
For the period March 7, 1996*
through December 31, 1996 $ 6.98 9.08% $ 978 1.75%+ 1.63%+ 25.09% 45.36%+ -41.98%+
For the year ended December 31, 1997 7.98 24.50 4,194 1.75 1.30 66.64 5.61 -2.56
For the year ended December 31, 1998 9.10 15.58 7,150 1.75 1.17 60.96 3.25 -0.33
For the six months ended June 30, 1999 9.59 5.38 7,716 1.75 + 0.61 + 58.87 + 2.90 + -0.54 +
INSTITUTIONAL SHARES
For the period April 2, 1996*
through December 31, 1996 7.05 9.03 282 1.50 + 1.97 + 25.09 40.49 + -37.02 +
For the year ended December 31, 1997 8.07 24.84 1,088 1.45 1.67 66.64 7.52 -4.40
For the year ended December 31, 1998 9.23 16.16 1,687 1.27 1.64 60.96 4.09 -1.18
For the six months ended June 30, 1999 9.75 5.63 1,874 1.27 + 1.07 + 58.87 + 3.56 + -1.20 +
MEDIUM-TERM RETIREMENT
ADVISER SHARES
For the period March 7, 1996*
through December 31, 1996 8.07 8.89 3,416 1.75 + 1.73 + 22.56 15.88 + -12.40 +
For the year ended December 31, 1997 8.85 18.96 11,987 1.75 1.80 90.67 2.92 0.63
For the year ended December 31, 1998 9.68 15.94 14,617 1.75 1.89 155.74 2.23 1.41
For the six months ended June 30, 1999 9.93 2.58 15,195 1.75 + 1.57 + 107.37 + 2.18 + 1.14 +
INSTITUTIONAL SHARES
For the period April 2, 1996*
through December 31, 1996 7.86 8.54 265 1.50 + 1.96 + 22.56 20.86 + -17.40 +
For the year ended December 31, 1997 8.63 19.48 1,165 1.39 2.33 90.67 4.41 -0.69
For the year ended December 31, 1998 9.43 16.36 2,276 1.28 2.38 155.74 2.79 0.87
For the six months ended June 30, 1999 9.69 2.76 2,631 1.30 + 2.03 + 107.37 + 2.58 + 0.74 +
SHORT-TERM RETIREMENT
ADVISER SHARES
For the period March 7, 1996*
through December 31, 1996 9.16 8.54 4,459 1.75 + 2.08 + 14.16 15.68 + -11.85 +
For the year ended December 31, 1997 9.78 18.46 13,786 1.75 2.41 145.44 2.65 1.51
For the year ended December 31, 1998 10.49 12.22 17,157 1.75 3.00 263.77 1.96 2.79
For the six months ended June 30, 1999 10.66 1.62 15,860 1.75 + 2.78 + 146.81 + 1.92 + 2.79 +
INSTITUTIONAL SHARES
For the period April 2, 1996*
through December 31, 1996 9.21 8.23 304 1.50 + 2.31 + 14.16 19.10 + -15.29 +
For the year ended December 31, 1997 9.82 18.69 1,823 1.44 2.87 145.44 4.01 0.30
For the year ended December 31, 1998 10.54 12.68 16,108 1.45 3.31 263.77 1.64 3.12
For the six months ended June 30, 1999 10.73 1.80 16,855 1.45 + 3.08 + 146.81 + 1.63 + 3.12 +
<FN>
+ Annualized
* Commencement of operations.
</FN>
</TABLE>
See notes to financial statements
<PAGE>
TomorrowFunds
-------------------------------
R E T I R E M E N T T R U S T
A Lifecycle Retirement Program
---------------------------------------
ONE NEW YORK PLAZA, NEW YORK, NY 10004
(800) 223-3332
INDEPENDENT TRUSTEES AND MEMBERS
OF AUDIT COMMITTEE
Raymond R. Herrmann, Jr.
Lawrence J. Israel
Graham E. Jones
OFFICERS
Roger J. Weiss
Chairman of the Board, President and Trustee
Ronald M. Hoffner
Executive Vice President and Treasurer
Daniel Cardell
Vice President
Joseph J. Reardon
Vice President and Secretary
Daniel S. Vandivort
Vice President
Steven M. Pires
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 Tomorrow Funds
Retirement Trust. Such offering is made only by prospectus, which includes
details as to offering and other material information.
