TOMORROW FUNDS
RETIREMENT TRUST
A LIFECYCLE RETIREMENT PROGRAM
ANNUAL REPORT
DECEMBER 31, 1999
TOMORROW LONG-TERM RETIREMENT FUND
TOMORROW MEDIUM-TERM RETIREMENT FUND
TOMORROW SHORT-TERM RETIREMENT FUND
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
TABLE OF CONTENTS
Average Annual Total Returns .............................................. 2
Ten Largest Holdings ...................................................... 4
Schedules of Investments:
Tomorrow Long-Term Retirement Fund ................................... 5
Tomorrow Medium-Term Retirement Fund ................................. 9
Tomorrow Short-Term Retirement Fund .................................. 13
Statements of Assets and Liabilities ...................................... 16
Statements of Operations .................................................. 17
Statements of Changes in Net Assets ....................................... 18
Notes to Financial Statements ............................................. 19
Financial Highlights ...................................................... 26
Independent Auditors' Report .............................................. 28
Page 1
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1999
The Funds experienced a difficult year primarily due to the performance of the
equity portion of the portfolios.
We have observed two trends in the market that hampered the WPG Quantitative
Equity model during 1999, particularly in the first and fourth quarters. The
first, negative or perverse return to value, deals with a contradiction to
widely held beliefs about stock valuation. Traditional measures of favorable
stock valuation such as low Price to Earnings ratios have not just failed to
predict positive relative return but have actually been predictive of negative
relative returns. The second trend, narrow markets, has also hampered
Quantitative Equity model performance. During the fourth quarter most of the
index returns in the large and mid cap segments of the market have been
concentrated in a very few of the larger and mostly technology stocks in the
index. Missing just a few of these names in stock selection means certain
underperformance. For example, the top 10 names in terms of contribution to
S&P500 and S&P Mid Cap index returns for the year accounted for almost half and
almost three quarters respectively of the total return to those indexes.
It is our expectation that these trends are temporary and the historical
relationships that our model is based upon will return. We believe earnings and
the price paid for those earnings will again be important to investors causing
the markets to broaden and valuation to again be predictive.
[GRAPH DEPICTED HERE]
Graph depicted here shows the growth comparison of the Tomorrow Long-Term Funds
from the period March 1996 through December 31, 1999 as compared to the Long
Term Benchmark ( 45% S&P 500 Index, 15% S&P 400 Index, 15% Russell 2000 Index,
20% Lehman Gov't Corp. Index, 5% EAFE Index.)
Tomorrow L/T Fund
(Advisor Class)
L/T Fund L/T Benchmark
$ $
------ -------
03/07/96 10,000 10,000
6/30/96 10,309 10,339
9/30/96 10,372 10,549
12/31/96 10,977 11,154
3/31/97 10,850 11,041
6/30/97 12,266 12,541
9/30/97 13,320 13,793
12/31/97 13,668 11,154
3/31/98 14,832 12,321
6/30/98 14,831 12,451
9/30/98 13,735 11,288
12/31/98 15,796 13,218
3/31/99 15,447 13,254
6/30/99 16,643 14,244
9/30/99 15,949 13,571
12/31/99 17,296 15,299
- --------------------------------------------------------------------------------
ONE FROM
YEAR INCEPTION*
---- ----------
Tomorrow Long-Term Institutional 10.07% 15.93%
Tomorrow Long-Term Adviser 9.53% 15.24%
Benchmark (a) 15.74% 18.35%
(a) 45% S&P 500 Index, 15% S&P 400 Index, 15% Russell 2000 Index, 20% Lehman
Gov't Corp. Index, 5% EAFE Index
- --------------------------------------------------------------------------------
[GRAPH DEPICTED HERE]
Graph depicted here shows the growth comparison of the Tomorrow Medium-Term
Funds from the period March 1996 through December 31, 1999 as compared to the
Long Term Benchmark (40% S&P 500 Index, 40% Lehman Gov't Corp. Index, 10% S&P
400 Index, 5% Russell 2000 Index, 5% EAFE Index.)
Tomorrow M/T Fund
(Advisor Class)
M/T Fund M/T Benchmark
$ $
------ -------
3/7/96 $10,000 $10,000
6/30/96 $10,228 $10,302
9/30/96 $10,362 $10,527
12/31/96 $10,919 $11,120
3/31/97 $10,757 $11,079
6/30/97 $11,880 $12,457
9/30/97 $12,758 $13,486
12/31/97 $12,989 $13,756
3/31/98 $13,986 $14,921
6/30/98 $14,162 $15,217
9/30/98 $13,501 $14,444
12/31/98 $15,058 $16,308
3/31/99 $14,793 $16,416
6/30/99 $15,445 $17,178
9/30/99 $14,886 $16,618
12/31/99 $15,708 $18,132
- --------------------------------------------------------------------------------
ONE FROM
YEAR INCEPTION*
---- ----------
Tomorrow Medium-Term Institutional 4.77% 13.00%
Tomorrow Medium-Term Adviser 4.32% 12.47%
Benchmark (a) 11.19% 16.65%
(a) 40% S&P 500 Index, 40% Lehman Gov't Corp. Index, 10% S&P 400 Index, 5%
Russell 2000 Index, 5% EAFE Index
- --------------------------------------------------------------------------------
[GRAPH DEPICTED HERE]
Graph depicted here shows the growth comparison of the Tomorrow Short-Term
Funds from the period March 1996 through December 31, 1999 as compared to the
Long Term Benchmark (65% Lehman Gov't Corp. Index, 35% S&P 500 Index.)
Tomorrow S/T Fund
S/T Fund S/T Benchmark
$ $
------ -------
3/7/96 $10,000 $10,000
6/30/96 $10,213 $10,280
9/30/96 $10,366 $10,523
12/31/96 $10,918 $11,123
3/31/97 $10,822 $11,132
6/30/97 $11,883 $12,406
9/30/97 $12,612 $13,308
12/31/97 $12,936 $13,724
3/31/98 $13,651 $14,519
6/30/98 $13,849 $14,937
9/30/98 $13,676 $14,912
12/31/98 $14,516 $15,993
3/31/99 $14,516 $16,146
6/30/99 $14,751 $16,427
9/30/99 $14,475 $16,122
12/31/99 $14,824 $16,894
- --------------------------------------------------------------------------------
ONE FROM
YEAR INCEPTION*
---- ----------
Tomorrow Short-Term Institutional 2.40% 11.07%
Tomorrow Short-Term Adviser. 2.12% 10.68%
Benchmark (a). 5.62% 14.46%
(a) 65% Lehman Gov't Corp. Index, 35% S&P 500 Index
- --------------------------------------------------------------------------------
NOTE:
* Inception of Fund: Adviser Shares and Benchmark 3/7/96, Institutional Shares
4/2/96.
Page 2
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED DECEMBER 31, 1999
Performance represents historical data. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Each Fund's
results and their indices assume the reinvestment of all capital gain
distributions and income dividends. Each Fund's past performance is not
indicative of future performance and should be considered in light of each
Fund's investment policy and objectives, the characteristics and quality of its
portfolio securities and the periods selected. The S&P 500 Stock Index and the
S&P 400 MidCap Stock Index are each broad based measurements of changes in stock
market conditions based on the average performance of 500 and 400, respectively,
widely held common stocks. The Russell 2000 Index is a measurement of changes in
stock market conditions based on the average performance of 2,000 small
capitalization companies. The Lehman Government Corporate Index is a market
weighted blend of all U.S. Government securities and all U.S. Corporate
securities. The Morgan Stanley Capital International Europe, Australia, Far East
("EAFE") is an index of more than 800 companies in Europe, Australia and the Far
East.
<PAGE>
<TABLE>
<CAPTION>
TOMORROW FUNDS RETIREMENT TRUST
TEN LARGEST HOLDINGS AT DECEMBER 31, 1999
MARKET PERCENT
LONG-TERM TOMORROW FUND VALUE OF FUND
- ----------------------- ----- -------
<S> <C> <C>
UST-Note 6.125% Due 12/31/01 ........................ $ 798,248 7.9%
BT EAFE Equity Index Fund ........................... 561,321 5.5%
UST-Note 6.125% Due 8/15/07 ......................... 360,750 3.6%
Microsoft Corp. ..................................... 274,363 2.7%
General Electric Corp. .............................. 189,568 1.9%
Cisco Systems ....................................... 187,469 1.9%
UST-Note 5.500% Due 5/15/09 ......................... 149,075 1.5%
UST-Note 5.625% Due 5/15/08 ......................... 136,390 1.3%
UST-Note 5.250% Due 11/25/28 ........................ 135,919 1.3%
Wal Mart Stores Inc. ................................ 119,241 1.2%
----------- ----
$ 2,912,344 28.8%
=========== ====
MEDIUM-TERM TOMORROW FUND
- -------------------------
UST-Note 6.125% Due 12/31/01 ........................ $ 1,855,927 11.3%
UST-Note 5.625% Due 5/15/08 ......................... 1,124,041 6.9%
BT EAFE Equity Index Fund ........................... 860,220 5.2%
Microsoft Corp. ..................................... 408,625 2.5%
General Electric .................................... 317,238 1.9%
Cisco Systems ....................................... 305,306 1.9%
Wal Mart Stores Inc. ................................ 197,006 1.2%
GMAC 5.375% Due 9/30/02 ............................. 191,552 1.2%
Intel Corp. ......................................... 187,261 1.1%
Time Warner 9.125% Due 1/15/13 ...................... 186,277 1.1%
----------- ----
$ 5,633,453 34.3%
=========== ====
SHORT-TERM TOMORROW FUND
- ------------------------
UST-Bond 5.625% Due 5/15/08 ......................... $ 4,373,883 13.8%
UST-Note 6.125% Due 12/31/01 ........................ 2,055,489 6.5%
Salomon Inc. 7.300% Due 5/15/02 ..................... 862,606 2.7%
Microsoft Corp. ..................................... 659,638 2.1%
Barclays Bank Plc Yankee 7.400% Due 12/15/09 ........ 564,138 1.8%
Commercial Credit 8.250% Due 11/1/01 ................ 520,985 1.6%
Ford Motor Credit 6.570% Due 3/19/01 ................ 518,336 1.6%
Ford Motor Credit 7.375% Due 10/28/09 ............... 518,306 1.6%
Norwest Financial 5.375% 9/30/03 .................... 518,199 1.6%
Fortune Brands Inc. 7.125% Due 11/1/04 .............. 517,124 1.6%
----------- ----
$11,108,704 34.9%
=========== ====
Page 4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1999
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW LONG-TERM RETIREMENT FUND
COMMON STOCKS (71.3%)
BASIC MATERIALS (3.3%)
<C> <S> <C>
850 AK Steel Holding Corp. ......................... $16,044
425 Aptargroup Inc. ................................ 10,678
1,550 Boise Cascade Group ............................ 62,775
1,825 +Cytec Industries Inc. .......................... 42,203
350 Eastman Kodak Co. .............................. 23,188
750 Fortune Brands ................................. 24,797
525 Georgia Pacific Corp. .......................... 26,644
650 Glatfelter (PH) Co. ............................ 9,466
150 Ferro Corp. .................................... 3,300
550 Imco Recycling Inc. ............................ 6,944
1,200 Intermet Corp. ................................. 13,950
375 Lilly Industries Inc. - Cl A ................... 5,039
350 Lubrizol Corp. ................................. 10,806
350 MacDermid Inc. ................................. 14,372
370 Nashua Corp. ................................... 2,775
700 Pope & Talbot Inc. ............................. 11,200
180 Quanex Corp. ................................... 4,590
550 Ryerson Tull Inc. .............................. 10,690
1,100 Sherwin - Williams Co. ......................... 23,100
550 Solutia, Inc. .................................. 8,490
-------
331,051
-------
COMMERCIAL SERVICES (1.3%)
425 ABM Industries Inc. ............................ 8,659
950 +Billing Concepts Corp. ......................... 6,175
650 Comdisco Inc. .................................. 24,213
200 +GTech Holding Corp. ............................ 4,400
1,880 True North Communications ...................... 84,013
-------
127,460
-------
CONSUMER CYCLICALS (6.3%)
250 Abercrombie & Fitch Co. ........................ 6,672
350 Applied Power Inc. ............................. 12,862
200 Arvin Industries Inc. .......................... 5,675
500 BJ's Wholesale Club Inc. ....................... 18,250
270 +Champion Enterprises Inc. ...................... 2,312
350 +Convergys Corp. ................................ 10,762
550 Dayton Hudson Corp. ............................ 40,391
650 +Dress Barn Inc. ................................ 10,806
180 Federal Realty Investors Trust ................. 3,386
750 +Federated Department Store ..................... 37,922
350 +Footstar Inc. .................................. 10,675
1,400 Ford Motor Co. ................................. 74,813
100 Franchise Finance Corp. ........................
of America ..................................... 2,394
225 General Growth Properties ...................... 6,300
675 Glenborough Realty ............................. 9,028
200 Highwood Properties ............................ 4,650
640 +Insituform Technologies - Cl A ................. 18,080
180 Kellwood Co. ................................... 3,499
100 Liberty Property Trust ......................... 2,425
100 Mack-Cali Realty Corp. ......................... $ 2,606
600 Mascotech Inc. ................................. 7,613
350 +The Men's Warehouse ............................ 10,281
675 Meritor Automotive ............................. 13,078
1,160 +Morrison Knudson Co. ........................... 9,063
180 +Nautica Enterprises Inc. ....................... 2,036
360 Osh Kosh B'Gosh - Cl A ......................... 7,583
1,075 Pier 1 Imports Inc. ............................ 6,853
600 Ross Stores .................................... 10,763
270 Ryland Group Inc. .............................. 6,227
1,050 Shaw Industries Inc. ........................... 16,209
460 +Southern Energy Homes .......................... 1,078
100 Storage USA .................................... 3,025
150 Tiffany & Company .............................. 13,387
950 +Toys R Us ..................................... 13,597
225 USG Corp. ...................................... 10,603
200 Wabash National Corp. .......................... 3,000
1,725 Wal Mart Stores Inc. ........................... 119,241
400 Warnaco Group Cl A ............................. 4,925
200 +Williams Sonoma Inc. ........................... 9,200
550 Winnebago Industries ........................... 11,034
600 Young & Rubicam Inc. ........................... 42,450
650 Zale Corp. ..................................... 31,444
-------
636,198
-------
CONSUMER NON-CYCLICALS (3.7%)
500 Anheuser - Busch Co. ........................... 35,438
500 Best Foods ..................................... 26,281
500 Casey's General Store .......................... 5,219
180 Dimon Inc. ..................................... 585
1,000 General Mills Inc. ............................. 35,750
350 Hormel Foods Corp. ............................. 14,219
400 Interstate Bakeries Corp. ...................... 7,250
250 Lancaster Colony ............................... 8,281
200 Libbey Inc. .................................... 5,750
800 Philip Morris Companies Inc. ................... 18,550
600 Proctor & Gamble Co. ........................... 65,737
625 +Quaker Oats .................................... 41,016
475 +Ralcorp Holding Inc. ........................... 9,470
850 Sara Lee Corp. ................................. 18,753
350 +Smithfield Foods Inc. .......................... 8,400
300 +Suiza Foods Corp. .............................. 11,888
2,604 Supervalu Inc. ................................. 52,080
325 Tupperware Corporation ......................... 5,505
2 +WLR Foods Inc .................................. 11
-------
370,183
-------
CONSUMER SERVICES (3.8%)
350 Adaptive Broadband Corp. ....................... 25,834
700 Arctic Cat Inc. ................................ 7,000
350 +Brinker International Inc. ..................... 8,400
1,500 Brunswick Corp. ................................ 33,375
270 +Carmike Cinemas Inc. - Cl A .................... 2,109
See Notes to Financial Statements
Page 5
<PAGE>
TOMORROW LONG-TERM RETIREMENT FUND (CONTINUED)
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1999
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
1,950 Darden Restaurants Inc. ........................ $35,344
360 +Devry Inc. ..................................... 6,705
1,000 Donnelley RR & Sons ............................ 24,812
200 Harley Davidson Inc. ........................... 12,812
975 +Harrah's Entertainment Inc. .................... 25,777
1,900 Jack in the Box Inc. ........................... 39,306
325 +Mandalay Resort Group .......................... 6,541
640 New England Business Service ................... 15,640
550 +Park Place Entertainment Corp. ................. 6,875
200 Polaris Industries ............................. 7,250
250 +Readers Digest Association Inc. ................ 7,313
1,100 Reynolds & Reynolds ............................ 24,750
650 Time Warner Inc. ............................... 47,084
175 +Univision Communications Inc. .................. 17,882
950 Viad Corp. ..................................... 26,481
-------
381,290
-------
ENERGY (3.7%)
300 +BJ Services Co. ................................ 12,544
200 +Barrett Resources Corp. ........................ 5,887
900 Coastal Corp. .................................. 31,894
600 Exxon Mobil Corp. .............................. 48,338
77 Friede Goldman Halter Inc ...................... 534
350 Murphy Oil Corp. ............................... 20,081
180 +New Field Exploration Co. ...................... 4,815
575 Noble Drilling Corp. ........................... 18,831
1,650 Occidental Petroleum Corp. ..................... 35,681
920 +Oceaneering International Inc. ................. 13,743
1,550 Royal Dutch Petroleum ADR ...................... 93,678
1,500 +Santa Fe Snyder Corp. .......................... 12,000
325 Tosco Corporation .............................. 8,836
925 +Transocean Sedco Forex Inc. .................... 31,161
1,625 USX - Marathon Group ........................... 40,117
-------
378,140
-------
FINANCE (8.8%)
625 AMBAC Financial Group Inc. ..................... 32,617
593 American International Group ................... 64,118
200 +Amresco Inc. .................................. 281
325 Amsouth Bancorportion .......................... 6,277
90 Astoria Financial Corp. ........................ 2,739
8 BSB Bancorp Inc. ............................... 154
450 BankNorth Group Inc. ........................... 12,037
315 Bear Stearns Cos. Inc. ......................... 13,466
100 Centura Banks Inc. ............................. 4,412
178 Charter One Financial .......................... 3,404
400 Chase Manhattan Corp. .......................... 31,075
1,750 Citigroup Inc. ................................. 97,234
650 Comerica Inc. .................................. 30,347
135 Commercial Federal Corp. ....................... 2,405
500 Compass Bancshares Inc. ........................ 11,156
200 Cullen/Frost Bankers Inc. ...................... 5,150
156 +Delphi Financial Group ........................ 4,680
875 Dime Bancorp Inc. .............................. $13,234
750 Federal National Mortgage Corp. ................ 46,828
100 Felcor Lodging Trust ........................... 1,750
335 Fidelity National Financial Inc. ............... 4,816
200 Finova Group Inc. .............................. 7,100
400 First American Financial ....................... 4,975
425 FirstMerit Corp. ............................... 9,775
1,000 First Union Corp. .............................. 32,812
950 Fleet Boston Financial Group Inc. .............. 33,072
99 +Frontier Insurance Group Inc. .................. 340
100 Health Care Property Investors ................. 2,388
270 Hilb, Rogal & Hamilton Co. ..................... 7,628
900 Household International Inc. ................... 33,525
360 Hudson United Bancorp .......................... 9,203
180 JSB Financial Inc. ............................. 9,338
180 Keystone Financial Inc. ........................ 3,791
325 Legg Mason Inc. ................................ 11,781
300 Lincoln National Corp. Ltd. .................... 12,000
275 MAF Bancorp .................................... 5,758
275 Marshall & Ilsley Corp. ........................ 17,273
600 Metris Companies Inc. .......................... 21,413
300 Morgan Stanley Dean Witter & Co. ............... 42,825
180 Mutual Risk Management ......................... 3,026
550 National Commerce
Bancorporation ................................. 12,478
200 Nationwide Financial Services .................. 5,588
700 North Fork Bancorp ............................. 12,250
2 One Valley Bancorp Inc. ........................ 61
775 The PMI Group Inc. ............................. 37,830
925 PNC Bank ....................................... 41,163
550 Paine Webber Group Inc. ........................ 21,347
275 T. Rowe Price Associates Inc. .................. 10,158
300 Provident Financial Group ...................... 10,763
100 Radian Group Inc. .............................. 4,775
500 Raymond James Financial ........................ 9,344
750 Southtrust Corp. ............................... 28,359
375 TCF Financial Corp. ............................ 9,328
180 Trenwick Group Inc. ............................ 3,049
525 UST Corp. ...................................... 16,669
90 US Trust Corp. ................................. 7,217
-------
886,582
-------
HEALTH CARE (7.1%)
270 Advanced Tissue Sciences Inc. .................. 675
200 Allergen Inc. .................................. 9,950
650 Alpharma Inc. Cl A ............................. 19,987
400 AmeriSource Health Corp. ....................... 6,075
225 Bard (CR) Inc. ................................. 11,925
300 Baxter International ........................... 18,844
375 Biogen Inc. .................................... 31,687
1,450 Bristol-Myers Squibb ........................... 93,072
550 Cambrex Corp. .................................. 18,941
625 DENTSPLY International ......................... 14,766
See Notes to Financial Statements
Page 6
<PAGE>
TOMORROW LONG-TERM RETIREMENT FUND (CONTINUED)
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1999
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
200 Express Scripts Inc. - Cl A .................... $12,800
425 Ivax Corp. ..................................... 10,944
500 Johnson & Johnson Co. .......................... 46,563
90 Magellan Health Services Inc. .................. 568
510 Medimmune Inc. ................................. 84,596
180 Mentor Corp. ................................... 4,646
1,025 Merck & Co. Inc. ............................... 68,739
180 Orthodontic Centers of America ................. 2,149
270 Owens & Minor Inc. ............................. 2,413
250 +Pacificare Health Systems - Cl B ............... 13,250
1,525 Pfizer Inc. .................................... 49,467
209 +Quintiles Transnational Corp. .................. 3,906
180 Respironics Inc. ............................... 1,434
180 +Rural/ Metro Corp. ............................. 771
180 Safeskin Corp. ................................. 2,182
850 Schering Plough Corp. .......................... 35,859
521 Shire Pharmaceuticals Group -ADR ............... 15,184
180 Sola International Inc. ........................ 2,498
350 Visx Inc. ...................................... 18,113
950 Warner Lambert Co. ............................. 77,841
625 +Wellpoint Health Networks ...................... 41,211
-------
721,056
-------
INDUSTRIAL (4.1%)
730 Anixter International Inc. ..................... 15,056
1,425 Belden Inc. .................................... 29,925
950 CDI Corp. ...................................... 22,919
270 Clarcor Inc. ................................... 4,860
1,225 General Electric ............................... 189,568
350 Kennametal Inc. ................................ 11,769
135 Manitowoc Inc. ................................. 4,590
450 Mark IV Industries Inc. ........................ 7,959
275 Minnesota Mining
& Manufacturing .............................. 26,916
90 SPS Technologies Inc. .......................... 2,874
150 +SPX Corp. ..................................... 12,122
525 Toro Co. ....................................... 19,589
1,650 Tyco International Ltd. ........................ 64,144
-------
412,291
-------
REAL ESTATE INVESTMENT TRUST (0.1%)
400 Charles Smith Residential ...................... 14,150
TECHNOLOGY (20.5%)
555 AAR Corp. ...................................... 9,955
550 +ADC Telecommunications Inc. .................... 39,909
200 +Acxiom Corp. ................................... 4,800
775 +Adaptec Inc. ................................... 38,653
225 Adobe Systems Inc. ............................. 15,131
300 Affiliated Computer Services ................... 13,800
1,150 Altera Corp. ................................... 56,997
450 American Management Systems .................... 14,119
300 Applied Materials Inc. ......................... 38,006
200 Aspect Communications Inc. ..................... 7,825
400 +Atmel Corp. .................................... $11,825
400 +C-Cube Microsystems Inc. ....................... 24,900
600 Ciber Inc. ..................................... 16,500
1,750 +Cisco Systems .................................. 187,469
200 +Citrix Systems ................................. 24,600
180 Cognex Corp. ................................... 7,020
475 Computer Associates
International Inc. ............................. 33,220
675 Computer Task Group ............................ 9,998
1,800 +Compuware Corp. ................................ 67,050
75 Comverse Technology ............................ 10,856
500 Concord EFS Inc. ............................... 12,875
1,000 Cypress Semiconductor .......................... 32,375
350 Dallas Semiconductors .......................... 22,553
375 +EMC Corp. ...................................... 40,969
1,800 Filenet Corp. .................................. 45,900
1,275 Gerber Scientific Inc. ......................... 27,970
675 +Integrated Device Technology ................... 19,575
1,350 Intel Corp. .................................... 111,122
750 International Business
Machines Corp. ................................. 81,000
575 +Intervoice - Brite Inc. ........................ 13,369
375 +Intuit ......................................... 22,478
150 Jabil Circuit Inc. ............................. 10,950
875 Johnson Controls ............................... 49,766
820 +Kemet Corp. .................................... 36,951
350 +LSI Logic Corp. ................................ 23,625
500 +Lexmark International Group - Cl A ............. 45,250
125 +Litton Industries Inc. ......................... 6,234
1,000 Lucent Technologies ............................ 74,813
460 Microchip Technology Inc. ...................... 31,481
2,350 +Microsoft Corp. ................................ 274,363
1,300 +Midway Games Inc. .............................. 31,119
325 Novellus Systems Inc. .......................... 39,823
74 PeopleSoft Inc. ................................ 1,583
100 Precision Castparts Corp. ...................... 2,625
180 Read-Rite Corp. ................................ 855
125 SCI Systems Inc. ............................... 10,273
180 +S3 Incorporated ................................ 2,081
180 Sanmina Corp. .................................. 17,978
100 Sterling Software Industry ..................... 3,150
800 +Sun Microsystems Inc. ......................... 61,950
350 Symantec Corp. ................................. 20,519
200 Synopsys Inc. .................................. 13,350
325 Technitrol Inc. ................................ 14,463
850 +Tellabs Inc. .................................. 54,559
150 Teradyne Inc. ................................... 9,900
900 United Technologies ............................ 58,500
425 Veritas Software Corp. ......................... 60,828
325 Vishay International Inc. ...................... 10,278
250 Vitesse Semiconductor Corp. .................... 13,109
175 Waters Corp. ................................... 9,275
350 Xircom ......................................... 26,250
---------
2,078,720
---------
See Notes to Financial Statements
Page 7
<PAGE>
TOMORROW LONG-TERM RETIREMENT FUND (CONTINUED)
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1999
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TELECOMMUNICATIONS (5.4%)
1,525 AT&T Corp. ..................................... $77,394
425 Alltel Corp. ................................... 35,142
1,300 Bell Atlantic Corp. ............................ 80,031
1,400 BellSouth Corp. ................................ 65,537
450 Centurytel Inc. ................................ 21,319
150 +DST System ..................................... 11,447
225 Dycom Industries ............................... 9,914
550 +General Communication - Cl A ................... 2,406
100 +Hispanic Broadcasting Corp. .................... 9,222
1,275 +MCI Worldcom Inc. .............................. 67,655
400 +Nextel Communications Inc. ..................... 41,250
625 +Voicestream Wireless Corp. ..................... 88,945
625 +Western Wireless Co. ........................... 41,719
-------
551,981
-------
TRANSPORTATION (0.6%)
475 +AMR Corp. ...................................... 31,825
550 +Alaska Air Group ............................... 19,319
750 +Yellow Corp. ................................... 12,609
-------
63,753
-------
UTILITIES (2.6%)
2,100 Allegheny Energy Inc. .......................... 56,569
200 +Analog Devices Inc. ............................ 18,600
650 Conectiv, Inc. ................................. 10,928
1,275 Eastern Utilities .............................. 38,648
800 Energy East Corp. .............................. 16,650
800 FPL Group Inc. ................................. 34,250
225 Florida Progress Co. ........................... 9,520
500 GPU Inc. ....................................... 14,969
500 +MidAmerican Energy ............................. 16,844
700 Northwest Natural Gas Co. ...................... 15,356
200 Pinnacle West Capital .......................... 6,113
1,250 Questar Corp. .................................. 18,750
300 Utilicorp United Inc. .......................... 5,831
-------
263,028
-------
TOTAL COMMON STOCKS
(Cost $6,165,114) 7,215,883
---------
OPEN END INVESTMENT COMPANY (5.5%)
(Cost $405,706)
38,499 BT EAFE Equity Index Fund ...................... 561,321
UNIT INVESTMENT TRUST (1.0%)
(Cost $64,473)
669 Standard & Poor's Depositary
Receipt ........................................ 98,259
PRINCIPAL
AMOUNT SECURITY VALUE
- ------ -------- -----
U.S. GOVERNMENT OBLIGATIONS (18.0%)
U.S. TREASURY NOTES (15.7%)
$800,000 6.125% Due 12/31/01 ............................. $798,248
115,000 5.250% Due 8/15/03 .............................. 110,885
370,000 6.125% Due 8/15/07 .............................. 360,750
145,000 5.625% Due 5/15/08 .............................. 136,390
160,000 5.500% Due 5/15/09 .............................. 149,075
30,000 6.000% Due 8/15/09 .............................. 29,063
---------
1,584,411
---------
U.S. TREASURY BONDS (1.3%)
165,000 5.250% Due 11/15/28 ............................ 135,919
---------
U.S. TREASURY STRIP (1.0%)
105,000 Due 2/15/15 .................................... 37,546
170,000 Due 11/15/22 ................................... 37,257
125,000 Due 11/15/27 ................................... 20,971
---------
95,774
---------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $1,904,828) ............................. 1,816,104
---------
ASSET BACKED SECURITY (0.4%)
(Cost $47,375)
45,000 MBNA Master Credit Card
Series 1995-C
6.450% Due 2/15/08 ............................ 43,734
---------
EURODOLLAR DEPOSIT (3.4%)
(Cost $339,000)
339,000 Societe Generale
3.000% Due 1/3/00 ............................. 339,000
---------
TOTAL INVESTMENTS (99.6%)
(Cost $8,926,496) 10,074,301
OTHER ASSETS IN EXCESS OF
LIABILITIES (0.4%) 42,700
---------
TOTAL NET ASSETS (100.0%) $10,117,001
===========
<FN>
+ Non-income producing security.
</FN>
</TABLE>
See Notes to Financial Statements
Page 8
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW MEDIUM-TERM RETIREMENT FUND
COMMON STOCK - 55.9%
BASIC MATERIALS (2.3%)
<C> <S> <C>
1,450 AK Steel Holding Corp. ......................... $27,369
200 Aptargroup Inc. ................................ 5,025
100 +Birmingham Steel Co ............................ 531
2,250 Boise Cascade Corp. ............................ 91,125
2,300 +Cytec Industries Inc. .......................... 53,188
575 Eastman Kodak .................................. 38,094
875 Georgia Pacific Co. ............................ 44,406
750 Glatfelter Co. ................................. 10,922
275 Imco Recycling, Inc ............................ 3,472
575 Intermet Corp. ................................. 6,684
200 Lilly Industries ............................... 2,687
400 Lubrizol Corp. ................................. 12,350
150 MacDermid Inc. ................................. 6,159
300 +Nashua Corp. ................................... 2,250
400 Pope & Talbot Inc. ............................. 6,400
100 Quanex Corp. ................................... 2,550
575 Ryerson Tull Inc. .............................. 11,177
2,000 Sherwin - Williams Co. ......................... 42,000
650 Solutia, Inc ................................... 10,034
-------
376,423
-------
CAPITAL GOODS (0.0%)
100 Ryland Group Inc. .............................. 2,306
COMMERCIAL SERVICES (1.9%)
200 ABM Industries Inc. ............................ 4,075
350 +Affiliated Computer Services ................... 16,100
200 +American Management Systems .................... 6,275
450 +Billing Concepts Corp. ......................... 2,925
275 +Ciber Inc. ..................................... 7,563
600 Comdisco Inc. .................................. 22,350
325 Computer Task Group ............................ 4,814
525 +Concord EFS Inc. ............................... 13,519
500 +Convergys Corp. ................................ 15,375
175 +DST System ..................................... 13,355
350 +GTech Holding Corp. ............................ 7,700
1,000 Ryder Systems .................................. 24,437
1,300 True North Communication ....................... 58,094
1,400 Viad Corp. ..................................... 39,025
1,000 Young & Rubicam Inc. ........................... 70,750
-------
306,357
-------
CONSUMER CYCLICALS (4.3%)
300 +Abercrombie & Fitch ............................ 8,006
175 Applied Power Inc. ............................. 6,431
225 Arvin Industries Inc. .......................... 6,384
550 BJ's Wholesale Club Inc. ....................... 20,075
150 +Champion Enterprise ............................ 1,284
900 Dayton Hudson Corp. ............................ 66,094
350 +Dress Barn Inc. ................................ 5,819
100 Federal Realty Investment Trust ................ 1,881
750 +Federated Department Store ..................... $37,922
175 +Footstar Inc. .................................. 5,337
2,700 Ford Motor Company ............................. 144,281
100 Franchise Finance Corp. of America ............. 2,394
100 General Growth Properties ...................... 2,800
150 Glenborough Realty ............................. 2,006
100 Highwood Properties Inc. ....................... 2,325
300 +Insituform Technology .......................... 8,475
100 Kellwood Company ............................... 1,944
100 Liberty Property Trust ......................... 2,425
100 Mack-Cali Realty Corp. ......................... 2,606
300 Mascotech Inc. ................................. 3,806
175 +The Men's Wearhouse ............................ 5,141
650 Meritor Automotive ............................. 12,594
550 +Morrison Knudsen Co. .......................... 4,297
100 +Nautica Enterprises Inc. ....................... 1,131
200 Osh Kosh B'Gosh Class `A' ...................... 4,213
500 Pier 1 Imports Inc. ............................ 3,187
700 Ross Stores .................................... 12,556
1,275 Shaw Industries Inc. ........................... 19,683
200 Smith Charles Residential ...................... 7,075
250 +Southern Energy Home ........................... 586
100 Storage USA .................................... 3,025
175 Tiffany & Company .............................. 15,619
2,350 +Toys R Us ...................................... 33,634
225 USG Corp. ...................................... 10,603
100 Wabash National Corp. .......................... 1,500
2,850 Wal Mart Stores Inc. ........................... 197,006
500 Warnaco Group Cl A ............................. 6,156
100 +Williams Sonoma ................................ 4,600
300 Winnebago Industries ........................... 6,019
475 +Zale Corp. ..................................... 22,978
703,898
CONSUMER NON CYCLICALS (3.4%)
850 Anheuser-Busch Co. ............................. 60,244
850 Best Foods ..................................... 44,678
250 Caseys General Store ........................... 2,609
100 Dimon Inc ...................................... 325
1,225 Fortune Brands ................................. 40,502
48 +General Cigar Holdings ......................... 399
1,525 General Mills Inc. ............................. 54,519
350 Hormel Foods Corp. ............................. 14,219
525 Interstate Bakeries Corp. ...................... 9,516
275 Lancaster Colony ............................... 9,109
100 Libbey Inc. .................................... 2,875
1,600 Philip Morris Companies Inc. ................... 37,100
875 Proctor & Gamble Co. ........................... 95,867
825 Quaker Oats .................................... 54,141
225 +Ralcorp Holding Inc. ........................... 4,486
1,450 Sara Lee Corp. ................................. 31,991
175 +Smithfield Foods Inc. .......................... 4,200
300 +Suiza Foods Corp. .............................. 11,888
See Notes to Financial Statements
Page 9
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1999
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW MEDIUM-TERM RETIREMENT FUND (continued)
3,664 Supervalu Inc. ................................. $73,280
375 Tupperware Corporation ......................... 6,352
-------
558,300
-------
CONSUMER SERVICE (3.0%)
300 +Adaptive Broadband ............................. 22,144
325 Arctic Cat Inc. ................................ 3,250
325 +Brinker International Inc. ..................... 7,800
2,400 Brunswick Corp. ................................ 53,400
675 +CDI Corp. ...................................... 16,284
100 +Carmike Cinemas Inc ............................ 781
3,100 Darden Restaurants ............................. 56,187
200 +Devry Inc. ..................................... 3,725
1,600 Donnelley RR & Sons ............................ 39,700
200 Harley Davidson Inc. ........................... 12,813
1,650 Harrah's Entertainment Inc. .................... 43,622
125 +Hispanic Broadcasting Corp. .................... 11,527
2,600 +Jack in the Box Inc. ........................... 53,787
350 +Mandalay Resort Group .......................... 7,044
300 New England Business Service ................... 7,331
750 Park Place Entertainment Corp. ................. 9,375
100 Polaris Industries ............................. 3,625
250 Readers Digest Association Inc. ................ 7,313
1,150 Reynolds & Reynolds Cl A ....................... 25,875
1,100 Time Warner Inc. ............................... 79,681
200 +Univision Communications Inc. .................. 20,438
---------
485,702
---------
ENERGY (3.2%)
325 +BJ Services Co. ................................ 13,589
100 +Barrett Resources Corp. ........................ 2,944
1,550 Coastal Corp. .................................. 54,928
800 Exxon Mobil Corp. Co. .......................... 64,450
42 +Friede Goldman Halter Inc ...................... 291
375 Murphy Oil Corp. ............................... 21,516
100 New Field Exploration Co. ...................... 2,675
675 +Noble Drilling Corp. ........................... 22,106
2,700 Occidental Petroleum Corp. ..................... 58,387
500 +Oceaneering International Inc. ................. 7,469
2,550 Royal Dutch Petroleum .......................... 154,116
700 +Santa Fe Snyder Corp. .......................... 5,600
300 Tosco Corporation .............................. 8,156
1,450 +Transocean Sedco Forex Inc. .................... 48,847
2,700 USX - Marathon Group ........................... 66,656
---------
531,730
---------
FINANCE (7.2%)
1,000 AMBAC Financial Group Inc. ..................... 52,188
900 American International Group Inc. .............. 97,313
100 +Amresco Inc .................................... 141
375 Amsouth Bancorporation ......................... 7,242
200 BankNorth Group Inc. ........................... 5,350
315 Bear Stearns Cos ............................... $13,466
200 Cash America International ..................... 1,950
50 Centura Banks Inc. ............................. 2,206
99 Charter One Financial .......................... 1,893
500 Chase Manhattan Corp. .......................... 38,844
2,900 Citigroup Inc. ................................. 161,131
900 Comerica Inc. .................................. 42,019
75 Commercial Federal Corp. ....................... 1,336
550 Compass Bancshares Inc. ........................ 12,272
100 Cullen Frost Banker ............................ 2,575
77 +Delphi Financial Group ......................... 2,310
750 Dime Bancorp Inc. .............................. 11,344
100 +Express Scripts Inc. Cl-A ...................... 6,400
1,425 Federal National Mortgage Association .......... 88,973
100 Felcor Lodging Trust Inc. ...................... 1,750
181 Fidelity National Financial Inc. ............... 2,602
175 Finova Group Inc. .............................. 6,213
200 First American Financial ....................... 2,487
1,650 First Union Corp. .............................. 54,141
200 FirstMerit Corporation ......................... 4,600
2,150 Fleet Boston Financial Group ................... 74,847
55 +Frontier Insurance ............................. 189
100 Health Care Property Investors ................. 2,388
150 Hilb, Rogal, and Hamilton Co ................... 4,237
1,350 Household International Inc. ................... 50,288
180 Hudson United Banco ............................ 4,601
100 Indymac Mortgage Holdings ...................... 1,275
100 JSB Financial .................................. 5,188
100 Keystone Financial Inc. ........................ 2,106
132 Legg Mason Inc. ................................ 4,785
475 Lincoln National Corp. Ltd. .................... 19,000
250 MAF Bancorp .................................... 5,234
300 Marshall & Ilsley Corp. ........................ 18,844
300 Metris Companies ............................... 10,706
475 Morgan Stanley Dean Witter & Co. ............... 67,806
75 Mutual Risk Management ......................... 1,261
600 National Commerce Bancorporation ............... 13,612
225 Nationwide Financial Services .................. 6,286
900 North Fork Bancorporation ...................... 15,750
975 The PMI Group Inc. ............................. 47,592
1,550 PNC Bank ....................................... 68,975
850 Paine Webber Group Inc. ........................ 32,991
325 T. Rowe Price Associates Inc. .................. 12,005
325 Provident Financial Group Inc. ................. 11,659
50 Radian Group ................................... 2,387
225 Raymond James Financial ........................ 4,205
1,175 Southtrust Corp. ............................... 44,430
450 TCF Financial Corp. ............................ 11,194
100 Trenwick Group Inc. ............................ 1,694
250 UST Corp. ...................................... 7,937
50 US Trust Corp. ................................. 4,009
---------
1,178,227
---------
See Notes to Financial Statements
Page 10
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1999
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW MEDIUM-TERM RETIREMENT FUND (continued)
HEALTH CARE (5.4%)
200 Allergen Inc. .................................. $ 9,950
525 Alpharma Inc. Cl A ............................. 16,144
400 +AmeriSource Health ............................. 6,075
275 Bard (CR) Inc. ................................. 14,575
550 Baxter International ........................... 34,547
400 +Biogen Inc. .................................... 33,800
2,250 Bristol-Myers Squibb ........................... 144,422
275 Cambrex Corp. .................................. 9,470
625 DENTSPLY International ......................... 14,766
300 +Ivax Corp. ..................................... 7,725
850 Johnson & Johnson .............................. 79,156
50 +Magellan Health Services Inc ................... 316
375 +Medimmune Inc. ................................. 62,203
100 Mentor Corp. ................................... 2,581
1,675 Merck & Co. Inc. ............................... 112,330
100 +Orthodontic Centers of America ................. 1,194
150 Owens & Minor Inc. ............................. 1,341
200 Pacificare Health Service ...................... 10,600
2,550 Pfizer Inc. .................................... 82,716
116 +Quintiles Transnational ........................ 2,168
100 +Respironics Inc ................................ 797
100 +Rural/Metro Corp ............................... 428
100 +Safeskin Corp. ................................. 1,213
1,100 Schering-Plough Corp. .......................... 46,406
234 +Shire Pharmaceuticals Group-ADR ................ 6,833
100 +Sola International Inc. ........................ 1,387
225 +Visx Inc. ...................................... 11,644
1,450 Warner Lambert Co. ............................. 118,809
875 +Wellpoint Health NE ............................ 57,695
----------
891,291
----------
INDUSTRIAL (3.3%)
400 +Anixter International .......................... 8,250
1,150 Belden Inc. .................................... 24,150
150 Clarcor Inc. ................................... 2,700
2,050 General Electric ............................... 317,238
375 Kennametal Inc. ................................ 12,609
75 Manitowoc Inc. ................................. 2,550
525 Mark IV Industries Inc. ........................ 9,286
375 Minnesota Mining & Manufacturing ............... 36,703
50 +SPS Technologies Inc. .......................... 1,597
150 +SPX Corp. ...................................... 12,122
250 Toro Co. ....................................... 9,328
2,475 Tyco International ............................. 96,216
----------
532,749
----------
TECHNOLOGY (15.8%)
300 AAR Corp. ...................................... 5,381
875 +ADC Telecommunications Inc. .................... 63,492
100 +Acxiom Corporation ............................. 2,400
1,050 +Adaptec Inc. ................................... 52,369
250 Adobe Systems Inc. ............................. 16,812
1,450 +Altera Corp. ................................... $71,866
210 +Analog Devices Inc. ............................ 19,530
525 +Applied Materials Inc. ......................... 66,511
100 +Aspect Telecommunications ...................... 3,913
450 +Atmel Corp. .................................... 13,303
150 +C-Cube Microsystems ............................ 9,337
2,850 +Cisco Systems .................................. 305,306
100 +Cognex Corp. ................................... 3,900
775 Computer Associates International Inc. ......... 54,202
2,600 +Compuware Corp. ................................ 96,850
100 +Comverse Technology ............................ 14,475
1,100 +Cypress Semiconductor .......................... 35,613
175 Dallas Semiconductors .......................... 11,277
625 +EMC Corp. ...................................... 68,281
425 +Filenet Corp. .................................. 10,837
650 Gerber Scientific Inc. ......................... 14,259
750 +Integrated Device Technology ................... 21,750
2,275 Intel Corp. .................................... 187,261
1,250 International Business Machines Corp. .......... 135,000
275 +Intervoice-Brite Inc. .......................... 6,394
375 +Intuit ......................................... 22,477
150 +Jabil Circuit Inc. ............................. 10,950
800 Johnson Controls ............................... 45,500
450 +Kemet Corp. .................................... 20,278
550 +LSI Logic Corp. ................................ 37,125
835 +Lexmark Holdings Cl A .......................... 75,568
125 +Litton Industries .............................. 6,234
1,675 Lucent Technologies ............................ 125,311
200 +Microchip Technology Inc. ...................... 13,687
3,500 +Microsoft Corp. ................................ 408,625
600 +Midway Games Inc. .............................. 14,363
150 +Novellus Systems Inc. .......................... 18,380
41 +PeopleSoft Inc ................................. 879
100 +Read - Rite Corp ............................... 475
150 +SCI Systems .................................... 12,328
550 +S3 Incorporated ................................ 6,359
100 +Sanmina Corp. .................................. 9,987
300 +Siebel Systems Inc. ............................ 25,200
1,400 +Sun Microsystems Inc. .......................... 108,412
375 +Symantec Corp. ................................. 21,984
200 +Synopsys Inc. .................................. 13,350
150 Technitrol Inc. ................................ 6,675
1,400 +Tellabs Inc. ................................... 89,862
150 +Teradyne Inc. .................................. 9,900
1,300 United Technologies ............................ 84,500
450 +Veritas Software ............................... 64,406
350 +Vishay International ........................... 11,069
270 +Vitesse Semiconductor Corp. .................... 14,158
200 +Waters Corp. ................................... 10,600
175 +Xircom ......................................... 13,125
---------
2,592,086
---------
See Notes to Financial Statements
Page 11
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1999
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW MEDIUM-TERM RETIREMENT FUND (continued)
TELECOMMUNICATIONS (3.9%)
2,250 AT & T Corp. ................................... $114,188
600 Alltel Corp. ................................... 49,612
1,525 Bell Atlantic Corp. ............................ 93,883
1,450 BellSouth Corp. ................................ 67,878
450 Centurytel Inc. ................................ 21,319
1,575 GTE Corporation ................................ 111,136
300 +General Communication .......................... 1,313
2,062 +MCI Worldcom Inc. .............................. 109,441
300 +Voicestream Wireless ........................... 42,694
300 +Western Wireless ............................... 20,025
-------
631,489
-------
TRANSPORTATION (0.5%)
925 +AMR Corp. ...................................... 61,975
525 +Alaska Air Group ............................... 18,441
400 +Yellow Corp. ................................... 6,725
-------
87,141
-------
UTILITIES (1.7%)
3,875 Allegheny Energy Inc. .......................... 104,383
700 Conectiv Inc. .................................. 11,769
300 DTE Energy Co. ................................. 9,412
625 Easterns Utilities ............................. 18,945
700 Energy East Corp. .............................. 14,569
1,000 FPL Group Inc. ................................. 42,812
225 Florida Progress Co. ........................... 9,520
550 GPU Inc. ....................................... 16,466
100 MidAmerican Energy Holdings Co. ................ 3,369
350 Northwest Natural Gas Co. ...................... 7,678
450 Pinnacle West Capital .......................... 13,753
1,350 Questar Corp. .................................. 20,250
600 Utilicorp United Inc. .......................... 11,662
-------
284,588
-------
TOTAL COMMON STOCKS
(Cost $7,921,029) ............................. 9,162,287
----------
OPEN END INVESTMENT COMPANY (5.2%)
(Cost $597,441)
59,000 BT EAFE Equity Index Fund ...................... 860,220
----------
PRINCIPAL
AMOUNT
- ------
U.S. GOVERNMENT OBLIGATIONS &
AGENCY NOTES (22.6%)
U.S. TREASURY BOND (0.3%)
$60,000 5.250% Due 2/15/29 ............................. 49,612
PRINCIPAL
AMOUNT SECURITY VALUE
- ------ -------- -----
TOMORROW MEDIUM-TERM RETIREMENT FUND (CONTINUED)
U.S. TREASURY STRIPS (1.6%)
$330,000 Due 2/15/15 .................................... $118,001
370,000 Due 11/15/22 ................................... 81,089
405,000 Due 11/15/27 ................................... 67,947
---------
267,037
---------
U.S. TREASURY NOTES (19.7%)
1,860,000 6.125% Due 12/31/01 ............................ 1,855,927
1,195,000 5.625% Due 5/15/08 ............................. 1,124,041
120,000 5.500% Due 5/15/09 ............................. 111,806
135,000 6.000% Due 8/15/09 ............................. 130,781
----------
3,222,555
----------
FEDERAL AGENCY AND GOVERNMENT (1.0%)
165,000 Federal National Mortgage Association
6.500% Due 8/15/04 ........................... 162,938
TOTAL U.S. GOVERNMENT OBLIGATIONS
& AGENCY NOTES
(Cost $3,811,675) .............................. 3,702,142
CORPORATE DEBENTURES (14.8%)
FINANCE (9.7%)
150,000 American General Finance
5.750% Due 11/1/03 .................... 141,868
150,000 Barclay's Bank PLC
7.400% Due 12/15/09 ................... 147,166
175,000 Bear Stearns Co. Inc.
7.625% Due 12/7/09 .................... 171,836
100,000 #Dresdner Funding Trust
8.151% Due 6/30/31 .................... 93,684
130,000 FINOVA Capital Corp.
6.150% Due 3/31/03 .................... 125,052
175,000 Ford Motor Credit
7.375% Due 10/28/09 ................... 172,769
200,000 GMAC
5.375% Due 9/30/02 .................... 191,552
140,000 Merrill Lynch & Co.
5.870% Due 11/15/01 ................... 137,395
150,000 Morgan Stanley Dean Witter
7.125% Due 1/15/03 .................... 149,882
150,000 Salomon Inc.
7.300% Due 5/15/02 .................... 150,454
110,000 Sprint Capital Corp.
6.900% Due 5/1/19 .................... 100,043
---------
1,581,701
---------
See Notes to Financial Statements
Page 12
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1999
PRINCIPAL
AMOUNT SECURITY VALUE
- ------ -------- -----
TOMORROW MEDIUM-TERM RETIREMENT FUND (CONTINUED)
INDUSTRIAL (5.1%)
$85,000 Abitibi - Consolidated
7.500% Due 4/1/28 ..................... $73,188
100,000 Amerada Hess Corp.
7.875% Due 10/1/29 .................... 97,530
50,000 Burlington Resources
9.125% Due 10/1/21 .................... 55,470
175,000 Cooper Tire & Rubber Co.
8.000% Due 12/15/19 ................... 168,117
95,000 Laidlaw Inc.
7.875% Due 4/15/05 .................... 89,820
170,000 Time Warner
9.125% Due 1/15/13 .................... 186,177
175,000 #Yosemite Securities Trust
8.250% Due 11/15/04 ................... 172,204
---------
842,506
---------
TOTAL CORPORATE DEBENTURES
(Cost $2,476,983) .......................... 2,424,207
---------
ASSET BACKED SECURITIES (0.9%)
(Cost $163,180)
155,000 MBNA Master Credit Card
6.450% Due 2/15/08 ........................ 150,640
TOTAL INVESTMENTS (99.4%)
(Cost $14,970,308) ........................ 16,299,496
OTHER ASSETS IN EXCESS
OF LIABILITIES (0.6%) ...................... 91,004
TOTAL NET ASSETS (100.0%) ..................... $16,390,500
<FN>
+ Non-income producing security.
# SEC Rule 144A Security. Such security has limited markets and trades
only among qualified institutional buyers.
</FN>
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW SHORT-TERM RETIREMENT FUND
COMMON STOCKS (34.5%)
BASIC MATERIALS (1.3%)
<C> <S> <C>
2,050 AK Steel Holding Corp. ......................... $38,694
3,450 Boise Cascade Corp. ............................ 139,725
2,350 +Cytec Industries Inc. .......................... 54,344
900 Eastman Kodak Co. .............................. 59,625
1,325 Georgia Pacific Co. ............................ 67,244
2,700 Sherwin Williams Co. ........................... 56,700
----------
416,332
----------
COMMERCIAL SERVICES (0.5%)
2,550 Viad Corp. ..................................... 71,081
1,350 Young & Rubicam Inc. ........................... 95,513
----------
166,594
----------
CONSUMER CYCLICALS (2.6%)
500 Dayton Hudson Corp. ............................ 36,719
1,850 +Federated Department Stores .................... 93,541
3,550 Ford Motor Company ............................. 189,703
2,475 Home Depot Inc. ................................ 169,692
3,400 +Toys R Us ...................................... 48,663
4,050 Wal Mart Stores Inc. ........................... 279,956
----------
818,274
----------
CONSUMER NON CYCLICALS (2.7%)
1,200 Anheuser- Busch Companies Inc. ................. 85,050
1,300 Best Foods ..................................... 68,331
1,850 Fortune Brands ................................. 61,166
3,300 General Mills Inc. ............................. 117,975
1,175 The PMI Group Inc. ............................. 57,355
2,400 Philip Morris Companies Inc. ................... 55,650
1,450 Proctor & Gamble Co. ........................... 158,866
1,700 +Quaker Oats .................................... 111,562
2,800 Sara Lee Corp. ................................. 61,775
3,650 Supervalu Inc. ................................. 73,000
----------
850,730
----------
CONSUMER SERVICES (1.4%)
2,800 Brunswick Corp. ................................ 62,300
4,050 Darden Restaurants Inc. ........................ 73,406
1,900 Donnelley RR & Sons ............................ 47,144
2,450 +Harrah's Entertainment ......................... 64,772
3,100 +Jack in the Box Inc. ........................... 64,131
1,600 Time Warner Inc. ............................... 115,900
----------
427,653
----------
ENERGY (2.1%)
1,950 Coastal Corp. .................................. 69,103
1,600 Exxon Mobil Corp. .............................. 128,900
4,100 Occidental Petroleum Corp. ..................... 88,662
3,650 Royal Dutch Petroleum .......................... 220,597
1,800 +Transocean Sedco Forex Inc. ................... 60,638
4,100 USX - Marathon Group ........................... 101,219
----------
669,119
----------
See Notes to Financial Statements
Page 13
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1999
NUMBER
OF SHARES SECURITY VALUE
- --------- -------- -----
TOMORROW SHORT-TERM RETIREMENT FUND (continued)
FINANCE (4.3%)
1,150 AMBAC Financial Group Inc. ..................... $60,016
1,500 American International Group ................... 162,187
1,150 Chase Manhattan Corp. .......................... 89,340
4,150 Citigroup Inc. ................................. 230,584
1,350 Comerica Inc. .................................. 63,028
2,000 Federal National Mortgage Association .......... 124,875
2,500 First Union Corp. .............................. 82,031
3,375 Fleet Boston Financial Group Inc. .............. 117,492
2,100 Household International Inc. ................... 78,225
725 Lincoln National Corp. Ltd. .................... 29,000
725 Morgan Stanley Dean Witter & Co. ............... 103,494
2,500 PNC Bank ....................................... 111,250
1,350 Paine Webber Group Inc. ........................ 52,397
1,800 Southtrust Corp. ............................... 68,063
---------
1,371,982
---------
HEALTH CARE (3.3%)
800 Baxter International ........................... 50,250
3,500 Bristol-Myers Squibb Co. ....................... 224,656
1,300 Johnson & Johnson Co. .......................... 121,063
2,550 Merck & Co. Inc. ............................... 171,009
950 +Pacificare Health Systems ..................... 50,350
4,750 Pfizer Inc. .................................... 154,078
2,000 Schering-Plough Corp. .......................... 84,375
2,350 Warner Lambert Co. ............................. 192,553
---------
1,048,334
---------
INDUSTRIAL (2.2%)
3,100 General Electric ............................... 479,725
675 Minnesota Mining & Manufacturing ............... 66,066
4,175 Tyco International Ltd. ........................ 162,303
---------
708,094
---------
TECHNOLOGY (10.1%)
1,350 +ADC Telecommunications ......................... 97,959
1,400 +Adaptec Inc. ................................... 69,825
1,650 +Altera Corp. ................................... 81,778
800 +Applied Materials Inc. ......................... 101,350
4,450 +Cisco Systems .................................. 476,706
1,200 Computer Associates International Inc. ......... 83,925
3,450 +Compuware Corp. ................................ 128,512
925 +EMC Corp. ...................................... 101,056
3,575 Intel Corp. .................................... 294,267
1,950 International Business Machines Corp. .......... 210,600
1,750 Johnson Controls ............................... 99,531
950 +LSI Logic Corp. ................................ 64,125
1,150 +Lexmark Holdings Class A ....................... 104,075
850 +Litton Industries .............................. 42,394
2,650 Lucent Technologies ............................ $198,253
5,650 +Microsoft Corp. ................................ 659,638
2,100 +Sun Microsystems Inc. .......................... 162,619
1,900 +Tellabs Inc. ................................... 121,956
1,950 United Technologies ............................ 126,750
---------
3,225,319
---------
TELECOMMUNICATION (3.0%)
4,075 A T & T Corp. .................................. 206,806
1,075 Alltel Corp. ................................... 88,889
3,100 Bell Atlantic Corp. ............................ 190,844
3,250 BellSouth Corp. ................................ 152,141
3,712 +MCI Worldcom Inc. .............................. 196,994
1,250 +Nextel Communications Inc. ..................... 128,906
---------
964,580
---------
TRANSPORTATION (0.3%)
1,450 +AMR Corp. ...................................... 97,150
UTILITY (0.7%)
2,350 Constellation Energy Group ..................... 68,150
3,300 FPL Group Inc. ................................. 141,281
209,431
Total Common Stock
(Cost $9,584,450) ............................ 10,973,592
PRINCIPAL
AMOUNT
U.S. GOVERNMENT OBLIGATIONS AND
AGENCY NOTES (26.9%)
U.S. TREASURY BONDS (1.1%)
$410,000 5.250% Due 2/15/29 ............................. 339,018
U.S. TREASURY STRIPS (2.7%)
980,000 Due 2/15/15 .................................... 350,428
1,375,000 Due 11/15/22 ................................... 301,345
1,210,000 Due 11/15/27 ................................... 203,002
854,775
U.S. TREASURY NOTES (21.6%)
2,060,000 6.125% Due 12/31/01 ........................... 2,055,489
4,650,000 5.625% Due 5/15/08 ............................ 4,373,883
240,000 5.500% Due 5/15/09 ............................ 223,613
235,000 6.000% Due 8/15/09 ............................ 227,656
6,880,641
FEDERAL AGENCY AND
GOVERNMENT (1.5%)
490,000 Federal National Mortgage Association Note
6.500% Due 8/15/04 483,875
---------
See Notes to Financial Statements
Page 14
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
SCHEDULES OF INVESTMENTS AT DECEMBER 31, 1999
PRINCIPAL
AMOUNT SECURITY VALUE
- ------ -------- -----
TOMORROW SHORT-TERM RETIREMENT FUND (CONTINUED)
TOTAL U.S. GOVERNMENT OBLIGATIONS
& AGENCY NOTES
(Cost $8,815,529) ........................... $8,558,309
CORPORATE DEBENTURES (34.4%)
CONSUMER NON CYCLICALS (0.7%)
$230,000 McKesson Corp. 6.600% Due 3/1/00 ............... 230,039
FINANCE (24.4%)
70,000 Associates Corp. NA
7.520% Due 3/1/00 .............................. 70,162
400,000 Associates Corp. NA
6.500% Due 10/15/02 ............................ 394,628
575,000 Barclays Bank Plc Yankee
7.400% Due 12/15/09 ............................ 564,138
235,000 Bear Stearns Companies Inc.
6.500% Due 7/5/00 .............................. 234,718
525,000 Bear Stearns Companies Inc.
7.625% Due 12/7/09 ............................. 515,508
160,000 Beneficial Corp.
6.250% Due 2/18/03 ............................. 154,829
510,000 Commercial Credit
8.250% Due 11/1/01 ............................. 520,985
450,000 Finova Cap Corp.
6.150% Due 3/31/03 ............................. 432,873
225,000 First Union Corp.
6.600% Due 6/15/00 ............................. 225,038
520,000 Ford Motor Credit
6.570% Due 3/19/01 ............................. 518,336
50,000 Ford Motor Credit
6.125% Due 1/9/06 .............................. 46,808
525,000 Ford Motor Credit
7.375% Due 10/28/09 ............................ 518,306
200,000 G.E. Capital Corp.
8.750% Due 5/21/07 ............................. 216,048
450,000 GMAC 5.750% Due 11/10/03 ....................... 428,472
275,000 Merrill Lynch & Co.
6.620% Due 6/13/00 ............................. 275,429
285,000 Merrill Lynch & Co.
5.870% Due 11/15/01 ............................ 279,696
400,000 Morgan Stanley Dean Witter & Co.
6.090% Due 3/9/11 .............................. 397,148
550,000 Norwest Financial Inc.
5.375% Due 9/30/03 ............................. 518,199
215,000 Salomon Inc.
6.700% Due 7/5/00 .............................. 215,095
860,000 Salomon Inc.
7.300% Due 5/15/02 ............................. 862,606
265,000 Sprint Capital Corp.
6.900% Due 5/1/19 .............................. 241,012
120,000 USL Capital Corp.
6.500% Due 12/1/03 ............................. 116,702
---------
7,746,736
---------
PRINCIPAL
AMOUNT SECURITY VALUE
- ------ -------- -----
INDUSTRIAL (7.5%)
$300,000 Abitibi-Consolidated 7.500% Due 4/1/28 ......... $258,309
315,000 Amerada Hess Corp.7.875% Due 10/1/29 ........... 307,219
125,000 Burlington Resources 9.125% Due 10/1/21 ........ 138,675
500,000 Cooper Tire & Rubber Co. 8.000% Due 12/15/19 ... 480,335
525,000 #Fortune Brands Inc. 7.125% Due 11/1/04 ......... 517,124
155,000 Time Warner 9.125% Due 1/15/13 ................. 169,750
525,000 #Yosemite Securities Trust 8.250% Due 11/15/04 .. 516,610
---------
2,388,022
---------
REAL ESTATE INVESTMENT TRUST (1.8%)
235,000 Carramerica Realty Corp. 6.625% Due 10/1/00 .... 232,782
350,000 #Dresdner Funding Trust I 8.151% Due 6/30/31 .... 327,894
---------
560,676
---------
TOTAL CORPORATE DEBENTURES
(Cost $11,188,645) 10,925,473
-----------
ASSET BACKED SECURITIES (1.5%)
(Cost $505,331)
480,000 MBNA Master Credit Card
6.450% Due 2/15/08 466,498
-----------
EURODOLLAR DEPOSIT (2.2%)
(Cost $699,000)
699,000 Societe Generale
3.000% Due 1/3/00 699,000
-----------
TOTAL INVESTMENTS (99.5%)
(Cost $30,792,955) 31,622,872
OTHER ASSETS IN EXCESS
OF LIABILITIES (0.5%) 174,156
-----------
TOTAL NET ASSETS (100.0%) $31,797,028
===========
<FN>
+ Non-income producing security.
# SEC Rule 144A Security. Such security has limited markets and is
trades among qualified institutional buyers.
</FN>
</TABLE>
See Notes to Financial Statements
Page 15
<PAGE>
<TABLE>
<CAPTION>
TOMORROW FUNDS RETIREMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES AT DECEMBER 31, 1999
LONG- MEDIUM- SHORT-
TERM TERM TERM
RETIREMENT RETIREMENT RETIREMENT
---------- ---------- ----------
ASSETS
<S> <C> <C> <C>
Investments at value # .............................. $ 10,074,301 $ 16,299,496 $ 31,622,872
Cash ................................................ 14,635 132,842 231
Receivable for Fund shares sold ..................... 47,157 15,708 10,702
Receivable from Adviser ............................. 2,724 0 0
Dividends and interest receivable ................... 21,877 63,001 235,790
Deferred organizational costs and prepaid expenses . 10,459 11,365 10,663
------------ ------------ ------------
10,171,153 16,522,412 31,880,258
------------ ------------ ------------
LIABILITIES
Advisory fees payable (Note 5) ...................... 0 3,178 19,785
Administration fees payable (Note 5) ................ 0 0 841
Payable for investment securities purchased ......... 14,225 0 0
Payable for Fund shares redeemed .................... 165 84,055 8,948
Distribution fees payable (Adviser Shares) ......... 7,430 1,479 14,345
Service fees payable (Institutional Shares) ........ 595 12,448 2,823
Other accrued expenses .............................. 31,737 30,752 36,488
------------ ------------ ------------
54,152 131,912 83,230
------------ ------------ ------------
NET ASSETS .......................................... $ 10,117,001 $ 16,390,500 $ 31,797,028
============ ============ ============
NET ASSETS REPRESENTED BY:
Shares of beneficial interest (par $0.001) .......... $ 1,122 $ 1,773 $ 3,180
Paid-in surplus ..................................... 8,935,573 14,929,608 30,903,962
Accumulated undistributed net investment income ..... 7,700 48,222 6,258
Undistributed realized gains on investments ......... 24,801 81,709 53,711
Net unrealized appreciation on investments .......... 1,147,805 1,329,188 829,917
------------ ------------ ------------
NET ASSETS .......................................... $ 10,117,001 $ 16,390,500 $ 31,797,028
============ ============ ============
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE:
ADVISER SHARES:
Net Assets .......................................... $ 8,085,763 $ 13,382,915 $ 13,590,142
Shares of beneficial interest issued and outstanding 899,209 1,439,815 1,361,038
------------ ------------ ------------
Net asset value per share ........................... $ 8.99 $ 9.29 $ 9.99
============ ============ ============
INSTITUTIONAL SHARES:
Net Assets .......................................... $ 2,031,238 $ 3,007,585 $ 18,206,886
Shares of beneficial interest issued and outstanding 222,699 333,348 1,819,113
------------ ------------ ------------
Net asset value per share ........................... $ 9.12 $ 9.02 $ 10.01
============ ============ ============
# INVESTMENTS AT COST ............................... 8,926,496 14,970,308 30,792,955
UNREALIZED APPRECIATION/(DEPRECIATION): *
Gross appreciation ................................. 1,743,561 2,064,641 1,920,635
Gross depreciation ................................. (595,756) (735,453) (1,090,718)
------------ ------------ ------------
NET UNREALIZED APPRECIATION ........................ 1,147,805 1,329,188 829,917
============ ============ ============
<FN>
* Based on cost of securities for Federal Income tax purposes which does not
differ substantially from book cost.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TOMORROW FUNDS RETIREMENT TRUST
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999
- --------------------------------------------------------------------------------
LONG-TERM MEDIUM-TERM SHORT-TERM
RETIREMENT RETIREMENT RETIREMENT
---------- ---------- ----------
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividends .................................. $ 96,205 $ 137,044 $ 147,719
Interest ................................... 123,444 441,778 1,371,919
------- ------- ---------
219,649 578,822 1,519,638
------- ------- ---------
EXPENSES:
Investment advisory fees - Note 5 .......... 70,931 128,121 246,106
Fund accounting fees ....................... 42,813 48,311 47,207
Registration fees and expenses ............. 15,260 13,225 17,260
Professional fees .......................... 26,120 26,527 35,145
Transfer agent fees and expenses
(Advisor Shares) ................... 24,182 24,211 24,528
Transfer agent fees and expenses
(Institutional Shares) ............. 24,497 24,419 24,815
Distribution fees (Adviser Shares) - Note 5 38,178 72,383 79,577
Custodian fees and expenses - Note 7 ....... 11,391 8,373 14,339
Amortization of organization expenses ...... 9,494 9,479 9,479
ShareholdersO reports ...................... 594 3,040 2,674
TrusteesO fees and expenses ................ 7,662 7,672 8,008
Administration fees - Note 5 ............... 8,512 15,374 29,533
Service fees (Institutional Shares) - Note 5 766 1,578 35,727
Other expenses ............................. 3,100 3,148 4,733
------- ------- ---------
TOTAL EXPENSES ............................. 283,500 385,861 579,131
Less fees waived by Adviser and
Administrator - Note 5 ............. (79,442) (74,226) (45,171)
Less expenses reimbursed
by Adviser - Note 5 ................ (41,284) (19,819) (1,905)
Less expenses paid indirectly - Note 7 ..... (5,613) (4,310) (6,580)
------- ------- ---------
NET EXPENSES ............................... 157,161 287,506 525,475
------- ------- ---------
NET INVESTMENT INCOME ...................... 62,488 291,316 994,163
------- ------- ---------
REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS
Net realized gain on investments ........... 892,051 1,036,935 1,222,327
Change in unrealized (depreciation)
on investments ..................... (45,296) (593,919) (1,463,153)
------- ------- ---------
Net Gain/(Loss) on Investments ............. 846,755 443,016 (240,826)
------- ------- ---------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .................... $ 909,243 $ 734,332 $ 753,337
========= =========== ===========
</TABLE>
See Notes to Financial Statements
Page 17
<PAGE>
<TABLE>
<CAPTION>
TOMORROW FUNDS RETIREMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1999 AND 1998
LONG-TERM MEDIUM-TERM SHORT-TERM
RETIREMENT RETIREMENT RETIREMENT
---------- ---------- ----------
1999 1998 1999 1998 1999 1998
---- ---- ---- ---- ---- ----
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income ................ $ 62,488 $ 93,857 $ 291,316 $ 303,595 $ 994,163 $ 881,606
Net realized gain
on investments and futures ... 892,051 75,545 1,036,935 764,785 1,222,327 675,315
Change in unrealized appreciation/
(depreciation) on investments
and futures .................. (45,296) 874,375 (593,919) 1,147,490 (1,463,153) 1,647,460
------------ ----------- ------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .... 909,243 1,043,777 734,332 2,215,870 753,337 3,204,381
------------ ----------- ------------ ------------ ------------ ------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Adviser Shares ....................... (40,650) (54,368) (216,431) (212,159) (388,593) (403,730)
Institutional Shares ................. (22,314) (16,152) (62,826) (40,769) (580,239) (438,476)
------------ ----------- ------------ ------------ ------------ ------------
TOTAL DIVIDENDS TO
SHAREHOLDERS FROM NET
INVESTMENT INCOME ............ (62,964) (70,520) (279,257) (252,928) (968,832) (842,206)
------------ ----------- ------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDER
FROM NET REALIZED GAINS:
Adviser Shares ............... (723,406) (38,834) (852,199) (594,045) (576,190) (341,618)
Institutional Shares ......... (180,540) (8,974) (188,477) (95,128) (712,866) (321,549)
------------ ----------- ------------ ------------ ------------ ------------
Total distributions from net
realized gains ............... (903,946) (47,808) (1,040,676) (689,173) (1,289,056) (663,167)
------------ ----------- ------------ ------------ ------------ ------------
TRANSACTIONS IN SHARES OF
BENEFICIAL INTEREST:
Received on issuance:
Shares sold .................. 3,377,686 5,150,936 3,578,706 5,725,284 6,753,326 24,857,758
Shares issued in reinvestment
of dividends and distributions 967,753 118,328 1,319,933 942,101 2,257,888 1,505,372
Shares redeemed .............. (3,008,583) (2,639,065) (4,815,479) (4,700,383) (8,974,365) (10,406,723)
------------ ----------- ------------ ------------ ------------ ------------
NET INCREASE FROM CAPITAL
SHARE TRANSACTIONS ................ 1,336,856 2,630,199 83,160 1,967,002 36,849 15,956,407
------------ ----------- ------------ ------------ ------------ ------------
TOTAL INCREASE/(DECREASE)
IN NET ASSETS ................ 1,279,189 3,555,648 (502,441) 3,240,771 (1,467,702) 17,655,415
NET ASSETS:
Beginning of year .................... 8,837,812 5,282,164 16,892,941 13,652,170 33,264,730 15,609,315
------------ ----------- ------------ ------------ ------------ ------------
End of year .......................... $ 10,117,001 $ 8,837,812 $ 16,390,500 $ 16,892,941 $ 31,797,028 $ 33,264,730
============ =========== ============ ============ ============ ============
<FN>
+ Includes undistributed
net investment income ........ $ 7,700 $ 17,323 $ 48,222 $ 44,740 $ 6,258 $ 50,960
------------ ----------- ------------ ------------ ------------ ------------
</FN>
</TABLE>
See Notes to Financial Statements
Page 18
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. GENERAL
The Tomorrow Long-Term Retirement Fund ("Long-Term Fund"), Tomorrow
Medium-Term Retirement Fund ("Medium-Term Fund"), Tomorrow Short-Term Retirement
Fund ("Short-Term Fund"), 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 (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.
Page 19
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST (continued)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
MONEY MARKET SECURITIES - Investments in money market and other short-term (60
days or less) securities are valued at amortized cost, which has been determined
by the Trust's Board of Trustees to represent the fair market value of such
securities.
FOREIGN SECURITIES - Securities listed or admitted to trading on an
international securities exchange, including options, are valued at the last
sale price, at the close of the primary international exchange on the day that
the Fund's calculate their net asset values. Unlisted foreign securities and
listed foreign securities for which there are no sales reported on the valuation
date are valued at the mean between the most recent bid and asked prices.
Certain risks result from investing in foreign securities in addition to the
usual risk inherent in domestic investments. Such risks include future
political, economical and currency exchange developments including restrictions
and changes in foreign law.
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 specific
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 year ended December 31, 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 their taxable income to their 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 and are recorded on ex-dividend
date.
DISTRIBUTIONS FROM NET REALIZED 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.
Page 20
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST (continued)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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.
3. ORGANIZATIONAL EXPENSES
Weiss, Peck & Greer. L.L.C. ("WPG"), the Funds' Investment Adviser, paid the
organizational expenses of the Fund approximating $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.
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 year ended December 31, 1999 WPG voluntarily
agreed not to impose its advisory fee applicable to the Long-Term Fund, and
waived $74,226 and $45,171 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, service fees of Institutional Class Shares, distribution fees of
Adviser Class Shares and extraordinary legal fees and expenses) to 1.25% of the
average daily net assets for each class. 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 to waive it's entire administration services
fee applicable to the Funds for the year ended December 31, 1999.
Page 21
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST (continued)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 year ended December 31, 1999 payments pursuant to the Distribution Plan
from the Long-Term Fund, Medium-Term Fund and Short-Term Fund amounted to
$38,178, $72,383 and $79,577, respectively. Of these amounts, WPG earned
$16,803, $32,628 and $35,616, 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 purchased, (other than short term
investments), total commissions and commissions received by WPG on such
transactions for the year ended December 31, 1999 were as follows:
PROCEEDS COST OF COMMISSIONS
FROM SECURITIES SECURITIES TOTAL RECEIVED
SOLD PURCHASED COMMISSIONS BY WPG
---- --------- ----------- ------
Long-Term Fund $9,399,535 $10,054,217 $9,728 $7,663
Medium-Term Fund 35,329,839 35,037,411 13,718 10,292
Short-Term Fund 91,489,111 92,165,565 15,629 10,596
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 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. The Funds' custodian fee and related offset for
the year ended December 31, 1999 were as follows:
CUSTODIAN
CUSTODIAN FEE CREDIT RECEIVED
------------- ---------------
Long-Term Fund $11,391 $5,613
Medium-Term Fund 8,373 4,310
Short-Term Fund 14,339 6,580
Page 22
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST (continued)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
8. CAPITAL SHARE TRANSACTIONS
Transaction in shares of the Funds for the years ended December 31, 1999 and
1998 are summarized below:
LONG-TERM
1999 1998
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
ADVISER CLASS SHARES
Sold ..................... 284,126 $ 2,596,712 499,807 $ 4,212,181
Reinvested from dividends
and distributions ..... 88,326 764,019 10,519 93,202
Redeemed ................. (258,737) (2,386,405) (250,398) (2,085,866)
-------- ----------- -------- -----------
Net increase ............. 113,715 $ 974,326 259,928 $ 2,219,517
-------- ----------- -------- -----------
INSTITUTIONAL CLASS SHARES
Sold ..................... 83,542 780,974 110,457 $ 938,755
Reinvested from dividends
and distributions 23,231 203,734 2,795 25,126
Redeemed ................. (66,795) (622,178) (65,357) (553,199)
-------- ----------- -------- -----------
Net increase ............. 39,978 $ 362,530 47,895 $ 410,682
-------- ----------- -------- -----------
Net increase in Fund ..... 153,693 $ 1,336,856 307,823 $ 2,630,199
-------- ----------- -------- -----------
Page 23
<PAGE>
MEDIUM-TERM
1999 1998
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Adviser Class Shares
Sold ..................... 230,644 $ 2,192,178 487,640 $ 4,563,226
Reinvested from dividends
and distributions ..... 117,747 1,068,630 84,863 806,203
Redeemed ................. (418,915) (4,031,392) (415,935) (3,903,770)
-------- ----------- -------- -----------
Net increase - Adviser Class (70,524) ($ 770,584) 156,568 $ 1,465,659
-------- ----------- -------- -----------
Institutional Class Shares
Sold ..................... 147,133 $ 1,386,528 121,042 $ 1,162,058
Reinvested from dividends
and distributions ..... 28,550 251,303 14,692 135,897
Redeemed ................. (83,754) (784,087) (87,303) (796,612)
-------- ----------- -------- -----------
Net increase - Institutional 91,929 $ 853,744 48,431 $ 501,343
-------- ----------- -------- -----------
Net increase in Fund ..... 21,405 $ 83,160 204,999 $ 1,967,002
-------- ----------- -------- -----------
================================================================================
SHORT-TERM
1999 1998
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Adviser Class Shares
Sold ..................... 210,906 $ 2,217,623 823,411 $ 8,407,160
Reinvested from dividends
and distributions ..... 96,963 964,783 71,806 745,348
Redeemed ................. (583,021) (6,119,476) (668,780) (6,895,655)
-------- ----------- -------- -----------
Net increase - Adviser Class (275,152) ($2,937,070) 226,437 $ 2,256,853
-------- ----------- -------- -----------
Institutional Class Shares
Sold ..................... 469,584 $ 4,535,703 1,607,353 $16,450,598
Reinvested from dividends
and distributions ..... 129,700 1,293,105 72,869 760,024
Redeemed ................. (308,892) (2,854,889) (337,168) (3,511,068)
-------- ----------- -------- -----------
Net increase - Institutional 290,392 $ 2,973,919 1,343,054 $13,699,554
-------- ----------- -------- -----------
Net increase in Fund ..... 15,240 $ 36,849 1,569,491 $15,956,407
-------- ----------- -------- -----------
Page 24
<PAGE>
TOMORROW FUNDS RETIREMENT TRUST (continued)
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
9. FEDERAL INCOME TAX STATUS OF DIVIDENDS (UNAUDITED)
Long-term capital gain distributions paid to shareholders by the Funds
during the year ended December 31, 1999, whether taken in shares or cash were as
follows: Long-Term Fund $617,992, Medium-Term Fund $1,157,639 and Short-Term
Fund $1,182,920.
Page 25
<PAGE>
<TABLE>
<CAPTION>
TOMORROW FUNDS RETIREMENT TRUST
Financial Highlights
$ PER SHARE
NET
NET REALIZED TOTAL DIVIDENDS DISTRI- NET
ASSET AND INCOME FROM BUTIONS ASSET
VALUE AT NET UNREALIZED FROM NET FROM TOTAL VALUE AT NET
BEGINNING INVESTMENT GAINS ON INVESTMENT INVESTMENT CAPITAL DISTR- END OF TOTAL ASSETS
OF PERIOD INCOME SECURITIES OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN (000'S)
--------- ------ ---------- ---------- ------ ----- -------------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Long-Term Retirement
Adviser Shares
For the period March 7, 1996*
through December 31, 1996 $ 6.50 $ 0.04 $ 0.55 $ 0.59 $(0.06) $ (0.05) $(0.11) $ 6.98 9.08% $978
For the year ended
December 31, 1997 ....... 6.98 0.09 1.62 1.71 (0.08) (0.63) (0.71) 7.98 24.50 4,194
For the year ended
December 31, 1998 ....... 7.98 0.10 1.14 1.24 (0.07) (0.05) (0.12) 9.10 15.58 7,150
For the year ended
December 31, 1999 ....... 9.10 0.04 0.79 0.83 (0.05) (0.89) (0.94) 8.99 9.53 8,086
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) 7.05 9.03 282
For the year ended
December 31, 1997 ....... 7.05 0.06 1.69 1.75 (0.10) (0.63) (0.73) 8.07 24.84 1,088
For the year ended
December 31, 1998 ....... 8.07 0.13 1.17 1.30 (0.09) (0.05) (0.14) 9.23 16.16 1,687
For the year ended
December 31, 1999 ....... 9.23 0.08 0.81 0.89 (0.11) (0.89) (1.00) 9.12 10.07 2,031
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) 8.07 8.89 3,416
For the year ended
December 31, 1997 ....... 8.07 0.13 1.40 1.53 (0.13) (0.62) (0.75) 8.85 18.96 11,987
For the year ended
December 31, 1998 ....... 8.85 0.18 1.22 1.40 (0.15) (0.42) (0.57) 9.68 15.94 14,617
For the year ended
December 31, 1999 ....... 9.68 0.17 0.23 0.40 (0.16) (0.63) (0.79) 9.29 4.32 13,383
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) 7.86 8.54 265
For the year ended
December 31, 1997 ....... 7.86 0.24 1.29 1.53 (0.15) (0.61) (0.76) 8.63 19.48 1,165
For the year ended
December 31, 1998 ....... 8.63 0.22 1.18 1.40 (0.18) (0.42) (0.60) 9.43 16.36 2,276
For the year ended
December 31, 1999 ....... 9.43 0.19 0.24 0.43 (0.21) (0.63) (0.84) 9.02 4.77 3,008
</TABLE>
<TABLE>
<CAPTION>
RATIOS
RATIO INFORMATION
ASSUMING NO FEE WAIVERS,
REIMBURSEMENTS OR
CUSTODY FEE
RATIO OF EARNINGS CREDIT RECEIVED
RATIO OF NET -------------------------
EXPENSES INCOME TO RATIO OF RATIO OF
TO AVERAGE AVERAGE PORTFOLIO EXPENSES NET INCOME
Long-Term Retirement NET NET TURNOVER TO AVERAGE TO AVERAGE
Adviser Shares ASSETS ASSETS RATE NET ASSETS NET ASSETS
- -------------- ------ ------ ---- ---------- ----------
<S> <C> <C> <C> <C> <C>
For the period March 7, 1996*
through December 31, 1996 1.75%+ 1.63%+ 25.09% 45.36%+ -41.98%+
For the year ended
December 31, 1997 ....... 1.75%+ 1.30 66.64 5.61 -2.56
For the year ended
December 31, 1998 ....... 1.75 1.17 60.96 3.25 -0.33
For the year ended
December 31, 1999 ....... 1.75 0.57 104.49 2.89 -0.57
Institutional Shares
For the period April 2, 1996*
through December 31, 1996 1.50+ 1.97+ 25.09 40.49+ -37.02+
For the year ended
December 31, 1997 ....... 1.45 1.67 66.64 7.52 -4.40
For the year ended
December 31, 1998 ....... 1.27 1.64 60.96 4.09 -1.18
For the year ended
December 31, 1999 ....... 1.29 1.03 104.49 3.46 -1.13
Medium-Term Retirement
Adviser Shares
For the period March 7, 1996*
through December 31, 1996 1.75+ 1.73+ 22.56 15.88+ -12.40+
For the year ended
December 31, 1997 ....... 1.75 1.80 90.67 2.92 0.63
For the year ended
December 31, 1998 ....... 1.75 1.89 155.74 2.23 1.41
For the year ended
December 31, 1999 ....... 1.75 1.63 208.58 2.21 1.17
Institutional Shares
For the period April 2, 1996*
through December 31, 1996 1.50+ 1.96+ 22.56 20.86+ -17.40+
For the year ended
December 31, 1997 ....... 1.39 2.33 90.67 4.41 -0.69
For the year ended
December 31, 1998 ....... 1.28 2.38 155.74 2.79 0.87
For the year ended
December 31, 1999 ....... 1.31 2.10 208.58 2.54 0.87
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
$ PER SHARE
NET
NET REALIZED TOTAL DIVIDENDS DISTRI- NET
ASSET AND INCOME FROM BUTIONS ASSET
VALUE AT NET UNREALIZED FROM NET FROM TOTAL VALUE AT NET
BEGINNING INVESTMENT GAINS ON INVESTMENT INVESTMENT CAPITAL DISTR- END OF TOTAL ASSETS
OF PERIOD INCOME SECURITIES OPERATIONS INCOME GAINS BUTIONS PERIOD RETURN (000'S)
--------- ------ ---------- ---------- ------ ----- -------------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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) $ 9.16 8.54% $4,459
For the year ended
December 31, 1997 ....... 9.16 0.22 1.47 1.69 (0.20) (0.87) (1.07) 9.78 18.46 13,786
For the year ended
December 31, 1998 ....... 9.78 0.30 0.89 1.19 (0.26) (0.22) (0.48) 10.49 12.22 17,157
For the year ended
December 31, 1999 ....... 10.49 0.33 (0.11) 0.22 (0.29) (0.43) (0.72) 9.99 2.12 13,590
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 9.21 8.23 304
For the year ended
December 31, 1997 ....... 9.21 0.17 1.55 1.72 (0.24) (0.87) (1.11) 9.82 18.69 1,823
For the year ended
December 31, 1998 ....... 9.82 0.34 0.90 1.24 (0.30) (0.22) (0.52) 10.54 12.68 16,108
For the year ended
December 31, 1999 ....... 10.54 0.31 (0.06) 0.25 (0.35) (0.43) (0.78) 10.01 2.40 18,207
</TABLE>
<TABLE>
<CAPTION>
RATIOS
RATIO INFORMATION
ASSUMING NO FEE WAIVERS,
REIMBURSEMENTS OR
CUSTODY FEE
RATIO OF EARNINGS CREDIT RECEIVED
RATIO OF NET -------------------------
EXPENSES INCOME TO RATIO OF RATIO OF
TO AVERAGE AVERAGE PORTFOLIO EXPENSES NET INCOME
NET NET TURNOVER TO AVERAGE TO AVERAGE
ASSETS ASSETS RATE NET ASSETS NET ASSETS
------ ------ ---- ---------- ----------
SHORT-TERM RETIREMENT
Adviser Shares
<S> <C> <C> <C> <C> <C>
For the period March 7, 1996*
through December 31, 1996 1.75%+ 2.08%+ 14.16% 15.68%+ -11.85%+
For the year ended
December 31, 1997 1.75 2.41 145.44 2.65 1.51
For the year ended
December 31, 1998 1.75 3.00 263.77 1.96 2.79
For the year ended
December 31, 1999 1.75 2.87 286.76 1.92 2.70
Institutional Shares
For the period April 2, 1996*
through December 31, 1996 1.50+ 2.31+ 14.16 19.10+ -15.29+
For the year ended
December 31, 1997 1.44 2.87 145.44 4.01 0.30
For the year ended
December 31, 1998 1.45 3.31 263.77 1.64 3.12
For the year ended
December 31, 1999 1.46 3.18 286.76 1.62 3.02
<FN>
+ Annualized
* Commencement of operations.
</FN>
</TABLE>
See notes to financial statements.
Page 27
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Trustees of:
TOMORROW LONG-TERM RETIREMENT FUND
TOMORROW MEDIUM-TERM RETIREMENT FUND
TOMORROW SHORT-TERM RETIREMENT FUND
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments of Tomorrow Long-Term Retirement Fund, Tomorrow
Medium-Term Retirement Fund and Tomorrow Short-Term Retirement Fund as of
December 31, 1999, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended and financial highlights for each of the years in the
three-year period then ended and the period from March 7, 1996 (commencement of
operations) to December 31, 1996. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1999 by correspondence with the custodian . As to securities
purchased but not yet received, we performed other appropriate auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Tomorrow Long-Term Retirement Fund, Tomorrow Medium-Term Retirement Fund and
Tomorrow Short-Term Retirement Fund as of December 31, 1999, the results of
their operations for the year then ended and the changes in their net assets for
each of the years in the two-year period then ended and financial highlights for
each of the years in the three-year period t hen ended and the period from March
7, 1996 to December 31, 1996, in conformity with generally accepted accounting
principles.
KPMG LLP
New York, New York
January 20, 2000
Page 28
<PAGE>
TOMORROW FUNDS
--------------
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
JOSEPH J. REARDON
Vice President and Secretary
DANIEL CARDELL
Vice President
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
PFPC Inc.
P.O. Box 60448
King of Prussia, PA 19406-0448
LEGAL COUNSEL
Hale and Dorr
60 State Street
Boston, MA 02109
INDEPENDENT AUDITORS
KPMG LLP
345 Park Avenue
New York, NY 10154
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.
