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Wilmington Funds · N-30D · For 4/30/02

Filed On 6/26/02, 4:30pm ET   ·   Accession Number 1056288-2-382   ·   SEC File 811-05514

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 6/26/02  Wilmington Funds                  N-30D       4/30/02    1:4.8M                                   Federated Invest..Inc/PA

Annual or Semi-Annual Report Mailed to Shareholders   —   Rule 30d-1
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  VISION GROUP OF FUNDS  

Institutional Funds

VISION GROUP OF FUNDS

Annual Report to Shareholders

April 30, 2002

for Where you want to be

 
Contents

 
President’s Message
  
1
Investment Review
  
2
Portfolio of Investments
  
3
Statements of Assets and Liabilities
  
7
Statements of Operations
  
8
Statements of Changes in Net Assets
  
10
Financial Highlights
  
12
Notes to Financial Statements
  
14
Report of Ernst & Young LLP, Independent Auditors
  
20
Board of Trustees and Trust Officers
  
21

President’s Message

 
I am pleased to present the Annual Report of the VISION Institutional Funds, portfolios of the VISION Group of Funds, for the 12-month reporting period from May 1, 2001 through April 30, 2002. This report begins with a discussion by the VISION Institutional Limited Duration U.S. Government Fund’s management about the economy, the market, and fund strategies over the reporting period. Next, you’ll find a complete list of portfolio holdings and financial statements for each fund.
 
Fund-by-fund performance highlights are as follows:
 
VISION Institutional Prime Money Market Fund pursues a competitive level of daily income, daily liquidity and a stable $1 net asset value. It invests in a diversified portfolio of corporate and U.S. government money market securities. During the reporting period, the Fund paid dividends totaling $0.03 per share. The Fund’s net assets totaled $218.8 million at the end of the reporting period.*†
 
VISION Institutional Limited Duration U.S. Government Fund pursues current income, with preservation of capital as a secondary objective, by investing in short-term government securities. During the reporting period, the Fund paid income dividends totaling $0.57 per share, which offset a slight $0.01 decline in the Fund’s net asset value. As a result, the Fund produced a total return of 5.87% on a net asset value basis, or 2.73% adjusted for the Fund’s sales charge.**† At the end of the reporting period, the Fund’s net assets totaled $89.0 million.
 
VISION Money Market Fund, a diversified portfolio of corporate and U.S. government money market securities, is the latest addition to VISION Institutional Funds. This report includes information about the Fund’s Institutional Shares during its initial period of operation from September 4, 2001 through April 30, 2002.
 
As always, thank you for choosing one or more of the VISION Institutional Funds to pursue your financial goals. We’ll continue to keep you up-to-date on your progress.
 
Sincerely,
 
/s/ Carl W. Jordan
Carl W. Jordan
President
June 15, 2002
 
*
An investment in money market funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the funds.
**
Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
This VISION Fund is the successor to a corresponding Governor Fund pursuant to a reorganization that took place on January 8, 2001. Prior to that date, the VISION Fund had no investment operations. Accordingly, the performance information provided for the period prior to January 8, 2001 is historical information for the corresponding Governor Fund.

1

VISION  Institutional Limited Duration U.S. Government Fund
 
 
Over the last year, the Federal Reserve Board (Fed) has eased monetary policy aggressively in response to a sluggish economy and the terrorist events of September 11, 2001. To effect this easing, the Fed lowered the Federal Funds rate from 4.50% in April 2001 to 1.75% in December 2001. The change in short-term Treasury note yields is reflected in a 2-year Treasury note yielding 4.27% on April 30, 2001 and 3.22% on April 30, 2002. The easing of monetary policy also had the effect of “steepening” the yield curve (i.e., increasing the difference between the yields of the shortest and longest Treasury securities).
 
For the fiscal year ended April 30, 2002, the total return of the Fund was 5.87% on a net asset value basis, or 2.73% adjusted for the Fund’s sales charge. This compares favorably with yields of money market funds over the same period of time. We generally maintained an average maturity longer than the Lehman Brothers 1-3 Year Government Bond Index1 from April 2001 to October 2001 during the easing by the Fed. Over the last six months, we have gradually reduced our average maturity in the Fund as the economy regains its momentum. We believe that as the economy improves, the Fed will act to raise interest rates in the second half of 2002.
 
Our defensive stance in terms of a shorter-than-average maturity is augmented by the AAA credit quality of the current portfolio2. At present, we keep approximately 20% of the portfolio in Treasury notes, 40% in agency obligations (e.g., the Federal National Mortgage Association and the Federal Home Loan Bank), and 38% in mortgage-backed securities with short expected average maturities.
 
1
The Lehman Brothers 1-3 Year Government Bond Index is comprised of all publicly issued, non-convertible domestic debt of the U.S. government, or any agency thereof, or any quasi-federal corporation. The index also includes corporate debt guaranteed by the U.S. government. Only notes and bonds with a minimum maturity of one year and maximum maturity of 2.9 years are included. Indexes are unmanaged and investments cannot be made in an index.
2
Credit ratings pertain only to the securities in the portfolio and do not protect fund shares against market risk.

 
The graph below illustrates the hypothetical investment of $10,000* in the VISION Institutional Limited Duration U.S. Government Fund (the “Fund”) from October 31, 1995 (start of performance) to April 30, 2002, compared to the Lehman Brothers 1-3 Year Government Bond Index  (“LB1-3GB”).**
 
AVERAGE ANNUAL TOTAL RETURN FOR THE PERIOD ENDED APRIL 30, 2002***

1 Year
    
5 Years
    
Start of Performance (10/31/95)
2.73%
    
4.82%
    
4.81%

 
 
Growth of $10,000 Invested in VISION Institutional Limited Duration U.S. Government Fund†

 
Past performance is no guarantee of future results. Your investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*   
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 3.00% ($10,000 investment minus $300 sales charge = $9,700). The Fund’s performance assumes the reinvestment of all dividends and distributions. The LB1-3GB has been adjusted to reflect reinvestment of dividends on securities in the index.
**  
The LB1-3GB is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The index is unmanaged.
*** 
Total returns quoted reflect all applicable sales charges.
†   
The VISION Institutional Limited Duration U.S. Government Fund is the successor to the Governor Limited Duration Government Securities Fund pursuant to a reorganization that took place on January 8, 2001. The information presented above, for the periods prior to January 8, 2001, is historical information for the Governor Limited Duration Government Securities Fund.

2

VISION Institutional Prime Money Market Fund
Portfolio of Investments
April 30, 2002

Principal Amount

 
 
Value

(1) Corporate Obligations—61.8%
     
   
Asset-Backed—8.2%
     
$8,000,000
 
Apreco, Inc. 1.770%, 5/28/2002
 
$
7,989,380
10,000,000
 
CIESCO LP, 1.760%—1.810%, 5/7/2002 – 6/24/2002
 
 
9,982,953
       

   
Total
 
 
17,972,333
       

   
Banking—3.7%
     
3,000,000
 
Commerzbank U.S. Finance, Inc., (Guaranteed by Commerzbank AG, Frankfurt), 1.900%, 5/28/2002
 
 
2,995,725
5,000,000
 
Toronto Dominion Holdings (USA), Inc., (Guaranteed by Toronto Dominion Bank), 1.900%, 5/15/2002
 
 
4,996,306
       

   
Total
 
 
7,992,031
       

   
Capital Equipment Services—5.9%
     
10,000,000
 
Deere (John) Capital Corp., 1.650%, 7/15/2002
 
 
9,965,625
3,000,000
 
General Electric Capital Services, Inc., 2.050%, 11/25/2002
 
 
2,964,467
       

   
Total
 
 
   12,930,092
       

   
Diversified—2.3%
     
5,000,000
 
General Electric Capital Corp., 1.930%, 9/3/2002
 
 
4,966,493
       

   
Financial Retail—5.0%
     
6,000,000
 
American Express Credit Corp., 1.820%—1.900%, 5/3/2002—8/7/2002
 
 
5,984,180
5,000,000
 
Asset Securitization Cooperative Corp., 1.800%, 6/5/2002
 
 
4,991,250
       

   
Total
 
 
10,975,430
       

   
Financial Services—9.8%
     
10,000,000
 
Citicorp, 1.750%, 6/10/2002
 
 
9,980,555
5,000,000
 
Verizon Global Funding, 1.820%, 5/14/2002
 
 
4,996,714
6,500,000
 
Wells Fargo & Co., 1.760%, 7/19/2002
 
 
6,474,896
       

   
Total
 
 
21,452,165
       

   
Food & Beverage—8.2%
     
5,000,000
 
Coca-Cola Co., 1.760%, 5/24/2002
 
 
4,994,378
8,000,000
 
Kraft Foods, Inc., 1.760%, 5/9/2002
 
 
7,996,871
5,000,000
 
Nestle Capital Corp., 2.110%, 7/8/2002
 
 
4,980,072
       

   
Total
 
 
17,971,321
       

   
Insurance—12.1%
     
8,000,000
 
American General Corp., 1.780%, 5/1/2002
 
 
8,000,000
10,000,000
 
American General Finance Corp., 1.760%, 5/10/2002
 
 
9,995,600
3,500,000
 
Prudential Funding LLC, 2.020%, 5/3/2002
 
 
3,499,607
Principal Amount

 
 
Value

(1) Corporate Obligations—continued
     
   
Insurance—continued
     
$5,000,000
 
Transamerica Finance Corp., 1.850%, 5/29/2002
 
$
4,992,805
       

   
Total
 
 
26,488,012
       

   
Oil—2.3%
     
5,000,000
 
ChevronTexaco Corp., 1.760%, 5/31/2002
 
 
4,992,667
       

   
Pharmaceuticals—4.3%
     
9,500,000
 
Abbott Laboratories, 1.720%, 6/4/2002
 
 
9,484,568
       

   
Total Corporate Obligations
 
 
135,225,112
       

U.S. Government Agencies—21.5%
     
   
Student Loan Marketing Association—2.3%
     
5,000,000
 
1.820%, 3/21/2003
 
 
4,999,112
       

   
Federal National Mortgage Association—15.5%
     
3,000,000
 
1.735%, 6/13/2002
 
 
2,993,783
3,000,000
 
1.855%, 8/21/2002
 
 
2,982,687
10,000,000
 
2.010%, 8/19/2002
 
 
9,938,583
15,000,000
 
2.320%, 6/27/2002
 
 
14,944,900
3,204,000
 
2.370%, 12/13/2002
 
 
3,156,330
       

   
Total
 
 
34,016,283
       

   
Federal Home Loan Mortgage Corporation—1.4%
     
3,000,000
 
1.910%, 9/27/2002
 
 
2,976,284
       

   
Federal Home Loan Bank System—2.3%
5,000,000
 
1.730%, 5/16/2002
 
 
4,996,396
       

   
Total U.S. Government Agencies
 
 
46,988,075
       

(2) Notes—Variable—4.8%
     
10,500,000
 
Morgan Stanley, Dean Witter & Co., 1.925%, 5/1/2002
 
 
10,500,000
       

(3) Repurchase Agreement—12.0%
     
26,353,500
 
State Street Corp., 1.850%, dated 4/30/2002, due 5/1/2002
 
 
26,353,500
       

   
Total Investments
(at amortized cost)
 
$
219,066,687
       

(See Notes to Portfolios of Investments)

3

VISION Institutional Limited Duration U.S. Government Fund
Portfolio of Investments
April 30, 2002

Principal Amount

 
 
Value

Collateralized Mortgage Obligations—33.0%
     
   
Federal Home Loan Mortgage Corporation—14.9%
     
$  3,000,000
 
Series 2399-PM, REMIC,
5.500%, 6/15/2010
 
$
    3,082,741
2,500,000
 
Series 1601-PH, REMIC,
6.000%, 4/15/2008
 
 
2,578,300
1,490,996
 
Series 1197-G, REMIC,
6.750%, 12/15/2006
 
 
1,522,292
1,675,550
 
Series 1295-J, REMIC,
7.500%, 3/15/2007
 
 
1,727,861
3,640,049
 
Series 1154-GB, REMIC,
8.000%, 10/15/2006
 
 
3,821,942
545,414
 
Series 1253-E, REMIC
8.000%, 2/15/2007
 
 
568,932
       

   
Total
 
 
13,302,068
       

   
Federal National Mortgage Association—18.1%
     
7,900,000
 
Series 1993-52-H, REMIC,
6.500%, 8/25/2007
 
 
8,122,306
1,000,000
 
Series 1997-26-K, REMIC,
6.600%, 9/18/2010
 
 
1,038,750
2,100,000
 
Series 1993-77-H, REMIC,
6.750%, 11/25/2020
 
 
2,163,105
1,332,997
 
Series 1993-37-PH, REMIC,
7.000%, 1/25/2021
 
 
1,349,353
1,247,177
 
Series 1992-43-E, REMIC,
7.500%, 4/25/2022
 
 
1,303,511
1,987,912
 
Series 1991-4-G, REMIC,
8.250%, 1/25/2006
 
 
2,095,876
       

   
Total
 
 
16,072,901
       

   
Total Collateralized Mortgage Obligations (identified cost $29,295,104)
 
 
29,374,969
       

Government Agencies—40.6%
     
   
Federal Home Loan Bank—32.2%
     
5,080,000
 
2.250%, 9/11/2003
 
 
5,070,094
5,000,000
 
5.125%, 9/15/2003
 
 
5,150,150
5,000,000
 
5.375%, 2/15/2006
 
 
5,160,800
2,500,000
 
6.375%, 11/14/2003
 
 
2,624,650
5,000,000
 
6.875%, 8/15/2003
 
 
5,257,600
5,000,000
 
7.125%, 2/15/2005
 
 
5,414,050
       

   
Total
 
 
28,677,344
       

Principal
Amount

 
 
Value

Government Agencies—continued
     
   
Federal National Mortgage Association—8.4%
     
$ 5,000,000
 
6.500%, 8/15/2004
 
$
  5,309,400
1,000,000
 
6.580%, 6/24/2004
 
 
1,006,500
1,050,000
 
7.875%, 2/24/2005
 
 
1,158,454
       

   
Total
 
 
7,474,354
       

   
Total Government Agencies
(identified cost $35,761,278)
 
 
36,151,698
       

Mortgage Backed Securities—4.4%
     
   
Federal Home Loan Mortgage Corporation—3.9%
     
1,390,904
 
6.000%, 8/1/2006
 
 
  1,425,677
1,066,015
 
9.000%, 4/1/2016
 
 
1,134,123
814,253
 
9.000%, 6/1/2022
 
 
892,324
       

   
Total
 
 
3,452,124
       

   
Government National Mortgage Association—0.5%
     
49,230
 
8.500%, 2/15/2017
 
 
53,724
21,825
 
8.500%, 4/15/2017
 
 
23,891
130,365
 
8.500%, 7/15/2021
 
 
141,732
97,310
 
8.500%, 7/15/2021
 
 
105,795
119,903
 
8.500%, 1/15/2023
 
 
129,982
       

   
Total
 
 
455,124
       

   
Total Mortgage Backed Securities (identified cost $3,584,432)
 
 
3,907,248
       

   
U.S. Treasury Obligations—20.7%
     
   
U.S. Treasury Notes—20.7%
     
10,000,000
 
3.000%, 11/30/2003
 
 
10,019,000
5,000,000
 
5.750%, 11/15/2005
 
 
5,273,950
3,000,000
 
5.875%, 11/15/2004
 
 
3,166,470
       

   
Total U.S. Treasury Obligations
(identified cost $18,274,766)
 
 
18,459,420
       

Mutual Fund—0.4%
     
Shares

       
313,010
 
Seven Seas Money Market Fund
(at net asset value)
 
 
313,010
       

   
Total Investments
(identified cost $87,228,590)
 
$
88,206,345
       

(See Notes to Portfolios of Investments)

4

VISION Money Market Fund
Portfolio of Investments
April 30, 2002

 
Principal
Amount

 
 
Value

 
(1) Corporate Obligations—60.9%
       
   
Asset-Backed—7.7%
       
$50,000,000
 
Apreco, Inc., 1.770%, 5/28/2002
 
$
49,933,625
  
75,000,000
 
CIESCO LP, 1.760%—1.810%, 5/7/2002—6/24/2002
 
 
74,874,488
 
       


   
Total
 
 
124,808,113
 
       


   
Banking—7.2%
       
22,000,000
 
Commerzbank U.S. Finance, Inc., (Guaranteed by Commerzbank AG, Frankfurt), 1.900%, 5/28/2002
 
 
21,968,650
 
45,000,000
 
Toronto Dominion Holdings (USA), Inc., (Guaranteed by Toronto Dominion Bank),
1.900%, 5/15/2002
 
 
44,966,750
 
50,000,000
 
Wells Fargo & Co., 1.760%, 7/19/2002
 
 
49,806,889
 
       


   
Total
 
 
116,742,289
 
       


   
Capital Equipment & Services—1.8%
30,000,000
 
Deere (John) Capital Corp.,
1.650%, 7/15/2002
 
 
29,896,875
 
       


   
Diversified Financials—4.6%
       
75,000,000
 
General Electric Capital Corp., 1.930%—2.050%, 9/3/2002— 11/25/2002
 
 
74,368,819
 
       


   
Financial Retail—3.7%
       
60,000,000
 
American Express Credit Corp., 1.820%—1.900%, 5/3/2002—8/7/2002
 
 
59,841,800
 
       


   
Financial Services—12.9%
       
45,000,000
 
Asset Securitization Cooperative Corp., 1.800%, 6/5/2002
 
 
44,921,250
 
75,000,000
 
Citicorp, 1.750%, 6/10/2002
 
 
74,854,167
 
45,000,000
 
Nestle Capital Corp.,
2.110%, 7/8/2002
 
 
44,820,650
 
45,000,000
 
Verizon Global Funding,
1.820%, 5/14/2002
 
 
44,970,425
 
       


   
Total
 
 
209,566,492
 
       


   
Food & Beverage—7.2%
       
45,000,000
 
Coca-Cola Co.,
1.760%, 5/24/2002
 
 
44,949,400
 
72,000,000
 
Kraft Foods, Inc.,
1.760%, 5/9/2002
 
 
71,971,840
 
       


   
Total
 
 
116,921,240
 
       


   
Insurance—11.0%
       
100,000,000
 
American General Finance Corp., 1.760%—1.780%, 5/1/2002— 5/10/2002
 
 
99,978,000
 
Principal
Amount

 
 
Value

(1) Corporate Obligations—continued
     
   
Insurance—continued
     
$35,000,000
 
Prudential Funding LLC,
2.020%, 5/3/2002
 
$
34,996,072
45,000,000
 
Transamerica Finance Corp., 1.850%, 5/29/2002
 
 
44,935,250
       

   
Total
 
 
179,909,322
       

   
Oil & Gas—2.7%
     
45,000,000
 
ChevronTexaco Corp.,
1.760%, 5/31/2002
 
 
44,934,000
       

   
Pharmaceuticals—2.1%
     
35,000,000
 
Abbott Laboratories,
1.720%, 6/4/2002
 
 
34,943,144
       

   
Total Corporate Obligations
 
 
991,932,094
       

(1) U.S. Government Agencies—20.1%
     
   
Federal National Mortgage Association—14.5%
     
30,000,000
 
1.735%, 6/13/2002
 
 
29,937,829
100,000,000
 
2.320%, 6/27/2002
 
 
99,632,667
50,000,000
 
2.010%, 8/19/2002
 
 
49,692,917
30,000,000
 
1.855%, 8/21/2002
 
 
29,826,867
27,000,000
 
2.370%, 12/13/2002
 
 
26,598,285
       

   
Total
 
 
235,688,565
       

   
Federal Home Loan Bank System—1.5%
25,000,000
 
1.730%, 5/16/2002
 
 
24,981,979
       

   
Federal Home Loan Mortgage Corporation—1.3%
     
22,000,000
 
1.910%, 9/27/2002
 
 
21,826,084
       

   
Student Loan Marketing Association—2.8%
     
45,000,000
 
1.820%, 3/21/2003
 
 
44,992,011
       

   
Total U.S. Government Agencies
 
 
327,488,639
       

(2) Notes—Variable—4.9%
     
80,000,000
 
Morgan Stanley, Dean Witter & Co., 1.925%, 5/1/2002
 
 
80,000,000
       

(3) Repurchase Agreement—14.1%
     
228,707,500
 
State Street Corp., 1.850%, dated   4/30/2002, due 5/1/2002
 
 
228,707,500
       

   
Total Investments
(at amortized cost)
 
$
1,628,128,233
       

(See Notes to Portfolios of Investments)

5

Notes to Portfolios of Investments

 
 
The categories of investments are shown as a percentage of net assets at April 30, 2002.
 
(1)
Each issue, with the exception of variable rate securities, shows the coupon or rate of discount at the time of purchase, if applicable.
 
(2)
Denotes variable rate securities with current rate and next demand date.
 
(3)
The repurchase agreement is fully collateralized by U.S. Treasury obligations based on market prices at April 30, 2002.
 
The following acronym is used throughout this report:
 
REMIC—Real Estate Mortgage Investment Conduit
 
Vision Fund

  
Cost of Investments for Federal Tax Purposes

      
Net Unrealized Appreciation (Depreciation) for Federal Tax Purposes

    
Gross Unrealized Appreciation for Federal Tax Purposes

    
Gross Unrealized Depreciation for Federal Tax Purposes

  
Total Net Assets

Institutional Prime Money Market Fund
  
$
219,066,687
*
    
$
    
$
    
$
  
$
218,818,819
Institutional Limited Duration U.S. Government Fund
  
 
87,627,882
 
    
 
578,463
    
 
785,082
    
 
206,619
  
 
89,013,525
Money Market Fund
  
 
1,628,128,233
*
    
 
    
 
    
 
  
 
1,627,393,786
 
* at amortized cost

(See Notes which are an integral part of the Financial Statements)

6

VISION Group of Funds
Statements of Assets and Liabilities
April 30, 2002

 

 
Institutional Prime Money Market Fund

      
Institutional Limited Duration U.S. Government Fund

   
Money Market Fund

 
Assets:
                          

                          
Investments in securities, at amortized cost and value
 
$
192,713,187
 
    
$
88,206,345
 
 
$
1,399,420,733
 

                          
Investments in repurchase agreements, at amortized cost
 
 
26,353,500
 
    
 
 
 
 
228,707,500
 

 


    


 


Total investments
 
 
219,066,687
 
    
 
88,206,345
 
 
 
1,628,128,233
 

                          
Cash
 
 
 
    
 
 
 
 
200,223
 

                          
Income receivable
 
 
27,647
 
    
 
963,244
 
 
 
224,835
 

                          
Receivable for shares sold
 
 
32,393
 
    
 
92,465
 
 
 
1,403,385
 

 


    


 


Total assets
 
 
219,126,727
 
    
 
89,262,054
 
 
 
1,629,956,676
 

 


    


 


Liabilities:
                          

                          
Income distribution payable
 
 
211,167
 
    
 
231,372
 
 
 
732,711
 

                          
Payable for shares redeemed
 
 
 
    
 
 
 
 
1,476,064
 

                          
Payable to bank
 
 
32,390
 
    
 
 
 
 
 

                          
Accrued expenses
 
 
64,351
 
    
 
17,157
 
 
 
354,115
 

 


    


 


Total liabilities
 
 
307,908
 
    
 
248,529
 
 
 
2,562,890
 

 


    


 


Net Assets
 
$
218,818,819
 
    
$
89,013,525
 
 
$
1,627,393,786
 

 


    


 


Net Assets Consists of:
                          

                          
Paid in capital
 
$
218,795,816
 
    
$
89,986,065
 
 
$
1,627,419,123
 

                          
Net unrealized appreciation of investments
 
 
 
    
 
977,755
 
 
 
 

                          
Accumulated net realized gain (loss) on investments
 
 
32,166
 
    
 
(1,929,003
)
 
 
14,756
 

                          
Accumulated undistributed (distributions in excess of) net investment income
 
 
(9,163
)
    
 
(21,292
)
 
 
(40,093
)

 


    


 


Total Net Assets
 
$
218,818,819
 
    
$
89,013,525
 
 
$
1,627,393,786
 

 


    


 


Class A Shares
 
 
 
    
 
 
 
$
1,512,433,259
 

 


    


 


Class S Shares
 
 
 
    
 
 
 
$
112,155,813
 

 


    


 


Institutional Shares
 
$
218,818,819
 
    
$
89,013,525
 
 
$
2,804,714
 

 


    


 


Shares Outstanding:
                          

                          
Class A Shares
 
 
 
    
 
 
 
 
1,512,456,805
 

 


    


 


Class S Shares
 
 
 
    
 
 
 
 
112,157,561
 

 


    


 


Institutional Shares
 
 
218,821,398
 
    
 
9,080,304
 
 
 
2,804,757
 

 


    


 


Net Asset Value, Offering Price and Redemption Proceeds Per Share:
                          

                          
Net Asset Value Per Share
                          

                          
Class A Shares
 
 
 
    
 
 
 
$
1.00
 

 


    


 


Class S Shares
 
 
 
    
 
 
 
$
1.00
 

 


    


 


Institutional Shares
 
$
1.00
 
    
$
9.80
 
 
$
1.00
 

 


    


 


Offering Price Per Share*
                          

                          
Institutional Shares
 
$
 
    
$
10.10
**
 
$
 

 


    


 


Investments, at identified cost
 
$
219,066,687
 
    
$
87,228,590
 
 
$
1,628,128,233
 

 


    


 


  * See “What Do Shares Cost?” in the Prospectus.
                          
** Computation of offering price per share 100/97 of net asset value.
                          
 

(See Notes which are an integral part of the Financial Statements)

7

 
VISION Group of Funds
Statements of Operations
Year Ended April 30, 2002

   
 
 
 
 

Institutional
Prime
Money Market
Fund

 
 
 
 

 
 
 
 
 

Institutional
Limited Duration
U.S. Government
Fund

 
 
 
 

 
 
 

Money Market
Fund

 
 

Investment Income:
                       

                       
Interest
 
$
7,014,220
 
 
$
3,468,988
 
 
$
54,935,410
 

 


 


 


Expenses:
                       

                       
Investment adviser fee
 
 
1,190,569
 
 
 
401,818
 
 
 
8,912,679
 

                       
Administrative personnel and services fee
 
 
202,049
 
 
 
56,839
 
 
 
1,512,795
 

                       
Custodian fees
 
 
11,808
 
 
 
3,349
 
 
 
52,813
 

                       
Transfer and dividend disbursing agent fees and expenses
 
 
85,419
 
 
 
24,473
 
 
 
888,717
 

                       
Directors’ fees
 
 
2,136
 
 
 
640
 
 
 
55,325
 

                       
Auditing fees
 
 
9,084
 
 
 
3,513
 
 
 
98,686
 

                       
Legal fees
 
 
4,947
 
 
 
3,007
 
 
 
59,218
 

                       
Portfolio accounting fees
 
 
107,151
 
 
 
30,136
 
 
 
802,141
 

                       
Distribution services fee—Class S Shares
 
 
 
 
 
 
 
 
233,074
 

                       
Shareholder services fee—Class A Shares
 
 
 
 
 
 
 
 
2,800,239
 

                       
Shareholder services fee—Class S Shares
 
 
 
 
 
 
 
 
168,552
 

                       
Shareholder service fee—Institutional Shares
 
 
 
 
 
62,157
 
 
 
948
 

                       
Share registration costs
 
 
28,713
 
 
 
9,549
 
 
 
87,578
 

                       
Printing and postage
 
 
40,089
 
 
 
5,860
 
 
 
329,890
 

                       
Insurance premiums
 
 
1,823
 
 
 
1,810
 
 
 
8,241
 

                       
Miscellaneous
 
 
1,939
 
 
 
4,163
 
 
 
20,400
 

 


 


 


Total expenses
 
 
1,685,727
 
 
 
607,314
 
 
 
16,031,296
 

 


 


 


Waivers:
                       

                       
Waiver of investment adviser fee
 
 
(714,341
)
 
 
(133,940
)
 
 
(2,673,111
)

                       
Waiver of distribution services fee—Class S Shares
 
 
 
 
 
 
 
 
(7,789
)

                       
Waiver of shareholder services fee—Class A Shares
 
 
 
 
 
 
 
 
(560,048
)

                       
Waiver of shareholder services fee—Class S Shares
 
 
 
 
 
 
 
 
(4,360
)

                       
Waiver of shareholder services fee—Institutional Shares
 
 
 
 
 
(49,726
)
 
 
(568
)

 


 


 


Total Waivers
 
 
(714,341
)
 
 
(183,666
)
 
 
(3,245,876
)

 


 


 


Net expenses
 
 
971,386
 
 
 
423,648
 
 
 
12,785,420
 

 


 


 


Net investment income
 
 
6,042,834
 
 
 
3,045,340
 
 
 
42,149,990
 

 


 


 


Realized and Unrealized Gain(Loss) on Investments:
                       

                       
Net realized gain (loss) on investments
 
 
 
 
 
48,737
 
 
 
(25,337
)

                       
Net change in unrealized appreciation of investments
 
 
 
 
 
532,720
 
 
 
 

 


 


 


Net realized and unrealized gain (loss) on investments
 
 
 
 
 
581,457
 
 
 
(25,337
)

 


 


 


Change in net assets resulting from operations
 
$
6,042,834
 
 
$
3,626,797
 
 
$
42,124,653
 

 


 


 


(See Notes which are an integral part of the Financial Statements)

8

VISION Group of Funds
Statements of Changes in Net Assets

    
Institutional Prime Money Market Fund

 
    
Year Ended April 30,
2002

    
Period Ended April 30,
2001
(1)

    
Year Ended June 30,
2000

 
Increase (Decrease) in Net Assets:
                          

                          
Operations:
                          

                          
Net investment income
  
$
6,042,834
 
  
$
10,531,927
 
  
$
15,906,773
 

                          
Net realized gain (loss) on investments
  
 
 
  
 
 
  
 
8,750
 

                          
Net change in unrealized appreciation (depreciation) of investments
  
 
 
  
 
 
  
 
 

  


  


  


Change in net assets resulting from operations
  
 
6,042,834
 
  
 
10,531,927
 
  
 
15,915,523
 

  


  


  


Distributions to Shareholders:
                          

                          
Distributions from net investment income
                          

                          
Class A Shares
  
 
 
  
 
 
  
 
 

                          
Class S Shares
  
 
 
  
 
(64,644
)(2)
  
 
(143,381
)(2)

                          
Institutional Shares
  
 
(6,042,834
)
  
 
(10,478,624
)
  
 
(15,763,392
)

  


  


  


Change in net assets resulting from distributions to shareholders
  
 
(6,042,834
)
  
 
(10,543,268
)
  
 
(15,906,773
)

  


  


  


Share Transactions:
                          

                          
Proceeds from sales of shares
  
 
922,203,584
 
  
 
658,046,912
 
  
 
994,402,561
 

                          
Net asset value of shares issued to shareholders in payment of distributions declared
  
 
1,634,292
 
  
 
2,737,844
 
  
 
1,779,251
 

                          
Cost of shares redeemed
  
 
(891,032,360
)
  
 
(760,249,793
)
  
 
(972,947,088
)

  


  


  


Change in net assets resulting from share transactions
  
 
32,805,516
 
  
 
(99,465,037
)
  
 
23,234,724
 

  


  


  


Change in net assets
  
 
32,805,516
 
  
 
(99,476,378
)
  
 
23,243,474
 

                          
Net Assets:
                          

                          
Beginning of period
  
 
186,013,303
 
  
 
285,489,681
 
  
 
262,246,207
 

  


  


  


End of period
  
$
218,818,819
 
  
$
186,013,303
 
  
$
285,489,681
 

  


  


  


Undistributed (distributions in excess of) net investment income included in net assets at end of period
  
$
(9,163
)
  
$
 
  
$
11,341
 

  


  


  


 
(1) 
Formerly Governor Prime Money Market Fund and Governor Limited Duration Government Securities Fund, respectively. The Funds changed their fiscal year end from June 30 to April 30. Operations for the period are from July 1, 2000 to April 30, 2001.
(2) 
The Institutional Prime Money Market Fund commenced offering Class S Shares on April 19, 1999 and discontinued offering Class S Shares on November 30, 2000.

(See Notes which are an integral part of the Financial Statements)

10


Institutional Limited Duration U.S. Government Fund

      
Money Market Fund

 
Year Ended
April 30,
2002

      
Period Ended
April 30,
2001
(1)

      
Year Ended
June 30,
2000

      
Year Ended
April 30,
2002

      
Year Ended
April 30,
2001

 
                                                 
                                                 
                                                 
                                                 
$
3,045,340
 
    
$
3,406,633
 
    
$
3,327,425
 
    
$
42,149,990
 
    
$
81,963,219
 
 
48,737
 
    
 
(76,307
)
    
 
(409,559
)
    
 
(25,337
)
    
 
 
 
532,720
 
    
 
884,134
 
    
 
(321,773
)
    
 
 
    
 
 



    


    


    


    


 
3,626,797
 
    
 
4,214,460
 
    
 
2,596,093
 
    
 
42,124,653
 
    
 
81,963,219
 



    


    


    


    


 
 
    
 
 
    
 
 
    
 
(40,321,122
)
    
 
(78,322,062
)
 
 
    
 
 
    
 
 
    
 
(1,823,120
)
    
 
(3,641,157
)
 
(3,861,010
)
    
 
(3,381,973
)
    
 
(3,314,951
)
    
 
(5,748
)
    
 
 



    


    


    


    


 
(3,861,010
)
    
 
(3,381,973
)
    
 
(3,314,951
)
    
 
(42,149,990
)
    
 
(81,963,219
)



    


    


    


    


 
56,034,201
 
    
 
10,363,021
 
    
 
40,570,589
 
    
 
135,324,350,616
 
    
 
100,462,993,687
 
 
928,717
 
    
 
635,131
 
    
 
442,532
 
    
 
22,888,383
 
    
 
42,093,952
 
 
(23,997,059
)
    
 
(28,689,065
)
    
 
(19,194,805
)
    
 
(135,379,575,107
)
    
 
(99,989,220,429
)



    


    


    


    


 
32,965,859
 
    
 
(17,690,913
)
    
 
21,818,316
 
    
 
(32,336,108
)
    
 
515,867,210
 



    


    


    


    


 
32,731,646
 
    
 
(16,858,426
)
    
 
21,099,458
 
    
 
(32,361,445
)
    
 
515,867,210
 
 
56,281,879
 
    
 
73,140,305
 
    
 
52,040,847
 
    
 
1,659,755,231
 
    
 
1,143,888,021
 



    


    


    


    


$
89,013,525
 
    
$
56,281,879
 
    
$
73,140,305
 
    
$
1,627,393,786
 
    
$
1,659,755,231
 



    


    


    


    


$
(21,292
)
    
$
37,066
 
    
$
12,406
 
    
$
(40,093
)
    
$
 



    


    


    


    


11

 
VISION Group of Funds
Financial Highlights

(For an Institutional Share outstanding throughout each period)
 
Period Ended April 30,
    
Net Asset Value, beginning of period
    
Net Investment Income
      
Net Realized and Unrealized Gain (Loss) on Investments
      
Total from Investment Operations
    
Distributions from Net Investment Income
      
Distributions from Net Realized Gains
 













Institutional Prime Money Market Fund(c)
                        
1997(d)
    
$
1.00
    
0.04
 
    
0.00
(e)
    
0.04
    
(0.04
)
    
 
1998(g)
    
$
1.00
    
0.05
 
    
0.00
(e)
    
0.05
    
(0.05
)
    
 
1999(g)
    
$
1.00
    
0.05
 
    
0.00
(e)
    
0.05
    
(0.05
)
    
 
2000(g)
    
$
1.00
    
0.05
 
    
0.00
(e)
    
0.05
    
(0.05
)
    
 
2001(h)(i)
    
$
1.00
    
0.05
 
    
 
    
0.05
    
(0.05
)
    
 
2002
    
$
1.00
    
0.03
 
    
 
    
0.03
    
(0.03
)
    
 
Institutional Limited Duration U.S. Government Fund(j)
                        
1998(k)
    
$
10.00
    
0.56
 
    
(0.04
)
    
0.52
    
(0.56
)
    
(0.00
)(e)
1999(g)
    
$
9.96
    
0.54
 
    
(0.13
)
    
0.41
    
(0.54
)
    
(0.00
)(e)
2000(g)
    
$
9.83
    
0.55
 
    
(0.14
)
    
0.41
    
(0.55
)
    
 
2001(h)(i)
    
$
9.69
    
0.50
 
    
0.11
 
    
0.61
    
(0.49
)
    
 
2002
    
$
9.81
    
0.62 
(l)
    
(0.06
)(l)
    
0.56
    
(0.57
)
    
 
Money Market Fund
                        
2002(m)
    
$
1.00
    
0.01
 
    
 
    
0.01
    
(0.01
)
    
 













(a)
Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
(b)
This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above.
(c)
Formerly Governor Prime Money Market Fund, effective date January 8, 2001.
(d)
Reflects operations for the period from October 7, 1996 (date of initial public investment) to June 30, 1997.
(e)
Less than $0.01 per share.
(f)
Computed on an annualized basis.
(g)
Reflects operations for the year ended June 30.
(h)
Reflects operations for the period from July 1, 2000 to April 30, 2001. The Funds changed their fiscal year end from June 30 to April 30.
(i)
Effective January 8, 2001, the Funds changed their investment adviser from Martindale Andres & Company LLC to Manufacturers and Traders Trust Company.
(j)
Formerly Governor Limited Duration Government Securities Fund, effective date January 8, 2001.
(k)
Reflects operations for the period from July 1, 1997 (date of initial public investment) to June 30, 1998.
(l)
Effective May 1, 2001, the Institutional Limited Duration U.S. Government Fund adopted the provisions of the American Institute of Certified Public Accountant (AICPA) Audit and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long term debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income per share by $0.05, increase net realized gain/loss per share by $0.05, and decrease the ratio of net investment income to average net assets from 5.68% to 4.55%. Per share, ratios and supplemental data for periods prior to May 1, 2001 have not been restated to reflect this change in presentation.
(m)
Reflects operations for the period from September 4, 2001 (date of initial public investment) to April 30, 2002.

(See Notes which are an integral part of the Financial Statements)

12

 

 
                        
Ratios to Average Net Assets

                 
Total Distributions
      
Net Asset Value, end of period
    
Total Return(a)
      
Expenses
      
Net Investment Income
      
Expense Waiver/ Reimbursement(b)
      
Net Assets, end of period (000 omitted)
    
Portfolio Turnover
Rate
 















                                                                  
(0.04
)
    
$
1.00
    
3.73
%
    
0.36
%(f)
    
5.02
%(f)
    
0.70
%(f)
    
$
95,850
    
 
(0.05
)
    
$
1.00
    
5.19
%
    
0.48
%
    
5.14
%
    
0.76
%
    
$
217,861
    
 
(0.05
)
    
$
1.00
    
4.80
%
    
0.49
%
    
4.68
%
    
0.80
%
    
$
261,561
    
 
(0.05
)
    
$
1.00
    
5.46
%
    
0.47
%
    
5.34
%
    
0.70
%
    
$
282,014
    
 
(0.05
)
    
$
1.00
    
4.81
%
    
0.53
%(f)
    
5.76
%(f)
    
0.21
%(f)
    
$
186,013
    
 
(0.03
)
    
$
1.00
    
2.63
%
    
0.41
%
    
2.54
%
    
0.30
%
    
$
218,819
    
 
                                                                  
(0.56
)
    
$
9.96
    
5.39
%
    
0.65
%(f)
    
5.58
%(f)
    
1.18
%(f)
    
$
29,360
    
482
%
(0.54
)
    
$
9.83
    
4.25
%
    
0.59
%
    
5.51
%
    
1.03
%
    
$
52,041
    
519
%
(0.55
)
    
$
9.69
    
4.31
%
    
0.61
%
    
5.77
%
    
0.94
%
    
$
73,140
    
237
%
(0.49
)
    
$
9.81
    
6.47
%
    
0.71
%(f)
    
6.05
%(f)
    
0.21
%(f)
    
$
56,282
    
158
%
(0.57
)
    
$
9.80
    
5.87
%
    
0.63
%
    
4.55
%(l)
    
0.27
%
    
$
89,014
    
89
%
                                                                  
(0.01
)
    
$
1.00
    
1.19
%
    
0.61
%(f)
    
1.55
%(f)
    
0.36
%(f)
    
$
2,805
    
 















13

 
VISION Group of Funds
Notes to Financial Statements
April 30, 2002

 
Organization
 
VISION Group of Funds (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of eighteen portfolios (individually referred to as the “Fund”, or collectively as the “Funds”). The following Funds are presented herein:
 
Portfolio Name
  
Investment Objective



VISION Institutional Prime Money Market Fund (“Institutional Prime Money Market Fund”) (formerly Governor Prime Money Market Fund) (d)
  
Seeks current income with liquidity and stability of principal.



VISION Institutional Limited Duration U.S. Government Fund (“Institutional Limited Duration U.S. Government Fund”) (formerly Governor Limited Duration Government Securities Fund) (d)
  
Seeks current income with preservation of capital as a secondary objective.



VISION Money Market Fund (“Money Market Fund”) (d)
  
Seeks current income with liquidity and stability of principal.
 
(d)  Diversified
 
The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held.
 
Institutional Prime Money Market Fund is the successor to Governor Prime Money Market Fund and Institutional Limited Duration U.S. Government Fund is the successor to Governor Limited Duration Government Securities Fund pursuant to a reorganization that took place on January 8, 2001. Prior to that date, each VISION fund had no investment operations. Accordingly, the information in these financial statements for periods prior to January 8, 2001 is historical information for the corresponding Governor Fund.
 
The Board of Trustees of the Governor Funds, at a meeting held on October 27, 2000, approved the liquidation of the S Shares of the Governor Prime Money Market Fund. The liquidation was effective on November 30, 2000.
 
Effective September 4, 2001, Money Market Fund commenced offering Institutional Shares.
 
Significant Accounting Policies
 
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. These policies are in conformity with generally accepted accounting principles (“GAAP”).
 
Investment Valuation—Institutional Prime Money Market Fund and Money Market Fund use the amortized cost method to value their portfolio securities in accordance with Rule 2a-7 under the Act. For Institutional Limited Duration U.S. Government Fund, U.S. Government securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Listed corporate bonds, and other fixed income and asset-backed securities, unlisted securities and short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end regulated investment companies are valued at net asset value. Securities for which no quotations are readily available are valued at fair value as determined in good faith using methods approved by the Board of Trustees (the “Trustees”).
 
Repurchase Agreements—It is each Fund’s policy to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank’s vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been

14

established by the Funds to monitor, on a daily basis, the market value of each repurchase agreement’s collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement transaction.
 
The Funds will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Funds’ adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Trustees. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Funds could receive less than the repurchase price on the sale of collateral securities. The Funds along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.
 
Investment Income, Expenses and Distributions—Interest income and expenses are accrued daily. All discounts/premiums are accreted/amortized for financial reporting purposes as required. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. Money Market Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
 
Income and capital gain distributions are determined in accordance with income tax regulations which may differ from GAAP. The following reclassifications have been made to the financial statements.
 
    
Increase (Decrease)

 
    
Paid in Capital

      
Accumulated Net Realized Gain/Loss

      
Undistributed Net Investment Income

 
Institutional Prime Money Market
  
$
(23,003
)
    
$
32,166
 
    
$
(9,163
)
Institutional Limited Duration U.S. Government
  
 
(1
)
    
 
(1,080,379
)
    
 
1,080,380
 
Money Market
  
 
 
    
 
40,093
 
    
 
(40,093
)
 
Change In Accounting Principle—As required, effective May 1, 2001, the Trust has adopted the provision of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing long-term premiums and discounts on long-term debt securities. Prior to May 1, 2001, the Institutional Limited Duration U.S. Government Fund did not amortize long-term premiums and discounts on long-term debt securities. The cumulative effect of this accounting change had no impact on total net assets of Institutional Limited Duration U.S. Government Fund, but resulted in the following adjustments based on securities held by the Fund on May 1, 2001:
 
Undistributed (Distributions in Excess of) Net Investment Income

  
Accumulated Net Realized
Loss

  
Unrealized Appreciation

$(323,068)
  
$212,214
  
$110,854
 
The effect of this change for the year ended April 30, 2002 was as follows:
 
Undistributed (Distributions in
Excess of) Net Investment Income

  
Accumulated Net Realized
Loss

  
Unrealized Appreciation

$(757,309)
  
$537,348
  
$219,961
 
Federal Taxes—It is the policy of the Funds to comply with the provisions of the Internal Revenue Code, as amended, (the “Code”) applicable to regulated investment companies and to distribute to shareholders each year substantially all of their income. Accordingly, no provisions for federal tax are necessary.

15

 
At April 30, 2002, Institutional Limited Duration U.S. Government Fund, for federal tax purposes, had a capital loss carryforward of $1,237,431, which will reduce Institutional Limited Duration U.S. Government Fund’s taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Institutional Limited Duration U.S. Government Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows:
 
Expiration Year

  
Expiration
Amount

2007
  
$
67,802
2008
  
 
616,878
2009
  
 
306,358
2010
  
 
246,393
    

    
$
1,237,431
    

 
Net realized capital losses on Institutional Prime Money Market Fund, Institutional Limited Duration U.S. Government Fund and Money Market Fund of $8, $292,280 and $50, respectively attributable to security transactions incurred after October 31, 2001, are treated as arising on the first day of the Fund’s next taxable year May 1, 2002.
 
As of April 30, 2002, the tax composition of dividends was a follows:
 
      
Ordinary Income

    
Long-term Capital Gains

Institutional Prime Money Market
    
$
6,042,834
    
$
 —
Institutional Limited Duration U.S. Government
    
 
3,861,010
    
 
Money Market
    
 
42,149,990
    
 
 
As of April 30, 2002, the tax composition of the distributable earnings on a tax basis was as follows:
 
      
Undistributed Ordinary Income

    
Undistributed Long-term Gains

    
Unrealized
Appreciation/
Depreciation

Institutional Prime Money Market
    
$
234,178
    
$
 —
    
$
Institutional Limited Duration U.S. Government
    
 
210,372
    
 
    
 
578,463
Money Market
    
 
707,425
    
 
    
 
 
When-Issued and Delayed Delivery Transactions—The Funds may engage in when-issued or delayed delivery transactions. The Funds record when-issued securities on the trade date and maintain security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
 
Change in Fiscal Year—The Funds have changed their fiscal year end from June 30 to April 30.
 
Use of Estimates—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
 
Other—Investment transactions are accounted for on a trade date basis.

16

 
Capital Stock
 
At April 30, 2002, there were 1,000,000,000 shares (without par value) capital stock authorized with respect to Institutional Prime Money Market Fund; 1,000,000,000 shares (without par value) capital stock authorized with respect to Institutional Limited Duration U.S. Government Fund; and 6,000,000,000 shares of $0.001 par value capital stock (2,000,000,000 authorized as to Class A Shares, 2,000,000,000 authorized as to Class S Shares and 2,000,000,000 authorized as to Institutional Shares) authorized with respect to Money Market Fund. Capital paid-in for Institutional Prime Money Market Fund aggregated $218,795,816 and for Money Market Fund aggregated $1,627,419,123. Transactions in capital stock were as follows:
 
    
Institutional Prime Money Market Fund

 
    
Year Ended

    
Period Ended

    
Year Ended

 
Institutional Shares:

  
Shares

    
Amount

    
Shares

    
Amount

    
Shares

    
Amount

 
Shares sold
  
922,203,584
 
  
$
922,203,584
 
  
653,560,772
 
  
$
653,561,184
 
  
981,122,385
 
  
$
981,122,385
 

                                               
Shares issued to shareholders in payment of distributions declared
  
1,634,293
 
  
 
1,634,292
 
  
2,727,275
 
  
 
2,727,275
 
  
1,779,251
 
  
 
1,779,251
 

                                               
Shares redeemed
  
(891,032,360
)
  
 
(891,032,360
)
  
(752,277,442
)
  
 
(752,277,442
)
  
(962,457,888
)
  
 
(962,457,888
)

  

  


  

  


  

  


Net change resulting from Class A Share transactions
  
32,805,517
 
  
$
32,805,516
 
  
(95,989,395
)
  
$
(95,988,983
)
  
20,443,748
 
  
$
20,443,748
 

  

  


  

  


  

  


    
Institutional Prime Money Market Fund

 
    
Year Ended
April 30, 2002

    
Period Ended

    
Year Ended

 
Class S Shares:

  
Shares

    
Amount

    
Shares

    
Amount

    
Shares

    
Amount

 
Shares sold
  
 
  
$
 
  
4,485,728
 
  
$
4,485,728
 
  
13,280,176
 
  
$
13,280,176
 

                                               
Shares issued to shareholders in payment of distributions declared
  
 
  
 
 
  
10,569
 
  
 
10,569
 
  
 
  
 
 

                                               
Shares redeemed
  
 
  
 
 
  
(7,972,351
)
  
 
(7,972,351
)
  
(10,489,200
)
  
 
(10,489,200
)

  

  


  

  


  

  


Net change resulting from Class S Share transactions
  
 
  
$
 
  
(3,476,054
)
  
$
(3,476,054
)
  
2,790,976
 
  
$
2,790,976
 

  

  


  

  


  

  


Net change resulting from share transactions
  
32,805,517
 
  
$
32,805,516
 
  
(99,465,449
)
  
$
(99,465,037
)
  
23,234,724
 
  
$
23,234,724
 

  

  


  

  


  

  


17

    
Institutional Limited Duration U.S. Government Fund

 
    
Year Ended
April 30, 2002

    
Period Ended
April 30, 2001 (a)

    
Year Ended
June 30, 2000

 
    
Shares

    
Amount

    
Shares

    
Amount

    
Shares

    
Amount

 
Shares sold
  
5,685,226
 
  
$
56,034,201
 
  
1,061,258
 
  
$
10,363,021
 
  
4,176,016
 
  
$
40,570,589
 

                                               
Shares issued to shareholders in payment of distributions declared
  
94,318
 
  
 
928,717
 
  
65,218
 
  
 
635,131
 
  
45,576
 
  
 
442,532
 

                                               
Shares redeemed
  
(2,437,502
)
  
 
(23,997,059
)
  
(2,932,410
)
  
 
(28,689,065
)
  
(1,972,643
)
  
 
(19,194,805
)

  

  


  

  


  

  


Net change resulting from share transactions
  
3,342,042
 
  
$
32,965,859
 
  
(1,805,934
)
  
$
(17,690,913
)
  
2,248,949
 
  
$
21,818,316
 

  

  


  

  


  

  


 
    
Money Market Fund

 
Class A Shares:

  
Year Ended
April 30, 2002

    
Year Ended April 30, 2001

 
Shares sold
  
112,180,878,513
 
  
83,759,967,105
 

             
Shares issued to shareholders in payment of distributions declared
  
22,882,631
 
  
42,093,381
 

             
Shares redeemed
  
(112,289,609,561
)
  
(83,298,883,597
)

  

  

Net change resulting from Class A Share transactions
  
(85,848,417
)
  
503,176,889
 

  

  

    
Money Market Fund

 
Class S Shares:

  
Year Ended
April 30, 2002

    
Year Ended April 30, 2001

 
Shares sold
  
23,139,522,831
 
  
16,703,026,582
 

             
Shares issued to shareholders in payment of distributions declared
  
4
 
  
571
 

             
Shares redeemed
  
(23,088,815,283
)
  
(16,690,336,832
)

  

  

Net change resulting from Class S Share transactions
  
50,707,552
 
  
12,690,321
 

  

  

 
      
Money Market Fund

Institutional Shares:

    
Period Ended April 30, 2002 (b)

    
Year Ended April 30, 2001

Shares sold
    
3,949,272
 
  

             
Shares issued to shareholders in payment of distributions declared
    
5,748
 
  

             
Shares redeemed
    
(1,150,263
)
  

    

  
Net change resulting from Institutional Shares transactions
    
2,804,757
 
  

    

  
Net change resulting from share transactions
    
(32,336,108
)
  
515,867,210

    

  
 
(a)
Reflects operations for the period from July 1, 2000 to April 30, 2001.
(b)
Reflects operations for the period from September 4, 2001 (date of initial public investment) to April 30, 2002.
 
Investment Adviser Fee and Other Transactions with Affiliates
 
Investment Adviser Fee—M&T Asset Management, a department of Manufacturers and Traders Trust Company, the Funds’ investment adviser (the “Adviser” or “M&T”), receives for its services an annual investment adviser fee equal to 0.50% of Institutional Prime Money Market Fund’s average daily net assets, 0.60% of Institutional Limited Duration U.S. Government Fund’s average daily net assets, and 0.50% of Money Market Fund’s average daily net assets. The

18

Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
 
Administrative Fee—Federated Services Company (“FServ”) and M&T Securities, Inc. (“M&T Securities”) serve as co-administrators to the Trust and provide the Funds with certain administrative personnel and services necessary to operate the Funds. Administrative services are provided for an aggregate annual fee as specified below:
 
Fees Payable to FServ
 
Maximum Fee

    
Average Aggregate Daily Net Assets of the Vision Group of Funds

0.06%
    
on the first $2 billion
0.03%
    
on the next $3 billion
0.015%
    
in assets in excess of $5 billion
 
Fees Payable to M&T Securities, Inc.
 
Maximum Fee

    
Average Aggregate Daily Net Assets of the Vision Group of Funds

0.04%
    
on the first $5 billion
0.015%
    
on assets in excess of $5 billion
 
Effective May 23, 2001, M&T Securities, Inc. replaced M&T as co-administrator, while FServ continues as the other co-administrator, under the fee schedule described above. FServ and M&T Securities, Inc. may each voluntarily choose to waive a portion of its fee, and can each modify or terminate its voluntary waiver at any time at its sole discretion.
 
Transfer and Dividend Disbursing Agent and Fund Accounting Fee—FServ provides the Funds with certain administrative personnel and fund accounting services. FServ, through its subsidiary, Federated Shareholder Services Company, serves as transfer and dividend disbursing agent for the Funds. The fee paid to FServ is based on the level of average aggregate net assets of the Trust for the period. FServ may voluntarily choose to waive a portion of its fee. FServ can modify or terminate this voluntary waiver at anytime at its sole discretion.
 
Effective November 1, 2000, State Street Bank provides financial administration and fund accounting services to the Funds for an aggregate annual fee of 0.045% of the Funds’ average daily net assets.
 
Distribution Services Fee—The Trust has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Funds will compensate Federated Securities Corp. (“FSC”), the principal distributor, from the net assets of the Funds to finance activities intended to result in the sale of the Funds’ Shares. The Plan provides that each Fund may incur distribution expenses up to 0.25% of the average daily net assets of each Fund, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion. Institutional Limited Duration U.S. Government Fund and Institutional Prime Money Market Fund did not pay or accrue distribution services fees during the year ended April 30, 2002.
 
Prior to the reorganization, Institutional Prime Money Market Fund (formerly Governor Prime Money Market Fund) incurred a distribution services fee. After the reorganization, pursuant to a contractual agreement between the Funds and FSC, Institutional Prime Money Market Fund and Institutional Limited Duration U.S. Government Fund have agreed not to accrue or pay a distribution services fee for a one year period ended January 8, 2002.
 
Shareholder Services Fee—Under the terms of a Shareholder Services Agreement with M&T Securities, M&T Securities may receive up to 0.25% of average daily net assets of each Fund for the period. The fee paid to M&T Securities is used to finance certain services for shareholders and to maintain shareholder accounts. M&T Securities may voluntarily choose to waive any portion of its fee. M&T Securities can modify or terminate this voluntary waiver at any time at its sole discretion. Institutional Prime Money Market Fund did not pay or accrue shareholder services fees during the year ended April 30, 2002.
 
General—Certain of the Officers of the Trust are Officers and Directors or Trustees of the above companies.
 
Investment Transactions
 
Purchases and sales of long-term U.S. Government securities investments for Institutional Limited Duration U.S. Government Fund for the year ended April 30, 2002, were $91,319,243 and $58,360,805, respectively.

19

Report of Ernst & Young LLP, Independent Auditors

 
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
VISION GROUP OF FUNDS:
 
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of VISION Institutional Prime Money Market Fund, VISION Institutional Limited Duration U.S. Government Fund, and VISION Money Market Fund (three of the portfolios constituting the VISION Group of Funds) (the “Funds”), as of April 30, 2002, and the related statements of operations for the year then ended and for VISION Institutional Prime Money Market Fund and VISION Institutional Limited Duration U.S. Government Fund, the statements of changes in net assets and financial highlights for the year ended April 30, 2002 and period from July 1, 2000 to April 30, 2001, and for the VISION Money Market Fund, the statements of changes in net assets and financial highlights for the periods indicated therein. 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. The statements of changes in net assets for the year ended June 30, 2000, and financial highlights for each of the periods presented therein in the period ended June 30, 2000 were audited by other auditors whose report, dated August 15, 2000, expressed an unqualified opinion on those financial statements and financial highlights.
 
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audits 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 and financial highlights. Our procedures included confirmation of securities owned as of April 30, 2002, by correspondence with the custodian and brokers. 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 VISION Institutional Prime Money Market Fund, VISION Institutional Limited Duration U.S. Government Fund, and VISION Money Market Fund, portfolios of the VISION Group of Funds, at April 30, 2002, the results of their operations for the year then ended, the changes in their net assets and financial highlights for the periods indicated above, in conformity with accounting principals generally accepted in the United States.
 
/s/ Ernst & Young LLP
 
Boston, Massachusetts
June 14, 2002

20

Board of Trustees and Trust Officers

 
The following tables give information about each Board member and the senior officers of the Trust. The tables separately list Board members who are “interested persons” of the Trust (i.e., “Interested” Board members) and those who are not (i.e., “Independent” Board members). The Fund Complex consists of 21 investment company portfolios. Unless otherwise noted, each Board member oversees all portfolios in the Fund Complex and serves for an indefinite term. The Trust’s Statement of Additional Information includes additional information about the Trustees of the Trust and is available, without charge and upon request, by calling 1-800-836-2211.
 
Interested Trustee Background

 
Name
Birth Date
Address
Positions Held with Trust
Length of Time Served
  
Principal Occupation(s), Previous Positions and Other Directorships Held



Mark J. Czarnecki†
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, NY 14203
Birthdate: November 3, 1955
Trustee
Began serving: August 2000
  
Principal Occupations: Executive Vice President, Manufacturers and Traders Trust Company (“M&T Bank”), division head for M&T Bank’s investment area, M&T Investment Group.
 
Other Directorships Held: None

Mark J. Czarnecki is “interested” due to positions he holds with M&T Bank, the Funds’ adviser.
 
Independent Trustees Background

 
Name
Birth Date
Address
Positions Held with Trust
Length of Time Served
  
Principal Occupation(s), Previous Positions and Other Directorships Held



Randall I. Benderson
570 Delaware Avenue
Buffalo, NY
Birth date: January 12, 1955
Trustee
Began serving: February 1990
  
Principal Occupations: President and Chief Operating Officer, Benderson Development Company, Inc. (construction).
 
Other Directorships Held: None
Joseph J. Castiglia
Roycroft Campus
21 South Grove Street, Suite 291
East Aurora, NY 14052
Birth date: July 20, 1934
Trustee
Began serving: February 1988
  
Principal Occupations: Chairman of the Board, HealthNow New York, Inc. (health care company); Chairman of the Board, Catholic Health System of Western New York (hospitals, long-term care, home health care); and former President, Chief Executive Officer and Vice Chairman, Pratt & Lambert United, Inc. (manufacturer of paints and chemical specialties).
 
Other Directorships Held: Energy East Corp.
John S. Cramer
4216 Jonathan Lane
Birth date: February 22, 1942
Trustee
Began serving: December 2000
  
Principal Occupations: Retired President and Chief Executive Officer, Pinnacle Health System (health care).
 
Other Directorships Held: None

21

Name
Birth Date
Address
Positions Held with Trust
Length of Time Served
  
Principal Occupation(s), Previous Positions and Other Directorships Held



Daniel R. Gernatt, Jr.
Richardson & Taylor Hollow Roads
Collins, NY
Birth date: July 14, 1940
Trustee
Began serving: February 1988
  
Principal Occupations: President and CFO, Gernatt Asphalt Products, Inc.; Executive Vice President, Dan Gernatt Gravel Products, Inc.; Vice President, Country Side Sand & Gravel, Inc.
 
Other Directorships Held: None
George K. Hambleton, Jr.
1003 Admiral’s Walk
Buffalo, NY
Birth date: February 8, 1933
Trustee
Began serving: February 1988
  
Principal Occupations: Retired President, Brand Name Sales, Inc. (catalog showroom operator); Retired President, Hambleton & Carr, Inc. (catalog showroom operator).
 
Other Directorships Held: None
 
Officers

 
Name
Birth Date
Address
Positions Held with Trust
  
Principal Occupation(s) and Previous Positions



Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birth date: October 22, 1930
Chairman and Treasurer

  
Principal Occupations: President, Executive Vice President and Treasurer of other funds distributed by Federated Securities Corp.; Vice Chairman, Federated Investors, Inc.; Trustee, Federated Administrative Services.
 
Previous Positions: Trustee or Director of other funds distributed by Federated Securities Corp.; CEO and Chairman, Federated Administrative Services; Vice President, Federated Investment Management Company, Federated Investment Counseling, Federated Global Investment Management Corp. and Passport Research, Ltd.; Director and Executive Vice President, Federated Securities Corp.; Director, Federated Services Company; Trustee, Federated Shareholder Services Company.
One M&T Plaza
Buffalo, NY
Birth date: January 2, 1955
President
  
Principal Occupations: President, M&T Securities, Inc., since 1998; Administrative Vice President, M&T Bank, 1995-2001; Senior Vice President, M&T Bank, 2001-Present.
Kenneth G. Thompson
One M&T Plaza
Buffalo, NY
Birth date: September 4, 1964
Vice President
  
Principal Occupations: Vice President, M&T Bank, since 1999; Regional Sales Manager, M&T Securities, Inc., 1995-2001; Director of Product Development for M&T Bank’s Investment Area, M&T Investment Group; Administrative Vice President, M&T Bank, 2002-Present.
Beth S. Broderick
Federated Investors Tower
Pittsburgh, PA
Birth date: August 2, 1965
Vice President and Assistant Treasurer
  
Principal Occupations: Vice President, Mutual Fund Services Division, Federated Services Company.

22

Name
Birth Date
Address
Positions Held with Trust
  
Principal Occupation(s) and Previous Positions



C. Grant Anderson
Federated Investors Tower
Pittsburgh, PA
Birth date: November 6, 1940
Secretary
  
Principal Occupations: Corporate Counsel, Federated Investors, Inc.; Vice President, Federated Services Company.

 
 
Shares of the VISION Group of Funds are not FDIC insured or otherwise protected by the U.S. government, are not deposits or other obligations of, or guaranteed by, Manufacturers and Traders Trust Company, and are subject to investment risks, including possible loss of the principal amount invested.
 
This report is authorized for distribution to prospective investors only when preceded or accompanied by the Funds’ prospectus which contains facts concerning their objectives and policies, management fees, expenses and other information.

23

 

 

VISION INSTITUTIONAL PRIME MONEY MARKET FUND

VISION INSTITUTIONAL LIMITED DURATION U.S. GOVERNMENT FUND

VISION MONEY MARKET FUND

[Logo of Vision Group of Funds]

www.visionfunds.net visionfunds@mandtbank.com

Mutual Fund Shareholder Services
P.O. Box 4556
Buffalo, NY 14240-4556

Cusip 92830F653
Cusip 92830F646
Cusip 92830F612

26470 (6/02)

Sign up for Fund Document e-delivery by visiting www.visionfunds.net/myaccount

VISION GROUP OF FUNDS

Annual Report to Shareholders

April 30, 2002

for Where you want to be
 
Contents

 
President’s Message
  
1
Investment Reviews
  
4
Portfolio of Investments
  
26
Statements of Assets and Liabilities
  
62
Statements of Operations
  
70
Statements of Changes in Net Assets
  
74
Financial Highlights
  
80
Notes to Financial Statements
  
92
Report of Ernst & Young LLP, Independent Auditors
  
110
Board of Trustees & Trust Officers
  
111


President’s Message

 
Dear Investor:
 
I am pleased to present the Annual Report of the VISION Group of Funds for the 12-month period from May 1, 2001 through April 30, 2002. This report begins with a discussion by each equity or income Fund’s management about the economy, the market, and fund strategies over the reporting period. Next, you’ll find a complete list of portfolio holdings and financial statements for each Fund.
 
The 12-month reporting period was a difficult one for stocks, with the exception of small cap stocks. In times like this, stock investors should keep their long-term perspective in mind. Periods of negative returns like we’ve been experiencing, while painful, are the risk that investors assume to pursue the long-term performance potential of stocks. Bond investors, in contrast, continued to enjoy positive returns. For more in-depth information on the year’s investment climate, I urge you to read the portfolio managers’ investment reviews.
 
Fund-by-Fund performance highlights are as follows:
 
VISION EQUITY FUNDS
 
VISION International Equity Fund
The Fund pursues long-term capital appreciation by investing in international stocks issued by established companies in developed markets.* Over the 12-month reporting period, the fund’s Class A Shares produced a total return of (5.60)%, or (10.77)% adjusted for the Fund’s sales charge. The total return reflects income distributions totaling $0.16 per share. Class B Shares produced a total return of (6.42)%, or (11.03)% adjusted for the Fund’s contingent deferred sales charge.** The total return reflects income distributions totaling $0.13 per share.† At the end of the reporting period, the Fund’s net assets totaled $45.8 million.
 
VISION Small Cap Stock Fund
This Fund pursues growth of capital by investing in stocks issued by small cap companies.†† Over the 12-month reporting period, the Fund’s Class A Shares produced a total return of 8.03%, or 2.12% adjusted for the Fund’s sales charge. The total return reflects a capital gain distribution of $0.34 per share. Class B Shares produced a total return of 7.22%, or 2.22% adjusted for the Fund’s contingent deferred sales charge, through a slight increase in net asset value. The total return reflects a capital gain distribution of $0.34 per share.**† At the end of the reporting period, the Fund’s net assets totaled $115.4 million.
 
VISION Mid Cap Stock Fund
The Fund’s portfolio pursues its objective of total return by investing in high-quality mid-cap stocks selected through a systematic process that focuses on value, or ‘‘cheapness,’’ and improving fundamental strength. During the reporting period, the Fund’s Class A Shares produced a total return of (0.83)%, or (6.25)% adjusted for the Fund’s sales charge, the result of a slight decline in the value of the Fund’s holdings. Class B Shares produced a total return of (1.67)%, or (6.59)% adjusted for the contingent deferred sales charge.** At the end of the reporting period, the Fund’s net assets totaled $121.5 million.
 
VISION Large Cap Growth Fund
This fund pursues capital appreciation by investing in large, established blue-chip growth companies. In a difficult period for large cap growth stocks, the Fund’s Class A Shares produced a total return of (7.38)%, or (12.50)% adjusted for the Fund’s sales charge, through a decrease in net asset value. Class B Shares produced a total return of (8.27)%, or (12.86)% adjusted for the Fund’s contingent deferred sales charge, through a decrease in net asset value.** At the end of the reporting period, the Fund’s net assets totaled $16.5 million.
 
*
International investing involves special risks including currency risk, increased volatility of foreign securities, and differences in auditing and other financial standards.
**
Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
This VISION Fund is the successor to a corresponding Governor Fund pursuant to a reorganization that took place on January 8, 2001. Prior to that date, the VISION Fund had no investment operations. Accordingly, the performance information provided for the period prior to January 8, 2001, is historical information for the corresponding Governor Fund.
††
Small company stocks may be less liquid and subject to greater price volatility than large capitalization stocks.

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VISION Large Cap Core Fund
This fund pursues long-term capital appreciation and provides an “all around” approach to stocks by investing in large, established blue-chip companies. Over the 12-month reporting period, which continued to be a difficult one for large cap growth stocks, the Fund’s Class A Shares produced a total return of (15.35)%, or (20.04)% adjusted for the Fund’s sales charge, through a decrease in net asset value. Class B Shares produced a total return of (16.10)%, or (19.99)% adjusted for the Fund’s contingent deferred sales charge, through a decrease in net asset value.*† Both share classes paid a capital gain of $0.65 per share. At the end of the reporting period, the Fund’s net assets totaled $129.9  million.
 
VISION Large Cap Value Fund
This fund offers a way to navigate toward income and capital appreciation from stocks believed to be undervalued. In a difficult stock market environment, the Fund’s Class A Shares produced a total return of (11.99)%, or (16.86)% adjusted for the Fund’s sales charge. Class B Shares produced a total return of (12.88)%, or (17.17)% adjusted for the contingent deferred sales charge. Both share classes paid a capital gain distribution totaling $0.16 per share.* The Fund’s net assets totaled $43.3 million at the end of the reporting period.
 
VISION MANAGED ALLOCATION FUNDS
 
VISION Managed Allocation Fund — Aggressive Growth
This fund pursues capital appreciation by investing in a strategic combination of VISION Funds with an emphasis on those investing in stocks. Over the reporting period, the Fund’s Class A Shares produced a total return of (5.92)%, or (10.62)% adjusted for the Fund’s sales charge as the value of the Fund’s holdings declined. The Fund paid dividend income of $0.02 per share and a capital gain totaling $0.14 per share.*† The Fund’s net assets totaled $4.9 million at the end of the reporting period.
 
VISION Managed Allocation Fund — Moderate Growth
This fund pursues capital appreciation and, secondarily, income by investing in a strategic combination of VISION stock, bond, and money market funds. Over the reporting period, the Fund’s Class A Shares produced a total return of (2.39)%, or (6.81)% adjusted for the Fund’s sales charge. The Fund paid dividend income of $0.16 per share and a capital gain distribution totaling $0.02 per share.*† The Fund’s net assets totaled $8.2 million at the end of the reporting period.
 
VISION Managed Allocation Fund — Conservative Growth
This fund pursues capital appreciation and income by investing in a strategic combination of VISION Funds with an emphasis on those investing in bonds. Over the reporting period, the Fund’s Class A Shares produced a total return of 1.60%, or (2.45)% adjusted for the Fund’s sales charge. A slight decline in the Fund’s net asset value was tempered by dividend income of $0.30 per share.*† The Fund’s net assets totaled $2.8 million at the end of the reporting period.
 
VISION FIXED INCOME FUNDS
 
VISION New York Municipal Income Fund
The Fund’s portfolio of high-quality, New York municipal bonds paid tax-free income distributions totaling $0.41 per share for Class A Shares.** In a continued positive interest rate environment for bond prices, the Fund’s net asset value increased by $0.17. As a result, the Fund’s Class A Shares achieved a total return of 5.74%, or 1.01% adjusted for the Fund’s sales charge.* By the end of the reporting period, tax-sensitive New York residents had invested a total of $80.5 million in the Fund.
 
*
Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
**
Income may be subject to the federal alternative minimum tax and some state and local taxes.
This VISION Fund is the successor to a corresponding Governor Fund pursuant to a reorganization that took place on January 8, 2001. Prior to that date, the VISION Fund had no investment operations. Accordingly, the performance information provided for the period prior to January 8, 2001, is historical information for the corresponding Governor Fund.

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VISION Pennsylvania Municipal Income Fund
This fund pursues income exempt from both federal and Pennsylvania state income taxes through a portfolio of high-quality, Pennsylvania municipal bonds. Over the reporting period, the Fund’s Class A Shares paid tax-free income distributions totaling $0.41 per share.** In a positive interest rate environment for bond prices, the net asset value increased by $0.16. As a result, the Fund achieved a total return of 5.80%, or 1.06% adjusted for the Fund’s sales charge.*† By the end of the reporting period, tax-sensitive Pennsylvania residents had invested a total of $84.8 million in the Fund.
 
VISION Intermediate Term Bond Fund
This fund pursues current income, with long-term growth of capital as a secondary objective, by investing in a broad range of intermediate-term, U.S. government and investment grade corporate bonds. Over the reporting period, Class A Shares paid dividends totaling $0.54 per share, while the Fund’s net asset value rose by $0.05. As a result, the Fund produced a total return of 6.34%, or 1.51% adjusted for the Fund’s sales charge.*† At the end of the reporting period, the Fund’s net assets totaled $159.9 million.
 
VISION U.S. Government Securities Fund
The Fund’s portfolio of U.S. government securities paid dividends totaling $0.57 per share, while the Fund’s net asset value rose by $0.05. As a result, the Fund produced a total return of 6.72%, or 1.97% adjusted for the Fund’s sales charge.* At the end of the reporting period, the Fund’s net assets totaled $116.4 million.
 
VISION MONEY MARKET FUNDS††
 
VISION New York Tax-Free Money Market Fund, a portfolio of New York municipal money market securities, paid double-tax-free dividends (triple-tax-free dividends to New York City residents) totaling $0.02 per share.** The Fund’s net assets totaled $187.0 million at the end of the reporting period.
 
VISION Money Market Fund, a diversified portfolio of corporate and U.S. government money market securities, paid dividends totaling $0.02 per share to Class A Shares investors and $0.02 per share to Class S Shares investors. The Fund’s net assets totaled $1.6 billion at the end of the reporting period.
 
VISION Treasury Money Market Fund, which invests exclusively in U.S. Treasury securities, paid dividends totaling $0.02 per share to Class A Shares investors and $0.02 per share to Class S Shares investors. The Fund’s net assets totaled $767.5 million at the end of the reporting period.
 
As always, thank you for choosing one or more of the VISION Funds to pursue your financial goals. We’ll continue to keep you up-to-date on your progress as you participate in key financial markets through this expanded mutual fund  family.
 
Sincerely,
 
/s/ Carl W. Jordan
Carl W. Jordan
President
June 15, 2002
 
*
Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
**
Income may be subject to the federal alternative minimum tax and some state and local taxes.
This VISION Fund is the successor to a corresponding Governor Fund pursuant to a reorganization that took place on January 8, 2001. Prior to that date, the VISION Fund had no investment operations. Accordingly, the performance information provided for the period prior to January 8, 2001, is historical information for the corresponding Governor Fund.
††
An investment in the funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the funds.

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VISION
International Equity Fund
 
 
 
Equity markets have risen when sentiment began to anticipate a recovery and fallen again when hopes for economic growth were dampened. The broad major markets have risen, and earnings and news flow from companies have improved, but some sectors such as telecommunication services are under renewed pressure.
 
VISION International Equity Fund was well positioned to benefit from these market changes. The Fund’s Class A Shares, down 5.60% for the year ended April 30, 2002 or down 10.77% adjusted for the Fund’s sales charge, outperformed the Morgan Stanley Capital International Unhedged Europe, Australasia and Far East Index (“MSCI-EAFE”)1 (13.87)% by 827 basis points. The primary source of outperformance was stock selection. The Fund’s Class B shares returned (6.42)% for the year ended April 30, 2002, or (11.03)% adjusted for the Fund’s contingent deferred sales charge.
 
During the year we have made some changes towards momentum stocks in the portfolio but exposure to Information Technology remains underweighted. We reduced the exposure to underweight toward the end of last year because we judged that stocks were discounting too strong a recovery. We have decreased our defensive exposure by moving Consumer Staples to an underweight.
 
We are currently overweighted in Materials, Capital Goods, Health Care, Pharmaceuticals, Banks, Information Services and Utilities. Sectors we are staying away from include Retail, Computer Hardware and Software, Telecom and  Energy.
 
The positive contribution from currency is primarily from the underweight to the yen and the Australian dollar overweight. Currency strategy remains underweight the Japanese yen in favor of the Australian dollar and overweight the Euro at the expense of the British
 
 
1
The MSCI-EAFE is an unmanaged market capitalization weighted equity index comprising 20 of the 48 countries in the MSCI universe and representing the developed world outside of North America. Each MSCI country index is credited separately, then aggregated, without charge into regional MSCI indices. EAFE performance data is calculated in U.S. dollars and local currency. Investments cannot be made in an index.
 
The graph below illustrates the hypothetical investment of $10,000* in VISION International Equity Fund, Class A Shares (the “Fund”) from February 9, 1999 (start of performance) to April 30, 2002, compared to the Morgan Stanley Capital International – Europe, Australasia and Far East Index (“MCSI-EAFE”).†
 
Average Annual Total Return For The Period Ended April 30, 2002**

1 Year
    
Start of Performance (2/9/99)
(10.77)%
    
(1.75)%

 
Growth of $10,000 Invested in VISION International Equity Fund — Class A Shares††
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares. Your investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). Effective January 8, 2001, the maximum sales charge increased to 5.50%. The Fund’s performance assumes the reinvestment of all dividends and distributions. The MSCI-EAFE has been adjusted to reflect reinvestment of dividends on securities in the index.
**
Total returns quoted reflect all applicable sales charges.
The MCSI-EAFE is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The index is unmanaged.
††
VISION International Equity Fund is the successor to Governor International Equity Fund pursuant to a reorganization that took place on January 8, 2001. The information presented above, for the periods prior to January 8, 2001, is historical information for Governor International Equity Fund.

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pound. Strong domestic demand, in part fueled by the boom in financial services and soaring house prices, has driven the price of the pound sterling above its long-term equilibrium rate. As the growth outlook in continental Europe improves relative to the UK, we expect the pound to depreciate back to a more sustainable long-term level.
The graph below illustrates the hypothetical investment of $10,000* in VISION International Equity Fund, Class B Shares (the “Fund”) from January 10, 2001 (start of performance) to April 30, 2002, compared to the Morgan Stanley Capital International — Europe, Australasia and Far East
Index (“MCSI-EAFE”).†
 
Average Annual Total Return For The Period Ended April 30, 2002**

1 Year
 
Start of Performance (1/10/01)
(11.03)%
 
(12.01)%

 
Growth of $10,000 Invested in VISION International Equity Fund — Class B Shares
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares. Your investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund. The ending value of the Fund reflects a maximum 4.00% contingent deferred sales charge on any redemption less than 2 years from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. MSCI-EAFE has been adjusted to reflect reinvestment of dividends on secu- rities in the index.
**
Total returns quoted reflect all applicable sales charges.
The MCSI-EAFE is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The index is unmanaged.

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VISION
Small Cap Stock Fund
 
The year ended April 30, 2002 witnessed financial markets being impacted by tragedy, recession, scandals and high market volatility. Over this fiscal year, small cap stocks significantly outperformed larger cap stocks. The Russell 2000 Index1 generated a total return through all of this, of 6.7%, whereas the Standard & Poor’s 500 Index2 declined 12.6%.
 
Small Cap Value oriented stocks were the leaders of the market during this fiscal year. The Russell 2000 Value Index1 returned 22.4% whereas the Russell 2000 Growth Index1 declined 8.5%. It appears the visibility of earnings and solid cash flows helped value stocks over growth issues. Growth was hampered by the emphasis in technology and emerging pharmaceutical companies; short-term pessimism and profit taking in these areas dragged down competitive performance.
 
Emphasis toward a growing economy has led growth managers to increase positions in Technology, Biotech and Emerging Pharmaceutical Companies. These areas are expected to experience accelerating sales and earnings, which could be translated, into better security pricing. Value oriented management has emphasized a more cyclical positioning in Consumer Related areas, Housing and Consumer Products. Having underweighted the Technology group has assisted overall performance. Anticipating an improved economic environment, consumer led areas remain an important part of the portfolio.
 
The combination of value and growth management within VISION Small Cap Stock Fund has benefited in overall returns. For the first year, new monies have been evenly divided between managers. With the outperformance of value vs. growth and the reality of recovering growth, a trend toward increasing the growth weighting may be considered near-term. With greater confidence in a recovery developing, small cap stocks have historically done well.
 
1
The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index. The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. These indexes are unmanaged and investments cannot be made in an index.
 
The graph below illustrates the hypothetical investment of $10,000* in the VISION Small Cap Stock Fund, Class A Shares (the “Fund”) from July 1, 1994 (start of performance) to April 30, 2002, compared to the Russell 2000 Index (“Russell 2000”).**
 
Average Annual Total Return For The Period Ended April 30, 2002***

1 Year
2.12%
 
5 Years
9.33%
 
Start of Performance (7/1/94)
11.82%

 
Growth of $10,000 Invested in VISION Small Cap Stock Fund — Class A Shares†
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares. Your investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). Effective
 
January 8, 2001, the maximum sales charge increased to 5.50%. The Fund’s performance assumes the reinvestment of all dividends and distributions. The Russell 2000 has been adjusted to reflect reinvestment of dividends on securities in the index.
**
The Russell 2000 is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The index is unmanaged.
***
Total returns quoted reflect all applicable sales charges.
VISION Small Cap Stock Fund is the successor to the Governor Aggressive Growth Fund pursuant to the reorganization that took place on January 8, 2001. The information presented above, for the periods prior to January 8, 2001, is historical information for Governor Aggressive Growth Fund. The quoted performance of VISION Small Cap Stock Fund includes performance of certain predecessor collective trust fund (“commingled”) accounts for periods dating back to 7/1/94 and prior to VISION Small Cap Stock Fund’s commencement of operations on 2/3/97, as adjusted to reflect the expenses associated with the Fund. The commingled accounts were not registered with the Securities and Exchange Commission and, therefore, were not subject to the investment restrictions imposed by law on registered mutual funds. If the commingled accounts had been registered, the commingled accounts’ performance may have been adversely affected.

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2
The Standard & Poor’s 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Investments cannot be made in an index.

The graph below illustrates the hypothetical investment of $10,000* in VISION Small Cap Stock Fund, Class B Shares (the “Fund”) from January 10, 2001 (start of performance) to April 30, 2002, compared to the Russell 2000 Index (“Russell 2000”).**
 
Average Annual Total Return For The Period Ended April 30, 2002***

1 Year
2.22%
 
Start of Performance (1/10/01)
4.63%



 
Growth of $10,000 Invested in VISION Small Cap Stock Fund — Class B Shares
 
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Your investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund. The ending value of the Fund reflects a maximum 4.00% contingent deferred sales charge on any redemption less than 2 years from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The Russell 2000 has been adjusted to reflect reinvestment of dividends on securities in the index.
**
The Russell 2000 is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The index is unmanaged.
***
Total returns quoted reflect all applicable sales charges.

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VISION
Mid Cap Stock Fund
 
 
While the broad market declined over the past year, mid cap stocks continued to perform well. In an uncertain environment, as the market weighed the risks of terrorist attacks, a recession and accounting scandals, investors rewarded mid cap names that have understandable business models and balance sheets. In this defensive environment, consumer noncyclicals and medical services outperformed, while consumer cyclicals and services benefited from the economic recovery and strong consumer spending. On the negative side, technology and telecom names continued to be hit hard, as investors remained uncertain as to when businesses will increase Information Technology spending again. Energy stocks tumbled in the wake of the Enron scandal. For the fiscal year ended April 30, 2002, the Standard and Poor’s Mid Cap 400 Index1 returned 6.57%, compared to a (12.62)% return for the Standard and Poor’s 500 Index2 and a (0.70)% return for the broader Russell Mid Cap Index.3
 
During this period, the Fund benefited from a diversified strategy that targets inexpensive mid cap stocks with improving fundamentals. For the fiscal year ended April 30, 2002, the Fund’s Class A shares and Class B shares returned (0.83)% and (1.67)% at net asset value respectively, and (6.25)% and (6.59)%, adjusted for the Fund’s sales charge and contingent deferred sales charge, respectively.
 
Medical services stocks, such as Anthem and Trigon Healthcare, were a bright spot in healthcare, performing well due to a positive pricing cycle for medical insurers and favorable valuation. Responding to robust spending by consumers on autos and housing, shares of cyclical stocks like Lear, Borg Warner, and Centex increased. Investors looking for safer havens rotated to noncyclicals like UST, Sensient Technologies, and Avon Products. Portfolio performance was held back by energy companies as a result of the fallout from the Enron scandal. Positions in Dynegy, Calpine and Allegheny Energy underperformed, and we have since sold them out of the Fund due to deteriorating earnings outlooks at these companies.
 
Going forward, we expect investors to maintain their focus on the improving U.S. economy and the potential

 
The graph below illustrates the hypothetical investment of $10,000* in VISION Mid Cap Stock Fund (Class A Shares) (the “Fund”) from November 29, 1993 (start of performance) to April 30, 2002, compared to the Standard & Poor’s Mid Cap 400 Index (S&P 400) and the Russell Mid Cap Index (RMC).†
 
Average Annual Total Return For The Period Ended April 30, 2002**

1 Year
 
5 Years
 
Start of Performance (11/29/93)
(6.25)%
 
7.37%
 
10.66%

 
Growth of $10,000 Invested in VISION Mid Cap Stock Fund — Class A Shares
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). Effective July 1, 1996, the maximum sales charge increased to 5.50%. The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 400 and the RMC have been adjusted to reflect reinvestment of dividends on securities in the indexes.
**
Total returns quoted reflect all applicable sales charges.
The S&P 400 and the RMC are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The indexes are unmanaged.

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for earnings acceleration. The recession that by some accounts began last March seems to be behind us, evidenced by consecutive quarters of higher than expected Gross Domestic Product growth. However, the recovery is shaping up to be modest and gradual. With little signs of inflation, the Federal Reserve Board has signaled that it will remain patient about raising rates as it awaits evidence of a more robust economic recovery. A continuing economic recovery — albeit in fits and starts — argues well for corporate profits and should lend support for domestic equities as the year progresses.
 
1
The Standard & Poor’s Midcap 400 Index is an unmanaged capitalization-weighted index of common stocks representing all major industries in the mid-range of the U.S. stock market. Investment cannot be made in an index.
 
2
The Standard & Poor’s 500 Index is an unmanaged capitalization-weighted Index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Investments cannot be made in an index.
 
3
The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index, which represent approximately 35% of the total market capitalization of the Russell 1000 Index. Indexes are unmanaged and investments cannot be made in an index.

 
The graph below illustrates the hypothetical investment of $10,000* in VISION Mid Cap Stock Fund (Class B Shares) (the “Fund”) from March 15, 2000 (start of performance) to April 30, 2002, compared to the Standard & Poor’s Mid Cap 400 Index (S&P 400) and the Russell Mid Cap Index (RMC).†
 
Average Annual Total Return For The Period Ended April 30, 2002**

1 Year
(6.59)%
 
Start of Performance (3/15/00)
4.50%

 
Growth of $10,000 Invested in VISION Mid Cap Stock Fund — Class B Shares
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund. The ending value reflects a maximum 3.00% contingent deferred sales charge on any redemption less than 3 years from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 400 and the RMC have been adjusted to reflect reinvestment of dividends on securities in the indexes.
**
Total returns quoted reflect all applicable sales charges and contingent deferred sales charges.
The S&P 400 and the RMC are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The indexes are unmanaged.

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VISION
Large Cap Growth Fund
 
 
During the 12 months ended April 30, 2002, the Fund’s Class A Shares returned (7.38)% based on net asset value, or (12.50)% adjusted for the Fund’s sales charge, and the Fund’s Class B Shares returned (8.27)% based on net asset value, or (12.86)% adjusted for the Fund’s contingent deferred sales charge. This compares with a (10.64)% return for the S&P/Barra Growth Index,1 a commonly referenced unmanaged index of large capitalization “growth” oriented stocks. During this same period the Lipper Large Cap Growth Fund Average2 returned (20.44)% and the S&P 500 Index3 returned (12.62)%.
 
The sub-adviser, Montag & Caldwell focuses on large capitalization companies that have above-average earnings growth rates which are undervalued in the stock market. This attention to valuation tends to make the investment style risk averse.
 
The Fund’s out-performance for the fiscal year can be attributed to superior stock selection in the Consumer Staple, Industrial, and Energy sectors. The gains in the Consumer Staples sector, with holdings such as Coca-Cola, PepsiCo, and Procter & Gamble, are consistent with our emphasis on high quality growth companies that can achieve solid earnings growth regardless of the slope of the economic recovery. We feel that investors continue to be concerned with the quality and sustainability of an earnings recovery going forward. Our strong stock selection in the Industrial sector is attributable to our cyclical growth investments like 3M
Company and Masco. In addition, our underweight in Information Technology (13.30% of the portfolio at April 30, 2002 vs. 25.35% for the S&P/Barra Growth Index) sector positively contributed to performance. We remain skeptical of lofty technology valuations, especially in the more commodity-based areas, where near-term improvement in earnings has been extrapolated into the future. Without a steady flow of demand, we feel these estimates may be set for disappointment.
 
Recent portfolio activity includes the establishment of two new technology issues: Siebel Systems (SEBL) and BEA Systems (BEAS). As mentioned above, we continue to examine the technology sector with caution. However, both of these companies have leading positions within their markets: Siebel in sales automation software and BEA in application server software. We are of the opinion that corporate technology budgets will be targeted first toward software rather than hardware and we believe these two companies are in excellent position to benefit from this trend. We also established a position in Eli Lilly (LLY) recently. While near-term results are being depressed by the recent loss of Prozac patent exclusivity, earnings momentum should soon turn positive and the company seems well positioned for superior long-term earnings growth.
 
Our sell discipline had a positive effect on performance during the fiscal year. It is almost always easier to buy a stock than to sell one. Our sell discipline leads us to reduce a position in a stock when:
 
1)
it reaches a premium to our estimate of fair value;
2)
the reason for an earnings disappointment seems unlikely to be corrected in the short term;
3)
fundamentals change or evolve differently from our forecast;
4)
a more attractive opportunity presents itself.
 
Early during 2002, we eliminated our position in
General Electric (GE) given signs of increasing weakness in its long-cycle businesses. While the company is still likely to post double-digit earnings, this headwind increases the importance of acquisitions and a still murky recovery in the short-cycle businesses to offset the weakness. We also eliminated our already-reduced positions in AOL Time Warner (AOL) and Bristol-Myers Squibb (BMY) due to deteriorating earnings trends. All three of these stocks now trade at substantially lower prices than where your fund sold them.
 
Against the backdrop of Enron hearings in Washington, the intensification of hostilities in the Middle East, and the continuing war in Afghanistan, the market has had a difficult and volatile time of late. We continue to believe this will be a transition year for the stock market, with a moderate but positive bias toward the end of the year. We still believe that the S&P 500 index could show a positive return for the year due to the projected recovery in the economy and corporate profits, along with continued low inflation. In anticipation of a recovery, the portfolio is well positioned with attractively priced securities of companies whose average growth rate is approximately 2x the S&P 500.

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10


1
The S&P/Barra Growth Index is an unmanaged capitalization-weighted index of stocks in the Standard & Poor’s 500 Index having the highest price to book ratios. The index consists of approximately half of the S&P 500 on a market capitalization basis. Investments cannot be made in an index.
 
2
Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper, Inc. as falling into the respective categories indicated. These figures do not reflect sales charges.
 
3
The S&P 500 Index is an unmanaged capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Investments cannot be made in an index.
 
The graph below illustrates the hypothetical investment of $10,000* in VISION Large Cap Growth Fund Fund, Class A Shares (the “Fund”) from March 20, 2000 (start of performance) to April 30, 2002, compared to the Standard and Poor’s 500 Index (“S&P 500”), the Russell 1000 Index (“Russell 1000”) and the Standard and Poor’s 500/Barra Growth Index (“S&P 500/BG”).†
 
Average Annual Total Return For The Period Ended April 30, 2002**

1 Year
 
Start of Performance (3/20/00)
(12.50)%
 
(12.81)%

 
Growth of $10,000 Invested in VISION Large Cap Growth Fund — Class A Shares
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charge = $9,450). The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 500, Russell 1000 and the S&P 500/BG have been adjusted to reflect reinvestment of dividends on securities in the indices.
**
Total returns quoted reflect all applicable sales charges.
The S&P 500, Russell 1000 and the S&P 500/BG are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The indices are unmanaged.

(continued on next page)

11


 
The graph below illustrates the hypothetical investment of $10,000* in VISION Large Cap Growth Fund Fund, Class B Shares (the “Fund”) from April 6, 2000 (start of performance) to April 30, 2002, compared to the Standard and Poor’s 500 Index (“S&P 500”), the Russell 1000 Index (“Russell 1000”) and the Standard and Poor’s 500/Barra Growth Index (“S&P 500/BG”).†
 
Average Annual Total Return For The Period Ended April 30, 2002**

1 Year
 
Start of Performance (4/6/00)
(12.86)%
 
(14.07)%



 
Growth of $10,000 Invested in VISION Large Cap Growth Fund — Class B Shares
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund. The ending value of the Fund reflects a maximum 5.00% contingent deferred sales charge on any redemption less than 3 years from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 500, Russell 1000 and the S&P 500/BG have been adjusted to reflect reinvestment of dividends on securities in the indices.
**
Total returns quoted reflect all applicable sales charges.
The S&P 500, Russell 1000 and the S&P 500/BG are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The indices are unmanaged.

12


 
VISION
Large Cap Core Fund
 
VISION Large Cap Core Fund’s Class A shares returned (15.35)% based on net asset value or (20.04)% adjusted for the Fund’s sales charge and the Fund’s Class B shares returned (16.10)% based on net asset value, or (19.99)% adjusted for the Fund’s contingent deferred sales charge for the twelve months ended April 30, 2002. The (15.35)% total return based on the net asset value compares with a (12.62)% total return for the S&P 500 Index1, a commonly referenced unmanaged index of large capitalization stocks. During this same period the Lipper Large Cap Core Fund Average2 returned (13.93)%.
 
Our equity approach is based on consistency and discipline. We apply a disciplined, yet opportunistic methodology focused on identifying companies with growth characteristics selling at attractive valuations. Our investment process is grounded in three dimensions. We utilize a top down thematic perspective and bottom-up intensive security analysis, with both approaches centered and balanced by risk control measures.
 
Top-Down: Thematic
 
Our thematic dimension incorporates our top-down assessment of how we should be positioned to take advantage of secular trends or patterns developing in the U.S. economy. We identified five major themes that should prove important for the 2002-2003 time frame:
 
1.
Demographics — The graying of America affects consumption patterns. We identify companies that capture increasing demand for pharmaceuticals while minimizing drug specific risk. Specific stocks include Caremark RX, Express Scripts, and IMS Health. As the U.S. population ages, investing replaces consumption. This favors asset gatherers, annuity writers, and custodians such as Merrill Lynch, Hartford Financial and Bank of New York.
 
2.
Supply/Demand Imbalances — Cyclical industry conditions can create significant supply/demand imbalances. For example, demand outstrips supply in the U.S. hospital or health provider system. Demand for tertiary care in fast-growing markets is increasing while the supply of hospital beds is declining. Health Management Associates and Tenet Healthcare are examples of this theme. Demand for property and casualty insurance is rising while the supply or willingness to write certain types of policies has been curtailed, affording insurers such as St. Paul pricing power.
 
3.
The Information Age — Accelerated pace of change intensifies the battleground between innovators and incumbents. We invest in industry leaders who demonstrate their commitment to enhance their competitive advantage. We also invest with innovators and disrupters who will be tomorrow’s leaders. Additionally, many information age companies have significant intangible assets. Intangible assets can be key drivers of equity valuations, but require special qualitative analysis.
 
    
There are a number of sub-themes within the Information Age theme. The first is that power supply regulation becomes more important as product complexity increases. International Rectifier addresses this need. Second, we identify companies who establish and control the standards setting process. For mobility and wireless standards we have invested in Texas Instruments and Intersil. Third, we seek to participate in innovation while minimizing our exposure to specific technologies. Agilent Technologies reflects this concept.
 
    
A fourth sub-theme is that powerful two-way broadband networks plus a benign regulatory environment brighten cable’s future. Comcast and Cox Communications represent our cable choices. Fifth, video-on-demand will drive a new round of set-top box sales and Scientific Atlanta is our selection. Sixth, enterprises are turning towards aggregators to implement their technology plans. To meet market demands, these aggregators — such as IBM — need scale and scope. Our last Information Age sub-theme is convergence of content, delivery, and multiple services favors media companies with powerful brands. Here, our holdings include  Viacom and Walt Disney.
 
4.
Industry Consolidation — Profit pressures and competitive forces will drive consolidation in the energy, financial services, and utility sectors. Also, increasing scale improves efficiency and returns. Some European financial conglomerates have excess capital and are seeking U.S. distribution. Jefferson Pilot is a fund holding that should benefit from this trend. A number of the multinational integrated oil companies have been acquiring North American reserves; Burlington Resources and  Marathon Oil could appeal to acquirers.
 
5.
The Global Market Place — Open markets and new groups of global consumers provide growth opportunities, especially for companies that possess

(continued on next page)

13


 
economies of scale and/or scope in their industry. Citigroup, Kimberly-Clark, Morgan Stanley, Dell, and Capital One Financial are a few of our holdings extending their market power internationally.
 
6.
Security Takes Center Stage — Complex global dynamics have replaced the predictability of the Cold War and the investment mainstream’s complacency regarding security has been shattered. Real increases in the defense budget have accelerated, favoring especially defense electronics powerhouse Raytheon. Both public facilities and services security infrastructure are getting a massive overhaul, which benefits Symbol Technologies and Tyco International. Additionally, the value of North American sources of energy and power has increased, favoring El Paso Energy.
 
Bottom-Up: Intensive Security Analysis — GARP
 
We emphasize stocks with growth prospects that on average are greater than the earnings growth rate of our Value benchmark. This follows from our conviction that future stock prices will largely be determined by future earnings growth. However, we want to pay a low multiple for that growth. Our average forward P/E’s or price earnings ratios are lower than the average P/E multiple of the S&P Barra Value Index3. A favorable P/E to growth ratio (PEG ratio) is our primary metric of GARP or Growth-At-a-Reasonable Price.
 
Risk control
 
We utilize stringent risk control measures to minimize expected tracking error or expected variance from our benchmark — the value side of the S&P 500. As a result of our risk control process, we invest in many industry leaders such as General Electric, Microsoft, Wal-Mart, Pfizer, Intel, Coca-Cola, Cisco, AIG, Exxon-Mobil, Chevron-Texaco, and Verizon Communications.
 
1
The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Investments cannot be made in an index.
2
Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Analytical Services, Inc. as falling into the respective categories indicated. These figures do not reflect sales charges.
3
The S&P 500/Barra Value Index is a market capitalization-weighted index of the stocks in the S&P 500 Index having the lowest price to book ratios. The index consists of approximately half of the S&P 500 on a market capitalization basis. This index is unmanaged and investments cannot be made in an index.

 
The graph below illustrates the hypothetical investment of $10,000* in VISION Large Cap Core Fund, Class A Shares (the “Fund”) from January 1, 1995 (start of performance) to April 30, 2002, compared to the Standard and Poor’s 500 Index (“S&P 500”).†
 
Average Annual Total Return For The Period Ended April 30, 2002**

1 Year
 
5 Years
 
Start of Performance (1/1/95)
(20.04)%
 
3.91%
 
11.01%

 
Growth of $10,000 Invested in VISION Large Cap Core Fund — Class A Shares††
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). Effective January 8, 2001, the maximum sales charge increased to 5.50%. The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 500 has been adjusted to reflect reinvestment of dividends on securities in the index.
**
Total returns quoted reflect all applicable sales charges.
The S&P 500 is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The index is unmanaged.
††
VISION Large Cap Core Fund is the successor to Governor Established Growth Fund pursuant to a reorganization that took place on January 8, 2001. The information presented above, for the periods prior to January 8, 2001, is historical information for Governor Established Growth Fund. The quoted performance of VISION Large Cap Core Fund includes performance of certain predecessor collective trust fund (“commingled”) accounts, for periods dating back to 1/1/95 and prior to VISION Large Cap Core Fund’s commencement of operations on 12/2/96, as adjusted to reflect the expenses associated with the Fund. The commingled accounts were not registered with the Securities and Exchange Commission and, therefore, were not subject to the investment restrictions imposed by law on registered mutual funds. If the commingled accounts had been registered, the commingled accounts’ performance may have been adversely affected.

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14


 
The graph below illustrates the hypothetical investment of $10,000* in VISION Large Cap Core Fund, Class B Shares (the “Fund”) from January 18, 2001 (start of performance) to April 30, 2002, compared to the Standard and Poor’s 500 Index (“S&P 500”).†
Average Annual Total Return
For The Period Ended April 30, 2002**

1 Year
(19.99)%
    
Start of Performance (1/18/01)
(22.94)%

 
Growth of $10,000 Invested in VISION Large Cap Core Fund—Class B Shares

 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund. The ending value of the Fund reflects a maximum 5.00% contingent deferred sales charge on any redemption less than 2 year from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 500 has been adjusted to reflect reinvestment of dividends on securities in the index.
**
Total returns quoted reflect all applicable sales charges.
The S&P 500 is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The index is unmanaged.

15


VISION
Large Cap Value Fund
 
 
VISION Large Cap Value Fund’s Class A shares returned (11.99)% based on net asset value or (16.86)% adjusted for the Fund’s sales charge and the Fund’s Class B shares returned (12.88)% based on net asset value, or (17.17)% adjusted for the Fund’s contingent deferred sales charge, for the twelve months ended April 30, 2002. The (11.99)% total return based on the net asset value compares with a (14.85)% total return for the S&P/Barra Value Index1, a commonly referenced unmanaged index of large capitalization, value-oriented stocks. During this same period the Lipper Large Cap Value Fund Average2 returned (7.82)%.
 
Our equity approach is based on consistency and discipline. We apply a disciplined, yet opportunistic methodology focused on identifying companies with growth characteristics selling at attractive valuations. Our investment process is grounded in three dimensions. We utilize a top down thematic perspective and bottom-up intensive security analysis, with both approaches centered and balanced by risk control measures.
 
Top-Down: Thematic
 
Our thematic dimension incorporates our top-down assessment of how we should be positioned to take advantage of secular trends or patterns developing in the U.S. economy. We identified five major themes that should prove important for the 2002-2003 time frame:
 
1.
Demographics — The graying of America affects consumption patterns. We identify companies that capture increasing demand for pharmaceuticals while minimizing drug specific risk. Specific stocks include Caremark RX and IMS Health. As the U.S. population ages, investing replaces consumption. This favors asset gatherers, annuity writers, and custodians such as Merrill Lynch, Hartford Financial and Bank of New York.
 
2.
Supply/Demand Imbalances — Cyclical industry conditions can create significant supply/demand imbalances. For example, demand outstrips supply in the U.S. hospital or health provider system. Demand for tertiary care in fast-growing markets is increasing while the supply of hospital beds is declining. Health Management Associates and Tenet Healthcare are examples of this theme.

The graph below illustrates the hypothetical investment of $10,000* in VISION Large Cap Value Fund (Class A Shares) (the “Fund”) from September 26, 1997 (start of performance) to April 30, 2002, compared to the Standard & Poor’s 500/Barra Value Index (S&P 500/BV).†
 
Average Annual Total Return For The Period Ended April 30, 2002**

1 Year
 
Start of Performance (9/26/97)
(16.86)%
 
2.10%

 
Growth of $10,000 Invested in VISION Large Cap Value Fund — Class A Shares
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charge = $9,450). The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 500/BV has been adjusted to reflect reinvestment of dividends on securities in the indexes.
**
Total returns quoted reflect all applicable sales charges.
The S&P 500/BV is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The index is unmanaged.

(continued on next page)

16


 
3.
The Information Age — Accelerated pace of change intensifies the battleground between innovators and incumbents. We invest in industry leaders who demonstrate their commitment to enhance their competitive advantage. We also invest with innovators and disrupters who will be tomorrow’s leaders. Additionally, many information age companies have significant intangible assets. Intangible assets can be key drivers of equity valuations, but require special qualitative analysis.
 
 
There are a number of sub-themes within the Information Age theme. The first is that power supply regulation becomes more important as product complexity increases. International Rectifier addresses this need. Second, we identify companies who establish and control the standards setting process. For mobility and wireless standards we have invested in Texas Instruments and Intersil. Third, we seek to participate in innovation while minimizing our exposure to specific technologies. Agilent Technologies reflects this concept. A fourth sub-theme is that powerful two-way broadband networks plus a benign regulatory environment brighten cable’s future. Comcast and Cox Communications represent our cable choices. Fifth, video-on-demand will drive a new round of set-top box sales and Scientific Atlanta is our selection. Our last Information Age sub-theme is convergence of content, delivery, and multiple services favors media companies with powerful brands. Here, our holdings include Viacom and Walt  Disney.
 
4.
Industry Consolidation — Profit pressures and competitive forces will drive consolidation in the energy, financial services, and utility sectors. Also, increasing scale improves efficiency and returns. Some European financial conglomerates have excess capital and are seeking U.S. distribution. Jefferson Pilot is a fund holding that should benefit from this trend. A number of the multinational integrated oil companies have been acquiring North American reserves; Burlington Resources and Marathon Oil could appeal to acquirers.
 
5.
The Global Market Place — Open markets and new groups of global consumers provide growth opportunities, especially for companies that possess economies of scale and/or scope in their industry. Citigroup, Kimberly-Clark, Morgan Stanley, and Capital One Financial are a few of our holdings extending their market power internationally.
 
6.
Security Takes Center Stage — Complex global dynamics have replaced the predictability of the

The graph below illustrates the hypothetical investment of $10,000* in VISION Large Cap Value Fund (Class B Shares) (the “Fund”) from December 10, 1999 (start of performance) to April 30, 2002, compared to the Standard & Poor’s 500/Barra Value Index (S&P 500/BV).†
 
Average Annual Total Return For The Period Ended April 30, 2002**

1 Year
(17.17)%
 
Start of Performance (12/10/99)
(1.86)%

 
Growth of $10,000 Invested in VISION Large Cap Value Fund — Class B Shares
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund. The ending value reflects a maximum 3.00% contingent deferred sales charge on any redemption less than 3 years from the purchase date. The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 500/BV has been adjusted to reflect reinvestment of dividends on securities in the index.
**
Total returns quoted reflect all applicable sales charges and contingent deferred sales charges.
The S&P 500/BV is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The index is unmanaged.

(continued on next page)

17


 
Cold War and the investment mainstream’s complacency regarding security has been shattered. Real increases in the defense budget have accelerated, favoring especially defense electronics powerhouse Raytheon. Both public facilities and services security infrastructure are getting a massive overhaul, which benefits Symbol Technologies and Tyco  International. Additionally, the value of North American sources of energy and power has increased, favoring El Paso Energy.
 
Bottom-Up: Intensive Security Analysis — GARP
We emphasize stocks with growth prospects that on average are greater than the earnings growth rate of our Value benchmark. This follows from our conviction that future stock prices will largely be determined by future earnings growth. However, we want to pay a low multiple for that growth. Our average forward P/E’s or price earnings ratios are lower than the average P/E multiple of the S&P Barra Value index. A favorable P/E to growth ratio (PEG ratio) is our primary metric of GARP or Growth-At-a-Reasonable Price.
 
Risk control
 
We utilize stringent risk control measures to minimize expected tracking error or expected variance from our benchmark — the value side of the S&P 500. As a result of our risk control process, we invest in many industry leaders such as AIG, Exxon-Mobil, Chevron-Texaco, SBC Communications, Verizon Communications,  Bellsouth, and Wells Fargo.
 
1
The S&P 500/Barra Value Index is a market capitalization-weighted index of the stocks in the S&P 500 Index having the lowest price to book ratios. The index consists of approximately half of the S&P 500 on a market capitalization basis. This index is unmanaged and investments cannot be made in an index.
2
Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Analytical  Services, Inc. as falling into the respective categories indicated. These figures do not reflect sales charges.
 

18


VISION
Managed Allocation Funds
 
 
The past year threw one challenge after another at the financial markets. These challenges started with a slowing economy and the collapse first of Technology stocks and then other broad market sectors, such as Telecommunications during the spring and summer of 2001. On the heels of this negative pressure came the terrorist attacks of September 11 that left the economy further shaken and the markets roiled. As the calendar prepared to turn over a new year, investors were greeted with the unsettling news of Enron’s collapse and the subsequent waning confidence in the veracity of corporate financial statements.
 
In the face of all these unpleasant developments the three VISION Managed Allocation Funds were able to scratch out returns ranging from the negative single digits in the most aggressive mix to the low positive single digits in the most conservative mix. This track record during difficult times reaffirms our belief in the tried and true, disciplined and diversified approach of asset allocation. We think it also bodes well for investors once the financial markets find their footing and the nascent economic recovery develops some traction.
 
The Aggressive Growth Fund took the most volatile path to its (5.92)% total return (net asset value basis) or (10.62)% adjusted for the Fund’s sales charge for the year ended April 30, 2002. After a sluggish and slightly negative start last summer, the Fund lost over 12% of it’s value after September 11, only to recover close to 10% of that drop by December 31, 2001. A slight drop of around 1% for the year-to-date period ended April 30, 2002 capped off the Fund’s year. Central to the Aggressive Growth Fund’s ability to mitigate its losses over this most recent and very challenging annual measurement period was its exposure to small cap stocks1 on the equity side of the mix as well as its fixed income holdings. The small cap portion of the Fund posted returns of over 8% (net asset value basis) for the annual period while the fixed income component helped the fund weather the stormy markets in the fall of 2001.            
 
The Moderate Growth Fund largely tracked the same path as its more aggressive sister fund but, as one would expect, did so in a more muted fashion. The Fund’s overall (2.39)% total return (net asset value basis) or (6.81)% adjusted for the Fund’s sales charge, for the year

The graph below illustrates the hypothetical investment of $10,000* in VISION Managed Allocation Fund —Aggressive Growth, Class A Shares (the “Fund”) from February 18, 1999 (start of performance) to April 30, 2002, compared to the Standard and Poor’s 500 Index (“S&P 500”) and the Lehman Brothers Aggregate Bond Index (“LBABI”)**.
 
Average Annual Total Return for the Period Ended April 30, 2002***

1 Year
 
Start of Performance (2/18/99)
(10.62%)
 
(1.12%)

 
Growth of $10,000 Invested in VISION Managed Allocation Fund — Aggressive Growth†
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares. Your investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge — $9,550). Effective  January 8, 2001, the maximum sales charge increased to 5.00%. The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 500 and LBABI have been adjusted to reflect reinvestment of dividends on securities in the indices.
**
The S&P 500 and LBABI are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The indices are unmanaged.
***
Total returns quoted reflect all applicable sales charges.
VISION Managed Allocation Fund — Aggressive Growth is the successor to Governor Lifestyle Growth Fund pursuant to a reorganization that took place on January 8, 2001. The information presented above, for the periods prior to  January 8, 2001, is historical information for Governor  Lifestyle Growth Fund.

(continued on next page)

19


ended April 30, 2002, owes to a weak start in the summer months of 2001, a drop of only around 7% in the quarter ended September 30, 2001, and a fairly strong recovery during the final six months of the fiscal year. The two biggest boosts to returns in the Moderate Growth Fund were its exposure to domestic small cap1 equities and its healthy exposure to the fixed income markets.
 
The Conservative Growth Fund took the slow and steady route to its annual total return of 1.60% (net asset value basis) or (2.45)% adjusted for the Fund’s sales charge, for the year ended April 30, 2002. The Fund’s hefty fixed income exposure helped it avoid deep losses during the quarter ended September 30, 2001. During that quarter the Fund only lost a little over 1% of its value. However, the Fund’s small but still significant exposure to the equity markets and it’s incorporation of small cap1 equities in particular allowed it to participate in the stock market recovery that began to take shape in late 2001 into early 2002. Consequently, the Conservative Growth Fund enjoyed a relatively smooth ride during the most recent annual investment cycle.
 
1
Small company stocks may be less liquid and subject to greater price volatility than large capitalization stocks.

The graph below illustrates the hypothetical investment of $10,000* in VISION Managed Allocation Fund —Moderate Growth, Class A Shares (the “Fund”) from February 4, 1999 (start of performance) to April 30, 2002, compared to the Standard and Poor’s 500 Index (“S&P 500”) and the Lehman Brothers Aggregate Bond Index (“LBABI”).**
Average Annual Total Return For The Period Ended April 30, 2002***

1 Year
(6.81)%
 
Start of Performance (2/4/99)
0.68%



 
Growth of $10,000 Invested in VISION Managed Allocation Fund — Moderate Growth†
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares. Your investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 500 and LBABI have been adjusted to reflect reinvestment of dividends on securities in the indices.
**
The S&P 500 and LBABI are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The indices are unmanaged.
***
Total returns quoted reflect all applicable sales charges.
VISION Managed Allocation Fund — Moderate Growth is the successor to Governor Lifestyle Moderate Growth Fund pursuant to a reorganization that took place on January 8, 2001. The information presented above, for the periods prior to January 8, 2001, is historical information for Governor Lifestyle Moderate Growth Fund.

(continued on next page)

20


 

 
The graph below illustrates the hypothetical investment of $10,000* in VISION Managed Allocation Fund — Conservative Growth, Class A Shares (the “Fund”) from February 3, 1999 (start of performance) to April 30, 2002, compared to the Standard and Poor’s 500 Index (“S&P 500”) and the Lehman Brothers Aggregate Bond Index (“LBABI”).**
 
Average Annual Total Return For The Period Ended April 30, 2002***
 

1 Year
 
Start of Performance (2/3/99)
(2.45)%
 
1.69%

 
Growth of $10,000 Invested in VISION Managed Allocation Fund — Conservative Growth†
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares. Your investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). Effective April 1, 2001 the maximum sales charge decreased to 4.00%. The Fund’s performance assumes the reinvestment of all dividends and distributions. The S&P 500 and LBABI have been adjusted to reflect reinvestment of dividends on securities in the indices.
**
The S&P 500 and LBABI are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The indices are unmanaged.
***
Total returns quoted reflect all applicable sales charges.
VISION Managed Allocation Fund — Conservative Growth is the successor to Governor Lifestyle Conservative Growth Fund pursuant to a reorganization that took place on January 8, 2001. The information presented above, for the periods prior to January 8, 2001, is historical information for Governor Lifestyle Conservative Growth Fund.

21


VISION
New York Municipal Income Fund
 
 
The last year has been up and down for the municipal bond market. Yields on ten-year municipal bonds declined modestly from 4.43% on April 30, 2001 to 4.18% on April 30, 2002 and declined from 5.32% to 5.19% for 30-year municipal bonds. However yields reached a low of 3.80% for the ten-year bond and 4.92% for the 30-year bond during November 2001. This was due to the economic fallout of the events of September 11 and the Treasury announcing the end of new issue of 30-year Treasury bonds. Over the last six months municipals have slightly outperformed the Treasury and other taxable fixed income markets. However over the last 12 months, municipals have generally underperformed the Treasury and other taxable markets.
 
VISION New York Municipal Income Fund posted a positive total return of 0.62% on a net asset value basis over the six months ended April 30, 2002 or (3.93%) adjusted for the Fund’s sales charge. The Lipper New York Municipal Debt Funds Index1 return for the same period was 0.77%. For the 12-month period ended April 30, 2002, the VISION New York Municipal Income Fund returned 5.74%, or 1.01% adjusted for the Fund’s sales charge, versus the Lipper return of 6.01%.
 
The Fund continues to emphasize high quality New York municipals while keeping the average maturity of the portfolio short to its benchmark. Over the last year the municipal yield curve has steepened, with short-term rates falling more than long-term rates over this time period. We expect the municipal bond market to perform in line with the taxable bond markets over the coming months, as supply remains fairly high and demand continues to be strong.
 
1
Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Analytical Services, Inc. as falling into the respective categories indicated. These figures do not reflect sales charges.

The graph below illustrates the hypothetical investment of $10,000* in VISION New York Municipal Income Fund (the “Fund”) from September 22, 1993 (start of performance) to April 30, 2002, compared to the Lehman Brothers State General Obligation Bond Index (LBSGO) and the Lehman Brothers New York Tax-Exempt Index (LBNYTE).**
 
Average Annual Total Return For The Period Ended April 30, 2002***

1 Year
 
5 Years
 
Start of Performance (9/22/93)
1.01%
 
4.52%
 
4.73%

Growth of $10,000 Invested in VISION New York Municipal Income Fund
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). The Fund’s performance assumes the reinvestment of all dividends and distributions. The LBSGO and the LBNYTE have been adjusted to reflect reinvestment of dividends on securities in the indexes.
**
The LBSGO and the LBNYTE are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The indexes are unmanaged.
***
Total returns quoted reflect all applicable sales charges.

22


VISION
Pennsylvania Municipal Income Fund
 
 
The weak economic climate and the Federal Reserve Board’s aggressive rate cutting campaign created a positive environment for debt securities over the past year. Municipal bond yields followed Treasury yields lower over the twelve-month period ended April 30, 2002. Short maturity municipal yields declined the most, as evidenced by the one year “A” rated yield, which fell from 3.7% on April 30, 2001, to 2.2% on April 30, 2002.
 
The Pennsylvania economy, after showing steady growth during the 1990s, slowed with the national recession in the last year. Unemployment levels now more closely approximate the national average at 5.9%. However, conservative budgeting and a build-up of reserves over the economic expansionary years has produced very successful financial operations, allowing the state to retain its solid “AA” rating by S&P. (Moody’s “Aa2”; Fitch “AA”).
 
Municipal yields appear fairly valued relative to Treasurys and now stand at the middle of the range held over the past few years, but slightly above their long-term average. A steep yield curve and high cash levels continue to support an allocation to municipal bonds. New issuance of Pennsylvania municipal bonds has fallen sharply from its peak in January, which will provide further support to bond prices.
 
VISION Pennsylvania Municipal Income Fund posted a positive return of 5.80% on a net asset value basis over the last year ended April 30, 2002, or 1.06% adjusted for the Fund’s sales charge. The Lipper Pennsylvania Municipal Debt Fund Index1 return for the same period was 6.12%.
 
VISION Pennsylvania Municipal Income Fund currently has a duration2 strategy slightly below the benchmark duration. This strategy reflects our anticipation of an economic recovery continuing to develop over the next six months. Maturity preference on the yield curve currently favors the intermediate sector over the very short end of the curve.
 
1
Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Analytical  Services, Inc. as falling into the respective categories indicated. These figures do not reflect sales charges.
2
Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations.

 
The graph below illustrates the hypothetical investment of $10,000* in VISION Pennsylvania Municipal Income Fund (the “Fund”) from October 1, 1996 (start of performance) to April 30, 2002, compared to the Lehman Brothers Pennsylvania 1-12 Year Municipal Bond Index (LBP1-12MB) and the Lehman Brothers State General Obligation Bond Index (LBSGO).**
 
Average Annual Total Return For The Period Ended April 30, 2002***

1 Year
  
5 Years
  
Start of Performance (10/1/96)
1.06%
  
3.79%
  
3.81%

Growth of $10,000 Invested in VISION Pennsylvania Municipal Income Fund†
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). The Fund’s performance assumes the reinvestment of all dividends and distributions. The LBP1-12MB and the LBSGO have been adjusted to reflect reinvestment of dividends on securities in the indexes.
**
The LBP1-12MB and the LBSGO are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The indexes are unmanaged.
***
Total returns quoted reflect all applicable sales charges.
VISION Pennsylvania Municipal Income Fund is the successor to Governor Pennsylvania Municipal Bond Fund pursuant to a reorganization that took place on January 8, 2001. The information presented above, for the periods prior to January 8, 2001 is historical information for Governor Pennsylvania Municipal Bond Fund.

23


VISION
Intermediate Term Bond Fund
 
The past year (May 1, 2001April 30, 2002) was highlighted by a weakening U.S. economy, a renewed awareness of terrorism, negative corporate earnings announcements, and declining interest rates. Beginning in early 2001, the Federal Reserve Board (Fed) moved aggressively to stimulate the economy, reducing the federal funds rate 11 times in calendar year 2001. The rate now stands at 1.75%, the lowest level in 40 years, with the Fed shifting to a neutral policy stance in recent months.
 
The weak economic climate and the Fed’s aggressive rate cutting campaign created a positive environment for debt securities. Treasury yields on the short end of the yield curve saw the greatest decline as the overall curve steepened dramatically. The Lehman Brothers Aggregate Bond Index1 posted a return of 7.84% for the twelve-month period ended April 30, 2002. That represented a performance gap of almost 20% between the bond index and the S&P 500 stock index.2 (S&P 500 –12.62% return over same period)
 
Recent economic data has turned from uniformly negative, to mixed. We do expect the economy to rebound as the year progresses. The economic recovery is on track but the Fed is in no hurry to raise interest rates, particularly in the absence of inflationary data. The Fed will more than likely shift to a restrictive policy later in 2002.
 
VISION Intermediate Term Bond Fund returned 6.34% on a net asset value basis over the one year period ended April 30, 2002, or 1.51% adjusted for the Fund’s sales charge. The Lipper Intermediate Investment Grade Debt Funds Index3 return for the same period was 6.52%.
 
VISION Intermediate Term Bond Fund currently maintains a slightly below benchmark duration.4 This duration strategy reflects our view that the macro environment remains unfriendly for Treasury securities. Bond yields are likely to drift higher rather than spike, but the key point is that the direction will be up, not down. Our sector preference favors corporates and mortgage-backed securities, which we believe will outperform Treasuries and agencies in an economic recovery and rising interest rate environment.
 
1
The Lehman Brothers Aggregate Bond Index is an unmanaged index composed of securities from the Lehman Brothers Government/Corporate Bond Index, Mortgage-Backed Securities Index, and the Asset-Backed Securities Index. Total return comprises price appreciation/depreciation and income as a percentage of the original investment. Indices are rebalanced monthly by market capitalization. Investments cannot be made in an index.
2
The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Investments cannot be made in an index.
3
Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Analytical  Services, Inc. as falling into the respective categories indicated. These figures do not reflect sales charges.
4
Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations.

The graph below illustrates the hypothetical investment of $10,000* in VISION Intermediate Term Bond Fund (the “Fund”) from December 2, 1996 (start of performance) to April 30, 2002, compared to the Lipper Intermediate Investment Grade Debt Funds Average (“LIIGDFA”) and the Lehman Brothers Aggregate Bond Index (“LBABI”).**
 
Average Annual Total Return for the Period Ended April 30, 2002***

1 Year
1.51%
 
5 Years
5.10%
 
Start of Performance (12/02/96)
4.65%





Growth of $10,000 Invested in VISION Intermediate Term Bond Fund†
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than original cost. Mutual funds are not obligations of our guaranteed by any bank and are not federally insured.
 
*
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). The Fund’s performance assumes the reinvestment of all dividends and distributions. The LIIGDFA and LBABI have been adjusted to reflect reinvestment of dividends on securities in the indices.
**
The LIIGDFA and LBABI are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The indices are unmanaged.
***
Total returns quoted reflect all applicable sales charges.
VISION Intermediate Term Bond Fund is the successor to Governor Intermediate Term Income Fund pursuant to a reorganization that took place on January 8, 2001. The information presented above, for the periods prior to January 8, 2001, is historical information for Governor Intermediate Term Income Fund.
 

24


VISION
U.S. Government Securities Fund
 
The year has been a constructive period for the taxable bond market. Since our last report, yields on the 10-year Treasury note have declined from 5.34% on April 30, 2001 to 5.09% on April 30, 2002. The most noticeable trend in the market has been the steepening of the yield curve. Yields on very short maturities dropped by more than 200 basis points during the year as compared to the 25 basis points decrease in 10-year yields.
 
Over the past year the economy has been in a slow growth mode. The unemployment rate rose from 4.50% in April 2001 to 6.00% in April 2002. In addition, Gross Domestic Product was at only 0.3% during the second quarter of 2001 and actually declining to a (1.3)% during the third quarter of 2001 before rebounding to a very strong 5.8% in the first quarter of 2002. One bright spot has been the subdued inflation numbers. The Consumer Price Index declined to a 1.5% annual rate in March 2002 from an annualized rate of 3.3% in April 2001.
 
The Federal Reserve Board (Fed) has responded to the economic weakness by lowering the federal funds target rate by 175 basis points, from 3.50% to 1.75% by December and holding at that level through April. Most of the interest rate cuts were in response to the economic weakness brought on by the events of September 11. The Fed has since moved to a neutral bias in March 2002, indicating that they do not foresee any continuing weakness in the economy.
 
VISION U.S. Government Securities Fund posted a total return of (0.06)% on a net asset value basis for the 6-month period ending April 30, 2002 or (4.55)% adjusted for the Fund’s sales charge. The Lipper General U.S. Government Fund Index1 return for the same period was (1.22)%. For the 12-month period ended April 30, 2002, VISION U.S. Government Securities Fund returned 6.72% on a net asset value basis (1.97% adjusted for the Fund’s sales charge) versus the Lipper return of 6.98%.
 
VISION U.S. Government Securities Fund continues to emphasize government-guaranteed securities with yield advantages to U.S. Treasury securities. Within the mortgage-backed securities sector, we continue to favor very seasoned, low loan balance mortgages. These mortgages possess lower refinancing risks relative to newer production mortgages. The duration2 of the Fund has been shortened to about a half of a year shorter than the Lehman Brothers Aggregate Bond Index3 for the period ended April 30, 2002.
 
1
Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Analytical  Services, Inc. as falling into the respective categories indicated. These figures do not reflect sales charges.
2
Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations.
3
The Lehman Brothers Aggregate Bond Index is an unmanaged index composed of securities from the Lehman Brothers Government/Corporate Bond Index, Mortgage-Backed Securities Index, and the Asset-Backed Securities Index. Total return comprises price appreciation/depreciation and income as a percentage of the original investment. Indices are rebalanced monthly by market capitalization. Investments cannot be made in an index.

 
The graph below illustrates the hypothetical investment of $10,000* in VISION U.S. Government Securities Fund (the “Fund”) from September 22, 1993 (start of performance) to April 30, 2002, compared to the Lehman Brothers Aggregate Bond Index (“LBABI”).**
 
Average Annual Total Return for the Period Ended April 30, 2002***

1 Year
1.97%
  
5 Years
5.95%
  
Start of Performance (9/22/93)
5.09%

 
Growth of $10,000 Invested in VISION U.S. Government Securities Fund
 
 
Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares. Your investment return and principal value will fluctuate so when shares are redeemed, they may be worth more or less than their original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.
 
*   
Represents a hypothetical investment of $10,000 in the Fund after deducting the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). The Fund’s performance assumes the reinvestment of all dividends and distributions. The LBABI has been adjusted to reflect reinvestment of dividends on securities in the index.
**  
The LBABI is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. This index is unmanaged.
*** 
Total returns quoted reflect all applicable sales charges.
 

25


VISION International Equity Fund
Portfolio of Investments
April 30, 2002

Shares
     
Value in U.S. Dollars

 
 
Common Stocks—92.7%
   
   
Australia—2.5%
   
56,648
 
Lion Nathan Ltd.
 
$       146,125
83,399
 
Mayne Nickless Ltd.
 
164,933
44,546
 
QBE Insurance Group Ltd.
 
174,996
6,400
 
Rio Tinto PLC
 
124,161
58,807
 
Westpac Banking Corp., Ltd.
 
513,231
       
   
Total Australia
 
1,123,446
       
   
Belgium—0.6%
   
12,589
 
Fortis AG
 
288,835
       
   
Denmark—1.1%
   
12,700
 
Danske Bank AS
 
229,147
8,677
 
Novo Nordisk, Class B
 
254,279
       
   
Total Denmark
 
483,426
       
   
Finland—2.8%
   
35,000
 
Nokia Oyj
 
566,023
20,900
 
Sampo Oyj, Class A
 
161,094
15,900
 
UPM—Kymmene Oyj
 
555,506
       
   
Total Finland
 
1,282,623
       
   
France—10.5%
   
15,534
 
AXA
 
329,408
8,484
 
Alcatel
 
106,035
11,230
 
Aventis SA
 
797,335
9,183
 
BNP Paribas SA
 
479,592
3,714
 
Cap Gemini SA
 
216,541
2,340
 
Compagnie de St. Gobain
 
400,340
3,840
 
France Telecommunications
 
93,220
24,764
 
(1)Gemplus International SA
 
36,793
2,250
 
L’Air Liquide
 
348,069
7,013
 
Societe Generale
 
479,929
3,660
 
Suez Lyonnaise des Eaux SA
 
108,921
8,275
 
Total Fina SA, Class B
 
1,253,296
3,051
 
Unibail (Union du Credit-Bail Immobilier)
 
179,260
       
   
Total France
 
4,828,739
       
   
Germany—3.7%
   
1,452
 
Allianz AG Holdings
 
341,834
4,097
 
Altana AG
 
231,568
12,050
 
Bayer AG
 
394,630
7,850
 
Deutsche Telekom AG, Class REG
 
104,190
2,300
 
E.ON AG
 
119,727
2,039
 
Muenchener Rueckversicherungs-Gesellschaft AG
 
504,923
       
   
Total Germany
 
1,696,872
       
   
Hong Kong—1.0%
   
49,000
 
Esprit Holdings Ltd.
 
94,242
42,500
 
Hong Kong Electric Holdings Ltd.
 
161,302
22,000
 
Sun Hung Kai Properties Ltd.
 
191,818
       
   
Total Hong Kong
 
447,362
       
   
Ireland—1.6%
   
16,200
 
Bank of Ireland
 
188,176
Shares
     
Value in U.S. Dollars

 
 
Common Stocks—continued
   
   
Ireland—continued
   
21,001
 
CRH PLC
 
$     359,297
85,000
 
Jefferson Smurfit Group PLC
 
205,526
       
   
Total Ireland
 
752,999
       
   
Italy—3.8%
   
18,831
 
Assicurazioni Generali SPA
 
454,770
57,415
 
ENI SPA
 
881,474
37,187
 
Sanpaolo IMI SPA
 
414,210
       
   
Total Italy
 
1,750,454
       
   
Japan—16.4%
   
5,950
 
Aiful Corp.
 
412,709
14,100
 
Benesse Corp.
 
311,736
10,000
 
Canon, Inc.
 
383,013
10,000
 
Daikin Industries Ltd.
 
181,386
400
 
Fast Retailing Co., Ltd.
 
10,650
14,000
 
Fuji Photo Film Co., Ltd.
 
444,669
2,400
 
Hoya Corp.
 
178,615
60
 
KDDI Corp.
 
156,942
9,000
 
Kao Corp.
 
175,859
7,000
 
Matsushita Electric Industrial Co., Ltd.
 
93,729
35,000
 
Minebea Co.
 
228,874
30,000
 
Mitsubishi Corp.
 
224,904
28,000
 
Mitsubishi Estate Co., Ltd.
 
202,717
35,000
 
Mitsui Mining & Smelting Co.
 
129,695
4,400
 
Murata Manufacturing Co., Ltd.
 
278,479
1,600
 
Nintendo Corp., Ltd.
 
224,203
7,000
 
Ono Pharmaceutical Co., Ltd.
 
228,874
4,000
 
ORIX Corp.
 
331,634
1,800
 
Rohm Co., Ltd.
 
268,343
11,000
 
Sekisui House Ltd.
 
75,614
8,400
 
Sony Corp.
 
451,209
40,000
 
Sumitomo Chemical Co., Ltd.
 
169,086
10,000
 
Takeda Chemical Industries Ltd.
 
437,507
4,200
 
Takefuji Corp.
 
303,421
29,900
 
Toyota Motor Corp.
 
814,682
102
 
West Japan Railway Co.
 
394,644
69,200
 
Yasuda Fire & Marine Insurance Co.
 
385,178
       
   
Total Japan
 
7,498,372
       
   
Netherlands—7.0%
   
19,989
 
ABN AMRO Holdings NV
 
395,980
18,892
 
Ahold NV
 
472,063
4,900
 
Akzo Nobel NV
 
210,506
59,242
 
Elsevier NV
 
821,504
7,200
 
ING Groep NV
 
189,959
11,980
 
Koninklijke (Royal) Philips Electronics NV
 
369,684
10,813
 
VNU—Verenigde Nederlandse Uitgeversbedrijven
 
326,171
11,000
 
Vedior NV
 
152,239
13,673
 
Wolters Kluwer NV
 
277,017
       
   
Total Netherlands
 
3,215,123
       

26


VISION International Equity Fund

Shares
     
Value in
U.S. Dollars

 
 
Common Stocks—continued
   
   
Norway—0.5%
   
57,900
 
Telenor ASA
 
$     228,707
       
   
Portugal—0.9%
   
170,851
 
Electricidade de Portugal SA
 
352,300
10,852
 
Portugal Telecom SGPS SA
 
79,151
       
   
Total Portugal
 
431,451
       
   
Singapore—1.5%
   
41,000
 
DBS Group Holdings Ltd.
 
316,698
151,000
 
Neptune Orient Lines Ltd.
 
93,310
220,000
 
Singapore Technologies Engineering Ltd.
 
254,903
       
   
Total Singapore
 
664,911
       
   
Spain—2.1%
   
74,729
 
Banco Santander Central Hispano, SA
 
691,738
25,655
 
Telefonica SA
 
274,440
       
   
Total Spain
 
966,178
       
   
Sweden—3.1%
   
8,400
 
Sandvik AB
 
194,286
12,870
 
Svenska Cellulosa AB, Class B
 
436,504
24,690
 
Svenska Handelsbanken AB, Class A
 
373,109
54,720
 
Swedish Match AB
 
430,741
       
   
Total Sweden
 
1,434,640
       
   
Switzerland—6.6%
   
8,945
 
Compagnie Financiere Richemont AG
 
202,713
783
 
Givaudan SA
 
291,636
3,226
 
Nestle SA
 
761,914
21,287
 
Novartis AG
 
891,963
7,700
 
Roche Holding AG
 
582,848
2,860
 
Swiss Re
 
288,354
       
   
Total Switzerland
 
    3,019,428
       
   
United Kingdom—27.0%
   
21,288
 
Abbey National Bank PLC, London
 
338,298
51,688
 
Allied Domecq PLC
 
330,894
13,000
 
BAA PLC
 
122,136
86,722
 
BP PLC
 
739,600
106,153
 
BT Group PLC
 
398,926
86,596
 
Barclays PLC
 
758,076
28,750
 
Brambles Industries PLC
 
142,383
60,641
 
Carlton Communications PLC
 
218,616
32,000
 
Charter PLC
 
90,892
 
Shares
     
Value in
U.S. Dollars

 
 
Common Stocks—continued
   
   
United Kingdom—continued
   
23,532
 
Compass Group PLC
 
$     146,362
96,582
 
(1)Dimension Data Holdings PLC
 
85,464
4,767
 
EMAP PLC
 
57,042
37,985
 
Electrocomponents PLC
 
240,681
3,537
 
Exel PLC
 
45,337
78,638
 
Gallaher Group PLC
 
681,538
37,859
 
GlaxoSmithKline PLC
 
915,414
39,501
 
HSBC Holdings PLC
 
466,051
115,000
 
Invensys PLC
 
180,072
46,850
 
Kingfisher PLC
 
261,707
23,927
 
Lloyds TSB Group PLC
 
274,983
33,413
 
Matalan PLC
 
170,708
58,525
 
National Grid Co., PLC
 
419,418
33,564
 
Prudential PLC
 
356,892
24,000
 
Reckitt Benckiser PLC
 
424,745
65,472
 
Rentokil Initial PLC
 
257,967
124,193
 
Rolls-Royce PLC
 
343,709
27,321
 
Royal Bank of Scotland PLC
 
783,181
78,576
 
Safeway PLC
 
347,940
39,519
 
Scottish & Southern Energy PLC
 
388,553
32,602
 
Scottish Power PLC
 
187,578
164,857
 
Shell Transport & Trading Co., PLC
 
1,173,039
25,991
 
Stagecoach Group PLC
 
28,772
620,573
 
Vodafone Group PLC
 
1,001,099
       
   
Total United Kingdom
 
12,378,073
       
   
Total Common Stocks
(identified cost $40,594,622)
 
42,491,639
       
   
Preferred Stocks—0.9%
   
   
Australia—0.9%
   
5,600
 
National Australia Bank, Pfd.
 
188,300
39,411
 
News Corp. Ltd., Pfd.
 
217,302
       
   
Total Preferred stocks
(identified cost $403,948)
 
405,602
       
   
Mutual Fund—2.5%
   
1,138,671
 
Seven Seas Money Market Fund
(at net asset value)
 
1,138,671
       
   
Total Investments
(identified cost $42,137,241)
 
$44,035,912
       
 

(See Notes to Portfolios of Investments)

27


VISION Small Cap Stock Fund
Portfolio of Investments
April 30, 2002

Shares
     
Value

 
 
Common Stocks—96.9%
   
   
Aerospace/Defense Equipment—1.1%
11,000
 
(1)FLIR Systems, Inc. 
 
    $     438,647
51,500
 
GenCorp, Inc. 
 
808,550
       
   
Total
 
1,247,197
       
   
Autos—2.1%
   
24,300
 
(1)American Axle & Manufacturing Holdings, Inc. 
 
801,900
29,000
 
ArvinMeritor, Inc. 
 
919,300
12,100
 
BorgWarner, Inc. 
 
756,008
       
   
Total
 
2,477,208
       
   
Banking—9.1%
22,700
 
BSB Bancorp, Inc.
 
679,411
80,100
 
BankAtlantic Bancorp, Inc., Class A
 
1,021,275
52,400
 
Colonial BancGroup, Inc.
 
838,400
5,000
 
Corus Bankshares, Inc.
 
251,295
4,500
 
First Citizens Bancshares, Inc., Class A
 
491,400
19,400
 
First Essex Bancorp, Inc.
 
643,886
25,500
 
Flagstar Bancorp, Inc.
 
754,800
65,400
 
Gold Banc Corp., Inc.
 
654,000
9,500
 
Hudson River Bancorp, Inc.
 
231,506
35,600
 
Independence Community Bank Corp.
 
1,160,204
19,100
 
Independent Bank Corp.—Michigan
 
596,302
10,700
 
Provident Bankshares Corp. 
 
278,842
51,920
 
Republic Bancorp, Inc. 
 
768,416
9,700
 
(1)Southwest Bancorporation of Texas, Inc. 
 
339,791
47,200
 
Staten Island Bancorp, Inc. 
 
941,640
25,000
 
United Bankshares, Inc. 
 
800,000
       
   
Total
 
  10,451,168
       
   
Business Services—3.7%
   
23,800
 
Banta Corp.
 
894,880
31,200
 
(1)DoubleClick, Inc.
 
242,112
13,600
 
(1)EMCOR Group, Inc.
 
827,560
80,500
 
(1)Labor Ready, Inc.
 
724,500
17,400
 
New England Business Service, Inc.
 
487,200
13,000
 
Unifirst Corp.
 
353,080
34,200
 
Wallace Computer Services, Inc.
 
743,850
       
   
Total
 
4,273,182
       
   
Capital Goods—1.7%
   
34,300
 
(1)Griffon Corp.
 
658,560
15,600
 
Kennametal, Inc.
 
618,696
5,200
 
(1)Wireless Facilities, Inc.
 
23,504
18,700
 
York International Corp.
 
680,867
       
   
Total
 
1,981,627
       
   
Coal Exploration & Mining—0.3%
   
15,300
 
Arch Coal, Inc.
 
339,660
       
   
Computers—0.5%
   
4,100
 
(1)Avid Technology, Inc.
 
42,189
54,100
 
(1)Gerber Scientific, Inc.
 
243,450
116,800
 
(1)Immersion Corp.
 
275,648
       
   
Total
 
561,287
       
Shares
       
Value

  
  
Common Stocks—continued
    
    
Computers-Hardware—1.0%
    
53,400
  
(1)Hutchinson Technology, Inc. 
  
$     956,394
33,600
  
(1)Riverstone Networks, Inc. 
  
157,920
         
    
Total
  
1,114,314
         
    
Computers-Networks—0.2%
    
4,700
  
(1)F5 Networks, Inc.
  
61,194
30,200
  
(1)Foundry Networks, Inc.
  
171,838
         
    
Total
  
233,032
         
    
Computers-Services—8.0%
    
83,000
  
(1)Affiliated Computer Services, Inc., Class A
  
4,487,810
9,500
  
(1)Carreker Corp. 
  
94,905
20,300
  
(1)Checkfree Corp. 
  
413,308
35,700
  
(1)Checkpoint Systems, Inc.
  
615,825
92,000
  
(1)Computer Network Technology, Corp. 
  
877,680
21,500
  
(1)Digital Insight Corp. 
  
408,715
13,600
  
(1)Gtech Holdings Corp. 
  
814,776
53,600
  
(1)Identix, Inc. 
  
404,680
24,400
  
(1)Imation Corp. 
  
734,196
8,200
  
(1)LendingTree, Inc. 
  
110,700
9,800
  
(1)United Online, Inc. 
  
83,364
18,700
  
(1)Visionics Corp. 
  
189,244
         
    
Total
  
9,235,203
         
    
Computers-Software—6.1%
    
40,100
  
(1)Ansys, Inc. 
  
1,022,550
143,690
  
(1)Corillian Corp. 
  
418,138
112,700
  
(1)Digimarc Corp. 
  
1,687,119
6,800
  
(1)Echelon Corp. 
  
107,440
2,900
  
(1)HPL Technologies, Inc. 
  
34,684
40,500
  
(1)Information Resources, Inc. 
  
415,125
18,000
  
(1)MatrixOne, Inc. 
  
124,200
3,000
  
(1)Mentor Graphics Corp. 
  
57,900
21,800
  
(1)NetIQ Corp. 
  
488,974
265,700
  
(1)ONYX Software Corp. 
  
959,177
261,700
  
(1)Red Hat, Inc.
  
1,201,203
11,200
  
(1)Roxio, Inc.
  
238,000
37,500
  
(1)Viewpoint Corp. 
  
225,000
9,800
  
(1)VitalWorks, Inc. 
  
74,284
         
    
Total
  
7,053,794
         
    
Consumer Cyclical—1.9%
    
13,600
  
(1)Action Performance Cos., Inc.
  
639,880
11,900
  
(1)JAKKS Pacific, Inc.
  
229,313
10,800
  
Polaris Industries, Inc., Class A
  
813,240
27,700
  
(1)Salton, Inc.
  
475,055
         
    
Total
  
2,157,488
         
    
Consumer Finance—0.1%
    
13,300
  
Metris Cos., Inc..
  
173,432
         
    
Data Processing—1.9%
    
40,000
  
(1)ChoicePoint, Inc.
  
2,217,600
         
    
Education—0.9%
    
6,000
  
Strayer Education, Inc. 
  
339,660
13,300
  
(1)Sylvan Learning Systems, Inc. 
  
367,080

28


VISION Small Cap Stock Fund

Shares
       
Value

  
  
Common Stocks—continued
    
    
Education—continued
    
44,800
  
(1)The Princeton Review, Inc.
  
$       318,080
         
    
Total
  
1,024,820
         
    
Electric Utilities—1.8%
    
5,000
  
CH Energy Group, Inc.
  
256,950
15,700
  
El Paso Electric Co.
  
244,920
8,600
  
IDACORP, Inc.
  
325,424
24,600
  
PNM Resources, Inc.
  
713,400
9,400
  
UIL Holdings Corp.
  
530,160
         
    
Total
  
2,070,854
         
    
Electronic Components—2.6%
    
24,600
  
(1)Active Power, Inc.
  
103,320
3,000
  
Alpha Industries, Inc.
  
36,750
7,900
  
(1)Anixter International, Inc.
  
228,705
6,400
  
(1)Credence Systems Corp.
  
129,536
13,100
  
(1)Cree Inc.
  
154,449
3,400
  
(1)FEI Co.
  
89,862
60,200
  
Methode Electronics, Inc., Class A
  
690,494
4,100
  
(1)OmniVision Technologies, Inc.
  
48,708
147,700
  
(1)Pixelworks, Inc.
  
1,472,569
         
    
Total
  
2,954,393
         
    
Entertainment—1.8%
    
23,900
  
(1)Aztar Corp.
  
556,153
36,900
  
(1)Pixar, Inc.
  
1,490,760
         
    
Total
  
2,046,913
         
    
Financial Services—2.2%
    
28,600
  
Commercial Federal Corp.
  
840,840
49,700
  
(1)Friedman, Billings, Ramsey Group, Inc., Class A
  
446,803
32,300
  
Seacoast Financial Services Corp.
  
691,220
12,390
  
UMB Financial Corp.
  
592,502
         
    
Total
  
2,571,365
         
    
Home Building—2.9%
    
14,000
  
M/I Schottenstein Homes, Inc.
  
884,800
9,800
  
Ryland Group, Inc.
  
1,078,000
20,200
  
(1)Toll Brothers, Inc.
  
600,950
55,100
  
Walter Industries, Inc.
  
743,850
         
    
Total
  
3,307,600
         
    
Home Decoration Products—1.0%
44,900
  
Leggett and Platt, Inc.
  
1,180,870
         
    
Insurance—3.2%
    
18,500
  
AmerUs Group Co.
  
697,080
17,400
  
Commerce Group, Inc.
  
702,264
14,700
  
First American Corp.
  
324,870
95,400
  
Fremont General Corp.
  
666,846
11,000
  
Presidential Life Corp.
  
273,900
14,200
  
StanCorp Financial Group, Inc.
  
830,700
46,400
  
Vesta Insurance Group, Inc.
  
212,048
         
    
Total
  
3,707,708
         
    
Manufacturing—9.3%
    
32,700
  
Albany International Corp., Class A
  
823,386
48,900
  
(1)American Greetings Corp., Class A
  
867,975
7,700
  
Ameron International, Inc.
  
568,645
 
Shares
       
Value

  
  
Common Stocks—continued
    
    
Manufacturing—continued
    
27,600
  
Ball Corp.
  
$    1,312,380
44,700
  
Cooper Tire & Rubber Co.
  
1,108,560
51,200
  
General Cable Corp.
  
587,776
20,800
  
Harsco Corp.
  
884,000
12,100
  
M.D.C. Holdings, Inc.
  
611,050
19,000
  
Quanex Corp.
  
684,000
19,700
  
(1)Shaw Group, Inc.
  
601,441
24,400
  
(1)Symyx Technologies, Inc.
  
479,216
35,300
  
Timken Co.
  
940,745
27,600
  
Valspar Corp.
  
1,270,980
         
    
Total
  
10,740,154
         
    
Medical Products & Supplies—2.3%
    
16,900
  
(1)Align Technology, Inc.
  
65,065
39,200
  
(1)Bioject Medical Technologies, Inc.
  
139,944
15,000
  
(1)ICU Medical, Inc.
  
570,150
47,500
  
Mentor Corp.
  
1,902,375
         
    
Total
  
2,677,534
         
    
Oil & Gas Exploration & Production—1.8%
13,900
  
(1)Core Laboratories NV
  
208,500
15,200
  
Frontier Oil Corp.
  
319,200
40,000
  
Patina Oil & Gas Corp.
  
1,448,000
         
    
Total
  
1,975,700
         
    
Pharmaceuticals—10.6%
    
39,507
  
(1)Abgenix, Inc.
  
557,444
100,900
  
(1)AeroGen, Inc.
  
171,530
7,900
  
(1)Albany Molecular Research, Inc.
  
191,575
53,600
  
(1)Alkermes, Inc.
  
1,079,504
47,000
  
(1)Amylin Pharmaceuticals, Inc.
  
446,030
12,500
  
(1)ArQule, Inc.
  
118,750
48,000
  
(1)AtheroGenics, Inc.
  
388,320
12,100
  
(1)Atrix Laboratories, Inc.
  
289,916
33,800
  
(1)Celgene Corp.
  
668,564
42,729
  
(1)Cell Genesys, Inc.
  
607,179
50,700
  
(1)Corixa Corp.
  
278,343
22,000
  
(1)Cubist Pharmaceuticals, Inc.
  
307,560
39,100
  
(1)Dendreon Corp.
  
169,303
31,000
  
(1)Endo Pharmaceuticals Holdings, Inc.
  
358,670
13,300
  
(1)Esperion Therapeutics, Inc.
  
66,752
23,600
  
(1)First Horizon Pharmaceutical Corp.
  
614,544
10,800
  
(1)Gene Logic, Inc.
  
167,724
27,900
  
(1)Genta, Inc.
  
374,892
13,400
  
(1)Inhale Therapeutic Systems, Inc.
  
105,860
15,600
  
(1)Illumina, Inc.
  
131,040
50,100
  
(1)Incyte Genomics, Inc.
  
411,321
40,000
  
(1)Integra Lifesciences Corp.
  
780,000
8,000
  
(1)La Jolla Pharmaceutical Co.
  
58,160
36,100
  
(1,2)La Jolla Pharmaceutical Co.
  
262,447
5,800
  
(1)Lexicon Genetics, Inc.
  
46,400
212,500
  
(1)Paradigm Genetics, Inc.
  
384,625
22,750
  
(1)Pharmacopedia, Inc.
  
263,900
5,500
  
(1)Sangamo BioSciences, Inc.
  
48,180
4,600
  
(1)Scios, Inc.
  
142,278
35,200
  
(1)Syncor International Corp.
  
1,100,352
12,800
  
(1)Telik, Inc.
  
133,120
73,400
  
(1)Third Wave Technologies, Inc.
  
231,210

29


VISION Small Cap Stock Fund

Shares
       
Value

  
  
Common Stocks—continued
    
    
Pharmaceuticals—continued
    
37,400
  
(1)Transgenomic, Inc.
  
 $     226,233