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4: EX-99.B12 Annual Report, Rsi Retirement Trust 75 330K
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10: EX-27 Ex-27.7 Financial Data Schedule 2± 9K
11: EX-27 Ex-27.8 Financial Data Schedule 2± 9K
ANNUAL
REPORT
[LOGO]
RSI Retirement Trust
Core Equity Fund
Value Equity Fund
Emerging Growth Equity Fund
International Equity Fund
Actively Managed Bond Fund
Intermediate-Term Bond Fund
Short-Term Investment Fund
Dedicated Bond Fund
1995
Broker/Dealer:
[LOGO]
Retirement System
Distributors Inc.
P.O. Box 2064
Grand Central Station
New York, NY 10163-2064
Table of Contents
-------------------------------------------------------------------------
President's Message ............................................. 1
Investment Review ............................................... 4
Combined Financial Statements ................................... 21
Financial Statements of Investment Funds ........................ 23
Core Equity Fund .............................................. 23
Value Equity Fund ............................................. 27
Emerging Growth Equity Fund ................................... 30
International Equity Fund ..................................... 36
Actively Managed Bond Fund .................................... 41
Intermediate-Term Bond Fund ................................... 45
Short-Term Investment Fund .................................... 49
Notes to Financial Statements ................................... 52
Independent Auditor's Report .................................... 69
Officers, Consultants, Investment Managers and Custodians ....... 70
Board of Trustees ............................................... 71
[LOGO] is a registered trademark of Retirement System Group Inc.
PRESIDENT'S
MESSAGE
To Our Unitholders:
Setting savings goals, whether long-term or short-term, is the first step an
individual should take in deciding the appropriate investment mix for his or her
portfolio. It is then that the value of asset allocation, an important component
in investment education programs, comes into play. Different models exist to
assist in determining a suitable investment mix to achieve savings goals. It is
key, however, that an individual periodically review the status of his or her
portfolio to ensure that accumulated balances are in keeping with the desired
asset allocation.
The past two-year period is a prime example of another topic of investment
education--the volatility of returns that can arise within a market cycle. In
1994, investors experienced a situation in which the domestic equity markets
were slightly positive; however, the bond markets finished last year showing
negative results (the worst in many years). Thus far in 1995, both stocks and
bonds are showing double digit results for the nine months ended September 30,
1995.
Considering the market fluctuations of the past two years, individuals
should consider reviewing their savings goals and reassessing their investment
strategies. By examining their accumulated account balances, individuals may
determine that a reallocation of funds among the different investment vehicles
is necessary to stay on track.
The same need applies to qualified plans. Defined benefit plans using the
Trust's asset allocation service benefit from professional investment managers
allocating the plan's assets among a range of investments within the appropriate
tolerance for risk category. Investment performance and its effect on the plan's
asset mix are reviewed on an ongoing basis, and if appropriate, asset allocation
adjustments are made.
In 401(k) and most other defined contribution plans, however, participants
are responsible for their own asset allocation. Periodically, plan participants
need to review their investment strategies and account balances, to ensure that
they are in keeping with the individual's long-term retirement plan strategy.
On behalf of the Board of Trustees, I would like to thank you for choosing
RSI Retirement Trust to help meet your retirement savings goals.
Sincerely,
[Insert Signature]
William Dannecker
President and Trustee
November 27, 1995
EQUITY FUNDS
Core Equity Fund
The Core Equity Fund is a stock fund that invests in a broadly diversified group
of high-quality, medium to large companies that exhibit sustainable growth in
earnings, and that appear attractively valued. It offers investors the potential
for long-term capital appreciation, with income as a secondary goal.
Managed by Retirement System Investors Inc.
Value Equity Fund
The Value Equity Fund is a growth and income stock fund that seeks capital
appreciation over the longer term. It invests in a broadly diversified group of
financially strong companies with medium to large market capitalizations. These
companies are frequently out of favor with investors, but have had good earnings
growth records in the past and offer prospects for significant earnings and
dividend growth, along with the prospect for capital appreciation. In the view
of the investment manager, these stocks are currently undervalued and selling
below their potential value.
Managed by NFJ Investment Group
(from October 1994-March 1995)
Managed by Retirement System Investors Inc.
(from April 1995-September 1995)
Emerging Growth Equity Fund
The Emerging Growth Equity Fund is a growth stock fund that seeks capital
appreciation by investing primarily in smaller, relatively new companies that,
in the view of the investment manager, have higher than average potential for
earnings growth.
Managed by The Putnam Advisory Company, Inc. and
Friess Associates, Inc.
International Equity Fund
The International Equity Fund is a stock fund that invests primarily in stocks
of companies headquartered in foreign countries in order to take advantage of
opportunities outside the U.S. capital markets. Holdings are concentrated in the
larger markets of Europe, Australia and the Far East. The Fund invests in
companies whose current prices, in the view of the manager, do not reflect their
true earnings potential, and in companies that are misperceived by investors,
and therefore, are selling at "undervalued" prices. The Fund avoids investments
in foreign markets with unacceptable political or economic risks.
Managed by Morgan Grenfell Investment Services Limited
2
FIXED-INCOME FUNDS
Intermediate-Term Bond Fund
The Intermediate-Term Bond Fund invests in high-quality, fixed-income securities
that mature within ten years, or have expected average lives of ten years or
less. At least 65% of the investments in this Fund are in U.S. Government or
U.S. Government Agency issues which have the highest credit rating. At the time
of purchase, at least 75% of the holdings must have a quality rating of "AA" or
better, with a minimum quality rating of "A" for other holdings. This investment
fund's goal is to achieve income and price appreciation.
Managed by Retirement System Investors Inc.
Actively Managed Bond Fund
The Actively Managed Bond Fund invests in high-quality, fixed-income securities
(bonds and other debt securities), with maturities out to 30 years. The Fund's
investment managers frequently adjust the maturity structure of the portfolio to
respond to perceived changes in the relative attractiveness of the fixed-income
market. At the time of purchase, at least 75% of the investments in this Fund
must have a quality rating of "AA" or better, with a minimum rating of "A" for
other holdings, and at least 65% of the investments must be in U.S. Government
or U.S. Government Agency issues. The Fund seeks to achieve both income and
price appreciation.
Managed by Retirement System Investors Inc.
Short-Term Investment Fund
The Short-Term Investment Fund invests in high-quality cash equivalent types of
securities normally maturing in one year or less. While the funds may invest in
U.S. Government instruments with maturities of up to two years, the maximum
average maturity of the Fund's holdings will not exceed one year. This
investment fund offers substantial liquidity and capital preservation.
Managed by Retirement System Investors Inc.
3
INVESTMENT
REVIEW
Core Equity Fund
The Core Equity Fund seeks capital appreciation over the long term. The Fund
invests in a broadly diversified group of high-quality, medium to large
companies which the manager, Retirement System Investors Inc., believes are
reasonably valued relative to their earnings growth potential.
Market Environment
Expanding world markets, the continued miniaturization of electronics, and the
drive to enhance productivity continue to sustain robust demand for technology
and communications products holdings. Consumer staples--particularly health
care--benefited from cost reductions, dollar weakness, resumption of unit growth
and a modest return of pricing power. The portfolio's fiscal 1995 results were
also helped by below-average positions in the relatively weak consumer cyclicals
and raw material areas, which suffered from weak unit growth and limited pricing
flexibility.
The Core Fund's results (see below) over the past fiscal year benefited
from meaningful positions in large multi-national growth companies led by
technology (25% of total fund assets) and consumer staple companies (19% of
total). However, the Fund had a lower than market exposure to the financial
sector (7% of total), which also had good returns.
Performance Results
The Core Equity Fund produced a solid return of 31.32% for the one-year
period ended September 30, 1995 and outperformed the S&P 500, an unmanaged
representative index of the broad equity market (performance results are gross,
since expenses are not applicable; this applies to all market index results that
appear in this report), which posted a return of 29.72% for the same one-year
period. Over the long term, the Fund continued to provide strong returns. For
the ten years ended September 30, 1995, the Core Fund produced an average annual
return of 15.15%, while the S&P 500 posted an average annual return of 15.99%
for the same period.
Measuring Risk and Return
Core Equity Fund vs S&P 500
For 10-Year Period Ended 9/30/95
[GRAPH]
This chart compares the historical average annual total return and the risk (as
measured by the standard deviation) of the Core Equity Fund and the Standard &
Poor's 500 Index for the ten-year period ended 9/30/95. The S&P 500 Index is an
unmanaged index of common stocks widely used as a measure of the broad equity
market, and is a representative market index for this Fund.
Standard deviation is a statistical measure of volatility often used as a
measure of risk. In general, the greater the standard deviation, the greater the
tendency to vary from the average annual total return. By comparing the
magnitude of the standard deviations, the relative volatility of each investment
can be determined. A lower standard deviation reflects lower volatility.
4
Core Equity Fund vs S&P 500
[GRAPH]
Growth of $10,000
-----------------
Core Equity S&P 500
1 year $13,132 $12,972
5 year $20,177 $22,153
10 year $40,974 $44,067
Cumulative Returns
------------------
1 year 31.32% 29.72%
5 year 101.77% 121.55%
10 year 309.74% 340.67%
Average Annual Returns
----------------------
1 year 31.32% 29.72%
5 year 15.07% 17.25%
10 year 15.15% 15.99%
It should be noted that the Core Equity Fund's annualized return for the
ten years ended September 30, 1995, was achieved while taking less risk (as
measured by standard deviation) than the S&P 500 (see chart on page 4). Because
of the Fund's long-term view, the manager employs a buy and hold strategy, a
strategy that has resulted in a relatively low portfolio turnover rate.
When compared to Lipper's Growth and Income Funds grouping of mutual funds,
the Core Equity Fund continued to maintain a superior record. For the one-year
period ended September 30, 1995, the Fund's return of 31.32% was 824 basis
points higher than the 23.08% return of its Lipper benchmark for the same
period. This performance placed the Core Equity Fund in the top 5% of Lipper's
Growth and Income Funds grouping of mutual funds. (The Fund ranked 17th out of
395 funds.) For the long-term period of ten years ended September 30, 1995, the
Fund's average annual return of 15.15% was 1.40% higher than the 13.75%
annualized return the Lipper benchmark posted for the same period, and ranked in
the top 25% of the Lipper Growth and Income Funds grouping. (The Fund placed
29th out of 116 funds; this ranking is based on total return). Past performance
is not a guarantee of future results.
Core Equity Fund vs Lipper Growth and Income Funds Average
For periods ended September 30, 1995
-------------------------------------------------------------------------------
Annualized
------------------------
1 Year 5 Years 10 Years
------ ------- --------
CORE EQUITY FUND(1) 31.32% 15.07% 15.15%
Lipper Growth & Income
Funds Avg.(2) 23.08 16.08 13.75
(1) All performance results shown are net of management fees and all related
investment expenses.
(2) Lipper Analytical Services is an independent reporting service that
measures the performance of most U.S. mutual funds. The performance results
reflect an unmanaged index and are net of all expenses other than sales
charges and redemption fees.
-------------------------------------------------------------------------------
5
Value Equity Fund
The Value Equity Fund seeks income and capital appreciation by investing in a
diversified portfolio of stocks with below average price-to-earnings (P/E)
ratios and above average growth prospects. The portfolio has a dividend yield
that is considerably higher than the market itself. The aim of the portfolio
manager, Retirement System Investors Inc., is to produce above-market returns by
choosing stocks whose price does not adequately reflect their ability to grow
earnings and dividends over time.
For fiscal 1995, the Value Fund was managed by NFJ Investment Group for the
first six months and by Retirement System Investors Inc. (which was appointed
manager effective April, 1995) for the second six months.
Market Environment
For the first quarter of fiscal 1995, value stocks were generally out-of-favor
versus growth stocks. The market as a whole was flat (S&P 500 was -0.03%), but
it was a period of strong performance in both technology and consumer staples
issues, and the portfolio was hurt due to its lighter weightings in these two
positively performing sectors. The second quarter was filled with optimism that
the economy would continue to show strength and the broad equity markets were up
substantially (i.e., the S&P 500, at +9.74% and the DJIA, at +9.17%), and both
value and growth stocks performed well. The portfolio benefited nicely both from
its stock holdings in technology, health care, energy and financials, and
because low P/E, high yield and quality stocks did well during this period.
For the second half of fiscal 1995, the Value Fund returned 14.53% while
the Russell 1000 Value Index, a representative market index, returned 18.48%.
During this period, the new manager (Retirement System Investors Inc.) was
repositioning the Value Fund and finished the period with its largest exposures
in utilities (including telephone), industrial capital goods providers,
financials (principally banks), and consumer staples issues. The changes made to
the portfolio reflect the current manager's philosophy of investing in
high-quality companies selling at reasonable prices. Returns for the second half
of the fiscal year were negatively affected by the speed with which the manager
was able to reposition the portfolio away from consumer cyclical issues, such as
troubled retailers in the midst of internal restucturings, and by the
portfolio's exposure to the relatively weak performing energy sector. An
underweighting in technology issues impeded performance versus market averages
in the fiscal year. Second half returns benefited
Measuring Risk and Return
Value Equity Fund vs
Russell 1000 Value
For 10-Year Period Ended 9/30/95
[GRAPH]
This chart compares the historical average annual total return and the risk (as
measured by the standard deviation) of the Value Equity Fund and the Russell
1000 Value for the ten-year period ended 9/30/95. The Russell 1000 Value is a
representative market index for this Fund. See the Core Equity Fund chart (p. 4)
for a definition of standard deviation.
6
from the portfolio's exposure to the utility sector, financials, and
pharmaceutical companies.
Performance Results
For the one-year period ended September 30, 1995, the Value Equity Fund produced
a return of 20.63%. For the same period, the Russell 1000 Value, an unmanaged
representative index reflecting the performance of more than 600 stocks with a
less-than-average growth orientation, posted a return of 27.69%. For the five-
and ten-year periods ended September 30, 1995, the Value Equity Fund produced
annual returns of 15.48% and 11.48%, respectively, compared to annualized
returns of 18.16% and 15.39%, respectively, for the Russell 1000 Value. The
Fund's risk profile, as measured by standard deviation, versus the market
(Russell 1000 Value) is reflected in the chart on page 6.
The Value Equity Fund's return of 20.63% for the one-year period ended
September 30, 1995 trailed the 23.08% return of the Lipper Growth and Income
Funds Average, a representative performance benchmark, for the same period. For
the trailing five-year period, the Fund returned 15.48% per year versus 16.08%,
annualized for the Lipper benchmark. Longer term (ten years ended September 30,
1995), the Fund's annualized return of 11.48% trailed the 13.75% annualized
return produced by the Lipper Growth and Income Funds Average. Past performance
is not a guarantee of future results.
Value Equity Fund vs Russell 1000 Value
[GRAPH]
Value Equity Fund vs Lipper Growth
and Income Funds Average
For periods ended September 30, 1995
Growth of $10,000
-----------------
Value Equity Russell 1000
------------ ------------
1 year $12,063 $12,769
5 year $20,535 $23,038
10 year $29,657 $41,832
Cumulative Returns
------------------
1 year 20.63% 27.69%
5 year 105.35% 130.38%
10 year 196.57% 318.32%
Average Annual Returns
----------------------
1 year 20.63% 27.69%
5 year 15.48% 18.16%
10 year 11.48% 15.39%
-------------------------------------------------------------------------------
Annualized
----------------------
1 Year 5 Years 10 Years
------ ------- ---------
VALUE EQUITY FUND(1) 20.63% 15.48% 11.48%
Lipper Growth & Income Funds
Avg.(2) 23.08 16.08 13.75
1. All performance results shown are net of management fees and all related
investment expenses.
2. Lipper Analytical Services is an independent reporting service that measures
the performance of most U.S. mutual funds. The performance results reflect
an unmanaged index and are net of all expenses other than sales charges and
redemption fees.
-------------------------------------------------------------------------------
7
Emerging Growth Equity Fund
The Emerging Growth Equity Fund, a fund that has above-average volatility, seeks
capital appreciation through investment in quality growth stocks of smaller
companies--those in the $50 million to $750 million capitalization range at time
of purchase.
Market Environment
For the one-year period ended September 30, 1995, the markets were influenced by
improving economic growth, strong corporate earnings, declining interest rates
and stable inflation. Early in the year, a weaker dollar and healthy economy
favored larger capitalization multi-national and cyclically oriented issues.
With investor confidence growing on the strength of the economy (in early 1995)
and the dollar rebounding, small- to medium- capitalization stocks--which
continued to record very strong earnings gains--performed particularly well. For
the one year ended September 30, 1995, the Russell 2000, a representative index
for this sector, produced a return of 23.36% (with over 85% of this result
arising in the last two quarters of fiscal year 1995). Although strong in
nominal terms, this index result was 636 basis points under the 29.72% return of
the S&P 500, the broad U.S. equity market index. (For fiscal year 1994, the
Russell 2000 return of 2.67% was more in line with the S&P 500, which returned
3.68%).
The Emerging Growth Equity Fund continues to be managed by two investment
managers. As of September 30, 1995, Friess Associates, Inc. ("Friess") was
managing 58.9% of the assets of the Fund and The Putnam Advisory Company, Inc.
("Putnam") was managing the remaining 41.1%.
Friess is a smaller market capitalization, aggressive growth-oriented
manager. At September 30, 1995, Friess maintained over 81% of portfolio assets
concentrated in the consumer staples, technology and capital goods sectors of
the market. Concentrations in all three sectors rose as the year progressed,
from 66% in aggregate at December 31, 1994 to the aggregate weighting noted at
fiscal year end. At September 30, 1995, the portion of the Fund's portfolio
managed by Friess held 72 stocks.
Friess turned in a superior result for fiscal year 1995, with a gross
return of 58.30%, or 34.94 percentage points higher than the Russell 2000. (For
fiscal year 1994,
Measuring Risk and Return
Emerging Growth Equity Fund vs
Russell 2000
For 10-Year Period Ended 9/30/95
[GRAPH]
This chart compares the historical average annual total return and the risk (as
measured by the standard deviation) of the Emerging Growth Equity Fund and the
Russell 2000 for the ten-year period ended 9/30/95. The Russell 2000 is a
representative market index for this Fund. See the Core Equity Fund chart (p. 4)
for a definition of standard deviation.
8
Friess's gross return of -3.58% underperformed versus the Russell 2000).
Maintaining strategic locations in key geographic areas in the U.S. facilitates
Friess's analysts in making direct contact with company managements, as well as
with their customers, suppliers and competitors. This enables the analysts to
identify those companies with dramatically positive sales and earnings growth,
strong order flow, and important market share growth trends which are not always
well understood by the investment market place in general. During the year, the
manager dramatically increased exposure to numerous technology sectors--for
example, data processing: software, peripherals, and services, which were in
favor and translated into exceptionally positive investment returns. The
portfolio was also helped by industry shifts into health care services and
medical products.
Putnam is a more conservative emerging growth company manager than Friess.
It looks for superior achieving companies (that are reasonably priced) by
evaluating the fundamental criteria, such as rapidly growing earnings,
above-average return on equity, and low debt to total capitalization. The
manager's diversified approach and large number of holdings aided the portfolio
as many of the stocks held, met or exceeded earnings and growth expectations.
While technology was the best performing sector throughout the year, specialty
apparel companies, consumer services issues and radio, television and
cable-related beneficiaries of pending telecommunications legislation were also
meaningful contributors to Putnam's performance success. (Putnam's gross return
for its portion of the Fund for fiscal year 1995 was 38.08% versus 13.28% for
fiscal year 1994 and, in both years, the manager significantly outperformed the
market).
At the end of the fiscal year, the top three sectors for Putnam were
consumer cyclicals, consumer staples and technology, with an aggregate
concentration of 84% of the portfolio assets. On September 30, 1995, the portion
of the Fund's portfolio managed by Putnam held 152 stocks, of which only five
overlapped with the holdings of Friess. Accordingly, the Fund continues to
reflect a highly diversified position.
Emerging Growth Equity Fund vs Russell 2000
[CHART]
Growth of $10,000
-----------------
Emerging Growth Russell
Equity 2000
--------------- -------
1 year $14,622 $12,336
5 year $35,124 $26,657
10 year $46,167 $33,220
Cumulative Returns
------------------
1 year 46.22% 23.36%
5 year 251.24% 166.57%
10 year 361.67% 232.20%
Average Annual Returns
----------------------
1 year 46.22% 23.36%
5 year 28.56% 21.66%
10 year 16.53% 12.76%
9
Performance Results
The Emerging Growth Equity Fund achieved a return of 46.22% for the one-year
period ended September 30, 1995, more than 22 percentage points higher than the
23.36% return for the Russell 2000. Over the long term, the Fund also
outperformed the Russell 2000. For the ten-year period ended September 30, 1995,
the Emerging Growth Fund achieved an average return of 16.53% per year, compared
to the 12.76% return per year for the Russell 2000. The Fund outperformed the
Russell 2000 while taking only slightly more risk (as measured by standard
deviation) than the Russell 2000 index (see chart on page 8).
The Emerging Growth Fund has also maintained a performance advantage over
its benchmark, the Lipper Small Company Growth Funds Average. For the one-year
period ended September 30, 1995, the Emerging Growth Fund achieved an
outstanding return of 46.22%, or 17.29 percentage points greater than the Lipper
Small Company Growth Funds Average of 28.93%. This return placed the Emerging
Growth Fund in the top 11% of mutual funds in the Lipper Small Company Growth
Funds grouping. (The Fund ranked 29th out of 288 funds.) For the trailing five
years, the Fund's annualized return of 28.56% also ranked very high in the
applicable Lipper universe, with a top 13% achievement (10th out of 79 funds).
Rankings are based on total returns. Over the long term (ten years ended
September 30, 1995), Emerging Growth maintained its performance advantage, with
an annualized return of 16.53%, versus the 15.51% per year return of the Lipper
benchmark. Past performance is not a guarantee of future results.
Emerging Growth Equity Funds vs Lipper Small Company Growth Funds Average
For periods ended September 30, 1995
-------------------------------------------------------------------------------
Annualized
---------------------
1 Year 5 Years 10 Years
------ ------- --------
EMERGING GROWTH EQUITY FUND(1) 46.22% 28.56% 16.53%
Lipper Small Company Growth Funds Avg.(2) 28.93 23.04 15.51
(1) All performance results shown are net of management fees and all related
investment expenses.
(2) Lipper Analytical Services is an independent reporting service that measures
the performance of most U.S. mutual funds. The performance results reflect
an unmanaged index and are net of all expenses other than sales charges and
redemption fees.
-------------------------------------------------------------------------------
10
International Equity Fund
The International Equity Fund seeks capital appreciation over time by investing
in stocks that are headquartered in foreign countries to take advantage of
opportunities outside the U.S. capital markets. While holdings are principally
concentrated in the larger markets abroad (including small capitalization
companies), some investments are also made in emerging markets. The portfolio
manager, Morgan Grenfell Investment Services Ltd. (Morgan Grenfell), looks for
companies whose current prices, in their view, do not reflect their true
earnings potential and for stocks that are misperceived by investors and
therefore, are selling at undervalued prices.
Market Environment
Over the past year, most international markets compared unfavorably with the
domestic U.S. equity market. (This was particularly true for the emerging
markets, as reflected in the MSCI Emerging Free Index, which was down 18.01% for
fiscal 1995.) However, there were some exceptions with Sweden (at +45%) and
Finland (at +54%) benefiting from weaker currencies and particularly attractive
technology and cyclical stocks. For fiscal year 1995, the non-U.S. stock
markets, as measured by the MSCI EAFE Index, returned 5.80% versus the S&P 500
index, which rose 29.72%. (The situation was reversed in fiscal 1994 when the
MSCI EAFE Index was up 9.79%, while the S&P 500 returned 3.68%.)
Throughout much of the year, the weakness of the U.S. dollar had a major
impact on the portfolio manager's performance, particularly in Japan, where
anticipated profit improvements were put on hold as the Yen reached a post-war
high of 79.8 to the dollar. A subsequent rebound in the exchange rate, triggered
by coordinated interest rate cuts in the U.S. and Japan and massive intervention
by the Bank of Japan, led to a significant recovery. Portfolio management did
hedge the Yen throughout the period, and gained added performance as a result of
this activity. In addition, the portfolio holdings in emerging markets was
nominal throughout the year, and this underweighting also was beneficial. At
September 30, 1995, the Fund had a 6% weighting in emerging markets with
holdings in Mexico, Malaysia, South Korea and Singapore. (Morgan Grenfell
finished the year ahead of the index with a gross return of 7.73% for the
International Equity Fund.)
Measuring Risk and Return
International Equity Fund vs
MSCI EAFE
For 10-Year Period Ended 9/30/95
[GRAPH]
This chart compares the historical average annual total return and the risk (as
measured by the standard deviation) of the International Equity Fund and the
MSCI EAFE for the ten-year period ended 9/30/95. The MSCI EAFE is a
representative market index for this Fund. See the Core Equity Fund chart (p. 4)
for a definition of standard deviation.
11
At fiscal year end, the International Fund had a weighting of 33.8% in
Japan versus the MSCI EAFE index weighting of 40.8%, a 29.7% weighting in
Continental Europe (principally in Germany, France, Holland, Sweden and
Switzerland) versus the index weighting of 32.8% and a market weighting in the
United Kingdom of 16.6%.
International Equity Fund vs MSCI EAFE
[GRAPH]
Growth of $10,000
-----------------
International MSCI
Equity EAFE
------------- ----
1 year $10,570 $10,580
5 year $15,903 $16,619
10 year $34,092 $40,127
Cumulative Returns
------------------
1 year 5.70% 5.80%
5 year 59.03% 66.19%
10 year 240.92% 301.27%
Average Annual Returns
----------------------
1 year 5.70% 5.80%
5 year 9.72% 10.69%
10 year 13.05% 14.91%
Performance Results
For the one-year period ended September 30, 1995, the International Equity Fund
provided a return of 5.70%, comparable to the MSCI EAFE Index return of 5.80%.
For the ten years ended September 30, 1995, the International Fund produced an
annualized return of 13.05%, trailing the MSCI EAFE Index per year return of
14.91%. However, the Fund had a much lower risk exposure, as measured by
standard deviation, than the MSCI EAFE Index during this period (see chart on
page 11).
The International Equity Fund's return of 5.70% for the one-year period
ended September 30, 1995 outpaced by more than two percentage points the 3.12%
return of the Lipper International Funds Average, the Fund's benchmark. This
one-year return ranked the Fund in the top 33% of its Lipper grouping (73rd out
of 222 funds; this ranking is based on total return). For the ten-year period
ended September 30, 1995, the International Fund posted an annualized return of
13.05% versus an annualized return of 14.40% for the Lipper benchmark. Past
performance is not a guarantee of future results.
International Equity Fund vs Lipper International Funds Average
For periods ended September 30, 1995
--------------------------------------------------------------------------------
Annualized
-----------------------
1 Year 5 Years 10 Years
------ ------- --------
INTERNATIONAL EQUITY FUND(1) 5.70% 9.72% 13.05%
Lipper International Funds Avg.(2) 3.12 10.90 14.40
(1) All performance results shown are net of management fees and all related
investment expenses.
(2) Lipper Analytical Services is an independent reporting service that measures
the performance of most U.S. mutual funds. The performance results reflect
an unmanaged index and are net of all expenses other than sales charges and
redemption fees.
--------------------------------------------------------------------------------
12
Actively Managed Bond Fund
The Actively Managed Bond Fund invests in high-quality, fixed-income securities
(bonds and other debt securities) with maturities of up to 30 years. Since
August 2, 1993, the Fund has been managed exclusively by Retirement System
Investors Inc.
Market Environment
The environment for fixed-income investors improved substantially during the
fiscal year ended September 30, 1995, as interest rates declined in the
intermediate and longer sectors of the yield curve. The bond market's rally
began in November of last year, and strengthened as investors perceived that the
economy was slowing and inflationary pressures would be contained. The market
for bonds was further improved by a promise from a more conservative Congress to
reduce government spending and eventually balance the budget by low money supply
growth, and by sluggish foreign economies. During the fiscal year, the 30-year
Treasury declined from 7.8% to 6.5%, the ten-year Treasury from 7.6% to 6.2%,
the five year from 7.3% to 6.0%, and the two year from 6.6% to 5.8%.
The performance of fixed-income investments varied substantially with
duration in fiscal 1995. Longer durations and a flattening yield curve raised
prices and total return as investors extended out the curve. The yield spread
between the three-month Treasury bill and the 30-year bond narrowed to 109 basis
points at the end of fiscal 1995, from 305 basis points the year before. Short
interest rates moved higher late in 1994 and early 1995 before drifting lower,
while the rest of the yield curve declined more sharply this year. Within
fixed-income sectors, long duration Governments and non-callable corporates
outperformed mortgages and other callable issues in fiscal 1995.
The Actively Managed Bond Fund began fiscal 1995 with a duration of 4.6
years, which was gradually raised to 4.9 years by May, before drifting back to
4.6 years at September 30, 1995. The Lehman Brothers Aggregate Bond Index also
had a modified duration of 4.6 years at the end of fiscal 1995. Investment
changes during the year primarily consisted of buying discount callable Federal
agency issues maturing in five to 15 years, at yields of 55 to 70 basis points
over the comparable Treasury. The source of funds was cash on hand and cash
inflows during the year.
Measuring Risk and Return
Actively Managed Bond Fund vs
Lehman Brothers Aggregate Bond Index
For 10-Year Period Ended 9/30/95
[GRAPH]
This chart compares the historical average annual total return and the risk
(as measured by the standard deviation) of the Actively Managed Bond Fund and
the Lehman Bros. Aggregate Bond Index for the ten-year period ended 9/30/95.
Lehman Bros. is a representative market index for this Fund. See the Core Equity
Fund chart (p. 4) for a definition of standard deviation.
13
The Fund maintains high quality with 52% in U.S. Treasuries, 15% in Federal
agency notes and bonds, 13% in Federal agency mortgage pass thrus, 12% in agency
collateralized mortgage obligation PACs, 6% in corporates, and 2% in cash as of
fiscal year end. All holdings must have a quality rating of "A" or better.
Actively Managed Bond Fund vs Lehman Brothers
Aggregate Bond Index
[GRAPH]
Growth of $10,000
-----------------
Actively
Managed LB Agg.
Bond Fund Bond Index
---------- ----------
1 year $11,351 $11,405
5 year $16,041 $15,851
10 year $24,159 $25,913
Cumulative Returns
------------------
1 year 13.51% 14.06%
5 year 60.41% 58.51%
10 year 141.59% 159.13%
Average Annual Returns
----------------------
1 year 13.51% 14.06%
5 year 9.91% 9.65%
10 year 9.22% 9.99%
Performance Results
The Actively Managed Bond Fund posted a return of 13.51% for the one-year period
ended September 30, 1995. The Lehman Brothers Aggregate Bond Index, a
representative market index, achieved a return of 14.06% for the same period.
Over the longer term (ten years ended September 30, 1995), the Fund had a return
of 9.22% per year, versus the 9.99% annualized return of the Lehman Brothers
Aggregate Bond Index. During this ten-year period, the Fund's risk profile, as
measured by standard deviation, was about 14% greater than the market index (see
chart on page 13).
The Actively Managed Bond Fund outperformed its Lipper benchmark, the U.S.
Government Bond Funds Average, for the one-year period ended September 30, 1995,
with a return of 13.51%, compared to the 12.74% return of the benchmark. With
this return, the Fund achieved a top 32% ranking within its Lipper grouping. For
the trailing five years, the Fund's annualized return of 9.91% exceeded the
Lipper benchmark's annualized return of 8.58% by 133 basis points per year, and
ranked in the top 14% of its Lipper grouping (10th out of 76 funds). Over the
long term (ten years ended September 30, 1995), the Fund continued to outpace
the benchmark, with a 9.22% annualized return, versus an 8.36% per year return
for the benchmark. The Fund also achieved a top 24% ranking in the Lipper U.S.
Government Bond Funds Grouping (6th out of 26 funds for this period). Rankings
are based on total return. Past performance is not a guarantee of future
results.
14
Actively Managed Bond Fund vs Lipper U.S. Government Bond Funds Average
For periods ended September 30, 1995
--------------------------------------------------------------------------------
Annualized
--------------------
1 Year 5 Years 10 Years
------ ------- --------
ACTIVELY MANAGED BOND FUND(1) 13.51% 9.91% 9.22%
Lipper U.S. Government Bond Funds Avg.(2) 12.74 8.58 8.36
(1) All performance results shown are net of management fees and all related
investment expenses.
(2) Lipper Analytical Services is an independent reporting service that measures
the performance of most U.S. mutual funds. The performance results reflect
an unmanaged index and are net of all expenses other than sales charges and
redemption fees.
-------------------------------------------------------------------------------
Intermediate-Term Bond Fund
The Intermediate-Term Bond Fund invests in high-quality, fixed-income securities
that mature within ten years or have expected average lives of ten years or
less. It is managed by Retirement System Investors Inc.
Market Environment
The positive environment for fixed-income investors (as discussed under the
Actively Managed Bond Fund) also helped the Intermediate-Term Bond Fund, but to
a smaller degree than the Actively Managed Bond Fund, because of the
Intermediate Fund's lower duration and volatility. The duration of the Fund held
at around 3.1 years during fiscal 1995, compared with a modified duration of 3.0
years for the Lehman Brothers Government Intermediate Bond Index, a
representative market proxy for the Fund.
The Intermediate-Term Bond Fund maintained an emphasis on high-quality,
fixed-income investments during the one-year period covered by this report. At
the end of the year, 94% of the holdings were in AAA securities, including 44%
in U.S. Treasuries and 29% in agency mortgage pass thrus and short
collateralized mortgage obligation PACs, 18% in Federal agency notes and bonds
and 2.5% invested in Repos collateralized by U.S. Treasuries. The remaining 6%
was invested in corporates. (The quality of holdings is restricted to "A" or
better, and at least 65% of holdings must be U.S. Government or agency issues.)
Measuring Risk and Return
Intermediate-Term Bond Fund vs
Lehman Brothers Government-
Intermediate Bond Index
For 10-Year Period Ended 9/30/95
[GRAPH]
This chart compares the historical average annual total return and the risk (as
measured by the standard deviation) of the Intermediate-Term Bond Fund and the
Lehman Bros. Government-Intermediate Bond Index for the ten-year period ended
9/30/95. Lehman Bros. is a representative market index for this Fund. See the
Core Equity Fund chart (p. 4) for a definition of standard deviation.
15
Intermediate-Term Bond Fund vs Lehman Brothers
Government-Intermediate Bond Index
[GRAPH]
Growth of $10,000
-----------------
Intermediate-
Term LB Gov't-Inter.
Bond Fund Bond Index
------------- ---------------
1 year $11,028 $11,060
5 year $14,665 $14,981
10 year $22,952 $23,346
Cumulative Returns
------------------
1 year 10.28% 10.61%
5 year 46.65% 49.81%
10 year 129.52% 133.46%
Average Annual Returns
----------------------
1 year 10.28% 10.61%
5 year 7.96% 8.42%
10 year 8.66% 8.85%
Performance Results
The Intermediate-Term Bond Fund posted a return of 10.28% for the one-year
period ended September 30, 1995, versus the 10.61% return for the Lehman
Brothers Government-Intermediate Bond Index, a representative market index. For
the ten-year period ended September 30, 1995, the Intermediate-Term Bond Fund
achieved an annual return of 8.66%, while the market returned 8.85% per year.
Both the Fund and the market index had similar risk profiles, as measured by
standard deviation, during this period (see chart on page 15).
For the one-year period ended September 30, 1995, the Fund had a return of
10.28%, versus 11.34% for the Lipper Intermediate (5 to 10 years maturity) U.S.
Government Funds Average, the Fund's performance benchmark. Over the long term
(ten years ended September 30, 1995), the Fund outpaced the Lipper benchmark by
0.43% per year--8.66% per year versus 8.23%, annualized, respectively. Past
performance is not a guarantee of future results.
Intermediate-Term Bond Fund vs Lipper Intermediate U.S. Government Funds Avg.
For periods ended September 30, 1995
--------------------------------------------------------------------------------
Annualized
-----------------------
1 Year 5 Years 10 Years
------ ------- --------
INTERMEDIATE-TERM BOND FUND(1) 10.28% 7.96% 8.66%
Lipper Intermediate (5 to 10 years
maturity) U.S. Gov't. Funds Avg.(2) 11.34 8.12 8.23
(1) All performance results shown are net of management fees and all related
investment expenses.
(2) Lipper Analytical Services is an independent reporting service that measures
the performance of most U.S. mutual funds. The performance results reflect
an unmanaged index and are net of all expenses other than sales charges and
redemption fees.
-------------------------------------------------------------------------------
16
Short-Term Investment Fund
The Short-Term Investment Fund, managed by Retirement System Investors Inc.,
invests in high-quality, cash equivalent-type securities maturing in one year or
less, and U.S. Government instruments with maturities of up to two years. The
portfolio's maximum average maturity is one year.
Market Environment
Short-term interest rates continued to move higher in the last quarter of 1994
and early 1995 as the Federal Reserve ratcheted the Fed Funds' rate from 4.75%
at the end of September 1994 to 6.0% in February 1995. Investors then began to
perceive a slowing in the economy, which could restrain further tightening by
the Fed, and money market rates subsequently drifted lower. After the Fed cut
the Fed Funds' rate early in July, from 6.0% to 5.75%, money market rates
declined more sharply on anticipation of further Fed easing. The 90-day Treasury
bill rose from 4.77% at September 30, 1994 to 5.99% in January, 1995, and eased
to 5.41% on September 30, 1995.
The Short-Term Investment Fund's average maturity varied during the fiscal
year depending on the perceived direction of interest rates. Average maturity of
28 days on September 30, 1994 shrank to 15 days in January, 1995, and extended
to 78 days on September 30, 1995, in line with declining rates. The Fund's
maturity benchmark, the Donoghue All-Taxable Money Funds Average, varied from 41
days in September, 1994, to 35 days in January, and 54 days in September, 1995.
Short intersector yield spreads (e.g., one-month commercial paper versus
two-year Treasury note) narrowed from 188 basis points on September 30, 1994 to
10 basis point on September 30, 1995. Most other intersector spreads also
narrowed as the front end of the yield curve flattened during fiscal 1995.
Investment changes during the fiscal year included raising holdings of discount
callable Federal agencies to improve yield. U.S. Treasuries and commercial paper
were reduced. The high quality of the Fund was maintained with 93% of holdings
rated "AA" or better at year end.
Measuring Risk and Return
Short-Term Investment Fund vs
90-Day U.S. Treasury Bills
For 10-Year Period Ended 9/30/95
[GRAPH]
This chart compares the historical average annual total return and the risk (as
measured by the standard deviation) of the Short-Term Investment Fund and the
90-Day U.S. Treasury Bills for the ten-year period ended 9/30/95. T-Bills are a
representative market index for this Fund. See the Core Equity Fund chart (p. 4)
for a definition of standard deviation.
17
Short-Term Investment Fund vs
90-Day Treasury Bills
[GRAPH]
Growth of $10,000
-----------------
Short-Term 90-Day
Investment Treasury Bills
---------- --------------
1 year $10,517 $10,560
5 year $12,229 $12,481
10 year $17,550 $17,541
Cumulative Returns
------------------
1 year 5.17% 5.60%
5 year 22.29% 24.81%
10 year 75.50% 75.14%
Average Annual Returns
----------------------
1 year 5.17% 5.60%
5 year 4.11% 4.53%
10 year 5.79% 5.76%
Performance Results
For the one-year period ended September 30, 1995, the Short-Term Investment Fund
returned 5.17% versus the 5.35% for the Donoghue All-Taxable Money Funds Average
(an unmanaged index of money funds that reflects performance after fees and
expenses are taken out). The 90-Day U.S. Treasury Bill (an unmanaged index which
provides a representative proxy for the short-term fixed-income securities
market) returned 5.60% for this period.
The Fund's 5.79% annualized return for the ten-year period ended September
30, 1995 was slightly higher than the 5.75% per year return of the Donoghue
benchmark and the 5.76% annualized return of 90-Day Treasury Bills for the same
period. Both the Fund and the 90-Day Treasury Bills had extremely low risk
profiles, as measured by standard deviation, during this period (see chart on
page 17). Past performance is not a guarantee of future results.
Short-Term Investment Fund vs Donoghue All Taxable Money Funds Average
For periods ended September 30, 1995
-------------------------------------------------------------------------------
Annualized
----------------------
1 Year 5 Years 10 Years
------ ------- --------
SHORT-TERM INVESTMENT FUND1 5.17% 4.11% 5.79%
Donoghue All Taxable Money Funds Avg.2 5.35 4.31 5.75
1. All performance results shown are net of management fees and all related
investment expenses.
2. Reported by the Donoghue Money Fund Reporting Service. The performance
results reflect an unmanaged index, and are net, since expenses are
applicable.
-------------------------------------------------------------------------------
18
Dedicated Bond Fund
The Dedicated Bond Fund currently has no unitholders. However, since the Fund
remains open to investors, we are required to provide investment information
about the Fund.
The Fund may be used by employers to cover future retirement benefits for a
defined group of retirees by matching plan assets to liabilities. The Fund seeks
to achieve a target rate of return for each employer's portfolio (i.e., the life
of the retiree liability) that is competitive with the long-term, high-quality
bond yields at the time the employer allocates assets to the Fund. It provides a
predictable cash flow which, for this Fund, is more important than attempting to
maximize yield in the selection of fixed-income securities.
The following shows the historical performance of the Fund through April
1992 (when the last investor withdrew from the Fund), as compared to the Lehman
Brothers Government/Corporate Bond Index.
Dedicated Bond Fund vs Lehman Brothers
Government/Corporate Bond Index
[GRAPH]
Growth of $10,000*
------------------
Dedicated LB Gov't./Corp.
Bond Fund Bond Index
------------ ------------
1 year $11,080 $11,078
5 year $15,840 $15,860
Inception** $19,989 $19,877
Cumulative Returns*
-------------------
1 year 10.80% 10.78%
5 year 58.40% 58.60%
Inception** 99.90% 98.77%
Average Annual Returns*
-----------------------
1 year 10.80% 10.78%
5 year 9.64% 9.66%
Inception** 10.67% 10.58%
* All periods ended 4/30/92
** Inception 7/1/85
19
[This page is intentionally left blank]
20
COMBINED
FINANCIAL STATEMENTS
RSI Retirement Trust
Combined Statement of Assets and Liabilities September 30, 1995
--------------------------------------------------------------------------------
ASSETS:
Investments in securities at value (Cost
$471,068,343)--Note 2(A) $595,619,475
Cash 1,444,784
Receivable for investments sold 2,700,882
Receivable for units sold 385,820
Dividends and interest receivable 3,910,089
Other assets 112,127
Net gain on forward foreign currency contracts 189,208
-------------
604,362,385
LIABILITIES:
Payable for investments purchased $ 5,968,633
Payable for units redeemed 103,161
Payable to investment managers 274,406
Accrued expenses 512,954 6,859,154
----------- ------------
NET ASSETS--Note 5 $597,503,231
============
Combined Statement of Operations Year Ended September 30, 1995
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Interest $18,604,773
Dividends 5,689,869
-----------
Total Income $ 24,294,642
Expenses:
Investment managers' fees--Note 3(A) 2,842,060
Shareholder servicing fees and
expenses--Note 3(B) 2,392,316
Custodian fees and expenses 322,109
Legal and auditing fees 141,857
Consultant fees 75,273
Trustees' fees and expenses--Note 3(C) 165,144
Other 277,570
-----------
Total Expenses 6,216,329
Less fees paid indirectly--Note 4 (58,279)
Less expense reimbursement--Note 3(A) (102,392)
-----------
Net Expenses 6,055,658
------------
INVESTMENT INCOME--NET 18,238,984
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES--Note 4:
Net realized gain (loss) on:
Investments 19,920,828
Foreign currency transactions (114,853)
-----------
19,805,975
-----------
Unrealized appreciation (depreciation) on:
Investments 66,222,403
Foreign currency translation of other assets
and liabilities 204,579
-----------
66,426,982
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCIES 86,232,957
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $104,471,941
============
See Notes to Financial Statements
21
RSI Retirement Trust (Continued)
Combined Statement of Changes in Net Assets
--------------------------------------------------------
Year Ended Year Ended
9/30/95 9/30/94
---------- -----------
OPERATIONS
Investment income--net $ 18,238,984 $ 16,365,895
Net realized gain 19,805,975 18,184,703
Net realized appreciation (depreciation) 66,426,982 (34,441,978)
------------- ------------
Net increase in net assets resulting from
operations 104,471,941 108,620
------------- ------------
CAPITAL TRANSACTIONS--Note 5
Value of units sold 91,722,398 94,578,019
Value of units redeemed (108,767,059) (127,116,659)
------------ ------------
Net (decrease) in net assets resulting
from capital transactions (17,044,661) (32,538,640)
------------- -------------
Net increase (decrease) 87,427,280 (32,430,020)
NET ASSETS at beginning of year 510,075,951 542,505,971
------------- -------------
NET ASSETS at end of year $ 597,503,231 $ 510,075,951
============= =============
See Notes to Financial Statements
22
FINANCIAL STATEMENTS
OF INVESTMENT FUNDS
Core Equity Fund
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Shares Value
------ -----
COMMON STOCKS 89.0%
AEROSPACE 4.5%
127,800 Lockheed Martin Corp. $ 8,578,575
-----------
AUTOMOTIVE & PARTS 1.3%
36,400 Arvin Industries Inc. 778,050
33,281 Chrysler Corp. 1,763,893
-----------
2,541,943
-----------
BANKS 0.3%
3,500 Chase Manhattan Corp. 213,937
5,300 Citicorp 374,975
-----------
588,912
-----------
BASIC MATERIALS 2.8%
37,800 E.I. Du Pont de Nemours & Company 2,598,750
24,800 Phelps Dodge Corp. 1,553,100
19,300 Union Camp Corp. 1,112,163
-----------
5,264,013
-----------
BROADCASTING AND PUBLISHING 0.2%
22,550 Comcast Corp Special-CL A 451,000
-----------
BUILDING PRODUCTS 2.8%
87,000 Armstrong World Industries Inc. 4,828,500
23,000 Martin Marietta Materials 451,375
-----------
5,279,875
-----------
DATA PROCESSING SERVICES 3.4%
11,500 Cisco Systems Inc.* 793,500
2,600 FORE Systems Inc.* 95,550
142,800 Oracle Corp.* 5,479,950
-----------
6,369,000
-----------
DRUG AND HEALTH CARE 13.5%
181,000 Johnson & Johnson 13,416,625
176,900 Merck & Company Inc. 9,906,400
42,400 Pfizer Inc. 2,263,100
-----------
25,586,125
-----------
ELECTRONICS AND ELECTRICAL
EQUIPMENT 11.6%
51,600 Emerson Electric Company 3,689,400
108,200 General Electric Company 6,897,750
39,600 Hewlett Packard Corp. 3,301,650
131,700 Intel Corp. 7,918,463
-----------
21,807,263
-----------
ENERGY 8.7%
40,400 Amoco Corp. 2,590,650
143,000 Dresser Industries Inc. 3,414,124
46,000 Royal Dutch Petroleum Company 5,646,500
76,000 Texaco Inc. 4,911,500
-----------
16,562,774
-----------
See Notes to Financial Statements
23
Core Equity Fund (Continued)
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Shares Value
------ -----
ENGINEERING AND CONSTRUCTION 3.9%
132,900 Fluor Corp. $ 7,442,400
------------
FINANCE 7.1%
90,600 Federal National Mortgage Association 9,377,100
54,000 Morgan (J.P.) & Company Inc. 4,178,250
------------
13,555,350
------------
HOUSEHOLD PRODUCTS 3.8%
94,600 Procter & Gamble Company 7,284,200
------------
MACHINERY 1.4%
7,500 Cincinnati Milacron Inc. 236,250
66,600 Ingersoll-Rand Company 2,497,500
------------
2,733,750
------------
OFFICE AND BUSINESS EQUIPMENT 1.6%
23,100 Xerox Corp. 3,104,063
------------
OTHER 2.2%
43,500 Allied Signal Inc. 1,919,437
28,000 Philip Morris Companies Inc. 2,338,000
------------
4,257,437
------------
SOFTWARE PRODUCTS 3.9%
300 Broderbund Software Inc.* 22,837
120,000 Informix Corp.* 3,900,000
39,000 Microsoft Corp.* 3,529,500
------------
7,452,337
------------
TELECOMMUNICATIONS 16.0%
187,600 American Telephone & Telegraph Corp. 12,334,700
113,600 DSC Communications Corp.* 6,730,800
201,700 GTE Corp. 7,916,725
30,700 Motorola Inc. 2,344,713
21,000 Tellabs Inc.* 884,625
------------
30,211,563
------------
Total Common Stocks (Cost $79,113,387) $169,070,580
------------
*Denotes non-income producing security
Principal
Amount Value
--------- -----
SHORT-TERM INVESTMENTS 10.5%
REPURCHASE AGREEMENT
$19,986,261 Bear, Stearns & Co. Inc. Dated
9/29/1995 6.30% Due 10/2/1995
Collateralized by 707,000 United States
Treasury Strips Due 2/15/2009 and
121,070,000 United States Treasury
Bonds Due 8/15/2022 (Value $20,386,412) $ 19,986,261
------------
Total Investments (Cost $99,099,648) 99.5% $189,056,841
Other Assets, Less Liabilities 0.5% 884,758
----- ------------
Net Assets 100.0% $189,941,599
===== ============
See Notes to Financial Statements
24
Core Equity Fund
Statement of Assets and Liabilities September 30, 1995
--------------------------------------------------------------------------------
ASSETS:
Investments in securities at value
(Cost $99,099,648)--Note 2(A) $189,056,841
Receivable for investments sold 403,317
Receivable for units sold 195,444
Dividends and interest receivable 605,676
Other assets 27,320
------------
190,288,598
LIABILITIES:
Payable for investments purchased $ 177,240
Payable for units redeemed 5,082
Payable to investment manager 81,087
Accrued expenses 83,590 346,999
----------- ------------
NET ASSETS at value, applicable to 4,066,258
outstanding units of beneficial interest--Note 5 $189,941,599
============
NET ASSET VALUE, offering and redemption price per
unit ($189,941,599 divided by 4,066,258 units) $ 46.71
============
Statement of Operations Year Ended September 30, 1995
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Dividends $ 3,598,141
Interest 934,874
-----------
Total Income $ 4,533,015
Expenses:
Investment manager's fees--Note 3(A) 847,061
Shareholder servicing fees and expenses--
Note 3(B) 568,824
Custodian fees and expenses 39,000
Legal and auditing fees 21,199
Consultant fees 11,216
Trustees' fees and expenses--Note 3(C) 20,606
Other 60,508
-----------
Total Expenses 1,568,414
------------
INVESTMENT INCOME--NET 2,964,601
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS--Note 4:
Net realized gain on investments 2,812,350
Unrealized appreciation on investments 39,148,975
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 41,961,325
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 44,925,926
============
See Notes to Financial Statements
25
Core Equity Fund (Continued)
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
Year Ended Year Ended
9/30/95 9/30/94
------------ -------------
OPERATIONS:
Investment income--net $ 2,964,601 $ 2,199,351
Net realized gain on investments 2,812,350 5,746,741
Unrealized appreciation (depreciation)
on investments 39,148,975 (3,437,517)
------------ ------------
Net increase in net assets resulting
from operations 44,925,926 4,508,575
------------ ------------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 28,004,631 19,983,360
Value of units redeemed (24,532,607) (29,085,529)
------------ ------------
Net increase (decrease) in net assets
resulting from capital transactions 3,472,024 (9,102,169)
------------ ------------
Net increase (decrease) 48,397,950 (4,593,594)
NET ASSETS at beginning of year 141,543,649 146,137,243
------------ ------------
NET ASSETS at end of year $189,941,599 $141,543,649
============ ============
See Notes to Financial Statements
26
Value Equity Fund
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Shares Value
------ -----
COMMON STOCKS 88.8%
AEROSPACE 3.1%
16,600 Lockheed Martin Corp. $1,114,275
4,200 Northrop Grumman Corp. 255,675
----------
1,369,950
----------
AUTOMOBILES 2.9%
9,531 Chrysler Corp. 505,143
25,200 Ford Motor Company 784,350
----------
1,289,493
----------
BANKS 8.4%
23,400 Chase Manhattan Corp. 1,430,324
17,300 Citicorp 1,223,975
23,000 Mellon Bank Corp. 1,026,375
----------
3,680,674
----------
BUILDING PRODUCTS 1.3%
10,000 Armstrong World Industries Inc. 555,000
----------
CHEMICALS 1.8%
11,700 E.I. Du Pont De Nemours & Company 804,375
----------
CONSUMER GOODS AND SERVICES 0.9%
23,600 Maytag Corp. 413,000
----------
DRUG AND HEALTH CARE 7.2%
9,700 American Home Products Corp. 823,287
19,800 Bristol-Myers Squibb Company 1,442,925
15,500 Merck & Company Inc. 868,000
----------
3,134,212
----------
ELECTRONICS AND ELECTRICAL 3.7%
21,700 General Electric Company 1,383,375
3,000 Hewlett Packard Corp. 250,125
----------
1,633,500
----------
ENERGY 5.7%
6,300 Atlantic Richfield Company 676,463
11,100 Texaco Inc. 717,337
45,600 Ultramar Corp. 1,083,000
----------
2,476,800
----------
FINANCIAL SERVICES 3.5%
39,949 Bear Stearns Companies 858,904
6,500 Federal National Mortgage Association 672,750
----------
1,531,654
----------
FOOD SERVICES 0.3%
6,200 Fleming Companies Inc. 148,800
----------
FOREST PRODUCT AND PAPER 1.8%
13,300 Mead Corp. 779,713
----------
HOUSEHOLD PRODUCTS 0.7%
4,000 Procter & Gamble Company 308,000
----------
MACHINERY--GENERAL 4.7%
9,400 Deere & Company 764,924
25,200 GATX Corp. 1,304,100
----------
2,069,024
----------
MATERIALS & SERVICES 3.8%
14,000 Phelps Dodge Corp. 876,750
18,000 PHH Corp. 810,000
-----------
1,686,750
-----------
MEDICAL EQUIPMENT 2.6%
28,000 Baxter International Inc. 1,151,500
-----------
MERCHANDISING 4.9%
22,000 K Mart Corp. 318,999
20,000 Melville Corp. 690,000
16,300 Mercantile Stores Inc. 733,500
16,100 Wal-Mart Stores, Inc. 400,488
-----------
2,142,987
-----------
OFFICE AND BUSINESS EQUIPMENT 2.9%
9,300 Xerox Corp. 1,249,688
-----------
OTHER 6.8%
19,000 Allied Signal Inc. 838,374
7,800 American Brands Inc. 329,550
14,700 Philip Morris Companies Inc. 1,227,450
6,500 United Technologies Corp. 574,438
-----------
2,969,812
-----------
TELECOMMUNICATIONS 11.2%
22,000 American Telephone & Telegraph Corp. 1,446,500
18,700 GTE Corp. 733,975
17,100 Harris Corp. 938,362
20,700 Nynex Corp. 988,425
16,500 US West Inc. 777,563
-----------
4,884,825
-----------
UTILITIES 10.6%
29,100 Cinergy Corp. 811,163
25,000 Detroit Edison Company 806,250
27,600 NICOR Inc. 752,100
30,500 Peoples Energy Corp. 838,750
19,700 Texas Utilities Company 687,038
44,300 Washington Water Power Company 714,338
-----------
4,609,639
-----------
Total Common Stocks (Cost $33,430,439) $38,889,396
-----------
Principal
Amount
---------
SHORT TERM INVESTMENTS 11.3%
REPURCHASE AGREEMENT
$4,968,634 Bear, Stearns & Co. Inc. Dated
9/29/1995 6.30% Due 10/2/1995 Collateralized By
9,430,000 United States Treasury Strips Due
8/15/2005 (Value $5,068,625) $ 4,968,634
-----------
Total Investments (Cost $38,399,073) 100.1% $43,858,030
Liabilities, net of assets -0.1% (34,201)
----- -----------
Net Assets 100.0% $43,823,829
===== ===========
See Notes to Financial Statements
27
Value Equity Fund
Statement of Assets and Liabilities September 30, 1995
--------------------------------------------------------------------------------
ASSETS:
Investments in securities at value
(Cost $38,399,073)--Note 2 (A) $43,858,030
Receivable for investments sold 510,295
Receivable for units sold 27,353
Dividends and interest receivable 157,254
Other assets 9,864
-----------
44,562,796
LIABILITIES:
Payable for investments purchased $ 674,962
Payable for units redeemed 802
Payable to investment manager 16,369
Accrued expenses 46,834 738,967
---------- -----------
NET ASSETS at value, applicable to 1,343,011
outstanding units of beneficial interest--Note 5 $43,823,829
===========
NET ASSET VALUE, offering and redemption price per
unit ($43,823,829 divided by 1,343,011 units) $ 32.63
============
Statement of Operations Year Ended September 30, 1995
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Dividends $1,545,345
Interest 194,151
----------
Total Income $1,739,496
Expenses:
Investment manager's fees--Note 3(A) 212,145
Shareholder servicing fees and expenses--Note 3(B) 215,718
Custodian fees and expenses 18,255
Legal and auditing fees 19,074
Consultant fees 11,216
Trustees' fees and expenses--Note 3(C) 20,484
Insurance premiums 12,748
Other 15,080
----------
Total Expenses 524,720
Less fees paid indirectly--Note 4 (21,206)
----------
Net Expenses 503,514
----------
INVESTMENT INCOME--NET 1,235,982
REALIZED AND UNREALIZED GAIN ON INVESTMENTS--Note 4:
Net realized gain on investments 1,438,305
Unrealized appreciation on investments 4,775,796
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 6,214,101
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $7,450,083
==========
See Notes to Financial Statements
28
Value Equity Fund (Continued)
Statement of Changes in Net Assets
-------------------------------------------------------------------------------
Year Ended Year Ended
9/30/95 9/30/94
------- -------
OPERATIONS:
Investment income--net $ 1,235,982 $ 1,082,541
Net realized gain on investments 1,438,305 1,850,734
Unrealized appreciation (depreciation)
on investments 4,775,796 (2,236,034)
----------- -----------
Net increase in net assets resulting
from operations 7,450,083 697,241
----------- -----------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 7,261,555 5,263,921
Value of units redeemed (6,491,239) (8,462,033)
----------- -----------
Net increase (decrease) in net assets
resulting from capital transactions 770,316 (3,198,112)
----------- -----------
Net increase (decrease) 8,220,399 (2,500,871)
NET ASSETS at beginning of year 35,603,430 38,104,301
----------- -----------
NET ASSETS at end of year $43,823,829 $35,603,430
=========== ===========
See Notes to Financial Statements
29
Emerging Growth Equity Fund
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Shares Value
------ -----
COMMON STOCKS 97.0%
AIRLINES 0.7%
51,700 Mesa Airlines, Inc.* $ 523,463
----------
APPAREL AND TEXTILE 3.6%
12,215 Authentic Fitness Corp. 274,838
10,000 Kenneth Cole Productions-CL A* 351,250
10,435 Nautica Enterprises Inc.* 357,399
11,030 St. Johns Knits Inc. 537,713
10,760 Tommy Hilfiger Corp.* 349,700
20,000 Westpoint Stevens* 427,500
15,398 Wolverine World Wide 421,507
----------
2,719,907
----------
AUTOMOTIVE PRODUCTS 0.8%
6,525 Custom Chrome* 145,181
7,550 Edelbrock Corp.* 109,475
23,100 SPX Inc. 343,613
----------
598,269
----------
BROADCASTING AND PUBLISHING 1.4%
4,750 Lin Television Corp.* 144,875
3,000 Mecklermedia Corp.* 54,750
2,340 Renaissance Communications Corp.* 81,900
11,375 Saga Communications Inc.-CL A* 180,578
7,410 SFX Broadcasting Inc.-CL A* 207,480
3,800 Sinclair Broadcast Group Inc.* 105,450
8,525 Young Broadcasting Corp. CL A* 260,013
----------
1,035,046
----------
BUILDING & CONSTRUCTION 0.8%
2,935 Brady, W.H. Company-CL A 211,320
10,445 Fastenal Company 381,243
----------
592,563
----------
BUSINESS AND EQUIPMENT SERVICES 5.9%
900 ABR Information Services Inc.* 22,725
22,475 Accustaff Inc.* 825,956
6,200 Alternative Resources Corp.* 198,400
6,135 America Online Inc.* 421,781
11,100 American Business Information* 224,774
4,100 Analysts International Corp. 131,200
6,160 Cambridge Technology Partners Inc.* 311,080
13,238 Computer Horizons Corp. 264,750
8,673 Concord EFS, Inc.* 258,022
7,762 Fiserv Inc.* 224,128
5,127 Keane Inc.* 148,042
5,800 National Data Corp. 155,875
6,875 On Assignment Inc.* 173,594
7,050 Peak Technologies Group Inc.* 181,538
1,600 PMT Services Inc.* 38,200
5,700 Renaissance Solutions Inc.* 138,225
9,175 Robert Half International Inc.* 313,097
600 Romac International Inc.* 9,750
7,500 SOS Staffing Services* 61,874
10,110 Transaction Network Services* 264,124
----------
4,367,135
----------
COMMERCIAL SERVICES 1.2%
10,000 Landmark Graphics Corp.* 280,000
30,000 Nu-Kote Holdings Inc.* 652,500
----------
932,500
----------
COMMUNICATIONS/NETWORKING 0.8%
31,900 Microcom, Inc.* 598,125
----------
COMPUTER SYSTEMS 0.8%
12,900 Stormedia Inc.* 574,050
----------
CONSTRUCTION AND HOUSING 0.8%
26,400 American Building Company* 620,400
----------
CONSUMER GOODS AND SERVICES 7.1%
19,475 Benson Eyecare Corp.* 192,316
5,575 Blyth Industries Inc.* 260,631
6,330 Cannondale Corp.* 99,698
2,685 Catalina Marketing Corp.* 166,469
7,645 Department 56* 357,404
34,000 Health Plan Services Inc. 692,750
12,100 Loewen Group Inc. 499,125
20,000 Norrell Corp. 635,000
4,900 O'Charleys Inc.* 69,825
6,200 Rexall Sundown Inc.* 103,075
7,650 Scientific Games Holdings Corp.* 283,050
25,000 SITEL Corp.* 612,500
11,875 Sola International Inc.* 262,734
6,300 Speedway Motorsports Inc.* 163,800
10,260 Stewart Enterprises Inc. 366,795
22,300 Toy Biz, Inc.* 535,200
----------
5,300,372
----------
See Notes to Financial Statements
30
Emerging Growth Equity Fund
(Continued)
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Shares Value
------ -----
DATA PROCESSING AND SOFTWARE 1.1%
45,000 Auspex Systems Inc.* $ 703,125
7,000 Sequent Computer Systems Inc.* 139,125
-----------
842,250
-----------
DRUG AND HEALTH CARE 2.0%
27,000 Summit Care Corp.* 648,000
19,100 Wyle Electronics 857,113
-----------
1,505,113
-----------
DRUG AND MEDICAL SUPPLIES 0.8%
5,400 Daig Corp.* 126,900
9,000 Idexx Laboratories Inc.* 328,500
9,700 Igen Inc.* 61,838
4,240 Medisense Inc.* 101,760
-----------
618,998
-----------
ELECTRONICS AND ELECTRICAL 18.7%
19,000 AVX Corp.* 636,500
21,100 Checkpoint Systems Inc.* 556,513
6,500 Cognex Corp.* 308,750
10,432 Credence Systems Corp.* 375,534
800 Cyberoptics Corp.* 26,800
7,950 C.P. Clare Corp.* 202,725
3,800 Eltron International Inc.* 105,450
12,007 Exar Corp.* 420,245
7,000 Flextronics International Ltd.* 180,250
25,000 FSI International Inc.* 818,750
5,355 Harman International Industries Inc. 262,395
8,650 ITI Technologies Inc.* 233,550
45,000 Jabil Circuit, Inc.* 585,000
13,000 Kent Electronics* 570,375
42,450 LSI Industries Inc. 817,163
35,000 LTX Corp.* 437,500
5,675 Maxim Integrated Products Inc.* 419,950
30,000 Mentor Graphics Corp.* 618,750
900 Merix Corp.* 28,800
51,000 Microsemi Corp.* 599,250
21,500 Microtest Inc.* 424,625
12,500 Nellcor Puritan-Bennett Inc.* 612,500
7,575 Oak Industries Inc.* 228,197
36,800 Paradigm Technology Inc.* 1,113,200
2,200 Plasma & Materials Technologies Inc.* 37,400
60,000 Rasterops* 472,500
20,675 Sanmina Corp.* 987,231
37,000 Semtech Corp.* 1,026,750
5,400 Smart Flex Systems Inc.* 90,450
12,100 Telecom Semiconductor Inc.* 133,100
1,780 Ultratech Stepper Inc.* 74,760
5,504 Zebra Technologies Corp.* 293,088
5,800 Zilog Inc.* 241,425
-----------
13,939,476
-----------
FINANCIAL SERVICES 0.7%
19,800 Coast Savings Financial* $ 519,750
---------
FOOD AND BEVERAGES 0.1%
2,300 Ben & Jerry's Home-made Inc. CL A* 42,550
---------
FOOD AND SERVICES 0.8%
9,200 Apple South Inc. 208,150
11,700 Daka International Inc.* 381,712
---------
589,862
---------
INSURANCE 2.2%
12,500 CMAC Investments Corp. 657,813
12,010 HCC Insurance Holdings Inc.* 397,830
8,655 Reinsurance Group of America Inc. 305,089
5,335 Trenwick Group Inc. 282,755
---------
1,643,487
---------
LODGING--MOTELS 1.1%
25,400 Doubletree Corp.* 558,800
11,250 Studio Plus Hotels, Inc.* 258,750
---------
817,550
---------
MACHINE TOOLS 0.8%
18,900 Applied Power Inc. 604,800
---------
MACHINERY 4.2%
17,000 Gleason Corp. 556,750
17,000 Greenfield Industries 514,250
32,000 JLG Industries Inc. 1,408,000
26,400 Veeco Instruments Inc.* 679,799
---------
3,158,799
---------
MACHINERY--GENERAL 0.5%
11,853 Baldor Electric Company 297,807
3,200 Computational System Inc.* 51,199
---------
349,006
---------
MEDICAL 0.8%
23,660 Apria Healthcare Group, Inc.* 573,755
---------
MEDICAL PRODUCTS 1.2%
12,050 Avecor Cardiovascular Inc.* 162,675
3,300 Bio-Vascular Inc.* 59,400
5,850 ICU Medical Inc.* 76,781
6,025 Instent Inc.* 97,906
3,000 Lunar Corp.* 96,750
9,000 Minntech Corp. 144,000
4,400 Research Industries Corp.* 127,600
1,600 Target Therapeutics Inc.* 110,800
---------
875,912
---------
See Notes to Financial Statements
31
Emerging Growth Equity Fund
(Continued)
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Shares Value
------ -----
MEDICAL SERVICES 4.5%
1,900 Access Health Inc.* $ 53,199
8,880 Advantage Health Corp.* 301,920
6,400 American Homepatient Inc.* 160,000
6,500 Community Health Systems* 262,438
6,700 Compdent Corp.* 195,975
5,700 CRA Managed Care Inc.* 121,125
8,175 Genesis Health Ventures Inc.* 292,256
8,585 Health Management Associates* 275,793
15,725 Healthcare Services Group Inc.* 169,044
4,725 Healthwise Of America Inc.* 132,300
2,700 HPR Inc.* 60,750
5,900 Imnet Systems Inc.* 150,450
6,890 Lincare Holdings Inc.* 177,418
7,725 Living Centers Of America* 256,856
9,000 Owen Healthcare Inc.* 146,250
500 Pediatrix Medical Group Inc.* 10,188
5,025 Sierra Health Services* 125,625
3,600 United Dental Care Inc.* 108,000
5,542 Vencor Inc.* 177,344
6,875 Wellcare Management Group Inc.* 159,844
----------
3,336,775
----------
MEDICAL SUPPLIES 2.7%
30,900 I-Stat Corp.* 1,151,025
26,100 PHP Healthcare Corp.* 877,613
----------
2,028,638
----------
METALS 0.8%
35,000 Brockway Holdings* 595,000
----------
OIL & GAS 0.6%
45,000 Varco International Inc.* 455,625
----------
OTHER 7.3%
18,000 AHI Healthcare System Inc.* 279,000
40,000 Allied Waste Industries Inc.* 325,000
18,000 Altron Inc.* 562,500
50,000 Curative Technologies* 687,500
24,300 Diamond Multimedia* 771,525
45,000 Figgie International Inc. CL A* 590,625
40,000 Meridian Data Inc.* 395,000
21,400 Park Electrochemical 692,825
38,000 TCSI Corp.* 560,499
24,000 Telxon Corp. 564,000
----------
5,428,474
----------
PHARMACEUTICALS 0.7%
15,230 Dura Pharmaceuticals Inc.* 449,285
1,700 Gilead Sciences Inc.* 36,975
----------
486,260
----------
POLLUTION CONTROL 0.3%
5,150 United Waste Systems, Inc.* 215,013
----------
RESTAURANTS 0.4%
6,800 Quantum Restaurant Group Inc.* $ 90,950
13,300 Landry's Seafood Restaurants* 239,400
----------
330,350
----------
RETAIL TRADE 3.6%
37,200 Claires Stores Inc. 762,600
13,000 Comp USA, Inc.* 559,000
16,550 Hollywood Entertainment Corp.* 353,756
9,000 Moovies Inc.* 175,500
25,000 NetManage Inc.* 587,499
4,175 Sunglass Hut International* 208,750
1,100 West Marine Inc.* 34,100
----------
2,681,205
----------
SOFTWARE PRODUCTS 11.6%
6,000 Bisys Group Inc.* 150,000
34,300 Black Box Corp.* 617,400
3,500 Business Objects SA ADR* 148,750
20,000 Cognos Inc.* 680,000
6,200 Datalogix International Inc.* 88,350
4,030 Inso Corp.* 127,953
25,075 McAfee Associates Inc.* 1,291,363
7,450 Mercury Interactive Corp.* 204,875
9,600 Network Express Inc.* 151,200
1,600 Novadigm Inc.* 26,800
52,700 PC Docs Group International Inc.* 777,325
85,000 Physician Computer Network* 435,625
14,700 Platinum Software Corp.* 170,888
8,000 PRI Automation Inc.* 320,000
4,723 Project Software* 121,027
35,900 Quarterdeck Corp.* 695,563
20,000 Read-Rite Corp.* 730,000
3,225 Security Dynamics Tech Inc.* 153,188
3,200 Shiva Corp.* 196,000
10,050 Sierra On-Line Inc.* 391,950
3,318 Softkey International Inc.* 146,822
5,000 Spectrum Holobyte Inc.* 62,500
2,100 Spyglass Inc.* 96,075
25,800 Symantec Corp.* 773,999
3,300 Unison Software Inc.* 47,849
5,000 Vantive Corp.* 77,500
----------
8,683,002
----------
TELECOMMUNICATIONS 4.6%
9,300 Cai Wireless Systems Inc.* 95,325
8,503 Centennial Cellular Corp.* 163,683
13,122 Century Communications Corp. CL A* 132,860
4,220 Clear Channel Communications* 319,665
7,750 Colonial Data Technologies Corp.* 143,375
5,175 Commnet Cellular Inc.* 149,428
9,600 Evergreen Media Corp. CL A* 268,800
See Notes to Financial Statements
32
Emerging Growth Equity Fund
(Continued)
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Shares Value
------ -----
TELECOMMUNICATIONS (Continued)
14,820 EZ Communications Inc. CL A* $ 285,285
6,150 Heartland Wireless Communications Inc.* 155,287
4,200 Midcom Communication Inc.* 61,950
8,200 Pairgain Technologies Inc.* 282,899
4,050 P-Com Inc.* 177,188
200 Tel-Save Holdings Inc.* 3,050
33,000 Boston Technology Inc.* 490,875
10,000 Brite Voice Systems* 181,250
38,500 Unitech Industries Inc.* 529,375
-----------
3,440,295
-----------
TRANSPORTATION 1.0%
9,855 Expeditors Int'l Of Wash. Inc. 266,085
3,875 Fritz Companies Inc.* 284,813
7,075 U.S. Delivery Systems Inc.* 203,406
-----------
754,304
-----------
Total Common Stocks (Cost $54,505,120) $72,378,079
-----------
Principal
Amount Value
--------- -----
SHORT TERM INVESTMENTS 4.3%
REPURCHASE AGREEMENTS
$3,209,051 Bear, Stearns & Co. Inc. Dated 9/29/1995
6.30% Due 10/2/1995 Collateralized by
18,910,000 United States Treasury Bonds
Due 8/15/2022 and 255,000 United States
Treasury Strips Due 8/15/2005
(Value $3,274,988) $ 3,209,051
-----------
Total Investments (Cost $57,714,171) 101.3% $75,587,130
Liabilities, net of assets -1.3% (961,802)
----- -----------
Net Assets 100.0% $74,625,328
===== ===========
* Denotes non-income producing security
See Notes to Financial Statements
33
Emerging Growth Equity Fund (Continued)
Statement of Assets and Liabilities September 30, 1995
--------------------------------------------------------------------------------
ASSETS:
Investments in securities at value
(Cost $57,714,171)--Note 2 (A) $75,587,130
Receivable for investments sold 1,371,515
Receivable for units sold 61,428
Dividends and interest receivable 18,443
Other assets 10,258
-----------
77,048,774
LIABILITIES:
Payable for investments purchased $ 2,267,786
Payable for units redeemed 750
Payable to investment managers 62,518
Accrued expenses and other 92,392 2,423,446
----------- -----------
NET ASSETS at value, applicable to 1,419,334
outstanding units of beneficial interest--Note 5 $74,625,328
===========
NET ASSET VALUE, offering and redemption price
per unit ($74,625,328 divided by 1,419,334 units) $ 52.58
===========
Statement of Operations Year Ended September 30, 1995
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Dividends $ 93,438
Interest 197,240
-----------
Total Income $ 290,678
Expenses:
Investment managers' fees--Note 3(A) 712,451
Shareholder servicing fees and
expenses--Note 3(B) 335,804
Custodian fees and expenses 75,446
Legal and auditing fees 24,388
Consultant fees 11,216
Trustees' fees and expenses--Note 3(C) 41,222
Other 32,297
----------
Total Expenses 1,232,824
Less fees paid indirectly--Note 4 (17,073)
----------
Net Expenses 1,215,751
-----------
INVESTMENT (LOSS)--NET (925,073)
REALIZED GAIN AND UNREALIZED GAIN ON
INVESTMENTS--Note 4:
Net realized gain on investments 15,078,221
Unrealized appreciation on investments 9,142,586
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 24,220,807
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $23,295,734
===========
See Notes to Financial Statements
34
Emerging Growth Equity Fund (Continued)
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
Year Ended Year Ended
9/30/95 9/30/94
---------- ----------
OPERATIONS:
Investment (loss)-net $ (925,073) $ (818,504)
Net realized gain on investments 15,078,221 8,237,825
Unrealized appreciation (depreciation)
on investments 9,142,586 (6,633,162)
----------- ------------
Net increase in net assets resulting
from operations 23,295,734 786,159
----------- ------------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 11,643,470 9,029,724
Value of units redeemed (8,606,464) (18,168,143)
----------- ------------
Net increase (decrease) in net assets
resulting from capital transactions 3,037,006 (9,138,419)
----------- ------------
Net increase (decrease) 26,332,740 (8,352,260)
NET ASSETS at beginning of year 48,292,588 56,644,848
----------- ------------
NET ASSETS at end of year $74,625,328 $ 48,292,588
=========== ============
See Notes to Financial Statements
35
International Equity Fund
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Shares Value
------ -----
COMMON STOCKS 95.4%
AEROSPACE 0.4%
11,000 British Aerospace $ 127,439
-----------
AIRLINES 0.5%
21,900 British Airways 156,148
-----------
AUTOMOBILES 3.1%
1,800 Autobacs Seven Company 178,817
4,750 Autoliv AB 289,708
24,000 Shinmaywa Industries 205,578
12,000 Volvo AB Series B 294,490
-----------
968,593
-----------
BANKING 6.4%
17,000 Asahi Bank 186,115
25,000 Hang Seng Bank 206,136
15,000 HSBC Holdings 212,952
25,000 Kiyo Bank 123,418
22,500 Malayan Bank Berhad 181,934
23,000 Mitsubishi Trust & Banking 361,384
20,000 National Westminster 200,053
29,666 Overseas Chinese Bank 336,120
918 Shinhan Bank Corp Ac* 20,319
12,000 Sumitomo Trust & Banking 165,436
-----------
1,993,867
-----------
BEVERAGES & TOBACCO 1.1%
21,220 B.A.T. Industries 177,664
22,000 Grand Metropolitan 154,946
-----------
332,610
-----------
BROADCASTING & PUBLISHING 3.2%
29,000 British Sky Broadcast 175,331
34,600 Elsevier NV 445,285
24,300 Reuters Holdings 214,989
13,000 Toppan Printing Company 166,044
-----------
1,001,649
-----------
BUILDING MATERIALS 1.2%
38,000 Blue Circle Industries 185,239
33,500 Williams Holdings 174,967
-----------
360,206
-----------
BUSINESS & PUBLIC SERVICE 2.5%
4,000 Asatsu Inc. 143,945
26,000 Brambles Industries Ltd. 285,337
5,000 Secom Company 334,521
------------
763,803
-----------
CHEMICALS 3.1%
20,000 Asahi Chemical Industries 138,877
1,030 Bayer Ag 264,133
10,000 Kurita Water Inds 273,699
15,000 Nippon Shokubai Company 138,370
28,000 Teisan KK 153,271
-----------
968,350
-----------
COMPUTER SOFTWARE 1.1%
2,150 Sap AG Non Voting Prf 351,295
-----------
CONSTRUCTION & HOUSING 2.7%
8,000 Empresa Ica Soc ADR CV $ 92,000
6,000 Kandenko Company 81,501
24,000 Nishimatsu Construction 294,378
16,000 Sekisui House 199,496
25,000 United Engineers Bhd 160,325
-----------
827,700
-----------
CONSUMER GOODS & SERVICES 5.8%
1,559 Castorama Dubois 254,580
7 Castoramo Dubois--Bonus Rights* 113
2,750 Christian Dior 250,909
33,000 Dixons Group 180,713
30,000 Granada Group 301,504
15,500 Great Universal Stores 146,210
980 L'Oreal 250,681
4,900 Polygram NV 319,917
2,400 Sony Music Entertainment 110,453
-----------
1,815,080
-----------
ELECTRONICS & ELECTRICAL 8.2%
2,000 Advantest 118,806
415 BBC Brown Boveri 483,604
26,000 Canon Inc. 466,505
29,000 General Electric Corp. 145,727
30,000 Hitachi Ltd. 328,439
1,400 Legrand 221,827
20,000 Matsushita Electric Industries 308,165
27 Samsung Electronics GDR (1/2 Voting Shs) 3,069
58 Samsung Electronics GDR (1/2 Voting Shs) 144A 6,960
20,000 Sharp Corp. 281,809
3,600 Sony Corp. 187,575
-----------
2,552,486
-----------
ENERGY 0.2%
16,000 Petronas Gas* 55,765
-----------
ENERGY SOURCES 2.0%
38,200 British Petroleum 287,181
110,000 Monument Oil & Gas* 105,329
29,000 Showa Shell Sekiyu 228,711
-----------
621,221
-----------
FINANCE 1.6%
1,100 Cetelem 171,380
7,500 Grupo Financiero Bancomer GDS 47,775
5,555 Grupo Financiero Bancomer Series L 2,086
14,000 Nomura Securities Company Ltd. 275,321
-----------
496,562
-----------
FOOD & HOUSEHOLD 0.7%
10,000 Ezaki Glico Company 85,962
53,000 Morrison (W) Supermarket 131,696
-----------
217,658
-----------
See Notes to Financial Statements
36
International Equity Fund
(Continued)
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Shares Value
------ -----
FOREST PRODUCTS 1.5%
29,000 Settsu Corp.* $ 86,722
28,500 Stora Kopparbergs Series B 384,678
-----------
471,400
-----------
HEALTH 7.4%
365 Altana AG 215,468
11,650 Astra AB Series B 410,352
11,000 Glaxo Wellcome 133,532
22,000 Medeva 91,227
70 Roche Holding AG 497,107
18,000 Sankyo Company 412,373
25,500 Smithkline Beecham Units 253,857
240 Well Ag Non Vtg Prf 172,037
5,000 Yamanouchi Pharmaceutical 108,466
-----------
2,294,419
-----------
INDUSTRIAL COMPONENTS 0.4%
20,000 NSK 123,266
-----------
INSURANCE 2.6%
8,286 Aegon NV 301,187
44,000 Royal Insurance 245,825
24,000 Tokio Marine & Fire 260,318
-----------
807,330
-----------
MACHINERY & ENGINEERING 3.7%
51,000 Hitachi Zosen Corp. 250,222
26,000 Keppel Corp. 208,587
8,000 Matsushita Electric Works 83,529
12,000 Max Co. 248,154
46,000 Mitsubishi Heavy Industries 354,390
-----------
1,144,882
-----------
MANUFACTURING 0.5%
42,000 Vickers Plc 160,201
-----------
MATERIALS 1.1%
1,650 Cie De St. Gobain 201,617
50,000 NKK Corp 134,316
-----------
335,933
-----------
MERCHANDISING 3.8%
9,200 Ahold NV 347,113
120,000 Asda Group 196,571
12,000 Centros Com Pryca 240,130
7,000 Ito-Yokado Company 388,855
-----------
1,172,669
-----------
METALS 3.3%
69,000 Kawasaki Steel Corp.* 249,005
270,000 Mim Holdings Ltd. 387,203
4,000 Pohang Iron & Steel Sponsored ADR 131,500
40,625 Western Mining Corp. 265,541
-----------
1,033,249
-----------
MISCELLANEOUS 2.7%
551 Gehe AG 263,312
137 Gehe Rights Issue 4 For 1* 63,255
19,500 Genting Berhad 168,551
5,150 Securities AB Series 'B' 185,117
17,000 Severn Trent 168,700
-----------
848,935
-----------
MULTI INDUSTRY 2.6%
10,000 Grupo Carso Sa De ADR CV* 134,950
81,000 Hutchison Whampoa 438,967
36,200 Jardine Matheson 244,350
-----------
818,267
-----------
MULTI-HOLDING COMPANIES 1.4%
222,000 First Pacific Company 236,886
24,000 Swire Pacific 'A' 190,130
-----------
427,016
-----------
PUBLISHING 0.5%
60,000 Mirror Group 161,435
-----------
REAL ESTATE 4.7%
23,000 British Land Company 150,341
40,000 Cheung Kong Holdings 217,809
17,872 City Developments 110,679
101,000 Hong Kong Land Hld. 176,750
21,000 Mitsubishi Estate 236,293
26,000 Mitsui Fudosan Company 313,639
33,300 Sun Hung Kai Property 270,266
-----------
1,475,777
-----------
See Notes to Financial Statements
37
International Equity Fund
(Continued)
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Shares Value
------ -----
TELECOMMUNICATIONS 8.3%
48,300 British Telecom $ 302,720
40 DDI Corp. 331,683
18,760 Ericsson (Lm) Tel Series B Rights 1 For 1* 4,631
18,760 Ericsson (Lm) Tel Series B 463,095
7,080 Nokia AB--Series A 498,554
13,300 Securicor Group--'A' Non Vtg. 229,444
57,000 Technology Resources Inds* 148,714
256,000 Telecom Italia Mobile (spinoff)* 427,645
105,500 Telecom Italia 174,599
-----------
2,581,085
-----------
TEXTILES 0.5%
35,000 Teijin 168,528
-----------
TRANSPORTATION 1.9%
42 East Japan Railway 208,619
28,000 Nippon Yusen Kabush Iki Kaish 166,612
33,000 Tobu Railways Company 204,392
-----------
579,623
-----------
UTILITIES 3.8%
5,150 Emp Nac Electricid 265,061
53,000 Osaka Gas Company 181,594
3,300 Sanofi 211,705
24,000 Tenaga Nasional 91,774
48,000 Tokyo Gas Company 176,627
7,500 Veba AG 298,588
-----------
1,225,349
-----------
WHOLESALE INT'L TRADE 0.9%
25,000 Mitsubishi Corp. 281,302
-----------
Total Investments (Cost $24,815,229) 95.4% $29,721,098
Other Assets, Less Liabilities 4.6% 1,422,483
----- -----------
Net Assets 100.0% $31,143,581
===== ===========
*Denotes non-income producing security.
See Notes to Financial Statements
38
International Equity Fund (Continued)
Geographical Diversification September 30, 1995
--------------------------------------------------------------------------------
Percent of Net Assets
---------------------
Country Total
------- -----
Japan 33.8%
United Kingdom 16.6
Sweden 6.5
Hong Kong 6.4
Germany 5.2
France 5.0
Netherlands 4.5
Switzerland 3.1
Australia 3.0
Malaysia 2.6
Spain 2.5
Singapore 2.1
Italy 1.9
Finland 1.6
South Korea 0.5
Mexico 0.1
-----
Total Investments 95.4%
-----
Other Assets Less Liabilities 4.6
-----
Total 100.0%
=====
Statement of Assets and Liabilities September 30, 1995
--------------------------------------------------------------------------------
ASSETS:
Investments in securities at value
(Cost $24,815,229)--Note 2(A) $29,721,098
Cash 1,268,754
Receivable for investments sold 415,755
Receivable for units sold 7,635
Dividends and interest receivable 112,906
Other assets 9,022
Net gain on forward foreign currency contracts 189,208
-----------
31,724,378
LIABILITIES:
Payable for investments purchased $ 456,745
Payable to investment managers 44,387
Accrued expenses 79,665 580,797
--------- -----------
NET ASSETS at value, applicable to
773,740 outstanding
units of beneficial interest--Note 5 $31,143,581
===========
NET ASSETS VALUE, offering and
redemption price per unit
($31,143,581 divided by 773,740 units) $ 40.25
===========
See Notes to Financial Statements
39
International Equity Fund (Continued)
Statement of Operations Year Ended September 30, 1995
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Dividends $ 452,945
Interest 73,594
----------
Total Income $ 526,539
Expenses:
Investment managers' fees--Note 3(A) 228,701
Shareholder servicing fees and expenses
--Note 3(B) 167,532
Custodian fees and expenses 89,605
Legal and auditing fees 19,074
Consultant fees 11,216
Trustees' fees and expenses--Note 3(C) 21,014
Insurance premiums 14,518
Other 13,850
----------
Total Expenses 565,510
Less fees paid indirectly--Note 4 (20,000)
----------
Net Expenses 545,510
----------
INVESTMENT (LOSS)--NET (18,971)
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCIES--Note 4:
Net realized gain (loss) on:
Investments $ 532,575
Foreign currency transactions (114,853)
----------
417,722
----------
Unrealized appreciation on:
Investments 1,043,273
Foreign currency translation of other
assets and liabilities 204,579
----------
1,247,852
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCIES 1,665,574
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,646,603
==========
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
Year Ended Year Ended
9/30/95 9/30/94
------------- ------------
OPERATIONS:
Investment (loss)--net $ (18,971) $ (62,984)
Net realized gain 417,722 1,381,013
Net realized appreciation 1,247,852 878,065
------------ -----------
Net increase in net assets resulting
from operations 1,646,603 2,196,094
------------ -----------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 5,659,129 9,450,659
Value of units redeemed (4,833,851) (4,744,547)
------------ -----------
Net increase (decrease) in net assets
resulting from capital transactions 825,278 4,706,112
------------ -----------
Net increase 2,471,881 6,902,206
NET ASSETS at beginning of year 28,671,700 21,769,494
------------ -----------
NET ASSETS at end of year $ 31,143,581 $28,671,700
============ ===========
See Notes to Financial Statements
40
Actively Managed Bond Fund
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Principal
Amount Value
--------- -----
CORPORATE BONDS 6.2%
FINANCIAL SERVICES
$ 500,000 Beneficial Corp. Mtn
9.32% Due 8/4/1997 $ 526,280
1,125,000 Ford Motor Credit Mtn
10.35% Due 10/1/1997 1,203,608
500,000 Ford Motor Credit Mtn Deb
9.20% Due 5/7/1997 520,509
625,000 MBNA CR CARD 1991 A
8.25% Due 6/30/1998 624,856
----------
2,875,253
----------
FOOD AND SERVICES
2,000,000 General Mills Inc. Mtn
8.95% Due 12/18/2000 2,214,138
----------
OIL
1,000,000 Consolidated Natural Gas SF DB
8.625% Due 12/1/2011 1,068,475
----------
PUBLIC UTILITIES
2,285,000 Virginia Electric & Pwr Mtn
10.00% Due 3/22/1999 2,509,577
----------
Total Corporate Bonds (Cost $8,204,059) $ 8,667,443
-----------
UNITED STATES GOVERNMENT
AND AGENCY OBLIGATIONS 90.3%
$ 50,500 Collateralized Mortgage Obligation TR 1
0% Due 5/20/2017 $ 38,887
284,310 Collateralized Mortgage Obligation TR 29
0% Due 5/1/2013 219,413
193,265 Collateralized Mortgage Sec Corp.
7.00% Due 6/1/2006 192,237
1,000,000 Federal Farm Credit Medium Term Note
7.03% Due 2/19/2008 1,015,589
2,000,000 Federal Home Loan Bank Note
7.70% Due 7/12/2010 1,989,192
1,000,000 Federal Home Loan Bank Structured Note
5.75% Due 4/25/1997 1,000,403
250,000 Federal Home Loan Bank Structured Note
7.50% Due 6/16/2009 253,924
2,000,000 Federal Home Loan Mortgage Corp.
7.29% Due 4/7/2004 2,041,828
1,445,000 Federal Home Loan Mortgage Corp.
6.08% Due 10/29/2008 1,367,678
1,000,000 Federal Home Loan Mortgage Corp.
6.84% Due 3/2/2009 988,705
1,000,000 Federal Home Loan Mortgage Corp. CMO 1534G
6.00% Due 5/15/2022 948,799
2,500,000 Federal Home Loan Mortgage Corp. Note
7.05% Due 1/29/2003 2,500,000
1,000,000 Federal Home Loan Mortgage Corp. Note
6.375% Due 3/11/2003 977,717
1,133,498 Federal Home Loan Mortgage Corp. Pool #141001
7.75% Due 9/1/2016 1,137,010
452,885 Federal Home Loan Mortgage Corp. Pool #297625
8.50% Due 6/1/2017 469,293
714,696 Federal Home Loan Mortgage Corp. Pool #533624
8.50% Due 12/1/2007 737,751
583,174 Federal Home Loan Mortgage Corp. Pool #533625
8.50% Due 12/1/2007 601,305
2,000,000 Federal Home Loan Mortgage Corp. Remic Pool #1206-GC
7.00% Due 2/15/2020 1,989,198
2,000,000 Federal Home Loan Mortgage Corp. Remic (Gold) 1197G
6.75% Due 12/15/2006 1,983,498
2,000,000 Federal Home Loan Mortgage Corp. Remic (Gold) 1278G
7.00% Due 11/15/2020 2,008,138
3,000,000 Federal National Mortgage Association CMO 1993-32H
6.00% Due 3/25/2023 2,755,557
2,000,000 Federal National Mortgage Association CMO 1993-76PJ
6.00% Due 6/25/2008 1,856,898
1,000,000 Federal National Mortgage Association Medium Term Note
6.25% Due 1/14/2004 956,309
2,000,000 Federal National Mortgage Association Medium Term Note
7.14% Due 8/28/2002 2,019,318
1,500,000 Federal National Mortgage Association Medium Term Note
5.99% Due 10/27/2008 1,385,969
2,000,000 Federal National Mortgage Association Medium Term Note
7.46% Due 9/30/1999 2,055,478
1,000,000 Federal National Mortgage Association Medium Term Note
6.39% Due 12/9/2003 964,119
1,000,000 Federal National Mortgage Association Note
7.00% Due 8/12/2002 1,004,191
867,525 Federal National Mortgage Association Pass
Thru Pool #050987
6.50% Due 2/1/2009 855,544
1,297,287 Federal National Mortgage Association Pass
Thru Pool #239024
7.00% Due 10/1/2023 1,278,786
1,380,540 Federal National Mortgage Association Pass
Thru Pool #50966
7.00% Due 1/1/2024 1,360,852
1,024,715 Federal National Mortgage Association Pass
Thru Pool #87277
7.50% Due 4/1/2018 1,040,946
3,000,000 Federal National Mortgage Association Remic G92-40L
7.00% Due 7/25/2007 2,983,707
1,000,000 Federal National Mortgage Association Remic #1991-47H
7.50% Due 5/25/2006 1,019,229
556,050 Government National Mortgage Association Custom #152027
8.000% Due 10/20/2016 569,033
20,381 Government National Mortgage Association Custom #209105
8.000% Due 3/20/2017 20,850
415,915 Government National Mortgage Association Jumbo #000675
8.000% Due 12/20/2016 425,626
97,043 Government National Mortgage Association
Jumbo #000710
8.000% Due 2/20/2017 99,277
1,977,983 Government National Mortgage Association Pass
Thru Pool
8.00% Due 11/15/2024 2,032,059
See Notes to Financial Statements
41
Actively Managed Bond Fund
(Continued)
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Principal
Amount Value
-------- -----
UNITED STATES GOVERNMENT
AND AGENCY OBLIGATIONS (Continued)
$ 973,956 Government National Mortgage Association
Pass Thru Pool #377003
8.00% Due 8/15/2024 $ 1,000,583
954,953 Government National Mortgage Association
Pass Thru Pool #385850
8.00% Due 8/15/2024 981,061
2,754 Government National Mortgage Association Pool #002919
8.00% Due 2/15/2004 2,828
2,941 Government National Mortgage Association Pool #010855
8.00% Due 7/15/2006 3,027
42,717 Government National Mortgage Association Pool #011192
7.25% Due 4/15/2006 42,820
21,241 Government National Mortgage Association Pool #025811
9.00% Due 1/15/2009 22,469
99,182 Government National Mortgage Association Pool #05214
8.00% Due 7/15/2005 101,982
59,395 Government National Mortgage Association Pool #1350
6.50% Due 3/15/2002 58,950
271,505 Government National Mortgage Association Pool #169957
8.50% Due 7/15/2016 284,597
176,716 Government National Mortgage Association Pool #193256
8.00% Due 3/15/2017 182,220
421,251 Government National Mortgage Association Pool #196754
8.50% Due 2/15/2017 441,168
154,800 Government National Mortgage Association Pool #202887
8.00% Due 4/15/2017 159,621
99,653 Government National Mortgage Association Pool #205624
8.50% Due 3/15/2017 104,364
304,361 Government National Mortgage Association Pool #213606
8.00% Due 4/15/2017 313,841
17,567 Government National Mortgage Association Pool #216159
8.00% Due 4/15/2017 18,114
410,437 Government National Mortgage Association Pool #218150
8.00% Due 6/15/2017 423,222
16,546 Government National Mortgage Association Pool #247493
8.00% Due 7/15/2018 17,056
7,793 Government National Mortgage Association Pool #290013
8.00% Due 4/15/2020 8,025
266,036 Government National Mortgage Association Pool #290123
8.00% Due 6/15/2020 273,966
182,850 Government National Mortgage Association Pool #291195
8.00% Due 5/15/2020 188,301
938,132 Government National Mortgage Association Pool #364979
8.00% Due 4/15/2024 963,779
913,908 Government National Mortgage Association Pool #373826
8.00% Due 9/15/2023 939,378
690,371 Government National Mortgage Association
Sf Pool #226673
9.50% Due 7/15/2017 738,662
1,800,000 United States Strip Zero Coupon
0.0% Due 2/15/2006 933,802
10,020,000 United States Treasury Bonds
9.25% Due 2/15/2016 12,941,441
3,100,000 United States Treasury Notes
8.75% Due 8/15/2000 3,450,688
5,000,000 United States Treasury Notes
7.875% Due 11/15/1999 5,337,500
6,025,000 United States Treasury Notes
6.00% Due 11/30/1997 6,040,063
6,880,000 United States Treasury Notes
5.75% Due 10/31/1997 6,871,400
4,610,000 United States Treasury Notes
5.50% Due 9/30/1997 4,581,188
16,100,000 United States Treasury Notes
5.625% Due 8/31/1997 16,034,570
5,000,000 United States Treasury Stripped Interest Coupon
0.0% Due 5/15/2004 2,924,445
19,180,000 United States Treasury Stripped Interest Coupon
0.0% Due 2/15/2010 7,450,452
1,000,000 United States Treasury Stripped Interest Coupon
0.0% Due 2/15/1999 819,389
7,000,000 United States Treasury Stripped Interest Coupon
0.0% Due 2/15/2002 4,765,103
------------
Total United States Government and Agency
Obligations (Cost $123,508,998) $126,564,388
------------
SHORT TERM INVESTMENTS
UNITED STATES GOVERNMENT AND
AGENCY OBLIGATIONS 2.4%
$3,400,000 Federal Home Loan Bank Discount Note
6.30% Due 10/2/1995
(Cost $3,399,405) $ 3,399,405
------------
Total Investments (Cost $135,112,462) 98.9% $138,631,236
Other Assets, Less Liabilities 1.1% 1,495,758
----- ------------
Net Assets 100.0% $140,126,994
===== ============
See Notes to Financial Statements
42
Actively Managed Bond Fund (Continued)
Statement of Assets and Liabilities September 30, 1995
--------------------------------------------------------------------------------
ASSETS:
Investments in securities at value
(Cost $135,112,462)--Note 2 (A) $138,631,236
Cash 40,001
Receivable for units sold 24,885
Dividends and interest receivable 1,533,552
Other assets 25,032
------------
140,254,706
LIABILITIES:
Payable for units redeemed $ 421
Payable to investment manager 38,232
Accrued expenses 89,059 127,712
------- ------------
NET ASSETS at value, applicable to 4,736,926
outstanding units of beneficial
interest--Note 5 $140,126,994
============
NET ASSET VALUE, offering and redemption price
per unit ($140,126,994 divided by 4,736,926 units) $ 29.58
============
Statement of Operations Year Ended September 30, 1995
--------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Interest $ 9,156,372
-----------
Total Income $ 9,156,372
Expenses:
Investment manager's fees--Note 3(A) 455,073
Shareholder servicing fees and expenses
--Note 3(B) 520,061
Custodian fees and expenses 43,263
Legal and auditing fees 21,674
Consultant fees 11,216
Trustees' fees and expenses--Note 3(C) 20,606
Insurance premiums 45,205
Other 13,419
-----------
Total Expenses 1,130,517
-----------
INVESTMENT INCOME--NET 8,025,855
REALIZED (LOSS) AND UNREALIZED GAIN ON
INVESTMENTS--Note 4:
Net realized (loss) on investments (89,181)
Unrealized appreciation on investments 9,180,073
-----------
NET REALIZED (LOSS) AND UNREALIZED
GAIN ON INVESTMENTS 9,090,892
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $17,116,747
===========
See Notes to Financial Statements
43
Actively Managed Bond Fund (Continued)
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
Year Ended Year Ended
9/30/95 9/30/94
---------- ----------
OPERATIONS:
Investment income--net $ 8,025,855 $ 7,643,139
Net realized gain (loss) on investments (89,181) 297,408
Unrealized appreciation (depreciation)
on investments 9,180,073 (14,855,294)
------------ ------------
Net increase (decrease) in net assets
resulting from operations 17,116,747 (6,914,747)
------------ ------------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 15,769,704 23,323,590
Value of units redeemed (28,969,909) (27,116,813)
------------ ------------
Net (decrease) in net assets resulting
from capital transactions (13,200,205) (3,793,223)
------------ ------------
Net increase (decrease) 3,916,542 (10,707,970)
NET ASSETS at beginning of year 136,210,452 146,918,422
------------ ------------
NET ASSETS at end of year $140,126,994 $136,210,452
============ ============
See Notes to Financial Statements
44
Intermediate-Term Bond Fund
Statement of Investments September 30, 1995
--------------------------------------------------------------------------------
Principal
Amount Value
--------- -----
CORPORATE BONDS 6.0%
$2,500,000 General Telephone of California
6.75% Due 12/1/1997 $ 2,518,180
1,500,000 Pepsico Inc.
7.625% Due 12/18/1998 1,560,500
1,500,000 New Jersey Bell Telephone Debenture
4.875% Due 11/1/2000 1,394,817
-----------
Total Corporate Bonds (Cost $5,473,179) $ 5,473,497
-----------
MORTGAGE & ASSET BACKED SECURITIES 0.1%
$59 Veterans Administration & Federal Housing
Authority Mortgages 5.25% (Cost $52) $ 59
-----------
UNITED STATES GOVERNMENT
AND AGENCY OBLIGATIONS 90.1%
$2,000,000 Federal Home Loan Bank Note
6.27% Due 1/14/2004 $ 1,930,994
1,000,000 Federal Home Loan Bank Structured Note
5.75% Due 4/25/1997 1,000,403
1,000,000 Federal Home Loan Bank Structured Note
7.30% Due 4/11/2005 1,008,391
1,000,000 Federal Home Loan Mortgage Corp.
7.29% Due 4/7/2004 1,020,914
1,000,000 Federal Home Loan Mortgage Corp.
6.91% Due 6/20/2005 1,001,956
1,354,971 Federal Home Loan Mortgage Corp.
157 REMIC CMO
8.75% Due 7/15/2000 1,397,042
1,500,000 Federal Home Loan Mortgage Corp. CMO 1489G
5.85% Due 10/15/2006 1,452,059
1,000,000 Federal Home Loan Mortgage Corp. CMO 1534F
6.00% Due 4/15/2020 970,059
1,000,000 Federal Home Loan Mortgage Corp.
Gold REMIC 1331H
7.00% Due 11/15/2005 1,008,639
4,146,667 Federal Home Loan Mortgage Corp.
Gold REMIC 1278G
7.00% Due 11/15/2020 4,163,540
1,000,000 Federal Home Loan Mortgage Corp.
Gold REMIC Series 1324Vc
7.00% Due 6/15/2001 1,018,869
2,000,000 Federal Home Loan Mortgage Corp. Note
7.05% Due 1/29/2003 2,000,000
84,239 Federal Home Loan Mortgage Corp. Pool #140536
5.00% Due 10/1/1996 82,903
122,219 Federal Home Loan Mortgage Corp. Pool #309883
7.00% Due 9/1/1998 121,559
331,885 Federal Home Loan Mortgage Corp. Pool #251478
7.00% Due 12/1/1998 330,650
110,746 Federal Home Loan Mortgage Corp. Pool #200070
7.50% Due 4/1/2002 111,851
15,926 Federal Home Loan Mortgage Corp. Pool #297945
7.50% Due 5/1/1997 15,784
182,937 Federal Home Loan Mortgage Corp. Pool #200071
7.50% Due 5/1/2002 184,763
182,368 Federal Home Loan Mortgage Corp. Pool #212242
7.50% Due 7/1/2001 184,050
75,139 Federal Home Loan Mortgage Corp. Pool #212719
7.50% Due 8/1/2001 75,831
236,624 Federal Home Loan Mortgage Corp. Pool #213857
7.50% Due 11/1/2001 238,806
37,594 Federal Home Loan Mortgage Corp. Pool #214040
7.50% Due 12/1/2001 37,940
156,354 Federal Home Loan Mortgage Corp. Pool #320139
8.00% Due 9/1/2001 158,841
74,779 Federal Home Loan Mortgage Corp. Pool #200034
8.50% Due 5/1/2001 76,537
26,061 Federal Home Loan Mortgage Corp. Pool #200030
9.00% Due 3/1/2001 26,832
34,307 Federal Home Loan Mortgage Corp. Pool #200035
9.00% Due 5/1/2001 35,323
130,957 Federal Home Loan Mortgage Corp. Pool #200040
9.00% Due 6/1/2001 134,832
660,000 Federal Home Loan Mortgage Corp. Structured Note
4.90% Due 9/3/2003 652,452
1,275,483 Federal National Mortgage Association CMO 93-244A
0.0% Due 11/25/2023 1,175,407
2,000,000 Federal National Mortgage Association CMO 1993-162C
3.00% Due 8/25/2023 1,769,838
1,000,000 Federal National Mortgage Association CMO G93-3G
6.00% Due 6/25/2018 950,889
2,000,000 Federal National Mortgage Association CMO G93-27Ae
6.00% Due 11/25/2019 1,846,898
1,000,000 Federal National Mortgage Association CMO G93-8Pg
6.50% Due 7/25/2018 973,059
959,145 Federal National Mortgage Association CMO 1991-19G
7.00% Due 2/25/2019 957,782
1,500,000 Federal National Mortgage Association
Medium Term Note
6.24% Due 1/28/2004 1,446,149
1,000,000 Federal National Mortgage Association
Medium Term Note
6.25% Due 1/14/2004 956,309
2,000,000 Federal National Mortgage Association
Medium Term Note
6.38% Due 6/25/2003 1,955,726
2,000,000 Federal National Mortgage Association
Medium Term Note
7.46% Due 9/30/1999 2,055,478
1,000,000 Federal National Mortgage Association Note
7.00% Due 8/12/2002 1,004,191
867,525 Federal National Mortgage Association Pass Thru
Pool #050987
6.50% Due 2/1/2009 855,544
569,286 Federal National Mortgage Association Pool #87277
7.50% Due 4/1/2018 578,303
See Notes to Financial Statements
45
Intermediate-Term Bond Fund (Continued)
Statement of Investments September 30, 1995
-------------------------------------------------------------------------------
Principal
Amount Value
--------- -----
UNITED STATES GOVERNMENT
AND AGENCY OBLIGATIONS (Continued)
$ 196,582 Federal National Mortgage Association Pool #46609
8.00% Due 5/1/2002 $ 202,112
147,387 Federal National Mortgage Association Pool #48103
8.00% Due 5/1/2002 151,534
210,353 Federal National Mortgage Association Pool #47932
8.00% Due 5/1/2002 216,272
175,787 Federal National Mortgage Association Pool #47402
8.00% Due 5/1/2002 180,733
27,294 Federal National Mortgage Association Pool #47137
8.00% Due 5/1/2002 28,062
316,351 Federal National Mortgage Association Pool #46872
8.00% Due 5/1/2002 324,760
54,040 Federal National Mortgage Association Pool #7242
8.50% Due 7/1/2001 55,663
14,543 Federal National Mortgage Association Pool #29658
8.50% Due 7/1/2001 14,979
11,860 Federal National Mortgage Association Pool #31393
8.50% Due 8/1/2001 12,216
5,192 Federal National Mortgage Association Pool #31435
8.50% Due 8/1/2001 5,348
112,643 Federal National Mortgage Association Pool #30409
8.50% Due 9/1/2001 116,027
2,467 Federal National Mortgage Association Pool #24179
9.00% Due 4/1/2001 2,571
30,602 Federal National Mortgage Association Pool #26707
9.00% Due 5/1/2001 31,884
59,032 Federal National Mortgage Association Pool #26607
9.00% Due 5/1/2001 61,507
237,076 Federal National Mortgage Association Pool #28785
9.00% Due 6/1/2001 247,016
123,643 Federal National Mortgage Association Pool #28645
9.00% Due 6/1/2001 128,828
52,297 Federal National Mortgage Association Pool #29470
9.00% Due 7/1/2001 54,490
1,674,157 Federal National Mortgage Association Pool #82407
9.00% Due 3/1/2004 1,752,555
1,500,000 Federal National Mortgage Association REMIC 1992-9G
7.00% Due 7/25/2005 1,508,954
10,000 United States Treasury Bonds
3.50% Due 11/15/1998 9,747
9,875,000 United States Treasury Notes
8.875% Due 11/15/1997 10,458,227
10,000,000 United States Treasury Notes
7.875% Due 11/15/1999 10,675,000
500,000 United States Treasury Notes
3.875% Due 10/31/1995 499,375
3,000,000 United States Treasury Stripped Coupons
0.0% Due 2/15/2000 2,315,067
4,000,000 United States Treasury Stripped Coupons
0.0% Due 8/15/2002 2,641,956
4,000,000 United States Treasury Stripped Coupons
0.0% Due 2/15/1999 3,277,556
11,000,000 United States Treasury Stripped Coupons
0.0% Due 2/15/1998 9,588,578
-----------
Total United States Government and Agency
Obligations (Cost $78,698,412) $81,528,410
-----------
SHORT TERM INVESTMENTS 2.4%
$2,200,000 Federal Home Loan Bank Discounted Note
6.30% Due 10/02/1995
(Cost $2,199,615) $ 2,199,615
-----------
Total Investments (Cost $86,371,258) 98.6% $89,201,581
Other assets, less liabilities 1.4% 1,280,408
----- -----------
Net Assets 100.0% $90,481,989
===== ===========
See Notes to Financial Statements
46
Intermediate-Term Bond Fund (Continued)
Statement of Assets and Liabilities September 30, 1995
--------------------------------------------------------------------------------
ASSETS:
Investments in securities at value
(Cost $86,371,258)--Note 2(A) $89,201,581
Cash 73,917
Receivable for units sold 22,884
Dividends and interest receivable 1,267,029
Other assets 16,477
-----------
90,581,888
LIABILITIES:
Payable for units redeemed $ 90
Payable to investment managers 26,147
Accrued expenses 73,662 99,899
------- -----------
NET ASSETS at value, applicable to 3,230,899
outstanding units of beneficial interest--Note 5 $90,481,989
===========
NET ASSET VALUE, offering and redemption price
per unit ($90,481,989 divided by 3,230,899 units) $ 28.01
===========
Statement of Operations Year Ended September 30, 1995
-------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Interest $6,378,430
----------
Total Income $ 6,378,430
Expenses:
Investment manager's fees--Note 3(A) 313,881
Shareholder servicing fees and
expenses--Note 3(B) 413,881
Custodian fees and expenses 35,970
Legal and auditing fees 19,074
Consultant fees 11,216
Trustees' fees and expenses--Note 3(C) 20,606
Insurance premiums 31,094
Other 13,435
----------
Total Expenses 859,157
-----------
INVESTMENT INCOME--NET 5,519,273
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS--Note 4:
Net realized gain on investments 148,558
Unrealized appreciation on investments 2,902,615
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 3,051,173
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,570,446
===========
See Notes to Financial Statements
47
Intermediate-Term Bond Fund (Continued)
Statements of Changes in Net Assets
-------------------------------------------------------------------------------
Year Ended Year Ended
9/30/95 9/30/94
----------- -----------
OPERATIONS:
Investment income-net $ 5,519,273 $ 5,400,952
Net realized gain on investments 148,558 671,412
Unrealized (depreciation) on investments 2,902,615 (8,152,248)
----------- -----------
Net increase (decrease) in net assets
resulting from operations 8,570,446 (2,079,884)
----------- -----------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 11,398,598 16,644,193
Value of units redeemed (19,266,677) (22,599,674)
----------- -----------
Net (decrease) in net assets resulting
from capital transactions (7,868,079) (5,955,481)
----------- -----------
Net increase (decrease) 702,367 (8,035,365)
NET ASSETS at beginning of year 89,779,622 97,814,987
----------- -----------
NET ASSETS at end of year $90,481,989 $89,779,622
=========== ===========
See Notes to Financial Statements
48
Short-Term Investment Fund
Statement of Investments September 30, 1995
-------------------------------------------------------------------------------
Principal
Amount Value
--------- -----
UNITED STATES GOVERNMENT AND AGENCY
OBLIGATIONS 91.9%
$ 1,000,000 Federal Farm Credit Bank
5.70% Due 1/2/1996 $ 999,531
1,000,000 Federal Home Loan Bank
6.12% Due 7/24/1997 996,683
565,000 Federal Home Loan Bank
4.36% Due 4/25/1996 559,976
350,000 Federal Home Loan Bank
4.50% Due 9/23/1996 345,441
350,000 Federal Home Loan Bank
6.16% Due 7/25/1997 349,074
250,000 Federal Home Loan Bank
6.29% Due 8/22/1997 249,847
250,000 Federal Home Loan Bank
6.20% Due 8/1/1997 249,461
200,000 Federal Home Loan Bank
4.80% Due 7/12/1996 198,396
195,000 Federal Home Loan Bank
4.125% Due 1/26/1996 194,127
100,000 Federal Home Loan Bank
4.55% Due 5/28/1996 99,150
250,000 Federal Home Loan Bank
5.67% Due 10/30/1995 249,953
13,800,000 Federal Home Loan Bank Discount Note
6.30% Due 10/2/1995 13,797,585
750,000 Federal Home Loan Bank Discount Note
6.22% Due 11/17/1995 743,910
500,000 Federal Home Loan Bank Discount Note
6.18% Due 11/6/1995 496,910
300,000 Federal Home Loan Bank Note
5.375% Due 11/27/1995 299,764
1,350,000 Federal Home Loan Bank Note
5.00% Due 10/25/1995 1,349,157
500,000 Federal Home Loan Bank (Callable Step-Up)
5.75% Due 5/3/1996 500,338
600,000 Federal Home Loan Mortgage Corp.
4.40% Due 3/11/1996 595,777
200,000 Federal Home Loan Mortgage Corp.
3.94% Due 10/18/1995 199,789
1,000,000 Federal National Mortgage Association Discount Note
5.61% Due 11/6/1995 994,295
555,000 Federal National Mortgage Association Note
5.11% Due 11/13/1995 554,464
1,100,000 United States Treasury Notes
3.875% Due 10/31/1995 1,099,764
-----------
Total United States Government and Agency Obligations
(Cost $25,116,171) $25,123,392
-----------
COMMERCIAL PAPER 9.1%
$ 1,000,000 Coca-Cola Company
5.70% Due 11/3/1995 $ 994,775
1,000,000 General Electric Capital Corp.
5.70% Due 10/5/1995 999,367
500,000 Merrill Lynch
5.73% Due 11/8/1995 496,976
-----------
Total Commercial Paper
(Cost $2,491,118) $ 2,491,118
-----------
CORPORATE NOTES 7.1%
$ 1,000,000 Dow Chemical Company
4.625% Due 10/15/1995 $ 999,365
100,000 Dow Chemical Company
4.625% Due 10/15/1995 99,946
850,000 Merrill Lynch
5.875% Due 12/1/1995 849,738
-----------
Total Corporate Notes
(Cost $1,949,213) $ 1,949,049
-----------
Total Investments
(Cost $29,556,502) 108.1% $29,563,559
Liabilities, net of assets -8.1% (2,203,648)
----- -----------
Net Assets 100.0% $27,359,911
===== ===========
See Notes to Financial Statements
49
Short-Term Investment Fund (Continued)
Statement of Assets and Liabilities September 30, 1995
-------------------------------------------------------------------------------
ASSETS:
Investments in securities at value
(Cost $29,556,502)--Note 2 (A) $29,563,559
Cash 62,112
Receivable for units sold 46,191
Dividends and interest receivable 215,229
Other assets 14,154
-----------
29,901,245
LIABILITIES:
Payable for investments purchased $2,391,900
Payable for units redeemed 96,016
Payable to investment manager 5,666
Accrued expenses 47,752 2,541,334
---------- -----------
NET ASSETS at value, applicable to 1,416,638
outstanding units of beneficial
interest--Note 5 $27,359,911
===========
NET ASSET VALUE, offering and redemption price
per unit ($27,359,911
divided by 1,416,638 units) $ 19.31
===========
Statement of Operations Year Ended September 30, 1995
-------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
Interest $1,670,112
----------
Total Income $ 1,670,112
Expenses:
Investment manager's fees--Note 3(A) 72,748
Shareholder servicing fees and expenses--
Note 3(B) 170,496
Custodian fees and expenses 20,570
Legal and auditing fees 17,374
Consultant fees 7,977
Trustees' fees and expenses--Note 3(C) 20,606
Insurance premiums 12,008
Other 13,408
----------
Total Expenses 335,187
Less expense reimbursement--Note 3(A) (102,392)
----------
Net Expenses 232,795
-----------
INVESTMENT INCOME--NET 1,437,317
REALIZED AND UNREALIZED GAIN ON INVESTMENTS--Note 4:
Realized gain on investments --
Unrealized appreciation on investments 29,085
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 29,085
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,466,402
===========
See Notes to Financial Statements
50
Short-Term Investment Fund (Continued)
Statement of Changes in Net Assets
------------------------------------------------------------------------------
Year Ended Year Ended
9/30/95 9/30/94
---------- ----------
OPERATIONS:
Investment income--net $ 1,437,317 $ 921,400
Net realized gain (loss) on investments -- (430)
Unrealized appreciation (depreciation)
on investments 29,085 (5,788)
----------- -----------
Net increase in net assets resulting
from operations 1,466,402 915,182
----------- -----------
CAPITAL TRANSACTIONS--Note 5:
Value of units sold 11,985,311 10,882,572
Value of units redeemed (16,066,312) (16,939,920)
----------- -----------
Net (decrease) in net assets resulting
from capital transactions (4,081,001) (6,057,348)
----------- -----------
Net (decrease) (2,614,599) (5,142,166)
NET ASSETS at beginning of year 29,974,510 35,116,676
----------- -----------
NET ASSETS at end of year $27,359,911 $29,974,510
=========== ===========
See Notes to Financial Statements
51
NOTES TO FINANCIAL STATEMENTS
NOTE 1--GENERAL
Participation in RSI Retirement Trust ("RSI") is limited to IRA's and
trusts established by eligible corporate employers, which includes banks,
savings banks, credit unions, savings and loan associations and other
organizations determined by the Trustees of RSI to have business interests in
common with organizations participating in RSI. Such trusts are exempt from
taxation under Section 501(a) of the Internal Revenue Code ("Code") and have
been established under pension or profit sharing plans which are qualified under
Section 401 of the Code ("Participating Plans").
In order to provide investment products to Participating Plans, RSI
operates, pursuant to an Agreement and Declaration of Trust amended and restated
effective as of August 1, 1990 ("Trust Agreement"), as a series fund currently
issuing as of September 30, 1995 seven classes of units of beneficial interest:
Core Equity Fund, Emerging Growth Equity Fund, Value Equity Fund, International
Equity Fund, Actively Managed Bond Fund, Intermediate-Term Bond Fund and
Short-Term Investment Fund ("Investment Funds"). The Trust Agreement was amended
in 1984 to provide for the operation of RSI as an open-end management investment
company under the Investment Company Act of 1940 ("Act"). Retirement System
Distributors Inc. ("Distributors") acts as the distributor of the Investment
Funds' units of beneficial interest. The Distributor is a wholly owned
subsidiary of Retirement System Group Inc ("Group").
On April 24, 1992, the remaining unitholders of RSI's Dedicated Bond Fund
sold their units and the proceeds were used to purchase units in other RSI
fixed-income funds. The Dedicated Bond Fund has been inactive subsequent to this
date, but may be reactivated again, should a number of clients elect to
"immunize" their retiree liabilities. The financial highlights of the Dedicated
Bond Fund are presented for each of the two years in the period ended September
30, 1991 and for the period from October 1, 1991 through April 24, 1992, the
date on which all of its units were redeemed.
The financial statements of the Investment Funds are presented on a
combined and individual basis. The combined financial statements should be read
in conjunction with the individual financial statements.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
(A) Securities Valuation: Except for debt securities with remaining maturities
of 60 days or less, investments for which market prices are available are
valued as follows:
(1) each listed security is valued at its closing price obtained from the
respective exchange on which the security is listed, or, if there were
no sales on that day, at its last reported closing or bid price. For
international securities other than those traded on Far East markets,
the last recorded prices at the close of business on the New York
Stock Exchange are used to price the holdings. For securities traded
in the Far East markets, the closing prices are used to value the
securities.
(2) each unlisted security quoted on the NASDAQ is valued at the last
current bid price obtained from the NASDAQ;
52
(3) United States Government and agency obligations and certain other debt
obligations are valued based upon bid quotations from various market
makers for identical or similar obligations.
(4) Mortgage-backed securities and asset-backed securities are valued with
a cash flow model based on both the pre-payment assumptions (Public
Securities Association median) and the price-yield spreads over
comparable United States Treasury Securities.
(5) short-term money market instruments (such as certificates of deposit,
bankers' acceptances and commercial paper) are valued by bid
quotations or by reference to bid quotations of available yields for
similar instruments of issuers with similar credit rating.
Debt securities with remaining maturities of 60 days or less are valued on
the basis of amortized cost. In the absence of an ascertainable market value,
investments are valued at their fair value as determined by the officers of RSI
using methods and procedures reviewed and approved by RSI's Trustees.
Investments and other assets and liabilities denominated in foreign
currencies are translated to U.S. dollars at the prevailing rates of exchange.
It is not practical to isolate that portion of income arising from changes in
the exchange rates from the portion arising from changes in the market prices of
securities.
(B) Securities Transactions and Investment Income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on a specific cost basis. Dividend income is
recognized on the ex-dividend date or when the dividend information is
known; interest income, including, where applicable, amortization of
discount and premium on investments and zero coupon bonds, is recognized on
an accrual basis.
The Investment Funds may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Investment Funds' Manager,
subject to the sellers' agreement to repurchase and the Funds' agreement to
resell such securities at a mutually agreed upon price. Securities purchased
subject to repurchase agreements are deposited with the Investment Funds'
custodian and, pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. If the value of the underlying securities falls
below the value of the repurchase price plus accrued interest, the Investment
Funds will require the seller to deposit additional collateral by the next
business day. If the request for additional collateral is not met, or the seller
defaults on its repurchase obligation, the Investment Funds maintain the right
to sell the underlying securities at market value and may claim any resulting
loss against the seller.
(C) Dividends to Unitholders: RSI does not normally declare nor pay dividends
on its net investment income or capital gains.
(D) Federal Income Taxes: RSI has received a determination letter from the
Internal Revenue Service stating that it is exempt from taxation under
Section 501(a) of the Internal Revenue Code with respect to funds derived
from Participating Plans which are pension or profit sharing trusts
maintained in conformity with Section 401 of the Code.
53
(E) Other: RSI accounts separately for the assets, liabilities and operations
of each Investment Fund. Expenses directly attributed to each Investment
Fund are charged to that Investment Fund's operations; expenses which are
applicable to all Investment Funds are allocated among them.
Administrative expenses incurred by RSI relating to the administration of
Plans of Participation are charged to Full Participating Employers (as defined
in the Trust Agreement) and are not included in the operation of the Investment
Funds.
The Investment Funds may enter into financial futures contracts which
require initial margin deposits of cash or U.S. Government securities equal to
approximately 10% of the value of the contract. During the period the financial
futures are open, changes in the value of the contracts are recognized by
"marking to market" on a daily basis to reflect the market value of the
contracts at the close of each day's trading. Accordingly, variation margin
payments are made or received to reflect daily unrealized gains or losses. The
Investment Fund is exposed to market risk as a result of movements in
securities, values and interest rates.
NOTE 3--INVESTMENT MANAGERS' FEES AND OTHER TRANSACTIONS WITH AFFILIATES
(A) Retirement System Investors Inc. ("Investors") is the Investment Advisor
for each Investment Fund. Investors has retained sub-advisors to manage the
International Equity Fund and the Emerging Growth Equity Fund. Investors
acts as Investment Manager to the remaining Trust Investment Funds, and in
the case of all Investment Funds, exercises general oversight with respect
to the portfolio management, including reporting of manager performance to
the Trustees and Investment Committee, compliance matters, sub-advisory
portfolio analysis, and presentations to unitholders. Prior to April 1,
1995, NFJ Investment Group was the sub-advisor of the Value Equity Fund.
Fees incurred by Investors pursuant to the provisions of its investment
management contracts are payable monthly to Investors and quarterly to all
sub-advisors and are computed based on the value of the net assets of each
Investment Fund determined on a monthly or quarterly bases as appropriate at the
rates listed in the following table.
· Enlarge/Download Table
Investment Fund Investment Manager Fee
--------------- ------------------ ---
Core Equity Fund Retirement System Investors Inc. .60% on first $50 million
.50% on next $150 million, and
.40% over $200 million
Value Equity Fund Retirement System Investors Inc. .60% on first $10 million,
(NFJ Investment Group, Inc. was .50% on next $10 million,
Sub-adviser through March 31, 1995) .40% on next $20 million,
.30% on next $20 million,
.20% on next $40 million,
.15% on next $50 million, and
.10% over $150 million
54
· Enlarge/Download Table
Investment Fund Investment Manager Fee
--------------- ------------------ ---
Emerging Growth Friess Associates, Inc. (Sub-adviser) 1.00%
Equity Fund The Putnam Advisory Company, Inc. 1.00% on first $25 million,
(Sub-adviser) and .75% over $25 million
International Morgan Grenfell Investment .60% on first $50 million,
Equity Fund Services Limited (Sub-adviser) and .50% over $50 million
Actively Managed Retirement System Investors Inc. .40% on first $50 million,
Bond Fund .30% on next $100 million,
and .20% over $150 million
Intermediate-Term Retirement System Investors Inc. .40% on first $50 million,
Bond Fund .30% on next $100 million,
and .20% over $150 million
Short-Term Retirement System Investors Inc. .25% on first $50 million,
Investment Fund and .20% over $50 million
RSI's investment management agreement with Investors provides for RSI to
receive a management fee of 0.20% per annum of the average daily net assets
of the Investment Funds that employ a sub-advisor. For the period ended
September 30, 1995, Investors has voluntarily waived a portion of its
investment manager's fee from the Short-Term Investment Fund amounting to
$102,392, to limit the Funds annual expenses to 0.80% of average net
assets.
(B) Shareholder servicing fees and expenses for the period ended September 30,
1995 consist of fees paid to Retirement System Consultants Inc., (a
subsidiary of Group) under a contract for providing administrative services
for the Investment Funds. The fee arrangement applicable for each of the
investment funds is as follows:
Average Net Assets Fee
------------------ ---
First $25 million .60%
Next $25 million .50%
Next $25 million .40%
Next $25 million .30%
Over $100 million .20%
(C) Each Trustee who is not an officer of RSI receives an annual fee of $7,000
and a fee of $800 per meeting attended, except that such fee is $400 for a
telephonic meeting. (Committee chairs receive an additional $100 per
meeting.) Such Trustees also participate in a deferred compensation plan
which permits each Trustee to defer payment of a portion of their fees. A
Trustee and several officers of RSI are also officers of Group and its
subsidiaries.
55
NOTE 4--SECURITIES TRANSACTIONS
The following summarizes the securities transactions, other than short-term
securities, by the various Investment Funds for the period ended September 30,
1995:
Purchases Sales
------------ ------------
Core Equity Fund $ 11,376,271 $ 17,149,263
Value Equity Fund 24,636,733 23,539,329
Emerging Growth Equity Fund 97,321,566 94,812,129
International Equity Fund 15,028,894 13,889,715
Actively Managed Bond Fund 24,085,788 23,633,671
Intermediate-Term Bond Fund 17,104,162 13,304,577
------------ ------------
Total $189,553,414 $186,328,684
============ ============
Net unrealized appreciation (depreciation) consisting of gross unrealized
appreciation and gross unrealized depreciation at September 30, 1995 for each of
the Investment Funds was as follows:
Net Unrealized Gross Gross
Appreciation Unrealized Unrealized
(Depreciation) Appreciation Depreciation
-------------- ------------ ------------
Core Equity Fund $ 89,957,193 $ 90,513,115 $ (555,922)
Value Equity Fund 5,458,957 5,734,868 (275,911)
Emerging Growth Equity Fund 17,872,959 18,875,820 (1,002,861)
International Equity Fund 4,905,869 5,947,655 (1,041,786)
Actively Managed Bond Fund 3,518,774 4,540,349 (1,021,575)
Intermediate-Term Bond Fund 2,830,323 3,204,158 (373,835)
Short-Term Investment Fund 7,057 12,003 (4,946)
------------ ------------ -----------
Total $124,551,132 $128,827,968 $(4,276,836)
============ ============ ===========
As of September 30, 1995, the International Equity Fund had outstanding
forward currency contracts as set forth below. These contracts are reported in
the financial statements at the Fund's net gain of $189,208, which is the
difference between the forward foreign exchange rate at the dates of entry into
the contracts and the forward rates at September 30, 1995.
Contracts to sell
-----------------
104,300,000 Japanese Yen for U.S. $1,265,391, 11/16/1995 181,612
216,700,000 Japanese Yen for U.S. $2,240,951, 12/07/1995 36,246
5,200,000 French Francs for U.S. $1,026,633, 11/30/1995 (28,650)
--------
$189,208
========
56
The following summarizes the market value of securities that were on loan
to brokers and the value of securities and cash held as collateral for these
loans at September 30, 1995:
Value of
Securities Value of
Loaned Collateral
----------- -----------
Core Equity Fund $ 929,990 $ 989,649
Value Equity Fund 3,235,630 3,462,862
Emerging Growth Equity Fund 13,458,556 14,203,455
International Equity Fund 1,226,285 1,274,523
Actively Managed Bond Fund 30,044,908 30,562,800
Intermediate-Term Bond Fund 2,374,868 2,405,843
----------- -----------
Total $51,270,237 $52,899,132
=========== ===========
These securities lending arrangements may result in significant credit
exposure in the event the counterparty to the transaction was unable to fulfill
its contractual obligations. In accordance with industry practice, the
securities lending agreements are generally collaterized by cash or securities
with a market value in excess of the Investment Funds obligation under the
contract. The Investment Funds attempt to minimize credit risk associated with
these activities by monitoring broker credit exposure and collateral values on a
daily basis and requiring additional collateral to be deposited with or returned
to the Investment Funds when deemed necessary.
For the year ended September 30, 1995 the Value Equity Fund, Emerging
Growth Equity Fund and the International Equity Fund each had expenses paid
through brokerage/service arrangements which amounted to $21,206, $17,073 and
$20,000, respectively.
57
NOTE 5--CAPITAL TRANSACTIONS:
At September 30, 1995 there were an unlimited number of units of beneficial
interest authorized for each Investment Fund.
Transactions in the units of beneficial interest of each Investment Fund
for the year ended September 30, 1995 were as follows:
Core Equity Fund Value Equity Fund
--------------------- ----------------------
Units Amount Units Amount
------- ------------ -------- -----------
Units sold 720,368 $ 28,004,631 255,492 $ 7,261,555
Units redeemed (633,274) (24,532,607) (228,928) (6,491,239)
-------- ------------ -------- -----------
Net increase 87,094 $ 3,472,024 26,564 $ 770,316
======== ============ ======== ===========
Emerging Growth International
Equity Fund Equity Fund
--------------------- ----------------------
Units Amount Units Amount
------- ------------ -------- -----------
Units sold 291,562 $ 11,643,470 151,666 $ 5,659,129
Units redeemed (215,323) (8,606,464) (130,786) (4,833,851)
-------- ------------ -------- -----------
Net increase 76,239 $ 3,037,006 20,880 $ 825,278
======== ============ ======== ===========
Actively Managed Intermediate-Term
Bond Fund Bond Fund
--------------------- ----------------------
Units Amount Units Amount
------- ------------ -------- ------------
Units sold 575,262 $ 15,769,704 431,437 $ 11,398,598
Units redeemed (1,064,868) (28,969,909) (735,598) (19,266,677)
---------- ------------ -------- ------------
Net (decrease) (489,606) $(13,200,205) (304,161) $ (7,868,079)
========== ============ ======== ============
Short-Term
Investment Fund
---------------------
Units Amount
------- ------------
Units sold 637,944 $ 11,985,311
Units redeemed (853,573) (16,066,312)
-------- ------------
Net (decrease) (215,629) $ (4,081,001)
======== ============
58
Transactions in the units of beneficial interest of each Investment Fund
for the year ended September 30, 1994 were as follows:
Core Equity Fund Value Equity Fund
----------------------- ----------------------
Units Amount Units Amount
--------- ------------ -------- ------------
Units sold 570,998 $ 19,983,360 200,343 $ 5,263,921
Units redeemed (829,507) (29,085,529) (322,977) (8,462,033)
-------- ------------ -------- ------------
Net (decrease) (258,509) $ (9,102,169) (122,634) $ (3,198,112)
======== ============ ======== ============
Emerging Growth International
Equity Fund Equity Fund
----------------------- ----------------------
Units Amount Units Amount
--------- ------------ -------- ------------
Units sold 257,643 $ 9,029,724 247,306 $ 9,450,659
Units redeemed (509,133) (18,168,143) (128,010) (4,744,547)
-------- ------------ -------- ------------
Net increase (decrease) (251,490) $ (9,138,419) 119,296 $ 4,706,112
======== ============ ======== ============
Actively Managed Intermediate-Term
Bond Fund Bond Fund
------------------------ ----------------------
Units Amount Units Amount
---------- ------------ -------- ------------
Units sold 872,273 $ 23,323,590 645,351 $ 16,644,193
Units redeemed (1,001,418) (27,116,813) (879,421) (22,599,674)
-------- ------------ -------- ------------
Net (decrease) (129,145) $ (3,793,223) (234,070) $ (5,955,481)
======== ============ ======== ============
Short-Term
Investment Fund
---------------------
Units Amount
------- ------------
Units sold 601,384 $ 10,882,572
Units redeemed (938,462) (16,939,920)
-------- ------------
Net (decrease) (337,078) $ (6,057,348)
======== ============
59
Net assets at September 30, 1995 are comprised as follows:
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Core Equity Value Equity Emerging Growth International
Fund Fund Fund Equity Fund
------------- ------------ ------------ ------------
Paid-in capital (deficit) $ (18,701,457) $(19,587,206) $(11,645,817) $ (419,370)
Accumulated income (loss) 42,360,853 17,029,737 (530,918) (1,482,227)
Accumulated realized gain 76,325,010 40,922,341 68,929,104 27,948,084
Unrealized appreciation 89,957,193 5,458,957 17,872,959 5,097,094
------------ ------------ ------------ -----------
Net Assets $189,941,599 $ 43,823,829 $ 74,625,328 $31,143,581
============ ============ ============ ===========
Actively Managed Intermediate-Term Short-Term
Bond Fund Bond Fund Investment Fund
------------- ----------------- ---------------
Paid-in capital (deficit) $ (34,818,581) $(39,587,883) $(12,376,465)
Accumulated income 138,658,136 113,463,866 38,399,408
Accumulated realized gain 32,768,665 13,775,683 1,329,911
Unrealized appreciation
(depreciation) 3,518,774 2,830,323 7,057
------------ ------------ ------------
Net Assets $140,126,994 $ 90,481,989 $ 27,359,911
============ ============ ============
60
NOTE 6--FINANCIAL HIGHLIGHTS
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CORE EQUITY FUND
---------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
9/30/95 9/30/94 9/30/93 9/30/92 9/30/91
-------- -------- -------- -------- --------
Per Unit Operating Performance:*
(for a unit outstanding throughout
the year)
Net Asset Value, Beginning of Year $ 35.57 $ 34.49 $ 30.09 $ 27.68 $ 23.15
-------- -------- -------- -------- --------
Income from Investment Operations:
Investment income--net 0.74 0.54 0.56 0.65 0.75
Net realized and unrealized gain
(loss) on investments 10.40 0.54 3.84 1.76 3.78
-------- -------- -------- -------- --------
Total from Investment Operations 11.14 1.08 4.40 2.41 4.53
-------- -------- -------- -------- --------
Net Asset Value, End of Year $ 46.71 $ 35.57 $ 34.49 $ 30.09 $ 27.68
======== ======== ======== ======== ========
Total Return 31.32% 3.13% 14.62% 8.71% 19.57%
Ratios to Average Net Assets
Expenses (0.98)% (1.01)% (0.99)% (0.95)% (0.94)%
Investment income--net 1.86% 1.56% 1.74% 2.25% 2.88%
Portfolio Turnover Rate 7.91% 6.47% 13.41% 18.94% 18.88%
Net Assets at End of Year ($1,000's) $189,942 $141,544 $146,137 $134,269 $158,578
---------
*Using average units basis.
61
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VALUE EQUITY FUND
-----------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
9/30/95 9/30/94 9/30/93 9/30/92 9/30/91
------- ------- ------- ------- -------
Per Unit Operating Performance:*
(for a unit outstanding throughout
the year)
Net Asset Value, Beginning of Year $ 27.05 $ 26.48 $ 22.94 $ 21.48 $ 15.89
------- ------- ------- ------- -------
Income from Investment Operations:
Investment income--net 0.93 0.79 0.70 0.52 0.45
Net realized and unrealized gain
(loss) on investments 4.65 (0.22) 2.84 0.94 5.14
------- ------- ------- ------- -------
Total from Investment Operations 5.58 0.57 3.54 1.46 5.59
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 32.63 $ 27.05 $ 26.48 $ 22.94 $ 21.48
======= ======= ======= ======= =======
Total Return+ 20.63% 2.15% 15.43% 6.80% 35.18%
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses** (1.32)% (1.41)% (1.70)% (1.55)% (1.56)%
Investment income--net 3.24% 3.02% 2.83% 2.32% 2.30%
Portfolio Turnover Rate 67.06% 40.41% 54.46% 14.26% 23.55%
Net Assets at End of Year ($1,000's) $43,824 $35,603 $38,104 $33,417 $37,955
---------
* Using average units basis.
** Ratio reflects fees paid with brokerage commissions only for year ended
9/30/95.
+ On April 1, 1995, Retirement System Investors Inc. became the sole advisor
to Value Equity Fund.
62
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EMERGING GROWTH EQUITY FUND
-----------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
9/30/95 9/30/94 9/30/93 9/30/92 9/30/91
------- ------- ------- ------- -------
Per Unit Operating Performance:*
(for a unit outstanding throughout
the year)
Net Asset Value, Beginning of Year $ 35.96 $ 35.52 $ 24.26 $ 23.34 $ 14.97
------- ------- ------- ------- -------
Income from Investment Operations:
Investment income (loss)--net (0.67) (0.57) (0.53) (0.35) (0.23)
Net realized and unrealized gain
(loss) on investments 17.29 1.01 11.79 1.27 8.60
------- ------- ------- ------- -------
Total from Investment Operations 16.62 0.44 11.26 0.92 8.37
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 52.58 $ 35.96 $ 35.52 $ 24.26 $ 23.34
======= ======= ======= ======= =======
Total Return 46.22% 1.24% 46.41% 3.94% 55.91%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses** (2.12)% (2.08)% (2.27)% (2.18)% (2.27)%
Investment (loss)--net (1.61)% (1.64)% (1.78)% (1.43)% (1.19)%
Portfolio Turnover Rate 170.54% 114.15% 145.59% 135.45% 101.10%
Net Assets at End of Year ($1,000's) $74,625 $48,293 $56,645 $40,844 $46,283
---------
* Using average units basis.
** Ratio reflects fees paid with brokerage commissions only for year ended
9/30/95.
63
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INTERNATIONAL EQUITY FUND
-----------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
9/30/95 9/30/94 9/30/93 9/30/92 9/30/91
------- ------- ------- ------- -------
Per Unit Operating Performance:*
(for a unit outstanding throughout
the Year)
Net Asset Value, Beginning of Year $ 38.08 $ 34.36 $ 28.27 $ 29.26 $ 25.31
------- ------- ------- ------- -------
Income from Investment Operations:
Investment income (loss)--net (0.02) (0.09) (0.21) (0.16) 0.15
Net realized and unrealized gain
(loss) on investments 2.19 3.81 6.30 (0.83) 3.80
------- ------- ------- ------- -------
Total from Investment Operations 2.17 3.72 6.09 (0.99) 3.95
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 40.25 $ 38.08 $ 34.36 $ 28.27 $ 29.26
======= ======= ======= ======= =======
Total Return 5.70% 10.83% 21.54% (3.38)% 15.61%
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses** (1.90)% (1.96)% (2.83)% (2.69)% (2.58)%
Investment income (loss)--net (0.07)% (0.25)% (0.68)% (0.50)% 0.54%
Portfolio Turnover Rate 51.40% 44.25% 55.02% 52.58% 65.55%
Net Assets at End of Year ($1,000's) $31,143 $28,672 $21,769 $18,997 $22,677
---------
* Using average units basis.
** Ratio reflects fees paid with brokerage commissions only for year ended
9/30/95.
64
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ACTIVELY MANAGED BOND FUND
---------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
9/30/95 9/30/94 9/30/93 9/30/92 9/30/91
-------- -------- -------- -------- --------
Per Unit Operating Performance:*
(for a unit outstanding throughout
the year)
Net Asset Value, Beginning of Year $ 26.06 $ 27.43 $ 24.57 $ 21.74 $ 18.44
-------- -------- -------- -------- --------
Income from Investment Operations:
Investment Income--net: 1.64 1.47 1.23 1.54 1.51
Net realized and unrealized
gain (loss) on investments 1.88 (2.84) 1.63 1.29 1.79
-------- -------- -------- -------- --------
Total from Investment Operations 3.52 (1.37) 2.86 2.83 3.30
-------- -------- -------- -------- --------
Net Asset Value, End of Year $ 29.58 $ 26.06 $ 27.43 $ 24.57 $ 21.74
======== ======== ======== ======== ========
Total Return 13.51% (4.99)% 11.64% 13.02% 17.90%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses (0.84)% (0.82)% (0.87)% (0.84)% (0.84)%
Investment income--net 5.94% 5.51% 5.22% 6.87% 7.56%
Portfolio Turnover Rate 18.21% 8.54% 170.16% 132.97% 125.32%
Net Assets at End of Year ($1,000's) $140,127 $136,210 $146,918 $189,827 $197,573
------
* Using average units basis.
65
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INTERMEDIATE-TERM BOND FUND
--------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
9/30/95 9/30/94 9/30/93 9/30/92 9/30/91
------- ------- ------- -------- --------
Per Unit Operating Performance:*
(for a unit outstanding throughout
the year)
Net Asset Value, Beginning of Year $ 25.40 $ 25.95 $ 24.20 $ 21.72 $ 19.10
------- ------- ------- -------- --------
Income from Investment Operations:
Investment Income--net: 1.66 1.46 1.48 1.55 1.46
Net realized and unrealized gain
(loss) on investments 0.95 (2.01) 0.27 0.93 1.16
------- ------- ------- -------- --------
Total from Investment Operations 2.61 (0.55) 1.75 2.48 2.62
------- ------- ------- -------- --------
Net Asset Value, End of Year $ 28.01 $ 25.40 $ 25.95 $ 24.20 $ 21.72
======= ======= ======= ======== ========
Total Return 10.28% (2.12)% 7.23% 11.42% 13.72%
Ratios/Supplemental Data
Ratios to Average Net Assets
Expenses (0.98)% (0.95)% (1.07)% (0.98)% (0.98)%
Investment income--net 6.27% 5.68% 5.95% 6.78% 7.21%
Portfolio Turnover Rate 15.95% 17.92% 12.39% 24.86% 43.70%
Net Assets at End of Year ($1,000's) $90,482 $89,780 $97,796 $117,107 $108,144
---------
* Using average units basis.
66
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SHORT-TERM INVESTMENT FUND
-----------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
9/30/95 9/30/94 9/30/93 9/30/92 9/30/91
------- ------- ------- ------- -------
Per Unit Operating Performance:*
(for a unit outstanding throughout
the year)
Net Asset Value, Beginning of Year $ 18.36 $ 17.83 $ 17.43 $ 16.80 $ 15.79
------- ------- ------- ------- -------
Income from Investment Operations:
Investment income--net 0.93 0.53 0.43 0.64 0.99
Net realized and unrealized gain
(loss) on investments 0.02 0.00 (0.03) (0.01) 0.02
------- ------- ------- ------- -------
Total from Investment Operations 0.95 0.53 0.40 0.63 1.01
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 19.31 $ 18.36 $ 17.83 $ 17.43 $ 16.80
======= ======= ======= ======= =======
Total Return 5.17% 2.97% 2.29% 3.75% 6.40%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses (0.80)% (0.80)% (0.89)% (0.79)% (0.79)%
Investment income--net 4.94% 2.92% 2.43% 3.72% 6.06%
Decrease in above expense ratio due
to fee waiver 0.34% 0.32% -- % -- % -- %
Net Assets at End of Year ($1,000's) $27,360 $29,975 $35,117 $34,911 $61,505
---------
* Using average units basis.
67
DEDICATED BOND FUND (See Note 1)
--------------------------------
Year Year
Ended Ended
9/30/92** 9/30/91
--------- -------
Per Unit Operating Performance:*
(for a unit outstanding throughout the year)
Net Asset Value, Beginning of Year $18.97 $16.36
------ ------
Income from Investment Operations:
Investment income (loss)--net 0.79 1.91
Net realized and unrealized gain
(loss) on investments 0.07 0.70
------ ------
Total from Investment Operations 0.86 2.61
------ ------
Net Asset Value, End of Year $19.83** $18.97
====== ======
Total Return 4.53% 15.95%
Ratios/Supplemental Data
Ratios to Average Net Assets:
Expenses (0.75) (0.68)
Investment income--net 7.45% 10.83%
Portfolio Turnover Rate 0.0% 0.0%
Net Assets at End of Year ($1,000's) $ 0.0 $14,133
---------
* Using average units basis.
** Period from October 1, 1991 to April 24, 1992.
68
INDEPENDENT AUDITOR'S REPORT
--------------------------------------------------------------------------------
To the Unitholders and Board of Trustees
RSI Retirement Trust
We have audited the combined and individual statements of assets and
liabilities, including the statements of investments, of the Core Equity Fund,
Value Equity Fund, Emerging Growth Equity Fund, International Equity Fund,
Actively Managed Bond Fund, Intermediate-Term Bond Fund and Short-Term
Investment Fund (the "Investment Funds") of RSI Retirement Trust (the "Trust")
as of September 30, 1995, and the related statements of operations for the year
then ended, the statements of changes in net assets for each of the two years in
the period then ended and the financial highlights for each of the four years in
the period then ended. We also audited the financial highlights of the Dedicated
Bond Fund series of the Trust for the period ended April 24, 1992 (see Note 1).
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1995, by correspondence with the custodians 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 combined and individual financial statements and
financial highlights referred to above present fairly, in all material respects,
the financial position of the Investment Funds of the Trust at September 30,
1995, the results of their operations, the changes in their net assets and the
financial highlights for the periods indicated, in conformity with generally
accepted accounting principles.
[INSERT SIGNATURE]
New York, New York
November 15, 1995
69
OFFICERS
--------------------------------------------------------------------------------
William Dannecker, President
James P. Coughlin, C.F.A., Executive Vice President and Chief Investment Officer
Stephen P. Pollak, Esq., Executive Vice President, Counsel and Secretary
John F. Meuser, Vice President and Treasurer
Durando J. Saccente, Vice President
Veronica A. Fisher, First Vice President and Assistant Treasurer
Denise F. Roche, First Vice President
Herbert Kuhl, Jr., C.F.A., First Vice President
Peter M. Coleman, Second Vice President
Deborah A. Modzelewski, Second Vice President
Kim Vander Putten, Second Vice President
Heidi Viceconte, Second Vice President
CONSULTANTS
--------------------------------------------------------------------------------
Actuarial--Towers Perrin
Investments--Hewitt Associates
INVESTMENT MANAGERS
--------------------------------------------------------------------------------
Friess Associates, Inc. The Putnam Advisory Company, Inc.
Morgan Grenfell Investment Retirement System Investors Inc.
Services Limited
CUSTODIANS
--------------------------------------------------------------------------------
The Chase Manhattan Bank, N.A.
Custodial Trust Company
DISTRIBUTOR
--------------------------------------------------------------------------------
Retirement System Distributors Inc.
TRANSFER AGENT
--------------------------------------------------------------------------------
Retirement System Consultants Inc.
INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
McGladrey & Pullen, LLP
COUNSEL
--------------------------------------------------------------------------------
Shereff, Friedman, Hoffman & Goodman, LLP
70
BOARD OF TRUSTEES
--------------------------------------------------------------------------------
Herbert G. Chorbajian
Chairman, President and Chief
Executive Officer
ALBANK, FSB, NY
Candace Cox
President
NYNEX Asset Management Co., NY
William Dannecker
President and Chief Executive Officer
Retirement System Group Inc., NY
Eugene C. Ecker
Pension and Group Insurance
Consultant
Covington Hardee
Retired Chairman
The Lincoln Savings Bank, FSB, NY
Ralph L. Hodgkins, Jr.
Retired Chief Executive Officer
Mid Maine Savings Bank, FSB
Auburn, ME
Maurice E. Kinkade
Director of Development
Maplebrook School
President, KINCO Management
William G. Lillis
Real Estate Consultant
William L. Schrauth
President and Chief Executive Officer
The Savings Bank of Utica, NY
William E. Swan
President and Chief Executive Officer
Lockport Savings Bank, NY
Raymond L. Willis
Private Investments
71
The information contained herein shall not be construed to be or constitute an
offer or a solicitation of an offer to buy units in the RSI Retirement Trust.
Sales of units in the Trust may be made only in those states where such units
are exempt from registration or have been qualified for sale. Total returns are
based on historical results and are not intended to indicate future performance.
Future performance and unit net asset value will fluctuate so that units, if
redeemed, may be worth more or less than their original cost. This material must
be preceded or accompanied by a prospectus.
ANNUAL REPORT
[LOGO]
RSI Retirement Trust
Core Equity Fund
Value Equity Fund
Emerging Growth Equity Fund
International Equity Fund
Actively Managed Bond Fund
Intermediate-Term Bond Fund
Short-Term Investment Fund
Dedicated Bond Fund
1995
Broker/Dealer:
[LOGO]
Retirement System
Distributors Inc.
P.O. Box 2064
Grand Central Station
New York, NY 10163-2064
Dates Referenced Herein and Documents Incorporated By Reference
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