-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SEmwbMfbZN78eX//dEkvu6e/6KQVy2VOkbHW49fzt1cuJ0jTXjIque0BZKsk07O3 GM8c5Un/Ni4SxhxInaGfRg== 0000912057-97-023867.txt : 19970711 0000912057-97-023867.hdr.sgml : 19970711 ACCESSION NUMBER: 0000912057-97-023867 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19970710 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STI CLASSIC FUNDS CENTRAL INDEX KEY: 0000883939 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 033-45671 FILM NUMBER: 97638871 BUSINESS ADDRESS: STREET 1: 2 OLIVER STREET CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6109896602 MAIL ADDRESS: STREET 1: 530 E SWEDESFORD ROAD CITY: WAYNE STATE: PA ZIP: 19087-1693 497 1 497 STI CLASSIC FUNDS EMERGING MARKETS EQUITY FUND SMALL CAP EQUITY FUND Supplement dated June 30, 1997 to Prospectus dated December 31, 1996 This Prospectus dated December 31, 1996, is hereby amended by the addition of the following unaudited financial information for the STI Classic Funds Emerging Market Equity Fund and the STI Classic Funds Small Cap Equity Fund for the period ended May 31, 1997. FINANCIAL HIGHLIGHTS THE STI CLASSIC FUNDS For the Period from Inception Through May 31, 1997 UNAUDITED For a Share Outstanding Throughout the Period
EMERGING MARKETS SMALL CAP EQUITY FUND(1) EQUITY FUND(1) ----------------- -------------- NET ASSET VALUE, BEGINNING OF PERIOD........................................... $ 10.00 $ 10.00 Income from investment operations: Net Investment Income.......................................................... 0.04 0.05 Net Realized and Unrealized Gain on Investments................................ 0.75 1.04 Distributions from Net Investment Income....................................... 0.00 (0.02) NET ASSET VALUE, END OF PERIOD................................................. $ 10.79 $ 11.07 Total Return*.................................................................. 7.90% 10.97% Period Net Assets, End of Period (000's)....................................... $ 39,495 $ 131,049 Ratio of Expenses to Average Net Assets**...................................... 1.55% 1.20% Ratio of Net Investment Income to Average Net Assets**......................... 1.37% 1.86% Ratio of Expenses to Average Net Assets (Excluding Waivers and Contributions)**...................................... 2.05% 1.37% Ratio of Net Investment Income to Average Net Assets (Excluding Waivers and Contributions)**...................................... 0.87% 1.69% Portfolio Turnover Rate........................................................ 23.88% 27.46% Average Commission Rate(A)..................................................... $ 0.0019 $ 0.0523
- ------------------------ * Return is for the period indicated and has not been annualized. ** Annualized. (A) Average commission rate paid per share for the security purchases and sales during the period. (1) Commenced operations January 31, 1997. The information on page 4 of the prospectus with respect to the predecessor collective funds has been updated to reflect performance data for the Funds, including the performance of the predecessor collective investment funds, through May 31, 1997. PERFORMANCE INFORMATION FOR PREDECESSOR COLLECTIVE FUNDS Before commencing operations as SEC-registered mutual funds on January 31, 1997, the Emerging Markets Equity and Small Cap Equity Funds were operated as unregistered collective investment funds managed by STI Capital Management, Inc. A substantial portion of the assets of the collective investment funds was transferred to the Funds immediately prior to their commencement of operations. The collective investment funds were managed using virtually the same investment objectives, policies and restrictions as those used by each respective Fund. Set forth below is the performance of the Funds since they commenced operations together with their prior performance since inception as unregistered collective investment funds. The performance data for the predecessor collective investment funds is not necessarily indicative of the future performance of each Fund. This is because the predecessor collective investment funds were not subject to certain investment limitations imposed on mutual funds, which, if they had been imposed, may have adversely affected their performance. The performance of the Funds since inception, as set forth below, reflects the average annual total returns, adjusted to reflect Fund expenses, net of voluntary waivers and reimbursements, for the periods specified below. The predecessor collective investment funds did not incur expenses that correspond to the advisory, administrative, and other fees to which each Fund is subject. Accordingly, the performance information for the predecessor collective funds has been adjusted by applying the total expense ratio for the corresponding Fund, as disclosed in the prospectus at the time the Fund commenced operations, which reduced the actual performance of the collective investment fund.
ONE YEAR TWO YEARS ENDED 5/31/97 ENDED 5/31/97 SINCE INCEPTION ------------- ------------- -------------------- Emerging Markets Equity Fund................................. 20.16% * 26.78% (3/31/96 - 5/31/97) Small Cap Equity Fund........................................ 32.74% 32.72% 29.02% (9/1/94 - 5/31/97)
- ------------------------ * Not applicable. PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE. STI CLASSIC FUNDS CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND CLASSIC INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND Supplement dated June 30, 1997 to Prospectus dated December 11, 1996 The Prospectus dated December 31, 1996, is hereby amended by the addition of the following unaudited financial information for the Classic Institutional Cash Management Money Market Fund and the Classic Institutional U.S. Treasury Money Market Fund for the period ended May 31, 1997. FINANCIAL HIGHLIGHTS THE STI CLASSIC FUNDS For the Period from Inception Through May 31, 1997 UNAUDITED For a Share Outstanding Throughout the Period
CLASSIC CLASSIC INSTITUTIONAL INSTITUTIONAL CASH MANAGEMENT U.S. TREASURY MONEY MARKET MONEY MARKET FUND(1) FUND(1) ------------------ ------------------ NET ASSET VALUE, BEGINNING OF PERIOD..................................... $ 1.00 $ 1.00 Net Investment Income.................................................... 0.02 0.02 Net Realized and Unrealized Gain on Investments.......................... -- -- Distributions from Net Investment Income................................. (0.02) (0.02) Distributions from Realized Capital Gains................................ -- -- NET ASSET VALUE, END OF PERIOD........................................... $ 1.00 $ 1.00 Total Return*............................................................ 2.51% 2.46% Period Net Assets, End of Period (000's)................................. $ 395,673 $ 20,238 Ratio of Expenses to Average Net Assets**................................ 0.06% 0.09% Ratio of Net Investment Income to Average Net Assets**................... 5.49% 5.27% Ratio of Expenses to Average Net Assets (Excluding Waivers and Contributions)**................................ 0.52% 0.51% Ratio of Net Investment Income to Average Net Assets (Excluding Waivers and Contributions)**................................ 5.03% 4.85%
- ------------------------ * Return is for the period indicated and has not been annualized. ** All ratios are for the period indicated and have been annualized. (1) Commenced operations December 12, 1996. PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE. STI CLASSIC FUNDS SUPPLEMENT DATED JUNE 30, 1997 TO THE CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND AND CLASSIC INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 11, 1996 The Statement of Additional Information for the STI Classic Funds is hereby amended and supplemented by the following unaudited financial statements of STI Classic Funds Classic Institutional Cash Management Money Market Fund and Classic Institutional U.S. Treasury Money Market Fund for the period ended May 31, 1997. PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE. STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 UNAUDITED CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- COMMERCIAL PAPER (70.0%) A1 Credit 5.640%, 06/02/97 $ 13,000 $ 12,998 American Express 5.500%, 08/28/97 500 493 Banc One Funding 5.620%, 07/21/97 4,000 3,969 5.680%, 08/14/97 3,811 3,767 Bank of America Toronto, Yankee 5.730%, 07/31/97 5,500 5,500 Bank of Montreal 5.520%, 07/01/97 10,000 9,954 Bank of New York 5.500%, 06/02/97 3,350 3,350 Bankers Trust 5.500%, 11/17/97 200 195 BAT Capital 5.530%, 06/24/97 10,000 9,965 Bell Atlantic Network Funding 5.600%, 06/12/97 1,000 998 Campbell Soup 5.550%, 07/07/97 2,550 2,536 Cargill Global Funding 5.820%, 11/25/97 500 486 Cargill Glogal Funding 5.550%, 06/16/97 5,000 4,988 Caterpillar Financial Services 5.600%, 09/11/97 4,915 4,837 Dean Witter Discover 5.640%, 08/01/97 6,000 5,943 Dominion Semiconductor 5.650%, 06/03/97 5,000 4,998 5.570%, 06/11/97 5,000 4,992 Dresser Industries 5.550%, 06/30/97 10,000 9,955 Ford Motor Credit 5.520%, 06/24/97 835 832 5.600%, 06/27/97 1,000 996 5.640%, 07/21/97 5,000 4,961 Gannett 5.520%, 06/17/97 4,775 4,763 General Electric Capital 5.400%, 06/02/97 500 500 5.700%, 06/30/97 1,000 995 5.630%, 09/25/97 1,000 982 Golden Peanut 5.400%, 07/15/97 250 248 GTE Funding 5.510%, 06/05/97 3,500 3,498 5.510%, 06/06/97 5,350 5,346 5.530%, 06/17/97 3,000 2,993 Hertz 5.620%, 07/25/97 8,500 8,428 International Business Machine Credit 5.550%, 06/09/97 7,717 7,708 5.550%, 06/19/97 5,000 4,987 John Hancock 5.600%, 06/26/97 9,375 9,339 Marsh & Mclennan 5.700%, 09/05/97 2,393 2,357 Metlife Funding 5.530%, 07/11/97 2,203 2,189 Monongahela Power 5.700%, 06/02/97 6,320 6,319 National Australia Funding 5.550%, 06/02/97 12,000 11,998 5.430%, 08/13/97 250 247 National City Credit 5.650%, 07/28/97 2,000 1,982 5.665%, 08/21/97 5,000 4,936 New England Power 5.550%, 06/04/97 2,300 2,299 5.520%, 06/06/97 5,550 5,546 5.540%, 06/12/97 2,123 2,119 Pactel Capital Resources 5.510%, 06/23/97 7,000 6,976 Philip Morris 5.700%, 06/02/97 8,000 7,999 5.550%, 06/06/97 1,505 1,504 5.550%, 06/09/97 1,275 1,273 5.550%, 06/18/97 1,240 1,237 Potomac Electric Power 5.600%, 06/06/97 9,360 9,353 CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND - CONCLUDED - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Progress Capital 5.520%, 06/09/97 $ 8,798 $ 8,787 5.550%, 06/20/97 1,271 1,267 Royal Bank Canada 5.580%, 07/15/97 3,010 2,989 RTZ America 5.370%, 06/16/97 250 249 5.550%, 06/25/97 250 249 5.570%, 07/08/97 800 795 Sherwin Williams 5.550%, 06/18/97 5,000 4,987 Society Generale North America 5.500%, 09/10/97 200 197 Sony Capital 5.650%, 06/02/97 4,400 4,399 South Carolina Fuel 5.510%, 06/20/97 4,435 4,422 Southern New England Telcommunications 5.580%, 06/11/97 1,157 1,155 Transamerica Finance 5.650%, 06/02/97 7,500 7,499 5.520%, 06/12/97 5,000 4,992 5.530%, 06/13/97 700 699 U.S. Borax 5.600%, 07/01/97 2,000 1,991 5.650%, 07/16/97 1,600 1,589 Union Bank Of Switzerland Finance 5.750%, 06/02/97 1,000 1,000 US Borax 5.370%, 06/16/97 250 249 Virgina Electric & Power 5.650%, 07/16/97 2,000 1,986 Waste Management Technologies 5.580%, 06/24/97 3,000 2,989 5.650%, 06/27/97 2,770 2,759 Xerox Credit 5.520%, 06/12/97 1,985 1,982 5.510%, 06/24/97 5,100 5,082 -------- Total Commercial Paper (Cost $277,147) 277,147 -------- MUNICIPAL BONDS (0.3%) Compton Community, Redevelopment Agency, Series 1995B, RB, CGIC TAXABLE 6.150%, 08/01/97 1,000 1,000 -------- Total Municipal Bonds (Cost $1,000) 1,000 -------- CORPORATE OBLIGATIONS (5.2%) Associates Corporation of North America 6.750%, 06/13/97 3,000 3,001 8.625%, 06/15/97 500 500 Beneficial MTN 6.850%, 11/19/97 1,500 1,506 6.860%, 11/19/97 2,200 2,209 BP America 8.875%, 12/01/97 200 203 Dow Capital BV 5.750%, 09/15/97 500 500 FCC National Bank (C) 5.640%, 05/08/98 3,000 2,999 Federal National Mortgage Association MTN 6.520%, 09/08/97 500 501 6.520%, 09/15/97 900 901 First Chicago MTN 11.150%, 10/31/97 1,700 1,735 Household Finance 7.750%, 06/15/97 2,250 2,251 6.250%, 10/15/97 1,000 1,001 Morgan Guaranty Trust 5.950%, 06/06/97 200 200 Teco Energy MTN 9.250%, 06/16/97 3,000 3,004 -------- Total Corporate Obligations (Cost $20,511) 20,511 -------- - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- CERTIFICATES OF DEPOSIT (4.8%) Bankers Trust Toronto 5.690%, 08/21/97 $ 4,000 $ 4,000 Societe Generale, Yankee 5.690%, 08/22/97 5,000 5,000 Swiss Bank, Yankee 5.530%, 06/30/97 10,000 10,000 -------- Total Certificates Of Deposit (Cost $19,000) 19,000 -------- ASSET-BACKED SECURITIES (1.0%) Americredit Auto Receivables Trust, 1997-B, Cl A 5.790%, 06/12/98 4,000 4,000 -------- Total Asset-Backed Securities (Cost $4,000) 4,000 -------- REPURCHASE AGREEMENTS (21.3%) Deutsche Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $76,220,749 (collateralized by various FHLMC obligations, total par value $94,382,160, 0.000%-6.630%, 05/15/08- 09/01/26; FNMA obligation, total par value $21,264,738, 0.000%, 01/01/26: total market value $77,708,900) 76,185 76,185 Salomon Brothers 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $8,072,554 (collateralized by various FHLMC obligations, total par value $9,465,582, 6.014%-8.500%, 07/01/02- 11/01/26; various FNMA obligations, total par value $20,886,794, 04/01/98-05/01/26: total market value $8,294,005) 8,069 8,069 -------- Total Repurchase Agreements (Cost $84,254) 84,254 -------- Total Investments (102.6% ) (Cost $405,912) $405,912 -------- Other Assets and Liabilities, Net (-2.6%) (10,239) -------- NET ASSETS: Fund shares of the Trust Class (unlimited authorization -- no par value) based on 395,673,180 outstanding shares of beneficial interest 395,673 -------- Total Net Assets (100.0%) $395,673 -------- -------- Net Asset Value, Offering and Redemption Price Per Share -- Institutional Shares $ 1.00 -------- -------- The accompanying notes are an integral part of the financial statements. SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 UNAUDITED CLASSIC INSTITUTIONAL U.S. TREASURY SECURITIES MONEY MARKET FUND - -------------------------------------------------------------------------------- FACE AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- TREASURY NOTES (4.9%) U.S. Treasury Notes 5.750%, 10/31/97 $ 1,000 $ 1,001 --------- Total Treasury Notes (Cost $1,001) 1,001 -------- REPURCHASE AGREEMENTS (71.1%) Deutsche Bank 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,031,851 (collateralized by U.S. Treasury Bill, par value $948,000, 0.000%, 07/31/97; U.S. Treasury Note, par value $111,000, 5.125%, 12/31/98: total market value $1,052,006) 1,031 1,031 Merrill Lynch 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,995 (collateralized by U.S. Government STRIPS, total par value $1,995,661, 0.000%, 05/15/02-11/15/14: total market value $1,021,320) 1,001 1,001 Barclays 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $4,677,964 (collateralized by U.S. Treasury Bill, par value $4,955,000, 0.000%, 02/05/98: total market value $4,770,173) 4,676 4,676 Morgan Stanley 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,458 (collateralized by U.S. Treasury Note, par value $990,000, 7.25%, 05/15/04: total market value $1,021,442) 1,000 1,000 Salomon Brothers 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,458 (collateralized by various U.S. Treasury Notes, total par value $1,005,000, 6.125%-8.875%, 11/15/97- 07/31/00: total market value $1,022,745) $1,000 $ 1,000 Swiss Bank 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $4,678,206 (collateralized by U.S. Treasury Bond, par value $4,565,000, 7.250%, 08/15/22; U.S. Treasury Note, par value $25,000, 5.875%, 06/30/00: total market value $4,777,310) 4,676 4,676 Union Bank of Switzerland 5.50%, dated 05/30/97, matures 06/02/97, repurchase price $1,000,458 (collateralized by U.S. Treasury Note, par value $1,030,000, 5.875%, 11/15/99: total market value $1,021,198) 1,000 1,000 -------- Total Repurchase Agreements (Cost $14,384) 14,384 -------- Total Investments (76.0% of net assets) (Cost $15,384) 15,384 -------- The accompanying notes are an integral part of the financial statements. STATEMENT OF NET ASSETS THE STI CLASSIC FUNDS May 31, 1997 UNAUDITED KEY TO ABBREVIATIONS USED IN THE STATEMENT OF NET ASSETS/SCHEDULE OF INVESTMENTS FHLMC Federal Home Loan Mortgage Corporation FNMA Federal National Mortgage Association MTN Medium Term Note RB Revenue Bond STRIPS Separately Traded Registered Interest and Principal Security (C) Variable rate security. The rate reported on the Statement of Net Assets is the rate in effect on May 31, 1997. STATEMENT OF ASSETS AND LIABILITIES (000) THE STI CLASSIC FUNDS May 31, 1997 UNAUDITED
--------------------- Classic Institutional U.S. Treasury Money Market Fund --------------------- Assets: Investment at Market Value (Cost $15,384) $ 15,384 Receivables for Investment Securities Sold 4,951 Other Assets 98 --------------------- Total Assets 20,433 --------------------- Liabilities: Accrued Expenses 4 Distribution Payable 101 --------------------- Total Liabilities 105 --------------------- Net Assets: Fund Shares of the Institutional Shares (Unlimited Authorization--No Par Value) Based on 20,238,609 Outstanding Shares of Beneficial Interest 20,239 Accumulated Net Realized Loss on Investments (1) --------------------- Total Net Assets $ 20,238 --------------------- --------------------- Net Asset Value, Offering Price and Redemption Price Per Share $ 1.00 --------------------- ---------------------
The accompanying notes are an integral part of the financial statements. STATEMENT OF OPERATIONS (000) THE STI CLASSIC FUNDS For the Period Ended May 31, 1997 UNAUDITED
--------------------- --------------------- Classic Institutional Classic Institutional Cash Management U.S. Treasury Money Market Fund Money Market Fund (1) (1) --------------------- --------------------- 12/12/96 - 12/12/96 - 05/31/97 05/31/97 --------------------- --------------------- Interest Income: $ 2,784 $ 491 Expenses : Investment Advisory Fees 100 18 Investment Advisory Fees Waived (100) (18) Contribution from Advisor (131) (20) Administrator Fees 33 6 Registration Fees 111 6 Transfer Agent Fees 8 8 Printing Fees 3 3 Amortization of Deferred Organizational Costs 5 5 --------------------- --------------------- Total Expenses 29 8 --------------------- --------------------- Net Investment Income 2,755 483 --------------------- --------------------- Net Realized (Loss) on Securities Sold - (1) --------------------- --------------------- Increase in Net Assets Resulting From Operations $ 2,755 $ 482 --------------------- --------------------- --------------------- ---------------------
Amounts designated as "-" are either $0 or round to $0. (1) Commencement of operations. The accompanying notes are an integral part of the financial statements. STATEMENT OF CHANGES IN NET ASSETS (000) THE STI CLASSIC FUNDS For the Period Ended May 31, 1997 UNAUDITED
Classic Institutional Classic Institutional Cash Management U.S. Treasury Money Market Fund Money Market Fund 12/12/96 - 12/12/96 - 05/31/97 (1) 05/31/97 (1) --------------------- --------------------- Operations: Net Investment Income $ 2,755 $ 483 Net Realized (Loss) on Securities Sold - (1) --------------------- --------------------- Increase in Net Assets Resulting From Operations 2,755 482 --------------------- --------------------- Distributions to Shareholders: Net Investment Income: (2,755) (483) Capital Gains: - - --------------------- --------------------- Total Distributions (2,755) (483) --------------------- --------------------- Capital Share Transactions (1): Proceeds from Shares Issued 578,520 143,133 Reinvestments of Cash Distributions - - Cost of Shares Redeemed (182,847) (122,894) --------------------- --------------------- Increase in Net Assets from Share Transactions 395,673 20,239 --------------------- --------------------- Total Increase in Net Assets 395,673 20,238 --------------------- --------------------- Net Assets: Beginning of Period - - --------------------- --------------------- End of Period $ 395,673 $ 20,238 --------------------- --------------------- --------------------- --------------------- (1) Shares Issued and Redeemed: Proceeds from Shares Issued 578,520 143,133 Reinvestments of Cash Distributions - - Cost of Shares Redeemed (182,847) (122,894) --------------------- --------------------- Net Share Transactions 395,673 20,239 --------------------- ---------------------
Amounts designated as "-" are either $0 or round to $0. (1) Commencement of operations. The accompanying notes are an integral part of the financial statements. NOTES TO FINANCIAL STATEMENTS STI CLASSIC FUNDS May 31, 1997 UNAUDITED 1. Organization: The STI Classic Funds (the "Trust") was organized as a Massachusetts business trust under a Declaration of Trust dated January 15, 1992. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with twenty-four portfolios: the Prime Quality Money Market Fund, the U.S. Government Securities Money Market Fund, the Tax-Exempt Money Market Fund, the Classic Institutional Cash Management Money Market Fund, the Classic Institutional U.S. Treasury Fund (collectively the "Money Market Funds"), the Investment Grade Bond Fund, the Investment Grade Tax-Exempt Bond Fund, the Short-Term U.S. Treasury Securities Fund, the Short-Term Bond Fund, the Capital Growth Fund, the Value Income Stock Fund, the Sunbelt Equity Fund, the Mid-Cap Equity Fund, the Balanced Fund, the Florida Tax-Exempt Bond Fund, the Georgia Tax-Exempt Bond Fund, the Tennessee Tax-Exempt Bond Fund, the U.S. Government Securities Fund, the Limited-Term Federal Mortgage Securities Fund, the Small Cap Equity Fund, the International Equity Fund, the International Equity Index Fund and the Emerging Markets Equity Fund (collectively the "Non-Dollar Funds"). The assets of each portfolio are segregated, and a shareholder's interest is limited to the Fund in which shares are held. Each Fund's prospectus provides a description of the Fund's investment objectives, policies and strategies. The footnotes herein pertain only to the Classic Institutional Cash Management Money Market Fund and the Classic Institutional U.S. Treasury Fund (collectively the "Funds"). 2. Significant Accounting Policies: SECURITY VALUATION -- Investment securities held by the Funds are stated at amortized cost, which approximates market value. FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a regulated investment company for Federal income tax purposes and distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required. SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on the date the security is purchased or sold (trade date). Interest income is recognized on an accrual basis. Costs used in determining net realized gains and losses on the sales of investment securities are those of the specific securities sold adjusted for the accretion and amortization of purchase discounts and premiums during the respective holding period. Purchase discounts and premiums on securities held by the Funds are accreted and amortized ratably to maturity and are included in interest income. REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters into an insolvency proceeding, realization of the collateral by the Funds may be delayed or limited. NET ASSET VALUE PER SHARE-- The net asset value per share of each Fund is calculated each business day, by dividing the total value of each Fund's assets, less liabilities, by the number of shares outstanding. OTHER -- Expenses that are directly related to a specific Fund are charged to that Fund. Class specific expenses are borne by that class. Other operating expenses of the Trust are pro-rated to the Funds on the basis of relative net assets. Fund expenses are pro-rated to the respective classes on the basis of relative net assets. Distributions from net investment income of each of the Funds are declared on each business day and paid to shareholders on a monthly basis. Any net realized capital gains on sales of securities are distributed to shareholders at least annually. 3. Organization Costs and Transactions with Affiliates: The Trust incurred organization costs of approximately $653,100. These costs have been deferred in the accounts of the Funds and are being amortized on a straight line basis over a period of sixty months commencing with operations. The costs include legal fees of approximately $41,100 for organizational work performed by a law firm of which two officers of the Trust are partners. On March 18, 1992, the Trust sold initial shares of beneficial interest to SEI Fund Resources (the "Administrator"). In the event any of the initial shares of the Trust are redeemed by any holder thereof during the period that the Trust is amortizing its organizational costs, the redemption proceeds payable to the holder thereof will be reduced by the unamortized organizational costs in the same ratio as the number of initial shares being redeemed bears to the number of initial shares outstanding at the time of redemption. Certain officers of the Trust are also officers of the Administrator and/or SEI Investments Distribution Co. (the "Distributor"). Such officers are paid no fees by the Trust for serving as officers of the Trust. 4. Administration and Transfer Agency Servicing Agreements: The Trust and the Administrator are parties to an Administration Agreement dated May 29, 1995, under which the Administrator provides administrative services for an annual fee (expressed as a percentage of the combined average daily net assets of the Trust and STI Classic Variable Annuity Trust) of: .10% up to $1 billion, .07% on the next $4 billion, .05% on the next $3 billion, .045% on the next $2 billion and .04% for over $10 billion. The Trust and Federated Services Company are parties to a Transfer Agency servicing agreement dated May 14, 1994 under which Federated Services Company provides transfer agency services to the Trust. 5. Investment Advisory and Custodian Agreements: The Trust and STI Capital Management, N.A., ("STI Capital Management, N.A."), Trusco Capital Management ("Trusco"), the SunTrust Bank, Atlanta and SunTrust Bank, Chattanooga have entered into advisory agreements dated May 29, 1992, July 15, 1993, December 20, 1993 and December 20, 1993 respectively. Under terms of the respective agreements, the Funds are charged the following annual fees based upon average daily net assets:
Maximum Maximum Maximum Institutional Trust Investor Investor Flex Share Flex Annual Share Share Share Share Distribu- Share Advisory Maximum Maximum Distribu- Maximum tion and Maximum Fee Expense Expense tion Fee Expense Service Fee Expense -------- ------------- ------- --------- -------- ----------- ------- Trusco: Classic Institutional Cash Management Money Market Fund .20% .20% -- -- -- -- -- Classic Institutional U.S. Treasury Money Market Fund .20% .20% -- -- -- -- --
The Investment Advisors, the Administrator and the Distributor have voluntarily agreed to waive all or a portion of their fees (and to reimburse Funds' expenses) in order to limit operating expenses to an amount as outlined in the table above. Fee waivers and expense reimbursements are voluntary and may be terminated at any time. SunTrust Bank, Atlanta, formerly Trust Company Bank, acts as custodian for all the Funds except the International Equity, the International Equity Index and the Emerging Markets Equity Funds who utilize The Bank of New York as custodian. Fees of the Custodians are paid on the basis of the net assets of the Funds. The Custodians play no role in determining the investment policies of the Trust or which securities are to be purchased or sold in the Funds. NOTES TO FINANCIAL STATEMENTS STI CLASSIC FUNDS May 31, 1997 UNAUDITED 7. Consents of Sole Shareholder: On December 10, 1996, the sole shareholder of the Classic Institutional Cash Management Money Market Fund and Classic Institutional U.S. Treasury Securities Money Market Fund (the "Funds") approved the following appointments: SEI Fund Resources to serve as administrator of the Funds, Trusco Capital Management to serve as investment adviser to the assets of the Funds, SEI Investments Distribution Co. to serve as distributor of the shares of the Funds and Arthur Andersen LLP to serve as independent public accountants of the Funds. STI CLASSIC FUNDS SUPPLEMENT DATED JUNE 30, 1997 TO THE CLASSIC INSTITUTIONAL CASH MANAGEMENT MONEY MARKET FUND AND CLASSIC INSTITUTIONAL U.S. TREASURY MONEY MARKET FUND STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 11, 1996 The Statement of Additional Information for the STI Classic Funds is hereby amended and supplemented by the following unaudited financial statements of STI Classic Funds Classic Institutional Cash Management Money Market Fund and Classic Institutional U.S. Treasury Money Market Fund for the period ended May 31, 1997. FINANCIAL HIGHLIGHTS THE STI CLASSIC FUNDS For the Period from Inception Through May 31, 1997 UNAUDITED For a Share Outstanding Throughout the Period
------------------ ------------- Classic Classic Institutional Cash Institutional Management U.S. Treasury Money Market Money Market Fund (1) Fund (1) ------------------ ------------- Net Asset Value Beginning of Period $1.00 $1.00 Net Investment Income 0.02 0.02 Net Realized and Unrealized Gain on Investments - - Distributions from Net Investment Income (0.02) (0.02) Distributions from Realized Capital Gains - - Net Asset Value End of Period $1.00 $1.00 Total Return* 2.51% 2.46% Period Net Assets End of Period (000) $395,673 $20,238 Ratio of Expenses to Average Net Assets** 0.06% 0.09% Ratio of Net Investment Income to Average Net Assets** 5.49% 5.27% Ratio of Expenses to Average Net Assets (Excluding Waivers and Contributions)** 0.52% 0.51% Ratio of Net Investment Income to Average Net Assets (Excluding Waivers and Contributions)** 5.03% 4.85%
* Return is for the period indicated and has not been annualized. ** Annualized. (1) Commenced operations December 12, 1996. The accompanying notes are an integral part of the financial statements. PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE. STI CLASSIC FUNDS SUPPLEMENT DATED JUNE 30, 1997 TO THE EMERGING MARKET EQUITY FUND AND SMALL CAP EQUITY FUND STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 31, 1996 The Statement of Additional Information for the STI Classic Funds is hereby amended and supplemented by the following unaudited financial statements of STI Classic Funds Emerging Market Equity Fund and Small Cap Equity Fund for the period ended May 31, 1997. PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE. STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 UNAUDITED SMALL CAP EQUITY FUND - -------------------------------------------------------------------------------- SHARES VALUE(000) - -------------------------------------------------------------------------------- COMMON STOCKS (95.2%) APPAREL/TEXTILES (4.9%) Guilford Mills 132,250 $ 2,595 Springs Industries, Cl A 75,200 3,807 -------- Total Apparel/Textiles 6,402 -------- AUTOMOTIVE (2.5%) Regal Beloit 115,700 3,081 Winnebago Industries 20,400 140 -------- Total Automotive 3,221 -------- BANKS (6.6%) Banco Latinamericano de Exportaciones 46,600 2,196 Bank United, Cl A 28,700 997 Interwest Bancorp 26,700 935 Klamath First Bancorp 61,500 1,138 National Bancorp of Alaska 14,400 1,130 Seacoast Banking of Florida 49,000 1,286 West Coast Bancorp 40,625 1,016 -------- Total Banks 8,698 -------- BEAUTY PRODUCTS (0.7%) Chemed 26,300 960 -------- BROADCASTING, NEWSPAPERS & ADVERTISING (0.1%) TCA Cable Television 3,000 101 -------- BUILDING (2.2%) Columbus Mckinnon 63,700 1,147 Commonwealth Industries 94,700 1,788 -------- Total Building 2,935 -------- CHEMICALS (2.4%) WD-40 32,700 1,856 Wellman 73,100 1,307 -------- Total Chemicals 3,163 -------- COAL MINING (0.8%) Pittston Minerals Group 73,400 1,009 -------- COMMERCIAL PRINTING (2.4%) Bowne & Company 106,000 3,167 -------- COMMUNICATIONS EQUIPMENT (2.7%) Harman International 84,800 3,540 -------- COMPUTERS & SERVICES (0.8%) Valmont Industries 24,100 1,012 -------- CONCRETE & MINERAL PRODUCTS (0.3%) Ameron 6,600 366 -------- CONSUMER PRODUCTS (1.5%) Brown Group 107,000 1,926 -------- ELECTRICAL SERVICES (2.4%) Minnesota Power & Light 65,300 1,894 TNP Enterprises 56,000 1,232 -------- Total Electrical Services 3,126 -------- FOOD, BEVERAGE & TOBACCO (1.6%) Smucker (J.M.), Cl B 115,100 2,144 -------- GAS/NATURAL GAS (2.3%) Eastern Enterprises 12,800 442 Enron Global Power & Pipelines L.C.C. 12,800 422 Northwest Natural Gas 39,050 952 Wicor 33,900 1,246 -------- Total Gas/Natural Gas 3,062 -------- GLASS PRODUCTS (1.9%) Libbey 74,800 2,497 -------- HOUSEHOLD FURNITURE & FIXTURES (2.0%) Bush Industries 116,300 2,617 -------- HOUSEHOLD PRODUCTS (1.7%) Lilly Industries Incorporated, Cl A 9,000 189 LSI Industries 72,300 1,103 Thomas Industries 34,000 956 -------- Total Household Products 2,248 -------- SMALL CAP EQUITY FUND--CONCLUDED - -------------------------------------------------------------------------------- SHARES VALUE(000) - -------------------------------------------------------------------------------- INSURANCE (3.5%) GCR Holdings 7,800 $ 209 IPC Holdings 79,300 2,022 Lawyers Title 43,800 788 Willis Corroon Public Limited 132,900 1,495 -------- Total Insurance 4,514 -------- LEISURE (3.1%) Cross A.T., Cl A 54,800 610 K2 55,500 1,603 Movado Group 86,625 1,917 -------- Total Leisure 4,130 -------- MACHINERY (3.7%) Hardinge 38,000 988 Zurn Industries 145,900 3,866 -------- Total Machinery 4,854 -------- MARINE TRANSPORTATION (2.9%) Knightsbridge Tankers Limited* 50,000 1,231 Sea Containers 127,200 2,544 -------- Total Marine Transportation 3,775 -------- MEDICAL PRODUCTS & SERVICES (2.3%) Invacare 117,000 2,516 Optical Coating Laboratories 43,900 466 -------- Total Medical Products & Services 2,982 -------- MISCELLANEOUS BUSINESS SERVICES (4.3%) ABM Industries 99,700 1,932 Kelly Services, Cl A 61,000 1,792 Sotheby's Holdings, Cl A 124,000 1,922 -------- Total Miscellaneous Business Services 5,646 -------- MISCELLANEOUS CONSUMER SERVICES (1.4%) Angelica 104,900 1,888 -------- PAPER & PAPER PRODUCTS (2.2%) Earthgrains 34,200 1,949 Rock Tenn, Cl A 63,000 953 -------- Total Paper & Paper Products 2,902 -------- PETROLEUM & FUEL PRODUCTS (1.9%) Giant Industries 44,700 648 Monterey Resources 118,500 1,866 -------- Total Petroleum & Fuel Products 2,514 -------- PRINTING & PUBLISHING (4.7%) Banta 87,000 2,414 John H. Harland 163,300 3,736 -------- Total Printing & Publishing 6,150 -------- RETAIL (5.7%) Ingles Markets, Cl A 136,000 1,964 Morrison Health Care 103,100 1,675 Talbots 143,700 3,772 -------- Total Retail 7,411 -------- RUBBER & PLASTIC (2.2%) West Company 96,100 2,835 -------- SEMI-CONDUCTORS/INSTRUMENTS (3.0%) Methode Electronics, Cl A 231,200 3,902 -------- STEEL & STEEL WORKS (0.7%) Schnitzer Steel Industries, Cl A 38,800 970 -------- TRUCKING (1.4%) Arnold Industries 107,300 1,797 -------- WATER UTILITIES (1.0%) United Water Resources 74,100 1,334 -------- WHOLESALE (11.4%) A.M. Castle 87,600 1,905 Applied Industrial Technology 45,500 1,598 Barnes Group 13,300 357 Bindley Western Industries 75,600 1,663 Fisher Scientific International 69,000 2,501 Quaker State 255,400 3,863 Rykoff-Sexton 52,100 996 Vital Signs 101,000 2,007 -------- Total Wholesale 14,890 -------- Total Common Stocks (Cost $117,046) 124,688 -------- - -------------------------------------------------------------------------------- SHARES/FACE AMOUNT(000) VALUE(000) - -------------------------------------------------------------------------------- PREFERRED STOCKS (1.9%) PRECIOUS METALS (1.9%) Coeur D'Alene Mines 151,100 $ 2,512 -------- Total Preferred Stocks (Cost $2,502) 2,512 -------- REPURCHASE AGREEMENT (3.7%) Deutsche Bank 5.56%, dated 05/30/97, matures 06/02/97, repurchase price $4,900,503.77 (collateralized by FHLMC obligation, total par value $5,062,244, 6.092%, 10/01/32, total market value $4,996,199) $4,898 4,898 -------- Total Repurchase Agreement (Cost $4,898) 4,898 -------- Total Investments (100.8%) (Cost $124,446) 132,098 -------- Other Assets and Liabilities, Net (-0.8%) (1,049) -------- NET ASSETS: Fund shares of the Trust Class (unlimited authorization -- no par value) based on 11,836,719 outstanding shares of beneficial interest 121,332 Undistributed net investment income 316 Accumulated net realized gain on investments 1,749 Net unrealized appreciation on investments 7,652 -------- Total Net Assets (100.0%) $131,049 -------- -------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 11.07 -------- -------- EMERGING MARKETS EQUITY FUND - -------------------------------------------------------------------------------- SHARES VALUE(000) - -------------------------------------------------------------------------------- FOREIGN COMMON STOCKS (84.7%) ARGENTINA (6.9%) Banco Frances del Rio de la Plata ADR* 16,000 $ 526 Capex, Cl A 33,700 324 Massalin Particulares, Cl B 38,800 231 Metrogas ADR 32,204 314 Quilmes Industrial 37,000 430 Transportadora de Gas del Sur ADR 33,000 417 YPF ADR, Cl D 16,000 480 -------- Total Argentina 2,272 -------- BRAZIL (4.3%) Makro Atacadista GDR 27,500 344 Souza Cruz 50,000 467 Telecom Brasileiras ADR 3,230 444 Votorantim Celelose Papel Receibos* 1,476,876 40 Unibanco 12,000 414 -------- Total Brazil 1,709 -------- CHILE (1.1%) Administradora de Fondos de Pensiones Provida ADR 21,500 441 -------- COLOMBIA (1.6%) Banco de Colombia GDS 24,700 152 Banco Ganadero ADR 15,600 476 -------- Total Colombia 628 -------- CZECH REPUBLIC (0.5%) Komercni Banka GDR 8,400 204 -------- ECUADOR (0.4%) LA Cemento Nacional GDR 800 158 -------- GREECE (5.3%) Greek Telecom 7,800 194 Hellas Can Packaging 25,500 467 Papastratos Cigarettes 15,400 316 Teletypos 130,000 533 Titan Cement Company 5,700 568 -------- Total Greece 2,078 -------- The accompanying notes are an integral part of the financial statements. EMERGING MARKETS EQUITY FUND--CONTINUED - -------------------------------------------------------------------------------- SHARES VALUE(000) - -------------------------------------------------------------------------------- HONG KONG (9.2%) China Hong Kong Photo 1,086,000 $ 315 Esprit Asia Holdings 616,000 354 First Pacific 142,000 181 National Mutual Asia 358,000 390 Peregrine Investment Holdings 137,000 244 Peregrine Investments Warrants* 6,600 2 Road King Infrastructure* 400,000 390 Seoul Horizon Trust 17,000 212 Shenzhen Express* 700,000 235 Sinocan 920,000 365 South China Morning Post Holdings 460,000 442 Wing Hang Bank 108,000 514 -------- Total Hong Kong 3,644 -------- HUNGARY (1.4%) Egis* 6,000 353 Gedeon Richter GDR 2,500 207 -------- Total Hungary 560 -------- INDIA (4.5%) Hindalco GDR 6,700 221 India Cements GDR 54,000 124 Indian Aluminium GDR 15,800 58 Indian Aluminum GDS 15,300 57 Tata Electric GDR 210 71 Videsh Sanchar Nigam GDR 60,000 1,236 -------- Total India 1,767 -------- INDONESIA (8.8%) Budi Acid Jaya, F 185,000 228 Citra Marga Nusaphala 472,000 471 Dankos Laboratories, F 665,000 561 Indonesian Satellite ADR 13,500 403 Matahari Putra Prima 251,000 447 Modern Photo Film, F 150,000 546 Tambang Timah, F 281,000 451 Tempo Scan Pacific 164,000 351 -------- Total Indonesia 3,458 -------- ISRAEL (5.8%) Blue Square Stores* 57,300 587 ECI Telecommunications 22,000 509 Koor Industries ADR 20,300 355 Nice Systems ADR* 18,000 549 Orbotech* 10,000 279 -------- Total Israel 2,279 -------- MALAYSIA (3.4%) Aluminium of Malaysia 231,000 325 Edaran Otomobil 28,000 244 Petronas Dagangan 170,000 403 Southern Bank Warrants* 15,000 10 UMW Holdings 72,000 370 -------- Total Malaysia 1,352 -------- MEXICO (8.3%) Femsa, Cl B 106,000 562 Grupo Carso 66,000 375 Grupo Continental 167,750 418 Grupo Elektra GDR 21,100 401 Herdez, Cl B 1,035,000 458 Kimberly Clark, Cl A 95,500 331 Nacional de Drogas, Cl L 139,000 459 Telefonos de Mexico ADR 6,500 288 -------- Total Mexico 3,292 -------- PANAMA (1.1%) Banco Latinamericano de Exportaciones 9,000 424 -------- PERU (2.1%) Cerveceria Backus & Johnston 356,240 320 CPT Telefoncia del Peru 15,000 381 Telefonica del Peru, Cl B 50,500 125 -------- Total Peru 826 -------- - -------------------------------------------------------------------------------- SHARES VALUE(000) - -------------------------------------------------------------------------------- PHILIPPINES (3.6%) Bacnotan Consolidated 135,600 $ 250 Benpres GDR* 65,800 467 First Philippene Holdings 174,375 288 Philippine Long Distance 14,000 414 -------- Total Philippines 1,419 -------- PORTUGAL (2.5%) Banco Totta & Acores 21,700 309 Cimentos de Portugal 15,020 330 Portugal Telecom 600 23 Portugal Telecom ADR 8,200 316 -------- Total Portugal 978 -------- SINGAPORE (2.0%) Amtek Engineering 180,000 311 Elec & Eltek International 84,000 496 -------- Total Singapore 807 -------- SOUTH AFRICA (8.6%) Amalgated Banks of South Africa 39,642 245 Anglo American Coal 3,260 216 Barlow 37,700 399 De Beers Consolidated Mines ADR 5,500 194 Gencor 44,000 193 Kersaf Investments 48,600 381 Liberty Life Association of Africa 14,000 392 Rembrandt Group 30,400 306 Richemont 26,500 360 Sasol 26,200 321 Suncrush 181,000 387 -------- Total South Africa 3,394 -------- SOUTH KOREA (1.5%) Pohang Iron & Steel ADR 21,000 609 -------- THAILAND (1.7%) K.R. Precision, F 46,500 324 Nation Publishing 120,000 344 -------- Total Thailand 668 -------- - -------------------------------------------------------------------------------- SHARES/FACE AMOUNT(000) VALUE(000) - -------------------------------------------------------------------------------- TURKEY (0.1%) Dogan Holding* 2,800,000 $ 60 -------- Total Foreign Common Stocks (Cost $31,409) 33,477 -------- FOREIGN PREFERRED STOCKS (6.2%) BRAZIL (6.2%) Banco Bradesco 42,150,000 336 Banco Itau SA Pref 800,000 411 Brahma 440,000 319 Cemig 2,800,000 128 Centrais Eletricas de Santa Catarina, Cl B 103,000 124 Globex Utilidades 15,500 235 Lojas Renner 7,800,000 452 Multibras Eletrodomes* 228,400 233 Votorantim Celulose Papel* 7,500,000 203 -------- Total Foreign Preferred Stocks (Cost $2,386) 2,441 -------- FOREIGN CONVERTIBLE BONDS (0.4%) TURKEY (0.4%) Medya Holdings Int'l 10.000%, 06/28/01 200 160 -------- Total Foreign Convertible Bonds (Cost $175) 160 -------- EMERGING MARKETS EQUITY FUND--CONCLUDED - -------------------------------------------------------------------------------- SHARES/FACE AMOUNT(000) VALUE(000) - -------------------------------------------------------------------------------- TIME DEPOSITS (7.6%) Cayman Island 5.250%, 06/02/97 $ 3,000 $ 3,000 -------- Total Time Deposits (Cost $3,000) 3,000 -------- Total Investments (98.9%) (Cost $36,970) 39,078 -------- Other Assets and Liabilities, Net (1.1%) 417 -------- NET ASSETS: Fund shares of the Trust Shares (unlimited authorization -- no par value) based on 3,660,064 outstanding shares of beneficial interest $ 37,181 Undistributed net investment income 144 Accumulated net realized gain on investments and foreign currency transactions 62 Net unrealized appreciation on investments 2,108 -------- Total Net Assets (100.0%) $ 39,495 -------- -------- Net Asset Value, Offering and Redemption Price Per Share -- Trust Shares $ 10.79 -------- -------- The accompanying notes are an integral part of the financial statements. STATEMENT OF NET ASSETS THE STI CLASSIC FUNDS May 31, 1997 UNAUDITED KEY TO ABBREVIATIONS USED IN THE STATEMENT OF NET ASSETS 1 In local currency ADR American Depository Receipt Cl Class F Foreign Registry Shares FHLMC Federal Home Loan Mortgage Corporation GDR Global Depository Receipt GDS Global Depository Shares * Non-income producing securities STATEMENT OF OPERATIONS (000) THE STI CLASSIC FUNDS For the Period Ended May 31, 1997 UNAUDITED
---------------- ---------------- Emerging Markets Small Cap Equity Equity Fund(1) Fund (1) ---------------- ---------------- 01/31/97 - 01/31/97 - 05/31/97 05/31/97 ---------------- ---------------- Income : Interest Income $ 49 $ 92 Dividend Income 272 765 Less Foreign Taxes Withheld (14) - ---------------- ---------------- Total Income 307 857 ---------------- ---------------- Expenses : Investment Advisory Fees 137 322 Investment Advisory Fees Waived (53) (48) Administrator Fees 7 18 Registration Fees 11 32 Transfer Agent Fees 5 6 Transfer Agent Out of Pocket Fees 1 1 Printing Fees 6 2 Professional Fees 1 2 Custodian Fees 43 1 Amortization of Deferred Organizational Costs 1 - Miscellaneous Fees 4 - ---------------- ---------------- Total Expenses 163 336 ---------------- ---------------- Net Investment Income 144 521 ---------------- ---------------- Net Realized and Unrealized Gain (Loss) on Investments Net Realized Gain (Loss) on Securities Sold 80 1,749 Net Realized Loss on Foreign Currency Transactions (18) - Net Change in Unrealized Appreciation on Investments 2,108 7,652 ---------------- ---------------- Total Net Realized and Unrealized Gain on Investments 2,170 9,401 ---------------- ---------------- Increase in Net Assets Resulting From Operations $ 2,314 $ 9,922 ---------------- ----------------
Amounts designated as "-" are either $0 or round to $0. (1) Commencement of operations. The accompanying notes are an integral part of the financial statements. STATEMENT OF CHANGES IN NET ASSETS (000) THE STI CLASSIC FUNDS For the Period Ended May 31, 1997 UNAUDITED
---------------- ---------------- Emerging Markets Small Cap Equity Equity Fund(1) Fund (1) ---------------- ---------------- 01/31/97 - 01/31/97 - 05/31/97 05/31/97 ---------------- ---------------- Operations: Net Investment Income $ 144 $ 521 Net Realized Gain on Securities Sold 80 1,749 Net Realized Loss on Foreign Currency Transactions (18) Net Change in Unrealized Appreciation on Investments 2,108 7,652 ---------------- ---------------- Increase in Net Assets Resulting From Operations 2,314 9,922 ---------------- ---------------- Distributions to Shareholders: Net Investment Income - (205) Capital Gains - - ---------------- ---------------- Total Distributions - (205) ---------------- ---------------- Capital Share Transactions (1): Proceeds from Shares Issued 42,043 126,046 Reinvestments of Cash Distributions - 137 Cost of Shares Redeemed (4,862) (4,851) ---------------- ---------------- Increase in Net Assets from Share Transactions 37,181 121,332 ---------------- ---------------- Total Increase in Net Assets 39,495 131,049 ---------------- ---------------- Net Assets: Beginning of Period - - ---------------- ---------------- End of Period $ 39,495 $ 131,049 ---------------- ---------------- ---------------- ---------------- (1) Shares Issued and Redeemed: Proceeds from Shares Issued 4,128 12,290 Reinvestments of Cash Distributions - 13 Cost of Shares Redeemed (468) (466) ---------------- ---------------- Net Share Transactions 3,660 11,837 ---------------- ----------------
Amounts designated as "-" are either $0 or round to $0. (1) Commencement of operations. The accompanying notes are an integral part of the financial statements. 1. Organization: The STI Classic Funds (the "Trust") was organized as a Massachusetts business trust under a Declaration of Trust dated January 15, 1992. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company with twenty-four portfolios: the Prime Quality Money Market Fund, the U.S. Government Securities Money Market Fund, the Tax-Exempt Money Market Fund, the Classic Institutional Cash Management Money Market Fund, the Classic Institutional U.S. Treasury Fund (collectively the "Money Market Funds"), the Investment Grade Bond Fund, the Investment Grade Tax-Exempt Bond Fund, the Short-Term U.S. Treasury Securities Fund, the Short-Term Bond Fund, the Capital Growth Fund, the Value Income Stock Fund, the Sunbelt Equity Fund, the Mid-Cap Equity Fund, the Balanced Fund, the Florida Tax-Exempt Bond Fund, the Georgia Tax-Exempt Bond Fund, the Tennessee Tax-Exempt Bond Fund, the U.S. Government Securities Fund, the Limited-Term Federal Mortgage Securities Fund, the Small Cap Equity Fund, the International Equity Fund, the International Equity Index Fund and the Emerging Markets Equity Fund (collectively the "Non-Dollar Funds"). The assets of each portfolio are segregated, and a shareholder's interest is limited to the Fund in which shares are held. Each Fund's prospectus provides a description of the Fund's investment objectives, policies and strategies. The footnotes herein pertain only to the the Small Cap Equity Fund and the Emerging Markets Equity Fund (collectively the "Funds"). 2. Significant Accounting Policies: SECURITY VALUATION -- Investment securities held by the Funds which are listed on a securities exchange for which market quotations are available are valued at the last quoted sales price on each business day. If there is no such reported sale, these securities and unlisted securities for which market quotations are readily available are valued at the most recently quoted bid price. Foreign securities in the Emerging Markets Equity Fund are valued based upon quotations from the primary market in which they are traded. Debt obligations with sixty days or less remaining until maturity may be valued at their amortized cost. FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a regulated investment company for Federal income tax purposes and distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required. SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on the date the security is purchased or sold (trade date). Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Costs used in determining net realized gains and losses on the sales of investment securities are those of the specific securities sold adjusted for the accretion and amortization of purchase discounts and premiums during the respective holding period. Purchase discounts and premiums on securities held by the Funds are accreted and amortized to maturity using the scientific interest method, which approximates the effective interest method. REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase agreements are held by the custodian bank until the respective agreements mature. Provisions of the repurchase agreements ensure that the market value of the collateral, including accrued interest thereon, is sufficient in the event of default of the counterparty. If the counterparty defaults and the value of the collateral declines or if the counterparty enters into an insolvency proceeding, realization of the collateral by the Funds may be delayed or limited. NET ASSET VALUE PER SHARE-- The net asset value per share of each Fund is calculated each business day, by dividing the total value of each Fund's assets, less liabilities, by the number of shares outstanding. FOREIGN CURRENCY TRANSLATION -- The books and records of the International Equity, the International Equity Index and the Emerging Markets Equity Funds are maintained in U.S. dollars on the following basis: (I) market value of investment securities, assets and liabilities at the current rate of exchange; and (II) purchases and sales of investment securities, income and expenses at the relevant rates of exchange prevailing on the respective dates of such transactions. The Emerging Markets Equity Fund do not isolate that portion of gains and losses on investments in equity securities that is due to changes in the foreign exchange rates from that which is due to changes in market prices of equity securities. The Emerging Markets Equity Fund report certain foreign currency related transactions as components of realized and unrealized gains and losses for financial reporting purposes, whereas such components are treated as ordinary income for Federal income tax purposes. OTHER -- Expenses that are directly related to a specific Fund are charged to that Fund. Class specific expenses are borne by that class. Other operating expenses of the Trust are pro-rated to the Funds on the basis of relative net assets. Fund expenses are pro-rated to the respective classes on the basis of relative net assets. Distributions from net investment income are declared and paid each calendar quarter by the Small Cap Equity Fund. Distributions from net investment income are declared and paid annually by the Emerging Markets Fund. Any net realized capital gains on sales of securities are distributed to shareholders at least annually. 3. Organization Costs and Transactions with Affiliates: The Trust incurred organization costs of approximately $653,100. These costs have been deferred in the accounts of the Funds and are being amortized on a straight line basis over a period of sixty months commencing with operations. The costs include legal fees of approximately $41,100 for organizational work performed by a law firm of which two officers of the Trust are partners. On March 18, 1992, the Trust sold initial shares of beneficial interest to SEI Fund Resources (the "Administrator"). In the event any of the initial shares of the Trust are redeemed by any holder thereof during the period that the Trust is amortizing its organizational costs, the redemption proceeds payable to the holder thereof will be reduced by the unamortized organizational costs in the same ratio as the number of initial shares being redeemed bears to the number of initial shares outstanding at the time of redemption. Certain officers of the Trust are also officers of the Administrator and/or SEI Investments Distribution Co. (the "Distributor"). Such officers are paid no fees by the Trust for serving as officers of the Trust. 4. Administration and Transfer Agency Servicing Agreements: The Trust and the Administrator are parties to an Administration Agreement dated May 29, 1995, under which the Administrator provides administrative services for an annual fee (expressed as a percentage of the combined average daily net assets of the Trust and STI Classic Variable Annuity Trust) of: .10% up to $1 billion, .07% on the next $4 billion, .05% on the next $3 billion, .045% on the next $2 billion and .04% for over $10 billion. The Trust and Federated Services Company are parties to a Transfer Agency servicing agreement dated May 14, 1994 under which Federated Services Company provides transfer agency services to the Trust. 5. Investment Advisory and Custodian Agreements: The Trust and STI Capital Management, N.A., ("STI Capital Management, N.A."), Trusco Capital Management ("Trusco"), the SunTrust Bank, Atlanta and SunTrust Bank, Chattanooga have entered into advisory agreements dated May 29, 1992, July 15, 1993, December 20, 1993 and December 20, 1993 respectively. Under terms of the respective agreements, the Funds are charged the following annual fees based upon average daily net assets:
Maximum Maximum Maximum Institutional Trust Investor Investor Flex Share Flex Annual Share Share Share Share Distribu- Share Advisory Maximum Maximum Distribu- Maximum tion and Maximum Fee Expense Expense tion Fee Expense Service Fee Expense -------- ------------- ------- --------- -------- ----------- ------- STI Capital Management, N.A.: Small Cap Equity Fund 1.15% -- 1.20% -- -- -- -- Emerging Markets Equity Fund 1.30% -- 1.55% -- -- -- --
The Investment Advisors, the Administrator and the Distributor have voluntarily agreed to waive all or a portion of their fees (and to reimburse Funds' expenses) in order to limit operating expenses to an amount as outlined in the table above. Fee waivers and expense reimbursements are voluntary and may be terminated at any time. SunTrust Bank, Atlanta, formerly Trust Company Bank, acts as custodian for all the Funds except the International Equity, the International Equity Index and the Emerging Markets Equity Funds who utilize The Bank of New York as custodian. Fees of the Custodians are paid on the basis of the net assets of the Funds. The Custodians play no role in determining the investment policies of the Trust or which securities are to be purchased or sold in the Funds. 6. Investment Transactions: The cost of purchases and the proceeds from sales of securities, excluding short-term investments for the period ended May 31, 1997, were as follows: Purchases Sales U.S. Government U.S. Government Securities Other Securities Other (000) (000) (000) (000) --------------- ----- --------------- ----- Small Cap Equity Fund -- $138,246 -- $20,448 Emerging Market Equity Fund -- 39,912 -- 6,023 At May 31, 1997, the total cost of securities and the net realized gains or losses on securities sold for Federal income tax purposes were not materially different from amounts reported for financial reporting purposes. The aggregate gross unrealized appreciation and depreciation for securities held by the Funds at May 31, 1997, were as follows:
Aggregate gross Aggregate gross Net unrealized unrealized appreciation unrealized depreciation appreciation (000) (000) (000) ----------------------- ----------------------- -------------- Small Cap Equity Fund $8,816 $1,164 $7,652 Emerging Market Equity Fund 3,401 1,293 2,108
7. Consents of Sole Shareholder: On December 30, 1996, the sole shareholder of the Emerging Markets Equity Fund and Small Cap Equity Fund (the "Funds") approved the following: SEI Fund Resources to serve as administrator of the Funds, STI Capital Management, N.A. to serve as investment adviser to the assets of the Funds, SEI Investments Distribution Co. to serve as distributor of the shares of the Funds, the Distribution and Service Plan for Flex Shares, the Distribution Plan for Investor Shares, and Arthur Andersen LLP to serve as independent public accountants of the Funds. STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- STI CLASSIC FUNDS MAY 31, 1997 KEY TO ABBREVIATIONS USED IN THE STATEMENT OF NET ASSETS ADR American Depository Receipt AMBAC Security insured by the American Municipal Bond Assurance Company AMT Alternative Minimum Tax ARM Adjustable Rate Mortgage Cl Class COP Certificate of Participation CV Convertible Security ETM Escrowed to Maturity FGIC Security insured by the Financial Guaranty Insurance Corporation FHA Federal Housing Authority FHLB Federal Home Loan Bank FHLMC Federal Home Loan Mortgage Corporation FNMA Federal National Mortgage Association FSA Security insured by Financial Security Assurance GDR Global Depository Receipt GNMA Government National Mortgage Association GO General Obligation LYON Liquid Yield Option Note MBIA Security insured by the Municipal Bond Investors Assurance MTN Medium Term Note RB Revenue Bond REIT Real Estate Investment Trust REMIC Real Estate Mortgage Investment Conduit Ser Series SLMA Student Loan Marketing Association STRIPS Separately Traded Registered Interest and Principal Security TAN Tax Anticipation Note TECP Tax Exempt Commercial Paper TRAN Tax & Revenue Anticipation Note VRDN Variable Rate Demand Note * Non-income producing securities (A) Zero Coupon Bond (B) Private Placement Security (C) Variable rate security. The rate reported on the Statement of Net Assets is the rate in effect on May 31, 1997. (D) Put and demand features exist requiring the issuer to repurchase the instrument prior to maturity. (E) Securities are held in connection with a letter of credit issued by a major bank. (F) Income on security may be subject to the Alternative Minimum Tax. (G) Collateralized by U.S. Government Securities STI CLASSIC FUNDS SUPPLEMENT DATED JUNE 30, 1997 TO THE EMERGING MARKET EQUITY FUND AND SMALL CAP EQUITY FUND STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 31, 1996 The Statement of Additional Information for the STI Classic Funds is hereby amended and supplemented by the following unaudited financial statements of STI Classic Funds Emerging Market Equity Fund and Small Cap Equity Fund for the period ended May 31, 1997. FINANCIAL HIGHLIGHTS THE STI CLASSIC FUNDS For the Period from Inception Through May 31, 1997 UNAUDITED For a Share Outstanding Throughout the Period
-------------- -------------- Emerging Small Cap Markets Equity Equity Fund(1) Fund (1) -------------- -------------- Net Asset Value Beginning of Period $ 10.00 $ 10.00 Net Investment Income 0.04 0.05 Net Realized and Unrealized Gain on Investments 0.75 1.04 Distributions from Net Investment Income 0.00 (0.02) Net Asset Value End of Period $ 10.79 $ 11.07 Total Return* 7.90% 10.97% Period Net Assets End of Period (000) $ 39,495 $ 131,049 Ratio of Expenses to Average Net Assets** 1.55% 1.20% Ratio of Net Investment Income to Average Net Assets** 1.37% 1.86% Ratio of Expenses to Average Net Assets (Excluding Waivers and Contributions)** 2.05% 1.37% Ratio of Net Investment Income to Average Net Assets (Excluding Waivers and Contributions)** 0.87% 1.69% Portfolio Turnover Rate 23.88% 27.46% Average Commission Rate (A) $ 0.0019 $ 0.0523
* Return is for the period indicated and has not been annualized. ** Annualized. (A) Average commission rate paid per share for the security purchases and sales during the period. (1) Commenced operations January 31, 1997. The accompanying notes are an integral part of the financial statements. PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE. -----END PRIVACY-ENHANCED MESSAGE-----