-----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, AKiwf6SMlldRRZWvBDH7nWuKBkXHarVGbp/pc6JL2ptsie0Zj9PdhJTsv010pVsH NKa77mgdmqzuGsESvbNosQ== 0000935069-97-000125.txt : 19970826 0000935069-97-000125.hdr.sgml : 19970826 ACCESSION NUMBER: 0000935069-97-000125 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970825 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: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-06557 FILM NUMBER: 97669248 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 N-30D 1 PILLAR FUNDS SEMI-ANNUAL REPORT [Pillar Logo Omitted] The Pillar Funds Your Investment Foundation [Pillar Background art Omitted] SEMI-ANNUAL REPORT To Shareholders June 30, 1997 TABLE OF CONTENTS Letter to Shareholders.........................1 Statement of NetAssets ........................4 Statement of Operations ......................43 Statements of Changes in Net Assets ..........46 Financial Highlights .........................52 Notes to Financial Statements ................57 NOT FDIC May Lose Value INSURED No Bank Guarantee [PILLAR LOGO OMITTED] JUNE 30, 1997 Letter to Shareholders After a roller-coaster performance in the first quarter, stocks had one of their best performances ever in the second three months of this year. Worries over too strong a pace of economic growth, which had infected investors by March and tipped the scales for the Federal Reserve toward increasing short-term interest rates, dissipated as it became apparent that most indicators of business activity were moderating sharply in the second quarter. Helping to propel stocks during this period was still robust, and higher than expected, growth in the corporate earnings and very healthy money flows into equity mutual funds. Bond yields responded as well by falling during the second quarter but have not entirely retraced the first quarter's rise. In contrast to the heady growth of Gross Domestic Product (GDP) in the first quarter which included strong gains in consumer spending and relatively high rates of inventory accumulation, production in the second quarter is expected to be much more muted. Healthy gains in employment coupled with gently rising wages continue to generate very satisfactory growth in personal income. This spending power did not entirely flow through to purchases in the second quarter suggesting that there is some pent-up ability to consume. So we may see some pick up in spending in the second half of the year. It is this potential for faster growth and the implications for inflation which concerns the Federal Reserve. From their vantage point, any use of resources (labor, productive capacity) beyond the "long run" rate of increase of these resources is likely to be inflationary, particularly when utilization rates for these resources is very high as it is today. However, this is a slippery path to try to negotiate. Slippery because it suggests that we are sure of what labor resources are going to be available when there are two major sources of error present. First, low levels of unemployment and rising wages are prompting more people to look for work, stimulating growth in our labor force. And second, our economy has the ability to substitute overseas labor for domestic labor by raising the level of imports. (CONTINUED NEXT PAGE) 1 The path is also slippery because our ability to measure productivity is also subject to substantial error. Indeed, one explanation for the current low level of inflation may be that our productivity statistics are understated. If that is the case, and there are many observers who would support that contention, it also explains several other trends in force. Corporate capital spending continues to be quite robust and is disproportionately directed at computer and communication equipment and software, one sign of the productivity gains to be had. Additionally, growth in corporate profits, quarter by quarter, is still outpacing expectations. This continued margin expansion, which many corporations are signaling they can continue to generate for a number of quarters into the future, is another sign of healthy productivity gains. So there is considerable evidence for believing that we can support a higher long-run real growth rate than the monetary authorities are willing to concede. And evidence in the market place that current monetary conditions may even be too tight. Witness the continuing decline in the price of gold and the recent record string of negative changes in the Producer Price Index. These conditions suggest that we can remain optimistic about the trend of interest rates. As mentioned earlier, it would not be surprising to see some modest re-acceleration of GDP growth in the second half. That change may prompt renewed fears about inflation. But our belief is they will prove to be unfounded and that the general direction of rates will be down. Real rates are still at the upper band of historical experience and borrowing demands from all sectors, government, corporate and consumer, do not show any signs of acceleration. Another positive influence on stock prices has been the higher probability of a reduction in the capital gains tax in this session of Congress. Much of the debate around the idea is that this is of benefit only to the rich. Much more important are the incentives to savings which stimulate entrepreneurial activity and capital investment, creating additional jobs and income for the entire economy. There is substantial evidence that these effects are quite powerful and yet the forecasts of the benefits to be gained greatly downplay their impact. 2 [PILLAR LOGO OMITTED] JUNE 30, 1997 Despite all these positive signs, this is by no means a time for complacency. Valuation levels for the stock market are in virtually uncharted territory, as the environment for the U.S. equity investor has rarely been more favorable. But we should not lose sight of two elements. First, competition in the marketplace remains ferocious. Any misstep by a corporate management can be devastating. The need to carefully deploy resources only where advantage can be gained is vital. In many cases, size has become a competitive advantage so it should be no surprise that the recent relative investment performance of large capitalization companies has been superior. Second, the greatest rewards will rebound to those companies who can sustain superior revenue growth. Whether it's because of the markets they serve or some exploitable advantage, growth in revenues is truly going to separate the men from the boys. For the overwhelming evidence at this point is that unit growth, which is what is needed when prices can't be raised, is a scarce commodity. Our investment strategy remains directed toward sectors and companies that can support superior revenue growth. This fixation continues to guide us toward technology, health care, financial services and global consumer products as the major building blocks of our portfolios -- technology because of its pivotal role in corporate productivity worldwide, health care and financial services because of domestic and international demographic trends in place and global consumer products because of the opportunities created by emerging markets. These themes should serve our shareholders well in the months and years ahead. Sincerely, [Sig Omiited] [Sig Omiited] David G. Lee Hilton M. Jervey, CFA President and CEO Senior Vice President The Pillar Funds Chief Investment Officer Summit Bank 3 Statement of Net Assets U.S. TREASURY SECURITIES MONEY MARKET FUND - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS--97.0% U.S. Treasury Bills (A) 4.440%, 07/10/97 $20,000 $ 19,978 4.660%, 07/17/97 90,000 89,815 4.900%, 07/24/97 58,000 57,820 4.770%, 07/31/97 5,000 4,980 4.800%, 08/07/97 85,000 84,585 4.840%, 08/14/97 50,000 49,703 4.970%, 08/21/97 60,000 59,582 4.820%, 08/28/97 60,000 59,531 4.870%, 09/04/97 20,000 19,824 4.950%, 09/18/97 55,000 54,396 U.S. Treasury Note 5.625%, 08/31/97 30,000 30,004 -------- Total U.S. Treasury Obligations (Cost $530,218) 530,218 -------- CASH EQUIVALENT--3.3% SEI Liquid Asset Trust -- Treasury Portfolio 17,931 17,931 -------- Total Cash Equivalent (Cost $17,931) 17,931 -------- Total Investments--100.3% (Cost $548,149) 548,149 -------- OTHER ASSETS AND LIABILITIES--(0.3%) Other Assets and Liabilities, Net (1,474) -------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization--no par value) based on 543,114,116 outstanding shares of beneficial interest 543,114 Portfolio Shares of Class A (unlimited authorization--no par value) based on 3,294,017 outstanding shares of beneficial interest 3,294 Undistributed net investment income 17 Accumulated net realized gain on investments 250 -------- Total Net Assets--100.0% $546,675 ======== Net Asset Value, Offering and Redemption Price Per Share--Class I $ 1.00 ======== Net Asset Value, Offering and Redemption Price Per Share--Class A $ 1.00 ======== (A) THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS REPRESENTS THE SECURITY'S DISCOUNT RATE AT PURCHASE. PRIME OBLIGATION MONEY MARKET FUND - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- COMMERCIAL PAPER--54.6% BANKING--16.9% Abbey National Bank 5.720%, 10/30/97 $ 5,000 $ 5,004 Banc One Funding 5.560%, 08/15/97 8,000 7,944 Bank of America 5.520%, 09/05/97 5,000 4,950 Bankers Trust 5.300%, 07/21/97 5,000 4,985 5.350%, 08/26/97 5,000 4,958 National City 5.560%, 08/08/97 10,000 9,941 Norwest Financial 5.550%, 07/28/97 10,000 9,958 5.550%, 09/05/97 5,000 4,949 Royal Bank of Canada 5.620%, 07/31/97 4,782 4,760 Toronto Dominion 5.500%, 07/11/97 10,000 9,985 -------- 67,434 -------- FINANCIAL SERVICES--28.2% American Express 5.550%, 07/21/97 5,000 4,985 5.530%, 07/28/97 5,000 4,979 Centric Funding 5.620%, 07/02/97 5,000 4,999 5.640%, 08/26/97 5,000 4,956 Ford Motor Credit 5.600%, 07/02/97 5,000 4,999 5.530%, 07/24/97 5,000 4,982 5.540%, 08/18/97 5,000 4,963 General Electric Capital 5.520%, 07/11/97 5,000 4,992 5.550%, 07/25/97 5,000 4,982 5.550%, 07/28/97 5,000 4,979 GTE Funding 5.690%, 07/07/97 5,000 4,995 5.540%, 07/17/97 5,000 4,988 5.560%, 07/17/97 5,000 4,988 Merrill Lynch 5.650%, 07/16/97 5,000 4,988 5.560%, 07/23/97 5,000 4,983 5.600%, 08/20/97 5,000 4,961 Pacificorp 5.550%, 07/07/97 8,000 7,993 Safeco Credit 5.530%, 08/11/97 5,000 4,969 5.630%, 08/19/97 5,000 4,962 5.610%, 09/02/97 5,000 4,951 USAA Capital 5.550%, 07/14/97 10,000 9,980 -------- 112,574 -------- 4 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- INDUSTRIAL--8.2% Colonial Pipeline 5.600%, 08/06/97 $ 8,000 $ 7,955 5.300%, 08/14/97 10,000 9,935 Hasbro 5.600%, 08/27/97 10,000 9,911 PHH Corporation 5.560%, 08/18/97 5,000 4,963 -------- 32,764 -------- UTILITIES--1.3% Pacific Gas & Electric 5.590%, 08/26/97 5,010 4,967 -------- Total Commercial Paper (Cost $217,739) 217,739 -------- U.S. GOVERNMENT AGENCY OBLIGATIONS--18.0% Federal Farm Credit Bank 5.500%, 09/02/97 5,000 5,000 Federal Home Loan Bank (A) 5.410%, 07/02/97 10,000 9,999 5.540%, 08/14/97 5,000 4,966 5.790%, 01/21/98 5,000 5,000 5.875%, 01/30/98 5,000 5,000 5.805%, 02/13/98 5,300 5,301 5.710%, 02/19/98 8,500 8,500 5.670%, 03/05/98 5,000 5,000 6.125%, 05/22/98 3,000 3,000 6.085%, 06/12/98 5,000 5,000 Federal Home Loan Mortgage (A) 5.530%, 07/15/97 5,000 4,989 5.440%, 08/13/97 10,000 9,935 -------- Total U.S. Government Agency Obligations (Cost $71,690) 71,690 -------- CORPORATE OBLIGATIONS--2.5% Ford Motor Credit 6.250%, 02/26/98 5,000 5,005 PNC Bank 5.900%, 10/15/97 5,000 5,004 -------- Total Corporate Obligations (Cost $10,009) 10,009 -------- CERTIFICATES OF DEPOSIT--7.5% Bank of New York 5.375%, 10/10/97 10,000 9,983 Banker's Trust 6.240%, 04/02/98 5,000 5,003 - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Morgan Guaranty 5.850%, 03/16/98 $ 5,000 $ 4,993 Royal Bank of Canada 5.500%, 08/06/97 10,000 10,001 -------- Total Certificates of Deposit (Cost $29,980) 29,980 -------- REPURCHASE AGREEMENTS--17.5% Barclays 5.88%, dated 06/30/97, matures 07/01/97, repurchase price $36,995,335 (collateralized by U.S. Treasury Securities, par value $32,184,000, maturity dates ranging from 08/15/98 to 05/15/17, market value $37,729,435) (B) 36,989 36,989 J.P. Morgan 5.88%, dated 06/30/97, matures 07/01/97, repurchase price $17,466,855 (collateralized by U.S. Treasury Note, par value $17,496,000, 5.875%, matures 02/28/99, market value $17,813,533) (B) 17,464 17,464 Lehman Brothers 5.88%, dated 06/30/97, matures 07/01/97, repurchase price $15,569,880 (collateralized by U.S. Treasury Note, par value $15,890,000, 6.00%, matures 06/30/99, market value $15,880,149) (B) 15,567 15,567 -------- Total Repurchase Agreements (Cost $70,020) 70,020 -------- Total Investments--100.1% (Cost $399,438) 399,438 -------- OTHER ASSETS AND LIABILITIES--(0.1%) Other Assets and Liabilities, Net (39) -------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization -- no par value) based on 384,534,756 outstanding shares of beneficial interest 384,535 Portfolio Shares of Class A (unlimited authorization -- no par value) based on 14,520,656 outstanding shares of beneficial interest 14,521 5 Statement of Net Assets PRIME OBLIGATION MONEY MARKET FUND (CONTINUED) - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Undistributed net investment income $ 3 Accumulated net realized loss on investments (19) -------- Total Net Assets--100.0% $399,040 ======== Net Asset Value, Offering and Redemption Price Per Share--Class I $ 1.00 ======== Net Asset Value, Offering and Redemption Price Per Share--Class A $ 1.00 ======== (A) GOVERNMENT AGENCY DISCOUNT NOTE -- THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS REPRESENTS THE SECURITY'S DISCOUNT RATE AT PURCHASE. (B) TRI-PARTY REPURCHASE AGREEMENT. TAX-EXEMPT MONEY MARKET FUND - -------------------------------------------------------------------------------- MUNICIPAL BONDS--98.8% ALASKA--0.5% Anchorage, Series A (GO) (AMBAC) (A) 3.800%, 08/01/97 $ 390 390 -------- ARIZONA--3.2% Avondale, Industrial Development (RB) (B) 4.150%, 07/02/97 1,500 1,500 Tempe, High School District 213 (GO) (FGIC) 4.200%, 07/01/97 825 825 -------- 2,325 -------- FLORIDA--4.2% Alachua County, Refunding Bonds (A) (B) (C) 3.700%, 07/01/97 700 700 State, Housing Finance Authority, Hampton Project (RB) (A) (B) (C) 4.300%, 08/06/97 1,900 1,900 Orange County, Housing Finance Authority, Windscape Project (RB) (A) (B) (C) 4.350%, 07/02/97 400 400 -------- 3,000 -------- GEORGIA--2.8% Marietta, Housing Authority, Bells Ferry (A) (C) 3.550%, 01/15/98 2,000 2,000 -------- - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- ILLINOIS--4.7% State, Development Finance Authority, Illinois Power Project, Series B (A) (B) (C) 4.150%, 07/02/97 $2,000 $ 2,000 State, Health Facilities Authority, Sisters Hospital Service, Series E (MBIA) (A) (B) (C) 4.150%, 07/02/97 1,400 1,400 -------- 3,400 -------- IOWA--0.6% Polk County, Hospital Equipment Improvement Authority (MBIA) (B) (C) 4.150%, 07/02/97 400 400 -------- KENTUCKY--2.1% State, Rural Water Public Projects 4.375%, 04/01/98 1,500 1,507 -------- LOUISIANA--15.7% New Orleans, Aviation Board, Series A (RB) (MBIA) (A) (B) (C) 4.150%, 07/02/97 2,900 2,900 New Orleans, Aviation Board, Series B (RB) (MBIA) (A) (B) (C) 4.150%, 07/02/97 3,900 3,900 New Orleans, Aviation Board, Series C (GO) (MBIA) (A) (B) (C) 4.150%, 07/02/97 1,500 1,500 State, Public Facilities Authority, Hospital Revenue (AMBAC) (A) (B) (C) 4.150%, 07/02/97 1,000 1,000 State, Public Facilities Authority, Willis-Knighton Medical Center (AMBAC) (B) (C) 4.150%, 07/02/97 2,000 2,000 -------- 11,300 -------- MARYLAND--8.5% Anne Arundel (CP) 3.700%, 09/09/97 1,500 1,500 Baltimore County (CP) 3.650%, 10/01/97 2,000 2,000 Howard County, Multi-Family Housing Authority, Sherwood Crossing Project (A) (B) 3.750%, 12/01/97 1,600 1,600 6 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Montgomery County, Draper Lane Apartments (RB) (FGIC) (B) 4.200%, 07/02/97 $1,000 $ 1,000 -------- 6,100 -------- MICHIGAN--2.5% State, Hospital Financing Authority (A) (B) (C) 4.300%, 07/02/97 1,800 1,800 -------- MINNESOTA--1.9% New Brighton, Industrial Development Authority, Unicare Nursing Homes Project (A) (B) (C) 4.450%, 07/02/97 1,400 1,400 -------- MISSOURI--3.6% Osage Beach, Industrial Development Authority (A) (B) (C) 3.700%, 07/01/97 275 275 Riverport Associates, (A) (B) (C) 4.350%, 07/02/97 400 400 Saint Charles County, Industrial Development Authority, Cedar Ridge Apartments (A) (B) (C) 4.300%, 07/02/97 675 675 Springfield, Industrial Development Authority, Pebblecreek Apartments (A) (B) (C) 4.200%, 07/02/97 1,200 1,200 -------- 2,550 -------- NEW JERSEY--19.5% Bayonne (GO) 4.250%, 07/10/97 1,500 1,500 3.900%, 09/12/97 1,200 1,201 Fort Lee, Anticipation Note 4.200%, 02/02/98 1,500 1,503 Madison Boro, Anticipation Note 3.830%, 03/20/98 1,525 1,525 Middlesex County (GO) 3.900%, 07/15/97 500 500 Morris County (GO) 3.970%, 08/07/97 500 500 New Brunswick, Anticipation Note 4.000%, 12/09/97 1,000 1,001 New Providence, Anticipation Note 4.500%, 09/19/97 600 601 Northvale, Anticipation Note 3.990%, 06/09/98 1,000 1,001 Park Ridge, Anticipation Note 3.660%, 08/05/97 2,600 2,600 - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Princeton, Anticipation Note 3.850%, 12/12/97 $ 300 $ 300 State, Economic Development Authority, Peddie School Project (A) (B) (C) 4.050%, 07/03/97 1,350 1,350 State, Education Facilities Authority, Series B (AMBAC) (RB) 4.000%, 03/01/98 270 271 Summit, Anticipation Note 3.820%, 12/05/97 150 150 -------- 14,003 -------- NORTH CAROLINA--4.0% State, Educational Facilities Authority, Guilford College Project (RB) (B) 4.150%, 07/01/97 1,400 1,400 Wake County, Carolina Power & Light Company (A) (B) (C) 4.150%, 07/02/97 1,100 1,100 Winston Salem, Risk Acceptance Management Corporation (A) (B) (C) 4.200%, 07/02/97 365 365 -------- 2,865 -------- PENNSYLVANIA--2.8% Delaware County (CP) 3.700%, 08/14/97 2,000 2,000 -------- TENNESSEE--5.6% Morristown, Industrial Development Board, Williamhouse Regency (B) 4.350%, 07/02/97 2,000 2,000 Nashville & Davidson Counties, Old Hickory Towers, Series A Project (A) (B) (C) 4.350%, 07/02/97 2,000 2,000 -------- 4,000 -------- TEXAS--11.0% Hunt County, Industrial Development Authority, Trico Industries (A) (B) (C) 4.100%, 07/01/97 2,700 2,700 State (TAN) 4.750%, 08/29/97 5,150 5,160 -------- 7,860 -------- VIRGINIA--5.6% Harrisonburg, Multi-Family Housing Authority, Rolling Brook Village Apartments, Series A (RB) (A) (C) 2.800%, 02/01/98 3,000 3,000 7 Statement of Net Assets TAX-EXEMPT MONEY MARKET FUND (CONTINUED) - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Richmond, Capital Region Authority, International Airport, Series B (AMBAC) (A) (B) (C) 4.050%, 07/02/97 $1,000 $ 1,000 -------- 4,000 -------- Total Municipal Bonds (Cost $70,900) 70,900 -------- CASH EQUIVALENT--0.6% Goldman Sachs Tax-Free Money Market 406 406 -------- Total Cash Equivalent (Cost $406) 406 -------- Total Investments--99.4% (Cost $71,306) 71,306 -------- OTHER ASSETS AND LIABILITIES--0.6% Other Assets and Liabilities, Net 470 -------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization--no par value) based on 67,433,484 outstanding shares of beneficial interest 67,433 Portfolio Shares of Class A (unlimited authorization--no par value) based on 4,349,553 outstanding shares of beneficial interest 4,350 Accumulated net realized loss on investments (7) -------- Total Net Assets--100.0% $ 71,776 ======== Net Asset Value, Offering and Redemption Price Per Share--Class I $ 1.00 ======== Net Asset Value, Offering and Redemption Price Per Share--Class A $ 1.00 ======== (A) SECURITIES ARE HELD IN CONNECTION WITH A LETTER OF CREDIT OR OTHER CREDIT SUPPORT. (B) FLOATING RATE INSTRUMENT WITH DEMAND FEATURES. THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON JUNE 30, 1997. THE DATE SHOWN IS THE LONGER OF THE RESET DATE OR DEMAND DATE. (C) PUT OR DEMAND FEATURES EXIST REQUIRING THE ISSUER TO REPURCHASE THE INSTRUMENT PRIOR TO MATURITY. CP--COMMERCIAL PAPER GO--GENERAL OBLIGATION RB--REVENUE BOND TAN--TAX ANTICIPATION NOTE THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT SUPPORT FOR CERTAIN SECURITIES AS DEFINED IN THE STATEMENT OF NET ASSETS: AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION FGIC--FEDERAL GUARANTY INSURANCE COMPANY MBIA--MUNICIPAL BOND INVESTORS ASSURANCE U.S. TREASURY SECURITIES PLUS MONEY MARKET FUND - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS--49.0% U.S. Treasury Bill 4.995%, 08/21/97 $10,000 $ 9,929 U.S. Treasury Notes 5.625%, 08/31/97 10,000 10,002 5.625%, 10/31/97 15,000 15,010 -------- Total U.S. Treasury Obligations (Cost $34,941) 34,941 -------- REPURCHASE AGREEMENTS--51.0% Barclays 5.89%, dated 06/30/97, matures 07/01/97, repurchase price $15,366,705 (collateralized by U.S. Treasury Bond, par value $12,894,000, 8.75%, matures 05/15/17, market value $15,672,238) (A) 15,364 15,364 J.P. Morgan 5.89%, dated 06/30/97, matures 07/01/97, repurchase price $2,033,493 (collateralized by U.S. Treasury Note, par value $2,037,000, 5.875%, maturing 02/28/99, market value $2,073,969) (A) 2,033 2,033 Lehman Brothers 5.89%, dated 06/30/97, matures 07/01/97, repurchase price $17,937,394 (collateralized by U.S. Treasury Notes, par value $17,989,000, maturity dates ranging from 06/30/99 to 01/15/00, market value $18,288,530) (A) 17,935 17,935 Morgan Stanley 5.89%, dated 06/30/97, matures 07/01/97, repurchase price $1,001,956 (collateralized by U.S. Treasury Note, par value $985,000, 6.625%, matures 07/31/01, market value $1,023,321) (A) 1,002 1,002 -------- Total Repurchase Agreements (Cost $36,334) 36,334 -------- Total Investments--100.0% (Cost $71,275) 71,275 -------- 8 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization -- no par value) based on 71,294,798 outstanding shares of beneficial interest $ 71,295 Accumulated net realized loss on investments (20) -------- Total Net Assets--100.0% $ 71,275 -------- Net Asset Value, Offering and Redemption Price Per Share-- Class I $ 1.00 ======== (A) TRI PARTY REPURCHASE AGREEMENT. SHORT-TERM INVESTMENT FUND - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS--89.8% U.S. Treasury Bills (A) 4.400%, 07/03/97 $4,000 3,999 5.290%, 07/24/97 3,000 2,990 5.520%, 08/21/97 1,000 993 5.529%, 09/18/97 5,500 5,438 5.133%, 11/13/97 2,000 1,961 5.160%, 12/11/97 1,000 977 5.283%, 01/08/98 2,000 1,945 5.195%, 02/05/98 1,000 968 5.380%, 03/05/98 1,000 964 5.610%, 04/02/98 4,000 3,838 5.319%, 06/25/98 3,000 2,839 -------- Total U.S. Treasury Obligations (Cost $26,899) 26,912 -------- U.S. GOVERNMENT AGENCY OBLIGATIONS--5.0% Federal Farm Credit 5.550%, 07/01/97 1,000 1,000 Federal Home Loan Bank (MTN) 5.970%, 03/11/98 500 500 -------- Total U.S. Government Agency Obligations (Cost $1,500) 1,500 -------- CORPORATE BONDS--2.5% Chrysler Financial (MTN) 7.050%, 04/29/98 500 504 Wal-Mart Stores 5.500%, 03/01/98 250 249 -------- Total Corporate Bonds (Cost $752) 753 -------- - -------------------------------------------------------------------------------- FACE DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- CASH EQUIVALENTS--3.0% SEI Liquid Asset Trust-- Government Portfolio $753 $ 753 SEI Liquid Asset Trust-- Treasury Portfolio 163 163 -------- Total Cash Equivalents (Cost $916) 916 -------- Total Investments--100.3% (Cost $30,067) 30,081 -------- OTHER ASSETS AND LIABILITIES--(0.3%) Other Assets and Liabilities, Net (102) -------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization -- no par value) based on 2,902,120 outstanding shares of beneficial interest 29,087 Portfolio Shares of Class A (unlimited authorization -- no par value) based on 94,097 outstanding shares of beneficial interest 945 Distributions in excess of net investment income (4) Accumulated net realized loss on investments (62) Net unrealized appreciation on investments 13 -------- Total Net Assets--100.0% $ 29,979 ======== Net Asset Value, Offering and Redemption Price Per Share--Class I $ 10.00 ======== Net Asset Value and Redemption Price Per Share--Class A $ 10.02 ======== Maximum Offering Price Per Share--Class A ($10.02 / 99%) $ 10.12 ======== MTN--MEDIUM TERM NOTE (A) THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS REPRESENTS THE SECURITY'S DISCOUNT RATE AT PURCHASE. 9 Statement of Net Assets FIXED INCOME FUND - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS--36.9% Federal Farm Credit Bank 8.650%, 10/01/99 $2,500 $2,625 6.560%, 12/23/99 60 60 5.960%, 08/03/00 500 490 6.920%, 09/09/03 1,000 1,012 Federal Home Loan Bank 8.450%, 07/26/99 500 521 8.375%, 10/25/99 500 523 7.980%, 12/07/99 900 935 6.900%, 04/28/00 5,000 5,008 6.674%, 10/30/00 500 497 7.780%, 10/19/01 2,000 2,091 6.620%, 06/25/02 5,000 4,977 7.010%, 07/15/02 2,500 2,506 6.380%, 04/29/03 1,000 974 7.000%, 10/25/05 500 491 7.000%, 03/06/06 1,000 989 7.230%, 12/18/06 500 497 7.500%, 10/25/10 500 493 7.250%, 12/15/10 25 24 7.175%, 01/24/11 250 250 Federal Home Loan Mortgage Corporation 6.090%, 03/01/00 500 494 5.875%, 03/22/00 1,000 989 7.050%, 07/09/01 700 703 6.970%, 09/05/01 1,300 1,309 7.125%, 09/24/03 1,000 1,004 7.040%, 10/22/03 750 750 6.375%, 12/23/03 1,000 972 7.030%, 04/05/04 1,000 997 7.970%, 07/07/04 1,065 1,065 6.540%, 01/11/06 500 485 6.250%, 02/01/06 500 478 6.130%, 02/27/06 1,600 1,531 6.785%, 03/01/06 500 490 7.270%, 04/07/06 200 199 7.550%, 08/23/06 1,000 1,008 7.585%, 09/19/06 1,000 1,026 7.340%, 11/03/06 2,000 2,000 Federal National Mortgage Association 8.200%, 03/10/98 500 508 5.320%, 07/01/98 500 498 4.875%, 10/15/98 500 494 7.050%, 12/10/98 1,000 1,014 8.700%, 06/10/99 1,000 1,045 8.350%, 11/10/99 500 523 8.250%, 12/18/00 500 528 6.150%, 12/14/01 500 491 7.500%, 02/11/02 1,300 1,348 7.000%, 08/12/02 2,400 2,401 6.950%, 09/10/02 1,090 1,089 6.800%, 01/10/03 1,500 1,517 6.625%, 04/10/03 1,000 986 6.450%, 06/10/03 4,750 4,641 6.200%, 07/10/03 3,000 2,911 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- 6.250%, 08/12/03 $ 2,960 $ 2,870 5.930%, 09/26/03 1,750 1,669 6.200%, 11/12/03 1,000 966 6.400%, 01/13/04 3,000 2,911 6.900%, 03/10/04 1,000 981 7.700%, 08/10/04 500 504 7.500%, 08/25/05 500 504 6.850%, 09/12/05 1,000 988 6.710%, 02/13/06 500 489 7.560%, 06/12/06 900 924 7.760%, 08/02/06 2,000 2,031 7.500%, 08/11/06 2,500 2,505 7.520%, 08/23/06 500 505 7.060%, 11/29/06 3,250 3,206 7.000%, 02/18/11 300 289 Federal National Mortgage Association (MTN) 7.000%, 05/08/00 5,000 5,013 6.850%, 05/08/02 5,000 5,015 6.420%, 02/25/04 1,100 1,068 6.490%, 01/19/06 1,000 969 Tennessee Valley Authority 6.375%, 06/15/05 2,000 1,952 -------- Total U.S. Government Agency Obligations (Cost $95,719) 95,816 -------- U.S. TREASURY OBLIGATIONS--22.8% U.S. Treasury Notes 7.250%, 02/15/98 10,000 10,091 9.000%, 05/15/98 1,000 1,027 5.500%, 02/28/99 5,000 4,958 7.875%, 11/15/99 1,000 1,037 6.375%, 01/15/00 4,000 4,020 6.375%, 05/15/00 5,000 5,016 6.125%, 09/30/00 1,000 995 6.375%, 08/15/02 26,075 26,061 6.250%, 02/15/03 1,500 1,488 5.750%, 08/15/03 1,500 1,448 5.875%, 02/15/04 3,000 2,908 -------- Total U.S. Treasury Obligations (Cost $59,635) 59,049 -------- CORPORATE BONDS--14.7% BANKING--0.9% Bank of Delaware 5.415%, 02/12/99 1,000 986 Mellon Bank 7.000%, 03/15/06 450 445 Morgan Guaranty 7.375%, 02/01/02 500 512 Norwest Financial 7.750%, 08/15/01 400 416 -------- 2,359 -------- 10 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- FINANCIAL SERVICES--3.5% Associates of North America 7.500%, 05/15/99 $ 500 $ 510 6.000%, 06/15/00 1,500 1,476 Ford Capital BV 9.125%, 05/01/98 1,000 1,026 Ford Motor Credit 6.375%, 10/06/00 1,000 992 6.250%, 11/08/00 1,000 987 6.750%, 05/15/05 1,000 977 General Electric Capital 5.500%, 11/01/01 1,000 952 General Electric Capital (MTN) 6.875%, 04/15/00 1,000 1,009 General Motors Capital 7.100%, 03/15/06 150 151 Morgan Stanley 6.375%, 12/15/03 1,000 972 -------- 9,052 -------- INDUSTRIAL--7.2% Anheuser Busch 6.750%, 06/01/05 1,000 987 Boeing 6.350%, 06/15/03 2,000 1,952 E.I. DuPont de Nemours 6.000%, 12/01/01 2,000 1,940 6.750%, 10/15/02 1,000 997 Eli Lilly 6.250%, 03/15/03 2,000 1,957 Exxon Capital 6.500%, 07/15/99 1,500 1,508 Gannett 5.850%, 05/01/00 1,000 984 H.J. Heinz 6.875%, 01/15/03 1,000 1,004 Pitney Bowes Credit Corporation (MTN) 6.780%, 07/16/01 500 501 Sears Roebuck 6.690%, 04/30/01 3,000 2,989 Sears Roebuck (MTN) 6.630%, 08/11/03 1,000 983 SmithKline Beecham (MTN) 6.625%, 10/01/05 2,000 1,945 Wal-Mart Stores 6.125%, 10/01/99 1,000 995 -------- 18,742 -------- UTILITIES--3.1% AT&T 7.500%, 06/01/06 1,000 1,032 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Bell Telephone of Pennsylvania 6.125%, 03/15/03 $ 200 $ 194 Consolidated Edison (MTN) 6.250%, 04/01/98 600 600 Duke Power 7.000%, 09/01/05 1,300 1,282 Emerson Electric 6.300%, 11/01/05 500 481 New England Telephone and Telegraph 8.625%, 08/01/01 500 533 New York Telephone 6.250%, 02/15/04 1,000 964 U.S. West Communications 6.125%, 11/15/05 2,000 1,897 Union Pacific 6.125%, 01/15/04 1,000 942 -------- 7,925 -------- Total Corporate Bonds (Cost $38,230) 38,078 -------- MUNICIPAL BONDS--16.8% Alabama State, Housing Finance Authority (RB) 7.625%, 08/01/10 855 883 Arkansas State, Development Finance Authority (RB) 9.750%, 11/15/05 669 745 Baltimore, Maryland, Baltimore City Parking, Series B (RB) (FGIC) 7.950%, 07/01/03 510 535 Buffalo, New York State, Pens System, Series D (GO) (FGIC) 8.500%, 08/15/03 360 389 Camden County, New Jersey Improvement Authority, Series A (RB) 7.200%, 01/01/04 2,200 2,217 Collier County, Florida County Water and Sewer Authority, Series A (RB) (FGIC) 6.300%, 07/01/04 450 434 6.750%, 07/01/08 790 757 Colorado State, Housing Finance Authority, Single Family Program Series A (RB) 6.625%, 12/01/08 580 543 Colorado State, Housing Finance Authority, Single Family Program Series B-1 (RB) 10.400%, 08/01/03 185 191 11 Statement of Net Assets FIXED INCOME FUND (CONTINUED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Florida State, Housing Finance Agency, Taxable Single Family Mortgage A (RB) 7.500%, 07/01/14 $1,000 $ 1,021 Fort Myers, Florida Taxable Imports Authority, Series B (RB) (AMBAC) 8.250%, 12/01/01 240 254 8.450%, 12/01/03 645 692 Fresno, California Pension Obligation (RB) 7.230%, 06/01/05 1,635 1,653 Gillette, Wyoming FMHA Community Program (SOB) 10.250%, 01/01/11 1,095 1,226 Houston, Texas Airport Systems (RB) (FGIC) 6.100%, 07/01/01 1,260 1,232 Lower Paxton Township, Pennsylvania Sewer Authority, Series B (RB) (FGIC) 6.700%, 07/01/98 205 206 Massachusetts State, Housing Finance Authority, Series A (RB) Pre-Refunded @ 102 (A) 9.900%, 08/01/08 310 317 Metropolitan Washington D.C. & Virginia Airport Authority (RB) (MBIA) 6.900%, 10/01/08 1,980 1,938 Michigan State, Higher Education Student Loan Authority, Series XV-C (RB) 7.250%, 09/01/02 775 770 Minneapolis and St. Paul, Minnesota, Metropolitan Airports Authority, Series 9 (GO) 8.600%, 01/01/10 900 970 8.950%, 01/01/22 1,000 1,088 Missouri State, Economic Development & Infrastructure Board Health Services, Series A (RB) (MBIA) 8.400%, 06/01/04 1,350 1,455 Monrovia, California Redevelopment Agency (AMBAC) 8.100%, 05/01/01 650 677 New Hampshire State, Taxable-Pease Development Authority (GO) 7.050%, 07/01/06 410 409 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- New Hampsire State, Business Finance Authority, Series A (RB) 8.600%, 11/01/12 $2,165 $2,335 New Jersey State (COP) 8.000%, 12/15/02 1,035 1,075 New Jersey State, Economic Development Authority (RB) 7.800%, 03/15/07 1,645 1,705 New Jersey State, Housing and Mortgage Rental Finance Agency, Series D (RB) 8.800%, 11/01/07 590 614 New York State, Mortgage Agency, Series 15 (RB) 7.375%, 10/01/12 2,095 2,074 North Carolina State University, NC Raleigh (RB) (MBIA) 7.700%, 12/15/07 1,175 1,218 Oklahoma City, Oklahoma Airport Trust, Senior Lien, Series 15 (RB) 9.500%, 01/01/06 350 367 Oklahoma City, Oklahoma Airport Trust, Senior Lien, Series 16 (RB) 9.875%, 07/01/12 765 806 Oklahoma City, Oklahoma Airport Trust, Senior Lien, Series 17 (RB) 8.300%, 10/01/12 2,015 2,101 Oklahoma City, Oklahoma Airport Trust, Junior Lien, Series 21 (RB) (MBIA) 6.750%, 07/01/05 1,010 991 Oklahoma State, Single Family Housing Finance Agency (RB) (MBIA) 8.700%, 09/01/13 1,205 1,277 Oklahoma, Single Family Housing Finance Agency, Series A (RB) (AMBAC) 7.300%, 12/01/14 1,205 1,178 Palm Beach County, Florida State Airport Systems Revenue (RB) (MBIA) 9.500%, 10/01/10 1,375 1,476 Secaucus, New Jersey, Municipal Utilities Authority (RB) 8.500%, 12/01/06 600 649 Texas State, Public Finance Authority (RB) 9.000%, 12/01/06 585 635 12 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Utah State, Single Family Mortgage Housing Finance Agency, Series A-1 9.550%, 07/01/05 $ 405 $ 417 Vero Beach, Florida, Water and Sewer Authority, Series A (RB) (FGIC) 6.400%, 12/01/08 1,885 1,781 Virginia State, Housing Development Authority, Multi-Family, Series G (RB) 6.500%, 11/01/07 740 703 Wisconsin, Housing and Economic Development Authority, Series B (RB) 7.400%, 01/01/17 1,705 1,684 -------- Total Municipal Bonds (Cost $43,532) 43,688 -------- U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS--4.3% Federal Home Loan Mortgage 7.500%, 10/15/01 973 973 6.500%, 06/15/04 500 502 9.500%, 10/01/04 124 130 9.500%, 07/01/06 66 70 8.000%, 06/01/07 205 210 9.000%, 08/01/08 116 120 10.000%, 02/01/09 65 71 9.250%, 05/01/09 459 487 9.500%, 08/01/09 42 45 8.750%, 09/01/09 57 60 10.000%, 04/01/10 34 37 8.750%, 09/01/10 208 218 9.500%, 09/01/10 151 162 9.750%, 11/01/10 147 158 10.250%, 11/01/10 17 19 9.500%, 03/01/11 50 54 9.500%, 04/01/11 110 118 10.000%, 05/01/11 197 213 10.000%, 12/01/13 56 61 8.750%, 07/01/15 34 36 7.500%, 07/15/15 750 757 9.250%, 08/01/15 253 269 9.000%, 10/01/15 104 110 6.500%, 04/15/16 588 568 9.500%, 09/01/16 29 31 9.000%, 10/01/16 59 62 9.500%, 11/01/16 62 67 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- 8.500%, 07/01/17 $ 62 $ 64 9.000%, 10/01/19 235 249 7.500%, 12/15/19 131 131 7.000%, 05/15/20 1,000 995 -------- Federal National Mortgage Association 8.000%, 06/25/04 500 513 7.000%, 05/25/05 353 356 6.950%, 05/25/06 1,157 1,151 8.000%, 03/01/07 166 170 7.000%, 04/01/07 145 142 9.000%, 03/01/09 72 76 8.500%, 08/01/17 86 89 6.700%, 09/25/18 910 905 8.000%, 01/25/19 450 460 -------- Government National Mortgage Association 9.000%, 03/15/08 46 49 9.000%, 11/15/08 161 171 9.500%, 10/15/20 101 109 -------- Total U.S. Government Mortgage- Backed Obligations (Cost $11,084) 11,238 -------- NON-AGENCY MORTGAGE-BACKED OBLIGATION--0.4% Discover Card Master Trust 6.200%, 11/15/03 1,000 974 -------- Total Non-Agency Mortgage- Backed Obligation (Cost $973) 974 -------- CASH EQUIVALENTS--2.9% Aim Short-Term Prime Obligation 895 895 SEI Liquid Asset Trust-- Government Portfolio 6,443 6,443 SEI Liquid Asset Trust-- Treasury Portfolio 51 51 -------- Total Cash Equivalents (Cost $7,389) 7,389 -------- Total Investments--98.8% (Cost $256,562) 256,232 -------- OTHER ASSETS AND LIABILITIES--1.2% Other Assets and Liabilities, Net 3,142 -------- 13 Statement of Net Assets FIXED INCOME FUND (CONTINUED) - -------------------------------------------------------------------------------- MARKET DESCRIPTION VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization--no par value) based on 25,098,519 outstanding shares of beneficial interest $255,699 Portfolio Shares of Class A (unlimited authorization--no par value) based on 396,521 outstanding shares of beneficial interest 4,566 Portfolio Shares of Class B (unlimited authorization--no par value) based on 2,017 outstanding shares of beneficial interest 20 Distributions in excess of net investment income (3) Accumulated net realized loss on investments (578) Net unrealized depreciation on investments (330) -------- Total Net Assets--100.0% $259,374 ======== Net Asset Value, Offering and Redemption Price Per Share--Class I $ 10.17 ======== Net Asset Value and Redemption Price Per Share--Class A $ 10.14 ======== Maximum Offering Price Per Share -- Class A ($10.14 / 95.75%) $ 10.59 ======== Net Asset Value and Offering Price Per Share--Class B (1) $ 10.18 ======== (1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. (A) PRE-REFUNDED SECURITY -- THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. COP--CERTIFICATE OF PARTICIPATION GO--GENERAL OBLIGATIONS MTN--MEDIUM TERM NOTE RB--REVENUE BONDS SOB--SPECIAL OBLIGATION BONDS THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT SUPPORT FOR CERTAIN SECURITIES AS DEFINED IN THE STATEMENT OF NET ASSETS: AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION FGIC--FEDERAL GUARANTY INSURANCE COMPANY MBIA--MUNICIPAL BOND INSVESTORS ASSURANCE NEW JERSEY MUNICIPAL SECURITIES FUND - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- MUNICIPAL BONDS--96.6% CALIFORNIA--0.5% Stockton, Housing Facility Project, O'Connor Woods, Series A (RB) 5.200%, 09/20/09 $ 790 $ 788 -------- COLORADO--0.2% State, Housing Finance Authority, Single Family Program Project, Series-A3 (RB) 6.500%, 11/01/23 235 243 -------- FLORIDA--0.5% Dade County, Education Facilities Authority, University of Miami Project (RB) (MBIA) 7.650%, 04/01/10 500 547 Florida Housing Finance Authority, Capital Appreciation, Single Family Mortgage (RB) (B) 12.15%, 07/15/16 1,165 137 -------- 684 -------- GUAM--0.4% Guam Government, Water System (RB) 6.850%, 07/01/99 375 394 6.950%, 07/01/00 250 268 -------- 662 -------- HAWAII--0.1% State, Housing Finance and Development (RB) 6.750%, 07/01/20 190 197 -------- ILLINOIS--0.1% State, Housing Development Authority, Residential Mortgage (RB) 6.950%, 08/01/22 185 193 -------- LOUISIANA--0.7% Louisiana Public Facilities, Student Loan (RB) 6.600%, 03/01/03 1,000 1,060 -------- MASSACHUSETTS--1.2% State, Housing Finance Agency, Residential Development Authority (RB) 6.250%, 11/15/02 430 448 State, Housing Finance Agency Authority, Single Family Homes Project, Series 17 (AMT) 7.000%, 12/01/23 245 249 14 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- State, Housing Finance Agency Authority, Single Family Home Project, Series 21 (AMT) 6.500%, 12/01/10 $ 95 $ 100 New England, Education Loan Marketing (RB) 5.800%, 03/01/02 890 927 -------- 1,724 -------- MISSISSIPPI--0.3% State, Higher Education Authority, Series B (AMT) 5.700%, 09/01/05 420 430 -------- NEVADA--0.1% State, Housing Division Authority, Single Family Homes Project, Series B2 (AMT) 5.650%, 10/01/24 185 188 -------- NEW JERSEY--84.4% Atlantic County (GO) (MBIA) 5.400%, 12/01/04 200 208 5.400%, 12/01/05 400 412 Atlantic County, Improvemant Authority, Convention Center Project (RB) (MBIA) 7.375%, 07/01/10 400 474 Bayonne (GO) (AMBAC) 6.200%, 07/15/01 300 319 Bayonne (GO) (FGIC) 5.900%, 05/01/05 150 160 Bergen County, General Improvement Bonds (GO) 5.250%, 08/15/00 300 308 4.700%, 07/15/02 400 404 Bergen County (GO) 6.350%, 01/15/99 250 258 5.125%, 06/15/05 250 258 Bergen County, Utilities Authority, Series A (RB) (FGIC) 6.100%, 06/15/04 500 542 Black Horse Pike, Regal School District (COP) (MBIA) 7.150%, 06/15/98 275 283 Brick Township, Municipal Utilities Authority (RB) (FGIC) 4.000%, 12/01/98 300 300 Bridgeton, (GO) (AMBAC) 5.000%, 01/01/05 300 301 Bridgewater & Raritan (GO) 6.125%, 05/01/05 200 212 6.125%, 05/01/06 100 105 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Burlington County (GO) 5.200%, 10/01/07 $ 700 $ 709 Camden, Board of Education (GO) (FSA) 5.000%, 10/01/05 310 313 Camden (GO) (AMBAC) 7.750%, 08/01/99 200 214 Camden (GO) (FSA) 4.300%, 10/01/00 300 300 Camden County (GO) (FGIC) 5.000%, 02/01/04 200 203 5.000%, 02/01/08 500 497 Camden County (GO) (MBIA) 5.000%, 06/01/99 100 101 5.600%, 06/01/03 200 208 Camden County, Municipal Utilities Authority (RB) (FGIC) 7.500%, 12/01/99 165 170 Camden County, Municipal Utilities Authority, Pre-Refunded @102 (RB) (FGIC) (A) 7.500%, 12/01/97 335 347 Cape May County, Municipal Utilities Authority (RB) (AMBAC) 5.000%, 08/01/03 800 818 Cape May County, Municipal Utilities Authority, Series B (RB) (FGIC) 4.500%, 01/01/03 800 796 Cape May County (GO) (FGIC) 6.950%, 10/15/97 125 126 6.950%, 10/15/98 250 259 Clifton (GO) (AMBAC) 6.800%, 10/01/98 250 251 Clinton Township (GO) 7.350%, 08/01/01 300 330 Cranford Township (GO) 8.000%, 05/01/98 150 155 Cumberland County, Improvement Authority (RB) 7.600%, 12/01/98 330 335 Delaware River, PA & NJ Port Authority (RB) (FGIC) 5.450%, 01/01/12 250 252 Dover Township (GO) (AMBAC) 6.000%, 10/15/03 200 216 Edgewater Borough (GO) (MBIA) 5.100%, 09/15/00 300 307 Edison Township (AMBAC) 4.800%, 01/01/05 300 298 15 Statement of Net Assets NEW JERSEY MUNICIPAL SECURITIES FUND (CONTINUED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Edison Township (GO) 4.700%, 06/01/98 $ 250 $ 252 5.700%, 12/01/99 100 104 6.500%, 06/01/00 500 529 5.400%, 06/01/02 250 259 Edison Township (GO) (AMBAC) 4.500%, 01/01/02 500 496 Elizabeth (GO) 7.900%, 12/01/99 240 261 Elizabeth (GO) (FGIC) 4.300%, 07/15/99 100 100 4.625%, 07/15/03 200 200 Elizabeth, Additional School Building Aid (GO) 9.000%, 03/01/01 150 172 Elizabeth, School Board (GO) (MBIA) 7.000%, 03/15/04 250 282 Essex County, Bond Series B (GO) 6.800%, 12/15/97 500 507 6.850%, 12/15/98 650 665 Essex County, Improvement Authority (RB) (AMBAC) 4.875%, 12/01/02 300 304 5.000%, 12/01/08 250 247 Essex County, Jail and Youth Housing (RB) 6.500%, 12/01/06 345 388 Essex County, Orange School District (RB) 5.550%, 12/01/04 150 157 Essex County, Pre-Refunded @ 101 (FSA) (A) 6.300%, 12/01/01 300 325 Essex County, Pre-Refunded @ 101 (GO) (AMBAC) (A) 6.050%, 02/01/99 145 151 Essex County, Property and Equipment (RB) 5.850%, 12/01/03 300 311 Essex County, Series A (GO) (MBIA) 4.600%, 10/01/03 200 199 Essex County, Utilities Authority, Solid Waste Revenue (RB) (FSA) 5.000%, 04/01/04 250 253 Fair Lawn (GO) 6.500%, 04/01/99 200 208 Fair Lawn, Water Revenue (RB) 6.500%, 04/01/99 200 208 Fort Lee (GO) 4.850%, 02/01/02 250 253 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Franklin Township (GO) 5.600%, 11/01/05 $ 400 $ 418 Freehold, School District Revenue (RB) 9.875%, 12/01/97 250 256 Galloway Township (GO) (AMBAC) 5.000%, 12/15/09 350 346 Gloucester County (GO) 7.000%, 07/01/98 250 258 5.000%, 09/01/03 500 501 Gloucester County, General Improvement, Series A (GO) (AMBAC) 4.500%, 01/01/03 200 198 Gloucester County, Improvement Authority, Landfill Project, Series A (RB) 6.000%, 09/01/06 300 315 Gloucester County, Solid Waste Resourse Revenue (AMT) 8.375%, 07/01/10 1,175 1,195 Gloucester County, Solid Waste Revenue (GO) (FGIC) 7.100%, 10/15/97 100 101 Gloucester County, Solid Waste Revenue (RB) 7.300%, 10/15/98 600 612 Gloucester County, Utilities Authority (RB) 5.500%, 01/01/99 140 143 Gloucester County, Utilities Authority (RB) (AMBAC) 4.800%, 03/01/02 300 303 Hackensack (GO) 6.100%, 06/01/05 250 265 6.100%, 06/01/07 250 263 Hackensack Meadowlands (RB) 7.125%, 06/01/02 500 530 Hackettstown, Municipal Utilities Authority, Series F (RB) (FGIC) 5.050%, 10/01/04 500 507 Harrington Park (RB) 6.000%, 04/01/99 100 103 Hillsborough Township, Board of Education (COP) (FSA) 5.500%, 12/15/99 250 257 Hillsborough Township, School District (GO) 8.000%, 08/01/97 440 441 16 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Hudson County (GO) 6.250%, 11/01/97 $ 100 $ 101 Hudson County (GO) (FGIC) 6.250%, 11/01/99 200 209 Hudson County, New Jersey College, Series C (GO) 4.600%, 10/01/01 180 181 Hudson County, Utility Authority (RB) 11.875%, 07/01/06 285 362 Hunterdon County (GO) 7.650%, 11/01/97 625 633 Jersey City (GO) 6.500%, 02/15/03 370 402 5.500%, 03/15/14 1,000 1,007 Jersey City, Redevelopment Authority, Dixon Mill Apartments (RB) 6.100%, 05/01/12 65 68 Jersey City, Water Utility (RB) 7.250%, 01/01/99 400 417 Lincoln Park (RB) 7.000%, 07/15/03 100 112 Livingston Township, Board of Education 6.375%, 11/01/99 100 105 6.375%, 11/01/00 100 106 Long Branch, Sewer Authority (RB) (FGIC) 4.900%, 06/01/00 300 304 5.200%, 06/01/05 500 511 5.250%, 06/01/06 200 204 Madison (RB) 7.125%, 08/01/98 250 259 Manchester Township (GO) (MBIA) 7.750%, 10/01/98 300 303 Maple Shade Township (GO) (AMBAC) 4.300%, 10/01/99 200 201 Marlboro Township (GO) 8.300%, 10/01/97 150 152 Mercer County, Improvement Authority (RB) (MBIA) 6.000%, 06/01/04 250 264 Mercer County, Improvement Authority (RB) 4.250%, 12/01/00 500 497 Mercer County, Improvement Authority, Ewing Board of Education Project (RB) (MBIA) 6.300%, 05/15/07 250 274 - -------------------------------------------------------------------------------- FACE AMOUNT MARKET DESCRIPTION (000) VALUE (000) - -------------------------------------------------------------------------------- Mercer County, Improvement Authority, Hamilton Board of Education Project (RB) (MBIA) 5.500%, 06/01/01 $ 200 $ 207 4.900%, 12/15/05 150 150 Mercer County, Sewer Improvement Authority, Regional Sludge Project (FGIC) 6.550%, 12/15/98 500 517 Middlesex County, Property Tax (GO) 5.800%, 10/01/10 500 520 Middlesex County (GO) 3.900%, 07/15/97 200 200 4.200%, 07/15/99 150 150 4.500%, 07/15/01 500 503 Middlesex, Utility Authority (RB) (FGIC) 6.100%, 03/15/00 200 208 Middletown Township, Sewer Authority, Series A (RB) (FGIC) 4.900%, 01/01/05 800 800 Monmouth County (GO) 4.400%, 09/01/03 200 197 Monmouth County, Improvement Authority (RB) (MBIA) 5.000%, 12/01/08 250 251 5.125%, 12/01/16 500 477 Monmouth County (RB) 4.500%, 10/01/98 500 502 4.750%, 07/15/03 200 201 Monmouth County (RB) (MBIA) 4.400%, 12/01/02 250 249 Monmouth County, Improvement Authority, Government Loan Project (RB) (MBIA) 4.350%, 12/01/01 500 499 Monmouth County, Improvement Authority, Howell Township Education Project (RB) 5.750%, 07/01/01 540 566 Monmouth County, Improvement Authority (RB) (FSA) 5.450%, 07/15/13 850 852 Moorestown Township (GO) 5.000%, 02/01/12 150 144 5.000%, 02/01/15 150 142 Moorestown Township (GO) (AMBAC) 6.000%, 09/01/07 300 319 Morris Plains (GO) 5.000%, 07/01/04 200 199 17 Statement of Net Assets NEW JERSEY MUNICIPAL SECURITIES FUND (CONTINUED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Morristown (GO) (FSA) 5.500%, 08/01/01 $ 100 $ 103 Mount Laurel Township (GO) 4.650%, 08/01/05 500 489 New Brunswick (GO) (FGIC) 6.400%, 07/15/03 400 427 New Brunswick, Parking Authority (RB) (FGIC) 4.300%, 09/01/99 300 301 Newark, Board of Education Bonds (GO) (MBIA) 5.875%, 12/15/11 370 387 Newark (GO) (AMBAC) 7.375%, 10/01/00 250 271 Newark, Housing Finance, Fairview and Lock Street Project (RB) 6.150%, 02/01/13 495 513 Newark, Water Utility (GO) (MBIA) 5.500%, 10/01/14 475 478 North Arlington, Public Improvements Authority (GO) 7.000%, 05/15/98 100 101 North Bergen Township, (GO) (MBIA) 4.400%, 08/01/01 500 494 North Bergen Township, Municipal Utilities Authority (RB) (FGIC) 4.800%, 12/15/03 300 301 North Bergen Township, Utilities Authority (RB) (FGIC) 4.700%, 12/15/02 300 301 North Bergen Township, Utilities Authority, Sewer Revenue (RB) (FGIC) 7.625%, 12/15/19 900 933 North Jersey District, Water Supply Wanaque North Project, Series B (RB) (MBIA) 5.600%, 11/15/98 300 306 North Jersey, District Water Supply, Wanaque South Project (RB) (MBIA) 5.400%, 07/01/02 300 311 5.500%, 07/01/03 200 209 Ocean City (GO) 6.750%, 07/12/99 500 523 8.700%, 05/15/00 250 278 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Ocean County (GO) 7.000%, 08/15/00 $ 100 $ 107 4.600%, 11/01/03 500 498 5.800%, 09/01/10 500 521 Ocean Township (GO) (MBIA) 5.400%, 06/01/15 250 249 Parsippany Troy Hills Township (GO) 4.500%, 02/01/01 800 801 4.600%, 02/01/02 100 100 4.700%, 12/01/03 500 501 4.700%, 12/01/04 400 396 Passaic County, Board of Education (GO) 9.400%, 09/01/02 150 182 Passaic County, Cash Flow Management Project (GO) 6.400%, 11/15/01 300 321 Passaic County (GO) 4.700%, 09/01/03 250 252 Passaic County (GO) (FGIC) 4.750%, 09/01/04 500 499 5.550%, 04/01/09 250 258 Passaic County (GO) (MBIA) 4.350%, 05/01/03 200 196 4.450%, 05/01/04 200 196 Passaic County, Property Tax Authority (GO) 7.100%, 09/01/97 200 201 Paterson (GO) 6.350%, 02/15/03 235 254 Paterson, School Board (GO) 7.400%, 08/01/00 250 272 Pequannock-Lincoln Park, Sewer Authority (RB) (MBIA) 4.400%, 12/01/02 500 498 Perth Amboy (GO) (FSA) 6.200%, 09/01/00 300 316 6.400%, 09/01/02 300 327 Piscataway Township, School District 5.200%, 02/01/98 250 252 Point Pleasant (GO) (MBIA) 5.450%, 12/01/00 200 206 Port Authority of New York & New Jersey (RB) 5.300%, 08/01/03 300 312 Princeton (GO) 4.400%, 09/01/01 300 300 Rahway (GO) 9.300%, 02/01/01 150 173 Rahway Valley, Sewer Authority (RB) 6.200%, 04/01/01 210 211 18 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Roselle (GO) (MBIA) 4.750%, 10/15/04 $ 700 $ 700 Roxbury (COP) 5.000%, 10/15/00 250 252 Rutgers State University, Pre-Refunded @ 102 (RB) (A) 7.100%, 05/01/98 200 209 Rutgers State University, Series A (RB) 4.375%, 05/01/01 500 498 Rutgers State University, Series S (RB) 5.000%, 05/01/04 500 508 Sayreville (GO) (MBIA) 10.125%, 12/01/00 250 294 Secaucus, Municipal Utility Authority, Sewer Project, Series A (RB) 5.650%, 12/01/04 200 213 5.750%, 12/01/05 385 412 Somerset County (GO) 4.450%, 12/01/01 170 170 5.000%, 10/01/02 200 205 4.450%, 12/01/02 500 499 4.350%, 12/01/04 600 578 Somerset Raritan Valley, Sewer Improvement Authority, Series H (RB) 5.150%, 07/01/01 300 308 South Brunswick Township (GO) 7.125%, 07/15/98 100 103 6.300%, 04/01/04 250 269 South Jersey, Port Authority, Marine Terminal Project, Series C (RB) 5.900%, 01/01/98 200 202 South Jersey, Transportation Authority, Transportation Systems, Series B (RB) (MBIA) 5.500%, 11/01/02 250 260 State (GO) 4.750%, 02/15/98 400 403 5.100%, 02/15/00 1,200 1,223 5.300%, 02/15/02 850 877 7.000%, 04/01/02 250 272 6.400%, 09/15/02 250 269 5.400%, 02/15/03 300 311 State, Building Authority (RB) 9.625%, 02/01/03 230 275 4.400%, 06/15/03 500 493 4.500%, 06/15/04 500 490 4.700%, 06/15/06 250 246 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- State, Casino Reinvestment Development Authority (RB) (FSA) 5.000%, 10/01/04 $1,000 $1,007 5.250%, 10/01/09 1,000 997 State, Economic Development Authority (RB) 4.900%, 08/15/04 200 203 7.400%, 12/01/09 200 203 State, Economic Development Authority, Health Village 1996 Project (RB) 6.000%, 05/01/09 200 203 State, Economic Development Authority, Saint Barnabas Project, Series A (RB) (MBIA) 4.875%, 07/01/05 500 498 State, Economic Development Authority, Series A (RB) (MBIA) 5.125%, 07/01/00 300 305 5.400%, 07/01/02 300 311 State, Economic Development Authority, Series J (RB) 7.100%, 12/01/11 420 454 State, Economic Development Authority, YWCA of New Jersey (RB) 7.750%, 05/01/09 200 205 State, Education Facilities Authority, Drew University Issue, Series B (RB) 5.750%, 07/01/02 360 375 State, Educational Facilities Authority, Drew University Issue, Series B (RB) Pre-Refunded @ 102 (A) 7.450%, 02/01/98 485 503 State, Education Facilities Authority, Glassboro State College (RB) 6.750%, 07/01/09 300 303 State, Educational Facilities Authority, Medicine and Dentistry, Series B (RB) (AMBAC) 5.000%, 12/01/07 250 251 State, Educational Facilities Authority, Rowan College, Series C (RB) (MBIA) 5.050%, 07/01/03 300 305 5.250%, 07/01/05 300 307 19 Statement of Net Assets NEW JERSEY MUNICIPAL SECURITIES FUND (CONTINUED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- State, Educational Facilities Authority, Series A (RB) (AMBAC) 5.125%, 09/01/06 $ 300 $ 305 State, Educational Facilities Authority, Stockton State College, Series B (RB) (AMBAC) 6.200%, 07/01/04 300 325 State, Equipment Series A (COP) 6.000%, 10/01/00 300 313 State, Health Care Facilities, St. Peters Medical Center, Series F (RB) (MBIA) 5.000%, 07/01/13 100 95 State, Health Care Facilities, Shore Memorial Hospital (RB) (MBIA) 7.100%, 07/01/98 100 103 State, Health Care Facilities, Society of Vy, Hospital Revenue (RB) (MBIA) 6.500%, 07/01/98 250 256 State, Health Care Facilities Authority, Atlantic City Medical Center (RB) (AMBAC) 5.000%, 07/01/02 300 306 State, Health Care Facilities Authority, Chilton Memorial Hospital (RB) 6.550%, 07/01/03 300 318 State, Health Care Facilities Authority, Hackensack Medical Center (RB) (MBIA) 5.100%, 07/01/03 500 511 State, Health Care Facilities Authority, JFK Health Systems (RB) (FGIC) 4.600%, 07/01/05 250 244 State, Health Care Facilities Authority, Mountain Side Hospital (RB) (FGIC) 6.000%, 07/01/00 300 314 State, Health Care Facilities Authority, Shore Memorial Healthcare Systems (RB) (FGIC) 4.800%, 07/01/03 200 201 State, Health Care Facilities Financing Authority (RB) 6.800%, 08/01/19 3,380 3,587 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- State, Health Care Facilities Financing Authority, Atlantic County Medical Center, Series A (RB) 8.375%, 08/01/00 $1,000 $1,039 State, Health Care Facilities Financing Authority, Burdette Tomlin Memorial Hospital, Series C (RB) (FGIC) 7.250%, 07/01/97 155 155 State, Health Care Facilities Financing Authority, Cathedral Health, Series A (RB) 6.650%, 02/15/98 330 336 State, Health Care Facilities Financing Authority, Pre-Refunded @ 102 (RB) (A) 6.800%, 02/01/01 425 465 State, Health Care Facilities Memorial, Health Alliance, Series A (RB) (FGIC) 6.600%, 07/01/99 145 152 State, Higher Education Assistance Authority (RB) 5.900%, 07/01/09 380 387 State, Higher Education Assistance Authority, Series A (RB) 6.850%, 01/01/01 135 142 6.900%, 01/01/02 590 627 5.800%, 01/01/03 265 271 5.950%, 07/01/05 785 808 5.550%, 07/01/06 470 476 5.800%, 07/01/08 375 382 5.900%, 01/01/09 600 610 State, Highway Authority, Garden State Parkway (RB) 5.300%, 01/01/99 250 254 6.750%, 01/01/99 100 102 6.600%, 01/01/11 975 1,072 State, Hillcrest Health Project (RB) (AMBAC) 4.600%, 01/01/02 200 199 5.000%, 01/01/07 300 299 State, Housing and Manufacturing Agency, Series A (RB) (MBIA) 7.100%, 10/01/98 100 103 State, Housing & Mortgage Finance Agency (RB) (AMBAC) 5.300%, 05/01/06 325 333 State, Housing & Mortgage Finance Agency, Section 8 (RB) 6.000%, 11/01/02 760 790 20 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- State, Housing and Mortgage Agency, Revenue Home Buyer Series N (RB) (MBIA) 4.950%, 04/01/04 $ 110 $ 111 State, Housing and Mortgage Authority (RB) 6.300%, 05/01/02 470 494 6.400%, 05/01/02 520 546 State, Housing and Mortgage Finance Agency, Home Buyer Series G (RB) (MBIA) 4.625%, 04/01/15 145 142 State, Housing and Mortgage Finance Agency, Home Buyer Series N (RB) (MBIA) 5.200%, 04/01/06 500 519 5.800%, 10/01/20 975 981 State, Housing and Mortgage Finance Agency, Home Mortgage Series A (RB) (MBIA) 7.200%, 10/01/99 300 310 State, Housing Finance Authority (RB) 5.100%, 11/01/00 500 501 State, Montclair State University, Series C (RB) (AMBAC) 5.375%, 07/01/08 1,285 1,322 State, New York and New Jersey Port Authority (RB) 6.800%, 07/15/08 250 265 State, Raritan Overpass Project (RB) 4.300%, 08/01/01 1,000 996 State, Series A (COP) 6.100%, 10/01/01 1,165 1,229 State, Series D (GO) 5.625%, 02/15/05 150 159 State, Series E (GO) 5.000%, 07/15/04 100 102 State, South Orange & Maplewood School District (GO) 6.125%, 11/01/01 150 159 State, Sports & Exposition (RB) 9.000%, 12/01/97 40 41 6.000%, 01/01/98 100 101 8.300%, 01/01/03 380 449 State, Sports & Exposition Authority, Convention Center Luxury Tax (RB) (MBIA) 5.000%, 07/01/98 150 151 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- State, Sports & Exposition Authority, Convention Center Luxury Tax, Series A (RB) (MBIA) 5.600%, 07/01/01 $ 175 $ 182 5.900%, 07/01/03 300 322 State, Sports & Exposition Authority, Series A (RB) 5.000%, 09/01/06 515 516 State, Stateon Willingboro Township (GO) (MBIA) 6.300%, 07/01/99 400 416 State, Sussex County, Pre-Refunded @ 102 (GO) (A) 7.900%, 12/01/97 300 311 State, Transportation Authority, Series A (RB) 4.625%, 06/15/02 300 302 State, Transportation Authority, Series A (RB) (FSA) 5.300%, 12/15/01 200 207 State, Transportation Authority, Series A (RB) (MBIA) 4.500%, 12/15/02 450 448 5.500%, 06/15/11 750 760 State, Transportation Authority, Series B (RB) (MBIA) 5.200%, 06/15/06 1,850 1,892 State, Transportation System, Series A (RB) (AMBAC) 5.200%, 12/15/00 200 205 State, Transportation Trust Authority, Transportation System, Series A (RB) 5.600%, 06/15/98 200 203 4.600%, 06/15/01 500 503 State, Transportation Trust Authority, Transportation System, Series A (RB) (MBIA) 4.625%, 06/15/02 500 503 5.500%, 06/15/13 500 505 State, Turnpike Authority (RB) 6.400%, 01/01/02 300 318 10.375%, 01/01/03 555 657 State, Turnpike Authority, Series A (RB) (AMBAC) 5.900%, 01/01/04 500 523 6.400%, 01/01/07 1,485 1,580 State, Union Beach (GO) 6.050%, 02/01/98 200 202 State, Union County (GO) 4.400%, 10/01/05 500 484 21 Statement of Net Assets NEW JERSEY MUNICIPAL SECURITIES FUND (CONTINUED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- State, Union County, Improvement Authority (RB) 4.700%, 11/01/05 $ 250 $ 250 State, University Medicine and Dentistry, Series E (RB) 6.200%, 12/01/03 500 539 State, Warren County, Pollution Control Finance Authority (RB) (MBIA) 6.550%, 12/01/06 300 330 State, Washington Township, Board of Education (GO) (MBIA) 5.000%, 02/01/03 500 512 State, Wastewater Treatment Authority (RB) (AMBAC) 4.250%, 03/01/00 500 498 4.400%, 03/01/04 200 195 State, Wastewater Treatment Authority, Series A (RB) 5.350%, 07/01/97 100 100 State, Wastewater Treatment Trust, Pre-Refunded @ 100.75 (RB) (FGIC) (A) 8.600%, 09/01/97 180 183 State, Wastewater Treatment Trust, Pre-Refunded @ 102 (RB) (FGIC) (A) 9.000%, 09/01/97 300 308 State, Wastewater Treatment Trust (RB) 6.400%, 06/15/98 250 255 6.600%, 06/15/00 250 263 6.875%, 06/15/04 300 320 6.400%, 07/01/06 2,215 2,381 State, Wastewater Treatment Trust, Series A (RB) 5.000%, 09/01/06 450 453 6.000%, 07/01/10 965 1,006 State, West New York Municipal Utilities (RB) 6.650%, 12/15/97 250 253 State, West New York Municipal Utilities (RB) (FGIC) (B) 4.420%, 12/15/02 300 233 State, Westfield School District (GO) 6.650%, 08/01/98 400 411 State, Wildwood (GO) (MBIA) 7.000%, 07/15/97 200 200 State, Woodbridge Township, Pre-Refunded @ 101 (RB) (A) 6.800%, 08/01/00 250 269 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- State, Woodbridge Township, Series A (GO) 4.650%, 09/15/05 $ 100 $ 99 State, Woodbridge Township, Series C (GO) 4.650%, 09/15/05 100 99 Stony Brook, Sewer Authority (RB) 4.500%, 12/01/00 500 504 Sussex County (GO) 6.700%, 08/01/97 300 301 Union County (GO) 4.400%, 09/01/01 500 501 4.400%, 10/01/04 500 487 5.750%, 02/01/05 100 105 Union County, Environmental Improvement Authority (RB) 4.900%, 04/01/02 350 354 5.150%, 04/01/05 500 509 Union County, Improvement Authority (RB) 4.350%, 03/01/01 125 125 5.050%, 03/01/08 125 125 Union County, Improvement Authority Revenue, County Granted Capital Equipment Lease (RB) 4.375%, 11/01/02 200 198 Vineland, Additional State School Building Aid (GO) 8.500%, 05/01/01 100 114 Wanaque Valley, Sewer Authority, Series B (RB) (AMBAC) 5.100%, 09/01/03 300 306 Warren County, Municipal Utilities Authority, Wastewater Treatment Project (RB) 5.050%, 12/01/04 225 225 Warren County, Pollution Control Finance Authority, Resource Recovery Project (RB) (MBIA) 6.150%, 12/01/02 210 225 Warren County, Pollution Control Finance Authority, Series B (RB) (MBIA) 5.700%, 12/01/03 300 320 Warren Hills, Regional School District Authority, Pre-Refunded @ 100 (COP) (A) 7.100%, 06/15/99 230 243 22 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Washington Township (GO) (MBIA) 5.000%, 02/01/06 $ 250 $ 254 Washington Township, Board of Education Authority (MBIA) 7.500%, 09/01/00 500 546 Washington Township, Fire District Authority (GO) (FGIC) 4.700%, 01/01/06 300 299 Wayne Township (GO) 5.450%, 10/01/04 250 257 West Morris, Regional High School District Authority (COP) 7.450%, 03/15/00 195 204 West Windsor Township (GO) 6.000%, 10/15/05 200 207 Woodbridge Township, Sewer Utility Authority, Series B (GO) 4.250%, 09/15/01 250 246 Woodbridge Township, Sewer Utility, Series B (GO) 5.000%, 09/15/10 250 241 -------- 123,761 -------- NEW MEXICO--0.3% State, Educational Assistance Bonds, Series A (RB) (AMBAC) 6.700%, 04/01/02 200 209 State, Mortgage Finance Authority (RB) 7.250%, 09/01/22 230 243 -------- 452 -------- NEW YORK--0.2% State, Mortgage Agency, Homeowner Mortgage Revenue (RB) 5.300%, 10/01/16 250 250 -------- NORTH DAKOTA--0.1% State, Housing Finance Agency (RB) 6.000%, 07/01/18 210 213 -------- OHIO--0.1% State, Housing Finance Agency, Single Family Mortgage (RB) 6.600%, 09/01/01 160 168 -------- OKLAHOMA--0.1% State, Housing Finance Agency, Single Family, Class A (RB) 7.997%, 08/01/18 150 157 -------- PENNSYLVANIA--0.7% Delaware River, Pennsylvania & New Jersey Port Authority (RB) (FGIC) 5.400%, 01/01/13 1,000 999 -------- - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- PUERTO RICO--4.1% Puerto Rico, Commonwealth Aqueduct and Sewer Authority (RB) (FSA) 9.000%, 07/01/09 $ 505 $ 639 Puerto Rico, Commonwealth (GO) (FGIC) 6.600%, 07/01/97 275 275 Puerto Rico, Electric Power Authority (RB) (MBIA) 4.900%, 07/01/05 1,000 1,008 Puerto Rico, Electric Power Authority, Series V (RB) 5.600%, 07/01/03 80 84 Puerto Rico, Electric Power Authority, Series Y (RB) (MBIA) 6.500%, 07/01/06 500 562 Puerto Rico, Housing Banking and Finance Agency, Single Family Mortgage Project (RB) 7.100%, 12/01/99 220 224 Puerto Rico, Housing Revenue (RB) 7.100%, 06/01/99 65 66 Puerto Rico, Public Buildings Authority, Educational and Health Facilities, Series G (RB) 7.750%, 07/01/02 310 316 Puerto Rico, Public Buildings Authority, Series A (RB) (AMBAC) 4.500%, 07/01/01 200 201 Puerto Rico, Telephone Authority, Series M (RB) 5.000%, 01/01/02 500 508 5.400%, 01/01/08 260 262 Puerto Rico, Telephone Authority, Series M (RB) (AMBAC) 5.050%, 01/01/04 590 602 Puerto Rico, Telephone Authority, Series M (RB) (MBIA) 4.400%, 01/01/99 300 301 Puerto Rico, Telephone Authority, Series N (RB) 5.100%, 01/01/04 395 402 Puerto Rico, Tourist and Environmental (RB) 5.250%, 08/01/06 200 205 University of Puerto Rico, University Revenue Refunding, Series K, Pre-Refunded @ 100 (RB) (A) 6.500%, 06/01/98 300 307 -------- 5,962 -------- 23 Statement of Net Assets NEW JERSEY MUNICIPAL SECURITIES FUND (CONTINUED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- RHODE ISLAND--0.7% State, Housing and Mortgage Finance, Homeownership Opportunity Project (RB) 7.250%, 10/01/21 $ 120 $ 126 6.800%, 10/01/23 465 476 State, Housing and Mortgage Finance, Homeownership Opportunity Project, Series 9B1 (RB) 4.950%, 10/01/12 385 379 -------- 981 -------- TEXAS--0.7% Abilene, Higher Education Authority, Series B (RB) 5.600%, 07/01/04 500 513 Brazos, Higher Education Authority, Series C1 (RB) 5.700%, 06/01/04 465 481 -------- 994 -------- VIRGIN ISLANDS--0.4% Virgin Islands, Public Finance Authority, Series A, Pre-Refunded @ 101 (RB) (A) 7.300%, 10/01/00 500 550 -------- WISCONSIN--0.7% State, Housing and Economic Development Authority, Home Ownership Project (RB) 5.850%, 03/01/18 160 164 6.500%, 09/01/22 790 811 -------- 975 -------- Total Municipal Bonds (Cost $138,153) 141,631 -------- CASH EQUIVALENTS--2.9% Federated New Jersey Municipal Cash Trust 3,450 3,450 Goldman Sachs Tax-Free Money Market 705 705 -------- Total Cash Equivalents (Cost $4,155) 4,155 -------- Total Investments--99.5% (Cost $142,308) 145,786 -------- OTHER ASSETS AND LIABILITIES--0.5% Other Assets and Liabilities, Net 782 -------- - -------------------------------------------------------------------------------- MARKET DESCRIPTION VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization -- no par value) based on 11,991,270 outstanding shares of beneficial interest $125,739 Portfolio Shares of Class A (unlimited authorization -- no par value) based on 1,653,182 outstanding shares of beneficial interest 17,706 Undistributed net investment income 6 Accumulated net realized loss on investments (361) Net unrealized appreciation on investments 3,478 -------- Total Net Assets--100.0% $146,568 ======== Net Asset Value, Offering and Redemption Price Per Share--Class I $ 10.75 ======== Net Asset Value and Redemption Price Per Share--Class A $ 10.72 ======== Maximum Offering Price Per Share--Class A ($10.72 / 97%) $ 11.05 ======== (A) PRE-REFUNDED SECURITY--THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. (B) ZERO COUPON BOND--THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS REPRESENTS THE SECURITY'S EFFECTIVE YIELD AT PURCHASE. AMT--ALTERNATIVE MINIMUM TAX COP--CERTIFICATE OF PARTICIPATION GO--GENERAL OBLIGATION RB--REVENUE BOND THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT SUPPORT FOR CERTAIN SECURITIES AS DEFINED IN THE STATEMENT OF NET ASSETS: AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION FGIC--FEDERAL GUARANTY INSURANCE COMPANY FSA--FINANCIAL SECURITY ASSURANCE MBIA--MUNICIPAL BOND INVESTORS ASSURANCE 24 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) INTERMEDIATE-TERM GOVERNMENT SECURITIES FUND - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS--47.8% U.S. Treasury Notes 5.125%, 11/30/98 $ 250 $ 247 5.000%, 01/31/99 1,000 985 6.750%, 06/30/99 1,000 1,012 7.500%, 10/31/99 500 514 7.750%, 11/30/99 700 724 7.750%, 12/31/99 500 518 7.125%, 02/29/00 550 562 6.875%, 03/31/00 1,300 1,321 5.875%, 06/30/00 500 495 5.750%, 10/31/00 2,000 1,968 5.625%, 11/30/00 2,000 1,958 6.250%, 04/30/01 700 698 6.625%, 06/30/01 1,000 1,009 6.500%, 08/31/01 2,500 2,511 6.250%, 01/31/02 1,000 994 6.250%, 02/28/02 1,000 994 -------- Total U.S. Treasury Obligations (Cost $16,427) 16,510 -------- U.S. GOVERNMENT AGENCY OBLIGATIONS--45.7% Federal Home Loan Bank 6.100%, 02/17/00 1,000 994 5.250%, 09/01/00 500 484 5.500%, 01/23/01 800 775 5.800%, 02/20/01 500 487 7.000%, 12/04/02 1,000 1,003 7.280%, 12/23/02 1,000 1,008 7.385%, 09/11/03 1,000 1,003 Federal Home Loan Mortgage Corporation 6.130%, 08/19/99 500 499 7.195%, 07/30/01 1,000 1,007 7.055%, 08/02/01 1,000 1,009 7.125%, 09/24/03 1,000 1,004 7.100%, 02/20/04 1,000 995 Federal National Mortgage Association 6.900%, 01/22/02 500 500 7.140%, 08/15/02 800 804 7.200%, 08/19/02 500 500 6.250%, 01/13/03 1,000 972 6.720%, 02/25/03 1,000 990 7.370%, 05/14/03 750 757 7.600%, 05/24/06 1,000 1,009 -------- Total U.S. Government Agency Obligations (Cost $15,847) 15,800 -------- - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- CASH EQUIVALENTS--5.5% SEI Liquid Asset Trust-- Government Portfolio $1,320 $ 1,320 SEI Liquid Asset Trust-- Treasury Portfolio 591 591 -------- Total Cash Equivalents (Cost $1,911) 1,911 -------- Total Investments--99.0% (Cost $34,185) 34,221 -------- OTHER ASSETS AND LIABILITIES--1.0% Other Assets and Liabilities, Net 328 -------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization--no par value) based on 3,213,830 outstanding shares of beneficial interest 33,800 Portfolio Shares of Class A (unlimited authorization--no par value) based on 190,237 outstanding shares of beneficial interest 2,189 Distributions in excess of net investment income (2) Accumulated net realized loss on investments (1,474) Net unrealized appreciation on investments 36 -------- Total Net Assets--100.0% $ 34,549 ======== Net Asset Value, Offering and Redemption Price Per Share--Class I $ 10.15 ======== Net Asset Value and Redemption Price Per Share--Class A $ 10.14 ======== Maximum Offering Price Per Share--Class A ($10.14 / 96%) $ 10.56 ======== PENNSYLVANIA MUNICIPAL SECURITIES FUND - -------------------------------------------------------------------------------- MUNICIPAL BONDS--97.5% GUAM--1.7% Guam, Power Authority (RB) (AMBAC) 6.000%, 10/01/09 650 691 -------- PENNSYLVANIA--95.8% Allegheny County, Hospital Development Authority, Pittsburgh Mercy Health System (RB) (AMBAC) 5.500%, 08/15/10 425 430 25 Statement of Net Assets PENNSYLVANIA MUNICIPAL SECURITIES FUND (CONTINUED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Allegheny County, Hospital Development Authority (RB) (MBIA) 6.875%, 07/01/14 $175 $185 Allegheny County, Pennsylvania Hospital Development Authority (RB) (MBIA) 5.600%, 04/01/13 500 506 Allegheny County, Redevelopment Authority, Home Improvement (RB) 6.700%, 08/01/99 330 341 Allegheny County, Series C-44 (GO) (FGIC) 5.200%, 06/01/08 150 152 Allentown (GO) (AMBAC) 4.900%, 07/15/02 300 305 Allentown, Water Improvement Authority (RB) (AMBAC) 4.850%, 07/15/01 150 152 Altoona, Penn Area School District (GO) (FGIC) 5.350%, 01/15/04 200 206 Annville, Cleona School District (GO) (FGIC) 5.600%, 03/01/02 365 375 Bangor, Sewer Authority, Pre-Refunded @ 100 (B) 3.850%, 08/01/99 35 35 Beaver County, Series A (GO) (FGIC) 4.750%, 10/01/03 100 100 Beaver County, Series A (GO) (MBIA) 5.600%, 10/01/11 500 514 Bethel Park, School District (GO) (FGIC) 5.000%, 08/01/04 150 151 Butler County (GO) (FGIC) 6.000%, 07/15/12 300 310 Catasauqua, Area School Revenue (GO) 8.400%, 02/15/01 210 211 Chester County (GO) 5.500%, 11/15/10 175 180 Chester County, Health and Education Facilities Authority Main Line Health Systems, Series A (RB) 5.400%, 05/15/09 500 495 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Conestoga Valley, School District (GO) (FGIC) 7.000%, 05/01/06 $250 $270 Dauphin County, School District (GO) (A) 5.750%, 12/01/97 450 470 Erie County (GO) (FGIC) 5.250%, 09/01/12 95 93 Exeter Township, School District Revenue (RB) (FGIC) 5.500%, 05/15/03 550 554 Geisinger, Health System Authority (RB) 7.375%, 07/01/02 200 214 Great Valley, School District, Pre-Refunded @ 100 (GO) (STAID) (B) 5.400%, 03/01/00 500 512 Harrisburg (GO) 7.125%, 04/01/99 145 152 Harrisburg (RB) (MBIA) 5.600%, 09/15/11 575 581 Hempfield Township, Municipal Authority, Guaranteed Sewer Revenue (RB) (FGIC) 5.750%, 09/01/03 500 527 Hermitage, School District (GO) (FSA) 5.000%, 03/01/07 250 250 Lancaster County, Cocalico School District (GO) (MBIA) 6.000%, 02/15/15 200 207 Lancaster County, Hospital Authority, Lancaster General Hospital Project (RB) (AMBAC) 6.300%, 07/01/05 585 624 Lancaster County, Hospital Authority, Masonic Homes Project (RB) 4.900%, 11/15/03 115 115 Lancaster County, Higher Education Authority, Franklin & Marshall College (RB) (MBIA) 5.650%, 04/15/10 210 214 Lancaster County, Parking Authority (RB) 5.750%, 01/01/12 275 288 26 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Langhorne Manor Borough, Higher Education and Health Authority, Wood Services (RB) 6.400%, 11/15/06 $ 150 $ 163 Lehigh County, General Purpose Authority, St. Luke's Hospital (RB) (AMBAC) 4.750%, 11/15/00 100 101 Lycoming County, Hospital Authority (RB) 5.375%, 11/15/10 500 499 Lycoming County, Pennsylvania College of Technology (RB) (AMBAC) 5.000%, 11/01/02 400 406 Manheim Township, Central School District (GO) (FGIC) 5.300%, 05/15/03 300 310 Manheim Township, School District, Series A (GO) (FGIC) 4.900%, 06/01/03 500 503 Montgomery County, Series B (GO) 6.100%, 07/15/00 1,000 1,039 Montoursville, Area School District (GO) (FGIC) 5.000%, 05/01/03 600 601 Moon Township, Municipal Authority, Water and Sewer (RB) 3.875%, 12/01/02 121 114 North Allegheny, School District, Series A (GO) (AMBAC) 5.850%, 11/01/02 150 158 6.000%, 11/01/03 250 265 Northampton County, Higher Education Authority (RB) (MBIA) 7.100%, 11/15/09 500 538 Oley Valley, Area School District (GO) (AMBAC) 4.900%, 05/15/02 600 602 Panther Valley, School District (GO) (AMBAC) 5.250%, 04/01/01 225 226 Penn Manor, School District, Series A (GO) (FGIC) 4.700%, 06/01/01 300 301 Philadelphia, Authority For Industrial Development (RB) 5.500%, 07/01/10 250 253 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Philadelphia, Authority For Industrial Development, National Board of Medical Examiners Project (RB) 6.500%, 05/01/05 $ 325 $ 348 Philadelphia, Gas Works Authority, Series 14 (RB) (FSA) 6.375%, 07/01/14 750 798 Philadelphia (GO) (MBIA) 5.000%, 05/15/07 500 498 Philadelphia, Hospital Authority, Community College Project, Series B (RB) (MBIA) 5.250%, 05/01/00 500 511 Philadelphia, Hospital Authority, Saint Agnes Medical Center Project, Series A (RB) (MBIA) 5.000%, 07/01/05 865 865 Philadelphia, Municipal Authority Revenue, Justice Lease, Series B, Pre-Refunded @ 102 (RB) (FGIC) (B) 7.100%, 11/15/01 1,000 1,120 Pittsburgh, Series A (GO) (MBIA) 5.000%, 03/01/02 400 408 Pittsburgh, Water and Sewer Authority, Series A (RB) (FGIC) 4.600%, 09/01/03 270 269 Pittsburgh, Urban Redevelopment Authority (RB) 5.750%, 10/01/14 100 102 Reading (GO) (AMBAC) 6.000%, 11/15/02 600 603 Schuylkill County, Municipal Authority, Water Revenue Bond (RB) 3.900%, 07/01/03 205 197 Scranton-Lackawanna, Health and Welfare, Authority (RB) 6.625%, 04/15/07 70 71 Solanco, School District, Series B (GO) (FGIC) 5.250%, 02/01/02 325 334 Southeastern Pennsylvania, Transportation Authority Notes (RB) 6.100%, 06/01/02 500 530 State, Brookville Area School District Project, Series G (RB) (MBIA) 4.850%, 11/15/02 150 151 27 Statement of Net Assets PENNSYLVANIA MUNICIPAL SECURITIES FUND (CONTINUED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- State, Convention Center (RB) (MBIA) 6.750%, 09/01/19 $1,000 $1,112 State, Convention Center Authority, Series A (RB) (FSA) 6.250%, 09/01/04 550 598 State, Delaware River Joint Toll Bridge (RB) (FGIC) 6.000%, 07/01/18 625 637 State, First Series (GO) 6.375%, 09/15/12 300 317 State, Higher Education Authority, College and University Revenue RB) (MBIA) 5.000%, 11/01/07 500 500 State, Higher Education Authority, Series I (RB) (AMBAC) 5.000%, 06/15/03 100 102 State, Higher Education Authority, Student Loan, Series A (RB) (FGIC) 6.800%, 12/01/00 995 1,058 State, Higher Education Authority, Thomas Jefferson University, Series A (RB) 6.625%, 08/15/09 600 654 State, Higher Education Authority, University of Pennsylvania, Series A (RB) 5.600%, 01/01/10 150 154 State, Higher Education Facilities, Series G (RB) (AMBAC) 5.875%, 12/15/07 400 418 State, Hospital and Education Authority (RB) (FSA) 5.625%, 10/01/18 500 497 State, Housing Finance Agency (RB) 5.450%, 10/01/14 500 493 State, Housing Finance Authority (RB) 5.550%, 04/01/07 100 103 5.600%, 10/01/09 300 306 State, Housing Finance Authority, Series 49 (RB) 5.600%, 10/01/05 75 77 - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- State, Intergovernmental Co-op Authority (RB) (FGIC) 4.900%, 06/15/03 $ 800 $ 808 State, Public School Building Authority, Hazleton Area School District Project (RB) (FGIC) 6.100%, 03/01/02 500 525 State, School Building Authority, Delaware County Community College (RB) (MBIA) 5.200%, 04/01/08 250 251 State, Second Series (GO) 5.500%, 07/01/01 150 156 5.250%, 06/15/09 1,000 1,008 State, Series A (COP) (AMBAC) 5.200%, 07/01/05 500 510 State, Third Series (GO) 6.000%, 11/15/02 1,000 1,067 State, Turnpike Commission (RB) (MBIA) 5.500%, 12/01/17 1,000 984 State, Turnpike Commission, Series P (RB) (AMBAC) 5.900%, 12/01/08 1,000 1,053 State, Turnpike Commission, Series L (AMBAC) 6.250%, 06/01/11 500 532 Swarthmore College (RB) 7.375%, 09/15/18 500 526 Washington, School District, Series 1993-A (GO) (FGIC) 5.700%, 09/01/06 900 920 Wattsburg, School District (GO) (AMBAC) 5.700%, 04/01/04 75 78 West Chester, Area School District (GO) (STAID) 5.400%, 01/15/08 500 509 Wilson, Area School District (GO) (FGIC) 4.500%, 02/15/00 445 446 York County (GO) (FGIC) 5.600%, 10/01/02 345 362 -------- 39,364 -------- Total Municipal Bonds (Cost $39,393) 40,055 -------- 28 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- CASH EQUIVALENT--1.6% PNC Tax-Free Money Market Fund $653 $ 653 -------- Total Cash Equivalent (Cost $653) 653 -------- Total Investments--99.1% (Cost $40,046) 40,708 -------- OTHER ASSETS AND LIABILITIES,--0.9% Other Assets and Liabilities, Net 369 -------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization--no par value) based on 3,997,531 outstanding shares of beneficial interest 40,095 Portfolio Shares of Class A (unlimited authorization--no par value) based on 33,636 outstanding shares of beneficial interest 343 Undistributed net investment income 1 Accumulated net realized loss on investments (25) Net unrealized appreciation on investments 663 -------- Total Net Assets--100.0% $ 41,077 ======== Net Asset Value, Offering and Redemption Price Per Share--Class I $ 10.19 ======== Net Asset Value and Redemption Price Per Share--Class A $ 10.16 ======== Maximum Offering Price Per Share--Class A ($10.16 / 97%) $ 10.47 ======== (A) FLOATING RATE INSTRUMENT WITH DEMAND FEATURES. THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS IS THE RATE IN EFFECT ON JUNE 30, 1997. THE DATE SHOWN IS THE LONGER OF THE RESET DATE OR THE DEMAND DATE. (B) PRE-REFUNDED SECURITY--THE MATURITY DATE SHOWN IS THE PRE-REFUNDED DATE. COP--CERTIFICATE OF PARTICIPATION GO--GENERAL OBLIGATION RB--REVENUE BOND THE FOLLOWING ORGANIZATIONS HAVE PROVIDED UNDERLYING CREDIT SUPPORT FOR CERTAIN SECURITIES AS DEFINED IN THE STATEMENT OF NET ASSETS: AMBAC--AMERICAN MUNICIPAL BOND ASSURANCE CORPORATION FGIC--FINANCIAL GUARANTY INSURANCE COMPANY FSA--FINANCIAL SECURITY ASSURANCE MBIA--MUNICIPAL BOND INVESTORS ASSURANCE STAID--STATE AID WITHHOLDING GNMA FUND - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- U.S. AGENCY MORTGAGE-BACKED BONDS--97.2% Government National Mortgage Association 8.000%, 05/15/23 $ 323 $ 331 7.000%, 06/15/23 125 123 6.000%, 11/15/23 884 822 6.500%, 11/15/23 774 741 6.000%, 12/15/23 1,274 1,183 6.500%, 12/15/23 400 383 7.000%, 12/15/23 797 783 6.000%, 01/20/24 830 767 8.000%, 08/15/24 422 432 8.000%, 09/15/24 1,174 1,200 7.500%, 08/15/25 292 293 -------- Total U.S. Agency Mortgage-Backed Bonds (Cost $7,162) 7,058 -------- CASH EQUIVALENT--2.9% SEI Liquid Asset Trust-- Government Portfolio 208 208 -------- Total Cash Equivalent (Cost $208) 208 -------- Total Investments--100.1% (Cost $7,369) 7,266 -------- OTHER ASSETS AND LIABILITIES--(0.1%) Other Assets and Liabilities, Net (6) -------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization--no par value) based on 633,995 outstanding shares of beneficial interest 6,854 Portfolio Shares of Class A (unlimited authorization--no par value) based on 118,070 outstanding shares of beneficial interest 1,333 Accumulated net realized loss on investments (822) Net unrealized depreciation on investments (105) -------- Total Net Assets--100.0% 7,260 ======== Net Asset Value, Offering and Redemption Price Per Share--Class I $ 9.66 ======== Net Asset Value and Redemption Price Per Share--Class A $ 9.64 ======== Maximum Offering Price Per Share--Class A ($9.64 / 97%) $ 9.94 ======== 29 Statement of Net Assets EQUITY GROWTH FUND - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- COMMON STOCKS--89.1% BANKS--2.6% First Union 21,600 $ 1,998 Northern Trust 60,200 2,912 -------- 4,910 -------- BEAUTY PRODUCTS--2.2% Procter & Gamble 29,200 4,125 -------- CHEMICALS--1.5% Monsanto 67,900 2,924 -------- COMPUTERS, SOFTWARE & SERVICES--14.8% Computer Associates International 71,850 4,001 Computer Sciences* 41,600 3,000 Dell Computer* 24,100 2,830 Electronic Data Systems 89,900 3,686 EMC* 70,200 2,738 Hewlett Packard 69,900 3,914 Microsoft* 30,800 3,892 Sungard Data Systems* 86,500 4,022 -------- 28,083 -------- DRUGS--7.1% Merck 63,100 6,531 Pfizer 57,300 6,847 -------- 13,378 -------- ENTERTAINMENT--2.5% Walt Disney 58,500 4,695 -------- FINANCIAL SERVICES--4.0% FHLMC 63,100 2,169 Franklin Resources 44,300 3,215 MBNA 60,275 2,208 -------- 7,592 -------- FOOD, BEVERAGE & TOBACCO--1.8% Coca Cola 48,500 3,383 -------- GAS/NATURAL GAS--1.0% Enron 46,700 1,906 -------- HOUSEHOLD PRODUCTS--2.8% Illinois Tool Works 104,600 5,223 -------- INSURANCE--5.4% American International Group 27,250 4,071 Conseco 50,660 1,874 SunAmerica 40,500 1,974 Travelers 36,966 2,331 -------- 10,250 -------- - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- LEISURE PRODUCTS--2.4% Mattel 137,300 $ 4,651 -------- MACHINERY--3.0% General Electric 88,100 5,760 -------- MARINE TRANSPORTATION--1.6% Carnival, Class A 74,200 3,061 -------- MEDICAL PRODUCTS & SERVICES--3.1% Boston Scientific* 36,900 2,267 Healthsouth Rehabilitation* 147,500 3,678 -------- 5,945 -------- MISCELLANEOUS BUSINESS SERVICES--11.8% 3Com* 62,800 2,826 Automatic Data Processing 101,300 4,761 Cisco Systems* 47,800 3,209 First Data 108,100 4,750 Oracle Systems* 101,050 5,090 Parametric Technology* 42,090 1,792 -------- 22,428 -------- MISCELLANEOUS CONSUMER SERVICES--3.9% Accustaff* 126,200 2,989 Service International 132,600 4,359 -------- 7,348 -------- RUBBER & PLASTIC--1.1% Nike 34,600 2,020 -------- SEMI-CONDUCTORS/INSTRUMENTS--5.0% Intel 21,900 3,106 LSI Logic* 74,200 2,374 Xilinx* 81,500 3,999 -------- 9,479 -------- SPECIALTY CONSTRUCTION--2.7% Ericsson (LM) ADR* 129,210 5,088 -------- STEEL & STEEL WORKS--1.6% Engelhard 141,150 2,955 -------- TELEPHONES & TELECOMMUNICATION--1.7% Worldcom* 103,630 3,316 -------- WHOLESALE--5.5% Gillette 50,200 4,756 Johnson & Johnson 87,200 5,614 -------- 10,370 -------- Total Common Stocks (Cost $136,992) 168,890 -------- 30 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- SHARES/FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- CASH EQUIVALENTS--8.3% Aim Short-Term Prime Obligation $5,320 $ 5,320 Vontobel Europacific Fund 507 10,361 -------- Total Cash Equivalents (Cost $13,334) 15,681 -------- TREASURY BILL--0.8% U.S. Treasury Bill (A) 4.400%, 07/03/97 1,500 1,499 -------- Total Treasury Bill (Cost $1,500) $ 1,499 ======== Total Investments--98.2% (Cost $151,826) 186,070 -------- OTHER ASSETS AND LIABILITIES--1.8% Other Assets and Liabilities, Net 3,449 -------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization--no par value) based on 17,476,951 outstanding shares of beneficial interest 141,659 Portfolio Shares of Class A (unlimited authorization--no par value) based on 8,830 outstanding shares of beneficial interest 92 Portfolio Shares of Class B (unlimited authorization--no par value) based on 2,427 outstanding shares of beneficial interest 25 Distributions in excess of net investment income (3) Accumulated net realized gain on investments 13,502 Net unrealized appreciation on investments 34,244 -------- Total Net Assets--100.0% $189,519 ======== Net Asset Value, Offering and Redemption Price Per Share-- Class I $ 10.84 ======== Net Asset Value and Redemption Price Per Share -- Class A $ 10.86 ======== Maximum Offering Price Per Share -- Class A ($10.86 / 94.5%) $ 11.49 ======== Net Asset Value and Offering Price Per Share-- Class B (1) $ 10.83 ======== * NON-INCOME PRODUCING SECURITY (1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. (A) THE RATE REFLECTED ON THE STATEMENT OF NET ASSETS REPRESENTS THE SECURITY'S DISCOUNT RATE AT PURCHASE. ADR--AMERICAN DEPOSITORY RECEIPT EQUITY VALUE FUND - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- COMMON STOCKS--94.4% AIRCRAFT--3.5% Boeing 80,000 $ 4,245 United Technologies 55,000 4,565 -------- 8,810 -------- BANKS--6.4% Bank of New York 90,000 3,915 Citicorp 35,000 4,220 J.P. Morgan 35,000 3,653 Norwest 75,000 4,219 -------- 16,007 -------- CHEMICALS--1.9% E.I. DuPont de Nemours 76,000 4,778 -------- COMPUTERS & SERVICES--5.4% Compaq Computer* 40,000 3,970 Hewlett Packard 80,000 4,480 Microsoft* 40,000 5,055 -------- 13,505 -------- CONTAINERS & PACKAGING--1.5% Crown Cork & Seal 70,000 3,741 -------- DRUGS--10.3% Bristol-Myers Squibb 60,000 4,860 Glaxo Wellcome PLC (ADR) 110,000 4,599 Merck 55,000 5,692 Pfizer 45,000 5,377 Pharmacia & Upjohn 5,000 174 SmithKline Beecham 55,000 5,039 -------- 25,741 -------- ELECTRICAL & ELECTRONIC PRODUCTS--3.8% Emerson Electric 80,000 4,405 General Electric 80,000 5,230 -------- 9,635 -------- ELECTRICAL UTILITIES--1.3% FPL Group 70,000 3,224 -------- FINANCIAL SERVICES--3.5% American Express 60,000 4,470 Federal National Mortgage Association 100,000 4,362 -------- 8,832 -------- FOOD, BEVERAGE & TOBACCO--7.0% Anheuser Busch 100,000 4,194 CPC International 55,000 5,077 PepsiCo 110,000 4,132 Sara Lee 100,000 4,163 -------- 17,566 -------- 31 Statement of Net Assets EQUITY VALUE FUND (CONTINUED) - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- GAS/NATURAL GAS--2.8% Consolidated Natural Gas 70,000 $ 3,767 Enron 80,000 3,265 -------- 7,032 -------- GLASS PRODUCTS--2.0% Corning 90,000 5,006 -------- HOUSEHOLD PRODUCTS--3.5% Colgate-Palmolive 70,000 4,568 Procter & Gamble 30,000 4,238 -------- 8,806 -------- INSURANCE--3.9% American International Group 35,000 5,228 CIGNA 25,000 4,438 -------- 9,666 -------- LEISURE PRODUCTS--2.0% Mattel 150,000 5,081 -------- MACHINERY--3.7% Deere 85,000 4,664 Tenneco 100,000 4,519 -------- 9,183 -------- MANUFACTURING--1.6% Minnesota Mining & Manufacturing 40,000 4,080 -------- PAPER & PACKAGING--0.7% Ikon Office Solutions 70,000 1,746 -------- PAPER & PAPER PRODUCTS--0.8% Unisource Worldwide 120,000 1,920 -------- PETROLEUM & FUEL PRODUCTS--1.3% Union Pacific Resources Group 130,000 3,234 -------- PETROLEUM REFINING--7.6% Amoco 45,000 3,912 Exxon 80,000 4,920 Mobil 70,000 4,891 Royal Dutch Petroleum (ADR) 100,000 5,438 -------- 19,161 -------- PRINTING & PUBLISHING--3.9% Gannett 50,000 4,938 Time Warner 100,000 4,825 -------- 9,763 -------- RAILROADS--3.4% Burlington Northern Santa Fe 45,000 4,044 Union Pacific 65,000 4,583 -------- 8,627 -------- - -------------------------------------------------------------------------------- SHARES/FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- RETAIL--1.7% Sears Roebuck 80,000 $ 4,300 -------- SEMI-CONDUCTORS/INSTRUMENTS--1.4% Intel 25,000 3,545 -------- STEEL & STEEL WORKS--1.3% Engelhard 150,000 3,141 -------- TELEPHONES & TELECOMMUNICATION--8.1% Ameritech 60,000 4,076 AT&T 90,000 3,156 Bellsouth 80,000 3,710 Lucent Technologies 70,000 5,044 SBC Communications 70,000 4,331 -------- 20,317 -------- Total Common Stocks (Cost $173,399) 236,447 -------- CASH EQUIVALENTS--5.8% SEI Liquid Asset Trust-- Government Portfolio $11,121 11,121 SEI Liquid Asset Trust-- Treasury Portfolio 3,499 3,499 -------- Total Cash Equivalents (Cost $14,620) 14,620 -------- Total Investments--100.2% (Cost $188,019) 251,067 -------- OTHER ASSETS AND LIABILITIES,--(0.2%) Other Assets and Liabilities, Net (567) -------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization--no par value) based on 15,240,419 outstanding shares of beneficial interest 161,104 Portfolio Shares of Class A (unlimited authorization--no par value) based on 815,451 outstanding shares of beneficial interest 9,864 Portfolio Shares of Class B (unlimited authorization--no par value) based on 57,824 outstanding shares of beneficial interest 877 Distributions in excess of net investment income (3) Accumulated net realized gain on investments 15,610 Net unrealized appreciation on investments 63,048 -------- Total Net Assets--100.0% $250,500 ======== 32 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share -- Class I $ 15.55 ======== Net Asset Value and Redemption Price Per Share -- Class A $ 15.55 ======== Maximum Offering Price Per Share -- Class A ($15.55 / 94.5%) $ 16.46 ======== Net Asset Value and Offering Price Per Share-- Class B (1) $ 15.54 ======== * NON-INCOME PRODUCING SECURITY (1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. ADR--AMERICAN DEPOSITORY RECEIPT EQUITY INCOME FUND - -------------------------------------------------------------------------------- COMMON STOCKS--84.8% AIRCRAFT--2.5% Textron 24,000 $ 1,593 United Technologies 20,000 1,660 -------- 3,253 -------- AUTOMOTIVE--0.8% Chrysler 30,000 984 -------- BANKS--9.2% Bank of New York 75,000 3,262 Bankers Trust New York 18,000 1,566 Chase Manhattan Bank 14,000 1,359 J.P. Morgan 20,000 2,087 NationsBank 30,000 1,935 Norwest 30,000 1,687 -------- 11,896 -------- CHEMICALS--2.3% E.I. DuPont de Nemours 28,000 1,760 Imperial Chemical Industries PLC 22,000 1,251 -------- 3,011 -------- DRUGS--11.3% American Home Products 31,000 2,371 Bristol-Myers Squibb 43,000 3,483 Glaxo Wellcome PLC (ADR) 45,000 1,882 Merck 20,000 2,070 Pfizer 10,000 1,195 Pharmacia & Upjohn 25,000 869 SmithKline Beecham 30,000 2,749 -------- 14,619 -------- - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- ELECTRICAL & ELECTRONIC PRODUCTS--6.4% Emerson Electric 44,000 $ 2,423 General Electric 54,000 3,530 Thomas & Betts 45,000 2,365 -------- 8,318 -------- ELECTRICAL UTILITIES--2.1% Long Island Lighting 25,000 575 Public Service Company of Colorado 30,000 1,245 Southern 40,000 875 -------- 2,695 -------- ENVIRONMENTAL SERVICES--0.8% Browning-Ferris Industries 33,000 1,097 -------- FINANCIAL SERVICES--3.8% Beneficial 20,000 1,421 Cali Realty 20,000 680 Healthcare Realty Trust 20,000 557 Hospitality Properties Trust 23,000 704 Liberty Property Trust 9,000 224 Storage Trust Realty 25,000 663 United Dominion Realty Trust 50,000 709 -------- 4,958 -------- FOOD, BEVERAGE & TOBACCO--2.4% CPC International 18,000 1,662 Sara Lee 35,000 1,457 -------- 3,119 -------- GAS/NATURAL GAS--5.9% Consolidated Natural Gas 50,000 2,691 Sonat 37,000 1,896 Trans Canada Pipeline 85,000 1,711 Williams 30,000 1,313 -------- 7,611 -------- GLASS PRODUCTS--2.7% Corning 35,000 1,947 PPG Industries 26,000 1,511 -------- 3,458 -------- HOUSEHOLD PRODUCTS--2.8% Colgate-Palmolive 32,000 2,088 Hubbell Class B 35,000 1,540 -------- 3,628 -------- INSURANCE--2.6% Hartford Financial Services Group 12,000 993 Marsh & McLennan 20,000 1,428 TIG Holdings 30,000 938 -------- 3,359 -------- 33 Statement of Net Assets EQUITY INCOME FUND (CONTINUED) - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- LUMBER & WOOD PRODUCTS--1.0% Georgia-Pacific 16,000 $ 1,366 -------- MACHINERY--1.8% Pall 30,000 698 Tenneco 35,000 1,582 -------- 2,280 -------- MEDICAL PRODUCTS & SERVICES--1.3% Baxter International 33,000 1,724 -------- PAPER & PAPER PRODUCTS--2.6% Kimberly Clark 55,000 2,736 Unisource Worldwide 40,000 640 -------- 3,376 -------- PETROLEUM & FUEL PRODUCTS--1.4% Atlantic Richfield 26,000 1,833 -------- PETROLEUM REFINING--8.5% Exxon 58,000 3,567 Mobil 42,000 2,935 Royal Dutch Petroleum (ADR) 64,000 3,480 Texaco 9,000 979 -------- 10,961 -------- PRINTING & PUBLISHING--2.3% Hollinger International 70,000 783 McGraw-Hill 38,000 2,235 -------- 3,018 -------- RAILROADS--2.9% Burlington Northern Santa Fe 14,000 1,258 Union Pacific 35,000 2,468 -------- 3,726 -------- RETAIL--1.3% J.C. Penney 33,000 1,722 -------- RUBBER & PLASTIC--0.7% Rubbermaid 30,000 893 -------- TELEPHONES & TELECOMMUNICATION--5.4% AT&T 28,000 982 Bell Atlantic 25,000 1,897 Bellsouth 45,000 2,087 GTE 45,000 1,974 -------- 6,940 -------- Total Common Stocks (Cost $77,146) 109,845 -------- - -------------------------------------------------------------------------------- SHARES/FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- PREFERRED STOCKS--4.8% Airtouch Communications 22,000 $ 1,056 Conseco Financial Trust 27,000 700 Crown Cork and Seal 20,000 1,010 Ikon Office Products 11,000 708 Mattel 50,000 706 Sun 30,000 911 SunAmerica 25,000 1,091 -------- Total Preferred Stocks (Cost $5,911) 6,182 -------- CONVERTIBLE BONDS--0.8% Hilton Hotels 5.000%, 05/15/06 200 213 Platinum Technology 6.750%, 11/15/01 100 121 U.S. Filter 4.500%, 12/15/01 300 291 USA Waste Services 4.000%, 02/01/02 400 430 -------- Total Convertible Bonds (Cost $1,014) 1,055 -------- U.S. TREASURY OBLIGATION--0.8% U.S. Treasury Note 5.875%, 02/28/99 1,000 998 -------- Total U.S. Treasury Obligation (Cost $995) 998 -------- CASH EQUIVALENTS--9.3% SEI Liquid Asset Trust-- Government Portfolio $6,215 6,215 SEI Liquid Asset Trust-- Treasury Portfolio 5,774 5,774 -------- Total Cash Equivalents (Cost $11,989) 11,989 -------- Total Investments--100.5% (Cost $97,055) 130,069 -------- OTHER ASSETS AND LIABILITIES--(0.5%) Other Assets and Liabilities, Net (623) -------- 34 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization--no par value) based on 7,455,457 outstanding shares of beneficial interest $ 75,992 Portfolio Shares of Class A (unlimited authorization--no par value) based on 978,328 outstanding shares of beneficial interest 11,659 Portfolio Shares of Class B (unlimited authorization--no par value) based on 76,340 outstanding shares of beneficial interest 1,139 Distributions in excess of net investment income (1) Accumulated net realized gain on investments 7,643 Net unrealized appreciation on investments 33,014 -------- Total Net Assets--100.0% $129,446 ======== Net Asset Value, Offering and Redemption Price Per Share -- Class I $ 15.21 ======== Net Asset Value and Redemption Price Per Share -- Class A $ 15.24 ======== Maximum Offering Price Per Share -- Class A ($15.24 / 94.5%) $ 16.13 ======== Net Asset Value and Offering Price Per Share -- Class B (1) $ 15.20 ======== (1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. ADR--AMERICAN DEPOSITORY RECEIPT MID CAP FUND - -------------------------------------------------------------------------------- COMMON STOCKS--96.0% APPAREL/TEXTILES--2.0% Albany International 45,000 1,012 -------- AUTOMOTIVE--6.8% Cooper* 45,000 1,046 Dial 25,000 391 Federal Signal 45,000 1,131 Regal Beloit 35,500 941 -------- 3,509 -------- BANKS--10.1% Associated Bancorp 18,000 711 First Bank of Puerto Rico 25,000 647 First Tennessee National 30,000 1,440 Merchantile Bancorp 12,000 729 Wilmington Trust 20,000 915 Zions Bancorp 20,000 752 -------- 5,194 -------- - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- BUILDING & CONSTRUCTION--2.1% Jacobs Engineering Group* 40,000 $ 1,075 -------- CHEMICALS--6.4% Cytec Industries* 35,000 1,308 Olin 18,000 703 Praxair 22,500 1,260 -------- 3,271 -------- COMMUNICATIONS EQUIPMENT--3.0% ADC Telecommunications* 17,000 567 Ascend Communications* 12,000 472 Qualcomm* 10,000 509 -------- 1,548 -------- COMPUTERS & SERVICES--2.0% Gateway 2000* 15,000 487 America Online* 10,000 556 -------- 1,043 -------- DRUGS--2.9% Medpartners* 25,000 541 Watson Pharmaceuticals* 22,500 951 -------- 1,492 -------- ELECTRICAL TECHNOLOGY--0.6% Sensormatic Electronics 25,000 322 -------- ENERGY & POWER--1.5% Calenergy* 20,000 760 -------- FINANCIAL SERVICES--2.1% Franklin Resources 15,000 1,088 -------- HOUSEHOLD PRODUCTS--3.1% Danaher 12,000 610 Valspar 32,500 963 -------- 1,573 -------- INSURANCE--5.9% Amerin* 25,000 606 Cincinnati Financial 15,000 1,185 Delphi Financial Group* 18,360 707 SunAmerica 11,000 536 -------- 3,034 -------- MACHINERY--3.4% Baldor Electric 14,000 414 Lindsay Manufacturing 41,250 1,351 -------- 1,765 -------- MEDICAL PRODUCTS & SERVICES--3.2% Biomet* 15,000 279 Genesis Health Ventures* 20,000 675 Maxicare Health Plans* 30,000 671 -------- 1,625 -------- 35 Statement of Net Assets MID CAP FUND (CONTINUED) - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- MISCELLANEOUS BUSINESS SERVICES--8.5% Adaptec* 12,000 $ 417 CUC International* 20,000 516 Electronic Arts* 20,000 672 Informix* 27,500 247 McAfee Associates* 10,000 631 Parametric Technology* 10,000 426 Sungard Data Systems* 10,000 465 U.S. Filter* 15,000 409 Whitman 22,500 570 -------- 4,353 -------- MISCELLANEOUS CONSUMER SERVICES--2.2% Accustaff* 20,000 474 Stewart Enterprises Class A 15,000 630 -------- 1,104 -------- MISCELLANEOUS MANUFACTURING--1.4% Wolverine Tube* 25,000 697 -------- OFFICE FURNITURE & FIXTURES--1.1% Lear* 12,500 555 -------- PAPER & PAPER PRODUCTS--3.5% Bemis 32,500 1,410 Wausau Paper Mills 20,000 377 -------- 1,787 -------- PETROLEUM REFINING--2.4% Saga Petroleum Class B 70,000 1,225 -------- PROFESSIONAL SERVICES--1.3% Paychex 18,000 684 -------- RETAIL--7.5% Bed Bath and Beyond* 20,000 607 Boston Chicken* 25,000 350 Intimate Brands 20,000 420 Piercing Pagoda * 45,000 1,131 Rainforest Cafe* 20,000 507 Starbucks* 5,000 195 Tech Data* 20,000 629 -------- 3,839 -------- RUBBER & PLASTIC--1.5% Sonoco Products 25,000 761 -------- SEMI-CONDUCTORS/INSTRUMENTS--3.0% American Power Conversion* 20,000 380 Analog Devices* 25,000 664 Xilinx* 10,000 491 -------- 1,535 -------- SPECIALTY MACHINERY--0.9% American Standard Companies* 10,000 447 -------- - -------------------------------------------------------------------------------- SHARES/FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- STEEL & STEEL WORKS--1.0% Schnitzer Steel Industries Class A 17,500 $ 521 -------- TELEPHONES & TELECOMMUNICATION--1.3% Aliant Communications 35,000 682 -------- TESTING LABORATORIES--1.0% Chiron* 25,000 522 -------- TRANSPORTATION SERVICES--1.1% GATX 10,000 578 -------- TRUCKING--0.9% Kenan Transport 24,479 483 -------- WHOLESALE--2.3% Cardinal Health 7,000 401 Chronimed* 15,000 127 Neopath* 35,000 665 -------- 1,193 -------- Total Common Stocks (Cost $37,869) 49,277 -------- CASH EQUIVALENTS--3.7% SEI Liquid Asset Trust -- Government Portfolio $ 1,528 1,528 SEI Liquid Asset Trust-- Treasury Portfolio 385 385 -------- Total Cash Equivalents (Cost $1,913) 1,913 ======== Total Investments--99.7% (Cost $39,782) 51,190 -------- OTHER ASSETS AND LIABILITIES--0.3% Other Assets and Liabilities, Net 147 -------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization--no par value) based on 3,288,069 outstanding shares of beneficial interest 34,160 Portfolio Shares of Class A (unlimited authorization--no par value) based on 353,785 outstanding shares of beneficial interest 3,863 Distribution in excess of net investment income (1) Accumulated net realized gain on investments 1,988 Net unrealized appreciation on investments 11,327 -------- Total Net Assets--100.0% $ 51,337 ======== 36 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share -- Class I $ 14.10 ======== Net Asset Value and Redemption Price Per Share -- Class A $ 14.07 ======== Maximum Offering Price Per Share -- Class A ($14.07 / 96%) $ 14.66 ======== * NON-INCOME PRODUCING SECURITY BALANCED FUND - -------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS--16.6% Federal Home Loan Bank 8.125%, 11/07/11 $ 500 500 Federal Home Loan Mortgage Corporation 6.550%, 01/04/00 500 502 6.704%, 01/09/07 500 497 Federal National Mortgage Association 7.680%, 12/01/97 300 303 8.350%, 11/10/99 500 523 6.100%, 02/10/00 500 497 5.800%, 12/10/03 500 479 8.625%, 11/10/04 500 518 8.550%, 12/10/04 750 756 8.000%, 04/13/05 500 506 7.760%, 08/02/06 500 508 -------- Total U.S. Government Agency Obligations (Cost $5,550) 5,589 -------- U.S. TREASURY OBLIGATIONS--11.3% U.S. Treasury Notes 6.250%, 03/31/99 1,000 1,003 7.000%, 04/15/99 500 508 6.375%, 04/30/99 1,000 1,005 7.750%, 11/30/99 500 517 5.875%, 06/30/00 250 248 7.500%, 11/15/01 500 521 -------- Total U.S. Treasury Obligations (Cost $3,753) 3,802 -------- CORPORATE BONDS--7.6% BANKS--1.4% First Chicago NBD Bancorp 7.125%, 05/15/07 500 497 -------- FINANCIAL SERVICES--1.5% American Express Credit 6.750%, 06/01/01 500 501 -------- - -------------------------------------------------------------------------------- SHARES/FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- UTILITIES--1.5% Southern California Edison 6.750%, 01/15/00 500 $ 502 -------- INDUSTRIAL--3.2% Browning-Ferris 6.375%, 01/15/08 500 473 E.I. DuPont de Nemours 6.750%, 10/15/02 500 499 Philip Morris 9.250%, 02/15/00 100 106 -------- 1,078 -------- Total Corporate Bonds (Cost $2,579) 2,578 -------- COMMON STOCKS--63.8% AIRCRAFT--2.2% Boeing 6,000 318 United Technologies 5,000 415 -------- 733 -------- BANKS--5.2% Bank of New York 9,500 413 Citicorp 4,000 482 J.P. Morgan 4,000 417 Norwest 8,000 450 -------- 1,762 -------- CHEMICALS--2.6% E.I. DuPont de Nemours 8,000 503 Monsanto 9,000 388 -------- 891 -------- COMPUTERS & SERVICES--6.1% 3Com* 7,000 315 Cisco Systems* 6,500 436 Compaq Computer* 4,000 397 Hewlett Packard 7,000 392 Microsoft* 4,000 505 -------- 2,045 -------- CONTAINERS & PACKAGING--1.0% Crown Cork & Seal 6,000 321 -------- DRUGS--6.5% Bristol-Myers Squibb 6,000 486 Glaxo PLC (ADR) 9,600 401 Merck 4,000 414 Pfizer 4,300 514 SmithKline Beecham 4,000 366 -------- 2,181 -------- 37 Statement of Net Assets BALANCED FUND (CONTINUED) - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- ELECTRICAL & ELECTRONIC PRODUCTS--2.1% Emerson Electric 6,000 $ 330 General Electric 6,000 392 -------- 722 -------- FINANCIAL SERVICES--3.8% American Express 6,000 447 Federal National Mortgage Association 9,000 393 Morgan Stanley, Dean Witter, Discover 10,000 431 -------- 1,271 -------- FOOD, BEVERAGE & TOBACCO--4.4% Anheuser Busch 8,000 335 CPC International 4,000 369 PepsiCo 12,000 451 Sara Lee 8,000 333 -------- 1,488 -------- GAS/NATURAL GAS--3.1% Consolidated Natural Gas 4,300 231 Enron 11,000 449 Williams 8,000 350 -------- 1,030 -------- GLASS PRODUCTS--1.8% Corning 11,000 612 -------- HOUSEHOLD PRODUCTS--2.4% Colgate-Palmolive 6,000 392 Danaher 8,000 407 -------- 799 -------- INSURANCE--1.3% American International Group 3,000 448 -------- LEISURE PRODUCTS--1.3% Mattel 13,000 440 -------- MACHINERY--2.1% Deere 6,500 357 Tenneco 7,500 339 -------- 696 -------- PETROLEUM REFINING--5.5% Amoco 5,000 435 Exxon 7,000 431 Mobil 8,000 559 Royal Dutch Petroleum (ADR) 8,000 435 -------- 1,860 -------- - -------------------------------------------------------------------------------- SHARES/FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- PRINTING & PUBLISHING--1.9% Gannett 4,000 $ 395 Time Warner 5,000 241 -------- 636 -------- RAILROADS--2.7% Burlington Northern Santa Fe 5,500 494 Union Pacific 6,000 423 -------- 917 -------- RETAIL--0.9% Sears Roebuck 5,500 296 -------- SEMI-CONDUCTORS/INSTRUMENTS--1.3% Intel 3,000 425 -------- STEEL & STEEL WORKS--0.7% Engelhard 12,000 251 -------- TELEPHONES & TELECOMMUNICATION--5.1% Ameritech 4,500 306 Bellsouth 6,000 278 Lucent Technologies 6,000 432 SBC Communications 4,000 248 Worldcom* 14,000 448 -------- 1,712 -------- Total Common Stocks (Cost $14,853) 21,536 -------- CASH EQUIVALENTS--0.8% SEI Liquid Asset Trust-- Government Portfolio $196 196 SEI Liquid Asset Trust-- Treasury Portfolio 80 80 -------- Total Cash Equivalents (Cost $276) 276 -------- Total Investments--100.1% (Cost $27,011) 33,781 -------- OTHER ASSETS AND LIABILITIES--(0.1%) Other Assets and Liabilities, Net (19) -------- 38 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization--no par value) based on 1,873,666 outstanding shares of beneficial interest $ 17,466 Portfolio Shares of Class A (unlimited authorization -- no par value) based on 773,413 outstanding shares of beneficial interest 8,277 Portfolio Shares of Class B (unlimited authorization -- no par value) based on 40,701 outstanding shares of beneficial interest 504 Undistributed net investment income 1 Accumulated net realized gain on investments 744 Net unrealized appreciation on investments 6,770 -------- Total Net Assets -- 100.0% $ 33,762 ======== Net Asset Value, Offering and Redemption Price Per Share -- Class I $ 12.56 ======== Net Asset Value and Redemption Price Per Share -- Class A $ 12.58 ======== Maximum Offering Price Per Share -- Class A ($12.58 / 94.5%) $ 13.31 ======== Net Asset Value and Offering Price Per Share-- Class B (1) $ 12.54 ======== * NON-INCOME PRODUCING SECURITY (1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. ADR--AMERICAN DEPOSITORY RECEIPT INTERNATIONAL GROWTH FUND - -------------------------------------------------------------------------------- FOREIGN COMMON STOCKS--91.9% ARGENTINA--0.9% Banco de Galacia 10,500 70 Quilmes Industrial (ADR) 6,600 77 -------- 147 -------- AUSTRALIA--3.8% Amcor 9,100 60 Boral 47,380 149 Broken Hill Proprietary 11,208 165 Crown Limited 32,748 53 Goodman Fielder 80,837 119 Pioneer International 30,000 116 -------- 662 -------- - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- AUSTRIA--0.7% OMV 1,000 $ 128 -------- BELGIUM--0.6% Credit Communal de Belgique 871 94 -------- BRAZIL--1.2% Aracruz Cellulose (ADR) 1,800 37 Electrobras (ADR) 2,150 60 Electrobras 40,000 23 Telecomunicacoes Brasileiras 670,000 91 -------- 211 -------- CANADA--2.3% Alcan Aluminum Ltd. 1,800 61 Canada Pacific (ADR) 7,500 213 Canadian Imperial Bank 2,600 65 Canwest Global Communication (ADR) 4,300 64 -------- 403 -------- CHILE--1.0% Embotelladora Andina Series A (ADR) 1,200 26 Embotelladora Andina Series B (ADR) 2,400 50 Enersis (ADR) 2,500 89 -------- 165 -------- DENMARK--2.1% Tele Denmark (ADR) 4,050 106 Unidanmark Series A 4,550 256 -------- 362 -------- FINLAND--2.2% Kesko Oy Akt 6,400 90 Metsa Serla Series B 10,500 86 Nokia Series A (ADR) 1,700 125 Rauma Oy 3,300 76 -------- 377 -------- FRANCE--8.8% Assurances Generales de France 5,330 170 Banque National Paris Series A 4,150 171 Cie de Saint Gobain 600 87 Credit Commerce France 2,510 106 Havas 1,765 127 Peugeot 970 94 Remy Cointreau 3,000 72 Rhone Poulenc 4,521 184 Societe Generale 1,490 166 Societe Nationale Elf Aquitaine 1,900 205 Total Series B 1,329 134 -------- 1,516 -------- 39 Statement of Net Assets INTERNATIONAL GROWTH FUND (CONTINUED) - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- GERMANY--3.9% Bayer 3,400 $ 131 Degussa 1,450 77 Karstadt 390 141 Lufthansa 5,600 108 Mannesmann 150 67 Metallgesellschaft 7,550 156 -------- 680 -------- HONG KONG--3.2% Hutchison Whampoa 23,000 199 Hysan Development 22,000 65 New World Development 4,000 24 Sung Hung Kai Properties 8,100 98 Swire Pacific Series A 15,000 135 Tingyi (Cayman Island) 140,000 35 -------- 556 -------- INDIA--0.3% Ranbaxy Laboratories (GDR) 1,000 24 State Bank of India (GDR) 1,300 34 -------- 58 -------- INDONESIA--1.1% Jaya Real Property 30,000 40 Kalbe Farma 62,000 83 PT Indosat (ADR) 2,100 63 -------- 186 -------- IRELAND--0.2% Allied Irish Bank 3,966 34 -------- ITALY--3.9% Arnaldo Mondadori 12,350 71 Fiat 56,000 201 Istituto Banc San Paolo Torino 3,900 28 Istituto Banc San Paolo Torino 144A 13,800 99 Stet Societa Finanziaria Telefonica 31,900 186 Telecom Italia 25,000 80 -------- 665 -------- JAPAN--21.4% Aisin Seiki 11,000 168 Asahi Organic Chemical 6,000 31 Dai Nippon Printing 3,000 68 Daibiru 2,000 24 Eisai 7,000 133 Exedy Corp 3,000 38 Fuji Machine Manufacturing 6,000 217 Fukuda Denshi 2,000 41 Hitachi 8,000 89 JGC 14,000 97 - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- Kyudenko 3,000 $ 25 Mabuchi Motor 3,000 174 Maruichi Steel Tube 6,000 100 Matsumotokiyoshi 2,000 85 Matsushita Electric 8,000 161 Mazda Motor 32,000 112 Meiwa Estate 1,000 22 Mitsubishi Heavy Industries 14,000 107 Murata Manufacturing 4,000 159 Namco 5,000 193 NGK Spark Plugs 15,000 164 Nikko Securities 15,000 92 Nippon Express 8,000 64 Nippon Television Network 400 161 Okumura 10,000 53 Royal 300 6 Sakura Bank 23,000 176 Sanwa Bank 5,000 74 Sawako 2,000 36 Shimachu 4,000 120 Sony Music Entertainment 4,000 188 Square Company Ltd. 2,000 99 Sumitomo Rubber Industries 20,000 135 Tokyo Steel 2,800 31 Toyo Ink 26,000 104 Yamato Kogyo 15,000 148 -------- 3,695 -------- KOREA--0.6% Cho Sun Breweries 3,020 86 Hanwha Chemical 2,101 17 Shinsegae Department Store 200 8 -------- 111 -------- MALAYSIA--1.2% Bumi Armada 330 1 Land & General 30,000 34 Renong Berhad 20,000 26 Resorts World 13,000 39 Sime Darby 26,000 87 Sungei Way Holdings 10,000 19 -------- 206 -------- MEXICO--2.4% Cemex CPO 19,000 81 Corporacion Geo SA Series B 12,400 71 Femsa Series B 11,000 66 Grupo Financiero Bancomer Series B 105,000 51 Grupo Televisa 2,800 42 Kimberly Clark Series A 15,000 60 Panamerican Beverage Series A (ADR) 1,300 43 -------- 414 -------- 40 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- NETHERLANDS--3.0% Akzo Nobel 980 $ 134 International Nederlanden 5,075 234 Polygram 3,000 157 -------- 525 -------- NEW ZEALAND--0.7% Brierley Investment 43,000 42 Carter Holt Harvey 31,000 80 -------- 122 -------- NORWAY--1.1% Nycomed ASA Series A 6,800 100 Saga Petroleum AS Series A 4,400 83 -------- 183 -------- PERU--0.3% Buenaventura (ADR) 2,200 43 -------- PHILIPPINES--0.5% Philippine Long Distance Telephone (ADR) 1,000 64 Phillipino Telephone 30,000 15 -------- 79 -------- SINGAPORE--2.5% Development Bank of Singapore 8,000 101 Far East Levingston Shipbuilding 20,000 68 Keppel 15,000 67 Keppel Series A 3,750 16 Straits Steamship Land 20,000 53 United Overseas Bank 12,000 123 -------- 428 -------- SPAIN--0.6% Empresa Nacional de Electricidad 700 59 Telefonica de Espana 1,600 46 -------- 105 -------- SWEDEN--2.0% Nordbanken 3,390 114 Pharmacia & Upjohn 5,500 186 Sparbanken Sverige Ab Series A 2,020 45 -------- 345 -------- SWITZERLAND--2.6% Ciba Speciality Chemicals 30 3 Nestle 78 103 Sulzer 275 235 Swissair Registered 100 112 -------- 453 -------- - -------------------------------------------------------------------------------- MARKET DESCRIPTION SHARES VALUE (000) - -------------------------------------------------------------------------------- THAILAND--0.3% Land & House 6,000 $ 13 Siam City Cement 2,000 8 Siam Commercial Bank 8,000 33 -------- 54 -------- UNITED KINGDOM--16.5% Amersham International 1,700 45 Associated British Foods 22,400 193 Bank of Scotland 20,000 128 Bass 6,300 77 BOC Group 7,800 136 Boots 12,800 150 British Petroleum 2,000 25 British Telecommunications 18,750 139 BTR 36,000 123 Burmah Castrol 9,100 154 Carlton Communications 17,000 144 Centrica 108,400 132 Cookson Group 40,769 144 De La Rue 16,206 100 Guinness 22,000 215 Jefferson Smurf 64,685 186 National Grid Group 13,400 49 Powergen 12,903 154 Rank Group 22,500 143 Reckitt & Coleman 10,573 158 Sainsbury 25,761 156 Sun Alliance Group 11,919 88 -------- 2,839 -------- Total Foreign Common Stocks (Cost $14,165) 15,846 -------- FOREIGN PREFERRED STOCKS--2.0% BRAZIL--1.2% Banco Itau SA 54,000 30 Cemig 620,000 31 Copel Series B 3,695,900 66 Petroleo Brasileiro 291,000 80 -------- 207 -------- GERMANY--0.8% Hornbach 1,600 133 -------- Total Foreign Preferred Stocks (Cost $268) 340 -------- 41 Statement of Net Assets INTERNATIONAL GROWTH FUND (CONTINUED) - -------------------------------------------------------------------------------- FACE MARKET DESCRIPTION AMOUNT (000) VALUE (000) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENT--7.3% Paine Webber 5.90% dated 6/30/97, matures 07/01/97, repurchase price $1,206,206 (collateralized by U.S. Treasury Note, par value $1,265,000, 6.625%, matures 04/30/02, market value $1,290,751) $1,260 $ 1,260 -------- Total Repurchase Agreement, (Cost $1,260) 1,260 -------- Total Investments--101.2% (Cost $15,693) 17,446 -------- OTHER ASSETS AND LIABILITIES--(1.2%) Other Assets and Liabilities, Net (199) -------- NET ASSETS: Portfolio Shares of Class I (unlimited authorization -- no par value) based on 1,328,181 outstanding shares of beneficial interest 13,995 Portfolio Shares of Class A (unlimited authorization -- no par value) based on 61,379 outstanding shares of beneficial interest 624 Portfolio Shares of Class B (unlimited authorization -- no par value) based on 2,657 outstanding shares of beneficial interest 32 Undistributed net investment income 146 Accumulated net realized gain on investments 698 Net unrealized depreciation on foreign currency contracts and translation of other assets and liabilities denominated in foreign currency (1) Net unrealized appreciation on investments 1,753 -------- Total Net Assets--100.0% $ 17,247 ======== - -------------------------------------------------------------------------------- MARKET DESCRIPTION VALUE (000) - -------------------------------------------------------------------------------- Net Asset Value, Offering and Redemption Price Per Share -- Class I $ 12.39 ======== Net Asset Value and Redemption Price Per Share -- Class A $ 12.36 ======== Maximum Public Offering Price Per Share -- Class A ($12.36 / 94.5%) $ 13.08 ======== Net Asset Value and Offering Price Per Share -- Class B (1) $ 12.37 ======== (1) CLASS B HAS A CONTINGENT DEFERRED SALES CHARGE. ADR--AMERICAN DEPOSITORY RECEIPT GDR--GLOBAL DEPOSITORY RECEIPT The accompanying notes are an integral part of the financial statements. 42 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) Statement of Operations (000) FOR THE PERIOD ENDED JUNE 30, 1997 (UNAUDITED)
U.S. TREASURY PRIME U.S. TREASURY SECURITIES OBLIGATION TAX-EXEMPT SECURITIES MONEY MONEY MONEY PLUS MONEY MARKET MARKET MARKET MARKET FUND FUND FUND FUND ----------------------------------------------------------------------------------------- INTEREST INCOME: $12,169 $11,867 $1,338 $1,980 ----------------------------------------------------------------------------------------- EXPENSES: Investment advisory fee 840 761 129 56 Less: Investment advisory fee waived (52) (28) (10) (39) Administration fee 480 435 73 131 Custody fee 60 54 9 9 Transfer agency fee 47 54 12 16 Professional fees 49 47 7 11 Registration fees 70 37 10 1 Distribution fees (1) 5 16 5 11 Printing expense 49 45 7 8 Amortization of deferred organizational costs 1 1 1 1 Insurance and other expenses 16 7 1 1 ----------------------------------------------------------------------------------------- Total expenses, net of waivers 1,565 1,429 244 206 ----------------------------------------------------------------------------------------- NET INVESTMENT INCOME 10,604 10,438 1,094 1,774 Net realized gain on investments 78 -- -- -- ----------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,682 $10,438 $1,094 $1,774 ========================================================================================= (1) ALL DISTRIBUTION FEES ARE INCURRED AT THE CLASS A LEVEL EXCEPT FOR THE U.S. TREASURY SECURITIES PLUS MONEY MARKET FUND. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. The accompanying notes are an integral part of the financial statements.
43 Statement of Operations (000) FOR THE PERIOD ENDED JUNE 30, 1997 (UNAUDITED)
INTERMEDIATE- NEW JERSEY TERM PENNSYLVANIA SHORT-TERM FIXED MUNICIPAL GOVERNMENT MUNICIPAL INVESTMENT INCOME SECURITIES SECURITIES SECURITIES FUND FUND FUND FUND FUND ----------------------------------------------------------------------------------------- INVESTMENT INCOME: Dividend income -- -- -- -- -- Interest income $855 $7,780 $3,497 $1,168 $ 915 Less: Foreign taxes withheld -- -- -- -- -- ----------------------------------------------------------------------------------------- Total income 855 7,780 3,497 1,168 915 ----------------------------------------------------------------------------------------- EXPENSES: Investment advisory fee 93 689 373 108 102 Less: Investment advisory fee waived (40) (133) (68) (30) (24) Administration fee 31 230 124 36 34 Less: Administration fee waived -- -- -- -- (7) Custody fee 4 29 16 5 4 Transfer agency fee 8 27 17 5 5 Professional fees 2 24 13 3 4 Registration fees 21 17 8 12 17 Distribution fees (1) 1 5 23 3 -- Printing expense 3 24 13 4 4 Amortization of deferred organizational costs 1 1 1 1 -- Insurance and other expenses 1 7 3 1 2 ----------------------------------------------------------------------------------------- Total expenses, net of waivers 125 920 523 148 141 ----------------------------------------------------------------------------------------- NET INVESTMENT INCOME: 730 6,860 2,974 1,020 774 Net realized gain (loss) on investments -- 158 18 (111) (13) Net realized loss on foreign currency transactions and foreign currency contracts -- _ -- -- -- Net change in unrealized depreciation on foreign currency and translation of other assets and liabilities denominated in foreign currency -- _ -- -- -- Net unrealized appreciation (deprecation) of investment securities (5) (35) 429 49 111 ----------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS: $725 $6,983 $3,421 $958 $872 ========================================================================================= (1) ALL DISTRIBUTION FEES ARE INCURRED AT THE CLASS A AND CLASS B LEVEL. (2) THE EQUITY GROWTH FUND COMMENCED OPERATIONS ON FEBRUARY 3, 1997. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. The accompanying notes are an integral part of the financial statements.
44 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) - ------------------------------------------------------------------------------------------------------------------------------------
EQUITY EQUITY EQUITY INTERNATIONAL GNMA GROWTH VALUE INCOME MID CAP BALANCED GROWTH FUND FUND (2) FUND FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------------ -- $ 641 $ 1,991 $ 1,475 $ 252 $ 162 $ 230 $268 184 395 268 84 436 15 -- -- -- -- -- -- (24) - ------------------------------------------------------------------------------------------------------------------------------------ 268 825 2,386 1,743 336 598 221 - ------------------------------------------------------------------------------------------------------------------------------------ 22 564 779 398 188 114 77 (13) (183) (263) (136) (73) (47) (16) 7 151 208 106 50 30 15 -- -- -- -- -- -- -- 1 19 26 13 6 4 13 6 15 25 15 9 7 11 1 18 25 12 4 2 3 5 -- 5 2 8 7 3 1 -- 14 18 7 12 -- 1 17 22 11 5 3 1 -- 1 1 1 1 1 1 -- 6 8 5 2 1 9 - ------------------------------------------------------------------------------------------------------------------------------------ 31 608 850 445 207 134 117 - ------------------------------------------------------------------------------------------------------------------------------------ 237 217 1,536 1,298 129 464 104 (29) 13,502 14,785 5,815 438 399 496 -- -- -- -- -- -- (6) -- -- -- -- -- -- (2) 46 733 15,635 8,173 2,401 2,684 973 - ------------------------------------------------------------------------------------------------------------------------------------ $254 $14,452 $31,956 $15,286 $2,968 $3,547 $1,565 ====================================================================================================================================
45 Statements of Changes in Net Assets (000) FOR THE PERIOD ENDED JUNE 30, 1997 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31,1996
MONEY MARKET FUNDS U.S. TREASURY PRIME OBLIGATION SECURITIES MONEY MARKET MONEY MARKET FUND FUND -------------------------------------------------------------------------- 1997 1996 1997 1996 -------------------------------------------------------------------------- INVESTMENT ACTIVITIES: Net investment income $ 10,604 $ 18,990 $ 10,438 $ 17,654 Net realized gain (loss) on securities sold 78 40 -- (32) -------------------------------------------------------------------------- Net increase in net assets resulting from operations 10,682 19,030 10,438 17,622 -------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Class I (10,506) (18,841) (10,135) (17,270) Class A (81) (149) (300) (384) Realized capital gains: Class I -- -- -- -- Class A -- -- -- -- -------------------------------------------------------------------------- Total distributions (10,587) (18,990) (10,435) (17,654) -------------------------------------------------------------------------- SHARE TRANSACTIONS (ALL AT $1.00 PER SHARE): Class I: Shares issued 599,216 1,120,245 360,824 802,073 Shares issued in lieu of cash distributions 124 90 1,519 973 Shares redeemed (560,782) (1,079,179) (379,250) (661,258) -------------------------------------------------------------------------- Net Class I share transactions 38,558 41,156 (16,907) 141,788 -------------------------------------------------------------------------- Class A: Shares issued 2,196 4,115 17,971 20,093 Shares issued in lieu of cash distributions 67 137 239 363 Shares redeemed (2,473) (4,279) (15,036) (16,034) -------------------------------------------------------------------------- Net Class A share transactions (210) (27) 3,174 4,422 -------------------------------------------------------------------------- Increase/(decrease) in net assets from share transactions 38,348 41,129 (13,733) 146,210 -------------------------------------------------------------------------- Total increase/(decrease) in net assets 38,443 41,169 (13,730) 146,178 -------------------------------------------------------------------------- NET ASSETS: Beginning of period 508,232 467,063 412,770 266,592 -------------------------------------------------------------------------- NET ASSETS: End of period $ 546,675 $ 508,232 $ 399,040 $ 412,770 ========================================================================== AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. The accompanying notes are an integral part of the financial statements.
46 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) TAX-EXEMPT U.S. TREASURY MONEY MARKET SECURITIES PLUS FUND MONEY MARKET FUND - -------------------------------------------------------------------------------- 1997 1996 1997 1996 - -------------------------------------------------------------------------------- $ 1,094 $ 2,108 $ 1,774 $ 3,188 -- (1) -- -- - -------------------------------------------------------------------------------- 1,094 2,107 1,774 3,188 - -------------------------------------------------------------------------------- (1,039) (2,003) (1,774) (3,188) (55) (105) -- -- -- -- -- -- -- -- -- -- - -------------------------------------------------------------------------------- (1,094) (2,108) (1,774) (3,188) - -------------------------------------------------------------------------------- 58,866 136,217 259,735 527,102 211 101 1,279 3,035 (58,732) (132,864) (254,912) (529,661) - -------------------------------------------------------------------------------- 345 3,454 6,102 476 - -------------------------------------------------------------------------------- 2,430 6,240 -- -- 44 114 -- -- (1,977) (7,739) -- -- - -------------------------------------------------------------------------------- 497 (1,385) -- -- - -------------------------------------------------------------------------------- 842 2,069 6,102 476 - -------------------------------------------------------------------------------- 842 2,068 6,102 476 - -------------------------------------------------------------------------------- 70,934 68,866 65,173 64,697 - -------------------------------------------------------------------------------- $ 71,776 $ 70,934 $ 71,275 $ 65,173 ================================================================================ 47 Statements of Changes in Net Assets (000) FOR THE PERIOD ENDED JUNE 30, 1997 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31,1996 FIXED INCOME FUNDS
-------------------------------------------------------------------------- SHORT-TERM FIXED INVESTMENT INCOME FUND FUND --------------------------------------------------------------------------- 1997 1996 1997 1996 --------------------------------------------------------------------------- INVESTMENT ACTIVITIES: Net investment income $ 730 $ 1,639 $ 6,860 $ 6,339 Net realized gain (loss) on securities sold -- (29) 158 (8) Net unrealized appreciation (depreciation) of investment securities (5) (36) (35) (3,461) --------------------------------------------------------------------------- Net increase in net assets resulting from operations 725 1,574 6,983 2,870 --------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Class I (711) (1,571) (6,742) (6,017) Class A (23) (69) (121) (322) Class B -- -- -- -- Realized capital gains: Class I -- -- -- (11) Class A -- -- -- -- Class B -- -- -- -- --------------------------------------------------------------------------- Total distributions (734) (1,640) (6,863) (6,350) --------------------------------------------------------------------------- SHARE TRANSACTIONS: Class I: Proceeds from shares issued 3,949 16,470 13,998 12,563 Shares issued in connection with acquisition of common trust fund assets -- -- 173,842 -- Reinvestment of cash distributions 581 1,504 2,890 6,010 Cost of shares redeemed (7,116) (16,926) (35,676) (28,653) --------------------------------------------------------------------------- Net Class I share transactions (2,586) 1,048 155,054 (10,080) --------------------------------------------------------------------------- Class A: Proceeds from shares issued 34 492 146 2,412 Reinvestment of cash distributions 20 62 83 274 Cost of shares redeemed (187) (1,515) (1,008) (3,520) --------------------------------------------------------------------------- Net Class A share transactions (133) (961) (779) (834) --------------------------------------------------------------------------- Class B: Proceeds from shares issued -- -- 20 -- Reinvestment of cash distributions -- -- -- -- Cost of shares redeemed -- -- -- -- --------------------------------------------------------------------------- Net Class B share transactions -- -- 20 -- --------------------------------------------------------------------------- Increase (decrease) in net assets from share transactions (2,719) 87 154,295 (10,914) --------------------------------------------------------------------------- Total increase (decrease) in net assets (2,728) 21 154,415 (14,394) --------------------------------------------------------------------------- NET ASSETS: Beginning of period 32,706 32,685 104,959 119,353 --------------------------------------------------------------------------- NET ASSETS: End of period $29,978 $32,706 $259,374 $104,959 =========================================================================== SHARES ISSUED AND REDEEMED: Class I shares: Issued 395 1,647 1,372 1,208 Shares issued in connection with acquisition of common trust fund assets -- -- 17,057 -- Issued in lieu of cash distributions 58 150 286 609 Redeemed (712) (1,693) (3,425) (2,829) --------------------------------------------------------------------------- Net Class I share transactions (259) 104 15,290 (1,012) --------------------------------------------------------------------------- Class A shares: Issued 4 49 14 236 Issued in lieu of cash distributions 2 6 8 27 Redeemed (19) (151) (99) (347) --------------------------------------------------------------------------- Net Class A share transactions (13) (96) (77) (84) --------------------------------------------------------------------------- Class B shares: Issued -- -- 2 -- Issued in lieu of cash distributions -- -- -- -- Redeemed -- -- -- -- --------------------------------------------------------------------------- Net Class B share transactions -- -- 2 -- --------------------------------------------------------------------------- Net increase (decrease) in shares (272) 8 15,215 (1,096) =========================================================================== AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. The accompanying notes are an integral part of the financial statements.
48 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY INTERMEDIATE- PENNSYLVANIA MUNICIPAL TERM GOVERNMENT MUNICIPAL GNMA SECURITIES FUND SECURITIES FUND SECURITIES FUND FUND - ------------------------------------------------------------------------------------------------------------------------------------ 1997 1996 1997 1996 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------------------------------------------------ $ 2,974 $ 1,915 $ 1,020 $ 1,614 $ 774 $ 174 $ 237 $ 548 18 (71) (111) (172) (13) (3) (29) 13 429 (483) 49 (533) 111 (17) 46 (317) - ------------------------------------------------------------------------------------------------------------------------------------ 3,421 1,361 958 909 872 154 254 244 - ------------------------------------------------------------------------------------------------------------------------------------ (2,589) (1,007) (963) (1,453) (766) (161) (197) (453) (379) (907) (59) (161) (7) (13) (40) (95) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ (2,968) (1,914) (1,022) (1,614) (773) (174) (237) (548) - ------------------------------------------------------------------------------------------------------------------------------------ 14,846 4,639 1,768 7,641 2,580 789 829 2,410 108,448 -- 13,328 -- 37,351 -- -- -- 322 879 410 1,116 6 9 120 337 (15,880) (12,628) (7,507) (12,330) (2,966) (458) (1,413) (4,683) - ------------------------------------------------------------------------------------------------------------------------------------ 107,736 (7,110) 7,999 (3,573) 36,971 340 (464) (1,936) - ------------------------------------------------------------------------------------------------------------------------------------ 615 3,066 1 726 66 76 9 187 283 741 42 135 5 10 23 64 (3,455) (9,242) (686) (1,868) (73) (11) (321) (526) - ------------------------------------------------------------------------------------------------------------------------------------ (2,557) (5,435) (643) (1,007) (2) 75 (289) (275) - ------------------------------------------------------------------------------------------------------------------------------------ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ -- -- -- -- -- -- -- -- 105,179 (12,545) 7,356 (4,580) 36,969 415 (753) (2,211) - ------------------------------------------------------------------------------------------------------------------------------------ 105,632 (13,098) 7,292 (5,285) 37,068 395 (736) (2,515) - ------------------------------------------------------------------------------------------------------------------------------------ 40,936 54,034 27,257 32,542 4,009 3,614 7,996 10,511 - ------------------------------------------------------------------------------------------------------------------------------------ $146,568 $40,936 $34,549 $27,257 $41,077 $4,009 $7,260 $7,996 ==================================================================================================================================== 1,184 434 175 750 250 78 87 252 10,131 -- 1,311 -- 3,676 -- -- -- 30 83 40 110 1 1 13 35 (1,285) (1,187) (741) (1,215) (290) (46) (148) (485) - ------------------------------------------------------------------------------------------------------------------------------------ 10,060 (670) 785 (355) 3,637 33 (48) (198) - ------------------------------------------------------------------------------------------------------------------------------------ 58 287 -- 71 7 8 1 19 26 70 4 14 -- 1 2 7 (323) (871) (67) (184) (7) (1) (33) (55) - ------------------------------------------------------------------------------------------------------------------------------------ (239) (514) (63) (99) -- 8 (30) (29) - ------------------------------------------------------------------------------------------------------------------------------------ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ -- -- -- -- -- -- -- -- 9,821 (1,184) 722 (454) 3,637 41 (78) (227) ====================================================================================================================================
49 Statements of Changes in Net Assets (000) FOR THE PERIOD ENDED JUNE 30, 1997 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31,1996 EQUITY FUNDS
--------------------------------------------------------------------------- EQUITY GROWTH EQUITY VALUE FUND (1) FUND --------------------------------------------------------------------------- 1997 1997 1996 --------------------------------------------------------------------------- INVESTMENT ACTIVITIES: Net investment income $ 217 $ 1,536 $ 1,763 Net realized gain on securities sold 13,502 14,785 17,503 Net realized loss on foreign currency transactions -- -- -- Net unrealized appreciation (depreciation)on foreign currency and translation of other assets and liabilities in foreign currency -- -- -- Net unrealized appreciation (depreciation) of investment securities 733 15,635 2,402 --------------------------------------------------------------------------- Net increase in net assets resulting from operations 14,452 31,956 21,668 --------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Class I (220) (1,474) (1,641) Class A -- (63) (122) Class B -- (2) -- Realized capital gains: Class I -- -- (15,212) Class A -- -- (1,302) Class B -- -- -- --------------------------------------------------------------------------- Total distributions (220) (1,539) (18,277) --------------------------------------------------------------------------- SHARE TRANSACTIONS: Class I: Proceeds from shares issued 3,911 18,439 33,908 Shares issued in connection with acquisition of common trust fund assets 221,033 84,527 -- Reinvestment of cash distributions 29 465 16,529 Cost of shares redeemed (49,803) (11,919) (19,461) --------------------------------------------------------------------------- Net Class I share transactions 175,170 91,512 30,976 --------------------------------------------------------------------------- Class A: Proceeds from shares issued 92 2,054 2,210 Reinvestment of cash distributions -- 34 1,421 Cost of shares redeemed -- (1,109) (1,604) --------------------------------------------------------------------------- Net Class A share transactions 92 979 2,027 --------------------------------------------------------------------------- Class B: Proceeds from shares issued 25 903 -- Reinvestment of cash distributions -- -- -- Cost of shares redeemed -- (26) -- --------------------------------------------------------------------------- Net Class B share transactions 25 877 -- --------------------------------------------------------------------------- Increase (decrease) in net assets from share transactions 175,287 93,368 33,003 --------------------------------------------------------------------------- Total increase (decrease) in net assets 189,519 123,785 36,394 --------------------------------------------------------------------------- NET ASSETS: Beginning of period -- 126,715 90,321 --------------------------------------------------------------------------- NET ASSETS: End of period $189,519 $250,500 $126,715 =========================================================================== SHARES ISSUED AND REDEEMED: Class I shares: Issued 398 1,283 2,485 Shares issued in connection with acquisition of common trust fund assets 22,103 6,015 -- Issued in lieu of cash distributions 3 34 1,226 Redeemed (5,027) (837) (1,418) --------------------------------------------------------------------------- Net Class I share transactions 17,477 6,495 2,293 --------------------------------------------------------------------------- Class A shares: Issued 9 142 160 Issued in lieu of cash distributions -- 3 109 Redeemed -- (78) (116) --------------------------------------------------------------------------- Net Class A share transactions 9 67 153 --------------------------------------------------------------------------- Class B shares: Issued 2 60 -- Issued in lieu of cash distributions -- -- -- Redeemed -- (2) -- --------------------------------------------------------------------------- Net Class B share transactions 2 58 -- --------------------------------------------------------------------------- Net increase (decrease) in shares 17,488 6,620 2,446 --------------------------------------------------------------------------- (1) THE EQUITY GROWTH FUND COMMENCED OPERATIONS ON FEBRUARY 3, 1997. AMOUNTS DESIGNATED AS "--" ARE EITHER $0 OR HAVE BEEN ROUNDED TO $0. The accompanying notes are an integral part of the financial statements.
50 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ EQUITY INCOME MID CAP BALANCED INTERNATIONAL GROWTH FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------------------------------------ 1997 1996 1997 1996 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,298 $ 1,553 $ 129 $ 320 $ 464 $ 1,311 $ 104 $ 113 5,815 10,647 438 4,218 399 4,293 496 1,013 -- -- -- -- -- -- (6) (9) -- -- -- -- -- -- (2) 1 8,173 32 2,401 1,825 2,684 (1,625) 973 307 - ------------------------------------------------------------------------------------------------------------------------------------ 15,286 12,232 2,968 6,363 3,547 3,979 1,565 1,425 - ------------------------------------------------------------------------------------------------------------------------------------ (1,155) (1,301) (123) (295) (331) (995) -- (100) (138) (252) (7) (25) (129) (316) -- (3) (6) -- -- -- (3) -- -- -- -- (7,946) -- (2,642) -- (2,650) -- (779) -- (1,706) -- (341) -- (1,256) -- (42) -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ (1,299) (11,205) (130) (3,303) (463) (5,217) -- (924) - ------------------------------------------------------------------------------------------------------------------------------------ 13,660 16,356 956 4,772 3,117 5,420 1,575 5,647 34,921 -- -- -- -- -- -- -- 301 8,601 50 2,816 149 3,290 -- 521 (5,697) (11,867) (2,748) (7,122) (1,128) (20,821) (1,435) (1,804) - ------------------------------------------------------------------------------------------------------------------------------------ 43,185 13,090 (1,742) 466 2,138 (12,111) 140 4,364 - ------------------------------------------------------------------------------------------------------------------------------------ 1,623 5,660 171 665 522 1,186 49 1,040 63 1,928 3 363 65 1,535 -- 45 (1,030) (5,040) (1,335) (1,180) (889) (1,631) (149) (951) - ------------------------------------------------------------------------------------------------------------------------------------ 656 2,548 (1,161) (152) (302) 1,090 (100) 134 - ------------------------------------------------------------------------------------------------------------------------------------ 1,139 -- -- -- 504 -- 35 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (3) -- - ------------------------------------------------------------------------------------------------------------------------------------ 1,139 -- -- -- 504 -- 32 -- - ------------------------------------------------------------------------------------------------------------------------------------ 44,980 15,638 (2,903) 314 2,340 (11,021) 72 4,498 - ------------------------------------------------------------------------------------------------------------------------------------ 58,967 16,665 (65) 3,374 5,424 (12,259) 1,637 4,999 - ------------------------------------------------------------------------------------------------------------------------------------ 70,479 53,814 51,402 48,028 28,338 40,597 15,610 10,611 - ------------------------------------------------------------------------------------------------------------------------------------ $129,446 $70,479 $51,337 $51,402 $33,762 $28,338 $17,247 $15,610 ==================================================================================================================================== 964 1,181 71 365 264 439 135 503 2,525 -- -- -- -- -- -- -- 22 640 4 214 13 281 -- 47 (412) (847) (204) (539) (94) (1,697) (127) (161) - ------------------------------------------------------------------------------------------------------------------------------------ 3,099 974 (129) 40 183 (977) 8 389 - ------------------------------------------------------------------------------------------------------------------------------------ 114 414 13 50 44 95 4 93 5 143 -- 28 6 132 -- 4 (72) (360) (99) (90) (74) (130) (13) (84) - ------------------------------------------------------------------------------------------------------------------------------------ 47 197 (86) (12) (24) 97 (9) 13 - ------------------------------------------------------------------------------------------------------------------------------------ 76 -- -- -- 41 -- 3 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ 76 -- -- -- 41 -- 3 -- - ------------------------------------------------------------------------------------------------------------------------------------ 3,222 1,171 (215) 28 200 (880) 2 402 - ------------------------------------------------------------------------------------------------------------------------------------
51 Financial Highlights FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED DECEMBER 31 AND FOR THE PERIOD ENDED JUNE 30, 1997 (UNAUDITED)
RATIO OF RATIO OF EXPENSES NET INCOME NET ASSET DISTRIBUTIONS RATIO OF RATIO OF TO AVERAGE TO AVERAGE VALUE NET FROM NET NET ASSET NET ASSETS EXPENSES NET INCOME NET ASSET NET ASSETS BEGINNING INVESTMENT INVESTMENT VALUE END TOTAL END OF TO AVERAGE TO AVERAGE (EXCLUDING (EXCLUDING OF PERIOD INCOME INCOME OF PERIOD RETURN PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS) - ------------------------------------------------------------------------------------------------------------------------------------ U.S. TREASURY SECURITIES MONEY MARKET FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $1.00 $0.02 $(0.02) $1.00 2.21%** $543,382 0.65%* 4.42%* 0.67%* 4.40%* 1996 1.00 0.04 (0.04) 1.00 4.53 504,729 0.65 4.44 0.65 4.44 1995 1.00 0.05 (0.05) 1.00 5.05 463,531 0.65 4.92 0.65 4.92 1994 1.00 0.03 (0.03) 1.00 3.44 465,125 0.62 3.39 0.62 3.39 1993 1.00 0.02 (0.02) 1.00 2.46 420,947 0.64 2.42 0.64 2.42 1992 (1) 1.00 0.02 (0.02) 1.00 2.81* 387,960 0.65 2.67 0.70 2.62 CLASS A 1997 $1.00 $0.02 $(0.02) $1.00 2.08%** $ 3,293 0.90%* 4.17%* 0.92%* 4.15%* 1996 1.00 0.04 (0.04) 1.00 4.27 3,503 0.90 4.19 0.90 4.19 1995 1.00 0.05 (0.05) 1.00 4.80 3,532 0.90 4.66 0.90 4.66 1994 1.00 0.03 (0.03) 1.00 3.17 633 0.87 3.07 0.87 3.07 1993 1.00 0.02 (0.02) 1.00 2.21 834 0.89 2.17 0.89 2.17 1992(1) 1.00 0.02 (0.02) 1.00 2.56* 436 0.90 2.27 0.95 2.22 - ------------------------------------------------------------------------------------------------------------------------------------ PRIME OBLIGATION MONEY MARKET FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $1.00 $0.02 $(0.02) $1.00 2.41%** $384,521 0.65%* 4.81%* 0.66%* 4.80%* 1996 1.00 0.05 (0.05) 1.00 4.83 401,423 0.65 4.73 0.67 4.71 1995 1.00 0.05 (0.05) 1.00 5.40 259,667 0.65 5.26 0.66 5.25 1994 1.00 0.04 (0.04) 1.00 3.67 157,378 0.62 3.68 0.62 3.68 1993 1.00 0.03 (0.03) 1.00 2.65 129,780 0.64 2.63 0.64 2.63 1992(1) 1.00 0.02 (0.02) 1.00 2.85* 124,811 0.65 2.63 0.77 2.51 CLASS A 1997 $1.00 $0.02 $(0.02) $1.00 2.28%** $ 14,519 0.90%* 4.57%* 0.91%* 4.56%* 1996 1.00 0.04 (0.04) 1.00 4.58 11,347 0.90 4.48 0.92 4.46 1995 1.00 0.05 (0.05) 1.00 5.14 6,925 0.90 5.01 0.91 5.00 1994 1.00 0.03 (0.03) 1.00 3.40 3,281 0.87 3.89 0.87 3.89 1993 1.00 0.02 (0.02) 1.00 2.40 377 0.89 2.38 0.89 2.38 1992(1) 1.00 0.02 (0.02) 1.00 2.60* 243 0.89 2.43 1.01 2.31 - ------------------------------------------------------------------------------------------------------------------------------------ TAX-EXEMPT MONEY MARKET FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $1.00 $0.01 $(0.01) $1.00 1.50%** $ 67,426 0.65%* 3.00%* 0.68%* 2.97%* 1996 1.00 0.03 (0.03) 1.00 2.94 67,082 0.65 2.90 0.68 2.87 1995 1.00 0.03 (0.03) 1.00 3.42 63,628 0.65 3.37 0.72 3.30 1994 1.00 0.02 (0.02) 1.00 2.27 37,745 0.65 2.27 0.68 2.24 1993 1.00 0.02 (0.02) 1.00 1.99 32,994 0.65 1.97 0.69 1.93 1992(2) 1.00 0.02 (0.02) 1.00 2.42* 22,963 0.65 2.39 0.79 2.25 CLASS A 1997 $1.00 $0.01 $(0.01) $1.00 1.37%** $ 4,350 0.90%* 2.76%* 0.92%* 2.74%* 1996 1.00 0.03 (0.03) 1.00 2.70 3,852 0.90 2.65 0.93 2.62 1995 1.00 0.03 (0.03) 1.00 3.17 5,238 0.90 3.14 0.96 3.08 1994 1.00 0.02 (0.02) 1.00 2.02 2,790 0.90 1.97 0.92 1.95 1993 1.00 0.02 (0.02) 1.00 1.74 3,866 0.90 1.72 0.94 1.68 1992(2) 1.00 0.02 (0.02) 1.00 2.17* 2,273 0.90 2.07 1.04 1.93 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. TREASURY SECURITIES PLUS MONEY MARKET FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $1.00 $0.02 $(0.02) $1.00 2.37%** $ 71,275 0.55%* 4.73%* 0.65%* 4.63%* 1996 1.00 0.05 (0.05) 1.00 4.82 65,173 0.55 4.72 0.65 4.62 1995 1.00 0.05 (0.05) 1.00 5.40 64,697 0.55 5.26 0.62 5.19 1994 1.00 0.04 (0.04) 1.00 3.60 46,301 0.55 3.42 0.63 3.34 1993(3) 1.00 0.02 (0.02) 1.00 2.66* 89,278 0.55 2.62 0.68 2.49 - ------------------------------------------------------------------------------------------------------------------------------------ *ANNUALIZED **RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. (1) COMMENCED OPERATIONS ON APRIL 1, 1992. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (2) COMMENCED OPERATIONS ON APRIL 6, 1992. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (3) COMMENCED OPERATIONS ON MAY 3, 1993. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. The accompanying notes are an integral part of the financial statements.
52 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED)
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS RATIO OF RATIO OF VALUE NET UNREALIZED FROM NET FROM NET ASSET NET ASSETS EXPENSES INCOME BEGINNING INVESTMENT GAINS OR LOSSES INVESTMENT CAPITAL VALUE END TOTAL END OF TO AVERAGE TO AVERAGE OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN(+) PERIOD (000) NET ASSETS NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENT FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $10.01 $0.23 $(0.01) $(0.23) .-- $10.00 2.28%** $ 29,036 0.80%* 4.72%* 1996 10.02 0.48 (0.01) (0.48) .-- 10.01 4.86 31,630 0.80 4.85 1995 9.97 0.55 0.05 (0.55) .-- 10.02 6.19 30,642 0.80 5.52 1994 10.01 0.35 (0.04) (0.35) .-- 9.97 3.21 29,187 0.80 3.51 1993 10.01 0.29 .-- (0.29) .-- 10.01 2.96 31,337 0.80 2.94 1992(1) 10.00 0.27 0.03 (0.27) $(0.02) 10.01 3.47* 30,998 0.80 3.50 CLASS A 1997 $10.02 $0.22 .-- $(0.22) .-- $10.02 2.25%** $ 943 1.05%* 4.47%* 1996 10.05 0.45 $(0.02) (0.46) .-- 10.02 4.39 1,076 1.05 4.60 1995 9.98 0.53 0.07 (0.53) .-- 10.05 6.13 2,043 1.05 5.27 1994 10.03 0.33 (0.05) (0.33) .-- 9.98 2.85 769 1.05 3.50 1993 10.01 0.28 0.01 (0.27) .-- 10.03 2.90 205 1.05 2.09 1992(1) 10.00 0.25 0.03 (0.25) $(0.02) 10.01 3.23* 193 1.05 3.14 - ------------------------------------------------------------------------------------------------------------------------------------ FIXED INCOME FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $10.21 $0.30 $(0.04) $(0.30) .-- $10.17 2.55%** $255,331 0.80%* 5.96%* 1996 10.49 0.57 (0.28) (0.57) .-- 10.21 2.94 100,129 0.80 5.60 1995 9.44 0.59 1.05 (0.59) .-- 10.49 17.76 113,509 0.80 5.83 1994 10.68 0.59 (1.18) (0.59) $(0.06) 9.44 (5.66) 96,558 0.80 5.91 1993 10.38 0.61 0.52 (0.61) (0.22) 10.68 11.05 113,892 0.80 5.59 1992(1) 10.00 0.49 0.44 (0.49) (0.06) 10.38 11.60* 89,701 0.80 6.24 CLASS A 1997 $10.20 $0.28 $(0.06) $(0.28) .-- $10.14 2.22%** $ 4,023 1.05%* 5.62%* 1996 10.48 0.55 (0.28) (0.55) .-- 10.20 2.68 4,830 1.05 5.35 1995 9.44 0.56 1.04 (0.56) .-- 10.48 17.36 5,844 1.05 5.58 1994 10.68 0.56 (1.18) (0.56) $(0.06) 9.44 (5.90) 5,525 1.05 5.65 1993 10.38 0.58 0.52 (0.58) (0.22) 10.68 10.76 6,519 1.05 5.24 1992(1) 10.00 0.47 0.44 (0.47) (0.06) 10.38 11.39* 1,214 1.05 5.93 CLASS B 1997(2) $10.11 $0.18 $ 0.07 $(0.18) .-- $10.18 1.29%** $ 20 1.80%* 4.87%* - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY MUNICIPAL SECURITIES FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $10.71 $0.24 $0.04 $(0.24) .-- $10.75 2.72%** $128,852 0.80%* 4.82%* 1996 10.79 0.44 (0.08) (0.44) .-- 10.71 3.42 20,689 0.67 4.13 1995 9.93 0.47 0.86 (0.47) .-- 10.79 13.57 28,080 0.41 4.43 1994 10.85 0.48 (0.92) (0.48) .-- 9.93 (4.12) 19,977 0.27 4.65 1993 10.29 0.50 0.56 (0.50) .-- 10.85 10.48 27,064 0.20 4.57 1992(3) 10.00 0.30 0.29 (0.30) .-- 10.29 9.01* 9,395 0.46 4.56 CLASS A 1997 $10.70 $0.25 .-- $(0.23) .-- $10.72 2.40%** $ 17,716 1.05%* 4.41%* 1996 10.79 0.41 $(0.09) (0.41) .-- 10.70 3.08 20,247 0.92 3.88 1995 9.93 0.44 0.86 (0.44) .-- 10.79 13.30 25,954 0.66 4.18 1994 10.85 0.45 (0.92) (0.45) .-- 9.93 (4.35) 21,195 0.52 4.40 1993 10.29 0.46 0.56 (0.46) .-- 10.85 10.09 22,061 0.45 4.34 1992(3) 10.00 0.29 0.29 (0.29) .-- 10.29 8.29* 5,424 0.62 4.44 - ------------------------------------------------------------------------------------------------------------------------------------ RATIO OF RATIO OF EXPENSES NET INCOME TO AVERAGE TO AVERAGE NET ASSETS NET ASSETS PORTFOLIO (EXCLUDING (EXCLUDING TURNOVER WAIVERS) WAIVERS) RATE - -------------------------------------------------------------------------------- SHORT-TERM INVESTMENT FUND - -------------------------------------------------------------------------------- CLASS I 1997 1.06%* 4.46%* 0.00% 1996 0.96 4.69 33.83 1995 0.97 5.35 64.85 1994 0.94 3.37 68.39 1993 0.95 2.79 81.92 1992(1) 1.01 3.29 68.15 CLASS A 1997 1.31%* 4.22%* 0.00% 1996 1.21 4.44 33.83 1995 1.22 5.10 64.85 1994 1.20 3.35 68.39 1993 1.13 2.01 81.92 1992(1) 1.26 2.93 68.15 - -------------------------------------------------------------------------------- FIXED INCOME FUND - -------------------------------------------------------------------------------- CLASS I 1997 0.91%* 5.85%* 26.14% 1996 0.92 5.48 40.56 1995 0.91 5.72 35.49 1994 0.90 5.81 15.24 1993 0.91 5.48 49.49 1992(1) 0.94 6.10 23.86 CLASS A 1997 1.16%* 5.51%* 26.14% 1996 1.17 5.23 40.56 1995 1.16 5.47 35.49 1994 1.15 5.55 15.24 1993 1.13 5.16 49.49 1992(1) 1.20 5.78 23.86 CLASS B 1997(2) 1.87%* 4.80%* 26.14% - -------------------------------------------------------------------------------- NEW JERSEY MUNICIPAL SECURITIES FUND - -------------------------------------------------------------------------------- CLASS I 1997 0.91%* 4.71%* 14.01% 1996 0.93 3.87 13.93 1995 0.93 3.91 2.83 1994 0.93 3.99 16.81 1993 1.00 3.77 23.83 1992(3) 1.22 3.80 2.23 CLASS A 1997 1.17%* 4.29%* 14.01% 1996 1.18 3.62 13.93 1995 1.18 3.66 2.83 1994 1.18 3.74 16.81 1993 1.23 3.54 23.83 1992(3) 1.39 3.67 2.23 - -------------------------------------------------------------------------------- * ANNUALIZED ** RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. (+) TOTAL RETURN DOES NOT REFLECT SALES LOADS ON CLASS A AND CLASS B SHARES. (1) COMMENCED OPERATIONS ON APRIL 1, 1992. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (2) COMMENCED OPERATIONS ON MAY 16, 1997. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (3) COMMENCED OPERATIONS ON MAY 4, 1992. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. The accompanying notes are an integral part of the financial statements.
53 Financial Highlights FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED DECEMBER 31 AND FOR THE PERIOD ENDED JUNE 30, 1997 (UNAUDITED)
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS RATIO OF RATIO OF VALUE NET UNREALIZED FROM NET FROM NET ASSET NET ASSETS EXPENSES INCOME BEGINNING INVESTMENT GAINS OR LOSSES INVESTMENT CAPITAL VALUE END TOTAL END OF TO AVERAGE TO AVERAGE OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN(+) PERIOD (000) NET ASSETS NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ INTERMEDIATE-TERM GOVERNMENT SECURITIES FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $10.16 $0.28 $(0.01) $(0.28) .-- $10.15 2.74%** $ 32,619 0.80%* 5.68%* 1996 10.37 0.53 (0.21) (0.53) .-- 10.16 3.26 24,679 0.80 5.26 1995 9.51 0.54 0.86 (0.54) .-- 10.37 15.00 28,877 0.80 5.33 1994 10.53 0.51 (1.01) (0.51) $(0.01) 9.51 (4.85) 26,277 0.80 5.13 1993 10.23 0.52 0.32 (0.52) (0.02) 10.53 8.32 34,075 0.80 4.87 1992(1) 10.00 0.41 0.24 (0.41) (0.01) 10.23 7.95* 16,327 0.80 5.30 CLASS A 1997 $10.16 $0.27 $(0.02) $(0.27) .-- $10.14 2.51%** $ 1,930 1.05%* 5.39%* 1996 10.37 0.52 (0.22) (0.51) .-- 10.16 3.01 2,578 1.05 5.01 1995 9.51 0.51 0.86 (0.51) .-- 10.37 14.71 3,665 1.05 5.08 1994 10.53 0.49 (1.01) (0.49) $(0.01) 9.51 (5.09) 2,372 1.05 4.83 1993 10.24 0.49 0.31 (0.49) (0.02) 10.53 7.94 4,903 1.05 4.59 1992(1) 10.00 0.39 0.25 (0.39) (0.01) 10.24 7.86* 2,190 1.05 5.00 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA MUNICIPAL SECURITIES FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $10.17 $0.22 $0.02 $(0.22) .-- $10.19 2.43%** $ 40,735 0.80%* 4.53%* 1996 10.23 0.44 (0.06) (0.44) .-- 10.17 3.89 3,665 0.69 4.42 1995 9.55 0.40 0.68 (0.40) .-- 10.23 11.53 3,345 0.80 4.05 1994 10.17 0.36 (0.62) (0.36) .-- 9.55 (2.58) 2,734 0.80 3.67 1993(2) 10.00 0.23 0.17 (0.23) .-- 10.17 6.01 2,922 0.80 3.35 CLASS A 1997 $10.17 $0.21 $(0.01) $(0.21) .-- $10.16 2.02%** $ 342 1.05%* 4.20%* 1996 10.22 0.42 (0.05) (0.42) .-- 10.17 3.74 344 0.94 4.19 1995 9.55 0.38 0.67 (0.38) .-- 10.22 11.15 269 1.05 3.80 1994 10.17 0.33 (0.62) (0.33) .-- 9.55 (2.83) 336 1.05 3.42 1993(3) 9.98 0.20 0.19 (0.20) .-- 10.17 6.28* 289 1.05 3.24 - ------------------------------------------------------------------------------------------------------------------------------------ GNMA FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $9.63 $0.31 $0.03 $(0.31) .-- $9.66 3.60%** $ 6,122 0.80%* 6.51%* 1996 9.94 0.60 (0.31) (0.60) .-- 9.63 3.09 6,570 0.80 6.23 1995 8.85 0.60 1.09 (0.60) .-- 9.94 19.52 8,750 0.80 6.29 1994 9.85 0.54 (1.00) (0.53) $(0.01) 8.85 (4.71) 6,983 0.80 5.72 1993(2) 10.00 0.34 (0.15) (0.34) .-- 9.85 2.80* 10,900 0.80 4.48 CLASS A 1997 $9.61 $0.31 $0.02 $(0.30) .-- $9.64 3.48%** $ 1,138 1.05%* 6.28%* 1996 9.93 0.57 (0.32) (0.57) .-- 9.61 2.73 1,426 1.05 5.98 1995 8.84 0.58 1.08 (0.57) .-- 9.93 19.24 1,761 1.05 6.05 1994 9.85 0.50 (1.00) (0.50) $(0.01) 8.84 (5.05) 1,853 1.05 5.47 1993(4) 10.01 0.31 (0.16) (0.31) .-- 9.85 2.31* 2,633 1.05 4.70 - ------------------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF EXPENSES NET INCOME TO AVERAGE TO AVERAGE NET ASSETS NET ASSETS PORTFOLIO (EXCLUDING (EXCLUDING TURNOVER WAIVERS) WAIVERS) RATE - -------------------------------------------------------------------------------- INTERMEDIATE-TERM GOVERNMENT SECURITIES FUND - -------------------------------------------------------------------------------- CLASS I 1997 0.97%8 5.51%* 36.71%* 1996 0.87 5.19 40.60 1995 1.05 5.08 68.29 1994 0.95 4.98 40.27 1993 1.00 4.67 31.69 1992(1) 1.11 4.99 12.38 CLASS A 1997 1.22%* 5.22%* 36.71%* 1996 1.12 4.94 40.60 1995 1.30 4.83 68.29 1994 1.20 4.68 40.27 1993 1.23 4.41 31.69 1992(1) 1.36 4.69 12.38 - -------------------------------------------------------------------------------- PENNSYLVANIA MUNICIPAL FUND - -------------------------------------------------------------------------------- CLASS I 1997 0.98%* 4.35%* 39.79%* 1996 1.49 3.62 25.88 1995 1.27 3.58 36.92 1994 1.61 2.86 38.20 1993(2) 1.48 2.67 16.51 CLASS A 1997 1.33%* 3.93%* 39.79%* 1996 1.74 3.39 25.88 1995 1.55 3.30 36.92 1994 1.92 2.55 38.20 1993(3) 1.48 2.81 16.51 - -------------------------------------------------------------------------------- GNMA FUND - -------------------------------------------------------------------------------- CLASS I 1997 1.16%* 6.15%* 0.00% 1996 1.16 5.87 5.77 1995 1.13 5.96 9.69 1994 0.97 5.55 102.77 1993(2) 1.08 4.20 252.73 CLASS A 1997 1.40%* 5.93%* 0.00% 1996 1.41 5.62 5.77 1995 1.37 5.73 9.69 1994 1.22 5.30 102.77 1993(4) 1.29 4.46 252.73 - -------------------------------------------------------------------------------- * ANNUALIZED ** RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. (+) TOTAL RETURN DOES NOT REFLECT SALES LOADS ON CLASS A AND CLASS B SHARES. (1) COMMENCED OPERATIONS ON APRIL 1, 1992. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (2) COMMENCED OPERATIONS ON MAY 3, 1993. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (3) COMMENCED OPERATIONS ON MAY 13, 1993. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (4) COMMENCED OPERATIONS ON MAY 5, 1993. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. The accompanying notes are an integral part of the financial statements. 54 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED)
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS RATIO OF RATIO OF VALUE NET UNREALIZED FROM NET FROM NET ASSET NET ASSETS EXPENSES INCOME BEGINNING INVESTMENT GAINS OR LOSSES INVESTMENT CAPITAL VALUE END TOTAL END OF TO AVERAGE TO AVERAGE OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN(+) PERIOD (000) NET ASSETS NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ EQUITY GROWTH FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997(1) $10.00 $0.01 $0.84 $(0.01) -- $10.84 8.53%** $189,397 0.80%* 0.29%* CLASS A 1997(1) $10.00 -- $0.86 -- -- $10.86 8.61% $ 96 1.05%* 0.02% CLASS B 1997(2) $10.41 $(0.01) $0.43 -- -- $10.83 4.34% $ 26 1.80%* (0.78)% - ------------------------------------------------------------------------------------------------------------------------------------ EQUITY VALUE FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $13.35 $0.10 $2.20 $(0.10) -- $15.55 17.27%** $236,917 0.80%* 1.49%* 1996 12.81 0.22 2.54 (0.22) $(2.00) 13.35 21.69 116,715 0.80 1.67 1995 10.19 0.25 3.46 (0.25) (0.84) 12.81 36.71 82,677 0.80 2.08 1994 11.10 0.21 (0.83) (0.21) (0.08) 10.19 (5.61) 61,407 0.80 1.92 1993 10.64 0.18 0.46 (0.18) -- 11.10 6.12 67,383 0.80 1.74 1992(3) 10.00 0.14 0.64 (0.14) -- 10.64 10.51* 62,116 0.80 1.82 CLASS A 1997 $13.35 $0.08 $2.20 $(0.08) -- $15.55 17.13%** $ 12,684 1.05%* 1.19%* 1996 12.83 0.19 2.51 (0.18) $(2.00) 13.35 21.15 10,000 1.05 1.42 1995 10.21 0.21 3.47 (0.22) (0.84) 12.83 36.35 7,644 1.05 1.83 1994 11.12 0.18 (0.83) (0.18) (0.08) 10.21 (5.83) 3,031 1.05 1.67 1993 10.66 0.16 0.46 (0.16) -- 11.12 5.85 2,741 1.05 1.51 1992(3) 10.00 0.09 0.67 (0.10) -- 10.66 10.35* 1,562 1.05 1.64 CLASS B 1997(4) $14.81 .-- $0.76 $(0.03) -- $15.54 5.15%** $ 899 1.80%* 0.15%* - ------------------------------------------------------------------------------------------------------------------------------------ EQUITY INCOME FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $13.32 $0.16 $1.89 $(0.16) -- $15.21 15.47%** $113,372 0.80%* 2.48%* 1996 13.07 0.33 2.35 (0.34) $(2.09) 13.32 21.01 58,035 0.80 2.55 1995 10.26 0.31 3.29 (0.31) (0.48) 13.07 35.55 44,202 0.80 2.61 1994 11.17 0.32 (0.81) (0.32) (0.10) 10.26 (4.42) 34,514 0.80 2.96 1993 10.72 0.29 0.80 (0.29) (0.35) 11.17 10.27 38,237 0.80 2.65 1992(3) 10.00 0.22 0.72 (0.22) -- 10.72 12.72* 32,538 0.80 2.88 CLASS A 1997 $13.35 $0.15 $1.88 $(0.14) -- $15.24 15.29%** $ 14,914 1.05%* 2.14%* 1996 13.08 0.31 2.34 (0.29) $(2.09) 13.35 20.70 12,444 1.05 2.30 1995 10.27 0.28 3.29 (0.28) (0.48) 13.08 35.21 9,612 1.05 2.36 1994 11.17 0.29 (0.80) (0.29) (0.10) 10.27 (4.56) 5,657 1.05 2.71 1993 10.73 0.28 0.78 (0.27) (0.35) 11.17 9.94 4,421 1.05 2.42 1992(3) 10.00 0.15 0.77 (0.19) -- 10.73 12.43* 585 1.05 2.54 CLASS B 1997(5) $14.34 $0.01 $0.92 $(0.07) -- $15.20 6.51%** $ 1,160 1.80%* 1.46%* - ------------------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF EXPENSES NET INCOME TO AVERAGE TO AVERAGE NET ASSETS NET ASSETS PORTFOLIO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION WAIVERS) WAIVERS) RATE RATE(++) - -------------------------------------------------------------------------------- EQUITY GROWTH FUND - -------------------------------------------------------------------------------- CLASS I 1997(1) 1.04% 0.05% 52.52% $.0636 CLASS A 1997(1) 1.12% (0.05)% 52.52% $.0636 CLASS B 1997(2) 2.07% (1.05)% 52.52% $.0636 - -------------------------------------------------------------------------------- EQUITY VALUE FUND - -------------------------------------------------------------------------------- CLASS I 1997 1.06% 1.23% 26.77% $.0835 1996 1.08 1.39 85.30 .0950 1995 1.07 1.81 61.88 n/a 1994 1.06 1.66 44.98 n/a 1993 1.07 1.47 89.91 n/a 1992(3) 1.10 1.52 45.68 n/a CLASS A 1997 1.30* 0.94%* 26.77% $.0835 1996 1.33 1.14 85.30 .0950 1995 1.32 1.56 61.88 n/a 1994 1.31 1.41 44.98 n/a 1993 1.30 1.26 89.91 n/a 1992(3) 1.36 1.33 45.68 n/a CLASS B 1997(4) 2.04%* (0.09)%* 26.77% $.0835 - -------------------------------------------------------------------------------- EQUITY INCOME FUND - -------------------------------------------------------------------------------- CLASS I 1997 1.06%* 2.22%* 22.36% $.0930 1996 1.09 2.26 85.47 .1095 1995 1.10 2.31 42.97 n/a 1994 1.08 2.68 37.76 n/a 1993 1.10 2.35 89.89 n/a 1992(3) 1.14 2.54 58.41 n/a CLASS A 1997 1.31%* 1.88%* 22.36% $.0930 1996 1.34 2.01 85.47 .1095 1995 1.35 2.06 42.97 n/a 1994 1.33 2.43 37.76 n/a 1993 1.35 2.12 89.89 n/a 1992(3) 1.40 2.19 58.41 n/a CLASS B 1997(5) 2.04%* 1.22%* 22.36% $.0930 - -------------------------------------------------------------------------------- * ANNUALIZED ** RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. (+) TOTAL RETURN DOES NOT REFLECT SALES LOADS ON CLASS A AND CLASS B SHARES. (++) AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES DURING THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR THE FISCAL YEARS BEGINNING AFTER SEPTEMBER 1, 1995. (1) COMMENCED OPERATIONS ON FEBRUARY 3, 1997. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (2) COMMENCED OPERATIONS ON MAY 21, 1997. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (3) COMMENCED OPERATIONS ON APRIL 1, 1992. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (4) COMMENCED OPERATIONS MAY 12, 1997. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (5) COMMENCED OPERATIONS MAY 8, 1997. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. The accompanying notes are an integral part of the financial statements. 55 Financial Highlights FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED DECEMBER 31 AND FOR THE PERIOD ENDED JUNE 30, 1997 (UNAUDITED)
NET ASSET REALIZED AND DISTRIBUTIONS DISTRIBUTIONS RATIO OF RATIO OF VALUE NET UNREALIZED FROM NET FROM NET ASSET NET ASSETS EXPENSES INCOME BEGINNING INVESTMENT GAINS OR LOSSES INVESTMENT CAPITAL VALUE END TOTAL END OF TO AVERAGE TO AVERAGE OF PERIOD INCOME ON SECURITIES INCOME GAINS OF PERIOD RETURN(+) PERIOD (000) NET ASSETS NET ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ MID CAP FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $13.33 $0.04 $0.77 $(0.04) -- $14.10 6.07%** $46,358 0.80%* 0.54%* 1996 12.55 0.09 1.59 (0.09) $(0.81) 13.33 13.56 45,556 0.80 0.66 1995 10.83 0.15 1.95 (0.15) (0.23) 12.55 19.49 42,375 0.80 1.28 1994 12.32 0.12 (1.27) (0.12) (0.22) 10.83 (9.34) 33,448 0.80 1.06 1993 10.99 0.11 1.33 (0.11) -- 12.32 13.22 35,648 0.80 1.03 1992(1) 10.00 0.07 0.99 (0.07) -- 10.99 14.30* 29,507 0.80 0.98 CLASS A 1997 $13.31 $0.02 $0.76 $(0.02) -- $14.07 5.86%** $4,979 1.05%* 0.29%* 1996 12.53 0.05 1.59 (0.05) $(0.81) 13.31 13.32 5,846 1.05 0.41 1995 10.82 0.12 1.94 (0.12) (0.23) 12.53 19.13 5,653 1.05 1.03 1994 12.31 0.10 (1.27) (0.10) (0.22) 10.82 (9.54) 4,567 1.05 0.85 1993 10.99 0.09 1.32 (0.09) -- 12.31 12.88 2,720 1.05 0.83 1992(1) 10.00 0.05 1.00 (0.06) -- 10.99 14.08* 637 1.05 0.88 - ------------------------------------------------------------------------------------------------------------------------------------ BALANCED FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $11.39 $0.18 $1.17 $(0.18) -- $12.56 11.95%** $23,525 0.80%* 3.11%* 1996 12.05 0.48 1.16 (0.47) $(1.83) 11.39 13.77 19,243 0.80 3.68 1995 9.91 0.44 2.27 (0.44) (0.13) 12.05 27.76 32,145 0.80 3.89 1994 10.78 0.37 (0.86) (0.38) -- 9.91 (4.61) 26,921 0.80 3.64 1993 10.35 0.38 0.43 (0.38) -- 10.78 7.89 25,712 0.80 3.75 1992(1) 10.00 0.29 0.34 (0.28) -- 10.35 8.53* 16,899 0.80 3.88 CLASS A 1997 $11.40 $0.17 $1.17 $(0.16) -- $12.58 11.88%** $ 9,727 1.05%* 2.86%* 1996 12.07 0.43 1.17 (0.44) $(1.83) 11.40 13.39 9,095 1.05 3.43 1995 9.92 0.42 2.28 (0.42) (0.13) 12.07 27.53 8,452 1.05 3.64 1994 10.79 0.35 (0.87) (0.35) -- 9.92 (4.87) 6,737 1.05 3.39 1993 10.36 0.37 0.42 (0.36) -- 10.79 7.62 8,122 1.05 3.47 1992(1) 10.00 0.20 0.40 (0.24) -- 10.36 8.15* 2,990 1.05 3.59 CLASS B 1997(2) $11.93 $0.01 $0.68 $(0.08) -- $12.54 5.78%** $ 510 1.80%* 1.75%* - ------------------------------------------------------------------------------------------------------------------------------------ INTERNATIONAL GROWTH FUND - ------------------------------------------------------------------------------------------------------------------------------------ CLASS I 1997 $11.23 $0.08 $1.08 -- -- $12.39 10.33%** $16,458 1.50%* 1.36%* 1996 10.74 0.08 1.11 $(0.08) $(0.62) 11.23 11.17 14,822 1.50 0.85 1995(3) 10.00 0.03 0.75 (0.02) (0.02) 10.74 7.81 9,990 1.50 0.79 CLASS A 1997 $11.22 $0.07 $1.07 -- -- $12.36 10.16%** $ 757 1.75%* 1.04%* 1996 10.73 0.09 1.06 $(0.04) $(0.62) 11.22 10.88 788 1.75 0.70 1995(4) 10.00 0.01 0.75 (0.01) (0.02) 10.73 7.64 621 1.75 0.45 CLASS B 1997(5) $11.45 $0.01 $0.91 -- -- $12.37 8.03%** $ 32 2.50%* 1.93%* - ------------------------------------------------------------------------------------------------------------------------------------
RATIO OF RATIO OF EXPENSES NET INCOME TO AVERAGE TO AVERAGE NET ASSETS NET ASSETS PORTFOLIO AVERAGE (EXCLUDING (EXCLUDING TURNOVER COMMISSION WAIVERS) WAIVERS) RATE RATE(++) - -------------------------------------------------------------------------------- MID CAP FUND - -------------------------------------------------------------------------------- CLASS I 1997 1.09%* 0.25%* 0.00% $.0869 1996 1.10 0.36 41.41 .1010 1995 1.10 0.98 32.96 n/a 1994 1.08 0.78 13.82 n/a 1993 1.10 0.73 24.49 n/a 1992(1) 1.15 0.63 9.29 n/a CLASS A 1997 1.34%* 0.00%* 0.00% $.0869 1996 1.35 0.11 41.41 .1010 1995 1.35 0.73 32.96 n/a 1994 1.33 0.57 13.82 n/a 1993 1.35 0.53 24.49 n/a 1992(1) 1.40 0.53 9.29 n/a - -------------------------------------------------------------------------------- BALANCED FUND - -------------------------------------------------------------------------------- CLASS I 1997 1.11%* 2.80%* 30.56% $.1166 1996 1.11 3.37 43.80 .1165 1995 1.11 3.58 41.63 n/a 1994 1.09 3.35 27.15 n/a 1993 1.14 3.41 63.03 n/a 1992(1) 1.20 3.48 82.76 n/a CLASS A 1997 1.36%* 2.55%* 30.56% $.1166 1996 1.36 3.12 43.80 .1165 1995 1.36 3.33 41.63 n/a 1994 1.34 3.10 27.15 n/a 1993 1.38 3.14 63.03 n/a 1992(1) 1.45 3.19 82.76 n/a CLASS B 1997(2) 2.00%* 1.55%* 30.56% $.1166 - -------------------------------------------------------------------------------- INTERNATIONAL GROWTH FUND - -------------------------------------------------------------------------------- CLASS I 1997 1.70%* 1.16%* 36.32% $.0050 1996 1.73 0.62 67.03 .0051 1995(3) 2.11 0.18 14.32 n/a CLASS A 1997 1.95%* 0.84%* 36.32% $.0050 1996 1.98 0.47 67.03 .0051 1995(4) 2.38 (0.18) 14.32 n/a CLASS B 1997(5) 2.81%* 1.62%* 36.32% $.0050 - -------------------------------------------------------------------------------- * ANNUALIZED ** RETURNS ARE FOR THE PERIOD INDICATED AND HAVE NOT BEEN ANNUALIZED. (+) TOTAL RETURN DOES NOT REFLECT SALES LOADS ON CLASS A AND CLASS B SHARES. (++) AVERAGE COMMISSION RATE PAID PER SHARE FOR SECURITY PURCHASES AND SALES DURING THE PERIOD. PRESENTATION OF THE RATE IS ONLY REQUIRED FOR THE FISCAL YEARS BEGINNING AFTER SEPTEMBER 1, 1995. (1) COMMENCED OPERATIONS ON APRIL 1, 1992. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (2) COMMENCED OPERATIONS ON MAY 8, 1997. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (3) COMMENCED OPERATIONS ON MAY 1, 1995. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (4) COMMENCED OPERATIONS ON MAY 4, 1995. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. (5) COMMENCED OPERATIONS ON MAY 7, 1997. RATIOS FOR THIS PERIOD HAVE BEEN ANNUALIZED. The accompanying notes are an integral part of the financial statements. 56 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) Notes to Financial Statements 1. ORGANIZATION The Pillar Funds (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company with sixteen funds: the U.S. Treasury Securities Money Market Fund, the Prime Obligation Money Market Fund, the Tax-Exempt Money Market Fund, the U.S. Treasury Securities Plus Money Market Fund, (the "Money Market Funds") the Short-Term Investment Fund, the Fixed Income Fund, the New Jersey Municipal Securities Fund, the Intermediate-Term Government Securities Fund, the Pennsylvania Municipal Securities Fund, the GNMA Fund, (the "Fixed Income Funds") the Equity Growth Fund, the Equity Value Fund, the Equity Income Fund, the Mid Cap Fund, the International Growth Fund (the "Equity Funds") and the Balanced Fund. Each of the Funds is "diversified" for purposes of the 1940 Act except for the New Jersey Municipal Securities Fund, the Pennsylvania Municipal Securities Fund and the International Growth Fund, each of which is a non-diversified Fund. Shares of the U.S. Treasury Securities Plus Money Market Fund are offered exclusively to customers of the Money Desk of the Bank Investment Division of Summit Bank. The minimum investment for this Fund is $100,000. The financial statements included herein present information relating to all of the Funds. The assets of each Fund are segregated and a shareholder's interest is limited to the Fund in which shares are held. The Funds' prospectus provides a description of each fund's investment objectives, policies and strategies. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of the significant accounting policies followed by the Trust. SECURITY VALUATION--The value of investment securities held by the Money Market Funds are stated at amortized cost, which approximates market value. Under this valuation method, purchase discounts and premiums are accreted and amortized ratably to maturity and are included in interest income. Investment in equity securities that are traded on a national securities exchange (or reported on the NASDAQ national market system) are stated at the last quoted sales price if readily available for such equity securities on each business day; other equity securities traded in the over-the-counter market and listed equity securities for which no sale was reported on that date are stated at the last quoted bid price. Debt obligations exceeding sixty days to maturity for which market quotations are readily available are valued at the most recently quoted bid price. Debt obligations with sixty days or less remaining until maturity may be valued at their amortized cost. Restricted securities for which quotations are not readily available are valued at fair value using methods determined in good faith under general trustee supervision. FEDERAL INCOME TAXES--It is each Fund's intention to qualify as a regulated investment company for Federal income tax purposes and to distribute all of its taxable income and net capital gains. Accordingly, no provisions for Federal income taxes are required. The International Growth Fund may be subject to taxes imposed by countries in which it invests with respect to its investments in issuers existing or operating in such countries. Such taxes are generally based on either income earned or repatriated. The International Growth Fund accrues such taxes when the related income is earned. FOREIGN CURRENCY TRANSLATION--The books and records of the International Growth Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on the following basis: o market value of investment securities, other assets and liabilities at the current rate of exchange; and o purchases and sales of investment securities, income and expenses at the relevant rates of exchange prevailing on the respective dates of such transactions. 57 Notes to Financial Statements (CONTINUED) The International Growth Fund does not isolate that portion of gains and losses on equity investment securities that is due to changes in foreign exchange rates from that which is due to changes in market prices of such securities. The International Growth Fund reports gains and losses on foreign currency related transactions as realized and unrealized gains and losses for financial reporting purposes, whereas such gains and losses are treated as ordinary income or loss for Federal income tax purposes. 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 and procedures adopted by the Adviser ensure that the market value of the collateral including accrued interest thereon, is sufficient in the event of default by 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 Fund may be delayed or limited. SECURITY TRANSACTIONS AND INVESTMENT INCOME--Security transactions are accounted for on the date the security is purchased or sold (trade date). Costs used in determining realized gains and losses on the sale 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 periods. Interest income is recorded on the accrual basis; dividend income is recorded on the ex-dividend date. Purchase discounts and premiums on securities held by the Fixed Income Funds and the Balanced Fund are accreted and amortized to maturity using the scientific interest method, which approximates the effective interest method. DISTRIBUTIONS TO SHAREHOLDERS--Distributions from net investment income for the Money Market Funds and the Fixed Income Funds are declared daily and paid monthly. The Equity Funds and the Balanced Fund declare and pay distributions from net investment income quarterly, except for the International Growth Fund which declares and pays distributions periodically. Any net realized capital gains will be distributed at least annually for all Funds. EXPENSES--Expenses that are directly related to one of the Funds are charged directly to that Fund. Other operating expenses of the Trust are prorated to the Funds on the basis of relative net asset value. Class specific expenses, such as the 12b-1 fees, are borne by that class. Income, other expenses and realized and unrealized gains and losses of a Fund are allocated to the respective classes on the basis of the relative net assets each day. USE OF ESTIMATES--The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates. 3. ORGANIZATION COSTS AND TRANSACTIONS WITH AFFILIATES The Trust incurred organization costs of approximately $202,000. Organizational costs have been capitalized by the Funds and are being amortized over sixty months commencing with operations. In the event any of the initial shares of the Funds are redeemed by any holder thereof during the period that the Funds are amortizing their 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. These costs include legal fees of approximately $47,000 for organizational work performed by a law firm of which two officers of the Trust are partners. Certain officers and /or Trustees of the Trust are also officers and/or directors of SEI Fund Resources (the "Administrator"). Such officers are paid no fees by the Trust for serving as officers of the Trust. The Trust pays each unaffiliated Trustee an annual fee for attendance at quarterly, interim and committee meetings. 58 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) 4. ADMINISTRATION AND DISTRIBUTION AGREEMENTS The Trust and the Administrator are parties to an administration agreement (the "Agreement"), under which the Administrator provides the Trust with administrative services for an annual fee that is calculated daily and paid monthly at an annual rate of 0.20% of the average daily net assets of each Fund with the exception of the U.S. Treasury Securities Plus Money Market Fund with an annual fee that is calculated daily and paid monthly at an annual rate of 0.35% of average daily net assets. The Administrator has voluntarily agreed to waive all or a portion of its fee in order to limit the operating expenses of certain Funds. SEI Investments Distribution Co. (the "Distributor") acts as the distributor of the Trust's shares. The Trust has adopted a distribution plan for Class A shares (the "Class A Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Class A Plan, the Distributor is entitled to receive from the Trust an annual distribution fee of 0.25% of the Fund's Class A average daily net assets. The Trust has also adopted a distribution plan for Class B shares (the "Class B Plan") pursuant to Rule 12b-1 under the 1940 Act. Under the Class B Plan, the Distributor is entitled to receive from the Trust an annual distribution fee of 0.75% of the Fund's Class B average daily net assets. Additionally, the Class B Plan provides that Class B shares are subject to a service fee at an annual rate of 0.25% of the Fund's Class B average daily net assets. The Distributor receives no fees for its distribution services for Class I shares of any fund with the exception of the U.S. Treasury Securities Plus Money Market Fund which pays a distribution fee of 0.03% of average daily net assets. 5. INVESTMENT ADVISORY AND CUSTODIAN AGREEMENTS The Trust and Summit Bank Investment Management Division, a division of Summit Bank, (the "Adviser") are parties to an advisory agreement. Under the terms of the agreement, the Adviser will receive a fee, that is calculated daily and paid monthly, at an annual rate of 0.35% of the average daily net assets of the U.S. Treasury Securities Money Market, Prime Obligation and Tax-Exempt Money Market Funds, 0.15% of the average daily net assets of the U.S. Treasury Securities Plus Money Market Fund, 0.60% of the average daily net assets of the Fixed Income Funds and 0.75% of the average daily net assets of the Equity Funds and the Balanced Fund. The Trust and the Adviser are also parties to a second advisory agreement relating only to the International Growth Fund. Under the terms of the agreement, the Adviser receives a fee, that is calculated daily and paid monthly, at an annual rate of 1.00% of the average daily net assets of the International Growth Fund. The Adviser has voluntarily agreed to waive all or a portion of its fee in order to limit the operating expenses of the Funds. Wellington Management Company LLP serves as the investment sub-advisor to the International Growth Fund. Summit Bank also acts as Custodian of securities for the Trust. The Custodian plays no role in determining the investment policies of the Trust or which securities are to be purchased or sold in the Funds. For its services, the Custodian receives a fee, that is calculated daily and paid monthly, at an annual rate of 0.025% of the average daily net assets of each domestic Fund and an annual rate of 0.17% of the average daily net assets of the International Growth Fund. 6. INVESTMENT TRANSACTIONS The cost of security purchases and the proceeds from the sale of securities, other than short term investments, during the period ended June 30, 1997 were as follows: NEW SHORT-TERM FIXED JERSEY INT.-TERM PA INV. INCOME MUNI. GOV'T. MUNI. GNMA ---------- -------- -------- ---------- -------- -------- (000) (000) (000) (000) (000) (000) Purchases U.S. Gov't -- 183,246 -- 18,502 -- -- Other 300 22,994 10,060 -- 11,178 -- Sales U.S. Gov't -- 30,222 -- 12,386 -- 871 Other -- 23,263 15,565 -- 11,903 -- EQUITY EQUITY EQUITY MID INTERNATIONAL GROWTH VALUE INCOME CAP BALANCED GROWTH -------- -------- -------- -------- ---------- -------------- (000) (000) (000) (000) (000) (000) Purchases U.S. Gov't -- -- -- -- 4,491 -- Other 104,802 61,530 28,016 19,033 7,633 5,452 Sales U.S. Gov't -- -- 200 -- 5,653 -- Other 93,181 49,886 20,944 21,421 3,451 5,568 59 Notes to Financial Statements (CONTINUED) At June 30, 1997, the total cost of securities and the net realized gains or losses on securities sold for Federal income tax purposes was not materially different from amounts reported for financial reporting purposes. The aggregate gross unrealized gain or loss on securities at June 30, 1997, for each Fund is as follows: NEW SHORT-TERM FIXED JERSEY INT.-TERM PA INV. INCOME MUNI. GOV'T. MUNI. GNMA ---------- -------- -------- ---------- -------- -------- (000) (000) (000) (000) (000) (000) Aggregate gross unrealized gain 16 1,922 3,836 210 752 88 Aggregate gross unrealized loss (3) (2,252) (358) (174) (89) (193) ---------- -------- -------- ---------- -------- -------- Net unrealized gain (loss) 13 (330) 3,478 36 663 (105) ========== ======== ======== ========== ======== ======== EQUITY EQUITY EQUITY MID INTERNATIONAL GROWTH VALUE INCOME CAP BALANCED GROWTH -------- -------- -------- -------- ---------- ------------- (000) (000) (000) (000) (000) (000) Aggregate gross unrealized gain 36,769 65,508 33,770 12,939 6,927 2,454 Aggregate gross unrealized loss (2,525) (2,460) (756) (1,612) (157) (701) -------- -------- -------- -------- ---------- ------------- Net unrealized gain (loss) 34,244 63,048 33,014 11,327 6,770 1,753 ======== ======== ======== ======== ========== ============= 7. CONCENTRATION OF CREDIT RISK The money market funds invest primarily in a portfolio of money market instruments maturing in one year or less whose ratings are within one of the two highest ratings category assigned by a nationally recognized statistical rating organization ("NRSRO") or, if not rated, are believed to be of comparable quality. The ability of the issuers of the securities held by a Fund to meet their obligations may be affected by economic developments in a specific industry, state or region. The Fixed Income Funds invest in debt instruments and the Balanced Fund invests in a combination of equity, fixed income and money market securities. The taxable funds may invest in bank obligations. As a result of this policy, these investments may be subject to greater risk than a fund that does not invest in the banking industry. In particular, bank obligations may be subject to the risks associated with interest rate volatility, changes in federal and state laws and regulations governing banking and the inability of borrowers to pay principal and interest when due. In addition, foreign banks present the risk of investing in foreign securities and are not subject to the same reserve requirements and other regulations as those of U.S. banks. The New Jersey Municipal Securities and the Pennsylvania Municipal Securities Funds invest primarily in a diversified portfolio of municipal securities, including municipal bonds and debentures, rated Baa or better by a NRSRO, or, if not rated, determined by the Adviser to be of comparable quality. Although the Funds maintain a diversified portfolio, the issuers' ability to meet their obligations may be affected by economic developments in a specific state or region. The following tables present a summary of holdings in each of these portfolios: TAX- U.S. EXEMPT U.S. TREASURY PRIME MONEY TREASURY SECURITIES OBLIGATION MARKET SECURITIES PLUS ---------- ---------- ---------- --------------- U.S. Gov't. Securities 96.7% 17.9% -- 49.0% Repurchase Agreements -- 17.5 -- 51.0 Municipal Securities -- -- 99.4% -- Commercial Paper -- 53.3 -- -- Other Short Term Securities 3.3 11.3 0.6 -- SHORT-TERM FIXED NEW JERSEY INT.-TERM INV. INCOME MUNI. GOVT. ------------ ---------- -------------- ---------- U.S. Gov't. Securities 92.8% 79.4% -- 94.4% Repurchase Agreements -- -- -- -- AAA -- -- 53.2% -- AA 0.8 11.6 21.0 -- A 1.7 8.9 10.7 -- BBB -- 0.1 1.1 -- BB -- -- -- -- NR 1.6 -- 11.1 -- All Other 3.1 -- 2.9 5.6 PA BALANCED MUNI. GNMA ------------ ---------- -------- U.S. Gov't. Securities 27.8% -- 97.1% Repurchase Agreements -- -- -- AAA -- 68.3% -- AA 6.1 9.8 -- A 1.5 7.7 -- BBB -- 0.4 -- BB -- -- -- NR -- 12.2 -- Common Stock 63.8 -- -- All Other 0.8 1.6 2.9 60 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) 8. COMMON TRUST FUND CONVERSIONS On February 1, 1997, certain Common Trust Funds of Summit Bank and its affiliates were converted into the Pillar Funds. The Funds that were involved in the conversion were as follows: Common Trust Fund Pillar Fund - ------------------ ----------- Pyramid Equity Income Fund Equity Income Fund First Valley Bank Pennsylvania Pennsylvania Municipal Tax-Exempt Fund Securities Fund Pyramid Government Intermediate-Term Fund Government Securities Fund Pyramid Municipal Fund Summit Bank CTF New Jersey Municipal Tax-Exempt Fund Securities Fund First Valley Bank Corporate/ Government Income Fund Summit Bank CTF Taxable Bond Fund Pyramid Income Fund Summit Bank Employee Benefit Bond Fund Fixed Income Fund First Valley Bank Equity Fund Pyramid Growth Fund Equity Value Fund Summit Bank Employee Benefit Common Stock Fund Self Employed Retirement Fund Summit Bank CTF Capital Growth Fund Equity Growth Fund The assets which consisted of securities and related receivables, were converted on a tax-free basis (with the exception of the Summit Bank Employee Benefit Bond Fund which did not qualify for tax-free treatment). The number of shares issued for each fund and the net assets (including net unrealized gain/loss) of each fund immediately before the conversion were as follows: Unrealized Common Trust Fund Net Assets Gain/(Loss) - ------------------ ----------- ----------- Pyramid Equity Income Fund $34,921,068 $15,070,845 First Valley Bank Pennsylvania Tax-Exempt Fund 37,351,305 479,925 Pyramid Government Fund 13,328,272 82,578 Pyramid Municipal Fund 27,106,556 994,062 Summit Bank CTF Tax-Exempt Fund 81,341,717 1,463,259 First Valley Bank Corporate/ Government Income Fund 23,359,209 (39,338) Summit Bank CTF Taxable Bond Fund 68,089,184 96,610 Pyramid Income Fund 33,854,976 168,397 Summit Bank Employee Benefit Bond Fund 46,538,572 (18,801) First Valley Bank Equity Fund 29,213,010 6,986,551 Pyramid Growth Fund 55,314,477 20,917,589 Summit Bank Employee Benefit Common Stock Fund 65,394,986 1,223,470 Self Employed Retirement Fund 3,352,225 39,136 Summit Bank CTF Capital Growth Fund 152,286,126 32,316,660 Net Assets Pillar Funds Prior to Conversion Shares Issued - ------------------ ------------------- ------------- Equity Income Fund $72,031,803 2,525,125 Pennsylvania Municipal Securities Fund 4,058,459 3,676,310 Intermediate-Term Government Securities Fund 27,272,305 1,311,380 New Jersey Municipal Securities Fund 40,228,805 10,125,023 Fixed Income Fund 103,362,682 17,056,956 Equity Value Fund 132,299,525 6,015,148 Equity Growth Fund -- 22,103,334 61 Notes 62 [PILLAR LOGO OMITTED] JUNE 30, 1997 (UNAUDITED) Notes 63 Notes 64 The Pillar Funds Semi-Annual Report June 30, 1997 Investment Adviser Summit Bank Investment Management Division a division of Summit Bank Administrator SEI Fund Resources Oaks, PA 19456 Distributor SEI Investments Distribution Co. Oaks, PA 19456 The Pillar Funds is a registered service mark of Summit Bank. Summit Bank is a service mark of Summit Bancorp. The Pillar Funds are distributed by SEI Financial Services Company. SEI Financial Services Company is not affiliated with Summit Bank, Summit Bancorp, or their affiliates. Summit Bank Investment Management Division serves as investment adviser and custodian to The Pillar Funds. This information must be preceded or accompanied by a current prospectus. For more information call, 1-800-932-7782. Read it carefully before you invest or send money. PIL-F-008-06 -----END PRIVACY-ENHANCED MESSAGE-----