As filed with the Securities and Exchange Commission on August 30, 2007
Registration No. 333-______
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
PRE-EFFECTIVE AMENDMENT NO.____
POST-EFFECTIVE AMENDMENT NO. ____
(Check appropriate box or boxes)
FIFTH THIRD FUNDS
(Exact Name of Registrant as Specified in Charter)
38 Fountain Square Plaza
Cincinnati, Ohio 45263
(Address of Principal Executive Offices) (Zip code)
Registrant's Telephone Number: (800) 282-5706
E. Keith Wirtz
President
Fifth Third Funds
38 Fountain Square Plaza
Cincinnati, Ohio 45263
(Name and Address of Agent for Service)
Copy to:
Alan G. Priest, Esquire
Ropes & Gray LLP
700 12th Street, N.W., Suite 900
Washington, D.C. 20005
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this Registration Statement become effective on September
28, 2007 pursuant to Rule 488.
Title of securities being offered: Units of beneficial interest.
An indefinite amount of the Registrant's securities has been registered under
the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company
Act of 1940. In reliance upon such Rule, no filing fee is being paid at this
time.
COMBINED PROSPECTUS/PROXY STATEMENT
IMPORTANT SHAREHOLDER INFORMATION
Fifth Third Funds
Fifth Third Technology Fund
Fifth Third Intermediate Bond Fund
Fifth Third U.S. Government Bond Fund
Fifth Third Government Money Market Fund
Fifth Third Balanced Fund
The document you hold in your hands contains your Combined Prospectus/Proxy
Statement and proxy card. A proxy card is, in essence, a ballot. When you vote
your proxy, you tell us how to vote on your behalf on important issues relating
to your Fifth Third Fund. If you simply sign the proxy without specifying a
vote, or you do not return your proxy card, your shares will be voted in
accordance with the recommendations of the Board of Trustees of Fifth Third
Funds (the "Board" or "Trustees").
We urge you to read carefully the Combined Prospectus/Proxy Statement, fill out
your proxy card, and return it to us (or vote by telephone or the Internet). By
voting your proxy, and doing so promptly, you enable Fifth Third Funds to avoid
conducting additional mailings on behalf of your Fifth Third Fund.
Please take a few moments to exercise your right to vote. Thank you.
FIFTH THIRD FUNDS
Fifth Third Technology Fund
Fifth Third Intermediate Bond Fund
Fifth Third U.S. Government Bond Fund
Fifth Third Government Money Market Fund
Fifth Third Balanced Fund
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
To the Shareholders of the Fifth Third Technology Fund, Fifth Third Intermediate
Bond Fund, Fifth Third U.S. Government Bond Fund, Fifth Third Government Money
Market Fund and Fifth Third Balanced Fund:
NOTICE IS HEREBY GIVEN that Special Meetings of the shareholders of the Fifth
Third Technology Fund, Fifth Third Intermediate Bond Fund, Fifth Third U.S.
Government Bond Fund, Fifth Third Government Money Market Fund and Fifth Third
Balanced Fund will be held at 511 Walnut Street, 13th Floor, Cincinnati, Ohio
45202 on November 16, 2007 at 10:00 a.m. Eastern time, for the following
purposes:
1. To consider and act upon an Agreement and Plan of Reorganization
adopted by Fifth Third Funds providing for the transfer of all of the
assets of the Fifth Third Technology Fund to the Fifth Third Mid Cap
Growth Fund in exchange for Institutional, Advisor, Class A, Class B
and Class C Shares (collectively, "Shares") of the Mid Cap Growth Fund
and the assumption by the Mid Cap Growth Fund of all of the
liabilities of the Technology Fund, followed by the dissolution and
liquidation of the Technology Fund, and the distribution of Shares of
the Mid Cap Growth Fund to the shareholders of Technology Fund
("Proposal 1").
2. To consider and act upon an Agreement and Plan of Reorganization
adopted by Fifth Third Funds providing for the transfer of all of the
assets of the Fifth Third Intermediate Bond Fund to the Fifth Bond
Fund in exchange for Institutional, Advisor, Class A, Class B and
Class C Shares (collectively, "Shares") of the Bond Fund and the
assumption by the Bond Fund of all of the liabilities of the
Intermediate Bond Fund, followed by the dissolution and liquidation of
the Intermediate Bond Fund, and the distribution of Shares of the Bond
Fund to the shareholders of Intermediate Bond Fund ("Proposal 2").
3. To consider and act upon an Agreement and Plan of Reorganization
adopted by Fifth Third Funds providing for the transfer of all of the
assets of the Fifth Third U.S. Government Bond Fund to the Fifth Third
Bond Fund in exchange for Institutional, Advisor, Class A and Class C
Shares (collectively, "Shares") of the Bond Fund and the assumption by
the Bond Fund of all of the liabilities of the U.S. Government Bond
Fund, followed by the dissolution and liquidation of the U.S.
Government Bond Fund, and the distribution of Shares of the Bond Fund
to the shareholders of U.S. Government Bond Fund ("Proposal 3").
4. To consider and act upon an Agreement and Plan of Reorganization
adopted by Fifth Third Funds providing for the transfer of all of the
assets of the Fifth Third Government Money Market Fund to the Fifth
Third Prime Money Market Fund in exchange for Institutional and Class
A Shares (collectively, "Shares") of the Prime Money Market Fund and
the assumption by the Prime Money Market Fund of all of the
liabilities of the Government Money Market Fund, followed by the
dissolution and liquidation of the Government Money Market Fund, and
the distribution of Shares of the Prime Money Market Fund to the
shareholders of Government Money Market Fund ("Proposal 4").
5. To consider and act upon an Agreement and Plan of Reorganization
adopted by Fifth Third Funds providing for the transfer of all of the
assets of the Fifth Third Balanced Fund to the Fifth Third Quality
Growth Fund in exchange for Institutional, Advisor, Class A, Class B
and Class C Shares (collectively, "Shares") of the Quality Growth Fund
and the assumption by the Quality Growth Fund of all of the
liabilities of the Balanced Fund, followed by the dissolution and
liquidation of the Balanced
Fund, and the distribution of Shares of the Quality Growth Fund to the
shareholders of Balanced Fund ("Proposal 5").
6. To transact such other business as may properly come before the
Special Meetings or any adjournments thereof.
The proposed Agreements and Plans of Reorganization, along with other
information about Proposals 1 to 5, are described in the attached Combined
Prospectus/Proxy Statement. A form of the Agreement and Plan of Reorganization
is appended as Appendix A thereto.
Pursuant to instructions of the Board of Trustees of Fifth Third Funds, the
close of business on September 24, 2007, has been designated as the record date
for determination of shareholders entitled to notice of, and to vote at, the
Special Meetings.
Shareholders of each fund are requested to promptly vote by telephone or the
Internet or to execute and return promptly in the enclosed envelope the
accompanying proxy card which is being solicited by Fifth Third Funds' Board of
Trustees. This is important to ensure a quorum at the special meeting. Proxies
may be revoked at any time before they are exercised by submitting to Fifth
Third Funds a written notice of revocation or a subsequently executed proxy or
by attending the Special Meetings and voting in person.
By Order of the Trustees
/s/ Matthew A. Swendiman
Matthew A. Swendiman
Secretary
Fifth Third Funds
September 28, 2007
FIFTH THIRD FUNDS
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Fifth Third Technology Fund
Fifth Third Intermediate Bond Fund
Fifth Third U.S. Government Bond Fund
Fifth Third Government Money Market Fund
Fifth Third Balanced Fund
Dear Fifth Third Technology Fund, Fifth Third Intermediate Bond Fund, Fifth
Third U.S. Government Bond Fund, Fifth Third Government Money Market Fund and
Fifth Third Balanced Fund Shareholders:
Dear Shareholder,
A Special Meeting of Shareholders (the "Meeting") of the of the Fifth Third
Technology Fund, Fifth Third Intermediate Bond Fund, Fifth Third U.S. Government
Bond Fund, Fifth Third Government Money Market Fund and Fifth Third Balanced
Fund (each, a "Fund", and collectively, the "Funds"), each a separate series of
Fifth Third Funds (the "Trust"), has been scheduled for November 19, 2007. As
described in the attached Notice and Proxy Statement, you are being asked to
consider and act upon an Agreement and Plan of Reorganization for each of the
Funds. We urge you to complete, sign, and return the enclosed proxy care
promptly. A postage-paid envelope is enclosed for this purpose. Whether or not
you plan to be present at the Meeting, we need your vote. To have your vote
count, you must return the proxy card. We encourage you to read the enclosed
proxy statement thoroughly. If you have any questions, please call your account
administrator, investment representative, or Fifth Third Funds directly at
1-800-282-5706. We look forward to receiving your proxy card so that your shares
may be voted at the Meeting.
Sincerely,
/s/ E. K. Wirtz
E. Keith Wirtz
President
Fifth Third Funds
September 28, 2007
Fifth Third Funds
38 Fountain Square Plaza
Cincinnati, Ohio 45263
1-800-282-5706
COMBINED PROSPECTUS/PROXY STATEMENT
This Combined Prospectus/Proxy Statement is furnished in connection with the
solicitation of proxies from the holders of units of beneficial interest of
Fifth Third Technology Fund, Fifth Third Intermediate Bond Fund, Fifth Third
U.S. Government Bond Fund, Fifth Third Government Money Market Fund and Fifth
Third Balanced Fund (collectively, the "Acquired Funds") for use at each Special
Meeting of shareholders. A Special Meeting will be held with respect to each
proposed reorganization listed below, at which shareholders of each Acquired
Fund will vote to approve the transfer of the assets of that Acquired Fund in
exchange for shares of the corresponding fund to which the shares will be
transferred (collectively, the "Acquiring Funds"):
Transfer of the Assets of the following In Exchange for Shares of the following
---------------------------------------- ---------------------------------------
Acquired Funds: Acquiring Funds:
--------------- ----------------
Proposal 1 Fifth Third Technology Fund Fifth Third Mid Cap Growth Fund
("Technology Fund") ("Mid Cap Growth Fund")
Proposal 2 Fifth Third Intermediate Bond Fund Fifth Third Bond Fund
("Intermediate Bond Fund") ("Bond Fund")
Proposal 3 Fifth Third U.S. Government Bond Fund Fifth Third Bond Fund
("U.S. Government Bond Fund") ("Bond Fund")
Proposal 4 Fifth Third Government Money Market Fund Fifth Third Prime Money Market Fund
("Government Money Market Fund") ("Prime Money Market Fund")
Proposal 5 Fifth Third Balanced Fund Fifth Third Quality Growth Fund
("Balanced Fund") ("Quality Growth Fund")
Technology Fund, Intermediate Bond Fund, U.S. Government Bond Fund, Government
Money Market Fund and Balanced Fund shareholders of record on September 24, 2007
are entitled to receive notice of and to vote at the applicable Special Meeting.
PROPOSAL 1: This reorganization contemplates the transfer of all the assets and
liabilities of the Technology Fund to the Mid Cap Growth Fund in exchange for
shares of the Mid Cap Growth Fund. After the transfer, shares of the Mid Cap
Growth Fund will be distributed to the shareholders of the Technology Fund pro
rata, with each holder of Institutional, Advisor, Class A, Class B or Class C
shares of the Technology Fund receiving Institutional, Advisor, Class A, Class B
or Class C shares, respectively, of the Mid Cap Growth Fund in accordance with
such shareholder's percentage ownership interest in such class of shares of the
Technology Fund on the closing date of the reorganization. The Technology Fund
will then be liquidated and dissolved.
PROPOSAL 2: This reorganization contemplates the transfer of all the assets and
liabilities of each of the Intermediate Bond Fund to the Bond Fund in exchange
for shares of the Bond Fund. After the transfer, shares of the Bond Fund will be
distributed to the shareholders of the Intermediate Bond Fund pro rata, with
each holder of Institutional, Advisor, Class A, Class B or Class C shares of the
Intermediate Bond Fund receiving Institutional, Advisor, Class A, Class B or
Class C shares, respectively, of the Bond Fund in accordance with such
shareholder's percentage ownership interest in such class of shares of the
Intermediate Bond Fund on the closing date of the reorganization. The
Intermediate Bond Fund will then be liquidated and dissolved.
PROPOSAL 3: This reorganization contemplates the transfer of all the assets and
liabilities of each of the U.S. Government Bond Fund to the Bond Fund in
exchange for shares of the Bond Fund. After the transfer, shares of the Bond
Fund will be distributed to the shareholders of the U.S. Government Bond Fund
pro rata, with each holder of Institutional, Advisor, Class A and Class C shares
of the U.S. Government Bond Fund receiving Institutional, Advisor, Class A or
Class C shares, respectively, of the Bond Fund in accordance with such
shareholder's percentage ownership interest in such class of shares of the U.S.
Government Bond Fund on the closing date of the reorganization. The U.S.
Government Bond Fund will then be liquidated and dissolved.
PROPOSAL 4: The reorganization contemplates the transfer of all the assets and
liabilities of the Government Money Market Fund to the Prime Money Market Fund
in exchange for shares of the Prime Money Market Fund. After the transfer,
shares of the Prime Money Market Fund will be distributed to the shareholders of
the Government Money Market Fund pro rata, with each holder of Institutional or
Class A shares of the Government Money Market Fund receiving Institutional or
Class A shares, respectively, of the Prime Money Market Fund in accordance with
such shareholder's percentage ownership interest in such class of shares of the
Government Money Market Fund on the closing date of the reorganization. The
Government Money Market Fund will then be liquidated and dissolved.
PROPOSAL 5: The reorganization contemplates the transfer of all the assets and
liabilities of the Balanced Fund to the Quality Growth Fund in exchange for
shares of the Quality Growth Fund. After the transfer, shares of the Quality
Growth Fund will be distributed to the shareholders of the Balanced Fund pro
rata, with each holder of Institutional, Advisor, Class A, Class B or Class C
shares of the Balanced Fund receiving Institutional, Advisor, Class A, Class B
or Class C shares, respectively, of the Quality Growth Fund in accordance with
such shareholder's percentage ownership interest in such shares of the Balanced
Fund on the closing date of the reorganization. The Balanced Fund will then be
liquidated and dissolved.
The Technology Fund, Mid Cap Growth Fund, Intermediate Bond Fund, U.S.
Government Bond Fund, Bond Fund, Government Money Market Fund, Prime Money
Market Fund, Balanced Fund and Quality Growth Fund are each portfolios
("series") of Fifth Third Funds, which is a Massachusetts business trust and an
open end management investment company consisting of 36 separate series, one of
which is not currently offered to the public.
This Combined Prospectus/Proxy Statement explains concisely what you should know
before investing in the Mid Cap Growth Fund, Bond Fund, Prime Money Market Fund
or Quality Growth Fund. Please read it carefully and keep it for future
reference.
The following documents have been filed with the Securities and Exchange
Commission (the "SEC") and are incorporated into this Prospectus/Proxy Statement
by reference:
o Stock and Bond and Money Market Mutual Funds and Asset Allocation
Funds Class A, Class B, Class C and Advisor Shares Prospectus of the
Fifth Third Funds, dated November 29, 2006;
o Stock and Bond Mutual Funds and Asset Allocation Funds Institutional
Shares Prospectus of the Fifth Third Funds, dated November 29, 2006;
o Money Market Mutual Funds Institutional Shares Prospectus of the Fifth
Third Funds, dated November 29, 2006;
o Combined Statement of Additional Information of the Fifth Third Funds,
dated November 29, 2006, as amended;
o Fifth Third Funds' Annual Reports for the period ended July 31, 2006;
o Fifth Third Funds' Semi-Annual Reports for the period ended January
31, 2007.
In addition, a Statement of Additional Information dated September 28, 2007,
relating to the Transaction described in this Combined Prospectus/Proxy
Statement, has been filed with the Securities and Exchange Commission and is
also incorporated by reference into this Combined Prospectus/Proxy Statement.
For a free copy of any of the documents listed above, call 1-800-282-5706 or
write to Fifth Third Funds, 38 Fountain Square Plaza, Cincinnati, Ohio 45263.
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
APPROVED OR DISAPPROVED THESE FUND SHARES OR DETERMINED WHETHER THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANYONE WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.
LIKE OTHER INVESTMENTS, YOU COULD LOSE MONEY ON YOUR INVESTMENT IN A FUND. YOUR
INVESTMENT IN A FUND IS NOT A DEPOSIT OR AN OBLIGATION OF FIFTH THIRD BANK, ITS
AFFILIATES, OR ANY BANK. IT IS NOT INSURED BY THE FDIC OR ANY GOVERNMENT AGENCY.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS COMBINED PROSPECTUS/PROXY STATEMENT IN
CONNECTION WITH THE OFFERING MADE BY THIS COMBINED PROSPECTUS/PROXY STATEMENT
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY FIFTH THIRD FUNDS. THIS COMBINED
PROSPECTUS/PROXY STATEMENT DOES NOT CONSTITUTE AN OFFERING BY FIFTH THIRD FUNDS
IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MAde.
September 28, 2007
TABLE OF CONTENTS
-----------------
I. Proposal - Approval of Agreement and Plan of Reorganizations..........
II. Fee Tables............................................................
III. Synopsis..............................................................
a. Key Features of the Transaction ..............................
b. Comparison of Investment Objectives, Principal Investment
Strategies and Policies................
IV. Principal Risk Factors................................................
V. Information about the Transaction.....................................
VI. Voting Information....................................................
VII. Other Information.....................................................
VIII. Appendix A - Form of Agreement and Plan of Reorganization.............
IX. Appendix B - Information About the Acquiring Funds....................
X. Appendix C - Ownership Information....................................
XI. Appendix D - Financial Highlights.....................................
PROPOSAL
TO APPROVE THE AGREEMENTS AND PLANS OF REORGANIZATION
At a meeting held on August 7, 2007, the Board of Trustees (the "Trustees") of
Fifth Third Funds (the "Trust") unanimously approved Agreements and Plans of
Reorganization (each a "Reorganization Agreement," and collectively the
"Reorganization Agreements") pursuant to which each Acquired Fund would be
merged with and into the corresponding Acquiring Fund, subject to the approval
of such Acquired Fund's shareholders, on or about November 16, 2007 (the
"Exchange Date"). On the Exchange Date, each Acquired Fund will transfer all of
its assets and liabilities to the corresponding Acquiring Fund in exchange for
Acquiring Fund shares having an aggregate net asset value equal to the aggregate
value of the net assets acquired from the Acquired Fund. The assets and
liabilities of the Acquired Funds and the Acquiring Funds will be valued as of
the close of trading on the New York Stock Exchange on the business day
preceding the Exchange Date. Following the transfer, each Acquired Fund will be
dissolved and shares of the corresponding Acquiring Fund received by each
Acquired Fund will be distributed to that Acquired Fund's shareholders in
liquidation of such Acquired Fund. As a result of the proposed Transactions,
shareholders of each Acquired Fund will receive a number of full and fractional
shares equal in value at the date of the exchange to the value of the net assets
of such Acquired Fund transferred to the corresponding Acquiring Fund
attributable to the shareholder (based on the proportion of the outstanding
shares of the Acquired Fund owned at the time by the shareholder). Acquired Fund
shareholders will receive shares of the Acquiring Fund class (Advisor,
Institutional, Class A, Class B or Class C, as applicable) that corresponds to
the class of Acquired Fund shares that they hold (Advisor, Institutional, Class
A, Class B or Class C, as applicable). It is expected that the Transactions will
not result in any gain or loss for federal income tax purposes. However, the
Transactions will end the tax year of the Acquired Funds, likely accelerating
taxable distributions from the Acquired Funds to shareholders.
For the reasons set forth below under "Reasons for the Proposed
Reorganizations," at a meeting held on August 7, 2007, the Trustees of the
Trust, including those Trustees who are not "interested persons" of the Trust
(the "Independent Trustees"), as that term is defined in the Investment Company
Act of 1940, as amended (the "1940 Act"), unanimously concluded that
participation in the proposed Transactions is in the best interests of each of
the Acquiring Funds, each of the Acquired Funds and their respective
shareholders.
In approving the Reorganization Agreements, the Trustees, who were represented
by independent counsel, considered, among other factors: (i) any fees or
expenses that will be borne directly or indirectly by the respective Funds in
connection with the proposed merger; (ii) any effect of the proposed merger on
the respective Funds' annual operating expenses and shareholder fees and
services; (iii) any change in the respective Funds' investment objectives,
restrictions and policies that will result from the merger; and (iv) any direct
or indirect federal income tax consequences of the proposed merger to the Funds'
shareholders. For more detail regarding the Trustees' considerations with
respect to each Proposal, and about the other factors considered by the
Trustees, please refer to the section below titled "Reasons for the Proposed
Reorganizations."
Acquired Fund shareholders who do not wish to be reorganized into the respective
Acquiring Fund and have their Acquired Fund shares exchanged for shares of the
corresponding Acquiring Fund may redeem their shares prior to the consummation
of the relevant Transaction. If you redeem your shares you may recognize a
taxable gain or loss based on the difference between your tax basis in the
shares and the amount that you receive for them.
FEE TABLES
A fee table showing the current fees as of January 31, 2007 for each Fund, as
well as the annualized pro forma fees assuming the effectiveness of the
reorganization and after fee waivers and/or expense reimbursement, are set forth
below.
TECHNOLOGY FUND
INSTITUTIONAL CLASS A CLASS B
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 5.00%(1)(2) None
Maximum deferred sales charge None None 5.00%(3)
Maximum sales charge imposed on reinvestment of dividends None None None
Redemption fee None None None
Exchange fee None None None
ANNUAL FUND OPERATING EXPENSES
Management fees 1.00% 1.00% 1.00%
Distribution (12b-1) fees 0.00% 0.25% 1.00%
Acquired fund fees and expenses 0.00% 0.00% 0.00%
Other expenses 0.51% 0.51% 0.51%
----------------- ----------------- ----------------
Total annual fund operating expenses 1.51% 1.76% 2.51%
Fee Waiver and/or Expense Reimbursement 0.00% 0.00% 0.00%
----------------- ----------------- ----------------
Net expenses 1.51% 1.76% 2.51%
================= ================= ================
CLASS C ADVISOR
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 3.25%(1)
Maximum deferred sales charge 1.00%(4) 0.00%
Maximum sales charge imposed on reinvestment of dividends None None
Redemption fee None None
Exchange fee None None
ANNUAL FUND OPERATING EXPENSES
Management fees 1.00% 1.00%
Distribution (12b-1) fees 0.75% 0.50%
Acquired fund fees and expenses 0.00% 0.00%
Other expenses 0.76% 0.51%
---------------- -------------------
Total annual fund operating expenses 2.51% 2.01%
Fee Waiver and/or Expense Reimbursement 0.00% 0.00%
---------------- -------------------
Net expenses 2.51% 2.01%
================ ===================
MID CAP GROWTH FUND
INSTITUTIONAL CLASS A CLASS B
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 5.00%(1)(2) None
Maximum deferred sales charge None None 5.00%(3)
Maximum sales charge imposed on reinvestment of dividends None None None
Redemption fee None None None
Exchange fee None None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.80% 0.80% 0.80%
Distribution (12b-1) fees 0.00% 0.25% 1.00%
Acquired fund fees and expenses 0.00% 0.00% 0.00%
Other expenses 0.30% 0.30% 0.30%
---------------- ----------------- -----------------
Total annual fund operating expenses 1.10% 1.35% 2.10%
Fee Waiver and/or Expense Reimbursement 0.00% 0.00% 0.00%
---------------- ----------------- -----------------
Net expenses 1.10% 1.35% 2.10%
================ ================= =================
CLASS C ADVISOR
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 3.25%(1)
Maximum deferred sales charge 1.00%(4) 0.00%
Maximum sales charge imposed on reinvestment of dividends None None
Redemption fee None None
Exchange fee None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.80% 0.80%
Distribution (12b-1) fees 0.75% 0.50%
Acquired fund fees and expenses 0.00% 0.00%
Other expenses 0.55% 0.30%
----------------- ------------------
Total annual fund operating expenses 2.10% 1.60%
Fee Waiver and/or Expense Reimbursement 0.00% 0.00%
----------------- ------------------
Net expenses 2.10% 1.60%
================= ==================
MID CAP GROWTH FUND - PRO FORMA
INSTITUTIONAL CLASS A CLASS B
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 5.00%(1)(2) None
Maximum deferred sales charge None None 5.00%(3)
Maximum sales charge imposed on reinvestment of dividends None None None
Redemption fee None None None
Exchange fee None None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.80% 0.80% 0.80%
Distribution (12b-1) fees 0.00% 0.25% 1.00%
Acquired fund fees and expenses 0.00% 0.00% 0.00%
Other expenses 0.32% 0.32% 0.32%
----------------- ----------------- -----------------
Total annual fund operating expenses 1.12% 1.37% 2.12%
Fee Waiver and/or Expense Reimbursement -0.03% -0.03% -0.03%
----------------- ----------------- -----------------
Net expenses 1.09% 1.34% 2.09%
================= ================= =================
CLASS C ADVISOR
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 3.25%(1)
Maximum deferred sales charge 1.00%(4) 0.00%
Maximum sales charge imposed on reinvestment of dividends None None
Redemption fee None None
Exchange fee None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.80% 0.80%
Distribution (12b-1) fees 0.75% 0.50%
Acquired fund fees and expenses 0.00% 0.00%
Other expenses 0.57% 0.32%
---------------- -------------------
Total annual fund operating expenses 2.12% 1.62%
Fee Waiver and/or Expense Reimbursement -0.03% -0.03%
---------------- -------------------
Net expenses 2.09% 1.59%
================ ===================
(1) Lower sales charges are available depending upon the amount invested.
(2) For investments of $1 million or more, no sales charge apply; however, a
contingent deferred sales charge ("CDSC") of 1% is applicable to
redemptions within 18 months of purchase. See "Calculation of Sales
Charge".
(3) 5% in the first year after purchase, declining to 4% in the second year, 3%
in the third and fourth years, 2% in the fifth year, 1% in the sixth year
and eliminated thereafter. Approximately eight years after purchase, Class
B shares automatically convert to Class A shares.
(4) The CDSC for Class C Shares of 1.00% applies to shares redeemed within the
first year of purchase.
GOVERNMENT MONEY MARKET FUND
INSTITUTIONAL CLASS A
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None None
Maximum deferred sales charge None None
Maximum sales charge imposed on reinvestment of dividends None None
Redemption fee None None
Exchange fee None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.40% 0.40%
Distribution (12b-1) fees 0.00% 0.25%
Acquired fund fees and expenses 0.00% 0.00%
Other expenses 0.28% 0.18%
----------------- -----------------
Total annual fund operating expenses 0.68% 0.83%
Fee Waiver and/or Expense Reimbursement 0.00% 0.00%
----------------- -----------------
Net expenses 0.68% 0.83%
================= =================
PRIME MONEY MARKET FUND - ACQUIRING & PRO FORMA
INSTITUTIONAL CLASS A CLASS B
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None None None
Maximum deferred sales charge None None 5.00%(1)
Maximum sales charge imposed on reinvestment of dividends None None None
Redemption fee None None None
Exchange fee None None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.40% 0.40% 0.40%
Distribution (12b-1) fees 0.00% 0.25% 1.00%
Acquired fund fees and expenses 0.00% 0.00% 0.00%
Other expenses 0.27% 0.27% 0.27%
----------------- ----------------- -----------------
Total annual fund operating expenses 0.67% 0.92% 1.67%
Fee Waiver and/or Expense Reimbursement(1) -0.13% -0.13% -0.13%
----------------- ----------------- -----------------
Net expenses 0.54% 0.79% 1.54%
================= ================= =================
CLASS C ADVISOR
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None None
Maximum deferred sales charge 1.00%(2) None
Maximum sales charge imposed on reinvestment of dividends None None
Redemption fee None None
Exchange fee None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.40% 0.40%
Distribution (12b-1) fees 0.75% 0.50%
Acquired fund fees and expenses 0.00% 0.00%
Other expenses 0.52% 0.27%
---------------- -------------------
Total annual fund operating expenses 1.67% 1.17%
Fee Waiver and/or Expense Reimbursement -0.13% -0.13%
---------------- -------------------
Net expenses 1.54% 1.04%
================ ===================
(1) Lower sales charges are available depending upon the amount invested.
(2) For investments of $1 million or more, no sales charge apply; however, a
contingent deferred sales charge ("CDSC") of 1% is applicable to
redemptions within 18 months of purchase. See "Calculation of Sales
Charge".
(3) The Funds' Advisor and Administrator have contractually agreed to waive
fees and/or reimburse expenses through November 28, 2007 to limit total
annual fund operating expenses for the Prime Money Market Fund to 0.54% for
Institutional shares and to 0.79% for Class A shares. Under the terms of
the expense limitation agreement, fees waived or expenses reimbursed by the
Advisor and Administrator are subject to reimbursement by the Fund for the
13 month period in which the expense limitation agreement is in effect. No
reimbursement payment will be made by the Fund exceeding the expense
limitation described herein.
BALANCED
INSTITUTIONAL CLASS A CLASS B
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 5.00%(1)(2) None
Maximum deferred sales charge None None 5.00%(3)
Maximum sales charge imposed on reinvestment of dividends None None None
Redemption fee None None None
Exchange fee None None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.80% 0.80% 0.80%
Distribution (12b-1) fees 0.00% 0.25% 1.00%
Acquired fund fees and expenses 0.00% 0.00% 0.00%
Other expenses 0.49% 0.49% 0.49%
----------------- ----------------- -----------------
Total annual fund operating expenses 1.29% 1.54% 2.29%
Fee Waiver and/or Expense Reimbursement 0.00% 0.00% 0.00%
----------------- ----------------- -----------------
Net expenses 1.29% 1.54% 2.29%
================= ================= =================
CLASS C ADVISOR
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 3.25%(1)
Maximum deferred sales charge 1.00%(4) None
Maximum sales charge imposed on reinvestment of dividends None None
Redemption fee None None
Exchange fee None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.80% 0.80%
Distribution (12b-1) fees 0.75% 0.50%
Acquired fund fees and expenses 0.00% 0.00%
Other expenses 0.74% 0.49%
---------------- -------------------
Total annual fund operating expenses 2.29% 1.79%
Fee Waiver and/or Expense Reimbursement(5) 0.00% 0.00%
---------------- -------------------
Net expenses 2.29% 1.79%
================ ===================
QUALITY GROWTH FUND
INSTITUTIONAL CLASS A CLASS B
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 5.00%(1)(2) None
Maximum deferred sales charge None None 5.00%(3)
Maximum sales charge imposed on reinvestment of dividends None None None
Redemption fee None None None
Exchange fee None None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.80% 0.80% 0.80%
Distribution (12b-1) fees 0.00% 0.25% 1.00%
Acquired fund fees and expenses 0.00% 0.00% 0.00%
Other expenses 0.29% 0.29% 0.29%
----------------- ----------------- -----------------
Total annual fund operating expenses 1.09% 1.34% 2.09%
Fee Waiver and/or Expense Reimbursement -0.02% -0.02% -0.02%
----------------- ----------------- -----------------
Net expenses 1.07% 1.32% 2.07%
================= ================= =================
CLASS C ADVISOR
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 3.25%(1)
Maximum deferred sales charge 1.00%(4) None
Maximum sales charge imposed on reinvestment of dividends None None
Redemption fee None None
Exchange fee None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.80% 0.80%
Distribution (12b-1) fees 0.75% 0.50%
Acquired fund fees and expenses 0.00% 0.00%
Other expenses 0.54% 0.29%
---------------- -------------------
Total annual fund operating expenses 2.09% 1.59%
Fee Waiver and/or Expense Reimbursement -0.02% -0.02%
---------------- -------------------
Net expenses 2.07% 1.57%
================ ===================
QUALITY GROWTH FUND - PRO FORMA
INSTITUTIONAL CLASS A CLASS B
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 5.00%(1)(2) None
Maximum deferred sales charge None None 5.00%(3)
Maximum sales charge imposed on reinvestment of dividends None None None
Redemption fee None None None
Exchange fee None None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.80% 0.80% 0.80%
Distribution (12b-1) fees 0.00% 0.25% 1.00%
Acquired fund fees and expenses 0.00% 0.00% 0.00%
Other expenses 0.30% 0.30% 0.30%
----------------- ----------------- -----------------
Total annual fund operating expenses 1.10% 1.35% 2.10%
Fee Waiver and/or Expense Reimbursement -0.03% -0.03% -0.03%
----------------- ----------------- -----------------
Net expenses 1.07% 1.32% 2.07%
================= ================= =================
CLASS C ADVISOR
SHAREHOLDER FEES
Maximum sales charge imposed on purchases None 3.25%(1)
Maximum deferred sales charge 1.00%(4) None
Maximum sales charge imposed on reinvestment of dividends None None
Redemption fee None None
Exchange fee None None
ANNUAL FUND OPERATING EXPENSES
Management fees 0.80% 0.80%
Distribution (12b-1) fees 0.75% 0.50%
Acquired fund fees and expenses 0.00% 0.00%
Other expenses 0.55% 0.30%
---------------- -------------------
Total annual fund operating expenses 2.10% 1.60%
Fee Waiver and/or Expense Reimbursement -0.03% -0.03%
---------------- -------------------
Net expenses 2.07% 1.57%
================ ===================
(1) Lower sales charges are available depending upon the amount invested.
(2) For investments of $1 million or more, no sales charge apply; however, a
contingent deferred sales charge ("CDSC") of 1% is applicable to
redemptions within 18 months of purchase. See "Calculation of Sales
Charge".
(3) 5% in the first year after purchase, declining to 4% in the second year, 3%
in the third and fourth years, 2% in the fifth year, 1% in the sixth year
and eliminated thereafter. Approximately eight years after purchase, Class
B shares automatically convert to Class A shares.
(4) The CDSC for Class C Shares of 1.00% applies to shares redeemed within the
first year of purchase.
(5) The Funds' Advisor and Administrator have voluntarily agreed to waive fees
and/or reimburse expenses to limit total annual fund operating expenses for
the Balanced Fund to 0.96% for Institutional shares and to 1.21% for Class
A shares, 1.96% for Class B shares, 1.96% for Class C shares and 1.46% for
Advisor shares. These waivers and/or expense reimbursements may be
discontinued at any time.
INTERM BOND - ACQUIRED
INSTITUTIONAL CLASS A CLASS B
SHAREHOLDER FEES
Maximum sales charge imposed on purchases 0.00% 3.50%(1)(2) 0.00%
Maximum deferred sales charge 0.00% 0.00% 5.00%(2)
Maximum sales charge imposed on reinvestment of dividends 0.00% 0.00% 0.00%
Redemption fee 0.00% 0.02% 5.00%(3)
Exchange fee 0.00% 0.00% 0.00%
ANNUAL FUND OPERATING EXPENSES
Management fees 0.55% 0.55% 0.55%
Distribution (12b-1) fees 0.00% 0.25% 1.00%
Acquired fund fees and expenses 0.00% 0.00% 0.00%
Other expenses 0.29% 0.29% 0.29%
----------------- ----------------- -----------------
Total annual fund operating expenses 0.84% 1.09% 1.84%
Fee Waiver and/or Expense Reimbursement(5) -0.14% -0.14% -0.14%
----------------- ----------------- -----------------
Net expenses 0.70% 0.95% 1.70%
================= ================= =================
CLASS C ADVISOR
SHAREHOLDER FEES
Maximum sales charge imposed on purchases 0.00% 2.00%(1)
Maximum deferred sales charge 1.00%(4) 0.00%
Maximum sales charge imposed on reinvestment of dividends 0.00% 0.00%
Redemption fee 0.00% 0.00%
Exchange fee 0.00% 0.00%
ANNUAL FUND OPERATING EXPENSES
Management fees 0.55% 0.55%
Distribution (12b-1) fees 0.75% 0.50%
Acquired fund fees and expenses 0.00% 0.00%
Other expenses 0.54% 0.29%
---------------- -------------------
Total annual fund operating expenses 1.84% 1.34%
Fee Waiver and/or Expense Reimbursement(5) -0.14% -0.14%
---------------- -------------------
Net expenses 1.70% 1.20%
================ ===================
US GOV BOND - ACQUIRED
INSTITUTIONAL CLASS A CLASS C
SHAREHOLDER FEES
Maximum sales charge imposed on purchases 0.00% 4.75%(1)(2) 0.00%
Maximum deferred sales charge 0.00% 0.00% 1.00%(3)
Maximum sales charge imposed on reinvestment of dividends 0.00% 0.00% 0.00%
Redemption fee 0.00% 0.00% 0.00%
Exchange fee 0.00% 0.00% 0.00%
ANNUAL FUND OPERATING EXPENSES
Management fees 0.55% 0.55% 0.55%
Distribution (12b-1) fees 0.00% 0.25% 0.75%
Acquired fund fees and expenses 0.01% 0.01% 0.01%
Other expenses 0.46% 0.46% 0.71%
----------------- ----------------- -----------------
Total annual fund operating expenses 1.02% 1.27% 2.02%
Fee Waiver and/or Expense Reimbursement(5) 0.00% 0.00% 0.00%
----------------- ----------------- -----------------
Net expenses 1.02% 1.27% 2.02%
================= ================= =================
BOND -
INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
SHAREHOLDER FEES
Maximum sales charge imposed on purchases 0.00% 4.75%(1)(2) 0.00% 0.00% 3.25%(1)
Maximum deferred sales charge 0.00% 0.00% 5.00%(2) 1.00%(3) 0.00%
Maximum sales charge imposed on reinvestment of dividends 0.00% 0.00% 0.00% 0.00% 0.00%
Redemption fee 0.00% 0.00% 0.00% 0.00% 0.00%
Exchange fee 0.00% 0.00% 0.00% 0.00% 0.00%
ANNUAL FUND OPERATING EXPENSES
Management fees 0.60% 0.60% 0.60% 0.60% 0.60%
Distribution (12b-1) fees 0.00% 0.25% 1.00% 0.75% 0.50%
Acquired fund fees and expenses 0.00% 0.00% 0.00% 0.00% 0.00%
Other expenses 0.32% 0.32% 0.32% 0.57% 0.32%
---------------- ------------- -------------- ------------- -------------
Total annual fund operating expenses 0.92% 1.17% 1.92% 1.92% 1.42%
Fee Waiver and/or Expense Reimbursement -0.20% -0.20% -0.20% -0.20% -0.20%
---------------- ------------- -------------- ------------- -------------
Net expenses 0.72% 0.97% 1.72% 1.72% 1.22%
================ ============= ============== ============= =============
BOND FUND - PRO FORMA SCENARIO 1 & 3
INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
SHAREHOLDER FEES
Maximum sales charge imposed on purchases 0.00% 4.75%(1)(2) 0.00% 0.00% 3.25%(1)
Maximum deferred sales charge 0.00% 0.00% 5.00%(2) 1.00%(3) 0.00%
Maximum sales charge imposed on reinvestment of dividends 0.00% 0.00% 0.00% 0.00% 0.00%
Redemption fee 0.00% 0.00% 0.00% 0.00% 0.00%
Exchange fee 0.00% 0.00% 0.00% 0.00% 0.00%
ANNUAL FUND OPERATING EXPENSES
Management fees 0.60% 0.60% 0.60% 0.60% 0.60%
Distribution (12b-1) fees 0.00% 0.25% 1.00% 0.75% 0.50%
Acquired fund fees and expenses 0.00% 0.00% 0.00% 0.00% 0.00%
Other expenses 0.30% 0.30% 0.30% 0.55% 0.30%
----------------- ------------- ------------- ---------------------------
Total annual fund operating expenses 0.90% 1.15% 1.90% 1.90% 1.40%
Fee Waiver and/or Expense Reimbursement -0.22% -0.22% -0.22% -0.22% -0.22%
----------------- ------------- ------------- ---------------------------
Net expenses 0.68% 0.93% 1.68% 1.68% 1.18%
================= ============= ============= ===========================
BOND FUND - PRO FORMA SCENARIO 2
INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
SHAREHOLDER FEES
Maximum sales charge imposed on purchases 0.00% 4.75% 0.00% 0.00% 3.25%
Maximum deferred sales charge 0.00% 0.00% 5.00% 1.00% 0.00%
Maximum sales charge imposed on reinvestment of dividends 0.00% 0.00% 0.00% 0.00% 0.00%
Redemption fee 0.00% 0.00% 0.00% 0.00% 0.00%
Exchange fee 0.00% 0.00% 0.00% 0.00% 0.00%
ANNUAL FUND OPERATING EXPENSES
Management fees 0.60% 0.60% 0.60% 0.60% 0.60%
Distribution (12b-1) fees 0.00% 0.25% 1.00% 0.75% 0.50%
Acquired fund fees and expenses 0.00% 0.00% 0.00% 0.00% 0.00%
Other expenses 0.33% 0.33% 0.33% 0.58% 0.33%
---------------- ------------- -------------- ------------- -------------
Total annual fund operating expenses 0.93% 1.18% 1.93% 1.93% 1.43%
Fee Waiver and/or Expense Reimbursement -0.25% -0.25% -0.25% -0.25% -0.25%
---------------- ------------- -------------- ------------- -------------
Net expenses 0.68% 0.93% 1.68% 1.68% 1.18%
================ ============= ============== ============= =============
(1) Lower sales charges are available depending upon the amount invested.
(2) For investments of $1 million or more, no sales charge apply; however, a
contingent deferred sales charge ("CDSC") of 1% is applicable to
redemptions within 18 months of purchase. See "Calculation of Sales
Charge".
(3) 5% in the first year after purchase, declining to 4% in the second year, 3%
in the third and fourth years, 2% in the fifth year, 1% in the sixth year
and eliminated thereafter. Approximately eight years after purchase, Class
B shares automatically convert to Class A shares.
(4) The CDSC for Class C Shares of 1.00% applies to shares redeemed within the
first year of purchase.
(5) The Funds' Advisor and Administrator have contractually agreed to waive
fees and/or reimburse expenses to limit total annual fund operating
expenses for the Intermediate Bond Fund to 0.70% for Institutional shares
and to 0.95% for Class A shares, 1.70% for Class B shares, 1.70% for Class
C shares and 1.20% for Advisor Shares and for the U.S. Government Bond Fund
to 0.69% for Institutional shares. These waivers and expense reimbursements
may be discontinued at any time. The Funds' Advisor and Administrator have
contractually agreed to waive fees and/or reimburse expenses to limit total
annual fund operating expenses for the Bond Fund to 0.72% for Institutional
shares and to 0.97% for Class A shares, 1.72% for Class B shares, 1.72% for
Class C shares and 1.22% for Advisor Shares and for the U.S. Government
Bond Fund to 0.69% for Institutional shares. These waivers and expense
reimbursements may be discontinued at any time.
EXPENSE EXAMPLE: Use the tables below to compare fees and expenses of each
Acquired Fund with those of the corresponding Acquiring Fund and with those of
the combined fund, which assumes the consummation of the proposed transactions.
The tables illustrate the amount of fees and expenses you and the Fund would
pay, assuming a $10,000 initial investment, 5% annual return, payment of maximum
sales charges, and no changes in the Fund's operating expenses. Because these
examples are hypothetical and for comparison only, your actual costs may be
different.
TECHNOLOGY FUND
INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
ASSUMING REDEMPTION
1 Year $ 154 $ 670 $ 754 $ 354 $ 522
3 Years $ 478 $ 1,026 $ 1,081 $ 781 $ 934
5 Years $ 824 $ 1,406 $ 1,535 $ 1,335 $ 1,372
10 Years $ 1,801 $ 2,468 $ 2,662 $ 2,845 $ 2,587
ASSUMING NO REDEMPTION
1 Year $ 154 $ 670 $ 254 $ 254 $ 522
3 Years $ 478 $ 1,026 $ 781 $ 781 $ 934
5 Years $ 824 $ 1,406 $ 1,335 $ 1,335 $ 1,372
10 Years $ 1,801 $ 2,468 $ 2,662 $ 2,845 $ 2,587
MID CAP GROWTH FUND
INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
ASSUMING REDEMPTION
1 Year $ 112 $ 631 $ 713 $ 313 $ 482
3 Years $ 350 $ 906 $ 958 $ 658 $ 813
5 Years $ 607 $ 1,202 $ 1,329 $ 1,129 $ 1,167
10 Years $ 1,341 $ 2,042 $ 2,240 $ 2,432 $ 2,163
ASSUMING NO REDEMPTION
1 Year $ 112 $ 631 $ 213 $ 213 $ 482
3 Years $ 350 $ 906 $ 658 $ 658 $ 813
5 Years $ 607 $ 1,202 $ 1,129 $ 1,129 $ 1,167
10 Years $ 1,341 $ 2,042 $ 2,240 $ 2,432 $ 2,163
MID CAP GROWTH FUND - PRO FORMA
INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
ASSUMING REDEMPTION
1 Year $ 111 $ 630 $ 712 $ 312 $ 481
3 Years $ 353 $ 909 $ 961 $ 661 $ 816
5 Years $ 614 $ 1,210 $ 1,336 $ 1,136 $ 1,174
10 Years $ 1,361 $ 2,061 $ 2,257 $ 2,449 $ 2,181
ASSUMING NO REDEMPTION
1 Year $ 111 $ 630 $ 212 $ 212 $ 481
3 Years $ 353 $ 909 $ 661 $ 661 $ 816
5 Years $ 614 $ 1,210 $ 1,136 $ 1,136 $ 1,174
10 Years $ 1,361 $ 2,061 $ 2,257 $ 2,449 $ 2,181
GOVERNMENT MONEY MARKET FUND INSTITUTIONAL CLASS A
ASSUMING NO REDEMPTION
1 Year $ 69 $ 85
3 Years $ 217 $ 265
5 Years $ 378 $ 461
10 Years $ 846 $ 1,025
PRIME MONEY MARKET FUND - AQUIRING & PRO FORMA INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
ASSUMING REDEMPTION
1 Year $ 55 $ 81 $ 657 $ 257 $ 106
3 Years $ 202 $ 281 $ 815 $ 515 $ 359
5 Years $ 361 $ 497 $ 1,097 $ 897 $ 632
10 Years $ 822 $ 1,119 $ 1,767 $ 1,967 $ 1,409
ASSUMING NO REDEMPTION
1 Year $ 55 $ 81 $ 157 $ 157 $ 106
3 Years $ 202 $ 281 $ 515 $ 515 $ 359
5 Years $ 361 $ 497 $ 897 $ 897 $ 632
10 Years $ 822 $ 1,119 $ 1,767 $ 1,967 $ 1,409
BALANCED
INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
ASSUMING REDEMPTION
1 Year $ 131 $ 649 $ 732 $ 332 $ 501
3 Years $ 408 $ 962 $ 1,015 $ 715 $ 870
5 Years $ 707 $ 1,298 $ 1,424 $ 1,224 $ 1,263
10 Years $ 1,556 $ 2,243 $ 2,437 $ 2,624 $ 2,363
ASSUMING NO REDEMPTION
1 Year $ 131 $ 649 $ 232 $ 232 $ 501
3 Years $ 408 $ 962 $ 715 $ 715 $ 870
5 Years $ 707 $ 1,298 $ 1,224 $ 1,224 $ 1,263
10 Years $ 1,556 $ 2,243 $ 2,437 $ 2,624 $ 2,363
QUALITY GROWTH FUND
INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
ASSUMING REDEMPTION
1 Year $ 109 $ 628 $ 710 $ 310 $ 480
3 Years $ 344 $ 901 $ 953 $ 653 $ 809
5 Years $ 599 $ 1,195 $ 1,322 $ 1,122 $ 1,161
10 Years $ 1,327 $ 2,030 $ 2,228 $ 2,420 $ 2,152
ASSUMING NO REDEMPTION
1 Year $ 109 $ 628 $ 210 $ 210 $ 480
3 Years $ 344 $ 901 $ 653 $ 653 $ 809
5 Years $ 599 $ 1,195 $ 1,122 $ 1,122 $ 1,161
10 Years $ 1,327 $ 2,030 $ 2,228 $ 2,420 $ 2,152
QUALITY GROWTH FUND - PRO FORMA INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
ASSUMING REDEMPTION
1 Year $ 109 $ 628 $ 710 $ 310 $ 480
3 Years $ 347 $ 903 $ 955 $ 655 $ 811
5 Years $ 604 $ 1,199 $ 1,326 $ 1,126 $ 1,165
10 Years $ 1,338 $ 2,039 $ 2,237 $ 2,429 $ 2,161
ASSUMING NO REDEMPTION
1 Year $ 109 $ 628 $ 210 $ 210 $ 480
3 Years $ 347 $ 903 $ 655 $ 655 $ 811
5 Years $ 604 $ 1,199 $ 1,126 $ 1,126 $ 1,165
10 Years $ 1,338 $ 2,039 $ 2,237 $ 2,429 $ 2,161
INTERMEDIATE BOND FUND INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
ASSUMING REDEMPTION
1 Year $ 72 $ 567 $ 673 $ 273 $ 443
3 Years $ 254 $ 791 $ 865 $ 565 $ 722
5 Years $ 452 $ 1,034 $ 1,182 $ 982 $ 1,022
10 Years $ 1,024 $ 1,728 $ 1,951 $ 2,148 $ 1,873
ASSUMING NO REDEMPTION
1 Year $ 72 $ 567 $ 173 $ 173 $ 443
3 Years $ 254 $ 791 $ 565 $ 565 $ 722
5 Years $ 452 $ 1,034 $ 982 $ 982 $ 1,022
10 Years $ 1,024 $ 1,728 $ 1,951 $ 2,148 $ 1,873
US GOVERNMENT BOND FUND INSTITUTIONAL CLASS A CLASS C
ASSUMING REDEMPTION
1 Year $ 104 $ 598 $ 305
3 Years $ 324 $ 859 $ 633
5 Years $ 563 $ 1,140 $ 1,088
10 Years $ 1,247 $ 1,937 $ 2,348
ASSUMING NO REDEMPTION
1 Year $ 104 $ 598 $ 205
3 Years $ 324 $ 859 $ 633
5 Years $ 563 $ 1,140 $ 1,088
10 Years $ 1,247 $ 1,937 $ 2,348
BOND FUND
ASSUMING REDEMPTION INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
1 Year $ 74 $ 569 $ 675 $ 275 $ 445
3 Years $ 274 $ 810 $ 884 $ 584 $ 740
5 Years $ 490 $ 1,069 $ 1,219 $ 1,019 $ 1,057
10 Years $ 1,114 $ 1,811 $ 2,032 $ 2,228 $ 1,954
ASSUMING NO REDEMPTION
1 Year $ 74 $ 569 $ 175 $ 175 $ 445
3 Years $ 274 $ 810 $ 584 $ 584 $ 740
5 Years $ 490 $1,069 $ 1,019 $ 1,019 $ 1,057
10 Years $ 1,114 $1,811 $ 2,032 $ 2,228 $ 1,954
BOND FUND - PRO FORMA SCENARIOS 1 & 3
ASSUMING REDEMPTION INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
1 Year $ 69 $ 565 $ 671 $ 271 $ 441
3 Years $ 265 $ 802 $ 876 $ 576 $ 732
5 Years $ 477 $1,057 $ 1,206 $ 1,006 $ 1,045
10 Years $ 1,088 $1,786 $ 2,008 $ 2,204 $ 1,931
ASSUMING NO REDEMPTION
1 Year $ 69 $ 565 $ 171 $ 171 $ 441
3 Years $ 265 $ 802 $ 576 $ 576 $ 732
5 Years $ 477 $1,057 $ 1,006 $ 1,006 $ 1,045
10 Years $ 1,088 $1,786 $ 2,008 $ 2,204 $ 1,931
BOND FUND - PRO FORMA SCENARIO 2
INSTITUTIONAL CLASS A CLASS B CLASS C ADVISOR
EXAMPLE
ASSUMING REDEMPTION
1 Year $ 69 $ 565 $ 671 $ 271 $ 441
3 Years $ 271 $ 808 $ 882 $ 582 $ 738
5 Years $ 490 $1,069 $ 1,219 $ 1,019 $ 1,057
10 Years $ 1,120 $1,816 $ 2,039 $ 2,234 $ 1,960
ASSUMING NO REDEMPTION
1 Year $ 69 $ 565 $ 171 $ 171 $ 441
3 Years $ 271 $ 808 $ 582 $ 582 $ 738
5 Years $ 490 $1,069 $ 1,019 $ 1,019 $ 1,057
10 Years $ 1,120 $1,816 $ 2,039 $ 2,234 $ 1,960
SYNOPSIS
SUMMARY.
- --------
The following is a synopsis of information relating to each proposed transaction
contemplated by the Reorganization Agreements (the "Transactions") and the
corresponding Acquired Funds and Acquiring Funds. This synopsis is qualified by
reference to the disclosure contained in this Combined Prospectus/Proxy
Statement, the Fifth Third Funds' Statement of Additional Information, and the
Appendices attached hereto.
KEY FEATURES OF THE TRANSACTIONS.
- ---------------------------------
The shareholders of each Acquired Fund are being asked to approve Reorganization
Agreements with respect to the Acquired Fund in which they hold shares.
Reorganization Agreements were adopted by the Trustees at a special meeting
convened on August 7, 2007. A form of the Reorganization Agreement is attached
to this Combined Prospectus/Proxy Statement as Appendix A. Each Reorganization
Agreement provides for the transfer of all of the assets of the relevant
Acquired Fund into the corresponding Acquiring Fund. In exchange, the Acquiring
Fund will assume all of the liabilities of the Acquired Fund and, based on the
value of the net assets of the Acquired Fund and the net asset value per share
of the Acquiring Fund, will transfer to the Acquired Funds a number of full and
fractional shares of the designated class of the Acquiring Fund. After receipt
of the Acquiring Fund's shares, the corresponding Acquired Fund will dissolve,
distributing such shares to its shareholders in complete liquidation, and the
Acquired Fund will be terminated.
It is anticipated that, prior to the Exchange Date, each Acquired Fund will
declare a distribution to its shareholders which, together with all previous
distributions, will have the effect of distributing to its shareholders all of
its investment company taxable income (computed without regard to the deduction
for dividends paid), if any, and net realized capital gains, if any, through the
Exchange Date (after reductions for any capital loss carryforward).
At a meeting held on August 7, 2007, the Trustees, including the Independent
Trustees, voted unanimously to approve the proposed Transactions with respect to
each Acquired Fund, subject to approval of a majority of shareholders of the
respective Acquired Funds. The Trustees also voted to recommend that the
shareholders of each Acquired Fund vote to approve the Transaction with respect
to such Fund. Approval of each Transaction requires the affirmative vote of a
majority of votes cast by the outstanding shares of the corresponding Acquired
Fund.
A shareholder of an Acquired Fund objecting to a proposed Transaction is not
entitled, under either Massachusetts law or Fifth Third Funds' Declaration of
Trust, to demand payment for, or an appraisal of, his or her particular shares
if the Transactions are consummated over his or her objection. However, shares
of each Acquired Fund are redeemable for cash at their net asset value, as
described in Appendix B. If you redeem your shares, you may recognize a taxable
gain or loss based on the difference between your tax basis in the shares and
the amount that you receive for them.
In the event that a proposal is not approved by an Acquired Fund's shareholders,
such Acquired Fund will continue to be managed as a separate Fund in accordance
with its current investment objectives and policies, and the Trustees may
consider alternatives in the best interests of the shareholders of such Fund. NO
TRANSACTION IS CONTINGENT ON THE APPROVAL OF ANY OTHER TRANSACTION. If approval
of a Proposal is obtained, the reorganization of the corresponding Acquired Fund
will be consummated as described in Appendix _____.
The proposed Transactions may result in higher than normal portfolio turnover,
which may result in the Funds realizing greater short-term capital gains,
distributions of which are taxable to shareholders as ordinary income.
COMPARISON OF INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND
- ------------------------------------------------------------------------
POLICIES OF THE ACQUIRED AND ACQUIRING FUNDS.
- ---------------------------------------------
Following is a brief comparison of the investment objectives, principal
investment strategies and policies of each Acquired Fund and the corresponding
Acquiring Fund. The following discussion is qualified by reference to the
disclosure on such subjects contained in this Combined Prospectus/Proxy
Statement, the Fifth Third Funds'
Statement of Additional Information, and the Appendices attached hereto. For a
full and detailed description of permitted investments, see such applicable
documents.
PROPOSAL 1:
REORGANIZATION OF THE TECHNOLOGY FUND INTO THE MID CAP GROWTH FUND
INVESTMENT OBJECTIVE.
- ---------------------
The investment objectives of the Funds are fundamental and may not be changed
without the approval of the majority of fund shareholders.
- ----------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY FUND MID CAP GROWTH FUND
--------------- -------------------
- ----------------------------------------------------------------------------------------------------------------------------
The Technology Fund seeks long-term capital appreciation. The Mid Cap Fund seeks capital growth, with income as a
secondary objective.
- ----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES.
- --------------------------------
While the principal investment strategies of the Technology Fund and the Mid Cap
Growth Fund have some similarities, a major difference is that the Technology
Fund concentrates its investments in technology companies, whereas the Mid Cap
Growth Fund does not concentrate its investments in a particular industry.
The chart below further compares the principal investment strategies of the
Funds. For more information on the principal investment strategies of the Mid
Cap Growth Fund, see Appendix B.
- ----------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY FUND MID CAP GROWTH FUND
--------------- -------------------
- ----------------------------------------------------------------------------------------------------------------------------
o Under normal circumstances, the Fund invests at o Under normal circumstances, the Fund invests at
least 80% of its assets in the equity securities of least 80% of its assets in common stocks of mid cap
technology companies. companies, defined as those companies included in the
Russell MidCap Growth Index and companies with similar
o The technology companies in which the Fund typically market capitalizations.
invests include U.S., and, to a lesser extent, foreign
companies. o To achieve its secondary objective of income, the
Fund relies on dividend and interest income. The Fund
o The Fund generally takes a growth approach to may invest up to 20% of its assets in common stocks of
selecting stocks, looking for established companies that large cap companies (many of which pay dividends),
appear poised to grow because of new products, technology small cap companies, convertible securities and debt
or management, as well as new companies that are in the securities that pay interest.
developmental stage. Factors in identifying these
companies include the quality of the management, o The Fund seeks to outperform the Russell MidCap
financial strength, a strong position relative to Growth Index over rolling five-year periods.
competitors and a stock price that appears reasonable
relative to its expected growth rate. o The Advisor uses a combination of fundamental,
momentum and valuation-based disciplines for portfolio
o The Fund may invest in companies of any size, construction, with a particular focus on balance
including small, high-growth companies and also may sheets. Quantitative analysis is used to identify
invest in companies whose shares are being, or recently stocks the Advisor believes have above-average growth
have been, offered to the public for the first time. and strong balance sheets. Factors considered include
returns on assets, price to earnings per share, price
o The Advisor may consider selling one of the Fund's to cash flow, and earnings per share growth. The
holdings when a deterioration in a company's strategic Advisor uses a fundamental analysis of financial
position or growth prospects is detected, an individual statements to look for companies that, in its opinion,
security comprises too large of a position in the have stock prices that do not accurately reflect cash
portfolio, a company's valuations are no longer flows, tangible assets or management skills.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY FUND MID CAP GROWTH FUND
--------------- -------------------
- ----------------------------------------------------------------------------------------------------------------------------
attractive, or a better opportunity arises.
o The Advisor also utilizes a strict sell
o When the Advisor believes that market conditions discipline and may consider selling a security when:
warrant a temporary defensive posture, the Fund may it becomes overvalued or less attractive; there is
invest up to 100% of its assets in high-quality, deterioration in a company's fundamentals, management,
short-term debt securities and money market instruments. or financial reporting; one Fund's holdings has
exceeded the Advisor's position weighting; or a
company's relative strength falls below the advisor's
target.
o The Advisor will look to manage risk through
several strategies, which will typically include
maintaining minimum and maximum sector position
weightings relative to the Russell MidCap Growth Index
and monitoring risk statistics relative to the Russell
MidCap Growth Index.
o When the Advisor believes that market conditions
warrant a temporary defensive posture, the Fund may
invest up to 100% of its assets in high-quality,
short-term debt securities and money market
instruments.
- ----------------------------------------------------------------------------------------------------------------------------
PROPOSAL 2:
REORGANIZATION OF THE INTERMEDIATE BOND FUND INTO THE BOND FUND
INVESTMENT OBJECTIVE.
- ---------------------
The investment objectives of the Funds are fundamental and may not be changed
without the approval of the majority of fund shareholders.
- ----------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE BOND FUND BOND FUND
---------------------- ---------
- ----------------------------------------------------------------------------------------------------------------------------
The Intermediate Bond Fund seeks a high level of current The Bond Fund seeks a high level of current income, with
income. capital growth as a secondary objective.
- ----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES. The principal investment strategies of the
Intermediate Bond Fund and the Bond Fund are similar in that both Funds invest
in investment grade bonds, including U.S. Government bonds, and both Funds also
may invest up to 20% of their respective assets in other securities, such as in
high-yield securities, foreign bonds, and money market instruments.
The chart below further compares the principal investment strategies of the
Funds. For more information on the principal investment strategies of the Bond
Fund, see Appendix B.
- ----------------------------------------------------------------------------------------------------------------------------
INTERMEDIATE BOND FUND BOND FUND
---------------------- ---------
- ----------------------------------------------------------------------------------------------------------------------------
o The Fund invests at least 80% of its assets in bonds o The Fund invests at least 80% of its assets in
under normal market circumstances. The Fund typically bonds under normal market circumstances. The bonds in
invests in the following types of investment-grade bonds: which the Fund invests may include U.S. Government
corporate securities, asset-backed securities, securities and corporate debt securities (rated
mortgage-backed securities, and U.S. Government investment grade), including mortgage-backed
securities. The Fund's dollar-weighted average maturity securities. The Fund generally invests in high
will range from more than three years to less than ten quality bonds.
years.
o The Fund is managed for growth of capital but
o The Fund strives to manage its portfolio so that it with less volatility than a bond fund investing in
lower quality securities. In selecting bond
securities, the Advisor
- ----------------------------------------------------------------------------------------------------------------------------
receives a fairly consistent level of income regardless considers, among other things, the remaining maturity,
of fluctuations in interest rates. Additionally, the the stated interest rate, the price of the security, the
Fund may seek some capital appreciation, especially when financial condition of the issuer, and the issuer's
bond prices are rising, if the Advisor believes that the prospects for long-term growth of earnings and revenues.
Fund can realize such appreciation without foregoing its
objective of high current income. o Although the Advisor considers the Fund to be a
long- maturity bond fund, the Fund has no restrictions
o The Advisor may adjust the Fund's sector weightings on its maturity or duration. The Advisor may, from
and duration to attempt to capture additional returns time to time, shorten or lengthen the duration of the
relative to the Fund's benchmark. Fund's portfolio to protect principal in the event of
rising or falling interest rates.
o When the Advisor believes that market conditions
warrant a temporary defensive posture, the Fund may o The Advisor may adjust the Fund's sector
invest up to 100% of its assets in high-quality, weightings and duration to attempt to capture
short-term debt securities and money market instruments additional returns relative to the Fund's benchmark.
and may shorten its dollar-weighted average maturity
below its normal range. o When the Advisor believes that market conditions
warrant a temporary defensive posture, the Fund may
invest up to 100% of its assets in high-quality,
short-term debt securities and money market
instruments.
- ----------------------------------------------------------------------------------------------------------------------------
PROPOSAL 3:
REORGANIZATION OF THE U.S. GOVERNMENT BOND FUND INTO THE BOND FUND
INVESTMENT OBJECTIVE.
- ---------------------
The investment objectives of the Funds are fundamental and may not be changed
without the approval of the majority of fund shareholders.
- ----------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT BOND FUND BOND FUND
------------------------- ---------
- ----------------------------------------------------------------------------------------------------------------------------
The U.S. Government Bond Fund seeks a high level of current The Bond Fund seeks a high level of current income, with
income, with capital growth as a secondary objective. capital growth as a secondary objective.
- --------------------------------------------------------------- ------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES.
- --------------------------------
The principal investment strategies of the U.S. Government Bond Fund and the
Bond Fund are similar, except that the U.S. Government Bond Fund concentrates
its investments in U.S. Government securities.
The chart below further compares the principal investment strategies of the
Funds. For more information on the principal investment strategies of the Bond
Fund, see Appendix B.
- ----------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT BOND FUND BOND FUND
------------------------- ---------
- ----------------------------------------------------------------------------------------------------------------------------
o Under normal circumstances, the Fund invests at o The Fund invests at least 80% of its assets in
least 80% of its assets in U.S. Government bonds. bonds under normal market circumstances. The bonds in
which the Fund invests may include U.S. Government
o The Fund strives to manage its portfolio so that it securities and corporate debt securities (rated
receives a fairly consistent level of income regardless investment grade), including mortgage-backed
of fluctuations in interest rates. Additionally, the securities. The Fund generally invests in high
Fund may seek some capital appreciation, especially when quality bonds.
bond prices are rising, if the Advisor believes that the
Fund can realize such appreciation without foregoing its o The Fund is managed for growth of capital but
with less volatility than a bond fund investing in
lower quality
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
objective of high current income. securities. In selecting bond securities, the Advisor
considers, among other things, the remaining maturity,
o In selecting portfolio securities, the Fund the stated interest rate, the price of the security, the
generally considers, among other things, stated interest financial condition of the issuer, and the issuer's
rates and the price of a security. The Fund attempts to prospects for long-term growth of earnings and revenues.
limit volatility of Fund share prices by managing the
average life of the Fund's investment portfolio. The Fund o Although the Advisor considers the Fund to be a
seeks to maintain a dollar-weighted average maturity of long- maturity bond fund, the Fund has no restrictions
between two and ten years. on its maturity or duration. The Advisor may, from
time to time, shorten or lengthen the duration of the
o The Advisor may adjust the Fund's sector weightings Fund's portfolio to protect principal in the event of
and duration to attempt to capture additional returns rising or falling interest rates.
relative to the Fund's benchmark.
o The Advisor may adjust the Fund's sector
o When the Advisor believes that market conditions weightings and duration to attempt to capture
warrant a temporary defensive posture, the Fund may additional returns relative to the Fund's benchmark.
invest up to 100% of its assets in high-quality,
short-term debt securities and money market instruments o When the Advisor believes that market conditions
and may shorten its dollar-weighted average maturity warrant a temporary defensive posture, the Fund may
below its normal range. invest up to 100% of its assets in high-quality,
short-term debt securities and money market
instruments.
- ----------------------------------------------------------------------------------------------------------------------------
PROPOSAL 4:
REORGANIZATION OF THE GOVERNMENT MONEY
MARKET FUND INTO THE PRIME MONEY MARKET FUND
INVESTMENT OBJECTIVE.
- ---------------------
The investment objectives of the Funds are fundamental and may not be changed
without the approval of the majority of fund shareholders.
- ----------------------------------------------------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND PRIME MONEY MARKET FUND
---------------------------- -----------------------
- ----------------------------------------------------------------------------------------------------------------------------
The Government Money Market Fund seeks high current income The Prime Money Market Fund seeks the stability of
consistent with stability of principal and liquidity. principal and current income.
- ----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES.
- --------------------------------
The principal investment strategies of the Government Money Market Fund and the
Prime Money Market Fund are similar, although the Government Money Market Fund
concentrates its investments in U.S. Government securities, whereas the Prime
Money Market Fund may invest in corporate securities.
The chart below further compares the principal investment strategies of the
Funds. For more information on the principal investment strategies of the Prime
Money Market Fund, see Appendix B.
- ----------------------------------------------------------------------------------------------------------------------------
GOVERNMENT MONEY MARKET FUND PRIME MONEY MARKET FUND
---------------------------- -----------------------
- ----------------------------------------------------------------------------------------------------------------------------
o The Government Money Market Fund manages its o The Prime Money Market Fund manages its portfolio
portfolio subject to strict SEC guidelines, which are subject to strict SEC guidelines, which are designed
designed so that the Fund may maintain a stable $1.00 per so that the Fund may maintain a stable $1.00 per share
share price, although there is no guarantee that it will price, although there is no guarantee that it will do
do so. All of the Fund's investments are expected to so. All of the Fund's investments are expected to
mature in the short-term (397 days or less), and the mature in the short-term (397 days or less) and the
dollar-weighted average portfolio maturity of the Fund dollar-weighted average portfolio maturity of the Fund
may not exceed
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
may not exceed 90 days. 90 days.
o Under normal circumstances, the Fund invests at o The Fund invests at least 95% of its portfolio in
least 80% of its assets in U.S. Government securities, high-quality securities called "first tier" securities
repurchase agreements collateralized by these securities, or unrated securities that are considered equivalent
and shares of money market investment companies that by the Fund's Advisor. These generally will be
invest exclusively in these securities. domestic or foreign corporate securities, including
commercial paper that, at the time of purchase, are
rated by such firms as Standard & Poor's and Moody's
in their highest short-term major rating categories,
or unrated securities that are considered equivalent
by the Fund's Advisor. They also may include
securities issued or guaranteed as to principal or
interest by the U.S. Treasury or any U.S. Government
agency or instrumentality. Additionally, shares of
money market investment companies that invest
exclusively in these securities may be used.
o The Fund reserves the right to invest up to 5% of
its total assets in "second tier" securities, which
generally are corporate securities that, at the time
of purchase, are rated by such firms as Standard &
Poor's and Moody's in their second highest short-term
major rating categories, or unrated securities that
are considered equivalent by the Fund's Advisor. Some
corporate securities purchased by the Fund may be
restricted securities, that is, they may be subject to
limited resale rights.
o The Fund may also invest in asset-backed
securities and repurchase agreements collateralized by
the securities mentioned above.
- ----------------------------------------------------------------------------------------------------------------------------
PROPOSAL 5:
REORGANIZATION OF THE BALANCED FUND INTO THE QUALITY GROWTH FUND
INVESTMENT OBJECTIVE.
- ---------------------
The investment objectives of the Funds are fundamental and may not be changed
without the approval of the majority of fund shareholders.
- ----------------------------------------------------------------------------------------------------------------------------
BALANCED FUND QUALITY GROWTH FUND
------------- -------------------
- ----------------------------------------------------------------------------------------------------------------------------
The Balanced Fund seeks capital appreciation and income. The Quality Growth Fund seeks growth of capital, with
income as a secondary objective.
- ----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES.
- --------------------------------
The principal investment strategies of the Balanced Fund and the Quality Growth
Fund bear some similarities with respect to investments in growth stocks,
although the Balanced Fund primarily invests in large and medium-sized companies
whereas the Quality Growth Fund tends to invest in smaller companies. Unlike the
Balanced Fund, the Quality Growth Fund does not focus its investments in fixed
income securities and value securities.
The chart below further compares the principal investment strategies of the
Funds. For more information on the principal investment strategies of the
Quality Growth Fund, see Appendix B.
- ----------------------------------------------------------------------------------------------------------------------------
BALANCED FUND QUALITY GROWTH FUND
------------- -------------------
- ----------------------------------------------------------------------------------------------------------------------------
o Under normal circumstances, the Fund uses an asset- o Under normal circumstances, the Fund invests at
allocation strategy, investing between 50% to 75% of its least 65% of total assets in common stocks of growth
net assets in equity securities (including common stocks, companies.
convertible preferred stocks and convertible corporate
bonds), 25% to 40% of its net assets in fixed income o The Advisor considers growth companies to be
securities (including U.S. Treasury bills, notes and those companies that, in the opinion of the Advisor,
bonds, securities of U.S. Government agencies and offer excellent prospects for consistent,
instrumentalities and corporate debt securities, above-average revenue and earnings growth, improving
including mortgage-backed securities), and 0% to 25% of profit trends, and positive investor sentiment coupled
its net assets in money market instruments. By analyzing with solid operating momentum. The Advisor generally
financial trends and market conditions, the Fund may looks for companies with a strong record of earnings
adjust its allocations from time to time based on the growth and considers the company's current ratio of
current, relative attractiveness of stocks versus bonds. debt to capital and the quality of its management.
However, the Fund takes a moderate to long-term view of Most of the companies in which the Fund invests are
changing market conditions, and tends to avoid large, U.S. companies with a market capitalization greater
sudden shifts in the composition of its portfolio. than $3 billion.
o The equity portion of the Fund is comprised of both o To achieve its secondary objective of income, the
growth and value-oriented stocks and is primarily Fund may rely on dividend income that it receives from
invested in large and medium-sized companies that exhibit common stocks and interest income it receives from
strong records of earnings growth and excellent prospects other investments, including convertible securities.
for above-average revenue and earnings growth over the The Fund reserves the right to invest up to 35% of its
next one to three years (such factors include rising total assets in convertible securities which, at the
earnings expectations, new management, new products, and time of investment, are rated investment grade.
restructuring). The Advisor also considers balance-sheet
strength and cash flow, as well as the company's debt o The Fund seeks to outperform the Russell 1000(R)
ratio and the quality of its management to be key Growth Index over rolling five-year periods. The
components in evaluating potential investments. The Advisor believes that stock prices are driven by
Advisor anticipates that most economic sectors will be earnings growth, and that superior returns occur when
represented in this investment style and that the a company experiences rapid and accelerating growth
portfolio will typically contain between 40-60 stocks. due to improving fundamentals.
o The fixed income portion of the Fund tends to be o The Advisor uses a bottom-up investment process
invested in investment grade bonds with maturities with fundamental research providing the basis for
ranging from overnight to thirty years in length. In stock selection. The Advisor uses a combination of
selecting bond securities, the Advisor considers, among fundamental, momentum and valuation-based disciplines
other things, the remaining maturity, the stated interest for portfolio construction, with a particular focus on
rate, the price of the security, as well as the financial strong fundamental growth, better than average
condition of the issuer and its prospects for long-term valuation characteristics, and strong financial
growth of earnings and revenues. condition and characteristics. Factors considered in
identifying companies with strong earnings growth
o The Advisor may consider selling one of the Fund's include the business model, the quality of management,
holdings when a significant deterioration in a company's competitive advantages, the product pipeline, and
strategic position or growth prospects is detected, an financial characteristics. The Advisor uses a
individual security comprises too large of a position in fundamental analysis of financial statements to look
the portfolio, a company's valuations are no longer for companies that, in its opinion, have stock prices
attractive or the Fund has realized its intended profit, that do not accurately reflect cash flows, tangible
or a better opportunity arises. assets or management skills.
o When the Advisor believes that market conditions o The Advisor also utilizes a strict sell
warrant a temporary defensive posture, the Fund may discipline and may consider selling a security when:
invest up to 100% of its assets in high-quality, it becomes overvalued or less attractive; there is
short-term debt securities and money market instruments. deterioration in a company's fundamentals, management,
or financial reporting; one of the Fund's holdings has
exceeded the Advisor's position weighting; or a
company's relative strength falls below the Advisor's
target.
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
o The Advisor will look to manage risk through
several strategies, which will typically include
maintaining minimum and maximum sector and position
weightings relative to the Russell 1000(R) Growth Index
and monitoring risk statistics relative to the Russell
1000(R) Growth Index. The Advisor relies on intensive
research and believes that security selection will be
the main source of active risk.
o When the Advisor believes that market conditions
warrant a temporary defensive posture, the Fund may
invest up to 100% of its assets in high-quality,
short-term debt securities and money market
instruments.
- ----------------------------------------------------------------------------------------------------------------------------
SHAREHOLDER INFORMATION - DISTRIBUTIONS, PURCHASE AND REDEMPTION PROCEDURES AND
- -------------------------------------------------------------------------------
EXCHANGE RIGHTS.
- ----------------
Distribution, purchase and redemption procedures and exchange rights of each
Acquired Fund are identical to those of the corresponding Acquiring Fund. See
Appendix B for further details.
FEDERAL TAX CONSIDERATIONS.
- ---------------------------
For federal income tax purposes, it is intended that each of the Transactions
will qualify as tax-free reorganizations. Accordingly, the Transactions are not
expected to result in the recognition of gain or loss for federal income tax
purposes for any of the Funds or the shareholders of any Fund, and the aggregate
tax basis of the Acquiring Fund shares received by a shareholder of an Acquired
Fund are expected to equal the aggregate tax basis of that shareholder's
Acquired Fund shares. At any time prior to the consummation of the Transactions,
a shareholder may redeem shares, likely resulting in recognition of gain or loss
to such shareholder (other than a shareholder of Government Money Market Fund or
Prime Money Market Fund) for federal income tax purposes.
However, since the Transactions will end the tax year of each Acquired Fund,
they may accelerate distributions from the Acquired Funds to shareholders.
Specifically, each Acquired Fund will recognize any net investment company
taxable income and any net capital gains, including those realized on the
disposition of portfolio securities in connection with the Transactions, in the
short tax year ending on the date of the reorganization, and will declare and
pay a distribution of such income and any such net capital gains (after
reduction by any available capital loss carryforwards) to its shareholders on or
before that date.
A portion of the portfolio assets of each Acquired Fund will be sold in
connection with the Transactions. The actual tax impact of such sales will
depend on the difference between the price at which such portfolio assets are
sold and such Acquired Fund's basis in such assets. Any capital gains recognized
in these sales, if any, will be distributed to such Acquired Fund's shareholders
as capital gain dividends (to the extent of net realized long-term capital gains
distributed) and/or ordinary dividends (to the extent of net realized short-term
capital gains distributed) during or with respect to the year of sale, and such
distributions in general will be taxable to shareholders.
The cost basis and holding period of shares in each Acquired Fund are expected
to carry over to new shares in the respective Acquiring Fund.
For more information about the federal income tax consequences of the
Transactions, see "Information About the Transactions--Federal Income Tax
Consequences" below.
PRINCIPAL RISK FACTORS
PROPOSAL 1:
REORGANIZATION OF THE TECHNOLOGY FUND INTO THE MID CAP GROWTH FUND
COMPARISON OF PRINCIPAL RISKS. Because of its concentration in technology
stocks, the Technology Fund could fluctuate in price more widely and rapidly
than the market as a whole, and could decline in price due to specific sector
developments. The Mid Cap Growth Fund may be considered less risky than the
Technology Fund due to its exposure to equity securities of companies in diverse
sectors.
The chart below further compares the principal risk factors of the Funds. A
description of the various risk factors listed below can be found on page ___.
- ----------------------------------------------------------------------------
TECHNOLOGY FUND MID CAP GROWTH FUND
--------------- -------------------
- ----------------------------------------------------------------------------
o Equity Securities Risk o Equity Securities Risk
o Technology Securities Risk o Medium-Sized Company Risk
o Smaller and Medium-Sized Company Risk o Growth Securities Risk
o Growth Securities Risk o Dividend Investment Risk
o Foreign Investment Risk o Convertible Securities Risk
o Emerging Markets Risk
o IPO Risk
o Turnover Risk
- ---------------------------------------------------------------------------
PROPOSAL 2:
REORGANIZATION OF THE U.S. GOVERNMENT BOND FUND INTO THE BOND FUND
COMPARISON OF PRINCIPAL RISKS. Risks of investing in the U.S. Government Bond
Fund and the Bond Fund include interest rate risk, which is the tendency of bond
prices to fall when interest rates rise, and credit risk, which is the risk of
an issuer defaulting on its obligations of paying principal and interest. There
may be less risk associated with the U.S. Government Bond Fund to the extent
that it invests primarily in U.S. Government bonds.
The chart below further compares the principal risk factors of the Funds. A
description of the various risk factors listed below can be found on page ___.
- --------------------------------------------------------------------------------
U.S. GOVERNMENT BOND FUND BOND FUND
------------------------- ---------
- --------------------------------------------------------------------------------
o Fixed Income Securities Risk o Fixed Income Securities Risk
o Pre-Payment/Call Risk o Pre-Payment/Call Risk
o Turnover Risk o Non-Investment Grade Securities Risk
o Foreign Investment Risk
o Turnover Risk
- --------------------------------------------------------------------------------
PROPOSAL 3:
REORGANIZATION OF THE INTERMEDIATE BOND FUND INTO THE BOND FUND
COMPARISON OF PRINCIPAL RISKS. Risks of investing in the Intermediate Bond Fund
and the Bond Fund include interest rate risk, which is the tendency of bond
prices to fall when interest rates rise, and credit risk, which is the risk of
an issuer defaulting on its obligations of paying principal and interest. The
Intermediate Bond Fund and the Bond Fund may invest up to 20% of their assets in
non-investment grade bonds.
The chart below further compares the principal risk factors of the Funds. A
description of the various risk factors listed below can be found on page ___.
- --------------------------------------------------------------------------------
Intermediate Bond Fund Bond Fund
- --------------------------------------------------------------------------------
o Fixed Income Securities Risk o Fixed Income Securities Risk
o Pre-Payment/Call Risk o Pre-Payment/Call Risk
o Non-Investment Grade Securities Risk o Non-Investment Grade Securities Risk
o Foreign Investment Risk o Foreign Investment Risk
o Turnover Risk o Turnover Risk
- --------------------------------------------------------------------------------
PROPOSAL 4:
REORGANIZATION OF THE BALANCED FUND INTO THE QUALITY GROWTH FUND
COMPARISON OF PRINCIPAL RISKS. The Balanced Fund is exposed to risks associated
with following an asset allocation strategy, such as the risk that the Advisor
will not correctly anticipate the relative performance of the different asset
classes in which the Fund may invest. There may be more risk associated with the
Quality Growth Fund, to the extent that it only invests stocks, whereas the
Balanced Funds invests in stocks and fixed income securities.
The chart below further compares the principal risk factors of the Funds. A
description of the various risk factors listed below can be found on page ___.
- --------------------------------------------------------------------------------
Balanced Fund Quality Growth Fund
- --------------------------------------------------------------------------------
o Equity Securities Risk o Equity Securities Risk
o Management Risk - Asset Allocation Strategy o Dividend Securities Risk
o Large and Medium-Sized Company Risk o Growth Securities Risk
o Fixed Income Securities Risk o Smaller Company Risk
o Credit Risk o Convertible Securities Risk
o Turnover Risk
- --------------------------------------------------------------------------------
PROPOSAL 5:
REORGANIZATION OF THE GOVERNMENT MONEY
MARKET FUND INTO THE PRIME MONEY MARKET FUND
COMPARISON OF PRINCIPAL RISKS. The Government Money Market Fund and the Prime
Money Market Fund are exposed to similar risks, although there may be less risk
associated with the Government Money Market Fund because it concentrates its
investments in U.S. Government securities, whereas the Prime Money Market Fund
generally invests in domestic or foreign corporate securities, exposing the Fund
to increased risk factors associated with those securities.
The chart below further compares the principal risk factors of the Funds. A
description of the various risk factors listed below can be found on page ___.
- ---------------------------------------------------------------------
Government Money Market Fund Prime Money Market Fund
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
o Credit Risk o Credit Risk
o Interest Rate Risk o Interest Rate Risk
o Net Asset Value Risk o Net Asset Value Risk
o Foreign Investment Risk
- ---------------------------------------------------------------------
DESCRIPTION OF FUND RISKS
o EQUITY SECURITIES RISK. The risks of investing in equity securities include
the risk of sudden and unpredictable drops in value or periods of
lackluster performance.
o TECHNOLOGY SECURITIES RISK. Technology stocks tend to:
>> fluctuate in price more widely and rapidly than the market as a whole;
>> underperform other types of stocks or be difficult to sell when the
economy is not robust, during market downturns, or when technology
stocks are out of favor;
>> decline in price due to sector-specific developments;
>> be more vulnerable than most stocks to the obsolescence of existing
technology, expired patents, short product cycles, price competition,
market saturation and new market entrants.
o SMALLER COMPANY RISK. Stocks of smaller companies tend to be volatile and
more sensitive to long-term market declines than stocks of larger
companies, partly because they generally do not have the financial
resources of larger companies.
o SMALLER AND MEDIUM-SIZED COMPANY RISK. To the extent that a Fund invests in
mid cap and small cap stocks, it takes on additional risks. For instance,
mid cap and small cap stocks tend to be less liquid and more volatile than
large cap stocks. Smaller companies tend to be unseasoned issuers with new
products and less experienced management.
o MEDIUM-SIZED COMPANY RISK. Stocks of medium-sized companies can be more
sensitive to long market declines than larger companies, partly because
they generally do not have the financial resources of larger companies.
o LARGE AND MEDIUM-SIZED COMPANY RISK. There are inherent risks to investing
in equity securities of large and medium-sized companies. For instance,
changes in the competitive environment can create business challenges that
may increase the volatility of a specific equity. A company's size, usually
defined by market capitalization, can also create various risks for a Fund.
Larger, more established companies tend to operate in mature markets, which
often are very competitive with less robust growth prospects. Stocks of
mid-sized companies tend to be more volatile and more sensitive to market
declines than stocks of larger companies, partly because they generally do
not have the financial resources of larger companies.
o GROWTH SECURITIES RISK. The prices of most growth stocks are based on
future expectations. As a result, those stocks tend to be more sensitive
than value stocks to negative earnings surprises and changes in internal
growth rates. Growth stocks in particular may underperform during periods
when the market favors value stocks. A Fund's performance may also suffer
if certain stocks do not perform as the portfolio management team expected.
o FOREIGN INVESTMENT RISK. Investments in foreign securities are subject to
special risks in addition to those to which U.S. investments are subject.
These risks include adverse political, economic and social developments,
currency fluctuations, higher transaction costs, delayed settlement, less
stringent investor protection, and fewer accounting and disclosure
standards in some foreign markets. Fluctuations in exchange rates also may
reduce or eliminate gains or create losses. These risks can make foreign
investments more volatile and less liquid than U.S. investments.
o EMERGING MARKETS RISK. The risks associated with foreign investments
usually are higher in emerging markets, such as most countries in Africa,
Asia, Latin America and the Middle East. To the extent that a Fund invests
in those kinds of stocks or in those areas, it will be exposed to the risks
associated with those kinds of investments.
o IPO RISK. To the extent a Fund invests in companies whose shares are being,
or recently have been, offered to the public for the first time, a Fund
takes on additional risks, including risks associated with inexperienced
management, the risk that a liquid secondary trading market may not develop
and risks of greater market volatility often associated with the securities
sold in initial public offerings.
o TURNOVER RISK. Through active trading, a Fund may have a high portfolio
turnover rate, which can mean higher taxable distributions and lower
performance due to increased brokerage costs.
o Dividend Securities Risk. Stocks that pay regular dividends provide
investors some return on their investment, to an extent, supporting a
stock's price, even during periods when prices of equity securities are
falling.
However, dividend-paying stocks, especially those that pay significant
dividends, also tend to appreciate less quickly than stocks of companies in
developing industries, which tend to reinvest profits into research,
development, plant and equipment to accommodate expansion.
o CONVERTIBLE SECURITIES RISK. Prices of convertible securities, which
include bonds and preferred stocks, may be affected by the prices of the
underlying security, which generally is common stock.
o CREDIT RISK. There is a risk of an issuer defaulting on its obligations of
paying principal and interest. Prices of convertible securities, which
include bonds and preferred stocks, may be affected by the price of the
underlying security, which generally is common stock.
o INTEREST RATE RISK. This risk involves the possibility that a Fund's yield
will decrease due to a decrease in interest rates or that the value of the
Fund's investments will decline due to an increase in interest rates.
o FIXED INCOME SECURITIES RISK. The risks of investing in bonds (debt
securities) include INTEREST RATE RISK, which is greater for bonds with
longer maturities, and CREDIT RISK. Generally, the price of a bond moves in
the opposite direction from interest rates. As interest rates fall, the
price of a bond tends to increase. With respect to GSEs such as FHLB,
Sallie-Mae, TVA, Fannie Mae, FFCB and Freddie Mac, although the issuers may
be chartered or sponsored by Acts of Congress, their securities are neither
insured nor guaranteed by the U.S. Treasury and therefore have more issuer
default risk than any direct obligation of the U.S. Treasury.
o PRE-PAYMENT/CALL RISK. The prices of mortgage-backed securities are
affected by changes in interest rates. Although mortgage-backed securities
tend to pay higher interest rates, they also carry additional risk. For
instance, their prices and yields typically assume that the securities will
be redeemed at a given time before maturity. When interest rates fall
substantially, they usually are redeemed early because the underlying
mortgages often are prepaid. The Fund would then have to reinvest the
proceeds it receives because of those redemptions at a lower rate. The
price or yield of mortgage-backed securities also may fall if they are
redeemed after that date.
o NON-INVESTMENT GRADE SECURITIES RISK. High yield, or non-investment grade,
securities (also known as "junk bonds") are those rated below investment
grade by the primary rating agencies (e.g., below BB/Ba by S&P/Moody's) and
are considered speculative. Compared to investment grade debt securities,
non-investment grade debt securities tend to have more volatile prices and
increased price sensitivity to changing interest rates and adverse economic
and business developments. In addition, compared to investments in
investment grade securities, investments in non-investment grade securities
are subject to greater risk of loss due to default or a decline in credit
quality, a greater likelihood that adverse economic or company-specific
events will make the issuer unable to make interest and/or principal
payments, and greater susceptibility to negative market sentiment, leading
to depressed prices and decreased liquidity.
o MANAGEMENT RISK - ASSET ALLOCATION STRATEGY. The Balanced Fund is exposed
to risks associated with following an asset allocation strategy, such as
the risk that the Fund will not correctly anticipate the relative
performance of the different asset classes in which it may invest.
o NET ASSET VALUE RISK. This risk involves the possibility that a Fund will
be unable to meet its goal of a constant $1.00 per share.
INFORMATION ABOUT THE TRANSACTIONS
The following provides information common to all of the proposed Transactions as
well as specific information about the reasons for each Proposal.
ABOUT THE REORGANIZATION AGREEMENTS AND THE SECURITIES.
- -------------------------------------------------------
Each proposed Reorganization Agreement provides that the applicable Acquiring
Fund will acquire all of the assets of the Acquired Fund in exchange for the
assumption by the Acquiring Funds of all of the liabilities of the Acquired Fund
and for shares, all as of the Exchange Date. The following discusses the key
features of all of the Reorganization Agreements and is qualified in its
entirety by the full text of such Reorganization Agreements, a form of which is
attached as Appendix A to this Combined Prospectus/Proxy Statement.
As a result of the Transactions, each Acquired Fund shareholder will receive
that number of full and fractional shares equal in value at the Exchange Date to
the value of the portion of the net assets of the Acquired Fund transferred to
the corresponding Acquiring Fund attributable to the shareholder (based on the
proportion of the outstanding shares of that Acquired Fund owned by the
shareholder as of the valuation time). The portfolio securities of each Acquired
Fund will be valued in accordance with the generally employed valuation
procedures of Fifth Third Funds. It is expected that the reorganizations will be
accounted for as tax-free business combinations.
Immediately following the Exchange Date, each Acquired Fund will distribute pro
rata to its shareholders of record as of the close of business on the Exchange
Date the full and fractional shares received by it, and the Acquired Fund will
be liquidated and dissolved. Such distribution and liquidation will be
accomplished by the establishment of accounts on the share records of the
corresponding Acquiring Fund in the name of the Acquired Fund's shareholders,
each account representing the corresponding number of full and fractional shares
due such shareholder. All Acquired Fund shareholders will receive shares of the
Acquiring Fund that corresponds to the share class that they currently hold
(Advisor, Institutional, Class A, Class B or Class C, as applicable).
The consummation of the Transactions is subject to the conditions set forth in
the Reorganization Agreements. The Reorganization Plans may be terminated and
the Transactions abandoned at any time, before or after approval by the Acquired
Fund's shareholders, prior to the Exchange Date by consent of the Trustees or,
if any condition set forth in the Reorganization Agreement with respect to such
Transaction has not been fulfilled and has not been waived by the party entitled
to its benefits, by such party.
If the Transactions are approved, Acquired Fund shareholders who do not wish to
have their Acquired Fund shares exchanged for shares of the corresponding
Acquiring Fund may redeem their shares prior to consummation of the Transaction.
If you redeem your shares you may recognize a taxable gain or loss based on the
difference between your tax basis in the shares and the amount you received for
them.
Fees and expenses incurred by the Funds as a direct result of the Transactions
contemplated by the Reorganization Agreements, including the costs of proxy
materials, proxy solicitations and legal expenses will be borne by Fifth Third
Asset Management, Inc. ("FTAM"). Fees and expenses not incurred directly in
connection with the consummation of the Transactions will be paid by the party
directly incurring such fees and expenses. Notwithstanding the foregoing, fees
and expenses shall in any event be paid by the party directly incurring such
fees and expenses if and to the extent that payment by FTAM of such fees and
expenses would result in the disqualification of any Fund, as the case may be,
as a "regulated investment company" within the meaning of Section 851 of the
Internal Revenue Code of 1986, as amended (the "Code").
The Board has determined that the interests of the existing shareholders of each
Acquired Fund will not be diluted as a result of the Transaction proposed for
such Acquired Fund. Full and fractional shares will be issued to each Acquired
Fund's shareholders in accordance with the procedure under the Reorganization
Agreement as described above. Shares of each Acquiring Fund, when delivered to
each Acquired Fund, will be duly authorized and, upon such delivery (i) will be
validly issued and fully paid and nonassessable by Fifth Third Funds and (ii) no
shareholder of Fifth Third Funds will have any preemptive right to subscription
or purchase in respect thereof.
Fifth Third Funds' Declaration of Trust permits the Trustees to divide the
shares of any series, without shareholder approval, into two or more classes of
shares having such variations as to dividend, redemption, and voting rights, net
asset values, expenses borne by the classes, and other matters as the Trustees
have authorized, provided that each share of a class shall represent an equal
proportionate interest in the assets and liabilities of the class with each
other share of the same class, none having priority or preference over another.
Shares of the Technology Fund, Mid Cap Growth Fund, Intermediate Bond Fund, Bond
Fund, Balanced Fund, Quality Growth Fund and Prime Money Market Fund of the
Fifth Third Funds currently are divided into five classes: Advisor,
Institutional, Class A, Class B(1) and Class C. Shares of the U.S. Government
Bond Fund currently are divided into three classes: Institutional, Class A and
Class C. Shares of the Government Money Market Fund are divided into two
classes: Institutional and Class A. Upon consummation of each of the proposed
Transactions, Acquired Fund shareholders holding Advisor, Institutional, Class
A, Class B or Class C shares will receive corresponding Advisor, Institutional,
Class A, Class B or Class C shares of the Acquiring Fund.
Under Massachusetts law, Fifth Third Funds' shareholders, could, under certain
circumstances, be held personally liable for the obligations of Fifth Third
Funds. However, the Declaration of Trust disclaims shareholder liability for
acts or obligations of Fifth Third Funds and provides for indemnification out of
Fifth Third Funds' property for all loss and expense of any shareholder held
personally liable for such obligations. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which Fifth Third Funds would be unable to meet its
obligations. The likelihood of such circumstances is remote.
REASONS FOR THE PROPOSED REORGANIZATIONS.
- -----------------------------------------
A meeting of the Fifth Third Funds Trustees was held on August 7, 2007, at which
meeting all of the Trustees, including the Independent Trustees, unanimously
determined that each Transaction would be in the best interests of existing
shareholders of each of the Acquired Funds and the Acquiring Funds and that the
economic interests of such shareholders would not be diluted as a result of
effecting each Transaction. At this same meeting, all of the Trustees, including
the Independent Trustees, unanimously adopted the Reorganization Agreements and
recommended that shareholders of each Acquired Fund approve the Transactions.
ALL PROPOSALS
In electing to approve and recommend each proposed Transaction to shareholders
of the relevant Acquired Fund and in determining that each Transaction would be
in the best interests of such Acquired Fund, the Trustees, who were represented
by independent counsel, acted upon information provided to them by FTAM. FTAM
made a presentation to the Trustees at the meeting held on August 7, 2007, in
which FTAM indicated that the proposed Transactions were the result of a
strategic review. FTAM indicated that its strategic review had focused on the
impact of each proposed Transaction on the respective Funds' shareholders based
on a review of (i) current and future demand; (ii) performance; (iii) portfolio
managers' investment competencies; (iv) tax consequences; (v) the strategic fit
of each Fund in the overall Fund family; and (vi) the level of expected ongoing
expense ratios.
Specifically, the Trustees considered the following factors, among other things,
with respect to each of the Transactions:
(1) THE PROPOSED TRANSACTION WOULD LIKELY ENABLE THE ACQUIRED FUND TO
ACHIEVE INVESTMENT MANAGEMENT EFFICIENCIES AND ECONOMIES OF SCALE AND
TO BETTER UTILIZE RESOURCES;
With respect to each Acquired Fund, the Trustees considered the
information presented by FTAM demonstrating a lack of adequate
shareholder demand for the Acquired Fund and declining net assets. The
Trustees also considered that economies of scale would be achieved due
to the larger asset size of each Acquiring Fund following each
Transaction.
(2) ALL SHAREHOLDER SERVICES CURRENTLY PROVIDED TO SHAREHOLDERS OF THE
ACQUIRED FUNDS WOULD CONTINUE TO BE PROVIDED AND, AFTER TAKING INTO
ACCOUNT FTAM'S PLANS FOR ELIMINATING THE VOLUNTARY EXPENSE
- ----------
(1) Class B shares of the Funds were closed to all purchases as of May 2, 2007.
WAIVERS, THE NET TOTAL EXPENSE RATIO OF EACH ACQUIRING FUND WOULD BE
LOWER THAN THE NET TOTAL EXPENSE RATIO OF THE RESPECTIVE ACQUIRED
FUND;
The Trustees were informed that the shareholder services provided to
the shareholders of the Acquired Funds would remain the same if the
proposed Transactions are approved. The Trustees also reviewed data
provided by FTAM indicating that, with respect to each merger, the net
total expense ratio of each Acquiring Fund following the merger would
be lower than the net total expense ratio of the respective Acquired
Fund, as described more fully below.
(3) MERGER EXPENSES WILL BE PAID BY FTAM;
The Trustees noted that the direct fees and expenses incurred by the
Acquired Funds, the Acquiring Funds and/or FTAM directly in connection
with the consummation of the proposed Transactions will be borne by
FTAM, including the costs of proxy materials, proxy solicitations and
legal expenses.
(4) THE TRANSACTIONS ARE NOT EXPECTED TO RESULT IN A RECOGNITION OF ANY
GAIN OR LOSS FOR FEDERAL INCOME TAX PURPOSES;
The Fifth Third Funds' Trustees were informed that the proposed
Transactions involving the Acquired Funds and the Acquiring Funds
would occur only if it could be accomplished without resulting in the
imposition of federal income taxes on the Acquired Funds, Acquiring
Funds or any of their shareholders as a direct result of the
Transaction.
(5) THE LIKELY INDIRECT TAX EFFECTS OF THE TRANSACTIONS SHOULD NOT HAVE A
SIGNIFICANT EFFECT ON ACQUIRED FUNDS' SHAREHOLDERS;
The Trustees concluded that based on the relative tax situations of
each of the Acquired and Acquiring Funds (including limitations
resulting from the Transactions on the use of realized losses to
offset future gains), the likely tax effects of the Transactions on
shareholders should not be seen, in light of all the aspects of the
proposed Transactions, as having a significant effect on the Acquired
Funds' shareholders' interests.
(6) THE ECONOMIC INTERESTS OF SHAREHOLDERS WILL NOT BE DILUTED AS A RESULT
OF THE PROPOSED TRANSACTIONS; AND
The Trustees were informed that none of the Acquired Funds' or the
Acquiring Funds' shareholders interests would be diluted as a result
of the proposed Transactions, and that each of the respective Acquired
Funds' shareholders would receive, in the aggregate, shares of the
respective Acquiring Funds equal in value to the market value of the
assets of each of the Acquired Funds.
(7) FTAM RECOMMENDED THAT EACH PROPOSED TRANSACTION BE APPROVED.
PROPOSAL 1:
REORGANIZATION OF THE TECHNOLOGY FUND INTO THE MID CAP GROWTH FUND
In addition to the factors discussed above, with respect to the reorganization
of the Technology Fund into the Mid Cap Growth Fund (the "Technology Fund
Merger"), the Trustees considered the following factors, among other things, in
concluding that participation in the proposed Technology Fund Merger is in the
best interests of the Technology Fund, the Mid Cap Growth Fund and their
respective existing shareholders:
(1) THE LACK OF ADEQUATE SHAREHOLDER DEMAND AND THE FAILURE TO ACCUMULATE
ASSETS EXPERIENCED BY THE TECHNOLOGY FUND OVER THE PAST TWO YEARS;
FTAM provided the Trustees with information showing a substantial
decrease in net assets and net sales of the Technology Fund over the
past three years. The Trustees took into consideration the fact that
the merger is expected to result in greater investment leverage and
market presence for the Technology Fund. In addition, former
Technology Fund shareholders are expected to benefit
from the resulting economies of scale attributable to the fact that
the Fund's fixed costs and expenses will be spread across the larger
asset size of the Mid Cap Growth Fund.
(2) THE SIMILARITY OF THE INVESTMENT OBJECTIVE OF THE MID CAP GROWTH FUND
WITH THAT OF THE TECHNOLOGY FUND;
The Trustees reviewed and compared information provided by FTAM with
respect to the fundamental investment objectives, strategies, risks
and investment portfolios of the Mid Cap Growth Fund and the
Technology Fund. As discussed under the section above titled
"Synopsis," the Technology Fund and the Mid Cap Growth Fund have
similar fundamental investment objectives. The Trustees also
considered the principal investment strategies of the Technology Fund
and the Mid Cap Growth Fund, noting the primary difference in the
Technology Fund's concentration on investments in securities of
technology companies, whereas the Mid Cap Growth Fund does not
concentrate its investments in a particular industry. The Trustees
also reviewed and compared the principal risks of the Technology Fund
and the Mid Cap Growth Fund and noted that the Mid Cap Growth Fund may
be considered less risky due to its exposure to equity securities of
companies in a variety of sectors.
The Trustees also considered the overlap in the portfolio compositions
of the Technology Fund and the Mid Cap Growth Fund. FTAM presented
information showing, and the Trustees independently came to the
conclusion, that the objective of the Technology Fund is similar to
that of the Mid Cap Growth Fund, and that the strategies, restrictions
and investment portfolios of the Mid Cap Growth Fund had some overlap
with those of the Technology Fund and that any difference would be
explained to shareholders in the combined prospectus/proxy statement.
(3) THE QUALIFICATIONS AND EXPERIENCE OF FTAM AND THE PORTFOLIO MANAGERS
FOR THE MID CAP GROWTH FUND, AND THE PERFORMANCE HISTORY OF THE
TECHNOLOGY FUND AND THE MID CAP GROWTH FUND;
The Trustees considered the fact that the proposed Technology Fund
Merger will allow investment management to remain in the current
investment adviser, FTAM, under the direction of (i) Scott A.
Billeadeau, a portfolio manager of the Mid Cap Growth Fund since June
2003 and of the Technology Fund since November 2003; (ii) Martin E.
Hargrave, a portfolio manager of the Mid Cap Growth Fund since
February 2005; (iii) David R. Luebke, a portfolio manager of the Mid
Cap Growth Fund since August 2006; and (iv) Jill A. Thompson, a
portfolio manager of the Mid Cap Growth Fund since August 2006. The
Trustees considered the benefits that this arrangement will provide to
shareholders of the Technology Fund, including the portfolio managers'
collective expertise.
Furthermore, the Trustees reviewed and compared the performance
history of the Mid Cap Growth Fund and the Technology Fund and noted
that the Mid Cap Growth Fund had outperformed the Technology Fund
during the previous one- and three-year periods and since the Funds'
inceptions.
(4) THE CONTRACTUAL AND NET TOTAL EXPENSE RATIOS OF THE MID CAP GROWTH
FUND AS COMPARED TO THE TECHNOLOGY FUND;
The Trustees noted that the Technology Fund's contractual and net
total expense ratios were higher than the contractual and net total
expense ratios of the Mid Cap Growth Fund with respect to each share
class. The Trustees determined that Technology Fund shareholders would
benefit from the lower contractual and net total expense ratios of the
Mid Cap Growth Fund after the reorganization.
(5) The fact that the potential benefits of the Technology Fund Merger,
including increased economies of scale and reduced expenses, are
expected to outweigh any negative potential direct or indirect
consequences of the Technology Fund Merger, including direct or
indirect federal income tax consequences, to the shareholders of the
Technology Fund.
PROPOSAL 2:
REORGANIZATION OF THE INTERMEDIATE BOND FUND INTO THE BOND FUND
With respect to the merger of the Intermediate Bond Fund into the Bond Fund (the
"Intermediate Bond Fund Merger"), the Trustees considered the factors listed
below, among other things, in concluding that participation in the proposed
Intermediate Bond Fund Merger is in the best interests of the Intermediate Bond
Fund, the Bond Fund and their respective existing shareholders. The Trustees
noted that the Intermediate Bond Fund Merger is not contingent on the approval
of the merger of the U.S. Government Bond Fund into the Bond Fund.
(1) THE LACK OF ADEQUATE SHAREHOLDER DEMAND AND THE FAILURE TO
ACCUMULATE ASSETS EXPERIENCED BY THE INTERMEDIATE BOND FUND OVER
THE PAST TWO YEARS;
The Trustees noted a decrease in the net assets of the
Intermediate Bond Fund over the last two years. The Trustees also
noted negative net sales during each of the Fund's previous one-,
three-and five-year periods. The Trustees considered the
increased industry competition in the bond market arena which
included alternative investment vehicles.
(2) THE SIMILARITY OF THE OBJECTIVES, STRATEGIES, AND RISKS OF THE
INTERMEDIATE BOND FUND AND THE BOND FUND;
The Trustees reviewed and compared the fundamental investment
objectives, strategies, risks and investment portfolios of the
Intermediate Bond Fund and the Bond Fund. The Intermediate Bond
Fund and the Bond Fund have similar fundamental investment
objectives, as the fundamental investment objective of both Funds
is a high level of current income, although the Bond Fund has
growth as a secondary objective. In addition, the principal
investment strategies of the Intermediate Bond Fund and the Bond
Fund are similar in that both Funds invest in investment- grade
bonds, including U.S. Government bonds. The Trustees also
reviewed information provided by FTAM and compared the principal
risks of the Intermediate Bond Fund and the Bond Fund, noting
that both Funds are subject to interest rate risk and credit risk
and that both Funds may invest up to 20% of their assets in
non-investment grade bonds, such as high-yield securities,
foreign bonds and money market instruments. The Trustees also
considered the similar portfolio compositions of the Intermediate
Bond Fund and the Bond Fund.
FTAM presented information showing, and the Trustees
independently came to the conclusion that the objectives,
strategies, restrictions and investment portfolios of the
Intermediate Bond Fund are similar to those of the Bond Fund.
(3) THE QUALIFICATIONS AND EXPERIENCE OF FTAM AND THE PORTFOLIO
MANAGERS FOR THE BOND FUND, AND THE PERFORMANCE HISTORY OF THE
INTERMEDIATE BOND FUND AND THE BOND FUND;
The proposed Intermediate Bond Fund Merger will allow investment
management to remain in the current investment adviser, FTAM,
under the direction of (i) John L. Cassady, a portfolio manager
of the Bond Fund and the Intermediate Bond Fund since November
1999; (ii) Mirko M. Mikelic, a portfolio manager of the Bond Fund
since April 2005; (iii) Christian L. Rieddle, a portfolio manager
of the Bond Fund and the Intermediate Bond Fund since March 2003;
and (iv) Mitchell L. Stapley, a portfolio manager of the Bond
Fund since March 1995 and of the Intermediate Bond Fund since
November 1992. The Trustees considered the benefits that this
arrangement will provide to shareholders of the Intermediate Bond
Fund, including the portfolio managers' collective expertise.
FTAM presented information that compared the performance history
of the Bond Fund and the Intermediate Bond Fund. It was noted
that the Bond Fund had outperformed the Intermediate Bond Fund
during the previous three-, five- and ten-year periods. The
Trustees noted that the Intermediate Bond Fund had slightly
outperformed the Bond Fund during the previous one-year period,
but concluded that the Bond Fund's overall performance generally
compares favorably to the performance history of the Intermediate
Bond Fund. FTAM also presented, and the Trustees reviewed,
information regarding the average credit quality of each of the
Funds. The Trustees considered that the Intermediate Bond Fund
has a slightly lower credit quality than the Bond
Fund, and FTAM advised the Trustees that the Fund's slightly
lower credit rating was due to the broader and more diversified
mix of bonds held by the Fund.
(4) THE CONTRACTUAL AND NET TOTAL EXPENSE RATIOS OF THE BOND FUND AS
COMPARED TO THE INTERMEDIATE BOND FUND;
FTAM presented information regarding contractual and net total
expense ratios of the Intermediate Bond Fund and the Bond Fund
and the projected post-merger total expense ratio for the Bond
Fund, which included a contractual one-year fee waiver. While
information regarding projected total expense ratios demonstrated
that the projected contractual total expense ratios of the
post-merger Fund generally were higher than the current
contractual total expense ratios of the Intermediate Bond Fund,
the Trustees considered that FTAM had represented that a
contractual one-year fee waiver would be put in place for the
Bond Fund. Such waiver would represent a reduction in net total
expenses even compared to the Intermediate Bond Fund's current
net total expense ratios. Based on the foregoing, the Trustees
concluded that Intermediate Bond Fund shareholders would benefit
from a lower net total expense ratio if the Intermediate Bond
Fund Merger was consummated.
(5) The fact that the potential benefits of the Intermediate Bond
Fund Merger are expected to outweigh any negative potential
direct or indirect consequences of the Intermediate Bond Fund
Merger, including direct or indirect federal income tax
consequences, to the shareholders of the Intermediate Bond Fund.
PROPOSAL 3:
REORGANIZATION OF THE U.S. GOVERNMENT BOND FUND INTO THE BOND FUND
With respect to the merger of the U.S. Government Bond Fund into the Bond Fund
(the "U.S. Government Bond Fund Merger"), the Trustees considered the factors
listed below, among other things, in concluding that participation in the
proposed U.S. Government Bond Fund Merger is in the best interests of the U.S.
Government Bond Fund, the Bond Fund and their respective existing shareholders.
The Trustees noted that the U.S. Government Bond Fund Merger is not contingent
on the approval of the merger of the Intermediate Bond Fund into the Bond Fund.
(1) THE LACK OF ADEQUATE SHAREHOLDER DEMAND AND THE FAILURE TO
ACCUMULATE ASSETS EXPERIENCED BY THE U.S. GOVERNMENT BOND FUND
OVER THE PAST TWO YEARS;
FTAM provided the Trustees with information showing a decrease in
net assets and net sales of the U.S. Government Bond Fund over
the past three years. The Trustees took into consideration the
fact that the merger is expected to result in greater investment
leverage and market presence for the former U.S. Government Bond
Fund. In addition, former U.S. Government Bond Fund shareholders
are expected to benefit from the resulting economies of scale
attributable to the fact that the Fund's fixed costs and expenses
will be spread across the larger asset size of the Bond Fund.
The Trustees also considered the increased industry competition
in the bond market arena which included alternative investment
vehicles.
(2) THE SIMILARITIES BETWEEN THE INVESTMENT OBJECTIVES AND STRATEGIES
OF THE U.S. GOVERNMENT BOND FUND AND THE BOND FUND;
The Trustees reviewed and compared the fundamental investment
objectives, strategies, risks and investment portfolios of the
U.S. Government Bond Fund and the Bond Fund, including the Funds'
identical fundamental investment objectives. The principal
investment strategies of the U.S. Government Bond Fund and the
Bond Fund are similar except that the U.S. Government Bond Fund
concentrates its investments in U.S. Government securities. The
Trustees reviewed and compared the principal risks of the U.S.
Government Bond Fund and the Bond Fund, noting that both Funds
are subject to interest rate risk and credit risk, as described
more fully in the section above titled "Principal Risk Factors."
The Trustees also considered the Bond Fund's
ability to invest in a higher percentage of non-investment grade
bonds and noted that there was more risk associated with an
investment in the Bond Fund.
FTAM presented information showing, and the Trustees
independently came to the conclusion that the objectives,
strategies, restrictions and investment portfolios of the U.S.
Government Bond Fund are similar to those of the Bond Fund.
(3) THE QUALIFICATIONS AND EXPERIENCE OF FTAM AND THE PORTFOLIO
MANAGERS FOR THE BOND FUND, AND THE PERFORMANCE HISTORY OF THE
U.S. GOVERNMENT BOND FUND AND THE BOND FUND;
The proposed merger will allow investment management to remain in
the current investment adviser, FTAM, under the direction of (i)
John L. Cassady, a portfolio manager of the Bond Fund since
November 1999 and of the U.S. Government Bond Fund since October
2001; (ii) Mirko M. Mikelic, a portfolio manager of the Bond Fund
since April 2005 and of the U.S. Government Bond Fund since
November 2004; (iii) Christian L. Rieddle, a portfolio manager of
the Bond Fund and the U.S. Government Bond Fund since March 2003;
and (iv) Mitchell L. Stapley, a portfolio manager of the Bond
Fund since March 1995 and of the U.S. Government Bond Fund since
October 2001. The Trustees considered the benefits that this
arrangement will provide to shareholders of the U.S. Government
Bond Fund, including the portfolio managers' collective
expertise.
The Trustees reviewed and compared the performance history of the
Bond Fund and the U.S. Government Bond Fund. It was noted that
the Bond Fund has consistently outperformed the U.S. Government
Bond Fund over the previous one-, three-, five- and ten-year
periods and since the inception of the Funds. FTAM also
presented, and the Trustees reviewed, information regarding the
average credit quality of each of the Funds.
(4) THE CONTRACTUAL AND NET TOTAL EXPENSE RATIOS OF THE BOND FUND AS
COMPARED TO THE U.S. GOVERNMENT BOND FUND;
The Trustees considered the contractual and net total expense
ratios of the U.S. Government Bond Fund and the Bond Fund,
noting that the current net total expense ratio of the Bond
Fund was lower than the net total expense ratio of the U.S.
Government Bond Fund with respect to Class A and Class C
shares, and higher than the net total expense ratio of the
U.S. Government Bond Fund with respect to Institutional class
shares. The Trustees considered FTAM's representation that
voluntary fee waivers that were in place with respect to the
U.S. Government Bond Fund would not continue and that the
contractual total expense ratio of the U.S. Government Fund
was higher than the net total expense ratio of the Bond Fund
with respect to Institutional shares. In addition, the
Trustees considered FTAM's representation that a contractual
one-year fee waiver would be put in place for the Bond Fund,
which even compared to the U.S. Government Bond Fund's current
net total expense ratio, represented a decrease. Based on the
foregoing, the Trustees concluded that U.S. Government Bond
Fund shareholders would benefit from a lower total expense
ratio if the U.S. Government Bond Fund Merger was consummated.
(5) The fact that the potential benefits of the U.S. Government Bond
Fund Merger are expected to outweigh any negative potential
direct or indirect consequences of the U.S. Government Bond Fund
Merger, including direct or indirect federal income tax
consequences, to the shareholders of the U.S. Government Bond
Fund.
PROPOSAL 4:
REORGANIZATION OF THE GOVERNMENT MONEY
MARKET FUND INTO THE PRIME MONEY MARKET FUND
With respect to the merger of the Government Money Market Fund into the Prime
Money Market Fund (the "Government Money Market Fund Merger"), the Trustees
considered the following factors, among other things, in concluding that
participation in the proposed Government Money Market Fund Merger is in the best
interests of the Government Money Market Fund, the Prime Money Market Fund and
their respective existing shareholders:
(1) THE LACK OF ADEQUATE SHAREHOLDER DEMAND AND THE FAILURE TO
ACCUMULATE ASSETS EXPERIENCED BY THE GOVERNMENT MONEY MARKET FUND
OVER THE PAST TWO YEARS;
The Trustees noted little to no asset growth over the past two
years with respect to the Government Money Market Fund.
(2) THE SIMILARITY OF THE STRATEGIES AND RISKS OF THE PRIME MONEY
MARKET FUND AND THE GOVERNMENT MONEY MARKET FUND;
The Trustees reviewed and compared the fundamental investment
objectives, strategies, risks and investment portfolios of the
Prime Money Market Fund with those of the Government Money Market
Fund. The Trustees noted the differences between the fundamental
investment objective of the Prime Money Market Fund (i.e.,
Current income consistent with stability of principal) with that
of the Government Money Market Fund (i.e., High current income
consistent with stability of principal and liquidity). The
Trustees noted that the investment strategies of the Funds are
similar, but the Government Money Market Fund concentrates its
investments in U.S. Government securities, whereas the Prime
Money Market Fund may invest in corporate securities.
Accordingly, the Trustees considered that there may be less risk
associated with the Government Money Market Fund, which
concentrates its investments in U.S. Government securities,
whereas the Prime Money Market Fund generally invests in domestic
or foreign corporate securities, exposing the Fund to increased
risk factors associated with those securities.
FTAM presented information showing, and the Trustees
independently came to the conclusion, that the objectives,
strategies, restrictions and investment portfolios of the
Government Money Market Fund are similar to those of the Prime
Money Market Fund.
(3) THE QUALIFICATIONS AND EXPERIENCE OF FTAM AND THE PORTFOLIO
MANAGER FOR THE PRIME MONEY MARKET FUND, AND THE PERFORMANCE
HISTORY OF THE GOVERNMENT MONEY MARKET FUND AND THE PRIME MONEY
MARKET FUND;
The proposed merger will allow investment management to remain in
the current investment adviser, FTAM. The Trustees considered the
benefits that this arrangement will provide to shareholders of
the Government Money Market Fund, including the managers'
collective expertise.
The Trustees reviewed and compared the performance history of the
Government Money Market Fund and the Prime Money Market Fund. It
was noted that the Prime Money Market Fund had produced slightly
higher returns for the previous one-, three-, five- and ten-year
periods and since the inception of the Funds.
(4) THE CONTRACTUAL AND NET TOTAL EXPENSE RATIOS OF THE PRIME MONEY
MARKET FUND AS COMPARED TO THE GOVERNMENT MONEY MARKET FUND;
The Trustees reviewed contractual and net total expense ratios
for the Government Money Market Fund and the Prime Money Market
Fund and noted that Government Money Market Fund Institutional
shareholders would benefit from a lower net total expense ratio
as a result of the Government Money Market Fund Merger. The
Trustees noted that the net total expense ratio of class A shares
of the Government Money Market Fund was higher than the net total
expense ratio of class A shares of the Prime Money Market Fund
but considered that the contractual total expense ratio of the
Government Money Market Fund was slightly higher and that FTAM
had represented that voluntary fee waivers with respect to the
Government Money Market Fund would not continue.
(5) The fact that the potential benefits of the Government Money
Market Fund Merger are expected to outweigh any negative
potential direct or indirect consequences of the Government Money
Market Fund Merger, including direct or indirect federal income
tax consequences, to the shareholders of the Government Money
Market Fund.
PROPOSAL 5:
REORGANIZATION OF THE BALANCED FUND INTO THE QUALITY GROWTH FUND
With respect to the merger of the Balanced Fund into the Quality Growth Fund
(the "Balanced Fund Merger"), the Trustees considered the following factors,
among other things, in concluding that participation in the proposed Balanced
Fund Merger is in the best interests of the Balanced Fund, the Quality Growth
Fund and their respective existing shareholders:
(1) THE LACK OF ADEQUATE SHAREHOLDER DEMAND AND THE FAILURE TO
ACCUMULATE ASSETS EXPERIENCED BY THE BALANCED FUND OVER THE PAST
TWO YEARS;
The Trustees noted a significant decrease the in net assets of
the Balanced Fund over the past two years. The Trustees also
noted that the Fund had experienced negative net sales during
each of the previous one-, three-and five-year periods, along
with declining gross sales during the same periods.
(2) THE SIMILARITY OF THE EQUITY HOLDINGS OF THE BALANCED FUND AND
THE QUALITY GROWTH FUND;
The Trustees reviewed and compared the fundamental investment
objectives, strategies, risks and investment portfolios of the
Balanced Fund and the Quality Growth Fund. The Trustees noted the
differences between the fundamental investment objective of the
Balanced Fund (i.e., Long-term capital appreciation) with that of
the Quality Growth Fund (i.e., Growth of capital, with income as
a secondary objective). However, the Trustees also considered
that one of the portfolio managers of the Quality Growth Fund
also is the portfolio manager for the equity portion of the
Balanced Fund and that the Funds have significant overlap with
respect to equity holdings. The Trustees considered that the
principal investment strategies of the Balanced Fund and the
Quality Growth Fund bear some similarities with respect to the
Funds' investments in growth stocks; however, the Trustees also
considered that the Quality Growth Fund, unlike the Balanced
Fund, does not typically invest in fixed income securities and
value stocks. The Trustees also reviewed and compared the risks
associated with each of the Funds, noting that the Balanced Fund
was considered to have less exposure to risk because it invests
in fixed income securities as well as stocks.
(3) THE QUALIFICATIONS AND EXPERIENCE OF FTAM AND THE PORTFOLIO
MANAGER FOR THE QUALITY GROWTH FUND, AND THE PERFORMANCE HISTORY
OF THE BALANCED FUND AND THE QUALITY GROWTH FUND;
The Trustees reviewed and compared the performance history of the
Balanced Fund and the Quality Growth Fund. It was noted that the
Quality Growth Fund had outperformed the Balanced Fund over the
previous, one-, three- and five-year periods and since the
inception of the Funds.
The Trustees also considered that the proposed Balanced Fund
Merger will allow investment management to remain in the current
investment adviser, FTAM, under the direction of (i) Amy Denn, a
portfolio manager of the Balanced Fund (equity portion) and of
the Quality Growth Fund since November 2006; and (ii) Jon Fisher,
a portfolio manager of the Quality Growth Fund since October
2007. The Trustees considered the benefits that this arrangement
will provide to shareholders of the Balanced Fund, including the
portfolio managers' collective expertise.
(4) THE CONTRACTUAL AND NET TOTAL EXPENSE RATIOS OF THE QUALITY
GROWTH FUND AS COMPARED TO THE BALANCED FUND;
The Trustees compared contractual and net total expense ratios of
the Balanced Fund and the Quality Growth Fund and noted that the
net total expense ratio of the Quality Growth Fund was higher
than the current net total expense ratio of the Balanced Fund
with respect to each share class. The Trustees noted, however,
that the contractual total expense ratio of the Balanced Fund was
higher than the net total expense ratio of the Quality Growth
Fund with respect to each share class and that FTAM had
represented that voluntary fee waivers with respect to the
Balanced Fund would not continue.
(5) The fact that the potential benefits of the Balanced Fund Merger
are expected to outweigh any negative potential direct or
indirect consequences of the Balanced Fund Merger, including
direct or indirect federal income tax consequences, to the
shareholders of the Balanced Fund.
FEDERAL INCOME TAX CONSEQUENCES.
- --------------------------------
The Transactions are intended to be tax-free reorganizations under Section
368(a) of the Code. As a condition to the relevant Funds' obligations to
consummate the applicable Transaction, the Funds will receive an opinion from
Ropes & Gray LLP, counsel to the Funds, with respect to such Transaction, in a
form reasonably acceptable to such Funds, to the effect that, although not free
from doubt, on the basis of the existing provisions of the Code, the Treasury
Regulations promulgated thereunder, current administrative rules, and court
decisions, generally for federal income tax purposes, except as noted below: (i)
such Transaction will constitute a reorganization within the meaning of Section
368(a) of the Code, and the Acquired Fund and the Acquiring Fund will each be a
"party to a reorganization" within the meaning of Section 368(b) of the Code;
(ii) under Section 1032 of the Code, no gain or loss will be recognized by the
Acquiring Fund upon the receipt of the assets of the Acquired Fund in exchange
for Acquiring Fund shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund; (iii) under Section 362(b) of the Code the
basis in the hands of the Acquiring Fund of the assets of the Acquired Fund
transferred to the Acquiring Fund in the Transaction will be the same as the
basis of such assets in the hands of the Acquired Fund immediately prior to the
transfer; (iv) under Section 1223(2) of the Code, the holding periods of the
assets of the Acquired Fund in the hands of the Acquiring Fund will include the
periods during which such assets were held by the Acquired Fund; (v) under
Section 361 of the Code, no gain or loss will be recognized by the Acquired Fund
upon the transfer of the Acquired Fund's assets to the Acquiring Fund in
exchange for Acquiring Fund shares and the assumption by the Acquiring Fund of
the liabilities of the Acquired Fund, or upon the distribution of Acquiring Fund
shares by the Acquired Fund to its shareholders in liquidation; (vi) under
Section 354 of the Code, no gain or loss will be recognized by the Acquired
Fund's shareholders upon the exchange of their shares for Acquiring Fund shares;
(vii) under Section 358 of the Code, the aggregate basis of Acquiring Fund
shares an Acquired Fund shareholder receives in connection with the Transaction
will be the same as the aggregate basis of his or her Acquired Fund shares
exchanged therefor; (viii) under Section 1223(1) of the Code, an Acquired Fund
shareholder's holding period for his or her Acquiring Fund shares will be
determined by including the period for which he or she held the Acquired Fund
shares exchanged therefor, provided that he or she held such Acquired Fund
shares as capital assets; and (ix) the Acquiring Fund will succeed to, and take
into account the items of the Acquired Funds described in Section 381(c) of the
Code, subject to the conditions and limitations specified in Sections 381, 382,
383 and 384 of the Code and the Treasury Regulations thereunder.
Ropes & Gray LLP will express no view with respect to the effect of the
Transactions on any transferred asset as to which any unrealized gain or loss is
required to be recognized at the end of a taxable year (or on the termination or
transfer thereof) under federal income tax principles.
The opinion will be based on certain factual certifications and representations
made by the officers of the Funds and will also be based on customary
assumptions. The opinion is not a guarantee that the tax consequences of the
Transactions will be as described above.
Opinions of counsel are not binding upon the IRS or the courts. If a Transaction
is consummated but does not qualify as a tax-free reorganization under the Code,
a shareholder of the Acquired Fund would recognize a taxable gain or loss equal
to the difference between his or her tax basis in his or her Acquired Fund
shares and the fair market value of the Acquiring Fund shares he or she
received.
A portion of the portfolio assets of the Acquired Funds will be sold in
connection with the Transactions. The actual tax impact of such sales will
depend on the difference between the price at which such portfolio assets are
sold and that Acquired Fund's basis in such assets. Any net capital gains
recognized in these sales will be distributed to such Acquired Fund's
shareholders as capital gain dividends (to the extent of net realized long-term
capital gains) and/or ordinary dividends (to the extent of net realized
short-term capital gains) during or with respect to the year of sale, and such
distributions will be taxable to shareholders.
At or before the closing of the Transactions, each Acquired Fund [will], and
each Acquiring Fund may, declare a distribution to shareholders, which together
with all previous distributions, will have the effect of distributing to
shareholders all of its investment company taxable income (computed without
regard to the deduction for dividends paid) and net capital gains, including
those realized on disposition of portfolio securities in connection with the
Transactions (after reduction by any available capital loss carryforwards), if
any, through the closing of the Transactions. Such distributions will be taxable
to shareholders.
It is possible that each Acquiring Fund's ability to utilize either its own or
the corresponding Acquired Fund's pre-Transaction losses to offset the
post-Transaction gains of the combined fund will be limited as a result of the
Transaction due to the application of loss limitation rules under federal tax
law. In addition, for five years beginning after the closing date, the combined
fund will not be allowed to offset gains "built-in" (unrealized) to either the
Acquired or Acquiring Fund at the time of the Transaction against capital losses
(including capital loss carryforwards) built in to the other Fund. As a result
of these limitations, under certain circumstances the shareholders of either the
Acquired or Acquiring Fund could receive distributions that are taxable in the
hands of taxable shareholders earlier than they would if the Transaction were
not to have occurred. The effect of these limitations, however, will depend on
the amount of losses in each Fund at the time of the Transaction, and, in any
event, these limitations will only affect taxable shareholders. Based on
estimated information as of July 31, 2007, had the Transactions occurred on that
date, the capital loss carryforwards of each of Technology Fund and Balanced
Growth Fund would be limited and certain of the losses would expire without
being used to offset gains of the combined fund.
In addition, since the shareholders of each Acquired Fund will receive shares of
the corresponding Acquiring Fund, they will be allocated a proportionate share
of any "built-in" gains in the Acquired Fund's assets, as well as any taxable
gains realized by the Acquired Fund but not distributed to its shareholders
prior to the Transaction, when such gains are eventually distributed by the
Acquiring Fund. An Acquired Fund's built-in losses cannot be used to offset
these built-in gains for a period of five years following the Transaction. As of
July 31, 2007, (i) Mid Cap Growth Fund's net built-in gains equaled
approximately 22% of its net assets, or $3.47 per share, and (ii) Quality Growth
Fund's net built-in gains equaled approximately 14% of its net assets, or $2.53
per share. These percentages are substantially higher than the corresponding
percentages, 3% and 6% respectively, of the gains built in to the Technology and
Balanced Growth Funds. As of that date none of the other Acquiring Funds had
built-in gains.
This description of the federal income tax consequences of the Transactions is
made without regard to the particular facts and circumstances of any
shareholder. Shareholders are urged to consult their own tax advisors as to the
specific consequences to them of the Transactions, including the applicability
and effect of state, local, non-U.S. and other tax laws.
VOTING RIGHTS.
- --------------
Each shareholder of an Acquired Fund is entitled to one vote per share and a
proportionate fractional vote for any fractional share. The former shareholders
of each Acquired Fund, as holders of Advisor, Institutional, Class A, Class B or
Class C shares, as applicable, of each Acquiring Fund, will vote separately as a
Fund or a class on matters relating solely to that Fund or class. On all other
matters, they will vote in the aggregate with shareholders of the Fund. As
shareholders of the larger Acquiring Funds following the Transactions, the
former shareholders of each of the Acquired Funds and Acquiring Funds will
possess less proportional voting power when they vote separately as Acquiring
Fund shareholders, or shareholders of the classes thereof, than they had when
they voted separately as shareholders of the smaller Acquired Funds.
INFORMATION FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
- --------------------------------------------------------------
Fifth Third Funds is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith file reports and other
information with the SEC. Reports, proxy and information statements,
registration statements and other information filed by Fifth Third Funds can be
inspected and copied at the public reference facilities of the SEC at 450 Fifth
Street, N.W. Washington, D.C. 20549. Copies of such filings may also be
available at the following SEC regional offices: 7 Tremont Street, Suite 600,
Boston, MA 02108; 500 West Madison Street, Suite 1400, Chicago, IL 60611-2511;
and the Curtis Center, Suite 1005E, 601 Walnut Street, Philadelphia, PA 19106.
Copies of such materials can also be obtained by mail from the Public Reference
Branch, Office of Consumer Affairs and Information Services, SEC, Washington,
D.C. 20549 at prescribed rates.
VOTING INFORMATION
------------------
Proxies are being solicited from shareholders of each of the Technology Fund,
Intermediate Bond Fund, U.S. Government Bond Fund, Government Money Market Fund
and Balanced Fund by the Trustees of Fifth Third Funds for the Special Meeting
of shareholders to be held November 16, 2007, or at such later time made
necessary by adjournment. This Combined Prospectus/Proxy Statement and the
enclosed form of proxy voting card are being mailed to shareholders on or about
September 28, 2007.
Proxies may be revoked at any time before they are voted either (i) by a written
revocation received by the Clerk of the Trust, (ii) by properly executing a
later-dated proxy, or (iii) by attending the Special Meeting and voting in
person.
SOLICITATION OF PROXIES; RECORD DATE.
- -------------------------------------
Proxies are being solicited by mail. In addition to soliciting proxies by mail,
the Trustees and employees of the Trust may solicit proxies in person.
Shareholders of record of each of the respective Technology Fund, Intermediate
Bond Fund, U.S. Government Bond Fund, Government Money Market Fund and Balanced
Fund at the close of business on September 24, 2007 (the "Record Date"), will be
entitled to vote at the Special Meeting of shareholders or any adjournment
thereof. Each share is entitled to one vote as of the close of business on
September 24, 2007.
APPROVAL OF PROPOSALS; REQUIRED VOTE.
- -------------------------------------
All properly executed proxies received in time for the Special Meetings will be
voted as specified in the proxy, or, if no specification is made, FOR the
proposals set forth in Proposal 1, Proposal 2, Proposal 3, Proposal 4 and
Proposal 5 of the Notice of Special Meeting to implement the reorganizations as
described above. The Transactions contemplated by each Reorganization Agreement
will be consummated only if: (1) a quorum (as described below) is present; (2)
approved by the shareholders of the respective Technology Fund, Intermediate
Bond Fund, U.S. Government Bond Fund, Government Money Market Fund and Balanced
Fund voting as a Fund, in the manner described below; and (3) the closing
conditions set forth in the Reorganization Agreement are satisfied. Approval of
each Proposal by shareholders requires the affirmative vote of the lesser of (1)
more than 50% of the outstanding shares of the Fund, or (2) 67% or more of the
shares of the Fund present at the meeting if more than 50% of the outstanding
shares are represented at the meeting in person or by proxy. In the event the
shareholders do not approve the reorganization, the Trustees of Fifth Third
Funds will consider possible alternative arrangements in the best interests of
Fifth Third Funds and its shareholders.
QUORUM AND METHODS OF TABULATION.
- ---------------------------------
Pursuant to the Amended and Restated Agreement and Declaration of Trust, more
than 50% of the shares entitled to vote, present in person or represented by
proxy, constitutes a quorum for the transaction of business at the Special
Meetings. Votes cast by proxy or in person at the Special Meetings will be
counted by persons appointed by the Trust as tellers (the "Tellers") for the
Special Meetings.
The Tellers will count the total number of votes cast "for" approval of the
proposal for purposes of determining whether sufficient affirmative votes have
been cast. The Tellers will count shares represented by proxies that reflect
abstentions and "broker non-votes" (i.e., shares held by brokers or nominees as
to which (i) instructions have not been received from the beneficial owners or
the persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on a particular matter) as shares that are present on
the matter for purposes of determining the presence of a quorum. Abstentions and
broker non-votes will have the effect of negative votes on the proposal.
OUTSTANDING SHARES.
- -------------------
As of September 24, 2007, there were outstanding the following amount of shares
of Institutional, Advisor, Class A, Class B or Class C Class of each of the
respective Technology Fund, Intermediate Bond Fund, U.S. Government Bond Fund,
Government Money Market Fund and Balanced Fund:
|-------------------|------------------|---------------|
| Institutional | | |
|-------------------|------------------|---------------|
| Advisor | | |
|-------------------|------------------|---------------|
| Class A | | |
|-------------------|------------------|---------------|
| Class B | | |
|-------------------|------------------|---------------|
| Class C | | |
|-------------------|------------------|---------------|
ADJOURNMENTS.
- -------------
In the event that a quorum is not present and/or sufficient votes in favor of
the proposal set forth in the Notice of Special Meetings are not received by the
time scheduled for the Special Meetings, the persons named as proxies may
propose one or more adjournments of the Special Meetings to permit further
solicitation of proxies with respect to the proposal. Any such adjournments will
require the affirmative vote of a plurality of the shares present in person or
by proxy and entitled to vote at the sessions of the Special Meetings to be
adjourned, as required by the Amended and Restated Agreement and Declaration of
Trust and the Amended and Restated By-Laws of the Trust. The persons named as
proxies will vote in favor of such adjournment those proxies that they are
entitled to vote in favor of the proposal. They will vote against any such
adjournment those proxies required to be voted against the proposal. The Fund
pays the costs of any additional solicitation and of any adjourned session.
OTHER BUSINESS.
- ---------------
The Trustees know of no other business to be brought before the Special
Meetings. However, if any other matters properly come before the Special
Meetings, it is their intention that proxies which do not contain specific
restrictions to the contrary will be voted on such matters in accordance with
the judgment of the persons named in the enclosed form of proxy.
THE BOARD OF TRUSTEES OF FIFTH THIRD FUNDS, INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMEND APPROVAL OF THE REORGANIZATION PLANS.
As demonstrated below, Fifth Third Bank is deemed a controlling person of
___________
With respect to the effect of this control on the voting rights of other
security holders, Fifth Third Bank's vote may determine the outcome of each
proposal.
CAPITALIZATION.
- ----------------
PRO FORMA COMBINED CAPITALIZATION (UNAUDITED) January 31, 2007
(Amounts in thousands except NAV per share)
The following sets forth the unaudited capitalization of the Acquiring Fund and
the Fund(s) of the Fifth Third Funds as of January 31, 2007 on a pro forma
combined basis, giving effect to the proposed acquisition of assets and net
asset value as of that date. (a)
MID CAP PRO FORMA
GROWTH FUND TECHNOLOGY FUND ADJUSTMENTS ADJUSTMENTS FUND
--------------- ----------------- -------------- ----- ---------------- ------ --------------
NET ASSETS BY CLASS:
Institutional Shares $ 337,042 $ 48,010 $ 48,010 (b) $ (48,010) (c) $ 385,052
Class A Shares 32,213 3,876 3,876 (b) (3,876) (c) 36,089
Class B Shares 6,226 879 879 (b) (879) (c) 7,105
Class C Shares 1,045 744 744 (b) (744) (c) 1,789
Advisor Shares 756 3,759 3,759 (b) (3,759) (c) 4,515
--------- --------- --------- --------- ---------
$377,282 $ 57,268 $ 57,268 $ (57,268) $434,550
========= ========= ========= ========= =========
SHARES OUTSTANDING BY CLASS:
Institutional Shares 22,286 4,281 3,175 (b) (4,281) (c) 25,461
Class A Shares 2,197 351 264 (b) (351) (c) 2,461
Class B Shares 450 84 63 (b) (84) (c) 513
Class C Shares 80 71 56 (b) (71) (c) 136
Advisor Shares 52 346 260 (b) (346) (c) 312
--------- --------- --------- --------- ---------
25,065 5,133 3,818 (5,133) 28,883
========= ========= ========= ========= =========
NET ASSET VALUE PER SHARE
Institutional Shares $15.12 $11.22 $15.12
Class A Shares $14.67 $11.03 $14.67
Class B Shares $13.86 $10.52 $13.86
Class C Shares $13.22 $10.49 $13.22
Advisor Shares $14.45 $10.88 $14.45
(a) Assumes the merger(s) had been consummated on January 31, 2007 and is
for informational purposes only. No assurance can be given as to how
many shares of each class of each Acquiring Fund will be received by
the shareholders of each respective class of each Fund(s) on the
anticipated Closing Date, and the foregoing should not be relied upon
to reflect the number of shares of the respective classes of each Fund
that will be received on or after such date.
(b) Adjustment reflects capital (dollars, shares) issued by the indicated
class of each Aquiring Fund in connection with each proposed
reorganization.
(c) Adjustment reflects capital (dollars, shares) exchanged (retired) by
the indicated class of each Fund in connection with each proposed
reorganization.
Note: Per share amounts may not recalculate due to rounding of net assets and/or
shares outstanding
QUALITY PRO FORMA
GROWTH FUND BALANCED FUND ADJUSTMENTS ADJUSTMENTS FUND
--------------- ----------------- ------------------- ---------------------- --------------
NET ASSETS BY CLASS:
Institutional Shares $ 588,105 $ 32,517 $ 32,517 (b) $ (32,517) (c) $ 620,622
Class A Shares 104,973 31,266 31,266 (b) (31,266) (c) 136,239
Class B Shares 12,362 6,815 6,815 (b) (6,815) (c) 19,177
Class C Shares 2,634 1,405 1,405 (b) (1,405) (c) 4,039
Advisor Shares 2,159 124 124 (b) (124) (c) 2,283
--------- --------- --------- --------- ---------
$710,233 $ 72,127 $ 72,127 $ (72,127) $782,360
========= ========= ========= ========= =========
QUALITY PRO FORMA
GROWTH FUND BALANCED FUND ADJUSTMENTS ADJUSTMENTS FUND
--------------- ----------------- ------------------- ---------------------- --------------
SHARES OUTSTANDING BY
CLASS:
Institutional Shares 33,865 2,472 1,872 (b) (2,472) (c) 35,737
Class A Shares 6,176 2,390 1,839 (b) (2,390) (c) 8,015
Class B Shares 760 527 419 (b) (527) (c) 1,179
Class C Shares 166 109 89 (b) (109) (c) 255
Advisor Shares 129 10 7 (b) (10) (c) 136
--------- --------- --------- --------- ---------
41,096 5,508 4,226 (5,508) 45,322
========= ========= ========= ========= =========
NET ASSET VALUE PER SHARE
Institutional Shares $17.37 $13.16 $17.37
Class A Shares $17.00 $13.08 $17.00
Class B Shares $16.26 $12.93 $16.26
Class C Shares $15.84 $12.91 $15.84
Advisor Shares $16.80 $13.05 $16.80
(a) Assumes the merger(s) had been consummated on January 31, 2007 and is
for informational purposes only. No assurance can be given as to how
many shares of each class of each Acquiring Fund will be received by
the shareholders of each respective class of each Fund(s) on the
anticipated Closing Date, and the foregoing should not be relied upon
to reflect the number of shares of the respective classes of each Fund
that will be received on or after such date.
(b) Adjustment reflects capital (dollars, shares) issued by the indicated
class of each Aquiring Fund in connection with each proposed
reorganization.
(c) Adjustment reflects capital (dollars, shares) exchanged (retired) by
the indicated class of each Fund in connection with each proposed
reorganization.
Note: Per share amounts may not recalculate due to rounding of net assets and/or
shares outstanding
GOVERNMENT
PRIME MONEY MONEY MARKET PRO FORMA
MARKET FUND FUND ADJUSTMENTS ADJUSTMENTS FUND
--------------- ----------------- --------------------- ---------------------- --------------
NET ASSETS BY CLASS:
Institutional Shares $ 579,409 $133,678 $ 133,678 (b) $ (133,678) (c) $ 713,087
Class A Shares 551,828 90,673 90,673 (b) (90,673) (c) 642,501
Class B Shares * 1,112 - 1,112
Class C Shares * 1,237 - 1,237
Advisor Shares * 3,060 - 3,060
--------- --------- --------- --------- ----------
$1,136,646 $224,351 $224,351 $(224,351) $1,360,997
========= ========= ========= ========= ==========
SHARES OUTSTANDING BY
CLASS:
Institutional Shares 579,450 133,691 133,691 (b) (133,691) (c) 713,141
Class A Shares 551,836 90,709 90,709 (b) (90,709) (c) 642,545
Class B Shares * 1,113 - 1,113
Class C Shares * 1,237 - 1,237
Advisor Shares * 3,060 - 3,060
--------- --------- --------- --------- ---------
1,136,696 224,400 224,400 (224,400) 1,361,096
========= ========= ========= ========= =========
GOVERNMENT
PRIME MONEY MONEY MARKET PRO FORMA
MARKET FUND FUND ADJUSTMENTS ADJUSTMENTS FUND
--------------- ----------------- --------------------- ---------------------- --------------
NET ASSET VALUE PER SHARE
Institutional Shares $1.00 $1.00 $1.00
Class A Shares $1.00 $1.00 $1.00
Class B Shares $1.00 $1.00 $1.00
Class C Shares $1.00 $1.00 $1.00
Advisor Shares $1.00 $1.00 $1.00
(a) Assumes the merger(s) had been consummated on January 31, 2007 and is
for informational purposes only. No assurance can be given as to how
many shares of each class of each Acquiring Fund will be received by
the shareholders of each respective class of each Fund(s) on the
anticipated Closing Date, and the foregoing should not be relied upon
to reflect the number of shares of the respective classes of each Fund
that will be received on or after such date.
(b) Adjustment reflects capital (dollars, shares) issued by the indicated
class of each Aquiring Fund in connection with each proposed
reorganization.
(c) Adjustment reflects capital (dollars, shares) exchanged (retired) by
the indicated class of each Fund in connection with each proposed
reorganization.
Note: Per share amounts may not recalculate due to rounding of net assets and/or
shares outstanding.
* Government Money Market Fund does not offer Class B, C or Advisor shares.
MERGER SCENARIO 1
----------- -------- -------------- -------
INTERMEDIATE
BOND BOND PRO FORMA
FUND FUND ADJUSTMENTS ADJUSTMENTS FUND
--------- --------- -------------- -------------- ---------
NET ASSETS BY CLASS:
Institutional Shares $ 266,900 $ 434,349 $ 434,349 (b) $ (434,349) (c) $ 701,249
Class A Shares 10,363 19,919 19,919 (b) (19,919) (c) 30,282
Class B Shares 2,450 2,052 2,052 (b) (2,052) (c) 4,502
Class C Shares 251 715 715 (b) (715) (c) 966
Advisor Shares 235 64 64 (b) (64) (c) 299
--------- --------- --------- --------- ---------
$280,199 $ 457,099 $ 457,099 $ (457,099) $737,298
========= ========= ========= ========= =========
SHARES OUTSTANDING BY CLASS:
Institutional Shares 27,283 45,255 44,412 (b) (45,255) (c) 71,695
Class A Shares 1,059 2,070 2,037 (b) (2,070) (c) 3,096
Class B Shares 250 214 210 (b) (214) (c) 460
Class C Shares 27 75 73 (b) (75) (c) 100
Advisor Shares 24 6 7 (b) (6) (c) 31
--------- --------- --------- --------- ---------
28,643 47,620 46,739 (47,620) 75,382
========= ========= ========= ========= =========
NET ASSET VALUE PER SHARE
Institutional Shares $ 9.78 $ 9.60 $ 9.78
Class A Shares $ 9.78 $ 9.63 $ 9.78
Class B Shares $ 9.78 $ 9.57 $ 9.78
Class C Shares $ 9.78 $ 9.59 $ 9.78
Advisor Shares $ 9.78 $ 9.59 $ 9.78
- ------------------------------------------- --------------- -------------------- -- ----------------- ---------- -----------------
Continued -------------- -------- -------------- ----------
MERGER SCENARIO 2
-------------- -------- -------------- ----------
U.S.
GOVERNMENT
BOND BOND PRO FORMA
FUND FUND ADJUSTMENTS ADJUSTMENTS FUND
--------- --------- -------------- -------------- ---------
NET ASSETS BY CLASS:
Institutional Shares $ 266,900 $ 26,317 $ 26,317 (b) $ (26,317) (c) $ 293,217
Class A Shares 10,363 22,444 22,444 (b) (22,444) (c) 32,807
Class B Shares 2,450 - - (b) - (c) 2,450
Class C Shares 251 1,439 1,439 (b) (1,439) (c) 1,690
Advisor Shares 235 3 3 (b) (3) (c) 238
--------- --------- --------- --------- ---------
$280,199 $ 50,203 $ 50,203 $(50,203) $330,402
========= ========= ========= ========= =========
SHARES OUTSTANDING BY CLASS:
Institutional Shares 27,283 2,633 2,691 (b) (2,633) (c) 29,974
Class A Shares 1,059 2,243 2,295 (b) (2,243) (c) 3,354
Class B Shares * 250 - - (b) - (c) 250
Class C Shares 27 145 147 (b) (145) (c) 174
Advisor Shares ^ 24 - - (b) - (c) 24
--------- --------- --------- --------- ---------
28,643 5,021 5,133 (5,021) 33,776
========= ========= ========= ========= =========
NET ASSET VALUE PER SHARE
Institutional Shares $ 9.78 $ 9.99 $ 9.78
Class A Shares $ 9.78 $ 10.01 $ 9.78
Class B Shares $ 9.78 NA $ 9.78
Class C Shares $ 9.78 $ 9.92 $ 9.78
Advisor Shares $ 9.78 $ 10.00 $ 9.78
- ------------------------------------------- --------------- -------------------- ------------------ ----------------- ---------- ---
Continued -------------- -------- --------------
MERGER SCENARIO 3
-------------- -------- --------------
U.S.
INTERMEDIATE GOVERNMENT
BOND BOND BOND
FUND FUND FUND ADJUSTMENTS ADJUSTMENTS
--------- --------- --------- -------------- --------------
NET ASSETS BY CLASS:
Institutional Shares $ 266,900 $ 434,349 $ 26,317 $ 460,666 (b) $ (460,666)
Class A Shares 10,363 19,919 22,444 42,363 (b) (42,363)
Class B Shares * 2,450 2,052 - 2,052 (b) (2,052)
Class C Shares 251 715 1,439 2,154 (b) (2,154)
Advisor Shares 235 64 3 67 (b) (67)
--------- --------- --------- --------- ---------
$280,199 $457,099 $ 50,203 $ 507,302 $ (507,302)
========= ========= ========= ========= =========
SHARES OUTSTANDING BY CLASS:
Institutional Shares 27,283 45,255 2,633 47,103 (b) (47,888)
Class A Shares 1,059 2,070 2,243 4,332 (b) (4,313)
Class B Shares * 250 214 - 210 (b) (214)
Class C Shares 27 75 145 220 (b) (220)
Advisor Shares ^ 24 6 - 7 (b) (6)
--------- --------- --------- --------- ---------
28,643 47,620 5,021 51,872 (52,641)
========= ========= ========= ========= =========
NET ASSET VALUE PER SHARE
Institutional Shares $ 9.78 $ 9.60 $ 9.99
Class A Shares $ 9.78 $ 9.63 $ 10.01
Class B Shares $ 9.78 $ 9.57 NA
Class C Shares $ 9.78 $ 9.59 $ 9.92
Advisor Shares $ 9.78 $ 9.59 $ 10.00
-------------- --------------
-------------- --------------
PRO FORMA
FUND
---------
NET ASSETS BY CLASS:
Institutional Shares (c) $ 727,566
Class A Shares (c) 52,726
Class B Shares * (c) 4,502
Class C Shares (c) 2,405
Advisor Shares (c) 302
----------
$787,501
==========
SHARES OUTSTANDING BY CLASS:
Institutional Shares (c) 74,386
Class A Shares (c) 5,391
Class B Shares * (c) 460
Class C Shares (c) 247
Advisor Shares ^ (c) 31
---------
80,515
=========
NET ASSET VALUE PER SHARE
Institutional Shares $ 9.78
Class A Shares $ 9.78
Class B Shares $ 9.78
Class C Shares $ 9.78
Advisor Shares $ 9.78
(a) Assumes the merger(s) had been consummated on January 31, 2007 and is for
informational purposes only. No assurance can be given as to how many shares of
each class of each Acquiring Fund will be received by the shareholders of each
respective class of each Fund(s) on the anticipated Closing Date, and the
foregoing should not be relied upon to reflect the number of shares of the
respective classes of each Fund that will be received on or after such date.
(b) Adjustment reflects capital (dollars, shares) issued by the indicated class
of each Aquiring Fund in connection with each proposed reorganization.
(c) Adjustment reflects capital (dollars, shares) exchanged (retired) by the
indicated class of the of each Fund in connection with each proposed
reorganization. Note: Per share amounts may not recalculate due to rounding of
net assets and/or shares outstanding.
* U.S. Government Bond Fund does not have Class B shares.
^ Represents fewer than 500 shares outstanding for and issued to U.S. Government
Bond Fund.
OTHER INFORMATION
ADVISER AND ADMINISTRATOR.
- --------------------------
Fifth Third Asset Management, Inc., 38 Fountain Square Plaza, Cincinnati, Ohio
45263, is the investment adviser and administrator to each of the Funds.
State Street Bank and Trust Company, One Lincoln Street, Boston, MA 02111-2900,
is the sub-administrator to each of the Funds.
INTEREST OF CERTAIN PERSONS
- ---------------------------
FTAM may be deemed to have an interest in the merger because it provides
investment advisory and administrative services to the Funds.
OUTSTANDING SHARES AND SIGNIFICANT SHAREHOLDERS.
- ------------------------------------------------
Appendix C to this Combined Prospectus/Proxy Statement lists the total number of
shares outstanding as of the Record Date for each class of the Acquired Funds
entitled to vote at the Special Meetings. It also identifies holders of more
than 5% or 25% of any class of shares of the Acquired and Acquiring Funds.
OTHER FINANCIAL AND PERFORMANCE INFORMATION.
- --------------------------------------------
Financial highlights for the Acquiring Funds are included in Appendix D to this
Prospectus/Proxy Statement. The Funds' Annual and Semi-Annual Reports (which
also include the report of independent registered public accountants) and
prospectuses are available free of charge at the address and telephone number
set forth on the cover page of this Combined Prospectus/Proxy Statement.
CONTENTS OF THE APPENDICES.
- ---------------------------
o Appendix A - Form of Agreement and Plan of Reorganization relating to
the proposed Transactions.
o Appendix B - Information relating to the Acquiring Funds, including
information with respect to its investment goal, principal investment
strategies and risks, procedures for buying, selling and exchanging
shares, pricing of shares, dividends and distributions and certain tax
matters.
o Appendix C - Information regarding the share ownership of the Acquired
Funds and the Acquiring Funds.
o Appendix D - Financial highlights for the Acquiring Funds.
APPENDIX A
FIFTH THIRD FUNDS
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
FIFTH THIRD ______ FUND ("ACQUIRED FUND") AND
FIFTH THIRD ______ FUND ("ACQUIRING FUND")
This Agreement and Plan of Reorganization, having been approved by the
Board of Trustees of Fifth Third Funds, is made as of ________, 2007 between
Fifth Third Funds, on behalf of Acquired Fund ("Acquired Fund") and Acquiring
Fund ("Acquiring Fund"), and Fifth Third Asset Management, Inc. ("FTAM") (the
"Plan"). The capitalized terms used herein shall have the meaning ascribed to
them in this Plan.
1. OVERVIEW OF PLAN OF REORGANIZATION
(a) Acquired Fund will sell, assign, convey, transfer and deliver to
Acquiring Fund, and Acquiring Fund will acquire, on the Exchange Date, all of
the properties and assets existing at the Valuation Time in Acquired Fund,
subject to liabilities.
In consideration therefor, Acquiring Fund shall, on the Exchange Date,
assume all of the liabilities of Acquired Fund existing at the Valuation Time
and transfer to Acquired Fund a number of full and fractional units of
beneficial interest ("Shares") (such Shares being [Advisor, Institutional, Class
A, Class B or Class C Shares]) of Acquiring Fund having an aggregate net asset
value equal to the value of the assets of Acquired Fund transferred to Acquiring
Fund on such date less the value of all of the liabilities of Acquired Fund
assumed by Acquiring Fund on that date. It is intended that the reorganization
described in this Plan shall be a tax-free reorganization under Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code").
(b) Upon consummation of the transaction described in paragraph 1(a) of
this Plan, Acquired Fund in complete liquidation shall distribute to its
respective shareholders of record as of the Exchange Date the Acquiring Fund
Shares received by it, each shareholder being entitled to receive that number of
such Acquiring Fund Shares equal to the total of (i) the proportion which the
number of Shares of Acquired Fund held by such shareholder bears to the number
of such Shares of Acquired Fund outstanding on such date multiplied by (ii) the
total number of Acquiring Fund Shares received by the Acquired Fund, as of the
Exchange Date. Acquired Fund shareholders of record holding [Advisor,
Institutional, Class A, Class B or Class C Shares] will receive [Advisor,
Institutional, Class A, Class B or Class C Shares], respectively, of Acquiring
Fund.
2. REPRESENTATIONS AND WARRANTIES OF FIFTH THIRD FUNDS. Each of the Fifth
Third Funds, Acquiring Fund and Acquired Fund warrant to and agree that:
(a) Fifth Third Funds is a business trust duly established and validly
existing under the laws of The Commonwealth of Massachusetts and has power to
carry on its business as it is now being conducted and to carry out this Plan.
Each of Fifth Third Funds, Acquired Fund and Acquiring Fund is not required to
qualify as a foreign association in any jurisdiction. Each of Fifth Third Funds,
Acquired Fund and Acquiring Fund has all necessary federal, state and local
authorizations to own all of its properties and assets and to carry on business
as now being conducted and to fulfill the terms of this Plan, except as set
forth in Section 2(i).
(b) Fifth Third Funds is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and such registration has not been revoked or rescinded and is in full force and
effect.
(c) The statements of assets and liabilities, statements of operations,
statements of changes in net assets and schedules of investments (indicating
their market values) for each of Acquired Fund and Acquiring Fund for the year
ended July 31, 2007, fairly present the financial position of each of Acquired
Fund and Acquiring Fund as of such date, and said statements of operations and
changes in net assets and financial highlights fairly reflect
the results of operations, changes in net assets and financial highlights for
the periods covered thereby in conformity with generally accepted accounting
principles.
(d) The prospectuses of each of Acquired Fund and Acquiring Fund dated
November 29, 2006, as amended, as filed with the Securities and Exchange
Commission (the "Commission") (the "Prospectuses") and the Statement of
Additional Information for Fifth Third Funds, dated November 29, 2006, as
amended (the "Statement of Additional Information"), as filed with the
Commission, did not as of such date, and will not as of the Exchange Date,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(e) There are no material legal, administrative or other proceedings
pending or, to the knowledge of Fifth Third Funds, Acquired Fund or Acquiring
Fund, overtly threatened against Fifth Third Funds, Acquired Fund or Acquiring
Fund, which assert liability on the part of Fifth Third Funds, Acquired Fund or
Acquiring Fund.
(f) There are no material contracts outstanding to which Fifth Third Funds,
Acquired Fund or Acquiring Fund is a party, other than as disclosed in Fifth
Third Funds' Prospectuses and Statement of Additional Information or in the
Registration Statement.
(g) Acquired Fund has no known liabilities of a material nature, contingent
or otherwise, other than those shown on its statement of assets and liabilities
as of July 31, 2007, referred to above and those incurred in the ordinary course
of the business of Fifth Third Funds as an investment company or Acquired Fund
since such date. Prior to the Exchange Date, Acquired Fund will advise Acquiring
Fund of all known material liabilities, contingent or otherwise, incurred by it
subsequent to July 31, 2007, whether or not incurred in the ordinary course of
business.
(h) As of the Exchange Date, Fifth Third Funds and each of Acquired Fund
and Acquiring Fund will have filed all federal and other tax returns which, to
the knowledge of Fifth Third Funds' officers, have been required to be filed by
Acquired Fund or Acquiring Fund, respectively, and will have paid or will pay
all federal and other taxes shown to be due on such returns or on any
assessments received by Acquired Fund or Acquiring Fund, respectively. As of the
Exchange Date, to such officers' knowledge, each of Acquired Fund and Acquiring
Fund (i) will have adequately provided for all tax liabilities on its books,
(ii) will not have had any tax deficiency or liability asserted against it, or
question with respect thereto raised, and (iii) will not be under audit by the
Internal Revenue Service or by any state or local tax authority for taxes in
excess of those already paid.
(i) As used in this Plan, the term "Investments" shall mean the Acquired
Fund's investments shown on the schedule of its portfolio investments as of July
31, 2007, referred to in Section 2(c) hereof, as supplemented with such changes
as Fifth Third Funds or the Acquired Fund shall make after July 31, 2007, which
changes shall be disclosed to Fifth Third Funds and the Acquiring Fund, and
changes resulting from stock dividends, stock split-ups, mergers and similar
corporate actions.
(j) Each of Acquired Fund and Acquiring Fund has elected to qualify and has
qualified as, and has met the requirements of subchapter M of the Code for
treatment as a "regulated investment company" within the meaning of Section 851
of the Code in respect of each taxable year since the commencement of
operations, and will continue to so qualify and meet such requirements at all
times through the Exchange Date. Neither Acquired Fund nor Acquiring Fund has at
any time since its inception been liable (nor is now liable) for any material
income or excise tax pursuant to Section 852 or 4982 of the Code. Each of
Acquired Fund and Acquiring Fund is in compliance in all material respects with
applicable regulations of the Internal Revenue Service pertaining to the
reporting of dividends and other distributions on and redemptions of its capital
stock and to withholding in respect of dividends and other distributions to
shareholders, and is not liable for any material penalties which could be
imposed thereunder.
(k) No consent, approval, authorization or order of any governmental
authority is required for the consummation by Fifth Third Funds, Acquired Fund
or Acquiring Fund of the transaction contemplated by this Plan, except such as
may be required under the Securities Act of 1933 (the "1933 Act"), the
Securities Exchange Act of 1934 ("the 1934 Act"), the 1940 Act, state securities
or Blue Sky laws or the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
(l) As of both the Valuation Time and the Exchange Date and otherwise as
described in Section 2(i), Fifth Third Funds on behalf of Acquiring Fund will
have full right, power and authority to purchase the Investments and any other
assets and assume the liabilities of Acquired Fund to be transferred to
Acquiring Fund pursuant to this Plan.
(m) The Registration Statement, the Prospectuses and the Proxy Statement,
on the effective date of the Registration Statement and insofar as they relate
to Fifth Third Funds, Acquired Fund and Acquiring Fund: (i) will comply in all
material respects with the provisions of the 1933 Act, the 1934 Act and the 1940
Act and the rules and regulations thereunder and (ii) will not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and at the time of the
shareholders' meeting referred to in Section 8 of this Plan and at the Exchange
Date, the Prospectuses, as amended or supplemented by any amendments or
supplements filed with the Commission by Fifth Third Funds, Acquired Fund or
Acquiring Fund, will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; provided, however, that none of the representations and warranties
in this subsection shall apply to statements in or omissions from the
Registration Statement, the Prospectuses or the Proxy Statement made in reliance
upon and in conformity with information furnished by Acquired Fund or Acquiring
Fund for use in the Registration Statement, the Prospectuses or the Proxy
Statement.
(n) Acquiring Fund Shares to be issued to Acquired Fund have been duly
authorized and, when issued and delivered pursuant to this Plan and the
Prospectuses, will be legally and validly issued and will be fully paid and
nonassessable by Fifth Third Funds and no shareholder of Fifth Third Funds will
have any preemptive right of subscription or purchase in respect thereof.
(o) The issuance of Acquiring Fund Shares pursuant to this Plan will be in
compliance with all applicable federal and state securities laws.
3. REORGANIZATION. (a) Subject to the requisite approval of the
shareholders of Acquired Fund (in respect of the Acquired Fund Reorganization,
as hereafter defined) and to the other terms and conditions contained herein
(including Acquired Fund's obligation described in Section 9(j) hereof to
distribute to its respective shareholders all of its undistributed investment
company taxable income (as defined in Section 852 of the Code), if any, and net
capital gain (as defined in Section 1222 of the Code)), Acquired Fund will agree
to sell, assign, convey, transfer and deliver to Acquiring Fund, and Acquiring
Fund will agree to acquire from Acquired Fund, on the Exchange Date all of the
Investments and all of the cash and other assets of Acquired Fund, subject to
liabilities, in exchange for that number of Shares of Acquiring Fund provided
for in Section 4 and the assumption by Acquiring Fund of all of the liabilities
of Acquired Fund. Pursuant to this Plan, Acquired Fund will, as soon as
practicable after the Exchange Date, distribute in liquidation all of the
Acquiring Fund Shares received by it to its shareholders in exchange for their
respective Shares of Acquired Fund.
(b) Fifth Third Funds, on behalf of Acquired Fund, will pay or cause to be
paid to Acquiring Fund any interest and cash dividends received by it on or
after the Exchange Date with respect to the Investments transferred to Acquiring
Fund hereunder. Fifth Third Funds, on behalf of Acquired Fund, will transfer to
Acquiring Fund any rights, stock dividends, or other securities received by
Acquired Fund after the Exchange Date as stock dividends or other distributions
on or with respect to the Investments transferred, which rights, stock
dividends, and other securities shall be deemed included in the assets
transferred to Acquiring Fund at the Exchange Date and shall not be separately
valued, in which case any such distribution that remains unpaid as of the
Exchange Date shall be included in the determination of the value of the assets
of Acquired Fund acquired by Acquiring Fund.
4. EXCHANGE DATE; VALUATION TIME. On the Exchange Date, Acquiring
Fund will deliver to Acquired Fund a number of Acquiring Fund Shares having an
aggregate net asset value equal to the value of the assets attributable to each
corresponding class of Shares of Acquired Fund acquired by Acquiring Fund, less
the value of the liabilities of Acquired Fund assumed, determined as hereafter
provided in this Section 4.
(a) Subject to Section 4(d) hereof, the value of Acquired Fund's net assets
will be computed as of the Valuation Time using the valuation procedures for
Acquiring Fund set forth in the Prospectuses and Statement of
Additional Information. In no event shall the same security held by the Acquired
Fund and Fifth Third Funds be valued at different prices.
(b) Subject to Section 4(d) hereof, the net asset value of a Share of
Acquiring Fund will be determined to the nearest full cent as of the Valuation
Time, using the valuation procedures set forth in the Fifth Third Funds
Prospectuses for Acquiring Fund.
(c) Subject to Section 4(d), the Valuation Time shall be [time] on [date],
or such earlier or later days as may be established by the proper officers of
Fifth Third Funds (the "Valuation Time").
(d) No formula will be used to adjust the net asset value of Acquired Fund
or Acquiring Fund to take into account differences in realized and unrealized
gains and losses.
(e) Acquiring Fund shall issue its Shares to Acquired Fund on one share
deposit receipt registered in the name of Acquired Fund. Acquired Fund shall
distribute in liquidation the Acquiring Fund Shares received by it hereunder pro
rata to its shareholders by redelivering such share deposit receipt to Fifth
Third Funds' transfer agent which will as soon as practicable set up open
accounts for each Acquired Fund shareholder, in accordance with written
instructions furnished by Acquired Fund.
(f) Acquiring Fund shall assume all liabilities of Acquired Fund, whether
accrued or contingent, in connection with the acquisition of assets and
subsequent dissolution of Acquired Fund or otherwise, except that recourse for
assumed liabilities relating to Acquired Fund will be limited to Acquiring Fund.
5. EXPENSES, FEES, ETC. (a) All fees and expenses incurred by
Acquired Fund, Acquiring Fund and/or FTAM (the investment adviser of both
Acquired Fund and Acquiring Fund) directly in connection with the consummation
the transaction contemplated by this Plan will be borne by FTAM, including the
costs of proxy materials, proxy solicitations and legal expenses. All such fees
and expenses incurred and so borne by FTAM will be solely and directly related
to the transaction contemplated by this Plan and will be paid directly by FTAM
to the relevant providers of services or other payees, in accordance with the
principles set forth in Revenue Ruling 73-54, 1973-1 C.B. 187. Fees and expenses
not incurred directly in connection with the consummation of the transaction
contemplated by this Plan will be paid by the party directly incurring such
expenses. Notwithstanding any of the foregoing, fees and expenses shall in any
event be paid by the party directly incurring such fees and expenses if and to
the extent that the payment by FTAM of such fees and expenses would result in
the disqualification of such party as a regulated investment company within the
meaning of Section 851 of the Code. Acquired Fund shareholders will pay their
respective expenses, if any, incurred in connection with the transaction
contemplated by this Plan. Neither FTAM nor Acquired Fund nor Acquiring Fund
will pay Acquired Fund shareholders' expenses.
(b) Notwithstanding any other provisions of this Plan, if for any reason
the transaction contemplated by this Plan is not consummated, no party shall be
liable to the other party for any damages resulting therefrom, including without
limitation consequential damages.
6. PERMITTED ASSETS. Fifth Third Funds and Acquired Fund will agree
to review the assets of Acquired Fund to ensure that at any time prior to the
Exchange Date the assets of Acquired Fund do not include any assets that
Acquiring Fund is not permitted, or reasonably believes to be unsuitable for it,
to acquire, including without limitation any security that, prior to its
acquisition by Acquired Fund, is unsuitable for Acquiring Fund to acquire.
7. EXCHANGE DATE. Delivery of the assets of Acquired Fund to be
transferred, assumption of the liabilities of Acquired Fund to be assumed, and
the delivery of Acquiring Fund Shares to be issued shall be made at the offices
of ___________ , at [time] on [date], or at such other times and dates
established by the proper officers of Fifth Third Funds, the date and time upon
which such delivery is to take place being referred to herein as the "Exchange
Date."
8. SPECIAL MEETING OF SHAREHOLDERS; DISSOLUTION. Acquired Fund
will agree to call a special meeting of the shareholders as soon as is
practicable after the effective date of the Registration Statement for the
purpose of considering the sale of all of the assets of Acquired Fund to and the
assumption of all of the liabilities of
Acquired Fund by Acquiring Fund as herein provided, and approving this Plan, and
it shall be a condition to the obligations of each of the parties hereto that
the holders of the Shares of Acquired Fund shall have approved this Plan and the
transaction contemplated herein in the manner required by law and Fifth Third
Funds' Declaration of Trust and Bylaws at such a meeting on or before the
Valuation Time.
9. CONDITIONS TO BE MET REGARDING THE TRANSACTION. The consummation
by the Acquired Fund and Acquiring Fund of the reorganization of the Acquired
Fund with and into the Acquiring Fund ("Acquired Fund Reorganization") shall be
subject to the following conditions:
(a) This Plan shall have been adopted and the transaction contemplated
hereby, shall have been approved by the shareholders of Acquired Fund in the
manner required by law.
(b) Acquired Fund shall have furnished to Acquiring Fund a statement of
each of Acquired Fund's assets and liabilities, with values determined as
provided in Section 3 of this Plan, together with a list of Investments with
their respective tax costs, all as of the Valuation Time, certified on Acquired
Fund's behalf by its President (or any Vice President) and Treasurer, and a
certificate of both such officers, dated the Exchange Date, to the effect that
as of the Valuation Time and as of the Exchange Date there has been no material
adverse change in the financial position of Acquired Fund since November 29,
2006, other than changes in the Investments since that date or changes in the
market value of the Investments, or changes due to net redemptions of Shares of
Acquired Fund, dividends paid or losses from operations.
(c) As of the Valuation Time and as of the Exchange Date, all
representations and warranties of Fifth Third Funds, Acquiring Fund and Acquired
Fund made in Section 2 of this Plan are true and correct in all material
respects as if made at and as of such dates, Acquired Fund has complied with all
requirements of this Plan to be performed or satisfied at or prior to each of
such dates, and Acquired Fund shall have furnished to Acquiring Fund a
statement, dated the Exchange Date, signed by Fifth Third Funds' President (or
any Vice President) and Treasurer certifying those facts as of such dates.
(d) There shall not be any material litigation pending with respect to the
matters contemplated by this Plan.
(e) Fifth Third Funds shall have received an opinion of Ropes & Gray LLP
dated the Exchange Date to the effect that: (i) Fifth Third Funds is a business
trust duly established and validly existing under the laws of the Commonwealth
of Massachusetts, and neither Fifth Third Funds, Acquired Fund nor Acquiring
Fund is, to the knowledge of such counsel, required to qualify to do business as
a foreign association in any jurisdiction; (ii) Fifth Third Funds and Acquired
Fund have power to sell, assign, convey, transfer and deliver the Investments
and other assets contemplated hereby and, upon consummation of the transaction
contemplated hereby in accordance with the terms of this Plan, Fifth Third Funds
and Acquired Fund will have duly sold, assigned, conveyed, transferred and
delivered such Investments and other assets to Acquiring Fund; (iii) the
adoption of this Plan did not, and the consummation of the transaction
contemplated hereby will not, violate Fifth Third Funds' Declaration of Trust or
Bylaws, as amended, or any provision of any agreement known to such counsel to
which Fifth Third Funds is a party or by which it is bound; (iv) no consent,
approval, authorization or order of any court or governmental authority is
required for the consummation by Fifth Third Funds of the transaction
contemplated hereby, except such as have been obtained under the 1933 Act, the
1934 Act and the 1940 Act; (v) this Plan has been duly authorized by Fifth Third
Funds and is a valid and binding obligation of Fifth Third Funds; and (vi) the
Shares of Acquiring Fund to be delivered to Acquired Fund as provided for by
this Plan are duly authorized and upon such delivery will be validly issued and
will be fully paid and nonassessable by Fifth Third Funds and no shareholder of
Fifth Third Funds has any preemptive right to subscription or purchase in
respect thereof.
(f) With respect to the Acquired Fund Reorganization, Fifth Third Funds, on
behalf of Acquired Fund and Acquiring Fund shall have received an opinion of
Ropes & Gray LLP addressed to Acquired Fund and Acquiring Fund and dated the
Exchange Date (which opinion will be based upon certain factual representations
and subject to certain qualifications) to the effect that, on the basis of the
existing provisions of the Code, Treasury Regulations, current administrative
rules and court decisions, generally for federal income tax purposes, except as
noted below: (i) the transaction contemplated by this Plan will constitute a
reorganization within the meaning of Section 368(a) of the Code, and Acquiring
Fund and Acquired Fund will each be a "party to a reorganization" within the
meaning of Section 368(b) of the Code; (ii) no gain or loss will be recognized
by Acquiring Fund upon the receipt of the assets
of Acquired Fund in exchange for Acquiring Fund Shares and the assumption by
Acquiring Fund of the liabilities of Acquired Fund; (iii) the basis in the hands
of Acquiring Fund of the assets of Acquired Fund transferred to Acquiring Fund
in the transaction contemplated by this Plan will be the same as the basis of
such assets in the hands of Acquired Fund immediately prior to the transfer;
(iv) the holding periods of the assets of Acquired Fund in the hands of
Acquiring Fund will include the periods during which such assets were held by
Acquired Fund; (v) no gain or loss will be recognized by Acquired Fund upon the
transfer of Acquired Fund's assets to Acquiring Fund in exchange for Acquiring
Fund Shares and the assumption by Acquiring Fund of the liabilities of Acquired
Fund, or upon the distribution of Acquiring Fund Shares by Acquired Fund to its
shareholders in liquidation; (vi) no gain or loss will be recognized by Acquired
Fund shareholders upon the exchange of their Acquired Fund Shares for Acquiring
Fund Shares; (vii) the aggregate basis of Acquiring Fund Shares a Acquired Fund
shareholder receives in connection with the transaction contemplated by this
Plan will be the same as the aggregate basis of his or her Acquired Fund
exchanged therefor; (viii) a Acquired Fund shareholder's holding period for his
or her Acquiring Fund Shares will be determined by including the period for
which he or she held the Acquired Fund Shares exchanged therefor, provided that
he or she held such Acquired Fund Shares as capital assets; and (ix) Acquiring
Fund will succeed to, and take into account the items of Acquired Fund described
in Section 381(c) of the Code, subject to the conditions and limitations
specified in Sections 381, 382, 383 and 384 of the Code and the Treasury
regulations thereunder. The opinion will express no view with respect to the
effect of the reorganization on any transferred asset as to which any unrealized
gain or loss is required to be recognized at the end of a taxable year (or on
the termination or transfer thereof) under federal income tax principles.
(g) The assets of Acquired Fund to be acquired by Acquiring Fund will
include no assets which Acquiring Fund, by reason of limitations contained in
its Declaration of Trust or of investment restrictions disclosed in the
Prospectuses and Statement of Additional Information in effect on the Exchange
Date, may not properly acquire. Fifth Third Funds shall not change Fifth Third
Funds' Declaration of Trust or Prospectuses so as to restrict permitted
investments for Acquiring Fund except as required by the Commission or any state
regulatory authority.
(h) The Registration Statement shall have become effective under the 1933
Act and applicable Blue Sky provisions, and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge of Fifth Third
Funds, contemplated by the Commission and or any state regulatory authority.
(i) Fifth Third Funds shall have received from the Commission such order or
orders as Ropes & Gray LLP deems reasonably necessary or desirable under the
1933 Act, the 1934 Act, the 1940 Act in connection with the transaction
contemplated hereby, and that all such orders shall be in full force and effect.
(j) Prior to the Exchange Date, the Acquired Fund shall have declared a
dividend or dividends which, together with all previous such dividends, shall
have the effect of distributing to its shareholders (a) all of the excess of (x)
its investment income excludable from gross income under Section 103 of the Code
over (y) its deductions disallowed under Section 265 and 171 of the Code, (b)
all of its investment company taxable income (in each case computed without
regard to any deduction for dividends paid), and (c) all of its net capital gain
realized (after reduction for any capital loss carryover), in each case for both
the current taxable year (which will end on the Exchange Date) and the
immediately preceding taxable year.
(k) With respect to the Acquired Fund Reorganization, Acquired Fund shall
have furnished to Acquiring Fund a certificate, signed by the President (or any
Vice President) and the Treasurer of Fifth Third Funds, as to the tax cost to
Acquired Fund of the securities delivered to Acquiring Fund pursuant to this
Plan, together with any such other evidence as to such tax cost as Acquiring
Fund may reasonably request.
(l) Fifth Third Funds shall have received from the custodian of Fifth Third
Funds a certificate identifying all of the assets of Acquired Fund held by such
custodian as of the Valuation Time.
(m) The transfer agent of Fifth Third Funds shall have provided to Fifth
Third Funds (i) a record specifying the number of Shares of Acquired Fund
outstanding as of the Valuation Time and (iii) a record specifying the name and
address of each holder of record of any such Shares of Acquired Fund and the
number of Acquired Fund Shares held of record by each such shareholder as of the
Valuation Time. Acquired Fund's transfer agent shall also have provided Fifth
Third Funds with a certificate confirming that the acts specified in the
preceding sentence
have been taken and that the information so supplied is complete and accurate to
the best knowledge of the transfer agent.
(n) Fifth Third Funds, on behalf of Acquiring Fund, shall have executed and
delivered an Assumption of Liabilities dated as of the Exchange Date pursuant to
which Acquiring Fund will assume all of the liabilities of Acquired Fund
existing at the Valuation Time in connection with the transaction contemplated
by this Plan, other than liabilities pursuant to this Plan.
(o) Fifth Third Funds, on behalf of Acquired Fund, shall have executed and
delivered an instrument of transfer ("Transfer Document") and any other
certificates or documents Fifth Third Funds may deem necessary or desirable to
transfer Acquired Fund's entire right, title and interest in and to the
Investments and all other assets of Acquired Fund.
10. NO BROKER, ETC. There is no person who has dealt with Fifth
Third Funds, Acquired Fund or Acquiring Fund who by reason of such dealings is
entitled to any broker's or finder's or other similar fee or commission arising
out of the transaction contemplated by this Plan.
11. TERMINATION. Fifth Third Funds may, by consent of its Trustees,
terminate this Plan, and Fifth Third Funds, after consultation with counsel, may
modify this Plan in any manner deemed necessary or desirable.
12. Covenants, etc. Deemed Material. All covenants, agreements,
representations and warranties made under this Plan and any certificates
delivered pursuant to this Plan shall be deemed to have been material and relied
upon by each of the parties, notwithstanding any investigation made by them or
on their behalf.
13. SOLE PLAN; AMENDMENTS. This Plan supersedes all previous
correspondence and oral communications between the parties regarding the subject
matter hereof, constitutes the only understanding with respect to such subject
matter, may be changed only by duly adopted resolution of the Board of Trustees
of Fifth Third Funds, and shall be construed in accordance with and governed by
the laws of The Commonwealth of Massachusetts.
14. RULE 145. Pursuant to Rule 145 under the 1933 Act, Fifth Third
Funds will, in connection with the issuance of any Shares of the Acquiring Fund
to any person who at the time of the transaction contemplated hereby is deemed
to be an affiliate of a party to the transaction pursuant to Rule 145(c), cause
to be affixed upon the certificates issued to such person (if any) a legend as
follows:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT TO FIFTH THIRD
FUNDS OR ITS PRINCIPAL UNDERWRITER UNLESS (i) A REGISTRATION STATEMENT WITH
RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(ii) IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO FIFTH THIRD FUNDS SUCH
REGISTRATION IS NOT REQUIRED.
15. FIFTH THIRD FUNDS' DECLARATION OF TRUST Fifth Third Funds is a
business trust organized under Massachusetts law and under a Declaration of
Trust, to which reference is hereby made and a copy of which is on file at the
office of the Secretary of The Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "Fifth Third Funds" entered into in the name or on
behalf thereof by any of the Trustees, officers, employees or agents are made
not individually, but in such capacities, and are not binding upon any of the
Trustees, officers, employees, agents or shareholders of Fifth Third Funds
personally, but bind only the assets of Fifth Third Funds and all persons
dealing with any series or funds of Fifth Third Funds, such as Acquiring Fund,
must look solely to the assets of Fifth Third Funds belonging to such series or
funds for the enforcement of any claims against Fifth Third Funds.
[Signature Page Follows]
This Agreement may be executed in any number of counter-parts, each of
which, when executed and delivered, shall be deemed to be an original.
FIFTH THIRD FUNDS,
on behalf of Acquiring Fund and
Acquired Fund
By: ____________________________
Name:
Title:
FIFTH THIRD ASSET MANAGEMENT, INC.,
with respect to Section 5 only
By: ___________________________
Name:
Title:
APPENDIX B
FIFTH THIRD FUNDS
INFORMATION ABOUT THE ACQUIRING FUNDS
FIFTH THIRD MID CAP GROWTH FUND
- -------------------------------
FUNDAMENTAL OBJECTIVE. Growth of capital. Income is a secondary objective.
PRINCIPAL INVESTMENT STRATEGIES. Under normal circumstances, the Fund invests at
least 80% of its assets in common stocks of mid cap companies. Mid cap companies
are defined as those companies included in the Russell MidCap Growth Index and
companies with similar market capitalizations. Market capitalization, a common
measure of the size of a company, is the market price of a share of a company's
stock multiplied by the number of shares that are outstanding. As of October 31,
2006, the market capitalization of companies included in the Russell MidCap
Growth Index ranged from approximately $1.4 billion to approximately $18.6
billion. The average market capitalization of companies included in the Russell
MidCap Growth Index was $8.1 billion and the median market capitalization was
approximately $4.1 billion.
To achieve its secondary objective of income, the Fund relies on dividend and
interest income. The Fund may invest up to 20% of its assets in common stocks of
large cap companies (many of which pay dividends), small cap companies,
convertible securities and debt securities that pay interest.
The Fund seeks to outperform the Russell MidCap Growth Index over rolling
five-year periods. The Advisor believes that stock prices are driven by earnings
growth, and that superior returns occur when a company experiences rapid and
accelerating growth due to improving fundamentals. The Advisor uses a bottom-up
investment process with fundamental research providing the basis for stock
selection. The Advisor believes this method is particularly valuable in the mid
cap universe. The Advisor uses a combination of fundamental, momentum and
valuation-based disciplines for portfolio construction, with a particular focus
on companies demonstrating above-average growth and strong balance sheets.
Quantitative analysis is used to identify stocks the Advisor believes have
above-average growth and strong balance sheets. Factors considered include
return on assets, price to earnings per share, price to cash flow, and earnings
per share growth. The Advisor uses a fundamental analysis of financial
statements to look for companies that, in its opinion, have stock prices that do
not accurately reflect cash flows, tangible assets or management skills.
The Advisor also utilizes a strict sell discipline and may consider selling a
security when: it becomes overvalued or less attractive; there is deterioration
in a company's fundamentals, management, or financial reporting; one of the
Fund's holdings has exceeded the Advisor's position weighting; or a company's
relative strength falls below the Advisor's target.
The Advisor will look to manage risk through several strategies, which will
typically include maintaining minimum and maximum sector and position weightings
relative to the Russell MidCap Growth Index and monitoring risk statistics
relative to the Russell MidCap Growth Index.
When the Advisor believes that market conditions warrant a temporary defensive
posture, the Fund may invest up to 100% of its assets in high-quality,
short-term debt securities and money market instruments. The taking of such a
temporary defensive posture may adversely affect the ability of the Fund to
achieve its investment objective.
PRINCIPAL INVESTMENT RISKS Below is a description of the principal risks of
investing in the Fund.
EQUITY SECURITIES RISK. The risks of investing in equity securities include the
risk of sudden and unpredictable drops in value or
periods of lackluster performance.
MEDIUM-SIZED COMPANY RISK. Stocks of medium-sized companies can be more
sensitive to long market declines than larger companies, in part because they
generally do not have the financial resources that larger companies have.
DIVIDEND SECURITIES RISK. Stocks that pay regular dividends provide investors
some return on their investment, to an extent, supporting a stock's price, even
during periods when prices of equity securities are falling. However,
dividend-paying stocks, especially those that pay significant dividends, also
tend to appreciate less quickly than stocks of companies in developing
industries, which tend to reinvest profits into research, development, plant and
equipment to accommodate expansion.
GROWTH SECURITIES RISK. The Fund invests in growth oriented stocks, which are
sensitive to market movements. The prices of growth stocks tend to reflect
future expectations, and when those expectations change or are not met, share
prices generally fall.
CONVERTIBLE SECURITIES RISK. Prices of convertible securities, which include
bonds and preferred stocks, may be affected by the prices of the underlying
security, which generally is common stock.
VOLATILITY AND PERFORMANCE INFORMATION. The bar chart and table provide an
indication of the risks of an investment in the Fund by showing its performance
from year to year and over time, as well as compared to a broad-based securities
index.
The returns assume that Fund distributions have been reinvested. The returns for
Class B, Class C and Advisor Shares will differ from the returns for Class A
Shares (which are shown in the bar chart) because of differences in expenses of
each class. The table assumes that shareholders redeem their fund shares at the
end of the period indicated.
Past performance does not indicate how the Fund will perform in the future.
The after tax returns included in the table are only for Class A Shares. After
tax returns for Class B, Class C and Advisor Shares will vary.
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31 FOR CLASS A SHARES
- ---------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
- ----------------------------------------------------------------------------------------------------------------------
32.64% 3.29% 16.77% 6.54% -6.53% -30.65% 37.27% 7.94% 11.05% 9.74%
- ----------------------------------------------------------------------------------------------------------------------
The Bar chart above does not reflect the impact of any applicable sales
charges or account fees, which would reduce returns.
Best quarter: Q4 1999 23.18%
Worst quarter: Q3 2001 -22.73%
Year to Date Return (1/1/06 to 9/30/06): 4.82%
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31 FOR INSTITUTIONAL SHARES(1)
- -------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
- ----------------------------------------------------------------------------------------------------------------------
32.64% 3.41% 17.06% 6.93% -6.28% -30.43% 37.51% 8.32% 11.30% 10.03%
- ----------------------------------------------------------------------------------------------------------------------
The Bar chart above does not reflect the impact of any applicable sales
charges or account fees, which would reduce returns.
Best quarter: Q4 1999 23.15%
Worst quarter: Q3 2001 -22.69%
Year to Date Return (1/1/06 to 9/30/06): 4.96%
1 The Fund first offered Institutional shares on August 11, 1998. The quoted
performance of Institutional shares for the period prior to August 11, 1998
reflects the performance for Class A shares, a class of shares of the Fund not
offered by this Prospectus. Class A shares of the Fund would have substantially
similar annual returns as Institutional shares because the shares represent
interests in the same portfolio of investments and the annual returns would
differ only to the extent that the classes do not have the same expense
structure.
- -------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED DECEMBER 31, 2006)
- -------------------------------------------------------------------------------------------------------------------
INCEPTION DATE PAST YEAR PAST 5 YEARS PAST 10 YEARS
- -------------------------------------------------------------------------------------------------------------------
CLASS A SHARES (WITH 5.00%) SALES CHARGE) 1/1/85
Return Before Taxes 4.25% 3.53% 6.60%
Return After Taxes on Distributions(1) 1.19% 2.87% 5.27%
Return After Taxes on Distributions and
Sale of Fund Shares(1) 6.96% 3.05% 5.36%
- -------------------------------------------------------------------------------------------------------------------
CLASS B SHARES2 (WITH APPLICABLE CONTINGENT 1/1/85
DEFERRED SALES CHARGE)
Return Before Taxes 4.61% 3.51% 6.27%
- -------------------------------------------------------------------------------------------------------------------
CLASS C SHARES(3) (WITH APPLICABLE CONTINGENT 1/1/85
DEFERRED SALES CHARGE)
Return Before Taxes 8.94% 3.82% 6.40%
- -------------------------------------------------------------------------------------------------------------------
ADVISOR SHARES(4) (WITH 3.25% SALES CHARGE) 1/1/85
Returns Before Taxes 5.91% 3.66% 6.54%
- -------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES(5) 1/1/85
Return Before Taxes 10.03% 4.88% 7.41%
Return After Taxes on Distributions(6) 6.87% 4.23% 6.08%
Return After Taxes on Distributions and
Sale of Fund Shares(6) 10.84% 4.21% 6.07%
- -------------------------------------------------------------------------------------------------------------------
RUSSELL MIDCAP GROWTH INDEX* (REFLECTS NO 10.66% 8.22% 8.82%
DEDUCTION FOR FEES, EXPENSES OR TAXES)
- -------------------------------------------------------------------------------------------------------------------
1. After tax returns are calculated using a standard set of assumptions. The
stated returns assume the highest historical federal income and capital
gains tax rules. Returns after taxes on distributions assumes a continued
investment in the Fund and shows the effect of taxes on Fund distributions.
Returns after taxes on distributions and sales of Fund shares assumes all
shares were redeemed at the end of each measurement period, and shows the
effect of any taxable gain (or offsetting loss) on redemption, as well as
the effects of taxes on Fund distributions. These after tax returns do not
reflect the effect of any applicable state and local taxes. Actual
after-tax returns depend on an investor's tax situation and may differ from
those shown. After tax returns are not relevant to investors holding shares
through tax-deferred programs, such as IRA or 401(k) plans.
2. The performance of Class B shares is based on the performance for Class A
shares, adjusted to reflect the expenses and sales charges for Class B
shares, for the period prior to the commencement of operations of Class B
shares on October 11, 2000.
3. The performance of Class C shares is based on the performance for Class A
shares, adjusted to reflect the expenses and sales charges for Class C
shares, for the period prior to the commencement of operations of Class C
shares on April 24, 1996.
4. For the period prior to October 29, 2001, the quoted performance of Advisor
shares reflects the performance of Class A shares, adjusted to reflect the
expenses and sales charges for Advisor shares.
5. The Fund first offered Institutional shares on August 11, 1998. The quoted
performance of Institutional shares for the period prior to August 11, 1998
reflects the performance for Class A Shares, a class of shares of the Fund
not offered by this Prospectus. Class A shares of the Fund would have
substantially similar annual returns as Institutional shares because the
shares represent interests in the same portfolio of investments and the
annual returns would differ only to the extent that the classes do not have
the same expense structure.
6. After tax returns are calculated using a standard set of assumptions. The
stated returns assume the highest historical federal income and capital
gains tax rules. Returns after taxes on distributions assumes a continued
investment in the Fund and shows the effect of taxes on Fund distributions.
Returns after taxes on distributions and sales of Fund shares assumes all
shares were redeemed at the end of each measurement period, and shows the
effect of any taxable gain (or offsetting loss) on redemption, as well as
the effects of taxes on Fund distributions. These after tax returns do not
reflect the effect of any applicable state and local taxes. Actual
after-tax returns depend on an investor's tax situation and may differ from
those shown. After tax returns are not relevant to investors holding shares
through tax-deferred programs, such as IRA or 401(i) plans.
* The Russell MidCap(R) Growth Index is an unmanaged index that measures the
performance of the 800 smallest companies in the Russell 1000(R) Index with
higher price-to-book ratios and higher forecasted growth values.
FIFTH THIRD QUALITY GROWTH FUND
- -------------------------------
FUNDAMENTAL OBJECTIVE. Growth of capital. Income is a secondary objective.
PRINCIPAL INVESTMENT STRATEGIES. Under normal circumstances, the Fund invests at
least 65% of total assets in common stocks of growth companies.
The Advisor considers growth companies to be those companies that, in the
opinion of the Advisor, offer excellent prospects for consistent, above-average
revenue and earnings growth, improving profit trends, and positive investor
sentiment coupled with solid operating momentum. The Advisor generally looks for
companies with a strong record of earnings growth and considers the company's
current ratio of debt to capital and the quality of its management. Most of the
companies in which the Fund invests are U.S. companies with a market
capitalization greater than $3 billion.
To achieve its secondary objective of income, the Fund may rely on dividend
income that it receives from common stocks and interest income it receives from
other investments, including convertible securities. The Fund reserves the right
to invest up to 35% of its total assets in convertible securities which, at the
time of investment, are rated investment grade, that is, in the BBB major rating
category or higher by Standard & Poor's or in the Baa major rating category or
higher by Moody's or their unrated equivalents.
The Fund seeks to outperform the Russell 1000(R) Growth Index over rolling
five-year periods. The Russell 1000(R) Growth Index is an unmanaged index of
common stocks that measures the performance of those Russell 1000(R) companies
with higher-price to-book ratios and higher forecasted growth values. The
Advisor believes that stock prices are driven by earnings growth, and that
superior returns occur when a company experiences rapid and accelerating growth
due to improving fundamentals. The Advisor uses a bottom-up investment process
with fundamental research providing the basis for stock selection. The Advisor
uses a combination of fundamental, momentum and valuation-based disciplines for
portfolio construction, with a particular focus on strong fundamental growth,
better than average valuation characteristics, and strong financial condition
and characteristics. Factors considered in identifying companies with strong
earnings growth include the business model, the quality of management,
competitive advantages, the product pipeline, and financial characteristics. The
Advisor uses a fundamental analysis of financial statements to look for
companies that, in its opinion, have stock prices that do not accurately reflect
cash flows, tangible assets or management skills.
The Advisor also utilizes a strict sell discipline and may consider selling a
security when: it becomes overvalued or less attractive; there is deterioration
in a company's fundamentals, management, or financial reporting; one of the
Fund's holdings has exceeded the Advisor's position weighting; or a company's
relative strength falls below the Advisor's target.
The Advisor will look to manage risk through several strategies, which will
typically include maintaining minimum and maximum sector and position weightings
relative to the Russell 1000(R) Growth Index and monitoring risk statistics
relative to the Russell 1000(R) Growth Index. The Adviser also relies on
intensive research and believes that security selection will be the main source
of active risk.
When the Advisor believes that market conditions warrant a temporary defensive
posture, the Fund may invest up to 100% of its assets in high-quality,
short-term debt securities and money market instruments. The taking of such a
temporary defensive posture may adversely affect the ability of the Fund to
achieve its investment objective.
PRINCIPAL INVESTMENT RISKS. Below is a description of the principal risks of
investing in the Fund.
EQUITY SECURITIES RISK. The risks of investing in equity securities include the
risk of sudden and unpredictable drops in value and the potential for extended
periods of lackluster performance.
DIVIDEND SECURITIES RISK. Stocks that pay regular dividends provide investors
some return of their investment, to an extent, supporting the stock's price,
even during periods when the prices of equity securities generally are falling.
However, dividend-paying stocks, especially those that pay significant
dividends, also tend to appreciate less quickly than stocks of companies in
developing industries, which tend to reinvest most profits into research,
development, plant and equipment to accommodate expansion.
GROWTH SECURITIES RISK. The Fund invests in growth oriented stocks, which are
sensitive to market movements. The prices of growth stocks tend to reflect
future expectations, and when those expectations change or are not met, share
prices generally fall.
SMALLER COMPANY RISK. Stocks of smaller companies tend to be volatile and more
sensitive to long-term market declines than stocks of larger companies, in part
because they generally do not have the financial resources that larger companies
have.
CONVERTIBLE SECURITIES RISK. Prices of convertible securities, which include
bonds and preferred stocks, may be affected by the prices of the underlying
security, which generally is common stock.
VOLATILITY AND PERFORMANCE INFORMATION. The bar chart and table provide an
indication of the risks of an investment in the Fund by Year-by-Year Total
Returns as of 12/31 For Class A Shares showing its performance from year to year
and over time, as well as compared to two broad-based securities indices.
The returns assume that Fund distributions have been reinvested. The returns for
Class B, Class C and Advisor Shares will differ from the returns for Class A
Shares (which are shown in the bar chart) because of differences in expenses of
each class. The table assumes that shareholders redeem their fund shares at the
end of the period indicated.
Past performance does not indicate how the Fund will perform in the future.
The after tax returns included in the table are only for Class A Shares. After
tax returns for Class B, Class C and Advisor Shares will vary.
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31 FOR CLASS A SHARES
- ----------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
- ---------------------------------------------------------------------------------------------------------------------
32.70% 30.05% 23.51% -4.00% -13.99% -32.71% 31.10% -1.09% 5.96% 4.67%
- ---------------------------------------------------------------------------------------------------------------------
The Bar chart above does not reflect the impact of any applicable sales
charges or account fees, which would reduce returns.
Best quarter: Q4 1998 28.18%
Worst quarter: Q2 2002 -19.77%
Year to Date Return (1/1/06 to 9/30/06): -0.12%
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31 FOR INSTITUTIONAL SHARES(1)
- ------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
- ---------------------------------------------------------------------------------------------------------------------
32.70% 30.16% 23.86% -3.82% -13.76% -32.51% 31.37% -0.88% 6.25% 4.95%
- ---------------------------------------------------------------------------------------------------------------------
The Bar chart above does not reflect the impact of any applicable sales
charges or account fees, which would reduce returns.
Best quarter: Q4 1998 28.21%
Worst quarter: Q2 2002 -19.74%
Year to Date Return (1/1/06 to 9/30/06): 0.06%
1 The Fund first offered Institutional shares on August 11, 1998. The quoted
performance of Institutional shares for the period prior to August 11, 1998
reflects the performance for Class A shares, a class of shares of the Fund not
offered by this Prospectus. Class A shares of the Fund would have substantially
similar annual returns as Institutional shares because the shares represent
interests in the same portfolio of investments and the annual returns would
differ only to the extent that the classes do not have the same expense
structure.
- -------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED DECEMBER 31, 2006)
- -------------------------------------------------------------------------------------------------------------------
INCEPTION DATE PAST YEAR PAST 5 YEARS PAST 10 YEARS
- -------------------------------------------------------------------------------------------------------------------
CLASS A SHARES (WITH 5.00%) SALES CHARGE) 1/1/83
Return Before Taxes -0.56% -1.66% 4.93%
Return After Taxes on Distributions(1) -0.82% -1.73% 4.08%
Return After Taxes on Distributions and
Sale of Fund Shares(1) -0.07% -1.42% 4.08%
- -------------------------------------------------------------------------------------------------------------------
CLASS B SHARES(2) (WITH APPLICABLE CONTINGENT 1/1/83
DEFERRED SALES CHARGE)
Return Before Taxes -1.11% -1.79% 4.59%
- -------------------------------------------------------------------------------------------------------------------
CLASS C SHARES(3) (WITH APPLICABLE CONTINGENT 1/1/83
DEFERRED SALES CHARGE)
Return Before Taxes 3.92% -1.40% 4.75%
- -------------------------------------------------------------------------------------------------------------------
ADVISOR SHARES(4) (WITH 3.25% SALES CHARGE) 1/1/83
Returns Before Taxes 1.04% -1.56% 4.86%
- -------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES(5) 1/1/83
Return Before Taxes 4.95% -0.40% 5.69%
Return After Taxes on Distributions(6) 4.65% -0.48% 4.83%
Return After Taxes on Distributions and
Sale of Fund Shares(6) 3.52% -0.36% 4.75%
- -------------------------------------------------------------------------------------------------------------------
RUSSELL 1000 GROWTH INDEX* (REFLECTS NO
DEDUCTION FOR FEES, EXPENSES OR TAXES) 9.07% 2.69% 5.44%
- -------------------------------------------------------------------------------------------------------------------
S&P 500 INDEX* (REFLECTS NO DEDUCTION FOR FEES, 15.79% 6.19% 8.42%
EXPENSES OR TAXES)
- -------------------------------------------------------------------------------------------------------------------
1. After tax returns are calculated using a standard set of assumptions. The
stated returns assume the highest historical federal income and capital
gains tax rules. Returns after taxes on distributions assumes a continued
investment in the Fund and shows the effect of taxes on fund distributions.
Returns after taxes on distributions and sales of Fund shares assumes all
shares were redeemed at the end of each measurement period, and shows the
effect of any taxable gain (or offsetting loss) on redemption, as well as
the effects of taxes on Fund distributions. These after tax returns do not
reflect the effect of any applicable state and local taxes. Actual
after-tax returns depend on an investor's tax situation and may differ from
those shown. After tax returns are not relevant to investors holding shares
through tax-deferred programs, such as IRA or 401(k) plans.
2. The performance of Class B shares is based on the performance for Class A
shares, adjusted to reflect the expenses and sales charges for Class B
shares, for the period prior to the commencement of operations of Class B
shares on October 11, 2000.
3. The performance of Class C shares is based on the performance for Class A
shares, adjusted to reflect the expenses and sales charges for Class C
shares, for the period prior to the commencement of operations of Class C
shares on April 25, 1996.
4. For the period prior to October 29, 2001, the quoted performance of Advisor
shares reflects the performance of Class A shares, adjusted to reflect the
expenses and sales charges for Advisor shares.
5. The Fund first offered Institutional shares on August 11, 1998. The quoted
performance of Institutional shares for the period prior to August 11, 1998
reflects the performance for Class A Shares, a class of shares of the Fund
not offered by this Prospectus. Class A shares of the Fund would have
substantially similar annual returns as Institutional shares because the
shares represent interests in the same portfolio of investments and the
annual returns would differ only to the extent that the classes do not have
the same expense structure.
6. After tax returns are calculated using a standard set of assumptions. The
stated returns assume the highest historical federal income and capital
gains tax rules. Returns after taxes on distributions assumes a continued
investment in the Fund and shows the effect of taxes on Fund distributions.
Returns after taxes on distributions and sales of Fund shares assumes all
shares were redeemed at the end of each measurement period, and shows the
effect of any taxable gain (or offsetting loss) on redemption, as well as
the effects of taxes on Fund distributions. These after tax returns do not
reflect the effect of any applicable state and local taxes. Actual
after-tax returns depend on an investor's tax situation and may differ from
those shown. After tax returns are not relevant to investors holding shares
through tax-deferred programs, such as IRA or 401(i) plans.
* The Russell 1000(R) Growth Index is an unmanaged index of common stocks
that measures the performance of those Russell 1000 companies with higher
price-to-book ratios and higher forecasted growth values.
** The S&P 500(R) Index is an unmanaged index of 500 selected common stocks,
most of which are listed on the New York Stock Exchange, and is a measure
of the U.S. Stock market as a whole.
FIFTH THIRD BOND FUND
- ---------------------
FUNDAMENTAL OBJECTIVE. High current income. Capital growth is a secondary
objective.
PRINCIPAL INVESTMENT STRATEGIES. Under normal circumstances, the Fund invests at
least 80% of its assets in bonds. The bonds in which the Fund invests may
include U.S. Government securities and corporate debt securities, including
mortgage-backed securities. Corporate bonds are rated as investment grade.
Investment grade securities are securities rated in the BBB major rating
category or higher by Standard & Poor's, or in the Baa major rating category or
higher by Moody's, or their unrated equivalents.
The Fund generally invests in high quality bonds. The Fund is managed for growth
of capital but with less volatility than a bond fund investing in lower quality
securities. In selecting bond securities, the Advisor considers, among other
things, the remaining maturity, the stated interest rate, the price of the
security, the financial condition of the issuer, and the issuer's prospects for
long-term growth of earnings and revenues.
U.S. Government securities (or bonds) are debt securities issued or guaranteed
as to principal and interest by the U.S. Treasury and obligations issued by U.S.
Government-sponsored enterprises ("GSEs"), which may be agencies or
instrumentalities of the U.S. Government, the securities of which are not
guaranteed as to principal and interest by the U.S. Treasury. U.S. Government
securities that are guaranteed and insured by the full faith and credit of the
U.S. Treasury include U.S. Treasury securities and securities issued by the
Government National Mortgage Association (Ginnie Mae) and the Small Business
Administration (SBA). U.S. Government securities issued by GSEs the securities
of which are neither guaranteed nor insured by the full faith and credit of the
U.S. Treasury but which have the ability to borrow from the Treasury include
Federal Home Loan Bank (FHLB), Student Loan Marketing Association (Sallie-Mae),
Tennessee Valley Authority (TVA), Federal National Mortgage Association (Fannie
Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac). Federal Farm
Credit Bank (FFCB) is a GSE that issues securities that are neither guaranteed
nor insured by the full faith and credit of the U.S. Treasury and which has no
ability to borrow from the Treasury. While there are different degrees of credit
quality, all U.S. Government securities and securities issued by GSEs generally
are considered highly credit worthy.
The Fund reserves the right to invest up to 20% of its assets in other
securities, such as high yield securities, foreign bonds, and money market
instruments.
Although the Advisor considers the Fund to be a long maturity bond fund, the
Fund has no restrictions on its maturity or duration. The Advisor may, from time
to time, shorten or lengthen the duration of the Fund's portfolio to protect
principal in the event of rising or falling interest rates. In addition, the
Advisor may adjust the Fund's sector weightings and duration to attempt to
capture additional returns relative to the Fund's benchmark.
The Advisor may consider selling one of the Fund's holdings when a deterioration
in a company's credit worthiness is detected, an individual security comprises
too large of a position in the portfolio, a security's valuations are no longer
attractive or the intended profit has been realized, or a better opportunity
arises.
When the Advisor believes that market conditions warrant a temporary defensive
posture, the Fund may invest up to 100% of its assets in high-quality,
short-term debt securities and money market instruments. The taking of such a
temporary defensive posture may adversely impact the ability of the Fund to
achieve its investment objective.
PRINCIPAL INVESTMENT RISKS. Below is a description of the principal risks of
investing in the Fund.
FIXED INCOME SECURITIES RISK. The risks of investing in debt securities include
interest rate risk, which is the tendency of bond prices to fall when interest
rates rise and credit risk, which is the risk of an issuer defaulting on its
obligations of paying principal and interest. The prices of long-term bonds
(bonds with a remaining maturity of at least 10 years) tend to be more volatile
than the prices of bonds with a shorter remaining maturity.
Generally, the price of a bond moves in the opposite direction from interest
rates. As interest rates fall, the price of a bond tends to increase. With
respect to GSEs such as FHLB, Sallie-Mae, TVA, Fannie Mae, FFCB and Freddie Mac,
although the issuers may be chartered or sponsored by Acts of Congress, their
securities are neither insured nor guaranteed by the U.S. Treasury and therefore
have more issuer default risk than any direct obligation of the U.S. Treasury.
PRE-PAYMENT/CALL RISK. The prices of mortgage-backed securities also are
affected by changes in interest rates. Although mortgage-backed securities tend
to pay higher interest rates, they also carry additional risk. For instance,
their prices and yields typically assume that the securities will be redeemed at
a given time before maturity. When interest rates fall substantially, they
usually are redeemed early because the underlying mortgages often are prepaid.
The Fund would then have to reinvest the proceeds it receives because of those
redemptions at a lower rate. The price or yield of mortgage-backed securities
also may fall if they are redeemed after that date.
NON-INVESTMENT GRADE SECURITIES RISK. The Fund may invest up to 20% of its
assets in non-investment grade securities. High yield, or non-investment grade,
securities (also known as "junk bonds") are those rated below investment grade
by the primary rating agencies (e.g., below BB/Ba by S&P/Moody's) and are
considered speculative. Compared to investment grade debt securities,
non-investment grade debt securities tend to have more volatile prices and
increased price sensitivity to changing interest rates and adverse economic and
business developments. In addition, compared to investments in investment grade
securities, investments in non-investments grade securities are subject to
greater risk of loss due to default or a decline in credit quality, a greater
likelihood that adverse economic or company-specific events will make the issuer
unable to make interest and/or principal payments, and greater susceptibility to
negative market sentiment, leading to depressed prices and decreased liquidity.
FOREIGN INVESTMENT RISK. In addition, investments in foreign bonds are subject
to special risks in addition to those to which U.S. investments are subject.
These risks include political and economic risks, currency fluctuations, higher
transaction costs, delayed settlement, and less stringent investor protection
and disclosure standards of some foreign markets. These risks can make foreign
investments more volatile and less liquid than U.S. investments.
TURNOVER RISK. Through active trading, the Fund may have a high portfolio
turnover rate, which can mean higher taxable distributions and lower performance
due to increased brokerage costs.
VOLATILITY AND PERFORMANCE INFORMATION. The bar chart and table provide an
indication of the risks of an investment in the Fund by showing its performance
from year to year and over time, as well as compared to two broad-based
securities indices.
The returns assume that Fund distributions have been reinvested. The returns for
Class B, Class C and Advisor Shares will differ from the returns for Class A
Shares (which are shown in the bar chart) because of differences in expenses of
each class. The table assumes that shareholders redeem their fund shares at the
end of the period indicated.
Past performance does not indicate how the Fund will perform in the future.
The after tax returns included in the table are only for Class A Shares. After
tax returns for Class B, Class C and Advisor Shares will vary.
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31 FOR CLASS A SHARES
- ---------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
- ----------------------------------------------------------------------------------------------------------------------
10.19% 9.04% -4.76% 11.65% 6.99% 9.35% 2.85% 3.52% 1.86% 3.69%
- ----------------------------------------------------------------------------------------------------------------------
The Bar chart above does not reflect the impact of any applicable sales
charges or account fees, which would reduce returns.
Best quarter: Q3 2001 5.29%
Worst quarter: Q1 1996 -3.78%
Year to Date Return (1/1/06 to 9/30/06): 2.53%
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31 FOR INSTITUTIONAL SHARES
- ---------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
- ----------------------------------------------------------------------------------------------------------------------
10.55% 9.29% -4.41% 11.91% 7.25% 9.42% 3.20% 3.68% 2.11% 3.95%
- ----------------------------------------------------------------------------------------------------------------------
The Bar chart above does not reflect the impact of any applicable sales
charges or account fees, which would reduce returns.
Best quarter: Q3 2001 5.24%
Worst quarter: Q1 1996 -3.63%
Year to Date Return (1/1/06 to 9/30/06): 2.82%
- -------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED DECEMBER 31, 2006)(1)
- -------------------------------------------------------------------------------------------------------------------
INCEPTION DATE PAST YEAR PAST 5 YEARS PAST 10 YEARS
- -------------------------------------------------------------------------------------------------------------------
CLASS A SHARES(2) (WITH 5.00%) SALES CHARGE) 3/22/95
Return Before Taxes -1.20% 3.21% 4.82%
Return After Taxes on Distributions(3) -2.72% 1.72% 2.68%
Return After Taxes on Distributions and
Sale of Fund Shares(3) -0.81% 1.85% 2.78%
- -------------------------------------------------------------------------------------------------------------------
CLASS B SHARES(4) (WITH APPLICABLE CONTINGENT 3/20/95
DEFERRED SALES CHARGE)
Return Before Taxes -2.05% 3.06% 4.53%
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED DECEMBER 31, 2006)(1)
- -------------------------------------------------------------------------------------------------------------------
INCEPTION DATE PAST YEAR PAST 5 YEARS PAST 10 YEARS
- -------------------------------------------------------------------------------------------------------------------
CLASS C SHARES(4) (WITH APPLICABLE CONTINGENT 3/20/95
DEFERRED SALES CHARGE)
Return Before Taxes 3.01% 3.41% 4.54%
- -------------------------------------------------------------------------------------------------------------------
ADVISOR SHARES(5) (WITH 3.25% SALES CHARGE) 3/20/95
Returns Before Taxes 0.18% 3.26% 4.73%
- -------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES(6) 3/20/95
Return Before Taxes 3.95% 4.44% 5.59%
Return After Taxes on Distributions(7) 2.26% 2.84% 3.35%
Return After Taxes on Distributions and
Sale of Fund Shares(7) 2.54% 2.85% 3.39%
- -------------------------------------------------------------------------------------------------------------------
LEHMAN BROTHERS AGGREGATE BOND INDEX* (REFLECTS
NO DEDUCTION FOR FEES, EXPENSES OR TAXES) 4.33% 5.06% 6.24%
- -------------------------------------------------------------------------------------------------------------------
1. On October 29, 2001, the Kent Income Fund, a registered open-end investment
company managed by Fifth Third Asset Management, Inc. was merged into Fifth
Third Bond Fund.
2. For the period prior to October 29, 2001, the quoted performance of Class A
shares reflects the performance of the Investment shares of the Kent Income
Fund, adjusted to reflect the sales charges for Class A shares.
3. After tax returns are calculated using a standard set of assumptions. The
stated returns assume the highest historical federal income and capital
gains tax rules. Returns after taxes on distributions assumes a continued
investment in the Fund and shows the effect of taxes on Fund distributions.
Returns after taxes on distributions and sales of Fund shares assumes all
shares were redeemed at the end of each measurement period, and shows the
effect of any taxable gain (or offsetting loss) on redemption, as well as
the effects of taxes on Fund distributions. These after tax returns do not
reflect the effect of any applicable state and local taxes. Actual
after-tax returns depend on an investor's tax situation and may differ from
those shown. After tax returns are not relevant to investors holding shares
through tax-deferred programs, such as IRA or 401(k) plans.
4. The performance of Class B and Class C shares is based on the performance
for Institutional shares of the Kent Income Fund, adjusted to reflect the
expenses and sales charges for Class B and Class C shares, for the period
prior to the commencement of operations of Class B and Class C shares on
October 29, 2001.
5. For the period prior to October 29, 2001, the quoted performance of Advisor
shares reflects the performance of the Institutional shares of the Kent
Income Fund, adjusted to reflect the expenses and sales charges for Advisor
shares.
6. On October 29, 2001, the Kent Income Fund, a registered open-end investment
company managed by Fifth Third Asset Management, Inc. was merged into Fifth
Third Bond Fund. As such, for the period prior to October 29, 2001, the
quoted performance of Institutional shares reflects the performance of the
Institutional shares of the Kent Income Fund.
7. After tax returns are calculated using a standard set of assumptions. The
stated returns assume the highest historical federal income and capital
gains tax rules. Returns after taxes on distributions assumes a continued
investment in the Fund and shows the effect of taxes on Fund distributions.
Returns after taxes on distributions and sales of Fund shares assumes all
shares were redeemed at the end of each measurement period, and shows the
effect of any taxable gain (or offsetting loss) on redemption, as well as
the effects of taxes on Fund distributions. These after tax returns do not
reflect the effect of any applicable state and local taxes. Actual
after-tax returns depend on an investor's tax situation and may differ from
those shown. After tax returns are not relevant to investors holding shares
through tax-deferred programs, such as IRA or 401(k) plans.
* The Lehman Brothers Aggregate Bond Index(R) is an unmanaged total return
index measuring both capital price changes and income index provided by the
underlying universe of securities and is generally representative of the
performance of the bond market as a whole.
FIFTH THIRD PRIME MONEY MARKET FUND
- -----------------------------------
FUNDAMENTAL OBJECTIVE. Current income consistent with stability of principal.
PRINCIPAL INVESTMENT STRATEGIES. The Fund manages its portfolio subject to
strict SEC guidelines, which are designed so that the Fund may maintain a stable
$1.00 per share price, although there is no guarantee that it will do so. All of
the Fund's investments are expected to mature in the short-term (397 days or
less) and the dollar-weighted average portfolio maturity of the Fund may not
exceed 90 days.
The Fund invests at least 95% of its portfolio in high-quality securities called
"first tier" securities or unrated securities that are considered equivalent by
the Fund's Advisor. These generally will be domestic or foreign corporate
securities, including commercial paper that, at the time of purchase, are rated
by such firms as Standard & Poor's and Moody's in their highest short-term major
rating categories, or unrated securities that are considered equivalent by the
Fund's Advisor. They also may include securities issued or guaranteed as to
principal or interest by the U.S. Treasury or any U.S. Government agency or
instrumentality. Additionally, shares of money market investment companies that
invest exclusively in these securities may be used.
The Fund reserves the right to invest up to 5% of its total assets in "second
tier" securities, which generally are corporate securities that, at the time of
purchase, are rated by such firms as Standard & Poor's and Moody's in their
second highest short-term major rating categories, or unrated securities that
are considered equivalent by the Fund's Advisor. Some corporate securities
purchased by the Fund may be restricted securities, that is, they may be subject
to limited resale rights.
The Fund may also invest in asset-backed securities and repurchase agreements
collateralized by the securities mentioned above.
PRINCIPAL INVESTMENT RISKS. The Fund's principal risks include interest rate
risk, net asset value risk, credit risk and foreign investment risk.
INTEREST RATE RISK involves the possibility that the Fund's yield will decrease
due to a decrease in interest rates or that the value of the Fund's investments
will decline due to an increase in interest rates.
NET ASSET VALUE RISK involves the possibility that the Fund will be unable to
meet its goal of a constant $1.00 per share.
CREDIT RISK involves the risk that an issuer cannot make timely interest and
principal payments on its debt securities.
FOREIGN INVESTMENT RISK involves the risk associated with higher transaction
costs, delayed settlements, and adverse economic, political or social
developments.
VOLATILITY AND PERFORMANCE INFORMATION. The bar chart and table provide an
indication of the risks of an investment in the Fund by showing its performance
from year to year and over time.
The returns assume that Fund distributions have been reinvested.
Past performance does not indicate how the Fund will perform in the future.
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31 FOR CLASS A SHARES
- ---------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
- ----------------------------------------------------------------------------------------------------------------------
5.21% 5.05% 4.53% 5.80% 3.59% 1.19% 0.49% 0.69% 2.53% 4.35%
- ----------------------------------------------------------------------------------------------------------------------
The Bar chart above does not reflect the impact of any applicable sales
charges or account fees, which would reduce returns.
Best quarter: Q4 2000 1.51%
Worst quarter: Q4 2003 0.09%
Year to Date Return (1/1/06 to 9/30/06): 3.15%
YEAR-BY-YEAR TOTAL RETURNS AS OF 12/31 FOR INSTITUTIONAL SHARES
- ---------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
- ----------------------------------------------------------------------------------------------------------------------
5.21% 5.13% 4.79% 6.06% 3.84% 1.45% 0.74% 0.94% 2.78% 4.61%
- ----------------------------------------------------------------------------------------------------------------------
The Bar chart above does not reflect the impact of any applicable sales
charges or account fees, which would reduce returns.
Best quarter: Q4 2000 1.57%
Worst quarter: Q4 2003 0.15%
Year to Date Return (1/1/06 to 9/30/06): 3.35%
- -------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED DECEMBER 31, 2006)
- -------------------------------------------------------------------------------------------------------------------
INCEPTION DATE PAST YEAR PAST 5 YEARS PAST 10 YEARS
- -------------------------------------------------------------------------------------------------------------------
CLASS A SHARES 6/14/89 4.35% 1.84% 3.33%
- -------------------------------------------------------------------------------------------------------------------
CLASS B SHARES(1) (WITH APPLICABLE CONTINGENT
DEFERRED SALES CHARGE) 6/14/89 -1.43% 0.89% 2.59%
- -------------------------------------------------------------------------------------------------------------------
CLASS C SHARES(2) (WITH APPLICABLE CONTINGENT
DEFERRED SALES CHARGE) 6/14/89 3.57% 1.28% 2.60%
- -------------------------------------------------------------------------------------------------------------------
ADVISOR SHARES(3) 6/14/89 4.09% 1.63% 3.05%
- -------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES 6/14/89 4.61% 2.09% 3.54%
- -------------------------------------------------------------------------------------------------------------------
1. The performance of Class B shares is based on the performance for Class A
shares, adjusted to reflect the expenses and sales charges for Class B
shares, for the period prior to the commencement of operations of Class B
shares on October 11, 2000.
2. The performance of Class C shares is based on the performance for Class A
shares, adjusted to reflect the expenses and sales charges for Class C
shares, for the period prior to the commencement of operations of Class C
shares on May 1, 2002.
3. The performance of Advisor shares is based on the performance for Class A
shares, adjusted to reflect the expenses for Advisor shares, for the period
prior to the commencement of operations of Advisor shares on October 29,
2001.
To obtain current yield information, visit www.53.com or call 1-800-282-5706.
ADDITIONAL INFORMATION ABOUT THE FUNDS' INVESTMENTS
- ---------------------------------------------------
NAME POLICIES
- -------------
To comply with Securities and Exchange Commission ("SEC") rules regarding the
use of descriptive words in a fund's name, some Funds have adopted policies of
investing at least 80% of their net assets plus any borrowings made for
investment purposes in specific types of investments or industries. Each Fund's
policy is described in its summary description under the heading "Principal
Investment Strategies." A Fund will not change its name policy without providing
its shareholders at least 60 days' prior written notice.
INVESTMENT PRACTICES
- --------------------
Each Fund may invest in a variety of securities and employ a number of
investment techniques. The following table includes a list of permissible
securities and investment techniques that each Fund may use; however, the
selection of such securities and techniques is left to the investment discretion
of the Advisor. Each security and technique involves certain risks. Following
the table is a discussion of the risks associated with these securities and
techniques. You may also consult the Statement of Additional Information for
additional details regarding these permissible investments.
High-Yield/
Asset Delayed Foreign Guaranteed High-Risk
Backed Common Convertible Delivery/ Currency Investment Debt
Securities Stock Securities When Issueds Derivatives Transactions Contracts Securities
- -----------------------------------------------------------------------------------------------------------------------------------
EQUITY FUNDS
- -----------------------------------------------------------------------------------------------------------------------------------
Mid Cap
Growth
Fund X X X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
Quality
Growth Fund X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED
INCOME
FUNDS
- -----------------------------------------------------------------------------------------------------------------------------------
Bond Fund X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
MONEY
MARKET
FUNDS
- -----------------------------------------------------------------------------------------------------------------------------------
Prime Money
Market Fund X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
Investment Investment Money Mortgage Mortgage
Illiquid Company Grade Loan Market Backed Dollar
Securities Securities Bonds Participations Instruments Securities Rolls
- ---------------------------------------------------------------------------------------------------------------------
EQUITY FUNDS
- ---------------------------------------------------------------------------------------------------------------------
Mid Cap
Growth
Fund X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------
Quality
Growth Fund X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------
FIXED
INCOME
FUNDS
- ---------------------------------------------------------------------------------------------------------------------
Bond Fund X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------
MONEY
MARKET
FUNDS
- ---------------------------------------------------------------------------------------------------------------------
Prime Money
Market Fund X X X X X X
- ---------------------------------------------------------------------------------------------------------------------
Non-U.S.
Traded Real Estate Reverse
Municipal Foreign Preferred Investment Restricted Repurchase Securities Shot-Term
Securities Securities Stocks Trusts Securities Agreements Lending Trading
- -----------------------------------------------------------------------------------------------------------------------------------
EQUITY FUNDS
- -----------------------------------------------------------------------------------------------------------------------------------
Mid Cap
Growth
Fund X X X X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
Quality
Growth Fund X X X X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
FIXED
INCOME
FUNDS
- -----------------------------------------------------------------------------------------------------------------------------------
Bond Fund X X X X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
MONEY
MARKET
FUNDS
- -----------------------------------------------------------------------------------------------------------------------------------
Prime Money
Market Fund X X X X X
- -----------------------------------------------------------------------------------------------------------------------------------
U.S. U.S Variable and
Small and Government Traded U.S. Floating Zero Coupon
Micro Cap Stripped Agency Foreign Treasury Rate Debt
Equities Obligations Securities Securities Obligations Instruments Warrants Obligations
- ------------------------------------------------------------------------------------------------------------------------------------
EQUITY FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
Mid Cap
Growth
Fund X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
Quality
Growth Fund X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
FIXED
INCOME
FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
Bond Fund X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
MONEY
MARKET
FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
Prime Money
Market Fund X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
ASSET-BACKED SECURITIES: Securities secured by company receivables, home equity
loans, truck and auto loans, leases, credit card receivables and securities
backed by other types of receivables or other assets.
COLLATERALIZED LOAN OBLIGATIONS: A type of asset-backed security that is an
obligation of a trust typically collateralized by pools of loans.
COMMON STOCK: Shares of ownership of a company.
CONVERTIBLE SECURITIES: Bonds or preferred stock that convert to common stock.
DELAYED DELIVERY TRANSACTIONS/FORWARD COMMITMENTS/WHEN-ISSUEDS: A purchase of,
or contract to purchase, securities at a fixed price for delivery at a future
date. Under normal market conditions, a Fund's obligations under these
commitments will not exceed 25% of its total assets.
DERIVATIVES: Instruments whose value is derived from an underlying contract,
index or security, or any combination thereof, including futures, options,
(e.g., put and calls), options on futures, swaps, swaptions, some
mortgage-backed securities and custody receipts.
CALL AND PUT OPTIONS: A call option gives the buyer the right to buy, and
obligates the seller of the option to sell, a security at a specified price. A
put option gives the buyer the right to sell, and obligates the seller of the
option to buy a security at a specified price. The Money Market Funds, Dividend
Growth Fund, Intermediate Municipal Bond Fund, and Ohio Municipal Bond Fund may
not invest in these securities. In addition, the following Funds may only buy or
sell listed put options on financial futures contracts or buy or sell listed
call options or over-the-counter call options on futures contracts: Micro Cap
Value Fund, Multi Cap Value Fund, and Strategic Income Fund.
CUSTODY RECEIPTS: Derivative products which, in the aggregate, evidence
direct ownership in a pool of securities, such as Lehman Brothers TRAINs and
Morgan Stanley TRACERs.
FUTURES AND RELATED OPTIONS: A contract providing for the future sale and
purchase of a specified amount of a specified security, class of securities, or
an index at a specified time in the future and at a specified price. The Money
Market Funds, Dividend Growth Fund, Intermediate Municipal Bond Fund, and Ohio
Municipal Bond Fund may not invest in these.
STOCK-INDEX OPTIONS: A security that combines features of options with
securities trading using composite stock indices. The Money Market Funds, Bond
Funds, and Dividend Growth Fund may not invest in these.
STRUCTURED NOTES: Debt obligations that may include components such as
swaps, forwards, options, caps or floors, which change their return pattern.
They may be used to alter the risks to a portfolio or, alternatively, may be
used to expose a portfolio to asset classes or markets in which one does not
desire to invest directly. The Money Market Funds may not invest in these.
SWAPS AND SWAPTIONS: Two-party contracts where the parties agree to
exchange net returns (or differentials in rates of return) earned or realized on
particular predetermined investments or instruments. The Money Market Funds may
not invest in these.
FOREIGN CURRENCY TRANSACTIONS: Foreign currency transactions include forward
foreign currency exchange contracts, foreign currency options, and foreign
currency futures transactions.
FOREIGN SECURITIES--NON-U.S. TRADED: Stocks, bonds, and other obligations issued
by foreign companies, foreign governments, and supranational entities that trade
on non-U.S. exchanges.
FOREIGN SECURITIES--U.S. TRADED: Stocks, bonds, and other obligations issued by
foreign companies, foreign governments, and supranational entities that trade on
U.S. exchanges.
AMERICAN DEPOSITARY RECEIPTS ("ADRS"): ADRs are foreign shares of a company
held by a U.S. bank that issues a receipt evidencing ownership.
YANKEE BONDS AND SIMILAR DEBT OBLIGATIONS: U.S.-dollar denominated bonds
issued by foreign corporations or governments.
CANADA BONDS: Issued by Canadian provinces.
SOVEREIGN BONDS: Issued by the government of a foreign country.
SUPRANATIONAL BONDS: Issued by supranational entities, such as the
World Bank and European Investment Bank.
GUARANTEED INVESTMENT CONTRACTS: Contract between a fund and an insurance
company that guarantees a specific rate of return on the invested capital over
the life of the contract.
HIGH-YIELD/HIGH-RISK DEBT SECURITIES: High-yield/high-risk debt securities are
securities that are rated below investment grade by the primary rating agencies
(e.g., BB or lower by Standard & Poor's and Ba or lower by Moody's). These
securities are considered speculative and involve greater risk of loss than
investment grade debt securities. Other terms commonly used to describe such
securities include "lower rated bonds," "non-investment grade bonds" and "junk
bonds."
ILLIQUID SECURITIES: Securities that cannot be disposed of within seven days in
the ordinary course of business at approximately the amount at which the Fund
has valued the security.
INVESTMENT COMPANY SECURITIES: Shares of investment companies. Investment
companies may include money market funds and shares of other registered
investment companies for which the Advisor to a Fund or any of its affiliates
serves as investment advisor, administrator or distributor.
BEAR FUNDS: A fund intended to increase/decrease in value inversely to the stock
or equity index to which it relates. The Money Market Funds may not invest in
these.
CLOSED-END FUNDS: Funds traded on an exchange, which are not redeemable on a
continuous basis. The Money Market Funds may not invest in these.
EXCHANGE-TRADED FUNDS ("ETFS"): ETFs entitle a holder to receive proportionate
quarterly cash distributions corresponding to the dividends that accrue to the
index stocks in the underlying portfolios, less trust expenses. Examples of ETFs
include Standard & Poor's Depositary Receipts ("SPDRs"). A SPDR is an ownership
interest in a long-term unit investment trust that holds a portfolio of common
stocks designed to track the price performance and dividend yield of an index,
such as the S&P 500(R) Index. iShares(R) are also ETFs and are index funds that
trade like shares. Each share represents a portfolio of stocks designed to track
closely one specific index. The Money Market Funds may not invest in these.
LEVERAGED FUNDS: Funds that utilize leverage in an attempt to maximize gains.
The Money Market Funds may not invest in these.
INVESTMENT GRADE BONDS: Interest-bearing or discounted securities that obligate
the issuer to pay the bondholder a specified sum of money, usually at specific
intervals, and to repay the principal amount of the loan at maturity. These
bonds are rated BBB or better by S&P or Baa or better by Moody's or similarly
rated by other nationally recognized statistical rating organizations, or, if
not rated, determined to be of comparable quality by the Advisor.
LOAN PARTICIPATIONS: Interests in loans to U.S. corporations that are
administered by the lending bank or agent for a syndicate of lending banks.
MONEY MARKET INSTRUMENTS: Investment-grade, U.S.-dollar denominated debt
securities that have remaining maturities of one year or less. These securities
may include U.S. Government obligations, commercial paper and other short-term
corporate obligations, repurchase agreements collateralized with U.S. Government
securities, certificates of deposit, bankers' acceptances, and other financial
institution obligations. Money market instruments may carry fixed or variable
interest rates.
BANKERS' ACCEPTANCES: Bills of exchange or time drafts drawn on and
accepted by a commercial bank. Maturities are generally six months or less.
CERTIFICATES OF DEPOSIT: Negotiable instruments with a stated maturity.
COMMERCIAL PAPER: Secured and unsecured short-term promissory notes issued
by corporations and other entities. Maturities generally vary from a few days to
nine months.
REPURCHASE AGREEMENTS: The purchase of a security and the simultaneous
commitment to return the security to the seller at an agreed upon price on an
agreed upon date.
TIME DEPOSITS: Non-negotiable receipts issued by a bank in exchange for the
deposit of funds.
MORTGAGE-BACKED SECURITIES: Debt obligations secured by real estate loans
and pools of loans. These include collateralized mortgage obligations and real
estate mortgage investment conduits.
COLLATERALIZED MORTGAGE OBLIGATIONS: Mortgage-backed bonds that separate
mortgage pools into different maturity classes.
MORTGAGE DOLLAR ROLLS: Transactions in which a Fund sells securities and
simultaneously contracts with the same counterparty to repurchase similar but
not identical securities on a specified future date.
MUNICIPAL SECURITIES: Securities issued by a state or political subdivision to
obtain funds for various public purposes. Municipal securities include (a)
governmental lease certificates of participation issued by state or municipal
authorities where payment is secured by installment payments for equipment,
buildings, or other facilities being leased by the state or municipality; (b)
municipal notes and tax-exempt commercial paper; (c) serial bonds; (d) tax
anticipation notes sold to finance working capital needs of municipalities in
anticipation of receiving taxes at a later date; (e) bond anticipation notes
sold in anticipation of the issuance of long-term bonds in the future; (f)
pre-refunded municipal bonds whose timely payment of interest and principal is
ensured by an escrow of U.S. Government obligations; and (g) general obligation
bonds.
STAND-BY COMMITMENTS: Contract where a dealer agrees to purchase at a
fund's option a specified municipal obligation at its amortized cost value to a
fund plus accrued interest.
PREFERRED STOCKS: Equity securities that generally pay dividends at a specified
rate and have preference over common stock in the payment of dividends and
liquidation. These securities generally do not carry voting rights.
REAL ESTATE INVESTMENT TRUSTS ("REITS"): Pooled investment vehicles investing
primarily in income producing real estate or real estate loans or interest.
RESTRICTED SECURITIES: Securities not registered under the Securities Act of
1933, such as privately placed commercial paper and Rule 144A securities.
REVERSE REPURCHASE AGREEMENTS: The sale of a security and the simultaneous
commitment to buy the security back at an agreed upon price on an agreed upon
date. This is treated as a borrowing by a Fund.
SECURITIES LENDING: The lending of up to 3313% of the Fund's total assets, plus
the amount of the securities out on loan. In return, the Fund will receive cash,
other securities, and/or letters of credit.
SHORT-TERM TRADING: The sale of a security soon after its purchase. A portfolio
engaging in such trading will have higher turnover and transaction expenses.
SMALL AND MICRO CAP EQUITIES: Equity securities of companies with market
capitalizations within or lower than those included in the Russell 2000(R)
Index.
STRIPPED OBLIGATIONS: U.S. Treasury Obligations and their unmatured interest
coupons that have been separated ("stripped") by their holder, typically a
custodian bank or other institution.
TRUST PREFERRED SECURITIES: Securities possessing characteristics of both equity
and debt issues.
U.S. GOVERNMENT AGENCY SECURITIES: Securities issued by agencies and
instrumentalities of the U.S. Government. These include Fannie Mae and Freddie
Mac.
U.S. TREASURY OBLIGATIONS: Bills, notes, bonds, Ginnie Maes, separately traded
registered interest and principal securities, and coupons under bank entry
safekeeping.
VARIABLE AND FLOATING RATE INSTRUMENTS: Obligations with interest rates that are
reset daily, weekly, quarterly or according to some other period and that may be
payable to a Fund on demand.
WARRANTS: Securities, typically issued with preferred stock or bonds, which give
the holder the right to buy a proportionate amount of common stock at a
specified price.
ZERO-COUPON DEBT OBLIGATIONS: Bonds and other debt obligations that pay no
interest, but are issued at a discount from their value at maturity. When held
to maturity, their entire return equals the difference between their issue price
and their maturity value.
INVESTMENT RISKS
- ----------------
Below is a discussion of the types of risks inherent in the securities and
investment techniques listed above as well as those risks discussed in
"Principal Investment Risks." Because of these risks, the value of the
securities held by the Funds may fluctuate, as will the value of your investment
in the Funds. Certain investments and Funds are more susceptible to these risks
than others. Equity securities are subject mainly to market risk. Fixed income
securities are primarily influenced by market, credit and pre-payment risks,
although certain securities may be subject to additional risks.
CREDIT RISK. The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation. Credit risk is generally higher for non-investment grade securities.
The price of a security can be adversely affected prior to actual default as its
credit status deteriorates and the probability of default rises. The following
investments and practices are subject to credit risk: asset-backed securities,
bankers' acceptances, bonds, call and put options, certificates of deposit,
commercial paper, convertible securities, derivatives, futures and related
options, guaranteed investment contracts, high-yield/high-risk/debt securities,
investment grade bonds, loan participations, money market instruments,
mortgage-backed securities, municipal securities, real estate investment trusts
(REITs), securities lending, stock-index options, time deposits, U.S. Government
agency securities, variable and floating rate instruments, warrants, when-issued
and delayed delivery transactions, Yankee bonds and similar debt obligations,
and zero-coupon debt obligations.
FOREIGN INVESTMENT RISK. The risk associated with higher transaction costs,
delayed settlements, currency controls and adverse economic developments related
to foreign investments. This also includes the risk that fluctuations in the
exchange rates between the U.S. dollar and foreign currencies may negatively
affect an investment. Adverse changes in exchange rates may erode or reverse any
gains produced by foreign currency denominated investments and may widen any
losses. Exchange rate volatility also may affect the ability of an issuer to
repay U.S. dollar denominated debt, thereby increasing credit risk. Foreign
securities also may be affected by incomplete or inaccurate financial
information on companies, social upheavals or political actions ranging from tax
code changes to governmental collapse. These risks are more significant in
emerging markets. The following investments and
practices are subject to foreign investment risk: American depository receipts
(ADRs), foreign currency transactions, non-U.S. traded and U.S. traded foreign
securities, and Yankee bonds and similar debt obligations.
INTEREST RATE RISK. The risk that debt prices overall will decline over short or
even long periods due to rising interest rates. A rise in interest rates
typically causes a fall in values, while a fall in rates typically causes a rise
in values. Interest rate risk should be modest for shorter-term securities,
moderate for intermediate-term securities, and high for longer-term securities.
Generally, an increase in the average maturity of a Fund will make it more
sensitive to interest rate risk. The market prices of securities structured as
zero coupon are generally affected to a greater extent by interest rate changes.
These securities tend to be more volatile than securities that pay interest
periodically. The following investments and practices are subject to interest
rate risk: asset-backed securities, bankers' acceptances, bonds, certificates of
deposit, collateralized mortgage obligations, commercial paper, derivatives,
high-yield/high-risk/debt securities, investment grade bonds, loan
participations, mortgage-backed securities, REITs, stripped obligations, U.S.
Government agency securities, U.S. Treasury obligations, Yankee bonds and
similar debt obligations, and zero-coupon debt obligations.
INVERSE MARKET RISK. The particular type of market risk (see summary below)
associated with "bear funds" that are intended to perform when equity markets
decline. These investments will lose value when the equity markets to which they
are tied are increasing in value.
LEVERAGE RISK. The risk associated with securities or practices that multiply
small index or market movements into large changes in value. Leverage is often
associated with investments in derivatives, but also may be embedded directly in
the characteristics of other securities.
HEDGED. When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that a
Fund also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa.
Hedges are sometimes subject to imperfect matching between the derivative
and underlying security, and there can be no assurance that a Fund's
hedging transactions will be effective.
SPECULATIVE. To the extent that a derivative is not used as a hedge, a Fund
is directly exposed to the risks of that derivative. Gains or losses from
speculative positions in a derivative may be substantially greater than the
derivative's original cost.
The following investments and practices are subject to leverage risk: bear
funds, call and put options, derivatives, forward commitments, futures and
related options, leveraged funds, repurchase agreements, reverse repurchase
agreements, securities lending, stock-index options, and when-issued and delayed
delivery transactions.
LIQUIDITY RISK. The risk that certain securities may be difficult or impossible
to sell at the time and the price that would normally prevail in the market. The
seller may have to lower the price, sell other securities instead or forego an
investment opportunity, any of which could have a negative effect on investment
management or performance. This includes the risk of missing out on an
investment opportunity because the assets necessary to take advantage of it are
tied up in less advantageous investments. The following investments and
practices are subject to liquidity risk: asset-backed securities, bankers'
acceptances, bear funds, call and put options, certificates of deposit,
closed-end funds, commercial paper, derivatives, non-U.S. traded and U.S. traded
foreign securities, forward commitments, futures and related options,
high-yield/high-risk/debt securities, illiquid securities, loan participations,
REITs, restricted securities, securities lending, small and micro cap equities,
stock-index options, time deposits, variable and floating rate instruments, and
when-issued and delayed delivery transactions.
MANAGEMENT RISK. The risk that a strategy used by a Fund's portfolio manager may
fail to produce the intended result. This includes the risk that changes in the
value of a hedging instrument will not match those of the asset being hedged.
Incomplete matching can result in unanticipated risks. The following investments
and practices are subject to management risk: call and put options, derivatives,
futures and related options, REITs, and stock-index options.
MARKET RISK. The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than the price originally paid for it, or less than it was worth
at an earlier time. Market risk may affect a single issuer, industrial sector of
the economy or the market as a whole. There is also the risk that the current
interest rate may not accurately reflect existing market rates. For fixed income
securities, market risk is largely, but not exclusively, influenced by changes
in interest rates. A rise in interest rates typically causes a fall in values,
while a fall in rates typically causes a rise in values. Finally, key
information about a security or market may be inaccurate or unavailable. This is
particularly relevant to investments in foreign securities. The following
investments/investment practices are subject to market risk: ADRs, asset-backed
securities, bankers' acceptances, bonds, call and put options, certificates of
deposit, closed-end funds, commercial paper, common stock, convertible
securities, derivatives, exchange-traded funds (ETFs), foreign currency
transactions, non-U.S. traded and U.S. traded foreign securities, futures and
related options, high-yield/high-risk/debt securities, illiquid securities,
investment company securities, investment grade bonds, leveraged funds, money
market instruments, mortgage-backed securities, mortgage dollar rolls, municipal
securities, preferred stocks, REITs, repurchase agreements, restricted
securities, reverse repurchase agreements, securities lending, short-term
trading, small and micro cap equities, stand-by commitments, stock-index
options, time deposits, variable and floating rate instruments, warrants,
when-issued and delayed delivery transactions, Yankee bonds and similar debt
obligations, and zero-coupon debt obligations.
POLITICAL RISK. The risk of losses attributable to unfavorable governmental or
political actions, seizure of foreign deposits, changes in tax or trade
statutes, and governmental collapse and war. The following
investments/investment practices are subject to political risk: ADRs, bonds,
foreign currency transactions, non-U.S. traded and U.S. traded foreign
securities, municipal securities, and Yankee bonds and similar debt obligations.
PRE-PAYMENT/CALL RISK. The risk that the principal repayment of a security will
occur at an unexpected time. Pre-payment risk is the chance that the repayment
of a mortgage will occur sooner than expected. Call risk is the possibility
that, during times of declining interest rates, a bond issuer will "call"--or
repay--higher yielding bonds before their stated maturity. Changes in
pre-payment rates can result in greater price and yield volatility. Pre-payments
and calls generally accelerate when interest rates decline. When mortgage and
other obligations are pre-paid or called, a Fund may have to reinvest in
securities with a lower yield. In this event, the Fund would experience a
decline in income--and the potential for taxable capital gains. Further, with
early pre-payment, a Fund may fail to recover any premium paid, resulting in an
unexpected capital loss. Pre-payment/call risk is generally low for securities
with a short-term maturity, moderate for securities with an intermediate-term
maturity, and high for securities with a long-term maturity. The following
investments/investment practices are subject to pre-payment/call risk:
asset-backed securities, bonds, collateralized mortgage obligations,
mortgage-backed securities, and mortgage dollar rolls.
REGULATORY RISK. The risk associated with federal and state laws that may
restrict the remedies that a lender has when a borrower defaults on loans. These
laws include restrictions on foreclosures, redemption rights after foreclosure,
federal and state bankruptcy and debtor relief laws, restrictions on "due on
sale" clauses, and state usury laws. The following investments/investment
practices are subject to regulatory risk: asset-backed securities,
mortgage-backed securities, mortgage dollar rolls, and municipal securities.
SMALLER COMPANY RISK. The risk associated with investment in companies with
smaller market capitalizations. These investments may be riskier than
investments in larger, more established companies. Small companies may be more
vulnerable to economic, market and industry changes. Because economic events
have a greater impact on smaller companies, there may be greater and more
frequent changes in their stock price. Small and Micro Cap Equities are subject
to smaller company risk.
TAX RISK. The risk that the issuer of securities will fail to comply with
certain requirements of the Internal Revenue Code, which would cause adverse tax
consequences. Municipal securities are subject to tax risk.
TURNOVER RISK. The risk that, through active trading, the Fund may have a high
portfolio turnover rate, which can mean higher taxable distributions and lower
performance due to increased brokerage costs.
INVESTMENT IN EXCHANGE-TRADED FUNDS. The Funds, except the Money Market Funds,
may each invest in exchange-traded funds, such as iShares(R) Trust and
iShares(R), Inc. ("iShares(R)").(2)
iShares(R) is a registered investment company unaffiliated with the Funds that
offers several series, each of which seeks to replicate the performance of a
stock market index or a group of stock markets in a particular geographic area.
Thus, investment in iShares(R) offers, among other things, an efficient means to
achieve diversification to a particular industry that would otherwise only be
possible through a series of transactions and numerous holdings. Although
similar diversification benefits may be achieved through an investment in
another investment company, exchange-traded funds generally offer greater
liquidity and lower expenses. Because an exchange-traded fund charges its own
fees and expenses, fund shareholders will indirectly bear these costs. The Funds
will also incur brokerage commissions and related charges when purchasing shares
in an exchange-traded fund in secondary market transactions. Unlike typical
investment company shares, which are valued once daily, shares in an
exchange-traded fund may be purchased or sold on a listed securities exchange
throughout the trading day at market prices that are generally close to net
asset value.
Because most exchange-traded funds are investment companies, investment in most
such funds would, absent exemptive relief, be limited under applicable federal
statutory provisions. Those provisions restrict a fund's investment in the
shares of another investment company to up to 5% of its assets (which may
represent no more than 3% of the securities of such other investment company)
and limit aggregate investments in all investment companies to 10% of assets,
unless otherwise permitted under the Investment Company Act of 1940 or the rules
thereunder. Upon meeting certain conditions, the Funds may invest their
respective assets in iShares(R) in excess of the statutory limit in reliance on
an exemptive order issued to that entity.
FUND MANAGEMENT
- ---------------
INVESTMENT ADVISOR
- ------------------
Fifth Third Asset Management, Inc., (the "Advisor" or "FTAM"), 38 Fountain
Square Plaza, Cincinnati, Ohio 45202, serves as investment advisor to all Funds.
The Advisor is a wholly-owned subsidiary of Fifth Third Bank. Fifth Third Bank
is a wholly-owned subsidiary of Fifth Third Financial Corporation, which is in
turn a wholly-owned subsidiary of Fifth Third Bancorp. FTAM provides
comprehensive advisory services for institutional and personal clients. FTAM
offers a broadly diversified asset management product line utilizing proprietary
mutual funds, commingled funds, and separate accounts. Through teams of
experienced and knowledgable investment professionals, advanced research
resources, and disciplined investment processes, the Advisor's goal is to
produce superior, long-term investment results and client satisfaction.
Subject to the supervision of the Funds' Board of Trustees, the Advisor manages
the Funds' assets, including buying and selling portfolio securities. The
Advisor employs an experienced staff of over 40 professional investment
analysts, portfolio managers and traders, and uses several computer-based
systems in conjunction with fundamental analysis to identify investment
opportunities. The Advisor also furnishes office space and certain
administrative services to the Funds.
As of March 31, 2007, Fifth Third Asset Management, Inc. had approximately $21.6
billion of assets under management.
A discussion of the basis for the Board of Trustees' approval of the Funds'
investment advisory contracts is included in the shareholder reports for the
period during which the Board of Trustees approved such contracts.
The Advisor may appoint one or more subadvisors to manage all or a portion of
the assets of the Funds. On September 28, 2005, the Securities and Exchange
Commission (SEC) granted exemptive relief to the Fifth Third Funds and the
Advisor to permit the Advisor, subject to certain conditions, including the
one-time approval of the
- ----------
(2) iShares(R) is a registered trademark of Barclays Global Investors, N.A.
("BGI"). Neither BGI nor the iShares(R) Funds make any representations regarding
the advisability of investing in an iShares(R) fund.
Fifth Third Funds' Board of Trustees and shareholders to appoint and replace
subadvisors, enter into subadvisory agreements, and amend and terminate
subadvisory agreements on behalf of the Funds without shareholder approval. The
Advisor has received the one-time approval from the Fifth Third Funds' Board of
Trustees and shareholders. The exemptive order gives the Advisor the ability to
change the fee payable to a subadvisor or appoint a new subadvisor at a fee
different than that paid to the current subadvisor, which in turn may result in
a different fee retained by the Advisor.
The management and subadvisory fees, after fee waivers, paid by the Funds for
the fiscal year ended July 31, 2007 are as follows:
- --------------------------------------------------------------------------------
AS PERCENTAGE OF AVERAGE
NET ASSETS
- --------------------------------------------------------------------------------
Fifth Third Mid Cap Growth Fund 0.80%
- --------------------------------------------------------------------------------
Fifth Third Quality Growth Fund 0.80%
- --------------------------------------------------------------------------------
Fifth Third Bond Fund 0.53%
- --------------------------------------------------------------------------------
Fifth Third Prime Money Market Fund 0.40%
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS
- ------------------
FIFTH THIRD ASSET MANAGEMENT, INC.
SCOTT A. BILLEADEAU has been the portfolio manager of the FIFTH THIRD MID CAP
GROWTH FUND since June 2003, of the FIFTH THIRD SMALL CAP GROWTH FUND since
February 2005, and of the FIFTH THIRD TECHNOLOGY FUND since November 2003. A
Chartered Financial Analyst, Mr. Billeadeau graduated from Princeton University
with a degree in Economics. He started his career at IDS/American Express (now
Ameriprise) in 1985 as a statistical project analyst. In 1991, he joined Pacific
Century Advisers, a subsidiary of Security Pacific Bank (which was subsequently
acquired by Bank of America) as a portfolio manager and analyst. In 1994, he
assumed management responsibilities for all small- and mid-cap assets for Bank
of America. Mr. Billeadeau joined Nation's Bank's subsidiary, Tradestreet
Investment Associates, Inc., in 1997, where he was the Director and Senior
Portfolio Manager responsible for the mid-cap and small-cap growth strategies.
Mr. Billeadeau joined Investment Advisers, Inc. in July of 1999 and became a
principal of Paladin Investment Associates, LLC upon its launch on December 1,
2000. At Paladin, Mr. Billeadeau was a Senior Portfolio Manager of small,
small-to-mid cap and mid-cap growth strategies. Additionally, in 2000, Scott was
elected to the Board of Directors of FactSet Research Systems, a NYSE listed
company, where he serves as Chairman of the audit committee. Mr. Billeadeau has
20 years of investment experience.
JOHN L. CASSADY III has been the portfolio manager of the FIFTH THIRD BOND FUND
and the FIFTH THIRD INTERMEDIATE BOND FUND since November 1999, of the FIFTH
THIRD U.S. GOVERNMENT BOND FUND since October 2001, and of the FIFTH THIRD
BALANCED FUND (fixed income portion) since August 2002. Mr. Cassady is a Senior
Portfolio Manager - Taxable Fixed Income for Fifth Third Asset Management, Inc.
Prior to joining Fifth Third Asset Management, Inc.'s predecessor, Lyon Street
Asset Management, in 1999, Mr. Cassady spent eight years as a portfolio manager
for APAM, Inc. Mr. Cassady earned his Chartered Financial Analyst designation in
1999 and has over eighteen years of investment experience, including thirteen
years of fixed income portfolio management experience. He earned his BS in
Industrial Management from the Georgia Institute of Technology.
AMY DENN has been a portfolio manager for the FIFTH THIRD BALANCED FUND (equity
portion) since January 2006 and for the FIFTH THIRD QUALITY GROWTH FUND since
November 2006. Ms. Denn joined Fifth Third Asset Management in March 2003 as
Portfolio Manager of Core Strategies. Prior to joining FTAM, she spent thirteen
years with Minneapolis-based Investment Advisers, Inc., and then over three
years as a portfolio manager with Paladin Investment Associates. Ms. Denn
graduated from Minnesota State University, Mankato in 1987 with a BS degree in
Business Administration, majoring in Accounting and Finance. Ms. Denn has nine
years of investment experience.
STEVEN E. FOLKER has been the portfolio manager of the Fifth Third Technology
Fund since June 2007, the Fifth Third Quality Growth Fund since February 1993,
and the portfolio manager of the Fifth Third LifeModel Funds(SM) since August
2006. Mr. Folker is the Managing Director of Growth Strategies for Fifth Third
Asset Management, Inc. and is a Vice President of Fifth Third Bank. He has
earned his Chartered Financial Analyst designation and has over twenty-five
years of investment experience. He earned a BBA in Finance & Accounting and an
M.S. - Business in Finance, Investments & Banking from the University of
Wisconsin.
MARTIN E. HARGRAVE has been the portfolio manager of the FIFTH THIRD MID CAP
GROWTH FUND since February 2005, and has been the portfolio manager of the FIFTH
THIRD SMALL CAP GROWTH FUND since August 2006. A Chartered Financial Analyst,
Mr. Hargrave graduated from the University of Southern California with a
Bachelor of Science degree, followed by a Master's degree in Finance from the
Anderson School at the University of California, Los Angeles. In 1991, Mr.
Hargrave joined Sunkist Growers, Inc. where he was responsible for managing the
employee benefits investments, banking relationships and cash management
operations. Mr. Hargrave joined Investment Advisers, Inc. in 1996 as an
institutional client service representative and in August 2000 he joined their
small/mid cap team as a portfolio manager. Mr. Hargrave joined Fifth Third in
2003 as a Portfolio Manager of Small, Small-to-Mid, and Mid Cap Growth
Strategies. Mr. Hargrave has 15 years of investment experience.
DAVID R. LUEBKE has been the portfolio manager of the FIFTH THIRD MID CAP GROWTH
FUND and the FIFTH THIRD SMALL CAP GROWTH FUND since August 2006. For the four
years prior to joining Fifth Third, Mr. Luebke was Vice President and Senior
Equity Analyst for Harbor Capital Management and then Fortis Investments, after
its acquisition of Harbor, where he was responsible for covering the technology
sector for small, mid and large cap stocks. Prior to joining Fortis, Mr. Luebke
was Portfolio Manager and Equity Analyst at First American Asset Management and
Piper Capital Management. Mr. Luebke graduated with honors (recipient of the
Wall Street Journal Achievement Award) from the University of Minnesota with a
Bachelor of Science degree in Business Administration. He also has an MBA in
Finance from the Carlson School of Management. A Chartered Financial Analyst,
Mr. Luebke has 9 years of investment experience.
MIRKO M. MIKELIC has been a portfolio manager of the FIFTH THIRD BOND FUND since
April 2005 and of the FIFTH THIRD U.S. GOVERNMENT BOND FUND since November 2004.
Mr. Mikelic joined Fifth Third Asset Management, Inc. as a Senior Analyst -
Fixed Income in June 2003. Prior to joining Fifth Third, Mr. Mikelic was an
international equity analyst at ReachCapital Management in Harrison, NY and
wrote research reports for CCN LLC. Prior to CCN, Mr. Mikelic spent 3 years at
Credit Suisse First Boston/DLJ where he was part of the Liability Management
desk. Additionally, he worked in a mortgage sales capacity with many of the
largest fixed income managers globally. Previous to DLJ, Mr. Mikelic spent two
years with Morgan Stanley as a Fixed Income Associate on the Mortgage Research &
Trading desks. Mr. Mikelic received a BA degree in Chemistry/Physics at
Kalamazoo College as well as a BSEE from Wayne State University. Mr. Mikelic
also completed an MA in International Political Economy/Relations and later an
MBA in Analytic Finance and Accounting from the University of Chicago. In
between his MA and MBA, Mr. Mikelic was a consultant for Information Resources,
designing multidimensional OLAP databases.
CHRISTIAN L. RIEDDLE has been a portfolio manager of the FIFTH THIRD BOND FUND,
the FIFTH THIRD INTERMEDIATE BOND FUND and the FIFTH THIRD U.S. GOVERNMENT BOND
FUND since March 2003. Mr. Rieddle joined Fifth Third Asset Management, Inc. as
a Senior Portfolio Manager of Taxable Fixed Income in August 2002. Prior to
joining Fifth Third Asset Management, Inc., he spent nearly four years as a
Trust Officer and Portfolio Manager with First Indiana Bank. From 1989 through
1998, Mr. Rieddle was an Institutional Portfolio Manager with Bank One and its
predecessor institutions. Mr. Rieddle graduated from Indiana
University-Bloomington with a B.S. degree in Business in May 1979, and a Masters
of Business Administration degree in May 1982. Mr. Rieddle earned his Chartered
Financial Analyst designation in 1993.
MITCHEL L. STAPLEY has been the portfolio manager of the FIFTH THIRD BALANCED
FUND (fixed income portion) since August 2002, of the FIFTH THIRD INTERMEDIATE
BOND FUND since November 1992, of the FIFTH THIRD U.S. GOVERNMENT BOND FUND
since October 2001, of the FIFTH THIRD SHORT TERM BOND FUND since November 1996,
of the FIFTH THIRD BOND FUND since March 1995, of the FIFTH THIRD HIGH YIELD
BOND FUND since November 2005, and the portfolio manager of the FIFTH THIRD
LIFEMODEL FUNDSSM since August 2006. Mr. Stapley, Chief Fixed Income Officer for
Fifth Third Asset Management, Inc., is responsible for all fixed income
management and trading. Mr. Stapley has been with Fifth Third since December
1988 and has over twenty-two years of portfolio
management experience. Prior to joining Fifth Third, Mr. Stapley was Manager of
Short Term Investments/Foreign Exchange Exposure at Navistar International
Corporation in Chicago, where he was responsible for both investment strategy
and implementation and foreign exchange hedging and trading. Prior to joining
Navistar, Mr. Stapley served as a Portfolio Manager for William Wrigley Jr.
Company in Chicago. He earned the Chartered Financial Analyst designation in
1994 and received his BS degree in Economics and Political Science, with honors,
from Albion College in 1981. Mr. Stapley is a member of the Detroit Bond Club.
JILL A. THOMPSON has been the portfolio manager of the FIFTH THIRD SMALL CAP
GROWTH FUND since July 2005, and has been the portfolio manager of the FIFTH
THIRD MID CAP GROWTH FUND since August 2006. Ms. Thompson joined Fifth Third
Asset Management in March 2005 as Portfolio Manager on the firm's small and mid
cap growth products. Before joining Fifth Third, Ms. Thompson served as
co-portfolio manager of KB Growth Advisors' small cap growth product for five
years. Prior to that, she was with US Bancorp Piper Jaffray for ten years, where
she served as co-portfolio manager of US Bancorp Asset Management/Piper Capital
Management's small and mid cap growth products. A Chartered Financial Analyst,
Ms. Thompson graduated from St. Cloud State University with a Bachelor of
Science in Finance. Ms. Thompson has 17 years of investment experience.
The SAI provides additional information about the portfolio managers'
compensation, other accounts managed by the portfolio managers, and the
portfolio managers' ownership of securities in the Funds
PORTFOLIO HOLDINGS
- ------------------
The Funds have established policies and procedures with respect to the
disclosure of the Funds' portfolio holdings. A description of the policies and
procedures is provided in the Statement of Additional Information. The Funds
will publicly disclose their portfolio holdings, as reported on a week-end
basis, by posting this information on the Trust's website
(www.fifththirdfunds.com), in the section entitled "Annual Reports and Other
Information". The schedules will consist of the following information about each
security (other than cash positions) held by the Funds as of the relevant
week-end: CUSIP number, the name of the issuer, number of shares or aggregate
par value held, and the traded market value. This information will be posted on
the Tuesday following the relevant week's end, and will remain accessible on the
website until the next week's information is posted.
SHAREHOLDER INFORMATION
- -----------------------
PURCHASING AND SELLING FUND SHARES
- ----------------------------------
PRICING MONEY MARKET FUND SHARES
The price of Fund shares is based on the Fund's Net Asset Value (NAV), which is
calculated by dividing the Fund's net assets by the number of its shares
outstanding. The Fund attempts to maintain a NAV of $1 per share. The value of
each portfolio instrument held by the Funds is determined by using amortized
cost.
The Fifth Third Michigan Municipal Money Market Fund calculates its NAV at 12
noon. The Fifth Third Government Money Market Fund calculates its NAV at 2 p.m.
The Fifth Third Municipal Money Market Fund calculates its NAV at 12 noon and 2
p.m. Fifth Third Prime Money Market Fund calculates its NAV at 4 p.m. All times
are Eastern Time. Each Money Market Fund's NAV is calculated on any day that the
Federal Reserve Bank of Cleveland and the principal bond markets (as recommended
by the Bond Market Association) are open for regular trading, as well as any
other day on which regular trading in money market instruments is taking place.
On any day that the bond markets close early, such as days in advance of
holidays or in the event of any emergency, the Funds reserve the right to
advance the time NAV is determined and by which purchase, redemption, and
exchange orders must be received on that day. The Funds will be closed on the
following holidays: New Year's Day, Martin Luther King Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans'
Day, Thanksgiving Day and Christmas.
PRICING STOCK AND BOND FUND SHARES
The price of Fund shares is based on the Fund's NAV, which is calculated by
dividing the Fund's net assets by the number of its shares outstanding. The
value of each portfolio instrument held by the Funds is determined by using
market prices, where available, and fair market values. Under special
circumstances, such as when an event occurs after the close of the exchange on
which a Fund's portfolio securities are principally traded, but prior to 4:00
p.m. Eastern Time, which, in the investment manager's opinion has materially
affected the price of those securities, the Fund may use fair value pricing.
There is no guarantee that the value determined for a particular security would
be the value realized upon sale of the security. Each Fund's NAV is calculated
at 4:00 p.m. Eastern Time each day the New York Stock Exchange is open for
regular trading. Each Bond Fund's NAV is calculated at 4:00 p.m. Eastern Time on
any day that the Federal Reserve Bank of Cleveland and the principal bond
markets (as recommended by the Bond Market Association) are open for regular
trading, as well as any other day on which regular trading in fixed income
instruments is taking place. On any day that the stock or bond markets close
early, such as days in advance of holidays or in the event of any emergency, the
Funds reserve the right to advance the time NAV is determined and by which
purchase, redemption, and exchange orders must be received on that day. Each
Fund's NAV may change on days when shareholders will not be able to purchase or
redeem Fund shares. The Funds will be closed on the following holidays: New
Year's Day, Martin Luther King Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas.
ADDITIONAL INFORMATION ABOUT PRICING FUND SHARES
Shares of the Funds are sold through financial intermediaries who have entered
into sales agreements with ALPS Distributors, Inc., 1290 Broadway, Suite 1100,
Denver, Colorado, 80203, the Funds' Distributor. The Trust has authorized one or
more brokers to receive on its behalf purchase or redemption orders. These
brokers are authorized to designate other intermediaries to act in this
capacity. Orders received prior to the close of the New York Stock Exchange by a
financial intermediary that has been authorized to accept orders on the Trust's
behalf will be deemed accepted by the Trust the same day and will be executed at
that day's closing share price. Each financial intermediary's agreement with the
Trust permits the financial intermediary to transmit orders received by the
financial intermediary prior to the close of regular trading on the New York
Stock Exchange to the Trust after that time and allows those orders to be
executed at the closing share price calculated on the day the order was received
by the financial intermediary.
The purchase or sale of Fund shares through financial intermediaries may be
subject to transaction fees or other different or additional fees than those
otherwise disclosed in this Prospectus.
ABUSIVE TRADING PRACTICES
In order to protect shareholders, the Funds discourage excessive short-term or
other abusive trading practices that can increase transactional expenses,
produce adverse tax consequences, or interfere with the efficient execution of
portfolio management strategies. The Funds may reject purchases or exchanges, or
terminate purchase or exchange privileges where excessive short-term or other
abusive trading practices are detected. Certain accounts ("omnibus accounts")
include multiple investors and such accounts typically provide the Funds with a
net purchase or redemption request on any given day where purchasers of Fund
shares and redeemers of Fund shares are netted against one another and the
identity of individual purchasers and redeemers whose orders are aggregated are
not known by the Funds. While the Funds monitor for excessive short-term or
other abusive trading practices, there can be no guarantee that the Funds will
be successful in identifying this activity, particularly with respect to
activity occurring within omnibus accounts.
The Trustees have approved policies and procedures designed to detect and
prevent short-term trading activity and other abusive trading activity in Fund
shares. First, when a market quotation is not readily available for a security,
the Funds are exposed to the risk that investors may purchase or redeem shares
at a net asset value that does not appropriately reflect the value of the
underlying securities. The Funds seek to deter and prevent this activity,
sometimes referred to as "stale price arbitrage", by the appropriate use of
"fair value" pricing of the Funds' portfolio securities. Second, the Funds seek
to monitor shareholder account activities in order to detect and prevent
excessive and disruptive trading practices. Personnel responsible for detecting
short-term trading activity (the "Trading Monitor") in the Funds' shares is
responsible for (i) rejecting any purchase or exchange, or (ii) terminating
purchase or exchange privileges if, in the judgment of the Trading Monitor, the
transaction would adversely affect a Fund or
its shareholders. The Funds recognize that the Trading Monitor will not always
be able to detect or prevent short-term or other abusive trading practices,
particularly with respect to activity occurring within omnibus accounts.
PURCHASING AND ADDING TO YOUR SHARES
You may purchase shares on days when the Funds are open for business. Your
purchase price will be the next NAV after your purchase order, completed
application and full payment have been received by the Funds, its transfer
agent, or other servicing agent. All orders for the Stock Funds, the Asset
Allocation Funds, or for the Bond Funds must be received by the Funds or its
transfer agent prior to 4:00 p.m. Eastern Time in order to receive that day's
NAV. All purchase orders for the Money Market Funds must be received by the
Funds' transfer agent on the following schedule (Eastern Time) in order to
receive that day's NAV (and in the case of the Fifth Third Municipal Money
Market Fund, the NAV calculated at 2 p.m.) and dividends: Fifth Third Michigan
Municipal Money Market Fund -- 12 noon; Fifth Third Government Money Market Fund
and Fifth Third Municipal Money Market Fund -- 2 p.m.; and Fifth Third Prime
Money Market Fund -- 4 p.m. Purchase orders received after those times will be
processed on the following business day.
You may purchase Class A, B, C and Advisor shares through broker-dealers and
financial institutions which have a sales agreement with the distributor of Fund
shares ("Dealers"). In order to purchase shares through any financial
institution, you must open an account with that institution. That account will
be governed by its own rules and regulations, which may be more stringent than
the rules and regulations governing an investment in the Funds, and you should
consult your account documents for full details.
Institutional shares may only be purchased through the Trust and Investment
Department of Fifth Third Bank, Fifth Third Securities, Inc.--Institutional
Investment Division, qualified employee retirement plans subject to minimum
requirements that may be established by the distributor of Fund shares, or
broker-dealers, investment advisers, financial planners or other financial
institutions which have an agreement with the Fund to place trades for
themselves or their clients for a fee. In order to purchase Institutional shares
through one of those entities, you must have an account with it. That account
will be governed by its own rules and regulations, which may be more stringent
that the rules and regulations governing an investment in the Funds, and you
should consult your account documents for full details. Your shares in the Funds
may be held in an omnibus account in the name of that institution.
SHAREHOLDER CONTACT INFORMATION
For accounts held at the Funds, please call 1-800-282-5706, or write to Fifth
Third Funds, 30 Dan Road, Canton, Massachusetts 02021.
For account holders at other financial institutions, contact your investment
representative at your financial institution.
The entity through which you are purchasing your shares is responsible for
transmitting orders to the Funds and it may have an earlier cut-off time and
different trading and exchanging policies. Consult that entity for specific
information. Some policy differences may include:
o minimum investment requirements
o exchange policies
o cutoff time for investments
o redemption fees
If your purchase order has been received by the Funds prior to the time
designated by the Funds for receiving orders, you will receive the dividend, if
any, declared for that day.
INVESTMENT AMOUNTS
- ------------------
CLASS A, CLASS B, CLASS C AND ADVISOR SHARES
The minimum initial investment in Class A shares, Class B shares, Class C
shares, or Advisor shares of the Funds offered by this Prospectus is $1,000. The
minimum initial investment through an individual retirement account is $500.
Subsequent investments must be in amounts of at least $50. The maximum
investment for total purchases of Class B shares by a shareholder is $99,999.
The maximum investment for total purchases of Class C shares or Advisor shares
by a shareholder is $999,999. These limitations on purchases of Class B, Class C
and Advisor shares do not apply to retirement plans or omnibus accounts.
INSTITUTIONAL SHARES
The minimum initial investment in Institutional shares of the Funds offered by
this Prospectus (except for the Equity Index Fund) is $1,000. An Institutional
shareholder's minimum investment cannot be calculated by combining all accounts
she/he maintains with Fifth Third Funds -- rather, the shareholder must meet the
minimum amount for each fund in which she/he wishes to invest. The minimum
initial investment in Institutional shares of the Equity Index Fund is
$5,000,000. Subsequent investments must be in amounts of at least $50.
GENERAL INFORMATION
The investment limitations described above are for your benefit. They are
cumulative and therefore multiple transactions that in total exceed these stated
limitations must be disclosed to your investment representative to allow an
accurate calculation. It is your responsibility to disclose all your
transactions and holdings in the Funds to your investment representative.
All purchases must be in U.S. dollars. A fee may be charged for any checks that
do not clear. The Funds reserve the right to reject cash, third-party checks,
starter checks, traveler's checks and credit card convenience checks. Money
orders are not accepted. All checks should be made payable to the Fifth Third
Funds.
For details, contact the Trust toll-free at 1-800-282-5706 or write to: Fifth
Third Funds, 30 Dan Road, Canton, Massachusetts 02021.
The Funds may reject a purchase order for any reason. The Funds reserve the
right to waive the minimum initial investment.
SYSTEMATIC INVESTMENT PROGRAM
You may make monthly systematic investments in Class A, B, C or Advisor shares
of the Funds from your bank account. There is no minimum amount required for
initial amounts invested into the Funds. You may elect to make systematic
investments on the 1st or the 15th of each month, or both. If the 1st or the
15th of the month is not a day on which the Funds are open for business, the
purchase will be made on the following day the Funds are open for business.
AVOID WITHHOLDING TAX
Each Fund is required to withhold a portion of taxable dividends, capital gains
distributions and redemptions paid to any shareholder who has not provided the
Fund with his or her certified Taxpayer Identification Number (your Social
Security Number for individual investors) or otherwise fails to comply with IRS
rules. Shareholders are urged to read the additional information concerning
withholding provided in the SAI.
CUSTOMER IDENTIFICATION INFORMATION
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person that opens a new account, and
to determine whether such person's name appears on government lists of known or
suspected terrorists and terrorist organizations.
As a result, the Funds must obtain the following information for each person
that opens a new account:
o Name;
o Date of birth (for individuals);
o Residential or business street address (although post office boxes are
still permitted for mailing); and
o Social security number, taxpayer identification number, or other
identifying number.
You may also be asked for a copy of your driver's license, passport or other
identifying document in order to verify your identity. In addition, it may be
necessary to verify your identity by cross-referencing your identification
information with a consumer report or other electronic database. Additional
information may be required to open accounts for corporations and other
entities. Federal law prohibits the Funds and other financial institutions from
opening a new account unless they receive the minimum identifying information
listed above. After an account is opened, the Funds may restrict your ability to
purchase additional shares until your identity is verified. The Funds may close
your account or take other appropriate action if they are unable to verify your
identity within a reasonable time. If your account is closed for this reason,
your shares will be redeemed at the NAV next calculated after the account is
closed.
SELLING YOUR SHARES
- -------------------
You may sell your shares on days when the Fund is open for business. Your sales
price will be the next NAV after your sell order is received by the Funds, its
transfer agent, or other servicing agent. For stock, bond, and asset allocation
Funds, all orders must be received prior to the time the Fund calculates its NAV
in order to receive that day's NAV. If your order has been received by the Fund
prior to the time the Fund calculates its NAV, and your shares have been sold,
you will not receive the dividend, if any, declared for that day.
For money market funds, orders to sell shares received by the Fifth Third Funds'
transfer agent according to the following schedule will be processed that day
and will not be entitled to that day's dividend: Fifth Third Municipal Money
Market Fund and Fifth Third Michigan Municipal Money Market Fund -- 12 noon;
Fifth Third Government Money Market Fund -- 2 p.m.; and Fifth Third Prime Money
Market Fund -- 4 p.m. Orders to sell shares of the Funds received by the Fifth
Third Funds' transfer agent after these times will be processed on the following
business day and will be entitled to dividends until the processing date.
The entity through which you are selling your shares is responsible for
transmitting the order to the Funds, and it may have an earlier cut-off for sale
requests. Consult that entity for specific information.
For accounts held at the Funds, please call 1-800-282-5706, or write to Fifth
Third Funds, 30 Dan Road, Canton, MA, 02021.
For account holders at other financial institutions, contact your investment
representative at your financial institution.
In certain circumstances, shares may be sold only by written request,
accompanied by a signature guarantee.
In order to sell your shares, call the Trust and Investment Department at Fifth
Third Bank, Fifth Third Securities, Inc.--Institutional Investment Division, the
sponsor of your qualified employee retirement plan or the broker-dealer,
investment adviser, financial planner or other institution through which you
purchased your shares.
Redemptions in Writing Required
You must request redemption in writing and obtain a signature guarantee if:
o The address on file has been changed in the last 10 business days.
o The check is not being mailed to the address on your account.
o The check is not being made payable to the owner of the account.
o You are requesting a redemption with electronic or wire transfer payment and
have not previously established this option on your account.
You may obtain a signature guarantee from a financial institution, such as a
bank, broker-dealer, or credit union, or from members of the Securities Transfer
Agents Medallion Program (STAMP), New York Stock Exchange Medallion Signature
Program (MSP), or Stock Exchanges Medallion Program (SEMP). Members of the
STAMP, MSP, and SEMP are subject to dollar limitations, which must be considered
when requesting their guarantee. The Transfer Agent may reject any signature
guarantee if it believes the transaction would otherwise be improper.
SYSTEMATIC WITHDRAWAL PLAN
You may make automatic withdrawals on a monthly, quarterly or annual basis on
the first day of that period that the Funds are open for business. The minimum
required balance is $10,000 and the minimum withdrawal amount is $100.
POSTPONEMENT OF REDEMPTION PAYMENTS
Federal securities law permits any Fund to delay sending to you redemption
proceeds for up to seven days if the Fund believes that a redemption would
disrupt its operation or performance. Under unusual circumstances, the law also
permits the Fund to delay sending redemption payments during any period when (a)
trading on the NYSE is restricted by applicable rules and regulations of the
SEC, (b) the NYSE is closed for other than customary weekend and holiday
closings, (c) the SEC has by order permitted such suspension, or (d) an
emergency exists as determined by the SEC.
REDEMPTION IN KIND
If, during any 90 day period, you redeem Fund shares worth more than $250,000
(or 1% of a Fund's net asset value if that amount is less than $250,000), the
Funds reserve the right to pay part or all of the redemption proceeds in excess
of these amounts in readily marketable securities instead of in cash.
REDEMPTIONS WITHIN 15 DAYS OF INVESTMENT--SHARES PURCHASED BY CHECK
When you have made your investment by check, you cannot redeem any portion of it
until the Transfer Agent is satisfied that the check has cleared (which may
require up to 15 business days). You can avoid this delay by purchasing shares
with a certified check, or by wire.
UNDELIVERABLE OR UNCASHED CHECKS
Any check tendered in payment of a redemption transaction that cannot be
delivered by the post office or which remains uncashed for more than six months
may be reinvested in the shareholder's account at the then-current NAV.
Any check tendered in payment of dividends or other distributions that cannot be
delivered by the post office or which remains uncashed for more than six months
may be reinvested in the shareholder's account at the then-current NAV, and the
dividend option may be changed from cash to reinvest. Distributions are
reinvested on the ex-date at the NAV determined at the close of business on that
date. No interest will accrue on amounts represented by uncashed redemption
checks.
CLOSING OF SMALL ACCOUNTS
If your account falls below $1,000 because of redemptions, the Fund may ask you
to increase your balance. If it is still below the minimum after 30 days, the
Fund may close your account and send you the proceeds at the current NAV.
EXCHANGING YOUR SHARES
- ----------------------
You may exchange your Fund shares for the same class of shares of any other
Fifth Third Fund. No transaction fees are charged for exchanges. Be sure to read
the Prospectus carefully of any Fund into which you wish to exchange shares.
You must meet the minimum investment requirements for the Fund into which you
are exchanging. Exchanges from one Fund to another are taxable for investors
subject to federal or state income taxation.
INSTRUCTIONS FOR EXCHANGING SHARES
For accounts held at the Funds, please call 1-800-282-5706, or write to Fifth
Third Funds, 30 Dan Road, Canton, MA, 02021.
For account holders at other financial institutions, contact your investment
representative at your financial institution.
NOTES ON EXCHANGES
- ------------------
In order to prevent excessive short-term or other abusive trading practices, the
Funds may reject exchanges, or change or terminate rights to exchange shares at
any time.
When exchanging from a Fund that has no sales charge or a lower sales charge to
a Fund with a higher sales charge, you will pay the difference.+
Shares of the new Fund must be held in the same account name, with the same
registration and tax identification numbers, as the shares of the old Fund.
The Exchange Privilege may be changed or eliminated at any time.
The Exchange Privilege is available only in states where shares of the Funds may
be sold.
All exchanges are based on the relative net asset value next determined after
the exchange order is received by the Funds.
+ Fifth Third has agreed to waive the sales load for former Kent Fund
shareholders and for shareholders who owned Advisor shares of any Fifth Third
Fund prior to August 1, 2005.
AUTOMATIC EXCHANGE PROGRAM--PRIME MONEY MARKET FUND'S CLASS B SHARES ONLY
- -------------------------------------------------------------------------
You can use the Funds' Automatic Exchange feature to purchase Class B shares of
the Funds at regular intervals through regular, automatic redemptions from your
Fifth Third Fund account. Shareholders investing directly in Class B shares of
the Fund, as opposed to Shareholders obtaining Class B shares of the Fund upon
exchange of Class B shares of any of the other Funds will be requested to
participate in the Automatic Exchange Program and to set the time and amount of
their regular, automatic withdrawal in such a way that all of the Class B shares
have been withdrawn from the Fund within two years of purchase. To participate
in the Automatic Exchange Program invest a minimum of $10,000 in the Fund and
$1,000 in the Fund whose shares you are buying. To add the Automatic Exchange
Program to your account or to change or terminate the Automatic Exchange
instructions on an existing account, contact Fifth Third Securities, Inc. or
your financial institution.
DISTRIBUTION ARRANGEMENTS/SALES CHARGES FOR STOCK, BOND AND MONEY MARKET FUNDS
- ------------------------------------------------------------------------------
Class A shares, Class B shares, Class C shares, and Advisor shares have
different expenses and other characteristics, allowing you to choose the class
that best suits your needs. You should consider the amount you want to invest,
how long you plan to have it invested, and whether you plan to make additional
investments. Your financial representative can help you decide which share class
is best for you. When purchasing shares, you must specify which class of shares
you wish to purchase.
- --------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C ADVISOR
- --------------------------------------------------------------------------------------------------------------------------
CHARGE (LOAD) Front-end sales No front-end sales No front-end sales Front-end sales
charges (not charge. A contingent charge. A charge (not
applicable to money deferred sales contingent deferred applicable to money
market funds); charge (CDSC) will sales charge (CDSC) market funds);
reduced sales be imposed on shares will be imposed on reduced sales
charges available. redeemed within 6 shares redeemed charges available.
years after purchase. within 12 months
after purchase.
- --------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION/ Subject to annual Subject to annual Subject to annual Subject to annual
SERVICE (12B-1) distribution and distribution and distribution and distribution and
FEE shareholder shareholder shareholder shareholder
servicing fees of up servicing fees of up servicing fees of servicing fees of up
to 0.25% of the to 1.00% of the up to 0.75% of the to 0.50% of the
Fund's assets. Fund's assets. Fund's assets. Fund's assets.
(Also subject to a
non-12b-1 fee for
shareholder
servicing of up to
0.25% of the Fund's
assets.)
- --------------------------------------------------------------------------------------------------------------------------
FUND EXPENSES Lower annual Higher annual Higher annual Higher annual
expenses than Class expenses than Class expenses than Class expenses than Class
B, C and Advisor A shares. A shares. A shares.
shares.
- --------------------------------------------------------------------------------------------------------------------------
CONVERSION None Converts to Class A None None
shares after 8 years.
- --------------------------------------------------------------------------------------------------------------------------
MAXIMUM PURCHASE AMOUNT None $99,999 $999,999 $999,999
- --------------------------------------------------------------------------------------------------------------------------
Fifth Third Funds (the "Trust") offers shares of certain classes of the
following Funds:
FUND CLASS A CLASS B CLASS C ADVISOR INSTITUTIONAL
- ---------------------------------------------------------------------------------------------------------------------------
MID CAP GROWTH FUND X X X X X
- ---------------------------------------------------------------------------------------------------------------------------
QUALITY GROWTH FUND X X X X X
- ---------------------------------------------------------------------------------------------------------------------------
BOND FUND X X X X X
- ---------------------------------------------------------------------------------------------------------------------------
PRIME MONEY
MARKET FUND X X X X X
- ---------------------------------------------------------------------------------------------------------------------------
* Class B shares are closed for purchases to all investors with no exceptions.
CALCULATION OF SALES CHARGES
- ----------------------------
CLASS A SHARES
Class A shares are sold at their public offering price. This price includes the
initial sales charge (except the Money Market Funds, which do not impose a sales
charge). Therefore, part of the money you send to the Funds will be used to pay
the sales charge. The remainder is invested in Fund shares. The sales charge
decreases with larger purchases. There is no sales charge on reinvested
dividends and distributions.
The current sales charge rates are as follows:
EQUITY FUNDS SELECTED BOND FUNDS(3) OTHER BOND FUNDS
- -----------------------------------------------------------------------------------------------------------------------------
SALES CHARGE AS DEALER SALES CHARGE AS DEALER SALES CHARGE AS DEALER
CHARGE AS A % OF REALLOWANCE CHARGE AS A % OF REALLOWANCE CHARGE AS A % OF REALLOWANCE
A % OF YOUR A % OF YOUR A % OF YOUR
OFFERING INVESTMENT OFFERING INVESTMENT OFFERING INVESTMENT
PRICE PRICE PRICE
- -----------------------------------------------------------------------------------------------------------------------------
LESS THAN 5.00% 5.26% 4.50% 3.50% 3.63% 3.00% 4.75% 4.99% 4.25%
$50,000
- -----------------------------------------------------------------------------------------------------------------------------
$50,000 BUT 4.50% 4.71% 4.00% 3.00% 3.09% 2.60% 4.50% 4.71% 3.75%
LESS THAN
$100,000
- -----------------------------------------------------------------------------------------------------------------------------
$100,000 3.50% 3.63% 3.00% 2.50% 2.56% 2.10% 3.50% 3.63% 3.00%
BUT LESS
THAN
$250,000
- -----------------------------------------------------------------------------------------------------------------------------
$250,000 2.50% 2.56% 2.10% 2.00% 2.04% 1.70% 2.50% 2.56% 2.10%
BUT LESS
THAN
$500,000
- -----------------------------------------------------------------------------------------------------------------------------
$500,000 2.00% 2.04% 1.70% 1.50% 1.52% 1.25% 2.00% 2.04% 1.70%
BUT LESS
THAN
$1,000,000
- -----------------------------------------------------------------------------------------------------------------------------
$1,000,000 0.00% 0.00% _____(2) 0.00% 0.00% _____(2) 0.00% 0.00% _____(2)
OR MORE(1)
- -----------------------------------------------------------------------------------------------------------------------------
(1) If you purchase $1,000,000 or more of Class A shares and do not pay a sales
charge, and you sell any of these shares before the eighteen month anniversary
of purchase, you will pay a 1% CDSC on the portion redeemed at the time of
redemption. The CDSC will be based upon the lower of the NAV at the time of
purchase and the NAV at the time of redemption. In any sales, certain shares not
subject to the CDSC (i.e., shares purchased with reinvested dividends or
distributions) will be redeemed first, followed by shares subject to the lowest
CDSC (typically shares held for the longest time). The CDSC will be waived for
shares purchased as part of an agreement where an organization agrees to waive
its customary sales commission.
(2) With respect to dealer reallowance amounts applicable to purchases of
$1,000,000 or more, such amounts differ for certain funds as detailed in the
statement of additional information under the section entitled, "Payments to
Dealers." Please refer to the statement of additional information for the
specific details.
(3) "Selected Bond Funds" include the Short Term Bond Fund, Intermediate Bond
Fund and Intermediate Municipal Bond Fund.
CLASS B SHARES
Class B shares are offered at NAV, without any up-front sales charge. Therefore,
all of the money that you send to the Funds is used to purchase Fund shares. If
you sell your Class B shares before the end of the sixth year after
purchase, however, you will pay a contingent deferred sales charge, or CDSC, at
the time of redemption. The CDSC will be based upon the lower of the NAV at the
time of purchase and the NAV at the time of redemption. In any sale, certain
shares not subject to the CDSC (i.e., shares purchased with reinvested dividends
or distributions) will be redeemed first, followed by shares subject to the
lowest CDSC (typically shares held for the longest time).
Class B shares are subject to the following CDSC schedule:
% OF NAV (AT TIME OF PURCHASE OR SALE
YEAR OF REDEMPTION AFTER PURCHASE IF LOWER) DEDUCTED FROM PROCEEDS
- --------------------------------------------------------------------------------
DURING THE FIRST YEAR 5%
- --------------------------------------------------------------------------------
DURING THE SECOND YEAR 4%
- --------------------------------------------------------------------------------
DURING THE THIRD OR FOURTH YEARS 3%
- --------------------------------------------------------------------------------
DURING THE FIFTH YEAR 2%
- --------------------------------------------------------------------------------
DURING THE SIXTH YEAR 1%
- --------------------------------------------------------------------------------
DURING THE SEVENTH OR EIGHTH YEARS 0%
- --------------------------------------------------------------------------------
CLASS C SHARES
Class C shares are offered at NAV, without any up-front sales charge. Therefore,
all the money you send to the Funds is used to purchase Fund shares. If you sell
your Class C shares before the first anniversary of purchase, however, you may
pay a 1% contingent deferred sales charge, or CDSC, at the time of redemption.
The CDSC will be based upon the lower of the NAV at the time of purchase and the
NAV at the time of redemption. In any sale, certain shares not subject to the
CDSC (i.e., shares purchased with reinvested dividends or distributions) will be
redeemed first, followed by shares subject to the lowest CDSC (typically shares
held for the longest time).
ADVISOR SHARES
The price of Advisor shares includes the initial sales charge (except the Prime
Money Market Fund, which does not impose a sales charge). Therefore, part of the
money you send to the Funds will be used to pay the sales charge. The remainder
is invested in Fund shares. The sales charge decreases with larger purchases.
There is no sales charge on reinvested dividends and distributions.
The current sales charge rates for the Short Term Bond Fund, the Intermediate
Bond Fund and the Intermediate Municipal Bond Fund are as follows:
SALES CHARGE AS A % OF CHARGE AS A % OF YOUR DEALER REALLOWANCE
OFFERING PRICE INVESTMENT
- ----------------------------------------------------------------------------------------------------------------------
LESS THAN $50,000 2.00% 2.04% 1.70%
- ----------------------------------------------------------------------------------------------------------------------
$50,000 BUT LESS THAN $100,000 1.50% 1.52% 1.25%
- ----------------------------------------------------------------------------------------------------------------------
$100,000 BUT LESS THAN
$250,000 1.25% 1.27% 1.00%
- ----------------------------------------------------------------------------------------------------------------------
$250,000 BUT LESS THAN
$500,000 1.00% 1.01% 0.85%
- ----------------------------------------------------------------------------------------------------------------------
$500,000 TO $999,999 0.50% 0.50% 0.40%
- ----------------------------------------------------------------------------------------------------------------------
$1,000,000 OR MORE Not available Not available Not available
- ----------------------------------------------------------------------------------------------------------------------
The current sales charge rates for all other Fifth Third Funds (except for the
Prime Money Market Fund) are as follows:
SALES CHARGE AS A % OF CHARGE AS A % OF YOUR DEALER REALLOWANCE
OFFERING PRICE INVESTMENT
- ----------------------------------------------------------------------------------------------------------------------
LESS THAN $50,000 3.25% 3.36% 2.90%
- ----------------------------------------------------------------------------------------------------------------------
$50,000 BUT LESS THAN $100,000 2.75% 2.83% 2.40%
- ----------------------------------------------------------------------------------------------------------------------
$100,000 BUT LESS THAN
$250,000 2.00% 2.04% 1.70%
- ----------------------------------------------------------------------------------------------------------------------
$250,000 BUT LESS THAN
$500,000 1.25% 1.27% 1.00%
- ----------------------------------------------------------------------------------------------------------------------
$500,000 TO $999,999 1.00% 1.01% 0.85%
- ----------------------------------------------------------------------------------------------------------------------
$1,000,000 OR MORE Not available Not available Not available
- ----------------------------------------------------------------------------------------------------------------------
SALES CHARGE REDUCTIONS - CLASS A AND ADVISOR SHARES
The Funds offer reduced sales charges on Class A and Advisor shares under
certain circumstances, as defined below. To calculate the sales charge
applicable to your net purchase of Advisor shares, you may aggregate your
investment with the greater of the current market value or amount purchased of
any shares of any Fifth Third Fund (Market Funds) held in your account or
accounts listed under "Combination Privilege" below.
- --------------------------------------------------------------------------------
As an investor, it is your responsibility to disclose to your investment
representative all of your mutual fund holdings to ensure that you receive all
sales charge reductions to which you are entitled.
- --------------------------------------------------------------------------------
o Letter of Intent. You inform the Fund in writing that you intend to
purchase at least $50,000 of Class A or Advisor shares (excluding
money market fund shares) over a 13-month period to qualify for a
reduced sales charge. You must include at least 5.00% of the total
amount you intend to purchase with your Letter of Intent. Shares
purchased under the non-binding Letter of Intent will be held in
escrow until the total investment has been completed. A Letter of
Intent may be backdated up to 90 days to include previous purchases
for determining your sales charge. In the event the Letter of Intent
is not completed, sufficient escrowed shares will be redeemed to pay
any applicable front-end sales charges.
o Rights of Accumulation. When the value of shares you already own plus
the amount you intend to invest reaches the amount needed to qualify
for reduced sales charges, any additional investment will qualify for
the reduced sales charge. Fifth Third Funds allows shareholders to
include existing Class A, B, C, and Advisor Shares (with the exception
of money market funds held in each class) in their rights of
accumulation values to lower their sales charge on purchasing Class A
and Advisor Shares. To determine whether the sale charge reduction
applies, the value of the shares you already own will be calculated by
using the greater of the current value or the original investment
amount. To be eligible for the right of accumulation, shares of the
Funds must be held in the following types of accounts: (i) individual
or joint accounts; (ii) retirement accounts (IRA's, 401(k)'s, etc.);
or (iii) other accounts owned by the same shareholder (determined by
tax ID) or other shareholders eligible under the Combination Privilege
defined below.
o Combination Privilege. Combine accounts of multiple funds (excluding
Class A and Advisor shares of the Money Market Funds) or accounts of
immediate family household members (spouse and children under 21) to
achieve reduced sales charges.
In order to obtain a sales charge reduction you must provide the Distributor or
your investment representative, at the time of purchase, with information
regarding shares held in other accounts which may be eligible for aggregation.
It may be necessary to provide information or records regarding shares of the
Funds held in: (i) all accounts with the Funds or your investment
representative; (ii) accounts with other investment representatives; and (iii)
accounts in the name of immediate family household members (spouse and children
under 21).
Information regarding the Funds' sales charge reduction program can also be
obtained free of charge on the Funds' web-site: www.53.com.
SALES CHARGE WAIVERS
- --------------------
CLASS A SHARES
The following transactions qualify for waivers of sales charges that apply to
Class A shares:
o Reinvestment of distributions from a deferred compensation plan,
agency, trust, or custody account that was maintained by the Advisor
or its affiliates or invested in any Fifth Third Fund.
o Shares purchased for trust or other advisory accounts established with
the Advisor or its affiliates.
o Shares purchased by current and retired directors, trustees,
employees, and immediate family household members (spouse and children
under 21) of the Advisor and its affiliates, and any organization that
provides services to the Funds; current and retired Fund trustees;
dealers who have an agreement with the Distributor; and any trade
organization to which the Advisor or the Administrator belongs.
o Shares purchased in connection with 401(k) plans, 403(b) plans and
other employer-sponsored Qualified Retirement Plans, "wrap" type
programs, non-transactional fee fund programs, and programs offered by
fee-based financial planners and other types of financial institutions
(including omnibus service providers).
o Shares purchased by former Kent Fund Investment Class shareholders.
CLASS B SHARES
The CDSC will be waived under certain circumstances, including the following:
o Minimum required distributions from an IRA or other qualifying
retirement plan to a shareholder who has attained age 7012.
o Redemptions from accounts following the death or disability of the
shareholder.
o Investors who purchased through a participant directed defined benefit
plan.
o Returns of excess contributions to certain retirement plans.
o Distributions of less than 12% of the annual account value under the
Systematic Withdrawal Plan.
o Shares issued in a plan of reorganization sponsored by Fifth Third
Bank, or shares redeemed involuntarily in a similar situation.
o Shares issued for sweep accounts when a sales commission was not paid
at the time of purchase. In this case, the maximum purchase amount is
waived also.
CLASS C SHARES
The CDSC will be waived for shares purchased as part of an agreement whereby an
organization agrees to waive their customary sales commission.
ADVISOR SHARES
The following transactions qualify for waivers of sales charges that apply to
Advisor shares:
o Reinvestment of distributions from a deferred compensation plan,
agency, trust, or custody account that was maintained by the Advisor
or its affiliates or invested in any Fifth Third Fund.
o Shares purchased for trust or other advisory accounts established with
the Advisor or its affiliates.
o Shares purchased by current and retired directors, trustees,
employees, and immediate family household members (spouse and children
under 21) of the Advisor and its affiliates and any organization that
provides services to the Funds; current and retired Fund trustees;
dealers who have an agreement with the Distributor; and any trade
organization to which the Advisor or the Administrator belongs.
o Shares purchased in connection with 401(k) plans, 403(b) plans and
other employer-sponsored Qualified Retirement Plans, "wrap" type
programs, non-transactional fee fund programs, and fee-based programs
offered by financial planners and other types of financial
institutions (including omnibus service providers).
o Shares purchased by shareholders who owned Advisor shares of any Fifth
Third Fund prior to August 1, 2005.
ADDITIONAL INFORMATION ABOUT SALES CHARGES
Current information regarding each Fund's sales charges and breakpoint discounts
is available by hyperlink on the Funds' Web site at www.53.com.
REINSTATEMENT PRIVILEGE
If you have sold Class A shares or Advisor shares and decide to reinvest in the
Fund within a 90-day period, you will not be charged the applicable sales load
on amounts up to the value of the shares you sold. You must provide a written
reinstatement request and payment within 90 days of the date your instructions
to sell were processed.
DISTRIBUTION/SERVICE (12B-1) FEES FOR ALL FUNDS
12b-1 fees compensate the Distributor and other dealers and investment
representatives for services and expenses related to the sale and distribution
of the Fund's shares and/or for providing shareholder services. In particular,
for Class B, Class C and Advisor shares, these fees help to defray the
Distributor's costs of advancing brokerage commissions to investment
representatives.
The 12b-1 fees vary by share class as follows:
o Class A shares may pay a 12b-1 fee of up to 0.25% of the average daily
net assets of the applicable Fund, which the Distributor may use for
shareholder servicing and distribution.
o Class B shares pay a 12b-1 fee at an annual rate of up to 1.00% of the
average daily net assets of the applicable Fund. The Distributor may
use up to 0.25% of the 12b-1 fee for shareholder servicing and up to
0.75% for distribution.
o Class C shares pay a 12b-1 fee of up to 0.75% of the average daily net
assets of the applicable Fund, which the Distributor may use for
distribution. The higher 12b-1 fee on Class C shares, together with
the CDSC help to defray the Distributor's costs of advancing brokerage
commissions to investment representatives, allowing for these shares
to be sold without an "upfront" sales charge.
o Advisor shares may pay a 12b-1 fee at an annual rate of up to 0.50% of
the average daily net assets of the applicable Fund, which the
Distributor may use for shareholder servicing and distribution.
Please note that Class C shares pay a non-12b-1 shareholder servicing fee of up
to 0.25% of the average daily net assets of the applicable Fund.
Over time shareholders will pay more than the equivalent of the maximum
permitted front-end sales charge because 12b-1 distribution and service fees are
paid out of the Fund's assets on an on-going basis.
While Class B and Class C shares do not have any front-end sales charges, their
higher ongoing annual expenses (due to higher 12b-1 fees) mean that over time
Class B and Class C shareholders could end up paying more for these shares than
if such shareholders would have purchased Class A or Advisor shares and paid a
front-end sales charge.
- --------------------------------------------------------------------------------
YOUR FINANCIAL INTERMEDIARY MAY NOT SELL SHARES IN ALL CLASSES OF THE FUNDS OR
MAY SELL CLASSES THAT ARE MORE EXPENSIVE TO YOU AS COMPENSATION OR REIMBURSEMENT
FOR DIFFERING LEVELS OF SERVICING OR EXPENSES ASSOCIATED WITH YOUR ACCOUNT. THE
FUNDS CANNOT BE RESPONSIBLE FOR ENSURING THAT YOUR FINANCIAL INTERMEDIARY IS
PLACING YOU IN THE MOST APPROPRIATE CLASS OF SHARES AS WE ARE NOT PRIVY TO
DETAILS OF YOUR ACCOUNT AND ARE UNABLE TO MAKE A DETERMINATION AS TO WHICH CLASS
IS MOST SUITABLE. YOU SHOULD DISCUSS ALL COMPENSATION WITH YOUR FINANCIAL
INTERMEDIARY AND BE AWARE OF HOW YOUR ACCOUNT MIGHT BE AFFECTED.
- --------------------------------------------------------------------------------
CONVERSION TO CLASS A SHARES
Class B shares convert automatically to Class A shares 8 years after purchase.
After conversion, the 12b-1 fees applicable to your shares are reduced from
1.00% to 0.25% of the average daily net assets.
DEALER COMPENSATION AND INCENTIVES
The Distributor pays Dealers selling Class A or Advisor shares a one-time
concession at the time of sale ("Concession") equal to the "Dealer Reallowance"
set forth in the sales load schedule under "Calculation of Sales
Charges - Class A Shares" and "Calculation of Sales Charges - Advisor Shares."
Additionally, Dealers receive monthly ongoing compensation of up to 0.25% and
0.50% per year, respectively, of the net asset value of the Class A and Advisor
shares owned by their customers as compensation for servicing such shareholders'
accounts. The Distributor may pay Dealers a finders fee on purchases of Class A
shares exceeding $1,000,000, as described in the Statement of Additional
Information.
The Distributor pays Dealers selling Class B shares a Concession equal to 4% of
the purchase amount. Additionally, Dealers receive monthly ongoing compensation
of up to 0.25% per year of the net asset value of the Class B shares owned by
their customers as compensation for servicing such shareholders' accounts.
The Distributor pays Dealers selling Class C shares a Concession equal to 1% of
the purchase amount. Additionally, during the first 18 months following each
sale, Dealers receive monthly ongoing compensation of up to 0.25% per year of
the net asset value of such Class C shares for servicing such shareholders'
accounts. Thereafter, dealers receive quarterly ongoing compensation of 1.00%
per year of such Class C shares (0.25% per year for servicing the shareholder
accounts, and 0.75% per year as additional reallowance or concession).
With respect to Class A, Class B, Class C and Advisor shares, no Concession is
paid on shares issued in connection with reinvestments of dividends and capital
gains distributions.
In addition, the Advisor or its affiliates, in their sole discretion and out of
their own assets, may pay additional amounts to Dealers in connection with the
marketing and sale of Fund shares.
The Adviser is not permitted to consider sales of shares of the Funds (or other
Fifth Third Funds) as a factor in the selection of broker-dealers to execute
portfolio transactions for the Funds.
DIVIDENDS AND CAPITAL GAINS
- ---------------------------
All dividends and capital gains will be automatically reinvested unless you
request otherwise. You can receive them in cash or by electronic funds transfer
to your bank account if you are not a participant in an IRA account or in a tax
qualified plan. There are no sales charges for reinvested distributions.
Dividends are higher for Class A shares than for Class B shares, Class C shares
or Advisor shares, because Class A shares have lower operating expenses than
Class B shares, Class C shares or Advisor shares.
Distributions are made on a per share basis regardless of how long you've owned
your shares. Therefore, if you invest shortly before the distribution date, some
of your investment will be returned to you in the form of a taxable
distribution.
Dividends, if any, are declared daily and paid monthly by the Fifth Third Prime
Money Market Fund.
Dividends, if any, are declared and paid monthly by the Fifth Third Bond Fund.
Dividends, if any, are declared and paid quarterly by the Fifth Third Mid Cap
Growth Fund and the Fifth Third Quality Growth Fund.
Capital gains, if any, are distributed at least annually.
As discussed in detail in the Statement of Additional Information, if a Fund
makes a distribution in excess of its current and accumulated "earnings and
profits" in any taxable year, the excess distribution will be treated as a
return of capital to the extent of a Shareholder's tax basis in Fund shares, and
thereafter as capital gain. A return of capital is not taxable, but it reduces
the Shareholder's tax basis in the shares, thus reducing any loss or increasing
any gain on a subsequent taxable disposition of those shares. The Fifth Third
Strategic Income Fund is particularly susceptible to this possibility because it
may, at times in its discretion, pay out less than the entire amount of net
investment income earned in any particular period and may at times pay out such
accumulated undistributed income in addition to net investment income earned in
other periods in order to permit the Fund to maintain a more stable level of
distributions. As a result, the dividend paid by the Fund to shareholders for
any particular period may be
more or less than the amount of net investment income earned by the Fund during
such period. The Fund is not required to maintain a stable level of
distributions to shareholders.
TAXATION
- --------
FEDERAL INCOME TAX
TAXATION OF SHAREHOLDER TRANSACTIONS
A sale, exchange or redemption of Fund shares generally will result in a taxable
gain or loss to the shareholder.
TAXATION OF DISTRIBUTIONS
Each Fund expects to distribute substantially all of its investment income
(including net realized capital gains and tax-exempt interest income, if any) to
its shareholders at least annually. Unless otherwise exempt or as discussed
below, shareholders are required to pay federal income tax on any dividends and
other distributions, including capital gains distributions received. This
applies whether dividends and other distributions are received in cash or
reinvested in additional shares. For federal income tax purposes, distributions
of investment income are generally taxable as ordinary income. Taxes on
distributions of capital gains are determined by how long the Fund owned the
investments that generated them, rather than how long a shareholder has owned
his or her shares. Distributions of net capital gain (that is, the excess of net
long-term capital gains over net short-term capital losses) from the sale of
investments that the Fund owned for more than one year and that are properly
designated by the Fund as capital gain dividends will be taxable as long-term
capital gains. Distributions of gains from the sale of investments that the Fund
owned for one year or less will be taxable as ordinary income. Distributions of
investment income designated by the Fund as derived from "qualified dividend
income" will be taxed at the rates applicable to long-term capital gains,
provided holding period and other requirements are met at both the Shareholder
and Fund level. The fixed income funds do not expect a significant portion of
Fund distributions to be derived from qualified dividend income. An Asset
Allocation Fund will not be able to offset gains realized by one Fund in which
it invests against losses realized by another Fund in which it invests until it
disposes of shares of the Fund that realized such losses. The use of a
fund-of-funds structure could therefore affect the amount, timing and character
of distributions to shareholders and increase the amount of taxes payable by
shareholders. Distributions are taxable to shareholders even if they are paid
from income or gains earned by a Fund before a shareholder's investment (and
thus were included in the price paid). See the Statement of Additional
Information for further details.
FOREIGN INVESTMENTS
- -------------------
If a Fund invests in foreign securities, please note that investment income
received by the Fund from sources within foreign countries may be subject to
foreign taxes withheld at the source which may decrease the yield of such
investments. The United States has entered into tax treaties with many foreign
countries that entitle the Fund to reduce tax rates or exemption on this income.
The effective rate of foreign tax cannot be predicted since the amount of the
Fund's assets to be invested within various countries is unknown.
In addition, foreign investment may prompt a Fund to distribute ordinary income
more frequently or in greater amounts than purely domestic funds, which could
increase a shareholder's tax liability.
STATE AND LOCAL TAXES
Shareholders may also be subject to state and local taxes on distributions and
redemptions. Under state or local law, distributions of investment income may be
taxable to shareholders as dividend income even though a substantial portion of
such distribution may be derived from interest excluded from gross income for
federal income tax purposes that, if received directly, would be exempt from
such income taxes. State laws differ on this issue, and shareholders are urged
to consult their own tax advisors regarding the taxation of their investments
under state and local tax laws.
This is a brief summary of certain income tax consequences relating to an
investment in the Funds. The Statement of Additional Information provides
further details regarding taxation. Shareholders are urged to consult their own
tax advisors regarding the taxation of their investments under federal, state
and local laws.
ADDITIONAL COMPENSATION TO SERVICING AGENTS
The Advisor and/or its affiliates may pay amounts from their own assets to
selling or servicing agents of the Funds for distribution-related activities,
shareholder servicing, or other services they provide. These amounts may be
fixed dollar amounts, a percentage of sales, a percentage of assets, or any
combination thereof, and may be up-front or ongoing payments or both. Agents may
agree to provide a variety of shareholder servicing services, marketing related
services, or access advantages to the Funds, including, for example, presenting
the Funds on "approved" or "select" lists, in return for these payments. Selling
or servicing agents, in turn, may pay some or all of these amounts to their
employees who recommend or sell Fund shares or allocate or invest client assets
among different investment options.
In addition, the Advisor and/or its affiliates may pay amounts from their own
assets for services provided and costs incurred by third parties that are of a
type that would typically be provided or incurred directly by Fifth Third Funds'
transfer agent. The Fifth Third Funds also may pay amounts to third party
intermediaries, including selling and servicing agents, for providing these
types of services or incurring these types of costs.
APPENDIX C
FIFTH THIRD FUNDS
OWNERSHIP INFORMATION
As of September 24, 2007, the officers and Trustees of Fifth Third Funds as a
group beneficially owned less than 1% of the outstanding shares of
Institutional, Advisor, Class A, Class B or Class C shares of any of the Fifth
Third Funds.
The information in the following table shows, to the best of the knowledge of
Fifth Third Funds, the shareholders who owned of record or beneficially 5% or
more of the indicated Fund and Class as of ______, 2007. The table also shows,
as far as practicable, the percentage of record and beneficial ownership of
these same shareholders upon consummation of the Transaction calculated on the
basis of holdings as of the September 24, 2007 record date. Those shareholders
who beneficially own 25% or more of the outstanding shares of a Fund may be
deemed to be controlling persons of that Fund under the 1940 Act. In this
context, "control" shall mean (1) the beneficial ownership, either directly or
through one or more controlled companies of more than 25% of the voting
securities of a company; (2) the acknowledgement or assertion by either the
controlled or controlling party of the existence of control; or (3) an
adjudication under ss.2(a)(9)of the 1940 Act which has become final, that
control exists.
|---------------------------------------------------|-------------|--------------|----------------|
| Name and Address Percent of | Approximate | Approximate | Percent of |
| Record | Percent of | Percent of | Beneficial |
| Ownership | Beneficial | Record | Ownership |
| | Ownership | Ownership | Upon |
| | | Upon | Consummation |
| | | Consummation | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
| | | | |
| | | | |
|---------------------------------------------------|-------------|--------------|----------------|
APPENDIX D
FIFTH THIRD FUNDS
FINANCIAL HIGHLIGHTS
--------------------
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years or the period of each Fund's
operations, if shorter. Certain information reflects financial results for a
single Fund Share. The total returns in the tables represent the rate that an
investor would have earned or lost on an investment in a Fund (assuming
reinvestment of all dividends and distributions).
The information for the Mid Cap Growth, Bond, Prime Money Market and Quality
Growth Funds for each of the years in the period ended July 31, 2006 has been
audited by PricewaterhouseCoopers LLP. PricewaterhouseCoopers LLP's report,
along with the Funds' financial statements, is incorporated by reference in the
SAI, which is available upon request.
FIFTH THIRD FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH PERIOD)
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS
----------------------------
NET REALIZED
AND
UNREALIZED CHANGE IN
NET ASSET GAINS/(LOSSES) NET ASSETS
VALUE, NET FROM RESULTING
BEGINNING INVESTMENT INVESTMENT FROM
OF PERIOD INCOME/(LOSS) TRANSACTIONS OPERATIONS
- --------------------------------------------------------------------------------
MID CAP GROWTH FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 $15.10 (0.06) (4.33) (4.39)
Year ended 7/31/03 $10.24 (0.07)(3) 1.85 1.78
Year ended 7/31/04 $12.02 (0.09) 1.03 0.94
Year ended 7/31/05 $12.96 -- ^ 3.07 3.07
Year ended 7/31/06 $16.03 (0.04)(3) 0.77 0.73
Six months ended 1/31/07+ $16.55 (0.03) 2.10 2.07
- --------------------------------------------------------------------------------
MID CAP GROWTH FUND
CLASS A SHARES
Year ended 7/31/02 $14.94 (0.09) (4.27) (4.36)
Year ended 7/31/03 $10.11 (0.09)(3) 1.80 1.71
Year ended 7/31/04 $11.82 (0.12) 1.02 0.90
Year ended 7/31/05 $12.72 (0.05) 3.02 2.97
Year ended 7/31/06 $15.69 (0.08)(3) 0.76 0.68
Six months ended 1/31/07+ $16.17 (0.05) 2.05 2.00
- --------------------------------------------------------------------------------
MID CAP GROWTH FUND
CLASS B SHARES
Year ended 7/31/02 $14.86 (0.14) (4.27) (4.41)
Year ended 7/31/03 $ 9.98 (0.17)(3) 1.78 1.61
Year ended 7/31/04 $11.59 (0.21) 1.00 0.79
Year ended 7/31/05 $12.38 (0.15) 2.93 2.78
Year ended 7/31/06 $15.16 (0.20)(3) 0.73 0.53
Six months ended 1/31/07+ $15.50 (0.10) 1.96 1.86
- --------------------------------------------------------------------------------
MID CAP GROWTH FUND
CLASS C SHARES
Year ended 7/31/02 $14.36 (0.18) (4.08) (4.26)
Year ended 7/31/03 $ 9.63 (0.16)(3) 1.70 1.54
Year ended 7/31/04 $11.17 (0.21) 0.98 0.77
Year ended 7/31/05 $11.94 (0.16) 2.83 2.67
Year ended 7/31/06 $14.61 (0.19)(3) 0.71 0.52
Six months ended 1/31/07+ $14.94 (0.10) 1.88 1.78
- --------------------------------------------------------------------------------
MID CAP GROWTH
FUND ADVISOR SHARES
10/29/01(d) to 7/31/02 $13.47 (0.04) (2.87) (2.91)
Year ended 7/31/03 $10.09 (0.12)(3) 1.81 1.69
Year ended 7/31/04 $11.78 (0.12) 0.99 0.87
Year ended 7/31/05 $12.65 (0.07) 2.98 2.91
Year ended 7/31/06 $15.56 (0.12)(3) 0.75 0.63
Six months ended 1/31/07+ $16.00 (0.07) 2.02 1.95
- --------------------------------------------------------------------------------
LESS DIVIDENDS AND
DISTRIBUTIONS FROM
----------------------
NET TOTAL
TOTAL ASSET RETURN
NET NET DIVIDENDS VALUE, (EXCLUDES
INVESTMENT REALIZED AND END OF SALES
INCOME GAINS DISTRIBUTIONS PERIOD CHARGE)
- ---------------------------------------------------------------------------------------------
MID CAP GROWTH FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 -- (0.47) (0.47) $10.24 (30.02%)
Year ended 7/31/03 -- -- -- $12.02 17.38%
Year ended 7/31/04 -- -- -- $12.96 7.82%
Year ended 7/31/05 -- -- -- $16.03 23.69%
Year ended 7/31/06 (0.02) (0.19) (0.21) $16.55 4.56%
Six months ended 1/31/07+ -- (3.50) (3.50) $15.12 12.98%*
- ---------------------------------------------------------------------------------------------
MID CAP GROWTH FUND
CLASS A SHARES
Year ended 7/31/02 -- (0.47) (0.47) $10.11 (30.21%)
Year ended 7/31/03 -- -- -- $11.82 17.03%
Year ended 7/31/04 -- -- -- $12.72 7.61%
Year ended 7/31/05 -- -- -- $15.69 23.35%
Year ended 7/31/06 (0.01) (0.19) (0.20) $16.17 4.34%
Six months ended 1/31/07+ -- (3.50) (3.50) $14.67 12.85%*
- ---------------------------------------------------------------------------------------------
MID CAP GROWTH FUND
CLASS B SHARES
Year ended 7/31/02 -- (0.47) (0.47) $ 9.98 (30.65%)
Year ended 7/31/03 -- -- -- $11.59 16.13%
Year ended 7/31/04 -- -- -- $12.38 6.82%
Year ended 7/31/05 -- -- -- $15.16 22.46%
Year ended 7/31/06 -- (0.19) (0.19) $15.50 3.51%
Six months ended 1/31/07+ -- (3.50) (3.50) $13.86 12.49%*
- ---------------------------------------------------------------------------------------------
MID CAP GROWTH FUND
CLASS C SHARES
Year ended 7/31/02 -- (0.47) (0.47) $ 9.63 (30.67%)
Year ended 7/31/03 -- -- -- $11.17 15.99%
Year ended 7/31/04 -- -- -- $11.94 6.89%
Year ended 7/31/05 -- -- -- $14.61 22.36%
Year ended 7/31/06 -- (0.19) (0.19) $14.94 3.57%
Six months ended 1/31/07+ -- (3.50) (3.50) $13.22 12.41%*
- ---------------------------------------------------------------------------------------------
MID CAP GROWTH
FUND ADVISOR SHARES
10/29/01(d) to 7/31/02 -- (0.47) (0.47) $10.09 (19.75%)*
Year ended 7/31/03 -- -- -- $11.78 16.75%
Year ended 7/31/04 -- -- -- $12.65 7.39%
Year ended 7/31/05 -- -- -- $15.56 23.00%
Year ended 7/31/06 -- (0.19) (0.19) $16.00 4.07%
Six months ended 1/31/07+ -- (3.50) (3.50) $14.45 12.67%*
- ---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------
RATIOS OF RATIOS OF
NET EXPENSES RATIOS OF NET EXPENSES
ASSETS, TO INVESTMENT TO
END OF AVERAGE INCOME/(LOSS) AVERAGE PORTFOLIO
PERIOD NET TO AVERAGE NET TURNOVER
(000'S) ASSETS NET ASSETS ASSETS (a) RATE (b)
- --------------------------------------------------------------------------------------------
MID CAP GROWTH FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 $ 207,807 1.12% (0.49%) 1.14% 27%
Year ended 7/31/03 $ 335,285 1.10% (0.65%) 1.10% 25%
Year ended 7/31/04 $ 335,815 1.09% (0.68%) 1.09% 83%
Year ended 7/31/05 $ 392,929 1.09% (0.03%) 1.09% 54%
Year ended 7/31/06 $ 318,133 1.08% (0.24%) 1.08% 69%
Six months ended 1/31/07+ $ 337,042 1.09%** (0.42%)** 1.09%** 37%
- --------------------------------------------------------------------------------------------
MID CAP GROWTH FUND
CLASS A SHARES
Year ended 7/31/02 $ 30,165 1.36% (0.74%) 1.39% 27%
Year ended 7/31/03 $ 35,504 1.35% (0.89%) 1.35% 25%
Year ended 7/31/04 $ 49,586 1.34% (0.93%) 1.34% 83%
Year ended 7/31/05 $ 41,921 1.34% (0.29%) 1.34% 54%
Year ended 7/31/06 $ 34,437 1.33% (0.49%) 1.33% 69%
Six months ended 1/31/07+ $ 32,213 1.34%** (0.67%)** 1.34%** 37%
- --------------------------------------------------------------------------------------------
MID CAP GROWTH FUND
CLASS B SHARES
Year ended 7/31/02 $ 5,008 2.12% (1.51%) 2.15% 27%
Year ended 7/31/03 $ 5,846 2.10% (1.64%) 2.10% 25%
Year ended 7/31/04 $ 6,730 2.09% (1.68%) 2.09% 83%
Year ended 7/31/05 $ 6,874 2.09% (1.03%) 2.09% 54%
Year ended 7/31/06 $ 6,507 2.08% (1.24%) 2.08% 69%
Six months ended 1/31/07+ $ 6,226 2.09%** (1.42%)** 2.09%** 37%
- --------------------------------------------------------------------------------------------
MID CAP GROWTH FUND
CLASS C SHARES
Year ended 7/31/02 $ 1,061 2.12% (1.49%) 2.14% 27%
Year ended 7/31/03 $ 1,525 2.10% (1.64%) 2.10% 25%
Year ended 7/31/04 $ 1,700 2.09% (1.68%) 2.09% 83%
Year ended 7/31/05 $ 1,600 2.09% (1.03%) 2.09% 54%
Year ended 7/31/06 $ 1,122 2.08% (1.22%) 2.08% 69%
Six months ended 1/31/07+ $ 1,045 2.09%** (1.42%)** 2.09%** 37%
- --------------------------------------------------------------------------------------------
MID CAP GROWTH
FUND ADVISOR SHARES
10/29/01(d) to 7/31/02 $ 145 1.68%** (1.06%)** 1.71%** 27%
Year ended 7/31/03 $ 240 1.60% (1.14%) 1.60% 25%
Year ended 7/31/04 $ 962 1.59% (1.17%) 1.59% 83%
Year ended 7/31/05 $ 1,218 1.59% (0.52%) 1.59% 54%
Year ended 7/31/06 $ 813 1.58% (0.72%) 1.58% 69%
Six months ended 1/31/07+ $ 756 1.59%** (0.93%)** 1.59%** 37%
- --------------------------------------------------------------------------------------------
FIFTH THIRD FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH PERIOD)
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS
----------------------------
NET REALIZED
AND
UNREALIZED CHANGE IN
NET ASSET GAINS/(LOSSES) NET ASSETS
VALUE, NET FROM RESULTING
BEGINNING INVESTMENT INVESTMENT FROM
OF PERIOD INCOME/(LOSS) TRANSACTIONS OPERATIONS
- --------------------------------------------------------------------------------
QUALITY GROWTH FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 $18.48 (0.04) (4.94) (4.98)
Year ended 7/31/03 $12.91 0.01 1.31 1.32
Year ended 7/31/04 $14.23 (0.04) 0.42 0.38
Year ended 7/31/05 $14.61 0.03 1.74 1.77
Year ended 7/31/06 $16.34 (0.03)(3) (0.64) (0.67)
Six months ended 1/31/07+ $15.67 0.08 1.90 1.98
- --------------------------------------------------------------------------------
QUALITY GROWTH FUND
CLASS A SHARES
Year ended 7/31/02 $18.33 (0.08) (4.89) (4.97)
Year ended 7/31/03 $12.77 (0.02) 1.29 1.27
Year ended 7/31/04 $14.04 (0.08) 0.42 0.34
Year ended 7/31/05 $14.38 (0.02) 1.72 1.70
Year ended 7/31/06 $16.05 (0.07)(3) (0.62) (0.69)
Six months ended 1/31/07+ $15.36 0.06 1.85 1.91
- --------------------------------------------------------------------------------
QUALITY GROWTH FUND
CLASS B SHARES
Year ended 7/31/02 $18.23 (0.16) (4.88) (5.04)
Year ended 7/31/03 $12.60 (0.12) 1.27 1.15
Year ended 7/31/04 $13.75 (0.19) 0.43 0.24
Year ended 7/31/05 $13.99 (0.14) 1.67 1.53
Year ended 7/31/06 $15.52 (0.18)(3) (0.60) (0.78)
Six months ended 1/31/07+ $14.74 (0.01) 1.78 1.77
- --------------------------------------------------------------------------------
QUALITY GROWTH FUND
CLASS C SHARES
Year ended 7/31/02 $17.78 (0.20) (4.71) (4.91)
Year ended 7/31/03 $12.28 (0.11) 1.23 1.12
Year ended 7/31/04 $13.40 (0.20) 0.43 0.23
Year ended 7/31/05 $13.63 (0.15) 1.64 1.49
Year ended 7/31/06 $15.12 (0.18)(3) (0.58) (0.76)
Six months ended 1/31/07+ $14.36 (0.01) 1.74 1.73
- --------------------------------------------------------------------------------
QUALITY GROWTH FUND
ADVISOR SHARES
10/29/01(d) to 7/31/02 $16.79 (0.03) (3.42) (3.45)
Year ended 7/31/03 $12.75 (0.03) 1.26 1.23
Year ended 7/31/04 $13.98 (0.09) 0.40 0.31
Year ended 7/31/05 $14.29 (0.06) 1.71 1.65
Year ended 7/31/06 $15.92 (0.11)(3) (0.62) (0.73)
Six months ended 1/31/07+ $15.19 0.04 1.83 1.87
- --------------------------------------------------------------------------------
LESS DIVIDENDS AND
DISTRIBUTIONS FROM
----------------------
NET TOTAL
TOTAL ASSET RETURN
NET NET DIVIDENDS VALUE, (EXCLUDES
INVESTMENT REALIZED AND END OF SALES
INCOME GAINS DISTRIBUTIONS PERIOD CHARGE)
- ---------------------------------------------------------------------------------------------
QUALITY GROWTH FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 -- (0.59) (0.59) $12.91 (27.90%)
Year ended 7/31/03 --^ -- --^ $14.23 10.23%
Year ended 7/31/04 -- -- -- $14.61 2.67%
Year ended 7/31/05 (0.04) -- (0.04) $16.34 12.13%
Year ended 7/31/06 -- -- -- $15.67 (4.10%)
Six months ended 1/31/07+ (0.03) (0.25) (0.28) $17.37 12.68%*
- ---------------------------------------------------------------------------------------------
QUALITY GROWTH FUND
CLASS A SHARES
Year ended 7/31/02 -- (0.59) (0.59) $12.77 (28.08%)
Year ended 7/31/03 -- -- -- $14.04 9.95%
Year ended 7/31/04 -- -- -- $14.38 2.42%
Year ended 7/31/05 (0.03) -- (0.03) $16.05 11.83%
Year ended 7/31/06 -- -- -- $15.36 (4.30%)
Six months ended 1/31/07+ (0.02) (0.25) (0.27) $17.00 12.48%*
- ---------------------------------------------------------------------------------------------
QUALITY GROWTH FUND
CLASS B SHARES
Year ended 7/31/02 -- (0.59) (0.59) $12.60 (28.63%)
Year ended 7/31/03 -- -- -- $13.75 9.13%
Year ended 7/31/04 -- -- -- $13.99 1.75%
Year ended 7/31/05 --^ -- --^ $15.52 10.95%
Year ended 7/31/06 -- -- -- $14.74 (5.03%)
Six months ended 1/31/07+ -- (0.25) (0.25) $16.26 12.04%*
- ---------------------------------------------------------------------------------------------
QUALITY GROWTH FUND
CLASS C SHARES
Year ended 7/31/02 -- (0.59) (0.59) $12.28 (28.62%)
Year ended 7/31/03 -- -- -- $13.40 9.12%
Year ended 7/31/04 -- -- -- $13.63 1.72%
Year ended 7/31/05 --^ -- --^ $15.12 10.95%
Year ended 7/31/06 -- -- -- $14.36 (5.03%)
Six months ended 1/31/07+ -- (0.25) (0.25) $15.84 12.08%*
- ---------------------------------------------------------------------------------------------
QUALITY GROWTH FUND
ADVISOR SHARES
10/29/01(d) to 7/31/02 -- (0.59) (0.59) $12.75 (19.05%)*
Year ended 7/31/03 -- -- -- $13.98 9.65%
Year ended 7/31/04 -- -- -- $14.29 2.22%
Year ended 7/31/05 (0.02) -- (0.02) $15.92 11.57%
Year ended 7/31/06 -- -- -- $15.19 (4.59%)
Six months ended 1/31/07+ (0.01) (0.25) (0.26) $16.80 12.35%*
- ---------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------
RATIOS OF RATIOS OF
NET EXPENSES RATIOS OF NET EXPENSES
ASSETS, TO INVESTMENT TO
END OF AVERAGE INCOME/(LOSS) AVERAGE PORTFOLIO
PERIOD NET TO AVERAGE NET TURNOVER
(000'S) ASSETS NET ASSETS ASSETS (a) RATE (b)
- --------------------------------------------------------------------------------------------
QUALITY GROWTH FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 $ 566,235 1.09% (0.24%) 1.09% 20%
Year ended 7/31/03 $ 795,988 1.08% 0.05% 1.08% 19%
Year ended 7/31/04 $ 882,256 1.07% (0.24%) 1.07% 35%
Year ended 7/31/05 $ 707,766 1.08% 0.16% 1.08% 71%
Year ended 7/31/06 $ 616,737 1.08% (0.18%) 1.08% 108%
Six months ended 1/31/07+ $ 588,105 1.08%** 0.91%** 1.09%** 68%
- --------------------------------------------------------------------------------------------
QUALITY GROWTH FUND
CLASS A SHARES
Year ended 7/31/02 $ 221,972 1.34% (0.49%) 1.34% 20%
Year ended 7/31/03 $ 211,221 1.33% (0.19%) 1.33% 19%
Year ended 7/31/04 $ 220,904 1.32% (0.49%) 1.32% 35%
Year ended 7/31/05 $ 165,836 1.33% (0.08%) 1.33% 71%
Year ended 7/31/06 $ 114,828 1.33% (0.42%) 1.33% 108%
Six months ended 1/31/07+ $ 104,973 1.33%** 0.65%** 1.34%** 68%
- --------------------------------------------------------------------------------------------
QUALITY GROWTH FUND
CLASS B SHARES
Year ended 7/31/02 $ 19,678 2.10% (1.25%) 2.10% 20%
Year ended 7/31/03 $ 20,700 2.08% (0.94%) 2.08% 19%
Year ended 7/31/04 $ 20,947 2.07% (1.24%) 2.07% 35%
Year ended 7/31/05 $ 17,791 2.08% (0.85%) 2.08% 71%
Year ended 7/31/06 $ 13,259 2.08% (1.18%) 2.08% 108%
Six months ended 1/31/07+ $ 12,362 2.08%** (0.10%)** 2.10%** 68%
- --------------------------------------------------------------------------------------------
QUALITY GROWTH FUND
CLASS C SHARES
Year ended 7/31/02 $ 8,044 2.09% (1.24%) 2.09% 20%
Year ended 7/31/03 $ 8,380 2.08% (0.94%) 2.08% 19%
Year ended 7/31/04 $ 7,536 2.07% (1.24%) 2.07% 35%
Year ended 7/31/05 $ 5,238 2.08% (0.83%) 2.08% 71%
Year ended 7/31/06 $ 3,199 2.08% (1.17%) 2.08% 108%
Six months ended 1/31/07+ $ 2,634 2.08%** (0.08%)** 2.10%** 68%
- --------------------------------------------------------------------------------------------
QUALITY GROWTH FUND
ADVISOR SHARES
10/29/01(d) to 7/31/02 $ 366 1.69%** (0.80%)** 1.69%** 20%
Year ended 7/31/03 $ 1,205 1.58% (0.48%) 1.58% 19%
Year ended 7/31/04 $ 3,127 1.57% (0.75%) 1.57% 35%
Year ended 7/31/05 $ 3,257 1.58% (0.38%) 1.58% 71%
Year ended 7/31/06 $ 1,877 1.58% (0.67%) 1.58% 108%
Six months ended 1/31/07+ $ 2,159 1.58%** 0.45%** 1.59%** 68%
- --------------------------------------------------------------------------------------------
FIFTH THIRD FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH PERIOD)
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS
----------------------------
NET REALIZED
AND
UNREALIZED CHANGE IN
NET ASSET GAINS/(LOSSES) NET ASSETS
VALUE, NET FROM RESULTING
BEGINNING INVESTMENT INVESTMENT FROM
OF PERIOD INCOME/(LOSS) TRANSACTIONS OPERATIONS
- ---------------------------------------------------------------------------------
BOND FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 $ 9.97 0.50 (0.01) 0.49
Year ended 7/31/03 $ 9.93 0.39 0.09 0.48
Year ended 7/31/04 $ 9.96 0.28 0.14 0.42
Year ended 7/31/05 $10.02 0.34 0.10 0.44
Year ended 7/31/06 $10.07 0.42 (0.30) 0.12
Six months ended 1/31/07+ $ 9.68 0.22 0.11 0.33
- ---------------------------------------------------------------------------------
BOND FUND
CLASS A SHARES
Year ended 7/31/02 $ 9.95 0.51 (0.03) 0.48
Year ended 7/31/03 $ 9.92 0.37 0.08 0.45
Year ended 7/31/04 $ 9.95 0.25 0.16 0.41
Year ended 7/31/05 $10.02 0.30 0.11 0.41
Year ended 7/31/06 $10.07 0.39 (0.30) 0.09
Six months ended 1/31/07+ $ 9.68 0.22 0.10 0.32
- ---------------------------------------------------------------------------------
BOND FUND
CLASS B SHARES
10/29/01(d) to 7/31/02 $10.13 0.29 (0.17) 0.12
Year ended 7/31/03 $ 9.93 0.28 0.08 0.36
Year ended 7/31/04 $ 9.95 0.15 0.18 0.33
Year ended 7/31/05 $10.02 0.23 0.10 0.33
Year ended 7/31/06 $10.07 0.32 (0.30) 0.02
Six months ended 1/31/07+ $ 9.68 0.18 0.10 0.28
- ---------------------------------------------------------------------------------
BOND FUND
CLASS C SHARES
10/29/01(d) to 7/31/02 $10.13 0.27 (0.16) 0.11
Year ended 7/31/03 $ 9.93 0.29 0.08 0.37
Year ended 7/31/04 $ 9.96 0.17 0.15 0.32
Year ended 7/31/05 $10.02 0.23 0.10 0.33
Year ended 7/31/06 $10.07 0.31 (0.28) 0.03
Six months ended 1/31/07+ $ 9.69 0.18 0.09 0.27
- ---------------------------------------------------------------------------------
BOND FUND
ADVISOR SHARES
10/29/01(d) to 7/31/02 $10.13 0.35 (0.19) 0.16
Year ended 7/31/03 $ 9.93 0.34 0.08 0.42
Year ended 7/31/04 $ 9.96 0.23 0.14 0.37
Year ended 7/31/05 $10.02 0.28 0.11 0.39
Year ended 7/31/06 $10.07 0.36 (0.30) 0.06
Six months ended 1/31/07+ $ 9.68 0.20 0.10 0.30
- ---------------------------------------------------------------------------------
LESS DIVIDENDS AND
DISTRIBUTIONS FROM
----------------------
NET TOTAL
TOTAL ASSET RETURN
NET NET DIVIDENDS VALUE, (EXCLUDES
INVESTMENT REALIZED AND END OF SALES
INCOME GAINS DISTRIBUTIONS PERIOD CHARGE)
- -----------------------------------------------------------------------------------------------
BOND FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 (0.53) -- (0.53) $ 9.93 5.06%
Year ended 7/31/03 (0.45) -- (0.45) $ 9.96 4.79%
Year ended 7/31/04 (0.36) -- (0.36) $10.02 4.26%
Year ended 7/31/05 (0.38) (0.01) (0.39) $10.07 4.43%
Year ended 7/31/06 (0.45) (0.06) (0.51) $ 9.68 1.21%
Six months ended 1/31/07+ (0.23) -- (0.23) $ 9.78 3.43%*
- -----------------------------------------------------------------------------------------------
BOND FUND
CLASS A SHARES
Year ended 7/31/02 (0.51) -- (0.51) $ 9.92 4.91%
Year ended 7/31/03 (0.42) -- (0.42) $ 9.95 4.62%
Year ended 7/31/04 (0.34) -- (0.34) $10.02 4.00%
Year ended 7/31/05 (0.35) (0.01) (0.36) $10.07 4.17%
Year ended 7/31/06 (0.42) (0.06) (0.48) $ 9.68 0.97%
Six months ended 1/31/07+ (0.22) -- (0.22) $ 9.78 3.28%*
- -----------------------------------------------------------------------------------------------
BOND FUND
CLASS B SHARES
10/29/01(d) to 7/31/02 (0.32) -- (0.32) $ 9.93 1.22%*
Year ended 7/31/03 (0.34) -- (0.34) $ 9.95 3.74%
Year ended 7/31/04 (0.26) -- (0.26) $10.02 3.19%
Year ended 7/31/05 (0.27) (0.01) (0.28) $10.07 3.38%
Year ended 7/31/06 (0.35) (0.06) (0.41) $ 9.68 0.20%
Six months ended 1/31/07+ (0.18) -- (0.18) $ 9.78 2.89%*
- -----------------------------------------------------------------------------------------------
BOND FUND
CLASS C SHARES
10/29/01(d) to 7/31/02 (0.31) -- (0.31) $ 9.93 1.20%*
Year ended 7/31/03 (0.34) -- (0.34) $ 9.96 3.75%
Year ended 7/31/04 (0.26) -- (0.26) $10.02 3.20%
Year ended 7/31/05 (0.27) (0.01) (0.28) $10.07 3.37%
Year ended 7/31/06 (0.35) (0.06) (0.41) $ 9.69 0.30%
Six months ended 1/31/07+ (0.18) -- (0.18) $ 9.78 2.79%*
- -----------------------------------------------------------------------------------------------
BOND FUND
ADVISOR SHARES
10/29/01(d) to 7/31/02 (0.36) -- (0.36) $ 9.93 1.69%*
Year ended 7/31/03 (0.39) -- (0.39) $ 9.96 4.25%
Year ended 7/31/04 (0.31) -- (0.31) $10.02 3.73%
Year ended 7/31/05 (0.33) (0.01) (0.34) $10.07 3.90%
Year ended 7/31/06 (0.39) (0.06) (0.45) $ 9.68 0.69%
Six months ended 1/31/07+ (0.20) -- (0.20) $ 9.78 3.14%*
- -----------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------
RATIOS OF RATIOS OF
NET EXPENSES RATIOS OF NET EXPENSES
ASSETS, TO INVESTMENT TO
END OF AVERAGE INCOME/(LOSS) AVERAGE PORTFOLIO
PERIOD NET TO AVERAGE NET TURNOVER
(000'S) ASSETS NET ASSETS ASSETS (a) RATE (b)
- -----------------------------------------------------------------------------------------------
BOND FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 $ 403,677 0.81% 4.74% 0.90% 229%
Year ended 7/31/03 $ 303,450 0.80% 3.86% 0.89% 332%
Year ended 7/31/04 $ 277,706 0.79% 2.75% 0.90% 389%
Year ended 7/31/05 $ 292,043 0.78% 3.28% 0.91% 385%
Year ended 7/31/06 $ 252,145 0.74% 4.23% 0.90% 352%
Six months ended 1/31/07+ $ 266,900 0.72%** 4.49%** 0.91%** 34%
- -----------------------------------------------------------------------------------------------
BOND FUND
CLASS A SHARES
Year ended 7/31/02 $ 19,949 1.06% 4.47% 1.16% 229%
Year ended 7/31/03 $ 20,572 1.05% 3.57% 1.14% 332%
Year ended 7/31/04 $ 22,559 1.04% 2.51% 1.15% 389%
Year ended 7/31/05 $ 15,876 1.03% 3.01% 1.16% 385%
Year ended 7/31/06 $ 11,657 0.99% 3.97% 1.15% 352%
Six months ended 1/31/07+ $ 10,363 0.97%** 4.24%** 1.16%** 34%
- -----------------------------------------------------------------------------------------------
BOND FUND
CLASS B SHARES
10/29/01(d) to 7/31/02 $ 6,857 1.81%** 3.70%** 1.93%** 229%
Year ended 7/31/03 $ 7,418 1.80% 2.81% 1.89% 332%
Year ended 7/31/04 $ 4,512 1.79% 1.76% 1.90% 389%
Year ended 7/31/05 $ 3,907 1.78% 2.27% 1.91% 385%
Year ended 7/31/06 $ 2,655 1.74% 3.20% 1.91% 352%
Six months ended 1/31/07+ $ 2,450 1.72%** 3.49%** 1.91%** 34%
- -----------------------------------------------------------------------------------------------
BOND FUND
CLASS C SHARES
10/29/01(d) to 7/31/02 $ 1,194 1.81%** 3.68%** 1.92%** 229%
Year ended 7/31/03 $ 1,246 1.80% 2.79% 1.89% 332%
Year ended 7/31/04 $ 768 1.79% 1.76% 1.90% 389%
Year ended 7/31/05 $ 649 1.78% 2.26% 1.91% 385%
Year ended 7/31/06 $ 315 1.74% 3.16% 1.91% 352%
Six months ended 1/31/07+ $ 251 1.72%** 3.49%** 1.91%** 34%
- -----------------------------------------------------------------------------------------------
BOND FUND
ADVISOR SHARES
10/29/01(d) to 7/31/02 $ 723 1.31%** 4.21%** 1.46%** 229%
Year ended 7/31/03 $ 737 1.30% 3.34% 1.39% 332%
Year ended 7/31/04 $ 655 1.29% 2.25% 1.40% 389%
Year ended 7/31/05 $ 622 1.28% 2.77% 1.41% 385%
Year ended 7/31/06 $ 260 1.24% 3.65% 1.40% 352%
Six months ended 1/31/07+ $ 235 1.22%** 3.99%** 1.41%** 34%
- -----------------------------------------------------------------------------------------------
FIFTH THIRD FUNDS
NOTES TO FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(a) During various periods, certain fees were reduced. The ratios shown do not
include these fee reductions.
(b) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(c) The Fund changed its fiscal year end to July 31 from December 31.
(d) Reflects date of commencement of operations.
(e) As required, effective August 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
accreting discounts on debt securities. The effect of this change for the
period ended July 31, 2002 for the Balanced Fund, Institutional, Class A,
Class B, Class C and Advisor Shares was to increase net investment income
per share by $0.02, decrease net realized and unrealized gains and losses
per share by ($0.02) and increase the ratio of net investment income to
average net assets from 0.96% to 1.11%, 0.75% to 0.86%, 0.09% to 0.10%,
0.10% to 0.11% and 0.47% to 0.55%, respectively. Per share, ratios and
supplemental data for periods prior to July 31, 2001 have not been restated
to reflect this change in presentation.
(f) As required, effective August 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
accreting discounts on debt securities. The effect of this change for the
period ended July 31, 2002 for the U.S. Government Bond Fund,
Institutional, Class A and Class C Shares was to increase net investment
income per share by $0.02, decrease net realized and unrealized gains and
losses per share by ($0.02) and increase the ratio of net investment income
to average net assets from 3.82% to 4.02%, 3.52% to 3.70% and 2.71% to
2.86%, respectively. Per share, ratios and supplemental data for the
periods prior to July 31, 2001 have not been restated to reflect this
change in presentation.
(g) As required, effective August 1, 2001, the Fund has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
accreting discounts on debt securities. The effect of this change for the
period ended July 31, 2002 for the Ohio Municipal Bond Fund, Institutional,
Class A, Class B and Class C Shares was to increase net investment income
per share by $0.00, decrease net realized and unrealized gains and losses
per share by ($0.00) and increase the ratio of net investment income to
average net assets from 3.77% to 3.80%, 3.50% to 3.53%, 2.69% to 2.72% and
2.70% to 2.72%, respectively. Per share, ratios and supplemental data for
periods prior to July 31, 2001 have not been restated to reflect this
change in presentation.
(h) Commencement of operations was August 1, 2005.
^ Amount is less than $0.005 per share.
+ Unaudited.
++ Formerly the Select Stock Fund.
* Not annualized.
** Annualized.
# Represents income or gains/(losses) from affiliates.
(3) Average shares method used in calculation.
FIFTH THIRD FUNDS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH PERIOD)
NET REALIZED
NET ASSET AND UNREALIZED
VALUE, NET GAINS/
BEGINNING INVESTMENT (LOSSES) FROM
OF PERIOD INCOME INVESTMENTS
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 $1.00 0.02 --
Year ended 7/31/03 $1.00 0.01 --^
Year ended 7/31/04 $1.00 0.01 --^
Year ended 7/31/05 $1.00 0.02 --^
Year ended 7/31/06 $1.00 0.04 --^
Six months ended 1/31/07+ $1.00 0.02 --^
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
CLASS A SHARES
Year ended 7/31/02 $1.00 0.02 --
Year ended 7/31/03 $1.00 0.01 --^
Year ended 7/31/04 $1.00 --^ --^
Year ended 7/31/05 $1.00 0.02 --^
Year ended 7/31/06 $1.00 0.04 --^
Six months ended 1/31/07+ $1.00 0.02 --^
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
CLASS B SHARES
Year ended 7/31/02 $1.00 0.01 --
Year ended 7/31/03 $1.00 --^ --^
Year ended 7/31/04 $1.00 --^ --^
Year ended 7/31/05 $1.00 0.01 --^
Year ended 7/31/06 $1.00 0.03 --^
Six months ended 1/31/07+ $1.00 0.02 --^
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
CLASS C SHARES
5/5/02(b) to 7/31/02 $1.00 --^ --
Year ended 7/31/03 $1.00 --^ --^
Year ended 7/31/04 $1.00 --^ --^
Year ended 7/31/05 $1.00 0.01 --^
Year ended 7/31/06 $1.00 0.03 --^
Six months ended 1/31/07+ $1.00 0.02 --^
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
ADVISOR SHARES
10/29/01(b) to 7/31/02 $1.00 0.01 --
Year ended 7/31/03 $1.00 0.01 --^
Year ended 7/31/04 $1.00 --^ --^
Year ended 7/31/05 $1.00 0.01 --^
Year ended 7/31/06 $1.00 0.03 --^
Six months ended 1/31/07+ $1.00 0.02 --^
- --------------------------------------------------------------------------------
LESS NET ASSET
DISTRIBUTIONS VALUE,
TO END OF TOTAL
SHAREHOLDERS PERIOD RETURN*
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 (0.02) $1.00 2.02%
Year ended 7/31/03 (0.01) $1.00 1.02%
Year ended 7/31/04 (0.01) $1.00 0.65%
Year ended 7/31/05 (0.02) $1.00 1.91%
Year ended 7/31/06 (0.04) $1.00 3.97%
Six months ended 1/31/07+ (0.02) $1.00 2.46%
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
CLASS A SHARES
Year ended 7/31/02 (0.02) $1.00 1.77%
Year ended 7/31/03 (0.01) $1.00 0.76%
Year ended 7/31/04 --^ $1.00 0.40%
Year ended 7/31/05 (0.02) $1.00 1.66%
Year ended 7/31/06 (0.04) $1.00 3.71%
Six months ended 1/31/07+ (0.02) $1.00 2.33%
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
CLASS B SHARES
Year ended 7/31/02 (0.01) $1.00 1.00%
Year ended 7/31/03 --^ $1.00 0.32%
Year ended 7/31/04 --^ $1.00 0.24%
Year ended 7/31/05 (0.01) $1.00 0.95%
Year ended 7/31/06 (0.03) $1.00 2.94%
Six months ended 1/31/07+ (0.02) $1.00 1.95%
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
CLASS C SHARES
5/5/02(b) to 7/31/02 --^ $1.00 0.19%
Year ended 7/31/03 --^ $1.00 0.32%
Year ended 7/31/04 --^ $1.00 0.23%
Year ended 7/31/05 (0.01) $1.00 0.95%
Year ended 7/31/06 (0.03) $1.00 2.93%
Six months ended 1/31/07+ (0.02) $1.00 1.95%
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
ADVISOR SHARES
10/29/01(b) to 7/31/02 (0.01) $1.00 1.02%
Year ended 7/31/03 (0.01) $1.00 0.53%
Year ended 7/31/04 --^ $1.00 0.24%
Year ended 7/31/05 (0.01) $1.00 1.40%
Year ended 7/31/06 (0.03) $1.00 3.45%
Six months ended 1/31/07+ (0.02) $1.00 2.20%
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------
RATIOS OF RATIOS OF RATIOS OF
NET EXPENSES NET EXPENSES
ASSETS, TO INVESTMENT TO
END OF AVERAGE INCOME AVERAGE
PERIOD NET TO AVERAGE NET
(000 'S) ASSETS** NET ASSETS** ASSETS (a)**
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
INSTITUTIONAL SHARES
Year ended 7/31/02 $1,732,204 0.55% 1.86% 0.65%
Year ended 7/31/03 $1,565,589 0.54% 1.02% 0.65%
Year ended 7/31/04 $1,064,622 0.54% 0.64% 0.66%
Year ended 7/31/05 $ 958,735 0.54% 1.86% 0.65%
Year ended 7/31/06 $ 563,551 0.54% 3.81% 0.66%
Six months ended 1/31/07+ $ 579,409 0.54% 4.83% 0.67%
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
CLASS A SHARES
Year ended 7/31/02 $ 447,556 0.80% 1.71% 0.89%
Year ended 7/31/03 $ 436,687 0.79% 0.77% 0.90%
Year ended 7/31/04 $ 387,424 0.79% 0.40% 0.91%
Year ended 7/31/05 $ 464,391 0.79% 1.67% 0.90%
Year ended 7/31/06 $ 455,183 0.79% 3.65% 0.91%
Six months ended 1/31/07+ $ 551,828 0.79% 4.57% 0.92%
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
CLASS B SHARES
Year ended 7/31/02 $ 1,893 1.55% 0.91% 1.64%
Year ended 7/31/03 $ 2,426 1.22% 0.33% 1.65%
Year ended 7/31/04 $ 1,651 0.95% 0.23% 1.66%
Year ended 7/31/05 $ 1,340 1.51% 1.14% 1.66%
Year ended 7/31/06 $ 1,216 1.54% 2.84% 1.66%
Six months ended 1/31/07+ $ 1,112 1.54% 3.83% 1.67%
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
CLASS C SHARES
5/5/02(b) to 7/31/02 $ 60 1.54% 0.48% 1.71%
Year ended 7/31/03 $ 154 1.14% 0.32% 1.65%
Year ended 7/31/04 $ 2,843 0.98% 0.25% 1.66%
Year ended 7/31/05 $ 1,474 1.46% 0.85% 1.65%
Year ended 7/31/06 $ 879 1.54% 2.80% 1.66%
Six months ended 1/31/07+ $ 1,237 1.54% 3.82% 1.67%
- --------------------------------------------------------------------------------
PRIME MONEY MARKET FUND
ADVISOR SHARES
10/29/01(b) to 7/31/02 $ 2 0.89% 1.23% 0.96%
Year ended 7/31/03 $ 62 1.02% 0.46% 1.15%
Year ended 7/31/04 $ 36 0.96% 0.26% 1.16%
Year ended 7/31/05 $ 42 1.04% 1.28% 1.15%
Year ended 7/31/06 $ 1,628 1.04% 3.71% 1.17%
Six months ended 1/31/07+ $ 3,060 1.04% 4.32% 1.16%
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTS
(a) During various periods, certain fees were reduced. The ratios shown do not
include these fee reductions.
(b) Reflects date of commencement of operations.
+ Unaudited.
^ Amount is less than $0.005.
* Not annualized for periods less than 1 year.
** Annualized for periods less than 1 year.
PART B
FIFTH THIRD FUNDS
38 FOUNTAIN SQUARE PLAZA
CINCINNATI, OHIO 45263
FIFTH THIRD MID CAP GROWTH FUND
FIFTH THIRD BOND FUND
FIFTH THIRD PRIME MONEY MARKET FUND
FIFTH THIRD QUALITY GROWTH FUND
(COLLECTIVELY, THE "ACQUIRING FUNDS")
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 28, 2007
This Statement of Additional Information contains information which may be of
interest to investors but which is not included in the Combined Prospectus/Proxy
Statement (the "Prospectus/Proxy Statement") of the Acquiring Funds dated
September 28, 2007, relating specifically to the proposed transfer of all of the
assets of each of the Acquired Funds listed below in exchange for units of
beneficial interest (collectively, "Shares") of each Acquiring Fund and the
assumption by each Acquiring Fund of all of the liabilities of each Acquired
Fund, followed by the dissolution and liquidation of each Acquired Fund, and the
distribution of Shares of each Acquiring Fund to the shareholders of each
Acquired Fund (each a "Reorganization", collectively the "Reorganizations").
- --------------------------------------------------------------------------------
ACQUIRED FUND: ACQUIRING FUND:
- --------------------------------------------------------------------------------
Fifth Third Technology Fund Fifth Third Mid Cap Growth Fund
- --------------------------------------------------------------------------------
Fifth Third Intermediate Bond Fund Fifth Third Bond Fund
- --------------------------------------------------------------------------------
Fifth Third U.S. Government Bond Fund Fifth Third Bond Fund
- --------------------------------------------------------------------------------
Fifth Third Government Money Market Fund Fifth Third Prime Money Market Fund
- --------------------------------------------------------------------------------
Fifth Third Balanced Fund Fifth Third Quality Growth Fund
- --------------------------------------------------------------------------------
This Statement of Additional Information is not a prospectus and is authorized
for distribution only when it accompanies or follows delivery of the
Prospectus/Proxy Statement. This Statement of Additional Information should be
read in conjunction with the Prospectus/Proxy Statement. A copy of the September
28, 2007 Prospectus/Proxy Statement may be obtained, without charge, by writing
to Fifth Third Funds, 38 Fountain Square Plaza, Cincinnati, Ohio 45263 or
calling 1-800-282-5706.
TABLE OF CONTENTS
Independent Registered Public Accounting Firm and Financial Statements......B-__
Schedules of Portfolio of Investments.......................................B-__
Statement of Assets and Liabilities.........................................B-__
Statement of Operations ....................................................B-__
Notes to Financial Statements...............................................B-__
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND FINANCIAL STATEMENTS.
PricewaterhouseCoopers LLP ("PwC") is the independent registered public
accounting firm for each of the Acquiring Funds. PwC audits and reports on the
Acquiring Funds' annual financial statements, and performs other professional
accounting, auditing and advisory services when engaged to do so by the
Acquiring Funds. PwC is also the independent registered public accounting firm
for each of the Acquired Funds, and audits and reports on the Acquired Funds'
annual financial statements and performs other professional accounting, auditing
and advisory services when engaged to do so by the Acquired Funds.
This Statement of Additional Information incorporates by reference the following
documents:
(1) Statement of Additional Information of Fifth Third Funds with
respect to Technology Fund, Mid Cap Growth Fund, Intermediate
Bond, U.S. Government Bond Fund, Bond Fund, Government Money
Market Fund, Prime Money Market Fund, Balanced Fund and
Quality Growth Fund dated November 29, 2006 (previously filed
on EDGAR, Accession No. 0000891804-06-003673), as amended
December 4, 2006 (previously filed on EDGAR, Accession No:
0000891804-06-003690), as amended December 7, 2006 (previously
filed on EDGAR, Accession No: 0000891804-06-003734); and
(2) Annual Report to Shareholders dated July 31, 2006 of Fifth
Third Funds with respect to Technology Fund, Mid Cap Growth
Fund, Intermediate Bond, U.S. Government Bond Fund, Bond Fund,
and Quality Growth Fund (Class A, Class B, Class C,
Institutional and Advisor Shares) (previously filed on EDGAR,
Accession No: 0000891804-06-003162), as amended (previously
filed on EDGAR, Accession No. 0000891804-06-003689); and
(3) Annual Report to Shareholders dated July 31, 2006 of Fifth
Third Funds with respect to Government Money Market Fund and
Prime Money Market Fund (Class A, Class B, Class C,
Institutional and Advisor Shares) (previously filed on EDGAR,
Accession No: 0000891804-06-003162), as amended (previously
filed on EDGAR, Accession No. 0000891804-06-003689); and
(4) Semi-Annual Report to Shareholders dated January 31, 2007 of
Fifth Third Funds with respect to Technology Fund, Mid Cap
Growth Fund, Intermediate Bond, U.S. Government Bond Fund,
Bond Fund, and Quality Growth Fund (Class A, Class B, Class C,
Institutional and Advisor Shares) (previously filed on EDGAR,
Accession No: 0000891804-07-001018) and
(5) Semi-Annual Report to Shareholders dated January 31, 2007 of
Fifth Third Funds with respect to Government Money Market Fund
and Prime Money Market Fund (Class A, Class B, Class C,
Institutional and Advisor Shares) (previously filed on EDGAR,
Accession No. 0000891804-07-001018).
The audited financial statements for each of the Acquiring Funds included in the
Prospectus/Proxy Statement and the audited financial statements for each of the
Acquiring Funds and Acquired Funds incorporated by reference into the
Prospectus/Proxy Statement and this Statement of Additional Information have
been so included and incorporated in reliance upon the reports of PwC, given on
their authority as experts in auditing and accounting.
Event (Unaudited) Subsequent to the Date of the Annual and Semi-Annual Reports
BISYS Fund Services, Inc. ("BISYS"), which formerly provided various services to
the Trust, reached a settlement and entered into an order (the "Order") with the
Securities and Exchange Commission ("SEC") regarding the SEC's investigation of
BISYS's past payment of certain marketing and other expenses with respect to
certain of its mutual fund clients. Neither the Trust or Fifth Third Asset
Management, Inc. (the "Adviser") were parties to the Order, nor is the Trust or
the Adviser bound by the Order or its findings. In response to the SEC's
inquiries related to this matter, including those of the Trust's service
arrangements with BISYS, on July 31, 2007, the Adviser made a one-time
contribution to certain series of the Trust. The contribution was in an amount
of less than one-half of one percent of the total assets of each recipient
series. It remains unclear the extent to which the Trust and certain of its
service providers are or may be affected by the SEC's investigation of BISYS or
by the Order.
PRO FORMA COMBINING FINANCIAL STATEMENTS OF ACQUIRED FUNDS AND ACQUIRING FUNDS
(UNAUDITED)
The accompanying unaudited pro forma combining investment portfolio and
statement of assets and liabilities assumes that the exchange described in the
next paragraph occurred as of January 31, 2007 and the unaudited pro forma
combining statement of operations for the twelve months ended January 31, 2007
presents the results of operations of each Acquiring Fund as if the combination
with each Acquired Fund had been consummated on February 1, 2006. The pro forma
results of operations are not necessarily indicative of future operations or the
actual results that would have occurred had the combination been consummated on
February 1, 2006. These historical statements have been derived from each
Acquiring Fund's and Acquired Fund's books and records utilized in calculating
daily net asset value at January 31, 2007, and for the twelve month period then
ended.
The pro forma statements give effect to the proposed transfer of all of the
assets of each Acquired Fund to the corresponding Acquiring Fund in exchange for
the assumption by each Acquiring Fund of all of the liabilities of the
corresponding Acquired Fund and for a number of Acquiring Fund's Shares equal in
value to the value of the net assets of the corresponding Acquired Fund
transferred to each Acquiring Fund.
The unaudited pro forma combining statements should be read in conjunction with
the separate financial statements of each Acquiring Fund and each Acquired Fund,
incorporated by reference in this Statement of Additional Information.
PRO FORMA COMBINED
SCHEDULES OF PORTFOLIO INVESTMENTS
JANUARY 31, 2007 (UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARES)
BOND FUND
---------- -------- ------
PRINCIPAL VALUE %
---------- -------- ------
COMMERCIAL PAPER
Cargill Global Funding, Inc.,
5.34%, 2/12/07 ** (c) $ 1,270 $ 1,268
5.33%, 2/20/07 ** (c) 2,435 2,428
Prudential Funding, 5.31%, 2/15/07 ** 2,150 2,146
UBS Finance, 5.35%, 2/12/07 **(c) 13,180 13,159
--------
Total Commercial Paper 19,001 6.8%
-------- ------
CORPORATE BONDS
Ace Securities Corp., 6.03%, 9/25/35 (a) - -
Alabama Power Cap, 5.50%,10/1/42 (a) - -
American Express Travel, 5.25%, 11/21/11 (b) - -
Ameriprise Financial, Inc., 5.65%, 11/15/15 - -
AOL Time Warner, Inc., 7.70%, 5/1/32 492 556
Associated Bank, NA, 5.49%, 6/2/08 (a) - -
Attentus CDO, Ltd.,
Series 2006-2A, Class A3B, 5.80%, 10/9/41 (a)(b) - -
Banc of America Commercial Mortgage, Inc.,
Series 2005-6, Class AJ, 5.18%, 9/10/47 2,850 2,780
Banc of America Funding Corp.,
Series 2006-G, Class 3A2, 5.75%, 7/20/36 (a) 4,895 4,863
Bank of America Corp., 9.38%, 9/15/09 - -
BankAmerica Capital, 8.00%, 12/15/26 - -
Bayview Financial Acquisition Trust,
Series 2006-D, Class 1A2, 5.66%, 12/28/36 (a) - -
Bear Stearns Adjustable Rate Mortgage Trust,
Series 2004-10, Class 12A3, 4.65%, 1/25/35 (a) 1,228 1,213
Series 2005-12, Class 11A2, 5.41%, 2/25/36 (a) 3,456 3,452
Series 2005-12, Class 13A1, 5.47%, 2/25/36 (a) 3,758 3,708
Bear Stearns Alternative-A Trust,
Series 2005-9, 5.85%, 11/25/35 - -
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2000-WF2, Class A1, 7.11%, 10/15/32 1,281 1,294
Series 2004-T14, Class A4, 5.20%, 1/12/41 2,000 1,966
Series 2004-T16, Class A6, 4.75%, 2/13/46 (a) 7,500 7,158
Chase Commercial Mortgage Securities Corp.,
Series 1998-1, Class A2, 6.56%, 5/18/30 - -
Chase Mortgage Finance Corp.,
Series 2006-A1, Class 2A3, 6.00%, 9/25/36 2,000 2,017
Series 2006-S2, Class 2A5, 6.00%, 10/25/36 (a) - -
Series 2006-S2, Class 2A6, 6.00%, 10/25/36 - -
Series 2006-A1, Class 2AX, 0.01%, 9/25/36 - -
Series 2006-A1, Class 4A1, 6.07%, 9/25/36 (a) - -
Chaseflex Trust,
Series 2006-1, Class A2A, 5.94%, 6/25/36 (a) 1,600 1,603
Series 2006-1, Class A4, 6.30%, 6/25/36 (a) - -
Series 2006-1, Class A6, 6.29%, 6/25/36 (a) - -
Series 2006-2, Class A4, 6.34%, 9/25/36 (a) - -
Cigna CDO Ltd.,
Series 2000-1X, Class A, 5.79%, 8/28/12 (a)(b)(c) 3,069 3,072
Citigroup Commercial Mortgage Trust,
Series 2005-EMG, 4.38%, 9/20/51 (b) - -
Citigroup Deutsche Bank Commercial Mortgage,
Series 2006-CD3, Class AJ, 5.69%, 10/15/48 - -
Comcast Cable, 7.13%, 6/15/13 1,750 1,888
Commerce Group, Inc., 5.95%, 12/9/13 - -
Commercial Mortgage Asset Trust,
Series 1999-C1, Class B, 7.23%, 1/17/32 (a) - -
Conocophillips Canada, 5.63%, 10/15/16 (d) - -
Costco Wholesale Corp., 5.50%, 3/15/07 - -
Countrywide Alternative Loan Trust,
6.50%, 9/25/34 (a) 582 591
Series 2004-2CB, Class 1A1, 4.25%, 3/25/34 - -
Series 2005-7CB, Class M, 5.50%, 4/25/35 - -
Countrywide Asset-Backed Certificates,
Series 2002-BC1, Class M1, 6.75%, 4/25/32 (a) 1,240 1,241
Cox Communications, Inc., 5.50%, 10/1/15 800 781
Credit Suisse First Boston Mortgage Sec. Corp.,
Series 2002-CKN2, 6.38%, 4/15/37 - -
Credit-Based Asset Servicing and Securitization,
Series 2004-CB8, Class AF3, 5.09%, 12/25/35 - -
Series 2006-CB1, Class AF4, 5.44%, 1/25/36 3,350 3,308
Series 2006-CB2, Class AF2, 5.50%, 12/25/36 (a) - -
Credit-Based Asset Servicing and Securitizing,
5.43%, 11/25/36 (a) - -
Crown Castle Towers LLC,
Series 2006-1A, Class E, 6.065%, 11/15/36 (b) 2,800 2,780
Series 2005-1A, 4.64%, 6/15/35 (b) - -
CS First Boston Mortgage Securities Corp.,
Series 2003-CK2, Class A4, 4.80%, 3/15/36 - -
Delta Airlines, 6.72%, 1/2/23 (d) 2,797 2,832
Deutsche Alternative-A Securities, Inc.,
Mortgage Loan Trust,
Series 2006-AB3, Class A3, 6.51%, 7/25/36 - -
Series 2006-AB4, Class A3A1, 5.90%, 10/25/36 - -
5.05%, 9/25/35 - -
Deutsche Mortgage Securities, Inc.,
5.04%, 6/26/35 (a) - -
Series 2005-1, 5.75%, 2/25/35 - -
Devon Energy Corp., 7.95%, 4/15/32 700 844
Duke Capital LLC, 5.50%, 3/1/14 - -
Duke Energy Corp., 6.45%, 10/15/32 850 897
First Franklin Mortgage Certificate,
Series 2004-FF11, Class 1A2, 5.70%, 1/25/35 (a) - -
Series 2005-FFA, Class M3, 5.52%, 3/25/25 - -
First Horizon ABS Trust,
Series 2006-HE1, Class A, 5.51%, 10/25/34 (a) - -
First Horizon Trust,
Series 2006-HE2, Class A, 5.45%, 10/25/26 (a) - -
First Tennessee Bank, Series BKNT, 5.65%, 4/1/16 - -
Fleet Financial Group, 7.38%, 12/1/09 - -
Gazprom International, 7.20%, 2/1/20 (b) 1,000 1,046
General Motors Acceptance Corp.,
Mortgage Corp. Loan Trust, 5.00%, 10/25/33 2,700 2,629
Mortgage Corp. Loan Trust, 4.34%, 11/1/34 (a) 1,750 1,722
Global Signal Trust,
Series 2006-1, Class C, 5.71%, 2/15/36 (a)(b) 2,550 2,550
Series 2006-1, Class D, 6.05%, 2/15/36 (b) - -
GMAC Commerical Mortgage Securities, Inc.,
Series 1997-C2, Class B, 6.70%, 4/15/29 - -
Goldman Sachs Group, Inc., 5.00%, 10/1/14 - -
Goldman Sachs Group, Inc., 6.13%, 2/15/33 1,100 1,109
Greenwich Capital Commercial Funding Corp.,
Series 2002-C1, Class A4, 4.95%, 1/11/35 1,000 978
Series 2004-GG1, Class A5, 4.88%, 6/10/36 2,000 1,962
GS Mortgage Securities Corp. II,
Series 2004-C1, Class B, 4.46%, 10/10/28 (a) - -
Series 2004-C1, Class C, 4.52%, 10/10/28 (a) - -
Series 2004-GG2, Class A3, 4.60%, 8/10/38 4,900 4,807
GSR Mortgage Loan Trust,
Series 2005-AR6, Class 3A1, 4.56%, 9/25/35 (a) - -
Harley-Davidson Motorcycle Trust,
Series 2004-2, Class B, 2.96%, 2/15/12 166 160
Hertz Vehicle Financing LLC,
Series 2005-2A, Class A6, 5.08%, 11/25/11 (b)(c) 3,000 2,987
Hibernia Corp., 5.35%, 5/1/14 - -
Home Depot, Inc., 5.40%, 3/1/16 800 773
Homebanc Mortgage Trust,
Series 2004-1, Class 2M2, 6.47%, 8/25/29 (a) - -
Series 2004-2, 5.77%, 12/25/34 (a)(c) 2,350 2,358
Series 2006-1, Class 1A1, 6.15%, 4/25/37 (a) 830 834
Series 2006-1, Class 2A1, 6.05%, 4/25/37 (a) - -
HSBC Finance Corp., 6.38%, 10/15/11 - -
Hyundai Auto Receivables Trust,
Series 2006-B, Class C, 5.25%, 5/15/13 - -
Indiana Michigan Power, 5.05%, 11/15/14 - -
IndyMac Index Mortgage Loan Trust,
Series 2005-AR9, 5.45%, 7/25/35 (a) 3,539 3,586
International Lease Finance Corp., 5.88%, 5/1/13 - -
I-Preferred Term Secs, 7.47%, 12/11/32 (a)(b) - -
I-Preferred Term Secs II, 7.37%, 5/22/33 (a)(b) - -
Irwin Home Equity,
Series 2006-3, Class 2A2, 5.83%, 9/25/37 (b) 1,225 1,228
Jefferies Group, Inc., 5.50%, 3/15/16 - -
JP Morgan Alternative Loan Trust,
Series 2005-S1, Class 1A2, 5.50%, 12/25/35 - -
Series 2006-A4, Class A7, 6.30%, 9/25/36 (a) - -
Series 2006-A4, Class A9, 6.30%, 9/25/36 - -
Series 2006-A5, Class 2A6, 5.80%, 10/25/36 (a) - -
Series 2006-S1, Class 1A18, 6.00%, 3/25/36 (a) - -
Series 2006-S2, Class A3, 5.92%, 5/25/36 (a) - -
Series 2006-S2, Class A6, 6.05%, 5/25/36 (a) - -
Series 2006-S3, Class A3A, 6.00%, 8/25/36 - -
Series 2006-S3, Class A7, 6.24%, 8/25/36 - -
JP Morgan Chase Commercial Mortgage Sec. Corp.,
Series 2003-CB6, Class A2, 5.26%, 7/12/37 865 856
Series 2003-LN1, Class A2, 4.92%, 10/15/37 - -
JP Morgan Chase Commercial Mortgage,
Series 2001-C1, Class A3, 5.86%, 10/12/35 (a) - -
JP Morgan Mortgage Acquisition Corp.,
Series 2006-WF1, Class A4, 6.13%, 7/25/36 - -
Series 2006-WF1, Class A5, 6.41%, 7/25/36 - -
JP Morgan Mortgage Trust,
Series 2005-A1, Class 2A1, 4.84%, 2/25/35 (a) 1,022 1,001
Series 2005-A1, Class 3A4, 5.05%, 2/25/35 - -
Series 2005-A2, Class 3A2, 4.93%, 4/25/35 3,000 2,924
Series 2005-A2, Class 5A1, 4.35%, 4/25/35 (a) - -
Series 2005-A2, Class 7CB1, 4.89%, 4/25/35 (a) 3,619 3,546
Series 2005-A3, 4.50%, 6/25/35 - -
Series 2005-A3, Class 7CA1, 5.17%, 6/25/35 2,667 2,653
Series 2005-ALT1, Class 4A1, 5.65%, 10/25/35 (a) 3,569 3,523
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a)(c) 3,680 3,650
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a) - -
Series 2006-A4, Class 2A2, 5.83%, 6/25/36 (a) 926 923
Series 2006-A7, Class 2A2, 5.87%, 1/25/37 (a) - -
JPM Chase Capital XXI, 6.25%, 2/2/37 (a) - -
Key Bank NA, 4.95%, 9/15/15 - -
Kroger Co., 6.20%, 6/15/12 500 509
LB-UBS Commercial Mortgage Trust,
Series 2003-C8, Class A4, 5.12%, 11/15/32 - -
Series 2005-C3, 4.55%, 7/15/30 330 321
Long Beach Auto Receivable Trust,
Series 2003-B, Class A4, 2.18%, 2/15/10 (c) 1,656 1,643
Manufacturers & Traders Trust Co.,
3.85%, 4/1/13 (a) - -
Marlin Leasing Receivables LLC, 4.75%, 8/15/12 (b) - -
MassMutual Global Funding II, 3.80%, 4/15/09 (b) - -
Merrill Lynch & Co., 6.05%, 5/16/16 - -
Morgan Stanley Capital I,
5.11%, 6/15/40 3,200 3,117
Series 2006-HQ9, Class AJ, 5.79%, 7/20/44 - -
Series 2006-IQ12, Class AJ, 5.40%, 12/15/43 - -
Morgan Stanley Dean Witter Capital I,
4.74%, 11/13/36 2,590 2,504
Morgan Stanley Mortgage Loan Trust, 5.00%, 8/25/19 2,083 2,028
Morgan Stanley, 4.75%, 4/1/14 - -
Motorola, Inc., 6.50%, 11/15/28 (d) 805 808
Navistar Financial Corp. Owner Trust,
5.52%, 4/15/08 (a)(c) 599 599
NCNB Corp., 10.20%, 7/15/15 2,500 3,231
Nextel Communications, 7.38%, 8/1/15 - -
Nomura Asset Acceptance Corp.,
Series 2004-AR4, Class 1A2, 4.93%, 12/25/34 - -
Series 2005-AR1, Class 1A2, 5.35%, 2/25/35 - -
Series 2005-AR2, Class 2A2, 5.56%, 5/25/35 (a) - -
Series 2005-AR3, 5.65%, 7/25/35 - -
Series 2005-AR5, Class 2A2, 5.64%, 10/25/35 (a) - -
Series 2006-AF1, Class 3A2, 6.64%, 6/25/36 (a) - -
Series 1998-D6, Class A2, 7.01%, 3/15/30 (a) - -
Series 1998-D6, Class A4, 7.59%, 3/15/30 (a) - -
Norfolk Southern Corp., 5.59%, 5/17/25 130 123
Oncor Electric Delivery, 7.00%, 5/1/32 480 519
Onyx Acceptance Owner Trust,
Series 2003-D, Class A4, 3.20%, 3/15/10 (c) 1,579 1,560
Pemex Master Trust, 6.13%, 8/15/08 825 828
Pemex Project Funding Master Trust, 7.38%, 12/15/14 - -
Popular ABS Mortgage Pass-Through Trust,
4.98%, 9/15/35 - -
PPG Industries, Inc., 6.50%, 11/1/07 - -
Preferred Term Securities II, 9.55%, 3/1/31 (b) - -
Preferred Term Securities X, 4.15%, 7/3/33 (b) 1,000 976
Premcor Refining Group, 9.25%, 2/1/10 - -
Prestige Auto Receivables Trust,
Series 2006-1A, Class A2, 5.25%, 6/17/13 (a)(b) - -
Principal Life Global, 5.13%,10/15/13 (b) - -
Ras Laffan Liquid & Natural Gas, 5.30%, 9/30/20 (b) - -
Regions Financial Corp., 7.00%, 3/1/11 - -
Renaissance Home Equity Loan Trust,
Series 2005-2, 4.93%, 8/25/35 (a) - -
Renaissance Home Equity Loan Trust,
Series 2006-1, Class AF4, 6.01%, 5/25/36 - -
Republic New York Corp., 7.00%, 3/22/11 1,000 1,055
Residential Accredit Loans, Inc.,
5.59%, 3/25/34 (a)(c) 1,832 1,833
Series 2005-QA12, Class CB1, 5.74%, 12/25/35 (a) 3,342 3,332
Series 2006-QA8, Class A3, 5.56%, 9/25/36 (a)(c) 5,020 5,025
Residential Asset Mortgage Products, Inc.,
Series 2002-RZ3, Class M1, 5.28%, 8/25/32 (a) - -
Series 2003-RZ5, Class A7, 4.97%, 9/25/33 (a) 3,305 3,240
Series 2005-AHL1, Class A2, 5.59%, 7/25/35 (a)(c) 2,700 2,702
Residential Funding Mortgage Securities,
Series 2006-HI3, Class A4, 6.31%, 5/25/36 (a) - -
Series 2006-HSA1, Class A4, 5.49%, 2/25/36 - -
Restructured Asset Certificate,
6.00%, 3/23/27 (b) 2,000 2,000
6.00%, 3/23/27 (b)(f) - -
SACO I Trust,
5.72%, 7/25/35 (a) - -
Series 2006-1, Class A, 5.49%, 9/25/35 (a)(c) 5,046 5,048
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a)(c) 4,000 4,000
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a) - -
Salomon Brothers Mortgage Securities,
Series 2002-KEY2, Class C, 5.05%, 3/18/36 - -
Salomon Brothers Mortgage Securities VII,
Series 2002-KEY2, Class A3, 4.87%, 3/18/36 - -
SBA CMBS Trust, Series 2006-1A,
Class D, 5.85%, 11/15/36 (b) - -
Class E, 6.17%, 11/15/36 (b) - -
Science Applications International Co.,
5.50%, 7/1/33 2,105 1,834
SLM Corp., 2.46%, 10/8/08 (a) - -
SLM Corp., 2.43%, 4/1/09 (a) - -
SLM Corp., 2.56%, 12/15/14 (a) - -
SLM Corp., 5.00%, 4/15/15 175 167
Sovrisc BV, 5.25%, 4/30/11 - -
Sprint Capital Corp., 8.75%, 3/15/32 600 712
Structured Asset Securities Corp.,
5.15%, 12/25/34 (a) 1,245 1,199
Suntrust Alternative Loan Trust,
Series 2005-1F, Class B3, 6.07%, 12/25/35 (a) 1,393 1,246
TAQA ABU DHABI National, 5.88%, 10/27/16 (b) - -
Tennessee Valley Authority, 6.39%, 12/15/17 ** 5,000 2,849
Thornburg Mortgage Securities Trust,
Series 2004-2, Class A3, 5.63%, 6/25/44 (a)(c) 2,530 2,528
Trans-Canada Pipeline, 5.60%, 3/31/34 750 703
Trapeza CDO LLC, Series 2007-12A,
Class C1, 6.51%, 4/6/42 (a)(b)(c) 1,000 1,000
Class C1, 6.51%, 4/6/42 (a)(b) - -
Travelers Property Casualty Corp., 7.75%, 4/15/26 85 101
Truck Retail Installment Paper Corp.,
5.59%, 12/15/16 (a)(b)(c) 6,950 6,969
U.S. Bank, N.A., 3.75%, 2/6/09 - -
UBS Preferred Funding Trust I, 8.62%, 10/29/49 (a) 925 1,020
UPFC Auto Receivables Trust,
Series 2004-A, Class A3, 3.27%, 9/15/10 - -
Vale Overseas, Ltd., 6.25%, 1/23/17 - -
Vanderbilt Acquisition Loan Trust,
Series 2002-1, Class A4, 6.57%, 5/7/27 - -
Vectren Utility Holdings, 5.45%, 12/1/2015 - -
Washington Mutual,
Series 2003-AR9, Class 1A6, 4.05%, 9/25/33 (a) 5,862 5,739
Series 2004-AR3, Class A-2, 4.24%, 6/25/34 1,592 1,565
Wells Fargo Mortgage Backed Securities Trust,
5.14%, 5/25/35 (a) 2,888 2,815
Series 2003-N, 4.75%, 12/25/33 (a) 1,550 1,487
WMALT Mortgage Pass-through Certificates,
Series 2005-1, Class 1A2, 5.50%, 3/25/35 (a) - -
YUM! Brands Inc., 7.70%, 7/1/12 (c) 1,250 1,354
-------- ------
Total Corporate Bonds 176,938 63.1%
-------- ------
FOREIGN BONDS
France Telecom, 8.75%, 3/1/31 650 850
Korea Electric Power, 4.25%, 9/12/07 (b) - -
--------
Total Foreign Bonds 850 0.3%
-------- ------
U.S. GOVERNMENT AGENCIES
FANNIE MAE
6.25%, 1/25/08 - -
5.30%, 5/8/08 - -
4.00%, 9/2/08 - -
6.05%, 12/1/08 2,810 2,827
6.38%, 6/15/09 - -
6.63%, 9/15/09 - -
4.62%, 4/25/10 - -
4.40%, 12/25/12 - -
5.65%, 4/10/13 (d) - -
6.00%, 5/1/17 198 201
6.50%, 6/1/17 283 290
6.50%, 8/1/17 209 214
5.50%, 1/1/18 14 14
5.50%, 2/1/18 8 8
4.50%, 5/1/18 TBA 7,200 6,911
6.00%, 5/1/18 1,007 1,020
5.50%, 2/1/25 1,366 1,353
5.00%, 5/1/25 2,233 2,162
7.50%, 6/1/28 232 243
6.50%, 8/1/28 207 212
6.50%, 6/1/29 189 194
6.50%, 4/1/32 422 432
6.50%, 6/1/32 775 793
7.00%, 6/1/32 220 228
6.50%, 7/1/32 1,199 1,226
7.50%, 12/1/32 170 177
6.00%, 1/1/33 368 371
6.00%, 1/1/33 TBA 14,000 14,049
6.50%, 3/1/33 315 321
5.00%, 5/1/33 TBA 14,000 13,431
5.50%, 5/1/33 TBA 8,500 8,360
6.00%, 8/25/33 (a) 2,474 2,458
5.50%, 12/25/33 900 893
5.50%, 5/25/34 3,150 3,037
5.22%, 8/1/34 - -
7.00%, 9/1/34 139 143
4.31%, 1/1/35 - -
5.50%, 6/1/35 827 813
6.00%, 7/1/35 4,399 4,415
6.00%, 9/1/35 2,393 2,402
5.00%, 11/1/35 3,834 3,681
6.00%, 1/1/36 4,229 4,245
5.62%, 4/25/36 (a)(c) 5,889 5,893
6.50%, 8/1/36 1,166 1,180
7.00%, 9/1/36 1,624 1,664
3.99%, 3/25/40 (a) - -
5.57%, 8/25/44 (a) - -
--------
85,861 30.7%
-------- ------
FEDERAL HOME LOAN BANK
4.50%, 8/8/08 (d) - -
4.06%, 8/25/09 - -
4.00%, 2/25/10 631 611
4.75%, 10/25/10 (a) - -
5.13%, 11/15/10 - -
5.15%, 12/20/11 - -
4.84%, 1/25/12 - -
5.87%, 9/15/36 (a)(c) - -
--------
611 0.2%
-------- ------
FINANCING CORPORATION
3.59%, 4/5/09 ** - -
4.21%, 12/6/11 ** - -
4.81%, 6/6/15 ** - -
6.46%, 11/11/17 ** - -
--------
- 0.0%
-------- ------
FREDDIE MAC
5.00%, 1/30/09 - -
5.73%, 12/28/09 - -
5.50%, 7/15/10 - -
6.88%, 9/15/10 - -
5.88%, 3/21/11 - -
5.00%, 8/15/12 - -
4.50%, 11/15/12 - -
4.65%, 10/10/13 - -
5.25%, 4/18/16 - -
4.00%, 1/15/17 7,500 7,078
4.00%, 12/15/21 - -
5.00%, 2/15/25 3,245 3,064
7.00%, 6/1/26 724 745
6.50%, 1/1/29 1,547 1,587
7.00%, 1/1/32 131 136
6.50%, 7/1/32 265 271
7.00%, 8/1/32 576 593
6.50%, 9/1/32 154 157
5.00%, 12/15/32 - -
5.50%, 2/1/33 TBA 12,900 12,695
6.00%, 9/1/33 622 625
5.00%, 1/15/34 - -
6.50%, 5/15/34 (a) 1,117 1,104
4.50%, 6/1/34 913 851
4.50%, 9/1/34 1,170 1,091
5.50%, 7/15/35 - -
6.00%, 11/1/35 TBA - -
5.97%, 6/1/36 (a) - -
5.72%, 7/15/36 (a)(c) 1,922 1,929
6.11%, 1/1/37 (a) - -
--------
31,926 11.4%
-------- ------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
9.50%, 12/15/09 - -
3.59%, 11/16/17 - -
3.96%, 9/16/21 - -
3.27%, 1/16/23 - -
4.39%, 5/16/23 - -
5.50%, 2/20/31 - -
5.50%, 12/20/32 - -
5.00%, 7/1/33 TBA 4,000 3,862
5.50%, 10/1/33 TBA 5,000 4,949
5.03%, 11/16/33 - -
5.50%, 11/20/33 - -
0.97%, 6/17/45 - -
0.52%, 3/16/46 - -
0.57%, 4/16/46 37,843 1,453
0.80%, 5/16/46 24,851 1,385
3.40%, 5/16/46 (a) 2,543 1,613
0.91%, 8/16/46 24,928 1,482
1.06%, 12/16/47 - -
1.00%, 2/16/48 14,985 942
1.065%, 2/16/48 24,913 1,451
--------
17,137 6.1%
-------- ------
SMALL BUSINESS ADMINISTRATION,
4.94%, 8/10/15 (c) - - 0.0%
TENNESSEE VALLEY AUTHORITY, 6.79%, 5/23/12 - - 0.0%
-------- ------
Total U.S. Government Agencies 135,535 48.4%
-------- ------
U.S. TREASURY OBLIGATIONS
U.S. TREASURY BILL 6.58%, 6/6/18 ** - -
U.S. TREASURY BONDS 4.50%, 2/15/36 (d) 3,525 3,295
U.S. TREASURY NOTES 2.38%, 4/15/11 - -
U.S. TREASURY NOTES 4.63%, 11/15/16 (d) - -
U.S. TREASURY STRIPS 5.45%, 5/15/17 **(d) 5,580 3,374
U.S. TREASURY STRIPS 5.00%, 11/15/27 ** 7,400 2,629
--------
Total U.S. Treasury Obligations 9,298 3.3%
-------- ------
SHARES
----------
INVESTMENTS IN AFFILIATES (e)
Fifth Third Institutional
Government Money Market Fund - -
Fifth Third Institutional
Money Market Fund 5,186,843 5,187
--------
Total Investments in Affiliates 5,187 1.9%
-------- ------
PRINCIPAL
----------
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds $9,231 9,231
--------
Total Short-Term Securities held as
Collateral for Securities Lending 9,231 3.3%
-------- ------
TOTAL INVESTMENTS 356,040 127.1%
LIABILITIES IN EXCESS OF OTHER ASSETS (75,841) -27.1%
-------- ------
NET ASSETS - 100.0% $280,199 100.0%
========= ======
Total Investments Cost + $359,271
=========
- -------------------------------------------
For federal income tax purposes:
Total investments cost $360,424
=========
Gross unrealized appreciation $ 931
Gross unrealized depreciation (5,315)
--------
Net unrealized depreciation $ (4,384)
=========
INTERMEDIATE
BOND FUND
------------ -------- ------
PRINCIPAL VALUE %
------------ -------- ------
COMMERCIAL PAPER
Cargill Global Funding, Inc.,
5.34%, 2/12/07 ** (c) $ - $ -
5.33%, 2/20/07 ** (c) - -
Prudential Funding, 5.31%, 2/15/07 ** - -
UBS Finance, 5.35%, 2/12/07 **(c) - -
--------
Total Commercial Paper - 0.0%
-------- ------
CORPORATE BONDS
Ace Securities Corp., 6.03%, 9/25/35 (a) 3,000 3,023
Alabama Power Cap, 5.50%,10/1/42 (a) 874 871
American Express Travel, 5.25%, 11/21/11 (b) 1,000 996
Ameriprise Financial, Inc., 5.65%, 11/15/15 1,480 1,481
AOL Time Warner, Inc., 7.70%, 5/1/32 - -
Associated Bank, NA, 5.49%, 6/2/08 (a) 5,000 5,010
Attentus CDO, Ltd.,
Series 2006-2A, Class A3B, 5.80%, 10/9/41 (a)(b) 5,000 5,000
Banc of America Commercial Mortgage, Inc.,
Series 2005-6, Class AJ, 5.18%, 9/10/47 - -
Banc of America Funding Corp.,
Series 2006-G, Class 3A2, 5.75%, 7/20/36 (a) 5,000 4,967
Bank of America Corp., 9.38%, 9/15/09 5,000 5,482
BankAmerica Capital, 8.00%, 12/15/26 2,000 2,080
Bayview Financial Acquisition Trust,
Series 2006-D, Class 1A2, 5.66%, 12/28/36 (a) 4,925 4,879
Bear Stearns Adjustable Rate Mortgage Trust,
Series 2004-10, Class 12A3, 4.65%, 1/25/35 (a) - -
Series 2005-12, Class 11A2, 5.41%, 2/25/36 (a) - -
Series 2005-12, Class 13A1, 5.47%, 2/25/36 (a) - -
Bear Stearns Alternative-A Trust,
Series 2005-9, 5.85%, 11/25/35 1,700 1,716
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2000-WF2, Class A1, 7.11%, 10/15/32 1,092 1,103
Series 2004-T14, Class A4, 5.20%, 1/12/41 - -
Series 2004-T16, Class A6, 4.75%, 2/13/46 (a) - -
Chase Commercial Mortgage Securities Corp.,
Series 1998-1, Class A2, 6.56%, 5/18/30 3,404 3,427
Chase Mortgage Finance Corp.,
Series 2006-A1, Class 2A3, 6.00%, 9/25/36 - -
Series 2006-S2, Class 2A5, 6.00%, 10/25/36 (a) 7,630 7,637
Series 2006-S2, Class 2A6, 6.00%, 10/25/36 5,105 5,072
Series 2006-A1, Class 2AX, 0.01%, 9/25/36 57,438 285
Series 2006-A1, Class 4A1, 6.07%, 9/25/36 (a) 9,931 9,908
Chaseflex Trust,
Series 2006-1, Class A2A, 5.94%, 6/25/36 (a) - -
Series 2006-1, Class A4, 6.30%, 6/25/36 (a) 7,344 7,390
Series 2006-1, Class A6, 6.29%, 6/25/36 (a) 5,265 5,348
Series 2006-2, Class A4, 6.34%, 9/25/36 (a) 5,100 5,145
Cigna CDO Ltd.,
Series 2000-1X, Class A, 5.79%, 8/28/12 (a)(b)(c) - -
Citigroup Commercial Mortgage Trust,
Series 2005-EMG, 4.38%, 9/20/51 (b) 5,000 4,832
Citigroup Deutsche Bank Commercial Mortgage,
Series 2006-CD3, Class AJ, 5.69%, 10/15/48 2,545 2,558
Comcast Cable, 7.13%, 6/15/13 - -
Commerce Group, Inc., 5.95%, 12/9/13 1,000 997
Commercial Mortgage Asset Trust,
Series 1999-C1, Class B, 7.23%, 1/17/32 (a) 1,500 1,641
Conocophillips Canada, 5.63%, 10/15/16 (d) 1,475 1,476
Costco Wholesale Corp., 5.50%, 3/15/07 2,015 2,014
Countrywide Alternative Loan Trust,
6.50%, 9/25/34 (a) - -
Series 2004-2CB, Class 1A1, 4.25%, 3/25/34 3,524 3,453
Series 2005-7CB, Class M, 5.50%, 4/25/35 2,456 2,361
Countrywide Asset-Backed Certificates,
Series 2002-BC1, Class M1, 6.75%, 4/25/32 (a) - -
Cox Communications, Inc., 5.50%, 10/1/15 - -
Credit Suisse First Boston Mortgage Sec. Corp.,
Series 2002-CKN2, 6.38%, 4/15/37 1,000 1,037
Credit-Based Asset Servicing and Securitization,
Series 2004-CB8, Class AF3, 5.09%, 12/25/35 5,145 5,028
Series 2006-CB1, Class AF4, 5.44%, 1/25/36 3,025 2,987
Series 2006-CB2, Class AF2, 5.50%, 12/25/36 (a) 2,400 2,390
Credit-Based Asset Servicing and Securitizing,
5.43%, 11/25/36 (a) 2,475 2,443
Crown Castle Towers LLC,
Series 2006-1A, Class E, 6.065%, 11/15/36 (b) 3,300 3,276
Series 2005-1A, 4.64%, 6/15/35 (b) 4,000 3,900
CS First Boston Mortgage Securities Corp.,
Series 2003-CK2, Class A4, 4.80%, 3/15/36 4,750 4,597
Delta Airlines, 6.72%, 1/2/23 (d) 932 944
Deutsche Alternative-A Securities, Inc.,
Mortgage Loan Trust,
Series 2006-AB3, Class A3, 6.51%, 7/25/36 2,445 2,458
Series 2006-AB4, Class A3A1, 5.90%, 10/25/36 5,145 5,138
5.05%, 9/25/35 1,540 1,525
Deutsche Mortgage Securities, Inc.,
5.04%, 6/26/35 (a) 1,864 1,855
Series 2005-1, 5.75%, 2/25/35 4,843 4,775
Devon Energy Corp., 7.95%, 4/15/32 - -
Duke Capital LLC, 5.50%, 3/1/14 1,825 1,767
Duke Energy Corp., 6.45%, 10/15/32 - -
First Franklin Mortgage Certificate,
Series 2004-FF11, Class 1A2, 5.70%, 1/25/35 (a) 267 267
Series 2005-FFA, Class M3, 5.52%, 3/25/25 600 595
First Horizon ABS Trust,
Series 2006-HE1, Class A, 5.51%, 10/25/34 (a) 1,967 1,967
First Horizon Trust,
Series 2006-HE2, Class A, 5.45%, 10/25/26 (a) 2,409 2,409
First Tennessee Bank, Series BKNT, 5.65%, 4/1/16 2,000 1,981
Fleet Financial Group, 7.38%, 12/1/09 5,000 5,252
Gazprom International, 7.20%, 2/1/20 (b) 2,015 2,108
General Motors Acceptance Corp.,
Mortgage Corp. Loan Trust, 5.00%, 10/25/33 - -
Mortgage Corp. Loan Trust, 4.34%, 11/1/34 (a) - -
Global Signal Trust,
Series 2006-1, Class C, 5.71%, 2/15/36 (a)(b) - -
Series 2006-1, Class D, 6.05%, 2/15/36 (b) 3,000 2,978
GMAC Commerical Mortgage Securities, Inc.,
Series 1997-C2, Class B, 6.70%, 4/15/29 395 396
Goldman Sachs Group, Inc., 5.00%, 10/1/14 2,500 2,411
Goldman Sachs Group, Inc., 6.13%, 2/15/33 - -
Greenwich Capital Commercial Funding Corp.,
Series 2002-C1, Class A4, 4.95%, 1/11/35 - -
Series 2004-GG1, Class A5, 4.88%, 6/10/36 - -
GS Mortgage Securities Corp. II,
Series 2004-C1, Class B, 4.46%, 10/10/28 (a) 2,600 2,507
Series 2004-C1, Class C, 4.52%, 10/10/28 (a) 3,888 3,752
Series 2004-GG2, Class A3, 4.60%, 8/10/38 - -
GSR Mortgage Loan Trust,
Series 2005-AR6, Class 3A1, 4.56%, 9/25/35 (a) 2,149 2,096
Harley-Davidson Motorcycle Trust,
Series 2004-2, Class B, 2.96%, 2/15/12 - -
Hertz Vehicle Financing LLC,
Series 2005-2A, Class A6, 5.08%, 11/25/11 (b)(c) - -
Hibernia Corp., 5.35%, 5/1/14 2,845 2,775
Home Depot, Inc., 5.40%, 3/1/16 - -
Homebanc Mortgage Trust,
Series 2004-1, Class 2M2, 6.47%, 8/25/29 (a) 611 611
Series 2004-2, 5.77%, 12/25/34 (a)(c) - -
Series 2006-1, Class 1A1, 6.15%, 4/25/37 (a) - -
Series 2006-1, Class 2A1, 6.05%, 4/25/37 (a) 4,135 4,165
HSBC Finance Corp., 6.38%, 10/15/11 2,000 2,081
Hyundai Auto Receivables Trust,
Series 2006-B, Class C, 5.25%, 5/15/13 2,665 2,654
Indiana Michigan Power, 5.05%, 11/15/14 2,035 1,949
IndyMac Index Mortgage Loan Trust,
Series 2005-AR9, 5.45%, 7/25/35 (a) - -
International Lease Finance Corp., 5.88%, 5/1/13 2,500 2,540
I-Preferred Term Secs, 7.47%, 12/11/32 (a)(b) 1,000 1,006
I-Preferred Term Secs II, 7.37%, 5/22/33 (a)(b) 1,000 1,010
Irwin Home Equity,
Series 2006-3, Class 2A2, 5.83%, 9/25/37 (b) - -
Jefferies Group, Inc., 5.50%, 3/15/16 2,000 1,933
JP Morgan Alternative Loan Trust,
Series 2005-S1, Class 1A2, 5.50%, 12/25/35 2,237 2,217
Series 2006-A4, Class A7, 6.30%, 9/25/36 (a) 5,000 5,069
Series 2006-A4, Class A9, 6.30%, 9/25/36 4,583 4,597
Series 2006-A5, Class 2A6, 5.80%, 10/25/36 (a) 5,640 5,619
Series 2006-S1, Class 1A18, 6.00%, 3/25/36 (a) 4,292 4,294
Series 2006-S2, Class A3, 5.92%, 5/25/36 (a) 4,730 4,696
Series 2006-S2, Class A6, 6.05%, 5/25/36 (a) 4,975 4,967
Series 2006-S3, Class A3A, 6.00%, 8/25/36 4,529 4,510
Series 2006-S3, Class A7, 6.24%, 8/25/36 5,245 5,310
JP Morgan Chase Commercial Mortgage Sec. Corp.,
Series 2003-CB6, Class A2, 5.26%, 7/12/37 4,460 4,415
Series 2003-LN1, Class A2, 4.92%, 10/15/37 6,680 6,473
JP Morgan Chase Commercial Mortgage,
Series 2001-C1, Class A3, 5.86%, 10/12/35 (a) 6,465 6,570
JP Morgan Mortgage Acquisition Corp.,
Series 2006-WF1, Class A4, 6.13%, 7/25/36 3,191 3,218
Series 2006-WF1, Class A5, 6.41%, 7/25/36 4,286 4,345
JP Morgan Mortgage Trust,
Series 2005-A1, Class 2A1, 4.84%, 2/25/35 (a) - -
Series 2005-A1, Class 3A4, 5.05%, 2/25/35 6,218 6,140
Series 2005-A2, Class 3A2, 4.93%, 4/25/35 - -
Series 2005-A2, Class 5A1, 4.35%, 4/25/35 (a) 3,900 3,741
Series 2005-A2, Class 7CB1, 4.89%, 4/25/35 (a) - -
Series 2005-A3, 4.50%, 6/25/35 4,286 4,151
Series 2005-A3, Class 7CA1, 5.17%, 6/25/35 - -
Series 2005-ALT1, Class 4A1, 5.65%, 10/25/35 (a) - -
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a)(c) - -
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a) 4,842 4,803
Series 2006-A4, Class 2A2, 5.83%, 6/25/36 (a) - -
Series 2006-A7, Class 2A2, 5.87%, 1/25/37 (a) 4,775 4,765
JPM Chase Capital XXI, 6.25%, 2/2/37 (a) 1,000 992
Key Bank NA, 4.95%, 9/15/15 2,365 2,254
Kroger Co., 6.20%, 6/15/12 - -
LB-UBS Commercial Mortgage Trust,
Series 2003-C8, Class A4, 5.12%, 11/15/32 2,924 2,873
Series 2005-C3, 4.55%, 7/15/30 - -
Long Beach Auto Receivable Trust,
Series 2003-B, Class A4, 2.18%, 2/15/10 (c) - -
Manufacturers & Traders Trust Co.,
3.85%, 4/1/13 (a) 1,075 1,056
Marlin Leasing Receivables LLC, 4.75%, 8/15/12 (b) 3,000 2,960
MassMutual Global Funding II, 3.80%, 4/15/09 (b) 1,390 1,345
Merrill Lynch & Co., 6.05%, 5/16/16 2,050 2,105
Morgan Stanley Capital I,
5.11%, 6/15/40 - -
Series 2006-HQ9, Class AJ, 5.79%, 7/20/44 5,235 5,314
Series 2006-IQ12, Class AJ, 5.40%, 12/15/43 5,000 4,921
Morgan Stanley Dean Witter Capital I,
4.74%, 11/13/36 - -
Morgan Stanley Mortgage Loan Trust, 5.00%, 8/25/19 - -
Morgan Stanley, 4.75%, 4/1/14 1,000 948
Motorola, Inc., 6.50%, 11/15/28 (d) - -
Navistar Financial Corp. Owner Trust,
5.52%, 4/15/08 (a)(c) - -
NCNB Corp., 10.20%, 7/15/15 - -
Nextel Communications, 7.38%, 8/1/15 1,285 1,317
Nomura Asset Acceptance Corp.,
Series 2004-AR4, Class 1A2, 4.93%, 12/25/34 1,310 1,303
Series 2005-AR1, Class 1A2, 5.35%, 2/25/35 2,253 2,231
Series 2005-AR2, Class 2A2, 5.56%, 5/25/35 (a) 1,705 1,728
Series 2005-AR3, 5.65%, 7/25/35 2,382 2,329
Series 2005-AR5, Class 2A2, 5.64%, 10/25/35 (a) 1,632 1,626
Series 2006-AF1, Class 3A2, 6.64%, 6/25/36 (a) 2,968 3,029
Series 1998-D6, Class A2, 7.01%, 3/15/30 (a) 1,000 1,086
Series 1998-D6, Class A4, 7.59%, 3/15/30 (a) 1,600 1,783
Norfolk Southern Corp., 5.59%, 5/17/25 - -
Oncor Electric Delivery, 7.00%, 5/1/32 - -
Onyx Acceptance Owner Trust,
Series 2003-D, Class A4, 3.20%, 3/15/10 (c) - -
Pemex Master Trust, 6.13%, 8/15/08 - -
Pemex Project Funding Master Trust, 7.38%, 12/15/14 2,000 2,165
Popular ABS Mortgage Pass-Through Trust,
4.98%, 9/15/35 1,510 1,491
PPG Industries, Inc., 6.50%, 11/1/07 30 30
Preferred Term Securities II, 9.55%, 3/1/31 (b) 817 915
Preferred Term Securities X, 4.15%, 7/3/33 (b) 1,425 1,391
Premcor Refining Group, 9.25%, 2/1/10 2,000 2,099
Prestige Auto Receivables Trust,
Series 2006-1A, Class A2, 5.25%, 6/17/13 (a)(b) 2,000 2,000
Principal Life Global, 5.13%,10/15/13 (b) 1,090 1,072
Ras Laffan Liquid & Natural Gas, 5.30%, 9/30/20 (b) 2,700 2,556
Regions Financial Corp., 7.00%, 3/1/11 1,275 1,349
Renaissance Home Equity Loan Trust,
Series 2005-2, 4.93%, 8/25/35 (a) 2,500 2,475
Renaissance Home Equity Loan Trust,
Series 2006-1, Class AF4, 6.01%, 5/25/36 1,575 1,574
Republic New York Corp., 7.00%, 3/22/11 - -
Residential Accredit Loans, Inc.,
5.59%, 3/25/34 (a)(c) - -
Series 2005-QA12, Class CB1, 5.74%, 12/25/35 (a) - -
Series 2006-QA8, Class A3, 5.56%, 9/25/36 (a)(c) - -
Residential Asset Mortgage Products, Inc.,
Series 2002-RZ3, Class M1, 5.28%, 8/25/32 (a) 725 722
Series 2003-RZ5, Class A7, 4.97%, 9/25/33 (a) - -
Series 2005-AHL1, Class A2, 5.59%, 7/25/35 (a)(c) - -
Residential Funding Mortgage Securities,
Series 2006-HI3, Class A4, 6.31%, 5/25/36 (a) 1,500 1,522
Series 2006-HSA1, Class A4, 5.49%, 2/25/36 1,500 1,478
Restructured Asset Certificate,
6.00%, 3/23/27 (b) - -
6.00%, 3/23/27 (b)(f) 3,250 3,250
SACO I Trust,
5.72%, 7/25/35 (a) 1,694 1,694
Series 2006-1, Class A, 5.49%, 9/25/35 (a)(c) - -
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a)(c) - -
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a) 2,500 2,500
Salomon Brothers Mortgage Securities,
Series 2002-KEY2, Class C, 5.05%, 3/18/36 1,417 1,390
Salomon Brothers Mortgage Securities VII,
Series 2002-KEY2, Class A3, 4.87%, 3/18/36 2,270 2,215
SBA CMBS Trust, Series 2006-1A,
Class D, 5.85%, 11/15/36 (b) 3,100 3,085
Class E, 6.17%, 11/15/36 (b) 1,350 1,346
Science Applications International Co.,
5.50%, 7/1/33 - -
SLM Corp., 2.46%, 10/8/08 (a) 1,500 1,459
SLM Corp., 2.43%, 4/1/09 (a) 1,260 1,226
SLM Corp., 2.56%, 12/15/14 (a) 1,000 945
SLM Corp., 5.00%, 4/15/15 - -
Sovrisc BV, 5.25%, 4/30/11 2,000 2,006
Sprint Capital Corp., 8.75%, 3/15/32 - -
Structured Asset Securities Corp.,
5.15%, 12/25/34 (a) - -
Suntrust Alternative Loan Trust,
Series 2005-1F, Class B3, 6.07%, 12/25/35 (a) 1,798 1,609
TAQA ABU DHABI National, 5.88%, 10/27/16 (b) 1,100 1,098
Tennessee Valley Authority, 6.39%, 12/15/17 ** - -
Thornburg Mortgage Securities Trust,
Series 2004-2, Class A3, 5.63%, 6/25/44 (a)(c) - -
Trans-Canada Pipeline, 5.60%, 3/31/34 - -
Trapeza CDO LLC, Series 2007-12A,
Class C1, 6.51%, 4/6/42 (a)(b)(c) - -
Class C1, 6.51%, 4/6/42 (a)(b) 3,000 3,000
Travelers Property Casualty Corp., 7.75%, 4/15/26 - -
Truck Retail Installment Paper Corp.,
5.59%, 12/15/16 (a)(b)(c) - -
U.S. Bank, N.A., 3.75%, 2/6/09 2,500 2,428
UBS Preferred Funding Trust I, 8.62%, 10/29/49 (a) - -
UPFC Auto Receivables Trust,
Series 2004-A, Class A3, 3.27%, 9/15/10 1,028 1,018
Vale Overseas, Ltd., 6.25%, 1/23/17 1,975 1,979
Vanderbilt Acquisition Loan Trust,
Series 2002-1, Class A4, 6.57%, 5/7/27 2,725 2,825
Vectren Utility Holdings, 5.45%, 12/1/2015 1,000 961
Washington Mutual,
Series 2003-AR9, Class 1A6, 4.05%, 9/25/33 (a) - -
Series 2004-AR3, Class A-2, 4.24%, 6/25/34 - -
Wells Fargo Mortgage Backed Securities Trust,
5.14%, 5/25/35 (a) - -
Series 2003-N, 4.75%, 12/25/33 (a) 2,545 2,441
WMALT Mortgage Pass-through Certificates,
Series 2005-1, Class 1A2, 5.50%, 3/25/35 (a) 1,855 1,833
YUM! Brands Inc., 7.70%, 7/1/12 (c) - -
-------- ------
Total Corporate Bonds 387,962 85.0%
-------- ------
FOREIGN BONDS
France Telecom, 8.75%, 3/1/31 - -
Korea Electric Power, 4.25%, 9/12/07 (b) 1,000 992
--------
Total Foreign Bonds 992 0.2%
-------- ------
U.S. GOVERNMENT AGENCIES
FANNIE MAE
6.25%, 1/25/08 264 264
5.30%, 5/8/08 2,445 2,443
4.00%, 9/2/08 - -
6.05%, 12/1/08 - -
6.38%, 6/15/09 - -
6.63%, 9/15/09 - -
4.62%, 4/25/10 - -
4.40%, 12/25/12 - -
5.65%, 4/10/13 (d) 4,675 4,670
6.00%, 5/1/17 - -
6.50%, 6/1/17 - -
6.50%, 8/1/17 - -
5.50%, 1/1/18 - -
5.50%, 2/1/18 - -
4.50%, 5/1/18 TBA - -
6.00%, 5/1/18 - -
5.50%, 2/1/25 - -
5.00%, 5/1/25 - -
7.50%, 6/1/28 - -
6.50%, 8/1/28 - -
6.50%, 6/1/29 - -
6.50%, 4/1/32 - -
6.50%, 6/1/32 - -
7.00%, 6/1/32 - -
6.50%, 7/1/32 - -
7.50%, 12/1/32 - -
6.00%, 1/1/33 - -
6.00%, 1/1/33 TBA - -
6.50%, 3/1/33 - -
5.00%, 5/1/33 TBA - -
5.50%, 5/1/33 TBA - -
6.00%, 8/25/33 (a) - -
5.50%, 12/25/33 - -
5.50%, 5/25/34 - -
5.22%, 8/1/34 145 144
7.00%, 9/1/34 - -
4.31%, 1/1/35 - -
5.50%, 6/1/35 - -
6.00%, 7/1/35 - -
6.00%, 9/1/35 - -
5.00%, 11/1/35 - -
6.00%, 1/1/36 - -
5.62%, 4/25/36 (a)(c) - -
6.50%, 8/1/36 - -
7.00%, 9/1/36 - -
3.99%, 3/25/40 (a) - -
5.57%, 8/25/44 (a) - -
--------
7,521 1.6%
-------- ------
FEDERAL HOME LOAN BANK
4.50%, 8/8/08 (d) 5,000 4,953
4.06%, 8/25/09 - -
4.00%, 2/25/10 - -
4.75%, 10/25/10 (a) - -
5.13%, 11/15/10 830 824
5.15%, 12/20/11 2,425 2,402
4.84%, 1/25/12 - -
5.87%, 9/15/36 (a)(c) - -
--------
8,179 1.8%
-------- ------
FINANCING CORPORATION
3.59%, 4/5/09 ** - -
4.21%, 12/6/11 ** - -
4.81%, 6/6/15 ** - -
6.46%, 11/11/17 ** - -
--------
- 0.0%
-------- ------
FREDDIE MAC
5.00%, 1/30/09 1,900 1,895
5.73%, 12/28/09 5,000 5,011
5.50%, 7/15/10 - -
6.88%, 9/15/10 - -
5.88%, 3/21/11 - -
5.00%, 8/15/12 2,275 2,262
4.50%, 11/15/12 - -
4.65%, 10/10/13 1,300 1,248
5.25%, 4/18/16 - -
4.00%, 1/15/17 - -
4.00%, 12/15/21 - -
5.00%, 2/15/25 - -
7.00%, 6/1/26 - -
6.50%, 1/1/29 - -
7.00%, 1/1/32 - -
6.50%, 7/1/32 - -
7.00%, 8/1/32 - -
6.50%, 9/1/32 - -
5.00%, 12/15/32 - -
5.50%, 2/1/33 TBA - -
6.00%, 9/1/33 - -
5.00%, 1/15/34 - -
6.50%, 5/15/34 (a) 1,172 1,159
4.50%, 6/1/34 - -
4.50%, 9/1/34 - -
5.50%, 7/15/35 - -
6.00%, 11/1/35 TBA - -
5.97%, 6/1/36 (a) 125 125
5.72%, 7/15/36 (a)(c) - -
6.11%, 1/1/37 (a) 5,951 5,984
--------
17,684 3.9%
-------- ------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
9.50%, 12/15/09 812 838
3.59%, 11/16/17 - -
3.96%, 9/16/21 - -
3.27%, 1/16/23 - -
4.39%, 5/16/23 - -
5.50%, 2/20/31 - -
5.50%, 12/20/32 - -
5.00%, 7/1/33 TBA - -
5.50%, 10/1/33 TBA - -
5.03%, 11/16/33 5,640 5,435
5.50%, 11/20/33 - -
0.97%, 6/17/45 10,510 568
0.52%, 3/16/46 13,928 582
0.57%, 4/16/46 24,897 956
0.80%, 5/16/46 19,880 1,108
3.40%, 5/16/46 (a) - -
0.91%, 8/16/46 9,971 593
1.06%, 12/16/47 - -
1.00%, 2/16/48 30,968 1,946
1.065%, 2/16/48 54,808 3,193
--------
15,219 3.3%
-------- ------
SMALL BUSINESS ADMINISTRATION,
4.94%, 8/10/15 (c) - - 0.0%
TENNESSEE VALLEY AUTHORITY, 6.79%, 5/23/12 - - 0.0%
-------- ------
Total U.S. Government Agencies 48,603 10.6%
-------- ------
U.S. TREASURY OBLIGATIONS
U.S. TREASURY BILL 6.58%, 6/6/18 ** - -
U.S. TREASURY BONDS 4.50%, 2/15/36 (d) - -
U.S. TREASURY NOTES 2.38%, 4/15/11 - -
U.S. TREASURY NOTES 4.63%, 11/15/16 (d) 3,000 2,954
U.S. TREASURY STRIPS 5.45%, 5/15/17 **(d) - -
U.S. TREASURY STRIPS 5.00%, 11/15/27 ** - -
--------
Total U.S. Treasury Obligations 2,954 0.6%
-------- ------
SHARES
-------
INVESTMENTS IN AFFILIATES (e)
Fifth Third Institutional
Government Money Market Fund - -
Fifth Third Institutional
Money Market Fund 17,243,970 17,244
--------
Total Investments in Affiliates 17,244 3.8%
-------- ------
PRINCIPAL
----------
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds $16,587 16,587
--------
Total Short-Term Securities held as
Collateral for Securities Lending 16,587 3.6%
-------- ------
TOTAL INVESTMENTS 474,342 103.8%
LIABILITIES IN EXCESS OF OTHER ASSETS (17,243) -3.8%
-------- ------
NET ASSETS - 100.0% $ 457,099 100.0%
========= ======
Total Investments Cost + $475,755
=========
- -------------------------------------------
For federal income tax purposes:
Total investments cost $ 476,732
=========
Gross unrealized appreciation $ 1,259
Gross unrealized depreciation (3,649)
--------
Net unrealized depreciation $(2,390)
=========
U.S. GOVERNMENT
BOND FUND
---------- -------- ------
PRINCIPAL VALUE %
---------- -------- ------
COMMERCIAL PAPER
Cargill Global Funding, Inc.,
5.34%, 2/12/07 ** (c) $ - $ -
5.33%, 2/20/07 ** (c) - -
Prudential Funding, 5.31%, 2/15/07 ** - -
UBS Finance, 5.35%, 2/12/07 **(c) - -
--------
Total Commercial Paper - 0.0%
-------- ------
CORPORATE BONDS
Ace Securities Corp., 6.03%, 9/25/35 (a) - -
Alabama Power Cap, 5.50%,10/1/42 (a) - -
American Express Travel, 5.25%, 11/21/11 (b) - -
Ameriprise Financial, Inc., 5.65%, 11/15/15 - -
AOL Time Warner, Inc., 7.70%, 5/1/32 - -
Associated Bank, NA, 5.49%, 6/2/08 (a) - -
Attentus CDO, Ltd.,
Series 2006-2A, Class A3B, 5.80%, 10/9/41 (a)(b) - -
Banc of America Commercial Mortgage, Inc.,
Series 2005-6, Class AJ, 5.18%, 9/10/47 - -
Banc of America Funding Corp.,
Series 2006-G, Class 3A2, 5.75%, 7/20/36 (a) - -
Bank of America Corp., 9.38%, 9/15/09 - -
BankAmerica Capital, 8.00%, 12/15/26 - -
Bayview Financial Acquisition Trust,
Series 2006-D, Class 1A2, 5.66%, 12/28/36 (a) - -
Bear Stearns Adjustable Rate Mortgage Trust,
Series 2004-10, Class 12A3, 4.65%, 1/25/35 (a) - -
Series 2005-12, Class 11A2, 5.41%, 2/25/36 (a) - -
Series 2005-12, Class 13A1, 5.47%, 2/25/36 (a) - -
Bear Stearns Alternative-A Trust,
Series 2005-9, 5.85%, 11/25/35 - -
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2000-WF2, Class A1, 7.11%, 10/15/32 - -
Series 2004-T14, Class A4, 5.20%, 1/12/41 - -
Series 2004-T16, Class A6, 4.75%, 2/13/46 (a) - -
Chase Commercial Mortgage Securities Corp.,
Series 1998-1, Class A2, 6.56%, 5/18/30 - -
Chase Mortgage Finance Corp.,
Series 2006-A1, Class 2A3, 6.00%, 9/25/36 - -
Series 2006-S2, Class 2A5, 6.00%, 10/25/36 (a) - -
Series 2006-S2, Class 2A6, 6.00%, 10/25/36 - -
Series 2006-A1, Class 2AX, 0.01%, 9/25/36 - -
Series 2006-A1, Class 4A1, 6.07%, 9/25/36 (a) - -
Chaseflex Trust,
Series 2006-1, Class A2A, 5.94%, 6/25/36 (a) - -
Series 2006-1, Class A4, 6.30%, 6/25/36 (a) - -
Series 2006-1, Class A6, 6.29%, 6/25/36 (a) - -
Series 2006-2, Class A4, 6.34%, 9/25/36 (a) - -
Cigna CDO Ltd.,
Series 2000-1X, Class A, 5.79%, 8/28/12 (a)(b)(c) - -
Citigroup Commercial Mortgage Trust,
Series 2005-EMG, 4.38%, 9/20/51 (b) - -
Citigroup Deutsche Bank Commercial Mortgage,
Series 2006-CD3, Class AJ, 5.69%, 10/15/48 - -
Comcast Cable, 7.13%, 6/15/13 - -
Commerce Group, Inc., 5.95%, 12/9/13 - -
Commercial Mortgage Asset Trust,
Series 1999-C1, Class B, 7.23%, 1/17/32 (a) - -
Conocophillips Canada, 5.63%, 10/15/16 (d) - -
Costco Wholesale Corp., 5.50%, 3/15/07 - -
Countrywide Alternative Loan Trust,
6.50%, 9/25/34 (a) - -
Series 2004-2CB, Class 1A1, 4.25%, 3/25/34 - -
Series 2005-7CB, Class M, 5.50%, 4/25/35 - -
Countrywide Asset-Backed Certificates,
Series 2002-BC1, Class M1, 6.75%, 4/25/32 (a) - -
Cox Communications, Inc., 5.50%, 10/1/15 - -
Credit Suisse First Boston Mortgage Sec. Corp.,
Series 2002-CKN2, 6.38%, 4/15/37 - -
Credit-Based Asset Servicing and Securitization,
Series 2004-CB8, Class AF3, 5.09%, 12/25/35 - -
Series 2006-CB1, Class AF4, 5.44%, 1/25/36 - -
Series 2006-CB2, Class AF2, 5.50%, 12/25/36 (a) - -
Credit-Based Asset Servicing and Securitizing,
5.43%, 11/25/36 (a) - -
Crown Castle Towers LLC,
Series 2006-1A, Class E, 6.065%, 11/15/36 (b) - -
Series 2005-1A, 4.64%, 6/15/35 (b) - -
CS First Boston Mortgage Securities Corp.,
Series 2003-CK2, Class A4, 4.80%, 3/15/36 - -
Delta Airlines, 6.72%, 1/2/23 (d) - -
Deutsche Alternative-A Securities, Inc.,
Mortgage Loan Trust,
Series 2006-AB3, Class A3, 6.51%, 7/25/36 - -
Series 2006-AB4, Class A3A1, 5.90%, 10/25/36 - -
5.05%, 9/25/35 - -
Deutsche Mortgage Securities, Inc.,
5.04%, 6/26/35 (a) - -
Series 2005-1, 5.75%, 2/25/35 - -
Devon Energy Corp., 7.95%, 4/15/32 - -
Duke Capital LLC, 5.50%, 3/1/14 - -
Duke Energy Corp., 6.45%, 10/15/32 - -
First Franklin Mortgage Certificate,
Series 2004-FF11, Class 1A2, 5.70%, 1/25/35 (a) - -
Series 2005-FFA, Class M3, 5.52%, 3/25/25 - -
First Horizon ABS Trust,
Series 2006-HE1, Class A, 5.51%, 10/25/34 (a) - -
First Horizon Trust,
Series 2006-HE2, Class A, 5.45%, 10/25/26 (a) - -
First Tennessee Bank, Series BKNT, 5.65%, 4/1/16 - -
Fleet Financial Group, 7.38%, 12/1/09 - -
Gazprom International, 7.20%, 2/1/20 (b) - -
General Motors Acceptance Corp.,
Mortgage Corp. Loan Trust, 5.00%, 10/25/33 - -
Mortgage Corp. Loan Trust, 4.34%, 11/1/34 (a) - -
Global Signal Trust,
Series 2006-1, Class C, 5.71%, 2/15/36 (a)(b) - -
Series 2006-1, Class D, 6.05%, 2/15/36 (b) - -
GMAC Commerical Mortgage Securities, Inc.,
Series 1997-C2, Class B, 6.70%, 4/15/29 - -
Goldman Sachs Group, Inc., 5.00%, 10/1/14 - -
Goldman Sachs Group, Inc., 6.13%, 2/15/33 - -
Greenwich Capital Commercial Funding Corp.,
Series 2002-C1, Class A4, 4.95%, 1/11/35 - -
Series 2004-GG1, Class A5, 4.88%, 6/10/36 - -
GS Mortgage Securities Corp. II,
Series 2004-C1, Class B, 4.46%, 10/10/28 (a) - -
Series 2004-C1, Class C, 4.52%, 10/10/28 (a) - -
Series 2004-GG2, Class A3, 4.60%, 8/10/38 - -
GSR Mortgage Loan Trust,
Series 2005-AR6, Class 3A1, 4.56%, 9/25/35 (a) - -
Harley-Davidson Motorcycle Trust,
Series 2004-2, Class B, 2.96%, 2/15/12 - -
Hertz Vehicle Financing LLC,
Series 2005-2A, Class A6, 5.08%, 11/25/11 (b)(c) - -
Hibernia Corp., 5.35%, 5/1/14 - -
Home Depot, Inc., 5.40%, 3/1/16 - -
Homebanc Mortgage Trust,
Series 2004-1, Class 2M2, 6.47%, 8/25/29 (a) - -
Series 2004-2, 5.77%, 12/25/34 (a)(c) - -
Series 2006-1, Class 1A1, 6.15%, 4/25/37 (a) - -
Series 2006-1, Class 2A1, 6.05%, 4/25/37 (a) - -
HSBC Finance Corp., 6.38%, 10/15/11 - -
Hyundai Auto Receivables Trust,
Series 2006-B, Class C, 5.25%, 5/15/13 - -
Indiana Michigan Power, 5.05%, 11/15/14 - -
IndyMac Index Mortgage Loan Trust,
Series 2005-AR9, 5.45%, 7/25/35 (a) - -
International Lease Finance Corp., 5.88%, 5/1/13 - -
I-Preferred Term Secs, 7.47%, 12/11/32 (a)(b) - -
I-Preferred Term Secs II, 7.37%, 5/22/33 (a)(b) - -
Irwin Home Equity,
Series 2006-3, Class 2A2, 5.83%, 9/25/37 (b) - -
Jefferies Group, Inc., 5.50%, 3/15/16 - -
JP Morgan Alternative Loan Trust,
Series 2005-S1, Class 1A2, 5.50%, 12/25/35 - -
Series 2006-A4, Class A7, 6.30%, 9/25/36 (a) - -
Series 2006-A4, Class A9, 6.30%, 9/25/36 - -
Series 2006-A5, Class 2A6, 5.80%, 10/25/36 (a) - -
Series 2006-S1, Class 1A18, 6.00%, 3/25/36 (a) - -
Series 2006-S2, Class A3, 5.92%, 5/25/36 (a) - -
Series 2006-S2, Class A6, 6.05%, 5/25/36 (a) - -
Series 2006-S3, Class A3A, 6.00%, 8/25/36 - -
Series 2006-S3, Class A7, 6.24%, 8/25/36 - -
JP Morgan Chase Commercial Mortgage Sec. Corp.,
Series 2003-CB6, Class A2, 5.26%, 7/12/37 - -
Series 2003-LN1, Class A2, 4.92%, 10/15/37 - -
JP Morgan Chase Commercial Mortgage,
Series 2001-C1, Class A3, 5.86%, 10/12/35 (a) - -
JP Morgan Mortgage Acquisition Corp.,
Series 2006-WF1, Class A4, 6.13%, 7/25/36 - -
Series 2006-WF1, Class A5, 6.41%, 7/25/36 - -
JP Morgan Mortgage Trust,
Series 2005-A1, Class 2A1, 4.84%, 2/25/35 (a) - -
Series 2005-A1, Class 3A4, 5.05%, 2/25/35 - -
Series 2005-A2, Class 3A2, 4.93%, 4/25/35 - -
Series 2005-A2, Class 5A1, 4.35%, 4/25/35 (a) - -
Series 2005-A2, Class 7CB1, 4.89%, 4/25/35 (a) - -
Series 2005-A3, 4.50%, 6/25/35 - -
Series 2005-A3, Class 7CA1, 5.17%, 6/25/35 - -
Series 2005-ALT1, Class 4A1, 5.65%, 10/25/35 (a) - -
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a)(c) - -
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a) - -
Series 2006-A4, Class 2A2, 5.83%, 6/25/36 (a) - -
Series 2006-A7, Class 2A2, 5.87%, 1/25/37 (a) - -
JPM Chase Capital XXI, 6.25%, 2/2/37 (a) - -
Key Bank NA, 4.95%, 9/15/15 - -
Kroger Co., 6.20%, 6/15/12 - -
LB-UBS Commercial Mortgage Trust,
Series 2003-C8, Class A4, 5.12%, 11/15/32 - -
Series 2005-C3, 4.55%, 7/15/30 - -
Long Beach Auto Receivable Trust,
Series 2003-B, Class A4, 2.18%, 2/15/10 (c) - -
Manufacturers & Traders Trust Co.,
3.85%, 4/1/13 (a) - -
Marlin Leasing Receivables LLC, 4.75%, 8/15/12 (b) - -
MassMutual Global Funding II, 3.80%, 4/15/09 (b) - -
Merrill Lynch & Co., 6.05%, 5/16/16 - -
Morgan Stanley Capital I,
5.11%, 6/15/40 - -
Series 2006-HQ9, Class AJ, 5.79%, 7/20/44 - -
Series 2006-IQ12, Class AJ, 5.40%, 12/15/43 - -
Morgan Stanley Dean Witter Capital I,
4.74%, 11/13/36 - -
Morgan Stanley Mortgage Loan Trust, 5.00%, 8/25/19 - -
Morgan Stanley, 4.75%, 4/1/14 - -
Motorola, Inc., 6.50%, 11/15/28 (d) - -
Navistar Financial Corp. Owner Trust,
5.52%, 4/15/08 (a)(c) - -
NCNB Corp., 10.20%, 7/15/15 - -
Nextel Communications, 7.38%, 8/1/15 - -
Nomura Asset Acceptance Corp.,
Series 2004-AR4, Class 1A2, 4.93%, 12/25/34 - -
Series 2005-AR1, Class 1A2, 5.35%, 2/25/35 - -
Series 2005-AR2, Class 2A2, 5.56%, 5/25/35 (a) - -
Series 2005-AR3, 5.65%, 7/25/35 - -
Series 2005-AR5, Class 2A2, 5.64%, 10/25/35 (a) - -
Series 2006-AF1, Class 3A2, 6.64%, 6/25/36 (a) - -
Series 1998-D6, Class A2, 7.01%, 3/15/30 (a) - -
Series 1998-D6, Class A4, 7.59%, 3/15/30 (a) - -
Norfolk Southern Corp., 5.59%, 5/17/25 - -
Oncor Electric Delivery, 7.00%, 5/1/32 - -
Onyx Acceptance Owner Trust,
Series 2003-D, Class A4, 3.20%, 3/15/10 (c) - -
Pemex Master Trust, 6.13%, 8/15/08 - -
Pemex Project Funding Master Trust, 7.38%, 12/15/14 - -
Popular ABS Mortgage Pass-Through Trust,
4.98%, 9/15/35 - -
PPG Industries, Inc., 6.50%, 11/1/07 - -
Preferred Term Securities II, 9.55%, 3/1/31 (b) - -
Preferred Term Securities X, 4.15%, 7/3/33 (b) - -
Premcor Refining Group, 9.25%, 2/1/10 - -
Prestige Auto Receivables Trust,
Series 2006-1A, Class A2, 5.25%, 6/17/13 (a)(b) - -
Principal Life Global, 5.13%,10/15/13 (b) - -
Ras Laffan Liquid & Natural Gas, 5.30%, 9/30/20 (b) - -
Regions Financial Corp., 7.00%, 3/1/11 - -
Renaissance Home Equity Loan Trust,
Series 2005-2, 4.93%, 8/25/35 (a) - -
Renaissance Home Equity Loan Trust,
Series 2006-1, Class AF4, 6.01%, 5/25/36 - -
Republic New York Corp., 7.00%, 3/22/11 - -
Residential Accredit Loans, Inc.,
5.59%, 3/25/34 (a)(c) - -
Series 2005-QA12, Class CB1, 5.74%, 12/25/35 (a) - -
Series 2006-QA8, Class A3, 5.56%, 9/25/36 (a)(c) - -
Residential Asset Mortgage Products, Inc.,
Series 2002-RZ3, Class M1, 5.28%, 8/25/32 (a) - -
Series 2003-RZ5, Class A7, 4.97%, 9/25/33 (a) - -
Series 2005-AHL1, Class A2, 5.59%, 7/25/35 (a)(c) - -
Residential Funding Mortgage Securities,
Series 2006-HI3, Class A4, 6.31%, 5/25/36 (a) - -
Series 2006-HSA1, Class A4, 5.49%, 2/25/36 - -
Restructured Asset Certificate,
6.00%, 3/23/27 (b) - -
6.00%, 3/23/27 (b)(f) - -
SACO I Trust,
5.72%, 7/25/35 (a) - -
Series 2006-1, Class A, 5.49%, 9/25/35 (a)(c) - -
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a)(c) - -
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a) - -
Salomon Brothers Mortgage Securities,
Series 2002-KEY2, Class C, 5.05%, 3/18/36 - -
Salomon Brothers Mortgage Securities VII,
Series 2002-KEY2, Class A3, 4.87%, 3/18/36 - -
SBA CMBS Trust, Series 2006-1A,
Class D, 5.85%, 11/15/36 (b) - -
Class E, 6.17%, 11/15/36 (b) - -
Science Applications International Co.,
5.50%, 7/1/33 - -
SLM Corp., 2.46%, 10/8/08 (a) - -
SLM Corp., 2.43%, 4/1/09 (a) - -
SLM Corp., 2.56%, 12/15/14 (a) - -
SLM Corp., 5.00%, 4/15/15 - -
Sovrisc BV, 5.25%, 4/30/11 - -
Sprint Capital Corp., 8.75%, 3/15/32 - -
Structured Asset Securities Corp.,
5.15%, 12/25/34 (a) - -
Suntrust Alternative Loan Trust,
Series 2005-1F, Class B3, 6.07%, 12/25/35 (a) - -
TAQA ABU DHABI National, 5.88%, 10/27/16 (b) - -
Tennessee Valley Authority, 6.39%, 12/15/17 ** - -
Thornburg Mortgage Securities Trust,
Series 2004-2, Class A3, 5.63%, 6/25/44 (a)(c) - -
Trans-Canada Pipeline, 5.60%, 3/31/34 - -
Trapeza CDO LLC, Series 2007-12A,
Class C1, 6.51%, 4/6/42 (a)(b)(c) - -
Class C1, 6.51%, 4/6/42 (a)(b) - -
Travelers Property Casualty Corp., 7.75%, 4/15/26 - -
Truck Retail Installment Paper Corp.,
5.59%, 12/15/16 (a)(b)(c) - -
U.S. Bank, N.A., 3.75%, 2/6/09 - -
UBS Preferred Funding Trust I, 8.62%, 10/29/49 (a) - -
UPFC Auto Receivables Trust,
Series 2004-A, Class A3, 3.27%, 9/15/10 - -
Vale Overseas, Ltd., 6.25%, 1/23/17 - -
Vanderbilt Acquisition Loan Trust,
Series 2002-1, Class A4, 6.57%, 5/7/27 - -
Vectren Utility Holdings, 5.45%, 12/1/2015 - -
Washington Mutual,
Series 2003-AR9, Class 1A6, 4.05%, 9/25/33 (a) - -
Series 2004-AR3, Class A-2, 4.24%, 6/25/34 - -
Wells Fargo Mortgage Backed Securities Trust,
5.14%, 5/25/35 (a) - -
Series 2003-N, 4.75%, 12/25/33 (a) - -
WMALT Mortgage Pass-through Certificates,
Series 2005-1, Class 1A2, 5.50%, 3/25/35 (a) - -
YUM! Brands Inc., 7.70%, 7/1/12 (c) - -
-------- ------
Total Corporate Bonds - - 0.0%
-------- ------
FOREIGN BONDS
France Telecom, 8.75%, 3/1/31 - -
Korea Electric Power, 4.25%, 9/12/07 (b) - -
--------
Total Foreign Bonds - 0.0%
-------- ------
U.S. GOVERNMENT AGENCIES
FANNIE MAE
6.25%, 1/25/08 541 542
5.30%, 5/8/08 - -
4.00%, 9/2/08 1,000 981
6.05%, 12/1/08 - -
6.38%, 6/15/09 1 1,131
6.63%, 9/15/09 1,000 1,037
4.62%, 4/25/10 683 672
4.40%, 12/25/12 638 615
5.65%, 4/10/13 (d) - -
6.00%, 5/1/17 - -
6.50%, 6/1/17 - -
6.50%, 8/1/17 - -
5.50%, 1/1/18 - -
5.50%, 2/1/18 - -
4.50%, 5/1/18 TBA - -
6.00%, 5/1/18 - -
5.50%, 2/1/25 - -
5.00%, 5/1/25 - -
7.50%, 6/1/28 - -
6.50%, 8/1/28 - -
6.50%, 6/1/29 - -
6.50%, 4/1/32 - -
6.50%, 6/1/32 - -
7.00%, 6/1/32 - -
6.50%, 7/1/32 - -
7.50%, 12/1/32 - -
6.00%, 1/1/33 - -
6.00%, 1/1/33 TBA - -
6.50%, 3/1/33 - -
5.00%, 5/1/33 TBA - -
5.50%, 5/1/33 TBA - -
6.00%, 8/25/33 (a) - -
5.50%, 12/25/33 - -
5.50%, 5/25/34 - -
5.22%, 8/1/34 - -
7.00%, 9/1/34 - -
4.31%, 1/1/35 2,111 2,071
5.50%, 6/1/35 - -
6.00%, 7/1/35 - -
6.00%, 9/1/35 - -
5.00%, 11/1/35 - -
6.00%, 1/1/36 - -
5.62%, 4/25/36 (a)(c) - -
6.50%, 8/1/36 - -
7.00%, 9/1/36 - -
3.99%, 3/25/40 (a) 54 54
5.57%, 8/25/44 (a) 1,128 1,130
--------
8,233 16.4%
-------- ------
FEDERAL HOME LOAN BANK
4.50%, 8/8/08 (d) - -
4.06%, 8/25/09 1,223 1,195
4.00%, 2/25/10 - -
4.75%, 10/25/10 (a) 859 850
5.13%, 11/15/10 - -
5.15%, 12/20/11 - -
4.84%, 1/25/12 778 786
5.87%, 9/15/36 (a)(c) 2,482 2,489
--------
5,320 10.6%
-------- ------
FINANCING CORPORATION
3.59%, 4/5/09 ** 2,000 1,790
4.21%, 12/6/11 ** 2,000 1,570
4.81%, 6/6/15 ** 2,000 1,308
6.46%, 11/11/17 ** 1,000 572
--------
5,240 10.4%
-------- ------
FREDDIE MAC
5.00%, 1/30/09 - -
5.73%, 12/28/09 - -
5.50%, 7/15/10 1,000 1,000
6.88%, 9/15/10 2,000 2,117
5.88%, 3/21/11 1,000 1,022
5.00%, 8/15/12 - -
4.50%, 11/15/12 1,000 971
4.65%, 10/10/13 - -
5.25%, 4/18/16 2,000 2,015
4.00%, 1/15/17 - -
4.00%, 12/15/21 336 333
5.00%, 2/15/25 - -
7.00%, 6/1/26 - -
6.50%, 1/1/29 - -
7.00%, 1/1/32 - -
6.50%, 7/1/32 - -
7.00%, 8/1/32 - -
6.50%, 9/1/32 - -
5.00%, 12/15/32 1,128 1,126
5.50%, 2/1/33 TBA - -
6.00%, 9/1/33 - -
5.00%, 1/15/34 1,000 936
6.50%, 5/15/34 (a) 1,117 1,104
4.50%, 6/1/34 - -
4.50%, 9/1/34 - -
5.50%, 7/15/35 1,977 1,859
6.00%, 11/1/35 TBA 2,000 2,008
5.97%, 6/1/36 (a) - -
5.72%, 7/15/36 (a)(c) - -
6.11%, 1/1/37 (a) - -
--------
14,491 28.9%
-------- ------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
9.50%, 12/15/09 - -
3.59%, 11/16/17 420 408
3.96%, 9/16/21 670 655
3.27%, 1/16/23 819 787
4.39%, 5/16/23 804 788
5.50%, 2/20/31 2,000 1,993
5.50%, 12/20/32 1,000 976
5.00%, 7/1/33 TBA - -
5.50%, 10/1/33 TBA - -
5.03%, 11/16/33 - -
5.50%, 11/20/33 1,000 960
0.97%, 6/17/45 2,866 155
0.52%, 3/16/46 - -
0.57%, 4/16/46 - -
0.80%, 5/16/46 - -
3.40%, 5/16/46 (a) - -
0.91%, 8/16/46 - -
1.06%, 12/16/47 3,322 194
1.00%, 2/16/48 - -
1.065%, 2/16/48 - -
--------
6,916 13.8%
-------- ------
SMALL BUSINESS ADMINISTRATION,
4.94%, 8/10/15 (c) 3,585 3,515 7.0%
TENNESSEE VALLEY AUTHORITY, 6.79%, 5/23/12 1,000 1,078 2.1%
-------- ------
Total U.S. Government Agencies 44,793 89.2%
-------- ------
U.S. TREASURY OBLIGATIONS
U.S. TREASURY BILL 6.58%, 6/6/18 ** 1,000 555
U.S. TREASURY BONDS 4.50%, 2/15/36 (d) - -
U.S. TREASURY NOTES 2.38%, 4/15/11 500 506
U.S. TREASURY NOTES 4.63%, 11/15/16 (d) - -
U.S. TREASURY STRIPS 5.45%, 5/15/17 **(d) - -
U.S. TREASURY STRIPS 5.00%, 11/15/27 ** - -
--------
Total U.S. Treasury Obligations 1,061 2.1%
-------- ------
SHARES S
----------
INVESTMENTS IN AFFILIATES (e)
Fifth Third Institutional
Government Money Market Fund 8,586,054 8,586
Fifth Third Institutional
Money Market Fund - -
--------
Total Investments in Affiliates 8,586 17.1%
-------- ------
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds - -
--------
Total Short-Term Securities held as
Collateral for Securities Lending - 0.0%
-------- ------
TOTAL INVESTMENTS 54,440 108.4%
LIABILITIES IN EXCESS OF OTHER ASSETS (4,237) -8.4%
-------- ------
NET ASSETS - 100.0% $50,203 100.0%
========= ======
Total Investments Cost + $55,365
=========
- -------------------------------------------
For federal income tax purposes:
Total investments cost $54,949
=========
Gross unrealized appreciation $ 551
Gross unrealized depreciation (1,060)
--------
Net unrealized depreciation $(509)
=========
copy entire, 3
PRO FORMA COMBINED
SCHEDULES OF PORTFOLIO INVESTMENTS
JANUARY 31, 2007 (UNAUDITED) MERGER SCENARIO 1
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARES) ---------- ---------- ------
PRO FORMA FUND
---------- -------- ------
PRINCIPAL VALUE %
---------- -------- ------
COMMERCIAL PAPER
Cargill Global Funding, Inc.,
5.34%, 2/12/07 ** (c) $ 1,270 $1,268
5.33%, 2/20/07 ** (c) 2,435 2,428
Prudential Funding, 5.31%, 2/15/07 ** 2,150 2,146
UBS Finance, 5.35%, 2/12/07 **(c) 13,180 13,159
--------
Total Commercial Paper 19,001 2.6%
-------- ------
CORPORATE BONDS
Ace Securities Corp., 6.03%, 9/25/35 (a) 3,000 3,023
Alabama Power Cap, 5.50%,10/1/42 (a) 874 871
American Express Travel, 5.25%, 11/21/11 (b) 1,000 996
Ameriprise Financial, Inc., 5.65%, 11/15/15 1,480 1,481
AOL Time Warner, Inc., 7.70%, 5/1/32 492 556
Associated Bank, NA, 5.49%, 6/2/08 (a) 5,000 5,010
Attentus CDO, Ltd.,
Series 2006-2A, Class A3B, 5.80%, 10/9/41 (a)(b) 5,000 5,000
Banc of America Commercial Mortgage, Inc.,
Series 2005-6, Class AJ, 5.18%, 9/10/47 2,850 2,780
Banc of America Funding Corp.,
Series 2006-G, Class 3A2, 5.75%, 7/20/36 (a) 9,895 9,830
Bank of America Corp., 9.38%, 9/15/09 5,000 5,482
BankAmerica Capital, 8.00%, 12/15/26 2,000 2,080
Bayview Financial Acquisition Trust,
Series 2006-D, Class 1A2, 5.66%, 12/28/36 (a) 4,925 4,879
Bear Stearns Adjustable Rate Mortgage Trust,
Series 2004-10, Class 12A3, 4.65%, 1/25/35 (a) 1,228 1,213
Series 2005-12, Class 11A2, 5.41%, 2/25/36 (a) 3,456 3,452
Series 2005-12, Class 13A1, 5.47%, 2/25/36 (a) 3,758 3,708
Bear Stearns Alternative-A Trust,
Series 2005-9, 5.85%, 11/25/35 1,700 1,716
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2000-WF2, Class A1, 7.11%, 10/15/32 2,373 2,397
Series 2004-T14, Class A4, 5.20%, 1/12/41 2,000 1,966
Series 2004-T16, Class A6, 4.75%, 2/13/46 (a) 7,500 7,158
Chase Commercial Mortgage Securities Corp.,
Series 1998-1, Class A2, 6.56%, 5/18/30 3,404 3,427
Chase Mortgage Finance Corp.,
Series 2006-A1, Class 2A3, 6.00%, 9/25/36 2,000 2,017
Series 2006-S2, Class 2A5, 6.00%, 10/25/36 (a) 7,630 7,637
Series 2006-S2, Class 2A6, 6.00%, 10/25/36 5,105 5,072
Series 2006-A1, Class 2AX, 0.01%, 9/25/36 57,438 285
Series 2006-A1, Class 4A1, 6.07%, 9/25/36 (a) 9,931 9,908
Chaseflex Trust,
Series 2006-1, Class A2A, 5.94%, 6/25/36 (a) 1,600 1,603
Series 2006-1, Class A4, 6.30%, 6/25/36 (a) 7,344 7,390
Series 2006-1, Class A6, 6.29%, 6/25/36 (a) 5,265 5,348
Series 2006-2, Class A4, 6.34%, 9/25/36 (a) 5,100 5,145
Cigna CDO Ltd.,
Series 2000-1X, Class A, 5.79%, 8/28/12 (a)(b)(c) 3,069 3,072
Citigroup Commercial Mortgage Trust,
Series 2005-EMG, 4.38%, 9/20/51 (b) 5,000 4,832
Citigroup Deutsche Bank Commercial Mortgage,
Series 2006-CD3, Class AJ, 5.69%, 10/15/48 2,545 2,558
Comcast Cable, 7.13%, 6/15/13 1,750 1,888
Commerce Group, Inc., 5.95%, 12/9/13 1,000 997
Commercial Mortgage Asset Trust,
Series 1999-C1, Class B, 7.23%, 1/17/32 (a) 1,500 1,641
Conocophillips Canada, 5.63%, 10/15/16 (d) 1,475 1,476
Costco Wholesale Corp., 5.50%, 3/15/07 2,015 2,014
Countrywide Alternative Loan Trust,
6.50%, 9/25/34 (a) 582 591
Series 2004-2CB, Class 1A1, 4.25%, 3/25/34 3,524 3,453
Series 2005-7CB, Class M, 5.50%, 4/25/35 2,456 2,361
Countrywide Asset-Backed Certificates,
Series 2002-BC1, Class M1, 6.75%, 4/25/32 (a) 1,240 1,241
Cox Communications, Inc., 5.50%, 10/1/15 800 781
Credit Suisse First Boston Mortgage Sec. Corp.,
Series 2002-CKN2, 6.38%, 4/15/37 1,000 1,037
Credit-Based Asset Servicing and Securitization,
Series 2004-CB8, Class AF3, 5.09%, 12/25/35 5,145 5,028
Series 2006-CB1, Class AF4, 5.44%, 1/25/36 6,375 6,295
Series 2006-CB2, Class AF2, 5.50%, 12/25/36 (a) 2,400 2,390
Credit-Based Asset Servicing and Securitizing,
5.43%, 11/25/36 (a) 2,475 2,443
Crown Castle Towers LLC,
Series 2006-1A, Class E, 6.065%, 11/15/36 (b) 6,100 6,056
Series 2005-1A, 4.64%, 6/15/35 (b) 4,000 3,900
CS First Boston Mortgage Securities Corp.,
Series 2003-CK2, Class A4, 4.80%, 3/15/36 4,750 4,597
Delta Airlines, 6.72%, 1/2/23 (d) 3,729 3,776
Deutsche Alternative-A Securities, Inc.,
Mortgage Loan Trust,
Series 2006-AB3, Class A3, 6.51%, 7/25/36 2,445 2,458
Series 2006-AB4, Class A3A1, 5.90%, 10/25/36 5,145 5,138
5.05%, 9/25/35 1,540 1,525
Deutsche Mortgage Securities, Inc.,
5.04%, 6/26/35 (a) 1,864 1,855
Series 2005-1, 5.75%, 2/25/35 4,843 4,775
Devon Energy Corp., 7.95%, 4/15/32 700 844
Duke Capital LLC, 5.50%, 3/1/14 1,825 1,767
Duke Energy Corp., 6.45%, 10/15/32 850 897
First Franklin Mortgage Certificate,
Series 2004-FF11, Class 1A2, 5.70%, 1/25/35 (a) 267 267
Series 2005-FFA, Class M3, 5.52%, 3/25/25 600 595
First Horizon ABS Trust,
Series 2006-HE1, Class A, 5.51%, 10/25/34 (a) 1,967 1,967
First Horizon Trust,
Series 2006-HE2, Class A, 5.45%, 10/25/26 (a) 2,409 2,409
First Tennessee Bank, Series BKNT, 5.65%, 4/1/16 2,000 1,981
Fleet Financial Group, 7.38%, 12/1/09 5,000 5,252
Gazprom International, 7.20%, 2/1/20 (b) 3,015 3,154
General Motors Acceptance Corp.,
Mortgage Corp. Loan Trust, 5.00%, 10/25/33 2,700 2,629
Mortgage Corp. Loan Trust, 4.34%, 11/1/34 (a) 1,750 1,722
Global Signal Trust,
Series 2006-1, Class C, 5.71%, 2/15/36 (a)(b) 2,550 2,550
Series 2006-1, Class D, 6.05%, 2/15/36 (b) 3,000 2,978
GMAC Commerical Mortgage Securities, Inc.,
Series 1997-C2, Class B, 6.70%, 4/15/29 395 396
Goldman Sachs Group, Inc., 5.00%, 10/1/14 2,500 2,411
Goldman Sachs Group, Inc., 6.13%, 2/15/33 1,100 1,109
Greenwich Capital Commercial Funding Corp.,
Series 2002-C1, Class A4, 4.95%, 1/11/35 1,000 978
Series 2004-GG1, Class A5, 4.88%, 6/10/36 2,000 1,962
GS Mortgage Securities Corp. II,
Series 2004-C1, Class B, 4.46%, 10/10/28 (a) 2,600 2,507
Series 2004-C1, Class C, 4.52%, 10/10/28 (a) 3,888 3,752
Series 2004-GG2, Class A3, 4.60%, 8/10/38 4,900 4,807
GSR Mortgage Loan Trust,
Series 2005-AR6, Class 3A1, 4.56%, 9/25/35 (a) 2,149 2,096
Harley-Davidson Motorcycle Trust,
Series 2004-2, Class B, 2.96%, 2/15/12 166 160
Hertz Vehicle Financing LLC,
Series 2005-2A, Class A6, 5.08%, 11/25/11 (b)(c) 3,000 2,987
Hibernia Corp., 5.35%, 5/1/14 2,845 2,775
Home Depot, Inc., 5.40%, 3/1/16 800 773
Homebanc Mortgage Trust,
Series 2004-1, Class 2M2, 6.47%, 8/25/29 (a) 611 611
Series 2004-2, 5.77%, 12/25/34 (a)(c) 2,350 2,358
Series 2006-1, Class 1A1, 6.15%, 4/25/37 (a) 830 834
Series 2006-1, Class 2A1, 6.05%, 4/25/37 (a) 4,135 4,165
HSBC Finance Corp., 6.38%, 10/15/11 2,000 2,081
Hyundai Auto Receivables Trust,
Series 2006-B, Class C, 5.25%, 5/15/13 2,665 2,654
Indiana Michigan Power, 5.05%, 11/15/14 2,035 1,949
IndyMac Index Mortgage Loan Trust,
Series 2005-AR9, 5.45%, 7/25/35 (a) 3,539 3,586
International Lease Finance Corp., 5.88%, 5/1/13 2,500 2,540
I-Preferred Term Secs, 7.47%, 12/11/32 (a)(b) 1,000 1,006
I-Preferred Term Secs II, 7.37%, 5/22/33 (a)(b) 1,000 1,010
Irwin Home Equity,
Series 2006-3, Class 2A2, 5.83%, 9/25/37 (b) 1,225 1,228
Jefferies Group, Inc., 5.50%, 3/15/16 2,000 1,933
JP Morgan Alternative Loan Trust,
Series 2005-S1, Class 1A2, 5.50%, 12/25/35 2,237 2,217
Series 2006-A4, Class A7, 6.30%, 9/25/36 (a) 5,000 5,069
Series 2006-A4, Class A9, 6.30%, 9/25/36 4,583 4,597
Series 2006-A5, Class 2A6, 5.80%, 10/25/36 (a) 5,640 5,619
Series 2006-S1, Class 1A18, 6.00%, 3/25/36 (a) 4,292 4,294
Series 2006-S2, Class A3, 5.92%, 5/25/36 (a) 4,730 4,696
Series 2006-S2, Class A6, 6.05%, 5/25/36 (a) 4,975 4,967
Series 2006-S3, Class A3A, 6.00%, 8/25/36 4,529 4,510
Series 2006-S3, Class A7, 6.24%, 8/25/36 5,245 5,310
JP Morgan Chase Commercial Mortgage Sec. Corp.,
Series 2003-CB6, Class A2, 5.26%, 7/12/37 5,325 5,271
Series 2003-LN1, Class A2, 4.92%, 10/15/37 6,680 6,473
JP Morgan Chase Commercial Mortgage,
Series 2001-C1, Class A3, 5.86%, 10/12/35 (a) 6,465 6,570
JP Morgan Mortgage Acquisition Corp.,
Series 2006-WF1, Class A4, 6.13%, 7/25/36 3,191 3,218
Series 2006-WF1, Class A5, 6.41%, 7/25/36 4,286 4,345
JP Morgan Mortgage Trust,
Series 2005-A1, Class 2A1, 4.84%, 2/25/35 (a) 1,022 1,001
Series 2005-A1, Class 3A4, 5.05%, 2/25/35 6,218 6,140
Series 2005-A2, Class 3A2, 4.93%, 4/25/35 3,000 2,924
Series 2005-A2, Class 5A1, 4.35%, 4/25/35 (a) 3,900 3,741
Series 2005-A2, Class 7CB1, 4.89%, 4/25/35 (a) 3,619 3,546
Series 2005-A3, 4.50%, 6/25/35 4,286 4,151
Series 2005-A3, Class 7CA1, 5.17%, 6/25/35 2,667 2,653
Series 2005-ALT1, Class 4A1, 5.65%, 10/25/35 (a) 3,569 3,523
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a)(c) 8,522 8,453
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a) - -
Series 2006-A4, Class 2A2, 5.83%, 6/25/36 (a) 926 923
Series 2006-A7, Class 2A2, 5.87%, 1/25/37 (a) 4,775 4,765
JPM Chase Capital XXI, 6.25%, 2/2/37 (a) 1,000 992
Key Bank NA, 4.95%, 9/15/15 2,365 2,254
Kroger Co., 6.20%, 6/15/12 500 509
LB-UBS Commercial Mortgage Trust,
Series 2003-C8, Class A4, 5.12%, 11/15/32 2,924 2,873
Series 2005-C3, 4.55%, 7/15/30 330 321
Long Beach Auto Receivable Trust,
Series 2003-B, Class A4, 2.18%, 2/15/10 (c) 1,656 1,643
Manufacturers & Traders Trust Co.,
3.85%, 4/1/13 (a) 1,075 1,056
Marlin Leasing Receivables LLC, 4.75%, 8/15/12 (b) 3,000 2,960
MassMutual Global Funding II, 3.80%, 4/15/09 (b) 1,390 1,345
Merrill Lynch & Co., 6.05%, 5/16/16 2,050 2,105
Morgan Stanley Capital I,
5.11%, 6/15/40 3,200 3,117
Series 2006-HQ9, Class AJ, 5.79%, 7/20/44 5,235 5,314
Series 2006-IQ12, Class AJ, 5.40%, 12/15/43 5,000 4,921
Morgan Stanley Dean Witter Capital I,
4.74%, 11/13/36 2,590 2,504
Morgan Stanley Mortgage Loan Trust, 5.00%, 8/25/19 2,083 2,028
Morgan Stanley, 4.75%, 4/1/14 1,000 948
Motorola, Inc., 6.50%, 11/15/28 (d) 805 808
Navistar Financial Corp. Owner Trust,
5.52%, 4/15/08 (a)(c) 599 599
NCNB Corp., 10.20%, 7/15/15 2,500 3,231
Nextel Communications, 7.38%, 8/1/15 1,285 1,317
Nomura Asset Acceptance Corp.,
Series 2004-AR4, Class 1A2, 4.93%, 12/25/34 1,310 1,303
Series 2005-AR1, Class 1A2, 5.35%, 2/25/35 2,253 2,231
Series 2005-AR2, Class 2A2, 5.56%, 5/25/35 (a) 1,705 1,728
Series 2005-AR3, 5.65%, 7/25/35 2,382 2,329
Series 2005-AR5, Class 2A2, 5.64%, 10/25/35 (a) 1,632 1,626
Series 2006-AF1, Class 3A2, 6.64%, 6/25/36 (a) 2,968 3,029
Series 1998-D6, Class A2, 7.01%, 3/15/30 (a) 1,000 1,086
Series 1998-D6, Class A4, 7.59%, 3/15/30 (a) 1,600 1,783
Norfolk Southern Corp., 5.59%, 5/17/25 130 123
Oncor Electric Delivery, 7.00%, 5/1/32 480 519
Onyx Acceptance Owner Trust,
Series 2003-D, Class A4, 3.20%, 3/15/10 (c) 1,579 1,560
Pemex Master Trust, 6.13%, 8/15/08 825 828
Pemex Project Funding Master Trust, 7.38%, 12/15/14 2,000 2,165
Popular ABS Mortgage Pass-Through Trust,
4.98%, 9/15/35 1,510 1,491
PPG Industries, Inc., 6.50%, 11/1/07 30 30
Preferred Term Securities II, 9.55%, 3/1/31 (b) 817 915
Preferred Term Securities X, 4.15%, 7/3/33 (b) 2,425 2,367
Premcor Refining Group, 9.25%, 2/1/10 2,000 2,099
Prestige Auto Receivables Trust,
Series 2006-1A, Class A2, 5.25%, 6/17/13 (a)(b) 2,000 2,000
Principal Life Global, 5.13%,10/15/13 (b) 1,090 1,072
Ras Laffan Liquid & Natural Gas, 5.30%, 9/30/20 (b) 2,700 2,556
Regions Financial Corp., 7.00%, 3/1/11 1,275 1,349
Renaissance Home Equity Loan Trust,
Series 2005-2, 4.93%, 8/25/35 (a) 2,500 2,475
Renaissance Home Equity Loan Trust,
Series 2006-1, Class AF4, 6.01%, 5/25/36 1,575 1,574
Republic New York Corp., 7.00%, 3/22/11 1,000 1,055
Residential Accredit Loans, Inc.,
5.59%, 3/25/34 (a)(c) 1,832 1,833
Series 2005-QA12, Class CB1, 5.74%, 12/25/35 (a) 3,342 3,332
Series 2006-QA8, Class A3, 5.56%, 9/25/36 (a)(c) 5,020 5,025
Residential Asset Mortgage Products, Inc.,
Series 2002-RZ3, Class M1, 5.28%, 8/25/32 (a) 725 722
Series 2003-RZ5, Class A7, 4.97%, 9/25/33 (a) 3,305 3,240
Series 2005-AHL1, Class A2, 5.59%, 7/25/35 (a)(c) 2,700 2,702
Residential Funding Mortgage Securities,
Series 2006-HI3, Class A4, 6.31%, 5/25/36 (a) 1,500 1,522
Series 2006-HSA1, Class A4, 5.49%, 2/25/36 1,500 1,478
Restructured Asset Certificate,
6.00%, 3/23/27 (b) 2,000 2,000
6.00%, 3/23/27 (b)(f) 3,250 3,250
SACO I Trust,
5.72%, 7/25/35 (a) 1,694 1,694
Series 2006-1, Class A, 5.49%, 9/25/35 (a)(c) 5,046 5,048
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a)(c) 4,000 4,000
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a) 2,500 2,500
Salomon Brothers Mortgage Securities,
Series 2002-KEY2, Class C, 5.05%, 3/18/36 1,417 1,390
Salomon Brothers Mortgage Securities VII,
Series 2002-KEY2, Class A3, 4.87%, 3/18/36 2,270 2,215
SBA CMBS Trust, Series 2006-1A,
Class D, 5.85%, 11/15/36 (b) 3,100 3,085
Class E, 6.17%, 11/15/36 (b) 1,350 1,346
Science Applications International Co.,
5.50%, 7/1/33 2,105 1,834
SLM Corp., 2.46%, 10/8/08 (a) 1,500 1,459
SLM Corp., 2.43%, 4/1/09 (a) 1,260 1,226
SLM Corp., 2.56%, 12/15/14 (a) 1,000 945
SLM Corp., 5.00%, 4/15/15 175 167
Sovrisc BV, 5.25%, 4/30/11 2,000 2,006
Sprint Capital Corp., 8.75%, 3/15/32 600 712
Structured Asset Securities Corp.,
5.15%, 12/25/34 (a) 1,245 1,199
Suntrust Alternative Loan Trust,
Series 2005-1F, Class B3, 6.07%, 12/25/35 (a) 3,191 2,855
TAQA ABU DHABI National, 5.88%, 10/27/16 (b) 1,100 1,098
Tennessee Valley Authority, 6.39%, 12/15/17 ** 5,000 2,849
Thornburg Mortgage Securities Trust,
Series 2004-2, Class A3, 5.63%, 6/25/44 (a)(c) 2,530 2,528
Trans-Canada Pipeline, 5.60%, 3/31/34 750 703
Trapeza CDO LLC, Series 2007-12A,
Class C1, 6.51%, 4/6/42 (a)(b)(c) 1,000 1,000
Class C1, 6.51%, 4/6/42 (a)(b) 3,000 3,000
Travelers Property Casualty Corp., 7.75%, 4/15/26 85 101
Truck Retail Installment Paper Corp.,
5.59%, 12/15/16 (a)(b)(c) 6,950 6,969
U.S. Bank, N.A., 3.75%, 2/6/09 2,500 2,428
UBS Preferred Funding Trust I, 8.62%, 10/29/49 (a) 925 1,020
UPFC Auto Receivables Trust,
Series 2004-A, Class A3, 3.27%, 9/15/10 1,028 1,018
Vale Overseas, Ltd., 6.25%, 1/23/17 1,975 1,979
Vanderbilt Acquisition Loan Trust,
Series 2002-1, Class A4, 6.57%, 5/7/27 2,725 2,825
Vectren Utility Holdings, 5.45%, 12/1/2015 1,000 961
Washington Mutual,
Series 2003-AR9, Class 1A6, 4.05%, 9/25/33 (a) 5,862 5,739
Series 2004-AR3, Class A-2, 4.24%, 6/25/34 1,592 1,565
Wells Fargo Mortgage Backed Securities Trust,
5.14%, 5/25/35 (a) 2,888 2,815
Series 2003-N, 4.75%, 12/25/33 (a) 4,095 3,928
WMALT Mortgage Pass-through Certificates,
Series 2005-1, Class 1A2, 5.50%, 3/25/35 (a) 1,855 1,833
YUM! Brands Inc., 7.70%, 7/1/12 (c) 1,250 1,354
-------- -----
Total Corporate Bonds 564,900 76.6%
-------- -----
FOREIGN BONDS
France Telecom, 8.75%, 3/1/31 650 850
Korea Electric Power, 4.25%, 9/12/07 (b) 1,000 992
--------
Total Foreign Bonds 1,842 0.2%
-------- -----
U.S. GOVERNMENT AGENCIES
FANNIE MAE
6.25%, 1/25/08 264 264
5.30%, 5/8/08 2,445 2,443
4.00%, 9/2/08 - -
6.05%, 12/1/08 2,810 2,827
6.38%, 6/15/09 - -
6.63%, 9/15/09 - -
4.62%, 4/25/10 - -
4.40%, 12/25/12 - -
5.65%, 4/10/13 (d) 4,675 4,670
6.00%, 5/1/17 198 201
6.50%, 6/1/17 283 290
6.50%, 8/1/17 209 214
5.50%, 1/1/18 14 14
5.50%, 2/1/18 8 8
4.50%, 5/1/18 TBA 7,200 6,911
6.00%, 5/1/18 1,007 1,020
5.50%, 2/1/25 1,366 1,353
5.00%, 5/1/25 2,233 2,162
7.50%, 6/1/28 232 243
6.50%, 8/1/28 207 212
6.50%, 6/1/29 189 194
6.50%, 4/1/32 422 432
6.50%, 6/1/32 775 793
7.00%, 6/1/32 220 228
6.50%, 7/1/32 1,199 1,226
7.50%, 12/1/32 170 177
6.00%, 1/1/33 368 371
6.00%, 1/1/33 TBA 14,000 14,049
6.50%, 3/1/33 315 321
5.00%, 5/1/33 TBA 14,000 13,431
5.50%, 5/1/33 TBA 8,500 8,360
6.00%, 8/25/33 (a) 2,474 2,458
5.50%, 12/25/33 900 893
5.50%, 5/25/34 3,150 3,037
5.22%, 8/1/34 145 144
7.00%, 9/1/34 139 143
4.31%, 1/1/35 - -
5.50%, 6/1/35 827 813
6.00%, 7/1/35 4,399 4,415
6.00%, 9/1/35 2,393 2,402
5.00%, 11/1/35 3,834 3,681
6.00%, 1/1/36 4,229 4,245
5.62%, 4/25/36 (a)(c) 5,889 5,893
6.50%, 8/1/36 1,166 1,180
7.00%, 9/1/36 1,624 1,664
3.99%, 3/25/40 (a) - -
5.57%, 8/25/44 (a) - -
--------
93,382 12.7%
-------- ------
FEDERAL HOME LOAN BANK
4.50%, 8/8/08 (d) 5,000 4,953
4.06%, 8/25/09 - -
4.00%, 2/25/10 631 611
4.75%, 10/25/10 (a) - -
5.13%, 11/15/10 830 824
5.15%, 12/20/11 2,425 2,402
4.84%, 1/25/12 - -
5.87%, 9/15/36 (a)(c) - -
--------
8,790 1.2%
-------- ------
FINANCING CORPORATION
3.59%, 4/5/09 ** - -
4.21%, 12/6/11 ** - -
4.81%, 6/6/15 ** - -
6.46%, 11/11/17 ** - -
--------
- 0.0%
-------- ------
FREDDIE MAC
5.00%, 1/30/09 1,900 1,895
5.73%, 12/28/09 5,000 5,011
5.50%, 7/15/10 - -
6.88%, 9/15/10 - -
5.88%, 3/21/11 - -
5.00%, 8/15/12 2,275 2,262
4.50%, 11/15/12 - -
4.65%, 10/10/13 1,300 1,248
5.25%, 4/18/16 - -
4.00%, 1/15/17 7,500 7,078
4.00%, 12/15/21 - -
5.00%, 2/15/25 3,245 3,064
7.00%, 6/1/26 724 745
6.50%, 1/1/29 1,547 1,587
7.00%, 1/1/32 131 136
6.50%, 7/1/32 265 271
7.00%, 8/1/32 576 593
6.50%, 9/1/32 154 157
5.00%, 12/15/32 - -
5.50%, 2/1/33 TBA 12,900 12,695
6.00%, 9/1/33 622 625
5.00%, 1/15/34 - -
6.50%, 5/15/34 (a) 2,289 2,263
4.50%, 6/1/34 913 851
4.50%, 9/1/34 1,170 1,091
5.50%, 7/15/35 - -
6.00%, 11/1/35 TBA - -
5.97%, 6/1/36 (a) 125 125
5.72%, 7/15/36 (a)(c) 1,922 1,929
6.11%, 1/1/37 (a) 5,951 5,984
--------
49,610 6.7%
-------- ------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
9.50%, 12/15/09 812 838
3.59%, 11/16/17 - -
3.96%, 9/16/21 - -
3.27%, 1/16/23 - -
4.39%, 5/16/23 - -
5.50%, 2/20/31 - -
5.50%, 12/20/32 - -
5.00%, 7/1/33 TBA 4,000 3,862
5.50%, 10/1/33 TBA 5,000 4,949
5.03%, 11/16/33 5,640 5,435
5.50%, 11/20/33 - -
0.97%, 6/17/45 10,510 568
0.52%, 3/16/46 13,928 582
0.57%, 4/16/46 62,740 2,409
0.80%, 5/16/46 44,731 2,493
3.40%, 5/16/46 (a) 2,543 1,613
0.91%, 8/16/46 34,899 2,075
1.06%, 12/16/47 - -
1.00%, 2/16/48 45,953 2,888
1.065%, 2/16/48 79,721 4,644
--------
32,356 4.4%
-------- ------
SMALL BUSINESS ADMINISTRATION,
4.94%, 8/10/15 (c) - - 0.0%
TENNESSEE VALLEY AUTHORITY, 6.79%, 5/23/12 - - 0.0%
-------- ------
Total U.S. Government Agencies 184,138 25.0%
-------- ------
U.S. TREASURY OBLIGATIONS
U.S. TREASURY BILL 6.58%, 6/6/18 ** - -
U.S. TREASURY BONDS 4.50%, 2/15/36 (d) 3,525 3,295
U.S. TREASURY NOTES 2.38%, 4/15/11 - -
U.S. TREASURY NOTES 4.63%, 11/15/16 (d) 3,000 2,954
U.S. TREASURY STRIPS 5.45%, 5/15/17 **(d) 5,580 3,374
U.S. TREASURY STRIPS 5.00%, 11/15/27 ** 7,400 2,629
--------
Total U.S. Treasury Obligations 12,252 1.7%
-------- ------
SHARES
----------
INVESTMENTS IN AFFILIATES (e)
Fifth Third Institutional
Government Money Market Fund - -
Fifth Third Institutional
Money Market Fund 22,430,813 22,431
--------
Total Investments in Affiliates 22,431 3.0%
-------- ------
PRINCIPAL
----------
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds $25,818 25,818
--------
Total Short-Term Securities held as
Collateral for Securities Lending 25,818 3.5%
-------- ------
TOTAL INVESTMENTS 830,382 112.6%
LIABILITIES IN EXCESS OF OTHER ASSETS (93,084) -12.6%
-------- ------
NET ASSETS - 100.0% $737,298 100.0%
========= ======
Total Investments Cost + $835,026
=========
- -------------------------------------------
For federal income tax purposes:
Total investments cost $837,156
=========
Gross unrealized appreciation $2,190
Gross unrealized depreciation (8,964)
--------
Net unrealized depreciation $ (6,774)
=========
MERGER SCENARIO 2
----------- ---------- ------
PRO FORMA FUND
----------- -------- ------
PRINCIPAL VALUE %
----------- -------- ------
COMMERCIAL PAPER
Cargill Global Funding, Inc.,
5.34%, 2/12/07 ** (c) $ 1,270 $ 1,268
5.33%, 2/20/07 ** (c) 2,435 2,428
Prudential Funding, 5.31%, 2/15/07 ** 2,150 2,146
UBS Finance, 5.35%, 2/12/07 **(c) 13,180 13,159
--------
Total Commercial Paper 19,001 5.7%
------ -------- ------
CORPORATE BONDS
Ace Securities Corp., 6.03%, 9/25/35 (a) - -
Alabama Power Cap, 5.50%,10/1/42 (a) - -
American Express Travel, 5.25%, 11/21/11 (b) - -
Ameriprise Financial, Inc., 5.65%, 11/15/15 - -
AOL Time Warner, Inc., 7.70%, 5/1/32 492 556
Associated Bank, NA, 5.49%, 6/2/08 (a) - -
Attentus CDO, Ltd.,
Series 2006-2A, Class A3B, 5.80%, 10/9/41 (a)(b) - -
Banc of America Commercial Mortgage, Inc.,
Series 2005-6, Class AJ, 5.18%, 9/10/47 2,850 2,780
Banc of America Funding Corp.,
Series 2006-G, Class 3A2, 5.75%, 7/20/36 (a) 4,895 4,863
Bank of America Corp., 9.38%, 9/15/09 - -
BankAmerica Capital, 8.00%, 12/15/26 - -
Bayview Financial Acquisition Trust,
Series 2006-D, Class 1A2, 5.66%, 12/28/36 (a) - -
Bear Stearns Adjustable Rate Mortgage Trust,
Series 2004-10, Class 12A3, 4.65%, 1/25/35 (a) 1,228 1,213
Series 2005-12, Class 11A2, 5.41%, 2/25/36 (a) 3,456 3,452
Series 2005-12, Class 13A1, 5.47%, 2/25/36 (a) 3,758 3,708
Bear Stearns Alternative-A Trust,
Series 2005-9, 5.85%, 11/25/35 - -
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2000-WF2, Class A1, 7.11%, 10/15/32 1,281 1,294
Series 2004-T14, Class A4, 5.20%, 1/12/41 2,000 1,966
Series 2004-T16, Class A6, 4.75%, 2/13/46 (a) 7,500 7,158
Chase Commercial Mortgage Securities Corp.,
Series 1998-1, Class A2, 6.56%, 5/18/30 - -
Chase Mortgage Finance Corp.,
Series 2006-A1, Class 2A3, 6.00%, 9/25/36 2,000 2,017
Series 2006-S2, Class 2A5, 6.00%, 10/25/36 (a) - -
Series 2006-S2, Class 2A6, 6.00%, 10/25/36 - -
Series 2006-A1, Class 2AX, 0.01%, 9/25/36 - -
Series 2006-A1, Class 4A1, 6.07%, 9/25/36 (a) - -
Chaseflex Trust,
Series 2006-1, Class A2A, 5.94%, 6/25/36 (a) 1,600 1,603
Series 2006-1, Class A4, 6.30%, 6/25/36 (a) - -
Series 2006-1, Class A6, 6.29%, 6/25/36 (a) - -
Series 2006-2, Class A4, 6.34%, 9/25/36 (a) - -
Cigna CDO Ltd.,
Series 2000-1X, Class A, 5.79%, 8/28/12 (a)(b)(c) 3,069 3,072
Citigroup Commercial Mortgage Trust,
Series 2005-EMG, 4.38%, 9/20/51 (b) - -
Citigroup Deutsche Bank Commercial Mortgage,
Series 2006-CD3, Class AJ, 5.69%, 10/15/48 - -
Comcast Cable, 7.13%, 6/15/13 1,750 1,888
Commerce Group, Inc., 5.95%, 12/9/13 - -
Commercial Mortgage Asset Trust,
Series 1999-C1, Class B, 7.23%, 1/17/32 (a) - -
Conocophillips Canada, 5.63%, 10/15/16 (d) - -
Costco Wholesale Corp., 5.50%, 3/15/07 - -
Countrywide Alternative Loan Trust,
6.50%, 9/25/34 (a) 582 591
Series 2004-2CB, Class 1A1, 4.25%, 3/25/34 - -
Series 2005-7CB, Class M, 5.50%, 4/25/35 - -
Countrywide Asset-Backed Certificates,
Series 2002-BC1, Class M1, 6.75%, 4/25/32 (a) 1,240 1,241
Cox Communications, Inc., 5.50%, 10/1/15 800 781
Credit Suisse First Boston Mortgage Sec. Corp.,
Series 2002-CKN2, 6.38%, 4/15/37 - -
Credit-Based Asset Servicing and Securitization,
Series 2004-CB8, Class AF3, 5.09%, 12/25/35 - -
Series 2006-CB1, Class AF4, 5.44%, 1/25/36 3,350 3,308
Series 2006-CB2, Class AF2, 5.50%, 12/25/36 (a) - -
Credit-Based Asset Servicing and Securitizing,
5.43%, 11/25/36 (a) - -
Crown Castle Towers LLC,
Series 2006-1A, Class E, 6.065%, 11/15/36 (b) 2,800 2,780
Series 2005-1A, 4.64%, 6/15/35 (b) - -
CS First Boston Mortgage Securities Corp.,
Series 2003-CK2, Class A4, 4.80%, 3/15/36 - -
Delta Airlines, 6.72%, 1/2/23 (d) 2,797 2,832
Deutsche Alternative-A Securities, Inc.,
Mortgage Loan Trust,
Series 2006-AB3, Class A3, 6.51%, 7/25/36 - -
Series 2006-AB4, Class A3A1, 5.90%, 10/25/36 - -
5.05%, 9/25/35 - -
Deutsche Mortgage Securities, Inc.,
5.04%, 6/26/35 (a) - -
Series 2005-1, 5.75%, 2/25/35 - -
Devon Energy Corp., 7.95%, 4/15/32 700 844
Duke Capital LLC, 5.50%, 3/1/14 - -
Duke Energy Corp., 6.45%, 10/15/32 850 897
First Franklin Mortgage Certificate,
Series 2004-FF11, Class 1A2, 5.70%, 1/25/35 (a) - -
Series 2005-FFA, Class M3, 5.52%, 3/25/25 - -
First Horizon ABS Trust,
Series 2006-HE1, Class A, 5.51%, 10/25/34 (a) - -
First Horizon Trust,
Series 2006-HE2, Class A, 5.45%, 10/25/26 (a) - -
First Tennessee Bank, Series BKNT, 5.65%, 4/1/16 - -
Fleet Financial Group, 7.38%, 12/1/09 - -
Gazprom International, 7.20%, 2/1/20 (b) 1,000 1,046
General Motors Acceptance Corp.,
Mortgage Corp. Loan Trust, 5.00%, 10/25/33 2,700 2,629
Mortgage Corp. Loan Trust, 4.34%, 11/1/34 (a) 1,750 1,722
Global Signal Trust,
Series 2006-1, Class C, 5.71%, 2/15/36 (a)(b) 2,550 2,550
Series 2006-1, Class D, 6.05%, 2/15/36 (b) - -
GMAC Commerical Mortgage Securities, Inc.,
Series 1997-C2, Class B, 6.70%, 4/15/29 - -
Goldman Sachs Group, Inc., 5.00%, 10/1/14 - -
Goldman Sachs Group, Inc., 6.13%, 2/15/33 1,100 1,109
Greenwich Capital Commercial Funding Corp.,
Series 2002-C1, Class A4, 4.95%, 1/11/35 1,000 978
Series 2004-GG1, Class A5, 4.88%, 6/10/36 2,000 1,962
GS Mortgage Securities Corp. II,
Series 2004-C1, Class B, 4.46%, 10/10/28 (a) - -
Series 2004-C1, Class C, 4.52%, 10/10/28 (a) - -
Series 2004-GG2, Class A3, 4.60%, 8/10/38 4,900 4,807
GSR Mortgage Loan Trust,
Series 2005-AR6, Class 3A1, 4.56%, 9/25/35 (a) - -
Harley-Davidson Motorcycle Trust,
Series 2004-2, Class B, 2.96%, 2/15/12 166 160
Hertz Vehicle Financing LLC,
Series 2005-2A, Class A6, 5.08%, 11/25/11 (b)(c) 3,000 2,987
Hibernia Corp., 5.35%, 5/1/14 - -
Home Depot, Inc., 5.40%, 3/1/16 800 773
Homebanc Mortgage Trust,
Series 2004-1, Class 2M2, 6.47%, 8/25/29 (a) - -
Series 2004-2, 5.77%, 12/25/34 (a)(c) 2,350 2,358
Series 2006-1, Class 1A1, 6.15%, 4/25/37 (a) 830 834
Series 2006-1, Class 2A1, 6.05%, 4/25/37 (a) - -
HSBC Finance Corp., 6.38%, 10/15/11 - -
Hyundai Auto Receivables Trust,
Series 2006-B, Class C, 5.25%, 5/15/13 - -
Indiana Michigan Power, 5.05%, 11/15/14 - -
IndyMac Index Mortgage Loan Trust,
Series 2005-AR9, 5.45%, 7/25/35 (a) 3,539 3,586
International Lease Finance Corp., 5.88%, 5/1/13 - -
I-Preferred Term Secs, 7.47%, 12/11/32 (a)(b) - -
I-Preferred Term Secs II, 7.37%, 5/22/33 (a)(b) - -
Irwin Home Equity,
Series 2006-3, Class 2A2, 5.83%, 9/25/37 (b) 1,225 1,228
Jefferies Group, Inc., 5.50%, 3/15/16 - -
JP Morgan Alternative Loan Trust,
Series 2005-S1, Class 1A2, 5.50%, 12/25/35 - -
Series 2006-A4, Class A7, 6.30%, 9/25/36 (a) - -
Series 2006-A4, Class A9, 6.30%, 9/25/36 - -
Series 2006-A5, Class 2A6, 5.80%, 10/25/36 (a) - -
Series 2006-S1, Class 1A18, 6.00%, 3/25/36 (a) - -
Series 2006-S2, Class A3, 5.92%, 5/25/36 (a) - -
Series 2006-S2, Class A6, 6.05%, 5/25/36 (a) - -
Series 2006-S3, Class A3A, 6.00%, 8/25/36 - -
Series 2006-S3, Class A7, 6.24%, 8/25/36 - -
JP Morgan Chase Commercial Mortgage Sec. Corp.,
Series 2003-CB6, Class A2, 5.26%, 7/12/37 865 856
Series 2003-LN1, Class A2, 4.92%, 10/15/37 - -
JP Morgan Chase Commercial Mortgage,
Series 2001-C1, Class A3, 5.86%, 10/12/35 (a) - -
JP Morgan Mortgage Acquisition Corp.,
Series 2006-WF1, Class A4, 6.13%, 7/25/36 - -
Series 2006-WF1, Class A5, 6.41%, 7/25/36 - -
JP Morgan Mortgage Trust,
Series 2005-A1, Class 2A1, 4.84%, 2/25/35 (a) 1,022 1,001
Series 2005-A1, Class 3A4, 5.05%, 2/25/35 - -
Series 2005-A2, Class 3A2, 4.93%, 4/25/35 3,000 2,924
Series 2005-A2, Class 5A1, 4.35%, 4/25/35 (a) - -
Series 2005-A2, Class 7CB1, 4.89%, 4/25/35 (a) 3,619 3,546
Series 2005-A3, 4.50%, 6/25/35 - -
Series 2005-A3, Class 7CA1, 5.17%, 6/25/35 2,667 2,653
Series 2005-ALT1, Class 4A1, 5.65%, 10/25/35 (a) 3,569 3,523
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a)(c) 3,680 3,650
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a) - -
Series 2006-A4, Class 2A2, 5.83%, 6/25/36 (a) 926 923
Series 2006-A7, Class 2A2, 5.87%, 1/25/37 (a) - -
JPM Chase Capital XXI, 6.25%, 2/2/37 (a) - -
Key Bank NA, 4.95%, 9/15/15 - -
Kroger Co., 6.20%, 6/15/12 500 509
LB-UBS Commercial Mortgage Trust,
Series 2003-C8, Class A4, 5.12%, 11/15/32 - -
Series 2005-C3, 4.55%, 7/15/30 330 321
Long Beach Auto Receivable Trust,
Series 2003-B, Class A4, 2.18%, 2/15/10 (c) 1,656 1,643
Manufacturers & Traders Trust Co.,
3.85%, 4/1/13 (a) - -
Marlin Leasing Receivables LLC, 4.75%, 8/15/12 (b) - -
MassMutual Global Funding II, 3.80%, 4/15/09 (b) - -
Merrill Lynch & Co., 6.05%, 5/16/16 - -
Morgan Stanley Capital I,
5.11%, 6/15/40 3,200 3,117
Series 2006-HQ9, Class AJ, 5.79%, 7/20/44 - -
Series 2006-IQ12, Class AJ, 5.40%, 12/15/43 - -
Morgan Stanley Dean Witter Capital I,
4.74%, 11/13/36 2,590 2,504
Morgan Stanley Mortgage Loan Trust, 5.00%, 8/25/19 2,083 2,028
Morgan Stanley, 4.75%, 4/1/14 - -
Motorola, Inc., 6.50%, 11/15/28 (d) 805 808
Navistar Financial Corp. Owner Trust,
5.52%, 4/15/08 (a)(c) 599 599
NCNB Corp., 10.20%, 7/15/15 2,500 3,231
Nextel Communications, 7.38%, 8/1/15 - -
Nomura Asset Acceptance Corp.,
Series 2004-AR4, Class 1A2, 4.93%, 12/25/34 - -
Series 2005-AR1, Class 1A2, 5.35%, 2/25/35 - -
Series 2005-AR2, Class 2A2, 5.56%, 5/25/35 (a) - -
Series 2005-AR3, 5.65%, 7/25/35 - -
Series 2005-AR5, Class 2A2, 5.64%, 10/25/35 (a) - -
Series 2006-AF1, Class 3A2, 6.64%, 6/25/36 (a) - -
Series 1998-D6, Class A2, 7.01%, 3/15/30 (a) - -
Series 1998-D6, Class A4, 7.59%, 3/15/30 (a) - -
Norfolk Southern Corp., 5.59%, 5/17/25 130 123
Oncor Electric Delivery, 7.00%, 5/1/32 480 519
Onyx Acceptance Owner Trust,
Series 2003-D, Class A4, 3.20%, 3/15/10 (c) 1,579 1,560
Pemex Master Trust, 6.13%, 8/15/08 825 828
Pemex Project Funding Master Trust, 7.38%, 12/15/14 - -
Popular ABS Mortgage Pass-Through Trust,
4.98%, 9/15/35 - -
PPG Industries, Inc., 6.50%, 11/1/07 - -
Preferred Term Securities II, 9.55%, 3/1/31 (b) - -
Preferred Term Securities X, 4.15%, 7/3/33 (b) 1,000 976
Premcor Refining Group, 9.25%, 2/1/10 - -
Prestige Auto Receivables Trust,
Series 2006-1A, Class A2, 5.25%, 6/17/13 (a)(b) - -
Principal Life Global, 5.13%,10/15/13 (b) - -
Ras Laffan Liquid & Natural Gas, 5.30%, 9/30/20 (b) - -
Regions Financial Corp., 7.00%, 3/1/11 - -
Renaissance Home Equity Loan Trust,
Series 2005-2, 4.93%, 8/25/35 (a) - -
Renaissance Home Equity Loan Trust,
Series 2006-1, Class AF4, 6.01%, 5/25/36 - -
Republic New York Corp., 7.00%, 3/22/11 1,000 1,055
Residential Accredit Loans, Inc.,
5.59%, 3/25/34 (a)(c) 1,832 1,833
Series 2005-QA12, Class CB1, 5.74%, 12/25/35 (a) 3,342 3,332
Series 2006-QA8, Class A3, 5.56%, 9/25/36 (a)(c) 5,020 5,025
Residential Asset Mortgage Products, Inc.,
Series 2002-RZ3, Class M1, 5.28%, 8/25/32 (a) - -
Series 2003-RZ5, Class A7, 4.97%, 9/25/33 (a) 3,305 3,240
Series 2005-AHL1, Class A2, 5.59%, 7/25/35 (a)(c) 2,700 2,702
Residential Funding Mortgage Securities,
Series 2006-HI3, Class A4, 6.31%, 5/25/36 (a) - -
Series 2006-HSA1, Class A4, 5.49%, 2/25/36 - -
Restructured Asset Certificate,
6.00%, 3/23/27 (b) 2,000 2,000
6.00%, 3/23/27 (b)(f) - -
SACO I Trust,
5.72%, 7/25/35 (a) - -
Series 2006-1, Class A, 5.49%, 9/25/35 (a)(c) 5,046 5,048
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a)(c) 4,000 4,000
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a) - -
Salomon Brothers Mortgage Securities,
Series 2002-KEY2, Class C, 5.05%, 3/18/36 - -
Salomon Brothers Mortgage Securities VII,
Series 2002-KEY2, Class A3, 4.87%, 3/18/36 - -
SBA CMBS Trust, Series 2006-1A,
Class D, 5.85%, 11/15/36 (b) - -
Class E, 6.17%, 11/15/36 (b) - -
Science Applications International Co.,
5.50%, 7/1/33 2,105 1,834
SLM Corp., 2.46%, 10/8/08 (a) - -
SLM Corp., 2.43%, 4/1/09 (a) - -
SLM Corp., 2.56%, 12/15/14 (a) - -
SLM Corp., 5.00%, 4/15/15 175 167
Sovrisc BV, 5.25%, 4/30/11 - -
Sprint Capital Corp., 8.75%, 3/15/32 600 712
Structured Asset Securities Corp.,
5.15%, 12/25/34 (a) 1,245 1,199
Suntrust Alternative Loan Trust,
Series 2005-1F, Class B3, 6.07%, 12/25/35 (a) 1,393 1,246
TAQA ABU DHABI National, 5.88%, 10/27/16 (b) - -
Tennessee Valley Authority, 6.39%, 12/15/17 ** 5,000 2,849
Thornburg Mortgage Securities Trust,
Series 2004-2, Class A3, 5.63%, 6/25/44 (a)(c) 2,530 2,528
Trans-Canada Pipeline, 5.60%, 3/31/34 750 703
Trapeza CDO LLC, Series 2007-12A,
Class C1, 6.51%, 4/6/42 (a)(b)(c) 1,000 1,000
Class C1, 6.51%, 4/6/42 (a)(b) - -
Travelers Property Casualty Corp., 7.75%, 4/15/26 85 101
Truck Retail Installment Paper Corp.,
5.59%, 12/15/16 (a)(b)(c) 6,950 6,969
U.S. Bank, N.A., 3.75%, 2/6/09 - -
UBS Preferred Funding Trust I, 8.62%, 10/29/49 (a) 925 1,020
UPFC Auto Receivables Trust,
Series 2004-A, Class A3, 3.27%, 9/15/10 - -
Vale Overseas, Ltd., 6.25%, 1/23/17 - -
Vanderbilt Acquisition Loan Trust,
Series 2002-1, Class A4, 6.57%, 5/7/27 - -
Vectren Utility Holdings, 5.45%, 12/1/2015 - -
Washington Mutual,
Series 2003-AR9, Class 1A6, 4.05%, 9/25/33 (a) 5,862 5,739
Series 2004-AR3, Class A-2, 4.24%, 6/25/34 1,592 1,565
Wells Fargo Mortgage Backed Securities Trust,
5.14%, 5/25/35 (a) 2,888 2,815
Series 2003-N, 4.75%, 12/25/33 (a) 1,550 1,487
WMALT Mortgage Pass-through Certificates,
Series 2005-1, Class 1A2, 5.50%, 3/25/35 (a) - -
YUM! Brands Inc., 7.70%, 7/1/12 (c) 1,250 1,354
------ -------- ------
Total Corporate Bonds 176,938 53.5%
------ -------- ------
FOREIGN BONDS
France Telecom, 8.75%, 3/1/31 650 850
Korea Electric Power, 4.25%, 9/12/07 (b) - -
--------
Total Foreign Bonds 850 0.3%
------ -------- ------
U.S. GOVERNMENT AGENCIES
FANNIE MAE
6.25%, 1/25/08 541 542
5.30%, 5/8/08 - -
4.00%, 9/2/08 1,000 981
6.05%, 12/1/08 2,810 2,827
6.38%, 6/15/09 1 1,131
6.63%, 9/15/09 1,000 1,037
4.62%, 4/25/10 683 672
4.40%, 12/25/12 638 615
5.65%, 4/10/13 (d) - -
6.00%, 5/1/17 198 201
6.50%, 6/1/17 283 290
6.50%, 8/1/17 209 214
5.50%, 1/1/18 14 14
5.50%, 2/1/18 8 8
4.50%, 5/1/18 TBA 7,200 6,911
6.00%, 5/1/18 1,007 1,020
5.50%, 2/1/25 1,366 1,353
5.00%, 5/1/25 2,233 2,162
7.50%, 6/1/28 232 243
6.50%, 8/1/28 207 212
6.50%, 6/1/29 189 194
6.50%, 4/1/32 422 432
6.50%, 6/1/32 775 793
7.00%, 6/1/32 220 228
6.50%, 7/1/32 1,199 1,226
7.50%, 12/1/32 170 177
6.00%, 1/1/33 368 371
6.00%, 1/1/33 TBA 14,000 14,049
6.50%, 3/1/33 315 321
5.00%, 5/1/33 TBA 14,000 13,431
5.50%, 5/1/33 TBA 8,500 8,360
6.00%, 8/25/33 (a) 2,474 2,458
5.50%, 12/25/33 900 893
5.50%, 5/25/34 3,150 3,037
5.22%, 8/1/34 - -
7.00%, 9/1/34 139 143
4.31%, 1/1/35 2,111 2,071
5.50%, 6/1/35 827 813
6.00%, 7/1/35 4,399 4,415
6.00%, 9/1/35 2,393 2,402
5.00%, 11/1/35 3,834 3,681
6.00%, 1/1/36 4,229 4,245
5.62%, 4/25/36 (a)(c) 5,889 5,893
6.50%, 8/1/36 1,166 1,180
7.00%, 9/1/36 1,624 1,664
3.99%, 3/25/40 (a) 54 54
5.57%, 8/25/44 (a) 1,128 1,130
--------
94,094 28.5%
------ -------- ------
FEDERAL HOME LOAN BANK
4.50%, 8/8/08 (d) - -
4.06%, 8/25/09 1,223 1,195
4.00%, 2/25/10 631 611
4.75%, 10/25/10 (a) 859 850
5.13%, 11/15/10 - -
5.15%, 12/20/11 - -
4.84%, 1/25/12 778 786
5.87%, 9/15/36 (a)(c) 2,482 2,489
--------
5,931 1.8%
------ -------- ------
FINANCING CORPORATION
3.59%, 4/5/09 ** 2,000 1,790
4.21%, 12/6/11 ** 2,000 1,570
4.81%, 6/6/15 ** 2,000 1,308
6.46%, 11/11/17 ** 1,000 572
--------
5,240 1.6%
------ -------- ------
FREDDIE MAC
5.00%, 1/30/09 - -
5.73%, 12/28/09 - -
5.50%, 7/15/10 1,000 1,000
6.88%, 9/15/10 2,000 2,117
5.88%, 3/21/11 1,000 1,022
5.00%, 8/15/12 - -
4.50%, 11/15/12 1,000 971
4.65%, 10/10/13 - -
5.25%, 4/18/16 2,000 2,015
4.00%, 1/15/17 7,500 7,078
4.00%, 12/15/21 336 333
5.00%, 2/15/25 3,245 3,064
7.00%, 6/1/26 724 745
6.50%, 1/1/29 1,547 1,587
7.00%, 1/1/32 131 136
6.50%, 7/1/32 265 271
7.00%, 8/1/32 576 593
6.50%, 9/1/32 154 157
5.00%, 12/15/32 1,128 1,126
5.50%, 2/1/33 TBA 12,900 12,695
6.00%, 9/1/33 622 625
5.00%, 1/15/34 1,000 936
6.50%, 5/15/34 (a) 2,234 2,208
4.50%, 6/1/34 913 851
4.50%, 9/1/34 1,170 1,091
5.50%, 7/15/35 1,977 1,859
6.00%, 11/1/35 TBA 2,000 2,008
5.97%, 6/1/36 (a) - -
5.72%, 7/15/36 (a)(c) 1,922 1,929
6.11%, 1/1/37 (a) - -
--------
46,417 14.0%
------ -------- ------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
9.50%, 12/15/09 - -
3.59%, 11/16/17 420 408
3.96%, 9/16/21 670 655
3.27%, 1/16/23 819 787
4.39%, 5/16/23 804 788
5.50%, 2/20/31 2,000 1,993
5.50%, 12/20/32 1,000 976
5.00%, 7/1/33 TBA 4,000 3,862
5.50%, 10/1/33 TBA 5,000 4,949
5.03%, 11/16/33 - -
5.50%, 11/20/33 1,000 960
0.97%, 6/17/45 2,866 155
0.52%, 3/16/46 - -
0.57%, 4/16/46 37,843 1,453
0.80%, 5/16/46 24,851 1,385
3.40%, 5/16/46 (a) 2,543 1,613
0.91%, 8/16/46 24,928 1,482
1.06%, 12/16/47 3,322 194
1.00%, 2/16/48 14,985 942
1.065%, 2/16/48 24,913 1,451
--------
24,053 7.3%
------ -------- ------
SMALL BUSINESS ADMINISTRATION,
4.94%, 8/10/15 (c) 3,585 3,515 1.1%
TENNESSEE VALLEY AUTHORITY, 6.79%, 5/23/12 1,000 1,078 0.3%
------ -------- ------
Total U.S. Government Agencies 180,328 54.6%
------ -------- ------
U.S. TREASURY OBLIGATIONS
U.S. TREASURY BILL 6.58%, 6/6/18 ** 1,000 555
U.S. TREASURY BONDS 4.50%, 2/15/36 (d) 3,525 3,295
U.S. TREASURY NOTES 2.38%, 4/15/11 500 506
U.S. TREASURY NOTES 4.63%, 11/15/16 (d) - -
U.S. TREASURY STRIPS 5.45%, 5/15/17 **(d) 5,580 3,374
U.S. TREASURY STRIPS 5.00%, 11/15/27 ** 7,400 2,629
--------
Total U.S. Treasury Obligations 10,359 3.1%
------ -------- ------
SHARES
----------
INVESTMENTS IN AFFILIATES (e)
Fifth Third Institutional
Government Money Market Fund 8,586,054 8,586
Fifth Third Institutional
Money Market Fund 5,186,843 5,187
--------
Total Investments in Affiliates 13,773 4.2%
------ -------- ------
PRINCIPAL
----------
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds $9,231 9,231
--------
Total Short-Term Securities held as
Collateral for Securities Lending 9,231 2.8%
------ -------- ------
TOTAL INVESTMENTS 410,480 124.2%
LIABILITIES IN EXCESS OF OTHER ASSETS (80,078) -24.2%
------ -------- ------
NET ASSETS - 100.0% $330,402 100.0%
====== ========= ======
Total Investments Cost + $ 414,636
=========
- -------------------------------------------
For federal income tax purposes:
Total investments cost $ 415,373
=========
Gross unrealized appreciation $ 1,482
Gross unrealized depreciation (6,375)
--------
Net unrealized depreciation $(4,893)
=========
MERGER SCENARIO 3
----------- ---------- ------
PRO FORMA FUND
---------- -------- ------
PRINCIPAL VALUE %
---------- -------- ------
COMMERCIAL PAPER
Cargill Global Funding, Inc.,
5.34%, 2/12/07 ** (c) $ 1,270 $ 1,268
5.33%, 2/20/07 ** (c) 2,435 2,428
Prudential Funding, 5.31%, 2/15/07 ** 2,150 2,146
UBS Finance, 5.35%, 2/12/07 **(c) 13,180 13,159
--------
Total Commercial Paper 19,001 2.4%
-------- ------
CORPORATE BONDS
Ace Securities Corp., 6.03%, 9/25/35 (a) 3,000 3,023
Alabama Power Cap, 5.50%,10/1/42 (a) 874 871
American Express Travel, 5.25%, 11/21/11 (b) 1,000 996
Ameriprise Financial, Inc., 5.65%, 11/15/15 1,480 1,481
AOL Time Warner, Inc., 7.70%, 5/1/32 492 556
Associated Bank, NA, 5.49%, 6/2/08 (a) 5,000 5,010
Attentus CDO, Ltd.,
Series 2006-2A, Class A3B, 5.80%, 10/9/41 (a)(b) 5,000 5,000
Banc of America Commercial Mortgage, Inc.,
Series 2005-6, Class AJ, 5.18%, 9/10/47 2,850 2,780
Banc of America Funding Corp.,
Series 2006-G, Class 3A2, 5.75%, 7/20/36 (a) 9,895 9,830
Bank of America Corp., 9.38%, 9/15/09 5,000 5,482
BankAmerica Capital, 8.00%, 12/15/26 2,000 2,080
Bayview Financial Acquisition Trust,
Series 2006-D, Class 1A2, 5.66%, 12/28/36 (a) 4,925 4,879
Bear Stearns Adjustable Rate Mortgage Trust,
Series 2004-10, Class 12A3, 4.65%, 1/25/35 (a) 1,228 1,213
Series 2005-12, Class 11A2, 5.41%, 2/25/36 (a) 3,456 3,452
Series 2005-12, Class 13A1, 5.47%, 2/25/36 (a) 3,758 3,708
Bear Stearns Alternative-A Trust,
Series 2005-9, 5.85%, 11/25/35 1,700 1,716
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2000-WF2, Class A1, 7.11%, 10/15/32 2,373 2,397
Series 2004-T14, Class A4, 5.20%, 1/12/41 2,000 1,966
Series 2004-T16, Class A6, 4.75%, 2/13/46 (a) 7,500 7,158
Chase Commercial Mortgage Securities Corp.,
Series 1998-1, Class A2, 6.56%, 5/18/30 3,404 3,427
Chase Mortgage Finance Corp.,
Series 2006-A1, Class 2A3, 6.00%, 9/25/36 2,000 2,017
Series 2006-S2, Class 2A5, 6.00%, 10/25/36 (a) 7,630 7,637
Series 2006-S2, Class 2A6, 6.00%, 10/25/36 5,105 5,072
Series 2006-A1, Class 2AX, 0.01%, 9/25/36 57,438 285
Series 2006-A1, Class 4A1, 6.07%, 9/25/36 (a) 9,931 9,908
Chaseflex Trust,
Series 2006-1, Class A2A, 5.94%, 6/25/36 (a) 1,600 1,603
Series 2006-1, Class A4, 6.30%, 6/25/36 (a) 7,344 7,390
Series 2006-1, Class A6, 6.29%, 6/25/36 (a) 5,265 5,348
Series 2006-2, Class A4, 6.34%, 9/25/36 (a) 5,100 5,145
Cigna CDO Ltd.,
Series 2000-1X, Class A, 5.79%, 8/28/12 (a)(b)(c) 3,069 3,072
Citigroup Commercial Mortgage Trust,
Series 2005-EMG, 4.38%, 9/20/51 (b) 5,000 4,832
Citigroup Deutsche Bank Commercial Mortgage,
Series 2006-CD3, Class AJ, 5.69%, 10/15/48 2,545 2,558
Comcast Cable, 7.13%, 6/15/13 1,750 1,888
Commerce Group, Inc., 5.95%, 12/9/13 1,000 997
Commercial Mortgage Asset Trust,
Series 1999-C1, Class B, 7.23%, 1/17/32 (a) 1,500 1,641
Conocophillips Canada, 5.63%, 10/15/16 (d) 1,475 1,476
Costco Wholesale Corp., 5.50%, 3/15/07 2,015 2,014
Countrywide Alternative Loan Trust,
6.50%, 9/25/34 (a) 582 591
Series 2004-2CB, Class 1A1, 4.25%, 3/25/34 3,524 3,453
Series 2005-7CB, Class M, 5.50%, 4/25/35 2,456 2,361
Countrywide Asset-Backed Certificates,
Series 2002-BC1, Class M1, 6.75%, 4/25/32 (a) 1,240 1,241
Cox Communications, Inc., 5.50%, 10/1/15 800 781
Credit Suisse First Boston Mortgage Sec. Corp.,
Series 2002-CKN2, 6.38%, 4/15/37 1,000 1,037
Credit-Based Asset Servicing and Securitization,
Series 2004-CB8, Class AF3, 5.09%, 12/25/35 5,145 5,028
Series 2006-CB1, Class AF4, 5.44%, 1/25/36 6,375 6,295
Series 2006-CB2, Class AF2, 5.50%, 12/25/36 (a) 2,400 2,390
Credit-Based Asset Servicing and Securitizing,
5.43%, 11/25/36 (a) 2,475 2,443
Crown Castle Towers LLC,
Series 2006-1A, Class E, 6.065%, 11/15/36 (b) 6,100 6,056
Series 2005-1A, 4.64%, 6/15/35 (b) 4,000 3,900
CS First Boston Mortgage Securities Corp.,
Series 2003-CK2, Class A4, 4.80%, 3/15/36 4,750 4,597
Delta Airlines, 6.72%, 1/2/23 (d) 3,729 3,776
Deutsche Alternative-A Securities, Inc.,
Mortgage Loan Trust,
Series 2006-AB3, Class A3, 6.51%, 7/25/36 2,445 2,458
Series 2006-AB4, Class A3A1, 5.90%, 10/25/36 5,145 5,138
5.05%, 9/25/35 1,540 1,525
Deutsche Mortgage Securities, Inc.,
5.04%, 6/26/35 (a) 1,864 1,855
Series 2005-1, 5.75%, 2/25/35 4,843 4,775
Devon Energy Corp., 7.95%, 4/15/32 700 844
Duke Capital LLC, 5.50%, 3/1/14 1,825 1,767
Duke Energy Corp., 6.45%, 10/15/32 850 897
First Franklin Mortgage Certificate,
Series 2004-FF11, Class 1A2, 5.70%, 1/25/35 (a) 267 267
Series 2005-FFA, Class M3, 5.52%, 3/25/25 600 595
First Horizon ABS Trust,
Series 2006-HE1, Class A, 5.51%, 10/25/34 (a) 1,967 1,967
First Horizon Trust,
Series 2006-HE2, Class A, 5.45%, 10/25/26 (a) 2,409 2,409
First Tennessee Bank, Series BKNT, 5.65%, 4/1/16 2,000 1,981
Fleet Financial Group, 7.38%, 12/1/09 5,000 5,252
Gazprom International, 7.20%, 2/1/20 (b) 3,015 3,154
General Motors Acceptance Corp.,
Mortgage Corp. Loan Trust, 5.00%, 10/25/33 2,700 2,629
Mortgage Corp. Loan Trust, 4.34%, 11/1/34 (a) 1,750 1,722
Global Signal Trust,
Series 2006-1, Class C, 5.71%, 2/15/36 (a)(b) 2,550 2,550
Series 2006-1, Class D, 6.05%, 2/15/36 (b) 3,000 2,978
GMAC Commerical Mortgage Securities, Inc.,
Series 1997-C2, Class B, 6.70%, 4/15/29 395 396
Goldman Sachs Group, Inc., 5.00%, 10/1/14 2,500 2,411
Goldman Sachs Group, Inc., 6.13%, 2/15/33 1,100 1,109
Greenwich Capital Commercial Funding Corp.,
Series 2002-C1, Class A4, 4.95%, 1/11/35 1,000 978
Series 2004-GG1, Class A5, 4.88%, 6/10/36 2,000 1,962
GS Mortgage Securities Corp. II,
Series 2004-C1, Class B, 4.46%, 10/10/28 (a) 2,600 2,507
Series 2004-C1, Class C, 4.52%, 10/10/28 (a) 3,888 3,752
Series 2004-GG2, Class A3, 4.60%, 8/10/38 4,900 4,807
GSR Mortgage Loan Trust,
Series 2005-AR6, Class 3A1, 4.56%, 9/25/35 (a) 2,149 2,096
Harley-Davidson Motorcycle Trust,
Series 2004-2, Class B, 2.96%, 2/15/12 166 160
Hertz Vehicle Financing LLC,
Series 2005-2A, Class A6, 5.08%, 11/25/11 (b)(c) 3,000 2,987
Hibernia Corp., 5.35%, 5/1/14 2,845 2,775
Home Depot, Inc., 5.40%, 3/1/16 800 773
Homebanc Mortgage Trust,
Series 2004-1, Class 2M2, 6.47%, 8/25/29 (a) 611 611
Series 2004-2, 5.77%, 12/25/34 (a)(c) 2,350 2,358
Series 2006-1, Class 1A1, 6.15%, 4/25/37 (a) 830 834
Series 2006-1, Class 2A1, 6.05%, 4/25/37 (a) 4,135 4,165
HSBC Finance Corp., 6.38%, 10/15/11 2,000 2,081
Hyundai Auto Receivables Trust,
Series 2006-B, Class C, 5.25%, 5/15/13 2,665 2,654
Indiana Michigan Power, 5.05%, 11/15/14 2,035 1,949
IndyMac Index Mortgage Loan Trust,
Series 2005-AR9, 5.45%, 7/25/35 (a) 3,539 3,586
International Lease Finance Corp., 5.88%, 5/1/13 2,500 2,540
I-Preferred Term Secs, 7.47%, 12/11/32 (a)(b) 1,000 1,006
I-Preferred Term Secs II, 7.37%, 5/22/33 (a)(b) 1,000 1,010
Irwin Home Equity,
Series 2006-3, Class 2A2, 5.83%, 9/25/37 (b) 1,225 1,228
Jefferies Group, Inc., 5.50%, 3/15/16 2,000 1,933
JP Morgan Alternative Loan Trust,
Series 2005-S1, Class 1A2, 5.50%, 12/25/35 2,237 2,217
Series 2006-A4, Class A7, 6.30%, 9/25/36 (a) 5,000 5,069
Series 2006-A4, Class A9, 6.30%, 9/25/36 4,583 4,597
Series 2006-A5, Class 2A6, 5.80%, 10/25/36 (a) 5,640 5,619
Series 2006-S1, Class 1A18, 6.00%, 3/25/36 (a) 4,292 4,294
Series 2006-S2, Class A3, 5.92%, 5/25/36 (a) 4,730 4,696
Series 2006-S2, Class A6, 6.05%, 5/25/36 (a) 4,975 4,967
Series 2006-S3, Class A3A, 6.00%, 8/25/36 4,529 4,510
Series 2006-S3, Class A7, 6.24%, 8/25/36 5,245 5,310
JP Morgan Chase Commercial Mortgage Sec. Corp.,
Series 2003-CB6, Class A2, 5.26%, 7/12/37 5,325 5,271
Series 2003-LN1, Class A2, 4.92%, 10/15/37 6,680 6,473
JP Morgan Chase Commercial Mortgage,
Series 2001-C1, Class A3, 5.86%, 10/12/35 (a) 6,465 6,570
JP Morgan Mortgage Acquisition Corp.,
Series 2006-WF1, Class A4, 6.13%, 7/25/36 3,191 3,218
Series 2006-WF1, Class A5, 6.41%, 7/25/36 4,286 4,345
JP Morgan Mortgage Trust,
Series 2005-A1, Class 2A1, 4.84%, 2/25/35 (a) 1,022 1,001
Series 2005-A1, Class 3A4, 5.05%, 2/25/35 6,218 6,140
Series 2005-A2, Class 3A2, 4.93%, 4/25/35 3,000 2,924
Series 2005-A2, Class 5A1, 4.35%, 4/25/35 (a) 3,900 3,741
Series 2005-A2, Class 7CB1, 4.89%, 4/25/35 (a) 3,619 3,546
Series 2005-A3, 4.50%, 6/25/35 4,286 4,151
Series 2005-A3, Class 7CA1, 5.17%, 6/25/35 2,667 2,653
Series 2005-ALT1, Class 4A1, 5.65%, 10/25/35 (a) 3,569 3,523
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a)(c) 8,522 8,453
Series 2006-A2, Class 3A2, 5.68%, 4/25/36 (a) - -
Series 2006-A4, Class 2A2, 5.83%, 6/25/36 (a) 926 923
Series 2006-A7, Class 2A2, 5.87%, 1/25/37 (a) 4,775 4,765
JPM Chase Capital XXI, 6.25%, 2/2/37 (a) 1,000 992
Key Bank NA, 4.95%, 9/15/15 2,365 2,254
Kroger Co., 6.20%, 6/15/12 500 509
LB-UBS Commercial Mortgage Trust,
Series 2003-C8, Class A4, 5.12%, 11/15/32 2,924 2,873
Series 2005-C3, 4.55%, 7/15/30 330 321
Long Beach Auto Receivable Trust,
Series 2003-B, Class A4, 2.18%, 2/15/10 (c) 1,656 1,643
Manufacturers & Traders Trust Co.,
3.85%, 4/1/13 (a) 1,075 1,056
Marlin Leasing Receivables LLC, 4.75%, 8/15/12 (b) 3,000 2,960
MassMutual Global Funding II, 3.80%, 4/15/09 (b) 1,390 1,345
Merrill Lynch & Co., 6.05%, 5/16/16 2,050 2,105
Morgan Stanley Capital I,
5.11%, 6/15/40 3,200 3,117
Series 2006-HQ9, Class AJ, 5.79%, 7/20/44 5,235 5,314
Series 2006-IQ12, Class AJ, 5.40%, 12/15/43 5,000 4,921
Morgan Stanley Dean Witter Capital I,
4.74%, 11/13/36 2,590 2,504
Morgan Stanley Mortgage Loan Trust, 5.00%, 8/25/19 2,083 2,028
Morgan Stanley, 4.75%, 4/1/14 1,000 948
Motorola, Inc., 6.50%, 11/15/28 (d) 805 808
Navistar Financial Corp. Owner Trust,
5.52%, 4/15/08 (a)(c) 599 599
NCNB Corp., 10.20%, 7/15/15 2,500 3,231
Nextel Communications, 7.38%, 8/1/15 1,285 1,317
Nomura Asset Acceptance Corp.,
Series 2004-AR4, Class 1A2, 4.93%, 12/25/34 1,310 1,303
Series 2005-AR1, Class 1A2, 5.35%, 2/25/35 2,253 2,231
Series 2005-AR2, Class 2A2, 5.56%, 5/25/35 (a) 1,705 1,728
Series 2005-AR3, 5.65%, 7/25/35 2,382 2,329
Series 2005-AR5, Class 2A2, 5.64%, 10/25/35 (a) 1,632 1,626
Series 2006-AF1, Class 3A2, 6.64%, 6/25/36 (a) 2,968 3,029
Series 1998-D6, Class A2, 7.01%, 3/15/30 (a) 1,000 1,086
Series 1998-D6, Class A4, 7.59%, 3/15/30 (a) 1,600 1,783
Norfolk Southern Corp., 5.59%, 5/17/25 130 123
Oncor Electric Delivery, 7.00%, 5/1/32 480 519
Onyx Acceptance Owner Trust,
Series 2003-D, Class A4, 3.20%, 3/15/10 (c) 1,579 1,560
Pemex Master Trust, 6.13%, 8/15/08 825 828
Pemex Project Funding Master Trust, 7.38%, 12/15/14 2,000 2,165
Popular ABS Mortgage Pass-Through Trust,
4.98%, 9/15/35 1,510 1,491
PPG Industries, Inc., 6.50%, 11/1/07 30 30
Preferred Term Securities II, 9.55%, 3/1/31 (b) 817 915
Preferred Term Securities X, 4.15%, 7/3/33 (b) 2,425 2,367
Premcor Refining Group, 9.25%, 2/1/10 2,000 2,099
Prestige Auto Receivables Trust,
Series 2006-1A, Class A2, 5.25%, 6/17/13 (a)(b) 2,000 2,000
Principal Life Global, 5.13%,10/15/13 (b) 1,090 1,072
Ras Laffan Liquid & Natural Gas, 5.30%, 9/30/20 (b) 2,700 2,556
Regions Financial Corp., 7.00%, 3/1/11 1,275 1,349
Renaissance Home Equity Loan Trust,
Series 2005-2, 4.93%, 8/25/35 (a) 2,500 2,475
Renaissance Home Equity Loan Trust,
Series 2006-1, Class AF4, 6.01%, 5/25/36 1,575 1,574
Republic New York Corp., 7.00%, 3/22/11 1,000 1,055
Residential Accredit Loans, Inc.,
5.59%, 3/25/34 (a)(c) 1,832 1,833
Series 2005-QA12, Class CB1, 5.74%, 12/25/35 (a) 3,342 3,332
Series 2006-QA8, Class A3, 5.56%, 9/25/36 (a)(c) 5,020 5,025
Residential Asset Mortgage Products, Inc.,
Series 2002-RZ3, Class M1, 5.28%, 8/25/32 (a) 725 722
Series 2003-RZ5, Class A7, 4.97%, 9/25/33 (a) 3,305 3,240
Series 2005-AHL1, Class A2, 5.59%, 7/25/35 (a)(c) 2,700 2,702
Residential Funding Mortgage Securities,
Series 2006-HI3, Class A4, 6.31%, 5/25/36 (a) 1,500 1,522
Series 2006-HSA1, Class A4, 5.49%, 2/25/36 1,500 1,478
Restructured Asset Certificate,
6.00%, 3/23/27 (b) 2,000 2,000
6.00%, 3/23/27 (b)(f) 3,250 3,250
SACO I Trust,
5.72%, 7/25/35 (a) 1,694 1,694
Series 2006-1, Class A, 5.49%, 9/25/35 (a)(c) 5,046 5,048
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a)(c) 4,000 4,000
Series 2006-12, Class 1M1, 5.63%, 11/25/36 (a) 2,500 2,500
Salomon Brothers Mortgage Securities,
Series 2002-KEY2, Class C, 5.05%, 3/18/36 1,417 1,390
Salomon Brothers Mortgage Securities VII,
Series 2002-KEY2, Class A3, 4.87%, 3/18/36 2,270 2,215
SBA CMBS Trust, Series 2006-1A,
Class D, 5.85%, 11/15/36 (b) 3,100 3,085
Class E, 6.17%, 11/15/36 (b) 1,350 1,346
Science Applications International Co.,
5.50%, 7/1/33 2,105 1,834
SLM Corp., 2.46%, 10/8/08 (a) 1,500 1,459
SLM Corp., 2.43%, 4/1/09 (a) 1,260 1,226
SLM Corp., 2.56%, 12/15/14 (a) 1,000 945
SLM Corp., 5.00%, 4/15/15 175 167
Sovrisc BV, 5.25%, 4/30/11 2,000 2,006
Sprint Capital Corp., 8.75%, 3/15/32 600 712
Structured Asset Securities Corp.,
5.15%, 12/25/34 (a) 1,245 1,199
Suntrust Alternative Loan Trust,
Series 2005-1F, Class B3, 6.07%, 12/25/35 (a) 3,191 2,855
TAQA ABU DHABI National, 5.88%, 10/27/16 (b) 1,100 1,098
Tennessee Valley Authority, 6.39%, 12/15/17 ** 5,000 2,849
Thornburg Mortgage Securities Trust,
Series 2004-2, Class A3, 5.63%, 6/25/44 (a)(c) 2,530 2,528
Trans-Canada Pipeline, 5.60%, 3/31/34 750 703
Trapeza CDO LLC, Series 2007-12A,
Class C1, 6.51%, 4/6/42 (a)(b)(c) 1,000 1,000
Class C1, 6.51%, 4/6/42 (a)(b) 3,000 3,000
Travelers Property Casualty Corp., 7.75%, 4/15/26 85 101
Truck Retail Installment Paper Corp.,
5.59%, 12/15/16 (a)(b)(c) 6,950 6,969
U.S. Bank, N.A., 3.75%, 2/6/09 2,500 2,428
UBS Preferred Funding Trust I, 8.62%, 10/29/49 (a) 925 1,020
UPFC Auto Receivables Trust,
Series 2004-A, Class A3, 3.27%, 9/15/10 1,028 1,018
Vale Overseas, Ltd., 6.25%, 1/23/17 1,975 1,979
Vanderbilt Acquisition Loan Trust,
Series 2002-1, Class A4, 6.57%, 5/7/27 2,725 2,825
Vectren Utility Holdings, 5.45%, 12/1/2015 1,000 961
Washington Mutual,
Series 2003-AR9, Class 1A6, 4.05%, 9/25/33 (a) 5,862 5,739
Series 2004-AR3, Class A-2, 4.24%, 6/25/34 1,592 1,565
Wells Fargo Mortgage Backed Securities Trust,
5.14%, 5/25/35 (a) 2,888 2,815
Series 2003-N, 4.75%, 12/25/33 (a) 4,095 3,928
WMALT Mortgage Pass-through Certificates,
Series 2005-1, Class 1A2, 5.50%, 3/25/35 (a) 1,855 1,833
YUM! Brands Inc., 7.70%, 7/1/12 (c) 1,250 1,354
-------- ------
Total Corporate Bonds 564,900 71.7%
-------- ------
FOREIGN BONDS
France Telecom, 8.75%, 3/1/31 650 850
Korea Electric Power, 4.25%, 9/12/07 (b) 1,000 992
--------
Total Foreign Bonds 1,842 0.2%
-------- ------
U.S. GOVERNMENT AGENCIES
FANNIE MAE
6.25%, 1/25/08 805 806
5.30%, 5/8/08 2,445 2,443
4.00%, 9/2/08 1,000 981
6.05%, 12/1/08 2,810 2,827
6.38%, 6/15/09 1 1,131
6.63%, 9/15/09 1,000 1,037
4.62%, 4/25/10 683 672
4.40%, 12/25/12 638 615
5.65%, 4/10/13 (d) 4,675 4,670
6.00%, 5/1/17 198 201
6.50%, 6/1/17 283 290
6.50%, 8/1/17 209 214
5.50%, 1/1/18 14 14
5.50%, 2/1/18 8 8
4.50%, 5/1/18 TBA 7,200 6,911
6.00%, 5/1/18 1,007 1,020
5.50%, 2/1/25 1,366 1,353
5.00%, 5/1/25 2,233 2,162
7.50%, 6/1/28 232 243
6.50%, 8/1/28 207 212
6.50%, 6/1/29 189 194
6.50%, 4/1/32 422 432
6.50%, 6/1/32 775 793
7.00%, 6/1/32 220 228
6.50%, 7/1/32 1,199 1,226
7.50%, 12/1/32 170 177
6.00%, 1/1/33 368 371
6.00%, 1/1/33 TBA 14,000 14,049
6.50%, 3/1/33 315 321
5.00%, 5/1/33 TBA 14,000 13,431
5.50%, 5/1/33 TBA 8,500 8,360
6.00%, 8/25/33 (a) 2,474 2,458
5.50%, 12/25/33 900 893
5.50%, 5/25/34 3,150 3,037
5.22%, 8/1/34 145 144
7.00%, 9/1/34 139 143
4.31%, 1/1/35 2,111 2,071
5.50%, 6/1/35 827 813
6.00%, 7/1/35 4,399 4,415
6.00%, 9/1/35 2,393 2,402
5.00%, 11/1/35 3,834 3,681
6.00%, 1/1/36 4,229 4,245
5.62%, 4/25/36 (a)(c) 5,889 5,893
6.50%, 8/1/36 1,166 1,180
7.00%, 9/1/36 1,624 1,664
3.99%, 3/25/40 (a) 54 54
5.57%, 8/25/44 (a) 1,128 1,130
--------
101,615 12.9%
-------- ------
FEDERAL HOME LOAN BANK
4.50%, 8/8/08 (d) 5,000 4,953
4.06%, 8/25/09 1,223 1,195
4.00%, 2/25/10 631 611
4.75%, 10/25/10 (a) 859 850
5.13%, 11/15/10 830 824
5.15%, 12/20/11 2,425 2,402
4.84%, 1/25/12 778 786
5.87%, 9/15/36 (a)(c) 2,482 2,489
--------
14,110 1.8%
-------- ------
FINANCING CORPORATION
3.59%, 4/5/09 ** 2,000 1,790
4.21%, 12/6/11 ** 2,000 1,570
4.81%, 6/6/15 ** 2,000 1,308
6.46%, 11/11/17 ** 1,000 572
--------
5,240 0.7%
-------- ------
FREDDIE MAC
5.00%, 1/30/09 1,900 1,895
5.73%, 12/28/09 5,000 5,011
5.50%, 7/15/10 1,000 1,000
6.88%, 9/15/10 2,000 2,117
5.88%, 3/21/11 1,000 1,022
5.00%, 8/15/12 2,275 2,262
4.50%, 11/15/12 1,000 971
4.65%, 10/10/13 1,300 1,248
5.25%, 4/18/16 2,000 2,015
4.00%, 1/15/17 7,500 7,078
4.00%, 12/15/21 336 333
5.00%, 2/15/25 3,245 3,064
7.00%, 6/1/26 724 745
6.50%, 1/1/29 1,547 1,587
7.00%, 1/1/32 131 136
6.50%, 7/1/32 265 271
7.00%, 8/1/32 576 593
6.50%, 9/1/32 154 157
5.00%, 12/15/32 1,128 1,126
5.50%, 2/1/33 TBA 12,900 12,695
6.00%, 9/1/33 622 625
5.00%, 1/15/34 1,000 936
6.50%, 5/15/34 (a) 3,406 3,367
4.50%, 6/1/34 913 851
4.50%, 9/1/34 1,170 1,091
5.50%, 7/15/35 1,977 1,859
6.00%, 11/1/35 TBA 2,000 2,008
5.97%, 6/1/36 (a) 125 125
5.72%, 7/15/36 (a)(c) 1,922 1,929
6.11%, 1/1/37 (a) 5,951 5,984
--------
64,101 8.1%
-------- ------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
9.50%, 12/15/09 812 838
3.59%, 11/16/17 420 408
3.96%, 9/16/21 670 655
3.27%, 1/16/23 819 787
4.39%, 5/16/23 804 788
5.50%, 2/20/31 2,000 1,993
5.50%, 12/20/32 1,000 976
5.00%, 7/1/33 TBA 4,000 3,862
5.50%, 10/1/33 TBA 5,000 4,949
5.03%, 11/16/33 5,640 5,435
5.50%, 11/20/33 1,000 960
0.97%, 6/17/45 13,376 723
0.52%, 3/16/46 13,928 582
0.57%, 4/16/46 62,740 2,409
0.80%, 5/16/46 44,731 2,493
3.40%, 5/16/46 (a) 2,543 1,613
0.91%, 8/16/46 34,899 2,075
1.06%, 12/16/47 3,322 194
1.00%, 2/16/48 45,953 2,888
1.065%, 2/16/48 79,721 4,644
--------
39,272 5.0%
-------- ------
SMALL BUSINESS ADMINISTRATION,
4.94%, 8/10/15 (c) 3,585 3,515 0.5%
TENNESSEE VALLEY AUTHORITY, 6.79%, 5/23/12 1,000 1,078 0.1%
-------- ------
Total U.S. Government Agencies 228,931 29.1%
-------- ------
U.S. TREASURY OBLIGATIONS
U.S. TREASURY BILL 6.58%, 6/6/18 ** 1,000 555
U.S. TREASURY BONDS 4.50%, 2/15/36 (d) 3,525 3,295
U.S. TREASURY NOTES 2.38%, 4/15/11 500 506
U.S. TREASURY NOTES 4.63%, 11/15/16 (d) 3,000 2,954
U.S. TREASURY STRIPS 5.45%, 5/15/17 **(d) 5,580 3,374
U.S. TREASURY STRIPS 5.00%, 11/15/27 ** 7,400 2,629
--------
Total U.S. Treasury Obligations 13,313 1.7%
-------- ------
SHARES
----------
INVESTMENTS IN AFFILIATES (e)
Fifth Third Institutional
Government Money Market Fund 8,586,054 8,586
Fifth Third Institutional
Money Market Fund 22,430,813 22,431
--------
Total Investments in Affiliates 31,017 4.0%
-------- ------
PRINCIPAL
----------
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds $25,818 25,818
--------
Total Short-Term Securities held as
Collateral for Securities Lending 25,818 3.3%
-------- ------
TOTAL INVESTMENTS 884,822 112.4%
LIABILITIES IN EXCESS OF OTHER ASSETS (97,321) -12.4%
-------- ------
NET ASSETS - 100.0% $787,501 100.0%
========= ======
Total Investments Cost + $890,391
=========
- -------------------------------------------
For federal income tax purposes:
Total investments cost $892,105
=========
Gross unrealized appreciation $ 2,741
Gross unrealized depreciation (10,024)
--------
Net unrealized depreciation $ (7,283)
=========
** Rate represents the effective yield at purchase.
+ Rep financial reporting purposes.
(a) Variable rate security. Rate presented represents rate in effect at
January 31, 2007. Maturity date represents actual maturity date.
(b) Rule 144A, Section 4(2) or other security which is restricted as to
resale to institutional investors. The Advisor has deemed this
security to be liquid based upon procedures approved by the Board of
Trustees.
(c) All or part of this security has been deposited as collateral for TBA
security.
(d) All or part of this security was on loan at January 31, 2007.
(e) Investment is in Institutional Shares of indicated fund.
(f) Rate reflected is an investment rate of return.
TBA - To be announced.
No Pro Forma Adjustments columns are provided as no adjustments have been
made to investments owned on the Pro Forma Schedules of Investments as the
investments of the Pro Forma Fund are not unsuitable nor contrary to the
investment objectives of the Pro Forma Fund.
See notes to pro forma financial statements.
As of January 31, 2007, the securities on loan information is as follows:
MARKET
OPEN VALUE OF AVERAGE
CASH COLLATERAL LOANED LOAN
COLLATERAL COMMITMENTS SECURITIES OUTSTANDING @
BOND FUND $ 9,231 $ 31 $ 8,977 $ 6,200
INTERMEDIATE BOND FUND 16,587 30 16,132 19,852
U.S. GOVERNMENT BOND FUND - - - -
PRO FORMA FUND - MERGER SCENARIO 1 $25,818 $ 61 $ 25,109 $ 26,052
PRO FORMA FUND - MERGER SCENARIO 2 $ 9,231 $ 31 $ 8,977 $ 6,200
PRO FORMA FUND - MERGER SCENARIO 3 $25,818 $ 61 $ 25,109 $ 26,052
@ For periods when securities lending was utilized.
The cash collateral received by all the funds of the Fifth Third Funds at
January 31, 2007, was pooled and invested in the following:
SECURITY TYPE SECURITY NAME VALUE RATE MATURITY DATE
- ---------------------- -------------------------------- -------- ------ -------------
Floating Rate Security American Express Bank $ 35,000 5.29% 11/20/07
Floating Rate Security Bank of New York Co., Inc. 40,000 5.31% 2/11/08
Floating Rate Security BMW 30,000 5.30% 2/5/08
Floating Rate Security Canadian Imperial Bank NY 20,000 5.30% 1/24/08
Floating Rate Security Florida Heart Group 8,595 5.32% 4/1/14
Floating Rate Security General Electric Capital Corp. 7,702 5.45% 7/9/07
Floating Rate Security Guiding Light Church 10,700 5.32% 3/1/25
Floating Rate Security IBM Corp. 35,000 5.31% 2/8/08
Floating Rate Security Lehman 10,002 5.37% 5/31/07
Floating Rate Security Merrill Lynch 30,000 5.36% 5/29/07
Floating Rate Security Morgan Stanley 10,000 5.34% 2/4/08
Floating Rate Security Morgan Stanley 5,000 5.34% 2/4/08
Floating Rate Security Morgan Stanley 25,000 5.38% 2/4/08
Floating Rate Security National Australia Bank 25,000 5.29% 2/7/08
Repurchase Agreement Barclays Capital Markets 109,920 5.25% 2/1/07
Repurchase Agreement Deutsche Bank Securities, Inc. 58,458 5.26% 2/1/07
The investment concentrations for the following funds as a percentage of net
assets, by industry, as of January 31, 2007, were as follows:
U. S. MERGER MERGER MERGER
INTERMEDIATE GOVERNMENT SCENARIO 1 SCENARIO 2 SCENARIO 3
BOND BOND BOND PRO FORMA PRO FORMA PRO FORMA
FUND FUND FUND FUND FUND FUND
Aerospace/Defense 1.0% 0.2% 0.0% 0.5% 0.8% 0.5%
Agency Collateral CMO 0.7% 0.7% 1.6% 0.7% 0.8% 0.8%
Automobile ABS 5.6% 1.2% 0.0% 2.9% 4.7% 2.7%
Banks 2.3% 6.7% 0.0% 5.0% 2.0% 4.7%
Cash Equivalents 3.3% 3.6% 0.0% 3.5% 2.8% 3.3%
Commercial MBS 15.3% 17.0% 0.0% 16.3% 13.0% 15.3%
Commercial Services 0.7% 0.0% 0.0% 0.3% 0.6% 0.2%
Diversified Financial Services 7.2% 6.1% 0.0% 6.5% 6.1% 6.1%
Electric 0.5% 1.1% 0.0% 0.9% 0.4% 0.8%
FHLMC Collateral 0.0% 1.3% 0.0% 0.8% 0.0% 0.8%
Food 0.2% 0.0% 0.0% 0.1% 0.2% 0.1%
Home Equity ABS 1.4% 4.6% 0.0% 3.4% 1.2% 3.2%
Insurance 0.0% 0.2% 0.0% 0.1% 0.0% 0.1%
Investment Companies 1.9% 3.8% 17.1% 3.1% 4.2% 4.0%
Media 1.2% 0.0% 0.0% 0.5% 1.0% 0.4%
Mining 0.0% 0.4% 0.0% 0.2% 0.0% 0.2%
Oil & Gas 1.0% 2.3% 0.0% 1.8% 0.8% 1.7%
Other ABS 7.5% 8.7% 7.0% 8.2% 7.4% 8.2%
Pipelines 0.3% 0.4% 0.0% 0.4% 0.3% 0.3%
Retail 0.8% 0.4% 0.0% 0.6% 0.7% 0.5%
Sovereign 52.7% 9.9% 82.7% 26.1% 57.2% 29.7%
Telecommunications 0.8% 0.3% 0.0% 0.5% 0.7% 0.5%
WL Collateral CMO 22.7% 34.9% 0.0% 30.2% 19.3% 28.3%
------- ------- ------- ------- ------- -------
127.1% 103.8% 108.4% 112.6% 124.2% 112.4%
======= ======= ======= ======= ======= =======
PRO FORMA COMBINED
SCHEDULES OF PORTFOLIO INVESTMENTS
JANUARY 31, 2007 (UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARES)
MID CAP GROWTH FUND
------- ------- ------
SHARES VALUE %
------- ------- ------
COMMON STOCKS
Abercrombie & Fitch Co., Class A (a) 94,800 $ 7,541
Accenture Ltd., Class A - -
Advanced Energy Industries, Inc. * - -
Affiliated Managers Group, Inc. * (a) 57,800 6,439
Akamai Technologies, Inc. * (a) 68,200 3,831
Allegheny Technologies, Inc. 76,200 7,886
Allergan, Inc. 31,700 3,700
Alliance Data Systems Corp. * 98,200 6,671 (a)
Amdocs Ltd. * 171,500 5,948
Amkor Technology, Inc. * (a) - -
Arris Group, Inc. * - -
Atmel Corp. * - -
Autodesk, Inc. * 123,000 5,378
BEA Systems, Inc. * - -
BMC Software, Inc. * - -
Brocade Communications Systems, Inc. * (a) - -
C.H. Robinson Worldwide, Inc. (a) 102,800 5,454
CACI International, Inc., Class A * (a) 60,000 2,822
Cadence Design Systems, Inc. * (a) 319,300 6,034
CapitalSource, Inc. (a) 240,400 6,681
Carters, Inc. * (a) 218,000 5,537
Children's Place Retail Stores, Inc. * 71,500 3,876
Cisco Systems, Inc. * - -
Coach, Inc. * 89,600 4,109
Cognizant Technology Solutions Corp. * 42,200 3,599
Coldwater Creek, Inc. * (a) 227,700 4,247
Comcast Corp., Class A * - -
Commscope, Inc. * - -
Community Health Systems, Inc. * 100,900 3,607
Complete Production Services, Inc. * (a) 116,504 2,315
Compuware Corp. * - -
Corporate Executive Board Co. (a) 75,200 6,823
Covance, Inc. * 82,600 5,093
Coventry Health Care, Inc. * 83,500 4,304
Cytyc Corp. * 222,100 6,423
DaVita, Inc. * 113,800 6,213
Dell, Inc. * - -
Diebold, Inc. - -
Digital River, Inc. * (a) - -
E*TRADE Financial Corp. * 222,100 5,415
Electronic Arts, Inc. * 99,100 4,955
Express Scripts, Inc. * 93,800 6,520
FormFactor, Inc. * 118,400 4,813
Gardner Denver, Inc. * 138,600 5,343
GEN-Probe, Inc. * (a) 78,900 4,081
General Cable Corp. * (a) - -
Getty Images, Inc. * (a) - -
GlobalSantaFe Corp. 100,000 5,801
Guess?, Inc. * 98,150 7,077
Herbalife Ltd. * 139,500 4,576
IDEX Corp. 59,600 3,093
IBM Corp. - -
Intersil Corp., Class A - -
Intuit, Inc. * 60,000 1,887
ITT Industries, Inc. 90,800 5,416
J.C. Penney Co., Inc. 68,100 5,532
Jones Lang LaSalle, Inc. 56,900 5,946
Joy Global, Inc. 134,150 6,234
Laureate Education, Inc. * (a) 82,318 4,967
Lexmark International, Inc. * - -
Manpower, Inc. 89,900 6,556
Marriott International, Inc., Class A 156,000 7,510
Martin Marietta Materials, Inc. 53,200 6,141
MEMC Electronic Materials, Inc. * 136,800 7,169
Mentor Graphics Corp. * (a) - -
MICROS Systems, Inc. * 73,400 4,132
Microsoft Corp. - -
Microstrategy, Inc., Class A * - -
National Semiconductor Corp. 217,500 5,031 (a)
National-Oilwell Varco, Inc. * 109,200 6,622
Network Appliance, Inc. * 92,700 3,486
NII Holdings, Inc. * (a) 126,600 9,343
NovAtel, Inc. * - -
NVIDIA Corp. * 52,400 1,606
Pharmaceutical Product Development, Inc. 149,600 5,161
Polo Ralph Lauren Corp. 64,200 5,268
Polycom, Inc. * - -
Precision Castparts Corp. 108,300 9,627
ProAssurance Corp. * 107,000 5,435
Psychiatric Solutions, Inc. * 49,000 1,908
Respironics, Inc. * 172,500 7,349
Scientific Games Corp., Class A * (a) 162,400 5,041
Silicon Image, Inc. * - -
Spirit Aerosystems Holdings, Inc. * 140,000 4,288
Starwood Hotels & Resorts Worldwide, Inc. 73,400 4,593
Stericycle, Inc. * (a) 71,600 5,513
Sykes Enterprises, Inc. * - -
Symantec Corp. * (a) - -
Synopsys, Inc. * - -
T. Rowe Price Group, Inc. (a) 150,500 7,222
Taiwan Semiconductor Manufacturing Co., Ltd. - -
Thermo Electron Corp. * 143,100 6,847
Tibco Software, Inc. * - -
Time Warner Telecom, Inc., Class A * (a) 339,493 7,903
Tractor Supply Co. * (a) 91,800 4,620
TTM Technologies, Inc. * - -
Ultra Petroleum Corp. * 63,300 3,304
Urban Outfitters, Inc. * (a) 146,800 3,582
Valueclick, Inc. * - -
VCA Antech, Inc. * 156,000 5,245
VeriSign, Inc. * - -
WESCO International, Inc. * 110,100 6,685
Western Digital Corp. * 185,600 3,638
Western Union Corp. - -
Xerox Corp. * - -
XTO Energy, Inc. 87,200 4,401
--------
TOTAL COMMON STOCKS 371,413 98.5%
INVESTMENTS IN AFFILIATES (b) SHARES/ PRINCIPAL VALUE
--------- --------
Fifth Third Institutional Money Market Fund 8,024,374 8,024
--------
TOTAL INVESTMENTS IN AFFILIATES 8,024 2.1%
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds $ 82,392 82,392
--------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING 82,392 21.8%
-------- ------
TOTAL INVESTMENTS 461,829 122.4%
LIABILITIES IN EXCESS OF OTHER ASSETS (84,547) -22.4%
-------- ------
NET ASSETS $ 377,282 100.0%
======== ======
TOTAL INVESTMENTS COST + $ 371,158
========
- ---------------------------------------------
For federal income tax purposes:
Total investments cost $ 372,254
========
Gross unrealized appreciation $ 95,187
Gross unrealized depreciation (5,612)
--------
Net unrealized appreciation (depreciation) $ 89,575
========
TECHNOLOGY FUND
------- ------- ------
SHARES VALUE %
------- ------- ------
COMMON STOCKS
Abercrombie & Fitch Co., Class A (a) - $ -
Accenture Ltd., Class A 50,000 1,888
Advanced Energy Industries, Inc. * 82,500 1,430
Affiliated Managers Group, Inc. * (a) - -
Akamai Technologies, Inc. * (a) - -
Allegheny Technologies, Inc. - -
Allergan, Inc. - -
Alliance Data Systems Corp. * 23,000 1,562
Amdocs Ltd. * - -
Amkor Technology, Inc. * (a) 180,000 1,895
Arris Group, Inc. * 101,000 1,436
Atmel Corp. * 219,500 1,313
Autodesk, Inc. * - -
BEA Systems, Inc. * 160,000 1,973
BMC Software, Inc. * 43,500 1,496
Brocade Communications Systems, Inc. * (a) 200,000 1,716
C.H. Robinson Worldwide, Inc. (a) - -
CACI International, Inc., Class A * (a) - -
Cadence Design Systems, Inc. * (a) 50,000 945
CapitalSource, Inc. (a) - -
Carters, Inc. * (a) - -
Children's Place Retail Stores, Inc. * - -
Cisco Systems, Inc. * 50,000 1,330
Coach, Inc. * - -
Cognizant Technology Solutions Corp. * - -
Coldwater Creek, Inc. * (a) - -
Comcast Corp., Class A * 47,500 2,106
Commscope, Inc. * 60,000 1,938
Community Health Systems, Inc. * - -
Complete Production Services, Inc. * (a) - -
Compuware Corp. * 143,500 1,287
Corporate Executive Board Co. (a) - -
Covance, Inc. * - -
Coventry Health Care, Inc. * - -
Cytyc Corp. * - -
DaVita, Inc. * - -
Dell, Inc. * 82,500 2,001
Diebold, Inc. 19,900 922
Digital River, Inc. * (a) 20,000 1,024
E*TRADE Financial Corp. * - -
Electronic Arts, Inc. * 20,000 1,000
Express Scripts, Inc. * - -
FormFactor, Inc. * - -
Gardner Denver, Inc. * - -
GEN-Probe, Inc. * (a) - -
General Cable Corp. * (a) 25,000 1,078
Getty Images, Inc. * (a) 30,000 1,477
GlobalSantaFe Corp. - -
Guess?, Inc. * - -
Herbalife Ltd. * - -
IDEX Corp. - -
IBM Corp. 15,000 1,487
Intersil Corp., Class A 50,000 1,178
Intuit, Inc. * 30,000 944
ITT Industries, Inc. - -
J.C. Penney Co., Inc. - -
Jones Lang LaSalle, Inc. - -
Joy Global, Inc. - -
Laureate Education, Inc. * (a) - -
Lexmark International, Inc. * 25,000 1,576
Manpower, Inc. - -
Marriott International, Inc., Class A - -
Martin Marietta Materials, Inc. - -
MEMC Electronic Materials, Inc. * - -
Mentor Graphics Corp. * (a) 50,000 930
MICROS Systems, Inc. * - -
Microsoft Corp. 50,000 1,543
Microstrategy, Inc., Class A * 11,500 1,396
National Semiconductor Corp. 32,500 752
National-Oilwell Varco, Inc. * - -
Network Appliance, Inc. * - -
NII Holdings, Inc. * (a) - -
NovAtel, Inc. * 21,000 866
NVIDIA Corp. * - -
Pharmaceutical Product Development, Inc. - -
Polo Ralph Lauren Corp. - -
Polycom, Inc. * 40,000 1,345
Precision Castparts Corp. - -
ProAssurance Corp. * - -
Psychiatric Solutions, Inc. * - -
Respironics, Inc. * - -
Scientific Games Corp., Class A * (a) - -
Silicon Image, Inc. * 76,500 925
Spirit Aerosystems Holdings, Inc. * - -
Starwood Hotels & Resorts Worldwide, Inc. - -
Stericycle, Inc. * (a) - -
Sykes Enterprises, Inc. * 84,500 1,235
Symantec Corp. * (a) 76,000 1,346
Synopsys, Inc. * 40,000 1,064
T. Rowe Price Group, Inc. (a) - -
Taiwan Semiconductor Manufacturing Co., Ltd. 215,000 2,345
Thermo Electron Corp. * - -
Tibco Software, Inc. * 116,500 1,081
Time Warner Telecom, Inc., Class A * (a) - -
Tractor Supply Co. * (a) - -
TTM Technologies, Inc. * 92,500 991
Ultra Petroleum Corp. * - -
Urban Outfitters, Inc. * (a) - -
Valueclick, Inc. * 47,500 1,212
VCA Antech, Inc. * - -
VeriSign, Inc. * 75,000 1,792
WESCO International, Inc. * - -
Western Digital Corp. * - -
Western Union Corp. 92,500 2,066
Xerox Corp. * 65,000 1,118
XTO Energy, Inc. - -
--------
TOTAL COMMON STOCKS 57,009 99.6%
INVESTMENTS IN AFFILIATES (b) SHARES/ PRINCIPAL VALUE
--------- --------
Fifth Third Institutional Money Market Fund 1,113,529 1,114
--------
TOTAL INVESTMENTS IN AFFILIATES 1,114 1.9%
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds $ 8,589 8,589
--------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING 8,589 15.0%
-------- ------
TOTAL INVESTMENTS 66,712 116.5%
LIABILITIES IN EXCESS OF OTHER ASSETS (9,444) -16.5%
-------- ------
NET ASSETS $ 57,268 100.0%
======== ======
TOTAL INVESTMENTS COST + $65,144
========
- ---------------------------------------------
For federal income tax purposes:
Total investments cost $ 65,422
========
Gross unrealized appreciation $2,749
Gross unrealized depreciation (1,459)
--------
Net unrealized appreciation (depreciation) $1,290
========
PRO FORMA
ADJUSTMENTS PRO FORMA FUND
------- ------- ------- ------- ------
SHARES VALUE SHARES VALUE %
------- ------- ------- ------- ------
COMMON STOCKS
Abercrombie & Fitch Co., Class A (a) - $ - 94,800 $ 7,541
Accenture Ltd., Class A 50,000 1,888
Advanced Energy Industries, Inc. * 82,500 1,430
Affiliated Managers Group, Inc. * (a) 57,800 6,439
Akamai Technologies, Inc. * (a) 68,200 3,831
Allegheny Technologies, Inc. 76,200 7,886
Allergan, Inc. 31,700 3,700
Alliance Data Systems Corp. * 121,200 8,233
Amdocs Ltd. * 171,500 5,948
Amkor Technology, Inc. * (a) 180,000 1,895
Arris Group, Inc. * 101,000 1,436
Atmel Corp. * 219,500 1,313
Autodesk, Inc. * 123,000 5,378
BEA Systems, Inc. * 160,000 1,973
BMC Software, Inc. * 43,500 1,496
Brocade Communications Systems, Inc. * (a) 200,000 1,716
C.H. Robinson Worldwide, Inc. (a) 102,800 5,454
CACI International, Inc., Class A * (a) 60,000 2,822
Cadence Design Systems, Inc. * (a) 369,300 6,979
CapitalSource, Inc. (a) 240,400 6,681
Carters, Inc. * (a) 218,000 5,537
Children's Place Retail Stores, Inc. * 71,500 3,876
Cisco Systems, Inc. * 50,000 1,330
Coach, Inc. * 89,600 4,109
Cognizant Technology Solutions Corp. * 42,200 3,599
Coldwater Creek, Inc. * (a) 227,700 4,247
Comcast Corp., Class A * 47,500 2,106
Commscope, Inc. * 60,000 1,938
Community Health Systems, Inc. * 100,900 3,607
Complete Production Services, Inc. * (a) 116,504 2,315
Compuware Corp. * 143,500 1,287
Corporate Executive Board Co. (a) 75,200 6,823
Covance, Inc. * 82,600 5,093
Coventry Health Care, Inc. * 83,500 4,304
Cytyc Corp. * 222,100 6,423
DaVita, Inc. * 113,800 6,213
Dell, Inc. * 82,500 2,001
Diebold, Inc. 19,900 922
Digital River, Inc. * (a) 20,000 1,024
E*TRADE Financial Corp. * 222,100 5,415
Electronic Arts, Inc. * 119,100 5,955
Express Scripts, Inc. * 93,800 6,520
FormFactor, Inc. * 118,400 4,813
Gardner Denver, Inc. * 138,600 5,343
GEN-Probe, Inc. * (a) 78,900 4,081
General Cable Corp. * (a) 25,000 1,078
Getty Images, Inc. * (a) 30,000 1,477
GlobalSantaFe Corp. 100,000 5,801
Guess?, Inc. * 98,150 7,077
Herbalife Ltd. * 139,500 4,576
IDEX Corp. 59,600 3,093
IBM Corp. 15,000 1,487
Intersil Corp., Class A 50,000 1,178
Intuit, Inc. * 90,000 2,831
ITT Industries, Inc. 90,800 5,416
J.C. Penney Co., Inc. 68,100 5,532
Jones Lang LaSalle, Inc. 56,900 5,946
Joy Global, Inc. 134,150 6,234
Laureate Education, Inc. * (a) 82,318 4,967
Lexmark International, Inc. * 25,000 1,576
Manpower, Inc. 89,900 6,556
Marriott International, Inc., Class A 156,000 7,510
Martin Marietta Materials, Inc. 53,200 6,141
MEMC Electronic Materials, Inc. * 136,800 7,169
Mentor Graphics Corp. * (a) 50,000 930
MICROS Systems, Inc. * 73,400 4,132
Microsoft Corp. 50,000 1,543
Microstrategy, Inc., Class A * 11,500 1,396
National Semiconductor Corp. 250,000 5,783
National-Oilwell Varco, Inc. * 109,200 6,622
Network Appliance, Inc. * 92,700 3,486
NII Holdings, Inc. * (a) 126,600 9,343
NovAtel, Inc. * 21,000 866
NVIDIA Corp. * 52,400 1,606
Pharmaceutical Product Development, Inc. 149,600 5,161
Polo Ralph Lauren Corp. 64,200 5,268
Polycom, Inc. * 40,000 1,345
Precision Castparts Corp. 108,300 9,627
ProAssurance Corp. * 107,000 5,435
Psychiatric Solutions, Inc. * 49,000 1,908
Respironics, Inc. * 172,500 7,349
Scientific Games Corp., Class A * (a) 162,400 5,041
Silicon Image, Inc. * 76,500 925
Spirit Aerosystems Holdings, Inc. * 140,000 4,288
Starwood Hotels & Resorts Worldwide, Inc. 73,400 4,593
Stericycle, Inc. * (a) 71,600 5,513
Sykes Enterprises, Inc. * 84,500 1,235
Symantec Corp. * (a) 76,000 1,346
Synopsys, Inc. * 40,000 1,064
T. Rowe Price Group, Inc. (a) 150,500 7,222
Taiwan Semiconductor Manufacturing Co., Ltd. 215,000 2,345
Thermo Electron Corp. * 143,100 6,847
Tibco Software, Inc. * 116,500 1,081
Time Warner Telecom, Inc., Class A * (a) 339,493 7,903
Tractor Supply Co. * (a) 91,800 4,620
TTM Technologies, Inc. * 92,500 991
Ultra Petroleum Corp. * 63,300 3,304
Urban Outfitters, Inc. * (a) 146,800 3,582
Valueclick, Inc. * 47,500 1,212
VCA Antech, Inc. * 156,000 5,245
VeriSign, Inc. * 75,000 1,792
WESCO International, Inc. * 110,100 6,685
Western Digital Corp. * 185,600 3,638
Western Union Corp. 92,500 2,066
Xerox Corp. * 65,000 1,118
XTO Energy, Inc. 87,200 4,401
---------
TOTAL COMMON STOCKS 428,422 98.6%
INVESTMENTS IN AFFILIATES (b) SHARES/ PRINCIPAL VALUE
--------- ---------
Fifth Third Institutional Money Market Fund 9,137,903 9,138
--------
TOTAL INVESTMENTS IN AFFILIATES 9,138 2.1%
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds $90,981 90,981
--------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING 90,981 20.9%
-------- ------
TOTAL INVESTMENTS - 528,541 121.6%
LIABILITIES IN EXCESS OF OTHER ASSETS - (93,991) -21.6%
------ -------- ------
NET ASSETS $ - $ 434,550 100.0%
====== ======== ======
TOTAL INVESTMENTS COST + $ - $ 436,302
====== ========
- ---------------------------------------------
For federal income tax purposes:
Total investments cost $ - $ 437,676
====== ========
Gross unrealized appreciation $ - $97,936
Gross unrealized depreciation - (7,071)
------ --------
Net unrealized appreciation (depreciation) $ - $90,865
======= ========
* Non-income producing security.
(a) All or part of this security was on loan at January 31, 2007.
(b) Investment is in Institutional Shares of indicated fund.
+ For financial reporting purposes.
See notes to pro forma financial statements.
As of January 31, 2007, the securities on loan information is as follows:
MARKET
OPEN VALUE OF AVERAGE
CASH COLLATERAL LOANED LOAN
COLLATERAL COMMITMENTS SECURITIES OUTSTANDING **
---------- ----------- ---------- --------------
MID CAP GROWTH FUND $ 82,392 $ 1,643 $ 80,130 $ 100,086
TECHNOLOGY FUND 8,589 2 8,353 10,021
---------- ----------- ---------- ---------------
PRO FORMA FUND $ 90,981 $ 1,645 $ 88,483 $ 110,107
** For periods when securities lending was utilized.
The cash collateral received by all the funds of Fifth Third Funds at January
31, 2007, was pooled and invested in the following:
SECURITY TYPE SECURITY NAME VALUE RATE MATURITY DATE
- ---------------------- -------------------------------- -------- ------ -------------
Floating Rate Security American Express Bank $ 35,000 5.29% 11/20/07
Floating Rate Security Bank of New York Co., Inc. 40,000 5.31% 2/11/08
Floating Rate Security BMW 30,000 5.30% 2/5/08
Floating Rate Security Canadian Imperial Bank NY 20,000 5.30% 1/24/08
Floating Rate Security Florida Heart Group 8,595 5.32% 4/1/14
Floating Rate Security General Electric Capital Corp. 7,702 5.45% 7/9/07
Floating Rate Security Guiding Light Church 10,700 5.32% 3/1/25
Floating Rate Security IBM Corp. 35,000 5.31% 2/8/08
Floating Rate Security Lehman 10,002 5.37% 5/31/07
Floating Rate Security Merrill Lynch 30,000 5.36% 5/29/07
Floating Rate Security Morgan Stanley 10,000 5.34% 2/4/08
Floating Rate Security Morgan Stanley 5,000 5.34% 2/4/08
Floating Rate Security Morgan Stanley 25,000 5.38% 2/4/08
Floating Rate Security National Australia Bank 25,000 5.29% 2/7/08
Repurchase Agreement Barclays Capital Markets 109,920 5.25% 2/1/07
Repurchase Agreement Deutsche Bank Securities, Inc. 58,458 5.26% 2/1/07
The investment concentrations for these funds as a percentage of net assets, by
industry, as of January 31, 2007, were as follows:
MID CAP
GROWTH TECHNOLOGY PRO FORMA
FUND FUND FUND
------- ------- -------
Advertising 0.0% 2.6% 0.3%
Apparel 5.8% 0.0% 5.0%
Banks 1.8% 0.0% 1.6%
Cash Equivalents 21.8% 15.0% 20.9%
Commercial Services 7.9% 9.6% 8.1%
Computers 5.2% 20.7% 7.1%
Distribution/Wholesale 1.8% 0.0% 1.6%
Diversified Financial Services 5.1% 0.0% 4.4%
Electrical Components & Equipment 0.0% 4.4% 0.6%
Electronics 3.7% 3.2% 3.6%
Entertainment 1.3% 0.0% 1.1%
Environmental Control 1.5% 0.0% 1.3%
Healthcare-Products 6.4% 0.0% 5.6%
Healthcare-Services 4.0% 0.0% 3.5%
Insurance 1.4% 0.0% 1.2%
Internet 1.0% 11.3% 2.4%
Investment Companies 2.1% 1.9% 2.1%
Iron/Steel 2.1% 0.0% 1.8%
Lodging 3.2% 0.0% 2.8%
Machinery-Construction & Mining 2.5% 0.0% 2.2%
Machinery-Diversified 1.4% 0.0% 1.2%
Media 0.0% 3.7% 0.5%
Metal Fabricate/Hardware 2.6% 0.0% 2.3%
Miscellaneous Manufacturing 3.1% 0.0% 2.7%
Office/Business Equipment 0.0% 2.0% 0.3%
Oil & Gas 4.2% 0.0% 3.6%
Oil & Gas Services 1.8% 0.0% 1.6%
Pharmaceuticals 5.3% 0.0% 4.6%
Real Estate 1.6% 0.0% 1.4%
Retail 7.8% 0.0% 6.8%
Semiconductors 3.0% 14.7% 4.5%
Software 4.3% 16.8% 5.9%
Sovereign 0.0% 0.0% 0.0%
Telecommunications 6.1% 10.6% 6.7%
Transportation 2.6% 0.0% 2.3%
------- ------- -------
122.4% 116.5% 121.6%
======= ======= =======
PRO FORMA COMBINED
SCHEDULES OF PORTFOLIO INVESTMENTS
JANUARY 31, 2007 (UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARES)
PRIME MONEY MARKET FUND
------------- ------------- ---------
PRINCIPAL Value %
--------- ------- ------
CERTIFICATES OF DEPOSIT
Abbey National, 5.37%,, 6/29/07 * $ 10,000 $ 10,002
BNP Paribas, 5.33%, 3/16/07 7,000 7,000
BNP Paribas, 5.26%, 6/8/07 10,000 10,000
Branch Banking & Trust, 5.29%, 7/3/07 10,000 10,000
Citibank, 5.31%, 4/9/07 10,000 10,000
Credit Suisse First Boston, 5.36%, 4/24/07 * 14,150 14,152
Depfa Bank PLC, 5.32%, 2/28/07 15,000 15,000
Natexis Banques Populaires, 5.35%, 2/9/07 * 10,000 10,000
Natexis Banques Populaires, 5.55%, 6/18/2007 10,000 10,002
Natexis Banques Populaires, 5.34%, 8/7/07 * 15,000 15,000
Societe Generale, 5.43%, 2/20/07 10,000 10,000
SunTrust Bank, 5.29%, 10/29/07 * 5,000 5,000
-------
TOTAL CERTIFICATES OF DEPOSIT 126,156 11.1%
COMMERCIAL PAPER
Abbey National, 5.33%, 6/1/07 ** 10,000 9,829
Allied Irish Banks of North America,
5.44%, 2/28/07 ** (b) 5,000 4,980
Amsterdam Funding Corp., 5.41%, 2/5/07 ** 5,000 4,997
Bank of America Corp., 5.39%, 3/5/07 ** 10,000 9,954
Bank of America Corp., 5.49%, 4/27/07 ** 4,700 4,642
Barclays U.S. Funding, 5.49%, 3/5/07 ** 8,600 8,560
Barclays U.S. Funding, 5.39%, 3/14/07 ** 10,000 9,940
BNP Paribas, 5.40%, 4/11/07 ** 10,000 9,900
BNP Paribas, 5.32%, 5/21/07 16,000 16,000
CRC Funding LLC, 5.35%, 2/21/07 ** 15,000 14,956
Depfa Bank PLC, 5.41%, 5/1/07 ** (b) 4,000 3,949
Falcon Asset Securitization, 5.49%, 2/8/07 ** 10,900 10,889
General Electric Capital Corp., 5.40%, 6/27/07 ** 15,000 14,683
HBOS Treasury Services PLC, 5.50%, 3/14/07 ** 15,805 15,711
HBOS Treasury Services PLC, 5.40%, 7/18/07 ** 10,000 9,759
MetLife Funding, Inc., 5.36%, 2/5/07 ** 10,000 9,994
Michigan State, 5.41%, 10/4/07 5,770 5,770
Morgan Stanley, 5.39%, 3/8/07 ** 10,000 9,949
Morgan Stanley, 5.38%, 6/14/07 ** 10,000 9,809
Park Avenue Receivables Co., 5.36%, 2/7/07 ** 15,000 14,987
Park Avenue Receivables Co., 5.50%, 2/20/07 ** 15,000 14,958
Sheffield Receivables Corp., 5.34%, 2/5/07 ** 20,000 19,989
Societe Generale, 5.40%, 2/16/07 ** 8,900 8,881
Societe Generale, 5.41%, 3/1/07 ** 5,900 5,876
Societe Generale, 5.40%, 5/10/07 ** 15,000 14,786
Societe Generale, 5.49%, 6/11/07 ** 3,500 3,434
UBS Finance, Inc., 5.49%, 4/2/07 ** 5,900 5,848
Windmill Funding Corp., 5.50%, 2/13/07 ** 8,000 7,986
-------
TOTAL COMMERCIAL PAPER 281,016 24.7%
CORPORATE BONDS
Bank of America Corp., 5.25%, 2/1/07 7,000 7,000
Bear Stearns & Co., Inc., 5.51%, 2/15/07 * 10,000 10,001
Bear Stearns & Co., Inc., 7.80%, 8/15/07 6,000 6,073
Bear Stearns & Co., Inc., 5.30%, 1/9/08 * 12,000 12,000
Bear Stearns & Co., Inc., 5.40%, 2/5/08 * 20,000 19,999
Citigroup, Inc., 3.50%, 2/1/08 5,000 4,911
Credit Suisse First Boston, 5.40%, 12/21/07 12,000 12,000
Credit Suisse First Boston, 4.63%, 1/15/08 7,000 6,952
Florida Hurricane Catastrophe, 5.33%, 2/15/08 * 12,000 12,000
General Electric Capital Corp., 5.00%, 2/15/07 5,000 4,999
General Electric Capital Corp., 3.45%, 7/16/07 10,705 10,615
General Electric Capital Corp., 3.50%, 8/15/2007 4,000 3,962
Goldman Sachs Group, Inc., 5.48%, 5/11/07 * 15,000 15,005
HSBC Finance Corp., 5.31%, 2/6/08 * 10,000 10,000
IBM Corp., 6.45%, 8/1/07 2,010 2,021
JP Morgan Chase & Co., 5.35%, 3/1/07 4,000 3,999
Lehman Brothers Holdings, 8.25%, 6/15/2007 13,727 13,865
Merrill Lynch & Co., 5.36%, 2/1/07 3,190 3,190
Merrill Lynch & Co., 5.57%, 7/11/07 * 15,000 15,000
Merrill Lynch & Co., 4.25%, 9/14/07 13,405 13,315
Morgan Stanley, 6.88%, 3/1/07 5,000 5,006
Morgan Stanley, 5.49%, 7/27/07 * 10,000 10,009
Morgan Stanley, 5.38%, 2/4/08 * 15,000 15,000
SunTrust Bank, 5.43%, 5/17/07 * 10,000 10,003
U.S. Bank, 2.87%, 2/1/07 7,300 7,300
UBS Finance, Inc., 5.40%, 12/14/07 6,000 6,000
Wachovia Corp., 5.44%, 7/20/07 * 5,000 5,003
Wachovia Corp., 4.85%, 7/30/07 11,395 11,363
Wells Fargo & Co., 5.31%, 2/15/08 * 25,000 24,999
-------
TOTAL CORPORATE BONDS 281,590 24.7%
DEMAND NOTES
Beavercreek Enterprises, 5.36%,
3/2/20, (LOC: National City Bank) * 4,055 4,055
Buckeye Corrugated, Inc., 5.37%,
10/1/17, (LOC: Key Bank) * (b) 5,045 5,045
Bybee Foods LLC, 5.37%, 11/1/26,
(LOC: Key Bank) * 1,600 1,600
Capital One Funding Corp., 5.33%,
10/1/14, (LOC: Bank One) * 1,899 1,899
Capital One Funding Corp., 5.33%,
7/2/18, (LOC: Bank One) * (b) 611 611
Capital One Funding Corp., 5.33%,
10/1/21, (LOC: Bank One) * (b) 900 900
Capital One Funding Corp., 5.33%,
1/4/27, (LOC: Bank One) * 3,094 3,094
Central Michigan Inns, 5.37%, 4/1/30,
(LOC: Michigan National Bank) * 1,985 1,985
CHF-ELON LLC, 5.35%, 6/1/35,
(LOC: Regions Financial Corp) * (b) 6,500 6,500
Clare at Water Tower, 5.35%, 5/15/38,
(LOC: Lasalle Bank) * 12,500 12,500
Cornerstone Funding Corp., 5.39%,
12/1/11, (LOC: SunTrust) * 7,935 7,935
Cornerstone Funding Corp., 5.39%,
9/1/25, (LOC: SunTrust) * 5,628 5,628
Harry W. Albright, Jr., 5.42%, 5/1/21,
(LOC: National Australia Bank) * 5,485 5,485
HWP Co., Ltd. Project, 5.36%,
12/3/18, (LOC: National City Bank) * (b) 4,230 4,230
Iowa 80 Group, Inc., 5.47%, 6/1/16,
(LOC: Wells Fargo) * 3,800 3,800
Jackson 2000, 5.37%, 6/1/49, (LOC:
KeyBank) * 8,905 8,905
Jefferson Land Development, 5.41%,
10/1/16, (LOC: National City Bank) * (b) 1,020 1,020
Landmark Medical LLC, 5.37%,
1/1/21, (LOC: Bank One) * 7,380 7,380
Lexington Financial Services, 5.36%,
2/1/26, (LOC: LaSalle Bank) * 8,500 8,500
Mount Carmel East Professional,
5.36%, 1/1/14, (LOC: National City) * (b) 1,500 1,500
Mr. K Enterprises, 5.52%, 9/1/16,
(LOC: National Australia Bank) * 5,750 5,750
New Belgium Brewery Co., 5.50%,
7/1/15, (LOC: KeyBank) * 2,925 2,925
Northside Christian Church, 5.37%,
4/1/30, (LOC: Bank One) * 6,610 6,610
PCI Paper Conversions, Inc., 5.37%,
4/1/10, (LOC: KeyBank) * 1,650 1,650
Pittsburgh Technical Institute, 5.36%,
10/1/15, (LOC: National City Bank) * 9,735 9,735
Revenue Bond CTF Series Trust,
5.52%, 6/1/24, (LOC: AIG) * (b) 3,740 3,740
Royal Town Center LLC Project,
5.37%, 10/1/47, (LOC: Comerica Bank) * (b) 5,095 5,095
Saint Andrew United, 5.35%, 7/1/29,
(LOC: Wachovia Bank) * 12,385 12,385
SDK Cameron LLC, 5.37%, 10/1/35,
(LOC: Comerica Bank) * (b) 3,185 3,185
Second & Main, Ltd., 5.36%, 8/1/11,
(LOC: National City Bank) * 1,750 1,750
Secor Realty, Inc., 5.36%, 4/1/20,
(LOC: National City Bank) * 7,760 7,760
SGS Tool Co., 5.36%, 12/1/12, (LOC:
Bank One) * 4,175 4,175
Zeigler Realty LLC, 5.36%, 9/1/26,
(LOC: National City Bank) * 1,320 1,320
-------
TOTAL DEMAND NOTES 158,652 14.0%
MUNICIPAL BONDS
ALASKA
Four Dam Pool Electric Revenue, 5.34%, 7/1/26 * 3,480 3,480 0.3%
CALIFORNIA
Riverside County, 5.36%, 11/1/20 * 6,800 6,800
Sacramento County, 5.36%, 7/1/22 * 32,430 32,430
-------
39,230 3.4%
COLORADO
Housing & Finance Authority,
Multifamily, Class II-B-1, 5.36%, 10/1/44 * 14,000 14,000
Pueblo Housing Authority Purchasing
Revenue, 5.50%, 12/1/18 * (b) 1,735 1,735
-------
15,735 1.4%
GEORGIA
Columbus Development Authority,
Industrial Revenue, Litho-Krome
Project, 5.35%, 8/1/22 * 10,125 10,125 0.9%
IOWA
Dallas County Industrial Development
Revenue, Sioux City Brick & Tile,
5.37%, 9/1/21 * 6,980 6,980 0.6%
KENTUCKY
Bardstown Industrial Revenue, 5.42%, 6/1/24 * 7,950 7,950
Webster County Industrial Revenue,
Green River Project, 5.33%, 11/1/24 * 7,400 7,400
-------
15,350 1.4%
MICHIGAN
Commerce Charter Township,
Downtown Development, 5.34%, 10/1/34 * 20,000 20,000 1.8%
NEW YORK
Housing Development Corp.,
Multifamily Rental Housing Revenue, 5.30%, 6/1/33 * 12,455 12,455 1.1%
NORTH CAROLINA
Roman Catholic Diocese, Series A, 5.37%, 6/1/18 * 15,225 15,225 1.3%
OHIO
Cleveland-Cuyahoga County, Port
Authority Revenue, CBT Project, 5.37%, 6/1/31 * 4,485 4,485 0.4%
PENNSYLVANIA
Allegheny County, Industrial
Development Authority Revenue, 5.36%, 5/1/15 * 2,570 2,570 0.2%
UTAH
Housing Corp., Multi Family Revenue,
5.52%, 1/1/22 * 2,060 2,060
Telecommunication Open
Infrastructure Agency, 5.35%, 7/15/26 * 8,000 8,000
-------
10,060 0.9%
WASHINGTON
Housing Finance Community,
Multifamily Revenue, Monticello Park
Project, 5.33%, 9/1/34 * 3,815 3,815
State Housing Finance Community,
Multi Family Revenue, Eaglepointe
Apartments-B, 5.52%, 7/1/28 * 1,610 1,610
-------
5,425 0.5%
-------
TOTAL MUNICIPAL BONDS 161,120 14.2%
U.S. GOVERNMENT AGENCIES FEDERAL FARM CREDIT BANK
5.31%, 3/16/07 ** - -
5.17%, 4/27/07 * - -
2.63%, 9/17/07 - -
-------
- 0.0%
FEDERAL HOME LOAN BANK
5.20%, 2/1/07 ** - -
5.29%, 2/2/07 ** - -
5.24%, 2/7/07 ** - -
5.23%, 2/8/07 ** - -
5.23%, 2/9/07 ** - -
5.23%, 2/12/07 ** - -
5.24%, 2/14/07 ** - -
2.88%, 2/15/07 - -
4.88%, 2/15/07 - -
2.63%, 2/16/07 - -
3.63%, 2/16/07 - -
5.26%, 2/16/07 ** - -
5.29%, 2/21/07 ** - -
5.23%, 2/23/07 ** - -
5.29%, 2/28/07 ** - -
4.88%, 3/1/07 - -
3.75%, 3/7/07 - -
5.30%, 3/9/07 ** - -
3.14%, 3/14/07 - -
5.27%, 3/14/07 ** - -
5.28%, 3/16/07 ** - -
2.45%, 3/23/07 - -
4.00%, 3/30/07 - -
5.22%, 4/4/07 * - -
4.25%, 4/16/07 - -
3.50%, 5/15/07 - -
4.88%, 5/15/07 - -
4.00%, 6/13/07 - -
5.32%, 6/14/07 * - -
5.25%, 6/18/07 - -
5.22%, 7/6/07 * - -
4.00%, 7/13/07 - -
4.63%, 7/18/07 - -
4.25%, 8/8/07 - -
5.55%, 8/8/07 - -
5.25%, 8/10/07 - -
3.13%, 8/15/07 - -
3.75%, 8/15/07 - -
3.38%, 9/14/07 - -
5.25%, 10/3/07 - -
5.26%, 11/1/07 - -
5.37%, 11/15/07 * - -
5.20%, 1/10/08 * - -
-------
- 0.0%
FREDDIE MAC
4.85%, 2/27/07 5,000 5,000 0.4%
-------
TOTAL U.S. GOVERNMENT AGENCIES 5,000 0.4%
REPURCHASE AGREEMENTS Deutsche Bank Repo, 5.26%, 2/1/07, (Proceeds at maturity,
$70,010, Collateralized by various U.S. Government Agency securities,
5.09%-6.38%, 6/22/07-5/12/20,
value $70,581) 70,000 70,000
UBS Investment Bank, 5.26%, 2/1/07,
(Proceeds at maturity, $47,763,
Collateralized by various U.S.
Government Agency securities, 0.00%,
4/20/07-11/29/19, value $48,714) 47,756 47,756
-------
TOTAL REPURCHASE AGREEMENTS 117,756 10.4%
SHARES VALUE
------- -------
MONEY MARKETS
AIM STIT Government Tax Advantage Fund - -
AIM STIT Liquid Assets Portfolio 1,212,655 1,213
Goldman Sachs Financial Square Federal Fund - -
Goldman Sachs Financial Square Prime Obligations Fund 1,200,757 1,201
-------
TOTAL MONEY MARKETS 2,414 0.2%
------- ------
TOTAL INVESTMENTS (a) 1,133,704 99.7%
OTHER ASSETS IN EXCESS OF LIABILITIES 2,942 0.3%
-------
NET ASSETS $ 1,136,646 100.0%
========== ======
TOTAL INVESTMENTS COST (a) $ 1,133,704
==========
GOVERNMENT MONEY MARKET FUND
---------- ---------- ----------
PRINCIPAL VALUE %
--------- ------- ------
CERTIFICATES OF DEPOSIT
Abbey National, 5.37%,, 6/29/07 * $ - $ -
BNP Paribas, 5.33%, 3/16/07 - -
BNP Paribas, 5.26%, 6/8/07 - -
Branch Banking & Trust, 5.29%, 7/3/07 - -
Citibank, 5.31%, 4/9/07 - -
Credit Suisse First Boston, 5.36%, 4/24/07 * - -
Depfa Bank PLC, 5.32%, 2/28/07 - -
Natexis Banques Populaires, 5.35%, 2/9/07 * - -
Natexis Banques Populaires, 5.55%, 6/18/2007 - -
Natexis Banques Populaires, 5.34%, 8/7/07 * - -
Societe Generale, 5.43%, 2/20/07 - -
SunTrust Bank, 5.29%, 10/29/07 * - -
-------
TOTAL CERTIFICATES OF DEPOSIT - 0.0%
COMMERCIAL PAPER
Abbey National, 5.33%, 6/1/07 ** - -
Allied Irish Banks of North America,
5.44%, 2/28/07 ** (b) - -
Amsterdam Funding Corp., 5.41%, 2/5/07 ** - -
Bank of America Corp., 5.39%, 3/5/07 ** - -
Bank of America Corp., 5.49%, 4/27/07 ** - -
Barclays U.S. Funding, 5.49%, 3/5/07 ** - -
Barclays U.S. Funding, 5.39%, 3/14/07 ** - -
BNP Paribas, 5.40%, 4/11/07 ** - -
BNP Paribas, 5.32%, 5/21/07 - -
CRC Funding LLC, 5.35%, 2/21/07 ** - -
Depfa Bank PLC, 5.41%, 5/1/07 ** (b) - -
Falcon Asset Securitization, 5.49%, 2/8/07 ** - -
General Electric Capital Corp., 5.40%, 6/27/07 ** - -
HBOS Treasury Services PLC, 5.50%, 3/14/07 ** - -
HBOS Treasury Services PLC, 5.40%, 7/18/07 ** - -
MetLife Funding, Inc., 5.36%, 2/5/07 ** - -
Michigan State, 5.41%, 10/4/07 - -
Morgan Stanley, 5.39%, 3/8/07 ** - -
Morgan Stanley, 5.38%, 6/14/07 ** - -
Park Avenue Receivables Co., 5.36%, 2/7/07 ** - -
Park Avenue Receivables Co., 5.50%, 2/20/07 ** - -
Sheffield Receivables Corp., 5.34%, 2/5/07 ** - -
Societe Generale, 5.40%, 2/16/07 ** - -
Societe Generale, 5.41%, 3/1/07 ** - -
Societe Generale, 5.40%, 5/10/07 ** - -
Societe Generale, 5.49%, 6/11/07 ** - -
UBS Finance, Inc., 5.49%, 4/2/07 ** - -
Windmill Funding Corp., 5.50%, 2/13/07 ** - -
-------
TOTAL COMMERCIAL PAPER - 0.0%
CORPORATE BONDS
Bank of America Corp., 5.25%, 2/1/07 - -
Bear Stearns & Co., Inc., 5.51%, 2/15/07 * - -
Bear Stearns & Co., Inc., 7.80%, 8/15/07 - -
Bear Stearns & Co., Inc., 5.30%, 1/9/08 * - -
Bear Stearns & Co., Inc., 5.40%, 2/5/08 * - -
Citigroup, Inc., 3.50%, 2/1/08 - -
Credit Suisse First Boston, 5.40%, 12/21/07 - -
Credit Suisse First Boston, 4.63%, 1/15/08 - -
Florida Hurricane Catastrophe, 5.33%, 2/15/08 * - -
General Electric Capital Corp., 5.00%, 2/15/07 - -
General Electric Capital Corp., 3.45%, 7/16/07 - -
General Electric Capital Corp., 3.50%, 8/15/2007 - -
Goldman Sachs Group, Inc., 5.48%, 5/11/07 * - -
HSBC Finance Corp., 5.31%, 2/6/08 * - -
IBM Corp., 6.45%, 8/1/07 - -
JP Morgan Chase & Co., 5.35%, 3/1/07 - -
Lehman Brothers Holdings, 8.25%, 6/15/2007 - -
Merrill Lynch & Co., 5.36%, 2/1/07 - -
Merrill Lynch & Co., 5.57%, 7/11/07 * - -
Merrill Lynch & Co., 4.25%, 9/14/07 - -
Morgan Stanley, 6.88%, 3/1/07 - -
Morgan Stanley, 5.49%, 7/27/07 * - -
Morgan Stanley, 5.38%, 2/4/08 * - -
SunTrust Bank, 5.43%, 5/17/07 * - -
U.S. Bank, 2.87%, 2/1/07 - -
UBS Finance, Inc., 5.40%, 12/14/07 - -
Wachovia Corp., 5.44%, 7/20/07 * - -
Wachovia Corp., 4.85%, 7/30/07 - -
Wells Fargo & Co., 5.31%, 2/15/08 * - -
-------
TOTAL CORPORATE BONDS - 0.0%
DEMAND NOTES
Beavercreek Enterprises, 5.36%,
3/2/20, (LOC: National City Bank) * - -
Buckeye Corrugated, Inc., 5.37%,
10/1/17, (LOC: Key Bank) * (b) - -
Bybee Foods LLC, 5.37%, 11/1/26,
(LOC: Key Bank) * - -
Capital One Funding Corp., 5.33%,
10/1/14, (LOC: Bank One) * - -
Capital One Funding Corp., 5.33%,
7/2/18, (LOC: Bank One) * (b) - -
Capital One Funding Corp., 5.33%,
10/1/21, (LOC: Bank One) * (b) - -
Capital One Funding Corp., 5.33%,
1/4/27, (LOC: Bank One) * - -
Central Michigan Inns, 5.37%, 4/1/30,
(LOC: Michigan National Bank) * - -
CHF-ELON LLC, 5.35%, 6/1/35,
(LOC: Regions Financial Corp) * (b) - -
Clare at Water Tower, 5.35%, 5/15/38,
(LOC: Lasalle Bank) * - -
Cornerstone Funding Corp., 5.39%,
12/1/11, (LOC: SunTrust) * - -
Cornerstone Funding Corp., 5.39%,
9/1/25, (LOC: SunTrust) * - -
Harry W. Albright, Jr., 5.42%, 5/1/21,
(LOC: National Australia Bank) * - -
HWP Co., Ltd. Project, 5.36%,
12/3/18, (LOC: National City Bank) * (b) - -
Iowa 80 Group, Inc., 5.47%, 6/1/16,
(LOC: Wells Fargo) * - -
Jackson 2000, 5.37%, 6/1/49, (LOC:
KeyBank) * - -
Jefferson Land Development, 5.41%,
10/1/16, (LOC: National City Bank) * (b) - -
Landmark Medical LLC, 5.37%,
1/1/21, (LOC: Bank One) * - -
Lexington Financial Services, 5.36%,
2/1/26, (LOC: LaSalle Bank) * - -
Mount Carmel East Professional,
5.36%, 1/1/14, (LOC: National City) * (b) - -
Mr. K Enterprises, 5.52%, 9/1/16,
(LOC: National Australia Bank) * - -
New Belgium Brewery Co., 5.50%,
7/1/15, (LOC: KeyBank) * - -
Northside Christian Church, 5.37%,
4/1/30, (LOC: Bank One) * - -
PCI Paper Conversions, Inc., 5.37%,
4/1/10, (LOC: KeyBank) * - -
Pittsburgh Technical Institute, 5.36%,
10/1/15, (LOC: National City Bank) * - -
Revenue Bond CTF Series Trust,
5.52%, 6/1/24, (LOC: AIG) * (b) - -
Royal Town Center LLC Project,
5.37%, 10/1/47, (LOC: Comerica Bank) * (b) - -
Saint Andrew United, 5.35%, 7/1/29,
(LOC: Wachovia Bank) * - -
SDK Cameron LLC, 5.37%, 10/1/35,
(LOC: Comerica Bank) * (b) - -
Second & Main, Ltd., 5.36%, 8/1/11,
(LOC: National City Bank) * - -
Secor Realty, Inc., 5.36%, 4/1/20,
(LOC: National City Bank) * - -
SGS Tool Co., 5.36%, 12/1/12, (LOC:
Bank One) * - -
Zeigler Realty LLC, 5.36%, 9/1/26,
(LOC: National City Bank) * - -
-------
TOTAL DEMAND NOTES - 0.0%
MUNICIPAL BONDS
ALASKA
Four Dam Pool Electric Revenue, 5.34%, 7/1/26 * - - 0.0%
CALIFORNIA
Riverside County, 5.36%, 11/1/20 * - -
Sacramento County, 5.36%, 7/1/22 * - -
-------
- 0.0%
COLORADO
Housing & Finance Authority,
Multifamily, Class II-B-1, 5.36%, 10/1/44 * - -
Pueblo Housing Authority Purchasing
Revenue, 5.50%, 12/1/18 * (b) - -
-------
- 0.0%
GEORGIA
Columbus Development Authority,
Industrial Revenue, Litho-Krome
Project, 5.35%, 8/1/22 * - - 0.0%
IOWA
Dallas County Industrial Development
Revenue, Sioux City Brick & Tile,
5.37%, 9/1/21 * - - 0.0%
KENTUCKY
Bardstown Industrial Revenue, 5.42%, 6/1/24 * - -
Webster County Industrial Revenue,
Green River Project, 5.33%, 11/1/24 * - -
-------
- 0.0%
MICHIGAN
Commerce Charter Township,
Downtown Development, 5.34%, 10/1/34 * - - 0.0%
NEW YORK
Housing Development Corp.,
Multifamily Rental Housing Revenue, 5.30%, 6/1/33 * - - 0.0%
NORTH CAROLINA
Roman Catholic Diocese, Series A, 5.37%, 6/1/18 * - - 0.0%
OHIO
Cleveland-Cuyahoga County, Port
Authority Revenue, CBT Project, 5.37%, 6/1/31 * - - 0.0%
PENNSYLVANIA
Allegheny County, Industrial
Development Authority Revenue, 5.36%, 5/1/15 * - - 0.0%
UTAH
Housing Corp., Multi Family Revenue,
5.52%, 1/1/22 * - -
Telecommunication Open
Infrastructure Agency, 5.35%, 7/15/26 * - -
-------
- 0.0%
WASHINGTON
Housing Finance Community,
Multifamily Revenue, Monticello Park
Project, 5.33%, 9/1/34 * - -
State Housing Finance Community,
Multi Family Revenue, Eaglepointe
Apartments-B, 5.52%, 7/1/28 * - -
-------
- 0.0%
-------
TOTAL MUNICIPAL BONDS - 0.0%
U.S. GOVERNMENT AGENCIES FEDERAL FARM CREDIT BANK
5.31%, 3/16/07 ** 1,675 1,665
5.17%, 4/27/07 * 15,000 14,999
2.63%, 9/17/07 1,000 984
-------
17,648 7.9%
FEDERAL HOME LOAN BANK
5.20%, 2/1/07 ** 10,000 10,000
5.29%, 2/2/07 ** 6,130 6,129
5.24%, 2/7/07 ** 14,055 14,043
5.23%, 2/8/07 ** 4,070 4,066
5.23%, 2/9/07 ** 16,945 16,925
5.23%, 2/12/07 ** 5,500 5,491
5.24%, 2/14/07 ** 16,567 16,535
2.88%, 2/15/07 300 300
4.88%, 2/15/07 5,350 5,349
2.63%, 2/16/07 850 849
3.63%, 2/16/07 2,500 2,498
5.26%, 2/16/07 ** 6,750 6,736
5.29%, 2/21/07 ** 4,200 4,188
5.23%, 2/23/07 ** 3,675 3,663
5.29%, 2/28/07 ** 5,000 4,981
4.88%, 3/1/07 725 725
3.75%, 3/7/07 2,675 2,671
5.30%, 3/9/07 ** 2,755 2,741
3.14%, 3/14/07 5,000 4,988
5.27%, 3/14/07 ** 5,500 5,468
5.28%, 3/16/07 ** 5,000 4,969
2.45%, 3/23/07 1,350 1,345
4.00%, 3/30/07 1,575 1,572
5.22%, 4/4/07 * 10,000 10,000
4.25%, 4/16/07 9,000 8,980
3.50%, 5/15/07 3,370 3,353
4.88%, 5/15/07 1,120 1,119
4.00%, 6/13/07 1,000 995
5.32%, 6/14/07 * 10,000 10,000
5.25%, 6/18/07 1,000 1,000
5.22%, 7/6/07 * 5,000 5,000
4.00%, 7/13/07 435 433
4.63%, 7/18/07 1,500 1,496
4.25%, 8/8/07 2,200 2,188
5.55%, 8/8/07 1,175 1,175
5.25%, 8/10/07 1,000 1,000
3.13%, 8/15/07 1,000 988
3.75%, 8/15/07 1,175 1,166
3.38%, 9/14/07 1,960 1,938
5.25%, 10/3/07 1,000 1,000
5.26%, 11/1/07 1,000 1,000
5.37%, 11/15/07 * 10,000 9,999
5.20%, 1/10/08 * 9,000 8,997
-------
198,059 88.3%
FREDDIE MAC
4.85%, 2/27/07 - - 0.0%
-------
TOTAL U.S. GOVERNMENT AGENCIES 215,707 96.2%
REPURCHASE AGREEMENTS Deutsche Bank Repo, 5.26%, 2/1/07, (Proceeds at maturity,
$70,010, Collateralized by various U.S. Government Agency securities,
5.09%-6.38%, 6/22/07-5/12/20,
value $70,581) - -
UBS Investment Bank, 5.26%, 2/1/07,
(Proceeds at maturity, $47,763,
Collateralized by various U.S.
Government Agency securities, 0.00%,
4/20/07-11/29/19, value $48,714) - -
-------
TOTAL REPURCHASE AGREEMENTS 0 0.0%
SHARES VALUE
------- -------
MONEY MARKETS
AIM STIT Government Tax Advantage Fund 2,408,932 2,409
AIM STIT Liquid Assets Portfolio - -
Goldman Sachs Financial Square Federal Fund 5,921,109 5,921
Goldman Sachs Financial Square Prime Obligations Fund - -
-------
TOTAL MONEY MARKETS 8,330 3.7%
------- ------
TOTAL INVESTMENTS (a) 224,037 99.9%
OTHER ASSETS IN EXCESS OF LIABILITIES 314 0.1%
-------
NET ASSETS $ 224,351 100.0%
========== ======
TOTAL INVESTMENTS COST (a) $ 224,037
==========
PRO FORMA
ADJUSTMENTS PRO FORMA FUND
------- ------- ---------- ---------- -------
PRINCIPAL VALUE PRINCIPAL VALUE %
--------- ------- ------- ------- ------
CERTIFICATES OF DEPOSIT
Abbey National, 5.37%,, 6/29/07 * $ - $ - $10,000 $ 10,002
BNP Paribas, 5.33%, 3/16/07 7,000 7,000
BNP Paribas, 5.26%, 6/8/07 10,000 10,000
Branch Banking & Trust, 5.29%, 7/3/07 10,000 10,000
Citibank, 5.31%, 4/9/07 10,000 10,000
Credit Suisse First Boston, 5.36%, 4/24/07 * 14,150 14,152
Depfa Bank PLC, 5.32%, 2/28/07 15,000 15,000
Natexis Banques Populaires, 5.35%, 2/9/07 * 10,000 10,000
Natexis Banques Populaires, 5.55%, 6/18/2007 10,000 10,002
Natexis Banques Populaires, 5.34%, 8/7/07 * 15,000 15,000
Societe Generale, 5.43%, 2/20/07 10,000 10,000
SunTrust Bank, 5.29%, 10/29/07 * 5,000 5,000
-------
TOTAL CERTIFICATES OF DEPOSIT 126,156 9.3%
COMMERCIAL PAPER
Abbey National, 5.33%, 6/1/07 ** 10,000 9,829
Allied Irish Banks of North America,
5.44%, 2/28/07 ** (b) 5,000 4,980
Amsterdam Funding Corp., 5.41%, 2/5/07 ** 5,000 4,997
Bank of America Corp., 5.39%, 3/5/07 ** 10,000 9,954
Bank of America Corp., 5.49%, 4/27/07 ** 4,700 4,642
Barclays U.S. Funding, 5.49%, 3/5/07 ** 8,600 8,560
Barclays U.S. Funding, 5.39%, 3/14/07 ** 10,000 9,940
BNP Paribas, 5.40%, 4/11/07 ** 10,000 9,900
BNP Paribas, 5.32%, 5/21/07 16,000 16,000
CRC Funding LLC, 5.35%, 2/21/07 ** 15,000 14,956
Depfa Bank PLC, 5.41%, 5/1/07 ** (b) 4,000 3,949
Falcon Asset Securitization, 5.49%, 2/8/07 ** 10,900 10,889
General Electric Capital Corp., 5.40%, 6/27/07 ** 15,000 14,683
HBOS Treasury Services PLC, 5.50%, 3/14/07 ** 15,805 15,711
HBOS Treasury Services PLC, 5.40%, 7/18/07 ** 10,000 9,759
MetLife Funding, Inc., 5.36%, 2/5/07 ** 10,000 9,994
Michigan State, 5.41%, 10/4/07 5,770 5,770
Morgan Stanley, 5.39%, 3/8/07 ** 10,000 9,949
Morgan Stanley, 5.38%, 6/14/07 ** 10,000 9,809
Park Avenue Receivables Co., 5.36%, 2/7/07 ** 15,000 14,987
Park Avenue Receivables Co., 5.50%, 2/20/07 ** 15,000 14,958
Sheffield Receivables Corp., 5.34%, 2/5/07 ** 20,000 19,989
Societe Generale, 5.40%, 2/16/07 ** 8,900 8,881
Societe Generale, 5.41%, 3/1/07 ** 5,900 5,876
Societe Generale, 5.40%, 5/10/07 ** 15,000 14,786
Societe Generale, 5.49%, 6/11/07 ** 3,500 3,434
UBS Finance, Inc., 5.49%, 4/2/07 ** 5,900 5,848
Windmill Funding Corp., 5.50%, 2/13/07 ** 8,000 7,986
-------
TOTAL COMMERCIAL PAPER 281,016 20.6%
CORPORATE BONDS
Bank of America Corp., 5.25%, 2/1/07 7,000 7,000
Bear Stearns & Co., Inc., 5.51%, 2/15/07 * 10,000 10,001
Bear Stearns & Co., Inc., 7.80%, 8/15/07 6,000 6,073
Bear Stearns & Co., Inc., 5.30%, 1/9/08 * 12,000 12,000
Bear Stearns & Co., Inc., 5.40%, 2/5/08 * 20,000 19,999
Citigroup, Inc., 3.50%, 2/1/08 5,000 4,911
Credit Suisse First Boston, 5.40%, 12/21/07 12,000 12,000
Credit Suisse First Boston, 4.63%, 1/15/08 7,000 6,952
Florida Hurricane Catastrophe, 5.33%, 2/15/08 * 12,000 12,000
General Electric Capital Corp., 5.00%, 2/15/07 5,000 4,999
General Electric Capital Corp., 3.45%, 7/16/07 10,705 10,615
General Electric Capital Corp., 3.50%, 8/15/2007 4,000 3,962
Goldman Sachs Group, Inc., 5.48%, 5/11/07 * 15,000 15,005
HSBC Finance Corp., 5.31%, 2/6/08 * 10,000 10,000
IBM Corp., 6.45%, 8/1/07 2,010 2,021
JP Morgan Chase & Co., 5.35%, 3/1/07 4,000 3,999
Lehman Brothers Holdings, 8.25%, 6/15/2007 13,727 13,865
Merrill Lynch & Co., 5.36%, 2/1/07 3,190 3,190
Merrill Lynch & Co., 5.57%, 7/11/07 * 15,000 15,000
Merrill Lynch & Co., 4.25%, 9/14/07 13,405 13,315
Morgan Stanley, 6.88%, 3/1/07 5,000 5,006
Morgan Stanley, 5.49%, 7/27/07 * 10,000 10,009
Morgan Stanley, 5.38%, 2/4/08 * 15,000 15,000
SunTrust Bank, 5.43%, 5/17/07 * 10,000 10,003
U.S. Bank, 2.87%, 2/1/07 7,300 7,300
UBS Finance, Inc., 5.40%, 12/14/07 6,000 6,000
Wachovia Corp., 5.44%, 7/20/07 * 5,000 5,003
Wachovia Corp., 4.85%, 7/30/07 11,395 11,363
Wells Fargo & Co., 5.31%, 2/15/08 * 25,000 24,999
----------
TOTAL CORPORATE BONDS 281,590 20.7%
DEMAND NOTES
Beavercreek Enterprises, 5.36%,
3/2/20, (LOC: National City Bank) * 4,055 4,055
Buckeye Corrugated, Inc., 5.37%,
10/1/17, (LOC: Key Bank) * (b) 5,045 5,045
Bybee Foods LLC, 5.37%, 11/1/26,
(LOC: Key Bank) * 1,600 1,600
Capital One Funding Corp., 5.33%,
10/1/14, (LOC: Bank One) * 1,899 1,899
Capital One Funding Corp., 5.33%,
7/2/18, (LOC: Bank One) * (b) 611 611
Capital One Funding Corp., 5.33%,
10/1/21, (LOC: Bank One) * (b) 900 900
Capital One Funding Corp., 5.33%,
1/4/27, (LOC: Bank One) * 3,094 3,094
Central Michigan Inns, 5.37%, 4/1/30,
(LOC: Michigan National Bank) * 1,985 1,985
CHF-ELON LLC, 5.35%, 6/1/35,
(LOC: Regions Financial Corp) * (b) 6,500 6,500
Clare at Water Tower, 5.35%, 5/15/38,
(LOC: Lasalle Bank) * 12,500 12,500
Cornerstone Funding Corp., 5.39%,
12/1/11, (LOC: SunTrust) * 7,935 7,935
Cornerstone Funding Corp., 5.39%,
9/1/25, (LOC: SunTrust) * 5,628 5,628
Harry W. Albright, Jr., 5.42%, 5/1/21,
(LOC: National Australia Bank) * 5,485 5,485
HWP Co., Ltd. Project, 5.36%,
12/3/18, (LOC: National City Bank) * (b) 4,230 4,230
Iowa 80 Group, Inc., 5.47%, 6/1/16,
(LOC: Wells Fargo) * 3,800 3,800
Jackson 2000, 5.37%, 6/1/49, (LOC:
KeyBank) * 8,905 8,905
Jefferson Land Development, 5.41%,
10/1/16, (LOC: National City Bank) * (b) 1,020 1,020
Landmark Medical LLC, 5.37%,
1/1/21, (LOC: Bank One) * 7,380 7,380
Lexington Financial Services, 5.36%,
2/1/26, (LOC: LaSalle Bank) * 8,500 8,500
Mount Carmel East Professional,
5.36%, 1/1/14, (LOC: National City) * (b) 1,500 1,500
Mr. K Enterprises, 5.52%, 9/1/16,
(LOC: National Australia Bank) * 5,750 5,750
New Belgium Brewery Co., 5.50%,
7/1/15, (LOC: KeyBank) * 2,925 2,925
Northside Christian Church, 5.37%,
4/1/30, (LOC: Bank One) * 6,610 6,610
PCI Paper Conversions, Inc., 5.37%,
4/1/10, (LOC: KeyBank) * 1,650 1,650
Pittsburgh Technical Institute, 5.36%,
10/1/15, (LOC: National City Bank) * 9,735 9,735
Revenue Bond CTF Series Trust,
5.52%, 6/1/24, (LOC: AIG) * (b) 3,740 3,740
Royal Town Center LLC Project,
5.37%, 10/1/47, (LOC: Comerica Bank) * (b) 5,095 5,095
Saint Andrew United, 5.35%, 7/1/29,
(LOC: Wachovia Bank) * 12,385 12,385
SDK Cameron LLC, 5.37%, 10/1/35,
(LOC: Comerica Bank) * (b) 3,185 3,185
Second & Main, Ltd., 5.36%, 8/1/11,
(LOC: National City Bank) * 1,750 1,750
Secor Realty, Inc., 5.36%, 4/1/20,
(LOC: National City Bank) * 7,760 7,760
SGS Tool Co., 5.36%, 12/1/12, (LOC:
Bank One) * 4,175 4,175
Zeigler Realty LLC, 5.36%, 9/1/26,
(LOC: National City Bank) * 1,320 1,320
-------
TOTAL DEMAND NOTES 158,652 11.7%
MUNICIPAL BONDS
ALASKA
Four Dam Pool Electric Revenue, 5.34%, 7/1/26 * 3,480 3,480 0.3%
CALIFORNIA
Riverside County, 5.36%, 11/1/20 * 6,800 6,800
Sacramento County, 5.36%, 7/1/22 * 32,430 32,430
-------
39,230 2.9%
COLORADO
Housing & Finance Authority,
Multifamily, Class II-B-1, 5.36%, 10/1/44 * 14,000 14,000
Pueblo Housing Authority Purchasing
Revenue, 5.50%, 12/1/18 * (b) 1,735 1,735
-------
15,735 1.2%
GEORGIA
Columbus Development Authority,
Industrial Revenue, Litho-Krome
Project, 5.35%, 8/1/22 * 10,125 10,125 0.7%
IOWA
Dallas County Industrial Development
Revenue, Sioux City Brick & Tile,
5.37%, 9/1/21 * 6,980 6,980 0.5%
KENTUCKY
Bardstown Industrial Revenue, 5.42%, 6/1/24 * 7,950 7,950
Webster County Industrial Revenue,
Green River Project, 5.33%, 11/1/24 * 7,400 7,400
-------
15,350 1.1%
MICHIGAN
Commerce Charter Township,
Downtown Development, 5.34%, 10/1/34 * 20,000 20,000 1.5%
NEW YORK
Housing Development Corp.,
Multifamily Rental Housing Revenue, 5.30%, 6/1/33 * 12,455 12,455 0.9%
NORTH CAROLINA
Roman Catholic Diocese, Series A, 5.37%, 6/1/18 * 15,225 15,225 1.1%
OHIO
Cleveland-Cuyahoga County, Port
Authority Revenue, CBT Project, 5.37%, 6/1/31 * 4,485 4,485 0.3%
PENNSYLVANIA
Allegheny County, Industrial
Development Authority Revenue, 5.36%, 5/1/15 * 2,570 2,570 0.2%
UTAH
Housing Corp., Multi Family Revenue,
5.52%, 1/1/22 * 2,060 2,060
Telecommunication Open
Infrastructure Agency, 5.35%, 7/15/26 * 8,000 8,000
-------
10,060 0.7%
WASHINGTON
Housing Finance Community,
Multifamily Revenue, Monticello Park
Project, 5.33%, 9/1/34 * 3,815 3,815
State Housing Finance Community,
Multi Family Revenue, Eaglepointe
Apartments-B, 5.52%, 7/1/28 * 1,610 1,610
-------
5,425 0.4%
-------
TOTAL MUNICIPAL BONDS 161,120 11.8%
U.S. GOVERNMENT AGENCIES FEDERAL FARM CREDIT BANK
5.31%, 3/16/07 ** 1,675 1,665
5.17%, 4/27/07 * 15,000 14,999
2.63%, 9/17/07 1,000 984
-------
17,648 1.3%
FEDERAL HOME LOAN BANK
5.20%, 2/1/07 ** 10,000 10,000
5.29%, 2/2/07 ** 6,130 6,129
5.24%, 2/7/07 ** 14,055 14,043
5.23%, 2/8/07 ** 4,070 4,066
5.23%, 2/9/07 ** 16,945 16,925
5.23%, 2/12/07 ** 5,500 5,491
5.24%, 2/14/07 ** 16,567 16,535
2.88%, 2/15/07 300 300
4.88%, 2/15/07 5,350 5,349
2.63%, 2/16/07 850 849
3.63%, 2/16/07 2,500 2,498
5.26%, 2/16/07 ** 6,750 6,736
5.29%, 2/21/07 ** 4,200 4,188
5.23%, 2/23/07 ** 3,675 3,663
5.29%, 2/28/07 ** 5,000 4,981
4.88%, 3/1/07 725 725
3.75%, 3/7/07 2,675 2,671
5.30%, 3/9/07 ** 2,755 2,741
3.14%, 3/14/07 5,000 4,988
5.27%, 3/14/07 ** 5,500 5,468
5.28%, 3/16/07 ** 5,000 4,969
2.45%, 3/23/07 1,350 1,345
4.00%, 3/30/07 1,575 1,572
5.22%, 4/4/07 * 10,000 10,000
4.25%, 4/16/07 9,000 8,980
3.50%, 5/15/07 3,370 3,353
4.88%, 5/15/07 1,120 1,119
4.00%, 6/13/07 1,000 995
5.32%, 6/14/07 * 10,000 10,000
5.25%, 6/18/07 1,000 1,000
5.22%, 7/6/07 * 5,000 5,000
4.00%, 7/13/07 435 433
4.63%, 7/18/07 1,500 1,496
4.25%, 8/8/07 2,200 2,188
5.55%, 8/8/07 1,175 1,175
5.25%, 8/10/07 1,000 1,000
3.13%, 8/15/07 1,000 988
3.75%, 8/15/07 1,175 1,166
3.38%, 9/14/07 1,960 1,938
5.25%, 10/3/07 1,000 1,000
5.26%, 11/1/07 1,000 1,000
5.37%, 11/15/07 * 10,000 9,999
5.20%, 1/10/08 * 9,000 8,997
-------
198,059 14.5%
FREDDIE MAC
4.85%, 2/27/07 5,000 5,000 0.4%
-------
TOTAL U.S. GOVERNMENT AGENCIES 220,707 16.2%
REPURCHASE AGREEMENTS Deutsche Bank Repo, 5.26%, 2/1/07, (Proceeds at maturity,
$70,010, Collateralized by various U.S. Government Agency securities,
5.09%-6.38%, 6/22/07-5/12/20,
value $70,581) 70,000 70,000
UBS Investment Bank, 5.26%, 2/1/07,
(Proceeds at maturity, $47,763,
Collateralized by various U.S.
Government Agency securities, 0.00%,
4/20/07-11/29/19, value $48,714) 47,756 47,756
-------
TOTAL REPURCHASE AGREEMENTS 117,756 8.7%
SHARES VALUE
------- -------
MONEY MARKETS
AIM STIT Government Tax Advantage Fund 2,408,932 2,409
AIM STIT Liquid Assets Portfolio 1,212,655 1,213
Goldman Sachs Financial Square Federal Fund 5,921,109 5,921
Goldman Sachs Financial Square Prime Obligations Fund 1,200,757 1,201
-------
TOTAL MONEY MARKETS 10,744 0.8%
------- ------- ------
TOTAL INVESTMENTS (a) - 1,357,741 99.8%
OTHER ASSETS IN EXCESS OF LIABILITIES - 3,256 0.2%
------- -------
NET ASSETS $ - $ 1,360,997 100.0%
======= ========== ======
TOTAL INVESTMENTS COST (a) $ -
=======
- -------------------------------------------------
* Non-income producing security.
** Rate represents the effective yield at purchase.
(a) Also represents cost for federal income tax purposes.
(b) Rule 144A, Section 4(2) or other security which is restricted as to
resale to institutional investors. The advisor has deemed this
security to be liquid based upon procedures approved by the Board of
Trustees.
See notes to pro forma financial statements.
PRO FORMA COMBINED
SCHEDULES OF PORTFOLIO INVESTMENTS
JANUARY 31, 2007 (UNAUDITED)
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARES)
QUALITY GROWTH FUND
--------- ------- ------
SHARES/ PRINCIPAL VALUE %
--------- ------- ------
COMMON STOCKS
Abbott Laboratories 264,000 $13,992
Accenture Ltd., Class A 351,000 13,250
Alberto-Culver Co. 331,000 7,570
Allstate Corp. - -
Altera Corp. * (a) 324,000 6,496
Anixter International, Inc. * (a) - -
Apple Computer, Inc. * 151,000 12,945 (a)
Archer-Daniels-Midland Co. - -
Associated Banc-Corp. - -
AT&T, Inc. 304,975 11,476
Autodesk, Inc. * (a) 162,975 7,125
Baxter International, Inc. 297,000 14,749
Bemis Co. - -
Best Buy Co., Inc. 196,800 9,919
Biogen Idec, Inc. * (a) 181,000 8,750
Boeing Co. 115,100 10,308
Borg Warner, Inc. - -
Cameron International Corp. * (a) - -
Campbell Soup Co. 309,000 11,890
Caterpillar, Inc. 136,925 8,773
Chevron Corp. 155,000 11,296
Cisco Systems, Inc. * 942,100 25,050
Coach, Inc. * 241,000 11,052
Colgate-Palmolive Co. 189,950 12,974
Compass Bancshares, Inc. - -
ConocoPhillips - -
Danaher Corp. (a) 152,750 11,313
Deere & Co. - -
Devon Energy Corp. 129,275 9,061
Emerson Electric Corp. 208,000 9,354
Fiserv, Inc. - -
Franklin Resources, Inc. 96,075 11,443
Gilead Sciences, Inc. * 178,075 11,454
Google, Inc., Class A * 27,000 13,535
Harley-Davidson, Inc. - -
Hewlett-Packard Co. 200,000 8,656
Honeywell International, Inc. 172,250 7,870
Hormel Foods Corp. - -
IBM Corp. 135,750 13,460
Illinois Tool Works, Inc. 213,000 10,861
Intel Corp. 428,700 8,986
ITT Industries, Inc. 206,000 12,287
J.P. Morgan Chase & Co. 421,000 21,442
Johnson & Johnson 170,275 11,374
Johnson Controls, Inc. - -
Kellogg Co. (a) 186,000 9,164
Kohl's Corp. * 102,000 7,233
Kroger Co. 316,000 8,090
Laboratory Corp. of AmericaHoldings * (a) 146,000 10,722
Limited Brands, Inc. - -
Lincoln National Corp. 106,900 7,177
Manitowoc Co., Inc. - -
Manpower, Inc. 123,800 9,029
Marriott International, Inc., Class A 269,325 12,965
Marshall & Ilsley Corp. - -
McDonald's Corp. 308,000 13,659
Medtronic, Inc. - -
Merck & Co., Inc. - -
MGIC Investment Corp. - -
Microsoft Corp. 824,000 25,429
Monsanto Co. 204,000 11,238
Morgan Stanley 147,525 12,214
News Corp., Class B (a) 590,000 14,426
Northern Trust Corp. 116,925 7,103
Nuveen Investments, Inc. - -
Oracle Corp. * 430,000 7,379
PepsiCo, Inc. 196,650 12,829
Praxair, Inc. 144,000 9,081
Procter & Gamble Co. 237,000 15,374
QUALCOMM, Inc. 275,000 10,357
Regal-Beloit Corp. - -
Roper Industries, Inc. 150,225 7,800
Schlumberger, Ltd. 157,350 9,990
Scotts Co., Class A (a) - -
Stericycle, Inc. * 142,075 10,940
Target Corp. -
The Walt Disney Co. 353,000 12,415
Thermo Electron Corp. * 253,000 12,106
TJX Companies, Inc. 244,000 7,215
Toro Co. - -
U.S. Bancorp - -
United Technologies Corp. 176,825 12,028
Varian Semiconductor Equipment Associates, Inc. * (a) 213,000 8,765
Walgreen Co. - -
Wisconsin Energy Corp. - -
Zimmer Holdings, Inc. * 163,000 13,728
-------
TOTAL COMMON STOCKS 657,167 92.5%
CORPORATE BONDS
American Home Mortgage Investment Trust,
Series 2005-2, Class 5A4D,5.33%, 9/25/35 (b) $ - -
Ameriquest Mortgage Securities, Inc.,
Series 2003-10I, Class AF5I, 5.47%, 12/25/33 - -
AOL Time Warner, Inc., 7.70%, 5/1/32 - -
Banc of America Funding Corp.,
Series 2006-G, Class 3A2, 5.75%,7/20/36 (b) - -
Bank One Capital III, 8.75%, 9/1/30 - -
Bear Stearns Adjustable Rate Mortgage Trust,
Series 2005-12, Class 13A1,5.47%, 2/25/36 (b) - -
Bear Stearns Alternative-A Trust,
Series2005-9, 5.85%, 11/25/35 - -
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2000-WF2,Class A1, 7.11%, 10/15/32 - -
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2004-T14,Class A4, 5.20%, 1/12/41 (b) - -
Chase Mortgage Finance Corp., 5.00%, 11/25/33 - -
Chase Mortgage Finance Corp.,
Series 2005-A1, Class 2A2, 5.25%,12/25/35 (b)(c) - -
Chaseflex Trust, Series 2006-1,
ClassA2A, 5.94%, 6/25/36 - -
Comcast Cable, 7.13%, 6/15/13 - -
Countrywide Alternative Loan Trust,6.50%, 9/25/34 - -
Countrywide Alternative Loan Trust,
Series 2005-74T1, Class A1, 6.00%, 1/25/36 - -
Cox Communications, Inc., 5.50%, 10/1/15 - -
Credit Based Asset Service and Securitization,
Series 2005-CB8, ClassAF5, 5.65%, 12/25/35 (b) - -
Crown Castle Towers LLC, Series 2006-1A,
Class E, 6.07%,11/15/36 (d) - -
Delta Airlines, 6.72%, 1/2/23 (d) - -
Gazprom International, 7.20%,2/1/20 (d) - -
General Motors Acceptance Corp.,
Mortgage Corp. Loan Trust,4.34%, 11/1/34 - -
Green Tree Financial Corp.,7.60%, 6/15/25 - -
Greenwich Capital Commercial Funding Corp.,
Series 2002-C1, Class A4,4.95%, 1/11/35 - -
Greenwich Capital Commercial Funding Corp.,
Series 2004-GG1, Class A5,4.88%, 6/10/36 - -
IndyMac Index Mortgage Loan Trust,
Series 2005-AR9, 5.45%, 7/25/35 - -
JP Morgan Mortgage Trust,
Series2005-A1, Class 2A1, 4.88%, 2/25/35 - -
JP Morgan Mortgage Trust,
Series 2005-A2, Class 3A2, 4.93%, 4/25/35 - -
Morgan Stanley Capital I, 5.11%, 6/15/40 - -
Morgan Stanley Dean Witter Capital I, 4.74%, 11/13/36 - -
Morgan Stanley Mortgage Loan Trust,5.00%, 8/25/19 - -
Motorola, Inc., 6.50%, 11/15/28 - -
Onyx Acceptance Owner Trust,
Series 2003-D, Class A4, 3.20%, 3/15/10 (c) - -
Sprint Capital Corp., 8.75%, 3/15/32 - -
Tennessee Valley Authority, 6.36%,12/15/17** - -
Trans-Canada Pipeline, 5.60%, 3/31/34 - -
Truck Retail Installment Paper Corp.,
5.59%, 12/15/16 (b)(c)(d) - -
Vodafone Group PLC, 5.75%, 3/15/16 - -
Washington Mutual, Series 2004-AR3,
Class A-2, 4.24%, 6/25/34 - -
YUM! Brands Inc., 7.70%, 7/1/12 - -
-------
TOTAL CORPORATE BONDS - 0.0%
FOREIGN BONDS
France Telecom, 8.75%, 3/1/31 - -
-------
TOTAL FOREIGN BONDS - 0.0%
U.S. GOVERNMENT AGENCIES
FANNIE MAE
5.50%, 2/1/25 - -
5.00%, 5/1/25 - -
7.50%, 6/1/27 - -
7.00%, 6/1/32 - -
5.00%, 6/1/33 TBA - -
5.50%, 6/1/33 TBA - -
6.00%, 8/25/33 (b) - -
7.00%, 9/1/34 - -
5.00%, 10/1/35 - -
6.00%, 10/1/35 - -
5.50%, 2/1/36 - -
-------
- 0.0%
FREDDIE MAC
7.50%, 7/1/27 - -
7.50%, 8/1/27 - -
7.50%, 11/1/27 - -
7.50%, 12/1/27 - -
6.50%, 11/1/31 - -
7.00%, 1/1/32 - -
7.00%, 8/1/32 - -
4.50%, 6/1/34 - -
6.00%, 12/1/35 - -
-------
- 0.0%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
6.50%, 4/15/32 - -
7.00%, 7/20/32 - -
0.57%, 4/16/46 - -
-------
- 0.0%
------- -------
TOTAL U.S. GOVERNMENT AGENCIES - 0.0%
U.S. TREASURY OBLIGATIONS
U.S. TREASURY STRIPS
4.73%, 5/15/17** - -
4.84%, 11/15/27** - -
-------
TOTAL U.S. TREASURY OBLIGATIONS - 0.0%
INVESTMENTS IN AFFILIATES (e)
Fifth Third Institutional Money Market Fund 50,302,117 50,302
-------
TOTAL INVESTMENTS IN AFFILIATES 50,302 7.1%
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds $ 38,393 38,393
-------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING 38,393 5.4%
------- -----
TOTAL INVESTMENTS 745,862 105.0%
LIABILITIES IN EXCESS OF OTHER ASSETS (35,629) -5.0%
------- -----
NET ASSETS $ 710,233 100.0%
======= =======
TOTAL INVESTMENTS COST + $ 676,253
=======
BALANCED FUND
--------- ------- ------
SHARES/ PRINCIPAL VALUE %
--------- ------- ------
COMMON STOCKS
Abbott Laboratories 19,075 $ 1,011
Accenture Ltd., Class A - -
Alberto-Culver Co. 28,000 640
Allstate Corp. 13,000 782
Altera Corp. * (a) - -
Anixter International, Inc. * (a) 9,850 544
Apple Computer, Inc. * 8,000 686
Archer-Daniels-Midland Co. 18,500 592
Associated Banc-Corp. 17,500 597
AT&T, Inc. 16,425 618
Autodesk, Inc. * (a) - -
Baxter International, Inc. 21,000 1,042
Bemis Co. 20,000 678
Best Buy Co., Inc. 9,500 479
Biogen Idec, Inc. * (a) - -
Boeing Co. 10,000 896
Borg Warner, Inc. 8,000 548
Cameron International Corp. * (a) 11,000 578
Campbell Soup Co. - -
Caterpillar, Inc. - -
Chevron Corp. 10,000 728
Cisco Systems, Inc. * 40,000 1,064
Coach, Inc. * - -
Colgate-Palmolive Co. - -
Compass Bancshares, Inc. 10,000 609
ConocoPhillips 9,500 631
Danaher Corp. (a) - -
Deere & Co. 6,525 654
Devon Energy Corp. 8,500 596
Emerson Electric Corp. - -
Fiserv, Inc. 15,500 815
Franklin Resources, Inc. - -
Gilead Sciences, Inc. * - -
Google, Inc., Class A * 1,200 602
Harley-Davidson, Inc. 8,000 546
Hewlett-Packard Co. - -
Honeywell International, Inc. - -
Hormel Foods Corp. 22,000 834
IBM Corp. - -
Illinois Tool Works, Inc. 17,000 867
Intel Corp. - -
ITT Industries, Inc. - -
J.P. Morgan Chase & Co. 17,500 891
Johnson & Johnson 11,500 768
Johnson Controls, Inc. 6,575 608
Kellogg Co. (a) 16,000 788
Kohl's Corp. * 6,600 468
Kroger Co. 24,400 625
Laboratory Corp. of AmericaHoldings * (a) - -
Limited Brands, Inc. 22,000 615
Lincoln National Corp. 12,000 806
Manitowoc Co., Inc. 13,000 675
Manpower, Inc. 8,100 591
Marriott International, Inc., Class A - -
Marshall & Ilsley Corp. 17,500 824
McDonald's Corp. 21,000 930
Medtronic, Inc. 13,000 695
Merck & Co., Inc. 15,300 685
MGIC Investment Corp. 8,000 494
Microsoft Corp. 39,425 1,216
Monsanto Co. 13,400 738
Morgan Stanley - -
News Corp., Class B (a) 24,325 595
Northern Trust Corp. 16,000 971
Nuveen Investments, Inc. 11,000 545
Oracle Corp. * 47,000 807
PepsiCo, Inc. 11,500 750
Praxair, Inc. - -
Procter & Gamble Co. 18,000 1,168
QUALCOMM, Inc. - -
Regal-Beloit Corp. 14,000 704
Roper Industries, Inc. - -
Schlumberger, Ltd. 12,500 793
Scotts Co., Class A (a) 16,500 884
Stericycle, Inc. * 12,500 963
Target Corp. 13,700 840
The Walt Disney Co. 24,000 844
Thermo Electron Corp. * - -
TJX Companies, Inc. - -
Toro Co. 10,225 524
U.S. Bancorp 25,000 890
United Technologies Corp. - -
Varian Semiconductor Equipment Associates, Inc. * (a) 19,000 782
Walgreen Co. 10,000 453
Wisconsin Energy Corp. 18,000 838
Zimmer Holdings, Inc. * 11,500 969
-------
TOTAL COMMON STOCKS 44,374 61.6%
CORPORATE BONDS
American Home Mortgage Investment Trust,
Series 2005-2, Class 5A4D,5.33%, 9/25/35 (b) $ 1,500 1,450
Ameriquest Mortgage Securities, Inc.,
Series 2003-10I, Class AF5I, 5.47%, 12/25/33 500 495
AOL Time Warner, Inc., 7.70%, 5/1/32 75 85
Banc of America Funding Corp.,
Series 2006-G, Class 3A2, 5.75%,7/20/36 (b) 1,585 1,574
Bank One Capital III, 8.75%, 9/1/30 175 227
Bear Stearns Adjustable Rate Mortgage Trust,
Series 2005-12, Class 13A1,5.47%, 2/25/36 (b) 939 927
Bear Stearns Alternative-A Trust,
Series2005-9, 5.85%, 11/25/35 382 386
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2000-WF2,Class A1, 7.11%, 10/15/32 313 316
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2004-T14,Class A4, 5.20%, 1/12/41 (b) 700 688
Chase Mortgage Finance Corp., 5.00%, 11/25/33 1,505 1,452
Chase Mortgage Finance Corp.,
Series 2005-A1, Class 2A2, 5.25%,12/25/35 (b)(c) 1,775 1,755
Chaseflex Trust, Series 2006-1,
ClassA2A, 5.94%, 6/25/36 400 401
Comcast Cable, 7.13%, 6/15/13 200 216
Countrywide Alternative Loan Trust,6.50%, 9/25/34 248 252
Countrywide Alternative Loan Trust,
Series 2005-74T1, Class A1, 6.00%, 1/25/36 394 394
Cox Communications, Inc., 5.50%, 10/1/15 75 73
Credit Based Asset Service and Securitization,
Series 2005-CB8, ClassAF5, 5.65%, 12/25/35 (b) 515 510
Crown Castle Towers LLC, Series 2006-1A,
Class E, 6.07%,11/15/36 (d) 650 645
Delta Airlines, 6.72%, 1/2/23 (d) 287 290
Gazprom International, 7.20%,2/1/20 (d) 100 105
General Motors Acceptance Corp.,
Mortgage Corp. Loan Trust,4.34%, 11/1/34 385 379
Green Tree Financial Corp.,7.60%, 6/15/25 270 276
Greenwich Capital Commercial Funding Corp.,
Series 2002-C1, Class A4,4.95%, 1/11/35 1,000 978
Greenwich Capital Commercial Funding Corp.,
Series 2004-GG1, Class A5,4.88%, 6/10/36 700 687
IndyMac Index Mortgage Loan Trust,
Series 2005-AR9, 5.45%, 7/25/35 270 274
JP Morgan Mortgage Trust,
Series2005-A1, Class 2A1, 4.88%, 2/25/35 383 375
JP Morgan Mortgage Trust,
Series 2005-A2, Class 3A2, 4.93%, 4/25/35 1,000 975
Morgan Stanley Capital I, 5.11%, 6/15/40 800 779
Morgan Stanley Dean Witter Capital I, 4.74%, 11/13/36 700 677
Morgan Stanley Mortgage Loan Trust,5.00%, 8/25/19 735 716
Motorola, Inc., 6.50%, 11/15/28 205 205
Onyx Acceptance Owner Trust,
Series 2003-D, Class A4, 3.20%, 3/15/10 (c) 201 199
Sprint Capital Corp., 8.75%, 3/15/32 65 77
Tennessee Valley Authority, 6.36%,12/15/17** 900 513
Trans-Canada Pipeline, 5.60%, 3/31/34 195 183
Truck Retail Installment Paper Corp.,
5.59%, 12/15/16 (b)(c)(d) 2,000 2,005
Vodafone Group PLC, 5.75%, 3/15/16 75 75
Washington Mutual, Series 2004-AR3,
Class A-2, 4.24%, 6/25/34 360 354
YUM! Brands Inc., 7.70%, 7/1/12 125 135
-------
TOTAL CORPORATE BONDS 22,103 30.6%
FOREIGN BONDS
France Telecom, 8.75%, 3/1/31 200 262
-------
TOTAL FOREIGN BONDS 262 0.4%
U.S. GOVERNMENT AGENCIES
FANNIE MAE
5.50%, 2/1/25 224 222
5.00%, 5/1/25 414 400
7.50%, 6/1/27 30 31
7.00%, 6/1/32 12 13
5.00%, 6/1/33 TBA 500 480
5.50%, 6/1/33 TBA 2,625 2,582
6.00%, 8/25/33 (b) 412 410
7.00%, 9/1/34 8 8
5.00%, 10/1/35 174 167
6.00%, 10/1/35 312 313
5.50%, 2/1/36 310 305
-------
4,931 6.8%
FREDDIE MAC
7.50%, 7/1/27 11 12
7.50%, 8/1/27 46 48
7.50%, 11/1/27 30 32
7.50%, 12/1/27 50 52
6.50%, 11/1/31 502 513
7.00%, 1/1/32 7 7
7.00%, 8/1/32 33 34
4.50%, 6/1/34 172 161
6.00%, 12/1/35 297 299
-------
1,158 1.6%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
6.50%, 4/15/32 122 125
7.00%, 7/20/32 67 69
0.57%, 4/16/46 3,486 134
-------
328 0.5%
------- -----
TOTAL U.S. GOVERNMENT AGENCIES 6,417 8.9%
U.S. TREASURY OBLIGATIONS
U.S. TREASURY STRIPS
4.73%, 5/15/17** 150 91
4.84%, 11/15/27** 650 231
-------
TOTAL U.S. TREASURY OBLIGATIONS 322 0.4%
INVESTMENTS IN AFFILIATES (e)
Fifth Third Institutional Money Market Fund 2,043,570 2,044
-------
TOTAL INVESTMENTS IN AFFILIATES 2,044 2.8%
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds $ 3,850 3,850
-------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING 3,850 5.3%
------- -----
TOTAL INVESTMENTS 79,372 110.0%
LIABILITIES IN EXCESS OF OTHER ASSETS (7,245) -10.0%
------- -----
NET ASSETS $72,127 100.0%
======= ======
TOTAL INVESTMENTS COST + $75,504
=======
- ---------------------------------------------
For federal income tax purposes:
Total investments cost $75,640
========
Gross unrealized appreciation $ 4,630
Gross unrealized depreciation (898)
--------
Net unrealized appreciation $ 3,732
========
PRO FORMA
ADJUSTMENTS PRO FORMA FUND
------- ------- --------- ------- ------
SHARES/ SHARES/
PRINCIPAL VALUE PRINCIPAL VALUE %
------- ------- --------- ------- ------
COMMON STOCKS
Abbott Laboratories - $ - 283,075 $ 15,003
Accenture Ltd., Class A 351,000 13,250
Alberto-Culver Co. 359,000 8,210
Allstate Corp. 13,000 782
Altera Corp. * (a) 324,000 6,496
Anixter International, Inc. * (a) 9,850 544
Apple Computer, Inc. * 159,000 13,631
Archer-Daniels-Midland Co. 18,500 592
Associated Banc-Corp. 17,500 597
AT&T, Inc. 321,400 12,094
Autodesk, Inc. * (a) 162,975 7,125
Baxter International, Inc. 318,000 15,791
Bemis Co. 20,000 678
Best Buy Co., Inc. 206,300 10,398
Biogen Idec, Inc. * (a) 181,000 8,750
Boeing Co. 125,100 11,204
Borg Warner, Inc. 8,000 548
Cameron International Corp. * (a) 11,000 578
Campbell Soup Co. 309,000 11,890
Caterpillar, Inc. 136,925 8,773
Chevron Corp. 165,000 12,024
Cisco Systems, Inc. * 982,100 26,114
Coach, Inc. * 241,000 11,052
Colgate-Palmolive Co. 189,950 12,974
Compass Bancshares, Inc. 10,000 609
ConocoPhillips 9,500 631
Danaher Corp. (a) 152,750 11,313
Deere & Co. 6,525 654
Devon Energy Corp. 137,775 9,657
Emerson Electric Corp. 208,000 9,354
Fiserv, Inc. 15,500 815
Franklin Resources, Inc. 96,075 11,443
Gilead Sciences, Inc. * 178,075 11,454
Google, Inc., Class A * 28,200 14,137
Harley-Davidson, Inc. 8,000 546
Hewlett-Packard Co. 200,000 8,656
Honeywell International, Inc. 172,250 7,870
Hormel Foods Corp. 22,000 834
IBM Corp. 135,750 13,460
Illinois Tool Works, Inc. 230,000 11,728
Intel Corp. 428,700 8,986
ITT Industries, Inc. 206,000 12,287
J.P. Morgan Chase & Co. 438,500 22,333
Johnson & Johnson 181,775 12,142
Johnson Controls, Inc. 6,575 608
Kellogg Co. (a) 202,000 9,952
Kohl's Corp. * 108,600 7,701
Kroger Co. 340,400 8,715
Laboratory Corp. of AmericaHoldings * (a) 146,000 10,722
Limited Brands, Inc. 22,000 615
Lincoln National Corp. 118,900 7,983
Manitowoc Co., Inc. 13,000 675
Manpower, Inc. 131,900 9,620
Marriott International, Inc., Class A 269,325 12,965
Marshall & Ilsley Corp. 17,500 824
McDonald's Corp. 329,000 14,589
Medtronic, Inc. 13,000 695
Merck & Co., Inc. 15,300 685
MGIC Investment Corp. 8,000 494
Microsoft Corp. 863,425 26,645
Monsanto Co. 217,400 11,976
Morgan Stanley 147,525 12,214
News Corp., Class B (a) 614,325 15,021
Northern Trust Corp. 132,925 8,074
Nuveen Investments, Inc. 11,000 545
Oracle Corp. * 477,000 8,186
PepsiCo, Inc. 208,150 13,579
Praxair, Inc. 144,000 9,081
Procter & Gamble Co. 255,000 16,542
QUALCOMM, Inc. 275,000 10,357
Regal-Beloit Corp. 14,000 704
Roper Industries, Inc. 150,225 7,800
Schlumberger, Ltd. 169,850 10,783
Scotts Co., Class A (a) 16,500 884
Stericycle, Inc. * 154,575 11,903
Target Corp. 13,700 840
The Walt Disney Co. 377,000 13,259
Thermo Electron Corp. * 253,000 12,106
TJX Companies, Inc. 244,000 7,215
Toro Co. 10,225 524
U.S. Bancorp 25,000 890
United Technologies Corp. 176,825 12,028
Varian Semiconductor Equipment Associates, Inc. * (a) 232,000 9,547
Walgreen Co. 10,000 453
Wisconsin Energy Corp. 18,000 838
Zimmer Holdings, Inc. * 174,500 14,697
-------
TOTAL COMMON STOCKS 701,541 89.7%
CORPORATE BONDS
American Home Mortgage Investment Trust,
Series 2005-2, Class 5A4D,5.33%, 9/25/35 (b) $ 1,500 1,450
Ameriquest Mortgage Securities, Inc.,
Series 2003-10I, Class AF5I, 5.47%, 12/25/33 500 495
AOL Time Warner, Inc., 7.70%, 5/1/32 75 85
Banc of America Funding Corp.,
Series 2006-G, Class 3A2, 5.75%,7/20/36 (b) 1,585 1,574
Bank One Capital III, 8.75%, 9/1/30 175 227
Bear Stearns Adjustable Rate Mortgage Trust,
Series 2005-12, Class 13A1,5.47%, 2/25/36 (b) 939 927
Bear Stearns Alternative-A Trust,
Series2005-9, 5.85%, 11/25/35 382 386
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2000-WF2,Class A1, 7.11%, 10/15/32 313 316
Bear Stearns Commercial Mortgage Securities, Inc.,
Series 2004-T14,Class A4, 5.20%, 1/12/41 (b) 700 688
Chase Mortgage Finance Corp., 5.00%, 11/25/33 1,505 1,452
Chase Mortgage Finance Corp.,
Series 2005-A1, Class 2A2, 5.25%,12/25/35 (b)(c) 1,775 1,755
Chaseflex Trust, Series 2006-1,
ClassA2A, 5.94%, 6/25/36 400 401
Comcast Cable, 7.13%, 6/15/13 200 216
Countrywide Alternative Loan Trust,6.50%, 9/25/34 248 252
Countrywide Alternative Loan Trust,
Series 2005-74T1, Class A1, 6.00%, 1/25/36 394 394
Cox Communications, Inc., 5.50%, 10/1/15 75 73
Credit Based Asset Service and Securitization,
Series 2005-CB8, ClassAF5, 5.65%, 12/25/35 (b) 515 510
Crown Castle Towers LLC, Series 2006-1A,
Class E, 6.07%,11/15/36 (d) 650 645
Delta Airlines, 6.72%, 1/2/23 (d) 287 290
Gazprom International, 7.20%,2/1/20 (d) 100 105
General Motors Acceptance Corp.,
Mortgage Corp. Loan Trust,4.34%, 11/1/34 385 379
Green Tree Financial Corp.,7.60%, 6/15/25 270 276
Greenwich Capital Commercial Funding Corp.,
Series 2002-C1, Class A4,4.95%, 1/11/35 1,000 978
Greenwich Capital Commercial Funding Corp.,
Series 2004-GG1, Class A5,4.88%, 6/10/36 700 687
IndyMac Index Mortgage Loan Trust,
Series 2005-AR9, 5.45%, 7/25/35 270 274
JP Morgan Mortgage Trust,
Series2005-A1, Class 2A1, 4.88%, 2/25/35 383 375
JP Morgan Mortgage Trust,
Series 2005-A2, Class 3A2, 4.93%, 4/25/35 1,000 975
Morgan Stanley Capital I, 5.11%, 6/15/40 800 779
Morgan Stanley Dean Witter Capital I, 4.74%, 11/13/36 700 677
Morgan Stanley Mortgage Loan Trust,5.00%, 8/25/19 735 716
Motorola, Inc., 6.50%, 11/15/28 205 205
Onyx Acceptance Owner Trust,
Series 2003-D, Class A4, 3.20%, 3/15/10 (c) 201 199
Sprint Capital Corp., 8.75%, 3/15/32 65 77
Tennessee Valley Authority, 6.36%,12/15/17** 900 513
Trans-Canada Pipeline, 5.60%, 3/31/34 195 183
Truck Retail Installment Paper Corp.,
5.59%, 12/15/16 (b)(c)(d) 2,000 2,005
Vodafone Group PLC, 5.75%, 3/15/16 75 75
Washington Mutual, Series 2004-AR3,
Class A-2, 4.24%, 6/25/34 360 354
YUM! Brands Inc., 7.70%, 7/1/12 125 135
-------
TOTAL CORPORATE BONDS - 22,103 2.8%
FOREIGN BONDS
France Telecom, 8.75%, 3/1/31 200 262
-------
TOTAL FOREIGN BONDS 262 0.0%
U.S. GOVERNMENT AGENCIES
FANNIE MAE
5.50%, 2/1/25 224 222
5.00%, 5/1/25 414 400
7.50%, 6/1/27 30 31
7.00%, 6/1/32 12 13
5.00%, 6/1/33 TBA 500 480
5.50%, 6/1/33 TBA 2,625 2,582
6.00%, 8/25/33 (b) 412 410
7.00%, 9/1/34 8 8
5.00%, 10/1/35 174 167
6.00%, 10/1/35 312 313
5.50%, 2/1/36 310 305
-------
- 4,931 0.6%
FREDDIE MAC
7.50%, 7/1/27 11 12
7.50%, 8/1/27 46 48
7.50%, 11/1/27 30 32
7.50%, 12/1/27 50 52
6.50%, 11/1/31 502 513
7.00%, 1/1/32 7 7
7.00%, 8/1/32 33 34
4.50%, 6/1/34 172 161
6.00%, 12/1/35 297 299
-------
1,158 0.2%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
6.50%, 4/15/32 122 125
7.00%, 7/20/32 67 69
0.57%, 4/16/46 3,486 134
-------
328 0.0%
------- -----
TOTAL U.S. GOVERNMENT AGENCIES 6,417 0.8%
U.S. TREASURY OBLIGATIONS
U.S. TREASURY STRIPS
4.73%, 5/15/17** 150 91
4.84%, 11/15/27** 650 231
-------
TOTAL U.S. TREASURY OBLIGATIONS 322 0.1%
INVESTMENTS IN AFFILIATES (e)
Fifth Third Institutional Money Market Fund 52,345,687 52,346
-------
TOTAL INVESTMENTS IN AFFILIATES 52,346 6.7%
SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING
Pool of various securities for Fifth Third Funds $ 42,243 42,243
-------
TOTAL SHORT-TERM SECURITIES HELD AS
COLLATERAL FOR SECURITIES LENDING 42,243 5.4%
------- -----
TOTAL INVESTMENTS - 825,234 105.5%
LIABILITIES IN EXCESS OF OTHER ASSETS - (42,874) -5.5%
------ ------- -----
NET ASSETS $ - $782,360 100.0%
====== ======= ======
TOTAL INVESTMENTS COST + $ - $751,757
====== =======
- ---------------------------------------------
For federal income tax purposes:
Total investments cost $ - $752,677
====== ========
Gross unrealized appreciation $ - $ 77,840
Gross unrealized depreciation - (5,283)
------ --------
Net unrealized appreciation $ - $ 72,557
======= ========
* Non-income producing security.
** Rate represents the effective yield at purchase.
(a) All or part of this security was on loan at January 31, 2007.
(b) Variable rate security. Rate presented represents rate in effect at
January 31, 2007. Maturity date represents actual maturity date.
(c) All or a part of this security has been deposited as collateral for
TBA security.
(d) Rule 144A, Section 4(2) or other security which is restricted as to
resale to institutional investors. The Fund's advisor has deemed this
security to be liquid based upon procedures approved by the Board of
Trustees.
(e) Investment is in Institutional Shares of indicated fund.
+ For financial reporting purposes.
See notes to pro forma financial statements.
As of January 31, 2007, the securities on loan information is as follows:
MARKET
OPEN VALUE OF AVERAGE
CASH COLLATERAL LOANED LOAN
COLLATERAL COMMITMENTS SECURITIES OUTSTANDING ***
---------- ----------- ---------- ---------------
QUALITY GROWTH FUND $ 38,393 $ 16 $ 37,339 $ 105,391
BALANCED FUND 3,850 (25) 3,744 4,387
---------- ----------- ---------- ---------------
PRO FORMA FUND $ 42,243 $ (9) $ 41,083 $ 109,778
*** For periods when securities lending was utilized.
The cash collateral received by all the funds of Fifth Third Funds at January
31, 2007, was pooled and invested in the following:
SECURITY TYPE SECURITY NAME VALUE RATE MATURITY DATE
- ---------------------- -------------------------------- -------- ------ -------------
Floating Rate Security American Express Bank $ 35,000 5.29% 11/20/07
Floating Rate Security Bank of New York Co., Inc. 40,000 5.31% 2/11/08
Floating Rate Security BMW 30,000 5.30% 2/5/08
Floating Rate Security Canadian Imperial Bank NY 20,000 5.30% 1/24/08
Floating Rate Security Florida Heart Group 8,595 5.32% 4/1/14
Floating Rate Security General Electric Capital Corp. 7,702 5.45% 7/9/07
Floating Rate Security Guiding Light Church 10,700 5.32% 3/1/25
Floating Rate Security IBM Corp. 35,000 5.31% 2/8/08
Floating Rate Security Lehman 10,002 5.37% 5/31/07
Floating Rate Security Merrill Lynch 30,000 5.36% 5/29/07
Floating Rate Security Morgan Stanley 10,000 5.34% 2/4/08
Floating Rate Security Morgan Stanley 5,000 5.34% 2/4/08
Floating Rate Security Morgan Stanley 25,000 5.38% 2/4/08
Floating Rate Security National Australia Bank 25,000 5.29% 2/7/08
Repurchase Agreement Barclays Capital Markets 109,920 5.25% 2/1/07
Repurchase Agreement Deutsche Bank Securities, Inc. 58,458 5.26% 2/1/07
The investment concentrations for these funds as a percentage of net
assets, by industry, as of January 31, 2007, were as follows:
QUALITY
GROWTH BALANCED PRO FORMA
FUND FUND FUND
------- ------- -------
Aerospace/Defense 3.1% 1.6% 3.0%
Agriculture 1.6% 1.0% 1.5%
Apparel 1.6% 0.0% 1.5%
Auto Parts & Equipment 0.0% 1.6% 0.1%
Automobile ABS 0.0% 3.6% 0.3%
Banks 1.0% 5.8% 1.4%
Beverages 1.8% 1.0% 1.7%
Biotechnology 1.2% 0.0% 1.1%
Cash Equivalents 5.4% 5.3% 5.4%
Chemicals 1.3% 0.0% 1.2%
Commercial MBS 0.0% 8.5% 0.8%
Commercial Services 3.1% 0.8% 2.9%
Computers 4.9% 2.1% 4.6%
Cosmetics/Personal Care 4.0% 1.6% 3.8%
Diversified Financial Services 6.3% 2.4% 5.9%
Electric 0.0% 1.2% 0.1%
Electrical Components & Equipment 1.3% 0.0% 1.2%
Electronics 1.7% 0.0% 1.5%
Environmental Control 1.5% 1.3% 1.5%
Food 4.1% 3.9% 4.1%
Hand/Machine Tools 0.0% 1.0% 0.1%
Healthcare-Products 6.7% 5.8% 6.6%
Healthcare-Services 1.5% 0.0% 1.4%
Home Equity ABS 0.0% 0.7% 0.1%
Household Products/Wares 0.0% 1.2% 0.1%
Housewares 0.0% 0.7% 0.1%
Insurance 1.0% 2.9% 1.2%
Internet 1.9% 0.8% 1.8%
Investment Companies 7.1% 2.8% 6.7%
Leisure Time 0.0% 0.8% 0.1%
Lodging 1.8% 0.0% 1.6%
Machinery-Construction & Mining 1.2% 0.0% 1.1%
Machinery-Diversified 0.0% 1.8% 0.2%
Media 3.8% 2.5% 3.7%
Miscellaneous Manufacturing 7.2% 1.2% 6.6%
Oil & Gas 2.9% 2.8% 2.9%
Oil & Gas Services 1.4% 1.9% 1.4%
Other ABS 0.0% 0.7% 0.1%
Packaging & Containers 0.0% 0.9% 0.1%
Pharmaceuticals 3.6% 2.4% 3.5%
Pipelines 0.0% 0.3% 0.0%
Retail 5.4% 5.5% 5.4%
Semiconductors 3.4% 1.1% 3.2%
Software 5.6% 2.8% 5.3%
Sovereign 0.0% 10.0% 0.9%
Telecommunications 6.6% 4.0% 6.4%
WL Collateral CMO 0.0% 13.7% 1.3%
------- ------- -------
105.0% 110.0% 105.5%
======= ======= =======
PRO FORMA COMBINED
STATEMENTS OF ASSETS AND LIABILITIES
JANUARY 31, 2007 (UNAUDITED)
(Dollar amounts in thousands except per share prices)
U.S.
INTERMEDIATE GOVERNMENT
BOND BOND BOND
FUND FUND FUND
--------- --------- --------
ASSETS:
Investments, at cost $ 354,084 $ 458,511 $ 46,779
Net unrealized depreciation (3,231) (1,413) (925)
--------- --------- --------
Investments, at value 350,853 457,098 45,854
Investment in affiliates, at value
(cost $5,187, $17,244, $8,586; and $22,431,
$13,773, $31,017, respectively) 5,187 17,244 8,586
--------- --------- --------
Total Investments 356,040 474,342 54,440
Interest, dividends and other receivables 1,516 3,318 316
Receivable for investments sold - 16,174 -
Receivable for Fund shares sold 159 50 22
Receivable from Advisor and affiliates 12 31 7
Prepaid expenses and other assets 32 35 24
--------- --------- --------
Total Assets 357,759 493,950 54,809
--------- --------- --------
LIABILITIES:
Payable for investments purchased 67,667 19,263 4,505
Payable for securities loaned 9,231 16,587
Payable for Fund shares redeemed 320 628 53
Accrued expenses and other payables:
Payable to Advisor and affiliates 156 268 25
Distribution and administrative services fees 5 6 6
Other 181 99 17
--------- --------- --------
Total Liabilities 77,560 36,851 4,606
--------- --------- --------
NET ASSETS:
Paid--in Capital 285,675 498,696 50,827
Accumulated net investment income (loss) (212) (70) 312
Accumulated net realized loss from
investment transactions (2,033) (40,114) (11)
Net unrealized depreciation on investments (3,231) (1,413) (925)
--------- --------- --------
Net Assets $ 280,199 $ 457,099 $ 50,203
========= ========= ========
Market value of
securities loaned $ 8,977 $ 16,132 $ -
========= ========= =========
Net Assets:
Institutional Shares $ 266,900 $ 434,349 $ 26,317
Class A Shares 10,363 19,919 22,444
Class B Shares 2,450 2,052 -
Class C Shares 251 715 1,439
Advisor Shares 235 64 3
--------- --------- --------
Total $ 280,199 $ 457,099 $ 50,203
========= ========= ========
Shares of Beneficial Interest Outstanding (Unlimited number of shares
authorized, no par value):
Institutional Shares 27,283 45,255 2,633
Class A Shares 1,059 2,070 2,243
Class B Shares 250 214 -
Class C Shares 27 75 145
Advisor Shares ^ 24 6 -
--------- --------- --------
Total 28,643 47,620 5,021
========= ========= ========
Net Asset Value+
Institutional Shares $ 9.78 $ 9.60 $ 9.99
========= ========= ========
Class A Shares-- redemption price per share $ 9.78 $ 9.63 $ 10.01
========= ========= ========
Class B Shares-- offering price per share* $ 9.78 $ 9.57 NA
========= ========= =========
Class C Shares-- offering price per share* $ 9.78 $ 9.59 $ 9.92
========= ========= ========
Advisor Shares-- redemption price per share $ 9.78 $ 9.59 $ 10.00
========= ========= ========
Maximum Sales Charge
Class A Shares 4.75% 3.50% 4.75%
Advisor Shares 3.25% 2.00% 3.25%
Maximum Offering Price (100%/(100%-Maximum sales charge) of net asset
value adjusted to the nearest cent) per share
Class A Shares $ 10.27 $ 9.98 $ 10.51
========= ========= ========
Advisor Shares $ 10.11 $ 9.79 $ 10.34
========= ========= ========
-----------------------
MERGER SCENARIO 1
-----------------------
PRO FORMA PRO FORMA
ADJUSTMENTS FUND
------------ --------
ASSETS:
Investments, at cost $ - $ 812,595
Net unrealized depreciation - (4,644)
-------- --------
Investments, at value - 807,951
Investment in affiliates, at value
(cost $5,187, $17,244, $8,586; and $22,431,
$13,773, $31,017, respectively) - 22,431
-------- --------
Total Investments - 830,382
Interest, dividends and other receivables - 4,834
Receivable for investments sold - 16,174
Receivable for Fund shares sold - 209
Receivable from Advisor and affiliates - 43
Prepaid expenses and other assets - 67
-------- --------
Total Assets - 851,709
-------- --------
LIABILITIES:
Payable for investments purchased - 86,930
Payable for securities loaned - 25,818
Payable for Fund shares redeemed - 948
Accrued expenses and other payables:
Payable to Advisor and affiliates - 424
Distribution and administrative services fees - 11
Other - 280
-------- --------
Total Liabilities - 114,411
-------- --------
NET ASSETS:
Paid--in Capital - 784,371
Accumulated net investment income (loss) - (282)
Accumulated net realized loss from
investment transactions - (42,147)
Net unrealized depreciation on investments - (4,644)
-------- --------
Net Assets $ - $ 737,298
======== ========
Market value of
securities loaned $ - $25,109
========= =========
Net Assets:
Institutional Shares $ - $ 701,249
Class A Shares - 30,282
Class B Shares - 4,502
Class C Shares - 966
Advisor Shares - 299
-------- --------
Total $ - $ 737,298
======== ========
Shares of Beneficial Interest Outstanding (Unlimited number of shares
authorized, no par value):
Institutional Shares (843) (a) 71,695
Class A Shares (33) (a) 3,096
Class B Shares (4) (a) 460
Class C Shares (2) (a) 100
Advisor Shares ^ 1 (a) 31
-------- --------
Total (881) 75,382
======== ========
Net Asset Value+
Institutional Shares $ 9.78
=========
Class A Shares-- redemption price per share $ 9.78
=========
Class B Shares-- offering price per share* $ 9.78
=========
Class C Shares-- offering price per share* $ 9.78
=========
Advisor Shares-- redemption price per share $ 9.78
========
Maximum Sales Charge
Class A Shares 4.75%
Advisor Shares 3.25%
Maximum Offering Price (100%/(100%-Maximum sales charge) of net asset
value adjusted to the nearest cent) per share
Class A Shares $ 10.27
=========
Advisor Shares $ 10.11
=========
-----------------------
MERGER SCENARIO 2
-----------------------
PRO FORMA PRO FORMA
ADJUSTMENTS FUND
-------- --------
ASSETS:
Investments, at cost $ - $ 400,863
Net unrealized depreciation - (4,156)
-------- --------
Investments, at value - 396,707
Investment in affiliates, at value
(cost $5,187, $17,244, $8,586; and $22,431,
$13,773, $31,017, respectively) - 13,773
-------- --------
Total Investments - 410,480
Interest, dividends and other receivables - 1,832
Receivable for investments sold - -
Receivable for Fund shares sold - 181
Receivable from Advisor and affiliates - 19
Prepaid expenses and other assets - 56
-------- --------
Total Assets - 412,568
-------- --------
LIABILITIES:
Payable for investments purchased - 72,172
Payable for securities loaned - 9,231
Payable for Fund shares redeemed - 373
Accrued expenses and other payables:
Payable to Advisor and affiliates - 181
Distribution and administrative services fees - 11
Other - 198
-------- --------
Total Liabilities - 82,166
-------- --------
NET ASSETS:
Paid--in Capital - 336,502
Accumulated net investment income (loss) - 100
Accumulated net realized loss from
investment transactions - (2,044)
Net unrealized depreciation on investments - (4,156)
-------- --------
Net Assets $ - $ 330,402
======== ========
Market value of
securities loaned $ - $ 8,977
========= =========
Net Assets:
Institutional Shares $ - $ 293,217
Class A Shares - 32,807
Class B Shares - 2,450
Class C Shares - 1,690
Advisor Shares - 238
-------- --------
Total $ - $ 330,402
======== ========
Shares of Beneficial Interest Outstanding (Unlimited number of shares
authorized, no par value):
Institutional Shares 58 (a) 29,974
Class A Shares 52 (a) 3,354
Class B Shares - (a) 250
Class C Shares 2 (a) 174
Advisor Shares ^ - (a) 24
-------- --------
Total 112 33,776
======== ========
Net Asset Value+
Institutional Shares $ 9.78
=========
Class A Shares-- redemption price per share $ 9.78
=========
Class B Shares-- offering price per share* $ 9.78
=========
Class C Shares-- offering price per share* $ 9.78
=========
Advisor Shares-- redemption price per share $ 9.78
========
Maximum Sales Charge
Class A Shares 4.75%
Advisor Shares 3.25%
Maximum Offering Price (100%/(100%-Maximum sales charge) of net asset
value adjusted to the nearest cent) per share
Class A Shares $ 10.27
=========
Advisor Shares $ 10.11
=========
-----------------------
MERGER SCENARIO 3
-----------------------
PRO FORMA PRO FORMA
ADJUSTMENTS FUND
-------- --------
ASSETS:
Investments, at cost $ - $ 859,374
Net unrealized depreciation - (5,569)
-------- --------
Investments, at value - 853,805
Investment in affiliates, at value
(cost $5,187, $17,244, $8,586; and $22,431,
$13,773, $31,017, respectively) - 31,017
-------- --------
Total Investments - 884,822
Interest, dividends and other receivables - 5,150
Receivable for investments sold - 16,174
Receivable for Fund shares sold - 231
Receivable from Advisor and affiliates - 50
Prepaid expenses and other assets - 91
-------- --------
Total Assets - 906,518
-------- --------
LIABILITIES:
Payable for investments purchased - 91,435
Payable for securities loaned - 25,818
Payable for Fund shares redeemed - 1,001
Accrued expenses and other payables:
Payable to Advisor and affiliates - 449
Distribution and administrative services fees - 17
Other - 297
-------- --------
Total Liabilities - 119,017
-------- --------
NET ASSETS:
Paid--in Capital - 835,198
Accumulated net investment income (loss) - 30
Accumulated net realized loss from
investment transactions - (42,158)
Net unrealized depreciation on investments - (5,569)
-------- --------
Net Assets $ - $ 787,501
======== ========
Market value of
securities loaned $ - $25,109
========= =========
Net Assets:
Institutional Shares $ - $ 727,566
Class A Shares - 52,726
Class B Shares - 4,502
Class C Shares - 2,405
Advisor Shares - 302
-------- --------
Total $ - $ 787,501
======== ========
Shares of Beneficial Interest Outstanding (Unlimited number of shares
authorized, no par value):
Institutional Shares (785) (a) 74,386
Class A Shares 19 (a) 5,391
Class B Shares (4) (a) 460
Class C Shares - (a) 247
Advisor Shares ^ 1 (a) 31
-------- --------
Total (769) 80,515
======== ========
Net Asset Value+
Institutional Shares $ 9.78
=========
Class A Shares-- redemption price per share $ 9.78
=========
Class B Shares-- offering price per share* $ 9.78
=========
Class C Shares-- offering price per share* $ 9.78
=========
Advisor Shares-- redemption price per share $ 9.78
========
Maximum Sales Charge
Class A Shares 4.75%
Advisor Shares 3.25%
Maximum Offering Price (100%/(100%-Maximum sales charge) of net asset
value adjusted to the nearest cent) per share
Class A Shares $ 10.27
=========
Advisor Shares $ 10.11
=========
- --------------------------------------------
* If applicable, redemption price per share may be reduced by a deferred
sales charge.
^ Amount shown as "-" represents fewer than five hundred shares for U.S.
Government Bond Fund Advisor Class.
+ Per share amounts may not recalculate due to rounding of net assets
and/or shares outstanding.
(a) See note 2 of the notes to pro forma financial statements.
See notes to pro forma financial statements.
PRO FORMA COMBINED
STATEMENTS OF ASSETS AND LIABILITIES
JANUARY 31, 2007 (UNAUDITED)
(Dollar amounts in thousands except per share prices)
MID CAP
GROWTH TECHNOLOGY
FUND FUND
--------- --------
ASSETS:
Investments, at cost $ 363,134 $ 64,030
Net unrealized appreciation 90,671 1,568
--------- --------
Investments, at value 453,805 65,598
Investment in affiliates, at value
(cost $8,024, and $1,114; and $9,138, respectively) 8,024 1,114
--------- --------
Total Investments 461,829 66,712
Cash - -
Interest, dividends and other receivables 92 3
Receivable for investments sold 2,950 8,035
Receivable for Fund shares sold 48 6
Prepaid expenses and other assets 34 26
--------- --------
Total Assets 464,953 74,782
--------- --------
LIABILITIES:
Payable for investments purchased 3,816 8,779
Payable for securities loaned 82,392 8,589
Payable for Fund shares redeemed 1,081 63
Accrued expenses and other payables:
Payable to Advisor and affiliates 313 60
Distribution and administrative service fees 13 4
Other 56 19
--------- --------
Total Liabilities 87,671 17,514
--------- --------
NET ASSETS:
Paid--in Capital 280,507 97,463
Accumulated net investment loss (889) (360)
Accumulated net realized gain/(loss) from
investment transactions 6,993 (41,403)
Net unrealized appreciation on investments 90,671 1,568
--------- --------
Net Assets $ 377,282 $ 57,268
========= ========
Market value of securities loaned $80,130 $ 8,353
========= ========
Net Assets:
Institutional Shares $ 337,042 $ 48,010
Class A Shares 32,213 3,876
Class B Shares 6,226 879
Class C Shares 1,045 744
Advisor Shares 756 3,759
--------- --------
Total $ 377,282 $ 57,268
========= ========
Shares of Beneficial Interest Outstanding (Unlimited number of shares
authorized, no par value):
Institutional Shares 22,286 4,281
Class A Shares 2,197 351
Class B Shares 450 84
Class C Shares 80 71
Advisor Shares 52 346
--------- --------
Total 25,065 5,133
========= ========
Net Asset Value+
Institutional Shares $15.12 $ 11.22
========= ========
Class A Shares-- redemption price per share $14.67 $ 11.03
========= ========
Class B Shares-- offering price per share* $13.86 $ 10.52
========= ========
Class C Shares-- offering price per share* $13.22 $ 10.49
========= ========
Advisor Shares-- redemption price per share $14.45 $ 10.88
========= ========
Maximum Sales Charge
Class A Shares 5.00% 5.00%
Advisor Shares 3.25% 3.25%
Maximum Offering Price (100%/(100%-Maximum sales charge) of net asset value
adjusted to the nearest cent) per share
Class A Shares $15.44 $ 11.61
========= ========
Advisor Shares $14.94 $ 11.25
========= ========
PRO FORMA PRO FORMA
ADJUSTMENTS FUND
------------ --------
ASSETS:
Investments, at cost $ - $427,164
Net unrealized appreciation - 92,239
-------- --------
Investments, at value - 519,403
Investment in affiliates, at value
(cost $8,024, and $1,114; and $9,138, respectively) - 9,138
-------- --------
Total Investments - 528,541
Cash - -
Interest, dividends and other receivables - 95
Receivable for investments sold - 10,985
Receivable for Fund shares sold - 54
Prepaid expenses and other assets - 60
-------- --------
Total Assets - 539,735
-------- --------
LIABILITIES:
Payable for investments purchased - 12,595
Payable for securities loaned - 90,981
Payable for Fund shares redeemed - 1,144
Accrued expenses and other payables:
Payable to Advisor and affiliates - 373
Distribution and administrative service fees - 17
Other - 75
-------- --------
Total Liabilities - 105,185
-------- --------
NET ASSETS:
Paid--in Capital - 377,970
Accumulated net investment loss - (1,249)
Accumulated net realized gain/(loss) from
investment transactions - (34,410)
Net unrealized appreciation on investments - 92,239
-------- --------
Net Assets $ - $434,550
======== ========
Market value of securities loaned $ - $ 88,483
======== ========
Net Assets:
Institutional Shares $ - $385,052
Class A Shares - 36,089
Class B Shares - 7,105
Class C Shares - 1,789
Advisor Shares - 4,515
-------- --------
Total $ - $434,550
======== ========
Shares of Beneficial Interest Outstanding (Unlimited number of shares
authorized, no par value):
Institutional Shares (1,106) (a) 25,461
Class A Shares (87) (a) 2,461
Class B Shares (21) (a) 513
Class C Shares (15) (a) 136
Advisor Shares (86) (a) 312
-------- --------
Total (1,315) 28,883
======== ========
Net Asset Value+
Institutional Shares $15.12
========
Class A Shares-- redemption price per share $14.67
========
Class B Shares-- offering price per share* $13.86
========
Class C Shares-- offering price per share* $13.22
========
Advisor Shares-- redemption price per share $14.45
========
Maximum Sales Charge
Class A Shares 5.00%
Advisor Shares 3.25%
Maximum Offering Price (100%/(100%-Maximum sales charge) of net asset value
adjusted to the nearest cent) per share
Class A Shares $15.44
========
Advisor Shares $14.94
========
- ---------------
* If applicable, redemption price per share may be reduced by a deferred
sales charge.
+ Per share amounts may not recalculate due to rounding of net assets
and/or shares outstanding.
(a) See note 2 of the notes to pro forma financial statements.
See notes to pro forma financial statements.
PRO FORMA COMBINED
STATEMENTS OF ASSETS AND LIABILITIES
JANUARY 31, 2007 (UNAUDITED)
(Dollar amounts in thousands except per share prices)
PRIME GOVERNMENT
MONEY MARKET MONEY MARKET
FUND FUND
ASSETS: ----------- -------
Investments, at amortized cost and value $1,015,948 $224,037
Repurchase agreements, at cost and value 117,756 -
----------- -------
Total Investments 1,133,704 224,037
Cash ^ - -
Interest receivable 5,749 1,016
Receivable from Advisor and affiliates 34 1
Prepaid expenses and other assets 49 18
----------- -------
Total Assets 1,139,536 225,072
----------- -------
LIABILITIES:
Distributions payable 2,017 580
Accrued expenses and other payables:
Payable to Advisor and affiliates 510 96
Distribution and administrative services fees 129 11
Other 234 34
----------- -------
Total Liabilities 2,890 721
----------- -------
NET ASSETS:
Paid-in Capital 1,136,653 224,276
Accumulated net investment income 85 77
Accumulated net realized loss from investment transactions (92) (2)
----------- -------
Net Assets $1,136,646 $224,351
=========== =======
Net Assets:
Institutional Shares $579,409 $133,678
Class A Shares 551,828 90,673
Class B Shares * 1,112 -
Class C Shares * 1,237 -
Advisor Shares * 3,060 -
----------- -------
Total $1,136,646 $224,351
=========== =======
Shares of Beneficial Interest Outstanding (Unlimited number of shares
authorized, no par value):
Institutional Shares 579,450 133,691
Class A Shares 551,836 90,709
Class B Shares * 1,113 -
Class C Shares * 1,237 -
Advisor Shares * 3,060 -
---------- -------
Total 1,136,696 224,400
========== =======
Net Asset Value
Offering and redemption price per share - Institutional,
Class A, Class B, Class C and Advisor Shares @, * $ 1.00 $ 1.00
======= =======
PRO FORMA PRO FORMA
ADJUSTMENTS FUND
ASSETS: ------------ -------
Investments, at amortized cost and value $ - $1,239,985
Repurchase agreements, at cost and value - 117,756
------- -----------
Total Investments - 1,357,741
Cash ^ - -
Interest receivable - 6,765
Receivable from Advisor and affiliates - 35
Prepaid expenses and other assets - 67
------- -----------
Total Assets - 1,364,608
------- -----------
LIABILITIES:
Distributions payable - 2,597
Accrued expenses and other payables: -
Payable to Advisor and affiliates - 606
Distribution and administrative services fees - 140
Other - 268
------- -----------
Total Liabilities - 3,611
------- -----------
NET ASSETS:
Paid-in Capital - 1,360,929
Accumulated net investment income - 162
Accumulated net realized loss from investment transactions - (94)
------- -----------
Net Assets $ - $1,360,997
======= ===========
Net Assets:
Institutional Shares $ - 713,087
Class A Shares - 642,501
Class B Shares * - 1,112
Class C Shares * - 1,237
Advisor Shares * - 3,060
------- -----------
Total $ - $1,360,997
======= ===========
Shares of Beneficial Interest Outstanding (Unlimited number of shares
authorized, no par value):
Institutional Shares - (a) 713,141
Class A Shares - (a) 642,545
Class B Shares * - (a) 1,113
Class C Shares * - (a) 1,237
Advisor Shares * - (a) 3,060
------- ----------
Total - 1,361,096
======= ==========
Net Asset Value
Offering and redemption price per share - Institutional,
Class A, Class B, Class C and Advisor Shares @, * $ 1.00
=======
- ----------------------------------------
@ If applicable, Class B and Class C redemption price per share may be
reduced by a deferred sales charge.
^ Amount is less than five hundred dollars for Prime Money Market Fund.
* Government Money Market Fund does not offer Class B, C or Advisor
shares.
(a) See note 2 of the notes to pro forma financial statements.
See notes to pro forma financial statements.
PRO FORMA COMBINED
STATEMENTS OF ASSETS AND LIABILITIES
JANUARY 31, 2007 (UNAUDITED)
(Dollar amounts in thousands except per share prices)
QUALITY
GROWTH BALANCED
FUND FUND
--------- ---------
ASSETS:
Investments, at cost $ 625,951 $73,460
Net unrealized appreciation 69,609 3,868
--------- ---------
Investments, at value 695,560 77,328
Investment in affiliates, at value
(cost $50,302 and $2,044; and $52,346, respectively) 50,302 2,044
--------- ---------
Total Investments 745,862 79,372
Cash -- 26
Interest, dividends and other receivables 270 165
Receivable for investments sold 84,207 1,132
Receivable for Fund shares sold 55 20
Receivable from Advisor and affiliates 9 7
Prepaid expenses and other assets 49 28
--------- ---------
Total Assets 830,452 80,750
--------- ---------
LIABILITIES:
Payable for investments purchased 80,021 4,545
Payable for securities loaned 38,393 3,850
Payable for Fund shares redeemed 993 120
Accrued expenses and other payables:
Payable to Advisor and affiliates 597 48
Distribution and administrative service fees 37 14
Other 178 46
--------- ---------
Total Liabilities 120,219 8,623
--------- ---------
NET ASSETS:
Paid--in Capital 594,070 110,342
Accumulated net investment income 1,929 462
Accumulated net realized gain/(loss) from
investment transactions 44,625 (42,545)
Net unrealized appreciation on investments 69,609 3,868
--------- ---------
Net Assets $ 710,233 $72,127
========= =========
Market value of securities loaned $37,339 $ 3,744
========= =========
Net Assets:
Institutional Shares $ 588,105 $32,517
Class A Shares 104,973 31,266
Class B Shares 12,362 6,815
Class C Shares 2,634 1,405
Advisor Shares 2,159 124
--------- ---------
Total $ 710,233 $72,127
========= =========
Shares of Beneficial Interest Outstanding (Unlimited number of shares
authorized, no par value):
Institutional Shares 33,865 2,472
Class A Shares 6,176 2,390
Class B Shares 760 527
Class C Shares 166 109
Advisor Shares 129 10
--------- ---------
Total 41,096 5,508
========= =========
Net Asset Value+
Institutional Shares $17.37 $13.16
========= =========
Class A Shares-- redemption price per share $17.00 $13.08
========= =========
Class B Shares-- offering price per share* $16.26 $12.93
========= =========
Class C Shares-- offering price per share* $15.84 $12.91
========= =========
Advisor Shares-- redemption price per share $16.80 $13.05
========= =========
Maximum Sales Charge
Class A Shares 5.00% 5.00%
Advisor Shares 3.25% 3.25%
Maximum Offering Price (100%/(100%-Maximum sales charge) of net asset value
adjusted to the nearest cent) per share
Class A Shares $17.89 $13.77
========= =========
Advisor Shares $17.36 $13.49
========= =========
PRO FORMA PRO FORMA
ADJUSTMENTS FUND
------------ --------
ASSETS:
Investments, at cost $ - $ 699,411
Net unrealized appreciation - 73,477
-------- --------
Investments, at value - 772,888
Investment in affiliates, at value
(cost $50,302 and $2,044; and $52,346, respectively) - 52,346
-------- --------
Total Investments - 825,234
Cash - 26
Interest, dividends and other receivables - 435
Receivable for investments sold - 85,339
Receivable for Fund shares sold - 75
Receivable from Advisor and affiliates - 16
Prepaid expenses and other assets - 77
-------- --------
Total Assets - 911,202
-------- --------
LIABILITIES:
Payable for investments purchased - 84,566
Payable for securities loaned - 42,243
Payable for Fund shares redeemed - 1,113
Accrued expenses and other payables: -
Payable to Advisor and affiliates - 645
Distribution and administrative service fees - 51
Other - 224
-------- --------
Total Liabilities - 128,842
-------- --------
NET ASSETS:
Paid--in Capital - 704,412
Accumulated net investment income - 2,391
Accumulated net realized gain/(loss) from
investment transactions - 2,080
Net unrealized appreciation on investments - 73,477
-------- --------
Net Assets $ - $ 782,360
======== ========
Market value of securities loaned $ - $41,083
======== ========
Net Assets:
Institutional Shares $ - $ 620,622
Class A Shares - 136,239
Class B Shares - 19,177
Class C Shares - 4,039
Advisor Shares - 2,283
-------- --------
Total $ - $ 782,360
======== ========
Shares of Beneficial Interest Outstanding (Unlimited number of shares
authorized, no par value):
Institutional Shares (600) (a) 35,737
Class A Shares (551) (a) 8,015
Class B Shares (108) (a) 1,179
Class C Shares (20) (a) 255
Advisor Shares (3) (a) 136
-------- --------
Total (1,282) 45,322
======== ========
Net Asset Value+
Institutional Shares $17.37
=========
Class A Shares-- redemption price per share $17.00
=========
Class B Shares-- offering price per share* $16.26
=========
Class C Shares-- offering price per share* $15.84
=========
Advisor Shares-- redemption price per share $16.80
=========
Maximum Sales Charge
Class A Shares 5.00%
Advisor Shares 3.25%
Maximum Offering Price (100%/(100%-Maximum sales charge) of net asset value
adjusted to the nearest cent) per share
Class A Shares $17.89
=========
Advisor Shares $17.36
=========
- --------------------------------------------
* If applicable, redemption price per share may be reduced by a deferred
sales charge.
+ Per share amounts may not recalculate due to rounding of net assets
and/or shares outstanding.
(a) See note 2 of the notes to pro forma financial statements.
See notes to pro forma financial statements.
PRO FORMA COMBINED
STATEMENTS OF OPERATIONS
TWELVE MONTHS ENDED JANUARY 31, 2007 (UNAUDITED) --------------------
(Dollar amounts in thousands) MERGER SCENARIO 1
--------------------
INTER- U.S.
MEDIATE GOVERNMENT
BOND BOND BOND PRO FORMA PRO FORMA
FUND FUND FUND ADJUSTMENTS FUND
------- --------- -------- ----------- --------
INVESTMENT INCOME:
Interest income $14,350 $ 25,114 $2,419 $ - $ 39,464
Dividend income 232 787 180 - 1,019
Income from securities lending 17 16 - - 33
--------- --------- -------- -------- --------
Total Investment Income 14,599 25,917 2,599 - 40,516
--------- --------- --------- -------- --------
EXPENSES:
Investment advisory fees 1,675 2,627 301 238 (b) 4,540
Administrative fees 498 842 96 - 1,340
Distribution services fees-Class A Shares 29 59 59 - 88
Distribution services fees-Class B Shares 27 23 - 50
Distribution services fees-Class C Shares 2 6 13 - 8
Distribution services fees-Advisor Shares ^ 2 - - - 2
Administrative services fees-Class C Shares - 2 5 - 2
Accounting fees 117 147 67 - 264
Registration and filing fees 41 35 32 (40)(b) 36
Transfer and dividend disbursing agent fees 91 126 26 - 217
Custody fees 28 27 8 - 55
Trustees' fees and expenses 13 20 3 - 33
Other expenses 92 198 20 (43)(b) 247
--------- --------- -------- ------- --------
Total expenses 2,615 4,112 630 155 6,882
--------- --------- -------- ------- --------
Less: Waiver and/or reimbursement from
Advisor and/or affiliates (533) (670) (174) (360)(b) (1,563)
Transfer and dividend disbursing agent fees waived (12) (12) - - (24)
Distribution services- Class B Shares waived - (17) - 17 (c) 0
--------- --------- -------- ------- --------
Net Expenses 2,070 3,413 456 (188) 5,295
--------- --------- -------- ------- --------
Net Investment Income 12,529 22,504 2,143 188 35,221
--------- --------- -------- ------- --------
REALIZED AND UNREALIZED GAINS/(LOSSES) FROM
INVESTMENTS:
Net realized gains/(losses) on investment
transactions 198 (7,468) (123) - (7,270)
Change in unrealized appreciation/depreciation on
investments (1,836) 5,206 (147) - 3,370
--------- --------- -------- ------- --------
Net realized and unrealized losses on
investments (1,638) (2,262) (270) - (3,900)
--------- --------- -------- ------- --------
Change in net assets resulting from operations $10,891 $ 20,242 $1,873 $188 $ 31,321
========= ========= ========= ======= =========
-------------------- --------------------
MERGER SCENARIO 2 MERGER SCENARIO 3
-------------------- --------------------
PRO FORMA PRO FORMA PRO FORMA PRO FORMA
ADJUSTMENTS FUND ADJUSTMENTS FUND
----------- -------- ----------- --------
INVESTMENT INCOME:
Interest income $ - $16,769 $ - $ 41,883
Dividend income - 412 - 1,199
Income from securities lending - 17 - 33
-------- -------- -------- --------
Total Investment Income - 17,198 - 43,115
-------- -------- -------- --------
EXPENSES:
Investment advisory fees 27 (b) 2,003 266 (b) 4,869
Administrative fees - 594 - 1,436
Distribution services fees-Class A Shares - 88 - 147
Distribution services fees-Class B Shares - 27 - 50
Distribution services fees-Class C Shares - 15 - 21
Distribution services fees-Advisor Shares ^ - 2 - 2
Administrative services fees-Class C Shares - 5 - 7
Accounting fees - 184 - 331
Registration and filing fees (33)(b) 40 (73)(b) 35
Transfer and dividend disbursing agent fees - 117 - 243
Custody fees - 36 - 63
Trustees' fees and expenses - 16 - 36
Other expenses (33)(b) 79 (76)(b) 234
------- -------- ------- --------
Total expenses (39) 3,206 117 7,474
------- -------- ------- --------
Less: Waiver and/or reimbursement from
Advisor and/or affiliates (80)(b) (787) (330)(b) (1,707)
Transfer and dividend disbursing agent fees waived - (12) - (24)
Distribution services- Class B Shares waived (0)(c) (0) 17 (c) 0
------- -------- ------- --------
Net Expenses (119) 2,407 (195) 5,744
------- -------- ------- --------
Net Investment Income 119 14,791 195 37,371
------- -------- ------- --------
REALIZED AND UNREALIZED GAINS/(LOSSES) FROM
INVESTMENTS:
Net realized gains/(losses) on investment
transactions - 75 - (7,393)
Change in unrealized appreciation/depreciation on
investments - (1,983) - 3,223
------- -------- ------- --------
Net realized and unrealized losses on
investments - (1,908) - (4,170)
------- -------- ------- --------
Change in net assets resulting from operations $ 119 $12,883 $ 195 $ 33,201
======= ========= ======= =========
- -----------------------------------------------------
^ Represents fewer than five hundred dollars for Intermediate Bond Fund
and U.S. Government Bond Fund.
(b), (c) See note 2 of the notes to pro forma financial statements.
See notes to pro forma financial statements.
PRO FORMA COMBINED
STATEMENTS OF OPERATIONS
TWELVE MONTHS ENDED JANUARY 31, 2007 (UNAUDITED)
(Dollar amounts in thousands)
MID CAP
GROWTH TECHNOLOGY PRO FORMA PRO FORMA
FUND FUND ADJUSTMENTS FUND
--------- --------- ----------- ---------
INVESTMENT INCOME:
Dividend income $ 2,541 $ 153 $ - $2,694
Interest income - - - -
Income from securities lending 122 31 - 153
--------- --------- --------- ---------
Total Investment Income 2,663 184 - 2,847
--------- --------- --------- ---------
EXPENSES:
Investment advisory fees 3,066 599 (121)(b) 3,544
Administrative fees 680 114 794
Distribution services fees-Class A Shares 90 11 101
Distribution services fees-Class B Shares 67 11 78
Distribution services fees-Class C Shares 9 6 15
Distribution services fees-Advisor Shares 4 11 15
Administrative services fees-Class C Shares 3 2 5
Accounting fees 118 71 189
Registration and filing fees 42 37 (27)(b) 52
Transfer and dividend disbursing agent fees 142 41 183
Custody fees 18 16 34
Trustees' fees and expenses 20 3 23
Other expenses 101 22 (33)(b) 90
--------- --------- --------- ---------
Total expenses 4,360 944 (181) 5,123
--------- --------- --------- ---------
Less: Waiver and/or reimbursement from
Advisor and/or affiliates (7) - (60)(b) (67)
Transfer and dividend disbursing agent fees waived (12) - - (12)
--------- --------- --------- ---------
Net Expenses 4,341 944 (241) 5,044
--------- --------- --------- ---------
Net Investment Income (Loss) (1,678) (760) 241 (2,197)
--------- --------- --------- ---------
REALIZED AND UNREALIZED GAINS/(LOSSES) FROM
INVESTMENTS:
Net realized gains on investment transactions 50,740 1,038 - 51,778
Change in unrealized appreciation/depreciation on
investments (28,025) (3,277) - (31,302)
--------- --------- -------- ---------
Net realized and unrealized gains/(losses) on
investments 22,715 (2,239) - 20,476
--------- --------- --------- ---------
Change in net assets resulting from operations $21,037 $ (2,999) $ 241 $ 18,279
========= ========= ========= =========
- -------------------------------------------------------
(b) See note 2 of the notes to pro forma financial statements.
See notes to pro forma financial statements.
PRO FORMA COMBINED
STATEMENTS OF OPERATIONS
TWELVE MONTHS ENDED JANUARY 31, 2007 (UNAUDITED)
(Dollar amounts in thousands)
PRIME GOVERNMENT
MONEY MARKET MONEY MARKET PRO FORMA PRO FORMA
FUND FUND ADJUSTMENTS FUND
--------- --------- ----------- ---------
Interest income $ 58,064 $ 10,385 $ - $68,449
Dividend income 186 415 - 601
--------- --------- --------- ---------
Total Investment Income 58,250 10,800 - 69,050
--------- --------- --------- ---------
EXPENSES:
Investment advisory fees 4,555 861 - (b) 5,416
Administrative fees 2,005 376 2,381
Distribution services fees-Class A Shares 1,211 197 1,408
Distribution services fees-Class B Shares 11 - 11
Distribution services fees-Class C Shares 8 - 8
Distribution services fees-Advisor Shares 8 - 8
Administrative services fees-Class C Shares 3 - 3
Accounting fees 239 55 294
Transfer and dividend disbursing agent fees 239 55 294
Custody fees 53 19 72
Trustees' fees and expenses 62 10 72
Other expenses 455 91 (60)(b) 486
--------- --------- --------- ---------
Total expenses 8,849 1,664 (60) 10,453
--------- --------- --------- ---------
Less: Waiver and/or reimbursement from
Advisor and/or affiliates (1,448) (210) (34)(b) (1,692)
Transfer and dividend disbursing agent fees waived (12) - (12)
Distribution services-Class A Shares waived - (79) 79 (c) 0
--------- --------- --------- ---------
Net Expenses 7,389 1,375 (15) 8,749
--------- --------- --------- ---------
Net Investment Income (Loss) 50,861 9,425 15 60,301
--------- --------- --------- ---------
REALIZED AND UNREALIZED GAINS FROM
INVESTMENTS:
Net realized gains on investment transactions 7 - - 7
--------- --------- -------- ---------
Net realized and unrealized gains on
investments 7 - - 7
--------- --------- --------- ---------
Change in net assets resulting from operations $ 50,868 $ 9,425 $ 15 $60,308
========= ========= ========= =========
- -----------------------------------------------------
(b), (c) See note 2 of the notes to pro forma financial statements.
See notes to pro forma financial statements.
PRO FORMA COMBINED
STATEMENTS OF OPERATIONS
TWELVE MONTHS ENDED JANUARY 31, 2007 (UNAUDITED)
(Dollar amounts in thousands)
QUALITY
GROWTH BALANCED PRO FORMA PRO FORMA
FUND FUND ADJUSTMENTS FUND
--------- --------- ----------- ---------
INVESTMENT INCOME:
Dividend income $10,985 $1,252 $ - $ 12,237
Interest income - 1,740 - 1,740
Income from securities lending 146 6 - 152
--------- --------- --------- ---------
Total Investment Income 11,131 2,998 - 14,129
--------- --------- --------- ---------
EXPENSES:
Investment advisory fees 6,204 702 - (b) 6,906
Administrative fees 1,367 163 - 1,530
Distribution services fees-Class A Shares 305 98 - 403
Distribution services fees-Class B Shares 141 78 - 219
Distribution services fees-Class C Shares 26 15 - 41
Distribution services fees-Advisor Shares 12 1 - 13
Administrative services fees-Class C Shares 8 5 - 13
Accounting fees 184 81 - 265
Registration and filing fees 51 41 (31)(b) 61
Transfer and dividend disbursing agent fees 337 76 - 413
Custody fees 32 21 - 53
Trustees' fees and expenses 39 4 - 43
Other expenses 247 35 (43)(b) 239
--------- --------- --------- ---------
Total expenses 8,953 1,320 (74) 10,199
--------- --------- --------- ---------
Less: Waiver and/or reimbursement from
Advisor and/or affiliates (105) (278) 121 (b) (262)
Transfer and dividend disbursing agent fees waived (12) - - (12)
--------- --------- --------- ---------
Net Expenses 8,836 1,042 47 9,925
--------- --------- --------- ---------
Net Investment Income (Loss) 2,295 1,956 (47) 4,204
--------- --------- --------- ---------
REALIZED AND UNREALIZED GAINS/(LOSSES) FROM
INVESTMENTS:
Net realized gains on investment transactions 102,878 2,149 - 105,027
Change in unrealized appreciation/depreciation on
investments (84,413) (931) - (85,344)
--------- --------- -------- ---------
Net realized and unrealized gains on
investments 18,465 1,218 - 19,683
--------- --------- --------- ---------
Change in net assets resulting from operations $20,760 $3,174 $ (47) $ 23,887
========= ========= ========= =========
- -------------------------------------------------------
(b) See note 2 of the notes to pro forma financial statements.
See notes to pro forma financial statements.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
JANUARY 31, 2007 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) GENERAL/BASIS OF COMBINATION
The accompanying unaudited pro forma financial statements are presented to show
the effect of the proposed reorganization of certain funds of Fifth Third Funds
(the "Trust"), a registered management investment company, registered under the
Investment Company Act of 1940, as amended (the "Act"). For each separate
proposed reorganization, the merger proposes to transfer substantially all of
the assets of one or more funds (each a "Fund" and collectively the "Funds") of
the Trust to another fund (the "Acquiring Fund") of the Trust, in exchange for
the respective classes of shares of the Acquiring Fund as described elsewhere in
this proxy statement/prospectus. The use of "Fund", "Funds" or "Acquiring Fund"
is made within the context of each respective but separately proposed
reorganization, of which there are four proposed. Each reorganization is
independent of the other, and none is conditioned on the other.
The four proposed reorganizations are as follows:
a) Fifth Third Mid Cap Growth Fund ("Mid Cap Growth Fund" or the
"Acquiring Fund") and Fifth Third Technology Fund ("Technology Fund" or the
"Fund");
b) Fifth Third Quality Growth Fund ("Quality Growth Fund" or the
"Acquiring Fund") and Fifth Third Balanced Fund ("Balanced Fund" or the "Fund");
c) Fifth Third Prime Money Market Fund ("Prime Money Market Fund" or
the "Acquiring Fund") and Fifth Third Government Money Market Fund ("Government
Money Market Fund" or the "Fund");
d) Fifth Third Bond Fund ("Bond Fund" or the "Acquiring Fund"), Fifth
Third Intermediate Bond Fund ("Intermediate Bond Fund") and Fifth Third U.S.
Government Bond Fund ("U.S. Government Bond Fund"), each a "Fund" and together
the "Funds"; since the reorganization of either of these Funds is not
conditioned on the other, in a combination, three possible merger scenarios
could result and are illustrated within these financial statements:
-Bond Fund acquires Intermediate Bond Fund only: "Merger Scenario 1";
-Bond Fund acquires U.S. Government Bond Fund only: "Merger
Scenario 2";
-Bond Fund acquires both the Funds: "Merger Scenario 3".
Each Acquiring Fund currently consists of five classes of shares: Institutional,
Class A, Class B, Class C and Advisor shares. Class B shares are closed for new
purchases as of May 11, 2007, however, if the reorganization is approved,
Acquiring Fund expects to issue additional shares of Class B to any respective
Class B shareholders of the respective Fund(s) on the Closing Date. Furthermore,
the Trust expects to convert all existing Advisor shares to Class A shares on or
about [October 26, 2007].
Each class of each Acquiring Fund bears its common expenses based on the
relative daily net assets of each class. In addition, a class may have
class-specific expenses charged to the applicable class. Dividends and capital
gain distributions, if any, are declared separately for each class. Differences
in income dividend rates per share are generally due to differences in separate
class-specific expenses.
Each "Pro Forma Fund" as identified in these financial statements represents the
combined fund(s) after each respective merger, with each Acquiring Fund treated
as the accounting survivor for financial reporting purposes. Management believes
each Acquiring Fund to be the accounting survivor because these funds'
investment objective/style, fee and expense structure would remain intact with
each respective combined fund.
Under the terms of the Plans of Reorganization, the exchange of assets of each
Fund(s) for the respective classes of shares of each respective Acquiring Fund
will be treated and accounted for as a tax-free reorganization. The
reorganization would be accomplished by an acquisition of the net assets of each
Fund(s) in exchange for the respective classes of shares of each respective
Acquiring Fund at net asset value. In accordance with accounting principles
generally accepted in the United States of America, the historical cost of
investment securities will be carried forward to each Acquiring Fund and the
results of operations for pre-combination periods of each Acquiring Fund will
not be restated. The unaudited pro forma Schedules of Investments and the
unaudited pro forma Statements of Assets and Liabilities have been prepared as
though the acquisition had been effective on January 31, 2007. The unaudited pro
forma Statements of Operations have been prepared as though the acquisition had
been effective February 1, 2006 to report operations for the twelve months ended
January 31, 2007.
The accompanying pro forma financial statements should be read in conjunction
with the financial statements of each Fund(s) and each respective Acquiring
Fund, which are included in their semi-annual report dated January 31, 2007.
(2) PRO FORMA ADJUSTMENTS
The Pro Forma Adjustments in the accompanying pro forma financial statements are
described below, which reflect the impact of each respective merger.
(a) To adjust shares outstanding of Pro Forma Fund based on combining the
Fund(s) at the Acquiring Fund's net asset value for each respective
class of shares.
(b) To adjust advisory fees using Acquiring Fund's advisory fee rate for
each Pro Forma Fund at the combined average daily net assets of the
Fund(s) and the Acquiring Fund;
to remove duplicate audit/tax, printing, state registration and other
fees and expenses;
to adjust the waivers and reimbursements by the investment advisor
and/or administrator as a result of the annual expense limitation of
the Acquiring Fund at the combined average daily net assets of the
Fund(s) and the Acquiring Fund.
(c) To adjust 12b-1 distribution/service fees to eliminate certain
voluntary waivers for the Fund by the Distributor.
No adjustments have been made to investments owned on the Pro Forma Schedules of
Investments as the investments of the Pro Forma Fund are not unsuitable nor
contrary to the investment objectives of the Pro Forma Fund.
(3) SECURITIES VALUATIONS
For funds of the Trust that are not money market funds:
Portfolio securities listed or traded on domestic securities exchanges or the
NASDAQ/NMS, including American Depositary Receipts ("ADR"), are valued at the
closing price on the exchange or system where the security is principally
traded. If there have been no sales for that day on any exchange or system, a
security is valued at the mean between the closing bid and asked quotes on the
exchange or system where the security is principally traded, or at the NASDAQ
Official Closing Price ("NOCP"), if applicable. Corporate debt securities and
debt securities of U.S. issuers (other than short-term investments maturing in
60 days or less), including municipal securities, are valued at fair value on
the basis of the closing bid as supplied by an independent pricing service
approved by the Fifth Third Funds Board of Trustees ("Trustees") or valuations
provided by dealers. Short-term investments maturing in 60 days or less are
valued at either amortized cost, which approximates market value or at original
cost, which combined with accrued interest approximates market value.
Investments in open-end investment companies are valued at net asset value as
reported by such investment companies. Investments for which such quotations are
not readily available, or quotations which appear suspect, are valued at fair
value as determined in good faith by the Pricing Committee under the direction
of the Trustees. In addition, if events materially affecting the value of
foreign securities occur between the time when the exchange on which they are
traded closes and the time when the Acquiring Fund's net asset values are
calculated, such securities may be valued using fair value pricing in accordance
with procedures adopted by the Trustees.
For the money market funds of the Trust:
Portfolio securities are valued at either amortized cost, which approximates
market value, or at original cost, which, combined with accrued interest,
approximates market value. Under the amortized cost method, discount or premium
is accreted or amortized on a constant basis to the maturity of the security.
Investments in other open-end investment companies are valued at net asset value
as reported by such investment companies.
(4) RELATED PARTY TRANSACTIONS
INVESTMENT ADVISORY FEE-- Fifth Third Asset Management, Inc. ("FTAM"), a wholly
owned subsidiary of Fifth Third Bank, is the Advisor to the funds of the Trust
and receives for its services investment advisory fees accrued daily and paid
monthly, based upon a fund's average daily net assets as follows for the
applicable Acquiring/Pro Forma Funds:
0.80% - Mid Cap Growth Fund
0.80% - Quality Growth Fund
0.60% - Bond Fund
0.40% - Prime Money Market Fund
ADMINISTRATIVE FEE- FTAM serves as administrator to the funds of the Trust. The
administrator generally assists in all aspects of fund administration and
operations including providing certain administrative personnel and services
necessary to operate the funds of the Trust. For its services, FTAM receives
administrative fees accrued daily and paid monthly, based upon the Trust average
daily net assets. This amount is allocated to each fund of the Trust based on
its relative average daily net assets to that of the Trust. Administrative fees
are as follows:
Rate Trust Average Daily Net Assets
-------- -------------------------------------
0.20% first $1 billion
0.18% between $1 billion and $2 billion
0.17% between $2 billion and $15 billion
0.15% more than $15 billion
In addition, there shall be an annual flat fee for each class in excess of four
classes of each fund in the Trust and each fund is subject to an annual minimum
fee.
Pursuant to a separate agreement with FTAM, BISYS Fund Services Limited
Partnership ("BISYS"), a wholly owned subsidiary of The BISYS Group, Inc.,
performed sub-administrative services on behalf of the Trust including providing
certain administrative personnel and services necessary to operate the Trust,
until May 31, 2007 after which State Street Bank and Trust Company ("State
Street") was appointed by FTAM as sub-administrator. State Street is neither an
affiliate nor an affiliate of the affiliates of the funds of the Trust. BISYS
was compensated for its sub-administration services at rates based upon average
daily net assets and a per class fee. Under a Compliance Services Agreement
between the Trust, Fifth Third Bank, and BISYS (the "CCO Agreement"), BISYS made
an employee available to serve as the Trust's Chief Compliance Officer (the
"CCO"). Under the CCO Agreement, BISYS also provided infrastructure and support
in implementing the written policies and procedures comprising the Trust's
compliance program, including support services to the CCO. This agreement was
terminated May 31, 2007. The Board of Trustees designated a new CCO who assumed
such responsibilities February 20, 2007.
In its capacity as Advisor and Administrator, FTAM has an expense limitation
agreement with certain funds of the Trust. Under the terms of the expense
limitation agreement, to the extent that ordinary operating expenses incurred by
a fund in any fiscal year exceed the expense limit for such fund, such excess
amount will be the liability of the Advisor and Administrator. If the operating
expenses are less than the expense limit for the fund, the Advisor and
Administrator shall be entitled to reimbursement of the fees waived or reduced
to the extent that the operating expenses and the amount reimbursed do not
exceed such expense limit for the fund. Such reimbursement shall be paid only
while the expense limitation agreement is in effect and only if such amount
paid, together with all other amounts reimbursed under this plan in the fiscal
year, does not cause the fund to exceed the expense limit.
The ratios of expenses to average net assets without and with
waivers/reimbursements (limitations in effect as of November 29, 2006) and based
upon the information contained with in the pro forma statements of operations as
of January 31, 2007 are as follows. To the extent waivers are not contractual,
they are voluntary.
MID CAP GROWTH FUND
CLASS OF SHARES ACQUIRING FUND FUND PRO FORMA FUND
----------------- ------------- ----------- -----------
WITHOUT WAIVERS/REIMBURSEMENTS
- ------------------------------
Institutional 1.09% 1.51% 1.11%
Class A 1.34% 1.76% 1.36%
Class B 2.09% 2.51% 2.11%
Class C 2.09% 2.51% 2.11%
Advisor 1.59% 2.01% 1.61%
WITH WAIVERS/REIMBURSEMENTS
- ------------------------------
Institutional 1.09% 1.51% 1.09%
Class A 1.34% 1.76% 1.34%
Class B 2.09% 2.51% 2.09%
Class C 2.09% 2.51% 2.09%
Advisor 1.59% 2.01% 1.59%
QUALITY GROWTH FUND
CLASS OF SHARES ACQUIRING FUND FUND PRO FORMA FUND
----------------- ------------- ----------- -----------
Without waivers, reimbursements
- ------------------------------
Institutional 1.09% 1.28% 1.10%
Class A 1.34% 1.53% 1.35%
Class B 2.09% 2.28% 2.10%
Class C 2.09% 2.28% 2.10%
Advisor 1.59% 1.78% 1.60%
With waivers, reimbursements
- ------------------------------
Institutional 1.08% 0.96% 1.07%
Class A 1.33% 1.21% 1.32%
Class B 1.33% 1.96% 2.07%
Class C 2.08% 1.96% 2.07%
Advisor 1.58% 1.46% 1.57%
PRIME MONEY MARKET FUND
CLASS OF SHARES ACQUIRING FUND FUND PRO FORMA FUND
----------------- ------------- ----------- -----------
Without waivers, reimbursements
- ------------------------------
Institutional 0.67% 0.68% 0.67%
Class A 0.92% 0.83% 0.92%
Class B 1.67% N/A 1.67%
Class C 1.67% N/A 1.67%
Advisor 1.17% N/A 1.17%
With waivers, reimbursements
- ------------------------------
Institutional 0.54% 0.58% 0.54%
Class A 0.79% 0.73% 0.79%
Class B 1.54% N/A 1.54%
Class C 1.54% N/A 1.54%
Advisor 1.04% N/A 1.04%
BOND FUND
MERGER MERGER MERGER
SCENARIO 1 SCENARIO 2 SCENARIO 3
----------- ----------- ----------
INTERMEDIATE U.S. PRO FORMA
CLASS OF SHARES ACQUIRING FUND BOND FUND GOVERNMENT BOND PRO FORMA FUND PRO FORMA FUND FUND
---------------- ------------- -------------- ----------- ----------- ----------- ----------
Without waivers, reimbursements
- ------------------------------
Institutional 0.92% 0.84% 1.01% 0.89% 0.92% 0.89%
Class A 1.17% 1.09% 1.26% 1.14% 1.17% 1.14%
Class B 1.92% 1.84% N/A 1.89% 1.92% 1.89%
Class C 1.92% 1.84% N/A 1.89% 1.92% 1.89%
Advisor 1.42% 1.34% 1.51% 1.39% 1.42% 1.39%
With waivers, reimbursements
- ------------------------------
Institutional 0.72% 0.70% 0.69% 0.68% 0.68% 0.68%
Class A 0.97% 0.95% 0.94% 0.93% 0.93% 0.93%
Class B 1.72% 0.95% N/A 1.68% 1.68% 1.68%
Class C 1.72% 1.70% N/A 1.68% 1.68% 1.68%
Advisor 1.22% 1.20% 1.19% 1.18% 1.18% 1.18%
U.S. Government Bond does not have Class B shares as of May 11, 2007.
Fees may be voluntarily reduced or reimbursed by the Advisor or affiliates to
assist a fund in maintaining competitive expense ratios.
DISTRIBUTION SERVICES FEE--The Trust has a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Fifth Third Funds Distributor, Inc., a
wholly owned subsidiary of The BISYS Group, Inc., served as the Trust's
principal distributor until May 11, 2007. As of May 14, 2007, ALPS Funds
Distributor, Inc. d/b/a FTAM Funds Distributor, Inc. began serving in this
capacity.
ADMINISTRATIVE SERVICES FEE--The Trust has an Administrative Services Agreement
with its distributor with respect to Class C Shares.
TRANSFER AND DIVIDEND DISBURSING AGENT--BISYS Fund Services Ohio, Inc. ("BISYS
Ohio"), a wholly owned subsidiary of The BISYS Group, Inc., served as transfer
and dividend disbursing agent to the funds of the Trust until May 11, 2007.
Boston Financial Data Services ("BFDS"), an affiliate of State Street, assumed
these functions for the Trust as of May 14, 2007. BFDS is neither an affiliate
nor an affiliate of the affiliates of the funds of the Trust. BISYS Ohio was
paid fees based on average daily net assets of each fund of the Trust, subject
to minimums. In addition, there was an annual flat fee for each additional class
of shares. BFDS earns fees from the funds of the Trust based upon various
factors such as the number of shareholder accounts; BFDS is reimbursed for
various out of pocket expenses on behalf of the funds of the Trust.
Pursuant to a separate agreement, BISYS Ohio retained the Advisor to perform
certain services for the Trust and each fund of the Trust, for which the Advisor
received a fee of 0.005% from BISYS Ohio computed as a percentage of the average
daily net assets of each fund of the Trust. This agreement was terminated May
11, 2007. Pursuant to a Services Agreement with the Trust dated May 14, 2007,
FTAM provides
certain services similar to that under the former agreement on behalf of the
Trust. Under this agreement, FTAM's fees are paid monthly and are accrued daily
based upon relative average daily net assets of each fund of the Trust at the
aggregate annual rate of $370,000.
ACCOUNTING AND CUSTODY FEES-- FTAM maintains the accounting records of the funds
of the Trust. Accounting fees are computed as follows, subject to annual
minimums:
Rate Average Daily Net Assets of each fund
-------- -------------------------------------
0.02% up to $500 million
0.015% between $500 million and $1 billion
0.01% more than $1 billion
In addition, there is an annual flat fee for each additional class of shares of
a fund. Pursuant to a separate agreement with FTAM, BISYS Ohio performed
sub-accounting services on behalf of the Trust until May 31, 2007, after which
time State Street was appointed by FTAM as sub-accountant.
Fifth Third Bank served as custodian to the funds of the Trust until May 31,
2007, after which State Street was appointed custodian. Custody fees are paid by
the funds of the Trust and are based on various levels of relative average daily
net assets of each fund, plus out-of-pocket expenses. In addition, transaction
charges apply.
Certain former officers of the Trust were affiliated with the BISYS companies,
but were not paid any fees directly by the Trust for serving as officers of the
Trust.
(5) CAPITAL SHARES
Each Pro Forma Fund's net asset values per share assume the issuance of class
shares of each Acquiring Fund that would have been issued at January 31, 2007 in
connection with the proposed reorganization. The number of shares assumed to be
issued is equal to the total net assets of each class of shares of the Fund(s)
as of January 31, 2007 divided by the net asset value per share of the
respective class of shares of each respective Acquiring Fund as of January 31,
2007. The pro forma number of shares outstanding, by class, for the Pro Forma
Fund as of January 31, 2007 is as follows (amounts in thousands):
Mid Cap Growth Fund
Acquiring Fund Shares Additional Shares Issued in Pro Forma Fund Total Shares
Outstanding Pre Combination Reorganization Outstanding
Class ----------------- ------------------ -----------------
------------------
Institutional 22,286 3,175 25,461
Class A 2,197 264 2,461
Class B 450 63 513
Class C 80 56 136
Advisor 52 260 312
--------------- --------------- ---------------
Total 25,065 3,818 28,883
Quality Growth Fund
Acquiring Fund Shares Additional Shares Issued in Pro Forma Fund Total Shares
Outstanding Pre Combination Reorganization Outstanding
Class ----------------- ------------------ -----------------
------------------
Institutional 33,865 1,872 35,737
Class A 6,176 1,839 8,015
Class B 760 419 1,179
Class C 166 89 255
Advisor 129 7 136
--------------- --------------- ---------------
Total 41,096 4,226 45,322
Prime Money Market Fund
Acquiring Fund Shares Additional Shares Issued in Pro Forma Fund Total Shares
Outstanding Pre Combination Reorganization Outstanding
Class ----------------- ------------------ -----------------
------------------
Institutional 579,450 133,691 713,141
Class A 551,836 90,709 642,545
Class B 1,113 N/A 1,113
Class C 1,237 N/A 1,237
Advisor 3,060 N/A 3,060
--------------- --------------- ---------------
Total 1,136,696 224,400 1,361,096
N/A - Government Money Market Fund does not have these classes of shares.
Bond Fund MERGER SCENARIO 1:
Acquiring Fund Shares Additional Shares Issued in Pro Forma Fund Total Shares
Outstanding Pre Combination Reorganization Outstanding
Class ----------------- ------------------ -----------------
------------------
Institutional 27,283 44,412 71,695
Class A 1,059 2,037 3,096
Class B 250 210 460
Class C 27 73 100
Advisor 24 7 31
--------------- --------------- ---------------
Total 28,643 46,739 75,382
Bond Fund MERGER SCENARIO 2:
Acquiring Fund Shares Additional Shares Issued in Pro Forma Fund Total Shares
Outstanding Pre Combination Reorganization Outstanding
Class ----------------- ------------------ -----------------
------------------
Institutional 27,283 2,691 29,974
Class A 1,059 2,295 3,354
Class B 250 N/A 250
Class C 27 147 174
Advisor 24 - ^ 24
--------------- --------------- ---------------
Total 28,643 5,133 33,776
N/A - U.S. Government Bond Fund does not have Class B shares.
^ - Represents fewer than 500 shares.
Bond Fund MERGER SCENARIO 3:
Acquiring Fund Shares Additional Shares Issued in Pro Forma Fund Total Shares
Outstanding Pre Combination Reorganization Outstanding
Class ----------------- ------------------ -----------------
------------------
Institutional 27,283 47,103 74,386
Class A 1,059 4,332 5,391
Class B 250 210 460
Class C 27 220 247
Advisor 24 7 31
--------------- --------------- ---------------
Total 28,643 51,872 80,515
U.S. Government Bond Fund does not have Class B shares and has fewer than 500
shares outstanding in Advisor Class.
(6) FEDERAL TAX INFORMATION
Each fund of the Trust has elected to be taxed as a "regulated investment
company" under the Internal Revenue Code, as amended (the "Code"). After the
reorganization, each Acquiring Fund intends to continue to qualify as a
regulated investment company, if such qualification is in the best interests of
its shareholders, by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Code, and to make
distributions sufficient to relieve it from all, or substantially all, Federal
income or excise taxes.
Under the terms of the Plans of Reorganization, the exchange of assets of each
Fund(s) for the respective classes of shares of each Acquiring Fund will be
treated and accounted for as a tax-free reorganization. Based upon that
assumption, the tax cost of investments will remain unchanged within each
combined fund. In a tax-free reorganization, so called "built-in" capital losses
of the Fund(s), if any, are carried over to the respective Acquiring Fund on the
closing date. There are several provisions of the Code that limit the ability of
one fund to utilize the capital losses of another fund after the closing date.
PART C. OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Article XI, Sections 1, 2 and 3 of the Registrant's Declaration of Trust
provides as follows:
Section 1. Limitation of Personal Liability and Indemnification of
Shareholders.
The Trustees, officers, employees or agents of the Trust shall have no
power to bind any Shareholder of any Series or Class personally or to call upon
such Shareholder for the payment of any sum of money or assessment whatsoever,
other than such as the Shareholder may at any time agree to pay by way of
subscription to any Shares or otherwise.
No Shareholder or former Shareholder of any Series or Class shall be
liable solely by reason of his being or having been a Shareholder for any debt,
claim, action, demand, suit, proceeding, judgment, decree, liability or
obligation of any kind, against, or with respect to the Trust or any Series or
Class arising out of any action taken or omitted for or on behalf of the Trust
or such Series or Class, and the Trust or such Series or Class shall be solely
liable therefor and resort shall be had solely to the property of the relevant
Series or Class of the Trust for the payment or performance thereof.
Each Shareholder or former Shareholder of any Series or Class (or their
heirs, executors, administrators or other legal representatives or, in case of a
corporate entity, its corporate or general successor) shall be entitled to be
indemnified and reimbursed by the Trust to the full extent of such liability and
the costs of any litigation or other proceedings in which such liability shall
have been determined, including, without limitation, the fees and disbursements
of counsel if, contrary to the provisions hereof, such Shareholder or former
Shareholder of such Series or Class shall be held to be personally liable. Such
indemnification and reimbursement shall come exclusively from the assets of the
relevant Series or Class.
The Trust shall, upon request by a Shareholder or former Shareholder,
assume the defense of any claim made against any Shareholder for any act or
obligation of the Trust or any Series or Class and satisfy any judgment thereon.
Section 2. Limitation of Personal Liability of Trustees, Officers,
Employees or Agents of the Trust
No Trustee, officer, employee or agent of the Trust shall have the
power to bind any other Trustee, officer, employee or agent of the Trust
personally. The Trustees, officers, employees or agents of the Trust incurring
any debts, liabilities or obligations, or in taking or omitting any other
actions for or in connection with the Trust are, and each shall be deemed to be,
acting as Trustee, officer, employee or agent of the Trust and not in his own
individual capacity.
Trustees and officers of the Trust shall be liable for their willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee or officer, as the case may be,
and for nothing else.
Section 3. Express Exculpatory Clauses and Instruments
The Trustees shall use every reasonable means to assure that all
persons having dealings with the Trust or any Series or Class shall be informed
that the property of the Shareholders and the Trustees, officers, employees and
agents of the Trust or any Series or Class shall not be subject to claims
against or obligations of the Trust or any other Series or Class to any extent
whatsoever. The Trustees shall cause to be inserted in any written agreement,
undertaking or obligation made or issued on behalf of the Trust or any Series or
Class (including certificates for Shares of any Series or Class) an appropriate
reference to the provisions of this Declaration, providing that neither the
Shareholders, the Trustees, the officers, the employees nor any agent of the
Trust or any Series or Class shall be liable thereunder, and that the other
parties to such instrument shall look solely to the assets belonging to the
relevant Series or Class for the payment of any claim thereunder or for the
performance thereof; but the omission of such provisions from any such
instrument shall not render any Shareholder, Trustee, officer, employee or agent
1
liable, nor shall the Trustee, or any officer, agent or employee of the Trust or
any Series or Class be liable to anyone for such omission. If, notwithstanding
this provision, any Shareholder, Trustee, officer, employee or agent shall be
held liable to any other person by reason of the omission of such provision from
any such agreement, undertaking or obligation, the Shareholder, Trustee,
officer, employee or agent shall be indemnified and reimbursed by the Trust.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers, and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Registrant of expenses incurred or
paid by a trustee, officer, or controlling person of Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
trustee, officer, or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Indemnification for the Group's principal underwriter is provided for
in the Distribution Agreements incorporated herein by reference as Exhibit 7(i)
and Exhibit 7(ii).
In addition, the Trust maintains a directors and officer liability
insurance policy with a maximum coverage of $20,000,000.
ITEM 16. EXHIBITS
(1) Amended and Restated Declaration of Trust of the Registrant is
incorporated by reference to Exhibit (a) to Registrant's Post-Effective
Amendment No. 53 on Form N-1A (filed on November 22, 2004).
(2) Amended and Restated By-Laws of the Registrant is incorporated by
reference to Exhibit (b) to Registrant's Post-Effective Amendment No.
57 on Form N-1A (filed November 22, 2005).
(3) Not applicable.
(4) Form of Agreement and Plan of Reorganization is filed herewith.
(5) Article III, Sections 1,4 and 5, Article VI, Sections 2, 3, and 7,
Article VIII, Sections 1, 2, and 3, Article IX, Sections 1, 2, 5,
Article XI, Sections 1 and 3, and Article XII, Sections 3, 4, and 5, of
the Amended and Restated Declaration of Trust dated November 6, 2003 is
incorporated by reference to Exhibit (a) to Post-Effective Amendment
No. 53 to the Registrant's Post-Effective Amendment No. 53 on Form N-1A
(filed on November 22, 2004).
(6) (i) Investment Advisory Contract dated November 6, 2003 between
the Registrant and Fifth Third Asset Management, Inc.,
including Amended Schedule A is incorporated by reference to
Exhibit (d)(i) to Registrant's Post-Effective Amendment No. 53
on Form N-1A (filed November 22, 2004).
(A) Amended Schedule A dated September 29, 2005 to the
Investment Advisory Contract is incorporated by
reference to Exhibit (d)(i)(A) to Registrant's
Post-Effective Amendment No. 58 on Form N-1A (filed
September 28, 2006).
(ii) Sub-Advisory Agreement for the Fifth Third International
Equity Fund between Fifth Third Asset Management, Inc. and
Morgan Stanley Asset Management, Inc. dated April 30, 2001 is
incorporated by reference to Registrant's Post-Effective
Amendment No. 48 on Form N-1A (filed May 7, 2003).
2
(A) Amendment dated November 1, 2003 to the Sub-Advisory
Agreement is incorporated by reference to Exhibit
(d)(ii)(A) to Registrant's Post-Effective Amendment
No. 58 on Form N-1A (filed September 28, 2006).
(iii) Sub-Advisory Agreement for the Fifth Third High Yield Bond
Fund between Fifth Third Asset Management, Inc. and Fort
Washington Investment Advisors, Inc. is incorporated by
reference to Exhibit (d)(iii) to Registrant's Post-Effective
Amendment No. 58 on form N-1A (filed September 28, 2006).
(7) (i) Form of Distribution Agreement between the Registrant and ALPS
Distributors Inc. d/b/a FTAM Funds Distributors Inc.,
including Schedule A, is incorporated by reference to Exhibit
(e)(i) to Registrant's Post-Effective Amendment No. 65 on Form
N-1A (filed July 2, 2007).
(ii) Form of Distribution Agreement between the Registrant and FTAM
Funds Distributors Inc., including Schedule A, is incorporated
by reference to Exhibit (e)(ii) to Registrant's Post-Effective
Amendment No. 65 on Form N-1A (filed July 2, 2007).
(8) Not applicable.
(9) Form of Custodian Agreement between the Registrant and State Street
Bank and Trust Company is incorporated by reference to Exhibit (g)(i)
to Registrant's Post-Effective Amendment No. 65 on Form N-1A (filed
July 2, 2007).
(10) (i) Form of Amended and Restated Shareholder Servicing Plan is
incorporated by reference to Registrant's Post-Effective
Amendment No. 52 on Form N-1A (filed November 21, 2003).
(A) Form of Amended Schedule A to the Shareholder
Servicing Plan is incorporated by reference to
Exhibit (h)(v)(A) to Registrant's Post-Effective
Amendment No. 57 on Form N-1A (filed November 22,
2005).
(ii) Amended and Restated Rule l2b-1 Plan dated December 1, 1995,
as amended May 11, 2007, including Exhibits A, B, C, and D, is
incorporated by reference to Exhibit (m)(i) to Registrant's
Post-Effective Amendment No. 65 on Form N-1A (filed July 2,
2007).
(A) Combined Rule 12b-1 Agreement dated September 19,
2001 is incorporated by reference to Registrant's
Post-Effective Amendment No. 45 on Form N-1A (filed
September 13, 2002).
(i) Form of Amended Exhibit A to the Combined
Rule 12b-1 Agreement is incorporated by
reference to Registrant's Post-Effective
Amendment No. 45 on Form N-1A (filed
September 13, 2002).
(ii) Form of Amended Combined Rule 12b-1
Agreement is incorporated by reference to
Registrant's Post-Effective Amendment No. 52
on Form N-1A (filed November 26, 2003).
(B) Investment B Rule 12b-1 Plan dated April 1, 2000 is
incorporated by reference to Registrant's
Post-Effective Amendment No. 35 on Form N-1A (filed
September 29, 2000).
(i) Form of Amended Exhibit A to the Investment
B Rule 12b-1 Plan is incorporated by
reference to Exhibit (m)(iii)(A) to
Registrant's Post-Effective Amendment No. 57
on Form N-1A (filed November 22, 2005).
(iii) Amended Multiple Class Plan dated March 30, 2005 is
incorporated by reference to Exhibit (n) to Registrant's
Post-Effective Amendment No. 54 on Form N-1A (filed June 2,
2005).
3
(A) Amended Exhibit A to the Multiple Class Plan is
incorporated by reference to Exhibit (n)(i) to
Registrant's Post-Effective Amendment No. 57 on Form
N-1A (filed November 22, 2005).
(11) Opinion and Consent of Ropes & Gray LLP regarding securities is filed
herewith.
(12) Opinion and Consent of Ropes & Gray LLP regarding tax matters will be
filed by amendment.
(13) (i) Administration Agreement between the Registrant and Fifth
Third Asset Management, Inc. is incorporated by reference to
Exhibit (h)(i) to Registrant's Post-Effective Amendment No. 65
on Form N-1A (filed July 2, 2007).
(ii) Form of Sub-Administration Agreement between Fifth Third Asset
Management, Inc. and State Street Bank and Trust Company is
incorporated by reference to Exhibit (h)(ii) to Registrant's
Post-Effective Amendment No. 65 on Form N-1A (filed July 2,
2007).
(iii) Accounting Services Agreement dated May 18, 2007 between the
Registrant and Fifth Third Asset Management, Inc. is
incorporated by reference to Exhibit (h)(iii) to Registrant's
Post-Effective Amendment No. 65 on Form N-1A (filed July 2,
2007).
(iv) Form of Investment Sub-Accounting Agreement between Fifth
Third Asset Management and State Street Bank and Trust Company
is incorporated by reference to Exhibit (h)(iv) to
Registrant's Post-Effective Amendment No. 65 on Form N-1A
(filed July 2, 2007).
(v) Form of Transfer Agency and Service Agreement between the
Registrant and Boston Financial Data Services, Inc. is
incorporated by reference to Exhibit (h)(v) to Registrant's
Post-Effective Amendment No. 65 on Form N-1A (filed July 2,
2007).
(vi) Form of Services Agreement between the Registrant and Fifth
Third Asset Management, Inc. is incorporated by reference to
Exhibit (h)(vi) to Registrant's Post-Effective Amendment No.
65 on Form N-1A (filed July 2, 2007).
(vii) Form of Securities Lending Authorization Agreement between the
Registrant and State Street Bank and Trust Company, including
Schedules A, B, C and D, is incorporated by reference to
Exhibit (h)(viii) to Registrant's Post-Effective Amendment No.
65 on Form N-1A (filed July 2, 2007).
(14) Consent of PricewaterhouseCoopers LLP is filed herewith.
(15) Not applicable.
(16) Powers of Attorney are filed herewith.
(17) (i) Stock and Bond and Money Market Mutual Funds and Asset
Allocation Funds Class A, Class B, Class C and Advisor Shares
Prospectus of the Fifth Third Funds, dated November 29, 2006,
is filed herewith.
(ii) Stock and Bond Mutual Funds and Asset Allocation Funds
Institutional Shares Prospectus of the Fifth Third Funds,
dated November 29, 2006, is filed herewith.
(iii) Money Market Mutual Funds Institutional Shares Prospectus of
the Fifth Third Funds, dated November 29, 2006, is filed
herewith.
(iv) Combined Statement of Additional Information of the Fifth
Third Funds, dated November 29, 2006, as amended, is filed
herewith.
4
(vi) Form of Proxy Card is filed herewith.
ITEM 17. UNDERTAKINGS
(1) The registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is a part
of this registration statement by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c) of the Securities
Act, the reoffering prospectus will contain the information called for
by the applicable registration form for reofferings by persons who may
be deemed underwriters, in addition to the information called for by
the other items of the applicable form.
(2) The registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
5
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant in the City of Washington, District of
Columbia, on the 29th day of August 2007.
FIFTH THIRD FUNDS
/s/ E. Keith Wirtz
E. Keith Wirtz
President
As required by the Securities Act of 1933, this Registration Statement has been
signed in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ E. Keith Wirtz President August 29, 2007
- ------------------
E. Keith Wirtz (Principal Executive Officer)
/s/ Christopher Bell Treasurer August 29, 2007
- -------------------- (Principal Financial and
Christopher Bell Accounting Officer)
* /s/ Edward Burke Carey Chairman and Trustee August 29, 2007
- ------------------------
Edward Burke Carey
* /s/ David J. Durham Trustee August 29, 2007
- ---------------------
David J. Durham
* /s/ J. Joseph Hale, Jr. Trustee August 29, 2007
- --------------------------
J. Joseph Hale, Jr.
* /s/ John E. Jaymont Trustee August 29, 2007
- ---------------------
John E. Jaymont
* /s/ David J. Gruber Trustee August 29, 2007
- ---------------------
David J. Gruber
*By: /s/ Alyssa Albertelli
---------------------
Alyssa Albertelli, as Attorney-in-fact pursuant to Powers of Attorney
incorporated herein by reference.
6
EXHIBIT INDEX
(4) Form of Agreement and Plan of Reorganization
(11) Opinion and Consent of Ropes & Gray LLP regarding securities
(14) Consent of PricewaterhouseCoopers LLP
(16) Powers of Attorney
(17)(i) Stock and Bond and Money Market Mutual Funds and Asset Allocation
Funds Class A, Class B, Class C and Advisor Shares Prospectus
(17)(ii) Stock and Bond Mutual Funds and Asset Allocation Funds Institutional
Shares Prospectus
(17)(iii) Money Market Mutual Funds Institutional Shares Prospectus
(17)(iv) Combined Statement of Additional Information
(17)(vi) Form of Proxy Card
7