UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-5900
EXPEDITION FUNDS
(Exact name of registrant as specified in charter)
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101 Federal Street
Boston, MA 02110
(Address of principal executive offices) (Zip code)
SEI Corporation
One Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-342-5734
DATE OF FISCAL YEAR END: OCTOBER 31, 2004
DATE OF REPORTING PERIOD: OCTOBER 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
[Graphics Omitted]
Expedition Funds GUIDING YOUR WAY 2004 Annual Report
[Logo Omitted] EXPEDITION FUNDS(R)
Table of Contents
Letter to Our Shareholders ................................................. 1
Management's Discussion and Analysis ....................................... 4
Report of Independent Registered Public Accounting Firm .................... 14
Statements of Net Assets ................................................... 15
Statements of Operations ................................................... 50
Statements of Changes in Net Assets ........................................ 53
Financial Highlights ....................................................... 56
Notes to Financial Statements .............................................. 62
Trustees and Officers of the Trust ......................................... 72
Disclosure of Fund Expenses ................................................ 80
Notice to Shareholders ..................................................... 82
The Trust's Forms N-Q are available on the Commission's web site at
http://www.sec.gov, and may be reviewed and copied at the Commission's Public
Reference Room in Washington, D.C. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that the Expedition Funds use to
determine how to vote proxies (if any) relating to portfolio securities, as well
as information relating to how a Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30, is available
without charge (i) upon request, by calling 800-992-2085; and (ii) on the
Commission's website at http://ww.sec.gov.
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Shares of the Expedition Funds are not deposits of or obligations of, or
guaranteed or endorsed by Compass Bank, Compass Bancshares, Inc. or any of their
affiliates, or any bank, and are not obligations of, guaranteed by or insured by
the U.S. Government, the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other government agency.
An investment in shares of the Funds involves investment risk, including the
possible loss of all or a portion of the principal invested, and the investment
return and value of shares of the Funds will fluctuate so that an investment,
when liquidated, may be worth more or less than the original cost.
Money market funds are neither insured nor guaranteed by the U.S. Government and
there can be no assurance that the Expedition Money Market Fund or Tax-Free
Money Market Fund will be able to maintain a stable net asset value of $1.00 per
share.
Compass Asset Management, a division of Compass Bank, serves as investment
adviser to the Expedition Funds. Compass Bank serves as the Funds' custodian. In
addition, Compass Bank as well as certain of its divisions and affiliates, may
provide other services to the Funds. Compass Bank and these affiliates and
divisions will be compensated for these services.
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LETTER TO OUR SHAREHOLDERS
Dear Shareholder:
Fiscal year 2004 witnessed a constant struggle between good news and bad news.
And ultimately, the good news appeared to win.
On the negative side, the U.S. economy was battered by rising oil prices, which
peaked above $50 per barrel for the first time in history. Conventional wisdom
holds that such a dramatic spike would have a serious dampening effect on
consumer spending and corporate profits, but both of these areas proved to be
surprisingly resilient.
In addition, the conflict in Iraq appeared to worsen, as insurgents continued to
inflict heavy casualties on the brave U.S. soldiers who are striving to bring
democracy to a troubled region.
In the good news column, overall economic growth was positive, if somewhat
uneven. Factory orders, corporate purchasing, and other major indicators were
positive for much of the fiscal year, although not strong enough to clearly
signal continued growth for the year ahead.
The U.S. job market managed to provide both bad news and good news. In the first
half of the year, many worried about a "jobless recovery" that produced good
corporate earnings but few new hires. Later in the fiscal year, employment
staged a shaky recovery - although it is unclear whether the newly-created jobs
offered the same level of earnings as those of the past.
In the business world, a few sectors stumbled, while many others flourished.
Airlines, for example, experienced a near-total meltdown as many of the major
carriers veered toward bankruptcy under the weight of rising fuel costs and
unsustainable cost structures. On the other side of the coin, the energy sector
was among those that recorded record profits. Over all, many companies continued
to benefit from their efforts to streamline operations in recent years,
resulting in strong profitability from even the most modest revenue gains.
Of course, the ultimate good news/bad news story - depending on where you sit -
was the 2004 presidential election, which dominated public attention during the
second half of the fiscal year.
The 2004 campaign was marked by uncommon rancor, negativity, and divisiveness.
And it inspired many investors to adopt a wait-and-see attitude until November
3.
In light of all these conflicting factors, the financial markets managed to take
their place in the "good news" column for the fiscal year, as investors welcomed
a return to relative stability after several turbulent years.
STOCKS RISE MODESTLY.
The U.S. stock markets produced solid gains for the year, but little in the way
of excitement.
Investors often appeared to be unfazed by impressive gains in corporate profits.
As a long list of companies - large and small - reported better-than-expected
earnings, the markets generally failed to respond with more than a disappointed
yawn. Those companies that failed to meet expectations, however, were often
punished by sharp declines in their stock prices.
Virtually no sector was immune to investor disinterest. The technology industry,
in particular, experienced an unexpected surge in revenues - due in part to
increased sales to China and other Asia-Pacific countries. And yet, prices of
bellwether technology stocks such as Intel, Microsoft, and Cisco increased only
slightly.
One explanation may be that investors are still suffering a hangover from the
irrational exuberance of the late 1990's. Or, it could be argued that earnings
are only now catching up with the still-high prices of many stocks.
One of the few moments of actual entertainment value in the stock market came
with the long-awaited initial public offering of Google, which many hoped would
usher in a new era of technology IPOs. And while that era has not yet arrived,
Google itself performed extremely well in its first few months as a public
company.
OCTOBER 31, 2004 1
LETTER TO OUR SHAREHOLDERS (CONCLUDED)
A MIXED YEAR FOR BONDS.
The strengthening economy, skyrocketing federal deficits, and rising energy
costs caused mixed results in the bond markets.
Taxable bond prices declined somewhat as it became clear that interest rates had
finally bottomed out and were on their way up. The Federal Reserve Board raised
interest rates three times, totaling 0.75 percent. But investors appeared to
recognize that the Fed may have been even more aggressive if not for the
upcoming election.
Municipal bonds also struggled, as many state and local governments faced
declining federal assistance for key public works projects.
Money market instruments were among the few beneficiaries of the current
interest rate scenario, moving up to single-digit territory for the first time
in several years.
STEADY MANAGEMENT, STEADY GAINS.
Throughout the year, the managers of the Expedition Funds continued to pursue
their strategies of seeking investments of strong value and strong quality. The
results were good performance in comparison to their respective indices.
In addition, our prudent approach was once again validated by increasing assets
from both individual and institutional investors.
AN IMPORTANT ANNOUNCEMENT TO ALL EXPEDITION FUNDS INVESTORS.
Finally, it is with a mixture of pride and sadness that I announce the planned
closing of the Expedition Funds family in February 2005.
My pride comes from the strong history of returns to our investors since our
founding in 1990, from the pleasure of working with such committed fund
managers, and above all from the privilege of serving you, our valued investors.
My sadness comes from realizing that this chapter in our history is closing. But
I feel certain that a new chapter will begin for all our investors, and we will
make every effort to ensure that the transition is a smooth one.
In the coming weeks, you will receive detailed information on the reasons behind
this event, as well as our suggested course of action.
For now, we want to thank you for your confidence in us over the past year - and
all the years since our founding. And we wish you and yours the very best during
the upcoming holiday season and the new year ahead.
Sincerely,
/s/Denise A. Woodham
Denise A. Woodham
Managing Director of Investments
Compass Asset Management Group
TO DETERMINE IF THESE FUNDS ARE AN APPROPRIATE INVESTMENT FOR YOU, CAREFULLY
CONSIDER THE FUNDS' INVESTMENT OBJECTIVES, RISK FACTORS AND CHARGES AND EXPENSES
BEFORE INVESTING. THIS AND OTHER INFORMATION CAN BE FOUND IN THE FUNDS'
PROSPECTUS, WHICH MAY BE OBTAINED BY CALLING 1-800-992-2085, OR LOGGING ON TO
OUR WEBSITE AT WWW.EXPEDITIONFUNDS.COM. PLEASE READ IT CAREFULLY BEFORE
INVESTING.
THE MATERIAL REPRESENTS THE MANAGER'S ASSESSMENT OF THE PORTFOLIO AND MARKET
ENVIRONMENT AT A SPECIFIC POINT IN TIME AND SHOULD NOT BE RELIED UPON BY THE
READER AS RESEARCH OR INVESTMENT ADVICE REGARDING ANY STOCK. THE EXPEDITION
FUNDS ARE DISTRIBUTED BY SEI INVESTMENTS DISTRIBUTION CO. SEI INVESTMENTS
DISTRIBUTION CO. IS NOT AFFILIATED WITH EXPEDITION FUNDS OR ANY OTHER AFFILIATE.
THERE ARE RISKS INVOLVED WITH INVESTING, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
IN ADDITION TO THESE RISKS, PRODUCTS AND COMPANIES IN WHICH TECHNOLOGY FUNDS
INVEST MAY BE SUBJECT TO SEVERE COMPETITION AND RAPID OBSOLESCENCE.
2 OCTOBER 31, 2004
INDEX DEFINITIONS
LEHMAN INTERMEDIATE GOVERNMENT/CREDIT INDEX -- A market value weighted
performance benchmark for government and Baa and higher rated corporate
fixed-rate debt issues with maturities between one and ten years.
LEHMAN MUNICIPAL BOND INDEX -- A broad-based total return index comprised of
8,000 investment grade, fixed rate, tax-exempt bonds with a remaining maturity
of at least one year, including state and local general obligation, revenue,
insured and pre-refunded bonds.
RUSSELL 1000 INDEX -- Measures the performance of the 1,000 largest companies in
the Russell 3000 Index which represents approximately 92% of total market
capitalization of the Russell 3000 Index.
S&P 400 MID-CAP INDEX -- This index is a capitalization-weighted index which
measures the performance of the mid-range of the U.S. Stock Market. This index
consists of 400 domestic stocks chosen for market size, liquidity and industry
group representation. It is a market value weighted index, with each stock
affecting the index in proportion to its market value.
S&P 500 COMPOSITE INDEX -- An unmanaged capitalization-weighted index of 500
stocks designed to measure performance of the broad domestic economy through
changes in the aggregate market value of 500 stocks representing all major
industries.
S&P 500/BARRA VALUE INDEX -- This index is constructed by dividing the stocks of
the S&P 500 Composite Index according to price-to-book ratio. It contains firms
with lower price-to-book ratios. The index is capitalization-weighted, meaning
that each stock in the index is weighted in proportion to its market value.
OCTOBER 31, 2004 3
EXPEDITION EQUITY FUND
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the twelve month period ended October 31, 2004, the Expedition Equity Fund
(Institutional Shares) generated a total return of 4.97%. This compares to a
9.42% return for the S&P 500 Composite Index and a 5.98% return for the Lipper
Large-Cap Core Funds Classification. The Fund seeks to provide growth of
capital, with a secondary objective of income and pursues these objectives by
investing in a diversified portfolio of common stocks issued by mid- and
large-capitalization companies.
The Expedition Equity Fund was well positioned to take advantage of the market's
surge in the first half of the fiscal year, and managed to hold onto its gains
during the relatively uneventful second half.
An emphasis on the energy, financial, and technology sectors enabled the Fund to
benefit from rising energy prices, a strengthening economy, and a surprisingly
healthy global demand for computer and telecommunications equipment. Other
strong sectors included utilities, telecommunications, and basic materials.
4 OCTOBER 31, 2004
EXPEDITION EQUITY FUND
MANAGEMENT'S DISCUSSION AND ANALYSIS
================================================================================
EXPEDITION EQUITY FUND
================================================================================
AVERAGE ANNUAL TOTAL RETURN
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1 Year 3 Year 5 Year 10 Year Inception to
Return Return Return* Return* Date*
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Institutional Shares 4.97% -0.81% -4.99% 8.16% 7.40%
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Investment Shares - Class A 4.64% -1.06% -5.21% 7.99%** 7.25%**
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Investment Shares - Class A w/load+ 0.39% -2.40% -5.98% 7.56%** 6.85%**
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Investment Shares - Class B 3.98% -1.80% -5.93% 7.51%** 6.82%**
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Investment Shares - Class B w/load++ -1.02% -2.79% -6.08% 7.51%** 6.82%**
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COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE EXPEDITION
EQUITY FUND, INSTITUTIONAL SHARES, INVESTMENT SHARES-CLASS A AND INVESTMENT
SHARES-CLASS B, VERSUS THE RUSSELL 1000 INDEX, THE S&P 500 COMPOSITE INDEX, THE
S&P 400 MID-CAP INDEX, THE LIPPER GROWTH & INCOME FUNDS OBJECTIVE, AND THE
LIPPER LARGE-CAP CORE FUNDS CLASSIFICATION.
[THE FOLLOWING TABLE WAS REPRESENTED AS LINE GRAPH IN THE PRINTED MATERIAL.]
EXPEDITION EXPEDITION
EXPEDITION EQUITY FUND, EQUITY FUND, LIPPER LIPPER
EQUITY FUND, INVESTMENT INVESTMENT S&P 500 S&P 400 GROWTH & LARGE-CAP
INSTITUTIONAL SHARES- SHARES- RUSSELL COMPOSITE MID-CAP INCOME FUNDS CORE FUNDS
SHARES CLASS A CLASS B 1000 INDEX INDEX INDEX OBJECTIVE CLASSIFICATION
10/94 $10,000 $ 9,600 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
10/95 11,673 11,206 11,673 12,700 12,644 12,121 12,228 12,089
10/96 14,274 13,703 14,274 15,611 15,691 14,224 14,822 14,747
10/97 18,149 17,423 18,149 20,581 20,730 18,868 19,034 18,983
10/98 21,630 20,800 21,666 24,638 25,288 20,132 21,847 20,930
10/99 28,307 27,073 28,067 30,940 31,780 24,374 27,217 24,658
10/00 34,538 32,956 33,904 33,743 33,715 32,089 29,868 27,232
10/01 22,453 21,385 21,831 24,957 25,320 28,094 22,207 22,826
10/02 17,255 16,396 16,600 21,313 21,494 26,751 18,620 19,656
10/03 20,877 19,793 19,881 26,070 25,965 34,971 21,993 23,730
10/04 21,915 20,712 20,672 28,502 28,411 38,832 23,310 26,032
* FOR PERIODS PRIOR TO THE INCEPTION OF THE EXPEDITION EQUITY FUND (THE
"FUND") ON JUNE 13, 1997, THE PERFORMANCE DATA QUOTED REPRESENTS PAST
PERFORMANCE OF THE EQUITY MODEL COMMON TRUST FUND INTERNALLY MANAGED BY AN
AFFILIATE OF THE FUND'S INVESTMENT ADVISOR, ADJUSTED FOR THE MAXIMUM FEE
AND EXPENSES OF THE INSTITUTIONAL SHARES OF THE FUND APPLICABLE AT THE
INCEPTION OF THE FUND. THE EQUITY MODEL COMMON TRUST FUND WAS NOT
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940 AND THEREFORE, WAS NOT
SUBJECT TO CERTAIN RESTRICTIONS WHICH MAY HAVE ADVERSELY AFFECTED
PERFORMANCE.
** CLASS A SHARES OF THE FUND WERE OFFERED BEGINNING NOVEMBER 24, 1997 AND
CLASS B SHARES OF THE FUND WERE OFFERED BEGINNING NOVEMBER 16, 1998. THE
PERFORMANCE INFORMATION SHOWN PRIOR TO THAT REPRESENTS PERFORMANCE OF
INSTITUTIONAL SHARES. THE PRIOR INSTITUTIONAL SHARES PERFORMANCE HAS BEEN
ADJUSTED TO REFLECT THE MAXIMUM FRONT-END SALES CHARGES AND THE MAXIMUM
CONTINGENT DEFERRED SALES CHARGES APPLICABLE TO CLASS A AND CLASS B
SHARES, RESPECTIVELY, BUT DOES NOT REFLECT THE HIGHER RULE 12B-1 FEES FOR
EITHER CLASS. HAD THAT ADJUSTMENT BEEN MADE, PERFORMANCE WOULD HAVE BEEN
LOWER.
+ REFLECTS 4.00% SALES CHARGE.
++ REFLECTS MAXIMUM CDSC OF 5.00%.
NOTE: PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE
OF FUTURE PERFORMANCE. ACTUAL RETURN AND PRINCIPAL VALUE WILL FLUCTUATE,
AND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE
RETURNS FOR CERTAIN PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN
EFFECT FOR THAT PERIOD; ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE
WOULD HAVE BEEN LOWER.
OCTOBER 31, 2004 5
EXPEDITION EQUITY INCOME FUND
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the twelve month period ended October 31, 2004, the Expedition Equity Income
Fund (Institutional Shares) generated a total return of 11.22%. This compares to
a 9.42% return for the S&P 500 Composite Index and a 11.58% return for the
Lipper Large-Cap Value Funds Classification for the comparable time period. The
Fund seeks to provide growth of capital, with a secondary objective of income.
These objectives are pursued through a diversified portfolio of common stocks
issued by mid- and large- capitalization companies.
After a strong first half, the market for blue-chip, income-oriented stocks
reached a plateau during the third and fourth quarters. Investors largely
ignored strong earnings reports and good fundamentals, and instead focused on
uncertainties about the direction of the economy, oil prices, and the
presidential election.
Still, the combination of good gains from the first half and strong dividends
throughout the year led to strong total returns for the Expedition Equity Income
Fund. In addition, the recent reduction in taxes on dividends led more and more
companies in the portfolio to increase their payouts to investors.
Looking ahead, we believe that investors will continue to place a high value on
the relative stability and income potential of dividend-oriented stocks.
Therefore, we plan to maintain our strategy of seeking high-quality companies
that produce above-average dividend yields.
6 OCTOBER 31, 2004
EXPEDITION EQUITY INCOME FUND
MANAGEMENT'S DISCUSSION AND ANALYSIS
================================================================================
EXPEDITION EQUITY INCOME FUND
================================================================================
AVERAGE ANNUAL TOTAL RETURN
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1 Year 3 Year Inception to
Return Return Date
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Institutional Shares 11.22% 0.39% -4.67%
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Investment Shares - Class A 11.00% 0.15% -4.47%
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Investment Shares - Class A w/load+ 6.51% -1.21% -5.31%
- --------------------------------------------------------------------------------
Investment Shares - Class B 10.01% -0.64% -5.27%
- --------------------------------------------------------------------------------
Investment Shares - Class B w/load++ 5.01% -1.64% -5.46%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE EXPEDITION
EQUITY INCOME FUND, INSTITUTIONAL SHARES, INVESTMENT SHARES-CLASS A AND
INVESTMENT SHARES-CLASS B, VERSUS THE S&P 500 COMPOSITE INDEX, THE S&P 500/BARRA
VALUE INDEX, AND THE LIPPER LARGE-CAP VALUE FUNDS CLASSIFICATION, THE LIPPER
EQUITY INCOME CLASSIFICATION, AND THE LIPPER EQUITY INCOME OBJECTIVE
[THE FOLLOWING TABLE WAS REPRESENTED AS LINE GRAPH IN THE PRINTED MATERIAL.]
EXPEDITION
EXPEDITION EQUITY INCOME
EQUITY INCOME FUND, EXPEDITION LIPPER
FUND, INVESTMENT EQUITY INCOME S&P 500 S&P 500/ LARGE-CAP LIPPER LIPPER
INSTITUTIONAL SHARES- FUND, INVESTMENT COMPOSITE BARRA VALUE VALUE FUNDS EQUITY INCOME EQUITY INCOME
SHARES CLASS A SHARES-CLASS B INDEX INDEX CLASSIFICATION CLASSIFICATION OBJECTIVE
03/00 $10,000 $9,600 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
10/00 10,350 9,918 10,302 9,600 10,609 10,698 10,778 10,693
10/01 7,556 7,221 7,453 7,210 8,656 9,539 9,759 9,561
10/02 5,920 5,642 5,786 6,120 7,290 8,160 8,616 8,396
10/03 6,874 6,536 6,646 7,393 9,100 9,862 10,306 10,020
10/04 7,645 7,255 7,242 8,090 10,415 11,004 11,586 11,228
+ REFLECTS 4.00% SALES CHARGE.
++ REFLECTS MAXIMUM CDSC OF 5.00%.
NOTE: PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE
OF FUTURE PERFORMANCE. ACTUAL RETURN AND PRINCIPAL VALUE WILL FLUCTUATE,
AND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE
RETURNS FOR CERTAIN PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN
EFFECT FOR THAT PERIOD; ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE
WOULD HAVE BEEN LOWER.
OCTOBER 31, 2004 7
EXPEDITION INVESTMENT GRADE BOND FUND
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the twelve month period ended October 31, 2004, the Expedition Investment
Grade Bond Fund (Institutional Shares) generated a total return of 4.33%. This
compares to a 4.86% return for the Lipper Intermediate Investment-Grade Debt
Objective. The Fund seeks to provide income with relative stability of
principal.
Growing economic strength, rising oil prices, and the conflict in Iraq were
among the factors that held the bond market back during fiscal 2004. In
addition, the Federal Reserve Board reversed its recent course of rate cutting,
raising short-term interest rates by a total of three-quarters of a percent.
In light of these factors, the Expedition Investment Grade Bond Fund produced
satisfactory returns that were well in line with those of its benchmark.
Throughout the year, the Fund continued to hold the maturity of its Treasury
holdings relatively short, adding high-quality corporate issues to take
advantage of their comparatively high yields.
Looking ahead, we believe that interest rates will continue to edge upward,
driven by increasing strength in the U.S. economy. Therefore, we plan to
maintain a relatively conservative stance, taking advantage of higher-rate
instruments if and when they become available.
8 OCTOBER 31, 2004
EXPEDITION INVESTMENT GRADE BOND FUND
MANAGEMENT'S DISCUSSION AND ANALYSIS
================================================================================
EXPEDITION INVESTMENT GRADE BOND FUND
================================================================================
AVERAGE ANNUAL TOTAL RETURN
- ----------------------------------------------------------------------------------------
1 Year 3 Year 5 Year 10 Year Inception
Return Return Return Return* to Date*
- ----------------------------------------------------------------------------------------
Institutional Shares 4.33% 5.03% 7.24% 6.61% 6.16%
- ----------------------------------------------------------------------------------------
Investment Shares - Class A 4.07% 4.76% 6.98% 6.42% 6.01%
- ----------------------------------------------------------------------------------------
Investment Shares - Class A w/load+ -0.13% 3.35% 6.11% 5.98% 5.67%
- ----------------------------------------------------------------------------------------
Investment Shares - Class B 3.39% 4.01% 6.25% 6.24% 5.88%
- ----------------------------------------------------------------------------------------
Investment Shares - Class B w/load++ -1.60% 3.08% 6.09% 6.24% 5.88%
- ----------------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE EXPEDITION
INVESTMENT GRADE BOND FUND, INSTITUTIONAL SHARES, INVESTMENT SHARES-CLASS A AND
INVESTMENT SHARES-CLASS B, VERSUS THE LEHMAN INTERMEDIATE GOVERNMENT/CREDIT
INDEX, AND THE LIPPER INTERMEDIATE INVESTMENT- GRADE DEBT OBJECTIVE.
[THE FOLLOWING TABLE WAS REPRESENTED AS LINE GRAPH IN THE PRINTED MATERIAL.]
EXPEDITION EXPEDITION EXPEDITION
INVESTMENT INVESTMENT INVESTMENT LEHMAN LIPPER
GRADE BOND FUND, GRADE BOND FUND, GRADE BOND FUND, INTERMEDIATE INTERMEDIATE-
INSTITUTIONAL INVESTMENT SHARES- INVESTMENT SHARES- GOVERNMENT/ GRADE DEBT
SHARES CLASS A CLASS B CREDIT INDEX OBJECTIVE
10/94 $10,000 $ 9,600 $10,000 $10,000 $10,000
10/95 11,094 10,650 11,094 11,252 11,466
10/96 11,587 11,123 11,587 11,907 12,078
10/97 12,329 11,836 12,329 12,799 13,103
10/98 13,369 12,813 13,346 13,963 14,156
10/99 13,361 12,760 13,520 14,102 14,157
10/00 14,228 13,554 14,269 15,010 15,015
10/01 16,362 15,549 16,265 17,150 17,048
10/02 17,488 16,577 17,212 18,164 17,687
10/03 18,168 17,178 17,704 19,146 18,688
10/04 18,955 17,877 18,304 19,975 19,596
* INSTITUTIONAL SHARES OF THE FUND WERE OFFERED BEGINNING JUNE 13, 1997 AND
CLASS B SHARES OF THE FUND WERE OFFERED BEGINNING NOVEMBER 16, 1998. THE
PERFORMANCE INFORMATION SHOWN PRIOR TO THAT REPRESENTS PERFORMANCE OF
CLASS A SHARES, WHICH WERE OFFERED BEGINNING APRIL 20, 1992. FOR
INSTITUTIONAL SHARES, THE PRIOR CLASS A SHARES PERFORMANCE REFLECTS THE
MAXIMUM FRONT-END SALES CHARGE AND RULE 12B-1 FEES ON CLASS A SHARES,
NEITHER OF WHICH APPLIES TO INSTITUTIONAL SHARES. FOR CLASS B SHARES, THE
PRIOR CLASS A SHARES PERFORMANCE REFLECTS THE MAXIMUM CONTINGENT DEFERRED
SALES CHARGE ON CLASS B SHARES, BUT DOES NOT REFLECT CLASS B SHARES'
HIGHER RULE 12B-1 FEES. HAD THAT ADJUSTMENT BEEN MADE, PERFORMANCE WOULD
HAVE BEEN LOWER.
+ REFLECTS 4.00% SALES CHARGE.
++ REFLECTS MAXIMUM CDSC OF 5.00%.
NOTE: PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE
OF FUTURE PERFORMANCE. ACTUAL RETURN AND PRINCIPAL VALUE WILL FLUCTUATE,
AND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE
RETURNS FOR CERTAIN PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN
EFFECT FOR THAT PERIOD; ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE
WOULD HAVE BEEN LOWER.
OCTOBER 31, 2004 9
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the twelve month period ended October 31, 2004, the Expedition Tax-Free
Investment Grade Bond Fund (Institutional Shares) generated a total return of
4.98%. This compares to a 6.02% return for the Lehman Municipal Bond Index and a
3.99% return for the Lipper Intermediate Municipal Debt Funds Objective.
Tax-exempt bonds put in a relatively weak showing in the first half of the
fiscal year, as supply outstripped demand and investors anticipated rate
increases by the Federal Reserve Board. In the second half of the year, they
regained some strength as uncertainties about the conflict in Iraq and the
presidential election led investors to move some assets back to safer havens
such as municipal bonds.
During this period, the Expedition Tax-Free Investment Grade Bond Fund extended
its maturity level somewhat. Still, our average maturity remains slightly
shorter than that of our benchmark, reflecting our concern that rates could go
higher in the coming year.
Looking ahead, we believe that the prospect of continued rate increases, rising
federal deficits, and a stronger economy could continue to limit municipal bond
returns. However, we believe that high-quality, tax-exempt investments will
retain their appeal to higher-income investors, and that our conservative
approach will continue to produce favorable results.
Regardless of any short-term trends the Fund plans to maintain emphasis on
securities that are of high quality, widely traded, and not subject to early
redemption.
10 OCTOBER 31, 2004
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND
MANAGEMENT'S DISCUSSION AND ANALYSIS
================================================================================
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND
================================================================================
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
1 Year 3 Year Inception to
Return Return Date
- --------------------------------------------------------------------------------
Institutional Shares 4.98% 5.02% 6.74%
- --------------------------------------------------------------------------------
Investment Shares - Class A 4.62% 4.75% 6.35%
- --------------------------------------------------------------------------------
Investment Shares - Class A w/load+ 0.47% 3.35% 5.42%
- --------------------------------------------------------------------------------
Investment Shares - Class B 3.84% 3.94% 5.38%
- --------------------------------------------------------------------------------
Investment Shares - Class B w/load++ -1.12% 3.01% 5.19%
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE EXPEDITION
TAX-FREE INVESTMENT GRADE BOND FUND, INSTITUTIONAL SHARES AND INVESTMENT
SHARES-CLASS A, VERSUS THE LEHMAN MUNICIPAL BOND INDEX, THE LIPPER GENERAL
MUNICIPAL DEBT FUNDS OBJECTIVE, AND THE LIPPER INTERMEDIATE MUNICIPAL DEBT FUNDS
OBJECTIVE.
[THE FOLLOWING TABLE WAS REPRESENTED AS LINE GRAPH IN THE PRINTED MATERIAL.]
EXPEDITION TAX-FREE EXPEDITION TAX-FREE LIPPER LIPPER
INVESTMENT GRADE INVESTMENT GRADE LEHMAN GENERAL MUNICIPAL INTERMEDIATE
BOND FUND, BOND FUND, INVESTMENT MUNICIPAL BOND DEBT FUNDS MUNICIPAL DEBT
INSTITUTIONAL SHARES SHARES-CLASS A INDEX OBJECTIVE FUNDS OBJECTIVE
3/00 $10,000 $ 9,600 $10,000 $10,000 $10,000
10/00 10,462 10,019 10,510 10,444 10,405
10/01 11,459 10,947 11,616 11,443 11,368
10/02 12,089 11,521 12,297 11,922 11,923
10/03 12,642 12,027 12,926 12,469 12,440
10/04 13,271 12,583 13,704 13,121 12,936
+ REFLECTS 4.00% SALES CHARGE.
++ REFLECTS MAXIMUM CDSC OF 5.00%.
NOTE: PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE
OF FUTURE PERFORMANCE. ACTUAL RETURN AND PRINCIPAL VALUE WILL FLUCTUATE,
AND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE
RETURNS FOR CERTAIN PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN
EFFECT FOR THAT PERIOD; ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE
WOULD HAVE BEEN LOWER.
OCTOBER 31, 2004 11
EXPEDITION MONEY MARKET FUND
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the twelve month period ended October 31, 2004, the Expedition Money Market
Fund (Institutional Shares) generated a total return of 0.80%. This compares to
a 0.62% return for the Lipper Money Market Mutual Funds Index.
Yields on money market instruments rose during the year, thanks to a total of
three quarter-point rate increases by the Federal Reserve Board. The Fed clearly
views rising oil prices and the nation's growing economic strength as potential
harbingers of inflation, and appears poised to increase rates again in the
months ahead.
For much of the fiscal year, the Expedition Money Market Fund maintained a
relatively conservative stance, with assets concentrated in 30 to 60 day
commercial paper and corporate notes of six months to one year. The remainder of
the Fund was invested in overnight repurchase agreements.
Looking ahead, we believe that all signs are pointing toward a higher-rate
environment. Therefore, we plan to continue with our conservative investment
approach in order to take advantage of potentially stronger yields in the months
to come.
12 OCTOBER 31, 2004
EXPEDITION TAX-FREE MONEY MARKET FUND
MANAGEMENT'S DISCUSSION AND ANALYSIS
For the twelve month period ended October 31, 2004, the Expedition Tax-Free
Money Market Fund (Institutional Shares) generated a total return of 0.75%. This
compares to a 0.59% return for the Lipper Tax-Exempt Money Market Funds Index.
The Fund seeks to provide income, exempt from Federal income taxes, consistent
with stability of principal. The Fund pursues this investment objective by
investing in high quality money market instruments maturing in 397 days or less.
Yields on short-term municipal instruments increased substantially during the
year, in response to three 0.25 percent rate increases by the Federal Reserve
Board. As a result, yields on the Expedition Tax-Free Money Market Fund
increased, at a rate comparable to those of the benchmark index.
Looking ahead, we plan to retain our relatively short maturity levels in order
to take advantage of any potential rate increases of the future. In addition, we
will maintain our focus on instruments of the highest quality - including those
that are backed by municipal bond insurance.
OCTOBER 31, 2004 13
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of
Expedition Funds:
We have audited the accompanying statements of net assets of Expedition Funds
(the "Funds"), comprising the Equity, Equity Income, Investment Grade Bond,
Tax-Free Investment Grade Bond, Money Market and Tax-Free Money Market
Portfolios as of October 31, 2004, and the related statements of operations,
statements of changes in net assets for each of the two years in the period then
ended and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 2004, by correspondence with
the custodians and brokers; where replies were not received from brokers, we
performed other auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of the
Portfolios as of September 30, 2004, the results of their operations, the
changes in their net assets for each of the two years in the period then ended,
and their financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the United
States of America.
As discussed in Note 8 to the financial statements, effective February 2005, the
Funds will be reorganizing each of the Funds into a corresponding fund and share
class of the Goldman Sachs Trust.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
December 17, 2004
14 OCTOBER 31, 2004
EXPEDITION EQUITY FUND
STATEMENT OF NET ASSETS
SECTOR WEIGHTINGS (UNAUDITED)**:
[THE FOLLOWING TABLE WAS REPRESENTED AS BAR GRAPH IN THE PRINTED MATERIAL.]
Medical Products & Services 11.4%
Retail 11.1%
Computers & Services 9.0%
Diversified Manufacturing 7.8%
Petroleum Refining 7.0%
Insurance 6.3%
Broker/Dealers 6.1%
Banks 4.6%
Food, Beverage & Tobacco 4.6%
Cosmetics/Toiletries 3.2%
Telephones & Telecommunications 3.1%
Electrical Services 2.7%
Aerospace & Defense 2.4%
Communications Equipment 2.3%
Machinery 2.1%
Pharmaceuticals 2.0%
Semi-Conductors/Instruments 2.0%
Software & Programming 2.0%
Broadcasting, Newspapers & Advertising 1.9%
Miscellaneous Business Services 1.9%
Diversified Financial Services 1.8%
Metals-Aluminum 1.6%
Metals 1.1%
Related Party Money Market Fund 1.1%
Entertainment 0.9%
** PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
VALUE
DESCRIPTION SHARES (000)
- -------------------------------------------------------------------------------
COMMON STOCK - 99.3%
AEROSPACE & DEFENSE - 2.4%
United Technologies 35,000 $ 3,249
- -------------------------------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 3,249
- -------------------------------------------------------------------------------
BANKS - 4.7%
Bank of America 70,000 3,135
Wells Fargo 51,500 3,076
- -------------------------------------------------------------------------------
TOTAL BANKS 6,211
- -------------------------------------------------------------------------------
BROADCASTING, NEWSPAPERS & ADVERTISING - 1.9%
Omnicom Group 20,000 1,578
UTStarcom* 55,000 942
- -------------------------------------------------------------------------------
TOTAL BROADCASTING, NEWSPAPERS & ADVERTISING 2,520
- -------------------------------------------------------------------------------
BROKER/DEALERS - 6.1%
Citigroup 70,000 3,106
Goldman Sachs Group 20,000 1,968
JP Morgan Chase 80,000 3,088
- -------------------------------------------------------------------------------
TOTAL BROKER/DEALERS 8,162
- -------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 2.3%
L-3 Communications Holdings 46,030 3,035
- -------------------------------------------------------------------------------
TOTAL COMMUNICATIONS EQUIPMENT 3,035
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 15
EXPEDITION EQUITY FUND
STATEMENT OF NET ASSETS
VALUE
DESCRIPTION SHARES (000)
- -------------------------------------------------------------------------------
COMPUTERS & SERVICES - 9.1%
Affiliated Computer Services, Cl A* 49,000 $ 2,673
Cisco Systems* 90,000 1,729
Dell* 60,000 2,104
EMC* 88,000 1,132
Intel 107,500 2,393
International Business Machines 23,000 2,064
- -------------------------------------------------------------------------------
TOTAL COMPUTERS & SERVICES 12,095
- -------------------------------------------------------------------------------
COSMETICS/TOILETRIES - 3.2%
Gillette 40,000 1,659
Procter & Gamble 50,000 2,559
- -------------------------------------------------------------------------------
TOTAL COSMETICS/TOILETRIES 4,218
- -------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 1.8%
American Express 45,000 2,388
- -------------------------------------------------------------------------------
TOTAL DIVERSIFIED FINANCIAL SERVICES 2,388
- -------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING - 7.8%
3M 20,000 1,551
Fortune Brands 40,000 2,913
General Electric 125,000 4,265
Johnson Controls 30,000 1,721
- -------------------------------------------------------------------------------
TOTAL DIVERSIFIED MANUFACTURING 10,450
- -------------------------------------------------------------------------------
ELECTRICAL SERVICES - 2.7%
Exelon 90,000 3,566
- -------------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 3,566
- -------------------------------------------------------------------------------
ENTERTAINMENT - 0.9%
Harrah's Entertainment 20,000 1,170
- -------------------------------------------------------------------------------
TOTAL ENTERTAINMENT 1,170
- -------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO - 4.7%
Constellation Brands, Cl A* 77,000 3,020
PepsiCo 48,000 2,380
Sysco 25,000 807
- -------------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 6,207
- -------------------------------------------------------------------------------
INSURANCE - 6.3%
Allstate 60,000 2,886
American International Group 46,000 2,793
Lincoln National 63,000 2,759
- -------------------------------------------------------------------------------
TOTAL INSURANCE 8,438
- -------------------------------------------------------------------------------
MACHINERY - 2.1%
Caterpillar 35,000 2,819
- -------------------------------------------------------------------------------
TOTAL MACHINERY 2,819
- -------------------------------------------------------------------------------
16 OCTOBER 31, 2004
EXPEDITION EQUITY FUND
STATEMENT OF NET ASSETS
VALUE
DESCRIPTION SHARES (000)
- -------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES - 11.5%
Amgen* 45,000 $ 2,556
CR Bard 43,000 2,442
Johnson & Johnson 41,000 2,394
Mylan Laboratories 100,000 1,722
Quest Diagnostics 22,800 1,996
St. Jude Medical* 18,000 1,378
UnitedHealth Group 38,000 2,751
- -------------------------------------------------------------------------------
TOTAL MEDICAL PRODUCTS & SERVICES 15,239
- -------------------------------------------------------------------------------
METALS - 1.1%
Ball 37,000 1,474
- -------------------------------------------------------------------------------
TOTAL METALS 1,474
- -------------------------------------------------------------------------------
METALS-ALUMINUM - 1.6%
Alcoa 65,000 2,113
- -------------------------------------------------------------------------------
TOTAL METALS-ALUMINUM 2,113
- -------------------------------------------------------------------------------
MISCELLANEOUS BUSINESS SERVICES - 1.9%
First Data 60,000 2,477
- -------------------------------------------------------------------------------
TOTAL MISCELLANEOUS BUSINESS SERVICES 2,477
- -------------------------------------------------------------------------------
PETROLEUM REFINING - 7.0%
Apache 39,000 1,977
ChevronTexaco 66,500 3,529
ConocoPhillips 23,500 1,981
Schlumberger 30,000 1,888
- -------------------------------------------------------------------------------
TOTAL PETROLEUM REFINING 9,375
- -------------------------------------------------------------------------------
PHARMACEUTICALS - 2.0%
Pfizer 91,000 2,634
- -------------------------------------------------------------------------------
TOTAL PHARMACEUTICALS 2,634
- -------------------------------------------------------------------------------
RETAIL - 11.1%
Best Buy 25,000 1,480
CVS 65,000 2,825
Home Depot 50,000 2,054
Staples 90,000 2,677
Target 60,000 3,001
Wal-Mart Stores 51,000 2,750
- -------------------------------------------------------------------------------
TOTAL RETAIL 14,787
- -------------------------------------------------------------------------------
SEMI-CONDUCTORS/INSTRUMENTS - 2.0%
Flextronics* 100,000 1,205
Texas Instruments 61,000 1,491
- -------------------------------------------------------------------------------
TOTAL SEMI-CONDUCTORS/INSTRUMENTS 2,696
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 17
EXPEDITION EQUITY FUND
STATEMENT OF NET ASSETS
VALUE
DESCRIPTION SHARES (000)
- -------------------------------------------------------------------------------
SOFTWARE & PROGRAMMING - 2.0%
Microsoft 95,000 $ 2,659
- -------------------------------------------------------------------------------
TOTAL SOFTWARE & PROGRAMMING 2,659
- -------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS - 3.1%
Alltel 37,000 2,032
SBC Communications 84,600 2,137
- -------------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 4,169
- -------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $121,326) 132,151
- -------------------------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND - 1.1%
Expedition Money Market Fund+ 1,408,767 1,409
- -------------------------------------------------------------------------------
TOTAL RELATED PARTY MONEY MARKET FUND
(COST $1,409) 1,409
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.4%
(COST $122,735) 133,560
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES - (0.4%)
Investment Advisory Fees Payable (81)
Administrator Fees Payable (24)
Distribution Fees Payable (14)
Trustees' Fees Payable (3)
Custodian Fees Payable (2)
Other Assets and Liabilities, Net (431)
- -------------------------------------------------------------------------------
TOTAL OTHER ASSETS & LIABILITIES (555)
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $133,005
- -------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital of Institutional Shares
(unlimited authorization -- no par
value) based on 14,460,059 outstanding shares of
beneficial interest 167,248
Portfolio Capital of Investment Shares - Class A
(unlimited authorization -- no par value)
based on 941,104 outstanding shares of
beneficial interest 12,641
Portfolio Capital of Investment Shares - Class B
(unlimited authorization -- no par value)
based on 1,870,182 outstanding shares of
beneficial interest 25,210
Undistributed net investment income 19
Accumulated net realized loss on investments (82,938)
Net unrealized appreciation on investments 10,825
- -------------------------------------------------------------------------------
NET ASSETS $133,005
- -------------------------------------------------------------------------------
18 OCTOBER 31, 2004
EXPEDITION EQUITY FUND
STATEMENT OF NET ASSETS
DESCRIPTION VALUE
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
INSTITUTIONAL SHARES
($112,113,633 / 14,460,059 SHARES) $7.75
- -------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE --
INVESTMENT SHARES - CLASS A
($7,219,726 / 941,104 SHARES) $7.67
- -------------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE --
INVESTMENT SHARES - CLASS A (1) $7.99
- -------------------------------------------------------------------------------
NET ASSET VALUE AND OFFERING PRICE PER SHARE --
INVESTMENT SHARES - CLASS B (2)
(13,671,432 / 1,870,182 SHARES) $7.31
- -------------------------------------------------------------------------------
* Non-income producing security.
+ See Note 4 in Notes to Financial Statements.
(1) The offering price is calculated by dividing the net asset value by 1 minus
the maximum sales charge of 4.00%.
(2) Class B Shares have a contingent deferred sales charge. For a description
of a possible redemption charge, see a prospectus for the Funds.
Cl -- Class
The accompanying notes are an integral part of the financial statements.
OCTOBER 31, 2004 19
EXPEDITION EQUITY INCOME FUND
STATEMENT OF NET ASSETS
SECTOR WEIGHTINGS (UNAUDITED)**:
[THE FOLLOWING TABLE WAS REPRESENTED AS BAR GRAPH IN THE PRINTED MATERIAL.]
Banks 15.2%
Petroleum Refining 10.3%
Retail 9.3%
Diversified Manufacturing 8.2%
Diversified Financial Services 7.1%
Telephones & Telecommunications 7.1%
Electrical Services 6.1%
Broker/Dealers 4.3%
Aerospace & Defense 4.1%
Insurance 3.9%
Chemicals 3.4%
Entertainment 3.1%
Computers & Services 3.0%
Pharmaceuticals 2.3%
Food, Beverage & Tobacco 1.8%
Gas/Natural Gas 1.7%
Metals 1.7%
Software & Programming 1.6%
Medical Products & Services 1.4%
Miscellaneous Business Services 1.3%
Related Party Money Market Fund 1.1%
Air Transportation 1.0%
Real Estate Investment Trusts 1.0%
** PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
VALUE
DESCRIPTION SHARES (000)
- -------------------------------------------------------------------------------
COMMON STOCK - 98.4%
AEROSPACE & DEFENSE - 4.1%
General Dynamics 2,000 $ 204
United Technologies 2,000 186
- -------------------------------------------------------------------------------
TOTAL AEROSPACE & DEFENSE 390
- -------------------------------------------------------------------------------
AIR TRANSPORTATION - 1.0%
FedEx 1,000 91
- -------------------------------------------------------------------------------
TOTAL AIR TRANSPORTATION 91
- -------------------------------------------------------------------------------
BANKS - 15.2%
Bank of America 4,000 179
Bank of New York 7,500 243
BB&T 5,000 206
Keycorp 6,500 218
Regions Financial 3,500 123
Wachovia 5,000 246
Wells Fargo 3,750 224
- -------------------------------------------------------------------------------
TOTAL BANKS 1,439
- -------------------------------------------------------------------------------
BROKER/DEALERS - 4.2%
Goldman Sachs Group 1,000 98
Merrill Lynch 3,250 175
Morgan Stanley 2,500 128
- -------------------------------------------------------------------------------
TOTAL BROKER/DEALERS 401
- -------------------------------------------------------------------------------
CHEMICALS - 3.4%
EI Du Pont de Nemours 3,500 150
PPG Industries 2,700 172
- -------------------------------------------------------------------------------
TOTAL CHEMICALS 322
- -------------------------------------------------------------------------------
COMPUTERS & SERVICES - 3.0%
Hewlett-Packard 7,000 131
International Business Machines 1,700 152
- -------------------------------------------------------------------------------
TOTAL COMPUTERS & SERVICES 283
- -------------------------------------------------------------------------------
20 OCTOBER 31, 2004
EXPEDITION EQUITY INCOME FUND
STATEMENT OF NET ASSETS
VALUE
DESCRIPTION SHARES (000)
- -------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 7.1%
Alliance Capital Management Holding 5,250 $ 200
Citigroup 6,250 277
JP Morgan Chase 5,000 193
- -------------------------------------------------------------------------------
TOTAL DIVERSIFIED FINANCIAL SERVICES 670
- -------------------------------------------------------------------------------
DIVERSIFIED MANUFACTURING - 8.1%
Fortune Brands 4,000 291
General Electric 9,750 333
Johnson Controls 2,600 149
- -------------------------------------------------------------------------------
TOTAL DIVERSIFIED MANUFACTURING 773
- -------------------------------------------------------------------------------
ELECTRICAL SERVICES - 6.0%
Centerpoint Energy 13,000 137
Exelon 7,000 277
Southern 5,000 158
- -------------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 572
- -------------------------------------------------------------------------------
ENTERTAINMENT - 3.1%
Harrah's Entertainment 5,000 293
- -------------------------------------------------------------------------------
TOTAL ENTERTAINMENT 293
- -------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO - 1.8%
Adolph Coors, Cl B 2,500 167
- -------------------------------------------------------------------------------
TOTAL FOOD, BEVERAGE & TOBACCO 167
- -------------------------------------------------------------------------------
GAS/NATURAL GAS - 1.7%
Kinder Morgan Energy Partners 3,500 162
- -------------------------------------------------------------------------------
TOTAL GAS/NATURAL GAS 162
- -------------------------------------------------------------------------------
INSURANCE - 3.9%
ACE Ltd. 3,250 124
American International Group 4,000 243
- -------------------------------------------------------------------------------
TOTAL INSURANCE 367
- -------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES - 1.4%
Quest Diagnostics 1,500 131
- -------------------------------------------------------------------------------
TOTAL MEDICAL PRODUCTS & SERVICES 131
- -------------------------------------------------------------------------------
METALS - 1.7%
Alcan 3,500 162
- -------------------------------------------------------------------------------
TOTAL METALS 162
- -------------------------------------------------------------------------------
MISCELLANEOUS BUSINESS SERVICES - 1.3%
First Data 3,000 124
- -------------------------------------------------------------------------------
TOTAL MISCELLANEOUS BUSINESS SERVICES 124
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 21
EXPEDITION EQUITY INCOME FUND
STATEMENT OF NET ASSETS
VALUE
DESCRIPTION SHARES (000)
- -------------------------------------------------------------------------------
PETROLEUM REFINING - 10.3%
Anadarko Petroleum 3,400 $ 229
ChevronTexaco 4,500 239
Exxon Mobil 7,500 369
Royal Dutch Petroleum 2,500 136
- -------------------------------------------------------------------------------
TOTAL PETROLEUM REFINING 973
- -------------------------------------------------------------------------------
PHARMACEUTICALS - 2.2%
Abbott Laboratories 5,000 213
- -------------------------------------------------------------------------------
TOTAL PHARMACEUTICALS 213
- -------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS - 1.0%
Crescent Real Estate Equity 6,000 96
- -------------------------------------------------------------------------------
TOTAL REAL ESTATE INVESTMENT TRUSTS 96
- -------------------------------------------------------------------------------
RETAIL - 9.2%
CVS 5,500 239
Pier 1 Imports 5,400 97
Wal-Mart Stores 4,000 216
Yum! Brands 7,500 326
- -------------------------------------------------------------------------------
TOTAL RETAIL 878
- -------------------------------------------------------------------------------
SOFTWARE & PROGRAMMING - 1.6%
Microsoft 5,500 154
- -------------------------------------------------------------------------------
TOTAL SOFTWARE & PROGRAMMING 154
- -------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS - 7.1%
Alltel 3,000 165
BellSouth 5,500 147
Nokia ADR 7,000 108
SBC Communications 3,800 96
Verizon Communications 4,000 156
- -------------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 672
- -------------------------------------------------------------------------------
TOTAL COMMON STOCK
(COST $7,995) 9,333
- -------------------------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND - 1.1%
Expedition Money Market Fund+ 107,434 107
- -------------------------------------------------------------------------------
TOTAL RELATED PARTY MONEY MARKET FUND
(COST $107) 107
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.5%
(COST $8,102) 9,440
- -------------------------------------------------------------------------------
22 OCTOBER 31, 2004
EXPEDITION EQUITY INCOME FUND
STATEMENT OF NET ASSETS
VALUE
DESCRIPTION (000)
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES - 0.5%
Investment Advisory Fees Receivable $ 8
Administrator Fees Payable (6)
Distribution Fees Payable (1)
Other Assets and Liabilities, Net 49
- -------------------------------------------------------------------------------
TOTAL OTHER ASSETS & LIABILITIES 50
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $ 9,490
- -------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital of Institutional Shares
(unlimited authorization -- no par value)
based on 1,169,393 outstanding shares of
beneficial interest 14,540
Portfolio Capital of Investment Shares -- Class A
(unlimited authorization -- no par value)
based on 41,446 outstanding shares of
beneficial interest 506
Portfolio Capital of Investment Shares -- Class B
(unlimited authorization -- no par value)
based on 84,810 outstanding shares of
beneficial interest 999
Undistributed net investment income 6
Accumulated net realized loss on investments (7,899)
Net unrealized appreciation on investments 1,338
- -------------------------------------------------------------------------------
NET ASSETS $ 9,490
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
INSTITUTIONAL SHARES
($8,572,998 / 1,169,393 SHARES) $7.33
- -------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE --
INVESTMENT SHARES - CLASS A
($303,313 / 41,446 SHARES) $7.32
- -------------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE --
INVESTMENT SHARES -- CLASS A (1) $7.63
- -------------------------------------------------------------------------------
NET ASSET VALUE AND OFFERING PRICE PER SHARE --
INVESTMENT SHARES -- CLASS B (2)
($613,199 / 84,810 SHARES) $7.23
- -------------------------------------------------------------------------------
+ See Note 4 in Notes to Financial Statements.
(1) The offering price is calculated by dividing the net asset value by 1
minus the maximum sales charge of 4.00%.
(2) Class B Shares have a contingent deferred sales charge. For a description
of a possible redemption charge, see a prospectus for the Funds.
ADR -- American Depository Receipt
Cl -- Class
Ltd. -- Limited
The accompanying notes are an integral part of the financial statements.
OCTOBER 31, 2004 23
EXPEDITION INVESTMENT GRADE BOND FUND
STATEMENT OF NET ASSETS
SECTOR WEIGHTINGS (UNAUDITED)*:
[THE FOLLOWING TABLE WAS REPRESENTED AS BAR GRAPH IN THE PRINTED MATERIAL.]
Corporate Obligations 37.9%
U.S. Government Agency Obligations 26.9%
U.S. Treasury Obligations 24.8%
U.S. Government Mortgage-Backed Obligations 6.6%
Asset-Backed Securities 3.2%
Related Party Money Market Fund 0.6%
* PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 37.5%
BANKS - 3.0%
Bank of America
5.875%, 02/15/09 $1,000 $ 1,086
Bank One
6.000%, 08/01/08 2,000 2,170
- -------------------------------------------------------------------------------
TOTAL BANKS 3,256
- -------------------------------------------------------------------------------
BROKER/DEALERS - 5.2%
Goldman Sachs Group
6.600%, 01/15/12 2,000 2,250
Merrill Lynch
6.375%, 10/15/08 1,000 1,095
Morgan Stanley
6.750%, 04/15/11 2,000 2,273
- -------------------------------------------------------------------------------
TOTAL BROKER/DEALERS 5,618
- -------------------------------------------------------------------------------
CHEMICALS - 2.1%
EI Du Pont de Nemours
6.875%, 10/15/09 2,000 2,280
- -------------------------------------------------------------------------------
TOTAL CHEMICALS 2,280
- -------------------------------------------------------------------------------
COMPUTERS & SERVICES - 1.9%
International Business Machines
4.750%, 11/29/12 2,000 2,046
- -------------------------------------------------------------------------------
TOTAL COMPUTERS & SERVICES 2,046
- -------------------------------------------------------------------------------
COSMETICS/TOILETRIES - 1.9%
Procter & Gamble
4.950%, 08/15/14 2,000 2,068
- -------------------------------------------------------------------------------
TOTAL COSMETICS/TOILETRIES 2,068
- -------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 10.2%
American Express
4.875%, 07/15/13 2,000 2,045
General Electric Capital MTN, Ser A
7.375%, 01/19/10 3,000 3,487
General Motors Acceptance
6.150%, 04/05/07 2,000 2,103
Household Finance
6.375%, 10/15/11 1,000 1,117
Wells Fargo Financial
5.875%, 08/15/08 2,000 2,188
- -------------------------------------------------------------------------------
TOTAL DIVERSIFIED FINANCIAL SERVICES 10,940
- -------------------------------------------------------------------------------
24 OCTOBER 31, 2004
EXPEDITION INVESTMENT GRADE BOND FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
ELECTRICAL SERVICES - 2.0%
Alabama Power, Ser G
5.375%, 10/01/08 $2,000 $ 2,128
- -------------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 2,128
- -------------------------------------------------------------------------------
PHARMACEUTICALS - 1.9%
Abbott Laboratories
3.500%, 02/17/09 2,000 1,994
- -------------------------------------------------------------------------------
TOTAL PHARMACEUTICALS 1,994
- -------------------------------------------------------------------------------
RETAIL - 8.3%
Lowe's
8.250%, 06/01/10 2,000 2,430
Target
5.875%, 11/01/08 2,000 2,175
4.000%, 06/15/13 1,000 969
Wal-Mart Stores
6.875%, 08/10/09 3,000 3,420
- -------------------------------------------------------------------------------
TOTAL RETAIL 8,994
- -------------------------------------------------------------------------------
TELEPHONES & TELECOMMUNICATIONS - 1.0%
SBC Communications
5.875%, 02/01/12 1,000 1,081
- -------------------------------------------------------------------------------
TOTAL TELEPHONES & TELECOMMUNICATIONS 1,081
- -------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS
(COST $36,746) 40,405
- -------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 26.6%
FHLB
5.250%, 06/18/14 2,000 2,135
3.125%, 08/15/07 3,000 3,004
FHLB, Ser 100
5.800%, 09/02/08 2,000 2,173
FHLB, Ser 363
4.500%, 11/15/12 3,000 3,062
FHLMC
7.000%, 03/15/10 3,000 3,471
6.625%, 09/15/09 3,000 3,401
4.875%, 11/15/13 2,000 2,072
FNMA
7.250%, 01/15/10 2,500 2,916
5.500%, 03/15/11 3,000 3,258
5.250%, 01/15/09 3,000 3,210
- -------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $26,457) 28,702
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 25
EXPEDITION INVESTMENT GRADE BOND FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 24.5%
U.S. Treasury Notes
7.000%, 07/15/06 $1,000 $ 1,076
6.500%, 10/15/06 2,000 2,151
6.500%, 02/15/10 1,000 1,151
6.125%, 08/15/07 3,000 3,269
6.000%, 08/15/09 3,000 3,363
5.625%, 05/15/08 2,000 2,178
5.500%, 05/15/09 3,000 3,296
5.000%, 02/15/11 500 540
4.875%, 02/15/12 2,000 2,144
4.750%, 05/15/14 2,000 2,115
4.250%, 08/15/13 3,000 3,067
3.875%, 05/15/09 2,000 2,057
- -------------------------------------------------------------------------------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $24,182) 26,407
- -------------------------------------------------------------------------------
U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS - 6.6%
FHLMC, Gold Pool #E00532
6.500%, 02/01/13 132 140
FHLMC, Gold Pool #E00543
6.000%, 04/01/13 302 318
FHLMC, Gold Pool #E00584
6.000%, 11/01/13 444 467
FHLMC, Gold Pool #E00832
7.500%, 04/01/15 167 178
FHLMC, Gold Pool #E00856
7.500%, 06/01/15 170 180
FNMA, Pool # 614934
6.000%, 12/01/16 1,359 1,427
FNMA, Pool #535966
7.000%, 05/01/16 445 473
GNMA, Pool #552999
5.000%, 01/15/18 3,787 3,898
- -------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS
(COST $6,937) 7,081
- -------------------------------------------------------------------------------
ASSET-BACKED SECURITIES - 3.2%
MBNA Master Credit Card Trust, Ser 1999-J, Cl A
7.000%, 02/15/12 3,000 3,428
- -------------------------------------------------------------------------------
TOTAL ASSET-BACKED SECURITIES
(COST $3,134) 3,428
- -------------------------------------------------------------------------------
26 OCTOBER 31, 2004
EXPEDITION INVESTMENT GRADE BOND FUND
STATEMENT OF NET ASSETS
VALUE
DESCRIPTION SHARES (000)
- -------------------------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND - 0.6%
Expedition Money Market Fund+ 611,601 $ 612
- -------------------------------------------------------------------------------
TOTAL RELATED PARTY MONEY MARKET FUND
(COST $612) 612
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.0%
(COST $98,068) 106,635
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES - 1.0%
Investment Advisory Fees Payable (32)
Administrator Fees Payable (18)
Custodian Fees Payable (2)
Distribution Fees Payable (2)
Trustees' Fees Payable (2)
Other Assets and Liabilities, Net 1,115
- -------------------------------------------------------------------------------
TOTAL OTHER ASSETS & LIABILITIES 1,059
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $107,694
- -------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital of Institutional Shares
(unlimited authorization -- no par value)
based on 9,455,896 outstanding shares of
beneficial interest 89,594
Portfolio Capital of Investment Shares -- Class A
(unlimited authorization -- no par value)
based on 461,910 outstanding shares of
beneficial interest 8,818
Portfolio Capital of Investment Shares -- Class B
(unlimited authorization -- no par value)
based on 161,942 outstanding shares of
beneficial interest 1,665
Accumulated net realized loss on investments (950)
Net unrealized appreciation on investments 8,567
- -------------------------------------------------------------------------------
NET ASSETS $107,694
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 27
EXPEDITION INVESTMENT GRADE BOND FUND
STATEMENT OF NET ASSETS
DESCRIPTION VALUE
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
INSTITUTIONAL SHARES
($101,031,236 / 9,455,896 SHARES) $10.68
- -------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE --
INVESTMENT SHARES -- CLASS A
($4,930,443 / 461,910 SHARES) $10.67
- -------------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE --
INVESTMENT SHARES -- CLASS A (1) $11.11
- -------------------------------------------------------------------------------
NET ASSET VALUE AND OFFERING PRICE PER SHARE --
INVESTMENT SHARES -- CLASS B (2)
($1,732,124 / 161,942 SHARES) $10.70
- -------------------------------------------------------------------------------
+ See Note 4 in Notes to Financial Statements.
(1) The offering price is calculated by dividing the net asset value by 1
minus the maximum sales charge of 4.00%.
(2) Class B Shares have a contingent deferred sales charge. For a description
of a possible redemption charge, see a prospectus for the Funds.
Cl -- Class
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
GNMA -- Government National Mortgage Association
MTN -- Medium Term Note
Ser -- Series
The accompanying notes are an integral part of the financail statements.
28 OCTOBER 31, 2004
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND
STATEMENT OF NET ASSETS
SECTOR WEIGHTINGS (UNAUDITED)*:
[THE FOLLOWING TABLE WAS REPRESENTED AS BAR GRAPH IN THE PRINTED MATERIAL.]
General Obligation 38.1%
School District 14.4%
Transportation 10.5%
Higher Education 9.1%
Utilities 7.7%
Water 4.3%
General Revenue 3.6%
Power 3.4%
Related Party Money Market Fund 2.5%
Education 1.9%
Facilities 1.9%
Public Improvement 1.8%
Pollution 0.8%
* PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
MUNICIPAL BONDS - 96.6%
ALABAMA - 10.9%
Alabama State, Municipal Electric Authority,
Power Supply RB, Ser A, MBIA
5.000%, 09/01/33 $1,000 $ 1,027
Alabama State, Public School & College Authority,
Capital Improvements RB, Ser D
5.750%, 08/01/19 1,150 1,298
Birmingham, Capital Improvement Warrants GO, Ser A
5.550%, 08/01/21 1,000 1,109
Montgomery, Warrants GO, Ser A
5.100%, 10/01/09 1,000 1,079
Tuscaloosa, Warrants
5.650%, 01/01/17 1,000 1,121
University of Alabama RB, Ser A, MBIA
5.000%, 07/01/12 1,000 1,113
- -------------------------------------------------------------------------------
TOTAL ALABAMA 6,747
- -------------------------------------------------------------------------------
ALASKA - 1.7%
Anchorage Alaska, RB, MBIA
5.125%, 05/01/29 1,000 1,042
- -------------------------------------------------------------------------------
TOTAL ALASKA 1,042
- -------------------------------------------------------------------------------
CALIFORNIA - 13.4%
California State GO, FGIC
5.250%, 09/01/30 1,280 1,340
Los Angeles School District GO, Ser 1997-E, MBIA
5.125%, 01/01/27 1,000 1,049
Menlo Park, GO
5.250%, 08/01/27 1,000 1,059
San Diego School District GO, Ser 1998-D, FGIC
5.250%, 07/01/24 1,000 1,133
San Gabriel School District GO, Ser A, FSA
5.375%, 08/01/21 500 551
Southern California, Metropolitan Water
District RB, Ser A
5.100%, 07/01/25 1,000 1,054
University of California, Multiple Purpose
Projects RB, Ser M, FGIC
5.125%, 09/01/22 1,000 1,059
5.125%, 09/01/23 1,000 1,054
- -------------------------------------------------------------------------------
TOTAL CALIFORNIA 8,299
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 29
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
COLORADO - 3.5%
Denver, City and County GO, Ser B
5.625%, 08/01/07 $1,000 $ 1,090
La Plata County School District GO, MBIA
5.250%, 11/01/25 1,000 1,069
- -------------------------------------------------------------------------------
TOTAL COLORADO 2,159
- -------------------------------------------------------------------------------
CONNECTICUT - 1.8%
Connecticut State ST, Ser B, FGIC
5.000%, 01/01/16 1,000 1,104
- -------------------------------------------------------------------------------
TOTAL CONNECTICUT 1,104
- -------------------------------------------------------------------------------
FLORIDA - 3.5%
Florida State, Department of Transportation GO,
Right of Way Project, Ser B
5.500%, 07/01/11 1,000 1,087
Palm Beach County GO, Ser A
5.450%, 08/01/13 1,000 1,105
- -------------------------------------------------------------------------------
TOTAL FLORIDA 2,192
- -------------------------------------------------------------------------------
GEORGIA - 1.9%
Georgia State GO, Ser B
6.000%, 03/01/12 1,000 1,185
- -------------------------------------------------------------------------------
TOTAL GEORGIA 1,185
- -------------------------------------------------------------------------------
HAWAII - 1.8%
Hawaii State GO, Ser CO, FGIC
6.000%, 03/01/08 1,000 1,121
- -------------------------------------------------------------------------------
TOTAL HAWAII 1,121
- -------------------------------------------------------------------------------
ILLINOIS - 2.1%
Chicago, Project & Refunding GO, Ser C, FGIC
5.500%, 01/01/19 1,180 1,314
- -------------------------------------------------------------------------------
TOTAL ILLINOIS 1,314
- -------------------------------------------------------------------------------
KANSAS - 1.7%
Kansas State, Department of
Transportation RB, Ser A
5.000%, 09/01/06 1,000 1,054
- -------------------------------------------------------------------------------
TOTAL KANSAS 1,054
- -------------------------------------------------------------------------------
MASSACHUSETTS - 5.4%
Massachusetts Bay Transportation
Authority RB, Ser A
5.000%, 07/01/28 1,000 1,033
Massachusetts State, Consolidated Loan GO,
Ser A Pre-Refunded @ 101 (A)
6.000%, 02/01/10 2,000 2,332
- -------------------------------------------------------------------------------
TOTAL MASSACHUSETTS 3,365
- -------------------------------------------------------------------------------
30 OCTOBER 31, 2004
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND
STATEMENT OF NET ASSET
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
MINNESOTA - 0.8%
Minnesota State, Public Facilities Authority RB,
Water Pollution Control, Ser A
6.000%, 03/01/09 $ 500 $ 507
- -------------------------------------------------------------------------------
TOTAL MINNESOTA 507
- -------------------------------------------------------------------------------
NEW HAMPSHIRE - 1.8%
New Hampshire RB, MBIA
5.250%, 08/15/19 1,000 1,120
- -------------------------------------------------------------------------------
TOTAL NEW HAMPSHIRE 1,120
- -------------------------------------------------------------------------------
NEW JERSEY - 1.8%
New Jersey State GO, Ser F
5.500%, 08/01/11 1,000 1,141
- -------------------------------------------------------------------------------
TOTAL NEW JERSEY 1,141
- -------------------------------------------------------------------------------
NEW YORK - 11.3%
Brookhaven GO, FGIC
5.500%, 10/01/13 500 543
Metropolitan Transportation Authority RB, Ser F, MBIA
5.250%, 11/15/27 1,000 1,060
New York City GO, Ser C, MBIA
5.375%, 11/15/17 1,000 1,082
New York City Transitional Authority RB, Ser C, FGIC
5.250%, 08/01/14 1,000 1,123
New York State GO, Ser A
Pre-Refunded @ 101 (A)
5.875%, 03/15/05 1,000 1,025
New York State GO, Ser F
5.250%, 09/15/13 500 544
New York State, Environmental Water Facilities RB,
Pooled Financing Program, Ser F
5.250%, 11/15/20 500 551
Triborough, Bridge & Tunnel Authority RB, Ser A
Pre-Refunded @ 100.5 (A)
5.250%, 07/01/09 1,000 1,125
- -------------------------------------------------------------------------------
TOTAL NEW YORK 7,053
- -------------------------------------------------------------------------------
NORTH CAROLINA - 4.5%
Charlotte, Water & Sewer Systems RB
5.125%, 06/01/26 1,000 1,053
Winston-Salem, Water & Sewer Systems RB
Pre-Refunded @ 101 (A)
5.250%, 06/01/11 1,500 1,716
- -------------------------------------------------------------------------------
TOTAL NORTH CAROLINA 2,769
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 31
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
OHIO - 2.7%
Ohio State, Building Authority RB, State Facilities
Adult Correctional Facilities, Ser A, FSA
5.500%, 10/01/13 $1,000 $ 1,141
Pickerington Ohio, Local School District GO, FGIC
5.250%, 12/01/20 500 551
- -------------------------------------------------------------------------------
TOTAL OHIO 1,692
- -------------------------------------------------------------------------------
PENNSYLVANIA - 1.7%
Pennsylvania State, Intergovernmental Authority ST,
Philadelphia Funding Project, FGIC
5.250%, 06/15/15 1,000 1,085
- -------------------------------------------------------------------------------
TOTAL PENNSYLVANIA 1,085
- -------------------------------------------------------------------------------
SOUTH CAROLINA - 3.6%
Greenville County, School District RB
6.000%, 12/01/21 1,000 1,148
Lancaster County, School District GO, FSA
5.100%, 03/01/15 1,000 1,085
- -------------------------------------------------------------------------------
TOTAL SOUTH CAROLINA 2,233
- -------------------------------------------------------------------------------
TEXAS - 9.1%
Frisco, Independent School District GO, PSF
5.125%, 08/15/30 1,000 1,030
Grand Prairie, Independent School
District GO, FSA
5.375%, 02/15/18 1,000 1,118
Mesquite, Independent School District GO, PSF
5.500%, 08/15/21 1,160 1,282
Texas University RB, Ser B
5.250%, 08/15/20 1,000 1,106
Williamson County GO, FSA
5.250%, 02/15/27 1,040 1,089
- -------------------------------------------------------------------------------
TOTAL TEXAS 5,625
- -------------------------------------------------------------------------------
UTAH - 1.7%
Utah State, Intermountain Power Agency RB,
ETM, Ser B, MBIA
6.000%, 07/01/06 1,000 1,066
- -------------------------------------------------------------------------------
TOTAL UTAH 1,066
- -------------------------------------------------------------------------------
VIRGINIA - 6.3%
Bristol Virginia Utility System RB, MBIA
5.250%, 07/15/26 1,850 1,970
Newport News GO, Ser A, MBIA
Pre-Refunded @ 102 (A)
5.625%, 07/01/05 795 831
Virginia, Commonwealth Transportation Board RB,
Northern Virginia Transportation Program, Ser A
5.500%, 05/15/15 1,000 1,114
- -------------------------------------------------------------------------------
TOTAL VIRGINIA 3,915
- -------------------------------------------------------------------------------
32 OCTOBER 31, 2004
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND
STATEMENT OF NET ASSETS
FACE AMT. VALUE
DESCRIPTION (000)/SHARES (000)
- -------------------------------------------------------------------------------
WASHINGTON - 1.8%
Washington State GO, Ser B
6.000%, 01/01/13 $1,000 $ 1,143
- -------------------------------------------------------------------------------
TOTAL WASHINGTON 1,143
- -------------------------------------------------------------------------------
WEST VIRGINIA - 1.8%
West Virginia State GO, State Road Project, FGIC
5.625%, 06/01/18 1,000 1,127
- -------------------------------------------------------------------------------
TOTAL WEST VIRGINIA 1,127
- -------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(COST $55,987) 60,058
- -------------------------------------------------------------------------------
RELATED PARTY MONEY MARKET FUND - 2.5%
Expedition Tax-Free Money Market Fund+ 1,536,457 1,536
- -------------------------------------------------------------------------------
TOTAL RELATED PARTY MONEY MARKET FUND
(COST $1,536) 1,536
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.1%
(COST $57,523) 61,594
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES - 0.9%
Investment Advisory Fees Payable (18)
Administrator Fees Payable (11)
Custodian Fees Payable (1)
Trustees' Fees Payable (1)
Other Assets and Liabilities, Net 604
- -------------------------------------------------------------------------------
TOTAL OTHER ASSETS & LIABILITIES 573
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $62,167
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 33
EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND
STATEMENT OF NET ASSETS
VALUE
DESCRIPTION (000)
- -------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital of Institutional Shares
(unlimited authorization -- no par value)
based on 5,688,667 outstanding shares of
beneficial interest $57,174
Portfolio Capital of Investment Shares -- Class A
(unlimited authorization -- no par value)
based on 36,378 outstanding shares of
beneficial interest 348
Portfolio Capital of Investment Shares -- Class B
(unlimited authorization -- no par value)
based on 20,204 outstanding shares of
beneficial interest 214
Undistributed net investment income 24
Accumulated net realized gain on investments 336
Net unrealized appreciation on investments 4,071
- -------------------------------------------------------------------------------
NET ASSETS $62,167
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
INSTITUTIONAL SHARES
($61,554,847 / 5,688,667 SHARES) $ 10.82
- -------------------------------------------------------------------------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE --
INVESTMENT SHARES -- CLASS A
($393,337 / 36,378 SHARES) $ 10.81
- -------------------------------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE --
INVESTMENT SHARES -- CLASS A (1) $ 11.26
- -------------------------------------------------------------------------------
NET ASSET VALUE AND OFFERING PRICE PER SHARE --
INVESTMENT SHARES -- CLASS B (2)
($218,506 / 20,204 SHARES) $ 10.81
- -------------------------------------------------------------------------------
+ See Note 4 in Notes to Financial Statements.
(1) The offering price is calculated by dividing the net asset value by 1
minus the maximum sales charge of 4.00%.
(2) Class B Shares have a contingent deferred sales charge. For a description
of a possible redemption charge, see a prospectus for the Funds.
(A) Pre-Refunded Security -- The maturity date shown is the pre-refunded date.
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
GO -- General Obligation
MBIA -- Municipal Bond Insurance Association
PSF -- Permanent School Fund Guarantee Program
RB -- Revenue Bond
Ser -- Series
ST -- Special Tax
The accompanying notes are an integral part of the financial statements.
34 OCTOBER 31, 2004
EXPEDITION MONEY MARKET FUND
STATEMENT OF NET ASSETS
SECTOR WEIGHTINGS (UNAUDITED)*:
[THE FOLLOWING TABLE WAS REPRESENTED AS BAR GRAPH IN THE PRINTED MATERIAL.]
Commercial Paper 53.9%
Short-Term Investments 17.2%
U.S. Government Obligations 14.8%
Corporate Obligations 11.4%
Certificates of Deposit 2.7%
* PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
COMMERCIAL PAPER (A) - 53.9%
BANKS - 3.6%
Wells Fargo
1.750%, 11/29/04 $20,000 $ 19,973
- -------------------------------------------------------------------------------
TOTAL BANKS 19,973
- -------------------------------------------------------------------------------
BROKER/DEALERS - 4.5%
Bear Stearns
1.810%, 11/23/04 5,000 4,994
1.840%, 12/20/04 20,000 19,950
- -------------------------------------------------------------------------------
TOTAL BROKER/DEALERS 24,944
- -------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 17.6%
American General Finance
1.570%, 11/01/04 10,000 10,000
1.800%, 11/29/04 15,000 14,979
Citigroup
1.830%, 11/23/04 13,000 12,985
General Electric Capital
1.810%, 12/01/04 10,000 9,985
1.860%, 12/13/04 5,000 4,989
1.800%, 12/13/04 10,000 9,979
Household Finance
1.720%, 11/08/04 15,000 14,995
1.830%, 11/30/04 10,000 9,985
Toyota Motor Credit
1.880%, 11/23/04 10,000 9,989
- -------------------------------------------------------------------------------
TOTAL DIVERSIFIED FINANCIAL SERVICES 97,886
- -------------------------------------------------------------------------------
ELECTRICAL SERVICES - 1.0%
Southern
1.760%, 11/09/04 5,400 5,398
- -------------------------------------------------------------------------------
TOTAL ELECTRICAL SERVICES 5,398
- -------------------------------------------------------------------------------
FUNDING CORPORATIONS - 9.9%
Falcon Asset Securitization
1.780%, 11/01/04 10,000 10,000
1.790%, 11/12/04 15,000 14,992
Preferred Receivable Funding
1.780%, 11/09/04 10,000 9,996
Ranger Funding
1.780%, 11/05/04 20,000 19,996
- -------------------------------------------------------------------------------
TOTAL FUNDING CORPORATIONS 54,984
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 35
EXPEDITION MONEY MARKET FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
LEASING & RENTING - 1.8%
International Lease Finance
1.760%, 11/24/04 $10,000 $ 9,989
- -------------------------------------------------------------------------------
TOTAL LEASING & RENTING 9,989
- -------------------------------------------------------------------------------
MULTIMEDIA - 4.0%
Gannett
1.780%, 11/16/04 11,900 11,891
1.730%, 11/19/04 10,000 9,992
- -------------------------------------------------------------------------------
TOTAL MULTIMEDIA 21,883
- -------------------------------------------------------------------------------
PHARMACEUTICALS - 3.4%
Abbott Laboratories
1.770%, 11/24/04 9,000 8,990
Pfizer
1.810%, 11/30/04 10,000 9,985
- -------------------------------------------------------------------------------
TOTAL PHARMACEUTICALS 18,975
- -------------------------------------------------------------------------------
SPECIAL PURPOSE ENTITY - 4.5%
Three Pillars
1.840%, 11/19/04 25,000 24,977
- -------------------------------------------------------------------------------
TOTAL SPECIAL PURPOSE ENTITY 24,977
- -------------------------------------------------------------------------------
UTILITIES - 3.6%
National Rural Utilities
1.780%, 11/01/04 10,000 10,000
1.850%, 12/03/04 10,000 9,984
- -------------------------------------------------------------------------------
TOTAL UTILITIES 19,984
- -------------------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(COST $298,993) 298,993
- -------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - 11.4%
BANKS - 2.1%
Bank of America
6.875%, 02/15/05 1,000 1,014
7.875%, 05/16/05 3,000 3,097
Wachovia
6.950%, 11/01/04 2,535 2,535
Wells Fargo MTN, Ser F
6.500%, 06/01/05 5,000 5,125
- -------------------------------------------------------------------------------
TOTAL BANKS 11,771
- -------------------------------------------------------------------------------
BROKER/DEALERS - 3.8%
Merrill Lynch
6.000%, 11/15/04 7,700 7,713
6.000%, 07/15/05 7,000 7,177
Merrill Lynch MTN, Ser B
4.540%, 03/08/05 6,000 6,064
- -------------------------------------------------------------------------------
TOTAL BROKER/DEALERS 20,954
- -------------------------------------------------------------------------------
36 OCTOBER 31, 2004
EXPEDITION MONEY MARKET FUND
STATEMENT OF NET ASSET
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES - 3.1%
Associates Corporation of North America MTN, Ser G
8.580%, 11/23/04 $5,000 $ 5,021
Citigroup
4.125%, 06/30/05 5,025 5,085
General Electric Capital MTN, Ser A
4.250%, 01/28/05 2,000 2,014
Toyota Motor Credit MTN
4.050%, 11/30/04 5,000 5,009
- -------------------------------------------------------------------------------
TOTAL DIVERSIFIED FINANCIAL SERVICES 17,129
- -------------------------------------------------------------------------------
LEASING & RENTING - 0.4%
International Lease Finance MTN, Ser M
5.540%, 03/21/05 2,000 2,032
- -------------------------------------------------------------------------------
TOTAL LEASING & RENTING 2,032
- -------------------------------------------------------------------------------
PRINTING & PUBLISHING - 0.8%
Gannett
4.950%, 04/01/05 4,650 4,706
- -------------------------------------------------------------------------------
TOTAL PRINTING & PUBLISHING 4,706
- -------------------------------------------------------------------------------
UTILITIES - 1.2%
National Rural Utilities
5.500%, 01/15/05 2,625 2,647
6.125%, 05/15/05 3,995 4,079
- -------------------------------------------------------------------------------
TOTAL UTILITIES 6,726
- -------------------------------------------------------------------------------
TOTAL CORPORATE OBLIGATIONS
(COST $63,318) 63,318
- -------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS - 14.8%
FHLMC
1.800%, 11/23/04 (A) 15,000 14,983
1.880%, 03/31/05 (A) 10,000 9,922
7.000%, 07/15/05 5,000 5,164
FNMA
1.820%, 11/30/04 (A) 10,000 9,985
1.750%, 12/08/04 (A) 15,000 14,973
1.670%, 12/13/04 (A) 10,000 9,981
1.770%, 01/12/05 (A) 5,000 4,982
1.980%, 03/09/05 (A) 10,000 9,930
6.350%, 06/10/05 2,033 2,085
- -------------------------------------------------------------------------------
TOTAL U.S.GOVERNMENT OBLIGATIONS
(COST $82,005) 82,005
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 37
EXPEDITION MONEY MARKET FUND
STATEMENT OF NET ASSETS
SHARES/FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT - 2.7%
BANKS - 2.7%
Sun Trust Bank
2.060%, 02/17/05 $15,000 $ 15,000
- -------------------------------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT
(COST $15,000) 15,000
- -------------------------------------------------------------------------------
MONEY MARKET FUND - 0.9%
Financial Square Government Money Market Fund 4,964,267 4,964
- -------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(COST $4,964) 4,964
- -------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 16.2%
Deutsche Bank
1.780%, dated 10/29/04, to be repurchased
on 11/01/04, repurchase price $93,066,358
(collateralized by various U.S. Government
Obligations, ranging in par value $9,000-
7,247,000, 0.000%-14.000%,
11/04/04-08/15/26;
with total market value $91,854,148) $90,053 90,053
- -------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENT
(COST $90,053) 90,053
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.9%
(COST $554,333) 554,333
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES - 0.1%
Investment Advisory Fees Payable (89)
Distribution Fees Payable (79)
Administrator Fees Payable (75)
Custodian Fees Payable (10)
Trustees' Fees Payable (10)
Other Assets and Liabilities, Net 1,050
- -------------------------------------------------------------------------------
TOTAL OTHER ASSETS & LIABILITIES 787
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $555,120
- -------------------------------------------------------------------------------
38 OCTOBER 31, 2004
EXPEDITION MONEY MARKET FUND
STATEMENT OF NET ASSETS
VALUE
DESCRIPTION (000)
- -------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital of Institutional Shares
(unlimited authorization -- no par value)
based on 224,525,623 outstanding shares of
beneficial interest $224,524
Portfolio Capital of Investment Service Shares
(unlimited authorization -- no par value)
based on 264,411,766 outstanding shares of
beneficial interest 264,411
Portfolio Capital of Investment Sweep Class Shares
(unlimited authorization -- no par value)
based on 66,192,486 outstanding shares of
beneficial interest 66,190
Accumulated net realized loss on investments (5)
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $555,120
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
INSTITUTIONAL SHARES
($224,526,806 / 224,525,623 SHARES) $1.00
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
INVESTMENT SERVICE SHARES
($264,401,563 / 264,411,766 SHARES) $1.00
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
SWEEP CLASS SHARES
($66,191,854 / 66,192,486 SHARES) $1.00
- -------------------------------------------------------------------------------
(A) The rate reported is the effective yield at time of purchase.
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
MTN -- Medium Term Note
Ser -- Series
The accompanying notes are an integral part of the financial statements.
OCTOBER 31, 2004 39
EXPEDITION TAX-FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS
SECTOR WEIGHTINGS (UNAUDITED)*:
[THE FOLLOWING TABLE WAS REPRESENTED AS BAR GRAPH IN THE PRINTED MATERIAL.]
Medical 19.1%
Development 16.0%
Higher Education 12.2%
Multi-Family Housing 10.5%
General Obligation 8.6%
General Revenue 6.1%
School District 6.0%
Student Loan 5.5%
Utilities 4.2%
Facilities 3.5%
Housing 2.8%
Power 2.5%
Education 2.4%
Water 0.6%
* PERCENTAGES ARE BASED ON TOTAL INVESTMENTS.
FACE VALUE
DESCRIPTION AMT. (000) (000)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS - 99.8%
ALABAMA - 0.8%
Montgomery County, Special Care Financing
Authority RB, VHA Alabama Incorporated
Project, Ser H, AMBAC (A) (B)
1.800%, 12/01/30 $1,200 $ 1,200
- -------------------------------------------------------------------------------
TOTAL ALABAMA 1,200
- -------------------------------------------------------------------------------
ALASKA - 0.9%
Valdez, Marine Term RB, Pipelines Project,
Ser B (A) (B)
1.740%, 07/01/37 1,300 1,300
- -------------------------------------------------------------------------------
TOTAL ALASKA 1,300
- -------------------------------------------------------------------------------
ARIZONA - 0.7%
Phoenix, Arizona Industrial Development
Authority RB, Valley of the Sun YMCA
Project (A) (B) (C)
1.740%, 01/01/31 1,100 1,100
- -------------------------------------------------------------------------------
TOTAL ARIZONA 1,100
- -------------------------------------------------------------------------------
CALIFORNIA - 5.5%
Anaheim, Multi-Family Housing Finance RB,
Heritage Village Apartments, Ser A,
FNMA (A) (B)
1.760%, 07/15/33 300 300
California State Economic Recovery RB,
Ser C-6 (A) (B) (C)
1.710%, 07/01/23 4,100 4,100
City of Corona Multi-Family Housing RB,
County Hills Apartment Project, Ser B,
FHLMC (A) (B)
1.750%, 02/01/25 3,000 3,000
Hemet Multi-Family Housing RB, Sunwest
Retirement, Ser A, FHLMC (A) (B)
1.750%, 01/01/25 900 900
Los Angeles County Multi-Family Housing
Revenue Authority RB, Malibu Canyon
Apartments, Ser B (A) (B)
1.770%, 06/01/10 120 120
- -------------------------------------------------------------------------------
TOTAL CALIFORNIA 8,420
- -------------------------------------------------------------------------------
COLORADO - 3.3%
Arapahoe County, Water & Waste Authority RB,
Ser A (A) (B) (C)
1.790%, 12/01/33 1,000 1,000
40 OCTOBER 31, 2004
EXPEDITION TAX-FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
Denver City & County, Multi-Family Housing
Authority RB, Cottonwood Creek Project,
Ser A (A) (B)
1.760%, 04/15/14 $1,000 $ 1,000
Denver City & County, Multi-Family Housing
Authority RB, Ogden Residences
Project (A) (B) (C)
1.750%, 12/01/29 1,400 1,400
Thornton, Multi-Family Revenue RB,
Quail Ridge Project, Ser A (A) (B) (C)
1.790%, 04/01/10 1,550 1,550
- -------------------------------------------------------------------------------
TOTAL COLORADO 4,950
- -------------------------------------------------------------------------------
DELAWARE - 0.5%
Delaware State, Economic Development Authority
RB, School House Project (A) (B) (C)
1.850%, 12/01/15 750 750
- -------------------------------------------------------------------------------
TOTAL DELAWARE 750
- -------------------------------------------------------------------------------
FLORIDA - 7.8%
Collier County Educational Authority RB,
International College Project (A) (B) (C)
1.760%, 04/01/28 2,000 2,000
Florida Housing Finance Corporation RB,
Lakeside North, FHLMC (A) (B)
1.780%, 06/01/34 1,530 1,530
Florida State Multi-Family Housing Authority RB,
Country Club Project, FHLMC (A) (B)
1.790%, 12/01/12 2,000 2,000
Palm Beach County RB, Jewish Community Campus
Project (A) (B) (C)
1.780%, 03/01/30 1,800 1,800
Pinellas County, Health Facilities Authority RB,
Pooled Hospital Loan Program, AMBAC (A) (B)
1.760%, 12/01/15 3,500 3,500
Sarasota Hospital RB, Ser A, AMBAC (A) (B)
1.780%, 07/01/37 1,000 1,000
- -------------------------------------------------------------------------------
TOTAL FLORIDA 11,830
- -------------------------------------------------------------------------------
GEORGIA - 4.8%
Dekalb County, Development Authority RB,
American Cancer Society (A) (B) (C)
1.770%, 09/01/17 1,200 1,200
Dekalb County, Multi-Family Housing Authority RB,
Winters Creek Apartments Project, FNMA (A) (B)
1.780%, 06/15/25 400 400
Floyd County Development Authority RB,
Berry College Project (A) (B) (C)
1.770%, 08/01/22 200 200
OCTOBER 31, 2004 41
EXPEDITION TAX-FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
Fulton County, Multi-Family Housing Authority
RB, Champions Green Apartment Project,
Ser B (A) (B)
1.780%, 10/01/25 $ 800 $ 800
Fulton County, Multi-Family Housing Authority
RB, Hampton Hills Apartment Project,
FHLMC (A) (B)
1.770%, 06/01/23 600 600
Gwinnett, Wesleyan Development Authority RB,
Wesley School Project (A) (B) (C)
1.770%, 03/01/21 100 100
Macon-Bibb County, Hospital Authority RB,
Medical Center Project (A) (B) (C)
1.770%, 07/01/28 1,900 1,900
Macon-Bibb County, Hospital Authority RB,
Medical Control Center Project (A) (B) (C)
1.770%, 12/01/18 1,700 1,700
Marietta Multi-Family Housing Authority RB,
Winterset Apartments Project (A) (B) (C)
1.780%, 02/01/26 400 400
- -------------------------------------------------------------------------------
TOTAL GEORGIA 7,300
- -------------------------------------------------------------------------------
IDAHO - 1.8%
Idaho State, Health Facilities Authority RB,
St. Lukes Regional Medical Center
Project (A) (B) (C)
1.740%, 05/01/22 2,700 2,700
- -------------------------------------------------------------------------------
TOTAL IDAHO 2,700
- -------------------------------------------------------------------------------
ILLINOIS - 7.3%
Central Lake RB, Merlots, Ser B18, AMBAC (A) (B)
1.840%, 05/01/20 900 900
Cook County GO, Merlots, Ser B11, AMBAC (A) (B)
1.840%, 11/15/25 500 500
Illinois Development Finance Authority RB,
YMCA Chicago Project (A) (B) (C)
1.740%, 06/01/29 1,000 1,000
Illinois Educational Facilities Authority RB,
Cultural Pooled Financing (A) (B) (C)
1.810%, 07/01/29 1,000 1,000
Illinois Educational Facilities RB, Art
Institute of Chicago (A) (B)
1.770%, 03/01/34 2,300 2,300
Illinois State, Educational Facilities
Authority RB, Art Institute of Chicago
Project (A) (B)
1.770%, 03/01/27 1,000 1,000
Oakbrook Terrace, Industrial Development
Authority RB, Oakbrook Terrace Atrium
Project (A) (B) (C)
1.750%, 12/01/25 2,000 2,000
Orland Park, Industrial Development
Authority RB, Ser A (A) (B) (C)
1.700%, 12/28/04 755 755
42 OCTOBER 31, 2004
EXPEDITION TAX-FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
Schaumburg GO, Ser B (A) (B)
1.780%, 12/01/15 $1,700 $ 1,700
- -------------------------------------------------------------------------------
TOTAL ILLINOIS 11,155
- -------------------------------------------------------------------------------
INDIANA - 9.0%
Goshen Community Schools, TAW
1.900%, 12/31/04 2,490 2,491
Goshen Community Schools, TRAN
2.000%, 12/31/04 1,000 1,001
Indiana Health Facility Financing Authority RB,
Margaret Mary Community Hospital,
Ser A (A) (B) (C)
1.790%, 12/01/29 950 950
Indiana State Educational
Facilities RB (A) (B) (C)
1.740%, 07/01/18 2,400 2,400
Indiana State, Health Facilities Financing Authority RB,
Capital Access Project (A) (B) (C)
1.780%, 04/01/13 1,300 1,300
1.780%, 01/01/20 2,000 2,000
Mishawaka, TAW
1.480%, 12/31/04 2,000 2,000
Spencer Owen Independent Community Schools, TAN
2.000%, 12/31/04 1,500 1,502
- -------------------------------------------------------------------------------
TOTAL INDIANA 13,644
- -------------------------------------------------------------------------------
IOWA - 11.0%
Hills Healthcare RB, Mercy Community Hospital
Project (A) (B) (C)
1.740%, 08/01/32 2,950 2,950
Iowa Financial Authority Private College RB,
Drake University Project (A) (B) (C)
1.740%, 07/01/24 1,400 1,400
Iowa Financial Authority Private College RB,
Morningside College Project (A) (B) (C)
1.790%, 07/01/26 3,500 3,500
Iowa Higher Education Loan
Authority RB (A) (B) (C)
1.740%, 11/01/32 1,500 1,500
Iowa Higher Education Loan Authority RB,
Des Moines Project (A) (B) (C)
1.790%, 10/01/24 100 100
Iowa Higher Education Loan Authority RB,
Private College Facilities, Loras
Project (A) (B) (C)
1.740%, 11/01/30 2,645 2,645
Iowa Higher Education Loan Authority RB,
Private College, Des Moines
Project (A) (B) (C)
1.790%, 10/01/33 200 200
Iowa Higher Education Loan Authority RB,
Private College, St. Ambrose
Project (A) (B) (C)
1.740%, 04/01/33 2,650 2,650
OCTOBER 31, 2004 43
EXPEDITION TAX-FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
Iowa State, Finance Authority RB,
Drake University Project (A) (B) (C)
1.790%, 07/01/31 $ 100 $ 100
Iowa State, Health Care Facilities
Authority RB, Care Initiatives
Project (A) (B) (C)
1.790%, 11/01/32 100 100
Iowa State, Higher Education Loan Authority RB,
Wartburg Project, (A) (B) (C)
1.790%, 03/01/30 1,520 1,520
- -------------------------------------------------------------------------------
TOTAL IOWA 16,665
- -------------------------------------------------------------------------------
KANSAS - 0.5%
Kansas State Development Finance Authority
Lease RB (A) (B)
1.740%, 12/01/34 500 500
Kansas State Development Finance Authority RB,
Hays Medical Center, Ser N (A) (B) (C)
1.790%, 05/15/26 200 200
Kansas State Development Finance Authority RB,
Village Shalom Obligation Group,
Ser BB (A) (B) (C)
1.740%, 11/15/28 100 100
- -------------------------------------------------------------------------------
TOTAL KANSAS 800
- -------------------------------------------------------------------------------
KENTUCKY - 4.6%
Kentucky Asset Liability Commission, TRAN
3.000%, 06/29/05 2,500 2,524
Kentucky Association of Counties Advance, TRAN
3.000%, 06/30/05 2,500 2,521
Lexington-Fayette Urban County, Government
Industrial Building Authority RB, American
Horse Shows Association Project (A) (B) (C)
1.840%, 12/01/18 1,925 1,925
- -------------------------------------------------------------------------------
TOTAL KENTUCKY 6,970
- -------------------------------------------------------------------------------
MASSACHUSETTS - 3.3%
Chicopee Development Finance Authority BAN
2.000%, 11/19/04 3,536 3,537
Hull BAN
3.000%, 07/14/05 1,500 1,514
- -------------------------------------------------------------------------------
TOTAL MASSACHUSETTS 5,051
- -------------------------------------------------------------------------------
MICHIGAN - 3.2%
Dearborn Michigan School District GO (A) (B)
3.000%, 05/01/05 1,000 1,010
Jackson County, Economic Development
Authority RB, Thrifty Leoni
Project (A) (B) (C)
1.770%, 12/01/14 1,000 1,000
Michigan State Housing Development
Authority RB, Courtyards of Taylor Project,
Ser A, FNMA (A) (B)
1.770%, 08/15/32 500 500
44 OCTOBER 31, 2004
EXPEDITION TAX-FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
Michigan State Job Development Authority RB,
East Lansing Residential Project (A) (B) (C)
1.660%, 12/01/14 $ 900 $ 900
Northern University RB, FGIC (A) (B)
1.740%, 06/01/31 1,500 1,500
- -------------------------------------------------------------------------------
TOTAL MICHIGAN 4,910
- -------------------------------------------------------------------------------
MINNESOTA - 2.6%
Cohasset, Power & Light Project, RB
Series A (A) (B) (C)
1.740%, 06/01/20 2,200 2,200
Minnesota State Higher Educational
Facilities RB,
St. Olaf College, Ser 5-M1 (A) (B)
1.740%, 10/01/32 400 400
Minnesota State Higher Educational
Facilities RB,
St. Olaf College, Ser 5H (A) (B) (C)
1.740%, 10/01/30 1,400 1,400
- -------------------------------------------------------------------------------
TOTAL MINNESOTA 4,000
- -------------------------------------------------------------------------------
MISSOURI - 2.3%
Clayton, Industrial Development Authority RB,
Bailey Court Project (A) (B) (C)
1.900%, 01/01/09 500 500
Kansas City, Industrial Development
Authority RB, Ewing Marion Kauffman,
Ser A (A) (B)
1.740%, 04/01/27 100 100
Kirkwood RB, Commons Project (A) (B) (C)
1.790%, 10/01/17 100 100
Missouri State, Health & Educational Facilities
Authority RB, Drury College
Project (A) (B) (C)
1.790%, 08/15/24 200 200
Missouri State, Health & Educational Facilities
Authority RB, St. Louis University
Project (A) (B)
1.790%, 07/01/32 100 100
Missouri State, Health & Educational
Facilities RB, Saint Francis Medical Center
Project, Ser A (A) (B) (C)
1.740%, 06/01/26 1,500 1,500
University of Missouri RB, Ser B (A) (B)
1.740%, 11/01/30 1,000 1,000
- -------------------------------------------------------------------------------
TOTAL MISSOURI 3,500
- -------------------------------------------------------------------------------
MONTANA - 1.0%
Montana State, Board Investment RB, Municipal
Finance Consolidated-Intercap Project (A) (B)
1.250%, 03/01/25 1,500 1,500
- -------------------------------------------------------------------------------
TOTAL MONTANA 1,500
- -------------------------------------------------------------------------------
NEBRASKA - 0.5%
Nebraska State, Educational Financial Authority,
Creighton University Project RB (A) (B) (C)
1.740%, 08/01/31 800 800
- -------------------------------------------------------------------------------
TOTAL NEBRASKA 800
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 45
EXPEDITION TAX-FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
NEW YORK - 3.1%
New York City GO, Ser H-2 (A) (B)
1.740%, 08/01/14 $ 800 $ 800
New York City, Municipal Water Finance RB,
Ser C-1 (A) (B)
1.740%, 06/15/18 2,800 2,800
New York City, Municipal Water Finance RB,
Ser F-1 (A) (B)
1.740%, 06/15/33 1,100 1,100
- -------------------------------------------------------------------------------
TOTAL NEW YORK 4,700
- -------------------------------------------------------------------------------
OHIO - 4.1%
American Municipal Power BAN
1.250%, 12/02/04 1,635 1,635
Cincinnati GO (A) (B)
4.000%, 12/01/04 1,205 1,208
Clermont County, Economic Development
Authority RB, John Q. Hammons
Project (A) (B) (C)
1.350%, 05/01/12 605 605
Ohio State Higher Education Facilities RB,
Kenyon College Project (A) (B)
1.820%, 08/01/33 250 250
Painesville Local School District BAN
1.760%, 02/17/05 1,000 1,001
Stark County, BAN, Ser 2004-1
1.550%, 11/15/04 420 420
Toledo Lucas County, Port Facilities
Authority RB, Toledo Museum of Art
Project (A) (B) (C)
1.770%, 09/01/19 1,100 1,100
- -------------------------------------------------------------------------------
TOTAL OHIO 6,219
- -------------------------------------------------------------------------------
OKLAHOMA - 0.7%
Tulsa, Industrial Development Authority RB,
Ser A (A) (B)
1.400%, 05/15/17 1,000 1,000
- -------------------------------------------------------------------------------
TOTAL OKLAHOMA 1,000
- -------------------------------------------------------------------------------
PENNSYLVANIA - 5.2%
Allegheny County RB, Industrial Development
Authority, Jewish Home & Hospital Project,
Ser B (A) (B) (C)
1.800%, 10/01/26 1,240 1,240
Lawrence County Industrial Development
Authority RB, Villa Maria
Project (A) (B) (C)
1.790%, 07/01/33 1,800 1,800
Pennsylvania State, Economic Development
Financing Authority RB, Philadelphia Area
Project, Ser J3 (A) (B) (C)
1.710%, 11/01/30 3,100 3,100
Philadelphia Authority Ignles House RB (A) (B)
1.900%, 05/01/17 500 500
46 OCTOBER 31, 2004
EXPEDITION TAX-FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
Philadelphia RB, School for the Deaf
Project (A) (B) (C)
1.810%, 11/01/32 $1,000 $ 1,000
Philadelphia, Hospital & Higher Education
Facilities Authority RB, Temple
East Project, Ser B (A) (B) (C)
1.790%, 06/01/14 300 300
- -------------------------------------------------------------------------------
TOTAL PENNSYLVANIA 7,940
- -------------------------------------------------------------------------------
TENNESSEE - 0.7%
Wilson County, Industrial Development Board RB,
Hartmann Luggage Co. Project (A) (B)
1.810%, 07/01/26 1,100 1,100
- -------------------------------------------------------------------------------
TOTAL TENNESSEE 1,100
- -------------------------------------------------------------------------------
TEXAS - 3.0%
Cypress-Fairbanks GO, Independent School
District, Ser C-16 (A) (B)
1.840%, 02/15/27 2,500 2,500
Garland, Health Facilities Authority RB,
Chambrel Club Project, FNMA (A) (B)
1.770%, 11/15/32 600 600
Houston Utilities System RB, Water & Sewer
Revenue, MBIA (A) (B)
1.840%, 05/15/27 1,500 1,500
- -------------------------------------------------------------------------------
TOTAL TEXAS 4,600
- -------------------------------------------------------------------------------
WASHINGTON - 5.2%
Washington State GO, Ser A11, MBIA (A) (B)
1.840%, 06/01/17 1,390 1,390
Washington State, Housing Finance Commission
Non-Profit RB, Rockwood Retirement
Community (A) (B) (C)
1.820%, 01/01/34 300 300
Washington State, Housing Finance Commission
Non-Profit RB, Rockwood Retirement Community,
Ser A (A) (B) (C)
1.820%, 01/01/30 3,600 3,600
Washington State, Housing Finance Commission
Non-Profit RB, Tacoma Art Museum
Project (A) (B) (C)
1.790%, 06/01/32 100 100
Washington State, Housing Finance Commission
Non-Profit RB, Vincent Depaul Project,
Ser A, (A) (B) (C)
1.780%, 02/01/31 1,100 1,100
Washington State, Housing Finance Commission
Non-Profit RB, Pioneer Human Services
Project, Ser A (A) (B) (C)
1.820%, 08/01/19 350 350
Washington State, Housing Finance Commission
Non-Profit RB, YMCA Columbia/Willamette
Project (A) (B) (C)
1.840%, 08/01/24 100 100
Washington State, Housing Finance Commission
Non-Profit RB, YMCA Greater
Seattle (A) (B) (C)
1.750%, 07/01/11 1,000 1,000
- -------------------------------------------------------------------------------
TOTAL WASHINGTON 7,940
- -------------------------------------------------------------------------------
OCTOBER 31, 2004 47
EXPEDITION TAX-FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS
FACE VALUE
DESCRIPTION AMT. (000) (000)
- -------------------------------------------------------------------------------
WEST VIRGINIA - 0.8%
Putnam County, Industrial Development RB,
FMC Corporation Project (A) (B) (C)
1.650%, 10/01/11 $1,200 $ 1,200
- -------------------------------------------------------------------------------
TOTAL WEST VIRGINIA 1,200
- -------------------------------------------------------------------------------
WISCONSIN - 2.4%
Delavan Darien Wisconsin School District TRAN
3.000%, 08/26/05 1,100 1,112
Wisconsin State, Health & Educational
Facilities Authority RB,
Gundersen Lutheran Project, Ser B,
FSA (A) (B)
1.740%, 12/01/29 2,500 2,500
- -------------------------------------------------------------------------------
TOTAL WISCONSIN 3,612
- -------------------------------------------------------------------------------
MULTI-STATE - 0.4%
Greystone, Municipal Lease Certificate Trust
Authority COP, Ser A (A) (B) (C)
1.930%, 07/01/05 200 200
Greystone, Tax Exempt Certificate Trust
Authority RB, Senior Certificate of
Beneficial Ownership Project (A) (B) (C)
1.910%, 05/01/28 420 420
- -------------------------------------------------------------------------------
TOTAL MULTI-STATE 620
- -------------------------------------------------------------------------------
SOUTH DAKOTA - 0.4%
South Dakota State, Health & Educational
Facilities Authority RB, Rapid City
Regional Hospital, MBIA (A) (B)
1.740%, 09/01/27 550 550
- -------------------------------------------------------------------------------
TOTAL SOUTH DAKOTA 550
- -------------------------------------------------------------------------------
VIRGINIA - 2.4%
Loudon County, Industrial Development
Authority RB, Howard Hughes,
Ser A (A) (B)
1.710%, 02/15/38 3,600 3,600
- -------------------------------------------------------------------------------
TOTAL VIRGINIA 3,600
- -------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(COST $151,626) 151,626
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.8%
(COST $151,626) 151,626
- -------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES - 0.2%
Distribution Fees Payable (25)
Administrator Fees Payable (19)
Investment Advisory Fees Payable (13)
Trustees' Fees Payable (4)
Custodian Fees Payable (3)
Other Assets and Liabilities, Net 413
- -------------------------------------------------------------------------------
TOTAL OTHER ASSETS & LIABILITIES 349
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $151,975
- -------------------------------------------------------------------------------
48 OCTOBER 31, 2004
EXPEDITION TAX-FREE MONEY MARKET FUND
STATEMENT OF NET ASSETS
VALUE
DESCRIPTION (000)
- -------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital of Institutional Shares
(unlimited authorization -- no par value)
based on 47,826,209 outstanding shares of
beneficial interest $ 47,825
Portfolio Capital of Investment Investment Service Shares
(unlimited authorization -- no par value)
based on 85,334,857 outstanding shares of
beneficial interest 85,335
Portfolio Capital of Sweep Class Shares
(unlimited authorization -- no par value)
based on 18,830,600 outstanding shares of
beneficial interest 18,830
Accumulated net realized loss on investments (15)
- -------------------------------------------------------------------------------
NET ASSETS - 100.0% $151,975
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
INSTITUTIONAL SHARES
($47,820,254 / 47,826,209 SHARES) $1.00
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
INVESTMENT SERVICE SHARES
($85,325,146 / 85,334,857 SHARES) $1.00
- -------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE --
SWEEP CLASS SHARES
($18,829,666 / 18,830,600 SHARES) $1.00
- -------------------------------------------------------------------------------
(A) Floating rate security.
(B) Put & Demand Feature -- the date reported is the final maturity date, not
the next reset or put date.
(C) Securities are held in conjunction with a letter of credit from a major
bank or financial institution.
AMBAC -- American Municipal Bond Assurance Company
BAN -- Bond Anticipation Notes
COP -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Corporation
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GO -- General Obligation
MBIA -- Municipal Bond Insurance Association
RB -- Revenue Bond
Ser -- Series
TAN -- Tax Anticipation Notes
TAW -- Tax Anticipation Warrants
TRAN -- Tax & Revenue Anticipation Notes
VHA -- Veterans Housing Authority
The accompanying notes are an integral part of the financial statements.
OCTOBER 31, 2004 49
STATEMENTS OF OPERATIONS (000)
For the year ended October 31, 2004
EXPEDITION EXPEDITION
EQUITY EQUITY INCOME
FUND FUND
----------- -----------
INVESTMENT INCOME:
Dividends $2,289 $ 231
Interest 13 1
Less foreign tax withheld (3) (2)
------ ------
Total investment income 2,299 230
------ ------
EXPENSES:
Investment advisory fees 1,316 80
Administrator fees 351 75
Custodian fees 35 2
Distribution fees --
Investment Shares - Class A 20 1
Investment Shares - Class B 149 7
Trustees' fees 6 --
Transfer agency fee 340 97
Professional fees 31 18
Registration fees 24 2
Printing expense 19 1
Other fees 14 1
------ ------
Total expenses 2,305 284
------ ------
Less:
Waiver of investment advisory fees (25) (80)
Reimbursement of expenses by investment advisor -- (63)
------ ------
Net expenses 2,280 141
------ ------
NET INVESTMENT INCOME 19 89
------ ------
Net realized gain on investments 12,213 1,067
Net change in unrealized appreciation
(depreciation) of investments (3,787) 52
------ ------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 8,426 1,119
------ ------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $8,445 $1,208
====== ======
Amounts designated as "--" are $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
50 OCTOBER 31, 2004
STATEMENTS OF OPERATIONS (000)
For the year ended October 31, 2004
EXPEDITION
EXPEDITION TAX-FREE
INVESTMENT INVESTMENT
GRADE BOND GRADE BOND
FUND FUND
----------- -----------
INVESTMENT INCOME:
Interest $5,721 $3,025
Dividends 14 8
------ ------
Total investment income 5,735 3,033
------ ------
EXPENSES:
Investment advisory fees 551 337
Administrator fees 221 135
Custodian fees 22 13
Distribution fees --
Investment Shares - Class A 13 1
Investment Shares - Class B 20 2
Trustees' fees 3 2
Transfer agency fee 145 92
Professional fees 26 23
Registration fees 19 11
Printing expense 12 7
Other fees 11 11
------ ------
Total expenses 1,043 634
------ ------
Less:
Waiver of investment advisory fees (128) (92)
------ ------
Net expenses 915 542
------ ------
NET INVESTMENT INCOME 4,820 2,491
------ ------
Net realized gain on investments 478 336
Net change in unrealized appreciation
(depreciation) of investments (656) 292
------ ------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (178) 628
------ ------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $4,642 $3,119
====== ======
The accompanying notes are an integral part of the financial statements.
OCTOBER 31, 2004 51
STATEMENTS OF OPERATIONS (000)
For the year ended October 31, 2004
EXPEDITION
EXPEDITION TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
----------- -----------
INVESTMENT INCOME:
Interest $ 7,472 $2,040
Dividends 53 --
------- ------
Total investment income 7,525 2,040
------- ------
EXPENSES:
Investment advisory fees 2,406 699
Administrator fees 1,203 349
Shareholder Servicing fees --
Investment Service Shares 742 203
Sweep Class Shares 237 84
Custodian fees 120 35
Trustees' fees 19 6
Transfer agency fee 358 107
Registration fees 98 35
Professional fees 66 32
Printing expense 61 19
Other fees 17 8
------- ------
Total expenses 5,327 1,577
------- ------
Less:
Waiver of investment advisory fees (1,340) (451)
Waiver of administrator fees (301) (87)
------- ------
Net expenses 3,686 1,039
------- ------
NET INVESTMENT INCOME 3,839 1,001
------- ------
Net realized loss on investments (6) (2)
------- ------
NET REALIZED LOSS
ON INVESTMENTS (6) (2)
------- ------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 3,833 $ 999
======= ======
Amounts designated as "--" are $0 or have been rounded to $0
The accompanying notes are an integral part of the financial statements.
52 OCTOBER 31, 2004
STATEMENTS OF CHANGES IN NET ASSETS (000)
For the years ended October 31,
EXPEDITION EXPEDITION
EQUITY EQUITY INCOME
FUND FUND
------------------------ ------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
OPERATIONS:
Investment income $ 19 $ 710 $ 89 $ 86
Net realized gain (loss) on investments 12,213 (22,249) 1,067 (2,349)
Net change in unrealized appreciation
(depreciation) of investments (3,787) 53,720 52 4,184
-------- -------- ------- -------
Net increase in net assets resulting
from operations 8,445 32,181 1,208 1,921
-------- -------- ------- -------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income:
Institutional Shares (145) (775) (80) (106)
Investment Shares - Class A -- (10) (2) (2)
Investment Shares - Class B -- -- (1) --
Realized capital gains:
Institutional Shares -- -- -- (4)
Investment Shares - Class A -- -- -- --
Investment Shares - Class B -- -- -- --
-------- -------- ------- -------
Total dividends and distributions (145) (785) (83) (112)
-------- -------- ------- -------
CAPITAL SHARE TRANSACTIONS (1):
Institutional Shares:
Proceeds from sales 7,044 11,892 -- 39
Shares issued in lieu of cash distributions 52 397 -- --
Payments for redemptions (58,450) (56,560) (4,883) (3,157)
-------- -------- ------- -------
Decrease in net assets from
Investment Shares transactions (51,354) (44,271) (4,883) (3,118)
-------- -------- ------- -------
Investment Shares - Class A:
Proceeds from sales 816 1,872 35 26
Shares issued in lieu of cash distributions -- 9 2 1
Payments for redemptions (2,906) (1,610) (39) (100)
-------- -------- ------- -------
Increase (decrease) in net assets from
Investment Shares - Class A transactions (2,090) 271 (2) (73)
-------- -------- ------- -------
Investment Shares - Class B:
Proceeds from sales 1,384 1,577 117 80
Shares issued in lieu of cash distributions -- -- 1 --
Payments for redemptions (3,311) (2,176) (282) (164)
-------- -------- ------- -------
Decrease in net assets from
Investment Shares - Class B transactions (1,927) (599) (164) (84)
-------- -------- ------- -------
Total decrease in net assets from
capital share transactions (55,371) (44,599) (5,049) (3,275)
-------- -------- ------- -------
Total decrease in net assets (47,071) (13,203) (3,924) (1,466)
-------- -------- ------- -------
NET ASSETS AT BEGINNING OF YEAR 180,076 193,279 13,414 14,880
-------- -------- ------- -------
NET ASSETS AT END OF YEAR $133,005 $180,076 $ 9,490 $13,414
======== ======== ======= =======
Undistributed net investment income
included in net assets at year end $ 19 $ 145 $ 6 $ --
======== ======== ======= =======
(1) See note 5 in the notes to financial statements for additional
information.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
OCTOBER 31, 2004 53
STATEMENTS OF CHANGES IN NET ASSETS (000)
For the years ended October 31,
EXPEDITION
EXPEDITION TAX-FREE
INVESTMENT GRADE INVESTMENT GRADE
BOND FUND BOND FUND
------------------------ ------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
OPERATIONS:
Investment income $ 4,820 $ 5,265 $ 2,491 $ 2,668
Net realized gain on investments 478 776 336 1,425
Net change in unrealized appreciation
(depreciation) of investments (656) (1,476) 292 (711)
-------- -------- -------- --------
Net increase in net assets resulting
from operations 4,642 4,565 3,119 3,382
-------- -------- -------- --------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income:
Institutional Shares (4,574) (5,021) (2,468) (2,652)
Investment Shares - Class A (216) (231) (10) (15)
Investment Shares - Class B (67) (73) (6) (6)
Realized capital gains:
Institutional Shares -- -- (1,416) (1,267)
Investment Shares - Class A -- -- (4) (14)
Investment Shares - Class B -- -- (4) (4)
-------- -------- -------- --------
Total dividends and distributions (4,857) (5,325) (3,908) (3,958)
-------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS (1):
Institutional Shares:
Proceeds from sales 10,484 27,319 4,365 10,476
Shares issued in lieu of cash distributions 2,672 2,852 960 989
Payments for redemptions (18,563) (33,137) (14,195) (14,752)
-------- -------- -------- --------
Decrease in net assets from
Institutional Shares transactions (5,407) (2,966) (8,870) (3,287)
-------- -------- -------- --------
Investment Shares - Class A:
Proceeds from sales 87 489 328 182
Shares issued in lieu of cash distributions 171 179 14 28
Payments for redemptions (727) (525) (252) (723)
-------- -------- -------- --------
Increase (decrease) in net assets from
Investment Shares - Class A transactions (469) 143 90 (513)
-------- -------- -------- --------
Investment Shares - Class B:
Proceeds from sales 273 669 5 41
Shares issued in lieu of cash distributions 63 67 8 7
Payments for redemptions (725) (510) (13) (51)
-------- -------- -------- --------
Increase (decrease) in net assets from
Investment Shares - Class B transactions (389) 226 -- (3)
-------- -------- -------- --------
Total decrease in net assets from
capital share transactions (6,265) (2,597) (8,780) (3,803)
-------- -------- -------- --------
Total decrease in net assets (6,480) (3,357) (9,569) (4,379)
-------- -------- -------- --------
NET ASSETS AT BEGINNING OF YEAR 114,174 117,531 71,736 76,115
-------- -------- -------- --------
NET ASSETS AT END OF YEAR $107,694 $114,174 $ 62,167 $ 71,736
======== ======== ======== ========
Undistributed net investment income
included in net assets at year end $ -- $ -- $ 24 $ 17
======== ======== ======== ==========
(1) See note 5 in the notes to financial statements for additional
information.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
54 OCTOBER 31, 2004
STATEMENTS OF CHANGES IN NET ASSETS (000)
For the years ended October 31,
EXPEDITION
EXPEDITION TAX-FREE
MONEY MARKET MONEY MARKET
FUND FUND
------------------------ ------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
OPERATIONS:
Investment income $ 3,839 $ 4,347 $ 1,001 $ 1,321
Net realized gain (loss) on investments (6) 24 (2) (3)
---------- --------- --------- ---------
Net increase in net assets resulting
from operations 3,833 4,371 999 1,318
---------- --------- --------- ---------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income:
Institutional Shares (1,913) (2,064) (512) (727)
Investment Service Shares (1,650) (2,081) (405) (512)
Sweep Class Shares (278) (249) (84) (81)
---------- --------- --------- ---------
Total dividends (3,841) (4,394) (1,001) (1,320)
---------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS (1):
Institutional Shares:
Proceeds from sales $1,028,696 831,364 246,684 395,054
Shares issued in lieu of cash distributions 65 90 -- --
Payments for redemptions (1,055,443) (818,571) (282,981) (408,728)
---------- --------- --------- ---------
Increase (decrease) in net assets from
Institutional Shares transactions (26,682) 12,883 (36,297) (13,674)
---------- --------- --------- ---------
Investment Service Shares:
Proceeds from sales 820,319 646,623 203,064 231,192
Shares issued in lieu of cash distributions 126 214 2 4
Payments for redemptions (869,884) (689,955) (204,801) (220,987)
---------- --------- --------- ---------
Increase (decrease) in net assets from
Investment Service Shares transactions (49,439) (43,118) (1,735) 10,209
---------- --------- --------- ---------
Sweep Class Shares:
Proceeds from sales 198,220 153,774 62,477 62,132
Shares issued in lieu of cash distributions 259 233 23 19
Payments for redemptions (185,787) (150,961) (66,406) (47,843)
---------- --------- --------- ---------
Increase (decrease) in net assets from
Sweep Class Shares transactions 12,692 3,046 (3,906) 14,308
---------- --------- --------- ---------
Total increase (decrease) in net assets from
capital share transactions (63,429) (27,189) (41,938) 10,843
---------- --------- --------- ---------
Total increase (decrease) in net assets (63,437) (27,212) (41,940) 10,841
---------- --------- --------- ---------
NET ASSETS AT BEGINNING OF YEAR 618,557 645,769 193,915 183,074
---------- --------- --------- ---------
NET ASSETS AT END OF YEAR $ 555,120 $ 618,557 $ 151,975 $ 193,915
========== ========= ========= =========
Undistributed net investment income
included in net assets at year end $ -- $ 2 $ -- $ --
========== ========= ========= =========
(1) See note 5 in the notes to financial statements for additional
information.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
OCTOBER 31, 2004 55
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout Each Period
- -----------------------------------------------------------------------------------------------------------------
REALIZED AND
NET NET UNREALIZED DIVIDENDS
ASSET VALUE, INVESTMENT GAINS OR TOTAL FROM NET DIVIDENDS
BEGINNING INCOME (LOSSES) ON FROM INVESTMENT FROM
OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME CAPITAL GAINS
- -----------------------------------------------------------------------------------------------------------------
EQUITY FUND
- -----------------------------------------------------------------------------------------------------------------
Institutional Shares
2004 $ 7.39 $ 0.03 $ 0.34 $ 0.37 $(0.01) $ --
2003 6.14 0.04 1.24 1.28 (0.03) --
2002 7.99 0.01 (1.86) (1.85) -- --
2001 14.25 (0.01) (4.44) (4.45) -- (1.81)
2000 13.09 (0.02) 2.67 2.65 -- (1.49)
Investment Shares - Class A
2004 $ 7.33 $(0.02) $ 0.36 $ 0.34 $ -- $ --
2003 6.08 0.02 1.24 1.26 (0.01) --
2002 7.93 (0.02) (1.83) (1.85) -- --
2001 14.18 (0.03) (4.41) (4.44) -- (1.81)
2000 13.06 (0.03) 2.64 2.61 -- (1.49)
Investment Shares - Class B
2004 $ 7.03 $(0.11) $ 0.39 $ 0.28 $ -- $ --
2003 5.87 (0.04) 1.20 1.16 -- --
2002 7.72 (0.07) (1.78) (1.85) -- --
2001 13.95 (0.09) (4.33) (4.42) -- (1.81)
2000 12.96 (0.08) 2.56 2.48 -- (1.49)
- -----------------------------------------------------------------------------------------------------------------
EQUITY INCOME FUND
- -----------------------------------------------------------------------------------------------------------------
Institutional Shares
2004 $ 6.65 $ 0.06 $ 0.68 $ 0.74 $(0.06) $ --
2003 5.78 0.05 0.87 0.92 (0.05)++ --
2002 7.42 0.04 (1.64) (1.60) (0.04) --
2001 10.77 0.05 (2.82) (2.77) (0.05) (0.53)
2000(1) 10.00 0.07 0.76 0.83 (0.06) --
Investment Shares - Class A
2004 $ 6.64 $ 0.04 $ 0.69 $ 0.73 $(0.05) $ --
2003 5.77 0.04 0.87 0.91 (0.04)++ --
2002 7.41 0.02 (1.64) (1.62) (0.02) --
2001 10.76 0.04 (2.83) (2.79) (0.03) (0.53)
2000(2) 9.78 0.04 1.00 1.04 (0.06) --
Investment Shares - Class B
2004 $ 6.58 $(0.04) $ 0.70 $ 0.66 $(0.01) $ --
2003 5.73 (0.02) 0.87 0.85 --*++ --
2002 7.38 (0.03) (1.62) (1.65) -- --
2001 10.75 (0.02) (2.82) (2.84) -- (0.53)
2000(3) 9.82 0.01 0.94 0.95 (0.02) --
* Amount represents less than $0.01.
+ Returns are for the period indicated and have not been annualized.
++ Includes Return of Capital of $0.0003.
The accompanying notes are an integral part of the financial statements.
56 OCTOBER 31, 2004
TOTAL NET ASSET RATIO OF
DIVIDENDS VALUE, NET ASSETS EXPENSES
AND END OF TOTAL END OF TO AVERAGE
DISTRIBUTIONS PERIOD RETURN+ PERIOD (000) NET ASSETS
- ---------------------------------------------------------------------------------------------------
EQUITY FUND
- ---------------------------------------------------------------------------------------------------
Institutional Shares
2004 $(0.01) $ 7.75 4.97% $112,114 1.20%
2003 (0.03) 7.39 20.99% 156,142 1.18%
2002 -- 6.14 (23.15)% 173,038 1.16%
2001 (1.81) 7.99 (34.99)% 288,992 1.10%
2000 (1.49) 14.25 22.01% 422,148 1.05%
Investment Shares - Class A
2004 $ -- $ 7.67 4.64% $ 7,220 1.45%
2003 (0.01) 7.33 20.72% 8,910 1.43%
2002 -- 6.08 (23.33)% 7,100 1.41%
2001 (1.81) 7.93 (35.11)% 11,253 1.35%
2000 (1.49) 14.18 21.73% 10,090 1.30%
Investment Shares - Class B
2004 $ -- $ 7.31 3.98% $ 13,671 2.20%
2003 -- 7.03 19.76% 15,024 2.18%
2002 -- 5.87 (23.96)% 13,141 2.16%
2001 (1.81) 7.72 (35.61)% 18,186 2.10%
2000 (1.49) 13.95 20.80% 20,358 2.05%
- ---------------------------------------------------------------------------------------------------
EQUITY INCOME FUND
- ---------------------------------------------------------------------------------------------------
Institutional Shares
2004 $(0.06) $ 7.33 11.22% $ 8,573 1.25%
2003 (0.05)++ 6.65 16.12% 12,422 1.25%
2002 (0.04) 5.78 (21.66)% 13,865 1.25%
2001 (0.58) 7.42 (26.99)% 20,401 1.25%
2000(1) (0.06) 10.77 8.36% 34,420 1.25%
Investment Shares - Class A
2004 $(0.05) $ 7.32 11.00% $ 304 1.50%
2003 (0.04)++ 6.64 15.84% 277 1.50%
2002 (0.02) 5.77 (21.87)% 309 1.50%
2001 (0.56) 7.41 (27.19)% 408 1.50%
2000(2) (0.06) 10.76 10.60% 286 1.50%
Investment Shares - Class B
2004 $(0.01) $ 7.23 10.01% $ 613 2.25%
2003 --*++ 6.58 14.85% 715 2.25%
2002 -- 5.73 (22.36)% 706 2.25%
2001 (0.53) 7.38 (27.66)% 836 2.25%
2000(3) (0.02) 10.75 9.71% 427 2.25%
RATIO OF
EXPENSES
TO AVERAGE
RATIO OF NET ASSETS
INVESTMENT (EXCLUDING
INCOME (LOSS) WAIVERS
TO AVERAGE AND PORTFOLIO
NET ASSETS REIMBURSEMENT) TURNOVER RATE
- -----------------------------------------------------------------------------
EQUITY FUND
- -----------------------------------------------------------------------------
Institutional Shares
2004 0.11% 1.22% 57.50%
2003 0.51% 1.18% 66.18%
2002 0.16% 1.16% 47.88%
2001 (0.09)% 1.10% 79.08%
2000 (0.22)% 1.05% 64.54%
Investment Shares - Class A
2004 (0.14)% 1.47% 57.50%
2003 0.24% 1.43% 66.18%
2002 (0.09)% 1.41% 47.88%
2001 (0.32)% 1.35% 79.08%
2000 (0.49)% 1.30% 64.54%
Investment Shares - Class B
2004 (0.89)% 2.22% 57.50%
2003 (0.50)% 2.18% 66.18%
2002 (0.84)% 2.16% 47.88%
2001 (1.08)% 2.10% 79.08%
2000 (1.24)% 2.05% 64.54%
- ----------------------------------------------------------------------------
EQUITY INCOME FUND
- ----------------------------------------------------------------------------
Institutional Shares
2004 0.89% 2.58% 27.35%
2003 0.70% 2.23% 99.66%
2002 0.56% 1.72% 93.43%
2001 0.60% 1.42% 88.73%
2000(1) 1.00% 1.25% 73.31%
Investment Shares - Class A
2004 0.73% 2.83% 27.35%
2003 0.46% 2.48% 99.66%
2002 0.32% 1.97% 93.43%
2001 0.32% 1.67% 88.73%
2000(2) 0.84% 1.50% 73.31%
Investment Shares - Class B
2004 (0.04)% 3.58% 27.35%
2003 (0.29)% 3.23% 99.66%
2002 (0.43)% 2.72% 93.43%
2001 (0.45)% 2.42% 88.73%
2000(3) (0.15)% 2.25% 73.31%
(1) Commenced operations on March 3, 2000. All ratios for the period have been
annualized.
(2) Commenced operations on March 10, 2000. All ratios for the period have
been annualized.
(3) Commenced operations on March 15, 2000. All ratios for the period have
been annualized.
Amounts designated as "--" are either $0 or have been rounded to $0.
OCTOBER 31, 2004 57
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout Each Period
- --------------------------------------------------------------------------------
NET REALIZED AND DIVIDENDS
ASSET VALUE, NET UNREALIZED TOTAL FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT GAINS OR (LOSSES) FROM INVESTMENT FROM
OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS
- -----------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE BOND FUND
- -----------------------------------------------------------------------------------------------------------------------------
Institutional Shares
2004 $10.70 $0.47 $(0.02) $0.45 $(0.47) $ --
2003 10.77 0.49 (0.07) 0.42 (0.49) --
2002 10.60 0.53 0.17 0.70 (0.53) --
2001 9.72 0.53 0.88 1.41 (0.53) --
2000 9.65 0.53 0.07 0.60 (0.53) --
Investment Shares - Class A
2004 $10.69 $0.45 $(0.02) $0.43 $(0.45) $ --
2003 10.76 0.46 (0.07) 0.39 (0.46) --
2002 10.59 0.50 0.17 0.67 (0.50) --
2001 9.71 0.50 0.88 1.38 (0.50) --
2000 9.64 0.51 0.07 0.58 (0.51) --
Investment Shares - Class B
2004 $10.71 $0.37 $(0.01) $0.36 $(0.37) $ --
2003 10.78 0.38 (0.07) 0.31 (0.38) --
2002 10.61 0.42 0.17 0.59 (0.42) --
2001 9.72 0.43 0.89 1.32 (0.43) --
2000 9.64 0.44 0.08 0.52 (0.44) --
- ---------------------------------------------------------------------------------------------------------------------------
TAX-FREE INVESTMENT GRADE BOND FUND
- ---------------------------------------------------------------------------------------------------------------------------
Institutional Shares
2004 $10.91 $0.40 $ 0.13 $0.53 $(0.40) $(0.22)
2003 11.00 0.39 0.10 0.49 (0.39) (0.19)
2002(1) 10.89 0.43 0.15 0.58 (0.43) (0.04)
2001 10.37 0.44 0.52 0.96 (0.44) --
2000(2) 10.00 0.31 0.37 0.68 (0.31) --
Investment Shares - Class A
2004 $10.91 $0.37 $ 0.12 $0.49 $(0.37) $(0.22)
2003 10.99 0.36 0.11 0.47 (0.36) (0.19)
2002(1) 10.88 0.40 0.15 0.55 (0.40) (0.04)
2001 10.36 0.42 0.52 0.94 (0.42) --
2000(3) 10.05 0.28 0.31 0.59 (0.28) --
Investment Shares - Class B
2004 $10.91 $0.29 $ 0.12 $0.41 $(0.29) $(0.22)
2003 10.99 0.28 0.11 0.39 (0.28) (0.19)
2002(1) 10.89 0.32 0.14 0.46 (0.32) (0.04)
2001 10.37 0.34 0.52 0.86 (0.34) --
2000(4) 10.18 0.13 0.19 0.32 (0.13) --
+ Returns are for the period indicated and have not been annualized.
(1) As required, effective November 1, 2001, the Funds adopted the provisions
of the AICPA AUDIT AND ACCOUNTING GUIDE FOR INVESTMENT COMPANIES that
requires it to record the accretion of market discounts.
The accompanying notes are an integral part of the financial statements.
58 OCTOBER 31, 2004
- ----------------------------------------------------------------------------------------
TOTAL NET ASSET
DIVIDENDS VALUE, NET ASSETS
AND END OF TOTAL END OF
DISTRIBUTIONS PERIOD RETURN+ PERIOD (000)
- ----------------------------------------------------------------------------------------
INVESTMENT GRADE BOND FUND
- ----------------------------------------------------------------------------------------
Institutional Shares
2004 $(0.47) $ 10.68 4.33% $ 101,031
2003 (0.49) 10.70 3.89% 106,643
2002 (0.53) 10.77 6.88% 110,312
2001 (0.53) 10.60 15.00% 119,279
2000 (0.53) 9.72 6.49% 136,354
Investment Shares - Class A
2004 $(0.45) $10.67 4.07% $ 4,931
2003 (0.46) 10.69 3.63% 5,407
2002 (0.50) 10.76 6.61% 5,305
2001 (0.50) 10.59 14.72% 5,262
2000 (0.51) 9.71 6.22% 5,222
Investment Shares - Class B
2004 $(0.37) $10.70 3.39% $ 1,732
2003 (0.38) 10.71 2.86% 2,124
2002 (0.42) 10.78 5.82% 1,914
2001 (0.43) 10.61 13.99% 1,059
2000 (0.44) 9.72 5.54% 204
- --------------------------------------------------------------------------------------
TAX-FREE INVESTMENT GRADE BOND FUND
- --------------------------------------------------------------------------------------
Institutional Shares
2004 $(0.62) $ 10.82 4.98% $61,555
2003 (0.58) 10.91 4.57% 71,211
2002(1) (0.47) 11.00 5.50% 75,064
2001 (0.44) 10.89 9.53% 86,461
2000(2) (0.31) 10.37 6.84% 84,729
Investment Shares - Class A
2004 $(0.59) $ 10.81 4.62% $ 393
2003 (0.55) 10.91 4.40% 305
2002(1) (0.44) 10.99 5.24% 827
2001 (0.42) 10.88 9.26% 872
2000(3) (0.28) 10.36 5.95% 523
Investment Shares - Class B
2004 $(0.51) $ 10.81 3.84% $ 219
2003 (0.47) 10.91 3.63% 220
2002(1) (0.36) 10.99 4.36% 224
2001 (0.34) 10.89 8.45% 182
2000(4) (0.13) 10.37 3.16% 3
- -----------------------------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF INVESTMENT RATIO OF EXPENSES
EXPENSES INCOME TO TO AVERAGE NET ASSETS
TO AVERAGE AVERAGE (EXCLUDING WAIVERS PORTFOLIO
NET ASSETS NET ASSETS AND REIMBURSEMENTS) TURNOVER RATE
- -----------------------------------------------------------------------------------------------------------
INVESTMENT GRADE BOND FUND
- -----------------------------------------------------------------------------------------------------------
Institutional Shares
2004 0.80% 4.40% 0.92% 25.05%
2003 0.80% 4.42% 0.89% 27.97%
2002 0.80% 5.06% 0.90% 13.80%
2001 0.77% 5.35% 0.86% 29.53%
2000 0.75% 5.61% 0.89% 77.09%
Investment Shares - Class A
2004 1.05% 4.15% 1.17% 25.05%
2003 1.05% 4.17% 1.14% 27.97%
2002 1.05% 4.81% 1.15% 13.80%
2001 1.02% 5.09% 1.11% 29.53%
2000 1.00% 5.32% 1.14% 77.09%
Investment Shares - Class B
2004 1.80% 3.40% 1.92% 25.05%
2003 1.80% 3.42% 1.89% 27.97%
2002 1.80% 4.03% 1.90% 13.80%
2001 1.77% 4.30% 1.86% 29.53%
2000 1.75% 4.58% 1.89% 77.09%
- -----------------------------------------------------------------------------------------------------------
TAX-FREE INVESTMENT GRADE BOND FUND
- -----------------------------------------------------------------------------------------------------------
Institutional Shares
2004 0.80% 3.70% 0.94% 17.37%
2003 0.80% 3.54% 0.91% 38.86%
2002(1) 0.80% 3.96% 0.88% 23.39%
2001 0.77% 4.22% 0.83% 29.84%
2000(2) 0.65% 4.58% 0.75% 42.74%
Investment Shares - Class A
2004 1.05% 3.47% 1.19% 17.37%
2003 1.05% 3.31% 1.16% 38.86%
2002(1) 1.05% 3.71% 1.13% 23.39%
2001 1.02% 3.96% 1.08% 29.84%
2000(3) 0.90% 4.36% 1.00% 42.74%
Investment Shares - Class B
2004 1.80% 2.71% 1.94% 17.37%
2003 1.80% 2.54% 1.91% 38.86%
2002(1) 1.80% 2.96% 1.88% 23.39%
2001 1.77% 3.18% 1.83% 29.84%
2000(4) 1.65% 3.56% 1.75% 42.74%
The effect of this change for the year ended October 31, 2002 was a
decrease in the ratio of net investment income to average net assets of
0.01%. Per share data and ratios for period prior to November 1, 2001 have
not been restated to reflect this change in accounting.
(2) Commenced operations on March 3, 2000. All ratios for the period have been
annualized.
(3) Commenced operations on March 10, 2000. All ratios for the period have
been annualized.
(4) Commenced operations on June 23, 2000. All ratios for the period have been
annualized.
Amounts designated as "--" are either $0 or have been rounded to $0.
OCTOBER 31, 2004 59
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout Each Period
- -----------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND DIVIDENDS
ASSET VALUE, NET UNREALIZED TOTAL FROM NET DISTRIBUTIONS
BEGINNING INVESTMENT GAINS FROM INVESTMENT FROM
OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS
- -----------------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUND
- -----------------------------------------------------------------------------------------------------------------------------
Institutional Shares
2004 $1.00 $0.01 $-- $0.01 $(0.01) $--
2003 1.00 0.01 -- 0.01 (0.01) $--
2002 1.00 0.01 -- 0.01 (0.01) --
2001 1.00 0.04 -- 0.04 (0.04) --
2000 1.00 0.06 -- 0.06 (0.06) --
Investment Service Shares
2004 $1.00 $0.01 $-- $0.01 $(0.01) $--
2003 1.00 0.01 -- 0.01 (0.01) --
2002 1.00 0.01 -- 0.01 (0.01) --
2001 1.00 0.04 -- 0.04 (0.04) --
2000 1.00 0.06 -- 0.06 (0.06) --
Sweep Class Shares
2004 $1.00 $ -- $-- $ -- $ --* $--
2003 1.00 0.01 -- 0.01 (0.01) --
2002 1.00 0.02 -- 0.02 (0.02) --
2001 1.00 0.04 -- 0.04 (0.04) --
2000(1) 1.00 0.01 -- 0.01 (0.01) --
- ----------------------------------------------------------------------------------------------------------------------------
TAX-FREE MONEY MARKET FUND
- ----------------------------------------------------------------------------------------------------------------------------
Institutional Shares
2004 $1.00 $0.01 $-- $0.01 $(0.01) $--
2003 1.00 0.01 -- 0.01 (0.01) --
2002 1.00 0.01 -- 0.01 (0.01) --
2001 1.00 0.03 -- 0.03 (0.03) --
2000 1.00 0.04 -- 0.04 (0.04) --
Investment Service Shares
2004 $1.00 $ -- $-- $ -- $ --* $--
2003 1.00 0.01 -- 0.01 (0.01) --
2002 1.00 0.01 -- 0.01 (0.01) --
2001 1.00 0.03 -- 0.03 (0.03) --
2000 1.00 0.03 -- 0.03 (0.03) --
Sweep Class Shares
2004 $1.00 $ -- $-- $ -- $ --* $--
2003 1.00 -- -- -- --* --
2002 1.00 0.01 -- 0.01 (0.01) --
2001 1.00 0.03 -- 0.03 (0.03) --
2000(1) 1.00 0.01 -- 0.01 (0.01) --
* Amount represents less than $0.01.
+ Returns are for the period indicated and have not been annualized.
(1) Commenced operations on August 1, 2000. All ratios for the period have
been annualized.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
60 OCTOBER 31, 2004
- --------------------------------------------------------------------------------------------
TOTAL NET ASSET
DIVIDENDS VALUE, NET ASSETS
AND END OF TOTAL END OF
DISTRIBUTIONS PERIOD RETURN+ PERIOD (000)
- --------------------------------------------------------------------------------------------
MONEY MARKET FUND
- --------------------------------------------------------------------------------------------
Institutional Shares
2004 $(0.01) $1.00 0.80% $224,527
2003 (0.01) 1.00 0.88% 251,212
2002 (0.01) 1.00 1.56% 238,337
2001 (0.04) 1.00 4.61% 147,806
2000 (0.06) 1.00 5.96% 130,891
Investment Service Shares
2004 $(0.01) $1.00 0.55% $264,401
2003 (0.01) 1.00 0.63% 313,845
2002 (0.01) 1.00 1.31% 356,976
2001 (0.04) 1.00 4.35% 377,922
2000 (0.06) 1.00 5.69% 324,583
Sweep Class Shares
2004 $ --* $1.00 0.43% $ 66,192
2003 (0.01) 1.00 0.51% 53,500
2002 (0.02) 1.00 1.18% 50,456
2001 (0.04) 1.00 4.22% 52,530
2000(1) (0.01) 1.00 1.53% 31,979
- --------------------------------------------------------------------------------------------
TAX-FREE MONEY MARKET FUND
- --------------------------------------------------------------------------------------------
Institutional Shares
2004 $(0.01) $1.00 0.75% $ 47,820
2003 (0.01) 1.00 0.79% 84,116
2002 (0.01) 1.00 1.28% 97,792
2001 (0.03) 1.00 2.97% 35,939
2000 (0.04) 1.00 3.80% 5,622
Investment Service Shares
2004 $ --* $1.00 0.50% $ 85,325
2003 (0.01) 1.00 0.54% 87,062
2002 (0.01) 1.00 1.02% 76,854
2001 (0.03) 1.00 2.71% 113,519
2000 (0.03) 1.00 3.54% 72,535
Sweep Class Shares
2004 $ --* $1.00 0.38% $ 18,830
2003 --* 1.00 0.42% 22,737
2002 (0.01) 1.00 0.90% 8,428
2001 (0.03) 1.00 2.59% 4,069
2000(1) (0.01) 1.00 1.00% 2,058
- ----------------------------------------------------------------------------------------
RATIO OF NET
RATIO OF INVESTMENT RATIO OF EXPENSES
EXPENSES INCOME TO TO AVERAGE NET ASSETS
TO AVERAGE AVERAGE (EXCLUDING WAIVERS
NET ASSETS NET ASSETS AND REIMBURSEMENTS)
- ----------------------------------------------------------------------------------------
MONEY MARKET FUND
- ----------------------------------------------------------------------------------------
Institutional Shares
2004 0.45% 0.80% 0.72%
2003 0.45% 0.85% 0.67%
2002 0.45% 1.54% 0.68%
2001 0.45% 4.59% 0.72%
2000 0.43% 5.79% 0.69%
Investment Service Shares
2004 0.70% 0.56% 0.97%
2003 0.70% 0.62% 0.92%
2002 0.70% 1.30% 0.93%
2001 0.70% 4.17% 0.97%
2000 0.68% 5.62% 0.94%
Sweep Class Shares
2004 0.82% 0.43% 1.09%
2003 0.82% 0.49% 1.04%
2002 0.82% 1.18% 1.05%
2001 0.82% 3.96% 1.09%
2000(1) 0.80% 5.95% 1.06%
- ---------------------------------------------------------------------------------------
TAX-FREE MONEY MARKET FUND
- ---------------------------------------------------------------------------------------
Institutional Shares
2004 0.43% 0.72% 0.74%
2003 0.43% 0.80% 0.67%
2002 0.43% 1.25% 0.68%
2001 0.43% 2.55% 0.76%
2000 0.43% 3.61% 0.69%
Investment Service Shares
2004 0.68% 0.50% 0.99%
2003 0.68% 0.53% 0.92%
2002 0.68% 1.03% 0.93%
2001 0.68% 2.62% 1.01%
2000 0.68% 3.48% 0.94%
Sweep Class Shares
2004 0.80% 0.37% 1.11%
2003 0.80% 0.39% 1.04%
2002 0.80% 0.91% 1.05%
2001 0.80% 2.31% 1.13%
2000(1) 0.80% 3.81% 1.06%
OCTOBER 31, 2004 61
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
The Expedition Funds (the "Trust") were organized on August 7, 1989 and are
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end, management investment company offering the following
Funds as of October 31, 2004: the Expedition Equity Fund (the "Equity Fund"),
the Expedition Equity Income Fund (the "Equity Income Fund"),the Expedition
Investment Grade Bond Fund (the "Investment Grade Bond Fund"), the Expedition
Tax-Free Investment Grade Bond Fund (the "Tax-Free Investment Grade Bond Fund"),
the Expedition Money Market Fund (the "Money Market Fund"), and the Expedition
Tax-Free Money Market Fund (the "Tax-Free Money Market Fund") (each a "Fund",
collectively, the "Funds"). The Funds are registered to offer three classes of
shares. The Equity, Equity Income, Investment Grade Bond, and Tax-Free
Investment Grade Bond Funds offer Institutional Shares, Investment Shares -
Class A and Investment Shares - Class B, and the Money Market and Tax-Free Money
Market Funds offer Institutional Shares, Investment Service Shares and Sweep
Class Shares. The assets of each Fund are segregated and a shareholder's
interest is limited to the Funds in which shares are held. The investment
objectives, policies, and strategies of the Funds are described in their
prospectuses.
Under the Funds' organizational documents, its officers and trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Funds
enter into contracts with their vendors and others that provide for general
indemnifications. The Funds' maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Funds.
However, based on experience, the Funds consider the risk of loss from such
claims to be remote.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds which are in conformity with accounting principles
generally accepted in the United States of America.
USE OF ESTIMATES -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts of
assets, liabilities, expenses and income reported in the financial statements.
Actual results could differ from those estimated.
SECURITY VALUATION -- Securities listed on a securities exchange, market or
automated quotation system for which quotations are readily available (except
for securities traded on NASDAQ), including securities traded over the counter,
are valued at the last quoted sale price on the primary exchange or market
(foreign or domestic) on which they are traded, or, if there is no such reported
sale, at the most recent quoted bid price. For securities traded on NASDAQ, the
NASDAQ Official Closing Price will be used. If available, debt securities are
priced based upon valuations provided by independent, third-party pricing
agents. Such values generally reflect the last reported sales price if the
security is actively traded. The third-party pricing agents may also value debt
securities at an evaluated bid price by employing methodologies that utilize
actual market transactions, broker-supplied valuations, or other methodologies
designed to identify the market value for such securities. Debt obligations with
remaining maturities of sixty days or less may be valued at their amortized
cost, which approximates market value.
62 OCTOBER 31, 2004
Securities for which market prices are not "readily available" are valued in
accordance with Fair Value Procedures established by the Funds' Board of
Trustees the ("Board"). The Funds' Fair Value Procedures are implemented through
a Fair Value Committee (the "Committee") designated by the Board. Some of the
more common reasons that may necessitate that a security be valued using Fair
Value Procedures include: the security's trading has been halted or suspended;
the security has been de-listed from a national exchange; the security's primary
trading market is temporarily closed at a time when under normal conditions it
would be open; the security has not been traded for an extended period of time;
the security's primary pricing source is not able or willing to provide a price;
or trading of the security is subject to local government-imposed restrictions.
When a security is valued in accordance with the Fair Value Procedures, the
Committee will determine the value after taking into consideration relevant
information reasonably available to the Committee.
REPURCHASE AGREEMENTS -- It is the policy of the Funds to require the custodian
bank to take possession, to have legally segregated in the Federal Reserve Book
Entry System, or to have segregated within the custodian bank's vault, all
securities held as collateral under repurchase agreement transactions.
Additionally, procedures have been established by the Funds to monitor, on a
daily basis, the market value of each repurchase agreement's collateral to
ensure that the value of collateral at least equals the repurchase price to be
paid under the repurchase agreement transaction.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
Compass Asset Management, a division of Compass Bank, the Funds' investment
advisor (the "Advisor"), to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board. Risks may arise from the
potential inability of counterparties to honor the terms of the repurchase
agreement. Accordingly, the Funds could receive less than the repurchase price
on the sale of collateral securities.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date). Costs
used in determining realized gains and losses on the sale of investment
securities are those of the specific securities sold, adjusted for the accretion
and amortization of purchase discounts, and premiums during the respective
holding periods. Interest income is recorded on the accrual basis; dividend
income is recorded on the ex-dividend date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment
income for the Investment Grade Bond Fund, the Tax-Free Investment Grade Bond
Fund, the Money Market Fund and the Tax-Free Money Market Fund are declared
daily and paid monthly. The Equity Fund and the Equity Income Fund declare and
pay dividends from net investment income, if any, quarterly. Any net realized
capital gains will be distributed at least annually for all Funds.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS -- The Funds may engage in
when-issued or delayed-delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased upon settlement. Securities purchased on a when-issued or
delayed-delivery basis are marked to market daily and
OCTOBER 31, 2004 63
NOTES TO FINANCIAL STATEMENTS
begin earning interest on the settlement date. At October 31, 2004, no such
securities were held by the Funds.
INVESTING IN GOVERNMENT SPONSORED ENTERPRISES -- The Investment Grade Bond and
Money Market Funds invest in securities issued by the Federal Home Loan Mortgage
Corporation ("Freddie Mac") and similar United States Government sponsored
entities such as Federal National Mortgage Association ("Fannie Mae") and the
Federal Home Loan Banks ("FHLB's"). Freddie Mac, Fannie Mae and FHLB's, although
chartered and sponsored by Congress, are not funded by Congressional
appropriations and the debt and mortgage-backed securities issued by Freddie
Mac, Fannie Mae, FHLB's are neither guaranteed nor insured by the United States
Government.
EXPENSES -- Expenses that are directly related to one of the Funds are charged
directly to that Fund. Other operating expenses of the Funds are prorated to the
Funds on the basis of relative daily net assets.
CLASSES -- Class specific expenses are borne by that class. Income, non-class
specific expenses, and realized/unrealized gains and losses are allocated to the
respective classes on the basis of the relative daily net assets.
(3) INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION AND SERVICE AGREEMENTS
INVESTMENT ADVISORY FEE -- The Advisor, receives for its services annual
advisory fees based on the Funds' average daily net assets. The Advisor may
voluntarily choose to waive any portion of its fee. The Advisor can modify or
terminate these voluntary waivers at any time at its sole discretion.
Accordingly, the advisory fee and voluntary expense limitations for each Fund
are as follows:
- --------------------------------------------------------------------------------
VOLUNTARY
ADVISORY EXPENSE
FEES LIMITATIONS
- --------------------------------------------------------------------------------
Equity Fund, Institutional Shares 0.75% 1.25%
Equity Fund, Investment Shares - Class A 0.75% 1.50%
Equity Fund, Investment Shares - Class B 0.75% 2.25%
Equity Income Fund, Institutional Shares 0.75% 1.25%
Equity Income Fund, Investment Shares - Class A 0.75% 1.50%
Equity Income Fund, Investment Shares - Class B 0.75% 2.25%
Investment Grade Bond Fund, Institutional Shares 0.50% 0.80%
Investment Grade Bond Fund, Investment Shares - Class A 0.50% 1.05%
Investment Grade Bond Fund, Investment Shares - Class B 0.50% 1.80%
Tax-Free Investment Grade Bond Fund,
Institutional Shares 0.50% 0.80%
Tax-Free Investment Grade Bond Fund,
Investment Shares - Class A 0.50% 1.05%
Tax-Free Investment Grade Bond Fund,
Investment Shares - Class B 0.50% 1.80%
Money Market Fund, Institutional Shares 0.40% 0.45%
Money Market Fund, Investment Service Shares 0.40% 0.70%
Money Market Fund, Sweep Class Shares 0.40% 0.82%
Tax-Free Money Market Fund, Institutional Shares 0.40% 0.43%
Tax-Free Money Market Fund, Investment Service Shares 0.40% 0.68%
Tax-Free Money Market Fund, Sweep Class Shares 0.40% 0.80%
64 OCTOBER 31, 2004
INVESTMENT SUB-ADVISOR -- Weiss, Peck & Greer, L.L.C. ("WPG") serves as the
Tax-Free Money Market Fund's investment sub-advisor under a sub-advisory
agreement (the "Sub-Advisory Agreement") with the Advisor. Under the
Sub-Advisory Agreement, WPG invests the assets of the Fund on a daily basis, and
continuously administers the investment program of the Fund.
WPG is entitled to a fee which is paid by the Advisor and which is calculated
daily and paid monthly, at an annual rate of: 0.075% of the Fund's average daily
net assets up to $150 million; 0.05% of the next $350 million of the Fund's
average daily net assets, 0.04% of the next $500 million of the Funds' average
daily net assets; and 0.03% of the Fund's average daily net assets over $1
billion.
ADMINISTRATIVE FEE -- The Trust and SEI Investments Global Funds Services (the
"Administrator"), a Delaware business trust, are parties to an administration
agreement (the "Agreement") dated June 9, 1997, under which the Administrator
provides the Trust with certain legal, accounting, and shareholder services for
an annual fee equal to the higher of $75,000 or 0.20% of the Funds' average
daily net assets. The Administrator may voluntarily waive its fee, subject to
termination at any time by the Administrator, to the extent necessary to limit
the total operating expenses of a Fund. The Administrator waived 0.05% of its
fee for the Money Market and Tax Free Money Market Funds.
DISTRIBUTION AND SHAREHOLDER SERVICING FEES -- The Trust and SEI Investments
Distribution Co. (the "Distributor") are parties to a Distribution Agreement
dated June 9, 1997. The Equity, Equity Income, Investment Grade Bond, and
Tax-Free Investment Grade Bond Funds have adopted Distribution Plans for
Investment Shares - Class A and Investment Shares - Class B. Under the terms of
each Plan the Funds pay the Distributor a monthly distribution fee at an annual
rate of 0.25% of the average daily net assets of the Class A Shares and 1.00% of
the average daily net assets of Class B Shares, which may be used by the
Distributor to provide compensation for sales support and distribution
activities.
The Money Market and Tax-Free Money Market Funds have adopted and entered into a
Shareholder Service Plan and Agreement with the Distributor. Each Fund pays the
Distributor a monthly shareholder servicing fee at an annual rate of 0.25% of
the average daily net assets of each Fund's Investment Service Shares and Sweep
Class Shares, which may be used by the Distributor to provide compensation to
service providers that have agreed to provide certain shareholders support
services for their customers who own such Shares of the Funds.
ADMINISTRATIVE SERVICING FEES -- To the extent that investors buy Sweep Class
Shares through Compass Bank or any of its affiliates providing sub-accounting,
sub-transfer agency services or other administrative services, including Compass
Brokerage, Inc., those entities may receive administrative servicing fees,
payable from the Funds' assets, of up to 0.12% of each Fund's average daily net
assets attributable to Sweep Class Shares.
CUSTODIAN FEES -- Compass Bank serves as the Funds' custodian. Their fee is
based on a rate of 0.02% of each Fund's average daily net assets for the period,
plus out-of-pocket expenses.
OCTOBER 31, 2004 65
NOTES TO FINANCIAL STATEMENTS
(4) TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also officers of the Administrator and the
Distributor. Such officers are paid no fees by the Trust for serving as officers
of the Trust.
Pursuant to an exemptive order issued by the Securities and Exchange Commission,
the Funds may invest in the Money Market Fund or the Tax-Free Money Market Fund
(the "Money Market Funds"), provided that investments in the Money Market Funds
do not exceed 25% of the investing Fund's total assets.
- --------------------------------------------------------------------------------
(5) CAPITAL SHARE TRANSACTIONS (000)
For the years ended October 31,
EXPEDITION EXPEDITION
EQUITY EQUITY INCOME
FUND FUND
-------------------- --------------------
2004 2003 2004 2003
-------- -------- -------- --------
Institutional Shares:
Shares issued 926 1,756 -- 7
Shares issued in lieu of cash distributions 7 64 -- --
Shares redeemed (7,595) (8,868) (699) (536)
-------- -------- -------- --------
Increase (decrease) from
Institutional Shares transactions (6,662) (7,048) (699) (529)
-------- -------- -------- --------
Investment Shares - Class A and
Investment Service Shares, respectively:
Shares issued 107 292 5 5
Shares issued in lieu of cash distributions -- 2 -- --
Shares redeemed (382) (246) (5) (17)
-------- -------- -------- --------
Increase (decrease) from Investment Shares -
Class A and Investment Service Shares
transactions, respectively (275) 48 -- (12)
-------- -------- -------- --------
Investment Shares - Class B and
Sweep Class Shares, respectively:
Shares issued 190 252 17 14
Shares issued in lieu of cash distributions -- -- -- --
Shares redeemed (456) (354) (41) (28)
-------- -------- -------- --------
Increase (decrease) from Investment Shares -
Class B and Sweep Class Shares
transactions, respectively (266) (102) (24) (14)
-------- -------- -------- --------
TOTAL INCREASE (DECREASE)
FROM SHARE TRANSACTIONS (7,203) (7,102) (723) (555)
======== ======== ======== ========
Amounts designated as "--" are either $0 or have been rounded to $0.
66 OCTOBER 31, 2004
EXPEDITION EXPEDITION TAX-FREE
INVESTMENT GRADE INVESTMENT GRADE
BOND FUND BOND FUND
-------------------- --------------------
2004 2003 2004 2003
-------- -------- -------- --------
Institutional Shares:
Shares issued 984 2,515 403 957
Shares issued in lieu of cash distributions 251 263 89 92
Shares redeemed (1,746) (3,052) (1,328) (1,350)
-------- -------- -------- --------
Increase (decrease) from
Institutional Shares transactions (511) (274) (836) (301)
-------- -------- -------- --------
Investment Shares - Class A and
Investment Service Shares, respectively:
Shares issued 8 45 30 16
Shares issued in lieu of cash distributions 16 17 1 3
Shares redeemed (68) (49) (23) (66)
-------- -------- -------- --------
Increase (decrease) from Investment Shares -
Class A and Investment Service Shares
transactions, respectively (44) 13 8 (47)
-------- -------- -------- --------
Investment Shares - Class B and
Sweep Class Shares, respectively:
Shares issued 26 61 -- 4
Shares issued in lieu of cash distributions 6 6 1 1
Shares redeemed (68) (47) (1) (5)
-------- -------- -------- --------
Increase (decrease) from Investment Shares -
Class B and Sweep Class Shares
transactions, respectively (36) 20 -- --
-------- -------- -------- --------
TOTAL INCREASE (DECREASE)
FROM SHARE TRANSACTIONS (591) (241) (828) (348)
======== ======== ======== ========
EXPEDITION EXPEDITION
MONEY MARKET TAX-FREE MONEY
FUND MARKET FUND
------------------------ ------------------------
2004 2003 2004 2003
---------- ---------- -------- ----------
Institutional Shares:
Shares issued 1,028,696 831,364 246,684 395,054
Shares issued in lieu of cash distributions 65 90 -- --
Shares redeemed (1,055,443) (818,571) (282,981) (408,728)
---------- ---------- ---------- ----------
Increase (decrease) from
Institutional Shares transactions (26,682) 12,883 (36,297) (13,674)
---------- ---------- ---------- ----------
Investment Shares - Class A and
Investment Service Shares, respectively:
Shares issued 820,319 646,623 203,064 231,192
Shares issued in lieu of cash distributions 126 214 2 4
Shares redeemed (869,884) (689,955) (204,801) (220,987)
---------- ---------- ---------- ----------
Increase (decrease) from Investment Shares -
Class A and Investment Service Shares
transactions, respectively (49,439) (43,118) (1,735) 10,209
---------- ---------- ---------- ----------
Investment Shares - Class B and
Sweep Class Shares, respectively:
Shares issued 198,220 153,774 62,477 62,132
Shares issued in lieu of cash distributions 259 233 23 19
Shares redeemed (185,787) (150,961) (66,406) (47,843)
---------- ---------- ---------- ----------
Increase (decrease) from Investment Shares -
Class B and Sweep Class Shares
transactions, respectively 12,692 3,046 (3,906) 14,308
---------- ---------- ---------- ----------
TOTAL INCREASE (DECREASE)
FROM SHARE TRANSACTIONS (63,429) (27,189) (41,938) 10,843
========== ========== ========== ==========
OCTOBER 31, 2004 67
NOTES TO FINANCIAL STATEMENTS
(6) INVESTMENT TRANSACTIONS
Purchases, sales and maturities of investments, excluding short-term securities,
for the year ended October 31, 2004, were as follows (000):
TAX-FREE
EQUITY INVESTMENT INVESTMENT
EQUITY INCOME GRADE BOND GRADE BOND
FUND FUND FUND FUND
-------- -------- ---------- ----------
Purchases
U.S. Government ....... $ -- $ -- $18,989 $ --
Other ................. 99,314 2,918 7,972 11,164
Sales and Maturities
U.S. Government ....... -- -- 23,042 --
Other ................. 154,143 8,067 10,481 19,772
(7) FEDERAL TAX INFTORMATION
It is each Fund's policy to continue to comply with the provisions of the
Internal Revenue Code of 1986 (Subchapter M), as amended (the "Code"),
applicable to regulated investment companies and to distribute to shareholders
each year substantially all of its income. Accordingly, no provisions for
Federal tax are necessary.
Dividends from net investment income and distributions from net realized capital
gains, if any, are determined in accordance with U.S. Federal income tax
regulations. Certain book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, they are charged or
credited to paid-in-capital or accumulated net realized gain, as appropriate, in
the period that the differences arise.
Accordingly, at October 31, 2004, the following reclassifications were made to
the Funds primarily attributable to different treatment for gains and losses on
paydowns of mortgage- and asset-backed securities for tax purposes (000):
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT REALIZED
INCOME/(LOSS) GAIN/(LOSS)
-------------- ------------
Investment Grade
Bond Fund ............. $37 $(37)
These reclassifications had no effect on net assets or net asset value per
share.
68 OCTOBER 31, 2004
The tax character of dividends and distributions declared during the years ended
October 31, 2004, and October 31, 2003, were as follows (000):
TAX-FREE ORDINARY LONG-TERM RETURN OF
INCOME INCOME CAPITAL GAIN CAPITAL TOTAL
-------- -------- ------------ --------- --------
Equity Fund
2004 ................ $ -- $ 145 $ -- $-- $ 145
2003 ................ -- 785 -- -- 785
Equity Income Fund
2004 ................ -- 83 -- -- 83
2003 ................ -- 108 -- 4 112
Investment Grade
Bond Fund
2004 ................ -- 4,857 -- -- 4,857
2003 ................ -- 5,325 -- -- 5,325
Tax-Free Investment
Grade Bond Fund
2004 ................ 2,480 3 1,425 -- 3,908
2003 ................ 2,534 -- 1,424 -- 3,958
Money Market Fund
2004 ................ -- 3,841 -- -- 3,841
2003 ................ -- 4,394 -- -- 4,394
Tax-Free Money
Market Fund
2004 ................ 1,001 -- -- -- 1,001
2003 ................ 1,320 -- -- -- 1,320
As of October 31, 2004, the components of Distributable Earnings (Accumulated
Losses) were as follows (000):
TOTAL
UNDISTRIBUTED DISTRIBUTABLE
UNDISTRIBUTED UNDISTRIBUTED LONG-TERM CAPITAL OTHER EARNINGS
TAX EXEMPT ORDINARY CAPITAL LOSS UNREALIZED TEMPORARY (ACCUMULATED
INCOME INCOME GAIN CARRYFORWARDS APPRECIATION DIFFERENCES LOSSES)
------------- ------------- ------------- ------------- ------------ ----------- -------------
Equity Fund $ -- $ 19 $ -- $(82,672) $10,559 $ -- $(72,094)
Equity Income
Fund -- 6 -- (7,885) 1,324 -- (6,555)
Investment
Grade Bond
Fund -- 402 -- (950) 8,567 (402) 7,617
Tax-Free
Investment
Grade Bond
Fund 207 -- 336 -- 4,071 (183) 4,431
Money Market
Fund -- 587 -- (5) -- (587) (5)
Tax-Free Money
Market Fund 129 -- -- (15) -- (129) (15)
OCTOBER 31, 2004 69
NOTES TO FINANCIAL STATEMENTS
For Federal income tax purposes, capital loss carryforwards may be carried
forward and applied against future capital gains. At October 31, 2004, the Funds
had the following capital loss carryforwards (000):
TOTAL
CAPITAL
LOSS
CARRY-
EXPIRES EXPIRES EXPIRES EXPIRES EXPIRES EXPIRES FORWARD
2012 2011 2010 2009 2008 2007 10/31/04
------- ------- ------- ------- ------- ------- --------
Equity Fund $ -- $22,416 $33,297 $26,959 $ -- $ -- $82,672
Equity Income
Fund -- 2,567 5,318 -- -- -- 7,885
Investment Grade
Bond Fund -- -- -- -- 950 -- 950
Money Market
Fund 5 -- -- -- -- -- 5
Tax-Free Money
Market Fund 2 3 2 -- 1 7 15
During the year ended October 31, 2004, the Equity Fund, Equity In come Fund and
the Investment Grade Bond Fund utilized capital loss carryforwards of
$10,121,910, $999,059 and $441,434 to offset capital gains, respectively.
For Federal income tax purposes, the cost of securities owned at October 31,
2004, and the net realized gains or losses on securities sold for the period
were different from amounts reported for financial reporting purposes, primarily
due to wash sales which cannot be used for Federal income tax purposes in the
current year and have been deferred for use in future years. The Federal tax
cost and aggregate gross unrealized appreciation and depreciation on
investments, held by the Funds at October 31, 2004, were as follows (000):
NET
FEDERAL APPRECIATED DEPRECIATED UNREALIZED
TAX COST SECURITIES SECURITIES APPRECIATION
--------- ----------- ----------- ------------
Equity Fund ....... $123,001 $16,377 $(5,818) $10,559
Equity Income
Fund ........... 8,116 1,415 (91) 1,324
Investment Grade
Bond Fund ...... 98,068 8,567 -- 8,567
Tax-Free Investment
Grade Bond Fund 57,523 4,071 -- 4,071
70 OCTOBER 31, 2004
(8) SUBSEQUENT EVENT
At a board meeting held on December 10, 2004, the Board of Trustees of the Trust
approved an agreement and plan of reorganization (the "Reorganization
Agreement") between the Expedition Equity Fund and the Goldman Sachs Core U.S.
Equity Fund, the Expedition Equity Income Fund and the Goldman Sachs Growth and
Income Fund, the Expedition Investment Grade Bond Fund and the Goldman Sachs
Core Fixed Income Fund, the Expedition Tax-Free Investment Grade Bond Fund and
the Goldman Sachs Municipal Income Fund, the Expedition Money Market Fund and
the Goldman Sachs Financial Square Prime Obligations Fund and the Expedition
Tax-Free Money Market Fund and the Goldman Sachs Financial Square Tax-Free Money
Market Fund.
The Reorganization Agreement sets forth the terms by which the Expedition Funds
will transfer their assets and liabilities to the Goldman Sachs Funds in
exchange for their shares of the Goldman Sachs Funds, and subsequently
distribute those Goldman Sachs Funds' shares to Fund Shareholders (the
"Reorganization"). As a result of the reorganization, each shareholder will
effectively become a shareholder of the Goldman Sachs Funds.
Shareholders are required to approve the Reorganization by voting, in proxy or
in person, at a special meeting of shareholders. If approved by shareholders,
the Reorganization is expected to occur on or about February 25, 2005. Please
read your prospectus/proxy statement carefully as it provides more detailed
information about the proposed Reorganization, the Goldman Sachs Funds and the
special meeting.
OCTOBER 31, 2004 71
TRUSTEES AND OFFICERS OF THE EXPEDITION FUNDS (UNAUDITED)
Set forth below are the names, age, position with the Trust, length of term of
office, and the principal occupations for the last five years of each of the
persons currently serving as Trustees of the Trust. Trustees who are deemed not
to be "interested persons" of the Trust are referred to as "Independent Board
Members." Messrs. Nesher and Doran are Trustees who may be deemed to be
"interested" persons of the Fund as that term is defined in the 1940 Act by
virtue of their affiliation with the Trust's Distributor. The following chart
lists Trustees and Officers as of November 16, 2004. The Trust's Statement of
Additional Information ("SAI") includes additional information about the
Trustees and Officers. The SAI may be obtained without charge by calling
1-800-992-2085.
NUMBER OF
PORTFOLIOS
IN THE EXPEDITION
TERM OF TRUST
POSITION(S) OFFICE AND OVERSEEN BY
NAME, ADDRESS, HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) BOARD OTHER DIRECTORSHIPS
AGE(1) THE TRUST TIME SERVED(2) DURING PAST 5 YEARS MEMBER HELD BY BOARD MEMBER(3)
- ----------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT
BOARD MEMBERS
- -------------
JOHN T. COONEY Trustee (Since 1993) Vice Chairman of 6 Trustee of the Advisors'
77 yrs. old Ameritrust Texas N.A., Inner Circle Fund, The
1989-1992, and MTrust MDL Funds, and The
Corp., 1985-1989. Advisors' Inner Circle
Fund II.
- ----------------------------------------------------------------------------------------------------------------------------------
ROBERT A. PATTERSON Trustee (Since 1993) Pennsylvania State 6 Member and Treasurer,
87 yrs. old University, Senior Vice Board of Trustees of
President, Treasurer Grove City College.
(Emeritus); Financial Trustee of The Advisors'
and Investment Inner Circle Fund, The
Consultant, Professor of MDL Funds, and The
Transportation since Advisors' Inner Circle
1984; Vice President- Fund II.
Investments, Treasurer,
Senior Vice President
(Emeritus), 1982-1984.
Director, Pennsylvania
Research Corp.
- ----------------------------------------------------------------------------------------------------------------------------------
EUGENE B. PETERS Trustee (Since 1993) Private investor from 6 Trustee of the Advisors'
75 yrs. old 1987 to present. Vice Inner Circle Fund, The
President and Chief MDL Funds, and The
Financial officer, Advisors' Inner Circle
Western Company of North Fund II.
America (petroleum ser-
vice company),
1980-1986. President of
Gene Peters and
Associates (import
company), 1978-1980.
President and Chief
Executive Officer of
Jos. Schlitz Brewing
Company before 1978.
- ----------------------------------------------------------------------------------------------------------------------------------
JAMES M. STOREY Trustee (Since 1994) Attorney, solo 6 Trustee of the Advisors'
73 yrs. old practitioner since 1994. Inner Fund, The MDL
Partner, Dechert (law Funds, The Advisors'
firm), September 1987- Inner Circle Fund II,
December 1993. SEI Asset Allocation
Trust, SEI Daily Income
Trust, SEI Index Funds,
SEI Institutional
International Trust,
SEI Institutional
Investments Trust, SEI
Institutional Managed
Trust, SEI Liquid Asset
Trust, SEI Tax Exempt
Trust, State Street
Research Funds,
Massachusetts Health and
Education Tax-Exempt
Trust.
- ----------------------------------------------------------------------------------------------------------------------------------
1 Unless otherwise noted, the business address of each Trustee is SEI
Investments Company, 1 Freedom Valley Drive, Oaks, Pennsylvania 19456.
2 Each Trustee shall hold office during the lifetime of this Trust until the
election and qualification of his or her successor, or until he or she
sooner dies, resigns or is removed in accordance with the Trust's
Declaration of Trust.
3 Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e.,
"public companies") or other investment companies registered under the
Investment Company Act of 1940.
72-73 OCTOBER 31, 2004
TRUSTEES AND OFFICERS OF THE EXPEDITION FUNDS (UNAUDITED)
NUMBER OF
PORTFOLIOS
IN THE EXPEDITION
TERM OF TRUST
POSITION(S) OFFICE AND OVERSEEN BY
NAME, ADDRESS, HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) BOARD OTHER DIRECTORSHIPS
AGE(1) THE TRUST TIME SERVED(2) DURING PAST 5 YEARS MEMBER(3) HELD BY BOARD MEMBER(3)
- ----------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT
BOARD MEMBERS (CONTINUED)
- -------------------------
GEORGE J. SULLIVAN, JR. Trustee (Since 1999) Chief Executive Officer, 6 Trustee, State Street
62 yrs. old Newfound Consultants, Navigator Securities
Inc. since April 1997. Lending Trust, since
General Partner, Teton 1995. Trustee of The
Partners, L.P., June Advisors' Inner Circle
1991-December 1996; Fund, The MDL Funds, The
Chief Financial Officer, Advisors' Inner Circle
Nobel Partners, L.P., Fund II, SEI Asset
March 1991-December Allocation Trust, SEI
1996; Treasurer and Daily Income Trust, SEI
Clerk, Peak Asset Index Funds, SEI
Management, Inc., since Institutional
1991. International Trust, SEI
Institutional
Investments Trust, SEI
Institutional Managed
Trust, SEI Liquid Asset
Trust, SEI Tax Exempt
Trust, SEI Absolute
Return Master Fund, LP,
SEI Opportunity Master
Fund, LP, SEI Absolute
Return Fund, LP and SEI
Opportunity Fund, LP.
- ----------------------------------------------------------------------------------------------------------------------------------
INTERESTED
BOARD MEMBERS
- -------------
ROBERT A. NESHER Chairman (Since 1991) Currently performs 6 Trustee of The Advisors'
58 yrs. old of the Board various services on Inner Circle Fund,
of Trustees behalf of SEI Bishop Street Funds, The
Investments for which Advisors' Inner Circle
Mr. Nesher is Fund II, The MDL Funds,
compensated. Executive SEI Asset Allocation
Vice President of SEI Trust, SEI Daily Income
Investments, 1986-1994. Trust, SEI Index Funds,
Director and Executive SEI Institutional
Vice president of the International Trust, SEI
Administrator and the Institutional
Distributor, 1981-1994. Investments Trust, SEI
Institutional Managed
Trust, SEI Liquid Asset
Trust, SEI Tax Exempt
Trust, SEI Opportunity
Master Fund, L.P., SEI
Opportunity Fund, L.P.,
SEI Absolute Return
Master Fund, L.P., SEI
Absolute Return Fund,
L.P., SEI Global Master
Fund, PLC, SEI Global
Assets Fund, PLC, SEI
Global Investments Fund,
PLC and SEI Investments
Global, Limited.
- ----------------------------------------------------------------------------------------------------------------------------------
1 Unless otherwise noted, the business address of each Trustee is SEI
Investments Company, 1 Freedom Valley Drive, Oaks, Pennsylvania 19456.
2 Each Trustee shall hold office during the lifetime of this Trust until the
election and qualification of his or her successor, or until he or she
sooner dies, resigns or is removed in accordance with the Trust's
Declaration of Trust.
3 Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e.,
"public companies") or other investment companies registered under the
Investment Company Act of 1940.
74-75 OCTOBER 31, 2004
TRUSTEES AND OFFICERS OF THE EXPEDITION FUNDS (UNAUDITED)
NUMBER OF
PORTFOLIOS
IN THE ADVISORS'
TERM OF INNER CIRCLE FUND
POSITION(S) OFFICE AND OVERSEEN BY OTHER DIRECTORSHIPS
NAME, ADDRESS, HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) BOARD HELD BY BOARD
AGE(1) THE TRUST TIME SERVED(2) DURING PAST 5 YEARS MEMBER/OFFICER MEMBER(3)/OFFICER
- ----------------------------------------------------------------------------------------------------------------------------------
INTERESTED
BOARD MEMBERS (CONTINUED)
- -------------------------
WILLIAM M. DORAN Trustee (Since 1992) Self-employed consultant 6 Director of SEI
1701 Market Street since 2003. Director of Investments Company and
Philadelphia, PA 19103 the Distributor since SEI Investments
64 yrs. old 2003. Partner, Morgan, Distribution Co.,
Lewis & Bockius LLP (law Trustee of The Advisors'
firm), counsel to the Inner Circle Fund, The
Trust, SEI Investments, MDL Funds, The Advisors'
the Administrator and Inner Circle Fund II,
the Distributor from SEI Asset Allocation
1976-2003. Director of Trust, SEI Daily Income
SEI Investments since Trust, SEI Index Funds,
1974; Secretary of SEI SEI Institutional
Investments since 1978. International Trust, SEI
Institutional
Investments Trust, SEI
Institutional Managed
Trust, SEI Liquid Asset
Trust and SEI Tax Exempt
Trust.
- ----------------------------------------------------------------------------------------------------------------------------------
OFFICERS
- --------
JAMES F. VOLK, CPA President (Since 2003) Senior Operations N/A N/A
42 yrs. old Officer, SEI
Investments, Fund
Accounting and
Administration since
1996; Assistant Chief
Accountant of the U.S.
Securities & Exchange
Commission's from
1993-1996.
- ----------------------------------------------------------------------------------------------------------------------------------
PETER GOLDEN Controller (Since 2001) Director, SEI N/A N/A
40 yrs. old and Chief Investments, Fund
Financial Accounting and
Officer Administration since
June 2001. From March
2000 to 2001, Vice
President of Funds
Administration for J.P.
Morgan Chase & Co. From
1997 to 2000, Vice
President of Pension and
Mutual Fund Accounting
for Chase Manhattan
Bank.
- ----------------------------------------------------------------------------------------------------------------------------------
WILLIAM E. ZITELLI Chief (Since 2004) Vice President and N/A N/A
36 yrs. old Compliance Assistant Secretary of
Officer SEI Investments Global
Funds Services and SEI
Investments Distribution
Co. from 2000-2004;
Vice President, Merrill
Lynch & Co. Asset
Management Group from
1998-2000; Associate at
Pepper Hamilton LLP from
1997-1998.
- ----------------------------------------------------------------------------------------------------------------------------------
1 Unless otherwise noted, the business address of each Trustee is SEI
Investments Company, 1 Freedom Valley Drive, Oaks, Pennsylvania 19456.
2 Each Trustee shall hold office during the lifetime of this Trust until the
election and qualification of his or her successor, or until he or she
sooner dies, resigns or is removed in accordance with the Trust's
Declaration of Trust.
3 Directorships of companies required to report to the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (i.e.,
"public companies") or other investment companies registered under the
Investment Company Act of 1940.
76-77 OCTOBER 31, 2004
TRUSTEES AND OFFICERS OF THE EXPEDITION FUNDS (UNAUDITED)
NUMBER OF
PORTFOLIOS
TERM OF IN THE ADVISORS'
POSITION(S) OFFICE AND INNER CIRCLE FUND
NAME, ADDRESS, HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER DIRECTORSHIPS
AGE(1) THE TRUST TIME SERVED DURING PAST 5 YEARS OFFICER HELD BY OFFICER
- ----------------------------------------------------------------------------------------------------------------------------------
OFFICERS (CONTINUED)
- --------------------
JAMES NDIAYE Vice (Since 2004) Employed by SEI N/A N/A
36 yrs. old President Investments Company
and since 2004, Vice
Secretary President, Deutsche
Asset Management from
2003-2004, Associate,
Morgan, Lewis & Bockius
LLP 2000-2003, Counsel,
Assistant Vice
President, ING Variable
Annuities Group
1999-2000. Senior
Counsel The Dreyfus
Corporation, 1997-1999.
- ----------------------------------------------------------------------------------------------------------------------------------
TIMOTHY D. BARTO Vice (Since 2000) General Counsel, Vice N/A N/A
36 yrs. old President President and Secretary
and of SEI Investments
Assistant Global Funds Services
Secretary since 1999; Associate,
Dechert (law firm) from
1997-1999; Associate,
Richter, Miller & Finn
(law firm) from
1994-1997.
- ----------------------------------------------------------------------------------------------------------------------------------
JOHN MUNERA Vice (Since 2002) Middle Office Compliance N/A N/A
41 yrs. old President Officer at SEI
and Investments since 2000;
Assistant Supervising Examiner at
Secretary Federal Reserve Bank of
Philadelphia from
1998-2000.
- ----------------------------------------------------------------------------------------------------------------------------------
PHILIP T. MASTERSON Vice (Since 2004) Employed by SEI N/A N/A
40 yrs. old President Investments Company
and since 2004; General
Assistant Counsel, Citco Mutual
Secretary Fund Services from
2003-2004; Vice
President and Assistant
Counsel from 2001-2003
and Vice President and
Assistant Counsel,
Oppenheimer Funds from
1997-2001.
- ----------------------------------------------------------------------------------------------------------------------------------
1 The business address of each officer is SEI Investments Company, 1 Freedom
Valley Drive, Oaks, Pennsylvania 19456.
OCTOBER 31, 2004 78-79
EXPEDITION FUNDS
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
All mutual funds have operating expenses. As a shareholder of a mutual fund,
your investment is affected by these ongoing costs, which include (among others)
costs for portfolio management, administrative services, and shareholder reports
like this one. It is important for you to understand the impact of these costs
on your investment returns.
Operating expenses such as these are deducted from the mutual fund's gross
income and directly reduce your final investment return. These expenses are
expressed as a percentage of the mutual fund's average net assets; this
percentage is known as the mutual fund's expense ratio.
The following examples use the expense ratio and are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.
The table on the next page illustrates your Fund's costs in two ways:
o ACTUAL FUND RETURN. This section helps you to estimate the actual expenses
after fee waivers that you paid over the period. The "Expenses Paid During
Period" column shows the actual dollar expense cost incurred by a $1,000
investment in the Fund, and the "Ending Account Value" number is derived from
deducting that expense cost from the Fund's gross investment return.
You can use this information, together with the actual amount you invested in
the Fund, to estimate the expenses you paid over that period. Simply divide your
actual starting account value by $1,000 to arrive at a ratio (for example, an
$8,600 account value divided by $1000 = 8.6), then multiply that ratio by the
number shown for your Fund under "Expenses Paid During Period."
o HYPOTHETICAL 5% RETURN. This section helps you compare your Fund's costs with
those of other mutual funds. It assumes that the fund had an annual 5% return
before expenses during the year, but that the expense ratio (Column 3) is
unchanged. This example is useful in making comparisons because the Securities
and Exchange Commission requires all mutual funds to make this 5% calculation.
You can assess your Fund's comparative cost by comparing the hypothetical result
for your fund in the "Expense Paid During Period" column with those that appear
in the same charts in the shareholder reports for other mutual funds.
NOTE: Because the return is set at 5% for comparison purposes -- NOT your Fund's
actual return -- the account values shown do not apply to your specific
investment.
80 OCTOBER 31, 2004
EXPEDITION FUNDS
DISCLOSURE OF FUND EXPENSES (UNAUDITED)
- -----------------------------------------------------------------------------------------
BEGINNING ENDING EXPENSE
ACCOUNT ACCOUNT ANNUALIZED PAID
VALUE VALUE EXPENSE DURING
4/30/04 10/31/04 RATIOS PERIOD*
- -----------------------------------------------------------------------------------------
EQUITY FUND
- -----------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Shares $1,000.00 $1,010.90 1.23% $ 6.22
Investment Shares - Class A $1,000.00 $1,009.20 1.48% $ 7.47
Investment Shares - Class B $1,000.00 $1,005.50 2.23% $11.24
HYPOTHETICAL 5% RETURN
Institutional Shares $1,000.00 $1,018.95 1.23% $ 6.24
Investment Shares - Class A $1,000.00 $1,017.70 1.48% $ 7.51
Investment Shares - Class B $1,000.00 $1,013.93 2.23% $11.29
- ----------------------------------------------------------------------------------------
EQUITY INCOME FUND
- ----------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Shares $1,000.00 $1,064.30 1.25% $ 6.49
Investment Shares - Class A $1,000.00 $1,063.00 1.50% $ 7.78
Investment Shares - Class B $1,000.00 $1,058.10 2.25% $11.64
HYPOTHETICAL 5% RETURN
Institutional Shares $1,000.00 $1,018.85 1.25% $ 6.34
Investment Shares - Class A $1,000.00 $1,017.60 1.50% $ 7.61
Investment Shares - Class B $1,000.00 $1,013.83 2.25% $11.39
- ----------------------------------------------------------------------------------------
INVESTMENT GRADE BOND FUND
- ----------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Shares $1,000.00 $1,037.30 0.80% $ 4.10
Investment Shares - Class A $1,000.00 $1,036.00 1.05% $ 5.37
Investment Shares - Class B $1,000.00 $1,033.00 1.80% $ 9.20
HYPOTHETICAL 5% RETURN
Institutional Shares $1,000.00 $1,021.11 0.80% $ 4.06
Investment Shares - Class A $1,000.00 $1,019.86 1.05% $ 5.33
Investment Shares - Class B $1,000.00 $1,016.09 1.80% $ 9.12
- ----------------------------------------------------------------------------------------
TAX-FREE INVESTMENT GRADE BOND FUND
- ----------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Shares $1,000.00 $1,042.50 0.80% $ 4.11
Investment Shares - Class A $1,000.00 $1,041.20 1.05% $ 5.39
Investment Shares - Class B $1,000.00 $1,037.30 1.80% $ 9.22
HYPOTHETICAL 5% RETURN
Institutional Shares $1,000.00 $1,021.11 0.80% $ 4.06
Investment Shares - Class A $1,000.00 $1,019.86 1.05% $ 5.33
Investment Shares - Class B $1,000.00 $1,016.09 1.80% $ 9.12
- ----------------------------------------------------------------------------------------
MONEY MARKET FUND
- ----------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Shares $1,000.00 $1,004.80 0.45% $ 2.27
Investment Service Shares $1,000.00 $1,003.60 0.70% $ 3.53
Sweep Class Shares $1,000.00 $1,003.00 0.82% $ 4.13
HYPOTHETICAL 5% RETURN
Institutional Shares $1,000.00 $1,022.87 0.45% $ 2.29
Investment Service Shares $1,000.00 $1,021.62 0.70% $ 3.56
Sweep Class Shares $1,000.00 $1,021.01 0.82% $ 4.17
- ----------------------------------------------------------------------------------------
TAX-FREE MONEY MARKET FUND
- ----------------------------------------------------------------------------------------
ACTUAL FUND RETURN
Institutional Shares $1,000.00 $1,004.30 0.43% $ 2.17
Investment Service Shares $1,000.00 $1,003.00 0.68% $ 3.42
Sweep Class Shares $1,000.00 $1,002.40 0.80% $ 4.03
HYPOTHETICAL 5% RETURN
Institutional Shares $1,000.00 $1,022.97 0.43% $ 2.19
Investment Service Shares $1,000.00 $1,021.72 0.68% $ 3.46
Sweep Class Shares $1,000.00 $1,021.11 0.80% $ 4.06
- -----------------------------------------------------------------------------------------
*Expenses are equal to the Fund's annualized expense ratio multiplied by
the average account value over the period, multiplied by 184/366 (to
reflect one-half year period).
OCTOBER 31, 2004 81
NOTICE TO SHAREHOLDERS (UNAUDITED)
For shareholders that do not have a October 31, 2004 tax year end, this notice
is for informational purposes only. For shareholders with a October 31, 2004,
please consult your tax advisor as to the pertinence of this notice. For this
fiscal year ended October 31, 2004, each Fund is designating the following items
with regard to distributions paid during the year.
Qualifying
Long Term Qualified Dividend
(15% Rate) 5-Year Ordinary Income
Capital Gain Gain Income Tax Exempt Total Qualifying (15% Tax Rate
Distribution Distributions Distributions Interest Distributions Dividends(1) For QDI)(2)
------------ ------------- ------------- ---------- ------------- ------------ -------------
Equity Fund 0.00% 0.00% 100.00% 0.00% 100.00% 100.00% 100.00%
Equity Income
Fund 0.00% 0.00% 100.00% 0.00% 100.00% 100.00% 100.00%
Investment
Grade Bond
Fund(3) 0.00% 0.00% 100.00% 0.00% 100.00% 0.00% 0.00%
Tax-Free
Investment
Grade Bond 36.27% 0.00% 0.07% 63.66% 100.00% 0.00% 0.00%
Money Market
Fund 0.00% 0.00% 100.00% 0.00% 100.00% 0.00% 0.00%
Tax-Free
Money Market
Fund 0.00% 0.00% 0.00% 100.00% 100.00% 0.00% 0.00%
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction and is reflected as a percentage of "Ordinary
Income Distributions."
(2) The percentage in this column represents the amount of "Qualifying
Dividend Income" as created by the Jobs and Growth Tax Relief
Reconciliation Act of 2003 and is reflected as a percentage of "Ordinary
Income Distributions." It is the intention of each of the aforementioned
Funds to designate the maximum amount permitted by the law.
The information reported herein may differ from the information and
distributions taxable to the shareholders for the calendar year ending
December 31, 2004. Complete information will be computed and reported in
conjunction with your 2004 Form 1099-DIV.
(3) For the Investment Grade Bond Fund, a total of 30.84% of the dividends
distributed during the fiscal year was derived from interest on U.S.
Government Securities which is generally exempt from state income tax.
82 OCTOBER 31, 2004
NOTES
NOTES
[Logo Omitted] EXPEDITION FUNDS(R)
INVESTMENT ADVISOR
Compass Asset Management,
a division of Compass Bank
15 South 20th Street
Birmingham, Alabama 35233
DISTRIBUTOR:
SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, Pennsylvania 19456
TRANSFER AGENT:
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
SERVICING AGENT:
Boston Financial Data Services, Inc.
Two Heritage Drive
Quincy, Massachusetts 02171
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM:
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281
COUNSEL:
Morgan, Lewis & Bockius LLP
1800 M Street, N.W.
Washington, D.C. 20036
EXP-AR-011-0900
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, comptroller or
principal accounting officer, and any person who performs a similar function.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant's board of trustees has determined that the registrant has
at least one audit committee financial expert serving on the audit committee.
(a)(2) The audit committee financial experts are George Sullivan and Robert
Patterson and are independent as defined in Form N-CSR Item 3(a)(2).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fees billed by Deloitte & Touche LLP Related to the Trust
Deloitte & Touche LLP billed the Trust aggregate fees for services rendered to
the Trust for the last two fiscal years as follows:
- ------------------------------------------------------------------------------------------------------------------------------
2004 2003
- ------------------------------------------------------------------------------------------------------------------------------
All fees and All fees and All other fees All fees and All fees and All other fees
services to the services to and services to services to the services to and services to
Trust that were service service Trust that were service service
pre-approved affiliates that affiliates that pre-approved affiliates that affiliates that
were did not require were did not require
pre-approved pre-approval pre-approved pre-approval
- ------------------------------------------------------------------------------------------------------------------------------
(a) Audit $85,800 N/A N/A $78,000 N/A N/A
Fees(1)
- ------------------------------------------------------------------------------------------------------------------------------
(b) Audit- $19,800 N/A N/A $18,000 N/A N/A
Related
Fees(2)
- ------------------------------------------------------------------------------------------------------------------------------
(c) Tax Fees $0 N/A N/A $ 0 N/A N/A
- ------------------------------------------------------------------------------------------------------------------------------
(d) All $0 N/A N/A $ 0 N/A N/A
Other
Fees
- ------------------------------------------------------------------------------------------------------------------------------
Notes:
(1) Audit fees include amounts related to the audit of the registrant's
annual financial statements and services normally provided by the
accountant in connection with statutory and regulatory filings.
(2) Audit-Related Fees were billed for three security verifications for
the Trust as required under section (f) of Rule 17f-2 of the
Investment Company Act of 1940.
(e)(1) Not Applicable.
(e)(2) Percentage of fees billed applicable to non-audit services pursuant
to waiver of pre-approval requirement were as follows:
---------------------------------------------------------------
2004 2003
---------------------------------------------------------------
Audit-Related Fees 0% 0%
---------------------------------------------------------------
Tax Fees 0% 0%
---------------------------------------------------------------
All Other Fees 0% 0%
---------------------------------------------------------------
(f) Not Applicable.
(g) The aggregate non-audit fees and services billed by Deloitte &
Touche LLP for the last two fiscal years were $19,800 and $18,000 for 2004 and
2003, respectively.
(h) Not Applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end investment management companies.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end investment management companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable. Effective for closed-end management investment companies for
fiscal years ending on or after December 31, 2005
ITEM 9. PURCHASERS OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The certifying officers, whose certifications are included herewith, have
evaluated the registrant's disclosure controls and procedures within 90 days of
the filing date of this report. In their opinion, based on their evaluation, the
registrant's disclosure controls and procedures are adequately designed, and are
operating effectively to ensure, that information required to be disclosed by
the registrant in the reports it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's last fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrants internal control over financial reporting.
ITEMS 12. EXHIBITS.
(a)(1) Code of Ethics attached hereto.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed
herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing
as an Exhibit.
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Expedition Funds
By (Signature and Title)* /s/James F. Volk
----------------
James F. Volk, President
Date December 28, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/James F. Volk
----------------
James F. Volk, President
Date Date December 28, 2004
By (Signature and Title)* /s/Peter J. Golden
------------------
Peter J. Golden, Controller and CFO
Date Date December 28, 2004
* Print the name and title of each signing officer under his or her signature.