As filed with the Securities and Exchange Commission on
April 24, 2002
-------------------------
Registration No. 333-
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
PRE-EFFECTIVE AMENDMENT NO.____
POST-EFFECTIVE AMENDMENT NO. ____
(Check appropriate box or boxes)
Fifth Third Funds
(Exact Name of Registrant as Specified in Charter)
1-800-282-5706
(Area Code and Telephone Number)
3435 Stelzer Road
Columbus, OH 43219
(Address of Principal Executive Offices)
---------------
ALAN G. PRIEST, ESQUIRE
Ropes & Gray
One Franklin Square
1301 K Street, N.W., Suite 800 East
Washington, D.C. 20005
(Name and address of Agent for Service)
---------------
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this filing will become effective on May 23, 2002 pursuant
to Rule 488.
Title of securities being offered: Units of beneficial interest.
An indefinite amount of the Registrant's securities has been registered under
the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company
Act of 1940. In reliance upon such Rule, no filing fee is being paid at this
time.
IMPORTANT SHAREHOLDER INFORMATION
Fifth Third Funds
Fifth Third Large Cap Growth Fund
The document you hold in your hands contains your Combined
Prospectus/Proxy Statement and proxy card. A proxy card is, in essence, a
ballot. When you vote your proxy, you tell us how to vote on your behalf on
important issues relating to your Fifth Third Large Cap Growth Fund ("Large Cap
Growth Fund"). If you simply sign the proxy without specifying a vote, your
shares will be voted in accordance with the recommendations of the Board of
Trustees of Fifth Third Funds.
We urge you to spend a few minutes with the Combined Prospectus/Proxy
Statement, fill out your proxy card, and return it to us (or vote by telephone
or the Internet). By voting your proxy, and doing so promptly, you enable Fifth
Third Funds to avoid conducting additional mailings.
Please take a few moments to exercise your right to vote. Thank you.
The Combined Prospectus/Proxy Statement constitutes the Proxy Statement
of Fifth Third Funds for the meeting of shareholders of the Large Cap Growth
Fund. It also constitutes the Prospectus of the Fifth Third Large Cap Core Fund*
("Large Cap Core Fund") which is to issue units of beneficial interest
("Shares") to be distributed to Large Cap Growth Fund shareholders in connection
with the proposed reorganization of the Large Cap Growth Fund with and into the
Large Cap Core Fund. The Trustees of Fifth Third Funds are recommending that
shareholders of the Large Cap Growth Fund approve a reorganization in which the
Large Cap Growth Fund will transfer all of its assets to the Large Cap Core Fund
in return for Institutional, Investment A, Investment B and Investment C Shares
of the Large Cap Core Fund. At the same time, the Large Cap Core Fund will
assume all of the liabilities of the Large Cap Growth Fund. After the transfer,
Shares of the Large Cap Core Fund will be distributed to the Large Cap Growth
Fund's shareholders tax-free in liquidation of the Large Cap Growth Fund. As a
result of these transactions, your Shares of the Large Cap Growth Fund will, in
effect, be exchanged at net asset value and on a tax-free basis for Shares of
the Large Cap Core Fund. This transaction will not result in recognition of any
gain or loss for federal income tax purposes. Large Cap Growth Fund shareholders
holding Institutional, Investment A, Investment B or Investment C Shares, will
receive Institutional, Investment A, Investment B or Investment C Shares,
respectively, of the Large Cap Core Fund.
* Currently named Fifth Third Large Cap Value Fund, to be renamed Fifth Third
Large Cap Core Fund effective July 22, 2002
Fifth Third Funds
Fifth Third Large Cap Growth Fund
3435 Stelzer Road
Columbus, Ohio 43219
May 30, 2002
Dear Fifth Third Large Cap Growth Fund Shareholders:
Enclosed you will find several documents being provided to you in
connection with a special meeting of the shareholders of the Fifth Third Large
Cap Growth Fund ("Large Cap Growth Fund") to be held on July 12, 2002 at 10:00
a.m. at the offices of Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati,
Ohio 45263. We hope this material will receive your immediate attention and
that, if you cannot attend the meeting in person, you will vote your proxy
promptly.
The Board of Trustees of Fifth Third Funds (the "Board" or "Trustees")
unanimously recommends that shareholders of the Large Cap Growth Fund approve a
reorganization in which the Large Cap Growth Fund will transfer all of its
assets to the Fifth Third Large Cap Core Fund* ("Large Cap Core Fund") in return
for Institutional, Investment A, Investment B and Investment C Shares of the
Large Cap Core Fund. At the same time, the Large Cap Core Fund will assume all
of the liabilities of the Large Cap Growth Fund. After the transfer, Shares of
the Large Cap Core Fund will be distributed to the Large Cap Growth Fund's
shareholders in complete liquidation of the Large Cap Growth Fund. As a result
of these transactions, your Shares of the Large Cap Growth Fund will, in effect,
be exchanged at net asset value and on a tax-free basis for Shares of the Large
Cap Core Fund. Large Cap Growth Fund shareholders holding Institutional,
Investment A, Investment B or Investment C Shares, will receive Institutional,
Investment A, Investment B or Investment C Shares, respectively, of the Large
Cap Core Fund.
Fifth Third Asset Management Inc. has advised the Fifth Third Board
that it believes that the above-described transaction offers the shareholders of
the Large Cap Growth Fund the opportunity to pursue similar investment
objectives more effectively and with resulting economies of scale and
potentially lower expense ratios over time.
The Trustees believe that the proposed combination of the Large Cap
Growth Fund with the Large Cap Core Fund is in the best interests of the Large
Cap Growth Fund and its shareholders and recommend that you vote in favor of
such proposal.
The Notice of Special Meeting of shareholders, the accompanying
Combined Prospectus/Proxy Statement, and the form of proxy are enclosed. Please
read them carefully. If you are unable to attend the meeting in person, we urge
you to sign, date, and return the proxy card (or vote by telephone or the
Internet) so that your Shares may be voted in accordance with your instructions.
Since the meeting is less than seven weeks away, we urge you to give
the enclosed material your prompt attention so as to avoid the expense of
additional mailings.
Your vote is important to us. Thank you for taking the time to consider
this important proposal.
Sincerely yours,
Jeffrey C. Cusick
President
Fifth Third Funds
* Currently named Fifth Third Large Cap Value Fund, to be renamed Fifth Third
Large Cap Core Fund effective July 22, 2002.
1
FIFTH THIRD FUNDS
Fifth Third Large Cap Growth Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the Fifth Third Large Cap Growth Fund:
NOTICE IS HEREBY GIVEN that a Special Meeting of shareholders of the Fifth
Third Large Cap Growth Fund ("Large Cap Growth Fund"), separate series of Fifth
Third Funds, will be held at Fifth Third Bank, 38 Fountain Square Plaza,
Cincinnati, Ohio 45263 on July 12, 2002 at 10:00 a.m. Eastern time, for the
following purposes:
1. To consider and act upon a Plan of Reorganization ("Reorganization
Plan") adopted by Fifth Third Funds providing for the transfer of all
of the assets of the Large Cap Growth Fund to the Fifth Third Large
Cap Core Fund* ("Large Cap Core Fund") in exchange for Institutional,
Investment A, Investment B and Investment C Shares (collectively,
"Shares") of the Large Cap Core Fund and the assumption by the Large
Cap Core Fund of all of the liabilities of the Large Cap Growth Fund,
followed by the dissolution and liquidation of the Large Cap Growth
Fund, and the distribution of Shares of the Large Cap Core Fund to the
shareholders of the Large Cap Growth Fund;
2. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
The proposed transaction is described in the attached Combined
Prospectus/Proxy Statement. A copy of the Reorganization Plan is appended as
Appendix A thereto.
Pursuant to instructions of the Board of Trustees of Fifth Third Funds, the
close of business on April 26, 2002, has been designated as the record date for
determination of shareholders entitled to notice of, and to vote at, the
Meeting.
Shareholders are requested to promptly vote by telephone or the Internet or
to execute and return promptly in the enclosed envelope the accompanying proxy
card which is being solicited by Fifth Third Funds' Board of Trustees. This is
important to ensure a quorum at the special meeting. Proxies may be revoked at
any time before they are exercised by submitting to Fifth Third Funds a written
notice of revocation or a subsequently executed proxy or by attending the
Special Meeting and voting in person.
By Order of the Trustees
Rodney L. Ruehle
Secretary
Fifth Third Funds
Columbus, Ohio
May 30, 2002
* Currently named Fifth Third Large Cap Value Fund, to be renamed Fifth Third
Large Cap Core Fund effective July 22, 2002.
2
Prospectus/Proxy Statement
May 30, 2002
Fifth Third Funds
3435 Stelzer Road
Columbus, Ohio 43219
1-800-282-5706
COMBINED PROSPECTUS/PROXY STATEMENT
This Combined Prospectus/Proxy Statement is furnished in connection
with the solicitation of proxies from the holders of units of beneficial
interest ("Shares") of Fifth Third Large Cap Growth Fund ("Large Cap Growth
Fund"), for use at a Special Meeting of shareholders to approve the
reorganization of the Large Cap Growth Fund with and into the Fifth Third Large
Cap Core Fund* ("Large Cap Core Fund"). Large Cap Growth shareholders of record
on April 26, 2002 are entitled to receive notice of and to vote at the Meeting.
The reorganization contemplates the transfer of all the assets and liabilities
of the Large Cap Growth Fund to the Large Cap Core Fund (collectively with the
Large Cap Growth Fund, the "Funds") in exchange for Shares of the Large Cap Core
Fund, followed by the dissolution and liquidation of the Large Cap Growth Fund,
and the distribution of Large Cap Core Fund Shares to shareholders of the Large
Cap Growth Fund (the "Transaction"). As a result of the Transaction, each
shareholder of the Large Cap Growth Fund will receive a number of full and
fractional Shares of the Large Cap Core Fund equal in value at the date of the
exchange to the net asset value of the Large Cap Growth Fund shares transferred
by each shareholder to the Large Cap Core Fund. The Transaction will not result
in a recognition of any gain or loss for federal income tax purposes. Large Cap
Growth Fund shareholders holding Institutional, Investment A, Investment B or
Investment C Shares, will receive Institutional, Investment A, Investment B or
Investment C Shares, respectively, of the Large Cap Core Fund.
Both the Large Cap Growth Fund and the Large Cap Core Fund are
portfolios ("series") of Fifth Third Funds, which is an open end management
investment company consisting of 32 separate funds.
This Combined Prospectus/Proxy Statement explains concisely what you
should know before investing in the Large Cap Core Fund. Please read it
carefully and keep it for future reference. The current Statement of Additional
Information of Fifth Third Funds for the Funds dated October 29, 2001 ("Fifth
Third Statement of Additional Information"), has been filed with the Securities
and Exchange Commission and is incorporated by reference into this Combined
Prospectus/Proxy Statement. The Fifth Third Statement of Additional Information
may be obtained, without charge, by writing to Fifth Third Funds, 3435 Stelzer
Road, Columbus, Ohio 43219 or by calling 1-800-282-5706. In addition, a
Statement of Additional Information dated May 30, 2002, relating to the
Transaction described in this Combined Prospectus/Proxy Statement has been filed
with the Securities and Exchange Commission and is also incorporated by
reference into this Combined Prospectus/Proxy Statement. Such Statement of
Additional Information may be obtained, without charge, by writing Fifth Third
Funds at the above-listed address or by calling 1-800-282-5706. Fifth Third
Funds will furnish, without charge, a copy of the Annual Report dated July 31,
2001 and the Semi-Annual Report dated January 31, 2002 to a shareholder upon
written request to Fifth Third Funds at the above-listed address or by calling
1-800-282-5706.
Investment Advisor -- Fifth Third Asset Management Inc., 38 Fountain
Square Plaza, Cincinnati, Ohio 45263.
Administrator - Fifth Third Bank, 38 Fountain Square Plaza, Cincinnati,
Ohio 45263.
Distributor - Fifth Third Funds Distributor, Inc, 3435 Stelzer Road,
Columbus, Ohio 43219.
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these Fund Shares or determined whether this prospectus
is truthful or complete. Anyone who tells you otherwise is committing a crime.
Like other investments, you could lose money on your investment in a Fund. Your
investment in a Fund is not a deposit or an obligation of Fifth Third Bank, its
affiliates, or any bank. It is not insured by the FDIC or any government agency.
* Currently named Fifth Third Large Cap Value Fund, to be renamed Fifth
Third Large Cap Core Fund effective July 22, 2002.
3
No person has been authorized to give any information or to make any
representations not contained in this Combined Prospectus/Proxy Statement in
connection with the offering made by this Combined Prospectus/Proxy Statement
and, if given or made, such information or representations must not be relied
upon as having been authorized by Fifth Third Funds. This Combined
Prospectus/Proxy Statement does not constitute an offering by Fifth Third Funds
in any jurisdiction in which such offering may not lawfully be made.
May 30, 2002
4
TABLE OF CONTENTS
-----------------
PROPOSAL (1) APPROVAL OF PLAN OF REORGANIZATION
FEE TABLES
SYNOPSIS OF PROSPECTUS
PRINCIPAL RISK FACTORS
INFORMATION ABOUT THE TRANSACTION
VOTING INFORMATION
INTEREST OF CERTAIN PERSON IN THE TRANSACTION
5
PROPOSAL (1)
APPROVAL OF
PLAN OF REORGANIZATION
At a meeting held on April 10, 2002, the Trustees of Fifth Third Funds
unanimously approved a Plan of Reorganization ("Reorganization Plan") pursuant
to which the Large Cap Growth Fund would be merged with and into the Large Cap
Core Fund on or about July 22, 2002 ("the Exchange Date"). On the Exchange Date,
the Large Cap Growth Fund will transfer all of its assets and liabilities to the
Large Cap Core Fund in exchange for Shares of the Large Cap Core Fund having an
aggregate net asset value equal to the aggregate value of the net assets
acquired from the Large Cap Growth Fund. The assets and liabilities of the Large
Cap Growth Fund and the Large Cap Core Fund will be valued as of the close of
trading on the New York Stock Exchange on the business day next preceding the
Exchange Date. Following the transfer, the Large Cap Growth Fund will be
dissolved and Shares of the Large Cap Core Fund received by the Large Cap Growth
Fund will be distributed to Large Cap Growth Fund shareholders in liquidation of
the Large Cap Growth Fund. As a result of the proposed Transaction, shareholders
of the Large Cap Growth Fund will receive a number of full and fractional Shares
equal in value at the date of the exchange to the value of the net assets of the
Large Cap Growth Fund transferred to the Large Cap Core Fund attributable to the
shareholder (based on the proportion of the outstanding Shares of the Large Cap
Growth Fund owned at the time by the shareholder). The Transaction will not
result in any gain or loss for federal income tax purposes. All Large Cap Growth
Fund shareholders will receive Shares of the Fifth Third class (Institutional,
Investment A, Investment B or Investment C) that corresponds to the class of
Large Cap Growth Fund Shares that they hold (Institutional, Investment A,
Investment B or Investment C, respectively).
For the reasons set forth below under "Reasons for the Proposed
Reorganization," the Trustees of Fifth Third Funds, including Trustees of Fifth
Third Funds who are not "interested persons" of Fifth Third Funds as defined in
the Investment Company Act of 1940 (the "1940 Act") (the "Independent
Trustees"), unanimously concluded that participation in the proposed Transaction
is in the best interests of the Large Cap Growth Fund, the Large Cap Core Fund
and their respective existing shareholders. In reaching this conclusion, the
Trustees considered, among other things: (1) the continuation of all services
currently provided to shareholders of the Large Cap Growth Fund; (2) the
compatibility of the objectives, policies, restrictions and investment
portfolios of the Large Cap Core Fund with those of the Large Cap Growth Fund;
(3) the projected expense ratios of the Large Cap Core Fund compared to the
Large Cap Growth Fund; (4) the investment management efficiencies that may be
gained; (5) the potential economies of scale which could be realized as a result
of the increase in size of the Large Cap Core Fund; (6) the qualifications and
experience of Fifth Third Asset Management Inc.; (7) the recommendation of Fifth
Third Asset Management Inc. in favor of the Transaction; (8) the fact that the
Transaction will not result in a recognition of any gain or loss for federal
income tax purposes; (9) the fact that any indirect Federal income tax
consequences of the Transaction to the shareholders of the Large Cap Growth Fund
will not outweigh the potential benefits of the Transaction; and (10) that the
economic interests of shareholders of the Large Cap Growth Fund and the Large
Cap Core Fund will not be diluted as a result of the proposed Transaction.
Large Cap Growth Fund shareholders who do not wish to be reorganized
into the Large Cap Core Fund and have their Fund shares exchanged for shares of
the Large Cap Core Fund should redeem their shares prior to the consummation of
the reorganization. If you redeem your shares you will recognize a taxable gain
or loss based on the difference between your tax basis in the shares and the
amount you receive for them.
6
FEE TABLE
A fee table showing the current fees as of July 31, 2001 for each Fund,
as well as the pro forma fees annualized after the reorganization and after fee
waivers and/or expense reimbursement, are below.
Fifth Third Fifth Third
Large Cap Growth Fund Large Cap Core Fund*
--------------------- -------------------
Investment Investment Investment Investment Investment Investment
Institutional A B C Institutional A B C
------------- - - - ------------- - - -
Shareholder Fees (fees paid
directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering
price) None 4.50% None None None 4.50% None None
Maximum Sales Charge on
Reinvested Dividends None None None None None None None None
Maximum Deferred Sales
Load None None 5.00%/1/ 1.00%/2/ None None 5.00%/1/ 1.00%/2/
Annual Fund Operating
Expenses
(as a percentage of
average net assets)
Management Fees 0.70%/1/ 0.70%/1/ 0.70%/1/ 0.70%/1/ 0.70%/1/ 0.70%/1/ 0.70%/1/ 0.70%/1/
Distribution/Service
(12b-1) Fees None 0.25% 1.00% 0.75% None 0.25% 1.00% 0.75%
Other Expenses/3/ 0.26%/3/ 0.26% 0.26% 0.51% 0.27%/3/ 0.27% 0.27% 0.52%
Total Annual Fund 0.96% 1.21% 1.96%/4/ 1.96%/4/ 0.97% 1.22% 1.97%/4/ 1.97%/4/
Operating Expenses
Fee Waiver and/or 0.02%/5/ 0.02%/5/ ---- ---- 0.05%/5/ 0.05%/5/ ---- ----
Expense Reimbursement
Net Expenses 0.94% 1.19% ---- ---- 0.92% 1.17% ---- ----
(Table continues)
Pro Forma
Fifth Third Large Cap Core Fund
-------------------------------
Investment Investment Investment
Institutional A B C
------------- - - -
Shareholder Fees (fees paid
directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering
price) None 4.50% None None
Maximum Sales Charge on
Reinvested Dividends None None None None
Maximum Deferred Sales
Load None None 5.00%/1/ 1.00%/2/
Annual Fund Operating
Expenses
(as a percentage of
average net assets)
Management Fees 0.70%/1/ 0.70%/1/ 0.70%/1/ 0.70%/1/
Distribution/Service
(12b-1) Fees None 0.25% 1.00% 0.75%
Other Expenses/3/ 0.26% 0.26% 0.26% 0.51%
Total Annual Fund 0.96% 1.21% 1.96%/4/ 1.96%/4/
Operating Expenses
Fee Waiver and/or 0.04%/5/ 0.04%/5/ ---- ----
Expense Reimbursement
Net Expenses 0.92% 1.17% ---- ----
/1/ 5% in the first year after purchase, declining to 4% in the second
year, 3% in the third and fourth years, 2% in the fifth year, 1% in the
sixth year and eliminated thereafter. Approximately eight years after
purchase, Investment B shares automatically convert to Investment A
shares.
7
/2/ The CDSC for Investment C Shares of 1.00% applies to shares redeemed
within the first year of purchase.
/3/ Other expenses are based on estimated amounts for the current fiscal
year.
/4/ The Funds' Advisor and Administrator have voluntarily agreed to waive
fees and/or reimburse expenses to limit total annual fund operating
expenses for the Large Cap Growth Fund to: 1.94% for Investment B
Shares and 1.94% for Investment C Shares; and for the Large Cap Core
Fund to: 1.92% for Investment B Shares and 1.92% for Investment C
Shares. These waivers and expense reimbursements may be discontinued at
any time.
/5/ The Funds' Advisor and Administrator have contractually agreed to waive
fees and/or reimburse expenses to limit total annual fund operating
expenses for the Large Cap Growth Fund to: 0.94% for Institutional
Shares and 1.19% for Investment A Shares; and for the Large Cap Core
Fund to: 0.92% for Institutional Shares and 1.17% for Investment A
Shares. These waivers and expense reimbursements will remain in effect
until 4/2/03.
* Currently named Large Cap Value Fund, to be renamed Large Cap Core Fund
effective July 22, 2002.
8
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Fifth Third Large Cap Growth Fund
Institutional Shares .............................. $96 $304
Investment A Shares ............................... $566 $815
Investment B Shares ...............................
Assuming Redemption ......................... $699 $913
Assuming No Redemption ...................... $199 $613
Investment C Shares ...............................
Assuming Redemption ......................... $299 $613
Assuming No Redemption ...................... $199 $613
Fifth Third Large Cap Core Fund
Institutional Shares .............................. $94 $303
Investment A Shares ............................... $564 $815
Investment B Shares ...............................
Assuming Redemption ......................... $700 $913
Assuming No Redemption ...................... $200 $613
Investment C Shares ...............................
Assuming Redemption ......................... $300 $613
Assuming No Redemption ...................... $200 $613
Fifth Third Large Cap Core Fund Pro Forma
Institutional Shares .............................. $94 $301
Investment A Shares ............................... $564 $813
Investment B Shares ...............................
Assuming Redemption ......................... $699 $911
Assuming No Redemption ...................... $199 $611
Investment C Shares ...............................
Assuming Redemption ......................... $299 $611
Assuming No Redemption ...................... $199 $611
9
SYNOPSIS
Summary. The following is a synopsis of certain information relating to
the Transaction and is qualified by reference to the more complete information
contained in this Combined Prospectus/Proxy Statement, the Fifth Third Statement
of Additional Information, and the Appendix attached hereto.
Key Features of Transaction. The shareholders of the Large Cap Growth
Fund are being asked to approve or disapprove the Plan of Reorganization adopted
by the Trustees dated as of , 2002 (the "Reorganization Plan"), a copy of which
is attached to this Combined Prospectus/Proxy Statement as Appendix A. The
Reorganization Plan provides, among other things, for the transfer of all of the
assets of the Large Cap Growth Fund to the Large Cap Core Fund in exchange for
the assumption by the Large Cap Core Fund of all of the liabilities of the Large
Cap Growth Fund and for a number of Shares of the designated class calculated
based on the value of the net assets of the Large Cap Growth Fund acquired by
the Large Cap Core Fund and the net asset value per Share of the Large Cap Core
Fund, all as more fully described below under "Information about the
Reorganization." After receipt of Shares, the Large Cap Growth Fund will
dissolve, distributing the Shares to its shareholders in complete liquidation,
and the Large Cap Growth Fund will be terminated. Prior to the date of such
transfer (the "Exchange Date"), the Large Cap Growth Fund will declare a
distribution to its shareholders which, together with all previous
distributions, will have the effect of distributing to its shareholders all of
its investment company taxable income (computed without regard to the deduction
for dividends paid) and net realized capital gains, if any, through the Exchange
Date.
At a meeting held on April 10, 2002, the Trustees of Fifth Third Funds,
including the independent Trustees, voted unanimously to approve the Transaction
and to recommend that shareholders of the Large Cap Growth Fund also approve the
Transaction. Approval of reorganization of the Large Cap Growth Fund requires
the affirmative vote of a majority of all votes attributable to the voting
securities of the Large Cap Growth Fund voting separately as a fund, defined as
the lesser of (a) sixty seven percent (67%) or more of the votes attributable to
all voting securities of the Large Cap Growth Fund present at such meeting, if
holders of more than 50% of the votes attributable to the outstanding voting
securities are present or represented by proxy, or (b) more than 50% of the
votes attributable to the outstanding voting securities of the Large Cap Growth
Fund.
A shareholder of the Large Cap Growth Fund objecting to the proposed
Transaction is not entitled under either Massachusetts law or Fifth Third Funds'
Declaration of Trust to demand payment for or an appraisal of his or her
particular Large Cap Growth Fund Shares if the Transaction is consummated over
his or her objection. However, Shares of the Large Cap Growth Fund are
redeemable for cash at their net asset value on days on which the New York Stock
Exchange is open for regular trading. If you redeem your Shares, you may
recognize a taxable gain or loss based on the difference between your tax basis
in the Shares and the amount you receive for them.
In the event that this proposal is not approved by the shareholders of
the Large Cap Growth Fund, such Fund will continue to be managed as a separate
fund in accordance with its current investment objectives and policies, and the
Trustees of the Fifth Third Funds may consider alternatives in the best
interests of the shareholders. However, if approval of the Reorganization Plan
is obtained, the reorganization of the Large Cap Growth Fund will be
consummated.
Principal Investment Objectives and Policies. Below is a brief
comparison of the principal investment objectives and policies of the Large Cap
Growth Fund and the Large Cap Core Fund. The following discussion is qualified
in its entirety by the disclosure on such subjects contained in this Combined
Prospectus/Proxy Statement and the Fifth Third Statement of Additional
Information. For a full and detailed description of permitted investments, see
such applicable document.
The securities currently held by each Fund will remain substantially
similar following consummation of the Transaction. Consequently, the proposed
reorganization should not result in higher than normal portfolio turnover.
Fundamental Objective.
The Large Cap Growth Fund seeks long-term capital appreciation.
The Large Cap Core Fund seeks long-term capital appreciation with
current income as a secondary objective.
Investment Policies.
10
The Large Cap Growth Fund intends to invest at least 65% of its total
assets in securities of companies that the Advisor believes have potential for
above-average growth as measured by projected earnings per share and growth in
sales.
The Large Cap Core Fund intends to invest in equity securities of
companies that the Advisor believes have potential for above-average growth
relative to their peers and/or companies selling at attractive valuations. While
some stocks may be purchased primarily for income, most stocks will be purchased
for capital appreciation.
Whereas the Large Cap Growth Fund invests in growth oriented stocks,
the Large Cap Core Fund will invest in both growth oriented stocks and value
oriented stocks. Although growth oriented stocks will not be the investment
focus of the Large Cap Core Fund, the Large Cap Growth Fund's policy of
investing in growth oriented stocks will continue to be an investment component
of the Large Cap Core Fund.
Under normal circumstances, each Fund invests at least 80% of it assets
in equity securities of U.S. companies with at least $5 billion in market
capitalization. When the Advisor believes that market conditions warrant a
temporary defensive posture, each Fund may invest up to 100% of its assets in
money market instruments. The taking of such a temporary defensive posture may
adversely impact the ability of each Fund to achieve its investment objective.
Distribution, Purchase and Redemption Procedures and Exchange Rights.
Distribution, purchase and redemption procedures and exchange rights are
identical for each Fund.
Federal Tax Considerations. Consummation of the Transaction is subject
to the condition that Fifth Third Funds receive an opinion of Ropes & Gray,
counsel to Fifth Third Funds, to the effect that, based upon certain
representations and assumptions and subject to certain qualifications, the
Transaction will not result in the recognition of gain or loss for Federal
income tax purposes for either of the Funds, or the shareholders of each Fund.
PRINCIPAL RISK FACTORS
Both the Large Cap Growth Fund and the Large Cap Core Fund invest in
growth oriented stocks, which may be sensitive to market movements. The prices
of growth stocks tend to reflect future expectations, and when those
expectations are not met, share prices generally fall.
In addition, the Large Cap Core Fund invests in value stocks. Value
stocks are those that appear to be underpriced based upon valuation measures,
such as lower price-to-earnings ratios and price-to-book ratios. Value stocks
present the risk that they may not perform as well as other types of stocks,
such as growth stocks.
Other principal risks of investing in each Fund include the risks of
investing in equity securities, such as the risk of sudden and unpredictable
drops in value or periods of lackluster performance. Significant investment in
large companies also creates various risks for each Fund. For instance, larger,
more established companies tend to operate in mature markets, which often are
very competitive. Larger companies also do not tend to respond quickly to
competitive challenges, especially to changes caused by technology or consumer
preference.
11
INFORMATION ABOUT THE TRANSACTION
Reorganization Plan; Securities. The proposed Reorganization Plan
provides that the Large Cap Core Fund will acquire all of the assets of the
Large Cap Growth Fund in exchange for the assumption by the Large Cap Core Fund
of all of the liabilities of the Large Cap Growth Fund and for Shares all as of
the Exchange Date (defined in the Reorganization Plan to be on or about July 22,
2002, or such other date as determined by the Trustees.) The following
discussion of the Reorganization Plan is qualified in its entirety by the full
text of the Reorganization Plan, which is attached as Appendix A to this
Combined Prospectus/Proxy Statement.
As a result of the Transaction, each shareholder of the Large Cap
Growth Fund will receive that number of full and fractional Shares equal in
value at the Exchange Date to the value of the portion of the net assets of the
Large Cap Growth Fund transferred to the Large Cap Core Fund attributable to the
shareholder (based on the proportion of the outstanding Shares of the Large Cap
Growth Fund owned by the shareholder as of the valuation time). The portfolio
securities of the Large Cap Growth Fund will be valued in accordance with the
generally employed valuation procedures of Fifth Third Funds. The reorganization
is being accounted for as a tax-free business combination. At a meeting held on
April 10, 2002, all of the Trustees, including the Independent Trustees,
unanimously determined that the reorganization would be in the best interests of
the Large Cap Growth Fund and existing shareholders and that the economic
interests of their existing shareholders would not be diluted as a result of
effecting the reorganization.
Immediately following the Exchange Date, the Large Cap Growth Fund will
distribute pro rata to its shareholders of record as of the close of business on
the Exchange Date the full and fractional Shares received by it, and the Large
Cap Growth Fund will be liquidated and dissolved. Such liquidation and
distribution will be accomplished by the establishment of accounts on the Share
records of the Large Cap Core Fund in the name of such Large Cap Growth Fund's
shareholders, each account representing the respective number of full and
fractional Shares due such shareholder. All Large Cap Growth shareholders will
receive Shares of the Fifth Third class (Institutional, Investment A, Investment
B or Investment C) that corresponds to the Class of the Large Cap Growth Fund
that they hold (Institutional, Investment A, Investment B or Investment C,
respectively).
The consummation of the reorganization is subject to the conditions set
forth in the Reorganization Plan. The Reorganization Plan may be terminated and
the reorganization abandoned at any time, before or after approval by the
shareholders, prior to the Exchange Date by consent of Fifth Third Funds or, if
any condition set forth in the Reorganization Plan has not been fulfilled and
has not been waived by the party entitled to its benefits, by such party. If the
reorganization is approved, Large Cap Growth Fund shareholders who do not wish
to have their Fund Shares exchanged for Shares of the Large Cap Core Fund should
redeem their shares prior to consummation of the reorganization. If you redeem
your Shares you may recognize a taxable gain or loss based on the difference
between your tax basis in the shares and the amount you received for them.
All fees and expenses, including accounting expenses, portfolio
transfer taxes (if any) or other similar expenses incurred directly in
connection with the consummation of the Transaction contemplated by the
Reorganization Plan will be borne by Fifth Third Bank, including the costs of
the proxy materials, proxy solicitations and legal expenses. Fees and expenses
not incurred directly in connection with the consummation of the
Transaction will be paid by the party directly incurring such expenses.
The Board of Trustees of Fifth Third Funds have determined that the
interests of the existing shareholders of the Large Cap Growth Fund and the
Large Cap Core Fund will not be diluted as a result of the Transaction. Full and
fractional Shares will be issued to the Large Cap Growth Fund's shareholders in
accordance with the procedure under the Reorganization Plan as described above.
Each Large Cap Core Fund Share will be fully paid and nonassessable when issued,
will be transferable without restriction, and will have no preemptive or
conversion rights.
Fifth Third Funds' Declaration of Trust permits Fifth Third Funds to
divide its Shares of any series, without shareholder approval, into one or more
classes of Shares having such variations as to dividend, redemption, and voting
rights, net asset values, expenses borne by the classes, and other matters as
the Trustees have authorized, provided that each Share of a class shall
represent an equal proportionate interest in the assets and liabilities of the
class with each other Share of the same class, none having priority or
preference over another. Shares of certain of the Fifth Third Funds are
currently divided into five
12
classes: Investment A/Service, Investment B, Investment C, Advisor and
Institutional Shares. Institutional, Investment A, Investment B and Investment C
Shares will be distributed as applicable by Fifth Third Funds in connection with
the Transaction. Upon consummation of the Transaction, Large Cap Growth Fund
shareholders holding Institutional, Investment A, Investment B or Investment C
Shares, will receive Institutional, Investment A, Investment B or Investment C
Shares, respectively, of the Large Cap Core Fund.
Under Massachusetts law, Fifth Third Funds' shareholders, could, under
certain circumstances, be held personally liable for the obligations of Fifth
Third Funds. However, the Declaration of Trust disclaims shareholder liability
for acts or obligations of Fifth Third Funds. The Declaration of Trust provides
for indemnification out of Fifth Third Funds property for all loss and expense
of any shareholder held personally liable for the obligations of Fifth Third
Funds. Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which Fifth Third Funds
would be unable to meet its obligations. The likelihood of such circumstances is
remote.
Reasons For The Proposed Reorganization. A meeting was held on April
10, 2002, for the Fifth Third Funds' Trustees, at which meeting all of the
Trustees, including the Independent Trustees, unanimously determined that the
reorganization would be in the best interests of Fifth Third Funds and existing
shareholders of both the Large Cap Growth Fund and the Large Cap Core Fund. The
Trustees also unanimously determined that the economic interests of such
shareholders would not be diluted as a result of effecting the reorganization.
At this same meeting, all of the Trustees, including the Independent Trustees,
unanimously adopted the Reorganization Plan and recommended approval of the
reorganization.
In electing to approve the reorganization and recommend it to
shareholders of the Large Cap Growth Fund, the Trustees acted upon information
provided to them, indicating that the proposed Transaction would operate in the
best interests of the Large Cap Growth Fund and Large Cap Core Fund
shareholders. In particular, the Trustees considered the following details:
o Continuity and Efficiency of Management: Both the Large Cap
Growth Fund and the Large Cap Core Fund are co-managed by
Allan J. Meyers and Daniel Skubiz. Mr. Meyers has been the
portfolio manager for the Large Cap Core Fund since November
1997 and for the Large Cap Growth Fund since October 1999. Mr.
Skubiz has been the portfolio manager of the Funds since April
2000.
In light of the similarity of the Large Cap Growth Fund and
the Large Cap Core Fund, the Fifth Third Asset Management,
Inc. has advised the Trustees that combining the Funds would
be in the best interest of the shareholders of both Funds. As
a result of the proposed Transaction, Mr. Meyers and Mr.
Skubiz would manage one portfolio instead of two similar
portfolios, thereby increasing the likelihood of enhanced
investment management efficiencies.
o Tax-Free Nature of Transaction; Potentially Negative Indirect
Federal Income Tax Consequences; Lack of Dilution: The Fifth
Third Funds' Trustees were informed that the proposed
Transaction involving the Large Cap Growth Fund and the Large
Cap Core Fund would occur only if it could be accomplished
without resulting in the imposition of federal income taxes on
the Large Cap Growth Fund or its shareholders or the Large Cap
Core Fund or its shareholders as a direct result of the
Transaction. In addition, the Fifth Third Funds' Trustees
considered the indirect, potentially negative, federal income
tax consequences of the Transaction on the former shareholders
of the Large Cap Growth Fund. Also, the Fifth Third Funds'
Trustees were informed that the interests of the Large Cap
Growth Fund and the Large Cap Core Fund shareholders would not
be materially diluted as a result of the proposed Transaction,
and that the Large Cap Growth Fund shareholders would receive,
in the aggregate, Shares of the Large Cap Core Fund equal in
value to the market value of the assets of the Large Cap
Growth Fund.
The Board determined that the potential benefits to be gained
from the proposed Transaction outweigh the potentially
negative indirect federal income tax consequences of the
Transaction on the former shareholders of the Large Cap Growth
Fund.
o Total Return: The historical total return of the Large Cap
Core Fund compares favorably with that of the Large Cap Growth
Fund. (Please note: The Large Cap Core Fund currently is named
Fifth Third Large Cap
13
Value Fund. Thus, the historical total return reflects the
performance of the Fifth Third Large Cap Value Fund which
invests in value oriented stocks primarily and does not
include a significant growth oriented stock component.) For
information regarding the total return of each of the Funds,
see "Financial Highlights" herein. Of course, past performance
does not predict future results.
o Assets: As of March 31, 2002, the Large Cap Core Fund had
total assets of approximately $490,721,171 compared with
approximately $212,997,921 in total assets for the Large Cap
Growth Fund. The merger is expected to result in greater
investment leverage and market presence for the Large Cap Core
Fund. In addition, former Large Cap Growth Fund shareholders
would benefit from the resulting economies of scale
attributable to the larger asset size of the Large Cap Core
Fund.
o Performance of Fifth Third Funds; Fees and Expenses: The Board
received information relating to the historical performance of
the Large Cap Core Fund and the Large Cap Growth Fund. The
Board determined that the long-term performance of the Large
Cap Core Fund has been superior to that of the Large Cap
Growth Fund. The Trustees also received information about the
fees and expenses charged or to be charged to Fifth Third
shareholders.
Fifth Third Funds' Advisor and Administrator have
contractually agreed to waive fees and/or reimburse expenses
to limit total annual fund operating expenses for the Large
Cap Core Fund to 0.92% for Institutional Shares and 1.17% for
Investment A Shares. These waivers and expense reimbursements
will remain in effect until April 2, 2003. Such expenses are
lower than those of the Large Cap Growth Fund, which are 0.94%
for Institutional Shares and 1.19% for Investment A Shares.
Thereafter, total fund operating expenses (as a percentage of
total assets) for the Large Cap Core Fund may be higher.
Fifth Third Funds' Advisor and Administrator have voluntarily
agreed to waive fees and/or reimburse expenses to limit total
annual fund operating expenses for the Large Cap Core Fund to
1.92% for Investment B Shares and 1.92% for Investment C
Shares. These waivers and expense reimbursements may be
discontinued at any time. Such expenses are lower than
those of the Large Cap Growth Fund, which are currently, with
waivers, 1.94% for Investment B Shares and 1.94 % for
Investment C Shares (see ________ for additional details).
The Board determined that in light of the above-mentioned
potential benefits to be gained from the proposed Transaction,
such benefits outweigh the possible increase in total expenses
(subsequent to April 2, 2003 with respect to Institutional and
Investment A Shares, and at any time with respect to
Investment B and C Shares) of the Large Cap Core Fund.
Federal Income Tax Consequences. As a condition to Fifth Third Funds'
obligations to consummate the reorganization, Fifth Third Funds will receive an
opinion from Ropes & Gray, counsel to Fifth Third Funds, to the effect that, on
the basis of the existing provisions of the Code, current administrative rules,
court decisions, and certain representations by Fifth Third Funds, for federal
income tax purposes: (i) the Transaction will constitute a reorganization within
the meaning of Section 368(a) of the Code, and each Fund will be a "party to a
reorganization" within the meaning of Section 368(b) of the Code; (ii) under
Section 1032 of the Code no gain or loss will be recognized by the Large Cap
Core Fund upon the receipt of the assets of the Large Cap Growth Fund in
exchange for Large Cap Core Fund Shares and the assumption by the Large Cap Core
Fund of the liabilities of the Large Cap Growth Fund; (iii) under Section 362(b)
of the Code the basis in the hands of the Large Cap Core Fund of the assets of
the Large Cap Growth Fund transferred to the Large Cap Core Fund in the
transaction will be the same as the basis of such assets in the hands of the
Large Cap Growth Fund immediately prior to the transfer; (iv) under Section
1223(2) of the Code the holding periods of the assets of the Large Cap Growth
Fund in the hands of the Large Cap Core Fund will include the periods during
which such assets were held by the Large Cap Growth Fund; (v) under Section 361
of the Code no gain or loss will be recognized by the Large Cap Growth Fund upon
the transfer of the Large Cap Growth Fund's assets to the Large Cap Core Fund in
exchange for Large Cap Core Fund Shares and the assumption by the Large Cap Core
Fund of the liabilities of the Large Cap Growth Fund, or upon the distribution
of Large Cap Core Fund Shares by the Large Cap Growth Fund to its shareholders
in liquidation; (vi) under Section 354 of the Code no gain or loss will be
recognized by the Large Cap Growth Fund's shareholders upon the exchange of
their Large Cap Growth Fund Shares for Large Cap Core Fund Shares; (vii) under
Section 358 of the Code the aggregate basis of Large Cap Core Fund Shares each
Large Cap Growth Fund shareholder receives in connection with the transaction
will be the same as the aggregate basis of his or her Large Cap
14
Growth Fund Shares exchanged therefor; (viii) under Section 1223(1) of the Code
each Large Cap Growth Fund shareholder's holding period for his or her Large Cap
Core Fund Shares will be determined by including the period for which he or she
held the Large Cap Growth Fund Shares exchanged therefor, provided that he or
she held such Large Cap Growth Fund Shares as capital assets; and (ix) the Large
Cap Core Fund will succeed to and take into account the items of the Large Cap
Growth Fund described in Section 381(c) of the Code. The Large Cap Core Fund
will take these items into account subject to the conditions and limitations
specified in Sections 381, 382, 383 and 384 of the Code and the Regulations
thereunder.
The Large Cap Core Fund's ability to carry forward the realized and
unrealized capital losses of the Large Cap Growth Fund (equal to approximately
$63 million, as of March 31, 2002) and use them to offset future gains of the
Large Cap Core Fund may be limited. A portion of such capital losses may become
permanently unavailable for use by the Large Cap Core Fund. In addition, the
Large Cap Core Fund's pre-merger "built-in" gains (equal to approximately $156
million as of March 31, 2002) cannot be offset by such capital losses during the
five years following the Transaction. Thus, the Large Cap Core Fund's ability to
take full advantage of such capital losses may depend on the extent to which it
recognizes gains arising after the Transaction. In any event, the capital losses
of the Large Cap Growth Fund that remain available to the Large Cap Core Fund
will offset capital gains accruing after the Transaction and thus reduce
distributions to a broader group of shareholders than would have been the case
absent such Transaction. Therefore, in certain circumstances, former
shareholders of the Large Cap Growth Fund may pay more taxes, or pay taxes
sooner, than they would if the Transaction did not occur.
Voting Rights. Each shareholder of the Large Cap Growth Fund is
entitled to one vote per Share and a proportionate fractional vote for any
fractional Share. The former shareholders of the Large Cap Growth Fund, as
holders of Institutional, Investment A, Investment B or Investment C Shares of
the Large Cap Core Fund, will vote separately as a fund or a class on matters
relating solely to that fund or class. On all other matters, they will vote in
the aggregate with shareholders of the Large Cap Core Fund. As shareholders of
the considerably larger Large Cap Core Fund following the Transaction, the
former shareholders of the Large Cap Growth Fund will possess less proportional
voting power when they vote separately as Large Cap Core Fund shareholders, or
shareholders of the classes thereof, than they had when they voted separately as
shareholders of the smaller Large Cap Growth Fund.
15
Capitalization. The following tables (UNAUDITED) set forth as of March
31, 2002 (i) the capitalization of the Large Cap Growth Fund, (ii) the
capitalization of the Large Cap Core Fund, and (iii) the pro forma
capitalization of the Large Cap Core Fund as adjusted giving effect to the
proposed acquisition of assets at net asset value:
- --------------------------------------------------------------------------
Fifth Third
Large Cap Growth Fund
- --------------------------------------------------------------------------
Investment Investment Investment
Institutional A B C
- --------------------------------------------------------------------------
Net Assets ($) $211,930,388.34 $942,596.42 $104,790.86 $20,145.11
- --------------------------------------------------------------------------
Shares 25,351,541.5122 112,987.7360 12,571.9160 2,417.6460
- --------------------------------------------------------------------------
Net Asset
Value per
Share ($) $8.36 $8.34 $8.34 $8.33
- --------------------------------------------------------------------------
(Table continues)
- ------------------------------------------------------------------------------
Fifth Third
Large Cap Core Fund
- ------------------------------------------------------------------------------
Investment Investment Investment
Institutional A B C
- ------------------------------------------------------------------------------
Net Assets ($) $459,840,879.41 $30,699,436.90 $179,808.70 $1,046.27
- ------------------------------------------------------------------------------
Shares 32,683,535.4276 2,206,797.2760 12,821.3430 74.5560
- ------------------------------------------------------------------------------
Net Asset
Value per
Share ($) $14.07 $13.91 $14.02 $14.03
- ------------------------------------------------------------------------------
(Table continues)
- ---------------------------------------------------------------------------
Fifth Third
Large Cap Core Fund Pro Forma Combined
- ---------------------------------------------------------------------------
Investment Investment Investment
Institutional A B C
- ---------------------------------------------------------------------------
Net Assets ($) $671,771,267.75 $31,642,033.32 $284,599.56 $21,191.38
- ---------------------------------------------------------------------------
Shares 47,744,937.2956 2,274,768.7505 20,299.5407 1,510.4334
- ---------------------------------------------------------------------------
Net Asset
Value per
Share ($) $14.07 $13.91 $14.02 $14.03
- ---------------------------------------------------------------------------
16
INFORMATION ABOUT THE LARGE CAP CORE FUND AND THE LARGE CAP GROWTH FUND
Large Cap Core Fund
Fundamental Objective Long-term capital appreciation with current
income as a secondary objective.
Principal Investment Strategies Under normal circumstances, the Fund invests
at least 80% of its assets in equity
securities of U.S. companies with at least
$5 billion in market capitalization. The
Fund intends to invest in equity securities
of companies that the Advisor believes have
potential for above-average growth relative
to their peers and/or companies selling at
attractive valuations. While some stocks may
be purchased for their income potential,
most stocks will be purchased for their
capital appreciation potential.
When selecting equity securities which it
believes are selling at attractive
valuations, the Advisor considers an
issuer's balance sheet, quality of
management, and historical earnings per
share. The Advisor typically looks for
issuers where earnings have already begun to
rebound and considers the likelihood that
earnings per share will continue to improve.
When selecting equity securities which it
believes have the potential for above
average growth, the Advisor considers an
issuer's balance sheet stability, cash flow,
quality of management, earnings per share
growth, and the issuer's potential to
maintain above average earnings relative to
its peers.
When the Advisor believes that market
conditions warrant a temporary defensive
posture, the Fund may invest up to 100% of
its assets in money market instruments. The
taking of such a temporary defensive posture
may adversely affect the ability of the Fund
to achieve its investment objective.
Principal Investment Risks The principal risks of investing in the Fund
include the risks of investing in equity
securities, such as the risk of sudden and
unpredictable drops in value or periods of
lackluster performance.
An investment in the Fund is not Significant investment in large companies
a deposit of Fifth Third Bank or also creates various risks for the Fund. For
any other bank and is not instance, larger, more established companies
insured or guaranteed by the tend to operate in mature markets, which
FDIC or any other government often are very competitive. Larger companies
agency. also do not tend to respond quickly to
competitive challenges, especially to
changes caused by technology or consumer
preference.
The Fund invests in both value stocks and
growth stocks. Value stocks are those that
appear to be underpriced based upon
valuation measures, such as lower
price-to-earnings ratios and price-to-book
ratios. Value stocks present the risk that
they may not perform as well as other types
of stocks, such as growth stocks. Growth
stocks are those that have a history of
above-average growth or that are expected to
enter periods of above average growth.
Growth stocks can be sensitive to market
movements. The prices of growth stocks tend
to reflect future expectations, and when
those expectations are not met, share prices
generally fall.
17
LARGE CAP CORE FUND, Continued
Volatility and Performance Information+
The bar chart and table give some indication of Year-by-Year Total Returns as of
12/31 the risks of an investment in the Fund by For Investment A Shares1 showing
its performance for the year, as well [GRAPHIC REMOVED HERE] as compared to a
broad-based securities index.
The Standard and Poor's 500 Composite Stock Price Index(R) (the "S&P 500") is an
unmanaged index of 500 selected common stocks, most of which are listed on the
New York Stock Exchange.
The returns assume that Fund distributions have been reinvested. The returns for
Investment B and C Shares and Institutional Shares will differ from the returns
for Investment A Shares (which are shown in the bar chart) because of
differences in expenses of each class. The table assumes that shareholders
redeem their fund Shares at the end of the period indicated. The after tax
returns included in the table are only for Investment A Shares. After tax
returns for Investment B and C Shares and Institutional Shares will vary.
Past performance does not indicate how the Fund will perform in the future.
[BAR CHART APPEARS HERE]
1993 11.81%
1994 0.48%
1995 34.60%
1996 19.14%
1997 23.83%
1998 27.68%
1999 18.53%
2000 -11.47%
2001 -13.07%
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
Best quarter: Q4 1998 21.08%
Worst quarter: Q3 2001 -14.21%
Year to Date Return (1/1/02 to 3/31/02) 0.15%
Average Annual Total Returns (for the periods ended December 31, 2001)
- --------------------------------------------------------------------------------------------------------------
Inception Past Year Past 5 Years Since Inception
Date
- --------------------------------------------------------------------------------------------------------------
Investment A Shares/2/ 12/1/92
(with 4.50% sales charge)
- --------------------------------------------------------------------------------------------------------------
Return Before Taxes -17.00% 6.63% 10.57%
- --------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions/3/ -17.75% 4.85% 8.35%
- --------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale -9.74% 5.17% 8.08%
of Fund Shares/3/
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Investment B Shares/4/ 11/2/92
(with applicable Contingent Deferred Sales
Charge)
- --------------------------------------------------------------------------------------------------------------
Return Before Taxes -17.95% 6.49% 10.52%
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Investment C Shares/4/ 11/2/92
(with applicable Contingent Deferred Sales
Charge)
- --------------------------------------------------------------------------------------------------------------
Return Before Taxes -13.69% 6.81% 10.53%
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Institutional Shares/5/
- --------------------------------------------------------------------------------------------------------------
11/2/92
- --------------------------------------------------------------------------------------------------------------
Return Before Taxes -12.82% 7.88% 11.64%
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
(Since 11/1/92)
S&P 500 Index(R)* -11.88% 10.70% 13.84%
- --------------------------------------------------------------------------------------------------------------
18
/1/ For the period prior to October 29, 2001, the quoted performance of the Fund
reflects the performance of the Investment Shares of the Kent Growth and Income
Fund. On October 29, 2001, that Fund, a registered open-end investment company
managed by Fifth Third Asset Management Inc., was merged into Fifth Third Large
Cap Value Fund.
/2/ For the period prior to October 29, 2001, the quoted performance of
Investment A Shares the Fund reflects the performance of the Investment Shares
of the Kent Growth and Income Fund, adjusted to reflect the sales charges for
Investment A Shares.
/3/ After tax returns are calculated using a standard set of assumptions. The
stated returns assume the highest historical federal income and capital gains
tax rules. Returns after taxes on distributions assumes a continued investment
in the Fund and shows the effect of taxes on fund distributions. Returns after
taxes on distributions and sales of Fund shares assumes all shares were redeemed
at the end of each measurement period, and shows the effect of any taxable gain
(or offsetting loss) on redemption, as well as the effects of taxes on Fund
distributions. These after tax returns do not reflect the effect of any
applicable state and local taxes. After tax returns are not relevant to
investors holding shares through tax-deferred programs, such as IRA or 401(k)
plans.
/4/ For the period prior to October 29, 2001, the quoted performance of
Investment B and Investment C Shares of the Fund reflects the performance of the
Institutional Shares of the Kent Growth and Income Fund, adjusted to reflect the
expenses and sales charges for Investment B and Investment C Shares.
/5/ For the period prior to October 29, 2001, the quoted performance of
Institutional Shares the Fund reflects the performance of the Institutional
Shares of the Kent Growth and Income Fund. On October 29, 2001, that Fund, a
registered open-end investment company managed by Fifth Third Asset Management
Inc., was merged into Fifth Third Large Cap Value Fund.
* The Standard and Poor's 500 Composite Stock Price Index (the "S&P 500") is an
unmanaged index of 500 selected common stocks, most of which are listed on the
New York Stock Exchange, and is a measure of the U.S. Stock market as a whole.
+ The Large Cap Core Fund currently is named Fifth Third Large Cap Value Fund.
Thus, the historical total return reflects the performance of the Fifth Third
Large Cap Value Fund which invests in value oriented stocks primarily and does
not include a significant growth oriented stock component.
19
LARGE CAP GROWTH FUND
Investment Objectives/Goals Long-term capital appreciation
Principal Investment Under normal market conditions, the Fund
invests at least 80% of its Strategies
assets in equity securities of U.S.
companies with at least $5 billion in market
capitalization. The Fund intends to invest
at least 65% of its total assets in
securities of companies that the Advisor
believes have potential for above-average
growth as measured by projected earnings per
share and growth in sales.
When the Advisor believes that market
conditions warrant a temporary defensive
posture, the Fund may invest up to 100% of
its assets in money market instruments. The
taking of such a temporary defensive posture
may adversely impact the ability of the Fund
to achieve its investment objective.
Principal Investment Risks The principal risks of investing in the Fund
include the risks of investing in equity
securities, such as the risk of sudden and
unpredictable drops in value or periods of
lackluster performance.
An investment in the Fund is The Fund invests in growth oriented stocks,
not a deposit of Fifth Third which may be sensitive to market movements.
Bank or any other bank and is The prices of growth stocks tend to reflect
not insured or guaranteed by future expectations, and when those
the FDIC or any other expectations are not met, share prices
government agency. generally fall.
Significant investment in large companies
also creates various risks for the Fund. For
instance, larger, more established companies
tend to operate in mature markets, which
often are very competitive. Larger companies
also do not tend to respond quickly to
competitive challenges, especially to
challenges caused by technology or consumer
preferences.
20
LARGE CAP GROWTH FUND, Continued
Volatility and Performance Information
The bar chart and table give some indication of Year-by-Year Total Returns as of
12/31 the risks of an investment in the Fund by For Investment A Shares1 showing
its performance for the year, as well [GRAPHIC REMOVED HERE] as compared to a
broad-based securities index.
The Standard and Poor's 500 Composite Stock Price Index(R) (the "S&P 500") is an
unmanaged index of 500 selected common stocks, most of which are listed on the
New York Stock Exchange.
The returns assume that Fund distributions have been reinvested. The returns for
Investment B and C Shares and Institutional Shares will differ from the returns
for Investment A Shares (which are shown in the bar chart) because of
differences in expenses of each class. The table assumes that shareholders
redeem their fund Shares at the end of the period indicated. The after tax
returns included in the table are only for Investment A Shares. After tax
returns for Investment B and C Shares and Institutional Shares will vary.
Past performance does not indicate how the Fund will perform in the future.
[BAR CHART APPEARS HERE]
2000 -15.53%
2001 -15.33%
The bar chart above does not reflect the impact of any applicable sales charges
or account fees, which would reduce returns.
Best quarter: Q4 2001 10.21%
Worst quarter: Q3 2001 -14.54%
Year to Date Return (1/1/02 to 3/31/02) -1.21%
Average Annual Total Returns (for the periods ended December 31, 2001)
- -----------------------------------------------------------------------------------------------------------------
Inception Past Year Past 5 Years Since Inception
Date
- -----------------------------------------------------------------------------------------------------------------
Investment A Shares/2/ 10/19/99
(with 4.50% sales charge)
- -----------------------------------------------------------------------------------------------------------------
Return Before Taxes -19.13% N/A -9.02%
- -----------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions/3/ -19.20% N/A -9.11%
- -----------------------------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale -11.65% N/A -7.16%
of Fund Shares/3/
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Investment B Shares/4/ 10/19/99
(with applicable Contingent Deferred Sales
Charge)
- -----------------------------------------------------------------------------------------------------------------
Return Before Taxes -20.20% N/A -9.29%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Investment C Shares/4/ 10/19/99
(with applicable Contingent Deferred Sales
Charge)
- -----------------------------------------------------------------------------------------------------------------
Return Before Taxes -16.11% N/A -8.08%
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Institutional Shares/5/ 10/19/99
- -----------------------------------------------------------------------------------------------------------------
Return Before Taxes -15.14% N/A -6.86%
- -----------------------------------------------------------------------------------------------------------------
(Since 11/1/99)
S&P 500 Index(R)* -11.88% N/A -6.45%
- -----------------------------------------------------------------------------------------------------------------
21
/1/ For the period prior to October 29, 2001, the quoted performance of the Fund
reflects the performance of the Investment Shares of the Kent Large Company
Growth Fund. On October 29, 2001, that Fund, a registered open-end investment
company managed by Fifth Third Asset Management Inc., was merged into Fifth
Third Large Cap Growth Fund.
/2/ For the period prior to October 29, 2001, the quoted performance of
Investment A Shares the Fund reflects the performance of the Investment Shares
of the Kent Large Company Growth Fund, adjusted to reflect the sales charges for
Investment A Shares.
/3/ After tax returns are calculated using a standard set of assumptions. The
stated returns assume the highest historical federal income and capital gains
tax rules. Returns after taxes on distributions assumes a continued investment
in the Fund and shows the effect of taxes on fund distributions. Returns after
taxes on distributions and sales of Fund shares assumes all shares were redeemed
at the end of each measurement period, and shows the effect of any taxable gain
(or offsetting loss) on redemption, as well as the effects of taxes on Fund
distributions. These after tax returns do not reflect the effect of any
applicable state and local taxes. After tax returns are not relevant to
investors holding shares through tax-deferred programs, such as IRA or 401(k)
plans.
/4/ For the period prior to October 29, 2001, the quoted performance of
Investment B and Investment C Shares of the Fund reflects the performance of the
Institutional Shares of the Kent Large Company Growth Fund, adjusted to reflect
the expenses and sales charges for Investment B and Investment C Shares.
/5/ For the period prior to October 29, 2001, the quoted performance of
Institutional Shares the Fund reflects the performance of the Institutional
Shares of the Kent Large Company Growth Fund. On October 29, 2001, that Fund, a
registered open-end investment company managed by Fifth Third Asset Management
Inc., was merged into Fifth Third Large Cap Growth Fund.
* The Standard and Poor's 500 Composite Stock Price Index (the "S&P 500") is an
unmanaged index of 500 selected common stocks, most of which are listed on the
New York Stock Exchange, and is a measure of the U.S. Stock market as a whole.
22
Large Cap Core Fund+ Management Discussion and Analysis.
A review by Allan J. Meyers, portfolio manager.
The stock market was characterized by extraordinary volatility and posted a
decline during the 12 month period ended July 31, 2001.
A number of factors contributed to the poor market performance during the
period. The Federal Reserve Board continued to increase interest rates during
the first six months of the year 2000 to reduce inflation expectations and to
prevent the economy from overheating. Rising interest rates combined with lower
consumer confidence and election uncertainty in November and December caused
economic activity to slow and stock prices to fall. Stocks of communications and
technology firms were particularly hard hit, declining 20% and 50%, respectively
over the past 12 months. The Federal Reserve has reacted to the slowing economy
by reducing interest rates six times since January 1, dropping 275 basis points,
from 6.50% to 3.75% as of July 31, 2001.
The Fund's Institutional and Investment Shares returned -15.49% and -15.70%
respectively during the 12 months ended July 31, 2001. The Fund's Benchmark, the
Standard & Poor's 500 Stock Index returned -14.32% during the same period.
Managing the Fund
Holdings in the utility, financial and energy sectors helped the Fund's
performance during the period. The utilities sector performed well as many
investors turned to utility securities as an equity-based alternative to
fixed-income holdings. The Fund benefited from investments in securities such as
Duke Energy Corp. (0.43% of net assets) which rose 28%.*
[GRAPH]
Kent Growth and Income Fund+
Distributions of net assets*
As of July 31, 2001
Technology 18.1%
Capital Goods 8.8%
Consumer Staples 12.3%
Consumer Cyclicals 9.0%
Other 7.2%
Communication Services 6.2%
Energy 6.9%
Health 13.0%
Financials 18.5%
Financial sector holdings such as Washington Mutual, Inc. (0.44%), which gained
92%, also performed well for the Fund. During the period the Fund increased its
exposure to high quality financial stocks to take advantage of the decline in
interest rates and the expected improvement in profitability. The Fund also
modestly reduced its holdings in the healthcare sector.*
Going Forward
Despite the difficult equity environment of the past 12 months, we believe the
Fund is well positioned for the long term. We anticipate that the reduction in
interest rates and the new tax cuts will spur economic growth, which should lead
to improved corporate profitability and higher stock prices. The Fund's focus
will continue to be on the financial, utility, and energy sectors, as we believe
that these companies have prospects for increased earnings.
23
- --------------------------------------------------------------------------------
*The Fund's portfolio composition is subject to change.
Average Annual Returns as of July 31, 2001
Institutional Class Investment Class
(Inception: 11/2/92) (Inception: 12/1/92)
- -------------------------------------------------------------------------------
One Year -15.49% -15.70%
- -------------------------------------------------------------------------------
Three Years 2.40% 2.16%
- -------------------------------------------------------------------------------
Five Years 11.94% 11.67%
- -------------------------------------------------------------------------------
Since Inception 12.89% 12.38%
- -------------------------------------------------------------------------------
Growth of a $10,000 Investment
As compared with the Standard & Poor's 500 Stock Index
[GRAPH]
Institutional Class Shares
Kent Growth and Income Fund+
Investment Class Shares Standard & Poor's 500 Stock Index
11/2/92 10,000 10,000
12/93 10,398 10,472
12/93 11,610 11,518
12/94 11,669 11,669
12/95 15,743 16,063
12/96 18,809 19,737
12/97 23,351 26,321
12/98 29,907 33,886
12/99 35,526 41,012
12/00 31,528 37,280
7/01 28,856 34,443
- -------------------------------------------------------------------------------
[GRAPH]
Investment Class Shares
Kent Growth and Income Fund+
Investment Class Shares Standard & Poor's 500 Stock Index
12/1/92 10,000 10,000
12/92 10,059 10,472
12/93 11,247 11,518
12/94 11,302 11,669
12/95 15,213 16,036
12/96 18,124 19,737
12/97 22,454 26,321
12/98 28,666 33,886
12/99 33,978 39,676
12/00 30,081 36,065
24
7/01 27,496 33,320
- -------------------------------------------------------------------------------
The Fund's performance is measured against the Standard & Poor's 500 Stock
Index, which is an unmanaged index that generally represents the performance of
the U.S. stock market as a whole. The index does not reflect the deduction of
fees associated with a mutual fund, such as investment management and fund
accounting fees. The performance of the Fund does reflect the deduction of fees
for these value-added services. Investors cannot invest directly in an index,
although they can invest in the underlying securities.
The chart represents historical performance of a hypothetical investment of
$10,000 in the Kent Growth and Income Fund from 11/2/92 (Institutional Class
Shares) and 12/1/92 (Investment Class Shares) to 7/31/01, and represents the
reinvestment of dividends and capital gains in the Fund.
Past performance is no guarantee of future results. The investment return and
principal value will fluctuate, so that shares, when redeemed, may be worth more
or less than the original cost. Performance for each class will differ based on
differences in expenses for each class of shares. Return figures and investment
values are quoted after deducting all expenses. Total return is based on changes
in net asset value, assuming reinvestment of all dividends and capital gain
distributions.
During various periods reflected in the graphs above certain fees were waived.
Had waivers not been in effect, total returns would have been lower.
+ For the period ended July 31, 2001, the discussion above reflects information
for the Kent Growth and Income Fund. On October 29, 2001, that Fund, a
registered open-end investment company managed by Fifth Third Asset Management
Inc. was merged into the Fifth Third Large Cap Value Fund. Upon consummation of
the Transaction, the Fifth Third Large Cap Value Fund will be renamed the Fifth
Third Large Cap Core Fund.
25
Large Cap Growth Fund+ Management Discussion and Analysis.
A review by Allan J. Meyers, Portfolio Manager
The stock market was characterized by great instability and difficult
performance during the 12 month period ended July 31, 2001. High priced
technology and communications companies were among the worst performers. The
Nasdaq Composite Index/1/ declined 46.19% during the period, as investors
remained wary of the prospects for growth in the technology sector.
Several factors contributed to the stock market's poor showing. During the first
half of the year 2000 the Federal Reserve Board increase interest rates three
times in an attempt to prevent the economy from overheating and to quell
inflationary fears. The restrictive monetary policy combined with rising oil
prices, reduced consumer confidence and a strong U.S. dollar resulted in a weak
economy and a much lower level of corporate profitability. Operating earnings of
companies that comprise the S&P 500 Index fell approximately 25% in the second
quarter of 2001 from the prior year's level.
The Fund's Institutional and Investment Shares returned -22.90% and -23.03%,
respectively, during the 12, months ended July 31, 2001. The Fund's benchmark,
the S&P 500 Index, returned -14.32% for the same period.
Positioning the Fund
The Fund's two major sector overweights consist of healthcare and technology.
These are the two areas where we anticipate that above average long term
earnings growth will be possible. The Fund deemphasized technology in January
2001 by reducing or eliminating positions in Nortel Networks Corp. (0.18% of net
assets), Applied Materials (0.34%), and JDS Uniphase and re-deployed the money
into the healthcare sector and financial services. That shift
[GRAPH]
Kent Large Company Growth Fund+
Distribution of net assets*
As of July 31, 2001
Communication Services 6.0%
Consumer Staples 14.3%
Consumer Cyclicals 8.3%
Capital Goods 8.7%
Other 2.3%
Health 18.2%
Financials 15.3%
Technology 21.8%
Energy 5.1%
helped insulate the Fund from some of the worst losses in the technology sector,
and took advantage of relatively strong performance in both healthcare and
financial service stocks. Healthcare and financials mitigated some of the losses
experienced by technology stocks.*
Looking ahead
We anticipate that the economy will pick up steam in the coming year, as
interest rate reductions and tax cuts begin to take effect. As the economy
begins to improve the Fund will consider the purchase of additional high quality
technology companies.
In the coming months we will be looking at semiconductors stocks first, as they
are core technologies. We will also consider hardware manufacturers and software
manufacturers such as Adobe Systems, Inc. (0.18%), Oracle Corp. (1.27%), and
Microsoft Corp. (4.64%).*
26
- --------------------------------------------------------------------------------
/1/The Nasdaq Composite Index is a market capitalization price only index that
tracks the performance of domestic common stocks traded on the regular Nasdaq
market, as well as the National Market System traded foreign common stocks and
American Depositary Receipts.
*The Fund's portfolio composition is subject to change.
Average Annual Returns as of July 31, 2001
Institutional Class Investment Class
(Inception: 10/19/99) (Inception: 10/19/99)
- -------------------------------------------------------------------------------
One Year -22.90% -23.03%
- -------------------------------------------------------------------------------
Since Inception -5.89% -6.10%
- -------------------------------------------------------------------------------
Growth of a $10,000 Investment
As compared with the Standard & Poor's 500 Stock Index
[GRAPH]
Institutional Class Shares
Kent Large Company Growth Fund+
Institutional Class Shares Standard & Poor's 500 Stock Index
10/19/99 10,000 10,000
10/99 10,850 10,622
11/99 11,196 10,839
12/99 11,891 11,475
1/00 11,342 10,899
2/00 11,203 10,693
3/00 12,221 11,739
4/00 11,771 11,385
5/00 11,422 11,152
6/00 11,937 11,427
7/00 11,638 11,249
8/00 12,284 11,948
9/00 11,462 11,317
10/00 11,345 11,269
11/00 10,282 10,381
12/00 10,078 10,432
7/01 8,973 9,638
- -------------------------------------------------------------------------------
[GRAPH]
Investment Class Shares
Kent Large Company Growth Fund+
Investment Class Shares Standard & Poor's 500 Stock Index
10/19/99 10,000 10,000
10/99 10,840 10,621
11/99 11,184 10,839
27
12/99 11,887 11,475
1/00 11,326 10,899
2/00 11,196 10,693
3/00 12,201 11,739
4/00 11,760 11,385
5/00 11,399 11,152
6/00 11,921 11,427
7/00 11,610 11,249
8/00 12,262 11,948
9/00 11,439 11,317
10/00 11,309 11,269
11/00 10,257 10,381
12/00 10,041 10,432
7/01 8,936 9,638
- -------------------------------------------------------------------------------
The Fund's performance is measured against the Standard & Poor's 500 Stock
Index, which is an unmanaged index that generally represents the performance of
the U.S. stock market as a whole. The index does not reflect the deduction of
fees associated with a mutual fund, such as investment management and fund
accounting fees. The performance of the Fund does reflect the deduction of fees
for these value-added services. Investors cannot invest directly in an index,
although they can invest in the underlying securities.
The chart represents historical performance of a hypothetical investment of
$10,000 in the Kent Large Company Growth Fund from 10/19/99 to 7/31/01, and
represents the reinvestment of dividends and capital gains in the Fund.
Past performance is no guarantee of future results. The investment return and
principal value will fluctuate, so that shares, when redeemed, may be worth more
or less than the original cost. Performance for each class will differ based on
differences in expenses for each class of shares. Return figures and investment
values are quoted after deducting all expenses. Total return is based on changes
in net asset value, assuming reinvestment of all dividends and capital gain
distributions.
During various periods reflected in the graphs above certain fees were waived.
Had waivers not been in effect, total returns would have been lower.
+ For the period ended July 31, 2001, the discussion above reflects information
for the Kent Large Company Growth Fund. On October 29, 2001, that Fund, a
registered open-end investment company managed by Fifth Third Asset Management
Inc. was merged into the Fifth Third Large Cap Growth Fund. Upon consummation of
the Transaction, the new Fund will be named the Fifth Third Large Cap Core Fund.
28
Fund Management.
- ----------------
Investment Advisor - Fifth Third Asset Management Inc., 38 Fountain Square
Plaza, Cincinnati, Ohio 45263, serves as investment manager to the Large Cap
Core Fund and the Large Cap Growth Fund. Fifth Third Asset Management Inc. is a
subsidiary of Fifth Third Bancorp.
Subject to the supervision of the Fifth Third Funds' Board of Trustees, the
Advisor manages the Funds' assets, including buying and selling portfolio
securities. The Advisor employs an experienced staff of professional investment
analysts, portfolio managers and traders, and uses several proprietary
computer-based systems in conjunction with fundamental analysis to identify
investment opportunities. The Advisor also furnishes office space and certain
administrative services to the Funds.
As of December 31, 2001, Fifth Third Asset Management Inc. had
approximately $12.4 billion of assets under management in the Fifth Third Funds.
The management fees paid by the Funds for the fiscal year ended July 31,
2001 are as follows:
- ----------------------------------------------------------------------
As a percentage of
average net assets
- ----------------------------------------------------------------------
Fifth Third Large Cap Core Fund 0.70%
- ----------------------------------------------------------------------
Fifth Third Large Cap Growth Fund 0.70%
- ----------------------------------------------------------------------
Portfolio Managers - Both the Large Cap Growth Fund and the Large Cap Core
Fund are co-managed by Allan J. Meyers and Daniel Skubiz. Mr. Meyers has been
the portfolio manager for the Large Cap Core Fund since November 1997 and for
the Large Cap Growth Fund since October 1999. Currently, he is the Director for
Large Company Strategies for the Advisor and is Vice President of Fifth Third
Bank. Mr. Meyers has over twenty-two year of portfolio management experience,
including seventeen years with the Advisor and its predecessor, Lyon Street
Asset Management Company. He earned his BBA in finance, magna cum laude, and MBA
from Western Michigan University. Mr. Skubiz has been the portfolio manager of
the Funds since April 2000. Mr. Skubiz is an Assistant Vice President of the
Advisor. Prior to that, from December 1997 to February 2000, he was a portfolio
manager for Trade Street Investment Associates. He earned his BBA in finance and
accounting from the University of Tulsa and his MBA from St. Louis University.
Legal Proceedings
There are no pending material legal proceedings to which Fifth Third Funds,
the Large Cap Core Fund, or the Large Cap Growth Fund is a party.
Net Asset Value - Large Cap Core Fund and Large Cap Growth Fund. The price of
Fund Shares is based on the Fund's Net Asset Value (NAV). The value of each
portfolio instrument held by the Funds is determined by using market prices.
Under special circumstances, such as when an event occurs after the close of the
exchange on which a Fund's portfolio securities are principally traded, which,
in the investment manager's opinion has materially affected the price of those
securities, the Fund may use fair value pricing. Each Fund's NAV is calculated
at 4:00 p.m. Cincinnati time each day the New York Stock Exchange is open for
regular trading. Each Fund's NAV may change on days when shareholders will not
be able to purchase or redeem Fund Shares. The Funds will be closed on the
following holidays: New Year's Day, Martin Luther King Jr. Day, Presidents Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas.
Purchasing and Adding to Your Shares - Large Cap Core Fund and Large Cap Growth
- -------------------------------------------------------------------------------
Fund.
- -----
You may purchase Shares on the days when the Fund is open for business.
Your purchase price will be the next NAV after your purchase order, completed
application and full payment have been received by the Funds or its
29
transfer agent. All orders must be received by the Funds or its transfer agent
prior to 4:00 p.m. Cincinnati time in order to receive that day's NAV.
You may purchase Investment A, Investment B and Investment C Shares
through Fifth Third Securities, Inc. as well as broker-dealers and financial
institutions which have a sales agreement with the distributor of Fund Shares.
In order to purchase Shares through any financial institution, you must open an
account with that institution. That account will be governed by its own rules
and regulations, which may be more stringent than the rules and regulations
governing an investment in the Funds, and you should consult your account
documents for full details.
Institutional Shares only may be purchased through the Trust and
Investment Department of Fifth Third Bank, Fifth Third Securities,
Inc.--Institutional Investment Division, qualified employee retirement plans
subject to minimum requirements that may be established by the distributor of
Fund Shares, or broker-dealers, investment advisers, financial planners or other
financial institutions which have an agreement with Fifth Third Bank to place
trades for themselves or their clients for a fee. In order to purchase
Institutional Shares through one of those entities, you must have an account
with it. That account will be governed by its own rules and regulations, which
may be more stringent than the rules and regulations governing an investment in
the Funds, and you should consult your account documents for full details. Your
shares in the Funds may be held in an omnibus account in the name of that
institution.
Shareholder Contact Information. For Fifth Third Securities brokerage
account holders, please contact your Fifth Third Securities representative at
your local banking center or call 1-888-889-1025. For brokerage account holders
at other financial institutions (non-Fifth Third Securities), contact your
investment representative or financial institution. For accounts held at Fifth
Third Funds, please call 1-800-282-5706, or write to Fifth Third Funds, P.O. Box
182706, Columbus, Ohio 43218-2706.
The entity through which you are purchasing your Shares is responsible
for transmitting orders to the Funds and it may have an earlier cut-off time for
purchase requests. Consult that entity for specific information. If your
purchase order has been received by the Funds prior to the time designated by
the Funds for receiving orders, you will receive the dividend , if any, declared
for that day.
Investment Amounts The minimum initial investment in Investment A
Shares, Investment B Shares, Investment C Shares, or
Institutional Shares of the Funds offered by this
Prospectus is $1,000. The minimum initial investment
through an individual retirement account is $500.
Subsequent investments must be in amounts of at least
$50. The maximum investment is $250,000 for total
purchases of Investment B Shares. The Funds reserve
the right to waive the minimum initial investment. An
institutional investor's minimum investment will be
calculated by combining all accounts it maintains
with the Fifth Third Funds.
All purchases must be in U.S. dollars. A fee may be
charged for any checks that do not clear. The Funds
reserve the right to reject third-party checks.
For details, contact the Trust toll-free at
1-800-282-5706 or write to: Fifth Third Funds, 3435
Stelzer Road, Columbus, Ohio 43219.
The Funds may reject a purchase order for any reason.
Systematic Investment
Program You may make monthly systematic investments in
Investment A, B, or C Shares of the Funds from your
bank account. There is no minimum amount required for
initial amounts invested into the Funds. You may
elect to make systematic investments on the 1st or
the 15th of each month, or both. If the 1st or the
15th of the month is not a day on which the Fund is
open for business, the purchase will be made on the
following day the Fund is open for business.
30
Avoid Withholding Tax
Each Fund is required to withhold a portion of taxable dividends, capital gains
distributions and redemptions paid to any shareholder who has not provided the
Fund with his or her certified Taxpayer Identification Number (your Social
Security Number for individual investors) in compliance with IRS rules. To avoid
this withholding, make sure you provide your correct Tax Identification Number.
Redemption - Large Cap Core Fund and Large Cap Growth Fund.
- -----------------------------------------------------------
Selling Your Shares
You may sell your Shares on days when the Fund is open for business. Your sales
price will be the next NAV after your sell order is received by the Funds, its
transfer agent, or your investment representative. All orders must be received
by the Funds or its transfer agent prior to the time the Fund calculates its NAV
in order to receive that day's NAV. If your order has been received by the Fund
prior to the time the Fund calculates its NAV and your shares have been sold ,
you will not receive the dividend, if any, declared for that day. Normally you
will receive your proceeds within a week after your request is received.
In order to sell your Institutional Shares, call the Trust and Investment
Department at Fifth Third Bank, Fifth Third Securities, Inc.--Institutional
Investment Division, the sponsor of your qualified employee retirement plan or
the broker-dealer, investment adviser, financial planner or other institution
through which you purchased your Shares.
The entity through which you are selling your Shares is responsible for
transmitting the order to the Funds, and it may have an earlier cut-off for sale
requests. Consult that entity for specific information. If your sell order has
been received by the Funds prior to the time designated by the Funds for
receiving orders on a specific day, you will not receive the dividend, if any,
declared for that day.
If you experience difficulty making a telephone redemption during periods of
drastic economic or market change, for Investment A Shares and Investment C
Shares, you can send to the Funds your request by regular mail to: Fifth Third
Funds, P.O. Box 182706, Columbus, Ohio 43218-2706, or by express mail to: Fifth
Third Funds, c/o BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio
43219-3035. For Institutional Shares, you can send to the Funds your request by
regular mail to: Fifth Third Funds, 38 Fountain Square Plaza, Cincinnati, Ohio
45263.
Systematic Withdrawal Plan - Investment A, B and C Shares
You may make automatic withdrawals on a monthly, quarterly or annual basis on
the first day of that period that the Fund is open for business. The minimum
required balance is $10,000 and the minimum withdrawal amount is $100.
Postponement of Redemption Payments
Any Fund may delay sending to you redemption proceeds for up to 7 days, or
during any period when (a) trading on the NYSE is restricted by applicable rules
and regulations of the SEC, (b) the NYSE is closed for other than customary
weekend and holiday closings, (c) the SEC has permitted such suspension, or (d)
an emergency exists as determined by the SEC.
Redemptions Within 15 Days of Initial Investment - Investment A, B and C Shares
When you have made your initial investment by check, you cannot redeem any
portion of it until the Transfer Agent is satisfied that the check has cleared
(which may require up to 15 business days). You can avoid this delay by
purchasing Shares with a certified check, or by wire.
Closing of Small Accounts
31
If your account falls below $1,000 because of redemptions, a Fund may ask you to
increase your balance. If it is still below the minimum after 30 days, the Fund
may close your account and send you the proceeds at the current NAV.
Dividends and Distributions - Large Cap Core Fund and Large Cap Growth Fund.
- ----------------------------------------------------------------------------
Distribution Arrangements/ This section describes the sales charges and fees you
will pay as an investor Sales Charges and ways to qualify for reduced sales
charges.
Investment A Investment B Investment C
Charge (Load) Front-end sales charge; No front-end sales charge. No front-end sales
reduced sales charges A contingent deferred sales charge. A contingent
available. charge (CDSC) will be deferred sales charge
imposed on Shares redeemed (CDSC) will be imposed on
within 6 years after Shares redeemed within 12
purchase. months after purchase.
Distribution/Service Subject to annual Subject to annual Subject to annual
(12b-1) Fee distribution and distribution and distribution and
shareholder servicing shareholder servicing fees shareholder servicing fees
fees of up to 0.25% of of up to 1.00% of the of up to 0.75% of the
the Fund's assets. Fund's assets. Fund's assets. (Also
subject to a non-12b-1 fee
for shareholder servicing
of up to 0.25% of the
Fund's assets.)
Fund Expenses Lower annual expenses Higher annual expenses than Higher annual expenses
than Investment B and C Investment A Shares. than Investment A Shares.
Shares.
Conversion None Converts to Investment A None
Shares after 8 years.
Calculation of Sales Charges
Investment A Shares Investment A Shares are sold at their public offering
price. This price includes the initial sales charge.
Therefore, part of the money you send to the Funds
will be used to pay the sales charge. The remainder
is invested in Fund Shares. The sales charge
decreases with larger purchases. There is no sales
charge on reinvested dividends and distributions.
The current sales charge rates are as follows:
Sales Charge as a % Sales Charge as a %
of Offering Price of Your Investment
Your Investment
Less than $50,000 4.50% 4.71%
------------------------------------ ---------------------- ---------------------
$50,000 but less than $100,000 4.00% 4.17%
------------------------------------ ---------------------- ---------------------
$100,000 but less than $150,000 3.00% 3.09%
------------------------------------ ---------------------- ---------------------
$150,000 but less than $250,000 2.00% 2.04%
------------------------------------ ---------------------- ---------------------
$250,000 but less than $500,000 1.00% 1.01%
------------------------------------ ---------------------- ---------------------
$500,000 or more 0.00% 0.00%
32
If you purchase $500,000 or more of Investment A
Shares and do not pay a sales charge, and you sell
any of those Shares before the first anniversary of
purchase, you will pay a 1% contingent deferred sales
charge, or CDSC, on the portion redeemed at the time
of redemption. The CDSC will be based upon the lowest
of the NAV at the time of purchase and the NAV at the
time of redemption. In any sales, certain Shares not
subject to the CDSC (i.e., Shares purchased with
reinvested dividends or distributions) will be
redeemed first followed by Shares subject to the
lowest CDSC (typically Shares held for the longest
time).
Sales Charge Reductions You may qualify for reduced sales charges under the
following circumstances:
o Letter of Intent. You inform the Fund in
writing that you intend to purchase at least
$50,000 of Investment A Shares over a
13-month period to qualify for a reduced
sales charge. You must include up to 4.50%
of the total amount you intend to purchase
with your letter of intent. Shares purchased
under the non-binding Letter of Intent will
be held in escrow until the total investment
has been completed. In the event the Letter
of Intent is not completed, sufficient
escrowed Shares will be redeemed to pay any
applicable front-end sales charges.
o Rights of Accumulation. When the value of
Shares you already own plus the amount you
intend to invest reaches the amount needed
to qualify for reduced sales charges, your
added investment will qualify for the
reduced sales charge.
o Combination Privilege. Combine accounts of
multiple Funds (excluding the Money Market
Funds) or accounts of immediate family
household members (spouse and children under
21) to achieve reduced sales charges.
Investment B Shares Investment B Shares are offered at NAV, without any
up-front sales charge. Therefore, all of the money
that you send to the Funds is used to purchase Fund
shares. If you sell your Investment B Shares before
the end of the sixth year after purchase, however,
you will pay a contingent deferred sales charge, or
CDSC, at the time of redemption. The CDSC will be
based upon the lower of the NAV at the time of
purchase and the NAV at the time of redemption. In
any sale, certain shares not subject to the CDSC
(i.e., shares purchased with reinvested dividends or
distributions) will be redeemed first, followed by
shares subject to the lowest CDSC (typically shares
held for the longest time).
Investment B Shares are subject to the following CDSC
schedule:
----------------------------------------- ---------------------------------------
% of NAV (at time of purchase or sale
Year of Redemption After Purchase if lower) deducted from proceeds
----------------------------------------- ---------------------------------------
During the first year 5%
During the second year 4%
During the third or fourth years 3%
During the fifth year 2%
During the sixth year 1%
During the seventh or eighth years 0%
----------------------------------------- ---------------------------------------
33
Sales Charge Waivers The following transactions qualify for waivers of
sales charges that apply to Investment A Shares:
o Shares purchased by investment
representatives through fee-based investment
products or accounts.
o Reinvestment of distributions from a
deferred compensation plan, agency, trust,
or custody account that was maintained by
the Advisor or its affiliates or invested in
any Fifth Third Fund.
o Shares purchased for trust or other advisory
accounts established with the Advisor or its
affiliates.
o Shares purchased by directors, trustees,
employees, and family members of the Advisor
and its affiliates and any organization that
provides services to the Funds; retired Fund
trustees; dealers who have an agreement with
the Distributor; and any trade organization
to which the Adviser or the Administrator
belongs.
o Shares purchased in connection with 401(k)
plans, 403(b) plans and other
employer-sponsored qualified retirement
plans, "wrap" type programs
non-transactional fee fund programs, and
programs offered by fee-based financial
planners and other types of financial
institutions (including omnibus service
providers).
o Distributions from Qualified Retirement
Plans. There also is no sales charge for
Fund Shares purchased with distributions
from qualified retirement plans or other
administered by Fifth Third Bank.
o Shares purchased by former Kent Fund
Investment Class shareholders.
o Shares purchased by Trust Companies,
Retirement Plan Recordkeeping Firms, or
similar organizations that purchase on
behalf of their clients from a fund through
an omnibus account.
Investment B Shares The CDSC will be waived under certain circumstances,
including the following:
o Minimum required distributions from an IRA
or other qualifying retirement plan to a
shareholder who has attained age 70 and a
half.
o Redemption from accounts following the death
or disability of the shareholder.
o Investors who purchased through a
participant directed defined benefit plan. o
Returns of excess contributions to certain
retirement plans.
o Distributions of less than 12% of the annual
account value under the Systematic
Withdrawal Plan.
o Shares issued in a plan of reorganization
sponsored by Fifth Third Bank or shares
redeemed involuntarily in a similar
situation.
34
o Shares issued for sweep accounts where a
sales commission was not paid at the time of
purchase. In this case, the maximum purchase
amount is waived also.
Investment C Shares Class C Shares are offered at NAV, without any
up-front sales charge. Therefore, all the money you
send to the Funds is used to purchase Fund Shares. If
you sell your Investment C Shares before the first
anniversary of purchase, however, you will pay a 1%
contingent deferred sales charge or CDSC, at the time
of redemption. The CDSC will be based upon the lower
of the NAV at the time of purchase and the NAV at the
time of redemption. In any sale, certain Shares not
subject to the CDSC (i.e., Shares purchased with
reinvested dividends or distributions) will be
redeemed first, followed by Shares subject to the
lowest CDSC (typically Shares held for the longest
time).
Reinstatement If you have sold Investment A or C Shares and decide
Privilege to reinvest in the Fund within a 90 day period, you
will not be charged the applicable sales load on
amounts up to the value of the Shares you sold. You
must provide a written reinstatement request and
payment within 90 days of the date your instructions
to sell were processed.
Distributions/Service 12b-1 fees compensate the Distributor and other
(12b-1) Fees dealers and investment representatives for services
and expenses related to the sale and distribution of
the Fund's Shares and/or for providing shareholder
services. In particular, these fees help to defray
the Distributor's costs of advancing brokerage
commissions to investment representatives. 12b-1 fees
are paid from Fund assets on an ongoing basis, and
will increase the cost of your investment. 12b-1 fees
may cost you more than paying other types of sales
charges.
The 12b-1fees vary by Share class as follows:
o Investment A Shares may pay a 12b-1
fee of up to 0.25% of the average
daily net assets of a Fund, which
the Distributor may use for
shareholder servicing and
distribution.
o Investment B Shares pay a 12b-1 fee
at an annual rate of up to 1.00% of
the average daily net assets of the
applicable fund. The Distributor
may use up to 0.25% of the 12b-1
fee for shareholder servicing and
up to 0.75% for distribution.
o Investment C Shares pay a 12b-1 fee
of up to 0.75% of the average daily
net assets of the applicable Fund
which the Distributor may use for
shareholder servicing and
distribution. This will cause
expenses for Investment C Shares to
be higher and dividends to be lower
than for Investment A Shares. The
higher 12b-1 fee on Investment C
Shares, together with the CDSC,
help the Distributor sell
Investment C Shares without an
"up-front" sales charge. In
particular, these fees help to
defray the Distributor's costs of
advancing brokerage commission to
investment representatives. Please
note that Investment C Shares pay a
non 12b-1 shareholder servicing fee
of up to
35
0.25% of the average daily net
assets of the applicable Fund.
Over time shareholders will pay more than the
equivalent of the maximum permitted front-end sales
charge because 12b-1 distribution and service fees
are paid out of the Fund's assets on an on-going
basis.
Conversion to Investment Investment B Shares convert automatically to
A Shares Investment A Shares 8 years after purchase. After
conversion, the 12b-1 fees applicable to your shares
are reduced from 1.00% to 0.25% of the average daily
net assets.
Dealers Incentives BISYS, the distributor of Fund Shares, in its
discretion, may pay all dealers selling Investment A,
B, or C Shares all or a portion of the sales charges
it normally retains.
DIVIDENDS AND CAPITAL All dividends and capital gains will be automatically
GAINS (Investment A reinvested unless you request otherwise. You can
Shares, Investment C receive them in cash or by electronic funds transfer
Shares and Institutional to your bank account if you are not a participant in
Shares) an IRA account or in a tax qualified plan. There are
no sales charges for reinvested distributions.
Institutional Share dividends are higher than
Investment A Share dividends which are higher than
Investment B which are higher than Investment C Share
dividends. This is because Institutional Shares have
lower operating expenses than Investment A Shares
which have lower operating expenses than Investment
Shares.
Distributions are made on a per Share basis
regardless of how long you've owned your Shares.
Therefore, if you invest shortly before the
distribution date, some of your investment will be
returned to you in the form of a taxable
distribution.
Dividends, if any, are declared and paid quarterly by
the Large Cap Core Fund and the Large Cap Growth
Fund. Capital gains, if any, are distributed at least
annually.
Taxes - Large Cap Core Fund and Large Cap Growth Fund.
- ------------------------------------------------------
Taxation of Shareholder A sale, exchange, or redemption of Fund shares
Transactions generally will result in a taxable gain or loss to
the shareholder.
Taxation of Distributions Each Fund expects to distribute substantially all of
its investment income (including net capital gains)
to its shareholders. Unless otherwise exempt or as
discussed below, shareholders are required to pay
federal income tax on any dividends and other
distributions, including capital gains distributions
received. This applies whether dividends and other
distributions are received in cash or as additional
Shares. Distributions representing long-term capital
gains, if any, will be taxable to shareholders as
long-term capital gains no matter how long the
shareholders have held the Shares. Distributions are
taxable to shareholders even if they are paid from
income or gains earned by a Fund before a
shareholder's investment (and thus were included in
the price paid).
36
This is a brief summary of certain income tax
consequences relating to an investment in the Funds,
and shareholders are urged to consult their own tax
advisors regarding the taxation of their investments
under federal, state and local laws.
Financial Highlights - Large Cap Core Fund and Large Cap Growth Fund.
- ---------------------------------------------------------------------
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years or the period of each Fund's
operations, if shorter. Certain information reflects financial results for a
single Fund Share. The total returns in the tables represent the rate that an
investor would have earned or lost on an investment in a Fund (assuming
reinvestment of all dividends and distributions).
The Large Cap Core Fund currently is named Fifth Third Large Cap Value Fund.
Thus, the financial highlights table reflects the performance of the Fifth Third
Large Cap Value Fund which invests in value oriented stocks primarily and does
not include a significant growth oriented stock component.
The information for the Fifth Third Large Cap Core Fund and the Fifth Third
Large Cap Growth Fund for the period ended July 31, 2001 has been audited by
Arthur Andersen LLP, whose report, along with the Fund's financial statements,
are included in the Funds' report, which is available upon request. The
information for the Funds for the years ended December 31, 2000 and prior have
been audited by KPMG LLP, whose report, along with the Funds' financial
statements, are incorporated by reference in the SAI, which is available upon
request.
37
Fifth Third Funds
Financial Highlights
Large Cap Growth Fund
- --------------------------------------------------------------------------------
Increase/(Decrease) in Net
Assets Resulting from Less Dividends and
Operations Distributions from
----------------------------- ------------------
Net Realized and
Unrealized Net
Net Asset Gains/(Losses) from Change in Net Total Asset
Value, Net Investments, Assets Net Net Dividends Value,
Beginning Investment Futures and Option Resulting from Investment Realized and End of
of Period Income Contracts Operations Income Gains Distributions Period
- ------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES - Ticker Symbol: KLCGX
Period ended 1999(a) $10.00 0.01 1.88 1.89 (0.01) (0.01) (0.02) $11.87
Year ended 2000 $11.87 0.03 (1.84) (1.81) (0.03) (0.02) (0.05) $10.01
Period ended 2001(b) $10.01 0.01 (1.11) (1.10) (0.01) -- (0.01) $ 8.90
Six months
ended
(Unaudited) 2002 $ 8.90 0.01 (0.57) (0.56) (0.01) -- (0.01) $ 8.33
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT A SHARES - Ticker Symbol:
FLFAX
Year ended 1999(a) $10.00 -- 1.88 1.88 (0.01) (0.01) (0.02) $11.86
Year ended 2000 $11.86 0.01 (1.84) (1.83) (0.01) (0.02) (0.03) $10.00
Period ended 2001(b) $10.00 -- (1.10) (1.10) (0.01) -- (0.01) $ 8.89
Six months
ended
(Unaudited) 2002 $ 8.89 0.01 (0.57) (0.56) (0.01) -- (0.01) $ 8.32
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT B SHARES - Ticker Symbol: FLFBX
Period
ended
(Unaudited) 2002(c) $ 8.17 -- 0.14 0.14 (0.00)+ -- (0.00)+ $ 8.31
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT C SHARES - Ticker Symbol: FLFCX
Period ended
(Unaudited) 2002(c) $ 8.17 -- 0.14 0.14 -- -- -- $ 8.31
- ------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------
Ratios of Ratios of Ratios of
Total Net Expenses Net Expenses
Return Assets, to Investment to
(excludes End of Average Income/(Loss) Average Portfolio
sales Period Net to Average Net Turnover
charge) (000's) Assets Net Assets Assets/\ Rate #
- ------------------------------------------------------------------------------
INSTITUTIONAL SHARES - Ticker Symbol: KLCGX
Period ended 18.91%* $183,259 0.97%** 0.39%** 0.98%** --
Year ended (15.25%) $273,998 0.93% 0.32% 0.94% 5%
Period ended (10.96%)* $255,259 0.94%** 0.26%** 0.94%** 8%
Six months
ended
(Unaudited) (6.27%)* $206,725 0.95%** 0.35%** 0.97%** 3%
- ------------------------------------------------------------------------------
INVESTMENT A SHARES - Ticker Symbol:
FLFAX
Year ended 18.87%* $ 253 1.23%** 0.00%** 1.24%** --
Year ended (15.53%) $ 589 1.18% 0.08% 1.19% 5%
Period ended (11.01%)* $ 604 1.19%** 0.01%** 1.19%** 8%
Six months
ended
(Unaudited) (6.32%)* $ 687 1.20%** 0.09%** 1.22%** 3%
- ------------------------------------------------------------------------------
INVESTMENT B SHARES - Ticker Symbol: FLFBX
Period
ended
(Unaudited) 1.73%* $ 88 1.96%** (0.79%)** 2.00%** 3%
- ------------------------------------------------------------------------------
INVESTMENT C SHARES - Ticker Symbol: FLFCX
Period ended
(Unaudited) 1.71%* $ 1 1.82%** (0.54%)** 1.82%** 3%
- ------------------------------------------------------------------------------
(a) Reflects operations for the period from October 19, 1999 (date of
commencement of operations) to December 31, 1999.
(b) Reflects operations for the period from January 1, 2001 to July 31, 2001.
The Fund changed its fiscal year end to July 31 from December 31.
(c) Reflects operations for the period from October 29, 2001 (date of
commencement of operations) to January 31, 2002.
* Not annualized.
** Annualized.
/\ During various periods, certain fees were voluntarily reduced. The ratios
shown do not include these voluntary fee reductions.
# Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
+ Amount less than $0.005.
38
Fifth Third Funds
Financial Highlights
Large Cap Value Fund
- --------------------------------------------------------------------------------
Increase/(Decrease) in Net Assets Less Dividends and
Resulting from Operations Distributions from
-------------------------------- ------------------
Net Realized and
Unrealized Change in
Net Asset Gains/(Losses) from Net Assets Total
Value, Net Investments, Resulting Net Net Dividends
Beginning Investment Futures and Option from Investment Realized and
of Period Income Contracts Operations Income Gains Distributions
- ------------------------------------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES - Ticker Symbol: KNVEX
Year ended 1996 $13.25 0.30 2.16 2.46 (0.30) (1.51) (1.81)
Year ended 1997 $13.90 0.25 3.04 3.29 (0.25) (1.39) (1.64)
Year ended 1998 $15.55 0.13 4.03 4.16 (0.14) (1.54) (1.68)
Year ended 1999 $18.03 0.12 3.20 3.32 (0.12) (0.81) (0.93)
Year ended 2000 $20.42 0.07 (2.24) (2.17) (0.07) (1.34) (1.41)
Period ended 2001(a) $16.84 0.03 (1.43) (1.40) (0.03) (0.24) (0.27)
Six months ended (Unaudited) 2002 $15.17 0.03 (1.03) (1.00) (0.03) (0.31) (0.34)
- ------------------------------------------------------------------------------------------------------------------------------
INVESTMENT A SHARES - Ticker Symbol: KNVIX
Year ended 1996 $13.19 0.26 2.15 2.41 (0.28) (1.51) (1.79)
Year ended 1997 $13.81 0.21 3.02 3.23 (0.21) (1.39) (1.60)
Year ended 1998 $15.44 0.08 4.00 4.08 (0.10) (1.54) (1.64)
Year ended 1999 $17.88 0.07 3.18 3.25 (0.07) (0.81) (0.88)
Year ended 2000 $20.25 0.02 (2.22) (2.20) (0.02) (1.34) (1.36)
Period ended 2001(a) $16.69 0.02 (1.42) (1.40) (0.03) (0.24) (0.27)
Six months ended (Unaudited) 2002 $15.02 0.03 (1.04) (1.01) (0.03) (0.31) (0.34)
- ------------------------------------------------------------------------------------------------------------------------------
INVESTMENT B SHARES - Ticker Symbol: FBLVX
Period ended (Unaudited) 2002(b) $13.86 0.01 0.24 0.25 (0.01) (0.31) (0.32)
- ------------------------------------------------------------------------------------------------------------------------------
INVESTMENT C SHARES - Ticker
Symbol: FCLVX
Period ended (Unaudited) 2002(b) $13.86 0.01 0.25 0.26 (0.01) (0.31) (0.32)
- ------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
---------------------------------------------------
Ratios of Ratios of
Net Total Net Expenses Ratios of Net Expenses
Asset Return Assets, to Investment to
Value, (excludes End of Average Income/(Loss) Average Portfolio
End of sales Period Net to Average Net Turnover
Period charge) (000's) Assets Net Assets Assets/\ Rate #
- ---------------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES - Ticker Symbol: KNVEX
Year ended $13.90 19.47% $500,857 0.95% 2.18% 0.95% 39%
Year ended $15.55 24.14% $697,973 0.92% 1.61% 0.93% 88%
Year ended $18.03 28.07% $827,828 0.93% 0.77% 0.94% 20%
Year ended $20.42 18.79% $822,414 0.92% 0.62% 0.93% 9%
Year ended $16.84 (11.25%) $624,860 0.91% 0.35% 0.92% 14%
Period ended $15.17 (8.24%)* $547,524 0.93%** 0.40%** 0.94%** 5%
Six months ended (Unaudited) $13.83 (6.61%)* $459,924 0.94%** 0.60%** 0.96%** 2%
- ---------------------------------------------------------------------------------------------------
INVESTMENT A SHARES - Ticker Symbol: KNVIX
Year ended $13.81 19.14% $ 15,063 1.09% 1.77% 1.09% 39%
Year ended $15.44 23.89% $ 35,343 1.17% 1.31% 1.18% 88%
Year ended $17.88 27.68% $ 50,458 1.18% 0.50% 1.19% 20%
Year ended $20.25 18.53% $ 58,336 1.18% 0.36% 1.19% 9%
Year ended $16.69 (11.47%) $ 47,847 1.16% 0.10% 1.17% 14%
Period ended $15.02 (8.36%)* $ 38,659 1.18%** 0.15%** 1.19%** 5%
Six months ended (Unaudited) $13.67 (6.78%)* $ 30,457 1.19%** 0.35%** 1.21%** 2%
- ---------------------------------------------------------------------------------------------------
INVESTMENT B SHARES - Ticker Symbol: FBLVX
Period ended (Unaudited) $13.79 4.14%* $ 80 1.97%** (0.41%)** 2.03%** 2%
- ---------------------------------------------------------------------------------------------------
INVESTMENT C SHARES - Ticker
Symbol: FCLVX
Period ended (Unaudited) $13.80 4.19%* $ 1 1.81%** (0.24%)** 1.81%** 2%
- ---------------------------------------------------------------------------------------------------
(a) Reflects operations for the period from January 1, 2001 to July 31, 2001.
The Fund changed its fiscal year end to July 31.
(b) Reflects operations for the period from October 29, 2001 (date of
commencement of operations) to January 31, 2002.
* Not annualized.
** Annualized.
/\ During various periods, certain fees were voluntarily reduced. The ratios
shown do not include these voluntary fee reductions.
# Portfolio turnover is calculated on the basis of the Fund as a whole without
distinguishing between the classes of shares issued.
39
Information Filed With The Securities And Exchange Commission. Fifth Third Funds
is subject to the informational requirements of the Securities Exchange Act of
1934 and in accordance therewith file reports and other information with the
SEC. Reports, proxy and information statements, registration statements and
other information filed by Fifth Third Funds can be inspected and copied at the
public reference facilities of the SEC at 450 Fifth Street, N.W. Washington,
D.C. 20549. Copies of such filings may also be available at the following SEC
regional offices: 7 Tremont Street, Suite 600, Boston, MA 02108; 500 West
Madison Street, Suite 1400, Chicago, IL 60611-2511; and the Curtis Center, Suite
1005E, 601 Walnut Street, Philadelphia, PA 19106. Copies of such materials can
also be obtained by mail from the Public Reference Branch, Office of Consumer
Affairs and Information Services, SEC, Washington, D.C. 20549 at prescribed
rates.
VOTING INFORMATION
------------------
Proxies are being solicited from shareholders of the Large Cap Growth
Fund by the Trustees of Fifth Third Funds for the Special Meeting of
shareholders to be held on July 12, 2002, at the office Fifth Third Bank, 38
Fountain Square Plaza, Cincinnati, Ohio 45263 at 10:00 a.m., Eastern time, or at
such later time made necessary by adjournment. This Combined Prospectus/Proxy
Statement and the enclosed form of proxy are being mailed to shareholders on or
about May 30, 2002. The costs of the proxy materials and proxy solicitations
will be borne by Fifth Third Bank. A proxy may be revoked at any time at or
before the meeting by submitting to Fifth Third Funds a subsequently dated
proxy, delivering a written notice of revocation to Fifth Third Funds at 3435
Stelzer Road, Columbus, Ohio 43219 or as otherwise described in the
"Introduction" above. All properly executed proxies received in time for the
Meeting will be voted as specified in the proxy, or, if no specification is
made, FOR the proposal (set forth in item (1) of the Notice of Special Meeting
to implement the reorganization of the Large Cap Growth Fund by the transfer of
all of its assets to the Large Cap Core Fund, in exchange for Fifth Third
Institutional, Investment A, Investment B and Investment C Shares of the Large
Cap Core Fund and the assumption by the Large Cap Core Fund of all of the
liabilities of the Large Cap Growth Fund followed by the dissolution and
liquidation of the Large Cap Growth Fund and the distribution of Shares to the
shareholders of the Large Cap Growth Fund. All Large Cap Growth Fund
shareholders will receive Shares of the Fifth Third Class (Institutional,
Investment A, Investment B, or Investment C) that corresponds to the Class of
the Large Cap Growth Fund Shares that they hold (Institutional, Investment A,
Investment B, or Investment C, respectively). The Transaction contemplated by
the Plan of Reorganization will be consummated only if: (1) a quorum is present
(except as otherwise provided by law, to constitute a quorum for the transaction
of business at a shareholders' meeting, there must be present, in person or by
proxy, holders of a majority of the total number of shares of the Large Cap
Growth Fund then outstanding and entitled to vote at the meeting); (2) approved
by the affirmative vote of a majority of all votes attributable to the voting
securities of the Large Cap Growth Fund voting as a Fund, as described above;
and (3) the other closing conditions set forth in the Reorganization Plan are
satisfied. In the event the shareholders do not approve the reorganization, the
Trustees of Fifth Third Funds will consider possible alternative arrangements in
the best interests of Fifth Third Funds and its shareholders.
Proxies are being solicited by mail. Shareholders of record of the
Large Cap Growth Fund at the close of business on April 26, 2002, (the "Record
Date"), will be entitled to vote at the Special Meeting of shareholders or any
adjournment thereof. Each Share is entitled to one vote as of the close of
business on April 26, 2002. The holders of a majority of votes attributable to
the outstanding voting Shares of a Fifth Third Fund represented in person or by
proxy at the meeting will constitute a quorum for such Fund for the meeting, and
a majority of the Shares of a Fifth Third Fund voted on the Transaction is
necessary to approve the Transaction.
As of April 26, 2002, there were outstanding the following amount of
Shares of Institutional, Investment A, Investment B and Investment C Class of
the Large Cap Growth Fund:
Investment A Shares:
Investment B Shares:
Investment C Shares:
Institutional Shares:
40
Votes cast by proxy, telephone, the Internet or in person at the
meeting will be counted by the inspector of election appointed by Fifth Third
Funds. The inspector of election will count the total number of votes cast "for"
approval of the proposal for purposes of determining whether sufficient
affirmative votes have been cast. The inspector of election will count Shares
represented by proxies that reflect abstentions as Shares that are present and
entitled to vote on the matter for purposes of determining the presence of a
quorum; however, the inspector of election will not count "broker non-votes"
(i.e., Shares held by brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or the persons entitled to vote and
(ii) the broker or nominee does not have the discretionary voting power on a
particular matter) as Shares that are present and entitled to vote on the matter
for purposes of determining the presence of a quorum. For purposes of
determining whether an issue has been approved, abstentions have the effect of a
negative vote on the proposal, and broker non-votes are treated as "against"
votes in those instances where approval of an issue requires a certain
percentage of all votes outstanding, but are given no effect in those instances
where approval of an issue requires a certain percentage of the votes
constituting the quorum for such issue.
Fifth Third Funds' Trustees know of no matters other than those set
forth herein to be brought before the meeting. If, however, any other matters
properly come before the meeting, it is the Trustees' intention that proxies
will be voted on such matters in accordance with the judgment of the persons
named in the enclosed form of proxy.
As of April 26, 2002, the officers and Trustees of Fifth Third Funds as
a group beneficially owned less than 1% of the outstanding Shares of
Institutional, Investment A, Investment B and Investment C Shares of any of the
Fifth Third Funds [CONFIRM]. The information in the following table shows, to
the best of the knowledge of Fifth Third Funds, the shareholders who owned of
record or beneficially 5% or more of the indicated Fund and Class. The table
also shows, as far as practicable, the percentage of record and beneficial
ownership of these same shareholders upon consummation of the Transaction
calculated on the basis of holdings as of the April 26, 2002 record date. Those
shareholders who beneficially own 25% or more of the outstanding Shares of a
Fund may be deemed to be controlling persons of that Fund under the 1940 Act. In
this context, "control" shall mean (1) the beneficial ownership, either directly
or through one or more controlled companies of more than 25% of the voting
securities of a company; (2) the acknowledgement or assertion by either the
controlled or controlling party of the existence of control; or (3) an
adjudication under ss.2(a)(9)of the 1940 Act which has become final, that
control exists.
Approximate Approximate
Percent of Percent of Percent of
Percent of Beneficial Record Beneficial
Record Ownership Ownership Ownership
Ownership as of Upon Upon
Name and Address as of 4/26/2002 4/26/2002 Consummation Consummation
- ---------------- --------------- --------- ------------ ------------
FIFTH THIRD
LARGE CAP CORE FUND
FIFTH THIRD
LARGE CAP GROWTH FUND
[Please confirm that 5% or more of any class will not be held subject to any
voting trust or similar agreement.]
41
Fifth Third Funds has been advised that, with respect to the shares of the Large
Cap Growth Fund over which Fifth Third Bank and its affiliates have voting
power, such shares will be either (i) voted by an independent fiduciary, or (ii)
voted by Fifth Third Bank and its affiliates in the same proportion as those
shares over which it does not have voting power.
THE BOARD OF TRUSTEES OF FIFTH THIRD FUNDS, INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMEND APPROVAL OF THE REORGANIZATION PLAN.
42
APPENDIX A
FIFTH THIRD FUNDS
Fifth Third Large Cap Growth Fund and
Fifth Third Large Cap Value Fund
PLAN OF REORGANIZATION
----------------------
This Plan of Reorganization having been approved by the Board of
Trustees of Fifth Third Funds is made as of , 2002, by Fifth Third Funds, on
behalf of the Fifth Third Large Cap Growth Fund and the Fifth Third Large Cap
Value Fund (the "Plan"). The capitalized terms used herein shall have the
meaning ascribed to them in this Plan.
Overview of Plan of Reorganization
(a) The Fifth Third Large Cap Growth Fund ("Large Cap Growth Fund")
will sell, assign, convey, transfer and deliver to the Fifth Third Large Cap
Value Fund ("Large Cap Value Fund"), and Large Cap Value Fund will acquire, on
the Exchange Date, all of the properties and assets existing at the Valuation
Time in the Large Cap Growth Fund.
In consideration therefor, Large Cap Value Fund shall, on the Exchange
Date, assume all of the liabilities of Large Cap Growth Fund and transfer to
Large Cap Growth Fund a number of full and fractional units of beneficial
interest ("Shares") such Shares being Institutional, Investment A, Investment B
and Investment C Shares of Large Cap Value having an aggregate net asset value
equal to the value of the assets of Large Cap Growth transferred to Large Cap
Value on such date less the value of all of the liabilities of Large Cap Growth
assumed by Large Cap Value on that date. It is intended that the reorganization
described in this Plan shall be a tax-free reorganization under the Internal
Revenue Code of 1986, as amended (the "Code").
(b) Upon consummation of the transaction described in paragraph (a) of
this Plan, Large Cap Growth in complete liquidation shall distribute to its
respective shareholders of record as of the Exchange Date the Large Cap Value
Shares received by it, each shareholder being entitled to receive that number of
such Large Cap Value Shares equal to the proportion which the number of Shares
of Large Cap Growth held by such shareholder bears to the number of such Shares
of Large Cap Growth outstanding on such date. Large Cap Growth shareholders of
record holding Institutional, Investment A, Investment B or Investment C Shares
will receive Institutional, Investment A, Investment B or Investment C Shares,
respectively, of Large Cap Value.
Factual Basis of the Plan
1. Representations and Warranties of Fifth Third Funds Each of Fifth
Third Funds, Large Cap Growth and Large Cap Value jointly and severally
represents and warrants that:
(a) Fifth Third Funds is a business trust duly established and validly
existing under the laws of The Commonwealth of Massachusetts and has power to
carry on its business as it is now being conducted and to carry out this Plan.
Each of Fifth Third Funds, Large Cap Growth and Large Cap Value is not required
to qualify as a foreign association in any jurisdiction. Each of Fifth Third
Funds, Large Cap Growth and Large Cap Value has all necessary federal, state and
local authorizations to own all of its properties and assets and to carry on
business as now being conducted and to fulfill the terms of this Plan, except as
set forth in Section 1(i).
(b) Fifth Third Funds is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
and such registration has not been revoked or rescinded and is in full force and
effect. Large Cap Growth and Large Cap Value have elected to qualify and have
qualified as regulated investment companies under Part I of Subchapter M of the
Code as of and since their first taxable
43
year, and the Large Cap Growth and Large Cap Value qualify and intend to
continue to qualify as regulated investment companies for the taxable year
ending upon their liquidation. Large Cap Growth and Large Cap Value have been
regulated investment companies under such Sections of the Code at all times
since their inception.
(c) The statements of assets and liabilities, statements of operations,
statements of changes in net assets and schedules of investments (indicating
their market values) for Large Cap Growth and Large Cap Value for the year ended
July 31, 2001, fairly present the financial position of Large Cap Growth and
Large Cap Value as of such date, and said statements of operations and changes
in net assets and financial highlights fairly reflect the results of operations,
changes in net assets and financial highlights for the periods covered thereby
in conformity with generally accepted accounting principles.
(d) The prospectuses of each of Large Cap Growth and Large Cap Value
dated October 29, 2001, as filed with the Securities and Exchange Commission
(the "Commission") (the "Prospectuses") and the Statement of Additional
Information for Fifth Third Funds, dated October 29, 2001 (the "Fifth Third
Statement of Additional Information") as filed with the Commission, did not as
of such date, and will not as of the Exchange Date, contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) There are no material legal, administrative or other proceedings
pending or, to the knowledge of Fifth Third Funds, Large Cap Growth or Large Cap
Value, overtly threatened against Fifth Third Funds, Large Cap Growth or Large
Cap Value, which assert liability on the part of Fifth Third Funds, Large Cap
Growth or Large Cap Value.
(f) There are no material contracts outstanding to which Fifth Third
Funds, Large Cap Growth or Large Cap Value is a party, other than as disclosed
in Fifth Third's Prospectuses and Statement of Additional Information or in the
Registration Statement.
(g) Large Cap Growth has no known liabilities of a material nature,
contingent or otherwise, other than those shown on its statement of assets and
liabilities as of July 31, 2001, referred to above and those incurred in the
ordinary course of the business of Fifth Third Funds as an investment company or
Large Cap Growth since such date. Prior to the Exchange Date, Large Cap Growth
will advise Large Cap Value of all known material liabilities, contingent or
otherwise, incurred by it subsequent to July 31, 2001, whether or not incurred
in the ordinary course of business.
(h) Fifth Third Funds and each of Large Cap Growth and Large Cap Value
has filed or will file all federal and other tax returns which, to the knowledge
of Fifth Third Funds' officers, are required to be filed by Fifth Third Funds
and each of Large Cap Growth and Large Cap Value and has paid or will pay all
federal and other taxes shown to be due on said returns or on any assessments
received by Large Cap Growth and Large Cap Value. To the best of such officers'
knowledge, all tax liabilities of each of Large Cap Growth and Large Cap Value
have been adequately provided for on its books, and no tax deficiency or
liability of Large Cap Growth and Large Cap Value has been asserted, and no
question with respect thereto has been raised, by the Internal Revenue Service
or by any state or local tax authority for taxes in excess of those already
paid.
(i) No consent, approval, authorization or order of any governmental
authority is required for the consummation by Fifth Third Funds, Large Cap
Growth or Large Cap Value of the transaction contemplated by this Plan, except
such as may be required under the 1933 Act, the 1934 Act, the 1940 Act, state
securities or Blue Sky laws or the H-S-R Act.
(j) As of both the Valuation Time and the Exchange Date and otherwise
as described in Section 1(i), Fifth Third Funds on behalf of Large Cap Value
will have full right, power and authority to purchase the
44
Investments and any other assets and assume the liabilities of Large Cap Growth
to be transferred to Large Cap Value pursuant to this Plan.
(k) The Registration Statement, the Prospectuses and the Proxy
Statement, on the effective date of the Registration Statement and insofar as
they relate to Fifth Third Funds, Large Cap Growth and Large Cap Value: (i) will
comply in all material respects with the provisions of the 1933 Act, the 1934
Act and the 1940 Act and the rules and regulations thereunder and (ii) will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading; and at the
time of the shareholders' meeting referred to in Section 8(a) and at the
Exchange Date, the Prospectuses, as amended or supplemented by any amendments or
supplements filed with the Commission by Fifth Third Funds, Large Cap Growth or
Large Cap Value, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading; provided, however, that none of the representations and
warranties in this subsection shall apply to statements in or omissions from the
Registration Statement, the Prospectuses or the Proxy Statement made in reliance
upon and in conformity with information furnished by Large Cap Growth or Large
Cap Value for use in the Registration Statement, the Prospectuses or the Proxy
Statement.
(l) Large Cap Value Shares to be issued to Large Cap Growth have been
duly authorized and, when issued and delivered pursuant to this Plan and the
Prospectuses, will be legally and validly issued and will be fully paid and
nonassessable by Fifth Third Funds and no shareholder of Fifth Third Funds will
have any preemptive right of subscription or purchase in respect thereof.
(m) The issuance of Large Cap Value Shares pursuant to this Plan will
be in compliance with all applicable federal and state securities laws.
Specifics of Plan
2. Reorganization. (a) Subject to the requisite approval of the
shareholders of Large Cap Growth and to the other terms and conditions contained
herein (including Large Cap Growth's obligation to distribute to its respective
shareholders all of its investment company taxable income and net capital gain
as described in Section 8(j) hereof), Large Cap Growth agrees to sell, assign,
convey, transfer and deliver to Large Cap Value, and Large Cap Value agrees to
acquire from Large Cap Growth, on the Exchange Date all of the Investments and
all of the cash and other assets of Large Cap Growth in exchange for that number
of Shares of Large Cap Value provided for in Section 3 and the assumption by
Large Cap Value of all of the liabilities of Large Cap Growth. Pursuant to this
Plan, Large Cap Growth will, as soon as practicable after the Exchange Date,
distribute in liquidation all of the Large Cap Value Shares received by it to
its shareholders in exchange for their Shares of Large Cap Growth.
(b) Fifth Third Funds, on behalf of Large Cap Growth, will pay or cause
to be paid to Large Cap Value any interest and cash dividends received by it on
or after the Exchange Date with respect to the Investments transferred to Large
Cap Value hereunder. Fifth Third Funds, on behalf of Large Cap Growth, will
transfer to Large Cap Value any rights, stock dividends or other securities
received by Large Cap Growth after the Exchange Date as stock dividends or other
distributions on or with respect to the Investments transferred, which rights,
stock dividends and other securities shall be deemed included in the assets
transferred to Large Cap Value at the Exchange Date and shall not be separately
valued, in which case any such distribution that remains unpaid as of the
Exchange Date shall be included in the determination of the value of the assets
of Large Cap Growth acquired by Large Cap Value.
3. Exchange Date; Valuation Time. On the Exchange Date, Large Cap Value
will deliver to Large Cap Growth a number of Large Cap Value Shares having an
aggregate net asset value equal to the value of the assets attributable to each
corresponding class of Shares of Large Cap Growth acquired by Large Cap
45
Value, less the value of the liabilities of Large Cap Growth assumed, determined
as hereafter provided in this Section 3.
(a) Subject to Section 3(d) hereof, the value of Large Cap Growth's net
assets will be computed as of the Valuation Time using the valuation procedures
for Large Cap Value set forth in the Fifth Third Prospectuses and Fifth Third
Statement of Additional Information. In no event shall the same security held by
both Large Cap Growth and Fifth Third Funds be valued at different prices.
(b) Subject to Section 3(d) hereof, the net asset value of a Share of
Large Cap Value will be determined to the nearest full cent as of the Valuation
Time, using the valuation procedures set forth in the Fifth Third Prospectuses
for Large Cap Value.
(c) Subject to Section 3(d), the Valuation Time shall be 4:00 p.m.
Eastern Standard time on July 19, 2001, or such earlier or later days as may be
established by the proper officers of Fifth Third Funds (the "Valuation Time").
(d) No formula will be used to adjust the net asset value of Large Cap
Growth or Large Cap Value to take into account differences in realized and
unrealized gains and losses.
(e) Large Cap Value shall issue its Shares to Large Cap Growth on one
share deposit receipt registered in the name of Large Cap Growth. Large Cap
Growth shall distribute in liquidation the Large Cap Value Shares received by it
hereunder pro rata to its shareholders by redelivering such share deposit
receipt to Fifth Third Funds' transfer agent which will as soon as practicable
set up open accounts for Large Cap Growth shareholder, in accordance with
written instructions furnished by Large Cap Growth.
(f) Large Cap Value shall assume all liabilities of Large Cap Growth,
whether accrued or contingent, in connection with the acquisition of assets and
subsequent dissolution of Large Cap Growth or otherwise, except that recourse
for assumed liabilities relating to Large Cap Growth will be limited to Large
Cap Value.
4. Expenses, Fees, etc. (a) All fees and expenses incurred by Large Cap
Growth and/or Large Cap Value as a direct result of the transaction contemplated
by this Plan, will be borne by Fifth Third Bank, including the costs of proxy
materials, proxy solicitations and legal expenses. Fees and expenses not
incurred directly in connection with the consummation of the Transaction will be
paid by the party directly incurring such expenses.
(b) Notwithstanding any other provisions of this Plan, if for any
reason the transaction contemplated by this Plan is not consummated, no party
shall be liable to the other party for any damages resulting therefrom,
including without limitation consequential damages.
5. Permitted Assets. Fifth Third Funds and Large Cap Growth agree to
review the assets of Large Cap Growth to ensure that at any time prior to the
Exchange Date the assets of Large Cap Growth do not include any assets that
Large Cap Value is not permitted, or reasonably believes to be unsuitable for
it, to acquire, including without limitation any security that, prior to its
acquisition by Large Cap Growth, is unsuitable for Large Cap Value to acquire.
6. Exchange Date. Delivery of the assets of Large Cap Growth to be
transferred, assumption of the liabilities of Large Cap Growth to be assumed,
and the delivery of Large Cap Value Shares to be issued shall be made at the
offices of Fifth Third Funds, 3435 Stelzer Road, Columbus, Ohio 43219, at 10:00
a.m. Eastern standard time on July 22, 2002 or at such other times and dates
established by the proper officers of Fifth Third Funds, the date and time upon
which such delivery is to take place being referred to herein as the "Exchange
Date."
46
7. Special Meeting of Shareholders; Dissolution. (a) Large Cap Growth
agrees to call a special meeting of the shareholders as soon as is practicable
after the effective date of the Registration Statement for the purpose of
considering the sale of all of the assets of Large Cap Growth to and the
assumption of all of the liabilities of Large Cap Growth by Large Cap Value as
herein provided, approving this Plan, and authorizing the liquidation and
dissolution of Large Cap Growth, and it shall be a condition to the obligations
of each of the parties hereto that the holders of the Shares of Large Cap Growth
shall have approved this Plan and the transaction contemplated herein in the
manner required by law and Fifth Third Funds' Declaration of Trust and Bylaws at
such a meeting on or before the Valuation Time.
(b) Large Cap Growth agrees that the liquidation of it will be effected
in the manner provided in Fifth Third Funds' Declaration of Trust and Bylaws in
accordance with applicable law, that it will not make any distributions of any
Large Cap Value Shares to the shareholders of Large Cap Growth without first
paying or adequately providing for the payment of all of Large Cap Growth's
known debts, obligations and liabilities.
8. Conditions to Be Met Regarding the Transaction. The intention of
Fifth Third Funds shall be subject to the following conditions:
(a) This Plan shall have been adopted and the transaction contemplated
hereby, including the liquidation of Large Cap Growth, shall have been approved
by the shareholders of Large Cap Growth in the manner required by law.
(b) Large Cap Growth shall have furnished to Large Cap Value a
statement of Large Cap Growth's assets and liabilities, with values determined
as provided in Section 3 of this Plan, together with a list of Investments with
their respective tax costs, all as of the Valuation Time, certified on Large Cap
Growth's behalf by its President (or any Vice President) and Treasurer, and a
certificate of both such officers, dated the Exchange Date, to the effect that
as of the Valuation Time and as of the Exchange Date there has been no material
adverse change in the financial position of Large Cap Growth since July 31,
2001, other than changes in the Investments since that date or changes in the
market value of the Investments, or changes due to net redemptions of Shares of
Large Cap Growth, dividends paid or losses from operations.
(c) As of the Valuation Time and as of the Exchange Date, all
representations and warranties of Large Cap Growth made in this Plan are true
and correct in all material respects as if made at and as of such dates, Large
Cap Growth has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to each of such dates, and
Large Cap Growth shall have furnished to Large Cap Value a statement, dated the
Exchange Date, signed by Fifth Third Funds' President (or any Vice President)
and Treasurer certifying those facts as of such dates.
(d) There shall not be any material litigation pending with respect to
the matters contemplated by this Plan.
(e) Fifth Third Funds shall have received an opinion of Ropes & Gray
dated the Exchange Date to the effect that: (i) Fifth Third Funds is a business
trust duly established and validly existing under the laws of the Commonwealth
of Massachusetts, and neither Fifth Third Funds, Large Cap Growth, nor Large Cap
Value is, to the knowledge of such counsel, required to qualify to do business
as a foreign association in any jurisdiction; (ii) Fifth Third Funds and Large
Cap Growth have power to sell, assign, convey, transfer and deliver the
Investments and other assets contemplated hereby and, upon consummation of the
transaction contemplated hereby in accordance with the terms of this Plan, Fifth
Third Funds and Large Cap Growth will have duly sold, assigned, conveyed,
transferred and delivered such Investments and other assets to Large Cap Value;
(iii) the adoption of this Plan did not, and the consummation of the transaction
contemplated hereby will not, violate Fifth Third Funds' Declaration of Trust or
Bylaws, as amended, or any provision of any agreement known to such counsel to
which Fifth Third Funds is a party or by which it is bound; (iv) no consent,
approval, authorization or order of any court or governmental authority is
required for the consummation by Fifth Third Funds of the transaction
47
contemplated hereby, except such as have been obtained under the Securities Act
of 1933 (the "1933 Act"), the Securities Exchange Act of 1934 ("the 1934 Act")
and the 1940 Act; (v) this Plan has been duly authorized, executed and delivered
by Fifth Third Funds and is a valid and binding obligation of Fifth Third Funds;
and (vi) the Shares of Large Cap Value to be delivered to Large Cap Growth as
provided for by this Plan are duly authorized and upon such delivery will be
validly issued and will be fully paid and nonassessable by Fifth Third Funds and
no shareholder of Fifth Third Funds has any preemptive right to subscription or
purchase in respect thereof.
(f) Fifth Third Funds shall have received an opinion of Ropes & Gray
addressed to Fifth Third Funds and dated the Exchange Date to the effect that,
on the basis of the existing provisions of the Code, current administrative
rules and court decisions, for Federal income tax purposes: (i) the transaction
will constitute a reorganization within the meaning of Section 368(a) of the
Code, and Large Cap Value and Large Cap Growth will each be a "party to a
reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain
or loss will be recognized by Large Cap Value upon the receipt of the assets of
Large Cap Growth in exchange for Large Cap Value Shares and the assumption by
Large Cap Value of the liabilities of Large Cap Growth; (iii) the basis in the
hands of Large Cap Value of the assets of Large Cap Growth transferred to Large
Cap Value in the transaction will be the same as the basis of such assets in the
hands of Large Cap Growth immediately prior to the transfer; (iv) the holding
periods of the assets of Large Cap Growth in the hands of Large Cap Value will
include the periods during which such assets were held by Large Cap Growth; (v)
no gain or loss will be recognized by Large Cap Growth upon the transfer of
Large Cap Growth's assets to Large Cap Value in exchange for Large Cap Value
Shares and the assumption by Large Cap Value of the liabilities of Large Cap
Growth, or upon the distribution of Large Cap Value Shares by Large Cap Growth
to its shareholders in liquidation; (vi) no gain or loss will be recognized by
Large Cap Growth shareholders upon the exchange of their Large Cap Growth Shares
for Large Cap Value Shares; (vii) the aggregate basis of Large Cap Value Shares
a Large Cap Growth shareholder receives in connection with the transaction will
be the same as the aggregate basis of his or her Large Cap Growth Shares
exchanged therefor; (viii) a Large Cap Growth shareholder's holding period for
his or her Large Cap Growth Shares will be determined by including the period
for which he or she held the Large Cap Growth Shares exchanged therefor,
provided that he or she held such Large Cap Growth Shares as capital assets; and
(ix) Large Cap Value will succeed to and take into account the items of Large
Cap Growth described in Section 381(c) of the Code. Large Cap Value will take
these items into account subject to the conditions and limitations specified in
Sections 381, 382, 383 and 384 of the Code and the Regulations thereunder.
(g) The assets of Large Cap Growth to be acquired by Large Cap Value
will include no assets which Large Cap Value, by reason of limitations contained
in its Declaration of Trust or of investment restrictions disclosed in Fifth
Third Prospectuses in effect on the Exchange Date, may not properly acquire.
Fifth Third Funds shall not change Fifth Third Funds' Declaration of Trust and
Fifth Third Prospectuses so as to restrict permitted investments for Large Cap
Value except as required by the Commission or any state regulatory authority.
(h) The Registration Statement shall have become effective under the
1933 Act and applicable Blue Sky provisions, and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge of Fifth Third
Funds, contemplated by the Commission and or any state regulatory authority.
(i) Fifth Third Funds shall have received from the Commission such
order or orders as Ropes & Gray deems reasonably necessary or desirable under
the 1933 Act, the 1934 Act, the 1940 Act in connection with the transaction
contemplated hereby, and that all such orders shall be in full force and effect.
(j) Prior to the Exchange Date, Large Cap Growth and Large Cap Value
shall have declared a dividend or dividends which, together with all previous
such dividends, shall have the effect of distributing to each of its
shareholders all of its investment company taxable income for its taxable years
ending on or after July 31, 2001, and on or prior to the Exchange Date (computed
without regard to any deduction for dividends paid), and all of
48
its net capital gain realized in each of its taxable years ending on or after
July 31, 2001 and on or prior to the Exchange Date (after reduction for any
capital loss carryover).
(k) Large Cap Growth shall have furnished to Large Cap Value a
certificate, signed by the President (or any Vice President) and the Treasurer
of Fifth Third Funds, as to the tax cost to Large Cap Growth of the securities
delivered to Large Cap Value pursuant to this Plan, together with any such other
evidence as to such tax cost as Large Cap Value may reasonably request.
(l) Fifth Third Funds shall have received from the custodian of Fifth
Third Funds a certificate identifying all of the assets of Large Cap Growth held
by such custodian as of the Valuation Time.
(m) The transfer agent of Fifth Third Funds shall have provided to
Fifth Third Funds (i) a record specifying the number of Shares of Large Cap
Growth outstanding as of the Valuation Time and (iii) a record specifying the
name and address of each holder of record of any such Shares of Large Cap Growth
and the number of Large Cap Growth Shares held of record by each such
shareholder as of the Valuation Time. Large Cap Growth's transfer agent shall
also have provided Fifth Third Funds with a certificate confirming that the acts
specified in the preceding sentence have been taken and that the information so
supplied is complete and accurate to the best knowledge of the transfer agent.
(n) Fifth Third Funds, on behalf of Large Cap Value, shall have
executed and delivered an Assumption of Liabilities dated as of the Exchange
Date pursuant to which Large Cap Value will assume all of the liabilities of
Large Cap Growth existing at the Valuation Time in connection with the
transaction contemplated by this Plan.
(o) Fifth Third Funds, on behalf of Large Cap Growth, shall have
executed and delivered an instrument of transfer ("Transfer Document") and any
other certificates or documents Fifth Third Funds may deem necessary or
desirable to transfer Large Cap Growth's entire right, title and interest in and
to the Investments and all other assets of Large Cap Growth.
9. No Broker, etc. There is no person who has dealt with Fifth Third
Funds, Large Cap Growth or Large Cap Value who by reason of such dealings is
entitled to any broker's or finder's or other similar fee or commission arising
out of the transaction contemplated by this Plan.
10. Termination. Fifth Third Funds may, by consent of its Trustees,
terminate this Plan, and Fifth Third Funds, after consultation with counsel, may
modify this Plan in any manner deemed necessary or desirable.
11. Covenants, etc. Deemed Material. All covenants, agreements,
representations and warranties made under this Plan and any certificates
delivered pursuant to this Plan shall be deemed to have been material and relied
upon by each of the parties, notwithstanding any investigation made by them or
on their behalf.
12. Sole Plan; Amendments. This Plan supersedes all previous
correspondence and oral communications between the parties regarding the subject
matter hereof, constitutes the only understanding with respect to such subject
matter, may not be changed except by a letter of agreement signed by each party
hereto, and shall be construed in accordance with and governed by the laws of
The Commonwealth of Massachusetts.
13. Rule 145. Pursuant to Rule 145 under the 1933 Act, Fifth Third
Funds will, in connection with the issuance of any Shares of the Large Cap Value
Fund to any person who at the time of the transaction contemplated hereby is
deemed to be an affiliate of a party to the transaction pursuant to Rule 145(c),
cause to be affixed upon the certificates issued to such person (if any) a
legend as follows:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT TO FIFTH THIRD
49
FUNDS OR ITS PRINCIPAL UNDERWRITER UNLESS (i) A REGISTRATION STATEMENT WITH
RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(ii) IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO FIFTH THIRD FUNDS SUCH
REGISTRATION IS NOT REQUIRED.
and, further, Fifth Third Funds will issue stop transfer instructions to Fifth
Third Funds' transfer agent with respect to such Large Cap Value Shares.
14. Fifth Third Funds' Declaration of Trust Fifth Third Funds is a
business trust organized under Massachusetts law and under a Declaration of
Trust, to which reference is hereby made and a copy of which is on file at the
office of the Secretary of The Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "Fifth Third Funds" entered into in the name or on
behalf thereof by any of the Trustees, officers, employees or agents are made
not individually, but in such capacities, and are not binding upon any of the
Trustees, officers, employees, agents or shareholders of Fifth Third Funds
personally, but bind only the assets of Fifth Third Funds and all persons
dealing with any series or funds of Fifth Third Funds, such as Large Cap Value,
must look solely to the assets of Fifth Third Funds belonging to such series or
funds for the enforcement of any claims against Fifth Third Funds.
AS ADOPTED ON , 2002
---------------------
50
FIFTH THIRD FUNDS
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information contains information which may be
of interest to investors but which is not included in the Combined
Prospectus/Proxy Statement (the "Prospectus") of Fifth Third Funds dated May 30,
2002 relating to the transfer of assets from the Fifth Third Large Cap Growth
Fund to the Fifth Third Large Cap Core Fund.
The Statement of Additional Information for the Large Cap Growth Fund and
the Large Cap Core Fund* dated October 29, 2001 and the Semi-Annual Report for
each Fund for the period ended January 31, 2002 have been filed with the
Securities and Exchange Commission and are incorporated herein by reference.
This Statement of Additional Information is not a prospectus and is authorized
for distribution only when it accompanies or follows delivery of the Prospectus.
This Statement of Additional Information should be read in conjunction with the
Prospectus. A copy of the May 30, 2002 Prospectus may be obtained, without
charge, by writing Fifth Third Funds, 3435 Stelzer Road, Columbus, OH 43219 or
by calling 1-800-799-5353.
Unless otherwise indicated, capitalized terms used herein and not otherwise
defined have the same meanings as are given to them in the Combined
Prospectus/Proxy Statement. The audited financial statements and related
independent accountants' report for the Funds contained in the Semi-Annual
Report dated January 31, 2002, are hereby incorporated herein by reference. No
other parts of the Annual Reports are incorporated by reference herein.
The date of this Statement of Additional Information is May 30, 2002.
* Currently named the Large Cap Value Fund, to be renamed the Large Cap
Core Fund effective July 22, 2002. Thus, performance information contained in
the Statement of Additional Information dated October 29, 2001 and the
Semi-Annual Report is that of the Fifth Third Large Cap Value Fund which invests
in value oriented stocks primarily and does not include a significant growth
oriented stock component.
B-1
TABLE OF CONTENTS
Additional Investment Strategies and Risks of the
Large Cap Core Fund and the Large Cap Growth Fund ..........................B-3
Financial Statements of the Large Cap Core Fund and the Large Cap Growth
Fund on a pro forma basis as of and for the periods ended July 31, 2001
(audited) and January 31, 2002 (unaudited) .................................B-7
B-2
Additional Information About the Funds' Investments
Investment Practices
The Large Cap Core Fund and the Large Cap Growth Fund invest in a variety of
securities and employ a number of investment techniques. Each security and
technique involves certain risks. The following table describes the securities
and techniques the Funds use, as well as the main risks they pose. Equity
securities are subject mainly to market risk. Fixed income securities are
primarily influenced by market, credit and prepayment risks, although certain
securities may be subject to additional risks. Following the table is a more
complete discussion of risk. You may also consult the Fifth Third Statement of
Additional Information dated October 29, 2001 for additional details regarding
these and other permissible investments.
INSTRUMENT RISK TYPE
---------- ---------
American Depositary Receipts (ADRs): ADRs are foreign shares of a Market
company held by a U.S. bank that issues a receipt evidencing Political
ownership. Foreign Investment
Bonds: Interest-bearing or discounted securities that obligate the issuer Market
to pay the bondholder a specified sum of money, usually at specific Credit
intervals, and to repay the principal amount of the loan at maturity. Interest Rate
Political
Call and Put Options: A call option gives the buyer the right to buy, Management
and obligates the seller of the option to sell, a security at a specified Liquidity
price. A put option gives the buyer the right to sell, and obligates the Credit
seller of the option to buy a security at a specified price. Market
Leverage
Certificates of Deposit: Negotiable instruments with a stated Market
maturity. Credit
Liquidity
Interest Rate
Commercial Paper: Secured and unsecured short-term promissory Credit
notes issued by corporations and other entities. Maturities generally Liquidity
vary from a few days to nine months. Market
Interest Rate
Common Stock: Shares of ownership of a company. Market
Convertible Securities: Bonds or preferred stock that convert to Market
common stock. Credit
Derivatives: Instruments whose value is derived from an underlying Management
contract, index or security, or any combination thereof, including Market
futures, options (e.g., put and calls), options on futures, swap Credit
agreements, and some mortgage-backed securities. Liquidity
Leverage
Interest Rate
Foreign Securities: Stocks issued by foreign companies, as well as Market
commercial paper of foreign issuers and obligations of foreign banks, Political
overseas branches of U.S. banks and supranational entities. Liquidity
Foreign Investment
B-3
Forward Commitments: A purchase of, or contract to purchase, securities at a fixed price for Leverage
delivery at a future date. Liquidity
Futures and Related Options: A contract providing for the future Management
sale and purchase of a specified amount of a specified security, class Market
of securities, or an index at a specified time in the future and at a Credit
specified price. Liquidity
Leverage
Illiquid Securities: Securities which may be difficult to sell at an Liquidity
acceptable price. Market
Investment Company Securities: Shares of investment companies. Market These
investment companies may include money market funds of Fifth Third Funds and
shares of other registered investment companies for which the Adviser to a Fund
or any of their affiliates serves as investment adviser, administrator or
distributor.
Investment Grade Bonds: Interest-bearing or discounted Market
government or corporate securities that obligate the issuer to pay the Credit
bondholder a specified sum of money, usually at specific intervals,
and to repay the principal amount of the loan at maturity. Investment grade
bonds are those rated BBB or better by S&P or Baa or better by Moody's or
similarly rated by other nationally recognized statistical rating organizations,
or, if not rated, determined to be of comparable quality by the Advisor.
Money Market Instruments: Investment-grade, U.S. dollar denominated debt Market
securities that have remaining maturities of one year or less. These securities may Credit
include U.S. government obligations, commercial paper and other short-term
corporate obligations, repurchase agreements collateralized with U.S.
government securities, certificates of deposit, bankers' acceptances, and other
financial institution obligations. These securities may carry fixed or variable
interest rates.
Repurchase Agreements: The purchase of a security and the simultaneous Market
commitment to return the security to the seller at an agreed upon price on an Leverage
agreed upon date. This is treated as a loan.
Restricted Securities: Securities not registered under the Securities Act of 1933, Liquidity
such as privately placed commercial paper and Rule 144A securities. Market
Reverse Repurchase Agreement: The sale of a security and the simultaneous Market
commitment to buy the security back at an agreed upon price on an agreed Leverage
upon date. This is treated as a borrowing by a Fund.
Securities Lending: The lending of up to 33 1/3% of the Fund's total assets. In Market
return the Fund will receive cash, other securities, and/or letters of credit. Leverage
Liquidity
Credit
Short-Term Trading: The sale of a security soon after its purchase. A portfolio
Market engaging in such trading will have higher turnover and transaction
expenses.
Standard & Poor's Depositary Receipts ("SPDRs"): Ownership in a long-term unit
investment trust Market that holds a portfolio of common stocks designed to
track the price performance and dividend yield of an index, such as the S&P 500
Index. Index-based securities entitle a holder to receive proportionate
quarterly cash distributions corresponding to the dividends that accrue to the
index stocks in the underlying portfolio, less trust expenses.
B-4
Time Deposits: Non-negotiable receipts issued by a bank in exchange for Liquidity
the deposit of funds. Credit
Market
U.S. Government Agency Securities: Securities issued by agencies and Interest Rate
instrumentalities of the U.S. government. These include Ginnie Mae, Fannie Credit
Mae, and Freddie Mac.
U.S. Treasury Obligations: Bills, notes, bonds, separately traded registered Interest Rate
interest and principal securities, and coupons under bank entry safekeeping.
Warrants: Securities, typically issued with preferred stock or bonds, that give Market
the holder the right to buy a proportionate amount of common stock at a Credit
specified price.
When-Issued and Delayed Delivery Transactions: Purchase or contract to Market
purchase securities at a fixed price for delivery at a future date. Under normal Leverage
market conditions, when-issued purchases and forward commitments will Liquidity
not exceed 20% of the value of a Fund's total assets. Credit
Yankee Bonds and Similar Debt Obligations: U.S. dollar denominated Market
bonds issued by foreign corporations or governments. Sovereign bonds are Credit
those issued by the government of a foreign country. Supranational bonds Interest Rate
are those issued by supranational entities, such as the World Bank and Political
European Investment Bank. Canadian bonds are those issued by Canadian Foreign Investment
provinces.
Investment Risks
Below is a more complete discussion of the types of risks inherent in the
securities and investment techniques listed above as well as those risks
discussed in "Principal Investment Risks." Because of these risks, the value of
the securities held by the Funds may fluctuate, as will the value of your
investment in the Funds. Certain investments and Funds are more susceptible to
these risks than others.
Credit Risk. The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation. Credit risk is generally higher for non-investment grade securities.
The price of a security can be adversely affected prior to actual default as its
credit status deteriorates and the probability of default rises.
Foreign Investment Risk. The risk associated with higher transaction costs,
delayed settlements, currency controls and adverse economic developments. This
also includes the risk that fluctuations in the exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment. Adverse
changes in exchange rates may erode or reverse any gains produced by foreign
currency denominated investments and may widen any losses. Exchange rate
volatility also may affect the ability of an issuer to repay U.S. dollar
denominated debt, thereby increasing credit risk. Foreign securities may also be
affected by incomplete or inaccurate financial information on companies, social
upheavals or political actions ranging from tax code changes to governmental
collapse. These risks are more significant in emerging markets.
Interest Rate Risk. The risk that debt prices overall will decline over short or
even long periods due to rising interest rates. A rise in interest rates
typically causes a fall in values, while a fall in rates typically causes a rise
in values. Interest rate risk should be modest for shorter-term securities,
moderate for intermediate-term securities, and high for longer-term securities.
Generally, an increase in the average maturity of the Fund will make it more
sensitive to interest rate risk. The market prices of securities structured as
zero coupon are generally affected to a greater extent by interest rate changes.
These securities tend to be more volatile than securities which pay interest
periodically.
Inverse Market Risk. The particular type of market risk (see summary below)
associated with "bear funds" that are intended to perform when equity markets
decline. These investments will lose value when the equity markets to which they
are tied are increasing in value.
Investment Style Risk. The risk that returns from a particular class or group of
stocks (e.g., value, growth, small cap, large cap) will trail returns from other
asset classes or the overall stock market. Groups or asset classes of stocks
tend to go through cycles of doing better--or worse--than common stocks in
general. These periods can last for periods as long as several years.
B-5
Additionally, a particular asset class or group of stocks could fall out of
favor with the market, causing the Fund to underperform funds that focus on
other types of stocks.
Leverage Risk. The risk associated with securities or practices that multiply
small index or market movements into large changes in value. Leverage is often
associated with investments in derivatives, but also may be embedded directly in
the characteristics of other securities.
Hedged. When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that the
Fund also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa.
Hedges are sometimes subject to imperfect matching between the derivative
and underlying security, and there can be no assurance that a Fund's
hedging transactions will be effective.
Speculative. To the extent that a derivative is not used as a hedge, the
Fund is directly exposed to the risks of that derivative. Gains or losses
from speculative positions in a derivative may be substantially greater
than the derivatives original cost.
Liquidity Risk. The risk that certain securities may be difficult or impossible
to sell at the time and the price that would normally prevail in the market. The
seller may have to lower the price, sell other securities instead or forego an
investment opportunity, any of which could have a negative effect on Fund
management or performance. This includes the risk of missing out on an
investment opportunity because the assets necessary to take advantage of it are
tied up in less advantageous investments.
Management Risk. The risk that a strategy used by a Fund's portfolio manager may
fail to produce the intended result. This includes the risk that changes in the
value of a hedging instrument will not match those of the asset being hedged.
Incomplete matching can result in unanticipated risks.
Market Risk. The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than the price originally paid for it, or less than it was worth
at an earlier time. Market risk may affect a single issuer, industrial sector of
the economy or the market as a whole. There is also the risk that the current
interest rate may not accurately reflect existing market rates. For fixed income
securities, market risk is largely, but not exclusively, influenced by changes
in interest rates. A rise in interest rates typically causes a fall in values,
while a fall in rates typically causes a rise in values. Finally, key
information about a security or market may be inaccurate or unavailable. This is
particularly relevant to investments in foreign securities.
Political Risk. The risk of losses attributable to unfavorable governmental or
political actions, seizure of foreign deposits, changes in tax or trade
statutes, and governmental collapse and war.
B-6
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 07/31/01
Kent Large Kent Growth Kent Large Kent Growth
Company and Income Pro Forma Company Growth and Pro Forma
Growth Fund Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stocks
- -----------------------------------------------------------------------------------------------------------------------------------
Advertising
- 30,900 30,900 Interpublic Group $ - $ 845,733 $ 845,733
6,200 - 6,200 Omnicom Group $ 541,694 $ - $ 541,694
----------- ----------- -----------
$ 541,694 $ 845,733 $ 1,387,427
- -----------------------------------------------------------------------------------------------------------------------------------
Aerospace & Defense
20,300 57,725 78,025 Boeing Co. $ 1,188,159 $ 3,378,644 $ 4,566,803
- 23,750 23,750 Lockheed Martin Corp. $ - $ 940,975 $ 940,975
- 18,250 18,250 Rockwell Collins (b) $ - $ 377,775 $ 377,775
----------- ----------- -----------
$ 1,188,159 $ 4,697,394 $ 5,885,553
- -----------------------------------------------------------------------------------------------------------------------------------
Apparel Manufacturers
- 8,200 8,200 V.F. Corp. $ - $ 300,202 $ 300,202
----------- ----------- -----------
$ - $ 300,202 $ 300,202
- -----------------------------------------------------------------------------------------------------------------------------------
Appliances & Household Products
- 4,600 4,600 Whirlpool Corp. $ - $ 324,484 $ 324,484
----------- ----------- -----------
$ - $ 324,484 $ 324,484
- -----------------------------------------------------------------------------------------------------------------------------------
Appliances & Software
179,500 294,000 473,500 Microsoft Corp. (b) $11,881,105 $19,459,860 $31,340,965
- 27,000 27,000 Parametric Technology $ - $ 255,690 $ 255,690
Corp. (b)
16,200 14,200 30,400 Siebel Systems, Inc. (b) $ 558,252 $ 489,332 $ 1,047,584
----------- ----------- -----------
$12,439,357 $20,204,882 $32,644,239
- -----------------------------------------------------------------------------------------------------------------------------------
Auto/Truck - Original Equipment
31,525 31,525 Delphi Automotive $ - $ 515,749 $ 515,749
Systems Corp.
6,350 6,350 TRW, Inc. $ - $ 280,988 $ 280,988
----------- ----------- -----------
$ - $ 796,737 $ 796,737
- -----------------------------------------------------------------------------------------------------------------------------------
Auto/Truck _ Replacement Equipment
22,650 22,650 Genuine Parts $ 745,638 $ 745,638
----------- ----------- -----------
$ - $ 745,638 $ 745,638
- -----------------------------------------------------------------------------------------------------------------------------------
Automotive
42,600 109,700 152,300 Ford Motor Co. $ 1,085,022 $ 2,794,059 $ 3,879,081
12,700 31,200 43,900 General Motors Corp. $ 807,720 $ 1,984,320 $ 2,792,040
----------- ----------- -----------
$ 1,892,742 $ 4,778,379 $ 6,671,121
- -----------------------------------------------------------------------------------------------------------------------------------
Banks - Major Regional
27,100 70,500 97,600 Bank One Corp. $ 1,049,041 $ 2,729,055 $ 3,778,096
- 12,500 12,500 Comerica, Inc. $ - $ 769,875 $ 769,875
- 30,562 30,562 Fifth Third Bancorp.** $ - $ 1,926,017 $ 1,926,017
22,800 53,000 75,800 First Union Corp. $ 807,120 $ 1,876,200 $ 2,683,320
25,200 63,675 88,875 FleetBoston Financial $ 945,504 $ 2,389,086 $ 3,334,590
Corp.
- 16,500 16,500 Huntington Bancshares $ - $ 302,115 $ 302,115
- 22,400 22,400 KeyCorp. $ - $ 599,200 $ 599,200
11,000 37,900 48,900 Mellon Financial Corp. $ 418,220 $ 1,440,958 $ 1,859,178
- 34,300 34,300 National City Corp. $ - $ 1,101,716 $ 1,101,716
9,600 18,000 27,600 Northern Trust Corp. $ 612,480 $ 1,148,400 $ 1,760,880
- 20,200 20,200 PNC Bank Corp. $ - $ 1,340,270 $ 1,340,270
13,400 21,900 35,300 State Street Corp. $ 720,518 $ 1,177,563 $ 1,898,081
- 13,400 13,400 SunTrust Banks, Inc. $ - $ 927,950 $ 927,950
44,300 105,200 149,500 U.S. Bancorp. $ 1,051,682 $ 2,497,448 $ 3,549,130
- 6,800 6,800 Union Planters Corp. $ - $ 303,892 $ 303,892
- 11,500 11,500 Wachovia Corp. $ - $ 817,650 $ 817,650
39,900 111,000 150,900 Wells Fargo Co. $ 1,837,794 $ 5,112,659 $ 6,950,453
----------- ----------- -----------
$ 7,442,359 $26,460,054 $33,902,413
- ------------------------------------------------------------------------------------------------------------------------------------
B-7
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 07/31/01
Kent Large Kent Growth Kent Large
Company and Income Pro Forma Company Growth Kent Growth and Pro Forma
Growth Fund Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- -----------------------------------------------------------------------------------------------------------------------------------
Banks - Money Center
37,300 90,100 127,400 Bank of America Corp. $ 2,373,026 $ 5,732,162 $ 8,105,188
27,600 50,700 Bank of New York., Inc. $ 1,238,136 $ 2,274,402 $ 3,512,538
- 23,900 23,900 BB&T Corp. $ - $ 882,149 $ 882,149
46,100 104,800 150,900 J.P. Morgan Chase & Co. $ 1,996,130 $ 4,537,840 $ 6,533,970
----------- ----------- -----------
$ 5,607,292 $13,426,553 $19,033,845
- -----------------------------------------------------------------------------------------------------------------------------------
Banks - South
- 18,000 18,000 SouthTrust Corp. $ - $ 462,060 $ 462,060
----------- ----------- -----------
$ - $ 462,060 $ 462,060
- -----------------------------------------------------------------------------------------------------------------------------------
Beverages - Alchoholic
- 6,000 6,000 Adolph Coors Co. $ - $ 301,740 $ 301,740
33,100 55,800 88,900 Anheuser-Busch Co., Inc. $ 1,433,561 $ 2,416,698 $ 3,850,259
----------- ----------- -----------
$ 1,433,561 $ 2,718,438 $ 4,151,999
- -----------------------------------------------------------------------------------------------------------------------------------
Beverages - Soft Drinks
83,700 137,300 221,000 Coca Cola Co. $ 3,733,020 $ 6,123,580 $ 9,856,600
49,500 84,300 133,800 PepsiCo, Inc. $ 2,308,185 $ 3,930,909 $ 6,239,094
----------- ----------- -----------
$ 6,041,205 $10,054,489 $16,095,694
- -----------------------------------------------------------------------------------------------------------------------------------
Broadcasting/Cable
13,600 32,600 46,200 Clear Channel Communications, Inc (b) $ 796,96 $ 1,910,360 $ 2,707,320
21,900 55,000 76,900 Comcast Corp., Special Class A (b) $ 832,857 $ 2,091,650 $ 2,924,507
----------- ----------- -----------
$ 1,629,817 $ 4,002,010 $ 5,631,827
- -----------------------------------------------------------------------------------------------------------------------------------
Building - Maintenance & Services
7,300 7,300 Ecolab, Inc. $ 292,292 $ 292,292
----------- ----------- -----------
$ - $ 292,292 $ 292,292
- -----------------------------------------------------------------------------------------------------------------------------------
Building Products - Retail/Wholesale
80,700 123,500 204,200 Home Depot, Inc. $ 4,064,859 $ 6,220,695 $10,285,554
19,400 41,000 60,400 Lowe's Cos., Inc. $ 740,692 $ 1,565,380 $ 2,306,072
----------- ----------- -----------
$ 4,805,551 $ 7,786,075 $12,591,626
- -----------------------------------------------------------------------------------------------------------------------------------
Building Products - Wood
- 15,425 15,425 Wayerhaeuser Co. $ - $ 921,335 $ 921,335
----------- ----------- -----------
$ - $ 921,335 $ 921,335
- -----------------------------------------------------------------------------------------------------------------------------------
Business Equipment & Services
13,900 - 13,900 Paychex, Inc. $ 546,270 $ - $ 546,270
----------- ----------- -----------
$ 546,270 $ - $ 546,270
- -----------------------------------------------------------------------------------------------------------------------------------
Chemicals - Diversified
20,800 53,600 74,400 Dow Chemical Co. $ 757,120 $ 1,951,040 $ 2,708,160
24,200 58,900 83,100 E.I. Du Pont de Nemours & Co. $ 1,036,244 $ 2,522,098 $ 3,558,342
----------- ----------- -----------
$ 1,793,364 $ 4,473,138 $ 6,266,502
- -----------------------------------------------------------------------------------------------------------------------------------
Chemicals - Specialty
- 15,400 15,400 Air Products & Chemical, Inc. $ - $ 628,782 $ 628,782
- 8,700 8,700 Eastman Chemical Co. $ - $ 381,756 $ 381,756
- 9,900 9,900 Praxair, Inc. $ - $ 448,866 $ 448,866
- 9,800 9,800 Sigma-Aldrich Corp. $ - $ 424,242 $ 424,242
----------- ----------- -----------
$ - $ 1,883,646 $ 1,883,646
- -----------------------------------------------------------------------------------------------------------------------------------
Circuits
11,100 15,600 26,700 Maxim Integrated Products, Inc. (b) $ 512,487 $ 720,252 $ 1,232,739
----------- ----------- -----------
$ 512,487 $ 720,252 $ 1,232,739
- -----------------------------------------------------------------------------------------------------------------------------------
Commercial Services
- 63,325 63,325 Cendant Corp. (b) $ - $ 1,288,664 $ 1,288,664
7,000 10,000 17,000 Convergys Corp. (b) $ 218,050 $ 311,500 $ 529,550
----------- ----------- -----------
$ 218,050 $ 1,600,164 $ 1,818,214
- -----------------------------------------------------------------------------------------------------------------------------------
Commercial Services - Finance
7,300 - 7,300 Concord EFS, Inc. (b) $ 418,874 $ - $ 418,874
B-8
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
AS of 07/31/01
Kent Large Kent Growth Kent Large
Company and Income Pro Forma Company Growth Kent Growth and Pro Forma
Growth Fund Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- -----------------------------------------------------------------------------------------------------------------------------------
- 6,400 6,400 H & R Block, Inc. $ - $ 456,768 $ 456,768
----------- ----------- -----------
$ 418,874 $ 456,768 $ 875,642
- -----------------------------------------------------------------------------------------------------------------------------------
Computer Software
12,300 13,700 26,000 Adobe Systems, Inc. $ 461,127 $ 513,613 $ 974,740
- 10,000 10,000 Autodesk, Inc. $ - $ 372,900 $ 372,900
- 46,500 46,500 Computer Associates Inter- $ - $ 1,603,320 $ 1,603,320
national, Inc.
179,600 298,500 478,100 Oracle Corp. (b) $ 3,247,168 $ 5,396,880 $ 8,644,048
----------- ----------- -----------
$ 3,708,295 $ 7,886,713 $11,595,008
- -----------------------------------------------------------------------------------------------------------------------------------
Computers
87,100 137,300 3,697,489 Dell Computer Corp. (b) $ 2,345,603 $ 3,697,489 $ 6,043,092
- 19,275 202,195 Gateway Inc. (b) $ - $ 202,195 $ 202,195
45,200 125,800 3,102,228 Hewlett-Packard Co. $ 1,114,632 $ 3,102,228 $ 4,216,860
59,000 100,000 10,521,000 IBM Corp. $ 6,207,390 $10,521,000 $16,728,390
116,500 174,300 2,839,347 Sun Microsystems, Inc. (b) $ 1,897,785 $ 2,839,347 $ 4,737,132
----------- ----------- -----------
$11,565,410 $20,362,259 $31,927,669
- -----------------------------------------------------------------------------------------------------------------------------------
Computers - Mainframe
20,000 20,000 Unisys Corp. (b) $ 229,000 $ 229,000
----------- ----------- -----------
$ - $ 229,000 $ 229,000
- -----------------------------------------------------------------------------------------------------------------------------------
Computers - Memory Devices
80,600 117,200 197,800 EMC Corp. $ 1,589,432 $ 2,311,184 $ 3,900,616
13,700 21,400 35,100 VERITAS Software Corp. (b) $ 581,017 $ 907,574 $ 1,488,591
----------- ----------- -----------
$ 2,170,449 $ 3,218,758 $ 5,389,207
- -----------------------------------------------------------------------------------------------------------------------------------
Computers - Micro
39,200 112,675 151,875 Compaq Computer Corp. $ 585,648 $ 1,683,365 $ 2,269,013
----------- ----------- -----------
$ 585,648 $ 1,683,365 $ 2,269,013
- -----------------------------------------------------------------------------------------------------------------------------------
Computers - Networking Products
244,900 387,000 631,900 Cisco Systems, Inc. (b) $ 4,706,978 $ 7,438,140 $12,145,118
- 17,750 17,750 Network Appliance, Inc. (b) $ - $ 221,520 $ 221,520
----------- ----------- -----------
$ 4,706,978 $ 7,659,660 $12,366,638
- -----------------------------------------------------------------------------------------------------------------------------------
Computer - Services
- 12,250 12,250 Computer Sciences Corp. (b) $ - $ 442,348 $ 442,348
10,900 32,050 42,950 Electronic Data Systems Corp. $ 695,965 $ 2,046,392 $ 2,742,357
9,100 27,345 36,445 First Data Corp. $ 630,812 $ 1,897,635 $ 2,528,447
----------- ----------- -----------
$ 1,326,777 $ 4,386,375 $ 5,713,152
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Durable
- 9,000 9,000 Danaher Corp. $ 509,310 $ 509,310
----------- ----------- -----------
$ - $ 509,310 $ 509,310
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Products
- 15,000 15,000 Fortune Brands, Inc. $ 549,300 $ 549,300
----------- ----------- -----------
$ - $ 549,300 $ 549,300
- -----------------------------------------------------------------------------------------------------------------------------------
Containers - Paper & Plastic
- 31,500 31,500 Pactiv Corp. (b) $ - $ 489,195 $ 489,195
----------- ----------- -----------
$ - $ 489,195 $ 489,195
- -----------------------------------------------------------------------------------------------------------------------------------
Cosmetics & Toiletries
- 10,375 10,375 Alberto-Culver Co., Class B $ - $ 450,068 $ 450,068
8,000 - 8,000 Avon Products, Inc. $ 371,120 $ - $ 371,120
36,100 39,812 75,912 Gillette Co. $ 1,006,107 $ 1,109,560 $ 2,115,667
18,000 38,100 56,100 Kimberly-Clark Corp. $ 1,094,580 $ 2,316,861 $ 3,411,441
----------- ----------- -----------
$ 2,471,807 $ 3,876,489 $ 6,348,296
- -----------------------------------------------------------------------------------------------------------------------------------
Cruise Lines
- 32,000 32,000 Carnival Corp. $ 1,068,800 $ 1,068,800
----------- ----------- -----------
$ - $ 1,068,800 $ 1,068,800
- -----------------------------------------------------------------------------------------------------------------------------------
Data Processing/Management
B-9
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 7/31/01
Kent Large Kent Large Kent
Company Kent Growth Pro Forma Company Growth Growth and Pro Forma
Growth Fund and Income Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
24,600 54,000 78,600 Automatic Data Processing, Inc. $ 1,253,370 $ 2,751,300 $ 4,004,670
------------ ------------ ------------
$ 1,253,370 $ 2,751,300 $ 4,004,670
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified
- 9,000 9,000 FMC Corp. (b) $ - $ 598,770 $ 598,770
315,200 539,000 854,200 General Electric Co. $ 13,711,200 $ 23,446,499 $ 37,157,699
13,400 -- 13,400 IMS Health, Inc. $ 344,380 $ - $ 344,380
- 10,975 10,975 Johnson Controls, Inc. $ - $ 884,585 $ 884,585
11,100 20,800 31,900 Minnesota Mining & Manufacturing Co. $ 1,241,868 $ 2,327,104 $ 3,568,972
- 12,300 12,300 Textron, Inc. $ - $ 692,736 $ 692,736
12,400 29,209 41,609 United Technologies Corp. $ 910,160 $ 2,143,941 $ 3,054,101
------------ ------------ ------------
$ 16,207,608 $ 30,093,635 $ 46,301,243
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified Manufacturing
25,900 49,000 74,900 Honeywell International, Inc. $ 954,933 $ 1,806,630 $ 2,761,563
58,000 114,025 172,025 Tyco International, Ltd. $ 3,085,600 $ 6,066,130 $ 9,151,730
------------ ------------ ------------
$ 4,040,533 $ 7,872,760 $ 11,913,293
- ------------------------------------------------------------------------------------------------------------------------------------
Electric - Integrated
- 19,500 19,500 Allegheny Energy, Inc. $ - $ 840,840 $ 840,840
- 16,100 16,100 Dominion Resources, Inc. $ - $ 973,889 $ 973,889
7,400 24,300 31,700 Exelon Corp. $ 418,100 $ 1,372,950 $ 1,791,050
- 21,411 21,411 Mirant Corp. (b) $ - $ 662,242 $ 662,242
- 16,566 16,566 NiSource, Inc. $ - $ 436,680 $ 436,680
- 9,900 9,900 PPl Corp. $ - $ 445,302 $ 445,302
- 31,675 31,675 TXU Corp. $ - $ 1,472,887 $ 1,472,887
- 32,050 32,050 Xcel Energy, Inc. $ - $ 863,427 $ 863,427
------------ ------------ ------------
$ 418,100 $ 7,068,217 $ 7,486,317
- ------------------------------------------------------------------------------------------------------------------------------------
Electronic - Miscellaneous Components
10,700 17,000 27,700 Linear Technology Corp. $ 466,306 $ 740,860 $ 1,207,166
- 16,960 16,960 Sanmina Corp. (b) $ - $ 369,898 $ 369,898
------------ ------------ ------------
$ 466,306 $ 1,110,758 $ 1,577,064
- ------------------------------------------------------------------------------------------------------------------------------------
Electronic Components - Semiconductors
- 18,250 18,250 Advanced Micro Devices, Inc. (b) $ - $ 333,245 $ 333,245
14,400 23,500 37,900 Altera Corp. (b) $ 432,864 $ 706,410 $ 1,139,274
15,300 21,000 36,300 Analog Devices, Inc. (b) $ 703,800 $ 966,000 $ 1,669,800
18,900 43,000 61,900 Applied Materials, Inc. (b) $ 866,754 $ 1,971,980 $ 2,838,734
226,500 388,600 615,100 Intel Corp. $ 6,751,965 $ 11,584,165 $ 18,336,130
4,300 - 4,300 KLA-Tencor Corp. (b) $ 233,877 $ - $ 233,877
13,800 29,500 43,300 Micron Technology, Inc. (b) $ 579,600 $ 1,239,000 $ 1,818,600
- 15,000 15,000 Novellus Systems, Inc. (b) $ - $ 764,550 $ 764,550
- 49,000 49,000 Qlogic Corp. (b) $ - $ 188,209 $ 188,209
- 18,250 18,250 Rockwell International Corp. $ - $ 292,913 $ 292,913
40,300 106,725 147,025 Texas Instruments, Inc. $ 1,390,350 $ 3,682,012 $ 5,072,362
10,400 19,095 29,495 Xilinx, Inc. (b) $ 416,000 $ 763,800 $ 1,179,800
------------ ------------ ------------
$ 11,375,210 $ 22,492,284 $ 33,867,494
- ------------------------------------------------------------------------------------------------------------------------------------
Electronic Components/Instruments
- 36,050 36,050 Solectron Corp. (b) $ - $ 630,154 $ 630,154
------------ ------------ ------------
$ - $ 630,154 $ 630,154
- ------------------------------------------------------------------------------------------------------------------------------------
Electonic Measuring Equipment
- 6,000 6,000 Tektronix, Inc. (b) $ - $ 136,140 $ 136,140
------------ ------------ ------------
$ - $ 136,140 $ 136,140
- ------------------------------------------------------------------------------------------------------------------------------------
Electronic Measuring Instrumnets
27,375 27,375 Agilent Technologies,Inc. (b) $ 783,199 $ 783,199
------------ ------------ ------------
$ - $ 783,199 $ 783,199
- ------------------------------------------------------------------------------------------------------------------------------------
Enterprise Software
B-10
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 7/31/01
Kent Large Kent Large Kent
Company Kent Growth Pro Forma Company Growth Growth and Pro Forma
Growth Fund and Income Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
6,800 - 6,800 PeopleSoft, Inc. (b) $ 296,956 $ - $ 296,956
------------ ----------- -----------
$ 296,956 $ - $ 296,956
- ------------------------------------------------------------------------------------------------------------------------------------
Fiber Optics
- 55,500 55,500 Corning, Inc. $ 869,130 $ 869,130
------------ ----------- ------------
$ - $ 869,130 $ 869,130
- ------------------------------------------------------------------------------------------------------------------------------------
Finance
20,500 63,200 83,700 Washington Mutual, Inc. $ 830,660 $ 2,560,864 $ 3,391,524
------------ ------------ ------------
$ 830,660 $ 2,560,864 $ 3,391,524
- ------------------------------------------------------------------------------------------------------------------------------------
Financial - Consumer Loans
10,800 - 10,800 Household International, Inc. $ 715,932 $ - $ 715,932
11,300 34,700 46,000 Providian Fnancial Corp. $ 557,881 $ 2,300,263 $ 2,858,144
5,800 - 5,800 USA Education, Inc. $ 464,638 $ - $ 464,638
------------ ------------ ------------
$ 1,738,451 $ 2,300,263 $ 4,038,714
- ------------------------------------------------------------------------------------------------------------------------------------
Financial - Investment Banker/Broker
46,500 54,100 100,600 Charles Schwab Corp. $ 697,035 $ 810,959 $ 1,507,994
19,600 53,400 73,000 Merrill Lynch & Co., Inc. $ 1,063,104 $ 2,896,416 $ 3,959,520
------------ ------------ ------------
$ 1,760,139 $ 3,707,375 $ 5,467,514
- ------------------------------------------------------------------------------------------------------------------------------------
Financial - Miscellaneous Services
44,800 77,237 122,037 American Express Co. $ 1,806,784 $ 3,114,968 $ 4,921,752
6,900 10,986 17,886 Capital One Financial Corp. $ 443,463 $ 706,070 $ 1,149,533
19,800 52,275 72,075 MBNA Corp. $ 700,920 $ 1,850,535 $ 2,551,455
------------ ------------ ------------
$ 2,951,167 $ 5,671,573 $ 8,622,740
- ------------------------------------------------------------------------------------------------------------------------------------
Financial - Mortgage & Related Services
30,600 60,300 90,900 Fannie Mae $ 2,547,450 $ 5,019,975 $ 7,567,425
16,100 44,975 61,075 Freddie Mac $ 1,101,884 $ 3,078,089 $ 4,179,973
------------ ------------ ------------
$ 3,649,334 $ 8,098,064 $ 11,747,398
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Services Diversified
116,900 307,000 423,900 Citigroup, Inc. $ 5,869,549 $ 15,414,470 $ 21,284,019
25,900 73,200 99,100 Morgan Stanley Dean Witter & Co. $ 1,549,338 $ 4,378,824 $ 5,928,162
------------ ------------ -------------
$ 7,418,887 $ 19,793,294 $ 27,212,181
- ------------------------------------------------------------------------------------------------------------------------------------
Food - Canned
10,100 22,991 33,091 H.J Heinz Co. $ 436,421 $ 993,441 $ 1,429,862
------------ ------------ ------------
$ 436,421 $ 993,441 $ 1,429,862
- ------------------------------------------------------------------------------------------------------------------------------------
Food - Confectionery
7,600 - 7,600 Wm. Wrigley Jr. Co. $ 379,392 $ - $ 379,392
------------ ------------ ------------
$ 379,392 $ - $ 379,392
- ------------------------------------------------------------------------------------------------------------------------------------
Food - Diversified
- 34,600 34,600 ConAgra, Inc. $ - $ 743,554 $ 743,554
11,100 27,069 38,169 General Mills, Inc. $ 488,178 $ 1,190,495 $ 1,678,673
13,600 22,300 35,900 Kellogg Co. $ 408,952 $ 670,561 $ 1,079,513
6,600 7,000 13,600 Quaker Oats Co. $ 580,800 $ 616,000 $ 1,196,800
- 17,000 17,000 Ralston Purina Group $ - $ 545,870 $ 545,870
- 39,759 39,759 Sara Lee Corp. $ - $ 801,939 $ 801,939
16,300 30,030 46,330 Unileveler NV $ 977,185 $ 1,800,298 $ 2,777,483
------------ ------------ ------------
$ 2,455,115 $ 6,368,717 $ 8,823,832
- ------------------------------------------------------------------------------------------------------------------------------------
Food items - Wholesale
22,700 22,700 Sysco Corp. $ 609,268 $ - $ 609,268
31,200 31,200 SUPERVALU, Inc. $ 654,264 $ 654,264
------------ ------------ ------------
$ 609,268 $ 654,264 $ 1,263,532
- ------------------------------------------------------------------------------------------------------------------------------------
Food products
- 42,000 42,000 Archer-Daniels-Midland Co. $ - $ 562,380 $ 562,380
11,800 28,675 40,475 Safeway, Inc. $ 521,088 $ 1,266,288 $ 1,787,376
------------ ------------ ------------
$ 521,088 $ 1,828,668 $ 2,349,756
- ------------------------------------------------------------------------------------------------------------------------------------
B-11
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 07/31/01
Kent Large Kent Growth Kent Large Kent Growth
Company and Income Pro Forma Company Growth and Pro Forma
Growth Fund Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Gas - Distribution
- 21,200 21,200 KeySpan Corp. $ - $ 649,568 $ 649,568
----------- ----------- -----------
$ - $ 649,568 $ 649,568
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care
- 15,200 15,200 McKesson HBOC, Inc. $ - $ 630,040 $ 630,040
----------- ----------- -----------
$ - $ 630,040 $ 630,040
- ------------------------------------------------------------------------------------------------------------------------------------
Hotels & Lodging
- 19,900 19,900 Marriott International, $ - $ 950,225 $ 950,225
Inc., Class A
----------- ----------- -----------
$ - $ 950,225 $ 950,225
- ------------------------------------------------------------------------------------------------------------------------------------
Hotels & Motels
- 17,500 17,500 Starwood Hotels & $ - $ 624,575 $ 624,575
Resorts Worldwide,
Inc.
----------- ----------- -----------
$ - $ 624,575 $ 624,575
- ------------------------------------------------------------------------------------------------------------------------------------
Instuments - Scientific
- 15,600 15,600 PerkinElmer, Inc. $ - $ 491,400 $ 491,400
----------- ----------- -----------
$ - $ 491,400 $ 491,400
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance - Brokers
10,600 18,500 29,100 Marsh & McLennan $ 1,064,240 $ 1,857,400 $ 2,921,640
Cos., Inc.
----------- ----------- -----------
$ 1,064,240 $ 1,857,400 $ 2,921,640
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance - Financial Guarantee
- 9,400 9,400 MBIA, Inc. $ - $ 527,904 $ 527,904
----------- ----------- -----------
$ - $ 527,904 $ 527,904
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance - Life & Health
- 44,000 3,697,489 American general Corp. $ - $ 2,034,999 $ 2,034,999
- 13,250 202,195 CIGNA Corp. $ - $ 1,329,108 $ 1,329,108
- 10,650 3,102,228 Jefferson-Pilot Corp. $ - $ 505,982 $ 505,982
- 13,500 10,521,000 Lincoln National Corp. $ - $ 688,905 $ 688,905
- 16,175 2,839,347 Torchmark Corp. $ - $ 671,424 $ 671,424
----------- ----------- -----------
$ - $ 5,230,418 $ 5,230,418
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance - Multi-Line
- 8,275 3,697,489 Aetna, Inc. $ - $ 233,438 $ 233,438
16,800 45,050 3,697,489 Allstate Corp. $ 587,328 $ 1,574,948 $ 2,162,276
59,200 147,600 202,195 American International $ 4,928,400 $12,287,700 $17,216,100
Group, Inc.
- 15,345 3,102,228 Hartford financial $ - $ 1,015,992 $ 1,015,992
Services Group, Inc.
17,800 42,000 10,521,000 MetLife, Inc. $ 527,770 $ 1,245,300 $ 1,773,070
- 15,800 2,839,347 MGIC Investment Corp. $ - $ 1,185,632 $ 1,185,632
----------- ----------- -----------
$ 6,043,498 $17,543,010 $23,586,508
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance - Property & Casualty
- 13,200 13,200 Chubb Corp. $ - $ 926,244 $ 926,244
----------- ----------- -----------
$ - $ 926,244 $ 926,244
- ------------------------------------------------------------------------------------------------------------------------------------
Internet Services/Software
17,200 30,000 47,200 Yahoo!, Inc. (b) $ 303,064 $ 528,600 $ 831,664
----------- ----------- -----------
$ 303,064 $ 528,600 $ 831,664
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery - Construction/Mining
- 18,000 18,000 Ingersoll-Rand Co. $ - $ 786,240 $ 786,240
----------- ----------- -----------
$ - $ 786,240 $ 786,240
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery - Electrical
10,000 31,700 41,700 Emerson Electric Co. $ 573,600 $ 1,818,312 $ 2,391,912
----------- ----------- -----------
$ 573,600 $ 1,818,312 $ 2,391,912
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery - General Industrial
- 22,350 22,350 Dover Corp. $ - $ 807,953 $ 807,953
- 17,900 17,900 Illinois Tool Works, $ - $ 1,127,700 $ 1,127,700
Inc.
----------- ----------- -----------
$ - $ 1,935,653 $ 1,935,653
- ------------------------------------------------------------------------------------------------------------------------------------
Media Conglomerates
B-12
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 07/31/01
Kent Large Kent Growth Kent Large Kent Growth
Company and Income Pro Forma Company Growth and Pro Forma
Growth Fund Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
112,400 245,199 357,599 AOL Time Warner, $ 5,108,580 $ 11,144,295 $ 16,252,875
Inc. (b)
48,600 118,600 167,200 The Walt Disney Co. $ 1,280,610 $ 3,125,110 $ 4,405,720
41,400 94,200 135,600 Viacom, Inc., $ 2,061,720 $ 4,691,160 $ 6,752,880
Class B (b) ------------ ------------ -------------
$ 8,450,910 $ 18,960,565 $ 27,411,475
- ------------------------------------------------------------------------------------------------------------------------------------
Medical - Biomedical/Genetic
35,100 55,100 90,200 Amgen, Inc. (b) $ 2,201,121 $ 3,455,321 $ 5,656,442
5,900 12,000 17,900 Biogen, Inc. (b) $ 334,471 $ 680,280 $ 1,014,751
------------ ------------ -------------
$ 2,535,592 $ 4,135,601 $ 6,671,193
- ------------------------------------------------------------------------------------------------------------------------------------
Medical - Drugs
52,100 84,500 136,600 Abbott Laboratories $ 2,792,039 $ 4,528,355 $ 7,320,394
45,000 69,500 114,500 American Home
Products Corp. $ 2,713,950 $ 4,191,545 $ 6,905,495
65,800 103,400 169,200 Bristol-Myers $ 3,891,412 $ 6,115,076 $ 10,006,488
Squibb Co.
37,700 67,300 105,000 Eli Lilly & Co. $ 2,988,856 $ 5,335,544 $ 8,324,400
8,100 - 8,100 Forest Laboratories, $ 636,255 $ - $ 636,255
Inc.
7,500 - 7,500 King Pharmaceuticals, $ 339,000 $ - $ 339,000
Inc.
10,900 11,000 21,900 Medimmune, Inc. (b) $ 419,868 $ 423,720 $ 843,588
79,300 135,000 214,300 Merck & Co., Inc. $ 5,390,814 $ 9,177,300 $ 14,568,114
212,300 349,500 561,800 Pfizer, Inc. $ 8,751,006 $ 14,406,389 $ 23,157,395
43,400 72,300 115,700 Pharmacia Corp. $ 1,936,508 $ 3,226,026 $ 5,162,534
49,200 93,300 142,500 Schering-Plough Corp. $ 1,921,260 $ 3,643,365 $ 5,564,625
------------ ------------ -------------
$ 31,780,968 $ 51,047,320 $ 82,828,288
- ------------------------------------------------------------------------------------------------------------------------------------
Medical - Health Medical Organization
10,700 3,600 14,300 UnitedHealth Group, $ 721,394 $ - $ 721,394
Inc.
- 3,600 3,600 Wellpoint Health $ - $ 385,056 $ 385,056
Networks (b) ------------ ------------ -------------
$ 721,394 $ 385,056 $ 1,106,450
- ------------------------------------------------------------------------------------------------------------------------------------
Medical - Hopital
18,100 32,400 50,500 HCA - The healthcare $ 831,695 $ 1,488,780 $ 2,320,475
Co.
- 19,000 19,000 Tenet Healthcare
Corp. (b) $ - $ 1,054,690 $ 1,054,690
------------ ------------ -------------
$ 831,695 $ 2,543,470 $ 3,375,165
- ------------------------------------------------------------------------------------------------------------------------------------
Medical - Outpatient/Home Care
- 25,000 25,000 HEALTHSOUTH Corp. (b) $ - $ 427,500 $ 427,500
------------ ------------ -------------
$ - $ 427,500 $ 427,500
- ------------------------------------------------------------------------------------------------------------------------------------
Medical - Wholesale Drug Distribution
14,100 22,500 36,600 Cardinal Health, Inc. $ 1,038,183 $ 1,656,675 $ 2,694,858
------------ ------------ -------------
$ 1,038,183 $ 1,656,675 $ 2,694,858
- ------------------------------------------------------------------------------------------------------------------------------------
Medical Instruments
8,800 10,200 19,000 Biomet, Inc. $ 427,240 $ 495,210 $ 922,450
10,300 29,075 39,375 Guidant Corp. (b) $ 328,364 $ 926,911 $ 1,255,275
43,600 64,600 108,200 Medtronic, Inc. $ 2,094,108 $ 3,102,738 $ 5,196,846
------------ ------------ -------------
$ 2,849,712 $ 4,524,859 $ 7,374,571
- ------------------------------------------------------------------------------------------------------------------------------------
Medical Products
20,000 36,400 56,400 Baxter International, $ 996,000 $ 1,812,720 $ 2,808,720
Inc.
101,338 161,500 262,838 Johnson & Johnson $ 5,482,386 $ 8,737,150 $ 14,219,536
6,600 - 6,600 Stryker Corp. $ 395,868 $ - $ 395,868
------------ ------------ -------------
$ 6,874,254 $ 10,549,870 $ 17,424,124
- ------------------------------------------------------------------------------------------------------------------------------------
Metal - gold
- 32,000 32,000 Barrick Gold Corp. $ - $ 476,480 $ 476,480
- 10,500 10,500 Newmont Mining Corp. $ - $ 196,350 $ 196,350
------------ ------------ -------------
$ - $ 672,830 $ 672,830
- ------------------------------------------------------------------------------------------------------------------------------------
Metals
20,100 61,800 81,900 Alcoa, Inc. $ 788,523 $ 2,424,414 $ 3,212,937
- 9,500 9,500 Inco, Ltd. (b) $ - $ 159,220 $ 159,220
------------ ------------ -------------
$ 788,523 $ 2,583,634 $ 3,372,157
- ------------------------------------------------------------------------------------------------------------------------------------
B-13
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 07/31/01
Kent Large Kent Growth Kent Large Kent Growth
Company and Income Pro Forma Company Growth and Pro Forma
Growth Fund Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Motorcycle/Motor Scooter
13,000 - 13,000 Harley-Davidson, Inc. $ 670,930 $ - $ 670,930
------------- ------------ -------------
$ 670,930 $ - $ 670,930
- ------------------------------------------------------------------------------------------------------------------------------------
Networking Products
- 187,000 187,000 Lucent Technologies, Inc. $ - $ 1,252,900 $ 1,252,900
------------- ------------ -------------
$ - $ 1,252,900 $ 1,252,900
- ------------------------------------------------------------------------------------------------------------------------------------
Office Automation & Equipment
- 24,650 24,650 Pitney Bowes, Inc. $ - $ 990,930 $ 990,930
------------- ------------ -------------
$ - $ 990,930 $ 990,930
- ------------------------------------------------------------------------------------------------------------------------------------
Office Supplies & Forms
4,100 7,325 11,425 Avery Dennison Corp. $ 210,166 $ 375,480 $ 585,646
------------- ------------ -------------
$ 210,166 $ 375,480 $ 585,646
- ------------------------------------------------------------------------------------------------------------------------------------
Oil & Gas
- 13,500 13,500 Anadarko Petroleum Corp. $ - $ 766,800 $ 766,800
- 45,525 45,525 Conoco, Inc., Class B $ - $ 1,411,275 $ 1,411,275
- 11,100 11,100 Transocean Sedco Forex, Inc. $ - $ 358,419 $ 358,419
------------- ------------ -------------
$ - $ 2,536,494 $ 2,536,494
- ------------------------------------------------------------------------------------------------------------------------------------
Oil & gas - exploration & Production
- 10,200 10,200 Kerr-Mcgee Corp. $ - $ 644,436 $ 644,436
------------- ------------ -------------
$ - $ 644,436 $ 644,436
- ------------------------------------------------------------------------------------------------------------------------------------
Oil - Field Services
10,000 30,000 40,000 Halliburton Co. $ 350,100 $ 1,050,300 $ 1,400,400
13,300 38,500 51,800 Schlumberger, Ltd. $ 714,875 $ 2,069,375 $ 2,784,250
------------- ------------ -------------
$ 1,064,975 $ 3,119,675 $ 4,184,650
- ------------------------------------------------------------------------------------------------------------------------------------
Oil - International Integrated
14,900 40,000 54,900 Chevron Corp. $ 1,361,711 $ 3,655,600 $ 5,017,311
160,500 392,800 553,300 Exxon Mobil Corp. $ 6,702,480 $ 16,403,327 $ 23,105,807
49,900 119,000 168,900 Royal Dutch Petroleum Co., ADR $ 2,894,200 $ 6,902,000 $ 9,796,200
11,100 30,000 41,100 Texaco, Inc. $ 768,675 $ 2,077,500 $ 2,846,175
------------- ------------ -------------
$ 11,727,066 $ 29,038,427 $ 40,765,493
- ------------------------------------------------------------------------------------------------------------------------------------
Oil - Production/Pipeline
7,500 17,400 24,900 Dynergy Inc. $ 347,850 $ 807,012 $ 1,154,862
17,400 48,100 65,500 Enron Corp. $ 789,090 $ 2,181,335 $ 2,970,425
------------- ------------ -------------
$ 1,136,940 $ 2,988,347 $ 4,125,287
- ------------------------------------------------------------------------------------------------------------------------------------
Oil - U.S. Exploration & Production
- 14,600 14,600 Devon Energy Corp. $ - $ 791,466 $ 791,466
------------- ------------ -------------
$ - $ 791,466 $ 791,466
- ------------------------------------------------------------------------------------------------------------------------------------
Oil - U.S. Integrated
- 18,500 18,500 Phillips Petroleum Co. $ - $ 1,056,165 $ 1,056,165
- 27,025 27,025 Unocal Corp. $ - $ 966,955 $ 966,955
- 26,575 26,575 USX - Marathon Group $ - $ 788,480 $ 788,480
------------- ------------ -------------
$ - $ 2,811,600 $ 2,811,600
- ------------------------------------------------------------------------------------------------------------------------------------
Oil Field Machinery & Equipment
- 18,000 18,000 Baker Hughes, Inc. $ - $ 640,440 $ 640,440
------------- ------------ -------------
$ - $ 640,440 $ 640,440
- ------------------------------------------------------------------------------------------------------------------------------------
Oil Refining
- 18,000 18,000 Sunoco $ - $ 622,440 $ 622,440
------------- ------------ -------------
$ - $ 622,440 $ 622,440
- ------------------------------------------------------------------------------------------------------------------------------------
Optical Supplies
4,400 - 4,400 Allergan, Inc. $ 331,276 $ - $ 331,276
------------- ------------ -------------
$ 331,276 $ - $ 331,276
- ------------------------------------------------------------------------------------------------------------------------------------
Paper & related Products
- 32,500 32,500 International Paper Co. $ - $ 1,327,950 $ 1,327,950
B-14
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 07/31/01
Kent Large Kent Growth Kent Large Kent Growth
Company and Income Pro Forma Company Growth and Pro Forma
Growth Fund Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ----------------------------------------------------------------------------------------------------------------------------------
- 24,925 24,925 Mead Corp. $ - $ 740,771 $ 740,771
------------- ------------ ------------
$ - $ 2,068,721 $ 2,068,721
- ----------------------------------------------------------------------------------------------------------------------------------
Photography
- 17,900 17,900 Eastman Kodak Co. $ - $ 775,249 $ 775,249
------------- ------------ ------------
$ - $ 775,249 $ 775,249
- ----------------------------------------------------------------------------------------------------------------------------------
Pipelines
11,900 27,400 39,300 El Paso Energy Corp. $ 615,825 $ 1,417,950 $ 2,033,775
- 31,050 31,050 The Williams Companies, Inc. $ - $ 1,040,175 $ 1,040,175
------------- ------------ ------------
$ 615,825 $ 2,458,125 $ 3,073,950
- ----------------------------------------------------------------------------------------------------------------------------------
Pollution Control
- 34,000 34,000 Waste Management, Inc. $ - $ 1,054,000 $ 1,054,000
------------- ------------ ------------
$ - $ 1,054,000 $ 1,054,000
- ----------------------------------------------------------------------------------------------------------------------------------
Printers & Related Products
- 7,325 7,325 Lexmark International Group, $ - $ 334,899 $ 334,899
Inc. (b)
------------- ------------ ------------
$ - $ 334,899 $ 334,899
- ----------------------------------------------------------------------------------------------------------------------------------
Publishing - Books
5,200 15,200 20,400 McGraw-Hill Cos., Inc. $ 319,124 $ 932,824 $ 1,251,948
------------- ------------ ------------
$ 319,124 $ 932,824 $ 1,251,948
- ----------------------------------------------------------------------------------------------------------------------------------
Publishing - Newspapers
- 22,900 22,900 Gannett, Inc. $ - $ 1,534,987 $ 1,534,987
- 16,625 16,625 New York Times Co. $ - $ 769,738 $ 769,738
- 18,000 18,000 Tribune Co. $ - $ 742,680 $ 742,680
------------- ------------ ------------
$ - $ 3,047,405 $ 3,047,405
- ----------------------------------------------------------------------------------------------------------------------------------
Restaurants
30,000 86,300 116,300 Mcdonald's Corp. $ 874,200 $ 2,514,782 $ 3,388,982
12,600 - 12,600 Starbucks Corp. (b) $ 227,304 $ - $ 227,304
------------- ------------ ------------
$ 1,101,504 $ 2,514,782 $ 3,616,286
- ----------------------------------------------------------------------------------------------------------------------------------
Retail
10,900 - 10,900 Bed Bath & Beyond, Inc. (b) $ 351,307 $ - $ 351,307
5,800 11,100 16,900 Best Buy Co. (b) $ 388,368 $ 743,256 $ 1,131,624
11,200 17,650 28,850 Kohl's Corp. (b) $ 641,536 $ 1,010,992 $ 1,652,528
- 38,000 38,000 Staples, Inc. (b) $ - $ 569,620 $ 569,620
------------- ------------ ------------
$ 1,381,211 $ 2,323,868 $ 3,705,079
- ----------------------------------------------------------------------------------------------------------------------------------
Retail - Apparel/Shoes
7,651 29,813 37,464 Coach, Inc. (b) $ 288,978 $ 1,126,037 $ 1,415,015
24,600 45,700 70,300 Gap, Inc. $ 671,826 $ 1,248,067 $ 1,919,893
- 43,450 43,450 Limited, Inc. $ - $ 737,347 $ 737,347
------------- ------------ ------------
$ 960,804 $ 3,111,451 $ 4,072,255
- ----------------------------------------------------------------------------------------------------------------------------------
Retail - Consumer Electronics
9,500 14,500 24,000 RadioShack Corp. $ 268,185 $ 409,335 $ 677,520
------------- ------------ ------------
$ 268,185 $ 409,335 $ 677,520
- ----------------------------------------------------------------------------------------------------------------------------------
Retail - Discount
- 24,800 24,800 Costco Wholesale Corp. (b) $ - $ 1,067,640 $ 1,067,640
150,300 237,700 388,000 Wal-Mart Stores, Inc.* $ 8,401,770 $ 13,287,430 $ 21,689,200
------------- ------------ ------------
$ 8,401,770 $ 14,355,070 $ 22,756,840
- ----------------------------------------------------------------------------------------------------------------------------------
Retail - Drug Store
13,200 22,150 35,350 CVS Corp. $ 475,332 $ 797,622 $ 1,272,954
34,200 54,600 88,800 Walgreen Co. $ 1,152,540 $ 1,840,020 $ 2,992,560
------------- ------------ ------------
$ 1,627,872 $ 2,637,642 $ 4,265,514
- ----------------------------------------------------------------------------------------------------------------------------------
Retail - Food & Drug
27,600 45,400 73,000 Kroger Co. (b) $ 727,536 $ 1,196,744 $ 1,924,280
------------- ------------ ------------
$ 727,536 $ 1,196,744 $ 1,924,280
- ----------------------------------------------------------------------------------------------------------------------------------
Retail - Jewelry
B-15
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 07/31/01
Kent Large Kent Growth Kent Large Kent Growth
Company and Income Pro Forma Company Growth and Pro Forma
Growth Fund Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- -----------------------------------------------------------------------------------------------------------------------------------
- 9,500 9,500 Tiffany & Co. $ - $ 335,350 $ 335,350
------------- ------------ -------------
$ - $ 335,350 $ 335,350
- -----------------------------------------------------------------------------------------------------------------------------------
Retail - Major Department Stores
- 21,100 21,100 May Department Stores Co. $ - $ 700,520 $ 700,520
- 24,100 24,100 Sears, Roebuck & Co. $ - $ 1,132,218 $ 1,132,218
24,900 64,100 89,000 Target Corp. $ 963,630 $ 2,480,670 $ 3,444,300
------------- ------------ -------------
$ 963,630 $ 4,313,408 $ 5,277,038
- -----------------------------------------------------------------------------------------------------------------------------------
Retail - Regional Department Stores
- 15,500 15,500 Federated Department Stores, $ - $ 598,300 $ 598,300
Inc. (b)
------------- ------------ -------------
$ - $ 598,300 $ 598,300
- -----------------------------------------------------------------------------------------------------------------------------------
Retail - Wholesale - Auto Parts
- 12,200 12,200 AutoZone, Inc. (b) $ - $ 577,426 $ 577,426
------------- ------------ -------------
$ - $ 577,426 $ 577,426
- -----------------------------------------------------------------------------------------------------------------------------------
Rubber - Tires
- 12,600 12,600 The B.F. Goodrich Co. $ - $ 440,244 $ 440,244
------------- ------------ -------------
$ - $ 440,244 $ 440,244
- -----------------------------------------------------------------------------------------------------------------------------------
Shoes & Related Apparel
- 21,700 21,700 Nike, Inc., Class B $ - $ 1,031,835 $ 1,031,835
------------- ------------ -------------
$ - $ 1,031,835 $ 1,031,835
- -----------------------------------------------------------------------------------------------------------------------------------
Soap & Cleaning Preparations
20,400 34,413 54,813 Colgate-Palmolive Co. $ 1,105,680 $ 1,865,185 $ 2,970,865
37,400 72,100 109,500 Proctor & Gamble Co. $ 2,656,148 $ 5,120,542 $ 7,776,690
------------- ------------ -------------
$ 3,761,828 $ 6,985,727 $ 10,747,555
- -----------------------------------------------------------------------------------------------------------------------------------
Steel - Producers
- 8,225 8,225 Nucor Corp. $ - $ 393,895 $ 393,895
------------- ------------ -------------
$ - $ 393,895 $ 393,895
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications - Equipment
- 48,400 3,697,489 ADC Telecommunications, Inc. (b) $ - $ 237,644 $ 237,644
6,400 8,885 3,697,489 Comverse Technology, Inc. (b) $ 180,992 $ 251,268 $ 432,260
- 71,900 202,195 JDS Uniphase Corp. (b) $ - $ 664,356 $ 664,356
- 129,500 3,102,228 Nortel Networks Corp., ADR $ - $ 1,029,525 $ 1,029,525
56,500 40,200 10,521,000 QUALCOMM, Inc. (b) $ 449,175 $ 2,541,845 $ 2,991,020
25,400 24,750 2,839,347 Tellabs, Inc. (b) $ 1,606,042 $ 407,633 $ 2,013,675
------------- ------------ -------------
$ 2,236,209 $ 5,132,271 $ 7,368,480
- -----------------------------------------------------------------------------------------------------------------------------------
Telecommunications - Services and Equipment
- 25,000 25,000 Avaya, Inc. (b) $ - $ 313,250 $ 313,250
25,830 63,716 89,546 AT&T Wireless Services, Inc. (b) $ 482,763 $ 1,190,860 $ 1,673,623
- 43,000 43,000 Nextel communications, Inc., $ - $ 715,950 $ 715,950
Class A (b)
31,300 38,000 69,300 Sprint Corp., PCS Group (b) $ 811,296 $ 984,960 $ 1,796,256
------------- ------------ -------------
$ 1,294,059 $ 3,205,020 $ 4,499,079
- -----------------------------------------------------------------------------------------------------------------------------------
Telephone - Integrated
80,200 198,000 278,200 AT&T Corp. $ 1,620,842 $ 4,001,580 $ 5,622,422
38,600 90,300 128,900 Qwest Communications $ 1,003,600 $ 2,347,800 $ 3,351,400
International, Inc.
62,800 162,600 225,400 Verizon Communications, Inc. $ 3,400,620 $ 8,804,790 $ 12,205,410
67,200 161,000 228,200 WorldCom, Inc. (b) $ 940,800 $ 2,254,000 $ 3,194,800
------------- ------------ -------------
$ 6,965,862 $ 17,408,170 $ 24,374,032
- -----------------------------------------------------------------------------------------------------------------------------------
Television
6,900 - 6,900 Univison Communications, $ 263,442 $ - $ 263,442
Inc. (b)
------------- ------------ -------------
$ 263,442 $ - $ 263,442
- -----------------------------------------------------------------------------------------------------------------------------------
Tobacco
65,800 125,500 191,300 Philip Morris Cos., Inc. $ 2,993,900 $ 5,710,250 $ 8,704,150
- 23,550 23,550 U.S.T., Inc. $ - $ 728,873 $ 728,873
------------- ------------ -------------
$ 2,993,900 $ 6,439,123 $ 9,433,023
- -----------------------------------------------------------------------------------------------------------------------------------
B-16
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 07/31/01
Kent Large Kent Growth Kent Large Kent Growth
Company and Income Pro Forma Company Growth and Pro Forma
Growth Fund Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Tools - Hand Held
- 16,500 16,500 The Stanley Works $ - $ 719,235 $ 719,235
------------ ------------ -------------
$ - $ 719,235 $ 719,235
- ------------------------------------------------------------------------------------------------------------------------------------
Toys/Game/Hobby
- 21,900 21,900 Mattel, Inc. $ - $ 392,010 $ 392,010
------------ ------------ -------------
$ - $ 392,010 $ 392,010
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - Air Freight
- 19,450 19,450 FDX Corp. (b) $ - $ 804,647 $ 804,647
------------ ------------ -------------
$ - $ 804,647 $ 804,647
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - Airline
- 10,000 10,000 AMR Corp. $ - $ 351,500 $ 351,500
- 7,000 7,000 Delta Air Lines, Inc. $ - $ 310,660 $ 310,660
- 42,000 42,000 Southwest Airlines Co. $ - $ 840,420 $ 840,420
------------ ------------ -------------
$ - $ 1,502,580 $ 1,502,580
- ------------------------------------------------------------------------------------------------------------------------------------
Soap & Cleaning Preparations
- 25,700 25,700 Burlington Northern $ - $ 687,218 $ 687,218
Santa Fe Corp.
- 23,925 23,925 Union Pacific Corp. $ - $ 1,284,533 $ 1,284,533
------------ ------------ -------------
$ - $ 1,971,751 $ 1,971,751
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - Electric Power
- 17,000 17,000 Concolidated $ - $ 675,580 $ 675,580
Edison, Inc.
- 13,300 13,300 Detroit Edisone Co. $ - $ 561,925 $ 561,925
26,100 64,700 90,800 Duke Energy Corp. $ 1,007,721 $ 2,498,067 $ 3,505,788
- 31,850 31,850 Entergy Corp. $ - $ 1,194,375 $ 1,194,375
- 18,350 18,350 First Energy Corp. $ - $ 556,739 $ 556,739
- 17,200 17,200 Florida Power & Light, $ - $ 928,800 $ 928,800
Inc.
- 13,000 13,000 Public Service $ - $ 608,400 $ 608,400
Enterprise Group,
Inc.
- 36,875 36,875 Reliant Energy, Inc. $ - $ 1,161,563 $ 1,161,563
- 49,000 49,000 Southern Co. $ - $ 1,151,500 $ 1,151,500
------------ ------------ -------------
$ 1,007,721 $ 9,336,949 $ 10,344,670
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - Telephone
5,400 17,700 23,100 ALLTEL Corp. $ 332,910 $ 1,091,205 $ 1,424,115
43,600 110,000 153,600 BellSouth Corp. $ 1,774,520 $ 4,477,000 $ 6,251,520
103,400 194,000 297,400 SBC Communications $ 4,656,102 $ 8,735,820 $ 13,391,922
- 49,000 49,000 Sprint Corp. $ - $ 1,143,660 $ 1,143,660
------------ ------------ -------------
$ 6,763,532 $ 15,447,685 $ 22,211,217
- ------------------------------------------------------------------------------------------------------------------------------------
Wireless Equipment
51,100 121,000 172,100 Motorola, Inc. $ 955,059 $ 2,261,490 $ 3,216,549
------------ ------------ -------------
$ 955,059 $ 2,261,490 $ 3,216,549
- ------------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks $251,460,210 $579,970,882 $831,431,092
- ------------------------------------------------------------------------------------------------------------------------------------
B-17
Kent Large Company Growth Fund
Kent Growth and Income Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 07/31/01
Kent Large Kent Growth Kent Large Kent Growth
Company and Income Pro Forma Company Growth and Pro Forma
Growth Fund Fund Combined Fund Income Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Companies
481 - 278 Dreyfus Cash $ 481 $ 278 $ 759
Management Money
Market Fund
289,656 - 6,205,327 Federated Prime Value $ 289,655 $ 6,205,327 $ 6,494,982
Obligations Money ------------ ------------ -------------
Market Fund
Total Investment Companies $ 290,136 $ 6,205,605 $ 6,495,741
- ------------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------
Total (Cost $401,577,656, $273,135,168 and $674,712,824 respectively) (a) $251,750,346 $586,176,487 $837,926,833
------------ ------------ -------------
Other assets in excess of liabilities $ 4,111,921 $ 6,521 $ 4,118,442
------------ ------------ -------------
Net Assets $255,862,267 $586,183,008 $842,045,275
============ ============ =============
(a) Represents cost for financial reporting purposes and differs from cost
basis for federal income tax purposes by the amount of losses recognized
for financial reporting purposes in excess of federal income tax reporting
of $303,601 and $360,478 respectively. Cost for federal income tax purposes
differs from value by net unrealized appreciation of securities as follows:
Unrealized $ 15,579,951 $221,778,298
appreciation
Unrealized $(37,325,251) $(37,483,068)
depreciation
Net unrealized $(21,745,300) $184,295,230
Appreciation
(b) Non - income producing security.
* Part of this security has been deposited as initial margin on open futures contracts
** Investment in affiliate
ADR - American Depository Receipt
NV - Naamloze Vennootchap (Dutch Corporation)
At July 31, 2001, the Fund's open long future contracts were as follows:
# Of contracts 8 19
Standard & Standard &
Poor's 500, Poor's 500,
Opening Contract Type 9/20/01 9/20/01
National Amount $ 2,439,080 $ 5,823,065
Unrealized Depreciation $ (8,480) $ (50,390)
on Futures
Market Value $ 2,430,600 $ 5,772,675
B-18
Fifth Third Large Cap Growth Fund
Fifth Third Large Cap Value Fund
Pro Forma Combining Statements of Assets and Liabilities
As of 7/31/01
Fifth Third Fifth Third Pro Forma
Large Cap Large Cap Pro Forma Combined
Growth Fund Value Fund Adjustments (Note 1)
------------ ------------ ------------ ------------
Assets:
Investment, at value
(cost $273,135,168, $401,577,656 and
$674,712,824, respectively) $251,750,346 $586,176,487 $ - $837,926,833
Collateral for securities loaned - 11,996,365 - 11,996,365
Interest and dividends receivable 167,246 401,314 - 568,560
Receivable for investments sold 4,106,595 - - 4,106,595
Net receivable for futures contracts - 26,600 - 26,600
Other assets 29,741 16,478 - 46,219
------------ ------------ ------------ ------------
Total Assets 256,053,928 598,617,244 - 854,671,172
------------ ------------ ------------ ------------
Liabilities:
Payable for securities loaned - 11,996,365 - 11,996,365
Payable for Fund shares redeemed - 3,959 - 3,959
Net payable for variation margin on futures contracts 8,480 - - 8,480
Payable to Advisor and other affiliates 160,676 364,129 - 524,805
Distribution fees 131 8,252 - 8,383
Other 22,374 61,531 - 83,905
------------ ------------ ------------ ------------
Total Liabilities 191,661 12,434,236 - 12,625,897
------------ ------------ ------------ ------------
Net Assets:
Paid-in capital 305,298,131 390,435,669 - 695,733,800
Accumulated net investment income 35,039 63,166 - 98,205
Accumulated net realized losses from investment
transactions and futures (28,077,601) 11,135,732 - (16,941,869)
Net unrealized depreciation on investments
and futures (21,393,302) 184,548,441 - 163,155,139
------------ ------------ ------------ ------------
Net Assets $255,862,267 $586,183,008 $ - $842,045,275
============ ============ ============ ============
Net Assets:
Institutional Shares $255,258,633 $547,523,929 $ - $802,782,562
Investment Shares 603,634 38,659,079 - 39,262,713
------------ ------------ ------------ ------------
Total $255,862,267 $586,183,008 $ - $842,045,275
============ ============ ============ ============
Shares of Beneficial Interest Outstanding
(Unlimited number of shares authorized,
no par value:)
Institutional Shares 28,681,478 36,098,816 (11,852,014)(a) 52,928,280
Investment Shares 67,866 2,573,706 (27,679)(a) 2,613,893
------------ ------------ ------------ ------------
Total 28,749,344 38,672,522 (11,879,693) 55,542,173
============ ============ ============ ============
Net Asset Value
Institutional Shares $ 8.90 $ 15.17 $ 15.17
============ ============ ============
Investment Shares - offering and redemption
price per share $ 8.89 $ 15.02 $ 15.02
============ ============ ============
- ----------
(a) Adjustment to convert Large Cap Growth Shares Outstanding to Large Cap
Value Shares Outstanding based on Large Cap Value's NAV's.
B-19
Fifth Third Large Cap Growth Fund
Fifth Third Large Cap Value Fund
Pro Forma Combining Statements of Operations
For the period ended 7/31/01 (a)
Fifth Third Fifth Third
Large Cap Large Cap Pro Forma Pro Forma Combined
Growth Fund Value Fund Adjustments (Note 1)
----------------- ---------------- ------------- ------------------
INVESTMENT INCOME:
Dividend income $ 1,874,158 $ 4,884,511 $ - $ 6,758,669
Net income from securities lending - 37,618 - 37,618
Foreign tax withholding (6,683) (56,681) - (63,364)
----------------- ---------------- ------------ ----------------
Total Income 1,867,475 4,865,448 - 6,732,923
----------------- ---------------- ------------ ----------------
EXPENSES:
Investment advisory fees 1,095,189 2,539,738 - 3,634,927
Administration fees 282,830 655,654 - 938,484
Distribution services - Investment Shares 894 61,867 - 62,761
Other fees 96,263 209,261 (10,500)(b) 295,024
----------------- ---------------- ------------ ----------------
Total expenses 1,475,176 3,466,520 (10,500) 4,931,196
----------------- ---------------- ------------ ----------------
Less: Waiver and/or reimbursement from Advisor
and/or affiliates (10,709) (15,687) - (26,396)
----------------- ---------------- ------------ ----------------
Net Expenses 1,464,467 3,450,833 (10,500) 4,904,800
----------------- ---------------- ------------ ----------------
Net Investment Income 403,008 1,414,615 10,500 1,828,123
----------------- ---------------- ------------ ----------------
Realized and Unrealized Gains/(Losses) on
Investments and Futures:
Net realized gains/(losses)from investment
transactions (20,929,947) 11,315,273 - (9,614,674)
Net realized gains/(losses)from futures transactions (827,720) 11,790 - (815,930)
Change in unrealized depreciation on investments and
futures (7,582,126) (65,339,637) - (72,921,763)
----------------- ---------------- ------------ ----------------
Net realized/unrealized losses from investments
and futures (29,339,793) (54,012,574) - (83,352,367)
----------------- ---------------- ------------ ----------------
Change in net assets resulting from operations $(28,936,785) $(52,597,959) $10,500 $(81,524,244)
================= =============== ============ ===============
- ---------------------------------------------
(a) For the period from January 1, 2001 through July 31, 2001.
(b) Adjustment to reflect the fee structure when the two funds merge.
B-20
FIFTH THIRD FUNDS
Notes to Pro Forma Financial Statements
(Unaudited)
1. Basis of Combination:
---------------------
The unaudited Pro Forma Combining Statements of Assets and Liabilities,
Statements of Operations, and Schedules of Portfolio Investments reflects the
accounts of two investment portfolios offered by the Fifth Third Funds: the
Fifth Third Large Cap Growth Fund and the Fifth Third Large Cap Value Fund,
(collectively, the "Funds" and individually a "Fund") as if the proposed
reorganization occurred as of and for the year ended July 31, 2001. These
statements have been derived from books and records utilized in calculating
daily net asset value at July 31, 2001.
The Reorganization Agreement provides that on the Closing Date of the
Reorganization, all of the assets and liabilities will be transferred as follows
such that at and after the Reorganization, the assets and liabilities of the
Fifth Third Large Cap Growth Fund become the assets and liabilities of the Large
Cap Value Fund.
In exchange for the transfer of assets and liabilities, the Large Cap Value
Fund will issue to the Large Cap Growth Fund full and fractional shares of the
Large Cap Value Fund, and the Large Cap Growth Fund will make a liquidating
distribution of such shares to its shareholders. The number of shares of the
Large Cap Value Fund so issued will be equal in value to the full and fractional
shares of the Large Cap Growth Fund that are outstanding immediately prior to
the Reorganization. At and after the Reorganization, all debts, liabilities and
obligations of the Large Cap Growth Fund will attach to the Large Cap Value Fund
and may thereafter be enforced against the Large Cap Value Fund to the same
extent as if the Large Cap Value Fund had incurred them. The pro forma
statements give effect to the proposed transfer described above.
Under the purchase method of accounting for business combinations under
generally accepted accounting principles, the basis on the part of the Large Cap
Value Fund, of the assets of the Large Cap Growth Fund will be the fair market
value of such assets on the Closing Date of the Reorganization. The Large Cap
Value Fund will recognize no gain or loss for federal tax purposes on its
issuance of shares in the Reorganization, and the basis to the Large Cap Value
Fund of the assets of the Large Cap Growth Fund received pursuant to the
Reorganization will equal the fair market value of the consideration furnished,
and costs incurred, by the Large Cap Value Fund in the Reorganization -- i.e.,
the sum of the liabilities assumed, the fair market value of the Large Cap Value
Funds shares issued, and such costs.
For accounting purposes, the Large Cap Value Fund is the surviving
portfolio of this Reorganization. As such, the Fifth Third Large Cap Growth
Fund, prior to the Closing Date, will declare a stock split causing the Net
Asset Value to match that of the Large Cap Value Fund as of the Closing Date.
The pro forma statements reflect the combined results of operations of the
Funds. However, should such Reorganization be effected, the statements of
operations of the Large Cap Growth Fund will not be restated for pre-combination
period results of the Large Cap Value Fund.
The Pro Forma Combining Statements of Assets and Liabilities, Statements of
Operations, and Schedules of Portfolio Investments should be read in conjunction
with the historical financial statements of the Funds incorporated by reference
in the Statement of Additional Information.
(Continued)
B-21
FIFTH THIRD FUNDS
Notes to Pro Forma Financial Statements
(Unaudited)
The Funds are each separate portfolios of the Fifth Third Funds,
respectively, which are registered as open-end management companies under the
Investment Company Act of 1940. The investment objectives of each fund are
listed below.
Fifth Third Large Cap Growth Fund seeks capital appreciation.
Fifth Third Large Cap Value Fund seeks long-term capital appreciation with
current income as a secondary objective.
The Funds each issue two classes of shares: Institutional and Investment
Shares.
Under the terms of the investment advisory agreement between the Fifth
Third Funds and Fifth Third Asset Management Inc., the Trust's investment
advisor (the "Advisor"), the Advisor receives for its services and annual
investment advisory fee based on a percentage of each Fund's average daily net
assets (see table below). Such fees are accrued daily and paid monthly. For the
year ended July 31, 2001, total investment advisory fees incurred by the Funds
were as follows (Amounts in thousands):
Percentage Fee Total Fees Fees Waived
-------------- ---------- -----------
Large Cap Growth Fund 0.70% $1,095 $-
Large Cap Value Fund 0.70% 2,540 -
Pro Forma Adjustments and Pro Forma Combined Columns
----------------------------------------------------
The pro forma adjustments and pro forma combined columns of the Statements
of Operations reflect the adjustments necessary to show expenses at the rates
which would have been in effect if the Funds were combined for the year ended
July 31, 2001. Investment advisory, administration, 12b-1, and accounting fees
in the pro forma combined column are calculated at the projected rates for the
Funds based upon the combined net assets of the Funds. Certain pro forma
adjustments were made to estimate the benefit of combining operations of
separate funds into one survivor fund.
The pro forma Schedules of Portfolio Investments give effect to the
proposed transfer of such assets as if the Reorganization had occurred at July
31, 2001.
2. Securities Valuations, Securities Transactions and Related Income:
------------------------------------------------------------------
Listed securities are valued at the last sales price on the principal
exchange where such securities are traded. Listed securities for which last
sales prices are not available are valued at the mean of the latest bid and
asked price in the principal market where such securities are traded. Unlisted
securities are valued at the latest bid price. Short-term investments maturing
in 60 days or less are valued at amortized cost or cost, which approximates
market value. Investments in other
(Continued)
B-22
FIFTH THIRD FUNDS
Notes to Pro Forma Financial Statements
(Unaudited)
open-end investment companies are valued at net asset value. Investments for
which there are no such quotations are valued at fair value as determined in
good faith by the Advisor under the direction of the Board of Trustees.
Securities transactions are accounted for on the date the security is
purchased or sold (trade date). Dividend income is recorded on the ex-dividend
date. Gains or losses realized on sales of securities are determined by
comparing the identified cost of the security lot sold with the net sales
proceeds.
B-23
Fifth Third Large Cap Growth
Fifth Third Large Cap Value
Pro Forma Combining Schedule of Portfolio Investments
As of 01/31/02
(Unaudited)
Fifth Third Fifth Third Fifth Third
Large Cap Fifth Third Pro Forma Large Large Pro Forma
Growth Large Cap Value Combined Cap Growth Cap Value Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stocks
- ------------------------------------------------------------------------------------------------------------------------------------
Aerospace & Defense
18,200 65,725 83,925 Boeing Co. $ 745 $ 2,692 $ 3,437
- 18,750 18,750 Lockheed Martin Corp. $ - $ 993 $ 993
-------- ---------- ----------
$ 745 $ 3,685 $ 4,430
- ------------------------------------------------------------------------------------------------------------------------------------
Automotive
- 31,525 31,525 Delphi Automotive $ - $ 450 $ 450
Systems Corp.
38,100 109,700 147,800 Ford Motor Co. $ 583 $ 1,678 $ 2,261
- 31,200 31,200 Genuine Parts Co. $ 1,596 $ 1,596
11,300 22,650 33,950 General Motors Corp. $ 578 $ 805 $ 1,383
11,600 - 11,600 Harley Davidson, Inc. $ 661 $ - $ 661
- 6,350 6,350 TRW, Inc. $ - $ 269 $ 269
-------- ---------- ----------
$ 1,822 # $ 4,798 # $ 6,620
- ------------------------------------------------------------------------------------------------------------------------------------
Banking
32,000 90,100 122,100 Bank of America Corp. $ 2,016 $ 5,679 $ 7,695
22,000 37,200 Bank of New York., Inc. $ 902 $ 1,524 $ 2,426
24,200 77,500 101,700 Bank One Corp. $ 908 $ 2,906 $ 3,814
- 23,900 23,900 BB&T Corp. $ - $ 842 $ 842
- 12,500 12,500 Comerica, Inc. $ - $ 704 $ 704
- 29,162 29,162 Fifth Third Bancorp.** $ - $ 1,844 $ 1,844
22,500 63,675 86,175 FleetBoston Financial $ 756 $ 2,141 $ 2,897
Corp.
- 16,500 16,500 Huntington Bancshares $ - $ 289 $ 289
41,200 - 41,200 J.P. Morgan Chase & Co. $ 1,403 $ - $ 1,403
- 22,400 22,400 KeyCorp. $ - $ 551 $ 551
10,200 23,900 34,100 Mellon Financial Corp. $ 392 $ 918 $ 1,310
- 34,300 34,300 National City Corp. $ - $ 965 $ 965
4,600 10,900 15,500 Northern Trust Corp. $ 269 $ 636 $ 905
- 20,200 20,200 PNC Bank Corp. $ - $ 1,167 $ 1,167
- 18,000 18,000 SouthTrust Corp. $ - $ 444 $ 444
12,000 17,000 29,000 State Street Corp. $ 645 $ 914 $ 1,559
- 13,400 13,400 SunTrust Banks, Inc. $ - $ 825 $ 825
39,500 - 39,500 U.S. Bancorp. $ 822 $ - $ 822
- 6,800 6,800 Union Planters Corp. $ - $ 304 $ 304
20,400 76,000 96,400 Wachovia Corp. $ 678 $ 2,527 $ 3,205
- 63,200 63,200 Washington Mutual, Inc. $ - $ 2,169 $ 2,169
34,200 86,000 120,200 Wells Fargo Co. $ 1,587 $ 3,990 $ 5,577
-------- ---------- ----------
$ 10,378 # $ 31,339 # $ 41,717
- ------------------------------------------------------------------------------------------------------------------------------------
Basic Materials
18,000 61,800 3,697,489 Alcoa, Inc. $ 645 $ 2,215 $ 2,860
- 32,000 202,195 Barrick Gold Corp. $ - $ 550 $ 550
- 9,500 3,102,228 Inco, Ltd. (b) $ - $ 173 $ 173
- 10,500 10,521,000 Newmont Mining Corp. $ - $ 229 $ 229
- 8,225 2,839,347 Nucor Corp. $ - $ 492 $ 492
-------- ---------- ----------
$ 645 $ 3,659 $ 4,304
- ------------------------------------------------------------------------------------------------------------------------------------
Building & Construction
- 15,425 15,425 Wayerhaeuser Co. $ - $ 900 $ 900
-------- ---------- ----------
$ - $ 900 $ 900
- ------------------------------------------------------------------------------------------------------------------------------------
Business Services
3,700 5,825 9,525 Avery Dennison Corp. $ 220 $ 347 $ 567
6,200 10,000 16,200 Convergys Corp. (b) $ 196 $ 317 $ 513
5,500 12,050 17,550 Pitney Bowes, Inc. $ 231 $ 503 $ 734
-------- ---------- ----------
B-24
Fifth Third Large Cap Growth
Fifth Third Large Cap Value
Pro Forma Combining Schedule of Portfolio Investments
As of 01/31/02
(Unaudited)
Fifth Third Fifth Third Fifth Third
Large Cap Fifth Third Pro Forma Large Large Pro Forma
Growth Large Cap Value Combined Cap Growth Cap Value Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
$ 647 $ 1,167 $ 1,814
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals
- 15,400 15,400 Air Products & Chemical, $ - $ 712 $ 712
Inc.
18,700 53,600 72,300 Dow Chemical Co. $ 552 $ 1,583 $ 2,135
21,600 58,900 80,500 E.I. Du Pont de Nemours $ 954 $ 2,602 $ 3,556
& Co.
- 8,700 8,700 Eastman Chemical Co. $ - $ 349 $ 349
- 7,300 7,300 Ecolab, Inc. $ - $ 312 $ 312
- 9,900 9,900 Praxair, Inc. $ - $ 575 $ 575
- 9,800 9,800 Sigma-Aldrich Corp. $ - $ 410 $ 410
-------- ---------- ----------
$ 1,506 $ 6,543 $ 8,049
- ------------------------------------------------------------------------------------------------------------------------------------
Computers Software & Services
10,900 - 10,900 Adobe Systems, Inc. $ 367 $ - $ 367
- 10,000 10,000 Autodesk, Inc. $ - $ 410 $ 410
20,000 31,700 51,700 Automatic Data $ 1,080 $ 1,712 $ 2,792
Processing, Inc.
- 16,300 16,300 BMC Software, Inc. (b) $ - $ 288 $ 288
7,000 - 7,000 Citrix Systems, Inc. (b) $ 121 $ - $ 121
35,100 112,675 147,775 Compaq Computer Corp. $ 433 $ 1,392 $ 1,825
- 38,400 38,400 Computer Associates $ - $ 1,323 $ 1,323
I nternational, Inc.
- 12,250 12,250 Computer Scieces $ - $ 545 $ 545
Corp. (b)
5,700 - 5,700 Comverse Technology, $ 122 $ - $ 122
Inc. (b)
77,800 132,000 209,800 Dell Computer Corp. (b) $ 2,139 $ 3,629 $ 5,768
17,400 23,750 41,150 Electronic Data Systems $ 1,089 $ 1,487 $ 2,576
Corp.
10,300 19,600 29,900 First Data Corp. $ 852 $ 1,622 $ 2,474
40,300 125,800 166,100 Hewlett-Packard Co. $ 891 $ 2,781 $ 3,672
163,600 260,900 424,500 Microsoft Corp. (b) $ 10,423 $ 16,622 $ 27,045
165,600 285,300 450,900 Oracle Corp. (b) $ 2,857 $ 4,924 $ 7,781
- 27,000 27,000 Parametric Technology $ - $ 186 $ 186
Corp. (b)
9,400 - 9,400 Paychex, Inc. $ 345 $ - $ 345
9,000 - 9,000 PeopleSoft, Inc. (b) $ 292 $ - $ 292
15,500 - 5,500 Siebel Systems, Inc. (b) $ 549 $ - $ 549
97,100 154,400 251,500 Sun Microsystems, $ 1,045 $ 1,661 $ 2,706
Inc. (b)
- 20,000 20,000 Unisys Corp. (b) $ - $ 250 $ 250
12,300 - 12,300 VERITAS Coftware $ 523 $ - $ 523
Corp. (b)
-------- ---------- ----------
$ 23,128 # $ 38,832 # $ 61,960
- ------------------------------------------------------------------------------------------------------------------------------------
Computer Systems & Equipment
212,500 349,000 202,195 Cisco Systems, Inc. (b) $ 4,208 $ 6,910 $ 11,118
50,900 80,000 10,521,000 IBM Corp. $ 5,491 $ 8,631 $ 14,122
-------- ---------- ----------
$ 9,699 # $ 15,541 # $ 25,240
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclical
- 40,500 40,500 Carnival Corp. $ - $ 1,095 $ 1,095
-------- ---------- ----------
$ - $ 1,095 $ 1,095
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Durable
- 9,000 9,000 Danaher Corp. $ - $ 574 $ 574
- 4,600 4,600 Whirlpool Corp. $ - $ 334 $ 334
-------- ---------- ----------
$ - $ 908 $ 908
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Durable
- 10,375 10,375 Alberta-Culver Co., $ - $ 484 $ 484
Class B
7,200 - 7,200 Avon Products, Inc. $ 354 $ - $ 354
16,700 28,000 44,700 Colgate-Palmolive Co. $ 954 $ 1,600 $ 2,554
- 15,000 15,000 Fortune Brands, Inc. $ - $ 611 $ 611
32,200 36,000 68,200 Gillette Co. $ 1,072 $ 1,199 $ 2,271
16,000 26,800 42,800 Kimberly-Clark Corp. $ 965 $ 1,616 $ 2,581
- 21,700 21,700 Nike, Inc., Class B $ - $ 1,300 $ 1,300
B-25
Fifth Third Large Cap Growth
Fifth Third Large Cap Value
Pro Forma Combining Schedule of Portfolio Investments
As of 01/31/02
(Unaudited)
Fifth Third Fifth Third Fifth Third
Large Cap Fifth Third Pro Forma Large Large Pro Forma
Growth Large Cap Value Combined Cap Growth Cap Value Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
- 31,500 31,500 Pactiv Corp.(b) $ - $ 567 $ 567
60,700 111,500 172,200 Philip Morris Cos., Inc. $ 3,042 $ 5,587 $ 8,629
34,500 58,700 93,200 Proctor & Gamble Co. $ 2,818 $ 4,795 $ 7,613
- 8,200 8,200 V.F. Corp. $ - $ 333 $ 333
----------- ----------- ---------
$ 9,205 $ 18,092 $ 27,297
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Services
- 6,000 6,000 Adolph Coors Co. $ - $ 316 $ 316
26,800 35,000 61,800 Anheuser-Busch $ 1,267 $ 1,654 $ 2,921
Co., Inc.
- 44,100 44,100 Archer-Daniels- $ - $ 615 $ 615
Midland Co.
74,800 110,000 184,800 Coca-Cola Co. $ 3,273 $ 4,813 $ 8,086
- 17,900 17,900 Eastman Kodak Co. $ - $ 508 $ 508
- 22,900 22,900 Gannett, Inc. $ - $ 1,545 $ 1,545
- 32,500 32,500 International $ - $ 1,358 $ 1,358
Paper Co.
12,200 19,800 32,000 Kellogg Co. $ 376 $ 611 $ 987
- 19,900 19,900 Marriott Inter- $ - $ 812 $ 812
national, Inc.
- 21,900 21,900 Mattel, Inc. $ - $ 416 $ 416
- 8,225 8,225 New York Times Co. $ - $ 347 $ 347
55,300 82,800 138,100 PepsiCo, Inc. $ 2,770 $ 4,147 $ 6,917
- 39,759 39,759 Sara Lee Corp. $ - $ 841 $ 841
- 17,500 17,500 Starwood Hotels & $ - $ 599 $ 599
Resorts Worldwide,
Inc.
- 18,000 18,000 Tribune Co. $ - $ 669 $ 669
- 7,650 7,650 U.S.T., Inc. $ - $ 267 $ 267
15,000 29,130 44,130 Unileveler NV $ 845 $ 1,641 $ 2,486
- 34,000 34,000 Waste Management, $ - $ 980 $ 980
Inc.
----------- ----------- ---------
$ 8,531 #$ 22,139 #$ 30,670
- ------------------------------------------------------------------------------------------------------------------------------------
Diversified Operations
- 86,000 86,000 Dendant Corp. (b) $ - $ 1,503 $ 1,503
- 31,700 31,700 Emerson Electric Co. $ - $ 1,837 $ 1,837
- 10,975 10,975 Johnson Controls, $ - $ 923 $ 923
Inc.
- 12,300 12,300 Textron, Inc. $ - $ 564 $ 564
14,600 29,209 43,809 United Technologies $ 1,003 $ 2,007 $ 3,010
Corp. ----------- ----------- ---------
$ 1,003 $ 6,834 $ 7,837
- ------------------------------------------------------------------------------------------------------------------------------------
Electronics
- 18,250 18,250 Advanced Micro $ - $ 293 $ 293
Devices, Inc. (b)
- 27,375 27,375 Agilent Technologies, $ - $ 831 $ 831
Inc. (b)
8,000 19,500 27,500 Altera Corp. (b) $ 201 $ 490 $ 691
13,700 18,200 31,900 Analog Devices, $ 600 $ 797 $ 1,397
Inc. (b)
24,200 43,000 67,200 Applied Materials, $ 1,056 $ 1,877 $ 2,933
Inc. (b)
58,700 113,200 171,900 EMC Corp. (b) $ 963 $ 1,856 $ 2,819
9,000 - 9,000 Emerson Electric Co. $ 521 $ - $ 521
293,400 - 293,400 Genral Electric Co. $ 10,900 $ - $ 10,900
202,200 322,200 524,400 Intel Corp. $ 7,085 $ 11,289 $ 18,374
6,100 - 6,100 KA-Tencor Corp. (b) $ 349 $ - $ 349
9,600 15,900 25,500 Linear Technology $ 397 $ 658 $ 1,055
Corp.
10,300 15,600 25,900 Maxim Integrated $ 572 $ 866 $ 1,438
Products, Inc. (b)
12,300 29,500 41,800 Micron Technology, $ 415 $ 996 $ 1,411
Inc. (b)
45,600 121,000 166,600 Motorola, Inc. $ 607 $ 1,611 $ 2,218
- 15,000 15,000 Novellus Systems, $ - $ 641 $ 641
Inc. (b)
3,200 15,600 18,800 PerkinElmer, Inc. $ 94 $ 460 $ 554
- 18,250 18,250 Rockwell Inter- $ - $ 351 $ 351
national Corp.
- 16,960 16,960 Sanmina Corp. (b) $ - $ 249 $ 249
- 36,050 36,050 Solectron Corp. (b) $ - $ 423 $ 423
- 8,200 8,200 Tektonix, Inc. (b) $ - $ 201 $ 201
B-26
Fifth Third Large Cap Growth
Fifth Third Large Cap Value
Pro Forma Combining Schedule of Portfolio Investments
As of 01/31/02
(Unaudited)
Fifth Third Fifth Third Fifth Third
Large Cap Fifth Third Pro Forma Large Large Pro Forma
Growth Large Cap Value Combined Cap Growth Cap Value Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- -----------------------------------------------------------------------------------------------------------------------------------
51,900 106,725 158,625 Texas Instruments, Inc. $ 1,620 $ 3,330 $ 4,950
# 6,000 - 6,000 Waters Corp. (b) $ 208 $ - $ 208
6,500 16,935 23,435 Xilinx, Inc. (b) $ 282 $ 711 $ 993
----------- ---------- ---------
$ 25,870 #$ 27,930 #$ 53,800
- -----------------------------------------------------------------------------------------------------------------------------------
Energy
- 13,500 13,500 Anadarko Petroleum Corp. $ - $ 663 $ 663
- 18,000 18,000 Baker Hughes, Inc. $ - $ 634 $ 634
19,800 58,100 77,900 Chevron Corp. $ 1,659 $ 4,869 $ 6,528
- 54,025 54,025 Conoco, Inc., Class B $ - $ 1,521 $ 1,521
- 14,600 14,600 Devon Energy Corp. $ - $ 543 $ 543
10,600 27,400 38,000 El Paso Energy Corp. $ 402 $ 1,040 $ 1,442
132,300 409,800 542,100 Exxon Mobil corp. $ 5,167 $ 16,002 $ 21,169
- 30,000 30,000 Halliburton Co. $ - $ 413 $ 413
- 10,200 10,200 Kerr-Mcgee Corp. $ - $ 540 $ 540
- 26,575 26,575 Marathon Oil Corp. $ - $ 745 $ 745
- 53,300 53,300 Mirant Corp. (b) $ - $ 534 $ 534
- 18,500 18,500 Phillips Petroleum Co. $ - $ 1,082 $ 1,082
40,300 119,000 159,300 Royal Dutch Petroleum $ 2,014 $ 5,946 $ 7,960
Co., ADR
11,900 38,500 50,400 Schlumberger, Ltd. $ 671 $ 2,171 $ 2,842
- 18,000 18,000 Sunoco, Inc. $ - $ 694 $ 694
- 11,100 11,100 Transocean Sedco $ - $ 340 $ 340
Forex, Inc.
- 27,025 27,025 Unocal Corp. $ - $ 945 $ 945
----------- ---------- ---------
$ 9,913 #$ 38,682 #$ 48,595
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Services
35,900 77,237 113,137 American Express Co. $ 1,287 $ 2,769 $ 4,056
6,200 10,986 17,186 Capital One Financial $ 311 $ 551 $ 862
Corp.
100,800 326,700 427,500 Citigroup, Inc. $ 4,777 $ 15,486 $ 20,263
13,500 - 13,500 Concord EFS, Inc. (b) $ 394 $ - $ 394
28,200 48,000 76,200 Fannie Mae $ 2,282 $ 3,886 $ 6,168
14,400 34,500 48,900 Freddie Mac $ 967 $ 2,316 $ 3,283
- 12,800 12,800 H & R Block, Inc. $ - $ 592 $ 592
- 34,700 34,700 Household Inter- $ - $ 1,778 $ 1,778
national, Inc.
- 104,800 104,800 J.P. Morgan Chase & Co. $ - $ 3,568 $ 3,568
8,500 13,800 22,300 Marsch & McLennan Cos., $ 866 $ 1,406 $ 2,272
Inc.
- 9,400 9,400 MBIA, Inc. $ - $ 506 $ 506
17,700 52,275 69,975 MBNA Corp. $ 620 $ 1,830 $ 2,450
17,500 53,400 70,900 Merrill Lynch & Co., Inc. $ 892 $ 2,722 $ 3,614
- 15,800 15,800 MGIC Investment Corp. $ - $ 1,059 $ 1,059
23,100 73,200 96,300 Morgan Stanley Dean $ 1,271 $ 4,026 $ 5,297
Witter & Co.
5,200 105,200 110,400 USA Education, Inc. $ 468 $ 2,190 $ 2,658
----------- ---------- ---------
$ 14,135 #$ 44,685 #$ 58,820
- ------------------------------------------------------------------------------------------------------------------------------------
Food and Beverages
10,000 - 10,000 General Mills, Inc. $ 495 $ - $ 495
9,000 - 9,000 H.J. Heinz Co. $ 373 $ - $ 373
6,800 - 6,800 Wm. Wrigley Jr. Co. $ 372 $ - $ 372
----------- ---------- ---------
$ 1,240 $ - $ 1,240
- ------------------------------------------------------------------------------------------------------------------------------------
Foods
20,900 - 20,900 Sysco Corp. $ 619 $ - $ 619
----------- ---------- ---------
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care
19,900 30,300 50,200 Baxter International, $ 1,111 $ 1,692 $ 2,803
Inc.
7,800 - 7,800 Biomet, Inc. $ 252 $ - $ 252
62,700 98,800 161,500 Bristol-Myers Squibb Co. $ 2,845 $ 4,483 $ 7,328
B-27
Fifth Third Large Cap Growth
Fifth Third Large Cap Value
Pro Forma Combining Schedule of Portfolio Investments
As of 01/31/02
(Unaudited)
Fifth Third Fifth Third Fifth Third
Large Cap Fifth Third Pro Forma Large Large Pro Forma
Growth Large Cap Value Combined Cap Growth Cap Value Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
14,100 22,500 36,600 Cardinal Health, Inc. $ 929 $ 1,483 $ 2,412
5,800 - 5,800 Genzyme Corp. (b) $ 265 $ - $ 265
6,700 10,300 17,000 Guidant Corp. (b) $ 322 $ 495 $ 817
16,100 32,400 48,500 HCA - The healthcare Co. $ 684 $ 1,377 $ 2,061
- 42,500 42,500 HEALTHSOUTH Corp. (b) $ - $ 497 $ 497
- 25,000 25,000 Humana, Inc. (b) $ - $ 311 $ 311
12,000 - 12,000 IMS Health, Inc. $ 239 $ - $ 239
- 15,200 15,200 McKesson HBOC, Inc. $ - $ 585 $ 585
38,900 45,800 84,700 Medtronic, Inc. $ 1,917 $ 2,257 $ 4,174
193,700 303,000 496,700 Pfizer, Inc. $ 8,071 $ 12,625 $ 20,696
6,100 - 6,100 Stryker Corp. $ 358 $ - $ 358
- 19,000 19,000 Tenet Healthcare $ - $ 1,212 $ 1,212
Corp. (b)
9,600 - 9,600 UnitedHealth Group, Inc. $ 714 $ - $ 714
- 6,100 6,100 Wellpoint Health $ - $ 774 $ 774
Networks (b)
5,900 - 5,900 Zimmer Holdings, $ 192 $ - $ 192
Inc. (b) -------- ---------- ----------
$ 17,899 # $ 27,791 # $ 45,690
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance
- 8,275 8,275 Aetna, Inc. $ - $ 284 $ 284
26,300 26,300 AFLAC, Inc. $ - $ 687 $ 687
- 45,050 45,050 Allstate Corp. $ - $ 1,453 $ 1,453
54,600 173,076 227,676 American International $ 4,049 $ 12,835 $ 16,884
Group, Inc.
- 13,200 13,200 Chubb Corp. $ - $ 882 $ 882
- 13,250 13,250 CIGNA Corp. $ - $ 1,219 $ 1,219
- 15,345 15,345 Hartford Financial
Services Group, Inc. $ - $ 1,016 $ 1,016
- 10,650 10,650 Jefferson-Pilot Corp. $ - $ 510 $ 510
15,000 15,000 John Hancock Financial $ - $ 576 $ 576
Services, Inc.
- 13,500 13,500 Lincoln National Corp. $ - $ 695 $ 695
- 42,000 42,000 MetLife, Inc. $ - $ 1,276 $ 1,276
- 16,175 16,175 Torchmark Corp. $ - $ 614 $ 614
-------- ---------- ----------
$ 4,049 # $ 22,047 # $ 26,096
- ------------------------------------------------------------------------------------------------------------------------------------
Manufacturing
- 472,000 472,000 General Electric Co. $ - $ 17,535 $ 17,535
23,100 57,000 80,100 Honeywell International, $ 776 $ 1,916 $ 2,692
Inc.
- 17,900 17,900 Illinois Tool Works, $ - $ 1,278 $ 1,278
Inc.
- 18,000 18,000 Ingersoll-Rand Co. $ - $ 796 $ 796
8,300 18,000 26,300 Minnesota Mining & $ 920 $ 1,994 $ 2,914
Manufacturing Co.
62,500 105,000 167,500 Tyco International, Ltd. $ 2,197 $ 3,691 $ 5,888
-------- ---------- ----------
$ 3,893 # $ 27,210 # $ 31,103
- ------------------------------------------------------------------------------------------------------------------------------------
Media/Publishing
103,600 217,000 320,600 AOL Time Warner, $ 2,725 $ 5,709 $ 8,434
Inc. (b)
12,200 32,600 44,800 Clear Channel $ 562 $ 1,501 $ 2,063
Communications,
Inc. (b)
19,500 55,000 74,500 Comcast Corp. (b) $ 693 $ 1,954 $ 2,647
- 18,600 18,600 Interpublic Group $ - $ 537 $ 537
Cos., Inc.
4,600 9,900 14,500 McGraw-Hill Cos., Inc. $ 295 $ 634 $ 929
5,600 - 5,600 Omnicom Group, Inc. $ 489 $ - $ 489
40,800 133,600 174,400 The Walt Disney Co. $ 859 $ 2,814 $ 3,673
37,000 94,200 131,200 Viacom, Inc., (b) $ 1,480 $ 3,767 $ 5,247
-------- ---------- ----------
$ 7,103 # $ 16,916 # $ 24,019
- ------------------------------------------------------------------------------------------------------------------------------------
Pharmacauticals
46,600 50,000 96,600 Abbott Laboratories $ 2,689 $ 2,885 $ 5,574
4,000 - 4,000 Allergan, Inc. $ 267 $ - $ 267
40,200 66,500 106,700 American Home Products $ 2,599 $ 4,300 $ 6,899
Corp.
35,100 42,000 77,100 Amgen, Inc. (b) $ 1,948 $ 2,331 $ 4,279
36,100 55,500 91,600 Eli Lilly & Co. $ 2,711 $ 4,168 $ 6,879
B-28
Fifth Third Large Cap Growth
Fifth Third Large Cap Value
Pro Forma Combining Schedule of Portfolio Investments
As of 01/31/02
(Unaudited)
Fifth Third Fifth Third Fifth Third
Large Cap Fifth Third Pro Forma Large Large Pro Forma
Growth Large Cap Value Combined Cap Growth Cap Value Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
6,600 - 6,600 Forest Laboratories, $ 547 $ - $ 547
Inc.
92,500 140,000 232,500 Johnson & Johnson $ 5,320 $ 8,052 $ 13,372
6,900 - 6,900 King Pharmaceuticals, $ 251 $ - $ 251
Inc.
11,800 - 11,800 Medimmune, Inc. (b) $ 500 $ - $ 500
73,400 116,600 190,000 Merck & Co., Inc. $ 4,344 $ 6,900 $ 11,244
38,700 65,700 104,400 Pharmacia Corp. $ 1,567 $ 2,661 $ 4,228
40,800 74,800 115,600 Schering-Plough Corp. $ 1,321 $ 2,422 $ 3,743
-------- ---------- ----------
$ 24,064 # $ 33,719 # $ 57,783
- ------------------------------------------------------------------------------------------------------------------------------------
Restaurants
26,900 86,300 113,200 Mcdonald's Corp. $ 731 $ 2,346 $ 3,077
-------- ---------- ----------
$ 731 $ 2,346 $ 3,077
- ------------------------------------------------------------------------------------------------------------------------------------
Retail
3,300 10,000 13,300 AutoZone, Inc. (b) $ 223 $ 677 $ 900
9,800 11,100 20,900 Bed Bath & Beyond, $ 339 $ 821 $ 1,160
Inc. (b)
7,200 - 7,200 Best Buy Co. (b) $ 533 $ - $ 533
- 24,800 24,800 Costco Wholesale $ - $ 1,141 $ 1,141
Corp. (b)
- 22,150 22,150 CVS Corp. $ - $ 602 $ 602
- 15,500 15,500 Federated Department $ - $ 645 $ 645
Stores, Inc. (b)
69,600 116,500 186,100 Home Depot, Inc. $ 3,486 $ 5,836 $ 9,322
13,800 17,450 31,250 Kohl's Corp. (b) $ 915 $ 1,157 $ 2,072
24,600 41,300 65,900 Kroger Co. (b) $ 507 $ 851 $ 1,358
- 43,450 43,450 Limited, Inc. $ - $ 806 $ 806
24,100 39,000 63,100 Lowe's Cos., Inc. $ 1,110 $ 1,797 $ 2,907
- 21,100 21,100 May Department $ - $ 776 $ 776
Stores Co.
8,500 8,800 17,300 RadioShack Corp. $ 268 $ 277 $ 545
10,500 28,675 39,175 Safeway, Inc. (b) $ 425 $ 1,160 $ 1,585
- 24,100 24,100 Sears Roebuck & Co. $ - $ 1,273 $ 1,273
- 38,000 38,000 Staples, Inc. (b) $ - $ 692 $ 692
11,200 - 11,200 Starbucks Corp. (b) $ 266 $ - $ 266
- 31,200 31,200 SUPERVALU, Inc. $ - $ 770 $ 770
26,900 44,900 71,800 Target Corp. $ 1,195 $ 1,994 $ 3,189
- 9,500 9,500 Tiffany & Co. $ - $ 339 $ 339
134,600 216,400 351,000 Wal-Mart Stores, Inc. $ 8,073 $ 12,981 $ 21,054
27,000 47,000 74,000 Walgreen Co. $ 980 $ 1,705 $ 2,685
-------- ---------- ----------
$ 18,320 # $ 36,300 # $ 54,620
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications
- 17,700 17,700 Alltell Corp. $ - $ 982 $ 982
38,100 168,000 206,100 AT&T Corp. $ 674 $ 2,974 $ 3,648
37,100 131,300 168,400 AT&T Wireless Services, $ 427 $ 1,510 $ 1,937
Inc. (b)
36,100 110,000 146,100 Bellsouth Corp. $ 1,445 $ 4,400 $ 5,845
22,700 38,200 60,900 QUALCOMM, Inc. (b) $ 1,000 $ 1,682 $ 2,682
- 81,000 81,000 Qwest Communications $ - $ 851 $ 851
International, Inc.
74,000 194,000 268,000 SBC Communications, $ 2,771 $ 7,265 $ 10,036
Inc.
- 49,000 49,000 Sprint Corp. $ - $ 867 $ 867
27,900 38,000 65,900 Sprint Corp., PCS $ 457 $ 622 $ 1,079
Group (b)
54,600 162,600 217,200 Verizon Communications, $ 2,531 $ 7,537 $ 10,068
Inc.
45,000 144,000 189,000 WorldCom, Inc. (b) $ 452 $ 1,447 $ 1,899
-------- ---------- ----------
$ 9,757 # $ 30,137 # $ 39,894
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications - Equipment
- 55,000 55,000 Corning, Inc. $ - $ 442 $ 442
100,000 100,000 Lucent Technologies, $ - $ 654 $ 654
- 129,500 129,500 Nortel Networks Corp., $ - $ 938 $ 938
ADR -------- ---------- ----------
$ - # $ 2,034 # $ 2,034
- ------------------------------------------------------------------------------------------------------------------------------------
B-29
Fifth Third Large Cap Growth
Fifth Third Large Cap Value
Pro Forma Combining Schedule of Portfolio Investments
As of 01/31/02
(Unaudited)
Fifth Third Fifth Third Fifth Third
Large Cap Fifth Third Pro Forma Large Large Pro Forma
Growth Large Cap Value Combined Cap Growth Cap Value Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - Airline
- 10,000 10,000 AMR Corp. $ - $ 249 $ 249
- 25,700 25,700 Burlington Northern $ - $ 726 $ 726
Santa Fe Corp.
- 7,000 7,000 Delta Air Lines, Inc. $ - $ 221 $ 221
- 19,450 19,450 FedEx Corp. (b) $ - $ 1,042 $ 1,042
- 42,000 42,000 Southwest Airlines Co. $ - $ 795 $ 795
- 23,925 23,925 Union Pacific Corp. $ - $ 1,485 $ 1,485
----------- ----------- ---------
$ - #$ 4,518 $ 4,518
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities
- 24,400 24,400 Allegheny Energy, Inc. $ - $ 803 $ 803
- 24,800 24,800 American Electric $ - $ 1,035 $ 1,035
Power Co.
- 59,300 59,300 Calpine Corp. $ - $ 664 $ 664
- 17,000 17,000 Consolidated Edison, Inc. $ - $ 697 $ 697
- 18,900 18,900 Dominion Resources, Inc. $ - $ 1,113 $ 1,113
- 13,300 13,300 DTE Energy Co. $ - $ 545 $ 545
15,500 64,700 80,200 Duke Energy Corp. $ 540 $ 2,255 $ 2,795
6,700 43,900 50,600 Dynergy, Inc. $ 160 $ 1,047 $ 1,207
- 16,000 16,000 Entergy Corp. $ - $ 659 $ 659
6,600 28,000 34,600 Exelon Corp. $ 325 $ 1,379 $ 1,704
- 18,350 18,350 First Energy Corp. $ - $ 683 $ 683
- 12,200 12,200 FPL Group, Inc. $ - $ 654 $ 654
- 21,200 21,200 KeySpan Corp. $ - $ 686 $ 686
- 16,566 16,566 Nisource, Inc. $ - $ 345 $ 345
- 14,600 14,600 PPL Corp. $ - $ 492 $ 492
- 13,000 13,000 Public Service Enteprise $ - $ 547 $ 547
Group, Inc.
- 36,875 36,875 Reliant Energy, Inc. $ - $ 925 $ 925
- 49,000 49,000 Southern Co. $ - $ 1,208 $ 1,208
- 31,050 31,050 The Williams Companies, $ - $ 549 $ 549
- 31,000 31,000 TXU Corp. $ - $ 1,510 $ 1,510
- 32,050 32,050 Xcel Energy, Inc. $ - $ 856 $ 856
----------- ----------- ---------
$ 1,025 #$ 18,652 #$ 19,677
- ------------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks $ 205,927 #$ 488,499 #$ 694,426
- ------------------------------------------------------------------------------------------------------------------------------------
B-30
Fifth Third Large Cap Growth
Fifth Third Large Cap Value
Pro Forma Combining Schedule of Portfolio Investments
As of 01/31/02
(Unaudited)
Fifth Third Fifth Third Fifth Third
Large Cap Fifth Third Pro Forma Large Large Pro Forma
Growth Large Cap Value Combined Cap Growth Cap Value Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Money Market Funds
581 - 278 Dreyfus Cash Management Money $ 1 $ - $ 1
Market Fund
1,521,047 1,879,103 6,205,327 Federated Prime Value $ 1,521 $ 1,879 $ 3,400
Obligations Money Market Fund ----------------------------------------
Total Investment Companies $ 1,522 $ 1,879 $ 3,401
- ------------------------------------------------------------------------------------------------------------------------------------
Total (Cost $223,097, $342,697 and $565,794 respectively) (a) $ 207,449 # $ 490,378 # $ 697,827
----------------------------------------
Other assets in excess of liabilities $ 52 $ 84 $ 136
----------------------------------------
Net Assets $ 207,501 # $ 490,462 # $ 697,963
========================================
(a) Cost for financial reporting and Federal tax purposes and differs from value
by net unrealized depreciation of $15,648, Which is composed of $16,602
appreciation and $32,250 depreciation at January 31, 2002
(a) Cost for financial reporting and Federal tax purposes and differs from value
by net unrealized depreciation of $147,681, Which is composed of $177,391
appreciation and $29,710 depreciation at January 31, 2002
(b) Non - income producing security.
ADR - American Depository Receipt
At July 31, 2001, the Fund's open long future contracts were as follows:
# Of contracts 5
Standard & Poor's
Opening Contract Type 500, 3/20/02
National Amount $ 1,398
Unrealized Appreciation $ 15
Value $ 1,413
B-31
Fifth Third Large Cap Growth Fund
Fifth Third Large Cap Value Fund
Pro Forma Combining Statements of Assets and Liabilities
As of 01/31/02
(Unaudited)
(Amounts in Thousands)
Fifth Third Fifth Third Pro Forma
Large Cap Large Cap Pro Forma Combined
Growth Fund Value Fund Adjustments (Note 1)
------------ ------------ ------------ ------------
Assets:
Investment, at value
(cost $273,135,168, $401,577,656 and
$674,712,824, respectively) $ 207,449 $ 490,378 $ - $ 697,827
Collateral for securities loaned - - - -
Interest and dividends receivable 169 449 - 618
Receivable for investments sold - 13 - 13
Receivable from Advisor - 2 - 2
Net receivable for futures contracts 19 - - 19
Other assets 25 12 - 37
--------- --------- -------- ---------
Total Assets 207,662 490,854 - 698,516
--------- --------- -------- ---------
Liabilities:
Payable for securities loaned - - - -
Payable for Fund shares redeemed - 11 - 11
Net payable for variation margin on futures contracts - - - -
Payable to Advisor and other affiliates 139 326 - 465
Distribution fees - 7 - 7
Other 22 48 - 70
--------- --------- -------- ---------
Total Liabilities 161 392 - 553
--------- --------- -------- ---------
Net Assets:
Paid-in capital 272,014 344,299 - 616,313
Accumulated net investment income 129 352 - 481
Accumulated net realized losses from investment
transactions, futures (49,009) (1,870) - (50,879)
Net unrealized depreciation on investments
and futures (15,633) 147,681 - 132,048
--------- --------- -------- ---------
Net Assets $ 207,501 $ 490,462 $ - $ 697,963
========= ========= ======== =========
Net Assets:
Institutional Shares $ 206,725 $ 459,924 $ - $ 666,649
Investment A shares 687 30,457 - 31,144
Investment B Shares 88 80 - 168
Investment C Shares 1 1 - 2
--------- --------- -------- ---------
Total $ 207,501 $ 490,462 $ - $ 697,963
========= ========= ======== =========
Shares of Beneficial Interest Outstanding
(Unlimited number of shares authorized,
no par value:)
Institutional Shares 24,810 33,266 (9,862)(a) 48,214
Investment A Shares 83 2,228 (33)(a) 2,278
Investment B Shares 11 6 (5)(a) 12
Investment C Shares - * - * - (a)* -
--------- --------- -------- ---------
Total 24,904 35,500 (9,900) 50,504
========= ========= ======== =========
Net Asset Value
Institutional Shares $ 8.33 $ 13.83 $ 13.83
========= ========= =========
Investment A Shares $ 8.32 $ 13.67 $ 13.67
========= ========= =========
Investment B Shares $ 8.31 $ 13.79 $ 13.57
========= ========= =========
Investment C Shares $ 8.31 $ 13.80 $ 13.80
========= ========= =========
- ----------
* Amount less than 500 shares.
(a) Adjustment to convert Large Cap Growth Shares Outstanding to Large Cap
Value Shares Outstanding based on Large Cap Value's NAV's.
B-32
Fifth Third Large Cap Growth Fund
Fifth Third Large Cap Value Fund
Pro Forma Combining Statements of Operations
For the period ended 01/31/02(a)
(Unaudited)
(Amounts in Thousands)
Fifth Third Fifth Third Pro Forma
Large Cap Large Cap Pro Forma Combined
Growth Fund Value Fund Adjustments (Note 1)
----------- ------------ ----------- ---------
INVESTMENT INCOME:
Dividend income $ 1,484 $ 4,084 $ - $ 5,568
Foreign tax withholding - - - -
----------- ------------ ----------- ---------
Total Income 1,484 4,084 - 5,568
----------- ------------ ----------- ---------
EXPENSES:
Investment advisory fees 799 1,861 - 2,660
Administration fees 206 482 - 688
Distribution services - Investment Shares 1 42 - 43
Other fees 103 211 (45)(b) 269
----------- ------------ ----------- ---------
Total expenses 1,109 2,596 (45) 3,660
----------- ------------ ----------- ---------
Less: Waiver and/or reimbursement from Advisor
and/or affiliates (25) (66) 21 (70)
----------- ------------ ----------- ---------
Net Expenses 1,084 2,530 (24) 3,590
----------- ------------ ----------- ---------
Net Investment Income 400 1,554 24 1,978
----------- ------------ ----------- ---------
Realized and Unrealized Gains/(Losses) on
Investments, Futures:
Net realized gains/(losses) from investment
transactions (21,275) (2,605) - (23,880)
Net realized gains/(losses) from futures
transactions 344 988 - 1,332
Change in unrealized depreciation on investments,
futures 5,760 (36,867) - (31,107)
----------- ------------ ----------- ---------
Net realized/unrealized losses from investments,
futures (15,171) (38,484) - (53,655)
----------- ------------ ----------- ---------
Change in net assets resulting from operations $ (14,771) $ (36,930) $ 24 $ (51,677)
=========== ============ =========== =========
- --------------------------------------------------------
(a) For the period from January 1, 2001 through July 31, 2001.
(b) Adjustment to reflect the fee structure when the two funds merge.
B-33
FIFTH THIRD FUNDS
Notes to Pro Forma Financial Statements
(Unaudited)
1. Basis of Combination:
---------------------
The unaudited Pro Forma Combining Statements of Assets and Liabilities,
Statements of Operations, and Schedules of Portfolio Investments reflects the
accounts of two investment portfolios offered by the Fifth Third Funds: the
Fifth Third Large Cap Growth Fund and the Fifth Third Large Cap Value Fund,
(collectively, the "Funds" and individually a "Fund") as if the proposed
reorganization occurred as of and for the six months ended January 31, 2002.
These statements have been derived from books and records utilized in
calculating daily net asset value at January 31, 2002.
The Reorganization Agreement provides that on the Closing Date of the
Reorganization, all of the assets and liabilities will be transferred as follows
such that at and after the Reorganization, the assets and liabilities of the
Fifth Third Large Cap Growth Fund become the assets and liabilities of the Large
Cap Value Fund.
In exchange for the transfer of assets and liabilities, the Large Cap Value
Fund will issue to the Large Cap Growth Fund full and fractional shares of the
Large Cap Value Fund, and the Large Cap Growth Fund will make a liquidating
distribution of such shares to its shareholders. The number of shares of the
Large Cap Value Fund so issued will be equal in value to the full and fractional
shares of the Large Cap Growth Fund that are outstanding immediately prior to
the Reorganization. At and after the Reorganization, all debts, liabilities and
obligations of the Large Cap Growth Fund will attach to the Large Cap Value Fund
and may thereafter be enforced against the Large Cap Value Fund to the same
extent as if the Large Cap Value Fund had incurred them. The pro forma
statements give effect to the proposed transfer described above.
Under the purchase method of accounting for business combinations under
generally accepted accounting principles, the basis on the part of the Large Cap
Value Fund, of the assets of the Large Cap Growth Fund will be the fair market
value of such assets on the Closing Date of the Reorganization. The Large Cap
Value Fund will recognize no gain or loss for federal tax purposes on its
issuance of shares in the Reorganization, and the basis to the Large Cap Value
Fund of the assets of the Large Cap Growth Fund received pursuant to the
Reorganization will equal the fair market value of the consideration furnished,
and costs incurred, by the Large Cap Value Fund in the Reorganization -- i.e.,
the sum of the liabilities assumed, the fair market value of the Large Cap Value
Funds shares issued, and such costs.
For accounting purposes, the Large Cap Value Fund is the surviving
portfolio of this Reorganization. As such, the Fifth Third Large Cap Growth
Fund, prior to the Closing Date, will declare a stock split causing the Net
Asset Value to match that of the Large Cap Value Fund as of the Closing Date.
The pro forma statements reflect the combined results of operations of the
Funds. However, should such Reorganization be effected, the statements of
operations of the Large Cap Growth Fund will not be restated for pre-combination
period results of the Large Cap Value Fund.
The Pro Forma Combining Statements of Assets and Liabilities, Statements of
Operations, and Schedules of Portfolio Investments should be read in conjunction
with the historical financial statements of the Funds incorporated by reference
in the Statement of Additional Information.
(Continued)
B-34
FIFTH THIRD FUNDS
Notes to Pro Forma Financial Statements
(Unaudited)
The Funds are each separate portfolios of the Fifth Third Funds,
respectively, which are registered as open-end management companies under the
Investment Company Act of 1940. The investment objectives of each fund are
listed below.
Fifth Third Large Cap Growth Fund seeks capital appreciation.
Fifth Third Large Cap Value Fund seeks long-term capital appreciation with
current income as a secondary objective.
The Funds each issue four classes of shares: Institutional, Investment A
Shares, Investment B Shares and Investment C Shares.
Under the terms of the investment advisory agreement between the Fifth
Third Funds and Fifth Third Asset Management Inc., the Trust's investment
advisor (the "Advisor"), the Advisor receives for its services and annual
investment advisory fee based on a percentage of each Fund's average daily net
assets (see table below). Such fees are accrued daily and paid monthly. For the
six months ended January 31, 2002, total investment advisory fees incurred by
the Funds were as follows (Amounts in thousands):
Percentage Fee Total Fees Fees Waived
-------------- ---------- -----------
Large Cap Growth Fund 0.70% $799 $-
Large Cap Value Fund 0.70% 1,861 -
Pro Forma Adjustments and Pro Forma Combined Columns
----------------------------------------------------
The pro forma adjustments and pro forma combined columns of the Statements
of Operations reflect the adjustments necessary to show expenses at the rates
which would have been in effect if the Funds were combined for the year ended
January 31, 2002. Investment advisory, administration, 12b-1, and accounting
fees in the pro forma combined column are calculated at the projected rates for
the Funds based upon the combined net assets of the Funds. Certain pro forma
adjustments were made to estimate the benefit of combining operations of
separate funds into one survivor fund.
The pro forma Schedules of Portfolio Investments give effect to the
proposed transfer of such assets as if the Reorganization had occurred at
January 31, 2002.
2. Securities Valuations, Securities Transactions and Related Income:
------------------------------------------------------------------
Listed securities are valued at the last sales price on the principal
exchange where such securities are traded. Listed securities for which last
sales prices are not available are valued at the mean of the latest bid and
asked price in the principal market where such securities are traded. Unlisted
securities are valued at the latest bid price. Short-term investments maturing
in 60 days or
(Continued)
B-35
FIFTH THIRD FUNDS
Notes to Pro Forma Financial Statements
(Unaudited)
less are valued at amortized cost or cost, which approximates market value.
Investments in other open-end investment companies are valued at net asset
value. Investments for which there are no such quotations are valued at fair
value as determined in good faith by the Advisor under the direction of the
Board of Trustees.
Securities transactions are accounted for on the date the security is
purchased or sold (trade date). Dividend income is recorded on the ex-dividend
date. Gains or losses realized on sales of securities are determined by
comparing the identified cost of the security lot sold with the net sales
proceeds.
B-36
PART C. OTHER INFORMATION
Item 15. Indemnification
Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 7 on Form N-1A filed September 27, 1991 (File Nos. 811-5669 and 33-24848).
Item 16. Exhibits
(1) Declaration of Trust of the Registrant including Amendments No. 1
through 7 (incorporated by reference to Registrant's Post-Effective
Amendment No. 15 on Form N-1A filed February 28, 1995).
(i) Amendment No. 8 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 19 on
Form N-lA filed on or about October 28, 1996).
(ii) Amendment No. 9 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 18 on
Form N-1A filed on or about October 1, 1996).
(iii) Amendment No. 10 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 22 on
Form N-1A filed on or about September 30, 1997).
(iv) Amendment No. 11 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 26 on
Form N-1A filed on or about January 21, 1998).
(v) Amendment No. 12 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 28 on
Form N-1A filed on or about October 30, 1998).
(vi) Amendment No. 13 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 28 on
Form N-1A filed on or about October 30, 1998).
(vii) Amendment No. 14 to the Declaration of Trust (incorporated by
reference to Registrants Post-Effective Amendment No. 29 on
Form N-1A filed on or about October 1, 1999).
(viii) Amendment No. 15 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 31 on
Form N-1A filed on or about March 15, 2000).
(ix) Amendment No. 16 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 33 on
Form N-1A filed on June 14, 2000).
(x) Amendment No. 17 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 42 on
Form N-1A filed on April 19, 2002).
(2) By-Laws of the Registrant (incorporated by reference to Registrant's
Post-Effective Amendment No. 15 on Form N-1A filed February 28, 1995).
(3) Not Applicable.
(4) Form of Plan of Reorganization of Fifth Third Funds is filed herewith.
(5) Rights of Shareholders. The following portions of the Registrant's
Declaration of Trust define the rights of Shareholders.
ARTICLE III
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest.
The beneficial interest in the Trust shall at all times be divided into
transferable Shares, without par value. Subject to the provisions of
Section 5 of this Article III, each Share shall have voting rights as
provided in Article VIII hereof, and holders of the Shares of any
Series shall be entitled to receive dividends, when and as declared
with respect thereto in the manner provided in Article X, Section 1
hereof. The Shares of any Series may be issued in two or more Classes,
as the Trustees may authorize pursuant to Article XII, Section
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8 hereof. Unless the Trustees have authorized the issuance of Shares of
a Series in two or more Classes, each Share of a Series shall represent
an equal proportionate interest in the assets and liabilities of the
Series with each other Share of the same Series, none having priority
or preference over another. If the Trustees have authorized the
issuance of Shares of a Series in two or more Classes, then the Classes
may have such variations as to dividend, redemption, and voting rights,
net asset values, expenses borne by the Classes, and other matters as
the Trustees have authorized provided that each Share of a Class shall
represent an equal proportionate interest in the assets and liabilities
of the class with each other Share of the same Class, none having
priority or preference over another. The number of Shares authorized
shall be unlimited. The Trustees may from time to time divide or
combine the Shares of any Series or Class into a greater or lesser
number without thereby changing the proportionate beneficial interests
in the Series or Class.
Section 4. No Pre-emptive Rights.
Shareholders shall have no pre-emptive or other right to subscribe to
any additional Shares or other securities issued by the Trust.
Fifth Third Government Money Market Fund;
Investment A Shares;
Institutional Shares;
Fifth Third Prime Money Market Fund;
Investment A Shares;
Investment B Shares;
Institutional Shares;
Fifth Third Tax Exempt Money Market Fund;
Investment A Shares;
Institutional Shares;
Fifth Third Quality Growth Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Equity Income Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Pinnacle Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
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Fifth Third Balanced Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Mid Cap Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third International Equity Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Technology Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Intermediate Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Long Term Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares
Fifth U. S. Government Securities Fund;
Investment A Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
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Fifth Third Intermediate Municipal Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Ohio Tax Free Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third U.S. Treasury Money Market Fund;
Institutional Shares;
Fifth Third Strategic Income Fund;
Institutional Shares;
Advisor Shares;
Fifth Third Multicap Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Worldwide Fund
Institutional Shares;
Advisor Shares;
Fifth Third Microcap Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Institutional Government Money Market Fund;
Institutional Shares;
Service Shares;
Fifth Third Institutional Money Market Fund;
Institutional Shares;
Service Shares;
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Fifth Third Michigan Municipal Money Market Fund;
Investment A Shares;
Institutional Shares;
Advisor Shares;
Fifth Third International GDP Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Small Cap Growth Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Large Cap Growth Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Equity Index Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Large Cap Value Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Short Term Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
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Fifth Third Michigan Municipal Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Municipal Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Ohio Tax Exempt Money Market Fund;
Investment A Shares; and
Institutional Shares.
Shares of any Series or Class established in this Section 5 shall have the
following relative rights and preferences:
(a) Assets belonging to Series or Class. All consideration received by
the Trust for the issue or sale of Shares of a particular Series or
Class, together with all assets in which such consideration is invested
or reinvested, all income, earnings, profits, and proceeds thereof from
whatever source derived, including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series
or Class for all purposes, subject only to the rights of creditors, and
shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits and proceeds thereof,
from whatever source derived, including, without limitation, any
proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as
"assets belonging to" that Series or Class. In the event that there are
any assets, income, earnings, profits and proceeds thereof, funds or
payments which are not readily identifiable as belonging to any
particular Series or Class (collectively, "General Assets"), the
Trustees shall allocate such General Assets to, between or among any
one or more of the Series or Classes established and designated from
time to time in such manner and on such basis as they, in their sole
discretion, deem fair and equitable, and any General Assets so
allocated to a particular Series or Class shall belong to that Series
or Class. Each such allocation by the Trustees shall be conclusive and
binding upon the Shareholders of all Series or Classes for all
purposes.
(b) Liabilities Belonging to Series or Class. The assets belonging to
each particular Series or Class shall be charged with the liabilities
of the Trust in respect to that Series or Class and all expenses,
costs, charges and reserves attributable to that Series or Class, and
any general liabilities of the Trust which are not readily identifiable
as belonging to any particular Series or Class shall be allocated and
charged by the Trustees to and among any one or more of the Series or
Classes established and designated from time to time in such manner and
on such basis as the Trustees in their sole discretion deem fair and
equitable. The liabilities, expenses, costs, charges and reserves so
charged to a Series or Class are herein referred to as "liabilities
belonging to" that Series or Class. Each allocation of liabilities
belonging to a Series or Class by the Trustees shall be conclusive and
binding upon the Shareholders of all Series or Classes for all
purposes.
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(c) Dividends, Distributions, Redemptions, Repurchases and
Indemnification. Notwithstanding any other provisions of this
Declaration, including, without limitation, Article X, no dividend or
distribution (including, without limitation, any distribution paid upon
termination of the Trust or of any Series or Class) with respect to,
nor any redemption or repurchase of the Shares of any Series or Class
shall be effected by the Trust other than from the assets belonging to
such Series or Class, nor except as specifically provided in Section 1
of Article XI hereof, shall any Shareholder of any particular Series or
Class otherwise have any right or claim against the assets belonging to
any other Series or Class except to the extent that such Shareholder
has such a right or claim hereunder as a Shareholder of such other
Series or Class.
(d) Voting. Notwithstanding any of the other provisions of this
Declaration, including, without limitation, Section 1 of Article VIII,
only Shareholders of a particular Series or Class shall be entitled to
vote on any matters affecting such Series or Class. Except with respect
to matters as to which any particular Series or Class is affected, all
of the Shares of each Series or Class shall, on matters as to which
such Series or Class is entitled to vote, vote with other Series or
Classes so entitled as a single class. Notwithstanding the foregoing,
with respect to matters which would otherwise be voted on by two or
more Series or Classes as a single class, the Trustees may, in their
sole discretion, submit such matters to the Shareholders of any or all
such Series or Classes, separately.
(e) Fraction. Any fractional Share of a Series or Class shall carry
proportionately all the rights and obligation of a whole Share of that
Series or Class, including rights with respect to voting, receipt of
dividends and distributions, redemption of Shares and termination of
the Trust or of any Series or Class.
(f) Exchange Privilege. The Trustees shall have the authority to
provide that the holders of Shares of any Series or Class shall have
the right to exchange said Shares for Shares of one or more other
Series or Classes in accordance with such requirements and procedures
as may be established by the Trustees.
(g) Combination of Series or Classes. The Trustees shall have the
authority, without the approval of the Shareholders of any Series or
Class, unless otherwise required by applicable law, to combine the
assets and liabilities belonging to a single Series or Class with the
assets and liabilities of one or more other Series or Classes.
(h) Elimination of Series or Classes. At any time that there are no
Shares outstanding of any particular Series or Class previously
established and designated, the Trustees may amend this Declaration of
Trust to abolish that Series or Class and to rescind the establishment
and designation thereof.
ARTICLE IV
THE TRUSTEES
Section 2. Election of Trustees at Meeting of Shareholders.
On a date fixed by the Trustees, which shall be subsequent to the
initial public offering of Shares, the Shareholders shall elect
Trustees. The number of Trustees shall be determined by the Trustees
pursuant to Article IV, Section 5.
Section 3. Term of Office of Trustees.
The Trustees shall hold office during the lifetime of this Trust, and
until its termination as hereinafter provided; except (a) that any
Trustee may resign his office at any time by written instrument signed
by him and delivered to the other Trustees, which shall take effect
upon such delivery or upon such later date as is specified therein; (b)
that any Trustee may be removed at any time by written instrument
signed by at least two-thirds of the number of Trustees prior to such
removal, specifying the date when such removal shall become effective;
(c) that any Trustee who requests in writing to be retired or who has
become mentally or physically incapacitated may be retired by written
instrument signed by a majority of the other Trustees,
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specifying the date of his retirement; and (d) a Trustee may be removed
at any special meeting of Shareholders of the Trust by a vote of
two-thirds of the outstanding Shares.
Section 7. Ownership of Assets.
The assets belonging to each Series or Class shall be held separate and
apart from any assets now or hereafter held in any capacity other than
as Trustee hereunder by the Trustees or any successor Trustee. All of
the assets belonging to each Series or Class or owned by the Trust
shall at all times be considered as vested in the Trustees. No
Shareholder shall be deemed to have a severable ownership interest in
any individual asset belonging to any Series or Class or owned by the
Trust or any right of partition or possession thereof, but each
Shareholder shall have a proportionate undivided beneficial interest in
a Series or Class.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers.
Subject to the provisions set forth in Article III, Section 5(d), the
Shareholders shall have the power to vote, (i) for the election of
Trustees as provided in Article IV, Section 2; (ii) for the removal of
Trustees as provided in Article IV, Section 3(d); (iii) with respect to
any investment adviser or sub-investment adviser as provided in Article
VII, Section 1; (iv) with respect to the amendment of this Declaration
of Trust as provided in Article XII, Section 7; (v) to the same extent
as the shareholders of a Massachusetts business corporation as to
whether or not a court action, proceeding or claim should be brought or
maintained derivatively or as a class action on behalf of the Trust or
the Shareholders; and (vi) with respect to such additional matters
relating to the Trust as may be required by law, by this Declaration of
Trust, or the By-Laws of the Trust or any regulation of the Trust or
the Commission or any State, or as the Trustees may consider desirable.
Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote, and each fractional Share shall be
entitled to a proportionate fractional vote. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in
person or by proxy. Until Shares of a Series or Class are issued, the
Trustees may exercise all rights of Shareholders of such Series or
Class with respect to matters affecting such Series or Class, and may
take any action with respect to the Trust or such Series or Class
required or permitted by law, this Declaration of Trust or any By-Laws
of the Trust to be taken by Shareholders.
Section 2. Meetings.
A Shareholders meeting shall be held as specified in Section 2 of
Article IV at the principal office of the Trust or such other place as
the Trustees may designate. Special meetings of the Shareholders may be
called by the Trustees or the Chief Executive Officer of the Trust and
shall be called by the Trustees upon the written request of
Shareholders owning at least one-tenth of the outstanding Shares of all
Series and Classes entitled to vote. Shareholders shall be entitled to
at least fifteen days' notice of any meeting.
Section 3. Quorum and Required Vote.
Except as otherwise provided by law, to constitute a quorum for the
transaction of any business at any meeting of Shareholders there must
be present, in person or by proxy, holders of more than fifty percent
of the total number of outstanding Shares of all Series and Classes
entitled to vote at such meeting. When any one or more Series or
Classes is entitled to vote as a single Series or Class, more than
fifty percent of the shares of each such Series of Class entitled to
vote shall constitute a quorum at a Shareholder's meeting of that
Series or Class. If a quorum shall not be present for the purpose of
any vote that may properly come before the meeting, the Shares present
in person or by proxy and entitled to vote at such meeting on such
matter may, by plurality vote, adjourn the meeting from time to time to
such place and time without further
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notice than by announcement to be given at the meeting until a quorum
entitled to vote on such matter shall be present, whereupon any such
matter may be voted upon at the meeting as though held when originally
convened. Subject to any applicable requirement of law or of this
declaration of Trust or the By-Laws, a plurality of the votes cast
shall elect a Trustee, and all other matters shall be decided by a
majority of the votes cast and entitled to vote thereon.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions.
(a) The Trustees may from time to time declare and pay dividends to the
Shareholders of any Series or Class, and the amount of such dividends
and the payment of them shall be wholly in the discretion of the
Trustees. Such dividends may be accrued and automatically reinvested in
additional Shares (or fractions thereof) of the relevant Series or
Class or paid in cash or additional Shares of such Series or class, all
upon such terms and conditions as the Trustees may prescribe.
(c) All dividends and distributions on Shares of a particular Series or
Class shall be distributed pro rata to the holders of that Series or
Class in proportion to the number of Shares of that Series or Class
held by such holders and recorded on the books of the Trust or its
transfer agent at the date and time of record established for that
payment.
Section 2. Redemptions and Repurchases.
(a) In case any Shareholder of record of any Series or Class at any
time desires to dispose of Shares of such Series or Class recorded in
his name, he may deposit a written request (or such other form of
request as the Trustees may from time to time authorize) requesting
that the Trust purchase his Shares, together with such other
instruments or authorizations to effect the transfer as the Trustees
may from time to time require, at the office of the Transfer Agent, and
the Trust shall purchase his Shares out of assets belonging to such
Series or Class. The purchase price shall be the net asset value of his
shares reduced by any redemption charge as the Trustees from time to
time may determine.
Payment for such Shares shall be made by the Trust to the Shareholder
of record within that time period required under the 1940 Act after the
request (and, if required, such other instruments or authorizations of
transfer) is deposited, subject to the right of the Trustees to
postpone the date of payment pursuant to Section 4 of this Article X.
If the redemption is postponed beyond the date on which it would
normally occur by reason of a declaration by the Trustees suspending
the right of redemption pursuant to Section 4 of this Article X, the
right of the Shareholder to have his Shares purchased by the Trust
shall be similarly suspended, and he may withdraw his request (or such
other instruments or authorizations of transfer) from deposit if he so
elects; or, if he does not so elect, the purchase price shall be the
net asset value of his Shares determined next after termination of such
suspension (reduced by any redemption charge), and payment therefor
shall be made within the time period required under the 1940 Act.
Section 5. Trust's Right to Redeem Shares.
The Trust shall have the right to cause the redemption of Shares of any
Series or Class in any Shareholder's account for their then current net
asset value and promptly make payment to the Shareholder (which payment
may be reduced by any applicable redemption charge), if at any time the
total investment in the account does not have a minimum dollar value
determined from time to time by the Trustees in their sole discretion.
ARTICLE XI
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LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Personal Liability and Indemnification of Shareholders.
The Trustees, officers, employees or agents of the Trust shall have no
power to bind any Shareholder of any Series or Class personally or to
call upon such Shareholder for the payment of any sum of money or
assessment whatsoever, other than such as the Shareholder may at any
time agree to pay by way of subscription to any Shares or otherwise.
No Shareholder or former Shareholder of any Series or Class shall be
liable solely by reason of his being or having been a Shareholder for
any debt, claim, action, demand, suit, proceeding, judgement, decree,
liability or obligation of any kind, against, or with respect to the
Trust or any Series or Class arising out of any action taken or omitted
for or on behalf of the Trust or such Series or Class, and the Trust or
such Series or Class shall be solely liable therefor and resort shall
be had solely to the property of the relevant Series or Class of the
Trust for the payment or performance thereof.
Each Shareholder or former Shareholder of any Series or Class (or their
heirs, executors, administrators or other legal representatives or, in
case of a corporate entity, its corporate or general successor) shall
be entitled to be indemnified and reimbursed by the Trust to the full
extent of such liability and the costs of any litigation or other
proceedings in which such liability shall have been determined,
including, without limitation, the fees and disbursements of counsel
if, contrary to the provisions hereof, such Shareholder or former
Shareholder of such Series or Class shall be held to be personally
liable. Such indemnification and reimbursement shall come exclusively
from the assets of the relevant Series or Class.
The Trust shall, upon request by a Shareholder or former Shareholder,
assume the defense of any claim made against any Shareholder for any
act or obligation of the Trust or any Series or Class and satisfy any
judgment thereon.
Section 3. Express Exculpatory Clauses and Instruments.
The Trustees shall use every reasonable means to assure that all
persons having dealings with the Trust or any Series or Class shall be
informed that the property of the Shareholders and the Trustees,
officers, employees and agents of the Trust or any series or Class
shall not be subject to claims against or obligations of the Trust or
any other Series or Class to any extent whatsoever. The Trustees shall
cause to be inserted in any written agreement, undertaking or
obligation made or issued on behalf of the Trust or any Series or Class
(including certificates for Shares of any Series or Class) an
appropriate reference to the provisions of this Declaration, providing
that neither the Shareholders, the Trustees, the officers, the
employees nor any agent of the Trust or any Series or Class shall be
liable thereunder, and that the other parties to such instrument shall
look solely to the assets belonging to the relevant Series or class for
the payment of any claim thereunder or for the performance thereof; but
the omission of such provisions from any such instrument shall not
render any Shareholder, Trustee, officer, employee or agent liable, nor
shall the Trustee, or any officer, agent or employee of the Trust or
any Series or Class be liable to anyone for such omission. If,
notwithstanding this provision, any Shareholder, Trustee, officer,
employee or agent shall be held liable to any other person by reason of
the omission of such provision from any such agreement, undertaking or
obligation, the Shareholder, Trustee, officer, employee or agent shall
be indemnified and reimbursed by the Trust.
ARTICLE XII
MISCELLANEOUS
Section 3. Establishment of Record Dates.
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The Trustees may close the Share transfer books of the Trust maintained
with respect to any Series or Class for a period not exceeding sixty
(60) days preceding the date of any meeting of Shareholders of the
Trust or any Series or Class, or the date for the payment of any
dividend or the making of any distribution to Shareholders, or the date
for the allotment of rights, or the date when any change or conversion
or exchange or Shares of any Series or Class shall go into effect; or
in lieu of closing the Share transfer books as aforesaid, the Trustees
may fix in advance a date, not exceeding sixty (60) days preceding the
date of any meeting of Shareholders of the Trust or any Series or
Class, or the date for the payment of any dividend or the making of any
distribution to Shareholders of any Series or Class, or the date for
the allotment of rights, or the date when any change or conversion or
exchange of Shares of any Series or Class shall go into effect, or the
last day on which the consent or dissent of Shareholders of any Series
or Class may be effectively expressed for any purpose, as a record date
for the determination of the Shareholders entitled to notice of, and,
to vote at, any such meeting and any adjournment thereof, or entitled
to receive payment of any such dividend or distribution, or to any such
allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of shares, or to exercise the right to
give such consent or dissent, and in such case such Shareholders and
only such Shareholders as shall be Shareholders of record on the date
so fixed shall be entitled to such notice of, and to vote at, such
meeting, or to receive payment of such dividend or distribution, or to
receive such allotment or rights, or to exercise such rights, as the
case may be, notwithstanding, after such date fixed aforesaid, any
transfer of any Shares on the books of the Trust maintained with
respect to any Series or Class. Nothing in the foregoing sentence shall
be construed as precluding the Trustees from setting different record
dates for different Series or Classes.
Section 4. Termination of Trust.
(c) Subject to a Majority Shareholder Vote by such Series or Class, the
Trustees may at any time sell and convert into money all the assets of
the Trust or any Series of Class. Upon making provision for the payment
of all outstanding obligations, taxes and other liabilities, accrued or
contingent, belonging to each Series or Class, the Trustees shall
distribute the remaining assets belonging to each Series or Class
ratably among the holders of the outstanding Shares of that Series or
Class.
Section 5. Offices of the Trust, Filing of Copies, Headings, Counterparts.
The Trust shall maintain a usual place of business in Massachusetts,
which, initially, shall be 2 Oliver Street, c/o CT Corporate Systems,
Boston, Massachusetts, and shall continue to maintain an office at such
address unless changed by the Trustees to another location in
Massachusetts. The Trust may maintain other offices as the Trustees may
from time to time determine. The original or a copy of this instrument
and of each declaration of trust supplemental hereto shall be kept at
the office of the Trust where it may be inspected by any Shareholder. A
copy of this instrument and of each supplemental declaration of trust
shall be filed by the Trustees with the Massachusetts Secretary of
State and the Boston City Clerk, as well as any other governmental
office where such filing may from time to time be required. Headings
are placed herein for convenience of reference only and in case of any
conflict, the text of this instrument, rather than the headings shall
control. This instrument may be executed in any number of counterparts
each of which shall be deemed an original.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. Special Meetings.
A special meeting of the Shareholders of the Trust or of a particular
Series or Class shall be called by the Secretary whenever ordered by
the Trustees, the Chairman or requested in writing by the holder or
holders of at least one-tenth of the outstanding Shares of the Trust or
of the relevant Series or Class, entitled to vote. If the Secretary,
when so ordered or requested, refuses or neglects for more than two
days to call such special meeting, the Trustees, Chairman or the
Shareholders so requesting may, in the name of the
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Secretary, call the meeting by giving notice thereof in the manner
required when notice is given by the Secretary.
ARTICLE IX
INDEMNIFICATION OF TRUSTEES AND OFFICERS
Section 2. No indemnification.
No indemnification shall be provided hereunder to a Trustee or officer
against any liability to the Trust or any Series or Class or the
Shareholders of any Series or Class by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office.
ARTICLE XIV
REPORT TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders of
each Series or Class a written financial report of the transactions of
that Series or Class including financial statements which shall at
least annually be certified by independent public accountants.
(6) (i) Form of Investment Advisory Contract between the Registrant
and Fifth Third Asset Management Inc. (incorporated by
reference to Registrant's Post-Effective Amendment No. 37 on
Form N-1A filed on or about January 30, 2001).
(A) Form of Schedule A to the Investment Advisory
Contract (incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on
or about March 14, 2001).
(ii) Investment Advisory Contract of the Fifth Third Pinnacle Fund
(incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on or about October 30,
1998).
(iii) Form of Sub-Advisory Agreement for the Fifth Third
International Equity Fund between Fifth Third Asset Management
Inc. and Morgan Stanley Asset Management, Inc. (incorporated
by reference to Registrant's Post-Effective Amendment No. 38
on Form N-1A filed on or about March 14, 2001).
(A) Form of Schedule A to the Sub-Advisory Agreement
(incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on
or about March 14, 2001).
(iv) Form of Sub-Advisory Agreement for the Fifth Third Ohio Tax
Exempt Money Market Fund between Fifth Third Asset Management
Inc. and Fort Washington Investment Advisors, Inc.
(incorporated by reference to Registrant's Post-Effective
Amendment No. 38 on Form N-1A filed on or about March 14,
2001).
(A) Form of Schedule A to the Sub-Advisory Agreement
(incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on
or about March 14, 2001).
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(7) (i) Distribution Agreement of the Registrant dated September 29,
2000 (incorporated by reference to Registrant's Post-Effective
Amendment No. 36 on Form N-1A filed on or about November 30,
2000).
(A) Form of Amended Schedules A, B and C to the
Distribution Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 38 on Form
N-1A filed on or about March 14, 2001).
(ii) Administrative Service Agreement of the Registrant
(incorporated by reference to Registrant's Post-Effective
Amendment No. 19 on Form N-1A filed on or about October 28,
1996).
(A) Form of Amended Exhibit A to the Administrative
Service Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 38 on Form
N-1A filed on or about March 14, 2001).
(8) Not applicable.
(9) (i) Custody Agreement of the Registrant (incorporated by reference
to Registrant's Post-Effective Amendment No. 25 on Form N-lA
filed on or about November 28, 1997).
(A) Amended Exhibit B to Custody Agreement (incorporated
by reference to Registrant's Post-Effective Amendment
No. 22 on Form N-1A filed on or about September 30,
1997).
(B) Amendment dated May 18, 1999 to the Custody Agreement
(incorporated by reference to Registrant's
Post-Effective Amendment No. 29 on Form N-1A filed on
or about October 1, 1999).
(ii) Foreign Custody Agreement dated May 25, 1999 between Fifth
Third Bank and The Bank of New York (incorporated by reference
to Registrant's Post-Effective Amendment No. 29 on Form N-1A
filed on or about October 1, 1999).
(A) Foreign Custody Manager Agreement dated May 25, 1999
between the Registrant and The Bank of New York
(incorporated by reference to Registrant's
Post-Effective Amendment No. 29 on Form N-1A filed on
or about October 1, 1999).
(B) Foreign Custody Manager Letter Agreement dated May
25, 1999 between the Registrant and Fifth Third Bank
(incorporated by reference to Registrant's
Post-Effective Amendment No. 29 on Form N-1A filed on
or about October 1, 1999).
(10) (i) Transfer Agency and Accounting Services Agreement of the
Registrant (incorporated by reference to Registrant's
Post-Effective Amendment No. 15 on Form N-1A filed on or about
February 28, 1995).
(A) Form of Amended Schedule A to the Transfer Agency and
Accounting Services Agreement (incorporated by
reference to Registrant's Post-Effective Amendment
No. 38 on Form N-1A filed on or about March 14,
2001).
(ii) Management and Administration Agreement of the Registrant
(incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on or about September 30,
1997).
(A) Amendment to the Management and Administration
Agreement dated January 1, 2000 (incorporated by
reference to Registrant's Post-Effective Amendment
No. 35 on Form N-1A filed on or about September 29,
2000).
-13-
(B) Form of Amended Schedule A to the Management and
Administration Agreement (incorporated by reference
to Registrant's Post-Effective Amendment No. 38 on
Form N-1A filed on or about March 14, 2001).
(iii) Sub-Administration Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 22 on Form N-1A
filed on or about September 30, 1997).
(A) Amendment to the Sub-Administration Agreement dated
January 1, 2000 (incorporated by reference to
Registrant's Post-Effective Amendment No. 35 on Form
N-1A filed on or about September 29, 2000).
(B) Form of Amended Schedule A to the Sub-Administration
Agreement (incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on
or about March 14, 2001).
(iv) Sub-Transfer Agency Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 35 on Form N-1A
filed on or about September 29, 2000).
(A) Schedules A, B, and C to the Sub-Transfer Agency
Agreement (incorporated by reference to Registrant's
Post-Effective Amendment No. 35 on Form N-1A filed on
or about September 29, 2000).
(v) Amended Rule l2b-1 Plan dated December 1, 1995 (incorporated
by reference to Registrant's Post-Effective Amendment No. 35
on Form N-1A filed on or about September 29, 2000).
(A) Form of Amended Exhibits A, B, C, and D to the Rule
12b-1 Plan (incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on
or about March 14, 2001).
(vi) Rule 12b-1 Agreement dated September 20, 2000 (incorporated by
reference to Registrant's Post-Effective Amendment No. 35 on
Form N-1A filed on or about September 29, 2000).
(A) Form of Amended Exhibit A to the Rule 12b-1 Agreement
(incorporated by reference to Registrant's
Post-Effective Amendment No. on Form N-1A filed on or
about March 14, 2001).
(vii) Investment B Rule 12b-1 Plan dated April 1, 2000 (incorporated
by reference to Registrant's Post-Effective Amendment No. 35
on Form N-1A filed on or about September 29, 2000).
(A) Form of Amended Exhibit A to the Investment B Rule
12b-1 Plan (incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on
or about March 14, 2001).
(viii) Investment B Rule 12b-1 Agreement including Exhibits A and B
dated September 20, 2000 (incorporated by reference to
Registrant's Post-Effective Amendment No. 35 on Form N-1A
filed on or about September 29, 2000).
(A) Form of Amended Exhibit A to the Investment B Rule
12b-1 Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 38 on Form
N-1A filed on or about March 14, 2001).
(ix) Form of Amended Multiple Class Plan (incorporated by reference
to Registrant's Post-Effective Amendment No. 38 on Form N-1A
filed on or about March 14, 2001).
(11) Opinion and Consent of Ropes & Gray Regarding Securities is filed
herewith.
-14-
(12) Opinion and Consent of Ropes & Gray Regarding Tax Matters is filed
herewith.
(13) (i) Code of Ethics for Fifth Third Funds (incorporated by reference to
Registrant's Post-Effective Amendment No. 35 on Form N-1A filed on or
about September 29, 2000).
(ii) Code of Ethics for Fifth Third Bank (incorporated by reference to
Registrant's Post-Effective Amendment No. 35 on Form N-1A filed on or
about September 29, 2000).
(iii) Code of Ethics for BISYS Fund Services (incorporated by reference
to Registrant's Post-Effective Amendment No. 35 on Form N-1A filed on
or about September 29, 2000).
(iv) Code of Ethics for Morgan Stanley Dean Witter Investment
Management Inc. (incorporated by reference to Registrant's
Post-Effective Amendment No. 35 on Form N-1A filed on or about
September 29, 2000).
(14) (a) Consent of Arthur Andersen is filed herewith.
(b) Consent of KPMG is filed herewith.
(15) Not applicable.
(16) Executed Powers of Attorney are filed herewith.
(17) (a) Fifth Third Funds Statement of Additional Information dated October
29, 2002 is filed herewith.
(b) Fifth Third Funds Semi-Annual Report is filed herewith.
Item 17. Undertakings
(1) The registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is a part
of this registration statement by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c) of the Securities
Act, the reoffering prospectus will contain the information called for
by the applicable registration form for reofferings by persons who may
be deemed underwriters, in addition to the information called for by
the other items of the applicable form.
(2) The registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
-15-
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant in the City of Washington, District of
Columbia, on the 24th day of April, 2002.
FIFTH THIRD FUNDS
BY: /s/ Jeffrey C. Cusick
---------------------------------------
Jeffrey C. Cusick, President
Signature Title Date
* /s/ Jeffrey C. Cusick President
- ---------------------------
Jeffrey C. Cusick (Principal Executive Officer) April 24, 2002
* /s/ Adam S. Ness Treasurer (Principal Financial
- ---------------------------
Adam S. Ness and Accounting Officer) April 24, 2002
* /s/ Edward Burke Carey Chairman and Trustee April 24, 2002
- ---------------------------
Edward Burke Carey
* /s/ David J. Durham Trustee April 24, 2002
- ---------------------------
David J. Durham
* /s/ J. Joseph Hale, Jr. Trustee April 24, 2002
- ---------------------------
J. Joseph Hale, Jr.
* /s/ John E. Jaymont Trustee April 24, 2002
- ---------------------------
John E. Jaymont
*By: /s/ Alyssa Albertelli
---------------------------------------------
Alyssa Albertelli, as Attorney-in-fact
pursuant to Powers of Attorney filed herewith
-16-
Fifth Third Large Cap Growth Fund
PROXY FOR A SPECIAL MEETING OF
SHAREHOLDERS, JULY 12, 2002
This proxy is solicited on behalf of the
Trustees of the Fifth Third Large Cap Growth Fund.
The undersigned hereby appoints and , and each of them with full power of
substitution as proxy of the undersigned, and hereby authorizes them to
represent and to vote, as designated below, at the Special Meeting of
Shareholders of the Fifth Third Large Cap Growth Fund on July 12, 2002 at 10:00
a.m., Eastern time, and at any adjournments thereof, all of the units of
beneficial interest ("Shares") of the Large Cap Growth Fund which the
undersigned would be entitled to vote if personally present.
1. Approval of the Plan of Reorganization providing for the transfer of
all of the assets of the Fifth Third Large Cap Growth Fund to the Fifth
Third Large Cap Core Fund+ in exchange for Shares of the Fifth Third
Large Cap Core Fund and the assumption by the Fifth Third Large Cap
Core Fund of all of the liabilities of the Fifth Third Large Cap Growth
Fund, followed by the liquidation of the Fifth Third Large Cap Growth
Fund and the distribution of Shares of the Fifth Third Large Cap Core
Fund to the shareholders of the Fifth Third Large Cap Growth Fund.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. To transact any other business as may properly come before the meeting or
any adjournment thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this Proxy will be voted
FOR Proposals (1) and (2) and to authorize the Proxies, in their discretion, to
vote upon such other matters as may properly come before the meeting. The
Trustees recommend a vote FOR items (1) and (2).
NOTE: Please sign exactly as the name appears on this card. EACH joint owner
should sign. When signing as executor, administrator, attorney, trustee or
guardian, or as custodian for a minor, please give the full title as such. If a
corporation, please sign in full corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Please be sure to sign and date this Proxy.
----------------------------------------
Signature of Shareholder(s)
----------------------------------------
Signature of Shareholder(s)
Dated:______________, 2002
+ Currently named the Fifth Third Large Cap Value Fund, to be renamed the Fifth
Third Large Cap Core Fund upon consummation of the reorganization.
PLEASE EXECUTE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE
OR
Vote On-Line
1. Read the enclosed Proxy Statement and have your Proxy Card* at hand.
2. Go to the Web Site www.proxyvote.com.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Cast your vote using the easy-to-follow instructions.
Vote By Toll-Free Phone Call
1. Read the enclosed Proxy Statement and have your Proxy Card* at hand.
2. Call the toll-free number found on your Proxy Card.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Cast your vote using the easy-to-follow instructions.
*DO NOT MAIL THE PROXY CARD IF VOTING BY INTERNET OR TELEPHONE.
-2-
EXHIBIT INDEX
(4) Form of Plan of Reorganization of Fifth Third Funds.
(11) Opinion and Consent of Ropes & Gray Regarding Securities.
(12) Opinion and Consent of Ropes & Gray Regarding Tax Matters.
(14)(a) Consent of Arthur Andersen
(14)(b) Consent of KPMG
(16) Powers of Attorney
(17)(a) Fifth Third Funds Statement of Additional Information
(17)(b) Fifth Third Funds Semi-Annual Report